Brambles Limited · ASX:BXB
Brambles — H1 2009 Earnings Presentation
30 slides from Brambles's earnings presentation, Feb 16, 2009
Slide 1: 2009 Interim Results
2009 Interim Results 16 February 2009
Slide 2: Mike Ihlein, Chief Executive Officer
2009 Interim Results Mike Ihlein Chief Executive Officer
Slide 3: Delivering revenue growth despite challenging conditions
Delivering revenue growth despite challenging conditions Sales revenue up 4% despite challenging conditions Underlying profit in line with prior year and margins of 23% Winning new business – sales pipeline strong Solid operating cash flow continues Demonstrates strength of the CHEP and Re
Slide 4: 1H09 Overview
1H09 Overview Sales up 4% to US$2.073 billion Underlying profit in line with last year US$469.3 million Earnings per share down 6% (actual fx rates) to 19.5 US cents Cash flow from operations US$220.8 million Significant items before tax of US$131.7 million Statutory operating profit of
Slide 5: New business delivering revenue growth
New business delivering revenue growth Revenue growth in all regions of CHEP and Recall • CHEP Americas +4% • CHEP EMEA +3% • CHEP Asia-Pacific +1% • Recall +4% New business being won in all markets Price/mix offsetting declines in core volume in USA/Europe Success in key targets of USA beve
Slide 6: Major initiatives to underpin future performance
Major initiatives to underpin future performance Not immune from dramatic economic slowdown Focus on discretionary costs and capital expenditure Taking actions now to underpin future performance Three major initiatives • Accelerated scrapping of 7 million excess pallets in CHEP USA • Increas
Slide 7: Accelerated scrapping of 7 million excess pallets
Major initiatives to underpin future performance Accelerated scrapping of 7 million excess pallets in USA • Excess due to rapid and deep economic downturn • US$99 million charge (before tax) in 1H09 (non-cash US$37 million) • Assumes lumber recovery for future repairs • Avoid significantly higher
Slide 8: Increase investment in CHEP USA pallet quality program
Major initiatives to underpin future performance Increase investment in CHEP USA 2 year pallet quality program by US$60m to US$160m Positive customer response • US$25m in 2H08 (US$21m opex) • US$38m in 1H09 (US$35m opex) • US$62m in 2H09 (US$40m opex) • US$35m in 1H10 (opex) (program end) • Majo
Slide 9: Rationalisation of facilities and operations
Major initiatives to underpin future performance Rationalisation of facilities and operations across the Group • Personnel reduction of 750 (approx) over next 12 months • One-off cost of US$60 - 70 million (before tax) – mainly FY09 • Annualised savings US$40 - 50 million Improve future cost str
Slide 10: 2009 Interim Results
2009 Interim Results 16 February 2009
Slide 11: Liz Doherty, Chief Financial Officer
2009 Interim Results Liz Doherty Chief Financial Officer
Slide 12: Underlying and Statutory operating profit
Underlying and Statutory operating profit $USm Actual rates AIFRS 1H09 1H08 Underlying profit 469.3 497.3 Items outside the ordinary course of business: Foreign exchange gain on capital repatriation 29.9 - Restructuring costs (106.9) (6.6) Items within ordinary activities, but unusual due to size an
Slide 13: 2009 Interim Results summary
2009 Interim Results Actual Constant 1H09 1H09 1H08 Growth AIFRS US$m US$m US$m % Continuing operations Sales revenue 2,073.2 2,185.8 2,110.2 4 Underlying profit 469.3 496.2 497.3 0 PBT 405.6 428.0 426.4 0 PAT 270.5 285.4 293.8 (3) EPS (cents) 19.5 20.6 20.7 0 Cash flow from operations 220.8 265.7 U
Slide 14: Sales revenue
Sales revenue Actual Constant 1H09 1H09 1H08 AIFRS Growth % US$m US$m US$m CHEP Americas 792.5 810.4 776.4 4 CHEP EMEA 761.0 815.1 790.8 3 CHEP Asia-Pacific 166.6 188.0 185.3 1 CHEP 1,720.1 1,813.5 1,752.5 3 Recall 353.1 372.3 357.7 4 Total sales revenue 2,073.2 2,185.8 2,110.2 4 Growth % calculated
Slide 15: Underlying profit
Underlying profit Actual Constant 1H09 1H09 1H08 Growth AIFRS US$m US$m US$m % CHEP Americas 233.3 240.0 227.7 5 CHEP EMEA 170.9 183.4 189.8 (3) CHEP Asia-Pacific 28.9 34.1 45.6 (25) CHEP 433.1 457.5 463.1 (1) Recall 50.5 53.8 52.2 3 Unallocated Brambles HQ costs (14.3) (15.1) (18.0) 16 Underlying p
Slide 16: CHEP Americas – Underlying profit
CHEP Americas – Underlying profit US$m 27 2 12 1 240 228 1H08 Vol, Price & Mix Transport Costs Plant costs Other 1H09 All numbers are calculated at constant currency 16
Slide 17: CHEP EMEA – Underlying profit
CHEP EMEA – Underlying profit US$m 23 12 9 190 9 183 1H08 Vol, Price & Mix Transport Costs Plant costs Other 1H09 All numbers are calculated at constant currency 17
Slide 18: CHEP Asia-Pacific – Underlying profit
CHEP Asia-Pacific – Underlying profit US$m 46 0 2 5 5 34 1H08 Vol, Price & Mix Transport Costs Plant costs Other 1H09 All numbers are calculated at constant currency 18
Slide 19: Recall
Recall Actual Constant 1H09 1H09 1H08 Growth AIFRS US$m US$m US$m % Americas 161.2 164.6 162.3 1 Europe 96.8 101.8 93.3 9* RoW 95.1 105.9 102.1 4 Sales revenue 353.1 372.3 357.7 4 Underlying profit 50.5 53.8 52.2 3 Profit margin (%) 14 14 15 * Recall Europe 1H09 sales revenue includes GADSA which wa
Slide 20: Significant items
Significant items $USm Actual rates AIFRS 1H09 1H08 Underlying profit 469.3 497.3 Items outside the ordinary course of business: Foreign exchange gain on capital repatriation 29.9 - Restructuring costs (106.9) (6.6) Items within ordinary activities, but unusual due to size and nature: Walmart net tr
Slide 21: Solid cash flow
Solid cash flow AIFRS $USm Actual rates 1H09 1H08 Change Underlying profit 469.3 497.3 (28.0) Significant items within ordinary activities (54.7) - (54.7) Depreciation and amortisation 212.8 222.6 (9.8) EBITDA 627.4 719.9 (92.5) Capital expenditure (400.1) (451.8) 51.7 Proceeds from disposals 41.2 6
Slide 22: Capital expenditure by category
Capital expenditure by category US$m Actual rates Pallets Containers Other 17% 17% 400 23 11% 11% 377 21 72% 72% 42 314 40 274 1H09 Cash Accrual FY09 Recall Land and P&E Pooling Containers / Pallets Movement Additions Other 22
Slide 23: Capital expenditure by business
Capital expenditure by business US$m Actual rates 1H08 $433m 1H09 $377m 5% 10% 6% 17% 37% 41% 48% 36% CHEP Americas CHEP EMEA CHEP Asia-Pacific Recall 23
Slide 24: Effective tax rate
Effective tax rate Actual Actual 1H09 1H08 AIFRS US$m US$m Underlying PBT 405.6 426.4 Tax 135.1 132.6 Underlying effective tax rate % of PBT 33.3% 31.1% Adjustment for non-recurring items - 1.9% Adjusted effective tax rate 33.3% 33.0% Significant items (4.6%) (2.5%) Statutory tax rate 28.7% 30.5% 24
Slide 25: Financial ratios
Financial ratios AIFRS, Actual rates Dec 08 Jun 08 Closing Net Debt (US$m) 2,357.0 2,426.2 Gearing (%) 65.3 61.1 (Net Debt/Net Debt & Equity) AIFRS, Actual rates 1H09 1H08 Covenants EBITDA* / Net finance costs (x) 9.8 10.2 x 3.5 (min) Net Debt / EBITDA* (x) 1.9 1.5 x 3.5 (max) * EBITDA is Underlying
Slide 26: Credit facilities and liquidity
Credit facilities and liquidity US$3.3bn of committed credit facilities with an average term to maturity of approximately 3 years Undrawn committed credit facilities of US$0.9bn plus cash of US$0.1bn US$1.0bn refinanced in last 6 months US$1.5bn of bank facilities due for renewal by November
Slide 27: Mike Ihlein, Chief Executive Officer
2009 Interim Results Mike Ihlein Chief Executive Officer
Slide 28: Outlook
Outlook Grew revenues despite challenging environment Sharp deterioration in trading conditions since AGM Volatile environment to remain for some time Difficult to provide outlook guidance with confidence New business wins and major initiatives to underpin future performance Balance shee
Slide 29: 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 30: 2009 Interim Results
2009 Interim Results 16 February 2009