TIDMBXB
RNS Number : 2636H
Brambles Limited
17 February 2010
Brambles Limited
Company Number: 118 896 021
17 February 2010
Results for announcement to the market
Brambles Limited
ABN 89 118 896 021
Appendix 4D
Consolidated financial report
for the half-year ended 31 December 2009
+----------+------------------------------------+----------+----------+---------+-----------+
| | | | | % | % |
| | | | | change | change |
+----------+------------------------------------+----------+----------+---------+-----------+
| Six months ended 31 December | 2009 | 2008 | (actual | (constant |
| | | | | |
+-----------------------------------------------+----------+----------+---------+-----------+
| | | US$m | US$m | fx | currency) |
| | | | | rates) | |
+----------+------------------------------------+----------+----------+---------+-----------+
| | | | | | |
+----------+------------------------------------+----------+----------+---------+-----------+
| Statutory results | | | | |
+-----------------------------------------------+----------+----------+---------+-----------+
| | | | | | |
+----------+------------------------------------+----------+----------+---------+-----------+
| Continuing operations after Significant | | | | |
| items: | | | | |
+-----------------------------------------------+----------+----------+---------+-----------+
| | | | | | |
| | Sales revenue | 2,086.1 | 2,073.2 | 1% | (2%) |
+----------+------------------------------------+----------+----------+---------+-----------+
| | Operating profit | | | | |
| | | 338.1 | 337.6 | - | (3%) |
| | | | | | |
+----------+------------------------------------+----------+----------+---------+-----------+
| | Profit before tax | | | | - |
| | | 284.1 | 273.9 | 4% | |
+----------+------------------------------------+----------+----------+---------+-----------+
| | Profit after tax | | | | |
| | | 206.7 | 195.3 | 6% | 2% |
+----------+------------------------------------+----------+----------+---------+-----------+
| Profit after tax - discontinued operations | | | | |
| | 0.4 | 17.5 | | |
+-----------------------------------------------+----------+----------+---------+-----------+
| Profit attributable to members of the parent | | | | |
| entity | 207.1 | 212.8 | (3%) | (7%) |
+-----------------------------------------------+----------+----------+---------+-----------+
| Basic EPS (US cents) | 14.8 | 15.4 | (4%) | (8%) |
+-----------------------------------------------+----------+----------+---------+-----------+
| Free cash flow after dividends | | | | |
| | 133.3 | (90.6) | | |
+-----------------------------------------------+----------+----------+---------+-----------+
| | | | | | |
+----------+------------------------------------+----------+----------+---------+-----------+
| Continuing operations before Significant | | | | |
| items: | | | | |
+-----------------------------------------------+----------+----------+---------+-----------+
| | | | | | |
| | Sales revenue | 2,086.1 | 2,073.2 | 1% | (2%) |
+----------+------------------------------------+----------+----------+---------+-----------+
| | Underlying profit | | | | (30%) |
| | | 340.2 | 469.3 | (28%) | |
+----------+------------------------------------+----------+----------+---------+-----------+
| | Profit after tax | | | | |
| | | 208.3 | 270.5 | (23%) | (26%) |
+----------+------------------------------------+----------+----------+---------+-----------+
| | Basic EPS (US cents) | | | | (27%) |
| | | 14.8 | 19.5 | (24%) | |
+----------+------------------------------------+----------+----------+---------+-----------+
| | | | | | |
+----------+------------------------------------+----------+----------+---------+-----------+
| Interim dividend* (Australian cents) | 12.5 | 17.5 | | |
+----------+------------------------------------+----------+----------+---------+-----------+
* The 2010 interim dividend is 20% franked and its record date is 18 March 2010.
A commentary on these results is set out in Brambles' Securities Exchange &
Media Release dated 17 February 2010.
Page 1 of 24
Consolidated financial report
for the half-year ended 31 December 2009
+--+---------------------------------+--------+--------+
| Index | | Page |
+------------------------------------+--------+--------+
| | | | |
+--+---------------------------------+--------+--------+
| Half-year consolidated financial | | |
| statements | | |
+------------------------------------+--------+--------+
| | | | |
+--+---------------------------------+--------+--------+
| Consolidated income statement | | 3 |
+------------------------------------+--------+--------+
| Consolidated statement of | | 4 |
| comprehensive income | | |
+------------------------------------+--------+--------+
| Consolidated balance sheet | | 5 |
+------------------------------------+--------+--------+
| Consolidated cash flow statement | | 6 |
+------------------------------------+--------+--------+
| Consolidated statement of changes | | 7 |
| in equity | | |
+------------------------------------+--------+--------+
| Notes to the consolidated | | |
| financial statements | | |
+------------------------------------+--------+--------+
|1. | Basis of preparation | | 8 |
+--+---------------------------------+--------+--------+
|2. | Significant accounting policies | | 8 |
+--+---------------------------------+--------+--------+
|3. | Segment information | | 9 |
+--+---------------------------------+--------+--------+
|4. | Profit from ordinary activities - | 11 |
| | continuing operations | |
+--+------------------------------------------+--------+
|5. | Significant items - continuing | | 12 |
| | operations | | |
+--+---------------------------------+--------+--------+
|6. | Discontinued operations | | 13 |
+--+---------------------------------+--------+--------+
|7. | Earnings per share | | 14 |
+--+---------------------------------+--------+--------+
|8. | Dividends | | 15 |
+--+---------------------------------+--------+--------+
|9. | Issued and quoted securities | | 15 |
+--+---------------------------------+--------+--------+
|10. | Reserves | | 16 |
+--+---------------------------------+--------+--------+
|11. | Equity-accounted investments | | 17 |
+--+---------------------------------+--------+--------+
|12. | Net tangible asset backing | | 17 |
+--+---------------------------------+--------+--------+
|13. | Contingent liabilities | | 17 |
+--+---------------------------------+--------+--------+
|14. | Events after balance sheet date | | 17 |
| | | | |
+--+---------------------------------+--------+--------+
| | | | |
+--+---------------------------------+--------+--------+
| Directors' declaration | | 18 |
+------------------------------------+--------+--------+
| Independent auditors' review | | 19 |
| report | | |
+------------------------------------+--------+--------+
| | | | |
+--+---------------------------------+--------+--------+
| Directors' report | | 21 |
+------------------------------------+--------+--------+
| Auditors' independence declaration | | 24 |
+--+---------------------------------+--------+--------+
Page 2 of 24
Consolidated income statement
for the half-year ended 31 December 2009
+---------------+---------------+------------+------+--------------------+-----------+
| | | | | First | First |
| | | | | half | half |
+---------------+---------------+------------+------+--------------------+-----------+
| | | | | 2010 | 2009 |
+---------------+---------------+------------+------+--------------------+-----------+
| | | |Note | US$m | US$m |
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Continuing operations | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| Sales revenue | | 4 | 2,086.1 | 2,073.2 |
+-------------------------------+------------+------+--------------------+-----------+
| Other income | | 4 | 38.2 | 60.2 |
+-------------------------------+------------+------+--------------------+-----------+
| Operating expenses | | 4 | (1,788.9) | (1,798.2) |
+-------------------------------+------------+------+--------------------+-----------+
| Share of results of joint | | 11 | 2.7 | 2.4 |
| ventures | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| Operating profit | | | 338.1 | 337.6 |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Finance revenue | | | 1.4 | 4.8 |
+-------------------------------+------------+------+--------------------+-----------+
| Finance costs | | | (55.4) | (68.5) |
+-------------------------------+------------+------+--------------------+-----------+
| Net finance costs | | | (54.0) | (63.7) |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Profit before tax | | | 284.1 | 273.9 |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Tax expense | | | (77.4) | (78.6) |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Profit from continuing | | | 206.7 | 195.3 |
| operations | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Profit from discontinued | | 6 | 0.4 | 17.5 |
| operations | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Profit for the period attributable to | | 207.1 | 212.8 |
| members of the parent entity | | | |
+--------------------------------------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Earnings per share (cents) | | 7 | | |
+-------------------------------+------------+------+--------------------+-----------+
| Total | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| - basic | | | 14.8 | 15.4 |
+-------------------------------+------------+------+--------------------+-----------+
| - diluted | | | 14.7 | 15.3 |
+-------------------------------+------------+------+--------------------+-----------+
| Continuing operations | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| - basic | | | 14.7 | 14.1 |
+-------------------------------+------------+------+--------------------+-----------+
| - diluted | | | 14.7 | 14.1 |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| The consolidated income statement should be read in |
| conjunction with the accompanying notes. |
+------------------------------------------------------------------------------------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Non-statutory measure: | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Underlying profit | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| Underlying profit is profit from continuing operations before |
| finance costs, tax and Significant items (refer Note 5). It is |
| presented to assist users of the financial statements to |
| understand Brambles' business results and reconciles with |
| operating profit as follows: |
+------------------------------------------------------------------------------------+
| Underlying profit | | | 340.2 | 469.3 |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Significant items: | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| - restructuring costs | | | | |
| | | 5a | (2.1) | (106.9) |
+-------------------------------+------------+------+--------------------+-----------+
| - foreign exchange gain on capital | 5c | - | 29.9 |
| repatriation | | | |
+--------------------------------------------+------+--------------------+-----------+
| - Walmart transition impact | | 5d | - | (20.2) |
+-------------------------------+------------+------+--------------------+-----------+
| - USA pallet quality program | | 5e | - | (34.5) |
| costs* | | | | |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| Operating profit | | | 338.1 | 337.6 |
+-------------------------------+------------+------+--------------------+-----------+
| | | | | | |
+---------------+---------------+------------+------+--------------------+-----------+
| * In October 2009, CHEP USA launched its Better Everyday |
| customer service and quality program, which is expected to |
| result in ongoing net costs of approximately US$50 million per |
| annum and additional costs totalling approximately US$110 |
| million over three years for fast-tracking other elements of |
| the program. In 1H10, spending under the Better Everyday |
| program, together with the final US$37 million spending under |
| the USA pallet quality program announced in February 2008, |
| have been presented within Underlying profit. In prior years, |
| USA pallet quality program costs were presented as Significant |
| items. Comparatives have not been restated. |
+---------------+---------------+------------+------+--------------------+-----------+
Page 3 of 24
Consolidated statement of comprehensive income
for the half-year ended 31 December 2009
+------------+------------+----------------------+--------+---------+
| | | | First | First |
| | | | half | half |
+------------+------------+----------------------+--------+---------+
| | | | 2010 | 2009 |
+------------+------------+----------------------+--------+---------+
| | | | US$m | US$m |
| | | | | |
+------------+------------+----------------------+--------+---------+
| | | | | |
+------------+------------+----------------------+--------+---------+
| Profit for the period | | 207.1 | 212.8 |
+-------------------------+----------------------+--------+---------+
| | | | | |
+------------+------------+----------------------+--------+---------+
| Other comprehensive | | | |
| income: | | | |
+-------------------------+----------------------+--------+---------+
| Actuarial (losses)/gains on defined benefit | (5.5) | 28.3 |
| pension plans | | |
+------------------------------------------------+--------+---------+
| Exchange differences on translation of foreign | 81.4 | (307.8) |
| operations | | |
+------------------------------------------------+--------+---------+
| Cash flow hedges | | 1.7 | (23.0) |
+-------------------------+----------------------+--------+---------+
| Income tax on other comprehensive income | 1.3 | (0.1) |
+------------------------------------------------+--------+---------+
| Other comprehensive income for the period | 78.9 | (302.6) |
+------------------------------------------------+--------+---------+
| | | | | |
+------------+------------+----------------------+--------+---------+
| Total comprehensive income for the period | | |
| attributable to | | |
+------------------------------------------------+--------+---------+
| members of the parent | | 286.0 | (89.8) |
| entity | | | |
+-------------------------+----------------------+--------+---------+
| | | | | |
+------------+------------+----------------------+--------+---------+
| | | | | |
+------------+------------+----------------------+--------+---------+
| The consolidated statement of comprehensive income should be |
| read in conjunction with the accompanying notes. |
+------------+------------+----------------------+--------+---------+
Page 4 of 24
Consolidated balance sheet
as at 31 December 2009
+-+-------------------------+--------+----+------+------------+------------+
| | | | | | December | June |
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
| | | | | | 2009 | 2009 |
+-+-------------------------+--------+----+------+------------+------------+
| | | | |Note | US$m | US$m |
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
| ASSETS | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Current assets | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Cash and cash equivalents | | | | 117.9 | 90.1 |
| | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Trade and other | | | | 681.8 | 653.6 |
| receivables | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Inventories | | | | 42.6 | 35.1 |
+---------------------------+--------+----+------+------------+------------+
| Derivative financial | | | | 0.8 | 1.1 |
| instruments | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Other assets | | | | 64.4 | 72.2 |
+---------------------------+--------+----+------+------------+------------+
| Total current assets | | | | 907.5 | 852.1 |
+---------------------------+--------+----+------+------------+------------+
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
| Non-current assets | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Other receivables | | | | 8.5 | 8.1 |
+---------------------------+--------+----+------+------------+------------+
| Investments | | | | 14.2 | 13.8 |
+---------------------------+--------+----+------+------------+------------+
| Property, plant and | | | | 3,445.8 | 3,441.6 |
| equipment | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Goodwill | | | | 636.9 | 612.3 |
+---------------------------+--------+----+------+------------+------------+
| Intangible assets | | | | 169.9 | 163.0 |
+---------------------------+--------+----+------+------------+------------+
| Deferred tax assets | | | | 19.5 | 7.0 |
+---------------------------+--------+----+------+------------+------------+
| Derivative financial | | | | 1.5 | - |
| instruments | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Other assets | | | | 0.7 | 0.6 |
+---------------------------+--------+----+------+------------+------------+
| Total non-current assets | | | | 4,297.0 | 4,246.4 |
+---------------------------+--------+----+------+------------+------------+
| Total assets | | | | 5,204.5 | 5,098.5 |
+---------------------------+--------+----+------+------------+------------+
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
| LIABILITIES | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Current liabilities | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Trade and other payables | | | | 680.5 | 683.7 |
+---------------------------+--------+----+------+------------+------------+
| Borrowings | | | | 66.4 | 68.0 |
+---------------------------+--------+----+------+------------+------------+
| Derivative financial | | | | 14.1 | 12.9 |
| instruments | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Tax payable | | | | 65.4 | 64.6 |
+---------------------------+--------+----+------+------------+------------+
| Provisions | | | | 74.9 | 93.6 |
+---------------------------+--------+----+------+------------+------------+
| Total current liabilities | | | | 901.3 | 922.8 |
| | | | | | |
+---------------------------+--------+----+------+------------+------------+
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
| Non-current liabilities | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Borrowings | | | | 2,079.9 | 2,165.5 |
+---------------------------+--------+----+------+------------+------------+
| Derivative financial | | | | 3.8 | 5.8 |
| instruments | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Provisions | | | | 46.1 | 53.0 |
+---------------------------+--------+----+------+------------+------------+
| Retirement benefit | | | | 55.4 | 50.8 |
| obligations | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Deferred tax liabilities | | | | 459.9 | 449.9 |
+---------------------------+--------+----+------+------------+------------+
| Other liabilities | | | | 20.7 | 21.4 |
+---------------------------+--------+----+------+------------+------------+
| Total non-current | | | | 2,665.8 | 2,746.4 |
| liabilities | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Total liabilities | | | | 3,567.1 | 3,669.2 |
+---------------------------+--------+----+------+------------+------------+
| Net assets | | | | 1,637.4 | 1,429.3 |
+---------------------------+--------+----+------+------------+------------+
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
| EQUITY | | | | | |
+---------------------------+--------+----+------+------------+------------+
| Contributed equity | | | 9 | 13,912.4 | 13,847.6 |
+---------------------------+--------+----+------+------------+------------+
| Unification reserve | | | 10 | (15,385.8) | (15,385.8) |
+---------------------------+--------+----+------+------------+------------+
| Other reserves | | | 10 | 534.7 | 447.1 |
+---------------------------+--------+----+------+------------+------------+
| Retained earnings | | | | 2,575.8 | 2,520.1 |
+---------------------------+--------+----+------+------------+------------+
| Parent entity interest | | | | 1,637.1 | 1,429.0 |
+---------------------------+--------+----+------+------------+------------+
| Minority interest | | | | 0.3 | 0.3 |
+---------------------------+--------+----+------+------------+------------+
| Total equity | | | | 1,637.4 | 1,429.3 |
+---------------------------+--------+----+------+------------+------------+
| | | | | | | |
+-+-------------------------+--------+----+------+------------+------------+
The consolidated balance sheet should be read in conjunction with the
accompanying notes.
Page 5 of 24
Consolidated cash flow statement
for the half-year ended 31 December 2009
+-+-------------------------+--------+----+----+-----------+-----------+
| | | | | | First | First |
| | | | | | half | half |
+-+-------------------------+--------+----+----+-----------+-----------+
| | | | | | 2010 | 2009 |
+-+-------------------------+--------+----+----+-----------+-----------+
| | | | | | US$m | US$m |
| | | | | | | |
+-+-------------------------+--------+----+----+-----------+-----------+
| | | | | | | |
+-+-------------------------+--------+----+----+-----------+-----------+
| Cash flows from operating | | | | |
| activities | | | | |
+------------------------------------+----+----+-----------+-----------+
| Receipts from customers | | | | 2,338.9 | 2,323.2 |
+---------------------------+--------+----+----+-----------+-----------+
| Payments to suppliers and | | | (1,750.5) | (1,757.5) |
| employees | | | | |
+------------------------------------+----+----+-----------+-----------+
| Cash generated from | | | | 588.4 | 565.7 |
| operations | | | | | |
+---------------------------+--------+----+----+-----------+-----------+
| Dividends received from | | | | 2.8 | 4.1 |
| joint ventures | | | | | |
+---------------------------+--------+----+----+-----------+-----------+
| Interest received | | | | 1.5 | 5.8 |
+---------------------------+--------+----+----+-----------+-----------+
| Interest paid | | | | (50.9) | (70.5) |
+---------------------------+--------+----+----+-----------+-----------+
| Income taxes paid on operating | | | (81.2) | (61.8) |
| activities | | | | |
+------------------------------------+----+----+-----------+-----------+
| Net cash inflow from operating | | | 460.6 | 443.3 |
| activities | | | | |
+------------------------------------+----+----+-----------+-----------+
| | | | | | | |
+-+-------------------------+--------+----+----+-----------+-----------+
| Cash flows from investing | | | | |
| activities | | | | |
+------------------------------------+----+----+-----------+-----------+
| Purchases of property, plant and | | | (254.6) | (400.1) |
| equipment | | | | |
+------------------------------------+----+----+-----------+-----------+
| Proceeds from sale of property, plant | | 43.6 | 41.2 |
| and equipment | | | |
+-----------------------------------------+----+-----------+-----------+
| Purchases of intangible | | | | (15.0) | (11.8) |
| assets | | | | | |
+---------------------------+--------+----+----+-----------+-----------+
| Proceeds from disposal of | | | 1.5 | 0.9 |
| businesses | | | | |
+------------------------------------+----+----+-----------+-----------+
| Costs incurred on disposal of | | | - | (5.2) |
| business | | | | |
+------------------------------------+----+----+-----------+-----------+
| Acquisition of subsidiaries, net | | | - | (0.1) |
| of cash acquired | | | | |
+------------------------------------+----+----+-----------+-----------+
| Net cash outflow from investing | | | (224.5) | (375.1) |
| activities | | | | |
+------------------------------------+----+----+-----------+-----------+
| | | | | | | |
+-+-------------------------+--------+----+----+-----------+-----------+
| Cash flows from financing | | | | |
| activities | | | | |
+------------------------------------+----+----+-----------+-----------+
| Proceeds from borrowings | | | | 1,334.7 | 758.2 |
| | | | | | |
+---------------------------+--------+----+----+-----------+-----------+
| Repayments of borrowings | | | | (1,449.3) | (553.2) |
| | | | | | |
+---------------------------+--------+----+----+-----------+-----------+
| Net inflow/(outflow) from hedge | | | 12.9 | (17.7) |
| borrowings | | | | |
+------------------------------------+----+----+-----------+-----------+
| Proceeds from issue of ordinary | | | 1.0 | 0.8 |
| shares | | | | |
+------------------------------------+----+----+-----------+-----------+
| Dividends paid, net of Dividend | | | (101.3) | (163.2) |
| Reinvestment Plan | | | | |
+------------------------------------+----+----+-----------+-----------+
| Net cash (outflow)/inflow from | | (202.0) | 24.9 |
| financing activities | | | |
+-----------------------------------------+----+-----------+-----------+
| | | | | | | |
+-+-------------------------+--------+----+----+-----------+-----------+
| Net increase in cash and cash | | | 34.1 | 93.1 |
| equivalents | | | | |
+------------------------------------+----+----+-----------+-----------+
| Cash and deposits, net of overdrafts, | | 54.1 | 68.1 |
| at beginning of the period | | | |
+-----------------------------------------+----+-----------+-----------+
| Effect of exchange rate | | | | 4.7 | (60.1) |
| changes | | | | | |
+---------------------------+--------+----+----+-----------+-----------+
| Cash and deposits, net of overdrafts, | | 92.9 | 101.1 |
| at end of the period | | | |
+-----------------------------------------+----+-----------+-----------+
| | | | | | | |
+-+-------------------------+--------+----+----+-----------+-----------+
The consolidated cash flow statement should be read in conjunction with the
accompanying notes.
Page 6 of 24
Consolidated statement of changes in equity
for the half-year ended 31 December 2009
+--------------------------------+------+----+----------+----------+------------+----------+-------------+---------+
| | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | Non- | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | Share | | Retained | controlling | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | capital | Reserves1 | earnings | interest | Total |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| |Note | US$m | US$m | US$m | US$m | US$m |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| Half-year ended 31 December | | | | | | |
| 2008 | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| Opening balance | | 13,778.6 | (14,671.5) | 2,436.1 | 0.3 | 1,543.5 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| Total comprehensive income | | - | (323.0) | 233.2 | - | (89.8) |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| Share-based payments: | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - expense recognised | | - | 7.2 | - | - | 7.2 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - shares issued | | - | (5.0) | - | - | (5.0) |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - equity component of related | | - | (0.8) | - | - | (0.8) |
| tax | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| Transactions with owners in | | | | | | |
| their capacity | | | | | | |
| as owners: | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - dividends declared | | - | - | (208.9) | - | (208.9) |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - issues of ordinary shares, | | 5.7 | - | - | - | 5.7 |
| net of | | | | | | |
| transaction costs | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| Closing balance | | 13,784.3 | (14,993.1) | 2,460.4 | 0.3 | 1,251.9 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| Half-year ended 31 December | | | | | | |
| 2009 | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| Opening balance | | 13,847.6 | (14,938.7) | 2,520.1 | 0.3 | 1,429.3 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| Total comprehensive income | | - | 82.9 | 203.1 | - | 286.0 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| Share-based payments: | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - expense recognised | | - | 8.4 | - | - | 8.4 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - shares issued | | - | (4.6) | - | - | (4.6) |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - equity component of related | | - | 0.9 | - | - | 0.9 |
| tax | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| Transactions with owners in | | | | | | |
| their capacity | | | | | | |
| as owners: | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - dividends declared | | - | - | | - | (147.4) |
| | | | | (147.4) | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - issues of ordinary shares, | 9 | 5.6 | - | - | - | 5.6 |
| net of | | | | | | |
| transaction costs | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| - issues of ordinary shares | 9 | 59.2 | - | - | - | 59.2 |
| under Dividend | | | | | | |
| Reinvestment Plan | | | | | | |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| Closing balance | | 13,912.4 | (14,851.1) | 2,575.8 | 0.3 | 1,637.4 |
+--------------------------------+------+--------------------------+------------+----------+-------------+---------+
| | | | | | | | |
+--------------------------------+-----------+----------+----------+------------+----------+-------------+---------+
| | | | | | | | | |
+--------------------------------+------+----+----------+----------+------------+----------+-------------+---------+
1 Refer Note 10 for further information on reserves.
The consolidated statement of changes in equity should be read in conjunction
with the accompanying notes.
Page 7 of 24
Notes to and forming part of the consolidated financial statements
for the half-year ended 31 December 2009
Note 1. Basis of preparation
These financial statements present the consolidated results of Brambles Limited
(ACN 118 896 021) and its subsidiaries (Brambles or the Group) for the half-year
ended 31 December 2009.
These consolidated financial statements, which have been prepared in accordance
with AASB 134: Interim Financial Reporting, are a general purpose financial
report.
The interim consolidated financial statements comply with International
Financial Reporting Standards (IFRS) and have been prepared in accordance with
Australian Accounting Standards (AAS), other authoritative pronouncements of the
Australian Accounting Standards Board (AASB), the Urgent Issues Group
Interpretations (UIG) and the requirements of the Corporations Act 2001.
These interim consolidated financial statements do not include all of the notes
that would normally be included in an annual financial report. The interim
consolidated financial statements should be read in conjunction with Brambles'
2009 Annual Report and public announcements made by Brambles during the interim
reporting period in accordance with the continuous disclosure requirements of
the Corporations Act.
Note 2. Significant accounting policies
The interim consolidated financial statements and all comparatives have been
prepared using consistent accounting policies, as set out in Brambles' 2009
Annual Report, except for segment reporting.
a) Segment reporting
Brambles has applied AASB 8: Operating Segments from 1 July 2009. AASB 8
requires adoption of a management approach when reporting segment performance.
The information presented is based on Brambles' internal management reporting to
the Chief Executive Officer (CEO), being the chief operating decision-maker, and
reflects what the CEO uses when evaluating segment performance and deciding how
to allocate resources to operating segments.
There have been no changes to the definition of operating segments, however
additional disclosures are now included in the financial statements. Geographic
disclosures now present Australia separately. Comparative figures have been
provided.
b) Foreign currency
The principal exchange rates affecting Brambles were:
+----------+--------------+------------+------------+------------+
| | | US$:A$ | US$:EUR | US$:GBP |
+----------+--------------+------------+------------+------------+
| Average | First half | 0.8765 | 1.4570 | 1.6328 |
| | 2010 | | | |
+----------+--------------+------------+------------+------------+
| | First half | 0.7759 | 1.4180 | 1.7166 |
| | 2009 | | | |
+----------+--------------+------------+------------+------------+
| Period | 31 December | 0.8987 | 1.4416 | 1.6129 |
| end | 2009 | | | |
+----------+--------------+------------+------------+------------+
| | 30 June 2009 | 0.8114 | 1.4106 | 1.6637 |
+----------+--------------+------------+------------+------------+
c) Rounding of amounts
As Brambles Limited is a company of a kind referred to in ASIC Class Order
98/0100, relevant amounts in the financial statements and Directors' Report have
been rounded to the nearest hundred thousand US dollars or, in certain cases, to
the nearest thousand US dollars.
References to 2010 and 2009 are to the financial years ending on 30 June 2010
and 30 June 2009 respectively.
Page 8 of 24
Note 3. Segment information
Brambles' segment information is provided on the same basis as its internal
management reporting to the CEO and reflects how Brambles is organised and
managed.
Brambles has five reportable segments, being CHEP Americas, CHEP EMEA, CHEP
Asia-Pacific (pallet and container pooling businesses), Recall (information
management business) and Brambles HQ (corporate centre). Discontinued operations
primarily comprise the Cleanaway businesses (waste management), which were
divested in 2006 and 2007.
Segment results shown are consistent with internal management reporting. Segment
performance is measured on sales, Underlying profit, cash flow from operations
and Brambles Value Added (BVA). Underlying profit is the main measure of segment
profit and a reconciliation between Underlying profit and operating profit is
set out below.
Segment sales revenue is measured on the same basis as in the income statement.
Intersegment revenue during the period was immaterial. There is no single
external customer who contributed more than 10% of Group sales revenue.
Assets and liabilities are measured consistently in segment reporting and in the
balance sheet. Assets and liabilities are allocated to segments based on segment
use and physical location. Cash, borrowings and tax balances are managed
centrally and therefore not allocated to segments.
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | | | | Cash flow | | Brambles |
| | | | | | from | | |
+----------+---------------+----------+----------+----------+------------------+----------+-----------------+
| | | Sales revenue | | operations 1 | | Value Added 2 |
+----------+---------------+---------------------+----------+------------------+----------+-----------------+
| | | First | First | | First | First | | First | First |
| | | half | half | | half | half | | half | half |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | 2010 | 2009 | | 2010 | 2009 | | 2010 | 2009 |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | US$m | US$m | | US$m | US$m | | US$m | US$m |
| | | | | | | | | | |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| By operating segment | | | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| CHEP Americas | 756.9 | 792.5 | | 139.8 | 116.9 | | 9.4 | 83.1 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| CHEP EMEA | 770.1 | 761.0 | | 202.7 | 137.1 | | 69.9 | 82.5 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| CHEP Asia-Pacific | 195.0 | 166.6 | | 35.7 | (22.8) | | 7.8 | 11.3 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Total CHEP | 1,722.0 | 1,720.1 | | 378.2 | 231.2 | | 87.1 | 176.9 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Recall | 364.1 | 353.1 | | 45.9 | 22.0 | | (6.5) | (7.1) |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Brambles HQ | - | - | | (23.8) | (32.4) | | (9.6) | (18.4) |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Total | 2,086.1 | 2,073.2 | | 400.3 | 220.8 | | 71.0 | 151.4 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | | | | | | | | |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| By geographic origin | | | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Americas | 918.8 | 953.7 | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Europe | 801.6 | 807.1 | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Australia | 251.3 | 219.1 | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Other | 114.4 | 93.3 | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Total | 2,086.1 | 2,073.2 | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | | | | | | | | |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | | | | Significant | | |
| | | | | | items | | |
+----------+---------------+----------+----------+----------+------------------+----------+-----------------+
| | | Operating | | before tax | | Underlying |
| | | profit 3 | | 4 | | profit 4 |
+----------+---------------+---------------------+----------+------------------+----------+-----------------+
| | | First | First | | First | First | | First | First |
| | | half | half | | half | half | | half | half |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | 2010 | 2009 | | 2010 | 2009 | | 2010 | 2009 |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | US$m | US$m | | US$m | US$m | | US$m | US$m |
| | | | | | | | | | |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| By operating segment | | | | | | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| CHEP Americas | 108.6 | 79.6 | | - | (153.7) | | 108.6 | 233.3 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| CHEP EMEA | 159.3 | 166.2 | | (2.1) | (4.7) | | 161.4 | 170.9 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| CHEP Asia-Pacific | 32.5 | 28.4 | | - | (0.5) | | 32.5 | 28.9 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Total CHEP | 300.4 | 274.2 | | (2.1) | (158.9) | | 302.5 | 433.1 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Recall | 52.5 | 49.5 | | - | (1.0) | | 52.5 | 50.5 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Brambles HQ | (14.8) | 13.9 | | - | 28.2 | | (14.8) | (14.3) |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Continuing operations | 338.1 | 337.6 | | (2.1) | (131.7) | | 340.2 | 469.3 |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | | | | | | | | |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Discontinued operations | 0.5 | 16.3 | | 0.5 | 16.3 | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| Total | 338.6 | 353.9 | | (1.6) | (115.4) | | | |
+--------------------------+----------+----------+----------+--------+---------+----------+--------+--------+
| | | | | | | | | | |
+----------+---------------+----------+----------+----------+--------+---------+----------+--------+--------+
Page 9 of 24
Note 3. Segment information - continued
+--+--------------------+------+--------+----------+----------+-+--------+----------+----------+----------+
| | | | |Capital expenditure | | Depreciation |
| | | | | | | |
+--+--------------------+---------------+----------+---------------------+----------+---------------------+
| | | | | (including | | and amortisation |
| | | | | acquisitions) | | |
+--+--------------------+---------------+----------+---------------------+----------+---------------------+
| | | | | First half | First | | First | First |
| | | | | | half | | half | half |
+--+--------------------+---------------+----------+------------+--------+----------+----------+----------+
| | | | | 2010 | 2009 | | 2010 | 2009 |
+--+--------------------+---------------+----------+------------+--------+----------+----------+----------+
| | | | | US$m | US$m | | US$m | US$m |
+--+--------------------+---------------+----------+------------+--------+----------+----------+----------+
| By operating segment | | | | | | | |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| CHEP Americas | | | 106.6 | 172.0 | | 85.1 | 88.1 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| CHEP EMEA | | | 85.9 | 126.1 | | 87.3 | 87.1 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| CHEP Asia-Pacific | | | 28.0 | 62.5 | | 25.5 | 17.8 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| Total CHEP | | | 220.5 | 360.6 | | 197.9 | 193.0 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| Recall | | | 26.0 | 24.5 | | 23.7 | 23.5 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| Brambles HQ | | | 1.0 | 2.0 | | 0.3 | 0.1 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| Total | | | 247.5 | 387.1 | | 221.9 | 216.6 |
+-----------------------+---------------+----------+------------+--------+----------+----------+----------+
| | | | | | | | | |
+--+--------------------+---------------+----------+------------+--------+----------+----------+----------+
| | | | | Segment assets | | Segment |
| | | | | | | liabilities |
+--+--------------------+---------------+----------+---------------------+----------+---------------------+
| | | | | December | June | | December | June |
| | | | | | | | | |
+--+--------------------+---------------+----------+----------+----------+----------+----------+----------+
| | | | | 2009 | 2009 | | 2009 | 2009 |
+--+--------------------+---------------+----------+----------+----------+----------+----------+----------+
| | | | | US$m | US$m | | US$m | US$m |
+--+--------------------+---------------+----------+----------+----------+----------+----------+----------+
| By operating segment | | | | | | | |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| CHEP Americas | | | 1,725.4 | 1,739.5 | | 214.3 | 241.6 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| CHEP EMEA | | | 1,748.4 | 1,752.1 | | 361.9 | 360.3 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| CHEP Asia-Pacific | | | 467.4 | 430.4 | | 78.1 | 72.3 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Total CHEP | | | 3,941.2 | 3,922.0 | | 654.3 | 674.2 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Recall | | | 1,056.7 | 1,020.1 | | 154.5 | 167.7 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Brambles HQ | | | 28.3 | 11.0 | | 86.6 | 79.3 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Total segment assets and liabilities | | 5,026.2 | 4,953.1 | | 895.4 | 921.2 |
+---------------------------------------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | |
+--+--------------------+---------------+----------+----------+----------+----------+----------+----------+
| Cash and borrowings | | | 117.9 | 90.1 | | 2,146.3 | 2,233.5 |
| | | | | | | | |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Current tax balances | | | 26.7 | 34.5 | | 65.4 | 64.6 |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Deferred tax balances | | | 19.5 | 7.0 | | 459.9 | 449.9 |
| | | | | | | | |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Equity-accounted | | | 14.2 | 13.8 | | - | - |
| investments | | | | | | | |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| Total assets and | | | 5,204.5 | 5,098.5 | | 3,567.1 | 3,669.2 |
| liabilities | | | | | | | |
+-----------------------+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | |
+--+--------------------+---------------+----------+----------+----------+----------+----------+----------+
| Non-current assets by geographic | | | | | | |
| origin 5 | | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+----------+
| Americas | | | 1,948.4 | 1,952.9 | | | |
+------------------------------+--------+----------+----------+----------+----------+----------+----------+
| Europe | | | 1,502.8 | 1,532.3 | | | |
+------------------------------+--------+----------+----------+----------+----------+----------+----------+
| Australia | | | 533.1 | 488.1 | | | |
+------------------------------+--------+----------+----------+----------+----------+----------+----------+
| Other | | | 291.7 | 266.1 | | | |
+------------------------------+--------+----------+----------+----------+----------+----------+----------+
| Total | | | 4,276.0 | 4,239.4 | | | |
+------------------------------+--------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+--+--------------------+------+--------+----------+----------+-+--------+----------+----------+----------+
1 Cash flow from operations is cash flow generated after net capital expenditure
but excluding Significant items that are outside the ordinary course of
business.
2 BVA represents the value generated over and above the cost of the capital used
to generate that value. It is calculated using fixed June 2009 exchange rates
as:
- Underlying profit; plus
- Significant items that are part of the ordinary activities of the business;
less
- Average Capital Invested, adjusted for accumulated pre-tax Significant items
that are part of the ordinary activities of the business, multiplied by 12%.
3 Operating profit is segment revenue less segment expense and excludes net
finance costs.
4 Underlying profit is profit from continuing operations before finance costs,
tax and Significant items. Refer Note 5.
5 Non-current assets exclude financial instruments and deferred tax assets.
Page 10 of 24
Note 4. Profit from ordinary activities - continuing operations
+-+----------------+-------+-------+--------+----------+----------+
| | | | | | First | First |
| | | | | | half | half |
+-+----------------+-------+-------+--------+----------+----------+
| | | | | | 2010 | 2009 |
+-+----------------+-------+-------+--------+----------+----------+
| | | | | | US$m | US$m |
+-+----------------+-------+-------+--------+----------+----------+
| a) Revenue and other income - continuing | | |
| operations | | |
+-------------------------------------------+----------+----------+
| Sales revenue | | | | 2,086.1 | 2,073.2 |
+------------------+-------+-------+--------+----------+----------+
| | | | | | | |
+-+----------------+-------+-------+--------+----------+----------+
| Net gains on disposals of | | | |
| property, plant and equipment | | 4.7 | 5.4 |
+----------------------------------+--------+----------+----------+
| Other operating | | | | 33.5 | 54.8 |
| income | | | | | |
+------------------+-------+-------+--------+----------+----------+
| Other income | | | | 38.2 | 60.2 |
+------------------+-------+-------+--------+----------+----------+
| | | | | | | |
+-+----------------+-------+-------+--------+----------+----------+
| Total income | | | | 2,124.3 | 2,133.4 |
+------------------+-------+-------+--------+----------+----------+
| | | | | | | |
+-+----------------+-------+-------+--------+----------+----------+
| b) Operating expenses - | | | |
| continuing operations | | | |
+----------------------------------+--------+----------+----------+
| Employment costs | | | | 398.5 | 390.3 |
+------------------+-------+-------+--------+----------+----------+
| Service | | | | | |
| suppliers: | | | | | |
+------------------+-------+-------+--------+----------+----------+
| - transport | | | | 371.2 | 400.6 |
+------------------+-------+-------+--------+----------+----------+
| - repairs and | | | | 189.0 | 168.4 |
| maintenance | | | | | |
+------------------+-------+-------+--------+----------+----------+
| - subcontractors and | | | | |
| other service suppliers | | | 233.8 | 241.7 |
+--------------------------+-------+--------+----------+----------+
| Raw materials and | | | 96.6 | 87.4 |
| consumables | | | | |
+--------------------------+-------+--------+----------+----------+
| Occupancy | | | | 134.7 | 129.1 |
+------------------+-------+-------+--------+----------+----------+
| Depreciation of property, plant | | | |
| and equipment | | 205.0 | 199.5 |
+----------------------------------+--------+----------+----------+
| Impairment of pooling equipment | | - | 33.6 |
| (refer Note 5a) | | | |
+----------------------------------+--------+----------+----------+
| Irrecoverable pooling equipment | | 60.2 | 36.5 |
| provision expense | | | |
+----------------------------------+--------+----------+----------+
| Amortisation: | | | | | |
+------------------+-------+-------+--------+----------+----------+
| - software | | | | 11.5 | 11.7 |
+------------------+-------+-------+--------+----------+----------+
| - acquired intangible assets | | 3.5 | 3.5 |
| (other than software) | | | |
+----------------------------------+--------+----------+----------+
| - deferred | | | | 1.9 | 1.9 |
| expenditure | | | | | |
+------------------+-------+-------+--------+----------+----------+
| Other 1 | | | | 83.0 | 94.0 |
+------------------+-------+-------+--------+----------+----------+
| | | | | | 1,788.9 | 1,798.2 |
+-+----------------+-------+-------+--------+----------+----------+
| | | | | | | |
+-+----------------+-------+-------+--------+----------+----------+
| c) Net foreign exchange gains and losses | | |
| - continuing operations | | |
+-------------------------------------------+----------+----------+
| Net (losses)/gains included in | | (0.2) | 28.4 |
| operating profit 1 | | | |
+----------------------------------+--------+----------+----------+
| Net gains included in | | | 1.3 | 0.2 |
| net finance costs | | | | |
+--------------------------+-------+--------+----------+----------+
| | | | | | 1.1 | 28.6 |
+-+----------------+-------+-------+--------+----------+----------+
1 First half 2009 includes a US$29.9 million foreign exchange gain on capital
repatriation from an overseas subsidiary. Refer Note 5 for further details.
Page 11 of 24
Note 5. Significant items - continuing operations
Significant items are items of income or expense which are, either individually
or in aggregate, material to Brambles or to the relevant business segment and:
- outside the ordinary course of business (eg gains or losses on the sale or
termination of operations, the cost of significant reorganisations or
restructuring); or
- part of the ordinary activities of the business but unusual due to their size
and nature.
Significant items are disclosed to assist users of the financial statements to
understand Brambles' business results.
+--+-----------------+-----------+---------+---------+---+------+-+--+---------+
| | | | | | First half | |
| | | | | | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | | 2010 | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | | US$m | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | Before | Tax | After tax |
| | | | | tax | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| Items outside the ordinary course of | | | |
| business: | | | |
+------------------------------------------+---------+------------+------------+
| | - restructuring | | | (2.1) | 0.5 | (1.6) |
| | costs a | | | | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| Significant items from | | (2.1) | 0.5 | (1.6) |
| continuing operations | | | | |
+--------------------------------+---------+---------+------------+------------+
| | | | | | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | | First half | |
| | | | | | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | | 2009 | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | | US$m | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | | | | Before | Tax | After tax |
| | | | | tax | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| Items outside the ordinary course of | | | |
| business: | | | |
+------------------------------------------+---------+------------+------------+
| | - restructuring | | | (106.9) | 40.9 | (66.0) |
| | costs a | | | | | |
+--+-----------------+-----------+---------+---------+------------+------------+
| | - reset of tax cost bases on | - | (5.7) | (5.7) |
| | Unification b | | | |
+--+---------------------------------------+---------+------------+------------+
| | - foreign exchange gain on capital | 29.9 | - | 29.9 |
| | repatriation c | | | |
+--+---------------------------------------+---------+------------+------------+
| Items within ordinary activities, but unusual due to | | |
| size | | |
| and nature: | | |
+--------------------------------------------------------+-----------+---------+
| | - Walmart transition impact | | (20.2) | 7.8 | (12.4) |
| | d | | | | |
+--+-----------------------------+---------+---------+------------+------------+
| | - USA pallet quality | | (34.5) | 13.5 | (21.0) |
| | program costs e | | | | |
+--+-----------------------------+---------+---------+------------+------------+
| Significant items from | | (131.7) | 56.5 | (75.2) |
| continuing operations | | | | |
+--------------------------------+---------+---------+------------+------------+
| | | | | | | |
+--+-----------------+-----------+---------+---------+----------+--------------+
| | | | | | | | | | |
+--+-----------------+-----------+---------+---------+---+------+-+--+---------+
a In February 2009, Brambles announced a restructure of its operations,
estimated to cost US$159- US$169 million before tax, as a response to the
effects of the global economic crisis on its businesses. An impairment charge of
US$33.6 million, a US$61.6 million charge for storage and scrapping costs and
US$3.8 million depreciation expense were booked in first half 2009 against
surplus pallets within the CHEP USA pool. Redundancy and plant closure expenses
of US$56.4 million have been incurred in various countries, of which US$2.1
million was booked in first half 2010 (first half 2009: US$7.9 million; second
half 2009: US$46.4 million).
b During first half 2009, a net adjustment of US$(5.7) million was made to tax
cost bases and other Unification tax matters.
c During first half 2009, capital of EUR250 million was repatriated to Australia
from an overseas subsidiary. As required by AASB 121: The Effects of Changes in
Foreign Exchange Rates, a portion of the accumulated foreign currency
translation reserve previously held in relation to the overseas subsidiary was
recognised in the income statement, resulting in a US$29.9 million foreign
exchange gain.
d During first half 2009, non-recurring transition costs of US$20.2 million due
to loss of white wood revenue and net additional operational costs were incurred
within CHEP USA as a result of Walmart's decision to modify management of pallet
flows within its network in the USA.
e Costs of US$34.5 million and US$42.9 million were incurred within CHEP USA on
the pallet quality program and reported as Significant items in first and second
half 2009 respectively. In October 2009, CHEP USA launched its Better Everyday
customer service and quality program, which is expected to result in ongoing net
costs of approximately US$50 million per annum and additional costs totalling
approximately US$110 million over three years for fast-tracking other elements
of the program. In 1H10, spending under the Better Everyday program, together
with the final US$37 million spending under the USA pallet quality program
announced in February 2008, have been presented within Underlying profit.
Page 12 of 24
Note 6. Discontinued operations
a) Description
In first half 2010, net favourable provision adjustments of US$0.5 milllion
(first half 2009: US$16.3 million) were recognised in respect of divestments
completed in 2007 and prior years which were outside the ordinary course of
business.
b) Income statement and cash flow information - discontinued operations
+----------+----------------+-------+-------+--------+--------+--------+
| | | | | | First | First |
| | | | | | half | half |
+----------+----------------+-------+-------+--------+--------+--------+
| | | | | | 2010 | 2009 |
+----------+----------------+-------+-------+--------+--------+--------+
| | | | | | US$m | US$m |
+----------+----------------+-------+-------+--------+--------+--------+
| | | | | | | |
+----------+----------------+-------+-------+--------+--------+--------+
| Total revenue | | | | - | - |
+---------------------------+-------+-------+--------+--------+--------+
| Operating expenses | | | | - | - |
+---------------------------+-------+-------+--------+--------+--------+
| Profit before tax and Significant | | | - | - |
| items | | | | |
+-----------------------------------+-------+--------+--------+--------+
| Significant items: | | | | | |
+---------------------------+-------+-------+--------+--------+--------+
| - gain recognised on completed | | | 0.5 | 16.3 |
| disposals | | | | |
+-----------------------------------+-------+--------+--------+--------+
| Profit before tax from discontinued | | 0.5 | 16.3 |
| operations | | | |
+-------------------------------------------+--------+--------+--------+
| | | | | | | |
+----------+----------------+-------+-------+--------+--------+--------+
| Tax (expense)/benefit: | | | | | |
+---------------------------+-------+-------+--------+--------+--------+
| - on profit before tax and | | | - | - |
| Significant items | | | | |
+-----------------------------------+-------+--------+--------+--------+
| - on Significant items | | | | (0.1) | 1.2 |
+---------------------------+-------+-------+--------+--------+--------+
| Total tax (expense)/benefit from | | (0.1) | 1.2 |
| discontinued operations | | | |
+-------------------------------------------+--------+--------+--------+
| | | | | | | |
+----------+----------------+-------+-------+--------+--------+--------+
| Profit for the period from discontinued | | 0.4 | 17.5 |
| operations | | | |
+-------------------------------------------+--------+--------+--------+
| | | | | | | |
+----------+----------------+-------+-------+--------+--------+--------+
| Net cash outflow from operating | | | - | (0.5) |
| activities | | | | |
+-----------------------------------+-------+--------+--------+--------+
| Net cash outflow from investing | | | - | - |
| activities | | | | |
+-----------------------------------+-------+--------+--------+--------+
| Net cash outflow from financing | | | - | - |
| activities | | | | |
+-----------------------------------+-------+--------+--------+--------+
| Net decrease in cash from discontinued | | - | (0.5) |
| operations | | | |
+----------+----------------+-------+-------+--------+--------+--------+
Page 13 of 24
Note 7. Earnings per share
+----------+----------------+------------------+----+--------+-+--------+
| | | | | First | | First |
| | | | | half | | half |
+----------+----------------+------------------+----+--------+-+--------+
| | | | | 2010 | | 2009 |
+----------+----------------+------------------+----+--------+-+--------+
| | | | | US | | US |
| | | | | cents | | cents |
+----------+----------------+------------------+----+--------+-+--------+
| Earnings per share | | | | | |
+---------------------------+------------------+----+--------+-+--------+
| - basic | | | 14.8 | | 15.4 |
+---------------------------+------------------+----+--------+-+--------+
| - diluted | | | 14.7 | | 15.3 |
+---------------------------+------------------+----+--------+-+--------+
| | | | | | | |
+----------+----------------+------------------+----+--------+-+--------+
| From continuing | | | | | |
| operations | | | | | |
+---------------------------+------------------+----+--------+-+--------+
| - basic | | | 14.7 | | 14.1 |
+---------------------------+------------------+----+--------+-+--------+
| - diluted | | | 14.7 | | 14.1 |
+---------------------------+------------------+----+--------+-+--------+
| - basic, on Underlying profit after finance | | 14.8 | | 19.5 |
| costs and tax | | | | |
+----------------------------------------------+----+--------+-+--------+
| | | | | | | |
+----------+----------------+------------------+----+--------+-+--------+
| From discontinued operations | | | | |
+----------------------------------------------+----+--------+-+--------+
| - basic | | | 0.1 | | 1.3 |
+---------------------------+------------------+----+--------+-+--------+
| - diluted | | | - | | 1.2 |
+----------+----------------+------------------+----+--------+-+--------+
Options, performance share rights and MyShare matching conditional rights
granted under Brambles' share plans are considered to be potential ordinary
shares and have been included in the determination of diluted earnings per share
to the extent to which they are dilutive.
+----------+------------------+-------------------+----------+----+-------+----------+--+---------+----------+----------+------------+
| | | | | First half | | First half | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | 2010 | | 2009 | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | million | | million | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| a) Weighted average number of shares during the period | | | |
+-------------------------------------------------------------------------+-----------------------+----------+-----------------------+
| Used in the calculation of basic earnings per | | 1,403.8 | | 1,383.8 | |
| share | | | | | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Adjustment for share options and rights | | 3.9 | | 4.6 | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Used in the calculation of diluted earnings per | | 1,407.7 | | 1,388.4 | |
| share | | | | | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | | | | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | First half | | First half | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | 2010 | | 2009 | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | US$m | | US$m | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| b) Reconciliation of profits used in EPS calculations | | | |
+-------------------------------------------------------------------------+-----------------------+----------+-----------------------+
| | | | | | | | |
+----------+------------------+-------------------+----------+------------+----------+----------------------------------+------------+
| Statutory profit | | | |
+-------------------------------------------------------------------------+-----------------------+----------+-----------------------+
| Profit from continuing operations | | 206.7 | | 195.3 | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Profit from discontinued operations | | 0.4 | | 17.5 | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Profit used in calculating basic and diluted | | 207.1 | | 212.8 | |
| EPS | | | | | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | | | | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| Underlying profit after finance costs and tax | | | | | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Underlying profit (Note 3) | | | 340.2 | | 469.3 | |
+-----------------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| Net finance costs | | | (54.0) | | (63.7) | |
+-----------------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| Underlying profit before | | | 286.2 | | 405.6 | |
| tax | | | | | | |
+-----------------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| Tax expense on Underlying profit | | (77.9) | | (135.1) | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Underlying profit after finance costs and tax | | 208.3 | | 270.5 | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | | | | |
+----------+------------------+-------------------+---------------+------------------+--+-------------------------------+------------+
| which reconciles to statutory profit: | | | | | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Underlying profit after finance costs and tax | | 208.3 | | 270.5 | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Significant items after tax (Note 5) | | (1.6) | | (75.2) | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| Profit from continuing operations | | 206.7 | | 195.3 | |
+-------------------------------------------------+---------------+------------------+--+-------------------------------+------------+
| | | | | | | | | | | | |
+----------+------------------+-------------------+----------+----+-------+----------+--+---------+----------+----------+------------+
Page 14 of 24
Note 8. Dividends
a) Dividends declared and paid during the period
+----------+----------------+----------------+------+---------+----------+---------+
| | | | | Interim | | Final |
| | | | | | | |
+----------+----------------+----------------+------+---------+----------+---------+
| | | | | 2009 | | 2009 |
+----------+----------------+----------------+------+---------+----------+---------+
| | | | | | | |
+----------+----------------+----------------+------+---------+----------+---------+
| Dividend per share (in Australian cents) | | 17.5 | | 12.5 |
+--------------------------------------------+------+---------+----------+---------+
| Franked amount at 30% tax (in Australian | | 1.75 | | 2.50 |
| cents) | | | | |
+--------------------------------------------+------+---------+----------+---------+
| Cost (in US$ million) | | | 176.3 | | 160.5 |
+---------------------------+----------------+------+---------+----------+---------+
| Payment date | | | 9 | | 8 |
| | | | April | | October |
| | | | 2009 | | 2009 |
+----------+----------------+----------------+------+---------+----------+---------+
b) Dividend declared after reporting date
+----------+----------------+------------------+----+---------+
| | | | | Interim |
| | | | | |
+----------+----------------+------------------+----+---------+
| | | | | 2010 |
+----------+----------------+------------------+----+---------+
| | | | | |
+----------+----------------+------------------+----+---------+
| Dividend per share (in Australian cents) | | 12.5 |
+----------------------------------------------+----+---------+
| Franked amount at 30% tax (in Australian | | 2.5 |
| cents) | | |
+----------------------------------------------+----+---------+
| Cost (in US$ million) | | | 156.9 |
+---------------------------+------------------+----+---------+
| Dividend record date | | | 18 |
| | | | March |
| | | | 2010 |
+---------------------------+------------------+----+---------+
| Payment date | | | 8 |
| | | | April |
| | | | 2010 |
+----------+----------------+------------------+----+---------+
As this dividend had not been declared at the reporting date, it is not
reflected in the financial statements.
Note 9. Issued and quoted securities
+----------+----------------+----+-------------+-+----------------+----------+
| | | | Options | | Ordinary securities |
+----------+----------------+----+-------------+-+---------------------------+
| | | | Number | | Number | US$m |
+----------+----------------+----+-------------+-+----------------+----------+
| | | | | | | |
+----------+----------------+----+-------------+-+----------------+----------+
| At 1 July 2009 | | 9,170,399 | | 1,401,869,039 | 13,847.6 |
+---------------------------+----+-------------+-+----------------+----------+
| Issued during the period | | 3,845,886 | | 10,386,399 | 64.8 |
+---------------------------+----+-------------+-+----------------+----------+
| Exercised during the | | (1,116,508) | | - | - |
| period | | | | | |
+---------------------------+----+-------------+-+----------------+----------+
| Lapsed during the period | | (1,466,657) | | - | - |
+---------------------------+----+-------------+-+----------------+----------+
| At 31 December 2009 | | 10,433,120 | | 1,412,255,438 | 13,912.4 |
+----------+----------------+----+-------------+-+----------------+----------+
Page 15 of 24
Note 10. Reserves
a) Movements in reserves
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
| | | | Share- | Foreign | | | |
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
| | | | based | currency | | | |
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
| | | Hedging | payments | translation | Unification | Other | Total |
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
| | | US$m | US$m | US$m | US$m | US$m | US$m |
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
| Half-year ended 31 | | | | | | |
| December 2008 | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Opening balance | (0.2) | 65.8 | 481.4 | (15,385.8) | 167.3 | (14,671.5) |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| FCTR released to profits | - | - | (29.9) | - | - | (29.9) |
| during the period | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Foreign exchange | - | - | (277.9) | - | - | (277.9) |
| differences | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Cash flow hedges: | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - fair value losses | (26.4) | - | - | - | - | (26.4) |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - tax on fair value losses | 9.1 | - | - | - | - | 9.1 |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - transfers to net profit | 3.4 | - | - | - | - | 3.4 |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - tax on transfers to net | (1.3) | - | - | - | - | (1.3) |
| profit | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Share-based payments: | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - expense recognised | - | 7.2 | - | - | - | 7.2 |
| during the period | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - shares issued | - | (5.0) | - | - | - | (5.0) |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - equity component of | - | (0.8) | - | - | - | (0.8) |
| related tax | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Closing balance | (15.4) | 67.2 | 173.6 | (15,385.8) | 167.3 | (14,993.1) |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| | | | | | | | |
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
| Half-year ended 31 | | | | | | |
| December 2009 | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Opening balance | (9.5) | 71.1 | 218.2 | (15,385.8) | 167.3 | (14,938.7) |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Foreign exchange | - | - | 81.4 | - | - | 81.4 |
| differences | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Cash flow hedges: | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - fair value losses | (5.4) | - | - | - | - | (5.4) |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - tax on fair value losses | 2.6 | - | - | - | - | 2.6 |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - transfers to net profit | 7.5 | - | - | - | - | 7.5 |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - transfers to property, | (0.4) | - | - | - | - | (0.4) |
| plant and equipment | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - tax on transfers to net | (2.8) | - | - | - | - | (2.8) |
| profit | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Share-based payments: | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - expense recognised | - | 8.4 | - | - | - | 8.4 |
| during the period | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - shares issued | - | (4.6) | - | - | - | (4.6) |
| | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| - equity component of | - | 0.9 | - | - | - | 0.9 |
| related tax | | | | | | |
+----------------------------+---------+----------+-------------+-------------+--------+------------+
| Closing balance | (8.0) | 75.8 | 299.6 | (15,385.8) | 167.3 | (14,851.1) |
+-+--------------------------+---------+----------+-------------+-------------+--------+------------+
b) Nature and purpose of reserves
Hedging reserve
This comprises the cumulative portion of the gain or loss of cash flow hedges
that are determined to be effective hedges. Amounts are recognised in the income
statement when the associated hedged transaction is recognised or the hedge or a
portion thereof becomes ineffective.
Share-based payments reserve
This comprises the cumulative share-based payment expense recognised in the
income statement in relation to equity-settled options and share rights issued
but not yet exercised.
Foreign currency translation reserve
This comprises cumulative exchange differences arising from the translation of
the financial statements of foreign subsidiaries, net of qualifying net
investment hedges. The relevant accumulated balance is recognised in the income
statement on disposal of a foreign subsidiary.
Page 16 of 24
Unification reserve
On Unification, Brambles Limited issued shares on a one-for-one basis to those
Brambles Industries Limited (BIL) and Brambles Industries plc (BIP) shareholders
who did not elect to participate in the Cash Alternative. The Unification
reserve of US$15,385.8 million represents the difference between the Brambles
Limited share capital measured at fair value on 4 December 2006, and the
carrying value of the share capital of BIL and BIP at that date.
Other
This comprises a merger reserve created in 2001 and a capital redemption reserve
created in 2006.
Note 11. Equity-accounted investments
a) Joint ventures
Brambles has investments in the following unlisted jointly controlled entities,
which are accounted for using the equity method.
+----------+------------------------+--------+-----------+-------+------+---+-----+----------+
| | | | | | % interest held |
+----------+------------------------+--------+-----------+-------+---------------------------+
| | | | | | at reporting date |
+----------+------------------------+--------+-----------+-------+---------------------------+
| | | | Place | | December | December |
| | | | of | | | |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| Name (and nature of business) | | incorporation | 2009 | 2008 |
+-----------------------------------+--------+-------------------+----------+----------------+
| | | | | | | |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| CISCO - Total Information Management Pte. | Singapore | | 49% | 49% |
| Limited | | | | |
+--------------------------------------------+-----------+-------+----------+----------------+
| (Information management) | | | | | |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| Recall Becker GmbH & Co. KG | | Germany | | 50% | 50% |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| (Document management services) | | | | | |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| |
+--------------------------------------------------------------------------------------------+
| b) Share of results of joint ventures - continuing | First | First half |
| operations | half | |
+----------------------------------------------------------------+----------+----------------+
| | | | | | 2010 | 2009 |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| | | | | | US$m | US$m |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| Profit from ordinary activities | | | | 3.2 | 2.9 |
| before tax | | | | | |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| Tax expense on ordinary | | | | (0.5) | (0.5) |
| activities | | | | | |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| Profit for the period | | | | 2.7 | 2.4 |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| | | | | | | |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| | | | | | | |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| Note 12. Net tangible asset | | | | First | First half |
| backing | | | | half | |
+-----------------------------------+--------+-----------+-------+----------+----------------+
| | | | | | 2010 | 2009 |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| | | | | | US cents | US cents |
| | | | | | | |
+----------+------------------------+--------+-----------+-------+----------+----------------+
| Net tangible assets backing based on 1,412.3 | | | | |
| million shares | | | | |
+--------------------------------------------------------+-------+------+---------+----------+
| (First half 2009: 1,384.8 million shares) | | | 58.8 | 37.5 |
+--------------------------------------------+-----------+-------+----------+----------------+
| | | | | | | | | |
+----------+------------------------+--------+-----------+-------+------+---+-----+----------+
Net tangible assets backing per share is calculated by dividing total equity
attributable to the members of the parent entity, less goodwill and intangible
assets, by the number of shares on issue at period end.
Note 13. Contingent liabilities
There have been no material changes in Brambles' contingent liabilities as set
out in Brambles' 2009 Annual Report.
Note 14. Events after balance sheet date
Except as outlined in the Directors' Report or elsewhere in these consolidated
financial statements, there have been no other events that have occurred
subsequent to 31 December 2009 that have had a material impact on Brambles'
financial performance or position.
Page 17 of 24
Directors' declaration
In the opinion of the Directors of Brambles Limited:
(a) the financial statements and notes set out on pages 3 to 17 are in
accordance with the Australian Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the financial position of Brambles as
at 31 December 2009 and of its performance for the half-year ended on that date;
(b) there are reasonable grounds to believe that Brambles Limited will be
able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors.
S P Johns
Director
T J Gorman
Chief Executive Officer
Sydney
17 February 2010
Page 18 of 24
[PricewaterhouseCoopers Letterhead]
Independent auditors' review report to the members of
Brambles Limited
Report on the half-year financial report
We have reviewed the accompanying half-year financial report of Brambles Limited
(the Company), which comprises the balance sheet as at 31 December 2009, and the
income statement, the statement of comprehensive income, statement of changes in
equity and cash flow statement for the half-year ended on that date, other
selected explanatory notes and the Directors' declaration for Brambles.
Brambles comprises the Company and the entities it controlled during that
half-year.
Directors' responsibility for the half-year financial report
The Directors of the Company are responsible for the preparation and fair
presentation of the half-year financial report in accordance with Australian
Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Act 2001. This responsibility includes establishing and
maintaining internal control relevant to the preparation and fair presentation
of the half-year financial report that is free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the
circumstances.
Auditors' responsibility
Our responsibility is to express a conclusion on the half-year financial report
based on our review. We conducted our review in accordance with Auditing
Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report
Performed by the Independent Auditor of the Entity, in order to state whether,
on the basis of the procedures described, we have become aware of any matter
that makes us believe that the financial report is not in accordance with the
Corporations Act 2001 including: giving a true and fair view of Brambles'
financial position as at 31 December 2009 and its performance for the half-year
ended on that date; and complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001. As the auditor of
Brambles Limited, ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily
of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. It also includes reading the other
information included with the financial report to determine whether it contains
any material inconsistencies with the financial report. A review is
substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Page 19 of 24
While we considered the effectiveness of management's internal controls over
financial reporting when determining the nature and extent of our procedures,
our review was not designed to provide assurance on internal controls.
Our review did not involve an analysis of the prudence of business decisions
made by Directors or management.
Independence
In conducting our review, we have complied with the independence requirements of
the Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half-year financial report of Brambles
Limited is not in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of Brambles' financial position as at 31
December 2009 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting
and Corporations Regulations 2001.
PricewaterhouseCoopers
M G Johnson
Sydney
Partner
17 February 2010
M Dow
Sydney
Partner
17 February 2010
Page 20 of 24
Directors' report
The Directors present the interim results of the consolidated entity consisting
of Brambles Limited and the entities it controlled at the end of, or during, the
half-year ended 31 December 2009 (Brambles).
Names of Directors
The Directors of Brambles Limited in office during the half-year and up to the
date of this report are as follows:
G J Kraehe AO (Non-executive Chairman)
T J Gorman (Executive Director, CEO) (appointed 1 December 2009)
G J Hayes (Executive Director, CFO) (appointed 1 December 2009)
A G Froggatt (Non-executive Director)
D P Gosnell (Non-executive Director) (will retire 31 March 2010)
S P Johns (Non-executive Director)
S C H Kay (Non-executive Director)
C L Mayhew (Non-executive Director)
J P Mullen (Non-executive Director) (appointed 1 November 2009)
B M Schwartz AM (Non-executive Director)
M E Doherty (Executive Director, CFO) (resigned 16 November 2009)
M F Ihlein (Executive Director, CEO) (retired 1 November 2009)
Review of operations
Group sales revenue was US$2,086.1 million, down 2% in constant currency (up 1%
actual currency). The lower sales revenue was predominantly a result of the
subdued business conditions in some of Brambles' largest markets: the USA, the
UK and Spain.
Statutory operating profit was US$338.1 million, down 3% in constant currency
(flat at actual currency). Profit after tax from continuing operations was
US$206.7 million, up 2% in constant currency (up 6% actual currency).
Underlying profit was US$340.2 million, down 30% in constant currency (down 28%
actual currency). Underlying profit was impacted by the rollout of the Better
Everyday program in CHEP USA. Underlying profit after finance costs and tax was
US$208.3 million, down 26% in constant currency (down 23% actual currency).
Earnings per share (EPS) were down 8% to 14.8 US cents in constant currency
(down 4% actual currency).
Cash flow from operations was US$400.3 million, up US$179.5 million reflecting
significant reduction in capital expenditure and an improved working capital
outcome. This occurred while the company continued to invest in initiatives that
will underpin its long-term profitable growth. Brambles' free cash flow after
dividends was US$133.3 million, a US$223.9 million improvement on the prior
corresponding period.
Brambles' balance sheet remains strong. Net debt at 31 December 2009 was
US$2,028.4 million, down US$115.0 million on 30 June 2009. Undrawn committed
credit facilities were US$1,317.2 million, providing ample scope to meet organic
investment and growth requirements.
Business unit performance:
· CHEP Americas' sales revenue was US$756.9 million, down 5% in constant
currency (down 4% actual currency). The largest impact was a 7% reduction in
sales revenue in CHEP USA resulting from lower organic issue volumes; the impact
of net business losses; and changes in pricing and sales mix. Statutory
operating profit increased 36% to US$108.6 million but Underlying profit was
down 54% at constant currency (down 53% actual currency). This difference
reflects CHEP Americas' recognition in the prior corresponding period of
US$153.7 million Significant items. In the first half of the 2010 financial
year, CHEP Americas did not recognise any Significant items. CHEP Americas has
included in Underlying profit its expenditure on quality initiatives of US$64.8
million, comprising the Better Everyday program and the balance of the USA
pallet quality program.
Page 21 of 24
· CHEP Europe, Middle East & Africa (EMEA) sales revenue was down 1% in
constant currency to US$770.1 million (up 1% actual currency) as a result of
slower economic conditions. Pallet issue volumes in Europe were in line with the
prior corresponding period as new business wins in less mature CHEP markets such
as Italy and Central & Eastern Europe offset a 1% reduction in organic volumes.
Statutory operating profit was US$159.3 million, down 8% in constant currency
(down 4% actual currency) and Underlying profit was US$161.4 million, down 9% in
constant currency (down 6% actual currency). Higher storage and handling costs
and irrecoverable pooling equipment provision expense impacted profit, partially
offset by the benefits of restructuring undertaken in the 2009 financial year.
· CHEP Asia-Pacific delivered sales revenue growth of 4% to US$195.0
million (up 17% actual currency). CHEP Australia offset the impact of a weak
automotive sector and lower pallet hire balances from supply chain destocking
with greater diversification of its revenue streams, notably through growth in
reusable plastic containers and plastic display pallets. Statutory operating
profit was 6% lower at constant currency (up 14% actual currency) and Underlying
profit was down 7% at constant currency to US$32.5 million (up 12% actual
currency). Impacts on profit included the subdued conditions in the Australian
automotive sector; depreciation expense on new pooling assets purchased last
year; and lower pallet hire balances.
· Recall's sales revenue was 1% lower in constant currency at US$364.1
million (up 3% actual currency), reflecting lower paper prices and volumes in
the Secure Destruction Services (SDS) service line. Carton volumes in the
Document Management Solutions (DMS) service line increased 5%. Statutory
operating profit was in line with the prior corresponding period at US$52.5
million (up 6% actual currency). Underlying profit was down 2% at constant
currency (up 4% actual currency).
Principal risks
Because of its secondary listing on the London Stock Exchange, Brambles is
required to disclose in its half-yearly report a description of its principal
risks and uncertainties for the second half of the financial year.
A description of such risks and uncertainties is set out below:
· Economic cycle - Brambles has operations spread across a diverse range
of countries and territories. It is subject to risks related to global economic
and business conditions. These may affect, among other things, profitability,
demand for Brambles' services and solvency of counterparties.
· Business environment changes - Brambles has operations spread across a
diverse range of countries and territories. It is subject to risks related to
rapid and sustained changes in the business environment, which may invalidate
aspects of its current business models. These changes could include fuel prices,
lumber supply and the structure of customers' supply chains. These may affect,
among other things, profitability and demand for Brambles' services.
· Regulatory compliance - Material changes in the regulatory and legal
environments in which Brambles' businesses operate may give rise to the risk of
an adverse impact on aspects of its current business models. These may affect,
among other things, licences to operate, profitability and a reduced ability to
control costs. Material changes in Brambles' ability to comply with the
regulatory environment, including competition laws, could give rise to
litigation and, in turn, affect reputation, profitability and licences to
operate.
· Competition and retention of major customers - Brambles operates in a
competitive environment. Many of the markets in which Brambles operates are
served by numerous competitors and are subject to the threat of new entrants.
In addition, the concentration of distributors in certain areas could lead to
shifts in bargaining position and intensity of competition. The above risks
could have an impact on market structure, market penetration, revenue,
profitability, economies of scale and the value of existing assets.
· Insufficient growth - Brambles is subject to the risk of not selecting
the optimal corporate strategy, business model, financial structure or capital
allocation, including the pace of expansion into emerging markets. As these are
central to the value of shareholders' investment and protection of Brambles'
assets, Brambles may be unable to capture the full value of its growth
opportunities.
· Innovation - Brambles is subject to the risk of not being able to
optimise innovations in its services, products, processes and commercial
solutions, including capturing the full value of any innovations that support
its growth opportunities. This could have an impact on revenue, profitability,
economies of scale and the value of existing assets.
Page 22 of 24
· Operational improvement - Brambles is subject to the risk that it may be
unable to capture the full value of operational improvement opportunities. This
could result in a reduced ability to control costs or a reduction in control of
CHEP's equipment pool.
· Equipment quality - Satisfaction of CHEP customers may fluctuate with
the customers' perceived views of equipment quality which, in turn, is
influenced by the effectiveness of the quality standards that CHEP employs in
its equipment pool. Brambles is subject to the risk that it may not optimise
these standards, thereby adversely affecting customer satisfaction with the CHEP
service offering and/or the operating and capital costs of the equipment pool.
· People capability - Brambles is subject to the risk of not attracting,
developing and retaining high performing individuals in the optimum
organisational structure, which could result in it not having sufficient quality
and quantity of people to meet its growth and business objectives.
· Market communication - Brambles is subject to risks relating to market
expectations, which may lead to a loss of investor confidence in the business
and its management.
· Systems and technology - Brambles relies on the continuing operation of
its information technology and communications systems, including those in CHEP's
Global Data Centre. Failure to optimise these systems, or an extended systems
interruption event, could impair Brambles' ability to provide its services
effectively. This could damage its reputation and, in turn, have an adverse
effect on its ability to attract and retain customers.
· Force majeure - Brambles is subject to the risk of strikes, terrorism,
war, fire, flood, earthquakes and other acts of God and other acts outside its
control. Whilst Brambles maintains appropriate insurances and fire protection
controls, some of these force majeure risks may be uninsurable or exceed the
level or scope of Brambles' insurance.
· Safety - Brambles is subject to various operational hazards, including
industrial, road traffic or transportation accidents that could potentially
result in injury or fatality to employees, contractors or the public. Brambles
has adopted a Zero Harm policy to manage its safety risks.
Responsibility statement
For the purposes of compliance with the UK Disclosure and Transparency Rules
(DTR), the Directors confirm that, to the best of their knowledge, the interim
management report (being this Directors' Report) includes a fair review of the
information required by DTR 4.2.7 R (an indication of important events that have
occurred during the half-year and their impact on the financial statements; and
a description of the principal risks and uncertainties for the second half of
the financial year). There is no disclosure to make under DTR 4.2.8 R (related
parties transactions that have taken place in the half-year and that have
materially affected the financial position or the performance of the company
during that period; and any changes in the related parties transactions
described in the Brambles 2009 Annual Report that could have a material effect
on the financial position or performance of the company in the half-year).
Auditors' independence declaration
The auditors' independence declaration, as required under Section 307C of the
Corporations Act 2001, is set out on page 24 and forms part of this report.
This report is made in accordance with a resolution of the Directors.
S P Johns
Director
T J Gorman
Chief Executive Officer
Sydney
17 February 2010
Page 23 of 24
[PricewaterhouseCoopers letterhead]
Auditors' independence declaration
As lead auditor for the review of Brambles Limited for the half-year ended 31
December 2009, I declare that to the best of my knowledge and belief, there have
been:
a) no contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the review; and
b) no contraventions of any applicable code of professional conduct in
relation to the review.
This declaration is in respect of Brambles Limited and the entities it
controlled during the period.
M G Johnson
Sydney
Partner
17 February 2010
PricewaterhouseCoopers
Liability limited by a scheme approved under Professional Standards Legislation
Page 24 of 24
This information is provided by RNS
The company news service from the London Stock Exchange
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