Slide 1: Half-Year 2024 Results presentation
Half-Year 2024 Results presentation 23 February 2024
Slide 2: Results highlights
1 Results highlights GRAHAM CHIPCHASE, CEO
Slide 3: 1H24 highlights
3 1H24 Operational highlights • Material improvements in asset efficiency driven by more efficient pallet highlights dynamics across retailer and manufacturer supply chains, including inventory optimisation, and transformation initiatives • Improved customer service levels supported by greater palle
Slide 4: Operating environment
4 Operating environment Significant improvement in market pallet availability and a moderate increase in overall input costs FY24 KEY OPERATING DYNAMICS FY24 IMPACT ON BRAMBLES • Ongoing labour inflation in all markets • Pricing growth to moderate in line with cost-to-serve • Deflation across lumber
Slide 5: FY24 outlook
5 FY24 outlook Underlying Profit and Free Cash Flow guidance upgraded, revenue guidance unchanged For the year ended 30 June 2024, Brambles expects: • Sales revenue growth of between 6-8% at constant currency (unchanged); • Underlying Profit growth of between 13-15% at constant currency (previously
Slide 6: Shaping Our Future transformation
6 Shaping Improved customer service reflected across key metrics • NPS increased in all regions in the last 12 months driven by pallet availability Our Future improvements, increased investments in quality and improved speed of interactions • Improvement in ‘delivery in full, on time’ to ensure cust
Slide 7: Shaping Our Future scorecard
7 Shaping Our Future scorecard Asset Efficiency & Sustainability & ESG Digital Transformation Customer Business Excellence Network Productivity Outcomes Transform information and digital Deliver unrivalled value and Improve productivity and Reinvent the organisation, Pioneer regenerative supply insi
Slide 8: Digital transformation driving new sources of value
8 Digital transformation driving new sources of value Data points and learnings to inform how digital capabilities can help shape the future of pooling and customer offering FY24 priorities 1H24 progress 1H24 examples of value created • Expanded analytics solutions to drive further • Further adoptio
Slide 9: 1H24 Sustainability and ESG highlights
9 1H24 Sustainability and ESG highlights ESG ASSESSMENTS Significant progress made towards becoming a regenerative business #1 in DJSI Industry category Further progress towards 2025 Sustainability Targets including: Maximum AAA • Brambles Injury Frequency Rate of 3.6 (1H23: 3.8) rating, top 9% • 37
Slide 10: Financial overview
2 Financial overview JOAQUIN GIL CFO All references to growth rates, unless otherwise stated, are at constant FX rates.
Slide 11: 1H24 results
11 1H24 results Strong financial performance driven by recovery of cost-to-serve and transformation programme US$m 1H24 Change vs. 1H23 • Sales revenue +10% with price realisation of 11% and a (1)% decline in volumes across the Group Continuing operations Actual FX Constant FX Sales revenue 3,281.8
Slide 12: 1H24 Group sales revenue growth
12 1H24 Group sales revenue growth Pricing to recover the cost-to-serve; excluding inventory optimisation, volumes increased 1% driven by better like-for-like volumes in most regions partly offset by weak consumer demand in Europe Growth across all segments Growth weighted to price realisation 1H24
Slide 13: Group profit analysis (US$m)
13 Group profit analysis (US$m) Improved pricing and commercial terms combined with operational efficiencies offset cost-to-serve increases and incremental investments to support transformation initiatives - Additional costs of US$(38)m due to Lower North American higher pallet return rates and asse
Slide 14: CHEP Americas
14 CHEP Americas Margin and ROCI improvements despite incremental costs associated with higher pallet return rates and increased investment in transformation initiatives 1H24 Change vs. 1H23 1H24 performance Actual Constant • Pallets revenue +8% primarily driven by pricing actions taken (US$m) FX FX
Slide 15: US pallets revenue
15 US pallets revenue Continued recovery of cost-to-serve with volume decline driven by inventory optimisation US pallets revenue growth breakdown (constant FX) 1H24 revenue growth components: • Price/mix growth of +11% driven by rollover contributions from pricing actions taken in FY23 to recover t
Slide 16: CHEP EMEA
16 CHEP EMEA Price realisation to recover cost-to-serve and supply-chain efficiencies supporting margin & ROCI expansion 1H24 Change vs. 1H23 1H24 performance Actual Constant • Pallets revenue +13% driven by price realisation to (US$m) FX FX recover cost-to-serve and net new business growth in Europ
Slide 17: EMEA sales growth
17 EMEA sales growth Price realisation driven by recovery of cost-to-serve in the pallets business; Volumes impacted by weak underlying consumer demand and inventory optimisation in Europe CHEP EMEA revenue growth breakdown (constant FX) 1H24 revenue growth components: +14% • Price/mix growth of +13
Slide 18: CHEP Asia-Pacific
18 CHEP Asia-Pacific Margin and ROCI remain strong despite increased supply chains costs as pallet circulation improves in Australia and the business cycles one-off benefits in the prior corresponding period 1H24 Change vs. 1H23 1H24 performance Actual Constant • Pallets revenue +12% included strong
Slide 19: Corporate Segment
19 Corporate Segment Higher employee-related costs to support delivery of transformation programme benefits 1H24 Change vs. 1H23 1H24 performance Actual Constant • Shaping Our Future costs increased US$14.9m (US$m) FX FX and included: Shaping Our Future – Digital transformation costs of US$45.7m inc
Slide 20: Cash flow
20 Cash flow Free Cash Flow before dividends increased US$303 million driven by higher earnings, lower capex and improved compensations for lost assets (US$m, actual FX) 1H24 1H23 Change • Operating cash flow increased by US$377.2m reflecting: – Capital expenditure (cash basis) decreases of US$267.2
Slide 21: Asset efficiency
21 Asset efficiency Pooling capex to sales ratio improved by ~14pts, driven by lower pallet purchases (inventory optimisation and asset productivity initiatives), some pallet price deflation and strong revenue growth Pooling capex to sales ratio 1H24 pooling capital expenditure of US$473m (accruals
Slide 22: Balance sheet
22 Balance sheet Strong liquidity and interest cover despite higher global interest rates Dec 23 Jun 23 • Net debt increase of US$18m as positive Free Cash Flow after dividends of US$116m was Net debt1 US$2,742m US$2,724m more than offset by lease capitalisations of Average term of committed facilit
Slide 23: FY24 Outlook Considerations
23 FY24 Outlook Considerations Strong revenue growth, operating leverage and cash flow generation • FY24 sales revenue growth of between 6-8% at constant currency (unchanged) – FY24 sales revenue growth to be driven by price realisation with volumes now expected to be flat to FY23 o Price growth exp
Slide 24: FY24 Outlook Considerations
24 FY24 Outlook Considerations Strong revenue growth, operating leverage and cash flow generation • FY24 net finance costs expected to increase by ~US$15m to US$20m • FY24 hyperinflation charge (non-cash) expected to be ~US$50m • FY24 effective tax rate expected to be 30.5% (FY23: 30.1%) • FY24 ROCI
Slide 25: Investor value proposition
25 Investor value Sales revenue growth in the mid single-digits based on a combination of pricing and proposition volume growth with new and existing customers Underlying Profit growth in the high single-digits through operating efficiencies and supported by further investment in the business Co
Slide 26: Half-Year 2024 Results presentation
Half-Year 2024 Results presentation 23 February 2024
Slide 27: Appendix
3 Appendix Brambles
Slide 28: Sales revenue by region and sector
28 Appendix 1 Brambles: Sales revenue by region and sector 1H24 sales revenue by region 1H24 sales revenue by sector1 India, Middle East, Eastern Europe Asia Türkiye, Africa 0.5% Other Auto 3.2% 4.0% 4.2% Packaging 11.8% 2.3% Latin General America retail 8.9% 2.2% Storage ANZ & Dist. USA & Fast- 7.9
Slide 29: Major currency exchange rates
29 Appendix 2 Major currency exchange rates1 USD EUR AUD GBP CAD MXN ZAR PLN BRL 1H24 1.0000 1.0822 0.6554 1.2524 0.7418 0.0578 0.0534 0.2435 0.2024 Average 1H23 1.0000 1.0177 0.6768 1.1838 0.7534 0.0505 0.0585 0.2155 0.1915 31 Dec 23 1.0000 1.1069 0.6835 1.2731 0.7560 0.0590 0.0539 0.2557 0.2058 As
Slide 30: 1H24 currency mix
30 Appendix 3 1H24 currency mix (US$m) Total USD EUR AUD GBP CAD MXN ZAR PLN BRL Other1 Sales revenue 3,281.8 1,325.8 698.1 227.3 216.2 199.1 205.1 90.0 71.0 45.8 203.4 1H24 share 100% 40% 21% 7% 7% 6% 6% 3% 2% 1% 7% 1H23 share 100% 41% 20% 7% 6% 6% 6% 3% 2% 1% 8% Net debt2 2,742 1,183 1,467 (127) (
Slide 31: Credit facilities and debt profile
31 Appendix 4 Credit facilities and debt profile Committed Uncommitted Maturity Type1 Debt drawn Headroom facilities facilities (US$b at 31 Dec 2023) <12 months Bank/EMTN2 0.6 0.3 0.6 0.3 1 to 2 years Bank/144A3 0.7 - 0.5 0.2 2 to 3 years Bank - - - - 3 to 4 years Bank/EMTN2 0.6 - 0.6 - 4 to 5 years
Slide 32: Net plant and transport costs/sales revenue
32 Appendix 5 Net plant and transport costs/sales revenue Net plant cost/sales revenue Net transport cost/sales revenue (before NA lumber surcharge1) (Net of transport & fuel surcharges) 1H24 1H23 1H24 1H23 CHEP Americas 35.6% 37.9% 19.8% 19.5% CHEP EMEA 22.7% 23.8% 20.4% 22.2% CHEP Asia-Pacific 31.
Slide 33: CHEP Americas: Underlying Profit analysis
33 Appendix 6a CHEP Americas: Underlying Profit analysis (US$m) Higher pallet return rates and asset Lower North American productivity initiatives driving incremental surcharges in line with collections and relocations vs. 1H23 which lower market prices for included ~US$15m deferred cost benefit lum
Slide 34: CHEP EMEA: Underlying Profit analysis
34 Appendix 6b CHEP EMEA: Underlying Profit analysis (US$m) Additional repair and handling costs associated with higher pallet returns, as well as inflation of US$(8)m Impact of pallet Additional overhead investments in (labour and other costs partly offset price inflation on FY23 and 1H24 including
Slide 35: CHEP Asia-Pacific: Underlying Profit analysis
35 Appendix 6c CHEP Asia-Pacific: Underlying Profit analysis (US$m) Higher pallet return rates compared to 1H23 which included ~US$6m deferred cost benefit due to lower returns and Increased compensations for inflation of US$(5)m on labour lost assets partly offset by and direct materials increased
Slide 36: Capital expenditure on Property, Plant and Equipment
36 Appendix 7a Capital expenditure on Property, Plant and Equipment (Accruals basis, US$m) 1,811 • Reduction in ‘Replacement’ capex due to impact of pallet price deflation on 142 1,567 1H24 purchases 146 • ‘Growth and other’ mainly reflects benefits from inventory optimisation and asset efficiency i
Slide 37: Regional asset efficiency (pooling capex to sales ratio)
37 Appendix 7b Regional asset efficiency (pooling capex to sales ratio) North America Latin America EMEA 28.6% 32.7% 33.3% 39.7% 40.0% 23.1% 23.8% 23.0% 30.2% 23.2% 27.0% 25.6% 14.3% 16.9% 11.4% FY21 FY22 FY23 1H23 1H24 FY21 FY22 FY23 1H23 1H24 FY21 FY22 FY23 1H23 1H24 • FY22 increase due to lumber
Slide 38: Glossary of terms and measures
38 Appendix 8 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Actual currency/Actual FX Current period results (excluding hyperinflationary economies) translated into US dollars at the actual exchange rates
Slide 39: Glossary of terms and measures
39 Appendix 8 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: IBCs Intermediate Bulk Containers are palletised containers used for the transport and storage of bulk products in a variety of industries, inclu
Slide 40: Disclaimer
40 Disclaimer The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions. T
Slide 41: Investor & media contacts
41 Investor & Investors: media contacts Raluca Chiriacescu Vice President, Investor Relations +44 7810 658044 raluca.chiriacescu@brambles.com Suk Hee Lee Director, Investor Relations +61 433 343 888 sukhee.lee@brambles.com Media: Sandra Tang Senior Manager, Media & Communications +61 404 066 107 san