Full Year 2020 Bunzl plc Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Katherine Somerville - UBS Investment Bank, Research Division - Analyst : Three questions from me, please. Just firstly, on those large orders. Thank you so much for the breakdown that you gave. I'm just wondering, given in your guidance, you said that there aren't going to be large orders this year. Have you -- does that mean that you've not had any orders so far this year? Second question, on Slide 16, you break down the different end markets and the currency growth you saw there. In grocery and in foodservice and retail, are you able to give us the organic growth excluding the COVID orders? And then finally, in the medium term, as you sort of see a greater shift online in grocery, how do you expect that to impact your business?

Question: Katherine Somerville - UBS Investment Bank, Research Division - Analyst : Yes. So you gave this sort of constant currency growth rates and you spoke about grocery overall was a positive organic growth. But if you exclude the COVID orders from that, are you able to give an indication of the underlying in both of those -- in both those end markets, please?

Question: Katherine Somerville - UBS Investment Bank, Research Division - Analyst : Yes. And then also in foodservice and retail, if you can, please.

Question: Sylvia Pavlova Barker - JPMorgan Chase & Co, Research Division - Analyst : Maybe just following up on the inflation point a little bit. Just could you give us the overall kind of impact of pricing versus volume this year? I know it's been very, very difficult because there's so many impacts in there. But it seems like it was very strong in North America and Latin America in H2 in particular. So am I correct in thinking that kind of exiting the year, you said obviously gloves still running quite high, plus maybe the underlying business seeing some of that inflation? Kind of any quantification on 2020 or the exit rate will be quite interesting. And then secondly, foodservice and retail, you said were already stabilizing in the second half in North America. Is the gap that you expect relative to 2019 in this year in foodservice and retail driven by the U.K. and Continental Europe? Or will there still be a gap, you think, in North America as well? And then finally, if we think about some of your larger clients, let's say, the Walmarts and Targets, are you kind of discussing including some of the COVID products, whether they're safety or cleaning & hygiene, as part of your core relationship going forward that might just last, not just during lockdowns, but as we look further out as well?

Question: Sylvia Pavlova Barker - JPMorgan Chase & Co, Research Division - Analyst : Okay. So in terms of these other product categories, you don't need necessarily a formal relationship kind of going forward? Or I should -- could we think about that as you're, let's say, renegotiating your Walmart contract kind of coming up for renewal, could one of the options within that be volumes are going up because there's now another category of products? Or does that not need to happen in such a formalized manner?

Question: Andrew Charles Grobler - CrTdit Suisse AG, Research Division - Analyst : Can I just ask 2, please? Firstly, and hopefully, simple one, going back to the previous question. Could you just remind us of the split between cost-plus and negotiated contracts across the regions, please? And secondly, you talked about digital increasing, so 66% of sales through digital. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 01, 2021 / 9:30AM, BNZL.L - Full Year 2020 Bunzl plc Earnings Presentation To what extent do you see that as a competitive advantage out in the market and you as the larger or the largest player been able to win and maintain client relationships in a way that some of the smaller guys can't? And I guess as an add-on to that, having several hundreds of systems across Bunzl, is that a barrier to fully taking advantage of that option?

Question: Rajesh Kumar - HSBC, Research Division - Analyst : Appreciate you giving a lot of color on the phasing of product inflation and gross margin within what can be ascertained. Just in terms of the freight and labor cost inflation, what is your thinking about the next 6 months or so? And then second one, which is if you think of the shape of the recovery, are there any geographic differences we should bear in mind in terms of what you're factoring in? And finally, on the balance sheet side, you have talked about the receivables and slow-moving inventory provisions. Obviously, they were elevated in 2020 for understandable reasons. In your 2021 outlook expectations, do you expect that to normalize to the prepandemic levels, 2019 or '18 levels? Or have you assumed they remain elevated?

Question: Rajesh Kumar - HSBC, Research Division - Analyst : Understood. And just in terms of taking additional provision. It's -- you're assuming it's the same level as 2018, '19 levels, that you have provided adequately that you don't have to take a similar price provision again in 2021?

Question: Rajesh Kumar - HSBC, Research Division - Analyst : That's super helpful. If I may just follow up on one more thing. When you're thinking of -- you talked about bolt-on acquisitions and opportunity sets ahead. Are there any returns thresholds or returns criteria you deploy when looking at them? And can that be a bit crippling to the opportunities ahead?