Slide 1: Half-Year 2021 Results presentation
Half-Year 2021 Results presentation 16 February 2021
Slide 2: Results highlights
1 Results highlights GRAHAM CHIPCHASE, CEO
Slide 3: 1H21 highlights
1H21 highlights Key messages • Strong revenue and earnings growth across all segments: o Sales revenue growth of +6%1 reflecting strong volumes and price realisation in the global pallet business and the commencement of a large Australian RPC contract which offset declines in Automotive and Kegstar
Slide 4: A global leader in Sustainability
A global leader in Sustainability Brambles' ambition: 'Pioneering a regenerative supply chain' • New 2025 targets launched in September 2020 focused on achieving a net positive contribution • Solid progress in the first six months: o Afforestation projects started; o First closed-loop upcycled plast
Slide 5: Operating environment: COVID-19
Operating environment: COVID-19 Consumer staples account for Global pallet business ~80% of Brambles’ revenues and • In 1H21, the business experienced elevated pallet underpin the resilience and defensive volumes as retailers raised inventories due to qualities of the business increased levels of at
Slide 6: Operating environment: Brexit
Operating environment: Brexit • As of 1 January 2021, the UK is no longer part of the EU • Although a UK-EU trade agreement is in place, supply chain uncertainties remain around the implementation of border checks and transport availability • These uncertainties have been accentuated by disruptions
Slide 7: Plastic pallet trials
Plastic pallet trials • Trials have been delayed due to COVID-19 • Three active smaller scale pilot trials ongoing • Expecting to start a pilot of significant scale with a large key customer later in 2021 • The purpose of these pilots is to test various product and business model parameters within C
Slide 8: Dividends and capital management
Dividends and capital management • Interim dividend of US10.0 cents declared, converted and paid as A13.08 cents and franked at 30% • Dividend payout ratio of 50% is within our targeted payout ratio range of 45-60%1 • ~A$1.9 billion from the proceeds of the IFCO sale returned to shareholders2 repres
Slide 9: FY21 outlook
FY21 outlook Guidance upgraded to reflect elevated volumes and disciplined cost management Key assumptions and inputs for FY21 outlook include1: • The broad continuation of current trends in input costs and network dynamics; and • A progressive recovery in the Automotive business Within this context
Slide 10: Financial overview
2 Financial overview NESSA O’SULLIVAN, CFO
Slide 11: 1H21 results
1H21 results Summary US$m 1H21 Change vs. 1H20 • Sales growth +6% reflecting +2% price and +4% volume growth driven by elevated pallet demand, Actual Constant solid pricing and revenue from commencement of Continuing operations FX FX a new RPC contract in Australia Sales revenue 2,565.5 7% 6% • Unde
Slide 12: 1H21 Group sales growth
1H21 Group sales growth Strong growth in Pallets and Australian RPCs offset declines in Automotive and Kegstar Growth across all segments1 Strong volume momentum and price realisation 1H21 Sales revenue growth (US$m) Price/mix and volume contribution to growth +7% 9 31 +6% 37 3% Pricing actions to r
Slide 13: Group profit analysis (US$m)
Group profit analysis (US$m) Revenue growth, supply chain efficiencies and cost recovery more than offset cost pressures Higher repair & handling costs due to changes in network dynamics, customer demand patterns In line with prior-year and focus on productivity of existing asset pool. investments t
Slide 14: CHEP Americas
CHEP Americas Elevated pallet demand with price realisation and supply-chain efficiencies offsetting cost headwinds 1H21 Change vs. 1H20 1H21 performance • Pallets revenue +8% largely driven by COVID-19 related Actual Constant demand from existing customers in North America and ongoing (US$m) FX FX
Slide 15: CHEP Americas margins
CHEP Americas margins Businesses cycling pre-pandemic trading with COVID-19 related cost increases and higher costs supporting asset productivity improvements 1H21 weighted contribution to CHEP Americas margin Key drivers of 1H21 margin performance FY21 expectation decline of (0.6)pts Full year marg
Slide 16: US pallets revenue
US pallets revenue Strong COVID-19 related demand and ongoing price realisation 1H21 revenue growth components: US pallets revenue growth breakdown • Price/mix growth of 2% driven by initiatives to recover higher cost-to-serve; • Like-for-like volume growth of 5% reflecting COVID-19 related demand f
Slide 17: US automation programme
US automation programme Programme on track to deliver full run rate of efficiency benefits in FY22 Overview of project Progress to date • ~US$170m capital investment • Plant automation project launched in 2H18 from FY19-FY21, ~5-year payback • 39 sites automated to date • Capital investment to be fu
Slide 18: CHEP EMEA
CHEP EMEA Strong sales growth and margin expansion despite cost headwinds 1H21 Change vs. 1H20 1H21 performance Actual Constant • Pallets revenue +6%: Net new wins in Central & Eastern Europe, price realisation and increased demand due to (US$m) FX FX COVID-19 & Brexit-related stockpiling in UK and
Slide 19: EMEA sales growth
EMEA sales growth Pallet demand driven by at-home consumption and Brexit stockpiling CHEP EMEA revenue 1H21 revenue growth components: growth breakdown • Price/mix growth +2% largely reflecting contractual price indexation with some mix benefits in Q2 • Net new business wins +2% driven by strong gro
Slide 20: CHEP Asia-Pacific
CHEP Asia-Pacific Strong pallet performance and one-off compensation more than offset Australian RPC contract start-up costs and lower Kegstar earnings 1H21 Change vs. 1H20 1H21 performance • Pallets revenue +6%: Price realisation in Australia and strong Actual Constant like-for-like volume growth i
Slide 21: Cash flow
Cash flow Dividends and capex fully funded by Free Cash Flow (US$m, actual FX) 1H21 1H20 Change Free Cash Flow after dividends increased +US$332.2m including benefit of cycling US$183.2m special dividend EBITDA1 880.8 812.9 67.9 payment in 1H20 Capital expenditure (cash basis)2 (460.6) (504.1) 43.5
Slide 22: Capital expenditure
Capital expenditure Disciplined management of capital spend and asset efficiency improvements despite increased pallet volumes and customer demand variability Change vs. 1H20 Accruals basis 1H21 (constant FX) Pooling capex to sales ratio (accruals basis) of 18.6% in 1H21 Pooling Capex US$477m +US$5m
Slide 23: Balance sheet
Balance sheet Balance sheet remains strong and well placed to fund share buy-back Dec 20 Jun 20 • Increase in net debt reflects Net debt US$1,986m US$1,712m A$393m (US$286m) of share buy-backs completed in 1H21 Average term of committed facilities 4.1 years 4.2 years • Undrawn committed bank facilit
Slide 24: Summary
Summary • Strong first-half performance despite COVID-19 and Brexit related impacts • Disciplined cost control and benefits from supply chain initiatives • Focus on asset productivity delivered asset efficiency improvements across the Group and limited capex despite strong volume growth and changes
Slide 25: Half-Year 2021 Results presentation
Half-Year 2021 Results presentation 16 February 2021
Slide 26: Appendix
@) Appendix
Slide 27: Treatment of Kegstar and MicroStar merger in financial statements
Appendix 1 Treatment of Kegstar and MicroStar merger in financial statements • Kegstar & MicroStar merger announced on 10 February 2021, creating the global leader in keg- rental market servicing craft customers and global brewers • Brambles will own ~15% of the combined entity with the remaining 85
Slide 28: US initiatives on track to deliver ~2-3pt margin improvement
Appendix 2 US initiatives on track to deliver ~2-3pt margin improvement1 by FY22 Pressures Mitigating actions Phasing of margin improvement Progress 1H21 FY21 FY22 Supply chain • Annual transport and network optimisation Cost inflation cost out exercise undertaken during the year Pricing/ surcharg
Slide 29: Sales revenue by region and sector
Appendix 3 Brambles: Sales revenue by region and sector 1H21 sales revenue by region 1H21 sales revenue by sector India, Middle East, Eastern Europe Asia Turkey, Africa Auto 3.8% 3.6% 1.3% Other 5.0% Packaging 12.0% 2.5% Latin America General 6.5% retail 1.4% USA & ANZ Storage Canada 8.6% & Dist. Fa
Slide 30: Major currency exchange rates
Appendix 4 Major currency exchange rates1 USD EUR AUD GBP CAD MXN ZAR PLN NZD BRL 1H21 1.0000 1.1870 0.7260 1.3161 0.7596 0.0471 0.0621 0.2636 0.6787 0.1848 Average 1H20 1.0000 1.1070 0.6823 1.2598 0.7569 0.0514 0.0675 0.2563 0.6455 0.2460 31 Dec 20 1.0000 1.2293 0.7676 1.3624 0.7834 0.0502 0.0684 0
Slide 31: 1H21 currency mix
Appendix 5 1H21 currency mix (US$m) Total USD EUR AUD GBP CAD MXN ZAR PLN NZD BRL Other1 Sales revenue 2,566 989 588 191 185 153 110 88 47 29 26 160 1H21 share 100% 39% 23% 7% 7% 6% 4% 3% 2% 1% 1% 7% 1H20 share 100% 39% 22% 7% 7% 6% 5% 4% 2% 1% 1% 6% Net debt2 1,986 1,035 1,342 (676) (60) 77 152 117
Slide 32: Credit facilities and debt profile
Appendix 6 Credit facilities and debt profile Committed Uncommitted Maturity Type1 Debt drawn Headroom facilities facilities (US$bn at 31 December 2020) <12 months Bank 0.1 0.3 0.1 0.3 1 to 2 years Bank 0.2 - - 0.2 2 to 3 years Bank 0.7 - - 0.7 3 to 4 years Bank/EMTN2 0.8 - 0.7 0.1 4 to 5 years Bank
Slide 33: Net plant and transport costs/sales revenue
Appendix 7 Net plant and transport costs/sales revenue Net plant Net transport cost/sales revenue cost/sales revenue 1H21 1H20 1H21 1H20 CHEP Americas 37.2% 37.4% 22.6% 23.3% CHEP EMEA 23.4% 23.6% 21.0% 20.7% CHEP Asia-Pacific 35.7% 31.9% 13.1% 13.0% Group 31.8% 31.5% 21.0% 21.3% 1 Results highlight
Slide 34: CHEP Americas: Underlying Profit analysis
Appendix 8a CHEP Americas: Underlying Profit analysis (US$m) (6) (22) (8) (12) 63 (9) (3) 189 195 192 2 1H20 Volume, Depreciation Net Net IPEP Other 1H21 FX 1H21 1 Underlying price, mix transport plant costs Underlying Underlying Profit costs Profit Profit (constant FX) 1 Sales growth net of volume-
Slide 35: CHEP EMEA: Underlying Profit analysis
Appendix 8b CHEP EMEA: Underlying Profit analysis (US$m) (5) (3) (3) (2) 2 7 27 242 235 219 1H20 Volume, Depreciation Net Net IPEP Other 1H21 FX 1H21 1 Underlying price, mix transport plant costs Underlying Underlying Profit costs Profit Profit (constant FX) 1 Sales growth net of volume-related cost
Slide 36: CHEP Asia-Pacific: Underlying Profit analysis
Appendix 8c CHEP Asia-Pacific: Underlying Profit analysis (US$m) 2 (2) 4 (1) (2) (3) 8 64 58 60 1H20 Volume, Depreciation Net Net Other Comp- 1H21 FX 1H21 1 Underlying price, mix transport plant costs ensation Underlying Underlying Profit costs Profit Profit (constant FX) 1 Sales growth net of volum
Slide 37: Capital expenditure on Property, Plant and Equipment
Appendix 9 Capital expenditure on Property, Plant and Equipment (Accruals basis, US$m) 1,060 1,013 981 823 294 148 317 231 535 511 684 106 643 132 606 538 337 371 54 90 123 149 58 42 FY17 FY18 FY19 FY20 1H20 1H21 1 2 Other PP&E Replacement (DIN) Growth 1 Replacement capex in a period is the sum of D
Slide 38: Glossary of terms and measures
Appendix 10 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Actual currency/FX Results translated into US dollars at the applicable actual monthly exchange rates ruling in each period Average Capital Investe
Slide 39: Glossary of terms and measures
Appendix 10 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: FIFO First In First Out Like-for-like revenue Sales revenue in the reporting period relating to volume performance of the same products with the sa
Slide 40: Disclaimer
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. This
Slide 41: Investor Relations contacts
Investor Relations contacts Sean O’Sullivan Vice President, Investor Relations & Corporate Affairs sean.osullivan@brambles.com +61 2 9256 5262 +61 412 139 711 Raluca Chiriacescu Director, Investor Relations raluca.chiriacescu@brambles.com +44 20 3880 9412 +44 7810 658044 1 Results highlights 2 Finan