Bunzl Half-Year Report 2023

The Group has managed inflation on plastics, paper and chemicals well and successfully implemented product cost
driven selling price increases. During the first half of 2023, the year-on-year benefit of prior year product cost increases continued to reduce, with North America seeing only a small year-on-year benefit by the second quarter. Other regions, in which inflation had lagged North America, also started to see some annualisation towards the end of 2022, however Continental Europe growth continued to see good support from inflation, and inflation remained strong in the UK & Ireland. Over the period we saw good outcomes from the elevated number of customer tenders, following reduced activity during the pandemic. Alongside these product cost trends, we saw limited operating cost growth in North America as freight cost reductions partially offset wage growth, which was closer to typical historical levels, and continued property cost inflation linked to renewals. Wage inflation in Continental Europe over the period increased but was significantly less than the inflation we had previously experienced in North America

Highlights include:

  • Revenue grew by 0.6% at constant exchange rates, and grew by 2.4% excluding the UK healthcare disposal
  • Adjusted operating profit* increased by 2.5% at constant exchange rates, with growth of 4.1% excluding the UK
    healthcare disposal; reported operating profit increased by 9.9%
  • Operating margin increased from 7.3% to 7.4%
  • Adjusted earnings per share* declined by 1.7% at constant exchange rates, and grew by 0.2% excluding the UK
    healthcare disposal, due to an expected increase in net finance expense and tax rate; reported basic earnings per sharerose 6.9%
  • Free cash flow grew by 21% at actual exchange rates to £286.3 million; supported by a substantial reduction in inventory

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