Orora’s Full Year Financial Results 2024

Commenting on Orora’s full year results, Managing Director and Chief Executive Officer, Brian Lowe said:

 “The past financial year was a transformative period for Orora, as we completed the acquisition of premium global glass business Saverglass, one of the most significant milestones in the company’s history. While economic headwinds persisted across a number of regions, Orora has reported EBIT of $404.0m, up 26% which includes seven months of contribution from Saverglass, and was slightly ahead of our trading update issued in April. 

“We continued to navigate market challenges including lower customer demand for commercial wine, craft beer and premium spirits, as well as some sustained higher costs across the supply chain. Despite these factors, our team has demonstrated tremendous determination throughout the year to deliver a resilient result. 

“Improvements undertaken in the OPS business in North America in recent years is evident in EBIT margins growing to 5.6%, despite softness in the macroeconomic environment impacting volumes across the broader manufacturing industry. 

“Across our global Beverage business, excluding Saverglass earnings contribution, underlying EBIT increased 2.0% despite lower revenue. Earnings declined in Australasian Glass primarily due to a challenged commercial wine market, however this was offset by our Cans business, with record cans production delivering volume and earnings growth, and production capacity maximised across our sites. 

“The financial performance of Saverglass for the first seven months under Orora ownership was consistent with our trading update in April, in light of continued customer destocking. Saverglass is a quality business with a compelling value proposition. Encouragingly, industry commentary as well as our own inventory data indicates improvement in the destocking issue, with trends expected to normalise in early calendar year 2025. We enter the new financial year with a newly formed Global Glass business unit comprising Saverglass and our Gawler facility, and while the external environment remains challenging, we are well placed to capitalise on growth opportunities when market conditions improve,” Mr Lowe said.

Commenting on discussions to potentially divest OPS, Mr Lowe said: “Since the de-merger of Orora in 2013, we have steadily transformed the portfolio of businesses within the Orora Group. These decisions have been consistent with the creation of sustainable shareholder value and the company’s long-held strategic ambition to focus on beverage containers, given our strong view about the attractive long-term growth profile of this segment. Saverglass has provided the final building block in this strategic journey such that this focus can be materially accelerated. Therefore, we are currently in discussions to potentially divest the OPS business. Substantial work remains to finalise this divestment, and this will only proceed if the value and terms align to our own internal view of OPS’ value. The creation of value for our shareholders remains a priority.”

Sustainability update
Orora continued to make good progress across its sustainability program, with goals aligned to the pillars of Circular Economy, Climate Change and Community. Under the Circular Economy pillar, Orora achieved an average of 50% recycled content in its manufactured glass products, up from 38% in FY23, and an average of 72% recycled content in the aluminium flat sheets and coils used to make its cans, up from 57% in FY23. Under the Climate Change pillar, the Group’s goal is to achieve a 40% reduction in greenhouse gas emissions for Scope 1 and 2 by 2035. Scope 1 & 2 greenhouse gas emissions decreased by 13.8% (utilising Market-based factors for S2) and 17.8% (utilising Location-based factors for S2) from the FY19 baseline. In FY24, construction of an oxygen-fuelled furnace at Gawler progressed, expected to be completed in late 2024 and which will reduce carbon emissions by ~20%. Saverglass recommissioned its furnace F5 at Feuquiéres (France) as a low-carbon hybrid furnace, delivering a CO2 reduction of ~12% per tonne of glass produced. OPS introduced its Sustainable Design Lab, a state-of-the-art facility designed to drive innovation and convert more customers to sustainable packaging solutions.