Preliminary Results
Bunzl PLC
23 February 2004
Monday 23 February 2004
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2003
Bunzl plc, the international distribution and outsourcing Group, today announces
its preliminary results for the year ended 31 December 2003.
• Sales of continuing operations were £2,728.2 million (2002: £2,673.6 million),
up 6% at constant exchange rates
• Operating profit of continuing operations before goodwill was £214.1 million
(2002: £204.8 million), up 10% at constant exchange rates
• Profit before tax, goodwill and 2002 exceptionals was £212.3 million
(2002: £207.3 million), up 8% at constant exchange rates
• Profit before tax was £194.6 million (2002: £195.3 million), up 5% at
constant exchange rates
• Adjusted earnings per share were 31.3p (2002: 29.7p), up 11% at constant
exchange rates
• Dividend for the year up 8% to 12.1p
• Outsourcing Services sales up 7% and operating profit up 10% at constant
exchange rates
• Filtrona sales up 6% and operating profit up 11% at constant exchange rates
Commenting on today's results, Anthony Habgood, Chairman of Bunzl, said:
'These are good results against a backdrop of mixed economic conditions around
the world. They reflect strong operating performance, good organic volume growth
and incremental acquisition activity.
'Volume growth in our major markets, our strong positions in those markets and
our opportunities to make acquisitions give us confidence that the underlying
prospects of the Group are good.'
Enquiries:
Bunzl plc Finsbury
Anthony Habgood, Chairman Roland Rudd
David Williams, Finance Director Morgan Bone
Tel: 020 7495 4950 Tel: 020 7251 3801
RESULTS
Against the backdrop of mixed economic conditions around the world, the Group
again produced good results due to strong operating performance and underlying
organic volume growth combined with acquisition activity. The movement in the
dollar was unfavourable and, although the euro strengthened, overall currency
movements reduced the reported growth rate of sales by about 4% and that of
profits and earnings by 5 - 6%. Price deflation also had a negative impact on
the growth of both sales and profits.
Sales of continuing operations were £2,728.2 million (2002: £2,673.6 million),
up 6% at constant exchange rates, and operating profit of continuing operations
was £196.4 million (2002: £189.0 million), a rise of 10% at constant exchange
rates. Including discontinued operations, total sales were £2,728.2 million
(2002: £2,835.3 million), flat at constant exchange rates, while total operating
profit was £196.4 million (2002: £196.4 million), up 5% at constant exchange
rates. Profit before tax, goodwill amortisation and 2002 exceptional items was
£212.3 million (2002: £207.3 million), an increase of 8% at constant exchange
rates. Profit before tax was £194.6 million (2002: £195.3 million), 5% ahead at
constant exchange rates. Earnings per share were 27.4p (2002: 27.1p), up 7% at
constant exchange rates, while adjusted earnings per share, after eliminating
goodwill amortisation and 2002 exceptionals, were 31.3p (2002: 29.7p), a rise of
11% at constant exchange rates.
After a cash outflow for acquisitions of £36 million, a cash inflow from
disposals of £10 million and a spend of £92 million on buying back shares on the
market, net debt was reduced to £97 million (2002: £106 million). This was the
result of the underlying businesses continuing to generate cash from operations
and dollar denominated debt having a lower sterling value. Gearing fell to 21.0%
from 22.3%.
DIVIDEND
The Board has decided to increase the final dividend to 8.25p (2002: 7.55p).
This brings the total dividend for the year to 12.1p (2002: 11.2p), an increase
of 8%. Shareholders will again have the opportunity to participate in our
dividend reinvestment plan.
BOARD AND MANAGEMENT
Bunzl further strengthened its independent Board with the appointment of Michael
Roney as a non-executive director in June. Michael is President of Goodyear's
operations in Europe and brings great experience of distribution, retail and
manufacturing throughout Europe, Asia and South America. We welcome him to the
Board.
Paul Lorenzini will be retiring as Chief Executive of Outsourcing Services in
North America and from the Board in July 2004. Paul was one of the founders of
PCI Mac-Pak in 1970 which Bunzl acquired in 1983.
Since 1986 Paul has served as President and then CEO of Bunzl Distribution USA
along with being President of Bunzl USA. During his stewardship, the business
has grown from 17 to 73 locations in North America and sales have increased from
$400 million to approximately $2.5 billion in 2003. Profits during this same
period increased over ten-fold. We are now the largest and most successful
supplier of supermarket and food service packaging materials in North America.
Paul will have completed 21 years of outstanding service with Bunzl and will
continue to be involved as Chairman Emeritus of Bunzl USA in recognition of his
extraordinary contribution to the development and success of Bunzl and his
invaluable service over many years.
Paul Lorenzini's successor as Chief Executive of Outsourcing Services in North
America will be Patrick Larmon. A CPA and an MBA, Pat is currently President and
Chief Operating Officer of Outsourcing Services in North America. Over the past
14 years Pat has served with great success in many senior management positions
including regional Vice President of the South West Region, Vice President of
Finance and Administration, Executive Vice President of Procurement and
President of the Western Division. We are extremely fortunate to have someone
of Pat's ability and experience to take over in this important executive
position.
STRATEGY AND STRUCTURE
Following the disposal of the last of Bunzl's paper interests in July 2002, the
Company was reorganised into two business areas, Outsourcing Services and
Filtrona, both of which are focused on areas where we have or can develop real
competitive advantage on an international scale and which have some organic and
acquisition growth opportunities. Both areas also fit with our focus on
providing business to business consumables, often on an outsourced basis, and
are becoming increasingly service oriented.
Filtrona constitutes a small number of international niche businesses in supply
and light manufacture with a number of technical and market overlaps.
Outsourcing Services is a more uniform business with international overlaps of
customers, suppliers, technology and sourcing. As the Outsourcing Services
business in Europe and Australasia has grown from virtually nothing ten years
ago to about a third of our total Outsourcing Services business, we have decided
that from our interim results in 2004 we will treat this business as a separate
business segment.
ACQUISITIONS
We spent £36 million on acquisitions during 2003. In February we strengthened
our position supplying the North American food processor industry with the
acquisition of Enterprise from ConAgra Foods. Based in Dallas, Enterprise had
sales in the year to May 2002 of $24 million. It broadens the geographic
coverage of our expanding food processor supplies business in North America and
strengthens our position with major customers. In October we acquired the
Fibertec business of Baumgartner. Fibertec, located in Switzerland, is engaged
in the development, manufacture and sale of cigarette filters and capillary
reservoirs. The business had sales in 2002 of CHF40 million and broadened our
customer base while also enhancing our product offering. Also in October we
purchased MultiLine, a distributor of a wide range of consumables to the Danish
hotel, restaurant and catering industries. With sales in 2002 of DKK386 million,
MultiLine is a logical extension of our Outsourcing Services business in
Denmark, greatly strengthening our position there, particularly in the hotel
and catering supplies market. In December we acquired Prolix Packaging in the
US and O'Mahony in Ireland, both suppliers largely to the supermarket industry.
Prolix had sales in 2002 of $11 million focused on the Chicago market and
O'Mahony, based in Cork, had sales in 2002/3 of €11 million. In February 2004
we entered into an agreement to purchase Skiffy, a Dutch based company with
particular expertise in the supply of small nylon parts for protection and
finishing applications with sales in 2002/3 of €12 million.
SHARE BUY BACK
In late February the Board instituted a share buy back programme. Shares have
been bought on the market and have then been cancelled thus reducing the overall
number of shares in issue. The cost of the buy back was £91.7 million resulting
in the cancellation of 21.3 million shares at an average price of £4.31 per
share. These purchases were consistent with the Board's continuing overall
capital management strategy. This strategy seeks to maintain an appropriate
balance sheet structure taking into account completed and prospective
acquisitions and disposals.
PROSPECTS
Against a background of mixed economic conditions in 2003, our major businesses
again showed their strength by producing good underlying volume growth which was
supplemented by incremental acquisition activity. Overall Group progress
year-on-year was impacted by the adverse movement of the dollar, price deflation
and the disposal of Paper Distribution.
Looking forward, we see volume growth continuing. The dilutionary effect of the
sale of Paper Distribution will no longer be present in 2004 and year-on-year
price deflation, which moderated through 2003, should fall further if the
current announced price increases in plastic products in the US are fully
implemented. On the other hand the sterling/dollar rate, which averaged $1.51
in 2002 and $1.64 in 2003, is currently $1.87. If this dollar weakness
persists, it will negatively impact the Group's sterling results as dollar
sales and profits are translated at the new rate.
The combination of volume growth in our major markets, our strong positions in
those markets and our opportunities to make acquisitions gives us confidence
that the underlying prospects of the Group are good and that, at constant
exchange rates, the Group will continue to develop satisfactorily.
OPERATING PERFORMANCE
The Group operates in many currency zones and, in this year of unusual currency
volatility, the operations are reviewed below at constant exchange rates to
remove the distortionary impact of these significant currency swings. The
following table reconciles the annual growth rates of sales and operating profit
before goodwill amortisation as reported in sterling with those at constant
exchange rates:
Actual Exchange Rates Constant Exchange Rates
Sales Operating Sales Operating
% Growth Profit % Growth Profit
% Growth % Growth
Outsourcing +2 +4 +7 +10
Services
Filtrona +2 +6 +6 +11
Continuing Operations +2 +5 +6 +10
Margin on continuing operations before goodwill amortisation rose from 7.7% to
7.8% while Group margin rose from 7.5% to 7.8% with the additional increase
resulting from the disposal of the lower margin Paper Distribution business area
in July 2002. Group return on average capital rose to 43.0%.
Outsourcing Services
Operating across North America, Europe and Australasia, Bunzl is the leading
supplier of a range of products including outsourced food packaging, disposable
supplies and cleaning and safety products for supermarkets, redistributors,
caterers, food processors, hotels, contract cleaners, non-food retail and other
users.
Volume growth and the successful integration of acquisitions saw Outsourcing
Services progress well with sales increasing by 7% at constant exchange rates
despite price deflation. Operating profits rose by 10% at constant exchange
rates assisted by our focus on greater efficiencies and control of operating
costs.
With trading conditions continuing to be challenging, our specialist knowledge
and experience in providing cost effective outsourced solutions to our customers
and our ability to integrate selective acquisitions have enabled us to extend
the scope of our operations and continue to offer innovative supply programmes
to add value for new and existing customers.
North America
The North American business grew dollar sales and profits in a tough economic
and competitive environment. Price deflation continued to have an impact due to
manufacturers' overcapacity in several major product lines. Customer
consolidation has also had an effect on our business particularly in the
supermarket industry. The large national operators have penetrated the smaller
markets, forcing the regional and local retailers to sell, consolidate or
specialise.
Although the largest customer group for this business remains supermarkets, the
majority of new business with new customers was a result of sales gains in the
redistribution, processor and janitorial/sanitation (jan/san) businesses. Sales
initiatives in the foodservice category resulted in expanded business at several
national companies. We have been able to demonstrate our ability to provide
disposable non-food items efficiently enabling these companies to use their
space for higher dollar items. We have also secured additional business in
non-food retail with the addition of several accounts during 2003. We plan to
pursue more such accounts in 2004 as new opportunities become available.
We provide a wide range of disposable products to customers in all of our
businesses that include plastic and paper packaging items, janitorial supplies,
non-food retail products and operating plant supplies. Our focus is on finding
packaging solutions for our customers that will generate additional sales for
the redistribution and supermarket areas and operational efficiencies for the
processor and jan/san markets. In an effort to increase our competitiveness and
to find new innovative products, we have invested substantial time and effort
into our import initiative. Through this program, we have been able to source
quality products from reliable manufacturers that keep us on the leading edge of
finding solutions for our customers. In 2003 our imports approximately doubled.
In addition to imports, we have expanded our private label program, Prime
Source, to many new product lines that has resulted in new sales opportunities
and more operational efficiencies.
We remain the largest distributor of these products in North America, serving
all 50 states, Canada, Mexico, and the Caribbean from 73 locations. Using a
fleet of more than 350 trucks, we are able to deliver thousands of different
items to customers located across the geographical area. With this coverage, we
are able to provide product and logistics solutions to local, regional and
national customers utilising a total program concept. Our sophisticated IT
platform, which is identical in every one of our locations, allows us to provide
a consistent and controlled program that our customers appreciate.
As the largest distributor of these products to supermarkets, we service
national, regional and local chains. Our experience in this area, along with the
product lines and customer relationships, give us the opportunity to develop
true long term partnerships for the purpose of providing the most economical in-
store packaging program that contributes to better product presentation and
ultimately increased sales. During 2003 we were able to renew several long term
contracts with chains and wholesalers committed to this concept. We also
acquired Prolix, a specialised supplier in the Chicago region.
Redistribution, including jan/san products, continues to grow and present us
with new opportunities. As the costs of transportation and warehousing rise for
manufacturers, our value as a redistributor continues to increase. We provide an
opportunity to the small distributor to reduce their capital investment,
increase their inventory turns and provide more products to their customers
while maximising their operational efficiencies. With the acquisition of Saxton
in late 2002, we have expanded our jan/san program across our business with the
addition of their product lines. This will continue to be an emphasis in the
years ahead.
Food processors, including customers that process and package meat, poultry,
produce, bakery and other items, continue to be our fastest growing area. We are
the only national distributor able to provide the packaging products, plant
operating supplies and janitorial and cleaning supplies through one order and
delivery. This is an advantage as our customers grow, due to their space
requirements and need for specialists who can provide them with an array of
packaging solutions and safety and cleaning products needed to run their
businesses. We further strengthened our position in this market in February 2003
with the purchase of Enterprise in Dallas.
Operating costs improved again in 2003. As the economic environment has made it
difficult to achieve substantial increases in sales and gross margin dollars, we
have continued to improve operations and increase our efficiencies. We have
enhanced our internal IT system, improved our facilities and reduced and
consolidated our delivery routes and further standardised procedures in
warehousing, customer service and purchasing. We have also worked with our
vendors and customers to eliminate extra costs in the supply chain. This will
continue as we move forward into 2004.
Europe and Australasia
In the seven countries that we operate in today, the UK, Ireland, Germany, the
Netherlands, Denmark, Australia and New Zealand, as well as a number of
countries that we export into, we continued to show good progress despite
testing economic conditions. We provide our customers with a 'one-stop-shop' for
all their purchasing, distribution and store or outlet service needs. We also
provide management information to help our customers better control their
expenditure on the broad range of consumable products that we typically supply.
By outsourcing the management of this supply chain to Bunzl, customers are able
to reduce their internal costs of operation and achieve efficiencies by
concentrating on their own core businesses.
During 2003 growth has again come from acquisitions, new contract wins and the
expansion of our product range offsetting the impact of deflation, particularly
in the retail market.
In addition to acquisitions during the period, including MultiLine in Denmark
and O'Mahony in Ireland, we achieved new contract wins across a broad spectrum
of customers in our target markets: contract caterers, contract cleaners,
facilities management groups, supermarket/retail chains and the healthcare
sector. Moreover we have been successful in increasing our penetration with
local customers in many of the markets that we serve. Of particular note was the
fact that we were successful in gaining three new multi-year contracts, a longer
timeframe than usual in our industry, which demonstrates our customers'
confidence in Bunzl as a reliable partner. The first such contract covers
several countries in Northern Europe for the supply of all non-food consumables
to an international catering group. The second covers the provision of all
in-store consumables for a leading UK non-food retail chain reflecting our
expertise in tailoring supply programmes to meet the specific requirements of
retail customers. The third covers the provision of all light catering equipment
for a catering group in the UK.
Focused expansion of our product range to capture more business with individual
customers has been a feature of our development for several years. The range
extension into light catering equipment, largely as a result of the acquisitions
of Lockhart and McLaughlin in 2002, has proved beneficial with several customers
in the UK, especially in hotel and catering supplies, and provides the base for
potential future expansion into other countries where we are also strong with
such customers.
As the leading independent vending operator in the UK, Vending Services has also
been successful in generating organic sales growth from winning contracts in the
financial services and retail sectors in the UK. Nevertheless 2003 has been a
challenging environment with consumption in the City of London specifically, and
industry in general, reduced due to staff cutbacks.
Adding new product categories to its core range helped our specialist healthcare
supply business, Shermond, to show strong organic growth. It is pleasing also to
report that the healthcare sector is a successful area of development in a
number of countries including the Netherlands, Ireland and Australia.
Organic growth and the integration of recent acquisitions also drove the
successful development of our cleaning and safety supplies businesses. We
secured organic growth by winning new contracts and developing our product range
with existing customers. A growing number of products are now sourced
internationally and developed under our own brand names. A number of the key UK
ranges have been successfully introduced into the Australian market following
the creation of a dedicated Bunzl Safety sales resource in Australia. In the UK
the Darenas business, acquired at the end of 2002, is in the process of being
fully integrated with the core business in order to reduce our cost base and
establish a common platform from which to grow in 2004.
Our activities during 2003 have been focused on integrating new acquisitions
particularly in Australia, Denmark, Ireland and the UK, improving performance
and enhancing returns. We have supplemented these activities with investment in
new, more efficient warehouse operations and standardised IT systems. During the
last two years we have opened new, state-of-the-art warehousing facilities in
the Netherlands, Germany and the UK and in 2004 we will open new facilities in
the UK, Denmark, Ireland, Australia and New Zealand. We are also implementing
our standard IT systems into the acquisitions we have made and will continue to
drive this process forward in 2004. Finally we have established a Group Purchasing
function to enhance our leverage across countries and better co-ordinate our
international sourcing activities. These initiatives provide the foundations for
continued expansion and development from an efficient and effective cost base.
Filtrona
Filtrona is a world leading supplier of outsourced cigarette filters, ink
reservoirs and other bonded fibre products, protection and finishing products,
self-adhesive tear tapes and certain security products. It is also a leading
extruder of custom plastic profiles.
At constant exchange rates, sales in Filtrona rose by 6% and operating profits
increased by 11% despite the continuation of a challenging manufacturing
environment which again was most noticeable in our North American businesses.
Filtrona now operates from 38 production facilities in 14 countries engaged in
flexible light manufacture and service oriented supply of low unit value items
to customers throughout the world. Filtrona occupies leadership positions in
small focused international markets, or niche segments of larger markets, where
the development of quality, differentiated positions is possible through
consistent investment and dedication to delivering superior customer value and
service.
The underlying performance of our outsourced filters businesses continued its
robust trend, with volumes ahead in all regions and a particularly encouraging
performance in Asia, although headline results were impacted by currency
translation. The business continues to benefit from increased consumer demand
for brands with low tar and special filters, often including charcoal, driven by
changing consumer tastes and ever stricter legislative requirements. While it is
now possible for manufacturers to self-manufacture some of the simpler carbon
filters due to them becoming standard on more popular brands, the principal
industry players continue to favour outsourcing for a major proportion of their
requirements. There is also a growing interest in more complex and innovative
filters, which can reduce particular constituents within cigarette smoke, and
Filtrona is well placed to assist with our range of technologies, experience and
know-how. Two such products were launched in November at the industry's leading
exhibition, Tabexpo, in Barcelona. The acquisition of Baumgartner's Fibertec
business was completed in October and this will have a positive impact on our
filters and fibres businesses during 2004 as we capitalise on the additional
customers, volumes and complementary technologies derived from this important
strategic step. The changing dynamics of the market have led to the commencement
of a consultation process with the local workforce regarding the future of our
northern Italian production facility.
Our fibres business based in Richmond, Virginia and Reinbek, Germany sells
reservoirs and wicking devices manufactured using bonded fibre technology for
products including pens and printers, medical device components and household
items. The continued focus on the development of new technologies, applications
and geographic coverage has contributed to excellent growth this year. The
business has been renamed Filtrona Fibertec, recognising both the applicability
of the name to our fibres operations and the continuity from the Baumgartner
Fibertec acquisition.
Our self-adhesive tear tape business continues to be the world's leading
supplier and made particularly good progress in Asia, where supply to an
important new customer in Japan began, and the Americas, assisted by the start
up of film coating at our Richmond facility. Volumes of both standard self-
adhesive tear tape and tear tape with value added features continued their
strong growth trend. The use of tear tape as a medium for brand promotion and
security purposes utilising various printing techniques to produce multi-
coloured images and text continued to develop. The application of extrusion
coated films for security and industrial uses is also showing encouraging
results. We continue to invest in this business and a new 10 station printer at
our Nottingham site is allowing us to expand the range of specialist products
and services we are able to offer our customers.
Our protection and finishing business continued to face weakness in many of its
core industrial markets, especially in the US, and rising polymer prices were
also a drag on performance. In spite of this, the business as a whole was ahead
of last year as Europe and the oil sector produced particularly strong results.
The policy of building the distribution network, strengthening the product range
further with the addition of many new lines and increasing the sophistication of
its marketing programmes continues to have a positive impact on the performance
of the business. The addition of Skiffy in 2004 will further strengthen this
business with its particular expertise in the supply of nylon parts.
The sales of our European extrusion business picked up strongly in the second
half of the year after a slow start which reflected the continued difficulties
in the European manufacturing sector. This business continues to build its
position in export markets where many opportunities exist for further
development and growth. The US business also experienced improved trading
conditions in the second half of the year, although certain customer segments,
such as aerospace, remain depressed. Other segments including medical, traffic
control, lighting and refrigeration saw good growth reflecting the business's
focus on proprietary products and differentiated process technologies. Measures
continued to be taken to reduce unit costs and to grow our business in Mexico
where future prospects remain positive.
Globalpack, our Brazilian operation which produces packaging for the South
American toiletries and cosmetics industries, had another excellent year. Sales
and profits were again well ahead with the company's rapidly developing
expertise in roll-on deodorant packaging items proving especially beneficial.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2003
Growth
2002 Actual Constant
2003 *Restated Exchange Exchange
£m £m Rates Rates
Sales
Existing businesses 2,707.0 2,673.6
Acquisitions 21.2
Continuing operations 2,728.2 2,673.6 +2% +6%
Discontinued operations - 161.7
Total sales 2,728.2 2,835.3
Operating profit
Existing businesses 195.7 189.0
Acquisitions 0.7
Continuing operations 196.4 189.0 +4% +10%
Discontinued operations - 7.4
Total operating profit 196.4 196.4
Profit on sale of discontinued
operations - 4.1
Profit on ordinary activities
before interest 196.4 200.5
Net interest payable (1.8) (5.2)
Profit on ordinary activities
before taxation 194.6 195.3 0% +5%
Profit before taxation,
goodwill amortisation and
exceptional items 212.3 207.3 +2% +8%
Taxation on profit on ordinary
activities (69.0) (70.0)
Profit on ordinary activities
after taxation 125.6 125.3
Profit attributable to
minorities (1.0) (0.5)
Profit for the financial year 124.6 124.8
Dividends paid and proposed (54.4) (52.3)
Retained profit for the
financial year 70.2 72.5
Basic earnings per share 27.4p 27.1p +1% +7%
Adjusted earnings per share 31.3p 29.7p +5% +11%
Diluted basic earnings per share 27.2p 26.8p
Dividends per share 12.1p 11.2p +8%
*Restated on adoption of FRS17 'Retirement Benefits'
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2003
2002
2003 *Restated
£m £m
Fixed assets
Intangible assets - goodwill 290.9 289.5
Tangible fixed assets 196.5 199.6
Investments 33.3 34.3
520.7 523.4
Current assets
Stocks 215.6 217.5
Debtors 368.6 367.9
Investments 111.3 140.7
Cash at bank and in hand 47.5 51.5
743.0 777.6
Current liabilities (499.1) (471.4)
Net current assets 243.9 306.2
Total assets less current liabilities 764.6 829.6
Creditors: amounts falling due after more than one year (220.2) (265.3)
Provisions for liabilities and charges (41.6) (43.1)
Total net assets excluding pension liabilities 502.8 521.2
Pension liabilities (40.8) (43.7)
Total net assets including pension liabilities 462.0 477.5
Capital and reserves
Called up share capital 112.1 116.8
Share premium account 83.8 77.3
Capital redemption reserve 5.3 -
Revaluation reserve 1.3 1.5
Profit and loss account 256.7 279.6
Shareholders' funds: equity interests 459.2 475.2
Minority equity interests 2.8 2.3
462.0 477.5
Net debt 96.5 106.0
Gearing 21.0% 22.3%
*Restated on adoption of FRS17 'Retirement Benefits'
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2003
2003 2002
£m £m
Net cash inflow from operating activities 250.4 216.4
Returns on investments and servicing of finance
Interest received 5.9 5.2
Interest paid (6.8) (11.6)
Dividends paid to minority shareholders (0.2) (0.1)
Other cash flows (3.6) (2.5)
Net cash outflow for returns on investments and servicing
of finance (4.7) (9.0)
Tax paid (56.6) (64.3)
Capital expenditure
Purchase of tangible fixed assets (37.8) (33.4)
Disposal of tangible fixed assets 6.5 2.4
Net cash outflow for capital expenditure (31.3) (31.0)
Acquisitions and disposals
Purchase of businesses (36.1) (77.0)
Disposal of businesses 10.0 111.3
Other acquisition and disposal cash flows - (0.7)
Net cash (outflow)/inflow for acquisitions and disposals (26.1) 33.6
Equity dividends paid (51.8) (48.0)
Net cash inflow before use of liquid resources and
financing 79.9 97.7
Net cash inflow/(outflow) from management of liquid
resources 57.4 (128.7)
Financing
Increase/(decrease) in short term loans 8.3 (37.0)
(Decrease)/increase in long term loans (21.1) 37.4
Decrease in finance leases (0.1) (0.3)
Shares issued for cash 7.0 7.9
Purchase of own shares (92.2) -
Net cash (outflow)/inflow from financing (98.1) 8.0
Increase/(decrease) in cash in the financial year 39.2 (23.0)
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the financial year 39.2 (23.0)
(Increase)/decrease in debt due within one year (8.3) 37.0
Decrease/(increase) in debt due after one year 21.1 (37.4)
(Decrease)/increase in current asset investments (57.4) 128.7
Exchange and other movements 14.9 23.2
Movement in net debt in the year 9.5 128.5
Opening net debt (106.0) (234.5)
Closing net debt (96.5) (106.0)
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 2003
2002
2003 *Restated
£m £m
Profit for the financial year 124.6 124.8
Actuarial gain/(loss) on pension schemes 0.9 (64.3)
Deferred taxation on actuarial (gain)/loss on pension schemes (0.4) 20.0
Currency translation differences on foreign currency net
investments (1.5) (10.9)
Total recognised gains and losses for the year 123.6 69.6
Prior year adjustment (adoption of FRS17) (68.8)
Total recognised gains and losses since last
directors' report and accounts 54.8
CONSOLIDATED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31 DECEMBER 2003
2002
2003 *Restated
£m £m
Opening shareholders' funds as previously reported 544.0 456.5
Prior year adjustment (adoption of FRS17) (68.8) (25.9)
Opening shareholders' funds restated 475.2 430.6
Profit for the financial year 124.6 124.8
Dividends paid and proposed (54.4) (52.3)
Transfer of goodwill on disposals - 19.4
Issue of share capital 7.0 7.9
Actuarial gain/(loss) net of deferred taxation on pension
schemes 0.5 (44.3)
Purchase of own shares (92.2) -
Currency translation (1.5) (10.9)
Closing shareholders' funds 459.2 475.2
*Restated on adoption of FRS17 'Retirement Benefits'
SEGMENTAL ANALYSIS
Sales Growth Operating Growth
Profit
Actual Constant 2002 Actual Constant
2003 2002 Exchange Exchange 2003 *Restated Exchange Exchange
£m £m Rates Rates £m £m Rates Rates
Continuing operations
Outsourcing
Services 2,275.6 2,231.2 +2% +7% 174.8 168.1 +4% +10%
Filtrona 452.6 442.4 +2% +6% 56.1 52.7 +6% +11%
Corporate
activites (16.8) (16.0)
Goodwill (17.7) (15.8)
2,728.2 2,673.6 +2% +6% 196.4 189.0 +4% +10%
Discontinued
operations - 161.7 - 7.7
Goodwill - (0.3)
2,728.2 2,835.3 -4% 0% 196.4 196.4 0% +5%
NOTES
1. Profits for each of the business areas and their percentage change from 2002
are stated before the effect of goodwill amortisation. References to changes
in the level of sales and profits at constant exchange rates have been
calculated by retranslating the relevant results for the year ended 31
December 2002 at the average exchange rates used for the year ended 31
December 2003.
2. Bunzl plc's 2003 Annual Report will be despatched to shareholders at the end
of March 2004. The financial information set out above does not constitute
the Company's statutory accounts for the years ended 31 December 2003 or
2002 but is derived from those accounts. Statutory accounts for 2002 have
been delivered to the Registrar of Companies and those for 2003 will be
delivered following the Company's Annual General Meeting which will be held
on 19 May 2004. The auditors have reported on those accounts; their reports
were unqualified and did not contain statements under Section 237(2) or (3)
of the Companies Act 1985.
3. The final dividend will be paid on 1 July 2004 to shareholders on the
register at 7 May 2004. Shareholders will again have the opportunity to
participate in the Company's dividend reinvestment plan.
*Restated on adoption of FRS17 'Retirement Benefits'
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