Brambles Limited · ASX:BXB
Brambles — FY2001 Earnings Presentation
51 slides from Brambles's earnings presentation, Sep 5, 2001
Slide 1: The “New” Brambles Group
The “New” Brambles Group A global leader in Support Services London September 5th 2001 1
Slide 2: CK Chow, CEO
CK Chow CEO 2
Slide 3: Highlights
Highlights • Completion of Merger – Creation of New Brambles – a global support services company with high growth potential – Integration proceeding smoothly • Strong revenue growth in 2001 – CHEP revenue up 13% – Cleanaway revenue up 30% – Recall revenue up 45% (all at constant exchange rates) • Co
Slide 4: Brambles Industries Limited Results
Brambles Industries Limited Results June June 2001 2000 Growth A$m A$m % Trading Revenue 1 5,801 4,923 18 EBIT – Continuing businesses2 431 387 11 EBIT – Group2 511 505 1 Profit before tax 225 461 (51) Profit after tax 3 153 369 (59) Profit after tax before Equipment 347 365 (5) writedown and merger
Slide 5: New Brambles Proforma Summary Results
New Brambles Proforma Summary Results June June Organic 2001 2000 Growth Growth £m £m % % Revenue 3,181 2,807 13 7 EBIT 1 420 435 (3) EBITA 2 444 452 (2) Profit Before Tax 2 338 379 (11) Profit After Tax 2 232 272 (15) EPS (pence) 2,3 13.8 16.2 (15) Net Debt 1,869 1,585 • Pre-exceptional items • Pre
Slide 6: New Brambles Contribution by Business – 2001 Proforma
New Brambles Contribution by Business – 2001 Proforma Revenue EBITA 1 £3,181m June 2001 £444m Pallet Pooling 9% 13% Waste 8% 10% 34% Management 7% Industrial Services 51% 6% 5% Recall 10% Other Continuing 20% 27% To be divested • Before goodwill amortisation, tax and exceptional items. Unallocated c
Slide 7: CHEP - Strong Revenue Growth
CHEP - Strong Revenue Growth • Revenue grew 13% at constant exchange rates – Americas up 23% – Europe up 7% – Australia up 14% • A number of high growth activities – RTP Revenue up 50% – Wal*Mart Volume up 41% • Growth in Continental Europe was slower, but major contract implementations are accelera
Slide 8: CHEP - 2001 Profit Impacted by Growth Investments
CHEP - 2001 Profit Impacted by Growth Investments • Strong RTP start-up in both US and Europe • Global IT Investment • Temporary operational inefficiencies related to Depot Consolidation Programme in the US • High pallet investment to get ready for Wal*Mart roll-out 8
Slide 9: CHEP - a High Quality, High Growth Business
CHEP - a High Quality, High Growth Business • Strong growth momentum • Only 30% of FMCG markets in the US and Continental Europe have been penetrated • Entry into new market sectors • Introduction of new products • Investing to renew and improve operational infrastructure (IT and US Depots) • High b
Slide 10: Cleanaway
Cleanaway • Revenue up 30% at constant exchange rate EBITA up 14% at constant exchange rate • Cleanaway is – Clear market leader in Australia – One of the leading players in the UK – Well placed in Germany with share in DSD – Start up of technical operations in Taiwan and Nanjing 10
Slide 11: Cleanaway - UK
Cleanaway - UK • Acquisition of Serviceteam – Contract with 80 municipalities – Part of Cleanaway strategy for “UK Waste Strategy 2000” – Already won new contracts from Hackney and Birmingham • Material Recovery Facility (MRF) in Rainham under construction, utilising German know how • Total Waste Ma
Slide 12: Cleanaway Germany
Cleanaway Germany • Germany has highest value waste management business in Europe • Successful integration of Waste Management Deutschland, acquired May 2000 • Profit impacted by lower recycled paper prices when compared with 2000 • Privatisation (PPP) opportunities • PET recycling plants with paten
Slide 13: Cleanaway Australia/NZ and RoW
Cleanaway Australia/NZ and RoW • Profitability improvement through cost reduction and service initiatives • Enter NZ via JV with Envirowaste • Acquired Wastemaster in Darwin • ‘VICTOR’ in-cab computer • Activities increasing in Taiwan and Nanjing, China 13
Slide 14: Recall
Recall • Presence established in Mexico City and Hong Kong • 14 acquisitions completed in 2001 • Integrated Document Solution (IDS), branded ReView, launched in May – Fusion of paper and digital – Global data centre in Atlanta – Two significant reference accounts signed in August • Substantial stand
Slide 15: Industrial Services
Industrial Services • Strong performance from Steel Services Growth of Shorts in the UK Acquisition of Bianchi in France • BIS Australia Major restructuring in progress to strengthen its businesses in specialised areas. Turnaround expected in current year 15
Slide 16: Other Continuing Businesses
Other Continuing Businesses • Brambles Marine revenue grew by 6%. Continues to deliver strong returns • Interlake Material Handling – 20% market downturn led to lower profit – Management action to cut costs, 400 headcount reduction by end of October. One site closure announced – Market recovery not
Slide 17: Divestments
Divestments Completed Car Transport Forklift Europe Various BIS Australian businesses ENSCO In Progress Wagon Rental Wreckair BESI Gardemann 17
Slide 18: David Turner, Chief Financial Officer
David Turner Chief Financial Officer 18
Slide 19: Brambles Industries Limited Results
Brambles Industries Limited Results June June 2001 2000 Growth A$m A$m % Trading Revenue 1 5,801 4,923 18 EBIT – Continuing businesses2 431 387 11 EBIT – Group2 511 505 1 Profit before tax 225 461 (51) Profit after tax 3 153 369 (59) Profit after tax before Equipment 347 365 (5) writedown and merger
Slide 20: Brambles Industries Limited Dividends
Brambles Industries Limited Dividends Final Full Year 2001 2000/2001 Dividend per share 41cents 82 cents Franking 60% 65% 20
Slide 21: New Brambles Pro forma Results June 2001
New Brambles Pro forma Results 30 June 2001 • Difference between UK GAAP and Australian GAAP – goodwill amortisation with small impact £11m (A$30M) – operating profit in Aus GAAP taken after interest charge – impact of deferred tax • Difference between A$ and £ sterling due to exchange rate differen
Slide 22: Reconciliation between UK and Australian GAAP
Reconciliation between UK and Australian GAAP Net Profit Net Assets June June June 2001 2000 2001 UK GAAP £m 141 261 964 Australian GAAP adjustments •Business combinations 14 (14) 161 •Deferred tax full liability 4 (13) (54) •Restoration and rehabilitation provisions - 1 18 •DLC Structure costs (31)
Slide 23: New Brambles Proforma Summary Results
New Brambles Proforma Summary Results June June Organic 2001 2000 Growth Growth £m £m % % Revenue 3,181 2,807 13 7 EBIT 1 420 435 (3) EBITA 2 444 452 (2) Profit Before Tax 2 338 379 (11) Profit After Tax 2 232 272 (15) EPS (pence) 2,3 13.8 16.2 (15) Net Debt 1,869 1,585 • Pre-exceptional items • Pre
Slide 24: New Brambles Proforma Profit and Loss Account
New Brambles Proforma Profit and Loss Account June June 2001 2000 Growth £m £m % Revenue 3,181 2,807 13 EBITA before exceptionals 444 452 (2) Goodwill Amortisation (24) (17) 41 Net Interest Expense (106) (73) 45 Exceptionals before tax (66) 7 - Operating profit before tax 248 369 (33) Tax pre-except
Slide 25: New Brambles Continuing Businesses
New Brambles Continuing Businesses June June 2001 % of 2000 % of £m Total £m Total Revenue: Continuing businesses 2,772 87 2,326 83 To be divested 409 13 481 17 Total 3,181 100 2,807 100 EBITA before exceptionals: Continuing businesses 415 93 387 86 To be divested/Other 1 29 7 65 14 Total 444 100 45
Slide 26: New Brambles Continuing Businesses by Business
New Brambles Continuing Businesses by Business Revenue EBITA £2,772m June 2001 £415m 1,2 Pallet Pooling 12% 9% 7% 7% Waste 38% Management 5% 12% Industrial Services 57% Recall 22% 31% Other Continuing 1. Excludes Businesses to be divested 2. Before goodwill amortisation, tax and exceptional items. S
Slide 27: New Brambles Geographic Segmental
New Brambles Geographic Segmental Revenue EBITA £3,181m June 2001 £444m 1 1% 3% Europe 18% 13% Americas 50% 54% Australia/ New Zealand 30% 31% RoW • 27 Before goodwill amortisation, tax and exceptional items. Segmental analysis excludes unallocated costs
Slide 28: New Brambles Proforma Financial Characteristics
New Brambles Proforma Financial Characteristics June June Increase/ 2001 2000 (Decrease) Total Group EBITDA Margin % 25.2 27.5 (2.3) pp EBITA Margin % 14.0 16.1 (2.1) pp EBIT Margin % 13.2 15.5 (2.3) pp Continuing Businesses EBITDA Margin % 25.4 27.2 (1.8) pp EBITA Margin % 15.0 16.7 (1.7) pp EBIT M
Slide 29: Pallet and Container Pooling - CHEP
Pallet and Container Pooling - CHEP June June Growth Growth 2001 2000 Organic £m £m % % Sales 1,066 917 16 13 EBITA 234 226 4 EBITA Margin % 22.0 24.6 (2.6)pp 29
Slide 30: CHEP – Factors Affecting Profits
CHEP – Factors Affecting Profits Sales Growth at constant currency • US 23% Europe 7% Australia 14% RTPs Introduction • 34 million RTPs, + 42% since June 2000 • Gross margin breakeven to be reached in 1st half 2001/2002 Depot Consolidation • Temporary operational inefficiencies. Improvements should
Slide 31: CHEP – Revenue by Business Stream
CHEP – Revenue by Business Stream June 2001 June 2000 £1,066m £917m 5% Pallets 6% 5% 3% 4% 4% RTPs Autocrates Other 86% 87% 31
Slide 32: CHEP – Growth in Pallets and RTPs
CHEP – Growth in Pallets and RTPs millions millions 180 50 160 45 140 40 35 CAGR 65% 120 100 30 80 CAGR 21% 25 60 20 40 15 20 10 0 5 Jun- Dec- Jun- Dec- Jun- 0 99 99 00 00 01 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Pallets RTPs 32
Slide 33: Waste Management
Waste Management June June Growth Growth 2001 2000 Organic £m £m % % Sales 853 672 27 10 EBITA 91 82 11 EBITA Margin % 10.7 12.2 (1.5)pp 33
Slide 34: Waste Management Revenue by Business Type
Waste Management Revenue by Business Type June 2001 £853m 6% Waste 5% Collection Sorting / Recycling 14% Disposal 57% Landscape/ Facilities 18% Other 34
Slide 35: Recall
Recall June June Growth Growth 2001 2000 Organic £m £m % % Sales 190 128 48 10 EBITA 31 17 82 EBITA Margin % 16.3 13.3 3.0pp 35
Slide 36: Recall Revenue by Business Type
Recall Revenue by Business Type June 2001 June 2000 £190m £128m Document 19% Management 8% Integrated 21% Document Solutions 18% Data 63% 0% Protection 71% 0% Secure Destruction 36
Slide 37: Industrial Services
Industrial Services June June Growth Growth 2001 2000 Organic £m £m % % Sales 331 302 10 - EBITA 21 22 (5) EBITA Margin % 6.3 7.3 (1.0)pp 37
Slide 38: Other Continuing Businesses
% of Continuing Group Other Continuing Businesses - Revenue 12% - EBITA 9% Marine Transport Federal Container Corporation TCR United Transport Interlake Eurotainer Meineke 38
Slide 39: Other Continuing Businesses
Other Continuing Businesses June June Growth Growth 2001 2000 Organic £m £m % % Sales 332 307 8 (1) EBITA 38 40 (5) EBITA Margin % 11.1 12.7 (1.6)pp 39
Slide 40: Businesses to be Divested
Businesses to be Divested June June Growth Growth 2001 2000 Organic £m £m % % Sales 409 481 (15) 1 EBITA 38 65 (42) EBITA Margin % 9.3 13.5 (4.2)pp Completed: Car Transport, Forklifts Europe, Security, ENSCO In Progress: Wagon Rental, Wreckair, BESI, Gardemann 40
Slide 41: Exceptional Items
Exceptional Items June June 2001 2000 £m £m Divestments & rationalisation 25 7 Write down of equipment division (91) - Total pre-tax (66) 7 Income tax thereon - (1) Total (66) 6 41
Slide 42: Taxation
Taxation June June 2001 2000 £m £m Profit before tax and exceptionals* 338 379 Tax (106) (107) Tax rate % 31.4 28.2 Note : under Australian GAAP* A$m A$m Profit before tax and exceptionals* 912 930 Tax A$m (298) (326) Tax rate % 32.6 35.1 * Pre-goodwill amortisation 42
Slide 43: New Brambles Proforma Cash Flow
New Brambles June June 2001 2000 Proforma Cash Flow £m £m Operating Cashflows 719 662 Interest (113) (69) Tax paid (87) (78) Capital Expenditure (721) (586) Disposals of Fixed Assets 58 91 Other Investments (net) (12) (1) Acquisitions (171) (203) Disposals 82 35 Associate Loans (net) - - Share Issue
Slide 44: Capital Expenditure
Capital Expenditure Total incl. PP & E Acquisitions £721m £892m CHEP 8% 10% 3% 3% 4% Waste Management 13% 7% Industrial Services 53% Recall 6% 12% 64% Other 17% Disposals 44
Slide 45: Acquisitions and Divestments
June June Acquisitions and Divestments 2001 2000 £m £m Total acquisitions: 171 203 CLEANAWAY 61 - Service Team / Wastemaster 59 31 Recall - Instashred /SDA / Shuttle 91 Industrial Services 2 55 CHEP 4 - All Other 15 56 Total Divestments: 82 35 - Security - Equipment Division – Australia - Forklifts
Slide 46: New Brambles Proforma Movements in Net Debt
New Brambles Proforma Movements in Net Debt June June 2001 2000 £m £m Opening net debt (1,585) (1,324) Cash flow (284) (261) Closing net debt (1,869) (1,585) 46
Slide 47: Outlook
Outlook • Strong revenue growth from continuing businesses has been maintained in the first two months of the current year, which provides a basis for improvement as the year progresses • The fundamentals of CHEP, Cleanaway and Recall remain strong • Other, including BIS, will benefit from managemen
Slide 48: The “New” Brambles
The “New” Brambles • A global leader in Support Services 48
Slide 49: Appendices
Appendices • Profit and Loss Account Australian GAAP • Cash Flow Australian GAAP 49
Slide 50: New Brambles Proforma Profit and Loss Account
New Brambles Proforma Profit and Loss Account June June 2001 2000 Growth A$m A$m % Trading revenue 8,646 7,167 21 EBIT before exceptionals 1,101 1,043 6 Net Interest Expense (286) (187) 53 Exceptionals before tax (201) 38 - Operating profit before tax 614 894 (31) Tax pre-exceptionals (297) (326) (9
Slide 51: New Brambles Proforma Cash Flow
New Brambles June June Proforma Cash Flow 2001 2000 A$m A$m Operating Cashflows 1,954 1,688 Interest (308) (174) Tax paid (236) (200) Capital Expenditure (1,960) (1,495) Disposals of Fixed Assets 157 233 Other Investments (net) (40) (59) Acquisitions (448) (434) Disposals 222 70 Associate Loans (net