Brambles Limited · ASX:BXB
Brambles — H1 2005 Earnings Presentation
26 slides from Brambles's earnings presentation, Feb 23, 2005
Slide 1: 2005 Interim Results
2005 Interim Results (A$ figures) 23 February 2005 2005 Interim Results David Turner Chief Executive Officer 1
Slide 2: Further momentum in first half 2005
Further momentum in first half 2005 Significantly improved performance ¾ Sales were up 9% ¾ PBTA was up 36% to A$432m, A$116m higher than 1H04 ¾ CHEP USA continued to trade very strongly ¾ CHEP Europe recovery gaining momentum ¾ Recall turning around ¾ Cleanaway trading challenging Net cash flow
Slide 3: Solid sales, profit momentum & strong cash
2005 Interim Results Mike Ihlein Chief Financial Officer Solid sales, profit momentum & strong cash Actual Fx Effect Constant Dec 04 Dec 04 Dec 04 Dec 03 Growth UK GAAP, 6 months ending A$m A$m A$m A$m % Sales 4,076 (12) 4,088 3,761 9 EBITA 528 (1) 529 411 28 PBTA 432 - 432 317 36 PATA 292 - 292 220
Slide 4: Solid sales growth continues, with CHEP driving EBITA growth
Solid sales growth continues … Actual Fx Effect Constant Dec 04 Dec 04 Dec 04 Dec 03 Growth UK GAAP, 6 months ending A$m A$m A$m A$m % Continuing businesses CHEP 1,832 (25) 1,857 1,687 10 Cleanaway 1,361 26 1,335 1,259 6 Recall 357 (8) 365 332 9 Industrial Services 365 2 363 350 4 Regional Businesse
Slide 5: Strong Free Cash Flow
Strong Free Cash Flow A$m Half Year 1,500 1,000 Other 1,020 Cash Flow from 500 1,087 Operations 800 935 737 491 Capital 366 305 Expenditure - (159) 128 Interest and Tax (557) (439) (526) (687) (541) (500) Free Cash Flow (188) (183) (181) (251) (272) (1,000) 1H03 2H03 1H04 2H04 1H05 1H03 “Interest an
Slide 6: Cash flow from operations after gross capex by business
…particularly CHEP Cash flow from operations after gross capex A$m 296 280 1H03 1H04 1H05 230 180 154 130 111 94 76 80 60 37 29 40 30 1 0 10 (1) 3 (20) (70) (120) (106) CHEP Cleanaway Recall Industrial Regional Services Businesses Cash flow from operations is based on EBITDA, working capital movemen
Slide 7: Sustained falls in capex
Sustained falls in capex … A$m Capital expenditure 900 809 2002 2003 2004 2005 800 700 681 664 600 540 553 526 500 438 400 300 200 100 0 1H 2H Continuing Businesses (pre Corporate) 13 …. with CHEP Europe showing a large decline A$m Capital expenditure 400 2002 2003 2004 2005 301 277 300 270 270 217
Slide 8: Capex to Sales by half; Financial coverage ratios strengthen further
Capex to Sales by half % 40 30 20 10 1H02 1H03 1H04 1H05 — Americas — Europe — RoW — Total Ratio based on £M Sales and Capital expenditure 15 Financial coverage ratios strengthen further Dec04 Dec03 Dec02 Facilities/ UK GAAP, 6 months ending A$m A$m A$m Covenants Opening net debt - June (3,645) (3,9
Slide 9: Strong Sales and EBITA growth; CHEP regions
Strong Sales and EBITA growth Actual Fx Effect Constant Dec 04 Dec 04 Dec 04 Dec 03 Growth UK GAAP, 6 months ending A$m A$m A$m A$m % Americas 787 (47) 834 747 12 Europe 818 19 799 739 8 RoW 227 3 224 201 12 CHEP Sales 1,832 (25) 1,857 1,687 10 CHEP EBITA 343 (3) 346 233 48 CHEP Margin (%) 19 19 14
Slide 10: Americas and Europe EBITA bridges
Americas – led by sales & efficiencies EBITA UK GAAP, 6 months A$m 1H04 64 Volume, Price & Mix 30 Transportation costs 42 Plant costs & other 3 1H05 139 All numbers are calculated at constant currency as defined in the Glossary 19 Europe – restructuring benefits starting to emerge EBITA UK GAAP, 6 m
Slide 11: Cleanaway and Recall results
Sales growth but margins under some pressure Actual Fx Effect Constant Dec 04 Dec 04 Dec 04 Dec 03 Growth UK GAAP, 6 months ending A$m A$m A$m A$m % Sales UK 612 18 594 547 8 Germany 462 9 453 428 6 RoW 287 (1) 288 284 2 Total Sales 1,361 26 1,335 1,259 6 EBITA 92 1 91 104 (14) EBITA Margin (%) 7 7
Slide 12: Industrial Services; Tax rate rises
Steady performance continues Actual Fx Effect Constant Dec 04 Dec 04 Dec 04 Dec 03 Growth UK GAAP, 6 months ending A$m A$m A$m A$m % Sales 365 2 363 350 4 EBITA 43 - 43 42 6 EBITA Margin (%) 12 12 12 - Growth % calculated on £ constant currency basis 23 Tax rate rises on strong CHEP USA performance
Slide 13: Key objectives and progress
2005 Interim Results David Turner Chief Executive Officer Key objectives and progress Americas Continue USA recovery 9 Implement productivity measures 9 Enhance customer focus 9 Europe Consolidate performance in new organisation 9 Change pricing model to reflect CHEP’s costs underway Ach
Slide 14: Americas – Performance Summary
Americas – Performance Summary USA recovery well on track Good volume growth, sales +12% Improved margins to 17% ¾ From 9% 1H04 and 15% 2H04 Six Sigma approach ¾ Direct cost improvements ¾ Improved customer satisfaction Strong performance in Canada and Mexico Growth % calculated on £ const
Slide 15: Americas – transport challenges
Americas – meeting focus onthe transport challenges USA - Reduction in transport costs since FY02 Transport costs as % sales compared to FY02 % points 2% 0% -2% -4% -6% -8% FY02 FY03 FY04 1H05 29 Americas – meeting the objectives Sales Growth +12% ¾ National Accounts ¾ New Customers ¾ TPM conversi
Slide 16: Americas new pallet ratio; Europe Performance Summary
Americas – meeting the objectives USA - New Pallet Ratio(1) 6% 4% 2% 0% (2) FY02 FY03 FY04 1H05 (1) New pallet ratio measures the number of new pallets purchased as a percentage of all pallets issued (2) Includes “B” stock reduction benefit of A$68m 31 Europe – Performance Summary New structure be
Slide 17: Europe – focus on pricing
Europe – focus on pricing UK Continental Europe Headline fees: progressively through 2005 Headline fees: progressively through 2005 NCD: April 2004 NCD: November 2003 LVD: August 2004 LVD: November 2003 LDC: December 2003 LDC: November 2003 Charges are: NCD: Non cooperating distributor LVD: Low volu
Slide 18: Europe – Looking forward; Rest of the world
Europe – Looking forward Complete roll out of new pricing architecture by December 2005 Deliver sustainable volume growth Perfect Trip - Six Sigma approach to improving customer satisfaction and operating efficiencies Continue to implement responsibility transfer 35 Rest of the world – Perfo
Slide 19: Cleanaway Performance Summary; Focus on Germany
Performance Summary Global headquarters now closed UK ¾ Municipal, new contracts and additional work ¾ Restructuring in C&I ¾ Landfill volumes grew ¾ Greenwich MRF now operational Germany ¾ New DSD and municipal waste paper contracts affected margins ¾ PET and C&I business both improved Australia
Slide 20: Focus on UK; Recall performance summary
Focus on UK Municipal order book remains strong at £828 million C&I cost reductions and focus on BVA positive contracts Access to landfill remains important UK Government still seeking 25% waste recycling by end 05/06; 03/04 achieved 17%, up 3pp 39 Performance summary Recovery from 2004 un
Slide 21: Meeting the challenges; Further opportunities for growth
Meeting the challenges SDS – ongoing pricing pressure in USA from new market entrants Cost base must be competitive Balancing storage capacity to allow for growth without carrying excess space 41 Further opportunities for growth DMS expanding in all markets driven by outsourcing SDS growin
Slide 22: Industrial Services Performance Summary
Performance Summary Sales up 4% ¾ Northern Hemisphere strong (higher volumes, short term work) ¾ Australia flat (contract completion) Profits up 6% ¾ Despite short term lower volumes through PCI plant in Australia Investment to support new and renewed contracts in Australia ¾ Capital expenditu
Slide 23: Summary and Outlook for the Full Year
Summary To summarise: We have had a strong first half CHEP is trading very well Recall is growing in line with our plan Cleanaway is facing challenges but is performing well in a changed market in Germany Industrial Services is producing solid results 45 Outlook for the Full Year CHEP ¾
Slide 24: 2005 Interim Results
This presentation may contain certain “forward-looking statements” with respect to certain of Brambles’ plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty becau
Slide 25: Glossary of Terms & Measures
Glossary of Terms & Measures Appendix 1a Except where noted, common terms and measures used in this presentation are based upon the following definitions: Sales Includes Associates’ revenues but excludes non trading revenue Comparable EBITA Operating Profit EBITA Profit before interest, tax, goodwil
Slide 26: Glossary of Terms & Measures
Glossary of Terms & Measures Appendix 1c Except where noted, common terms and measures used in this presentation are based upon the following definitions: Unallocated Costs Head Office costs which are not allocated back to the divisions. These are excluded from the segmental analyses. Associates 50%