Bunzl plc · LSE:BNZL
Bunzl — Investor Day (March 2009)
63 slides from Bunzl's investor day presentation, Mar 25, 2009
Slide 1: Bunzl Investor Day 25 March 2009
BUNZL INVESTOR DAY 25 MARCH 2009 -0- 2009 Investor Day Presentation
Slide 2: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Pat Larmon, CEO Bunzl North America 3. Break 4. James Cunningham, MD Bunzl UK & Ireland 5. Frank van Zanten, MD Bunzl Continental Europe 6. Close 7. Lunch -1- 2009 Investor Day Presentation
Slide 3: Where we come from
Where we come from Moritz Bunzl registers haberdashery business in Bratislava. HQ to Vienna. Paper manufacturing begins. HQ to London. Bunzl lists on LSE. Bunzl diversifies into fine paper distribution and manufacturing. Acquisition of first consumables distribution business in USA. First European c
Slide 4: Track Record
Track Record Revenue (£m) Operating profit (£m) Before amortisation and corporate costs 4,500 300 4,000 CAGR 14% 250 CAGR 15% 3,500 3,000 200 2,500 150 2,000 1,500 100 1,000 50 500 0 0 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01
Slide 5: Geographic Expansion
Geographic Expansion 23 countries 18 countries 12 countries 7 countries 2 countries 1991* 1997* 2003* 2005* 2009 * continuing operations only Expanding global footprint Overview -4- 2009 Investor Day Presentation
Slide 6: Our Supply Chain
Our Supply Chain Global sourcing International Consolidation Range of Customer & procurement warehousing of consumables delivery options & distribution infrastructure Supported by integrated I.T. Overview -5- 2009 Investor Day Presentation
Slide 7: 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 8: Competitive Advantage
Competitive Advantage • Geographic footprint • National footprints • Relative strength vs. national competitors • Fragmented markets • Relatively small percent of customer spend • High cash generation • Financially strong, stable business Bunzl is well positioned Overview -7- 2009 Investor Day Prese
Slide 9: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Pat Larmon, CEO Bunzl North America 3. Break 4. James Cunningham, MD Bunzl UK & Ireland 5. Frank van Zanten, MD Bunzl Continental Europe 6. Close 7. Lunch -8- 2009 Investor Day Presentation
Slide 10: Evolution and Sales Growth
Evolution and Sales Growth Non-Food Retail US$3.8bn C-Store Food Processor *Bunzl North America entered the Grocery and Redistribution Canada markets prior to 1993 US$0.9bn 93 94 99 00 04 95 96 97 98 01 02 03 05 06 07 08 20 20 19 19 19 19 19 19 19 20 20 20 20 20 20 20 Long term organic and acquisiti
Slide 11: Product Cost / Value Proposition
Value Proposition Product cost is just one component of what our customers incur when they self-distribute operating supplies Product Cost Self-distribution is costly Bunzl North America -10- 2009 Investor Day Presentation
Slide 12: Value Proposition
Value Proposition • Bunzl applies its resources and expertise to reduce or eliminate many of the “hidden” costs of self-distribution • This benefit is even more pertinent to our customers in a recessionary environment Impacts income statement and balance sheet Bunzl North America -11- 2009 Investor
Slide 13: Why Customers Value Bunzl: Warehouse Operations
Why Customers Value Bunzl Warehouse Operations • 89 warehouse shipping locations • Occupying over 6 million sq. ft. of space • Single IT platform • 42 facilities have implemented our eWarehousing system • Many facilities acquired and integrated Coast-to-coast coverage across North America Bunzl Nort
Slide 14: Why Customers Value Bunzl: Strategic Sourcing
Why Customers Value Bunzl Strategic Sourcing Private labels: Leveraging our purchasing power Bunzl North America -13- 2009 Investor Day Presentation
Slide 15: Why Customers Value Bunzl: Low Cost Sourcing
Why Customers Value Bunzl Low Cost Sourcing Imports • Directly import largely from Asia • Product imported under the Prime Source and Hi-Valu private labels • Imported over 2,300 containers in 2008 Asian Consolidation Center Fengxian District, Shanghai City, China • On-site staff provide optimal sou
Slide 16: Why Customers Value Bunzl: Green Initiatives
Why Customers Value Bunzl Green Initiatives • Connects customers to the widest array of green products in the industry – Work with vendors to develop and introduce green products – Including a compostable foodservice solution • Developed green resources – Green product catalogs – Green website pages
Slide 17: Markets We Serve 2008
Markets We Serve 2008 Grocery Redistribution 36% 30% Food Processor 12% Other 9% Convenience Store Non-Food Retail 7% 6% Predominantly resilient markets Bunzl North America -16- 2009 Investor Day Presentation
Slide 18: Grocery
Grocery Grocery Bunzl is North America’s leading provider of 36% of sales “Goods Not for Resale” outsourcing solutions Customers Include Types of Programs Typical Products – Warehouse replenishment – Deli, meat, bakery and produce – Cross dock packaging – Direct store delivery – Sanitation and clean
Slide 19: Grocery - A Typical Case
Grocery - A Typical Case Typical customer prior to a Bunzl program Self-distributing supplies from a multi-vendor base Store operating supplies (GNFR) • Maintained higher inventory Typically 150 to 200 different vendors – Minimum vendor order requirements – Stock out coverage due to longer lead time
Slide 20: Grocery - A Cross Dock Solution
Grocery - A Cross Dock Solution Typical customer after a Bunzl program Store operating supplies (GNFR) • Store orders transmitted to Bunzl via EDI • Bunzl picks and configures the store order • Customer picks up or Bunzl delivers the orders Customer DC • Customer cross docks orders for delivery Unlo
Slide 21: Grocery - The Bunzl Advantage
Grocery - The Bunzl Advantage Customer benefits from a Bunzl program Store operating supplies (GNFR) • Reduced working capital • Receives product sourcing expertise – Potentially achieves cost of goods reduction • Reduced cost of doing business • Typically receives higher fill rates • Maintains deli
Slide 22: Redistribution
Redistribution Bunzl, under its R3® brand, is a leading Redistribution provider of outsourcing solutions to distributors 30% of sales of paper and plastic disposables Customers Include Types of Programs Typical Products – Warehouse replenishment – Paper tissue, towels & napkins – Cross dock – Foodse
Slide 23: Why Redistribution?
Why Redistribution? Customers Vendors • Reduced capital employed • Extended national distribution channel • Improved cash flow through R3® • Product line extension by redeploying • Cost effective truckload shipments freed up space • Consistent inbound order patterns • Act as virtual warehouse for th
Slide 24: Food Processor
Food Processor Bunzl is a leading food packaging and Food Processor personal protection equipment provider to 12% of sales the North American food processing industry Customers Include Typical Products Types of Programs – Personal protection equipment – Direct plant delivery – Packaging products – C
Slide 25: Summary
Summary • Predominantly resilient markets • Provide value to our customers • Business model well positioned for current recessionary environment Bunzl North America -24- 2009 Investor Day Presentation
Slide 26: Your Questions
Bunzl North America YOUR QUESTIONS -25- 2009 Investor Day Presentation
Slide 27: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Pat Larmon, CEO Bunzl North America 3. Break 4. James Cunningham, MD Bunzl UK & Ireland 5. Frank van Zanten, MD Bunzl Continental Europe 6. Close 7. Lunch -26- 2009 Investor Day Presentation
Slide 28: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Pat Larmon, CEO Bunzl North America 3. Break 4. James Cunningham, MD Bunzl UK & Ireland 5. Frank van Zanten, MD Bunzl Continental Europe 6. Close 7. Lunch -27- 2009 Investor Day Presentation
Slide 29: Evolution and Sales Growth
Evolution and Sales Growth Healthcare - Southern Syringe £1,100m Catering equipment Safety, Ireland & Healthcare Vending Retail Cleaning & hygiene Catering disposables £18m 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Growth by entry into new sectors overlaid with
Slide 30: Markets We Serve 2008
Markets We Serve 2008 Vending 10% Healthcare Grocery 17% 10% Non-Food Retail 12% Foodservice 25% Cleaning & Safety 26% Sector diversity Bunzl UK & Ireland -29- 2009 Investor Day Presentation
Slide 31: Grocery and Non-Food Retail
Grocery and Non-Food Retail 16,000 SKUs Large NDCs supplying consolidated deliveries of Goods Not For Resale via own fleet direct to store, customer’s warehouse or cross docked Food sector resilient, non-food less resilient Focus on gaining new customers and extending categories in existing customer
Slide 32: Foodservice
Foodservice 25,000 SKUs Large regional branches for disposables supported by NDCs for slow moving lines and catering equipment. Direct to unit deliveries by own fleet and carrier. Cross docking via 3rd parties Disposables more resilient than equipment Focus on winning new customers given competitor
Slide 33: Foodservice - Recent Acquisitions
Foodservice - Recent Acquisitions • Weaker demand impacts competitors • King UK, major supplier of disposables, entered administration on 18 March 2009 impacting profitable associated companies • Acquired business and assets of WK Thomas, foodservice supplier giving Bunzl a position in the travel se
Slide 34: Cleaning & Safety
Cleaning & Safety 35,000 SKUs Local depots including trade shops for customer collection Delivery direct to sites by own vehicles Hygiene sector more resilient, continuing to review resource levels Safety customer sectors’ performance mixed, managing cost structure within branch network Cleaning & h
Slide 35: Vending
Vending 1,800 SKUs Local depots for replenishing operators’ vans National call centre to co-ordinate field based service engineers Scheduled replenishment by operators Less resilient market with higher operational leverage Largest hot beverage vending company in the UK Bunzl UK & Ireland -34- 2009 I
Slide 36: Healthcare
Healthcare 30,000 SKUs Large regional warehouses with central NDC Direct to hospitals using own fleet, direct to care homes via carrier Resilient sector with favourable demographics NDCs Leading independent distributor to all healthcare sectors Bunzl UK & Ireland -35- 2009 Investor Day Presentation
Slide 37: Acquiring and Turning Around an Underperformer
Acquiring and Turning Around an Underperformer Bunzl UK & Ireland -36- 2009 Investor Day Presentation
Slide 38: Southern Syringe Services
Southern Syringe Services • Family owned business incorporated in 1959 • Acquired HM&S in 2004 – stretching resources and service levels • Largest healthcare consumables distributor after NHS Logistics • Customer of Shermond, Bunzl’s own label medical consumables business • Acquired by Bunzl in July
Slide 39: Southern Syringe Services - Key Actions
Southern Syringe Services - Key Actions • Eliminated lower margin business • Introduced Bunzl IT, systems and processes to improve controls and increase efficiencies • Exploited economies of scale with existing healthcare business Headcount Reduction - 28% July 2006 January 2009 • Rebranded as Bunzl
Slide 40: Southern Syringe Services - Results
Southern Syringe Services - Results • Three year goals achieved in two • Reduced working capital • Platform for growth – nursing homes – private hospitals – NHS Ahead of plan, platform for growth Bunzl UK & Ireland -39- 2009 Investor Day Presentation
Slide 41: Competitive Position
Competitive Position • Leading position in broad range of market sectors • Serving major national accounts and local regional customers • Consolidating a wide range of consumables to provide a one stop shop • Through national infrastructures offering supply chain services tailored for customers’ nee
Slide 42: Summary
Summary • Resilient sectors approximately 60 - 65% of sales • Weaker market provides opportunities for acquisitions and adding customers • Focusing on winning new customers and extending business with existing customers • Managing the cost structure where volumes lower • Platform for long term growt
Slide 43: Your Questions
Bunzl UK & Ireland YOUR QUESTIONS -42- 2009 Investor Day Presentation
Slide 44: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Pat Larmon, CEO Bunzl North America 3. Break 4. James Cunningham, MD Bunzl UK & Ireland 5. Frank van Zanten, MD Bunzl Continental Europe 6. Close 7. Lunch -43- 2009 Investor Day Presentation
Slide 45: Introduction
Introduction Key Facts • HQ in Amsterdam • 2008 revenue £823m (20% of Group) • 35+ distribution centres • 11 countries Good geographical spread of activities Bunzl Continental Europe -44- 2009 Investor Day Presentation
Slide 46: Management Team
Management Team Key Attributes Bunzl Continental Europe • Small HQ with flat structure Frank van Zanten Managing Director • Uniform financial reporting Finance • Benefits from central purchasing Purchasing Director Continental Europe Louis Mooijman • Countries with full P&L responsibility Purchasing
Slide 47: Evolution and Sales Growth
Evolution and Sales Growth Healthcare Other 5% 11% Spain €1,037m Non-Food Retail 7% Slovakia Belgium Grocery Czech 12% Poland France Cleaning & Safety Hungary 38% Foodservice Romania 27% Denmark Germany Netherlands €9m 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 50% CA
Slide 48: France
France France Markets: 47% of sales • Cleaning & hygiene • Safety • Healthcare • Foodservice Strong position in each market Investment in IT Streamlining of business continues Safety Cleaning & hygiene Leading position in the marketplace Bunzl Continental Europe -47- 2009 Investor Day Presentation
Slide 49: Benelux
Benelux Benelux Markets: 24% of sales • Foodservice • Grocery • Non-food retail • Healthcare • Cleaning & hygiene Strong market positions in chosen sectors Warehouses Recent entry into Belgium Continued expansion in Netherlands Bunzl Continental Europe -48- 2009 Investor Day Presentation
Slide 50: Other Countries
Other Countries Germany: Other Countries • Foodservice 29% of sales • Strengthened by acquisition of GGS Denmark: • Foodservice • Grocery • Safety • Warehouse rationalisation in MultiLine Central Europe: • Grocery • Safety • Cleaning & hygiene • New IT system Spain: • Safety • Cleaning & hygiene War
Slide 51: Case Study: Benelux Expansion
Case Study: Benelux Expansion 1994 – Market Entry • First move into continental Europe 1994 • Acquisition of Hopa, now Bunzl Almere • Entry into Dutch horeca market 2005 2005 - Gelpa • Acquisition of Gelpa, now Bunzl Arnhem • Entry into Dutch grocery market • Integrated business by mid 2005 • Achiev
Slide 52: Case Study: Benelux Expansion
Case Study: Benelux Expansion 2007 – King Benelux • Entry into Cleaning & hygiene and 1994 healthcare markets. • Entry into Belgian market 2008 2005 • Expansion of retail (grocery and non-food) 2007 • Achieved synergies through: – overlaps with Bunzl Almere – overlaps with Bunzl Arnhem 2007 2007 200
Slide 53: Case Study: Benelux Expansion
Case Study: Benelux Expansion Worldpack Benelux sales Summary King Benelux • Good penetration in target customer sectors Gelpa • Compound annual sales growth of 27% Hopa • Acquisitions integrated quickly and re-branded 1994 2004 2005 2006 2007 2008 where appropriate Horeca Retail • Synergies achieve
Slide 54: Continental Europe Opportunity Matrix
Continental Europe Opportunity Matrix Existing presence Horeca Retail Cleaning Healthcare Safety Germany France Spain Netherlands Belgium Poland Denmark Czech Romania Hungary Slovakia Others Scandinavia, Italy, Austria, Switzerland, Portugal Significant potential for further growth Bunzl Continental
Slide 55: Summary
Summary • Resilience from geographic and sector diversity • Good track record of organic and acquisition growth • Responsive decentralised management team • Experienced at acquisitions and integration • Numerous opportunities for long term growth: – new sectors in existing countries – new geographie
Slide 56: Your Questions
Bunzl Continental Europe YOUR QUESTIONS -55- 2009 Investor Day Presentation
Slide 57: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Pat Larmon, CEO Bunzl North America 3. Break 4. James Cunningham, MD Bunzl UK & Ireland 5. Frank van Zanten, MD Bunzl Continental Europe 6. Close 7. Lunch -56- 2009 Investor Day Presentation
Slide 58: Conclusion
Conclusion • More resilient North America • Leading position in market sectors • New customer wins and more business with existing customers • Less resilient UK & Ireland • Leading position in market sectors • New customer wins Continental • Significant opportunities Europe • Leading position in sev
Slide 59: Thank You
THANK YOU Please join us for lunch -58- 2009 Investor Day Presentation
Slide 60: Appendices
Appendices 1. Glossary 2. North America – Convenience Store 3. North America – Non-Food Retail -59- 2009 Investor Day Presentation
Slide 61: Glossary
Glossary CAGR Compound annual growth rate C-Store Convenience store DC Distribution centre EDI Electronic data interchange Horeca Hotels, restaurants and catering GNFR Goods not for resale NDC National distribution centre R3® Reliable Redistribution Resource ROW Rest of the world, consisting of Aust
Slide 62: Convenience Store
Convenience Store Bunzl is a leading provider of operating Convenience Store supplies and retail goods to the convenience 7% of sales store industry Customers include Typical Products – Foodservice disposables Types of Programs – Retail carry-out bags – Warehouse replenishment – Sanitation and clean
Slide 63: Non-Food Retail
Non-Food Retail Bunzl provides packaging supplies and outsourcing services to some of North Non-Food Retail America’s leading non-food retailers 6% of sales Customers include Typical Products Types of Programs – Store operating supplies (boxes, wrap) – Warehouse replenishment – Retail carry-out bags