17th May 2005 07:02
Bunzl PLC17 May 2005 PART II OF III Bunzl plc Proposed Demerger of Filtrona plc Introduction On 28 February 2005 Bunzl announced that it had decided it was the right time todemerge its successful Filtrona organisation from its growing and highlyprofitable Outsourcing Services business. Bunzl announces that documentationwill today be sent to Bunzl Shareholders confirming full details of the proposedDemerger and separate listing of Filtrona plc ("Filtrona" or the "Company"). The Demerger will establish Filtrona as a separately listed company. Bunzl willcontinue to be listed on the Official List and the London Stock Exchange'smarket for listed securities. The Filtrona Shares are expected to commence trading on the London StockExchange and admitted to the Official List on 6 June 2005. It is expected that, initially, both Bunzl and Filtrona will be constituents ofthe FTSE 250 Index. Bunzl will remain in and Filtrona will be part of theSupport Services sector. The Demerger is to be effected by Bunzl declaring a special dividend equal tothe book value of Bunzl's shareholding in Filtrona International Limited, theintermediate holding company of the Filtrona Group. This special dividend willbe satisfied on Demerger by the allotment and issue by Filtrona of FiltronaShares to Bunzl Shareholders on the Bunzl share register at the Demerger recorddate on the basis of one Filtrona Share for each Bunzl Share held. Thisrequires, amongst other things, the approval of Bunzl Shareholders by ordinaryresolution at the Extraordinary General Meeting of the Company, to be held on 2June 2005. Immediately after the Demerger is effective, and upon admission of the FiltronaShares to the Official List of the UK Listing Authority, the share capital ofFiltrona will be consolidated on the basis of one consolidated Filtrona Sharefor every two non-consolidated Filtrona Shares and the share capital of Bunzlwill be consolidated on the basis of seven consolidated Bunzl Shares for everynine non-consolidated Bunzl Shares. Overall, as a result of the Demerger and the share consolidations describedabove, Bunzl Shareholders will receive: 14 consolidated Bunzl Shares and 9 consolidated Filtrona Shares for every 18 non-consolidated Bunzl Shares held at the Demerger record date In addition, shortly after the Demerger and the Filtrona share consolidation, itis proposed that the capital of Filtrona will be reduced in order to createdistributable reserves in Filtrona. The reduction of capital was approved by aspecial resolution of the current Filtrona Shareholders on 13 May 2005, and issubject to the approval of the Court. Background to and reasons for the Demerger Since 1991 the structure of Bunzl has been simplified by selling businesses withweaker returns and relatively poor competitive positions and reinvesting theproceeds from these disposals to grow businesses where it has superior returns,good international competitive positions and the potential to grow. The pursuitof this strategy has resulted in Bunzl having two business streams, OutsourcingServices and Filtrona, both of which have these features but which have littleor no commercial overlap between them. The Bunzl Board has therefore decided toseparate these two fundamentally different component parts by demerging theFiltrona Business from Bunzl. Filtrona plc, the holding company of the demergedFiltrona Business, will be an independent public company, while Bunzl willbecome a simpler organisation concentrating on the Outsourcing Services businessstream. As such Bunzl will be a focused, international, value-added distributionand outsourcing Group. The Bunzl Board believes that the Demerger will benefit Bunzl Shareholders asthe separate businesses will be able to: • focus on their own strategic objectives and develop appropriate organisations, structures and procedures to achieve these objectives;• retain, motivate and recruit key personnel more effectively;• develop appropriate capital structures and dividend policies; and• develop their own focused investor base and access capital markets independently. The Bunzl Board believes that shareholder value will be created through theDemerger and that Filtrona and Bunzl will be strong businesses in their ownright, with good returns and good international competitive positions, and willprosper as separate listed entities. Information on Filtrona Summary description of Filtrona General Filtrona is an international, market leading speciality plastic and fibreproducts supplier. It is a business area of Bunzl which, by concentrating onniche international markets, has been able to establish and develop strongpositions in chosen product categories. Filtrona is segmented into PlasticTechnologies and Fibre Technologies, each contributing similar levels of profitsto the Bunzl Group. Plastic Technologies produces, sources and distributesprotection and finishing products, self-adhesive tear tape and certain securityproducts, as well as proprietary and customised plastic extrusions and packagingitems for consumer products. Fibre Technologies focuses on the production andsupply of special filters for cigarettes and bonded fibre products such asreservoirs and wicks for writing instruments and printers, household productsand medical diagnostic devices. Filtrona believes that many of the markets andsegments within which it operates have the desirable combination of good growthpotential and robust defensive qualities. Across these niche international markets, Filtrona has a number of marketleading blue chip customers including Altria (Philip Morris), Boeing, BritishAmerican Tobacco, Carlsberg, General Electric, General Motors, Hewlett Packard,Nestle, Newell Rubbermaid, Reckitt Benckiser and Unilever. Filtrona's emphasison innovation, quality and service underpins these long standing customerrelationships. Filtrona is a well invested global business, headquartered in the UK, with 40manufacturing facilities, 32 distribution outlets and sales offices and threeresearch facilities spread across 22 countries in the Americas, Europe and Asia.Filtrona employs some 5,200 people and its senior management comprises aninternational team of nine individuals who have an average experience in thebusiness of nearly 10 years. In 2004, under UK GAAP, Filtrona generated annual sales of £477.5 million (2003:£452.6 million), EBITDA of £74.3 million (2003: £71.3 million) and operatingprofit before goodwill amortisation of £54.2 million (after an allocation ofBunzl corporate costs) (2003: £51.1 million). Plastic Technologies generatedsales of £241.5 million (2003: £224.1 million) and operating profit beforegoodwill amortisation of £33.8 million (2003: £28.6 million) with an EBITAmargin of 14%. Fibre Technologies generated sales of £236.0 million (2003:£228.5 million) and operating profit before goodwill amortisation of £27.8million (2003: £31.1 million) with an EBITA margin of 12%. Of the total sales in2004, approximately 43% originated from Europe, 39% from North America and 18%from the rest of the world. As at 31 December 2004 Filtrona had net operatingassets of £261.2 million and net debt of £120 million. Application has been made for the Filtrona Shares to be admitted to the OfficialList and to the London Stock Exchange's market for listed securities. Filtronais to be classified within the FTSE Support Services sector and is expected tobe a constituent of the FTSE 250 Index. Plastic Technologies Plastic Technologies produces, sources and distributes protection and finishingproducts, self-adhesive tear tape and certain security products as well asproprietary and customised plastic extrusions and packaging items for consumerproducts. Filtrona is a market leader in the substantial fragmented protection andfinishing market supplying plastic caps and plugs for protecting and finishingindustrial threads, pipes, flanges and tubes as well as parts to protect,restrain or insulate wires or electrical components. A broad product offering,sophisticated marketing and IT infrastructure, combined with an expandinginternational supply and distribution network, underpins its strengths in theselow cost but critical components. Filtrona is the global market leader in self-adhesive tear tape, which is usedfor the easy opening of fast moving consumer goods packaging ( e.g. cigarettesand biscuits) as well as brand communication and security. The materials andprinting technology, together with its international production and distributioncapability, are the key sources of differentiation in a market where trendstowards sophisticated value-added tapes for brand promotion, security andtraceability are driving both volume and value growth. Filtrona is also a supplier of extruded thermoplastic profiles, sheet andspecial tubing for a wide range of applications such as lighting, fencing,transportation, point of sale displays, refrigeration, medical supplies andtraffic control. It is a market leader in the US and, through its Enitorbusiness in the Netherlands, in Europe in its chosen product categories, wherein these highly fragmented markets it benefits from economies of scale and broaddistribution capability. In addition Plastic Technologies, through Globalpack, is a market leadingproducer and supplier of packaging items for toiletries and cosmetics in theBrazilian market. Based in Brazil it supplies containers, closures and, throughits joint venture Euro-Matic Filtrona, roll-on balls to the market leadingproducers of deodorant and cosmetic products. Fibre Technologies Fibre Technologies focuses on the production and supply of special filters forcigarettes and bonded fibre products such as reservoirs and wicks for writinginstruments and printers, household products and medical diagnostic devices. In the niche special filters market, Filtrona is the independent global marketleader. Filtrona expects that the increasing trend towards potentially reducedexposure products (PREPs), lower tar levels driven by legislation and highervalue differentiated cigarettes will underpin strong growth in the specialfilters market. Filtrona has utilised the bonded fibre capillary technology applied in theproduction of cigarette filters to develop enhanced manufacturing techniques forwriting instrument ink reservoirs in which Filtrona is also now the globalmarket leader. Bonded fibre technology has a wide variety of current andpotential applications and Filtrona has a growing share of the medicaldiagnostic wick and reservoir market. It also supplies the wicks used inhousehold fragrance products and is actively developing other commercialapplications from this technology. Strengths Track record of profitable, cash generative growth Filtrona's long term sales growth has been strong, with an average annual salesgrowth over the past 10 years of 11% (12% at constant exchange rates). This hasbeen driven by strong organic growth, which over the last 10 years has averaged5% per annum (based on separately identifiable businesses) on a constantexchange rate basis, supplemented by a series of strategic acquisitions. Filtrona has achieved consistent double-digit EBITA margins during this 10 yearperiod (11.4% for the year ended 31 December 2004 under UK GAAP). Filtronabelieves that its commitment to customer service, technology leadership andgeographic reach underpin this sustained margin and sales growth. The business also has a strong track record of converting earnings into cash.Over the last three years Filtrona's cash conversion rate has averaged 73%despite significant investment in the business, particularly in 2004. Favourable industry trends Growth in demand for many of Filtrona's products and services is furtherenhanced by certain market dynamics. In Plastic Technologies, the tear tape market is experiencing an increasingtrend towards more sophisticated value-added tapes for brand promotion, securityand traceability. Filtrona is well positioned to benefit from this trend both asthe global market leader for self-adhesive tear tape and with its materials andprinting technology. The trend towards supplier consolidation (i.e. the move bylarge businesses to reduce the number of suppliers which they use) withinindustrial markets is expected by Filtrona to continue to play to the strengthsof the protection and finishing products business, which offers a wide andexpanding product range. This trend is also likely to benefit Filtrona'sextrusion business with its multi-site manufacturing capability. In Brazilroll-on deodorant products continue to take market share from more traditionalpackaging formats. In Fibre Technologies there is an increasing trend within the cigarette industrytowards utilising special filters, as major multi-nationals focus on key brandswith a special filter which provide differentiation from their competition.Special filters, where Filtrona is the global market leading independentmanufacturer, are estimated by Filtrona currently to represent 12% of the totalcigarette filter market. Special filter volumes are expected by Filtrona to growfaster than the overall cigarette market as demand for lower tar levelscontinues to rise and as PREPs are introduced into the market. Investment inresearch and development has given Filtrona market leading capillary expertisewhich has driven product innovation in each of its key product lines. Thedevelopment of the writing instrument market in Asia is accelerating andFiltrona is well positioned to serve this market from its new facility in Ningbo(near Shanghai), China. Strong niche international market positions Filtrona has strong positions within each of its niche markets, borne out by itsworld leading position in protection and finishing products, self-adhesive teartape, special filters and certain bonded fibre components. The plastic profileand sheet market is significantly more fragmented but, within the US and theNetherlands where it is active, Filtrona is a leading supplier in its principalserved markets. Through Globalpack, Filtrona has a strong market position inBrazil in packaging for the toiletries and cosmetics markets. These leading positions within niche markets have enabled Filtrona to deliverhigh added value with excellent service from a position of being a low costproducer, thereby delivering attractive margins over a long period. Filtronabelieves that high levels of customer service, innovation and technologyleadership, rapidly developing IT and distribution infrastructure and investmentin capabilities and people are key sources of differentiation. Long term blue chip customer relationships Filtrona has developed its business by maintaining a close relationship with aportfolio of blue chip customers who are successful market leaders within theirrespective markets. The high standards of service and supply demanded by suchcustomers have helped to drive continuous improvement throughout Filtrona. Filtrona enjoys long standing and strong customer relationships and manageslarge customers via a key account management structure. This enables customers'organisations to be accessed at different levels, thereby ensuring that Filtronabetter understands and responds to their needs. Filtrona's senior management hasdeveloped and maintains close relationships with corresponding senior managementin Filtrona's customers' businesses. Well invested global infrastructure Filtrona has a strong capital investment policy and has a well invested andefficient production, sourcing and supply infrastructure. This ensures not onlythe high product quality that customers demand but also the levels of serviceand geographic reach that provide an important differentiator compared withcompetitors. Filtrona has effectively leveraged individual locations by offeringsister businesses the opportunity to use the existing infrastructure andmanagement to exploit new opportunities in a fast and cost effective manner. In Richmond (Virginia), Sao Paulo (Brazil), Bangalore (India) and Surabaya(Indonesia), existing Fibre Technologies locations have provided a base toaccelerate the growth of the tear tape business. In Brazil Filtrona's protectionand finishing products business outsources local requirements to Globalpack andin China Filtrona's protection and finishing products representative office isbased at the fibre products facility in Ningbo. The experience of managing theextrusion facility in Monterrey (Mexico) has helped to facilitate a rapid andsmooth start up of the new special filters facility there. Experienced, stable management team Filtrona's senior management comprises an international team of nine individualswho have an average experience in the Filtrona Business of nearly 10 years.Senior management combines strong manufacturing process and product developmentknow-how with a detailed knowledge of customers' needs and hence excellentlevels of service. The senior management team is supported by motivated andenthusiastic employees, which is evidenced by the low levels of staff turnoverwithin the businesses. Track record of successful acquisitions Filtrona's management has extensive experience of integrating acquisitions. Overthe last five years, Filtrona has acquired 15 businesses, and has spent £60million (£55 million in Plastic Technologies, £5 million in Fibre Technologies)on acquisitions which have extended the global footprint, broadened the productoffering within its chosen markets or provided access to key customers andleveraged Filtrona's low cost product supply base. Filtrona is highly selective in the acquisitions it makes, focusing on highlevels of returns. The consistently high level of return on capital employedthat Filtrona has maintained, which has averaged 26% over the last three years,is indicative of Filtrona's ability to drive value from selective acquisitions. Well positioned for future growth Filtrona is well positioned for future growth. Key drivers of growth areexpected to be: • continued development of product lines in protection and finishing products and in plastic profile and sheet manufacturing;• continued growth of brand promotion, security and track and trace opportunities;• commercialisation of bonded fibre developments;• new packaging formats at Globalpack driven by product innovation;• the development of more sophisticated filter products for PREPs leading to further special filter manufacturing outsourcing decisions by tobacco manufacturers;• continued growth of high value-added bonded non-woven fibre products;• the recently built manufacturing facilities in lower cost locations coming fully on stream; and• the emergence of Asia as a demand generator and source. Strategy Filtrona has pursued a consistent strategy of focusing its resources on nicheinternational markets where it has, or can develop, a significant competitiveadvantage and which have good growth potential. The operations are strongly cashgenerative and have allowed complementary acquisitions to be funded out ofinternally generated cash. Following the Demerger the Filtrona management team will continue this strategyindependently, focusing on building Filtrona's core activities and achievingsustainable, profitable growth through organic investment and acquisitions,while maintaining its market leading positions and strong customerrelationships. The Filtrona business strategy is to continue to pursue the following: • enhancement of competitive position in each line of business;• expansion and adaptation of the global footprint;• reduction of production costs;• improvement of service and supply chain efficiency; and• enhancement of the business through selective acquisitions. Financial information The table below summarises the trading record of Filtrona for the three yearsended 31 December 2004. IFRS UK GAAP UK GAAP UK GAAP 2004 2004 2003 2002 £m £m £m £m Sales 477.5 477.5 452.6 442.4Operating profit (Note 1) 49.6 54.2 51.1 48.0Profit on ordinary activities beforetaxation 47.3 49.4 45.7 41.2Trading cash flow (Note 2) 30.7 30.7 44.4 36.4Cash conversion rate 62% 57% 87% 76%Capital employed 209.4 209.4 193.6 197.0Return on capital employed 23.7% 25.9% 26.4% 24.4% Notes 1 Operating profit is stated before charging interest, taxation and goodwill/intangible amortisation2 Trading cash flow is net cash inflow from operating activities less net cashoutflow for capital expenditure Financial commentary Sales grew in 2004 and 2003 under UK GAAP by 5.5% and 2.3% respectively. Atconstant exchange rates sales growth for 2004 and 2003 was 12.2% and 5.6%respectively. Under UK GAAP operating profit before goodwill amortisation grew by 6.1% and6.5% in 2004 and 2003 respectively. At constant exchange rates, growth for 2004and 2003 was 14.6% and 11.3% respectively. Accounting under IFRS reduced 2004 reported profit on ordinary activities beforetaxation by a combination of recurring and non-recurring adjustments which total£2.1 million. Recurring adjustments were the expensing of share options and thenon-amortisation of goodwill and the amortisation of other intangible assets.Expensed share option costs were £1.1 million in 2004 and the amortisationcharge reduced from £3.0 million under UK GAAP to £0.5 million under IFRS. Non-recurring IFRS charges in 2004 were: (i) the reduction in the carrying value of the manufacturing facility in Germany. Under UK GAAP the £1.3 million charge was permitted to be offset against this facility's revaluation reserve (under IFRS it is charged tothe income statement); and (ii) £2.2 million of fair value adjustments which were recognised in goodwill under UK GAAP have been charged to the income statement under IFRS. Terms of the Demerger The Demerger is to be effected by Bunzl declaring a special dividend equal tothe book value of Bunzl's shareholding in Filtrona International Limited, theintermediate holding company of the Filtrona Group. This special dividend willbe satisfied on Demerger by the allotment and issue by Filtrona of FiltronaShares to the Bunzl Shareholders on the Bunzl share register at the demergerrecord date on the basis of one Filtrona Share for each Bunzl Share held. Thisrequires, among other things, the approval of Bunzl Shareholders by ordinaryresolution at the Extraordinary General Meeting to be held on 2 June 2005. Immediately after the Demerger is effective, and upon Admission, the sharecapital of Filtrona will be consolidated on the basis of one consolidatedFiltrona Share for every two non-consolidated Filtrona Shares and the sharecapital of Bunzl will be consolidated on the basis of seven consolidated Bunzlshares for every nine non-consolidated Bunzl Shares. Overall, as a result of the Demerger and the share consolidations describedabove, Bunzl Shareholders will receive: 14 consolidated Bunzl Shares and 9 consolidated Filtrona Shares for every 18 non-consolidated Bunzl Shares held at the Demerger record date In addition, shortly after the Demerger and the Filtrona share consolidation, itis proposed that the capital of Filtrona will be reduced. This will createdistributable reserves in Filtrona. The Filtrona Shares and the consolidated Bunzl Shares are expected to commencetrading on the London Stock Exchange and to be admitted to the Official List on6 June 2005. Filtrona Board The Filtrona Board consists of the Chairman, Chief Executive, Finance Directorand three non-executive Directors as follows: Jeff Harris (aged 57) - Chairman Mr Harris was appointed Chairman of Filtrona on 12 May 2005. He was Chairman ofAlliance Unichem plc from 2001 to 2005, having previously been Finance Directorof UniChem plc since 1986, Chief Executive since 1992 and Chief Executive of theenlarged Alliance UniChem plc since 1997. He is also a non-executive directorAssociated British Foods plc, Anzag AG and Bunzl. Mark Harper (aged 49) - Chief Executive Mr Harper joined Filtrona in 1986 and held a number of general managementpositions, including Managing Director of Moss Plastic Parts in Europe andPresident of Alliance Plastics in the US, before being appointed ManagingDirector of Filtrona in 1996. He was appointed to the Bunzl Board in 2004. Onthe Demerger becoming effective he will cease to be a director of Bunzl. Steve Dryden (aged 37) - Finance Director Mr Dryden was appointed Finance Director of Filtrona in 2002 and prior to thatwas Finance Director of a group of the Plastic Technologies businesses between1999 and 2002 and Moss Plastic Parts between 1996 and 1998. Prior to joiningFiltrona he worked in various finance positions in Rolls-Royce plc. Paul Drechsler (aged 49) - non-executive Director Mr Drechsler was appointed as a non-executive Director of Filtrona on 12 May2005 and is the senior independent non-executive Director. He is Chief Executiveof Wates Group, having been appointed in 2004. Prior to this, he spent 25 yearsat Imperial Chemical Industries plc where his experience included positions inBrazil, the Netherlands and the US and Chairmanship of the ICI pension fund. Hewas appointed to the ICI board as an executive director in 1999. Adrian Auer (aged 56) - non-executive Director Mr Auer was appointed as a non-executive Director of Filtrona on 12 May 2005. Hewas Group Finance Director of RMC plc from 2002 to 2005 and at Taylor Woodrowplc from 2000 to 2002. He was previously Finance Director of Admiral plc andSWALEC (South Wales Electricity). He is currently a non-executive director ofBespak plc and Foseco plc and is the non-executive Chairman of Readymix plc. Paul Heiden (aged 48) - non-executive Director Mr Heiden was appointed a non-executive Director at Filtrona on 12 May 2005. Hehas been the Chief Executive of FKI plc since 2003. Previously with Hanson plc,he moved to Rolls-Royce plc in 1992, becoming the director responsible for itsIndustrial Businesses in 1997, and Finance Director in 1999. He will resign fromthe Bunzl Board on the Demerger becoming effective, having been a non-executivedirector since 1998. Filtrona current trading and prospects In 2004 Filtrona again showed its strength as a global supplier of specialityproducts with excellent increases in sales and operating profit at constantexchange rates. The increases in the second half of 2004 were greater than thosein the first and Filtrona has continued to trade strongly in 2005. Filtrona expects Plastics Technologies to continue to grow as investments inmarketing programmes, distribution infrastructure and new plant and equipmentenhance its competitive position and capability. In Fibre Technologies Filtrona expects growth to continue as new facilities inMexico and China come fully on stream and sustained investment in research anddevelopment delivers new products and applications. Filtrona's position as a leading supplier in the niche markets it serves andcontinued investment in lowering unit cost, improving service and supply chainefficiency, and in developing new products give Filtrona confidence that it willsustain its positive development. As a result the Filtrona Board is confident inthe financial and trading prospects of Filtrona for the current financial year. Filtrona dividends Had the Demerger been effective throughout the year ended 31 December 2004, inthe absence of unforeseen circumstances and taking into account the terms of theDemerger and the Filtrona Share Consolidation, the Filtrona Board would haverecommended total dividends for the year ended 31 December 2004 of 5.9 pence perconsolidated Filtrona Share. Following the Demerger Filtrona will pursue a progressive dividend policy thatwill seek to provide growth in dividends per share while maintaining appropriatelevels of dividend cover. It is expected that Filtrona will declare its firstinterim dividend at the time of its interim results, which will be announced on30 August 2005, taking account of the performance of the Filtrona Businessduring the first half of 2005. Post-Demerger Bunzl Following the Demerger Bunzl will be a focused, international, value-addeddistribution and outsourcing Group with operations in North America, Europe andAustralasia. Bunzl will be a leading supplier of a range of products, includingoutsourced food packaging, disposable supplies and cleaning and safety productsfor supermarkets, redistributors, caterers, food processors, hotels, contractcleaners, non-food retail and other industrial users. Bunzl's management team has a strong record of producing consistent, long termsales and profits growth, with a high return on operating capital across theOutsourcing Services business. Outsourcing Services' distribution capability,extensive product offering and cost advantages have enabled Bunzl to grow inline with its customers' expansion and to increase market share. Organic growthhas been further complemented by acquisitions to increase market presence inestablished markets and develop Bunzl's service offering in new and developingmarkets. Following the Demerger, on a pro forma basis under IFRS, Bunzl would havereported sales of £2,438.5 million and operating profit before intangibleamortisation of £173.8 million for the year ended 31 December 2004, with netassets of £382.1 million and net debt of £306.5 million at 31 December 2004. Bunzl current trading and prospects Growth in sales and operating profit in Outsourcing Services increased during2004 with second half growth being greater than that in the first half. Renewedmomentum in the US during the fourth quarter and the impact of achieving scaleadvantage across Europe and Australasia have continued during 2005. North America is expected to continue to grow as a result of renewed momentum inacquisition activity and increased sales to higher growth areas such asredistribution, food processors, convenience stores and the jan/san market.Generally firm product prices, as a result of higher commodity input prices tosuppliers, should prevent growth being eroded by deflation, certainly in theimmediate future. In Europe and Australasia growth is expected to continue as recent acquisitionsare integrated into the business. Future acquisition activity is expected toexpand Bunzl's geographic coverage and deepen its participation in existingmarkets. The cost savings and efficiency gains associated with Bunzl's increasedscale should continue to deliver benefits. Bunzl's strong focused competitive position in its international markets and itsability to enhance growth through acquisitions give it confidence that it willmaintain its momentum and continue its positive development. As a result theBunzl Board is confident in the financial and trading prospects of Bunzl for thecurrent financial year. Bunzl dividends The Bunzl Board intends to declare an interim dividend at the time of Bunzl'sinterim results on 30 August 2005 in respect of the six months ending 30 June2005, having regard to the performance of the Outsourcing Services business. Bunzl Board changes On 28 February 2005 the Company announced that the Bunzl Board will appointChristoph Sander as Chief Executive of Bunzl on completion of the Demerger.Anthony Habgood will remain as Chairman. The role of Deputy Chairman will ceaseto exist on completion of the Demerger and Pat Dyer, currently Deputy Chairman,will retire from the Bunzl Board at the end of 2005. Mark Harper and PaulHeiden, who will join the Filtrona Board as Chief Executive and non-executivedirector respectively, will resign from the Bunzl Board on completion of theDemerger. The Bunzl Board will then constitute a Chairman, a Chief Executive andtwo other executive Directors, four existing independent non-executiveDirectors, of which Jeff Harris will continue to act as the senior independentdirector and, in addition, Pat Dyer, who will continue to serve as anon-executive director until the year end. Jeff Harris will also become Chairmanof Filtrona. Extraordinary General Meeting The documents to be posted to shareholders contain notice of an ExtraordinaryGeneral Meeting of Bunzl for 10.00 a.m. on 2 June 2005, to be held at OneBunhill Row, London EC1Y 8YY. At the Extraordinary General Meeting ordinary resolutions will be proposed: (i) to approve the Demerger and the declaration of a special dividend in order to give effect to the Demerger; (ii) to approve the Bunzl share consolidation (iii) to authorise the Bunzl Directors to implement the Demerger and the Bunzl share consolidation; and (iv) to update the Bunzl Directors' authority in relation to the purchase by Bunzl of its own shares Timetable 2005 Extraordinary General Meeting of Bunzl 10.00 a.m. on 2 June Latest time and date for transfers of Bunzl Shares to be 9.00 p.m. on 3 Juneregistered in order for the transferee to be registered at the Demerger record date Demerger record date 7.00 a.m. on 6 June Expected effective date of Demerger, share consolidations, 8.00 a.m. on 6 Juneadmission and commencement of dealings in Filtrona Shares and consolidated Bunzl Shares on the London Stock Exchange and crediting of Filtrona Shares and consolidated Bunzl Shares to CREST accounts Analysts' meeting There will be a presentation to analysts at 11.15 a.m. today at JPMorganCazenove, 20 Moorgate, London, EC2R 6DA. Coffee will be served from 10.45 a.m. Enquiries Bunzl plc Tel: 020 7495 4950 Anthony Habgood, ChairmanDavid Williams, Finance Director Filtrona plc Tel: 01908 359100Mark Harper, Chief ExecutiveSteve Dryden, Finance Director JPMorgan Cazenove Tel: 020 7588 2828Julian CazaletNick GarrettRobert Constant Finsbury Tel: 020 7251 3801Roland RuddMorgan Bone This announcement shall not constitute or form any part of any offer orinvitation to subscribe for, underwrite or otherwise acquire, or anysolicitation of any offer to purchase or subscribe for, any shares in Filtronaplc ("Filtrona" or the "Company"). This announcement (or any part of it) shallnot form the basis of, or be relied on in connection with, any contract topurchase or subscribe for any shares in Filtrona or any commitment whatsoever. This announcement (i) does not constitute listing particulars, within themeaning of section 79 of the Financial Services and Markets Act 2000 ("FSMA");(ii) does not, and does not purport to, comply with the provisions of the saidsection 79 or of the Listing Rules made by the UK Listing Authority pursuant tosection 74 of FSMA (the "Listing Rules"); and (iii) does not contain all of theinformation required to be contained in listing particulars published inaccordance with the aforementioned provisions. You are referred to the ListingParticulars to be published by the Company on 17 May 2005 for a description ofthe Company, the businesses of the Filtrona group of companies (the "Group") andcertain risk factors relevant to the group. This announcement contains various forward-looking statements regarding eventsand trends that are subject to risk and uncertainties that could cause theactual results and financial position of the company to differ materially fromthe information presented herein. Forward-looking statements include informationconcerning possible and assumed future results of the company's operations,earnings, economic conditions affecting the industries in which the companyoperates and demand and other aspects of the group's businesses. When used inthis announcement the words "estimate", "project", "intend", "anticipate","believe", "expect", "should", and similar expressions, as they relate to thecompany or its management, are intended to identify such forward-lookingstatements, which speak only as of the date hereof. Filtrona undertakes noobligation to update publicly or revise any of the forward-looking statements,whether as a result of new information, future events or otherwise save inrespect of any requirement under English statutory law or the listing rules. The distribution of this announcement in certain jurisdictions may be restrictedby law, and persons into whose possession this announcement comes should informthemselves about, and observe, any such restrictions. Any failure to comply withthese restrictions may constitute a violation of the laws of any suchjurisdiction. The Filtrona shares to be distributed in connection with the demerger will notbe, and are not required to be, registered with the SEC under the US SecuritiesAct or any US state securities law. Neither the SEC nor any US State SecuritiesCommission has approved or disapproved the Filtrona shares or passed comment oropinion upon the accuracy or adequacy of this announcement. Any representationto the contrary is a criminal offence in the United States. JPMorgan Cazenove Limited (''JPMorgan Cazenove''), which is regulated in the UKby the Financial Services Authority, is acting exclusively for Bunzl plc andFiltrona plc and no one else in relation to the Demerger and Admission and willnot be responsible to anyone other than Bunzl plc and Filtrona plc for providingthe protections afforded to its customers or for providing advice in relation tothe Demerger and Admission. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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