Slide 1: Brambles – Presentation to Analysts (ASX cover letter)
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 2 August 2007 For personal use only The Manager - Listings Australian Stock Exchange Limited Exchange Centre 20 Bridg
Slide 2: Accelerating Growth: Building on Strong Foundations
For personal use only Accelerating Growth: Building on Strong Foundations Mike Ihlein Chief Executive Officer 2 August 2007
Slide 3: Today's Discussion
Today’s Discussion For personal use only My first chance to speak to you as CEO How I see the future for Brambles – particularly opportunities for growth What Brambles is today and the way in which we have delivered exceptional performance A look at our plans for the future and the optimism
Slide 4: Brambles Today
Brambles Today For personal use only The global leader in pallet and container pooling A global leader in document and information management Excellence in supply chain and information management solutions, with a commitment to: customers markets people Enabling us to deliver excellent retur
Slide 5: Brambles Has Built Strong Foundations
Brambles Has Built Strong Foundations For personal use only Global leadership in supply chain and information management solutions Operations in 45 countries A substantial and expanding customer base People with proven expertise and an ongoing focus on talent management A strong balance sh
Slide 6: Delivering Excellent Performance: Cash Flow / Margins / ROCI
Delivering Excellent Performance … For personal use only Cash Flow / Margins / ROCI Continuing Operations 25% 800 700 20% 600 15% 500 US$M 400 10% 300 200 5% 192 512 704 738 100 0% 0 FY03 FY04 FY05 FY06 Cash Flow from Operations Operating Profit Margin % ROCI % • FY03 and FY04 are reported under UKG
Slide 7: Delivering Excellent Performance: Earnings Per Share
Delivering Excellent Performance … For personal use only Earnings Per Share Continuing Operations 30 25 EPS (US cents) 20 15 10 5 0 FY03 FY04 FY05 FY06 • FY03 and FY04 are reported under UKGAAP. FY05 and FY06 are reported under AIFRS. All figures are in US$M using actual exchange rates 6
Slide 8: Delivering Excellent Performance: Brambles Value Added
Delivering Excellent Performance … For personal use only Brambles Value Added (BVA) Continuing Operations 400 300 US$M 200 100 0 FY03 FY04 FY05 FY06 • Continuing operations excludes unallocated corporate costs • FY03 and FY04 are reported under UKGAAP based on UK£ converted into US$ at the FY03 aver
Slide 9: Including Brambles' Management Of CHEP
…Including Brambles’ Management Of CHEP For personal use only CHEP Americas - Cash Flow / Margins / ROCI 25% 300 250 20% 200 CHEP USA in particular has 15% US$M 150 10% 5% 100 been a key driver of Brambles’ 50 0% 0 performance FY03 FY04 FY05 FY06 Cash Flow from Operations Operating Profit Margin %
Slide 10: An Excellent Position To Accelerate Growth
An Excellent Position To Accelerate Growth For personal use only Recognise the importance of delivering sustainable, double digit revenue growth over the medium to long term We have identified opportunities to accelerate profitable growth We know what we need to do to seize these opportunities
Slide 11: Opportunities To Accelerate Growth
Opportunities To Accelerate Growth For personal use only Organic Existing geographies – existing segments/customers Organic “Plus” Existing geographies – new segments Core Expansion New geographies – existing or new segments New Business Acquisition of related superior Expansion supply chain
Slide 12: By Doing This We Will …
By Doing This We Will … For personal use only Continue to improve customer satisfaction Enhance competitiveness Deliver operating efficiencies and economies Enabling us to…. Accelerate growth in CHEP, especially in Europe Improve performance of Recall Accelerate sustainable, profitable g
Slide 13: Accelerating Growth In CHEP
For personal use only Accelerating Growth In CHEP 12
Slide 14: Accelerated Growth In CHEP Requires …
Accelerated Growth In CHEP Requires … For personal use only Continuous improvement in customer satisfaction Maximisation of new volume opportunities Ongoing review and optimisation of “cost-to-serve” model Six Sigma and Lean to drive productivity and cost reductions to capture new segment op
Slide 15: Benefits Of CHEP's Pooling Proposition For Emitters and Distributors
Benefits Of CHEP’s Pooling Proposition For Emitters and Distributors For personal use only Consistent, high quality pallet Faster loading and unloading Lower supply chain costs Lower disposal costs for Ds Reduced product damage Total pallet management Lower transport costs for Es Env
Slide 16: CHEP Growth Opportunities – USA
CHEP Growth Opportunities – USA For personal use only TOTAL USA PALLET MARKET – US$10 BILLION (EST.) 42x42 $0.7bn 36x36 $0.7bn CHEP 48x40 $1bn 48x40 Total Other size $3.5bn "white wood" pallets $5.1bn Other 48x40 $2.5bn Established USA pallet companies • CHEP (pooled) • PECO (pooled) • Industry is
Slide 17: CHEP Organic Opportunities – USA
CHEP Organic Opportunities – USA For personal use only Opportunity1 ORGANIC CHEP only 40% of FMCG segment in USA US$2bn2 ORGANIC “PLUS” Beverages US$0.6bn alcoholic and non-alcoholic Food Service US$0.3bn broadline distributors; system speciality distributors Other Segments US$0.4bn ho
Slide 18: CHEP Organic "Plus" Opportunities - USA
CHEP Organic “Plus” Opportunities - USA For personal use only 300 MILLION MOVEMENTS – US$1.3 BILLION (EST.) 100% 80% 60% 40% 20% 0% Beverages Home Improvement Food Service Office Supplies CHEP Potential Opportunity 17
Slide 19: CHEP Growth Opportunities – Europe
CHEP Growth Opportunities – Europe For personal use only TOTAL EUROPE GROCERY OPPORTUNITY - US$3 BILLION (EST.) B1208A AND B1210A PALLETS Largest opportunities • Germany • CEE • France CHEP • Benelux 30% • Italy 700M pallet • Iberia movements Other Opportunities • Display pallets • Other pallet
Slide 20: CHEP Core Expansion Opportunities – Germany
CHEP Core Expansion Opportunities – Germany For personal use only Opportunity1 Existing co-operative exchange pool (EPAL) is a US$0.5bn c.130M pallet movement opportunity (excluding display pallets) EPAL has 85% of FMCG pallet movements CHEP has single digit % penetration in B1208A segment W
Slide 21: CHEP Core Expansion Opportunities – CEE
CHEP Core Expansion Opportunities – CEE For personal use only Opportunity1 Central and Eastern Europe US$0.5bn Poland Hungary Czech Republic Slovakia 130M movements CHEP has only 2-3% penetration White wood is the alternative 1. Total opportunity, including CHEP’s current volume. The
Slide 22: CHEP Other Organic / Organic "Plus" Opportunities – Europe
CHEP Other Organic / Organic “Plus” Opportunities – Europe For personal use only ORGANIC Automotive containers – especially CEE One billion movements (not all addressable) CHEP has only 3-4% penetration Beverages – selected countries ORGANIC “PLUS” Aldi / Lidl conversion outside Germany
Slide 23: CHEP Other Growth Opportunities
CHEP Other Growth Opportunities For personal use only ORGANIC Latin America – currently low penetration Australia, New Zealand, Malaysia, Thailand, Hong Kong South Africa – increase penetration in packaging, beverages, containers CORE EXPANSION China 5 customers (including parts of Coca-Co
Slide 24: M&A Opportunities
M&A Opportunities For personal use only Primary focus on organic growth but ready to seize M&A opportunities where appropriate Significant leverage with CHEP add expertise to CHEP build on the existing CHEP capability use CHEP’s expertise to achieve operating leverage Devote resources (i
Slide 25: Opportunities For Recall
For personal use only Opportunities For Recall 24
Slide 26: Opportunities for Recall
Opportunities for Recall For personal use only Improve the current business under new management team Improve capability (customer focus, systems, people) Robust set of KPIs and systems capability Develop “CARTONS Model” (similar to CHEP ABC metrics) to drive performance Concentrate new in
Slide 27: Opportunities for Recall: Organic Growth
Opportunities for Recall For personal use only Organic Growth North America, Europe, Rest of World Regulation in USA Sarbanes-Oxley, Fair and Accurate Credit Transactions Act, Health Insurance Portability and Accountability Act Identity and intellectual property theft Increasing requirem
Slide 28: Opportunities for Recall - Unvended
Opportunities for Recall - Unvended For personal use only Total Opportunity US$12 billion (est.) US$0.2bn US$0.6bn North America US$1.9bn US$3.4bn US$4.1bn US$0.2bn US$8.0bn Recall Europe US$0.9bn Vended Unvended US$2.9bn Recall currently only 5% of total opportunity 27
Slide 29: Organising For Accelerated Growth
For personal use only Organising For Accelerated Growth
Slide 30: Organising For Accelerated Growth – Brambles HQ
Organising For Accelerated Growth – Brambles HQ For personal use only Brambles Global Headquarters will provide an active leadership role: Strategy and analysis Allocation of resources Customer interaction Information systems Talent management and development Succession planning Sust
Slide 31: Organising For Accelerated Growth – CHEP
Organising For Accelerated Growth – CHEP For personal use only CHEP operations will be managed as three Groups: CHEP Americas (USA, Canada, Latin America) CHEP EMEA (Europe, Middle East, Africa) CHEP Asia-Pacific (Australia, NZ, SE Asia, China) Each new Group managed by Group Presidents
Slide 32: Organising For Growth – Operational Structure
Organising For Growth – Operational Structure For personal use only CEOBrambles CEO Brambles CHEP CHEP CHEP CHEP CHEP CHEP Americas Americas EMEA EMEA Asia-Pacific Asia-Pacific Recall Recall Group Group Group Group Group Group USA North America Europe Australia/NZ Canada South America Middle East SE
Slide 33: Supporting Customer Success And Satisfaction
Supporting Customer Success And Satisfaction For personal use only Make it easier for customers to do business with us Reducing complexity Support and enhance initiatives to build better relationships: for mutual benefit (e.g. D-TPM, E-TPM) to better understand needs of customers Increas
Slide 34: By Implementing Our Plans, Brambles Will…
By Implementing Our Plans, Brambles Will… For personal use only Be competitively robust with enhanced operating efficiencies and economies Be a truly integrated, global enterprise with greater collaboration: faster and more focused strategic decision-making co-ordinated and consistent deploy
Slide 35: Our Commitment To Ongoing, Regular Communication
Our Commitment To Ongoing, Regular Communication For personal use only Annual Results: 22 August 2007 Operations Review (USA & UK): 24 – 29 October 2007 Annual General Meeting (Brisbane): 16 November 2007 Half Year Results: February 2008 Ongoing, regular communication to report on progress
Slide 36: Glossary Of Terms And Measures Appendix 1a
Glossary Of Terms And Measures Appendix 1a For personal use only Except where noted, common terms and measures used in this document are based upon the following definitions: Sales revenue Excludes revenues of associates and non trading revenue. Comparable Profit before finance costs, tax and specia
Slide 37: Glossary Of Terms And Measures Appendix 1b
Glossary Of Terms And Measures Appendix 1b For personal use only Except where noted, common terms and measures used in this document are based upon the following definitions: Constant Translation of both current period and comparable period results into US dollars at currency the actual monthly exch
Slide 38: Disclaimer statement
Disclaimer statement 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
Slide 39: Accelerating Growth: Building on Strong Foundations
For personal use only Accelerating Growth: Building on Strong Foundations Mike Ihlein Chief Executive Officer 2 August 2007