Financial Report for six months ended 30 June 2025

Profit in-line with expectations; operational performance improvement on track

Bunzl plc, the specialist international distribution and services Group, today publishes its financial report for the six months ended 30 June 2025.

Highlights include:

• Revenue increased by 4.2% at constant exchange rates*; with underlying revenue* broadly stable over the period in a challenging operating environment
• Operating margin* declined from 8.0% to 7.0%, driven by specific large businesses in North America and Continental Europe; adjusted operating profit* declined 7.6% at constant exchange rates; reported operating profit declined 14.0%
• Good progress being made with actions taken to improve operational performance in North America and Continental Europe. 2025 outlook reiterated; expect these actions to drive an improved performance in the second half and support a moderated year-on-year operating margin decline compared to the first half
• Five acquisitions announced August year to date, including Quindesur and Guantes Internacionales, S.A. de C.V. (“Gisa”) announced today, with c.£120 million committed spend; pipeline remains active
• Adjusted net debt to EBITDA* of 1.9x; leverage expected to be toward the lower end of our target range of 2.0 to 2.5 times at the end of the year, after potential acquisition spend and a completed 2025 share buyback programme
• Buyback resumed with the intention of completing the remaining £86 million of our previously announced £200 million 2025 share buyback programme in the second half of the year; £114 million of the buyback was completed in the first half
• Interim dividend per share grew by 0.5%; committed to sustainable annual growth; expected dividend cover in 2025 of approximately 2.4 times

Commenting on today’s results, Frank van Zanten, Chief Executive Officer of Bunzl, said:

"We remain strongly focused on improving performance across the business. Actions taken in our largest business in North America have re-energised the team and we are seeing early positive indicators of success, with the profit momentum seen through the first half in-line with our expectations. This is a market-leading business, and while the benefits of some actions are not expected to drive improvements until well into 2026, we are focused on creating a stronger platform for its long-term profitable growth. In Continental Europe, the operating environment remains challenging, and our French business has been particularly impacted by ongoing deflation and a weak market, but we have seen improved performance in Benelux.

We also welcome two new businesses to Bunzl; Gisa, a leading PPE distributor in Mexico, and Quindesur, a foodservice distributor with a strong presence in Southern Spain. Our acquisition pipeline remains active, and we see significant opportunity for continued expansion.

We are reiterating our Group outlook for 2025 and expectations for an improved performance in the second half, driven by the actions taken. Notwithstanding a challenging first half for Bunzl, and the ongoing uncertain macro economic backdrop, our teams are very focussed on improving performance, and I remain confident in Bunzl’s underlying resilience and strong business model, and its ability to deliver consistent compounding growth in the medium-term.”

Alternative performance measure (see Note 2)

Strategic progress:

• North America actions, focused on improving execution in our largest business in the region, have included leadership changes, cost saving actions, re-balanced decision-making between central and local teams, improved branded supplier engagement, and further own brand launches; early indicators are positive and in-line with expectations
• Continental Europe has an enhanced focus on reducing costs, to offset inflation, and is focused on pipeline management. Net business wins are expected in the second half of the year, and procurement opportunities are being pursued operating margin decline compared to the first half
• We continue to drive operating efficiencies with 16 warehouse consolidations and relocations, alongside continued investments into digital solutions and automation
• Five acquisitions announced August year-to-date, inclusive of our entry into Healthcare in Chile, with a total committed spend of c.£120 million
• Processed 75% of orders digitally, compared to 73% in the first half of 2024, supporting customer stickiness and increasing low touch customer ordering
• Own brand c.30% of Group revenue compared to c.28% over 2024, supported by the acquisition of Nisbets; own brands continue to complement the depth of our third-party supplier relationships 

Business area highlights:

• North America: Adjusted operating profit decline driven by execution challenges in our largest business, that primarily  services foodservice and grocery customers, in a challenging macro economic environment. Actions taken to improve performance in the second half of the year have progressed to plan, with early indicators being positive and in-line with expectations. Excluding the largest business, North America adjusted operating profit was more stable, albeit still impacted by the uncertain environment
• Continental Europe: Broadly stable underlying revenue in a challenging market. Adjusted operating profit particularly impacted by: performance in France, where ongoing deflation, reflective of post Covid-19 pricing normalisation in cleaning & hygiene businesses, and a weak economy has continued to be compounded by operating cost inflation and a relatively high cost to serve operating model; and revenue decline in certain online businesses. Benelux trading has improved compared to the second half of 2024; Spain has been resilient, following a good performance in the prior year
• UK & Ireland: The acquisition of Nisbets in May 2024 has driven total revenue growth. Nisbets has seen good sales momentum, despite a more challenging trading environment, however profitability was impacted by product mix, driven by demand shifts in the current trading environment, and slower than anticipated progress on maximising warehouse automation; existing foodservice businesses performed well over the period. The UK & Ireland operating margin decline has been driven by the dilutive impact of consolidating Nisbets, reflective of it tending to have a seasonably lower margin in the first half of the year compared to the second half and given its profit performance over the period. Furthermore, our operating margin in our cleaning & hygiene business was impacted by continued selling-price deflation. Very good progress made on synergy projects with Nisbets; will largely benefit from the second half
• Rest of the World: Underlying revenue growth driven by strong inflation support in Latin America and moderate volume growth in Asia Pacific. Trading in Brazil became more challenging in the second quarter, with challenges to passing through all currency-related cost increases to customers in a weakening market impacting operating margin. Good performance in the Asia Pacific healthcare. Business area operating margin remained strong despite a small decline, driven by Latin America

Outlook

Guidance for 2025 reiterated:

• The Group expects moderate revenue growth in 2025, at constant exchange rates, driven by announced acquisitions and broadly flat underlying revenue
• Group operating margin for the year is expected to be moderately below 8.0%, compared to 8.3% in 2024
• Moderation of year-on-year operating margin decline in the second half, compared to the first half, expected to be driven by: the benefit of actions taken in North America and Continental Europe to improve performance; easier comparatives in Continental Europe; and Nisbets synergy benefits. The Group’s second half operating margin is seasonally higher
• Other guidance items: 1) net adjusted finance expense* in 2025 to be c.£120 million; full year effective tax rate will be around 26.0%

* Alternative performance measure (see Note 2)

Enquiries:

Note: A live webcast of today’s presentation to analysts will be available on www.bunzl.com, commencing at 9.30 am.

HALF YEARLY FINANCIAL REPORT FOR SIX MONTHS ENDED 30 JUNE 2025