Bidvest Group Limited

Analyst thesis

Our recommendation is based on:

• A better earnings mix underpins Bidvest’s (BVT) higher-quality valuation profile, which is increasingly weighted toward essential, service-led and cash-generative activities. Business services contribute the largest share of group trading profit, while the investment case is progressively anchored in cash generation, with improved conversion and FCF strengthening the balance sheet and re-rating.

• The hygiene industry remains its clearest structural growth platform. The company is building scale across multiple geographies, with a presence in 11 countries, while maintaining the number-one position in eight. The Citron acquisition adds North American exposure.

• BVT’s decentralised model remains a real competitive advantage. Local management autonomy enables agile execution, while retaining control of returns and cash generation. That approach has been a consistent feature of BVT’s operating philosophy and continues to bolster the investment case.

• Our valuation implies an upside, but the path to that value depends on execution. We believe the discount can narrow as BVT sustains stronger cash conversion, deleverages the balance sheet, improves returns, and demonstrates that recent acquisitions can be integrated into a higher-quality earnings base.