Slide 1: Half-Year Results
Half-Year Results 21 February 2013
Slide 2: Agenda
Agenda Results Highlights Tom Gorman, CEO Results Analysis Zlatko Todorcevski, CFO Context & Outlook Tom Gorman, CEO 2
Slide 3: Key messages
Results Highlights Key messages • On track for solid full-year result following strong first half – Strong result in Pallets segment driven by Americas region – Continued sales revenue growth in RPCs and Containers – Maintenance of improved cost structure enables increased Recall margins – Efficienc
Slide 4: Results Highlights
Results Highlights Tom Gorman CEO
Slide 5: Key financial outcomes
Results Highlights Key financial outcomes Continuing Operations Sales revenue US$2,890M 4% Operating Profit US$481M 14% Underlying Profit US$490M 7% Underlying Profit after tax US$311M 17% Underlying basic EPS US20.1¢ 12% Return on Capital Invested 15% 1pt Free Cash Flow US$177M US$272M Dividends pe
Slide 6: Ongoing new business momentum
Results Highlights Ongoing new business momentum Net new business wins Net annualised new (US$M) impact in the period business won in the period Pallets – Americas 42 68 Pallets – EMEA 29 31 Pallets - Asia-Pacific 2 - Total Pallets 73 99 RPCs 4 13 Containers 2 20 Total Pooling Solutions 79 132 Recal
Slide 7: Pallets – Americas: strong growth
Results Highlights Pallets – Americas: strong growth • Sales revenue up 9% to US$1,075M – Constant currency sales revenue up 10% • Strong contribution from win-backs in CHEP USA • Profitable growth in all businesses • Underlying Profit up 20% to US$190M • Delivery of efficiencies and cost synergies
Slide 8: Pallets – EMEA: improving performance
Results Highlights Pallets – EMEA: improving performance • Sales revenue down 1% to US$669M – Constant currency sales revenue up 5% • UK & Ireland and Mid Europe driving resilient Western Europe sales • Continued strength in Middle East & Africa, Central & Eastern Europe • Underlying Profit up 1% to
Slide 9: Pallets – Asia-Pacific: timing impacts
Results Highlights Pallets – Asia-Pacific: timing impacts • Sales revenue up 6% to US$198M – Constant currency sales revenue up 5% • Continued modest sales growth in Australia & New Zealand • Asian operations growing: South-East Asia and China profitable • Underlying Profit down 5% to US$34M • Plant
Slide 10: RPCs: strong profit improvement
Results Highlights RPCs: strong profit improvement • Sales revenue up 5% to US$406M – Constant currency sales revenue up 10% • North America roll-out driving sales growth • Underlying Profit up 26% to US$68M • Increased scale driving efficiencies • Disciplined deployment of capital to ensure improvi
Slide 11: Containers: investing for growth
Results Highlights Containers: investing for growth • Sales revenue up 2% to US$138M – Constant currency sales revenue up 6% • Strong sales growth in Aerospace Solutions, US IBC, US Auto – Conversion of opportunities slower than anticipated • Impact of challenging automotive and refining industry co
Slide 12: Recall: solid result, paper price impact
Results Highlights Recall: solid result, paper price impact • Sales revenue down 3% to US$404M – Constant currency sales revenue down 1% • Paper price reduction in destruction services • Softer customer activity levels in Europe and North America • Underlying Profit up 2% to US$72M • Improved cost s
Slide 13: Results Analysis
Results Analysis Zlatko Todorcevksi CFO
Slide 14: Results summary
Results Analysis Results summary Constant Continuing Operations Actual FX FX (US$M) 1H13 1H12 Change Change Sales revenue 2,889.7 2,783.0 4% 6% Underlying EBITDA 767.9 738.5 4% 7% Underlying Profit 490.0 456.3 7% 11% Operating Profit 481.4 422.9 14% 17% Profit after tax 303.3 241.8 25% 30% 14
Slide 15: Group sales revenue growth (US$M)
Results Analysis Group sales revenue growth (US$M) Constant currency 15
Slide 16: Pallets: results summary
Results Analysis Pallets: results summary Actual FX Constant FX (US$M) 1H13 1H12 Change Change Americas 1,074.7 983.8 9% 10% EMEA 669.4 672.8 (1)% 5% Asia-Pacific 198.4 187.0 6% 5% Sales revenue 1,942.5 1,843.6 5% 8% Operating Profit 360.2 321.7 12% 15% Significant Items 0.4 8.5 Underlying Profit 36
Slide 17: Pallets – Americas: Operating Profit (US$M)
Results Analysis Pallets – Americas: Operating Profit (US$M) Constant currency 17
Slide 18: Pallets – EMEA: Operating Profit (US$M)
Results Analysis Pallets – EMEA: Operating Profit (US$M) Constant currency 18
Slide 19: Pallets – Asia-Pacific: Operating Profit (US$M)
Results Analysis Pallets – Asia-Pacific: Operating Profit (US$M) 6 (5) (1) (2) 36 34 1H12 Volume/ Direct Business Other 1H13 price/mix costs development constant/ actual Constant currency 19
Slide 20: RPCs: results summary
Results Analysis RPCs: results summary Actual FX Constant FX (US$M) 1H13 1H12 Change Change Europe 259.0 252.2 3% 9% North America 80.6 70.1 15% 15% South America 10.4 12.6 (17)% (6)% ANZ & South Africa 55.9 51.8 8% 9% Sales revenue 405.9 386.7 5% 10% Operating Profit 68.3 49.0 39% 45% Significant I
Slide 21: RPCs: Operating Profit (US$M)
Results Analysis RPCs: Operating Profit (US$M) Constant currency 21
Slide 22: Containers: results summary
Results Analysis Containers: results summary Actual FX Constant FX (US$M) 1H13 1H12 Change Change Automotive 73.2 78.7 (7)% (2)% Aerospace Solutions 24.9 17.6 41% 45% Intermediate Bulk Containers 22.0 19.3 14% 17% Catalyst & Chemical Containers 17.6 19.6 (10)% (10)% Sales revenue 137.7 135.2 2% 6% O
Slide 23: Containers: Operating Profit (US$M)
Results Analysis Containers: Operating Profit (US$M) Constant currency 23
Slide 24: Recall: results summary
Results Analysis Recall: results summary Actual FX Constant FX (US$M) 1H13 1H12 Change Change Americas 174.2 181.9 (4)% (2)% Europe 97.8 109.1 (10)% (7)% Rest of World 131.6 126.5 4% 3% Sales revenue 403.6 417.5 (3)% (1)% Operating Profit 72.4 51.2 41% 43% Significant Items - 20.0 Underlying Profit
Slide 25: Recall: Operating Profit (US$M)
Results Analysis Recall: Operating Profit (US$M) Constant currency 25
Slide 26: Cash flow
Results Analysis Cash flow (US$M) 1H13 1H12 Change EBITDA 767.9 738.5 29.4 Capital expenditure (446.9) (516.2) 69.3 Proceeds from sale of PP&E 35.6 37.1 (1.5) Working capital movement (24.4) (104.7) 80.3 IPEP expense 54.3 55.2 (0.9) Provisions/other (29.0) (61.1) 32.1 Cash flow from Continuing Opera
Slide 27: Capital expenditure trend by segment
Results Analysis Capital expenditure trend by segment (US$M) actual FX, capex on PP&E, accruals basis 479 471 19 442 22 24 160 80 130 62 60 55 245 276 259 1H12 2H12 1H13 2H13 Forecast Pallets Other pooling Growth programs Recall Note: Growth programs defined as growth investments in Pallets emerging
Slide 28: Strong balance sheet
Results Analysis Strong balance sheet December 2012 June 2012 Net debt (US$M) 2,677 2,690 Net debt to net debt plus equity (%) 46.8 49.5 1H13 1H12 Covenants EBITDA/net finance costs (x) 14.0 8.8 3.5 (min) Net debt/EBITDA (x) 1.7 2.2 3.5 (max) 28
Slide 29: Context & Outlook
Context & Outlook Tom Gorman, CEO
Slide 30: Results and strategy scorecard
Context & Outlook Results and strategy scorecard FY13 target (constant currency) Progress Pooling Solutions growth on track; Sales revenue growth in all segments - Recall impacted by paper price Pallets: emerging markets sales revenue up 15%-plus 19% growth delivered for 1H13; on track for full ye
Slide 31: Intensive focus on execution
Context & Outlook Intensive focus on execution Review & Insights Strategy Launch Implementation Delivery Diversification Global Pooling Organise Develop & Cost Leadership to deliver: interrogate Solutions key strategic fact base strategy Go To Market themes People & Leadership FY10 FY11 FY12 FY13 31
Slide 32: Pallets outlook
Context & Outlook Pallets outlook • New business growth to continue to drive sales revenue – Continued expectation for sales growth in all regions – On track for 15% constant-currency growth in emerging markets • Expectation for continued efficiency gains – Margin improvements in all regions in 2H13
Slide 33: RPCs outlook
Context & Outlook RPCs outlook • Constant-currency sales revenue growth of 10-15% to be delivered in FY13 • Continued strong sales growth expected in subsequent years • Expansion from increased US penetration, rollout of product range • Scale efficiencies to drive improved profitability and return o
Slide 34: Driving growth through Pallecon
Context & Outlook Driving growth through Pallecon • Pallecon key facts – Operating for 37 years – Leading provider of IBC rentals and services – Main operations in ANZ, Western Europe – FY12 sales revenue of US$70M • Acquisition enables growth and scale – Principle driver of FY13 Containers growth –
Slide 35: Containers outlook
Context & Outlook Containers outlook • IBCs expansion plus growth in newer businesses – Aerospace Solutions: pooling and maintenance services – Expansion of US and emerging markets automotive operations – Executive appointed to lead pursuit of intercontinental opportunities • Short-term challenges e
Slide 36: Recall outlook
Context & Outlook Recall outlook • Focus on stabilisation of operations continues • Cost reductions delivering sustainable improvement • Paper price weakness – Short-term sales growth challenge – Some impact on FY13 margins 36
Slide 37: Outlook summary
Context & Outlook Outlook summary • Subject to unforeseen circumstances and at 30 June 2012 exchange rates 1 • Continued constant currency sales revenue growth in all Pooling Solutions segments • On track to deliver FY13 Underlying Profit within tightened guidance range of US$1,030M to US$1,060M • N
Slide 38: Key messages
Results Highlights Key messages • On track for full-year result following strong first half – Strong result in Pallets segment driven by Americas region – Continued sales revenue growth in RPCs and Containers – Maintenance of improved cost structure enables increased Recall margins – Efficiency focu
Slide 39: Q&A
Brambles Q&A
Slide 40: Brambles
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Slide 41: Appendices
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Slide 42: Appendix 1: Glossary of terms and measures
Appendices Appendix 1: Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Actual rates In the statutory financial statements, Brambles translates foreign currency results into US dollars at the applicable actua
Slide 43: Appendix 1: Glossary of terms and measures (continued)
Appendices Appendix 1: Glossary of terms and measures (continued) Except where noted, common terms and measures used in this document are based upon the following definitions: Operating Profit Operating Profit is profit before finance costs and tax, as shown in the statutory financial statements. Or
Slide 44: Appendix 2: 1H13 currency mix
Appendices Appendix 2: 1H13 currency mix (US$M, actual FX) Total USD EUR GBP AUD Other Pallets 1,942.5 813.3 376.0 177.8 155.8 419.6 RPCs 405.9 80.6 190.6 27.6 39.0 68.1 Containers 137.7 23.9 48.0 10.7 19.8 35.3 Recall 403.6 117.7 53.1 21.4 102.1 109.3 Total sales revenue 2,889.7 1,035.5 667.7 237.5
Slide 45: Appendix 3: Major currency exchange rates
Appendices Appendix 3: Major currency exchange rates USD vs. USD EUR AUD GBP CAD ZAR 1H13 1.0000 1.2785 1.0397 1.5981 1.0058 0.1177 Average 1H12 1.0000 1.3693 1.0288 1.5865 0.9944 0.1310 31 December 12 1.0000 1.3193 1.0371 1.6174 1.0052 0.1179 As at 30 June 12 1.0000 1.2440 1.0032 1.5515 0.9673 0.11
Slide 46: Appendix 4: Effective tax rate
Appendices Appendix 4: Effective tax rate Continuing Operations 1H13 1H12 (US$M) actual FX Statutory Underlying Statutory Underlying Profit before tax 426.7 435.3 339.1 372.5 Tax expense 123.4 124.7 97.3 106.5 Effective tax rate 28.9% 28.6% 28.7% 28.6% 46
Slide 47: Appendix 5: Significant Items
Appendices Appendix 5: Significant Items (US$M) actual FX 1H13 1H12 Underlying Profit 490.0 456.3 Significant Items: Acquisition-related costs (4.5) (1.4) Restructuring & IFCO integration costs (4.1) (22.0) Recall transaction costs - (5.9) Pension costs - (5.8) Foreign exchange gain on capital repat
Slide 48: Appendix 6: Credit facilities and debt profile
Appendices Appendix 6: Credit facilities and debt profile US$B at 31 December 2012 Committed Uncommitted Maturity Type Debt drawn Headroom facilities facilities < 12 months Bank/Other 0.2 0.2 0.1 0.3 1 – 2 years Bank/USPP1/Other 0.8 - 0.4 0.4 2 – 3 years Bank/144A2/Other 0.8 - 0.3 0.5 3 – 4 years Ba
Slide 49: Appendix 7: Efficiencies and synergies
Appendices Appendix 7: Efficiencies and synergies (US$M) Actual Forecast Incremental year-on-year improvement FY15 Initiatives FY12 1H13 FY13 FY14 FY15 total IFCO RPC and PMS Integration 10 6 10 20 - 40 Operations & Logistics efficiencies 10 7 10 20 20 60 in Pallets segment Total 20 13 20 40 20 100
Slide 50: Appendix 8: Capital expenditure breakdown by nature
Appendices Appendix 8: Capital expenditure breakdown by nature (accruals basis) 1H12 1H13 Total US$480M Total US$471M Note: Property, plant and equipment cash capex in 1H13 was US$447M compared with US$516M in 1H12 50
Slide 51: Appendix 9: Pooling Solutions 1H13 sales revenue by segment
Appendices Appendix 9: Pooling Solutions 1H13 sales revenue by segment (US$M) 138 406 Constant FX growth vs. 1H12 Pallets – Americas 10% Americas, 1,075 Pallets – EMEA 5% Asia-Pacific, 198 Pallets - Asia-Pacific 5% RPCs 10% Containers 6% EMEA, 669 51
Slide 52: Appendix 10: Pallets 1H13 sales revenue by Customer Business Unit
Appendices Appendix 10: Pallets 1H13 sales revenue by Customer Business Unit (US$M) Constant FX growth vs. 1H12 USA 7% 24 Canada 15% 174 Latin America 14% 38 70 LeanLogistics 19% Other Western Pallet Management Services 12% Europe, 177 610 Western Europe 2% UK & Ireland 4% Iberia (3)% France, 79 Fra
Slide 53: Appendix 11: CHEP USA pallet rejections
Appendices Appendix 11: CHEP USA pallet rejections 53
Slide 54: Appendix 12a: CHEP USA pallet plant operations and transportation trends
Appendices Appendix 12a: CHEP USA pallet plant operations and transportation trends Plant cost ratio Transportation cost ratio (Plant costs/sales) (Transportation costs/sales) 54
Slide 55: Appendix 12b: CHEP USA pallet productivity trends
Appendices Appendix 12b: CHEP USA pallet productivity trends Control ratio New equipment issue ratio (Returns + recoveries/total issues) (Pallets purchased/total issues) 55
Slide 56: Appendix 13a: CHEP Europe pallet plant operations and transportation trends
Appendices Appendix 13a: CHEP Europe pallet plant operations and transportation trends Plant cost ratio Transportation cost ratio (Plant costs/sales) (Transportation costs/sales) 56
Slide 57: Appendix 13b: CHEP Europe pallet productivity trends
Appendices Appendix 13b: CHEP Europe pallet productivity trends Control ratio New equipment issue ratio (Returns + recoveries/total issues) (Pallets purchased/total issues) 57
Slide 58: Appendix 14: RPCs 1H13 sales revenue by region
Appendices Appendix 14: RPCs 1H13 sales revenue by region (US$M) 56 Constant FX growth vs. 1H12 10 Europe 9% North America 15% 81 South America (6)% 259 ANZ & South Africa 9% 58
Slide 59: Appendix 15: Containers 1H13 sales revenue by sector
Appendices Appendix 15: Containers 1H13 sales revenue by sector (US$M) 18 Constant FX growth vs. 1H12 Automotive (2)% 22 Aerospace 45% 73 IBCs 17% CCC (10)% 25 59
Slide 60: Appendix 16: Recall 1H13 sales revenue by sector
Appendices Appendix 16: Recall 1H13 sales revenue by sector (US$M) 42 Constant FX growth vs. 1H12 64 Document Management 2% Solutions Secure Destruction (14)% Services Data Protections 3% Services 298 60
Slide 61: Appendix 17: Paper prices – North America
Appendices Appendix 17: Paper prices – North America US$ 61
Slide 62: Disclaimer
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Slide 63: Investor Relations contacts
Investor Relations contacts Cathy Press Group Vice President, Capital Markets cathy.press@brambles.com +61 2 9256 5241 +61 419 290 745 James Hall Senior Director, Investor Relations & Corporate Affairs james.hall@brambles.com +61 2 9256 5262 +61 401 524 645 63