Bunzl (BNZL) H1 2025 earnings summary

Executive summary

• Revenue grew 4.2% at constant exchange rates to £5,759.6m, driven by acquisitions, with underlying revenue broadly stable and improved Q2 performance.

• Adjusted operating profit declined 7.6% at constant exchange rates to £404.5m, with operating margin down from 8.0% to 7.0%, mainly due to North America and Continental Europe.

• Cash conversion was strong at 97%, but free cash flow fell 22% year-over-year due to lower operating profit.

• Five acquisitions announced year-to-date with £120m committed spend; acquisition pipeline remains active.

• Interim dividend per share increased by 0.5% to 20.2p; share buyback resumed with £86m to be completed by year-end.

Financial highlights

• Adjusted operating profit: £404.5m, down 7.6% at constant rates.

• Operating margin: 7.0% (down from 8.0% prior year).

• Adjusted EPS: 77.8p, down 10.6% at constant rates.

• Free cash flow: £243m, down 22% year-over-year.

• Adjusted net debt to EBITDA: 1.9x, in line with target range.

Outlook and guidance

• Moderate revenue growth expected for 2025 at constant exchange rates, driven by acquisitions and flat underlying revenue.

• Group operating margin for 2025 expected moderately below 8.0%, with margin decline moderating in H2.

• Positive early indicators in July; profit and margin trends in line with full-year expectations.

• Second half margin expected to benefit from improvement actions, easier comparatives in Europe, and Nisbets synergy benefits.

• Net adjusted finance expense for 2025 expected to be around £120m; effective tax rate around 26.0%.