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1. Company Snapshot

1.a. Company Description

Bunzl plc operates as a distribution and services company in the North America, Continental Europe, the United Kingdom, Ireland, and internationally.The company offers food packaging, films, labels, cleaning and hygiene supplies, and personal protection equipment to grocery stores, supermarkets, and convenience stores.It also provides food packaging, disposable tableware, guest amenities, catering equipment, agricultural supplies, cleaning and hygiene products, and safety items to hotels, restaurants, contract caterers, food processors, commercial growers, and the leisure sector; and gloves, boots, hard hats, ear and eye protection, and other workwear, as well as cleaning and hygiene supplies, and asset protection products to industrial and construction, and ecommerce sectors.


In addition, the company offers chemicals and hygiene paper to cleaning and facilities management companies, and industrial and public customers; gloves, masks, swabs, gowns, bandages, and other healthcare related equipment; and healthcare devices to hospitals, care homes, and other facilities serving the healthcare sector.Further, it provides packaging and other store supplies to retail chains, boutiques, department stores, home improvement chains, office supply companies, and related e-commerce sales channels.The company was founded in 1854 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on BNZL

Bunzl's recent performance was positively driven by strategic acquisitions, including the purchase of Brazilian food packaging business Solupack, and resumed share buyback programme, which enhances shareholder value. The company's decision to pay a dividend of £0.202 per share also underscores its commitment to rewarding investors. Additionally, its revenue remained flat at UK£5.76 billion in the first half of 2025, and EPS came in at UK£0.56. Bunzl's efforts to support communities in need, such as providing over 57,000 rolls of toilet paper to food banks across Canada, also highlight its positive social impact.

1.c. Company Highlights

2. Bunzl's H1 2025 Earnings: A Mixed Bag

Bunzl reported revenue growth of 4.2% at constant exchange rates to £5.8 billion, driven by net acquisitions, while underlying revenue declined by 0.2%. Adjusted operating profit declined by 7.6% at constant exchange rates to £404.5 million, with a margin reduction to 7% due to the Distribution business in North America and certain large businesses in Continental Europe. Adjusted earnings per share fell by 10.6% at constant rates to 77.8p, slightly above estimates of 77.7p.

Publication Date: Aug -29

📋 Highlights
  • Revenue Growth: Group revenue rose 4.2% to £5.8 billion at constant exchange rates, driven by acquisitions, but underlying revenue declined 0.2%.
  • Operating Profit Decline: Adjusted operating profit dropped 7.6% to £404.5 million, with North America’s Distribution business contributing a 14.7% decline.
  • Free Cash Flow Pressure: Free cash flow fell 22% to £243 million, despite 97% cash conversion, due to Distribution challenges and inventory adjustments.
  • Debt Reduction: Net debt-to-EBITDA improved to 1.9x, nearing the target range of 2–2.5x, with £1.9 billion net debt post-releveraging.
  • Dividend Increase: Interim dividend rose 0.5% to 20.2p/share, while maintaining focus on M&A, buybacks, and organic growth despite margin pressures.

Segmental Performance

The North America segment was a major headwind, with adjusted operating profit declining by 14.7% at constant exchange rates. However, excluding the Distribution business, North America's adjusted operating profit was more stable. The U.K. & Ireland saw growth driven by the acquisition of Nisbets, while the Rest of the World remained strong with underlying revenue growth driven by inflation in Latin America and moderate volume growth in Asia Pacific.

Cash Flow and Leverage

Cash conversion was 97%, with free cash flow of £243 million, a 22% decline year-on-year. Net debt including deferred and contingent consideration was £1.9 billion, with a net debt-to-EBITDA ratio of 1.9x. The company's capital allocation priorities remain unchanged, with a focus on acquisitions, share buybacks, and dividends.

Outlook and Valuation

Bunzl expects moderate revenue growth in 2025 at constant exchange rates, driven by announced acquisitions and broadly flat underlying revenue. Operating margin is expected to be moderately below 8% for the year, with a moderation of year-on-year operating margin decline in the second half. With a P/E Ratio of 16.69 and an EV/EBITDA of 9.01, the market seems to have priced in a moderate growth outlook. The Dividend Yield of 2.74% is an attractive feature for income investors.

Turnaround in North America

The North American Distribution business is undergoing a turnaround, with changes to the operating model giving more autonomy to local teams, leading to improvements in stock levels, service levels, and employee satisfaction. CEO Frank Andre Van Zanten expects the benefits to materialize in the second half of 2026, driven by organic revenue growth from winning back business.

3. NewsRoom

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Top UK Dividend Stocks To Consider In November 2025

Nov -19

Source:

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Bunzl plc's (LON:BNZL) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?

Nov -18

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Bunzl plc (LON:BNZL) Shares Could Be 38% Below Their Intrinsic Value Estimate

Nov -04

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Top UK Dividend Stocks To Consider In October 2025

Oct -21

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Bunzl (LON:BNZL) Has Announced A Dividend Of £0.202

Oct -18

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Adidas to Enter Safety Footwear in 2026 With New ‘Pro Work’ Line

Oct -08

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Bunzl Insiders Placed Bullish Bets Worth UK£2.19m

Oct -08

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adidas and GLO Brands B.V., announce long-term partnership to enter the safety footwear market

Oct -08

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.61%)

6. Segments

Food Service

Expected Growth: 2.5%

Bunzl plc's Food Service segment growth of 2.5% is driven by increasing demand for outsourced food services, expansion in emerging markets, and strategic acquisitions. Additionally, the segment benefits from a shift towards convenience and online food delivery, as well as a growing need for food safety and hygiene solutions.

Grocery

Expected Growth: 2.8%

Bunzl plc's Grocery segment growth of 2.8% is driven by increasing demand for convenience and online shopping, leading to higher sales of food packaging and disposable products. Additionally, the company's focus on sustainability and eco-friendly products resonates with environmentally conscious consumers, contributing to the segment's growth.

Safety

Expected Growth: 2.2%

Bunzl plc's 2.2% growth is driven by its diversified customer base, steady demand for essential products, and strategic acquisitions. The company's focus on sustainability and e-commerce capabilities also contribute to its growth. Additionally, Bunzl's strong cash generation and disciplined capital allocation enable investments in growth initiatives, further supporting its steady growth trajectory.

Cleaning and Hygiene

Expected Growth: 2.9%

Bunzl plc's Cleaning and Hygiene segment growth of 2.9% is driven by increasing demand for infection prevention products in healthcare, rising awareness of hygiene standards in foodservice and retail, and growing adoption of automated cleaning solutions in industrial markets.

Retail

Expected Growth: 2.6%

Bunzl plc's Retail segment growth of 2.6% is driven by increasing demand for convenience and e-commerce, leading to higher sales of packaging materials. Additionally, the company's strategic acquisitions and focus on sustainability have expanded its customer base and improved operational efficiency, contributing to the segment's growth.

Healthcare

Expected Growth: 3.1%

Bunzl plc's Healthcare segment growth of 3.1% is driven by increasing demand for infection prevention products, expansion into emerging markets, and strategic acquisitions. Additionally, the segment benefits from a growing trend towards outsourcing of non-core services by healthcare providers, leading to increased adoption of Bunzl's products and services.

Other

Expected Growth: 2.4%

Bunzl plc's 2.4% growth in 'Other' segment is driven by increasing demand for safety products, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on sustainability and e-commerce solutions has contributed to growth. Furthermore, the 'Other' segment has benefited from the company's ability to adapt to changing market conditions and customer needs.

7. Detailed Products

Food Packaging

Bunzl plc provides a wide range of food packaging products, including bags, wraps, and containers, designed to preserve freshness and quality of food products.

Cleaning and Hygiene

Bunzl plc offers a variety of cleaning and hygiene products, including cleaning chemicals, paper products, and janitorial supplies.

Foodservice Disposable

Bunzl plc provides disposable products for the foodservice industry, including cups, plates, and utensils.

Safety and Protection

Bunzl plc offers a range of safety and protection products, including personal protective equipment, first aid kits, and safety signs.

Retail and Grocery

Bunzl plc provides products and services to the retail and grocery industries, including store supplies, packaging materials, and equipment.

Healthcare and Medical

Bunzl plc offers a range of products and services to the healthcare and medical industries, including medical supplies, equipment, and disposables.

8. Bunzl plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bunzl plc operates in a industry with low threat of substitutes due to the specialized nature of its products and services.

Bargaining Power Of Customers

Bunzl plc has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Bunzl plc has a moderate bargaining power of suppliers due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The industry in which Bunzl plc operates is highly competitive, with several established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.45%
Debt Cost 5.93%
Equity Weight 53.55%
Equity Cost 6.27%
WACC 6.11%
Leverage 86.75%

11. Quality Control: Bunzl plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
BIC

A-Score: 6.0/10

Value: 7.6

Growth: 4.1

Quality: 6.7

Yield: 8.1

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Jerónimo Martins

A-Score: 5.8/10

Value: 5.1

Growth: 5.9

Quality: 3.6

Yield: 5.6

Momentum: 7.5

Volatility: 7.0

1-Year Total Return ->

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Cranswick

A-Score: 5.5/10

Value: 4.4

Growth: 6.7

Quality: 5.2

Yield: 3.1

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

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Colruyt

A-Score: 5.2/10

Value: 7.7

Growth: 4.6

Quality: 4.3

Yield: 6.9

Momentum: 1.0

Volatility: 7.0

1-Year Total Return ->

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SalMar

A-Score: 4.8/10

Value: 3.0

Growth: 6.6

Quality: 3.3

Yield: 6.2

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Bunzl

A-Score: 4.5/10

Value: 4.9

Growth: 5.3

Quality: 4.8

Yield: 4.4

Momentum: 0.5

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.52$

Current Price

21.52$

Potential

-0.00%

Expected Cash-Flows