27
August 2024
FINANCIAL REPORT FOR SIX
MONTHS ENDED 30 JUNE 2024
Full year profit upgrade,
record year for acquisitions and three-year capital
allocation commitment with an initial £250 million share
buyback
Bunzl plc, the specialist
international distribution and services Group, today publishes its
financial report for the six months ended 30 June 2024.
|
Financial results
|
H1 24
|
H1
23
|
Growth
as
reported
|
Growth
at
constant
exchange*
|
|
Revenue
|
£5,711.5m
|
£5,906.8m
|
(3.3)%
|
(0.4)%
|
|
Adjusted operating
profit*
|
£455.5m
|
£438.3m
|
3.9%
|
7.4%
|
|
Adjusted profit before income
tax*
|
£408.7m
|
£395.6m
|
3.3%
|
6.7%
|
|
Adjusted earnings per
share*
|
90.8p
|
88.3p
|
2.8%
|
6.2%
|
|
Interim dividend
|
20.1p
|
18.2p
|
10.4%
|
|
|
Statutory results
|
|
|
|
|
|
Operating profit
|
£349.6m
|
£359.8m
|
(2.8)%
|
|
|
Profit before income tax
|
£279.4m
|
£317.1m
|
(11.9)%
|
|
|
Basic earnings per share
|
59.2p
|
70.8p
|
(16.4)%
|
|
Highlights include:
|
·
|
Revenue declined
by 0.4% at constant exchange rates*; with underlying revenue
trends improving in the second quarter, with further improvement in
July and August
|
|
·
|
Adjusted operating profit*
increased by 7.4% at constant exchange rates, reported operating
profit declined by 2.8%
|
|
·
|
Strong increase
in operating margin* from 7.4% to 8.0%
|
|
·
|
Adjusted earnings per share*
increased by 6.2% at constant exchange rates, reported basic
earnings per share declined by 16.4%, largely due to the currency
translation driven loss related to the disposal of our business in
Argentina
|
|
·
|
Continued strong free cash flow*
driven by excellent cash conversion of 100%
|
|
·
|
Interim dividend per share grew by
10.4%, extending 31 consecutive years of annual dividend growth.
Expected dividend cover in 2024 of 2.65 times, with further
normalisation in 2025
|
|
·
|
Seven acquisitions announced
August year-to-date, including PowerVac announced today; annual
committed acquisition spend so far this year is already over £650
million
|
|
·
|
2024 outlook: adjusted operating
profit guidance upgraded, driven by improved margin performance and
acquisitions
|
|
·
|
Commitment to allocate c.£700
million per annum primarily towards value-accretive acquisitions
and, if required, return of capital, in each of the three
years ending 31 December 2027
|
|
·
|
Recognising the Group's strong
balance sheet, the Board has today announced an initial £250
million share buyback that will commence with immediate effect, to
be completed no later than 3 March 2025. The Board
expects to announce a further share buyback at its 2024 preliminary
results of c.£200 million
|
Commenting on today's results, Frank
van Zanten, Chief Executive Officer of Bunzl, said:
"I am very pleased with the
performance of the Group during the first half of 2024, with strong
growth in adjusted operating profit for the period. We have
significantly increased the Group's operating margin in recent
years to 8%, driven by good margin management, including increased
own brand penetration, and the impact of recently acquired
businesses. In 2024 our committed acquisition spend is already at a
record high of over £650 million. Consistent strong performance
means Bunzl has generated around £2.9bn of free cash flow between
2019 and 2023, significantly strengthening our balance sheet.
Despite a material increase in the amount of capital we have
allocated towards self-funding value-accretive acquisitions, our
consistently strong cash generation means that leverage has
remained below our target range for some time. Our acquisition
pipeline remains active and our runway of opportunity is
substantial. Today the Group is in an excellent position to pursue
our pipeline of value-accretive acquisitions within the very large
and fragmented global markets that we operate in, and also return
excess cash to shareholders. We are committing to steadily return
leverage to our target range by the end of 2027, and therefore
announce a substantial share buyback that will commence with
immediate effect.
I remain confident that the
resilience of our business model, the diversification of our
portfolio across sectors and regions, and the consistent focus on
our strategic priorities will continue to support the Group's
performance and maintain our strong track record of value
creation."
* Alternative performance measure
(see Note 2).
Strategic progress:
| · |
Strong increase in first half
operating margin, supported by good margin management, including
increasing penetration of own brands and the impact of higher
margin acquisitions
|
| · |
Seven acquisitions announced
August year-to-date, across multiple sectors and geographies,
including our first entry into Finland. Annual committed spend so
far this year is already over £650 million, highlighting the
breadth of Bunzl's opportunity
|
| · |
Continued optimisation of our
portfolio through the disposal of two small businesses; a safety
business in Argentina in March and a business which supplies
incontinence products in Germany in July
|
| · |
Driving operating efficiencies
with 13 warehouse relocations and consolidations in the first half
of the year, along with further investments into digital solutions
and automation
|
| · |
Processed 73% of orders digitally
compared to 71% in the first half of 2023, supporting customer
retention and enhancing operational efficiency
|
Business area highlights:
|
|
Revenue (£m)
H1 24
H1 23
|
Growth at constant exchange*
|
Underlying revenue
growth*
|
Operating
profit* (£m)
|
Growth at
constant exchange*
|
Operating margin*
|
|
H1 24
|
H1 23
|
H1 24
|
H1 23
|
|
North
America
|
3,234.8
|
3,514.4
|
(5.1)%
|
(6.4)%
|
239.1
|
245.6
|
0.3%
|
7.4%
|
7.0%
|
|
Continental Europe
|
1,186.9
|
1,179.1
|
3.8%
|
(3.4)%
|
106.7
|
106.8
|
3.0%
|
9.0%
|
9.1%
|
|
UK &
Ireland
|
689.1
|
663.8
|
4.1%
|
(5.6)%
|
52.6
|
44.7
|
18.2%
|
7.6%
|
6.7%
|
|
Rest of
the World
|
600.7
|
549.5
|
15.1%
|
2.2%
|
73.0
|
57.1
|
35.9%
|
12.2%
|
10.4%
|
|
· |
North America: underlying
revenue decline driven by deflation; volume reductions in our US
foodservice redistribution business as we increased our own brand
penetration; and the expected impact from transitioning ownership
of customer specific inventory in our US retail business. Strong
operating margin increase supported by good margin management,
including meaningful expansion of own brands
|
|
· |
Continental Europe: revenue
growth at constant exchange rates was driven by the contributions
from acquisitions. Underlying revenue was impacted by deflation,
which is expected to be temporary
|
|
· |
UK & Ireland: underlying
revenue decline was mainly driven by deflation, which is expected
to be temporary, and soft volumes particularly in the grocery and
foodservice sectors. Strong operating margin increase driven by the
continued focus on good margin management
|
|
· |
Rest of the World: underlying
revenue increased moderately, mainly driven by volume growth in
Latin America across most businesses, and some inflation benefits
and volume growth in Asia Pacific. Very strong operating margin
increase driven by the positive contribution from acquisitions and
good margin management
|
Outlook
Given our performance year to
date, we are upgrading our 2024 adjusted operating profit guidance,
as a result of further operating margin growth:
| · |
We expect adjusted operating
profit in 2024 to show a strong increase in comparison with 2023,
at constant exchange rates, mainly driven by an increase in the
Group operating margin due to good margin
management (including increased own brand penetration) and positive
contributions from acquisitions
|
| · |
Group operating margin is now
expected to be moderately above the level reported for
2023
|
| · |
We continue to expect to deliver
robust revenue growth in 2024, at constant exchange rates, driven
by acquisitions already completed in 2024; with a small decline in
underlying revenue
|
| · |
Other aspects of our full year
2024 guidance, which exclude the impact of the share buyback
announced today, are: (1) the full year effective tax rate is now
expected to be around 25.5% in 2024; (2) the Group now expects net
finance expenses in 2024 to be around £100 million; (3) expected
dividend cover in 2024 of 2.65 times; and (4) weighted average
number of shares are expected to be around 335.5m
|
* Alternative performance measure (see Note 2).
Enquiries:
|
Bunzl
plc
Frank van
Zanten, Chief Executive Officer Richard Howes, Chief Financial
Officer
Tel: +44
(0)20 7725 5000
|
Teneo
Martin
Robinson Olivia Peters
Tel: +44
(0)20 7353 4200
|
Note: A live webcast of
today's presentation to analysts will be available on
www.bunzl.com, commencing at 9.30 am.
2024 HALF YEAR RESULTS
Overview
Bunzl has performed very well in
this period. We have once again achieved strong adjusted operating
profit growth, driven by a significant expansion in our operating
margin compared to the first half of last year and maintaining the
record operating margin level we achieved for the full year 2023.
This was the result of our team's dedication to driving margin
management initiatives, such as increasing the penetration of our
own brand products, which is now at 27%, and achieving operational
efficiencies. At the same time, our operating margin has benefitted
from the contributions of acquisitions with higher margins than the
Group average over recent years.
Bunzl's operating companies have
consistently focused on expanding their value-added services to
customers, supporting organic growth, customer retention, and
margin opportunities. Alongside our sustainability and digital
capabilities, the development of innovative own brand ranges
continues to strengthen Bunzl's competitive advantage, as we create
products that drive value and meet specific customer needs, at
compelling prices. We continue to collaborate with our strategic
third-party branded supplier partners to provide unparalleled
choice for our customers.
Our strategy remains focused on
organic growth and operational improvements as we simultaneously
develop the business through acquisitions. The Group has announced
seven acquisitions August year-to-date, including PowerVac
announced today, with committed spend so far this year already over
£650 million, exceeding the previous high of £616 million achieved
in 2017. Overall, the range of acquisitions announced,
across seven countries and five sector verticals,
demonstrates the depth of opportunity that Bunzl has for further
acquisition growth. The continued consolidation of its fragmented
end markets is a key driver of future growth for the
Group.
Bunzl is focused on disciplined
portfolio management, and the Group has optimised
its portfolio by disposing of two small businesses so far this year
with annualised revenue of only c.£17 million. In March, our
business in Argentina was sold to its management team, and in July,
the Group sold a German business which supplies incontinence
products.
Operating performance
The commentary below is stated at
constant exchange rates unless otherwise highlighted.
Revenue
Revenue declined by 0.4% to
£5,711.5 million. Acquisition related revenue growth of 3.7% and a
0.8% benefit from an additional trading day in the period were
offset by an underlying revenue decline of 4.9%. Organic revenue
decline, which is not adjusted for the impact of the number of
trading days during the period, was 4.1%. The decline in revenue
was mainly driven by deflation across North America, Continental
Europe and the UK & Ireland; volume softness in our US
foodservice redistribution business as we made strategic changes to
increase our own brand penetration; and the expected impact from
transitioning ownership of customer specific inventory in our US
retail business. There was no material revenue impact from the
disposal of our business in Argentina.
As expected, there was an
improvement in volumes throughout the period and the Group saw
further revenue improvement trends in July and August.
The sector performance is outlined
below:
Safety, cleaning & hygiene and healthcare
- total organic revenue in the safety, cleaning
& hygiene and healthcare businesses saw a 0.8% decline over the
period. Our safety businesses have seen a small impact from
deflation. Increased infrastructure spend in North America is a
potential medium term support for our safety businesses. The cleaning & hygiene sector saw some volume
growth throughout the period, however, deflation more than offset
this leading to a small organic revenue decline. Organic revenue in
our healthcare businesses was broadly flat with volume growth
offset by deflation.
Grocery and other sectors -
total organic revenue in the grocery and other sectors declined by
2.9%, mainly driven by deflation and volume softness with some of
our larger customers.
Foodservice and retail - the
foodservice and retail businesses combined saw organic revenue
decline by 7.6% compared to the prior year period. Deflationary
pressures contributed a large part of the decline. In addition,
there was volume softness in our US foodservice redistribution
business as we made strategic changes to increase our
own brand penetration. As expected, there was some improvement in volumes throughout
the period. The retail sector saw a
decline in revenues as expected, mainly in North America, primarily
from transitioning ownership of customer specific inventory to certain customers.
Profit and earnings
Adjusted operating profit was
£455.5 million, an increase of 7.4%. Operating margin increased to
8.0% compared to 7.4% in the first half of 2023, supported by good
margin management, including increasing penetration of own brands,
the benefit of higher margin acquisitions, and pursuing operational
efficiencies. Reported operating profit was £349.6 million, an
increase of 0.4%.
The effective tax rate of 25.5%
was higher than the 25.2% in the prior period, reflecting
the increase in the UK statutory tax rate
from 23.5% for calendar year 2023 to 25.0% for 2024.
Adjusted earnings per share were
90.8p, an increase of 6.2%, and basic earnings per share were
59.2p, a decrease of 13.6%, largely due to the currency translation
loss related to the disposal of our business in
Argentina.
Cash and returns
The Group's cash generation
continues to be strong, with 100% cash conversion (operating cash
flow as a percentage of lease adjusted operating profit) ahead of
our 90% target.
Compared to the first half of
2023, free cash flow increased by 8.4% at actual exchange rates, to
£310.4 million, with a very strong increase in operating cash flow
partially offset by a higher cash outflow relating to income tax
and interest paid. The strength of our underlying free cash flow
generation continues to enable our investment in the business,
progressive dividends, self-funded
value-accretive acquisitions and other capital allocation
options.
Returns remained strong with
return on average operating capital of 45.3% (46.1% at 31 December
2023), while return on invested capital was 15.3% (15.5% at 31
December 2023).
Organic growth and operational efficiency
We remain committed to delivering
growth through our consistent compounding strategy which focuses on
organic growth, operational efficiency and acquisitions. Our
colleagues have continued to provide our customers with innovative
products and services, with a particular focus on our
sustainability offering. We have also focused on increasing the
percentage of own brand products sold to our customers, as these
products enhance our value-added proposition with specifications
designed to meet our customers' needs, and they are offered at
compelling prices. Our own brand penetration is currently c.27%,
compared to c.25% in full year 2023.
We have further increased the
proportion of digital sales, which accounted for 73% of orders over
the period compared to 71% in the first half of 2023. To improve
efficiency of our processes we have continued to implement new
technologies and automation.
Pursuing operating efficiencies
remains an important part of our strategy to reduce the impact of
operating cost inflation. Operating costs were impacted by
inflation in North America, Continental Europe and UK &
Ireland, mainly driven by lease renewals which remained high.
However, we have been able to partially offset the increase through
further optimisation of our warehouse footprint with the
consolidation of nine warehouses and the relocation of an
additional four. Wage inflation increased in all business areas in
comparison with the prior year period, but was
manageable.
Acquisitions
During the first half of the year,
Bunzl announced six acquisitions and completed one additional
acquisition, with one further acquisition announced today,
PowerVac, bringing total committed spend to over £650 million. The
seven acquisitions announced August year-to-date are across seven
countries and five sector verticals, including our first entry into
Finland, which further extends our business in the Nordics where we
already have a strong presence.
|
Acquisition*
|
Completion
|
Description
|
|
Pamark
Group
|
February
2024
|
· A leading
distributor of cleaning & hygiene, healthcare, foodservice and
safety products to a broad range of customers in Finland
· Bunzl's anchor
acquisition into Finland
· Revenue
of EUR 56 million in 2023
(c.£49 million)
|
|
Nisbets
|
May
2024
|
· A leading
omnichannel distributor
of catering equipment and consumables
based in the UK
· Revenue
of £498 million in 2023
|
|
Clean
Spot
|
June
2024
|
· A distributor of
cleaning & hygiene products and equipment in Canada
· Revenue of CAD 7
million in 2023 (c.£4 million)
|
|
Sistemas
De Embalaje Anper
|
June
2024
|
· A
distributor of industrial packaging to end-users
in Spain
· Revenue of
EUR 28 million in 2023 (c.£24
million)
|
|
Holland
Packaging
|
June
2024
|
· A distributor of
bespoke and customised packaging products and supplies to
e-commerce focused companies based in the Netherlands
· Revenue of EUR
16 million in 2023 (c.£14 million)
|
|
RCL
Implantes
|
July
2024
|
· A
distributor specialising in surgical and
medical devices in Brazil
· Revenue of
BRL 112 million in 2023 (c.£18 million)
|
|
PowerVac
|
July
2024
|
· A
distributor of commercial and industrial cleaning
equipment in Western Australia
· Revenue of AUD
10 million in 2023 (c.£5 million)
|
* In addition to the above
acquisitions, one small acquisition was completed in the first half
of 2024 with a revenue of £12 million for the year ending April
2024.
The strength of the Group's cash
conversion and balance sheet continues to enable the Group to
self-fund further acquisitions, largely through cash generated in
the period. Our pipeline remains active, and we see significant
opportunities for continued acquisition growth in our existing
markets, as well as potential to expand into new
markets.
Capital allocation and
shreholder returns
Our capital allocation priorities remain
unchanged and focused on the following: (1) to invest in the
business to support organic growth and operational efficiencies;
(2) to pay a progressive dividend; (3) to self-fund value-accretive
acquisitions; and (4) to distribute excess cash.
Between 2004 and 30 June 2024, Bunzl has returned
£2.3 billion to shareholders through dividends and has committed
£5.8 billion in acquisitions to support a growth strategy that
has delivered an annual adjusted earnings
per share CAGR between 2004 and 2023 of c.10%.
Reinvesting cash into the business
to support organic growth and operational efficiencies remains our
key priority. The Group also remains committed to ensuring
sustainable dividend growth. The Board is recommending an interim
dividend of 20.1p, 10.4% higher than the prior year period,
following on from the Group's 31st consecutive year of annual
dividend growth in 2023. Dividend cover in 2024 is expected to
reduce to around 2.65 times,
with further normalisation of dividend cover
in 2025 to between 2.5 and 2.6 times in
order to enhance returns for shareholders.
The strength of Bunzl's
performance in recent years has resulted in low leverage compared
to an adjusted net debt to EBITDA target of 2.0 to 2.5 times. This
is despite a step change in the level of value-accretive
acquisition spend in recent years, and the record committed spend
already achieved in 2024. At 30 June 2024, the Group had an
adjusted net debt balance of c.£1.7 billion, which excludes lease
liabilities and includes total deferred and contingent
consideration, with an adjusted net debt to EBITDA ratio of 1.5
times. The Group is today committing to measures which are intended
to steadily return it to its target leverage range by the end of
2027.
As a highly cash-generative
business, Bunzl is expected to have significant capacity to
continue its proven strategy of completing value-accretive
acquisitions, and its acquisition pipeline remains active within
the very large and fragmented global markets that it operates in.
Aligned to Bunzl's disciplined capital allocation policy, and
supported by strong free cash flow generation, Bunzl has today
committed to allocate c.£700 million per annum, primarily to invest
in value-accretive acquisitions and, if required, returns of
capital, in each of the three years ending 31 December 2027.
If at the end of each year, the total committed spend on
value-accretive acquisitions is below £700 million, the Group will
return the remainder to shareholders through a capital return in
the following year.
In addition, and recognising the
Group's strong balance sheet, the Board has today announced an
initial £250 million share buyback that will commence with
immediate effect, to be completed no later than 3 March 2025,
coinciding with the date of Bunzl's preliminary results for the
year ended 31 December 2024. The Board expects to
announce a further share buyback at its 2024 preliminary results of
c.£200 million.
BUSINESS AREA REVIEW
North America
57% of revenue and 51% of adjusted operating
profit*†
|
|
H1 24
£m
|
H1 23
£m
|
Growth
at
constant
exchange*
|
Underlying
growth*
|
|
Revenue
|
3,234.8
|
3,514.4
|
(5.1)%
|
(6.4)%
|
|
Adjusted operating
profit*
|
239.1
|
245.6
|
0.3%
|
|
|
Operating margin*
|
7.4%
|
7.0%
|
|
|
* Alternative performance measure (see Note
2)
†Based on
adjusted operating profit and before corporate costs (see Note
3)
In North America, revenue declined
5.1% to £3,234.8 million with underlying revenue declining by 6.4%.
The decline in underlying revenue is driven by deflation; volume
reductions in our foodservice redistribution business as explained
previously; and the expected impact from transitioning ownership of
customer specific inventory in our retail business to certain
customers in early 2023. As expected, there was an improvement in
volumes throughout the period. Despite the revenue decline,
adjusted operating profit increased by 0.3%, to £239.1 million with
operating margin at 7.4%, up from 7.0% in the prior year period.
This was driven by strong margin growth in our grocery segment,
largely driven by continued own brand expansion as well as margin
enhancement initiatives in our safety segment, which more than
offset operating cost inflation.
Our business which supports the US
grocery sector declined moderately, primarily due to price
deflation. Volumes declined slightly, although were supported by a
significant new business win commencing late in the period, the
benefit of which will accelerate through the remainder of the year.
Good margin management, as well as continued strong growth in own
brands, drove overall improvement in operating margin and profits.
Our convenience store sector revenues declined, though delivered
good growth in both operating margins and profits.
Our foodservice redistribution
business declined, with deflationary pressures contributing a large
part of the decline. Deflationary pressure also increased price
competition, which alongside strategic changes in the business to
drive more own brand penetration, resulted in lower volumes. As
expected, there was some improvement in volumes throughout the
period.
Our food processor sector revenues
declined, primarily as a result of price deflation, though
operating margins were slightly higher, keeping profit steady. Our
businesses serving the agriculture sector saw some revenue and
operating profit declines, mainly driven by product cost
deflation.
In the cleaning & hygiene
sector, revenues declined moderately, as price deflation was offset
in part by growth in own brand product categories.
Revenue in our retail supplies
business declined primarily from transitioning ownership of
customer specific inventory to certain customers in early 2023.
However, adjusted operating profit improved significantly as a
result of a continued favourable mix shift toward higher margin
packaging and value-added services, increased own brands and
well-controlled operating costs.
Revenue in our safety business
declined moderately, primarily caused by price deflation, as well
as increased competitive pressure in some categories. Operating
margins and operating profit improved as a result of strong margin
management.
Finally, our business in Canada
grew slightly, driven by acquisitions. Underlying revenues
declined, primarily due to price deflation and some volume loss in
packaging categories. As we have seen across our businesses, strong
margin management and increased own brand penetration improved
operating profit and margins, further supported by acquisition
growth.
Continental Europe
21% of revenue and 23% of adjusted operating
profit*†
|
|
H1 24
£m
|
H1 23
£m
|
Growth
at constant
exchange*
|
Underlying
growth*
|
|
Revenue
|
1,186.9
|
1,179.1
|
3.8%
|
(3.4)%
|
|
Adjusted operating
profit*
|
106.7
|
106.8
|
3.0%
|
|
|
Operating margin*
|
9.0%
|
9.1%
|
|
|
* Alternative performance measure (see Note
2)
†Based on
adjusted operating profit and before corporate costs (see Note
3)
Revenue in Continental Europe grew
by 3.8% to £1,186.9 million, driven by the
benefit of acquisitions. Underlying revenue was impacted by
deflation, which is expected to be temporary, and declined by 3.4%.
Adjusted operating profit increased by 3.0% to £106.7 million, with
a slight decrease in operating margin from 9.1% to 9.0%, as good
margin management was broadly offset by the combined impact of
selling price deflation and operating cost inflation. Overall
revenue and adjusted operating profit growth were driven by the
positive contributions from acquisitions made in 2023 and in the
first half of 2024.
In France, revenues in our
cleaning & hygiene businesses declined as some volume growth
was more than offset by price deflation. We have continued to
invest in developing our operations with the introduction of a new
Warehouse Management System in one of the branches and will roll
this out to other branches in the second half of the year, to
further increase productivity. Our safety business grew revenue
through achieving strong growth with their larger customers and one
of the warehouses was consolidated to drive operating efficiency.
Revenue declined in our foodservice specific businesses with
domestic customers, although this was partly offset by growth with
export customers.
Sales in Spain grew, driven by
strong volumes in our cleaning & hygiene and packaging
businesses. Growth was driven by new customers and new product
ranges in the packaging business. The 2023 acquisitions of Dimasa
and La Cartuja have been successfully merged into the cleaning
& hygiene business. Our safety redistribution business acquired
in 2023 is performing well, but revenue in our online healthcare
businesses decreased with deflation more than offsetting volume
growth.
In the Netherlands, revenue in our
foodservice business declined moderately, but the business has
managed its margins well. We saw some growth in one of our
packaging businesses despite deflation taking effect. Our grocery
and retail businesses have been particularly impacted by deflation.
We have made good progress with a number of digital tools to
support the businesses both from a customer facing and internal
efficiencies perspective.
In Belgium, our cleaning &
hygiene businesses have achieved some revenue growth, through
volume growth in healthcare and public sector channels. In Germany,
our foodservice business has grown sales with good volume growth
from new customers. We have also merged the back office and
administrative support of our smaller cleaning & hygiene
business into the foodservice business to drive operational
benefits. Our online cleaning & hygiene business has grown
strongly whilst also improving productivity and increasing product
margins.
In Denmark, revenue in our safety
business has grown due to increased activities from customers in
the shipping and pharmaceutical sectors whilst the other business
sectors experienced product cost deflation and therefore reduced
sales.
In Turkey, volumes have declined
as we continue to focus on business that can be profitable in a
hyperinflationary environment, while our small businesses in Israel
have seen a slight reduction in sales.
We have continued to increase our
digital capabilities and once again increased the percentage of
digital orders from customers with new platforms to support an
improved customer experience, whilst also enhancing the efficiency
of our business with demand and product management
tools.
UK &
Ireland
12% of revenue and 11% of adjusted operating
profit*†
|
|
H1 24
£m
|
H1 23
£m
|
Growth
at constant
exchange*
|
Underlying
growth*
|
|
Revenue
|
689.1
|
663.8
|
4.1%
|
(5.6)%
|
|
Adjusted
operating profit*
|
52.6
|
44.7
|
18.2%
|
|
|
Operating
margin*
|
7.6%
|
6.7%
|
|
|
* Alternative performance measure (see Note
2)
†Based on
adjusted operating profit and before corporate costs (see Note
3)
In UK & Ireland, revenue
increased by 4.1% to £689.1 million due to the impact of acquisitions, most notably the
additional sales from Nisbets which was acquired in late May, which
more than offset a decline of 5.6% in our underlying businesses.
The reduction in underlying sales reflects price deflation, mainly
in the second quarter, and softer volumes particularly in the
grocery and foodservice sectors. Despite the challenging sales
environment, the businesses generated a significant increase in
operating margin which improved from 6.7% to 7.6%, with adjusted
operating profit increasing by 18.2% to £52.6 million. This was driven by the acquisition of Nisbets, and continued focus on
good margin management.
Our cleaning & hygiene and
care businesses saw deflation across some key product categories
but were able to partly mitigate the impact on revenue through
additional customer wins and the delivery of new categories into
existing accounts. Our strong value proposition to customers based
on carbon forecasting tools, new environmentally friendly products
and labour-saving cleaning technologies continues to be attractive
to both existing and prospective customers, and contributed to
significant growth in operating margins in the period.
The safety businesses experienced
a slight decline in revenues in the first half. However, our
businesses have been successful in winning several new contracts,
the benefit of which will come through in the second half of the
year. Work continues in developing a strong sustainable range of
own brand products as demand in this area grows. The business has
continued to invest in new operationally efficient locations to
deliver outstanding levels of service to customers.
Our grocery and non-food retail
businesses saw a reduction in revenues due to our customers
experiencing softer demand from consumers in addition to product
price deflation. However, contract renewals with some significant
grocery customers position us well to benefit from an upturn in
this market. Our work with sister companies abroad to provide pick
and pack services in-house enhances the levels of service we can
offer to international customers and provides growth opportunities.
We secured some new customer wins in both our national online and
regional packaging businesses and benefited from several product
sourcing initiatives.
Our foodservice businesses saw a
year-on-year decline in sales due to deflation across most product
categories. Despite the challenging environment, our businesses
delivered year-on-year operating profit growth as a result of
strong margin management and control of costs. Some key customer
contract renewals demonstrated our strong sustainability offering,
including our ability to provide sustainable and innovative product
alternatives. Our catering solutions business delivered good
operating profit growth on the back of new remote asset monitoring
services and the benefits of investing in an engineering training
academy.
Our businesses in Ireland
experienced difficult trading conditions, particularly in the
foodservice and retail segments, which combined with price
deflation in key products led to a decline in revenue in the first
half versus 2023. We continue to use our data insights to offer
innovative solutions such as predictive ordering to forge stronger
relationships with our customers. Continued investments in our
operations, including the enhancements made to our warehouse
management systems, led to significant productivity benefits in the
warehouse and transport savings.
Rest of the World
10% of revenue and 15% of adjusted operating
profit*†
|
|
H1 24
£m
|
H1 23
£m
|
Growth
at constant
exchange*
|
Underlying growth*
|
|
Revenue
|
600.7
|
549.5
|
15.1%
|
2.2%
|
|
Adjusted
operating profit*
|
73.0
|
57.1
|
35.9%
|
|
|
Operating
margin*
|
12.2%
|
10.4%
|
|
|
* Alternative performance measure (see Note
2)
†Based on
adjusted operating profit and before corporate costs (see Note
3)
In Rest of the World, revenue
increased 15.1% to £600.7 million, mainly driven
by acquisitions, with underlying revenue growth increasing
by 2.2% driven by volume growth in Latin America
across most businesses, and some inflation benefits and volume
growth in Asia Pacific. Overall, the Rest of World's
adjusted operating profit grew by 35.9% to £73.0 million with
operating margin increasing from 10.4% to 12.2%, driven by positive
contributions from acquisitions and good margin
management.
In Brazil, our safety businesses
showed good growth mainly due to new contract wins and increasing
volumes with existing customers. Our healthcare businesses grew
sales and margins as improvement measures taken on our private
label import business began to take effect. Our hygiene businesses
had a strong first half, mainly due to the positive contribution
from an acquisition which also benefitted margins. Finally, our
foodservice business also had a strong half as the business
benefitted from new customer wins and gaining wallet share with
existing customers, which yielded sales growth and had a positive
impact on margins.
In Chile, our safety businesses
saw flat sales and pressured margins due to product cost deflation.
However, our foodservice business managed good organic growth
following operational improvement measures implemented at the start
of the year.
Bunzl Australia and New Zealand,
our largest business in Asia Pacific, performed well. We have also
experienced a return to sales growth in our key market segment of
healthcare as both government and private sectors
recommenced purchasing after utilising excess
inventory in the previous year. Our continued focus on inventory
and margin management has resulted in strong margins and strong
profit growth.
Our med-tech business and
specialist healthcare operations in Australia and New Zealand have
benefited from an increase in operations in hospitals and aged care
facilities.
Our Australian safety business
delivered strong sales growth in its direct to end user division
across the resource sector and government customers. The
redistribution business has been impacted by customers being more
conservative with their inventory levels and increased competition
for a share of these lower stock levels.
Our emergency services business
has benefited from converting several large government
opportunities in the early months of this year. The business has
been highly successful in delivering sales as well as increasing
current and future service opportunities.
FINANCIAL REVIEW
As in previous years this review
refers to a number of alternative performance measures which
management uses to assess the performance of the Group. Details of
the Group's alternative performance measures are set out in Note 2
to the interim financial statements.
Currency translation
Currency translation had a
negative impact on the Group's reported results, decreasing
revenue, profits and earnings by between c3% and c4%. The negative
exchange rate impact was principally due to the effect on average
exchange rates of the strengthening of sterling against the US
dollar, Euro, Canadian dollar, Brazilian real and Australian
dollar.
|
Average exchange
rates
|
Six months
to 30.6.24
|
Six months
to 30.6.23
|
|
US$
|
1.27
|
1.23
|
|
Euro
|
1.17
|
1.14
|
|
Canadian$
|
1.72
|
1.66
|
|
Brazilian
real
|
6.43
|
6.25
|
|
Australian$
|
1.92
|
1.83
|
|
Closing exchange
rates
|
30.6.24
|
30.6.23
|
|
US$
|
1.26
|
1.27
|
|
Euro
|
1.18
|
1.17
|
|
Canadian$
|
1.73
|
1.68
|
|
Brazilian
real
|
7.02
|
6.13
|
|
Australian$
|
1.89
|
1.91
|
Revenue
Revenue declined to £5,711.5
million (2023 H1: £5,906.8 million), a decrease of 0.4% at constant
exchange rates (down 3.3% at actual exchange rates), due to an
underlying decline of 4.9% partly offset by acquisitions net of
disposals adding 3.7%. The additional trading day in the first half
of 2024 compared to 2023 and excess growth in hyperinflationary
economies added 0.8%. The decline in underlying revenue in the
first half of the year was mainly driven by deflation across North
America, Continental Europe and the UK & Ireland; volume
softness in our US foodservice redistribution business as we made
strategic changes to increase our own brand penetration; and the
expected impact from transitioning ownership of customer specific
inventory in our US retail business.
|
Movement in
revenue
|
£m
|
|
2023 H1
revenue
|
5,906.8
|
|
Currency
translation
|
(170.4)
|
|
Impact of
additional trading day
|
45.1
|
|
Excess
growth in hyperinflationary economies
|
6.9
|
|
Underlying decline
|
(284.5)
|
|
Acquisitions net of disposals
|
207.6
|
|
2024 H1
revenue
|
5,711.5
|
Operating profit
Adjusted operating profit grew to
£455.5 million (2023 H1: £438.3 million), an increase of 7.4% at
constant exchange rates and 3.9% at actual exchange rates. At both
constant and actual exchange rates the operating margin increased
to 8.0% from 7.4%.
During the six months to 30 June
2024, the Group has seen a net utilisation of approximately £10
million in slow moving inventory and trade receivables provisions,
with usage of these provisions exceeding net charges to increase
the provisions.
|
Movement in adjusted
operating profit
|
£m
|
|
2023 H1
adjusted operating profit
|
438.3
|
|
Currency
translation
|
(14.0)
|
|
Increase
in hyperinflation accounting adjustments
|
(2.3)
|
|
Growth in
the period
|
33.5
|
|
2024 H1 adjusted operating
profit
|
455.5
|
Operating profit was £349.6
million (2023 H1: £359.8 million), an increase of 0.4% at constant
exchange rates (down 2.8% at actual exchange rates).
|
Movement in operating
profit
|
£m
|
|
2023 H1
operating profit
|
359.8
|
|
Currency
translation
|
(11.6)
|
|
Increase
in hyperinflation accounting adjustments
|
(2.3)
|
|
Growth in
adjusted operating profit
|
33.5
|
|
Non-recurring pension scheme gain
|
3.2
|
|
Increase
in customer relationships, brands and
technology amortisation and acquisition related items
through operating profit
|
(33.0)
|
|
2024 H1 operating
profit
|
349.6
|
Customer relationships, brands and
technology amortisation, acquisition related items through
operating profit and the non-recurring pension scheme gain are
excluded from the calculation of adjusted operating profit as they
do not relate to the trading performance of the business.
Accordingly, these items are not taken into account by management
when assessing the results of the business and are removed in
calculating adjusted operating profit and other alternative
performance measures by which management assesses the performance
of the Group.
Net finance expense
The net finance expense of £47.1
million increased by £5.8 million at constant exchange rates (up
£4.4 million at actual exchange rates), mainly due to increases in
lease interest expense and interest rates on floating debt,
partially offset by lower average debt during the
period.
Disposal of business
The loss on disposal of business
of £23.1 million relates to the disposal of the Group's business in
Argentina, which completed on 14 March 2024. The loss on disposal
reflects the cash consideration received of £1.0 million offset by
the net book value of assets disposed of £4.8 million and recycling
of historical foreign exchange losses of £19.3 million held in the
translation reserve within equity, which have been impacted by the
devaluation of the Argentinian Peso due to hyperinflation. There
was no material impact from the disposal of our Argentina business
on the Group's trading performance.
Profit before income tax
Adjusted profit before income tax
was £408.7 million (2023 H1: £395.6 million), up 6.7% at constant
exchange rates (up 3.3% at actual exchange rates) due to the
increase in adjusted operating profit partly offset by the increase
in adjusted net finance expense. Profit before income tax declined
to £279.4 million (2023 H1: £317.1 million), a decrease of 9.0% at
constant exchange rates (down 11.9% at actual exchange rates)
mainly due to the loss on disposal of business and increase in net
finance expense.
Taxation
The Group's tax strategy is to
comply with tax laws in all countries in which it operates and to
balance its responsibilities for controlling the tax costs with its
responsibilities to pay the appropriate level of tax where it does
business. No companies are established in tax havens or other
countries for tax purposes where the Group does not have an
operational presence and the Group's de-centralised operational
structure means that the level of intragroup trading transactions
is very low. The group does not use intragroup transfer prices to
shift profit into low tax jurisdictions. The Group's tax strategy
has been approved by the Board and tax risks are reviewed by the
Audit Committee. In accordance with UK legislation, the strategy is
published on the Bunzl plc website within the Investors
section.
The effective tax rate (being the
tax rate on adjusted profit before income tax) for the period was
25.5% (2023 H1: 25.2%) and the reported tax rate on statutory
profit was 28.9% (2023 H1: 25.2%). The increase in effective tax
rate for the Group reflects the increase in UK statutory tax rate
from 23.5% for calendar year 2023 to 25.0% for year 2024. The
effective tax rate for the full year is likely to be similar to the
half year.
The Group is subject to the global
minimum tax regime known as Pillar 2 and any additional taxes from
this are included within the income tax expense. No
significant tax liabilities, however, are expected from Pillar 2
taxes.
Earnings per share
Adjusted profit after tax was
£304.5 million (2023 H1: £295.9 million), up 6.3% and an increase
of £18.0 million at constant exchange rates (up 2.9% at actual
exchange rates), due to a £25.7 million increase in adjusted profit
before income tax and a £7.7 million increase in the tax on
adjusted profit before income tax at constant exchange rates.
Adjusted profit after tax for the year bears a £5.9 million adverse
impact from hyperinflation accounting adjustments (2023 H1: £5.0
million adverse impact), comprising a £6.0 million adverse impact
to adjusted profit before tax (2023 H1: £4.7 million adverse
impact) and a £0.1 million decrease in the tax charge (2023 H1:
£0.3 million increase).
Profit after tax decreased to
£198.7 million (2023 H1: £237.2 million), down 13.5% and a decrease
of £30.9 million at constant exchange rates (down 16.2% at actual
exchange rates), due to a £27.5 million decrease in profit before
income tax and a £3.4 million increase in the tax charge at
constant exchange rates. Profit after tax for the year bears a
£23.1 million loss on disposal of business (2023 H1: nil) and a
£6.0 million adverse impact from hyperinflation accounting
adjustments (2023 H1: £5.1 million adverse impact).
The weighted average number of
shares in issue increased from 335.1 million in the period ended 30
June 2023 to 335.4 million due to employee share option exercises
partly offset by share purchases into the employee benefit
trust.
Adjusted earnings per share were
90.8p (2023 H1: 88.3p), an increase of 6.2% at constant exchange
rates (up 2.8% at actual exchange rates). Basic earnings per share
were 59.2p (2023 H1: 70.8p), down 13.6% at constant exchange rates
(down 16.4% at actual exchange rates).
|
Movement in
adjusted earnings per share
|
|
Pence
|
|
2023 H1 adjusted earnings per
share
|
|
88.3
|
|
Currency translation
|
|
(2.8)
|
|
Increase in adjusted profit before income tax
excluding hyperinflation accounting adjustments
|
6.3
|
|
Increase in hyperinflation
accounting adjustments
|
|
(0.7)
|
|
Increase in effective tax
rate
|
|
(0.2)
|
|
Increase in weighted average number
of shares
|
|
(0.1)
|
|
2024 H1 adjusted earnings per share
|
|
90.8
|
|
Movement in
basic earnings per share
|
|
Pence
|
|
2023 H1 basic earnings per
share
|
|
70.8
|
|
Currency translation
|
|
(2.3)
|
|
Increase in adjusted profit before income tax
excluding hyperinflation accounting adjustments
|
6.3
|
|
Increase in adjusting
items
|
|
(13.5)
|
|
Increase in hyperinflation
accounting adjustments
|
|
(0.7)
|
|
Increase in reported tax
rate
|
|
(1.2)
|
|
Increase in weighted average number
of shares
|
|
(0.2)
|
|
2024 H1 basic earnings per share
|
|
59.2
|
Dividends
The Company's practice in recent
years has been to pay a progressive dividend, delivering
year-on-year increases. The Board is proposing a 2024 interim
dividend of 20.1p, an increase of 10.4% on the amount paid in
relation to the 2023 interim dividend.
Before approving any dividends,
the Board considers the level of borrowings of the Group by
reference to the ratio of net debt to EBITDA, the ability of the
Group to continue to generate cash and the amount required to
invest in the business, in particular into future
acquisitions. The Group's long-term track record of strong
cash generation provides the Company with the financial flexibility
to fund a growing dividend.
Acquisitions
The Group completed six
acquisitions during the period ended 30 June 2024 with a total
committed spend of £585.6 million. Including the acquisition of RCL
Implantes in Brazil, which was agreed in the first half of 2024 but
completed on 3 July 2024, total committed spend on acquisitions
agreed during the period was £651.3 million. The estimated
annualised revenue and adjusted operating profit of the
acquisitions agreed during the period were £624 million and £61
million respectively.
A summary of the effect of
acquisitions completed in the period is as follows:
|
|
£m
|
|
Fair
value of net assets acquired
|
327.9
|
|
Provisional goodwill
|
214.9
|
|
Consideration
|
542.8
|
|
Satisfied
by:
|
|
|
cash
consideration
|
443.6
|
|
deferred
consideration
|
99.2
|
|
|
542.8
|
|
Contingent payments relating to the retention of former
owners
|
52.4
|
|
Interest
on unwinding of discounting deferred consideration
|
15.1
|
|
Net
cash acquired
|
(41.3)
|
|
Transaction costs and expenses
|
16.6
|
|
Total committed spend in
respect of acquisitions completed in the current
period
|
585.6
|
|
Spend on
acquisitions committed but not completed at the period
end
|
65.7
|
|
Total committed spend in
respect of acquisitions agreed in the
current period
|
651.3
|
The net cash outflow in the period
in respect of acquisitions comprised:
|
|
£m
|
|
Cash
consideration
|
443.6
|
|
Net cash
acquired
|
(41.3)
|
|
Deferred
consideration payments
|
11.7
|
|
Net cash
outflow in respect of acquisitions
|
414.0
|
|
Acquisition related items*
|
25.2
|
|
Total cash outflow in
respect of acquisitions
|
439.2
|
*Acquisition related items comprised £11.7
million of transaction costs and expenses paid and £13.5 million of
payments relating to the retention of former owners.
Cash flow
A summary of the cash flow for the
period is shown below:
|
|
Six months to
30.6.24
£m
|
Six months to
30.6.23
£m
|
|
Cash
generated from operations†
|
564.2
|
514.6
|
|
Payment
of lease liabilities
|
(103.2)
|
(91.9)
|
|
Net
capital expenditure
|
(18.2)
|
(25.4)
|
|
Operating cash
flow†
|
442.8
|
397.3
|
|
Net
interest paid excluding interest on lease liabilities
|
(33.9)
|
(29.7)
|
|
Income
tax paid
|
(98.5)
|
(81.3)
|
|
Free cash
flow
|
310.4
|
286.3
|
|
Dividends
paid
|
(61.0)
|
(57.9)
|
|
Net
payments relating to employee share schemes
|
(53.6)
|
(48.8)
|
|
Net cash
inflow before acquisitions
|
195.8
|
179.6
|
|
Acquisitions◊ net of
disposals
|
(438.6)
|
(95.7)
|
|
Net cash inflow on net debt
excluding lease liabilities
|
(242.8)
|
83.9
|
† Before acquisition related items.
◊ Including acquisition related items.
The Group's free cash flow of
£310.4 million was £24.1 million higher than in the comparable
period, driven primarily by an increase in
operating cash flow. The Group's free cash flow was used to finance
dividend payments of £61.0 million in respect of 2023 dividends
(2023 H1: £57.9 million in respect of 2022 dividends) and net
payments of £53.6 million (2023 H1: £48.8 million) relating to
employee share schemes and partially finance an acquisition cash
outflow net of disposal proceeds of £438.6 million (2023 H1: £95.7
million). Cash conversion (being the
ratio of operating cash flow to lease adjusted operating profit)
for the six months to 30 June 2024 was 100% (2023 H1: 93%, 2023 YE:
96%).
|
|
Six months to
30.6.24
£m
|
Six months to
30.6.23
£m
|
|
Operating cash
flow
|
442.8
|
397.3
|
|
Adjusted operating
profit
|
455.5
|
438.3
|
|
Add back
depreciation of right-of-use assets
|
89.1
|
80.7
|
|
Deduct
payment of lease liabilities
|
(103.2)
|
(91.9)
|
|
Lease adjusted operating
profit
|
441.4
|
427.1
|
|
|
|
|
|
Cash
conversion*
|
100%
|
93%
|
*
Operating cash flow as a percentage
of lease adjusted operating profit.
Net debt
|
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Net debt
excluding lease liabilities
|
(1,332.2)
|
(1,020.4)
|
(1,085.5)
|
|
Total
deferred and contingent consideration - on and off balance
sheet
|
(395.2)
|
(224.1)
|
(258.8)
|
|
Adjusted
net debt
|
(1,727.4)
|
(1,244.5)
|
(1,344.3)
|
|
Lease
liabilities
|
(768.2)
|
(617.7)
|
(664.5)
|
|
Adjusted
net debt including lease liabilities
|
(2,495.6)
|
(1,862.2)
|
(2,008.8)
|
|
|
|
|
|
|
Adjusted
net debt to EBITDA
|
1.5x
|
1.3x
|
1.2x
|
|
Adjusted
net debt including lease liabilities to EBITDA
|
1.9x
|
1.6x
|
1.6x
|
Net debt excluding lease
liabilities increased by £246.7 million during the period to
£1,332.2 million (31 December 2023: £1,085.5 million), due to a net
cash outflow of £242.8 million and external debt recognised on
acquisition of £5.6 million partly offset by a £1.6 million
decrease due to non-cash movements in debt and a £0.1 million
decrease due to currency translation.
Balance sheet
|
Summary balance
sheet
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Intangible assets
|
3,579.9
|
3,011.6
|
3,242.1
|
|
Right-of-use assets
|
716.2
|
574.9
|
616.3
|
|
Property,
plant and equipment
|
209.4
|
141.1
|
159.4
|
|
Working
capital
|
1,187.8
|
1,088.8
|
1,158.1
|
|
Assets
held for sale
|
4.3
|
-
|
-
|
|
Deferred
consideration
|
(264.0)
|
(140.2)
|
(175.6)
|
|
Other net
liabilities
|
(546.4)
|
(455.0)
|
(333.4)
|
|
Net
pensions asset
|
45.4
|
47.0
|
49.4
|
|
Net debt
excluding lease liabilities
|
(1,332.2)
|
(1,020.4)
|
(1,085.5)
|
|
Lease
liabilities
|
(768.2)
|
(617.7)
|
(664.5)
|
|
Equity
|
2,832.2
|
2,630.1
|
2,966.3
|
|
Return on
average operating capital
|
45.3%
|
43.2%
|
46.1%
|
|
Return on
invested capital
|
15.3%
|
14.9%
|
15.5%
|
Return on average operating
capital decreased to 45.3% from 46.1% at 31 December 2023 due to
higher average capital employed in the underlying businesses.
Return on invested capital decreased slightly to 15.3% from 15.5% at 31 December 2023 due
to the impact of higher average invested capital from
acquisitions.
Intangible assets increased by
£337.8 million from 31 December 2023 to £3,579.9 million mainly due
to intangible assets acquired through acquisitions in the period of
£477.2 million partly offset by currency translation of £65.7
million and an amortisation charge of £75.2 million.
Right-of-use assets increased by
£99.9 million from 31 December 2023 to £716.2 million due to new
leases during the period of £96.5 million, an increase from
acquisitions of £62.9 million, an increase from remeasurement
adjustments of £36.3 million partly offset by a depreciation charge
of £89.1 million, a decrease from currency translation of £6.3
million and assets transferred to held for sale of £0.4
million.
Working capital increased by £29.7
million from 31 December 2023 to £1,187.8 million mainly due to an
underlying increase of £16.8 million as shown in
the cash flow statement and £42.3 million from acquisitions
partly offset by a decrease from currency translation of £32.5
million.
Deferred consideration increased
by £88.4 million from 31 December 2023 to £264.0 million due to
£99.2m of deferred consideration recognised on acquisitions and a
net charge of £17.9 million relating to adjustments to previously
estimated earn outs and the retention of former owners partly
offset by deferred consideration and retention payments of £21.2
million, and a decrease from currency translation of £7.5 million.
Including expected future payments which are contingent on the
continued retention of former owners of businesses acquired of
£131.2m, total deferred and contingent consideration as at 30 June
2024 was £395.2m.
The Group's net pension asset of
£45.4 million at 30 June 2024 was £4.0 million lower than at 31
December 2023, largely due to actuarial losses of £8.3
million.
Shareholders' equity decreased by
£134.1 million from £2,966.3 million at 31 December 2023 to
£2,832.2 million.
|
Movement in shareholders'
equity
|
£m
|
|
Shareholders' equity at 31 December 2023
|
2,966.3
|
|
Profit
for the period
|
198.7
|
|
Dividends
|
(228.6)
|
|
Currency
(net of tax)
|
(63.5)
|
|
Hyperinflation accounting adjustment
|
10.7
|
|
Actuarial
loss on pension schemes (net of tax)
|
(6.9)
|
|
Share
based payments (net of tax)
|
6.8
|
|
Employee
share schemes (net of tax)
|
(51.3)
|
|
Shareholders' equity at 30
June 2024
|
2,832.2
|
Capital management
The Group's policy is to maintain
a strong capital base to maintain investor, creditor and market
confidence and to sustain future development of the business. The
Group funds its operations through a mixture of shareholders'
equity and bank and capital market borrowings. The Group's funding
strategy is to maintain an investment grade credit rating. The
Company's current credit ratings with Standard & Poor's are
BBB+ (long-term) and A-2 (short-term). All borrowings are managed
by a central treasury function and funds raised are lent onward to
operating subsidiaries as required. The overall objective is to
manage the funding to ensure the borrowings have a range of
maturities, are competitively priced and meet the
demands of the business over time. There were no
changes to the Group's approach to capital management during the
period and the Group is not subject to any externally imposed
capital requirements.
Treasury policies and controls
The Group has a centralised
treasury department to control external borrowings and manage
liquidity, interest rate, foreign currency and credit risks.
Treasury policies have been approved by the Board and cover the
nature of the exposure to be hedged, the types of financial
instruments that may be employed and the criteria for investing and
borrowing cash. The Group uses derivatives to manage its foreign
currency and interest rate risks arising from underlying business
activities. No transactions of a speculative nature are undertaken.
The treasury department is subject to periodic independent review
by the internal audit department. Underlying policy assumptions and
activities are periodically reviewed by the executive directors and
the Board. Controls over exposure changes and transaction
authenticity are in place.
The Group continually monitors net
debt and forecast cash flows to ensure that sufficient facilities
are in place to meet the Group's requirements in the short, medium
and long term and, in order to do so, arranges borrowings from a
variety of sources. Additionally, compliance with the Group's
biannual debt covenants is monitored on a monthly basis and
formally tested at 30 June and 31 December. The principal covenant
limits are net debt, calculated at average exchange rates, to
EBITDA of no more than 3.5 times and interest cover of no less than
3.0 times. Covenant net debt to EBITDA was
1.3 times (31 December 2023: 1.1 times).
Sensitivity analyses using various
scenarios are applied to forecasts to assess their impact on
covenants and net debt. During the six months ended 30 June 2024
all covenants were complied with and based on current forecasts it
is expected that such covenants will continue to be complied with
for the foreseeable future. Debt covenants are based on historical
accounting standards. The US private placement notes (USPPs) issued
in March 2022 contain a clause whereby upon maturity of the
previously issued USPPs, the latest maturity being in 2028, the
principal financial covenants referred to above will no longer
apply.
The Group has substantial funding
available comprising multi-currency credit facilities from the
Group's banks, USPPs and senior bonds. At 30 June 2024 the nominal
value of USPPs outstanding was £793.0 million (31 December 2023:
£917.5 million) with maturities ranging from 2025 to 2032. The £700
million senior bonds mature in 2025 and 2030. The Group's committed
bank facilities mature between 2024 and 2029. At 30 June 2024 the
available committed bank facilities totalled £989.2 million (31
December 2023: £852.6 million), of which £145.0 million was drawn
down (31 December 2023: none drawn down), providing headroom of
£844.2 million (31 December 2023: £852.6 million). During the
period, £214.8 million of existing bank facilities with maturities
between 2024 and 2026 were refinanced by £353.9 million of new or
amended bank facilities with maturities between 2026 and 2029. The
Group expects to make repayments in the 18 month period from the
date of these interim financial statements to the end of 31
December 2025 of approximately £172 million relating to maturing
USPPs. In addition, the current intention is that the £300 million
senior bond maturing in 2025 will be refinanced in the capital
markets before maturity. In July 2024, the Group established a €1
billion euro-commercial paper programme, under which it can issue
short-term notes.
Going concern
The directors, having reassessed
the principal risks and uncertainties, consider it appropriate to
adopt the going concern basis of accounting in the preparation of
the interim financial statements. In reaching this conclusion, the
directors noted the Group's cash performance in the period, the
substantial funding available to the Group as described above and
the resilience of the Group to a severe but plausible downside
scenario. Further details are set out in Note 1 to the interim
financial statements.
Risks and
uncertainties
The principal risks and
uncertainties affecting the business activities of the Group for
the remaining six months of the financial year are unchanged from
those detailed in the section entitled 'Principal risks and
uncertainties' on pages 70 to 76 of the Annual Report for the year
ended 31 December 2023, with the exception of currency translation
which is no longer considered to be a principal risk. The principal
risks and uncertainties are the risks of competitive pressures in
the countries and markets in which the Group operates, financial
collapse of either a large customer and/or a significant number of
small customers, product cost deflation, cost inflation, the
ability of the Group to complete and successfully integrate
acquisitions, the risk of sustainability driven market changes, the
risk of cyber-attacks on the Group's operations, the financial
risks associated with the availability of funding and risk of
business disruption caused by climate change. A copy of the 2023
Annual Report is available on the Company's website at
www.bunzl.com.
Condensed consolidated income statement
for the period ended 30 June
2024
|
|
|
|
|
|
|
|
|
Six months
|
Six
months
|
Year
to
|
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
Notes
|
£m
|
£m
|
£m
|
|
Revenue
|
3
|
5,711.5
|
5,906.8
|
11,797.1
|
|
|
|
|
|
|
|
Operating profit
|
3
|
349.6
|
359.8
|
789.1
|
|
Finance income
|
4
|
31.6
|
23.8
|
60.4
|
|
Finance expense
|
4
|
(78.7)
|
(66.5)
|
(150.9)
|
|
Disposal of business
|
9
|
(23.1)
|
-
|
-
|
|
Profit before income tax
|
|
279.4
|
317.1
|
698.6
|
|
Income tax
|
5
|
(80.7)
|
(79.9)
|
(172.4)
|
|
Profit for the period attributable to the Company's equity
holders
|
198.7
|
237.2
|
526.2
|
|
|
|
|
|
|
|
Earnings per share attributable to the Company's equity
holders
|
|
|
|
|
|
Basic
|
7
|
59.2p
|
70.8p
|
157.1p
|
|
Diluted
|
7
|
58.8p
|
70.2p
|
156.0p
|
|
|
|
|
|
|
|
Dividend per share
|
6
|
20.1p
|
18.2p
|
68.3p
|
|
|
|
|
|
|
|
Alternative performance measures*
|
|
|
|
|
|
Operating profit
|
3
|
349.6
|
359.8
|
789.1
|
|
Adjusted for:
|
|
|
|
|
|
Customer relationships, brands and
technology amortisation
|
3
|
69.9
|
65.6
|
135.6
|
|
Acquisition related items through
operating profit
|
3
|
39.2
|
12.9
|
19.5
|
|
Non-recurring pension scheme
credit
|
3
|
(3.2)
|
-
|
-
|
|
Adjusted operating profit
|
3
|
455.5
|
438.3
|
944.2
|
|
Finance income
|
4
|
31.6
|
23.8
|
60.4
|
|
Adjusted finance expense
|
4
|
(78.4)
|
(66.5)
|
(150.9)
|
|
Adjusted profit before income tax
|
|
408.7
|
395.6
|
853.7
|
|
Tax on adjusted profit
|
5
|
(104.2)
|
(99.7)
|
(213.4)
|
|
Adjusted profit for the period
|
|
304.5
|
295.9
|
640.3
|
|
Adjusted earnings per share
|
7
|
90.8p
|
88.3p
|
191.1p
|
* See Note 2 for further
details of the alternative performance measures.
Condensed consolidated statement of comprehensive
income
for the period ended 30 June
2024
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Profit for the period
|
198.7
|
237.2
|
526.2
|
|
|
|
|
|
|
Other comprehensive income/(expense)
|
|
|
|
|
Items that will not be reclassified
to profit or loss:
|
|
|
|
|
Actuarial (loss)/gain on defined
benefit pension schemes
|
(8.3)
|
0.6
|
2.9
|
|
Tax on items that will not be
reclassified to profit or loss
|
1.4
|
(0.2)
|
(0.1)
|
|
Total items that will not be reclassified to profit or
loss
|
(6.9)
|
0.4
|
2.8
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
Foreign currency translation
differences on foreign operations
|
(95.0)
|
(129.8)
|
(126.9)
|
|
Reclassification from translation
reserve to income statement on disposal of foreign operation (Note
9)
|
19.3
|
-
|
-
|
|
Gain/(loss) recognised in cash
flow hedge reserve*
|
2.6
|
(0.5)
|
(2.3)
|
|
Gain taken to equity as a result
of effective net investment hedges
|
10.3
|
37.0
|
31.4
|
|
Tax on items that may be
reclassified to profit or loss
|
(0.8)
|
(0.2)
|
0.1
|
|
Total items that may be reclassified subsequently to profit
or loss
|
(63.6)
|
(93.5)
|
(97.7)
|
|
Other comprehensive expense for the period
|
(70.5)
|
(93.1)
|
(94.9)
|
|
Total comprehensive income attributable to the Company's
equity holders
|
128.2
|
144.1
|
431.3
|
* The Group has restated
comparatives for the six months to 30 June 2023 and year to 31
December 2023 in the Condensed consolidated statement of
comprehensive income to recognise fair value movements on cash flow
hedges, and the related deferred tax balances that were previously
classified as 'Items that will not subsequently be reclassified to
profit or loss', within 'Items that may subsequently be
reclassified to profit or loss'. This is to reflect the fact that,
whilst considered unlikely, there are some potential future
scenarios that may lead to these items being reclassified to profit
or loss. This restatement is a presentational change. There is no
impact from this change on the Group's Other comprehensive expense
for the period or Total comprehensive income for the period. There
is no impact from this change on the net assets or shareholders'
equity, nor any impact on the Condensed consolidated income
statement, Condensed consolidated statement of changes in equity or
the Condensed consolidated cash flow statement.
Condensed consolidated balance sheet
|
at 30 June 2024
|
|
30.6.24
|
30.6.23
|
31.12.23
|
|
|
Notes
|
£m
|
£m
|
£m
|
|
Assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
209.4
|
141.1
|
159.4
|
|
Right-of-use assets
|
10
|
716.2
|
574.9
|
616.3
|
|
Intangible assets
|
11
|
3,579.9
|
3,011.6
|
3,242.1
|
|
Defined benefit pension
assets
|
|
64.0
|
65.0
|
69.0
|
|
Derivative financial
assets
|
13
|
0.1
|
-
|
0.1
|
|
Deferred tax assets
|
|
15.0
|
5.5
|
14.2
|
|
Total non-current assets
|
|
4,584.6
|
3,798.1
|
4,101.1
|
|
|
|
|
|
|
|
Inventories
|
|
1,633.3
|
1,519.9
|
1,621.1
|
|
Trade and other
receivables
|
|
1,662.4
|
1,605.3
|
1,578.5
|
|
Income tax receivable
|
|
15.4
|
6.7
|
8.7
|
|
Derivative financial
assets
|
13
|
13.9
|
31.9
|
11.7
|
|
Cash and cash equivalents
|
15
|
1,381.4
|
1,481.1
|
1,426.1
|
|
Assets classified as held for
sale
|
|
4.3
|
-
|
-
|
|
Total current assets
|
|
4,710.7
|
4,644.9
|
4,646.1
|
|
Total assets
|
|
9,295.3
|
8,443.0
|
8,747.2
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share capital
|
|
108.7
|
108.6
|
108.6
|
|
Share premium
|
|
209.6
|
203.8
|
205.2
|
|
Translation reserve
|
|
(235.7)
|
(167.3)
|
(170.2)
|
|
Other reserves
|
|
18.7
|
18.5
|
16.7
|
|
Retained earnings
|
|
2,730.9
|
2,466.5
|
2,806.0
|
|
Total equity attributable to the Company's equity
holders
|
|
2,832.2
|
2,630.1
|
2,966.3
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Interest bearing loans and
borrowings
|
15
|
1,090.7
|
1,386.6
|
1,417.1
|
|
Defined benefit pension
liabilities
|
|
18.6
|
18.0
|
19.6
|
|
Other payables
|
|
255.0
|
125.9
|
176.1
|
|
Income tax payable
|
|
0.5
|
1.1
|
0.5
|
|
Provisions
|
|
96.5
|
57.4
|
75.8
|
|
Lease liabilities
|
14
|
589.1
|
470.0
|
512.4
|
|
Derivative financial
liabilities
|
13
|
87.0
|
112.6
|
78.7
|
|
Deferred tax liabilities
|
|
241.8
|
189.5
|
190.1
|
|
Total non-current liabilities
|
|
2,379.2
|
2,361.1
|
2,470.3
|
|
|
|
|
|
|
|
Bank overdrafts
|
15
|
1,062.3
|
887.5
|
874.2
|
|
Interest bearing loans and
borrowings
|
15
|
475.4
|
131.8
|
130.0
|
|
Trade and other payables
|
|
2,303.6
|
2,217.0
|
2,071.6
|
|
Income tax payable
|
|
44.3
|
40.4
|
47.0
|
|
Provisions
|
|
7.4
|
15.2
|
10.0
|
|
Lease liabilities
|
14
|
179.1
|
147.7
|
152.1
|
|
Derivative financial
liabilities
|
13
|
11.8
|
12.2
|
25.7
|
|
Total current liabilities
|
|
4,083.9
|
3,451.8
|
3,310.6
|
|
Total liabilities
|
|
6,463.1
|
5,812.9
|
5,780.9
|
|
Total equity and liabilities
|
|
9,295.3
|
8,443.0
|
8,747.2
|
Condensed consolidated statement of changes in
equity
for the period ended 30 June
2024
|
|
Share
capital
£m
|
Share
premium
£m
|
Translation
reserve
£m
|
Other
reserves◊
£m
|
Retained
earnings†
£m
|
Total
equity
£m
|
|
At
1 January 2024
|
108.6
|
205.2
|
(170.2)
|
16.7
|
2,806.0
|
2,966.3
|
|
Profit for the period
|
|
|
|
|
198.7
|
198.7
|
|
Actuarial loss on defined benefit
pension schemes
|
|
|
|
|
(8.3)
|
(8.3)
|
|
Foreign currency translation
differences on foreign operations
|
|
|
(95.0)
|
|
|
(95.0)
|
|
Reclassification from translation
reserve to income statement on disposal of foreign
operation
|
|
|
19.3
|
|
|
19.3
|
|
Gain taken to equity as a result
of effective net investment hedges
|
|
|
10.3
|
|
|
10.3
|
|
Gain recognised in cash flow hedge
reserve
|
|
|
|
2.6
|
|
2.6
|
|
Income tax (charge)/credit on
other comprehensive income
|
|
|
(0.1)
|
(0.7)
|
1.4
|
0.6
|
|
Total comprehensive income
|
|
|
(65.5)
|
1.9
|
191.8
|
128.2
|
|
2023 interim dividend
|
|
|
|
|
(61.0)
|
(61.0)
|
|
2023 final dividend
|
|
|
|
|
(167.6)
|
(167.6)
|
|
Movement from cash flow hedge
reserve to inventory
|
|
|
|
0.1
|
|
0.1
|
|
Hyperinflation accounting
adjustment1
|
|
|
|
|
10.7
|
10.7
|
|
Issue of share capital
|
0.1
|
4.4
|
|
|
|
4.5
|
|
Employee trust shares
|
|
|
|
|
(55.8)
|
(55.8)
|
|
Share based payments
|
|
|
|
|
6.8
|
6.8
|
|
At 30 June 2024
|
108.7
|
209.6
|
(235.7)
|
18.7
|
2,730.9
|
2,832.2
|
|
|
Share
capital
£m
|
Share
premium
£m
|
Translation
reserve
£m
|
Other
reserves◊
£m
|
Retained
earnings†
£m
|
Total
equity
£m
|
|
At 31 January 2023
|
108.5
|
199.4
|
(74.2)
|
17.7
|
2,469.5
|
2,720.9
|
|
Profit for the period
|
|
|
|
|
237.2
|
237.2
|
|
Actuarial gain on defined benefit
pension schemes
|
|
|
|
|
0.6
|
0.6
|
|
Foreign currency translation
differences on foreign operations
|
|
|
(129.8)
|
|
|
(129.8)
|
|
Gain taken to equity as a result
of effective net investment hedges
|
|
|
37.0
|
|
|
37.0
|
|
Loss recognised in cash flow hedge
reserve
|
|
|
|
(0.5)
|
|
(0.5)
|
|
Income tax (charge)/credit on
other comprehensive income
|
|
|
(0.3)
|
0.1
|
(0.2)
|
(0.4)
|
|
Total comprehensive
income
|
|
|
(93.1)
|
(0.4)
|
237.6
|
144.1
|
|
2022 interim dividend
|
|
|
|
|
(57.9)
|
(57.9)
|
|
2022 final dividend
|
|
|
|
|
(151.8)
|
(151.8)
|
|
Movement from cash flow hedge
reserve to inventory
|
|
|
|
1.2
|
|
1.2
|
|
Hyperinflation accounting
adjustment1
|
|
|
|
|
8.6
|
8.6
|
|
Issue of share capital
|
0.1
|
4.4
|
|
|
|
4.5
|
|
Employee trust shares
|
|
|
|
|
(51.1)
|
(51.1)
|
|
Share based payments
|
|
|
|
|
11.6
|
11.6
|
|
At 30 June 2023
|
108.6
|
203.8
|
(167.3)
|
18.5
|
2,466.5
|
2,630.1
|
|
|
Share
capital
£m
|
Share
premium
£m
|
Translation
reserve
£m
|
Other
reserves◊
£m
|
Retained
earnings†
£m
|
Total
equity
£m
|
|
At 1 January 2023
|
108.5
|
199.4
|
(74.2)
|
17.7
|
2,469.5
|
2,720.9
|
|
Profit for the year
|
|
|
|
|
526.2
|
526.2
|
|
Actuarial gain on defined
benefit
pension
schemes
|
|
|
|
|
2.9
|
2.9
|
|
Foreign currency translation
differences
on foreign
operations
|
|
|
(126.9)
|
|
|
(126.9)
|
|
Gain taken to equity as a result of
effective
net investment
hedges
|
|
|
31.4
|
|
|
31.4
|
|
Loss recognised in cash flow hedge
reserve
|
|
|
|
(2.3)
|
|
(2.3)
|
|
Income tax (charge)/credit on
other
comprehensive
income
|
|
|
(0.5)
|
0.6
|
(0.1)
|
-
|
|
Total comprehensive
income
|
|
|
(96.0)
|
(1.7)
|
529.0
|
431.3
|
|
2022 interim dividend
|
|
|
|
|
(57.9)
|
(57.9)
|
|
2022 final dividend
|
|
|
|
|
(151.8)
|
(151.8)
|
|
Movement from cash flow hedge
reserve
to inventory
|
|
|
|
0.7
|
|
0.7
|
|
Hyperinflation accounting
adjustments1
|
|
|
|
|
21.6
|
21.6
|
|
Issue of share capital
|
0.1
|
5.8
|
|
|
|
5.9
|
|
Employee trust shares
|
|
|
|
|
(25.2)
|
(25.2)
|
|
Share based payments
|
|
|
|
|
20.8
|
20.8
|
|
At 31 December 2023
|
108.6
|
205.2
|
(170.2)
|
16.7
|
2,806.0
|
2,966.3
|
1 IAS 29 'Financial Reporting in Hyperinflationary Economies'
remains applicable for the Group's businesses with a functional
currency of the Turkish Lira and was applicable for the Group's
business with a functional currency of the Argentinian Peso up to
the date of disposal (Note 9). The results of the Group's
businesses in Turkey and Argentina have been adjusted for the
effects of inflation in accordance with IAS 29. See Note 1 for
further details.
◊ Other reserves comprise merger reserve of £2.5m (30 June
2023: £2.5m; 31 December 2023: £2.5m), capital redemption reserve
of £16.1m (30 June 2023: £16.1m; 31 December 2023: £16.1m) and a
positive cash flow hedge reserve of £0.1m (30 June 2023: negative
£0.1m; 31 December 2023: negative £1.9m).
† Retained earnings
comprise earnings of £2,838.9m (30 June 2023: £2,566.0m; 31
December 2023: £2,876.9m), offset by own shares of £108.0m (30 June
2023: £99.5m; 31 December 2023: £70.9m).
Condensed consolidated cash flow statement
for the period ended 30 June
2024
|
|
|
Six months
|
Six
months
|
Year
to
|
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
Notes
|
£m
|
£m
|
£m
|
|
Cash flow from operating activities
|
|
|
|
|
|
Profit before income tax
|
|
279.4
|
317.1
|
698.6
|
|
Adjusted for:
|
|
|
|
|
|
net finance expense
|
4
|
47.1
|
42.7
|
90.5
|
|
customer relationships, brands and
technology amortisation
|
11
|
69.9
|
65.6
|
135.6
|
|
acquisition related
items
|
3
|
39.2
|
12.9
|
19.5
|
|
non-recurring pension scheme
credit
|
|
(3.2)
|
-
|
-
|
|
disposal of business
|
|
23.1
|
-
|
-
|
|
Adjusted operating profit
|
|
455.5
|
438.3
|
944.2
|
|
Adjustments:
|
|
|
|
|
|
depreciation and software
amortisation
|
17
|
112.1
|
100.5
|
207.2
|
|
other non-cash items
|
17
|
13.4
|
3.2
|
6.5
|
|
working capital
movement
|
17
|
(16.8)
|
(27.4)
|
(28.4)
|
|
Cash generated from operations before acquisition related
items
|
|
564.2
|
514.6
|
1,129.5
|
|
Cash outflow from acquisition
related items
|
8
|
(25.2)
|
(23.5)
|
(36.9)
|
|
Income tax paid
|
|
(98.5)
|
(81.3)
|
(188.6)
|
|
Cash inflow from operating activities
|
|
440.5
|
409.8
|
904.0
|
|
|
|
|
|
|
|
Cash flow from investing activities
|
|
|
|
|
|
Interest received
|
|
29.6
|
21.7
|
54.4
|
|
Purchase of property, plant and
equipment and software
|
|
(24.8)
|
(25.7)
|
(58.3)
|
|
Proceeds from sale of property,
plant and equipment
|
|
6.6
|
0.3
|
2.1
|
|
Purchase of businesses net of cash
acquired
|
8
|
(414.0)
|
(72.2)
|
(337.7)
|
|
Disposal of business net of cash
disposed
|
|
0.6
|
-
|
-
|
|
Cash outflow from investing activities
|
|
(402.0)
|
(75.9)
|
(339.5)
|
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
|
Interest paid excluding interest on
lease liabilities
|
|
(63.5)
|
(51.4)
|
(107.6)
|
|
Dividends paid
|
6
|
(61.0)
|
(57.9)
|
(209.7)
|
|
Increase in borrowings
|
|
148.1
|
5.2
|
-
|
|
Repayment of
borrowings
|
|
(130.9)
|
(159.1)
|
(159.5)
|
|
Receipts on settlement of foreign
exchange contracts
|
|
8.6
|
12.0
|
21.6
|
|
Payment of lease liabilities -
principal
|
14
|
(85.2)
|
(78.8)
|
(159.4)
|
|
Payment of lease liabilities -
interest
|
14
|
(18.0)
|
(13.1)
|
(28.6)
|
|
Proceeds from issue of ordinary
shares to settle share options
|
|
4.5
|
4.5
|
5.9
|
|
Proceeds from exercise of market
purchase share options
|
|
17.1
|
23.1
|
46.8
|
|
Purchase of employee trust
shares
|
|
(75.2)
|
(76.4)
|
(76.4)
|
|
Cash outflow from financing activities
|
|
(255.5)
|
(391.9)
|
(666.9)
|
|
|
|
|
|
|
|
Decrease in cash, cash equivalents and
overdrafts
|
|
(217.0)
|
(58.0)
|
(102.4)
|
|
|
|
|
|
|
|
Cash, cash equivalents and
overdrafts at start of the period
|
|
551.9
|
678.1
|
678.1
|
|
Decrease in cash, cash equivalents
and overdrafts
|
|
(217.0)
|
(58.0)
|
(102.4)
|
|
Currency translation
|
|
(15.8)
|
(26.5)
|
(23.8)
|
|
Cash, cash equivalents and overdrafts at end of the
period
|
15
|
319.1
|
593.6
|
551.9
|
|
|
|
|
|
|
| |
|
Alternative performance measures*
|
Notes
|
Six months
to 30.6.24
£m
|
Six
months to 30.6.23
£m
|
Year to
31.12.23
£m
|
|
Cash generated from operations before acquisition related
items
|
|
564.2
|
514.6
|
1,129.5
|
|
Purchase of property, plant and
equipment and software
|
|
(24.8)
|
(25.7)
|
(58.3)
|
|
Proceeds from sale of property,
plant and equipment
|
|
6.6
|
0.3
|
2.1
|
|
Payment of lease
liabilities
|
14
|
(103.2)
|
(91.9)
|
(188.0)
|
|
Operating cash flow
|
|
442.8
|
397.3
|
885.3
|
|
|
|
|
|
|
|
Adjusted operating profit
|
|
455.5
|
438.3
|
944.2
|
|
Add back depreciation of
right-of-use assets
|
10
|
89.1
|
80.7
|
166.1
|
|
Deduct payment of lease
liabilities
|
14
|
(103.2)
|
(91.9)
|
(188.0)
|
|
Lease adjusted operating profit
|
|
441.4
|
427.1
|
922.3
|
|
|
|
|
|
|
|
Cash conversion (operating cash flow as a percentage of lease
adjusted operating profit)
|
|
100%
|
93%
|
96%
|
|
|
|
|
|
|
|
Operating cash flow
|
|
442.8
|
397.3
|
885.3
|
|
Net interest paid excluding
interest on lease liabilities
|
|
(33.9)
|
(29.7)
|
(53.2)
|
|
Income tax paid
|
|
(98.5)
|
(81.3)
|
(188.6)
|
|
Free cash flow
|
|
310.4
|
286.3
|
643.5
|
* See Note 2 for further details
of the alternative performance measures.
Notes
1. Basis of preparation and accounting
policies
The condensed consolidated interim
financial statements (the 'interim financial statements') of Bunzl
plc ('the Company') for the six months ended 30 June 2024, with
comparative figures for the six months ended 30 June 2023, are
unaudited and do not constitute statutory accounts. However the
external auditors have carried out a review of the interim
financial statements and their report in respect of the six months
ended 30 June 2024 is set out in the Independent review report. The
comparative figures for the year ended 31 December 2023 do not
constitute the Company's statutory accounts for the year. Those
accounts have been reported on by the Company's auditors and
delivered to the Registrar of Companies. The report of the
auditors was unqualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report and did not contain statements
under Section 498(2)(3) of the Companies Act 2006.
The interim financial statements
for the six month period ended 30 June 2024 have been prepared in
accordance with UK-adopted International Accounting Standard 34,
'Interim Financial Reporting' (IAS 34), and the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. The interim financial statements also comply
with IAS 34 as issued by the International Accounting Standards
Board. The interim report does not include all of the notes of the
type normally included in the Annual Report. Accordingly, this
report is to be read in conjunction with the Annual Report for the
year ended 31 December 2023, which was prepared in accordance with
UK-adopted International Accounting Standards in conformity with
the requirements of the Companies Act 2006 and the applicable legal
requirements of the Companies Act 2006.
The accounting policies adopted
are consistent with those of the corresponding interim reporting
period and also the previous financial year except for the
estimation of income tax (see Note 5). The Group has adopted all
relevant amendments to existing standards issued by the IASB and UK
Endorsement Board that are effective from 1 January 2024 with no
material impact on its consolidated results or financial
position.
Going concern
The directors, having reassessed
the Group's principal risks and uncertainties, consider it
appropriate to adopt the going concern basis of accounting in the
preparation of the interim financial statements.
In reaching this conclusion, the
directors noted the Group's operating cash flow performance in the
first half of the year and the substantial funding available to the
Group as described in the Financial Review. The directors also
considered a range of different forecast scenarios for the 18 month
period from the date of these financial statements to the end of
December 2025 starting with a base case projection derived from the
Group's 2024 forecasts excluding any non-committed acquisition
spend or changes in funding. The resilience of the Group to a
severe but plausible downside scenario was factored into the
directors' considerations. The severe but plausible downside
scenario included a 15% reduction in adjusted operating profit from
the potential for adverse impacts from the crystallisation of the
principal strategic and operational risks to the Group's organic
growth and a 10% increase in working capital.
In addition, the Group has carried
out a reverse stress test against the base case to determine the
level of performance that would result in a breach of financial
covenants. The Group could experience a total reduction in EBITDA
of over 50% compared to the base case without breaching financial
covenants.
In the severe but plausible
downside scenario it was found that the Group was resilient and in
particular it remained in compliance with the relevant financial
covenants. The conditions required to create the reverse stress
test scenario were so severe that they were considered to be
implausible. The directors are therefore satisfied that the Group's
forecasts, and the severe but plausible downside scenario applied
to them, show that there are no material uncertainties over going
concern, including no anticipated breach of covenants, and
therefore the going concern basis of preparation continues to be
appropriate.
Impact of Hyperinflation on the financial statements at 30
June 2024
The Group's interim financial
statements include the results and financial position of its
Turkish operations restated to the measuring unit current at the
end of the period, and results of its Argentinian operation
restated to the measuring unit current for the period up until
disposal (Note 9), with hyperinflationary gains and losses in
respect of monetary items being reported in finance expense.
Comparative amounts presented in the interim financial statements
have not been restated. The inflation rates used by the Group are
the official rates published by the Turkish Statistical Institute
and the Argentine Federation of Professional Councils of Economic
Sciences. The movement in the publicly available official price
index for the six months to 30 June 2024 was an increase of 25%
(six months to 30 June 2023: increase of 20%, year ended 31
December 2023: increase of 65%) in Turkey and was an increase of
37% for the period up until disposal (six months to 30 June 2023:
increase of 56%, year ended 31 December 2023: increase of 210%) in
Argentina.
IAS 29 requires that the income
statement is adjusted for inflation in the period and translated at
the period-end foreign exchange rates and that non-monetary assets
and liabilities on the balance sheet are inflated to reflect the
change in purchasing power caused by inflation from the date of
initial recognition. For the period ended 30 June 2024, this
resulted in an increase in goodwill of £4.8m (six months to 30 June
2023: £3.5m, year ended 31 December: £8.4m) and a net increase in
other intangibles of £0.2m (six months to 30 June 2023: £0.3m, year
ended 31 December: £0.4m). The impacts on other non-monetary assets
and liabilities were immaterial. The impact to retained earnings
during the period was a gain of £10.7m (six months to 30 June 2023:
gain of £8.6m, year ended 31 December: £21.6m). The total impact to
the Condensed consolidated income statement during the period was a
charge of £6.0m (six months to 30 June 2023: £5.1m, year ended 31
December: £11.0m) to profit after tax from hyperinflation
accounting adjustments, comprising a £6.0m adverse impact (six
months to 30 June 2023: £4.7m adverse impact, year ended 31
December: £9.5m adverse impact) on adjusted profit before tax,
increased customer relationships amortisation of £0.1m (six months
to 30 June 2023: £0.1m, year ended 31 December: £0.2m) and a £0.1m
decrease in the tax charge (six months to 30 June 2023: £0.3m
increase, year ended 31 December: £1.3m increase).
When applying IAS 29 on an ongoing
basis, comparatives in a stable currency are not restated with the
translation effect presented within other comprehensive income
during the period, and the effect of inflating opening balances to
the measuring unit current at the end of the reporting period
presented as a change in equity.
2. Alternative performance measures
In addition to the various
performance measures defined under IFRS, the Group reports a number
of other measures that are designed to assist with the
understanding of the underlying performance of the Group and its
businesses. These measures are not defined under IFRS and, as a
result, do not comply with Generally Accepted Accounting Practice
('GAAP') and are therefore known as 'alternative performance
measures'. Accordingly, these measures, which are not designed to
be a substitute for any of the IFRS measures of performance, may
not be directly comparable with other companies' alternative
performance measures. The principal alternative performance
measures used within the interim financial statements and the
location of the reconciliation to equivalent IFRS measures are
shown and defined in the table below:
|
Organic revenue growth
|
Revenue excluding the incremental
impact of acquisitions and disposals compared to revenue in prior
years at constant exchange
|
|
Underlying revenue growth
|
Revenue excluding the incremental
impact of acquisitions and disposals compared to revenue in prior
years at constant exchange, adjusted for differences in trading
days between years and adjusted to exclude growth in excess of 26%
per annum in hyperinflationary economies (reconciled in the
Financial review)
|
|
Adjusted operating profit
|
Operating profit before customer
relationships, brands and technology amortisation, acquisition
related items, non-recurring pension scheme charges/credits and
profit or loss on disposal of businesses (reconciled in the
following tables and in the Condensed consolidated income
statement)
|
|
Operating margin
|
Adjusted operating profit as a
percentage of revenue
|
|
Adjusted finance expense
|
Finance expense before interest on
unwinding of discounting deferred consideration
|
|
Adjusted profit before income tax
|
Profit before income tax, customer
relationships, brands and technology amortisation, acquisition
related items, non-recurring pension scheme charges/credits and
profit or loss on disposal of businesses (reconciled in the
following tables)
|
|
Adjusted profit for the period
|
Profit for the period before
customer relationships, brands and technology amortisation,
acquisition related items, non-recurring pension scheme
charges/credits, profit or loss on disposal of businesses and the
associated tax (reconciled in the following tables)
|
|
Effective tax rate
|
Tax on adjusted profit before income
tax as a percentage of adjusted profit before income tax
(reconciled in Note 5)
|
|
Adjusted earnings per share
|
Adjusted profit for the period
divided by the weighted average number of ordinary shares in issue
(reconciled in the following tables and in Note 7)
|
|
Adjusted diluted earnings per share
|
Adjusted profit for the period
divided by the diluted weighted average number of ordinary shares
(reconciled in Note 7)
|
|
Operating cash flow
|
Cash generated from operations
before acquisition related items after deducting purchases of
property, plant and equipment and software and adding back the
proceeds from the sale of property, plant and equipment and
software and deducting the payment of lease liabilities (as shown
in the Condensed consolidated cash flow statement)
|
|
Free cash flow
|
Operating cash flow after deducting
payments for income tax and net interest excluding interest on
lease liabilities (as shown in the Condensed consolidated cash flow
statement)
|
|
Lease adjusted operating profit
|
Adjusted operating profit after
adding back the depreciation of right-of-use assets and deducting
the payment of lease liabilities (as shown in the Condensed
consolidated cash flow statement)
|
|
Cash conversion
|
Operating cash flow as a percentage
of lease adjusted operating profit (as shown in the Condensed
consolidated cash flow statement)
|
|
Working capital
|
Inventories and trade and other
receivables less trade and other payables, excluding non-operating
related receivables, non-operating related payables (including
those relating to acquisition payments) and dividends payable
(reconciled in Note 12)
|
|
Return on average operating capital
|
The ratio of adjusted operating
profit to the average of the month end operating capital employed
(being property, plant and equipment, right-of-use assets,
software, inventories and trade and other receivables less trade
and other payables)
|
|
Return on invested capital
|
The ratio of adjusted operating
profit to the average of the month end invested capital (being
equity after adding back net debt, lease liabilities, net defined
benefit pension scheme assets, cumulative customer relationships,
brands and technology amortisation, acquisition related items and
amounts written off goodwill, net of the associated tax)
|
|
Dividend cover
|
The ratio of adjusted earnings per
share to the total dividend per share
|
|
EBITDA
|
Adjusted operating profit on a
historical GAAP basis, before depreciation of property, plant and
equipment and software amortisation and after adjustments as
permitted by the Group's debt covenants, principally to exclude
share option charges and to annualise for the effect of
acquisitions and disposal of businesses
|
|
Net
debt excluding lease liabilities
|
Net debt excluding the carrying
value of lease liabilities (reconciled in Note 15)
|
|
Covenant net debt to EBITDA
|
Net debt excluding lease liabilities
calculated at average exchange rates divided by EBITDA
|
|
|
Adjusted net debt
|
Net debt excluding lease liabilities
and including total deferred and contingent consideration (as
reconciled in the financial review)
|
|
|
Adjusted net debt including lease
liabilities
|
Net debt including lease liabilities
and total deferred and contingent consideration (as reconciled in
the financial review)
|
|
|
Adjusted net debt to EBITDA
|
Adjusted net debt calculated at
average exchange rates divided by EBITDA adjusted for contractually
agreed earnings targets
|
|
|
Adjusted net debt including lease liabilities to
EBITDA
|
Adjusted net debt including lease
liabilities calculated at average exchange rates divided by
adjusted operating profit, before depreciation of property, plant
and equipment and right of use assets and software amortisation and
after adjustments to exclude share option charges and to annualise
for the effect of acquisitions and disposal of businesses adjusted
for contractually agreed earnings targets
|
|
|
Constant exchange rates
|
Growth rates at constant exchange
rates are calculated by retranslating the results for the prior
periods at the average exchange rates for the period ended 30 June
2024 so that they can be compared without the distorting impact of
changes caused by foreign exchange translation. The exchange rates
used for 2024 and 2023 can be found in the Financial
review
|
|
The definitions of 'Organic
revenue growth', 'Adjusted finance expense', 'Covenant net debt to
EBITDA', 'Adjusted net Debt', 'Adjusted net debt including lease
liabilities', 'Adjusted net debt to EBITDA' and 'Adjusted net debt
including lease liabilities to EBITDA' have been added to the list
of alternative performance measures in the period. All other
alternative performance measures have been calculated consistently
with the methods applied in the consolidated financial statements
for the year ended 31 December 2023. The amendments to the list of
alternative performance measures, and an assessment of the
relevance of the existing alternative performance measures, were
agreed with the Audit Committee.
A number of the alternative
performance measures listed above exclude the charge for customer
relationships, brands and technology amortisation, acquisition
related items, non-recurring pension scheme charges/credits, profit
or loss on disposal of businesses and any associated tax, where
relevant.
Acquisition related items through
operating profit comprises deferred consideration payments relating
to the retention of former owners of businesses acquired,
transaction costs and expenses, adjustments to previously estimated
earn outs, customer relationships asset impairment charges,
goodwill impairment charges and interest on acquisition related
income tax. Total acquisition related items also includes interest
on unwinding of discounting deferred consideration, which is
included in net finance expense. Customer relationships, brands and
technology amortisation, acquisition related items and any
associated tax are considered by management to form part of the
total spend on acquisitions or are non-cash items resulting from
acquisitions.
The non-recurring pension scheme
charges/credits relate to non-recurring charges or credits arising
from the Group's participation in a number of defined benefit
pension schemes. In the period ended 30 June 2024 the non-recurring
pension scheme credit relates to a gain on curtailment of the UK
defined benefit pension scheme following the scheme's closure to
further accrual in May 2024. In the period ended 30 June 2023 and
year end 31 December 2023 there were no non-recurring pensions
scheme charges/credits. Disposal of business relates to the loss on
disposal of the Group's business in Argentina on 14 March 2024.
None of these items relate to the trading performance of the
business. Accordingly, these items are not taken into account by
management when assessing the results of the business and are
removed in calculating the profitability measures by which
management assesses the performance of the Group. However, it
should be noted that they do exclude income and charges that
nevertheless do impact the Group's cash flow and GAAP financial
performance.
Reconciliation of alternative performance measures to
statutory measures
The principal profit related
alternative performance measures, these being adjusted operating
profit, adjusted profit before income tax, adjusted profit for the
period and adjusted earnings per share are reconciled to the most
directly reconcilable statutory measures in the tables
below.
Six months ended 30 June 2024
|
|
|
|
|
Adjusting
items
|
|
|
|
|
|
Alternative performance
measures
£m
|
Customer relationships,
brands and technology amortisation
£m
|
Acquisition related
items
£m
|
Non-recurring pension scheme
credit
£m
|
Disposal of
business
£m
|
Statutory
measures
£m
|
|
|
|
Adjusted operating profit
|
455.5
|
(69.9)
|
(39.2)
|
3.2
|
|
349.6
|
Operating profit
|
|
Finance income
|
31.6
|
|
|
|
|
31.6
|
Finance income
|
|
Adjusted finance
expense
|
(78.4)
|
|
(0.3)
|
|
|
(78.7)
|
Finance expense
|
|
Disposal of business
|
|
|
|
|
(23.1)
|
(23.1)
|
Disposal of business
|
|
Adjusted profit
before
income tax
|
408.7
|
(69.9)
|
(39.5)
|
3.2
|
(23.1)
|
279.4
|
Profit before
income tax
|
|
Tax on adjusted profit
|
(104.2)
|
19.1
|
5.3
|
(0.8)
|
(0.1)
|
(80.7)
|
Income tax
|
|
Adjusted profit for the period
|
304.5
|
(50.8)
|
(34.2)
|
2.4
|
(23.2)
|
198.7
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share
|
90.8p
|
(15.2)p
|
(10.1)p
|
0.6p
|
(6.9)p
|
59.2p
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Six months ended 30 June
2023
|
|
|
|
|
Adjusting items
|
|
|
|
Alternative performance measures
£m
|
Customer
relationships, brands and technology amortisation
£m
|
Acquisition related items
£m
|
Non-recurring pension scheme credit
£m
|
Disposal
of business
£m
|
Statutory measures
£m
|
|
|
Adjusted operating
profit
|
438.3
|
(65.6)
|
(12.9)
|
-
|
|
359.8
|
Operating profit
|
|
Finance income
|
23.8
|
|
|
|
|
23.8
|
Finance income
|
|
Adjusted finance
expense
|
(66.5)
|
|
-
|
|
|
(66.5)
|
Finance expense
|
|
Adjusted profit before
income tax
|
395.6
|
(65.6)
|
(12.9)
|
-
|
-
|
317.1
|
Profit before
income tax
|
|
Tax on adjusted profit
|
(99.7)
|
17.3
|
2.5
|
-
|
-
|
(79.9)
|
Income tax
|
|
Adjusted profit for the
period
|
295.9
|
(48.3)
|
(10.4)
|
-
|
-
|
237.2
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share
|
88.3p
|
(14.4)p
|
(3.1)p
|
-
|
-
|
70.8p
|
Basic earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year ended 31 December
2023
|
|
|
|
Adjusting items
|
|
|
|
Alternative performance measures
£m
|
Customer
relationships, brands and technology amortisation
£m
|
Acquisition related items
£m
|
Non-recurring pension scheme credit
£m
|
Disposal
of business
£m
|
Statutory measures
£m
|
|
|
Adjusted operating
profit
|
944.2
|
(135.6)
|
(19.5)
|
-
|
|
789.1
|
Operating profit
|
|
Finance income
|
60.4
|
|
|
|
|
60.4
|
Finance income
|
|
Adjusted finance
expense
|
(150.9)
|
|
-
|
|
|
(150.9)
|
Finance expense
|
|
Adjusted profit before
income tax
|
853.7
|
(135.6)
|
(19.5)
|
-
|
-
|
698.6
|
Profit before
income tax
|
|
Tax on adjusted profit
|
(213.4)
|
36.7
|
4.3
|
-
|
-
|
(172.4)
|
Income tax
|
|
Adjusted profit for the
year
|
640.3
|
(98.9)
|
(15.2)
|
-
|
-
|
526.2
|
Profit for the year
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share
|
191.1p
|
(29.5)p
|
(4.5)p
|
-
|
-
|
157.1p
|
Basic earnings per
share
|
|
|
|
|
|
|
|
|
|
|
| |
3. Segment analysis
The Group results are reported as
four business areas based on geographical regions which are
reviewed regularly by the Company's chief operating decision maker,
the Board of directors. Across the Group,
the vast majority of revenue is generated from the delivery of
goods to customers representing a single performance obligation
which is satisfied upon delivery of the relevant goods. The Group's
revenue and financial results have not historically been subject to
significant seasonal trends. The principal
results reviewed for each business area are revenue and adjusted
operating profit.
|
Six months ended 30 June
2024
|
North
America
|
Continental
Europe
|
UK &
Ireland
|
Rest of
the
World
|
Corporate
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Revenue
|
3,234.8
|
1,186.9
|
689.1
|
600.7
|
|
5,711.5
|
|
Adjusted operating profit/(loss)
|
239.1
|
106.7
|
52.6
|
73.0
|
(15.9)
|
455.5
|
|
Customer relationships, brands and
technology amortisation
|
(28.5)
|
(21.1)
|
(6.8)
|
(13.5)
|
|
(69.9)
|
|
Acquisition related
items through operating profit
|
(3.5)
|
(12.0)
|
(13.6)
|
(10.1)
|
|
(39.2)
|
|
Non-recurring pension scheme
credit
|
-
|
-
|
-
|
-
|
3.2
|
3.2
|
|
Operating profit/(loss)
|
207.1
|
73.6
|
32.2
|
49.4
|
(12.7)
|
349.6
|
|
Finance income
|
|
|
|
|
|
31.6
|
|
Finance expense
|
|
|
|
|
|
(78.7)
|
|
Disposal of business
|
|
|
|
|
|
(23.1)
|
|
Profit before income tax
|
|
|
|
|
|
279.4
|
|
Adjusted profit before income tax
|
|
|
|
|
|
408.7
|
|
Income tax
|
|
|
|
|
|
(80.7)
|
|
Profit for the period
|
|
|
|
|
|
198.7
|
|
|
|
|
|
|
|
|
|
Operating margin
|
7.4%
|
9.0%
|
7.6%
|
12.2%
|
|
8.0%
|
|
Return on average operating capital
|
48.6%
|
45.0%
|
56.4%
|
37.7%
|
|
45.3%
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2023
|
North
America
|
Continental
Europe
|
UK
&
Ireland
|
Rest of
the
World
|
Corporate
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Revenue
|
3,514.4
|
1,179.1
|
663.8
|
549.5
|
|
5,906.8
|
|
Adjusted operating
profit/(loss)
|
245.6
|
106.8
|
44.7
|
57.1
|
(15.9)
|
438.3
|
|
Customer relationships, brands and
technology amortisation
|
(28.6)
|
(21.1)
|
(5.5)
|
(10.4)
|
|
(65.6)
|
|
Acquisition related
items through operating profit
|
(2.3)
|
(4.3)
|
2.1
|
(8.4)
|
|
(12.9)
|
|
Operating profit/(loss)
|
214.7
|
81.4
|
41.3
|
38.3
|
(15.9)
|
359.8
|
|
Finance income
|
|
|
|
|
|
23.8
|
|
Finance expense
|
|
|
|
|
|
(66.5)
|
|
Profit before income tax
|
|
|
|
|
|
317.1
|
|
Adjusted profit before income
tax
|
|
|
|
|
|
395.6
|
|
Income tax
|
|
|
|
|
|
(79.9)
|
|
Profit for the period
|
|
|
|
|
|
237.2
|
|
|
|
|
|
|
|
|
|
Operating margin
|
7.0%
|
9.1%
|
6.7%
|
10.4%
|
|
7.4%
|
|
Return on average operating
capital
|
46.4%
|
42.1%
|
57.7%
|
34.9%
|
|
43.2%
|
|
Year ended 31 December
2023
|
North
America
|
Continental Europe
|
UK &
Ireland
|
Rest of
the World
|
Corporate
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Revenue
|
6,973.5
|
2,354.9
|
1,365.5
|
1,103.2
|
|
11,797.1
|
|
Adjusted operating
profit/(loss)
|
528.0
|
224.7
|
103.4
|
119.6
|
(31.5)
|
944.2
|
|
Customer relationships, brands and
technology amortisation
|
(57.1)
|
(43.7)
|
(11.1)
|
(23.7)
|
|
(135.6)
|
|
Acquisition related
items through operating profit
|
(5.5)
|
(0.3)
|
(3.1)
|
(10.6)
|
|
(19.5)
|
|
Operating profit/(loss)
|
465.4
|
180.7
|
89.2
|
85.3
|
(31.5)
|
789.1
|
|
Finance income
|
|
|
|
|
|
60.4
|
|
Finance expense
|
|
|
|
|
|
(150.9)
|
|
Profit before income tax
|
|
|
|
|
|
698.6
|
|
Adjusted profit before income
tax
|
|
|
|
|
|
853.7
|
|
Income tax
|
|
|
|
|
|
(172.4)
|
|
Profit for the year
|
|
|
|
|
|
526.2
|
|
|
|
|
|
|
|
|
|
Operating margin
|
7.6%
|
9.5%
|
7.6%
|
10.8%
|
|
8.0%
|
|
Return on average operating
capital
|
49.6%
|
45.4%
|
65.5%
|
35.5%
|
|
46.1%
|
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
Acquisition related items through operating
profit
|
£m
|
£m
|
£m
|
|
Deferred consideration payments
relating to the retention of
former owners of businesses acquired
|
20.1
|
17.6
|
37.3
|
|
Transaction costs and
expenses
|
16.6
|
12.0
|
18.1
|
|
Adjustments to previously estimated
earn outs
|
0.2
|
(16.7)
|
(35.9)
|
|
|
36.9
|
12.9
|
19.5
|
|
Customer relationship impairment
charges (Note 11)
|
2.3
|
-
|
-
|
|
|
39.2
|
12.9
|
19.5
|
4. Finance income/(expense)
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Interest on cash and cash
equivalents
|
22.1
|
15.2
|
40.3
|
|
Interest income from foreign
exchange contracts
|
7.7
|
6.6
|
16.0
|
|
Net interest income on defined
benefit pension schemes in surplus
|
1.6
|
1.6
|
3.2
|
|
Other finance income
|
0.2
|
0.4
|
0.9
|
|
Finance income
|
31.6
|
23.8
|
60.4
|
|
|
|
|
|
|
Interest on loans and
overdrafts
|
(55.8)
|
(47.2)
|
(106.7)
|
|
Lease interest expense
|
(18.0)
|
(13.1)
|
(28.6)
|
|
Interest expense from foreign
exchange contracts
|
(0.5)
|
(0.6)
|
(1.5)
|
|
Net interest expense on defined
benefit pension schemes in deficit
|
(0.3)
|
(0.4)
|
(1.0)
|
|
Fair value gain/(loss) on US
private placement notes and senior bond in a hedge
relationship
|
8.3
|
10.5
|
(24.4)
|
|
Fair value (loss)/gain on interest
rate swaps in a hedge relationship
|
(8.4)
|
(12.1)
|
21.8
|
|
Foreign exchange loss on
intercompany funding
|
(12.4)
|
(58.3)
|
(41.1)
|
|
Foreign exchange gain on external
debt and foreign exchange forward contracts
|
11.6
|
58.0
|
40.5
|
|
Interest related to income
tax
|
-
|
-
|
(0.1)
|
|
Monetary loss from hyperinflation
accounting1
|
(2.0)
|
(2.5)
|
(7.2)
|
|
Other finance expense
|
(0.9)
|
(0.8)
|
(2.6)
|
|
Adjusted finance expense
|
(78.4)
|
(66.5)
|
(150.9)
|
|
|
|
|
|
|
Interest on unwinding of discounting
on deferred consideration
|
(0.3)
|
-
|
-
|
|
Finance expense
|
(78.7)
|
(66.5)
|
(150.9)
|
|
Net
finance expense
|
(47.1)
|
(42.7)
|
(90.5)
|
1See Note 1 for further details.
The foreign exchange loss on
intercompany funding in the six month period to 30 June 2024 arises
as a result of the retranslation of foreign currency intercompany
loans. This loss on intercompany funding is substantially matched
by the foreign exchange gain on external debt and foreign exchange
forward contracts not in a hedge relationship, which minimises the
foreign currency exposure in the Condensed consolidated income
statement.
5. Income tax
The tax charge for the interim
financial statements is determined by applying the weighted average
statutory tax rate based on full year forecast profits to the
actual profits for the first half of the year, and then adjusting
for non-taxable or deductible items that affect the profits of the
first half of the year. Where tax balances are revised due to
changes in tax rates or estimates of tax liabilities for prior
periods, the full effect on the income statement is included in the
tax charge for the first half of the year.
The adjustments to the tax charge
at the weighted average rate to determine the income tax on profit
for the period are as follows:
|
|
Six
months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Profit before income tax
|
279.4
|
317.1
|
698.6
|
|
|
|
|
|
|
Weighted average rate
|
25.5%
|
25.5%
|
25.2%
|
|
|
|
|
|
|
Tax charge at weighted average
rate
|
71.2
|
81.0
|
176.0
|
|
Effects of:
|
|
|
|
|
non-deductible
expenditure
|
12.0
|
0.9
|
0.5
|
|
impact of intercompany
finance
|
(0.4)
|
0.1
|
1.2
|
|
change in tax rates
|
0.2
|
-
|
(0.7)
|
|
hyperinflation accounting
adjustments
|
0.3
|
1.1
|
3.8
|
|
prior year adjustments
|
(2.7)
|
(3.1)
|
(7.0)
|
|
other current year
items
|
0.1
|
(0.1)
|
(1.4)
|
|
Income tax on profit
|
80.7
|
79.9
|
172.4
|
In assessing the underlying
performance of the Group, management uses adjusted profit before
income tax. The tax effect of the adjusting items (see Note 2) is
excluded in monitoring the effective tax rate (being the tax rate
on adjusted profit before income tax) which is shown in the table
below:
|
|
Six
months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Income tax on profit
|
80.7
|
79.9
|
172.4
|
|
Tax associated with adjusting
items
|
23.5
|
19.8
|
41.0
|
|
Tax
on adjusted profit
|
104.2
|
99.7
|
213.4
|
|
|
|
|
|
|
Profit before income tax
|
279.4
|
317.1
|
698.6
|
|
Adjusting items
|
129.3
|
78.5
|
155.1
|
|
Adjusted profit before income tax
|
408.7
|
395.6
|
853.7
|
|
|
|
|
|
|
Reported tax rate
|
28.9%
|
25.2%
|
24.7%
|
|
Effective tax rate
|
25.5%
|
25.2%
|
25.0%
|
The Group is subject to the global
minimum tax regime known as Pillar 2 and any additional taxes from
this are included within the income tax expense. No
significant tax liabilities, however, are expected from Pillar 2
taxes.
6.
Dividends
Total dividends for the periods in
which they are recognised are:
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
2022 interim
|
|
57.9
|
57.9
|
|
2022 final
|
|
151.8
|
151.8
|
|
2023 interim
|
61.0
|
|
|
|
2023 final
|
167.6
|
|
|
|
Total
|
228.6
|
209.7
|
209.7
|
Total dividends per share for the
periods to which they relate are:
|
|
|
|
Per share
|
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
2023 interim
|
|
18.2p
|
18.2p
|
|
2023 final
|
|
|
50.1p
|
|
2024 interim
|
20.1p
|
|
|
|
Total
|
20.1p
|
18.2p
|
68.3p
|
The 2024 interim dividend of 20.1p
per share will be paid on 3 January 2025 to shareholders on the
register at the close of business on 15 November 2024. The 2024
interim dividend will comprise approximately £67m of
cash.
7.
Earnings per share
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Profit for the
period
|
198.7
|
237.2
|
526.2
|
|
Adjusted for:
|
|
|
|
|
customer relationships, brands and technology
amortisation
|
69.9
|
65.6
|
135.6
|
|
acquisition related items
|
39.5
|
12.9
|
19.5
|
|
loss on disposal of business
|
23.1
|
-
|
-
|
|
non-recurring pension scheme credit
|
(3.2)
|
-
|
-
|
|
tax
credit on adjusting items
|
(23.5)
|
(19.8)
|
(41.0)
|
|
Adjusted profit for the period
|
304.5
|
295.9
|
640.3
|
|
|
|
|
|
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
Basic weighted average number of
ordinary shares in issue (million)
|
335.4
|
335.1
|
335.0
|
|
Dilutive effect of employee share
plans (million)
|
2.1
|
2.8
|
2.2
|
|
Diluted weighted average number of
ordinary shares (million)
|
337.5
|
337.9
|
337.2
|
|
|
|
|
|
|
Basic earnings per share
|
59.2p
|
70.8p
|
157.1p
|
|
Adjustment
|
31.6p
|
17.5p
|
34.0p
|
|
Adjusted earnings per share
|
90.8p
|
88.3p
|
191.1p
|
|
|
|
|
|
|
Diluted basic earnings per
share
|
58.8p
|
70.2p
|
156.0p
|
|
Adjustment
|
31.4p
|
17.4p
|
33.9p
|
|
Adjusted diluted earnings per
share
|
90.2p
|
87.6p
|
189.9p
|
8.
Acquisitions
Acquisitions involving the
purchase of the acquiree's share capital or, as the case may be,
the relevant assets of the businesses acquired, have been accounted
for under the acquisition method of accounting. A key part of the
Group's strategy is to grow through acquisition. The Group has
developed a process to assist with the identification of the fair
values of the assets acquired and liabilities assumed, including
the separate identification of intangible assets in accordance with
IFRS 3 'Business Combinations' as revised. This formal process is
applied to each acquisition and involves an assessment of the
assets acquired and liabilities assumed with assistance provided by
external valuation specialists where appropriate. Until this
assessment is complete, the allocation period remains open up to a
maximum of 12 months from the relevant acquisition date. At 30 June
2024 the allocation period for all acquisitions completed since 1
July 2023 remained open and accordingly the fair values presented
are provisional.
Adjustments are made to the assets
acquired and liabilities assumed during the allocation period to
the extent that further information and knowledge come to light
that more accurately reflect conditions at the acquisition date.
Adjustments are made to the value of assets acquired to reflect
more accurately the estimated realisable or settlement value.
Similarly, adjustments are made to acquired liabilities to record
onerous commitments or other commitments existing at the
acquisition date but not recognised by the acquiree. Adjustments
are also made to reflect the associated tax effects. During the six
months to 30 June 2024 adjustments have been recognised to the fair
value of assets and liabilities acquired related to acquisitions
made in the prior year, resulting in a net increase to intangible
assets of £3.0m. Given the immaterial amounts involved, the fair
value of assets and liabilities acquired as reported in the prior
year have not been restated.
The consideration in respect of
acquisitions comprises amounts paid on completion and deferred
consideration. The consideration has been allocated against the
identified net assets, with the balance recorded as goodwill. Any
payments that are contingent on future employment, including
payments which are contingent on the retention of former owners of
businesses acquired, are charged to the income statement.
Transaction costs and expenses such as professional fees are
charged to operating profit in the income statement. Given the
structure of acquisitions and the quantum of deferred consideration
in the period, the Group has recognised interest on unwinding of
discounting deferred consideration, where applicable, which is
charged to finance expense in the income statement.
For each of the businesses
acquired and announced during the period, the name of the business,
the market sector served, its location and date of acquisition, as
well as the estimated annualised revenue are separately disclosed.
The remaining disclosures required by IFRS 3 are provided
separately for those individual acquisitions that are considered to
be material and in aggregate for individually immaterial
acquisitions. An acquisition would generally be considered
individually material if the impact on the Group's revenue or
profit measures (on an annualised basis) or the relevant amounts on
the balance sheet is greater than 5%. Management also applies
judgement in considering whether there are any material qualitative
differences from other acquisitions made.
Six months ended 30 June 2024
Summary details of the businesses
acquired or agreed to be acquired during the period ended 30 June
2024 are shown in the table below:
|
Business
|
Sector
|
Country
|
Acquisition date
2024
|
Percentage of share capital
acquired
|
Annualised
revenue
£m
|
|
Pamark Group
|
Foodservice, Healthcare, Cleaning
& Hygiene and Safety
|
Finland
|
29 February
|
100%
|
55.6
|
|
Nisbets
|
Foodservice
|
UK
|
23 May
|
80%
|
493.5
|
|
Clean Spot
|
Cleaning & Hygiene
|
Canada
|
18 June
|
100%
|
4.3
|
|
Sistemas De Embalaje
Anper
|
Retail
|
Spain
|
28 June
|
100%
|
25.6
|
|
Holland Packaging
|
Retail
|
Netherlands
|
29 June
|
75%
|
15.3
|
|
Other
|
|
|
|
100%
|
11.8
|
|
Acquisition completed in the current period
|
|
|
|
606.1
|
|
RCL Implantes
|
Healthcare
|
Brazil
|
3 July
|
100%
|
17.9
|
|
Acquisitions agreed in the current period
|
|
|
|
624.0
|
The acquisition of Nisbets is
considered to be individually significant due to its impact on
intangible assets. The acquisition is therefore separately
disclosed in the table below. The intangible assets recognised for
Nisbets are preliminary and recognised based on historical
experience as at 30 June 2024. The external valuation is ongoing
and is expected to be substantially completed in the second half of
the year. No acquisitions in 2023 were considered to be
individually significant. A summary of the effect of acquisitions
in the six months ended 30 June 2024 and 30 June 2023 and for the
year ended 31 December 2023 is shown below:
|
|
Nisbets
|
Other
|
Total
30.6.24
|
Total
30.6.23
|
Total
31.12.23
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Customer relationships
|
244.9
|
13.6
|
258.5
|
61.4
|
229.5
|
|
Brands
|
-
|
-
|
-
|
-
|
10.6
|
|
Property, plant and equipment and
software
|
60.6
|
1.6
|
62.2
|
4.9
|
16.6
|
|
Right-of-use assets
|
55.4
|
7.5
|
62.9
|
14.7
|
16.2
|
|
Inventories
|
77.7
|
7.6
|
85.3
|
9.7
|
44.7
|
|
Trade and other
receivables
|
42.2
|
39.5
|
81.7
|
15.1
|
57.0
|
|
Trade and other payables
|
(94.1)
|
(13.8)
|
(107.9)
|
(17.7)
|
(40.5)
|
|
Net cash/(overdrafts)
|
43.4
|
(2.1)
|
41.3
|
10.4
|
19.8
|
|
External debt
|
(5.6)
|
-
|
(5.6)
|
-
|
-
|
|
Provisions
|
(7.7)
|
(16.7)
|
(24.4)
|
(5.7)
|
(26.2)
|
|
Lease liabilities
|
(55.4)
|
(7.5)
|
(62.9)
|
(14.7)
|
(16.2)
|
|
Income tax payable and deferred tax
liabilities
|
(49.4)
|
(13.8)
|
(63.2)
|
(16.7)
|
(29.6)
|
|
Fair value of net assets
acquired
|
312.0
|
15.9
|
327.9
|
61.4
|
281.9
|
|
Provisional goodwill
|
153.2
|
61.7
|
214.9
|
37.8
|
130.6
|
|
Consideration
|
465.2
|
77.6
|
542.8
|
99.2
|
412.5
|
|
|
|
|
|
|
|
|
Satisfied by:
|
|
|
|
|
|
|
cash
consideration
|
377.5
|
66.1
|
443.6
|
76.5
|
343.0
|
|
deferred consideration
|
87.7
|
11.5
|
99.2
|
22.7
|
69.5
|
|
|
465.2
|
77.6
|
542.8
|
99.2
|
412.5
|
|
Contingent payments relating to
the retention of former owners
|
42.1
|
10.3
|
52.4
|
26.5
|
59.5
|
|
Interest on unwinding of
discounting
|
15.1
|
-
|
15.1
|
-
|
-
|
|
Net (cash)/overdrafts
acquired
|
(43.4)
|
2.1
|
(41.3)
|
(10.4)
|
(19.8)
|
|
Transaction costs and
expenses
|
11.9
|
4.7
|
16.6
|
12.0
|
18.1
|
|
Total committed spend in respect of acquisitions completed in
the current period
|
490.9
|
94.7
|
585.6
|
127.3
|
470.3
|
|
Spend on acquisitions committed
but not completed at the period end
|
-
|
65.7
|
65.7
|
87.1
|
-
|
|
Spend on acquisitions committed at
the prior period end but completed in the current period
|
-
|
-
|
-
|
(2.9)
|
(2.8)
|
|
Total committed spend in respect of acquisitions agreed in
the current period
|
490.9
|
160.4
|
651.3
|
211.5
|
467.5
|
The net cash outflow in respect of
acquisitions comprised:
|
|
Nisbets
£m
|
Other
£m
|
Total
30.6.24
£m
|
Total
30.6.23
£m
|
Total
31.12.23
£m
|
|
Cash consideration
|
377.5
|
66.1
|
443.6
|
76.5
|
343.0
|
|
Net (cash)/overdrafts
acquired
|
(43.4)
|
2.1
|
(41.3)
|
(10.4)
|
(19.8)
|
|
Deferred consideration
payments
|
-
|
11.7
|
11.7
|
6.1
|
14.5
|
|
Purchase of businesses
|
334.1
|
79.9
|
414.0
|
72.2
|
337.7
|
|
Transaction costs and expenses
paid
|
6.9
|
4.8
|
11.7
|
11.8
|
18.1
|
|
Payments relating to retention of
former owners
|
-
|
13.5
|
13.5
|
11.7
|
18.8
|
|
Cash outflow from acquisition related items
|
6.9
|
18.3
|
25.2
|
23.5
|
36.9
|
|
Total cash outflow in respect of
acquisitions
|
341.0
|
98.2
|
439.2
|
95.7
|
374.6
|
Acquisitions completed in the six
months ended 30 June 2024 contributed £68.6m (six months ended 30
June 2023: £21.4m; year ended 31 December 2023: £120.5m) to the
Group's revenue, £5.1m (six months ended 30 June 2023: £2.3m; year
ended 31 December 2023: £16.1m) to the Group's adjusted operating
profit and £3.4m (six months ended 30 June 2023: £1.3m; year ended
31 December 2023: £8.7m) to the Group's operating profit for the
six months ended 30 June 2024.
The estimated contributions from
acquisitions completed in the period to the results of the Group if
such acquisitions had been made at the beginning of the respective
periods, are as follows:
|
|
Six months
to 30.6.24
£m
|
Six
months
to
30.6.23
£m
|
Year
to
31.12.23
£m
|
|
Revenue
|
289.7
|
49.6
|
325.1
|
|
Adjusted operating profit
|
21.6
|
5.4
|
51.4
|
Deferred consideration
The table below gives further
details of the Group's deferred consideration
liabilities.
|
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Minority options - acquisition of
non-controlling interest*
|
160.4
|
77.8
|
86.5
|
|
Earnouts
|
51.2
|
17.4
|
36.9
|
|
Deferred consideration held at fair
value
|
211.6
|
95.2
|
123.4
|
|
Minority options - retention
payments of former owners*
|
42.4
|
36.2
|
38.2
|
|
Other
|
10.0
|
8.8
|
14.0
|
|
Total deferred
consideration
|
264.0
|
140.2
|
175.6
|
|
|
|
|
|
|
Current
|
51.8
|
33.4
|
32.3
|
|
Non-current
|
212.2
|
106.8
|
143.3
|
|
Total deferred
consideration
|
264.0
|
140.2
|
175.6
|
|
|
|
|
|
|
Expected future payments which are
contingent on the continued retention of former owners of
businesses acquired not yet recognised on balance sheet
|
131.2
|
83.9
|
83.2
|
|
Total deferred and contingent
consideration - on and off balance sheet
|
395.2
|
224.1
|
258.8
|
|
* The Group has restated
comparatives for the six months to 30 June 2023 and year to 31
December 2023 to remove minority options - retention payments of
former owners from 'Deferred consideration held at fair value' as
these are accounted for in line with IAS19 'Employee
benefits'.
|
|
|
|
|
|
|
|
|
|
|
|
The
maturity profile of total deferred and contingent consideration is
set out in the table below.
|
|
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Within one year
|
57.5
|
38.3
|
33.6
|
|
After one year but within two
years
|
28.7
|
36.6
|
31.2
|
|
After two years but within five
years
|
298.5
|
149.2
|
178.0
|
|
After five years
|
10.5
|
-
|
16.0
|
|
|
395.2
|
224.1
|
258.8
|
Year ended 31 December 2023
Summary details of the businesses
acquired or agreed to be acquired during the year ended 31 December
2023 are shown in the table below:
|
Business
|
Sector
|
Country
|
Acquisition date 2023
|
Percentage of share capital acquired
|
Annualised
revenue
£m
|
|
GRC
|
Healthcare
|
Australia
|
1 January
|
100%
|
4.4
|
|
Capital Paper
|
Foodservice
|
Canada
|
31 January
|
100%
|
16.0
|
|
Arbeitsschutz-Express
|
Safety
|
Germany
|
3 April
|
66%
|
33.1
|
|
Dimasa
|
Cleaning & Hygiene
|
Spain
|
28 April
|
100%
|
3.1
|
|
Irudek
|
Safety
|
Spain
|
28 April
|
75%
|
16.7
|
|
EHM
|
Safety
|
UK
|
5 June
|
100%
|
19.5
|
|
La Cartuja Complementos
Hostelería
|
Foodservice
|
Spain
|
30 June
|
100%
|
4.4
|
|
EcoTools.nl
|
Other
|
Netherlands
|
31 July
|
100%
|
17.8
|
|
Leal Equipamentos de
Proteção
|
Safety
|
Brazil
|
1 August
|
100%
|
33.1
|
|
Packpro
|
Foodservice
|
Canada
|
10 August
|
85%
|
20.1
|
|
Groveko
|
Cleaning & Hygiene
|
Netherlands
|
11 August
|
93.75%
|
21.0
|
|
Pittman Traffic & Safety
Equipment*
|
Safety
|
Ireland
|
28 August
|
100%
|
6.2
|
|
Flexpost
|
Safety
|
USA
|
31 October
|
100%
|
3.0
|
|
Grupo Lanlimp
|
Cleaning & Hygiene
|
Brazil
|
1 November
|
70%
|
37.8
|
|
Melbourne Cleaning
Supplies
|
Cleaning & Hygiene
|
Australia
|
6 November
|
100%
|
9.7
|
|
Safety First
|
Safety
|
Poland
|
30 November
|
65%
|
24.9
|
|
Miracle Sanitation
Supply
|
Cleaning & Hygiene
|
Canada
|
1 December
|
100%
|
7.6
|
|
CT Group
|
Healthcare
|
Brazil
|
1 December
|
100%
|
47.8
|
|
Others**
|
|
|
|
100%
|
3.3
|
|
Acquisitions completed in the
current year
|
|
|
329.5
|
|
GRC
|
Healthcare
|
Australia
|
1 January
|
100%
|
(4.4)
|
|
Acquisitions agreed in the current
year
|
|
|
325.1
|
|
|
|
|
|
|
|
| |
*The acquisition supports the
expansion of our North America based McCue business and is
therefore reported as part of the North America business
area.
**Others includes two small
acquisitions agreed in 2023.
9.
Disposal of business
The Group completed the disposal
of Vicsa Argentina on 14 March 2024. As a result, the net assets of
the Group decreased by £23.1m representing the loss on disposal of
£23.1m. The loss on disposal reflects the cash consideration
received of £1.0m offset by the
net book value of assets disposed of £4.8m and
recycling of historical foreign exchange losses of £19.3m from
amounts held in the translation reserve within equity. There were
no disposals completed in the six months ended 30 June 2023 or year
ended 31 December 2023.
The net cash inflow in the year in
respect of disposal of business comprised:
|
Cash flow from disposal of business
|
Six months
ended
30.6.24
£m
|
|
Cash consideration
received
|
1.0
|
|
Cash and cash equivalents
disposed
|
(0.4)
|
|
Net cash inflow
|
0.6
|
10. Right-of-use assets
|
Six
months ended 30 June 2024
|
|
|
|
|
|
|
Property
|
Motor
Vehicles
|
Equipment
|
Total
|
|
Net
book value
|
£m
|
£m
|
£m
|
£m
|
|
Beginning of period
|
520.0
|
68.8
|
27.5
|
616.3
|
|
Acquisitions (Note 8)
|
57.6
|
4.7
|
0.6
|
62.9
|
|
Additions
|
62.0
|
23.9
|
10.6
|
96.5
|
|
Depreciation charge in the
period
|
(68.4)
|
(15.0)
|
(5.7)
|
(89.1)
|
|
Remeasurement adjustments
|
36.4
|
(0.6)
|
0.5
|
36.3
|
|
Transferred to assets held for
sale
|
(0.2)
|
(0.2)
|
-
|
(0.4)
|
|
Currency translation
|
(5.6)
|
(0.6)
|
(0.1)
|
(6.3)
|
|
As
at 30 June 2024
|
601.8
|
81.0
|
33.4
|
716.2
|
|
|
|
|
|
|
|
Six months ended 30 June
2023
|
|
|
|
|
|
|
Property
|
Motor
Vehicles
|
Equipment
|
Total
|
|
Net book value
|
£m
|
£m
|
£m
|
£m
|
|
Beginning of period
|
439.6
|
63.3
|
26.7
|
529.6
|
|
Acquisitions (Note 8)
|
14.6
|
0.1
|
-
|
14.7
|
|
Additions
|
25.9
|
20.0
|
6.3
|
52.2
|
|
Depreciation charge in the
period
|
(60.2)
|
(14.6)
|
(5.9)
|
(80.7)
|
|
Remeasurement adjustments
|
84.4
|
(0.8)
|
-
|
83.6
|
|
Currency translation
|
(20.2)
|
(2.9)
|
(1.4)
|
(24.5)
|
|
As at 30 June 2023
|
484.1
|
65.1
|
25.7
|
574.9
|
|
|
|
|
|
|
|
Year ended 31 December
2023
|
|
|
|
|
|
|
Property
|
Motor
Vehicles
|
Equipment
|
Total
|
|
Net book value
|
£m
|
£m
|
£m
|
£m
|
|
Beginning of year
|
439.6
|
63.3
|
26.7
|
529.6
|
|
Acquisitions (Note 8)
|
15.9
|
0.3
|
-
|
16.2
|
|
Additions
|
87.5
|
37.1
|
12.1
|
136.7
|
|
Depreciation charge in the
year
|
(125.1)
|
(30.0)
|
(11.0)
|
(166.1)
|
|
Remeasurement adjustments
|
118.6
|
0.4
|
0.8
|
119.8
|
|
Currency translation
|
(16.5)
|
(2.3)
|
(1.1)
|
(19.9)
|
|
As at 31 December 2023
|
520.0
|
68.8
|
27.5
|
616.3
|
11.
Intangible assets
|
Six
months ended 30 June 2024
|
|
|
|
|
|
|
|
Goodwill
|
Customer
relationships
|
Brands
|
Technology
|
Software
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Cost
|
|
|
|
|
|
|
|
Beginning of period
|
2,020.7
|
2,494.5
|
48.5
|
9.3
|
116.8
|
4,689.8
|
|
Acquisitions (Note 8)
|
214.9
|
258.5
|
-
|
-
|
3.8
|
477.2
|
|
Disposal of business (Note
9)
|
(2.8)
|
(3.2)
|
-
|
-
|
(0.1)
|
(6.1)
|
|
Adjustment for hyperinflation
accounting1
|
4.8
|
0.9
|
-
|
-
|
-
|
5.7
|
|
Additions
|
|
|
|
|
6.5
|
6.5
|
|
Disposals
|
|
|
|
|
(0.5)
|
(0.5)
|
|
Transferred to assets held for
sale
|
(0.5)
|
(12.2)
|
-
|
-
|
(0.3)
|
(13.0)
|
|
Currency translation
|
(38.8)
|
(52.1)
|
(0.5)
|
(0.2)
|
(2.2)
|
(93.8)
|
|
End
of period
|
2,198.3
|
2,686.4
|
48.0
|
9.1
|
124.0
|
5,065.8
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
|
|
Beginning of period
|
11.8
|
1,343.7
|
7.4
|
1.8
|
83.0
|
1,447.7
|
|
Amortisation charge in the
period
|
|
67.5
|
1.6
|
0.8
|
5.3
|
75.2
|
|
Impairment charge in the
period
|
-
|
2.3
|
-
|
-
|
-
|
2.3
|
|
Disposal of business (Note
9)
|
-
|
(2.6)
|
-
|
-
|
(0.1)
|
(2.7)
|
|
Adjustment for hyperinflation
accounting1
|
|
0.7
|
-
|
-
|
-
|
0.7
|
|
Disposals
|
|
|
|
|
(0.5)
|
(0.5)
|
|
Transferred to assets held for
sale
|
-
|
(8.5)
|
-
|
-
|
(0.2)
|
(8.7)
|
|
Currency translation
|
(0.1)
|
(27.0)
|
-
|
(0.1)
|
(0.9)
|
(28.1)
|
|
End of period
|
11.7
|
1,376.1
|
9.0
|
2.5
|
86.6
|
1,485.9
|
|
|
|
|
|
|
|
|
|
Net book value at
30 June 2024
|
2,186.6
|
1,310.3
|
39.0
|
6.6
|
37.4
|
3,579.9
|
|
|
|
|
|
|
|
| |
|
Six months ended 30 June
2023
|
|
|
|
|
|
|
|
|
|
Goodwill
|
Customer
relationships
|
Brands
|
Technology
|
Software
|
Total
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
Cost
|
|
|
|
|
|
|
|
|
Beginning of period
|
1,944.4
|
2,349.0
|
39.7
|
9.5
|
107.4
|
4,450.0
|
|
|
Acquisitions (Note 8)
|
37.8
|
61.4
|
-
|
-
|
0.7
|
99.9
|
|
|
Adjustment for hyperinflation
accounting1
|
3.5
|
1.2
|
-
|
-
|
-
|
4.7
|
|
|
Additions
|
|
|
|
|
6.4
|
6.4
|
|
|
Disposals
|
|
|
|
|
(0.5)
|
(0.5)
|
|
|
Currency translation
|
(74.3)
|
(100.3)
|
(1.9)
|
(0.4)
|
(4.5)
|
(181.4)
|
|
|
End of period
|
1,911.4
|
2,311.3
|
37.8
|
9.1
|
109.5
|
4,379.1
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and
impairment
|
|
|
|
|
|
|
|
Beginning of period
|
12.8
|
1,258.1
|
4.8
|
0.4
|
80.0
|
1,356.1
|
|
|
Amortisation charge in the
period
|
|
62.5
|
1.7
|
1.4
|
4.7
|
70.3
|
|
|
Adjustment for hyperinflation
accounting1
|
-
|
0.9
|
-
|
-
|
-
|
0.9
|
|
|
Disposals
|
|
|
|
|
(0.5)
|
(0.5)
|
|
|
Currency translation
|
(1.2)
|
(54.8)
|
(0.2)
|
-
|
(3.1)
|
(59.3)
|
|
|
End of period
|
11.6
|
1,266.7
|
6.3
|
1.8
|
81.1
|
1,367.5
|
|
|
|
|
|
|
|
|
|
|
|
Net book value at
30 June 2023
|
1,899.8
|
1,044.6
|
31.5
|
7.3
|
28.4
|
3,011.6
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Goodwill
|
Customer
relationships
|
Brands
|
Technology
|
Software
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Cost
|
|
|
|
|
|
|
|
Beginning of year
|
1,944.4
|
2,349.0
|
39.7
|
9.5
|
107.4
|
4,450.0
|
|
Acquisitions (Note 8)
|
130.6
|
229.5
|
10.6
|
-
|
1.3
|
372.0
|
|
Adjustment for hyperinflation
accounting1
|
8.4
|
1.6
|
-
|
-
|
-
|
10.0
|
|
Additions
|
|
|
|
|
15.5
|
15.5
|
|
Disposals
|
|
|
|
|
(4.6)
|
(4.6)
|
|
Currency translation
|
(62.7)
|
(85.6)
|
(1.8)
|
(0.2)
|
(2.8)
|
(153.1)
|
|
End of year
|
2,020.7
|
2,494.5
|
48.5
|
9.3
|
116.8
|
4,689.8
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and
impairment
|
|
|
|
|
|
|
Beginning of year
|
12.8
|
1,258.1
|
4.8
|
0.4
|
80.0
|
1,356.1
|
|
Amortisation charge in the
year
|
|
130.2
|
4.0
|
1.4
|
9.4
|
145.0
|
|
Adjustment for hyperinflation
accounting1
|
-
|
1.2
|
-
|
-
|
-
|
1.2
|
|
Disposals
|
|
|
|
-
|
(4.6)
|
(4.6)
|
|
Currency translation
|
(1.0)
|
(45.8)
|
(1.4)
|
-
|
(1.8)
|
(50.0)
|
|
End of period
|
11.8
|
1,343.7
|
7.4
|
1.8
|
83.0
|
1,447.7
|
|
|
|
|
|
|
|
|
|
Net book value at
31 December 2023
|
2,008.9
|
1,150.8
|
41.1
|
7.5
|
33.8
|
3,242.1
|
1See Note 1 for further details.
Goodwill, customer relationships,
brands and technology intangible assets have been acquired as part
of business combinations. Further details of acquisitions made in
the period are set out in Note 8.
The Group has completed an
impairment assessment in relation to the carrying value of goodwill
as at 30 June 2024. Based on this assessment, no impairment was
identified and there were no reasonably possible changes in key
assumptions that would result in a material change to the carrying
amounts of goodwill in the next 12 months. The Group also
considered whether there were any indicators that individual
customer relationships, brands and technology intangible assets
were impaired. As a result, triggers were identified and impairment
tests were performed in relation to a small number of customer
relationship intangible assets. Based on our impairment testing,
the Group has recognised an impairment charge of £2.3m relating to
the customer relationships intangible asset of a foodservice
business within the Benelux and Germany cash generating
unit.
12.
Working Capital
|
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Inventories
|
1,633.3
|
1,519.9
|
1,621.1
|
|
Trade and other
receivables
|
1,662.4
|
1,605.3
|
1,578.5
|
|
Trade and other payables -
current
|
(2,303.6)
|
(2,217.0)
|
(2,071.6)
|
|
Add back net non-trading related
receivables and payables
|
28.1
|
28.8
|
30.1
|
|
Add back dividends
payable
|
167.6
|
151.8
|
-
|
|
|
1,187.8
|
1,088.8
|
1,158.1
|
See Note 17 for the cash flow
impact of movements in working capital which exclude the impact
from foreign exchange movements and acquisitions.
13.
Financial instruments
The following financial assets and
liabilities are held at fair value:
|
Financial assets
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Foreign exchange derivatives in cash
flow hedges
|
1.1
|
1.3
|
0.3
|
|
Foreign exchange derivatives in net
investment hedges
|
5.9
|
14.7
|
9.8
|
|
Other foreign exchange and interest
rate derivatives
|
7.0
|
15.9
|
1.7
|
|
Total derivative financial
assets
|
14.0
|
31.9
|
11.8
|
|
|
|
|
|
|
Money market funds
|
-
|
-
|
49.0
|
|
Total financial assets held at fair
value
|
14.0
|
31.9
|
60.8
|
|
|
|
|
|
|
Current derivative financial
assets
|
13.9
|
31.9
|
11.7
|
|
Non-current derivative financial
assets
|
0.1
|
-
|
0.1
|
|
Total derivative financial
assets
|
14.0
|
31.9
|
11.8
|
|
Financial liabilities
|
30.6.24
£m
|
30.6.23
£m
|
31.12.23
£m
|
|
Interest rate derivatives in fair
value hedges
|
(87.0)
|
(112.6)
|
(78.7)
|
|
Foreign exchange derivatives in cash
flow hedges
|
(0.9)
|
(1.5)
|
(2.8)
|
|
Foreign exchange derivatives in net
investment hedges
|
(9.8)
|
(6.8)
|
(16.6)
|
|
Other foreign exchange
derivatives
|
(1.1)
|
(3.9)
|
(6.3)
|
|
Total derivative financial
liabilities
|
(98.8)
|
(124.8)
|
(104.4)
|
|
|
|
|
|
|
Other payables*
|
(211.6)
|
(95.2)
|
(123.4)
|
|
Total financial liabilities held at
fair value
|
(310.4)
|
(220.0)
|
(227.8)
|
|
|
|
|
|
|
Current derivative financial
liabilities
|
(11.8)
|
(12.2)
|
(25.7)
|
|
Non-current derivative financial
liabilities
|
(87.0)
|
(112.6)
|
(78.7)
|
|
Total derivative financial
liabilities
|
(98.8)
|
(124.8)
|
(104.4)
|
* The Group has restated
comparatives for the six months to 30 June 2023 and year to 31
December 2023 to remove minority options - retention payments of
former owners of £36.2m and £38.2m respectively, from Other
payables held at fair value as these are accounted for in line with
IAS19 'Employee benefits'.
Financial assets and liabilities
stated as being measured at fair value in the tables above
(including all derivative financial instruments), with the
exception of other payables, have carrying amounts where the fair
value is, and has been throughout the period, a level two fair
value measurement. Level two fair value measurements use inputs
other than quoted prices that are observable for the relevant asset
or liability, either directly or indirectly. The fair values of
financial assets and liabilities stated at level two fair value
have been determined by discounting expected future cash flows,
translated at the appropriate balance sheet date exchange rates and
adjusted for counterparty or own credit risk as applicable. Other
payables measured at fair value relate to earn outs and options on
businesses acquired. This is a level three fair value which is
initially measured based on the expected future profitability of
the businesses acquired at the acquisition date and subsequently
reassessed at each reporting date based on the most recent data
available on the expected profitability of the businesses acquired.
These balances are sensitive to a change in the expected
profitability of the businesses acquired. A 1% increase in the
expected profitability of the relevant businesses acquired would
result in an increase to other payables of £6.3m and 1% decrease in
the expected profitability would result in a decrease of
£6.3m.
There were no transfers between
levels for recurring fair value measurements during the
period.
The fair values of all financial
instruments approximate to their book values, with the exception of
the US private placement notes and the senior bonds which are held
at amortised cost. The fair value of all US private placement notes
which are held at amortised cost, using market prices at 30 June
2024, was £749.6m (30 June 2023: £859.6m; 31 December 2023:
£875.9m), compared to a carrying value of £797.3m (30 June 2023:
£925.5m; 31 December 2023: £925.1m). The fair value of the senior
bonds which are held at amortised cost, using market prices at 30
June 2024, was £615.5m (30 June 2023: £567.5m, 31 December 2023:
£615.8m) compared to a carrying value of £615.2m (30 June 2023:
£588.4m, 31 December 2023: £621.9m).
14.
Lease liabilities
The Group leases certain property,
plant, equipment and vehicles under non-cancellable operating lease
agreements. These leases have varying terms and renewal
rights.
|
|
Six months
|
Six
months
|
Year
to
|
|
|
to 30.6.24
|
to
30.6.23
|
31.12.23
|
|
Movement in lease liabilities
|
£m
|
£m
|
£m
|
|
Beginning of period
|
664.5
|
569.9
|
569.9
|
|
Acquisitions (Note 8)
|
62.9
|
14.7
|
16.2
|
|
New leases
|
96.5
|
52.2
|
136.7
|
|
Interest charge in the
period
|
18.0
|
13.1
|
28.6
|
|
Payment of lease
liabilities
|
(103.2)
|
(91.9)
|
(188.0)
|
|
Remeasurement adjustments
|
36.3
|
84.9
|
122.1
|
|
Transfer to asset held for
sale
|
(0.4)
|
-
|
-
|
|
Currency translation
|
(6.4)
|
(25.2)
|
(21.0)
|
|
End
of period
|
768.2
|
617.7
|
664.5
|
|
|
|
|
|
|
Ageing of lease
liabilities:
|
|
|
|
|
Current lease liabilities
|
179.1
|
147.7
|
152.1
|
|
Non-current lease
liabilities
|
589.1
|
470.0
|
512.4
|
|
End
of period
|
768.2
|
617.7
|
664.5
|
15.
Cash, cash equivalents and overdrafts and net
debt
|
|
30.6.24
|
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Cash at bank and in hand
|
1,381.4
|
1,481.1
|
1,377.1
|
|
Money market funds
|
-
|
-
|
49.0
|
|
Cash and cash equivalents
|
1,381.4
|
1,481.1
|
1,426.1
|
|
Bank overdrafts
|
(1,062.3)
|
(887.5)
|
(874.2)
|
|
Cash, cash equivalents and overdrafts
|
319.1
|
593.6
|
551.9
|
|
Interest bearing loans and
borrowings - current liabilities
|
(475.4)
|
(131.8)
|
(130.0)
|
|
Interest bearing loans and
borrowings - non-current liabilities
|
(1,090.7)
|
(1,386.6)
|
(1,417.1)
|
|
Derivatives managing interest rate
risk and currency profile of the debt
|
(85.2)
|
(95.6)
|
(90.3)
|
|
Net
debt excluding lease liabilities
|
(1,332.2)
|
(1,020.4)
|
(1,085.5)
|
|
Lease liabilities
|
(768.2)
|
(617.7)
|
(664.5)
|
|
Total net debt including lease liabilities
|
(2,100.4)
|
(1,638.1)
|
(1,750.0)
|
The cash at bank and in hand and
bank overdrafts amounts included in the table above include the
amounts associated with the Group's cash pool. The cash pool
enables the Group to access cash in its subsidiaries to pay down
the Group's borrowings. The Group has the legal right of
set-off of balances within the cash pool which is an enforceable
right. The cash at bank and in hand and bank overdrafts figures net
of the amounts in the cash pool are disclosed below for
reference:
|
|
30.6.24
|
30.6.23
|
31.12.23
|
|
|
£m
|
£m
|
£m
|
|
Cash at bank and in hand net of
amounts in the cash pool
|
354.7
|
621.0
|
520.8
|
|
Money market funds
|
-
|
-
|
49.0
|
|
Bank overdrafts net of amounts in
the cash pool
|
(35.6)
|
(27.4)
|
(17.9)
|
|
Cash, cash equivalents and overdrafts
|
319.1
|
593.6
|
551.9
|
16.
Movement in net debt
|
|
Cash, cash equivalents and
overdrafts
|
Interest bearing loans and
borrowings
|
Derivatives
|
Net debt
|
|
Six
months ended 30 June 2024
|
£m
|
£m
|
£m
|
£m
|
|
Beginning of period excluding lease
liabilities
|
551.9
|
(1,547.1)
|
(90.3))
|
(1,085.5)
|
|
Cash flow excluding movements in
other components of net debt
|
(179.3)
|
-
|
-
|
(179.3)
|
|
Interest paid excluding interest on
lease liabilities
|
(63.5)
|
-
|
-
|
(63.5)
|
|
Increase in borrowings
|
148.1
|
(148.1)
|
-
|
-
|
|
Repayment of borrowings
|
(130.9)
|
130.9
|
-
|
-
|
|
Receipts on settlement of foreign
exchange contracts
|
8.6
|
-
|
(8.6)
|
-
|
|
Net cash outflow
|
(217.0)
|
(17.2)
|
(8.6)
|
(242.8)
|
|
Non-cash movement in debt
|
-
|
10.1
|
(8.5)
|
1.6
|
|
Loans and borrowings recognised on
acquisition
|
-
|
(5.6)
|
-
|
(5.6)
|
|
Realised gain on foreign exchange
contracts
|
-
|
-
|
8.6
|
8.6
|
|
Currency translation
|
(15.8)
|
(6.3)
|
13.6
|
(8.5)
|
|
End
of period excluding lease liabilities
|
319.1
|
(1,566.1)
|
(85.2)
|
(1,332.2)
|
|
Lease liabilities
|
-
|
(768.2)
|
-
|
(768.2)
|
|
End
of period including lease liabilities
|
319.1
|
(2,334.3)
|
(85.2)
|
(2,100.4)
|
|
|
|
|
|
|
|
|
Cash,
cash equivalents and overdrafts
|
Interest
bearing loans and borrowings
|
Derivatives
|
Net
debt
|
|
Six months ended 30 June
2023
|
£m
|
£m
|
£m
|
£m
|
|
Beginning of period excluding lease
liabilities
|
678.1
|
(1,735.0)
|
(103.2)
|
(1,160.1)
|
|
Cash flow excluding movements in
other components of net debt
|
135.3
|
-
|
-
|
135.3
|
|
Interest paid excluding interest on
lease liabilities
|
(51.4)
|
-
|
-
|
(51.4)
|
|
Increase in borrowings
|
5.2
|
(5.2)
|
-
|
-
|
|
Repayment of borrowings
|
(159.1)
|
159.1
|
-
|
-
|
|
Receipts on settlement of foreign
exchange contracts
|
12.0
|
-
|
(12.0)
|
-
|
|
Net cash (outflow)/inflow
|
(58.0)
|
153.9
|
(12.0)
|
83.9
|
|
Non-cash movement in debt
|
-
|
12.3
|
(12.7)
|
(0.4)
|
|
Realised gain on foreign exchange
contracts
|
-
|
-
|
12.0
|
12.0
|
|
Currency translation
|
(26.5)
|
50.4
|
20.3
|
44.2
|
|
End of period excluding lease
liabilities
|
593.6
|
(1,518.4)
|
(95.6)
|
(1,020.4)
|
|
Lease liabilities
|
-
|
(617.7)
|
-
|
(617.7)
|
|
End of period including lease
liabilities
|
593.6
|
(2,136.1)
|
(95.6)
|
(1,638.1)
|
|
|
Cash,
cash equivalents and overdrafts
|
Interest
bearing loans and borrowings
|
Derivatives
|
Net
debt
|
|
Year ended 31 December
2023
|
£m
|
£m
|
£m
|
£m
|
|
Beginning of year excluding lease
liabilities
|
678.1
|
(1,735.0)
|
(103.2)
|
(1,160.1)
|
|
Cash flow excluding movements in
other components of net debt
|
143.1
|
-
|
-
|
143.1
|
|
Interest paid excluding interest on
lease liabilities
|
(107.6)
|
-
|
-
|
(107.6)
|
|
Repayment of borrowings
|
(159.5)
|
159.5
|
-
|
-
|
|
Receipts on settlement of foreign
exchange contracts
|
21.6
|
-
|
(21.6)
|
-
|
|
Net cash (outflow)/inflow
|
(102.4)
|
159.5
|
(21.6)
|
35.5
|
|
Non-cash movement in debt
|
-
|
(20.8)
|
21.5
|
0.7
|
|
Realised gain on foreign exchange
contracts
|
-
|
-
|
21.6
|
21.6
|
|
Currency translation
|
(23.8)
|
49.2
|
(8.6)
|
16.8
|
|
End of year excluding lease
liabilities
|
551.9
|
(1,547.1)
|
(90.3)
|
(1,085.5)
|
|
Lease liabilities
|
-
|
(664.5)
|
-
|
(664.5)
|
|
End of year including lease
liabilities
|
551.9
|
(2,211.6)
|
(90.3)
|
(1,750.0)
|
17. Cash flow from operating activities
The tables below give further
details on the adjustments for depreciation and software amortisation, other
non-cash items and the working capital movement shown in the
Condensed consolidated cash flow statement:
|
Depreciation and software amortisation
|
Six months
to 30.6.24
£m
|
Six
months
to
30.6.23
£m
|
Year
to
31.12.23
£m
|
|
Depreciation of right-of-use
assets
|
89.1
|
80.7
|
166.1
|
|
Other depreciation and software
amortisation
|
23.0
|
19.8
|
41.1
|
|
|
112.1
|
100.5
|
207.2
|
|
|
|
|
|
|
Other non-cash items
|
Six months
to 30.6.24
£m
|
Six
months
to
30.6.23
£m
|
Year
to
31.12.23
£m
|
|
Share based payments
|
8.5
|
7.6
|
15.4
|
|
Provisions
|
(1.4)
|
(5.7)
|
(13.1)
|
|
Retirement benefit
obligations
|
1.0
|
(4.4)
|
(3.5)
|
|
Hyperinflation accounting
adjustments
|
4.0
|
2.2
|
2.1
|
|
Other
|
1.3
|
3.5
|
5.6
|
|
|
13.4
|
3.2
|
6.5
|
|
Working capital movement
|
Six months
to 30.6.24
£m
|
Six
months
to
30.6.23
£m
|
Year
to
31.12.23
£m
|
|
Decrease in inventories
|
45.4
|
173.2
|
108.1
|
|
Increase in trade and other
receivables
|
(38.9)
|
(87.5)
|
(9.9)
|
|
Decrease in trade and other
payables
|
(23.3)
|
(113.1)
|
(126.6)
|
|
|
(16.8)
|
(27.4)
|
(28.4)
|
18.
Related party disclosures
As disclosed in the Annual Report
for the year ended 31 December 2023, the Group has identified the
directors of the Company, their close family members, the Group's
defined benefit pension schemes and its key management as related
parties for the purpose of IAS 24 'Related Party Disclosures'.
There have been no material transactions with those related parties
during the six months ended 30 June 2024. Details of the relevant
relationships with those related parties will be disclosed in the
Annual Report for the year ending 31 December 2024. All
transactions with subsidiaries are eliminated on
consolidation.
Responsibility statement of the directors in respect of the
financial report for the six months ended 30 June
2024
The directors confirm to the best
of their knowledge that these condensed interim financial
statements have been prepared in accordance with IAS 34 'Interim
Financial Reporting' as issued by the International Accounting
Standards Board ('IASB'), UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
· an
indication of important events that have occurred during the first
six months and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
· material related-party transactions in the first six months
and any material changes in the related-party transactions
described in the last annual report.
The directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
UK governing the preparation and dissemination of a condensed set
of financial statements may differ from legislation in other
jurisdictions.
For and on behalf of the
Board
|
|
|
|
|
|
|
Frank van Zanten
Chief Executive Officer
|
Richard Howes
Chief Financial Officer
|
|
27 August 2024
|
|
Independent review report to Bunzl
plc
Report on the condensed consolidated
interim financial statements
Our conclusion
We have reviewed Bunzl plc's
condensed consolidated interim financial statements (the "interim
financial statements") in the financial report of Bunzl plc for the
6 month period ended 30 June 2024 (the "period").
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as issued by the IASB, UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements
comprise:
·
the Condensed consolidated balance sheet as at 30
June 2024;
·
the Condensed consolidated income statement and
the Condensed consolidated statement of comprehensive income for
the period then ended;
·
the Condensed consolidated cash flow statement
for the period then ended;
·
the Condensed consolidated statement of changes
in equity for the period then ended; and
·
the explanatory notes to the interim financial
statements.
The interim financial statements
included in the financial report of Bunzl plc have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as issued by the IASB, UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the financial report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the interim financial
statements.
Conclusions relating to going
concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the Group to cease to continue as a going
concern.
Responsibilities for the interim
financial statements and the review
Our responsibilities and those of
the directors
The financial report, including
the interim financial statements, is the responsibility of, and has
been approved by the directors. The directors are responsible for
preparing the financial report in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the financial report,
including the interim financial statements, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do
so.
Our responsibility is to express a
conclusion on the interim financial statements in the financial
report based on our review. Our conclusion, including our
Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the Company for the
purpose of complying with the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent
in writing.
PricewaterhouseCoopers
LLP
Chartered Accountants
London
27 August 2024
