Bunzl plc Double digit percentage revenue increases

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Bunzl plc (LON:BNZL), the specialist international distribution and services Group, today published its half yearly financial report for the six months ended 30 June 2018.

Financial results	H1 18	H1 17	Growth as reported	Growth at constant exchange
Revenue	£4,343.7m	£4,119.2m	5%	12%
Adjusted operating profit*	£285.0m	£272.6m	5%	10%
Adjusted profit before income tax^Δ	£257.9m	£248.3m	4%	10%
Adjusted earnings per share^Δ	59.4p	55.1p	8%	14%
Interim dividend	15.2p	14.0p	9%

Statutory results
Operating profit	£210.8m	£206.2m	2%
Profit before income tax	£197.3m	£181.9m	8%
Basic earnings per share	45.1p	40.0p	13%

Highlights include:

· Double digit percentage increases at constant exchange rates in revenue, adjusted operating profit* and adjusted earnings per shareΔ

· Organic revenue growth increased to 5.2%

· Group operating margin* unchanged at 6.6%

· Four acquisitions announced to date, including one announced today, with a total committed spend of £132 million; disposal of two non-core businesses in France and the UK

· Return on average operating capital of 52.0% with return on invested capital of 15.4%

· Continued strong cash conversion (operating cash flow† to adjusted operating profit*) of 94%

· 25 year track record of dividend growth continues with a 9% increase in the interim dividend

* Before customer relationships amortisation and acquisition related items

Δ Before customer relationships amortisation, acquisition related items, disposal of businesses and associated tax where relevant (see Note 1 on pages 25 to 27)

† Before acquisition related items

Commenting on today’s results, Frank van Zanten, Chief Executive of Bunzl Plc, said: “Bunzl has delivered another good set of results with double digit increases at constant exchange rates in revenue, adjusted operating profit and adjusted earnings per share. I am particularly pleased to report a further improvement in the level of organic revenue growth to 5.2% during the first half of 2018.

Looking forward to the rest of the year, the Board is confident that the prospects for the Group are positive and that the Company will continue to develop the business and build shareholder value through a combination of organic growth and further acquisitions as the year progresses.”

Business area highlights:

	Revenue (£m)		Growth at constant	Adjusted operating profit* (£m)		Growth at constant	Operating margin*
	H1 18	H1 17	exchange	H1 18	H1 17	exchange	H1 18	H1 17
North America	2,459.6	2,432.6	10%	140.1	148.0	3%	5.7%	6.1%
Continental Europe	890.2	769.0	15%	88.6	73.1	22%	10.0%	9.5%
UK & Ireland	625.9	566.1	11%	39.7	37.9	5%	6.3%	6.7%
Rest of the World	368.0	351.5	14%	28.2	25.1	23%	7.7%	7.1%

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North America (57% of revenue and 47% of adjusted operating profit◊)

· Revenue growth driven by strong organic growth and impact of acquisitions

· Reduction in margin from significant business previously won in grocery and operating cost pressures

· More focused and streamlined organisation structure being implemented in grocery and redistribution to enhance customer proposition and improve operational efficiency

· Integration of DDS continuing with synergies on track

· Growth in agriculture supported by acquisition of Monte Package Company

· Good progress in safety from improving market conditions, boosted by acquisition of Revco

Continental Europe (21% of revenue and 30% of adjusted operating profit◊)

· Substantial increases in revenue and profit with improved operating margin

· Significant overall growth in France due to integration of Hedis and strong performances in safety and foodservice, partly offset by weaker performance in cleaning & hygiene and disposal of OPM

· Good growth in the Netherlands from new customer wins and acquisition of QS

· Continued strong performance in Spain

· Strong performance in Turkey with good progress in Italy

UK & Ireland (14% of revenue and 13% of adjusted operating profit◊)

· Strong organic revenue growth with operating margin impacted by a challenging market

· Trading in safety affected by variable market conditions

· Good revenue growth in cleaning & hygiene

· Strong growth in grocery and retail from new customer wins

· Sale of non-core marketing services business

· Growth in hospitality from existing customers and the acquisition of Aggora

Rest of the World (8% of revenue and 10% of adjusted operating profit◊)

· Substantial improvement in operating margin