Brambles FY26 Underlying Profit Up 4% at Constant FX

Brambles (ASX:BXB) reported FY26 sales revenue from continuing operations of US$7,042.9 million, up two per cent at constant currency and six per cent at actual exchange rates, with equal contributions from price realisation of one per cent and volume growth of one per cent. Net new business growth was three per cent, driven by the US and European pallets businesses, and was partly offset by lower like-for-like volumes attributed to weaker consumer demand. Underlying Profit and operating profit from continuing operations were US$1,494.4 million, up four per cent at constant currency and nine per cent at actual rates, with Underlying Profit margin expansion of 0.6 percentage points. Brambles said the result was in line with revised guidance and that repair capacity constraints which emerged in the Central and Northeastern parts of its US service centre network in April 2026, together with the associated mitigation actions, reduced Underlying Profit by about US$90 million, comprising US$25 million of sales revenue net of volume-related costs, US$20 million of plant costs, US$35 million of transport costs and US$10 million of irrecoverable pooling equipment provision expense; excluding that impact the company said Underlying Profit increased about 11 per cent at constant currency. The US$90 million was about US$30 million higher than the expectation outlined in Brambles' May 2026 announcement. Underlying Profit is a non-statutory measure and Brambles reports in United States dollars, with growth rates stated at constant currency except for hyperinflation economies.

Basic earnings per share from continuing operations were US 69.9 cents, up six per cent at constant currency, which Brambles said reflected Underlying Profit growth and a two percentage point contribution from on-market share buy-backs. Free Cash Flow before dividends, stated including discontinued operations, was US$1,048.2 million, down US$46.7 million, which the company attributed to higher tax payments and increased financing payments more than offsetting higher Cash Flow from Operations. Return on Capital Invested was 22.6 per cent, up 0.4 percentage points at constant currency. The Board declared a 2026 final dividend of 23.15 US cents per share, taking total FY26 dividends to 46.15 US cents, up 16 per cent on FY25, at a payout ratio of 64 per cent against 62 per cent in FY25; the final dividend is declared as 32.82 Australian cents at an A$:US$ rate of 0.7053, franked to 20 per cent, with the unfranked component conduit foreign income. Brambles said it remains on track to resolve the US repair capacity constraints by the end of the first half of FY27 and expects them to produce an adverse year-on-year earnings impact of about US$35 million to US$55 million in FY27, alongside about US$60 million of capital expenditure to buy a further two million pallets in the first half. FY27 guidance is for sales revenue growth of two to four per cent and Underlying Profit growth of two to six per cent, both at constant currency, and Free Cash Flow before dividends of US$800 million to US$950 million, with Underlying Profit growth weighted to the second half and a mid to high single digit decline expected in the first half.