Bunzl (BNZL) H2 2024 earnings summary

Executive summary

• Achieved record acquisition spend of £883 million in 2024, with 13 acquisitions across multiple sectors and geographies, including entry into Finland and the significant Nisbets acquisition.

• Adjusted operating profit rose 7.2% at constant exchange rates to £976.1m, with operating margin expanding from 8.0% to 8.3%, driven by higher margin acquisitions and underlying improvements.

• Revenue grew 3.1% at constant exchange rates to £11,776.4m, with acquisition growth offsetting underlying revenue decline due to deflation and volume softness in North America in H1.

• Own brand penetration rose to 28%, supporting margin expansion, especially in North America, and sustainable own brand SKUs grew by 30%.

• Free cash flow generation of £634 million with 93% cash conversion, supporting self-funded acquisitions and shareholder returns.

Financial highlights

• Adjusted operating profit grew 7.2% to £976.1 million; adjusted EPS up 5.5% to 194.3p; reported basic EPS declined 4.8% due to currency translation losses.

• Revenue increased 3.1% at constant exchange rates to £11,776.4 million; net acquisitions contributed 5.1% to growth.

• Gross margin improved by 180 bps to 28.8%, driven by acquisitions and own brand growth.

• Return on invested capital was 14.8%, well ahead of WACC.

• Total dividend per share increased by 8.2% to 73.9p; 32nd consecutive annual increase.

Outlook and guidance

• 2025 outlook reiterates robust revenue growth from acquisitions and slight underlying growth, with operating margin expected to be maintained at 2024 levels.

• Net deflation expected to be a headwind in 2025; tax rate guidance at ~26%, net finance expense at ~£115 million.

• Commitment to allocate c.£700m per annum to value-accretive acquisitions and capital returns through 2027.

• Continued focus on margin management, cost efficiencies, and digital investments.