TIDMBXB
RNS Number : 5231E
Brambles Limited
22 December 2009
Brambles Limited
Company Number: 118 896 021
22 December 2009
CREDIT RATING
Brambles announces that Moody's and Standard and Poor's have today issued a
credit rating for Brambles. A copy of the releases are enclosed.
For further information please contact:
+------------------------------------+----------------------------------+
| Investors & Media: | |
+------------------------------------+----------------------------------+
| Michael Roberts | James Hall |
| Vice President | Manager |
| Investor Relations & Corporate | Investor Relations & Corporate |
| Affairs | Affairs |
| +61 2 9256 5216 | +61 2 9256 5262 |
| +61 418 263 199 | +61 401 524 645 |
| michael.roberts@brambles.com | james.hall@brambles.com |
| | |
+------------------------------------+----------------------------------+
Brambles is globally headquartered in Australia
Robert Gerrard
Group Company Secretary
For further information on Brambles and all company announcements, presentations
and webcasts, please visit the company website www.brambles.com.
Moody's
Global Credit Research
Rating Action
22 DEC 2009
Rating Action: Brambles Ltd.
Moody's assigns first-time Baa1/P-2 ratings to Brambles; outlook stable
Approximately US$ 3.4 billion in debt securities affected
Sydney, December 22, 2009 -- Moody's Investors Service has today assigned a Baa1
issuer rating and P-2 short-term rating to Brambles Limited. In addition,
Moody's has assigned Baa1 senior unsecured ratings to Brambles' capital market
and bank debt.
This is the first time that Moody's has rated Brambles. The outlook on all
ratings is stable.
"Brambles' Baa1 rating is driven by the company's significant global footprint
and scale and its strong position within major FMCG "Fast Moving Consumer Goods"
supply chains," says Ian Lewis, a Moody's VP/Senior Analyst.
"These factors support Brambles' strong competitive positions, geographic
diversity and unique scale," says Lewis, who is also Lead Analyst for the
company.
"Furthermore, its financial profile displays strong Baa rating characteristics,
Lewis says, adding "Such strength is challenged by the need for ongoing capital
expenditure to maintain and grow its CHEP pallet business, and this impacts its
ability to generate positive free cash flow during periods of peak investment"
Brambles' major operating business -- CHEP -- constitutes a large and complex
network of pallets and containers and pallet and container flows that have been
organically built up over a long period.
"As such, systems of similar scale and complexity are difficult to displace once
established, so providing Brambles with strong market positions and first mover
advantage," says Lewis.
"Critical to the rating is the fact that Brambles' businesses are heavily
weighted towards the normally stable and more resilient FMCG sector. This means
that while its core revenues and earnings are not immune from some variability,
we do not expect them to face material weaknesses through the economic cycle,"
says Lewis.
The Baa1 rating is further supported by Brambles' financial profile. Its
expected level of gearing --
Debt/EBITDA of around 2-2.5x, EBIT/Interest of 5-5.5x, and RCF/Debt of around
20% -- is appropriate for a strong Baa-rated company.
Brambles is committed towards maintaining a strong financial profile, and its
financial policy -- which includes the maintenance of a NetDebt / EBITDA ratio
of max 1.75x (unadjusted basis) -- is supportive of its Baa1 rating.
The P-2 rating considers Brambles' strong credit characteristics -as reflected
in its Baa1 rating -- and its stable liquidity platform, which is supported by
its reliable cash flows and manageable debt maturity.
In the absence of a material and permanent change in the capital structure of
Brambles and greater stability in the operating environment, the ratings are
unlikely to be subject to upward pressure in the next 18-24 months.
However, the ratings could experience downward pressure if the company
experiences an erosion in its revenues and earnings, and its competitive
position, or any other difficulty within the operating environment, such that
Debt/EBITDA is likely to rise and remain above 2.75x, and/or EBIT/Interest falls
below 4.0-4.5x on a sustained basis.
Brambles' ratings were assigned by evaluating factors we believe are relevant to
the credit profile of the issuer, such as i) the business risk and competitive
position of the company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv) management's track
record and tolerance for risk. These attributes were compared against other
issuers both within and outside of Brambles' core industry and Brambles' ratings
are believed to be comparable to those of other issuers of similar credit risk.
Brambles Limited is the global leader in pallet and container pooling supply
chain solutions through CHEP. Brambles also provides secure and effective
information storage and destruction services through Recall. Brambles is listed
on the Australian Stock Exchange and currently has a secondary listing on the
London Stock Exchange. As at 30 June 2009, it had total assets of US$ 5.1
billion and underlying profit of US$ 0.9 billion.
Sydney
Ian Lewis
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service Pty Ltd
JOURNALISTS: (612) 9270-8102
SUBSCRIBERS: (612) 9270-8100
Sydney
Terry Fanous
Senior Vice President
Corporate Finance Group
Moody's Investors Service Pty Ltd
JOURNALISTS: (612) 9270-8102
SUBSCRIBERS: (612) 9270-8100
CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S (MIS) CURRENT OPINIONS OF
THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR
DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT
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VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT.
CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT
RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR
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FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION
AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF
EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
c Copyright 2009, Moody's Investors Service, Inc. and/or its licensors including
Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved.
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to pay to MOODY'S for appraisal and rating services rendered by it fees ranging
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also maintain policies and procedures to address the independence of MIS's
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Director and Shareholder Affiliation Policy."
Standard and Poor's
Brambles Ltd. Assigned 'BBB+' Corporate Credit Rating; Outlook Stable
Melbourne, Dec. 22, 2009-Standard & Poor's Ratings Services said today that it
had assigned its 'BBB+' corporate credit rating to Australian-based Brambles
Ltd. We also assigned a stable rating outlook.
The rating on Brambles reflects our opinion of the company's leading global
position in pallet and container pooling services; solid logistic management
capability and asset utilization; good geographic and customer diversity; and
sound operating margins and stable cash flow, despite difficult economic
conditions. Offsetting these strengths is Brambles' sizable ongoing
capital-expenditure requirements, particularly in the CHEP business; changing
customer preferences to alternative pallet products; the company's expansion
into developing markets such as China and India, which introduces execution
risk; and its capital returns, which rely on effective management of pallet
logistics and pallet-repair processes.
"The stable rating outlook reflects the underlying strength of the CHEP
business, which underpins Brambles' overall business prospects and capacity to
maintain financial metrics at a level supportive of the 'BBB+' rating," Standard
& Poor's credit analyst Craig Parker said.
The rating could be raised if we felt that the business returns were suitably
robust to weather a prolonged decline in activity levels within the developed
economies; the execution risks in the company's emerging markets diminished; and
management adopted more conservative financial targets. The rating could come
under pressure if CHEP's market position erodes; Brambles' expansion into the
targeted emerging economies falters; and financial metrics were outside our
expectations.
About Standard & Poor's
Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE:MHP), is the
world's foremost provider of independent credit ratings, indices, risk
evaluation, investment research and data. With offices in 23 countries and
markets, Standard & Poor's is an essential part of the world's financial
infrastructure and has played a leading role for nearly 150 years in providing
investors with the independent benchmarks they need to feel more confident about
their investment and financial decisions. For more information, visit
http://www.standardandpoors.com
Media Contact:
Sharon Beach, Melbourne, (61) 3 9631 2152, sharon_beach@standardandpoors.com
Credit Analysts:
Craig Parker, Corporate Ratings, craig_parker@standardandpoors.com
Andrew Palmer, Corporate Ratings, andrew_palmer@standardandpoors.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Brambles (LSE:BXB)
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