Latest news with #Saverglass
Yahoo
4 days ago
- Business
- Yahoo
Orora Ltd (ORRAF) (FY 2025) Earnings Call Highlights: Strong EBITDA Growth Amidst Challenges
EBITDA: $418.8 million, an increase of 19.4%. EBIT: $262.1 million, an increase of 9.5%. Statutory NPAT: $973.1 million, including profit on sale for OPS. Continuing NPAT: $151.1 million. EPS: $0.114 per share. Operating Cash Flow: $333.6 million. Net Debt: $254 million with leverage at 0.7x EBITDA. Final Dividend: $0.05 per share unfranked, total dividend for the year $0.10. Cans Revenue Growth: 12.1% higher, or 8.9% excluding aluminum prices impact. Cans Volume Growth: 6% for the year. Saverglass Revenue Decrease: 16.5% with volumes down 12%. Gawler Revenue Increase: 1.5%. Group Revenue: Increased 24% to $2.1 billion. Free Cash Flow Available to Shareholders: $97 million. CapEx: $263 million for FY25, expected $200 million for FY26. Dividend Payout Ratio: 69% of continuing operations for the half. Warning! GuruFocus has detected 7 Warning Signs with ORRAF. Release Date: August 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Orora Ltd (ORRAF) reported a strong EBITDA increase of 19.4% to $418.8 million, driven by a full year's contribution from Saverglass. The Cans business experienced a 6% volume growth, with revenue increasing by 12.1%, excluding the pass-through impact of aluminum prices. The company's balance sheet remains robust with net debt at $254 million and leverage at 0.7x EBITDA, supporting ongoing shareholder returns. Orora Ltd (ORRAF) declared a final dividend of $0.05 per share, bringing the total dividend for the year to $0.10, and has made significant progress on its share buyback program. The company is making substantial investments in capacity expansions, with a $350 million capital spend expected to deliver an incremental $50 million of EBIT by FY30. Negative Points The operating environment for the glass business, particularly Saverglass, remains challenging due to ongoing tariff issues and a 16.5% revenue decrease. The Gawler facility was impacted by the G3 furnace shutdown, contributing to a decline in EBIT. Higher depreciation costs, particularly from Saverglass, have partly offset EBITDA growth. The company faces potential challenges from US tariffs on EU production, which could impact Saverglass' operations. Orora Ltd (ORRAF) anticipates additional corporate costs of $7 million in FY26, which could temper EBIT growth. Q & A Highlights Q: Can you elaborate on the volume growth expectations for Saverglass in FY26 and whether it will be consistent across both halves of the year? A: Brian Lowe, CEO: The volume growth in the second half of FY25 was primarily due to new business in wine and champagne. We are not expecting a significant pickup in underlying consumer demand but are focusing on growing new business. The timing of demand is variable, and while historically the first half is stronger, it is difficult to project at the moment. We expect growth in specific segments other than spirits, which have a longer turnaround time. Q: Why does the guidance for Saverglass imply only slight EBITDA growth despite higher volumes and cost reductions? A: Shaun Hughes, CFO: The slight increase in EBITDA is driven by cost actions and stable pricing. The mix shift towards wine and champagne, which have lower price points, affects the overall growth. We are assuming constant currency with FY25 for our outlook. Q: Saverglass performed better than expected in the second half. What drove this positive surprise? A: Shaun Hughes, CFO: The team successfully drove volume growth in wine and champagne, achieving a 9% increase between the first and second halves. This growth, along with cost reduction efforts, contributed to the better-than-expected performance. Q: How do you assess the risk of competitors moving into the ultra-premium segment of Saverglass? A: Brian Lowe, CEO: The ultra-premium segment remains stable, and we have not seen significant competitive pressure. The business model for ultra-premium is different, with unique configurations and quality standards. We are well-positioned, and our pricing is holding well. Q: Can you provide insights into the sustainability of cost reductions at Saverglass, especially with the network changes at Le Havre? A: Brian Lowe, CEO: Most cost reductions are sustainable, including the EUR9 million savings from the Le Havre furnace closure. We have also reduced structural costs and worked with suppliers to lower costs. The profit-sharing arrangement is based on business performance, and we aim to maintain the reduced cost base. Q: What are the key priorities for Orora in the next two to three years? A: Brian Lowe, CEO: The focus is on execution, particularly in the Cans business, where growth CapEx investments are nearing completion. For Saverglass, we aim to drive cost efficiency and instill global practices. We are not focusing on new areas but rather on optimizing current operations. Q: How do you plan to manage the impact of tariffs on Saverglass in FY26? A: Brian Lowe, CEO: The 15% tariff on EU production is a recent development, and we are yet to receive feedback from customers. Our outlook assumes steady underlying demand, and we are pursuing opportunities to grow volume independently of tariff impacts. Q: What factors give you confidence that demand for Saverglass is stabilizing? A: Brian Lowe, CEO: Customer-owned inventory levels have decreased significantly, indicating stabilization. Nielsen scan data shows a global decline in spirits demand, but we believe destocking is ending, and demand should stabilize to consumer levels. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
01-04-2025
- Business
- Yahoo
Verallia, Saverglass part of anticompetition investigation in France
This story was originally published on Packaging Dive. To receive daily news and insights, subscribe to our free daily Packaging Dive newsletter. French authorities conducted raids last week of at least two glass packaging companies as part of an investigation into possible anticompetitive practices. Orora Limited issued a news release today detailing unannounced visits by France's Autorité de la concurrence, or Competition Authority, on Thursday and Friday at its Saverglass business's headquarters in northern France. Similarly, Verallia issued a news release Friday confirming the regulator 'carried out visits and seizures' on March 27 at its company headquarters in a Paris suburb. Beverage industry participants in France initiated a complaint over price increases that prompted the agency's probe of the glass packaging industry, according to Orora's release. It says only a small number of complainants are Saverglass customers. The Competition Authority confirmed in its release on Friday that it carried out unannounced inspections 'at the premises of companies suspected of having implemented anticompetitive practices in the sector for the manufacture and marketing of glass packaging.' It does not disclose the names of companies under investigation and noted that such inspections do not imply guilt, as guilt 'can only be established following an investigation on the merits.' Verallia said it is cooperating with the authority's investigation and that it 'wishes to remind that compliance with regulations and business ethics are at the core of Verallia's values.' It also echoed the agency's statement about not assuming guilt, saying that 'such an inspection does not imply that Verallia is involved in any anti-competitive behavior.' Orora also confirmed that its leadership cooperated with the inspectors and provided the requested data and other information. The company will continue to cooperate with the investigation, according to the news release. Orora said that the investigation relates to a period of time prior to its ownership of Saverglass; Orora completed that acquisition in December 2023. The period in question 'was marked by major events including the Covid pandemic and the start of the war in Ukraine in February 2022, which led to input costs for glass container production including energy, key raw materials and gas increasing significantly, as well as increased freight costs in an environment of very high inflation across Europe,' it said. 'The Saverglass leadership team is confident appropriate business practices have been followed, operating independently from other glass packaging manufacturers. Orora, and Saverglass, uphold strong standards of integrity at all times, with integrity being one of the company's core values as well as having a strong commitment to competition law compliance,' according to Orora's statement. These types of investigations 'typically require years to progress,' said Orora's statement. Glass packaging markets tend to be regional. Industry participants and associations have long touted the recyclability of glass and that recovered glass is rarely exported or imported. As such, it remains to be seen whether impacts from the investigation in France will remain isolated or stretch into the United States. Recommended Reading The future of wine packaging: Lighter bottles and less glass Sign in to access your portfolio
