Ladies and gentlemen, hello and welcome to the Bunzl 2020 Annual Results Call. My name is Maxine, and I'll be coordinating the call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad, or if you're joining us via the web, by clicking the flag icon. I will now hand you over to your host, Frank van Zanten, to begin. Chief Executive Officer of Bunzl. Please go ahead when you're ready, Frank. Good morning, everyone, and welcome to Bunzl's 2020 Full Year Results Presentation. I'm glad that we've been able to connect virtually once again to discuss Bunzl's results. After a short introduction from me, Richard Howes will present the financial results. I will review our operations in more detail before discussing the outlook and providing some further insight into the group's activities this year, particularly those focused on our longer-term opportunities. Firstly, I would like to start by reiterating how proud I am of all the members of the Bunzl family. The teams continue to work incredibly hard to support our customers during this challenging period. They have been on the front line during the pandemic, supplying essential products to key workers and ensuring that hospitals and crucial businesses could continue to operate. This also includes all our sourcing teams who have been able to source high-quality products despite the exceptional level of demand. It is ultimately the tremendous hard work and commitment of all our colleagues that have driven our strong performance this year, and I thank them all. Before we go through the detail of this year's performance, let me reiterate that the safety and well-being of everyone connected to Bunzl, including our colleagues, customers, and suppliers, are and remain priorities for us. Whilst operating throughout the pandemic, we have taken all the appropriate measures to keep everyone safe. Overall, we have delivered a very strong and resilient performance over 2020. This resilience is supported by our diversification of geographies and market sectors and our position as an essential component of the global supply chains. We have remained open throughout the pandemic and have been able to offset significant weakness in the food service and retail sectors with strong growth elsewhere. We have reached a significant milestone of generating GBP 10 billion of revenue. We delivered adjusted operating profit growth of 21% at constant exchange rates, with operating margin increasing 70 basis points. We have been able to maintain our track record of dividend growth and have recommended a 7% increase in our final dividend. We pride ourselves on being responsible, and over the year, I'm pleased that we were able to repay government assistance and substantially increased our charitable donations. We also conducted an in-depth sustainability materiality assessment. I will talk about this in more detail later, but I'm really pleased we were able to discuss key issues with a large number of our stakeholders to help prioritize our sustainability agenda going forward. Despite the pandemic, 2020 was also the second most acquisitive year in our history. We announced eight acquisitions over the year and committed GBP 440 million of spend. Our acquisition momentum remains strong with three further acquisitions announced today. We are committed to our compounding growth strategy, and despite the higher than average acquisition spend over 2020, ended the year with significant headroom to support future growth. We have been operating in unique circumstances, and I'm very proud of what the Bunzl teams have achieved. We are a business that prides itself on resilience, responsiveness, and responsibility, and we have demonstrated all three over a challenging period. I will now hand you over to Richard to take you through the financial results. Thank you, Frank. As in previous years, in the following slides, we are presenting both actual and constant exchange growth rates. Over the 12 months to December, foreign exchange had a 1%- 2% adverse impact to reported results. In reviewing the income statement, I will refer to growth at constant exchange rates. Starting with revenue. Revenue grew by 9.4% to GBP 10.1 billion. Underlying growth, which is organic growth adjusted for trading days, contributed 4.8% to this growth, with an extra 0.5% relating to the additional leap year-related trading day. With underlying revenue growth of 4.8%, the top eight COVID-19 related products contributed growth of 14.6%. These sales included larger orders, predominantly in the second and third quarters, delivered to customers looking to build up inventory of these products earlier in the pandemic. This growth was partially offset by a 9.8% decline in sales across other product ranges. This decline was greatest during the second quarter, when pandemic related restrictions were at their most onerous, and the declines reduced over each subsequent period. A decline in other product sales was seen across all sectors, with food service and retail experiencing the greatest negative impact. Overall, group underlying growth accelerated from 2.8% in the first half to 6.7% in the second half. Over the year, acquisitions contributed 4.1% revenue growth, also an acceleration in the second half. Now turning to the income statement. Adjusted operating profit grew significantly, up 20.9% to GBP 778.4 million. Our operating margin increased from 7% to 7.7%. This largely reflects the mix effect of selling considerably more in the higher margin healthcare, safety, and cleaning and hygiene sectors, and less to the food service and retail end markets, which tend to have lower margins. It also reflects the increased mix of own brand products, which tend to have higher margins, price inflation on some COVID related products such as masks and gloves, and the operational leverage on larger orders. Operating profit includes a net charge relating to provisions for expected credit losses on trade receivables and customer specific and slow-moving inventory. We have seen a number of customers either entering insolvency processes or illustrating specific credit stress indicators, particularly in food service and retail. This has resulted in a net charge of approximately GBP 15 million being taken during the year. This is approximately GBP 5 million higher than reported at the half year. The group has also reflected a net charge of approximately GBP 10 million for those customers identified as high or medium credit risk. This is approximately GBP 10 million lower than reported at the half year. Further to this, the group has seen an increase in the level of slow-moving inventory as COVID-related restrictions have continued to impact customer demand across a range of our market sectors. A charge of GBP 15 million has been booked accordingly. Adjusted items were GBP 159.9 million. Within this is a non-cash impairment charge of GBP 14.8 million for the restructuring of our domestic China operations, which in recent years have been loss-making with limited opportunities to develop own brand products. As a result, the decision was made to close this business and to focus on our China-based export operations and distribution services for global customers. In addition, adjusted items include a GBP 16.4 million pension charge relating to the decision to withdraw from three multi-employer pension plans in North America. Net finance expense decreased by GBP 3 million as a result of lower average interest rates as well as lower average net debt. Adjusted profit before income tax increased by 25.6% to GBP 715.6 million. Continuing down the income statement, the effective tax rate for the period was 23.1%, down from 23.8% in the prior year, reflecting a higher credit for the share-based payment expense and a larger benefit from the reduced prior year tax exposures. We expect effective tax in 2021 to return to around 24%. Earnings per share increased 2.6% to GBP 1.649. As Frank mentioned, the board is recommending a 7% increase in the final dividend. This increases our total dividend for the year by 5.5% and reflects the group's commitment to ensuring sustainable dividend growth. You may also recall that with Bunzl's AGM held on the 15th April 2020, during the early days of the pandemic and a period of heightened uncertainty, the final dividend for 2019 of GBP 0.358 was not proposed by the board. However, with better than expected trading performance subsequently demonstrated, the board decided to reinstate this final dividend through an additional interim dividend, which was paid on the 16th November. We continue to reflect this within the total dividend number for 2019. Now turning to the balance sheet. Working capital has increased by GBP 78 million since the prior year end, with an increase from acquisitions and currency translation, partly offset by a net reduction in underlying working capital. Within underlying working capital, higher inventory levels were more than offset by higher payables, including GBP 34 million of net favorable advanced payments for orders of COVID-related products. Over the year, we announced eight acquisitions and committed GBP 445 million of spend. Despite this, net debt excluding lease liabilities ended the year at only GBP 1.3 billion. This is broadly in line with the net debt position at the end of 2019. Net debt to EBITDA on a covenant basis was 1.5x, which is down on the prior year-end position of 1.9x. We therefore remain comfortably below our target range of 2x-2.5x, which gives us substantial capacity to self-fund acquisitions such as the ones we're announcing today. Return on invested capital grew from 13.6% to 16.2%. This higher level of return reflects the increase in adjusted operating profit and lower average operating capital. On cash flow, it was a strong period for cash generation with cash conversion of 103% and free cash flow growth of 27% on the prior year. Cash conversion benefited from the net GBP 34 million favorable impact of advanced payments, and excluding these payments, cash conversion remains strong at 99%. During 2020, we paid dividends of GBP 171.5 million, which includes the additional interim dividend I have discussed. We also invested GBP 387.5 million in acquisitions, which is more than double the cash outflow in the prior year. Cash conversion of 99%, excluding the advanced payments, is in line with the average rate of cash conversion since 2004, significantly above our target of 90%. As you are aware, the strength and resilience of Bunzl's cash flow is a key component of our business model. Today's announced dividend represents Bunzl's 28th year of consecutive growth. Bunzl is one of only four FTSE 100 companies to grow its dividend every year for the past 28 years. The CAGR of dividends since 1992 is an impressive 10%. To summarize, adjusted EPS increased 26.6%. Cash conversion has been strong at 103%, and our final dividend per share has increased by 7%, supporting our 28th year of dividend growth. Lastly, we ended the period in a strong position with headroom that provides substantial capacity for self-funded acquisitions. At this point, I'd like to hand over to Frank, who will take you through the business review. Thank you, Richard. During my presentation today, I will focus on the following topics. An overview of performance over the last 12 months, including how we have navigated the pandemic. I will look forward and consider the prospects for 2021 and beyond. Finally, I will discuss what we have been doing to focus on the longer term. Starting with the operating review. This year's performance has been supported by the sales of COVID-related products to our customers across all our market sectors. The top eight product categories, which you can see pictured on this slide, including masks, disposable gloves, and sanitizers, generated 22% of revenue in 2020. Sales across these product categories were 2.6x higher than in the prior year and contributed 14.6% to underlying revenue growth. This performance also included some meaningful larger orders, predominantly for governments and healthcare organizations. These larger orders contributed around 40% of the COVID-related sales growth in 2020, although they were highest in the second and third quarter. In the second quarter, these larger orders contributed half of COVID-related growth, but by the fourth quarter, only contributed around 20%. We do not expect the benefit of larger orders to repeat in 2021. Smaller COVID-related orders were generally made by existing customers, and while they were highest in the second quarter, demand remained strong throughout the second half. To help you understand how our different businesses have performed, we have categorized our market sector's performance as we did at the half year. Healthcare, safety, and cleaning, and hygiene have seen the strongest growth. Combined, they grew by 31% and represented 37% of group revenue, up from 32%. Performance in the second half maintained the momentum of the first half. Rest of the world, where around 70% of revenue is generated through these sectors, benefited strongly over the year. Whilst North America experienced significantly less benefit due to its lower mix towards these sectors. As I outlined earlier, some of the sales in these sectors were through larger orders, with Continental Europe and U.K. and Ireland seeing the highest level of such orders. Grocery grew by 8%, with North America generating the vast majority of the group's grocery revenues. The acquisition of Joshen in North America contributed to the increase in revenue, but organic growth was still positive. The food service and retail sectors have seen the most disruption since the pandemic began. As restrictions resulted in store and outlet closures for extended periods of time. Revenue declined by 6%, and the contribution to the group mix declined from 40% to 35%. The U.K. and Ireland's larger exposures to these sectors materially impacted its performance. Similarly, the larger exposure to these sectors in North America impacted first half results. However, over the second half of the year, retail sales grew in North America, with strong packaging sales driven by the increase in online activity, and food service, including COVID-19 related revenues, also stabilized. In the U.K. and Ireland and Continental Europe, on the other hand, food service revenues continued to decline in the second half as further lockdown restrictions were imposed later in the year. The margin performance of our business areas broadly reflected these sector trends over the period. Overall group margins were supported by the change in sales mix to higher margin sectors and own brand imported products, in addition to strong operating leverage on larger orders and price inflation on certain COVID-19 related products. I will now go through the business areas in more detail. We are a global business, and for the year generated less than 10% of our profit in the U.K. and Ireland. As a consequence, we experienced limited Brexit disruption. In North America, revenue grew by 7.2% to GBP 5.8 billion. Organic revenue grew by 1% due to a strong increase in COVID related products, offset by a decline in other product sales. As I've mentioned, North America performance saw an acceleration in the second half of the year as activity in the region improved. Growth was further supported by the acquisitions of Joshen, MCR, and Snelling over the year. Overall, adjusted operating profit was GBP 395.7 million, up 15.7%, and with operating margin increasing from 6.3% to 6.8%. Product mix benefits offset the negative impact of the decline in other product sales and additional provisions for increased credit exposure and slow-moving inventory. Within the sectors, underlying grocery performance was impacted by the reduced demand for freshly prepared food packaging, given the closure of deli and other in-store counters, but this was largely offset by the sale of COVID related products. An acceleration in organic growth in the second half of the year was driven by the continued benefit experienced in grocery, resulting from the restrictions in the food service sector, and also by price inflation in certain products. We saw good growth in redistribution, with the negative impact on the food service sector more than offset by growth in the cleaning and hygiene sector. We also saw strong safety growth. Revenue in Continental Europe rose by 15.6% to GBP 2.1 billion, driven by very strong organic growth of 15.1%, which includes meaningful larger COVID related orders. Adjusted operating profit was GBP 238.1 million, up 30.8%, with the operating margin increasing from 10% to 11.2%. Sector mix supported revenue growth in France, even excluding the larger COVID related orders, whilst in the Netherlands, exposure to the food service sector offset good growth in healthcare, cleaning and hygiene, and e-commerce fulfillment, and resulted in broadly flat sales once larger COVID related orders are excluded. Turkey benefited significantly from increased sales of PPE, particularly gloves, to hospitals, food processors, and grocery stores. Revenue in the U.K. and Ireland rose by 3.5% to GBP 1.3 billion, with organic revenue growth of 2.6%, driven by strong growth in COVID-19 related products, which offset the significant decline in other product sales. The business area generated GBP 68.6 million of adjusted operating profit, which is a 21.2% decline from the prior year. This was driven by the impact of COVID-19 related shutdowns in food service and retail, which represent a significant portion of the U.K. and Ireland business area mix, and additional provisions for increased customer credit exposure. Further, our operating businesses servicing these sectors in the U.K. and Ireland are largely stand-alone, which limits scope for fixed cost sharing. As a result, operating margin declined from 7% to 5.3%. While we remain focused on ensuring that our businesses are well prepared to respond to a recovery, we have continued to enhance the efficiencies within the business area. Over the year, we completed planned warehouse consolidations, including retail and catering warehouses. In rest of the world, we saw very strong revenue growth of 21.6% to GBP 852 million. This included 17.6% organic growth, supported by acquisitions in both 2019 and 2020. Adjusted operating profit grew by 94% to GBP 104.2 million, with a substantial increase in both Latin America and Asia Pacific. Operating margin for the business area increased from 7.9% to 12.2%. Within the markets, Asia Pacific performance was supported by a strong weighting to the safety and healthcare sectors. In Latin America, the mix of sales towards the safety sector benefited growth, with demand significantly outweighing supply, particularly in gloves, as well as currency devaluation, driving inflation. Before we move on to discussing the outlook, let me talk about the three Rs that have helped us to navigate the pandemic to date. Firstly, there is an inherent resilience to the business. We have benefited from our diversification, our position in supply chains, and our historic investments. Our financial strength has also provided important reassurance to our customers. Historically, this resilience has also been demonstrated through prior recessions. Secondly, we have been very responsive. Our agility has been supported by our dedicated colleagues, as well as our decentralized business model and entrepreneurial DNA. Further, our investment in digital technologies allowed the group to transact 66% of orders digitally over the year, compared to 62% in 2019. Thirdly, we have ensured that we have continued to act as a responsible business. As I've said, we have first and foremost focused on keeping our people safe. We have also monitored their well-being through a local and group-wide service and recognized our frontline heroes through appropriate rewards and thank you gifts throughout the year. With our Bunzl colleagues being our number one asset, it is great to see the number of Bunzl family members increasing by 5% over the year. Lastly, we have returned employee-related government support, implemented salary and fee reductions for senior management and the board in the second quarter of the year, substantially increased our charity donations, retained our progressive dividend, and conducted an important piece of work to support our sustainability ambitions. Turning to prospects. Our 2021 outlook remains unchanged to that stated in our pre-close statement in December. At constant exchange rates, the group expects robust revenue growth in 2021 over the prior year after excluding larger COVID-19-related orders, which strongly supported the performance in 2020 and which are not expected to repeat. The group expects a recovery in sales of other products to be broadly offset by a decline in smaller COVID-19-related orders, while recent acquisitions will contribute to the group's performance in 2021. Given the growth trends in 2020, after excluding larger COVID-19-related orders, we expect good organic revenue growth in the first half of 2021 to be followed by a moderate decline in the second half of the year. Overall, the food service and retail sectors, which were more heavily impacted by pandemic-related restrictions in 2020, are expected to demonstrate recovery in the second half of 2021, but will remain below 2019 levels for the year. Persistently stronger Sterling would, however, negatively impact reported growth. At constant exchange rates, revenue growth in North America is expected to be robust, driven by the continued benefit from acquisitions and the lower proportion of larger COVID-19-related orders seen in 2020. Revenue in both continental Europe and U.K. and Ireland is expected to decline given the higher proportion of larger orders seen in 2020, which were strong contributors to growth. Rest of the world revenue is also expected to decline, driven by the reduced support from COVID-19-related sales. Group operating margin is expected to return to a more historical level. Looking ahead, Bunzl's long-term prospects remain attractive. Our performance in 2020 has reinforced the resilience, quality, and consistency of the Bunzl model, and we have demonstrated the strength of our customer proposition and supply chains. Further, we see longer-term benefits from enhanced hygiene trends, an increasing focus on sustainable products, and future acquisitions, which are supported by substantial headroom for self-funded growth. We also continue to generate strong cash flow that supports our impressive dividend track record. Even in a crisis year like 2020, we demonstrated the strength of our compounding strategy. Let me take a moment to consider these three longer-term trends we believe will be beneficial to Bunzl's compounding growth strategy. We believe that the focus on cleaning and hygiene will persist and will benefit most of our regions. We expect to benefit from the continuing focus on responsible sourcing and products. Bunzl is a proactive leader in sustainable solutions, and our sustainability credentials are increasing our competitive advantage. We expect the post-COVID environment to support acquisition momentum. Our pipeline is active, and we believe that acquisition opportunities will strengthen further after the pandemic with the benefits of joining Bunzl reinforced. Navigating the pandemic was of course a priority during 2020, we have maintained our commitment to developing Bunzl for the longer term and have increased investments into digital and sustainability in particular. Turning to one of the most important opportunities for the future that I'm really passionate about, sustainability. Let me start by saying that we recognize our role as a proactive leader in the transition to a more sustainable and equitable future. As a major player in our industry, we are a trusted partner for our customers, collaborating with companies across sectors to help them achieve their objectives, which include fulfilling their sustainability ambitions. We also understand that we have an important role to play in supporting the environment and people. A key piece of work that we conducted during 2020 was an in-depth materiality assessment where we interviewed 54 key stakeholders, from customers to suppliers and investors, about what was important to them with regards to sustainability and Bunzl. Following this assessment, we have identified four key areas to focus our ambitions on going forward. Firstly, we will continue to focus on climate change. The Bunzl model is already supportive to limiting carbon emissions as we consolidate products and deliver mixed pallets of products to our customers rather than delivering single items. Over the last 10 years, the carbon emissions generated in our operations compared to the revenue we have generated has fallen by 50%. Overall, we are not a major carbon generator, given climate change is an imperative global issue, we recognize that there is more that we can do. In 2021, we will be setting new long-term carbon reduction targets to reduce carbon emissions across our operations further. Secondly, we will continue to support the transition to sustainable solutions. We know that we are uniquely positioned to support a reduction of waste and to lead the industry in helping customers move towards a more sustainable approach to single-use plastics. Bunzl is not a manufacturer and can easily switch between raw materials, products, and suppliers, and is therefore well-placed to play this role. We already provide sustainable product solutions, including own brand ranges, and provide expert advice to customers. We provide this advice across our customer base, and it's swiftly becoming a key component of contract tenders. Going forward, we will be setting new commitments to accelerate our provision of these alternative products. Thirdly, ensuring a responsible supply chain is essential. Bunzl has had a fully established Asia sourcing auditing operation since 2008. You have heard much about this operation over the year, as it has enabled us to responsibly source large quantities of quality and demand COVID-19 related products. This function gives us a clear advantage over our locally based competitors. Providing this reassurance is not something that would be typical for a distributor in our sector. We conduct around 700 in-person supplier audits each year, covering 95% of our spend in Asia. We have a zero tolerance approach to human rights violations and support our suppliers to improve labor standards when issues are identified. Going forward, we will continue to focus on enhancing our practices relating to supply chain oversight. Lastly, we commit to investing in a diverse workforce and thriving communities. The business within Bunzl have long track records as local employers, and we truly believe our people are our greatest. Over 2020, we have continued to develop our diversity programs and continue to see an increase in the number of women in senior leadership roles. Further, with the events of 2020 highlighting the importance of supporting ethnic diversity, we have also appointed a diversity and inclusion director in North America and have launched an ethnic diversity forum in the U.K. and Ireland. Going forward, we will focus on expanding our diversity and inclusion practices and increasing ethnic diversity programs in particular. Sustainability is a vital part of the Bunzl equation, and the group will be refining its ambitions against each of these key areas over the course of 2021. Let me give you a few examples of how we are supporting sustainable solutions in particular. Firstly, own brand ranges are an important component of our offering for customers. Sustain is one such own brand range that is made from paper and plant-based products produced using only renewable materials. In 2020, our Australian and New Zealand businesses sold over 39 million items of Sustain products, and as a result, 31 million items of single-use plastics were avoided. This demonstrates the impact that working with our customers to support the environment can have. Secondly, the key to winning and retaining customers is providing them with solutions which include addressing their sustainability requirements. A recent contract renewal in Europe is one such example, as the sustainable solutions we offer were a key component of our success. In this example, we provided the customer with air reduction on packaging items to improve carbon efficiency and supplied thinner items to reduce waste. Sustainability is very much becoming part of what we do for customers. We can also work very specifically with customers to achieve their own packaging targets. In this last example, a customer wanted to transition all their single-use plastics to alternatives in a short period of time. We utilized our own technology to assess their existing range and provide alternative suggestions. Given our capabilities and expertise, we were then able to transition the customer to these alternatives swiftly. We take our role as the expert seriously, alongside product solutions, we also made recommendations on waste procedures to ensure a circular solution. Another key priority for the longer term is making further acquisitions. In 2020, despite the challenges of the pandemic, we announced the acquisition of eight new businesses with our committed spend, the second highest in Bunzl's history. The businesses acquired cover all four of our business areas and focus on multiple products and sectors. They have a combined annual revenue of around GBP 600 million and are delivering to plan. Within the acquisitions we've made in 2020, two are more sizable, Joshen and MCR. Both are focused on North American customers, and combined, they generate around GBP 450 million of revenue. We have completed a total of 35 acquisitions in North America since 2010. This has supported the doubling of revenue and profits in the business area over this period. We have strengthened our existing businesses through complementary acquisitions and expanded into newer sectors such as safety and cleaning and hygiene. We continue to see further opportunities for acquisitions in the region. Today, we're also announcing three further acquisitions. I won't go into too much detail, together they demonstrate the great opportunities we continue to find. DeliverNet is highly complementary to our existing U.K. care home business. Disposable Discounter is an online foodservice distributor in the Netherlands with very attractive growth potential. Pinnacle is a leading cleaning and hygiene distributor in Canada. Acquisitions are a key component of our compounding growth strategy, since 2004, we have made 172 acquisitions for a total investment of GBP 3.9 billion without the need to raise any equity. As we have discussed, acquisition momentum is good, and we have plenty of further opportunities. This familiar chart emphasizes the potential we have. The blue dots represent areas across our existing markets where we have no sector presence at all, although even in the areas we have a presence, shown by the spaces, there's still significant potential for growth. To demonstrate the scale of this potential, we have compared the revenue per GDP across our markets to our highest penetration business area, the U.K. and Ireland. That said, we do still see significant growth opportunities in the U.K. and Ireland as well. On this analysis, if Continental Europe were to reach the same penetration as U.K. and Ireland today, it would triple in size. On the right-hand side, we have selected a few individual markets to demonstrate this on the same basis. Germany could be 17 times today's size, Italy 16 times, and Mexico four times. There are also sizable opportunities in new markets on top of this. For example, considering the GDP of Sweden and Poland, they could each develop to generate GBP 200 million of revenue. Once we see plenty of growth in our six core sectors, we have potential to expand into other verticals as well. We expect to deliver on these growth opportunities through both organic growth and disciplined acquisition investment. Bunzl has had a consistent and proven compounding strategy for many years, and hopefully I have demonstrated over the last few minutes how we have continued to invest in this strategy over 2020. We remain focused on delivering organic growth, operational improvements, and growth through acquisition to deliver strong returns and ensure resilience. Since 2004, we have reported an adjusted EPS CAGR of 11% through implementation of this strategy, and in recent years, acquisitions have driven approximately three quarters of this growth. I believe our performance over 2020 further highlights the strength of this strategy. To conclude, we have delivered a strong 2020 performance, achieving the revenue milestone of GBP 10 billion, an adjusted EPS growth of 26.6%. The strength of the Bunzl model has been reinforced. We have proven once again the resilience of the group and the benefits of our diversified portfolio. Bunzl has also demonstrated that it has a highly consistent and successful compounding strategy, which will support a long runway of future growth. Furthermore, we see enhanced opportunities for long-term growth, supported by a recovery in the underlying business, a focus on responsible sourcing, which improves our competitive advantage, enhanced hygiene trends across our group, and good acquisition momentum. As I said at the half-year results announcement, after having spent more than 20 years with Bunzl, I'm now even more confident in the quality and resilience of the business and believe we are executing our strategy successfully. I'm really encouraged by the potential ahead of us. Thank you for your attention, and we're now very happy to take any questions. Our first question comes from Kate Somerville from UBS. Your line is now open. Morning, everyone. Three questions from me, please. Firstly, on those large orders, thank you so much for the breakdown that you gave. I'm just wondering, given in your guidance, you said that there aren't going to be large orders this year. Does that mean that you've not had any orders so far this year? Second question, on slide 16, you break down the different end markets and the constant currency growth you saw there. In grocery and in food service and retail, are you able to give us the organic growth excluding the COVID orders? Finally, in the medium term, as you see a greater shift online in grocery, how do you expect that to impact your business? Thanks. Okay, Richard, maybe you can take the first and the second question. I'll take the last one. Kate, we've not seen any large orders in the first part of 2021. I think our guidance is as stated. Could you just remind me of your question on slide 16? Yeah. You gave, this is constant currency growth rates, and you spoke about grocery overall with a positive organic growth. If you exclude the COVID orders from that, are you able to give an indication of the underlying in both of those end markets, please? In grocery? Yes. Then also in food service and retail, if you can, please. Thank you. Yes. Well look, grocery has been affected, all of our markets have been affected negatively once we take out the COVID orders. The large orders have typically been seen in healthcare, safety, and cleaning hygiene. The underlying growth in both grocery and food service and retail is predominantly a balance between the small order growth, which we've seen in all of those markets, and the significant reduction in the other product sales, the base business. Think predominantly those larger orders have come into the top category, healthcare, safety, and cleaning hygiene. Thank you. On the medium-term prospect in terms of moving online grocery, I think there's a couple of things. What we've seen is during the COVID crisis that because of hygiene requirements, we've seen fresh counters closed, that was sort of more than offset by COVID sales. I think what we do see is if there's more online, obviously that has a positive impact on packaging. That is not necessarily the packaging that goes to the supermarket itself. You have to realize that we have quite a large processor business also, which basically is delivering to the food packers or the meat processors. When you have more sort of online and home deliveries, you tend to see also more of these items going. Even if there would be a slight pressure on grocery because of the online trend. You see that offset by growth in processor divisions. Okay, perfect. Thank you very much. Our next question comes from Will Kirkness from Jefferies. Your line is now open. Thanks. Morning. I've got three also. Firstly, just on the outlook organic growth. Just going back to that sort of GBP 540 million or something from the large orders. You take those off and then you've got sort of smaller orders coming away that reopening offset that. That's sort of a - 5% on the base. Just wondered if that's the right way to think about it or there's something else that might mean that the outcome is better. Secondly, just on gross margins, seeing some increase in product costs coming through at the moment. I wonder if you can just talk about your ability to pass those on. Lastly, just costs from an OpEx perspective. People, particularly thinking about lower wage levels in the U.S. and then also freight, changes in freight costs as well. Thanks very much. You want to take them all, Richard? Yeah, happy to. In terms of the organic growth, Will, the large orders, around GBP 540 million, it's 40% of the 14.6% is the organic growth from those large orders. We don't expect that to continue into 2021. We have seen that sequentially reduce over quarter two, three, and four. Other than that, about the level you're getting to excluding the large COVID orders were about right. In terms of gross margins, could you just remind me the gross margin question again? That's a product question, but yeah. It's more about the product cost. If you look at some of the pulp and resin indices that we've recently seen some moves up there. Yeah. Sometimes you're able to just pass it on directly. Just wondering about how that is for you just generally across the business. A good thing, bad thing? Yes. Look, the main change in 2020 was that the inflation has been very much a COVID related point. We definitely have seen inflation on COVID products such as masks and more laterally, gloves. The underlying business is much less clear as to what the underlying inflation/deflation trends are. Albeit, I would say that we're probably seeing a little bit of inflation as we exit the year. As to how that's reflected in our gross margins, it depends on which part of the business you're in. In our cost-plus arrangements, this, of course, will be passed through. In the areas of the group outside of the cost-plus arrangements, as a price setter, we'll be negotiating those through with our customers. On your third question about OpEx, I think we are seeing and have seen wage inflation. We are seeing freight inflation across the globe, but that's particularly driven by COVID related inflation. When the freight increases are coming alongside COVID growth, then typically they are being passed on to customers. Okay. Thanks very much. Our next question comes from Sylvia Barker from JPMorgan. Your line is now open. Thank you. Hi, morning, everyone. Following up on the inflation point a little bit, just could you give us the overall kind of impact of pricing versus volume this year? I know it's been very difficult because there's so many impacts in there, it seems like it was very strong in North America and Latin America in H2 in particular. Am I correct in thinking that kind of exiting the year, you said obviously gloves still running quite high, plus maybe the underlying business seeing some of that inflation, kind of any quantification on 2020 or the exit rate will be quite interesting. Secondly, food service and retail, you said were already stabilizing in the second half in North America. Is the gap that you expect relative to 2019 in this year in food service and retail driven by the U.K. and Continental Europe, or will there still be a gap you think in North America as well? Finally, if we think about some of your larger clients, let's say the Walmarts and Targets, are you kind of discussing including some of the COVID products, whether they're safety or cleaning and hygiene, as part of your core relationship going forward? That might just last not just during lockdowns, but as we look further out as well. Thank you. Okay. I'll take the last question, Richard. On inflation, Sylvia, just to reiterate what I said before, the base business position on underlying inflation, there is some. We probably see a little bit of that coming out of the year. I'd be careful about drawing too direct a correlation between substrate raw material inflation and what we would see in the finished goods that we buy. The vast majority of the inflation effect in 2020 was very much COVID related. Those parts of the world where we have the biggest COVID effect have seen the biggest inflation effect, particularly for gloves. Gloves in the latterly in the second half of this year is seeing inflationary trends. We've seen that particularly in North America and the rest of the world. In terms of food service and retail stabilization, look, the base business is the other product sales in both of those markets remain weak in most parts of the world, particularly, of course, in Q4, where we've seen continental Europe and the U.K. in particular being in lockdowns. Even in the U.S., we have seen the underlying operating other product sales being weak, and it's being made up for by the COVID sales. As we exit the year, we still have a significant recovery to deliver in those other product sales. Okay. Sylvia on the large customers trends we see, we shouldn't forget that our customers are spending less than 1% of their budget on our products. It's a very wide range of products. They're essential products, and they need to be there on the right time, on the day or sometimes on the hour. We've certainly seen that our larger customers or in general, the COVID related products are flowing through our system. It's a lot more efficient. I think also with the enormous boost in online in grocery, a lot of the capacity in the supermarket is being focused on delivering out, fulfilling the internet orders from the consumer. They're very happy if Bunzl basically gives a bit of relief by fulfilling the items on COVID or other things. We are really sort of the warehouse or the platform for the customers, and I expect them to continue to use Bunzl for all these goods not for resale. Okay, thank you both. In terms of kind of these other product categories, you don't need necessarily a formal relationship kind of going forward, or I don't know, could we think about that as you're, let's say, renegotiating your Walmart contract kind of coming up for renewal, could one of the options within that be volumes are going up because there's now another category of products, or does that not need to happen in such a formalized manner? Well, it doesn't have to happen. Obviously, yeah, we still have some time. Our largest customer is quite pleased with our performance over the COVID period. Relationships are good. We'll start to sort of entertain discussions at some point. They may include COVID items or other items. There's always product range is still out there. Maybe something will drop off, something else will come in. It's a bit early days, but, I think we'll see a tendency of supermarket chains focusing on the capacity they need to fulfill online orders for the customers, and hopefully that's going to give us support in terms of them outsourcing goods not for resale to us. Very helpful. Thank you. Our next question comes from Andy Grobler from Credit Suisse. Your line is now open. Hi, good morning, everybody. Can I just ask two, please? Firstly, hopefully simple one, going back to a previous question, could you just remind us of the split between cost-plus and negotiated contracts across the regions, please? Secondly, you talked about digital increasing, so 66% of sales through digital. To what extent do you see that as a competitor advantage out in the market and you as a larger or the largest player being able to win and maintain client relationships in a way that some of the smaller guys can't? I guess as an add-on to that, having several hundreds of systems across Bunzl, is that a barrier to fully take advantage of that option? Thank you. Yeah. Okay. Well, split of cost-plus, I can't give you exactly, but what I can tell you is this, that this is mainly a U.S. phenomenon for some of the larger customers, and there's different flavors of cost-plus. You don't see it so much in, for instance, continental Europe, Australia, or South America. On the digital competitive advantage, yeah, I think the reason why digital orders are important for us is for different reasons. The first reason is that we do see that if we have a full service collaboration model with our customers that includes digital transactions, can be EDI, can be portals, can be web shops, that significantly increases the stickiness even further. We have very, very long-term relationships. If you look at our top 20 customers in the U.S., for instance, we do more than 15 years of business with. It ties you just more into the customers. We are the warehouse for the customer, and it's an important point. The other thing we see is when people are basically linked to our web shop, they tend to order more. Our average order size goes up. Order size and delivery size is a key profit driver for us, so it's also easier to upsell products or introduce alternatives or make suggestions of sustainability items. That's why we are keen to do that for the stickiness. Obviously also, it does improve the efficiencies in the business also and in dealing with the customers. Now, at the same time, we're also spending a lot of focus on more automating the supplier relationship. We made significant progress also in terms of automatically sending out orders to suppliers and receiving the invoice back in. That's why, let's say, that is important. That percentage was about 50% when I started as CEO in 2016, and we are continuing to drive that up. Great. Thank you very much. Our next question comes from Annelies Vermeulen from Morgan Stanley. Your line is now open. Hi. Good morning. Thank you. Just two left from me, please. Firstly, coming back to one of the previous questions on the organic growth, that 4.8% you reported for last year or for full year 2020, could you give us the split between the volume and the price mix, as you've done in the past, and how that develops through the year? If you're thinking about, say, - 5% organic for this year, again, how you see that at this stage splitting between volume and price. I'm guessing it's sort of quite negative volume growth offset by a bit better pricing, but any color on that would be helpful. Secondly, you've talked about foodservice and retail not returning to 2019 levels through the second half. If you think about some of the news flow that we've had on bankruptcies and store closures in those two segments, do you have a sense of how much of your revenue or organic growth has probably disappeared altogether and probably won't ever come back? Any color on that would be helpful. Thank you. Richard, you want to take this? Sure. Annelies, just to repeat the fact that we not going to give you a split of volume and price, in part because this is a very strange period where the COVID products have significantly changed the shape of how Bunzl has operated in 2020. The COVID products is where the inflation has been, both in masks and in price. If we look into 2021, that will reverse. We will see the effect of that price inflation reversing, particularly in the second half of this year, we think. That's primarily glove-driven, and that is primarily due to the fact that we think there'll be additional capacity brought on stream through the first half of this year, meaning that overall, the level of price effect in glove-related price effect should be less in the second half of the year. Food service and retail, look, we have seen a significant impact across the year. Clearly, Q2 is a major impact on both of our end markets. That has sequentially improved as we've gone through this year. When we look into next year, look into 2021, I think it's still very much reasonable to assume that we will not be back to 2019 levels in that period of time. Will we get back to 2019 levels at all, we think we will. I think we'll see ways for food service to return to the levels we've seen previously. Retail might be a bit more challenging, we are finding ways to supply retail customers, not only in their bricks and mortar estate, but also in their online sales. I think over time, we will see a recovery back to 2019 levels, but it might take a bit of time. Okay. Thank you very much. Our next question comes from Rajesh Kumar from HSBC. Your line is now open. Hi. Good morning. Thanks for taking the questions. Appreciate you giving a lot of color on the phasing of product inflation, gross margin, within what can be ascertained. Just in terms of the freight and labor cost inflation, what is your thinking about the next six months or so? Second one, which is if you think of the shape of the recovery, are there any geographic differences we should bear in mind in terms of what you're factoring in? Finally, on the balance sheet side, you have talked about the receivables and slow-moving inventory provisions. Obviously, they were elevated in 2020 for understandable reasons. In your 2021 outlook expectations, do you expect that to normalize to pre-pandemic levels, 2019, 2018 levels, or have you assumed they remain elevated? These are for you, Richard, again. Sure. Rajesh, look, I think freight and labor costs, as I said earlier, we do see higher freight costs, and we have seen a degree of higher labor cost. Yeah. The freight costs are, in particular, related to the COVID sales. Where we're seeing those increases in freight costs linked to COVID sales, we are passing those on to our customers. I think for us, whilst there might be some headwind on labor costs going through 2021, I think broadly, we'll see freight costs as a pass-through, albeit maybe a little bit of a drag, but broadly a pass-through. Understood. As to the shape of the recovery by geographies, well, you should look there to the end market sectors and their presence in the various geographies. Food service and retail have obviously been mostly impacted. There's obviously a lot of that in the U.K., but also the U.S. Our businesses in the rest of the world are predominantly, particularly that are predominantly safety and cleaning and hygiene businesses. Europe's a bit of a mix. You'd have to look to the end market shape within each geography to get a sense for that. In terms of the provisions we've taken this year and the look forward into 2021, our outlook and guidance does not expect us to see a release of any of those provisions. We are fully expecting those provisions to be maintained through this year, unless circumstances change. As we see it today, we think they will be required through this year. Understood. Just in terms of taking additional provision, you're assuming it's the same level as 2018, 2019 levels? That if you have provided adequately, that you don't have to take a similar size provision again in 2021? Correct. I think as we stand at the moment, we feel the level of provisioning we've got is sufficient to cover the period 2021, unless things change. If there's a significant slowdown again, then maybe further will be required. At this point, we don't see any additional provisions being required for 2021. That's super helpful. If I may just follow up on one more thing. You talked about bolt-on acquisitions and the opportunity set ahead. Are there any returns thresholds or returns criteria you deploy when looking at them, and can that be a bit crippling to the opportunities ahead? I would say that, let's say, if you look at the 172 acquisitions we've done, most of them are well below, let's say, the 100 million threshold. We don't see private equity kind of businesses in that space. Where we do bolt-on acquisitions, we often do this based on relationship. Often no process in place. We have a historical range of paying, let's say 6x-8x multiples, EBITDA multiples. We don't see a reason why that should be changing. Now, if we can buy a larger business, and it's very strategic, we may go a little bit further, but they also come often with synergies or with faster growth. In principle, when you buy these businesses at these kind of multiples, your hurdle rate almost becomes a bit irrelevant because you know you're always on the right side, assuming that the business grows going forward. Understood. Thank you very much. Our next question comes from James Rose from Barclays. Your line is now open. Thank you. Good morning. I've got two, please. The first is on sustainable products. Those customers you've helped switch away from single-use items so far, have those new contracts seen lower volumes overall? Have you got evidence of maybe sort of broader market share gains within those contracts? Secondly, on M&A, slide 31, there's plenty of markets to go into, but I think in the past you've talked about new markets needing to reach a certain level of maturity for them to be really attractive to the group. Are there any areas reaching this or worth highlighting in particular? Thank you. Yeah. Okay. Yeah, on sustainable products, obviously this is still evolving area. Certain areas are more developed than other areas. Certainly in the U.K., followed by continental Europe, there's an increasing interest in sustainability. In the U.S., it's also growing, but it's still quite specific around certain states like California. A lot of interest, President Biden, obviously more interested in the topic as well. We have the three Rs, so reduce, replace, recycle. When we analyze our product ranges, actually the areas that are the obvious products, like straws and stirrers, they can be very relevant in terms of the reduce because you can do without them. If you look at other products, which is the vast majority of what we sell, for instance, in the packaging area, you always have these trade-offs to make. If you're in a supermarket, for instance, sustainability is very important for all the supermarket chains. What may even be more important is the whole food waste challenge they have also. Food waste and shelf life are things that can be managed through good packaging. So far, we haven't seen that the overall impact has been negative. It is still early days, so we're monitoring it closely. What we do know is that when we move to alternatives, and that goes to the R of replace, then the cost of the alternatives are quite a bit higher. Now, these costs will over time come down a little bit, I don't think to the level of the plastics. If these costs come down, then also the cost for Bunzl will come down, so it won't have an issue on the margins. We tend to make slightly higher margins on sustainable products because the availability is more complicated. We are very well positioned to source these items as well. I think, increasingly for me, it looks like an opportunity. On the M&A, I think we always talk about M&A potential if the country or the market is distribution-ready, which effectively means that if there is a need for a one-stop shop. Bunzl is not so much in places where we deliver one or two boxes of items to a customer. If there's a one-stop shop solution there, the market is more developed. Also, if we can run businesses in an ethical way, then we have a market there. That's probably also one of the reasons why we haven't moved to places like Russia because we're not comfortable with that. Let's say the distribution readiness is a key point, and it also needs to fit with our principles. Okay, thanks. We have a question registered by George Gregory from Exane. Good morning. Frank, good morning, Richard. Just three from me, please, two of which are follow-ups. The first, just in terms of your assumptions behind the decline in smaller COVID items over the year, how are you broadly thinking those items will be exiting the year relative to 2019? Are you still expecting that to be elevated on 2019 given the enhanced hygiene standards you referenced? Secondly, I think it was in response to an earlier question, Richard, you suggested that you think food service and retail should eventually get back to 2019 levels, if not in 2021. Is your working assumption there that your penetration will increase to compensate for some industry attrition? Or rather, are you assuming that industry food service and retail activity returns to 2019? Finally, Frank, thanks for your insights on sustainability. I just wondered if you could maybe give us a few examples of what you're doing to accelerate the provision of sustainable products and what sorts of things we could expect to help drive that, please. Thanks. Okay. Richard, you take the first two? Sure. Morning, George. Yes, the smaller COVID orders. I think 2021 is a trend of the base recovering and the smaller COVID orders declining over time. We would still expect those smaller COVID orders to exit 2021 higher at levels than they were in 2019. We've had a very good second half for those smaller COVID orders in 2020, and that's where I would see the decline being more a decline 2021 on 2020, but still ahead of 2019. On the point about food service and retail recovery and the timing of that, look, I think we will see how these markets play out. I think we could well see a mixture of both market recovery and market share gain by our businesses. We have purposely made sure that we have protected our businesses and made sure there's no level of activity or change which undermines their ability to take advantage of any market share gains that could be out there as we go through 2021 and beyond. I think it's going to be a mixture of both. I still think that we can see these businesses get back to similar sort of levels at some stage in the future. Okay. Your question on sustainability, I will try to make it very concrete. A number of things are happening. First of all, we are launching our own brand sustainability ranges. As you know, own brands are good for Bunzl. They tend to be higher margins. It's less transparent in the supply chain. People are really going and buying our brands. When they want to do a tender later on, it's very hard for the competition because we own the own brand and stuff like that. For instance, in Europe, we are introducing this new brand called Verive. We have a fantastic website also there. It comes with products, it comes with consultancy and advisory service to help our customers transition to better alternatives. We have a Sustain range in Australia, was in the example also. Where you normally were dealing with suppliers, in branded suppliers, either on the plastic side or on other areas, we are trying to win a little bit of power in the supply chain by coming up with our own ranges. People really see us as providing the solutions, which is a good thing because it's a complicated area, and we have the knowledge, and we don't have the manufacturing ourself. We are very agile, and we can react. One other thing that is happening also, which is very concrete and very helpful for our customers is, we help them to transition. If you are a customer and you buy hundreds and sometimes thousands of items and raw materials and what's in there, is often a very complicated area. Also, the spend on our products is relatively small, so people don't always have the time to go and really dig into all that detail. We provided technology tools, where we basically run reports for customers and say, "Listen, you currently order 900 items for Bunzl for your 500 locations." We run a report where we classify it in terms of, okay, we have some stores here and some stores in Europe, and they're going to be banned. We need to come up with an alternative. These items are from Verive, or they are sustainable items, they are in the green area. We have areas in the middle where we say, okay, we have some very strong alternatives that are much more sustainable than the original. We're even able to link sustainability scores to the current range that are being bought by the customer. Instead of them doing a lot of work, we go to them and say, "Listen, your CEO put on the website that sustainability is key. You may want to reduce the amount of plastics, or you need to increase the level of recyclable products or renewable products. You don't need to do the work. You should just only buy all the products from us." It goes in the report, and we suggest that your current score, which may be on a scale of 0- 100, you're currently at 25. If you shift these 20 items to these alternatives, your score will move up to 60%. Customers love it. I hope that has been clear. Yeah, that's very helpful. Thank you. Any further questions? Our final question comes from Sam Dindol from Stifel. Your line is now open. Morning, guys. Two quick questions from me. Firstly, on the operating margin, appreciate comments on labor inflation. With the smaller orders sort of holding above 2019 levels and then food service not getting back to 2019 levels, would it be fair to assume the margin won't fully go back to the 7% sort of typical range, maybe slightly above that? Secondly, on M&A, I think you've got sort of GBP 600 million plus headroom to get to sort of the upper end of your sort of guidance range. If you weren't to do M&A for whatever reason, if leverage were to get to a sort of lower level, would you consider more shareholder returns, or would you just keep the capital for the M&A opportunities? Thanks. You take the first one, Richard? Sure. Sam, I think, look, our guidance for 2021 is that for margins to return to more historical levels. For us, that is obviously in 2020, that was 7%. I think that's where we feel the year will end up as we go through 2021. Okay. Then on the M&A sort of capital allocation, you mentioned the number of GBP 600. I think it may be a bit higher than that. I do appreciate that our net debt to EBITDA was low at 1.5. It's also been impacted by the EBITDA part of the net debt to EBITDA. We see a lot of potential still for acquisitions for many years to go, and it can be a bit lumpy. 2017 was a bit higher. Last year was a good year. The key success factor in our acquisition story is really discipline. We want to make sure that we buy the right businesses. It's very difficult to predict exactly when you buy these businesses. With the potential out there, we really prefer to use the cash for buying good acquisitions. I think it gives a much better value development for our shareholders as well. We need to sort of stay open-minded, but I would be disappointed. I rather spend the cash on buying good businesses and consolidating our markets further. Thanks. We have no further questions, if you'd like to continue. Thank you very much for all your joining. Thank you. Have a nice day. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.