Bunzl underlying revenue rises 3.7% in third quarter as annual outlook held
Key Facts
Bunzl reported underlying revenue growth of 3.7% in the third quarter of 2026 and reaffirmed its full-year outlook in its October trading update. Group revenue rose 3.1% at constant exchange rates, with a broadly similar increase at actual exchange rates. The company maintained its forecast for modest underlying revenue growth for the year, with an operating margin broadly stable against the previous year. The annual margin comparison uses a reference level of 7.6% in 2025, under the company's definition used in its financial guidance. This definition excludes the share-based payment credit, the basis the group used when reaffirming its annual profitability outlook.
Bunzl attributed revenue growth to higher product costs and inflation, alongside increased sales volumes during the period, according to its trading update. The North American distribution business led volume growth, adding the impact of higher volumes to the support prices provided to group revenue. Acquisitions contributed 0.4% to revenue growth, while fewer trading days had a negative impact of 1.1% during the quarter. On order processing, first-half results showed the proportion processed digitally rose to 78%, compared with 76% a year earlier. The increase in digital processing was among the operating results the group reported for the first six months of 2026.
Bunzl recorded revenue of 5,933.1 million pounds in the first half of 2026, according to its half-year results report. Adjusted operating profit for that period was 440.6 million pounds, according to the same report. The operating margin rose to 7.3%, compared with 7.0% in the first half of 2025, as profitability benefited from inflation. However, the company said much of the support inflation provided to the margin was expected to be temporary. In its third-quarter update, Bunzl confirmed that the margin for the period was in line with management's expectations, while maintaining its annual guidance.
On acquisitions, Bunzl announced in October the purchase of Britain's Blueleaf Care as part of its expansion in care supplies. The transaction included the acquisition of 100% of the company's shares, according to Bunzl's statement on the deal. Blueleaf Care specialises in distributing supplies to care and nursing homes in the United Kingdom, a market where the group aims to strengthen its presence through the deal. The acquired company generated revenue of 58 million pounds in 2025, according to figures Bunzl provided in the acquisition announcement. Chief Executive Frank van Zanten said the transaction "strengthens our position in the attractive UK care home market".
Alongside acquisitions, Bunzl said it had completed share buybacks worth about 225 million pounds as of its October update. The purchases form part of a total programme worth 500 million pounds, which the group announced with its first-half results. The company reaffirmed that value-enhancing acquisitions remain a priority in its capital allocation policy, alongside execution of the buyback programme. The ratio of adjusted net debt to earnings before interest, taxes, depreciation and amortisation stood at 1.8 times when the half-year results were announced. It therefore remained below the group's medium-term target leverage range of between 2.0 and 2.5 times, according to its report.
For the remainder of the year, Bunzl expects adjusted net finance expense of between 125 and 130 million pounds in 2026. It also expects an effective tax rate of about 26.0%, according to the financial assumptions in its third-quarter trading update. The company set a period of up to 12 months to complete the share buyback programme from its announcement with the half-year results in September 2026. Its next annual results will cover the financial year ending 31 December 2026, according to the financial calendar published for shareholders. The group set 1 March 2027 as the date for announcing those results.