Bunzl PLC Trading Statement (0094R)
October 24 2023 - 1:05AM
UK Regulatory
TIDMBNZL
RNS Number : 0094R
Bunzl PLC
24 October 2023
24 October 2023
BUNZL Q3 TRADING STATEMENT
PROFIT IN-LINE WITH EXPECTATIONS; 2023 PROFIT OUTLOOK
MAINTAINED
Bunzl plc, the specialist international distribution and
services Group, today announces its trading statement for the
period since 30 June 2023.
Following Bunzl's strong performance over recent years and
continued resilience, the Group continues to perform well. Adjusted
operating profit over the quarter was in-line with expectations and
the Group reiterates its 2023 adjusted operating profit growth
outlook.
Group revenue in the third quarter declined by 4.8% at constant
exchange rates, with underlying revenue, which is organic growth
adjusted for trading days, declining by 4.7%, driven by a continued
decline in Covid-19 related product sales; a reduced level of
inflation benefit; and wider post-pandemic related normalisation
trends which drove expected volume weakness consistent with the
prior quarter. One fewer trading day than the comparable period
negatively impacted revenue by 0.8%(1) . Acquisitions contributed
growth of 2.0% at constant exchange rates, whilst the disposal of
our UK healthcare business impacted revenue by 1.3%. Overall, at
actual exchange rates, given the weakness of sterling in the prior
year, Group revenue declined by 8.8% over the quarter. Operating
margin over the quarter was very strong, remaining substantially
higher than compared to the pre-pandemic period in 2019, and
slightly ahead of the Group's expectations.
We reiterate our confidence in the Group's 2023 adjusted
operating profit being moderately higher than in 2022 at constant
exchange rates. We expect Group revenue, at constant exchange
rates, to be slightly lower than in 2022, with the benefit of
announced acquisitions offset by some organic decline, following
strong organic growth in recent years, and a small impact from the
UK healthcare disposal. Operating margin in 2023 is now expected to
reach the record level seen in recent years.
In September 2023, Bunzl signed an agreement to acquire CT
Group, a distributor of surgical and medical devices and provider
of value-added logistics services to health providers in Brazil
which will enhance Bunzl's national presence and expand our product
offering. In 2022, the higher margin business generated revenue of
BRL 269 million (c.GBP42 million). Completion of the acquisition is
subject to competition authority clearance.
Towards the end of August 2023, Bunzl completed the acquisition
of Pittman Traffic & Safety Equipment in Ireland, a distributor
of safety and asset protection solutions, such as bollards, speed
bumps and workplace barriers. This acquisition supports the
expansion of our North America based McCue business, which already
has a UK presence. Pittman Traffic & Safety Equipment generated
revenue of EUR 7 million (c.GBP6 million) in 2022.
Commenting on today's announcement, Frank van Zanten, Chief
Executive Officer of Bunzl, said:
"Our performance continues to highlight the strength and
resilience of the Group's business model, with revenue over the
quarter 29% higher, and operating margin substantially higher, than
the comparable period in 2019 at constant exchange rates. I remain
confident in our ability to sustain a higher operating margin
compared to pre-pandemic levels, supported by the acquisitions we
have made over the period. Furthermore, today we announce our
13(th) and 14(th) acquisitions of 2023, with a total year-to-date
committed spend of more than GBP425 million. I remain excited by
the Group's medium-term opportunities, which continue to be driven
by our proven compounding growth strategy and active acquisition
pipeline, supported by a strong balance sheet."
Enquiries:
Bunzl plc Teneo
Frank van Zanten, Chief Executive Martin Robinson
Officer Olivia Peters
Richard Howes, Chief Financial Tel: +44 (0)20 7353 4200
Officer
Sunita Entwisle, Head of Investor
Relations
Tel: +44 (0)20 7725 5000
1. Net of the benefit of growth in excess of 26% per annum in
hyperinflationary economies, largely in Turkey, which contributed a
small increase of 0.1%.
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