Financial highlights

Revenue
+9.4%

at constant exchange rates

Adjusted operating profit*
+20.9%

at constant exchange rates

Adjusted earnings per share*
+26.6%

at constant exchange rates

Dividend per share
+5.5%

For the year ended 31 December 2020. *Alternative performance measure (see Note 3 on page 158 of the 2020 Annual Report).

Financial results 2020 2019 Growth as reported Growth at constant exchange rateΔ
Revenue £10,111.1m £9,326.7m 8.4% 9.4%
Adjusted operating profit* £778.4m £653.3m 19.1% 20.9%
Adjusted profit before income tax* £715.6m £578.2m 23.8% 25.6%
Adjusted earnings per share* 164.9p 132.2p 24.7% 26.6%
Dividend per shareΔ 54.1p 51.3p 5.5%  
         
Statutory results        
Operating profit £618.5m £528.4m 17.1%  
Profit before income tax £555.7m £453.3m 22.6%  
Basic earnings per share 128.8p 104.8p 22.9%  

 

Highlights include:

  • Strong revenue growth of 9.4%, adjusted operating profit* increase of 20.9% and rise in adjusted earnings per share* of 26.6%, all at constant exchange rates
  • 28 year track record of consecutive dividend per share growth continues with a 7.0% increase in the final dividend
  • Continued strong cash conversion* of 103%, with net debt to EBITDA of 1.5x times; substantial headroom for growth
  • Committed acquisition spend of £445 million, the second highest in Bunzl’s history
  • Three further highly complementary acquisitions announced; pipeline active
  • Repayment of employee-related government assistance and significantly increased charitable donations

Commenting on today’s results, Frank van Zanten, Chief Executive Officer of Bunzl, said:

'The past year has presented unparalleled challenges and I would like to express my sincere thanks to the almost 20,000 members of the Bunzl family for their extraordinary hard work and dedication which has ensured we have consistently delivered for our customers. While our historic investment in our supply chains and digital technology was an asset during 2020, it is ultimately our people that have driven our performance.

The pandemic has served to highlight the vital role that Bunzl plays in ensuring supplies of essential products as well as the benefits of our diversification.  As a result of our extensive supply chains and our Asia sourcing and auditing operation, we were able to quickly source and deliver significant quantities of quality assured Covid-19 related products, such as gloves and masks.  Consequently, we were able to offset the negative impact that restrictions had on many of our customers’ businesses, particularly in the foodservice and retail sectors. I am very proud of the role we have played in serving and protecting front line heroes.

Overall in 2021 we expect robust revenue growth over the prior year at constant exchange rates, after excluding larger Covid-19 related orders which we do not expect to repeat. We anticipate that the recovery in sales of other products, as restrictions ease, will broadly offset the decline of smaller Covid-19 related orders, with recent acquisitions making an increasing contribution to the Group’s performance. It is part of our proven and consistent strategy to use our strong balance sheet and cash flows to consolidate the fragmented markets we operate in. We committed £445 million to acquisitions in 2020, have announced three further acquisitions and have an active pipeline supported by substantial financial headroom. Looking ahead, we also expect future growth to be supported by enhanced hygiene trends and our differentiated offering of sustainable and responsible solutions.

Since 2004, Bunzl has delivered robust organic growth, committed £3.9 billion of cash in acquisitions and returned over £1.6 billion to shareholders in dividends. In many ways, the past year has only served to increase my confidence in the long-term prospects for Bunzl.'

* Alternative performance measure (see Note 3 on page 158 of the 2020 Annual Report).

◊ Growth at constant exchange rates is calculated by comparing the 2020 results to the 2019 results retranslated at the average exchange rates used for 2020.

∆ The Board is recommending a 2020 final dividend of 38.3p per share. Including the 2020 interim dividend per share of 15.8p the total dividend per share of 54.1p represents a 5.5% increase compared to the 2019 total dividend per share. During 2020, the Board reinstated the previously cancelled 2019 final dividend of 35.8p per share as an additional 2019 interim dividend which was paid in November 2020. This is included as a component of the 2019 dividend in the table above for comparative purposes.

Consolidated income statement

For the year ended 31 December 2020

  2020
£m
2019
£m
Actual exchange Constant exchange
Revenue 10,111.1 9,326.7 8.4% 9.4%
Adjusted operating profit 778.4 653.3 19.1% 20.9%
Finance income 10.4 12.4    
Finance expense (73.2) (87.5)    
Adjusted profit before income tax 715.6 578.2 23.8% 25.6%
Tax on adjusted profit (165.1) (137.6)    
Adjusted profit for the year 550.5 440.6 24.9% 26.8%
         
Adjusted earnings per share 164.9p 132.2p 24.7% 26.6%
         
Adjusted operating profit 778.4 653.3 19.1% 20.9%
Adjusted for:        
Customer relationships amortisation (100.4) (107.3)    
Acquisition related items (42.7) (17.6)    
Non-recurring pension scheme charges (16.8)    
Operating profit 618.5 528.4 17.1%  
Finance income 10.4 12.4    
Finance expense (73.2) (87.5)    
Profit before income tax 555.7 453.3 22.6%  
Income tax (125.7) (104.1)    
Profit for the year attributable to the Company's equity holders 430.0 349.2 23.1%  
         
Earnings per share attributable to the Company's equity holders        
Basic 128.8p 104.8p 22.9% 24.8%
Diluted 128.3p 104.5p    

 See Note 3 on page 158 of the 2020 Annual Report for further details of the alternative performance measures.

Consolidated balance sheet

At 31 December 2020

  2020
£m
2019
£m
Assets    
Property, plant and equipment 122.7 118.3
Right-of-use assets 453.4 432.9
Intangible assets 2,441.9 2,290.9
Defined benefit pension assets 0.4 10.8
Derivative financial assets 17.0 11.5
Deferred tax assets 2.5 3.7
Total non-current assets 3,037.9 2,868.1
     
Inventories 1,432.2 1,177.2
Trade and other receivables 1,395.8 1,254.1
Income tax receivable 6.6 6.7
Derivative financial assets 12.6 3.4
Cash at bank and in hand 944.3 610.5
Total current assets 3,791.5 3,051.9
Total assets 6,829.4 5,920.0
     
Equity    
Share capital 108.3 108.3
Share premium 187.7 184
Translation reserve (190.9) (111.8)
Other reserves 14.3 16.2
Retained earnings 1,799.7 1,547.6
Total equity attributable to the Company’s equity holders 1,919.1 1,744.3
     
Liabilities    
Interest bearing loans and borrowings 1,615.2 1,314.2
Defined benefit pension liabilities 45.2 46.8
Other payables 50.2 19.5
Income tax payable 2.0 2.4
Provisions 55.7 33.9
Lease liabilities 368.4 358.2
Derivative financial liabilities 0.8
Deferred tax liabilities 105.1 127.5
Total non-current liabilities 2,242.6 1,902.5
     
Bank overdrafts 514.6 469.7
Interest bearing loans and borrowings 79.9 83.7
Trade and other payables 1,836.3 1,502.8
Income tax payable 75.7 81.0
Provisions 8.5 6.5
Lease liabilities 129.1 121.8
Derivative financial liabilities 23.6 7.7
Total current liabilities 2,667.7 2,273.2
Total liabilities 4,910.3 4,175.7
Total equity and liabilities 6,829.4 5,920.0

 

Consolidated cash flow statement

For the year ended 31 December 2020

  2020
£m
2019
£m
Cash flow from operating activities
Profit before income tax 555.7 453.3
Adjusted for:
Net finance expense 62.8 75.1
Customer relationships and brands amortisation 100.4 107.3
Acquisition related items 42.7 17.6
Non-recurring pension scheme charges 16.8
Adjusted operating profit 778.4 653.3
Adjustments:
Depreciation and software amortisation 171.7 160
Other non-cash items 13.2 (3.5)
Working capital movement 5.0 4.3
Cash generated from operations before acquisition related items 968.3 814.1
Cash outflow from acquisition related items (24.3) (19.2)
Income tax paid (153.8) (125.6)
Cash inflow from operating activities 790.2 669.3
 
Cash flow from investing activities
Interest received 15.1 9.8
Purchase of property, plant and equipment and software (33.1) (36.9)
Sale of property, plant and equipment 1.2 8.1
Purchase of businesses (363.2) (143.6)
Cash outflow from investing activities (380.0) (162.6)
 
Cash flow from financing activities
Interest paid excluding interest on lease liabilities (56.6) (61.0)
Dividends paid (171.5) (167.3)
Increase in borrowings 444.5 75.5
Repayment of borrowings (133.5) (173.7)
Realised (losses)/gains on foreign exchange contracts (37.1) 13.6
Payment of lease liabilities – principal (137.1) (128.3)
Payment of lease liabilities – interest (22.5) (23.3)
Proceeds from issue of ordinary shares to settle share options 3.7 5.7
Proceeds from exercise of market purchase share options 37.1 15.8
Purchase of employee trust shares (49.1) (49.2)
Cash outflow from financing activities (122.2) (492.2)
     
Increase in cash and cash equivalents 288.0 14.5
     
Cash and cash equivalents at start of year 140.8 144.2
Increase in cash and cash equivalents 288.0 14.5
Currency translation 0.9 (17.9)
Cash and cash equivalents at end of year 429.7 140.8

 

Alternative performance measures

2020
£m

2019
£m

Cash generated from operations before acquisition related items 968.3 814.1
Purchase of property, plant and equipment and software (33.1) (36.9)
Sale of property, plant and equipment 1.2 8.1
Payment of lease liabilities (159.6) (151.6)
Operating cash flow 776.8 633.7
     
Adjusted operating profit 778.4 653.3
Add back depreciation of right-of-use assets 134.8 128.1
Deduct payment of lease liabilities (159.6) (151.6)
Lease adjusted operating profit 753.6 629.8
     
Cash conversion (operating cash flow as a percentage of lease adjusted operating profit) 103% 101%

See Note 3 on page 158 of the 2020 Annual Report.

Five year review

  IFRS 2020
£m
IFRS 2019
£m
IASΔ 2019
£m
2018
£m
2017
£m
2016
£m
Revenue 10,111.1​ 9,326.7 9,326.7 9,079.4 8,580.9 7,429.1
Operating profit 618.5​ 528.4 506.0 466.2 456.0 409.7
Finance income 10.4​ 12.4 12.4 11.6 10.6 7.1
Finance expense (73.2)​ (87.5) (64.2) (66.6) (57.3) (53.9)
Profit on disposal of businesses 13.6
Profit before income tax 555.7​ 453.3 454.2 424.8 409.3 362.9
Income tax (125.7)​ (104.1) (104.3) (98.3) (98.8) (97.0)
Profit for the year attributable to the Company's equity holders 430.0​ 349.2 349.9 326.5 310.5 265.9
Basic earnings per share 128.8p​ 104.8p 105.0p 98.4p 94.2p 80.7p

 

Alternative performance measures            
Adjusted operating profit 778.4​ 653.3 630.9 614.0 589.3 525.0
Adjusted profit before income tax 715.6​ 578.2 579.1 559.0 542.6 478.2
Adjusted profit for the year 550.5​ 440.6 441.3 429.9 393.4 349.6
Adjusted earnings per share 164.9p​ 132.2p 132.4p 129.6p 119.4p 106.1p

 

† See Note 3 on page 158 of the 2020 Annual Report for further details of the alternative performance measures.

Δ Following the adoption of IFRS 16 ‘Leases’ with effect from 1 January 2019, because the Group has adopted the accounting standard using the modified retrospective approach to transition and has accordingly not restated prior periods, the results for the year ended 31 December 2019 are not directly comparable with those reported in the prior year under the previous applicable accounting standard, IAS 17 ‘Leases’. To provide meaningful comparatives, the results for the year ended 31 December 2019 have therefore also been presented under both IAS 17 and IFRS 16 accounting standards.