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Bunzl: Bunzl's 2025 Earnings: A Challenging Year with a Positive Outlook

Bunzl's revenue grew by 3% at constant exchange rates in 2025, driven by acquisitions and slightly positive underlying growth, reaching a total revenue that supported an adjusted operating profit of GBP 910 million, a decline of 4.3% compared to 2024. The operating margin was 7.6%, impacted by the margin decline in the North America distribution business. The earnings per share (EPS) was 0.979, in line with analyst estimates. The company's financial performance was affected by challenging market conditions, including organizational change and end-market weakness.

BNZL.L

GBp 2182

-2.85%

A-Score: 4.6/10

Publication date: March 2, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Adjusted Operating Profit Decline Adjusted operating profit dropped 4% at constant exchange rates to GBP 910 million in 2025, driven by North America distribution margin pressures and operational challenges.
  • Revenue Growth and Margin Pressures Revenue rose 3% at constant exchange rates, but operating margin fell to 7.6% (vs. 8.3% in 2024), impacted by North America distribution restructuring and European deflation.
  • Free Cash Flow and Share Buybacks Bunzl generated GBP 579 million in free cash flow, funded a GBP 200 million share buyback, and maintained adjusted net debt-to-EBITDA at 2x, within its target range of 2–2.5x.
  • North America Operational Recovery Despite a 11.5% decline in North America adjusted operating profit, leadership changes and cost management initiatives improved agility, with 1% own-brand penetration growth and EUR 50 million new business wins in Europe.

Segment Performance

The North America distribution business was impacted by its transition to a sales and operations model, resulting in an 11.5% decrease in adjusted operating profit to GBP 441 million. In contrast, Continental Europe saw revenue growth of 2.5%, driven by acquisitions, with adjusted operating profit decreasing by 3.6% to GBP 205 million. The company's own brand strategy is progressing well, with own brand sales increasing from 28% to 30% of the overall cost of sales.

Cash Flow and Capital Allocation

Bunzl generated GBP 579 million of free cash flow, a 9% decline year-on-year, reflective of lower adjusted operating profit. The company remains committed to its capital allocation priorities, including investing in businesses for organic growth, paying a progressive dividend, and making value-accretive acquisitions. The adjusted net debt to EBITDA was 2.0x, within the target range of 2 to 2.5x.

Outlook and Valuation

The company expects moderate revenue growth in 2026, driven by underlying revenue growth and a small benefit from announced acquisitions. Analysts estimate revenue growth of 2.4% for the next year. With a current P/E Ratio of 18.7 and an EV/EBITDA of 10.62, the market is pricing in a certain level of growth. The dividend yield is 3.3%, indicating a relatively attractive return for income investors. As Bunzl continues to drive operational efficiencies and make disciplined acquisitions, the company's long-term strategy remains focused on driving profitable organic growth.

Bunzl's A-Score