Brambles replaces CHEP North America boss Xavier Garijo due to ‘cultural differences’

Shareholders appear to have been caught off guard after Xavier Garijo left his job as Brambles’ North American boss after just six months, due to differences in leadership styles.

Pallet maker Brambles says Xavier Garijo has left the company due to cultural differences. Picture: Bloomberg

CHEP American chief executive Xavier Garijo has left Brambles after six months due to “cultural differences” with the ASX-listed logistics company.

Mr Garijo had led CHEP Americas since January in what was a newly created position overseeing Brambles’ Americas operations, which combined the previously separate CHEP North America and CHEP Latin America business units.

He left the company with immediate effect to “pursue other opportunities”, according to Brambles.

Brambles group chief executive Graham Chipchase said the company recognised the energy and significant skills that Mr Garijo had brought to the role, but added that both parties agreed a different leadership approach was needed.

“Due to cultural differences, we have mutually agreed that a different leadership is better suited going forward,” Mr Chipchase said.

“We thank (Garijo) for the contributions he has made to our business and we wish him the very best for the future.”

The Australian understands that Mr Garijo was not the right fit for Bramble’s corporate culture.

Brambles shares fell 2 per cent to $14.24 after hitting an intraday low of $14.06. Total gains since the start of January have narrowed to 4.2 per cent.

Brambles will revert to its old leadership structure, with CHEP Europe chief executive David Cuenca to head CHEP North America, while Paola Floris will continue to lead the Latin America business and will report directly to Mr Chipchase.

Mr Garijo had started in the role in January. Picture: LinkedIn

“I am delighted David has agreed to lead the North American business,” Mr Chipchase said.

“David brings extensive global pooling experience to the role, having been with Brambles since 2000. He is a proven people leader with clear strategic vision and experience in driving growth while optimising business performance.”

Mr Cuenca said he was excited to lead the North American business through its next phase of growth, and he would be focused on unlocking significant value for customers and business.

Mr Garijo has 25 years of experience managing global consumer goods supply chains and operations, and multi-industry global logistics businesses. He was a global executive board member for contract logistics at DB Schenker before he joined Brambles, and had also worked for Revlon and Unilever, and studied at the prestigious ESPCI Paris university.

The CHEP North Americas chief executive role was designed for Mr Garijo, and combined the CHEP North America and CHEP Latin America business units to reflect the increasing collaboration and interconnectivity between them.

“I am delighted to be joining Brambles as it progresses its digital transformation to ensure ongoing, profitable growth and strengthen further our customer value proposition,” Mr Garijo said in January.

Brambles is targeting new customers in Europe and North America as 8 million pallets hoarded by customers during the pandemic are returned to the network, and an economic slowdown results in customers adjusting inventory levels.

The group upgraded its full-year profit guidance in February as it benefited from deflation in lumber prices because of a lack of homebuilding, to beat expectations in the December half. While Brambles still expected revenue to rise 6-8 per cent on a constant currency basis, it now predicts a 13-15 per cent increase in underlying profit for the 2024 fiscal year, compared to 9-12 per cent previously.

While the group experienced year-on-year increases in labour inflation, this was partially offset by deflation in global fuel and lumber prices as well as US third-party freight rates.

Brambles said in February the lack of homebuilding in many markets had helped to drive down the price of lumber, which translated to a reduction in the capital cost of pallets in all regions, albeit these remained well above historical averages.