2019 ANNUAL GENERAL MEETING APRIL 2019
INCOME STATEMENT GROWTH CONSTANT £m 2018 2017 REPORTED EXCHANGE Revenue 9,079.4 8,580.9 6% 9% Adjusted operating profit* 614.0 589.3 4% 7% Operating margin* 6.8% 6.9% Net finance expense (55.0) (46.7) Adjusted profit before income tax* 559.0 542.6 3% 6% Adjusted earnings per share* 129.6p 119.4p 9% 12% Dividend per share 50.2p 46.0p 9% * Alternative performance measure – see Appendix 1 2 2019 AGM APRIL 2019
DIVIDEND PER SHARE (p) 26 years 50.2 CAGR of c consec ecutiv ive e >10% dividen end i increa eases es 4.0 3 2019 AGM APRIL 2019
CASH CONVERSION Ave verage c cash sh conver ersion on* 97% TARGET 90% * Alternative performance measure – see Appendix 1 4 2019 AGM APRIL 2019
USES OF FREE CASH FLOW 2004 – 2018 Consisten ently s ly stron ong fre ree c cash flow 6 % † DIVIDENDS DIVIDEND PER SHARE CAGR >10% supports long t term growth STABLE DIVIDEND COVER c. 2.5x ◊ £1.3bn 14 % † 157 * ACQUISITIONS SINCE 2004 ACQUISITIONS £3.2bn SELF-FUNDED ◊ Based on adjusted earnings per share * Includes the acquisition of Volk do Brasil which was committed to in 2018, but completed in January 2019 for which there was no cash outflow in 2018 5 2019 AGM APRIL 2019
FINANCIAL SUMMARY REVENUE ORGANIC ADJUSTED REVENUE OPERATING PROFIT * GROWTH 4.3 % 9 % ◊ 7 % ◊ CASH COMMITTED NET DEBT : ACQUISITION EBITDA * CONVERSION * SPEND 2.0 X 94 % £183m At l low end o of target r range ADJUSTED DIVIDEND ROACE * EPS * PER SHARE 9 % 12 % ◊ 50.7 % 26 y years of of g grow owth ◊ ◊ At constant exchange rates * Alternative performance measure – see Appendix 1 6 2019 AGM APRIL 2019
CONSISTENT AND PROVEN COMPOUNDING STRATEGY High R ROIC PROFITABLE Use competitive ORGANIC despit ite e advantage to GROWTH grow market signifi ficant share in a profitable way acquis isition ion spe pend ROIC Daily focus OPERATING MODEL on making IMPROVEMENTS our business more efficient 15.0% ACQUISITION Use strong balance sheet GROWTH and excellent cash flow to consolidate our markets further 7 2019 AGM APRIL 2019
BUNZL UNIQUE SERVICE OFFERING DESIGN / BESPOKE / MINIMISE INSTALLATION FULL RANGE CUSTOMISED PRINTED PRODUCT CUSTOMERS’ SERVICES STOCKED DELIVERY SLOTS MANAGEMENT WORKING CAPITAL PRODUCT BULKY LOW INNOVATION PRODUCT ESSENTIAL TRAINING VALUE CENTRES AVAILABILITY ITEMS PRODUCTS CONTRACT MOBILISATIONS DELIVERY BEYOND BACK ON-TIME RANGE VALUE ADDED DOOR MATERIAL ONE-STOP-SHOP IN-FULL RATIONALISATION DEDICATED CALL CONSOLIDATION SERVICES DELIVERY CENTRES SUSTAINABLE PRODUCT INDUSTRY PRODUCTS SOLUTIONS LEADING STOCKED IN EXPERT ONE ORDER SPECIALISED BUNZL KNOWLEDGE ONE DELIVERY SALES FORCE WAREHOUSE INDIVIDUAL AND ADVICE CUSTOMISED ONE INVOICE PRODUCT LOCAL KNOWLEDGE CUSTOMER EDI SERVICE SOLUTIONS SPECIALISTS HEALTH AND CUSTOMISED DELIVERY APP SAFETY DIGITAL OPTIONS DIRECT TO SITE REQUIREMENTS SOLUTIONS WEBSHOP X DOCK COMPETITIVELY EXCEED BUDGET CUSTOMISED LOCAL AND WAREHOUSE PRICED ALERTS REPLENISHMENT MANAGEMENT NATIONAL PRODUCTS USAGE INFORMATION DISTRIBUTION NETWORK VALUE CONSUMPTION ALTERNATIVE VS CUSTOMER OWN BRAND OWN BRAND BUDGET MANUFACTURER MARKET BRANDED INTELLIGENCE COMPLIANCE BY MULTIPLE “QUASI UNITS TO HEAD DELIVERY MANUFACTURER” ECONOMIC BENEFIT OF OFFICE SUPPLY CHAIN LOCATIONS EXCLUSIVE ASIA SOURCING DENSITY OWN BRAND BUNZL SCALE STUDIES DISTRIBUTION CENTRE - QC/QA ANALYSIS DIRECT DEALS WITH NATIONAL OWN FLEET RIGHT PRODUCT MANUFACTURERS FOOTPRINT RIGHT PRICE DELIVERED BY BUNZL 8 2019 AGM APRIL 2019
SUSTAINABLE PRODUCT SOLUTIONS Proactiv ively ely SINGLE USE PLASTICS wo working w with Essential food and beverage cu customers, , • packaging for practical, safe and suppliers a sup s and nd hygienic transit other er stakeholders t to Actively promoting sustainable • promote a and nd alternatives support a a Unique position at the centre of the • sustainable supply chain appr pproach t to single use si e use As a distributor (not a manufacturer) • plast stics agile in adapting product offering Reusable cups made from coffee husks 1 Working with customers, suppliers Food containers made from polylactic acid (PLA), a 2 • compostable and renewable plastic and other stakeholders 3 Cups made from recycled PET 4 Compostable coffee cups 5 Paper based food packaging Opportunity for growth • 9 2019 AGM APRIL 2019
SUSTAINABLE PRODUCT SOLUTIONS – CASE STUDIES TRUSTED PARTNER PRODUCT SUBSTITUTION • Rapid change in customer demand for drinking Contract catering customer of Bunzl • straws in UK: Customer’s client site serving 2,500+ meals per • day, using 500+ Bunzl products Volume of plastic straws fell significantly Bunzl has supported client in delivering their • sustainability objectives: Volume of paper straws increased Initially • − Introduced compostable, recyclable BUT total revenue from straws increased 25% and recycled items − Consolidated products for greater ability for composting and recycling More recently • − Introduced alternative plastic free products and reusable items − Worked with our suppliers to design new ‘fit for purpose’ take out containers 10 2019 AGM APRIL 2019
FINANCIAL TRACK RECORD 2004 - 2018 REVENUE (£bn) ADJUSTED OPERATING PROFIT* (£m) Prov Pr oven en c compou ounding 9.1 growth s strategy 614 CAG AGR 2.4 169 c. 10% 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 ADJUSTED EPS* (p) DIVIDEND PER SHARE (p) 04-12 restated on adoption 129.6 of IAS 19 (revised 2011) 50.2 31.7 13.3 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 * Alternative performance measure – see Appendix 1 11 2019 AGM APRIL 2019
APPENDICES
APPENDIX 1 ALTERNATIVE PERFORMANCE MEASURES This presentation includes various performance measures defined under International Financial Reporting Standards (‘IFRS’) as well as a number of alternative performance measures. The principal alternative performance measures used in this presentation are: Adju justed o operating p profit - Operating profit before customer relationships amortisation, acquisition related items, the GMP equalisation charge and disposal of businesses (reconciled • in Appendix 2) Operatin ting m margin in % - Adjusted operating profit as a percentage of revenue • Adju justed p profit b before i income t tax ax - Profit before income tax, customer relationships amortisation, acquisition related items, the GMP equalisation charge and disposal of businesses • (reconciled in Appendix 3) Adju justed p profit f for t the y year ar - Profit for the year before customer relationships amortisation, acquisition related items, the GMP equalisation charge and disposal of businesses and the • associated tax (reconciled in Appendix 4) Adjust usted d ear arnings p per share - Adjusted profit for the year divided by the weighted average number of ordinary shares in issue • Operating c cash flo low - Cash generated from operations before acquisition related items after deducting purchases of property, plant and equipment and adding back the proceeds • from the sale of property, plant and equipment Cash c h conv nversi sion % n % - Operating cash flow as a percentage of adjusted operating profit • Return o on av average o operating c cap apital % % - The ratio of adjusted operating profit to the average of the month end operating capital employed (being property, plant and equipment, • software, inventories and trade and other receivables less trade and other payables) Return o on invested c cap apital % % - The ratio of adjusted operating profit to the average of the month end invested capital (being equity after adding back net debt, net defined benefit • pension scheme liabilities, cumulative customer relationships amortisation, acquisition related items and amounts written off goodwill, net of the associated tax) EBITDA DA- Adjusted operating profit before depreciation of property, plant and equipment, software amortisation and after adjustments as permitted by the Group’s banking • covenants, principally, share option charges and annualising for the effect of acquisitions and disposals Const stant nt excha hang nge r rates- Growth rates at constant exchange rates are calculated by retranslating the results for the year ended 31 December 2017 at the average rates for the year • ended 31 December 2018 so that they can be compared without the distorting impact of changes caused by foreign exchange translation. 13 2019 AGM APRIL 2019
APPENDIX 2 ADJUSTED OPERATING PROFIT ALTERNATIVE PERFORMANCE MEASURES £m 2018 2017 Operating profit 466.2 456.0 Adjusted for: Customer relationships amortisation 111.1 96.6 Acquisition related items 33.4 36.7 GMP equalisation charge 3.3 - Adjusted operating profit 614.0 589.3 Operating margin 6.8% 6.9% 14 2019 AGM APRIL 2019
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