Brambles Pricing and Efficiency Initiatives Offsetting Disruptive Operating Environment

Wide-moat Brambles has continued to manage challenging operating conditions in the third quarter of fiscal 2022. Over the first three quarters, Brambles has experienced a range of operating headwinds including pallet cycle time disruptions and material inflation across labour, lumber, and transport. These have been further compounded by the ongoing conflict in Ukraine. With group year-to-date volumes flat on the previous corresponding period, constant currency sales growth of 8% largely reflects pricing initiatives to pass cost headwinds to customers. We have slightly increased our full-year underlying profit forecast by 2% to USD 939 million, inclusive of short-term transformation costs. Our revised forecast reflects the success of Brambles pricing initiatives and operational efficiency programs which exceeded our prior expectations. Our forecast sits at the midpoint of management’s updated year-on-year growth estimate of 6%-7%, inclusive of transformation costs. The change to our full-year earnings outlook has negligible impact on our fair value estimate which remains unchanged at AUD 12.70 per share.