This year was also one of transition and renewal, during which we welcomed our new CEO and CFO, took strategic actions in relation to our Oil and Gas, Aerospace and CHEP Recycled businesses and refocused our strategy on the core drivers of value.
Operating Challenges and Withdrawal of the FY19 Targets
We entered FY17 with confidence following a successful FY16 where we had achieved strong growth. Unfortunately, the unexpected challenges in our largest business, US pallets, which emerged in the final months of the 2016 calendar year, led to the lowering of the Company’s FY17 guidance in February 2017.
The impact of these challenges on the Group’s projections for FY18 and FY19, coupled with the need for financial flexibility to allow our businesses to meet the evolving needs of customers and maintain our network advantage, were the principal reasons for the Board’s decision to withdraw the FY19 financial targets (originally announced to the market in December 2013). This decision also recognised the reality of the changing operating conditions and increasingly competitive landscape in our major markets.
While our FY17 performance was disappointing, the underlying strength of all of our businesses, including US pallets, remains intact.
Looking forward, Brambles is committed to leveraging its global scale and industry-leading expertise as we collaborate with customers to build the supply chains of the future. We seek to deliver growth and operational excellence in our core pallet, RPC and container pooling businesses through a focus on the core drivers of value, which include: strengthening our network advantage; delivering operational and organisational efficiencies; driving disciplined capital allocation and improved cash generation; and developing our people.
We are also committed to investing in innovation and technology to explore the opportunities to support customers more closely. These include developing innovative solutions for omni-channel retail and e-commerce supply chains as well as exploring the role of technology in delivering customer insights and driving operational efficiencies.