Slide 1: Copies of slides for webcast
Brambles Limited ABN 89 118 896 021 Level 40 Gateway 1 Macquarie Place 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 17 August 2011 The Manager-Listings Australian Securities Exchange Limited Exchange Centre 20 B
Slide 2: Expanding the Global Pooling Business
For personal use only Expanding the Global Pooling Business 17 August 2011 Agenda Business Update & FY11 Highlights Tom Gorman, CEO Result Analysis & Outlook Greg Hayes, CFO Strategy & Growth Tom Gorman, CEO 2
Slide 3: Business Update & FY11 Highlights
For personal use only Business Update & FY11 Highlights Tom Gorman, CEO Business Update & FY11 Highlights Key discussion points Business update • Focus on expanding in global pooling solutions • Decision to divest Recall and organise pooling by three product categories • US$550m forecast growth cape
Slide 4: Delivering our strategy
For personal use only Business Update Business Update & FY11 Highlights Delivering our strategy Launch CHEP growth strategy: product Recall diversification & divestment geographic expansion decision Global pooling 2009 2010 2011 2012 solutions company Address challenges Completion in CHEP USA: Bette
Slide 5: Focus on pooling: Recall divestment
Business Update & FY11 Highlights Focus on pooling: Recall divestment For personal use only • Appropriate time to divest – Robust growth profile in physical and digital storage – Sales growth; improving margins and returns – Delivery of three-year turnaround program – Strong outlook for growth and f
Slide 6: US$100m cost efficiencies
Business Update & FY11 Highlights US$100m cost efficiencies For personal use only Cumulative annualised saving (US$m) June 2011 FX FY12 FY13 FY14 FY15+ European RPC network optimisation and rationalisation 5 5 5 5 CHEP USA and IFCO PMS network optimisation 5 15 35 35 and logistics efficiencies IFCO
Slide 7: Key financial outcomes
Business Update & FY11 Highlights Key financial outcomes For personal use only Sales revenue 13% US$4,672m Underlying profit 17% US$857m Operating profit 12% US$809m Earnings per share 3% 32.9 US cents (US cents) Dividends per share 4% 26.0 Australian cents (Australian cents) 11 Business Update & FY
Slide 8: CHEP Americas and EMEA results
Business Update & FY11 Highlights CHEP Americas: solid turnaround For personal use only • Sales revenue up 5% to US$1,617m • Growth in USA, Canada, Latin America • New contracts with small-to-medium enterprises up 34% to 1,387 • Better Everyday delivering for customers • Underlying profit up 17% to
Slide 9: CHEP Asia-Pacific and IFCO integration update
Business Update & FY11 Highlights CHEP Asia-Pacific: continued growth For personal use only • Sales revenue up 19% to US$464m • Continued pallets and auto penetration in emerging Asia – Sales revenue up 71% in China; 200% in India; 25% in South-East Asia • Modest pallet sales volume growth in Austra
Slide 10: IFCO: strong contribution
Business Update & FY11 Highlights IFCO: strong contribution For personal use only • Three-month sales revenue: US$230m1 • Pro forma2 FY11 sales revenue up 10% to US$838m – RPCs up 17% to US$503m – Pallet Management Services flat at US$335m • Pro forma2 FY11 Underlying profit up 22% to US$123m • Incr
Slide 11: Group results summary
For personal use only Results Analysis & Outlook Greg Hayes, CFO Results Analysis & Outlook Group results summary Actual FX Constant FX (US$m) FY11 FY11 FY10 Change (%) Sales revenue 4,672.2 4,532.7 4,146.8 9 EBITDA 1,337.0 1,290.1 1,177.4 10 Underlying profit 857.2 823.3 733.4 12 Significant items
Slide 12: Group sales revenue growth
Results Analysis & Outlook Group sales revenue growth For personal use only (US$m)1 233 4,533 110 31 4,147 12 FY10 Price/mix Organic Net new wins Acquired FY11 growth businesses 1 Constant FX basis. 21 CHEP Results
Slide 13: CHEP: results summary
Results Analysis & Outlook CHEP: results summary For personal use only Actual FX Constant FX (US$m) FY11 FY11 FY10 Change (%) Americas 1,617.2 1,590.9 1,533.6 4 EMEA 1,545.9 1,533.2 1,482.6 3 Asia-Pacific 463.7 414.4 390.9 6 Sales revenue 3,626.8 3,538.5 3,407.1 4 EBITDA 1,123.0 1,087.2 1,036.8 5 Un
Slide 14: EMEA and Asia Pacific operating profit reconciliation
Results Analysis & Outlook EMEA: operating profit reconciliation For personal use only (US$m)1 (22) 20 7 (3) 325 (18) 309 2 FY10 Vol, price, Quality Direct Other Significant FY11 mix costs items 1 Constant FX basis. 2 Quality spend excludes efficiencies. 25 Results Analysis & Outlook Asia Pacific: o
Slide 15: IFCO: pro forma results summary
For personal use only IFCO Results Results Analysis & Outlook IFCO: pro forma results summary 12 months pro forma1 3 months ended (US$m) Actual FX FY11 FY10 Change (%) 30 June 2011 RPC 140.4 503.3 429.3 17 Pallet Management 89.7 335.0 335.5 - Services Sales revenue 230.1 838.3 764.8 10 EBITDA 51.3 1
Slide 16: Recall: results summary
For personal use only Recall Results Results Analysis & Outlook Recall: results summary Actual FX Constant FX (US$m) FY11 FY11 FY10 Change (%) Americas 361.9 354.6 335.3 6 Europe 208.5 205.0 188.7 9 Rest of World 244.9 218.9 215.7 1 Sales revenue 815.3 778.5 739.7 5 EBITDA 196.6 184.7 172.5 7 Underl
Slide 17: Recall: operating profit reconciliation
Results Analysis & Outlook Recall: operating profit reconciliation For personal use only (US$m)1 24 (7) (6) 2 136 123 FY10 Vol, Direct Other Significant FY11 price, costs items mix 1 Constant FX basis. 31 Cash Flow & Financing
Slide 18: Reconciliation: EBITDA to cash flow
Results Analysis & Outlook Reconciliation: EBITDA to cash flow For personal use only (US$m) FY11 FY10 Change EBITDA 1,337.0 1,177.4 159.6 Capital expenditure (764.7) (496.5) (268.2) Proceeds from disposals 100.8 88.0 12.8 Working capital movement (14.8) 14.7 (29.5) IPEP expense 104.9 111.2 (6.3) Pro
Slide 19: Use of Recall proceeds
Results Analysis & Outlook Use of Recall proceeds For personal use only • Significant pooling investment opportunities – US$550m in growth capex identified for RPCs, Containers and emerging markets pallets over FY12 and FY131 – Expect to identify further opportunities • Suspension of Dividend Reinve
Slide 20: Guidance for FY12
Results Analysis & Outlook Guidance for FY12 For personal use only • Subject to unforeseen circumstances and economic uncertainty • Sales revenue growth in constant FX from all business units • Underlying profit1 range US$1,040m to US$1,100m – 30 June 2011 FX rates2 – Assumes full-year contribution
Slide 21: Forecast growth capex program
Strategy & Growth Global pooling solutions company For personal use only Customer and product matrix Three RPCs Pallets Containers product streams Auto IBCs ULDs CCCs crates Customer Consumer products and Fresh food Auto Air Refining groups general manufacturing Global expertise and solutions delive
Slide 22: Pallets – creating a global business
For personal use only Pallets Strategy & Growth Pallets – creating a global business • Anticipated US$200m1 of growth Global pallets efficiencies by FY151 (US$m) capex in emerging markets over FY12, FY13 Standardised automation 20 implementation • US$95m of cost savings to USA plant operations 15 de
Slide 23: Pallets – USA revenue opportunity
Strategy & Growth Pallets – USA revenue opportunity For personal use only (US$bn) 6.0 9.5 Includes half-size pallets All pallets: 9.5 and other opportunities All 48x40: 3.5 IFCO PMS revenue split between poolable and Poolable 48x40: 2.3 non-poolable space 0.2 1.0 3.5 CHEP: 1.1 0.2 0.9 2.3 0.1 1.1 CH
Slide 24: RPCs – Americas/Europe revenue opportunity
Strategy & Growth RPCs – Americas/Europe revenue opportunity For personal use only Europe: US$3.44bn USA: US$1.88bn South America: US$0.41bn 0.12 0.07 0.43 0.02 0.02 0.31 1.69 0.37 2.70 Existing Brambles business Other poolers Net addressable opportunity Source: Brambles estimates 45 Strategy & Grow
Slide 25: Containers – business expansion
For personal use only Containers Strategy & Growth Containers – business expansion • Three focus areas for growth capex – Continued investment in building US auto business – Expansion of US IBC business – Global expansion of aviation business • Anticipated US$120m1 growth capex over FY12 and FY13 •
Slide 26: Containers – automotive and aviation expansion
Strategy & Growth Containers – automotive expansion For personal use only • Solid performance in auto business Addressable North American auto opportunity, light passenger vehicles outside the USA – FY11 sales up 15% to US$147m 10% – Continued growth in emerging markets – Contract wins/extensions: G
Slide 27: Containers – IBC expansion
Strategy & Growth Containers – IBC expansion For personal use only Addressable IBC opportunity in USA • Non-US IBC business sales revenue currently US$59m • US-based CAPS acquired January 2011 2% 20% 34% – Pro forma1 FY11 sales revenue growth of US$10m, up 37% 4% Total: 2% US$4bn – Integration of pr
Slide 28: Emerging markets expansion
Strategy & Growth Emerging markets expansion For personal use only • Sales revenue up 26% to US$563m in FY11 – Latin America up 21% to US$279m – Middle East & Africa up 27% to US$169m – Emerging Asia up 43% to US$69m – Central & Eastern Europe up 28% to US$46m • Sales revenue growth forecast of abou
Slide 29: Summary
Strategy & Growth Summary For personal use only FY11 key outcomes • Sales and profit guidance delivered despite challenging economic conditions • Strong new business growth across key operations • IFCO and other acquisitions completed Key FY12 targets • Strong Underlying profit growth1 • Deliver syn
Slide 30: Disclaimer
Disclaimer For personal use only The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe s
Slide 31: Appendix 1: Glossary of terms and measures
For personal use only Appendices Appendices Appendix 1: Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Actual rates In the statutory financial statements, foreign currency results are translated into US dol
Slide 32: Appendix 1: Glossary of terms and measures (continued)
Appendices Appendix 1: Glossary of terms and measures (continued) For personal use only Except where noted, common terms and measures used in this document are based upon the following definitions: EPS Profit after tax, minority interests and Significant items, divided by shares in issue. Free cash
Slide 33: Effective tax rate and significant items
Appendices Appendix 3: Effective tax rate For personal use only FY11 FY10 (US$m) Actual rates Statutory Underlying Statutory Underlying Profit before tax 681.7 729.7 614.9 623.8 Tax expense 209.9 206.1 171.0 173.6 Effective tax rate 30.8% 28.2% 27.8% 27.8% 63 Appendices Appendix 4: Significant items
Slide 34: IFCO acquisition accounting and debt profile
Appendices Appendix 5: IFCO acquisition accounting For personal use only Actual rates (US$m) Consideration paid 1,029.4 Fair value of net assets acquired 39.5 Goodwill recognised 989.9 Amortisation expense: Brand (US$34.7m) over 5 years 6.9 Customer relationships (US$176.2m) over 10 years 17.6 Annua
Slide 35: FY11 capex breakdown and CHEP revenue by service line
Appendices Appendix 7: FY11 capital expenditure breakdown For personal use only (US$m) 16% Pallets 12% Containers 72% Other 57 822 82 765 52 688 97 591 FY11 cash Accrual FY11 Recall Land and Pooling Containers Pallets movement additions P&E 67 Appendices Appendix 8: CHEP FY11 sales revenue by servic
Slide 36: CHEP Americas sales revenue by service line and region
Appendices Appendix 9a: CHEP Americas FY11 sales revenue by service line For personal use only (US$m) 65 Growth1 vs FY10 Pallets 4% Other 11% 1,548 Pallets RPC Automotive Other 96% <1% <1% 4% 1 Growth calculated on constant FX basis. 69 Appendices Appendix 9b: CHEP Americas FY11 sales revenue by reg
Slide 37: CHEP USA plant operations and productivity trends
Appendices Appendix 9c: CHEP USA plant operations and transportation trends For personal use only Plant cost ratio1 Transportation cost ratio (Plant costs/sales) (Transportation costs/sales) 45% 33% 40% 35% 28% 30% 23% 25% 20% 18% FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY02 FY03 FY04 FY05
Slide 38: CHEP USA quality costs and sales growth
Appendices Appendix 9e: CHEP USA quality costs For personal use only US$m Actual Forecast Ongoing Component FY10 FY11 FY12 (per year) Pre-Better Everyday 37 - - - Better Everyday 72 84 55 25 Total 109 84 55 25 73 Appendices Appendix 9f: FY11 sales growth in CHEP USA 34% increase compared with FY10 A
Slide 39: CHEP USA pallet rejections; EMEA revenue by service line
Appendices Appendix 9g: CHEP USA pallet rejections For personal use only 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 75 Appendices Appendix 10a: CHEP EMEA FY11 sales revenue by service line (US$m) 22 115 91 Growth1 vs FY10 Pallets 4% RPC (18)% 1,318 Automoti
Slide 40: CHEP EMEA revenue by region; Europe cost trends
Appendices Appendix 10b: CHEP EMEA FY11 sales revenue by region For personal use only (US$m) 12 46 169 416 Growth1 vs FY10 Western Europe 7% 198 UK & Ireland 2% Iberia (5)% 314 391 France (6)% MEA 17% CEE 27% Western Europe UK & Ireland Iberia France MEA CEE Unitpool 27% 25% 20% 13% 11% 3% <1% 1 Gro
Slide 41: CHEP Europe productivity; Asia-Pacific revenue by service line
Appendices Appendix 10d: CHEP Europe productivity trends For personal use only Control ratio New equipment issue ratio (Returns + recoveries/total issues) (Pallets purchased/total issues) 100% 10% 98% 8% 96% 6% 94% 4% 92% 2% 90% 0% FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY02 FY03 FY04 FY0
Slide 42: CHEP Asia-Pacific revenue by region; Recall by service line
Appendices Appendix 11b: CHEP Asia-Pacific FY11 sales revenue by region For personal use only (US$m) 10 5 1 23 45 Growth1 vs FY10 Australia 2% New Zealand 5% 380 China 65% SE Asia 14% India 188% Australia New Zealand China SE Asia India JMI 82% 10% 5% 2% 1% <1% 1 Growth calculated on constant FX bas
Slide 43: Paper prices – North America
Appendices Appendix 12b: Paper prices – North America For personal use only US$m actual rates 290 250 210 Price per ton 170 130 90 50 Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 83