Bunzl plc (LON:BNZL), the specialist international distribution and services Group, has announced its trading statement for the period since 31 December 2022.
Bunzl’s diversified business model has delivered resilient growth, with Group revenue in the first quarter up 8.4% at actual exchange rates and 1.2% at constant exchange rates. At constant exchange rates, organic growth of 0.6% was driven by underlying revenue growth of 1.5%, partially offset by a negative trading day impact of 0.9%. Underlying revenue growth benefitted from continued inflation support but was impacted by the expected decline in Covid-19 related sales. Acquisitions contributed further growth of 2.7% at constant exchange rates, whilst the disposal of our UK healthcare business impacted revenue by 2.1%. Adjusted operating margin over the quarter was slightly ahead of expectations.
Underlying revenue growth in Continental Europe and UK & Ireland continued to be supported by very strong product cost inflation. Underlying revenue growth in North America, whilst benefitting from continued product cost inflation, was impacted by volume softness in our foodservice sector, some of which is anticipated to be temporary. Rest of the World was impacted by the decline in Covid-19 related sales, including the non-repeat of some larger orders made during the first quarter of last year.
While we see continued uncertainty relating to the macroeconomic environment, at constant exchange rates the Group continues to expect revenue in 2023 to be slightly higher than in 2022, driven by both organic growth and announced acquisitions, and partially offset by a small impact from the UK healthcare disposal. We expect Group adjusted operating profit to be resilient, with operating margin slightly higher than historical levels.
In April 2023, Bunzl entered into an agreement to acquire Dimasa, a distributor of cleaning and hygiene products in the Andalusia region of Spain. The business generated revenue of EUR 4 million (c.£3 million) in 2022. Since the start of the year, Bunzl has also completed the acquisitions of Arbeitsschutz-Express in Germany and Capital Paper in Canada.
Commenting on today’s announcement, Frank van Zanten, Chief Executive Officer of Bunzl, said:
“Our performance over the quarter continues to demonstrate the resilience of the Bunzl business model and its strategy. I am also pleased to welcome Dimasa to the Bunzl family. This business is a leading distributor in Southern Spain and strengthens our presence in this region. Our pipeline is active and our balance sheet remains strong, and we see significant opportunities for further acquisition growth to supplement our resilient organic growth.”
Insight event:
On 29 June 2023, Bunzl will be holding a second insight event for investors, with a focus on our North America Business Area. The virtual event will be hosted by Jim McCool, our CEO of North America. The event will be live from 3pm – 4.15pm BST and will include a Q&A session. Registration details will be made available on our website (www.bunzl.com) ahead of the event.
