Finance
Bunzl shares hit by operating margin outlook
Published by Global Banking and Finance Review
Posted on December 17, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 17, 2025
2 min readLast updated: January 20, 2026
Bunzl warns of a slight drop in operating margin for 2026 due to cost pressures, impacting shares. Plans to boost acquisitions next year.
(Corrects paragraph 7 to clarify that analysts had expected a slight improvement in margins, not that those were the company's previous expectations)
Dec 17 (Reuters) - Bunzl's warning of a drop in its operating margin next year in the face of continuing cost pressures sent the business supplies distributor's shares down as much as 8% on Wednesday.
The company, which supplies packaging, cleaning and safety products to customers in the food service, retail and healthcare sectors, said its group operating margin is expected to fall slightly in 2026.
Bunzl has sought to offset pricing pressures and challenges in North America, its biggest market, by cutting costs and changing its product mix as customers trim spending.
It has also reined in M&A activity to preserve capital but plans to restore momentum in that area in the coming year.
"After a lower level of acquisition spend in 2025, reflective of timing and driven by macroeconomic uncertainty, and with our pipeline remaining active, we look forward to an improved year for acquisitions in 2026," CEO Frank van Zanten said.
Bunzl projected moderate revenue growth for 2026 at constant exchange rates, adding that it expects profit this year to be in line with analyst expectations.
Sentiment, however, remained focused on margins, RBC Capital Markets said, pointing to analyst expectations of a slight improvement. RBC highlighted concern that Bunzl may be in a "margin downcycle" as it contends with a tougher consumer backdrop after enjoying a "bonanza" during pandemic lockdowns.
The company's shares recovered a little to be 3.1% down at 0900 GMT in a FTSE 100 index that was up 1.3%.
(Reporting by Nithyashree R B and Pushkala Aripaka in BengaluruEditing by Sumana Nandy and David Goodman)
Operating margin is a financial metric that measures the proportion of revenue left after paying for variable costs of production. It indicates how efficiently a company is managing its operations.
Cost pressure refers to the increasing costs of inputs or services that a business faces, which can affect profitability and operational efficiency.
Revenue growth is the increase in a company's sales over a specific period, indicating the company's ability to expand its market presence and increase its sales volume.
M&A activity refers to mergers and acquisitions, where companies consolidate through various types of financial transactions to enhance their market position or achieve strategic goals.
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