Brambles (BXB) Trading update summary

Trading performance and operational update

• Short-term repair capacity constraints in the US have emerged due to subcontractor turnover, labor shortages, and higher demand, impacting service levels and increasing costs in affected regions.

• Investments in pallet quality and automation compatibility have led to more intensive repairs and increased component repairs per pallet.

• Measures to address constraints include increasing pallet relocations, adding repair capacity, and purchasing approximately 2 million new pallets in 4Q26, with further purchases expected in 1H27.

• Constraints are expected to be resolved by the end of 1H27, with ongoing updates to be provided.

Revised FY26 guidance and financial outlook

• Sales revenue growth guidance lowered to 2-3% (from 3-4%) and Underlying Profit growth to 3-5% (from 8-11%), mainly due to an estimated US$60 million earnings impact from US repair capacity constraints.

• Free Cash Flow before dividends is now expected at US$1,000-1,100 million, narrowed to the upper end of previous guidance.

• Margin expansion is expected across all segments except CHEP EMEA, with net efficiencies of ~US$15 million from overhead restructuring.

• Dividend payout ratio remains at 50-70% of Underlying Profit after finance costs and tax, fully funded through Free Cash Flow.

Capital management and shareholder returns

• A new US$400 million on-market share buy-back is announced, to commence after the current program and continue through FY26 and FY27.

• The buy-back reflects confidence in sustained free cash flow generation and balance sheet strength.

• Additional capital expenditure of ~US$60 million is expected for new pallet purchases, with cash outflows mainly in 1H27.