Slide 1: Half-Year 2023 Results Presentation: Step into the future
Half-Year 2023 Results Step into presentation the future 24 February 2023
Slide 2: Results highlights
Results highlights GRAHAM CHIPCHASE, CEO
Slide 3: 1H23 result financial summary
3 1H23 result Financial highlights financial • Sales revenue +14% driven by price realisation to recover both operating and capital cost-to-serve increases; volumes down (1)% on the prior summary corresponding period • Underlying Profit +25% including a combined ~9pt benefit from deferred plant and
Slide 4: Operating environment
4 Operating environment Challenging operating conditions in 1H23 with expectations of improving supply chain dynamics and moderating pallet pricing in 2H23 \ 1H23 OPERATING ENVIRONMENT 2H23 EXPECTATIONS • Inflationary cost pressures, scarcity of raw materials and • Lumber prices expected to moderate
Slide 5: Impacts of anticipated progressive destocking
5 Impacts of anticipated ‘progressive’ destocking Well positioned to manage through destocking anticipated to occur in 2H23 Dynamics of a ‘progressive’ destock 1 • Increased pallet returns enabling the business to service pent-up demand including pursuit of net new business Volumes • Like-for-like v
Slide 6: Shaping Our Future transformation
6 Shaping Accelerated commercial & asset productivity initiatives mitigate inflationary Our Future pressures & market-related asset efficiency headwinds • Improvements to commercial frameworks with greater cost to serve alignment transformation • Asset efficiency enhancements including improved reco
Slide 7: Shaping Our Future scorecard
7 Shaping Our Future scorecard Asset Efficiency & Sustainability & ESG Digital Transformation Customer Business Excellence Network Productivity Outcomes Transform information and digital Deliver unrivalled value and Improve productivity and Reinvent the organisation, Pioneer regenerative supply insi
Slide 8: Digital transformation: Serialisation+
8 Digital transformation Smart asset and customer experience trials progressing with future investments conditional on demonstrating value and scalability FY22 achievements 1H23 progress FY23 priorities • 20+ markets with foundations of • Now deployed in 25+ countries • Scale to 30+ markets diagnost
Slide 9: 1H23 Sustainability & ESG highlights
9 1H23 Sustainability & ESG highlights ESG ASSESSMENTS Increased recognition of leadership position in sustainability 3rd most sustainable company of ~7,000 analysed Further progress towards 2025 Sustainability Targets including: • Brambles Injury Frequency Rate of 3.8 (FY22: 4.1) AAA rating, top 8%
Slide 10: FY23 Outlook
10 FY23 Outlook Upgraded sales and earnings guidance Brambles has upgraded its FY23 sales and earnings guidance, which reflects better-than-expected price realisation, driven by both commercial actions and customer mix, combined with improvements to both our pipeline of productivity initiatives and
Slide 11: Financial overview
2 Financial overview NESSA O’SULLIVAN, CFO
Slide 12: 1H23 results summary
12 1H23 results Summary US$m 1H23 Change vs. 1H22 • Sales revenue +14% reflecting pricing to recover cost-to-serve increases. Volumes decreased (1)% with Continuing operations Actual FX Constant FX lower like-for-like volumes offsetting modest net new Sales revenue 2,931.5 7% 14% business growth Oth
Slide 13: 1H23 Group sales revenue growth
13 1H23 Group sales revenue growth Growth driven by pricing in all regions to align with operating and capital cost-to-serve increases, volume growth impacted by pallet availability constraints and softening demand Growth across all segments Growth weighted to price realisation 1H23 Sales revenue gr
Slide 14: Group profit analysis (US$m)
14 Group profit analysis (US$m) Profit growth +25% includes ~9pt benefit from deferred costs and insurance proceeds. Pricing, surcharges and other transformation benefits more than offset inflation and other cost increases North American surcharge Fuel and transport inflation income to recover lumbe
Slide 15: Lumber market dynamics & Brambles' pallet price evolution
15 Lumber market dynamics & Brambles’ pallet price evolution Full year weighted average pallet price expected to remain above prior year, despite moderation in 1H, due to regional mix of pallet purchases and lumber sourcing Lumber market dynamics in 1H23 Indicative Brambles pallet price evolution1 B
Slide 16: Asset efficiency
16 Asset efficiency Pooling capex to sales down 2pts as strong revenue growth and pallet remanufacturing and recovery benefits more than offset lumber inflation in the period Pooling capex to sales ratio 1H23 pooling capex of US$819m (accruals basis) increased US$56m at constant currency compared to
Slide 17: CHEP Americas
17 CHEP Americas Margin and ROCI improvements despite input-cost inflation and higher losses 1H23 Change vs. 1H22 1H23 performance Actual Constant • Pallets revenue +15% driven by pricing to recover cost-to-serve (US$m) FX FX increases across the region and volume growth in Latin America partly offs
Slide 18: US pallets revenue
18 US pallets revenue Pricing growth offset volume decline due to softening demand & pallet availability constraints US pallets revenue growth breakdown 1H23 revenue growth components: • Price/mix growth of 19% driven by rollover benefits +13% from pricing actions taken in the prior year and additio
Slide 19: CHEP EMEA
19 CHEP EMEA Operating leverage and margin uplift; ROCI impacted by increase in Average Capital Invested 1H23 Change vs. 1H22 1H23 performance Actual Constant • Pallets revenue +14%: Price realisation across the region (US$m) FX FX including contribution from contractual indexation. Rollover contrib
Slide 20: EMEA sales growth
20 EMEA sales growth Pricing growth in line with cost-to-serve increases, volumes impacted by softening demand and pallet availability constraints CHEP EMEA revenue 1H23 revenue growth components: growth breakdown • Price/mix growth +12% largely reflecting +14% contractual price increases, including
Slide 21: CHEP Asia-Pacific
21 CHEP Asia-Pacific Strong revenue growth with one-off insurance proceeds and deferred repair costs due to lower pallet return rates contributing to margin and ROCI uplift 1H23 performance 1H23 Change vs. 1H22 • Pallets revenue +9%: Driven by a combination of price Actual Constant realisation, cust
Slide 22: Corporate Segment
22 Corporate Segment Net increase in corporate segment costs driven by labour-related cost increases reflecting both the inflationary environment and increased investments to support the transformation programme 1H23 Change vs. 1H22 1H23 performance Actual Constant • Shaping Our Future costs decreas
Slide 23: Cash flow
23 Cash flow Increased earnings offset by higher cash capex due to lumber inflation and the timing of pallet payments (US$m, actual FX) 1H23 1H22 Change • Operating cash flow decreased US$42.0m as higher earnings, asset compensations and one-off insurance EBITDA1 1,046.0 945.6 100.4 proceeds were of
Slide 24: Balance sheet
24 Balance sheet Significant financial flexibility with over US$1b of undrawn committed facilities and US$0.2b of cash balances. New “green bond” shelf programme provides additional avenues for funding Dec 22 Jun 22 • Net debt increase of US$183m reflects funding of US$(147)m for Free Cash Flow afte
Slide 25: FY23 outlook considerations
25 FY23 outlook considerations • FY23 sales revenue guidance growth of between 12-14% at constant currency − Sales revenue growth driven by pricing in all regions to recover cost-to-serve increases. 2H23 price realisation driven by a combination of rollover contributions from 1H23 pricing actions, o
Slide 26: Summary
26 Summary Strong first-half performance supports FY23 guidance upgrade Supporting customers to navigate supply chain challenges Strong revenue growth and earnings momentum with operating leverage FY23 guidance upgrade : Revenue growth of between 12-14%; Underlying Profit growth of between 15-18% at
Slide 27: Half-Year 2023 Results Presentation: Step into the future
Half-Year 2023 Results Step into presentation the future 24 February 2023
Slide 28: Appendix
3) Appendix \S Brambles
Slide 29: Appendix 1: Asset efficiency
9 Appendix 1: Asset efficiency 1H23 progress: Improvements to asset productivity, including new framework and collection processes with key retailers, delivered US$120 million capex benefit1 Improve pallet collections | 1H23 recoveries Improve visibility of our assets • Small trucks deployed across
Slide 30: Sales revenue by region and sector
30 Appendix 2 Brambles: Sales revenue by region and sector 1H23 sales revenue by region 1H23 sales revenue by sector1 India, Middle East, Eastern Türkiye, Africa Europe Asia 0.5% Other Auto 3.3% 4.6% 3.8% Packaging 11.2% 2.8% Latin General America retail 8.6% 2.2% Storage ANZ USA & & Dist. 8.1% Cana
Slide 31: Major currency exchange rates
31 Appendix 3 Major currency exchange rates1 USD EUR AUD GBP CAD MXN ZAR PLN BRL 1H23 1.0000 1.0177 0.6768 1.1838 0.7534 0.0505 0.0585 0.2155 0.1915 Average 1H22 1.0000 1.1602 0.7318 1.3669 0.7948 0.0490 0.0659 0.2519 0.1853 31 Dec 22 1.0000 1.0672 0.6779 1.2064 0.7380 0.0515 0.0591 0.2282 0.1893 As
Slide 32: 1H23 currency mix
32 Appendix 4 1H23 currency mix (US$m) Total USD EUR AUD GBP CAD MXN ZAR PLN BRL Other1 Sales revenue 2,950.0 1,208.8 589.1 209.3 188.2 190.4 168.1 91.4 55.5 39.7 209.5 1H23 share 100% 41% 20% 7% 6% 6% 6% 3% 2% 1% 8% 1H22 share 100% 39% 22% 7% 7% 6% 5% 4% 2% 1% 7% Net debt2 2,900 1,254 1,617 (102) (
Slide 33: Credit facilities and debt profile
33 Appendix 5 Credit facilities and debt profile Committed Uncommitted Maturity Type1 Debt drawn Headroom facilities facilities (US$b at 31 Dec 2022) <12 months Bank 0.1 0.2 - 0.3 1 to 2 years Bank/EMTN2 0.6 - 0.6 - 2 to 3 years Bank/144A3 0.8 - 0.5 0.3 3 to 4 years Bank - - - - 4 to 5 years Bank/EM
Slide 34: Net plant and transport costs/sales revenue
34 Appendix 6 Net plant and transport costs/sales revenue Net plant cost/sales revenue Net transport cost/sales revenue (before NA lumber surcharge1) (Net of transport & fuel surcharges) 1H23 1H22 1H23 1H22 CHEP Americas 37.9% 37.3% 19.5%2 23.6% CHEP EMEA 23.8% 25.0% 22.2% 21.8% CHEP Asia-Pacific 29
Slide 35: CHEP Americas: Underlying Profit analysis
35 Appendix 7a CHEP Americas: Underlying Profit analysis (US$m) 38 (110) (42) (18) (20) 252 (41) (4) 290 286 231 1H22 Volume, Nth America Plant costs Transport Depreciation IPEP Other 1H23 FX 1H23 Underlying price, mix1 surcharge costs Underlying Underlying 2 Profit income Profit Profit (constant fx
Slide 36: CHEP EMEA: Underlying Profit analysis
36 Appendix 7b CHEP EMEA: Underlying Profit analysis (US$m) (15) (20) (30) (1) 139 (33) (43) 289 249 246 1H22 Volume, price, Depreciation Plant costs Transport IPEP Other 1H23 FX 1H23 Underlying mix 1 costs Underlying Underlying Profit Profit Profit (constant fx) 1 Sales growth net of volume-related
Slide 37: CHEP Asia-Pacific: Underlying Profit analysis
37 Appendix 7c CHEP Asia-Pacific: Underlying Profit analysis (US$m) (3) (0) 4 (10) 8 (9) 25 102 93 78 1H22 Volume, Depreciation Net Net Other AU Flood 1H23 FX 1H23 Underlying price, plant transport costs Proceeds Underlying Underlying Profit mix1 costs Profit Profit (constant fx) 1 Sales growth net
Slide 38: Capital expenditure on Property, Plant and Equipment
38 Appendix 8a Capital expenditure on Property, Plant and Equipment (Accruals basis, US$m) Methodology • ‘Replacement’ capex is calculated as the sum 1,811 of equipment purchases resulting from asset losses and asset scraps in the period 306 • ‘Growth and other’ includes capex relating to volume gro
Slide 39: Regional asset efficiency (pooling capex to sales ratio)
39 Appendix 8b Regional asset efficiency (pooling capex to sales ratio) North America Latin America EMEA 28.6% 27.9% 32.7% 33.3% 33.3% 49.1% 23.1% 23.0% 39.7% 40.0% 16.4% 17.6% 16.9% 26.7% 27.0% FY20 FY21 FY22 1H22 1H23 FY20 FY21 FY22 1H22 1H23 FY20 FY21 FY22 1H22 1H23 • FY21 increase largely due to
Slide 40: Glossary of terms and measures
40 Appendix 9 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Actual currency/Actual FX Results translated into US dollars at the applicable actual monthly exchange rates ruling in each period Average Capita
Slide 41: Glossary of terms and measures
41 Appendix 9 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Like-for-like revenue Sales revenue in the reporting period relating to volume performance of the same products with the same customers as the pr
Slide 42: Disclaimer
42 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. T
Slide 43: Investor & media contacts
43 Investor & Investors: media contacts Raluca Chiriacescu Vice President, Investor Relations +44 7810 658044 raluca.chiriacescu@brambles.com Suk Hee Lee Director, Investor Relations +61 433 343 888 sukhee.lee@brambles.com Media: Sandra Tang Senior Manager, Media & Communications +61 404 066 107 san