Bunzl Q3 revenues up despite Covid product sales decline

Distribution and services group Bunzl said third quarter revenues rose driven by a strong recovery in its core business.

Revenue for the three months to September 30 rose 7.8% year-on-year, with acquisitions contributing 4.3% to growth.

“Within underlying revenue growth of 2.5%, the strong recovery in the base business contributed underlying sales growth of 12%, with broad strength across business areas and continued support of product inflation particularly in North America,” the company said in a statement on Tuesday.

However, it added that growth was largely offset by a 9.4% impact on underlying growth from a decline in sales of Covid-19 related products. Underlying revenue for the third quarter was approximately 10% higher than the comparable 2019 period.

Bunzl said that with good revenue performance year to date it now expected slight underlying revenue growth in 2021 compared to 2020 at constant exchange rates.

Margin expectations for the year were maintained, with adjusted operating margin expected to be only slightly ahead of historical levels.

“With 2021 continuing to reflect pandemic-related dynamics, we continue to expect to see a further normalisation of group operating margin in 2022 to more historical levels, as the mix of sector and product sales returns to more typical levels for the group.”