Bunzl plc
Annual Report 2023
We deliver
added value

We are the largest value-
added distributor in the world
in our market sectors…
A focused and successful specialist international
distribution and services group with operations
across the Americas, Europe, Asia Pacific and
UK & Ireland.
Our purpose is to deliver essential business
solutions around the world and create long
termsustainable value for the benefit of all
ourstakeholders.
Our customers expect us to deliver the innovative
products, solutions and insights that add value
totheir operations. We invest in our people to
addvalue to their experience and foster acustomer-
focused and inclusive culture. We return value to
our investors through sustainable dividend growth.
That’s why we never stop adding value.
www.bunzl.com
Read more on our website
Strategic report
A year in review 2
Bunzl at a glance 4
Chairman’s statement 6
Investment case 8
Chief Executive Officer’s review 10
Operating review 16
Creating and innovating 20
Market dynamics 22
Our business model 24
Our purpose-led strategy 26
Strategy in action 27
Developing and improving 32
Our people 34
Key performance indicators 40
Enhancing and sustaining 42
Sustainability 44
Taskforce on Climate Related Financial Disclosures
(‘TCFD’) 63
Section 172 statement 64
Principal risks and uncertainties 68
Viability statement 77
Resilience and growth 78
Financial review 80
Non-financial and sustainability information statement 87
Directors’ report
Chairman’s introduction 88
Board of directors 90
Corporate governance report 92
Nomination Committee report 106
Board Sustainability Committee report 110
Audit Committee report 112
Directors’ remuneration report 122
Other statutory information 147
Financial statements
Consolidated income statement 150
Consolidated statement of comprehensive income 150
Consolidated balance sheet 151
Consolidated statement of changes in equity 152
Consolidated cash flow statement 153
Notes 154
Company balance sheet 189
Company statement of changes in equity 190
Notes to the Company financial statements 191
Statement of directors’ responsibilities 195
Independent auditors’ report
to the members of Bunzl plc 196
Additional information
Shareholder information 202
SASB Reporting for Bunzl Sustainability Metrics 209
ESG Appendix 211
Five year review 220
WELCOME
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Annual Report 2023 01
Bunzl plc
Annual Report 2023
Going digital
As we move further and further into a digital world,
help us to reach our carbon emissions target and create
a more sustainable world by opting out of the printed
edition of our report for next year.
www.bunzl.com/investors/shareholder-information/
registrar-information/

KEY THEMES FOR 2023
Enhancing and
sustaining
Our depth of expert advice, own brand ranges,
extensive product data, and proprietary tools help
our customers navigate the complex transition to
new products and sustainable solutions.
85%
Group revenue attributable to non-packaging
products or packaging products better suited
to a circular economy
Developing and
improving
Our people are our most important asset, and we
are continuously focusing on investing in and
supporting their learning and development.
24,528
Total number of employees around the world
Creating and
innovating
Growing our strong exclusive own brand portfolio
supports our value proposition and improves
customer stickiness.
c.25%
Group revenue generated through
ownbrandsales
At Bunzl we never stop adding
value for our stakeholders.
Delivering the innovative
products, solutions and insights
that help our customers run
their businesses more
efficiently and sustainably.
Always
adding value
Read more on page 20 Read more on page 32 Read more on page 42
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Bunzl plc
Annual Report 2023

A YEAR IN REVIEW
Resilient results following strong
performance in recent years
Bunzl has a compounding growth strategy
that consistently delivers, with sustainability
a vital part of the equation.
31st year
of consecutive annual
dividend increases
Financial performance highlights
Revenue
£11.8bn
(2022: £12.0bn)
(1.9)%
†
Change at actual exchange rates (2.0)%
Adjusted operating profit
*
£944.2m
(2022: £885.9m)
+6.2%
†
Growth at actual exchange rates 6.6%
Basic earnings per share
157.1p
(2022: 141.7p)
Growth at actual exchange rates 10.9%
Adjusted earnings per share
*
191.1p
(2022: 184.3p)
+2.7%
†
Growth at actual exchange rates 3.7%
Operating profit
£789.1m
(2022: £701.6m)
Growth at actual exchange rates 12.5%
Net debt : EBITDA
**
1.1x
(2022: 1.2x)
Cash conversion
*
96%
(2022: 107%)
Committed acquisition spend
£468m
Dividend per share
68.3p
(2022: 62.7p)
+8.9%
Reconciliation of alternative performance measures
to statutory measures for the year ended 31 December 2023
Adjusting items
Year ended
31 December 2023
Alternative
performance
measures
£m
Customer
relationships,
brands and
technology
amortisation
£m
Acquisition
related
items
£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
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
This review refers to alternative performance measures which exclude charges for customer relationships, brands and technology amortisation, acquisition
related items, non-recurring pension scheme charges and the profit or loss on disposal of businesses and any associated tax, where relevant. 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 they are removed in calculating the profitability measures by which management assesses the performance of the Group. Further details
ofthese alternative performance measures can be found in Note 3 to the consolidated financial statements on page 160.
Growth at constant exchange rates is calculated by comparing the 2023 results to the results for 2022 retranslated at the average exchange rates
used for2023.
* Alternative performance measure (see Note 3 to the consolidated financial statements on page 160).
** At average exchange rates and based on historical accounting standards, in accordance with the Group’s external debt covenants.
† At constant exchange rates.
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Sustainability performance highlights
Responsible
supply chains
81%
of our spend in high risk
regions from assessed
and compliant suppliers
(2022: 78%)
1,022
ethical audits
completed
(2022: 930)
c.96%
of our purchasing spend
today is either in low risk
regions, with assessed
or compliant suppliers
inhigh risk regions, or
on other non-product
related costs
Taking action on
climate change
18%
reduction in absolute
emissions since 2019
(2022: 15%)
30%
more carbon efficient
since 2019
(2022: 24%)
750
largest suppliers
engaged in 2023
over setting their own
science- based emissions
reductions targets
Investing in a diverse
workforce
22%
senior leadership* roles
filled by women
+2%
compared to the same
population in 2022
* Senior leadership defined as the 506 leaders who receive
share awards aspart of their remuneration
Providing sustainable
solutions
2%
of Group revenue generated from
consumables that are facing regulation
85%
of Group revenue attributable
tonon-packaging products and
packaging products made from
alternative materials that are well
suited to a circular economy
Backed by a proven
financial track record,
we are committed
tofurther accelerating
our focus on
sustainability for
tomorrow and
beyond.
Read more on page 44
Revenue
£11.8bn
(2022: £12.0bn)
(1.9)%
†
Change at actual exchange rates (2.0)%
Adjusted operating profit
*
£944.2m
(2022: £885.9m)
+6.2%
†
Growth at actual exchange rates 6.6%
Basic earnings per share
157.1p
(2022: 141.7p)
Growth at actual exchange rates 10.9%
Adjusted earnings per share
*
191.1p
(2022: 184.3p)
+2.7%
†
Growth at actual exchange rates 3.7%
Operating profit
£789.1m
(2022: £701.6m)
Growth at actual exchange rates 12.5%
Net debt : EBITDA
**
1.1x
(2022: 1.2x)
Cash conversion
*
96%
(2022: 107%)
Committed acquisition spend
£468m
Dividend per share
68.3p
(2022: 62.7p)
+8.9%
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23%
†
54%
†
11%
†
12%
†
* Alternative performance measure (see Note 3 to the consolidated
financial statements on page 160).
† Based on adjusted operating profit and before corporate costs
(see Note 4 to the consolidated financial statements on page 162)
BUNZL AT A GLANCE
Supporting businesses globally with
essential products and services
We provide a one-stop-shop, on-time and in-full specialist
distribution service across 33 countries, supplying a broad
range of internationally and responsibly sourced non-food
products to a variety of market sectors.
Our business regions
North America
£528.0m
Adjusted operating profit*
£944.2m
Continental Europe
£224.7m
UK & Ireland
£103.4m
Rest of the world
£119.6m
33
countries we
operate in
24,528
employees
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Our market sectors
Sector revenue split
Grocery
Goods-not-for-resale, including food packaging,
films, labels, cleaning & hygiene supplies and
personal protection equipment to grocery
stores, supermarkets and convenience stores.
Cleaning & Hygiene
Cleaning & hygiene materials, including chemicals
and hygiene paper, to cleaning and facilities
management companies and industrial and public
sector customers.
Foodservice
Non-food consumables, including food
packaging, disposable tableware, guest
amenities, catering equipment, agricultural
supplies, cleaning & hygiene products and
safety items, tohotels, restaurants, contract
caterers, food processors, commercial
growersand the leisuresector.
Retail
Goods-not-for-resale, including packaging and
other store supplies and a full range of cleaning &
hygiene products, to retail chains, boutiques,
department stores, home improvement chains,
office supply companies and related e-commerce
sales channels.
Safety
Personal protection and safety equipment,
including gloves, boots, hard hats, ear and
eyeprotection and other workwear, as well
ascleaning & hygiene supplies and asset
protection products to industrial,
constructionand e-commerce sectors.
Healthcare
Healthcare consumables, including gloves, masks,
swabs, gowns, bandages and other healthcare
related equipment, as well as cleaning & hygiene
products and healthcare devices to hospitals,
care homes and other facilities serving the
healthcare sector .
Other
A variety of product ranges to other end
usermarkets.
Read more about our market segments in the
market dynamics section of our Annual Report.
Read more on page 22
Foodservice
29%
Grocery
27%
Safety
16%
Retail
9%
Cleaning & Hygiene
10%
Healthcare
6%
Other
3%
Overall group revenue
£11.8bn
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CHAIRMAN’S STATEMENT
Our people have driven us
to achieve another successful
year of strategic progress
Bunzl has had another successful year, delivering
good adjusted operating profit growth and
making further strategic progress across the
business, including surpassing the milestone of
£5 billion of committed acquisition spend since
2004, and extending its track record of
consecutive annual dividend growth to 31 years.
At constant exchange rates, revenue in 2023
declined by 1.9% (2.0% at actual exchange rates)
and declined by 0.4% compared to the prior year
excluding the disposal of the UK healthcare
business. Adjusted operating profit grew by
6.2%at constant exchange rates (6.6% at actual
exchange rates), with 7.6% growth excluding the
disposal. An operating margin of 8.0% was
supported by good margin management,
including increasing penetration of own brands,
higher margin acquisitions, operational
efficiencies and inventory driven one-off benefits
in the second half of 2023. At constant exchange
rates, adjusted operating profit was 46.3% higher
than the comparable period in 2019, and is
equivalent to a c.10% Compound Annual Growth
Rate (‘CAGR’) over that period. This performance
gives me continued confidence in the Group’s
ability to continue to deliver long term growth,
supported by the agility of our people, the
diversification of our portfolio, the strength of our
culture and our dedication to customer service.
c.75%
of our operating companies participating in
our ‘Great Place to Work’ scheme in 2023
were accredited
Read more about our people on page 34
Peter Ventress
Chairman
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Strategic priorities
We continue to pursue a strategy of developing
the business through a combination of organic
growth, operational improvements and
acquisition-led growth. The Group agreed
19acquisitions in the year, across 11 countries
and five sectors, highlighting the breadth of
Bunzl’s consolidation opportunities. This included
the Group’s first acquisition in Poland, Safety
First,one of the country’s largest distributors
ofpersonal protection equipment (‘PPE’). This
anchor acquisition provides a good platform
fromwhich to develop Bunzl’s operations in this
attractive market. Total committed spend for
theyear was £468 million, resulting in a total
committed spend of £1.7 billion over the last
fouryears. Bunzl’s acquisition momentum has
continued into 2024, with the announcement of
two new acquisitions today, Nisbets and Pamark
Group. Nisbets is a well-established, high quality
and own brand focused omnichannel distributor
of catering equipment and consumables that
operates in the UK and Ireland, Northern Europe,
and Australasia. The second acquisition is our
anchor acquisition in Finland, a leading distributor
called Pamark. This takes the number of countries
in which we operate to 33. Bunzl’s depth of
opportunity is significant and further
consolidation of the Group’s fragmented end
markets is a key growth opportunity. The
continued sector and geographic expansion
further enhances our available acquisition
opportunities.
Bunzl’s operating companies have continued to
develop their value-added services to customers,
supporting organic growth, customer retention,
and margin opportunities. Alongside our
sustainability and digital capabilities, developing
innovative, own brand ranges is an area that
continues to strengthen Bunzl’s competitive
advantage, with penetration today at c.25% of
Group revenue. We also continue to collaborate
with our strategic third-party branded suppliers,
to provide unparalleled choice for our customers.
The proportion of total Group revenue
attributable to non-packaging products or
packaging made from alternative materials
remained high at 85%, while 72% of customer
orders were received digitally. The Group also
continues to drive operational efficiencies,
including further warehouse relocations and
consolidations which partially offsets property
cost inflation, as well as making further
investments into automation. Bunzl ended
theyear with a net debt to EBITDA of 1.1 times,
providing substantial headroom for further
self-funded acquisitions and other capital
allocation options.
People and culture
Bunzl’s most important asset is its people, who
remain committed to providing customers with
areliable and value-added service. People
continue to find Bunzl a fulfilling place to work,
asdemonstrated by the results from the Group’s
participation in the external ‘Great Place to Work’
scheme in 2023. After an initial trial in Continental
Europe in 2022, the Group opened up the scheme
more broadly in 2023. Around 75% of our
operating companies that participated were
accredited by the ‘Great Place to Work’
programme. We also continued to accelerate
ourdiversity and inclusion agenda to ensure that
we have a working environment which supports
individual well-being, growth and career
progression. In 2023, the percentage of women
within our senior leadership team of 506 leaders
(defined as those receiving long term incentives)
was 22%. This is an increase of two percentage
points compared to the equivalent population
in2022.
Shareholder returns
The Board is recommending a final dividend of
50.1p, 10.4% higher than the prior year, resulting
in a full year dividend of 68.3p. This represents
an8.9% increase in the total dividend compared
to 2022 and is Bunzl’s 31st consecutive year
ofannual dividend growth. The Group
remainscommitted to ensuring sustainable
dividend growth.
Since 2004, Bunzl has returned £2.2 billion
toshareholders through dividends and has
committed over £5 billion to self-funded
acquisitions to support a growth strategy that
hasdelivered an adjusted earnings per share
CAGR of c.10% over that period and achieved
areturn on invested capital of 15.5% in 2023.
Governance
Vanda Murray joined the Board in February 2015
and is currently the Chair of the Remuneration
Committee and the Senior Independent Director.
She has served on the Board for just over nine
years and her term of office will end after the
2024 AGM. Vanda’s independent advice and
significant contribution to the Board’s
deliberations over the years have been greatly
appreciated and she will leave with our best
wishes. A robust recruitment process for a new
non-executive director is now underway and an
announcement will be released in due course,
once a suitable candidate has been identified.
On the 1st of March 2023, Jacky Simmonds
was appointed as a non-executive director
of the Group. She has significant knowledge and
experience of working in international and listed
companies, and across all aspects of HR, with
particular expertise in employee engagement,
talent and succession planning. The proportion
offemale directors on the Board is now 44%,
while representation on our Executive Committee
remains at 40%.
Vanda will be succeeded as Chair of the
Remuneration Committee by Jacky, and Pam Kirby
will succeed her as the Board’s new Senior
Independent Director. The timing of the changes
allows for a meaningful handover period with
Vanda as part of a planned succession.
Peter Ventress
Chairman
26 February 2024
Bunzl’s most important asset
is its people, who remain
committed to providing
customers with a reliable
and value-added service.”
Key takeaways
• Total committed spend on
acquisitions for the year was
£468million, resulting in a total
committed spend of £1.7 billion
overthe last four years
• Strong return on invested
capitalof15.5%
• Extending our track record of
sustainable annual dividend
growthfor the 31st year
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INVESTMENT CASE
A strong track record
for delivering growth and
returns to shareholders
Bunzl has a compounding growth strategy
that consistently delivers, with sustainability
a vital part of the equation.
1. Alternative performance measure (see Note 3 to the consolidated financial statements on page 160) .
• A diversified, balanced and resilient business
• Consistent compounding growth strategy
with strong track record
• Significant opportunities for future growth
• Sustainable and equitable growth
• Highly cash generative and strong financial
discipline
A diversified, balanced and
resilient business
Consistent compounding
growth strategy with strong
track record
• Value-added service around
essential products
• Operating in fragmented markets
• Low customer and supplier
concentration
• Long term customer and supplier
relationships
• Growth driven by profitable organic
growth, operating model
improvements, and self-funded
acquisitions
• Strong track record of growth in
revenue, adjusted operating profit
and adjusted earnings per share
• Long term dividend growth and total
shareholder return
33
countries globally in which Bunzl is present
214
acquisitions since 2004, driving organic growth
6
customer focused market sectors
9%
Adjusted operating profit
1
CAGR since 2004
>20 years
average length of partnership with top 40
North America customers
191.1p
Adjusted earnings per share
1
, growing from
31.7p in 2004
31 years
of consecutive annual dividend growth
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Significant opportunities for
future growth
Sustainable and equitable
growth
Highly cash generative and
strong financial discipline
• Significant opportunities for growth
in existing countries and markets
• Scope for further geographic and
new sector expansion
• Strong balance sheet to support
acquisition opportunities
• Industry-leading ethical
supplieraudits
• Carbon efficiency through
consolidation and customer
collaboration
• Proactive leader in the transition
toalternative material products
• Decentralised business model
supports people and customer focus
• Consistently strong cash
conversion
• Efficient capital allocation
• Strong returns achieved
£5.2bn
Self-funded committed acquisition spend from
2004 to 2023
c.96%
purchasing spend
3
in low risk regions
orassessed or compliant suppliers in
highriskregions
96%
Cash conversion
1
1.1x
Net debt to EBITDA
1,2
provides substantial
capacity for further self-funded acquisitions
18%
reduction in scope 1 and 2 emissions
since2019
15.5%
Return on invested capital
1
10%
of Group revenue generated by consumables
with an opportunity to transition
46.1%
Return on average operating capital
1
>40%
of female members in Board and Executive
Committee combined
The performance of our business year on year
always delivers returns for stakeholders. However,
none of this would be possible without the hard
work and dedication of our international teams,
who work tirelessly across the world to deliver the
best service possible for each and every one of our
customers.
1. Alternative performance measure (see Note 3 to the consolidated financial statements on page 160) .
2. On a covenant basis – at average exchange rates and based on historical accounting standards, in accordance with Group’s external debt covenants.
3. c.96% of our purchasing spend today is either in low risk regions, with assessed or compliant suppliers in high risk regions, or on other non-product related costs which include freight,
duties and FX related costs.
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A year of resilience, delivering
growth and margin improvement
Overview
The Group delivered a strong operating margin
in2023, despite revenue performance being
impacted by a reducing benefit from inflation,
volume loss in the North America foodservice
redistribution business and some post-pandemic
related normalisation trends. I am proud of the
success our teams have had with margin
management initiatives which have contributed
tothe margin performance, such as increasing
thepenetration of our own brand products, and
continued strategic focus on operational
efficiencies.
We have achieved overall good outcomes from
the elevated number of customer tenders we
have seen following a period of reduced activity,
which is a testament to the strong value
proposition we provide our customers, supported
by the strength of our supply chain. While the
Group’s financial strength had enabled our teams
to invest in inventory during the supply chain
disruption over the last few years, as this has
eased, our teams have also demonstrated a
strong commitment to operational discipline,
delivering a meaningful reduction in inventory
days towards 2019 levels, particularly in the first
half of the year. I am also very pleased with the
continued success of our acquisition strategy,
including surpassing the milestone of £5 billion
ofcommitted spend since 2004.
Our performance in 2023 continues to highlight
the strength of Bunzl’s compounding growth
strategy and this strengthens my confidence in
8.0%
Operating margin
1
7.6%
Adjusted operating profit
1,2
growth, excluding the disposal
of the UK healthcare business
£468m
committed spend
on acquisitions
1.1x
Net debt to EBITDA
1,3
£644m
free cash flow
1
8.9%
dividend per share growth
Frank van Zanten
Chief Executive Officer
CHIEF EXECUTIVE OFFICER’S REVIEW
Robust performance
Frank van Zanten
Chief Executive Officer
1. Alternative performance measure (see Note 3 to the consolidated financial statements on page 160).
2. At constant exchange rates.
3. On a covenant basis – at average exchange rates and based on historical accounting standards, in accordance with the Group’s external debt covenants.
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the Group’s medium term outlook. Our organic
revenue growth will continue to be supported
byinvestments in our value-added proposition,
and a net inflationary environment is potentially
afurther medium term support. Furthermore,
wecontinue to see substantial opportunities for
consolidation of our fragmented markets, and
theGroup has achieved a step-change in the level
of committed acquisition spend in recent years.
The expansion of our footprint resulting from
acquisitions continues to enhance the number of
future opportunities available through our locally
driven approach to sourcing acquisitions.
Operating performance
With approximately 90% of adjusted operating
profit generated outside the UK, profits and
earnings were positively impacted between
0%and 3% by currency translation in 2023.
Thecommentary below is stated at constant
exchange rates unless otherwise highlighted.
Performance in 2023 also reflects the disposal
ofour UK healthcare business in December 2022,
which had revenue of £176 million in 2022.
Over 2023, revenue declined by 1.9% (2.0%
atactual exchange rates) to £11,797.1 million.
Within this, acquisition growth of 2.5% was offset
by underlying revenue decline of 2.9% and the
impact of the UK healthcare business disposal in
December 2022 which impacted revenue by 1.5%.
Within the underlying revenue decline of 2.9%,
the decline in Covid-19 related sales impacted
underlying revenue by 1.4%, with Covid-19 related
sales now broadly in line with 2019 levels. The
base business contributed 1.5% of the decline,
driven by volume loss in the North America
foodservice redistribution business due to
deflationary pressure increasing price
competition, post-pandemic normalisation
trends, as well as a reducing benefit from inflation.
Furthermore, volumes were impacted by planned
strategic actions in the North America retail
business to focus on more profitable customers
and the decision to transition ownership of
customer specific inventory to certain customers,
as well as some volume weakness in Continental
Europe and UK & Ireland.
In recent years, the Group has managed inflation
on paper, plastics and chemicals well, and
successfully implemented product cost driven
selling price increases. Over the year, the benefit
of inflation continued to reduce, with some
deflation in the final quarter, particularly in
NorthAmerica, which was no longer fully offset by
inflation benefit elsewhere. While other regions
saw lagged inflation compared to North America,
all regions experienced a reducing benefit over
the course of the year. During the year, we
achieved good overall outcomes from the
elevated number of customer tenders, following
reduced activity during the pandemic. We saw
moderating operating cost inflation in North
America with wage inflation back to more
typicallevels. Property cost inflation linked to
lease renewals remained high, but was partially
offset by fuel and freight rates declining
meaningfully. Wage inflation in UK & Ireland
andContinental Europe increased over the year
but was manageable.
The foodservice and retail businesses combined
saw underlying revenue decline by 8% compared
to the prior year. There was volume weakness in
North America foodservice due to deflationary
pressure increasing price competition, which
alongside process changes in the business to
drive more own brand penetration, resulted in
lower volumes. We also saw an impact to volumes
from post-pandemic normalisation trends, driven
by a reduction in takeaway packaging sales as
dining habits have continued to shift following the
pandemic, and customer destocking activity early
in the first half. The retail sector saw a decline in
revenues, mainly in North America, as a result of
planned strategic actions to focus on more
profitable customers and transitioning ownership
of customer specific inventory to certain
customers. In addition, there was a reduction in
Covid-19 related sales in most business areas.
Total underlying revenue in the grocery and other
sectors grew by 2%, driven by further year-on-
year inflation benefit. Overall, total underlying
revenue in the healthcare, safety and cleaning &
hygiene sectors declined by 1% year-on-year, with
an impact from lower Covid-19 related sales.
Our safety base businesses have seen a slight
decline, with continued recovery in some business
areas offset by normalising Covid-19 related sales.
Increased infrastructure spend in North America
is a potential medium term support for our safety
business. The cleaning & hygiene sector saw
some growth over the year, mainly due to
acquisitions and inflation benefits in UK & Ireland
and Continental Europe.
Adjusted operating profit was £944.2 million, an
increase of 6.2% (6.6% at actual exchange rates),
and operating margin increased to 8.0%
compared to 7.4% in the prior year. The Group’s
operating margin was supported by good margin
management, including increasing penetration of
own brands, higher margin acquisitions,
operational efficiencies, and inventory driven
one-off benefits in the second half of 2023.
Operating margins remain substantially higher
compared with the 6.9% achieved in 2019, at
constant exchange rates. Of the 110bps increase,
around half is driven by margins attributable to
acquisitions made over that period. Excluding the
UK healthcare disposal, adjusted operating profit
grew by 7.6%. Reported operating profit was
£789.1 million, an increase of 11.0% (12.5% at
actual exchange rates), reflecting the 6.2%
increase in adjusted operating profit (at constant
exchange rates) and a reduction in customer
relationships, brands and technology
amortisation and acquisition related items
compared to the prior year.
We saw good outcomes of
tendering activity in the year,
supported by our continued
demonstration of our
value-added services and
thestrength of our own
brand proposition.”
Key takeaways
• Operating margin of8.0%
• Continued acquisition success,
with19 agreed in 2023, including
firstacquisition in Poland
• Overall good outcomes of tendering
activity, supported by demonstration
of value-add and strength of own
brand proposition
• Continuing to drive operating
efficiency through 24 warehouse
relocations and consolidations
• Increased digital order percentage
to72%, further improving efficiency
and our ability to retain customers
• Continued development of
sustainability offering to support
customers’ transition to
alternativeproducts and
reducecarbon emissions
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Decarbonisation impact by lever (2050)
We believe that long term net zero targets need to be aligned with
climate science and as such we have followed the SBTi’s Net Zero
Standard to develop our transition plan during 2023. As with our
near term carbon reduction targets, we have submitted our net
zero transition plan for approval with the SBTi.
CHIEF EXECUTIVE OFFICER’S REVIEW continued
Adjusted profit before income tax was £853.7
million, an increase of 3.4% (4.4% increase at
actual exchange rates). Adjusted profit before
income tax was impacted by a £27.2 million
increase in net finance expense, at constant
exchange rates, to £90.5 million, driven by
increases in interest rates and fair value
movements on interest rate derivatives,
partlyoffset by lower average debt during the
year. Reported profit before income tax was
£698.6 million, an increase of 7.8% (10.1%
atactualexchange rates).
The effective tax rate of 25.0% was higher than
the 24.6% in the prior year, reflecting the UK
corporate tax increase. This will also have a
further impact next year, so the effective tax
rateis expected to be around 26% in 2024.
Adjusted earnings per share were 191.1p, an
increase of 2.7% (3.7% at actual exchange rates).
Reported basic earnings per share were 157.1p, an
increase of 8.2% (10.9% at actual exchange rates).
The Group’s cash generation continues to be
strong, with 96% cash conversion (operating cash
flow as a percentage of lease adjusted operating
profit) ahead of our 90% target, and £643.5
million free cash flow generated. The level of cash
generated remains strong, but a higher cash
outflow relating to income tax and interest paid
resulted in free cash flow declining 8.8% at actual
exchange rates compared to 2022. The strength
of our underlying free cash flow generation
continues to enable our investment in the
business, progressive dividends and acquisitions.
The Group ended the year with net debt,
excluding lease liabilities, of £1,085.5 million
compared to £1,160.1 million in December 2022.
Net debt to EBITDA, calculated at average
exchange rates and in accordance with the
Group’s external debt covenants, which are based
on historical accounting standards, was 1.1 times
compared to 1.2 times at the end of 2022. This
provides the Group with substantial capacity to
fund further acquisitions and to consider other
potential capital allocation options.
The structure of recent acquisitions, with
increasing earn outs and options to be exercised
to buy out minorities in future years, gives rise to
both deferred consideration payable and future
contingent consideration. At the end of the year,
adeferred consideration payable of £175.6 million
was held on our balance sheet compared to
£139.9 million at the end of 2022; deferred
consideration is not included within the Group’s
external debt covenant definition. The total
amount of deferred and contingent consideration
relating to acquisitions was £258.8 million at the
end of the year compared to £216.2 million at the
end of 2022. The incremental leverage from
deferred and contingent consideration expected
to be paid was c.0.2 times.
Return on average operating capital increased
moderately to 46.1% compared to 43.0% at 31
December 2022, mainly due to higher returns in
the underlying business driven by an increase in
operating margin. Return on invested capital was
15.5% compared to 15.0% at 31 December 2022,
similarly due to higher returns in the underlying
business driven by an increase in operating profit.
100%
2019 baseline
75%
Business as
usual emissions
growth
(12)%
Low and zero
carbon
transport
(93)%
Suppliers
setting carbon
reduction
targets
(15)%
Lower carbon
solutions for
customers
(29)%
Raw material
carbon
reduction
(2)%
More efficient
operations
(14)%
Innovation and
technology
10%
2050 residual
emissions
Low carbon
business and
workforce
Innovation
1
Lower
carbon
commodities
Climate
conscious
decision making
Building a low
carbon supplier
network
Emission-free
transport
2050
Emissions
growth
2019
Baseline
2050
Residual
emissions
2
Emission-free
transport
Building a low
carbon supplier
network
Climate conscious
decision making
Lower carbon
commodities
Low carbon
business and
workforce
Our decarbonisation levers
Read more about our levers on page 50
1. We anticipate that beyond the reductions associated with the five key decarbonisation levers, further innovation and technology improvements, particularly
related to product design and technology, transportation solutions and waste treatment will result in additional emissions reduction.
2. Residual emissions are those emissions that remain at the point of net zero, despite abatement efforts. We are committed to neutralising any residual
emissions at the net-zero target year.
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Acquisition* Completion Description
Capital Paper January 2023 Distributor of foodservice packaging and consumables, cleaning & hygiene supplies, and industrial
packagingproducts in Canada, with revenue of CAD 26 million (c.£16 million) in 2022
Arbeitsschutz-Express April 2023 Online distributor of workwear and PPE in Germany, which generated EUR 41 million (c.£35 million)
of revenue in 2022
Dimasa April 2023 Distributor of cleaning & hygiene products in the Andalusia region of Spain, with revenue
of EUR 4 million (c.£3 million) in 2022
Irudek Group April 2023 Distributor of safety and PPE in Spain, specialising in fall protection equipment, with revenue of
EUR17million (c.£15 million) in 2022
EHM June 2023 Distributor of a wide range of PPE products in the UK, with revenue in 2022 of £18 million
La Cartuja Complementos
Hostelerίa
June 2023 Foodservice and hospitality equipment provider in Spain, with revenue of EUR 5 million
(c.£4 million) in 2022
EcoTools.nl July 2023 High growth Netherlands based specialist online distributor of tool accessories and industrial consumables
to customers across the Benelux region. In 2022, the business generated revenue of EUR 20 million
(c.£17 million) with very high double digit margins
Leal Equipamentos
deProteção
August 2023 A specialised high margin safety distributor in Brazil with a strong own brand portfolio, which generated
revenue of BRL 216 million (c.£34 million) in 2022
Groveko August 2023 Distributor of cleaning & hygiene products in the Netherlands with both a traditional cleaning & hygiene
product offering, as well as robotic and smart cleaning solutions. The business generated revenue of
EUR 23 million (c.£20 million) in 2022
PackPro August 2023 Distributor of packaging solutions to a diverse customer base, including food processor and industrial
customers in Canada. In 2022 the business generated revenue of CAD 33 million (c.£20 million)
Pittman Traffic & Safety
Equipment**
August 2023 Distributor of safety and asset protection solutions in Ireland and the UK, such as bollards,
speed bumps and workplace barriers, with revenue in 2022 of EUR 7 million (c.£6 million)
FlexPost October 2023 A higher margin distributor of flexible signposts and bollards in North America with a strong own brand
portfolio. FlexPost generated revenue of USD 4 million (c.£3 million) in 2022 and follows other recent
acquisitions focused on asset protection solutions
Safety First November 2023 One of the largest distributors of PPE in Poland to a range of end markets. This is Bunzl’s anchor acquisition
into Poland, with revenue generated in 2022 of PLN 121 million (c.£22 million)
Grupo Lanlimp November 2023 A market leading distributor of cleaning & hygiene products in Brazil, with revenue of BRL 210 million
(c.£33million) in 2022
Melbourne Cleaning
Supplies
November 2023 A distributor of cleaning & hygiene supplies in Australia. This acquisition expands our customer
propositionand complements our existing businesses. In 2022, the business generated revenue
of AUD 18 million (c.£10million)
Miracle Sanitation Supply December 2023 A cleaning & hygiene distributor in the Canadian province of Manitoba, which strengthens Bunzl’s presence
in the region. The business generated CAD 11 million revenue in 2022 (c.£7 million)
CT Group December 2023 A higher margin distributor of surgical and medical devices and provider of value-added logistics
servicestohealth providers in Brazil, with revenue of BRL 269 million (c.£42 million) in 2022
* In addition to the above acquisitions, two small acquisitions were agreed in 2023 with a combined revenue of c.£4 million in 2022.
** The acquisition supports the expansion of our North America based McCue business and is therefore reported as part of the North America business area.
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 focus on increasing digital sales,
which accounted for 72% of orders over 2023
compared to 69% in 2022. We also continue to
provide our customers with innovative products
and services, including those within our strong
sustainability offering, which enhance our
competitive advantage supporting the overall
good outcome of recent tenders.
Our continued focus on operational efficiencies
included the consolidation of 13 warehouses and
the relocation of 11 warehouses, as well as
continuing to implement new technologies and
automation that drive more efficient processes.
Acquisitions
Over the year, Bunzl agreed 19 acquisitions with
atotal committed spend of £468 million, adding
estimated annualised revenue of £325 million.
These acquisitions, which span 11 countries and
five sectors, further expanding our customer
reach, strategic capabilities, geographic and
sector diversification and highlight the breadth
ofour consolidation opportunities. We are
pleased with the acquisition of Safety First, one
ofthe largest distributors of PPE in Poland. This is
our first acquisition in Poland, providing access to
a potential market of more than 38 million people.
Following this acquisition, there are significant
opportunities for Bunzl to grow in this market.
Bunzl continued to expand its digital capabilities
with the acquisitions of specialist online
distributors in Germany (Arbeitsschutz-Express)
and the Netherlands (EcoTools.nl). Bunzl also
completed three acquisitions in Brazil, adding
afurther c.£124 million of annualised revenue in a
country in which we have grown revenue CAGR by
17% since 2019, with plenty of further
opportunities for growth.
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The proportion of total Group revenue
attributable to non-packaging products or
packaging made from alternative materials
remained high at 85%, with a further 10% of the
Group’s revenue attributable to single-use plastic
consumables which are likely to transition to
products made from alternative materials. We
continue to increase our competitive advantage
by sourcing innovative products, including from
within our own brand portfolio, as well as with our
expert advice, data tools and investments in our
supplier auditing programme.
We have made good progress towards our 2030
scope 1 and 2 carbon emissions reduction targets
that were approved by the Science Based Targets
initiative (‘SBTi’) in 2022. Currently we are
progressing well to achieve our target of a 27.5%
absolute emissions reduction and becoming 50%
more carbon efficient by 2030, having reduced
absolute emissions by 18% and become 30%
more carbon efficient against a 2019 baseline.
Wecontinue to aim to be net zero by 2050 at the
latest, inclusive of scope 3 emissions. We believe
that long term net zero targets need to be aligned
with climate science and as such we have followed
the SBTi’s Net Zero Standard to develop our
transition plan, which details how we will achieve
our 2050 net zero commitment. As with our near
term carbon reduction targets, we have
submitted our net zero transition plan for
approval with the SBTi.
The Group continues to carry out ethical and
quality audits of its suppliers. In 2023, 1,022 of
these audits were completed through our
Shanghai based Global Supply Chain Solutions
team. The majority took place in Asia, as this is the
most significant high risk sourcing market for
Bunzl by spend, but audits were also performed
in other high risk regions. In total, c.96% of our
overall purchasing spend today is either
purchases from low risk regions or with assessed
or compliant suppliers in high risk regions, or on
other non-product related costs.
Our people strategy also continues to drive
strong engagement, as indicated by 75% of our
operating companies that participated in the
CHIEF EXECUTIVE OFFICER’S REVIEW continued
‘Great Place to Work’ programme becoming
accredited. We continue to see encouraging
retention levels across the Group and good
progress was made on our diversity plans.
Prospects
We are maintaining our 2024 profit guidance
published in our pre-close statement
1
.
Following a slower than expected start to the year
in North America, we now expect to deliver slight
revenue growth in 2024, at constant exchange
rates, driven by acquisitions announced in 2023;
with underlying revenue, which is organic revenue
adjusted for trading days, declining slightly. Group
operating margin is now expected to be slightly
below 2023.
Looking ahead, the Group’s longer term
prospects remain attractive, with the Group
committed to its proven and consistent strategy
which supports Bunzl’s continued track record
ofvalue creation. Organic growth, is supported
bynew business opportunities, continual product
innovation, sustainability expertise, and the
Group’s daily focus on becoming more efficient.
Our acquisition growth is driven by our position
as the leading operator of scale in highly
fragmented markets, with a strong balance sheet
and demonstrable track record of our ability to
consolidate. We believe the merits of joining the
Bunzl family have only been strengthened as a
result of the pandemic and supply chain
disruptions, and this is reflected in our recent
acquisition success. We have an active pipeline of
acquisition opportunities in our existing markets,
supplemented by potential acquisitions in new
geographies and adjacent sectors. Our capital
allocation and portfolio optimisation discipline
ensures we are investing to drive a strong return.
Frank van Zanten
Chief Executive Officer
26 February 2024
Overall, acquisitions made during the year have
enhanced the Group’s digital capabilities and
expanded our geographic coverage, own brand
ranges and expertise.
The strength of the Group’s cash conversion and
balance sheet continues to enable the Group to
fund further acquisitions, largely through cash
generated in the year. This ongoing strength has
supported the self-funding of one of Bunzl’s most
successful acquisition periods. Over the last four
years combined committed spend on acquisitions
was approximately £1.7 billion.
Bunzl ended 2023 with net debt to EBITDA of
1.1times, providing the Group with substantial
capacity to self-fund further acquisitions.
Ourpipeline is active, and we see significant
opportunities for continued acquisition growth in
our existing markets where we have opportunity
to increase our presence, as well as potential to
expand into new markets.
Today, Bunzl announces the acquisitions of
Nisbets and Pamark Group. Nisbets is a leading
omnichannel distributor of catering equipment
and consumables in the UK and Ireland, Northern
Europe, and Australasia. This is a high quality
business that will complement the Group’s
existing businesses in the catering distribution
sector. Their extensive range of own brand
products are a good addition to our portfolio and
their digital marketing and sales capabilities will
complement other online-focused businesses
within the Group. Pamark is Bunzl’s first
acquisition in Finland, bringing the Group’s
operations to a total of 33 countries. It is a leading
distributor that provides us with opportunities to
expand in multiple end markets, including cleaning
& hygiene, healthcare, foodservice and safety.
Capital allocation
Our capital allocation priorities remain unchanged
and focused on the following: to reinvest our cash
into the business to support organic growth and
operational efficiencies; to pay a progressive
dividend; to self-fund value accretive acquisitions;
and to distribute excess cash. Our framework
favours the first three methods of investment,
with £2.2 billion of cash distributed to
shareholders through dividends and £5.2 billion
committed acquisition spend between 2004 and
2023, while maintaining a good return on invested
capital of 15.5% (2022: 15.0%). With the strength
of Bunzl’s performance in recent years resulting in
a comfortable leverage position compared to a
net debt to EBITDA target of 2.0 to 2.5 times, there
is significant financial headroom remaining to
commit to self-funded value accretive acquisitions
in our active pipeline of attractive opportunities.
The Board is committed to an efficient balance
sheet which supports investment into the
business and maintains flexibility for value
accretive acquisitions, and also continually
assesses the appropriateness of the return
ofexcess capital to shareholders.
Equitable and sustainable growth
Sustainability remains a key strategic priority,
andthe Group is committed to helping lead the
transition to a more sustainable and equitable
future by continuing to direct our efforts into the
four key areas where we believe we can make
thegreatest positive contribution: providing
alternative packaging solutions; ensuring
responsible supply chains; investing in our people;
and taking action on climate change.
The Group remains focused on transitioning
customers to packaging that is better suited to
acircular economy, with revenue from packaging
made from alternative materials accounting for
55% of the Group’s total packaging sales.
15.5%
Return on invested capital
1
46.1%
Return on average operating capital
1
1. Alternative performance measure (see Note 3 to the
consolidated financial statements on page 160)
1. The guidance does not include the acquisitions
announced today.
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Members of the Executive Committee
Our leadership team
Leaders from across the Group meet regularly to review performance, discuss trends affecting
our businesses and seek further opportunities for growth and competitive advantage.
Frank van Zanten
Chief Executive
Officer
Jim McCool
Chief Executive Officer,
North America
Andrew Tedbury
Managing Director,
UK & Ireland
Alberto Grau
Managing Director,
Continental Europe
Jonathan Taylor
Managing Director,
Latin America
Scott Mayne
Managing Director,
Asia Pacific
Mark Jordan
Group Chief Information
Officer
Diana Breeze
Director of Group
Human Resources
Richard Howes
Chief Financial
Officer
Suzanne Jefferies
General Counsel and
Company Secretary
Andrew Mooney
Director of Corporate
Development
Board of Directors page 90
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OPERATING REVIEW
Our strong operating
margin increase was
primarily driven by good
margin management
initiatives and growth
inown brands.”
Overview
In North America, revenue declined 5.3% to
£6,973.5 million, with underlying revenue
declining by 5.6%. The benefit of a significant
newbusiness win in our processor segment in
thesecond half of 2022 and modest growth from
current year acquisitions was more than offset
byvolume loss in the foodservice redistribution
business. In retail, revenue was also impacted by
planned strategic actions to focus on more
profitable customers and transitioning ownership
of customer specific inventory to certain
customers. Finally, we saw a further decline in
Covid-19 related product sales, driven by the
return to historical price levels of disposable glove
categories. Despite the revenue decline, adjusted
operating profit improved by 2.9%, to £528.0
million with operating margin increasing to 7.6%,
up from 6.9% in the prior year. This was primarily
driven by margin management initiatives and
strong growth in own brands, particularly in our
grocery and foodservice segments, which more
than offset moderating operating cost inflation,
driven by wage inflation being at a more typical
level. Property cost inflation linked to lease
renewals remained high, but was partially offset
by fuel and freight rates declining meaningfully.
Our business which supports the US grocery
sector, declined modestly as we experienced
reducing inflation benefit and some price
deflation towards the end of the year, primarily
driven by the carrier bag and disposable glove
categories. Strong margin management, as well
asstrong growth in own brands, drove overall
improvement in operating margin and adjusted
operating profit. Our convenience store sector
declined moderately.
Our foodservice redistribution business declined.
Deflationary pressure increased price
competition, which alongside process changes
inthe business, to drive more own brand
penetration, resulted in lower volumes. We also
saw an impact on volumes from post-pandemic
normalisation trends, as a result of a reduction
intakeaway packaging sales as dining habits have
continued to shift following the pandemic and
customer destocking activity early in the first half.
Our food processor sector grew modestly, as the
favourable impact of a large customer win in
Q32022 more than offset continued temporary
market weakness in the segment. Our businesses
serving the agriculture sector saw revenues
decline significantly due to the flooding in
California in the first half of 2023 and year-on-year
price deflation as a result of the normalisation
ofsupply chains.
Our cleaning & hygiene business declined
moderately, as year-on-year product costs
reduced, along with Covid-19 related sales
andtheimpact from continued high levels
ofremoteworking.
Revenue in our retail supplies business declined
following planned strategic actions taken to focus
on more profitable customers, transitioning
ownership of customer specific inventory to
certain customers, and some lost business.
However, adjusted operating profit declined only
modestly, amidst a favourable mix shift toward
higher margin packaging and value added
services, increased own brands and well-
controlled operating costs.
Our safety business revenue declined, due to a
reduction in Covid-19 related sales, although
operating margins and operating profit improved
as a result of good margin management as supply
chains stabilised and strong growth in our asset
protection business.
Finally, our business in Canada experienced
slightrevenue growth, with Covid-19 related
salesdecreases offset by growth driven by the
2023 acquisitions of Capital Paper and PackPro,
with operating profit improved due to increased
product margins and well controlled
operatingcosts.
Jim McCool
Chief Executive Officer,
North America
North America
* Alternative performance measure (see Note 3 to the
consolidated financial statements on page 160)
† Based on adjusted operating profit and before
corporate costs (see Note 4 to the consolidated
financial statements on page 162)
Regional highlights
Percentage of Group adjusted
operating profit
*†
54%
Revenue 2023
£6,974m
(2022: £7,366m)
Growth at constant exchange rates
*
(5.3)%
Underlying growth
*
(5.6)%
Adjusted operating profit
*
£528.0m
(2022: £511.5m)
Growth at constant exchange rates
*
2.9%
Operating margin
*
7.6%
(2022: 6.9%)
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Our overall revenue
andadjusted operating
profit growth were mainly
driven by the positive
contributions from
acquisitions made in 2022
and throughout 2023.”
Overview
Revenue in Continental Europe grew by 8.4% to
£2,354.9 million, primarily driven by the benefit
ofacquisitions. Underlying revenue grew by 1.0%,
with the support of product cost inflation partially
offset by volume weakness in most markets and
the decline in Covid-19 related sales.
Adjusted operating profit increased by 14.1% to
£224.7 million, with operating margin increasing
from 9.0% to 9.5% driven by good margin
management, and a focus on improving our
businesses in Turkey to drive profitability in a
hyperinflationary environment. Overall revenue
and adjusted operating profit growth were mainly
driven by the positive contributions from
acquisitions made in 2022 and throughout 2023
and good margin management.
In France, there was some revenue growth in our
cleaning & hygiene businesses. Good growth with
foodservice and healthcare customers and a
benefit from product inflation was largely offset
by the expected decline in Covid-19 related sales
and reduced activity with public sector
customers. Our safety business saw a significant
reduction in sales of Covid-19 related products,
aswell as an impact from reduced public sector
activity, but successfully moved to a new IT
platform enabling more efficient digital tools to be
used to support its operations. The foodservice
specific businesses have grown sales, supported
by inflation.
In the Netherlands, there was very strong
growthin our foodservice business, driven
byhotel, travel and leisure customers, and also
inour non-food retail business, where we had
anumber of new business wins. We saw some
volume weakness inother sectors, with the prior
year benefitting very strongly from the reduction
in Covid-19 restrictions and deflation impacting
our e-commerce fulfilment businesses. Our
grocery and e-commerce fulfilment businesses
successfully consolidated a number of
warehouses into a new facility in the second half
of the year. In Belgium, our cleaning & hygiene
businesses have grown moderately with contract
cleaning and catering customers. In Germany,
growth has been driven by our foodservice
business, which has grown significantly across
allsectors but with hotel customers in particular,
and has also launched a new web platform
targeting smaller customers.
In Denmark, we have seen a slight decline in our
foodservice business as inflation benefits were
more than offset by a reduction in Covid-19
related product sales. Revenues in our safety
business have grown very strongly due to
increased activities from customers in the
renewable energy and pharmaceutical sectors.
Sales in Spain saw very strong growth, driven by
an acquisition and good organic growth despite
areduction in Covid-19 related sales and reduced
activities with industrial packaging customers.
Our safety end user and redistribution businesses
were impacted by the reduction of Covid-19
related sales but still delivered growth overall
withincreased volumes in the base business.
Ouronline healthcare business has grown
strongly on the back of improved pricing
management and better inventory availability.
In Turkey, volumes have declined as we focus
onbusiness that can be profitable in a
hyperinflationary environment, while in Israel,
where we have two small businesses, sales
havedeclined significantly since the start of
theGaza conflict.
In all other countries we have seen a decline in
foodservice aided by inflation and volume growth
but partially offset by lower Covid-19 related sales.
We have continued to increase the percentage of
digital orders from customers and have launched
a number of new webshops, supporting improved
customer retention and enhancing the efficiency
of our business. Our digital capabilities have
alsobeen enhanced through recent acquisitions
(Arbeitsschutz-Express and EcoTools.nl) and the
introduction of digital and demand
managementtools.
Alberto Grau
Managing Director,
Continental Europe
Continental Europe
* Alternative performance measure (see Note 3 to the
consolidated financial statements on page 160)
† Based on adjusted operating profit and before
corporate costs (see Note 4 to the consolidated
financial statements on page 162)
Regional highlights
Percentage of Group adjusted
operating profit
*†
23%
Revenue 2023
£2,355m
(2022: £2,173m)
Growth at constant exchange rates
*
8.4%
Underlying growth
*
1.0%
Adjusted operating profit
*
£224.7m
(2022: £195.1m)
Growth at constant exchange rates
*
14.1%
Operating margin
*
9.5%
(2022: 9.0%)
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Our underlying revenue
growth is driven by strong
product cost inflation,
alongside continued
recovery in certain markets,
in particular grocery,
foodservice and cleaning &
hygiene.”
OPERATING REVIEW continued
Overview
In UK & Ireland, revenue declined by 5.4% as
aresult of the disposal of the UK healthcare
business. Excluding the impact of acquisitions and
last year’s disposal of the UK healthcare business,
underlying revenue increased by 6.1%. This
growth was driven by strong product cost
inflation, alongside continued recovery in certain
markets, in particular grocery, foodservice and
cleaning & hygiene. This positive sales growth,
supported by a continual focus on developing
own brands and good margin management,
delivered a significant increase in operating
margin which improved from 6.6% to 7.6%,
withadjusted operating profit increasing by
8.4%to £103.4 million, and by 21.2% excluding
acquisitions and the UK healthcare disposal.
Our cleaning & hygiene and care businesses
continued to grow with the full year effect of new
customer wins and category additions. The
benefit of inflation reduced in the second half of
the year, reflecting the timing of price increases
inthe equivalent period last year. Our carbon
forecasting tools alongside the introduction of
many environmentally friendly products have
enabled our customers to further improve upon
their own climate targets. The launch of some
new labour-saving cleaning technologies has also
allowed our customers to invest for the future.
Within our care businesses we have also seen
growth with the onboarding of some large
exclusive supplier contracts that launched
inthesecond half of the year.
Our safety businesses grew despite a reduction
ingovernment infrastructure spending and the
slowdown in house building, as a result of new
wins in the transport and building materials
sectors. 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 alongside an increasing shift
towards buying online.
Our grocery and non-food retail businesses saw
slight growth from more business with existing
customers and the securing of a large new
category from an existing grocery customer.
Wecontinued to invest in improving our sourcing
credentials and expanded our work with sister
companies to provide pick and pack services
in-house to enhance the levels of service
available. We saw some new customer wins in our
national online packaging business leveraging our
ability to source globally delivered cost-effective
solutions. Our other packaging businesses
achieved good outcomes on customer tenders
tosecure long term contracts with many existing
customers, despite the deflationary environment.
Our foodservice businesses saw a softening of
demand as the cost-of-living issues coincided
withhigh cost inflation in both food supplies
andlabour. Despite this trend, these businesses
delivered strong growth as a result of good
customer tender retention and new customer
wins, with customers impressed with our
sustainability offering, including our ability to
provide sustainable product alternatives. The
quality of our data has also allowed us to work
closely with customers as they seek to reduce
their impact on the climate and their emissions.
Increased focus on developing more cost-
effective and sustainable own brands is also
making an impact as sales of these products
continued to improve.
Our businesses in Ireland continued to see
goodgrowth, driven by increasing business
withexisting customers and by securing new
customers. We have continued to invest in
developing our operations with the introduction
of new warehouse management systems, which
have further enhanced our service following
therecent launch of innovative inventory
management technology. Data provides us with
valuable insights into our customers’ purchasing
habits, which allows us to recommend valuable
and sustainable delivery solutions to support
agrowing need to reduce carbon emissions.
Thelaunch of several new own brand and
sustainable product ranges has landed well
withcustomers seeking stronger environmental
solutions for the future.
Andrew Tedbury
Managing Director,
UK & Ireland
UK & Ireland
Regional highlights
Percentage of Group adjusted
operating profit
*†
11%
Revenue 2023
£1,366m
(2022: £1,443m)
Growth at constant exchange rates
*
(5.4)%
Underlying growth*
6.1%
Adjusted operating profit
*
£103.4m
(2022: £95.3m)
Growth at constant exchange rates
*
8.4%
Operating margin
*
7.6%
(2022: 6.6%)
* Alternative performance measure (see Note 3 to the
consolidated financial statements on page 160)
† Based on adjusted operating profit and before
corporate costs (see Note 4 to the consolidated
financial statements on page 162)
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Regional highlights
Percentage of Group adjusted
operating profit
*†
12%
Revenue 2023
£1,103m
(2022: £1,058m)
Growth at constant exchange rates
*
5.7%
Underlying growth
*
(3.2)%
Adjusted operating profit
*
£119.6m
(2022: £111.7m)
Growth at constant exchange rates
*
7.5%
Operating margin
*
10.8%
(2022: 10.6%)
Overview
In Rest of the World, revenue increased by 5.7%
to£1,103.2 million, driven by acquisitions, with
underlying revenue declining by 3.2%, caused by
further normalisation of Covid-19 related product
sales, largely in Asia Pacific, reflecting the
non-repeat of some large orders that were
fulfilled in the prior year. The Latin America
businesses were also impacted by lower selling
prices resulting from reduced inbound freight
costs and currency movements over the year.
Overall, the Rest of the World’s adjusted operating
profit increased by 7.5% to £119.6 million with
operating margin increasing from 10.6% to 10.8%,
driven by acquisitions.
In Brazil, our safety businesses experienced
someorganic sales growth and strong margins
asmarket conditions remained stable. Our
healthcare businesses had mixed results with
difficult trading in our private label import
business as prices post-pandemic continued to
normalise, contrasting with strong performances
from our more technical branded medical
distributors. Our hygiene and foodservice
businesses saw lower sales due to increased
competitive pressure, but in both cases margins
increased. Our safety, hygiene and healthcare
presence in Brazil has been significantly
bolsteredby three new acquisitions completed
during the year.
In Chile, our safety businesses saw mixed results.
Our full-range PPE business experienced good
organic growth and improved margins while our
specialty footwear business saw more difficult
trading due to weaker demand in the retail
channel. Our foodservice business also declined
due to weaker consumer demand across the
country and higher competition, although
profitability is still well ahead of 2019.
Our largest business in Asia Pacific, Bunzl
Australia and New Zealand, experienced a
temporary decline in healthcare revenue in the
first half of the year as both the government and
private sectors utilised excess Covid-19 related
inventory. However, the business experienced
very strong growth in cleaning & hygiene and
hascontinued developing specialisation in its
coremarket sectors, which has resulted in a
strong pipeline of new business. The acquisition
of Melbourne Cleaning Supplies in November
2023 further strengthened our cleaning &
hygiene businesses.
Our Australian speciality healthcare business
wasimpacted by reduced government and private
spending, as these customers continue to utilise
inventory procured during the pandemic, but
remained focused on delivering improvements in
its supply chain and continued exploring potential
new opportunities.
Our Australian safety business realised sales
growth in its underlying business, benefitting
from several new business wins in its direct to
end user division. However, this was offset by a
reduction in Covid-19 related product sales and
customers reducing their inventory holdings
inour redistribution division. Our emergency
services business had a very strong finish to
theyear, securing several key government orders
in the fire and rescue segment.
In New Zealand, our MedTech and specialist
healthcare businesses had strong results for the
year as demand returned in the public health
sector. Both businesses benefitted from improved
supply chains and a strong portfolio of brands
that are well supported in our specialist segments.
Rest of the World
Jonathan Taylor
Managing Director,
Latin America
Scott Mayne
Managing Director,
Asia Pacific
* Alternative performance measure (see Note 3 to the
consolidated financial statements on page 160)
† Based on adjusted operating profit and before
corporate costs (see Note 4 to the consolidated
financial statements on page 162)
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CREATING
and
INNOVATING
Our Tillman own brand
gloves provide industry
leading standards of
comfort and protection
to get the job done
CREATING AND INNOVATING
Growing our strong exclusive own brand
portfolio supports our value proposition,
and improves customer stickiness.
c.25%
Group revenue generated
through own brand sales
We offer a variety of different own brand
solutions to meet specific customer needs:
• Innovative exclusive own
brandsthatmeet the highest
qualitystandards
• Commodity and unbranded
products – cost-effective alternatives
that meet atailored need
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and
CASE STUDY:
Safety – A consistent leader
in the market
Bunzl’s safety businesses have own brand
penetrations that are much higher than the
Group’s average level, with most of our safety
businesses having over 80% penetration. Our
products span the full spectrum of both value
andpremium positioning, covering full head-to-
toe protection, as well as expanding into attractive
adjacencies like asset protection.
Our own brand focused safety businesses occupy
a position higher up in the value chain, as brand
owners. We design products and own the
intellectual property and licenses for leading
proprietary fabrics. The manufacturing is then
outsourced to third-party suppliers, on contracts
which are highly flexible.
Our products and brands are known for their
highlevels of compliance, quality and reliability.
Some of our brands include:
MCR Safety
PPE provider established over 50 years ago,
currently offering over 5,000 SKUs
Tillman
Established 90 years ago. Exceptionally strong
position in welding PPE, with over 1,000 SKUs
Kishigo
Over 50 years of experience specialising
in top quality high visibility clothing
Tingley
Established 1896, specialists in rubber
footwearand clothing
CASE STUDY:
Cleanline – Own brand focus to
enhance our customer proposition
Cleanline is Bunzl’s own brand range of highly
specialised workplace and industrial cleaning
solutions sold throughout the UK & Ireland. Prior
to 2019, the brand was viewed as a cost-effective
alternative to third-party branded suppliers.
Over the last five years, Bunzl has strategically
focused on innovating the products and brands,
such as Cleanline, across our own brand portfolio
in order to compete more effectively across the
entire value spectrum and thereby improve our
overall proposition for customers.
Results:
>100%
Revenue growth since 2019
48
Innovative SKUs
developed
Q&A:
Amy McLauchlan, Exclusive Brand
Manager, Bunzl UK & Ireland
Q. What have been the key factors
inthesuccessful growth of Cleanline
duringthelast few years?
We noticed that the products Cleanline
competes with are manufactured
internationally, so they are not really tailored
tothe UK market. We were able to be more agile
with our product development and focused on
adapting and improving our existing products
competing in this market, increasing their
effectiveness and compliance. This ranged
frombringing in innovations, such as adding
QRcodes to labels which linked users through
todedicated product microsites showing how to
use our products safely, to switching
manufacturers, allowing us to upgrade the
performance and specifications of our products.
Q. How do you find and develop
productinnovations to maintain
yourcompetitive edge?
We rely on the expertise of our purchasing
andsales managers to identify potential
opportunities in the market for product
development. They have close relationships
withour customers, and understand the
problems that they face, and we are able to
useour deep network of suppliers to source
andoffer solutions.
Q. What role does sustainability
playincontinuing growth?
Increasingly, we are developing more
sustainable solutions to incorporate into our
offering. For example, we have introduced
newconcentrate ranges, which reduce waste
from the packaging, transport, and storage
ofproducts. We have rich sources of customer
and product data which we input into our
sustainability calculators to show customers
theimpact of switching to a more sustainable
solution. We are increasingly finding that when
customers want to reduce their plastic waste,
they come to us to find them a solution.
...IN ACTION
INNOVATING
CREATING
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MARKET DYNAMICS
Focusing on attractive end
markets with structural growth
Our GDP plus underlying growth model is supported by activity
within our attractive mix of end markets and further supported
by structural growth opportunities across these end markets.
Safety
Cleaning &
hygiene
Revenue opportunity in the
medium term:
Revenue opportunity in the
medium term:
Trends
• Increasing levels of safety
standards and compliance
• Greater employee
well-being focus
• Potential increased spending
through Infrastructure
Investment and Jobs Act
Trends
• Enhanced cleaning protocols
• Technology to improve
cleaning efficiency
• Increasing return to office
working
• Opportunity to support
customers with innovative
sustainable solutions
Healthcare Grocery
Revenue opportunity in the
medium term:
Revenue opportunity in the
medium term:
Trends
• Growth of care at home
andageing population
• Increased focus on
preventative healthcare
Trends
• Willingness to outsource
non-food essentials
• Sustainable packaging
growthwith transition
toalternative products
• Omnichannel strategy supports
broadening of product range
Foodservice Retail
Revenue opportunity in the
medium term:
Revenue opportunity in the
medium term:
Trends
• Eating away from home
• Home delivery
• Sustainable packaging
growthwith transition
toalternative products
Trends
• Bricks and mortar retail
underpressure
• Omnichannel strategy
offsetsthis; online retail
isagrowth area
• Sustainable packaging
growthwith transition
toalternative products
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Inflation dynamics
Reducing inflation benefit over the year:
Product cost driven selling price inflation
• Remained supportive, but with a reducing
benefit over the year
• Inflation in North America fully annualised in H2
with price deflation towards the end of the year
• Inflation that lagged in Europe and UK & Ireland
continues to annualise
• Overall good tender outcomes from elevated
activity in2023, following reduced activity
during the pandemic
Operating cost inflation
North America
• Moderating operating cost inflation driven
bywage inflation back to more normal levels
• Property inflation remains high, but fuel
andfreight rates declined meaningfully
UK & Ireland and Continental Europe
• Higher wage inflation, as expected,
butmanageable
2023 sector developments
Bunzl’s diversification across sectors and geographies is key to its resilience, with
Bunzl alsobenefitting from structural end market drivers.
Sector 2023 sector commentary
2023
revenue as %
ofGroup total
Underlying
revenue
1
2023 vs 2019
Underlying
revenue
1
2023 vs 2022
Healthcare
• Healthcare declined in Rest of the World,
driven by normalising Covid-19 related
sales in Asia Pacific and continued
deflationin Latin America, which offset
growth in the other business areas
32%
vs 31% in 2022
6% (1)%
Safety
• There was a slight decline in safety,
withcontinued recovery in some
businessareas offset by normalising
Covid-19 related sales. Infrastructure
spend in North America is a potential
medium termsupport
Cleaning
& Hygiene
• Continued recovery across most business
areas, particularly in UK & Ireland and
Restof the World
Grocery
2
• Continued support from inflation in
Continental Europe and UK & Ireland
30%
vs 29% in 2022
23% 2%
Foodservice
• Volume weakness in North America
foodservice due to deflationary pressure
increasing price competition, which
alongside process changes to drive more
own brand penetration, resulted in lower
volumes. In addition, there was a reduction
from post-pandemic normalisation trends.
Partially offset by strong growth in UK &
Ireland, driven by inflation
38%
vs 40% in 2022
11% (8)%
Retail
• Retail was impacted by the planned
strategic actions in North America
tofocuson more profitable customers
andthe decision to transition ownership
ofcustomer specific inventory to
certaincustomers
1. Alternative performance measure (see Note 3 to the consolidated financial statements on page 160).
2. Also includes the ‘Other’ sector.
Bunzl 2023 operating
margin drivers:
• Good margin
management (including
increased own brand
penetration)
• Focus on acquiring
businesses which have
higher margins than
Group average
• Continued strategic
focus on operational
efficiencies
• One-off benefits in the
second half of the year
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OUR BUSINESS MODEL
We provide essential,
tailored, business solutions
A one-stop-shop
Our service and value proposition for our customers
We provide our customers with essential items that are necessary for
their businesses to operate. We reliably source, consolidate and
deliver these items through customised solutions, providing both
efficiency and value-added benefits.
We source
• Sourcing experts and category
specialists
• Global supplier relationships
• Own brand portfolio
• Innovative product sourcing,
including those well suited to the
circular economy
• Customer-specific products
• Competitive prices
We consolidate
• One-stop-shop for all products in
a single delivery
• Customised digital solutions
• Integrated ordering systems
• Analytical support to improve
efficiencies
• Carbon savings through
consolidated deliveries
We deliver
• On-time, in-full delivery; received
just-in-time
• Multiple delivery options that
include direct to site, cross dock or
warehouse replenishment
• Extensive distribution network
with regional and national
coverage
By providing our customers with a
broad range of essential items, readily
available from stock, alongside
specialist knowledge and expertise,
we provide the reassurance our
customers need for important
items, which allows them to
focus on their core
businesses. The value of our
service to our customers
goes far beyond the cost
of the products sourced.
Product
cost
Innovation costs
Cost to process
Cost of failure
Working capital investment
Sustainability risks
Logistical infrastructure
Established product expertise and supplier network
Saving our
customers
product cost is
just the tip of
the iceberg
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Tailored solutions and value-added services
Adding value to our customers’ operations,
ensuring products sourced meet our
customers’ needs and they receive their orders
on-time and in-full.
Our people
Our c.6,500 sales experts and local customer
service specialists provide detailed advice to
customers on all product and service-related
matters.
Global and ethical sourcing
Working with suppliers to give our customers
access to the best products and solutions,
withthe reassurance that they have been
ethically sourced.
Decentralised model
Comprising c.150 operating companies, with a
decentralised operational structure, Bunzl’s
management teams focus on their customers’
needs in their local markets and create an
energised entrepreneurial environment.
Sustainable and responsible solutions
Our depth of expert advice, own brand ranges
and priority data help our customers navigate
the complex transition to newproducts and
solutions.
International scale
With operations in 33 countries, our extensive
distribution networks mean we can deliver to
customers on a local, regional, national and
international basis. We can show agility locally
while being able to share expertise and
knowledge across the Group.
Carbon efficient model
Our consolidation model achieves a reduced
carbon footprint in comparison to competitors
who process smaller, unconsolidated orders.
Acquisition track record
We have a strong track record of successfully
integrating acquisitions, helping us to grow our
geographic footprint while retaining the ‘local’
feel of our acquired businesses.
Digital capabilities
Our tailored digital solutions enhance the
experience for our customers, supporting
customer retention, while increasing the
efficiency of our own operations.
Own brand portfolio
We have a growing portfolio of own brand
solutions that meet specific customer needs.
Our sources of competitive advantage Generating value for all our stakeholders
Customers
72%
of customer orders
processeddigitally
Colleagues
c.75%
of our operating companies
participating in our pilot
scheme accredited by ‘Great
Place to Work’
Environment
18%
reduction in absolute scope
1and 2 carbon emissions
since 2019
(2022: 69%) (2022: 15%)
Shareholders
8.9%
dividend per share increase
to68.3p
Suppliers
1,022
supplier audits conducted
in2023
Environment
30%
more carbon efficient
since2019
(2022: 62.7p) (2022: 930) (2022: 24%)
Shareholders
31 years
of consecutive annual
dividendgrowth at
c.10% CAGR
Suppliers
750
largest suppliers engaged
with in 2023 over setting their
own science-based emissions
reduction targets
Colleagues
22%
senior leadership roles filled
by women
(2022: 20%)
*
* 2% increase compared to the same
population in 2022
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SUPPORTED BY INVESTMENTS
IN SUSTAINABILITY AND DIGITAL
Sustainability
Sustainability is a vital part of the equation. Our depth of expert
advice, own brand ranges and proprietary data helps our customers
navigate the complex transition to new products and solutions.
Responsible supply
chains
c.96% of our purchasing spend
today is either in low risk
regions, or with assessed and
compliant suppliers in high
risk regions.
Investing in a
diverse workforce
Encouraging more women
into leadership roles and
continuing tobuild a truly
inclusive culture across Bunzl.
Taking action on
climate change
Reduce carbon footprint and
get to net zero by 2050 at the
latest.
Providing tailored
solutions
Significantly increasing the
amountof recyclable,
compostable or reusable
packaging supplied to our
customers to help them meet
their targets.
Digital capabilities
Our tailored digital solutions enhance the experience for our
customers, supporting customer retention, while increasing the
efficiency of our own operations.
How we create long term
sustainable value:
OUR PURPOSE-LED STRATEGY
Reliability TransparencyHumility Responsiveness
OUR PURPOSE
To deliver essential business solutions around
the world and create long term sustainable value
for the benefit of all our stakeholders.
Delivered through our values
A COMPOUNDING STRATEGY THAT CONSISTENTLY DELIVERS
Our strategy is founded on organic growth, operating model improvements and growth
through acquisition, with a commitment that growth is sustainable and equitable.
Within these core pillars, our strategic priorities enable Bunzl to maintain and strengthen
its competitive advantages.
1. Profitable organic growth
Use our competitive advantage to support
the growth of our customers and to
increase our market share.
2. Operating model
improvements
Daily focus on making our business
moreefficient.
3. Acquisition growth
Use our strong balance sheet and
excellentcash flow to consolidate
ourmarkets further.
Read more page 27 Read more page 28 Read more page 29
SUPPORTED BY INVESTMENTS
IN SUSTAINABILITY AND DIGITAL
Sustainability
Sustainability is a vital part of the equation. Our depth of expert
advice, own brand ranges and proprietary data helps our customers
navigate the complex transition to new products and solutions.
Responsible supply
chains
c.96% of our purchasing spend
today is either in low risk
regions, or with assessed and
compliant suppliers in high
risk regions.
Investing in a diverse
workforce
Encouraging more women
into leadership roles and
continuing tobuild a truly
inclusive culture across Bunzl.
Taking action on
climatechange
Reduce carbon footprint and
get to net zero by 2050 at
thelatest.
Providing tailored
solutions
Significantly increasing the
amountof recyclable,
compostable or reusable
packaging supplied to our
customers to help them meet
their targets.
Digital capabilities
Our tailored digital solutions enhance the experience for our
customers, supporting customer retention, while increasing the
efficiency of our own operations.
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Profitable organic growth
ISS is a workplace experience and facility
management company we have had a
partnership with in Spain for the last seven
years.We retained the contract with them
following a 2023 retender process, which
highlights the value of Bunzl’s proposition
andinvestments that drive ‘stickiness’.
Elements of our value proposition which
drove the successful retender:
• Network capabilities and reliability
• Carbon reduction tools and focus
• Own brands and digital capabilities
• Sustainable products and capabilities
Network capabilities and reliability
• Our strong national network supports an
average of >200 deliveries across their sites
each working day
• Bunzl acquisitions in 2023 further enhanced
our regional strength
• Strong supply chain and inventory management
underpin our reliable fulfilment
Own brands and digital capabilities
• Strong representation of Bunzl own brands
within the portfolio of products delivered
• Our ability to host a customised digital platform
• Our investment into digitalised processes
drives efficiency
Carbon reduction tools and focus
• Bunzl’s proprietary carbon footprint tool
supports carbon reduction through more
efficient ordering patterns
• Tailored delivery options further support
reduced last mile carbon emissions
• Our ability to support ISS’s carbon reporting
through reliability of our data
Sustainable products and capabilities
• Ongoing projects and product developments
are supporting the transition to solutions
better suited to a circular economy
• Bunzl’s credentials and commitments to
sustainability, including Bunzl’s Equality and
Diversity policy
We are constantly delivering
organic growth, both by
expanding and developing our
business with existing customers
and by gaining new business with
additional customers.
This is driven by activity in our
markets:
• Our commitment to continually enhance
thevalue-added proposition we provide our
customers supports our GDP plus organic
revenue growth model
• We focus on attractive end markets with
structuralgrowth
• We continue to invest in solutions that support
our offering, such as sustainability, digital and
own brands. This drives new business wins and
increases wallet share
• A net inflationary environment would support
revenue growth in the medium term
• Supporting the growth of our customers
through the essential products and services
weprovide fuels our own growth
STRATEGY IN ACTION
Elements of our value proposition which drove the successful retender:
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We continually strive to improve
the quality of our operations and
to make our businesses more
efficient and sustainable.
We continue to focus on strategic
initiatives that drive operational
efficiencies:
• Warehouse relocations and consolidations
• Investments in IT systems, digital solutions
anddelivery, routing and energy efficiencies
• Global purchasing synergies and inventory
management
Group-wide warehouse relocations and
consolidations
24
Route optimisation software in
North America
In 2023, we implemented improved route
mapping software in our North American
Distribution Division. The platform has improved
route automation capabilities compared to our
prior solution.
The platform fully automates daily routing
toeliminate delivery miles, maximise product
delivered per truck, and optimise the number
offleet trucks needed per day, resulting in cost
savings and a reduction in both our own and
ourcustomers’ carbon footprints.
Additionally, use of the platform identified
opportunities in some locations within our
network to further optimise our delivery routes
on a weekly basis by maximising daily route
density. This required working in collaboration
with our customers to reorganise and agree new
delivery schedules, which have enabled us to
achieve even further cost savings at these
locations (including carbon reductions). Further
implementations are ongoing in collaboration
with customers for 2024.
Results achieved since implementation:
• Average increase in cubic volume per route 6%
• Average decrease in delivery cost as a % of
sales in this area 0.4%
SAN FRANCISCO
Santa Rosa
Ukiah
Red Bluff
Redding
Chico
Oroville
Yuba City
Reno
Truckee
Carson
South Lake
Roseville
SAN JOSÉ
Paso Robles
Salinas
Santa Cruz
Monterey
Oakland
Napa
Lodi
Modesto
Turlock
Merced
Madera
San Luis Obispo
Santa Maria
Bakersfield
Delano
Porterville
Tulare
Hanford
Visalia
SACRAMENTO
FRESNO
STRATEGY IN ACTION continued
Operating model improvements
Key
Warehouse
Monday
Tuesday
Wednesday
Thursday
Friday
Weekly dynamic
routing opportunity
identified in San
Francisco
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Acquisition growth
We seek out businesses that
satisfy key criteria, including
having good financial returns,
while at the same time providing
opportunities to extract further
value as part of the Bunzl Group.
Our strong track record of acquiring businesses
continued in 2023 with our total committed
spendof £468 million exceeding our average
ofc.£425million committed spend over the last
three years. The opportunity for growth is
significant because:
• our fragmented markets offer consolidation
opportunities;
• strong potential for growth across our
endmarkets;
• our disciplined capital allocation and
commitment to portfolio optimisation; and
• our balance sheet is strong and we have
significant financial headroom.
We continue to explore opportunities in new
attractive end markets. Before entering into a
new country we consider a number of different
criteria, including a detailed analysis of our market
sectors, the local macroeconomic indicators and
the ease of doing business in, and the political
risks and business practices.
Country
Food-
service Grocery
Cleaning
& Hygiene Safety Retail
Health-
care
USA
Canada
Mexico
Puerto Rico
UK
Ireland
Germany
France
Italy
Spain
Netherlands
1
Belgium
Denmark
Norway
Finland
Switzerland
Austria
Country
Food-
service Grocery
Cleaning
& Hygiene Safety Retail
Health-
care
Czech Republic
Hungary
Romania
Poland
Israel
Turkey
Brazil
Chile
Columbia
Argentina
Peru
Uruguay
Australia
New Zealand
China
Singapore
11
Bunzl has made acquisitions
across 11 countries
5
sectors highlights range of
consolidation opportunities
Bunzl has an existing presence
Completed at least one acquisition in the sector since 2018
New country expansion since 2018
Total committed spend over the
last four years
£1.7bn
Announced acquisitions
since 2004
214
Total committed spend
between 2004 and 2023
£5.2bn
2023 committed acquisition
spend of
£468m
1. EcoTools.nl was an acquisition in the ‘other’ category and is not reflected in the above table
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Rapid growth in Brazil with strong
opportunities for further expansion
Brazil is one of the top 10 largest economies
inthe world, and is a highly attractive and
fragmented market in which we see plenty
ofopportunities for both further organic and
acquisition growth. Bunzl first entered this
marketin 2008 with the acquisition of Prot-Cap,
since which we have completed a further 17
acquisitions to build a business which generated
c.£400 million revenue in 2023.
In 2023, we completed three new acquisitions in
Brazil, adding a further c.£124 million annualised
revenue which:
• further consolidate fragmented markets;
• enhance our presence and geographic
coverage in the Brazilian market;
• expand our own brand offering; and
• provide further synergy opportunities.
A market leading distributor of cleaning and
hygiene products in Brazil, with revenue of
BRL210 million (c.£33 million) in 2022.
A specialised high margin safety distributor
inBrazil, with a strong own brand portfolio,
whichgenerated revenue of BRL 216 million
(c.£34million) in 2022.
A distributor of surgical and medical devices and
provider of value-added logistics services to
health providers in Brazil, which, enhances Bunzl’s
national presence and expand our product
offering. In 2022, this higher margin business
generated revenue of BRL 269 million
(c.£42million).
Bunzl’s growth in Brazil
18
acquisitions since 2008
2019 to 2023 revenue CAGR:
17%
2019 to 2023 adjusted operating profit
CAGR:
29%
Q&A:
With Groveko’s Managing Director,
Romke Romkes
Q. Can you give us an introduction to
yourself and your company?
Groveko is an innovative and leading provider
ofcleaning & hygiene solutions based in the
Netherlands. Alongside wholesale cleaning
products, the company is also focused on
innovative robotic and smart cleaning solutions.
This focus on continuous innovation has fuelled
the company’s growth in the last few years, with
increasing demand for robotics and smart
solutions that reduce the manual labour on
heavycleaning tasks like scrubbing and
vacuuming. We also have a digital solution that
helps optimise customer inventory and
eliminates manual ordering. I joined Groveko
inOctober 2017 initially as Finance Director and
became the Managing Director three years later,
before selling to Bunzl in August 2023.
Q. Why did you choose to sell
to Bunzl in particular?
The cultural and strategic match between
Groveko and Bunzl was very important.
Bunzloffers international knowledge and
support on sustainability, digital innovation
andIT, and also provides cross selling
opportunities and purchasing synergies, but
they leave us with enough commercial freedom
to keep the Groveko label and our team’s
entrepreneurial spirit.
Q. What are your plans for the future now
that you are a part of Bunzl?
We are very focused on achieving profitable
growth as part of Bunzl. In the short term this
means focusing on achieving purchasing
synergies and implementing cross selling
opportunities with other Bunzl businesses,
some of which have already started looking at
our cleaning robots. We will also leverage the
expertise within Bunzl to improve our operating
model and we are already discussing specific
potential acquisition targets.
Digitalisation is also high on our radar and we
are looking to increase the percentage of digital
orders further. Being part of Bunzl is helping to
provide a clear evolution in our processes and
more structured approaches in many areas,
such as health and safety, sustainability, IT and
finance. This is helping us to grow the company
in a sustainable way. On sustainability, we hope
to become the front runner in our market,
withknowledge of how to translate new laws
and regulations into more sustainable
commercial offers.
STRATEGY IN ACTION continued
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Investing in fast growing, high margin
specialist online distributors
Over the last few years, we have acquired a
number of similar specialist digital businesses.
Overall, they now account for around £260 million
of annualised revenue, with a double digit margin.
These businesses are operating in especially
fragmented markets, which gives them great
growth potential. They are focused on targeting
smaller B2B customers, who require the expert
advice and specialist customer support that they
can provide.
The digital specialists within these companies also
contribute to the Group’s overall development of
its digital capabilities, generating opportunities
for synergies, and helping to accelerate the
growth of our other businesses.
Safety First acquisition
Our first acquisition
inPoland, one of two
new countries
In July, Bunzl signed an agreement to acquire
Safety First, one of Poland’s largest distributors
ofPersonal Protective Equipment products to
arange of end markets. This is Bunzl’s anchor
acquisition in Poland, achieving our first entry into
the country, which has been a key target for
expansion. Safety First generated PLN 121 million
(c.£22 million) of revenue in 2022.
As a result of this acquisition, and the recently
announced acquisition of Pamark Group, Bunzl's
first in Finland, Bunzl now has operations in a total
of 33 countries around theworld. With many of
our deals being sourced by local teams, each new
market we enter opens up a wealth of new
acquisition opportunities for Bunzl to further
consolidate our fragmentedmarkets.
The acquisition in Poland will provide us with
access to a potential market of more than
38million people. Following this anchor
acquisition, there are significant opportunities
forBunzl to grow in this market.
Bunzl’s specialist online business
33
Bunzl now has operations
in 33 countries
38 million
providing access to a potential
market of more than
38 million people
Safety First HQ
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Our people act as an extension of our customers’
teams, with deep knowledge of their businesses
acquired over the course of multi-year
relationships.
DEVELOPING AND IMPROVING
We are able to provide responsive and agile
tailored specialist support for customers at
alocal level. With the backing of the resources
and support, our teams are able to leverage
Bunzl’s global scale.
6,500
sales experts and local customer
service specialists adding value
for our customers
We are committed
to providing
comprehensive
training and
development
opportunities that
empower our people
to excel in their roles
DEVELOPING
and
IMPROVING
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CASE STUDY:
Acquisition integration training
During the year, a global team of experts from
across the Group worked cross-collaboratively
toshare their experiences and best practices to
create a training programme for ensuring the
smooth onboarding of new acquisitions. The
training has been rolled out across the Group,
andhas been used to help onboard recent
acquisitions, such as Melbourne Cleaning
Supplies(MCS) in Australia.
The training series is very comprehensive and
hassix modules, Culture & People, Finance,
Procurement, Sales, Operations, and Information
Technology, that cover core focus areas, tools, and
best practices of acquisition integration.
For example, the Culture & People module covers
key points on managing changes in leadership
and the importance of creating and delivering an
effective communication strategy to engage with
the new Bunzl team members.
In the case of MCS, besides being used to
welcome our new colleagues to the Group, there
has also been a specific focus on identifying initial
purchasing synergies, to ensure supply chain
continuity and early cost saving opportunities
were prioritised.
The Procurement training module leads the teams
through how to create a combined team based
approach to achieve the potential synergies which
had been identified during the acquisition process.
The training is designed to help the category
teams collect and review data to understand the
acquired company’s current supplier, product, and
pricing information and how to negotiate terms
and pricing improvements, keeping an eye out for
both short term wins and longer term advantages.
Our comprehensive
acquisition training
programme supports a
smooth and successful
transition into Bunzl
DEVELOPING
IMPROVING
The acquisition training
hashelped our team ensure
that MCS has a smooth and
successful transition into
Bunzl. I especially liked the
real life Case Studies used
inthe training to learn
firsthand from other
BunzlLeaders across
theGroup about their
acquisition experiences.”
Lance Ward
Managing Director
Bunzl Australia
and New Zealand
...IN ACTION
and
NEW SPLASH PAGE DESIGN
Q&A:
Alastair McLaughlin, Managing
Director, Bunzl Ireland
Q. Could you give us a bit of background
toyour role and how you joined Bunzl?
I joined our family hotel supply business,
Thomas McLaughlin Ltd., in 1983 for a one-year
project from university to computerise the
business. I never returned to university! I
continued to work with my father and brothers
as we developed a successful and market
leading business. Bunzl approached us and
acquired the business in December 2002. I was
appointed MD for Ireland in 2005. We have
made six acquisitions and also achieved
significant organic growth in Ireland since.
Q. What have you enjoyed most about
yourtime at Bunzl?
I enjoy working in a business of Bunzl’s scale
andresources, however, the decentralised
management structure has been key. Our local
teams have grown successfully with the ability
totap into wider group knowledge and
experiences as required.
Q. What has been the most useful lesson you
have learned during your career at Bunzl?
Always provide great products and services,
andemploy great people to look after your
customers. In turn those customers will
remainloyal and continue to buy from us
yearafter year.
Q. What have you been most proud
of during your career with Bunzl?
Expansion of the Irish business – I now manage
a business 12 times the size of our original family
business, backed by the investment and
development of the Bunzl infrastructure in
Ireland. The continual development of our
people and management teams throughout
each of our five operating companies in Ireland
has also been really fulfilling to see.
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Investing in a diverse workforce
is fundamental to our success
At Bunzl we believe that motivated people create
happy customers. In 2023 we have continued our
work on monitoring employee engagement and
developing our employees to ensure that they are
able to fulfil their full potential
OUR PEOPLE
Diana Breeze
Director of Group
Human Resources
Recognising the importance
ofemployee voice is vital in
facilitating prolonged and
sustainable company growth.
In2023, we have continued to
encourage an open, honest and
transparent environment and
believe that this helps us to make
Bunzl a positive and productive
workplace. Extending our use of
the Great Place to Work survey
has provided us with further data
and insights into how it feels to
work for Bunzl.”
Following the successful pilot of the Great Place
toWork survey in Continental Europe in 2022,
weextended the survey to all regions. We
surveyed 10,300 of our people, representing
approximately 45% of our global population to
give us a greater insight into their views on both
what makes Bunzl a great place to work and how
we can make improvements.
We plan to use the insight from this survey along
with those from our 2022 communication pulse
survey, to determine our approach to effectively
measuring and analysing employee voice
goingforward.
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Great Place to Work Survey
The Great Place to Work survey is a recognised
tool for assessing employee’s perception. The key
principle of the survey is that it measures the level
of trust that employees have in their company
and its leadership.
The survey measures 5 key pillars of trust:
Credibility Integrity, communication and
competencies
Respect Support, collaboration and
consideration
Pride In your job, team and company
Camaraderie Feeling of welcoming and
belonging
Fairness Equality, impartiality
& justice
Results are measured by two key metrics:
• Trust Index (‘TI’) – the average number of
positive responses to the question; and
• Overall Perception (‘OP’) – positive answers to
the question “Taking everything into account,
Iwould say this is a great place to work”.
84%
Participation rate
69%
Trust Index
70%
Overall Perception
75%
Operating companies who
took part were certified
Global results
89%
This is a physically
safe place to work
84%
When you join the Company,
you are made to feel welcome
81%
Management is honest and
ethical in its business practices
North America
Trust Index – 70%
Overall Perception – 72%
Continental Europe
Trust Index – 68%
Overall Perception – 67%
Latin America
Trust Index – 69%
Overall Perception – 74%
UK & Ireland
Trust Index – 74%
Overall Perception – 75%
Asia Pacific
Trust Index – 68%
Overall Perception – 69%
70%
Credibility Respect Pride Camaraderie Fairness
67% 70% 72% 68%
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OUR PEOPLE continued
Great Place to Work in action
in Bunzl Continental Europe
Following the first Great Place
toWork survey in 2022, several
initiatives and improvements
were made which we believe
helped the region further improve
their scores in 2023. Some of the
key initiatives and improvements
are summarised here.
Communications
• Our digital tool Connect has become the
essential tool for internal communications and
training across the region.
• The average monthly activity usage rate
is74%with 6,600 activated accounts
across15countries.
• It is used at regional level for communications,
training and surveys and at local level for
onboarding of new employees, sharing news,
employee access to training academies and
asa policy and benefits hub.
Leadership Development
• Continuing to develop leaders and future
leaders through programmes such as BCE
Leadership Programme, Grow Together in
Central and Eastern Europe, Bunzl France
Academy and Bunzl University in Spain.
Our people are key to our
success. Following the Great
Place To Work survey in 2022,
we initiated actions in all
teams to further develop
employee engagement, pride
and belonging. We achieved
our certificate in 2023 and can
proudly say that 92% of our
employees consider MultiLine
as a great place to work.”
Kim Pedersen
Managing Director,
MultiLine, Denmark
Diversity, Equity & Inclusion
• Diversity, Equity & Inclusion training has been
delivered to all Continental Europe employees.
• We have continued to run the successful Wings
programme in Central & Eastern Europe. 46%
of employees in this region are now female and
the number of female leaders has increased to
42% from 30% in 2022. In Romania, 60% of our
leadership population is now female.
• France and Spain have signed and committed
to the European Commission’s Diversity
Charter to raise awareness of discrimination
and encourage diverse representation.
• Bunzl France has teamed up with Nos Quartiers
ont du Talent (“Our Neighbourhoods Have
Talent”) to support young graduates from
disadvantaged social backgrounds. The
individuals benefit from mentorship, coaching
and networking opportunities.
• In France, Groupe Pierre le Goff have
introduced a Disability Policy. They have
heldawareness sessions, assigned disability
champions and introduced tools to monitor
theimplementation of the policy. They have
also introduced some ‘Open Our Eyes’ sessions
where prospective candidates are interviewed
without CVs to ensure that recruitment is
focused on their potential rather than past
experience and have encouraged their
employees to take time out of their work day
tohelp with community projects, such as beach
cleaning and distributing meals.
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For Bunzl to achieve its ambition
togrow both organically and via
acquisition, the approach to talent
management needs to be both
agileand strategic. We are
constantly looking at the best ways
of building the capabilities we need
through the development of an
effective employer brand, a
proactive approach to recruitment
and consistent investment in our
own workforce.
We recognise that the employees of the future have
different expectations of their employer. For example
they seek more flexibility in their working lives,
ongoing opportunities to develop their skills, atruly
inclusive culture and a clear sense of organisational
purpose. With this in mind, and given our
decentralised model, we have worked hard to
articulate Bunzl as an exciting place to build a career
and experience a customer focused, transparent and
inclusive culture.
We have also spent some time looking to the future
and establishing the key capabilities which will
underpin the delivery of Bunzl’s 2030 Vision. These
include deeper expertise around sustainability, data
analytics, customer insights and transformational
change delivery. We are making major strides
forward in all of these areas, supported by the
creation of collaborative networks, specific
recruitment campaigns and further investment
inlearning and development.
Developing talent across
the world
Growing our capabilities for the future
Whilst there are some Global initiatives to build these capabilities, for example the creation of a
Global Data forum to share knowledge and learning with over 500 Bunzl leaders, most are regional
driven to fit their local situation and opportunities, some examples are:
• In Australasia new
development products for
sales leaders/managers
have been introduced.
• Targeted recruitment of
graduates and early career
employees to join and be
developed as sales
professionals.
• The teams in the Nordics
have been piloting new sales
capability training.
• Establishing a Project
Management Office in
Continental Europe to
ensure consistent
methodology is used.
• Continental Europe
haveintroduced a digital
marketing bootcamp
forallbusinesses.
• The Young Talent
programme in Continental
Europe established it’s
thirdcohort, expanding the
geographic reach across
theregion.
• Early career recruitment
anddevelopment schemes
according to the needs of
the division have been
established in UK & Ireland
region, including the Retail
Management Academy.
• Increased the network
ofsustainability experts
andambassadors who
workclosely with our
customers to help them
achieve their targets.
• Identification of individuals
who are passionate about
sustainability who want to
support the subject
alongside their existing role.
• Development of training
materials to engage the
wider teams in their region.
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OUR PEOPLE continued
CASE STUDY:
Building Capability in Action
Bunzl North America has significantly
strengthened its analytical and project
management capability during 2023. In recent
years, the team has grown in size by nearly ten
fold and is structured so that it has team
members both embedded in the businesses
for customised support and centrally focused
where it is efficient to do so. In 2023 through
collaborative events this team have delivered
key projects on dynamic routing; site
consolidations and sales opportunities.
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The team in our Asia Pacific
region (APAC) are committed
toattracting, retaining and
upskilling employees through
theactions they take at every
stage of their career.
The formal learning programs targeted at
different groups of employees are Spark, Ignite,
and Accelerate. These are coupled with a diverse
array of learning offerings through the Grow With
Bunzl digital learning platform, empowering
employees to invest in their professional growth.
Building the We Believe employer brand used in
engaging recruitment videos and creating a
vibrant LinkedIn presence , the APAC region have
had great success in a competitive recruitment
market. The increased recognition of the business
in the region has enabled direct recruitment to
senior positions and reduced the reliance on third
parties to source candidates. Most recently the
Graduate programme has demonstrated their
ability to attract high-potential talent. In 2023 the
programme received nearly 500 applicants and all
successful applicants have now moved from the
programme to permanent roles within the region.
Attracting and
developing
people in APAC
CASE STUDY:
Scott Mayne – Journey at Bunzl
Scott Mayne was appointed
in January 2023 to lead the
APAC region in January,
following an extensive
selection process and a six
month handover from Kim
Hetherington. Kim, who had
an impressive 33 years with
Bunzl, continues to have
oversight of the Global
Sourcing operation and
provides ongoing support
toScott and the region in an
advisory capacity.
Scott’s career with Bunzl
began in 2016 when he
joined the business as the
Regional General Manager
ofBunzl Australia and New
Zealand (BANZ) New South
Wales and was promoted to
MD Bunzl Safety two years
later. Scott has benefited
from the Group’s investment
in development and
completed the Senior
Leadership Development
Programme in 2023.
Scott found this
development opportunity
hugely beneficial for the
transition he was making
and has had the
opportunityto apply the
custom designed content
tocurrent opportunities
andchallenges.
In my first year as Managing
Director of APAC the Senior
Leadership Development
Programme has provided
me with a great opportunity
to collaborate with other
leaders from around the
world. I will continue to
benefit from this network
and their experiences as we
grow the APAC region.”
Spark
Supply Chain and
Business qualification
for Customer Service
and Warehousing
employees to kick
start their career.
Allnew employees
complete this tailored
programme ensuring
they are set up
forsuccess.
Ignite
Over 120 people have
participated in face
toface training for
emerging leaders
inAustralia and
NewZealand. This
programme contains
leadership theory and
practical case study
application.
Accelerate
60 senior leaders
across the region have
benefitted from this
development
programme.
Accelerate prepares
current leaders for the
next step into General
Management. It has
astrong focus on
delivering results and
developing people.
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Measuring our
strategic progress
We use the following key
performance indicators (‘KPIs’)
tomeasure our progress in
delivering the successful
implementation of our
strategyand to monitor and
driveperformance.
These KPIs reflect our strategic priorities of
developing the business through organic and
acquisition-led growth and improving the
efficiency of our operations as well as other
financial and non-financial metrics.
Profitable organic
growth
Organic revenue growth %
2023(2.9)
2022 6.8
2021 3.2
2020 5.3
2019(0.2)
(Decrease)/increase in revenue for the year
excludingthe impact of currency translation,
acquisitions during the first 12 months
ofownershipand disposals.
Organic revenue decline of 2.9% was driven by wider
post-pandemic normalisation trends and volume
weakness in certain markets.
Reconciliation of revenue growth
between 2022 and 2023 £m
2022 Currency
translation
Under-
lying
revenue
change
Acquisitions
Disposal
and
hyperinflation
2023
11,797
294
(171)
(18)
12,040
(348)
Revenue down 2.0%, with a 1.9% decline at constant
exchange rates driven by a decline in Covid-19
related sales, reductions in the base business, and
the disposal of the UK healthcare business. This was
partially offset by a 2.5% incremental impact of
acquisitions in 2022 and 2023 and a small impact
from excess growth in hyperinflationary economies.
Operating model
improvements
Operating margin
1
%
2023 8.0
2022 7.4
2021 7.3
2020 7.7
2019 7.0
Ratio of adjusted operating profit
1
torevenue.
Operating margin of 8.0% compared to 7.4% in 2022.
Excluding the impact of acquisitions during the first
12months of ownership, the 2023 operating margin
was 7.9%, up from 7.4% in 2022 (restated at constant
exchange rates).
Return on average
operating capital
1
%
2023 46.1
2022 43.0
2021 43.3
2020 45.4
2019 36.9
Ratio of adjusted operating profit
1
to the average
ofthe month end operating capital employed
(beingproperty, plant and equipment, software,
right-of-use assets, inventories and trade and other
receivables less trade and other payables).
Return on average operating capital up from 43.0%
in 2022 to 46.1% in 2023 driven by an increase
inoperating margin.
Acquisition
growth
Acquisition spend £m
2023 468
2022 322
2021 508
2020 445
2019 124
Consideration paid and payable, together with net
debt/cash assumed, inrespect of acquisitions agreed
during the year.
Committed acquisition spend of £468 million across
19acquisitions.
Annualised revenue
from acquisitions £m
2023 325
2022 299
2021 322
2020 602
2019 97
Estimated revenue which would have been
contributed by acquisitions agreed during the
yearifsuch acquisitions had been completed
atthebeginning of the relevant year
(see Note 9 onpage167).
KEY PERFORMANCE INDICATORS
Measuring our
strategic progress
1. Alternative performance measure (see Note 3 to the consolidated financial statements on page 160).
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Cash conversion
1
%
2023 96
2022 107
2021 102
2020 103
2019 101
Operating cash flow
1
as a percentage of lease
adjusted operating profit
1
(see Consolidated
cashflow statement on page 153).
Another strong year of cash generation
withcashconversion of 96% in 2023.
Financial
Adjusted earnings per share
1
p
2023 191.1
2022 184.3
2021 162.5
2020 164.9
2019 132.2
Adjusted profit for the year
1
divided by the weighted
average number of ordinary shares in issue (see
Note8 on page 166).
At constant exchange rates, adjusted earnings per
share up 2.7% driven by a 6.2% increase in adjusted
operating profit
1
, partially offset by an increase in net
interest expense and a higher effective tax rate.
Return on invested capital
1
%
2023 15.5
2022 15.0
2021 15.1
2020 16.2
2019 13.6
Ratio of adjusted operating profit
1
to the average
ofthe month end invested capital (being equity
afteradding back netdebt, net defined benefit
pensionscheme liabilities, cumulative customer
relationships, brands and technology amortisation,
acquisition related items and amounts written off
goodwill, net of the associatedtax).
ROIC strong at 15.5% due to higher returns in the
underlying business driven by an increase in
adjusted operating profit.
Non-financial
Our commitments Performance What’s next
Responsible supply chain
90% of our spend on
products from all high risk
regions will be sourced from
assessed and compliant
suppliers by 2025.
81% of our spend in high risk regions was sourced from
assessed and compliant suppliers.
c.96% of our purchasing spend today is either in low risk
regions, with assessed or compliant suppliers in high risk
regions, or on other non-product related costs
2
.
Continuing to take a
proactive, risk
based approach to
responsible sourcing by
assessing suppliers of high
risk commodities who are
based in lower risk sourcing
countries.
Investing in a diverse workforce
Encouraging more
womeninto leadership
rolesthrough focused
andtargeted activities
andcontinuing to build a
trulyinclusive culture
acrossBunzl.
22% women in our senior leadership population
2023 22%
2022
3
20%
Promote female role models
through a focused
programme of
communications and
extended networking events
such as female leadership
conferences.
Senior leadership group defined as the 506 leaders that
receive share awards as part of their remuneration. Since
2016, the number of women in our senior leadership group
has more than doubled.
Taking action on climate change
Scope 1 and 2: 50% more
carbon efficient (equivalent
to a 27.5% absolute
reduction) by 2030 (against
a2019 baseline).
Scope 3: 79% of
suppliersbyemissions
willhave science-based
targets by2027.
Net zero by 2050 at
thelatest.
18% reduction in absolute
emissions since 2019.
Absolute carbon emissions
(tonnes CO
2
e)
30% improvement in
carbon efficiency
since2019.
Emission intensity (tonnes
CO
2
e per £m revenue)
Working with our key
suppliers to deliver our
newscience-based scope 3
emissions target (engaging
them on the requirement
toset science-based targets
by 2027).
See page 52 for
more information.
2023 115,382
5
2019 141,320
4
2023 9.7
5
2019 13.8
4
Providing sustainable solutions
Significantly increasing the
amount of recyclable,
compostable or reusable
packaging supplied to
our customers to help them
meet their targets.
55% of packaging made from alternative materials in2023.
85% of Group revenue attributable to non-packaging
products or packaging products better suited to a
circulareconomy.
2% of revenue generated from consumables
facingregulation.
Engaging our key customers
in the retail, grocery and
foodservice sectors using
our material footprint tools
and developing a new
solution to effectively
advisecustomers on the
carbon impact of the
products they source.
1. Alternative performance measure (see Note 3 on page 160).
2. Includes freight, duties and FX related costs.
3. Compared to the same population in 2022.
4. Emissions in our baseline year have been recalculated to reflect the impact of acquisitions. Emissions intensity
has been recalculated using revenue at constant currency. This process has been agreed with the SBTi.
5. Included in the external auditors’ limited assurance scope. See the data assurance statement on the Company’s
website, www.bunzl.com.
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Our depth of expert advice, own brand
ranges and priority data help our
customers navigate the complexities
of transitioning to new products and
sustainable solutions.
Taking advantage of sustainability mega-trends,
we have focused on developing sustainable own
brand ranges to help our customers with the shift
to alternative packaging materials and the
transition to a more circular economy. Our
approach to finding these sustainable solutions:
• We have designed various calculators to
quantify the environmental benefit of
transitioning from one product to another.
• We proactively work with customers to
inform and educate them to support
theirtransition towards more
sustainablebehaviours.
• We work closely with our supply chain to
phase out banned products and identify
more sustainable alternatives that meet
bothnew legislative requirements and
customer needs.
55%
of packaging made from alternative
materials in 2023
ENHANCING AND SUSTAINING
ENHANCING
and
SUSTAINING
Our own brand
Sustain foodservice
packaging, made from
renewable resources,
helping the planet
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and
CASE STUDY:
Unlocking potential: The power
ofown brands in our distribution
landscape
In today’s competitive landscape, differentiation
iskey, and our answer lies in the strategic
development of our own brands. Gone are the
days when Bunzl’s own brands merely competed
on price alone; they now serve as a powerful
avenue for us to offer higher quality goods and
services, still at competitive prices. It is an
opportunity for us to leverage our expertise
tobuild market-focused solutions.
In the European foodservice market for example,
we saw our customers’ need for transparent
advice in sustainable packaging and built Verive
asthe solution. We leverage our position in the
supply chain, and we have the advantage of being
material and solution agnostic, to be able to
confidently advise our customers on a case by
case basis on the optimal solution for them and
the environment, whether this is one of our own
brands or a product from one of our international
branded supplier partners.
Creating our own brands means that we can
offerour customers access to more affordable
solutions in sustainability, while giving our
operating companies the opportunity to drive
organic sales growth. Owning our brands allows
us to create enduring added value for customers,
fostering strong relationships, resulting in long
term loyalty.
Having an own brand strategy is our commitment
to building resilient brands that transcend
economic volatilities. Bunzl’s unique position in
the supply chain, coupled with our global
knowledge on branding, marketing, legislation,
sustainability, and supply chain, enables us to
craft brands that not only serve our current
customers better but also stand independently
inthe market, driving opportunities to capture
new business. This strategic evolution is not just
about products; it’s about future-proofing our
strength in the supply chain.
CASE STUDY:
Reducing carbon footprint for
Aramark in Spain
• In Spain, Bunzl have partnered with Aramark
to reduce the carbon footprint associated
with delivering to their 2,400+ sites.
• Bunzl’s proprietary Carbon Footprint
calculator
1
was used to analyse routes in
detail to calculate and simulate the carbon
footprint of product deliveries.
• The data obtained identified opportunities
tochange ordering patterns to reduce the
volume of small orders by 34%.
• We have also implemented a custom
LastMile Innovation project so that
deliveriesto Aramark centres in
Barcelonaarezero emission.
Reduction in Tonnes CO
2
e from small orders
>30%
Tonnes CO
2
e reduction equivalent to planting
>1,000 trees
CASE STUDY:
WorldStar Winner:
Sustain OzHarvest Collection
Sustain’s OzHarvest Collection is a range of
certified Australian compostable cups (made
fromFSC-certified wood-pulp paper) promoting
sustainability through unique decoration and
innovative production, which increases its
recyclability potential.
Collaborating with OzHarvest, Bunzl has donated
the equivalent of two meals to Australians in need
with every carton sold, providing a quantifiable
achievement and purposeful product delivering
real change.
>6,800
Meals since launch
Lauren Mooney
Bunzl’s Head of European Brand
Development
...IN ACTION
ENHANCING
SUSTAINING
1. Certified by AENOR based on the Greenhouse Gas Protocol.
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Added value solutions
for a better world
Issues such as geopolitical instability, extreme weather
events, an uncertain macroeconomic environment and
rising costs of living have all affected our businesses,
stakeholders and society over the last year.
SUSTAINABILITY
Read more about
our disciplined
approach to
sustainability
Despite the issues faced by our businesses,
stakeholders and society this year, our focus and
commitment to sustainability remains unchanged.
It is firmly embedded in how we do business at
Bunzl and our businesses have continued to
reduce their impact on the environment, address
social inequalities and drive the transition towards
a more circular economy.
Although our operating companies’ contributions
to sustainability are individual and centred around
the challenges their respective customers face
(which in turn reflect the different sustainability
opportunities and challenges present in their
regions and markets), it is their collective efforts
that help us to achieve our Group wide goals.
They have played a crucial role in ensuring our
near term science-based carbon reduction
targets remain well ahead of plan, increasing the
coverage of our industry-leading ethical auditing
programme and driving the success of our
sustainability value proposition; providing
customers with the data, expertise and tailored
product solutions they need to meet their targets.
As well as describing the progress we have made
across our four key pillars, this sustainability
report also gives examples of how our businesses
are taking action (both in their own operations
and with their customers) and introduces new
aspects of our programme and focus areas for
next year.
James Pitcher
Group Head of Sustainability
Taking action on
climate change
Read more on page 48
Providing tailored
solutions
Read more on page 56
Responsible
supply chains
Read more on page 58
Investing in a
diverse workforce
Read more on page 60
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Double materiality methodology
Our approach consisted of four stages:
Assessment
stage
1. Defining the boundaries
and business context
2. Identification of
potentially material
topics, impacts, risks
and opportunities
3. Engagement with
relevant stakeholders
4. Determining materiality
using a defined scoring
methodology and
thresholds
Activities
completed
• Consideration of the
actual and potential ESG
impacts present across
the entire value chain.
• Both positive and
negative impacts
identified with
consideration given to
impacted stakeholders
at each stage (even
though Bunzl’s role is
limited to connecting
one with another).
• Assessment has been
designed in a
disaggregated way to
consider the impacts
that might relate to
individual geographies
and market sectors.
• ESRS list of sustainability
topics, sub-topics and
sub-sub-topics used as
astarting point for our
assessment.
• This list was
supplemented with
information from our
previous materiality
work, SASB standards,
legal requirements,
peerbenchmarking
andfeedback from key
stakeholders.
• Final list of potentially
material impacts
developed and peer
reviewed prior to
engagement with
stakeholders.
• Gathered insights from
suppliers, customers,
investors and other
keystakeholders across
the Group.
• Assigned relevant
sustainability topics
toeach stakeholder
group and tailored the
questions to match
those who were
expected to be impacted
by a sustainability issue
or were in a position to
provide unique insight
on a particular topic.
• Developed a quantitative
approach and scoring
criteria, aligned to
Bunzl’s risk assessment
process, to determine
whether an impact, risk
or opportunity is
material for Bunzl.
• Impact materiality
hasbeen assessed
based on two factors:
severity and likelihood.
Financial materiality has
been assessed by
reviewing potential
magnitude of financial
effects and likelihood.
Read more on page 211
Double materiality
Reflecting how quickly the world around us can
change and to prepare for future reporting
legislation, we have repeated our materiality
assessment first conducted in 2020 to ensure our
activities continue to focus on the right areas and
identify any emerging issues we need to consider.
This process was more comprehensive and
complex than our first materiality assessment
which focused only on one side of materiality;
how our organisation impacted people and the
environment. Our new approach, a double-
materiality assessment aligned with the European
Sustainability Reporting Standards (‘ESRS’)
1
, goes
beyond what is known as ‘impact materiality’ and
also identifies how the different sustainability
matters impact Bunzl’s business financially;
known as ‘financial materiality’.
During the assessment we sought insights on
thepotentially material impacts, risks and
opportunities from stakeholders across our
valuechain, including our biggest suppliers of
keycommodities (e.g. paper & pulp, plastics
andchemicals), large customers from across all
ofour business areas, key investors and internal
stakeholders such as members of the Bunzl
finance, procurement and sales teams.
The assessment demonstrated that the themes
identified in our existing strategy remain key to
our stakeholders, with climate change and our
work to lead the transition to a more circular
economy the top priorities. Our last assessment
positioned the circular economy and action on
single-use plastics as the single most important
issue, but this has now been superseded by
climate change with all stakeholders recognising
the importance of the issue. The protection of
workers in our value chain and the promotion
ofdiversity, equity and inclusion across our
organisation were also identified as important
topics that will continue to be key focus areas for
the Group. The order of this sustainability report
follows the results of our materiality assessment,
with our most important issue (climate change)
covered first, followed by our other key topics.
1. We have followed the ESRS guidance to align our assessment with future reporting legislation
requirements (e.g. the European Corporate Sustainability Reporting Directive ‘CSRD’).
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1. Calculated using the UK National Themes, Outcomes and
Measures (‘TOMs’) system value for volunteering of £16.93 an
hour, which reflects the replacement cost of the individual
volunteering based on the Office for National Statistics (‘ONS’)
hourly value of volunteering.
2. www.socialvalueportal.com
SUSTAINABILITY continued
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Emerging topics
Supply chain emissions
Our suppliers, customers and investors all
recognised that failing to take action on climate
change within our supply chain would result in
negative impacts to the local ecosystems and
biodiversity in the regions we source products
from. In extreme situations, this in turn could
affect the availability of raw materials, thus
impeding our ability to meet customer
requirements.
We recognise that reducing our supply chain
emissions is imperative to achieving our net
zerogoal and have set science-based targets,
implemented a new software solution to
effectively engage key suppliers and introduced
new governance to support our work in this
important area (see page 52 and 62 for more
information).
In 2024 we will be commissioning a supply chain
risk assessment exercise to review the climate
risks present in our sourcing regions in more
detail (expanding the scope of our climate risk
assessment work to date, see page 54 for more
details) and to understand the other ESG risks
weneed to consider.
Healthcare and PPE products
The provision of quality-assured Personal
Protective Equipment ‘PPE’ and healthcare
products that support the well-being and safety
of end users emerged as a positive ESG impact
for the business. As one of the world’s largest
suppliers of PPE, our customers recognised the
expertise and knowledge provided by our
specialist safety businesses and also appreciated
the role of our Global Supply Chain Solutions
Team in respect to their PPE testing and
inspection work.
Details of Bunzl’s Health & Safety performance
can be found on page 217 in the ESG Appendix.
Regional impacts
Lastly, there were some regional impacts raised
by our customers relating to the individual
geographies in which we operate. These impacts
are not material when aggregated at a central
level but the following examples show how Bunzl
have been working to address the points that
were of interest to our regional stakeholders.
In Asia Pacific, customers were keen to
understand how Bunzl is respecting, promoting
and honouring Indigenous Peoples and their
rights, cultural heritage and knowledge. Bunzl
Asia Pacific is actively promoting reconciliation
bydeveloping an Innovate Reconciliation Action
Plan ‘RAP’. This plan stands as a firm commitment
to narrowing the gap between Indigenous and
non-Indigenous people in Australia, through
economic development and increased
participation. Bunzl’s RAP is accredited by
Reconciliation Australia, highlighting the
Company’s dedication. The RAP offers
assuranceto customers eager to understand
howBunzl respects, promotes, and honours
Indigenous Peoples, their rights, cultural
heritage,and knowledge.
Bunzl Asia Pacific and its Australian-based
operating companies actively participate in
initiatives including creating employment
opportunities and providing substantial support
for the growth of businesses owned by First
Nations. In our supply chain, we champion
diversity and inclusion, fostering partnerships
with Aboriginal and Torres Strait Islander
businesses.
Our RAP can
be viewed here
by scanning
this QRcode
In the UK & Ireland, our stakeholders were keen
for Bunzl to support social value through day to
day business activities focused on the well-being
of individuals and communities, social capital and
the local environment. Employees at Bunzl
Cleaning & Hygiene Solutions (‘BCHS’) in the UK
took part in 142 days of volunteering in 2023 and
supported initiatives like painting, redecorating
and gardening for Emmaus Communities across
the UK and sorting donations at Carlisle Food
Bank and London Outreach, driving over £19,000
1
of social value. With social value becoming a more
important issue in local Government tenders, two
of our UK businesses have joined the Social Value
Portal
2
to help them measure, report and
calculate the financial value of their social
activities in a more effective and streamlined way.
CASE STUDY:
Supporting the well-being of end
users and the environment
Obex Medical in New Zealand supplies pumps
to prevent Deep Vein Thrombosis (‘DVT’)
during surgery and recovery. These are worn
on patients’ legs and have air pumped into
them to improve blood flow. Obex work closely
with a New Zealand owned company, Medsalv,
to arrange for the DVT Sleeves to be
remanufactured after every use. The used
sleeves are collected from hospitals by
Medsalv who clean the garment, test for
contamination and function before
repackaging. The devices are packaged in large
reusable storage bins further reducing
packaging waste. This form of remanufacturing
allows for the reuse of these medical devices
and prevents them from being sent to landfill
after only one use. Obex supplies both the
remanufactured DVT Sleeves alongside new
ones from the original manufacturer.

High
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Medium Low Low Medium High
NOTE: Bars on the left have been maually adjusted as per client request
Our double materiality assessment
Financial materiality Impact materiality
Opportunities Risks
E
S
G
We have identified 20 risks and opportunities that
are important from a stakeholder and business
perspective. All stakeholders reached consensus
on 8 impacts (impacts 1 to 8) and these all relate
to climate change and the circular economy.
These can be considered our top priorities and
we will continue to monitor these issues closely.
The risks with the highest financial materiality
score (relating to climate change and the circular
economy) align to those identified in our principal
risks and uncertainties assessment (sustainability
driven market changes and climate change risk).
See page 68 for more details.
We know that our materiality assessment needs
to be dynamic in order to reflect changes in the
external world and our businesses. We will
therefore monitor emerging topics and reporting
legislation and repeat our assessments on a
regular basis to take account of and be in
alignment with these.
Environmental
1. Operational and supply chain impact
onclimate change
2. Failure to transition customers
toalternativematerials
3. Minimising our emissions and aligning
withscience-based targets
4. Transitioning products to alternative materials
5. Extreme weather events disrupt our
supplychain
6. Extreme weather events disrupt
ouroperations
7. Supporting customers with reusable
packaging solutions
8. Offering low carbon solutions across
ourproduct ranges
9. Stringent packaging legislation affects
salesvolumes
10. Investing in low carbon and renewable
technology
Social
11. Quality assured PPE and healthcare products
supports the well-being of end users
12. Talent development and training programmes
to develop new skills
13. Valuing and improving diversity
14. A comprehensive ethical assessment
andauditing programme
15. Harmful practices in the supply chain
16. Increased employee turnover
17. Lack of safety management causes the
number of workplace injuries to increase
Governance
18. High-quality, ESG-related corporate
governance policies and standards
19. High standard corporate governance practices
aligned with investor ESG metrics
20 Deterioration of investor perception due
to a lack of diversity in leadership teams
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SUSTAINABILITY continued
Our roadmap to net zero
The severity, rate and unpredictability of extreme
weather events have been increasing as a result
of climate change and given the increased
frequency and magnitude, it is forecast that the
economic costs of extreme weather events could
nearly double this decade
1
.
The planet's glaciers and oceans have also
experienced changes; our ice caps are melting,
sea levels are rising and oceans are warming and
becoming more acidic. All of these changes and
extreme weather events can be attributed to
anthropogenic global warming and as these
become more pronounced in the coming
decades, without concerted and ambitious
actionfrom companies and governments, they
will present significant challenges to our society
and our environment.
At Bunzl we know that our direct operations,
distribution activities and supply chains are all
part of the challenge and in addition to assessing
the long term risks climate change presents to the
business we have continued to deliver against our
near term carbon reduction targets that were
approved by the Science Based Targets initiative
(‘SBTi’) in November 2022.
In October 2021 Bunzl joined the United Nations
‘UN’ Race to Zero initiative and we committed to
achieve net zero emissions, including scope 3, by
2050 at the latest. As more companies set similar
ambitions, we recognise that the importance of
having tangible net zero transition plans that
follow a robust, recognised methodology, include
all sources of emissions and transparently report
on progress is increasing.
We believe that long term net zero targets need
tobe aligned with climate science and as such we
have followed the SBTi’s Net Zero Standard to
develop our transition plan during 2023. As with
our near term carbon reduction targets, we have
submitted our net zero transition plan for
approval with the SBTi.
Achieving net zero represents an opportunity for
Bunzl to build a more resilient business and our
transition plan is a key part of our purpose-led
strategy; to deliver essential business solutions
around the world and create long term
sustainable value for the benefit of all our
stakeholders. Reaching net zero represents a
significant challenge; we will not only need to
assess and change our own operations but
collaborate with hundreds of customers and
suppliers to achieve the deep emissions
reductions required to meet the goals of the
UNFramework Convention on Climate Change
(‘UNFCCC’) Paris Agreement. We will continue to
leverage our position in the supply chain to drive
change and use our influence where we can to
bring other businesses on the journey.
During 2023, the world has again witnessed
real, observable changes in the climate with
flooding, droughts and severe heat waves
continuing to affect the ecosystems and
communities least able to withstand them.
Taking action on climate change
1. www.weforum.org/agenda/2023/01/extreme-
weather-economic-cost-wef23/.
18%
reduction in absolute
emissions since 2019 with
a4%reduction in 2023
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Emissions in scope
The baseline year for our net zero roadmap is
2019 and we will report our progress against the
total emissions from that year. We recalculate the
emissions in the baseline year to take into account
the impact associated with acquisitions and
disposals after 2019. More detail on our scope 1,
2and 3 emissions can be found on pages 215 and
216. All of our climate change targets (near term,
long term and net zero) have been created by
following SBTi criteria:
Near term:
27.5%
reduction in absolute scope 1 and 2
emissions by 2030
79%
of suppliers by emissions will have
science-based targets by 2027
Long term:
90%
reduction in absolute scope 1,
2 and 3 emissions by 2050
1
Net zero
emissions across our value chain by 2050
Bunzl’s emissions breakdown (2019 baseline)
Scope 1
breakdown
Commercial fleet: 62%
Company cars: 18%
Heating: 20%
Purchased goods &
services breakdown
Plastics: 43%
Paper: 26%
Rest: 23%
Textiles: 8%
Upstream transport &
distribution breakdown
Road transport: 73%
Sea transport:26%
Air transport: 1%
Bunzl’s emissions breakdown
Total emissions reductions by decarbonisation lever
Scope 1: 1.5%
Purchased goods
& services: 83%
Upstream transport
& distribution: 5%
End of life treatment
of products: 7%
Other: 3%
Scope 2: 0.5%
Residual emissions
Emission-free transport
Building a low carbon supplier network
Climate conscious decision making
Lower carbon commodities
Low carbon business and workforce
Innovation
1. We will neutralise the remaining 10% residual emissions in
accordance with the SBTi Net-Zero Standard.
Lorem ipsum
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2019
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
2048 2049 20
50
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SUSTAINABILITY continued
Decarbonisation levers
We have identified five decarbonisation levers
that we will use to reduce both near and long
term emissions in line with climate science to
achieve net zero. Activities and projects relating
tomany of these levers are already underway and
their respective impacts on emissions are shown
in the table to the right.
Our immediate focus is to deliver our near term
carbon reduction targets and continue to take
action where we can now. In the short term, to
remain aligned to our net zero transition plan, we
will focus our efforts on two key decarbonisation
levers; empowering change and efficient
operations.
Decarbonisation lever Emission sources addressed How reduction will be achieved
Overall
impact on
emissions
1
Emission-free
transport:
Low and zero carbon
logistics
• Commercial vehicles
• Company cars
• Upstream transportation and
distribution
• Downstream transportation
and distribution
Transition to electric and other zero emission vehicles, prioritising
logistics partners who have implemented similar levers
High
Route optimisation, fuel efficiency monitoring software Low
Prioritising logistics partners who use a higher proportion of low
emission fuels
Low
Building a low carbon
supplier network:
Suppliers setting carbon
reduction targets
• Purchased goods and
services
79% of suppliers by emissions to set and deliver short term reduction
targets between (2027 and 2037)
Very High
Additional engagement after 2037 with a proportion of suppliers to set
net zero targets
Very High
Climate conscious
decision making:
Providing lower carbon
solutions for customers
• Purchased goods and
services
• End of life treatment of sold
products
Customer engagement, education, data and knowledge sharing on the
carbon impacts of various products can lead to an increased demand
for lower emission solutions
Medium
Customers setting net zero targets will cause a shift in the emissions
associated with a product’s end of life treatment due to increased
recycling and reuse rates
High
Expected improvements in country level waste management and
increased recycling rates
Low
Lower carbon
commodities:
Raw material carbon
reduction
• Purchased goods and
services
Long term decarbonisation of the plastics industry through actions such
as: reuse schemes, mechanically and chemically recycled plastics,
plastics from biomass, Carbon Capture & Utilisation (‘CCU’) plastics
Very High
Long term decarbonisation of the paper industry through actions such
as: heat pumps to reuse heat, increased pulp from recycled sources, low
emission fuels, renewable energy
High
Long term decarbonisation of the textiles industry through actions such
as: improved materials mix (e.g. recycled and organic fibres), renewable
energy, reduced fertilizer use, improved manufacturing efficiency
Low
Low carbon business
and workforce:
More efficient operations
• Electricity
• Travel and commuting
Onsite electricity generation from solar panel installation and renewable
energy procurement
Low
LED lighting and other energy efficiency measures Low
Review of business travel practices and reduction in non-essential trips,
employees to transition towards electric and other zero emission
vehicles over time, decarbonisation of public transport
Low
1. Very High (>10% of total reduction), High (>5%), Medium (>2.5%), Low <2.5%
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Decarbonisation impact by lever (2050)
100%
2019 baseline
75%
Business as usual
emissions growth
(12)%
Low and zero
carbon transport
(93)%
Suppliers setting and
achieving carbon
reduction targets
(15)%
Lower carbon
solutions for
customers
(29)%
Raw material carbon
reduction
(2)%
More efficient
operations
(14)%
Innovation and
technology
10%
2050 residual
emissions
Low carbon
business and
workforce
Innovation
1
Lower carbon
commodities
Climate
conscious
decision making
Building a low
carbon supplier
network
Emission-free
transport
2050
Emissions
growth
2019
Baseline
2050
Residual
emissions
2
1. We anticipate that beyond the reductions associated with the five key decarbonisation levers, further innovation and technology improvements, particularly related to product design and
technology, transportation solutions and waste treatment will result in additional emissions reduction.
2. Residual emissions are those emissions that remain at the point of net zero, despite abatement efforts. We are committed to neutralizing any residual emissions at the net-zero target year.
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SUSTAINABILITY continued
A low carbon business and workforce
Our scope 1 and 2 carbon emissions in 2023,
2022 and our baseline year (2019) are shown in
the table to the right. We are well on track to meet
our science-based reduction goals for 2030.
Compared to 2019, our carbon efficiency has
improved by 30% with absolute emissions
reduced by 18%.
In 2023, our overall emissions reduced by 4%
compared to 2022. This reduction was driven
byafocus on operational efficiency which has
decreased fuel consumption in our commercial
vehicles and resulted in a 2% reduction of global
emissions. Our natural gas consumption reduced
by 10% which was primarily driven by a relatively
mild winter.
Our emissions associated with electricity
consumption decreased by 4%. This was driven
byenergy efficiency improvements and increased
procurement of renewable energy (from 17% to
25%). This emission reduction was partially offset
by a higher electricity consumption due to
increased uptake of electric vehicles (particularly
in UK & Ireland and Continental Europe) and an
increase in the conversion factors that are
appliedto sites that are not yet procuring
renewable energy.
A summary of the progress we have made
sinceour baseline year and the key initiatives
carried out in 2023, are provided in the table
onpage 53. We also report on our climate
changeperformance through our annual
response to the Carbon Disclosure Project ‘CDP’.
In 2023, we received a Brating for our response
which represents an improvement on last year.
Our near term carbon roadmap activities
Our short term scope 1 and 2 roadmaps primarily
focus on technology that is currently available, but
we also actively trial new technologies across the
Group to support our longer term carbon
reduction targets. As suitable new technologies
develop, we will revisit our roadmaps accordingly
to ensure our activities remain ambitious. The
roadmap on page 53 relates to the near term
activities our business areas are working on to
ensure we stay on track to achieve our scope 1
and 2 science-based reduction goals in 2030.
Building a low carbon supplier network
The scope 3 emissions associated with the goods
and services we supply account for around 83%
of our total emissions. Reducing these emissions
is imperative to achieving our net zero goal and
we have launched a new engagement programme
with our key supply partners
2
supported by one
of the largest Supply Chain Risk Management
(‘SCRM’) platforms in the industry: Avetta One.
This programme will allow us to assess where our
key supply partners are on their carbon reduction
journey, gather data and inform them of our
policies, targets and other requirements.
As we improve our ability to identify and measure
emissions across our supply chain, the data
disclosed by our suppliers will improve and we
willbe able to measure and report the reductions
in carbon that their targets, activities and
programmes achieve, enhancing the transparency
of our future disclosures. Our supplier
engagement programme will also support
another decarbonisation lever, as better quality
data on carbon can be used to advise customers
on the climate impact of the products they source
from Bunzl and incentivise the sale of lower
carbon options. This will also help to mitigate
aclimate-related transitional risk that we have
identified when assessing climate change
scenarios and their impact on our business;
‘shifting customer expectations’ (see page 213
formore information).
2. c.750 suppliers who account for c.79% scope 3 emissions.
In late 2023, we communicated our requirement
for key supply partners to set science-based
targets. During 2024 we will onboard our key
supply partners onto the Avetta One platform
and issue our first climate change survey. This will
be used to assess where our suppliers are on
their decarbonisation journey and help prioritise
our engagement with them. Once we understand
the maturity levels in our supply chain, we will
work to support suppliers who need more
information, guidance, resources and tools as well
as meeting our largest suppliers to discuss their
plans, review their progress and identify
opportunities to collaborate.
Scope 1 and 2 carbon emissions (market based) 2019 2022 2023
Change since
baseline year
CO
2
e emissions (tonnes) 141,320
1
120,742 115,382
◊
18%
Emission intensity (tonnes CO
2
e/£m revenue) 13.8
1
10.5 9.7
◊
30%
1. Emissions in our baseline year have been recalculated in 2022 to reflect the impact of acquisitions. Emissions intensity
has been recalculated using revenue at constant currency.
◊ Included in the external auditors’ limited assurance scope. See the data assurance statement on the Company’s website,
www.bunzl.com.
We have a vast supply chain
comprised of over 10,000
suppliers with associated
scope 3 emissions
accounting for around 83%
of our total emissions.”
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Scope 1 and 2
emissions source
KPI % of
emissions in 2023
% change
since 2019 Key initiatives and results in 2023 Progress
Commercial
vehicles
50% -11% Ongoing fuel-efficiency improvements with targeted initiatives in North America (see page 28) reducing diesel consumption
in commercial vehicles.
Transition of small commercial vehicles to electric options is in progress with conversions completed at some companies
inNorth America and UK & Ireland.
Conversion of our large commercial vehicles is still at an early stage. Range limitations and impacts on operational efficiency
still represent challenges for the large-scale transition of vehicles. Trialling of zero emission vehicles (where applicable
technology exists) is taking place across the Group.
Following a review of biofuel feasibility, we are planning additional transitions to Hydrotreated Vegetable Oil (‘HVO’) in 2024
and 2025 in the UK & Ireland and Continental Europe.
Behind plan
but will
recover to
meet target
Company cars
12% -28% We have seen increasing electric vehicle adoption across fleets in the UK & Ireland and Continental Europe. Hybrid vehicles
are also being introduced in North America and Asia Pacific. Approximately 10% of company cars are now fully electric.
On track
Electricity
22% -29% We continue to install energy efficient lighting in our buildings which typically reduces electricity consumption by 25% to
40%. The total percentage of renewable energy purchased has increased to 25% in 2023. A strong increase was achieved
inContinental Europe where procurement has reached c.47% in 2023.
Our businesses continue to install electricity generating solar panels and the electricity generated by these installations
represents 1% of our total energy consumption.
On track
Heating
16% -15% When developing new sites we are reviewing options to install energy efficient heating systems such as heat pumps etc.
This can result in natural gas savings of up to 70%.
On track
Total 100% -18% On track to meet our near term science based targets.
On track
More information
• Detailed energy consumption and climate change data can be found in the ESG Appendix (see pages 215). Our climate change reporting procedures can be found in the
EHS and Sustainability Reporting guidelines in the sustainability section of our website (www.bunzl.com/ sustainability/sustainability-reporting/).
• The independent assurance for our scope 1 and scope 2 carbon emissions and emission intensity (tonnes of CO
2
e per £m revenue) calculations can be found in the ESG
Appendix of this report (see pages 215 and 217) and in the EHS data assurance statement in the sustainability section of our corporate website.
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Reducing carbon emissions
with efficient logistics
Commercial fleet accounts for 50% of Bunzl’s total
operational emissions. Integrating carbon
efficiency into our logistics operations is
imperative for our business to remain competitive
in a rapidly changing landscape. The
decarbonisation of our fleet will help meet the
expectations of our customers who are
increasingly aware of and demanding more
sustainable supply chains. Bunzl’s approach to
consolidation has proven to be a vital tool when
reducing our emissions. Initiatives to reduce our
carbon emissions arising from our logistics
operations include the use of intelligent transport
management systems, route optimization
programmes, and an increased proportion of
modern, fuel-efficient vehicles.
In the UK & Ireland, Bunzl Catering Supplies (‘BCS’)
have invested in a new integrated system of
telematics software and dynamic routing
planning. The telematics software provides an
in-cab interactive experience for our drivers
informing them about their performance on the
road as well as useful information such as the
emissions generated while idling or braking.
The dynamic route planning system provides
drivers with information on the most efficient
drop-off schedules, leading to a reduction in road
miles and carbon emissions.
Bunzl Australasia’s efforts to reduce electricity
consumption at the Erskine Park distribution
centre in Sydney represents a key milestone in
their carbon reduction strategy. The project
includes LED lighting upgrades, zoned heating,
ventilation and cooling systems and rooftop
solarpanels. By collaborating with their landlord
to promote an environmentally responsible
partnership, the business not only successfully
reduced electricity consumption and carbon
emissions at the site but also solidified a strong
commercial relationship. In the three years since
the project commenced, electricity consumption
and carbon emissions have reduced by over 65%.
The project’s learnings are now being applied
toother facilities in the region as part of
Bunzl’sbroader carbon reduction and
sustainability efforts.
Assessing climate change scenarios
and their impact on our business
The Board, Executive Committee and every
business area and business in Bunzl identify and
document risks in a consistent way within the
categories of strategic, operational, and financial
risks. Our process for identifying and assessing
risks on an ongoing basis is detailed on page 68.
These include current and emerging climate-
related risks and opportunities and by doing so,
we are ensuring that climate change is integrated
into the Group’s overall risk management.
Using climate scenarios to assess
climate change risks
We follow a four-step process and use climate
change scenarios to assess the impacts that
climate change may have on Bunzl.
1. Evaluating risks and opportunities
Bunzl’s climate-related risks and opportunities
were determined by an internal consultation
process that involved a wide range of internal
stakeholders across all regions and markets,
previous assessments and desk-based
research. Our Company operates
internationally and the impact on our business
varies significantly depending on the market
sector and the geographic location of our
businesses, supply chains and our customers.
These impacts could be direct (e.g.
expenditure, revenue, assets) and/or indirect
(e.g. delay in delivery, drop in demand,
disruption of supply chains). It was determined
that climate change could impact Bunzl in the
following four thematic areas:
• shifting customer expectations
(transitionalrisk);
• environmental impacts of technology
(transitional risk);
• adaptation to extreme weather (physical
risk); and
• changing market dynamics (transitional risk).
We have considered the following time horizons:
• short term (to 2025);
• medium term (to 2030); and
• long term (to 2050).
More information on the identified risk and
opportunities can be found in page 214 of the
ESG appendix.
2. Selecting climate change scenarios
The next step was to assess the impact of
various climate change scenarios. We focused
our assessment on three alternative climate
scenarios up to 2050. The ‘orderly’ and
‘disorderly’ scenarios align with global warming
trajectories of 1.5ºC and 2ºC by 2100
respectively but differ in the speed and extent
of decarbonisation over the next 30 years. Our
final scenario (‘hothouse world’) assessed the
potential impacts of a world in which global
warming exceeds 3ºC by 2100. Our scenarios
broadly align with the environmental and
economic conditions represented in the
Network for Greening the Financial System
(‘NGFS’) scenario framework (www.ngfs.net/
ngfs-scenarios-portal/explore) and more
information can be found on page 213 of
ourESG Appendix.
3. Evaluating the impact on our business
We have applied the three climate change
scenarios to our four key risk areas (shifting
customer expectations, environmental
impacts of technology, adaptation to extreme
weather and changing market dynamics) to
understand the impact each scenario could
have on Bunzl’s business. We have then
worked to calculate the financial impacts
associated with the various scenarios.
4. Effectiveness of response measures
We will continue to evaluate (and when
necessary accelerate) our existing response
measures to ensure that our business
continues to be resilient to the assessed risks
and is able to capitalise on business
opportunities that our response to climate
change may offer.
SUSTAINABILITY continued
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2. Fleet transition:
Whilst the transition to low carbon vehicles
hasbegun, the pace and breadth of change
will depend upon the climate scenarios above.
Consideration of the environment in which we
may operate under each of the climate
scenarios above and has been included in the
financial impact assessment. It has led to the
conclusion that we will be able to realise the
opportunity to implement a fleet strategy that
ensures a timely transition to alternative fuels
at a cost that is comparable to the current
cost, or that any increase in costs is market
wide and therefore passed on to customers.
3. Not meeting emissions target expectations
of large customers:
The timing of required emissions reductions
varies significantly between the Orderly,
Disorderly and Hot House scenarios. Many
businesses have committed to dramatically
reduce carbon emissions by 2050 with some
committing to net zero. Consideration has
been given to the potential impact of Bunzl not
being able to meet the required level of climate
action expected by key customers, resulting in
the loss of those customers. We have already
established a science-based emissions target
in line with an Orderly scenario and ongoingly
assess whether Bunzl’s emissions trajectory
meets customers’ ambitions.
4. Carbon pricing:
Carbon pricing is a cost levied by governments
to encourage polluters to reduce the amount
of greenhouse gases they emit. Higher carbon
prices may present challenges to Bunzl’s
competitiveness and profit margins if costs
cannot be passed on to customers. We have
considered the carbon pricing developments
under the various scenarios.
5. Extreme weather conditions:
The business impact of extreme weather
conditions is already included in our climate
scenarios analysis model, as extreme weather
is a driver of GDP decline and carbon pricing
impacts within these scenarios. We monitor
the impact of extreme weather on our direct
operations separately to ensure we remain
well prepared for worsening conditions in the
future. We have considered the business
impacts of extreme weather events, such as
hurricanes, flooding and wildfires, in the
business areas where these events occur most
frequently (i.e. North America and Australasia).
Given our assessment of the likelihood and
magnitude of impacts under the various
scenarios including the impact of carbon pricing
and other macroeconomic impacts from climate
change, we have concluded that climate change
remains a principal risk for Bunzl (see page 76 for
more information).
Climate-related potential
business impacts
In order to assess the impact on our business
wehave considered a range of possible outcomes
(best, mid, worst) across four key potential
climate-related business impacts, under each of
the three climate scenarios (Orderly, Disorderly
and Hot House world). In line with last year and
the views expressed by the NGFS we have used
the following probabilities of the modelled
scenarios; Orderly scenario: probable (greater
than 50% probability), Disorderly scenario:
possible (21 to 50% probability) and Hot House
remains remote (less than 5% probability).
We have considered climate risk across five key
potential business impacts.
1. Global GDP decline:
As a GDP+ business, Bunzl’s revenue is to
some extent correlated with the health and
progress of the global economy. Economic
damage from climate change could be
causedby a number of outcomes, including
shocks from extreme weather events, losses
inagricultural productivity, temperature
effects on labour productivity and human
health, energy demands, and flows of tourism.
All impacts are considered within our
impactcalculations.
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SUSTAINABILITY continued
Our materiality assessment showed our
customers in the foodservice, grocery and retail
sectors are responding to these consumer-driven
trends and are increasingly requesting products
which are more recyclable, reusable and climate
friendly. These customers trust Bunzl to provide
them with expert advice relating to packaging
trends and legislation, the data they need to
report effectively and make informed decisions,
and the solutions they need to meet their
sustainability objectives.
Our assessment also demonstrated that there is
an increasing demand from our customers to
understand the carbon footprint of the products
we supply and where appropriate use lifecycle
assessments to assess alternative options and
find lower carbon solutions. During 2024 we will
be building on the success of our proprietary
material footprint tools and developing new
approaches to bring this information to
customers in a simple way.
Consumer demand for packaging and
products made from alternative materials
continues to drive our commitment to
leadthe transition to products and solutions
that support a low carbon and more
circulareconomy.
Providing tailored solutions
Only 2% of revenue generated from consumables facing regulation
Group revenue 2023
£11.8bn
Consumables facing regulation
£0.2bn (2%)
Consumables likely to transition
£1.2bn (10%)
Packaging with an important purpose
£0.4bn (3%)
Packaging and products made
from alternative materials
£2.2bn (19%)
Non-packaging products
£7.8bn (66%)
85%
of Group revenue is
non-packaging products or
packaging products that are
well suited to a circular
economy
• 55% of packaging made from alternative materials in 2023
• New legislation continues to drive sustainability growth opportunities
• Packaging refers to packaging and other products within the foodservice, grocery and retail sectors which are facing legislation or
consumer pressure. We continue to exercise judgement to allocate the sales in 2023 to non-packaging products and the four
packaging categories shown, which are taken at a point in time in the context of rapidly changing legislation and changes in product
composition across a vast range of products. As a consequence, category adjustments are likely, and we have recognised one
category adjustment this year that increases “products likely to transition” by £0.2bn, with a corresponding reduction in “packaging
with an important purpose.” More information on our packaging categories, and limitations with respect to the product data and
related disclosures, are set out in the ESG Appendix on page 212.
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Some of our businesses have already started
working with customers to understand the wider
environmental impact of the products we supply;
we have performed lifecycle assessments for
customers in the Netherlands and started to
assess the carbon footprint of top selling SKUs
with retail customers in the UK.
Supporting customers to transition to
alternative products
Our businesses have continued to help transition
customers to packaging products made from
alternative materials and these solutions account
for 55% of total packaging sales across the Group.
The introduction of new single-use plastics
legislation and customers’ efforts to meet their
packaging targets are examples of drivers that
have contributed to the proportion of alternative
packaging sales.
The Group continues to have very limited
exposure (2%) to single-use plastic consumables
facing regulation where some volume reduction
isexpected and the proportion of total Group
revenue attributable to non-packaging products
or packaging made from alternative materials is
high at 85%.
In the UK & Ireland our businesses have
continued to develop a variety of innovative
solutions to help customers reduce waste,
minimise single-use plastic consumption and
meet their sustainability goals. For example, Bunzl
Retail Supplies have worked with the Co-op to
introduce reusable cage shrouds in their stores
which negate the need to wrap cages in single-use
plastic stretch film. This initiative will save around
180 tonnes single-use plastic each year and
reduce the customer’s UK plastics tax liability.
Adding value with our own brand
packaging
The unique feature of Bunzl’s value proposition is
that we not only add value for customers through
providing the data and expertise they need to
make informed decisions, meet the requirements
of legislation and achieve their targets, but can
also provide the products and other solutions
they need to make this a reality.
Our innovative own brand solutions are helping to
deliver value for our customers while supporting
them to meet their sustainability goals. With many
of our customers facing a combination of
inflationary pressures and stricter packaging
restrictions and associated legislation, our
extensive range of own brand solutions across
the Group have helped them transition to
alternative materials at competitive prices while
not compromising on sustainability credentials or
product quality.
Four features of our sustainable own brand products
Feature In action
Responsibly sourced
All own brand suppliers must meet the
same internationally recognised human
rights standards that we expect of our
own business and are supported by our
industry-leading ethical auditing function.
In North America, our rPET EcoSystems items are
manufactured in one of the world’s only vertically
integrated facility produced from 100% post-consumer
curbside collected PET. Made from Food and Drug
Administration (‘FDA’) approved food grade material,
the vertically integrated process significantly reduces
the overall carbon footprint of the products when
compared to virgin PET.
Future-proof
Our ranges are always designed with the
latest legislation in mind and are fully
compliant with both existing and
forthcoming regulations. We also keep
track of the latest trends and extend our
ranges to account for these.
Our European own brand Verive have launched their
first range of around 100 reusable packaging products
to present Bunzl as a distributor of both disposable and
reusable food packaging solutions. This range is listed
in nine European countries. Verive’s reusables are
being used across all Bunzl’s sectors: from production
facilities such as Volvo in Belgium to leisure parks in
theNetherlands.
Accessible information
Sustainability can often be an ambiguous,
confusing, technical subject. Our own
brands and expert sustainability teams
are positioned to cut through any
greenwashing and provide transparent,
honest advice.
Bunzl Safety & Lifting in Australia have been supporting
a major mining customer’s mission to eliminate plastics
from their supply chain with transparent information, a
strategic approach and leading solutions. Our own
brand Global Recycling Standard (‘GRS’) certified
recycled-content polyester vests have clear recycling
logos on the outer packaging and fully recyclable paper
tags with cotton cord instead of plastic. On all other
products the plastic garment bags have been
completely removed or replaced with recyclable
cardboard packing bands.
Exceptional quality
Our cost competitive options are
rigorously quality checked before
distribution and are designed to
includethe latest innovations in
packaging sustainability.
BEST Services, one of Canada’s leading janitorial and
maintenance service providers, specialises in high-
traffic public facilities. BEST prides itself on its
innovative approach and turned to Bunzl for a more
cost-efficient, sustainable cleaning solution. We
introduced our own brand REGARD chemistry line and
converted c.600 cases of branded product. This line is
opening many new opportunities by helping our
customers achieve both sustainability and cost
management objectives.
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SUSTAINABILITY continued
An estimated 28 million people are in forced
labour conditions
1
across the world and everyday
more people are deceived, persuaded or pushed
into highly exploitative situations that they
are unable to refuse or leave. This is why Bunzl
takes a proactive, direct and risk-based approach
to ensure that our supply chain partners are
complying with the high ethical standards
demanded by our policies. We regularly review
best practice to ensure that our controls are fit
forpurpose, refine our approach to address new
issues and expand the coverage of our audit
programme year on year.
In 2023, we increased the proportion of high risk
spend covered by our assessment and auditing
programme by 3% to 81%. We assessed 1,022
suppliers and 956 of these had no critical issues.
Ifour audits identify any zero tolerance issues (for
example, instances of forced labour or overtime
or wage violations) we work to resolve these
quickly through in-depth engagement with the
supplier. Of the suppliers undertaking remediation
efforts to bring them up to the required standard,
35 have completed their action plans to date with
21 still in progress. If resolution is not possible
within a reasonable time frame (usually six
months) then we terminate the relationship.
In 2023, we terminated relationships with 10
suppliers who failed to make enough progress.
Most of our suppliers are based in countries with
lower levels of social risk, with a small proportion
of procurement spend with suppliers in higher-
risk countries, such as China, India, Malaysia and
Brazil. Over the last two years we have expanded
our programme to assess suppliers in high risk
countries outside of Asia and now also assess
suppliers of high risk commodities who are based
in lower risk sourcing countries. In addition to our
Asia auditing programme in 2023, we performed
77 audits across suppliers in these categories
with one zero tolerance issue identified. Once our
responsible sourcing programme has worked to
reduce the highest risks to acceptable levels, we
will move on to lower risk areas.
Our materiality assessment demonstrated that
this issue is still important to our stakeholders
and with more individuals migrating now than at
any point in the last fifty years due to conflict,
natural disasters or to simply seek employment,
the risk of exploitation is increasing and the most
vulnerable (women, children and migrants) will be
disproportionally affected. To take account of our
materiality findings and in recognition of this
situation, we will work with an expert,
independent body to re-assess our supply chain
risks during 2024 before making any necessary
improvements to our already strong programme.
Bunzl has a zero tolerance policy to any
unethical practices and is committed to
respecting human rights across our own
operations and in our supply chain.
Responsible sourcing –
workers in the value chain
Measure 2022 2023
Number of suppliers assessed 930 1,022
% of spend in high risk regions that is with assessed and compliant
suppliers
78% 81%
% of spend in low risk regions that is with assessed or compliant
suppliers or on other non-product related costs
2
c.96% c.96%
90%
increase in the number of
supplier assessments
completed in high risk
regionsover the last six years,
with the amount more than
doubling since 2017
1. www.unseenuk.org/about-modern-slavery/facts-and-figures/.
2. Includes freight, duties and FX related costs.
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Our responsible sourcing
process inaction
One of our recently acquired operating
companies, Medcorp in Brazil followed our
responsible sourcing process by identifying that a
potential new supply partner was based in a high
risk country and requesting our Global Supply
Chain Solutions team to audit the supplier before
commencing any trade with them.
A simplified overview of the audit process is
shown here. The supplier passed the audit and
Medcorp commenced trading in 2023.
As part of our review process, after the audit, we
contacted an agreed percentage of our audited
suppliers to check the audit was conducted in a
fair and professional manner.
Additionally, several times a year, senior
management will, unannounced, arrive to witness
an audit, to ensure our professional standards are
maintained.
CASE STUDY:
Forensic testing to enhance
traceability
One of Bunzl’s Australian based businesses
took part in a customer pilot, aiming to
enhance traceability beyond traditional
methods of labelling and certifications to
provide material origin. In collaboration with
athird party, the pilot used forensic testing
technology to analyse organic trace elements
in Bunzl-sourced products to determine the
source origin. This innovative approach
successfully identified the geographic origin
ofproducts, even when packaging or labelling
was removed. The pilot focused on a product
category typically sourced from known regions
associated with a high risk of forced labour.
The results of the testing were used to guide
further investigation of the supply chain.
Ongoing efforts involve Bunzl, their customer,
and suppliers working collaboratively to
co-design enhancements to existing risk
management processes. Bunzl’s sustainability
and sourcing teams in Australia continue
toapply the lessons learned from the pilot,
extending the benefits to various aspects
ofthe business.
1. Policy review
As soon as we arrive at a factory, we ensure both the supplier
and our auditor sign our Anti Bribery & Corruption document
prior to the audit taking place. We also review that the
supplier has signed our Supplier Code of Conduct.
2. Factory tour
We then conduct a factory tour, gaining a good overview of
the Quality Management and Employee Health, Safety &
Environment Systems and to review some of our Social
Accountability points, which are then covered further in both
our employee interviews and document checks.
3. Employee interviews
We interview several employees, selected at random, as part
of the Social Accountability section of our audit. We ask
questions relating to their freedom of movement, salary, days
and hours worked amongst other topics.
4. Document review
Lastly, we check a wide range of documents to ensure we fully
understand a supplier’s policies & procedures and to check
that they are being followed. This will include reviewing details
like employees working hours, salaries paid, etc., and allows
us to investigate any potential modern slavery issues.
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SUSTAINABILITY continued
Established in the UK & Ireland in 2021, our
Inspiring Women in Bunzl (‘IWIB’) programme
focused on improving a common issue that
facesmany large organisations; the
under-representation of women at a senior level.
Over the last three years, other business areas in
Bunzl have adopted their own IWIB programmes
with Latin America holding their first annual
conference in 2023 and our North American
group doubling in size to include more than 100
female leaders in the region.
These programmes have started to deliver
tangible results; in North America 36% of internal
promotions in the leadership team were female in
2023 (up from 33% in 2022 and 14% in 2021), and
30% of our senior leadership team in the UK &
Ireland are women. Results like these have
combined to improve the proportion of women in
Bunzl’s senior leadership
1
population to 22% in
2023, compared to 20%
2
in 2022 and 16% in 2020.
We have continued to build development
initiatives, including mentoring, for all high
potential women in leadership roles. In Latin
America more than 70 individuals have now
completed a new programme designed in
partnership with the Catholic University of
Chileto develop leadership skills in women
wehave identified as high potential and part
ofthe succession plans for our senior
management roles.
Further information on our employee diversity
data can be found on page 219.
Diverse and inclusive workplaces are
a key feature of sustainable business
models and are even more important
today given the other sustainability
risks the world faces.
Investing in a diverse workforce
Great Place to Work survey
(Justice section)
Our recent Great Place to Work results supported
that those surveyed felt the people in their
respective businesses are treated fairly regardless
of their differences.
Positive responses from the survey population
3
80%
People here are treated fairly
regardless of their age
90%
People here are treated fairly
regardless of their race
88%
People here are treated fairly
regardless of their gender
92%
People here are treated fairly
regardless of their sexual orientation
1. Senior leadership group defined as the individuals that receive
share awards as part of their remuneration.
2. The 2022 figure has been restated to 20% so that it is based
on the same leadership population as used in calculating the
2023 ratio. 3. 45% of our total workforce.
x2
doubled the percentage of
women in senior leadership
roles since 2016.
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Building a truly inclusive culture is the key
ambition of our diversity, equity, inclusion and
belonging work at Bunzl. This is essential; a
diverse group of people from different
backgrounds and cultures provides us with the
healthy balance of voices and diversity of thought
that we need.
We believe that the creation of an inclusive culture
is a leadership accountability and recognise that
our leader’s actions will shape how that culture
evolves over time. During 2023, we have
continued to provide training to our most senior
teams and completed inclusive leadership
andunconscious bias training with these groups.
We also expanded the coverage of our employee
listening forums to provide a voice for under-
represented colleagues at all levels and get the
feedback we need to ensure our programme
continues to focus on the right areas.
Moving forwards, we will establish a consistent
approach to the creation of similar listening
groups in all regions and roll out a programme of
reverse mentoring for all members of the Group
leadership team. This will be supported by a
drumbeat of internal communications on
diversity-related themes, building on a higher
frequency and quantity of internal
communications seen across the Group in 2023.
For more information on our people-related
activities and Great Place to Work survey results
see page 35.
CASE STUDY:
Our sustainability value
propositionin action
Adding value for new customers
Our sustainability expertise and unique data
and reporting capabilities are a real competitive
advantage that we continue to build on.
Our sustainability value proposition is helping
Bunzl operating companies to win new business
and in 2023, Bunzl Cleaning & Hygiene Supplies
in the UK were awarded a new multi-year
contract with a leading cleaning and security
services business, Excellerate Services UK. They
operate in over 500 locations in the UK and our
national footprint means we are able to service
them completely.
Our Sustainability offering was critical to
winning the contract with four solutions in
particular that were essential for our new
customer:
1. Carbon reporting.
Bunzl’s ability to deliver high quality data on
the carbon impact of our services set us apart
from the competition.
2. Sustainable Product Award.
This allows our customers to make informed
decisions on the sustainability attributes of
the products they buy and drives positive
change through our supply chain.
3. Recycle Connect.
A new initiative that provides customers with
material recovery opportunities, ensuring
that more of their cleaning & hygiene
equipment is reused or recycled at the end
ofits useful life.
4. Own and exclusive brand products.
Bunzl own brand range Cleanline Eco enables
compliance with current chemicals legislation
in addition to providing a solution that
contains environmentally friendly ingredients
and is biodegradable.
Anna Edwards,
Sustainability Director at BCHS
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SUSTAINABILITY continued
Governance
We have an established governance structure to oversee the delivery
of our sustainability strategy and activities across the Bunzl Group. In
2022 we established a new Board Sustainability Committee (‘BSC’) to
allow for more detailed strategic consideration of the opportunities
and risks presented by sustainability and to educate and supplement
the work of the Board in this area. Further information on the BSC can
be found in the BSC report on pages 110 to 111.
Our Group Sustainability Committee is a
cross-functional leadership committee that
engages the management teams and operating
companies across our business areas and
provides oversight and strategic guidance for our
programme. Chaired by our CEO and attended by
members of our Executive team, the Committee
meets quarterly to ensure Bunzl has an ambitious
sustainability strategy, which is subject to
effective governance. It sets targets and monitors
progress while providing support for our business
area sustainability teams.
To recognise the importance of climate change as
a principal risk to the Company and effectively
govern the progress of our regional carbon
roadmaps, a new Environment & Climate Change
Committee was established in 2023. Like our
other governance meetings (e.g. the Supply Chain
Committee), the group met four times a year and
was represented by all business areas.
In 2023, the Environment & Climate Change
Committee reviewed performance against our
environmental objectives and tracked the
progress of scope 1 and 2 emission reduction
initiatives across the Group such as renewable
energy procurement, alternative fuels and
commercial vehicle transition.
The Supply Chain Committee is responsible for
developing processes and procedures to assess
opportunities and mitigate risks within our global
supply chains, ensuring regulatory compliance as
a minimum. In 2023 the Committee took
responsibility for governing the work required to
meet our scope 3 carbon reduction target and will
regularly review the progress of our supplier
engagement programme.
The Health & Safety Committee is responsible for
assessing the key health and safety risks across
Bunzl. They also develop, review and monitor
appropriate policies, standards and regulations
relating to health & safety management across
the Group.
Board Sustainability Committee
Our sustainability governance structure
Group Sustainability Committee
Business areas and operating company
responsibilities
(including regional sustainability forums, local sustainability
governance meetings, product & packaging groups)
Supply chain
Committee
Health & Safety
Committee
Environment & Climate
Change Committee
Board
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TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
TCFD index
The Task Force on Climate-related
Financial Disclosures (‘TCFD’)
hasdeveloped a climate-related
financial risk disclosure
framework for companies to
provide information to investors,
lenders, insurers and other
stakeholders.
Our climate-related disclosures are consistent
with the TCFD recommendations and
recommended disclosures as set out in the TCFD
framework published in June 2017 and the
updated ‘Annex’ published in 2021. The index
table to the right provides a reference to where
these disclosures can be found throughout our
Annual Report.
Topic Disclosure summary Disclosure Bunzl response
Governance Disclose the
organisation’s
governance around
climate-related risks
and opportunities.
a) Describe the Board’s oversight of climate-related
risks and opportunities.
Governance report: pages 92-93, 96-97, 100, 103-105
Principal risks: pages 68-70, 76
Sustainability report: page 62
b) Describe management’s role in assessing and
managing climate-related risks and opportunities.
Governance report: pages 92-93, 96-97, 100, 103-105
Principal risks: pages 68-70, 76
Sustainability report: page 62
EGS appendix 213-215
Strategy Disclose the actual
and potential
impacts of climate-
related risks and
opportunities on the
organisation’s
businesses, strategy
and financial
planning.
a) Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium and long term.
Principal risks: page 76
EGS appendix 213-215
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
Principal risks: page 76
Sustainability report 54-55
EGS appendix 213-215
c) Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios including a 2°C or lower
temperature scenario.
Principal risks: page 76
Sustainability report 54-55
EGS appendix 213-215
Risk
management
Disclose how the
organisation
identifies, assesses
and manages
climate-related risks.
a) Describe the organisation’s processes for
identifying and assessing climate-related risks.
Principal risks: pages 68-70, 76
Sustainability report 54-55
EGS appendix 213-215
b) Describe the organisation’s processes for
managing climate-related risks.
Principal risks: pages 68-70, 76
Sustainability report 54-55
EGS appendix 213-215
c) Describe how processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management.
Principal risks: pages 68-70, 76
Sustainability report 54-55
EGS appendix 213-215
Metrics and
targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-
related risks and
opportunities.
a) Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in
line with its strategy and risk management process.
ESG Appendix: pages 215-216
Key Performance indicators: page 41
Sustainability report: pages 48-54
b) Disclose scope 1, scope 2, and, if appropriate,
scope 3 greenhouse gas (‘GHG’) emissions and the
related risks.
ESG Appendix: pages 215-216
Key Performance indicators: page 41
Sustainability report: pages 48-54
c) Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets.
ESG Appendix: pages 216
Key Performance indicators: page 41
Sustainability report: pages 48-54
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SECTION 172 STATEMENT
Delivering long term sustainable
value for all our stakeholders
Proactively engaging with all our stakeholders is critical to our
long term success. We encourage ongoing, open and honest
dialogue all year to help us make better business decisions for
the benefit of all our stakeholders.
Maintaining two-way relationships with our
keystakeholder groups, which are identified
onpages 65 to 67, enables us to understand their
views and objectives. With this understanding,
the Board is able to factor the potential impact
ofdecisions on each stakeholder group into the
Company’s strategic decision-making and
consider their needs and interests in line with
section 172 of the Companies Act 2006.
Engagement with stakeholders takes place
through a range of mechanisms, key examples
ofwhich are set out on the following pages.
Thesemechanisms are kept under review and
theBoard is satisfied that they remained effective
throughout 2023.
Section 172
The Board of directors of Bunzl plc promotes the success
of the Company for the benefit of its members as a whole,
having sufficient regard to:
The likely consequences of any decision
in the long term
• Company purpose: page 26
• Acquisitions: page 29
• Our business model: page 24
• Our strategy: page 26
• Shareholder returns: page 7
The impact of the Company’s operations on the
community and the environment
• Sustainability: pages 44 to 62
• TCFD disclosures: page 63
• Carbon emissions: pages 215 and 216
• Community investment: page 220
• Non-financial information statement:
page 89
The interests of the Company’s employees
• Employment policies: page 148
• Employee engagement statement:
page 101
• Diversity, equity and inclusion: page 60
• Succession planning: page 108
• Our people: pages 34 to 39
The desirability of the Company maintaining
areputation for high standards of
businessconduct
• Audit Committee report: pages 112 to 121
• Independent auditors’ report:
pages 196 to 201
• Whistleblowing: page 218
• Culture and values: page 100
• Non-financial information statement:
page 89
The need to foster the Company’s
businessrelationships with suppliers,
customersand others
See our ‘Policy hub’ at www.bunzl.com
toaccess:
• Business Code of Conduct Policy
• Bunzl Anti-Bribery and Corruption Policy
• Bunzl Ethical Sourcing Policy
• Modern Slavery Statement
• Supplier Code of Conduct
The need to act fairly as between members
of the Company
• Shareholder engagement: page 102
• The Company’s Annual General Meeting:
page 147
Engagement is carried out primarily at operational
level and is reported to the Board by senior
management on a regular basis. Direct
engagement by the Board takes place when
appropriate and on pertinent matters.
When considering stakeholders in its
deliberations, there are occasions when the
Board must weigh the competing interests
ofcertain stakeholder groups against each other.
In such cases, the Board always seeks to ensure
that those impacted are treated fairly.
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Customers
Relevance to strategy
Customers are central to Bunzl’s purpose
ofproviding essential business solutions
around the world, and Bunzl’s strategy
isformed to achieve this purpose while
creating long term value for the benefit
ofstakeholders as a whole. A key tenet of
ourstrategy is organic growth; expanding
bydeveloping our business with current
customers and gaining new business with
additional customers.
Concerns and interests
• Customised digital solutions
• Sustainable product expertise, support
and sourcing
• Innovative product solutions
• Competitive prices
• On-time and in-full delivery
• Access to customer service and sales
• Enhanced operational efficiency
How we engage
Our customer relationships are akin to
partnerships. We maintain frequent two-way
dialogue with customers to enhance our
understanding of their business needs and
ambitions, which enables us to provide them
with a truly tailored service. By running
dedicated innovation sessions with large
customers, proactively seeking feedback and
having discussions about customer insights
at Board level, we are able to place the needs
of customers at the heart of our business
and adapt our strategy accordingly.
Outcomes of engagement
Recent engagement has highlighted the
importance of digital solutions to our
customers. In response to this, we have
continued to expand our digital capabilities
throughout 2023 by investing in a number
offast growing, high margin specialist online
distributors to provide expert advice and
specialist support to our customers, see
page 31. This digital focus has also informed
the Board’s strategic agenda in relation to
acquisitions and market expansion, which
are outlined on page 13.
72%
of customer orders processed digitally
c.25%
of group revenue generated
through own brand sales
Employees
Relevance to strategy
Bunzl has 24,528 employees worldwide.
Bunzl’s employees represent our biggest
opportunity and are the focus of the
business. Recruiting, retaining and
developing the best talent is key to Bunzl’s
strategy as it shapes our culture and ensures
that every person pulls in the same direction
to achieve Bunzl’s purpose.
Concerns and interests
• Fair remuneration
• Talent development and career
progression
• A safe and inclusive working environment
• Good communications
• Sharing in the Company’s success
• Fair policies and practices
• Having a positive impact on the community
and the environment
How we engage
The Board carried out direct engagement
with employees during 2023 through site
visits, meetings with young talent groups and
CEO and non-executive director listening
sessions. In addition, indirect engagement
took place through regular team briefings
and Board consideration of our 2023 Great
Place to Work Survey.
Outcomes of engagement
See the employee engagement statement
onpage 101 for the Company’s responses to
engagement with employees during the year.
The outcome of Bunzl’s 2023 Great Place to
Work survey is detailed on page 35.
24,528
employees
70%
overall perception score in our
Great Place to Work survey
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SECTION 172 STATEMENT continued
Shareholders
Relevance to strategy
Maintaining shareholder support by building
meaningful relationships is key to Bunzl’s
strategy, as our shareholders influence
thelong term direction and governance
framework of the Company. Frequent
dialogue keeps the Company informed
astothe concerns and interests of our
investors and allows the Company to
respond, grow and perform better.
Concerns and interests
• Financial performance
• Resilience
• Environmental, social and
governancematters
• Executive remuneration
• Shareholder returns
• Strategic priorities
• Leadership and succession planning
How we engage
Committee Chairs proactively seek
engagement with major shareholders on
pertinent matters within their responsibility
and major shareholders are routinely invited
to meet with the Chairman. To read more
about direct engagement between the Board
and shareholders see page 102. Bunzl
engages in dialogue with major shareholders
throughout the year at regular meetings and
investor roadshows, the outcomes of which
are reported to the Board. More broadly,
Bunzl updates shareholders on trading
performance six times a year, encourages
attendance at the Annual General Meeting
(‘AGM’) and, in June 2023, hosted an Insight
Day in North America for investors and
analysts, details of which can be found
onpage 102.
Outcomes of engagement
The outcomes of all of our 2023 shareholder
meetings were positive, with no specific
matters of concern being raised. In addition,
Bunzl gathered feedback from 22 investors
who met with the Company following the
announcement of its half-year results. The
outcome of this was positive, with Bunzl
obtaining a net confidence score of 89%.
c.210
meetings with investors
89%
investor net confidence score
Suppliers
Relevance to strategy
Building strong and trusted partnerships
with suppliers is fundamental to our business
model. Our suppliers are our partners, and
collaboration enables Bunzl to maintain
resilient supply chains, drive ambitious
business solutions and provide customers
access to products that meet their individual
needs with the reassurance that they have
been ethically sourced.
Concerns and interests
• Ethical supply chains
• Reliable partnerships
• On-time payment
• Mutual trust
• Improving environmental impacts
How we engage
Engagement with suppliers takes place
primarily at operational level, with
management providing frequent updates
onour supplier engagement programme
tothe Board Sustainability Committee, who
subsequently reports to the Board. One area
of focus in 2023 was engaging suppliers on
the requirement to set science-based
emissions targets by 2027. In addition, we
operate a rigorous onboarding and audit
operation in line with Bunzl’s Supplier
Codeof Conduct and compliance with this
ismonitored by our Global Supply Chain
Solutions team. For more information on our
responsible sourcing process, see page 218.
Outcomes of engagement
We are on track to achieve our scope 3
emissions target and 79% of our suppliers
will have science-based targets by 2027,
aligned to the SBTi. To read about our work
to build a low carbon supplier network, see
page 52. Further outcomes of engagement
with Bunzl’s suppliers and the results of
supplier audits undertaken during the year
can be found on page209.
1,022
supplier audits conducted in 2023
750
of our largest suppliers engaged with
in 2023 regarding setting their own
science-based emissions targets
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Environment and community
Relevance to strategy
Sustainability is core to Bunzl’s strategy and
long term success. Our culture of continuous
improvement drives the determination to set
and meet ambitious climate-related targets.
Bunzl’s decentralised business relies on local
suppliers, recruiting local talent and
championing local businesses. Giving back to
the community is core to Bunzl’s values and
the Company participated in a range of
community initiatives throughout the year.
Concerns and interests
• Ambitious climate targets
• Science-backed commitments
• Clear roadmap to net zero
• Ethical supply chains
• Local support
• Community investment
• Cost of living crisis
• Inclusive working practices
• Employing local talent
• Sourcing local products
How we engage
Supported by the Board Sustainability
Committee, the Board defines the Company’s
sustainability strategy and oversees its
implementation by way of updates from
management. The Company maintains
dialogue with environmental agencies and
educates customers, employees and
suppliers on sustainable practices in line with
best practice and local laws. To benefit the
wider community, Bunzl supports the
communities where our employees live and
work and encourage fundraising activities
which are championed by our businesses
and their employees locally. More
information detailing our charitable
contributions during the year can be found
on page 220.
Outcomes of engagement
During 2023, we made good progress across
our four core sustainability themes; taking
action on climate change, providing tailored
solutions, responsible supply chains and
investing in a diverse workforce. To read
more, see our non-financial Key Performance
Indicators on page 41. Group wide, Bunzl
donated a total of c. £1.8m to charitable
causes during 2023.
30%
more carbon efficient since 2019
£1.8m
donated to charitable causes
Group-wide during 2023
CASE STUDY:
EcoTools.nl
Decision
In 2023, the Board considered the acquisition
of EcoTools.nl, a Netherlands based specialist
online distributor of tool accessories and
industrial consumables to customers across
the Benelux region.
Considerations
Potential acquisitions are scrutinised by the
Board to ensure the Company is making
disciplined investments within our key
acquisition criteria, including businesses selling
goods-not-for-resale to a fragmented customer
base, with attractive financial returns and the
opportunity to enhance our ‘own label’
offering. In deciding whether to approve the
proposal, the Board also considered how the
proposed acquisition would affect the
Company’s key stakeholders, including:
• Shareholders: the Board evaluated the
impact of the acquisition on shareholder
value including consideration of the
Group’s capital allocation and the financial
performance of Ecotools.nl. The Board
also considered the portfolio optimisation
of the Group recognising that Ecotools.nl
complements other online-focused
businesses within the Group’s portfolio
and further strengthens the Group’s
digital capabilities;
• Employees: the Board was mindful of
cultural fit to maintain our high standards
of responsible business conduct and to
ensure alignment between the values
ofthe management teams and people
atEcoTools.nl and the Group;
• Customers: the Board considered the
consequences of the acquisition on our
customers noting that the acquisition
would increase the Group’s exposure to
fast-growing, specialist online distributors
which will enhance the experience of our
customers and increase the efficiency
ofour business; and
• Suppliers: the Board discussed the
environmental, social and governance
implications of the proposed acquisition
and were cognisant of EcoTools.nl’s
own-brand product range which is
complementary to our
sustainabilityagenda.
Outcome
After careful consideration of the above
criteria, along with the results of our thorough
due diligence, the Board concluded the
acquisition of Ecotools.nl to be in the best long
term commercial interest of the Company and
for the benefit of stakeholders as a whole.
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STEP 1:
Risk identification
• Every business, business area, the Executive Committee and the
Board consider, identify and document risks in a consistent way
within the categories of strategic, operational and financial risks.
• This includes current risks as well as emerging risks which also
need to be assessed and carefully monitored.
STEP 2:
Inherent risk
assessment
• The inherent impact and probability of risks are evaluated before
considering the effect of any mitigating activities:
• impact is assessed based on a defined range of business
continuity, health & safety, environmental, regulatory, reputational
and financial criteria; and
• probability is assessed as remote, unlikely, possible or probable.
STEP 3:
Risk response and
residual risk
assessment
• The relevant mitigating activities and controls are evaluated for
each risk.
• The residual risk is assessed assuming that the mitigating actions
and internal controls operate as intended in an effective way.
• If necessary, to bring the residual risk within Bunzl’s risk appetite,
enhancements to risk mitigation activities and controls are
considered until the residual risk is reduced to an acceptable level.
PRINCIPAL RISKS AND UNCERTAINTIES
A robust approach
to risk management
Bunzl operates in six core market sectors in
33countries which exposes it to risks and
uncertainties. The Group sees the management
of risk, both positive and negative, as critical to
achieving its strategic objectives.
Risk assessment
Identify
Risk
management
Assess
Respond
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STEP 1:
Risk identification
• Every business, business area, the Executive Committee and the
Board consider, identify and document risks in a consistent way
within the categories of strategic, operational and financial risks.
• This includes current risks as well as emerging risks which also
need to be assessed and carefully monitored.
STEP 2:
Inherent risk
assessment
• The inherent impact and probability of risks are evaluated before
considering the effect of any mitigating activities:
• impact is assessed based on a defined range of business
continuity, health & safety, environmental, regulatory, reputational
and financial criteria; and
• probability is assessed as remote, unlikely, possible or probable.
STEP 3:
Risk response and
residual risk
assessment
• The relevant mitigating activities and controls are evaluated for
each risk.
• The residual risk is assessed assuming that the mitigating actions
and internal controls operate as intended in an effective way.
• If necessary, to bring the residual risk within Bunzl’s risk appetite,
enhancements to risk mitigation activities and controls are
considered until the residual risk is reduced to an acceptable level.
The Board
The Audit Committee
Executive Committee
Risk management process
To deliver the Group’s strategic objectives
successfully, and provide value for
shareholders and other stakeholders, it
iscritical that Bunzl maintains an effective
process for the management of risk. The
Company has a risk management policy
whichensures that a consistent process is
followed by every business and business area
as well as the Executive Committee and
ultimately the Board, firstly to assess and then
subsequently to manage both current and
emerging risks. These interrelated aspects
ofthe Group’s risk management policy are
explained below*. Additional details are also
provided on the keyrisk management
activities undertaken during 2023.
Risk management
Business area management Business management
Establishes the nature and extent of risk the
Group is willing to accept (its ‘risk appetite’) in
pursuit of Bunzl’s strategic objectives.
Reviews the process for the management of risk, including the risk
assessment and risk response, and its effectiveness.
The Group’s decentralised management structure allows for the
establishment of clear ownership of risk identification and
management at the business area level within the framework
ofBunzl’s risk management policy.
Holds regular meetings with business area management to discuss
strategic, operational and financial issues and ensures policies and
procedures are in place to identify and manage the principal risks
affecting each of the Group’s businesses. Business area management
present risk assessments to the Executive Committee annually,
focusingon the key risks in their region, processes they have in place
toidentify risk and any areas of heightened concern or any emerging
risks for the future.
Performs a robust assessment of the Group’s
risks through a biannual review of the Group’s
risk register, focusing on the evolving risk
landscape, emerging risks and those risks
considered to be significant by management
and the Executive Committee.
Directs and oversees internal audit’s activities and reviews the results
ofassurance over controls and risk mitigation activities.
Businesses, with the support of business area management,
implement and monitor the effectiveness of controls, policies
and procedures designed to manage risk.
Considers the evolving risk landscape, including reviewing the results
ofthe risk assessment process and assessing the sufficiency of risk
mitigation activities for current risks as well as the threats and
opportunities from emerging risks.
Continuously monitors and oversees the
Group’s risk management and internal
controls processes and procedures.
* The ‘Risk management and internal control’ section of
the Corporate governance report on pages 104 to 105
includes further information on the specific procedures
designed to identify, manage and mitigate risks which
could have a material impact on the Group’s business,
financial condition or results of operations and for
monitoring the Company’s risk management and
internal control systems.
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Principal risks and uncertainties
The Group operates in six core market sectors
in33 countries which exposes it to risks and
uncertainties, many of which are not fully within
the Group’s control. The risks summarised below
represent the principal risks and uncertainties
faced by the Group, being those which are
material to the development, performance,
position or future prospects of the Group, and
the steps taken to mitigate such risks. However,
these risks do not comprise all of the risks that
the Group may face and accordingly this summary
is not intended to be exhaustive.
In addition, the Group’s financial performance is
partially dependent on general global economic
conditions, the deterioration of which could have
an adverse effect on the Group’s business and
results of operations. Although this is not
considered by the Board to be a specific principal
risk in its own right, many of the risks referred to
below could themselves be impacted by the
economic environment prevailing in the Group’s
markets from time to time.
The risks are presented by category of risk
(Strategic, Operational and Financial) and are not
presented in order of probability or impact. The
relevant component of the Group’s strategy that
each risk impacts is also noted:
Organic growth
Acquisition growth
Operating model improvements
Sustainability
The nature and type of the principal risks
anduncertainties affecting the Group are
consideredto be unchanged compared
tothe2022 Annual Report.
Monitoring risks
The Board reviews each risk and assesses the
gross impact, applying the hypothetical
assumption that there are no mitigating controls
in place, the net impact after mitigating controls
and the probability to set the Group’s mitigation
priorities. The register of principal risks and
uncertainties was updated following review by the
Executive Committee and approval by the Board.
Emerging risks
In addition to the principal risks faced by the
Group, there are risks which are more uncertain
in nature and difficult to assess or that have the
potential to develop and increase in severity
overtime.
One such risk is that due to ongoing and new
geopolitical conflicts arising in 2023, market
shortages or other adverse events in the supply
chain impacting the sourcing and delivery of our
products emerged as a risk that may impact
Bunzl’s operations. Failure to supply and deliver
the required volumes could adversely impact
revenue, profit, and customer relationships.
Management will continue to monitor this risk
andthe impact on operations and any other
uncertainties that may impact Bunzl’s operations.
As part of the ongoing risk management
processes, the Board closely monitors all
emerging risks that have the potential to
increasein significance and affect the
performance of the Group and its ability to
meetits strategic objectives.
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Principal risks facing
the Group
Description of risk and how it might affect
the Group’s prospects
How the risk is managed
or mitigated
Developments in
2023
Strategic risks
1. Competitive pressures
Revenue and profits are
reduced as the Group loses a
customer or lowers prices due
to competitive pressures
Risk owner:
CEO and Business
Area Heads
Change to risk level:
Included in viability
statement: Yes
• The Group operates in highly competitive markets
and faces price competition from international,
national, regional and local companies in the
countries and markets in which it operates.
• Unforeseen changes in the competitive landscape
could also occur, such as an existing competitor
ornew market entrant introducing disruptive
technologies or changes in routes to market.
• Customers, especially large or growing customers,
could exert pressure on the Group’s selling prices,
thereby reducing its margins, switch to a competitor
or ultimately choose to deal directly with suppliers.
• Any of these competitive pressures could lead to a
loss of market share and a reduction in the Group’s
revenue and profits.
• The Group’s geographic and market sector
diversification allow it to withstand shifts in demand,
while this global scale across many markets also
enables the Group to provide the broadest possible
range of customer specific solutions to suit their
exacting needs.
• The Group maintains high service levels and close
contact with its customers to ensure that their needs
are being met satisfactorily. This includes continuing
to invest in e-commerce and digital platforms to
enhance further its service offering to customers.
• The Group maintains strong relationships with
avariety of different suppliers, thereby enabling
theGroup to offer a broad range of products to
itscustomers, including own brand products, in
aconsolidated one-stop-shop offering at
competitiveprices.
• The Group’s large sales force connected with
customers to help them understand the range
ofproducts available to meet their needs.
• The Group continued to invest in technology
tostreamline customers’ experience.
• The Group continued to develop its sustainable
product assortment and tools to assist customers
inmeeting their sustainability goals.
2. Financial collapse of
either a large customer
and/or a significant
number of small customers
Revenue and profits are
reduced as the Group loses
customers
Risk owner:
CEO and Business Area Heads
Change to risk level:
Included in viability
statement: Yes
• An unexpected insolvency of either a large customer
or a significant number of small customers,
particularly within the retail and foodservice sectors,
could lead to a sudden reduction in revenue and
profits, including the cost of impairing any
irrecoverable receivables balances, as well as
operating margin erosion due to under-used
capacity.
• The Group’s revenue and profits may be affected as
well as receivables and inventory (if customer specific
inventory is held).
• The Group monitors significant developments in
relationships with key customers, including credit
checks and limits set for each customer.
• Delegation of authority limits mean that there is
oversight of all material customer contracts at
business area and local level.
• In 2023, the Group did not encounter material
insolvencies of either a large customer or a
significant number of smaller customers. However,
this remains a significant risk given the potential for
global economic downturn.
• In 2023, provisions relating to the Group’s
creditexposure from customers remained
broadlyunchanged.
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Principal risks facing
the Group
Description of risk and how it might affect
the Group’s prospects
How the risk is managed
or mitigated
Developments in
2023
Strategic risks continued
3. Product cost deflation
Revenue and profits are
reduced due to the Group’s
need to pass on cost price
reductions
Risk owner:
CEO and Business
Area Heads
Change to risk level:
Included in viability
statement: Yes
• In the event of a reduction in the cost of products
bought by the Group, due to suppliers passing on
lower commodity prices (such as plastic or paper)
orother price reductions, lower trade tariffs and/or
foreign currency fluctuations, coupled with actions
ofcompetitors or customers, indexed or cost plus
contracts may require the Group to pass on such
cost reductions to customers, resulting in a
reduction in the Group’s revenue and profits.
• Operating profits may also be lower due to the
abovefactors if operating costs are not reduced
commensurate with the reduction in revenue.
• The Group uses its considerable experience in
sourcing and selling products to manage prices
during periods of deflation in order to minimise
theimpact on profits.
• Focus on the Group’s own brand products, together
with the reinforcement of the Group’s service and
product offering to customers, helps to minimise
theimpact of price deflation.
• The Group continually looks at ways to improve
productivity and implement other efficiency
measures to manage and, where possible, reduce
itsoperating costs.
• In 2023, the Group experienced a higher level of
price volatility compared to recent years. During the
second half of 2023, the Group began experiencing
product cost deflation, particularly in North America.
The outlook for product costs, however,
remainsuncertain
4. Cost inflation
Profits are reduced due to the
Group’s inability to pass on
product or operating cost
increases
Risk owner:
CEO and Business Area Heads
Change to risk level:
Included in viability
statement: Yes
• Significant or unexpected cost increases by
suppliers, due to the pass through of higher
commodity prices (such as plastic or paper) or other
price increases, higher trade tariffs and/or foreign
currency fluctuations, could adversely impact profits
if the Group is unable to pass on such product cost
increases to customers.
• Operating profits may also be lower due to the above
factors if selling prices are not increased
commensurate with the increases in operating costs.
• The Group sources its products from a number of
different suppliers based in different countries so
that it is not dependent on any one source of supply
for any particular product, or overly exposed to a
particular country changing trade tariffs, and can
purchase products at the most competitive prices.
• The majority of the Group’s transactions are
carriedout in the functional currencies of the
Group’s operations, but for foreign currency
transactions some forward purchasing of foreign
currencies is used to reduce the impact of short
termcurrency volatility.
• The Group will, where possible, pass on price
increases from its suppliers to its customers.
• The Group continually looks at ways to improve
productivity and implement other efficiency
measures to manage and, where possible, reduce
itsoperating costs.
• The Group experienced significant product cost
inflation in recent years. Selling prices to customers
were continually evaluated and updated to ensure
that profitability levels were at least maintained.
• The Group’s ongoing focus on own brand product
development was an important part of the
discussion with customers about price increases.
• Overall, the Group was very successful in passing
onproduct cost inflation, which has eased
considerably during 2023.
• Inflation in operating costs remained elevated in
2023, but has started to normalise during the year.
• To mitigate the operating costs increases the
Groupdrives efficiencies by consolidating facilities
and implementing IT systems and solutions to
improve productivity.
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Principal risks facing
the Group
Description of risk and how it might affect
the Group’s prospects
How the risk is managed
or mitigated
Developments in
2023
Strategic risks continued
5. Inability to make further
acquisitions
Profit growth is reduced from
the Group’s inability to acquire
new companies
Risk owner:
CEO and Business
Area Heads
Change to risk level:
Included in viability
statement: Yes
• Acquisitions are a key component of the Group’s
growth strategy and one of the key sources of the
Group’s competitive advantage, having announced
214 acquisitions since 2004.
• Insufficient acquisition opportunities, through a
lackof availability of suitable companies to acquire
oran unwillingness of business owners to sell
theircompanies to Bunzl, could adversely impact
future profit growth.
• The Group maintains a large acquisition database
which continues to grow with targets identified by
managers of current Bunzl businesses, research
undertaken by the Group’s dedicated and
experienced in-house corporate development team
and information received from banking and
corporate finance contacts.
• The Group has a strong track record of successfully
making acquisitions. At the same time, the Group
maintains a decentralised management structure
which facilitates a strong entrepreneurial culture and
encourages former owners to remain within the
Group after acquisition, which in turn encourages
other companies to consider selling to Bunzl.
• The acquisition pipeline is closely monitored with
continued research of any available opportunities
forinvestment
• During 2023, the Group’s committed acquisition
spend was £468 million and the pipeline
remainsactive
6. Unsuccessful acquisition
Profits are reduced, including
by an impairment charge, due
to an unsuccessful acquisition
or acquisition integration
Risk owner:
CEO and Business
Area Heads
Change to risk level:
Included in viability
statement: Yes
• Inadequate pre-acquisition due diligence related to
atarget company and its market, or an economic
decline shortly after an acquisition, could lead to the
Group paying more for a company than its fair value.
• Furthermore, the loss of key people or customers,
exaggerated by inadequate post-acquisition
integration of the business, could in turn result in
underperformance of the acquired company
compared to pre-acquisition expectations which
could lead to lower profits as well as a need to
recordan impairment charge against any associated
intangible assets.
• The Group has established processes and
procedures for detailed pre-acquisition due diligence
related to acquisition targets and the post-
acquisition integration thereof.
• The Group’s acquisition strategy is to focus on those
businesses which operate in sectors where it has or
can develop competitive advantage and which have
good growth opportunities.
• The Group endeavours to maximise the performance
of its acquisitions through the recruitment and
retention of high quality and appropriately
incentivised management combined with effective
strategic planning, investment in resources and
infrastructure and regular reviews of performance
byboth business area and Group management.
• The acquisition pipeline is reviewed by Exco, and for
any new acquisitions that are proposed, the Board
reviews the potential acquisition in detail
• The CEO and CFO review the performance of all
acquisitions with business area management teams
on a quarterly basis.
• Internal Audit reviews acquisitions within 12 to 18
months of the sale.
• The Board reviews performance of recent
acquisitions annually. In 2023, the Board reviewed
the principal acquisitions made in 2021 and noted
that performance was in line with expectations.
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Principal risks facing
the Group
Description of risk and how it might affect
the Group’s prospects
How the risk is managed
or mitigated
Developments in
2023
Strategic risks continued
7. Sustainability driven
market changes
Revenue and profits are
reduced from the Group’s
inability to offer sustainable
products in response to
changes in legislation,
consumer preferences or the
competitive environment
Risk owner:
CEO and Business
Area Heads
Change to risk level:
Included in viability
statement: Yes
• New legislation introduced outside Europe and the
UK in countries where Bunzl operates mirrors (and
insome cases goes further than) the legislation
previously introduced in Europe and the UK. The
scope of new legislation tends to cover a wider range
of products than that previously introduced.
Legislation related to packaging still remains
extremely fragmented across different regions.
• Some legislation seeking to restrict the use of
plastics has been challenged and overturned in
court. However, it can be expected that the
legislation will be reintroduced in some form and
assuch it is not anticipated that there will be a
widespread removal of the legislative measures
already in place across the Group.
• Consumer sentiment and customer targets are likely
to lead to a reduction in demand for single-use
plastic-based products that the Group sells, whilst
simultaneously increasing demand for renewable,
recyclable, or reusable alternatives.
• The Group’s revenue and profits could be reduced
ifit is unable to offer packaging and products made
from alternative materials that will replace products
that cannot be sold due to legislation, or products
where demand is lower due to changes in consumer
preferences, for example a move to more
reusablepackaging.
• Bunzl is well positioned to support its customers
with the legislative complexity thanks to its material
agnostic position and network strength that allowing
it to deliver the right products across large multi-site
customer operations.
• Bunzl’s scale and unique position at the centre of the
supply chain, supported by expert sustainability
managers, gives the Group an opportunity to provide
customers with advice about alternative products
which are recyclable, compostable, biodegradable
orreusable.
• The Group has access to an extensive supply chain
ofproduct and packaging manufacturers who are
innovating the range of products they produce to
satisfy the increased focus on sustainability. This
means the Group can offer the broadest possible
range of products whether in response to legislative
changes, consumer preference driven changes or
adesire to offer market-leading products to the
Group’s customers.
• The Group has access to the proprietary data on
thepackaging and products our customers need.
That coupled with the Group’s detailed product
knowledge and data on customer product usage,
ensures that the Group is well-positioned to be able
to support its customers in shaping and achieving
their sustainability strategies.
• The majority of the Group’s businesses in the retail,
foodservice and grocery sectors now employ
material footprint tools that explain how legislation
will impact the products and packaging a customer
uses, while promoting the alternatives we have in
ourranges.
• In response to a larger number of customers setting
increasingly ambitious targets for their packaging,
the Group has continued to strengthen its expert
sustainability teams who train customers on
incoming legislation, hold customer forums where
they showcase the latest products and support
customers to report effectively against their goals
and participation in industry-leading external
schemes such as the New Plastics Economy and
B-Corp certification.
• The Group continued to expand and introduced
newranges of own brand products made from
alternative materials.
Operational risks
8. Cyber security failure
Revenue and profits are
reduced as the Group is
unable to operate and serve
its customers’ needs due to
being impacted by a cyber-
attack
Risk owner:
CIO
Change to risk level:
Included in viability
statement: Yes
• The frequency, sophistication and impact of
cyber-attacks on businesses are rising at the same
time as Bunzl is increasing its connectivity with third
parties and its digital footprint through acquisition
and investment in e-commerce platforms and
efficiency enhancing IT systems.
• Weak cyber defences, both now and in the future,
through a failure to keep up with increasing cyber
risks and insufficient IT disaster recovery planning
and testing, could increase the likelihood and
severity of a cyber-attack leading to business
disruption, reputational damage and loss of
customers and/or a fine under applicable data
protection legislation.
• Concurrent with the Group’s IT investments, the
Group is continuing to improve information security
policies and controls to improve its ability to monitor,
prevent, detect and respond to cyber threats.
• Cyber security awareness campaigns have been
deployed across all regions to enhance the
knowledge of Bunzl personnel and their resilience to
phishing attacks.
• IT disaster recovery and incident management plans,
which would be implemented in the event of any
such failure, are in place and periodically tested.
TheGroup Chief Information Officer and Chief
Information Security Officer coordinate activity in
thisarea.
• The Group continued to improve cyber security and
data privacy governance, architecture, and controls,
along with increasing awareness of both cyber
security and data privacy across the Group.
• Investments were made in modern cyber security
technologies that address current and emerging
threats while improving operational processes
andprocedures.
• The Group focused on improving cyber security
anddata privacy due diligence processes during the
acquisition process, along with improving security
posture for acquired companies.
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Principal risks facing
the Group
Description of risk and how it might affect
the Group’s prospects
How the risk is managed
or mitigated
Developments in
2023
Financial risks
9. Availability of funding
Insufficient liquidity in
financial markets leading to
insolvency
Risk owner:
CFO
Change to risk level:
Included in viability
statement: Yes
• Insufficient liquidity in financial markets could lead to
banks and institutions being unwilling to lend to the
Group, resulting in the Group being unable to obtain
necessary funds when required to repay maturing
borrowings, thereby reducing the cash available to
meet its trading obligations, make acquisitions and
pay dividends.
• The Group arranges a mixture of borrowings from
different sources and continually monitors net debt
and forecast cash flows to ensure that it will be able
to meet its financial obligations as they fall due and
that sufficient facilities are in place to meet the
Group’s requirements in the short, medium and
longterm.
• The availability of funding to the Group
remainsstrong.
• During 2023, £365m of bank facilities were signed
with maturities between 2026 to 2028. The Group
expects to extend and finance additional bank
facilities during 2024. There is £130m of debt
maturing in the next 12 months which can be repaid
from free cash flow. The Group maintains a BBB+
rating from S&P and therefore access to the
Eurobond public market.
Financial risks
10. Currency translation
Significant change in foreign
exchange rates leading to a
reduction in reported results
and/or a breach of banking
covenants
Risk owner:
CFO
Change to risk level:
Included in viability
statement: No
• The majority of the Group’s revenue and profits are
earned in currencies other than sterling, the Group’s
presentation currency.
• As a result, a significant strengthening of sterling
against the US dollar and the euro in particular could
have a material translation impact on the Group’s
reported results and/or lead to a breach of net debt
to EBITDA banking covenants.
• The Group does not hedge the impact of exchange
rate movements arising on translation of earnings
into sterling at average exchange rates. The Board
believes that the benefits of its geographical spread
outweigh the risks.
• The Group’s borrowings are denominated in US
dollars, sterling and euros in similar proportions to
the relative profit contribution of each of these
currencies to the Group’s EBITDA. This reduces the
volatility of the ratio of net debt to EBITDA from
foreign exchange movements. In addition, net debt
for the purposes of covenant calculations in the
Group’s financing documents is calculated using
average rather than closing exchange rates.
Consequently, any significant movement in exchange
rates towards the end of an accounting period
should not materially affect the ratio of net debt to
EBITDA. Both these factors minimise the risk that
banking covenants will be breached as a result of
foreign currency fluctuations.
• In 2023, currency translation had a small positive
impact on the Group’s reported profits, increasing
the reported profit growth rates by between 0%
and3%.
• The Group’s results are reviewed at constant
exchange rates to show the underlying
performanceof the Group excluding the currency
translation impact.
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Principal risks facing
the Group
Description of risk and how it might affect
the Group’s prospects
How the risk is managed
or mitigated
Developments in
2023
Financial risks continued
11. Climate change
Change in temperature and
climate conditions that causes
business disruption and
economic loss for the Group.
Risk owner:
CEO and Business
Area Heads
Change to risk level:
Included in viability
statement: No
• Certain markets and regions are increasingly affected
by extreme weather (e.g. suppliers and customers in
areas impacted by wildfires and flooding) which could
impact our commercial strategy.
• Failing to align with our customers’ ambitions could
lead to reputational damage and loss of sales.
• The Group may face increased indirect costs from
carbon intensive products where carbon prices
increase and no suitable substitute materials exist.
• Bunzl’s supply chain flexibility and lack of fixed
manufacturing assets provide operational resilience
to the physical impacts of climate change. Our
established business continuity planning has helped
to ensure continued service to customers in case of
weather-related disruptions, such as hurricanes in
North America and the Australian wildfires.
• Setting emissions reduction targets to decarbonise
our operations and those of the supply chain
helpsto ensure our activities meet or exceed
customer expectations.
• The ability to pass through any increased costs of
products in our supply chain (for example, due to
carbon pricing mechanisms) to our customers.
• Bunzl assesses and monitors the impact of climate
change on GDP at the regional level, the impact of
carbon pricing on total supply chain carbon dioxide
emissions, and the trajectory of the reduction of
carbon emissions over time based on data from the
Network for Greening the Financial System (NGFS).
• The Group’s modelling of the impact of climate
change has been updated to include the latest data
available from the Network for Greening the Financial
System (NGFS).
• The Group has re-evaluated the different transition
scenarios in light of COP27 and other commitments
by leading nations and has concluded that there
should be no changes made to the likelihood of
thescenarios.
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VIABILITY STATEMENT
Assessment of the prospects of the
Company and its viability statement
In accordance with provision 31 of the Corporate
Governance Code, the directors set out below
how they have assessed the prospects of the
Company, over what period the prospects have
been assessed and the Company’s formal
viabilitystatement.
The context for and period over which
the prospects of the Company have
been assessed
To consider the prospects of the Company and
determine an appropriate time frame for the
purpose of making a statement on the Company’s
longer term viability, the directors have taken into
account various factors including the nature of
the Company’s business, its business model and
strategy and the existing planning periods.
In particular:
• Bunzl has a geographically balanced and
diversified business portfolio operating in more
than 33 countries;
• the Company operates across six core,
fragmented market sectors, many of which are
growing and resilient to challenging economic
conditions; and
• the business model and strategy minimise the
volatility of the Company’s results, enabling
Bunzl to deliver consistently good results with
high returns on capital and cash conversion.
With regard to the time frame specifically, the
directors considered the above factors as well
asthe Group’s strategic planning process.
Comprehensive budgets are prepared annually
bythe business areas and approved by the Board.
Strategic plans focusing on two years beyond the
forecast for the current year are also prepared
annually and reviewed by the Board. While the
directors have no reason to believe the Company
will not be viable over a longer period, given the
inherent uncertainty involved, the period over
which the directors consider it possible to form
areasonable expectation as to the Group’s
longer-term viability is the three year period to
31December 2026.
How the prospects of the Company
and its longer term viability have
been assessed
In making a viability statement, the directors are
required to consider the Company’s ability to
meet its liabilities as they fall due, taking into
account the Company’s current position and
principal risks. The Company has significant
financial resources including committed and
uncommitted banking facilities, US private
placement notes and senior bonds, further details
of which are set out in Note 18 to the consolidated
financial statements. As a result, the directors
believe that the Company is well placed to
manage its business risks successfully.
The resilience of the Group to a range of possible
scenarios, in particular the impact on key financial
ratios and its ongoing compliance with financial
covenants, was factored into the directors’
considerations through stress testing current
financial projections. These stress tests included
the following:
• the impact of the crystallisation of the principal
strategic and operational risks to the Group’s
organic growth resulting in a 25% reduction in
adjusted operating profit and a 20% increase
inworking capital; and
• the impact of the crystallisation of the principal
strategic and operational risks to the Group’s
organic growth as above, together with the
impact of the crystallisation of the principal
risks to the Group’s acquisition growth, without
mitigating actions.
In addition, the Group has carried out reverse
stress tests against the base case financial
projections to determine the conditions that
would result in a breach of financial covenants.
Inorder for a breach of covenants to occur during
the three year assessment period the Group
would need to experience a reduction in EBITDA
of over 60% compared to the base case or an
increase in net debt of over 340% .
In all scenarios it has been assumed, based on
past experience and all current indicators, that
the Company will be able to refinance its banking
facilities and US private placement notes as and
when they mature. In the first two stress tests 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 consider that the stress testing
based assessment of the Company’s prospects,
building on the results of the robust assessment
of the principal risks to the business and the
financial implications of them materialising,
confirms the resilience of the Group to severe
butplausible scenarios and provides
areasonablebasis on which to conclude on
itslonger term viability.
Confirmation of longer term viability
In accordance with the provisions of the
Corporate Governance Code, the directors have
taken account of the Group’s current position and
principal risks and uncertainties referred to above
in assessing the prospects of the Company and
they have a reasonable expectation that the
Company will be able to continue in operation and
meet its liabilities as they fall due over the three
year period to 31 December 2026.
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04
169
944
1208
Financial crisis Covid-19
1606 1410 18 2105 1309 17 2007 1511 19 22 23
RESILIENCE AND GROWTH
Bunzl’s resilience and consistency is a key
strength. This has allowed the Group to not
only perform well during challenging
periods, but emerge from them even
stronger than before. This success is driven
by a range of factors that contribute to the
Group’s overall resilience.
Resilient business
model and portfolio
Adjusted operating profit
1,2
(£m)
Resilience proven during historic challenges
Operational
resilience
• Agile decentralised model, allows us to
respond quickly to changing
conditions at a local level
• Global scale and depth of supply chain
• Strong culture of operational efficiency
Portfolio
resilience
• Diversified portfolio of essential
products and solutions across sectors
and geographies
• c.75% of revenue through more
resilient sectors: cleaning & hygiene,
grocery, foodservice and healthcare
Compounding growth
resilience
• Resilience leads to new business
opportunities – particularly evidenced
during the Covid-19 pandemic
• Advantages of joining Bunzl Group
become more apparent during
difficulttimes
Financial
resilience
• Strong operating margin in 2023
• Consistently high cash generation
• Strong balance sheet
We have proven our resilience
over time with our track record
of consistently growing returns,
even during historically
challenging periods, and ability
to generate better returns after
emerging from these periods.
1. Alternative performance measure (see Note 3 to the consolidated financial statements on page 160).
2. At actual exchange rates.
CAGR c.9%
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4.0
68.3
2322212019181716151413121110090807060504030201009998979695949392
The consistency of Bunzl’s returns have
been delivered through the ongoing
successful execution of the Group’s
compounding growth model:
Driven by activity
in our markets
• Attractive end markets with structural
growth
• New business wins and increased service
ofexisting customers
• Innovative services and product ranges
• Daily focus on making our business more
efficient
c.1/3
of revenue growth
1
Fragmented industry
and strong record
• Fragmented markets offer consolidation
opportunities
• Strong potential in end markets
• Disciplined capital allocation and portfolio
optimisation
• Strong balance sheet with significant
financial headroom
c.2/3
of revenue growth
1
Organic growth Acquisitions
8.9%
Year-on-year dividend growth
31
Years of consecutive
dividend increase
1. Based on a long term 10-year average growth rate, at constant exchange rates.
Progressive dividend:
Consistent execution of our strategy, supported by the Group’s
inherent resilience, has enabled Bunzl to achieve 31 years of
consecutive annual dividend increases.
Since 2004, we have returned a total of £2.2 billion of cash to
shareholders through our progressive dividend policy. We remain
committed to sustainable annual dividend increases.
Dividend per share
CAGR c.9%
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FINANCIAL REVIEW
Bunzl’s resilience, strong cash
generation, and successful
compounding growth
strategy supports our ability
to deliver sustainable
dividend increases
Revenue 2023
down 2.0% at actual exchange rates
£11.8bn
(2022: £12.0bn)
(1.9)%
†
Richard Howes
Chief Financial Officer
Operating profit
Up 12.5% at actual exchange rates
£789.1m
(2022: £701.6m)
+11.0%
†
Adjusted operating profit*
Up 6.6% at actual exchange rates
£944.2m
(2022: £885.9m)
+6.2%
†
Adjusted earnings per share*
Up 3.7% at actual exchange rates
191.1p
(2022: 184.3p)
+2.7%
†
Cash conversion*
Continued strong cash conversion
96%
(2022: 107%)
Dividend per share
Long track record of dividend growth
continues
68.3p
(2022: 62.7p)
+8.9%
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2023
£m
2022
£m
Growth as
reported
Growth at
constant
exchange
Financial results
Revenue 11,797.1 12,039.5 (2.0)% (1.9)%
Adjusted operating profit* 944.2 885.9 6.6% 6.2%
Adjusted profit before income tax* 853.7 818.0 4.4% 3.4%
Adjusted earnings per share* 191.1p 184.3p 3.7% 2.7%
Dividend for the year 68.3p 62.7p 8.9%
Statutory results
Operating profit 789.1 701.6 12.5% 11.0%
Profit before income tax 698.6 634.6 10.1% 7.8%
Basic earnings per share 157.1p 141.7p 10.9% 8.2%
Balance sheet and Cash flow
Return on average operating capital %* 46.1% 43.0%
Return on invested capital %* 15.5% 15.0%
Cash conversion %* 96% 107%
† At constant exchange rates.
* Alternative performance measure (see Note 3 on page 160).
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 3 to the consolidated financial statements on page 160.
Currency translation
Currency translation has had a positive impact on the Group’s reported profits, increasing the reported
profit growth rates by between 0% and 3%. This positive exchange impact to profit is primarily due to
the weakening of sterling against the euro and Brazilian real, partly offset by the strengthening of
sterling against the Australian dollar and Canadian dollar. The US dollar average exchange rate
remained in line with last year.
Average exchange rates 2023 2022
US$
1.24
1.24
Euro
1.15
1.17
Canadian$
1.68
1.61
Brazilian real
6.21
6.38
Australian$
1.87
1.78
Closing exchange rates 2023 2022
US$
1.27
1.20
Euro
1.15
1.13
Canadian$
1.68
1.63
Brazilian real
6.19
6.35
Australian$
1.87
1.77
Revenue
Revenue decreased to £11,797.1 million (2022: £12,039.5 million), a decrease of 1.9% at constant
exchange rates and 2.0% at actual exchange rates, due to underlying decline of 2.9% and impact from
the disposal of the UK Healthcare business at the end of 2022 reducing revenue by 1.5% partly offset
byacquisitions adding 2.5%. The underlying decline was impacted by a decline in Covid-19 related sales,
which are now broadly in line with 2019 levels, volume loss in North America foodservice sector driven
by increased price related competitive pressure and post-pandemic normalisation trends, as well as
areducing benefit from inflation. Furthermore, volumes were impacted by planned strategic actions
inthe North America retail business to focus on more profitable customers and the decision to
transition ownership of customer specific packaging to certain customers, as well as some volume
weakness in Continental Europe and UK & Ireland.
Movement in revenue (£m)
10,000
10,500
11,000
11, 500
12,000
12,500
12,039.5
(17.9)
(176.1)
(3 47.7)
5.8
293.5
11,797.1
2022
revenue
Currency
translation
Disposal of
business
Excess growth in
hyperinflationary
economies
Underlying
revenue
growth
Acquisitions 2023
revenue
Operating profit
Adjusted operating profit was £944.2 million (2022: £885.9 million), an increase of 6.2% at constant
exchange rates and 6.6% at actual exchange rates. At both constant and actual exchange rates
operating margin increased to 8.0% from 7.4% in 2022. The operating margin of 8.0% was supported by
good margin management, including increasing penetration of own brands, higher margin acquisitions
made, operational efficiencies and inventory driven one-off benefits in the second half of 2023.
During 2023, the Group has seen a net utilisation of approximately £25 million in trade receivables and
slow moving inventory provisions. Usage of these provisions, including some releases to profit,
exceeded net charges to increase the provisions. In addition, the Group has seen some utilisation of
the residual provisions set up in prior years as a result of market price movements on certain Covid-19
products; the remaining market price risk on these products is no longer significant.
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FINANCIAL REVIEW continued
Movement in adjusted operating profit (£m)
800
850
900
950
1,000
885.9
3.2
(11.9)
64.5
2.5
944.2
2022 adjusted
operating profit
Currency
translation
Disposal of
business
Decrease in
hyperinflation
accounting
adjustments
2023 growth 2023 adjusted
operating profit
Operating profit was £789.1 million (2022: £701.6 million), an increase of 11.0% at constant exchange
rates and 12.5% at actual exchange rates.
Movement in operating profit (£m)
475
525
575
625
675
725
775
825
64.5
14.4
(11.6)
9.1
789.1
701.6
11.1
2022 operating
profit
Currency
translation
Disposal of
business
Growth in
adjusted
operating profit
Decrease in
hyperinflation
accounting
adjustments
and impairment
Net decrease
in customer
relationships,
brands and
technology
amortisation and
acquisition related
items excluding
impairment
2023 operating
profit
Customer relationships, brands and technology amortisation and acquisition related items 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 assess the performance of the Group.
Net finance expense
The net finance expense for the year was £90.5 million, an increase of £27.2 million at constant
exchange rates (up £22.6 million at actual exchange rates), mainly due to increases in interest rates and
fair value movements on interest rate derivatives, partly offset by lower average debt during the year.
Profit before income tax
Adjusted profit before income tax was £853.7 million (2022: £818.0 million), up 3.4% at constant
exchange rates (up 4.4% at actual exchange rates), due to the growth in adjusted operating profit partly
offset by the increase in net finance expense. Profitbefore income tax was £698.6 million (2022:
£634.6million), an increase of 7.8% at constant exchange rates (up 10.1% at actual exchange rates).
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 Corporate governance section.
The effective tax rate (being the tax rate on adjusted profit before income tax) for the year was
25.0%(2022: 24.6%) and the reported tax rate on statutory profit was 24.7% (2022: 25.2%). The
effective tax rate for 2023 is higher than for 2022 primarily due to the increase in the UK statutory
taxrate from 19% to 25% from April 2023. The Group’s effective tax rate is expected to increase
tobearound 26% in 2024.
The Group is within the scope of the OECD Pillar Two model rules which take effect from 1 January
2024. Most countries in which the Group operates are expected to report an effective tax rate in excess
of 15% and therefore to qualify for a safe harbour exemption such that no top-up tax should apply. In
countries where this is not the case there is the potential for Pillar Two taxes to apply, but these are not
expected to be material.
Earnings per share
Profit after tax increased to £526.2 million (2022: £474.4 million), up 8.2% and an increase of £40.1 million
at constant exchange rates (up 10.9% at actual exchange rates), due to a £50.3 million increase in profit
before income tax, partly offset by a £10.2 million increase in the tax charge at constant exchange rates.
Profit after tax for the year bears an £11.0 million adverse impact from hyperinflation accounting
adjustments (2022: £21.2 million adverse impact and a £13.0 million hyperinflation accounting related
impairment charge to the customer relationships assets in the Group’s businesses in Turkey partly offset
by a tax credit of £2.5 million related to the impairment charge).
Adjusted profit after tax was £640.3 million (2022: £616.8 million), up 2.8% and an increase of
£17.6million at constant exchange rates (up 3.8% at actual exchange rates), due to a £27.9 million
increase in adjusted profit before income tax, partly offset by a £10.3 million increase in the tax
onadjusted profit before income tax at constant exchange rates. Adjusted profit before income
taxfortheyear bears an £11.0 million adverse impact from hyperinflation accounting adjustments
(2022:£19.4 million adverse impact).
The weighted average number of shares in issue increased to 335.0 million from 334.7 million in
2022due to employee share option exercises partly offset by share purchases into the employee
benefit trust.
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Basic earnings per share were 157.1p (2022: 141.7p), up 8.2% at constant exchange rates (up 10.9%
atactual exchange rates). Adjusted earnings per share were 191.1p (2022: 184.3p), an increase of
2.7%at constant exchange rates (up 3.7% at actual exchange rates).
Movement in basic eps (p)
3.5
157.1
141.7
2.1
3.1
6.1
0.7
(0.1)
140
130
170
160
150
110
120
100
2022 basic EPS Currency
translation
Increase in
adjusted profit
before income
tax
Decrease in
adjusting items
2023 basic EPSDecrease in
Hyperinflation
accounting
adjustments
and
impairment
Decrease in
reported tax
rate
Increase in
weighted
average
number of
shares
Movement in adjusted eps (p)
160
170
180
190
200
184.3
1.7
6.1
191.1
(0.8)
–
(0.2)
2022
adjusted EPS
Currency
translation
Increase in
adjusted profit
before income tax
Increase in
effective tax rate
Hyperinflation
accounting
adjustments
Increase in
weighted
average number
of shares
2023
adjusted EPS
Dividends
An analysis of dividends per share for the years to which they relate is shown below:
2023 2022 Growth
Interim dividend (p) 18.2 17.3 5.2%
Final dividend (p) 50.1 45.4 10.4%
Total dividend (p) 68.3 62.7 8.9%
Dividend cover (times) 2.8 2.9
The Company’s practice is to pay a progressive dividend, delivering year-on-year increases. The Board
isproposing a 2023 final dividend of 50.1p, an increase of 10.4% on the amount paid in relation to the
2022 final dividend. The 2023 total dividend of 68.3p is 8.9% higher than the 2022 total 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, coupled with the Group’s substantial borrowing facilities, provides
the Company with the financial flexibility to fund a growing dividend. After the further growth in 2023,
Bunzl has sustained 31 years of consecutive annual dividend growth to shareholders.
The risks and constraints to maintaining a growing dividend are principally those linked to the
Group’strading performance and liquidity, as described in the Principal risks and uncertainties on
pages 68 to 76. The Group has substantial distributable reserves within Bunzl plc and there is a robust
process of distributing profits generated by subsidiary undertakings up through the Group to Bunzl plc.
At 31 December 2023 Bunzl plc had sufficient distributable reserves to cover more than six years of
dividends at the levels of those delivered in 2023, which is expected to be approximately £230 million.
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FINANCIAL REVIEW continued
Acquisitions
The Group completed 20 acquisitions during the year ended 31 December 2023 with a total committed
spend of £470.3 million. Excluding the acquisition of GRC, which was agreed in 2022 but completed on
1January 2023, total committed spend on acquisitions agreed and completed during the year was
£467.5 million. The estimated annualised revenue and adjusted operating profit of the acquisitions
agreed during the year were £325 million and £51 million, respectively.
A summary of the effect of acquisitions is as follows:
£m
Fair value of net assets acquired 281.9
Goodwill 130.6
Consideration 412.5
Satisfied by:
cash consideration 343.0
deferred consideration 69.5
412.5
Contingent payments relating to retention of former owners 59.5
Net cash acquired (19.8)
Transaction costs and expenses 18.1
Total committed spend in respect of acquisitions completed in the current year 470.3
Spend on acquisitions committed at prior year end but completed in the current year (2.8)
Total committed spend in respect of acquisitions agreed in the current year 467.5
The net cash outflow in the year in respect of acquisitions comprised:
£m
Cash consideration 343.0
Net cash acquired (19.8)
Deferred consideration payments 14.5
Net cash outflow on purchase of businesses 337.7
Cash outflow from acquisition related items* 36.9
Total cash outflow in respect of acquisitions 374.6
* Acquisition related items comprise £18.1 million of transaction costs and expenses paid and £18.8 million of payments relating to the
retention of former owners.
Cash flow
A summary of the cash flow for the year is shown below:
2023
£m
2022
£m
Cash generated from operations
†
1,129.5 1,145.8
Payment of lease liabilities (188.0) (175.1)
Net capital expenditure (56.2) (45.7)
Operating cash flow
†
885.3 925.0
Net interest paid excluding interest on lease liabilities (53.2) (45.7)
Income tax paid (188.6) (173.6)
Free cash flow 643.5 705.7
Dividends paid (209.7) (190.5)
Net payments relating to employee share schemes (23.7) (31.9)
Net cash inflow before acquisitions and disposals 410.1 483.3
Acquisitions
◊
(374.6) (264.2)
Disposals – 49.9
Net cash inflow on net debt excluding lease liabilities 35.5 269.0
† Before acquisition related items.
◊ Including acquisition related items.
The Group’s free cash flow of £643.5 million was £62.2 million lower than in 2022, primarily due to the
decrease in operating cash flow of £39.7million, a £15.0 million higher cash outflow relating to tax, and
an increase in net interest paid excluding interest on lease liabilities of £7.5 million. The Group’s free
cash flow was used to finance an acquisition cash outflow of £374.6 million (2022: £264.2 million),
dividend payments of £209.7 million in respect of 2022 (2022: £190.5 million in respect of 2021) and net
payments of £23.7 million (2022: net payments of £31.9 million) relating to employee share schemes.
Cash conversion (being the ratio of operating cash flow as a percentage of lease adjusted operating
profit) was 96% (2022: 107%).
2023
£m
2022
£m
Operating cash flow 885.3 925.0
Adjusted operating profit 944.2 885.9
Add back depreciation of right-of-use assets 166.1 151.1
Deduct payment of lease liabilities (188.0) (175.1)
Lease adjusted operating profit 922.3 861.9
Cash conversion (operating cash flow as a percentage of lease adjusted
operating profit) 96% 107%
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Bunzl plc
Annual Report 2023
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Net debt
Net debt excluding lease liabilities decreased by £74.6 million during the year to £1,085.5 million
(2022:£1,160.1 million), due to a net cash inflow of £35.5 million, a £38.4 million decrease due to
currency translation and a non-cash decrease in debt of £0.7 million. Net debt including lease liabilities
was £1,750.0 million (2022: £1,730.0 million).
Net debt to EBITDA calculated at average exchange rates and based on historical accounting standards,
in accordance with the Group’s external debt covenants, was 1.1 times (2022: 1.2 times). Net debt to
EBITDA calculated at average exchange rates including lease liabilities was 1.5 times (2022: 1.5 times).
Balance sheet
Summary balance sheet at 31 December:
2023
£m
2022
£m
Intangible assets 3,242.1 3,093.9
Right-of-use assets 616.3 529.6
Property, plant and equipment 159.4 137.2
Working capital 1,158.1 1,096.6
Deferred consideration (175.6) (139.9)
Other net liabilities (333.4) (306.4)
4,666.9 4,411.0
Net pension surplus 49.4 39.9
Net debt excluding lease liabilities (1,085.5) (1,160.1)
Lease liabilities (664.5) (569.9)
Equity 2,966.3 2,720.9
Return on average operating capital 46.1% 43.0%
Return on invested capital 15.5% 15.0%
Return on average operating capital increased to 46.1% from 43.0% in 2022 mainly due to higher
returns in the underlying business driven by an increase in operating margin. Return on invested capital
was 15.5% compared to 15.0% in 2022, similarly due to higher returns in the underlying business driven
by an increase in operating profit.
Intangible assets increased by £148.2 million to £3,242.1 million due to intangible assets arising on
acquisitions in the year of £372.0 million, a net increase from hyperinflation adjustments of £8.8 million
and software additions of £15.5 million, partly offset by an amortisation charge of £145.0 million and
adecrease from currency translation of £103.1 million.
Right-of-use assets increased by £86.7 million to £616.3 million due to additional right-of-use assets
from new leases during the year of £136.7 million, an increase from remeasurement adjustments of
£119.8 million and an increase from acquisitions of £16.2 million, partly offset by a depreciation charge
of £166.1 million and a decrease from currency translation of £19.9 million.
Working capital increased from the prior year end by £61.5 million to £1,158.1 million driven by an
increase of £61.2 million from acquisitions and an underlying increase of £28.4 million as shown in the
cash flow statement, partly offset by a decrease from currency translation of £43.9 million.
Deferred consideration increased by £35.7 million to £175.6 million due to £69.5 million of deferred
consideration recognised on current year acquisitions, partly offset by deferred consideration and
retention payments of £30.0 million, a credit from adjustments to previously estimated earn outs net
ofcharges relating to the retention of former owners of £1.4 million and a decrease from currency
translation of £2.4 million. Including expected future payments which are contingent on the continued
retention of former owners of businesses acquired of £83.2 million, total deferred and contingent
consideration at 31 December 2023 was £258.8 million (2022: £216.2 million).
The Group’s net pension surplus of £49.4 million at 31 December 2023 has increased by £9.5 million
from the net pension surplus of £39.9 million at 31 December 2022, largely due to cash contributions
of£6.9 million.
Shareholders’ equity increased by £245.4 million during the year to £2,966.3 million.
Movement in shareholders’ equity (£m)
2100
2200
2300
2400
2500
2600
2700
2800
2900
3000
3100
3200
3300
2,720.9
(209.7)
(97.0)
526.2
(19.3)
21.6 2.8
20.8
2,966.3
2022
shareholders’
equity
Currency
(net of tax)
Profit for
the year
Actuarial gain
on pension
schemes
(net of tax)
Hyperinflation
accounting
adjustments
Dividends Share based
payments
(net of tax)
Employee
share
options
(net of tax)
2023
shareholders’
equity
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FINANCIAL REVIEW continued
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 and the Company’s current credit rating with
Standard & Poor’s is BBB+. 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 year 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 Board. Controls over exposure changes and transaction authenticity are in place.
During the year, the Group’s USD interest rate swaps and committed USD bank facility, which previously
referenced the discontinued USD LIBOR, have been renegotiated to reference SOFR, the new USD
benchmark. This has not had an impact on the financial results for the year ended 31 December 2023.
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 financial 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. Sensitivity analyses using various
scenarios are applied to forecasts to assess their impact on covenants and net debt. During the year
ended 31 December 2023 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.
Inaddition, the principle financial covenants were removed from the Group’s committed bank
facilitiesin 2022.
The Group has substantial funding available comprising multi-currency credit facilities from the Group’s
banks, US private placement notes and senior bonds. At 31 December 2023 the nominal value of US
private placement notes outstanding was £917.5 million (2022: £1,126.4 million) with maturities ranging
from 2024 to 2032. At 31 December 2023 the available committed bank facilities totalled £852.6 million
(2022: £963.6 million) of which none (2022: none) was drawn down, providing headroom of
£852.6 million (2022: £963.6 million). During 2023, £365 million of bank facilities were signed with
maturities between 2026 to 2028. The Group expects to make repayments in the 18 month period from
the date of these financial statements to the end of 30 June 2025 of approximately £302 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.
Committed facilities maturity profile by year (£m)
0
100
200
300
400
500
600
2024 2025 2026 2027 2028 2029 2030 2031 2032
130
180
50
172
300
124
138
100
330
39
106 106
103
55
400
137
US private placement notes Bank facilities – drawn
Senior bonds Bank facilities – undrawn
Further details of the Group’s capital management and treasury policies and controls are set out in
Note 18 on pages 174 to 179.
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 financial statements. In reaching this
conclusion, the directors noted the Group’s strong cash performance in the year, the substantial
funding available to the Group as described above and the resilience of the Group to a range of severe
but plausible downside scenarios. Further details are set out in Note 1 on page 154.
Richard Howes
Chief Financial Officer
26 February 2024
86
Bunzl plc
Annual Report 2023
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NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
In accordance with sections
414CA and 414CB of the
Companies Act 2006, including
the amendments made by the
Companies (Strategic Report)
(Climate-related Financial
Disclosure) Regulations 2022, the
information below sets out how
we comply with each reporting
requirement and where further
information can be found.
A description of our business model can be found
on pages 24 to 25.
Where principal risks have been identified
inrelation to any of the matters listed, these
canbe found on pages 68 to 76.
Our non-financial key performance indicators
areset out on page 41.
Find out more in our policy hub on our website,
www.bunzl.com.
Reporting requirement Description Relevant policies and standards Further information
Social matters
Developing
responsible supply
chains
Our Supplier Code of Conduct, Global Supply Chain Solutions team and
partnership with leading NGO, Stop the Traffik, are some of the measures we take
to ensure that products are sourced responsibly and that adequate standards are
maintained throughout our supply chains.
Read more on
pages 58 to 59
Promoting a healthy
corporate culture
Our values underly the way we conduct our business and ensure that all of our
colleagues are working towards the common goal of creating long term
sustainable value for the benefit of all stakeholders.
Read more on
page 100
Business standards
of behaviour
Our Business Code of Conduct and Code of Conduct Policy ensure that all business
is conducted according to rigorous ethical, professional and legal standards.
Read more on
page 218
Employees
Encouraging
employees to raise
matters of concern
Where employees have concerns relating to failures to adhere to standards,
theycan report such concerns on a confidential and anonymous basis using
our‘Speak Up’ Policy.
Read more on
page 218
Investing in our
people and a diverse
workforce
Our Equality and Diversity Policy was reviewed in 2023 and ensures that
employees are treated fairly and equally and that diversity is embraced. We also
offer extensive learning and development opportunities to equip employees with
the skills and experience they need to succeed and grow in their roles.
Read more on
pages 60 to 61
Providing our
employees with a
safe working
environment
The Bunzl Health & Safety Policy ensures that high standards of health & safety
are maintained throughout the business. Incidents are monitored and reported
tothe Board periodically, which enables the Board to take action when necessary.
Read more on
page 217
Human rights,
anti-corruption
and anti-bribery
Prevention of bribery,
corruption and fraud
Our Anti-Bribery and Corruption Policy outlines the behaviour and principles
required of employees to prevent any form of bribery or corruption. Additionally,
we have a Fraud Policy in place, we conduct a rigorous Fraud Risk Assessment
annually and the Board regularly receives and considers whistle blowing updates.
Read more on
page 104
Promoting ethical
supply chains
Our Supplier Code of Conduct defines the principles and standards that we expect
suppliers to understand and adhere to. This is supported by our industry-leading
sourcing and auditing operation in Shanghai, which works in partnership with
suppliers in high risk regions to ensure the highest standards of product quality
and respect for human rights in our supply chain.
Read more on
pages 58 to 59
Approach to human
rights and modern
slavery
Revised by the Board this year, our Modern Slavery Statement sets out the steps
that we take to ensure, as far as possible, that slavery and human trafficking do
notexist in our supply chain or any part of our business.
Read more on
page 210
Environmental
matters
Taking action on
climate change
We are supporting the recommendations made by the Task Force on
Climate-related Financial Disclosures and have joined the UN Race to Zero
campaign by formally committing to the Business Ambition for 1.5°C.
Read more on
pages 48 to 55
Reducing our impact
on the environment
Our Environment Policy promotes the efficient use of resources and energy in our
supply chain and ensures a Group wide commitment to continual improvement
and compliance with environmental legislation and regulations.
Read more on
pages 48 to 55
Providing sustainable
solutions
Our material footprint tools help customers understand the carbon impact of the
products they source, helping us to work with them to find sustainable solutions
that are better suited to a more circular economy.
Read more on
pages 56 to 57
Environmental risks
and opportunities
Our sustainability governance structure enables the Company to identify, assess
and manage climate-related risks and opportunities, and to disclose against the
TCFD recommendations.
Read more on
page 63
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Bunzl plc
Annual Report 2023 87

The Board welcomes
developments in corporate
governance practice, which
aim to enhance trust and
transparency in our
disclosures.”
Introduction from
Peter Ventress,
Chairman of the Board
DIRECTORS’ REPORT CHAIRMAN’S INTRODUCTION
Peter Ventress
Chairman
On behalf of the Board, I am pleased to present
the Corporate governance report for the year
ended 31 December 2023. This report, in
conjunction with the Nomination, Board
Sustainability, Audit and Remuneration
Committee reports, outlines Bunzl’s approach
togovernance: prudent risk management,
transparency, open engagement with
stakeholders and compliance with the principles
and provisions of the 2018 UK Corporate
Governance Code (the ‘Code’).
I am delighted to welcome Jacky Simmonds,
whojoined the Board on 1 March 2023, as a
non-executive director. Through her executive
and non-executive roles, she brings a wealth of
international and listed company experience,
which, coupled with Jacky’s extensive HR
expertise, will enhance and strengthen the
capabilities of the Board further. Following Jacky’s
appointment, the proportion of female directors
on the Board is 44%, exceeding the Financial
Conduct Authority’s new 40% board gender
diversity target. More information on Jacky’s
experience and induction process can be found
on pages 91 and 99, respectively.
As announced on 26 February 2024, Vanda
Murray, Senior Independent Director and Chair
ofthe Remuneration Committee, has informed
the Board of her intention to step down as a
director at the conclusion of the Company’s
Annual General Meeting (‘AGM’) on 24 April 2024.
Her independent advice and valued contribution
to the Board’s deliberations over the years have
been greatly appreciated and she leaves with the
Company’s thanks and best wishes. A robust
recruitment process for a new non-executive
director is now underway and an announcement
will be released in due course, once a suitable
candidate has been identified. Full details of the
recruitment process will also be included in next
year’s Annual Report.
Vanda will be succeeded as Chair of the
Remuneration Committee by Jacky and Pam Kirby
will succeed her as the Board’s new Senior
Independent Director. The timing of the changes
allows for a meaningful handover period with
Vanda as part of a planned succession. Further
information concerning the Board and Committee
changes, and succession planning more generally,
can be found in our Nomination Committee
report on pages 106 to 109.
In line with recognised best practice, Bunzl
undertakes Board reviews on an annual basis
tofurther increase Board effectiveness and to
identify areas for improvement. Bunzl engaged
Lintstock Ltd in 2023 to conduct an external
review of the performance of the Board and its
Committees. Additional evaluations of my
performance as Chairman, as well as the
performance of each individual director, were also
undertaken. A wide variety of performance areas
were assessed, with key strengths and potential
priorities for 2024 identified to drive future
discussions. The results of the evaluation were
positive and identified that the Board
demonstrates an appropriate mix of cohesion
andchallenge, has a transparent relationship
withmanagement, strong clarity of Bunzl’s
operating model and of the Board’s role in driving
the Group’s strategic outcomes. For additional
information on the Board evaluation process
andoutcomes, see page 103.
Sustainability was highlighted as one of the 2023
priority areas for the Board. Direct oversight of
sustainability-related risks and opportunities is
key to the continued strengthening of Bunzl’s
sustainability strategy. In 2022, the Board
established a new Board Sustainability Committee
(‘BSC’), reflecting the importance Bunzl places on
the consideration of Environmental, Social and
Governance (‘ESG’) matters. The BSC comprises
all of the non-executive directors and invitations
to attend the meetings are regularly extended to
the Chief Executive Officer (‘CEO’), Chief Financial
Officer (‘CFO’), Director of Group HR and Head of
Sustainability. More information about the work
undertaken by the BSC during the year, as well as
its priorities for 2024, can be found in the BSC
report on pages 110 to 111.
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Annual Report 2023 8988
Bunzl plc
Annual Report 2023
Directors’
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Acquisition growth is a key pillar of Bunzl’s
compounding growth strategy and remained
anarea of focus for the Board in 2023. During the
year, the Board maintained close oversight of the
acquisition pipeline and received regular
presentations from senior managers, covering
financial, operational and ESG factors, including
cultural fit. The Board is mindful of the need to
consider the interests of the Company’s
stakeholders when making decisions, and a case
study demonstrating how the Board has had
regard to stakeholder interests during the
acquisition process can be found on page 67.
The Board welcomes developments in corporate
governance practice, which aim to enhance trust
and transparency in our disclosures. We are
aware that revisions to the Code were published
by the Financial Reporting Council (‘FRC’) in
January 2024 and the Board will be giving further
consideration to these during the year. We will
report formally against the new Code in the
Company’s future Annual Reports, as the
requirements come into effect in 2025 and 2026.
I am pleased to report that, for the year ended 31
December 2023, the Company has complied in
full with the provisions of the 2018 version of the
Code that is currently in force.
As a Board, we are committed to ensuring that
Bunzl’s robust governance structure enables
sustainable and resilient growth, for the benefit
ofall of our stakeholders. We hope that you find
the following report to be a useful overview of
Bunzl’s approach to governance and look
forwardto welcoming you at the Company’s
forthcoming AGM.
Peter Ventress
Chairman
26 February 2024
On the Board’s mind in 2023
Focusing on management succession
planning and enhancing the Group’s
organisational structure, talent
management, and diversity and
inclusionprocesses
The Board is committed to ensuring that
it is balanced, diverse and representative
of the markets in which it operates. During
the year, Jacky Simmonds was appointed
to the Board and brings with her valuable
knowledge and experience, particularly
inpeople-related matters.
Succession planning for executives remained
high on the agenda and formal Board sessions
were held to focus on the topic of talent and
leadership succession. These sessions involved
the review of succession plans for the senior
leadership team, leadership talent within the
business areas and young talent initiatives, in
the context of fostering diversity. Examples of
the diversity and inclusion initiatives that are in
place include reverse mentoring, annual
leadership conferences and the Bunzl Women
in Leadership engagement programmes, which
are now present in all business areas.
More information on succession planning,
talent management and diversity and
inclusioncan be found in the Nomination
committee report.
More on page 109
Continuing Bunzl’s focus on sustainability
and building this into customer relationships
The Board continued to develop the Company’s
sustainability strategy and oversee its
implementation throughout the year. The
establishment of the Board Sustainability
Committee in 2022 has allowed for more
detailed consideration of sustainability-related
risks and opportunities, with one of the focal
points of Bunzl’s 2023 sustainability objectives
being products and packaging. Approaching this
objective with a focus on responsible sourcing
has enabled the Group to develop deep and
meaningful customer relationships whereby
customers are supported with tailored
solutions and innovative products better suited
to a circular economy.
Further information on Bunzl’s tailored
solutions can be found in the
Sustainabilityreport.
More on page 56
Supporting management in acquisition and
organic growth strategies
In line with the Company’s acquisition growth
strategy, the Board approved the acquisition
of19 businesses in 2023. The Board drives and
monitors the success of acquisitions through:
• Bunzl’s decentralised model, which allows
previous company owners to retain an
entrepreneurial culture and drive further
success;
• providing management with training;
• providing acquired companies with
support, resources and operational
excellence; and
• frequently reviewing the performance of
acquired companies against projections.
Further information regarding Bunzl’s
acquisition strategy can be found in the
Strategic report.
More on page 29
Continued Board oversight of strategic
priorities and the execution of Bunzl’s
strategic plans
During the year, the Board continued to focus
on Bunzl’s strategic pillars of profitable organic
growth, operating model improvements
andacquisition growth. The Board received
frequent updates on business area
performance, acquisition reviews and
supplierperformance, which enhanced its
ability to oversee Bunzl’s strategic priorities
andhave meaningful discussions with regard
tofuture plans.
Further information regarding Bunzl’s strategic
priorities can be found in the Strategic report.
More on page 26
Defining strategic success over the short/
medium term for Bunzl:
Growth See page 22
ESG success See page 213
Technology See page 26
Financial performance See page 150
People and talent See page 34
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Annual Report 2023 8988
Bunzl plc
Annual Report 2023
Directors’
report

1
4
5
6
7
8
9
2 3
BOARD OF DIRECTORS
The right balance of
skills and experience
Our experienced Board is committed to leading by
example to demonstrate Bunzl’s strong corporate values
and culture, and to promoting the long term sustainable
success of the Company for the benefit of all of its
stakeholders.
1. Peter Ventress
Chairman
Appointment: Chairman of the Board since April 2020,
having been appointed Chairman designate in June 2019.
Chair of the Nomination Committee and Board
Sustainability Committee.
Experience: He was formerly Chairman of Galliford
TryHoldings plc and a non-executive director of Premier
Farnell plc, Staples Solutions NV and Softcat plc. He was
Chief Executive Officer of Berendsen plc from 2010 to
2016, prior to which he held several senior executive
roles, including International President of Staples Inc and
Chief Executive Officer of Corporate Express NV, a Dutch
quoted company which was subsequently acquired
byStaples. Peter is currently Chairman of Howden
Joinery Group plc.
Skills and contribution to the Board: Peter has
astrong track record as both an executive and
non-executive director of numerous international
distribution businesses, bringing valuable knowledge
and experience to the Board. His leadership ability,
gained through previous experience as the Chairman of
other similarly complex businesses, cultivates a culture
of constructive debate and challenge on the Board.
Committees:
2. Frank van Zanten
Chief Executive Officer
Appointment: Chief Executive Officer since April 2016,
having been appointed as an executive director in
February 2016.
Experience: He joined Bunzl in 1994, when Bunzl
acquired his family owned business in the Netherlands
and he subsequently assumed responsibility for a
number of businesses in other countries. In 2002, he
became Chief Executive Officer of PontMeyer NV, a listed
company in the Netherlands, before rejoining Bunzl in
2005 as the Managing Director of the Continental
Europe business area. He is a member of the
Supervisory Board of Koninklijke Ahold Delhaize NV.
Skills and contribution to the Board: Frank has
extensive knowledge and experience of our business,
acquired over years of dedicated commitment to the
Company. He has an outstanding track record of
implementing the Company’s purpose-led strategy,
fostering growth by developing and expanding the
Group, both organically and through acquisitions.
Committees: None
For Committee membership key, see next page.
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9. Jacky Simmonds
Non-executive director
Appointment: Non-executive director since
March2023.
Experience: She was formerly Chief People Officer
atVEON Ltd (a Nasdaq listed digital services company),
prior to which she held a number of senior positions,
including Group Director of People at easyJet plc and
Chief Human Resources Officer of TUI Group, where
shesat on the Supervisory Board of TUI Deutschland,
GmbH. She was also a non-executive director of
Ferguson plc from 2014 until 2022 and is presently
ChiefPeople Officer of Experian plc.
Skills and contribution to the Board: The Board
benefits from Jacky’s extensive knowledge and
experience in human capital management, including
employee engagement, transformational change, board
and leadership succession planning, employee relations
and talent management. Her international and listed
company experience, coupled with her extensive HR
acumen, enhances the capabilities of the Board and
itsCommittees.
Committees:
Committee membership
Member of the Audit Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Member of the Board Sustainability Committee
Independent director
Denotes Chairman
3. Richard Howes
Chief Financial Officer
Appointment: Chief Financial Officer and a member
ofthe Board since January 2020, having been appointed
Chief Financial Officer designate in September 2019.
Experience: He qualified as a Chartered Accountant
with Ernst & Young before moving to the investment
bank Dresdner Kleinwort Benson. During his career he
has held a number of senior positions at Geest plc and
Bakkavor Group plc, including that of Chief Financial
Officer of Bakkavor Group. He was Chief Financial Officer
of Coats Group plc between 2012 and 2016 and prior to
joining Bunzl was Chief Financial Officer of Inchcape plc.
He is currently a non-executive director of Smiths Group
plc and chairs their Audit & Risk Committee.
Skills and contribution to the Board: Richard brings a
wealth of experience to the Board, gained across several
sectors, having led finance functions at a number of
international public companies and having worked for
multi-site businesses with substantial global footprints.
He brings broad financial expertise and commercial skills
which are invaluable to his role on the Board and in
leading Bunzl’s Finance, Tax, and Treasury functions.
Committees: None
4. Vanda Murray OBE
Senior Independent Director
Appointment: Non-executive director since February
2015, Senior Independent Director and Chair of the
Remuneration Committee.
Experience: Formerly Chief Executive Officer of Blick plc
from 2001 to 2004, she subsequently became UK
Managing Director of Ultraframe plc from 2004 to 2006
and was appointed OBE in 2002 for Services to Industry
and Export. She is currently Chair of Marshalls plc and a
non-executive director of Howden Joinery Group plc.
Skills and contribution to the Board: Vanda brings
over 25 years of senior management experience to the
Board, across a range of industrial, manufacturing and
support services sectors in Europe, the US and Asia. Her
experience as a Chief Executive Officer and Chair makes
her well suited to the role of Senior Independent
Director and Chair of the Remuneration Committee.
Committees:
5. Lloyd Pitchford
Non-executive director
Appointment: Non-executive director since March2017
and Chair of the Audit Committee.
Experience: Having previously held a number of senior
finance positions with BG Group plc, latterly as Group
Financial Controller, he subsequently joined Intertek
Group plc, where he was Chief Financial Officer from
2010 to 2014. He has been Chief Financial Officer of
Experian plc since 2014.
Skills and contribution to the Board: Lloyd has
extensive financial experience gained from his roles in
listed companies, including his current role as Chief
Financial Officer of Experian plc. His significant financial
expertise has contributed greatly to the Board’s and the
Committees’ discussions and makes him well suited for
the Audit Committee Chair role.
Committees:
6. Stephan Nanninga
Non-executive director
Appointment: Non-executive director since May 2017.
Experience: After holding a number of positions with
Sonepar and Royal Dutch Shell, he subsequently became
Managing Director, Distribution Europe of CRH plc in
1999. He then joined the Board of SHV Holdings NV in
2007, where he was initially responsible for the Makro
and Dyas businesses, before becoming Chief Executive
in 2014, a position he held until 2016. He is a member
ofthe Supervisory Boards of CM.com and Cabka N.V.
and a non-executive director of IMCD N.V.
Skills and contribution to the Board: The Board
benefits from Stephan’s extensive international
experience, which he has gained across a range of
businesses operating in the distribution and service
sectors. He has solid executive experience which
informs his contributions to the Remuneration,
Auditand Nomination Committees.
Committees:
7. Vin Murria OBE
Non-executive director
Appointment: Non-executive director since June 2020.
Experience: Formerly Chief Executive Officer of
Computer Software Group plc from 2002 until 2007, she
subsequently founded and was Chief Executive Officer of
Advanced Computer Software Group plc from 2008 until
2015. She was appointed OBE in 2018 for services to the
digital economy. She is Chair of AdvancedAdvT Limited
and a non-executive director of Softcat plc.
Skills and contribution to the Board: Vin has over 25
years of experience working in the digital and technology
sectors, which is valuable given the Company is
continually expanding and developing its digital and
technological capabilities. Vin’s background of
developing highly successful growth strategies is
especially pertinent to the Board.
Committees:
8. Pam Kirby
Non-executive director
Appointment: Non-executive director since August
2022.
Experience: Formerly Chief Executive Officer of
Quintiles Transnational Corporation, having previously
held senior executive positions at AstraZeneca plc and F.
Hoffmann-La Roche Ltd. She was also previously a
non-executive director of DCC plc and Hikma
Pharmaceuticals plc, and Senior Independent Director
ofVictrex plc. She is presently a non-executive director
of Reckitt Benckiser Group plc and a member of the
Supervisory Board of AkzoNobel NV.
Skills and contribution to the Board: Pam has
significant knowledge and expertise in global
businesses, having worked in several international roles
for over 30 years. Through her executive and non-
executive roles, she brings a wealth of international
distribution, strategic and UK listed company experience
to the Board.
Committees:
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information
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CORPORATE GOVERNANCE REPORT
Board
Meetings
The table below sets out directors’ attendance at the scheduled Board and Committee meetings held during 2023.
Additional meetings of the Board were also held as and when circumstances required it to meet at short notice.
Board
(7)
Audit
(4)
Nomination
(4)
Remuneration
(3)
Board
Sustainability
(3)
Chairman
Peter Ventress 7 4 3
Executive directors
Frank van Zanten 7
Richard Howes 7
Independent non-executive directors
Vanda Murray OBE 7 4 4 3 3
Lloyd Pitchford 7 4 4 3 3
Stephan Nanninga 7 4 4 3 3
Vin Murria OBE 7 4 4 3 3
Pam Kirby 7 4 4 3 3
Jacky Simmonds* 5 3 2 2 3
* Jacky Simmonds was appointed as a director on 1 March 2023 and attended all Board and Committee meetings held between that date and the end of the
year.
Skills held by each director
Frank
van
Zanten
Richard
Howes
Peter
Ventress
Vanda
Murray
OBE
Lloyd
Pitchford
Stephan
Nanninga
Vin
Murria
OBE Pam Kirby
Jacky
Simmonds
Core industry experience
(logistics and distribution)
Digital/cyber security
International
Sustainability
M&A
Strategy
Remuneration/people
Finance
Legal: The Board has access to the services of the General Counsel and Company Secretary, who is a qualified solicitor.
Governance
overview
Executive and
non-executive directors
(year ended 31 December 2023)
Executive 2
Non-executive (incl. Chairman) 7
Board gender
(year ended 31 December 2023)
Male 5
Female 4
Independent directors
(excl. Chairman)
(year ended 31 December 2023)
Independent 6
Other 2
Ethnic diversity
(year ended 31 December 2023)
Director from minority
ethnic group 1
Other 8
Tenure (non-executive directors, incl. Chairman)
(year ended 31 December 2023)
0 – 3 years 2
3 – 6 years 2
6+ years 3
Our Board by numbers
More on page 109
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Matters reserved for the Board
The topics outlined below include some of the
matters which are required to be brought to the
Board for consideration:
Shareholders
• Matters requiring shareholder approval
• Circulars and significant shareholder
communications
Capital allocation and structure
• Significant capital expenditure/disposals
• Significant business acquisitions/disposals
• Material changes to the Group’s capital
structure
• Major property leases
• Material increases in borrowing and
loanfacilities
Policies and statements
• Material Group policies, statements and major
changes thereto, for example:
− Tax Strategy;
− Treasury Policy;
− Modern Slavery Statement;
− Diversity, Equity and Inclusion Policy;
andRisk Appetite.
People and leadership
• Appointment/removal of directors and
Company Secretary
• Non-executive directors’ remuneration
• Executive directors’ remuneration
• Board Committee constitution and terms
ofreference
Strategy and management
• The Group’s strategic aims and objectives
• Annual budget and strategic plan
Financial reporting, risk and controls
• Financial results and announcements
relatingthereto
• Final and interim dividends
• Auditor appointment/removal
• Risk management and internal controls
HR function
Employee engagement,
health & safety,
corporate responsibility,
human rights, diversity,
equity and inclusion and
remuneration
Investor Relations and
Communications team
Investor relations,
stakeholder engagement
and external/internal
communications
Legal function and
Company Secretariat
Legal, regulatory and
governance
IT and Information
Security function
Information/cyber
security, internal controls
and digital strategy
Corporate
Development team
M&A, strategy and
duediligence
Internal and External
Audit functions and
Internal Controls team
Audit, assurance, risk
management and
controls
External advisers
Legal, compliance,
remuneration,
shareholder
engagement, investor
relations, internal
controls and IT security
Local management
Regional and commercial
sectors, market
knowledge, supply chains
and stakeholder
engagement
Tax, Treasury and
Finance functions
Tax, treasury and finance
Sustainability
department
Environmental, social
and governance,
regulatory knowledge,
supply chains, product
sourcing and corporate
responsibility
The Board
Knowledge sharing, upskilling and continual development
The Board understands the importance of knowledge sharing, upskilling and continual
development; therefore, senior management, members of different corporate functions and
external parties are frequently invited to attend meetings to present to the Board on their
respective areas of expertise, aiding better decision making.
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statements
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information
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Annual Report 2023
Directors’
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CORPORATE GOVERNANCE REPORT continued
Key activities and decisions of the Board in 2023
Q1
January
• Strategic plan proposal
• Presentation on acquisition pipeline
• Results of the 2022 employee pulse survey
• Presentation on feedback from employee
listening groups
• Group risk assessment
February
• Results for the year ended
31 December 2022
• Risk management, internal controls and
disclosure of information to auditors
• Re-appointment of auditors
• Presentation on acquisition pipeline
• Final dividend for the year ended
31 December 2022
• Fraud risk assessment
• Update on accident statistics
April
• Q1 trading update
• Revision of the Modern Slavery Statement
• Update on contract with major customer
June
• Pre-close trading statement
• Presentation on treasury policies and
funding proposals
• Review of acquisitions made in 2021
• Update on corporate responsibility and
supplier performance
• Update on whistleblowing reports
• Update on accident statistics
• Update on the FRC’s Code consultation
• Site visits in Toronto
August
• Results for the half year ended
30 June 2023
• Interim dividend for the year ended
31December 2023
• Update on information security
• Update on acquisitions
• Update on accident statistics
• Consideration of the Company’s draft
response to the FRC’s Code consultation
October
• Q3 trading update
• Update on the Euro Medium Term
Note programme
• Presentations on acquisition pipeline
• Approval of the Equality and
DiversityPolicy
• Site visits in Barcelona
December
• Pre-close trading statement
• Board performance evaluation
• 2024 budget
• Presentation on acquisition pipeline
• Anti-bribery and corruption training
• Update on accident statistics
• Group tax strategy statement and update
• Supplier audit statistics
• Board and Committee Diversity Policy
• Update on whistleblowing reports
• Review of Committee terms of reference
and governance documents
Q2 Q3 Q4
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statements
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information
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Bunzl plc
Annual Report 2023
Directors’
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UK Corporate Governance
Code (the ‘Code’) compliance
statement
For the year ended 31 December 2023, the
Company has complied in full with the
requirements of the Code.
Pursuant to DTR 7.2.6, information required to be
disclosed on the Company’s securities structure
can be found on page 180. Information on our
Board and Committee Diversity Policy, required to
be disclosed pursuant to DTR 7.2.8A, can be found
on pages 109 to 110. The full Board and
Committee Diversity Policy can be found on the
Company’s website, www.bunzl.com .
Board leadership and company purpose Relevant section of the Annual Report Page(s)
Effective Board Biographies of the Board of directors 90
Purpose, values and strategy Our purpose, values and strategy 26 to 31
Culture How the Board monitors culture 100
Prudent and effective controls Risk management and internal controls 116 to 117
Engagement with shareholders Section 172 statement 64 to 67
S.172 statement and engagement with other stakeholders Section 172 statement 64 to 67
Engagement with employees Employee engagement statement 101
Workforce policies and practices Other statutory information 148
Division of responsibilities Relevant section of the Annual Report Page(s)
Division of responsibilities Board roles and responsibilities 98
Board independence Nomination Committee report 107 to 109
Board attendance and time commitments Board attendance table 92
Composition, succession and evaluation Relevant section of the Annual Report Page(s)
Appointment procedure Nomination Committee report 108
Succession plans Nomination Committee report 108
Composition of the Board and its Committees Biographies of the Board of directors 90 to 91
Tenure of directors Board tenure chart 92
Evaluation Board evaluation and priorities identified 103
Audit, risk and internal controls Relevant section of the Annual Report Page(s)
Audit Committee role Audit Committee report 114
External audit Audit Committee report 119 to 121
Fair, balanced, understandable report Fair, balanced and understandable statement 195
Internal controls framework Audit Committee report 117
Principal and emerging risks Principal risks and uncertainties 68 to 76
Remuneration Relevant section of the Annual Report Page(s)
Remuneration policy and practices Remuneration Committee report 122 to 146
Development of executive remuneration policy Remuneration Committee report 122 to 146
Independent judgement and discretion Remuneration Committee report 122 to 146
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statements
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information
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Bunzl plc
Annual Report 2023
Directors’
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CORPORATE GOVERNANCE REPORT continued
Governance structure
The Board has ultimate responsibility for the
overall leadership of the Group. To ensure the
directors maintain overall control over strategic,
financial, operational and compliance issues, the
Board meets regularly throughout the year and
has formally adopted a schedule of matters which
are required to be brought to it for consideration.
Further details of the matters reserved for the
Board can be found on page 93.
The Board has established four Committees to
which it delegates certain matters, all of which
comply with the provisions of the Code and play
an important governance role through the
detailed work they carry out to fulfil the
responsibilities delegated to them. The Board
recognises the importance of evolving the
governance structures of the Company in line
with the development of the Company’s strategy,
and the Board Sustainability Committee was
formed with a mandate to provide strategic
advice to the Board on the principal objectives,
targets and priorities of Bunzl’s sustainability
strategy. All Committees meet at least three times
a year, with the exception of the Audit Committee
which meets at least four times a year, and
briefing papers are prepared and circulated to
Committee members in advance of each meeting.
The terms of reference for each Committee can
be found on the Company’s website,
www.bunzl.com .
Board
Chief Executive
Officer
Executive
Committee
Nomination
Committee
Audit
Committee
Remuneration
Committee
Board Sustainability
Committee
Strategic
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report
Financial
statements
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information
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Bunzl plc
Annual Report 2023
Directors’
report

Board composition
As at 31 December 2023, the Board was made up
of nine members comprising a Chairman, a CEO,
aCFO and six non-executive directors, including
aSenior Independent Director.
Brief biographical details of the directors in office
at the date of this report are given on pages 90 to
91 and further information on the Nomination
Committee’s approach to succession planning
canbe found in its report on page 108.
None of the Company’s non-executive directors
had any previous connection with the Company
or its executive directors on appointment to the
Board, with the exception of Jacky Simmonds, who
is presently Chief People Officer at Experian plc.
Lloyd Pitchford, another non-executive director at
Bunzl, is the CFO of Experian plc. Notwithstanding
this connection, all of Bunzl’s non-executive
directors, including Jacky, are considered by both
the Board and the criteria set out in the Code to
be independent. Further details concerning the
determination of director independence can be
found in the Nomination Committee report on
pages 107 to 108.
Each of the non-executive directors is considered
to have a breadth of strategic, management and
financial experience gained in each of their own
fields in a range of multinational businesses,
further details of which can be found in the
director skills matrix on page 92.
The Board is satisfied that each non-executive
director dedicates appropriate time to their role,
continues to contribute effectively to Board
decision making and executes their
responsibilities to challenge, monitor, advise and
guide the Company to a high standard for the
benefit of Bunzl’s stakeholders as a whole.
Further details relating to the time commitments
of the directors can be found on page 99.
In accordance with the terms of the Code and
Bunzl’s Articles of Association, with the exception
of Vanda Murray, each of the directors in office at
the date of this Annual Report will be subject to
re-election at the 2024 AGM and the reasons for
each director’s re-election will be set out in the
forthcoming Notice of Meeting.
Board
Nomination
Committee
Chair
Peter Ventress
Members
Vanda Murray
Lloyd Pitchford
Stephan Nanninga
Vin Murria
Pam Kirby
Jacky Simmonds
Key responsibilities
Reviews the structure, size
and composition of the Board
with regard to ensuring a
balance of skills, knowledge
and experience and diversity.
More on pages
106 to 109
Audit
Committee
Chair
Lloyd Pitchford
Members
Vanda Murray
Stephan Nanninga
Vin Murria
Pam Kirby
Jacky Simmonds
Key responsibilities
Reviews and monitors the
integrity of the Company’s
financial and narrative
reporting, risk processes,
internal controls and the
effectiveness of the internal
audit function and external
auditors.
More on pages
112 to 121
Remuneration
Committee
Chair
Vanda Murray
Members
Lloyd Pitchford
Stephan Nanninga
Vin Murria
Pam Kirby
Jacky Simmonds
Key responsibilities
Determines the policy for
executive director
remuneration and sets all
elements of the remuneration
and benefits of the Chairman,
executive directors and senior
management.
More on pages
122 to 146
Board
Sustainability
Committee
Chair
Peter Ventress
Members
Vanda Murray
Lloyd Pitchford
Stephan Nanninga
Vin Murria
Pam Kirby
Jacky Simmonds
Key responsibilities
Provides an oversight function
to the Group Sustainability
Committee and strategic
advice to the Board on the
principal objectives, targets
and priorities of Bunzl’s
sustainability strategy.
More on pages
110 to 111
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report
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statements
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information
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Annual Report 2023
Directors’
report

CORPORATE GOVERNANCE REPORT continued
Board roles and responsibilities
The following table summarises the role and responsibilities of the different members of the Board:
Role Responsibilities
Chairman The primary job of the Chairman is to be responsible for the leadership of the Board and to
ensure its effectiveness in all aspects of its role. The Chairman:
• takes overall responsibility for the composition and capability of the Board and its
Committees;
• organises the annual evaluation of the Board, its Committees and each individual director;
• consults regularly with the Chief Executive Officer and is available on a flexible basis to
provide advice, counsel and support to the Chief Executive Officer; and
• ensures corporate governance is conducted in accordance with current best practice, as
appropriate to the Group.
The Chairman is also viewed by investors as the ultimate steward of the Group and the
guardian of the interests of all the shareholders.
There is a clear division of
responsibilities between
the Chairman and the
Chief Executive Officer,
which is set out in writing
and has been agreed by
the Board.
Chief Executive
Officer
The Chief Executive Officer is responsible for the leadership and the operational and
performance management of the Company within the strategy agreed by the Board. The
Chief Executive Officer:
• manages the CFO and the Group’s management and day-to-day activities;
• prepares and presents the strategy for growth in shareholder value to the Board;
• sets the operating plans and budgets required to deliver the agreed strategy;
• ensures that the Group has appropriate risk management and control mechanisms in
place; and
• communicates with the Company’s shareholders on a day-to-day basis as necessary.
Chief Financial
Officer
The Chief Financial Officer supports the Chief Executive Officer and is responsible for managing the Group’s funding strategy,
financial reporting, non-financial reporting, risk management and internal controls, investor relations programme and the
leadership of the Finance, Tax and Treasury functions. The Chief Financial Officer communicates with the Company’s analysts
on a day-to-day basis as necessary.
Senior
Independent
Director
The Senior Independent Director is available to shareholders if they have concerns, which contact through the normal
channels of Chairman, Chief Executive Officer or Chief Financial Officer has failed to resolve or for which such contact is
inappropriate. The Senior Independent Director is also available to the other directors should they have any concerns,
whichare not appropriate to raise with the Chairman or that have not been satisfactorily resolved by the Chairman.
Independent
non-executive
directors
The non-executive directors play an important role in corporate governance and accountability, through both their
attendance at Board meetings and their membership of the various Board Committees. The non-executive directors bring
abroad range of business and financial expertise and experience to the Board, which complements and supplements the
experience of the executive directors. This enables them to offer strategic guidance, evaluate information provided and
constructively challenge management’s viewpoints, assumptions and performance.
Board activity
The Board meets formally at least seven times
ayear, with two Board meetings held at or near
Group locations around the world. During 2023,
the Board held meetings in Spain and in Canada,
which gave the directors the opportunity to meet
with local employees and assess the culture of
theCompany.
At each Board meeting, Bunzl’s operational and
financial performance is discussed and
presentations are made by the CEO and the CFO.
The Business Area Heads attend certain meetings
by invitation to present on key topics within their
remit. The importance of bringing management
into meetings to present on their respective area
of expertise, share knowledge and provide
updates on the performance of the business is
well recognised by the Board. The Director of
Corporate Development frequently presents to
the Board on potential acquisitions and the Board
receives regular updates from management on
risk, health & safety, digital strategy, information
security, environment, sustainability, governance
and people matters.
Board agendas are set by the Chairman in
consultation with the CEO and with the assistance
of the Company Secretary, who maintains a rolling
programme of items for discussion by the Board.
This ensures that all matters reserved for the
Board and other key issues are considered at the
appropriate time.
Each Board meeting is structured to accommodate
sufficient challenge and contribution by all
participants. The Board is supplied with full and
timely information to enable informed decision
making. All directors have access to the advice and
services of the Company Secretary who ensures
that Board procedures are complied with, and the
Board is fully briefed on relevant legislative,
regulatory and corporate governance
developments. Directors may also take
independent professional advice at the Company’s
expense where they judge this to be necessary in
the furtherance of their duties to discharge their
responsibilities as directors.
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Annual Report 2023 9998
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Annual Report 2023
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Conflicts of interest
The directors are required to avoid situations in
which they have, or could have, a direct or indirect
interest that conflicts, or possibly may conflict,
with the Company’s interests. In accordance with
the Companies Act 2006, the Company’s Articles
of Association allow the Board to authorise
potential conflicts of interest that may arise and
toimpose such limits or conditions as it thinks fit.
Directors are required to give notice of any
potential situational and/or transactional
conflicts, which are then considered by the
Boardand, if deemed appropriate, authorised
accordingly. A director is not however permitted
to participate in such considerations or to vote
inrelation to their own conflicts.
The Board has considered and authorised
anumber of potential situational conflicts,
allofwhich relate to the holding of external
directorships and have been entered on the
Company’s conflicts register. No actual
conflictshave been identified during the year
andthe Board considers that these
proceduresoperate effectively.
External appointments and time
commitment of directors
The Board takes the time commitment of
directors seriously and the time expected of
directors is set out in their letters of appointment.
Each director must notify the Chairman prior to
accepting a new appointment, and the Chairman
must notify the Board. During the year, the Board
considered the external appointment of Vanda
Murray as a non-executive director of Howden
Joinery Group plc with effect from 1 February
2024. Additional information on how the Board
assessed this external appointment is available
on pages 107 to 108 of the Nomination
Committee report.
The Board recognises the benefits in terms of
director knowledge and experience that external
appointments can bring to Board deliberations.
In2023, when considering Vanda’s new
appointment, the Board considered whether it
would impact the time required for her to prepare
for and attend meetings of the Company, engage
with stakeholders, undertake any training or
personal development and execute her duties to
the Company effectively. In addition, the Board
considered her current portfolio, whether there
were any conflicts or potential conflicts, the time
commitment required with the new appointment
and whether the appointment would cause the
number of directorships she held to exceed those
set out in the Code or institutional investor and
proxy adviser guidance.
The Board is satisfied that each director devotes
sufficient time to their role at Bunzl and continues
to discharge their duties effectively.
Induction
The Company Secretary assists the Chairman
indesigning and delivering a tailored induction
programme for each new member of the Board.
This takes into account each director’s individual
needs, aims to outline their roles, responsibilities
and duties as a director of the Company and
facilitate their understanding of the Group’s
business, people, processes, purpose, values
andculture.
A typical induction programme normally includes:
• a detailed information pack that includes
details of directors’ duties and responsibilities,
procedures for dealing in Bunzl plc’s shares and
other governance-related issues;
• one-to-one meetings with the other members
of the Board and the Company Secretary;
• meetings with Committee Chairs, as
appropriate;
• meetings with senior management;
• visits to some of the Group’s locations;
• information on the main areas of the Group’s
business activity and risks; and
• information on the Company’s approach to
sustainability and stakeholder engagement.
June 2023 Canada tour
• Presentation on Bunzl’s operations in Canada
• Site visit to Bunzl Canada
• Meeting with young talent group
• Bunzl Canada facility tour
October 2023 Barcelona tour
• Update on business performance in
Continental Europe
• Presentation on growth in Southern
Europe,the Middle East, and Central
andEastern Europe
• Site visit to Bunzl Distribution Spain
• Presentation on Spanish businesses
• Presentation on Bunzl’s online business
inContinental Europe
INDUCTION:
Jacky Simmonds
Meeting with members of senior
management and employees in Bunzl’s
business areas has provided me with an
understanding of the culture within the
Company and an awareness of the views
and priorities of employees throughout
the Group. This knowledge allows me to
consider the employee perspective in
Board deliberations and is something
that I look forward to developing further
in 2024 and beyond.”
Training and development
The Board recognises the importance of
continually developing existing directors and
believes good decision making is enabled by
adeep understanding of the Group’s operations
and people. During the course of the year,
directors receive training and presentations to
keep their knowledge current and enhance their
experience. They are updated continually on the
Group’s businesses, their markets and changes
tothe competitive and regulatory environments
in which they operate. In addition, the Board is
kept informed of relevant legal, regulatory and
financial developments or changes by the
Company Secretary and the CFO. The Company’s
legal advisers and auditors give presentations and
training to the Board on specific topics of interest.
Training and development needs of the Board are
kept under review and directors attend external
courses where it is considered appropriate for
them to do so.
2023 training and development
activities
• External adviser training on anti-bribery and
corruption, including:
− an overview of the offences under the
UKBribery Act 2010, the adequate
procedures defence, the key risk areas
forthe Company; and
− an update on the Economic Crime and
Transparency Act 2023 and the
forthcomingreforms.
• Internal sustainability updates, including on:
− sustainability objectives for 2023 and net
zero transition plan and targets;
− KPIs and focus areas for business areas;
− supplier engagement programme; and
− UK sustainability reporting standards and
preparations for the proposed EU mandatory
sustainability reporting, including our
proposed double materiality assessment.
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CORPORATE GOVERNANCE REPORT continued
Purpose, values and how we monitor culture
Bunzl’s purpose is to deliver essential business solutions around the world and create long term sustainable value for the benefit of all stakeholders. It is the responsibility of the Board to set the purpose, values
and strategy of the Company and ensure that these align with the desired culture. In order to achieve the Company’s purpose, the Board recognises the importance of a healthy corporate culture where employees
can reach their potential and everyone is working towards a common goal. Bunzl has a unique and valued entrepreneurial culture which is critical to delivering the Company’s strategy and is enabled by its
decentralised structure and a focus on developing local talent. The Board ensures that the culture of Bunzl is well communicated and embedded throughout the organisation, consistently measured and sustained.
Our championed values are at the centre of our corporate culture and underly the way we conduct our business. Bunzl’s strong culture is a key source of competitive advantage and helps the Group to attract
and retain the best talent.
The Company’s values are at the centre of our culture and are reflected in the way we work and interact with stakeholders:
Reliability in action
Bunzl’s network, digital capabilities, and
sustainable products, enable us to become a
reliable partner to our customers, driving long
term customer relationships.
Read about our successful retender outcome
with ISS on page 27.
Humility in action
Bunzl’s corporate charity programme
supports environmental projects related to
recycling, litter prevention, clean-up and waste
management infrastructure.
Read about our charitable initiatives on
page220.
Transparency in action
Bunzl’s honest culture engenders confidence
in the Company and Bunzl aims to be as
transparent as possible in its reporting.
Read about our assurance framework on
page105.
Responsiveness in action
Bunzl’s own and exclusive brand offering,
expertise, and close customer relationships
allow the Company to respond to specific
customer needs.
Read about an example of our own and
exclusive brand offering on pages 20 to 21.
Our values guide our culture and impact Company decision making:
Nomination Committee
Actively manages the composition
of the Board and the pipeline of
diverse talent, embracing a
representative Board and inclusive
culture for all employees to thrive.
See pages 106 to 109.
Audit Committee
Ensures the integrity and
transparency of the Group’s
financial and narrative reporting
and promotes the transparent
risk-focused culture within which
the Company operates.
See pages 112 to 121.
Board Sustainability Committee
Provides recommendations to the
Board on the Group’s
sustainability strategy, endorsing
a culture of continuous
improvement.
See pages 110 to 111.
Remuneration Committee
Monitors executive remuneration,
the gender pay gap and CEO pay
ratio, to ensure that remuneration
aligns with Bunzl’s values and
culture, and encourages the
Company’s desired behaviours.
See pages 122 to 146.
Human Resources team
Implements programmes to
promote our values and monitors
employee sentiment via surveys.
Introduces compulsory training to
upskill employees and reviews
policies to protect Bunzl’s culture.
See pages 34 to 39.
Our culture is...
...evidenced by what our people most value
about life at Bunzl:
• Our working relationships
• Work-life balance for employees
• Respect and ethics
• The atmosphere on the ground
• Teamwork and support
• The skills of employees
• Development opportunities
• Our customer-focused attitude
• Empowerment of employees
...embedded through:
• Annual conferences and learning sessions
• Quarterly distribution of the Group
Employee Magazine, which celebrates
success stories, shares case studies and
highlights mentoring initiatives
• Objective setting and development plans
• Group policies to guide employee behaviour
• Employee equity participation
• An acquisition strategy that retains former
business owners, fostering an
entrepreneurial mindset
...measured through our culture metrics:
• Employee voluntary turnover rate: 15.3%
• Great Place to Work Overall Perception
score: 70%
• Non-executive director engagement
meetings held: 5
• Number of material breaches of Code of
Conduct: 4
• Accident/incident severity rate: 4%
improvement versus 2022
...monitored through:
• Diversity, equity and inclusion activities
• Health & safety data
• Employee forums
• Dialogue with executives and senior
management
• Employee survey results
• Regular Board reporting on people matters
• Non-executive director listening groups
• Site visits
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CEO listening session
In 2023, the CEO, alongside the Director of Group HR, held a third annual listening session with female employees, and employees from ethnically
diverse backgrounds, across the Group. Bunzl’s CEO listening sessions enable direct engagement between the CEO and employees, which is used
toreview progress against the Company’s diversity objectives, inform future Board decisions and gain further insight into the results of the employee
pulse survey.
Key themes were identified from the employee feedback provided in the 2023 CEO listening session, which have been compiled and used to inform
decision making around Bunzl’s diversity and inclusion initiatives in 2024.
Theme Key point(s) raised
Role models • The creation of strong role models is critical, as employees can find it motivating to see people from
similar backgrounds in senior positions throughout the organisation
• Success stories covering role models should be more widely publicised through internal
communications channels
Targets • Employees were pleased to see progress towards diversity targets in 2023 and appreciated the
ambitious targets set for 2024
• Targets were considered crucial in demonstrating clear measures of success, ensuring that progress
is not left to chance
Communications • Different cultures, including faiths and nationalities, should continue to be celebrated through
effective communications
Bunzl’s CEO listening sessions have been a valuable engagement mechanism, facilitating the provision of feedback from employees of diverse
backgrounds direct to Board level. Further information on our diversity and inclusion initiatives can be found on page 36.
Non-executive director listening sessions
To gain insight into the 2023 employee experience, Lloyd Pitchford and Vanda Murray held several non-executive director listening sessions, speaking
directly with employees from the Continental Europe, North America and Asia Pacific business areas. These sessions are held to facilitate direct
engagement between the non-executive directors and Bunzl employees across all levels of the Group, on topics such as the effectiveness of
communications, the quality of IT resources, and the alignment of executive remuneration with wider company pay policy. The matters raised by
employees are fed back to the Board and the Board uses this feedback to inform its decisions.
Theme Key point(s) raised
Communications • Employees considered that internal communications had improved, resulting in a greater feeling of
connectedness
• Increased communication around Group strategy was identified as being something that employees
would welcome
Technology • Employees were supportive of improvements to IT resources and systems in 2023 and encouraged
continued investment
Surveys • The Great Place to Work survey had been expanded to cover all regions in 2023 and this was
positively received as an additional way for employees to have their voices heard across the Group
Reward • The basis of reward for frontline staff, when compared with that of management, was considered to
be consistent
Employee engagement statement
In accordance with Provision 5 of the Code, the
Board has decided to use alternative
arrangements to engage with employees. Bunzl
isa global, decentralised business with operations
in multiple locations and our employees fulfil a
broad range of roles with many different
perspectives. It is therefore essential that our
engagement methods suit the nature of our
business, the culture of the Company and our
workforce. This holistic approach to engagement
is the most effective method and allows the
Boardto understand, monitor and assess
employee sentiment.
Some of the mechanisms used to engage with
employees during the year are described in the
following section. Employees are also encouraged
to get involved with the Company’s performance
through a variety of different means, including the
operation of all employee share plans, bonus and
commission schemes and other incentive
arrangements. Our employee engagement
mechanisms are discussed at Board meetings
and kept under review to ensure that they remain
appropriate and effective.
Site visits
In 2023, visits to operational sites gave the Board
a chance to hear views from employees at all
levels, providing a platform for meaningful
engagement while enhancing their understanding
of Bunzl’s operations and culture. Additional
information on the Board’s site visits can be found
on page 99.
Bunzl’s CEO, Frank van Zanten, carried out
additional site visits during the year including
afive day trip to Latin America, where he met
employees within the teams of 17 Bunzl
businesses. This has bolstered his ability as an
executive director to bring the employee voice
into Board deliberations.
DIVERSITY: READ MORE ABOUT OUR DIVERSITY
TARGETS ON PAGE 109
MONITORING EMPLOYEE SENTIMENT: SEE THE RESULTS
OF THE GREAT PLACE TO WORK SURVEY ON PAGE 35
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CORPORATE GOVERNANCE REPORT continued
Engagement with customers,
suppliers and other stakeholders
Understanding the views of the Company’s
stakeholders is a key priority for the Board and
Bunzl as a whole. It helps to focus the Company’s
resources, engagement and reporting activities by
addressing those issues that matter most to the
Group’s businesses and to the Company’s wider
stakeholders. Fostering strong business
relationships is an intrinsic part of the Company’s
long established and successful compounding
strategy and a key consideration in all decision
making. More information about Bunzl’s
engagement with its suppliers, customers and
wider stakeholder groups can be found on
pages64 to 67 and in the Sustainability report
onpages 54 to 62.
Bunzl Insight series
In 2022, Bunzl began hosting Insight events,
designed to enhance communication and
engagement with key stakeholders by providing
more detailed and comprehensive information
regarding the Group’s international business
operations. Given the intricate and expansive
nature of Bunzl’s decentralised operations,
providing additional detail beyond that outlined in
Bunzl’s Annual Report, Capital Markets Days and
other engagement activities allows stakeholders
to gain a better insight into the Group’s culture
and operational activities.
With a focus on Bunzl’s Continental Europe
businesses in 2022, and North America in 2023,
the Insight events were hosted by local senior
leadership and focused on a wide variety of
topics, including value-added solutions for
customers, an overview of Bunzl’s expanding
acquisition model and highlights of our
established platform for future growth. The
Group aims to enhance its engagement with
stakeholders by actively fostering interaction
through discussion and feedback.
The Group’s Insight events have been well
received by stakeholders, with additional Insight
events having been requested covering specific
areas of the business.
Topics discussed in 2023 meetings Outcome of meetings
• Outcomes of the 2023 Board evaluation and
the Board’s mechanism for tracking
progress against those outcomes
• Succession planning, skills on the Board and
priorities for the recruitment of new
directors
• Talent management priorities and the
Board’s involvement in relation to talent
management below Board level
• The strategic oversight role of the Board
with regard to capital allocation and the
acquisition pipeline
• Diversity of directors on the Board
The outcomes of all of the meetings were
positive, and the Board will continue its
engagement activity in the coming year.
Shareholder meetings
The Board is committed to maintaining strong
communications with our shareholders.
Committee Chairs seek engagement with major
shareholders on pertinent matters within their
responsibility and, in 2023, the Chair of the
Remuneration Committee sought engagement
with major shareholders, regarding Bunzl’s
proposed 2024 director’s remuneration
policy,details of which can be found on
pages122to 146.
Additionally, major shareholders are routinely
invited to meet with the Chairman, Chair of the
Audit Committee and Company Secretary to
discuss governance at Bunzl. Some of the topics
that were discussed during our 2023 shareholder
meetings are outlined below. The outcomes of all
of the meetings were positive, with no specific
matters of concern being raised. The Board looks
forward to continuing its engagement activity in
the coming year.
More information on how we
work with our customers and
suppliers can be found in the
Sustainability section of our
website, www.bunzl.com
Scan the QR code to find
out more about bunzl’s
insight events, including
links to our slides and
webcast recordings
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Board performance review
The Board believes that maintaining a trajectory of continual improvement of its performance is pivotal to its success. A formal and rigorous Board performance review, evaluating the Board, its
Committees, the Chairman and each individual director is carried out annually and externally facilitated every three years, with a comprehensive external review having taken place during 2023.
Theprocess and outcomes of the 2023 performance review, along with actions taken to address the findings of the 2022 review, are outlined below.
1. Selection The review was undertaken by Lintstock, an independent advisory firm that does not provide any other services to, or have any connection with, the Company. The Board, following the
recommendation of the Nomination Committee, felt that engaging Lintstock was appropriate given their in-depth understanding of the Company. Such appointment would also ensure
consistency and continuity in the presentation of results from year to year, allowing progress to be tracked effectively.
2. Planning The objectives, scope and areas of focus of the review were agreed between the Chairman and the Company Secretary and discussed with Lintstock. It was agreed that the performance
of the Board, its Committees, the Board Chairman, Committee Chairs and each individual director would be reviewed and that it would cover core aspects of governance such as
information, composition and dynamics, as well as people, strategy and risk areas relevant to the performance of Bunzl.
3. Surveys and
Questionnaires
With the agreed scope and objectives in mind, Lintstock invited each director to complete a survey, following which Lintstock held in-depth one-to-one interviews with each of them.
TheCompany Secretary coordinated the process and provided Lintstock with the necessary support throughout.
4. Findings Reports on the results of the reviews were presented to the Chairman and Company Secretary and subsequently discussed by the Board and its Committees. Reports on individual
director performance were presented to the Chairman and a report on the Chairman was provided to the Senior Independent Director, who discussed the findings with the other
non-executive directors. The contributions, independence and time commitment of each director were found to be effective.
5. Next steps Having considered the findings of the review, the Board agreed on key priorities to further improve performance in 2024 and the follow up actions in relation thereto. These actions,
further details of which are detailed below, have been built into the Board’s agenda and activities for 2024.
Led by the Senior Independent Director, the non-executive directors meet without the Chairman present at least annually to appraise the Chairman’s performance, including a review of his other
commitments, to ensure that he is able to allocate sufficient time to the Company to discharge his responsibilities effectively. The Chairman also periodically holds meetings with the non-executive
directors without the executive directors present. All of these processes were carried out satisfactorily during the year.
Details of progress made in respect of the key priorities identified in 2022, are set out below.
Key priorities identified during 2022 Progress made
1. Focusing on management succession planning and
enhancing the Group’s organisational structure,
talent management, and diversity and inclusion
processes.
2. Continuing Bunzl’s focus on sustainability and
building this into customer relationships.
3. Supporting management in acquisition and organic
growth strategies.
4. Continued Board oversight of strategic priorities and
the execution of Bunzl’s strategic plans.
The Board is satisfied that the
priorities identified following
the evaluation carried out in
2022 have been adequately
addressed during 2023.
See page 89 for further
information.
Key priorities identified during 2023 Outcome of evaluation
1. Supporting the continuing evolution of the Board’s
composition.
2. Deepening the Board’s understanding of key
stakeholder developments, including customers.
3. Monitoring management succession and
development plans to build the long term talent
pipeline.
4. Continuing to monitor the external context,
particularly in areas such as sustainability and
technology.
As a result of the external
evaluation process carried out
in 2023, the Board concluded
that both it and its Committees
are operating effectively.
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CORPORATE GOVERNANCE REPORT continued
Risk management and internal controls overview
The Board has delegated to an Executive Committee, consisting
of the CEO, CFO and other functional managers, the initial
responsibility for identifying, evaluating, managing and
mitigating the risks facing the Group and for deciding how
these are best managed, as well as responsibility for
establishing a system of internal controls appropriate to the
business environments in which the Group operates. The
principal features of this system include:
• a procedure for monitoring the effectiveness of the internal
controls system through a tiered management structure with
clearly defined lines of responsibility and delegation of
authority;
• a second line of defence Internal Controls team to continually
develop the Group’s framework and approach to internal
controls over financial reporting;
• formal standards of business conduct (including code of
conduct, anti-bribery and corruption, fraud investigations and
reporting, and whistleblowing policies) based on honesty,
integrity, fair dealing and compliance with the local laws and
regulations of the countries in which the Group operates;
• strategic plans and comprehensive budgets which are
prepared annually by the business areas and approved by
theBoard;
• clearly defined authorisation procedures for capital
investment and acquisitions;
• a well-established consolidation and reporting system for the
statutory accounts and monthly management accounts;
• detailed manuals covering Group accounting policies, and
policies and procedures for the Group’s treasury operations
supplemented by internal controls procedures at a business
area level;
• periodic IT risk assessment aligned with the Group’s IT security
standard, as well as continual investment in IT systems and
security to ensure the security of information systems and
data, business continuity and the production of timely and
accurate management information; and
• considering ESG and non-financial reporting and assurance.
Some of the procedures carried out in order to monitor the
effectiveness of the internal controls system and to identify,
manage and mitigate business risk are:
• central management holds regular meetings with business
area management to discuss strategic, operational and
financial issues, including a review of the principal risks
affecting each of the business areas and the policies and
procedures by which these risks are managed;
• the Executive Committee reviews the outcome of the
discussions held at business area meetings on internal
controls and risk management issues;
• the Board in turn reviews the outcome of the Executive
Committee discussions on internal controls and risk
management issues, which ensures a documented and
auditable trail of accountability;
• each business area, the Executive Committee and the Board
carry out an annual fraud risk assessment. Reporting protocols
are in place to identify, analyse and respond to actual or
potential fraud incidents;
• an annual self-assessment of the status of internal controls
measured against a prescribed list of minimum standards is
performed by every business and action plans are agreed
where remedial action is required;
• actual results are reviewed monthly against budget, forecasts
and the previous year and explanations are obtained for all
significant variances;
• all treasury activities, including in relation to the management
of foreign exchange exposures and Group borrowings, are
reported and reviewed monthly. The Group’s bank balances
around the world are monitored on a weekly basis and
significant movements are reviewed centrally;
• developments in tax, treasury and accounting are continually
monitored by Group management in association with
externaladvisers;
• regular meetings are held with insurance and risk advisers to
assess the risks throughout the Group;
• systems are in place to monitor IT security incidents, analyse
and remediate any identified weaknesses. Findings are used
tocontinually improve defences across all Group companies;
• the Internal Audit function periodically performs business
andrisk-themed audit work, makes recommendations to
improve processes and controls and follows up to ensure
thatmanagement implements the recommendations made.
The Internal Audit function’s work is determined on a risk
assessment basis and its findings are reported to Group and
business area management as well as to the Audit Committee
and the external auditors;
• the Audit Committee, which comprises all of the independent
non-executive directors of the Company, meets regularly
throughout the year. Further details of the work of the
Committee, which includes a review of the effectiveness of
theCompany’s internal financial controls and the assurance
procedures relating to the Company’s risk management
system, are set out in the Audit Committee report on
pages112 to 121;
• management committees (known as the Group Sustainability
Committee, the Environment & Climate Change Committee,
the Health & Safety Committee, and the Supply Chain
Committee) which oversee issues relating principally to
environment, health & safety and business continuity planning
matters, set relevant policies and practices and monitor their
implementation; and
• health & safety risk assessments, safety audits and a regular
review of progress against objectives established by each
business area are periodically carried out.
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Risk management and internal controls
In accordance with the Code, the Board acknowledges that it has overall responsibility for identifying, evaluating, managing and mitigating the principal and emerging risks faced by the Group, and for monitoring
the Group’s risk management and internal controls systems. Such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss.
In accordance with the Code and the related guidance, the Company has established the procedures necessary to ensure that there is an ongoing process for identifying, evaluating, managing and mitigating the
principal risks faced by the Group and for determining the nature and extent of the principal risks it is willing to take to achieve its strategic objectives (its ‘risk appetite’). The directors confirm that such
procedures have been in place for the year ended 31 December 2023 and, up to the date of approval of these financial statements, that the Group’s risk management and internal controls systems have been
monitored during the year.
Further information about the Group’s approach to risk management and the principal risks and uncertainties facing the Group can be found on pages 68 to 76.
Financial and business reporting
The responsibilities of the directors in respect of the preparation of the Group and parent company financial statements are set out on page 195 and the auditors’ report on pages 196 to 201 includes a
statement by the external auditors about their reporting responsibilities. In accordance with provision 30 of the Code and as set out on page 154, the directors are of the opinion that it is appropriate to continue
to adopt the going concern basis in preparing the financial statements.
The process of preparing the Annual Report has included the following:
• comprehensive reviews undertaken at different levels of the Group in order to ensure the accuracy, consistency and overall balance of the Annual Report; and
• procedures to verify the factual accuracy of the Annual Report.
Fair, balanced and understandable – Bunzl’s assurance framework
In accordance with provision 27 of the Code, the Board confirms that taken as a whole, the 2023 Annual Report is fair, balanced and understandable, and provides the information necessary for shareholders to
assess the Company’s position, performance, business model and strategy. Considerations of the Board when reviewing whether the 2023 Annual Report, taken as a whole, is fair, balanced and understandable
and provides sufficient information to enable the reader to assess the Group’s position and performance, business model and strategy, are shown below:
1.
Independent review
process
A review was carried out by a
senior manager who was not
involved in the preparation of the
Annual Report.
2.
Senior executive management
team
Members of the senior executive
management team reviewed and
challenged the content and
messaging of the Annual Report.
3.
Internal
audit
The Board considered the
information and assurances
provided by the ongoing work
ofthe internal audit function.
4.
External
audit
The Board considered reports
from external auditors and any
significant issues identified in
relation to the Annual Report
andfinancial statements.
5.
Audit
Committee
The Board considered the work
and recommendations of the
Audit Committee in relation
toitsformal processes
concerningthe Annual Report
andfinancial statements.
Assessment of the prospects of the Company and its viability statement
In accordance with provision 31 of the Code, details of how the directors have assessed the prospects of the Company, over what period the prospects have been assessed and the Company’s formal viability
statement are included in the Strategic report on page 77.
By order of the Board
Suzanne Jefferies
Secretary
26 February 2024
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NOMINATION COMMITTEE REPORT
I am delighted to welcome
Jacky Simmonds as a
member of the Committee,
following her appointment
as a non-executive
director.”
Introduction from Peter Ventress
On behalf of the Board, I am pleased to present
the Nomination Committee’s report for the
financial year ended 31 December 2023, which
outlines the Committee’s role and responsibilities,
as well as our activities and areas of focus
duringthe year.
I am delighted to welcome Jacky Simmonds
asamember of the Committee, following her
appointment as a non-executive director on
1March 2023. Jacky was appointed after an
extensive search and selection process,
considered in the context of the existing
balanceof skills and diversity on the Board. She
has significant knowledge and experience across
allaspects of HR, with particular expertise in
employee engagement, transformational change,
board and leadership succession planning,
employee relations, and talent management.
Additional information concerning the search
andselection process for Jacky is included in the
report that follows, and information concerning
her skills and experience is set out on page 91.
Anoverview of Jacky’s induction process can
befound on page 99.
As I mentioned in my introduction to the
Corporate governance report, Vanda Murray,
Senior Independent Director and Chair of the
Remuneration Committee, has served as a
director for over nine years and will therefore,
inaccordance with best practice and the Code,
step down from the Board at the conclusion
ofthe AGM on 24 April 2024. A recruitment
processfor a new non-executive director is
nowunderwayand an announcement will
bereleasedin due course, once a suitable
candidatehas been identified.
The Nomination Committee dedicated time
during the year to succession planning for the
roles of Senior Independent Director and
Remuneration Committee Chair and an overview
of the matters considered by the Committee
aspart of its deliberations can be found later
inthis report.
In 2023, the Committee has focused on the
keypriorities identified during the 2022 Board
evaluation, which included management
succession planning, enhancing the Group’s
organisational structure, talent management, and
the diversity and inclusion process. Information
on the Committee’s progress in respect of these
priorities can be found on pages 107 to 109.
The 2023 Board evaluation was externally
facilitated and concluded that the Committee
continues to operate effectively and benefits from
strong internal and external support.
Recommended areas of focus for 2024 included
executive succession and talent development,
aswell as ongoing monitoring of the director
skillsmatrix in the wider context of the Group’s
business and strategic needs. For a
comprehensive summary of the Board evaluation
process and outcomes, see page 103. An
overview of the Committee’s priorities for 2024
can be found on the following page.
The Board’s composition is fully compliant with
the requirements of the Parker Review on ethnic
diversity and the gender diversity targets outlined
in the Hampton-Alexander Review. I am also
pleased to confirm that, following the
appointment of Jacky, we exceed the Financial
Conduct Authority’s new board diversity targets
implemented under Listing Rule 9.8.6. Further
information concerning our performance against
these targets can be found on page 109.
The Committee will continue to champion
aninclusive and diverse approach to talent
management and closely monitor Board and
Committee performance against best practice.
Peter Ventress
Chairman and Chair of the
Nomination Committee
26 February 2024
Peter Ventress
Chairman and Chair of the
Nomination Committee
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Composition
During 2023, the Nomination Committee
comprised the Chairman of the Company,
whochairs the Committee (unless the Committee
is dealing with the matter of succession of the
Chairman of the Company) and all of the
independent non-executive directors. In
accordance with the provisions of the UK
Corporate Governance Code, all of the
membersare independent non-executive
directors. The Secretary to the Committee is
theCompany Secretary.
Nomination Committee meetings
The Committee meets as necessary throughout
the year to discharge its responsibilities.
The table below sets out directors’ attendance at
the four scheduled Committee meetings held
during 2023.
Meetings attended
Peter Ventress 4/4
Vanda Murray
4/4
Lloyd Pitchford
4/4
Stephan Nanninga
4/4
Vin Murria
4/4
Pam Kirby
4/4
Jacky Simmonds*
2/2
* Jacky Simmonds was appointed as a director on 1 March 2023
and attended all Committee meetings held between that date
and the end of the year.
Key areas of focus in 2024
• Long term succession planning, with a
particular focus on the skills matrix for the
Board and senior executives
• Executive succession and talent development
• The balance of internal experience and external
fresh perspectives on the Board
• Consideration of the Company’s profile from
atalent management perspective
Role and support
The Committee’s principal role is to lead the
process for appointments to the Board, whether
to fill any vacancies that may arise or to change
the number of Board members, ensure plans are
in place for orderly succession to both the Board
and senior management positions and oversee
the development of a diverse pipeline for
succession. The senior management succession
plans take into account the views of all Board
members to ensure the plans encompass the
benefit of all their skills and experience. In the
performance of its duties, the Committee has
been authorised to enlist the services of external
executive search firms to assist with the
recruitment process, including the identification
of potential candidates, to fill Board positions
andvacancies.
It is the Committee’s role to ensure that the
Boardand its Committees maintain the
appropriate balance of skills, knowledge,
experience and diversity to ensure their
continued effectiveness. Information
concerningthe training and development
activities undertaken by the directors during
theyear can be found on page 99.
The Committee meets as necessary throughout
the year to discharge its responsibilities. The
Committee’s terms of reference are available on
the Company’s website, www.bunzl.com.
Performance evaluation
The Committee’s performance and effectiveness
are reviewed annually by both the Committee and
as part of the Board performance evaluation. The
Chair of the Committee also meets with each
Committee member independently to ensure that
their individual views about the operation of the
Committee are taken into account. This year, the
Board evaluation was externally facilitated by
Lintstock. Additional information concerning the
results of the 2023 performance evaluation is set
out on page 103.
Principal responsibilities of the
Committee
Board structure
• Reviewing the structure, size and
composition of the Board with regard to
maintaining a balance of skills, experience,
knowledge and diversity
Succession
• Considering succession planning, taking into
account the challenges and opportunities
facing the Company and the skills and
expertise required by the Board and senior
management in the future
• Reviewing annually a succession planning
presentation in relation to the Company’s
senior management
Appointments
• Identifying and nominating appropriate
individuals to fill Board vacancies as they
arise
• Approving the appointment of any senior
executive who is to report directly to the
Chief Executive Officer
• Making recommendations to the Board
as to the continuation in office and/or
reappointment of directors
Evaluation
• Considering the commitment required of
non-executive directors and reviewing their
performance
Activities
Evaluation and independence
When determining whether to recommend that
the directors be reappointed at the 2024 AGM,
the Committee considered a number of factors,
including the output of the 2023 external Board
evaluation. These factors were also considered,
in2023, when recommending that the Board
approve additional three-year terms for Lloyd
Pitchford, Stephan Nanninga and Vin Murria.
Having served on the Board for more than six
years, Lloyd Pitchford and Stephan Nanninga’s
continued objectivity and independence were
subject to particularly rigorous review.
Further details concerning the Board evaluation
process that was carried out during 2023, which
identified that the Committee continues to
operate effectively, can be found in the Corporate
governance report on page 103. Examples of the
priorities identified as part of the Committee’s
2023 evaluation can be found under the Key areas
of focus in 2024 section on this page.
The Committee also conducted a review of
individual director conflict authorisations as
recorded in the Conflicts of Interest register. The
register is maintained by the Company Secretary
and sets out any actual or potential conflict of
interest situations which a director has disclosed
to the Board in line with their statutory duties.
Toform a view of a director’s independence,
consideration was also given to other external
appointments held by each director.
Jacky Simmonds is currently Chief People Officer
at Experian plc and Lloyd Pitchford, another of
Bunzl’s non-executive directors is the Chief
Financial Officer of Experian plc. The Board is
mindful that the Code states that where a
non-executive director holds cross-directorships
or has significant links with other directors
through involvement in other companies or
bodies, this is likely to impair, or could appear to
impair, a non-executive director’s independence.
Prior to Jacky Simmonds’ appointment to Bunzl,
the Nomination Committee and the Board
considered whether the appointment would
impair the independence of either director.
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NOMINATION COMMITTEE REPORT continued
TheCommittee and the Board were satisfied that
there were no business conflicts between the two
companies and both directors demonstrate
independence of thought and will offer challenge,
including of each other’s views. Further, the
Committee and the Board were satisfied that
Jacky Simmonds has sufficient time to discharge
her duties to the Board and Committees of Bunzl
and that there were no other factors, which would
impair either director’s independence.
Accordingly, the Board does not consider that
Jacky Simmonds’ and Lloyd Pitchford’s positions
as independent non-executive directors of the
Company are adversely impacted by their roles
atExperian plc and are satisfied that,
notwithstanding these roles, they are to be
regarded as independent.
Non-executive directors’ independence of
thought and judgement is vital to facilitating
constructive and challenging debate in the
boardroom and is essential to the operational
effectiveness of the Board and its Committees.
The Committee determines a non-executive
director’s independence in line with the relevant
provisions of the Code and is satisfied that all
ofthe non-executive directors meet the criteria
for independence and that the Chairman of
theBoard met the criteria on appointment
tothatrole.
Succession planning
As previously mentioned, Vanda Murray will
retirefrom the Board and its Committees at the
conclusion of the Company’s upcoming AGM in
April 2024. Having served on the Board for over
nine years, Vanda’s departure had been factored
into the Committee’s director succession plans.
Pam Kirby and Jacky Simmonds will be appointed
to succeed Vanda in the Senior Independent
Director and Remuneration Committee Chair
roles, respectively. Pam is a seasoned director
with extensive executive and non-executive
experience in large, listed companies, and was
aclear candidate for the Senior Independent
Director role. Jacky has a strong background
across all aspects of HR, including remuneration,
and has previously served as Chair of the
Remuneration Committee of Ferguson plc.
Shehas also served as a member of Bunzl’s
Remuneration Committee since her appointment.
She was therefore considered to be ideally suited
to the role of Remuneration Committee Chair at
Bunzl. The need to refresh the Board but at the
same time maintain a knowledgeable and
experienced team of non-executive directors
issomething that the Committee continued to
address in succession planning discussions
during2023.
The Committee recognises that having the right
directors and senior management, with the right
capabilities, experience and Company and
industry knowledge, is fundamental to the
Group’s long term, sustainable success. In
furtherance of this, a key responsibility of the
Committee is to satisfy itself that a robust and
rigorous succession planning process is in place,
over both the medium and long term, to ensure
there is the right mix of skills and experience on
the Board as the Company evolves. The
Company’s succession plans, together with the
Board skills matrix and tenure tracker, are
considered regularly. This allows the Committee
to identify potential gaps, including in relation to
director rotation and in respect of the skills
needed to deliver the Group’s strategic priorities.
Effective and proactive succession planning and
assessment also enable the Committee and the
Board to ensure that changes to the Board are
proactively planned and coordinated.
Enhancing the Committee’s oversight of executive
succession planning continued to be a key priority
for the Committee in 2023 and one which will
continue to be an area of focus in 2024. The
Committee also plans to deepen its discussions
concerning the Board skills matrix, and executive
succession requirements in the context of longer
term strategic business requirements.
Recruitment
Appointments to the Board are subject to
rigorous and transparent procedures, and
theCommittee plays a key role in these.
TheCommittee oversees and makes
recommendations to the Board in respect
oftheidentification, assessment and selection
ofcandidates for appointment.
The Committee seeks to follow best practice in
allthe appointments it recommends, agreeing the
criteria for each role and the most appropriate
interview panel, before considering a
comprehensive and diverse list of candidates.
Shortlisted candidates are interviewed and
assessed against the chosen criteria and due
diligence is then undertaken before the
Committee makes its final recommendation.
Executive search firms are appointed based on
their expertise relative to each role, with Russell
Reynolds Associates being engaged in 2023.
Russell Reynolds Associates do not provide any
other services to, or have any connection with,
the Company or its individual directors. Russell
Reynolds Associates are a signatory to the
Voluntary Code of Conduct for Executive Search
Firms on gender diversity and best practice.
Anoverview of the search and selection process
undertaken in respect of the appointment of
JackySimmonds can be found below.
Recruitment of Jacky Simmonds
Role specification The Committee developed a role specification and list of preferred skills,
experience and characteristics for the new non-executive director.
Election of external
search firm
Following a final review of the role specification, Russell Reynolds
Associates was engaged as the external search firm.
Collation of
candidate list
Following consultation with the Chairman and the CEO, Russell Reynolds
Associates prepared a longlist of potential candidates, which was
subsequently reviewed by the Committee and a shortlist agreed.
Candidate
interviews
Preliminary interviews with each of the shortlisted candidates were held by
the Committee, following which the Committee agreed on the candidates
that best met the role specification.
Final stage
interviews
The preferred candidates attended additional meetings with the executive
directors and members of the Executive Committee.
Candidate
references
The Committee sought references for the preferred candidates and held
virtual meetings with the associated referees.
Committee
recommendation
The Committee held a debrief following the conclusion of all of the
interviews and referee meetings and made a recommendation to the
Board that Jacky Simmonds be appointed to the Board and its Committees
with effect from 1March 2023.
Board decision and
announcement
The Board accepted the recommendation of the Committee and approved
Jacky Simmonds’ appointment, following which an announcement was
made via the London Stock Exchange.
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Talent
The Committee takes an active interest in the
quality and development of the talent and
capabilities within Bunzl, ensuring that
appropriate opportunities are in place to develop
high-performing individuals. As part of its remit,
during 2023, the Committee continued to monitor
the development of Bunzl’s Executive Committee,
which sits below the Board, to ensure that there is
a diverse supply of senior executives and
potential future Board members with appropriate
skills and experience.
During the year, the Company completed annual
talent and succession planning reviews with the
Business Area Heads and HR Directors, a
summary of which was discussed by the
Committee. Additionally, the CEO presented his
annual management succession plan to the
Committee for its consideration. This included
information onpeople review processes,
functional talent development, specific emerging
talent pipelines, diversity, equity and inclusion,
and learning and development initiatives. This
process ensures thathigh performing individuals
within senior management can be developed and
nurtured in order to strengthen the succession
pipeline further, while at the same time increasing
diversity in senior roles across the Group. The
Committee also maintained regular interaction
with senior management across the Group and
within each business area. Such interaction
enables the Committee to familiarise itself with
the teams, thereby facilitating the identification
ofhigh performing talent and informing
succession planning.
Inclusion and diversity
Boards with an appropriate mix of experience,
backgrounds and perspectives are widely
acknowledged to foster robust dialogue of
differing views and be less susceptible to
groupthink. The Committee strives to embed
inclusion in everything that it does, and
succession planning and the appointment
process are key in promoting diversity in a way
that is consistent with Bunzl’s long term strategy.
The Committee embraces the importance of
diversity and inclusion in all Board and senior
management recruitment and challenges external
search consultants where necessary to ensure
that diversity of gender, social and ethnic
backgrounds and cognitive and personal
strengths is always considered in the selection
ofcandidates. In addition, the Committee seeks
toengage firms that are signatories to the
Voluntary Code of Conduct of Executive Search
Firms and encourages them to look further afield
and access talent from wide and diverse pools.
While taking the important considerations of
gender and diversity into account, the Committee
will continue to recommend appointments to the
Board based on merit and the individual skills and
experience of each candidate. It is nevertheless
clear that gender, ethnicity, race and other
formsof diversity and inclusion must remain
keyparts of our succession planning discussions
and are critical to the long term sustainable
success of the business.
The Board and the Committee’s approach to
inclusion and diversity in respect of the Board and
senior management is set out in the Board and
Committee Diversity Policy, which is reviewed
regularly and can be found on the Company’s
website at www.bunzl.com. The Board
Sustainability Committee refreshed the Board
and Committee Diversity Policy in 2023,
increasing the explicitly mentioned diversity
characteristics and adding tangible targets that
the Board will seek to continue to meet in future.
Additional information concerning diversity and
inclusion in Bunzl can be found in the
Sustainability report on pages 44 to 62 and
intheOur People section on page 36.
Performance against targets under LR 9.8.6
The Company is pleased to announce that it already meets the following diversity targets, at the
reference date of 31 December 2023:
I. at least 40% of the individuals on the Board of directors are women;
II. at least one of the following senior positions on the Board of directors is held by a woman:
A. the Chair;
B. the Chief Executive;
C. the Senior Independent Director; or
D. the Chief Financial Officer; and
III. at least one individual on the Board of directors is from a minority ethnic background.
There have been no changes to Board directorships that have affected attainment of the above targets
between 31 December 2023 and 26 February 2024.
As at the reference date of 31 December 2023, the composition of the Board and Executive
Management was as follows:
Gender (sex)
Number
of Board
members
Percentage
of the
Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
Management
1
Percentage of
Executive
Management
1
Men 5 56% 3 3 60%
Women 4 44% 1 2 40%
Not specified/prefer not to say
Ethnic background
White British or other White
(including minority-white groups) 8 89% 4 5 100%
Mixed/Multiple Ethnic Groups
Asian/Asian British 1 11%
Black/African/Caribbean/
Black British
Other ethnic group, including Arab
Not specified/prefer not to say
1. Under the definition provided by the Listing Rules, for the purposes of this disclosure, the definition of Bunzl’s Executive
Management comprises members of the Company’s Executive Committee, including the Company Secretary.
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Annual Report 2023 109108
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BOARD SUSTAINABILITY COMMITTEE REPORT
Our commitment to
sustainability is a source
ofcompetitive advantage,
encouraging innovation
and long term decision
making, aligned with our
purpose-led strategy.”
Introduction from Peter Ventress
I am pleased to present the first report of the
Board Sustainability Committee (the ‘BSC’) for
thefinancial year ended 31 December 2023. This
report provides an overview of the Committee’s
responsibilities and activities throughout the year,
and demonstrates how our work contributes to
sustainable value creation for the Company and
its stakeholders.
Bunzl is on a journey with respect to
sustainability, an area of critical strategic
importance in which the Company aims to be an
industry leader. Established in 2022, the
Committee acts as an oversight function for the
Group Sustainability Committee and provides
strategic advice to the Board on the objectives,
targets and priorities of the Group’s sustainability
strategy. While principal responsibility for
determining the sustainability strategy and its
implementation remain decisions for the Board,
the Committee supplements its work in this area
to allow for more detailed consideration of
sustainability-related risks and opportunities.
Thisreflects the centrality of sustainability to
Bunzl’s strategy and the Company’s recognition
ofthe increasing importance of sustainability
matters globally.
This year, the Committee met three times and
discussed a range of matters, details of which are
set out later in this report. Our meetings are
regularly attended by Bunzl’s Head of
Sustainability and Director of Group HR who,
throughout the year have provided valuable
insights into ESG-related matters, including deep
dives on the Company’s net zero transition plan,
responsible sourcing at Bunzl, and the Company’s
double materiality assessment in 2023 and
beyond. These sessions have bolstered the
Committee’s understanding of key sustainability
issues at play within the Company, enabling the
Committee to leverage its experience and
expertise to have meaningful discussions and
provide informed recommendations to the Board.
Bunzl’s commitment to sustainability is a source
of competitive advantage, encouraging innovation
and long term decision making, aligned with our
purpose-led strategy. During the year, the
Committee helped the Company to deliver on this
commitment by reviewing workstreams such as
the proposed approach for Bunzl’s supplier
engagement programme, considering an update
on the Science Based Target initiative’s (‘SBTi’s’)
Net Zero Standard (which has formed the basis of
the Company’s net zero transition plan) and
assessing performance against the Group’s
carbon reduction and other sustainability targets.
The Committee recognises that accountability and
transparency are key to building trust in the
Company’s sustainability efforts and endeavours
to report effectively against sustainability-related
targets. These disclosures and further
information regarding Bunzl’s approach to
sustainability can be found in the Sustainability
report on pages 44 to 62.
During the year, the Committee also reviewed
andupdated the Board and Committee Diversity
Policy to widen the diversity characteristics
explicitly outlined for consideration and to
incorporate the Company’s diversity targets,
inrelation to both Board and Committee
appointments. A link to the Board and Committee
Diversity Policy can be found on the Company’s
website, www.bunzl.com.
The 2023 Board evaluation concluded that the
Committee has come together well since its
formation and I look forward to sustainability
becoming even further embedded in our
governance framework going forward.
Peter Ventress
Chairman and Chair of the BSC
26 February 2024
Peter Ventress
Chairman and Chair of the Board
Sustainability Committee
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Composition
During 2023, the BSC comprised the Chairman
ofthe Company, who chairs the Committee, and
all of the independent non-executive directors.
The Secretary to the Committee is the Company
Secretary. The CEO, CFO, Director of Group HR
andHead of Sustainability are also usually invited
to attend Committee meetings and other senior
executives are invited to attend meetings
asrequired.
BSC meetings
The Committee meets as necessary throughout
the year to discharge its responsibilities.
The table below sets out directors’ attendance
atthe three scheduled Committee meetings held
during 2023.
Meetings attended
Peter Ventress 3/3
Vanda Murray
3/3
Lloyd Pitchford
3/3
Stephan Nanninga
3/3
Vin Murria
3/3
Pam Kirby
3/3
Jacky Simmonds*
3/3
* Jacky Simmonds was appointed as a director on 1 March 2023
and attended all Committee meetings held between that date
and the end of the year.
Principal responsibilities
of the Committee
• Assist the Board in overseeing policies and
programmes to ensure that the Company
meets objectives, targets and priorities set out
in the sustainability strategy
• Ensure that the Board is kept updated on key
sustainability matters
• Provide recommendations to the Board on
changes to Bunzl’s governance framework and
the sustainability strategy
• Make recommendations to the Board to
mitigate any sustainability related risks
identified by management
• Review the work of other Board level
Committees to ensure that adequate
consideration is afforded to
sustainabilityobjectives
• Provide recommendations to the Board on
approval of any corporate communications
withmaterial sustainability content
• Assist the Board in its oversight of Bunzl’s
conduct with regard to its obligations as
acorporate citizen
Activities of the Committee
during 2023
• Received an update on Bunzl’s 2023
doublemateriality assessment and
discussednext steps
• Reviewed reports on Bunzl’s Supplier
Engagement Programme
• Received updates on Bunzl’s net zero transition
plan and the SBTi Net Zero Standard
• Reviewed the Company’s sustainability
objectives for 2023, with a focus on products
and packaging, climate change and diversity
and inclusion
• Discussed changes to the Group Diversity,
Equity and Inclusion policy and recommended
the reviewed policy to the Board for approval
• Participated in a deep dive into responsible
sourcing at Bunzl, with a focus on standards
and governance, risks, auditing and recent
workstreams
• Recommended the 2023 Modern Slavery
Statement to the Board for approval
• Submitted the Board and Committee Diversity
Policy to the Board for approval
Q&A:
with James Pitcher, Group Head of
Sustainability
Q. How has the formation of the BSC
influenced Bunzl’s governance of
sustainability related issues?
Sustainability has always been a regular agenda
item at Bunzl’s Board meetings, but the creation
of the BSC has allowed for more time to be
dedicated to discussion of sustainability-related
matters and more frequent updates to be
provided to the Board on the progress of our
keyinitiatives. This allows Board members to
consider sustainability-related issues in more
detail and ask more questions on particular
topics, for example the development of our
netzero transition plan.
The formation of the BSC has also facilitated
deeper Board-level consideration of emerging
issues, such as new sustainability reporting
standards. The Committee’s oversight of this
area ensures that Bunzl delivers on its
commitment to clear and transparent
disclosures and enhances the Group’s
contribution to a more sustainable future.
Q. What level of engagement does your team
have with the BSC?
As Group Head of Sustainability, I attend and
present to the Board at Committee meetings,
supported by other members of the team
asnecessary.
I then provide updates from meetings to our
regional sustainability teams so they can
understand and act on the Committee’s
feedback as appropriate.
Q. How does the BSC include stakeholder
considerations in its discussions?
At Bunzl one of our key strengths is being able to
offer our customers a tailored approach based
on their individual needs. The local expertise
and supply flexibility that our decentralised
structure offers means we are perfectly placed
to solve the individual problems our customers
face rather than taking a ‘one size fits all’
approach to their sustainability challenges.
Forexample, we can provide solutions to suit
different types of regional or local packaging
legislation that a customer with a national
presence needs, and can tailor our deliveries
toa customer’s network of sites to reduce
carbon emissions.
Since the formation of the BSC, we have been
able to share feedback and examples from our
customer’s perspectives with the Board and,
indoing so, give Board members a greater
appreciation of the sustainability-related
priorities of our customers and how any issues
are addressed across Bunzl’s decentralised
business. The Board is then able to take these
priorities and issues into consideration and
make well-informed decisions with the interests
of Bunzl’s key stakeholders in mind.
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AUDIT COMMITTEE REPORT
Assuring the reliability of
our reporting is critical to
the Group’s long term
success and to building
trust with our
stakeholders.”
Introduction from Lloyd Pitchford
I am pleased to present our Audit Committee
report for the year ended 31 December 2023
andwelcome Jacky Simmonds, who was appointed
on 1 March 2023, as a Committee member. The
report provides an overview of the Committee’s
role and demonstrates how our work contributes
to the achievement of the Group’s purpose-led
strategy, further information of which can be
found on page 26.
Assuring the reliability of our reporting is critical
tothe Group’s long term success and to building
trust with our stakeholders. The Committee
assists the Board in fulfilling its responsibilities
inthis regard by monitoring areas such as the
integrity of financial and non-financial reporting
and the effectiveness of the risk management
framework and system of internal controls.
During 2023, the Committee made good progress
on the key areas of focus that were identified as
part of its 2022 evaluation, further details of which
are set out in the report that follows. The
Committee continues to keep its activities under
review to ensure they remain appropriate, and
insights into the Committee’s priorities for the
forthcoming year can be found on page 113.
External audit tender
In accordance with The Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014
(the ‘CMA Order’), the Company is required to put
its external audit contract out to tender every 10
years. As PricewaterhouseCoopers LLP (‘PwC’)
were appointed as Bunzl’s external auditors in
2014, it was decided that a formal and competitive
tender process, overseen by the Committee,
would be carried out in 2023.
The tender concluded with the Board accepting
the Committee’s recommendation that, subject
toshareholder approval at the Company’s 2024
AGM, PwC be reappointed as the Company’s
statutory auditors for the 2024 financial year.
Anoverview of the tender process can be found
on page 120.
Audit and corporate governance
reforms
During 2023, the Committee monitored the
draftCompanies (Strategic Report and Directors’
Report) (Amendment) Regulations 2023 and
undertook preparatory work to ensure that the
Company would be well positioned to implement
the new requirements. While the statutory
instrument has been withdrawn, the principle of
increasing the effectiveness of the Company’s risk
management and internal controls systems
remains a priority for the Committee.
In addition, the Audit Committees and the
External Audit: Minimum Standard (the ‘Minimum
Standard’) was issued by the Financial Reporting
Council (the ‘FRC’) in 2023. Prior to its
implementation, a gap analysis was undertaken
toensure that the Company’s current practices
are in line with the requirements set out therein.
Although the Minimum Standard is not currently
mandated, I am pleased to share that the
Company complies with its provisions.
The Committee is also aware of the amendments
to the UK Corporate Governance Code, which
were published by the FRC in January 2024. As
mentioned in the Corporate governance report,
afull review of the new requirements will be
undertaken in 2024 and the Committee will report
formally against the relevant provisions as they are
brought into effect in 2025 and 2026.
Risk management, internal controls,
and fraud risk
Bunzl’s internal controls environment is designed
to protect the business from any material risks it
faces. Overseen by the Committee, Bunzl’s
Internal Controls Essentials programme was
implemented in 2022 to address the UK
government’s proposed reforms to the audit and
corporate governance regime. Although some of
the proposed reforms were withdrawn in October
2023, the programme was implemented with a
‘no-regrets’ approach and designed to support
Bunzl’s growing businesses with a clear global
framework and guidance but localised design
andimplementation. As such, core programme
Lloyd Pitchford
Chair of the Audit Committee
objectives around financial controls remain and
implementation work continues. Progress in
respect of the work carried out under the
programme was considered at each Committee
meeting during 2023 and the Committee is
pleased with the positive impact that the
programme has had on the Group’s risk and
control environment. The Committee will review
the Internal Controls Essentials programme
approach and alignment with the relevant
provisions of the revised Code in 2024, with
aparticular focus on non-financial controls.
The Internal Controls Essentials programme has
also brought about more extensive and frequent
reporting of fraud risk and, in 2023, the
Committee evaluated a new cross-functional
Fraud Response and Investigation Standard,
developed in conjunction with a third party
security firm. The standard was designed to
supplement the Group Fraud Policy, which itself
was refreshed in 2022, with the aim of advancing
minimum standards and providing best practice
guidelines on investigation activity. The impact
ofthe new standard will be kept under review
andrisk management and internal controls will
remainan area of focus for the Committee
throughout 2024.
Additional information on our governance of risk
management and internal controls can be found
later in this report and in the Corporate
governance report on pages 116 to 117.
Information and cyber security
Bunzl’s information and cyber security
programmes are vital to the sustainable success
of the Group’s operations. Ensuring that robust
and adaptable governance processes are in place
to detect and respond to ever-evolving cyber
security risks remained a key focus of the
Committee in 2023. During the year, the
Committee received regular updates on the
Group’s information security internal controls
framework from both the Group Chief Information
Officer (‘Group CIO’) and the Group Chief
Information Security Officer (‘Group CISO’),
including the output from an externally facilitated
cyber incident simulation.
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Composition and experience
The Committee comprises all of the independent
non-executive directors, who were appointed to
the Committee by the Board following
recommendations by the Nomination Committee.
The Secretary to the Committee is the
CompanySecretary.
All members contribute to the work of the
Committee and bring an appropriate balance of
financial, risk management, commercial acumen
and experience in multinational organisations,
combined with a good understanding of the
Company’s business and are therefore considered
by the Board to be collectively competent in the
sector in which the Company operates.
As the serving Chief Financial Officer of Experian
plc, the Chair of the Committee, Lloyd Pitchford, is
considered by the Board to have recent and
relevant financial experience. The Committee
members are of an independent mindset and
bring a diversity of perspectives, knowledge and
experience to the Committee’s deliberations,
which in turn ensures that the Committee is able
to provide an appropriate amount of scrutiny,
challenge and support to management.
Independent thinking is an essential aspect of the
Committee’s role and is crucial in assessing the
work of management and the assurance provided
by the internal and external audit functions.
Further information concerning the directors’ skills
and experience can be found in the Corporate
governance report on pages 90 to 92.
Audit Committee meetings
The table below sets out the Committee’s
composition and its members’ attendance at
thefour scheduled Committee meetings held
during 2023.
Meetings attended*
Lloyd Pitchford 4/4
Vanda Murray
4/4
Stephan Nanninga
4/4
Vin Murria
4/4
Pam Kirby
4/4
Jacky Simmonds**
3/3
* While the Company Chairman and the executive directors are
not members of the Committee, they normally attend
Committee meetings by invitation, together with the Head of
Internal Audit and Risk, the Group Financial Controller,
representatives from the external auditors and other
members of the Group finance team.
** Jacky Simmonds was appointed as a director on 1 March 2023
and attended all Committee meetings held between that date
and the end of the year.
Key areas of focus in 2024
• Continuing to monitor financial reporting,
theembedding of new control systems, the
development of risk management as well
asartificial intelligence and data protection
• Continuing to monitor and develop a response
to proposed reforms to the UK governance and
audit framework, including progress made to
comply with relevant Code requirements
relating to audit, risk and internal controls
• Reviewing progression of the Internal Controls
Essentials programme
• Considering non-financial and ESG reporting
and assurance
• Regular updates on Information Security,
including progress implementing the agreed
multi-year plan, and deep dive training sessions
covering key risks and the Company’s actions in
response thereto
Additional information on the Group’s approach
toinformation and cyber security is outlined later
in this report on page 116.
Financial and non-financial reporting
During the year, the Finance function’s remit was
expanded to include responsibility for the Internal
Controls team, as well as ESG and non-financial
reporting. This is a welcome development, which
Ibelieve will streamline the Group’s reporting
processes and further enhance the quality of
Bunzl’s disclosures.
Monitoring the integrity of the Group’s financial
and narrative reporting and the significant
judgements contained therein continued to be
akey priority in 2023. The Committee received
regular updates on legal and regulatory
developments relating to ESG and non-financial
reporting and considered existing processes in
the context of these new requirements and
emerging best practice. The Committee is aware
of incoming legislation, such as the Corporate
Sustainability Reporting Directive, and will monitor
developments in this area closely to ensure that
itis well positioned to oversee and, where
necessary, challenge, the Company’s plans and
actions to comply therewith.
During the year, a letter was received from the
Conduct Committee of the FRC relating to its
limited scope review of the Company’s Annual
Report for the year ended 31 December 2022.
Further information was requested in relation to
two principal areas. However, following our letter
of response, no substantive changes were
required to the Company’s disclosures.
1
Internal Audit function
In accordance with the internal audit charter, the
Company’s Internal Audit function was subject to
arigorous external quality assessment (‘EQA’)
process in 2023, facilitated by an independent
third party. The Committee considered and
discussed the results of the assessment and I am
pleased to report that, since the previous EQA, all
actions identified to mature the approach and role
of the function have been taken. Further details
concerning the 2023 EQA process can be found
on page 119.
Performance evaluation
I am pleased to report that the 2023 Board
evaluation demonstrated that we are performing
our duties effectively and providing robust
challenge and support to management. Further
information concerning the evaluation can be
found in the Corporate governance report on
page 103.
Additional disclosures on the Committee’s
activities in 2023, and planned areas of focus in
2024, can be found later in this report. I hope that
this report and the insights it provides on the
Committee’s activities assures you that we
continue to approach our duties with rigour,
integrity and transparency.
Lloyd Pitchford
Chair of the Audit Committee
26 February 2024
1.
The FRC makes suggestions, where it believes the users of the accounts would benefit from improvements to the Company’s existing
disclosures. Each year, the Company considers any suggestions made by the FRC in preparing the Company’s Annual Report. The
Company recognises that the FRC’s review was based on a review of its Annual Report for the year ended 31 December 2022 and did
not benefit from detailed knowledge of the Company’s business or an understanding of the underlying transactions entered into.
The FRC’s review provides no assurance that the Company’s Annual Report is correct in all material respects; the FRC’s role is not to
verify the information provided but to consider compliance with reporting requirements.
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AUDIT COMMITTEE REPORT continued
Role and support
The role of the Audit Committee is to act
independently of management to safeguard
theinterests of stakeholders in relation to the
Company’s financial reporting and internal
controls arrangements. A fundamental part
ofthisrole is ensuring that the Company has
effective governance over the Group’s financial
reporting, including the adequacy of related
disclosures, theperformance of both the internal
and external audit functions and the management
of the Group’s systems of internal controls and
businessrisk management and related
complianceactivities.
The Committee provides appropriate oversight,
review and challenge of the decisions and
approach taken by management in respect of the
content and disclosures within the Company’s
financial reports, including considering whether
such disclosures are set properly in context.
In the performance of its duties, the Committee
has independent access to the services of the
Company’s internal audit function and to the
external auditors and may obtain outside
professional advice as necessary.
The Committee’s terms of reference, which were
reviewed by both the Committee and the Board
in2023, are available on the Company’s website,
www.bunzl.com.
Training and briefings
Throughout 2023, the Committee considered
market updates and developments to ensure that
it was fully cognisant of matters that may affect
the Group and its operations. This included:
• Internal Controls Essentials programme and
fraud updates at every Committee meeting;
• review of non-financial reporting and
assurance;
• updates on the proposed UK corporate
governance and audit reforms;
• information security updates;
• PwC Audit Committee training, including:
− accounting update;
− corporate reporting & governance update;
and
− regulatory and public policy matters.
Stakeholder engagement
Our relationship with our stakeholders is a
fundamental driver of value creation and we place
considerable importance on ensuring that we are
aware of and understand their views and
sentiments. The Committee Chair avails himself
ofall opportunities to engage with Bunzl’s
stakeholders when appropriate in order to obtain
their feedback and discuss any concerns that they
may have concerning the Committee’s operations
and oversight. In 2023, members of the
Committee, including the Chair, proactively
reached out to various institutional shareholders
to solicit meetings to discuss the work of the
Committee and to answer any questions that the
shareholders may have concerning matters within
the Committee’s remit. Additional information on
this engagement can be found of page 102.
While the results of the Company’s proactive
engagement with stakeholders during the year
did not identify any concerns relating to the
Group’s risk profile and management thereof, or
the Committee’s discharge of its responsibilities,
this is not taken for granted and the Committee
will continue to monitor stakeholder sentiment
closely and ensure that engagement is sought
whenever it is needed. The Chair of the
Committee will also be attending the Company’s
forthcoming AGM to answer any questions that
shareholders may have. Further information
concerning stakeholder engagement can be
found on pages 64 to 67.
Principal responsibilities of the
Committee
Financial and narrative reporting
• Monitoring and reviewing the integrity of the
Group’s financial and narrative reporting and
the significant judgements contained therein
• Reviewing non-financial reporting measures,
including non-financial KPIs, for inclusion in
the Annual Report
Risk management and internal controls
• Reviewing:
− the Group’s risk management processes,
procedures and controls;
− the effectiveness of the Company’s internal
controls systems including operational,
compliance and financial controls; and
− the assurance activities relating to financial
and non-financial reporting matters.
Internal audit
• Overseeing the Company’s internal audit
activities
• Monitoring and reviewing the effectiveness
of the internal audit function
External audit
• Making recommendations to the Board in
relation to the appointment/reappointment/
removal of the external auditors
• Reviewing the Company’s relationship with
the external auditors and monitoring their
independence and objectivity
• Agreeing the scope, terms of engagement
and fees for the statutory audit
• Initiating and supervising a competitive
tender process for the external audit as
required from time to time
• Developing and implementing a policy on the
engagement of the external auditors to
supply non-audit services
Financial statements and significant
accounting matters
During the year and prior to the publication of the
Group’s results for 2023, the Committee spent
considerable time reviewing and scrutinising the
2023 half year financial report and related news
release, the 2023 Annual Report (including the
financial statements), the 2023 annual results
news release and the reports from the external
auditors on the outcomes of their half year review
and their audit relating to 2023. Management was
challenged, where appropriate, on matters such
as the appropriateness of accounting policies,
critical accounting judgements and key accounting
estimates. The appropriateness of the Group’s
external reporting framework and use of
alternative performance measures (‘APMs’) were
also assessed, with the Committee concluding
that it is satisfied that the APMs reviewed are
consistent with market practice, and that
disclosure and reconciliation to statutory
measures is appropriate. In conjunction with the
Board, the Committee reviewed the financial
modelling and stress testing conducted for the
going concern assessment, as well as the viability
assessment process undertaken in support of the
long term viability statement. The Committee also
challenged the assumptions and scenarios,
notingthe effect they would have during the
viability period, further details of which can be
found on page 77.
As part of its work, the Committee considered
anumber of significant accounting matters in
relation to the Company’s financial statements,
together with the adequacy of the associated
disclosures. These significant accounting matters
are summarised in the table below and further
information can be found in the relevant notes
tothe consolidated financial statements. The
Committee believes that the significant
accounting matters have been properly recorded
in the Company’s books and records and
accounted for appropriately, including relevant
disclosure in the Annual Report.
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Significant matters considered in relation to the financial statements
Matter Review and conclusion
Accounting for business
combinations
For business combinations, the Group has a long-standing process for the identification of the fair values of the assets acquired and liabilities assumed, including separate
identification of intangible assets using external valuation specialists where required. The Committee reviewed this process and discussed with management and the external
auditors the methodology and assumptions used to value the assets and liabilities of the acquisitions completed in 2023. The Committee concluded that it was satisfied with
management’s valuations of these assets and liabilities, including the degree to which such valuations are supported by professional advice from external advisers. For
business combinations where less than 100% of the issued share capital of a subsidiary is acquired and the acquisition includes put and call options over the remaining share
capital of the subsidiary, the Group has an established process to assess whether a non-controlling interest should be recognised. There were six such business combinations
during the year. The Committee reviewed the Group’s assessment of these si business combinations, noting that no non-controlling interest had been recognised. The
Committee concurred with management’s conclusion that the risks and rewards associated with the options to purchase the remaining shares had transferred to the Group
on each acquisition. Details of the Company’s approach to accounting for acquisitions are set out in Note 9 to the consolidated financial statements.
The carrying value of
goodwill, customer
relationships and brands
intangible assets
Goodwill is allocated to cash generating units (‘CGUs’) and is tested annually for impairment. The Committee critically reviewed and discussed management’s report on the
impairment testing of the carrying value of goodwill of each of the Group’s CGUs. The Committee also critically reviewed and discussed management’s consideration of the
impairment risk relating to customer relationships, brands and technology intangible assets. In both regards, the Committee considered the sensitivity of the outcome of
impairment testing to the use of different assumptions and considered the external auditors’ testing thereof.
After due challenge and debate, the Committee concluded that it was satisfied with the assumptions and judgements applied in relation to the impairment testing and agreed
that there was no impairment of goodwill or customer relationships, brands and technology intangible assets. Details of the key assumptions and judgements used are set out
in Note 13 to the consolidated financial statements.
Defined benefit pension
schemes
The Committee considered reports from management and the external auditors in relation to the valuation of the defined benefit pension schemes and reviewed the key
actuarial assumptions used in calculating the defined benefit pension liabilities, especially in relation to discount rates, inflation rates and mortality/life expectancy. The
Committee discussed the reasons for the movement in the net pension surplus and was satisfied that the assumptions used were appropriate and were supported by
independent actuarial experts.
Inventory and receivable
provisions
The Committee considered the analysis from management detailing the provision percentages and reconciliation of the provision balance from 31 December 2022 to
31December 2023 and noted that, during the year, the Group had a net utilisation of approximately £25 million in trade receivables and slow-moving inventory provisions,
with usage of these provisions exceeding net charges to increase the provisions.
The Committee also noted that the Group had some utilisation of the additional provisions set up in the prior year as a result of market price movements on certain
Covid-19products.
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We believe that having an overlapping strategy
based on security tools, people, and processes
yields the most effective defences. Our layered
approach to cyber security provides multiple
opportunities for threats to be identified and
addressed before they can cause significant harm.
Fundamental to the success of our digital security
and strategy is our digital security culture, which is
fostered and embedded through several
channels. We recognise that a culture of security
has to start at the top and the Board and
Committees lead by example by dedicating
considerable time and attention to the risks
associated with cyber and information security.
The Group CIO, Group CISO and the Head of
Internal Audit and Risk are regularly invited to
Committee meetings to give an assessment of
cyber risk and provide updates on the measures
being taken by management to mitigate the cyber
and information security risks and other evolving
threats faced by the business.
Making security a part of everyone’s
responsibilities is a key part of instilling Bunzl’s
security culture and seeing senior management
embody the security culture through their words
and actions has been an important part of this.
Regular communications and presentations from
the Group CIO and Group CISO also increase
employees’ awareness and understanding of
cyber risks and reinforce the significance security
has for the entire Group. Similar to many large
companies, Bunzl is the subject of regular cyber
threats and attacks, none of which were
considered material and all of which were
managed effectively by our Group Information
Security teams in 2023.
In 2023, the Committee received reports on a
cyber incident simulation exercise facilitated by a
third party. A cross-functional group undertook
the exercise, considering how they would address
the simulated incident at each stage of the
process. At the end of the simulation, key
learnings and future actions were summarised
with additional feedback provided by the third
party to further improve each function’s approach
to addressing potential cyber security incidents.
Risk management
The Board approves the Group’s risk management
framework and sets the risk appetite, which in
turn guides management to proactively identify,
monitor, and manage the material and emerging
risks that could impact Bunzl. During 2023, the
Committee continued its regular review of risk
reporting to ensure the balance between risk and
opportunity remained in line with the Group’s risk
appetite and tolerance.
In 2023, the Committee reviewed the process by
which significant current and emerging risks had
been identified by management and the Board,
the key controls and other processes designed to
manage and mitigate such risks, including the
assurance provided by the internal audit function,
the external auditors and other oversight from
management and the Board. The Committee uses
a number of tools to review the Group’s risk
management processes, including the Group’s
Risk and Assurance Map. These tools are reviewed
regularly to ensure that they remain fit for
purpose and continue to meet the needs of the
business. External assurance reviews, which are
focused on the maturity of the Group’s risk
management procedures, are held every five
years, with the latest taking place in 2022. In 2023,
the Committee reviewed the output of annual
internal reviews of the maturity of the Group’s risk
management procedures, which have been used
to develop the Group’s ERM framework further
and set goals for the future.
Cyber risk
We have continued to strengthen our cyber
security controls and governance in recent years
in response to the increasing threat cyber risks
pose to our businesses, including further
developing our security policies, practices and
training. We have remained focused on increasing
the maturity of our cyber security capabilities and
have invested heavily in the resources and
initiatives necessary to maintain and improve our
information security framework, including
preventative technologies such as end point
detection systems, user training and carrying out
regular health checks and testing.
AUDIT COMMITTEE REPORT continued
The Committee also received updates on the
Group’s information security risk assessment
process and an internal controls overview,
supported by a detailed internal audit of the
current information security internal controls
framework. External assurance reviews of our
information security systems are undertaken
regularly, with the last review being carried out in
2022, and the next one scheduled for 2024.
We believe that having an overlapping strategy
based on security tools, people, and processes
yields the most effective defences. Our layered
approach to cyber security provides multiple
opportunities for threats to be identified and
addressed before they can cause significant harm.
Cyber security at Bunzl
Identify
Know what we have, what we do, and
what’s important
• Asset Management
• Business Environment
• Governance
• Risk Assessment
• Risk Management
Protect
Stop the things we should and do the
basics well
• Identity Management
• Awareness and Training
• Data Security
• Information Protection
Detect
Quickly, simply, and efficiently find what
needs to be stopped
• Anomalies and Events
• Detection Processes
• Security Continuous
Monitoring
Respond
Implement processes to deal with events
inreal time
• Analysis
• Mitigation
• Improvements
• Communications
• Response Planning
Recover
Return to known good state and focus on
continuous improvement
• Disaster Recovery
• Continuous
Improvement
• Communications
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Internal controls
The Group has an internal controls environment
designed to protect the business from the
material risks which have been identified.
Management is responsible for establishing and
maintaining adequate internal controls and the
Committee has responsibility for ensuring the
effectiveness of those controls. These controls
and procedures are designed to manage, but not
eliminate, the risk of failure of the Company to
meet its business objectives and, as such, provide
reasonable, but not absolute, assurance against
material misstatement or loss.
The Committee monitored the effectiveness of
the internal financial controls framework through
reports from the Chief Financial Officer (‘CFO’), the
Group Financial Controller, the Head of Internal
Audit and Risk and the external auditors. In
particular, the Committee considered the scope
and results of the work of internal audit, the
findings of the external auditors in relation to the
year end audit, management’s assessment of
fraud risk, the controls over the Company’s
financial consolidation and reporting process,
treasury controls, tax risks and the process for
monitoring the ongoing performance of the
Company. It is the responsibility of management
to provide confirmation that the controls and
processes are being adhered to throughout the
business and this is continually tested by the work
of the internal audit function as part of its annual
plan of work, which the Committee approves.
Compliance with the internal controls system is
monitored via an annual internal controls
self-assessment with sign-off and review of key
financial and non-financial controls for all
businesses. Self-assessed responses are
challenged locally by business area internal
controls teams, reviewed centrally and audited on
a sample basis by the internal audit function, and
reported to the Committee.
The Committee also oversaw the Group’s Internal
Controls Essentials programme, which aims to
further develop the Group’s internal controls
framework for financial reporting. As part of this
programme, a Group Steering Committee works
to further the strategy and monitor progress
against key programme deliverables. In 2024, the
Committee will review the Internal Controls
Essentials programme to ensure it is aligned to
the FRC’s revised Code, including in respect of
non-financial controls.
Having reviewed the process by which
management assessed the control environment,
in accordance with the requirements of the
Guidance on Risk Management, Internal Controls
and related Financial and Business Reporting
published by the FRC, the Committee confirms
that the system of internal controls operated
effectively for the 2023 financial year. Where
specific areas for improvement were identified,
mitigating alternative controls and processes
were in place. This allows us to provide positive
assurance to the Board to help fulfil its obligations
under the FRC’s UK Corporate Governance Code.
Further information on internal controls and risk
management is included in the Corporate
governance report on pages 104 to 105.
Additional information concerning the Group’s
approach to risk management and the principal
risks and uncertainties that it faces can also be
found on pages 68 to 76.
Meetings and activities
Committee meetings are generally scheduled
close to Board meetings in order to facilitate an
effective and timely reporting process.
The Committee has a structured, rolling, forward-
looking planner which is developed with the
Company Secretary and is designed to both
ensure that the Committee’s responsibilities are
discharged in full during the year, and to facilitate
more in-depth reviews of those topics which are
of particular importance or pertinence. Items on
the agenda are set with consideration of
regulatory requirements, the Company’s
reporting timetable and after considering key
issues identified by the CFO, management, the
Head of Internal Audit and Risk and the external
auditors.
The forward agenda planner is reviewed regularly
and adapted, where necessary, to ensure that it
meets the changing needs of the business.
The Chair of the Committee holds preparatory
discussions with the Company’s senior
management, the Head of Internal Audit and Risk
and the external auditors prior to Committee
meetings to discuss the items to be considered at
the meetings. The Committee Chair also meets
individually throughout the year with Committee
members to obtain their feedback on the areas of
Committee focus. Separate discussions are held
periodically during Committee meetings between
the Committee and the Head of Internal Audit and
Risk and the external auditors without
management present.
Following each Committee meeting, any
significant findings are reported to the Board
andcopies of the minutes of the Committee
meetingsare circulated to all directors and
totheexternal auditors.
The Committee Chair attends the AGM to respond
to any shareholder questions that might be raised
concerning the Committee’s activities.
A summary of the Committee’s key activities in
2023 and its priorities for 2024 can be found on
page 118 and page 113 respectively. The
Committee will continue to keep its activities under
review and adapt them wherever necessary in
anticipation of, and in response to, developments
within the business and changes in the financial
reporting, regulatory and governance landscape.
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AUDIT COMMITTEE REPORT continued
Audit Committee meetings and activities
Financial reporting
• Receiving and, where appropriate,
challenging reports from management and
the external auditors in relation to the half
year financial report and the annual financial
statements
• Reviewing the half year financial report and
the annual financial statements and the
formal announcements relating thereto
• Considering the appropriateness of
disclosures made in the half year financial
report and annual financial statements
• Considering thematic reviews and guidance
from the FRC concerning annual report
disclosures
• Reviewing the effectiveness of the Company’s
internal financial controls and the assurance
procedures relating to risk management
systems, including receiving and considering
a Risk and Assurance Map
• Considering ESG and non-financial reporting
and assurance
• Reviewing the Company’s annual controls
self-assessment and fraud processes and
related controls framework
• Reviewing the effectiveness of the Company’s
risk management processes
• Reviewing the Company’s principal tax risks
and the steps taken to manage such risks
• Considering updates from the Group
Financial Controller on the Internal Controls
Essentials programme and fraud updates
• Receiving updates on the Group’s
Information Security Policy and activities in
2023, including incidents encountered, threat
monitoring, control priorities, focus areas
and key performance indicators
• Receiving updates from the Head of Internal
Audit and Risk on the Information Security
Assurance Audit Plan and associated audit
results, including progress on GDPR and data
privacy, and the Group’s risk-based security
framework
• Considering the new Fraud and Investigation
Standard
• Reviewing the effectiveness of both the
external auditors and the internal audit
function following completion of detailed
questionnaires by both the Board and senior
management within the Company
• Approving the tender of the external audit
contract
• Making recommendations to the Board,
based on considerations of the output of the
external audit tender, concerning the
reappointment of the external auditors
• Approving the remuneration and terms of
engagement of the auditors, including the
audit strategy
• Reviewing and approving the policy for the
provision of non-audit services by the
external auditors
• Reviewing and approving the level and nature
of non-audit work which the external
auditors performed during the year, including
the fees paid for such work, and planning
process for the current financial year
• Reviewing and approving the internal audit
work programme for the coming year
• Considering a paper concerning the
initiatives undertaken by the internal audit
function to further develop the team and
increase collaboration across the Group’s
businesses
• Receiving and considering reports from the
Head of Internal Audit and Risk concerning
the work undertaken by the internal audit
function, including in relation to the
function’s ongoing quality assurance and
improvement programme
• Receiving and considering the output of the
External Quality Assurance review of the
internal audit function
• Reviewing and approving the Company’s
internal audit charter
• Reviewing the Committee’s effectiveness
following an externally facilitated
performance evaluation
• Reviewing the Committee’s terms of
reference
• Reviewing and approving the Group’s Tax
Strategy for the 2023 financial year
• Considering incoming regulatory reforms and
the Company’s proposed in response to the
BEIS consultation ‘Restoring trust in audit
and corporate governance’
• Considering a letter from the FRC’s Conduct
Committee relating to its limited scope
review of the Company’s 2023 Annual Report
• Receiving training on proposed regulatory
and governance changes, corporate
reporting, and accounting
Risk management, internal
controls and fraud risk
Audit matters Governance and other
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Internal audit
The work of the internal audit function provides
the Committee with a further means of
monitoring the processes and actions to manage
and mitigate those risks identified as posing the
greatest threat to the Company.
The scope of work covers all systems and
activities of the Group and work is prioritised
according to the Company’s risk profile. The
internal audit plan is approved by the Committee
annually and is reviewed regularly thereafter to
ensure that it continues to be fit for purpose and
to enable the Committee to assess how internal
audit is delivering against the plan.
The quality and effectiveness of the internal audit
function’s work is monitored continually using a
variety of formal and informal inputs, including
discussions with management, reviews and
assessments of the quality of testing results and
reporting, questionnaires, and feedback from the
external auditors. This year, an externally
facilitated evaluation of the effectiveness of the
internal audit function was undertaken by a
thirdparty.
The external audit partner and the Head of
Internal Audit and Risk attend and table reports at
each scheduled Audit Committee meeting, which
ensures that the Committee members have the
opportunity to provide real-time feedback and,
where appropriate, challenge in relation to all
audit related matters. The internal audit reports
include details of the audit findings, the relevant
management actions required in order to address
any issues arising, as well as updates on
management’s progress in addressing any
outstanding recommendations from previously
reported findings. The reports also highlight any
significant issues relating to the processes for
controlling the activities of the Group and the
adequacy and effectiveness of such processes.
A detailed questionnaire is circulated annually to
gather feedback from a broad range of internal
stakeholders, including directors and senior
management at Group and business area levels
who have regular contact with the internal audit
function. In 2023, the questionnaire covered a
total of 35 different aspects of the internal audit
function, including: purpose, authority and
responsibility; independence, objectivity and
proficiency; quality assurance processes;
adequacy of resources; auditors’ skills and
capabilities; and the quality of reporting. Taking
allof these elements into account, the Committee
concluded that the Internal Audit function
continued to be effective, efficient and
appropriately resourced.
The Head of Internal Audit and Risk has direct
access to the Committee Chair, with whom a
number of meetings were held during the year
outside formal Committee meetings. The Chair
ofthe Committee also liaises with the CFO as
necessary to ensure robust oversight and
challenge in relation to financial control and risk
management and to ensure that the Committee
iskept informed of any changes in response to
new issues or changing circumstances.
In 2023, the Committee considered an external
quality assessment report on the Internal Audit
function. The findings of the report were positive,
revealing that the function benefitted from
support from the Board, had embedded quality
assurance processes, and engaged effectively
with the business while maintaining
independence and objectivity. The report outlined
actions to further strengthen and mature the
Internal Audit function, all of which will be
addressed as part of the function’s future work
programme. The Committee will carry out an
internal effectiveness review of the Internal Audit
function in 2024.
External auditors
An important part of the Committee’s work
consists of overseeing the Group’s relationship
with the external auditors. The Committee is
responsible for ensuring that the three-way
relationship between the Committee, the external
auditors and the Company’s management is
appropriate and that the independence, quality,
rigour, and challenge of the external audit process
is maintained.
As part of its decision making process concerning
whether to tender, offer, or continue an audit
engagement, there are a number of key
considerations that the Committee takes into
account, the principal elements of which are set
out below and on pages 120 to 121.
Conflicts of interest
In assessing the independence of the auditors
from the Company, the Committee takes into
account the information and assurances provided
by the auditors confirming that all its partners and
staff involved with the audit are independent of
any links to the Company.
PwC confirmed during the year that all its
partners and staff complied with its ethics and
independence policies and procedures which are
consistent with the FRC’s Revised Ethical Standard
(2019) and other relevant regulatory and
professional requirements, including that none of
its employees working on Bunzl’s audit hold any
shares in Bunzl plc. PwC is required to provide an
independence confirmation letter at the
completion stage of the audit, including any
relationships that may reasonably be thought to
have an impact on its independence and the
integrity and objectivity of the audit engagement
partner and the audit staff.
Non-audit services
Bunzl has a detailed policy relating to the
provision of non-audit services by the external
auditors which is overseen by the Committee.
It is the Company’s policy to assess the non-audit
services to be performed by the Company’s
auditors on a case-by-case basis to ensure
adherence to the prevailing ethical standards
andregulations.
Principally, Bunzl uses other firms to provide
non-audit services. However, if the provision of
aservice by the Company’s auditors is permitted
and adequate safeguards are in place, it is
sometimes appropriate for this additional work
tobe carried out by the Company’s auditors.
Details of the fees paid to the external auditors
in2023 in respect of the audit and for non-audit
services are set out in Note 5 to the consolidated
financial statements. The fees relating to
non-audit services work in 2023 equated to 7.2%
of the fees relating to audit services.
Tenure and effectiveness
The Committee takes into account the tenure of
the auditors in addition to the results of its review
of the effectiveness of the external auditors and
considers whether there should be a full tender
process, either as a result of that review or as may
be required by the relevant regulations. As
previously mentioned, a tender process for the
external audit was undertaken in 2023 and an
overview of this process can be found on the
following page. There are no contractual
obligations restricting the Committee’s choice of
external auditors. The Company confirms that it
has complied with the provisions of the CMA
Order for the 2023 financial year.
Given the continuing effectiveness of PwC in its
role as external auditors, the Committee believes
it is in the best interests of shareholders for PwC
to remain in the role for the next year. Neil Grimes
took over the position as audit partner with effect
from 1 January 2019 and remained the audit
partner throughout 2023. Having acted as audit
partner to the Company for five years, Neil Grimes
will rotate off as audit partner in 2024, being
replaced by Simon Morley, in line with the Auditing
Practices Board’s Ethical Standards.
The Committee was satisfied with the results of its
review of the external auditors’ activities, and
performance throughout the tender process,
during the year. The Committee has therefore
recommended to the Board, that a resolution
proposing the reappointment of PwC as external
auditors for the year ending 31 December 2024
be put to shareholders at the forthcoming AGM.
Additional information on the 2023 external
auditor effectiveness review can be found on
page 121.
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AUDIT COMMITTEE REPORT continued
External audit tender process
Tender response requirements
The Audit Committee Chair reviewed and
approved the invitation to tender letter and
tender response requirements. Large and
challenger firms were invited to participate in the
tender process; however, due to the size and
geographical spread of the Group, none of the
challenger firms accepted the invitation.
Participating firms were required to submit a draft
audit plan and audit proposal.
Draft audit plan
• Demonstrates an understanding of Bunzl’s
business and risks
• Outlines a proposed audit approach,
specifically considering the 2024 half year
review and year end audit
• Includes an audit plan of the Company’s
non-financial data
• Outlines an approach to auditing specific
business geographies including North
America, Continental Europe and the UK
Audit proposal
• Demonstrates capability to serve clients of
large and international scope of similar
complexity to Bunzl
• Details the experience and technical
capabilities of the service teams
• Demonstrates independence and quality,
including the FRC audit quality record
• Outlines the firm’s approach to resolving
accounting and financial reporting issues
• Outlines the firm’s available expertise relating
to the reporting of sustainability and other
non-financial information
The draft audit plans and the audit proposals
were a key source of information outlining the
capability of shortlisted firms and were used by
the Committee and Selection Panel in the
evaluation process.
Scope
Bunzl is required to undertake an external audit tender every
10years and rotate audit firms every 20 years. Given PwC
wasappointed in 2014, the Audit Committee initiated and
supervised a competitive tender process for the Company’s
external audit. The Committee approved a project plan for the
tender and the selection criteria that would be used.
A Selection Panel comprising the individuals listed below was
established to facilitate the tender process:
Members
Lloyd Pitchford Chair of the Audit Committee
Peter Ventress Chairman of the Board
Vin Murria OBE Non-executive director
Pam Kirby Non-executive director
Richard Howes Chief Financial Officer
Ian Burrows Group Financial Controller
The Selection Panel was responsible for identifying audit firms to
potentially participate in the tender and subsequently evaluating
participating firms’ performance using transparent and
non-discriminatory criteria. Committee members were involved
throughout the tender process, with regular updates being
provided by the Selection Panel. Participating firms were
provided with an information pack covering key information
about the Group and were provided access to discussions with
senior managers at Group and local business level.
Evaluation
All members of the Selection Panel attended oral presentations
by candidate firms held at the Bunzl plc registered office on
9June 2023.
The resources that were available to the Selection Panel in the
evaluation process included the proposal documents received
from the three candidate firms, the feedback received from
Bunzl management following the meetings with each firms’
representatives, an extract from the FRC’s published quality
reviews of each firm and an analysis of the fees proposed by
each firm in relation to proposed audit scopes.
The Selection Panel evaluated the proposals according to five
non-financialcriteria:
• audit firm capability and service delivery;
• audit team capability;
• understanding our business;
• audit approach and materiality; and
• audit quality.
The candidate firm fee proposals were also considered in the
context of whether they were competitive and offered strong
value to Bunzl, although the principal focus of the evaluation
wason maximising future audit quality.
Decision
A report setting out the results of the evaluation was presented
to the Committee by the Selection Panel.
Having considered the report, the Committee submitted two
possible audit firm options to the Board, with PwC being the
preferred candidate.
Key factors in the decision to recommend the reappointment of PwC
included:
• strong performance against the evaluation criteria;
• continuity in the audit approach and experience of working
with Bunzl;
• understanding of Bunzl’s culture and decentralised business;
• a demonstrable desire to evolve and improve the existing audit
approach; and
• detailed improvement proposals and recommendations to the
non-financial audit approach.
The recommendation made by the Committee to the Board was
free from third party influence and there were no contractual
restrictions on the choice of auditor.
After due consideration, the Board approved the reappointment
of PwC as the Company’ statutory auditors for the 2024 financial
year. The reappointment is subject to shareholder approval at
the Company’s 2024 AGM.
The Committee will continue to undertake annual effectiveness
reviews of the external auditors’ performance and consider the
FRC’s annual Audit Quality Inspection and Supervision reports.
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PwC presented the Committee with its detailed audit plan for
the forthcoming financial year, which outlined its audit scope,
planning materiality and its assessment of key audit risks. The
identification of key audit risks is critical in the overall
effectiveness of the external audit process.
In assessing the adequacy of the audit plan, the Committee
considers and, where necessary, challenges the auditors on
how far the scope of the audit addresses the Board’s
assessment of risks.
Prior to the Board’s approval of the annual financial statements,
the Committee provided the Board with its views on the
outcome of the statutory audit. Such feedback generally covers:
the outcome of the auditors’ assessment of key audit matters;
management’s key accounting issues and judgements; other
areas of audit focus; and how the statutory audit has
contributed to the integrity of the financial reporting process.
The Committee also discusses the outcome of any quality
monitoring processes that may have been undertaken by the
auditors’ own firm, including any lessons learnt and the actions
taken to address those areas identified for improvement.
The Committee was provided with updates on PwC’s progress
against the audit scope at subsequent Committee meetings,
providing Committee members with the opportunity to
challenge management and PwC and raise questions where
necessary.
Regular dialogue between the Committee and the auditors
ensures that any significant issues are identified, and the
appropriate audit responses are discussed, at the earliest
opportunity. The external auditors also have direct access to the
Chair of the Committee who held a number of meetings with
PwC during the year outside formal Committee meetings.
Following the completion of the audit, those involved in the
process were invited to provide feedback on PwC’s
performance. This involved the completion of a questionnaire
by the Committee members, key members of senior
management and those who regularly provide input into the
Committee or have regular contact with the auditors.
The questionnaire covered a total of 24 different aspects of the
external audit process, grouped under four separate headings:
the robustness of the audit process; the quality of delivery; the
quality of people and service; and the quality of reporting. The
responses were collated and a summary was presented to the
Committee for consideration.
Based on the feedback received and the results of the Committee’s ongoing audit monitoring throughout the year, the Committee
concluded that PwC had demonstrated appropriate focus and challenge on the primary areas of the audit and had applied robust
challenge and scepticism throughout the process, with additional measures for further enhancement encouraged.
As part of the ongoing monitoring process, the Committee
considers the results of any periodic reviews by the FRC’s Audit
Quality Review Team of PwC’s audit of the Company, as well as
the results of the FRC’s reviews of PwC’s audits more broadly,
and challenges PwC to ensure continuous improvement.
During the year, private meetings were held between the
Committee and PwC without management present to
encourage open and honest feedback by both parties on any
matters they wished to raise. This afforded the Committee the
opportunity to obtain greater insight concerning the extent to
which management’s analysis and presentation of information
had been challenged by the auditors.
Effectiveness of the statutory external audit process
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DIRECTORS’ REMUNERATION REPORT
Bunzl delivered a strong
performance against a
backdrop of ongoing post-
Covid adjustments in the
market. The 2023 outturns
reflect this, and the
proposed adjustments to
our Policy support our
continuing strategy of
growth.”
Introduction from Vanda Murray
I am pleased to present the Directors’
remuneration report for the year ended
31December 2023. As we are seeking
shareholder approval of our directors’
remuneration policy (‘Policy’) at the forthcoming
AGM, it has been a particularly busy year for the
Committee; we have undertaken an extensive and
very helpful shareholder consultation exercise in
addition to the usual business of setting pay and
assessing performance. It has also been my last
full year as chair of the Committee and I will be
handing over Chair responsibilities to Jacky
Simmonds following the 2024 AGM.
Context of remuneration
2023 continued to provide a challenging
performance context for Bunzl. The Group has
faced the dual headwinds of ongoing post-
pandemic product deflation in some parts of the
world and continuing high cost inflation in others.
We have also been managing the impact of a
continuing tight labour market and the pressures
of a cost of living crisis which has impacted
consumer demand for some products and
therefore customer behaviour.
Amidst all these challenges Bunzl’s business
performance was strong. Although the pressure
of deflation and the continuation of post-Covid
normalisation meant that revenues were slightly
down, disciplined cost management coupled with
a strong focus on margin and working capital
meant that we improved our adjusted operating
profit by 6.2% at constant exchange.
We were also able to make significant progress
with our strategic objectives. 19 acquisitions
werecompleted during the year, and with the
acquisition of Pamark in January 2024 we have
added two more countries to our global presence.
We continued our progress against our
sustainability goals, including the expansion
ofour audit programme in high risk countries,
theengagement of our key suppliers on the
measurement of scope 3 carbon emissions,
andthe increase in leadership roles occupied
byfemales.
In summary, the Group has delivered another
strong set of all-round business results, and this
has been reflected in the outturns for both the
annual bonus, the final performance shares
granted in 2020, and the first cycle of the
Restricted Share Awards granted in April 2021.
Performance and reward for 2023
Annual bonus
Annual bonus payments were based on a
combination of key financial measures (70%)
comprising adjusted earnings per share (‘eps’),
return on average operating capital (‘RAOC’) and
operating cash flow, with 20% based on personal
objectives and 10% on ESG objectives. In setting
our incentive targets, we have regard to the
performance potential of the different parts of
the business and of the whole Group. The
on-target performance level for the financial
elements of the bonus for 2023 was set at, or
close to, the budgeted level of performance. The
personal and ESG objectives selected are closely
aligned to the strategic priorities for the business
and are clearly measurable.
The Committee’s evaluation of the annual bonus
targets resulted in a payment of 89.8% of
maximum for Frank van Zanten and 89.8% of
maximum for Richard Howes. As outlined above,
this was a strong all-round performance from the
business and the leadership team and the
Committee is confident that the variable pay
awarded has been aligned with this performance.
On the financial elements, no discretion was
applied by the Committee to adjust the bonus
outcomes, as overall payments reflected business
performance. The Committee conducted a
detailed review of the evidence to support the
evaluation of the personal and ESG objectives.
Inline with the Policy, 50% of the annual bonuses
will be delivered in shares, subject to a three year
deferral period.
Vanda Murray OBE
Chair of the Remuneration
Committee
Long Term Incentive Plans (‘LTIPs’)
Under the previous 2020 Policy, our practice was
to grant both market value share options (LTIP A)
and performance shares (LTIP B). Performance
shares were granted biannually with half the
award subject to eps growth and half to relative
Total Shareholder Return. The eps element of the
awards granted in April and October 2020
concluded on 31 December 2022 and was
reported in last year’s report. The TSR element
concluded in the 2023 financial year based on
performance to 31 March and 30 September
2023. Bunzl’s TSR of 68.7% and 30.2% respectively
resulted in vestings of 100% (April 2020 award
and 75.19% (October 2020 award). As noted last
year, the Committee was also satisfied that there
had been no ‘windfall’ gain in these awards as the
original grants were made in both the spring and
the autumn and the average grant prices during
2020 were less than 10% below 2019 prices.
The first Restricted Share Awards (‘RSAs’) were
granted in 2021 and will vest in April 2024 based
on satisfaction of the performance underpin (as
worded in the 2021 policy) relating to the period 1
January 2021 to 31 December 2023. Having
reviewed the wide range of financial and non-
financial metrics in the underpin and having
identified no material underperformance, risk
issues or regulatory failures, I can confirm that the
Committee has determined that these shares
should vest in full. Specific factors considered in
assessing the underpin for this award included:
• Financial health of the business (revenue,
profitability, cashflow, returns)
• Delivery of strategic priorities
• Stakeholder experience
• Progress towards ESG goals
More detail can be found on page 140
Shareholders should note that reporting
requirements mean that both the 2020 LTIP B
awards and the 2021 restricted share awards are
included in the Single Figure table for 2023 in this
report. This means that the total remuneration
shown for both directors is artificially high this
year. This will be normalised in 2024’s report.
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Review of the directors’
remuneration policy
Background
Frank van Zanten was appointed as CEO in 2016
and, under his tenure, he has built a very capable
leadership team containing broad experience and
significant market and sector expertise. The
consistent and proven compounding strategy
based on growing organically (by expanding and
developing business with existing customers and
gaining new revenue with additional ones),
continuously making operating model
improvements and applying strong discipline in
selecting the right acquisitions has driven
geographic and market expansion and
significantly increased the size and scale of the
Group. Specifically:
• Bunzl now has a presence in 33 countries, in six
core market sectors with approximately 150
operating companies and thousands of
suppliers globally. Almost 60% of revenue is
generated in North America.
• The Group has made over 200 acquisitions
since 2004 with the annual spend reaching
£468m in 2023. There have been 114 high
quality acquisitions and a total committed
acquisition spend of over £3.1bn since 2015.
The pipeline remains active and the consistent
quality of our cash generation and our strong
balance sheet provide us with headroom for
further acquisitions and wider capital
allocationoptions.
• Since 2015, revenue and adjusted operating
profit increased by more than 80% and annual
dividend growth has been maintained for 31
years. Market value has increased by over 70%
and shareholder return by almost 80%
• The Group has also made significant progress
towards its objectives on sustainability,
centredaround some clear public
commitments. This includes diversity and
inclusion, with a significant improvement in the
proportion of leadership roles occupied by
females, which is now over 22%.
of our investors raised with us whether a hybrid
structure (granting both performance shares and
restricted shares) had been considered. While a
hybrid structure provides the benefits of both
performance assessment and stewardship, it
adds complexity and, at the current time, remains
rare in the UK. After some consideration, the
Committee decided that such an approach was
not preferred for Bunzl at this time but we will
continue to monitor progress and market practice
in this area with interest.
I set out below more detail on the proposed
changes alongside views received from
shareholders during the consultation exercise.
1. Incentive quantum increases
The Committee considered the strong
performance of the business as set out above,
theindividual performance of members of the
leadership team, the pipeline of succession talent
and Bunzl’s ability to recruit in a highly
competitive international labour market when
undertaking the current review.
Our review showed that a significant gap had
developed between the Company and the wider
market with regards to total remuneration. In
particular, the value of the key elements of
variable pay are seen as trailing the market. As
such, the Committee proposes the following
policy adjustments:
Current
Annual
Bonus
maximum
Proposed
Annual
Bonus
maximum
Current
RSA
maximum
Proposed
RSA
maximum
CEO 180% 200% 125% 175%
CFO 160% 175% 100% 125%
External benchmarking data was used to help
provide various reference points to assist the
Committee with determining the competitiveness
of the current packages of the executive directors.
Despite being a truly global business with the
majority of our revenue and profit coming from
the US and the need to compete for US talent at
all levels (where incentive quantum is significantly
higher than in the UK), the Board recognises that
Bunzl is headquartered and listed in the UK and
therefore comparison with other global FTSE
companies remains appropriate. In this context,
the Committee considered other FTSE 11-100
companies (excluding financial services) with
significant international and US presence (i.e.
based on those companies with more than 20%
ofrevenue generated from North America). At the
time of the review Bunzl was ranked at c.40 in the
FTSE 100 and has circa 60% of revenue coming
from North America. The proposed incentive
levels are in line with the median of our chosen
benchmarking peer group.
The gap in incentive quantum currently partly
reflects the increased size and scale of Bunzl since
the last Policy was approved but also the approach
to setting quantum when RSAs were first
introduced in 2021. At the time, Restricted Shares
replaced dual grants of performance shares and
share options and a conservative approach was
taken which resulted in a relatively modest
restricted share award exchange. For the CEO, this
involved replacing share options (175% of salary)
and performance shares (225% of salary) with a
single 125% of salary restricted share grant. Since
2017, the performance shares have on average
vested at 62% and share options at 99%. The
Committee is satisfied that the proposed Policy
incentive levels reflect a more appropriate
exchange and are in line with market norms.
While Restricted Shares provide greater certainty,
we consider them to be variable rather than fixed
in nature as quantum can be scaled back either
atgrant or at vesting (including to zero) through
testing of the underpin. Furthermore, Restricted
Shares are long term in nature (value delivered
after five years) and their value mirrors the rise
and fall in share price, thereby providing long-
term shareholder alignment.
Reflecting the comments received from a small
minority of shareholders, the Committee has
decided, for 2024, not to operate at the proposed
Policy levels in respect of the Annual Bonus, but to
instead retain the bonus maxima at 180% of salary
for the Chief Executive Officer and 160% of salary
for the Chief Financial Officer, with an increase to
the maxima expected to apply from 2025.
Changes to Policy proposed for 2024
The Committee has reviewed directors’
remuneration ahead of the binding shareholder
vote at the 2024 AGM. We sought views from
ourlargest shareholders and the major proxy
agencies and are grateful for the feedback
received which has helped revise and shape
ourproposals.
In overall terms, the Committee has concluded
that the policy framework introduced in 2021
remains appropriate, and specifically that
Restricted Share Awards, which were first
introduced then, continue to be instrumental in
ensuring that the leaders of the business focus
onactions that deliver long-term growth in an
unpredictable market context. They have created
greater simplicity, clarity and predictability of
outcome and, importantly, they help to
discourage any actions which unduly focus on
short-term impacts but instead encourage a
mindset which is aligned to the longer-term
shareholder experience through value creation.
The Committee also concluded that the triennial
Policy review should provide the opportunity to
assess whether the quantum remains sufficiently
competitive against the market, particularly given
the requirement to attract and retain first class
talent in a global context. We have proposed
changes in quantum for the annual bonus and
Restricted Share Award levels for both the Chief
Executive Officer and Chief Financial Officer in
order to reflect the increasing scale, complexity
and performance of the business, and to align
them with the market. Alongside this, a more
robust underpin for the RSAs will apply from
2024so that it is clearer how the awards have
been assessed.
The policy review was concluded at a time when
there has been much discussion regarding
whether the current state of executive
remuneration for UK-listed companies, and in
particular, those with significant US influence and
exposure such as ours, needs a reset. This
includes various calls from stakeholders for UK
pay to become more flexible in terms of both
quantum and structure. In this regard, a number
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DIRECTORS’ REMUNERATION REPORT continued
2. A more robust performance underpin
For the first awards to be granted under the 2024 Policy, the performance underpin will be reorganised
so that a formal framework is established upfront which will set out clearly for each award the key
elements which will need to be assessed for the award to vest. As is current policy, the Committee will
review specific indicators to help form a view of ‘in the round’ performance. In addition, the Committee
has the discretion to scale back awards (including to zero) if it concludes there is material
underperformance over the course of the vesting period.
Factors to be considered (not limited to)
Financial health of
the business,
considering key
financial indicators
• Revenue growth
• Operating margin
• Adjusted earnings per share
• Return on capital (RAOC/ROIC)
• Cash conversion
• Balance sheet strength
Strategic priorities Delivery of key strategic objectives over the vesting period including
operational and individual performance
Stakeholder
experience
Consideration of our key stakeholders including employees, customers,
suppliers and shareholders
ESG progress Progress towards key achievement of ESG objectives including climate change
ambitions, ethical supply, investing in our people and diversity
The new framework provides the Committee with a better defined and more rigorous process when
assessing vesting levels, and more clarity to participants and investors. The framework provides the
same broad focus on overarching performance but now focuses more explicitly on the key indicators
reflecting financial health (including return on capital), strategic priorities, stakeholder experience and
ESG progress.
In assessing the stakeholder experience, the Committee will also consider the return to shareholders in
the form of the dividend policy for a particular year.
3. Higher shareholding guidelines
Reflecting on the proposed increase to the RSA grant level, the Committee has agreed to increase the
in-employment shareholding guideline from 300% to 350% of salary for the Chief Executive Officer and
from 200% to 250% of salary for the Chief Financial Officer The new guidelines are double the proposed
restricted share award grant levels. This will provide further alignment between executives and
shareholders. The post-cessation guideline of 300% and 200% of salary shall remain unchanged.
Employee Pay
The Committee always considers the broader
context of employee pay across the Group when
reviewing and implementing the policy for
directors. It closely monitors base pay increases,
bonus awards and other pay elements, including
“one off” awards such as the cost of living
payments made in 2022. In the broader context,
itis worth noting that almost 8,500 employees
across the Group will receive a bonus for 2023.
Inaddition, some of the increases in quantum
proposed for the Executive Directors in the new
policy will also apply to other members of the
senior leadership team. As required by the
Regulations we have again disclosed in this year’s
Directors’ remuneration report the ratio between
the Chief Executive Officer’s remuneration and
the median, lower quartile and upper quartile of
UK employees.
Implementing the policy for the 2024
financial year
Base salary
The base salaries for the executive directors,
Frank van Zanten and Richard Howes, have been
increased by 4%, effective from 1 January 2024.
Both these increases are lower than those
budgeted for the Bunzl plc head office and UK
leadership team which were 5%. The average pay
awards for the Group leadership team ranged
from 3.5% to 5.7% excluding market adjustments.
Annual bonus
For the 2024 financial year, as stated above, the
Committee has elected not to implement the
policy maximum awards, and the maximum
annual bonus opportunity will remain unchanged
at 180% of base salary for the Chief Executive
Officer and 160% for the Chief Financial Officer,
with on-target bonus at 50% of the maximum.
The annual bonus performance measures
continue to be a balanced scorecard of key
financial metrics – adjusted eps, RAOC and
operating cash flow. For 2024, following
shareholder feedback, the Committee has slightly
increased the weighting given to RAOC. 20% of
the bonus opportunity will be dependent on
personal performance linked to certain specified
strategic non-financial goals and again, 10% of the
opportunity for both directors will be dependent
on the achievement of specific ESG objectives,
based on the four key pillars of the transition to
Alternative Products, Climate Change, Ethical
Sourcing, and Diversity. The objectives agreed
for2024 are a clear build on those used for the
2023 targets and reflect the long-term nature
ofthe roadmap.
50% of any bonus awarded will be deferred into
shares for a period of three years.
LTIP
Subject to the approval of the Policy, the
Committee expects to make further grants of
Restricted Shares to the executive directors and
other participants. These will vest in 2027, subject
to continued employment and the assessment of
the underpin. Vested awards will be subject to a
two-year holding period. The Committee may
scale back the awards (including to zero) if it is not
satisfied that the underpin has been met.
Priorities for 2024
I am confident that if the proposed revisions to
our Policy are approved, then the right reward
framework will be in place to support the next
phase of growth for Bunzl, delivered by a
motivated and incentivised leadership team which
is focused on taking the right longer-term
decisions. Whilst the geo-political and economic
outlook is still uncertain, Bunzl is well positioned
to take advantage of growth opportunities as they
arise, across the full range of our geographies and
market sectors. The Committee will also continue
to monitor external market trends and
developments in executive pay with interest.
Conclusions
Despite the market headwinds, this has been
another strong year of performance and we see
significant opportunities for further growth
moving forward. The Committee’s focus has been
to incentivise leadership appropriately to
recognise significant performance and growth of
the business but also focus them on long term
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The responsibilities and operation
ofthe Committee
Committee membership role and remit
The Committee comprises all of the independent
non-executive directors of the Company. While
neither the Chairman nor the Chief Executive
Officer are members of the Committee, they
attend meetings by invitation. The Director of
Group Human Resources also attends meetings.
The Committee’s terms of reference, which were
reviewed by both the Committee and the Board in
2023, but remain unchanged, are available on the
Company’s website, www.bunzl.com.
No director plays any part in determining his or
her remuneration. During the year ended 31
December 2023, both the Chief Executive Officer
and the Chairman were consulted and invited to
attend meetings of the Committee but were not
present during any part of the meeting when their
own remuneration was under consideration.
The independent non-executive directors who
were members of the Committee during 2023
arelisted opposite.
The primary role of the Committee is to
determine the framework and broad policy for
the remuneration of the Chairman, the executive
directors of the Board and the senior
management group directly below Board level.
The Committee proposes the directors’
remuneration policy for shareholder approval at
least every three years. It also governs the
implementation of the policy, ensuring that the
remuneration of the executive directors and
senior management supports the sustainable
performance of the business and that it is aligned
with the Company’s shareholders’ interests.
TheCommittee considers market practice,
shareholders’ views and the Group’s broader
remuneration arrangements when setting the
Group’s performance-related incentives and
ensures compliance with UK corporate
governance good practice.
The key responsibilities of the
Committee include:
• ensuring that executive directors and senior
executives are properly incentivised to attract,
retain and fairly reward them for their individual
contribution to the Company, having due
regard to the policies and practices applied to
the rest of the employees within the Group;
• determining the framework and broad policy
for the remuneration of the Chairman and the
executive directors of the Board;
• ensuring that remuneration is aligned with
andsupports the Company’s strategy and
performance, having due regard to the
interests of the shareholders and to the
financial and commercial health of the
Company, while at the same time not
encouraging undue risk taking;
• communicating and discussing any
remuneration issues with the Company’s
stakeholders as and when appropriate;
• setting and reviewing the executive directors’
remuneration and benefits including, but not
limited to, base salary, bonus, long term
incentive plans and retirement benefits;
• ensuring that all remuneration paid to the
executive directors is in accordance with
theCompany’s previously approved
remuneration policy;
• ensuring all contractual terms on termination,
and any payments made, are fair to the
individual and the Company;
• monitoring the policies and practices applied
inrespect of the remuneration of senior
executives directly below Board level and
making recommendations as appropriate;
• overseeing the Company’s long term incentive
plans for all employees; and
• ensuring that provisions relating to disclosure
of remuneration as set out in the relevant
legislation, the Financial Conduct Authority’s
Listing Rules and the Code are fulfilled.
Committee membership
Date of appointment
to the Committee
Vanda Murray 1 February 2015
Lloyd Pitchford 1 March 2017
Stephan Nanninga 1 May 2017
Vin Murria 1 June 2020
Pam Kirby 1 August 2022
Jacky Simmonds 1 March 2023
Meetings
Meetings
eligible to
attend
Meetings
attended
Vanda Murray 4 4/4
Lloyd Pitchford 4
4/4
Stephan Nanninga 4
4/4
Vin Murria 4
4/4
Pam Kirby 4
4/4
Jacky Simmonds* 3
3/3
* Jacky Simmonds was appointed to the Board on 1 March 2023.
Compliance statement
This report has been prepared on behalf of, and
has been approved by the Board. It complies with
Schedule 8 of the Large and Medium-sized
Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended) (the ‘Regulations’),
the Code and the Financial Conduct Authority’s
Listing Rules and takes into account the
accompanying Directors’ Remuneration Reporting
Guidance and the relevant policies of shareholder
representative bodies.
In accordance with the Regulations, at the 2024
AGM the Company will be asking shareholders
toput forward an advisory vote on the Directors’
remuneration report and a binding vote on the
directors’ remuneration policy, as set out
onpages 126 to 134.
value creation for shareholders. In my last year
ascommittee chair I look forward to handing over
to Jacky Simmonds at a point where the reward
framework and strategy is in good health. I would
like to thank shareholders for all their support and
feedback on this and previous policy reviews; it
has been very much appreciated.
In the following pages you will find details of:
• The proposed directors’ remuneration policy
for 2024
• the ‘at a glance’ guide to executive directors’
remuneration for 2023; and
• the annual report on directors’ remuneration
for 2023, including our approach to the
application of the remuneration policy in 2024.
I hope that you will find this report to be clear and
helpful in understanding our remuneration policy
and practices.
Vanda Murray OBE
Chair of the Remuneration Committee
26 February 2024
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DIRECTORS’ REMUNERATION REPORT continued
Directors’ remuneration policy
The 2021 shareholder-approved policy requires renewal at the 2024 AGM. A new Policy will be put to a
binding vote at the 2024 meeting and will be effective from the date of approval. It is expected to remain
in place until its normal renewal which will be the 2027 AGM at the latest.
Objectives of the Policy
The objectives of the new proposed Policy remain unchanged from the current one and are as follows:
• Clarity: maintain transparency, clear alignment with shareholder value and promotion of longer term,
sustained performance. For example, the restricted share plan encourages a focus on the longer
term success of the business;
• Predictability: continue to ensure that targets are stretching (but realistic), the quantum of reward
reflects both Company and individual performance and there are appropriate award caps and
Committee discretions in place. For example, the underpin is broad and encourages the Committee
to focus on ‘in the round’ performance;
• Support for the Company’s business strategy: for example, aligning the executive directors’ and
management’s incentives with the Company’s growth objectives;
• Simplicity: ensure that the remuneration structures avoid unnecessary complexity. For example, the
restricted share plan has only a single annual grant of shares;
• Risk is appropriately managed: variable pay should drive performance within the Company’s risk
appetite and encourage a prudent and balanced approach to the business;
• Alignment to culture: the remuneration principles encourage the behaviour from the executive
directors that the Committee expects to see throughout the business; and
• Proportionality: the link between individual awards, the delivery of strategy and long term
performance of the Group is clear.
In setting the remuneration policy for the executive directors, the Committee also takes into
consideration a number of different factors:
• The Committee applies the principles set out in the Code and also takes into account best practice
guidance issued by the major UK institutional investor bodies, the Financial Conduct Authority
(including the provisions of any applicable remuneration codes) and other relevant organisations;
• The Committee has overall responsibility for the remuneration policies and structures for employees
of the Group as a whole and it reviews remuneration policy on a Group wide basis. When the
Committee determines and reviews the remuneration policy for the executive directors it considers
and compares it against the pay, policy and employment conditions of the rest of the Group to
ensure that there is alignment between the two; and
• The Committee considers the external market in which the Group operates and uses comparator
remuneration data from time to time to inform its decisions. However, the Committee recognises
that such data should be used as a guide only (data can be volatile and may not be directly relevant)
and that there is often a need to phase-in changes over a period of time. The Committee has
reviewed a range of relevant benchmarking data to guide the 2024 review.
• Specifically, it has looked at FTSE 11-100 companies with greater than 20% of revenue generated from
the United States. Thepeer group comprises RS Group, Convatec, Melrose Industries, Smiths Group,
Pearson, Intertek, Smurfit Kappa, Halma, Spirax-Sarco, Burberry, Rolls-Royce, Informa,
Intercontinental Hotels, Croda, WPP, Smith & Nephew, Rentokil, Imperial Brands, Flutter, Ashtead,
Experian, BAE Systems, CRH, Haleon, Compass, National Grid, Reckitt Benckiser and RELX.
The Committee’s overall policy, having had due regard to the factors above, continues to be for a
proportion of total remuneration to be based on variable pay. This is achieved by setting base pay and
benefits by reference to mid-market levels, with annual bonus linked to the achievement of demanding
performance targets and long term incentives which vest over the medium term and are designed
toalign the interests of the directors with those of shareholders and the long term sustainable success
of the business.
Changes to Policy proposed for 2024
The Committee is proposing to make some revisions to the policy, within the current overall framework,
which can be summarised as follows:
1. An increase to the quantum of Annual Bonus and Restricted Share Award levels for both the Chief
Executive Officer and Chief Financial Officer in order to align them with the market and to reflect the
increasing scale, complexity and performance of the business. For the Chief Executive Officer the
Annual Bonus potential increases to 200% of salary (although remains at 180% of salary for 2024)
and the Restricted Share Award increases to 175% of salary. For the Chief Financial Officer the
Annual Bonus potential increases to 175% of salary (although remains at 160% of salary for 2024)
and the Restricted Share Award increases to 125% of salary.
2. A revision to the “underpin” attached to Restricted Share Awards so that it is clearer how that
element of the award will be assessed. See page 146 for more detail.
3. An increase to the in-employment shareholding requirement for both the Chief Executive Officer
and the Chief Financial Officer to 350% and 250% of salary respectively.
4. A minor revision to the process for reviewing the Chairman’s fee whereby the Committee proposes
tocreate alignment with the process for other non-executive Directors and review the fee annually
rather than biennially. More detail on these proposals is contained in the table below.
The Committee conducted a thorough consultation on the proposals with the Group’s key
shareholders. It is very grateful for the positive support received, and for the constructive feedback
which was carefully considered and input into the final proposals outlined below.
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Remuneration policy for executive directors
The following table summarises each element of the remuneration policy for the executive directors,
explaining how each element operates and links to the corporate strategy.
Base salary
Purpose • Recognise knowledge, skills and experience as well as reflect the scope and size of
the role
• Reward individual performance without encouraging undue risk
Operation • Paid in 12 equal monthly instalments during the year
• Normally reviewed annually in December (with any changes usually effective from
January). An out-of-cycle review may be conducted if the Committee determines
that it is appropriate
• Takes into consideration a number of factors including (but not limited to)
individual and Group performance, the size and scope of the individual’s
responsibilities, salary increases across the Group, typical salary levels for
comparable roles using appropriate comparator groups, for example similarly
sized companies with a large international presence
• Pensionable
Maximum
potential
value
• While there is no maximum salary level, salary increases are normally considered
in relation to the salary increases of other employees in the Group and
performance of the individual. Higher salary increases may be made under
certain circumstances, such as when there has been a change in role or
responsibility, a major market movement or when a director has been appointed
to the Board at a lower than typical salary initially
Performance
metrics
• While there are no performance conditions attached to the payment of base
salary, individual performance in the role, as well as the performance of the
Group and achievements related to environmental, social and governance issues,
are all taken into consideration
Annual bonus
Purpose • Incentivise the attainment of annual corporate targets
• Retain and reward high performing employees
• Align with shareholders’ and wider stakeholders’ interests
Operation • Bonus awards are based on performance targets and objectives set by the
Committee for the financial year
• At the end of the performance period, the Committee assesses the extent to
which the performance measures have been achieved. The level of bonus for
each measure is determined by reference to the actual performance against the
relevant performance targets
• Up to half the bonus is paid in cash and the remainder in shares (with the shares
normally deferred for three years under the Deferred Annual Share Bonus
Scheme (‘DASBS’)) in respect of which dividend equivalents may apply to the
extent that such deferred awards vest. If a director resigns during the period of
deferral any outstanding DASBS awards would normally lapse
• Malus and clawback provisions apply and are set out in more detail below,
• Bonus awards are non-pensionable and are payable at the Committee’s
discretion
Maximum
potential
value
• The annual bonus policy maximum is 200% of base salary (175% for the Chief
Financial Officer)
• For 2024, the maximum bonus opportunity will be 180% for the Chief Executive
Officer and 160% for the Chief Financial Officer
• The annual target bonus opportunity is normally set at 50% of the maximum
• The level of annual bonus for threshold performance is up to 25% of the
maximum
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DIRECTORS’ REMUNERATION REPORT continued
Annual bonus
Performance
metrics
Metrics will be set each year by the Committee taking into account the Company’s
key strategic objectives for the year.
For example, bonus metrics may include:
• Financial measures chosen to align bonus outcomes with the underlying financial
performance of the business, such as profit, return on average operating capital
(‘RAOC’) and cash flow;
• Non-financial measures are linked to the achievement of personal goals or certain
specified strategic goals, including environmental, social and governance matters;
• The performance metrics and targets are reviewed each year to ensure that they
remain appropriate. The Committee retains the discretion to set alternative
metrics as appropriate; and
• The specific targets will be disclosed on a retrospective basis following the end of
the financial year unless they are deemed to be commercially sensitive.
The Committee sets targets that are appropriately stretching in the context of the
business outlook and taking into account internal and external factors. The
achievement of quantifiable financial targets will always drive the majority of the
bonus outturn. Targets are set to ensure that there is appropriate alignment
between stakeholder outcomes and to ensure that they do not drive unacceptable
levels of risk taking.
Long term incentives
Purpose • Incentivise long term decision making as the basis for sustainable growth
• Align with shareholders’ interests
• Recruit and retain senior employees across the Group
Operation Executive directors receive restricted share awards as the long term variable
element of remuneration:
• Restricted share awards are discretionary and will normally vest subject to
continued employment and the satisfaction of the underpin after no less than
three years;
• A holding period will apply which means that restricted shares may not ordinarily
be sold until at least five years after the grant date (other than to pay relevant
taxes due on vested awards);
• Malus and clawback provisions apply and are set out in more detail below.
• Dividend equivalents shall accrue in respect of restricted share awards to the
extent that they vest, including in relation to any holding periods; and
• All awards are subject to the discretions contained in the relevant plan rules.
Long term incentives
Maximum
potential
value
• The individual restricted share limit per financial year is 175% of base salary
• The Chief Executive Officer may receive restricted shares per financial year with
aface value of up to 175% of salary
• The Chief Financial Officer may receive restricted shares per financial year with
aface value of up to 125% of salary
Performance
metrics
• Restricted share awards are not subject to performance measures but vesting
issubject to the achievement of an underpin normally reviewed over the three
financial years commencing with the financial year in which awards are granted
• In assessing the underpin, in normal circumstances the Committee may consider
the Group’s overall performance, including financial and non-financial
performance over the course of the vesting period and any material risk/
regulatory failures identified. Specifically, it will seek evidence of positive progress
against the Group’s financial and strategic objectives as follows:
• Financial health of the business, considering financial indicators
• Strategic priorities
• Stakeholder experience
• ESG progress
• In considering these factors, the Committee will assess performance in the round,
with the expectation of full vesting unless there has been a lack of material
progress towards a stated objective, or it has identified material
underperformance over the period. The Committee may scale back the awards
(including to zero) if it is not satisfied the underpin has been met, and there is
nothreshold level of vesting.
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Long term incentives – previous policy applied for awards up to and including December 2020
Purpose • Awards issued under the previous policy with respect to long term incentives
continued to vest until October 2023, and therefore the policy described below
applied for the final time to outturns reported in this report.
Operation • Discretionary biannual grants of executive share option awards and performance
share awards which vest subject to performance conditions measured over three
years and subject to continuous service.
• A malus and clawback facility is in operation under which part or the full amount
of a vested award may be recovered, by a reduction in the amount of any future
bonus, subsisting award, the vesting of any subsisting award or future share
awards and/or a requirement to make a cash payment, for a period of three years
from the relevant performance year, to the extent that the value of a vested
award is subsequently found to have been overstated as a result of a material
misstatement of performance or there has been a significant failure of risk control
or serious misconduct
• Two year post-vesting holding requirement for shares that vest, net of sales to
settle tax or other withholding due on vesting or exercise of awards
• If any executive resigns during the period before vesting, awards would
normallylapse
• All awards are subject to the discretions contained in the relevant plan rules
Maximum
potential
value
Executive share options
• Maximum annual award of 225% of base salary
• Annual grant levels for executive directors will not normally exceed 200% of
basesalary
• For 2020, grants did not exceed 200% of base salary for the incumbent executive
directors
Performance shares
• Maximum annual award of 175% of base salary
• For 2020, awards did not exceed 150% of base salary for the Chief Executive
Officer and 120% for the Chief Financial Officer
Long term incentives – previous policy applied for awards up to and including December 2020
Performance
metrics
• Performance and service conditions must be met over a three year performance
period. Metrics and targets are set each year by the Committee. The current
metrics are as follows:
Executive share options
• The eps performance measure relates to the absolute growth in the Company’s
eps against the targets set for the performance period
• The vesting is scaled as follows:
− no vesting for performance below the threshold target;
− 25% of an award will vest for achieving the threshold target;
− 100% of an award will vest for achieving or exceeding the maximum target; and
− for performance between these targets, the level of vesting will vary on a
straight line sliding scale.
• The Committee annually reviews the performance conditions outlined above
and,in line with the rules of the LTIP, reserves the right to set different targets
forforthcoming annual grants provided it is deemed that the relevant
performance conditions remain appropriately challenging in the prevailing
economic environment
Performance shares
• The TSR performance measure (50% of the total award) compares a combination
of both the Company’s share price and dividend performance during the
performance period against a comparator group of the constituents of the FTSE
11–100. It aligns the rewards received by executives with the returns received
byshareholders
• The other 50% of the award is subject to an eps performance measure which
relates to the absolute growth in the Company’s eps against the targets set for
the performance period
• The vesting for both performance measures is scaled as follows:
− no vesting for performance below median performance (TSR) or below the
threshold target (eps);
− 25% of an award will vest for achieving median performance (TSR) or the
threshold target (eps);
− 100% of an award will vest for achieving or exceeding upper quartile
performance (TSR) or the maximum target (eps); and
− for performance between these targets, the level of vesting will vary on a
straight line sliding scale.
• The Committee annually reviews the performance conditions outlined above and,
in line with the rules of the LTIP, reserves the right to set different targets for
forthcoming annual grants provided it is deemed that the relevant performance
conditions remain appropriately challenging in the prevailing economic
environment
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DIRECTORS’ REMUNERATION REPORT continued
All employee share plans
Purpose • Encourage employees, including the executive directors, to build a shareholding
through the operation of all employee share plans such as the HM Revenue &
Customs (‘HMRC’) tax advantaged Sharesave Scheme and the Internal Revenue
Service (‘IRS’) approved Employee Stock Purchase Plan (US) (‘ESPP’) in the US
Operation • Executive directors may participate in all employee schemes on the same basis as
other eligible employees
• The Sharesave Scheme has standard terms under which participants can
normally enter into a savings contract, over a period of either three or five years,
in return for which they are granted options to acquire shares at a discount of up
to 20% of the market price prevailing on the day immediately preceding the date
of invitation to apply for the option. Options are normally exercisable either three
or five years after they have been granted
Maximum
potential
value
• In the UK, the Sharesave Scheme is linked to a contract for monthly savings
withinthe HMRC limits over a period of either three or five years (currently £500
per month)
Performance
metrics
• Service conditions apply
Retirement benefits
Purpose • Provision of retirement benefits
• Retain executive directors
Operation • All defined benefit pension plans in the Group have been closed to new entrants
since 2003 with any new recruits being offered defined contribution retirement
arrangements and/or a pension allowance.
• Pension contributions and allowances are normally paid monthly
Maximum
potential
value
• Company pension contributions to defined contribution retirement arrangements
or cash allowances are capped at 5% of base salary for current and new executive
directors
Performance
metrics
• Not applicable
Other benefits
Purpose • Provision of competitive benefits which helps to recruit and retain
executivedirectors
Operation • Benefits may include a car allowance or a car which may be fully expensed,
various insurances such as life, disability and medical and, in some jurisdictions,
club expenses and other benefits provided from time to time.
• Some benefits may only be provided to reflect hybrid working and/or overseas
relocation, such as removal expenses, and in the case of an international
relocation might also include fees for accommodation, children’s schooling, home
leave, tax equalisation and professional advice etc.
Maximum
potential
value
• The value of benefits is based on the cost to the Company and varies according to
individual circumstances. For example, the cost of medical insurance varies
according to family circumstances and the jurisdiction in which the family is based
Performance
metrics
• Not applicable
Shareholding requirement
Purpose • Strengthen the alignment between the interests of the executive directors and
those of shareholders
Operation • In employment guideline: executive directors will normally be expected to retain
shares, net of sales to settle tax, through the exercise of awards under the DASBS
and the LTIP until they attain the required holding. Three years is the typical
expectation for executives who are promoted from within the Company to
achieve the required shareholding. It is recognised that a longer time period may
be required for externally recruited executives to achieve the expected
shareholding. Unvested deferred shares held under the DASBS will count towards
the guideline (net of the expected sales for tax that would apply on vesting)
• Post-cessation guideline: Upon cessation of employment, executive directors
should maintain a shareholding for two years thereafter at a level equal to the
lower of the in-employment guideline and the number of shares vested as at
cessation (net of tax) under restricted share awards granted.
• Shares held by or to the benefit of an executive director’s spouse, civil partner or
children (or with them as relevant) may count for the purposes of the guidelines.
Maximum
potential
value
• The Chief Executive Officer’s in-employment shareholding requirement is 350% of
base salary. The in-employment requirement for other executive directors is
250% of base salary
• The Chief Executive Officer’s post-employment shareholding requirement is 300%
of salary. The post-employment shareholding requirement for other executive
directors is 200%.
Performance
metrics
• Not applicable
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Fees policy for Chairman and non-executive directors (the ‘NEDS’)
The following table summarises the fees policy for the Chairman and the NEDs.
Fees
Purpose • Provision of a competitive fee to attract NEDs who have a broad range of
experience and skills to oversee the implementation of the Company’s strategy
Operation • Determined in light of market practice and with reference to time commitment
and responsibilities associated with the roles
• Annual fees are paid in 12 equal monthly instalments during the year
• The Senior Independent Director and Chairs of the Audit and Remuneration
Committees are paid an extra fee to reflect their additional responsibilities
• The NEDs and the Chairs are not eligible to receive benefits and do not participate
in pension or incentive plans. Expenses incurred in respect of their duties as
directors of the Company are reimbursed
• The NEDs’ and Chairman’s fees are reviewed annually in January each year,
thelatest review being with effect from January 2024 for NED fees and the
Chairman’sfees
• The Board as a whole considers the policy and structure for the NEDs’ fees on the
recommendation of the Chairman and the Chief Executive Officer. The NEDs do
not participate in discussions on their specific levels of remuneration; the
Chairman’s fees are set by the Committee
Maximum
potential
value
• Determined within the overall aggregate annual limit of £1,500,000 authorised by
shareholders with reference to the Company’s Articles of Association approved at
the 2021 AGM
Performance
metrics
• Not eligible to participate in any performance related elements of remuneration
Taxable
benefits and
expenses
• Taxable expenses incurred in the course of carrying out NED duties are
reimbursed and grossed up to include tax payable
Notes to the Policy Table
Malus and Clawback Provisions
Malus and clawback provisions apply to the cash and deferred elements of the bonus and the RSA
awards. The malus and clawback provisions may be enforced in the event of material misstatement,
errors in assessment of conditions, significant failure of risk control, serious misconduct, corporate
failure (entailing the appointment of an administrator or liquidator) and serious reputational damage or
where there has been a material failure in the management of the company to which the relevant
individual has made a direct contribution. Malus or clawback as relevant may be affected by a reduction
in the amount of any future bonus or subsisting award, the vesting of any subsisting award or future
share award and/or a requirement to make a cash payment. In respect of bonus or deferred bonus the
relevant discovery period expires three years after the end of the relevant performance period. In
respect of RSA awards (and legacy performance shares and options) the relevant discovery period
expires on the third anniversary of the vesting of the awards.
Selection of performance measures and targets
The Committee determines the performance measures, and the weighting of each, applying to the
annual bonus based on the strategic priorities of the Group at the time. The bonus measures in place
normally include the use of profit, RAOC and cash flow measures, but the precise metrics and their
weightings may change from year to year. Each of these measures is aligned with the Group’s key
performance indicators (‘KPIs’) and has been chosen as, alongside growing profitability, a focus on cash
and effective investment of capital are particularly important. The management of capital employed
together with profitability and cash flow ensures the focus on cash generation, enabling the Group to
pay dividends and to support the growth strategy by making acquisitions and reinvesting in the
underlying business. Strategic non-financial goals reward individual contribution to the success of the
Group and allow a focus each year on important operational goals and strategic milestones, with a
focus on the Environmental, Social and Governance agenda. This combination of performance
measures provides a balance relevant to the Group’s business and market conditions as well as
providing a common goal for the executive directors, senior managers and shareholders.
Statement of consideration of shareholder views
The Committee considers shareholder feedback received in relation to the AGM each year and
guidance from shareholder representatives more generally. In addition, the Committee consults
proactively with its major shareholders prior to making significant changes to its policy, as it did this
year when a comprehensive shareholder consultation was undertaken. This was conducted through
meetings, calls and correspondence and the views received helped to shape the policy proposals.
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DIRECTORS’ REMUNERATION REPORT continued
Discretions retained by the Committee in operating the incentive plans
The Committee operates the Group’s various incentive plans according to their respective rules and in
accordance with HMRC and IRS rules where relevant. To ensure the efficient administration of these
plans, the Committee may apply certain operational discretions. These include the following:
• selecting the participants in the plans;
• determining the timing of grants and/or payments;
• determining the quantum of grants, reference pricing basis and/or payments (within the limits set out
in the policy table above);
• determining the extent of vesting based on the assessment of performance, including the vesting
ofrestricted share awards;
• determining the appropriate treatment of leavers and the extent of vesting in the case of the share
based plans;
• determining the extent of vesting of awards under share based plans in the event of a change
ofcontrol;
• making the appropriate adjustments required in certain circumstances (e.g. rights issues, corporate
restructuring events, variation of capital and special dividends);
• determining the appropriate choice of measures, weightings and targets for the annual bonus plan
from year to year, including discretion to amend the bonus outcome, as appropriate; and
• varying the performance conditions applying to share based awards if an event occurs which causes
the Committee to consider that it would be appropriate to amend the performance conditions,
provided the Committee considers the varied conditions are fair and reasonable and not materially
less challenging than the original conditions would have been but for the event in question.
Legacy arrangements
The proposed and previous directors’ remuneration policies give authority to the Company to honour
any commitments entered into with current or former directors (that have been disclosed to
shareholders in previous remuneration reports) or internally promoted future directors (in each case,
such as the payment of a pension or the unwind of legacy share plans). Details of any payments to
former directors will be set out in the relevant remuneration report as they arise.
Executive directors’ external appointments
With the specific approval of the Board in each case, executive directors may accept external
appointments as non-executive directors of other companies and retain any related fees paid to them.
Recruitment of executive directors – approach to remuneration
Executive directors
For the ongoing stability and growth of the Group, it is important to secure, as necessary, the
appointment of high calibre executives to the Board by either external recruitment or internal
promotion. The overarching principles applied by the Committee in developing the remuneration
package will be to set an appropriate base salary together with retirement and other benefits and short
and long term incentives taking into consideration the skills and experience of the individual, the
complexity and breadth of the role, the particular needs and situation of the Group, internal relativities,
the marketplace in which the executive will operate and an individual’s current remuneration package
and location. In addition, the Committee recognises that it may need to meet certain relocation
expenses or expatriate benefits as appropriate.
Any fixed or variable pay awards for new executive directors will not exceed the maximum limits set out
in the policy table above. However, in addition, for external appointments the Committee may consider
offering additional cash and/or share based elements to replace deferred remuneration forfeited by
the individual on leaving their existing employment when it considers these to be in the best interests
of the Company and its shareholders. Such elements, as appropriate, may be made under section 9.4.2
of the Listing Rules and would normally take account of the nature, time horizons and performance
requirements attached to the awards forfeited.
Depending on the timing of the appointment, the Committee may deem it appropriate to set different
annual bonus performance conditions for the first performance year of appointment. A long term
incentive award can be made shortly following an appointment (or as soon as is practical if the
Company is in a close period).
Non-executive directors
On appointment of a new Chairman of the Board or non-executive director, the fees will be set taking
into account the experience and calibre of the individual and the prevailing rates of the other non-
executive directors at the time.
Executive directors’ service contracts
The service contracts for Frank van Zanten and Richard Howes provide for an equal notice period from
the Company and the executive of a maximum 12 months’ notice and any contracts for newly
appointed executive directors will provide for equal notice in the future. The date of each service
contract is noted in the table below:
Date of service contract
Frank van Zanten 13 January 2016
Richard Howes 10 May 2019
Non-executive directors’ terms of appointment
The non-executive directors do not have service contracts with the Company but instead have letters
of appointment. The date of appointment and the most recent re-appointment and the length of
service for each non-executive director are shown in the table below:
Date of
appointment
Date of last
re-appointment
at AGM
Length of service as at
2024 AGM
Peter Ventress 1 June 2019 26 April 2023 4 years 10 months
Vanda Murray 1 February 2015 26 April 2023 9 years 2 months
Lloyd Pitchford 1 March 2017 26 April 2023 7 years 1 month
Stephan Nanninga 1 May 2017 26 April 2023 6 years 11 months
Vin Murria 1 June 2020 26 April 2023 3 years 10 months
Pam Kirby 1 August 2022 26 April 2023 1 year 8 months
Jacky Simmonds 1 March 2023 26 April 2023 1 year 1 month
Note
a) On termination, at any time, a non-executive director is entitled to any accrued but unpaid director’s fees but not to any other
compensation.
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Policy on payment for departure from office
On termination of an executive director’s service contract, the Committee will take into account the
departing director’s duty to mitigate his loss when determining the amount of compensation. The
Committee’s policy in respect of the treatment of executive directors leaving the Group is described
below and is designed to support a smooth transition from the Company taking into account the
interests of shareholders:
Component
of pay
Voluntary resignation or
termination for cause
Departure as a ‘good leaver’ or in other specific
circumstances including on agreed terms
Base salary,
pension and
benefits
Paid for the proportion of
the notice period worked
and any untaken holidays
pro-rated to the leaving
date
Paid up to the date of departure or death, including
any untaken holidays pro-rated to such date. In the
case of ill health, a payment in lieu of notice may be
made and, according to the circumstances, may be
subject to mitigation. In such circumstances some
benefits, such as company car or medical insurance
may be retained until the end of the notice period.
Annual
bonus cash
Cessation of employment
during a bonus year will
normally result in no cash
bonus being paid
Cessation of employment during a bonus year or after
the year end but prior to the normal bonus payment
date will result in cash and deferred bonus being paid
and pro-rated for the relevant portion of the financial
year worked and performance achieved.
Annual
bonus
deferred
shares
Unvested deferred shares
will lapse
In the case of the death of an executive, all deferred
shares will be transferred to the estate as soon as
possible after death. In all other cases, subject to the
discretion of the Committee, unvested deferred shares
will be transferred to the individual on a date
determined by the Committee.
Component
of pay
Voluntary resignation or
termination for cause
Departure as a ‘good leaver’ or in other specific
circumstances including on agreed terms
Restricted
shares
Unvested restricted share
awards will lapse
Subject to the discretion of the Committee, unvested
restricted share awards will normally be retained by
the individual for the remainder of the vesting period,
remain subject to the underpin conditions and will
ordinarily be subject to time pro-ration. Holding period
terms will ordinarily continue to run until (or be set to
expire on or no later than) the second anniversary of
departure from employment, commensurate with the
post-cessation shareholding requirement. However, in
the case of the death of an executive, the Committee
will determine the extent to which the unvested shares
may be exercised within 12 months of the date of
death.
Options
under
Sharesave
As per HMRC regulations As per HMRC regulations.
Other None Disbursements, such as legal costs and outplacement
fees may be paid.
Note
The Committee will have the authority to settle any legal claims against the Company, e.g. for unfair dismissal etc, that might arise on
termination.
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Differences in remuneration policy for executive directors and
employees in general
The main difference in remuneration policy between the executive directors and employees in general
is the split of fixed and performance related pay, such as bonus and long term incentives. Overall the
percentage of performance related pay, in particular longer term incentive pay, is greater for the
executive directors. This reflects that executive directors have more freedom to act and the
consequences of their decisions are likely to have a broader and more far reaching time span of effect
than those decisions made by employees with more limited responsibility. As a consequence only
executive directors, Executive Committee members and other key employees (currently 27 people)
aregranted restricted share awards. Approximately 480 senior managers are granted executive share
option awards on an annual basis, which helps to provide a common focus for management in the
Company’s decentralised organisation structure. In most cases, the annual bonuses are related to
theperformance of individual operating units.
Bonus arrangements vary throughout the Group and are related to the specific role and the country
inwhich the employee operates. The majority of bonus plans have quantitative targets, but the
performance measures and targets vary according to each specific role. Sales representatives often
have annual bonus payments which may be commission based.
When there is a critical mass of employees within a country to make it cost-effective to do so, to
encourage wider employee share ownership, an all employee share plan may be offered. Currently
plans are offered to all employees based in Australia, New Zealand, Canada, Germany, Ireland, the
Netherlands, the US and the UK. In France, employees take part in profit sharing arrangements in
accordance with local regulations.
Retirement and other benefits offered to employees across the Group differ according to the country
inwhich the job is based and the function and seniority of the relevant role.
Statement of consideration of employment conditions elsewhere in the Group
The Committee is provided annually with information on the salaries and proposed increases for the
Executive Committee members and other senior direct reports of the Chief Executive Officer, as well as
data on the average salary increases for leadership teams in each region within the Group. In addition,
the Committee reviews and agrees all grants of executive share options, performance share awards
and restricted share awards.
The Committee considers the general basic salary increase within the geographical regions for the
broader employee population when determining the annual salary increases for the executive directors
and is cognisant of the Group’s overall employment arrangements when reviewing and implementing
the executive directors’ remuneration policy. Members of the Committee held feedback sessions with
employees in all regions and part of the discussion sought the employee’s view on the executive
remuneration approach and application. In addition, the Company monitors employees’ views through
regular employee surveys.
Remuneration scenarios
The remuneration package comprises both core fixed elements (base salary, pension and other
benefits) and performance based variable elements (cash bonus, the DASBS and the LTIP). The
structure of the remuneration packages for on-target and stretch performance for each of the two
executive directors for 2024, in line with the remuneration policy, is illustrated in the bar charts below.
DIRECTORS’ REMUNERATION REPORT continued
32%
26%
22%
1% 31% 46%
1% 37% 36%
1% 23% 44%
96%
4%
Stretch performance
(Total £5,017,290)
Target performance
(Total £4,085,924)
Stretch + 50% share price
increase (Total £5,922,783)
Frank van Zanten
Below threshold performance
(Total £1,343,573)
33%
26%
23% 1% 35% 41%
1% 41% 32%
2% 26%
5%
39%
95%
Stretch performance
( Tota l £2 , 6 41,85 2)
Target performance
(Total £2,103,452)
Stretch + 50% share price
increase (Total £3,062,477)
Richard Howes
Below threshold performance
(Total £723,802)
Salary and benefits
Pension
Bonus (Cash/DASBS)
RSA
Notes
a) Salary represents annual salary for 2024. Benefits such as a car or car allowance and private medical insurance have been included
based on 2023 figures. In the case of Frank van Zanten benefits also include a hybrid working allowance and an education allowance.
b) Stretch performance plus 50% share price increase shows the effect of a 50% growth in the Company share price on the value of the
restricted share awards.
c) Pension represents the value of the annual pension allowance for 2024 for Frank van Zanten and Richard Howes.
d) Below threshold performance comprises salary, benefits, pension with no bonus award and for restricted share awards an
assumption that zero will vest.
e) Target performance comprises annual bonus awarded at target level (i.e. for 2024 at 90% of salary for Frank van Zanten and 80% of
salary for Richard Howes comprised of half cash and half deferred shares under the DASBS) and for restricted share awards an
assumption that 100% will vest.
f) Stretch performance comprises annual bonus awarded at stretch level (i.e. for 2024 at 180% of salary for Frank van Zanten and 160%
of salary for Richard Howes comprised of half cash and half deferred shares under the DASBS) and for restricted share awards an
assumption that 100% will vest.
Vanda Murray OBE
Chair of the Remuneration Committee
26 February 2024
134
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Annual Report 2023
Directors’
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2023 remuneration at a glance
Remuneration principles
• Materially differentiate reward
according toperformance.
• Reward competitively to attract
and retain the best talent.
• Breakdown of fixed and
variablepay to be appropriate
to each role.
• Framework to be transparent
with clear lineof sight from
performance to
individualoutcomes.
Proposed Policy changes for 2024
• Maximum annual bonus incentive quantum increasing from180% to 200%
of salary for Chief Executive Officer andfrom 160% to 175% of salary for
Chief Financial Officer. This increase to quantum will not be implemented
in 2024 and maximum bonus incentives will remain at 180% and 160% for
the Chief Executive Officer and Chief Financial Officer respectively.
• Maximum RSA award incentive quantum increasing from 125% to 175%
ofsalary for Chief Executive Officer andfrom 100% to125% for
ChiefFinancial Officer.
• More robust performance underpin for the RSA plan.
• Higher in-employment shareholding guidelines (increasing from 300%
to350% of salary for Chief Executive Officer and from 200% to 250%
ofsalary for Chief Financial Officer).
• Annual review of Chairman’s fee.
Summary of executive directors’ remuneration for the year
Highlights of wider workforce
remuneration in 2023
506
leaders across the Group
receive share awards as part
oftheir remuneration
c.16,200
people benefit from the
opportunity to take part in
employee share save plans
c.10,800
people have an element of
performance related pay in
their remuneration with 78%
receiving a bonus
Alignment of performance and remuneration 2023
Annual bonus
To motivate
and reward the
achievement of
the Company’s
strategic and
operational
objectives
Eps
Linked financial KPI: eps
35%
RAOC
Linked financial KPI: RAOC and operating profit
10%
Operating cash flow
Linked financial KPI: cash conversion
25%
Non-financial strategic goals
Payable to the executive directors in relation to agreed
non-financial strategic goals
Frank van Zanten
Richard Howes
20%
20%
ESG goals
Frank van Zanten
Richard Howes
10%
10%
Total bonus opportunity/result
Frank van Zanten
Richard Howes
100%
100%
LTIP
To motivate
and reward
performance
linked to long
term success
Eps
Linked financial KPI: eps
50%
Not applicable
LTIP A
TSR
Linked financial KPI: dividend per share and share price
50%
Total LTIP B opportunity/result
100%
RSA
100%
100%
Chief Executive Officer
Frank van Zanten (£000)
Salary + benefits + pension
Bonus
LTIP
RSA
2022 2023 Max
2022 2023 Max
1,305.2
1,657.5
1,542.4
[XXXX]
1,314.1
1,609.9
1,460.7
1,900.2
1,314.1
1,791.1
1,460.7
2,092.2
663.7
966.2
1,270.7
696.0
930.5
766.4
997.0
696.0
1,035.2
766.4
1,097.7
Salary + benefits + pension
Bonus
LTIP
RSA
2022 2023 Max
2022 2023 Max
1,305.2
1,657.5
1,542.4
[XXXX]
1,314.1
1,609.9
1,460.7
1,900.2
1,314.1
1,791.1
1,460.7
2,092.2
663.7
966.2
1,270.7
696.0
930.5
766.4
997.0
696.0
1,035.2
766.4
1,097.7
Salary + benefits + pension
Bonus
LTIP
RSA
2022 2023 Max
2022 2023 Max
1,305.2
1,657.5
1,542.4
[XXXX]
1,314.1
1,609.9
1,460.7
1,900.2
1,314.1
1,791.1
1,460.7
2,092.2
663.7
966.2
1,270.7
696.0
930.5
766.4
997.0
696.0
1,035.2
766.4
1,097.7
Chief Financial Officer
Richard Howes (£000)
Total opportunity Result
The 2023 and max figures include two LTIP awards – this will normalise in 2024 which will only include one award.
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Bunzl plc
Annual Report 2023 135

Annual report on directors’ remuneration for 2023
This report sets out the elements of remuneration paid to, or earned by, the directors in respect of the financial year 2023. Shareholders should note that reporting requirements mean that both the 2020 LTIP B
awards and the 2021 Restricted Share Awards are both included in the Single total figure of remuneration. This means that the total remuneration shown for both directors is artificially high this year. This will
normalise in 2024. For this reason, a subtotal has been included which removes the LTIP B awards made under the previous policy. This provides a more representative view of total remuneration.
Single total figure of remuneration 2023 (audited information)
Executive directors
Salary
£’000
Taxable
benefits
£’000
Pension
£’000
Bonus
£’000
LTIP
£’000
RSA
£’000
Sub total
(excl. LTIP Bs)
Total
£’000
Subtotal of
fixed pay
Sub total of
variable pay
Frank van Zanten – 2023 £995.0 £269.3 £49.8 £1,609.9 £1,900.2 £1,460.7 £4,384.7 £6,284.9 £1,314.1 £4,970.8
Frank van Zanten – 2022 £939.6 £234.1 £131.5 £1,657.5 £1,542.4 – £3,642.3 £4,505.1 £1,305.2 £3,199.9
Richard Howes – 2023 £647.0 £16.6 £32.4 £930.5 £997.0 £766.4 £2,392.9 £3,389.9 £696.0 £2,693.9
Richard Howes – 2022 £616.2 £16.7 £30.8 £966.2 £1,270.7 – £2,075.6 £2,900.6 £663.7 £2,236.9
Total – 2023 £1,642.0 £285.9 £82.2 £2,540.4 £2,897.2 £2,227.1 £6,777.6 £9,674.8 £2,010.1 £7,664.7
Total – 2022 £1,555.8 £250.8 £162.3 £2,623.7 £2,813.1 – £5,717.9 £7,405.7 £1,968.9 £5,436.8
Notes
a) The figures above represent remuneration earned as directors during the relevant financial year including the bonus of which the cash element, 50% of the bonus, is paid in the year following that in which it is earned. The other 50% of the bonus shown above is deferred and
conditionally awarded as shares under the rules of the Deferred Annual Share Bonus Scheme (‘DASBS’). Shares relating to the 2022 deferred bonus were awarded in 2023 as shown in the table on page 141 and the shares relating to the 2023 deferred bonus will be awarded in 2024.
b) The annual bonus for 2023 was determined according to a formulaic calculation in respect of adjusted eps, RAOC and operating cash flow measures, while the Committee used its judgement to assess performance of individual objectives (20% of the bonus) and ESG
objectives (10% of the bonus). No discretionary adjustment was applied.
c) Benefits provided for all executive directors include a car or car allowance and medical insurance coverage for them and their families. Frank van Zanten’s benefits include a hybrid working allowance and expenses which have been impacted in 2023 by increases in overall
costs, such as travel.
d) The 2023 long term incentives figure comprises two types of award. The value of the LTIP B awards granted under the 2020 Policy in April and October 2020 which included performance periods ending in 2023 and the first grant of RSA awards granted under the 2021 Policy
in April 2021. The performance metrics for LTIP B were eps growth and TSR and for RSAs, an underpin condition has to have been achieved, further details of which are on page 140. The share price used to calculate the value for the LTIP B is the closing mid-market share
price on dates of vesting, 3,071p and 2,933p on 6 April 2023 and 5 October 2023 respectively. The share price used to calculate the estimated value of the vesting RSA awards is 2,990p being the three-month average share price to 31 December 2023.
e) The portion of total long term incentive figures that are attributable to share price growth are £875,158 for Frank van Zanten and £717,218 for Richard Howes in 2022 and £1,053,764 (£734,369 for LTIP B award and £319,395 for RSA) for Frank van Zanten and £552,842
(£385,281 for LTIP B award and £167,561 for RSA) for Richard Howes in 2023.
f) The figures shown in relation to 2022 for the LTIP have been restated. The 2022 Annual Report figure of £1,141,517 was based on the estimated value of the LTIP Part A share option awards using a three-month average share price to December 2022 of 2,888p. These awards
vested on 10 March 2023 and 9 September 2023 and therefore figures have been updated to £1,125,301 to reflect the actual share price on the date of vesting of 2,930p (being the mid-market share price on 10 March 2023) and 2,807p (being the mid-market share price on
8September 2023, the closest working day to vesting date) respectively.
g) The pension contribution was delivered as monthly cash payments in lieu of pension.
Non-executive directors
Board fees
£000
Committee Chair/
SID fees
£000
Taxable payments/
expenses
£000
Total
£000
2023 2022 2023 2022 2023 2022 2023 2022
Peter Ventress – Chairman 386.0 386.0 – – – – 386.0 386.0
Vanda Murray 78.5 75.0 43.0 41.0 4.1 2.4 125.6 118.4
Lloyd Pitchford 78.5 75.0 22.0 21.0 0.8 – 101.3 96.0
Stephan Nanninga 78.5 75.0 – – 7.8 7.9 86.3 82.9
Vin Murria 78.5 75.0 – – 0.6 0.6 79.1 75.6
Maria Fernanda Mejía – 6.1 – – – – – 6.1
Pam Kirby 78.5 31.3 – – – – 78.5 31.3
Jacky Simmonds 65.4 – – 1.6 67.0 –
Total 843.9 723.4 65.0 62.0 14.9 10.9 923.8 796.3
Notes
a) Taxable payments/expenses for non-executive directors are costs incurred for travel and accommodation in order to attend Board meetings. These costs have been grossed up to include the relevant income tax payable where applicable (e.g. to travel expenses).
b) Maria Fernanda Mejía stepped down from the Board on 2 February 2022.
c) Jacky Simmonds was appointed to the Board on 1 March 2023.
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Payments for loss of office (audited information)
No payments were or are to be made to directors in respect of loss of office.
Payments to past directors (audited information)
No payments were or are to be made to former directors.
Executive directors’ annual salary (audited information)
As disclosed last year, executive directors’ salaries were reviewed with effect from 1 January 2023
inaccordance with normal policy and were increased taking into account the average salary increases
for employees across the Group.
Salary from
1 January
2023
Salary from
1 January
2022
Increase in
salary
2022 to 2023
Frank van Zanten £995,050 £939,600 5.9%
Richard Howes £647,000 £616,193 5.0%
Executive directors’ salaries were also reviewed with effect from 1 January 2024 and the increases
awarded are shown on page 145.
Executive directors’ external appointments
During 2023 Frank van Zanten served as a non-executive director of Ahold Delhaize N.V. and Richard
Howes served as a non-executive director of Smiths Group plc. During the year, Frank van Zanten
retained fees of €152,500 from Ahold Delhaize N.V. and Richard Howes retained fees of £88,273 from
Smiths Group plc.
Non-executive directors’ fees (audited information)
The Chairman’s fee is reviewed every two years, with the most recent review having taken place with
effect from 1 January 2022. The non-executive directors’ fees were reviewed with effect from 1 January
2023 in accordance with the normal fees policy.
With
effect from
1 January 2023
Fees
paid in
2022
Increase
in fees
2022 to 2023
Chairman’s fee £386,000 £386,000 0.0%
Non-executive director fee £78,500 £75,000 4.7%
Supplements:
Senior Independent Director £21,000 £20,000 5.0%
Audit Committee Chair £22,000 £21,000 4.8%
Remuneration Committee Chair £22,000 £21,000 4.8%
The Chairman and non-executive directors’ fees were reviewed with effect from 1 January 2024 and the
increases awarded are shown on page 146.
Performance against annual bonus targets (audited information)
The annual bonus plan and DASBS currently operate as set out in the policy section on pages 127 and
128. The bonus measures for 2023 were Group adjusted eps, RAOC, operating cash flow, personal
performance on individual objectives and specific objectives related to ESG matters.
The maximum bonus achievable was 180% of salary for Frank van Zanten and 160% for Richard Howes.
The results for 2023 reflect another successful year and are shown in the table below. The bonus
outturn reflects another successful year during which Bunzl has grown adjusted operating profit by
6.2% at constant exchange rates and increased adjusted eps by 2.7%, exceeding internal and external
expectations. The Committee did not exercise any discretion over these formulaic outturns.
Group performance (70%)
Weighting Scorecard performance metric Threshold Target Stretch
Actual outturn
calculated
at constant
exchange rates
% of
maximum
bonus
35% eps (p) 174.7 187.8 200.9 195.6 79.7%
% of target 93.% 100% 107% 104.15%
% salary – Frank van Zanten 15.8% 31.5% 63.0% 50.19%
% salary – Richard Howes 14.0% 28.0% 56.0% 44.61%
10% RAOC % 40.1% 42.1% 44.1% 46.40% 100%
% of target 95% 100% 105% 110.21%
% salary – Frank van Zanten 4.5% 9.0% 18.0% 18.0%
% salary – Richard Howes 4.0% 8.0% 16.0% 16.0%
25% Operating cash flow (£m) 693.7 730.2 766.7 905.9 100%
% of target 95% 100% 105% 124.06%
% salary – Frank van Zanten 11.3% 22.5% 45.0% 45.0%
% salary – Richard Howes 10.0% 20.0% 40.0% 40.0%
TOTAL 89.8%
Notes
a) The adjusted eps outturn for 2023 (191.1p) calculated at the exchange rates used in setting the 2023 target is 195.6p.
b) The actual outturn calculated at constant exchange rates is the actual result of the relevant measures retranslated at the exchange
rates used in setting the target for that measure.
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Non-financial strategic goals (30%)
Following a review of performance against specific personal objectives for 2023, the Committee
determined the bonus percentages payable to the executive directors in relation to the non-financial
strategic goals. The specific objectives, and the related evaluation of performance, are shown in the
table below:
Frank van Zanten – Chief Executive Officer
Non-financial objectives (20% of bonus) Evaluation
• Continue to deliver digital progress
across the Group. Ensure that digital
best practice continues to be shared
across the Group so that development
can be accelerated and ensure that
investment is targeted at the areas
ofgreatest opportunity.
• Significant progress on digital sales orders (December 2023)
which grew to 72% of transactions compared to 69% in 2022.
Excluding acquisitions, the growth was from 60% in 2019 to 74%
in the month of December 2023. Supplier invoices electronically
loaded (December 2023) were at 60% compared to 52% in 2022.
• Several large Digital Forums are in place across the business for
the sharing of best practice (Global forum has 500+ members)
and the combination of the adoption of new technology tools
(including artificial intelligence) and the recruitment of new
digital talent is supporting ongoing progress.
• Develop a vision for how the Bunzl
business could look in 2030, including
more understanding of what new
capabilities will be required from a
technology and talent perspective.
• Over the course of the first half of 2023, a thorough process
involving all members of the leadership team and some
external input was launched to create a vision for Bunzl in 2030.
This was shared with the Board at a Strategy session in June,
and focused on the use of Artificial Intelligence in both the
content and the delivery. This helped to re-focus the objectives
around talent and technology and provides a framework for the
team on the key strategic priorities.
• Continue to build an effective Board
and Leadership Team, to include
effective onboarding and induction
fornewly appointed non-executive
directors and the Managing Director
ofBunzl Asia Pacific and ensuring
continuous development of the
Leadership team.
• The new non-executive director underwent an extensive
induction programme meeting functional leaders and Exco
members. Commercial, operational and strategic information
was shared before the annual Board planning meetings which
has accelerated their active participation at the Board.
• The annual Board evaluation process has been converted into
tangible action points which have been integrated into the
Board forward agenda
• The Managing Director of Bunzl APAC has made a positive start
and has been actively coached and supported in stepping up as
a full member of the Leadership team. Other tailored
development activities have been implemented for the regional
Managing Directors according to individual need.
% of base salary awarded 34.2%
% of maximum 95%
Richard Howes – Chief Financial Officer
Non-financial objectives (20% of bonus) Evaluation
• Deliver a robust and competitive audit
tender process.
• The tender process invited three firms to submit proposals
forthe 2024 year end audit. After an extensive engagement
process the Audit Committee, supported by a Selection Panel,
recommended to the Board that the services of the current
auditor, PwC, be retained. The process and outcome
successfully balanced the importance of financial and non
financial aspects of the audit process.
• Internal Controls & Reporting/
Information Security – deliver the key
milestones of the regional
implementation plans and agree the
roadmap for roll-out of non-financial
information reporting over
2023–2025.
• The Global Internal Controls programme remains on track with
100% of key controls (tier 1 and 2, by revenue) documented
including Group Finance, Tax and Treasury. All the Information
Security audits completed by the Internal Audit team have
achieved Reasonable Assurance. Significant enhancements
implemented have included modified acquisition assessments,
dark web scanning, health checks and external threat
intelligence. In addition, the team completed the first cross
group InfoSec breach response simulation.
• A comprehensive roadmap for non-financial information
reporting was presented to the Audit Committee following
extensive engagement with regional teams and the creation
ofdedicated resources.
• Undertake global projects in
conjunction with the Business Area
management to (a) further improve
working capital levels in the businesses
without compromising service levels
and (b) identify the greatest
opportunities to further drive (digital)
automation including sharing best
practices and ensuring that the local
teams deliver the planned progress.
• A system of weekly working capital reporting has been
developed and extensive communication has taken place to
ensure the ownership of regional finance directors. Average
inventory days has improved year on year.
• A new approach to reporting digital progress has been
implemented with a particular focus on the inclusion of specific
business performance metrics. As above, significant progress
onthe digitisation of sales orders and supplier invoices has
been made.
% of base salary awarded 30.4%
% of maximum 95%
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ESG objectives – shared objectives (10% of bonus) Evaluation
• Climate change – Ensure that those
suppliers that jointly account for at
least 79% of the Group supplier
emissions are fully engaged on the
requirement to set science-based
targets by 2027. This ensures that the
SBTi requirement to have science-
based targets for 2/3 of Bunzl’s scope
3 emissions is met. Identify a suitable
platform for data collection and
monitoring, agree a timetable for
implementation and deliver the key
milestones for 2023. Ensure that the
communications approach with
suppliers is fit for purpose, and that
roles and responsibilities are clear.
• A thorough RFP process was carried out to source a suitable,
Bunzl-aligned supplier engagement tool and shortlisted four
options before selecting the most appropriate provider. After
ensuring ownership of the programme from the regional leads
and procurement teams, a Bunzl-specific structure was built
into the tool and 750 suppliers (representing 79% of spend by
emissions) were contacted as a first step of the engagement
process to take place in 2024. This will involve a pilot with the
top 100 suppliers in the first half of the year followed by the
remaining 650 suppliers.
• Products – Increase the sales of
packaging products made from
alternative materials (as a % of total
packaging products) across the Group
by 2% during 2023.
• Overall, alternative materials as a % of total packaging has
improved, driven by strong engagement with customers and
suppliers. The 2% target was just missed due to changes in
customer behaviour and the delay of legislation in some key
jurisdictions.
• Ethical sourcing – Ensure that the
audit programme in high risk countries
inside and outside of Asia is further
expanded, taking it from 78% to 88% of
spend in the high risk regions in total
(based on 2022 spend data) coming
from assessed and compliant
suppliers. This means that Bunzl will be
firmly on track to achieve the target of
90% coverage by 2025.
• 90% coverage of high risk spend was achieved (based on
2022spend data) at the end of the year with 92 more audits
completed in 2023 than in 2022. The number of audits
completed in high risk regions has increased by 90% over the
last 6 years. Auditing in other high risk regions has taken place
with 77 audits in 2023 (Turkey, Brazil etc) with one zero tolerance
issue identified. The first audits of suppliers based in low risk
countries who produce high risk products were completed.
• Diversity, Equity & Inclusion
– Ensure that the % of leadership roles
across the Group (defined as those who
receive share awards as part of their
remuneration) occupied by females
improves on an underlying basis.
Provide the Board with regular
reporting on the progress of females in
Bunzl, including a clear understanding
of the impact of acquisitions on the
composition of the leadership group.
• The % of leadership roles occupied by women (defined as those
who receive share awards as part of their remuneration) has
increased from 20% (2022) to 22% (2023). The total leadership
population has increased from 497 to 506, and excluding
acquisitions, c.40% of the new joiners to the group were female.
Regular reporting of progress to the Board has taken place
highlighting the major initiatives underway, including the broad
rollout of leadership diversity training, focused leadership
programmes for females (e.g. Latin America) and the expansion
of the “Inspiring Women in Bunzl” networks across the Group.
% of base salary awarded Frank van Zanten – 14.4% Richard Howes – 12.8%
% of maximum 80% 80%
When assessing performance and outcomes the Committee was mindful of the Company’s broader
achievements and stakeholder experience. The outcomes are considered appropriate in light of a year
of continued strong business performance. Accordingly, the total payments under the annual bonus
plans were:
Total bonus payment (cash and deferred shares) as a % of salary
2023
%
2022
%
2021
%
2020
%
2019
%
Frank van Zanten 161.8 176.4 176.4 180.0 107.1
Richard Howes 143.8 156.8 155.2 160.0 –
The monetary values of the bonus payments for 2023 and 2022 are included in the table on page 136.
The deferred shares portion of the bonus is 50% of the total and is delivered under DASBS share
awards which vest after three years and are subject to continued employment. The total bonus
payment represents 89.8% of the maximum bonus.
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LTIP grants/awards with performance periods ending in 2023
(audited information)
Performance shares – LTIP Part B
Awards of performance shares were made to Frank van Zanten and Richard Howes on 6 April 2020
and5 October 2020 under the 2014 LTIP and vested during 2023. These will be the last LTIP Part B
performance shares to vest. The Committee assessed the performance of the Company against the
relevant performance conditions and no discretion was exercised to override the formulaic outcomes
including as a result of the share price movement over the vesting period.
LTIP Part B – 6 April and 5 October 2020 awards
Performance
measure Vesting schedule
Threshold
target (6% p.a.
compounded)
Maximum
target (12% p.a.
compounded)
Actual eps
growth
% vesting
(50% of award)
Eps growth
(over three year period
to 31 December 2022)
25% vesting for
threshold performance
100% vesting for
maximum performance 19.10% 40.49% 43.72% 100.00%
% payable 12.5% 50.0%
Performance
measure Performance period Vesting schedule
Threshold
target
(median)
Maximum
target (upper
quartile) Actual TSR
% vesting
(50% of award)
TSR relative to
comparator
group of
bespoke peer
companies
1 April 2020 to
31 March 2023
25% vesting
for threshold
performance
15.3%
42 out
of 83
34.6%
21.25 out
of 83
68.7%
8.02 out
of 83 100.00%
1 October 2020
to 30 September
2023
100% vesting
for maximum
performance
22.2%
42 out
of 83
59.0%
21.25 out
of 83
30.2%
34.98 out
of 83 50.38%
% payable 25% 100%
Date of grant
Number of
shares granted
Vesting
outcome – eps
Vesting
outcome – TSR
Total Vesting
Outcome
Value of
award vesting
Frank van
Zanten
6 April 2020 42,936 100% 100% 100% £1,318,565
5 October 2020 26,377 100% 50.38% 75.19% £581,673
Richard
Howes
6 April 2020 22,527 100% 100% 100% £691,773
5 October 2020 13,839 100% 50.38% 75.19% £305,179
Note
Included in the single total figure of remuneration on page 136 is the value of these vested awards for Frank van Zanten and
Richard Howes at the closing mid-market share price on the dates of vesting, 6 April 2023 and 5 October 2023, which were 3,071p
and2,933p respectively.
LTIP – 2021 Restricted Share Awards
The first grant of restricted share awards was made under the 2021 Policy on 21 April 2021. These
awards vest after three years subject to the achievement of an underpin (assessed for the year ending
31December 2023) and continued service.
After each completed financial year during the three-year underpin assessment period, the Committee
considered carefully and documented progress towards achieving the underpin. Reflecting the strong
financial and non-financial performance of the Group over the three-year period, the Committee
determined that the underpin has been achieved and therefore no scale back is required. The following
points were considered by the Committee in arriving at this assessment:
• Financial performance – a strong performance in all three years of the period, including adjusted
operating profit growing by 2.8%, 11.1% and 6.2% in 2021, 2022 and 2023 respectively at constant
exchange rates and ROAC over 43% and ROIC over 15% for all three years.
• Operating model improvements – the last three years have seen significant operating efficiencies
being realised, key examples are the reorganisation of the Distribution division in North America and
24 warehouse relocations and consolidations in 2023 alone. A continued focus on technology and
automation has resulted in improvements in digital customer and supplier interactions with 72%
ofall orders now being handled digitally.
• Own brand and sustainable product alternatives – own brand product ranges in a number of regions
have been launched and developed over the three years including Ecosystems in North America and
Verive in Continental Europe which now has its own range of reusable packaged products.
• Acquisitions – 45 acquisitions have been made in the last three years, with £1,298m of committed
spend in that period.
• Sustainability – from 2021 to 2023 new sustainability commitments have been launched; climate
change targets approved by SBTi; engagement with over 100 suppliers to set their own science-
based emission targets; and a double materiality assessment to ensure our sustainability actions
deliver the best results for our stakeholders.
• Employee satisfaction – maintained over 80% engagement scores when surveying all our employees
worldwide and in our first global pilot of the Great Place to Work survey in 2023, 75% of the operating
companies were accredited and the average Trust Index score was 69%.
• Risk management – introduced the Internal Controls Essentials programme; resourced to implement
the controls and measure effectiveness.
Date of
grant
Number of
shares granted
Underpin
achieved
Number of
awards vesting
(incl. dividend
equivalents)
Estimated
Value of award
vesting
Frank van Zanten 21 April 2021 45,859 Yes 48,854 £1,460,735
Richard Howes 21 April 2021 24,060 Yes 25,631 £766,367
Note
The estimated vesting value is based on the three-month average of the closing mid-market share price to 31 December 2023 (2,990p).
The value will be updated in next year’s report to reflect the actual closing mid-market share price on the vesting date. Vested awards
are subject to a further two-year holding period.
Total pension entitlements (audited information)
Value of cash allowance
in 2023
Total pension
2023
Frank van Zanten £49,753 £49,753
Richard Howes £32,350 £32,350
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LTIP grants in 2023
In 2023 a single Restricted Share Award was made on 1 March 2023 in accordance with the Policy as
approved at the 2021 AGM.
Restricted shares awarded during the financial year (audited information)
Plan Date of grant Basis of award
Face value
£000
Number of
shares
Performance period
end date
Frank van Zanten RSA 1 March 2023 125% of salary £1,243.8 41,682 31 December 2025
Richard Howes RSA 1 March 2023 100% of salary £647.0 21,682 31 December 2025
Note
The face value of the awards is calculated using the average of the closing mid-market share price on the 60 calendar days prior to the
grant of the award. The RSA options were awarded under the LTIP Part B on 1 March 2023 at a value of 2,984p per share.
The extent to which the Restricted Share Award, granted as nil-cost options, may vest is subject to a
performance underpin which will be closely reviewed by the Committee before these awards vest in
2026. In assessing the underpin, in normal circumstances the Committee may consider the Group’s
overall performance, including financial and non-financial performance over the course of the vesting
period and any material risk/regulatory failures identified. Financial performance may include elements
such as revenue, profitability, cash generation, and return on capital. Non-financial performance relates
to strategic priority areas focused on delivering long term success of the Company and implementing
the Group’s long term strategy. These include, for instance, making operating model improvements,
own brand development, acquisition growth, building on our competitive advantage, digital and
technology improvements, focus on ESG, including sustainability, employee satisfaction and managing
risk in the business. Vested awards are subject to a two-year holding period.
Shareholder dilution
In accordance with The Investment Association’s Principles of Remuneration, the Company can satisfy
awards to employees under all of its share plans with new issue shares or shares issued from treasury
up to a maximum of 10% of its issued share capital (adjusted for share issuance and cancellation) in a
rolling 10 year period. Within this 10% limit, the Company can only issue (as newly issued shares or from
treasury), 5% of its issued share capital (adjusted for share issuance and cancellation) to satisfy awards
under executive (discretionary) plans.
As well as the LTIP, the Company operates various all employee share schemes as described on page
130. Newly issued shares are currently used to satisfy the exercise of options under the Sharesave
Scheme and the International and Irish Sharesave Plans. Awards of executive options, performance
share awards and restricted share awards made under the LTIP are principally satisfied by shares
delivered from the Employee Benefit Trust which buys shares on the market, unless security laws in
relevant jurisdictions prevent this.
Limit on awards
Cumulative options and awards granted as
a percentage of issued share capital as at 31
December 2023
10% in any rolling 10 year period (all plans) 1.0%
5% in any rolling 10 year period (executive (discretionary) plans) 0.2%
Statement of directors’ shareholding and share interests (audited
information)
As at 31 December 2023, each of the executive directors and their connected persons have a
shareholding as follows:
Requirement for share ownership as a
percentage of salary (31 December 2023)
Actual share ownership as a percentage of
salary at 31 December 2023 at the closing
mid-market price (3,190p)
Frank van Zanten 300% 875%
Richard Howes 200% 519%
Notes
a) Shares contributing to the share ownership percentage include deferred shares held under the DASBS (net of tax).
b) Under the Policy being put to a shareholder vote at the 2024 AGM, the in-employment shareholding guideline will increase from
300% to 350% of salary for the Chief Executive Officer and from 200% to 250% of salary for the Chief Financial Officer.
Additional information on directors’ interests (audited information)
Details of the executive directors’ interests in outstanding share awards under the DASBS, LTIP and all
employee share plans are set out below.
Deferred share awards as at 31 December 2023
The awards granted to each director of the Company and any director with an interest in the Company
under the DASBS are set out in the table below. Further information relating to the deferred bonus is
provided on pages 127 and 128.
Awards
(shares) held
at 1 January
2023
Shares
awarded
during
2023
Shares
vested
during
2023
Total number
of awards
(shares) at
31 December
2023
Normal
vesting
date
Share
price at
grant
p
Market
price at
vesting
p
Monetary
value of
vested
awards
£000
Frank van Zanten 24,670 26,288 – 01.03.23 1,870 2,974 782
36,667 36,667 01.03.24 2,178
27,124 27,124 01.03.25 2,969
27,959 27,959 01.03.26 2,964
88,461 27,959 26,288 91,750
Richard Howes 9,774 10,415 – 01.03.23 1,870 2,974 310
21,375 21,375 01.03.24 2,178
15,651 15,651 01.03.25 2,969
16,298 16,298 01.03.26 2,964
46,800 16,298 10,415 53,324
Notes
a) The deferred element of the 2023 annual bonus plan as shown on page 136 is not included in the table above as the appropriate
number of shares have not yet been awarded. No shares lapsed during the year.
b) The deferred shares vested during 2023 include the dividend equivalents.
c) The deferred shares awarded during 2023 relate to 50% of the bonus for 2022 and are structured as nil-cost options, with the
number of shares being determined by reference to the mid market closing share price on the day preceding the grant date. The face
value of the DASBS awards on the grant date 1 March 2023 was £828,705 for Frank van Zanten and £483,073 for Richard Howes.
d) Frank van Zanten exercised 26,288 deferred shares granted in 2020 (including related dividend equivalent shares) on 1 March 2023
with a total gain of £784,923
e) Richard Howes exercised 10,415 deferred shares granted in 2020 (including related dividend equivalent shares) on 3 March 2023
with a total gain of £312,615.
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LTIP
The tables below show the number of executive share options and performance shares held by the
executive directors under the LTIP during 2023 with shaded details indicating options or shares that
have vested.
Executive share options – LTIP Part A
Options held at
1 January
2023
Grant
date
Exercise
price
p
Options
exercisable
between
Vested options
held at
31 December
2023
Frank van Zanten 42,636 02.09.16 2,336 02.09.19–01.09.26 –
34,946 02.03.17 2,335 02.03.20–01.03.27 34,946
42,782 01.03.18 1,955 01.03.21–29.02.28 42,782
35,010 31.08.18 2,389 31.08.21–30.08.28 35,010
34,978 28.02.19 2,375 28.02.22–27.02.29 34,978
39,427 11.09.19 2,107 11.09.22–10.09.29 39,427
48,225 10.03.20 1,840 10.03.23–09.03.30 48,225
37,096 09.09.20 2,392 09.09.23–08.09.30 37,096
Total 315,100 272,464
Richard Howes 31,627 10.03.20 1,840 10.03.23–09.03.30 –
24,329 09.09.20 2,392 09.09.23–08.09.30 –
Total 55,956
Notes
a) The mid-market price of a share on 29 December 2023 (last working day of 2023) was 3,190p and the range during 2023 was
2,687p to 3,225p.
b) Executive share options are structured as market value options.
c) Frank Van Zanten exercised 42,636 share options granted in September 2016 on 6 April 2023 with a total gain of £313,459.
d) Richard Howes exercised 31,627 share options granted in March 2020 on 12 April 2023 and 24,329 share options granted
inSeptember 2020 on 6 October 2023 with a total gain of £392,496 and £138,194 respectively.
DIRECTORS’ REMUNERATION REPORT continued
Performance shares – LTIP Part B
Awards
(shares)
held at 1
January
2023
Conditional
shares
awarded
during
2023
Award
date
Market
price per
share at
award p
Lapsed
awards
(shares)
during
2023
Exercised
awards
(shares)
during
2023
Market
price per
share at
exercise p
Value at
exercise
£000
Awards
(shares)
held at 31
December
2023
Frank van
Zanten 42,936 – 06.04.20 1,550 – 42,936 3,066 1,316 –
26,377 – 05.10.20 2,523 6,545 19,832 2,950 585 –
Total 69,313 – 6,545 62,768 –
Richard
Howes 22,527 – 06.04.20 1,550 1 22,526 3,081 694 –
13,839 – 05.10.20 2,523 3,434 10,405 2,960 308 –
Total 36,366 – 3,435 32,931 –
Note
Performance shares are structured as nil-cost options.
Restricted Share Awards
Awards
(shares)
held at
1 January
2023
Conditional
shares
awarded
during
2023
Award
date
Market
price per
share at
award
p
Lapsed
awards
(shares)
during
2023
Exercised
awards
(shares)
during
2023
Market
price per
share at
exercise
p
Value at
exercise
£000
Awards
(shares)
held at
31 December
2023
Frank van
Zanten 45,859 – 21.04.21 2,489 – – – – 45,859
42,693 – 01.03.22 2,751 – – – – 42,693
41,682 01.03.23 2,984 – – – – 41,682
Total 88,552 41,682 – – 130,234
Richard
Howes 24,060 – 21.04.21 2,489 – – – – 24,060
22,398 – 01.03.22 2,751 – – – – 22,398
21,682 01.03.23 2,984 – – – – 21,682
Total 46,458 21,682 – – 68,140
Note
Restricted Share Awards are structured as nil-cost options.
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All employee share schemes
The table below shows the number of share options granted to the executive directors under the
Sharesave Schemes. Details of the Sharesave Schemes are set out on page 130.
Sharesave Schemes
Options at
1 January
2023
Grant
date
Exercise price
p
Options
exercisable
between
Options at
31 December
2023
Frank van Zanten 959 27.03.18 1,564 01.05.23–31.10.23 –
504 31.03.21 1,781 01.05.24–31.10.24 504
– 03.04.23 2,343 01.05.26–31.10.26 368
Richard Howes 1,010 31.03.21 1,781 01.05.24–31.10.24 1,010
Interests in shares and share options (audited disclosure)
The interests of the directors, and their connected persons, in the Company’s ordinary shares and
share options at 31 December 2023 were:
Shares (DASBS, LTIP B and RSA) Options (LTIP Part A and Sharesave)
Total
interests
held
Owned
outright
Unvested
(DASBS)
Unvested and
subject to
performance
conditions
(LTIP Part B)
Unvested
and
subject to
underpin
(RSA)
Unvested and
subject to
performance
conditions
Unvested
subject
to continued
employment
Vested
but not
exercised
Frank van Zanten 225,612 91,750 – 130,234 – 872 272,464 720,932
Richard Howes 76,333 53,324 – 68,140 – 1,010 – 198,807
Peter Ventress 2,608 – – – – – – 2,608
Vin Murria – – – – – – – –
Vanda Murray 3,000 – – – – – – 3,000
Lloyd Pitchford 4,000 – – – – – – 4,000
Stephan Nanninga – – – – – – – –
Pam Kirby 1,800 – – – – – – 1,800
Jacky Simmonds – – – – – – – –
Notes
a) No changes to the directors’ ordinary share interests shown in this remuneration report have taken place between 31 December
2023 and 26 February 2024.
b) LTIP A share options are structured as market value options and LTIP B performance shares and Restricted Share Awards are
structured as nil-cost options.
Performance graph and table
Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 requires that the Company must provide a graph comparing the TSR performance of a
hypothetical holding of shares in the Company with a broad equity market index over a 10 year period.
The Company’s TSR performance against the FTSE 350 Support Services Sector, considered to be the
most appropriate comparator group, over a 10-year period to 31 December 2023 is shown below.
0
50
100
150
200
250
300
Source: Datastream (a LSEG product)
Bunzl
FTSE 350 Support Services
Value (£) (rebased)
20232022202120202019201820172016201520142013
0
50
100
150
200
250
300
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DIRECTORS’ REMUNERATION REPORT continued
Chief Executive Officer’s single figure history
The table below summarises the Chief Executive Officer’s single total figure of remuneration, annual bonus and long term incentive payout as a percentage of maximum opportunity for 2023 and the previous
nine years. The total remuneration figure for 2023 includes both the 2020 LTIP B awards and the 2021 Restricted Share Award due to reporting requirements. This means the total remuneration is artificially high
and will normalise in 2024.
2014 2015
2016
MR
2016
FvZ 2017 2018 2019 2020 2021 2022 2023
Single total figure of
remuneration £000 4,766.8 3,937.9 2,353.3 1,492.0 2,812.0 2,828.8 2,769.4 3,490.3 4,225.4 4,505.1 6,284.9
Annual bonus payment as
apercentage of maximum 85% 64% 0% 67% 73% 70% 60% 100% 98% 98% 90%
Long term incentive
vesting as a percentage
ofmaximum
LTIP Part A
(options) 100% 100% 100% 0% 100% 100% 100% 100% 96% 100% –
LTIP Part B
(performance shares) 89% 69% 82% 0% 69% 54% 63% 45% 81% 60% 88%
LTIP Part B
(Restricted Share Awards) – – – – – – – – – – 100%
Notes
a) The data for 2016 includes the amounts relating to Michael Roney (‘MR’) from 1 January 2016 to 19 April 2016 and also includes the LTIP awards made to him that vested in the period from 20 April to 31 December 2016. There was no bonus award for Michael Roney in relation
to 2016.
b) The data for 2016 also includes the amounts relating to Frank van Zanten (‘FvZ’) from 20 April to 31 December 2016 including the bonus award for that period and the international relocation package with accommodation benefit support, but excludes the LTIP awards made
to him in his previous role that vested during the period from 20 April to 31 December 2016.
c) All years prior to 2016 relate to the former CEO Michael Roney.
d) The single total figure of remuneration in relation to 2022 has been restated from the figure shown in the 2022 Annual Report to reflect the difference between the grant price and the estimated value of vesting using the three month average share price to 31 December
2022 and the value of the relevant LTIP awards on the actual date of vesting as detailed in Note (f) to the table of the single total figure of remuneration 2023 on page 136.
Percentage change in each director’s remuneration
The table below sets out the annual changes from the prior year, for the years 2020 through to 2023, in the salary, benefits, and bonus values of all directors and employees of the legal entity which employs the
Chief Executive Officer, Bunzl plc. Where it is not possible to compare employees from Bunzl plc between years due to employees joining or leaving the Company or moving role, these employees have been
removed from the data to prevent distortion.
Salary/Fees Benefits Bonus
2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023
Chief Executive Officer – Frank van Zanten 3.0% 2.9% 2.9% 5.9% (42.0%) (14.1%) 57.2% 15.0% 73.0% 0.8% 2.9% (2.9%)
Chief Financial Officer – Richard Howes 3.0% 2.9% 2.9% 5.0% n/a 1.2% 2.5% (0.6%) n/a (0.2%) 4.0% (3.7%)
Chairman – Peter Ventress 3.1% 0.0% 4.9% 0.0% n/a 100.0% (100.0%) 0.0% n/a n/a n/a n/a
Non-executive director – Vanda Murray 0.9% 2.2% 3.4% 4.7% (100.0%) 100.0% 104.0% 69.4% n/a n/a n/a n/a
Non-executive director – Lloyd Pitchford 1.1% 1.6% 3.0% 4.7% (100.0%) 0.0% 0.0% 100.0% n/a n/a n/a n/a
Non-executive director – Stephan Nanninga n/a 2.0% 2.5% 4.7% (64.0%) (100.0%) 100.0% (0.9%) n/a n/a n/a n/a
Non-executive director – Vin Murria n/a 2.0% 2.5% 4.7% n/a 0.0% 100.0% (2.0%) n/a n/a n/a n/a
Non-executive director – Pam Kirby n/a n/a n/a 4.7% n/a n/a n/a 0.0% n/a n/a n/a n/a
Non-executive director – Jacky Simmonds n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Average of employees in Bunzl plc 3.2% 3.1% 4.7% 6.7% (3.3%) 5.8% 3.8% 3.1% 162.0% (15.9%) (23.2%) (17.1%)
Notes
a) Benefits are annualised. See footnote (c) under the table on page 136 for explanation of increase to Frank van Zanten’s benefits.
b) Bunzl plc employees exclude any increases due to a change of role that occurred during either year.
c) Benefits for Bunzl plc employees have been restated for all years to include both health insurance cover and car allowances. Bonus for 2021-2022 has been restated with actual bonus outturn numbers.
d) Benefits for the non-executive directors are costs incurred for travel and accommodation in order to attend Board meetings in London.
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Chief Executive Officer pay ratio
The table below sets out the comparisons between the 25th, median, and 75th percentile employees
inthe UK, with reference to 31 December 2023, and the Chief Executive Officer’s salary and total
remuneration as detailed in the single figure table. To calculate these ratios, the Company has used
Option A and determined full time equivalent total remuneration as this is the most statistically robust
method. This includes scaling up salary for part time employees. Each employee’s pay and benefits are
calculated using each element of employee remuneration consistent with the Chief Executive Officer
and no element of pay has been omitted.
CEO
single figure Year Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
Salary £995,050 2023 Option A 41:1 36:1 26:1
Total remuneration £6,285,028 2023 Option A 248:1 213:1 146:1
Salary £939,600 2022 Option A 41:1 35:1 25:1
Total remuneration £4,505,124 2022 Option A 193:1 163:1 108:1
Salary £913,078 2021 Option A 43:1 37:1 26:1
Total remuneration £4,225,361 2021 Option A 196:1 164:1 106:1
Salary
Total
remuneration
Chief Executive Officer £995,050 £6,285,028
25th percentile employee £24,316 £25,339
Median employee £27,706 £29,468
75th percentile employee £37,875 £43,030
The total remuneration ratios for 2023 are higher due to the inclusion of both the LTIP B vests and RSA
vest in the single figure table for the Chief Executive Officer’s remuneration. The median salary ratio
remains broadly consistent as the Chief Executive Officer’s salary increase was in line with the wider UK
workforce.
Note
The single total figure of remuneration in relation to 2022 has been recalculated to reflect the difference between the grant price and
the estimated value of vesting of the relevant LTIP awards on the actual date of vesting as detailed in Note (f) to the table of the single
figure of remuneration 2023 on page 136. The 2022 salary ratio has not been restated because there was no difference to report.
Relative importance of spend on pay
The table below shows a comparison between the overall expenditure on pay and dividends paid to
shareholders as well as adjusted earnings per share for 2022 and 2023 (as stated in Note 26, Note 22
and Note 3 to the consolidated financial statements on pages 185, 182 and 161 respectively).
£m 2023 2022
Percentage
change
Overall expenditure on pay 1,039.5 984.5 5.6%
Dividends paid in the year 209.7 190.5 10.1%
Adjusted earnings per share (p) 191.1 184.3 3.7%
Notes
a) Overall expenditure on pay excludes employer’s social security costs.
b) Adjusted earnings per share is used as a comparator as it is a key financial indicator.
Remuneration arrangements for 2024
Salary
The salary increases for the executive directors for 2024, which are lower than the increase that has
been implemented for the wider leadership team (c. 5%), are as follows:
Salary from
1 January 2024
Salary from
1 January 2023
Increase in salary
2023 to 2024
Frank van Zanten £1,034,850 £995,050 4.0%
Richard Howes £673,000 £647,000 4.0%
2024 bonus measures
The structure for Frank van Zanten’s and Richard Howes’ annual bonus for 2024 is a balanced
scorecard of performance measures, based on adjusted eps, RAOC, operating cash flow and specified
strategic goals. The weighting of these measures remains 70% financial measures and 30% non-
financial measures (20% strategic goals and 10% ESG goals).
Weightings
EPS 30%
ROAC 15%
Operating cash flow 25%
Individual strategic objectives 20%
ESG / Sustainability 10%
100%
Following feedback from shareholders, the weighting of RAOC will increase by 5% to 15% and the
weighting of eps will decrease by 5% to 30%. The relevant performance points are: threshold, target,
and maximum (the level at which the bonus for that measure is capped). These performance points are
determined at the start of the year and no elements of the bonus are guaranteed. As in previous years,
the performance measures, including the financial targets, are commercially sensitive and therefore are
not disclosed until the following year.
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Underpin and pricing basis for long term incentives to be awarded in 2024
For the first awards to be granted under the 2024 Policy, the performance underpin will be reorganised
so that a formal framework is established upfront which will set out clearly for each award the key
elements which will need to be assessed for the award to vest. As is current policy, the Committee will
review specific indicators to help form a view of ‘in the round’ performance. In addition, the Committee
has the discretion to scale back awards (including to zero) if it concludes there is material
underperformance over the course of the vesting period.
Performance underpin
framework Factors to be considered (not limited to)
Financial health of the
business, considering key
financial indicators
• Revenue growth
• Operating margin
• Adjusted earnings per share
• Return on average operating capital (RAOC/ROIC)
• Cash conversion
• Balance sheet strength
Strategic priorities Delivery of key strategic objectives over the vesting period including
operational and individual performance
Stakeholder experience Consideration of our key stakeholders including employees, customers,
suppliers and shareholders
ESG progress Progress towards key achievement of ESG objectives including climate
change ambitions, ethical supply, investing in our people and diversity
The Committee conducts an annual review of the underpin and overall performance to determine if the
shares should vest in full at the end of three years. Under the proposed new policy there will be an
increase to quantum of restricted shares granted. In 2024 Frank van Zanten, subject to shareholder
approval, will be granted a restricted share award to the value of 175% of his salary and Richard Howes
will be granted a restricted share award to the value of 125% of his salary. In respect of determining the
number of awards to be granted in 2024, the 60-day average share price preceding the first grant date
will be used.
Chairman’s and non-executive directors’ fees for 2024
The Chairman’s fee is reviewed every two years and the non-executive directors’ fees are reviewed
annually with the most recent reviews for both taking effect from 1 January 2024. The current fee
structure for the Chairman and the non-executive directors is shown below:
With effect from
1 January 2024
Fees paid
in 2023
Increase in fees
2023 to 2024
Chairman’s fee £419,000 £386,000 8.5%
Non-executive director fee £81,500 £78,500 3.8%
Supplements:
Senior Independent Director £21,800 £21,000 3.8%
Audit Committee Chair £23,000 £22,000 4.5%
Remuneration Committee Chair £23,000 £22,000 4.5%
The 8.5% increase to the Chairman’s fee reflects the time commitment related to the role and the
biannual approach to increases.
Advisers to the Remuneration Committee
In carrying out their responsibilities, the Committee seeks external remuneration advice as necessary.
During the year the Committee received advice from Willis Towers Watson (‘WTW’) and FIT
Remuneration Consultants LLP (‘FIT’). WTW provided external survey data on directors’ remuneration
and benefit levels and FIT advised the Remuneration Committee on senior executive pay.
The fees payable to each adviser, based on hourly rates, were: £18,090 (WTW), and £72,421 (FIT)
respectively for such work undertaken in 2023. Advisers are appointed by the Committee and
reviewedperiodically. A tender exercise was conducted in 2020 and FIT were selected to provide
independent advice to the Remuneration Committee on senior executive pay matters. The Committee
conducts regular reviews of the effectiveness of the advisers and is satisfied that they remain objective
and independent.
Statement of voting at the 2023 AGM for the remuneration report
The remuneration report and remuneration policy respectively received the following shareholder
votes at the 2023 AGM held on 26 April 2023 and the 2021 AGM held on 20 April 2021 these being the
years they were last voted on by shareholders:
Votes cast Votes for
% of shares
voted for
Votes
against
% of shares
voted
against
Votes
withheld
Remuneration report (2023) 280,620,548 267,969,829 95.49% 12,650,719 4.51% 941,363
Remuneration policy (2021) 273,777,510 258,507,726 94.42% 15,269,784 5.58% 3,880,511
Notes
a) The votes ‘For’ include votes given at the Company Chairman’s discretion.
b) A vote ‘Withheld’ is not a vote in law and is not counted in the calculation of the votes ‘For’ or ‘Against’ the resolution. Votes ‘For’ and
‘Against’ are expressed as a percentage of the votes cast.
Vanda Murray OBE
Chair of the Remuneration Committee
26 February 2024
DIRECTORS’ REMUNERATION REPORT continued
146
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Annual Report 2023
Directors’
report

OTHER STATUTORY INFORMATION
Annual General Meeting
The Notice convening the Company’s Annual
General Meeting (‘AGM’), to be held at 60 Victoria
Embankment, London, EC4Y 0JP on Wednesday
24 April 2024 at 11.00 am, is set out in a separate
letter from the Chairman to shareholders.
Dividends
An interim dividend of 18.2p was paid on
3January 2024 in respect of 2023 and the
directors are recommending a final dividend of
50.1p, making a total for the year of 68.3p per
share (2022: 62.7p). Dividend details are given in
Note 22 to the consolidated financial statements.
Subject to shareholder approval at the 2024 AGM,
the final dividend will be paid on 2 July 2024 to
those shareholders on the register at the close
ofbusiness on 17 May 2024.
Share capital
The Company has a single class of share capital
which is divided into ordinary shares of 32¹⁄⁷p
each which rank pari passu in respect of
participation and voting rights. The shares are in
registered form, are fully paid up and are quoted
on the London Stock Exchange. In addition, the
Company operates a Level 1 American Depositary
Receipt programme with Citibank N.A. under
which the Company’s shares are traded on the
over-the-counter market in the form of American
Depositary Receipts.
Details of changes to the issued share capital
during the year are set out in Note 21 to the
consolidated financial statements.
Bunzl Group General Employee
Benefit Trust
The trustee of the Bunzl Group General Employee
Benefit Trust (the ‘EBT’) holds shares in respect of
employee share options and awards that have not
been exercised or vested. The EBT abstains from
voting in respect of these shares. The trustee has
agreed to waive the right to dividend payments
on shares held within the EBT. Details of the
shares so held are set out in Note 21 to the
consolidated financial statements.
Rights and obligations attaching
toshares
Subject to the provisions of the Companies Act
2006 and without prejudice to any rights attached
to any existing shares, the Company may resolve
by ordinary resolution to issue shares with such
rights and restrictions as set out in such
resolution or (if there is no such resolution or so
far as it does not make specific provision) as the
Board may decide. Subject to the provisions of
the Companies Act 2006 and of any resolution of
the Company passed pursuant thereto and
without prejudice to any rights attached to
existing shares, the Board is duly authorised to
issue and allot, grant options over or otherwise
dispose of the Company’s shares on such terms
and conditions and at such times as it thinks fit. If
at any time the share capital of the Company is
divided into different classes of shares, the rights
attached to any class may be varied or abrogated
by special resolution passed at a separate general
meeting of such holders. Subject to the rights
attached to any existing shares, rights attached to
shares will be deemed to be varied by the
reduction of capital paid up on the shares and by
the allotment of further shares ranking in priority
in respect of dividend or capital or which confer
on the holders more favourable voting rights than
the first-mentioned shares, but will not otherwise
be deemed to be varied by the creation or issue
of further shares.
Power to issue and allot shares
The directors are generally and unconditionally
authorised under the authorities granted at the
2023 AGM to allot shares in the Company up to
approximately one third of the Company’s issued
share capital or two thirds in respect of a rights
issue. The directors were also given the power to
allot ordinary shares for cash up to a limit
representing approximately 10% of the
Company’s issued share capital as at 9 March
2023, without regard to the pre-emption
provisions of the Companies Act 2006 (however,
more than 5% can only be used in connection
with an acquisition or specified capital
investment). No such shares were issued or
allotted under these authorities in 2023, nor is
there any current intention to do so, other than
tosatisfy share options under the Company’s
share option schemes and, if necessary, to
satisfythe consideration payable for businesses
to be acquired.
These authorities are valid until the conclusion
ofthe forthcoming AGM and the directors again
propose to seek equivalent authorities at
suchAGM.
Restrictions on transfer of shares
Dealings in the Company’s ordinary shares by its
directors, persons discharging managerial
responsibilities, certain employees of the
Company and, in each case, any persons closely
associated with them, are subject to the
Company’s Share Dealing Code.
Certain restrictions, which are customary for a
listed company, apply to transfers of shares in the
Company. The Board may refuse to register an
instrument of transfer of any share which is not
afully paid share and of a certificated share at its
discretion unless it is:
• lodged, duly stamped or duly certified, at the
offices of the Company’s registrar or such other
place as the Board may specify and is
accompanied by the certificate for the shares to
which it relates and such other evidence as the
Board may reasonably require to show the right
of the transferor to make the transfer;
• in respect of only one class of share; and
• in favour of not more than four transferees.
Registration of a transfer of an uncertificated
share may be refused in the circumstances set
out in the uncertificated securities rules, and
where, in the case of a transfer to joint holders,
the number of joint holders to whom the
uncertificated share is to be transferred
exceedsfour.
In addition, no instrument of transfer for
certificated shares shall be registered if the
transferor has been served with a restriction
notice as defined in the Company’s Articles of
Association (the ‘Articles’) after failure to provide
the Company with information concerning
certaininterests in the Company’s shares
required to be provided under the Companies Act
2006, unless the transfer is shown to the Board
tobe pursuant to an arm’s length sale. The Board
has the power to procure that uncertificated
shares are converted into certificated shares
andkept in certificated form for as long as the
Board requires.
The Company is not aware of any
agreementsbetween shareholders that may
result in any restriction of the transfer of shares
or voting rights.
Restrictions on voting rights
A member shall not be entitled to vote, unless the
Board otherwise decides, at any general meeting
or class meeting in respect of any shares held by
them if any call or other sums payable remain
unpaid. Currently, all issued shares are fully paid.
In addition, no member shall be entitled to vote if
they have been served with a restriction notice
after failing to provide the Company with
information concerning certain interests in the
Company’s shares required to be provided under
the Companies Act 2006. Votes may be exercised
in person or by proxy. The Articles currently
provide a deadline for submission of proxy forms
of 48 hours before the relevant meeting, 24 hours
before a poll is taken if such poll is taken more
than 48 hours after it was demanded or during
the meeting at which the poll was demanded if
the poll is not taken straight away but is taken not
more than 48 hours after it was demanded.
Purchase of own shares
At the 2023 AGM, shareholders gave the Company
authority to purchase up to a maximum amount
equivalent to approximately 10% of its issued
share capital. During the year ended 31
December 2023, the Company did not purchase
any of its own shares pursuant to this authority
orthe authority granted at the 2022 AGM and
noshares have been purchased between
31December 2023 and 26 February 2024.
As a result, directors again propose to seek the
equivalent authority at the 2024 AGM.
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Bunzl plc
Annual Report 2023 147

OTHER STATUTORY INFORMATION continued
Directors
Directors may be elected by ordinary resolution
at a duly convened general meeting or appointed
by the Board. Under the Articles, the minimum
number of directors shall be two and the
maximum shall be 15. In accordance with the
Articles, at every annual general meeting all the
directors at the date of the notice convening the
annual general meeting shall retire from office
and may offer themselves for re-appointment
bythe members. The Board may also appoint
aperson willing to act as a director during the
year either to fill a vacancy or as an additional
director but so that the total number of directors
shall not at any time exceed 15. However, such
appointee shall only hold office until the next
AGMof the Company.
In addition to any power to remove a director
from office conferred by the Companies Act 2006,
the Company may also by special resolution
remove a director from office before the
expiration of his or her period of office under
theArticles.
The office of a director shall also be vacated
pursuant to the Articles if the director:
• resigns by giving notice in writing sent to or
received at the office or at an address specified
by the Company for the purposes of
communication by electronic means or
tendered at a meeting of the Board and that
resignation becomes effective, or is asked to
resign by all of the other directors who are not
less than three in number; or
• is or has been suffering from mental or physical
ill health and the Board resolves that his or her
office be vacated; or
• is absent without permission from Board
meetings for six consecutive months and the
Board resolves that his or her office be vacated;
or
• becomes bankrupt or compounds with his or
her creditors generally; or
• is prohibited by law from being a director; or
• ceases to be a director by virtue of any
provisions of the Companies Act 2006 or is
removed from office pursuant to the Articles.
Biographical details of all of the current directors
are set out on pages 90 and 91. Each of the
directors will retire and offer themselves for
re-appointment at the forthcoming AGM.
Directors’ interests in the Company’s ordinary
shares are shown in Note 24 to the consolidated
financial statements. None of the directors were
materially interested in any contract of
significance with the Company or any of its
subsidiary undertakings during or at the end of
2023. Information relating to the directors’ service
agreements, their remuneration for the year and
details of the directors’ share options under the
Company’s share option schemes and awards
under the Long Term Incentive Plan and
DeferredAnnual Share Bonus Scheme are set
outin the Directors’ remuneration report on
pages 122 to 146.
Powers of the directors
Subject to the Articles, the Companies Act 2006
and any directions given by the Company by
special resolution, the business of the Company is
managed by the Board who may exercise all
powers of the Company. The Board may, by power
of attorney or otherwise, appoint any person or
persons to be the agent or agents of the Company
for such purposes and on such conditions as the
Board determines.
Directors’ indemnities
Indemnities were in force throughout 2023 and
remain in force as at the date of this report under
which the Company has agreed to indemnify the
directors and the Company Secretary, in addition
to other senior executives who are directors of
subsidiaries of the Company, to the extent
permitted by law and the Articles in respect of all
losses arising out of, or in connection with, the
execution of their powers, duties and
responsibilities as a director or officer of the
Company or any of its subsidiaries.
Amendment of articles
Any amendments to the Articles may be made in
accordance with the provisions of the Companies
Act 2006 by way of a special resolution of the
Company’s shareholders at a general meeting.
Environmental and social
responsibility
The directors recognise that the Company is part
of a wider community and that it has a
responsibility to act in a way that respects the
environment and social and community issues.
Further information relating to the Company’s
approach to these matters is set out in the
Sustainability report on pages 44 to 62.
Greenhouse gas emissions
Information relating to greenhouse gas emissions
has been set out in the ESG appendix on pages
211 to 220.
Employment policies
The employment policies of the Group have been
developed to meet the needs of its different
business areas and the locations in which they
operate worldwide, embodying the principles of
equal opportunity. The Group has standards of
business conduct with which it expects all its
employees to comply. Bunzl encourages the
involvement of its employees in the performance
of the business in which they are employed and
aims to achieve a sense of shared commitment.
Inaddition to a regular magazine, which provides
a variety of information on activities and
developments within the Group and incorporates
half year and annual financial reports,
announcements are periodically circulated to give
details of corporate and employee matters,
together with a number of subsidiary or business
area publications dealing with activities in specific
parts of the Group.
It is the Group’s policy that applicants with a
disability should be considered for employment
and career development on the basis of their
aptitudes and abilities. Employees who develop a
disability during their working life will be retained
in employment wherever possible and given help
with rehabilitation and training.
Further information relating to the Group’s
employees can be found in the Our people
section on pages 34 to 39.
Significant agreements
The Company’s wholly owned subsidiary,
BunzlFinance plc, has a number of bilateral loan
facilities with a range of different counterparties,
all of which are guaranteed by the Company, are
in substantially the same form and are repayable
at the option of the lender in the event of a
change of control of the Company. Similar change
of control provisions in relation to the Company
are included in the US dollar, sterling and euro
USprivate placement notes and the senior
unsecured bonds (which are listed on the Main
Market and International Securities Market of
theLondon Stock Exchange), all of which have
been entered into by Bunzl Finance plc and the
Company and are also guaranteed by
theCompany.
Political donations
During 2023, no contributions were made for
political purposes.
Use of financial instruments
Information on the use of financial instruments
can be found in the Financial review on pages 80
to 86 and in the Notes to the financial statements
on pages 154 to 188.
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Disclosures required under UK Listing
Rule 9.8.4
Apart from the dividend waiver which has been
issued in respect of shares held by the EBT
referred to in Note 21 to the consolidated financial
statements on page 181, there are no disclosures
required to be made under UK Listing Rule 9.8.4.
External auditors
Each of the directors in office at the date of
approval of this report confirms that:
• so far as the director is aware, there is no
relevant audit information of which the Group
and the Company’s auditors are unaware; and
• the director has taken all steps that he or she
ought to have taken as a director in order to
make the director aware of any relevant audit
information and to establish that the Group
and the Company’s auditors are aware of that
information.
This confirmation is given and should be
interpreted in accordance with the provisions of
section 418 of the Companies Act 2006.
Resolutions are to be proposed at the
forthcoming AGM for the re-appointment of
PricewaterhouseCoopers LLP as auditors of the
Company, at a rate of remuneration to be
determined by the directors.
Future developments within
theGroup
An indication of likely future developments in the
Group’s business can be found in the Strategic
report on pages 2 to 87.
Strategic report and Directors’ report
Pages 2 to 87 inclusive consist of the Strategic
report and pages 88 to 149 inclusive consist of the
Directors’ report. These reports have been drawn
up and presented in accordance with, and in
reliance upon, applicable English company law
and any liability of the directors in connection
with these reports shall be subject to the
limitations and restrictions provided by such law.
The Company has chosen, in accordance with
section 414C(11) of the Companies Act 2006, to
include certain matters in its Strategic report that
would otherwise be required to be disclosed in
this Directors’ report. These matters are referred
to above and are explained in more detail in the
Strategic report on pages 2 to 87.
Substantial shareholdings
As at 31 December 2023, the Company had been notified of the following significant interests in the
issued share capital of the Company, in accordance with Rule 5 of the Financial Conduct Authority’s
Disclosure Guidance and Transparency Rules.
Shareholder
Date of
notification
Number of
shares
% of issued
share capital
Schroders plc 19.04.23 19,036,310 5.64%
The Capital Group Companies, Inc. 14.12.23 16,926,626 5.01%
Norges Bank 21.06.23 13,362,169 3.95%
No other notifications have been received between 31 December 2023 and 26 February 2024.
Under the Companies Act 2006, a safe harbour
limits the liability of directors in respect of
statements in and omissions from a strategic
report and a directors’ report. Under English law,
the directors would be liable to the Company, but
not to any third party, if the Strategic report or the
Directors’ report contain errors as a result of
recklessness or knowing misstatement or
dishonest concealment of a material fact, but
would not otherwise be liable.
The Strategic report and the Directors’
reportwere approved by the Board on
26February 2024.
By order of the Board
Suzanne Jefferies
Secretary
26 February 2024
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CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2023
Revenue
4
11,797.1
12,039.5
Operating profit
4
789.1
701.6
Finance income
6
60.4
22.3
Finance expense
6
(150.9)
(90.2)
Disposal of business
10
–
0.9
Profit before income tax
698.6
634.6
Income tax
7
(172.4)
(160.2)
Profit for the year attributable to the Company’s equity holders
526.2
474.4
Basic
8
157.1p
141.7p
Diluted
8
156.0p
140.7p
Alternative performance measures
†
Operating profit
4
789.1
701.6
Customer relationships, brands and technology amortisation
4
135.6
128.4
Acquisition related items
4
19.5
55.9
Adjusted operating profit
944.2
885.9
Finance income
6
60.4
22.3
Finance expense
6
(150.9)
(90.2)
Adjusted profit before income tax
853.7
818.0
Tax on adjusted profit
7
(213.4)
(201.2)
Adjusted profit for the year
640.3
616.8
Adjusted earnings per share
8
191.1p
184.3p
† See Note 3 on page 160 for further details of the alternative performance measures.
The Accounting policies and other Notes on pages 154 to 188 form part of these consolidated
financialstatements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2023
Profit for the year
526.2
474.4
Actuarial gain on defined benefit pension schemes
25
2.9
6.9
(Loss)/gain recognised in cash flow hedge reserve
(2.3)
10.3
Tax on items that will not be reclassified to profit or loss
7
0.5
(4.0)
Total items that will not be reclassified to profit or loss
1.1
13.2
Foreign currency translation differences on foreign operations
(126.9)
232.9
Gain/(loss) taken to equity as a result of effective net investment hedges
31.4
(38.2)
Tax on items that may be reclassified to profit or loss
7
(0.5)
0.3
Total items that may be reclassified subsequently to profit or loss
(96.0)
195.0
Other comprehensive (expense)/income for the year
(94.9)
208.2
equity holders
431.3
682.6
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CONSOLIDATED BALANCE SHEET
at 31 December 2023
Property, plant and equipment
11
159.4
137.2
Right-of-use assets
12
616.3
529.6
Intangible assets
13
3,242.1
3,093.9
Defined benefit pension assets
25
69.0
60.5
Derivative financial assets
0.1
–
Deferred tax assets
20
14.2
4.0
Total non-current assets
4,101.1
3,825.2
Inventories
15
1,621.1
1,748.6
Trade and other receivables
16
1,578.5
1,557.4
Income tax receivable
8.7
12.6
Derivative financial assets
11.7
19.0
Cash and cash equivalents
28
1,426.1
1,504.0
Total current assets
4,646.1
4,841.6
Total assets
8,747.2
8,666.8
Share capital
21
108.6
108.5
Share premium
205.2
199.4
Translation reserve
(170.2)
(74.2)
Other reserves
16.7
17.7
Retained earnings
2,806.0
2,469.5
Total equity attributable to the Company’s equity holders
2,966.3
2,720.9
Interest bearing loans and borrowings
28
1,417.1
1,574.0
Defined benefit pension liabilities
25
19.6
20.6
Other payables
17
176.1
117.2
Income tax payable
0.5
1.1
Provisions
19
75.8
50.5
Lease liabilities
27
512.4
424.0
Derivative financial liabilities
78.7
100.5
Deferred tax liabilities
20
190.1
192.7
Total non-current liabilities
2,470.3
2,480.6
Bank overdrafts
28
874.2
825.9
Interest bearing loans and borrowings
28
130.0
161.0
Trade and other payables
17
2,071.6
2,249.4
Income tax payable
47.0
40.6
Provisions
19
10.0
24.2
Lease liabilities
27
152.1
145.9
Derivative financial liabilities
25.7
18.3
Total current liabilities
3,310.6
3,465.3
Total liabilities
5,780.9
5,945.9
Total equity and liabilities
8,747.2
8,666.8
Approved by the Board of directors of Bunzl plc (Company registration number 358948) on 26 February
2024 and signed on its behalf by Frank van Zanten, Chief Executive Officer and Richard Howes, Chief
Financial Officer.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Other reserves
Retained earnings
At 1 January 2023
108.5
199.4
(74.2)
2.5
16.1
(0.9)
(63.4)
2,532.9
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 on other comprehensive expense
(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 (net of tax)
0.7
0.7
21.6
21.6
Issue of share capital
0.1
5.8
5.9
Employee trust shares
(25.2)
(25.2)
Movement on own share reserves
17.7
(17.7)
–
Share based payments (net of tax)
20.8
20.8
At 31 December 2023
108.6
205.2
(170.2)
2.5
16.1
(1.9)
(70.9)
2,876.9
2,966.3
At 31 December 2021
108.4
194.2
(269.2)
2.5
16.1
0.4
(52.9)
2,204.4
2,203.9
12.6
12.6
Restated equity at 1 January 2022
108.4
194.2
(269.2)
2.5
16.1
0.4
(52.9)
2,217.0
2,216.5
Profit for the year
474.4
474.4
Actuarial gain on defined benefit pension schemes
6.9
6.9
Foreign currency translation differences on foreign operations
232.9
232.9
Loss taken to equity as a result of effective net investment hedges
(38.2)
(38.2)
Gain recognised in cash flow hedge reserve
10.3
10.3
Income tax charge on other comprehensive income
0.3
(2.6)
(1.4)
(3.7)
Total comprehensive income
195.0
7.7
479.9
682.6
2021 interim dividend
(54.3)
(54.3)
2021 final dividend
(136.2)
(136.2)
Movement from cash flow hedge reserve to inventory (net of tax)
(9.0)
(9.0)
34.9
34.9
Issue of share capital
0.1
5.2
5.3
Employee trust shares
(34.2)
(34.2)
Movement on own share reserves
23.7
(23.7)
–
Share based payments (net of tax)
15.3
15.3
At 31 December 2022
108.5
199.4
(74.2)
2.5
16.1
(0.9)
(63.4)
2,532.9
2,720.9
1
1
1
1. During 2022, IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ became applicable for entities with a functional currency of the Turkish Lira. Following this, the results of the Group’s businesses in Turkey, along with its business in Argentina which has been subject to
hyperinflation accounting since 2018, have been adjusted for the effects of inflation in accordance with IAS 29. See Note 1 for further details.
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CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2023
Profit before income tax
698.6
634.6
net finance expense
6
90.5
67.9
customer relationships, brands and technology amortisation
13
135.6
128.4
acquisition related items
4
19.5
55.9
disposal of business
10
–
(0.9)
Adjusted operating profit
944.2
885.9
depreciation and software amortisation
30
207.2
189.5
other non-cash items
30
6.5
15.9
working capital movement
30
(28.4)
54.5
Cash generated from operations before acquisition related items
1,129.5
1,145.8
Cash outflow from acquisition related items
9
(36.9)
(20.6)
Income tax paid
(188.6)
(173.6)
Cash inflow from operating activities
904.0
951.6
Interest received
54.4
16.2
Purchase of property, plant and equipment and software
11,13
(58.3)
(46.7)
Sale of property, plant and equipment
2.1
1.0
Purchase of businesses
9
(337.7)
(243.6)
Disposal of business
10
–
49.9
Cash outflow from investing activities
(339.5)
(223.2)
Interest paid excluding interest on lease liabilities
(107.6)
(61.9)
Dividends paid
22
(209.7)
(190.5)
Increase in borrowings
–
346.4
Repayment of borrowings
(159.5)
(131.8)
Receipts/(payments) on settlement of foreign exchange contracts
21.6
(86.2)
Payment of lease liabilities – principal
27
(159.4)
(153.1)
Payment of lease liabilities – interest
27
(28.6)
(22.0)
Proceeds from issue of ordinary shares to settle share options
5.9
5.3
Proceeds from exercise of market purchase share options
46.8
36.8
Purchase of employee trust shares
(76.4)
(74.0)
Cash outflow from financing activities
(666.9)
(331.0)
(Decrease)/increase in cash, cash equivalents and overdrafts
(102.4)
397.4
Cash, cash equivalents and overdrafts at start of year
678.1
225.3
(Decrease)/increase in cash, cash equivalents and overdrafts
(102.4)
397.4
Currency translation
(23.8)
55.4
Cash, cash equivalents and overdrafts at end of year
28
551.9
678.1
Cash generated from operations before acquisition related items
1,129.5
1,145.8
Purchase of property, plant and equipment and software
(58.3)
(46.7)
Sale of property, plant and equipment
2.1
1.0
Payment of lease liabilities
27
(188.0)
(175.1)
Operating cash flow
885.3
925.0
Adjusted operating profit
944.2
885.9
Add back depreciation of right-of-use assets
12
166.1
151.1
Deduct payment of lease liabilities
27
(188.0)
(175.1)
Lease adjusted operating profit
922.3
861.9
operating profit)
96%
107%
Operating cash flow
885.3
925.0
Net interest paid excluding interest on lease liabilities
(53.2)
(45.7)
Income tax paid
(188.6)
(173.6)
Free cash flow
643.5
705.7
†
† See Note 3 on page 160 for further details of the alternative performance measures.
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NOTES
1 Basis of preparation
Bunzl plc (the ‘Company’) is a public company, which is limited by shares and is listed on the London Stock
Exchange. The Company is incorporated and domiciled in the United Kingdom and is registered in England
and Wales.
a. Basis of accounting
The consolidated financial statements for the year ended 31 December 2023 have been approved by the
Board of directors of Bunzl plc. They are prepared in accordance with UK-adopted International Accounting
Standards (‘IASs’) in conformity with the requirements of the Companies Act 2006 and the applicable legal
requirements of the Companies Act 2006. The consolidated financial statements also comply fully with
International Financial Reporting Standards (‘IFRSs’) as issued by the International Accounting Standards
Board (‘IASB’). They are prepared under the historical cost convention with the exception of certain items
which are measured at fair value as described in the accounting policies below.
(i) 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 financial statements.
In reaching this conclusion, the directors noted the Group’s strong operating cash flow performance in 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 June 2025 starting with a base case projection derived from the Group’s
2024 Budget excluding any non-committed acquisition spend or changes in funding. The resilience of the
Group to a range of severe but plausible downside scenarios was factored into the directors’ considerations
through two levels of stress testing against the base case projection.
These severe but plausible downside scenarios included the following assumptions:
• 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
• A 25% reduction in adjusted operating profit from a more severe impact from the crystallisation of the
principal strategic and operational risks to the Group’s organic growth and a 20% increase in working
capital
In addition, the Group has carried out reverse stress tests against the base case to determine the level of
performance that would result in a breach of financial covenants. In order for a breach of covenants to occur
during the 18 month period to the end of June 2025 the Group would need to experience a reduction in
EBITDA of over 65% compared to the base case.
In the first two stress tests 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, which take into account reasonably possible changes in trading performance,
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.
(ii) Impact of Hyperinflation on the financial statements at 31 December 2023
The Group’s financial statements include the results and financial position of its Turkish and Argentinian
operations restated to the measuring unit current at the end of the year, with hyperinflationary gains and
losses in respect of monetary items being reported in finance expense. Comparative amounts presented
in the 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 year ended 31
December 2023 was an increase of 65% (2022: increase of 64%) in Turkey and an increase of 210% (2022:
increase of 95%) in Argentina.
IAS 29 requires that the income statement is adjusted for inflation in the year and translated at the year 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 year
ended 31 December 2023, this resulted in an increase in goodwill of £8.4m (2022: £16.4m) and a net
increase in other intangibles of £0.4m (2022: £12.3m before impairment charges). The impacts on other
non-monetary assets and liabilities were immaterial. The impact to retained earnings during the year was
a gain of £21.6m (2022: gain of £47.5m). The total impact to the Consolidated income statement during the
year was a charge of £11.0m (2022: £21.2m) to profit after tax from hyperinflation accounting adjustments,
comprising a £9.5m adverse impact (2022: £18.7m adverse impact) on adjusted profit before tax,
increased customer relationships amortisation of £0.2m (2022: £1.8m) and an increased tax charge of £1.3m
(2022: £0.7m).
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 year, 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.
b. Newly adopted accounting policies
There are no new standards or amendments to existing standards that are effective that have had
a material impact on the Group, nor does the Group anticipate any new or revised standards and
interpretations that are effective from 1 January 2024 and beyond to have a material impact on its
consolidated results or financial position.
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2 Accounting policies
The accounting policies set out below have, unless otherwise stated, been applied consistently to all years
presented in the consolidated financial statements.
a. Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group is either exposed or has
rights to variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases. A list of all of the Company’s subsidiary
undertakings is included in the Related undertakings note in the Shareholder information section on
pages 202 to 207 and is subject to audit. The results of all of the subsidiary undertakings are included
in full in these consolidated financial statements.
The following UK subsidiaries are exempt from the requirements under the Companies Act 2006 relating to
the audit of individual financial statements by virtue of section 479A of the Act.
Company Name
Registered number
Bunzl American Holdings (No. 1) Limited
02865710
Bunzl American Holdings (No. 2) Limited
05286676
Bunzl Holding GTL Limited
0685352
Bunzl Holding LCE Limited
0970892
Bunzl Mexico Holdings 1 Limited
13558260
Bunzl Mexico Holdings 2 Limited
13558193
Bunzl Overseas Holdings Limited
02865701
Bunzl Overseas Holdings (No. 2) Limited
02090880
Bunzl Overseas Holdings (No. 3) Limited
08224950
Henares Limited
06387342
Yorse No. 1 Limited
04373660
Yorse No. 3 Limited
02317609
Selectuser Limited
03829908
(ii) Business combinations
The acquisition method of accounting is used to account for the acquisition of subsidiaries. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at fair value at the acquisition date. The consideration paid or payable in respect of acquisitions
comprises amounts paid on completion and deferred consideration, excluding payments which are
contingent on the continued employment of former owners of businesses acquired. The excess of the
consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Payments
that are contingent on future employment and transaction costs and expenses such as professional fees
are charged to the income statement.
When less than 100% of the issued share capital of a subsidiary is acquired and the acquisition includes
an option to purchase the remaining share capital of the subsidiary, the anticipated acquisition method is
applied, where judged appropriate to do so based on the risks and rewards associated with the option to
purchase, meaning that no non-controlling interest is recognised. A liability is carried on the balance sheet
equal to the fair value of the option and this is revised to fair value at each reporting date with differences
being recorded in acquisition related items in the income statement.
(iii) Disposal of businesses
Where a subsidiary undertaking is sold, the profit or loss on disposal is calculated as the difference between
the aggregate of the fair value of the consideration received and the carrying amount of the assets and
liabilities of the subsidiary on the date of disposal less any transaction costs relating to the disposal. On the
disposal of a subsidiary with assets and liabilities denominated in foreign currency, the cumulative
translation difference associated with that subsidiary in the translation reserve is credited or debited to the
profit or loss on disposal recognised in the income statement. Cash received on disposal of businesses is
shown within investing activities in the Consolidated cash flow statement, net of cash, cash equivalents and
overdrafts disposed of and transaction costs paid.
(iv) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup
transactions are eliminated in preparing the consolidated financial statements.
b. Foreign currency
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at
the exchange rate prevailing at that date. Foreign exchange differences arising on translation are recognised
in the income statement, unless they qualify for cash flow or net investment hedge accounting treatment, in
which case the effective portion is recognised directly in other comprehensive income.
Assets and liabilities of foreign operations are translated at the exchange rate prevailing at the balance sheet
date. Income and expenses of foreign operations are translated at average exchange rates with the
exception of subsidiaries in hyperinflationary economies that are translated at the closing rate at the end of
the year. All resulting exchange differences, including exchange differences arising from the translation of
borrowings and other financial instruments designated as hedges of such balances, are recognised directly
in other comprehensive income and accumulated in the translation reserve. Differences that have arisen
since 1 January 2004, the date of transition to IFRS, are presented in this separate component of equity.
c. Revenue
The Group is principally engaged in the delivery of goods to customers representing a single performance
obligation which is satisfied upon delivery of the relevant goods. Revenue related to the provision of services
is recognised when the service is provided, which for the majority of the Group’s service revenue represents
a single performance obligation. Revenue is not recognised if there is significant uncertainty regarding
recovery of the consideration due.
Revenue is valued at invoiced amounts, excluding sales taxes and including estimates for variable
consideration where relevant, such as returns and discounts, for which a liability is recognised as required.
Returns and early settlement discount liabilities are based on experience over an appropriate period
whereas volume discount liabilities are based on agreements with customers and expected volumes.
d. Cost of goods sold
Cost of goods sold consists of the cost of the inventories sold or disposed of in the period where the cost
of inventories is net of supplier rebate income related to those inventories.
e. Supplier rebates
The Group has various rebate arrangements with a number of suppliers. Some of these arrangements are
based on the volume of products purchased and others are based on the volume of products sold. Supplier
rebate income is recognised in cost of goods sold concurrent with the sale of the inventories to which it
relates and is calculated by reference to the expected consideration receivable from each rebate
arrangement. Substantially all supplier rebate income is unconditional and non-judgemental. Supplier
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rebate income is not recognised if there is significant uncertainty regarding recovery of the amount due.
Supplier rebate income accrued but not yet received is included in other receivables.
f. Share based payments
The Group operates a number of equity settled share based payment compensation plans. Details of these
plans are outlined in Note 21 and the Directors’ remuneration report. The total expected expense is based
on the fair value of options and other share based incentives on the grant date, calculated using a valuation
model, and is spread over the expected vesting period with a corresponding credit to equity.
g. Leases
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, comprising the initial amount of the lease liability plus any
initial direct costs incurred and any lease payments made at or before the lease commencement date, less
any lease incentives received. The right-of-use asset is subsequently depreciated using the straight line
method from the commencement date to the earlier of the end of the useful life of the asset or the end of
the lease term. The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate implicit in the lease. If that rate cannot
readily be determined, as is the case in the vast majority of the leasing activities of the Group, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset in a similar economic environment with similar terms and conditions. The lease
liability is subsequently measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index/rate or a change in the
Group’s assessment of whether it will exercise an extension or termination option. When the lease liability
is remeasured, a corresponding adjustment is made to the right-of-use asset.
Judgements are involved in determining the lease term, particularly because termination options are
included in a number of property leases across the Group to facilitate operational flexibility. The majority
of termination options held are exercisable only by the Group and not by the respective lessor. In
determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise a termination option. Periods after the date of a termination option are only included
in the lease term if it is reasonably certain that the lease will not be terminated. The assessment of the lease
term is reviewed if a significant event or a significant change in circumstances occurs that is within the
control of the Group.
Payments associated with short term leases and leases of low value assets are recognised on a straight line
basis as an expense in profit or loss. Short term leases are leases with a lease term of 12 months or less.
Low value assets are assets with a value of less than £5,000 when new, typically small items of IT equipment,
office equipment and office furniture.
h. Income tax
Income tax in the income statement comprises current and deferred tax. Income tax is recognised in the
income statement except to the extent that it relates to items recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable or recoverable on the taxable income or loss for the year using tax
rates enacted or substantively enacted at the balance sheet date and any adjustments in respect of prior
years. Current tax payable is recognised when it is probable that the Group will be required to settle the
obligation. The Group’s policy for accounting for current tax payable or receivable where it is uncertain is
described in more detail in Note 2y – Sources of estimation uncertainty – Taxation.
Deferred tax is provided using the balance sheet liability method providing for temporary differences arising
between tax bases and carrying amounts in the consolidated financial statements. Deferred tax is
measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is not recognised for the following temporary differences: goodwill not deductible for tax
purposes, the initial recognition of assets and liabilities that affect neither accounting nor taxable profits and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the
foreseeable future and where the Company controls the timing of the reversal. A deferred tax asset is
recognised only to the extent that it is probable that future taxable profit will be available against which the
temporary difference can be utilised.
i. Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any
impairment losses. The carrying values of property, plant and equipment are periodically reviewed for
impairment when events or changes in circumstances indicate that the carrying values may not be
recoverable. Where parts of an item of property, plant and equipment have different useful lives, they
are accounted for as separate items.
j. Depreciation
Depreciation is charged to the income statement on a straight line basis to write off cost less estimated
residual value over the assets’ estimated remaining useful lives. The estimated useful lives are as follows:
Buildings 50 years (or depreciated over life of lease if shorter than 50 years)
Plant and machinery 3 to 12 years
Fixtures, fittings and equipment 3 to 12 years
Freehold land Not depreciated
Assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each balance sheet date.
k. Intangible assets
(i) Goodwill
Acquisitions are accounted for using the acquisition method. As permitted by IFRS 1 ‘First-time Adoption
of International Financial Reporting Standards’, the Group chose to apply IFRS 3 ‘Business Combinations’
from 1 January 2004 and elected not to restate previous business combinations. For acquisitions made
before 1 January 2004, goodwill represents the amount previously recorded under UK Generally Accepted
Accounting Practice (‘UK GAAP’). For acquisitions that occurred between 1 January 2004 and 31 December
2009, goodwill represents the cost of the business combination in excess of the fair value of the identifiable
assets, liabilities and contingent liabilities acquired. For acquisitions that have occurred on or after 1 January
2010, goodwill represents the cost of the business combination (excluding payments contingent on future
employment and transaction costs and expenses) in excess of the fair value of the identifiable assets,
liabilities and contingent liabilities acquired. Goodwill is allocated to cash generating units (‘CGUs’) and is
tested annually for impairment. Negative goodwill arising on acquisition is recognised immediately in the
income statement.
(ii) Customer relationships, brands and technology
Customer relationships, brands and technology intangible assets acquired in a business combination are
recognised on acquisition and recorded at fair value. Subsequent to initial recognition, customer
relationships, brands and technology intangible assets are stated at cost less accumulated amortisation and
any impairment losses. Amortisation is charged to the income statement on a straight line basis over the
estimated useful economic lives which range from 3 to 19 years.
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(iii) Software
Software is stated at historical cost less accumulated amortisation and any impairment losses. The carrying
values of software are periodically reviewed for impairment when events or changes in circumstances
indicate that the carrying values may not be recoverable. Amortisation is charged to the income statement
on a straight line basis over the estimated useful economic lives which range from 3 to 10 years.
l. Impairment
The carrying amounts of the Group’s assets are reviewed annually to determine if there is any indication of
impairment. If any such indication exists, the assets’ recoverable amounts are estimated. The recoverable
amounts of assets carried at amortised cost are calculated as the present value of estimated future cash
flows, discounted at appropriate pre-tax discount rates. The recoverable amounts of other assets are the
greater of their fair value less the costs of disposal and the value in use. In assessing the value in use, the
estimated future cash flows are discounted to their present values using appropriate pre-tax discount rates.
Impairment losses are recognised when the carrying amount of an asset or CGU exceeds its recoverable
amount, with impairment losses being recognised in the income statement.
m. Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of inventories is based on the
first-in first-out principle and comprises the purchase price, net of any related supplier volume rebates, plus
import duties and other taxes, inbound freight and haulage costs and other related costs incurred to bring
the product to its present location and condition. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated cost of completion and estimated cost necessary to make
the sale. Provision is made for obsolete, slow moving or defective items and market price movements where
appropriate.
n. Trade and other receivables
Trade and other receivables are initially measured at fair value, which for trade receivables is equal to the
consideration expected to be received from the satisfaction of performance obligations, plus any directly
attributable transaction costs. Subsequent to initial recognition these assets are measured at amortised
cost less any provision for impairment losses including expected credit losses. In accordance with IFRS 9
‘Financial Instruments’ the Group applies the simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses,
trade receivables have been grouped based on shared credit risk characteristics such as the ageing of the
debt and the credit risk of the customers. An historical credit loss rate is then calculated for each group and
adjusted to reflect expectations about future credit losses. Inputs and assumptions used for expected
credit loss provisions are based on local operating company historical experience and expectations about
future credit losses. The Group does not have any significant contract assets.
o. Trade and other payables
Trade and other payables are initially measured at fair value including any directly attributable transaction
costs. Subsequent to initial recognition these liabilities are measured at amortised cost. The Group has
contract liabilities in the form of deferred income which arises from consideration received in advance of the
satisfaction of performance obligations.
p. Financial instruments
Classification and measurement
Under IFRS 9, financial instruments are initially measured at fair value with subsequent measurement
depending upon the classification of the instrument. IFRS 13 ‘Fair Value Measurement’ defines fair value
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
All non-derivative financial assets and liabilities are subsequently held at amortised cost unless they are
in a fair value hedge relationship, with the exception of money market funds which are held at fair value.
Financial assets and liabilities held in a fair value hedge relationship are held at amortised cost with a fair
value adjustment with subsequent changes in this fair value adjustment recorded in the income statement.
Derivatives and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument
and, if so, the nature of the item being hedged. The Group designates certain derivatives as either:
• a hedge of the fair value of recognised assets or liabilities or a firm commitment (‘fair value hedge’);
• a hedge of a particular risk associated with the cash flows of recognised assets and liabilities and highly
probable forecast transactions (‘cash flow hedge’); or
• a hedge of a net investment in a foreign operation (‘net investment hedge’).
The Group documents its risk management objectives and strategy for undertaking its hedge transactions.
At inception of hedge relationships, the Group documents the economic relationship between the hedging
instruments and the hedged items.
The fair value of a hedging derivative is classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining
maturity of the hedged item is 12 months or less.
(i) Fair value hedge
Where a derivative instrument is designated and qualifies as a hedge of a recognised asset or liability, all
changes in the fair value of the derivative are recognised immediately in the income statement within
finance expense. The carrying value of the hedged item is adjusted by the change in fair value that is
attributable to the risk being hedged with changes recognised in the income statement, also within finance
expense. The gain or loss relating to any ineffective portion of the hedging arrangement is recognised
immediately in the income statement.
If the hedge relationship is de-designated, then from the point of de-designation there is no further fair
valuing of the hedged item. Any previous adjustment to the carrying amount of the hedged item is
amortised over the remaining maturity of the hedged item.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in the cash flow hedge reserve within equity. The gain or loss relating to any ineffective
portion is recognised immediately in the income statement.
Where a derivative instrument is designated and qualifies as a hedge of a forecast transaction, only the
change in fair value of the forward contract related to the spot component is designated as the hedging
instrument. Gains or losses relating to the effective portion of the change in the spot component of the
forward contract are initially recognised in the cash flow hedge reserve within equity. The change in the
forward element of the contract that relates to the hedged item is recognised in the income statement.
Gains or losses accumulated in equity are reclassified to the income statement when the hedged item
affects profit or loss. When the hedged item results in the recognition of a non-financial asset, the gains
or losses accumulated in equity are transferred from equity and included in the carrying amount of the
non-financial asset, with the deferred gains or losses ultimately being recognised in the income statement
as the non-financial asset affects profit or loss. This transfer is not a reclassification adjustment.
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p. Financial instruments continued
When a hedging instrument expires, any cumulative deferred gain/loss in equity relating to that instrument
remains in equity until the forecast transaction occurs at which point it is reclassified to the income
statement. When the forecast transaction is no longer expected to occur, the cumulative deferred gain/loss
recorded in equity is immediately reclassified to the income statement.
(iii) Net investment hedge
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net
investment in foreign operations are recognised directly in equity to the extent the hedge is effective and
are accumulated in a separate reserve within equity. To the extent that the hedge is ineffective such
differences are recognised in the income statement.
(iv) Other derivative instruments
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any
derivative instrument that does not qualify for hedge accounting are recognised immediately in the income
statement.
q. Cash, cash equivalents and overdrafts
Cash and cash equivalents, as reported in the balance sheet, comprises cash at bank and in hand and
money market funds. Cash at bank and in hand includes cash balances and short term deposits with
maturities of three months or less from the date the deposit is made.
Cash, cash equivalents and overdrafts, as reported in the cash flow statement, comprises cash at bank and
in hand, money market funds and bank overdrafts.
r. Net debt
Net debt is defined as interest bearing loans and borrowings adjusted for the fair value of interest rate
swaps on fixed interest rate borrowings and other derivatives managing the interest rate risk and currency
profile less cash, cash equivalents and overdrafts.
s. Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation
as a result of a past event that can be reliably measured and it is probable that an outflow of economic
benefits will be required to settle the obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.
t. Investment in own shares
The cost of shares held either directly (treasury shares) or indirectly (employee benefit trust shares) is
deducted from equity. Repurchased shares are classified as treasury shares and are presented as a
deduction from total equity. When treasury shares are subsequently sold or reissued, the amount received
is recognised as an increase in equity and the resulting surplus or deficit on the transaction is recognised in
retained earnings.
At each reporting date the Group remeasures the value of the shares held in the employee benefit trust to
present them in the own shares reserve at the market value of those shares at the reporting date. This is
done through a reclassification from retained earnings to the own shares reserve. This movement has no
effect on the actual numbers of shares held by the employee benefit trust.
u. Retirement benefits
(i) Defined contribution pension schemes
A defined contribution pension scheme is a post-employment benefit scheme under which the Company
pays fixed contributions into a separate fund and will have no legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee
service in the current and prior periods. Obligations for contributions to defined contribution pension
schemes are recognised as an expense in the income statement in the periods during which services are
rendered by employees.
(ii) Defined benefit pension schemes
A defined benefit pension scheme is a post-employment benefit plan other than a defined contribution
pension scheme. Defined benefit pension schemes are recognised on the balance sheet as a defined
benefit pension asset or a defined benefit pension liability based on the difference between the fair value
of pension scheme assets and the present value of pension scheme liabilities.
The present value of pension scheme liabilities is calculated by a qualified actuary using the projected unit
method by estimating the amount of future benefit that employees have earned in return for their service
in the current and prior periods, discounted using the rate applicable to AA rated corporate bonds that have
a similar maturity and currency to the pension scheme liabilities. The fair value of any pension scheme
assets (at bid price) is deducted from the present value of pension scheme liabilities to determine the net
deficit or surplus of each scheme. Remeasurements arising from defined benefit pension schemes
comprise actuarial gains and losses on pension scheme liabilities and the actual return on pension scheme
assets excluding amounts already included in net interest. The net actuarial gain or loss for the year is
recorded in full in the statement of comprehensive income.
Current service cost, past service cost or gain and gains and losses on any settlements and curtailments
are credited or charged to the income statement. Past service cost is recognised immediately to the extent
benefits are already vested. Net interest on the net defined benefit pension liability or asset is calculated by
applying the discount rate used to measure the defined benefit pension scheme deficit or surplus at the
beginning of the year to the net defined benefit pension liability or asset at the beginning of the year. Net
interest is recorded within finance expense or finance income in the income statement.
When the valuation of a defined benefit pension scheme results in a surplus, the recognised defined benefit
pension asset is limited to the present value of benefits available in the form of any future refunds from the
pension scheme or reductions in future contributions and takes into account the adverse effect of any
minimum funding requirements.
v. Dividends
The interim dividend is recognised in the statement of changes in equity in the period in which it is paid and
the final dividend in the period in which it is approved by shareholders at the Annual General Meeting.
w. Hyperinflationary economies
Where the Group has operations in countries to which hyperinflation accounting applies, the financial
statements of the business concerned are accounted for under IAS 29 ‘Financial Reporting in
Hyperinflationary Economies’. See Note 1a(ii) for details on the impact of hyperinflation accounting in
the current year.
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x. Judgements made in applying the Group’s accounting policies
In the course of preparing the financial statements, other than judgements involved in determining lease
terms under the application of IFRS 16 ‘Leases’ and in determining estimates and assumptions (see Note 2y
below), no other judgements have been made in the process of applying the Group’s accounting policies
that have had a significant effect on the amounts recognised in the financial statements.
In measuring its right-of-use assets and lease liabilities, management is required to make judgements,
particularly in relation to lease termination options. Periods after the date of a termination option are only
included in the lease term if it is reasonably certain that the lease will not be terminated. While management
determine lease terms across the Group on a case-by-case basis, if different judgements were applied
relating to a number of leases, it could have a significant effect on the overall amounts recognised in the
financial statements.
y. Sources of estimation uncertainty
In applying the Group’s accounting policies various transactions and balances are valued using estimates
or assumptions. Should these estimates or assumptions prove incorrect, there may be an impact on the
following year’s financial statements. As at 31 December 2023, sources of estimation uncertainty where
there was a significant risk of material adjustment to the carrying amounts of assets and liabilities within
the next financial year was limited to the following item:
Defined benefit pension schemes
The measurement of the present value of defined benefit pension scheme liabilities involves the use of
various actuarial assumptions. The Group uses independent actuarial experts to assist with the estimation
of the discount rates, inflation rates and longevity assumptions used for the measurement of defined
benefit pension scheme liabilities but the actual liabilities could be materially different. The main risks
to which the Group is exposed in relation to the valuation of the defined benefit pension schemes are
described in Note 25. The Group’s net pension asset balance as at 31 December 2023 was £46.6m
(2022: £39.9m).
While not expected to result in a material change in the carrying value of assets or liabilities in the next 12
months the following estimates or assumptions were also used in applying the Group’s accounting policies:
Accounting for business combinations
Part of the Company’s strategy is to grow through acquisitions. Acquisitions are accounted for using the
acquisition method as described in the business combinations accounting policy, Note 2a(ii), and the
goodwill accounting policy, Note 2k(i). This includes the determination of fair values for assets and liabilities
acquired, including the separate identification of intangible assets, which use assumptions and estimates
and are therefore subjective. The Group has developed a process to meet the requirements of IFRS 3
including the separate identification of customer relationships, brands and technology intangible assets
based on estimated future performance and customer attrition rates. 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. The process applied is described in Note 9.
y. Sources of estimation uncertainty continued
Recoverability of goodwill, customer relationships, brands and technology intangible assets
As noted above, part of the Company’s strategy is to grow through acquisitions which has led to material
goodwill, customer relationships, brands and technology intangible assets being recognised on the balance
sheet. Goodwill, which is allocated across CGUs, is tested annually to determine if there is any indication of
impairment by comparing the carrying amount of the goodwill to the recoverable amount of the CGU to
which it has been allocated. Assumptions and estimates are used to determine the recoverable amount of
each CGU, principally based on the present value of estimated future cash flows. Actual performance may
differ from management’s expectations. The estimates and assumptions used in performing impairment
testing are described in Note 13. Customer relationships, brands and technology intangible assets are also
reviewed annually for indicators of impairment and if an indicator of impairment exists then similar
recoverability testing, involving the use of estimates and assumptions, is performed for the business to
which the customer relationships, brands and technology intangible assets relate. The useful economic lives
of customer relationships, brands and technology intangible assets are also reviewed at least annually, with
any revisions to the original estimated useful economic lives accounted for prospectively. As at 31 December
2023 the goodwill balance was £2,008.9m (2022: £1,931.6m), the amount of customer relationships
intangible assets was £1,150.8m (2022: £1,090.9m), the amount of brands intangible assets was £41.1m
(2022: £34.9m) and the amount of technology intangible assets was £7.5m (2022: £9.1m).
Trade receivables and inventory provisions
Due to the uncertainty created by the Covid-19 pandemic and the continuing challenging economic
conditions, trade receivables and inventory provisions are considered to be a source of estimation
uncertainty. In 2020 and 2021, the Group saw increases in provisions for expected credit losses on trade
receivables and slow moving inventory provisions, and additional provisions were made as a result of market
price deflation on certain Covid-19 products. During 2023, the Group has seen a net utilisation of
approximately £25m in trade receivables and slow moving inventory provisions (2022: net utilisation of
approximately £5m), and also some utilisation of the residual provisions set up in the prior year for market
price movements on certain Covid-19 products; the remaining market price risk on these products is no
longer significant. As at 31 December 2023, the Group carried trade receivables provisions of £34.5m (2022:
£29.1m) and provisions for slow moving, obsolete or defective inventories and market price movements of
£154.2m (2022: £179.9m).
Taxation
The Group operates in many countries and is therefore subject to tax laws in a number of different tax
jurisdictions. The amount of tax payable or receivable on profits or losses for any period is subject to the
agreement of the tax authority in each respective jurisdiction and the tax liability or asset position is open to
review for several years after the relevant accounting period ends. In determining the provisions for income
taxes, management is required to make assumptions based on interpretations of tax statute and case law,
which it does after taking account of professional advice and prior experience.
The majority of the Group’s tax payable balance of £47.5m (2022: £41.7m) relates to provisions for uncertain
tax matters. Uncertainties in respect of enquiries and additional tax assessments raised by tax authorities
are measured by management according to the guidance provided by IFRIC 23 ‘Uncertainty over Income Tax
Treatments’ but the amounts ultimately payable or receivable may differ from the amounts of any provisions
recognised in the consolidated financial statements as a result of the estimates and assumptions used.
Management does not consider there to be any significant risks of material adjustment within the next
financial year because tax provisions cover a range of matters across multiple tax jurisdictions with a variety
of timescales before such matters are expected to be concluded.
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NOTES continued
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 consolidated financial
statements and the location of the reconciliation to equivalent IFRS measures are shown and defined in the
table below:
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 and profit or loss on disposal
of businesses (reconciled in the following tables and in the Consolidated income statement)
Operating margin Adjusted operating profit as a percentage of revenue
Adjusted profit
before income tax
Profit before income tax, customer relationships, brands and technology amortisation,
acquisition related items, non-recurring pension scheme charges and profit or loss on disposal
of businesses (reconciled in the following tables)
Adjusted profit
for the year
Profit for the year before customer relationships, brands and technology amortisation,
acquisition related items, non-recurring pension scheme charges, 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 7)
Adjusted earnings
per share
Adjusted profit for the year divided by the weighted average number of ordinary shares in issue
(reconciled in the following tables and in Note 8)
Adjusted diluted
earnings per share
Adjusted profit for the year divided by the diluted weighted average number of ordinary shares
(reconciled in Note 8)
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 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 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 Consolidated cash flow statement)
Cash conversion Operating cash flow as a percentage of lease adjusted operating profit (as shown in the
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 14)
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 liabilities,
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 28)
Constant
exchange rates
Growth rates at constant exchange rates are calculated by retranslating the results for prior
years at the average rates for the year ended 31 December 2023 so that they can be compared
without the distorting impact of changes caused by foreign exchange translation. The principal
exchange rates used for 2023 and 2022 can be found in the Financial review on page 80
The definition of 'Dividend cover' has been added to the list of alternative performance measures in the
year. All other alternative performance measures have been calculated consistently with the methods
applied in the consolidated financial statements for the year ended 31 December 2022. 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, profit or loss on disposal of businesses and any associated tax, where relevant.
Acquisition related items comprise 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. 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
relate to non-recurring charges arising from the Group’s participation in a number of defined benefit
pension schemes. In the year ended 31 December 2023 and the year ended 31 December 2022 there were
no non-recurring pension scheme charges. Disposal of business relates to the profit on disposal of the
Group’s UK Healthcare division in the year ended 31 December 2022. 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 charges that nevertheless do impact the Group’s cash flow and GAAP financial performance.
Other alternative performance measures, including the Group’s key performance indicators which are set
out and defined on pages 40 and 41, are used to monitor the performance of the Group and a number of
these are based on, or derived from, the alternative performance measures noted above.
3 Alternative performance measures
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Reconciliation of alternative performance measures to IFRS measures
The principal profit related alternative performance measures, being adjusted operating profit, adjusted profit before income tax, adjusted profit for the year and adjusted earnings per share, are reconciled to the most
directly reconcilable statutory measures in the tables below:
Year ended 31 December 2023
Adjusted operating profit
944.2
(135.6)
(19.5)
789.1
Operating profit
Finance income
60.4
60.4
Finance income
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
Year ended 31 December 2022
Adjusted operating profit
885.9
(128.4)
(55.9)
701.6
Operating profit
Finance income
22.3
22.3
Finance income
Finance expense
(90.2)
(90.2) Finance expense
Disposal of business
–
0.9
0.9
Disposal of business
Adjusted profit before income tax
818.0
(128.4)
(55.9)
0.9
634.6
Profit before income tax
Tax on adjusted profit
(201.2)
34.7
6.3
–
(160.2) Income tax
Adjusted profit for the year
616.8
(93.7)
(49.6)
0.9
474.4
Profit for the year
Adjusted earnings per share
184.3p
(28.0)p
(14.8)p
0.2p
141.7p
Basic earnings per share
3 Alternative performance measures continued
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NOTES continued
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. The principal
results reviewed for each business area are revenue and adjusted operating profit.
Year ended 31 December 2023
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
and technology amortisation
(57.1)
(43.7)
(11.1)
(23.7)
(135.6)
Acquisition related items
(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)
Disposal of business
–
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%
operating capital
49.6%
45.4%
65.5%
35.5%
46.1%
and equipment
12.3
13.5
8.7
8.1
0.2
42.8
and equipment
12.0
10.3
4.7
4.6
0.1
31.7
Additions to right-of-use assets
34.0
41.5
42.4
18.8
–
136.7
assets
83.4
38.9
24.3
18.8
0.7
166.1
Purchase of software
3.1
8.7
2.4
1.0
0.3
15.5
Software amortisation
3.4
2.7
2.1
0.9
0.3
9.4
Year ended 31 December 2022
Revenue
7,366.0
2,173.4
1,442.5
1,057.6
12,039.5
Adjusted operating profit/(loss)
511.5
195.1
95.3
111.7
(27.7)
885.9
and technology amortisation
(57.3)
(40.6)
(11.0)
(19.5)
(128.4)
Acquisition related items
(15.8)
(27.5)
(7.4)
(5.2)
(55.9)
Operating profit/(loss)
438.4
127.0
76.9
87.0
(27.7)
701.6
Finance income
22.3
Finance expense
(90.2)
Disposal of business
0.9
Profit before income tax
634.6
Adjusted profit before
income tax
818.0
Income tax
(160.2)
Profit for the year
474.4
Operating margin
6.9%
9.0%
6.6%
10.6%
7.4%
operating capital
45.4%
43.7%
52.2%
35.3%
43.0%
and equipment
13.0
9.7
5.9
5.8
0.3
34.7
and equipment
11.3
9.1
4.8
4.3
0.1
29.6
Additions to right-of-use assets
65.8
15.3
18.9
23.3
–
123.3
assets
74.7
33.6
23.8
18.4
0.6
151.1
Purchase of software
3.1
5.2
2.6
0.9
0.2
12.0
Software amortisation
3.7
2.2
1.6
1.1
0.2
8.8
4 Segment analysis
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Deferred consideration payments relating to the retention of former owners of
businesses acquired
37.3
24.9
Transaction costs and expenses
18.1
10.9
Adjustments to previously estimated earn outs
(35.9)
7.1
19.5
42.9
Customer relationships impairment charges (Note 13)
–
13.0
19.5
55.9
Reportable segments are determined based on quantitative thresholds in accordance with IFRS 8
‘Operating Segments’. The three business areas of North America, Continental Europe and UK & Ireland
are operating segments that meet the quantitative thresholds for reportable segments and are therefore
disclosed separately above. The Rest of the World business area contains businesses in Latin America and
Asia Pacific which individually do not meet the quantitative thresholds for separate disclosure as reportable
segments. Rest of the World is therefore an ‘other’ segment that is disclosed above as a reportable segment
as this information is considered to be useful to users of the financial statements and it also helps to
reconcile the results of the reportable segments to the Group’s consolidated results.
The revenue presented relates to external customers. Sales between the business areas are not material.
Each of the business areas supplies a range of products to customers operating primarily in the grocery,
foodservice, safety, cleaning & hygiene, retail and healthcare market sectors but results are not monitored
on this basis. The performance of the four business areas is assessed by reference to adjusted operating
profit and this measure also represents the segment results for the purposes of reporting in accordance
with IFRS 8. Debt and associated interest is managed at a Group level and therefore has not been allocated
across the business areas.
In the year ended 31 December 2023 the Group had no customer that represented 10% or more of total
Group revenue (2022: no customers).
As noted above, the businesses within each operating segment operate in a number of different countries
and sell products across a range of market sectors, with the vast majority of revenue generated from the
delivery of goods to customers. The following table provides a breakdown of revenue by market sector.
The other category covers a wide range of market sectors, none of which is sufficiently material to warrant
separate disclosure.
Foodservice
3,383.4
3,592.9
Grocery
3,136.6
3,139.3
Safety
1,835.7
1,786.8
Retail
1,032.8
1,153.7
Cleaning & Hygiene
1,218.6
1,124.5
Healthcare
679.6
839.0
Other
510.4
403.3
11,797.1
12,039.5
Revenue attributable to the UK, the parent company’s country of domicile, for the year ended 31 December
2023 was £1,270.3m, representing 11% of the Group’s total (2022: £1,354.5m, representing 11% of the
Group’s total). Revenue attributable to foreign countries in total was £10,526.8m, representing 89% of the
Group’s total (2022: £10,685.0m, representing 89% of the Group’s total). Six foreign countries account for the
majority of the revenue attributable to foreign countries, these being USA, Canada, France, the Netherlands,
Australia and Brazil. These six foreign countries account for 73% of the Group’s revenue (2022: 74%).
Non-current assets attributable to the UK, the parent company’s country of domicile, for the year ended
31 December 2023 were £508.7m, representing 13% of the Group’s total (2022 restated: £486.6m,
representing 13% of the Group’s total). Non-current assets attributable to foreign countries in total were
£3,509.2m, representing 87% of the Group’s total (2022 restated: £3,274.1m, representing 87% of the
Group’s total). Six foreign countries account for the majority of the non-current assets attributable to foreign
countries, these being USA, Canada, France, the Netherlands, Australia and Brazil. These six foreign
countries account for 66% of the Group’s total non-current assets (2022 restated: 65%). The 2022
comparatives have been restated to exclude non-current assets of £64.5m related to defined benefit
pension schemes and deferred tax in accordance with IFRS 8 ‘Operating Segments’.
The table below reconciles segment assets and liabilities to the Group’s total assets and total liabilities.
Unallocated assets and liabilities include corporate assets and liabilities, tax assets and liabilities, cash at
bank and in hand, bank overdrafts, interest bearing loans and borrowings, derivative financial assets and
liabilities and defined benefit pension assets and liabilities.
At 31 December 2023
Segment assets
3,129.1
2,043.5
942.2
1,080.3
7,195.1
Unallocated assets
1,552.1
1,552.1
Total assets
3,129.1
2,043.5
942.2
1,080.3
1,552.1
8,747.2
Segment liabilities
1,284.4
763.8
522.7
342.0
2,912.9
Unallocated liabilities
2,868.0
2,868.0
Total liabilities
1,284.4
763.8
522.7
342.0
2,868.0
5,780.9
At 31 December 2022
Segment assets
3,268.8
1,956.5
939.2
878.8
7,043.3
Unallocated assets
1,623.5
1,623.5
Total assets
3,268.8
1,956.5
939.2
878.8
1,623.5
8,666.8
Segment liabilities
1,363.1
768.9
516.8
279.5
2,928.3
Unallocated liabilities
3,017.6
3,017.6
Total liabilities
1,363.1
768.9
516.8
279.5
3,017.6
5,945.9
4 Segment analysis continued
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NOTES continued
5 Analysis of operating income and expenses
Cost of goods sold
8,609.2
9,015.0
Employee costs (Note 26)
1,149.8
1,085.1
Depreciation of property, plant and equipment (Note 11)
31.7
29.6
Depreciation of right-of-use assets (Note 12)
166.1
151.1
Customer relationships, brands and technology amortisation (Note 13)
135.6
128.4
Amortisation of software (Note 13)
9.4
8.8
Acquisition related items (Note 4)
19.5
55.9
Net impairment losses on trade receivables (Note 16)
2.6
3.7
Profit on disposal of property, plant and equipment
(0.6)
(0.4)
Expense relating to short term leases and low value assets
4.6
5.2
Lease and sublease income
(4.1)
(3.2)
Other operating expenses
884.2
858.7
Net operating expenses
11,008.0
11,337.9
Cost of goods sold consists of the cost of the inventories sold or disposed of in the year where the cost of
inventories is net of supplier rebate income related to those inventories.
2023
2022
Audit of these financial statements
1.0
–
1.0
0.8
–
0.8
auditors
*
in respect of:
audit of financial statements of
subsidiaries of the Company
0.4
4.2
4.6
0.5
3.6
4.1
audit related assurance services
0.1
–
0.1
0.1
–
0.1
all other services
0.3
–
0.3
0.3
–
0.3
Total auditors’ remuneration
1.8
4.2
6.0
1.7
3.6
5.3
* Including their associates.
Audit related assurance services comprise the review of the half yearly financial report for the six months
ended 30 June. All other services comprise other non-audit work which was permissible in accordance with
the Company’s policy and the prevailing regulations concerning the provision of non-audit services by the
Company’s external auditors. It is the Company’s policy to assess the non-audit services to be performed by
the Company’s auditors on a case-by-case basis to ensure adherence to the prevailing ethical standards and
regulations. Other firms are normally used by the Company to provide non-audit services. However, if the
provision of a service by the Company’s auditors is permitted and adequate safeguards are in place, it is
sometimes appropriate for this additional work to be carried out by the Company’s auditors.
The Audit Committee, which consists entirely of independent non-executive directors, reviews and approves
the level and type of non-audit work which the external auditors perform, including the fees paid for such
work, to ensure that the auditors’ objectivity and independence are not compromised. Further information
is set out in the Audit Committee’s report on pages 112 to 121 .
6 Finance income/(expense)
Interest on cash and cash equivalents
40.3
10.5
Interest income from foreign exchange contracts
16.0
9.2
Net interest income on defined benefit pension schemes in surplus
3.2
1.2
Other finance income
0.9
1.4
Finance income
60.4
22.3
Interest on loans and overdrafts
(106.7)
(58.5)
Lease interest expense
(28.6)
(22.0)
Interest expense from foreign exchange contracts
(1.5)
(0.8)
Net interest expense on defined benefit pension schemes in deficit
(1.0)
(0.8)
Fair value (loss)/gain on US private placement notes and senior bond in a
hedge relationship
(24.4)
83.2
Fair value gain/(loss) on interest rate swaps in a hedge relationship
21.8
(79.2)
Foreign exchange (loss)/gain on intercompany funding
(41.1)
126.7
forward contracts
40.5
(126.7)
Interest related to income tax
(0.1)
(0.5)
(7.2)
(10.7)
Other finance expense
(2.6)
(0.9)
Finance expense
(150.9)
(90.2)
Net finance expense
(90.5)
(67.9)
1
1. See Note 1 for further details.
The foreign exchange loss on intercompany funding 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 income statement .
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7 Income tax
current year
199.0
172.7
adjustments in respect of prior years
(6.9)
(9.2)
192.1
163.5
current year
(19.6)
(4.8)
adjustments in respect of prior years
(0.1)
1.5
(19.7)
(3.3)
Income tax on profit
172.4
160.2
In assessing the underlying performance of the Group, management uses adjusted profit before income
tax. The tax effect of the adjusting items (see Note 3) 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.
Income tax on profit
172.4
160.2
Tax associated with adjusting items
41.0
41.0
Tax on adjusted profit
213.4
201.2
Profit before income tax
698.6
634.6
Adjusting items
155.1
183.4
Adjusted profit before income tax
853.7
818.0
Reported tax rate
24.7%
25.2%
Effective tax rate
25.0%
24.6%
2023
2022
schemes
2.9
(0.1)
2.8
6.9
(1.4)
5.5
on foreign operations
(126.9)
(0.5)
(127.4)
232.9
0.3
233.2
Gain/(loss) taken to equity as a result of
effective net investment hedges
31.4
–
31.4
(38.2)
–
(38.2)
reserve
(2.3)
0.6
(1.7)
10.3
(2.6)
7.7
Other comprehensive (expense)/income
(94.9)
–
(94.9)
211.9
(3.7)
208.2
Dividends
(209.7)
–
(209.7)
(190.5)
–
(190.5)
to inventory
1.0
(0.3)
0.7
(12.0)
3.0
(9.0)
Hyperinflation accounting adjustments
21.6
–
21.6
36.7
(1.8)
34.9
Issue of share capital
5.9
–
5.9
5.3
–
5.3
Employee trust shares
(25.2)
–
(25.2)
(34.2)
–
(34.2)
Share based payments
15.4
5.4
20.8
14.1
1.2
15.3
and equity
(285.9)
5.1
(280.8)
31.3
(1.3)
30.0
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NOTES continued
Factors affecting the tax charge for the year
The Group operates in many countries and is subject to different rates of income tax in those countries.
The expected tax rate is calculated as a weighted average of the tax rates in the tax jurisdictions in which
the Group operates, most of which are higher than the UK statutory rate for the year of 23.5% (2022: 19.0%).
The adjustments to the tax charge at the weighted average rate to determine the income tax on profit are
as follows:
Profit before income tax
698.6
634.6
Tax charge at weighted average rate (2023: 25.2%; 2022: 24.6%)
176.0
156.1
non-deductible expenditure
0.5
8.9
impact of intercompany finance
1.2
(2.0)
change in tax rates
(0.7)
0.4
hyperinflation accounting adjustments
3.8
4.7
prior year adjustments
(7.0)
(7.7)
other current year items
(1.4)
(0.2)
Income tax on profit
172.4
160.2
Property, plant and equipment
1.0
1.2
Defined benefit pension schemes
1.6
(0.1)
Goodwill, customer relationships, brands and technology
(20.2)
(17.4)
Provisions and accruals
(3.6)
–
Inventories
7.4
10.5
Leases
(1.1)
0.7
Other
(4.8)
1.8
Deferred tax on profit
(19.7)
(3.3)
The Group is within the scope of the OECD Pillar Two model rules which impose a minimum tax expense
in each country. Pillar Two legislation has been enacted in the UK, the country of tax residence of the
ultimate parent of the Group, as well as in several other countries in which the Group operates. The earliest
legislation is effective from 1 January 2024. Since the Pillar Two legislation was not effective during the year
ended 31 December 2023, the Group has no related current tax exposure at the balance sheet date. The
Group applies the exception to recognising and disclosing information about deferred tax assets and
liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.
The legislation imposes a top-up tax to the extent that in any country the effective tax rate according to the
Pillar Two methodology is below the 15% minimum rate. Most countries in which the Group operates are
expected to report an effective tax rate in excess of 15% and therefore to qualify for a safe harbour
exemption such that no top-up tax should apply. In countries where this is not the case there is the potential
for Pillar Two taxes to apply, but these are not expected to be material. The Group continues to refine this
assessment and analyse the future consequences of these rules.
8 Earnings per share
Profit for the year
526.2
474.4
customer relationships, brands and technology amortisation
135.6
128.4
acquisition related items
19.5
55.9
profit on disposal of business
–
(0.9)
tax credit on adjusting items
(41.0)
(41.0)
Adjusted profit for the year
640.3
616.8
2023
2022
Basic weighted average number of ordinary shares in issue (million)
335.0
334.7
Dilutive effect of employee share plans (million)
2.2
2.5
Diluted weighted average number of ordinary shares (million)
337.2
337.2
Basic earnings per share
157.1p
141.7p
Adjustment
34.0p
42.6p
Adjusted earnings per share
191.1p
184.3p
Diluted basic earnings per share
156.0p
140.7p
Adjustment
33.9p
42.2p
Adjusted diluted earnings per share
189.9p
182.9p
7 Income tax continued
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9 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 31 December 2023 the allocation period for all acquisitions completed since
1 January 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 year ended 31
December 2023 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 goodwill of £0.8m (2022: net decrease to
goodwill of £3.4m). 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 paid or payable in respect of acquisitions comprises amounts paid on completion,
deferred consideration and payments which are contingent on the retention of former owners of
businesses acquired. 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. All other consideration has been allocated against the identified net assets, with the balance
recorded as goodwill. Transaction costs and expenses such as professional fees are charged to the income
statement. The acquisitions provide opportunities for further development of the Group’s activities and to
create enhanced returns. Such opportunities and the workforces inherent in each of the acquired
businesses do not translate to separately identifiable intangible assets but do represent much of the
assessed value that supports the recognised goodwill.
For each of the businesses acquired and announced during the year, the name of the business, the market
sector served, its location and date of acquisition, as well as the estimated annualised revenue it would have
contributed to the Group for the year if such acquisitions had been made at the beginning of the year, 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.
2023
Summary details of the businesses acquired during the year ended 31 December 2023 are shown in the
table below:
Business
Sector
Country
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
Foodservice
Spain
30 June
100%
4.4
EcoTools.nl
Other
Netherlands
31 July
100%
17.8
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
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
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
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NOTES continued
There were no individually significant acquisitions in 2023. A summary of the effect of acquisitions in 2023
and 2022 is shown below:
Customer relationships
229.5
107.7
Brands
10.6
11.6
Technology
–
9.1
Property, plant and equipment and software
16.6
4.8
Right-of-use assets
16.2
21.5
Inventories
44.7
44.9
Trade and other receivables
57.0
27.0
Trade and other payables
(40.5)
(30.9)
Net cash/(overdrafts)
19.8
(6.8)
Provisions
(26.2)
(7.9)
Lease liabilities
(16.2)
(21.5)
Derivative assets
–
0.4
Income tax payable and deferred tax liabilities
(29.6)
(31.3)
Fair value of net assets acquired
281.9
128.6
Goodwill
130.6
106.6
Consideration
412.5
235.2
cash consideration
343.0
180.6
deferred consideration
69.5
54.6
412.5
235.2
Contingent payments relating to retention of former owners
59.5
66.4
Net (cash)/overdrafts acquired
(19.8)
6.8
Transaction costs and expenses
18.1
10.9
Total committed spend in respect of acquisitions completed in the year
470.3
319.3
Spend on acquisitions committed but not completed at the year end
–
2.9
year
(2.8)
–
Total committed spend in respect of acquisitions agreed in the year
467.5
322.2
The net cash outflow in the year in respect of acquisitions comprised:
Cash consideration
343.0
180.6
Net (cash)/overdrafts acquired
(19.8)
6.8
Deferred consideration payments
14.5
56.2
Net cash outflow on purchase of businesses
337.7
243.6
Transaction costs and expenses paid
18.1
11.0
Payments relating to retention of former owners
18.8
9.6
Cash outflow from acquisition related items
36.9
20.6
Total cash outflow in respect of acquisitions
374.6
264.2
Acquisitions completed in the year ended 31 December 2023 contributed £120.5m (2022: £115.8m) to the
Group’s revenue, £16.1m (2022: £9.5m) to the Group’s adjusted operating profit and £8.7m (2022: £5.9m) to
the Group’s operating profit for the year ended 31 December 2023.
The estimated contributions from acquisitions completed and agreed during the year to the results of the
Group for the year if such acquisitions had been made at the beginning of the year, are as follows:
Revenue
325.1
299.0
Adjusted operating profit
51.4
29.3
The total amount of goodwill expected to be deductible for tax purposes in relation to acquisitions
completed during the year is £49.1m (2022: £6.8m).
Deferred consideration
The table below gives further details of the Group’s deferred consideration liabilities.
Minority options
124.7
92.4
Earn outs
36.9
39.3
Deferred consideration held at fair value
161.6
131.7
Other
14.0
8.2
Total deferred consideration
175.6
139.9
Current
32.3
42.0
Non-current
143.3
97.9
Total deferred consideration
175.6
139.9
Including expected future payments which are contingent on the continued retention of former owners of
businesses acquired of £83.2m (2022: £76.3m), total deferred and contingent consideration at 31 December
2023 is £258.8m (2022: £216.2m).
9 Acquisitions continued
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2023
2022
Beginning of year
131.7
8.2
139.9
99.6
8.2
107.8
Acquisitions
63.2
6.3
69.5
52.9
1.7
54.6
Charges related to the
retention of former
owners
30.2
4.3
34.5
19.3
3.8
23.1
Adjustments to
previously estimated
earn outs
(35.9)
–
(35.9)
7.1
–
7.1
payments
(25.5)
(4.5)
(30.0)
(55.1)
(5.8)
(60.9)
Foreign exchange
(2.1)
(0.3)
(2.4)
7.9
0.3
8.2
End of year
161.6
14.0
175.6
131.7
8.2
139.9
2022
Summary details of the businesses acquired during the year ended 31 December 2022 are shown in the
table below:
Business
Sector
Country
USL
Healthcare
New Zealand
31 May
90%
56.0
Hygi.de
Cleaning & Hygiene
Germany
11 July
75%
94.3
AFL Groep
Other
Netherlands
20 July
90%
18.1
Hygiene Solutions
Cleaning & Hygiene
United Kingdom
29 July
100%
5.4
Containit
Safety
Australia
1 August
80%
12.9
Corsul Group
Safety
Brazil
2 September
100%
42.3
Enviropack
Foodservice
United Kingdom
13 October
85%
6.9
VM Footwear
Safety
Czech Republic
31 October
70%
14.2
PM Pack
Foodservice
Denmark
30 November
70%
16.3
Solutions
Healthcare
New Zealand
2 December
100%
6.6
Grupo R. Queralto
Healthcare
Spain
21 December
85%
23.3
Acquisitions completed in the current year
296.3
GRC
Healthcare
Australia
1 January 2023
100%
2.7
Acquisitions agreed in the current year
299.0
10 Disposal of business
The Group did not dispose of any businesses during the year ended 31 December 2023. Disposal of
business in the year ended 31 December 2022 related to the UK Healthcare division, a business that was
no longer considered to be a strategic fit within the portfolio of the Group’s businesses. The disposal
was completed on 19 December 2022.
During the year ended 31 December 2022, the net assets of the Group increased by £0.9m representing the
profit on disposal of £0.9m. The profit on disposal reflects the cash consideration received of £63.7m, offset
by the net book value of the assets disposed of £53.0m, including the associated customer relationships
intangible assets of £2.2m and the carrying value of allocated goodwill of £17.0m, less the associated
transaction costs.
The net cash inflow in the year in respect of disposal of business comprised:
Cash consideration received
63.7
Cash and cash equivalents disposed
(10.2)
Net cash proceeds
53.5
Transaction costs paid
(3.6)
Net cash inflow
49.9
9 Acquisitions continued
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NOTES continued
11 Property, plant and equipment
Beginning of year
98.9
201.6
117.2
417.7
Acquisitions (Note 9)
3.6
8.6
3.1
15.3
Additions
4.6
20.7
17.5
42.8
Disposals
(2.5)
(14.9)
(8.7)
(26.1)
Currency translation
(0.6)
(7.5)
(2.5)
(10.6)
End of year
104.0
208.5
126.6
439.1
Beginning of year
56.6
138.5
85.4
280.5
Charge in year
5.3
16.0
10.4
31.7
Disposals
(2.3)
(14.4)
(7.9)
(24.6)
Currency translation
(0.4)
(5.8)
(1.7)
(7.9)
End of year
59.2
134.3
86.2
279.7
Net book value at 31 December 2023
44.8
74.2
40.4
159.4
Beginning of year
91.5
167.6
110.5
369.6
Acquisitions (Note 9)
–
3.2
0.9
4.1
Disposal of business (Note 10)
(2.6)
(1.7)
(3.6)
(7.9)
Additions
5.3
19.0
10.4
34.7
Disposals
(1.8)
(2.7)
(6.5)
(11.0)
Currency translation
6.5
16.2
5.5
28.2
End of year
98.9
201.6
117.2
417.7
Beginning of year
50.6
116.8
81.3
248.7
Charge in year
5.2
15.1
9.3
29.6
Disposal of business (Note 10)
(1.3)
(1.7)
(3.0)
(6.0)
Disposals
(1.8)
(2.3)
(6.3)
(10.4)
Currency translation
3.9
10.6
4.1
18.6
End of year
56.6
138.5
85.4
280.5
Net book value at 31 December 2022
42.3
63.1
31.8
137.2
12 Right-of-use assets
Net book value at beginning of year
439.6
63.3
26.7
529.6
Acquisitions (Note 9)
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)
Net book value at 31 December 2023
520.0
68.8
27.5
616.3
Net book value at beginning of year
366.4
57.8
24.1
448.3
Acquisitions (Note 9)
20.9
0.3
0.3
21.5
Disposal of business (Note 10)
(1.5)
(0.2)
–
(1.7)
Additions
84.2
28.1
11.0
123.3
Depreciation charge in the year
(111.7)
(28.6)
(10.8)
(151.1)
Remeasurement adjustments
54.7
1.9
–
56.6
Currency translation
26.6
4.0
2.1
32.7
Net book value at 31 December 2023
439.6
63.3
26.7
529.6
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13 Intangible assets
Beginning of year
1,944.4
2,349.0
39.7
9.5
107.4
4,450.0
Acquisitions (Note 9)
130.6
229.5
10.6
–
1.3
372.0
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
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
–
1.2
–
–
–
1.2
Disposals
(4.6)
(4.6)
Currency translation
(1.0)
(45.8)
(1.4)
–
(1.8)
(50.0)
End of year
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
1
1
1 See Note 1 for further details .
At 31 December 2021
1,710.9
2,055.2
25.0
–
90.2
3,881.3
6.7
10.0
–
–
–
16.7
Restated as at 1 January 2022
1,717.6
2,065.2
25.0
–
90.2
3,898.0
Acquisitions (Note 9)
106.6
107.7
11.6
9.1
0.7
235.7
Disposal of business (Note 10)
(17.0)
(5.1)
–
–
(0.8)
(22.9)
9.7
13.5
–
–
–
23.2
Additions
12.0
12.0
Disposals
(3.4)
(3.4)
Currency translation
127.5
167.7
3.1
0.4
8.7
307.4
End of year
1,944.4
2,349.0
39.7
9.5
107.4
4,450.0
At 31 December 2021
12.4
1,033.2
1.0
–
67.9
1,114.5
–
4.4
–
–
–
4.4
Restated as at 1 January 2022
12.4
1,037.6
1.0
–
67.9
1,118.9
Amortisation charge in the year
124.8
3.2
0.4
8.8
137.2
Impairment charge in the year
–
13.0
–
–
–
13.0
Disposal of business (Note 10)
–
(2.9)
–
–
(0.6)
(3.5)
–
6.8
–
–
–
6.8
Disposals
(3.4)
(3.4)
Currency translation
0.4
78.8
0.6
–
7.3
87.1
End of year
12.8
1,258.1
4.8
0.4
80.0
1,356.1
Net book value at
31 December 2022
1,931.6
1,090.9
34.9
9.1
27.4
3,093.9
1
1
1
1
1. See Note 1 for further details.
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NOTES continued
Goodwill, customer relationships, brands and technology intangible assets have been acquired as part of
business combinations. Further details of acquisitions made in the year are set out in Note 9.
Customer relationships include three businesses with individually significant customer relationships assets,
McCue Corporation acquired in October 2021 and based in North America, MCR Safety acquired in
September 2020 and based in North America and Hedis acquired in 2017 and based in France. The net
book value of customer relationships in McCue Corporation as at 31 December 2023 was £98.9m (2022:
£113.1m) with a remaining useful economic life of 12.7 years (2022: 13.7 years). The net book value of
customer relationships in MCR Safety as at 31 December 2023 was £82.7m (2022: £94.2m) with a remaining
useful economic life of 11.7 years (2022: 12.7 years). The net book value of customer relationships in Hedis
as at 31 December 2023 was £76.8m (2022: £86.9m) with a remaining useful economic life of 9.9 years
(2022: 10.9 years).
Impairment testing
The carrying amount of goodwill is allocated across CGUs and is tested annually for impairment by
comparing the recoverable amount of each CGU with its carrying value.
A description of the Group’s principal activities is set out in the Chief Executive Officer’s review. There is
no significant difference in the nature of activities across different geographies. The identification of CGUs
reflects the way the business is managed and monitored on a geographical basis, taking into account the
generation of cash flows and the sharing of synergies. Given the similar nature of the activities of each CGU,
a consistent methodology is applied across the Group in assessing CGU recoverable amounts. The
recoverable amount is the higher of the value in use and the fair value less the costs of disposal. The value
in use is the present value of the cash flows expected to be generated by the CGU over a projection period
together with a terminal value. The projection period is the time period over which future cash flows are
predicted. The Group’s methodology is to use a projection period of five years consisting of detailed cash
flow forecasts for the first two years and CGU specific growth assumptions for years three, four and five.
For periods after this five year period, the methodology applies a long term growth rate specific to the CGU
to derive a terminal value. Cash flow expectations exclude any future cash flows that may arise from
restructuring or other enhancements to the cash generating activities of the CGU and reflect management’s
expectations of the range of economic conditions that may exist over the projection period.
The value in use calculations are principally sensitive to revenue growth, including any significant changes
to the customer base, achievability of future profit margins and the discount rates used in the present value
calculation. The information used for valuation purposes takes into consideration past experience and the
current economic environment with regard to customer attrition rates and additions to the customer base,
the ability to introduce price increases and new products and experience in controlling the underlying cost
base. This information is used to determine a long term growth rate which is consistent with the geographic
segments in which the Group operates and management’s assessment of future operating performance
and market share movements. The discount rates used are determined with assistance provided by
external valuation specialists.
The Group allocates goodwill across seven CGUs (2022: seven). Based on our impairment testing, no
impairments were identified to the carrying value of goodwill within the Group.
As at 31 December 2023, North America, UK & Ireland, France and Rest of Continental Europe carried a
significant amount of goodwill in comparison with the total value of the Group’s goodwill. At 31 December
2023 the carrying value of goodwill in respect of North America was £700.0m (2022: £722.7m), UK & Ireland
was £317.3m (2022: £314.7m), France was £253.5m (2022: £258.0m) and Rest of Continental Europe was
£307.1m (2022: £276.8m). As at 31 December 2023 the aggregate amount of goodwill attributable to the
Group’s CGUs, excluding North America, UK & Ireland, France and Rest of Continental Europe, was
£431.0m (2022: £359.4m), none of which is individually significant.
For North America, UK & Ireland, France and Rest of Continental Europe, the weighted average long term
growth rate used in 2023 was in the range of 2.5%–3.3% (2022: 2.5%–4.0%) reflecting anticipated revenue
and profit growth. A pre-tax discount rate in the range of 9%–11% (2022: 8%–11%) has been applied to the
value in use calculations reflecting market assessments of the time value of money at the balance sheet
date. Similar assumptions have been applied to the other CGUs but where appropriate the directors have
considered alternative market risk assumptions to reflect the specific conditions arising in individual CGUs
with long term growth rates ranging from 2.5%–5.5% (2022: 2.5%–5.4%) and discount rates ranging from
9%–15% (2022: 7%–15%).
As part of the annual impairment testing for goodwill, the Group also considered whether there were any
indicators that individual customer relationships and brands intangible assets were impaired. As for the
impairment testing for the Group’s CGUs noted above, value in use calculations were prepared based on
management’s latest expectations of the performance of the relevant business over a five year projection
period and appropriate long term growth and discount rates. Based on our impairment testing, no
impairments were identified to the carrying value of customer relationships, brands and technology
intangible assets within the Group.
Sensitivity to changes in key assumptions
Impairment testing is dependent on management’s estimates and judgements, particularly as they relate
to the forecasting of future cash flows, expected long term growth rates and the discount rates selected.
Key assumptions on which value in use calculations are dependent relate to the discount rates used and
revenue growth including the impact of changes to the underlying customer base from customer attrition
and the rate at which new customer relationships are introduced and established.
As part of the annual impairment testing, management performed sensitivity analysis by modelling the
impact of higher discount rates, and reviewing the combination of discount rates and long term growth rates
which would bring the value in use to the net book value or below. From this sensitivity testing management
has concluded that no reasonably possible change in key assumptions would result in a material change
to the carrying amounts of any of the Group’s intangible assets in the next 12 months.
The Group has also considered whether climate change would have a significant impact on the approach
taken to the annual impairment testing. As part of this the Group has assessed three alternative climate
change scenarios up to 2050. Two of our scenarios align with the global warming trajectory of between
1⁰C to 2⁰C by 2100 but differ in the speed and extent of global decarbonisation over the next 30 years
(orderly and disorderly). Our final scenario assessed the potential impacts of a world in which global
warming exceeds 3⁰C by 2100 (hothouse world scenario). Having assessed these scenarios the Group has
concluded that, although climate change is a principal risk, it does not warrant any amendment to the
assumptions used in the Group’s impairment testing, and would not have a material impact on the results
of the impairment testing.
13 Intangible assets continued
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Inventories (Note 15)
1,621.1
1,748.6
Trade and other receivables (Note 16)
1,578.5
1,557.4
Trade and other payables – current (Note 17)
(2,071.6)
(2,249.4)
Add back net non-trading related receivables and payables
30.1
40.0
1,158.1
1,096.6
See Note 30 for the cash flow impact of movements in working capital which exclude the impact from
foreign exchange movements, acquisitions and the disposal of business.
15 Inventories
Goods for resale
1,621.1
1,748.6
During the year £11.9m (2022: £10.8m) was written off directly from inventories due to obsolescence or
damage. Inventory provisions, including provisions for slow moving, obsolete or defective inventories and
market price movements, as at 31 December 2023 were £154.2m (2022: £179.9m). During the year, the
Group saw a net utilisation of approximately £25m on provisions for slow moving inventory (2022: net
utilisation of approximately £4m), as well as some utilisation of the residual provisions related to market
price movements on Covid-19 related products; the remaining market price risk on these products is no
longer significant.
16 Trade and other receivables
Trade receivables
1,287.3
1,266.0
Prepayments
84.4
87.9
Other receivables
206.8
203.5
1,578.5
1,557.4
The Group does not have any significant contract assets.
The ageing of trade receivables at 31 December was:
2023
2022
Current
1,058.6
5.7
1,037.5
6.0
0–30 days overdue
186.1
2.6
174.1
2.3
31–90 days overdue
49.6
3.0
48.3
2.7
Over 90 days overdue
27.5
23.2
35.2
18.1
1,321.8
34.5
1,295.1
29.1
The trade receivables provision includes provisions for expected credit losses and credit notes to be issued.
The movement in the provision during the year was as follows:
Beginning of year
29.1
27.4
Acquisitions
4.3
0.8
Disposal of business
–
(0.6)
Charge
6.3
8.5
Released
(3.7)
(4.8)
Utilised
(1.0)
(4.3)
Currency translation
(0.5)
2.1
End of year
34.5
29.1
17 Trade and other payables
Current
Trade payables
1,290.1
1,440.9
Other tax and social security contributions
35.2
31.2
Other payables
249.6
245.3
Accruals and contract liabilities
496.7
532.0
2,071.6
2,249.4
Other payables includes £32.3m (2022: £42.0m) related to deferred consideration on acquisitions.
The Group’s contract liabilities are limited to deferred income of £7.1m (2022: £10.4m). This arises from
contracts with customers in the form of consideration that has been received in advance of the satisfaction
of performance obligations.
Non-current
Other payables greater than one year of £176.1m (2022: £117.2m) includes £143.3m (2022: £97.9m) related to
deferred consideration on acquisitions.
14 Working capital
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NOTES continued
18 Risk management and financial instruments
Capital management
The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Group monitors the return on average
operating capital employed and the return on invested capital (as defined in Note 3) as well as the level of
total shareholders’ equity and sets the amount of dividends paid to ordinary shareholders.
The principal financial covenant limits are net debt to EBITDA, calculated at average exchange rates and in
accordance with the Group’s external debt covenants, of no more than 3.5 times and interest cover of no
less than 3.0 times. Sensitivity analyses using various scenarios are applied to forecasts to assess their
impact on covenants and net debt. Additionally, compliance with the Group’s biannual debt covenants is
monitored on a monthly basis and formally tested at 30 June and 31 December. During 2023 all covenants
have been 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. In addition, the principle financial covenants were removed from the Group’s
committed bank facilities in 2022.
The Group funds its operations through a mixture of shareholders’ equity and bank and capital market
borrowings. All of the 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 and, in order to do so, the Group arranges a mixture of borrowings from different sources with a variety
of maturity dates.
The Group’s businesses provide a high and consistent level of cash generation which helps fund future
development and growth. The Group seeks to maintain an appropriate balance between the higher returns
that might be possible with higher levels of borrowings and the advantages and security afforded by a
sound capital position.
There were no changes to the Group’s approach to capital management during the year 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 Board. Controls
over exposure changes and transaction authenticity are in place.
Derivatives and hedge accounting
The Group designates derivatives which qualify as hedges for accounting purposes as either (a) a hedge
of the fair value of a recognised asset or liability; (b) a hedge of the cash flow risk resulting from changes
in interest rates or foreign exchange rates; or (c) a hedge of a net investment in a foreign operation. The
accounting treatment for hedges and derivatives is set out in the financial instruments accounting policy
in Note 2p. The Group tests the effectiveness of hedges on a prospective basis to ensure compliance with
IFRS 9. Information about the methods and assumptions used in determining the fair value of derivatives
is provided under the Financial instruments section on page 179.
Hedge effectiveness
For hedges of foreign currency purchases and sales, the Group enters into cash flow hedge relationships
where the critical terms of the hedging instrument are similar to those of the hedged item, such as notional
amount, expected maturity date and currency. Hedge ineffectiveness may arise if the timing of the forecast
transaction changes from what was originally estimated. The Group therefore performs a quantitative
hedge effectiveness assessment to calculate any ineffectiveness during the period.
Part of the Group’s fixed rate debt portfolio is swapped to floating rates using interest rate swaps where the
hedged items are individual tranches of fixed rate debt. These interest rate swaps are held in fair value
hedges with critical terms exactly matching those of the underlying hedged items, such as notional amounts,
payment dates, reset dates, maturity dates and currencies. As all critical terms matched during the year, the
economic relationship was 100% effective. The Group therefore performs a qualitative assessment of
effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no
longer match exactly with the critical terms of the hedging instrument, the Group will perform a quantitative
assessment of effectiveness. Hedge ineffectiveness may arise due to a change in credit risk of the
counterparty or if there is a change in timings or amounts of the hedged cash flows.
There was no material ineffectiveness during 2023 in relation to the interest rate swaps or the forward
currency contracts.
Risk management
(a) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
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.
The Group has substantial funding available comprising multi-currency credit facilities from the Group’s
banks, US private placement notes and senior bonds. During 2023, £365m of bank facilities were signed
with maturities between 2026 to 2028. The Group expects to sign and extend bank facilities during 2024.
During the year, the Group’s USD interest rate swaps and committed USD bank facility, which previously
referenced the discontinued USD LIBOR, have been renegotiated to reference SOFR, the new USD
benchmark. This has not had an impact on the financial results for the year ended 31 December 2023 .
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Loans, borrowings and net debt
Bank overdrafts
(874.2)
(825.9)
Bank loans
(0.1)
–
US private placement notes
(129.9)
(161.0)
Borrowings due within one year
(1,004.2)
(986.9)
US private placement notes
(795.2)
(975.7)
Senior bonds
(621.9)
(598.3)
Borrowings due after one year
(1,417.1)
(1,574.0)
Derivatives managing the interest rate risk and currency profile of the debt
(90.3)
(103.2)
Gross debt
(2,511.6)
(2,664.1)
Cash and cash equivalents
1,426.1
1,504.0
Net debt excluding lease liabilities
(1,085.5)
(1,160.1)
Lease liabilities
(664.5)
(569.9)
Net debt including lease liabilities
(1,750.0)
(1,730.0)
Further information on the movement in net debt and lease liabilities is shown in Note 29.
The total available committed funding at 31 December 2023 was £2,470.0m (2022: £2,790.0m).
The committed funding maturity profile at 31 December 2023 is set out in the chart below:
Committed funding maturity profile by year (£m)
0
100
200
300
400
500
600
2024 2025 2026 2027 2028 2029 2030 2031 2032
130
180
50
172
300
124
138
100
330
39
106 106
103
55
400
137
US private placement notes Bank facilities – drawn
Senior bonds Bank facilities – undrawn
The undrawn committed bank facilities available at 31 December were as follows:
Expiring within one year
179.8
84.1
Expiring after one year but within two years
50.0
205.4
Expiring after two years
622.8
674.1
852.6
963.6
In addition, the Group maintains overdraft and uncommitted facilities to provide short term flexibility.
As at 31 December 2023 there were no loans secured by fixed charges on property (2022: none).
Contractual maturity profile
The contractual maturity profile of the Group’s financial liabilities at 31 December is set out in the tables
below. The amounts disclosed are the contractual undiscounted cash flows and therefore include interest
cash flows (forecast using SONIA and SOFR interest rates at 31 December in the case of floating rate
financial assets and liabilities). Derivative assets and liabilities have been included within the tables since
they predominantly relate to derivatives which are used to manage the interest cash flows on the Group’s
debt. Bank loans have been drawn under committed facilities and can be refinanced on maturity from these
same facilities. Accordingly, they have been aged based on the maturity dates of the underlying facilities.
Foreign currency cash flows have been translated using spot rates as at 31 December.
Bank overdrafts
(874.2)
(874.2)
Bank loans
(0.1)
(0.1)
US private placement notes
(1,068.8)
(163.4)
(199.6)
(357.2)
(348.6)
Senior bonds
(755.6)
(12.8)
(312.8)
(18.0)
(412.0)
Lease payments
(788.1)
(180.5)
(159.4)
(318.4)
(129.8)
Trade and other payables
(2,205.4)
(2,029.3)
(63.6)
(102.8)
(9.7)
(5,692.2)
(3,260.3)
(735.4)
(796.4)
(900.1)
Interest rate swaps
(151.9)
(22.8)
(22.8)
(65.9)
(40.4)
Foreign exchange inflows
2,539.0
2,539.0
–
Foreign exchange outflows
(2,549.2)
(2,549.2)
–
(162.1)
(33.0)
(22.8)
(65.9)
(40.4)
Total
(5,854.3)
(3,293.3)
(758.2)
(862.3)
(940.5)
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NOTES continued
Bank overdrafts
(825.9)
(825.9)
Bank loans
–
–
US private placement notes
(1,325.9)
(200.8)
(172.7)
(527.1)
(425.3)
Senior bonds
(768.4)
(12.8)
(12.8)
(324.8)
(418.0)
Lease payments
(706.6)
(167.6)
(136.0)
(263.3)
(139.7)
Trade and other payables
(2,325.0)
(2,207.8)
(117.2)
–
–
(5,951.8)
(3,414.9)
(438.7)
(1,115.2)
(983.0)
Interest rate swaps
(115.7)
(15.2)
(15.2)
(44.7)
(40.6)
Foreign exchange inflows
1,831.6
1,829.8
1.8
Foreign exchange outflows
(1,830.0)
(1,828.2)
(1.8)
(114.1)
(13.6)
(15.2)
(44.7)
(40.6)
Total
(6,065.9)
(3,428.5)
(453.9)
(1,159.9)
(1,023.6)
(b) Interest rate risk
The Group is funded by a mixture of fixed and floating rate debt with the Group’s main interest rate risk
arising on its floating rate debt. Interest rate swaps and interest rate caps are used to manage the interest
rate risk profile.
The table below shows the fixed/floating rate debt mix after interest rate swaps. Of the US private
placement notes of £925.1m (2022: £1,136.7m), there are US dollar denominated amounts totalling £90.6m
(2022: £94.6m), with maturities ranging from 2026 to 2028, which have been swapped to floating rates using
interest rate swaps which reprice daily. Of the senior bonds of £621.9m (2022: £598.3m), an amount totalling
£322.4m (2022: £299.2m), with a maturity of 2030, has been swapped to floating rates using interest rate
swaps which reprice daily.
The US private placement notes of £925.1m include a fair value adjustment of £12.4m (2022: £16.6m) related
to interest rate swaps terminated in previous years. The terminations resulted in discontinuation of a
number of fair value hedge relationships. At the date of de-designation, there was a fair value adjustment on
the US private placement notes which will be amortised to the income statement across the remaining life of
the debt. The amortisation of the fair value adjustment in 2023 was a credit to the income statement of
£4.2m (2022: £4.2m).
The interest rate risk on the floating rate liability is managed using interest rate options. The strike rates of
these options are based on EURIBOR and are repriced every three months.
Bank loans are drawn for periods up to one month at interest rates linked to SONIA.
Fixed vs floating interest rate table
US private placement notes
(925.1)
(1,136.7)
Senior bonds
(621.9)
(598.3)
Total fixed rate debt
(1,547.0)
(1,735.0)
Interest rate swaps (fixed leg)
413.0
393.8
Fixed rate liability
(1,134.0)
(1,341.2)
Bank overdrafts
(874.2)
(825.9)
Bank loans
(0.1)
–
Total floating rate debt
(874.3)
(825.9)
Interest rate swaps (floating leg)
(413.0)
(393.8)
Floating rate liability
(1,287.3)
(1,219.7)
Derivatives managing the interest rate risk and currency profile of the debt
(90.3)
(103.2)
Gross debt
(2,511.6)
(2,664.1)
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Effects of hedge accounting on the financial position and performance
The effects of the interest rate swaps on the Group’s financial position and performance are as follows:
2023
2022
Net carrying amount liability (£m)
(78.7)
(100.5)
Notional amount (£m)
494.5
500.0
Maturity date range
2026–2030 2026–2030
Hedge ratio
1:1
1:1
relationship (£m)
(24.4)
83.2
Fair value gain/(loss) on interest rate swaps in a hedge relationship (£m)
21.8
(79.2)
Sensitivity to movements in interest rates
After taking account of hedge relationships, a change of 1% in the interest rate forward curves on 31
December would have affected profit before income tax for the year and equity as at the year end as a result
of changes in the fair values of derivative assets and liabilities at that date by the amounts shown below:
Impact on profit before tax
Impact on equity
2023
0.2
(0.1)
0.2
(0.1)
2022
1.5
(1.4)
1.5
(1.4)
(c) Foreign currency risk
The majority of the Group’s sales are made and income is earned in US dollars, euros and other foreign
currencies. The Group does not hedge the impact of exchange rate movements arising on translation of
earnings into sterling at average exchange rates.
The following significant exchange rates applied during the year:
Average rate
Closing rate
2023
2022
2023
2022
US dollar
1.24
1.24
1.27
1.20
Euro
1.15
1.17
1.15
1.13
The majority of the Group’s transactions are carried out in the respective functional currencies of the
Group’s operations and so transaction exposures are usually relatively limited. Where they do occur the
Group’s policy is to hedge exposures of highly probable forecast transactions using forward foreign
exchange contracts and these are designated as cash flow hedges. During the year the Group hedged highly
probable forecast transactions for periods of up to 21 months. However, the economic impact of foreign
exchange on the value of uncommitted future purchases and sales is not hedged. As a result, sudden and
significant movements in foreign exchange rates can impact profit margins where there is a delay in passing
the resulting price increases on to customers.
For the year ended 31 December 2023, all foreign exchange cash flow hedges were effective with a
cumulative pre-tax loss of £2.5m (2022: cumulative pre-tax loss of £1.2m) recognised in equity at the end
of the year and this will affect the income statement during 2024.
Effects of hedge accounting on the financial position and performance
2023
2022
Net carrying amount liability (£m)
(2.5)
(1.2)
Notional amount at 31 December (£m)
135.3
169.0
Maturity date range
2024 2023–2024
Hedge ratio
1:1
1:1
Change in value of hedged items since 1 January (£m)
1.3
1.7
1 January (£m)
(1.3)
(1.7)
The majority of the Group’s borrowings are effectively denominated in US dollars, sterling and euros,
aligning them to the respective functional currencies of the component parts of the Group’s EBITDA. This
currency profile is achieved using short term foreign exchange contracts and foreign currency debt which
are designated as hedging instruments to achieve net investment hedge accounting at a Group level. This
currency composition minimises the impact of movements in foreign exchange rates on the ratio of net debt
to EBITDA. No ineffectiveness was recorded from net investments in foreign entity hedges.
The currency profile of the Group’s net debt excluding lease liabilities at 31 December is set out in the
table below:
US dollar
438.6
475.9
Sterling
91.8
48.9
Euro
573.9
551.6
Other
(18.8)
83.7
1,085.5
1,160.1
The Group also enters into foreign currency derivatives to hedge intercompany loans economically although
these do not qualify for hedge accounting and therefore gains and losses are recorded in the income
statement. These currency derivatives are subject to the same risk management policies as all other
derivative contracts .
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NOTES continued
Sensitivity to movements in foreign exchange rates
For the year ended 31 December 2023, a movement of one cent in the US dollar and euro average exchange
rates would have changed profit before income tax by £3.0m and £1.0m respectively (2022: £2.7m and
£0.9m) and adjusted profit before income tax by £3.4m and £1.5m respectively (2022: £3.2m and £1.2m).
If a 10% strengthening or weakening of sterling had taken place on 31 December it would have increased/
(decreased) profit before income tax and (decreased)/increased equity for the year by the amounts shown
below. The impact of this translation is much greater on equity than it is on profit before income tax since
equity is translated using the closing exchange rates at the year end and profit before income tax is
translated using the average exchange rates for the year. As a result, the value of equity is more sensitive
than the value of profit before income tax to a movement in exchange rates on 31 December and the
resulting movement in profit before income tax is due solely to the translation effect on monetary items.
This analysis assumes that all other variables, in particular interest rates, remain constant.
Impact on profit before tax
Impact on equity
2023
0.4
(0.5)
(228.8)
308.2
2022
0.2
(0.2)
(211.1)
277.9
(d) Credit risk
Credit risk is the risk of loss in relation to a financial asset due to non-payment by the relevant
counterparty. The Group’s objective is to reduce its exposure to counterparty default by restricting the
type of counterparty it deals with and by employing an appropriate policy in relation to the collection of
financial assets.
The Group’s financial assets are cash at bank and in hand, derivative financial instruments and trade and
other receivables which represent the Group’s maximum exposure to credit risk in relation to financial
assets. The maximum exposure to credit risk for cash at bank and in hand, derivative financial assets (see
page 179) and trade and other receivables (see Note 16) is their respective carrying amounts.
Dealings are restricted to those banks with the relevant combination of geographic presence and suitable
credit rating. The Group continually monitors the credit ratings of its counterparties and the credit exposure
to each counterparty.
For trade and other receivables, the amounts represented in the balance sheet are net of any impairment
losses measured using the expected credit loss model. Note 16 sets out an analysis of trade and other
receivables and the provision for doubtful debts in respect of trade receivables.
At the balance sheet date there were no significant concentrations of credit risk (2022: none).
(e) Financial instruments
Financial assets and liabilities
Cash at bank and in hand
1,377.1
1,504.0
Trade and other receivables
1,494.1
1,469.5
Money market funds
49.0
–
Foreign exchange derivatives in cash flow hedges
0.3
1.5
Foreign exchange derivatives in net investment hedges
9.8
8.3
Other foreign exchange and interest rate derivatives
1.7
9.2
Total financial assets
2,932.0
2,992.5
Bank overdrafts
(874.2)
(825.9)
Bank loans
(0.1)
–
US private placement notes
(925.1)
(1,136.7)
Senior bonds
(621.9)
(598.3)
Lease liabilities
(664.5)
(569.9)
Trade and other payables
(2,043.8)
(2,193.3)
Interest rate derivatives in fair value hedges
(78.7)
(100.5)
Foreign exchange derivatives in cash flow hedges
(2.8)
(2.7)
Foreign exchange derivatives in net investment hedges
(16.6)
(5.7)
Other foreign exchange derivatives
(6.3)
(9.9)
Other payables
(161.6)
(131.7)
Total financial liabilities
(5,395.6)
(5,574.6)
18 Risk management and financial instruments continued
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Financial assets and liabilities stated as being measured at fair value in the tables above (including all
derivative financial instruments), with the exception of money market funds and other payables, have
carrying amounts where the fair value is, and has been throughout the year, 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. Money market funds have a fair value which is a level one fair value measurement, as this is
determined by utilising unadjusted quoted prices in active markets as at the balance sheet date. 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 £3.4m (2022: £2.5m) and 1%
decrease in the expected profitability would result in a decrease of £3.4m (2022: 3.0m).
There were no transfers between levels for recurring fair value measurements during the year.
As at 31 December 2023 the fair values, based on unadjusted market data, of the US private placement
notes was £875.9m (2022: £1,063.4m) and of the senior bonds was £615.8m (2022: £572.7m).
For other financial assets and financial liabilities not measured at fair value, including cash at bank and in
hand, bank loans and overdrafts, trade and other receivables and trade and other payables, their carrying
amount is a reasonable approximation of fair value due to their short term nature. Bank loans are priced
based on floating interest rates and the credit spread has not changed since the inception of the loan.
Offsetting of financial assets and liabilities
The following table sets out the Group’s derivative financial assets and liabilities that are subject to
counterparty offsetting or master netting agreements.
Derivative financial assets
11.8
–
11.8
(10.2)
1.6
Derivative financial liabilities
(104.4)
–
(104.4)
10.2
(94.2)
Derivative financial assets
19.0
–
19.0
(10.9)
8.1
Derivative financial liabilities
(118.8)
–
(118.8)
10.9
(107.9)
19 Provisions
Current
10.0
24.2
Non-current
75.8
50.5
85.8
74.7
2023
2022
Beginning of year
25.3
13.8
35.6
74.7
25.2
12.3
27.3
64.8
Charge
2.6
–
1.3
3.9
2.0
–
12.5
14.5
Acquisitions
2.2
–
24.0
26.2
1.4
–
6.5
7.9
Disposal of business
–
–
–
–
(1.3)
–
–
(1.3)
Utilised or released
(3.3)
(9.1)
(5.0)
(17.4)
(2.2)
–
(13.7)
(15.9)
Currency translation
(0.4)
(0.5)
(0.7)
(1.6)
0.2
1.5
3.0
4.7
End of year
26.4
4.2
55.2
85.8
25.3
13.8
35.6
74.7
The Properties provision includes provisions for repairs and dilapidations. These provisions cover the
relevant periods of the lease agreements, which typically extend from one to 10 years, up to the expected
termination date.
The MEPP withdrawal provision relates to the withdrawal liability on multi-employer pension plans in
North America. See Note 25 for further details.
Group companies are, from time to time, subject to certain claims and litigation incidental to their operations
and arising in the ordinary course of business including, but not limited to, those relating to the products
and services that they supply, contractual and commercial disputes, environmental claims, employment
related disputes and indirect and payroll taxes. Other provisions include management’s best estimate of the
liabilities for such claims and litigation at the balance sheet date, determined by reference to known factors
and past experience of similar items. Provision is made if, on the basis of current information and
professional advice, liabilities are considered likely to arise. Management expects these matters to be settled
within the next one to five years. While any dispute has an element of uncertainty, management does not
expect that the actual outcome of any such claims and litigation, either individually or in the aggregate, will
be materially different to the amounts provided. In the case of unfavourable outcomes, the Group may
benefit from applicable insurance protection. There are no individually significant provisions included within
the other category.
18 Risk management and financial instruments continued
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Annual Report 2023 179178
Bunzl plc
Annual Report 2023
Financial
statements

NOTES continued
20 Deferred tax
2023
2022
Property, plant and equipment
0.5
(11.5)
(11.0)
1.0
(11.6)
(10.6)
schemes
5.4
(16.4)
(11.0)
5.2
(14.8)
(9.6)
Goodwill, customer relationships,
brands and technology
6.9
(232.5)
(225.6)
5.9
(226.2)
(220.3)
Share based payments
15.1
–
15.1
11.7
–
11.7
Leases
7.8
(0.2)
7.6
6.7
(0.1)
6.6
Provisions and accruals
51.6
(4.2)
47.4
42.6
(3.4)
39.2
Inventories
13.6
(21.8)
(8.2)
12.2
(21.6)
(9.4)
Other
14.7
(4.9)
9.8
8.6
(4.9)
3.7
Deferred tax asset/(liability)
115.6
(291.5)
(175.9)
93.9
(282.6)
(188.7)
Set-off of tax
(101.4)
101.4
–
(89.9)
89.9
–
Net deferred tax asset/(liability)
14.2
(190.1)
(175.9)
4.0
(192.7)
(188.7)
Except as noted below, deferred tax is calculated in full on temporary differences under the liability method
using the tax rate of the country of operation.
The Company is able to control the dividend policy of its subsidiaries and, therefore, the timing of the
remittance of the undistributed earnings of overseas subsidiaries. In general, the Company has determined
either that such earnings will not be distributed in the foreseeable future or, where there are plans to remit
those earnings, no tax liability is expected to arise except for a liability of £1.4m (2022: £1.4m) which has
been provided for.
Deferred tax assets in respect of temporary differences have only been recognised in respect of tax losses
and other temporary differences where it is probable that these assets will be realised. No deferred tax
asset has been recognised in respect of unutilised tax losses of £11.9m (2022: £8.6m).
No deferred tax has been recognised in respect of unutilised capital losses of £86.9m (2022: £87.2m) as it is
not considered probable that there will be suitable future taxable profits against which they can be utilised.
The movement in the net deferred tax liability is shown below:
Beginning of year
188.7
148.2
Acquisitions
20.3
26.9
Credit to income statement
(19.7)
(3.3)
Recognised in other comprehensive income and equity
(1.2)
3.0
Reclassified (to)/from current tax
(4.1)
0.3
Currency translation
(8.1)
13.6
End of year
175.9
188.7
21 Share capital and share based payments
Issued and fully paid ordinary shares of 32
1
⁄
7
p each
108.6
108.5
Number of ordinary shares in issue and fully paid 2023
2022
Beginning of year
337,667,846
337,398,796
Issued – option exercises
353,231
269,050
End of year
338,021,077
337,667,846
The Company operates a number of share plans for the benefit of employees of the Company and its
subsidiaries. Further details of the share plans as they relate to the directors of the Company are set out
in the Directors’ remuneration report.
Sharesave Scheme, International Sharesave Plan and Irish Sharesave Plan
For many years, the Company has operated all employee savings related share option schemes.
The existing scheme in the UK, the Bunzl plc Sharesave Scheme, was approved by shareholders at the 2011
Annual General Meeting (‘AGM’) and renewal amendments were approved by shareholders at the 2021
AGM. It is an HMRC tax advantaged scheme and is open to all eligible UK employees, including UK based
executive directors.
The Bunzl Irish Sharesave Plan, which is approved by the Irish Revenue Commissioners, and the Bunzl plc
International Sharesave Plan, were first introduced in 2006 and have since been extended, most recently
following the renewal of the Bunzl plc Sharesave Scheme in 2021.
The Bunzl plc Sharesave Scheme, Bunzl plc International Sharesave Plan and the Bunzl Irish Sharesave
Plan operate on a similar basis with options granted to participating employees who have completed at
least three months of continuous service at a discount of up to 20% of the market price prevailing shortly
before the invitation to apply for the options. Depending on the scheme, options are normally exercisable
either three or five years after they have been granted, with employees saving up to £500 (2022: £500) per
month (or the equivalent value in other currencies under the Bunzl plc International Sharesave Plan) or
€500 per month under the Bunzl Irish Sharesave Plan (the last grant under the Bunzl Irish Sharesave
Plan was in 2021).
Long Term Incentive Plan 2004 (‘2004 LTIP’) and 2014 (‘2014 LTIP’)
The 2004 LTIP was approved by shareholders at the 2004 AGM and expired in May 2014. No further share
options or performance share awards have been granted under the 2004 LTIP since that date and there are
no 2004 LTIP options outstanding. The 2014 LTIP was approved by shareholders at the 2014 AGM and
replaced the 2004 LTIP. The operation of the LTIP is overseen by the Remuneration Committee of the Board
and is divided into two parts, being Part A and Part B.
Part A of the 2014 LTIP relates to the grant of market priced executive share options. In normal
circumstances, options granted under Part A are only exercisable if the relevant performance condition has
been satisfied. The performance condition is based on the Company’s adjusted earnings per share growth
meeting certain specified targets.
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Annual Report 2023
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Part B of the 2014 LTIP relates to the grant of performance share awards and restricted share awards, both
of which are conditional rights to receive shares in the Company for nil consideration. Performance share
awards and restricted share awards will usually vest (i.e. become exercisable) on the third anniversary of
their grant. The extent to which a performance share award will vest is usually subject to the extent to which
the applicable performance conditions have been satisfied, based partly on the Company’s total
shareholder return performance, relative to a comparator group of companies over a three year period, and
partly subject to the Company’s adjusted earnings per share growth meeting certain specified targets. The
extent to which a restricted share award will vest is usually subject to the extent to which the applicable
underpin condition has been satisfied. There are no set measures or targets in relation to the underpin
condition. The basis of assessment is at the absolute discretion of the Remuneration Committee.
Investment in own shares
The Company holds a number of its ordinary shares in an employee benefit trust. The principal purpose
of this trust is to hold shares in the Company for subsequent transfer to certain senior employees and
executive directors in relation to options granted and awards made under the LTIP and the Deferred Annual
Share Bonus Scheme (‘DASBS’) over market purchase shares. Details of these plans are set out above and in
the Directors’ remuneration report. The assets, liabilities and expenditure of the trust have been
incorporated in the consolidated financial statements. Finance expenses and administration charges are
included in the income statement on an accruals basis. As at 31 December 2023 the trust held 2,223,988
(2022: 2,298,301) shares, upon which dividends have been waived, with an aggregate nominal value of
£0.7m (2022: £0.7m) and market value of £70.9m (2022: £63.4m).
IFRS 2 disclosures
Options granted during the year have been valued using a Black Scholes model. The fair value per option
granted during the year and the assumptions used in the calculations are as follows:
2023
2022
Grant date
01.03.23–13.09.23
01.03.22–14.09.22
Share price at grant date (£)
28.04–30.60
28.10–31.03
Exercise price (£)
nil–28.05
nil–28.97
Number of options granted during the year (shares)
2,329,854
2,226,096
Vesting period (years)
3–5
3–5
Expected volatility (%)
19–21
19–21
Option life (years)
3.0–10
3.0–10
Expected life (years)
3.0–6.5
3.0–5.9
Risk free rate of return (%)
3.1–3.6
0.8–1.7
Expected dividends expressed as a dividend yield (%)
0.0–2.1
0.0–1.9
Fair value per option (£)
6.08–25.28
4.77–26.38
The expected volatility is based on historical volatility over the last three to seven years. The expected life is
the average expected period to exercise. The risk free rate of return is the yield on zero coupon UK
government bonds of a term consistent with the assumed option life.
The weighted average share price for options exercised by employees of the Company and its subsidiaries
during the year was £30.45 (2022: £29.53). The total charge for the year relating to share based payments
was £15.4m (2022: £14.1m). After tax the total charge was £11.7m (2022: £12.4m).
Details of share options and awards which have been granted and exercised, those which have lapsed
during 2023 and those outstanding and available to exercise at 31 December 2023, whether over new issue
or market purchase shares, or cash-settled, under the Sharesave Scheme, International Sharesave Plan,
Irish Sharesave Plan, the 2004 LTIP Part A and 2014 LTIP Part A and Part B, are set out in the following table:
awards
Exercises
Lapses
*
2023
2023
at 31.12 .23
at 31.12.23
Number
Number
(£)
Number
(£)
Number
Number
(£)
Number
Sharesave Scheme
623,480
205,387
23.43
195,628
15.28–23.43
75,741
557,498
23.43
2,809
Sharesave Plan
246,734
76,701
23.43
69,487
15.28
19,377
234,571
23.43
–
Irish Sharesave Plan
19,149
–
–
7,0 67
15.28
483
11,599
17.81
–
2004
LTIP Part A
92,600
–
–
92,600
13.56–13.75
–
–
–
–
2014
LTIP Part A
9,357,989
1,792,961
28.05
2 ,125,
89 4
16.41– 28.97
211,891
8,813,165
28.97
4,058,086
2014
LTIP Part B
1,213,424
254,805
nil
341,281
nil
38,785
1,088,163
nil
150,802
11,553,376
2,329,854
2,831,957
346,277
10,704,996
4,
211,697
* Share option lapses relate to those which have either been forfeited or have expired during the year.
For the options outstanding at 31 December 2023, the weighted average fair values and the weighted
average remaining contractual lives (being the time period from 31 December 2023 until the lapse date of
each share option) are set out below:
Sharesave Scheme
6.86
1.96
International Sharesave Plan
7.02
1.74
Irish Sharesave Plan
5.18
0.84
2014
LTIP Part A
4.05
6.57
2014
LTIP Part B
22.04
3.89
The outstanding share options and performance share awards are exercisable at various dates up to
September 2033.
21 Share capital and share based payments continued
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NOTES continued
22 Dividends
Total dividends for the years in which they are recognised are:
2021 interim
54.3
2021 final
136.2
2022 interim
57.9
2022 final
151.8
Total
209.7
190.5
Total dividends per share for the year to which they relate are:
2023
2022
Interim
18 . 2p
17. 3p
Final
5 0 .1p
45 .4p
Total
68.3p
62.7p
The 2023 interim dividend of 18.2p per share was paid on 3 January 2024 and comprised £61.0m of cash.
The 2023 final dividend of 50.1p per share will be paid on 2 July 2024 to shareholders on the register at the
close of business on 17 May 2024. The 2023 final dividend will comprise approximately £168m of cash.
23 Contingent liabilities
Bank guarantees
2.0
1.8
24 Directors’ ordinary share interests
The interests of the directors, and their connected persons, in the share capital of the Company at
31 December were:
2023
2022
Peter Ventress
2,608
2,608
Frank van Zanten
225,612
180,751
Richard Howes
76,333
43,996
Vanda Murray
3,000
3,000
Lloyd Pitchford
4,000
4,000
Pam Kirby
1,800
1,800
Stephan Nanninga
–
–
Vin Murria
–
–
Jacky Simmonds
–
–
313,353
236,155
Details of the directors’ options and awards over ordinary shares made under the 2014 LTIP, Sharesave
Scheme, International Sharesave plan and DASBS are set out in the Directors’ remuneration report.
No changes to the directors’ ordinary share interests shown in this Note and the Directors’ remuneration
report have taken place between 31 December 2023 and 26 February 2024.
25 Retirement benefits
The Group operates a number of defined benefit and defined contribution retirement benefit schemes
in the US, the UK and elsewhere in Europe (including France, the Netherlands and the Republic of Ireland).
The funds of the principal defined benefit schemes are administered by trustees and are held
independently from the Group. Pension costs of defined benefit schemes are assessed in accordance with
the advice of independent professionally qualified actuaries. Contributions to all schemes are determined
in line with actuarial advice and local conditions and practices. Scheme assets for the purpose of IAS 19
‘Employee Benefits’ are stated at their bid value.
Characteristics of defined benefit pension schemes
UK
The UK defined benefit scheme is a contributory defined benefit pension scheme providing benefits based
on final pensionable pay. The scheme has been closed to new members since 2003. The valuation of the UK
defined benefit pension scheme has been updated to 31 December 2023 by the Group’s actuaries.
The UK scheme is an HMRC registered pension scheme and is subject to standard UK pensions and tax law.
This means that the payment of contributions and benefits are subject to the appropriate tax treatments
and restrictions and the scheme is subject to the scheme funding requirements outlined in section 224 of
the Pensions Act 2004.
In accordance with UK trust and pensions law, the pension scheme has a corporate trustee. Although the
Company bears the financial cost of the scheme, the responsibility for the management and governance
of the scheme lies with the trustee, which has a duty to act in the best interest of members at all times.
The assets of the scheme are held in trust by the trustee who consults with the Company on investment
strategy decisions.
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Annual Report 2023 183182
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Annual Report 2023
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The trustee, in agreement with the Company, has hedging in place to reduce the impact of inflation and
interest rate movements on the funding of the plan.
The last full triennial valuation on the UK defined benefit pension scheme was carried out by a qualified
actuary as at 5 April 2021 and showed that there was a surplus on the agreed funding basis. During the
year, a further contribution of £5.0m was made in respect of the 2022 calendar year. A revised schedule
of contributions was agreed with the Trustee such that no further annual contributions will be paid in
2024 or 2025.
US
The principal US defined benefit pension scheme is a non-contributory defined benefit pension scheme
providing benefits based on final pensionable pay. The scheme has been closed to new members since
2003. The valuation of the US defined benefit pension scheme has been updated to 31 December 2023 by
the Group’s actuaries.
The US scheme is a qualified pension scheme and is subject to standard regulations under the Employee
Retirement Income Security Act of 1974, the Pension Protection Act of 2006 and the Department of Labor
and Internal Revenue reporting requirements. The scheme pays annual premiums to the Pension Benefit
Guaranty Corporation to insure the benefits of the scheme.
The assets of the scheme are held in trust by an independent custodian. The Company has established
a Retirement Scheme Investment Committee. The members of the Committee are the scheme fiduciaries
and, as such, are ultimately responsible for the management of the scheme assets. The Committee
performs the oversight function and delegates the day-to-day management process to appropriate staff.
A registered investment adviser advises the Committee regarding the investment of scheme assets.
A de-risking strategy has been agreed for the scheme to reduce the mismatch between the assets and
liabilities, whereby investments are switched from return seeking assets to liability matching assets as the
funding improves, based on pre-agreed triggers.
Annual actuarial valuations are performed on the US defined benefit pension scheme. The last annual
review was carried out by a qualified actuary as at 1 January 2023 and showed that there was a required
annual contribution of $4.5m. Bunzl plans to cover this required contribution using prefunding balance.
In 2023, Bunzl also used prefunding balance to cover the required contribution for the 2022 plan year.
The annual review as at 1 January 2024 is ongoing.
Risks
The main risks to which the Group is exposed in relation to the defined benefit pension schemes are
described below:
• Inflation risk – the majority of the UK scheme’s liabilities increase in line with inflation and, as a result, if
inflation is greater than expected the liabilities will increase. The impact of high inflation is capped each
year for the UK scheme’s benefits. The US scheme’s liabilities are not directly tied to inflationary increases.
• Interest rate risk – a fall in bond yields will increase the value of the schemes’ liabilities. A proportion of
both the UK and US schemes’ assets are invested in liability matching assets to mitigate the interest rate
and also the inflation risk.
• Mortality risk – the assumptions adopted by the Group make allowance for future improvements in life
expectancy. However, if life expectancy improves at a faster rate than assumed, this would result in
greater payments from the schemes and consequently increases in the schemes’ liabilities. The mortality
assumptions are reviewed on a regular basis to minimise the risk of using an inappropriate assumption.
• Investment risk – the schemes invest in a diversified range of asset classes to mitigate the risk of falls
in any one area of the investments. In the UK, the trustee implements partial currency hedging on the
overseas assets to mitigate currency risk.
The risks mentioned above could lead to a material change to the deficit or surplus of the pension schemes.
Given the long term time horizon of the schemes’ cash flows, the assumptions used can lead to volatility in
the scheme valuations from year to year. The Company and the trustee of the UK scheme seek to mitigate
actively the risks associated with the schemes.
A higher defined benefit obligation could lead to additional funding requirements in future years. Any deficit
measured on a funding valuation basis, which may differ from the actuarial valuation under IAS 19, will
generally be financed over a period that ensures the contributions are appropriate to the Group and in line
with the relevant regulations.
Financial information
The amounts included in the consolidated financial statements at 31 December were:
Defined contribution pension schemes
28.9
26.2
current service cost (net of contributions by employees)
3.4
4.8
losses on curtailment and settlement
–
0.5
Total included in employee costs
32.3
31.5
Net interest income on defined benefit pension schemes in surplus
(3.2)
(1.2)
Net interest expense on defined benefit pension schemes in deficit
1.0
0.8
Total charge to the income statement
30.1
31.1
Actual return less expected return on pension scheme assets
5.2
(179.6)
Experience loss on pension scheme liabilities
(2.2)
(16.3)
Impact of changes in financial assumptions relating to the present value of
pension scheme liabilities
(7.7)
205.6
Impact of changes in demographic assumptions relating to the present value of
pension scheme liabilities
7.6
(2.8)
Actuarial gain on defined benefit pension schemes
2.9
6.9
The cumulative amount of net actuarial losses arising since 1 January 2004 recognised in the statement of
comprehensive income at 31 December 2023 was £32.1m (2022: £35.0m).
25 Retirement benefits continued
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Annual Report 2023 183182
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Annual Report 2023
Financial
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NOTES continued
The principal assumptions used by the independent qualified actuaries for the purposes of IAS 19 were:
UK
2023
2022
Longevity at age 65 for current pensioners (years)
21.6
22.1
Longevity at age 65 for future pensioners (years)
22.8
23.4
Longevity at age 65 for current and future pensioners (years)
21.6
21.6
Financial information continued
UK
US
2023
2022
2021
2023
2022
2021
Rate of increase in salaries
3.5%
3.6%
3.8%
3.0%
3.0%
3.0%
Rate of increase in pensions
2.7%
2.7%
2.8%
–
–
–
Discount rate
4.8%
5.0%
1.8%
4.8%
5.0%
2.6%
Inflation rate
2.7%
2.7%
2.8%
2.3%
2.3%
2.3%
The assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial
assumptions which, due to the timescales covered, may not necessarily be borne out in practice.
The increase/(decrease) that would arise on the overall net pension surplus as at 31 December 2023 as
a result of reasonably possible changes to key assumptions was:
UK
(7.5)
7.5
(4.1)
4.3
8.2
(8.6)
US
(2.2)
2.3
–
–
1.9
(2.0)
The market value of pension scheme assets and the present value of retirement benefit obligations at 31
December were:
Equities
–
25.1
1.4
26.5
Bonds
316.0
47.0
10.4
373.4
Other
0.3
15.0
9.7
25.0
Total market value of pension scheme assets
316.3
87.1
21.5
424.9
Present value of funded obligations
(251.0)
(84.8)
(21.4)
(357. 2)
Present value of unfunded obligations
–
(9.3)
(9.0)
(18.3)
Present value of funded and unfunded obligations
(251.0)
(94.1)
(30.4)
(375.5)
Defined benefit pension schemes in deficit
–
(9.3)
(10.3)
(19.6)
Defined benefit pension schemes in surplus
65.3
2.3
1.4
69.0
Total surplus/(deficit) before tax
65.3
(7.0)
(8.9)
49.4
Deferred tax
(16.3)
2.5
2.8
(11.0)
Total surplus/(deficit) after tax
49.0
(4.5)
(6.1)
38.4
Equities
75.6
38.0
1.2
114.8
Bonds
230.4
38.4
9.9
278.7
Other
0.3
18.4
9.3
28.0
Total market value of pension scheme assets
306.3
94.8
20.4
421.5
Present value of funded obligations
(247.0)
(95.1)
(20.6)
(362.7)
Present value of unfunded obligations
–
(10.0)
(8.9)
(18.9)
Present value of funded and unfunded obligations
(247.0)
(105.1)
(29.5)
(381.6)
Defined benefit pension schemes in deficit
–
(10.3)
(10.3)
(20.6)
Defined benefit pension schemes in surplus
59.3
–
1.2
60.5
Total surplus/(deficit) before tax
59.3
(10.3)
(9.1)
39.9
Deferred tax
(14.8)
2.6
2.6
(9.6)
Total surplus/(deficit) after tax
44.5
( 7.7)
(6.5)
30.3
There is a net surplus of £49.0m (£65.3m before deferred tax) (2022: £44.5m (£59.3m before deferred tax))
on the UK scheme, which is recorded as a defined benefit pension asset on the balance sheet. In accordance
with IFRIC 14, the surplus on the scheme is recognised as a defined benefit asset because the Group
considers that it has an unconditional right to a refund of any surplus from the UK scheme.
Of the pension scheme assets, £400.1m (2022: £397.4m) are valued based on quoted market prices.
Beginning of year
39.9
31.2
Current service cost
(3.4)
(4.8)
Contributions
6.9
9.2
Net interest income
2.2
0.4
Actuarial gain
2.9
6.9
Net impact of benefit obligation settlement
–
(0.5)
Currency translation
0.9
(2.5)
End of year
49.4
39.9
25 Retirement benefits continued
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Annual Report 2023 185184
Bunzl plc
Annual Report 2023
Financial
statements

Financial information continued
Beginning of year
381.6
569.2
Current service cost
3.4
4.8
Interest expense
17.9
10.9
Contributions by employees
0.5
0.4
Benefit obligation attributable to settlement
–
(8.8)
Actuarial loss/(gain)
2.3
(186.5)
Benefits paid
(23.7)
(25.2)
Currency translation
(6.5)
16.8
End of year
375.5
381.6
Beginning of year
421.5
600.4
Interest income
20.1
11.3
Actuarial gain/(loss)
5.2
(179.6)
Contributions by employer
6.9
9.2
Contributions by employees
0.5
0.4
Benefits paid due to settlement
–
(9.3)
Benefits paid
(23.7)
(25.2)
Currency translation
(5.6)
14.3
End of year
424.9
421.5
The actual return on pension scheme assets was a gain of £25.3m (2022: loss of £168.3m).
The Group expects to pay approximately £1.3m in contributions to the defined benefit pension schemes in
the year ending 31 December 2024 (expected as at 31 December 2022 for the year ending 31 December
2023: £6.1m) including none for the UK (expected as at 31 December 2022 for the year ending 31 December
2023: £4.7m).
The weighted average duration of the defined benefit pension scheme liabilities at 31 December 2023 was
approximately 14.0 years (2022: 14.5 years) for the UK and 8.2 years (2022: 9.0 years) for the US.
The total defined benefit pension scheme liabilities are divided between active members (£96.5m (2022:
£102.6m)), deferred members (£142.7m (2022: £137.3m)) and pensioners (£136.3m (2022: £141.6m)).
Multi-employer pension plans
The Group participates in a number of multi-employer pensions plans (‘MEPPs’) in North America.
Although these plans are defined benefit plans the Group does not have sufficient information to
account for them as defined benefit plans and, therefore, in accordance with IAS 19, accounts for them
as defined contribution plans.
For MEPPs, US law requires payment of a withdrawal liability when employers cease contributing to
underfunded MEPPs. The liability for withdrawal payments is shared by all members of the group of
companies in any particular plan and solvent entities must cover the unfunded liabilities of employers
who are unable to pay due to insolvency or bankruptcy. On withdrawal from a plan, an employer’s
withdrawal liability amount is calculated by reference to the employer’s proportionate share of the MEPP’s
unfunded vested benefits based on the employer’s share of all contributions made to the plan over the
previous 10 years.
In 2023, the Group paid a lump sum of £9.1m towards the settlement of the liabilities for two of these plans.
The Group continues to participate in three MEPPs and continues to account for these as defined
contribution plans with the combined ongoing annual contributions for the three plans in 2024 expected
to be no more than £2.0m per annum.
26 Directors and employees
Closing
Average
Number of employees
2023
2022
2023
2022
North America
8,724
8,697
8,712
8,482
Continental Europe
6,252
5,841
6,032
5,517
UK & Ireland
4,006
3,935
3,995
4,182
Rest of the World
5,462
3,901
4,255
3,628
24,444
22,374
22,994
21,809
Corporate
84
77
78
74
24,528
22,451
23,072
21,883
Wages and salaries
991.8
938.9
Social security costs
110.3
100.6
Pension costs
32.3
31.5
Share based payments
15.4
14.1
1,149.8
1,085.1
25 Retirement benefits continued
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Annual Report 2023 185184
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Annual Report 2023
Financial
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NOTES continued
In addition to the above, acquisition related items for the year ended 31 December 2023 include
deferred consideration payments of £37.3m (2022: £24.9m) relating to the retention of former owners
of businesses acquired.
Salaries and short term employee benefits
7.6
7.3
Share based payments
2.8
3.1
Retirement benefits
0.5
0.6
10.9
11.0
The Group considers key management personnel as defined in IAS 24 ‘Related Party Disclosures’ to be the
directors of the Company and those members of the Executive Committee and the Managing Directors of
the major geographic regions who are not directors of the Company .
Non-executive directors
0.9
0.8
remuneration excluding performance related elements
1.9
1.8
annual bonus
1.3
1.3
4.1
3.9
More detailed information concerning directors’ emoluments and long term incentives is set out in the
Directors’ remuneration report. The aggregate amount of gains made by directors on the exercise of share
options during the year was £0.8m (2022: £nil). The aggregate market value of performance share awards
exercised by directors under long term incentive schemes during the year was £2.9m (2022: £1.7m). The
aggregate market value of share awards exercised by directors under the DASBS was £1.1m (2022: £0.7m).
27 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. Details of the Group’s right-of-use assets
recognised under these lease agreements are shown in Note 12.
Movement in lease liabilities
Beginning of year
569.9
488.7
Acquisitions (Note 9)
16.2
21.5
Disposal of business (Note 10)
–
(2.1)
New leases
136.7
123.3
Interest charge in the year
28.6
22.0
Payment of lease liabilities
(188.0)
(175.1)
Remeasurement adjustments
122.1
56.6
Currency translation
(21.0)
35.0
End of year
664.5
569.9
Current lease liabilities
152 .1
145.9
Non-current lease liabilities
512.4
424.0
End of year
664.5
569.9
As at 31 December 2023, the Group had £11.9m (2022: £44.5m) of leases which had been committed to but
which had not yet started. Such leases are not included in the Group’s lease liabilities as at 31 December
2023. In relation to leases which are included in lease liabilities, there are potential further future cash flows
of £67.8m (2022: £46.3m) if termination options are not exercised and extension options are exercised.
The cash outflow for low value and short term leases was £4.6m for the year ended 31 December 2023
(2022: £5.2m).
26 Directors and employees continued
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28 Cash, cash equivalents and overdrafts and net debt
Cash at bank and in hand
1, 377.1
1,504.0
Money market funds
49.0
–
Cash and cash equivalents
1,426.1
1,504.0
Bank overdrafts
(874.2)
(825.9)
Cash, cash equivalents and overdrafts
551.9
678.1
Interest bearing loans and borrowings – current liabilities
(130.0)
(161.0)
Interest bearing loans and borrowings – non-current liabilities
(1,417.1)
(1,574.0)
Derivatives managing the interest rate risk and currency profile of the debt
(90.3)
(103.2)
Net debt excluding lease liabilities
(1,085.5)
(1,160.1)
Lease liabilities (Note 27)
(664.5)
(569.9)
Net debt including lease liabilities
(1,750.0)
(1,730.0)
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:
Cash at bank and in hand net of amounts in the cash pool
520.8
700.5
Money market funds
49.0
–
Bank overdrafts net of amounts in the cash pool
(17.9)
(22.4)
Cash, cash equivalents and overdrafts
551.9
678.1
29 Movement in net debt
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 (Note 27)
–
(664.5)
–
(664.5)
End of year including lease liabilities
551.9
(2,211.6)
(90.3)
(1,750.0)
Beginning of year excluding lease liabilities
225.3
(1,545.6)
(17.1)
(1,337.4)
Cash flow excluding movements in other components of
net debt
330.9
–
–
330.9
Interest paid excluding interest on lease liabilities
(61.9)
–
–
(61.9)
Increase in borrowings
346.4
(346.4)
–
–
Repayment of borrowings
(131.8)
131.8
–
–
Payments on settlement of foreign exchange contracts
(86.2)
–
86.2
–
Net cash inflow/(outflow)
397.4
(214.6)
86.2
269.0
Non-cash movement in debt
–
87.4
(79.2)
8.2
Realised losses on foreign exchange contracts
–
–
(86.2)
(86.2)
Currency translation
55.4
(62.2)
(6.9)
(13.7)
End of year excluding lease liabilities
678.1
(1,735.0)
(103.2)
(1,160.1)
Lease liabilities (Note 27)
–
(569.9)
–
(569.9)
End of year including lease liabilities
678.1
(2,304.9)
(103.2)
(1,730.0)
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Annual Report 2023 187186
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Annual Report 2023
Financial
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NOTES continued
30 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 Consolidated cash flow statement.
Depreciation of right-of-use assets
166.1
151.1
Other depreciation and software amortisation
41.1
38.4
207.2
189.5
Share based payments
15.4
14.1
Provisions
(13.1)
(3.9)
Retirement benefit obligations
(3.5)
(3.9)
Hyperinflation accounting adjustments
2.1
8.0
Other
5.6
1.6
6.5
15.9
Decrease/(increase) in inventories
108.1
(118.7 )
Increase in trade and other receivables
(9.9)
(13.0)
(Decrease)/increase in trade and other payables
(126.6)
186.2
(28.4)
54.5
31 Related party disclosures
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. Details of the
relevant relationships with these related parties are disclosed in the Directors’ remuneration report, Note 25
and Note 26, respectively. All transactions with subsidiaries are eliminated on consolidation.
32 Post balance sheet event
On 26 February 2024, Bunzl signed an agreement to acquire an 80% stake in Nisbets and associated entities
for an initial consideration of £339m. The purchase price will be settled in cash. Founded in 1983 by Andrew
Nisbet, Nisbets is a highly respected omnichannel distributor of catering equipment and consumables in the
UK & Ireland, Northern Europe and Australasia, offering an extensive product range including a wide range
of own-brand products to foodservice customers. It has over 1,800 employees and an experienced
management team that will remain with the Group post-acquisition, with Andrew Nisbet acting as a
non-executive director and the family continuing to hold a minority interest in Nisbets. For the year ended
31 December 2023, Nisbet generated revenue of £498m with a profit before interest, tax, amortisation and
exceptional items of £35.5m and total gross assets of £242m, based on unaudited management accounts.
An additional earn-out amount may be payable based on Nisbets’ financial performance in 2024. The
transaction includes put / call options that enable Bunzl to acquire the remaining 20% stake in the future,
subject to certain conditions.
188
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Annual Report 2023
Financial
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COMPANY BALANCE SHEET
at 31 December 2023
Notes
2023
£m
2022
£m
Fixed assets
Property, plant and equipment 3 0.5 0.6
Right-of-use assets 4 2.9 3.6
Intangible assets 3 0.9 0.8
Investments 5 752.9 741.0
757.2 746.0
Current assets
Defined benefit pension asset 11 65.3 59.3
Debtors: amounts falling due within one year 7 1,309.0 1,449.9
Cash at bank and in hand 13.1 15.1
1,387.4 1,524.3
Current liabilities
Creditors: amounts falling due within one year 8 (104.7) (108.0)
Lease liabilities 10 (0.7) (0.7)
Net current assets 1,282.0 1,415.6
Total assets less current liabilities 2,039.2 2,161.6
Non-current liabilities
Provisions 9 (0.9) (0.9)
Lease liabilities 10 (2.4) (3.1)
Deferred tax liability 6 (12.5) (11.2)
Net assets 2,023.4 2,146.4
Capital and reserves
Share capital 12 108.6 108.5
Share premium 205.2 199.4
Other reserves 5.6 5.6
Capital redemption reserve 13 16.1 16.1
Profit and loss account
†
13 1,687.9 1,816.8
Total shareholders’ funds 2,023.4 2,146.4
Approved by the Board of directors of Bunzl plc (Company registration number 358948) on 26 February
2024 and signed on its behalf by Frank van Zanten, Chief Executive Officer and Richard Howes, Chief
Financial Officer.
The Accounting policies and other Notes on pages 191 to 194 form part of these financial statements.
† Profit and loss account includes a net profit after tax for the year of £91.9m (2022: £39.1m). As permitted by section 408(3) of the Companies
Act 2006, the profit and loss account of the Company has not been separately presented in these financial statements.
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Annual Report 2023 189

COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Profit and loss account
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Capital
redemption
£m
Own
shares
£m
Retained
earnings
£m
Total
shareholders’
funds
£m
At 1 January 2023 108.5 199.4 5.6 16.1 (63.4) 1,880.2 2,146.4
Profit for the year 91.9 91.9
Other comprehensive income/(expense)
Actuarial loss on defined benefit pension scheme (1.8) (1.8)
Income tax credit on other comprehensive expense 0.5 0.5
Total comprehensive income 90.6 90.6
2022 interim dividend (57.9) (57.9)
2022 final dividend (151.8) (151.8)
Issue of share capital 0.1 5.8 5.9
Employee trust shares (25.2) (25.2)
Movement on own share reserves 17.7 (17.7) –
Share based payments (net of tax) 15.4 15.4
At 31 December 2023 108.6 205.2 5.6 16.1 (70.9) 1,758.8 2,023.4
Profit and loss account
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Capital
redemption
£m
Own
shares
£m
Retained
earnings
£m
Total
shareholders’
funds
£m
At 1 January 2022 108.4 194.2 5.6 16.1 (52.9) 2,043.9 2,315.3
Profit for the year 39.1 39.1
Other comprehensive income/(expense)
Contributions to pension scheme by participating subsidiaries 3.0 3.0
Actuarial loss on defined benefit pension scheme (6.5) (6.5)
Income tax credit on other comprehensive expense 0.9 0.9
Total comprehensive income 36.5 36.5
2021 interim dividend (54.3) (54.3)
2021 final dividend (136.2) (136.2)
Issue of share capital 0.1 5.2 5.3
Employee trust shares (34.2) (34.2)
Movement on own share reserves 23.7 (23.7) –
Share based payments (net of tax) 14.0 14.0
At 31 December 2022 108.5 199.4 5.6 16.1 (63.4) 1,880.2 2,146.4
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Annual Report 2023 191190
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Annual Report 2023
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 Basis of preparation
Bunzl plc (the ‘Company’) is a company incorporated and domiciled in the United Kingdom and is registered
in England and Wales. These financial statements present information about the Company as an individual
undertaking and not about its Group.
The financial statements of the Company have been prepared on a going concern basis and under the
historical cost convention with the exception of certain items which are measured at fair value as described
in the accounting policies below.
These financial statements have been prepared in accordance with Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (‘FRS 101’) and the Companies Act 2006 as applicable to companies using
FRS 101. There are no new standards, amendments or interpretations that are applicable to the Company
for the year ended 31 December 2023. In preparing these financial statements the Company has applied
the exemptions available under FRS 101 in respect of:
• a cash flow statement and related notes;
• comparative period reconciliations for share capital and tangible fixed assets;
• disclosures relating to transactions with wholly owned subsidiaries and capital management;
• the effects of new but not yet effective IFRSs; and
• disclosures relating to the compensation of key management personnel.
As the consolidated financial statements of the Company include the equivalent disclosures, the Company
has also applied the exemptions available under FRS 101 in respect of:
• certain disclosures required by IFRS 2 ‘Share Based Payments’ in respect of Group settled share based
payments; and
• certain disclosures required by IFRS 13 ‘Fair Value Measurement’ and disclosures required by IFRS 7
‘Financial Instruments: Disclosures’.
2 Accounting policies
The accounting policies of the Company have, unless otherwise stated, been applied consistently to all
periods presented in these financial statements. In most cases the accounting policies for the Company are
fully aligned with the equivalent accounting policies for the Group as stated in Note 2 to the consolidated
financial statements. The accounting policies of the Company which are aligned with those of the Group
arethe policies for property, plant and equipment, leases, intangible assets, income tax, trade and other
payables, provisions, retirement benefits, investment in own shares and dividends. The accounting policies
that are specific to the Company are set out below.
a. Investment in subsidiary undertakings
Investments in subsidiary undertakings are held at cost less any provision for impairment. The subsidiary
undertakings which the Company held at 31 December 2023 are disclosed in the Related undertakings
Notein the Shareholder information section on pages 202 to 207.
b. Share based payments
The Company operates a number of equity settled share based payment compensation plans. Details
ofthese plans are outlined in Note 21 to the consolidated financial statements and the Directors’
remuneration report. The total expected expense is based on the fair value of options and other share
based incentives on the grant date, calculated using a valuation model, and is spread over the expected
vesting period with a corresponding credit to equity.
Where the Company grants options over its own shares to the employees of its subsidiaries and it has not
recharged the cost to the relevant subsidiaries, it recognises, in its individual financial statements, an
increase in the cost of investment in its subsidiaries equivalent to the equity settled share based payment
charge recognised in its consolidated financial statements, with the corresponding credit being recognised
directly in equity.
c. Financial guarantee contracts
The Company has issued financial guarantee contracts to guarantee the indebtedness of other companies
within its Group. The likelihood of these financial guarantee contracts being called is considered to be
remote and therefore the estimated financial effect of issuing is nil (2022: nil). The fair value of the issued
financial guarantee contracts is deemed to be immaterial.
d. Intercompany and other receivables
Intercompany and other receivables are initially measured at fair value. Subsequent to initial recognition
these assets are measured at amortised cost less any provision for expected credit losses. The Group
measures expected credit losses using the expected credit loss model in accordance with IFRS 9. There
were no impairment losses on intercompany or other receivables during the year (2022: none).
e. Defined benefit pension schemes
The Company is the sponsoring company of the UK defined benefit pension scheme. As there is no
contractual agreement or stated Group policy for charging the net defined benefit cost of the scheme to
participating subsidiaries, the net defined benefit pension cost or benefit is recognised fully by the Company.
The contributions paid by the participating subsidiaries other than the Company are credited to profit or
loss of the Company where the amounts relate to service and are independent of the number of years of
service or to other comprehensive income if not linked to service.
f. Judgements made in applying the Company’s accounting policies
In the course of preparing the financial statements, other than judgements involved in determining
estimates and assumptions (see Note 2g below), no judgements have been made in the process of applying
the Company’s accounting policies that have had a significant effect on the amounts recognised in the
financial statements.
g. Sources of estimation uncertainty
In applying the Company’s accounting policies various transactions and balances are valued using estimates
or assumptions. Should these estimates or assumptions prove incorrect, there may be an impact on the
following year’s financial statements. As at 31 December 2023, the only source of estimation uncertainty
that has a significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year is the measurement of the defined benefit pension scheme liability
which is explained in Note 2u to the consolidated financial statements.
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NOTES TO THE COMPANY FINANCIAL STATEMENTS continued
3 Property, plant and equipment and intangible assets
Short
leasehold
improvement
£m
Fixtures,
fittings and
equipment
£m
Total
tangible
assets
£m
Total
intangible
assets
£m
Cost
Beginning of year 0.4 1.8 2.2 2.3
Additions 0.1 – 0.1 0.1
End of year 0.5 1.8 2.3 2.4
Accumulated depreciation and amortisation
Beginning of year 0.1 1.5 1.6 1.5
Charge in year 0.1 0.1 0.2 –
End of year 0.2 1.6 1.8 1.5
Net book value at 31 December 2023 0.3 0.2 0.5 0.9
Net book value at 31 December 2022 0.3 0.3 0.6 0.8
4 Right-of-use assets: Property
Net book value
2023
£m
2022
£m
Beginning of year 3.6 0.2
Remeasurement adjustments – 4.0
Depreciation charge in the year (0.7) (0.6)
End of year 2.9 3.6
5 Investments
Investments in subsidiary undertakings
2023
£m
2022
£m
Cost
Beginning of year 744.3 733.1
Additions 11.9 11.2
End of year 756.2 744.3
Impairment provisions
Beginning and end of year 3.3 3.3
Net book value at 31 December 752.9 741.0
6 Deferred tax asset/(liability)
Recognised deferred tax assets net of deferred tax liabilities are attributable to the following:
Defined
benefit
pension
scheme
£m
Share based
payments
£m
Other
£m
Net deferred
tax asset/
(liability)
£m
At 1 January 2022 (15.7) 3.5 0.2 (12.0)
Recognised in other comprehensive income or directly
in equity 0.9 (0.1) – 0.8
At 31 December 2022/1 January 2023 (14.8) 3.4 0.2 (11.2)
Recognised in profit or loss (2.0) – 0.2 (1.8)
Recognised in other comprehensive income or directly
in equity 0.5 – – 0.5
At 31 December 2023 (16.3) 3.4 0.4 (12.5)
No deferred tax asset has been recognised in respect of unutilised capital losses of £60.7m (2022: £68.5m).
7 Debtors
2023
£m
2022
£m
Debtors: amounts falling due within one year
Amounts owed by Group undertakings 1,302.0 1,440.1
Prepayments and other debtors 7.0 9.8
1,309.0 1,449.9
Amounts owed by Group undertakings falling due within one year are interest bearing, unsecured and
repayable on demand with no fixed date of repayment. Interest rates are linked to the Bank of England Base
Rate. The amounts owed by Group undertakings are classified as a current asset as the company expects to
realise the asset in its normal operating cycle.
8 Creditors: amounts falling due within one year
2023
£m
2022
£m
Trade creditors 0.9 4.7
Amounts owed to Group undertakings 82.2 82.1
Other tax and social security contributions 0.5 0.5
Income tax payable 3.8 3.0
Accruals 17.3 17.7
104.7 108.0
Amounts due to Group undertakings are repayable on demand and are not interest bearing.
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Annual Report 2023 193192
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Annual Report 2023
Financial
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9 Provisions
2023
£m
2022
£m
Beginning of year 0.9 1.0
Utilised or released – (0.1)
End of year 0.9 0.9
The provisions relate to properties, where amounts are held against liabilities for repairs and dilapidations,
and other claims.
10 Lease liabilities
2023
£m
2022
£m
Beginning of year (3.8) (0.2)
Interest charge in the year (0.1) (0.1)
Remeasurement adjustments – (4.3)
Payments of lease liabilities 0.8 0.8
End of year (3.1) (3.8)
Ageing of lease liabilities:
Current lease liabilities (0.7) (0.7)
Non-current lease liabilities (2.4) (3.1)
End of year (3.1) (3.8)
11 Retirement benefits
The Company operates a number of retirement benefit schemes in the UK, including both defined benefit
and defined contribution schemes. A description of the characteristics and risks to which the Company is
exposed in relation to the UK defined benefit pension scheme together with the principal assumptions used
and sensitivity to changes in assumptions are detailed in Note 25 to the consolidated financial statements.
The amounts included in the Company financial statements relating to the defined benefit pension scheme
at 31 December were:
Amounts included in profit for the year
2023
£m
2022
£m
Current service cost (net of contributions by employees) 0.7 2.1
Net interest income (3.1) (1.2)
Contributions paid by participating subsidiaries linked to service (0.3) (0.3)
Total charge to profit for the year (2.7) 0.6
Amounts recognised in other comprehensive income
2023
£m
2022
£m
Actual return less expected return on pension scheme assets 0.4 (150.9)
Experience loss on pension scheme liabilities (0.7) (15.1)
Impact of changes in assumptions relating to the present value of pension
scheme liabilities (1.5) 159.5
Actuarial loss on defined benefit pension scheme (1.8) (6.5)
Contributions paid by participating subsidiaries not linked to service – 3.0
Total charge to other comprehensive income (1.8) (3.5)
Movement in defined benefit pension scheme surplus/(deficit)
2023
£m
2022
£m
Beginning of year 59.3 62.8
Current service cost (0.7) (2.1)
Contributions 5.4 3.9
Net interest income 3.1 1.2
Actuarial loss (1.8) (6.5)
End of year 65.3 59.3
Changes in the present value of defined benefit pension scheme liabilities
2023
£m
2022
£m
Beginning of year 247.0 396.2
Current service cost 0.7 2.1
Interest expense 12.1 7.0
Contributions by employees 0.4 0.4
Actuarial loss/(gain) 2.2 (144.4)
Benefits paid (11.4) (14.3)
End of year 251.0 247.0
Changes in the fair value of defined benefit pension scheme assets
2023
£m
2022
£m
Beginning of year 306.3 459.0
Interest income 15.2 8.2
Actuarial gain/(loss) 0.4 (150.9)
Contributions by the Company 5.1 0.6
Contributions by participating subsidiaries 0.3 3.3
Contributions by employees 0.4 0.4
Benefits paid (11.4) (14.3)
End of year 316.3 306.3
The actual return on pension scheme assets was a gain of £15.6m (2022: loss of £142.7m). The market value
of scheme assets and the present value of retirement benefit obligations at 31 December are detailed in
Note 25 to the consolidated financial statements. The total defined benefit pension liability is divided
between active members (£45.6m (2022: £43.2m)), deferred members (£98.4m (2022: £92.4m)) and
pensioners (£107.0m (2022: £111.4m)).
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NOTES TO THE COMPANY FINANCIAL STATEMENTS continued
12 Share capital
2023
£m
2022
£m
Issued and fully paid ordinary shares of 32
1
⁄
7
p each 108.6 108.5
Number of ordinary shares in issue and fully paid
2023 2022
Beginning of year 337,667,846 337,398,796
Issued – option exercises 353,231 269,050
End of year 338,021,077 337,667,846
13 Reserves
The capital redemption reserve of £16.1m (2022: £16.1m) as presented in the statement of changes in equity
records the aggregate nominal value of treasury shares that have been cancelled.
The own shares reserve of £70.9m (2022: £63.4m) as presented in the statement of changes in equity
comprises ordinary shares of the Company held by the Company in an employee benefit trust. The assets,
liabilities and expenditure of the trust are included in the Company financial statements. Details of the trust
and investment in own shares reserve are set out in Note 21 to the consolidated financial statements.
The dividends paid and declared in the current and prior year are detailed in Note 22 to the consolidated
financial statements.
14 Financial guarantees
Borrowings by subsidiary undertakings totalling £1,614.4m (2022: £1,822.6m) which are included in the
Group’s borrowings have been guaranteed by the Company.
15 Employees’ and directors’ remuneration
The average number of persons employed by the Company during the year (including directors) was 66
(2022: 61) and the aggregate employee costs relating to these persons were:
2023
£m
2022
£m
Wages and salaries 12.5 12.4
Social security costs 1.6 1.7
Share based payments 1.6 0.9
Pension costs 0.9 0.8
16.6 15.8
Conditional awards of executive share options and performance shares are granted to executive directors
and other senior employees of the Company. Employees of the Company can also participate in the
Company’s Sharesave Scheme. Further information on the Company’s share plans is disclosed in Note 21 to
the consolidated financial statements.
16 Related party disclosures
The Company has identified the directors of the Company, their close family members, its key management,
the UK pension scheme and its subsidiary undertakings as related parties for the purpose of IAS 24 ‘Related
Party Disclosures’. Details of the relevant relationships with these related parties are disclosed in the
Directors’ remuneration report, Note 25 and Note 26 to the consolidated financial statements and the
Related undertakings note in the Shareholder information section on pages 202 to 204.
194
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Financial
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STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Statement of directors’
responsibilities
The directors are responsible for preparing the
Annual Report, which includes the Directors’
remuneration report and the financial
statements, in accordance with applicable law
andregulation.
Company law requires the directors to prepare
financial statements for each financial year. Under
that law the directors have prepared the Group
financial statements in accordance with UK-
adopted International Accounting Standards
(‘IASs’) and the Company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards, comprising FRS 101
‘Reduced Disclosure Framework’, and applicable
law). In preparing the Group financial statements,
the directors have also elected to comply with
International Financial Reporting Standards
(‘IFRSs’), issued by the International Accounting
Standards Board (‘IASB’) (‘IFRSs as issued by
theIASB’).
Under company law, directors must not approve
the financial statements unless they are satisfied
that they give a true and fair view of the state of
affairs of the Group and the Company and of the
profit or loss of the Group for that period. In
preparing the financial statements, the directors
are required to:
• select suitable accounting policies and then
apply them consistently;
• state whether applicable UK-adopted IASs and
IFRSs as issued by the IASB have been followed
for the Group financial statements and United
Kingdom Accounting Standards, comprising FRS
101, have been followed for the Company
financial statements, subject to any material
departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates
that are reasonable and prudent; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and the Company will
continue in business.
The directors are responsible for safeguarding the
assets of the Group and the Company and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are also responsible for keeping
adequate accounting records that are sufficient to
show and explain the Group’s and the Company’s
transactions and disclose with reasonable
accuracy at any time the financial position of the
Group and the Company and enable them to
ensure that the financial statements and the
Directors’ remuneration report comply with the
Companies Act 2006.
The directors are responsible for the maintenance
and integrity of the Company’s website.
Legislation in the United Kingdom governing the
preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
The directors consider that the Annual Report,
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the Group’s
and the Company’s position and performance,
business model and strategy.
Each of the directors, whose names and functions
are set out on pages 90 to 91 of the Annual
Report, confirm that, to the best of
theirknowledge:
• the Group financial statements, which have
been prepared in accordance with UK-adopted
IASs and IFRSs as issued by the IASB, give a true
and fair view of the assets, liabilities, financial
position and profit of the Group;
• the Company financial statements, which have
been prepared inaccordance with United
Kingdom Accounting Standards, comprising FRS
101, give a true and fair view of the assets,
liabilities and financial position of the Company;
and
• the Annual Report includes a fair review of the
development and performance of the business
and the position of the Group and the
Company, together with a description of the
principal risks and uncertainties that they face.
By order of the Board
Frank van Zanten Richard Howes
Chief Executive Chief Financial
Officer Officer
26 February 2024
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Annual Report 2023 195

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF BUNZL PLC
Report on the audit of the financial statements
Opinion
In our opinion:
• Bunzl plc’s Group financial statements and Company financial statements (the “financial statements”)
give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December
2023 and of the Group’s profit and the Group’s cash flows for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards as applied in accordance with the provisions of the Companies
Act 2006;
• the Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the
Consolidated balance sheet and the Company balance sheet as at 31 December 2023; the Consolidated
income statement, the Consolidated statement of comprehensive income, the Consolidated cash flow
statement, the Consolidated statement of changes in equity and the Company statement of changes in
equity for the year then ended; and the notes to the financial statements, comprising material
accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 1 to the financial statements, the Group, in addition to applying UK-adopted
international accounting standards, has also applied international financial reporting standards (IFRSs)
as issued by the International Accounting Standards Board (IASB).
In our opinion, the Group financial statements have been properly prepared in accordance with IFRSs
as issued by the IASB.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’
responsibilities for the audit of the financial statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as
applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s
Ethical Standard were not provided.
Other than those disclosed in note 5 to the Group financial statements, we have provided no non-audit
services to the Company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope • We performed full scope audits and other procedures of the financial
information of 87 components spread across 26 different countries across
North America, Continental Europe, UK & Ireland and Rest of the World.
• Specific audit procedures in relation to various Group activities, including
consolidation, taxation, pensions, business combinations and the carrying
value of goodwill and intangible assets, were performed by the Group audit
team centrally
• The components where we conducted audit procedures, together with work
performed by the Group audit team centrally, accounted for approximately
94% of the Group’s revenue and 94% of the Group’s adjusted profit before
tax. The full scope components in the North America, the Netherlands and
Australia comprise sub consolidations; in calculating these coverage levels we
have taken 100% coverage from the full scope audits performed in these
locations
Key audit matters • Valuation of intangible assets acquired in a business combination (Group).
• Valuation of defined benefit schemes’ obligations (Group and Company).
Materiality • Overall Group materiality: £42.0 million (2022: £40.0 million) based on 5% of
adjusted profit before tax.
• Overall Company materiality: £20.0 million (2022: £21.0 million) based on
1% of net assets.
• Performance materiality: £31.5 million (2022: £30.0 million) (Group) and
£15.0 million (2022: £15.7 million) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most
significance in the audit of the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not due to fraud) identified by the
auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
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Valuation of inventory provisions (Group), which was a key audit matter last year, is no longer
includedbecause of the reduction of risk in 2023. Otherwise, the key audit matters below are
consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation of intangible assets acquired in a business combination (Group)
Refer to the Audit Committee report,
Note 2 and Note 9 of the Group financial
statements.
Given that the Group continues to make
significant investment in acquisitions,
accounting for intangible assets acquired
in a business combinations is an area of
focus due to the level of judgement
involved in the valuation. Business
combinations can involve judgements
inrelation to the value of assets and
liabilities that are recognised on
acquisition, particularly the allocation of
purchase consideration to goodwill and
separately identified intangible assets.
Management relies on external valuation specialists for
larger acquisitions to value significant intangibles acquired
inbusiness combinations. Where management has relied
onsuch specialists, with the support of our own valuation
specialists, we assessed their objectivity and competence
and tested the results of their work. For smaller acquisitions,
management prepares their own valuation models.
We focused in particular on the following areas:
• We assessed the methodology and key assumptions used
in determining the value of the customer relationship
assets for the more significant acquisitions;
• We determined whether the cash flows applied within the
valuation models and the key assumptions such as the
discount rates, growth rates, customer attrition and
period for amortisation, were appropriate;
• We evaluated the consideration paid or payable in respect
of certain acquisitions made; and
• We considered the disclosures in Note 2 and Note 9 of the
Group financial statements and we are satisfied that
these disclosures are appropriate.
Based on the procedures performed, we noted no material
issues arising from our work.
Key audit matter How our audit addressed the key audit matter
Valuation of defined benefit schemes’ obligations (Group and Company)
Refer to the Audit Committee report,
Note 2 and Note 25 of the Group
financial statements.
The Group has defined benefit pension
schemes (with material schemes in the
United States and the United Kingdom)
with a net surplus of £49.4m at the
current year end (2022: net surplus
of£39.9m). The gross assets and
liabilities in each scheme are
significantin the context of the
Consolidated balance sheet.
Management estimation is required in
relation to the measurement of pension
scheme obligations, and management
employs independent actuarial experts
to assist it in determining appropriate
assumptions such as inflation levels,
discount rates, salary increases and
mortality rates. Movements in these
assumptions can have a material impact
on the determination of the liability and,
therefore, the extent of any net surplus
or deficit.
We used our own actuarial experts to satisfy ourselves that
the assumptions used in calculating the US and UK pension
scheme liabilities are appropriate, including confirming that
salary increases were appropriate and that mortality rate
assumptions were consistent with relevant benchmarks.
We determined that the discount and inflation rates used
inthe valuation of the pension scheme liabilities were
consistent with our internally developed benchmarks.
In each case we considered the assumptions made by
management to be reasonable in light of the available
evidence. We also performed procedures to satisfy
ourselves over the completeness and accuracy of the
employee data used in the calculation.
Based on the procedures performed, we noted no material
issues arising from our work.
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial statements as a whole, taking into account the structure of the Group and the
Company, the accounting processes and controls, and the industry in which they operate.
We identified one financially significant component, being North America, where a full scope audit has
been performed. In addition, we have identified two material components being the Netherlands and
Australia. To achieve the coverage desired, we identified five components across the UK and France for
which a full scope audit of their financial information has been performed. In order to satisfy the
request of the Audit Committee and management, we performed full scope audits and other
procedures on a further 79 components. The components where we performed audit procedures
covered over 94% of Group revenue and adjusted profit before taxation.
Where work was performed by component auditors, detailed instructions were issued by us and the
Group audit team conducted conference calls with component teams. For our financially significant and
material components, oversight procedures included regular communication with the component
team, reviewing their working papers, and attending the clearance meeting either virtually or in person.
Specific audit procedures over central functions and areas of significant judgement, including
consolidation, taxation, pensions, business combinations and the carrying value of goodwill and other
intangible assets, were performed by the Group audit team centrally.
The impact of climate risk on our audit
As part of the audit, we inquired of management to understand and evaluate the Group’s risk
assessment process in relation to climate change. Management has sought advice from external
sustainability experts to help them understand the environmental challenges they face, and to source
science-based inputs for their assessment of climate risk. We reviewed management’s paper which sets
out their assessment of climate change risk to the Group and the impact, if any, on the financial
statements and impairment testing. In evaluating the completeness of the risks identified, we assessed
the objectivity and competence of management’s experts, we engaged our internal climate change
experts to review management’s assessment, we considered the return submitted to the Carbon
Disclosure Project by the Group and challenged management on how they considered the Group’s net
zero commitment in their assessment. In responding to the risk identified, we specifically considered
how climate change risk would impact the assumptions made in the forecasts prepared by
management used in their assessment of the carrying value of goodwill. We read the disclosures in
relation to climate change made in the other information within the Annual Report to ascertain whether
the disclosures are materially consistent with the financial statements and our knowledge from our
audit. Our responsibility over other information is further described in the Reporting on other
information section of our report.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative
thresholds for materiality. These, together with qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality £42.0 million (2022: £40.0 million). £20.0 million (2022: £21.0 million).
How we determined it 5% of adjusted profit before tax 1% of net assets
Rationale for benchmark
applied
Given that the Group’s businesses are
profit oriented and the directors use
adjusted profit measures to assess
the performance of the business, we
believe that adjusted profit before tax
is the best benchmark to use.
Considering the nature of the
business and activities in Bunzl
plc (holding activities) we use the
Company's net asset value as a
basis for the calculation of the
overall materiality level.
For each component in the scope of our Group audit, we allocated a materiality that is less than our
overall Group materiality. The range of materiality allocated across components was up to £35.0 million.
Certain components were audited to a local statutory audit materiality that was also less than our
overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we
use performance materiality in determining the scope of our audit and the nature and extent of our
testing of account balances, classes of transactions and disclosures, for example in determining sample
sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to
£31.5million (2022: £30.0 million) for the Group financial statements and £15.0 million (2022:
£15.7million) for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of
misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded
that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above £2.0 million (Group audit) (2022: £1.9 million) and £2.0 million (Company audit) (2022:
£1.9million) as well as misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF BUNZL PLC continued
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Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue
toadopt the going concern basis of accounting included:
• We assessed the appropriateness of the cash flow forecasts in the context of the Group’s 2023
financial position and evaluated the directors’ downside sensitivities against these forecasts.
• We evaluated the key assumptions in the forecasts and considered whether these were supported
by the evidence we obtained.
• We examined the headroom under the base case cash flow forecasts, as well as the directors’
sensitised cases, and evaluated whether the directors’ conclusion that headroom remained in all
events was supported by the evidence we obtained.
• We obtained the Group’s covenant calculations and reperformed the calculation including applying
sensitivities to assess the potential impact of downside sensitivities on covenant compliance.
• We also reviewed the disclosures provided relating to the going concern basis of preparation and
found that these provided an explanation of the directors’ assessment that was consistent with the
evidence we obtained.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Group’s and the
Company’s ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a
guarantee as to the Group’s and the Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code,
wehave nothing material to add or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial
statements and our auditors’ report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures
required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to
report certain opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the
Strategic report and Directors’ report for the year ended 31 December 2023 is consistent with the
financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment
obtained in the course of the audit, we did not identify any material misstatements in the Strategic
report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
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Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term
viability and that part of the corporate governance statement relating to the Company’s compliance
with the provisions of the UK Corporate Governance Code specified for our review. Our additional
responsibilities with respect to the corporate governance statement as other information are described
in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have nothing material to add or draw attention
toin relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and
principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place
to identify emerging risks and an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate
toadopt the going concern basis of accounting in preparing them, and their identification of any
material uncertainties to the Group’s and Company’s ability to continue to do so over a period of at
least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the Group’s and Company’s prospects, the
period this assessment covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall due over the period of its assessment,
including any related disclosures drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group and Company
was substantially less in scope than an audit and only consisted of making inquiries and considering
thedirectors’ process supporting their statement; checking that the statement is in alignment with
therelevant provisions of the UK Corporate Governance Code; and considering whether the statement
is consistent with the financial statements and our knowledge and understanding of the Group and
Company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for the members to assess the Group’s and
Company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and
internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement
relating to the Company’s compliance with the Code does not properly disclose a departure from
arelevant provision of the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for
the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The directors are also responsible for such internal control
as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Company’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 the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of
non-compliance with laws and regulations related to listing Rules, health and safety regulations,
environmental regulations, data protection, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations
that have a direct impact on the financial statements such as the Companies Act 2006 and tax
legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of
the financial statements (including the risk of override of controls), and determined that the principal
risks were related to the posting of inappropriate journal entries to increase revenue or reduce
expenditure, and management bias in accounting estimates. The Group engagement team shared this
risk assessment with the component auditors so that they could include appropriate audit procedures
in response to such risks in their work. Audit procedures performed by the Group engagement team
and/or component auditors included:
• Enquiry of management, those charged with governance and the entity’s in-house legal team around
actual and potential litigation and claims.
• Reviewing minutes of meetings of those charged with governance including the Board, Audit
committee and Executive committee
• Reviewing internal audit reports
• Assessment of matters reported on the Group’s whistleblowing helpline
• Auditing the risk of management override of controls, including through testing journal entries and
other adjustments for appropriateness and testing accounting estimates (because of the risk of
management bias)
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF BUNZL PLC continued
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Annual Report 2023 201200
Bunzl plc
Annual Report 2023
Financial
statements

There are inherent limitations in the audit procedures described above. We are less likely to become
aware of instances of non-compliance with laws and regulations that are not closely related to events
and transactions reflected in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing complete populations of certain transactions and balances,
possibly using data auditing techniques. However, it typically involves selecting a limited number of
items for testing, rather than testing complete populations. We will often seek to target particular items
for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable
us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on
theFRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as
abody in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, 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.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ remuneration report to be audited
are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the directors on
19May2014 to audit the financial statements for the year ended 31 December 2014 and subsequent
financial periods. The period of total uninterrupted engagement is 10 years, covering the years ended
31 December 2014 to 31 December 2023.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R,
these financial statements form part of the ESEF-prepared annual financial report filed on the National
Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory
Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual
financial report has been prepared using the single electronic format specified in the ESEF RTS.
Neil Grimes (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
26 February 2024
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Annual Report 2023
Financial
statements

SHAREHOLDER INFORMATION
Subsidiary undertakings Registered office address
Argentina
Vicsa Steelpro S.A. 1
Australia
Atlas Health Care Pty Limited 6
Bunzl Australasia Limited 5
Bunzl Brands & Operations Pty Limited 3
Bunzl Catering Supplies Limited 6
Bunzl Food Processor Supplies Pty Limited 6
Bunzl Outsourcing Services Limited 6
Containit Pty Ltd
(iii)
(80%) 3
Fire Rescue Safety Australia Pty Ltd (80%) 2
GRC Medical Pty Ltd 5
Inkell Pty. Limited 4
Interpath Services Pty. Ltd. 5
Melbourne Cleaning Supplies Pty Ltd
(iii)
6
Multipoint Technologies Pty Ltd (75.1%) 5
Network Packaging Pty Limited 3
Obex Australia Holdings Pty Ltd 5
Robertsons Lifting & Rigging Pty Limited 3
Sanicare Australia Pty Limited 5
Worksense Workwear and Safety Pty Limited 3
Austria
Bunzl Holdings Austria GmbH 7
Meier Verpackungen GmbH 7
Belgium
AFL Belgium BV (90%) 11
Établissements Glorieux SA 8
King Belgium NV 12
Total Safety Supply Belgium BVBA 10
Varia-Pack NV 9
Subsidiary undertakings Registered office address
Brazil
BR Hommed Comércio de Materiais
MédicosLtda. 26
Bunzl Equipamentos para Proteção
Individual Ltda. 24
Canada Central de Negócios do Brasil Ltda. 17
Concoct Engenharia E Comércio Ltda. 28
Corsul Comercio e Representações do
SulLtda. 15
Corsul Representações Comerciais Ltda. 15
Dental Sorria Ltda. 31
DVT Comércio, Importação E
ExportaçãoLtda. 21
Endolog Logística e Armazéns Ltda. 16
Full Safe Equipamentos de Proteção Ltda. 23
Ibracon Empreendimentos e
ParticipaçõesLtda. 23
Indústria e Comércio Leal Ltda. 24
Irudek Brazil Importação, Exportação,
Comercio e Sericos de Proteção e Segurança
Ltda (65.8%) 29
Labor Import Comercial Importadora
Exportadora Ltda 27
Lanlimp Descartáveis e Limpeza Ltda. (70%) 14
Manulatex Leal Ltda. (49%) 23
MCR Safety de Brasil Distribuiacao de
Equipamentos 25
Medcorp Saúde tecnologia Ltda 13
Octomed Comércio de Produtos
MédicosLtda. 20
Pactual Comércio de Descartáveis e Limpeza
Ltda. (70%) 22
Subsidiary undertakings Registered office address
SP Equipamentos de Proteção ao trabalho
eMRO Ltda. 18
SP Intervention Ltda. 19
Super Safe do Brasil Ltda. 28
VCH – Importadora, Exportadora e
Distribuição de Produtos Ltda. 30
Canada
4550137 Manitoba Ltd.
(iii)
38
8948399 Canada Inc. d/b/a Sur-Seal
Packaging
(iii)
37
A Miracle Sanitation Supply Co. Inc. 38
Bunzl Canada, Inc. 39
Dura Plus Inc. 34
Ghost Distribution Inc. 33
McCue Corporation Canada (96.9%) 35
PackPro Systems Inc.
(iii)
(85%) 36
Pinnacle Paper & Sanitation Inc.
(ii)
37
Snelling Paper & Sanitation Ltd.
(iii)
37
Speedy Janitorial Supplies Co. Ltd. 38
Tingley Inc. 32
Chile
B2B Web Distribuicao de Produtos Chile SpA 40
Bunzl Chile Holdings SpA 40
DPS Chile Comercial Limitada 42
Enepack SpA 42
Tecno Boga Comercial Limitada 41
Vicsa Safety Comercial Limitada 40
China
Beijing HSESF Safety Technology Co., Ltd. 44
Bunzl Trading (Shanghai) Limited 53
Diversified Distribution Systems Trading
(Shanghai) Ltd. 46
Keenpac (Shenzhen) Trading
Company Limited 47
McCue (Xiamen) Safety Technologies Co.,
Ltd (96.9%) 50
MCR Safety Foshan South Co., Ltd. 51
MCR Safety Products Foshan Co., Ltd. 52
Shanghai Cosafety Technology Co., Ltd. 43
Shanghai Yinghao Protection
Technology Co., Ltd. 49
Subsidiary undertakings Registered office address
Vicsa Commerce and Trading
(Shanghai) Co., Ltd 48
Colombia
B2B Web Distribuição De Produtos
ColombiaSpa S.A.S 54
Importadores Exportadores Solmaq S.A.S 54
MCR Safety Colombia S.A.S. 55
Vicsa Steelpro Colombia S.A.S. 56
Czech Republic
Blyth s.r.o. 58
Bunzl CS s.r.o. 57
VM Footwear s.r.o. (70%) 59
VM Obuv s.r.o. (70%) 59
Denmark
Bunzl Distribution Danmark A/S 60
Bunzl Holding Danmark A/S 60
Clean Care A/S 61
ICM A/S (78.9%) 62
MultiLine A/S 63
PM Pack A/S (70%) 64
France
Adage SAS 71
Alpes Entretien Distribution SAS 76
Blanc SAS 86
Bourgogne Hygiene Entretien SAS 68
Bunzl Holdings France SAS 79
Comatec SAS 78
Daugeron & Fils SAS 80
Fichot Hygiene SAS 85
France Sécurité SAS 74
Gama 29 SAS 73
GM Equipement S.A.S. 65
Groupe Comptoir SAS 69
Hedis SAS 67
Industrie du Compactage Alimentaire Hygiene
ICA Hygiene L’image du Propre SAS 82
Keenpac France SAS 70
Ligne T SAS 72
Mat’hygiene SAS 75
Nicolas Entretien SAS 84
Related undertakings as at 31December 2023
In accordance with section 409 of the Companies Act 2006 a full list of Bunzl plc’s subsidiary
undertakings and other shares held by the Company as at 31 December 2023 is disclosed below. The
registered office address of each entity or, in the case of unincorporated entities, the principal place of
business, is disclosed on pages 205 to 207. Unless otherwise stated the subsidiary undertakings listed
are wholly owned and held indirectly by Bunzl plc with ordinary shares issued (or the equivalent of
ordinary shares in the relevant country of incorporation). In some of the jurisdictions in which the
Group operates share classes are not defined and in these instances, for the purposes of this
disclosure, the shares issued have been classified as ordinary shares. Bunzl plc does not have any
associated undertakings, other than those listed below, and has no joint venture companies.
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Additional
information

Subsidiary undertakings Registered office address
ORRU SAS 81
PLG Finances SAS 83
PLG SAS 83
Prorisk S.A.S. 65
SCI des Saules SCI 71
Société Civile Immobilière Sainte Claire
Deville SC 71
Sodiscol SAS 66
Sopecal Hygiene SAS 77
Germany
Arbeitsschutz-Express GmbH (66%) 95
Bäumer Betriebshygiene
Vertriebsgesellschaft mbH
(iii)
91
Bunzl Großhandel GmbH 87
Bunzl Healthcare GmbH 89
Bunzl Holding GmbH
(iii)
87
Bunzl Holding No. 2 GmbH (75%) 87
hygi GmbH & Co. KG (75%) 93
hygi.de Holding GmbH
(iii)
(75%) 93
hygi.de Import GmbH (75%) 93
hygi.de Management GmbH (75%) 93
Majestic GmbH 94
McCue Europe 90
PKA Klöcker Gmbh
(iii)
88
Protemo GmbH 91
Hong Kong
Bunzl Asia Limited
(iii)
96
Bunzl Retail Services of Hong Kong Limited 97
Keenpac Asia Limited 99
MCR Safety Asia Company Limited 98
Hungary
Bunzl CEE Kft 101
Bunzl Magyarország Kft. 101
Ireland
Abco Kovex Limited (90%) 102
Bunzl Ireland Limited 102
G.H. Pittman Limited
(iii)
103
Thomas McLaughlin (Ireland) Limited 102
Subsidiary undertakings Registered office address
Israel
M.S. Global Limited 104
Meichaley Zahav Packages Ltd 105
Silco (Utensils) A.S. Limited
(iii)
104
Italy
B2B Distribution Italy Holdings S.r.l. 107
Irudek Italia, S.R.L. (75%) 109
Keenpac Italia S.r.l. 106
Neri S.p.A. 107
Secure Service S.r.l. 108
Malaysia
Medshop Malaysia Sdn. Bhd. (75.1%) 110
Mexico
Bunzl De Mexico S. De R. L. De C.V
(iii)
116
Bunzl Retail Services of Mexico, S. de R.L.
deC.V.
(iii)
112
Bunzl Servicios, S. De R. L. De C.V
(iii)
116
Cool Pak AG Packaging, S. de R. L. de C.V.
(iii)
114
Cool Pak Exports S. de R.L. de C.V.
(iii)
115
Espomega S. de R.L. de C.V.
(iii)
120
Pico Textil, S. de R.L. de. C.V. 118
Proepta, S.A. DE C.V.
(iii)
117
Shelby Manufacturing de México, S.A. de C.V. 111
Steel pro S.A de C.V.
(iii)
113
TRC Protective Footwear, S.A. de C.V.
(iii)
119
Web Distribucion Safety Mexico, S. de R.L.
deC.V.
(iii)
121
Morocco
Proin Maroc, S.à r.l. 122
Netherlands
AFL Groep B.V. (90%) 131
Allshoes Benelux B.V. 130
Bunzl Outsourcing Services B.V. 134
Bunzl Verpakkingen Arnhem B.V. 124
De Ridder B.V. 127
Ecotools B.V. 135
Groveko B.V. (93.7%) 132
Groveko Group Holdings B.V. (93.7%) 134
King Nederland B.V. 126
Subsidiary undertakings Registered office address
Le Roux Verpakkingen & Disposables
B.V.(75.1%) 133
Majestic Products B.V. 128
MCR Safety Europe B.V. 129
QS Nederland B.V. 123
Worldpack Trading B.V. 125
New Zealand
Bunzl New Zealand Holdings (No. 2) Limited
(iii)
136
Bunzl New Zealand Holdings Limited
(iii)
(99.1%) 136
Bunzl Outsourcing Services NZ Limited 140
Corded Strap (NZ) Limited 141
Downs Distributors Limited (99.1%) 142
Fire Rescue Safety New Zealand Limited (80%) 140
ICB Cleaning Supplies Limited 139
Isobex Medical Limited (99.1%) 142
Nelson Packaging Supplies Limited 141
Obex (NZ) Limited (99.1%) 142
Obex Medical Limited (99.1%) 142
OXC (NZ) Limited
(ii)
(99.1%) 142
Toomac Holdings Limited 137
Universal Specialities Limited (90%) 138
Norway
Art Trading AS 143
Culina AS 143
Enor AS 144
Riise & G G Storkjøkken AS 144
Sverre H Lageraaens Eftf AS 145
Peru
B2B Web Distribuicao De Produtos Peru Spa
S.A.C 146
Vicsa Safety Peru S.A.C. 146
Poland
Prewenta sp. z o.o. (65%) 147
Safety First PPE Group sp. z o.o. (65%) 148
Safety First sp. z o.o. (65%) 148
Puerto Rico
Melissa Sales Corp.
(ii)
149
Romania
Bunzl Romania SRL 150
Subsidiary undertakings Registered office address
Singapore
LSH Industrial Solutions Pte. Ltd 151
Medshop Holdings Pte. Ltd. (75.1%) 152
Medshop Singapore Pte. Ltd. (75.1%) 152
Slovakia
Eurobal, spol. s.r.o. 153
Spain
Artículos de Protección, S.A. 168
Azero Equipamientos, S.L.U. 161
Bunzl Distribution Spain, S.A.U. 158
Bunzl Mallorca 2018, S.L.U. 159
Dimasa Iberia, S.L.U. 166
Faru, S.L.U. 165
Grupo R Queraltó, S.A. (85%) 160
Iberotec Inversiones, S.L.U. 154
Irudek 2000, S.L. (75%) 167
Juba Personal Protective Equipment, S.L.U. 169
La Cartuja Suministros Hostelería, S.L. 156
Marca Proteccion Laboral, S.L.U. 163
PROIN-PINILLA, S.L. 155
PROTEC & MARTI, S.L. 162
Quirumed, S.L.U. 164
Safety Quickers Europe, S.L.U. 158
Tecnopacking, S.L.U. 157
Switzerland
Bunzl Holding Switzerland AG 171
CT Group International SA 173
Keenpac (Switzerland) SA 172
Weita AG 171
Weita Service AG 170
Turkey
Bursa Pazarı İnşaat Sanayi Ve Ticaret
AnonimŞirketi 174
İstanbul Ticaret Hırdavat Sanayi A.Ş. 175
İstanbul Ticaret İş Güvenliği ve Endüstriyel
Sanayi Ürünler A.Ş 176
Kullanatmarket Elektronik Pazarlama Ticaret
Anonim Şirketi 174
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Financial
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Additional
information
Bunzl plc
Annual Report 2023 203202
Bunzl plc
Annual Report 2023
Additional
information

SHAREHOLDER INFORMATION continued
Subsidiary undertakings Registered office address
United Kingdom
Abco Kovex (N.I.) Limited (90%) 178
Abco Kovex (UK) Limited (90%) 179
Aggora (Technical) Limited
(iii)
179
Aggora Group Ltd
(iii)
179
Aggora Limited 179
Aggora Projects Ltd
(iii)
179
B3S Healthcare Limited 179
B3S No.2 Limited 179
Bodyguard Workwear Limited 179
Bunzl American Holdings (No.1) Limited 179
Bunzl American Holdings (No.2) Limited 179
Bunzl Finance Public Limited Company
(i)
179
Bunzl Group Services Limited
(i)
179
Bunzl Holding GTL Limited
(i)
179
Bunzl Holding LCE Limited 179
Bunzl Holding WWE Limited
(iii)
(94.4%) 179
Bunzl Mexico Holdings 1 Limited 179
Bunzl Mexico Holdings 2 Limited 179
Bunzl Overseas Holdings (No. 2) Limited
(i)
179
Bunzl Overseas Holdings (No. 3) Limited
(ii)
179
Bunzl Overseas Holdings (No.4) Limited 179
Bunzl Overseas Holdings Limited
(ii)
179
Bunzl Pension Trustees Limited
(i)
179
Bunzl Plastics Limited
(i)
179
Bunzl Properties Limited
(i)
179
Bunzl UK Limited 179
Catered 4 Limited 179
Classic Bag Company Holdings Limited 179
Comax (UK) Limited 179
Continental Chef Supplies Limited 179
Deliver Net Holdings Limited 179
Deliver Net Limited 179
Dialene Limited 179
Enviropack Ltd
(iii)
(85%) 179
Eugene Harrington Marketing Limited 179
GH Pittman UK Limited 177
Subsidiary undertakings Registered office address
Guardsman Limited 179
Henares Limited
(i)
179
Howper 800 Limited
(iii)
179
Hydropac Limited 179
Kingsbury Packaging (Limavady) Ltd 178
Lee Brothers Bilston Limited 179
Lightning Packaging Supplies Limited 179
London Bio Packaging Limited 179
London Catering and Hygiene Solutions
Limited 179
McCue Corporation Limited (96.9%) 179
Packaging 2 Buy Limited 179
Parmelee Limited 179
Portabottle Limited 179
Portabrands Limited 179
Selectuser Limited
(ii)
179
Spectrum Hygiene Limited 179
The Classic Printed Bag Company Limited 179
The Porta Group Limited 179
Tornado Gloves Limited 179
Tornado Holdings Limited 179
Tri-Star Packaging Supplies Limited 179
Woodway Packaging Limited 179
Woodway UK Limited 179
Woodway UK South Limited
(iii)
179
Workwear Express Limited
(iii)
(94.4%) 179
Wycombe Marsh Paper Mills Limited
(i)
179
Yorse No. 1 Limited 179
Yorse No. 3 Limited
(i)
179
United States
ANB Distribution Holdings Inc. 189
Banner Stakes LLC (96.9%) 191
Bunzl Corporate Holdings, Inc. 189
Bunzl Distribution Inc. 189
Bunzl Distribution Leasing, Inc. 182
Bunzl Distribution USA, LLC 181
Bunzl Holdings Inc. 181
Subsidiary undertakings Registered office address
Bunzl International Services, Inc. 181
Bunzl IP Holdings, LLC 181
Bunzl Mexican Holdings II, LLC 189
Bunzl Mexican Holdings III, LLC 189
Bunzl Mexican Holdings IV, LLC 189
Bunzl Mexican Holdings, LLC 189
Bunzl North American Holdings, Inc. 181
Bunzl Retail Services, LLC 181
Bunzl USA Holdings LLC 181
Bunzl USA LLC 181
Chef’s Seal LLC 189
Cool-Pak, LLC 181
Destiny Packaging, LLC 181
Earthwise Bag Company, Inc. 184
Eco Systems Holdings LLC 189
FlexPost LLC 189
Foodhandler Inc. 187
Green Source, LLC 189
Hawthorn Hygiene Solutions LLC 189
Hi-Valu, LLC 189
Intergro, LLC 180
International Sourcing Company Inc.
(iii)
185
John Tillman Company 181
Liberty Glove & Safety, LLC 181
M.L. Kishigo Manufacturing Company, LLC 183
Masteragents LLC 189
McCue Corporation (96.9%) 188
McCue International, Inc. (96.9%) 188
MCQ Holdings, Inc.
(iii)
(96.9%) 183
MCR Holdings, Inc. 185
Monte Package Company, LLC 181
Premier Essential LLC 189
Prime Source, LLC 189
R3 Safety, LLC 189
Revco Industries, Inc.
(iii)
184
Right Choice Distribution, LLC 189
SAS Safety Corporation 181
Subsidiary undertakings Registered office address
SH Glove LLC 189
Shelby Group International, Inc.
(iii)
185
Steiner Industries, Inc. 190
STX LLC 184
The Warehouse Rack, LLC 181
U.S. Glove Co., Inc. 186
Uruguay
Steelpro Safety S.A. 192
Other shareholdings Registered office address
MCR Hanvo Safety Products (Nantong) Co.,
Ltd. (20%) 45
Viner-Pack Gyártó Kereskedelmi és
Szolgáltató Korlátolt Felelősségű Társaság
(iii)
(20%) 100
Classifications key
(i) Directly owned by Bunzl plc
(ii) Holding of ordinary and preference shares
(iii) Holding of more than one class of ordinary share
Related undertakings as at 31December 2023
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Directors’
report
Financial
statements
Additional
information
Bunzl plc
Annual Report 2023 205204
Bunzl plc
Annual Report 2023
Additional
information

Registered office address Key
Maipú 1300, piso 13, Ciudad de Buenos
Aires, Argentina 1
17 Millrose Drive, Malaga WA 6090, Australia 2
55 Sarah Andrews Close, Erskine Park NSW
2759, Australia 3
Bunzl Australia & New Zealand, Unit 1/52 Fox
Drive, Dandenong South VIC 3175, Australia 4
Level 2, 700 Springvale Road, Mulgrave VIC
3170, Australia 5
Unit 1, 52 Fox Drive, Dandenong South VIC
3175, Australia 6
Diepoldsauer Straße 37, 6845,
Hohenems, Austria 7
1 Rue du Bois des Hospices, 2émé étage,
7522 Tournai, Belgium 8
Aarschotsesteenweg 114 3012 Leuven
(Wilsele), Belgium 9
Oudenaardsesteenweg 19 9000
Ghent, Belgium 10
Port Atlantic House, Noorderlaan 147, bus 9,
2030 Antwerp, Belgium 11
Rue du Cerf 188/A 1332 Genval, Belgium 12
Av. Fagundes de Oliveira 538, Warehouse A5,
Piraporinha, Cidade de diadema, CEP, 09950-
300, Brazil 13
Av. Tenente José Eduardo, No. 35, Ano Bom,
Barra Mansa, Rio de Janeiro, 27323-24, Brazil 14
Avenida Centenário, No. 900, Bairrro
Pinheirinho, Criciuma, Santa Catarina,
88.804-000, Brazil 15
Avenida Fagundes de Oliveira, No. 538, galpão
A-01, A-02 e A-03, bairro da Piraporinha,
Diadema, São Paulo, 09950-300, Brazil 16
Avenida Francisco Silveira Bitencourt, 1369,
Pavilhão 27, Sala 01, 2° andar, bairro Sarandi,
Porto Alegre, Rio Grande do Sul, 91150-010,
Brazil 17
Avenida Robert Kennedy 675, Jardim Felix,
City of São Bernardo do Campo, São Paulo,
09895-030, Brazil 18
Registered office address Key
Avenida Roque Petroni Júnior, No. 850, Bloco
Bacaetava, Conjuntos 111, 112, 113, 114, 172,
bairro das Acácias, City of São Paulo, 04707-
000, Brazil 19
Avenida Roque Petroni Júnior, No. 850,
Edifício Bacaetava, conjunto 174, bairro
Jardim das Acácias, Sao Paulo, 04707-000,
Brazil 20
Estado de Santa Catarina, na Rua Fermino
Vieira Cordeiro, 380 – Shed 2 module B,
district of Espinheiros, City of Itajaí, State of
Santa, 88.317-200, Brazil 21
Estrada da Gávea, 696, rooms 409, 410,
411, 412 e 413, São Conrado, Rio de Janeiro,
22610-002, Brazil 22
Estrada Faustino Bizzetto, No. 101,
Warehouse 2, Sector A, City of Campo Limpo
Paulista, São Paulo, 13230-800, Brazil 23
Estrada Velha de Guarulhos São Miguel 5135,
Guarulho, São Paulo, CEP 07210-250, Brazil 24
Rua Dr. Guilherme Bannitz, No. 126, 2nd
floor, sets 21 and 22, District of Itaim Bibi, City
ofSão Paulo, State of São Paulo, 04532-060,
Brazil 25
Rua Marginal Emicol, S/N, Condomínio
Rua04, No. 90, 1st floor, Sala 01, lotes 15, 16
e ML 17, bairro Jardim Emicol, Itu, SãoPaulo,
13312-820, Brazil 26
Rua Padre Damaso 165, 173 e 187, Osasco,
São Paulo, CEP 06016-010, Brazil 27
Rua Paes Leme, No. 524, São Paulo,
05424-904, Brazil 28
Rua Pedra Lavrada, 74-A, Parque Cisper,
SaoPaulo, 03818-000, Brazil 29
Rua Salem Bechara, 140, 10th floor,
Centro, City of Osasco, Sao Paulo, CEP 06018-
180, Brazil 30
Via Expressa de Contagem, 3115, galpão 1,
Bairro Agua Branca, City of Contagem, Minas
Gerais, CEP 32370-485, Brazil 31
#310, 5700 Boul. Des Galeries, Québec G2K
0H5, Canada 32
1212 – 1175 Douglas St, Victoria,
BC V8W 2E1, Canada 33
Registered office address Key
160 Elgin Street, Suite 2600 , Ottawa, CA,
ON K1P 1C3, Canada 34
1801 Hollis St Ste 1800, Halifax
NS B3J 3N4, Canada 35
Dentons Canada LLP, 77 King Street West,
Suite 400 Toronto, Toronto
ON M5K 0A1, Canada 36
Dentons Canada LLP, 2500 Stantec Tower,
10220 – 130 Avenue NW, Edmonton AB T5J
0K4, Canada 37
MLT Aikins LLP, 30th Floor, 360 Main Street,
Winnipeg, Manitoba, R3C 4G1, Canada 38
Parlee McLaws LLP, 3300 TD Canada Trust
Tower, 421-7th Avenue, SW, Calgary
AB T2P 4K9, Canada 39
Av. Presidente Eduardo Frei Montalva 5151,
Conchalí, 8550678 Santiago, Chile 40
Avenida del Valle 765, of 101, Ciudad
Empresarial, Huechuraba, Santiago, Chile 41
Camino Coquimbo N’ 16.000, Colina,
Santiago, Chile 42
M05-02 Floor 11, Building 11, No. 1569, Yushu
Road, Songjiang District, Shanghai, China 43
No. 9 Fuqian Road, Shandong Zhuang Town,
Pinggu District, Beijing, China 44
No.128 Jinshajiang Road, Rudong Economic
Development Zone, Jiangsu, China 45
Room 1509, Building 2, No. 1266 Nanjing
West Road, Jingan District, Shanghai, China 46
Room 1805, Central Business Tower,
88 Fuhua 1st Road, Futian, Shenzhen
Guangdong, China 47
Room 3123, Building 3, 112-118 Gaoyi Road,
Baoshan District, Shanghai, China 48
Room 315 Lane 777, Guangfulin Road,
Songjiang District, Shanghai, China 49
Room 901, No. 595 West Lianqian Road,
Siming District, Xiamen, Fujian
Province, China 50
Room 908, Building 16, Zone 2, International
Chuangzhi Park, No.8 Gangkou Road,
Guicheng Street, Nanhai District, Foshan,
Guangdong, China 51
Registered office address Key
Room A39, Floor 6, Building 2, Dongfang
MAO Business Center, Xiacheng District,
Hangzhou, Zhejiang, China 52
Units 501A, 501B, 501C, 5th Floor, No. 4,
Lane 255, Dongyu Road, Pudong New Area,
Shanghai, China 53
Carrera 30 No. 15-30, Bogota D.C., Colombia 54
CR 71 No 94 – 23 AP, 1134 TO 9, Colombia 55
Km 7 Vía Medellín, Parque Empresarial Celta,
Módulo 1, Bodega 49, Funza (Cundinamarca),
Colombia 56
Dolnokrčská 1966/54, Praha 4, 140 00,
Czech Republic 57
Přátelstvi 1011/17, Uhřiněves, Praha 10,
10 400, Czech Republic 58
Veselská 1935, Strážnice, 696 62, Czech
Republic 59
Greve Main 30, 2670 Greve, Denmark 60
Indkildevej 2 c, DK-9210, Aalborg SØ, Denmark 61
Kærvej 25, DK-2970 Hørsholm, Denmark 62
Kirkebjergvej 17, 4180 Sorø, Denmark 63
Satellitvej 7, 8700, Horsens, Denmark 64
11 C rue des Aulnes, 69410 Champagne-
au-Mont-d’or, France 65
13 rue des Battants RN 20, 31140,
Saint-Alban, France 66
130-136 rue Victor Hugo, 92300
Levallois-Perret, France 67
14 rue Lavoisier, 21 700 Nuits
Saint Georges, France 68
17 Boulevard du Trieux, Zone
d’aménagement Concerté les touches, 35740,
Pacé, France 69
191-195 Avenue Charles de Gaulle, 92200
Neuilly-sur-Seine, Paris, France 70
440 route de Rosporden, Le Grand Guelen,
29000 Quimper, France 71
50 Avenue d’Allemagne, Rond Point de
L’Europe ZA Albasud, 82000
Montauban, France 72
530 rue Jacqueline Auriol ZA de Saint Thudon,
29490, Guipavas, France 73
585, Rue Alain Colas, 29200, Brest, France 74
List of registered office addresses
Strategic
report
Directors’
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statements
Additional
information
Bunzl plc
Annual Report 2023 205204
Bunzl plc
Annual Report 2023
Additional
information

Registered office address Key
7 route de Villiers, 77780, Bourron-
Marlotte, France 75
725 Route des Vernes Pringy, 74370,
Annecy, France 76
840 Rue de la Ferme de Carboué, 40000,
Mont-de-Marsan, France 77
Boulevard Francois-Xavier Faffeur, Zone
Industrielle Lannolier, 11000,
Carcassonne, France 78
La Fregate, 19 avenue Jacques Cartier, 44800,
Saint-Herblain, France 79
Lieudit la Trentaine, 77690,
La Genevraye, France 80
Route Nationale 97, ZA Les Plantades, 83130
La Garde, France 81
Route Nationale, 57420, Louvigny, France 82
Rue Nungesser et Coli, D2a Nantes
Atlantique, 44860, Saint-Aignan de Grand
Lieu, France 83
Rue Pierre Pascal Fauvelle, 66000
Perpignan, France 84
Rue Réaumur, départementale 939, PA du
Jardin, 28000, Chartres, France 85
Zone Artisanale Maritime du Bassin de
Thau, Route de Sète, 34540 Balaruc-les-
Bains, France 86
Elbestraße 1-3, 45768 Marl, Germany 87
Friedrichstrasse 2, 40699 Erkrath, Germany 88
Kitzingstr. 15-19, 12277, Berlin, Germany 89
Magirus-Deutz-Straße 14, 89077,
Ulm, Germany 90
Maysweg 11, 47918 Tönisvorst, Germany 91
Otto-Diehls-Straße 13-17, 48291
Telgte, Germany 93
Stadtweide 17, 46446 Emmerich, Germany 94
Theodor-Heuss-Strasse 3, Leipheim,
D-89340, Germany 95
11th Floor, One Pacific Place, 88 Queensway,
Hong Kong 96
Room 2103, Futura Plaza, 111 How Ming
Street, Kwun Tong, Hong Kong 97
Registered office address Key
Unit 26, 22/F, Metro Centre II, Lam Hing St.,
Kowloon Bay, Kowloon, Hong Kong 98
Unit 3-4 18F Tower 6, China Hong Kong City,
Tsim Sha Tsui, Kowloon, Hong Kong 99
2336 Dunavarsány, 071/33 hrsz, Hungary 100
Vendel Park, Erdőalja út 3, 2051
Biatorbágy, Hungary 101
10 Earlsfort Terrace, Dublin 2, D02
T380, Ireland 102
B2 Athy Business Campus, Athy,
Kildare, Ireland 103
4 Kinneret Street, POB 1139, Airport City,
Ben Gurion Airport, 7019802, Israel 104
Emek Ha’Ela 250, Modi’in, P.O.B 553, LOD
7110601, Israel 105
Corsa Italia n.6, 50123 Florence, Italy 106
Via 8 Marzo n. 6, 42025 Corte Tegge di
Cavriago, Reggio Emilia, Italy 107
Via Brigata Reggio no. 24, Reggio Emilia, Italy 108
Via dell’Euro, 69/71, Barletta (BT), Italy 109
8.03, 8th Floor Plaza First Nationwide 161,
Jalan Tun H.S. Lee 50000
Kuala Lumpur, Malaysia 110
Av. del sauce número 1600, Col. La angostura,
City of San Luis Potosí, S.L.P, 78117, Mexico 111
Avenida Cafetales No. 1702, Interior 201,
between streets Rancho Recoveco and
Rancho Estopila, Hacienda de Coyoacán,
Coyoacán, 04970, Mexico 112
Calle Rio San Lorenzo No. 503, Col. Fuentes
del Valle, CP 6620, CD San Pedro Garza
Garcia, Nuevo León, Mexico 113
Carretera al CUCBA No. 400 Interior 5,
Colonia La Venta del Astillero, C.P. 45221
Zapopan, Jalisco, Mexico 114
Carretera Corredor Tijuana Rosarito 2000
Exterior 15202., Interior Mt3 A, Colonia Zona
Cerril General, Tijuana, Baja California, Mexico 115
Carretera Miguel Alemán KM21 Edificio 4C
Prologis Park, Apodaca, N.L., México C.P,
66627, Mexico 116
Registered office address Key
Galileo # 11, Colonia Polanco V Secc.,
Delagación Miguel Hidalgo, 11560, Ciudad de
México, Mexico 117
Lot 1 of Block 5 of Parque Industrial Tecate,
Tecate, Baja California, Mexico 118
Nicaragua 205, Arbide, León, Guanajuato,
37360, Mexico 119
Pablo A. Gonzalez Garza Pte., 820,
Chepevera, Monterrey, Nuevo León, 64030,
Mexico 120
Rio San Lorenzo No. 503 Local I, Col. Fuentes
Del Valle, San Pedro Garza Garcia, C.P. 66220,
Mexico 121
C/O CAE, ILOT 43B Bureau 9/18, Zone Franche
d’Exportation, 90000 Tanger, Morocco 122
Bijsterhuizen 3005C, 6604 LP
Wijchen, Netherlands 123
Delta 57, 6825 ML Arnhem, Netherlands 124
Ekkersrijt 3102A, 5692CC, Son en Breugel,
Netherlands 125
Grotewei 2, 4004 LW Tiel, Netherlands 126
Industrieweg 11B, 1566JN, Assendelft,
Netherlands 127
Jan Campertlaan 6, 3201AX, Spijkenisse,
Netherlands 128
Keizersgracht 241, 1016EA, Amsterdam,
Netherlands 129
Koivistokade 80, 1013 BB, Amsterdam,
Netherlands 130
Kraaiendonk 46, 5428 NZ Venhorst,
Netherlands 131
Maxwellstraat 49, 6716 BX Ede, Netherlands 132
Portugallaan 3, 9403DR, Assen, Netherlands 133
Rondebeltweg 82, 1329 BG Almere,
Netherlands 134
Hagenaar 3, 3961 NP Wijk bij Duurstede,
Netherlands 135
109 Carlton Gore Road, Newmarket,
Auckland, 1023, New Zealand 136
32D Poland Road, Wairau Valley, Auckland,
0627, New Zealand 137
Registered office address Key
494 Rosebank Road, Avondale,
Auckland, 1026, New Zealand 138
686 Rosebank Road, Avondale,
Auckland, 1026, New Zealand 139
97 Sawyers Arm Road, Christchurch,
8052, New Zealand 140
KPMG Level 5, 79 Cashel Street, Christchurch,
8140, New Zealand 141
Level 3, 109 Carlton Gore Road, Newmarket,
Auckland, 1023, New Zealand 142
c/o Enor AS, Holmaveien 20, 1339
Vøyenenga, Norway 143
Holmaveien 20, 1339 Vøyenenga, Norway 144
Nordbyveien 23A, 3038 Drammen, Norway 145
Av. Santa Rosa 350. Ate., Lima, Peru 146
Gliwaka, no. 136, Mikolow, 43-190 147
Starowiejska, no. 2, Czechowice-Dziedzice,
43-502, Poland 148
PO Box 6494, PR 00914-6494, San Juan,
Puerto Rico 149
Sat Dragomiresti-Deal, Comuna
Dragomiresti-Vale, DE 287/1, Bucharest West
Logistic Park, Cladirea C, Unitatea C01, Ilfov,
Romania 150
1 Penjuru Close, 608617, Singapore 151
190 Middle Road #16-01, Fortune Centre,
188979, Singapore 152
Jilemnickeho 1012/14, Pezinok,
902 01, Slovakia 153
Avenida Blas Infante 6, Edificio Urbis, Planta
10, Puerta A, Módulo 3, Sevilla, 41011, Spain 154
Calle Ana Abarca de Bolea 22, Nave A,
polígono industrial El Pilar, Zaragoza, Spain 155
Calle Carnissers, 2, Poligono Industrial Cim
El Camp, Carretera Reus-Tarragona, Reus
(Tarragona), 43204, Spain 156
Calle Castilla-León, Parcela 45 Onda, 12200,
Castellón, Spain 157
Calle Filats 8, Polg. Industrial Prologis Park,
08830 Sant Boi de Llobregat,
Barcelona, Spain 158
SHAREHOLDER INFORMATION continued
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Additional
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Bunzl plc
Annual Report 2023 207206
Bunzl plc
Annual Report 2023
Additional
information

Registered office address Key
Calle las Palmeras 7, Polígono Industrial La
Sendeilla, 28350 Ciempozuelos, Spain 159
Calle Pino Albar, number 24, P.I. El Pino,
Seville, C.P. 41016, Spain 160
Calle Rosario 22, Villamartín, Cádiz, 11650,
Spain 161
Carretera de Madrid Km 314 – Nave 3ª,
polígono industrial Jesús Vicente,
Zaragoza, Spain 162
Cartagena, Murcia, poligono industrial
Cabezo Beaza, Avenida Bruselas,
30353, esquina calle Amsterdam,
parcela R 100, Spain 163
Corretger No 115-117-119, Parque
Empresarial Táctica, Paterna, 46980, Valencia,
Spain 164
Edificio Plaza, Nave 5, Ali-4 Plataforma
Logistica de Zaragoza, 50197,
Zaragoza, Spain 165
Parque Tecnológico, Avenida del Desarrollo
Tecnológico 17, Guadalcacín, Cádiz, Spain 166
Polig. Erribera Industria Gunea, 8-A, Aduna
(Gipuzkoa), Spain 167
Rosalia de Castro, 5, As Pontes de García
Rodríguez, A Coruña, Spain 168
Santo Domingo De La Calzada, La Rioja,
26250, Carretera De Logrono, Spain 169
Güterstrasse, 4313 Möhlin, Switzerland 170
Nordring 2, 4147 Aesch, Switzerland 171
Route des Jeunes 5D, c/o Télios SA, 1227 Les
Acacias, Genève, Switzerland 172
Rue Pierre-Yerly 10, 1762, Givisiez,
Switzerland 173
Akçaburgaz Mahallesi, 3137. Sokak, No.19,
Esenyurt, Istanbul, Turkey 174
Arapcami Mah, Tersane Cad, No. 115,
Beyoğlu, Istanbul, Turkey 175
Barbaros Mah., Begonya Sk., Nidakule Kuzey
Ataşehir Apt., No:3/157, Ataşehir, İstanbul,
Turkey 176
71-75 Shelton Street, Covent Garden, London,
WC2H 9JQ, United Kingdom 177
Registered office address Key
Arthur Cox, Victoria House, 15-17 Gloucester
Street, Belfast, BT1 4LS, United Kingdom 178
York House, 45 Seymour Street, London, W1H
7JT, United Kingdom 179
2915 SR 590, Suite 15, Clearwater FL 33759,
United States 180
Corporation Service Company, 100 Shockoe
Slip, 2nd Floor, Richmond VA 23219,
United States 181
Corporation Service Company, 2345 Rice
Street, Suite 230, Roseville MN 55113, United
States 182
Corporation Service Company, 251 Little Falls
Drive, Wilmington DE 19808, United States 183
Corporation Service Company, 2710 Gateway
Oaks Drive, Suite 150N, Sacramento CA
95833-3505, United States 184
Corporation Service Company, 2908 Poston
Avenue, Nashville TN 37203-1312,
United States 185
Corporation Service Company,
300 Deschutes Way SW, Suite 304, Turnwater
WA 98501, United States 186
Corporation Service Company,
80 State Street, Albany NY 12207-2543,
United States 187
Corporation Service Company, 84 State
Street, Boston MA 02109, United States 188
CSC-Lawyers Incorporating Service Company,
221 Bolivar Street, Jefferson City MO 65101,
United States 189
Illinois Corporation Service Company,
801 Adlai Stevenson Drive, Springfield IL
62703-4261, United States 190
The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington,
New Castle County DE 19801, United States 191
César Cortinas 2037, Montevideo, Uruguay 192
Financial calendar
2024
Annual General Meeting 24 April
Results for the half year to
30 June 2024 27 August
2025
Results for the year to
31December 2024 February
Annual Report circulated March
Dividend payments are normally made on the
second working day of the following months:
Ordinary shares (final) July
Ordinary shares (interim) January
Analysis of ordinary shareholders
At 31 December 2023 the Company had 4,351
(2022: 4,559) registered shareholders who held
338.0 million (2022: 337.7 million) ordinary shares
between them, analysed as follows:
Size of holding
Number of
shareholders
% of issued
share capital
0 – 10,000 3,682 1
10,001 – 100,000 394 4
100,001 – 500,000 190 13
500,001 – 1,000,000 43 9
1,000,001 and over 42 72
4,351 100
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone +44 (0) 370 889 3257
Email webqueries@computershare.co.uk
Website www.computershare.com
Investor Centre
Shareholders can manage their shareholding
online at www.investorcentre.co.uk. The Investor
Centre is our registrar’s easy to use website,
available 24 hours a day, seven days a week,
where the following services are available:
• elect for electronic communications;
• change of address;
• view share balance information;
• join the dividend reinvestment plan; and
• view dividend payment and tax information.
In order to register for the Investor Centre,
shareholders will need their shareholder
reference number which can be found on either
their share certificate or dividend confirmations.
Dividend payment by BACS
Shareholders can have their dividends paid
directly into their bank or building society account
using the Bankers’ Automated Clearing Service
(‘BACS’). This means that dividends will be in the
account on the same day the dividend payment
ismade. To use this method of payment please
contact our registrar on +44 (0) 370 889 3257
orvisit the Investor Centre website. Please note
that this option will not override any existing
dividend scheme mandate, which would need
tobe revoked in writing. Shareholders who have
elected to have their dividends paid by BACS and
who have registered a valid email address with
the registrar will be able to access their dividend
confirmations electronically at www.
investorcentre.co.uk. If no such email address has
been registered, shareholders will receive their
dividend confirmations by post.
Strategic
report
Directors’
report
Financial
statements
Additional
information
Bunzl plc
Annual Report 2023 207206
Bunzl plc
Annual Report 2023
Additional
information

Dividend reinvestment plan
The Company operates a dividend reinvestment
plan which allows shareholders in eligible
countries to use the whole of their cash dividend
to buy additional shares in the Company, thereby
increasing their shareholding.
Shareholders can check their eligibility in the
terms and conditions and apply to join the
planonline in the Investor Centre or can contact
the Company’s registrar to request the terms
andconditions of the plan and a printed
mandateform.
American Depositary Receipts
The Company has a sponsored Level 1 American
Depositary Receipt programme that trades on the
over-the-counter market in the US with ticker BZLFY.
Citibank N.A. acts as the Depositary Bank.
Telephone Citibank +1 781 575 4555
Email citibank@shareholders-online.com
Website www.citi.com/dr
International payment option
Shareholders may if they wish have their dividend
payments paid directly into their bank account in
certain foreign currencies. Please contact the
Company’s registrar on +44 (0) 370 889 3257 to
request further information about the currencies
for which this service is available.
Share dealing
Bunzl plc shares can be traded through most
banks and stockbrokers. The Company’s registrar
also offers an internet and postal dealing service.
Further details can be found at www-uk.
computershare.com/Investor/#ShareDealingInfo
or by telephoning +44 (0) 370 889 3257.
ShareGift
Sometimes shareholders have only a small
holding of shares which may be uneconomical
tosell. Shareholders who wish to donate these
shares to charity can do so through ShareGift,
anindependent charity share donation scheme
(registered charity no. 1052686). Further
information about ShareGift may be obtained
from ShareGift on +44 (0) 20 7930 3737 or at
www.sharegift.org.
Shareholder security
Shareholders are advised to be cautious about
any unsolicited financial advice, offers to buy
shares at a discount or offers of free company
reports. More detailed information about this can
be found at www.fca.org.uk in the Consumers
section and at www.fca.org.uk/scamsmart. Details
of any share dealing facilities that the Company
endorses will be included in Company mailings.
Independent auditors
PricewaterhouseCoopers LLP
Corporate brokers
J.P. Morgan Cazenove
UBS
Company Secretary
Suzanne Jefferies
Registered office
York House
45 Seymour Street
London W1H 7JT
Telephone +44 (0) 20 7725 5000
Website www.bunzl.com
Registered in England no. 358948
Forward-looking statements
The Annual Report contains certain statements
about the future outlook for the Group. Although
the Company believes that the expectations are
based on reasonable assumptions, any
statements about future outlook may be
influenced by factors that could cause actual
outcomes and results to be materially different.
SHAREHOLDER INFORMATION continued
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Directors’
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Bunzl plc
Annual Report 2023 209208
Bunzl plc
Annual Report 2023
Additional
information

SASB REPORTING FOR BUNZL’S SUSTAINABILITY METRICS
The Sustainability Accounting Standards Board (‘SASB’) has industry-specific sustainability standards
which identify material topics and associated metrics. The table below summarises where relevant
SASB disclosures can be found throughout Bunzl’s annual reporting. This is based on several standards
from the materiality map as Bunzl does not fall within one clear sector. We have based our disclosure
on the most relevant standards for the business that align to and cover the key sustainability themes
arising from our recent materiality assessment. All of the data provided below is from 2023 unless
otherwise stated.
SASB Metric Bunzl Disclosures
Product lifecycle management
Revenue from products
that are reusable,
recyclable, and/or
compostable
In 2023, £2.2bn revenue was generated from packaging and products
made from materials that are recyclable, compostable, reusable or
made from renewable sources.
Discussion of
strategiesto reduce
theenvironmental
impact of packaging
throughout its lifecycle
We have discussed how we work with our suppliers and customers to
reduce the environmental impact of packaging and products in both
our Annual Report and Insight Series presentations.
Pages 56 to 57.
CE Insights series pages 23 to 24.
BNA Insights series pages 13 to 18.
Greenhouse Gas Emissions
Gross global Scope 1
emissions
Discussion of long term
and short term strategy
or plan to manage
Scope 1 emissions,
emissions reduction
targets, and an analysis
of performance against
those targets
89,806 tonnes of CO
2
e
Our climate change/carbon strategy has been detailed in the
sustainability section of our Annual Report on pages 48 to 55.
A comprehensive view into how we understand, assess and manage the
risks and opportunities associated with climate change can be found in
our TCFD index and associated reporting. Pages 48 to 55.
Our integrated process for identifying and assessing risks is detailed in
the strategic report section of our Annual Report on pages 68 to 76.
Our carbon reduction targets can be found on pages 48 to 49 of our
Annual Report with our performance shown on pages 52 to 53.
The targets are (baseline year: 2019):
• Scope 1 & 2 – 50% more carbon efficient (equivalent to a 27.5%
absolute reduction by 2030)*
• Scope 3 – 79% of suppliers by emissions will have science-based
targets by 2027*
• Scope 1, 2 & 3 – 90% absolute reduction in emissions by 2050
• Net zero emissions by 2050 at the latest
We have committed to the Business Ambition for 1.5⁰C initiative & Race
to Zero campaign. We have submitted our Net Zero plan to the SBTi for
approval in 2023.
* These targets have been approved by the Science-Based Targets Initiative (SBTi).
SASB Metric Bunzl Disclosures
Greenhouse Gas Emissions
(1) Total fuel consumed,
(2) percentage natural
gas, (3) percentage
renewable
(1) Total fuel consumed: 1,442,669 GJ
(2) percentage natural gas: 24%
(3) percentage renewable fuel:1.3%
(1) Operational energy
consumed, (2)
percentage grid
electricity, (3)
percentage renewable
(1) Operational energy consumed: 1,776,617 GJ
(2) percentage grid electricity: 18%
(3) percentage renewable: 5.7% (total energy), 25% (total electricity)
Labour conditions in the supply chain
Percentage of (1) Tier 1
supplier facilities and (2)
supplier facilities
beyond Tier 1 that have
been audited to a
labour code of conduct,
(3) percentage of total
audits conducted by a
third-party auditor
Our auditing process is our first line of defence to prevent defective
products being shipped and to ensure products comply with our ethical
standards.
(1) Tier 1 suppliers: All products supplied directly from Asia are through
suppliers that are verified by our Global Supply Chain Solutions team
and our audits typically cover c.98% of Bunzl spend across 13 Asian
countries every two years. We will take a proactive, risk-based
approach to responsible sourcing, identifying common issues in our
supply chain and working closely with suppliers to reduce the future
incidences of these. The spend coverage above (representing c.15%
of our global supply chain) relates to our suppliers based in regions
identified as very high risk in international rankings of human rights
issues (e.g. Global Slavery Index).
(2) Tier 2 suppliers: None audited as we are taking a risk based
approach to working through our supply chain with our programme
(and focusing on Tier 1 as a priority). Our audits and Supplier Code of
Conduct demand that our Tier 1 suppliers ensure that the Code is
maintained and enforced within their own supply chains, including
by any sub-contractors used in executing any orders received from
our Company.
(3) Percentage of total audits conducted by a third-party auditor: 16%.
For more information see:
Pages 58 to 59
Bunzl Supplier Code of Conduct
Bunzl Modern Slavery Statement
Strategic
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Directors’
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Financial
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Additional
information
Bunzl plc
Annual Report 2023 209208
Bunzl plc
Annual Report 2023
Additional
information

SASB Metric Bunzl Disclosures
Labour conditions in the supply chain
Priority non-
conformance rate and
associated corrective
action rate for
suppliers’ labour code
of conduct audits
During 2023, our Global Supply Chain Solutions team audited 1,022
suppliers:
• 956 had no critical issues (c.94% suppliers audited).
• 66 underwent remediation efforts to bring them up to the required
standard (c.6% suppliers audited).
• Following these remediation efforts, we terminated relationships with
10 suppliers who failed to make enough progress (c.1% of suppliers
audited, c.15% of suppliers requiring remediation).
• Corrective action rate for suppliers requiring remediation: c.85%.
Description of the
greatest (1) labour and
(2) environmental,
health, and safety risks
in the supply chain
Our Global Supply Chain Solutions team have identified the following
risks:
(1) Labour:
• Child Labour.
• Forced Labour (Modern Slavery) – including the use of recruitment
fees.
• Unfair discrimination.
• Wages not meeting local legal minimum requirements.
• Continuous work for more than 30 consecutive days without at
least one day’s rest.
(2) Environmental, health and safety risks:
• Whether the supplier has an Environmental Policy and an
appointed business owner.
• Are evacuation routes and safety exits kept clear and unblocked,
and is firefighting equipment easy to access.
• Whether the dormitory is located in a building separate from the
workshops and warehouses.
• Are the production/warehouse buildings structurally safe.
SASB Metric Bunzl Disclosures
Workforce diversity and inclusion
Percentage of gender
and racial/ethnic group
representation for (1)
management and (2) all
other employees
We monitor the percentage of our workforce by gender and have total
workforce of c.24,500 employees, 62% of them are male and 38% are
female. In our senior management population (c. 500 leaders) there are
22% females and 78% males.
We cannot monitor ethnicity of our total workforce or senior
management population due to restrictions on capturing data in certain
countries in which we operate.
Total amount of
monetary losses as a
result of legal
proceedings associated
with employment
discrimination
No compensation costs were paid in 2023.
Voluntary and
involuntary turnover
rates for employees
Voluntary turnover was 15.3%.
SASB REPORTING FOR BUNZL’S SUSTAINABILITY METRICS continued
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ESG APPENDIX
Double materiality methodology 211
Packaging categories 212
Climate change scenarios 213
Evaluating the potential climate change impactson our business 213
Climate change risks and opportunities 214
Emissions reporting and environmental performance 215
Health & safety 217
External assurance 217
Supply chain risk assessment 218
Code of conduct 219
Employees 219
Charitable contributions 220
Double materiality methodology
1. Defining the boundaries and businesscontext
Bunzl’s operations connect our distributed, flexible supply chain with customers across multiple
industries including retail, foodservice, grocery, construction and healthcare. As a result our double
materiality assessment has considered the ESG impacts present across the entire value chain with
appropriate consideration given to impacted stakeholders at each stage.
It is not only our value chain that is complex and dynamic, but so are the solutions we source and
supply. The goods we provide to our customers cover a wide range of target sectors, product types and
materials. Our assessment has recognised that these different products and materials have different
associated sustainability impacts, risks and opportunities as shown in the table below.
ESG issues relating to
PPE, medical equipment
and workwear
• Connected with ESG topics such as biodiversity and ecosystems
and workers in the value chain.
• Positive ESG impacts and opportunities such as increasing access
to healthcare and user health & safety.
Furthermore, our assessment has been designed to consider the impacts, risks and opportunities that
might relate to the individual geographies and/or market sectors in which we operate. These impacts
are not always material when aggregated at a central level but we have given some examples of
regional and market specific issues that were of interest to our stakeholders on page 46.
2. Identification of potentially material topics, impacts, risks and opportunities
We used the ESRS list of sustainability topics, sub-topics and sub-sub-topics as a starting point for our
double materiality assessment. This list was supplemented with information from other resources
including: our previous materiality assessment, SASB reporting standards, legal requirements in our
markets, widely accepted sector-specific best practice and peer benchmarking.
The desktop research was then reviewed by a cross-functional senior team and resulted in a list of:
• potentially material impacts where Bunzl’s business activities and relationships could potentially
affect people and the environment, and;
• risks and opportunities that could have a negative or positive financial impact on Bunzl.
3. Engagement with relevant stakeholders
During the assessment we sought insights on the potentially material impacts, risks and opportunities
from different stakeholders across our value chain, including our largest suppliers of key commodities
(e.g. paper & pulp, plastics and chemicals), customers from across all of our business areas, key
investors and other stakeholders such as members of the Bunzl team and relevant charities.
Identify
stakeholders
Assign
relevant
topics
Tailor
questions to
each
stakeholder
Invite
stakeholders
to participate
Review
responses and
follow up
STAKEHOLDER ENGAGEMENT PROCESS
We assigned relevant sustainability topics to each stakeholder group and to ensure we received the
best quality responses, tailored the questions to each stakeholder to match those who were
expectedto be impacted by a sustainability issue or were in a position to provide unique insight on a
particular topic.
This ‘tailoring’ was based on the business relationship with Bunzl (different stakeholders would
contribute different insights depending on their position in the supply chain) and the stakeholders
business activities (for example a plastic packaging supplier may not be able to comment authentically
on the sustainability issues relating to paper and pulp raw material sourcing).
4. Determining materiality using a defined scoring methodology and thresholds
We have used a quantitative approach to determine whether an impact, risk or opportunity is material
for Bunzl. We developed a scoring criteria, aligned to Bunzl’s risk assessment process, that was used by
our stakeholders to analyse the lists of impacts, risks and opportunities to establish whether they were
material or not.
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ESG APPENDIX continued
Materiality has been assessed by using the following key factors:
Financial effects Likelihood Severity
Assessment based on following factors:Potential magnitude
of risks/opportunities
in the short, medium
and long term
Chance of occurrence
(risks, opportunities
and potential impacts)
Scale
How grave
orhow
beneficial is
the impact?
Scope
How
widespread
is the
impact?
Irremediable
character
Limits to
ability to
restore to
previous state
(negative
impacts only)
Impact materiality
Financial materiality
Impact materiality has been assessed based on two factors: severity and likelihood. Severity can be
considered as a combination of the factors of scale (how grave or beneficial an impact is), scope (how
widespread an impact is), and its irremediable character (how difficult it is to undo negative changes).
Financial materiality has been assessed by using two factors; potential magnitude of financial effects
and likelihood. The scoring and thresholds relating to financial materiality have been aligned with the
Bunzl risk assessment process and methodology.
Packaging categories
• Packaging refers to packaging and other products within the foodservice, grocery and retail sectors
which are facing legislation or consumer pressure.
• We have exercised our judgement to allocate sales to the packaging and non-packaging categories
asexplained in the table to the right.
• In future years packaging and products may move between categories and/or may be added or
removed (for example, as legislation changes, recyclability improves or if a new line of products
islaunched).
• We review the categorisation of our products and packaging on a quarterly basis as part of our
internal controls process and have made one change this year. Food containers made from other
types of plastic (e.g. PS) that are not covered by other reporting categories have been moved from
category 3 to category 2. These products serve a functional purpose and we are seeing customers
transition away from these products to alternatives on a like-for-like basis. As such we have
positioned these sales in ‘Consumable plastics likely to transition’.
Category detail and
name applied by Bunzl Description
Example products
in category
Category detail:
Single-use plastic
products facing
restriction
Bunzl name:
Consumable plastics
facing regulation
1 The single-use plastic products most
commonly facing restriction – i.e.
outright bans or complete restriction on
placing into the market within the
majority of the countries in which we
operate – this is the category where we
expect to see some volume reduction
and transition may not happen on a
like-for-like basis.
We have expanded these specific
regulations to all Business Areas where
such products are sold. This is to
provide consistency, as it can be
reasonably expected that legislation will
follow to those areas where it does not
currently apply.
Including but not
limitedto:
Plastic cutlery
Plastic plates, bowls,
platters, and lids
Category detail:
Single-use plastic
products facing
regulation (not outright
restriction)
Bunzl name:
Consumable plastics
likely to transition
2 Single-use plastic products that have
existing measures in place (either
legislative in countries we operate or
voluntarily by some brands/businesses
we sell to) to control their usage.
As the use of these products across our
Group is not completely restricted (i.e.
there are no consistent bans as with
category 1) and the products
themselves serve a functional purpose,
customers typically transition away from
these products to alternatives on a
like-for-like basis (including reusable
options).
We have expanded these specific
regulations to all Business Areas where
such products are sold to provide
consistency.
Including but not
limitedto:
Single-use plastic cups
Paper cups and soup
containers with plastic
lining
Lightweight plastic carrier
bags
EPS food containers
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Category detail and
name applied by Bunzl Description
Example products
in category
Category detail:
Single-use plastic
products where plastic
is an appropriate
material for the job,
where alternatives are
not commercially
available or where
substitution could
cause unintended
environmental
consequences
Bunzl name:
Packaging and products
with an important
purpose
3 Single-use plastic products where
plastic is an appropriate material for the
job from a functional perspective, where
alternatives do not currently exist at
scale or where unmitigated, careless
substitution of plastic could lead to
significant negative, unintended
consequences such as higher carbon
emissions, water use and food waste.
Including but not
limitedto:
Plastic food containers
Plastic pouches, packets,
and wrappers
Baking paper and
parchment
Category detail:
Recyclable, reusable,
compostable products,
and those made from
renewable resources
Bunzl name:
Packaging and products
made from alternative
materials
4 These represent the alternative
solutions our customers typically
transition their single-use packaging and
products to.
These are products that are typically
recyclable or compostable, made from a
renewable resource, for example palm
leaf or sugar cane, plastic products
containing a proportion of recycled
content (where these products are also
recyclable) and reusable products such
as ‘bags for life’ or refillable coffee cups
that are products specifically designed
to be used more than once. National
guidance (where it exists) has been used
to determine the recyclability of a
product.
Due to the huge variation in recycling
provisions globally we have expanded
these criteria to all Business Areas
where such products are sold to provide
consistency.
Including but not
limitedto:
PET and rPET food
containers
Cardboard or paperboard
containers
Compostable plastic cups
Reusable cups
Alternative materials
cutlery
Alternative materials
plates, bowls, platters, and
lids
Paper bags
Reusable carrier bags
Climate change scenarios
Our climate change scenarios align with the environmental and economic conditions represented in the
Network for Greening the Financial System (‘NGFS’) scenario framework. This framework was used as
the basis for the Bank of England’s 2021 Biennial Exploratory Scenario on climate risks and is based on
the following assumptions:
Scenario 1 – ‘Orderly’
This reflects Net Zero 2050 commitments from COP26 which limit global warming to 1.5°C through
stringent climate policies and innovation and assumes those jurisdictions which have committed to Net
Zero (including US, EU, UK, Canada, Australia and Japan) will achieve those goals. This scenario assumes
climate policies are introduced early and become gradually more stringent and that physical and
transition risks increase gradually. Carbon prices increase steadily in key Bunzl countries and the use
ofinternal combustion engine ‘ICE’ vehicles will be limited by regulations and market pressures. Physical
and transition risks are both relatively low, however carbon prices are initially higher than the Disorderly
scenario in order to encourage an earlier curbing of emissions. Customers may also increasingly
express their preferences relating to the type of transportation used by Bunzl to deliver their products.
Scenario 2 – ‘Disorderly’
This scenario assumes a lack of coordinated response to climate change and therefore emissions
reductions are limited until 2030. Climate policies are delayed or divergent across countries and since
actions are taken relatively late and are limited by available technologies, emissions reductions need
tobe greater than in the Orderly scenario to limit warming to below 2°C. The result is higher transition
risks and higher carbon prices.
Scenario 3 – ‘Hothouse world’
The final scenario assumes that Governments fail to introduce the policies needed to address climate
change beyond those that are already in place. Climate policies are implemented in some jurisdictions,
but global efforts are insufficient to halt significant global warming. Global average carbon prices
remain low and emissions grow until 2080 leading to +3°C of warming with severe physical risks and
irreversible global impacts.
Evaluating potential impacts of climate change on our business
The Group has considered three possible outcomes (best, medium, worst) across our key potential
climate-related business impacts, under the three climate scenarios. We have assessed the impacts
ona short term (to 2025) mid term (to 2030) and long term (to 2050) basis.
Shifting customer expectations
The timing of the emissions reductions required varies significantly between the Orderly, Disorderly
and Hothouse scenarios. Many customers have committed to dramatically reduce carbon emissions
by2050 (with some committing to net zero) and they expect suppliers such as Bunzl to contribute to
achieving these targets. Bunzl has already established a science-based reduction target in line with
anOrderly scenario and will assess on an ongoing basis whether this emissions trajectory continues
tomeet customers’ ambitions.
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ESG APPENDIX continued
Environmental impacts of technology
Whilst the transition to electric and plug-in hybrid vehicles has begun, the pace and breadth of change
will depend upon the climate scenarios above. Bunzl is aware of relevant current trends including the
deployment of electric (‘EV’) and plug-in hybrid electric vehicles (‘PHEV’), the energy density and range
limitations of batteries for long haul trucks and the likely future cost of biofuels, which represent an
important transition fuel. We considered whether a rapid increase in carbon pricing after 2030 in the
Disorderly scenario could leave Bunzl with stranded assets, if trucks were to become uneconomical
torun. Consideration of the environment in which we may operate under each of the climate scenarios
above has led us to conclude that Bunzl will implement a fleet strategy that ensures a timely transition
to alternative fuels at a cost that is comparable to the current cost, or that any increase in costs is
marketwide and can be incorporated into sales prices. We also conclude that the risk of stranded
assets is minimal, as the average life remaining on our truck and car leases is limited (estimated
to 3 to 4years).
Adaptation to extreme weather
The business impact of extreme weather is already included in our climate model, as it could be a driver
of lower GDP growth. Bunzl monitors the current impact of extreme weather on our operations to
ensure we remain well prepared for worsening conditions in the future. In recent years we have seen
disruptions due to extreme weather in North America (hurricanes and wildfires) and Australasia
(wildfires and flooding). These events were predominantly regional and in most cases we were able to
serve customers from a different location. If this was not possible, then it is expected revenue would
recover in a short time after conditions normalise. We have concluded that extreme weather conditions
currently do not represent a material financial risk to Bunzl in excess of the impacts already modelled
by considering the impact climate change will have on GDP.
Changing market dynamics
We have modelled the business impact of changing market conditions, by considering the potential
forclimate change to lead to lower GDP growth and higher carbon taxes:
Global GDP: Bunzl’s revenue is to some extent correlated with the health and progress of the global
economy. Economic damage from climate change could be caused by a number of outcomes, including
shocks from extreme weather events, losses in agricultural productivity, temperature effects on labour
productivity and human health, energy demands, and flows of tourism. All impacts are considered
within our scenarios.
Carbon pricing is a cost levied by governments to encourage polluters to reduce the amount of
greenhouse gases they emit. The Orderly scenario assumes increased carbon pricing in key Bunzl
countries as a result of Government intervention and sustained consumer pressure. The Disorderly
scenario reflects moderate pressure from consumers for climate action, resulting in a much lower
carbon price than the Orderly scenario until 2030, when the substantial financial impacts of extreme
weather events leads to a rapid policy response from Governments. A high carbon price is required
from this point to drive large emissions reductions to limit global warming. Within the Hot House
scenario, increases in carbon pricing remain negligible up to and beyond 2050.
Thematic area Risk & opportunities Response measures
Shifting customer
expectations
Bunzl’s customers are setting
more stringent environmental
targets.
Bunzl is increasingly expected to
help customers achieve their
ambitions and goals.
Risks
Failing to align with our customers’
ambitions could lead to reputational
damage and loss of sales.
Opportunities
Aligning with customers’ ambitions could
strengthen customer relationships, build
resilience to new environmental
legislation and policy, and create brand
differentiation.
The risks and opportunities are
applicable for all time horizons and are
most significant in the short and
medium term.
Proactive scanning of
customer trends and
expectations. Our customers
demand a wide range of
solutions from Bunzl. We will
build on our role as a
material-agnostic distributor
toprovide customers with:
• information on less carbon
intensive products;
• expert advice on the
sustainability impact of
products sourced;
• a broad range of product
solutions suited to the
application they need;
• options to reduce the
impact of our deliveries (see
page 43); and
• setting emissions reduction
targets to decarbonise our
operations and supply chain
in line with climate science
(see page 49).
Environmental impacts of
technology
Technological advances will drive
decarbonisation of Bunzl’s
commercial fleet and shipping
suppliers. The extent to which
technological change presents a
risk or opportunity for Bunzl will
be determined by factors such as
the development of low carbon
technology for large commercial
goods vehicles and deployment
of charging infrastructure.
Increased regulatory pressure on
the use of fossil fuels for mobility
is expected.
Risks
Bunzl may need to upgrade to less
carbon intensive technologies such
aselectric vehicle technology in our
commercial goods vehicles. Regulations
could limit Bunzl’s access to major urban
areas for last mile deliveries.
Opportunities
New technologies such as energy
efficient measures in warehouses.
Proactive implementation of electric
vehicle technology presents
opportunities for strengthened
customer relationships and brand
differentiation, in addition to emissions
reductions. The risks and opportunities
are applicable for all time horizons and
are most significant in the medium term.
Continuing and accelerating
the introduction of
technology in our warehouse
operations with a focus on
implementation of energy
efficient lighting and solar
photovoltaic panels
(see page 53).
Piloting new low carbon
transport technologies (such
as electric vehicle technology
and biofuels) for use in our
commercial fleet, ahead of full
adoption once large vehicle
technologies become
technically and economically
viable.
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Thematic area Risk & opportunities Response measures
Adaptation to extreme
weather
Bunzl’s suppliers and operations
have already experienced the
impacts of extreme weather. For
example, hurricanes in North
America have disrupted Bunzl’s
distribution activities and
wildfires have threatened Bunzl’s
Australian operations. In both
cases, we have been able to
mitigate the risks to ensure
supply.
Risks
The severity and frequency of extreme
weather events could increase in the
future. While the flexibility of Bunzl’s
supply chain has provided good
operational resilience to the physical
impacts of climate change, there could
be an impact if several key customers
ina high risk region were impacted
simultaneously. More chronic impacts
ofclimate change, such as drought or
increased rainfall may, in certain
circumstances, also lead to resource
shortages and price volatility of raw
materials and packaging.
Opportunities
Our supply chain flexibility and lack of
fixed manufacturing assets provide an
opportunity to quickly respond to
changing operating conditions such as
flooding and erosion caused by changed
weather patterns.
The risks and opportunities are
applicable for all time horizons and
aremost significant in the medium
andlong term.
Proven business continuity
plans have ensured
continued service to
customers.
Resilience through supply
chain flexibility and lack of
fixed manufacturing assets.
Changing market dynamics
The direct (physical) and indirect
(transitional) risk may change
the dynamics of the markets in
which Bunzl operates. A key
potential impact could come
from carbon pricing, leading to
some increase in costs of
carbon intensive products.
Climate change may create a
demand for low carbon products
or the supply of products which
help mitigate the physical
impacts of climate change.
Certain markets may also be
increasingly affected by extreme
weather.
Risks
Bunzl may face the risk of some
increases in indirect costs from carbon
intensive products. Certain markets may
be increasingly affected by extreme
weather (i.e. disruption to the hospitality
industry in areas impacted by wildfires
and flooding) which could impact our
commercial strategy.
Opportunities
Our material agnostic business model
and flexible supply chain allows us to
benefit from opportunities to source and
supply specialist low carbon products, or
to acquire business and/or supply
products which help mitigate the
physical impacts of climate change.
The risks and opportunities are
applicable for all time horizons and
aremost significant in the medium
andlong term.
Bunzl is agnostic to the type
of products it sources and
supplies. This allows us to
follow broader
environmental, social and
economic trends, entering
new markets and seeking
new customers where
thereis a business case
fordoing so.
The ability to effectively pass
through any increased costs
of products in our supply
chain (for example due to
carbon pricing mechanisms)
to our customers.
Emissions reporting and environmental performance
Greenhouse gas emissions scope 1 and scope 2 data (Group)
Data for the period
1 October to 30 September 2019 2020 2021 2022 2023
Scope 1
Total emissions (tonnes of CO
2
e) 99,193 90,568 87,125 93,405 89,806
◊
Emission intensity (tonnes of
CO
2
e/£m revenue) 10.7 9.5 8.5 8.1 7.6
◊
Natural gas usage (m
3
) 8,912,413 8,082,813 8,272,123 9,650,228 8,658,861
Fuel usage (ltr) 31,523,097 29,306,537 28,060,702 29,099,858 29,216,415
Fuel intensity (ltr/£m revenue) 3.4 3.1 2.7 2.5 2.4
Scope 2
Emissions location-based
(tonnes of CO
2
e) 29,594 27,421 25,043 27,895 28,011
◊
Emission intensity
location-based
(tonnes of CO
2
e/£m revenue) 3.2 2.9 2.4 2.4 2.3
◊
Emissions market-based
(tonnes of CO
2
e) 29,835 26,183 25,025 27,337 25,576
◊
Emission intensity market-based
(tonnes of CO
2
e/£m revenue) 3.2 2.7 2.4 2.4 2.1
◊
Electricity usage (MWh) 83,062 80,276 79,057 93,224 90,221
% renewable electricity NA 15 14 17 25
◊
Total scope 1 and 2 emissions
Emissions location-based
(tonnes of CO
2
e) 128,787 117,989 112,168 121,300 117,817
◊
Emission intensity location-
based (tonnes of CO
2
e/£m
revenue) 13.9 12.4 10.9 10.5 9.9
◊
Emissions market-based (tonnes
of CO
2
e) 129,028 116,751 112,150 120,742 115,382
◊
Emission intensity market-based
(tonnes of CO
2
e/£m revenue) 13.9 12.2 10.9 10.5 9.7
◊
Total energy (MWh) (including
self-generated) 516,775 480,711 470,941 510,524 493,505
◊ Included in the external auditors limited assurance scope. See Data Assurance statement, which is available on our website, www.
bunzl.com. The location-based emissions and intensity data for previous years was also assured as detailed in the respective Annual
Reports.
Scope 1 and 2 emissions data requires significant time to collect and categorise and as a result there is
a three-month time lag between our financial data and scope 1 and 2 emissions data.
Our absolute carbon emissions decreased by 4% during the year. The divestment of the Healthcare
business reduced our emissions by 1%, which was offset by an increase by 1% due to acquisitions. The
remaining decrease was driven by an increased uptake of electric vehicles (particularly in UK & Ireland
and Continental Europe), energy efficiency improvements and increased procurement of renewable
energy (from 17 to 25%).
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ESG APPENDIX continued
Scope 3:
In 2023, we assessed the scope 3 Forest, Land, and Agriculture (‘FLAG’) emissions relevant to Bunzl.
FLAG emissions are the emissions associated with land use change and other land-related activities.
InBunzl’s supply chain these emissions are relevant within the scope 3 category Purchased Goods &
Services (particularly paper and textile products). We have screened the relevant materials and
engaged a third party to identify the emission factors required to calculate our FLAG emissions.
In 2023, we have also introduced minor changes to the calculation of scope 3 transport emissions.
These changes have also been applied to our 2019 and 2021 emissions calculations. We have also
rebased our 2019 emissions to take account of acquisitions made after 2019 (our baseline year). Scope
3 emissions are summarised in the table below. The calculation of the emissions associated with
purchased goods and services, which is our largest scope 3 emission source, is based on supplier
spend. The economic emission intensity factors that we use for this calculation do not account for the
inflation increase in 2021 and 2022, which is why the reported emissions associated with purchased
goods and services have increased significantly.
We are reporting on all material scope 3 categories of emissions. Our scope 3 carbon emissions
arereported based on the previous financial year ended 31 December 2022 . The scope 3 emissions
calculation is complex and requires data from a large number of supply chain partners and service
providers, such as third-party carriers and other logistics services providers. As a result, there is a
one-year time-lag between our financial data and the scope 3 emissions data in our Annual Report.
Weare working to develop our access to high quality scope 3 data and to reduce the time required
tocalculate our scope 3 emissions. Once complete, this will allow us to report our scope 3 emissions
inbetter alignment with our financial reporting year.
More information on the scope 3 data methodology can be found in our EHS Reporting Guidelines
which are available in the Sustainability section of our website.
Greenhouse gas emissions scope 3 data (Group)
Scope 3 category
2019
(kt CO
2
e)
2021
(kt CO
2
e)
2022
(kt CO
2
e)
Purchased goods and services
*
5,337 6,348 6,826
Capital goods 18 18 24
Fuel and energy-related activities not included in
scope 1 or scope 2 29 30 31
Upstream transportation and distribution
**
299 346 456
Waste generation in operations 5 5 5
Business travel 20 11 23
Employee commuting 21 20 23
Downstream transportation and distribution
**
92 81 112
Use of sold products 20 13 55
End-of-life treatment of sold products 468 483 696
Total scope 3 emissions 6,309 7,355 8,251
Rebase 557
Total scope rebased emissions 6,866 7,355 8,251
* Includes FLAG emissions.
** 2019 and 2021 restated due to applied methodology changes.
Fuel used for transportation remains our highest source of operational emissions, contributing c.80%
of our scope 1 emissions. Of those emissions relating to transportation, c.81% are generated by our
fleet of commercial vehicles.
Performance against carbon reduction targets
Data for the period 1 October to 30 September 2019 2023
2022 %
reduction
(vs 2019)
2030
target
(vs 2019)
Total scope 1 and scope 2 emissions market-
based (tonnes of CO
2
e) 141,320
1
115,382
◊
18 27.5%
Emission intensity market-based
(tonnes of CO
2
e/£m revenue) 13.8 9.7
◊
30 50%
1. Emissions and emissions intensity in our baseline year have been recalculated to reflect the impact of acquisitions.
◊ Included in the external auditors’ limited assurance scope. See the data assurance statement on the Company’s website,
www.bunzl.com.
Greenhouse gas emissions data (UK)*
Data for the period
1 October to 30 September 2019 2022 2021 2022 2023
Scope 1 emissions
(tonnes of CO
2
e) 17,211 15,261 14,845 15,479 14,165
Scope 2 emissions (tonnes of
CO
2
e) (location-based) 2,660 2,847 2,511 2,215 2,161
Total scope 1 and 2 emissions
(tonnes of CO
2
e) 19,871 18,108 17,356 17,694 16,325
Emission intensity
(tonnes of CO
2
e/£m revenue) 17.0 14.9 14.6 13.4 12.9
Natural gas usage (m3) 469,573 486,661 419,138 425,053 480,585
Fuel usage (ltr) 6,271,182 5,606,760 5,572,556 5,716,256 5,326,859
Electricity usage (MWh) 10,405 11,140 9,823 11,292 10,340
Total energy consumption (MWh) 82,084 75,812 73,815 76,744 71,064
* Energy usage and carbon emissions disclosed separately to adopt to the requirements of the UK Streamlined Energy and Carbon
Reporting (‘SECR’) policy.
Our reported environmental data includes all businesses that are subsidiaries of the Group for financial
reporting purposes, except for recent acquisitions where there has been insufficient opportunity for
the businesses to adopt our reporting guidelines. The revenue from these businesses is not included
when calculating the indexed emissions. The reported data covers 99.4% of the Group by revenue.
Bunzl has a Group wide approach to recording, measuring and reporting energy and climate change
data. Business Areas are responsible for data input and monitoring progress against targets and
providing commentary on significant variances and on the implementation of projects aimed at
improving EHS performance. All data is reported in the Group’s central EHS reporting and consolidation
system. More details can be found in the Group reporting guidelines on our website www.bunzl.com/
sustainability/sustainability-reporting.
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Waste
The amount of waste generated in our facilities in 2023 was estimated to be 22,200 tonnes which
isunchanged compared to last year. We have continued to increase completeness and accuracy
ofreporting, particularly by moving to centralized waste management services in certain areas.
The recycling rates strongly depend on the locally available waste recycling options. In 2023, the
recycling rate remained stable at approximately 50% of the generated waste. This excludes any
post-disposal waste treatment and recycling carried out by waste handlers. The reported waste data
covers more than 99% of the Group by revenue although accurate waste measurement remains
challenging in geographies with less advanced waste management infrastructures.
Water
Direct water usage is not a significant environmental impact for our business as it is principally confined
to staff hygiene and workplace cleaning, with the exception of a very small number of sites where we
process gel or ice packs which contain water. Water discharges, apart from internal sanitation, are
limited to rainwater run-off from the yards of our locations. Our estimated water usage is 224,000 m3
of water per year. Despite the increase in employees in the Group, the usage is slightly lower than last
year due to increased accuracy of reporting.
Environmental management system certification
We have developed an internal EHS management system standard that is based on ISO 14001 and ISO
45001. Some parts of the business, mainly in UK & Ireland, Asia Pacific and Continental Europe, have
elected to become formally certified. These businesses cover approximately 25% of the Group’s
operations (measured by revenue).
Health & safety
Health & safety indicators 2019 2020 2021 2022 2023
Average number of incidents per month
per 100,000 employees 96 85 86 80 88
◊
Average number of days lost per month
per 100,000 employees 3,110 3,040 2,615 2,441 2,338
◊
Fatalities 0 0 0 0 0
◊ Included in the external auditors’ limited assurance scope. See the data assurance statement on the Company’s website, www.bunzl.
com. The data for previous years was also assured as detailed in the respective Annual Reports.
Targets for 2023:
Reduce the Group accident incidence rate by 3% from 2022. Reduce the Group accident severity rate
by3% from 2022.
The 2023 Group accident incidence rate of 88 represents a 10% increase versus 2022. The 2023 Group
accident severity rate of 2,338 represents a 4% improvement versus 2022.
Injuries relating to the operation of our warehouses and vehicles, such as manual handling, falling,
slipping and tripping and impact with equipment remain the highest causes of accidents. In addition
tothe number of accidents, we use a variety of leading indicators, such as near misses, the number of
safety meetings and the number of inspections to measure our performance and to identify areas for
ongoing improvement. Despite this, we have not been able to achieve our incidence reduction target
for reporting year 2023. We have carried out an in-depth review of this increase to identify root causes
and to ensure that our accident reduction programmes remain adequate. In 2024, we aim to update
our global Health & Safety standards and focus on enhancing a proactive safety culture across the
Group. We are currently introducing a new global integrated EHS data management system. We plan
tocomplete this process in 2024. The new system will provide one platform globally to report data,
carry out audits and inspections and to record and monitor actions. It is a key element of our
programme going forward.
Targets for 2024:
Reduce the Group accident incidence rate by 3% from 2023
Reduce the Group accident severity rate by 3% from 2023
Incidence rate
Average number of incidents
per month per 100,000 employees
2019 2020
2021
2022 2023
86
80
88
◊
85
96
12 months to 30 September.
Severity rate
Average number of days lost
per month per 100,000 employees
2019 2020
2021
2022 2023
2,615
2,441
2,338
◊
3,040
3,110
12 months to 30 September.
◊ Included in the external auditors’ assurance scope
See data assurance statement which is available on our website, www.bunzl.com
The data for previous years was also assured as detailed in the respective Annual Reports
External assurance
We engaged PricewaterhouseCoopers LLP ‘PwC’ to undertake a limited assurance engagement,
reporting to Bunzl plc only, using International Standard on Assurance Engagements ‘ISAE’ 3000
(Revised): ‘Assurance Engagements Other Than Audits or Reviews of Historical Financial Information’
and ISAE 3410: ‘Assurance Engagements on Greenhouse Gas Statements’ over the two non-financial
KPIs highlighted on page 41 and the selected data on page 52 of the Sustainability Report and in the
ESG Appendix. In each case that has been highlighted with the symbol ‘◊’.
PwC has provided an unqualified opinion in relation to the relevant KPIs and data and their full
assurance opinion is available in the Sustainability section of our Group website, www.bunzl.com.
Non-financial performance information, including greenhouse gas quantification in particular, is
subjectto more inherent limitations than financial information. It is important to read the selected
information contained in this Annual Report in the context of PwC’s full limited assurance opinion
andthe Company’s EHS Reporting Guidelines which are also available in the Sustainability section
ofour website.
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ESG APPENDIX continued
Supply chain risk assessment
To guide our responsible sourcing work effectively, we partnered with the Non-Governmental
Organisation (‘NGO’) Stop the Traffik which has applied its methodology to rank the inherent modern
slavery and human rights risks in our supply chain. This work was based on a combination of the
sourcing country and market sector applicable to the products and services being procured.
In our supplier risk assessment work we place primary focus on the inherent modern slavery risks in
the countries that we source our products from (see Category A below for examples). However, we are
aware that lower risk countries can contain industry sectors with an increased risk of modern slavery
issues (see Category B below for examples and our approach to mitigation).
The table below provides an overview of how we categorise the modern slavery risks associated with
our suppliers and the risk mitigations we apply.
Category Description
Countries and
product
sectors Risk mitigation
Category
A (low
overall
spend)
Suppliers operating in very
high or high risk countries
regardless of product risk
sector.
Our responsible sourcing
target to 2025 covers this
category.
Most Asian
countries. Key
countries
outside of Asia
are Brazil,
Turkey, Mexico,
Poland and
Israel.
• Standard or enhanced
Bunzl audit process in Asia.
• Risk-based assessment and
audit process outside Asia
(self-assessment will be
used to determine the most
appropriate approach).
• Type of audit (standard or
enhanced) to be
determined by product risk
sector and other leverage
factors such as spend and
number of employees at
supplier location.
Category
B (low
overall
spend)
Suppliers operating in lower
risk countries but operating in
a very high or high product risk
sector. Very high and high risk
product sectors:
• Manufacturing of wearing
apparel
• Manufacturing of textiles
• Manufacture of leather
products
In various
countries such
as USA, UK and
France.
Similar assessment and
auditing techniques to
Category A but targeting
specific sectors in these
countries. These will be
conducted at a lower
frequency or by using
proactive spot checks.
Category Description
Countries and
product
sectors Risk mitigation
Category
C (high
overall
spend)
Suppliers operating in lower
risk countries and operating in
lower risk product sectors.
Lower risk product sectors:
• Manufacture of rubber and
plastic products
• Manufacture of paper and
paper products
• Manufacture of chemicals
and chemical products
In various
countries such
as USA, UK,
France and the
Netherlands.
These suppliers are provided
with Bunzl’s Supplier Code of
Conduct.
Code of conduct
The Group’s business code of conduct is a guide for every employee explaining how they are expected
to conduct themselves both from a corporate and individual perspective.
2021 2022 2023 Comment
Material breaches of
code of conduct
0 0 4 In 2023, 4 material breaches of our code of
conduct were recorded.
Speak up 33 83 141 In 2023 we received 141 reports through our
confidential whistle blowing process, ‘Speak
Up’, 17 of which related to the 4 material
breaches of our code of conduct. The increase
in cases is likely due to several factors; an
increase in the number of clustered reports
relating to the same issue; new acquisitions
and greater awareness of the policy following
the global Fraud Investigation Toolkit training
sessions.
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Employees
Engaging with our employees with clear communications and the provision of learning and development opportunities
2021 2022 2023 What we said we would do in 2023 What we did What we plan to do in 2024
Employee turnover:
Voluntary
17.3% 17.1% 15.3% Ensure that we have a competitive
employment proposition which reflects
the local labour market. Continue our
strategy of listening to understand
employee engagement in more detail.
Continued to strengthen our employer
brand both internally and externally to
elevate ourselves as an employer of choice.
Used data from the Great Place To Work
survey to further understand levels of
engagement of new staff.
Pilot to gather targeted feedback from new
joiners to understand early views on
employee experience. Analyse employee
survey engagement consolidated data from
leavers to understand any barriers to staying
at Bunzl. Build on our employer brand work.
Gender diversity:
Women at senior
management level
19% 20%
*
22% Promote female role models through a
focused programme of communications
and extended networking events such as
female leadership conferences in North
America and Latin America.
Expanded our Inspiring Women in Bunzl
programme and other programmes aimed
at future female leaders. Continued to use
feedback from listening sessions.
Continue to report on percentage of females
at senior leadership level to ensure we
maintain or increase current levels. Further
expand networks and female-focused
development programmes.
Employee engagement
index score
86% 85% 69%
**
Extend the pilot of Great Place To Work in
our Continental Europe region.
Undertake pulse surveys with specific
teams to monitor progress on action plan
and impact on results.
Extended the pilot of Great Place To Work to
approx. 45% of our employees across all
regions. Local and regional action plans
were put into place following the survey
results to drive continuous improvement.
Extend the Great Place To Work survey to do
afull global survey for all employees in 2024
and continue to make improvements through
the monitoring of actions plans.
* 2022 gender diversity figure has been restated to ensure comparison of like for like population.
** The measure used for 2023 is the overall Trust Index score from the Great Place To Work pilot survey. This is a very different measure from the previous sustainable engagement score so cannot be compared directly. This was the overall score from the 2023 pilot survey
(covering approximately 45% of our employees).
Senior management (%) and employees Total workforce (%) and employees Average number of employees (%) Total workforce age profile (%)
Males 78% 393 Males 62% 14,668 North America 38% Under 30 18%
Continental Europe 26% 30–39 24%
Females 22%* 113 Females 38% 9,082 UK & Ireland 17% 40–54 37%
Rest of the World 19% Over 55 21%
* 33.3% of the Executive Committee’s direct reports are female (nine employees).
Source:
HR from September 2023 (senior management group defined as the
individuals who receive share awards as part of their remuneration) Source: HR from BRMS Source: Note 26 on page 185 Source: HR from BRMS
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2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Revenue 11,797.1 12,039.5 10,285.1 10,111.1 9,326.7
Operating profit 789.1 701.6 623.3 618.5 528.4
Finance income 60.4 22.3 10.7 10.4 12.4
Finance expense (150.9) (90.2) (65.3) (73.2) (87.5)
Disposal of businesses – 0.9 – – –
Profit before income tax 698.6 634.6 568.7 555.7 453.3
Income tax (172.4) (160.2) (125.9) (125.7) (104.1)
Profit for the year attributable to the
Company’s equity holders 526.2 474.4 442.8 430.0 349.2
Basic earnings per share 157.1p 141.7p 132.7p 128.8p 104.8p
Alternative performance measures
†
Adjusted operating profit 944.2 885.9 752.8 778.4 653.3
Adjusted profit before incometax 853.7 818.0 698.2 715.6 578.2
Adjusted profit for the year 640.3 616.8 542.5 550.5 440.6
Adjusted earnings per share 191.1p 184.3p 162.5p 164.9p 132.2p
† See Note 3 on page 160 for further details of the alternative performance measures.
FIVE YEAR REVIEW
Charitable contributions
Bunzl’s operations are international but our strength lies in the local nature of our businesses. We
support the communities where our employees live and work and encourage fundraising activities
championed by our businesses and their employees locally. In 2019, we realigned our corporate charity
programme to focus on environmental projects related to recycling, litter prevention, clean-up and
waste management infrastructure.
During 2023 we continued to support activities in these three areas:
• charitable projects that encourage packaging reuse and recycling, and work to educate consumers;
• litter clean-up and prevention initiatives operating in our markets, giving our employees the
opportunity to get involved; and
• projects that build new waste management infrastructure and develop recycling skills in some of the
world’s poorest places, often in areas where plastic leakage to the natural environment is highest.
Example initiatives
Charity name Project
WasteAid Working with local associations, WasteAid and Bunzl have provided tailored
training in business skills for up to 50 waste pickers in Johannesburg, South
Africa to enable them to increase their earning potential. The training was
followed by the opportunity to pitch for microgrants to support their activities,
for example for the purchase of handcarts or compactors, or rental of a
premises for aggregating material.
Hubbub An engagement campaign aimed at encouraging commuters in major UK cities
to reduce waste and save money by remembering their reusable cups, water
bottles, and lunchboxes. The campaign employed a digital approach, featuring
advertisements and collaborations with social media influencers.
Group wide, Bunzl donated a total of c.£1.8m to charitable causes during 2023. This does not include
amounts donated by Bunzl in matching funds raised by employees for local charities.
ESG APPENDIX continued
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Bunzl plc
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