Bunzl (BNZL) Trading Update summary

Financial performance and outlook

• Adjusted operating profit for 2025 is expected to be in line with previous guidance, with underlying revenue broadly flat but showing positive momentum in Q4, supported by new business wins in North America.

• Group revenue growth for 2025 is projected at 2%-3% at constant exchange rates, with operating margin around 7.6%, down from 8.3% in the prior year, but the margin decline is moderating in the second half.

• For 2026, moderate, volume-driven organic growth is anticipated, with a slight year-on-year decline in operating margin and ongoing economic and geopolitical uncertainties.

• Net finance expense is guided at GBP 120 million for both 2025 and 2026, with tax rates at 26%.

• Completion of a £200 million share buyback in 2025, with leverage expected just over 2.0 times at year-end.

Market conditions and business drivers

• Challenging end markets, especially in North America foodservice and subdued grocery, are holding back volume growth, with 2026 volume growth expected to be below real GDP.

• Pricing is expected to remain broadly neutral in 2026, with inflation in North America driven by tariffs and some deflation in paper, but not yet seen in Europe.

• Competitive landscape in North America remains stable, with value-added services differentiating offerings.

• Own brand (white label) products are expected to contribute 28%-30% of revenue in 2025, with a more measured pace of growth in 2026 and revenue contribution likely flat to slightly up.

• Macroeconomic challenges and uncertainty continue to impact key end markets, but the acquisition pipeline remains active.

Acquisitions, synergies, and cost management

• GBP 140 million committed to acquisitions in 2025, a low year due to macro uncertainty, but a more active pipeline and higher activity are expected in 2026.

• Acquisition of Damito s.r.o. in Slovakia, generating €14 million revenue in 2024, expands presence in Central Europe.

• Nisbets synergy benefits are contributing in the second half of 2025, with a full-year effect expected in 2026, impacting multiple regions and aiding margin stabilization.

• New business wins typically start at lower margins, normalizing over a couple of years through product substitution, own brand introduction, and pricing adjustments.

• Logistics and driver costs in North America have normalized, with no direct impact from ICE crackdowns on the company’s own drivers.