Bunzl plc · LSE:BNZL
Bunzl — FY2012 Earnings Presentation
40 slides from Bunzl's earnings presentation, Nov 6, 2013
Slide 1: Annual Results 2012
ANNUAL RESULTS 2012
Slide 2: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A Q - 1- 2012 Annual Results Presentation
Slide 3: Highlights
Highlights Proven and Significant g Good set of consistent year for results strategy acquisitions Adjusted Dividend up earnings per 7% share up 7%* *At constant exchange, before intangible amortisation, acquisition related costs and disposal of business - 2- 2012 Annual Results Presentation
Slide 4: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4 Q&A 4. - 3- 2012 Annual Results Presentation
Slide 5: Income Statement
Income Statement Growth % Constant £ £m 2012% 2011% R Reported t d E h Exchange Revenue 5,359.2% 5,109.5% 5 6)) % % Operating p gpprofit* 352.4% 335.7% 5 7)) Margin*† 6.6% 6.5% * Before intangible amortisation and acquisition related costs † At constant exchange rates - 4- 2012 Annual Results Presen
Slide 6: Income Statement
Income Statement Growth % Constant £m 2012) 2011) Reported Exchange Operating profit* 352.4) 335.7) 5 7) Net finance cost (28.5) (29.6) Profit before tax† 323.9) 306.1) 6 8) Interest cover (x) 12.4) 11.3) Effective tax rate (%) 27.7) 27.5) † Adjusted earnings per share (p) 71.8) 68.5) 5 7) Dividend
Slide 7: Dividend per Share (p)
Dividend per Share (p) 28.2 26.4 CAGR = 10% 23.4 21.6 20.6 18.7 17.0 15.7 13.3 2004 2005 2006 2007 2008 2009 2010 2011 2012 Consistently strong dividend growth - 6- 2012 Annual Results Presentation
Slide 8: Balance Sheet
Balance Sheet £m 2012) 2011) Intangibles 1,322.9) 1,256.8) Tangibles 111.4) 109.0) Working capital 501.4) 403.3) Oth liabilities Other li biliti (236 6) (236.6) (235 2) (235.2) 1,699.1) 1,533.9) Pension deficit (75.5) (74.3) Net debt* (738.1) (652.9) Equity 885.5) 806.7) Net debt/EBITDA (x) 1.8) 1.7
Slide 9: Cash Flow
Cash Flow £ £m 2012)% 2011%) Operating cash flow* 328.9)% 369.2)% Interest (30.6)% (30.6)% Tax (63.6)% (63.4)% Free cash flow 234.7)% 275.2)% Dividends (85.7)% (68.9)% A Acquisitions i iti (254 7)% (254.7)% (161 3)% (161.3)% Disposal -%) 30.6%) Employee share schemes (3 7)% (3.7)% (12 6)% (12.6)% Ne
Slide 10: Cash Generation
Cash Generation A Average Cash C hC Conversion i * 97% 110% 103% 102% 95% 93% 92% 92% 93% 93% 2004** 2005** 2006 2007 2008 2009 2010 2011 2012 Strong cash flow = Growing dividend + Acquisitions * Operating cash flow before acquisition related costs to operating profit before intangible amortisation
Slide 11: Financing
Financing Committed Facilities Maturity Profile 400 300 Bank facilities - undrawn ndra n 123 Bank facilities - drawn 50 US dollar and sterling bonds 200 287 50 86 100 49 147 80 33 112 67 59 67 31 32 31 41 32 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 • Agreed £150m of bank facilities •
Slide 12: Financial Summary
Financial Summary Revenue • Revenue R growthh 6%† and • Operating profit* up 7%† Profit • Operating p g margin g * up p 10 bp p† Capital • ROACE of 56.4% management • Cash conversion at 93% and Cash flow • Net debt to EBITDA 1.8x, with £255m of acquisitions EPS and • Adjusted EPS** growth 7% Di id d
Slide 13: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -12- 2012 Annual Results Presentation
Slide 14: Business Review
Business Review 1. Operations Review 2. Strategy gy 3. Market Development Examples 4. Prospects -13- 2012 Annual Results Presentation
Slide 15: Revenue Growth Bridge
R Revenue G Growth th Bridge B id £m 5,500 2.6% 4.5% (0.9%) 6.2% 5,400 5,300 5,200 5,100 4,704 4,830 5,000 4,900 5,359 4,800 5,045 4,700 4,600 4,500 Revenue Organic Acquisitions Disposal Revenue FY 11 FY 12 (FX Adjusted) -14- 2012 Annual Results Presentation
Slide 16: Customer Markets
Customer Markets Other 4% Healthcare 7% Non-Food Non Food Retail 8% Grocery 29% Safety 9% Cleaning & Hygiene 14% Foodservice 29% c.80% resilient – Grocery, Foodservice, C&H, Healthcare -15- 2012 Annual Results Presentation
Slide 17: Business Area Analysis
Business Area Analysis Revenue Operating profit* 7% 9% 19% 17% 50% 54% 20% 24% North America Continental Europe p UK & Ireland Rest of the World Diversified by geography *Before intangible amortisation and acquisition related and corporate costs -16- 2012 Annual Results Presentation
Slide 18: Overview
Overview St Strong managementt focus f •GGDP+ organic o ga c ggrowth o t • 13 high quality acquisitions • Cost reduction and efficiency initiatives Strong overall performance • North America – six acquisitions / operating margin improvement • Continental Europe – steps to reduce cost base / second m
Slide 19: North America
North America Growth % Constant £m 2012% 2011% Reported Exchange Revenue 2,905.8% 2,727.9% 7) 6) Operating profit* 184.6% 169.2% 9) 8) Margin* 6.4% 6.2% Return on operating capital 64.3% 65.0% • Improvement of 20bp in operating margin • Good growth in grocery – significant Q3 2011 customer win • Fur
Slide 20: Continental Europe
Continental Europe Growth % Constant £m 2012% 2011% Reported Exchange Revenue 1,079.4% 1,067.1% 1) 8) Operating profit* 87.5% 95.6% (8) (2) Margin* 8.1% 9.0% Return on operating capital 42.4% 48.0% • Revenue growth bolstered by acquisitions • Lower margins due to pricing pressure and weaker euro imp
Slide 21: UK & Ireland
UK & Ireland Growth % Constant £m 2012% 2011% Reported Exchange Revenue 992.1% 996.6% 0) 0) Operating profit* 65.2% 60.2% 8) 8) Margin* 6.6% 6.0% Return on operating capital 86.5% 66.4% • Higher organic growth and operating margin up strongly • Continued focus on operating efficiency and own brand d
Slide 22: Rest of the World
Rest of the World Growth % Constant £m 2012% 2011% Reported Exchange Revenue 381.9% 317.9% 20) 23) Operating profit* 33.2% 28.4% 17) 22) Margin* 8.7% 8.9% Return on operating capital 54.2% 60.3% • Strong organic growth • Australasia − Strong performance in largest business − Star Services,, Atlas He
Slide 23: Strategy
Strategy Operating Model Efficiencies GDP+ Acquisition Organic Growth Growth i i i ROIC Acquisition A G Growth h 17.9% ROIC remains high – increased in 2012 -22- 2012 Annual Results Presentation
Slide 24: Acquisition Growth - 2012
Acquisition Growth - 2012 Business Acquired Country Sector Revenue* Revenue CDW Merchants February USA Non-food retail £10m Star Services April Australia Foodservice £8m FoodHandler April USA Foodservice £66m Zahav April Israel Foodservice £12m Service Paper June USA Grocery / Foodservice £39m Distr
Slide 25: Acquisition Growth Model
Acquisition Growth Model 27 countries 23 countries 18 countries 12 countries 7 countries 1997* 2003* 2005* 2008 2012 C ti i geographic Continuing hi expansion i * Continuing operations -24- 2012 Annual Results Presentation
Slide 26: Acquisition Growth - Track Record
Acquisition Growth - Track Record 2004 2005 2006 2007 2008 2009 2010 2011 2012 Number of acquisitions 7 7 9 8 7 2 9 10 13 Committed acquisition 302 129 162 197 123 6 126 185 272 spend (£m) Annualised acquisition 430 270 386 225 151 27 154 204 518 revenue (£m) 04-05 continuing operations only Average
Slide 27: Annualised Acquisition Revenue
Annualised Acquisition Revenue £m 2004 2005 2006 2007 2008 2009 2010 2011 2012 North America 115 198 103 15 - - 35 7 410 Continental Europe 301 61 7 100 52 - 115 96 23 UK & IIreland l d - 2 267 110 39 27 - 39 16 Rest of the World 14 9 9 - 60 - 4 62 69 Group 430 270 386 225 151 27 154 204 518 04-05 c
Slide 28: Acquisition Growth - Brazil
Acquisition Growth - Brazil 2008 – Market Entry • Acquisition of Protcap • Entry into safety sector 2010 – AM Supply • Expansion in safety sector 2011 – Ideal • Entry into cleaning and hygiene sector 2011 2010 2012 2011 – Danny 2008 2011 • Expansion in safety sector / own label 2012 – Vicsa Brasil •
Slide 29: Acquisition Growth - Brazil
Acquisition Growth - Brazil Vicsa Brasil Revenue Ideal Danny AM Supply Prot-Cap 2008 2010 2011 2012 Safety Cleaning & Hygiene Foodservice Healthcare Retail Revenue CAGR of 21% since market entry in 2008 -28- 2012 Annual Results Presentation
Slide 30: Acquisition Growth – Switzerland and Israel
Acquisition Growth – Switzerland and Israel S it l d Switzerland I Israel l 2010 . Entry Silco 2011 2010 2012 2012 2008 2011 Expansion . Zahav -29- 2012 Annual Results Presentation
Slide 31: Financial Track Record
Financial Track Record Revenue (£bn) Operating profit (£m) 371 04-05 continuing operations only 5.4 Before amortisation and acquisition 353 5.1 4.8 related and corporate costs 323 4.6 312 04-05 continuing operations only 297 4.2 259 3.6 241 3.3 218 2.9 183 2.4 2004 2005 2006 2007 2008 2009 2010 2011
Slide 32: Prospects
Prospects North • Impact from six acquisitions in 2012 America • Improved organic growth v H2 2012 Continental C ti t l • Some growth Europe • Stable operating margin UK & • Continued improvement Ireland • Organic growth and cost reduction initiatives Rest of • Good organic growth the World • Impact
Slide 33: Annual Results 2012
ANNUAL RESULTS 2012
Slide 34: Appendix 1 - Net Debt
Appendix 1 - Net Debt £m 2012) 2011 Opening net debt (652 9) (652.9) (716 8) (716.8) Net cash (outflow)/inflow (109.4) 63.0) Currency 24 2) 24.2) 0 9) 0.9) Closing net debt (738.1) (652.9) -33- 2012 Annual Results Presentation
Slide 35: Appendix 2 - Cash Flow
Appendix 2 - Cash Flow £m 2012)% 2011)% Operating profit* 352 4)% 352.4)% 335 7)% 335.7)% Depreciation 23.0)% 25.4)% Working capital movement (22.4)% 31.4)% Other (3.9)% (2.4)% † Cash flow from operations p 349.1%)) 390.1%)) Net capital expenditure (20.2)% (20.9)% Operating cash flow† 328.9%) 369.2%
Slide 36: Appendix 3 – Impact of Change to IAS 19
Appendix 3 – Impact of Change to IAS 19 £m 2012 net finance cost 28 5 28.5 Net financial return (IAS 19) 2.2 2012 net finance cost ex pensions 30 7 30.7 Pensions interest charge (IAS 19 revised) 3.3 Restated 2012 net finance cost 34 0 34.0 Restated 2012 profit before tax* 318.4 Restated 2012 adjuste
Slide 37: Appendix 4 - Historical Data
Appendix 4 - Historical Data 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Revenue (£m) 1,783 2,129 2,231 2,276 2,439 2,924 3,333 3,582 4,177 4,649 4,830 5,109 5,359 Operating O ti profit* (£m) 117 147 152 158 169 203 226 243 281 296 307 336 352 Margin* (%) 6.6 6.9 6.8 6.9 6.9 7.0
Slide 38: Appendix 5 - Exchange Rates
Appendix 5 - Exchange Rates 2012 2011 Average rate US$ 1.59 1.60 € 1.23 1.15 Closing rate US$ 1.63 1.55 € 1.23 1.20 -37- 2012 Annual Results Presentation
Slide 39: Appendix 6 - Key Acquisition Parameters
Appendix 6 - Key Acquisition Parameters Consolidated B2B Goods not for d t offering product ff i resale (“one stop shop”) Fragmented Further market Sectors with growth consolidation and customer base synergies Opportunity for Attractive financial Small % of total “own label” returns customer spend p
Slide 40: Disclaimer
Disclaimer This document Thi d h been has b preparedd by b Bunzl B l plc l (the ( h “Company”) “C ”) solely l l for f use at the h presentation i off the Company’s annual results announcement in respect of the year ended 31 December 2012. For the purposes of this disclaimer, “Presentation” shall mea