Bunzl (adr) Stock Earnings Reports

Key points for investors: Bunzl reported H1 2025 revenue up 4.2% at constant exchange rates (GBP 5.8bn) driven mainly by acquisitions; underlying revenue was broadly stable (-0.2%). Adjusted operating profit fell 7.6% CEX to GBP 404.5m and group operating margin declined by ~100bps to c.7% (from 8.3% in 2024). The primary drag was the North America Distribution business (loss of a higher‑margin category, execution issues after centralisation) and weakness in parts of Continental Europe (notably France and some online businesses). Management has taken decisive corrective actions in North America (leadership change, more local decision authority, inventory reductions, renewed supplier engagement and further own‑brand launches) and cost actions in Europe; some benefits are already visible in Q2 and July trading. Cash conversion was strong at 97% but free cash flow fell 22% to GBP 243m; adjusted net debt including deferred/contingent consideration is GBP 1.9bn (adjusted net debt/EBITDA 1.9x). Capital allocation: interim dividend up 0.5% to 20.2p; management is resuming the previously announced GBP 200m buyback and will complete the remaining GBP 86m by year‑end; acquisition pipeline remains active (5 deals YTD, ~GBP 120m committed). Guidance reiterated: moderate revenue growth for 2025 (CEX) driven by acquisitions and broadly flat underlying revenue; group operating margin expected to be moderately below 8% for the year, with a moderation of the year‑on‑year margin decline in H2. Management expects material additional profit recovery from regained volumes to play out into 2026 but believes the business is fixable and long‑term growth and capital allocation priorities remain unchanged.