Bunzl has cut its 2025 guidance after a tough first quarter, with softer-than-expected revenue growth in the UK and Ireland, and margin pressure in its largest North American business weighing on performance.
The FTSE 100 distribution giant said revenue grew just 2.6 per cent at constant currency, but adjusted operating profit dropped significantly year on year – driven by a squeeze on margins in both North America and Continental Europe.
UK business lines also under-performed, with underlying revenue growth coming in lower than expected due to deflation, while a weaker performance from catering supplier Nisbets dragged margins.
Operating margin in the first half of the year is now expected to come in around seven per cent, down from 8.3 per cent last year, with the full-year margin forecast to be “moderately below” eight per cent.
Bunzl said North America faced slower than expected volume growth, execution issues tied to its own brand push and the loss of a key customer category.
In response, the group has launched an action plan including leadership changes and cost cuts, as it looks to stabilise performance.
Chief executive Frank van Zanten said: “I am disappointed with our performance in the first quarter in this challenging trading environment. We are taking decisive action to improve performance, particularly with regards to execution in our largest business in North America.”
Bunzl also paused its shared buyback programme and warned that while Trump’s latest tariffs might offer some benefit through inflation, the overall impact on growth remains uncertain.