Slide 1: Full-Year 2017 Results
Full-Year 2017 Results 21 August 2017
Slide 2: Overview & Results Highlights
Overview & Results Highlights Graham Chipchase
Slide 3: Key messages
Key messages Strong sales revenue growth in all operating segments Underlying Profit broadly in line with updated guidance, as solid growth in most businesses was primarily offset by challenges in US pallets business ROCI of 17.0%, excluding CHEP Recycled now in discontinued operations Corporate act
Slide 4: Divestment of CHEP Recycled
Divestment of CHEP Recycled US recycled pallets business acquired in 2011 as part of IFCO acquisition. The Canadian business was also acquired in 2011 Key focus of IFCO transaction was the European and US RPC businesses Strategic review concluded Brambles is not the optimal owner: CHEP Recycled not
Slide 5: Financial Analysis
Financial Analysis Nessa O’Sullivan
Slide 6: FY17 result: Highlights
FY17 result Highlights Sales revenue growth of 6%1 reflected growth across all segments with particularly strong growth across global IFCO businesses and Europe and Latin America pallets Underlying Profit broadly flat to prior year reflecting challenges in the US pallets business which offset growth
Slide 7: FY17 result: Summary
FY17 result Summary FY17 Change on FY16 Underlying Profit reflected: Sales growth in all segments Actual Constant Direct cost increases in US pallets Continuing operations FX FX IPEP increase due to volume growth and Sales Revenue 5,104.3 4% 6% higher written-down pallet values in Europe and Latin A
Slide 8: FY17 sales growth
FY17 sales growth Growth across all operating segments FY17 Sales revenue growth FY17 Sales revenue by segment1 (US$m)1 IFCO US$971m CHEP Americas (19% of Group) US$2,073m 70 (FY17 growth of 12%) (41% of Group) 12 105 79 (FY17 growth of 4%) 78 CHEP Asia-Pacific US$485m 5,174 5,104 (9% of Group) (FY1
Slide 9: Group profit analysis (US$m)
Group profit analysis (US$m) FY17 performance impacted by challenges in US pallets business In line with higher equipment balances to support prior and Largely due to plant and current year volume growth in transport cost increases in CHEP Includes: US$22m increase IFCO and CHEP Americas Americas, p
Slide 10: Group profit analysis (US$m): Operating segment contributions
Group profit analysis (US$m) Operating segment contributions Strong improvement in IFCO North America Competitive pressure including the benefit of and cost challenges in the US pallets business Includes share of HFG joint cycling challenges in FY16 venture losses of US$12.5m and a US$9.5m increase
Slide 11: CHEP Americas: result analysis
CHEP Americas: result analysis Decline largely due to US pallets business FY17 Change vs. FY16 Modest sales growth in US and Canada pallets reflecting competitive pressures on pricing and Actual Constant volume growth (US$m) FX FX Strong ongoing growth in Latin America pallets US 1,514 2% 2% Margin
Slide 12: US pallets
US pallets Lower FY17 growth cycling exceptionally strong growth in FY16 US pallets revenue growth breakdown FY14 and FY15 revenue growth of 5% Volume growth of 4% and price/mix of 1% FY16 exceptional growth of 8% +8% Volume growth of 5% and price/mix of 3% Higher net new business wins and pricing g
Slide 13: US pallets: Revenue growth trends
US pallets Revenue growth trends FY16 and FY17 revenue growth comparison 1Q17 +5% revenue growth Net new business wins and price/mix growth largely FY16 half-yearly FY17 quarterly1 driven by rollover wins from FY16 breakdown breakdown Like-for-like growth of 1%, consistent with FY14, FY15 and FY16 l
Slide 14: US pallets: Margin performance
US pallets Margin performance impacted by structural and cyclical factors US pallets business margin decline1 Key drivers of FY17 margin decline § Higher repair volumes following accelerated Costs associated volume growth in the prior year and higher with accelerated depreciation due to capital inte
Slide 15: US pallets: capital expenditure reduced
US pallets FY17 capital expenditure reduced in line with lower growth US pallets capital expenditure FY17 performance (US$m) Higher depreciation costs due to full-year impact of FY16 accelerated capital investment 350.0 20.5% 20.0% Reduced capital expenditure due to lower 17.4% 17.4% growth, discipl
Slide 16: CHEP EMEA: result analysis
CHEP EMEA: result analysis Strong volume growth, efficiency gains largely offset cost increases FY17 Change vs. FY16 FY17 performance Strong volume growth and minimal pricing in Actual Constant (US$m) European pallets reflecting strategic price FX FX investment to support volume growth Europe 1,195
Slide 17: CHEP Asia-Pacific: results analysis
CHEP Asia-Pacific: results analysis FY17 performance driven by pallets business in Australia and New Zealand FY17 Change vs. FY16 FY17 performance Actual Constant Modest pricing and like-for-like volume growth in (US$m) Australia and New Zealand FX FX Lower revenues in China reflecting ongoing Palle
Slide 18: IFCO: results analysis
IFCO: results analysis Strong Underlying Profit improvement driven by North America FY17 Change vs. FY16 FY17 performance Strong revenue growth in all regions reflecting Actual Constant continued expansion with new and existing (US$m) FX FX customers Exceptionally strong Underlying Profit growth dri
Slide 19: Corporate: results analysis
Corporate: results analysis Segment includes HFG joint venture and BXB Digital FY17 FY16 FY17 performance Decline in Corporate overheard costs largely (US$m, actual FX) reflected lower employee-related costs HFG joint venture losses of US$12.5m Corporate costs (31.6) (38.3) BXB Digital investment co
Slide 20: Significant Items
Significant Items US$436.1m including non-cash impairments of US$363.8m Continuing operations US$186.1m US$120.0m non-cash impairment of the investment in the HFG joint venture US$45.9m costs related to the One Better program and CHEP and IFCO brand refresh US$20.2m largely relating to organisationa
Slide 21: Cash flow
Cash flow Cash Flow from Operations increase of US$73m (US$m) FY17 FY16 Change FY17 performance Cash capital expenditure increase due to the EBITDA 1,484 1,487 (3) timing of payments relating to higher capital Capital expenditure (1,060) (1,035) (25) commitments in FY16. On an accruals basis, capita
Slide 22: Capital expenditure
Capital expenditure Reduction in FY17 capital intensity Capital expenditure, PP&E, FY17 performance accruals basis (US$m) US$44m reduction in North America pallets capex 1,0611 Continued capital investment to support strong 981 1 1,0231 volume growth in IFCO globally and pallets 212 201 businesses i
Slide 23: Balance sheet position
Balance sheet position Strong position and significant headroom in undrawn committed facilities June 17 June 16 Strong balance sheet Net debt US$2,573m US$2,622m US$49.1m decrease in net Average term of committed facilities 3.7 years 4.3 years debt since 30 June 2016 Undrawn committed Significant he
Slide 24: Considerations for FY18
Considerations for FY18 No specific guidance Ongoing revenue momentum in pallets Europe, Latin America and IFCO RPCs US pallets: Benefits from volume recovery and reversal of FY17 one-off costs partially offset by the continuation of competitive intensity and structural cost pressures Group-wide foc
Slide 25: Focus on the core drivers of value
Focus on the core drivers of value Graham Chipchase
Slide 26: Our vision
Our vision We are: Industry- ~14,000 ~590 million A network of leader in 60+ employees pallets, crates 850+ service countries and containers centres We aspire to be: “The world-leading provider of supply chain logistics solutions, working together with our customers to make supply chains more effici
Slide 27: Sustainable business model
Sustainable business model Share and reuse model delivering value to our key stakeholders Customers q Enhance operational efficiency of their supply chain q Free up cash and resources to invest in their core business q Support customers in meeting sustainability objectives Shareholder q Sustainable
Slide 28: Investor value proposition
Investor value proposition Creating long-term value and attractive shareholder returns Brambles’ value creation model Delivering, through the cycle: Sustainable growth at returns well in excess of the cost of capital; Mid-single digit revenue growth1; Underlying Profit leverage1; and ROCI in the mid
Slide 29: Operating and competitive landscape
Operating and competitive landscape Changing customer requirements and increasing competition Industry E-commerce and omni-channel developments accelerating pace of change Trend for consolidation in FMCG and retail industry Growth of hard-discount retailers and increasing need for shelf-ready soluti
Slide 30: Focus on the core drivers of value: Strategic focus areas
Focus on the core drivers of value Strategic focus areas Grow and Deliver Drive disciplined Innovate to Develop strengthen our operational and capital allocation create new world- network organisational and improved value class talent advantage efficiencies cash generation 30
Slide 31: Network advantage
Network advantage Grow and strengthen core competitive differentiation Increase market share through Invest in differentiated ongoing conversion of customers service offerings and to pooled solutions and defend platform quality existing business against competition Identify opportunities for Target
Slide 32: Operational and organisational efficiencies
Operational and organisational efficiencies Group-wide initiatives to offset cost and competitive price pressures Leverage scale across the Group to: Develop sophisticated procurement initiatives; and Conduct innovation trials across regions to create solutions for global business Sharing best pract
Slide 33: Capital allocation and cash flow generation
Capital allocation and cash flow generation Renewed focus on core businesses and capital efficiency Focus capital allocation on core businesses and innovation Grow developed and developing businesses with proven economic returns Disciplined investment in new businesses, balancing near and long-term
Slide 34: Innovate to create new value
Innovate to create new value Meeting customers’ needs with differentiated solutions Omni-channel Promotional display pallets Efficient replenishment solutions Click’n’collect trials and insights E-commerce Standardised platform solutions for inbound and outbound flows in the e-commerce supply chain
Slide 35: Innovate to create new value: technology
Innovate to create new value Utilising technology to transform operations, products and services Service centres Automated inspection and repair Recycling and waste minimisation initiatives Product design and material science Ongoing assessment of new material developments BXB Digital: US$17m invest
Slide 36: Developing world-class talent
Developing world-class talent Focus on employee safety, engagement and capability Prioritising safety and employee engagement Promoting a ‘Zero Harm’ work environment Commitment to best practice employee engagement Fostering an inclusive and diverse organisation Promoting a culture of agility and in
Slide 37: Outlook
Outlook By delivering on its strategic objectives, Brambles expects to deliver sustainable growth and returns well in excess of the cost of capital Sales revenue growth is expected to be in the mid-single digits1, primarily driven by the ongoing conversion of customers to pooled solutions and expans
Slide 38: Focus on the core drivers of value
Focus on the core drivers of value Strong business underpinned by market-leading positions and network advantage High-performance culture with a clear focus on delivering value to the customer Operational excellence and disciplined capital allocation key to delivery of superior financial returns Gro
Slide 39: Full-Year 2017 Results
Full-Year 2017 Results 21 August 2017
Slide 40: Appendices
Appendices Brambles
Slide 41: Sales revenue by region and sector
Appendix 1 Sales revenue by region and sector FY17 sales revenue by region FY17 sales revenue by sector Africa, India & Eastern Europe Asia ex-Japan Auto, 3.0% Latin Middle East Packaging, 2.9% 1.0% Other, America 4.2% 2.1% 9.5% 6.3% General retail, 1.9% Japan 0.6% Storage USA & & Dist., ANZ Canada
Slide 42: Detailed reconciliation of Underlying to statutory earnings
Appendix 2 Detailed reconciliation of Underlying to statutory earnings Operating Earnings Per Continuing operations Tax Profit after tax Profit Share (US$m, Actual FX) FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 Underlying Profit 957.5 984.5 (247.4) (252.5) 611.4 619.1 38.5 39.2 - Acquisition related co
Slide 43: Significant Items: Continuing and discontinued operations
Appendix 3 Significant Items: Continuing and discontinued operations (US$m, actual FX) FY17 FY16 Acquisitions related costs (0.8) (7.8) Restructuring & integration costs (65.3) (36.8) Impairment of HFG joint venture (120.0) - Acquisition gains/(losses)1 - 5.4 Continuing operations (186.1) (39.2) Imp
Slide 44: Major currency exchange rates
Appendix 4 Major currency exchange rates1 USD exchange rate: USD EUR GBP AUD CAD ZAR MXN CHF BRL PLN FY17 1.0000 1.0950 1.2732 0.7540 0.7526 0.0737 0.0516 1.0133 0.3083 0.2545 Average FY16 1.0000 1.1058 1.4719 0.7270 0.7548 0.0689 0.0576 1.0146 0.2713 0.2567 30 June 17 1.0000 1.1439 1.3008 0.7686 0.
Slide 45: FY17 currency mix
Appendix 5 FY17 currency mix (US$m) Total USD EUR GBP AUD CAD ZAR MXN BRL CHF PLN Other1 Sales revenue 5,104 1,774 1,413 408 383 256 153 154 78 66 61 358 FY17 share 100% 35% 28% 8% 7% 5% 3% 3% 2% 1% 1% 7% FY16 share 100% 36% 27% 10% 7% 5% 3% 3% 1% 1% 1% 6% Net debt2 2,573 1,436 1,317 146 (676) 80 93
Slide 46: Credit facilities and debt profile
Appendix 6 Credit facilities and debt profile Committed Uncommitted Maturity Type Debt drawn Headroom facilities facilities (US$b at 30 June 2017) <12 months Bank/EMTN1/Other 0.6 0.3 0.7 0.2 1 to 2 years Bank/USPP2/Other 0.7 - 0.1 0.6 2 to 3 years Bank/144A3/Other 1.0 - 0.6 0.4 3 to 4 years Bank/Oth
Slide 47: Capital expenditure on Property, Plant and Equipment
Appendix 7 Capital expenditure on Property, Plant and Equipment (Accruals basis, US$m) 1,061 1,023 973 89 58 886 845 140 84 231 119 320 164 202 90 663 569 568 571 590 67 70 60 62 71 FY13 FY14 FY15 FY16 FY17 Other PP&E Replacement (DIN) CHEP growth IFCO growth 47
Slide 48: Net plant costs/sales revenue
Appendix 8 Net plant costs/sales revenue Net plant cost/sales revenue Net transport cost/sales revenue FY17 FY16 FY17 FY16 CHEP Americas 37.8% 36.5% 21.5% 20.3% CHEP EMEA 23.4% 23.7% 20.3% 19.9% CHEP Asia Pacific 36.4% 36.8% 11.8% 11.7% IFCO 21.4% 22.1% 21.3% 22.3% Group 30.1% 29.9% 20.2% 19.7% 48
Slide 49: CHEP Americas: Underlying profit analysis
Appendix 9a CHEP Americas: Underlying profit analysis (US$m) (25) 40 (27) (19) (8) (5) 439 400 395 FY16 Volume, Depreciation Net plant Net transport Other FY17: FX FY17: actual price, mix costs costs constant FX FX 49
Slide 50: CHEP EMEA: Underlying profit analysis
Appendix 9b CHEP EMEA: Underlying profit analysis (US$m) (8) 3 (3) (8) 30 (14) 401 386 387 FY16 Volume, Depreciation Net plant Net transport Other FY17: FX FY17: actual price, mix costs costs constant FX FX 50
Slide 51: CHEP Asia-Pacific: Underlying profit analysis
Appendix 9c CHEP Asia-Pacific: Underlying profit analysis (US$m) 1 (1) (1) (5) 5 12 112 107 101 FY16 Volume, Depreciation Net plant Net transport Other FY17: FX FY17: actual price, mix costs costs constant FX FX 51
Slide 52: IFCO: Underlying profit analysis
Appendix 9d IFCO: Underlying profit analysis (US$m) 5 (6) 1 (9) (1) 31 119 118 97 FY16 Volume, Depreciation Net plant Net transport Other FY17: FX FY17: actual price, mix costs costs constant FX FX 52
Slide 53: Glossary of terms and measures
Appendix 10 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. Average Capital Invest
Slide 54: Glossary of terms and measures (continued)
Appendix 10 Glossary of terms and measures (continued) Except where noted, common terms and measures used in this document are based upon the following definitions: Constant currency/FX Current period results translated into US dollars at the actual monthly exchange rates applicable in the comparabl
Slide 55: Glossary of terms and measures (continued)
Appendix 10 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 over the previous financ
Slide 56: Disclaimer
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. This
Slide 57: Investor Relations contacts
Investor Relations contacts Sean O’Sullivan Vice President, Investor Relations Sean.osullivan@brambles.com +61 2 9256 5262 +61 412 139 711 Raluca Chiriacescu Director, Investor Relations raluca.chiriacescu@brambles.com +61 2 9256 5211 +61 427 791 189 57