OCTOBER 2021
in further network inefficiencies as the company continues to respond to volatile customer demand.
“Our key focus in all regions is increasing pallet balances across our plant network to service our existing customers and support both growth and improved network efficiency,” he said. “We are progressively rebuilding our pallet pools by purchasing new pallets as supply becomes available and continuing to drive asset efficiency improvements.”
Specifically, in North America, CHEP is implementing the asset productivity and pricing initiatives outlined at the full-year result announcement and recent Investor Day. With limited access to lumber and new pallets and ongoing disruptions to global supply chains, Chipchase does not expect pallet availability and balances across the CHEP North American network to return to more normal levels until the fourth quarter of the fiscal year.
“Despite some moderation in lumber inflation in North America, lumber prices across the Group remain above historic levels and pallet prices continue to increase, particularly in Europe and Latin America,” he said. “We expect inflationary pressures to remain for the balance of FY22.”
Results by Segment
CHEP Americas sales revenue increased 9% driven by targeted pricing actions across the region to recover the cost-to-serve. Net new business growth in the region was modest and like-for-like volumes declined in North America as the business cycled strong COVID-19 related demand in the prior year and pallet availability constraints impacted volume growth with new and existing customers in the quarter.
CHEP EMEA sales revenue increased 8% driven by price growth across the region, net new business wins in the Southern, Central and Eastern European pallets businesses and a recovery in the Automotive business, which was impacted by COVID-19 related shutdowns in the prior year.
CHEP Asia-Pacific sales revenue increased 11% driven by price realization and increased demand for pallets in Australia, reflecting increased at-home consumption driven by COVID-19 lockdowns. The Australian RPC business also grew strongly, benefitting from the rollover contribution from a large contract win in the prior year.