Brambles Limited · ASX:BXB
Brambles — H1 2010 Earnings Presentation
33 slides from Brambles's earnings presentation, Feb 17, 2010
Slide 1: 2010 Interim Results Analyst presentation
2010 Interim Results Analyst presentation 17 February 2010
Slide 2: Tom Gorman, Chief Executive Officer
Tom Gorman Chief Executive Officer
Slide 3: First-Half Results
FIRST-HALF RESULTS Solid financial discipline • Cash flow • Balance sheet • Overhead reduction Sales negatively impacted by economic weakness • USA • Western Europe Winning business in all markets today Continuing long-term investment • Better Everyday in CHEP USA • Growth markets 3
Slide 4: First-Half Results (continued)
FIRST-HALF RESULTS (CONTINUED) Safety performance • Ongoing improvements • Zero Harm New leadership team Well-placed to return to growth • Leveraged to economic recovery • Brambles initiatives 4
Slide 5: Group Overview
GROUP OVERVIEW Sales revenue Statutory Statutory EPS Free cash flow operating profit after dividends 2% 3% 8% US$224m Sales revenue down 2% • Subdued business conditions • Primarily Automotive and SDS Statutory operating profit down 3% • Underlying profit down 30% • Better Everyday in CHEP USA
Slide 6: Group Sales Revenue
GROUP SALES REVENUE US$m 2,073 8 26 20 2,036 17 1H09 Price/Mix Automotive/SDS Organic Net new 1H10 business All numbers are calculated at constant currency 6
Slide 7: Sales Revenue by Product Line
SALES REVENUE BY PRODUCT LINE US$m 49 65 Growth vs. 1H09 89 Pallets 2% RPC 15% Automotive 17% Other 7% 1,519 Pallets RPC Automotive Other 88% 5% 4% 3% Growth % calculated on constant currency 7
Slide 8: CHEP Americas Results
CHEP AMERICAS RESULTS Sales revenue Statutory operating Underlying profit Cash flow from profit operations 5% 36% 54% US$23m Sales revenue down 5% • CHEP USA sales decline • Sales up in CHEP Canada, CHEP Latin America • Anticipate CHEP USA pallet issue volumes down 3% for FY10 Statutory operatin
Slide 9: Better Everyday
BETTER EVERYDAY Rollout progressing on target • US$65m expenditure in line with plan Pallet quality and service improvements • Positive reaction to new repair specifications • Rejections down Ease of doing business • Portfolio+Plus roll-out on track • Simplified invoice launch in FY11 Streng
Slide 10: CHEP EMEA Results
CHEP EMEA RESULTS Sales revenue Statutory operating profit Cash flow from operations 1% 8% US$66m Sales revenue down 1% • Weak UK and Spain • Automotive subdued • Offset by new business growth Operating profit down 8% • Deleveraging costs • Restructuring savings Cash flow improvement: lower ca
Slide 11: CHEP Asia-Pacific Results
CHEP ASIA-PACIFIC RESULTS Sales revenue Statutory operating profit Cash flow from operations 4% 6% US$59m Sales revenue up 4% • CHEP Australia: new platforms offset lower pallet volumes • Weak automotive • China, India, South-East Asia, New Zealand sales growth Operating profit down 6% Strong
Slide 12: Sales Revenue by Product Line
SALES REVENUE BY PRODUCT LINE US$m Growth vs. 1H09 37 DMS 4% SDS 15% 69 DPS 1% 258 DMS SDS DPS 71% 19% 10% Growth % calculated on constant currency basis 12
Slide 13: Recall Results
RECALL RESULTS Sales revenue Statutory operating profit Cash flow from operations 1% in line with prior period US$24m Sales revenue down 1% • Growth in core DMS • SDS down 15% • Excluding SDS sales up 4% Statutory operating profit in line with 1H09 • Up 16% excluding SDS • Benefits of FY09 restr
Slide 14: Greg Hayes, Chief Financial Officer
Greg Hayes Chief Financial Officer
Slide 15: 2010 First-Half Results
2010 FIRST-HALF RESULTS Actual Constant 1H10 1H10 1H09 Growth US$m US$m US$m % Continuing operations Sales revenue 2,086.1 2,036.2 2,073.2 (2) Underlying profit 340.2 328.6 469.3 (30) Statutory operating profit 338.1 326.4 337.6 (3) Profit before tax 284.1 272.6 273.9 - Profit after tax 206.7 198.3
Slide 16: Significant Items
SIGNIFICANT ITEMS 1H10 1H09 Actual rates US$m US$m Underlying profit 340.2 469.3 Items within ordinary activities, but unusual due to size and nature: CHEP USA Quality program - (34.5) Walmart net transition impact - (20.2) Items outside the ordinary course of business: Accelerated scrapping of surp
Slide 17: Group Underlying Profit
GROUP UNDERLYING PROFIT US$m 469 19 15 65 23 18 329 1H09 Vol/Price/Mix Automotive/SDS Better Everyday & Direct costs Other 1H10 Quality All numbers are calculated at constant currency 17
Slide 18: Overview
OVERVIEW Actual Constant 1H10 1H10 1H09 Growth US$m US$m US$m % Americas 756.9 756.3 792.5 (5) EMEA 770.1 756.2 761.0 (1) Asia-Pacific 195.0 172.8 166.6 4 Sales revenue 1,722.0 1,685.3 1,720.1 (2) Statutory operating profit 300.4 288.3 274.2 5 Profit margin (%) 17 17 16 Growth % calculated on consta
Slide 19: CHEP Americas – Statutory Operating Profit
CHEP AMERICAS – STATUTORY OPERATING PROFIT US$m 233 34 65 20 99 26 18 16 108 80 1H09 Accelerated Walmart net Pallet quality 1H09 Better Vol, Price & Direct costs Other 1H10 Operating scrapping of transition program Underlying Everyday & Mix Operating profit surplus impact profit Quality profit palle
Slide 20: CHEP EMEA – Statutory Operating Profit
CHEP EMEA – STATUTORY OPERATING PROFIT US$m 3 8 166 8 1 154 1H09 Vol, Price, Mix Automotive Direct costs Other 1H10 All numbers are calculated at constant currency 20
Slide 21: CHEP Asia-Pacific – Statutory Operating Profit
CHEP ASIA-PACIFIC – STATUTORY OPERATING PROFIT US$m 3 2 2 28 27 1H09 Vol, Price & Mix Automotive Other 1H10 (Australia) All numbers are calculated at constant currency 21
Slide 22: Overview
OVERVIEW Actual Constant 1H10 1H10 1H09 Growth US$m US$m US$m % Americas 161.9 159.9 161.2 (1) Europe 95.3 94.4 96.8 (2) RoW 106.9 96.6 95.1 2 Sales revenue 364.1 350.9 353.1 (1) Statutory operating profit 52.5 49.7 49.5 ─ Profit margin (%) 14 14 14 Growth % calculated on constant currency basis 22
Slide 23: Recall – Statutory Operating Profit
RECALL – STATUTORY OPERATING PROFIT US$m 50 1 6 6 1 50 1H09 Vol, Price & Mix SDS Direct Costs Other 1H10 All numbers are calculated at constant currency 23
Slide 24: Cash flow and finance
Cash flow and finance Brambles
Slide 25: Strong Cash Flow
STRONG CASH FLOW US$m Actual rates 1H10 1H09 Change EBITDA 562.1 627.4 (65.3) Capital expenditure (254.6) (400.1) 145.5 Proceeds from disposals 43.6 41.2 2.4 Working capital movement (21.4) (65.5) 44.1 Irrecoverable pooling equipment provision 60.2 36.5 23.7 Provisions / other 10.4 (18.7) 29.1 Cash
Slide 26: Capital Expenditure (PP&E)
CAPITAL EXPENDITURE (PP&E) US$m Actual rates (144) 433 416 377 295 233 1H08 2H08 1H09 2H09 1H10 CHEP Americas CHEP EMEA CHEP Asia-Pacific Recall 26
Slide 27: Financial Ratios
FINANCIAL RATIOS Actual rates Dec 09 Jun 09 Closing net debt (US$m) 2,028.4 2,143.4 Gearing (%) 55.3 60.0 (Net debt/Net debt & equity) Actual rates 1H10 1H09 Covenants EBITDA* / Net finance costs (x) 10.4 9.8 x 3.5 (min) Net debt / EBITDA* (x) 1.8 1.9 x 3.5 (max) * EBITDA is Underlying profit exclud
Slide 28: Credit Facilities & Liquidity
CREDIT FACILITES & LIQUIDITY Ample funding headroom • Undrawn committed credit facilities of US$1,317m • Cash balances of US$118m Investment grade credit ratings issued December 2009 • BBB+ (stable outlook) from Standard & Poor’s • Baa1 (stable outlook) from Moody’s Investor Services 28
Slide 29: Tom Gorman, Chief Executive Officer
Tom Gorman Chief Executive Officer
Slide 30: Outlook
OUTLOOK Outstanding business models • Market position • Customer base • New business pipeline • Long-term growth Positioned for improved performance as economic conditions recover 30
Slide 31: Disclaimer Statement
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 observe such restrict
Slide 32: 2010 Interim Results Analyst presentation
2010 Interim Results Analyst presentation 17 February 2010
Slide 33: Contact Details
CONTACT DETAILS Michael Roberts Vice President, Investor Relations & Corporate Affairs michael.roberts@brambles.com +61 2 9256 5216 +61 418 263 199 James Hall Manager, Investor Relations & Corporate Affairs james.hall@brambles.com +61 2 9256 5262 +61 401 524 645 33