Half Year 2021 Bunzl plc Earnings Presentation Transcript

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

Question: Oscar Val Mas - JPMorgan Chase & Co, Research Division - Analyst : I have 2 questions, please. The first one, maybe building on the charts on Page 17, could you comment on what you've seen in July and August? In particular in the base business, how has that recovered in July and August? And then secondly, in the COVID -- with COVID-19 products, how should we think about those in the second half? That's the first question. And then the second question, maybe if you could give a bit more detail on the magnitude of price -- or product price inflation you are seeing. Again, in particular, how much product price inflation are we seeing in the base business? And then how should we think about the magnitude of product price deflation in COVID products in the second half?

Question: Katherine Somerville - UBS Investment Bank, Research Division - Analyst : First of all, thanks for the detailed breakdown of all the moving parts. Yes, 3 questions from me. The first question is whether the 2021 margin guidance assumes COVID orders is above the 2019 level. So does that include the pandemic-related PPE in 2020 -- sorry, 2022 for this? Then the second question is just on the quarterly trends. So in terms of Q1 versus Q2 in terms of COVID orders, have they started to slow versus 2019? And just any detail around that would be very helpful. And then finally, just in terms of the organic growth, are you able to split that between volume and price?

Question: Katherine Somerville - UBS Investment Bank, Research Division - Analyst : It was, yes. Sorry, for getting the years mixed up.

Question: Karl Green - RBC Capital Markets, Research Division - Analyst : Just a couple of remaining questions from me. Just the first one, Richard, I just wanted to clarify. I think you said that there was a delta of GBP 20 million in terms of operating profit impact in terms of inventory and receivables charge reductions. Just to double check that, and -- is there any material variance between regions in terms of how that GBP 20 million has been split that we should be aware of? The second question, just on Slide 15, you've given that underlying performance versus H1 '19. Did you have those percentages in terms of the organic performance rather than the underlying performance, please? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 31, 2021 / 8:30AM, BNZL.L - Half Year 2021 Bunzl plc Earnings Presentation

Question: Karl Green - RBC Capital Markets, Research Division - Analyst : Okay, great. But just to be clear, the underlying revenue number, so that excludes acquisitions already, does it?

Question: Rajesh Kumar - HSBC, Research Division - Analyst : Just following up on Karl's question earlier, the provisions, you said last year, GBP 30 million, this year GBP 10 million, and -- can you just confirm that there has been no reversal that has benefited the first half margin, just to be absolutely clear? And the second question is on the differential inflation, yes, you alluded to earlier. When you're thinking about price increases and you go into discussion with the customer, what are the biggest moving parts? Like what role does the own brand or the carbon footprint of the landed product or storage plays into that? Could you give us some color on how your customers might be thinking about price versus product mix going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 31, 2021 / 8:30AM, BNZL.L - Half Year 2021 Bunzl plc Earnings Presentation And even if you see -- the third question is, if you see more people switch to your own brand product, I appreciate that the revenue from that mix would be lower, but the gross profit necessarily not so. So at a gross profit level, do you think the inflation you can get on the top line can be sufficient to offset the distribution cost inflation you're going to see ahead?

Question: Rajesh Kumar - HSBC, Research Division - Analyst : Understood. So basically, what that would suggest is we should probably look at the gross profit growth as well, not just revenue? And if -- or basically you think about that when we are doing our forecast? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 31, 2021 / 8:30AM, BNZL.L - Half Year 2021 Bunzl plc Earnings Presentation

Question: Rajesh Kumar - HSBC, Research Division - Analyst : So basically, when we're thinking about '22, we should think in terms of gross profit growth as well, not just the top line revenue growth because that could potentially be a bit different in pattern to the revenue?