Bunzl reaffirms annual guidance amid Q3 revenue setback

Multinational distribution and outsourcing giant, Bunzl, has affirmed its annual profit guidance, despite facing a challenging third quarter marked by declining revenues. The company reported that its third-quarter results, which concluded in September, witnessed a 4.8% drop in revenue at constant exchange rates. Adjusted for the number of trading days, underlying revenue fell by 4.7% primarily due to one fewer trading day compared to the previous year.

At actual exchange rates, the revenue decline was even more pronounced at 8.8%, largely attributed to the weakening of the sterling.

Bunzl attributed the revenue dip to a combination of factors, including a continued drop in Covid-19 related product sales and reduced inflationary benefits. The company also cited “wider post-pandemic related normalization trends,” which resulted in an anticipated decrease in volume.

In a statement, Bunzl expressed their confidence in the company’s 2023 adjusted operating profit exceeding the previous year’s figure at constant exchange rates. They expect a slight decrease in group revenue, again at constant exchange rates, balancing the impact of recent acquisitions with some organic decline following several years of robust organic growth and a minor impact from the UK healthcare disposal. The company further revealed its expectations of reaching record operating margins in 2023, in line with recent performance.

In 2022, Bunzl achieved a revenue of £12.04 billion and an adjusted operating profit of £885.9 million.

On another note, Bunzl announced the acquisition of CT Group, a company based in Brazil that specializes in the distribution of surgical and medical devices and offers value-added logistics services to healthcare providers. This strategic acquisition, which aims to strengthen Bunzl’s presence in Brazil, was completed in September and is currently awaiting competition clearance.

Additionally, in August, the company successfully closed a deal to acquire Pittman Traffic & Safety Equipment in Ireland. Pittman is a distributor of safety and asset protection solutions, including items such as bollards, speed bumps, and workplace barriers. This acquisition was carried out to support the expansion of Bunzl’s North America-based McCue business, which already has a presence in the UK. In 2022, Pittman Traffic & Safety Equipment generated €7 million in revenue.