Brambles Limited · ASX:BXB
Brambles — Shareholder Meeting (November 2010)
86 slides from Brambles's shareholder meeting presentation, Nov 18, 2010
Slide 1: 2010 Annual General Meeting
2010 Annual General Meeting Sydney, 18 November
Slide 2: Graham Kraehe AO, Chairman
2010 Annual General Meeting Graham Kraehe AO Chairman
Slide 3: Past 12 months in review
Past 12 months in review New leadership team, solid foundation for growth Subdued underlying economic conditions: USA and Western Europe Solid Brambles performance: • New customer wins • Better Everyday progress • US$750 million public bond issue 3
Slide 4: Solid financial result
Solid financial result Sales revenue up 3%* to US$4.1 billion Operating profit up 1%* to US$725 million After-tax profit up 2%* to US$444 million Total dividend of 25 Australian cents Cash flow from continuing operations up US$160 million to US$882 million * Growth percentages shown on act
Slide 5: Growth strategy
Growth strategy Emphasis on profitable growth Expand reach by product, geography and customer Build on core strengths • Pooling expertise • Information management expertise • Global footprint • Local networks • Customer franchises Strong management and financial position 5
Slide 6: IFCO transaction
IFCO transaction Proposed acquisition of IFCO for €923 million (US$1.3 billion) • Provides RPC pooling services in 23 countries • Operates USA pallet services business Natural fit and unique opportunity for acquisition of scale Earnings per share accretive Merger clearance anticipated within
Slide 7: IFCO transaction (continued)
IFCO transaction (continued) Combined business would have sales revenue of ~US$5 billion, operations in 49 countries Specifically addresses key strategy areas • Expanding global pooling presence in reusable plastic containers (RPCs) • Expanding pallet business with small-to-medium-sized enterpri
Slide 8: Other strategy focus areas
Other strategy focus areas Global container business • Automotive sector • Unitpool acquisition LeanLogistics Recall • Core business • Digital service offering 8
Slide 9: Corporate governance
Corporate governance Board meetings in Australia, the USA, China and Europe Meetings with staff and more than 100 customers Director elections 9
Slide 10: Safety
Safety Performance continues to improve Significant reduction in injuries in FY10 Goal of Zero Harm 10
Slide 11: Sustainability
Sustainability Area of Board attention Sustainability Report published online Five-year sustainability road-map 11
Slide 12: Dividend
Dividend FY09 • Focus on cash conservation • Uncertain global economy FY10 • North America and Western Europe remained subdued • Prudent approach 12
Slide 13: FY10 share price
FY10 share price Total shareholder returns, year ended 30 June 2010 150 140 130 Indexed to 100 120 110 100 90 80 Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- 09 09 09 09 09 09 10 10 10 10 10 10 Brambles S&P/ASX200 Index 13
Slide 14: FY11 share price to date
FY11 share price to date Total shareholder returns, from 1 July 2010 140 130 120 Indexed to 100 110 100 90 80 1-Jul-10 16-Jul- 31-Jul- 15-Aug- 30-Aug- 14-Sep- 29-Sep- 14-Oct- 29-Oct- 13-Nov- 10 10 10 10 10 10 10 10 10 Brambles S&P/ASX200 Index 14
Slide 15: Trading update
Trading update Solid performance: strong foundation from CHEP and Recall Board confident in growth capacity All four business units increased constant currency sales revenue in first four months of FY11 On track for FY11 guidance (June 2010 FX rates) • Constant currency sales revenue increas
Slide 16: Conclusion
Conclusion Thank you An exciting time for Brambles Considerable growth opportunities Proposed IFCO acquisition 16
Slide 17: Tom Gorman, Chief Executive Officer
2010 Annual General Meeting Tom Gorman Chief Executive Officer
Slide 18: First 12 months recap
First 12 months recap Customer focus Profitable growth Deliver for customers, shareholders and employees 18
Slide 19: IFCO acquisition
IFCO acquisition Growth in line with strategic themes • Diversify revenue by platform, geography and customer • Build on our core strengths Would create a globally active leader in RPCs • Broad base in Europe • Strong position in Americas Strengthened pallet operations in USA • Broader service
Slide 20: Delivering on commitments: Better Everyday
Delivering on commitments: Better Everyday Better Everyday in CHEP USA • 100% of pallet issues at highest ever repair specification • Majority of CHEP USA customers using PortfolioPlus • Rollout of simplified invoice underway • Net new business wins positive 20
Slide 21: Delivering on commitments: emerging economies
Delivering on commitments: emerging economies Emerging economy sales revenue growth • China and India: 92% • Central & Eastern Europe: 24% • Brazil: 32% • Turkey contracts with Unilever and Procter & Gamble 21
Slide 22: Delivering on commitments: Recall
Delivering on commitments: Recall Recall • Benefits from FY09 cost reduction initiatives • Continued growth • Solid margin expansion • Exceeding cost of capital, BVA positive 22
Slide 23: Delivering on commitments: Zero Harm
Delivering on commitments: Zero Harm Zero Harm • Reduction in injury frequency rate • New three-year safety strategy – Regional safety leadership – Standard scorecard 23
Slide 24: Delivering on commitments: innovation
Delivering on commitments: innovation Head of Innovation on Executive Leadership Team Internal process to accelerate opportunities • Internal innovation fund Key initiatives • Working directly with customers – Product development – Supply chain efficiencies – Logistics expertise 24
Slide 25: Sales revenue growth: Recall
Sales revenue growth: Recall Expansion of largest service offering, Document Management Solutions Announcement of significant multi-year partnership with Barclays Bank • Managing UK-based retail bank national records centres • Move for Barclays from multiple to single-source providers • Agreemen
Slide 26: Sales revenue growth: CHEP Asia-Pacific
Sales revenue growth: CHEP Asia-Pacific Underlying strength of Australia and New Zealand operations Continuing expansion in emerging economies Recent customer wins include: • Tesco, General Mills and Midea in China • Food company Del Monte and drinks group Pernod Ricard in India • Australia gr
Slide 27: Sales revenue growth: CHEP EMEA
Sales revenue growth: CHEP EMEA Emerging economy growth Developed economies • New and expanded contracts with major customers • New customers in new segments Expansion of major Nestlé relationship in UK First RPC contract in UK foodservice sector • Nando’s restaurant chain • Issuing ~1 milli
Slide 28: Sales revenue growth: CHEP Americas
Sales revenue growth: CHEP Americas Momentum remains since Better Everyday • Unilever North America – Extended contract • Treehouse Foods – Major private label food producer – Extended contract Positive momentum 28
Slide 29: CHEP USA evolution
CHEP USA evolution CHEP USA 20th anniversary Historic growth from major retailers, branded FMCG Business is evolving • Strengthening sales and logistics approach to target smaller customers • 1,000-plus contracts with SMEs in FY10, up 13% IFCO proposal increases this opportunity 29
Slide 30: Growth strategies
Growth strategies RPCs • IFCO transaction is optimal solution Automotive • Base from Asia-Pacific and EMEA • Pursuing opportunities in North America • Considerable opportunities in emerging economies • Intercontinental flows 30
Slide 31: Growth strategies: global containers
Growth strategies: global containers Global containers – aviation • Acquisition of Unitpool for US$35 million • Provider of container pooling services in airline sector • Manages containers used to carry baggage and cargo • Well-placed in growing sector Opportunities in intermediate bulk contain
Slide 32: Growth strategies: LeanLogistics
Growth strategies: LeanLogistics LeanLogistics • Sales revenue up 30% since acquired by Brambles • Expanding into new countries – First major customer in Canada, Air Canada – Opportunities in Europe, Australia and Brazil • Working more closely with CHEP 32
Slide 33: Growth strategies: Recall
Growth strategies: Recall Recall • Continues to grow • Ongoing investment – New information centres – IT and security systems 33
Slide 34: Conclusion
Conclusion Pursuing growth with confidence A great company, a proud history, a bright future Numerous opportunities Thank you 34
Slide 35: Annual General Meeting
2010 Annual General Meeting Sydney, 18 November
Slide 36: Luke Mayhew, Chairman of the Remuneration Committee
2010 Annual General Meeting Luke Mayhew Chairman of the Remuneration Committee
Slide 37: Executive remuneration policy
Executive remuneration policy Objective • Reinforce business strategy • Attract and retain high-calibre executives • Motivate executives to achieve challenging performance levels • Reward success • Align executive rewards with creation of shareholder value 37
Slide 38: Executive remuneration policy: incentive plans
Executive remuneration policy: incentive plans Current scheme approved at 2006 and 2008 AGMs No changes proposed for FY11 Brambles will review executive remuneration policy in FY11 38
Slide 39: Executive Director remuneration structure
Executive Director remuneration structure At risk remuneration (67%) Fixed remuneration (33%) Salary At risk LTI shares (37%) Includes superannuation, car, Vesting over three years; healthcare etc Fixed performance hurdles for At risk shares related to TSR and shares sales revenue/BVA Fixed At Risk
Slide 40: Remuneration outcomes and decisions
Remuneration outcomes and decisions Modest salary increases for senior executives for FY11 Short-term cash bonus and deferred share awards reflected company performance Long-term incentives did not vest in FY09 or FY10 Current long-term incentives require improved performance to vest 40
Slide 41: Remuneration outcomes and decisions (continued)
Remuneration outcomes and decisions (continued) Executive appointments and departures have followed approved Plan Rules, existing contracts and accepted market practice Non-executive Director’ fees aligned to market rates • Fees last changed in January 2006 • Australian Non-executive Directors’
Slide 42: MyShare – good progress
MyShare – good progress 22% of employees in 25 countries have elected to participate First matching shares will be issued in March 2011 MyShare will again be offered in FY11 42
Slide 43: Summary
Summary Incentive and deferred share awards for FY10 reflect company performance Long-term incentives will require improved performance to vest Remuneration policy and associated Plan Rules have been followed Continued progress on wider employee shareholding Brambles to revisit executive r
Slide 44: Annual General Meeting
2010 Annual General Meeting Sydney, 18 November
Slide 45: How to ask a question
How to ask a question Go to a designated microphone Show your green voting card or red non-voting card Give the attendant your name Wait until you have been introduced to the meeting 45
Slide 46: Annual General Meeting
2010 Annual General Meeting Sydney, 18 November
Slide 47: Voting procedure
Voting procedure Brambles
Slide 48: Item 1: Financial, Directors' and Auditors' Reports
Item 1 To consider and receive the Financial Report, Directors’ Report and Auditors’ Report for Brambles and the Group for the year ended 30 June 2010. 48
Slide 49: Item 2: Adopt the Remuneration Report
Item 2 As an ordinary resolution “To adopt the Remuneration Report for Brambles and the Group for the year ended 30 June 2010.” 49
Slide 50: Proxies and direct votes received
Proxies and direct votes received Resolution 2 To adopt the Remuneration Report For Discretionary Against Abstain Proxy votes 993,419,148 9,111,616* 7,467,463 1,062,975 Direct votes 1,628,727 N/A 1,961,026 278,789 TOTAL 995,047,875 9,111,616* 9,428,489 1,341,764 *Includes 6,647,167 votes directed to
Slide 51: Mark your voting card
Mark your voting card For Against Abstain 2. To adopt the Remuneration Report 51
Slide 52: Items 3 – 5
2010 Annual General Meeting Items 3 – 5 Election and Re-election of Directors
Slide 53: Item 3: Election of Mr Thomas Joseph Gorman
Item 3 Election of Mr Thomas Joseph Gorman 53
Slide 54: Resolution: elect Mr Thomas Joseph Gorman
Item 3 As an ordinary resolution “That Mr Thomas Joseph Gorman be elected to the Board of Brambles.” 54
Slide 55: Proxies and direct votes received
Proxies and direct votes received Resolution 3 To elect Mr Thomas Joseph Gorman to the Board of Brambles For Discretionary Against Abstain Proxy votes 1,001,020,675 9,202,120* 547,196 290,750 Direct votes 3,336,347 N/A 275,596 255,849 TOTAL 1,004,357,022 9,202,120* 822,792 546,599 *Includes 6,688,80
Slide 56: Mark your voting card
Mark your voting card For Against Abstain 3. To elect Mr Thomas Joseph Gorman to the Board of Brambles 56
Slide 57: Item 4: Election of Mr Gregory John Hayes
Item 4 Election of Mr Gregory John Hayes 57
Slide 58: Resolution: elect Mr Gregory John Hayes
Item 4 As an ordinary resolution “That Mr Gregory John Hayes be elected to the Board of Brambles.” 58
Slide 59: Proxies and direct votes received
Proxies and direct votes received Resolution 4 To elect Mr Gregory John Hayes to the Board of Brambles For Discretionary Against Abstain Proxy votes 1,000,949,125 9,200,332* 592,604 318,680 Direct votes 3,276,340 N/A 273,683 317,769 TOTAL 1,004,225,465 9,200,332* 866,287 636,449 *Includes 6,687,012
Slide 60: Mark your voting card
Mark your voting card For Against Abstain 4. To elect Mr Gregory John Hayes to the Board of Brambles 60
Slide 61: Item 5: Re-election of Mr Christopher Luke Mayhew
Item 5 Re-election of Mr Christopher Luke Mayhew 61
Slide 62: Resolution: re-elect Mr Christopher Luke Mayhew
Item 5 As an ordinary resolution “That Mr Christopher Luke Mayhew be re-elected to the Board of Brambles.” 62
Slide 63: Proxies and direct votes received
Proxies and direct votes received Resolution 5 To re-elect Mr Christopher Luke Mayhew to the Board of Brambles For Discretionary Against Abstain Proxy votes 1,000,753,743 9,208,547* 795,885 299,181 Direct votes 3,232,826 N/A 333,554 301,412 TOTAL 1,003,986,569 9,208,547* 1,129,439 600,593 *Includes
Slide 64: Mark your voting card
Mark your voting card For Against Abstain 5. To re-elect Mr Christopher Luke Mayhew to the Board of Brambles 64
Slide 65: Items 6 – 7
2010 Annual General Meeting Items 6 – 7 Participation of Executive Directors in MyShare plan
Slide 66: Resolution: Gorman participation in MyShare Plan
Item 6 As an ordinary resolution “That the participation by Mr Thomas Joseph Gorman until 18 November 2013 in the Brambles Limited MyShare Plan in the manner set out in the Explanatory Notes accompanying this Notice, be approved for all purposes, including for the purpose of Australian Securities Ex
Slide 67: Proxies and direct votes received
Proxies and direct votes received Resolution 6 To approve participation by Mr Thomas Joseph Gorman in the MyShare Plan For Discretionary Against Abstain Proxy votes 998,403,206 9,173,104* 3,058,383 405,881 Direct votes 1,751,687 N/A 1,973,394 148,054 TOTAL 1,000,154,893 9,173,104* 5,031,777 553,935
Slide 68: Mark your voting card
Mark your voting card For Against Abstain 6. To approve participation by Mr Thomas Joseph Gorman in the MyShare Plan 68
Slide 69: Resolution: Hayes participation in MyShare Plan
Item 7 As an ordinary resolution “That the participation by Mr Gregory John Hayes until 18 November 2013 in the Brambles Limited MyShare Plan in the manner set out in the Explanatory Notes accompanying this Notice, be approved for all purposes, including for the purpose of Australian Securities Exch
Slide 70: Proxies and direct votes received
Proxies and direct votes received Resolution 7 To approve participation by Mr Gregory John Hayes in the MyShare Plan For Discretionary Against Abstain Proxy votes 998,092,308 9,320,083* 3,227,994 420,356 Direct votes 1,715,477 N/A 2,004,893 152,765 TOTAL 999,807,785 9,320,083* 5,232,887 573,121 *Inc
Slide 71: Mark your voting card
Mark your voting card For Against Abstain 7. To approve participation by Mr Gregory John Hayes in the MyShare Plan 71
Slide 72: Items 8 – 9
2010 Annual General Meeting Items 8 – 9 Participation of Executive Directors in performance share plan
Slide 73: Resolution: Gorman participation in Performance Share Plan
Item 8 As an ordinary resolution “That the participation by Mr Thomas Joseph Gorman until 18 November 2013 in the Brambles Limited 2006 Performance Share Plan (as amended) in the manner set out in the Explanatory Notes accompanying this Notice, be approved for all purposes, including for the purpose
Slide 74: Proxies and direct votes received
Proxies and direct votes received Resolution 8 To approve participation by Mr Thomas Joseph Gorman in the 2006 Performance Share Plan For Discretionary Against Abstain Proxy votes 986,526,660 9,295,643* 14,289,644 948,794 Direct votes 1,493,160 N/A 2,222,550 157,425 TOTAL 988,019,820 9,295,643* 16,5
Slide 75: Mark your voting card
Mark your voting card For Against Abstain 8. To approve participation by Mr Thomas Joseph Gorman in the 2006 Performance Share Plan 75
Slide 76: Resolution: Hayes participation in Performance Share Plan
Item 9 As an ordinary resolution “That the participation by Mr Gregory John Hayes until 18 November 2013 in the Brambles Limited 2006 Performance Share Plan (as amended) in the manner set out in the Explanatory Notes accompanying this Notice, be approved for all purposes, including for the purpose o
Slide 77: Proxies and direct votes received
Proxies and direct votes received Resolution 9 To approve participation by Mr Gregory John Hayes in the 2006 Performance Share Plan For Discretionary Against Abstain Proxy votes 986,475,820 9,295,593* 14,329,228 960,100 Direct votes 1,487,040 N/A 2,226,670 159,425 TOTAL 987,962,860 9,295,593* 16,555
Slide 78: Mark your voting card
Mark your voting card For Against Abstain 9. To approve participation by Mr Gregory John Hayes in the 2006 Performance Share Plan 78
Slide 79: Item 10: Amendments to the Constitution
2010 Annual General Meeting Item 10 Amendments to the Constitution
Slide 80: Resolution: amend the constitution
Item 10 As a special resolution “That the Brambles constitution be amended as outlined in the Explanatory Notes accompanying this Notice.” 80
Slide 81: Proxies and direct votes received
Proxies and direct votes received Resolution 10 Amendments to the constitution For Discretionary Against Abstain Proxy votes 975,925,650 9,403,940* 24,940,872 788,094 Direct votes 3,094,099 N/A 449,188 317,528 TOTAL 979,019,749 9,403,940* 25,390,060 1,105,622 *Includes 6,900,123 votes directed to th
Slide 82: Mark your voting card
Mark your voting card For Against Abstain 10. Amendments to the constitution 82
Slide 83: Annual General Meeting
2010 Annual General Meeting Sydney, 18 November
Slide 84: Please deposit voting cards at exit
2010 Annual General Meeting Please deposit voting cards at exit
Slide 85: The poll is now closed
2010 Annual General Meeting The poll is now closed
Slide 86: Disclosure statement
Disclosure 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