Brambles generates value through a ‘share and reuse’ model 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, the development of its people and build a more resilient business.
Long-Term Value Creation and Sustainable Shareholder Returns
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; exploring the digitisation of supply chains; and providing a resilient foundation during supply chain uncertainties.
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 growth2 in the mid-single digits;
- Underlying Profit growth2 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.
Dividend Policy and Payment
Brambles’ dividend policy is to target 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.
This year, the Board declared total dividends of 20.5 US cents per share with the Australian dollar payment equivalent to 27.32 AU cents per share. This results
in a payout ratio for the Year of 54%, which is broadly in line with the prior year’s payout ratio. FY20 total dividends were 18.0 US cents per share or equivalent to 25.92 AU cents per share.
The final dividend for 2021 of 10.5 US cents per share is a 5% increase on the 2021 interim dividend of 10 US cents per share, and will be 30% franked. This dividend is payable in Australian dollars at
14.24 AU cents per share and will be paid on 14 October 2021 to shareholders on the Brambles register at 5.00pm on 9 September 2021. The ex-dividend date is 8 September 2021.
Capital Management Programme
At the time of the sale of its IFCO RPC business, Brambles announced that it intended to use the US$2.4 billion net proceeds to fund a A$2.8 billion
(US$1.95 billion) capital management programme, through an on-market share buy-back of up to A$2.4 billion (US$1.65 billion) and a pro-rata return of
cash of 29.0 AU cents per share, and to pay down debt.
The on-market share buy-back commenced on 4 June 2019 and to date 158.2 million ordinary shares have been bought back and cancelled for a total
consideration of A$1,751.7 million.
On 22 October 2019 Brambles paid a 29.0 AU cents per share pro-rata cash return comprising two components: a
capital return of 12.0 AU cents per share and a special unfranked dividend of 17.0 AU cents per share. The total cash
payment for the pro-rata return was A$453.8 million.
At 30 June 2021, Brambles had completed A$2.2 billion, that is 78% of the A$2.8 billion capital management programme.
Dividend Reinvestment Plan
Given the on-market share buy-back programme will continue into FY22, the Board has decided to continue to suspend the Dividend Reinvestment Plan.