Bunzl is a specialist international distribution and services group that recorded a 13.2% rise in revenue on Wednesday when the company announced its Q1 2022 results.
The distribution and services group noted the group’s revenue rose 13.2% at constant exchange rates and 12.5% at real exchange rates in Q1 2022 as a result of its ‘diversified and resilient business model’.
At constant currency rates, underlying revenue growth was 11.0%, primarily due to inflation, with a 1.7% revenue decline due to fewer trading days than Q1 2021. At constant exchange rates, acquisitions contributed another 3.2% to growth.
The 11% underlying revenue growth for Bunzl was led by strong momentum in the base business, which provided 17% growth and benefited greatly from inflation.
The predicted drop in sales from the top eight Covid-19 related products, which reduced underlying revenue by 6% due to product deflation compared to Q1 2021, somewhat mitigated the momentum gained from inflation.
Inflation remained notably supportive of our businesses in North America, while inflation and the recovery of the base business drove extremely good growth in the UK, Ireland and Continental Europe compared to the preceding year.
Bunzl’s Outlook for 2022
The group’s recommendations have not changed.
In 2022, the group expects moderate revenue growth at constant currency rates, driven by the impact of recent acquisitions and supported by a slight increase in organic sales.
The further improvement of the core business is projected to be slightly offset by sales of Covid-19-related items returning to normal.
In addition, the company forecasts its operating margin to be slightly higher in 2022 than in previous years.
“Our entrepreneurial teams have continued to deliver good growth through a combination of passing on substantial inflation and volume growth, supported by recovering markets and with our performance over the last two years further strengthening our competitive position,” said Frank van Zanten, Chief Executive Officer, Bunzl.
“Our diversified portfolio remains a key determinant of the strength and resilience of our performance. We continue to focus on delivering our long-term strategic objectives that will drive further compounding growth. Our acquisition pipeline is active and supported by our strong balance sheet.”
Bunzl shares gained 0.26% to 3,075p after the company reported its Q1 results on Wednesday.
