Brambles Reports Continued Growth in Q3

Brambles Limited today reported sales revenue for the nine months ended March 2011 of US$3,273 million, up 5%1 compared with the prior corresponding period, reflecting growth in all business units. Constant currency sales revenue growth was 4%.

Brambles CEO Tom Gorman said: “Our continued growth reflects new business wins throughout Brambles as we gain customers by focusing on improved service and quality, and pursue our strategy of expanding by product and geography. However, conditions in our largest European markets remain challenging and the recovery in consumer activity in the USA has been modest to date.”

In the nine months ended March 2011, Brambles’ sales revenue by business unit compared with the prior corresponding period was:

  • CHEP Americas’ sales revenue was US$1,195 million, up 5%. This reflected new business growth in the USA and Canada and continued strong growth in Latin America. Constant currency sales revenue growth was 3%.
  • CHEP Europe, Middle East & Africa’s sales revenue was US$1,143 million, up 1%. Growth remained strong in Germany, Italy, Central & Eastern Europe and Middle East & Africa. However, growth rates were constrained in the UK, Spain and France as a result of the challenging market conditions. Constant currency sales revenue growth was 4%.
  • CHEP Asia-Pacific’s sales revenue was US$339 million, up 15%, primarily reflecting the strength of the Australian dollar. Volume growth was strong in the developing businesses in China, India and South-East Asia. Constant currency sales revenue growth was 5%.
  • Recall’s sales revenue was US$596 million, up 8%, mostly as a result of business growth in the Americas, Europe and Asia. Carton volume growth was 6% in the Document Management Solutions service line. Constant currency sales revenue growth was 5%.
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    Outlook for the 2011 financial year

    Subject to unforeseen circumstances, Brambles continues to target the midpoint of its guidance range for operating profit before interest costs and tax of between US$740 million and US$780 million, at 30 June 2010 exchange rates.

    This guidance is prior to the contribution of IFCO Systems, which Brambles will consolidate in its results for the three months ending 30 June 2011. IFCO’s results for the three months to March 2011 were consistent with Brambles expectations. For the three months ending June2011, Brambles expects IFCO to contribute operating profit before interest costs and tax of between US$35 million and US$40 million, at 30 June 2010 exchange rates.

    Mr Gorman said: “Our momentum is positive. The newly-acquired IFCO business is performing strongly and integration is progressing well. We will confirm our expectations for synergies at our full-year results in August. Throughout Brambles, we are growing in all regions. This includes winning back volumes with several key customers in CHEP USA, including ConAgra and Dole,
    while we are making good progress with growing our business in the automotive sector in the USA.

    “However, market conditions, including in relation to pricing and competition, remain challenging in Brambles’ key markets. We are experiencing higher costs as a result of inflationary pressures and our increased investment in quality and in developing and growing our business.”

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