Slide 1: Copies of slides for webcast (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 For personal use only 15 February 2011 The Manager - Listings Australian Securities Exchange Limited Exchange Centre
Slide 2: 2011 first-half results
For personal use only 2011 first-half results 15 February 2011 Discussion topics Business update and result overview Tom Gorman, CEO Result analysis Greg Hayes, CFO Outlook Growth initiatives update Tom Gorman, CEO • Emerging economies focus Summary 2 1
Slide 3: Business update and result overview
For personal use only Business update and result overview Tom Gorman, CEO Result highlights Sales revenue up 3% • Uneven economic recovery in Brambles’ key regions • Customer retention and new business wins • Strengthening customer relationships Operating profit up 8% • Improvement in all busine
Slide 4: Financial highlights
Financial highlights For personal use only Change (%) US$M 1H11 1H10 Actual FX Constant FX* Sales revenue 2,147.2 2,086.1 3 4 Operating profit** 366.1 338.1 8 8 Profit after tax** 219.8 206.7 6 7 Earnings per share (US cents)*** 15.4 14.8 4 5 Dividends per share (Australian cents) 13.0 12.5 4 Change
Slide 5: Business highlights – CHEP Americas
Business highlights – CHEP Americas For personal use only Sales revenue up 5% • Growth in all countries • Latin America up 19% • LeanLogistics up 16% • Ongoing competitive activity Defending and growing the business • Leading brands re-committing Improved CHEP USA business • Customer feedback
Slide 6: Business highlights – CHEP EMEA and Asia-Pacific
Business highlights – CHEP EMEA For personal use only Sales revenue down 2% • Negative impact from weaker euro and pound • Volume up 2% • Automotive sales revenue up 3% Volume growth in Western Europe • Growth in Germany, Italy, Benelux, Scandinavia • Difficult conditions in Spain, France, UK
Slide 7: Business highlights – Recall; IFCO update
Business highlights – Recall For personal use only Sales revenue up 6% • Major contracts wins • Carton volume growth 6% • Higher paper prices Increased investment in facilities, sales-force and systems Strong growth in emerging economies 11 IFCO update CY10 result in line with Brambles expec
Slide 8: Result overview
For personal use only Result analysis Greg Hayes, CFO Result overview Actual FX Constant FX US$M 1H11 1H11 1H10 Growth % Sales revenue 2,147.2 2,164.4 2,086.1 4 Underlying profit 372.5 373.1 340.2 10 Operating profit 366.1 365.9 338.1 8 Profit before tax 308.9 309.0 284.1 9 Profit after tax 219.8 22
Slide 9: CHEP overview
For personal use only CHEP CHEP overview Actual FX Constant FX US$M 1H11 1H11 1H10 Growth % Americas 791.2 782.2 756.9 3 EMEA 751.3 798.4 770.1 4 Asia-Pacific 220.0 203.8 195.0 5 Sales revenue 1,762.5 1,784.4 1,722.0 4 Operating profit 331.0 331.7 300.4 10 Profit margin (%) 19 19 17 16 8
Slide 10: Americas – sales revenue and operating profit
Americas – sales revenue For personal use only US$M, constant currency basis 10 782 14 757 1 1H10 Price, mix Organic volume Net new business 1H11 17 Americas – operating profit US$M, constant currency basis 14 (13) 13 123 109 1H10 Vol, price, mix Quality initiatives Direct costs 1H11 18 9
Slide 11: EMEA – sales revenue and operating profit
EMEA – sales revenue For personal use only US$M, constant currency basis 6 798 14 3 5 770 1H10 Price, mix Organic volume Net new Unitpool 1H11 business 19 EMEA – operating profit US$M, constant currency basis 16 (10) 3 173 5 159 1H10 Vol, price, mix Quality initiatives Direct costs Other 1H11 20 10
Slide 12: Asia-Pacific – sales revenue and operating profit
Asia-Pacific – sales revenue For personal use only US$M, constant currency basis 2 204 5 2 195 1H10 Price, mix Organic volume Net new business 1H11 21 Asia-Pacific – operating profit US$M, constant currency basis 6 (4) 1 36 33 1H10 Vol, price, mix Direct costs Other 1H11 22 11
Slide 13: Recall overview
For personal use only Recall Recall overview Actual FX Constant FX US$M 1H11 1H11 1H10 Growth % Americas 174.2 172.0 161.9 6 Europe 93.8 100.0 95.3 5 Rest of world 116.7 108.0 106.9 1 Sales revenue 384.7 380.0 364.1 4 Operating profit 59.3 57.3 52.5 9 Profit margin (%) 15 15 14 24 12
Slide 14: Recall – sales revenue and operating profit
Recall – sales revenue For personal use only US$M, constant currency basis 8 380 3 5 364 1H10 Price, mix Organic volume Net new business 1H11 25 Recall – operating profit US$M, constant currency basis 12 (3) (5) 57 53 1H10 Vol, price, mix Direct costs Other 1H11 26 13
Slide 15: Cash flow and finance
For personal use only Cash flow and finance Cash flow US$M actual rates 1H11 1H10 Change EBITDA 596.0 562.1 33.9 Capital expenditure (338.6) (254.6) (84.0) Proceeds from disposals 39.8 43.6 (3.8) Working capital movement (34.3) (21.4) (12.9) IPEP expense 52.7 60.2 (7.5) Provisions / other (25.5) 10.
Slide 16: Financial position
Financial position For personal use only Actual rates Dec 10 Jun 10 Net debt (US$M) 1,720.5 1,759.3 Gearing* (%) 45.5 51.9 Actual rates 1H11 1H10 Covenants EBITDA**/ net finance costs (x) 10.4 10.4 3.5 (min) Net debt/ EBITDA (x) 1.4 1.8 3.5 (max) * Net debt to net debt plus equity ** EBITDA defined
Slide 17: Outlook
Outlook For personal use only On track for FY11 result in line with Aug ’10 guidance • Sales revenue growth in all business units at constant currency • Operating profit before finance costs and tax of US$740M to US$780M* – June 2010 foreign exchange rates – Excludes any contribution or acquisitio
Slide 18: Recap – key strengths; Delivering growth
Recap – Brambles’ key strengths For personal use only Global footprint Local networks Intellectual property • Expertise in equipment pooling • Expertise in information management Customer franchises Financial position 33 Delivering growth Current initiatives Strengthen the core Geograp
Slide 19: Focus on emerging economies
Focus on emerging economies For personal use only Accounts for ~US$450M of Emerging regions' share of group sales revenue (FY10) Brambles’ sales revenue Growth rate of ~20% Emerging Regions 11% • Latin America • Central & Eastern Europe • Middle East & Africa Developed • Asia 89% Opportuniti
Slide 20: China and India
China For personal use only CHEP sales revenue up 76% over Grocery retail market structure by format (top 10 retailers) 1H10 10,000 Strong FMCG pallets growth 9,000 8,000 • Retailer advocacy: CRV, Wumart , 1,031 7,000 Tesco, Walmart 875 6,000 # of stores 711 4,080 • P&G, Walmart study supports 5
Slide 21: Poland and Turkey
Poland For personal use only CHEP delivering strong sales CHEP Poland pallet opportunity revenue growth • 1H11 sales revenue up 15% • Strong link to Western Europe Other Foundation of support from FMCG 32M issues Immediate sector per year opportunity 43M issues • Global and local customers per y
Slide 22: Summary
For personal use only Summary Tom Gorman, CEO Summary Sales revenue and profit up against uneven economic backdrop Defending the business while investing in quality and growth Emerging economies performing strongly Growth initiatives on track Outlook in line with Aug ‘10 guidance 42 21
Slide 23: Disclaimer statement
For personal use only Disclaimer statement 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 24: Contact details
Contact details For personal use only Cathy Press Group Vice President, Capital Markets cathy.press@brambles.com +61 2 9256 5241 +61 419 290 745 James Hall Director, Investor Relations & External Communications james.hall@brambles.com +61 2 9256 5262 +61 401 524 645 45 Appendices 23
Slide 25: Glossary of terms and measures
Appendix 1 Glossary of terms and measures For personal use only Except where noted, common terms and measures used in this document are based upon the following definitions: Actual rates In the statutory financial statements, foreign currency results are translated into US dollars at the applicable
Slide 26: Significant items; Currency mix
Appendix 2 Significant items For personal use only 1H11 1H10 Actual rates US$M US$M Underlying profit 372.5 340.2 Significant items: Acquisition-related costs (6.9) - Restructuring costs 0.5 (2.1) Subtotal (6.4) (2.1) Operating profit 366.1 338.1 49 Appendix 3 Currency mix 1H11 currency mix at actua
Slide 27: Credit facilities and debt profile
Appendix 4 Credit facilities and debt profile For personal use only US$B Committed Maturity Type Debt drawn Headroom facilities < 12 months Bank/USPP* 0.4 0.3 0.1 1 – 2 years Bank 1.2 0.3 0.9 2 – 3 years Bank 1.0 0.1 0.9 3 – 4 years USPP* 0.2 0.2 - 4 – 5 years 144A** 0.2 0.2 - > 5 years USPP*/144A**
Slide 28: CHEP and Americas – sales revenue by service line
Appendix 6 CHEP – sales revenue by service line For personal use only US$M, actual rates Growth vs. 1H10 55 68 Pallets 4% 84 RPC 6% Automotive 9% Other 11% 1,555 Pallets RPC Automotive Other 88% 5% 4% 3% Growth % calculated on constant currency basis 53 Appendix 7A Americas – sales revenue by servic
Slide 29: Americas by region; CHEP USA quality costs
Appendix 7B Americas – sales revenue by region For personal use only US$M, actual rates Growth vs. 1H10 25 USA 1% 100 Canada 5% Latin America 14% 111 Other 3% 555 USA Canada Latin America Other 70% 14% 13% 3% Growth % calculated on constant currency basis 55 Appendix 8 CHEP USA quality costs US$M Ac
Slide 30: CHEP USA rejections and plant operations trends
Appendix 9 CHEP USA rejections accumulated For personal use only Rejections as a percentage of pallet issues 0.6% 0.5% July 0.4% ‘08, 0.5% 0.3% 0.2% Dec ‘10, 0.1% 0.2% 0.0% Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 57 Appendix 10A CHEP USA – plant operations and transport
Slide 31: CHEP USA productivity; EMEA sales by service line
Appendix 10B CHEP USA – productivity trends For personal use only Control ratio New equipment issue ratio (Returns + Recoveries / Total issues) (Pallets purchased / Total issues) 100% 10% 8% 98% 6% 96% 4% 94% 2% 92% 0% 02 03 04 05 06 07 08 09 10 2 3 4 5 6 7 8 9 0 11 11 0 0 0 0 0 0 0 0 1 FY FY FY FY
Slide 32: EMEA sales by region; CHEP Europe operations trends
Appendix 11B EMEA – sales revenue by region For personal use only US$M, actual rates Growth vs. 1H10 21 5 Western Europe 7% 81 UK & Ireland 3% 199 Iberia 4% France 4% 97 MEA 18% CEE 23% 155 193 Western Europe UK & Ireland Iberia France MEA CEE Unitpool 26% 26% 20% 13% 11% 3% 1% Growth % calculated o
Slide 33: CHEP Europe productivity; Asia-Pacific by service line
Appendix 12B CHEP Europe – productivity trends For personal use only Control ratio New equipment issue ratio (Returns + Recoveries / Total issues) (Pallets purchased / Total issues) 98% 10% 8% 96% 6% 94% 4% 92% 2% 90% 0% 02 03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 09 10 11 11 FY FY FY FY FY FY F
Slide 34: Asia-Pacific by region; Recall by service line
Appendix 13B Asia-Pacific – sales revenue by region For personal use only US$M, actual rates Growth vs. 1H10 52 10 Australia 1% 21 New Zealand 5% China 73% SE Asia 13% India 240% 182 Australia New Zealand China SE Asia India 83% 9% 5% 2% 1% Growth % calculated on constant currency basis 65 Appendix
Slide 35: Paper prices – North America
Appendix 15 Paper prices – North America For personal use only US$ actual rates 250 210 Price per ton 170 130 90 50 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 67 2011 first-half results 15 February 2011 34