* CEO sees more deals in 2021, ramp-up in M&A in one to two
years
* Q1 revenue up 10.4% at constant exchange rates
* Sales of non-COVID-19 products fall 5%, 2021 outlook
unchanged
* Shares drop more than 3%
(Writes through with CEO interview, analyst comment, shares)
By Pushkala Aripaka and Vishwadha Chander
April 21 (Reuters) - Bunzl is planning to step up
acquisitions of smaller businesses, its chief executive said on
Wednesday, after revenues were driven higher during the COVID-19
pandemic by a surge in demand for masks, gloves and hand
sanitizer.
The British firm, which supplies companies with personal
protection equipment, cleaning chemicals, disposable tableware
and other products, said on Wednesday that revenue for the
quarter to March rose 10.4% at constant currency.
The lift from demand for COVID-19 related products and from
acquisitions offset a 5% fall in sales from the company's other
offerings, however, and Bunzl maintained its annual guidance.
Shares were down more than 3% at 2,419 pence at 0843 GMT.
Bunzl closed three acquisitions in the first quarter and
expects that momentum to continue, Chief Executive Frank van
Zanten told Reuters.
"We use our cash flow to pay dividends, so we have a lot of
capacity for making acquisitions," he said. "We turned, last
year, more than a 100% of our profits to cash. So Bunzl is
really a cash machine."
Van Zanten, who joined the firm in 1994 when Bunzl acquired
his family-owned business in the Netherlands, said that post the
coronavirus crisis many businesses are likely to go up for sale
because of the "shocking period" they have had to endure.
"When you have all your wealth in one area, your family
business, that makes you think. I expect that in maybe one or
two years' time we will see a very strong acceleration of M&A
activity," the Dutch businessman said.
Bunzl expects enhanced hygiene trends to continue even as
lockdowns peter out and as the pandemic is brought under
control, with the company investing in these and sustainable
products.
Shore Capital analysts said in a note that Bunzl "has
remained in a position of strength throughout". "Others may see
a short-term recovery eclipsing Bunzl's performance, but beyond
this the group remains well placed," they said.
(Reporting by Vishwadha Chander and Pushkala Aripaka in
Bengaluru; Editing by Krishna Chandra Eluri and Jan Harvey)
Bunzl (BNZL)
