Chairman's statement

Taking advantage of growth opportunities in existing and new geographies, Bunzl produced another good set of results driven both organically and by acquisition activity. All four business areas were ahead of 2006 in both revenue and profits in local currencies. Overall revenue rose to £3,581.9 million (2006: £3,333.2 million), an increase of 12% at constant exchange rates. Operating profit before intangible amortisation was £242.9 million (2006: £226.3 million), also up 12% at constant exchange rates. Earnings per share were 39.8p (2006: 37.8p), an increase of 10% at constant exchange rates, and adjusted earnings per share, after eliminating the effect of intangible amortisation, were 45.1p (2006: 41.7p), 13% ahead at constant exchange rates. Adverse currency translation movements, especially the US dollar, reduced Group growth rates by 5% while, if recent spot rates prevail, the translation effect of both the US dollar and the euro will have a positive impact going forward.

Dividend

The Board is recommending a 10% increase in the final dividend to 12.9p. This brings the total dividend for the year to 18.7p, an increase of 10%. Shareholders will again have the opportunity to participate in our dividend reinvestment plan.

Share buy back

During the year the Company conducted an on market share buy back programme under which 14.2 million shares were bought into treasury for a total consideration of £100 million.

Delisting from the New York Stock Exchange

In June the Company delisted its American Depositary Shares (ADSs) from the New York Stock Exchange and ended the registration of its securities under the Securities Exchange Act of 1934. The Board believed that the administrative burden and costs associated with the ADSs and the Exchange Act registration outweighed the benefits to the Company and its shareholders.

Board

Bunzl’s Board was further strengthened by the appointment of David Sleath as a non-executive director in September. Currently Group Finance Director of SEGRO plc, the European industrial property group, David was formerly a Partner and Head of Audit and Assurance for the Midlands region of Arthur Andersen and subsequently became Finance Director of Wagon plc. He has a strong finance background and broad international experience and has added further depth to the independent element of our Board.

Strategy

Bunzl is continuing to pursue a strategy of focusing on its strengths and consolidating the markets in which it competes. Through the pursuit of this strategy we have built leading positions in a number of business sectors in the Americas, Europe and Australasia. In 2007 we further extended our business coverage with acquisitions that took us significantly deeper into our chosen markets in the Netherlands and Ireland, gave us a substantial position in Belgium and continued to consolidate our more established markets elsewhere. Redefining and deepening our commitment to customers and markets, extending our business into new geographies and expanding and co-ordinating our procurement and international sourcing remain important elements of our strategy.

Investment

Both organic growth and acquisitions require investment in the business to expand and enhance its asset base. We have steadily extended and improved our warehouses and opened new ones. Systems are critical to our ability to serve our customers in the most efficient and appropriate manner and we are convinced that our modern systems are a source of heightened advantage that enable us to manage our business in a way that will maintain our leadership in the marketplace. We therefore continuously upgrade our systems as we integrate new businesses into the Group’s operations, increase functionality and enhance customer service.

Environment and climate change

Awareness of the environment and considering how to reduce our impact on it is not new for Bunzl nor is it a passing phase. Our environmental programmes have been in place for over five years and we consistently review and seek to improve our performance in this area. During the year we have particularly focused on educating our employees and informing our customers on environmental issues including how Bunzl can both reduce its own environmental impact and encourage sustainability by providing environmentally friendly products and services. In addition, during 2007 Bunzl provided support to a number of environmental projects which included funding the London Remade Local Authority Network meetings, which promote recycling activities, as well as providing funding for a school and two educational centres to purchase wind turbines to provide them with renewable energy.

Employees

Our employees’ dedication, commitment and approach to their work remain key strengths. Across the world we are reliant on them to provide a high level of customer care which adds value to our service offering. Bunzl’s reputation and spirit is shaped by the sustained relationships our employees forge with all our stakeholders. We are grateful for all the hard work and effort that everyone has shown this year in continuing to grow the business successfully.