Brambles Forecasts Continued Growth

Brambles generated sales revenue of US$5,625.0 million in the 2012 financial year ended 30 June 2012, up 20%, primarily reflecting a 12-month contribution from the IFCO businesses acquired in late March 2011, business wins in the Pallets and Reusable Plastic Crates (RPCs) segments and growth in emerging markets.

On a pro forma basis, adjusting for the impact of acquisitions, sales revenue was up 6%, demonstrating the capacity of the business to expand despite weak economic conditions. Net new business growth contributed US$184 million, or 3%, pro forma sales revenue growth.

“We have delivered another year of strong sales and profit growth despite unsupportive economic conditions in our largest markets, reflecting both the resilience of our underlying business and the momentum we have with our growth strategy,” said CEO Tom Gorman. “While this growth strategy requires capital investment and increased operating expenditure as we expand our operations in less developed segments and regions, we believe that now is the right time to continue to invest in growing and developing our business for the future.

“We are confident of delivering continued strong sales growth in new segments and emerging markets in the 2013 financial year and we expect improving returns from this growth in 2014 as these opportunities reach a greater level of scale and efficiency and we deliver cost reductions in our established operations.”

The delivery of sales growth throughout the business and improved margins in the Americas region of the Pallets segment were the main drivers of profit growth. This offset the impact of reduced profitability in the Europe, Middle East & Africa region and investment in business development programs. Cash capital expenditure on property, plant and equipment was US$949.4 million, up US$184.7 million, including a full-year of investment in the RPCs segment and the start of the company’s two-year US$550 million growth capital expenditure program. As a result of higher capital expenditure and movements in working capital and provisions, cash flow from operations was down US$133.9 million to US$591.2 million.

“The Recall information management business, which was withdrawn from the divestment process in June 2012, delivered strong Underlying profit growth in line with our guidance range in the 2012 financial year,,” said Gorman. “We expect Recall to deliver modest growth in the 2013 financial year at profit margins comparable to 2012. Although global economic conditions remain challenging, the majority of Brambles’ customers operate in the consumer staples sector, which is relatively resilient to economic volatility. This provides a robust base on which we can continue to deliver our growth strategy.”

Brambles expects continued sales revenue growth in all segments in the 2013 financial year, with underlying profit of US$1,010 million to US$1,070 million, at 30 June 2012 foreign exchange rates, an increase of between 4% and 10%. All forecasts are subject to unforeseen circumstances and economic uncertainty and exclude Significant items.

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