Bunzl Plc · LSE:BNZL
Bunzl — H1 2006 Earnings Presentation
26 slides from Bunzl's earnings presentation, Nov 13, 2006
Slide 1: Interim Results 2006
a BUNZL a Interim Results 2006
Slide 2: Bunzl is a focused, international distribution and outsourcing Group
Bunzl is a focused, international distribution and outsourcing Group
Slide 3: Brian May, Finance Director
Brian May Finance Director
Slide 4: Income Statement (£m)
Income Statement (£m) June 06 June 05 Growth (%) Continuing operations Existing 1,592.0 1,366.3 17 Acquisitions 11.2 Total revenue 1,603.2 1,366.3 17 Existing 103.9 91.8 13 Acquisitions 0.9 Operating profit * 104.8 91.8 14 * Before intangible amortisation
Slide 5: Income Statement (£m)
Income Statement (£m) June 06 June 05 Growth (%) Operating profit * 104.8 91.8 14 Net finance cost (7.0) (4.0) Profit before tax * 97.8 87.8 11 Intangible amortisation (9.7) (7.3) Income tax (28.1) (25.6) Profit from continuing operations 60.0 54.9 9 Profit from discontinued operations - 4.2 * Befor
Slide 6: Earnings and Dividends (p)
Earnings and Dividends (p) June 06 June 05 Growth (%) Continuing operations No of shares (m) 343.7 336.0 Earnings per share 17.5 16.3 7 Adjusted earnings per share 19.3 17.8 8 Dividend per share 5.3 4.9 8
Slide 7: Balance Sheet (£m)
Balance Sheet (£m) June 06 June 05 Dec 05 Intangibles 699.1 597.2 695.5 Tangibles 72.7 64.2 69.8 Working capital 262.1 235.0 261.9 Other liabilities (193.8) (167.0) (151.3) Net assets excluding pensions 840.1 729.4 875.9 Pension deficit (39.9) (53.2) (60.0) 800.2 676.2 815.9 Equity 503.6 390.6 460.4
Slide 8: Cash Flow (£m)
Cash Flow (£m) June 06 June 05 Continuing operations Cash flow from operating activities 92.2 73.6 Capital expenditure (7.7) (4.2) Interest (2.6) .- Tax (11.4) (31.2) Dividends (16.5) (18.5) Free cash flow 54.0 19.7 Acquisitions (24.0) (22.7) Demerger of business .- 115.4 Employee share schemes 3.3
Slide 9: Summary
Summary • Revenue up 17% • Operating profit * up 14% • Underlying operating margin increased to 6.8% • Adjusted eps up 8% • Operating cash flow 88% of operating profit * • Return on operating capital at 63% * Before intangible amortisation
Slide 10: Michael Roney, Chief Executive
Michael Roney Chief Executive
Slide 11: By Business Area
By Business Area H1 06 Revenue Operating profit * 4% 3% 17% 19% 55% 58% 21% 23% North America Continental Europe UK & Ireland Australasia * Before intangible amortisation and corporate
Slide 12: North America
North America June 06 June 05 Growth (%) Revenue (£m) 934.3 753.2 24 Operating profit * (£m) 62.0 52.5 18 Margin (%) 6.6 7.0 Return on operating capital (%) 69.5 73.6 * Before intangible amortisation
Slide 13: North America
North America • Dollar revenue rose 19% - stronger underlying growth - increased input prices • Dollar operating profit rose 14% - slight improvement in underlying margin - despite continued competitive pressure • Lower margin acquisitions from 2005 - recently put on our IT system - improvement in m
Slide 14: North America
North America • Good control over operating costs - higher fuel costs - more efficient routing of trucks • Increase in global sourcing - higher level of Asian imports - second consolidation warehouse in Shanghai
Slide 15: UK & Ireland
UK & Ireland June 06 June 05 Growth (%) Revenue (£m) 334.3 326.1 3 Operating profit * (£m) 25.5 24.8 3 Margin (%) 7.6 7.6 Return on operating capital (%) 73.3 65.5 * Before intangible amortisation
Slide 16: UK & Ireland
UK & Ireland • Sales and operating profit up by 3% - slower underlying growth - highest return on operating capital of any business area • Growth in retail supplies • Challenging market conditions in horeca - implementing several operating initiatives • Improved margins in cleaning and safety • Impo
Slide 17: Continental Europe
Continental Europe June 06 June 05 Growth (%) Revenue (£m) 278.3 239.8 16 Operating profit * (£m) 20.9 18.8 11 Margin (%) 7.5 7.8 Return on operating capital (%) 45.7 50.8 * Before intangible amortisation
Slide 18: Continental Europe
Continental Europe • Sales and operating profit up 16% and 11% respectively - stronger underlying growth - lower margin acquisitions in 2005 - margin pressure in France - improving margins elsewhere • Strong growth in Central Europe, Netherlands, Germany and Denmark • France - growth in national acc
Slide 19: Australasia
Australasia June 06 June 05 Growth (%) Revenue (£m) 56.3 47.2 19 Operating profit * (£m) 3.9 3.3 18 Margin (%) 6.9 7.0 Return on operating capital (%) 51.6 51.3 * Before intangible amortisation
Slide 20: Australasia
Australasia • Sales and operating profit up 19% and 18% respectively - underlying growth satisfactory • New acquisitions are integrating well - Sanicare (July 2005) - Allcare (April 2006) • Cost reduction initiatives - consolidation import trials in Shanghai - specific cost reduction project
Slide 21: Strategy
Strategy • Pursue organic growth • Continue to refine operating model • Increase international sourcing and consolidation • Acquire in higher potential sectors • Logically extend successful sectors
Slide 22: Acquisitions
Acquisitions Business Country Sector Revenue Midshires UK Vending £11.6m Master Craft Packaging USA Redistribution $10.6m Picardie Hygiene France Cleaning & Hygiene €9.9m Allcare Australia PPE A$23.0m Southern Syringe UK Healthcare £182.0m Morgan Scott Canada Jan/San & Foodservice C$65.6m United Ame
Slide 23: Acquisitions
Acquisitions • Total annual sales c.£285 million • Total cost £90 million • Follows our strategy • Open up new opportunities
Slide 24: Prospects
Prospects North America • Good underlying growth and the positive impact from acquisitions • Upward pressure from product prices • 2005 acquisitions - margins to improve UK & Ireland • Lower organic growth than 2005 • Further operating efficiencies • Integration of Southern Syringe
Slide 25: Prospects
Prospects Continental Europe • Good organic growth • Some margin pressure • IT investment in new acquisitions • Acquisition opportunities - further consolidation - extend coverage to new countries Australasia • Satisfactory organic growth • Increased international sourcing • Recent acquisitions inte
Slide 26: Prospects
Prospects • FX rates - US$/£ - if current rate holds slightly adverse for the year - all other currency impacts minor • Limited share buy back - strategic priority to grow organically and by acquisition - acquisition pipeline good - consistent with the Board’s objective of maintaining an appropriate