Brambles Faces US Pallet Stock Challenges Amid Strong Sustainability Progress

• Sales revenue up 3% to US$6.67 billion
• Underlying profit grows 10% to US$1.37 billion at constant currency
• Final dividend increased to 20.83 US cents per share, 30% franked
• Transformation program boosts customer experience and operational efficiency
• Strong progress on 2030 Science-based Targets and net-zero emissions ambition

Financial Performance and Dividend Growth

Brambles Limited has reported its full-year financial results for the year ended 30 June 2025, demonstrating steady growth amid challenging macroeconomic conditions. Sales revenue increased by 3% to US$6.67 billion, driven by price realisation and net new business wins, particularly in the Americas and Asia-Pacific regions. Underlying profit rose 10% to US$1.37 billion on a constant currency basis, reflecting operational efficiencies and asset productivity improvements.

The company declared a final dividend of 20.83 US cents per share, 30% franked, bringing total dividends for the year to 39.83 US cents per share. This represents a payout ratio of 62%, up from 60% in the prior year, underscoring Brambles’ commitment to returning value to shareholders.

Strategic Transformation and Board Renewal

Brambles’ ongoing Shaping Our Future transformation program has been pivotal in enhancing the customer experience, streamlining operations, and embedding digital capabilities. Initiatives such as the Serialisation+ pilot in Chile and advanced analytics have improved asset visibility and recovery, contributing to reduced pallet loss rates and improved service levels.

In FY25, the Board welcomed four new Non-Executive Directors; Vik Bansal, Maxine Brenner, Cameron McIntyre, and Tony Palmer; strengthening its expertise in sustainability, supply chain, and digital transformation. These appointments align with Brambles’ strategic priorities and governance best practices.

Sustainability Leadership and Climate Commitments

Brambles continues to lead in sustainability, maintaining its position as one of the world’s most sustainable companies. The company achieved a 7.8% reduction in Scope 1 and 2 greenhouse gas emissions compared to FY24, and a 16.8% reduction in Scope 3 emissions since its 2020 baseline. It sustained 100% renewable electricity use in its operations and 100% sustainable timber sourcing, while diverting 93.6% of product waste from landfill.

Its climate transition plan targets net-zero emissions by 2040, supported by a comprehensive decarbonisation roadmap, supplier engagement through the Climate Smart Partners program, and investments in carbon removal projects such as biochar and reforestation. Brambles also integrates climate considerations into financial planning and executive remuneration, reflecting its commitment to accountability.

Capital Management and Outlook

Brambles maintains a strong balance sheet with a net debt to EBITDA ratio of 1.12x and investment-grade credit ratings. The company completed a US$403 million share buy-back in FY25 and announced a further on-market buy-back of up to US$400 million for FY26, subject to market conditions.

Looking ahead, Brambles expects constant currency sales revenue growth of 3–5%, underlying profit growth of 8–11%, and free cash flow before dividends of US$850–950 million in FY26. The company remains focused on commercial discipline, new business growth, and operational efficiencies to navigate uncertain macroeconomic conditions.

Bottom Line?

Brambles’ FY25 results underscore its resilience and sustainability leadership, setting the stage for continued growth amid evolving market and climate challenges.

Questions in the middle?

• How will Brambles balance growth with its ambitious net-zero and sustainability targets beyond 2030?
• What impact will the ongoing excess pallet stock in the US have on profitability and capital expenditure in the medium term?
• How will the recent board renewal influence Brambles’ strategic direction, particularly in digital transformation and ESG?