Bunzl plc (LON:BNZL), the specialist international distribution and services Group, today publishes its annual results for the year ended 31 December 2024.
| Financial results | 2024 | 2023 | Growth asreported | Growthat constantexchange* |
| Revenue | £11,776.4m | £11,797.1m | (0.2)% | 3.1% |
| Adjusted operating profit* | £976.1m | £944.2m | 3.4% | 7.2% |
| Adjusted profit before income tax* | £872.9m | £853.7m | 2.2% | 6.2% |
| Adjusted earnings per share* † | 194.3p | 191.1p | 1.7% | 5.5% |
| Dividend for the year∆ | 73.9p | 68.3p | 8.2% | |
| Statutory results | ||||
| Operating profit | £799.3m | £789.1m | 1.3% | |
| Profit before income tax | £673.6m | £698.6m | (3.6)% | |
| Basic earnings per share† | 149.6p | 157.1p | (4.8)% |
Highlights include:
| · | Revenue increased by 3.1% at constant exchange rates*; with underlying trends improving in the second half driven by slight volume growth and a small easing of deflation |
| · | Adjusted operating profit* increased by 7.2% at constant exchange rates*, reported operating profit increased by 1.3% |
| · | Further expansion of operating margin* from 8.0% to 8.3% |
| · | Adjusted earnings per share* increased by 5.5% at constant exchange rates*, reported basic earnings per share declined by 4.8%, largely due to the currency translation driven loss related to the disposal of our business in Argentina |
| · | Continued strong free cash flow* driven by highly cash generative model; cash conversion of 93% |
| · | 32nd year of consecutive annual dividend growth; total dividend per share increase of 8.2%. Dividend cover expected to normalise further in 2025 |
| · | 13 acquisitions announced in 2024 with record annual committed spend of £883 million; pipeline active; continued optimisation of our portfolio with the disposal of two small businesses in 2024 and an additional disposal announced today |
| · | 2025 outlook: maintaining guidance for robust Group revenue growth≠ and operating margin* in-line with 2024 |
| · | Announced commitment to allocate c.£700 million per annum primarily towards value-accretive acquisitions and, if required, returns of capital, in each of the three years ending 31 December 2027 |
| · | Completion of initial £250 million share buyback in 2024; further £200 million share buyback for 2025 underway |
Commenting on today’s results, Frank van Zanten, Chief Executive Officer of Bunzl, said:
“2024 has been a year of significant strategic progress for Bunzl in which our dedicated and entrepreneurial teams delivered strong adjusted operating profit growth, supported by further expansion in our operating margin. 2024 was a record year for acquisitions with committed spend of £883 million, in addition to the completion of an initial £250 million share buyback which reflects the strength of Bunzl’s financial position. We have substantial headroom for continuing to self-fund value-accretive acquisitions alongside additional returns of capital to shareholders, and our acquisition pipeline remains active.
Bunzl has delivered significant shareholder value over an extended period, with 9% compound annual growth of adjusted earnings per share since 2004. In 2024 we extended our track record of annual dividend growth to 32 consecutive years, reflecting our resilient business model. Our strategy remains consistent, and I am very confident that Bunzl will continue to create resilient, sustainable, long-term value for all stakeholders.”
* Alternative performance measure (see Note 2)
† After excluding £0.6 million of profit for the year attributable to a non-controlling interest within our Nisbets business
∆ The Board is recommending a 2024 final dividend of 53.8p per share. Including the 2024 interim dividend per share of 20.1p the total dividend per share of 73.9p represents an 8.2% increase compared to the 2023 total dividend per share.
≠ At constant exchange rates
Strategic progress:
| · | Further expansion of operating margin, supported by the impact of higher margin acquisitions and good margin management; own brand revenue penetration of c.28% compared to c.25% in 2023 |
| · | 13 acquisitions announced during 2024, across multiple sectors and geographies, including our first entry into Finland; record annual committed spend of £883 million |
| · | Driving operating efficiencies with 19 warehouse consolidations and relocations, along with accelerating investments into digital solutions and automation |
| · | Processed 75%≠ of orders digitally compared to 72% in 2023, further enhancing customer stickiness and increasing low touch customer ordering |
| · | 71% Trust Index score, a measurement achieved as part of the Great Place to Work survey; a strong and pleasing result, given employee satisfaction supports our continual focus on delivering a high level of customer service |
Business area highlights:
| Revenue (£m)2024 2023 | Growth at constant exchange* | Underlying revenue growth* | Operating profit* (£m) | Growth at constant exchange* | Operating margin* | ||||
| 2024 | 2023 | 2024 | 2023 | ||||||
| North America | 6,568.1 | 6,973.5 | (2.6)% | (3.4)% | 515.6 | 528.0 | 1.0% | 7.9% | 7.6% |
| Continental Europe | 2,377.1 | 2,354.9 | 4.1% | (1.7)% | 210.8 | 224.7 | (3.1)% | 8.9% | 9.5% |
| UK & Ireland | 1,625.8 | 1,365.5 | 19.3% | (4.2)% | 135.1 | 103.4 | 31.0% | 8.3% | 7.6% |
| Rest of the World | 1,205.4 | 1,103.2 | 17.1% | 5.5% | 146.2 | 119.6 | 32.3% | 12.1% | 10.8% |
| · | North America: Slight operating profit growth at constant exchange, despite underlying revenue decline driven by deflation; volume reductions in our US foodservice redistribution business, as we increased our own brand penetration; and due to the expected impact from transitioning ownership of customer specific inventory in our US retail business in the first half. Overall, business area volumes in the second half grew, although deflation persisted longer than expected. Strong operating margin increase supported by good margin management, including meaningful expansion of own brand penetration |
| · | Continental Europe: Moderate revenue growth at constant exchange rates was driven by the contributions from acquisitions, with underlying revenue impacted by deflation. Adjusted operating profit and operating margin declines reflective of underlying revenue trends, alongside operating cost inflation and a relatively high cost to serve operating model; the second half was particularly impacted. These dynamics were a particular headwind for France, certain businesses in the Netherlands and for Denmark, while Spain delivered very strong revenue growth, supported by both acquisitions and underlying revenue growth. Active focus on cost initiatives heading into 2025 |
| · | UK & Ireland: Very strong revenue growth driven by acquisitions, with a decline in underlying revenue driven mainly by deflation and soft volumes. Strong operating margin increase was driven by the continued focus on good margin management, with operating margin expansion of our largest cleaning & hygiene business particularly supportive. The integration of Nisbets, a scale business with strong own brand portfolio and excellent digital capabilities, is progressing well. While Nisbets was impacted by market softness and meaningful one-off supply chain challenges earlier in 2024, the business ended the year with positive momentum and with synergies identified for 2025 |
| · | Rest of the World: Very strong revenue growth driven by acquisitions and good underlying revenue growth, driven by strong volume growth in Latin America, predominantly in safety, and both volume growth and inflation in Asia Pacific, predominantly in healthcare. Very strong operating margin increase was driven by the positive contribution from acquisitions and supported by good margin management |
Outlook
We reiterate our guidance for 2025:
| · | Despite significant uncertainties relating to the wider economic and geopolitical landscape, the Group expects robust revenue growth in 2025, at constant exchange rates, driven by announced acquisitions and slight underlying revenue growth |
| · | Group operating margin* is expected to be maintained in-line with 2024 and to remain substantially higher compared to pre-pandemic levels, driven by higher margin acquisitions, as well as a good underlying margin increase |
| · | Other aspects of our full year 2025 guidance, are: (1) the full year effective tax rate is expected to be around 26.0%; (2) the Group expects net finance expenses to be around £115 million |
