FY 2010: Brambles Reports Strong Cash Flow and Platform for Growth

Brambles Limited has eported sales revenue of US$4,146.8 million for the financial year ended 30 June 2010, up 3% on the prior corresponding period. Statutory operating profit before finance costs and tax was US$724.5 million, up 1%. Statutory profit after tax was US$443.9 million, up 2%. Cash flow was strong, reflecting tight financial controls and a reduction in capital expenditure. Cash flow from continuing operations increased US$159.9 million to US$882.3 million. Free cash flow after dividends increased US$202.2 million to US$344.1 million.

The Board has declared a final dividend of 12.5 Australian cents per share.

Brambles’ CEO Tom Gorman said: “This result, in particular the strong cash flow performance and our robust balance sheet, highlights Brambles’ stability and resilience during a period of continued challenging economic conditions. We are focused on driving the next phase of growth.

“Our growth in sales revenue in the 2010 financial year of 3% was driven by CHEP Europe, Middle East and Africa (EMEA), CHEP Asia-Pacific and Recall, which offset the impact on the group’s financial results of a decline in sales revenue in CHEP Americas.

“Brambles delivered a 6% increase in second-half sales revenue compared with the same period in the 2009 financial year as established and developing regions generated new business, balancing subdued underlying conditions in some regions.

“Developing CHEP regions including China, India, Central and Eastern Europe and the Middle East delivered particularly strong growth rates. Investment in these CHEP regions is ongoing, along with other growth initiatives throughout the group.

“The Better Everyday program has delivered a higher pallet quality standard to CHEP USA customers. This initiative, which began in October 2009, has positioned CHEP USA for future profitable growth and enabled it to regain positive sales momentum.

New Business Wins

Brambles’ net new business wins in the 2010 financial year were US$53 million, reflecting a solid win rate in CHEP EMEA and CHEP Asia-Pacific and a strong contribution from Recall. The annualised value of net new business won during the period was positive in all business units, totalling US$75 million. Since the introduction of the Better Everyday program in October 2009, the annualised value of net new business wins for CHEP USA has been US$18 million.

Outlook

Mr Gorman said: “Brambles is in robust financial shape and is well-placed to build on its global footprint and strong underlying business to generate growth in sales revenue and profit. Subject to unforeseen circumstances and ongoing economic uncertainty, Brambles expects statutory operating profit before interest costs and tax to be between US$740 million and US$780 million4 in the 2011 financial year.”

To read the complete preliminary report, Investor Presentation”>click here.

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