Brambles Limited · ASX:BXB
Brambles — Investor Day (September 2015)
80 slides from Brambles's investor day presentation, Sep 16, 2015
Slide 1: Investor Information Presentations 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 For personal use only 16 September 2015 The Manager - Listings Australian Securities Exchange Limited Exchange Centre
Slide 2: Investment Market Briefing: Safety briefing
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Safety briefing 2
Slide 3: Agenda: Tuesday and Wednesday morning
Agenda For personal use only Tuesday 15 September 1600-1700 Welcome and introductory presentation Tom Gorman, CEO Fountain Ballroom 1700-1900 Drinks and dinner Courtyard 3 Agenda Wednesday 16 September - morning 0730-0830 Networking breakfast Fountain Foyer/Terrace 0830-0930 Everything Begins with t
Slide 4: Agenda: Wednesday afternoon and evening
Agenda For personal use only Wednesday 16 September – afternoon and evening 1300-1345 Expanding IFCO’s global position Wolfgang Orgeldinger, Fountain Ballroom RPCs global strategy update Group President, IFCO 1345-1430 Building the IFCO network in North America Dan Walsh, President, Fountain Ballroo
Slide 5: Financial figures and Disclaimer
Financial figures For personal use only Throughout these presentations, unless otherwise stated: Currency is US dollars Growth rates are at Constant Currency, as defined in the Glossary (see Appendix 1) Compound annual growth rate (CAGR) is at 30 June 2015 foreign exchange rates All forward-looking
Slide 6: Welcome and Introduction
For personal use only Welcome and Introduction Tom Gorman CEO 10
Slide 7: Investment proposition unchanged
Investment proposition unchanged For personal use only We are driven by our focus on the customer …which drives superior rates of economic return (i.e. high Objectives quality of opportunity)… Annual percentage sales revenue Our customer value growth in the high single digits proposition enables a (
Slide 8: Quantity and quality drive value
Quantity and quality drive value For personal use only We are committed to creating shareholder wealth Quality 31% Shareholder Delivery of cost- Disciplined Shareholder wealth - future out efficiencies portfolio Return on Capital Invested 29% wealth - today management 27% Leveraging acquired 25% goo
Slide 9: Redirecting cost to add value
Redirecting cost to add value For personal use only Cost efficiencies are enabling reinvestment in the customer Delivery of Global Supply Chain Funding greater investment in efficiencies - Customer collaboration One Better – focus - Brand rejuvenation on reducing - Services and solutions portfolio i
Slide 10: Innovation: the Internet of Things; Guidance and outlook summary
Innovation: the Internet of Things For personal use only 500 million moving assets needn’t be dumb… Thinking From: To: differently - Track-and-trace pilots - Data-driven customer solutions - Technical feasibility - Commercial feasibility - What assumptions do we need to confirm to move forward? Proo
Slide 11: Agenda: Wednesday morning
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Agenda Wednesday 16 September - morning 0730-0830 Networking breakfast Fountain Foyer/Terrace 0830-0930 Everything Begins with the Customer John Thelan, Senior Vice President, Fountain Ballroom A conversatio
Slide 12: Everything Begins with the Customer
For personal use only Everything Begins with the Customer Chris Young Senior Vice President, Supply Chain, CHEP North America 22
Slide 13: John Thelan, Costco Wholesale
John Thelan For personal use only Senior Vice President, Depots & Traffic, Costco Wholesale Chief responsibilities Oversight of Costco’s cross-dock oriented distribution network (depots) 34 depots strategically located throughout North America Total 9.26M square feet 4,300 employees Oversight of all
Slide 14: CHEP's Unique Global Opportunity
For personal use only CHEP’s Unique Global Opportunity Peter Mackie Group President, CHEP Pallets 26
Slide 15: Pallets delivery scorecard – FY15
Pallets delivery scorecard – FY15 For personal use only Outstanding Europe performance offsets Americas challenges Result Change Sales revenue US$4,082M 5% Solid amid challenging economic backdrop Underlying Profit US$832M 6% Margin growth despite USA cost pressure Average Capital Invested US$3,918M
Slide 16: CHEP Pallets growth priorities
CHEP Pallets growth priorities For personal use only Strong focus on driving development of the core 1 2 3 Invest in Seize new ground Extend global customer in existing network retention markets 29 Investing in customer retention Improved customer satisfaction globally: FY13 to FY15 Legend NPS score
Slide 17: Investing in customer retention: NPS benchmarks
Investing in customer retention For personal use only Strong comparison with global NPS benchmarks CHEP vs. Satmetrix B2B benchmarks by country, FY15 Mean ~86% of 27 Percentage of CHEP markets surveyed 13.8% 27.6% 48.3% 10.3% surveyed are at countries or above the mean Below mean Mean Upper quartile
Slide 18: Investing in customer retention: simplifying experience
Investing in customer retention For personal use only Video: highlights of our initiatives 33 Investing in customer retention Simplifying the customer experience Pricing B2B Integration Developing flexible, customer-centric and Simplification Automating customer interactions across multiple touch po
Slide 19: Investing in customer retention: cost competitiveness
Investing in customer retention For personal use only Continuing to drive cost competitiveness Pallet performance and durability Plant automation Network optimization One Better indirect cost reductions Asset productivity 35 Investing in customer retention Building better supply chains tog
Slide 20: Seizing new ground in existing markets
Seizing new ground in existing markets For personal use only Growth of base, further expansion, controlled Recycled growth Contribution to sales revenue growth: Contribution to sales revenue growth: five years to FY15 five years to FY20 12% 35% 37% 38%1 43% 8% 26% 1% Pooled growth – developed Recycl
Slide 21: CHEP Pallets growth priorities: investments
CHEP Pallets growth priorities For personal use only Investments focused on driving both quantity and quality Impact: Customer Cost Strategic focus area Investment Growth/Retention satisfaction competitiveness Technology for the customer Pallet inventory Invest in customer retention Plant automation
Slide 22: This is the Supply Change
For personal use only This is the Supply Change Kim Rumph President, CHEP North America 42
Slide 23: Evolution of CHEP North America
Evolution of CHEP North America For personal use only Addressing challenges while building for the future PMS Pool Customer collaboration acquisition productivity Costco block IGPS win-backs Market pallet mandate begin differentiation Better Everyday Asset productivity program launched improvements
Slide 24: Emphasis on long-term value
Emphasis on long-term value For personal use only Improvement in profit despite cost headwinds Change in CHEP North America Underlying Profit margin 3.5pp (3.1)pp (3.3)pp 3.5pp 2.3pp (1.6)pp Recycled 17.1% business 18.4% Delivery of delivers high Reflects reduced loss efficiencies after ROCI but has
Slide 25: Managing the pool sustainably
Managing the pool sustainably For personal use only Continuous focus on customers’ long-term needs Customer complaints Better Everyday New pallet demand Quality Automation trends Repair costs Loss rates Recycler engagement Pallet replacement Asset Productivity Retailer collaboration Transpor
Slide 26: Key asset productivity trends
Key asset productivity trends For personal use only Significant progress in managing new pallet capex CHEP USA – contractual new pallet CHEP USA – IPEP/sales revenue commitments 5 4% 4 Zero 3% commitments in FY16 Pallets (M) 3 2% 2 1% 1 0 0% FY11 FY12 FY13 FY14 FY15 FY16F FY11 FY12 FY13 FY14 FY15 49
Slide 27: Key transport industry trends
Key transport industry trends For personal use only Mitigating challenging external factors Chainalytics Study to: Key conclusions Short-term outlook Validate approach CHEP is complex Cass Index projects Provide insights into Modest cost saving inflation 4% to 8% in our projections opportu
Slide 28: Differentiating our Market Position
For personal use only Differentiating our Market Position Becoming a customer solutions provider Shifting the conversation from the “pallet” to the “unit load” Differentiation Formalized our capabilities into segment-specific solutions Unique vs. traditional competitors Protect and win Engagin
Slide 29: A differentiated brand campaign
A differentiated brand campaign For personal use only Launched June 2015 and running strong 55 Our solutions portfolio Video: Consumer Goods value proposition 56
Slide 30: Adding value throughout the supply chain
Adding value throughout the supply chain For personal use only Solutions portfolio: customer case studies Transport collaboration Unit-load optimization “CHEP helped us save 865,000 empty Increase in product miles and reduce 2.7 million pounds of shipped per unit-load CO2” – Walmart Stores Inc., Sen
Slide 31: New business driving growth
New business driving growth For personal use only Market-share expansion has continued steadily CHEP North America sales revenue growth (constant currency in year) 8% 6% 4% 2% 0% FY11 FY12 FY13 FY14 FY15 -2% Like-for-like volumes Price Net new business Recycled Note: Impact of acquisitions (IFCO Pal
Slide 32: Segmentation of opportunity
Segmentation of opportunity For personal use only Targeted approach guiding our growth Protect (156 accounts) Strategic (46 accounts) 25% Global 58% Pooled sectors Total current Grocery Total current volume volume Hunting team 90% Beverage and dairy 66% Small and mid Pooled Produce and protein Poole
Slide 33: Expanding the Recycled network
Expanding the Recycled network For personal use only Riverside case study demonstrates scale of opportunity Approach Continue national network expansion through new markets and increased penetration in existing markets Area served today: Leverage existing infrastructure and low 10M pallets capital r
Slide 34: Agenda: Wednesday afternoon and evening
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Agenda Wednesday 16 September – afternoon and evening 1300-1345 Expanding IFCO’s global position Wolfgang Orgeldinger, Fountain Ballroom RPCs global strategy update Group President, IFCO 1345-1430 Building t
Slide 35: Expanding IFCO's Global Position
For personal use only Expanding IFCO’s Global Position Wolfgang Orgeldinger Group President, IFCO 68
Slide 36: RPCs delivery scorecard FY15
RPCs delivery scorecard FY15 For personal use only A successful year, in line with our strategy Result Change Sales revenue US$918M 12% Strong contribution from all regions Underlying Profit US$132M 15% Driven by European efficiencies Average Capital Invested US$1,541M 6% Strong efficiency relative
Slide 37: Drivers of IFCO growth since acquisition
Drivers of IFCO growth since acquisition For personal use only Compound annual volume growth of 11%, FY12-FY15 Share of volume growth by origin Share of volume growth by region (recollections) (recollections) Acquisitions, South New America, 0.2% verticals, 0.4% 1.1% Existing retailers, North 5.1% A
Slide 38: Geographic expansion: South America and Asia
Geographic expansion: South America For personal use only Rentapack acquisition creates step change in scale IFCO’s existing operations are well-established Key features1 and generate strong rates of growth and return Retail partners: >25 Growers: >950 on capital Employees: 434 Rentapack acquisi
Slide 39: Global trends in produce and packaging
Global trends in produce and packaging For personal use only Common themes emerging with customers around the world “Omni-channel” Click-and-collect and home delivery “Dark” stores - mini distribution centres Floor space and process efficiency critical Driving demand for standardized packagi
Slide 40: Global trends: merchandising and sourcing
Global trends in produce and packaging For personal use only Common themes emerging with customers around the world Differentiated point-of-sale merchandising Retailers want to utilise the advantages of market standards for packaging – and are committed to them At the same time they want to diff
Slide 41: Global trends: food safety and food waste
Global trends in produce and packaging For personal use only Common themes emerging with customers around the world Food safety Critical to wellbeing of people and sustainability of the supply chain US driving the direction globally Stricter regulations expected in all major markets 79 Global
Slide 42: IFCO's response to market trends
IFCO’s response to market trends For personal use only Five key topics matter most to our customers Differentiated point-of-sale 1 merchandising Support for Southern Hemisphere 2 sourcing 3 New RPC products and services 4 Food safety Measuring cost savings, environmental 5 impact and food waste redu
Slide 43: Customised pool strategy
Customised pool strategy For personal use only IFCO offers custom pools to select partners Black version of lift-lock RPC Long-term agreement Mutually-agreeable production schedule “Wood look” RPC Strong retailer advocacy in North America Largest potential volume in the world 83 IFCO mer
Slide 44: IFCO merchandising innovations
IFCO merchandising innovations For personal use only Range of solutions allows customization of standardized RPCs Wraps & Racks Fresh FramesTM Promo Plates (patent pending) 85 Support for Southern Hemisphere sourcing Examples of recent implementations Pears and apples from Argentina Pineapples f
Slide 45: New product innovations
New product innovations For personal use only Demand for packaging standardization throughout fresh market Bananas UK Bread Northern and France Central Europe Germany Eggs Meat Spain Most of Europe US US Germany 87 New product innovations Examples of recent implementations 88
Slide 46: IFCO is committed to food safety
IFCO is committed to food safety For personal use only Delivering safe RPCs to our customers is our top priority Strict global standards RPC cleaning process Diversey™ detergent and disinfectant guarantee Industry leadership Reusable Packaging Association best practices Dissolvable label
Slide 47: Building the IFCO Network in North America
For personal use only Building the IFCO Network in North America Dan Walsh President, IFCO North America 92
Slide 48: IFCO North America's development
IFCO North America’s development For personal use only We have consistently built scale and credibility 1,500 producer locations 200M 1,000 producer locations recollections 100M 100 retail DCs recollections 20 retailers 500 producer locations 50M recollections 15 retailers 50 retail DCs 6 retailers
Slide 49: Addressable opportunity
Addressable opportunity For personal use only Strong market potential and targeted strategy 1.2B trips 1.9B trips 2.0B trips Current retailer targets Targeted opportunity 2.3B trips Addressable opportunity Addressable retailers, Retailers addressable commodities and pack Total opportunity types
Slide 50: Three key areas of focus
Three key areas of focus For personal use only Tackling the issues in a disciplined manner 1 Align market 2 Maintain 3 Drive positioning growth efficiency A clearly enunciated Continued customer Increased volume value proposition intimacy and penetration to Sales-force re- Retailer drive p
Slide 51: Sales force re-organisation
Sales force re-organisation For personal use only Clear, focused, and aligned with our strategy IFCO North America leadership Commodity Grower sales Retail sales management New business Regional Audit and Category Key accounts development accounts compliance management 99 Commodity management for gr
Slide 52: Commodity management for granular value
Commodity management for granular value For personal use only Implement regional audit team on monthly schedule Distribute weekly compliance report to sales Compliance Strategy Coordinate and track top compliance opportunities Present fact-based value propositions (sales and Deliver to commo
Slide 53: Case study: Walmart wood-grain RPC
Retailer merchandising differentiation For personal use only Case study: Walmart wood-grain RPC Excited about the opportunity to partner with Walmart – an opportunity to ignite meaningful advocacy and reinforce value Commitment to a quality product that will perform in the supply chain and suppo
Slide 54: Tomorrow's site visit: Rancho Cucamonga
Tomorrow’s site visit For personal use only Introducing IFCO’s Rancho Cucamonga facility Key statistics Annual RPCs washed: 83M Building size: 208,000 square feet Employees: 250 Production shifts: 3 Weekly operations: 24/7 In-line tunnel wash machines: 5 105 Focus areas for value creatio
Slide 55: Executing our Global Containers Strategy
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Executing our Global Containers Strategy
Slide 56: Containers: a diversified portfolio
For personal use only Jason Rabbino Group President, Containers and Head of Strategy 109 Containers: a diversified portfolio Value creation in four distinct supply chains Return profile of Containers business units 35% Automotive Return on Capital Invested IBCs - ex-intangibles 25% Oil & Gas - ex in
Slide 57: Containers delivery scorecard – FY15
Containers delivery scorecard – FY15 For personal use only Results reflect diversity and portfolio building investments Result Change Excluding Reported acquisitions Sales revenue US$466M 31% 4% Heavily weighted to acquisitions Underlying Profit US$59M 72% 10% Strong sales to profit leverage Average
Slide 58: Strategy update: IBCs
Strategy update: IBCs For personal use only Three strategies to expand growth and profitability 1 2 3 New verticals and Globally leveraging Intercontinental new poolable proven solutions and geographic container offerings and talent expansion 113 IBC key progress areas Good execution on core strateg
Slide 59: Intercontinental case study: Rana Meal
Intercontinental case study: Rana Meal For personal use only Rana Meal solution implemented successfully CHEP recently began shipping 2M liters of fresh basil Rana is the No. 1 filled pasta paste per year from Italy to the USA company in Europe Rana Meal Basil Sauce Before: palletized metal drum Aft
Slide 60: Intercontinental case study: Automotive
Intercontinental case study: Automotive For personal use only Honeywell signed and in process for Q2 FY15 launch CHEP pooled solution for annual movement of Leading global tier-one >100,000 turbo-chargers from China and India to automotive supplier Europe and Mexico Before: one-way packaging After:
Slide 61: Meeting our value creation commitments
Meeting our value creation commitments For personal use only Key drivers to improve Containers’ growth and returns Improved range of solution offerings Accelerating organic New sales incentive plans and leadership growth Centralizing marketing best practices, rolling out salesforce.com Integ
Slide 62: Our Evolving Containers Offering in North America
For personal use only Drew Merrill Vice President, General Manager, CHEP Container Solutions, North America 121 Snapshot of our business Solid rates of growth and high customer loyalty Automotive and IBC North America sales Key business features 40 revenue (US$M) ~90 employees 150 customers 30
Slide 63: Evolution of automotive strategy
Evolution of automotive strategy For personal use only Emphasis on growth of managed services model Strategic rationale Key activities and current priorities Broaden point-of-entry opportunities with auto-makers Quicken rollout of managed services given and tier suppliers in a market dominated by ow
Slide 64: Quick-hit innovations; Case study: L'Oréal
Quick-hit innovations For personal use only Differentiators that can be drivers of growth Tote heater pad Bag winder Air assist liner Bin evacuation Bladeless agitator system Liquefies edible fats Wrings out excess Automatic inflating Automated Air-based pre-mixing and oils viscous product air bladd
Slide 65: IBC – Americas growth strategy
IBC – Americas growth strategy For personal use only Simple objectives that require disciplined execution Priority: Develop custom bin to optimize pooling dynamics meat Engage large beef and pork players through existing pallet relationships Expand dry, Priority: protein and bulk Leverage Tran
Slide 66: Leveraging our Network Advantage for Value
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Leveraging our Network Advantage for Value
Slide 67: Five-year trend in quantity and quality
For personal use only Zlatko Todorcevski Chief Financial Officer 131 Five-year trend in “quantity” and “quality” We have almost doubled in size while maintaining returns Average Capital Invested vs. Return on Capital Invested (continuing operations) 7,000 25% 6,000 20% 5,000 US$M 4,000 15% 3,000 10%
Slide 68: Pallets – ROCI profile and drivers
Pallets – ROCI profile and drivers For personal use only Targeting upside from a strong position 25% Key value drivers Growth Investment in well-established businesses Direct costs mitigation in Americas region Underlying Profit margin Focus on cost and asset utilisation efficiency FY14 20% FY
Slide 69: Containers – ROCI profile and drivers
Containers – ROCI profile and drivers For personal use only Many opportunities in our diverse portfolio 25% Key value drivers Growth strategy for global automotive operations Underlying Profit margin Scale efficiency in newer operations, intercontinental 20% Strong growth in high-returning IBC
Slide 70: Long-term opportunity mapping
Long-term opportunity mapping For personal use only An assessment of value creation beyond short-term returns Comparative net present values of opportunities (illustrative) 40% Consuming cash Generating cash Example organic expansion 30% ROCI at maturity opportunity - existing market 20% Example org
Slide 71: Closing Remarks
For personal use only Tom Gorman CEO 139 Closing Remarks
Slide 72: Agenda: Thursday 17 September
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Agenda Thursday 17 September – morning and afternoon 0730-0830 Networking breakfast Fountain Foyer/Terrace 0830-0930 Outward coach transport to site tours Meet in hotel foyer 0930-1030 Visit to IFCO service
Slide 73: Appendices
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Appendices
Slide 74: Glossary of terms and measures
Appendix 1 For personal use only 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. A
Slide 75: Glossary of terms and measures (continued)
Appendix 1 For personal use only Glossary of terms and measures (continued) Except where noted, common terms and measures used in this document are based upon the following definitions: Net new business The sales revenue impact in the reporting period from business won or lost in that period and ove
Slide 76: Major currency exchange rates; Employee Survey results
Appendix 2b For personal use only Major currency exchange rates1 USD exchange rate: USD EUR GBP AUD CAD MXN ZAR CHF BRL FY15 1.0000 1.1946 1.5734 0.8301 0.8505 0.0697 0.0876 1.0605 0.3748 Average FY14 1.0000 1.3587 1.6331 0.9142 0.9334 0.0765 0.0961 1.1089 0.4373 30 Jun 15 1.0000 1.1220 1.5729 0.767
Slide 77: Our Sustainability framework
Appendix 4a For personal use only Our Sustainability framework 100% certified timber 20% CO2 reduction Zero waste to landfill 3 volunteering days Supply chain collaboration available per employee projects Education Food Security Leveraging our Environmental circular pooling model projects 151 Append
Slide 78: External recognition for our Sustainability efforts
Appendix 4c For personal use only External recognition for our Sustainability efforts • Included in DJSI World Index, recognizing our Group as one of the top 10% responding companies in 2015 • DJSI’s Industry Mover Sustainability award • Included in FTSE4Good listing • Year-on-year improvement on Ca
Slide 79: Pallets: addressable opportunity
Appendix 5b For personal use only Pallets: addressable opportunity Notes: US$4.8B US$0.3B US$1.1B Addressable opportunity reflects Brambles’ estimate of addressable FMCG standard-size 33% opportunity in currently served countries only. 48% The opportunity reflects an assessment of the 64% current
Slide 80: Investor Relations contacts
For personal use only Investment Market Briefing 15 – 17 September 2015 Pasadena, California Investor Relations contacts James Hall Vice President, Investor Relations & Corporate Affairs james.hall@brambles.com +61 2 9256 5262 +61 401 524 645 Raluca Chiriacescu Manager, Investor Relations raluca.chi