Brambles Faces US Pallet Glut as It Commits US$400m Buy-Back for FY26

Strong Financial Performance Amid Challenging Conditions

Brambles Limited has delivered a robust financial performance for the full year ended 30 June 2025, with sales revenue growing 3% and underlying profit rising 10%. This growth was underpinned by improved price realisation and net new business momentum that offset a slight decline in like-for-like volumes due to macroeconomic pressures.

The company’s operating profit after tax increased 13%, while basic earnings per share rose 14%, reflecting both profit growth and the impact of a share buy-back program completed during the year. Free Cash Flow before dividends surged to over US$1 billion, highlighting strong cash generation despite ongoing investments in transformation initiatives.

Transformation Program Driving Operational Excellence

Brambles’ multi-year Shaping Our Future transformation program has been central to its success, delivering structural improvements across financial, operational, and sustainability dimensions. Key achievements include enhanced asset efficiency, which reduced capital intensity and lowered the cost-to-serve, and digital initiatives such as the Serialisation+ program that are beginning to unlock new business models and customer value.

The rollout of Serialisation+ in Chile has been particularly promising, with more than half of customers adopting the new Effortless Service Offer, which simplifies pallet management and fosters collaboration. Operational testing continues in North America and the UK, with further investments planned to refine technology and infrastructure.

Sustainability and Business Excellence Progress

Brambles has strengthened its sustainability credentials, maintaining 100% renewable electricity use and increasing sustainably sourced timber certification. The company also improved safety metrics and diversity in management, although some targets, such as pallet damage reduction and female management representation, fell slightly short of goals.

These efforts reflect Brambles’ commitment to embedding ESG principles into its business model, supporting its position as a leader in the circular economy and sustainable logistics solutions.

Capital Management and Outlook

Building on its strong financial position, Brambles announced an on-market share buy-back of up to US$400 million for FY26, following a similar program in FY25. The company expects FY26 to deliver sales revenue growth of 3-5%, underlying profit growth of 8-11%, and Free Cash Flow before dividends between US$850-950 million.

While the outlook remains positive, Brambles acknowledges ongoing macroeconomic uncertainties and operational challenges, including excess pallet inventory in the US, which is expected to persist until mid-2027, impacting storage and repair costs.

Notably, Brambles will discontinue quarterly sales trading updates from FY26, opting to focus on half-year and full-year reporting to provide a more comprehensive view of performance.