Hello everyone, and welcome to today's Bunzl's Pre-Close Trading Statement call. My name is Seb, and I'll be the operator for your call today. If you'd like to ask a question during the Q&A session, please press star 1 on your telephone keypad. If you'd like to withdraw your question at any time, please press star 2. I'll now hand you over to Richard Howes to begin the call. Please go ahead. Good morning, and thank you for joining. As we head towards the end of a challenging year and look forward to 2026, we hope you find having a call helpful. I'll make a few brief remarks regarding our pre-close trading update before opening up for questions. Firstly, on 2025, despite challenging end markets, I'm pleased to say we expect to achieve an adjusted operating profit in line with guidance we set out in April this year. Within this, we expect underlying revenue to be broadly flat. Despite the tougher comparatives, we expect to see good momentum in the final quarter, supported by the benefits of actions taken to improve our performance, including new business wins in North America. This recent performance is encouraging, and volume growth is slightly better than we had anticipated. Alongside the support of acquisitions, we expect group revenue growth over the year to be between 2% and 3% at constant exchange rates. We expect operating margin to be around 7.6% compared to 8.3% in the prior year, but expect to demonstrate a moderation in year-on-year operating margin decline in the second half, as outlined in our guidance. This moderation is driven by the benefit of actions taken in North America and Continental Europe to improve performance, easier comparatives in Continental Europe, and Nisbets synergy benefits. We also completed our 200 million share buyback at the end of October and continue to expect leverage to be just over two times. While we still have to complete 2025, we present our initial view of 2026 against the backdrop of ongoing macro challenges and uncertainties. In doing so, we set our expectations for a more stable profit outlook. We expect to deliver positive organic growth in 2026, supported by the actions we are taking to improve performance across North America and Continental Europe, including our focus on new business wins. The ongoing challenging market backdrop holds back our expectations of further volume progress at this stage, and as we said in April, the benefit of some actions that are expected to extend well into 2026. In addition, although the pressure of deflation has now eased, our current expectation is for pricing to remain broadly neutral over the year. Overall, we expect some underlying revenue growth, and for this to be complemented by a slight benefit from acquisitions announced already, including the acquisition of Diamito. Taken together, we expect moderate revenue growth over the year at constant exchange rates. The group operating margin is expected to be slightly down year-on-year. This slight decline is driven by the ongoing market challenges, which moderate our expectations of underlying revenue growth and therefore our ability to fully absorb the impact on margin from operating cost growth. We expect operating cost inflation to be at more typical levels and have in place strong cost-saving initiatives in addition to the ones made in 2025. Overall, we expect these initiatives to only partially offset operating cost growth. Furthermore, we expect the impact of new business wins, which support our volume growth expectations, to typically be margin dilutive at the start of a contract. Before I open for Q&A, I want to highlight that our acquisition pipeline remains active. In 2025, we expect to commit around GBP 140 million to acquisitions. It is not unusual for periods of high macroeconomic uncertainty to drive a slower level of activity, and we are looking forward to a better year for completed acquisitions in 2026. With that, I'm happy to take any of your questions. Thank you. If you'd like to ask a question, please press Star 1 on your telephone keypad. If you would like to withdraw from the queue, please press Star 2. Our first question is from Annelies Vermeulen from Morgan Stanley. Please go ahead. Morning, Richard. Thanks for the call. I have three questions, please. So firstly, if you could quantify your underlying revenue growth in Q4 and how that develops relative to Q3, and if there were any changes in the mix of price and volume within that. Then secondly, you're expecting some underlying revenue growth for 2026. Could you talk a little bit more about how your expectations of how your end markets will grow and your expected performance relative to those underlying markets? And then just lastly, on the M&A spend, if you could quantify your year-to-date M&A spend and what gives you that confidence in that improved spend level for next year. Thank you. Yeah, morning, Annelies. So if we look at Q4 2025, I think we've got some good momentum in the quarter against what have been tough comparatives last year. So actually, the print for Q4 we expect to be better than we had anticipated. Broadly flat means slightly broadly flat to the positives, very slightly, which should mean a positive number for Q4, slightly positive in Q4, which, given how strong last year was, that's what I think is a positive. If we, in terms of underlying growth for 2026, so yes, we're talking about some return to organic growth, which is important, and you can assume that that is essentially volume-related growth because we are seeing a more neutral inflationary environment. I mean, there is some inflation around in North America. It's tariff-driven, and it's the four-year effect, effectively, of what we saw in 2025. But there are some pockets of deflation that lead us to a position where we think, actually, to start the year, it's better to be neutral in our outlook for inflation. I think that's the better place to be. So it does mean the volume growth, what was the growth we're seeing in 2026, is volume-driven. It will be, we expect at this stage that it is a bit less than a real GDP read, but I think that is mainly because we have some more challenging markets in North America, particularly food service and the subdued grocery market, which effectively holds that back a bit. In terms of 2025 spend, we've committed GBP 140 million in 2025 to acquisitions. That clearly is a low year for us. And when we look into 2026, whilst owner-managed businesses and families may well be able to defer selling businesses for a period of time, i.e., 2025, I think generally we expect and see that in the following year or thereafter, activity levels pick up. And the pipeline is good, so I think there's plenty of more opportunity in 2026. Okay, perfect. Thank you. Thank you. The next question is from Simona Sarli, Bank of America. Please go ahead. Good morning, Richard, and thanks for taking my question. Could you please elaborate a little bit more on the progress that you're making with the initiatives in North America and also elaborate a little bit more on the margin decline expected in 2026? So you said that it's mostly related to cost inflation, but can you please talk a little bit more about trends across the different geographies? Thank you. Yeah, morning, Simona. Look, I think we're pleased with the actions and the progress we're seeing on the improvements we're making in North America. It's obviously been a challenging year, but a lot of the actions we took earlier in the year, I think, have set us up well for 2026 and beyond. We've taken a lot of cost out. I think the own brand launches we saw in Q2 and particularly Q3, where we had the right level of inventory to service those own brand launches, those together, I think, have been positive. Service levels are definitely back to where they should be. And importantly, I think we're seeing an improved level of engagement and motivation from our business, particularly the sales team. So I think that what we set out to achieve in 2025, which is very much to stabilize and make significant improvements in the business, have been delivered. As we look into 2026, we have to recognize, well, and true for 2025 as well, we'll have achieved 2025 numbers despite the fact that the market in the U.S., in particular, has been really quite difficult. And that's particularly true for food service. You will have seen plenty of data points coming out of the North American food service scene that can support that. So we've achieved this despite that, and I think it was important we made these improvements because it has been a difficult marketplace to be, but I think that helps us as we go into next year. Now, your point on margin decline in 2026, look, there are a few things. A, it's a slight reduction, so keep that in mind and context. B, there are quite a few things happening here. One, we are largely because of the subdued markets, that is holding back our ability to grow volume in this period. It's good to see we are going to get volume growth, but it is a bit lower than I think we would normally expect, in part because of those headwinds in the markets. So that's one thing. The lack of inflation in our selling prices is also another. And that means that when we have OpEx inflation, like we do have and will have, then there's not a natural offset in our top line at this point, given where those prices are sitting. It does, therefore, mean that we have to be very good at taking out cost within our operating costs to offset the increases in inflation we're seeing. And the increases in inflation are the sort of 2%-3% range. So back to a level that's more typical, but still requires us to offset them. At this stage, we're not going to fully offset those cost increases, and as a result, that's part of the bridge towards a slight margin down. Alongside, of course, we are winning business typically at lower margins at the beginning of the contract, which would also play into that. Thank you. Can I just ask one more question, please? Can you elaborate a little bit more on the evolution of the competitive landscape in North America? So considering that volume remained quite weak and you have still, in some pockets of the market, some deflationary pressure on pricing, do you see overall the competitive landscape having become more aggressive? And if you can differentiate between what you see between large customers and SMEs? Thanks. Yeah, look, I think this has always been a competitive environment. I don't think we're seeing any real change in the competitive landscape. Pricing is always a factor. I mean, we add a lot of extra value and provide value-added services, which mean ultimately it's not just price, but clearly it's a factor. But no real change in the environment as such. I think that the end markets being more pressured doesn't help that, and that's part of what we're showing in a slightly lower margin, but our job is to win business here, and I think we've made good progress in Q4, particularly in North America, but also in Continental Europe, where we're starting to see a much better pipeline emerge, and I think that's the route to offset any potential pressures, which is to grow volume. Thank you. Thank you. Our next question is from David Brockton at Deutsche Bank. Please go ahead. Thank you very much. Two questions, please. One just on the language that you used around margins for next year. Can you just confirm? I'm trying to understand what you're saying. It's slightly less than moderate. I know you guided to margins being moderately down in 2025 and now slightly down in 2026. Are we just basically modeling that 2%-3% OpEx with maybe circa 1% on the top line? So a much lower level of margin degradation. And then secondly, in terms of deflation in Europe, you touched on that there are still some pockets of deflation. One, is that Europe? And two, are there any product categories that relates to? Thank you. Morning, David. Yeah, look, we're guiding for 2025 to be around 7.6% and slightly down in 2026 on 2025. So I mean, you should think of that as very slight, really. So it's sort of around 10 basis points, probably that sort of level, broadly, that sort of level. So it is a slight change, and it does reflect the bridge that I've talked around. Good top line growth to some degree, but held back by a lack of inflation and OpEx growth that we can't fully offset at this stage. So the mixture of those, I think, gets you there. But overall, a slight margin downgrade. In terms of pricing, yes, we're seeing inflation in North America. It's largely tariff-related, particularly in our safety businesses, the flow-through effect of that into 2026. Yes, some pockets of deflation. We're anticipating some pockets of deflation. We're not actually seeing deflation yet in our European operations, and here, we're mainly talking about paper prices. We hear a lot about it, but we're not hearing it from suppliers at the moment. I think it's reasonable to assume, as we start the year, a neutral pricing level given the potential ups and downs that we see. Thanks. That makes sense. Appreciate that. Thank you. The next question is from Karl Green at RBC. Please go ahead. Yeah, thanks very much. I've got three, hopefully two of them quite quick. Just firstly, on the new business wins and the impact of them as they ramp up on the margins, could you just, again, just very basic terms, explain when you would expect the margins on that business to actually normalize or get to kind of target levels and what's driving that in terms of implementation costs? The second one is just around the Nisbets synergies. Can you indicate what the net synergies were in 2025 and the expectation for net synergies in 2026? And then the last one, just in terms of your logistics costs and specifically driver salaries and wages, are you seeing any impact in North America from the ICE crackdown on unvetted drivers, please? Thank you. Morning, Karl. Yeah. So it is typical for us to win new business at lower margins than would be what we would expect or hope for. But it's also quite normal for us to then walk that margin up over time by substituting products, changing specs, introducing own brands, maybe changing prices here or there. That's very much normal course of business in the industry and for us. How long does it take? Well, you can assume we're on it straight away. So we want to make sure that happens as soon as sensibly possible. I would imagine a couple of years' time would be over a couple of years, would be a sensible runway to think about to getting us back to what we'd see as a normalized margin. As to Nisbets, we have seen, yes, I think the second half of 2025, we'll see a step up in the benefits of synergies from the combination with Nisbets. It's not only sitting in the Nisbets business. There are synergies that flow into Lockhart and our business in Ireland and potentially in Australia as well. But we will see that in the second half of this year. We will then get a full year effect into 2026. Now, at this stage, I'll hold back on giving you the numbers. We can come back to that when we get the full year and we can see the full outturn. But certainly, second half weighted 2025, full year effect 2026. Drivers and warehouse costs in North America, actually, these have normalized quite significantly in terms of the level of inflation we're seeing, which is helpful. I'm not aware of us having any issues with drivers in North America relating to the ICE crackdown. Certainly, that's been an issue for some of the end markets we serve. Food service, in particular, has been affected by people not turning up for work for fear of being deported. So I think that's part of it. I can see it in that space. I'm not seeing it in our own business at this stage, in our own driver community. Okay. Thanks, Richard. Thank you. As a reminder, for any further questions, please press star one on your telephone keypad. We have a follow-up from Simona Sarli at Bank of America. Please go ahead. Hi, Richard. One more from my side. Can you talk a little bit about momentum in white label products? So in percentage terms, how much they are contributing in 2025 versus 2024, and what is your expectation for 2026? Thank you. Yes, so look, I think 2025, I'll try to give you a better steer on that when we get to the end of the year fully, but we were expecting to be around between 28% and 30% in 2025, something of that order. Obviously, a big step up from where we were in 2019, where it was more like around 20%. That's been across the group in terms of safety growth, but also more recently, of course, the growth of own brand in our North American distribution business. As we go into 2026, look, I think you should expect a more measured approach. I don't know yet where we're going to be for 2026, but you should assume that there will be some improvement, but perhaps not the same level we've seen in the last couple of years. Still an important part of what we do, but particularly in North America, there's a lot of absorbing of the launches we've already done that needs to take place and to happen. Make sure that we properly follow through on the delivery of ones we've done before we necessarily do too many more. But there will be some more in 2026, but probably at a more measured pace. Thank you. But does that mean that in terms of revenue contribution, should I assume to be flat, let's say, compared to 2025, or potentially down? I don't think down. I think, let's say, flat to begin with, and we can see how that progresses as we go through the year. Thank you, and then, apologies, one last one. It's more like a technical one. Can you elaborate on the interest cost expectations for 2025 and 2026? Thank you. Yes. We're guiding to 2025 to GBP 120 million of net finance expense. Expect that to be about the same in 2026 as well. We will benefit a bit from lower rates, and while we're there, tax rates about 26% in 2025 and the same for 2026. The similar interest charges in 2026, is that including also M&A that you are in the pipeline, or is it based on what you have announced so far? Yeah. It's only on what we've announced so far. So you can assume that it benefits from that. We do have a slightly higher level of average net debt as we've gone through this year, which is in part of that bridge. Thank you. Thank you. Our next question is from Will Kirkness at Bernstein. Please go ahead. Thanks very much. I'm sorry, I missed the very beginning of the call, so hopefully, I won't be repeating anything. I've got three, please. Firstly, just could you quantify the tariff pricing impact you expect to see in the fourth quarter? Secondly, can you give us any comment on gross margins? We expect them to be for FY25. And then lastly, just conceptually, I think you've spoken before about the margin uplift since 2019 being kind of half M&A, half pricing, and inflation benefits, etc. But it feels like we've gone beyond giving slightly more than half back now. So I just wondered how you think about that, I guess, incremental weakness versus the 2019 position. Thanks. Yeah. Morning, Will. The tariff pricing, it's part of the mix for 2025, and it is effectively what the level of inflation we're seeing in North America is really just tariff-driven. When we think of Q4 for 2025, where we're talking about slight positive underlying growth in the quarter, you can assume that Q4 is going to be about half of that's going to be inflation, and the other half will be volume. We are seeing essentially, all of the inflation we're seeing at the moment is really driven by tariffs in North America, and it's contributing half of the underlying growth in Q4, or we expect it to anyway. In gross margin terms, yeah, as we know, we've seen a significant increase in gross margins 2019 versus 2025 and 2025. I think in 2025, underlying, we'll see a slight decline. But in total, it will be about the same as it was in 2024 because we've got the annualization of Nisbets to include. So we had a four-year effect of Nisbets, which has a higher natural gross margin, which will mean that total will be about the same. Underlying, slightly down, I'm expecting. And in the margin uplift versus 2019, so yeah, if you compared it to 2024, we've talked about for some time now that half of that's M&A, half of it's going to be organic. And of that half organic, a good proportion, a bigger proportion would be inflation-driven. I think in 2025, when we've got the final numbers, I think we should still expect to see some level of inflation support in those 2025 margins. But we'll be able to give you a better sense for that when we get the full picture at the end of the year. Okay. Thanks very much. Thank you. As a final reminder, for any last questions, please press star one on your telephone keypad. Okay. We have no further questions in the call, so I'll hand the floor back to Richard for any closing comments. Thanks for joining us today. I hope you found the call helpful. Look, we're pleased to be meeting our profit expectations for 2025 and to be providing a more stable profit outlook for 2026. And we're working very hard to drive the group's performance in challenging markets and are encouraged by the operational improvements being made. Furthermore, we remain confident in the group's underlying resilience and ability to drive consistent compounding growth in the medium term. I wish you all a restful Christmas and a happy New Year. Thank you very much. Thank you. This concludes today's conference call, and you may now disconnect your lines.