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Bunzl profits from switch to pandemic-related products

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August Graham, PA City Reporter
·2-min read
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Outsourcing giant Bunzl saw a jump in revenue and profit during the Covid-19 crisis as it was able to switch away from some of the business areas that were hardest hit and help supply firms in their fight against the pandemic.

The company said pre-tax profits leapt 22.6% to £555.7 million on revenue of £10.1 billion, up 8.4%.

In Europe, the company’s performance has been very strong, with revenue growing by 15.1% on the continent, which provides a fifth of the company’s total revenue.

In France, Bunzl is more focused on the cleaning & hygiene and safety sectors, so it was boosted by Covid, while it was helped by high sales of personal protection equipment in the Netherlands.

Chief executive Frank van Zanten said: “As a result of our extensive supply chains and our Asia sourcing and auditing operation, we were able to quickly source and deliver significant quantities of quality-assured Covid-19 related products, such as gloves and masks.

“Consequently, we were able to offset the negative impact that restrictions had on many of our customers’ businesses, particularly in the food service and retail sectors.”

Bunzl’s business in Ireland, which leans more towards the food service sector, was significantly affected, the company said.

Organic revenue grew by 2.6% in the UK and Ireland, which together make up 13% of the group’s revenue.

Profits in the Americas, which makes up 58% of Bunzl’s revenue, rose 1%.

The company, which has committed to paying back furlough money it claimed to keep its staff on the books, said it has hired many new employees, increasing its headcount by 5% during the year to around 20,000.

Bunzl also spent £445 million on acquisitions, the second highest in the company’s history. It bought eight companies last year.

Although the business has managed to benefit from parts of the Covid-19 crisis, it feels ready for a swing away from the pandemic.

“We anticipate that the recovery in sales of other products, as restrictions ease, will broadly offset the decline of smaller Covid-19 related orders, with recent acquisitions making an increasing contribution to the group’s performance,” Mr van Zanten said.

“Looking ahead, we also expect future growth to be supported by enhanced hygiene trends and our differentiated offering of sustainable and responsible solutions.”