Summary of Bunzl's Pre-Close Trading Statement Call Company Overview - **Company**: Bunzl - **Industry**: Distribution and outsourcing services Key Points Financial Performance and Outlook - **2025 Performance**: Bunzl expects to achieve an adjusted operating profit in line with guidance set in April 2023, with underlying revenue anticipated to be broadly flat [2][3] - **Revenue Growth**: Group revenue growth for 2025 is projected to be between 2% and 3% at constant exchange rates [3] - **Operating Margin**: Expected operating margin for 2025 is around 7.6%, down from 8.3% in the prior year, with a moderation in margin decline anticipated in the second half of the year [3][4] - **2026 Expectations**: Initial outlook for 2026 indicates positive organic growth, supported by performance improvements in North America and Continental Europe, despite ongoing macro challenges [4][5] Market Conditions - **Challenging Market Environment**: The company acknowledges a tough market backdrop affecting volume growth, particularly in North America, especially in the food service sector [4][10] - **Inflation and Pricing**: While inflationary pressures have eased, pricing is expected to remain broadly neutral, impacting revenue growth [4][5][10] Strategic Initiatives - **Cost-Saving Initiatives**: Bunzl has implemented strong cost-saving measures to offset operating cost inflation, which is expected to be at typical levels of 2%-3% [5][18] - **Acquisition Strategy**: The acquisition pipeline remains active, with an expected commitment of around GBP 140 million to acquisitions in 2025, and a more favorable environment for acquisitions anticipated in 2026 [5][11] Business Development - **New Business Wins**: The company is focusing on new business wins, particularly in North America, which are expected to be margin dilutive initially but are crucial for volume growth [5][30] - **Nisbets Synergies**: The benefits from the Nisbets acquisition are expected to materialize in the second half of 2025 and provide a full-year effect in 2026 [31] Competitive Landscape - **Market Competition**: The competitive environment remains aggressive, with no significant changes noted. Pricing pressures persist, but Bunzl aims to differentiate through value-added services [20] Additional Insights - **White Label Products**: Contribution from white label products is expected to be between 28% and 30% in 2025, with a more measured growth approach anticipated for 2026 [36][38] - **Interest Costs**: Net finance expense is guided to be around GBP 120 million for both 2025 and 2026, with a slight benefit from lower rates expected [41] Closing Remarks - Bunzl expresses confidence in meeting profit expectations for 2025 and providing a stable profit outlook for 2026, emphasizing operational improvements and resilience in challenging markets [52]