26 WESTERN PALLET
Brambles Posts Strong Financial Results on CHEP Performance
Chep deploys 250,000 smart pallets, expands repair automation.
In a year marked by continued supply chain disruption, inflation, and a volatile lumber market, Brambles has posted solid results for FY2022. The company saw sales increase by 9% to $5.56 billion and after-tax profit to $593.3 million.
“This is an outstanding result for Brambles in the context of a challenging, volatile and uncertain operating environment,” said Graham Chipchase, Brambles CEO. “Despite significant inflationary pressures and pallet availability constraints, we continued playing a critical role in global supply chains and delivered a strong financial result while progressing our Shaping Our Future transformation program.
“This performance is testament to the efficiency and scale of our network and the capabilities of our global teams to respond rapidly in changing market dynamics to support our customers. The result also reflects strong financial discipline and recovery of cost-to-serve increases through improved commercial terms as well as identifying efficiencies across the supply chain.”
For Brambles, these supply-chain dynamics resulted in lower pallet returns, extended cycle times and higher losses. These circumstances negatively impacted volume growth and operational efficiency across its network. In response to pallet availability challenges, Brambles added resources to existing asset management activities, including new initiatives supported by data analytics and digital insights to increase pallet recoveries from high-risk channels.
During the year, it established a data hub, consolidating multiple data sources to a single system applying advanced analytics and machine learning. Over 250,000 smart pallets with autonomous tracking devices have been deployed in over 20 countries, including 200,000 in the UK and Canada, as part of its continuous diagnostics trials. Combined with data analytics capabilities, insights from these initiatives have provided a better understanding of the cost-to-serve and enabled asset efficiency benefits.
Chipchase commented that the smart pallet deployment provides “key learnings for our digital asset strategy and additional supply chain insights. We expect momentum to continue to accelerate in FY23 with further data and digital capabilities developed that will successfully transform both our customer value proposition and further strengthen our considerable competitive advantage.”
Brambles invested in high-returning automation initiatives with seven end-to-end automated repair cells implemented during the year across North America and Europe. It noted some delays in the rollout of these systems, however, due to semi-conductor and component shortages.
During the year, an additional four million pallets were recovered and salvaged through new processes to refurbish pallets that would otherwise be scrapped.
Brambles continued to progress towards its ambitious 2025 Sustainability Targets with critical achievements in the year, including significant growth in Chain-of-Custody certification and the successful extension of its waste-positive program across its subcontractor network. It also announced its commitment to accelerate its decarbonization strategy by achieving net-zero greenhouse gas emissions across its entire supply chain by 2040, ten years ahead of the previous deadline.
Brambles FY2023 financial expectations include sales revenue growth of 7-10% at constant currency.