Brambles 2006 Annual Report - Alle jaarverslagen

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38 Brambles 2006 Annual Report FINANCIAL REVIEW Comparative business performance at constant currency exchange rates Sales 2006 actual US$m 2006 at prior year fx rates US$m 2005 actual US$m % change at constant currency CHEP 2,956.4 2,985.6 2,762.6 8% Recall 565.7 565.0 512.2 10% Continuing operations 3,522.1 3,550.6 3,274.8 8% Discontinued operations 2,393.6 2,466.5 2,689.0 (8%) Total 5,915.7 6,017.1 5,963.8 1% Comparable operating profit CHEP 703.8 706.6 534.3 32% Recall 97.5 96.9 84.4 15% Corporate (30.0) (27.3) (18.9) (44%) Continuing operations 771.3 776.2 599.8 29% Discontinued operations 310.5 319.8 216.0 48% Total 1,081.8 1,096.0 815.8 34% Reconciliation to statutory profit after tax Comparable operating profit from continuing operations 771.3 776.2 599.8 29% Net finance costs (111.8) (112.9) (130.1) 13% Profit before tax and special items from continuing operations (PBTA) 659.5 663.3 469.7 41% Tax expense on PBTA (229.4) (230.7) (160.4) (44%) Profit after tax, before special items (PATA), from continuing operations 430.1 432.6 309.3 40% Special items from continuing operations, after tax (67.5) 3.8 Profit from continuing operations, after tax 362.6 313.1 Profit from discontinued operations, after tax 1,101.8 135.7 Profit for the year 1,464.4 448.8 Basic earnings per share (US cents) 86.7 26.4 Earnings per share on PATA (US cents) 38.3 26.8 BVA (Brambles Value Added) 1 from continuing operations 347 179 1 Brambles Value Added (BVA) represents the value generated by a business over and above the cost of the capital it uses to generate that value. BVA is denominated in US dollars using Brambles’ IFRS results. It is calculated as comparable operating profit (COP) less (average capital invested (ACI), at fixed June 2005 exchange rates, multiplied by Brambles’ weighted average pre-tax cost of capital (WACC))
39 Brambles 2006 Annual Report Summary of Statutory Financial Results for the Year IFRS 2006 US$m 2005 US$m % change actual fx rates Results after special items Operating profit from continuing operations 701.1 606.0 16% Profit before tax from continuing operations 589.3 475.9 24% Group profit after tax, after minorities 1,463.4 447.0 227% Basic earnings per share (US cents) 86.7 26.4 228% Overview The financial statements this year are significantly impacted by a number of factors: THE INTRODUCTION OF IFRS This is the first Annual Report in which Brambles has reported under International Financial Reporting Standards (IFRS). The detailed impacts of the introduction of IFRS are set out in detail in Notes 38 and 39 to the Financial Statements. It is important to note that, whilst the introduction of IFRS has resulted in alterations to the presentation of the Financial Statements, it has not affected the Group’s strategy, underlying operations or cash flows. For Brambles, it also provides the opportunity to present the same financial information to both Australian and UK markets, in contrast to the previous practice of reporting under UK GAAP in the UK and under AGAAP in Australia. The Directors have chosen to show separately “Special Items” on the face of the Income Statement (page 89), believing results before Special Items to be relevant measures of business performance. Included within Special Items are Exceptional Items, and certain of these are set out below. The definitions of Special and Exceptional Items are shown in the Glossary on page 172. REPORTING IN US DOLLARS The introduction of IFRS also has allowed Brambles to select a single reporting currency. Brambles has chosen to report in US dollars, which is the Group’s fastest growing currency in terms of sales and operating profit. RESTRUCTURING, DIVESTMENT AND PROPOSED UNIFICATION On 29 November 2005, Brambles announced its intention to focus on CHEP and Recall, divest its other businesses, and unify the dual-listed companies (DLC) structure. The divestments of Brambles Industrial Services’ Northern Hemisphere operations, Cleanaway Germany, Cleanaway Australia and New Zealand, Industrial Services Australia and Brambles’ Regional Businesses have already been completed. The divestment of Cleanaway UK has also been announced and the divestment of the small Cleanaway Asia business is anticipated to complete in the next few months. Resolutions associated with the proposed unification of the DLC (Unification) will be put to shareholders at Extraordinary General Meetings on 1 November 2006 in the case of Brambles Industries plc and 9 November 2006 in the case of Brambles Industries Limited. An Information Memorandum setting out information relevant to Unification will be distributed to shareholders by the end of September 2006. The 30 June 2006 consolidated balance sheet set out on page 90 includes a receivable of US$1,341.6 million in respect of the sale of Brambles Australia Limited (including the businesses of Industrial Services Australia and Cleanaway Australia and New Zealand), which was settled on 5 July 2006 when the sale completed. Assets classified as held for sale of US$648.8 million and associated liabilities of US$331.5 million relate to Cleanaway UK and Cleanaway Asia. The sale of Cleanaway UK for US$1,102.2 million, which was announced on 30 June 2006, is subject to regulatory clearance and the associated profit on sale has not been recognised in 2006. In this financial review, the majority of the focus will be on the performance of Brambles’ continuing operations, CHEP and Recall, although a section has been dedicated to Brambles’ discontinued operations, which also had good results for the year. Relative measures of sales and comparable operating profit performance are stated in constant currency. Continuing Operations Brambles continues to focus on the use of Brambles Value Added (BVA) and this has helped to deliver record Returns on Capital Invested (ROCI). BVA, which is denominated in US dollars, measures the economic returns of different businesses and business decisions by comparison to a pre-tax weighted average cost of capital (a full definition is shown in the Glossary on page 171). In 2006, BVA, the definition of which has been adjusted to adopt IFRS-compliant terms, continued to form the core component of short term incentive arrangements for all senior executives, including Brambles’ Executive Directors. Because of the distorting effects of the divestment and unification programme, BVA is only shown for continuing operations:
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DIRECTORY Brambles Industries Limit
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