Bunzl plc · LSE:BNZL
Bunzl — FY2008 Earnings Presentation
32 slides from Bunzl's earnings presentation, 2009
Slide 1: Annual Results 2008
ANNUAL RESULTS 2008 -0- 2008 Annual Results Presentation
Slide 2: Agenda
Agenda 1. Anthony Habgood, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -1- 2008 Annual Results Presentation
Slide 3: Agenda
Agenda 1. Anthony Habgood, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -2- 2008 Annual Results Presentation
Slide 4: Exchange Rates
Exchange Rates GBP/USD GBP/EUR 1.4 2.0 1.3 1.85 Average rate 1.26 1.8 Average rate 1.2 1.6 1.1 Closing rate Closing rate 1.44 1.03 1.4 1.0 Jan 08 Dec 08 Jan 08 Dec 08 • Currency impact largely translation • At current rates expect greater impact on 2009 earnings • Exchange increased net debt by £169
Slide 5: Income Statement
Income Statement Growth % Constant £m 2008% 2007% Reported Exchange Revenue 4,177.3% 3,581.9% 17 8 % Operating profit* 280.5% 242.9% 15 7 Margin* 6.7% 6.8% *Before intangible amortisation -4- 2008 Annual Results Presentation
Slide 6: Income Statement
Income Statement Growth % Constant £m 2008) 2007) Reported Exchange Operating profit* 280.5) 242.9) 15 7 Net finance cost (37.6) (27.4) Profit before tax* 242.9) 215.5) Effective tax rate (%) 30.8) 31.6) Adjusted earnings per share* (p) 52.7) 45.1) 17 9 Dividend per share (p) 20.6) 18.7) 10 Dividend
Slide 7: Balance Sheet
Balance Sheet £m 2008) 2007) Intangibles 1,301.3) 990.3) Tangibles 111.3) 91.0) Working capital 402.1) 313.8) Other liabilities (281.0) (238.1) 1,533.7) 1,157.0) Pension deficit (50.4) (13.2) Net debt (870.7) (667.6) Equity 612.6) 476.2) Net debt/EBITDA (x) 2.8) 2.5) Exchange adjusted net debt/EBITD
Slide 8: Cash Flow
Cash Flow £m 2008)% 2007)% Operating profit* 280.5)% 242.9)% Depreciation 19.7)% 15.9)% Working capital movement (15.9)% (13.5)% Other (12.0)% (4.8)% † Cash flow from operations 272.3%) 267.5% ) Net capital expenditure (15.2)% (16.6)% Operating cash flow 257.1%) 250.9%) Operating cash flow to operat
Slide 9: Cash Flow
Cash Flow £m 2008) 2007) Operating cash flow 257.1) 250.9) Interest (41.4) (28.3) Tax (66.4) (65.1) Free cash flow 149.3) 157.5) Dividends (59.9) (56.2) Acquisitions (116.4) (191.7) Share buy back –) (100.0) Other (7.2) (8.5) Net cash flow (34.2) (198.9) -8- 2008 Annual Results Presentation
Slide 10: Financing
Financing • Strongly cash generative Debt Maturity Profile Dec • Diverse sources of finance £m 2009 2010 2011 2012 2013 2016 2018 Bank facilities - 290 197 180 100 - - • Next bank refinancing end 2010 USPP 35 - 56 - 164 83 35 Total 35 290 253 180 264 83 35 • Funding in 2008 $100m US$ Private Place
Slide 11: Financial Summary
Financial Summary Growth % Constant Reported Exchange Revenue 17 8 Operating profit* 15 7 Adjusted eps* 17 9 Dividend per share 10 Return on operating capital 57% Operating cash flow to operating profit* 92% *Before intangible amortisation -10- 2008 Annual Results Presentation
Slide 12: Agenda
Agenda 1. Anthony Habgood, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -11- 2008 Annual Results Presentation
Slide 13: 2008 Business Area Analysis
2008 Business Area Analysis Revenue Operating profit* 5% 6% 20% 23% 49% 45% 26% 26% North America UK & Ireland Continental Europe Rest of the World Diversified by geography *Before intangible amortisation and corporate costs -12- 2008 Annual Results Presentation
Slide 14: Markets We Serve 2008
Markets We Serve 2008 Healthcare Other 7% 8% Non-Food Retail 8% Grocery 25% Cleaning & Safety 19% Foodservice 33% Diversified by customer markets -13- 2008 Annual Results Presentation
Slide 15: North America
North America Growth % Constant £m 2008% 2007% Reported Exchange Revenue 2,055.1% 1,839.0% 12 3 Operating profit* 134.0% 123.3% 9 1 Margin* 6.5% 6.7% Return on operating capital 69.5% 71.9% • Higher organic growth in second half of 2008 • Margin decline due to soft economy and fuel costs • Leading p
Slide 16: UK & Ireland
UK & Ireland Growth % Constant £m 2008% 2007% Reported Exchange Revenue 1,100.0% 994.3% 11 10 Operating profit* 78.0% 74.5% 5 4 Margin* 7.1% 7.5% Return on operating capital 56.0% 65.0% • Weaker economy in second half contributed to margin decline • New account wins offset weak horeca market • Disap
Slide 17: Continental Europe
Continental Europe Growth % Constant £m 2008% 2007% Reported Exchange Revenue 822.8% 616.0% 34 15 Operating profit* 67.2% 50.0% 34 16 Margin* 8.2% 8.1% Return on operating capital 48.9% 50.2% • Strong growth in revenue and operating profit • Growth in France Hygiène due to larger accounts and own br
Slide 18: Rest of the World
Rest of the World Growth % Constant £m 2008% 2007% Reported Exchange Revenue 199.4% 132.6% 50 38 Operating profit* 17.6% 10.8% 63 49 Margin* 8.8% 8.1% Return on operating capital 58.9% 49.8% • Significant increase in revenue and operating profit • Australasia • Reorganised into three separate busine
Slide 19: 2008 Acquisitions
2008 Acquisitions Business Acquired Country Sector Revenue Günter Guest Supplies January Germany Horeca €9m Prot Cap February Brazil Safety R$118m Salgo April Australia Horeca A$32m Worldpack June Netherlands Non-Food Retail €19m A&E Russell July United Kingdom Safety £21m Hicosa July Spain Cleaning
Slide 20: 2008 Summary
2008 Summary • Strong growth in revenue, earnings and cash flow • Improving organic revenue growth in North America • Effect of weakening economy in UK & Ireland • Strong overall growth in Continental Europe and Rest of the World • Financial position remains strong -19- 2008 Annual Results Presentat
Slide 21: Strategy and Operations
Strategy and Operations • Strategy • Operating in a recessionary environment -20- 2008 Annual Results Presentation
Slide 22: Strategy
Strategy Organic Growth • New customers • Extend product range • Growth sectors and geographies Acquisition Growth • Geographic expansion • Bolt-on acquisitions • Anchor acquisitions Operating Model Efficiencies • Focus on efficiency in every aspect of business • IT systems as source of competitive
Slide 23: Operating in a Recessionary Environment
Operating in a Recessionary Environment Resilient Markets High Cash Generation Financial Discipline Authority and Alignment Diversified Customer Benefits Well positioned for current environment -22- 2008 Annual Results Presentation
Slide 24: Resilient Markets
Resilient Markets Foodservice Grocery 33% 25% Cleaning & Hygiene Healthcare 9% 7% Other customer sectors include Safety and Non-Food Retail c.75% revenue from resilient markets -23- 2008 Annual Results Presentation
Slide 25: High Cash Generation
High Cash Generation High Cash Conversion • Operating cash conversion Year Cash to PBITA 2008 92% consistently greater than 2007 103% 90% of PBITA 2006 92% 2005 95% 2004 93% Low Working Capital Requirement • Average working capital to sales at c.9% • Inventory turns at c.9x • Debtor days at c.45 Low
Slide 26: Financial Discipline
Financial Discipline Strong Balance Sheet • Net debt to EBITDA of 2.4x (exchange adjusted) • Scope for further acquisitions Good Financial Controls • Uniform reporting across all geographies • Acquisitions approved centrally Tight Cost Control • Small head office • People • Defined contribution pens
Slide 27: Authority and Alignment
Authority and Alignment Decentralised Operations • Hands-on management with customer focus • Local decision making • Full P&L responsibility Well Aligned • Incentives based on PBIT and return on operating capital Decentralised and well aligned -26- 2008 Annual Results Presentation
Slide 28: Diversified
Diversified 23 Countries 4 Continents 6+ Sectors Diversified geographically and by sector -27- 2008 Annual Results Presentation
Slide 29: Customer Benefits
Customer Benefits Bunzl Offering • One stop shop • One point of contact Customer Benefits • One invoice • Lower cost of doing business • Globally sourced products • Reduced working capital • Management information • Lower customer inventories • Flexible delivery options Financial benefits for custom
Slide 30: Prospects
Prospects • More challenging economic environment • May result in: • pressure on underlying sales • opportunities for Group Challenges and opportunities -29- 2008 Annual Results Presentation
Slide 31: Prospects
Prospects North • New business should increase organic revenue growth America • Mix-driven margin pressure UK & • Very difficult economic situation Ireland • Pressure on sales Continental • Recent acquisitions fully integrated Europe • Pressure on underlying growth Rest of the World • Good growth is
Slide 32: Your Questions
YOUR QUESTIONS -31- 2008 Annual Results Presentation