Brambles’ first-quarter trading update: Constant-currency sales revenue growth of 6%

Brambles Limited has reported sales revenue from continuing operations of US$1,374.0 million for the first three months of the financial year ending 30 June 2018 (FY18), representing an increase on the prior corresponding period of 8% at actual FX rates and 6% at constant currency.

Sales revenue growth in the first quarter primarily reflected the following trends by segment:

– In CHEP Americas, sales revenue in the US pallets business increased by 4% primarily driven by strong net new business growth associated with new customer contract wins in the last quarter of FY17 and the first quarter of FY18. Like-for-like volume of 1% was in line with historic trends while pricing remained flat. In Latin America, the pallets business continued to expand with both new and existing customers and delivered constant-currency growth of 12%;

– In CHEP EMEA, the European pallets business delivered strong volume growth driven by net new business wins and solid existing customer demand in Western Europe. The pallets businesses in Africa, India and the Middle East and the European automotive business also made a solid contribution to growth in the quarter;

– As highlighted in the FY17 result presentation, lower revenues in CHEP Asia-Pacific reflected the wind down of a large RPC contract and a number of automotive contracts in Australia; and
– Following a particularly strong FY17 performance, IFCO continued to expand with existing retailers in Europe and delivered mix benefits in North America.

Brambles’ CEO Graham Chipchase said: “Group sales revenue in the first quarter was solid and is in line with our expectation for mid-single digit revenue growth through the cycle.

“Our pallet and RPC businesses in Europe are expanding strongly and we continue to make good progress in emerging markets such as Latin America. It is also pleasing to see the momentum established in our US pallets business during the last quarter of FY17 continue into the first quarter.

“We continue to operate in a challenging operating and competitive environment, with cost pressures across our portfolio, particularly in our US pallets business. In this context, we are focused on leveraging our global expertise to mitigate network cost inflation and strengthen our competitive advantage.”

By segment, Brambles sales revenue for the first three months of FY18 was: