APALAC

APALAC REGION

Asia-Pacific + Africa + Latin America + Canada

83

APALACLEADERSHIP

ASIA-PACIFIC AFRICA LATIN AMERICA CANADA HUMAN RESOURCES

HOWARD JURIE ARTURO MIKE JOE

WIGHAM WELMAN CABRERA DIMOND FILIMON

President President President President VP

84

APALAC AT A GLANCEJUNE 03

200 CHEP Plants 25K Emitters

4M

9M

19M

10K Distributors

85

KEY INITIATIVESAPALAC

Targeted regional growthIntercontinental transfersGlobal pricing architecture

Overhead Cost ReductionDamage Ratio Reduction

PERFECT TRIP

COST EFFICIENCY

ASSET PRODUCTIVITY

REVENUE GROWTH

QUALITY

Pool growth efficiency

86

ASSET PRODUCTIVITYPOOL GROWTH EFFICIENCY

• Improving BVA through focus on pool growth efficiency

• Strict enforcement of fundamental pooling principles

• Reduction of plant stocks

• Standard Operating Procedures (SOP) on asset counts

• Conversion to international pallet specifications in South America and Africa60%

80%

100%

120%

140%

160%

180%

FY02 FY03

Pool Growth Efficiency%∆$$ / %∆T

Target 87

ASSET PRODUCTIVITYNEW PALLET ISSUE RATIO

5.0%

6.0%

7.0%

8.0%

FY02 FY03 FY04

New Pallet Issue Ratio

y/i

Est.

Target

88

REVENUE GROWTHOVERVIEW

• Promoting intercontinental transfers

• Launching Middle East

• Driving penetration in Latin America

• Strong growth in container business

• Global pricing architecture(activity-based)

COST EFFICIENCYKEY INITIATIVES

• 1 CHEP standardization

• Damage ratio reduction through Perfect Trip

• Overhead cost reduction through global best practices and scale

• Development of automated inspection and repair capability

• Planned rollout of global Information Systems

QUALITYPERFECT TRIP PROJECT FOCUS

• Invoicing quality

• Reduction in manual transactions

• Planned rollout of global TRIPS system

• 36 Perfect Trip Projects underway

APALACSUMMARY

92

• Business model fundamentals consistently successful in all APALAC regions

• Sustained growth in core pallet business

• Aggressively driving container growth

• Focus on asset productivity and profitability

• Strong profitability and financial returns:27% ROCI in FY03

• Strongly cash positive, pre-tax and interest

• Expanding into new territories

• Further efficiency opportunities through global benchmarking and standardization

CONTAINER BUSINESS

CONTAINER BUSINESSLEADERSHIP

RPC AUTOMOTIVE IBC CCC

ROB GERRY BRUNO EDDIE

GOLDEN GIUDICI CEPPAS HOSTETTER

VP SVP Director VP

94

CONTAINER BUSINESSLEADERSHIP

FINANCE HUMAN RESOURCES PERFECT TRIP

DEAN DEVAN

LARSON SCOTT

SVP & CFO Director Director

OPEN

95

KEY INITIATIVESCONTAINER BUSINESS

RPC AUTO IBC/CCC

Cycle time reduction

Global RPC design Asset Tracking System

Product rationalization

Growth at existing accounts Globalization of market Targeted new distributors Nissan in USA Latin America market

GM Holden in Australia

Service center network optimizationGlobal wash plant standardization Shared plant locationsStandard operating procedures Next generation FLCGlobal RPC design

PERFECT TRIP

ASSET PRODUCTIVITY

REVENUE GROWTH

COST EFFICIENCY

QUALITY

96

RPC BUSINESSBASIC CONCEPT

P

E

D

97

RPC BUSINESS AT A GLANCE

31 CHEP Plants 2K Emitters

10M

10M

19M

4K Distributors

98

ASSET PRODUCTIVITYRPC CYCLE TIME REDUCTION

0

20

40

60

80

100

FY02 FY03 FY04

• Aggressive asset management has reduced cycle time from 80 to 70 days

• Some pools operating at less than 40 days

• Customers now have financial incentives to reduce cycle time

• Investment costs decreasing and pool efficiency increasingEst.

DaysCycle Time

T / i

99

ASSET PRODUCTIVITYGLOBAL RPC DESIGN

• 20% greater internal volume

• 30% lighter

• 40% folded height reduction

• 50% more RPCs per truckload

• 40% lower cost

• Easier to handle

• First deliveries in early 2004

• Not obsolescing existing pool

100

ASSET PRODUCTIVITYRPC PRODUCT RATIONALIZATION

0

5

10

15

20

25

FY04 FY08

Europe USA APALAC

• Next generation RPCs replace several sizes with a single size

• Over 40% reduction in SKUs

• Non-productive sizes are being phased out and credited toward new purchases

• Focus on counter-cyclical produce in same RPC

# of SKUs

Est.

101

REVENUE GROWTHRPC MARKET OVERVIEW

• $4B Market opportunity

• RPCs only 5-10% market penetration vs. cardboard

• Growing adoption of RPCs by new retailers coupled with existing customers expanding use

• $1 per container savings with RPCs

Price War in Aisle 3Wal-Mart Tops Grocery List With Its Supercenter FormatMay 27, 2003

By PATRICIA CALLAHAN and ANN ZIMMERMAN Staff Reporters of THE WALL STREET JOURNAL

When two Wal-Mart Supercenters and a rival regional grocery opened near a Kroger Co. supermarket in Houston last year, the Kroger's sales dropped 10%. Store manager Ben Bustos moved quickly to slash some prices and cut labor costs, for example, by buying ready-made cakes instead of baking them in-house, and ordering precut salad-bar items from suppliers. His employees used to stack displays by hand: Now, fruit and vegetables arrive stacked and gleaming for display.

Produce is stacked in reusable plastic containers to cut labor costs.

Such moves have helped Mr. Bustos cut worker-hours by 30% to

102

REVENUE GROWTHRPC REGIONAL COMPETITORS

EnvirocrateFCCIFCORetailer-Owned Pools

HaysIFCOStecoEPSRetailer-Owned Pools

HaysIFCOGeorgia Pacific

Retailer-Owned Pools

Retailer-Owned Pools

103

REVENUE GROWTHRPC OUTLOOK

0

50

100

150

200

250

300

350

FY02 FY03 FY04

Europe USA APALAC

• 15+% CAGR

• Continued steady growth in Europe and new markets emerging in Latin America

• Branding of RPCs to retailer starting to win share of cardboard market

• Pacing revenue growth as profitability continues to improve

M

Est.

Issuesi

104

REVENUE GROWTHRPC TARGETED DISTRIBUTORS

Asia-Pacific Europe Latin America United States AfricaWoolworth's Carrefour Wal-Mart Spar

Casino H.E.B

Morrison's Stater Brothers

Eroski

Coles-Myers Auchan Wal-Mart Kroger Shoprite

LeClerc Gigante Albertson's Pick n' Pay

PAM Campbell's Winn Dixie Woolworth's

Alcampo Costco Price Chopper

EXISTING

TARGET

105

COST EFFICIENCYRPC

• Global wash technology standardization program underway

• 28% wash cost reduction

• Standard Operating Procedures (SOPs)under development

• Global RPC design enabling transportation cost reduction

QUALITYPERFECT TRIP PROJECT FOCUS

• RPC wash cost reduction

• Transportation cost reduction

• Inventory optimization

• Sanitation certification

• 9 Perfect Trip Projects

• Recruiting dedicated Perfect Trip Director

107

RPC SUMMARY

FY02 FY03 FY04

Plant Depreciation Transport

• Solid double-digit growth in under-penetrated market

• Strong pooling and customer synergies with pallet business

• CHEP best positioned

• Driving continued cost reduction

• USA on track for break-even or better profitability

• Other regions very healthy

Est.

Direct Cost Per Issue$direct/i

108

PRODUCT INNOVATION

PRODUCT INNOVATIONOVERVIEW

PALLETS CONTAINERS

Composite Blocks IBC Accessories Composite Boards KLT Automotive RFID FLC Automotive

Plastic Pallet Global RPCPlastic IBC

ENHANCEMENT

NEW

110

PLASTIC PALLETSUMMARY

• Ready to meet select customer requirements

− Lighter weight

− Appropriate load bearing ability

− Fire retardant

− Washable

• Premium service offer

• Tightly controlled targetedmarket segments

• Trial in USA: 20K pallets

• Test customer acceptance of price / value premium

• First to market

111

RADIO FREQUENCY IDENTIFICATIONBASIC CONCEPT

• RFID tag is a silicon chip with a copper antenna

• Information includes asset “license plate”

• RFID enables simultaneous multi-read

• Solution available for wood and plastic

FLORIDA PILOT PROJECTOVERVIEW

E

EE

E

E

EE

E

E

E E

EE

E EE

EE

EE

E

EE

EE

EE E

EE

E

E

E E

• 6 service centers

• 34 Emitters

• 350 Distributors

• 12 months

• 250K pallets

“CHEP’s Florida pilot is a real-world scale application that demonstrates the viability of RFID in the logistics application. What makes the effort special and unique is that CHEP persevered while many others stopped – and CHEP made it work!”

Judges’ comments, Auto-ID Awards Program 2002

113

FLORIDA PILOT PROJECTPALLET LEVEL LEARNING

• Tested technology in a real supply chain environment

• Validated technology can work in an industrial setting

• Gained RFID supply chain knowledge and expertise

• Created PLUS ID as a premium service offering

114

PLUS ID SERVICE OFFERINGINTERNAL AND EXTERNAL DRIVERS

• Leverage Wal-Mart pallet and case mandate

– Top 100 suppliers must tag by 05

– All suppliers must tag by 06

• Provide 100% read-capable CHEP Standard pallets with Plus ID added-value functionality

• Tag as customer demand warrants

• Strategically deploy as Perfect Trip enabler for asset management, damage reduction and pricing differentiation as tag pallet base increases

• Uniquely positioned to provide service offer

MARKET CHEP

115

RFIDSUMMARY

• Uniquely positioned to provide RFID at the pallet level for our customers

• Made RFID work within the real supply chain environment

• Created Plus ID as a premium service offer

• In discussion with key Emitters and Distributors

• CHEP is ready!

116

SUMMARY

THE 1 CHEP APPROACH

BVA

CUSTOMERSATISFACTION

ASSETPRODUCTIVITY

• COST EFFICIENCY

• QUALITY

• TECHNOLOGY

• PRODUCT INNOVATION

Differentiators andGrowth Drivers for

Pallet and Container BusinessesCore Competence andReturn Driver

GLOBAL STANDARDIZATION: 1 CHEP

PEOPLE

118

SUMMARY

• Global presence and infrastructure

• Market leader everywhere we play

• Largest asset base

• Strong relationship with world’s largest FMCG players

• Restructuring plans in USA and Europe on track

• Leveraging global scale through 1 CHEP standardization

• Renewed focus on asset productivity

• Perfect Trip projects driving customer satisfaction

• Ongoing talent upgrade

• Strong cash generation potential