Orora Group (ORA) Investor Update summary

Trading update and outlook

• Cans volume growth returned to long-term run rates in 2H25, up approximately 4% year to date, with Revesby commissioning underway and Rocklea expansion expected in 2H26.

• Saverglass saw modest volume growth, but product mix shifted toward premium wine and champagne; order intake softened in March and April due to tariff uncertainty for European producers.

• Gawler's commercial wine volumes remain structurally challenged, with 2H25 volumes broadly in line with 2H24; G3 furnace now operational and G1 closure expected by July 2025.

• 2H25 EBIT is expected to be broadly in line with 2H24 on an underlying and continuing operations basis, before reallocation of OPS overheads.

• FY25 capex is forecast at $285–295m, D&A at $155–165m, and net finance costs at $65–70m; outlook subject to no material impact from ongoing US tariff risks.

Strategy update

• Orora has transformed into a focused value-add beverage packaging business, with leading positions in cans, premium spirits, and wine packaging.

• Strategic actions include the sale of OPS and acquisition of Saverglass, positioning Orora for premiumisation trends and organic growth post-destocking.

• Cans expansion projects are expected to generate over 15% return by year 3, with no further capacity investment needed until after 2030.

• Glass network optimisation is underway, including Ghlin modernisation and Le Havre F4 closure, aiming to reduce emissions, improve margins, and maintain growth capacity.

• Gawler is transitioning to a two-furnace operation, with higher utilisation and lower unit costs, and minimal capex required until 2034.

Capital allocation

• Orora maintains a balanced, returns-focused approach, with 32% of capital deployed to shareholder returns and 37% to acquisitions since FY15.

• Key financial priorities include strong cash realisation (>80%), a leverage target of 1.5–2.5x, and a 60–80% NPAT dividend payout ratio.

• Long-term base capex has been reduced to $70–95m p.a., with Saverglass investing $15–25m p.a. in decarbonisation; no new capacity investment required until after 2030.

• Strong balance sheet with net debt of $313m as of April 2025 and significant capacity for additional share buybacks beyond the current 10% program.

• Entering a stronger free cash flow period post-FY26 as growth capex projects complete, supporting ongoing shareholder distributions.