Sustainability becomes increasingly important for society, and business will have to play a key role in this. What does that mean for Bunzl? Will this be a new area of competitive advantage? Will it be supportive to our growth? How important is packaging within our overall portfolio? Are there some hard data available? What is happening with the Bunzl value proposition? Is Bunzl's competitive position improving further over time? Bunzl delivered some excellent growth over the last decades. What is management's view on the transition out of the COVID period? More importantly, what are the views longer term for the future? What are our expectations around acquisitions? Is there still sufficient runway for growth by acquisition? These are some of the questions that we plan to answer this afternoon. My name is Frank van Zanten. I'm Chief Executive of Bunzl, and I'd like to welcome you to this Capital Markets Day in this beautiful location, the Science Museum, and I'm very glad that you were able to join us here live in the room. Also welcome to the people who are joining us online. We put together a really exciting program for this afternoon. Halfway, around 3:50, we planned a 10-minute coffee break. Then at the end, we will finish with Q&A, and we're hoping to be finished about 5:00 o'clock. Those who've joined us here in person, we hope you will join us for drinks in our Future Planet exhibition downstairs, and we'll guide you there. Our teams will be available to answer your individual questions. We do also have an exciting product display over there, like a mini exhibition. We will bring to life all the kind of things we will be talking about this afternoon. Those who've joined us online, you can submit your questions, but you also will be able to view the products online just like we're doing here in the rooms. Let us make a start. I'd just like to start with reminding you of the scale of Bunzl. We're a GBP 10 billion business in 31 countries, operating out of 150 operating companies with more than 700,000 customers around the world. These have many more delivery addresses. If you think about the Compasses, the Sodexos, the ISS. We supply essential products and solutions to our customers on a just-in-time basis. They're essential for the process for the people to run their businesses. We are effectively the warehouse of our customers. We are not only a distributor, we are a highly value-added distributor with a lot of expertise. More than 6,000 external and internal salespeople helping our customers every day with their bespoke demands. We are mostly organized by customer sector. People working on our healthcare division are talking the language of the doctors and the nurses, and the same applies for the people in the hotel and the catering divisions. We do understand what our customers are looking for. Whatever the customer wants, we offer tailored solution. Wow, that's an exciting video, isn't it? On the presentation today, our day is split roughly in two parts. The first part is all about our value-added business model. How do we improve our offer constantly? Sustainability is a key part of this topic. We have our 15-minute break, and then we focus to the second part, which is our exciting compounding growth strategy. We will be touching on expectations for the group going forward as well. Today, you will be meeting a number of our senior executives, and the group is split roughly in two parts. We have a group of people who are slightly joined recently. The group, which is Richard Howes, our Chief Financial Officer, Diana Breeze, next to him, our HR Director, and James Pitcher, our Sustainability Director in the center. They all have about two- three years with Bunzl, which was interesting, obviously, so a large part within the COVID period. Alberto Grau, who is running our Continental Europe business, is with Bunzl about 15 years. The rest of the team, all more than 20 years of service. Andrew Mooney is responsible for our corporate development team, making all these acquisitions over time. Jim McCool is running our North America business. Andrew Tedbury is responsible for the U.K. and Ireland. Helen Cockerham is heading up our food and non-food retail and healthcare division in the U.K. A high-quality team. There's a lot of expert knowledge within that team, and altogether, more than 150 years of Bunzl experience and about 150 acquisitions as well. Starting now with our value-added business model. Firstly, I'd like to talk to you about our local customer-focused business model. Local with all the central scale benefits from our global scale, very important. What's also very important is our entrepreneurial spirit. You can best compare Bunzl with a large family business. Culture is really around improving things every day and acting local, being very responsive. We've seen that during COVID as well, but with these great global benefits, and these support the great results that we have made and will be making going forward. Bunzl is absolutely not one size fits all. It is all about offering bespoke solutions to mainly medium and larger scale customers. We offer broad ranges of essential products in our programs, and we tend to have 10,000, 20,000 different items in an operating company. We supply our customers on the base of very high on time in full. If the customer expects it to be there at 6:30 in the morning on Friday, we will be there delivering all these products in one go. We are effectively the warehouse of our customers. We have about 6,000 sales expert in our business. I just touched on if you're working in a hotel, in the external and the internal sales team, they know the language, they talk the language of our customers, and the same within healthcare or in construction or industry. Very important. These businesses tend to be very focused on certain sectors, and most of our competitors are also organized on that basis. Expertise is important, and this also is very relevant in terms of what we're now seeing in terms of fast developments in sustainability. We are ideally suited to deal with these requests and offering solutions. Competitive prices are also important. Again, this is good for Bunzl because we are the largest customer of our largest suppliers. People like Essity, Kimberly-Clark, Ecolab, Diversey, we are the largest customer in the world. On top of that, we have our own sourcing functionality, sourcing office in Shanghai, which is unique, and we'll touch on that. My colleagues will talk more about that, as well. The Shanghai operation is very important, and we've seen that during COVID also, it's effectively an unmatched ethical proposition we have. We make sure by auditing more than 98% of what we buy in Asia, that we can offer us security around the way the supply chain works. No child labor or other zero tolerance items. Again, you heard me talk about IT and digital a lot, very important in the context of Bunzl. This is a way to make our businesses more efficient, but also to make the relationship with the customers become even more sticky and build it even more on the longer- term, to create this silent, smooth process with our customers, and makes it very hard for them to move away from Bunzl. Our markets are local. Very important to realize. We are by far the largest in our fields, but our markets are local, our competitors are local, and our customers are local. Even if you look at some of the global customers we serve, like Sodexo, ISS, or Compass, they still have their country organizations with local budgets and P&Ls, and we need to serve them, if it's in Denmark or in France or in Spain, in their own language, often specific product ranges. Our products don't travel very well, so they are bulky, low value, so suppliers can differ, product ranges can differ, and we help them on a local basis. We also compete with local competitors. People who are in the Netherlands or in the U.K. or in France, Spain, or in Australia, are completely different competitors. By the way, these competitors are also the targets for us to buy going forward. Andrew Mooney will be talking about the opportunities we see in that area as well. Our scale offers benefits, and these benefits contribute to the local competitive advantage of our businesses around the world. You can think of sourcing with branded suppliers. You can think of our import benefits from our business in Shanghai, our ability to build own brand ranges. Alberto Grau will be talking about Verive as well, the sustainability range. Obviously, the way we scale up our technology platforms, and make that available for more than one business around the world is also very important. Last but not least, something we'll focus on today also, how do we use sustainability and our sustainability experts, concepts and reporting and data to create another added value and competitive advantage? As you all know, the pandemic was a challenging period, but Bunzl has done extremely well. Our local approach and responsiveness has been very important, and that came through this decentralized organization, and we delivered exceptional results during 2020. Our businesses all had the critical supplier status. We were supplying healthcare organizations, governments, and everybody who needed masks, sanitizers, and gloves, with these products, and they were in high demand. You may remember situations in March and April on television every night about how do we get gloves? How do we get masks? We were very well positioned to deal with that kind of situation. That was mainly for two reasons. The first reason was that governments got involved in this. Large healthcare organization, but also government said, "Listen, we need to step in. If we want to make sure that our healthcare sector continues to go, we need to make sure that we are sourcing masks and gloves and other products. We're going to step in here." Now, the problem you have is where these products are all being manufactured in Asia. The Asia suppliers were simply asking large prepayments. We've seen orders of GBP 1 million, GBP 10 million, sometimes GBP 25 million, very large orders in that time from governments and other people. It makes a big difference if you are Bunzl, a FTSE 100 business with a very strong balance sheet, it makes a big difference to make a prepayment of GBP 10 million, GBP 15 million. Very big difference towards giving large amounts of money to somebody at the corner of the street that you don't really know. That was one big benefit. The second benefit, we've all seen the stories in the newspapers about large quantities of PPE sourced by new people that basically had to be thrown away. I know in the U.K. and the Netherlands, hundreds of millions of GBP had to be destroyed because the quality was not good. Bunzl, with its own supply chain in China, our own office in Bunzl Shanghai, was able to send our own people to the factories who were producing the masks and the gloves. They were actually standing next to the machines, checking the quantities and the qualities. Before, in the beginning, it went into planes, because it had to come very quickly. We were able to secure that not only the money was safe, the prepayments, but also people were confident that when they were ordering, let's say, GBP 10 million, GBP 20 million of products, that the quality was also in good order. I think we made a great impression with a lot of our customers, and some of them were new. The people in our business make the difference, and our local approach and the very agile reactions are key also because they have to respond to what is out there. Just to remind you again, we are a specialist added value organization. I've been talking to you about this for many times. Very close to my heart, the whole area of the digital acceleration, now sustainability, but also innovation. Our team will share with you some concrete examples this afternoon of the really great progress we've made. Please welcome Alberto Grau, who heads up our Continental Europe Division. Thank you. In Bunzl, our typical customers are medium and large companies. Normally, they have complex procurement processes. They have multi users. Historically, a key pain point in the customer journey has been the ordering and reordering process. We have been focusing on digitizing this process, right? Today, more than two-thirds of all the orders that we receive are placed digitally without manual intervention. However, what makes our customers really stickier is the additional value-added services that we provide beyond streamlining the ordering process. I'm going to give you some color with a couple of examples. We use product selectors to help our customers to find the right product for the specific application. This is very relevant in the safety space, where the products are a bit more technical. In the Netherlands, our safety business has developed a shoe finder. We guide our end users towards the right protective shoe through a series of questions regarding working environment, weather conditions, or level of risk, and propose the right product for the right need. By doing that, we have been able to reduce the number of returns, to increase the customer experience, and to collect very valuable data. We also develop what we call dynamic dashboards. They are business intelligence models where the customer can customize their queries, extract information for them to make better decisions. Last year, a key retailer here in the U.K. was able to save quarter million pounds just by optimizing the level of spend across similar sites in different geographies. We are currently testing recommendation tools. These are applications that based on historical data and artificial intelligence, we can anticipate the consumption of our customers. We can tell a quick service restaurant here in London what is going to be the consumption next week in the outlet in Marble Arch. By doing this, what we are doing is we are having a step- up. We are helping our customers to predict the future, in addition to help them to explain the past. By developing this kind of value-added services through technology, we are able to enhance our competitive advantage and to increase customer retention. Helen, over to you. Thank you, Alberto. Hello, everybody. It's our ability to be able to work with our customers and our suppliers to offer product innovation. That's where Bunzl adds significant value. We work really hard to make sure we understand our customer needs and their challenges, and then we work with our partner suppliers to make sure we're absolutely delivering them products that they can make consistently and cost effectively. It's an iterative process. We will look at a number of suppliers, products, options, and samples, first in our technical labs, and then we'll move those through into a retail test environment. We have dedicated and scheduled innovation sessions with all our large customers, and that's about talking to lots of customer stakeholders. Not our usual contacts in procurement, definitely those people on the shop floors, the retail operations, the bakers, the cleaners, the people making the pizzas. Also the sustainability teams, the compliance teams, the loss prevention teams, the brand and marketing managers. We're looking to create and develop products that meet all of their needs. We've got lots of great examples of product innovation. We've recently worked with the Co-op. For the Co-op, we're using lots and lots of plastic stretch film, which they were wrapping around their cages when they were distributing their food from the distribution centers into their shops. We worked with them to look for a more sustainable option, one which absolutely made sure that the food got there in one piece and not damaged, and that their operatives could use, but also something that could be reused. We developed a reusable clip-on cage cover, which is made from sustainable materials, and it's now in trial in all the Co-op supply chains. Over the last 12 months, we've worked with one of our partner factories in Vietnam. They make bread film for us, the stuff that wraps around our fresh products when we go into instore bakeries in our grocery stores. We worked with them to develop a film that had 30% pre-consumer recycled content, and we managed to do it at the same price that they were paying for virgin material. The other big thing about that is if we can get a high content of recycled content, then it helps our retailers to mitigate the upcoming Plastic Packaging Tax. There's an example as well on the slide in front of you. One of our other grocers sells hot chickens through their rotisserie counters. We used to supply them with a chicken dome, which had a black plastic base and a clear lid. It was a very bulky product, quite difficult, actually, to carry the product home. Not very clever when it came to being able to transport that effectively. We worked with them to make sure that we developed a chicken bag that did the trick in terms of the preserving the heat, making sure it didn't leak. We even made a handle so that the customers could carry that home. More importantly, it was more easy to recycle, and it was much less bulky to transport, so a lower carbon footprint. More bags in the box, more boxes on the pallet, less trucks therefore required to be able to deliver that product to our customer. That's in stores today. We're actually working with them now again to try and add some recycled content so that when the Plastic Tax comes in force, we'll be able to help our customers to mitigate that cost. When I talk to my customers in my retail environment, the one thing that they say to me is our ability to be able to collaborate and listen to them and translate that into something that suppliers can supply, is something that they really like and one of the reasons that they choose to work with Bunzl. I'm going to pass over to Jim now, who's going to share some more ideas on things that we've done to innovate. Thank you, Helen. While it's certainly natural that we focus on the value that we bring through our products, the value that we bring our customers goes well beyond the products. We provide a broad range of services for our customers. We help support them with training for their teams. We help audit their operations. We provide actionable insights through our data. We update them on trends in legislation in the market, which is particularly important now with sustainability. In short, we provide a broad range of services which complement our broad range of products. A great example of that is a product that we have in our Canadian cleaning and hygiene business, WandaNEXT. WandaNEXT is a digital platform that ensures cleaning and hygiene protocols and compliance, allows for reduced consumption, increased labor efficiency, and an overall better experience for our customers and their cleaning systems. On the right-hand side, you see our ConfidentClean system, which is a protocol that we use in working with our customers. Our sales professionals will go out, they'll work with our customers to assess their needs in a particular location. They'll help design and implement the range of service and products that are necessary to meet their needs. They'll continue to monitor it to allow for optimization and validation of the assumptions. Before WandaNEXT, that was all done very manually, and it was done really looking in arrears. The assumptions for the cleaning people were that the historical usage would be tomorrow's usage, and that's how they were able to manage their systems. What WandaNEXT does is it comes in and it overlays this system and allows for real-time predictive analytics and digital insights to allow for this enhanced system. Let me give you an example. You're in a large airport, maybe there's 100 restrooms. Each of those need to be serviced on a regular basis to ensure that you have the proper levels of inventory as well as it's up to appropriate cleaning standards. Typically, in the past, the cleaners would be deployed on this rotation. Wanda brings predictive analytics in. Right? It has tools that allow for a count as people come in and use the restroom. If there's higher demand than normal, the cleaner will be notified on their app on their phone that we have an increased demand. That allows them to get ahead of it before there's an outage. If there is a situation, if there is an issue in a restroom, the customers have the ability, via digital touch screen or by using their phone with a QR code, to send a notice of a need for service to that cleaner and allow the, again, to allow the cleaning team to be able to react more quickly and to get ahead of it so that the customer has a better experience. This is a system that was developed in Canada, it's now being trialed in the U.K., in Belgium, and in Australia. It's a great example of how an investment that's made in Bunzl in a very decentralized way can be shared across the business to add value for all of our customers. Again, WandaNEXT is a great example of how we use technology to deliver value over and above our products and can include it as part of a bundle service. Andrew is going to come up and share with you how we add value via sustainability. I wanted to talk about a new customer that's been secured by Bunzl Cleaning & Hygiene Supplies in the U.K. That's a customer called Andron. They're a large facilities management company. I wanted to just talk about some of the key factors that allow Bunzl to secure that business away from its incumbent. One of the key factors was our branch network. We have a large selection of branches around the U.K. that offers a fast and reliable and accurate delivery service to over 1,000 customers' sites. Our uniformed delivery drivers provide a personalized service which wasn't available through the incumbent who used carriers. Our ability to be able to locate the product, for instance, on the cleaning shelves of the cupboard that the cleaner uses. The Bunzl Cleaning & Hygiene Supplies business also undertakes quarterly innovation days. These are days where we showcase products for cost and labor and sustainable alternatives. This was really important to Andron because they could use that information to discuss that with their customers in terms of their credentials going forward and secure more business for their business. Our digital offering, not only the usual budgetary controls that allow you to control spend, either by user or by site, but more importantly, we were able to tweak and tailor the range that was procured on the web. For instance, this cleaning company, this FM company, provides services to hospitals, and it cleans offices. They're completely different product ranges. We worked with Andron to make sure that they procured the right products for the right site. Very important for them in maintaining standards and controlling costs. Lastly, our digital offer provides documentation in the way of cost data sheets, which allows the cleaner to download that information on the product so that they're safe and compliant when they use it. We also worked with Andron on a carbon optimization plan. What does that mean? That means we used their data, and we used our data to analyze what they were buying. As a result of that, we were able to increase our drop size and reduce the frequency in which we deliver, both of which reduce the carbon emissions for both us and the customer. Something very important in them reaching their carbon credentials. Finally, we worked on a closed loop solution. The customer was buying a five-liter cleaning solution that was delivered to their sites, and when it was used and empty, our branch network, our delivery drivers, collected that used five-liter container, returned it to the branch network, and then it was collected by the manufacturer, taken back to the manufacturing plant, cleaned, washed, and then reused for other customers, helping that closed loop solution. I think all in all, bundled together, this very quick response to a single customer, quite unique and something I think that is growing, this sustainable proposition that we can add value to our customers going forward. Thank you. Frank. Thank you, team. Well done for sharing some great examples of the unique Bunzl offering. Our value-added approach has driven great successes, as we just heard. Increasing this added value will further improve our competitive advantage. One of the rapidly increasing Bunzl competitive advantages is around our sustainability solutions and approach. Let me talk you through this, which is something that I'm very passionate about. Focus on sustainability is not new for Bunzl. I remember in 1994, in our family-owned business, we had a cup care system where we effectively collected used plastic cups and had them recycled, and ultimately, they ended to become a garden chair outside. Making a contribution to a better world is very close to my heart, and it's not only about our own business, but we are also in a unique position to help our customers to achieve their goals. That requires expertise, data and information, obviously, new product ranges that we'd like to develop within our own brands. Bunzl is a unique trusted partner, we are completely material agnostic. We are not a manufacturer, we can genuinely advise our customers the best solution for what they want to achieve. That is why sustainability is so core to how we do business across the group. Couple of years ago, we undertook a materiality assessment process where we spoke to customers, we spoke to suppliers, we spoke to our own people. We also spoke to investors, we asked them what they believe are the key areas were in the whole sustainability area where we should be focusing on. It gave some fascinating results. Clearly, there were four clear conclusions, clear focus areas for us to work on. The first area is about our responsible supply chain. We touched on our operation in Bunzl in Shanghai, where we have about 50 people working on sourcing, but also auditing our suppliers. We have more than 98% of what we buy from Asia is covered to our own internal audit function. The second area is obviously further action on climate change, and we'll talk about that in the rest of the presentation, what our commitments and ambitions are in that field. Obviously, focus on diversity, ethnicity, and talent, very important part within our business. We are a people business. Last but not least, it is all about providing these sustainable alternatives for our customers. Identifying what they should be transitioning, we should be ready, and are ready, and become increasingly ready in terms of providing them with wide ranges of alternative products that either are recyclable or compostable alternatives. As I mentioned, sustainability is not new. We opened our Asia sourcing and auditing function about 13 years ago. It's already seven years ago in the U.K. that we rolled out a wide program of sustainable products under our own brand range. We also reduced our carbon emissions in the last 10 years by 50%. Given our close relationship with our customers, we have the ideal opportunity to help them move towards a better world. It's at the heart of everything we do. As time progresses, we are going to decarbonize even more aggressively in line with Science-Based Targets as new technologies become available. We will become ultimately net zero in Scope 1, 2, and 3 by 2050 at the latest. We've expanded our own brand sustainability ranges, like Verive, but we also expanded our experts in sustainability around the world to help us support our customers in their sustainability objectives today, tomorrow, and beyond. Bunzl provides solutions. Our global scale, vast experience, flexibility, and unwavering passion means we're perfectly placed to help build a better world. Proactively working to solve the problems society faces both now and in the future is what we do. Whether that's helping our customers innovate or improving the way we do things to be more efficient and responsible. Partnering with communities or stakeholders to make a difference. We understand our role as an influential leader in the transition to a more sustainable and equitable future. We have identified four key focus areas where we can have the greatest impact. The impact of our business goes far beyond people, premises, and vehicles, and our obligations do too. We believe that everyone is entitled to safe and decent work. Our unique sourcing and auditing function based here in Shanghai allows us to have a thorough level of oversight over our supply chain. This is a competitive advantage in our industry with our 50-strong team regularly auditing direct suppliers to ensure that the products they manufacture are of the highest quality and they are treating their employees fairly. This means building solid and lasting relationships with our suppliers, providing them with support and guidance, as well as monitoring their social performance. We consider our suppliers to be our partners and strive for them to feel the same about us. Our solutions significantly reduce road miles and minimize both ours and our customers' carbon footprints by consolidating multiple items into single mixed pallet deliveries. We're also playing our part by cutting emissions across our own business because it's critical that we support global efforts to limit warming. We're setting a new long-term target to reduce carbon in our operations in line with climate science. We also recognize the importance of low carbon transport for our sales teams and distribution networks and are reducing the impact of our vehicle fleet. Our scale means that we can drive change quickly and are well-placed to provide our customers with clear and trusted advice on complex issues. Our material agnostic position means that we are well-placed to help customers transition to a more circular economy because we know the life of packaging does not end at the point of sale. We offer our customers expert advice on sustainability as part of our service to them, effectively becoming a consultant or advisor on some of the issues they face. Our businesses have also developed tools that use the data we have on our packaging and products to help customers track the progress they are making and review the alternative options they have. We are working closely with our customers and suppliers to lead the industry towards a sustainable approach on packaging and plastics. We've been innovating the way our packaging products are designed, as well as bringing an extensive range of own brand sustainable alternatives to market. These new ranges provide solutions which comply with the latest legislation in our markets. We also offer leading sustainability advice and training via new digital platforms. Everyone has a right to prosperity. We are accelerating diversity, inclusive employer practices, and investing in local communities. People are fundamental to our future success. Our 150 businesses around the world are deeply embedded in the places where we operate. Our focus on inclusivity and talent development is key to fostering a strong and positive workplace culture that will support our successful partnerships. We are in a position to drive powerful changes. For our people, our customers, and the world at large. Stepping up to this challenge will continue to be central to the growth of our business. We are committed to playing a pivotal role in the journey to a more sustainable future. Today Tomorrow Beyond. Bunzl has a very good story to tell in terms of the shift to alternative materials. First, we have very limited exposure to single-use plastic products where the volume is expected to decrease. Second, the transition to alternative materials will have a positive impact in the future, and we have made a good progress so far. Third, we are seeing our customers increasingly interested in engaging with sustainable supply chain partners like Bunzl. Hello, everyone. The majority of Bunzl's revenue comes from what we have classed as non-packaging products. Our customers' operations depend on these. They're essential to their everyday options, and quite often in certain sectors, there is no viable alternative to plastic. We don't, for example, receive many inquiries from the safety sector for a cardboard hard hat. These products don't typically face the same legislation, consumer pressure, and aren't coming under the same level of focus from our customers when they set targets to reduce plastic or increase circularity within their operations. Today, we're going to take you through a section where we focus on our packaging and consumable products, the smaller proportion shown on this graph, and show you how we've been leading the transition to alternatives in that category. Before we get into the detail, I wanted to pause and talk a little bit about Bunzl's role in the circular economy. Last year, we conducted a wide materiality assessment across a large number of our stakeholders. We spoke to more than 30 global customers, and we asked them what they expected our role in the circular economy to be, and the four bullets in the center of the slide show the feedback that we had from them. Our customers expect us to help them make smart material choices. That is selecting the right materials for the job. That is often helping them select the materials with the lowest total environmental impact, and also provide them with expert advice when material change is necessary, perhaps enforced by legislation. Secondly, when they are expected to make a change or want to make a change, they need a full range of products available to them that are designed for circularity. Single-use consumable products that are compostable, recyclable, or made from a renewable resource, and reusable products that are designed to be used more than once. Thirdly, where a certain piece of packaging or a certain material is necessary for the job and needs to be used, they like to work with us to rationalize the usage to help them use whatever material they use really efficiently and consider new innovative solutions like reusable products where they would have used single use previously. In terms of closed loop solutions, our customers were quite clear. They don't expect Bunzl to become a waste management company. They don't expect us to set up closed loop solutions as part of our broad offering to our customers, they do expect us to be able to support the closed loop solutions that they are developing. A good example is what we've been working on in Eastern Europe with Tesco. Across the Czech Republic, Slovakia, and Hungary, we collect film-based plastic from Tesco stores. We take them back, it is recycled into the reusable carrier bags that are then distributed back to those stores for customers to use. It's a customer-led initiative, it's one that Bunzl supported to make a success. Our customers rely on us to deliver these things for them. They need our data on packaging and products to be able to report effectively and to demonstrate the progress that they're making against their targets. They need our own brand solutions when they want to transition, because it allows them to do that in a really cost-efficient way. Lastly, they need our advice in the first place to make the right choices when it comes to their packaging, as some of the examples you've already seen today have shown. When I talk about packaging and consumable products, that blue section on the pie chart that we've just looked at, I'm talking about these four categories, and we've used our judgment to place different products and packaging into these four categories, and I'll take some time to explain them before we go into the data itself with Alberto. We offer a huge range of solutions that are tailored to our customers' needs, a mix of branded and own brand solutions. Like you've seen on the video, some of you will be familiar with and will use every single day. When it comes to these packaging categories, there are two things to bear in mind. The first thing is that we've applied these categories in a blanket way. Where we say a consumable product is facing regulation or restriction, we are assuming that the same regulations that we see in the U.K. and Europe apply across the whole Bunzl Group, and we've put all of those packaging products into that one category to keep things simple. Secondly, all of the categories shown here contain plastic items. Plastic that is widely recyclable is the plastic that goes into category four. For a plastic item to go into our Alternative Packaging and Products category, it has to be widely recyclable and/or made from recycled content. I'm just going to run through the categories briefly before we go into the detail. Number one, consumable products facing regulation. These are the single-use consumable plastic products that are most commonly being banned or restricted in our markets. A plastic straw, a plastic cutlery, plastic bowls. Category two are the consumable products that are facing regulation and not restriction, where we are seeing a healthy level of transition to alternative materials, and where our ranges of things like reusable carrier bags are helping incentivize customers to move away from the single-use plastic products they would have relied on in the past. The third category is packaging with an important purpose. This is packaging where plastic may well be the best material for the job, where an alternative material is not yet available in terms of the amounts, or has the same properties that the plastic would have applied before, or where transitioning a single-use plastic product to an alternative product would cause significant unintended consequences, like higher food waste. The alternative category is any piece of packaging or single-use product that we sell that is recyclable in accordance with national regulations, compostable, reusable, or made from a renewable material like sugarcane or paper. The following slide shows data from 2019, because the last 18 months have been disrupted by the pandemic. The important thing is almost 2/3 of the total revenue comes from non-packaging products. Of the remainder, 36%, half of that has already been transitioned to alternative materials. We are leaving with 80%, and out of this 80%, 1/3 comes from what James has mentioned, products with an important purpose. Only GBP 0.2 billion out of the GBP 9.3 billion we had in 2019 corresponds to products facing a regulation. I think we are leading this transition and we are very well positioned to benefit from this shift. I'm going to dig deeper into the first two categories. The first two categories represent 12% of our total sales. Products facing regulation and products that are likely to transition in the coming future. We expect the rate of transition will be accelerated as the new regulation changes. In Continental Europe and U.K. and Ireland, so the whole Europe, product sales from products facing regulation, so 63% of these sales, have already been transitioned to alternative products, well ahead of the regulation. In the second category, more than one-fifth of our total bags sold in the world are paper bags. In the U.K., almost 70% of the carrier plastic bags are today recyclable, reusable, compostable, or made from renewable materials. This excellent progress has been driven by solution developed by our operating companies in the sectors of foodservice, grocery, and retail, and with three main axes. The first one is we have developed one alternative, at least one alternative, for any of the products in these two categories. When we go to a customer, we always offer at least one alternative product, one sustainable alternative product. The second is we are launching and enhancing our own brands to encourage transition in a profitable way for our businesses, and we support that with investment in marketing. The third, we are developing our own tools to manage the packaging data of our customers and to show them the impact the new regulation has in their own portfolios. It's a very good selling tool as well to promote alternative products. We have the right capabilities in place to lead this transition and to make it a source of competitive advantage and a driver for organic growth. We have a unique position in the supply chain. We are in the middle of the supply chain. We don't have any production capacity to fill in. We can change supplier from one day to the next, basically. This flexibility, along with our scale, put us in a privileged position to provide our customers with, one, objective advice in complex sustainability issues and, two, a wide range of products that meet their specific needs. In Continental Europe, in the years 2018 and 2019, products facing regulation, the sales of plastic product came down by 13%, and alternatives went up by 31%. The total sales went up by 3%, and the cash margin was increased. Our higher prices of sustainable products, in addition to the increase in market share, more than offset the reduction in volume. And we expect this trend to continue. Over the last three years in Continental Europe, we have built a strong team of sustainability experts. We have a central team in Amsterdam, and we have what we call sustainability ambassadors. We have 25 sustainability ambassadors to engage locally with our customers and along with our sales teams. Sustainability is fascinating because sustainability has allowed us to engage with our customers in a completely different way. We are moving from talking about pricing with purchasing people to talking about solution with the head of sustainability, who, by the way, today, has a very important role in the strategy of the company. This year, we have increased significantly the engagement with our customers, thanks to an initiative we have called Single-Use Plastic Academy. We are sharing our knowledge, our expertise with our customers. We train them around the Single-Use Plastics Directive and the impact this directive has over their specific product portfolio. Not only has been very well received, but our first initial assessment tells us that we have increased significantly the transition towards sustainable products and has brought additional business. When someone asks me, "What do you sell in Bunzl? You sell a lot of things." I always reply, "We sell essential products for our customers to operate." It's as simple as that. We normally supply low cost, high impact products. Products, without them, our customers cannot operate. A car manufacturing plant cannot operate without protective gloves. The Starbucks cannot open the store without a coffee cup. Our customers rely on us to manage these products and help them to focus on their core business. This trust is very important when they need to make a change, and this is what is happening now with the sustainability. Back in 2015, when the Plastic Bags Directive was put in place, all the state members in the European Union, it was mandatory for all the members to introduce measures and incentives to reduce the number of plastic carrier bags. Grocery has been always leading from the front when it comes to setting ambitious sustainability targets. All the different brands have different approach. We don't have one doesn't fit all in this case, right? Since we are not wedded to any materials, we are very flexible to tailor solutions to each specific customers. We can provide with products that are aligned with the way they want to individually communicate to their customers their strategy and their progress. Sales in sustainable carrier bags during this period, 2015, 2019, increased by almost 50%. We were reversing the mix from plastic to alternative 60/40- 40/60 in favor of alternative. Our total sales increased by 2%. Nearly a quarter of Bunzl's revenue in 2019 came from these two categories, packaging with an important purpose and packaging and products made from alternative materials. That's 68% of all the packaging and products we sold. As part of leading the transition to alternative materials, we're working to improve everything that we distribute, whether it's made of plastic or not. We're working to increase recycled content. We're reducing the amount of material that's used. We're increasing the recyclability of the packaging and products that we sell. We're introducing new innovative materials that help people compost products at home and products made from interesting materials like seaweed and algae. Despite a lot of the packaging that's in the orange category on the left serving that important purpose, we're still working across the business to transition as much as possible to alternative materials that are more suited to a circular economy. 51% of the packets and wrappers, an example of that would be the chicken bag that Helen showed you earlier, have already been transitioned to materials that are recyclable, compostable, made from renewable sources, or are reusable. I've got a couple of slides now where I just wanted to touch on some of the decisions our customers make every day when working with us, and how we provide them with the advice that they need. Containment, preservation, protection, material availability, effective marketing, convenience of use, and budget are all key considerations for our customers when they're choosing a piece of packaging. That's before you get onto sustainability. There are trade-offs with all forms of packaging, and it's not as simple as saying plastic is bad and everything else is good. If we look at fresh food packaging, fresh food packaging retains quality and reduces waste. It preserves the cold chain, keeps things on the shelves for longer, and it keeps food fresher for longer in our homes. Food waste, if it was a country, would have the third highest carbon emissions of any country in the world. Packaging plays a really important role. That's not to say that that packaging can't be improved. The example on the left-hand side showing different options for fresh food packaging is one that we'll finish on the next slide, and it's a live example of something we worked on with a customer. If you look at the material that's being replaced, expanded polystyrene, it's lightweight, it prevents bacterial growth, it's cheap, but it's notoriously hard to recycle. Let's look at some of the alternatives. Let's look at rPET, and I'll tell you what that stands for when I've had a glass of wine later. rPET contains recycled content. It is widely recyclable. It has excellent display properties and availability, but it has a non-sustainable appearance. It looks like plastic. It is plastic. Let's look at bagasse and cardboard. They look sustainable. They're compostable. They can be recyclable. They're very costly, and increasingly, they use chemical coatings that plastic packaging doesn't need that are now starting to be restricted or banned in markets because of health concerns. When a customer comes to make a change, these are the type of discussions that we get in with them, and it's that independent advice that makes us stickier with customers and brings our business commercial benefits when they decide to make a switch. I mentioned briefly earlier how we're helping customers rationalize the materials that they use. Pallet wrap is something that's used by a number of our customers to protect goods in transport and prevent waste. We're working with a customer in Australia to introduce new technology, new efficient wrapping methods, and actually just talking to them about the amount of materials that they're using to wrap a pallet of goods. In doing so, we've achieved a 70% reduction in the amount of material that they used on an annual basis. Moving on to food containers. Food containers represent half of the packaging that we supply in Bunzl. In North America, we've made fantastic progress with transitioning takeaway food containers and fresh food packaging containers to alternative materials, such that nearly three-quarters of all the food containers we sell are recyclable, compostable, renewable, or reusable. A crucial material in achieving that is widely recyclable plastic, and nearly 75% of all the products that are in the blue category shown in that graph are PET or rPET. The key point there is that widely recyclable plastics are going to play a really important role in helping every customer and all the brands who are setting targets achieve the industry-leading ambitions that they have and achieve the Pact targets that they're commonly signing up to. The example on the right follows the previous slide, where our customer in Belgium wanted to look at an alternative for expanded polystyrene. After a full review of all the alternatives that were shown on the previous slide, we transitioned 39 million expanded polystyrene trays to a recyclable solution made from nearly 100% recycled content. The customer's decisions were made on the fact that they were assured about the product's food contact safety, and due to the quantities that they needed, the material could be produced and was available at the level they required. We like to help our customers transition and make those decisions based on science. We don't knee-jerk, and we hope by doing that, we avoid any unintended consequences when moving from one material to another. We have seen that our own brands help us accelerate the transition, and they are normally associated with increasing cash margin and increasing sales. A good example of that is our brands Sustain and Revive. They are U.K. brands that have been adopted by our Australian business. Last year, our Australian team was able to convert 13.6 million of single-use plastic of a key customer into sustainable alternatives of these brands. By doing this rationalization of the products, they were able to grab additional business worth GBP 6 million. What is important here is having these own brands help us as well to increase the share of wallet. They estimate that in the following five years, they will double the sales of these own brands. Our agnostic position in terms of material in the supply chain allow us to be flexible, as I said before. In the Netherlands, we engaged three years ago with a key supermarket. They wanted to remove all the single-use plastic carrier bags, and we offered different alternatives. Finally, we came up with two options. One option was a reusable nylon bag that would be charged to the customers, and then a single-use plastic made by sugarcane that would be for free. They adopted these two solutions, and successfully, they were able to remove 14.4 million single-use carrier bags in the last three years, and our turnover increased by 90%. Finally, transitioning customers is not just about products. In the middle of this year, we have, in the developing continent of Europe, a new own brand, which is called Verive. Verive comes from veritas, truth in Latin, and has three main values, which is transparency, education, and innovation. It's the first time that we have consolidated one single brand across a diverse area as the continent of Europe with 15 countries. We are now working on expanding the range. You will see downstairs some examples of this range, and roll it out across all the countries. We expect to do that in the coming year and a half to complete the full rollout. We haven't only launched this range. We also have developed a specific website to provide knowledge to our customers, to share our knowledge with our customers, to provide the expertise. Right? In addition to that, we have also developed a dedicated web shop, an additional online channel to approach smaller customers that really care about sustainability. Right? Own brands allow us to accelerate transition, allow us to increase sales, and allow us to increase cash margin. Expert advice is normally key when customers want to sign up to lead in industry commitments like Ellen MacArthur. In the United States, we engaged nine years ago with a top food processor, right? We helped them to develop clam shells made with 80% of recycled material. By doing that, this customer was the first food processor in the States to sign up the Ellen MacArthur commitment. We recently have developed an in-house printing department where we print washable and recyclable labels for the 300 million clam shells they sell every year. Providing data and analytics to our customers that they need to really understand their position against packaging requirements, against packaging commitments, has become a competitive advantage. We developed what we call material footprint analysis. This is a tool that has mainly two outcomes. The first one is we show the customer what is the impact of the legislation in the current portfolio. It's a kind of heat map where they can see visually where they are. Where is the problem, basically. That's fantastic because we show them the problem, but also we show them the solutions. It's a very good selling tool. The second outcome is the level of recyclability the product portfolio has, and some of them, they have targets in terms of recyclability. We can monitor, we can help them to report this data. The key thing here is our customers rely on us to report their progress in sustainability. By using these tools and having this expertise, we help our customers to meet their targets, right, and the requirements to the new legislation. We've spoken a lot about how we're working with our customers, so we thought it'd be quite good to actually hear from one. New Seasons Market is committed to building community through good food. Sustainability and community are cornerstones of our brand, and we've been focused on championing the local food economy and inspiring environmental stewardship since 2000. Our customers care about supporting businesses that align with their values, and being environmental stewards is of increasing importance to them. Sustainability and equity are subjects we're having every single day with our customers. When it was time to renew our B Corp certification, we needed to understand our material footprint at a deeper level. Bunzl's Material Footprint tool provided us with the insights on our New Seasons Market packaging to show the progress we're making on the% of recyclable, compostable, and recycled content. The market's moving in a more sustainably focused direction. Solutions like these offered by Bunzl are ahead of the competition. They're providing us with a great foundation to improve our impact and tell our story. Hopefully, we've shown how we've been leading the transition to alternative materials for a number of years now. We're going to continue to report against the data in the categories we shared with you today. While we expect there to be an absolute revenue decline in plastic consumables, hopefully you've seen that our exposure is quite low. We also expect there to be a significant increase in the amount of alternative materials that we're selling to our customers in the future, which is going to drive good growth. Any remaining plastic revenue will be where the material is the best for the job or where there are significant challenges to substitution. Our independent advice, our own brand solutions will drive a faster rate of transition. We're attracting new business and again, that will drive good growth for our business. It's crucial that our ambitions and our solutions are tailored to individual customer needs. Sustainability has become a really important part of any brand's marketing. It's increasingly becoming a competitive landscape for who can do the latest great thing with materials or move to an interesting new product. They're using the subject to stand apart from their competition. We have a fantastic opportunity to support positive changes in all of our customers' businesses by having that flexibility to deliver them the right solution for them and align to the targets that they are setting. I'm now going to hand over to Andrew and Diana, who are going to take you through a couple of our other sustainable key themes. Okay, great. Now it's time to look at the next three key themes in our sustainability journey that we're making as a business. Firstly, responsible sourcing, investing in people, and finally, climate change. Let's start with the first of those, responsible sourcing. Here's a short film from our Shanghai team about how they add value to Bunzl and to Bunzl's customers. Global supply chains have expanded customer choice and lowered cost, but that comes with a responsibility to protect communities and to ensure workers' rights are respected. To support the need to protect workers and to ensure that product is of the right quality, we opened our Shanghai sourcing and auditing office in 2008. Bunzl, as a group, spends approximately GBP 1 billion a year in Asia through 1,300 suppliers, all verified by this office. Our office is responsible for auditing all Asian supplier factories, providing quality assurance and quality control on all products made. We also source product for our Bunzl internal customers. This setup is industry leading and very important for our customers. Our auditing process is our first line of defense to prevent defective product to be made and shipped by unethical suppliers. Our reach is circa 98% of our spending across 13 Asian countries every two years. We audit factories to local legal requirements, auditing system requirements such as ISO, Bunzl's own specific requirements, and any customer specifics. We have a zero tolerance for child labor, forced labor, unfair discrimination, wages below minimum wage, and continuous work without rest. We audit factories over one or two days, depending on their size. Our audit process includes interviewing management and integrating documentation and records. It also involves a factory tour to assess the operations, and we will interview employees at random to get a full understanding of working conditions. If we find critical non-conformities, we quickly try to get them resolved through in-depth engagement with supplier. If resolution is not possible within a reasonable time frame, then we terminate the relationship. Our auditing process has been reviewed by an external auditor and is in line with SMETA auditing standards. We work in a cooperative and supportive way with our suppliers. The more we can help them improve their standards, the better it is for our customers, but also the workers in the area. The offering that we provide customers is unique, and it is hard for our smaller peers and those providing products through online marketplaces to replicate this. We support our businesses to find solutions for their customers and to proactively find new alternatives for existing product lines. For example, we have been finding new sustainable packaging products. In addition to focusing on innovation, we also look to improve suppliers' product quality and to enhance purchasing efficiencies as well as innovation opportunities through preferred suppliers. We also provide the assurance that ordered product will be of the desired specification and quality. We take a sample of products in the middle of production in order to verify that the order is as expected. Prior to shipment, we inspect the goods again. This is usually value add for our customers to know that product is assured before transportation. It demonstrates again how reliability is at the heart of what Bunzl does. It provides crucial reassurance for many of our customers and is a key component of our tendering activity and retaining business. We've even had some customers visit suppliers with us to understand our processes and gain comfort around them. Going forward, we'll be expanding our program and ensuring 90% of our direct spend on products from all high-risk regions will be sourced from assessed and compliant suppliers by 2025. Beyond this, we will continue to take a proactive risk-based approach to responsible sourcing. We'll focus on identifying common issues in our supply chain and working closely with our suppliers to reduce future occurrences and risk. Oh, sorry. Great. We've always had a very close relationship with the Shanghai team based on trust over many years, working with Paul and the Shanghai base. During the pandemic, we had an increased focus, clearly, around quality of product, but also ostensibly quantity. That team were able to secure volume for us during the pandemic, and that was really important for our businesses to have that security. At the same time, they were able to continue to innovate in terms of products. Products around social distance, for instance, during that period. I remember being on daily Teams calls with the teams around the world, certainly in Shanghai with the purchasing directors in the U.K., making sure that we were collaborating and using the best of our resources. Frank mentioned earlier that we put Bunzl representatives into the factories, not only to make sure that the product was available, but to secure that product for us, vet it, audit it, and often do pre-shipment inspections on the product. It's this confidence and reassurance that Bunzl Shanghai gives our businesses and our customers to help channel the purchasing to the right suppliers, but also make sure we're highlighting the poor suppliers and helping them to improve in the future. You heard from Paul in that video about our good track record for audits in Asia. In fact, we had an independent review on those audits, the quality of them, the checklists that we use, and they were verified as SMETA equivalent. What are we going to do in the future? We're going to expand that auditing process to include all high-risk regions globally by 2025. It's this proactive management of suppliers that's key to our performance and improvement. Diana. Thanks, Andrew. Of course, every business will tell you that people are their greatest asset. At Bunzl, building the right skills and capabilities that we need to drive that future growth is a key business priority. We will only do that if we focus on building a truly inclusive culture and broadening out the talent pool as much as we can. It's fair to say we're starting off quite a strong base. The results that you see behind me on the screen are the results of an employee pulse survey that we did in November 2020, so between the two first major waves of the pandemic in most parts of the world, across all 20,000 of our people. You can read the results for yourself. It's not just me telling you that these are good results. We're actually able to externally benchmark our engagement survey results, so we know our people generally are really engaged. Our people also feel safe. That might sound a very basic and obvious thing to say, but actually in the same survey, 90% of our people told us that they would have no concerns about reporting any issues they had with their health and safety at work. That's so important in a pandemic. Our people feel invested in. We have really increased our spend and investment in management training right through from first-line manager training delivered locally up to our new global leadership program, where the first cohort of 20 people representing every region in the group have just completed their first program. Those of you who are active on social media, and in particular on LinkedIn, have probably seen our new We Believe employment brand. That is starting to get real traction. This was our effort to really try and encapsulate our values, our beliefs, and what a great place Bunzl is to work. It's getting traction both externally and also internally. For example, the piece that we put out recently on International Women's Day attracted well over 30,000 hits. Diversity is becoming an increasingly important business priority for us, and we're making really good progress. Spearheaded by the fantastic women's network that we have in the U.K., which Andrew and Helen have led very strongly, we're now rolling out that model across the world. As you saw earlier in the video, we are already achieving our objectives in the number of females at senior levels in the organization. We're now really turning our attention to improving our ethnic diversity. I wanted also to say a few words about the pandemic, because I think it gave us a really powerful lens on the engagement of our people. One of the key indicators about engagement that people often look at is employee turnover. When I look back at our employee turnover at a group level, actually, between July 2020 and July 2021, it didn't really change. It stands at a group level at about 13%. Some of you might think that's quite high, but in fact, for our industry, it's not. In the distribution industry and other related industries such as retail, that benchmarks very well. For example, the external benchmark in the U.S. for retail distribution colleagues would be at around 23%-24%. Obviously, as we move into a tighter labor market as we are now, it's something we're keeping a constant eye on, but it's definitely a strong place to start. I've talked already about the pulse survey that we conducted in the pandemic, and what came really clearly through from our employees was that actually they came to work because of local actions that were taken. If I give you an example from our Italian business, which is a small business, but in Europe, it was certainly one of the first businesses to be really in the eye of the storm in the pandemic. It was clear from what those colleagues told us that they came to work because of actions taken by the local MD. He was visible, he was supportive, he was upbeat, and he had been their boss and shown them leadership for many years. When they were really scared and really frightened about everything that was going on around them, it was that local leadership that really kept that operation going, and that was supported by a constant pulse of communications at both a global and a local level. I think it's quite well known that we were one of the first big businesses to be able to pay back government support that we received. When we were in receipt of that government support, we also took care to make sure that our employees weren't financially dependent on that support for their security. In most cases, we topped up that support that we received. We also did quite a big program of frontline bonuses to those colleagues who are absolutely in the eye of the storm during the pandemic. In true Bunzl fashion, that was something that was done locally. We didn't impose one group-wide way of doing it. What was really striking was it was the non-financial shows of support that were really just as impactful as the financial support that we provided. I will forever have in my mind a very clear image of the entire Bunzl North America leadership team going out to a local site, giving out T-shirts, delivering pizzas, just to keep up the morale of staff at that site. It was really powerful to see. I wanted to return to the topic of diversity because that's obviously such a key part of this. I wanted to share with you a conversation I had a few weeks ago with Erica Glanz, who is leading the Diversity, Equity, and Inclusion program out in Bunzl North America. Let's hear from Erica. Hi, Erica. Thank you so much for joining me today. Thank you so much for having me. It is my pleasure. We all know that diversity, equity, and inclusion is a complex and multi-stranded topic. At Bunzl, we've chosen to focus on the two key areas of gender and ethnicity. I wondered if to start with, you could tell me about how you're tackling these two topics in Bunzl North America. Absolutely. With regard to gender, the first thing we thought about was creating a women's network. We knew that the U.K. and Ireland had a very successful program in its Inspiring Women in Bunzl, we reached out to those participants to find out about that program to learn a little more about it. We used that as a blueprint for our program. The next thing that we did was actually to survey our female employees to find out if they were even interested in having a women's network. The answer was overwhelmingly yes, that they were. What they wanted out of that network was leadership opportunities, leadership training, and also networking amongst not just North America, but globally. I'm really excited to hopefully roll this program out here in early 2022 once we get the blueprint all mapped out. With regard to race and ethnicity, we started with actually listening to our employees. We created something called Voices Listening Sessions. What those sessions are is we take a small group of employees, approximately 10- 12, and we sit down with Jim McCool, the CEO of Bunzl North America, and myself, and we just talk about issues of race and ethnicity that are affecting the employees, whether it would be in the workplace or outside of the workplace. We wanted to hear what employees were thinking and what we could do to make the workplace more inclusive. The next thing that we did is we created a calendar, a diversity, equity, inclusion calendar. What we mean by that is we took different holidays and started celebrating them. We've celebrated and recognized employees during Black History Month, Pride Month, Hispanic Heritage Month, et cetera. They've been really successful, and I'm really excited to continue those going forward. Well, it certainly sounds like you've got off to a flying start. Could you tell me specifically what's going to happen in the next six-12 months? In North America, we always say that people are the power of Bunzl. Ultimately, I want every employee to be seen for who they are and for Bunzl to appreciate the unique talents that each employee brings to Bunzl. This won't be limited to gender, race, or ethnicity. We want to look at employees as a whole. We want the environment to be inclusive of everyone. We want employees to have a true sense of belonging and to be happy and proud that they're part of the Bunzl family. Have you thought about how you're going to measure progress? We have, and we do think that that measurement will change over time. With regard to gender, what we would like to do is to make sure that all of our high potential females that are in management roles, that they're assigned a mentor. The ultimate measure is going to be whether gender diversity actually improved within the organization. One place we think that we can start is to assign these mentors to ensure that we're retaining our best talents, that our females are not leaving to go elsewhere. We want to make sure they stay within Bunzl. With regard to race and ethnicity, again, the ultimate measure is going to be our numbers. One thing that we are going to do is have an engagement survey, and we'll have the ability to look at the engagement survey results based upon race and ethnicity. Therefore, we'll know if certain groups of people are answering questions differently. We'll know if certain practices are affecting our employees differently based upon their race and ethnicity. Well, it's always good to have some specific measures in place. Have you thought about what your personal hopes are for how Bunzl North America will look and feel as you start to make progress against these objectives? We consider this a journey. We know that it's just going to be a long period of time, and we're just beginning it. I'm really excited about what we've done thus far. What we're looking to do in the next six- 12 months is to keep building upon the foundation that we started with this year. We'll continue with our Heritage Month Celebration. Hopefully, we'll keep learning more things about our fellow coworkers during that time. We'll also look at adding an additional networking group. We're working on the women's networking group. The next thing we'll look at is perhaps having a networking group for people of color or another group. We'll also focus on employee and management training. This is something that we've talked about from the beginning, and we've been slow to roll this out because we wanted to make sure that we did it correctly. We wanted to make sure that the training actually made a difference and wasn't just checking a box. That is also part of our plans for the next six- 12 months. In the end, everything that we do is with the thought that we want our Diversity, Equity, and Inclusion to become part of the business and not a separate business initiative. Well, what an inspiring way to finish. Thank you very much, Erica, for talking about this to me today. Good luck with the program. Diana, thank you so much for having me. It has been a pleasure to talk about this. Okay, you've heard about what's been happening in the U.S. in the last six- 12 months and what their plans are moving forward. Let me give you a group perspective on this. First of all, why is this something that we need to focus on? I'm very clear. I think there are three key reasons why diversity needs to be one of our biggest priorities. Firstly, it's just the right thing to do. It's core to our employment proposition and our employment brand. Secondly, it's becoming a condition of doing business with our customers, our suppliers, our investors, and all of our other stakeholders. Thirdly, it's absolutely key that we create a more inclusive culture, make ourselves more attractive as a place to work for whatever people's backgrounds are, if we are going to build those skills and capabilities that we need in the future. We need to have a broad talent pool to fish in if we're going to bring in sustainability experts, and you've seen some of them today, digital experts, analysts. It's fundamental to our talent agenda. From a group perspective, and Erica talked about a lot of this stuff, what we are doing is focusing on those actions that we know move the dial. For example, on gender diversity, we know that mentoring, sponsorship, training, networking, all move the dial. In the U.K., where they've been doing this for probably longer than any other part of the group, since these activities started, the number of females in leadership roles has gone up from 13%- 22%. We know this works. As I mentioned earlier, we're also now really focusing on creating a program around ethnic diversity. There, the starting point has to be, in my view, to look at our culture. Where we are going to start, as Erica said, is by looking at our engagement survey results, cutting those where we can by ethnic group, and making sure that we have parity. Where we don't have parity, really listening to our colleagues to understand what their real or perceived barriers are that are stopping them being their best at work or stopping them thinking about Bunzl as being a great place to develop their careers. When we've done that, we will have a broader pool to fish in order to build the talent of the future. I also think that the pandemic helps us accelerate this process in a funny sort of way. I think that we've all got used to hybrid ways of working, more flexible ways of working. That will hopefully mean that we need to be less geographically constrained when we go out and look for talent, and will also mean that we can probably offer elements of flexible working where we couldn't necessarily do that before. I'm optimistic that that will also help us accelerate our agenda. I think I'm very optimistic about this. I think with the right degree of leadership focus from across all parts of the group and taking the best bits of that really powerful local Bunzl leadership, we can really get traction on this. Thank you. I'm going to hand back to Andrew to tell us about climate change. As you can probably see from the slide and probably know about Bunzl, our one-stop shop solution naturally aggregates suppliers and therefore reduces carbon footprint. It'd be no surprise we're currently supplying two of the largest contract caterers in the U.K., and we consolidate for those two customers alone, 500 suppliers and over 12,000 product lines. We've had 10 years of stable carbon emissions within Bunzl, despite considerable business growth. We've cut our carbon. In fact, we are 50% more carbon efficient. As you can see from the chart behind you, we compare extremely well and favorably with many other logistics companies. What are we going to do in Bunzl? We're going to be committed to the Business Ambition for 1.5°C campaign. What that means is we've signed up to the Race to Zero initiative. We're committing to have our new Science-Based Targets accredited by the SBTi. How is this actually working, though, in a business area? Let's take U.K. and Ireland as an example. We've done a bottom-up approach to looking at our current footprint. We've looked at our vehicles and moving those to low emission vehicles. We're trialing biofuel in our catering business currently. We've moved some of our smaller vans to electric and rolled out company cars to our field-based team. We're always pretty efficient in our warehouses in terms of operation efficiency, but also rolling out LED lighting and rainwater harvesting in some of our facilities. In the U.K., we've been buying renewable energy for some considerable time. What are we aiming to achieve as an organization, a global organization like Bunzl? By 2025, we aim to be 25% more carbon efficient. By 2030, we're aiming to roll out that renewable energy to all of our businesses around the world. By 2040, 40%. By 2050, we aim to be net zero at the latest, including Scope 3. Thank you. Frank. Works. In summary, we've heard from the team that sustainable solutions have become absolutely essential for our customers, and we are absolutely leading as a proactive leader in helping our customers to transition to this more sustainable future. We do this summary to our expertise, our teams around the world who really understand what they're talking about. I can't emphasize enough how important the data are that we are owning in our business. If you are a customer, you're buying 300, 500, 1,000, sometimes 2,000 different items. You just don't know where to start. You don't know what the products consist of in detail. You need Bunzl to help you, to advise you in terms of where to move to. What isn't easier than if we also provide you with the right alternatives, and we are building them more and more into own brands. That's what I was talking about before also, doing the right thing for society and for the planet can go hand in hand with achieving also your commercial objectives. Our in-house Shanghai sourcing and auditing operation is absolutely unique. I don't know of any other business that has that capability in-house. Providing this ethical supply chain will be widened even further into other territories outside Asia as well. Our goal is really to be a proactive and responsible business, and we believe we can do this while being commercially successful for our stakeholders as well. Our proactive approach on sustainability is an increasing competitive advantage. We are very committed to accelerate our focus in this area today, tomorrow, and beyond. It's now time for a break. We will start in about 15 minutes again, sharp. We have some drinks in the back, so please enjoy that. Take a coffee. We'll start in 10- 15 minutes. Let's say sharp, 3:30. Thank you. [Break] Great. Well done. Very much on time. Welcome back. Let's now move to the second part of our program, very exciting topic, our compounding growth strategy. Most of you are familiar with the three key pillars of our compounding growth strategy. The first part is profitable organic growth, which is important, using all these 150 companies around the world and making sure that they grow their business. The second part is around our operating model improvements, making sure that we improve the business every day, through technology and other things. We'll hear more about that later. Last but not least, our acquisition growth. We have a lot of potential to grow. We'll touch on that as well. When I talk about the compounding strategy, the compounding model of Bunzl, I always like to compare it with a snowball coming off a mountain. It's getting bigger and bigger and bigger every time. Jim McCool, who runs our Bunzl North America business, will start to address the first pillar right now, profitable organic growth. Thank you, Frank. As Frank said, driving profitable organic growth is a strategic pillar within Bunzl. The drivers of organic growth are multifaceted, from how we position ourselves strategically with our customers to how we execute with those customers on a day in, day out basis. COVID certainly amplified many of the key drivers that we see. Products such as masks, sanitizers, and gloves saw spectacular growth in 2020. Many of these products were our own branded products, and most were sold to our existing customers. We were also able, as Frank mentioned earlier, to sell these products to new customers, oftentimes governments, who were trying to secure emergency supply at the height of the crisis to ensure that they could protect our communities. Within this, we also found new opportunities to expand our categories. Leveraging the work of our Bunzl Shanghai sourcing team. We found products such as screens and distancing signs to be able to take to both new and existing customers to support opportunities during the last 20 months. During that time, the significant and surging demand and limited supply certainly drove price inflation. We're very comfortable that we priced our products appropriately during that time frame, and in particular, oftentimes, our large orders were sold at lower than normal gross margins. Now, operating size is a key driver, or order size is a key driver of our profitability. Despite the lower gross margins, they still were beneficial to our operating margins. These COVID sales were very important in offsetting some of the challenges we had in other businesses, in particular, our food service and retail business in the U.K. and Ireland, as well as North America. All in all, strong underlying growth of 4.8% in 2020 certainly demonstrated the resilience of the Bunzl business model during a time of crisis. COVID has certainly had a major shock on the world, and Bunzl, like all companies, has had to deal with a very, very unusual operating environment for the last 18 months. The path to our new normal will be a transition, and as part of that transition, we expect that our COVID related product sales will continue to decline, though stabilize above 2019 levels. The pace and extent of the business recovery is going to depend on the end market and the geography. In the U.S., for instance, the recovery of our food service and retail business has been supported by product price inflation, driven by plastics and paper price increases. We expect slower recovery in our safety markets, where underlying raw material and labor shortages at our customers are delaying projects. In the healthcare space, we expect stronger near term recovery as elective surgeries and procedures are now able to be performed. In our cleaning and hygiene segment, we see a mixed bag. We certainly expect that the enhanced cleaning protocols will remain as we come through the transition. The lack of foot traffic for return to office or travel will certainly impact our facilities management business in the near term. Our facility management business represents about 13% of Bunzl's overall turnover. It's important to note that cleaning and hygiene category products are used broadly across our segments. They represent 20% of our overall turnover. Food service is likely to have mixed recovery as well. Certainly, we're all seeing and enjoying restaurants coming back. The sales of food service products into catering and hospitality are very much following similar trends to what we're seeing in facility management and are going to be driven by that return to foot traffic in offices and with travel. One of the aspects of our food service business includes our food processing and agricultural business in the U.S., which has performed well throughout COVID and continues to do so. We're cautious about the recovery in non-food retail. Obviously, there's been an acceleration to online, although that has been offset somewhat by our ability to provide packaging solutions for our customers and their e-commerce businesses. As we move through the transition to our next normal, organic growth will once again be driven by activity in our end markets. Each of the markets have its own secular trends that can drive growth. Several of our markets have been favorably impacted, we believe, by trends that will develop and sustain post-COVID. In our safety business, for instance, where there was already an underlying trend towards an increased focus on workplace safety and employee safety, we see that the infrastructure spend that will come out from many governments post-COVID will trickle down into our businesses and support growth. In healthcare, we expect a general increase in a focus on preventative healthcare as well as healthcare at home, which lends itself well to the products and the solutions that we can provide our customers. Finally, in cleaning and hygiene, again, we expect that the enhanced cleaning and hygiene protocols will remain. As we take care of our employees, we take care of our customers, and we want to present a very hygienic face to each of those. I think when you combine that with the product range and some of the technologies we talked about, we think we're well positioned for growth in those areas. The grocery and food service, we expect moderate growth, and we expect an increasing focus on sustainable packaging in those areas. Again, some caution as we think about our non-food retail business, as we do expect the shift to online will provide a bit of a headwind. I'm going to turn it over to Helen, who's going to speak about those shifts to online in some of our segments and how it impacts us. Thank you, Jim. The grocery sector, definitely a shift towards e-commerce, and it continues, and it was only accelerated through the COVID pandemic, as these some quite reticent customers decided for the first time that they were going to have a go at home shopping. Actually what we saw was it was nothing like the extent that it would be in non-food grocery. In the U.K. market, before the pandemic started, for the last five months prior to the pandemic, online grocery sales accounted for 5.4% of total sales. The levels peaked in the third lockdown when levels for online home shopping reached 13% of total sales. That slowly declined again since, and actually in August it was at 10.1%. Still, in the U.K., a significant shift from where we started before the pandemic. That shift will continue. That's what's expected, it's not at anything like the level of non-food. When we've looked at why and asked people in our businesses and in stakeholders and our customers why that is, their view is that it's because of the experience and the enhanced offers that they're looking to put into the supermarkets. The fresh food offers, the food to go offers, the cafes, additional services, dry cleaning, photo. Dry cleaning is a real growth area. Also there's a big emergence of brands within brands, shops within shops and you'll see it more and more, Habitat in Sainsbury's, for example. Our growth and our strategy in our Bunzl Retail businesses is to make sure we're developing ranges and category expertise so that we can support this omni-channel customer need. As demand changes, we shift our revenue streams. Actually what we've seen is in most cases, whether those grocery orders are being picked by ourselves as customers or being picked by pickers in a multiple site operation, either in a dark store or a lot of them are still picked in the actual supermarkets. A lot of the products that we supply them to package them or to make the environment clean and hygienic are still needed regardless. There is some reduction in terms of demand, and that's coming from a reduction in footfall, so less toilet rolls, less till rolls, less cafe consumables, for example. What we've seen in the U.K. is that we've had an offset and through the pandemic, the amount and level of products that we were supplying into our retailers for their online shopping was significant. It was the home delivery bags, it was segregating orders, it was labels, it was the delivery crates, it was the picking trolleys, lots of health and safety products, and also the uniforms for the drivers and the health and safety products and sanitizing products for the drivers and their vehicles. It's a different story in non-food and we've definitely seen this shift in digital adoption and it's been higher and it's been quicker and again, it's been accelerated through COVID. In the U.K., before the first lockdown, online penetration in non-food retail was about 15.7%. You take the average through the three lockdown periods, that rocketed to 40.7%. In the period since shops have reopened, we've seen that drop away again. The average was 23.6% in the last few months. August was 21.6% penetration level in online non-food. The products that we're seeing that are supporting this online shift are quite different to those products that we supply into bricks and mortar. We've got a number of different retail operating companies. Some of them are really focused on supplying into shops. Someone like Keenpac, for example, which is all about bags and boxes to supply into customers that are going into shops. We've also got businesses that are really focused on supplying online and supplying fulfillment facilities. For example, somebody like the Woodway business in the U.K. What we saw during the pandemic is that actually in the U.K. overall, the amount of packaging sales and margin increased. That was through the demand for the increase in online packaging. We see that that level and trend will continue as those penetration levels increase. Why is that? It's really important from an e-commerce packaging perspective, because the packaging is vital to the successful e-commerce offer. It needs to protect the products once it's been picked right the way through to our back doors or front doors. It also needs to deliver as packaging a really strong customer brand experience, so when we open it in our houses, we get that wow factor that would be missing from a store environment. The packaging has to be quite complex, yet quite simple actually, in that when we open it at home, we want to be able to open it simply with tear off strips and different ways to open it. That packaging has to be reused because we often need to return products. In our businesses, we're using a very consultative approach to review those packaging ranges with our customers, looking for sustainability options, but also looking to reduce the ranges and the sizes. Trying to avoid this dreaded situation where you get the tiny product in the huge box with loads of void fill. We don't want to ship fresh air. We're also focusing on designing packaging which really makes it quick and easy for the people in the distribution centers to pack because we really need to work with retailers to reduce their labor costs. We're actually seeing this demand and this trend as well in food service. There's real growth in the online home shopping of hot food, meal kits, ingredient kits that we're all getting into. It's creating significant demand actually in terms of sustainable packaging and different ways to innovate to be able to get those products to our homes. Bunzl see this as a bit of a new growth channel and it's independent really of the traditional food service offer that you'd expect from Bunzl. It's some of our customers and restaurant brands that are now looking for the takeaway packaging that can be delivered like via Just Eat or Deliveroo, for example, and they need packaging to be able to facilitate that. Also, some of these online platforms themselves, they're starting to look for branded packaging from Bunzl to facilitate their offer. I'm going to show you a film now which hopefully will bring our e-commerce offer to life. It's from one of our e-commerce customers in the Netherlands explaining why they feel that Bunzl brings value to them. We have been working with Bunzl the last six years, and through its acquisition of Janssen Packaging, actually the last 14 years. Bunzl is providing us with corrugated cardboard solutions, interlocking boxes, to all sizes that we need in our operations at bol.com. We are an e-commerce company, which is specialized in delivering our products as quickly as possible, as best as possible to our customers. The field of corrugated cardboard is a field that we're not experts in. That's why we need the expertise of the Bunzl company in that sense. What we value the most about working with Bunzl is the speed in which they act, but also the ownership they take in the products they deliver to us. It's not just a supplier-customer relationship between Bunzl and bol.com. It's actually looking deeper into the full supply chain, which adds a lot of value to us. I think one of the most important things that I would highlight is the 24/7 support. In our business, day by day changes happen and even by night, certain volumes shift from left to right, resulting in actually getting different products to the warehouses. We need the Bunzl company there to act on that and be ready to have those products at our warehouses in an instance. Bunzl supports us on quite a lot of KPIs, which are important to us. We're expanding our footprint of warehouses quite quickly. You're going from a single warehouse, which you're supplying as Bunzl, to multiple warehouses which you're supplying at a higher rate and a higher volume. That is a complexity that Bunzl understands and acts upon and really tries to partner up as well to see, hey, how can we preemptively solve a few of those complexities before they even take place? Our plan to 2025 is to be carbon neutral to our customers, to have the delivery of our products be carbon neutral. It's a very specific goal, packaging is one of the most important things in that. The Bunzl company are currently in the finalization of a study of our full footprint, which means that we know exactly where what carbon emissions take place and where we can also neutralize those carbon emissions or compensate them. That's where the Bunzl company comes in and ties the footprint analysis to specific solutions that they can offer in the full supply chain. If we talk about innovations, it's two-sided. On the one side, we have certain demands as a customer, but it's also the other way around. The Bunzl company comes to us and says, "Hey, we have this nice new product in the market and we think this is going to be a success. Let's try it out." We try it out in our supply chain, and most often it proves to be a specific solution to a problem we did not even know we had. I hope that helps to bring our value proposition in our e-commerce sector to life. Actually, across all of our sectors, a real source of value for Bunzl is our great service, and that's delivered through our operational excellence and our operational expertise. It's the fundamentals really of sourcing and picking and consolidating, delivering those products cost effectively and efficiently every day just in time to our customers. That's a key pillar of our strategy to make sure that we're delivering operating model improvements. We have a relentless focus in our businesses on this. We've got dedicated continuous improvement and project managers making sure we make it happen. We've got annualized planned programs where we really focus on delivering those savings, not only to offset operating cost inflation, but also to enhance our margins and often to pass some savings onto our customers as well. Consolidation of warehousing, for example, is one of the larger operating model improvements that we constantly look to do. Actually across the group, we've consolidated 71 warehouses in the last five years. In my retail businesses in the U.K., we've just consolidated six sites into one. You might have seen it on the video earlier. It's reduced the cost of implementing lots of things. We've used warehouse management tools and transport management tools, digital systems, and made sure that we improved our staff productivity. We've installed state-of-the-art lighting, and actually it means that we've reduced our electric usage by 70%. Digital has really been the key enabler. It really helps us in all of the businesses to make sure that these small improvements continue. Things like stock management tools. We work really hard to reduce our stock levels, increase our stock turn, reduce our stock loss. Routing software, just constantly reviewing the delivery routes, making sure that reducing mileage, driver hours, making sure our drivers are driving efficiently and using fuel properly. In retail, we've just recently looked at a digital workforce management tool, it's increased the activity rate of our warehouse operators significantly. That was just using data to have a look at how our warehouse was laid out, what pick rooms were like, and what was stopping our pickers being more efficient. It's this attention to detail and the small incremental changes, as well as some of the bigger ones, that are really driving this operational model improvement. I'm going to pass over to Andrew now to share with you some of the detail of our next pillar of our strategy, which is acquisitions. Thank you, Helen. Well, Bunzl is very well known for its ability to make acquisitions, and I think it's very fair to say that we have a well-oiled acquisition machine. We've got a terrific track record of transforming the business through scale, reach, and sector diversity using our acquisition ability. Unfortunately, in March last year, COVID threw grit into our well-oiled machine. Just like the M&A world at large, things ground to a halt. I'm pleased to say, however, that every deal we were working on pre-COVID, we've now signed. How do we do this? It's not just me. I have two teams, one in the U.S., one in the U.K., dedicated to our M&A activity. Since 2013, between us, we've done 100 acquisitions. That's one a month, all funded through our own cash and providing GBP 2.7 billion of revenue. I'm very pleased to say that we've already exceeded that average this year. Our approach is disciplined and consistent. We have nine key transaction parameters, and we use that as a lens through which we evaluate every opportunity we have. We overlay those parameters with our ability to measure the management team. How strong is it? How well is it prepared to take the business forward? One really important factor is cultural fit, and I believe perhaps this is the most important of all. We are looking for teams that are down-to-earth, humble, hardworking, that will fit in with the Bunzl culture. We have a very entrepreneurial environment, a very decentralized business, and we attract owner-managed family organizations. What do we provide? We acquire these well-run managed businesses. What do we provide? We provide financial and operational support to them. That's obvious. We provide sourcing and own brand expertise, economies of scale, another obvious one, we also provide assistance with developing and implementing digital tools and management reporting to help them understand their business better. This enables them to continue growing. One other less obvious factor is that we provide collaboration. Imagine these owner-managed businesses. They've been working in a vacuum for most of their lives. They come to Bunzl, they can start talking to like-minded people. The best example of this is the safety forum, where once a year, all our leaders, often ex-owner managers, come together and exchange ideas on how the market is moving. What are the new products? This is a very empowering environment for them. I'd like to share with you a short film, features Alberto and Oscar. Oscar is an ex-owner where we acquired his business back in 2017, and it's great to see things from a seller's perspective. Acquisitions are a key component of Bunzl's growth strategy and have been an important driver for developing our business in continental Europe, which has doubled in size over the last 10 years. Our strong track record of growing through acquisitions is supported by a robust selection process in which we ask ourselves three key questions. One. Is the market or market niche where the company operates attractive in terms of potential growth? Two. Has the business a competitive advantage that will allow us to keep growing sustainably and profitably in the coming years? Three. Has the existing leadership, the founder's mentality, this specific mindset that will allow us to keep growing within our decentralized setup? We were acquired by Bunzl in May 2017. I'm the managing director of Tecnopacking. My father founded the company in 1992. Whilst we were growing well after 25 years of standalone entity, we realized that we need the support of a bigger company to open new business opportunities. It was Bunzl ethos that resonated quite well. I felt it was the right home to be, and it has been. The great thing about Bunzl is the decentralized model. It really worked for us. They allow us to keep our entrepreneurial spirit, as ex-owners, but at the same time, they support us with a lot of resources and operational excellence. It's a unique way of managing. Since joining Bunzl, we have developed two full business unitsThe PPE disposable business and the food service disposable business. Both has given to us a strong and solid growth. The Bunzl Shanghai office is a very good example of the benefits that Bunzl brought to us. We import a large number of items, and Bunzl Shanghai office team help us to audit most of our suppliers. Ethical sourcing is increasingly important for our customer, so it's very relevant to show our customer that all our products has been ethically sourced. The strength of our group help us to turn the trend in sustainability into a competitive advantage. All this knowledge share help us to understand much better the new regulations and how those new regulations should be applied in each country. Being part of Bunzl has professionalized our business. We were focused on growing, but we didn't pay a lot of attention to aspects like cash flow or strategic planning. Right now, we are running a much more operational efficiency company, focused on risk mitigation. We are also really benefiting from the investment Bunzl put in our people. I received myself management training as half part of my senior team. As a result, we have a stronger team, and this is an ability that we didn't have before. As we expand into new sectors, acquiring high-quality businesses allows us to grow while managing risk. Tecnopacking is a great example of this, with its continuing double-digit growth. Since making our first acquisition in Spain in 2007, it has become our third largest business in continental Europe. Tecnopacking was our tenth acquisition in Spain. It has allowed us to comfortably expand into the packaging sector. Clearly, these businesses are doing very well and are reaping the reward being part of the Bunzl Group. Acquisitions are in our blood at Bunzl. Many of us actually joined through acquisition. A lot of the opportunities do not come through advisors, do not come through research at the center. They come through our local managers. Our local management builds relationships with business owners. This often takes years to build the trust. That trust is essential, because when it comes time to sell their prized asset, we are the obvious ones to talk to. This network allows us to keep the pipeline healthy. It also allows us to be selective and allows us to walk away where necessary. We are very disciplined when it comes to valuation. Our focus on bolt-ons up to GBP 100 million valuation means we can be disciplined enough to hold our multiples at around 6x-8x. Larger deals, anchor opportunities may drive valuations higher than that, especially where there's private equity interest. We will never fail to walk away where we think we are overpaying. Our average deal multiple so far this year is 7.5x. I'd like to hand you over to Jim now to talk about our growth in the safety sector. Thank you, Andrew. As Andrew said, we're going to take a deeper dive into this, into our safety sector and the acquisitions that we've made in this space. Since 2000, we've completed 48 acquisitions in the safety space, many of which businesses are represented on the slide here. Since 2005, we have committed $1.6 billion in spend to the safety space, which represents approximately 40% of our acquisition spend during that time. Now, the safety space is a bit different than some of our other sectors. The success of our businesses in the safety space is driven by a strong own brand portfolio, often supported by our global sourcing and continued product innovation that allows us to differentiate within the marketplace. Most of the safety businesses that we've acquired thus far have been focused in the PPE side. We've had strong success diversifying into this sector, both through redistribution and end customers in end markets as diverse as mining and construction. A great example of a safety investment we've made is the acquisition of MCR Safety in September of 2020. MCR is a leading PPE supplier in the North American market with a focus on hand protection, rainwear, and eye protection. This is a great example of relationships at a local level. The MCR relationship was nurtured over 10 years by our local management teams and was critical in being afforded an opportunity to engage exclusively despite significant other strategic and private equity interest in the business. The MCR acquisition was also disrupted from COVID. That relationship allowed us to continue conversations throughout and successfully close the deal in 2020. Early signs are very successful. MCR has achieved 7% growth year-over-year, which is ahead of the near-term acquisition case. We've certainly benefited from some synergies thus far and look to continue to drive opportunities to leverage what Bunzl and MCR can do together. While there's still plenty of opportunity on the PPE side of safety, recently we found opportunities in other aspects of safety. We've got two examples of new businesses. One, FRSA, which was acquired in December of 2019, and the recently announced McCue Corporation, which we expect to close in Q4, that are really exciting businesses that will continue to drive growth for us in the safety sector. FRSA is a business in Australia that deals with safety and emergency response supplies. Again, very good early success, 11% growth since the acquisition. We've been able to effectively leverage the Bunzl infrastructure and sourcing to open a greenfield operation in New Zealand. A great example of the power of the Bunzl organization that we can bring to an acquisition. We've been able to leverage what FRSA sells, which was a new product category, and bring that to Bunzl businesses, but then also take the Bunzl product categories and take it to FRSA, allowing and fueling some of the growth that you've seen. We've been able to enhance their HR and finance functions and support them with a new ERP, all designed to be able to continue to grow and sustain these levels of growth. McCue Safety is involved in the safety and asset protection, providing solutions to their customers in e-commerce distribution, in retail, and in general warehousing. Products such as safety barriers, bollards, column protection, floor railing, and bumpers. Again, distribution centers, e-commerce fulfillment, retail applications. This is a business that has shown considerable growth over the last three years, 20% CAGR, driven by the growth in e-commerce distribution and new product innovation. It's a business that's focused on service and providing innovative solutions. Their solutions are typically customized with their customers, designed to protect their employees and their assets. We expect this business will continue to grow strongly from the continued growth in e-commerce activities, the continued focus, as we talked about earlier, on health and safety in the workplace and protecting employees, but then also protecting the investments that our people are making. The proliferation of investment in automation requires more and more protection in the warehouse environment, and McCue's products are uniquely designed to support that. Also, the opportunity to leverage the Bunzl customer relationships. They play in grocery, we play in grocery. They play in retail, we play in retail. The ability to leverage our collective relationships for growth, as well as to expand the McCue model outside of North America on an international scale. While there's significant opportunity yet in PPE and in safety, Andrew's going to talk about the strong runway for continued growth in our existing sectors and geographies. Identifying, transacting, onboarding, I hope you'll all agree, they're all key competencies of Bunzl, tried and tested over the years. I'm sure the question a lot of you will be asking is, can we continue to do this? Can we continue to acquire at the same pace or even faster than we have done in the past? The answer to that is a firm yes. We use market penetration, sales as a percentage of GDP, and using the U.K. as a conservative benchmark, we compare our other geographies. Now, I say conservative because our market penetration in the U.K. is not the highest. Yeah. It's third on our list of territories, behind the Netherlands and behind Denmark. It's a reasonable benchmark to use. If we use that and compare it to Spain, as an example, we heard from Alberto on the video earlier how we built Spain up over 10 years to GBP 200 million revenue. If we take the market penetration in Spain to that of the U.K., there's another GBP 400 million to go for. What a great opportunity. That's just one country. We have the machine. We have the discipline. We have the financial capability. We most certainly have the opportunities, so we can, and we will, continue our remarkable acquisition story. Now over to Richard. Thanks, Andrew. Let me start by saying that I've been very impressed by how Andrew and his team have delivered for Bunzl over a very long period of time. We've done 179 deals in 17 years. Andrew and his current team have done 120 of those. Two-thirds of all the acquisitions we have done have been done by Andrew and his team. That is, I think, very important and very encouraging. We need to recognize that this is a key competitive advantage for Bunzl, and one that many companies really struggle to replicate. You also heard from Andrew that there are significant opportunities to buy high-quality businesses in our existing sectors and geographies, and indeed outside of those. The question is: Do we have the headroom to finance those opportunities? The answer, of course, is we certainly do. We are a very cash generative business. We came into the pandemic at the low- end of our leverage range, and we've made a lot of cash, performed very well during a very difficult time. Therefore, as we stand today, we are able to allocate over GBP 1 billion in acquisitions in the next 12 months and stay below the 2.5x range that we set to ourselves. As Andrew rightly said, we will of course continue to take a disciplined approach in how we allocate that capital. We will pay the right price for the right deal. Let me just turn to the track record of Bunzl. Look, it's great for me to be able to stand here and point to a chart which shows that going back to 2004, when Bunzl de-merged Filtrona to become the pure play distribution business it is today, that we've grown our profits by 10% compound annual growth rate over that extended period of time. I think it's a very, very impressive performance. It's not just the track record. There is inherent resilience in this business, and this has been demonstrated during the two greatest dislocations in modern times, the global financial crisis of 2008, 2009, and the pandemic that we're still living through. In both these events, margins have been resilient. In 2008, our margins only dropped 30 basis points. In the pandemic, in 2020, our margins actually increased by 70 basis points. That's a very strong performance. The pandemic has shown how important resilience is for everybody, but I think particularly for Bunzl. Our sector and geographic diversification has helped to spread the risk around the world. We are not overly reliant on any one market or indeed geography. As Andrew Tedbury said, our ability to procure vast quantities of incredibly scarce product through the most uncertain times was the main reasons why we've been so successful during the pandemic. It's allowed us to invest GBP 900 million in acquisitions and CapEx since the beginning of 2020 and continue our track record, our very proud track record of consistent dividend growth over 28 years. In today's increasingly uncertain world, resilience is a very, very valuable asset, and dare I say, more valuable now than it has been in the past. Now Bunzl is known for having a very consistent track record of delivering strong shareholder returns. We've talked about the building blocks of that this afternoon. We've talked about organic growth, operational efficiencies, cash generation, and our ability to deploy that in value creative M&A. On organic growth, you heard James and Alberto talk about how sustainability will play a much more prominent role in our organic growth in the future. Jim talked about how the pandemic has enhanced the growth potential in many of our end markets, particularly safety, clean hygiene, and healthcare. I can tell you that across the group, there is very significant focus on making sure that we deliver organic growth in each of our businesses. On operating efficiencies, Helen talked about how we focus on cost control every day. It's a day-to-day game, a game of inches. Consolidating warehouses, 71 in five years, and driving efficiencies to help us offset any operating cost inflation, of which we are seeing more and more at this point in time. Andrew, I think, was very clear in demonstrating the opportunity we've got in M&A. It's significant, and it will continue. If you add all of those things up, you can see there's plenty of avenues for growth for Bunzl in the future. Let's not forget that dividend. We are very proud of having delivered that unbroken dividend growth. You can absolutely expect us to continue to do that. I'm very confident that as we stand here today, we will continue to deliver the strong shareholder returns that Bunzl has been known for. Frank. Thank you, Richard. Very well said. It's great to hear Richard also being very positive about the future. Before we move to Q&A, I would like to summarize what we discussed today. The first important point to make is Bunzl has always been an added-value specialist distribution organization. What is important to realize is we're becoming more and more of a specialist. We're becoming more and more an integrated partner of our customers. Very important. Our people are our biggest asset. It's all about expertise. Once you're in distribution, you don't have any clever machines or patents or whatever. It's really the people that make the difference, and we did see that very clearly also during the pandemic. Our growing competitive advantage comes from our ethical supply chain. We spoke a lot about China. You saw a great video in terms of how the people were managing and supporting our businesses, but also the customers who buy from our businesses. Expertise is very important. We have the sustainability experts within the business that train our sales force, but also go out and meet our key accounts and national accounts, international accounts, and they basically talk the same language when it comes to achieving progress, commitments, and targets. I think, what is very, very important, and the area that I'm very passionate about is we talk all about data often, and the power of data within sustainability is absolutely huge because when you have a wide range of products, of essential products for our customers, and it's very hard for our customers to really understand the material that's in it. Is it recyclable? Is it recycled? It's a complicated area where you really need to talk to an expert, and we are material agnostic, and so we are the independent advisor, the trusted party for our customers. Using that data and turning that data into very clever reporting that Bunzl has done, which basically is able to summarize what customers are buying, and we can allocate it into the green category. Already transitioned, it's bagasse, it's recyclable, it's recycled, reusable, or it's an amber category that will transition, or it's red because it's under legislation, and it will have to move as part of the European legislation. It's very important. We make the life of our customers very easy by showing them, this is basically what you're buying. Your products are in the different categories. This is really what you should be transitioning to another category. By the way, we have this wonderful Verive brand, our own brand, that can be a very good solution for you going forward. The customers obviously value that advice. This hasn't started last month. We've been working on this for a long time, but it's fair to say it did accelerate over the last couple of years. We've spoken about the materiality assessment and setting the priorities and really working through that program as well. I think the other important fact for today is really around how the shape of our portfolio has changed as a result of acquisitions. We've heard how many successful acquisitions we've done, and a lot of the acquisitions also happened in the safety space. Now, probably most of you didn't realize that when you talk about Bunzl, that two-thirds of our products are actually no packaging products anymore. Actually the packaging within our portfolio is probably smaller than you thought, if you then really drill into the packaging part of that portfolio, actually the part that will transition is relatively small. It will transition, because we offer a one-stop shop solution for our customers and we are a trusted party, we've seen in every occasion that when things transition, we are the supplier that also offers the alternative products, which is important. It's happening. Transition is happening. It has happened, and we're in a good place. We are uniquely positioned because we're material agnostic. I touched on that, we are the independent advisor as well. When we look at the last 18 months, our performance has actually been incredible. How our people responded locally, how we utilized our financial strength, how we used our supply chain in Asia with our own people, securing that the healthcare organizations, the government, all our customers were able to buy these quality products that they could trust really made a great impression on our customers, which is key. We delivered a strong track record over a very long period of time. We all know the dividend chart, which basically is a reflection of our earnings per share growth, which is great. It's not only growth, and it's not only historical growth, it's also the resilience. The resilience that Richard touched on in the 2009 period, during the pandemic period. That resilience is purely a reflection of the diversification of our activities. We're not only diversified by market sector, some of them compensating each other. When people, because of a recession, don't go out for dinner so much or go less into hotels, they go to the supermarket and buy their products. We both deliver, the one offsets the other. The diversification by sector is important, but also diversification by geography is very important. We've seen Latin America sometimes a bit weaker. We've seen them swinging and dancing in terms of economy. The same with North America, the same with continental Europe. That portfolio and mix effect is very important, and that will give us resilient performance going forward as well. I'm very confident about the organic growth going forward, coming out of the COVID crisis, and we have a huge acquisition opportunity as well. We are very well positioned for the future, and I'm truly excited about Bunzl's future. Before we go to our product exhibition and climate change exhibition downstairs, we have now about 30 minutes for Q&A. I'm inviting the group to come on stage. For those of you joined virtually, please submit your questions online, and we have Sunita here who will collect the questions and will integrate them into the session. For those who are in the room, a microphone will come to you if you have a question. Maybe put your hand up if you have a question. I would like to ask you to ask one question by the time. You can ask multiple questions, but please one by the time, and then we'll deal with the answer. Then we go to the next question. Okay? I see this lady here with a question. Hi. Thank you. Kate Somerville from UBS. Just wanted to talk about the organic growth that you've done since 2004 was 2% on average. Given everything you've spoken about in terms of the shift to more sustainable products, does that mean that you actually think you should accelerate from that from here? Thanks. Yeah, it's a good question. I would split, let's say, the future into, let's say, the shorter- term, which is slightly more a transitionary period, and the longer term progression. If we look at, let's say, the next one or two years, we may still face some pressures, for instance, in facilities management companies, because there's a lot more people working from home, and it's really depending on how that sort of comes back. The same goes for international business travel impacting potentially the occupancy in hotels. We still have to sort of unwind a little bit this COVID crisis. Longer- term, I'm positive about a couple of things. First of all, the focus on hygiene is going to be wider. We heard that we have 20% of our total group sales is cleaning and hygiene products, which doesn't necessarily mean they're being sold in the cleaning and hygiene sector. If you look at, for instance, the hotel sector, which is in food service, one of the largest product groups within food service is cleaning and hygiene products. Toilet paper, towels, and cleaning chemicals. I think focus on cleaning and hygiene will be a positive, but I think sustainability will be a positive also coming from slightly more expensive product substitution. I think the balance of reduction in plastics and selling other sustainable products will, in our view, more than offset some of the pressures, which is going to be a positive as well. Now, how much exactly that will pain out is difficult, but certainly positive about organic growth longer term. Lady there. Hi. This is Simona Sarli from Bank of America. Thank you very much for the presentation. One question. At the moment, people are talking a lot about supply chain constraints and disruptions. How is that impacting your business and what you are doing to address that? Also more in terms of supply chain disruptions, what about talent scarcity, so your ability to recruit people and effect on wage inflation? Thank you. Yes. Maybe Andrew Tedbury, you want to take the first one, maybe Diana, the second one. Yeah. On supply, I think you've seen on the videos today that we've got global supply in place. Certain areas that is challenging, we'll have to multi-source products. Overall, generally, we're not seeing the kind of supply chain pressures in terms of availability of product. We are seeing some product inflation, but not necessarily around the availability of product. Yeah, on the people side, we are finding it tougher, certainly in the U.S. Labor market is much tighter than it was, and it is in the U.K. If I use the U.K. as an example, we haven't yet seen, I think, as Andrew said, the extreme impact that some other businesses have seen. I think mainly because our proposition for employees, we don't have that many HGV drivers, and our proposition's pretty good because generally people work Monday to Friday, they work set hours, they don't have to go away on long trips. Where we have seen retention issues, we have increased wages in some targeted way in some areas. We're keeping a very close eye on it, as I said in my presentation. At the moment, the impact seems to be reasonably limited, it's something that we're watching all the time. Gentleman here in front. It's Adrian. Adrian. Yeah. Adrian Cattley, Cape View. I've got two questions, but I'll hold myself back. One by one. One at a time. You talk quite a lot about being the sort of independent provider of advice to customers, but you also talked about trying to increase the level of own label that you're sourcing. How can you square that circle? Maybe can you give a feel, is it in particular areas where, I don't know, you're providing it and it isn't up against the Essity of this world? How does that balance work? Alberto, do you want to take that? Yeah. Well, when we talk about we are flexible, we talk about we don't manufacture plastics, so we can easily change the source, and we can do that. Our own brands, in the case of Continental Europe, will help us to provide a consistent, innovative range. The fact that we are consolidating one range across the area will give us scale economies, and we will be more competitive to the market. You're right. It's a bit of a balancing act because Essity is one of our key suppliers and a very good partner of Bunzl. You will want to try to grow with the branded suppliers, but at the same time, also with your own brand. The sustainability range is effectively so interesting because the original product often comes from multiple suppliers, and we turn it into one sort of call it green area. The gentleman here in front. Should we do two on microphone? Hi, everyone. It's Oscar from J.P. Morgan. Thanks for hosting this. One question is on just Sorry, I have multiple. On M&A, you talked about GBP 1 billion of potential capacity. You've done about 40% in the past in safety. Could you give us a sense of which end market you see more opportunities? Thank you. Want to take it? I think we're happy with all of our end markets, all six of them. I think you can probably see us deploying slightly less capital in retail, albeit I think the e-commerce opportunity you've heard, I think, is very clear, I hope. I think you should assume that we'll do more in safety, clean and hygiene, and healthcare. If there's good opportunities in grocery like Joshen was in the early part of 2020, we would certainly consider those. They'd have to be very synergetic and really cement our market position. I think predominantly we'll spend in safety, clean and hygiene, and healthcare. The lady over there. Hi. Hi. Morning. Hi, it's Annelies Vermeulen from Morgan Stanley. I'll start with one as well. I just wanted to ask on all the detail you gave on all the packaging side of the business. I'm assuming that there was an increase in that consumable products facing regulation part as a result of COVID, perhaps an increase from those single-use type items. You've obviously also talked about some of those COVID product sales staying higher for longer. I'm just wondering, are there any parts of that packaging side that you identify actually could be permanent hygiene-driven shifts because of the pandemic? When do you think that might return to 2019 levels in terms of that split that you gave? Also on that related topic, of all those different parts of packaging that you talked about, are there significant margin differences in between those products, or is it relatively consistent? Thank you. Okay. All right. James, you want to take it? Yeah, certainly. We're going to report on the data that we share with you today on an annual basis. You'll see new numbers coming shortly. I think that increase in demand that you said around consumable products is probably offset to a degree by the closure in food service businesses and restaurants and some of our markets there. We'll have to see what the net position looks like at the end of this year. In terms of margin, the margins are pretty consistent, where the alternative materials do command a higher margin. The fact that the world has used so much plastic is because plastic is relatively cheap, and the raw materials that produce the alternative materials just cost more. We expect that margin even when volumes pick up and a more significant proportion of packaging overall moves to alternative materials. We still expect those margins to be stronger in the medium term. Yeah, that's about it. That's it? Yeah. Okay. The gentleman next to you. Hi, it's James Rose from Barclays. If half of your packaging items already use alternative materials, and from the outside, there hasn't been any discernible impact on the group financials. Has there been a positive impact in the past sort of within the mix there? You want to take this? It's difficult to say, isn't it? Yeah, look, I think you could assume that the trends that we expect to see around the value of the product, but also the fact, don't forget these are our own brand products. There's a lot of these are own brand products. Yes, we will have seen some of that effect. I would say, though, that's happened over quite a long period of time. As Frank was saying, sustainability isn't new for Bunzl. We've been doing it for a long time. Expect that to have happened over an extended period. As we look forward, I think you can take our confidence that not only is this good for revenue, but it's also good for the margin. I would also say that, if you look historically, the things that have transitioned, things like straws, stirrers, maybe carrier bags, single-use carrier bags are of a category where we've seen more reduction in quantities, and then being replaced by other things that are more expensive, like reusable carrier bags or paper straws. We all use them. They're not very good, but it's good for the environment. Where if you're now looking forward, and you dealt with most of the things that already transitioned, you look, for instance, at supermarket packaging, these will be packaging sort of one by one transitions. If you want to change a chicken container to something else, it will be one container going and a chicken bag arriving. It's very hard to reduce the quantity. In that sense, I would expect going forward, let's say, the overall impact on sales and growth to be more positive than the trends we've seen historically. Gentleman in the past. Right. Back. Afternoon. It's George Gregory from Exane BNP Paribas. Thank you everyone for your presentations and insight. If we could spend a bit of time on the non-packaging segment, the two-thirds which we haven't talked about today. I guess notwithstanding the absence of consumer or regulatory pressures, looking at some of the categories on slide 24, I presume that over the longer term, certainly, there's quite a bit of scope for either reduced consumption or transition to alternatives or reuse. I guess a two-parter, really. Firstly, any insight you have looking not two years out, but five, 10 years out, where we could see reduced consumption or where your customers may be forced, for example, to reuse or cleanse the items they're already using? Secondly, I suppose, what can you do to proactively promote sustainable alternatives? Thanks. James? Yeah, happy to stay there. We fully expect a number of the products in that non-packaging category to come under increasing scrutiny to potentially be addressed by our customers in a way that maybe they haven't been to date. We're already proactively working on that across all of our businesses within those other sectors. You'll see a couple of examples downstairs. We have a fantastic Cleanline Eco environmentally friendly range of chemical-based products in use in the U.K. That's own brand. We have new products that we're bringing in. Again, they're downstairs if you want to take a look. Where you mix the product, which comes in a sachet with water. It's dilutable chemicals. It's really carbon efficient because, of course, you can get loads of sachets on a truck, and it actually supports the circular economy as well because you can reuse the bottles. We're already working in those areas. We focused in on the packaging and consumable products today because, of course, the single-use plastics agenda has been dominating the headlines and customer targets to date. We're already starting to work on the other areas. We can certainly see products more likely to transition rather than reduce, especially where cleaning and hygiene is going to be such an important sector for our business moving forward. I would say, if you look at the categories like paper and tissue, it's a very high percent already recyclable paper. If you look at this, the things that Kimberly-Clark and Essity, they are the largest suppliers of Bunzl. They are all in the right camp already. George, as James said, we will be reporting against this. The extent to which we restate the base because of products that do come under regulation or do come under pressure, we'll make sure that's visible as well. Okay. Rajesh, yeah. Afternoon. Rajesh Kumar from HSBC. Thanks for clarifying on the pricing differential of the reusable, compostable environmentally friendly products. They are higher price, higher value, but I'm assuming the volumes are lower. If you were to. Assume that transition you've gone through in half of the business, which has already transitioned to continue. How would you see the financial metrics like return on operating capital, margins, and organic growth to transition, basically be impacted due to that transition? Because just thinking about your earlier answer, by the sounds of it, you would have had a meaningful volume decline because your returns have not fallen. Your inventory turn has sort of gone up by over the five-10 years, gone up by at least two turns. So just trying to understand, if the journey continues, how the financial metrics could be impacted. Yeah. Let's say it would be my view that, let's say it would be supportive to margins, and it would be at least coming with the same return on capital dynamics, because we may have slightly higher stock if we bring it in for own brands, but given the higher margin, it will be at least the levels of ROCE that we see today. Gentleman in the middle. Gerry Hennigan, Goodbody. Just on the issue around sustainability and packaging, is that sustainability or that trend towards sustainability throwing up more opportunities for you in terms of M&A with the companies that possibly don't have those level of resources? Sorry, I didn't hear it. M&A and sustainability and M&A opportunity. Okay. You want to take that, Andrew? Did you hear it? I think, in terms of M&A, we're obviously looking at opportunities that are excellent in the area of sustainability to enhance our abilities there. Also it gives you the opportunity where you acquire businesses that aren't quite up to your standard, to bring them up to that standard and drive value and drive growth in that way. I see that as a great opportunity for us. We've got the skill set in the business to take those businesses forward that might not be up to our standard. I think it's almost always a positive because if you're looking at opportunities, either somebody's behind on the sustainability area, for instance, in having availability of ranges, we can help them. If they're ahead of Bunzl, obviously that is also good in certain sub-markets because it helps us to accelerate certain things. It's something certainly we look at when we review acquisitions. Like we also currently do, we have a lot of focus when we review acquisition opportunities. What is the COVID impact on the business during the last year? We tend to normalize for that if we buy a business because we don't want to pay a multiple on an inflated profitability because of a one-off sort of COVID impact. Who else? Maybe ask- Sunita? Any of those questions. Thanks, Gerry. We have a couple of questions on M&A. Is there anything relating to kind of owner vendor demographics that will accelerate the number of opportunities that we have in the next few years? Start with that. Maybe one for Jim. I mean, certainly one of the trends that we've seen across the U.S. this year, was an acceleration, likely from concern over proposed changes in cap gains rates. President has come out and kind of put a flag in for September 13th, which could cause some people that may have otherwise come to market before the end of the year, to reconsider that. In terms of other demographics, I think, many of the industries that we operate in and many of the companies that we look to acquire are family-owned businesses, as Andrew mentioned previously. Certainly, the impacts of COVID on many businesses and the realization of the potential impact to someone who's spent their life work building a company, could certainly give them some time to reconsider and bring them to market for us. I think those would be some of the key drivers that we've seen recently. Thanks. The second one on M&A. In terms of pricing at the moment, is product inflation causing any kind of issues or a component in negotiations in terms of thinking about organic growth or inventory valuations, that kind of thing? Andrew? Yeah. It's providing a challenge. Certainly coming out of COVID with the product inflation around gloves and masks and then the deflation, rapid deflation in those products, it creates a challenge during due diligence. It's another factor to consider when we analyze the performance of a target. Fortunately, it's quite easy to pull that out of the target's performance. It is limited to a relatively small portfolio of product, and it's quite easy to identify the effect that that's had on the business. It is a challenge. Obviously, we see these trends in our business as well. In many respects, it is a challenge, but it's easy to actually adjust for them because we know how it's affecting our own business. Sometimes that means that our view of the world is different than the view of the seller, obviously. In this case, we are very reasonable people. We have a very important reputation to defend when we deal with family-owned businesses. That means that sometimes you have a short-term earn-out period then. Which, yeah. de-risk the situation. Just one other M&A-related question online. In terms of the kind of opportunity slide that you presented, Andrew, is there any in particular that you're very excited about that you think has the most potential, and where you have a strong focus trying to find some opportunities? I think it would be fair to say that we focus fairly evenly across the board. You can't drive acquisitions. You can't make people sell. You have to take the opportunities as they come up and be there ready. It's not easy for us to drive specific opportunities in specific geographies. It's just really, we've got to be there ready when owners want to talk about selling. Any further questions? Two here in the middle. Yeah. A follow-up on e-commerce. I guess it seems like you have a strong position in the U.K. and the Netherlands in some of the retail e-commerce, and you're working with some of the food delivery and the deliveries. Is that across the group that you have that exposure to e-commerce, or are there certain regions where you can maybe do greenfield expansion to win some new contracts with some of the e-commerce players? Yeah. I think it is fair to say that I think our largest presence in retail is in North America. Maybe you can take that one, Jim. Yeah. From an e-commerce standpoint within North America, certainly we've seen a shift and acceleration from our customers. We've been able to support our customers in that journey with packaging that's specific to it. Helen spoke to kind of the importance of brand and the importance of the functionality of the packaging. We've certainly seen growth and opportunities in that space. I think we continue to look for opportunities, much as we've seen in other parts of the world, that we can take to the North American business, whether it's on the fulfillment side. Wherever we can add value, given our scale and given the range of products that we offer, we do see it as an opportunity. Adrian Cattley again. Just on operational efficiencies, just wondered how you think about the application of technology into the warehouses. As talent gets tighter, sort of robotized picking, using technology more, where's the tipping point and, I guess, where are you trialing it at the moment, and where do you think it could go if you are trialing it? Yeah. Well, maybe I can take that. Let's say you, in general, if you have warehouses that are sort of larger than, let's say, 25,000 sq ft, you tend to see it to be very beneficial to implement technology. We are constantly rolling out warehouse management systems, and Helen can maybe make a few comments later on, where you basically move from people-dependent processes to, let's say, computer-dependent processes and making it very efficient. That's important. We also see a strong tendency, you saw it in one of the videos also, where we differentiate these bulky items, which is the vast majority of what we do, from small items that we put more and more of the small items in these, what we call, storage towers, like these sort of vertically Kardex systems. You press a button and it comes out automatically. Clearly, with the shortages and the tightness around warehouse staff, it's important that you adopt technology, and we do that all the time. Mostly when we put warehouses together, and Helen mentioned one where recently she put five or six warehouses into one facility, that is happening. Helen, you want to comment on technology in the warehouse? Yeah, I think it depends on the size of the warehouse, absolutely, and also on the mix of products. Because if we think about a lot of our typical deliveries, we can go from a huge brush to a bucket to tiny little pads that go on the side of your glasses, for example, in the retail world. What we've found, we've investigated it a lot. There's some solutions for some products, but it's difficult to do it as a totally automated warehouse. Focusing on the bolt-on IT solutions around stock management and around warehouse efficiency and warehouse labor metrics, data that drives efficiency is another way to do it. The vehicle side of things as well. We've got a lot of work going on in that. One more question there on the right. Andrew. Oh, here. Sorry. Thank you. Just one follow-up from me on M&A as well. Richard, you outlined you potentially have over GBP 1 billion to spend over the next year. As you've also talked about, you don't always have control over the timing of deals, and it can be lumpy. How do you think about balance sheet efficiency if you can't deploy all that capital? Are there alternatives? Would you consider doing a buyback, for example, or how do you think about allocating that capital? Yeah, look, we tend to think about this. Can we spend GBP 300 million over the next a year, over the next five years? Could we spend more than a GBP half billion? I think the answer to that is yes. Could we do GBP 2 billion that period? Possibly. Maybe. GBP 3 billion might be harder. Look, if we can't find ways to spend in a disciplined fashion the headroom that we've got, then look, we would clearly, as responsible stewards of this business, we would definitely have to consider distributing cash to shareholders in some form. It's not our preference. I think it's a better place for us. It's better for shareholders, I think, in the long term, if we deploy that in value-accretive M&A. If those circumstances, which I think are unlikely, analyst, but if they do happen, of course, we would. Gentleman here. Here you go. Right. That side of the room. Andrew. Thank you, Andrew. Nazy from Peel Hunt. You've got very clear sustainability goals and agenda over the next sort of three years. Are you fearful of any competitor behavior, irrational behavior that could derail those objectives? In what sense? Just in terms of competitors who might not be able to respond to the change. Okay. Yeah Yeah of sustainability that they look to be particularly aggressive on price or other actions which could actually slow the progress you're trying to deliver. Well, I think what we may see is that, let's say if you look at the competitive landscape, in general, our competitors are local family-owned businesses in the different areas we operate. This is a complicated area where you need to be able to make investments into people like James and his team. You need to be able to have your system produce the kind of information so there is a clear scale benefit. What we're trying to do is, and that's why I was talking about increasing newer areas of competitive advantage. We're trying to make our local businesses basically more advanced in their local markets. I think what we will see is certainly when I listen to Helen, for instance, when she talks to the large supermarket chains or non-food retail chains, these have all sustainability departments. They want to have a mature, good level conversation about what is happening because their CEO is expressing certain commitment and targets, and they will need the supply chain to support them in delivering these targets. If you are a small or medium-sized family-owned business in Belgium or in Czech Republic, I think these people will start to struggle with responding to these things. You also see more and more, let's say, government-related and larger customers integrating these into tender processes where maybe in the past it was just price and quality. Sustainability becomes an important part in the overall equation. We had some interesting wins in the U.K. also, isn't it, Andrew, where really the sustainability pitch has been very important in terms of landing these customers. Yes. Joining the dots there for in sort of three-five years, you really see this as a sustainable competitive advantage for Bunzl? Yes. Yeah. Great. Another question. George. George. Thanks. Yeah, it's George Gregory from Exane. Again, just one quick follow-up, please, in relation to M&A and ERP systems integrations. Just is that any easier now with sort of cloud-enabled ERP systems? Kind of where are you in that journey? I don't know if you can share any metrics in terms of the number of ERP systems you now operate across the group, perhaps your main vendor, anything that might help us get a better grasp of the level of cohesion across the group. Thanks. Okay, Richard? Yeah, look, obviously we acquire a lot of businesses, which means that there's a lot of ERP systems that come with those acquisitions. Alberto in Continental Europe, how many do you have? ERPs? 32 or so. 32. You got to think of this as a continual treadmill for us to bring these businesses in and then move them to what is generally a regionally preferred solution. There's no global one-size-fits-all within Bunzl, you know that. That's certainly true of IT. There is an aspiration to bring businesses into a region and then align them with the main regional choice. Look, I think the key point is that ERP systems are less crucial as perhaps they were. Our objective is to minimize them to broadly the financial systems, and then wrap around them best-of-breed solutions, which can be different in each region, in some cases, each country, albeit we do try to buy in region where we can. We wrap around those best-of-breed solutions, which means that we get the best of both worlds. We can minimize the transition effort on the ERP but maintain our familiarity with those best of breeds. Yes. If you look at the U.K. or you look at continental Europe, you'll see quite a bit of similarity when it comes to e-commerce platforms, web shops, basically, warehouse management system, route planning systems for the trucks, cash collection systems, EDI systems, bringing in invoices from suppliers, HR systems. That we call a base layer approach, where you sort of shrink your ERP, if it's a reliable ERP, towards more of accounting system, and then you add sort of best-of-breed solutions. Okay. Rajesh. Okay. We're on time, isn't it? Yeah, exactly. Sorry. Just on the sustainability piece again. I'm sure when you were looking at 2015 or 2010 on the portfolio of products you're selling, you must be thinking, "Okay, we need to turn green. These need to be more sustainable." Say 70% of our products will be replaced in the next five, six, seven years. You're at a position where half of that replacement has happened. What do you think is the average duration of the product portfolio you have now compared to, say, five years back, or the churn in product portfolio? Each year, would you be retiring 10% products and replacing with 10% new, or have that reduced, or has that remained stable? I think it's difficult to say also in terms of what's going to happen. The first thing we will need to work ourselves through is the COVID impact. If you look at retail and hospitality food service, obviously, there's quite a lot of consumables in that area. You will have seen that, and that's why we use 2019 as a benchmark also as a starting point. You would expect it to be coming down over that period. Now, you do see in certain single-use plastic categories, certainly in Europe, you see certain bans in place. I think that will continue to happen. I think the speed of replacement is probably also going to depend on, for instance, maybe more legislation happening, for instance, in the U.S. Canada is more advanced than the U.S. That obviously is a faster trigger, although we compare the situation in the U.S. with two years ago, and Jim can comment on it, is although there's this perception in the U.S. is well behind, the kind of conversation we have now with our large customers is almost like in Europe, isn't it, Jim? I think, in the U.S., and I think we still are behind. It's a very regional topic. The West Coast of the U.S., including Hawaii now, has certainly been at the forefront. You see it some in the Northeast. Where else you're seeing it, Frank, to your point, is with the very large customers that have gone out and made public targets and committed to reductions in their packaging use. It's still developing and evolving, and we expect to see it continue to accelerate, but I think we're still lagging behind, to your point. Okay. We have room for one last question. No further questions? Okay. Well, thank you very much for joining us today here in the Science Museum, or thank you for joining in online as well. It's been really great to share what we've been doing over the last couple of years and our strategy in the key areas going forward as well. We will now take you downstairs to the exhibition area. You will be able to see some of the products we've been talking about, raise the glass with us, and we all will be there spread out. If you want to do a bit more individual Q&A, you're more than welcome to do that. When you leave the room, we do have some bags for you with some interesting little presents in it that are also very much in the context of sustainability. Again, I hope you enjoyed this afternoon. If you have further questions, we hope to see you all downstairs. Thank you very much.