Bunzl (BNZL) H2 2025 earnings summary

Executive summary

• Adjusted operating profit declined 4% at constant exchange rates, impacted by organizational changes and end market weakness, especially in North America Distribution, which represents 30% of group revenue.

• Decisive actions and leadership changes improved operational performance, leading to a moderation of margin decline in H2 and a return to underlying revenue growth.

• Revenue grew 3% at constant exchange rates, driven by acquisitions and slightly positive underlying growth, with improvement in the second half.

• Eight acquisitions completed, including first entry into Chilean healthcare and presence in Slovakia; acquisition spend was lower at GBP 132 million.

• Strong platform for growth established, with confidence in medium-term opportunities and an active acquisition pipeline.

Financial highlights

• Revenue grew 3.0% year-over-year to £11,845m, with underlying revenue growth of 0.4% and net acquisitions contributing 2.9%.

• Adjusted operating profit: GBP 910 million, down 4.3% year-over-year; excluding share-based payment credit, GBP 902 million.

• Operating margin: 7.6% (excluding share-based payment credit), down from 8.3% in 2024.

• Adjusted EPS fell 5.2% to GBP 1.793; effective tax rate rose to 26%.

• Free cash flow was GBP 579 million, down 8.7% year-over-year but improved in H2.

• Total dividend per share increased 0.3% to 74.1p, marking 33 consecutive years of growth.

Outlook and guidance

• 2026 guidance reiterated: moderate revenue growth expected, with stable adjusted operating profit and slightly lower operating margin.

• Anticipate slight volume growth and broadly neutral selling price environment; operating cost inflation expected at 2%-3%.

• Net finance charge expected at GBP 125 million and tax rate at 26% for 2026.

• Acquisition activity expected to pick up in 2026, with bolt-on M&A as a focus.

• More normalized H1/H2 profit weighting expected in 2026.