Bunzl plc · LSE:BNZL
Bunzl — H1 2011 Earnings Presentation
33 slides from Bunzl's earnings presentation, 2011
Slide 1: Half Year Results 2011
HALF YEAR RESULTS 2011 - 0- 2011 Half Year Results Presentation
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- 2011 Half Year Results Presentation
Slide 3: Highlights
Highlights • Group revenue up 6% at constant exchange Revenue • Organic growth improved to 3% • Improved operating margins in all business areas Profitability • Group operating margin up 20 basis points to 6.2% • Adjusted earnings per share up 14% at constant exchange • Dividend up 13% Other • Seven
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- 2011 Half Year Results Presentation
Slide 5: Income Statement
Income Statement Growth % Constant £ £m J June 11% J June 10% R Reported t d E h Exchange Revenue 2,442.0% 2,345.1% 4 6 Operating p gpprofit* 152.2% 140.5% 8 11 Margin* 6.2% 6.0% *Before intangible amortisation and acquisition related costs - 4- 2011 Half Year Results Presentation
Slide 6: Income Statement
Income Statement Growth % Constant £m June 11) June 10) Reported Exchange Operating profit* 152.2) 140.5) 8 11 Net finance cost (13.4) (15.4) Profit before tax* 138.8) 125.1) 11 13 Interest cover (x) 11.4) 9.1) Effective tax rate (%) 27.7) 29.0) Adjusted earnings per share* (p) 31.0) 27.5) 13 14 Div
Slide 7: Balance Sheet
Balance Sheet £m June 11) Dec 10) June 10) Intangibles 1 291 7) 1,291.7) 1 244 6) 1,244.6) 1 209 7) 1,209.7) Tangibles 120.6) 118.1) 119.7) Working g capital p 445.6)) 411.1)) 394.4)) Other liabilities (262.2) (208.3) (252.2) 1,595.7) 1,565.5) 1,471.6) Pension deficit (52.1) (52.3) (78.8) Net debt (
Slide 8: Cash Flow
Cash Flow £ £m J June 11)% J June 10)% Operating cash flow* 130.6)% 131.7)% Interest (14.1)% (17.4)% Tax (29.1)% (37.2)% Free cash flow 87.4%) 77.1)% Dividends (16.6)% (20.0)% A Acquisitions i iti (56 0)% (56.0)% (76 7)% (76.7)% Employee share schemes (24.4)% 4.6)% Net cash flow (9 6)% (9.6)% (15 0)
Slide 9: Financial Summary
Financial Summary • Revenue R h 6%†, organic growth i 3%† • Operating profit* up 11%† • Operating margin* up 20bp • Adjusted EPS* growth 14%† • Net debt to EBITDA reduced to 2 2.0x 0x despite £56m cash outflow on acquisitions • Dividend increase 13% Strong St o g results esu ts *Before intangible am
Slide 10: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A - 9- 2011 Half Year Results Presentation
Slide 11: Business Review
Business Review 1. Operations Review 2 2. St t Strategy 3 3. Acquisitions/Disposal 4. Prospects -10- 2011 Half Year Results Presentation
Slide 12: Revenue Growth Bridge
Revenue Growth Bridge £m 3.3% 3.1% 6.4% 2,294 2,442 Revenue Organic Acquisitions Revenue H1 10 H1 11 (FX adjusted) -11- 2011 Half Year Results Presentation
Slide 13: H1 Business Area Analysis
H1 Business Area Analysis Revenue Operating profit* 6% 8% 21% 28% 53% 48% 20% 16% North America UK & Ireland Continental Europe Rest of the World *Before intangible amortisation and acquisition related and corporate costs -12- 2011 Half Year Results Presentation
Slide 14: Overview
Overview • Progress in all business areas • Strong organic revenue growth in North America, Continental Europe and Rest of the World • All business areas showed improvement in operating margins • Business model is resilient • Seven acquisitions S i iti announcedd tto d date t across allll b business
Slide 15: North America
North America Growth % Constant £m June 11% June 10% Reported Exchange Revenue 1,286.7% 1,269.8% 1 7 Operating profit* 78.2% 75.9% 3 8 Margin* 6.1% 6.0% Return on operating capital 62.4% 65.5% • Strong organic revenue growth – good performance in all sectors • Growth from new and existing customers
Slide 16: UK & Ireland
UK & Ireland Growth % Constant £m June 11% June 10% Reported Exchange Revenue 485.6% 493.7% (2) (2) Operating profit* 25.8% 25.6% 1) 1) Margin* 5.3% 5.2% Return on operating capital 58.2% 49.9% • Challenging trading environment impacted sales • Continued focus on costs and improvement in operating m
Slide 17: Continental Europe
Continental Europe Growth % Constant £m June 11% June 10% Reported Exchange Revenue 526.1% 459.1% 15 14 Operating profit* 44.8% 37.4% 20 19 Margin* 8.5% 8.1% Return on operating capital 47.3% 54.1% • Strong organic and acquisition growth • Improvement in operating margin • France – return to growth
Slide 18: Rest of the World
Rest of the World Growth % Constant £m June 11% June 10% Reported Exchange Revenue 143.6% 122.5% 17 8 Operating profit* 12.2% 10.2% 20 12 Margin* 8.5% 8.3% Return on operating capital 61.1% 61.9% • Australasia • Strong performance in largest business • Improved profitability from cost control and ne
Slide 19: Strategy
Strategy Organic Growth Operating Model Efficiencies A i iti G Acquisition th Growth Consistent and proven strategy -18- 2011 Half Year Results Presentation
Slide 20: Business Model
Business Model • Resilient sectors • Growing sectors • Fragmented g market structure – opportunity pp y to consolidate • High return on operating capital and cash generation • Consolidated product “one stop shop” model -19- 2011 Half Year Results Presentation
Slide 21: Organic Growth - Business Model
Organic Growth - Business Model Suppliers Bunzl Customers Grocery Individual Consolidated Foodservice ranges offer TO TO Cleaning & hygiene Safety Non-food retail • Global suppliers • International warehousing • Low cost sources Healthcare & distribution infrastructure • Commodities • Consolidation
Slide 22: Organic Growth - Value Proposition
Organic Growth - Value Proposition • Self distribution is costly COST TO PRODUCT COST ACQUIRE • Bunzl applies its resources and INVENTORY INVESTMENT expertise to reduce or eliminate many of the “hidden” INBOUND FREIGHT PURCHASING ADMIN costs t off self-distribution lf di t ib ti DIRECT LABOUR COSTS
Slide 23: Organic Growth - Attractive Portfolio
Organic Growth - Attractive Portfolio Other 5% Some of the product ranges into other markets such as government and education establishments Healthcare 7% Disposable healthcare consumables Grocery 29% range, including gloves, swabs, gowns Goods not for resale (items grocers and bandages, g , to the
Slide 24: Operating Model Efficiencies
Operating Model Efficiencies • Warehouse consolidation projects • North America • UK & Ireland • Investment in new technology • New carousel picking system in North America • New IT systems in Continental Europe Ongoing focus on cost efficiencies -23- 2011 Half Year Results Presentation
Slide 25: Acquisition Growth
Acquisition Growth Business Acquired Country Sector Revenue* Omega Mar 2011 Australia Horeca £3m C Cannon M 2011 Mar UK Cl Cleaning i &HHygiene i £16 £16m King Espana May 2011 Spain C&H/Horeca £25m SIG Safety May 2011 UK Safety £22m Hospitality Depot May 2011 Australia Horeca £13m Netpak Jul 2011 Ca
Slide 26: Acquisitions Track Record
Acquisitions Track Record 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Number of 4 5 6 2 7 7 9 8 7 2 9 7 Acquisitions Acquisition Spend 156 89 77 29 302 129 162 197 123 6 126 123 (£m) Annualised Acquisition 248 112 145 51 430 270 386 225 151 27 154 141 Revenue (£m) 2000-2005 conti
Slide 27: Disposal of UK Vending
Disposal of UK Vending • Entered vending market in 1999 through acquisition • Currently annualised revenue of £65m (c (c.1% 1% of Group) at break even • Not a strategic fit for our desired business model: • People intensive service based business • Capital intensive (thousands of vending machines) •
Slide 28: Prospects
Prospects North • Continued strong organic growth America UK & Ireland • Continuing difficult economic conditions Continental • Good G d organic i growth th Europe • Positive impact from acquisitions Rest of • Continued positive development the World • Positive impact from Australasia acquisitions G
Slide 29: Financial Track Record
Financial Track Record Revenue ((£bn)) Operating p gpprofit ((£m)) 323 01-05 continuing operations only 4.8 Before amortisation and acquisition related 312 4.6 297 and corporate costs 4.2 01-05 continuing operations only 259 3.6 241 33 3.3 218 2.9 183 2.3 2.4 171 2.2 158 164 2.1 2001 2002 2003 2004
Slide 30: Half Year Results 2011
HALF YEAR RESULTS 2011 -29- 2011 Half Year Results Presentation
Slide 31: Appendix - Net Debt
Appendix 1 - Net Debt £m Six months) Year to) to June 11) Dec 10) Opening net debt (716.8) (716.8) Net cash (outflow)/inflow (9.6) 9.7) Currency (0.1) (9.7) Closing net debt (726.5) (716.8) -30- 2011 Half Year Results Presentation
Slide 32: Appendix - Cash Flow
Appendix 2 – Cash Flow £m June 11)% June 10)% Operating profit* profit 152 2)% 152.2)% 140 5)% 140.5)% Depreciation 13.2)% 12.1)% Working capital movement (19.6)% (7.5)% Other (4.2)% (1.2)% Cash flow from operations p 141.6%)) 143.9%) Net capital expenditure (11.0)% (12.2)% Operating cash flow 130.6
Slide 33: 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 results announcement in respect of the half year ended 30 June 2011. For the purposes of this disclaimer, “Presentation” shall mean this