How Will Orora Turn Around Saverglass While Driving FY26 Growth?

Strategic Portfolio Transformation

Orora Limited marked a pivotal year in FY25, completing a significant portfolio realignment that has reshaped the company into a focused beverage packaging specialist. The integration of Saverglass, a premium glass manufacturer, alongside the divestment of its North American packaging and closures businesses, has streamlined Orora’s operations and sharpened its market focus.

While the acquisition of Saverglass positions Orora to capitalize on premiumisation trends in spirits and wine packaging globally, the initial 18 months have seen demand softer than anticipated. The company is actively implementing operational changes and cost efficiencies to stabilize and grow this segment.

Financial Performance and Shareholder Returns

Despite headwinds in the glass business, Orora delivered robust financial results for FY25. Earnings before interest and tax (EBIT) increased by 9.5% to $262 million, while net profit after tax (NPAT) rose 18% to $151 million. Operating cash flow surged 46.4% to $334 million, reflecting strong cash generation capabilities.

The Board declared a final unfranked dividend of 5 cents per share, maintaining the full-year dividend at 10 cents per share, consistent with the prior year. The successful sale of the North American packaging business at a favorable multiple enabled debt reduction and supported ongoing capital returns, including an on-market share buyback program.

Sustainability and Innovation Drive

Orora continues to advance its sustainability agenda, reporting a 22% reduction in Scope 1 and 2 emissions since 2019 and setting ambitious targets for 2035, including a 41% reduction in greenhouse gases. The company also disclosed Scope 3 emissions data for the first time, committing to a 31% reduction by 2035.

Recycled content targets have been raised, with glass containers expected to reach 68% recycled content by 2035 and aluminium cans targeting 80% by 2030. Technological innovation is a key focus, exemplified by the launch of Helio, a high-speed digital printing system integrated directly into the can manufacturing line, enhancing customization and reducing lead times.

Operational Highlights and Outlook

Orora’s cans business experienced a 6% volume increase, supported by new capacity at Revesby and ongoing expansion at Rocklea. The Global Glass segment saw volume declines due to destocking but showed signs of recovery in the second half of FY25. The Gawler facility in Australia faced challenges from flat commercial wine demand but is adapting through operational efficiencies, including furnace optimizations.

Looking ahead, Orora projects EBITDA growth across all businesses in FY26, with cautious optimism amid global economic uncertainties. The company expects higher EBIT in its cans segment and broadly stable EBIT at Saverglass, supported by cost reduction initiatives. The Gawler operation anticipates improved profitability from its streamlined two-furnace setup.

Governance and Shareholder Engagement

The AGM also highlighted shareholder concerns regarding executive remuneration, with a notable dissent vote on the remuneration report. The Board acknowledged this feedback and emphasized the alignment of incentive structures with the company’s transformed scale and performance. New Board member Jackie McArthur brings valuable consumer marketing expertise to support Orora’s growth trajectory.