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    Dominic Edridge

    Research Analyst at Deutsche Bank

    Dominic Edridge's questions to BUNZL (BZLFY) leadership

    Dominic Edridge's questions to BUNZL (BZLFY) leadership • Q4 2022

    Question

    Dominic Edridge questioned if the 2023 margin guidance was overly conservative, considering the accretive impact of recent M&A and the disposal of the lower-margin UK healthcare business. He also asked about the competitive landscape for the major Tyson Foods contract win.

    Answer

    CEO Frank van Zanten explained the Tyson win was against a smaller, local competitor, with Bunzl's reliability, strong balance sheet, and national footprint being key differentiators. CFO Richard Howes addressed the margin guidance, stating the caution is due to an expected increase in customer tender activity after a benign three-year period. He anticipates a potential catch-up of several years' worth of tenders, which could pressure margins as they negotiate to retain business.

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    Dominic Edridge's questions to BUNZL (BZLFY) leadership • Q2 2022

    Question

    Dominic Edridge of Deutsche Bank asked for details on gross profit margins for core versus COVID-related products compared to 2019, and the potential impact of falling freight and fuel costs in the U.S. on Bunzl's operations.

    Answer

    CFO Richard Howes stated that base business gross margins have held up well despite inflation, while COVID-product margins have declined from last year's highs. Regarding costs, he noted that falling fuel and freight prices in the U.S. should eventually be beneficial to OpEx, though the impact is delayed by customer surcharges. This benefit could help offset expected labor cost inflation in Europe.

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    Dominic Edridge's questions to BUNZL (BZLFY) leadership • FY 2021

    Question

    Dominic Edridge from Deutsche Bank AG inquired about the quantifiable cost savings from network rationalization, the potential for further optimization, and whether the M&A strategy would shift towards more synergy-driven deals or continue focusing on standalone businesses.

    Answer

    CEO Frank Andre van Zanten described network rationalization as a continuous, ongoing process that supports efficiency rather than delivering a single large step-change in costs. Regarding M&A, he stated the strategy will remain a combination of anchor, bolt-on, and acquisitions in adjacent areas, with a focus on businesses that have a strong strategic position, not just cost synergies.

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