Sydney – 10 October 2019: Brambles Limited has reported sales revenue from continuing operations of US$1,159.0 million for the first three months of the financial year ending 30 June 2020 (FY20), representing an increase of 5% at constant FX rates and an increase of 2% at actual FX rates. The difference between actual and constant FX growth reflects the strengthening of Brambles’ reporting currency, the US dollar, relative to all other operating currencies.
By segment, first-quarter CHEP sales revenue performance at constant FX was as follows:
– CHEP Americas sales revenue increased 7% largely reflecting higher price realization across the region, particularly in Latin America, rollover benefits from US pallet contracts won in the prior year and solid like-for-like volume growth in the US and Latin America.
– CHEP EMEA sales revenue increased 4% driven by net new business wins in European pallets and modest price realization across the region. Like-for-like volumes were broadly flat reflecting economic conditions in Europe.
– CHEP Asia-Pacific sales revenue increased 2% as like-for-like volume growth and price realization in the pallets business offset lower RPC volumes following a contract loss in Australia.
“Our first-quarter sales performance reflects pricing discipline and ongoing volume momentum despite increasing macroeconomic uncertainty in our major markets, stated Brambles’ CEO Graham Chipchase.
“Growth in CHEP Americas was particularly strong, driven by volume and price growth to cover cost increases in US pallets and the rollover benefit of Latin America pricing actions taken in the fourth quarter of FY19 to cover a higher cost-to-serve in the region. We continue to make good progress with our US automation and procurement programs and we remain on track to deliver an annual one percentage point of US margin improvement in each of FY20, FY21, and FY22.
“As anticipated at the FY19 result, like-for-like volumes in the European pallet and automotive businesses moderated in the first quarter reflecting challenging macroeconomic conditions in the region. Notwithstanding this economic context, our European pallets business delivered solid levels of net new business growth as it continues to convert new customers to our share-and-reuse solutions.
“Our FY20 guidance provided at the FY19 result remains unchanged. On a constant-FX basis, we continue to expect sales revenue growth to be at the lower end of our mid-single-digit objective and Underlying Profit to be in line with, or slightly above sales revenue growth, including the impact of the new leasing standard, AASB 16.”
Investors responded positively to the 1Q results, pushing shares in Brambles up 3.5 per cent to $11.40 on Thursday.
The company’s stock price has been soft in recent weeks, the Sydney Morning Herald reported, following a cautious outlook for the new financial year expressed in its annual results last month. Year-to-date, the Brambles share price is now up slightly more than 12%, lagging the ASX 200 only somewhat.