Bunzl (BNZL) H1 2024 earnings summary

Executive summary

• Achieved record acquisition spend year-to-date, surpassing £650 million with seven acquisitions announced, including major deals in the UK, Finland, Brazil, and Australia, and an active pipeline for further deals before year-end.

• Operating margin expanded to 8.0% from 7.4% in H1 2023, driving strong adjusted operating profit growth.

• Interim dividend per share increased by 10.4%, marking 31 consecutive years of annual dividend growth.

• Launched first-ever share buyback program, returning £250 million by March 2025, with further buybacks planned and a commitment to return to target leverage by 2027.

• Upgraded full-year profit forecast for 2024, supported by strong operating margin expansion and improving revenue trends.

Financial highlights

• Adjusted operating profit grew 7.4% at constant exchange rates, reaching £455.5 million.

• Revenue at constant exchange rates declined by 0.4% to £5,711.5 million, with acquisitions contributing 3.7% to growth.

• Adjusted EPS increased by 6.2% to 90.8p.

• Free cash flow rose 8.4% to £310.4 million, with 100% cash conversion.

• Adjusted net debt to EBITDA at 1.5x, providing substantial headroom for acquisitions and capital returns.

Outlook and guidance

• Upgraded 2024 adjusted operating profit guidance, with margin expected moderately above 2023 and robust revenue growth at constant exchange rates, driven by acquisitions.

• Small decline in underlying revenue anticipated, with group operating margin expected to be moderately above 2023 levels.

• Tax rate guidance for 2024 at approximately 25.5%, net finance expense around £100 million, and dividend cover at 2.65x.

• Commitment to allocate ~£700 million per annum to acquisitions and capital returns through 2027.