Brambles at a Glance

Brambles’ purpose is to connect people with life’s essentials every day.

Through its ‘share and reuse’ model, Brambles moves more goods to more people in more places than any other organisation.

What Brambles does:

As a pioneer of the sharing economy, Brambles is one of the world’s most sustainable logistics businesses.

Its circular business model perpetuates the share and reuse of the world’s largest pool of reusable pallets and containers.

This enables Brambles to serve its customers while minimising the impact on the environment and improving the efficiency and safety of supply chains around the world.

Brambles’ platforms form the invisible backbone of global supply chains, primarily serving the fast-moving consumer goods, fresh produce, beverage, retail and general manufacturing industries.

The world’s largest brands trust Brambles to help them transport life’s essentials more efficiently, safely and sustainably.

As at 30 June 2019, Brambles:

Operated in...







~330 million

pallets, crates and containers

Through a network of...


service centres

How Brambles Creates Value

Brambles uses the power of its circular business model, network advantage and unique expertise to leverage the key capital inputs into its business to generate significant value for customers, shareholders and employees.

For customers, Brambles’ end-to-end supply chain solutions deliver operational, financial and environmental efficiencies not otherwise available through one-way, single-use alternatives.

For shareholders, Brambles delivers sustainable growth at returns well in excess of the cost of capital and seeks to generate sufficient cash flow through the cycle to fund dividends and support reinvestment in growth, innovation and the development of its people.

For employees, Brambles provides development and exciting career opportunities in approximately 60 countries. By fostering a culture of innovation and agility, Brambles seeks to attract and retain the talent which is integral to its success.

In a resource-constrained world, circular business models like that operated by Brambles are recognised as a critical economic evolution to enable the world to trade more responsibly. By regenerating what it extracts and by providing its products via a service, Brambles helps reduce both the constant pressure on natural resources and the waste production typical of conventional linear business models.

Brambles capitalises on its unique position in the supply chain to enable customer collaboration and address sustainable development challenges, such as optimising transport networks, addressing food waste and promoting sustainable use of the world’s forests.

In this way, Brambles creates a circular economy, on a global scale.

Brambles has used the Integrated Reporting <IR> 'capitals' framework1 to illustrate the interaction and interdependencies between its sources of value, business model and ability to create value over time.

1 The International Integrated Reporting <IR> Framework. Integrated Reporting highlights the key resources and relationships used and affected by an organisation.

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2 United Nations Sustainable Development Goal 12 aligns with Brambles' circular business model. For more information see

3 Economic value is a measure of the broader financial benefit provided by an organisation.

2019 was a year of transition for Brambles as it positioned itself to deliver enhanced value for customers, employees and shareholders.

View CHAIRMAN’S Letter
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The sale of our IFCO RPC business allows us to set a new ambitious direction for Brambles into the 2020s and beyond.

View CEO’S Letter
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Strategic Priorities

Brambles is committed to being the global leader in platform pooling solutions and insight-based solutions to fast-moving supply chains.

Brambles seeks to:

  • Achieve and maintain number one positions in each region of operation;
  • Lead the industry in customer service, innovation and sustainability; and
  • Be an employer of choice through best-in-class safety, diversity and talent development programmes.

Brambles’ five strategic priorities guide decision making across the Group and are integral to the delivery of superior value for customers, shareholders and employees over the long term.

Brambles’ network advantage, comprising the scale and density of its customer and service centre network and its industry-leading asset management expertise, is a critical element of the Group’s value proposition for both customers and investors.

Brambles continues to deepen its network advantage by growing in core businesses and rapidly scaling in newer markets. The increasing importance of sustainability in end-to-end supply chains further increases the value of Brambles’ service offering to its customers.

Brambles is committed to improving the customer experience further through simpler processes, additional services and enhanced platform quality.

Brambles seeks to offset the impact of cost inflation and competitive price pressures through efficiencies in areas such as procurement, plant automation and transport optimisation.

With a more focused portfolio there are increased opportunities to share best practices and simplify processes across the Group to build a leaner, more collaborative and effective organisation.

Brambles allocates capital in a disciplined manner to maintain and grow its existing businesses, to drive innovation and to manage its portfolio of products and services. The Group pursues a focused strategy in relation to mergers and acquisitions.

A key strategic objective for the Group is to deliver strong and sustainable cash generation. Brambles aims to achieve this through an increased focus on improving asset utilisation, reducing equipment loss and lowering equipment damage rates.

Brambles is committed to developing and maintaining an innovative portfolio of products and services to meet the evolving needs of current and future customers.

Brambles is constantly innovating in new materials and platforms that enable its customers to increase sales, gain greater market insights and improve operational efficiencies in a changing retail landscape.

Alongside innovation in physical products, Brambles is investing to transform information and digital insights into new sources of value for itself and for its customers. Brambles sees data and technology as core strengths and sources of future competitive advantage.

Successfully attracting and retaining high calibre people is integral to Brambles’ ongoing success and will become increasingly important as new skills are required in areas such as digital services and automated supply chains. Brambles’ key priorities for its employees are safety, engagement and capability-building. The Group is committed to fostering a culture of agility, innovation and continuous improvement.

Operating Model

Brambles manages the world’s largest pool of reusable pallets and containers.

As a pioneer of the sharing economy, Brambles promotes the shared use of its platforms among multiple supply chain participants under a circular ‘share and reuse’ model known as pooling.

Through its inherently sustainable operating model, superior network advantage and industry expertise, Brambles leads the market in smarter and more sustainable supply chains.

Brambles’ ‘share and reuse’ model follows the principles of the circular and sharing economies, creating more efficient supply chains by reducing operating costs and demand on natural resources. By promoting the share and reuse of assets among multiple parties in the supply chain, Brambles offers customers a more efficient and sustainable alternative to the use of disposable products or managing their own proprietary platforms.

Brambles’ sustainable operating model is underpinned by its superior network advantage and industry-leading supply chain expertise, developed over 70 years of managing customers’ supply chains around the world. With operations in approximately 60 countries, Brambles’ network advantage comprises the scale and density of its service centre network and the strength of its customer relationships in every market in which it operates. This means Brambles can be faster and more responsive to customers’ needs.

Brambles’ sustainability framework organises the Group’s sustainability activities and goals under three broad programmes: Better Business; Better Planet; and Better Communities.

The sustainability framework identifies input sourcing, particularly lumber, and safety as the Group’s key material sustainability risks. A full review of Brambles’ sustainability risks and performance will be included in the 2019 Sustainability Review, which will be available on Brambles’ website in September 2019.

The Group’s 2020 Sustainability Goals are incorporated into this framework and address the material sustainability aspects of Brambles’ value chain. These goals are also aligned to the United Nations Sustainable Development Goals (SDGs), in particular SDG 12: Responsible Consumption and Production, which aligns with Brambles’ sustainable business model.

Brambles is currently undertaking a materiality process to develop its 2025 sustainability programme with the intention of announcing the new commitments in FY20. This preparatory work involves consultation with our key stakeholders including customers, investors, non-government organisations, thought leaders, industry bodies, management and employees.

Customer Value Proposition

Brambles’ pallets and containers form the invisible backbone of the global supply chain. This gives Brambles key insights that help customers meet evolving consumer demands while minimising their environmental impact and improving the safety and efficiency of their supply chains.

With a comprehensive suite of supply chain solutions, Brambles provides customers with operational, financial and environmental efficiencies not otherwise available through the use of disposable alternatives and proprietary models.

Supply Chain Solutions

Brambles is integral to customers’ supply chains, working closely with all participants including manufacturers, producers, growers and retailers. With end-to-end involvement, Brambles has clear insights into what impacts the safe, efficient and sustainable operation of global supply chains.

By leveraging these insights and its unmatched expertise, Brambles offers customers comprehensive solutions that improve the performance of the supply chain. This helps address the challenges associated with the increasing complexity and rapid evolution of modern supply chains.

Brambles offers customers the widest range of supply chain platforms including: pallets (timber, plastic and display), Reusable Plastic Crates (RPCs), bins and specialised containers as well as unit-load containment and safe handling equipment.

By eliminating the need for customers to purchase and manage their own platforms, Brambles reduces the capital requirements and complexity of customers’ operations while simultaneously reducing waste from their supply chains.

Brambles conducts in-depth studies of customers’ supply chains to map the flow of goods, information and platforms to identify the causes of network inefficiencies and product damage.

By determining the optimal mix of platforms and processes for customers’ individual supply chains, Brambles can mitigate network inefficiencies and ensure the safe and sustainable transportation of goods through the supply chain.

Brambles’ superior network scale provides a unique capability to coordinate collaboration between multiple supply chain participants to deliver transport efficiencies. This includes matching and eliminating empty transport lanes, sharing transport and contracting transport for and from customers.

Brambles works closely with customers to develop retail store solution strategies and consumer-facing platforms that improve the efficiency of the shared supply chain by increasing sales at lower costs to the supplier, retailer and consumer.

These merchandising and fulfilment solutions, which include full size and fractional display pallets, trays and RPCs, effectively reduce the time, labour and activity required to move goods from the point of production to the point of sale.

Using its experience in managing platforms, optimising automated facilities and packaging performance testing, Brambles has developed solutions that improve the overall performance and efficiency of customers’ facilities. These solutions include: customising customers’ platform processes; optimising how customers configure, build and protect product loads; and providing higher quality platforms and engineering services to improve the performance of automated facilities.

Brambles creates value for customers by providing a sustainable alternative to single-use packaging, saving customers money and significantly reducing the environmental impact of their operations. In this way, Brambles presents a working circular model for customers to reference as they adapt to growing consumer awareness around sustainability issues in supply chains.

Zero waste world

In FY19, Brambles launched its Zero Waste World initiative in North America and Europe to reinforce its commitment to collaborate with customers to create smarter and more sustainable supply chains – creating more value and using fewer resources. Through this initiative, Brambles seeks to use its unique position in the supply chain to help customers address three key industry challenges:


Eliminating waste

by using its circular economy expertise to convert customers to more sustainable share and reuse solutions which save resources and reduce costs;


Eradicating empty transport miles

by using its network scale and visibility to facilitate collaborative transport solutions, bringing manufacturers and retailers together to reduce the environmental impact of their operations and save money; and


Reducing inefficiencies

by using its end-to-end supply chain solutions and BXB Digital technology to enhance customers’ visibility of their supply chains so they can make better decisions.

Investor Value Proposition

Brambles generates value through a virtuous circle that leverages its scale, density and expertise to achieve superior operational efficiencies.

These efficiencies in turn generate cash flow that can either be returned to shareholders or reinvested in the business to fund growth, innovation and development of its people.


Brambles shares the efficiencies generated by its scale, density and expertise with its customers, providing a compelling value proposition compared to alternatives. By providing customers with supply chain solutions in approximately 60 countries, Brambles offers shareholders exposure to geographically diversified earning streams, primarily from the global consumer staples sector.

The supply chains served by Brambles also provide a broad range of growth opportunities including: increasing penetration of core equipment-pooling products and services in existing markets; diversifying the range of products and services; entering new and adjacent parts of existing supply chains; and exploring the digitisation of supply chains.

Within this context, Brambles is committed to striking the right balance between growing its business and delivering sustainable shareholder returns over the long term. By focusing on its core drivers of value, Brambles expects to deliver:

Sustainable growth at returns well in excess of the cost of capital

  • Sales revenue growth5 in the mid-single digits;
  • Underlying Profit growth5 in excess of sales revenue growth through the cycle; and
  • Strong Return on Capital Invested.

Cash generation to fund growth, innovation and shareholder returns

  • Free Cash Flow sufficient to fully fund capital expenditure and dividends.

5 At constant-currency

The Board has declared a final dividend for 2019 of 14.5 AU cents per share, in line with the previous interim and final dividends. The 2019 final dividend will be 30% franked and is payable on 10 October 2019 to shareholders on the Brambles register at 5.00pm on 12 September 2019. The ex‑dividend date is 11 September 2019.

Total dividends for the Year were 29.0 AU cents per share, in line with the prior year. Brambles paid a 65% franked 2019 interim dividend of 14.5 AU cents per share on 11 April 2019.

Following the sale of its IFCO RPC business, the Brambles Board has reviewed Brambles’ current progressive dividend policy. Under this policy, the Group seeks to maintain or increase dividends per share each year, in Australian cents, subject to its financial performance and cash requirements. From the FY20 interim dividend, Brambles will move to a payout ratio based dividend policy, targeting a payout ratio of 45-60% of Underlying Profit after finance costs and tax, subject to Brambles’ cash requirements, with the dividend per share declared in US cents and converted and paid in Australian cents.

On 25 February 2019, Brambles announced that it intended to use the proceeds from the sale of its IFCO RPC business to fund an on-market share buy‑back of up to US$1.65 billion, a pro-rata return of cash of 29.0 AU cents per share and to pay down debt.

Completion of the sale of IFCO RPC was announced on 3 June 2019 and the on-market share buy-back commenced on 4 June 2019. Between that date and 21 June 2019, when it was paused for Brambles’ scheduled trading blackout period, 6,039,299 ordinary shares were bought back and cancelled for a total consideration of US$54.1 million. The on-market buy-back is scheduled to recommence on 22 August 2019.

The pro-rata cash return compromises two components: a capital return of 12 AU cents per share which is subject to shareholder approval, which Brambles will seek at its 2019 AGM on 10 October 2019, and a special dividend of 17 AU cents per share.

On 5 July 2019, Brambles repaid the US$500 million April 2020 144A bond issue using the IFCO RPC sales proceeds.

Given the on-market share buy-back programme will continue into FY20, the Brambles’ Board has decided to suspend the Dividend Reinvestment Plan.

The Broader Benefits of Brambles

Through its circular business model, network advantage and industry expertise, Brambles creates broader economic benefits for the communities in which it operates.


Brambles generates both direct and indirect economic value and delivers significant environmental benefits through its sustainable ‘share and reuse’ model. Direct economic benefits include: employment opportunities and associated financial and non-financial benefits for Brambles’ ~11,000 employees; taxes paid to governments6; payments to local suppliers; and financial donations to community groups.

Indirectly, Brambles’ requirement for sustainable forestry certification supports communities connected to forestry operations while conserving the ecological functions of the forest7. In addition, Brambles has strategic partnerships with organisations such as the Arbor Day Foundation in the US and Landcare Australia, whose objectives are to restore and regenerate degraded natural habitats at scale, while also providing opportunities for Brambles’ employees to volunteer.

Brambles’ long standing partnership with the Global Foodbanking Network and over 300 Foodbanks around the world makes it a critical partner in the battle against food waste and providing meals for those in need. Brambles’ in-kind equipment donations facilitate extensive food rescue and food donation services as well as encouraging employees to participate in local Foodbanking volunteering initiatives.

Foodbank partnership

Brambles and Foodbank Partnership

In 2016, Brambles signed a three-year agreement with the Global Foodbanking Network (GFN), an international non-profit organisation that fights world hunger by creating, supporting and strengthening Foodbanks in more than 30 countries.

In North America, Foodbanks Canada is now part of the CHEP Canada network. “This collaboration is a natural one; both CHEP and Foodbanks Canada are working to create a seamless supply chain from the manufacturer and retailer to Foodbanks Canada that will help us get more of the available surplus food to more people in need,” said Chris Hatch, chief executive officer, Foodbanks Canada.

Environmental restoration volunteering events

Brambles environmental restoration volunteering events

Globally Brambles employees volunteer to participate in environmental restoration programmes.

In July 2019, 80 Australian employees participated in Landcare Australia volunteering events. They worked on a range of activities such as planting and weeding to help protect the natural resources and support a sustainable environment.

“The volunteer day was fantastic; it was great being outdoors and getting to know colleagues from other parts of our business.” Sharon, Brambles employee.

6 See Brambles’ Tax Report on

7 More information on Brambles’ approach to sustainable forestry including certification is available in the 2019 Sustainability Review, which will be available in September 2019.

Brambles’ Approach to Climate Change

Brambles’ sustainable ‘share and reuse’ model places the business in a strong position to face the challenges of climate change.

Brambles’ business model enables its customers’ access to the circular economy by enabling a virtuous cycle of sharing and reusing its platforms, allowing them to deliver life’s essentials more sustainably. In this way, Brambles helps customers optimise transport, reduce waste and demand on natural resources while reducing carbon emissions.

Brambles recognises that climate change poses risks and presents opportunities for its operating model that could have financial implications on the business.

Within this context, the Brambles Board and management team have committed to responding to the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD), commencing in FY19. The TCFD asks organisations to assess and disclose both the risks and opportunities of climate change, so that capital can be effectively allocated to achieve long-term value creation.

In responding to the recommendations, Brambles is seeking to enable shareholders to have a clear understanding of how the business will manage the financial risks and opportunities of climate change while providing confidence that Brambles will continue to prosper over the long term.

Climate-related risks and opportunities could be both physical and transitional. Physical risks to the business could include severe weather events and long-term changes in regional climatic conditions. Transitional risks include those arising from shifts in policy, regulation, technology or public perception of Brambles’ business due to climate change. Opportunities include society facilitating a faster zero carbon future, which may encourage supporting new businesses to move towards Brambles’ share and reuse circular model and away from single-use pallets.

The severity of climate-related risks and opportunities is linked to different trajectories of global average temperature increases referred to as climate-change scenarios.

Brambles’ dependency on natural resources, in particular wood, and its presence in approximately 60 countries requires diligent planning across different climate-change scenarios in each region, as well as assessment of and responses to potential outcomes, to ensure the business and its value chain remain resilient over the long term.

Brambles is undertaking climate-related scenario analysis in line with the recommendations of the TCFD across its main regions of operation, with the Asia-Pacific region assessed in FY19.

The rapid low carbon transition scenario presents substantial opportunities for Brambles and its customers that have exposures to carbon pricing. In a climate-related scenario where the planet continues to warm due to sustained releases of greenhouse emissions into the atmosphere, Brambles and its customers, are likely to face increasing physical risks. These could be severe, impacting the availability of wood supply or decreasing the yield from the agricultural sectors, for example.

Brambles is well placed to mitigate the disruption caused by climate change, using comprehensive logistics knowledge to rebalance the pool of assets ensuring customers always have pallets to support their supply chain requirements.

The ability to adapt is inherent in Brambles’ network advantage, including the extensive pool of reusable platforms geographically distributed amongst many supply chain participants.

Brambles’ TCFD roadmap is provided below, outlining the key actions for each business quarter. Brambles has engaged the services of KPMG to assist in responding to the recommendations of the TCFD.

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Brambles’ TCFD Roadmap

Roadmap 1

Q4, FY19

Starting the journey

  • TCFD roadmap
  • Scenario analysis workshop #1 Asia‑Pacific
Roadmap 2

Q1, FY20

Scenario analysis

  • FY19 Annual Report disclosure
  • Process gap analysis
Roadmap 3

Q2 - Q3, FY20

Aggregate and integrate

  • Scenario analysis workshops (Europe, IMETA and Americas)
  • Aggregate / verify regional climate risks & opportunities
Roadmap 4

Q4, FY20

Brambles’ climate strategy

  • Review metrics and targets
  • Climate-related risks and opportunities integrated into financial processes and strategy
Roadmap 5

Q4, FY20

Disclose and deliver

  • Climate change action plan
  • FY20 - Full TCFD disclosure

ESG Recognition

Third-party Environmental, Social and Governance (ESG) investor research consistently recognises Brambles’ strong governance processes and the long-term sustainability of its business model and strategies. In 2019, Brambles continues to be placed amongst the leading companies in the global industrial services sector by the following ESG research firms:

Financial Position and Financial Risk Management

Brambles manages its capital structure to maintain a solid investment grade credit rating. During FY19, Brambles held investment grade credit ratings of BBB+ from Standard & Poor’s and Baa1 from Moody’s Investors Service.

In determining its capital structure, Brambles considers the robustness of future cash flows, the potential funding requirements of its existing business, growth opportunities and acquisitions, the cost of capital, and ease of access to funding sources.

Initiatives available to Brambles to achieve its desired capital structure include: adjusting the amount of dividends paid to shareholders; returning capital to shareholders; buying back share capital; issuing new shares; selling assets to reduce debt; varying the maturity profile of borrowings; and managing discretionary expenses.

On 31 May 2019, Brambles divested its IFCO RPC business, generating cash proceeds of US$2,480 million before transactions costs. The ‘Capital Management’ section on page 10 of the Annual Report and the ‘Funding and Liquidity’ section below outlines the capital management programme in relation to those proceeds.

Key treasury activities include: liquidity management; interest rate and foreign exchange risk management; and securing access to short and long-term sources of debt finance at competitive rates. These activities are conducted on a centralised basis in accordance with Board policies and guidelines, through standard operating procedures and delegated authorities.

These policies provide the framework for the treasury function to arrange and implement lines of credit from financiers, select and deal in approved financial derivatives for hedging purposes, and generally execute Brambles’ financing strategy.

The Group uses standard financial derivatives to manage financial exposures in the normal course of business. It does not use derivatives for speculative purposes and only transacts derivatives with relationship banks. Individual credit limits are assigned to those relationship banks, thereby limiting exposure to credit-related losses in the event of non-performance by any counterparty. During FY19, Brambles entered into various foreign exchange products to hedge foreign exchange exposure arising from the IFCO RPC sale.

Brambles generally sources borrowings from relationship banks and debt capital market investors on a medium-to-long-term basis. Bank borrowing facilities were either maintained or renewed throughout the Year. These facilities are generally structured on a multi‑currency, revolving basis with maturities ranging to 2024. Borrowings under the facilities are floating-rate, unsecured obligations with covenants and undertakings typical for these types of arrangements. Borrowings are also raised from debt capital markets by the issue of unsecured fixed interest notes, with interest paid either annually or semi-annually. At balance date, loan notes on issue totalled US$2,168 million and had maturities out to October 2027.

During June 2019, Brambles used the IFCO RPC sale proceeds to repay bank debt and place funds into short term deposits and cash management accounts with its banks. Redemption notices were also issued in respect of the US$500 million 144A 5.35% April 2020 bond, which was repaid on 5 July 2019.

Net Debt and Key Ratios

Net debt and key ratios

Brambles’ financial policy is to target a net debt to EBITDA ratio less than 1.75 times. Brambles proposes to align this financial policy with the financial reporting requirements under the new lease accounting standard (AASB 16) which became effective from 1 July 2019. See Note 1G to the Financial Statements on page 63 of the Annual Report.

30 June 2019 key financial ratios reflect the cash proceeds from the IFCO RPC sale. The ratios remain well within the financial covenants included in Brambles’ major financing agreements.

Maturity Profile of Committed Borrowing Facilities and Outstanding Bonds (% of total committed credit facilities)


As at 30 June 2019, Brambles’ total committed credit facilities were US$3.8 billion.

The average term to maturity of Brambles’ committed credit facilities as at 30 June 2019 was 4.0 years (2018: 4.5 years).

In addition to these facilities, Brambles has entered into operating leases for office and operational locations and certain plant and equipment to achieve flexibility in the use of its assets. The estimated value of these leases to be recognised as a lease liability on Brambles’ balance sheet as at 1 July 2019 is between US$740 - US$760 million. The rental periods vary according to business requirements.

8 FY19 based on Continuing operations. FY18 based on reported financials.

Key Performance Drivers and Metrics—Continuing Operations

Brambles monitors its performance and value creation through a number of financial and non-financial metrics. These include:

Key drivers

  • Like-for-like volume growth in line with economic/industry trend
  • Expansion with new and existing customers
  • Movements in pricing and changes in product/customer mix

5-Year Performance

Sales revenue of US$4,595.3 million in FY19 reflected a five-year compound annual growth rate of 6% at fixed 30 June 2018 FX rates. Growth reflects continued expansion with both new and existing customers, new market entry, expansion of the core product offering and price realisation in both mature and emerging markets in response to increased inflation and a higher cost-to-serve.


Key drivers

  • Transport, logistics and asset management costs (including external factors such as third-party logistics and fuel prices)
  • Plant operating costs in relation to management of service centre networks and the inspection, cleaning and repair of assets (including labour costs and raw material costs)
  • Other operational expenses (primarily overheads such as selling, general and administrative expenses)
  • Depreciation as well as provisioning for irrecoverable pooling equipment

5-Year Performance

Underlying Profit of US$803.7 million in FY19 reflected a five-year compound annual growth rate of 1% at fixed 30 June 2018 FX rates. While sales growth was a strong contributor to profit growth, Underlying Profit growth was below the rate of sales growth due to continued direct cost pressures in the CHEP business, and increased investment in BXB Digital.


Brambles’ Zero Harm Charter states that everyone has the right to be safe at work and to return home as healthy as they started the day.

5-Year Performance

Brambles gauges its safety performance through the Brambles Injury Frequency Rate (BIFR), which measures work-related incidents resulting in fatalities, lost time, modified duty or medical treatment per million hours worked.

In FY19, Brambles missed its year-on-year improvement target, recording a BIFR of 5.9 with no work-related fatalities. This increase in BIFR is the result of a renewed emphasis on full reporting and more accurate incident classification, as opposed to an indication of greater risk.

To drive a step change in its safety performance, Brambles has launched an updated strategy called “Safety Differently”, which seeks to address the residual risks across its operations.

In July 2019, Brambles recorded a fatality at its Bellpuig plant in Spain. A thorough investigation is being undertaken and key findings will be used to enhance Brambles’ safety processes and procedures.

Brambles’ Zero Harm Charter and safety targets align with SDG 3: Good Health and Wellbeing.


Key drivers

  • Underlying Profit performance
  • Capital expenditure on pooling equipment to support growth in the business, which is primarily dependent on the rate of sales growth. Brambles’ main capital cost exposures are raw materials, primarily wood
  • Asset control factors i.e the amount of pooling equipment not recoverable or repairable each year (and therefore requiring replacement)
  • Frequency with which customers return or exchange pooling equipment

5-Year Performance

The trend in Brambles’ ROCI metric over the five-year period reflects the Underlying Profit performance and increased Average Capital Invested, largely to support growth and supply chain efficiency initiatives including the US accelerated automation and lumber procurement programmes.


Key drivers

  • Profitability
  • Capital expenditure
  • Movements in working capital

5-Year Performance

The five years to FY19 was a period of solid overall EBITDA growth, supported by significant investment in capital expenditure to support growth, as well as improved working capital management and increased collections of asset compensations. FY16 performance was impacted by a one-time change to payment processes that increased working capital, as well as increased capital expenditure to support high levels of growth in that year. The strong FY18 performance included strong working capital management initiatives and US$150 million cash inflow related to the repayment of the HFG joint venture shareholder loan. FY19 cash flow includes increased capital investment to support strong top line growth and to deliver on a number of efficiency programs – including the US automation and procurement programmes with over US$70 million of cash outflows.


Ongoing secure supply of materials for the production and repair of pooling equipment, in particular wood used for pallets, is critical to Brambles.

5-Year Performance

Brambles aims to source 100% of timber from certified sources by 2020. For the FY19 period, 99.7% of wood purchased was from third-party certified sources, representing a small but important 0.3% improvement towards its goal compared to FY18 results. The remaining 0.3% of lumber purchases were subject to Brambles’ stringent 24-step due diligence process confirming that harvesting operations did not contribute to deforestation or that lumber was not purchased from controversial regions or sources.

Brambles believes that increasing the volume of wood purchased under the Chain of Custody (CoC) certification helps improve the transparency of forestry supply chains. Currently CoC is not available in all regions; therefore Brambles’ aim is to increase CoC volumes each year as the programme expands. In FY19, CoC result dropped from 67% in FY18 to 62.3%, due to a supplier in LATAM whose CoC certificate lapsed. The supplier’s certificate has been reinstated ensuring that FY20 volumes meet CoC requirements.

Brambles’ sustainable sourcing objectives seek to preserve and enhance the Group’s key resource dependency and are directly linked to SDG 15: Sustainable Use of the World’s Forests and SDG 13: Climate Action.


9 Note - Corporate costs for all years have been adjusted to reflect the impact of the IFCO divestment. FY15-FY17 exclude the impact of new accounting standards AASB 9 Financial Instruments and AASB 15 Revenue from Contacts with Customers.

Strategic and Operating Risks

Brambles’ risk management framework incorporates effective risk management into its strategic planning processes and requires business operating plans to effectively manage key risks. The key risks to Brambles’ ability to achieve its financial and strategic objectives and respective mitigating actions are:

Risk Implication Mitigating actions
Macro-economic conditions Macro-economic conditions, or economic conditions affecting the supply chain or industries in which Brambles’ customers operate, may affect demand for Brambles’ services and/or its financial performance
  • Continued focus on driving growth through investment in expanded customer value proposition, targeted diversification in opportunities with attractive long‑term characteristics and the adoption of plant and automation project in CHEP Americas
  • Adoption of pricing and cost-recovery strategies to mitigate the impact of cost inflation
Industry trends in the retail, grocery and consumer goods supply chains Industry trends (e.g. fragmentation of the retail supply chain, growth of e-commerce and hard discounters, demand for different pooling equipment materials or designs) could affect demand for Brambles’ current service offerings, the value of its existing assets, and/or its financial performance Ongoing programmes to:
  • Drive customer intimacy throughout the supply chain and uncover opportunities to leverage the Group’s unique global scale and value proposition
  • Create new products and service lines to meet customers’ requirements
Maintaining the quality of pooled equipment in line with customer needs A failure to maintain adequate quality standards may result in reduced customer satisfaction, additional costs and affect the Group’s financial performance
  • Strict adherence to equipment quality standards, including continuous monitoring of critical-to-quality metrics to assess and ensure quality of products issued to customers
Maintaining control of pooling equipment The loss of pooled equipment is inherent in Brambles’ business model. Failure to maintain appropriate asset control and recovery processes may result in additional costs and affect the Group’s financial performance
  • Dedicated asset control teams across all business units and the creation of a comprehensive system of processes to increase the timely collection of assets
  • Regular schedule of customer equipment inventory audits to assess key asset recovery metrics and identify potential control issues
Network capacity The scale and strength of Brambles’ network of service centre locations is inherent to its value proposition for customers and other stakeholders. A lack of capacity within the network in a major market could adversely impact service delivery, competitive position and financial performance
  • Adoption of the plant automation project in CHEP Americas and plant network optimisation projects in major markets
Competitors Brambles operates in competitive markets. Increasing intensity of competitor activity could affect Brambles’ market penetration and financial performance
  • Leverage Brambles’ unique global scale, network advantage and sustainable business model to deliver customer value and strengthen relationships
  • Adoption of an innovation programme to enhance existing/ develop new products and services
  • The establishment of BXB Digital to explore the role of technology in Brambles’ business and customer offering and to engage in innovation of products and services in the digital space
Retailer acceptance of pooled solutions Retailers are integral to Brambles’ operating model. A reduction or loss of retailer support for pooled solutions in their supply chains could result in a loss of customers and/or market penetration and adversely impact Brambles’ financial performance
  • Dedicated teams with executive-level responsibility for strengthening retailer relationships, identifying retailer-specific product requirements and ensuring retailers understand Brambles’ value proposition
  • Improving the value proposition for retailers through the implementation of joint business plans
  • Implementation of programmes to facilitate manufacturer advocacy of Brambles’ pooled solutions
Cyber security The unauthorised access to or use of Brambles’ IT systems could adversely impact Brambles’ ability to serve its customers or compromise customer or employee data, resulting in reputational damage, financial loss and/or adverse operational consequences
  • Brambles has implemented an IT security strategy which utilises technologies and processes to protect systems and to detect and promptly respond to unauthorised or inappropriate activities. These controls include, but are not limited to, e-mail and internet filtering, anti-virus software, multi-factor authentication, dedicated security architect personnel, security awareness and training, as well as the use of penetration testing across its network
  • Brambles uses the National Institute of Standards and Technologies Cyber Security Framework to monitor, track, and report progress to senior management
IT data governance Brambles relies on its IT systems, and the data stored on those systems, to operate its business. The identification and classification of Brambles’ key data assets is a key component of its capacity to effectively carry on its businesses and to its cyber security strategy. The proper identification and classification of data assets allows Brambles to prioritise security technology implementations that offer targeted and appropriate protection. Incomplete or unsuitable identification and classification of key data assets could result in the misuse, loss of or unauthorised access to sensitive data due to incorrect storage, processing or disposal procedures. This, in turn, could result in financial loss, operational disruption and/or reputational damage
  • During the Year, Brambles adopted a Data Classification and Handling Policy supported by mandatory training. The policy includes guidelines on the types of data and protection protocols for each type
  • Preventative controls are also in place to mitigate the risk of loss or misuse of data. These controls include the encryption of laptops, e-mail data retention controls and the ability to store data in secure drives
Hard Brexit During the Year, the risk of the United Kingdom exiting the European Union (EU) without reaching an agreement with the EU on the terms of that exit (known as a “Hard Brexit”) has increased. A Hard Brexit could result in Brambles incurring increased capital and operating expenses relating to asset efficiency, heat treatment of pallets, raw materials, transport and customers’ clearance costs as well as disruption to both Brambles’ and its customers’ businesses in Europe
  • In FY18, Brambles established a Brexit Taskforce reporting to a Brexit Steering Group to identify risks associated with Brexit and steps which should be taken to mitigate those risks
  • Mitigation plans have been put in place and, where necessary, budgeted for, to manage those risks
Timber Supply Access to sustainably certified sources of timber is essential for Brambles to carry on its businesses. A concentration of timber suppliers in any region, or a shortage of available certified sources of timber, could adversely impact Brambles’ ability to maintain its timber pallet pool at levels that will enable it to meet customer demand for those products. This could result in loss of customers and/or market penetration and adversely impact Brambles’ financial performance
  • Adoption of regional and global dedicated timber procurement teams to manage timber procurement and to mitigate timber supply risks
Regulatory compliance Brambles operates in a large number of countries with widely differing legal regimes, legislative requirements and compliance cultures. A failure to comply with regulatory obligations and local laws could adversely affect Brambles’ operational and financial performance and its reputation
  • A Code of Conduct which provides a framework for detailed policies addressing regulatory compliance
  • Adoption of Group-wide online compliance training programmes to supplement face-to-face training
  • Dedicated Chief Compliance Officer responsible for monitoring the implementation and ongoing application of compliance management systems
Attraction and retention of talent A failure to attract, develop and retain high performing individuals could adversely impact Brambles’ ability to implement and manage its strategic objectives
  • Detailed talent management and succession planning processes to identify high potential employees and prepare successors for senior executive positions
  • Adoption of development programmes for management, leadership and functional expertise through all employment levels
  • Formal mentoring programmes offered to all employees
Digital disruption The development of cost effective digital supply chain solutions has the potential to materially change supply chain dynamics. If a third party were to develop such solutions before Brambles, it could adversely impact Brambles’ business models. This could result in loss of customers and/or market penetration and adversely impact Brambles’ financial performance
  • Brambles is innovating, developing, testing and refining digital solutions which have the potential to provide commercial digital services to its customers and to assist its businesses to more effectively and efficiently manage equipment losses and asset efficiency
Safety Brambles is subject to inherent operational risks, including industrial hazards, road traffic or transportation accidents, that could potentially result in serious injury or fatality of employees, contractors or members of the public
  • A Zero Harm Charter, which states that everyone has the right to be safe at work and to return home as healthy as they started the day
  • Safety management systems adopted at all workplaces
  • Use of safety metrics which measure work-related injuries, lost time, modified duties and incidents requiring medical treatment
  • Regular reporting and monitoring by the Brambles Board

Managing climate-related risks at Brambles

Brambles recognises its external operating context has and is changing in response to climate-related issues.

During 2019, Brambles commenced the process of assessing its exposure to climate-change risks by reference to the recommendations of the Financial Stability Board’s TCFD. Subsequent to commencing this work, the 4th Edition of the ASX Corporate Governance Principles and Recommendations was issued and included new commentary on Recommendation 7.4 suggesting that listed entities should consider reporting their exposure to climate-change risk by reference to the TCFD.

As part of this process, climate-related risk has been identified as a stand-alone risk and will be reassessed using Brambles’ risk management framework and approach. In addition, Brambles is evaluating existing strategic and operating risks in the context of climate-related risk in its external operating environment. Further details on Brambles’ approach to climate-related risks are set out on page 12 of the Annual Report.