Brambles Limited · ASX:BXB
Brambles — 1H15 Earnings Presentation
25 slides from Brambles's earnings presentation, Feb 23, 2015
Slide 1: Half-year results
Half-year results 23 February 2015
Slide 2: Overview & Results Highlights
Overview & Results Highlights Tom Gorman, CEO 2
Slide 3: Key 1H15 result messages
Key 1H15 result messages Solid result with full-year guidance maintained On track to deliver FY15 guidance Underlying Profit expected to be US$1,055-1,085M (30 June 2014 FX) Improved Pallets result, with leverage to bottom line Strong profit performance in Europe: supply-chain efficiencies and impro
Slide 4: Group safety performance
Group safety performance Improving overall but one fatality in 1H15 25 20 15 10 5 0 FY10 FY11 FY12 FY13 FY14 1H15 BIFR: continuing businesses 1 BIFR: reported 2 Note: BIFR stands for Brambles Injury Frequency Rate, recorded per per million man hours; see slide 26 for full definition. 1 Operations ow
Slide 5: Financial highlights
Financial highlights Solid growth with leverage from sales to Underlying Profit (Continuing operations) 1H15 result Change vs. 1H14 Actual FX Constant FX Sales revenue US$2,795M 5% 8% Operating profit US$466M 3% 7% Profit after tax US$286M 2% 6% Underlying Profit US$485M 6% 10% Return on Capital Inv
Slide 6: Delivery scorecard
Delivery scorecard On track for FY15 guidance and FY19 targets FY15 Guidance 1H15 Progress Constant FX sales revenue growth of 8-9% On track US$12M delivered in 1H15 Delivery of Global Supply Chain efficiencies US$22M to deliver in 2H15 Underlying Profit: US$1,055-1,085M (30 June 2014 FX – On track
Slide 7: Continued momentum
Continued momentum Sales revenue: constant FX growth of 8% in 1H15 (US$M) Solid, resilient performance USD appreciation vs. despite economic and other major operating competitive pressures and currencies below-trend contribution from emerging markets 50 51 4 (81) 61 41 Ferguson, Transpac and Airworl
Slide 8: Pallets segment result summary
Pallets segment result summary Solid sales growth with bottom-line leverage 1H15 Change vs. 1H14 Solid contribution to sales growth Actual Constant from net new business wins, pricing (US$M) FX FX and organic volume growth Americas 1,181 3% 5% Global Supply Chain efficiencies and EMEA 729 1% 5% mode
Slide 9: RPCs segment results summary
RPCs segment results summary Strong sales growth and improved profitability 1H15 Change vs. 1H14 All regions contribute strongly to Actual Constant sales growth, led by Europe, as (US$M) FX FX adoption of RPCs continues Europe 305 6% 11% Modest costs growth compared with North America 94 11% 11% 1H1
Slide 10: Containers segment result summary
Containers segment result summary Result reflects diverse portfolio of businesses 1H15 Change vs. 1H14 Sales growth primarily driven by (US$M) Actual FX Constant FX acquisitions of Ferguson, Transpac and Airworld Including Excluding acquisitions acquisitions Subdued ex-acquisitions growth Automotive
Slide 11: Ferguson and the oil industry cycle
Ferguson and the oil industry cycle Well-positioned to weather currently challenging conditions >70% Sales revenue from mature, producing assets Attractive fundamentals <5% Sales revenue share of largest single customer <1% Sales revenue from non-conventional oil fields Growth during previous downtu
Slide 12: Ferguson: cost curve exposure
Ferguson: cost curve exposure Customer activities focused on lower cost resources Ferguson sales revenue vs. estimated marginal cost of new production, by region 120 90 US$ per barrel 60 30 31% Asia-Pacific 4% Other 6% 3% 5% 8% 43% 0 Middle East Former Central & West Africa North Sea Deepwater US sh
Slide 13: Financial Analysis
Financial Analysis Zlatko Todorcevski, CFO 13
Slide 14: Operating profit analysis (US$M)
Operating profit analysis (US$M) Continued growth offsets cost challenges and enables investment Includes US$10M Positive pricing and sales mix corporate cost benefits throughout Pallets, allocated to Recall growth in RPCs 12 in 1H14 12 (44) (7) (21) 75 (19) North America North America freight rate
Slide 15: Pallets cost trends and outlook
Pallets cost trends and outlook Outlook improving but headwinds remain 1H15 performance and drivers 2H15 considerations Asset utilisation impacts in US Finalize plan for durability improvement Plant costs Global Supply Chain efficiencies Final Global Supply Chain efficiencies Transport Sha
Slide 16: Profit reconciliation
Profit reconciliation Modest increases in non-operating expenses (US$M, continuing operations) 1H15 1H14 Change Actual FX Constant FX Underlying Profit 485 458 6% 10% Significant Items (19) (5) Operating profit 466 453 3% 7% Net finance costs (59) (57) Tax expense (121) (116) Profit after tax 286 28
Slide 17: Cash flow reconciliation
Cash flow reconciliation Increased capital expenditure to support growth (US$M) 1H15 1H14 Change EBITDA 763 719 45 Capital expenditure (521) (433) (88) Proceeds from sale of property, plant and equipment 38 34 4 Working capital movement (27) 27 (54) IPEP expense 42 50 (8) Other (27) (21) (6) Cash Fl
Slide 18: Balance sheet position
Balance sheet position Reflects debt-funding of Ferguson acquisition December 2014 June 2014 Net debt (US$M) 2,846 2,362 Average term of committed facilities (years) 4.2 4.1 1H15 1H14 EBITDA/net finance costs (x) 12.9 12.6 Net debt/EBITDA (x) 1.86 1.66 18
Slide 19: Summary & Outlook
Summary & Outlook Tom Gorman, CEO 19
Slide 20: Key 2H15 focus areas
Key 2H15 focus areas Short-term priorities to drive long-term value Cost – mitigate transport inflation; deploy pallet durability actions in 1 CHEP USA Brand – refresh brand in CHEP Pallets; roll-out of new customer solution 2 strategy to begin in USA Innovation – deploy new technologies/leverage da
Slide 21: FY15 guidance summary
FY15 guidance1 summary Strong sales growth with positive leverage to Underlying Profit Constant FX sales revenue growth expected to be 8% to 9% Underlying Profit of US$1,055-1,085M (30 June 2014 FX rates) Equates to growth of 9-12% compared with FY142 Includes ~US$25M forecast contribution from Ferg
Slide 22: Q&A
Q&A
Slide 23: 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 24: Investor Relations contacts
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.chiriacescu@brambles.com +61 2 9256 5211 +61 427 791 189 24
Slide 25: Half-year results
Half-year results www.brambles.com