Bunzl plc · LSE:BNZL
Bunzl — H1 2013 Earnings Presentation
40 slides from Bunzl's earnings presentation, Nov 6, 2013
Slide 1: Half Year Results 2013
HALF YEAR RESULTS 2013
Slide 2: Agenda
A Agenda d 1 Philip Rogerson, 1. Rogerson Chairman: Welcome 2 Brian May 2. May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -1- 2013 Half Year Results Presentation
Slide 3: Highlights
Hi hli ht Highlights Consistent Six Excellent set and proven acquisitions to of results strategy t t d t date Adjusted Dividend up earnings g pper 14% share up 10%* *At constant exchange, before intangible amortisation and acquisition related costs -2- 2013 Half Year Results Presentation
Slide 4: Agenda
A Agenda d 1 Philip Rogerson 1. Rogerson, Chairman: Welcome 2 Brian May 2. May, FD: Financial Results 3 Michael Roney 3. Roney, CEO: Business Review 4. Q&A -3- 2013 Half Year Results Presentation
Slide 5: Income Statement
I Income Statement St t t Growth % Constant £m June 13% June 12% Reported Exchange Revenue 2,956.6% 2,612.2% 13 11 Operating profit* 188.8% 165.1% 14 12 Margin* 6.4% 6.3% * Before intangible amortisation and acquisition related costs -4- 2013 Half Year Results Presentation
Slide 6: Income Statement
I Income Statement St t t Growth % Constant † £m June 13) June 12 Reported Exchange Operating profit* 188.8) 165.1) 14 12 Net finance cost (21.2) (16.1) P fit before Profit b f tax* t * 167 6) 167.6) 149.0) 149 0) 12 10 ) ) Effective tax rate (%) 27.9) 27.7) Adjusted earnings per share* (p) 37.1) 33
Slide 7: Dividend per Share (p)
Di id d per Sh Dividend Share ((p)) 28.2 CAGR > 10% 4.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Consistently strong dividend growth -6- 2013 Half Year Results Presentation
Slide 8: Balance Sheet
B l Balance Sh Sheett £m June 13) Dec 12† June 12) Intangibles 1,457.2) 1,340.6) 1,252.3) Tangibles 123.7) 111.1) 112.5) Working capital 536.7) 493.8) 464.0) Other liabilities (316.6) (246.4) (301.5) 1,801.0) 1,699.1) 1,527.3) Pension deficit (59.6) (75.5) (66.0) Net debt* (872.7) (738.1) (685.3) Eq
Slide 9: Cash Flow
C h Fl Cash Flow £m June 13)% June 12)% Operating cash flow* flow 193 9)% 193.9)% 122 3)% 122.3)% Interest (17.1)% (15.3)% T Tax (37 9)% (37.9)% (29 8)% (29.8)% Free cash flow 138.9)% 77.2)% Dividends (28.8)% (26.1)% Acquisitions (150.0)% (77.2)% Employee share schemes (54.5)% (15.5)% Net cash flow
Slide 10: Financial Summary
Fi Financial i lSSummary • Revenue growth 11%† • Operating profit* up 12%† • Operating margin* up 10 bp • Adjusted th 10%† Adj t d EPS* growth • Cash conversion at 103%,, all business areas >100% • Dividend per share increases 14% † At constant exchange rates * Before intangible amortisation and acq
Slide 11: Agenda
A Agenda d 1 Philip Rogerson 1. Rogerson, Chairman: Welcome 2 Brian May 2. May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -10- 2013 Half Year Results Presentation
Slide 12: Business Review
B i Business R Review i 1. Operations Review 2. Strategy 3 3. Market Developments 4. Prospects p -11- 2013 Half Year Results Presentation
Slide 13: Overview
O Overview i Consistent and proven strategy • Organic growth • High g qquality y acquisitions q • Cost reduction and efficiency initiatives Excellent overall performance • North America – strong growth led by acquisitions • Continental Europe p –g good p progress g in a tough g economic environment
Slide 14: Revenue Growth Bridge
Revenue Growth Bridge £m 9.1% 11.0% 3 100 3,100 2,900 1.9% 2 700 2,700 2,500 4,704 4,830 2 300 2,300 2,100 2,957 2,664 1 900 1,900 1,700 1 500 1,500 Revenue Organic Acquisitions Revenue HY 12 HY 13 (FX Adjusted) -13- 2013 Half Year Results Presentation
Slide 15: Half Year Business Area Analysis
H lf Y Half Year B Business i A Area A Analysis l i Revenue Operating profit* 8% 11% 16% 15% 50% 56% 20% 24% North America Continental Europe UK & Ireland Rest of the World Diversified by geography * Before intangible amortisation and acquisition related and corporate costs -14- 2013 Half Year Resul
Slide 16: North America
N th A North America i Growth % Constant £m June 13% June 12% Reported Exchange Revenue 1,645.5% 1,403.4% 17 14 p gp Operating profit* 98.6% 85.8% 15 12 Margin* 6.0% 6.1% Return on operating capital 60 7% 60.7% 67 1% 67.1% • Good organic revenue growth • Impact from six 2012 acquisitions • Steady gr
Slide 17: Continental Europe
C ti Continental t lEEurope Growth % Constant £m June 13% June 12% Reported Exchange Revenue 577.4% 545.6% 6 3 p gp Operating profit* 47.7% 45.6% 5 1 Margin* 8.3% 8.4% Return on operating capital 43 4% 43.4% 46 2% 46.2% • Good revenue growth against background of difficult economic environment • Fra
Slide 18: UK & Ireland
UK & IIreland l d Growth % Constant £m June 13% June 12% Reported Exchange Revenue 483.9% 479.4% 1 1) p gp Operating profit* 29.7% 27.4% 8 8)) Margin* 6.1% 5.7% Return on operating capital 92 6% 92.6% 77 3% 77.3% • Further improvement in operating margin • Good growth in cleaning & safety and retail
Slide 19: Rest of the World
R t off the Rest th World W ld Growth % Constant £m June 13% June 12% Reported Exchange Revenue 249.8% 183.8% 36 38 p gp Operating profit* 22.0% 15.3% 44 48 Margin* 8.8% 8.3% Return on operating capital 47 5% 47.5% 59 0% 59.0% • Australasia • Focus F on efficiencies ffi i i ini a weakening k i econo
Slide 20: Strategy: Acquisition ROIC
St t Strategy Operating Model Effi i Efficiencies i GDP+ Acquisition O Organic i Growth Growth AcquisitionROIC Growth 17.5% ROIC remains high g -19- 2013 Half Year Results Presentation
Slide 21: Acquisition Growth – 2012
A Acquisitions i iti G Growth th – 2012 Committed 13 acquisitions acquisition spend p £277m Annualised revenue £518m 2012 – Significant year for acquisitions -20- 2013 Half Year Results Presentation
Slide 22: Acquisition Growth – 2013 ytd
A Acquisition i iti Growth G th – 2013 ytd td Business Acquired† Country Sector Revenue* McNeil January† Australia Healthcare £11m Labor March† Brazil Healthcare £16m MDA March† UK Non-food retail £23m Jeminex April† Australia Safety £104m TFS July† UK Non-food retail £8m Espomega August† Mexico Saf
Slide 23: Acquisition Growth – Track Record
A Acquisition i iti G Growth th - Track T k Record R d 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 ytd Number of 7 7 9 8 7 2 9 10 13 6 acquisitions Committed acquisition spend 302 129 162 197 123 6 126 185 277 203 (£m) Annualised acquisition revenue 430 270 386 225 151 27 154 204 518 190 (£m)
Slide 24: Annualised Acquisition Revenue
A Annualised li d AAcquisition i iti R Revenue 2013 £m 2004 2005 2006 2007 2008 2009 2010 2011 2012 ytd North America 115 198 103 15 - - 35 7 410 - Continental Europe 301 61 7 100 52 - 115 96 23 - UK & Ireland - 2 267 110 39 27 - 39 16 31 Rest of the World 14 9 9 - 60 - 4 62 69 159 Group 430 270 386
Slide 25: Acquisition Growth – Latin America
A Acquisition i iti G Growth th – Latin L ti AAmerica i MEXICO 2008 to 2010 – Brazil market entry • Protcap – Entry into safety market COLOMBIA • AM Supply – Expansion in safety market 2011 – Expansion in Brazil BRAZIL BRAZIL • Ideal – Entry into cleaning and PERU hygiene market • Danny – Expansion
Slide 26: Acquisition Growth – Latin America
A Acquisition i iti G Growth th – Latin L ti AAmerica i Labor Espomega Revenue Vicsa Ideal Danny AM Supply Prot-Cap 2008 2010 2011 2012 2013 Safety Cleaning g& Hygiene Foodservice Healthcare Retail Further acquisition opportunities -25- 2013 Half Year Results Presentation
Slide 27: Why Invest in Bunzl?
Wh Invest Why I t in i Bunzl? B l? “…. because Bunzl is the leader in the market with consistently good growth, stable operating margins margins, a very high return on operating capital and it turns on average more than 90% of the operating profit into cash which can be reinvested at a rate well in
Slide 28: Financial Track Record
Fi Financial i lTTrack kRRecord d Revenue (£bn) Operating profit (£m) 371 04-05 continuing operations only 5.4 353 Before amortisation and acquisition 5.1 4.8 related and corporate costs 323 46 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
Slide 29: Prospects
P Prospects t North America • Continued strong growth Continental • Improved performance Europe • Increased profitability in France Hygiene UK & Ireland • Increased revenue and profit Rest of • Strong development the World p • Impact of recent significant g acquisition q activity y Acquisitions • Pr
Slide 30: Half Year Results 2013
HALF YEAR RESULTS 2013 2013 Half Year Results Presentation
Slide 31: Appendix 1 – Impact of Change to IAS 19
A Appendix di 1 – Impact I t off Change Ch to t IAS 19 £m Profit) Tax on) Profit) Adjusted) before tax* profit* after tax* ) eps* (p)) HY 12 before restatement 151.7) (42.0) 109.7) 33.7) Restatement (2.7) 0.7) (2.0) (0.6) HY 12 after restatement 149 0) 149.0) (41 3) (41.3) 107 7) 107.7) 33 1) 33.1)
Slide 32: Appendix 2 – Net Debt
A Appendix di 2 – Net N t Debt D bt £m Six) Year to) Six) months to)) Dec 12) months to)) June 13) June 12) Opening net debt (738 1) (738.1) (652 9) (652.9) (652 9) (652.9) Net cash outflow (94.4) (109.4) (41.6) C Currency ((outflow)/inflow tfl )/i fl (40 2) (40.2) 24 2) 24.2) 9 2) 9.2) Closing net
Slide 33: Appendix 3 – Cash Flow
A Appendix di 3 – Cash C h Fl Flow £m June 13)% June 12)% Operating profit* 188.8)% 165.1)% Depreciation 12.9)% 12 9)% 11.4)% 11 4)% Working capital movement 5.1)% (41.7)% Other ) 0.2)% ((1.4)% ) Cash flow from operations† 207.0%) 133.4%) Net capital expenditure (13 1)% (13.1)% (11 1)% (11.1)% Opera
Slide 34: Appendix 4 – Cash Conversion
A Appendix di 4 – Cash C hC Conversion* i * 110% 103% 103% 102% 95% 93% 93% 93% 92% 92% 2004** 2005** 2006 2007 2008 2009 2010 2011 2012 H1 2013 * Operating cash flow before acquisition related costs to operating profit before intangible amortisation and acquisition related costs ** 04-05 continuing
Slide 35: Appendix 5 – Exchange Rates
A Appendix di 5 – Exchange E h R Rates t June December June 2013 2012 2012 Average rate US$ 1.54 1.59 1.58 € 1.18 1.23 1.22 Closing rate US$ 1.52 1.63 1.57 € 1.17 1.23 1.24 -34- 2013 Half Year Results Presentation
Slide 36: Appendix 6 – 2012 Customer Markets
A Appendix di 6 – 2012 C Customer t M Markets k t Oth 4% Other Healthcare 7% Non-Food Retail 8% Grocery 29% Safety 9% Cleaning & Hygiene 14% Foodservice 29% c.80% 80% resilient ili t – Grocery, G Foodservice, F d i C&H, C&H Healthcare H lth -35- 2013 Half Year Results Presentation
Slide 37: Appendix 7 – Historical Data
A Appendix di 7 – Historical Hi t i l D Data t 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Revenue (£m) 2 276 2,276 2 439 2,439 2 924 2,924 3 333 3,333 3 582 3,582 4 177 4,177 4 649 4,649 4 830 4,830 5 109 5,109 5 359 5,359 Operating profit* 158 169 203 226 243 281 296 307 336 352 (£m) Margin*
Slide 38: Appendix 8 – Geographic Expansion Timeline
A Appendix di 8 – Geographic G hi EExpansion i TiTimeline li 27 countries 23 countries 18 countries 12 countries 7 countries 1997* 2003* 2005* 2008 2012 * Continuing operations -37- 2013 Half Year Results Presentation
Slide 39: Appendix 9 – Value Proposition
Appendix 9 – Value Proposition • In-house procurement and COST TO self distribution lf di t ib ti isi costly tl PRODUCT COST ACQUIRE INVENTORY INVESTMENT • Bunzl applies its resources and expertise to reduce or INVENTORY INVESTMENT CASH FLOW eliminate many of the DIRECT LABOUR & OVERTIME “hidden” hi
Slide 40: Disclaimer
Di l i Disclaimer This document has been prepared by Bunzl plc (the “Company”) solely for use at the presentation of the Company’s results announcement in respect of the six months ended 30 June 2013. For the purposes of this disclaimer, “Presentation” shall mean this document, the oral presentation