Packaging company Orora has seen out the end of its financial year with growth in net profit after tax up 14.4 per cent to A$186.2m ($201m) and sales revenue up 4.9 per cent to A$4bn ($5.3bn) for its full year results.
Net debt increased from A$630m to A$674m from last year’s results and earning per share rose by 14.6 per cent and earnings before interest and tax by 11.1 per cent. to $302.3m. Orora says it has delivered double-digit underlying NPAT, EBIT and EPS growth for the third consecutive year.
Nigel Garrard, managing director and chief executive at Orora says, “Operationally the business has delivered another strong performance, driven by the strength and resilience of the Group’s core businesses and augmented by investments Orora has made to drive growth, particularly with establishing a national footprint for Orora Visual in the North American point of purchase and visual communication sector.”
“Orora Australasia delivered solid earnings and sales growth which more than offset input cost headwinds. In North America, the business delivered constant currency earnings growth of 23.1 per cent and now, with a second stream of earnings beginning to flow from Orora Visual, has contributed more than 50 per cent of Orora’s sales for the first time.”
Orora Australasia delivered a 6.6 per cent increase in earnings before interest and tax, with sales revenue 2.3 per cent higher. Both Australasian business groups – Fibre Packaging and Beverage – delivered earnings growth despite flat economic conditions and higher input costs.
Garrard says, “Since listing on the ASX in late 2013, Orora has been executing The Orora Way operating model, which encompasses the company’s strategic pillars of enhancing the core, innovating to lead and investing to grow. The Group’s disciplined focus and successful delivery against this operating model has guided Orora to more than double earnings over that period.
“Importantly, Orora’s strong cash conversion combined with the strength of its balance sheet, provides the Company with capacity and flexibility to continue to invest with discipline in innovation as well as organic and new growth opportunities, to deliver sustainable value creation for shareholders.”
Orora says higher Fibre Packaging earnings came from cost reduction and innovation benefits and the achievement of sales growth in targeted market segments. Higher glass volumes and improved operating efficiencies across both the glass and cans businesses drove the beverage business earnings growth, which more than offset input cost headwinds in the glass division and marginally lower volumes in cans.
During the year, Orora continued to invest in a range of focused initiatives projects, innovation and acquisitions to drive sustainable future growth, including A$141m to acquire three further North American point of purchase and visual communication businesses to establish a national footprint being: Register in New Jersey; Garvey Group, Chicago and Los Angeles; and Graphic Tech in Los Angeles.
Other investments include the successful completion of the project to increase manufacturing output of the Gawler glass furnaces by 60 million bottles; an upgrade to the plant and machinery at the Revesby Fibre Packaging plant; and the Orora Global Innovation Initiative, which includes a range of projects that enhance innovation, modernisation and productivity.
Orora says it expects to continue to drive organic growth and invest in innovation and growth in the year ahead, with constant currency earnings expected to be higher than reported in FY17, subject to global economic conditions.