Brambles Limited · ASX:BXB
Brambles — Investor Day (September 2021)
98 slides from Brambles's investor day presentation, Sep 13, 2021
Slide 1: Brambles 2021 Investor Briefing Day 1 ASX cover letter
Brambles Limited ABN 89 118 896 021 Level 10, Angel Place, 123 Pitt Street Sydney NSW 2000 Australia GPO Box 4173 Sydney NSW 2001 Tel +61 2 9256 5222 Fax +61 2 9256 5299 www.brambles.com For personal use only 13 September 2021 The Manager - Listings Australian Securities Exchange Limited Exchange Ce
Slide 2: Day 1 Investor Day
For personal use only Day 1 Investor Day 13 September 2021 2021
Slide 3: Agenda
2 Day 1 Sydney London Presentation Presenter For personal use only agenda Strategic overview Graham Chipchase, CEO 17:00 8:00 Financial overview Nessa O’Sullivan, CFO 17:50 8:50 Q&A & break Shaping Our Future Craig Jones, Chief Transformation Officer 18:15 9:15 Digital Transformation Helen Lane, Chi
Slide 4: Agenda
3 Day 2 Sydney London Presentation Presenter For personal use only agenda 18:00 9:00 CHEP Europe David Cuenca, President CHEP Europe Q&A 18:40 9:40 CHEP Latin America Paola Floris, President CHEP Latin America Q&A 19:15 10:15 BREAK 19:20 10:20 CHEP North America Laura Nador, President CHEP North Ame
Slide 5: Financial numbers and format
4 Financial For personal use only numbers and Unless otherwise stated: • All currency amounts are in US dollars format • All historical dollar amounts are at actual foreign exchange (FX) rates • All outlook statements are at fixed 30 June 2021 FX rates • Year-on-year percentage growth rates are in c
Slide 6: Disclaimer
5 Disclaimer For personal use only 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
Slide 7: Strategic overview
For personal use only Strategic overview Investor Day Graham Chipchase 2021 Chief Executive Officer
Slide 8: Transforming Brambles to drive a step change in value creation
7 Transforming For personal use only Brambles Building on strong foundations Compelling investor value proposition to drive a step • We have created a more resilient, agile and sustainable business model • Mid single-digit revenue growth with Underlying Profit leverage from FY23 change in value • St
Slide 9: Our purpose
8 Our purpose For personal use only As at 30 June 2021, Brambles: Brambles’ purpose is to connect people Operated in... with life’s essentials, every day ~60 countries • Our assets form the invisible Owned... backbone of the global supply chain Our sustainable • The world’s biggest brands trust us ~
Slide 10: Circular, sustainable business model
9 Circular, sustainable business model For personal use only Share and reuse model delivering value to our key stakeholders Customers Shareholders • Enhances operational efficiency • Sustainable growth driven by expansion of core • Frees up cash and resources businesses • Supports sustainability obj
Slide 11: Strategic priorities
10 Strategic For personal use only priorities Digital Transformation Customer Value Improve the customer Invest to transform experience through simpler information and digital Strategic goal: We seek to insights into new sources processes, additional services and enhanced strengthen our position as
Slide 12: Resilient customer base and growth potential
11 Resilient customer base Growth potential For personal use only Primarily serving the ‘consumer staples’ sectors Significant ‘white space’ in all regions FY21 sales revenue by sector Pallets market share1 Automotive Other 12.3% 4.0% Packaging 45% General 2.5% 59% 56% retail 1.4% 88% 10% 99% Storag
Slide 13: External environment
12 External environment For personal use only Acceleration of supply chain trends Continued uncertainty and volatility Accelerated shift to online channels Economies and societies returning to new normal ... E-commerce established at 10-15% of FMCG sales in ongoing disruptions to trade, combined wit
Slide 14: Focused portfolio and strong fundamentals
13 Focused portfolio and strong fundamentals For personal use only Leveraging the foundations Accelerated Getting the foundations right Transformation (FY17 – FY20) (FY21) (FY22 +) • Focus the portfolio on core businesses • Strong performance and execution in unprecedented operating conditions Takin
Slide 15: Investing to accelerate transformation
14 Investing For personal use only Building the Brambles of the future to accelerate transformation Digital Transformation Customer Value Twin-track approach: driving increased performance from Delivering increased Delivering current business and increasing Shaping new business returns and investmen
Slide 16: Transforming performance of current business model
15 Transforming performance For personal use only of current business model Delivering increased returns and funding investment in innovation Asset efficiency & network productivity Business excellence Deploy new technologies and ways of working to increase Reinvent how we operate: processes, techno
Slide 17: Building the Brambles of the future
16 Building the Brambles For personal use only of the future Delivering new business capabilities and sources of growth Digital Transformation Customer Value Use data and analytics to unlock new sources of value for Make Brambles the natural partner of choice for supply chain customers and Brambles
Slide 18: Sustainability
17 Sustainability For personal use only Our vision: Pioneering regenerative supply chains Strengthening Brambles’ position as a global leader in sustainable business and supply chains • COVID-19 has accelerated the transition to a more sustainable world • Customers, consumers and wider stakeholders
Slide 19: Investor value proposition
18 Revenue growth and leverage EPS growth in the Investor value Sales revenue growth in the Underlying Profit growth high single-digits For personal use only in the high from FY23 proposition mid single- digits single-digits from FY22 from FY23 FY22 a year of increased investment to support sustaine
Slide 20: Financial overview
For personal use only Financial overview Investor Day Nessa O’Sullivan 2021 Chief Financial Officer
Slide 21: Foundations in place to support transformation plans
20 Foundations in place to For personal use only support transformation plans Significant progress FY18 – FY21 and delivery of strong FY21 results in a challenging environment • We have created a more resilient, agile and sustainable • Progressive and sustained reduction in working capital business
Slide 22: Key drivers of total value creation of 10%+ pa from FY23
21 Key drivers of total value creation of 10%+ pa from FY231 For personal use only Revenue Growth Underlying Profit ROCI • ROCI in the mid-to-high teens Total Sales Growth2 High single-digit growth • Strong balance sheet • Share buy-back expected to be 7% completed in FY22 5-7% 5% 2-3% Dividends 4%
Slide 23: Key transformation investments to support value creation
22 Key transformation investments to For personal use only support value creation Short-term transformation costs in FY22-FY23 and ongoing Indicative investments: investments in digital and supply chain gated based on delivery of successful outcomes in FY22 and FY23 • Short term transformation costs
Slide 24: Key drivers of Underlying Profit growth uplift
23 Key drivers of Underlying Profit growth uplift For personal use only FY21 to FY25 net of transformational investment costs Contribution to FY25 Underlying Profit growth uplift from FY21 Growth Efficiency ~40% ~5% ~55% Business Excellence • Organisational efficiencies, leveraging Asset Efficiency
Slide 25: All regions contributing to FY21 to FY25 Underlying Profit growth uplift
24 All regions contributing to FY21 to FY25 For personal use only Underlying Profit growth uplift Regional contributions to FY25 Underlying Profit growth uplift from FY21 ~10% ~(35%) ~50% ~75% Corporate (including transformation costs) • Includes incremental costs associated with the transformation
Slide 26: Revenue growth
25 Revenue growth For personal use only Ongoing revenue momentum well balanced FY22-25 sales growth supported by improved use of data with growth from both new and existing analytics and leveraging new Salesforce tools: customers and pricing Pricing / Mix • Focus on value-based pricing Total sales g
Slide 27: Underlying Profit
26 Underlying Profit For personal use only Transformation to drive sustained Revenue growth FY22 to FY25 supporting Underlying Profit high single-digit Underlying Profit growth growth from FY23 onwards • Mid single-digit sales growth with pricing initiatives and volume growth across all segments sup
Slide 28: Network productivity supply chain initiatives
27 Network Productivity For personal use only benefits driven by continued investment in supply chain initiatives FY22 to FY25 investment in supply chain initiatives ~US$415m planned with a 4 to 5-year payback • Proven track record of delivering high returns on supply chain investments – supporting
Slide 29: Asset efficiency
28 Asset efficiency FY21 Performance: (Pooling capital expenditure) For personal use only • Reduced losses across all regions, excluding the US • Continued reduction in Latin America losses driving significant cashflow improvement Initiatives driving improvements in underlying • Impact of record lum
Slide 30: Non-pooling capital expenditure
29 Non-Pooling Capital Expenditure For personal use only Increased supply chain investments to Transformation non-pooling capex: support network productivity transformation • Includes investments in supply chain automation, lumber procurement and pallet durability initiatives, IT & systems and Digit
Slide 31: Underlying cash flow funding investments
30 Underlying cash For personal use only flow funding • FY21: Positive Free Cash Flow of US$341m including US$215m of timing • FY23 & FY24: Free Cash Flow expected to fund capital expenditure (including investments in benefits relating to US$180m of pallet capex delayed to FY22 due to lumber transfo
Slide 32: FY22: a year of investment in transformation
31 FY22: a year of For personal use only investment in FY22 Outlook transformation • Revenue growth 5-6% • Underlying Profit growth 1-2% including ~$US50 million of short-term transformation costs1 • Underlying effective tax rate expected to increase by ~1.5pts driven by the expected impact of incre
Slide 33: Earnings guidance FY23 to FY25
32 Earnings Revenue Growth: For personal use only Guidance • Mid single-digit sales growth with pricing initiatives and volume growth across all segments Underlying Profit Growth – high single-digit: FY23 to FY25 • FY23: high single-digit Underlying Profit growth including ~US$20m of short-term tran
Slide 34: Rigorous approach to transformation
33 Rigorous For personal use only approach to Broad-based involvement and mobilisation transformation • Detailed bottom-up planning exercise completed in FY21 • Multi-year plan based on concrete, quantified initiatives Hands-on, collaborative leadership from Executive Leadership Team (ELT) • Chief T
Slide 35: Shaping Our Future Scorecard
34 Shaping Our Future Scorecard ESG metrics: E Environmental S Social G Governance Asset Efficiency & Digital Transformation Customer Business Excellence Sustainability and ESG Financial outcomes Network Productivity For personal use only Outcomes Transform information and digital Deliver unrivalled
Slide 36: Transforming the business to drive a step change in value creation
35 Transforming For personal use only the business to We have created a more resilient, agile and sustainable business model setting We are transforming the business to drive a step change in value creation drive a step us up for future success with contributions from every region: • Improved commer
Slide 37: September 2021 Investor Day
For personal use only 13 September 2021 Investor Day 2021
Slide 38: Shaping Our Future
For personal use only Shaping Our Future Investor Day Craig Jones 2021 Chief Transformation Officer
Slide 39: Our Transformation
38 Our Transformation For personal use only We achieved multiple How we will deliver successes in the past our ambition: Twin-track approach: driving increased performance from current business and increasing investment to create the 18 months: • Empowerment: we business of the future • Piloted Effo
Slide 40: Introduction to the scorecard
39 Introduction to For personal use only the scorecard A tool to track transformation
Slide 41: Shaping Our Future Scorecard
40 Shaping Our Future Scorecard ESG metrics: E Environmental S Social G Governance Asset Efficiency & Digital Transformation Customer Business Excellence Sustainability and ESG Financial outcomes Network Productivity For personal use only Outcomes Transform information and digital Deliver unrivalled
Slide 42: Network productivity: strong track record of success
41 Network productivity: strong track record of success For personal use only ~US$300m investment programme over past 3-years delivering strong returns FY19 to FY21 Successfully automated over 100 plants across regions: 52 in the US, 35 in Europe, 8 in IMETA, 6 in Asia-Pacific and 5 in LATAM Del
Slide 43: Network productivity
42 Network productivity For personal use only Enhance the efficiency and resilience of Brambles’ operations Share of Network productivity FY25 benefits 25% 20% 55% Automation Transport Durability Deployed automation programme in over 100 Optimising utilisation rate of dedicated Improving durability
Slide 44: Asset efficiency
43 Asset efficiency For personal use only Optimise our collection engine, improving asset control and reducing capital intensity Asset Control & Productivity Asset Digitising Assets Control & • Integrating new Health & Detect tools Productivity • Piloted project to shed light on stray in our Asset C
Slide 45: Business excellence
44 Business For personal use only excellence Reinventing how we operate: processes, technology and organisation Processes Technology Organisation Improve organisation Build the technical Attract, retain and empower efficiency through process foundations to support high-calibre people to develop auto
Slide 46: Accelerating transformation to drive a step change in value creation
45 Accelerating For personal use only transformation Twin-track transformation driving • Rigorous approach to transformation with high level of ownership across the to drive a step increased performance and resilience of our current business while increasing organisation: Strong governance, ELT inve
Slide 47: September 2021 Investor Day
For personal use only 13 September 2021 Investor Day 2021
Slide 48: Business transformation enabled by digital
For personal use only Business transformation enabled by digital Investor Day Helen Lane 2021 Chief Data & Digital Officer
Slide 49: Business transformation enabled by digital
48 Business For personal use only transformation enabled by digital • The opportunity and ambition • The journey so far • The value • The enablers • The path forward
Slide 50: Vision
49 Vision For personal use only We will change the way the world moves goods by using unrivalled Shaping information to power Our Future smarter, more sustainable supply chains
Slide 51: Supply chain leaders past and future
50 Supply chain leaders past and future For personal use only “Brambles is the universal connector of the supply chain, past, present and future” Supply chain leader for the last 70 years Supply chain leader of the future Developing digital capabilities 1950s 2016-2021 2021+ CHEP • BXB Digital estab
Slide 52: Our digital transformation value and enablers
51 Our digital transformation For personal use only value and enablers Value Enablers Harness the power of data to optimise supply chains Put data at the heart of the business Better for Better for Better for the Data culture & Smart assets Brambles Customers planet capability • Asset • Effortless •
Slide 53: The value
For personal use only 52 The value
Slide 54: The digital portfolio: value-enabling products
53 The digital portfolio For personal use only value-enabling products Better for Brambles Better for customers Proactive Predictive Proactive Proactive “Detect” “Health” “Spot” “Predict” commercial customer account health orders analytics experience Targeted Field Desktop Continuous Common Reduced
Slide 55: Scaling better for Brambles analytics and asset productivity
54 Scaling better for Brambles For personal use only analytics and asset productivity Regions Looking forward Products Scale globally, priority North Desktop Diagnostics America + Learnings Predict & Health Field Predictive Diagnostics analytics, e.g. spot, predict Other digital activities
Slide 56: Examples of data-driven solutions that will delight customers
55 Examples of data-driven solutions For personal use only that will delight customers Effortless customer experiences Enhanced and ‘new’ customer solutions Examples of products in progress that remove customer Potential incremental income streams that will be touch points validated Data-driven deci
Slide 57: The enablers
For personal use only 56 The enablers
Slide 58: The digital portfolio: critical enablers
57 The digital portfolio For personal use only critical enablers Data culture & capability Smart assets Data Operating Model Brambles Data - Governance & Data Operating Model Data Operating Model Geolocation Serialised asset IM inventory Asset register and Hub information - Ethics & risk - Processes
Slide 59: Scaling digital and analytics
58 Scaling digital and analytics For personal use only Data process to generate value management Data analytics Our unrivalled existing data Data culture Digitised Data pool & capability assets Insights External data sources Solutions
Slide 60: Data culture & capability
59 Data culture & capability For personal use only Data infrastructure Data analytics talent Data literacy • Data Hub and data modelling • Digital centre of excellence incorporating • Data literate organisation • Data life cycle management BXB Digital • Data-driven culture • Cloud platforms • Recrui
Slide 61: Smart assets: cracking the code to unlock value
60 Smart assets For personal use only cracking the code to unlock value Variety Volume Up to FY22 Value • ~3bn asset movements annually • 1.5m containers serialised, 90m ‘scans’ of unique serial numbers at various locations in the Velocity supply chain • Perpetual information feed from 40,000 pallet
Slide 62: Smart assets: capability mix to build our data asset
61 Smart assets For personal use only employing a capability mix to build our data asset Digital capability Description Potential penetration of targeted markets Deploy advanced analytics and machine learning capabilities Advanced Analytics on existing and new data to drive business decisions Enterp
Slide 63: Path forward
For personal use only 62 Path forward
Slide 64: High level digital roadmap
63 High level digital roadmap For personal use only FY21 completed highlights FY22 In progress FY23 Planned FY21 Completed highlights FY22 In progress FY23 Planned, pending FY22 results Better for Brambles Better for Brambles Better for Brambles • Desktop diagnostics in UK, US and Latin America • De
Slide 65: Summary
64 Summary For personal use only We are driving a whole To do this we will need to There is a clear route business transformation do two things: to value both to us through digital and 1. Scale our existing and our customers in data capability leadership in Smart Assets the short and the long term 2
Slide 66: September 2021 Investor Day
For personal use only 13 September 2021 Investor Day 2021
Slide 67: Customer Experience
For personal use only Customer Experience Investor Day Alasdair Hamblin 2021 Senior Vice President, Strategy & Innovation
Slide 68: Why customer experience transformation matters
67 Why customer experience For personal use only transformation matters Customer experience transformation as a core pillar of Shaping Our Future Goals for transformed Customer Experience Brambles creates unparalleled value for customers and wider supply chains … • Make it easy for customers to choo
Slide 69: What we hear from customers: day-to-day experience
68 What we hear from customers For personal use only day-to-day experience Robust, easy to work with - Always enjoy working with CHEP employees are knowledgeable from the quality of pallets to the and helpful. staff themselves. Key customer requests - Fortune Global 250 - Beverage Company, Europe •
Slide 70: What we hear from customers: Partnership
69 What we hear from customers: Partnership For personal use only CHEP is a long-term valuable partner that provides CHEP and Conagra have had a long-standing strategic diverse opportunities to leverage synergy within our relationship and I have witnessed the evolution of this joint supply chains. r
Slide 71: Our customer experience ambition
70 Our customer experience ambition For personal use only Customer North Star • Our customers benefit from the visibility, insights and solutions they need to lead and grow • Our teams are enabled to deliver an effortless customer experience • Together, we power smarter and more sustainable supply c
Slide 72: How we are approaching Customer Experience transformation
71 How we are approaching Customer For personal use only Experience transformation Effortless customer experience Partner of choice … today and tomorrow Collaborating to create sustainable and digitally-enabled supply chains • Piloted initiatives in FY21 • Working with customers and automation • Z
Slide 73: What this means for customers
72 What this means For personal use only for customers Day-to-day • Simpler set-up and account management … intuitive 24/7 self-service for most activities interactions • Increasing automation and predictive suggestions for orders and collections • Early identification of anomalies and joint action
Slide 74: What this means internally for Brambles
73 What this means For personal use only internally for Brambles Cultural evolution to match changes in tools and processes Quantifying value of Customer Putting customer insights Empowering and Experience for customers and Brambles at the heart of decisions inspiring our people • Systematic measure
Slide 75: Value creation for customers and Brambles
74 Value creation How we will measure progress For personal use only Customer Experience metrics for customers Growth with existing and new customers and Brambles Usage of customer service channels What customers do Better for customers • Reduced administrative burden • Increased planning certainty
Slide 76: Transforming Customer Experience
75 Transforming For personal use only Customer Clear goals for transformation Experience is a • Effortless customer experience • Partner of choice critical part of • Collaboration to create sustainable future supply chains creating the future Brambles Reinforcing Brambles’ position as the leader in
Slide 77: September 2021 Investor Day
For personal use only 13 September 2021 Investor Day 2021
Slide 78: Creating value through Sustainability
For personal use only Creating value through Sustainability Investor Day Juan José Freijo 2021 Head of Sustainability
Slide 79: Sustainability context
78 Sustainability For personal use only Context New sustainability landscape constitutes a business • COVID-19 has accelerated the transition to a more sustainable world opportunity for Brambles • United Nations - decade of action in the SDGs • Climate Change - unprecedented level of attention COP
Slide 80: A recognised leader in Sustainability
79 A recognised For personal use only #2 most sustainable company globally leader in Sustainability #18 most sustainable company globally Brambles is well positioned for the challenges of the next decade AAA TOP 4% Sustainable business model Circularity Index A- Ambitious sustainability programme To
Slide 81: Our circular business model: impact in customers' supply chains
80 Our circular Impact in our customers’ For personal use only business model supply chains 2.4 million tonnes of CO2 Reuse at its core GROWER PRODUCER 3,160 mega liters of water PALLETS Intrinsically low carbon 3.1 million cubic meters of wood 3.2 million trees Material agnostic RPCs IBCs 1.4 milli
Slide 82: Our circular business model: financial and environmental levers
81 Our circular Financial and For personal use only business model environmental levers Standardisation Reuse at its core GROWER PRODUCER Powerful network PALLETS Intrinsically low carbon Operational efficiencies Asset productivity Material agnostic RPCs IBCs Durability RETAILER MANUFACTURER Brings
Slide 83: Creating value for customers
82 Creating value For personal use only for customers Zero Waste World Most of our customers have Innovation and • Eliminate waste committed to sustainability collaboration • Transport collaboration or circular economy targets • Supply chain efficiencies Circular advantage: Value Out of • Emissions
Slide 84: Customer Value Creation
83 Customer For personal use only Value Creation Our customers seek help from their suppliers Tangible contribution to our Collaboration - defending and Partnership for customers objectives growing our business together thought leadership
Slide 85: Customer Value Creation
84 Customer For personal use only Value Creation We are a credential for our customers
Slide 86: Stakeholder Value Creation
85 Stakeholder For personal use only Value Creation Working for the most sustainable company in the planet Employees Governments Investors • Key differentiator for attracting • Thought leadership for circular economy • Investment aligned with their stakeholders' and retaining talent… at every level
Slide 87: Our Sustainability Vision
86 Our Sustainability For personal use only Vision Aligned with stakeholder expectations for a sustainability leader To pioneer the first global regenerative supply chain
Slide 88: Our 2025 Targets
87 Our 2025 For personal use only Targets Forest Positive Grow two trees for Climate Positive Commit to a 1.5° future through Waste Positive Create reusable solutions every tree we use a carbon neutral business out of existing waste Supply Chain Positive Collaboration Positive Workplace Positive Mak
Slide 89: A regenerative example
88 A regenerative example For personal use only The Wheeled Q+ • Closed-loop product • Upcycled: post-consumer plastic waste, the resulting product is durable and of higher value • It is fully recyclable at the end of its long product lifetime, eradicating waste • Certified as 100% Carbon Neutral® P
Slide 90: An inspiring vision requires action
89 An inspiring vision For personal use only requires action Tangible achievements in year one We are a carbon neutral company (Scope 1 and 2) Launched the first upcycled plastic platform Invested in afforestation projects Defined two global circularity indices Top Employer in 17 countries
Slide 91: Summary
90 Summary For personal use only • A recognised world leader • Our sustainability and financial value are not in conflict, they support each other • Prepared for the low carbon economy risks and opportunity • Supporting customer base with their commitments • Setting a new level of ambition for the i
Slide 92: September 2021 Investor Day
For personal use only 13 September 2021 Investor Day 2021
Slide 93: Appendix
For personal use only 92 Appendix
Slide 94: Glossary
93 Glossary Except where noted, common terms and measures used in this document are based upon the following definitions: For personal use only ACI Average Capital Invested (ACI) is a twelve-month average of capital invested. (Average Capital Invested) Capital invested is calculated as net assets
Slide 95: Glossary
94 Glossary Except where noted, common terms and measures used in this document are based upon the following definitions: For personal use only Cobots Collaborative robot COLT CHEP Operations and Logistics Technology Constant currency/constant FX Current period results translated into US dollars at
Slide 96: Glossary
95 Glossary Except where noted, common terms and measures used in this document are based upon the following definitions: For personal use only FSC Forest Stewardship Council IBC Palletised containers used for the transport and storage of bulk products in a variety (Intermediate Bulk Container) o
Slide 97: Glossary
96 Glossary Except where noted, common terms and measures used in this document are based upon the following definitions: For personal use only NPS Net Promoter Score OEM Original Equipment Manufacturer RFID Radio Frequency Identification Device ROCI Underlying Profit divided by Average Capital
Slide 98: Investor Relations contact
97 Investor For personal use only Relations contact Raluca Chiriacescu Vice President, Investor Relations raluca.chiriacescu@brambles.com +44 7810 658044