This article first appeared on GuruFocus .
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Sales Revenue Growth:2% increase, driven by strong net new business growth.
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Underlying Profit:Up 7%, reflecting operating leverage and cost management.
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Free Cash Flow Before Dividends:USD 482 million, supported by higher earnings and asset efficiency.
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Interim Dividend:USD 0.23 per share, up 21% from the prior period.
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On-Market Share Buyback:USD 191 million of shares purchased, targeting USD 400 million by end of FY26.
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Net Promoter Score:Increased by 9 points compared to the first half of FY25.
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EPS Growth:13% increase, including a 2 percentage point benefit from share buyback.
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Return on Capital Employed (ROCE):Increased 1.1 percentage points to 24.3%.
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Price Realization:2% increase, primarily driven by inflation recovery in labor costs.
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Net New Business Growth:2% increase, with strong contributions from the Americas and Europe.
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Like-for-Like Volumes:Declined 2% due to weak consumer demand.
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Margin Expansion:1.1 percentage points improvement, driven by supply chain and overhead productivity.
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Pooling Capital Expenditure to Sales Ratio:11.8%, stable compared to first half FY25.
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Free Cash Flow Guidance:Upgraded to USD 950 million to USD 1.1 billion for the full year.
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Revenue Growth Guidance:Revised to 3% to 4% for the full year.
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Underlying Profit Growth Guidance:8% to 11% for the full year.
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Release Date: February 18, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Brambles Ltd ( BMBLF ) achieved a 2% sales revenue growth in the first half of FY26, driven by strong net new business growth.
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Underlying profit increased by 7%, supported by supply chain and overhead productivity improvements.
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The company declared an interim dividend of USD0.23 per share, up 21% from the previous period.
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Brambles Ltd ( BMBLF ) is on track with its USD400 million share buyback program, having purchased USD191 million worth of shares in the first half.
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The company made significant progress in its 2030 sustainability program, achieving a 5% reduction in Scope 1 and 2 emissions and retaining CDP's maximum A-List rating for climate change and forest.
Negative Points
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Consumer demand remained weak, particularly in the US and Europe, affecting pallet volumes with existing customers.
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Brambles Ltd ( BMBLF ) faced increased costs due to excess pallets in the US and inventory optimization in Australia.
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The company ended the period with approximately 4 million excess pallets in the US, which were not absorbed as quickly as anticipated.
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Higher damage rates in the US led to increased repair activity and storage costs.
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The company experienced a decline in like-for-like volumes in Australia due to reduced inventory levels by retailers and manufacturers.
Q & A Highlights
Q: Can you discuss the net new business growth cadence throughout the first half of FY26? It seems like it moderated slightly compared to previous periods. A: Graham Chipchase, CEO: The growth in new business moderated very slightly. In Europe and the US, our exit rates at the half were the same as how we exited Q4. New business is somewhat impacted by consumer demand, so as consumer demand weakens, the volume from new business wins is slightly lower than it would have been otherwise. However, we continue to see strong conversion from whitewood across the US, Europe, and Asia Pacific.
Q: You still have a 4 million pallet surplus in the US. How do you reconcile this with your expectation to reach optimal levels by FY27? A: Graham Chipchase, CEO: We ended the first half with the same level of excess pallets as FY25. Any pallets required for replacement and growth came from Latin America. We expect some improvement in US consumer demand in the second half, which should help us work through the 4 million excess pallets by the end of the first half of FY27.
Q: Can you provide an update on the progress around management measurement and intent, particularly regarding LTIs? A: Graham Chipchase, CEO: We are revising our LTI setup for FY27 onwards to align more closely with our investor value proposition. This will involve replacing the ROCE sales grid with a metric more aligned with total value creation. This change is subject to approval from investors and proxies and will be voted on at the AGM in October.
Q: Regarding the 4 million surplus pallets in the US, are they repaired or still awaiting repair? What are the current storage costs, and will these costs unwind into the first half of '27? A: Joaquin Gil, CFO: The pallets are stored and not yet repaired. As they come out of storage, they will be repaired. We continue to incur storage costs at a slightly higher level than expected, but we are still delivering good margin improvement. The step change in storage costs will occur after we work through the surplus pallets, likely post first half '27.
Q: Can you elaborate on the dynamics in CHEP EMEA for the second half, particularly regarding EBIT growth expectations? A: Graham Chipchase, CEO: We expect an improvement in EMEA performance driven by the reversal of IPEP timing, an acceleration in net new business wins, and improvements in the plant and transport ratio in the second half.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
