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Brambles Industries (BI.)

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Friday 11 November, 2005

Brambles Industries

AGM Statement

Brambles Industries PLC
11 November 2005

            Brambles Industries Limited 2005 Annual General Meeting

                             Addresses delivered by
    Mr Don Argus AO, Chairman, and Mr David Turner, Chief Executive Officer

                                11 November 2005

Good morning, ladies and gentlemen.

My name is Don Argus and, as your Chairman, it is my pleasure to welcome you to
the 2005 annual general meeting of Brambles Industries Limited.

We have a very full agenda this morning, so I propose to take the Notice as
read. There are copies of the Notice and minutes of our last meeting outside in
the registration area.

Let me now briefly run through today's agenda.

I will begin by giving you an overview of the Group's performance and how we see
the year ahead. David Turner will then give you some detail about the
performance of each of our businesses. I will then answer your questions before
moving on to the formal items of our business.

There are 18 resolutions to consider. When we move to vote on each resolution I
will make sure you have the opportunity to fully discuss each one.

As today is Remembrance Day it is also my intention to pay respect to those who
died in the cause of peace, so at 11.00 o'clock we will suspend proceedings to
observe a minute's silence.

At the end of the meeting, the Directors and the management team would like you
to join us outside for some light refreshments - after 18 resolutions, I am sure
you will need a cup of tea!

Let me start by introducing your Directors.

Starting on your far right is Jac Nasser; next to him is Roy Brown; then we have
Luke Mayhew, our newest Non-executive Director; Sir David Lees is Joint Deputy
Chairman of the Board. On my other side is David Turner, our Chief Executive
Officer; Mike Ihlein, our Chief Financial Officer; then Mark Burrows, our other
Joint Deputy Chairman; Stephen Johns; Hans-Olaf Henkel, who joined the Board at
the beginning of this year; and finally Allan McDonald.

Also on the stage - on my left - is our Company Secretary, Craig van der Laan.
Representatives from the Group's external auditors, PricewaterhouseCoopers, are
also here today, including Bruce Morgan.

While you can read full details of each of the Directors' backgrounds and
qualifications in the Annual Report, I want to give you some brief background on
our two newest Directors.

Hans-Olaf Henkel joined the Board on the first of January this year. Hans-Olaf
had a long and distinguished career with IBM, holding various executive
positions in Germany, the US and Asia, as well as at IBM's European headquarters
in Paris. He was appointed President of IBM Germany in January 1987 and as
Chairman and Chief Executive Officer of IBM Europe, Middle East and Africa in
1993. He was President of the Federation of German Industries from 1995 to 2000
and his other Board appointments are set out in the Notice of Meeting.

Luke Mayhew joined the Board just over a month ago. Luke has extensive
experience in the retail and services industries. He was Managing Director of
John Lewis, the UK's leading department store business, from 2000 to 2004 and
Development Director of John Lewis Partnership plc, from 1992 to 2000 and is a
director of WH Smith plc.

On your behalf I would like to welcome Hans-Olaf and Luke to their first
Brambles annual general meeting in Australia.

At the same time, let me pay tribute to Allan McDonald who will retire at the
end of this year's annual general meetings. Allan has made an extremely valuable
contribution to the Brambles Group over more than 24 years. I thank him
sincerely for his outstanding efforts, and we would like to wish Allan and his
wife Marie all the best for the future.

Two other Directors will also retire over the next 15 months. Sir David Lees
will stand for re-election this year but will retire at the conclusion of the
2006 annual general meetings, and Mark Burrows will also retire at the
conclusion of the 2006 annual general meetings.

The foundation of sustainable change at Brambles is the ongoing renewal of the
Board. Over the past 19 months, four new Non-executive Directors have joined our
Board. Each one of them reflects the global nature of Brambles and its leading
role in support services:

•  Jac Nasser, the former President and Chief Executive of Ford Motor

•  Stephen Johns, who - through his long career at Westfield - was
   instrumental in creating one of the world's largest shopping centre 

•  Hans-Olaf Henkel, a business leader in global information technology;

•  Luke Mayhew, who was chief executive of one of the UK's largest

Together with our longer serving Directors, the Board is well balanced, with a
strong corporate memory as well as new insights into our industries.

Another outcome of the work undertaken within Brambles has been the improvement
in the financial fundamentals of the Group. This has allowed David Turner and
his team to focus on the Group's strategic direction, which will ensure
Brambles' sustainability and growth over the coming years.

The highlights of the 2005 financial performance included:

•  comparable operating profit - which means profit before interest, tax,
   goodwill amortisation and significant items - increasing by 20% to A$1.1

•  free cash flow increasing from A$619 million to A$813 million;

•  net debt falling by A$745 million to A$2.9 billion, with gearing down
   from 55.5% to 49.7% - below our 50% target; and

•  the dividend rising by 8%, the first time we have increased the payout
   to shareholders since the formation of the DLC.

The highlights of each of our four main businesses included:

•  CHEP, the largest business within the Group, performing well in all
   regions and achieving a 31% increase in comparable operating profit - a
   credit to the huge amount of work and focus by the management team;

•  Cleanaway delivering an improved result in the second half of the
   financial year;

•  Recall improving sales in all regions with a solid improvement in
   profits; and

•  Brambles Industrial Services achieving solid profit growth.

I stated in this year's Annual Report that Brambles would continue to assess its
portfolio of businesses based on where shareholder value can be created in the
long term and where appropriate opportunities for growth exist.

That is, we are ensuring that we have the fundamental financial and operating
strength to be well positioned - no matter where we are in the economic cycle.
We are also refining our focus on the Group's strengths as we make the
transition from turnaround to growth.

We have recently made two announcements that demonstrate this strategy in

•  the sale of Cleanaway Germany to SULO, the Germany-based global waste
   management group, for A$893 million, and

•  the acquisition of AUSDOC, the Melbourne-based information management
   group, for A$260 million.

Both these transactions, which are subject to approval from the relevant
competition authorities, deliver a very good outcome for Brambles and, I
believe, are in the best interests of shareholders. They improve the quality of
our earnings and enable us to further reduce debt.

David Turner will take you through the detail of these transactions during his
review of the Group's operations.

On your behalf, I would like to congratulate David, his management team and our
28,000 employees across the Group for their hard work generating these results.

I would now like to discuss our commitment to corporate social responsibility
and corporate governance - both of which are critical to our sustainability.

On the screen behind me you can see some of our achievements, including our
retained listing in both the Dow Jones Sustainability Index and FTSE4Good Index,
two of the most authoritative international guides for socially responsible
investors. In addition, Brambles was included as a founding member of the FTSE
ISS Corporate Governance Index Series, which focuses on best corporate
governance practice by listed entities.

There are many examples of excellence in health and safety at Brambles, and
significant progress was made during the year on a number of performance
measures. There is, however, room for improvement.

Tragically, one employee died in a work-related incident during the year and
Brambles' vehicles were involved in a number of traffic accidents in which
members of the public were injured or killed. This reinforces the need for
Brambles to improve its safety performance and to strive to achieve its goal of
Zero Harm - which means zero injuries and zero environmental damage.

These objectives are, and will continue to be, a priority for the Board and
senior management.

We are also aware that our people are part of their local communities. The
Brambles Community Reach programme provided A$500,000 in grants to community
organisations during the year. Brambles employees around the world also
contributed to a range of other fundraising events and activities. In January
2005, Brambles donated a total of A$500,000 to assist aid organisations
providing emergency relief to the survivors of the devastating Boxing Day 2004

I would now like to provide you with a trading update for the Brambles Group.

As Brambles indicated at the time of the 2005 full year results, we continue to
expect further good progress in profit and solid cash generation in the year
ahead. The company is performing well in the early part of the current financial
year. In the three months to the end of September, sales and profits are well
ahead of the comparative period in the prior year.

CHEP performed strongly in each region in the first three months of the year.
CHEP Americas sales were 10% higher than the prior comparative period and
profits continued to gain from on-going efficiency improvements. In CHEP Europe,
sales growth for the three months to September was 5%. Customer conversions to
the new pricing architecture have continued at a steady rate and profits have
benefited from continuing operational efficiencies. CHEP in the rest of the
world continues to trade well.

Overall, CHEP is expected to deliver good growth in all regions in 2006, driven
by continued sales growth and continuing benefits from operational improvements.

The divestment of Cleanaway Germany is expected to be completed early next year,
subject to approval from the relevant competition authorities in Europe.
Cleanaway UK is showing improvements in its Commercial and Industrial business
and is gaining from the restructuring which took place last year. For the full
year, a marked improvement in performance is expected from the continuing
Cleanaway activities in the UK and Rest of World, with the first half being
particularly strong when compared with the prior comparative period.

In Recall for the first three months of the year, Europe continued to make solid
progress. North America saw slower sales growth and some impact on results from
higher fuel costs. Overall, sales and profits in Recall are expected to grow for
the full year.

In the three months to September, performance in Brambles Industrial Services
and Regional Businesses is ahead of the prior comparative period.

Overall, Brambles expects to make further good progress in profit in the year
ahead, with CHEP expected to continue to perform particularly well. Brambles
will continue to focus on creating value and maintain a disciplined approach to
the management of capital expenditure and working capital. Further solid cash
generation is expected for the full year.

I would now like to ask David Turner to speak to you in more detail about the
performance of the Group's businesses.

Thank you, Don, and good morning ladies and gentlemen.

Today I wanted to tell you briefly about the progress that we have made in the
past 12 months in each of our four main businesses - CHEP, Cleanaway, Recall and
Brambles Industrial Services - as well as our smaller regional businesses.

I will discuss the key issues we face in each business, our priorities and
progress in managing them and outline the key factors we have addressed in our
markets. I will then hand you back to our Chairman for questions.

At our annual general meeting last year, I said that our strategy was working.
This year I can say that it is building a real momentum. Sales, profits and
earnings per share were all up. Free cash flow generation was strong, we reduced
debt and gearing improved.

We continue to manage our businesses rigorously, using BVA - Brambles Value
Added - to ensure that each of our businesses incorporates the true cost of
capital into decision-making so that all of our managers act like shareholders.

The Group's BVA, which is reported in sterling, was £80 million in 2005, that is
£69 million higher than in 2004. I believe that the goal of improving
shareholder value is now entrenched across the organisation.

We have also progressively introduced Six Sigma process to identify and measure
our improvement programmes. Six Sigma is a process used by businesses like
Toyota, GE and Motorola to continuously improve every aspect of the business
process. It will help us to lift productivity and improve asset utilisation.

In terms of performance and value creation, the year was dominated by the strong
performance of CHEP. Every region improved profitability and cash flow. Sales
rose by 9% while comparable operating profit was up by 31%. The main drivers of
these excellent results were:

•  continued improvement in asset management and productivity; and

•  strong sales growth from three sources:

   o   existing customers growing their business,

   o   existing customers awarding CHEP new business, and

   o   new customers.

A one-team approach saw the sharing of best practices across CHEP. We set up
nine global councils to develop and drive a range of global initiatives. CHEP's
performance will continue to benefit from this collaborative approach.

CHEP Americas had a very good year, growing sales by 10% with performance
continuing to improve. As a result, comparable operating profit rose 58%.

CHEP Europe grew sales by 7% while comparable operating profit increased by 17%.
The new activity-based pricing structure aligns pricing to customer activity.
This improves asset utilisation and cash flow for CHEP. It is progressing well
and should be largely completed by the end of December this year.

Sales for the CHEP businesses in the rest of the world increased by 12% and
comparable operating profit was up by 21%.

Turning now to Cleanaway - sales increased by 6%, but comparable operating
profit fell 8% despite a much improved second half. The UK trading performance
was stronger, with improved sales and comparable operating profit. This was on
the back of strong Municipal and C&I sales growth.

The state-of-the-art Materials Recycling Facility in Greenwich, which was
commissioned in December last year, is the largest reprocessing plant for
municipal recyclates within Greater London. We believe it is Europe's most
advanced plant, capable of handling about 75,000 tonnes of material each year.

In Australasia, the operating environment was challenging, but we have put a
number of initiatives in place that should see a marked improvement in
profitability in the year ahead.

As the Chairman has mentioned today, we announced last month the sale of
Cleanaway Germany to SULO for A$893 million.

The German waste industry has been undergoing major structural change in recent
years and it has been clear for some time that industry consolidation is
inevitable. We knew that, in this environment, we had to be either a buyer or
seller of assets. We did consider buying the remaining 30% of RWE Umwelt's
business but decided not to proceed with this option because it was not value
enhancing for shareholders.

SULO offered us an attractive price for Cleanaway Germany and the proceeds from
the sale will enable us to invest in other businesses that offer better long
term growth prospects. It also helps us to reduce debt.

Our strategy is to continually assess our portfolio of businesses based on where
shareholder value can be created in the long term and where there are
appropriate opportunities for growth.

The acquisition of AUSDOC is a good example of this strategy.

It is a high quality information management business with a leading position in
its markets. Recall is the number one player in the Australian market, with
AUSDOC number two.

Recall operates in more than 200 locations in 23 countries on five continents.
Its integrated services manage physical and digital documents through their
entire life cycle - from creation, indexation and organisation, secure retention
and retrieval to secure destruction.

AUSDOC operates in all major regions in Australia, as well as selected markets
in Canada. It has a very small operation in Indonesia. The company provides
services such as document indexing, storage and retrieval for its customers.

We expect the acquisition to be earnings positive before amortisation in the
first full year and to contribute to Brambles Value Added after the first two

Turning now to Recall's financial performance. Recall made a solid improvement
on last year's result, with all regions growing sales. Overall sales rose by 8%
and comparable operating profit increased by 14%.

Document Management Solutions is Recall's largest service line and achieved
further growth in 2005. Secure Destruction Services continued to expand through
acquisition and as customers responded to a range of regulations and other
requirements. It remains, however, a competitive business, particularly in the
United States. Data Protection Services performed well with the Asia-Pacific
region in particular showing strong growth.

In Brambles Industrial Services, sales increased by 5% and comparable operating
profit by 12%. Both the Northern and Southern Hemispheres contributed to the
improved profitability. The business has A$2.2 billion of contracted sales with
high contract renewal rates and consistent cash flows.

Regional Businesses achieved a sharp lift in profitability, led by the continued
turnaround at Interlake.

Brambles employs about 28,000 people in 50 countries. It is the excellence of
our people, combined with a relentless focus on customers, that continues to
drive our performance.

Our over-riding goal is to maximise the benefits of Brambles for shareholders,
customers, our people, the communities in which we operate and the environment
in which we all live. We will continue to manage our businesses in a disciplined
way and implement initiatives to further improve efficiency, customer service
and sales.

For the year ahead we will:

•  strive to achieve our goal of Zero Harm;

•  further improve our financial performance and achieve even higher levels
   of customer satisfaction through the use of Brambles Value Added, Six Sigma
   and other proven tools;

•  integrate Recall and AUSDOC successfully; and

•  continue to improve our business in any way we can.

(The Chairman then moved to the formal items of business.)

For further information, contact:
Investor    John Hobson, Head of Investor Relations    +61 (0)2 9256 5216
                                                       +61 (0)414 239 188

Media       Michael Sharp, Vice President Corporate    +61 (0)2 9256 5255
            Affairs                                    +61 (0)439 470 145
Investor    Sue Scholes, Head of Investor Relations    +44 (0)20 7659 6012
Media       Richard Mountain, Financial Dynamics       +44 (0)20 7269 7291

                Brambles is globally headquartered in Australia

                      This information is provided by RNS
            The company news service from the London Stock Exchange