Sales revenue from continuing operations was US$5,104.3 million, an increase of 4% at actual FX rates over the prior year. On a constant-currency basis, sales revenue growth of 6% was primarily driven by: new business in Europe pallets; expansion with new and existing RPC customers in IFCO; and continued momentum in the Latin America pallets businesses. Growth in the US pallets business was modest, as increased competition put pressure on volume and pricing growth in the period.

Underlying Profit of US$957.5 million from continuing operations, which excludes Significant Items, declined 3% over prior year at actual FX rates. Underlying Profit at constant currency declined 1%, to be broadly in line with the prior year. The Underlying Profit result reflects:

• The contribution from sales growth across all the operating segments with lower price realisation in the major US and European pallets markets;

• Direct cost increases in the US pallets business due to: increased costs associated with accelerated sales growth in the prior year; structural changes to the network cost structure; and other one-off costs relating to excess pallet inventories during the year.

• Increased depreciation charges across the Group; and

• Higher Corporate segment costs due to the inclusion of the HFG joint venture losses of US$12.5 million and BXB Digital investment costs of US$10.3 million. These costs were partly offset by other cost reductions.

Operating profit from continuing operations (which includes Significant Items) of US$771.4 million declined 18% at actual FX rates and 17% at constant currency. Significant Items of US$186.1 million included a US$120 million non-cash impairment of the Group's investment in the HFG joint venture and costs associated with the One Better program, the CHEP and IFCO brand refresh and other organisational restructuring initiatives announced in FY16 and FY17.

Profit after tax from continuing operations of US$444.9 million declined 25% at actual FX rates. The constant-currency decline of 23% reflected lower operating profit and a higher effective tax rate on statutory profit before tax of 33.9% (FY16: 28.8%), partly offset by a reduction in net finance costs.

Net finance costs of US$98.7 million decreased 13%, primarily due to interest income on the HFG joint venture shareholder loan and deferred consideration.

Tax expense of US$227.8 million decreased 5% largely reflecting the geographic mix of profits. The effective tax rate on Underlying Profit from continuing operations was 28.8%, marginally below the prior year.

Profit after tax of US$182.9 million declined 69% at actual FX and constant-currency rates and included a US$243.8 million non-cash impairment of Brambles' North America recycled pallets business, CHEP Recycled, which was classified as held for sale and recognised in discontinued operations in FY17.

Average Capital Invested of US$5,646.4 million increased 11% at actual FX rates and 12% at constant currency due to:

• Higher pooling equipment balances to support volume growth in the current year and the full-year impact of the significant growth in the US pallet pool during FY16;

• The impact of the Group's investment in the HFG joint venture, which included the equity investment, deferred consideration and a shareholder loan. The prior year comparative has been restated to reflect the recognition of Aerospace, Oil and Gas, and North America recycled pallets businesses as discontinued operations.

Return on Capital Invested of 17.0% declined by 2.3 percentage points at actual FX and constant-currency rates, due to lower Underlying Profit, largely in the US pallets business and the increase in Average Capital Invested.

Basic EPS of US11.5 cents per share declined 69% in actual FX and constant-currency terms, largely due to the impairments of CHEP Recycled and the HFG joint venture investment.

Cash Flow from Operations of US$591.5 million increased by US$72.7 million over the prior year as movements in working capital offset increases in capital expenditure (cash basis) and unfavourable movements in other cash flow.

• Movements in working capital resulted in a US$104.3 million increase in cash flow due to the cycling of one-off increases in prior year outflows associated with standardisation of payments practices.
• Capital expenditure (cash basis) increased US$24.7 million, primarily due to the timing of payments relating to higher capital commitments in FY16. This increase is despite a reduction in capital spend across the group in FY17 on an accruals basis.
• IPEP expense increased US$14.5 million, primarily due to a combination of volume growth across the Group and higher unit pallet values used in the IPEP calculation for both the Europe and Latin America pallets businesses.
• Other cash flow movements resulted in a decrease of US$28.9 million, primarily reflecting reduced provisions for employee-related payments in the current year, as well as the payment of an earn-out relating to a prior year acquisition.

Free Cash Flow after dividends was a deficit of US$123.8 million, reflecting increased cash dividend payments over the prior year. This is largely due to the neutralisation of the Dividend Reinvestment Plan (DRP) in the current year. Dividend payments were lower in the prior year as the impact of the DRP was not neutralised.

Corporate actions: CHEP Recycled, Brambles' North America recycled pallets business, which was formerly part of CHEP Americas, has been classified as held for sale and recognised in discontinued operations in FY17, pending its divestment. Prior year comparatives for CHEP Americas have been restated.

Sales revenue

Pallets' sales revenue was US$2,025.4 million, an increase of 3% at actual FX rates. Constant-currency growth of 4% was primarily driven by strong expansion in Latin America pallets and modest volume growth in the US and Canada pallets business.

US pallets' revenue was US$1,513.7 million, up 2% comprising:

• like-for-like volume growth of 1%, including improved volumes in the second half of year following particularly challenging trading conditions in the second quarter;
• net new business growth of 1%, reflecting the rollover impact of prior year contract wins and new business wins during the year. The rate of net new business growth was lower than prior years due to increased competitive pressures and lower whitewood pallet prices, which slowed the rate of new customer conversions to pooled pallet solutions. The rate of net new business growth increased in the final quarter of the fiscal year following several contract wins; and
• Reduced price realisation due to competitive pressures and unfavourable customer mix. During the second half of the year the business was also cycling strong price and sales mix performances in the prior corresponding period, primarily due to an increased proportion of sales from higher cost-to-serve channels.

Canada pallets' sales revenue was US$241.2 million, an increase of 2% on both an actual FX and constant-currency basis, reflecting solid like-for-like volume growth and sales mix benefits in the current fiscal year, which more than offset the impact of prior year contract losses.

Latin America pallets' sales revenue of US$270.5 million increased 12% at actual FX rates. Constant-currency growth of 18% largely reflected: strong like-for-like volume growth; net new business growth particularly in Mexico, Brazil and Central America; and solid pricing growth consistent with the inflationary environment in the region.

Containers' sales revenue (comprising the IBCs and Automotive businesses in the region) was US$48.1 million, an increase of 16% on both an actual FX and constant-currency basis, reflecting strong volume growth with new and existing customers in both Automotive and IBCs.

Profit

Underlying Profit for the region of US$395.1 million declined 10% at actual FX rates over the prior year. The primary driver of this decline was lower Underlying Profit in the US pallets business reflecting: lower margins in line with increased competition; higher cost-to-serve and increased depreciation expenses relating to the accelerated sales growth in the second half of the prior year; and structural changes to the network cost structure. One-off costs relating to excess pallet holdings and lower demand in the second and third quarter of the fiscal year also impacted the performance of the business in FY17.

The constant-currency decline of 9% reflected:

• Volume, price and mix contributions of US$40 million, reflecting strong growth in Latin America pallets, and modest contributions from volume growth in the US and Canada pallets businesses;
• Net plant cost increases of US$27 million, primarily in the US pallets business, as higher pallet repair volumes following strong growth in the second half of the prior year, other structural cost increases and one-off costs associated with excess pallet holdings were unable to be fully offset by supply chain efficiencies. Higher operating costs in the Canada pallets business associated with the transition to the "block" type pallet and inflationary impacts in the Latin America pallets business also contributed to plant cost increases in the period;
• Net transport costs increases of US$19 million as supply chain efficiencies did not fully offset additional costs associated with higher pallet inventory balances and structural cost pressures in the US pallets business;
• Depreciation expense increases of US$25 million due to the significant capital investment in the US pallet pool in the prior year in anticipation of higher growth, as well as investments in pallets to support growth in Latin America; and
• Indirect cost increases of US$8 million, largely reflecting higher IPEP expenses due to customer mix changes in the US pallets business and a combination of volume growth and higher unit pallet values in the Latin America pallets business.

Operating profit of US$377.3 million declined 11% at actual FX rates and 10% at constant currency. Significant Items of  US$17.8 million primarily related to the One Better program, the roll out of the CHEP brand refresh in the US pallets business and other restructuring initiatives.

Return on Capital

Return on Capital Invested was 20.2%, down 4.9 percentage points, reflecting the decline in Underlying Profit and growth in Average Capital Invested. The growth in Average Capital Invested was primarily due to: capital expenditure to support volume growth, particularly in Latin America; and the significant growth in the size of the US pallet pool, particularly in the prior fiscal year.

Sales revenue

Pallets' sales revenue was US$1,358.3 million, an increase of 1% at actual FX rates on the prior year. Constant-currency growth of 5%, reflected strong volume growth in all regions and price increases in Africa, India & Middle East.

Europe pallets' sales revenue was US$1,194.6 million, in line with prior year at actual FX rates. At constant currency, sales revenue growth was 5%, comprising:

• like-for-like volume growth of 1%, largely reflecting solid demand in the fast-moving consumer goods and produce sectors;
• net new business growth of 4% driven by broadly equal contributions from new contract wins across the region and the rollover impact of contracts won during the prior year; and
• modest price declines, in line with lower inflation-related price indexation and specific pricing actions in the region.

Within Europe pallets:

• Northern Europe pallets' (comprising UK and Ireland) sales revenue was US$304.0 million, a decline of 10% at actual FX rates, reflecting the weaker British pound. At constant currency revenue increased 3%;
• Southern Europe pallets' (comprising Iberia, Italy, Turkey and Greece) sales revenue was US$353.8 million, an increase of 3% at actual FX rates and 4% at constant currency;
• Western Europe pallets' (comprising France and Benelux) sales revenue was US$257.8 million, an increase of 4% at actual FX rates and 5% at constant currency; and
• Central & Eastern Europe pallets' (including Germany, Poland and the Nordics) sales revenue was US$279.0 million, an increase of 6% at actual FX rates and 7% at constant currency.

Africa, India & Middle East pallets' sales revenue of US$163.7 million increased 10% at actual FX rates and 5% at constant currency on the prior year. The increase was primarily driven by price increases and net new business wins. Like-for-like volumes were broadly flat during the period.

RPC sales revenue was US$25.8 million, an increase of 25% at actual FX rates and 16% at constant currency, reflecting price increases and strong like-for-like volume growth.

Containers' sales revenue (comprising the IBCs and Automotive businesses in the region) was US$191.1 million, an increase of 3% on the prior year at actual FX rates. Constant-currency growth of 6% primarily reflected: customer and product mix benefits and strong like-for-like volume growth with Original Equipment Manufacturers (OEMs) in Automotive Europe; like-for-like volume declines and lower new equipment sales in IBCs; and the full year contribution of the Kegstar keg pooling business.

Profit

Underlying Profit of US$387.1 million was broadly flat to prior year at actual FX rates. Underlying Profit increased 4% at constant currency, reflecting:

• Volume, price and mix contributions of US$30 million due to strong volume growth in the Europe pallets and Automotive businesses as well as price and mix benefits in both Africa, India & Middle East pallets and Automotive businesses;
• Net plant costs decreases of US$3 million, primarily due to supply chain efficiencies in Europe pallets;
• Net transport costs increases of US$3 million, as supply chain efficiencies partially offset higher costs relating to asset recovery activities in the Europe pallets businesses and cost inflation in the Africa, India & Middle East pallets businesses;
• Depreciation expense increases of US$8 million due to investments in the pool to support volume growth; and
• Indirect cost increases of US$8 million primarily related to higher IPEP expense in European pallets largely due to volume growth and higher unit pallet values.

Operating profit of US$375.1 million decreased 2% at actual FX rates but increased 2% on a constant-currency basis. Significant Items of US$12.0 million primarily related to the One Better program and other restructuring initiatives undertaken during the year.

Return on Capital

Return on Capital Invested was 24.7%, down 1.7 percentage points, reflecting flat Underlying Profit and growth in Average Capital Invested. The growth in Average Capital Invested was primarily due to capital expenditure to support volume growth.

Sales revenue

Pallets' sales revenue was US$331.9 million, an increase of 5% at actual FX rates. Constant-currency growth of 1% reflected modest pricing gains and like-for-like volume growth in Australia & New Zealand. This was partially offset by lower revenues in the Asia pallets businesses, primarily relating to the ongoing reduction in plastic-pallet revenues in China.

Within Pallets:

• Australia and New Zealand sales revenue was US$290.0 million, an increase of 6% at actual FX rates and 2% at constant currency; and
• Asia sales revenue was US$41.9 million, a decline of 6% at actual FX rates and 3% at constant currency.

RPC sales revenue was US$98.1 million, an increase of 10% at actual FX rates and 5% at constant currency, driven by solid volume growth with new and existing customers.

Containers' sales revenue (comprising the IBCs and Automotive businesses in the region) was US$54.8 million, an increase of 8% at actual FX rates. Constant-currency growth of 6% reflected strong volume growth in IBCs and the Automotive business in Asia.

Profit

Underlying Profit was US$112.1 million, an increase of 11% at actual FX rates and 6% at constant currency. Current year performance includes a contribution to Underlying Profit of US$23 million, which will not recur in FY18 due to the roll off of a large Australian RPC contract and the impact of automotive plant closures on a number of Australian automotive contracts. This contribution also included the earnings benefits associated with fully written-down assets relating to these income streams.

At constant currency:

• Volume, price and mix contribution was US$12 million;
• Net plant and net transport costs increased US$2 million as supply chain efficiencies largely offset cost inflation;
• Depreciation expense decreased US$1 million; and
• Other indirect costs increased US$5 million, primarily in China, relating to the impairment of automotive assets, lower government subsidies and higher insurance costs.

Operating profit was US$110.9 million, an increase of 10% at actual FX rates and 6% at constant currency, and included Significant Items of US$1.2 million primarily relating to the One Better program.

Return on Capital

Return on Capital Invested was 26.2%, up 1.8 percentage points, reflecting the Underlying Profit growth and minimal growth in Average Capital Invested.

Sales revenue

Sales revenue in IFCO RPCs was US$970.8 million, up 10% at actual FX rates and 12% at constant currency, reflecting strong growth with new and existing retailers in all regions. Regional contributions were as follows:

• Europe sales revenue was US$672.7 million, an increase of 8% at actual FX rates and 11% at constant currency, reflecting strong volume growth with most retail partners during the year. Net new business wins contributed 3% growth with broadly equal contributions from contract wins in the period and the rollover impact of contract wins in the prior year;
• North America sales revenue was US$223.4 million, an increase of 12% on both an actual FX and constant-currency basis, reflecting improved pricing and strong like-for-like volume growth with key retailers; and
• Other regions' (comprising South America and Asia) sales revenue was US$74.7 million, an increase of 22% at actual FX rates and 20% at constant currency, largely reflecting the contribution from the IFCO Japan and Empacotecnia (Colombia) acquisitions.

Profit

Underlying Profit was US$117.6 million, up 21% at actual FX rates and up 22% at constant currency, primarily reflecting an improved profit performance in the North America business following revenue and cost challenges in the prior fiscal year. At constant currency:

• Volume, price and mix contribution of US$31 million, largely driven by strong volume growth and pricing impacts in North America and South America;
• Net plant costs decreases of US$1 million, largely due to plant cost efficiencies in Europe;
• Net transport costs decreases of US$5 million driven by strong performance in North America following headwinds in the prior corresponding period relating to the loss of advocacy of a major retailer;
• Depreciation expense increases of US$6 million due to investments in the pool to support volume growth; and
• Other indirect costs increases of US$9 million, reflecting increased costs in line with the growth.

Operating profit was US$116.7 million, an increase of 16% at actual FX rates and 17% at constant currency, and included Significant Items of US$0.9 million in the current period relating to the IFCO brand refresh. Significant Items in the prior corresponding period largely reflected the fair value gain on the acquisition of IFCO Japan.

Return on Capital

Return on Capital Invested was 7.4%, up 1.0 percentage point, reflecting strong Underlying Profit growth and modest increases in Average Capital Invested.