Orora Group (ORA) H2 2024 earnings summary

Executive summary

• Revenue rose 9.5% to $4,697.6m, driven by the Saverglass acquisition, which contributed seven months of earnings and supported solid EBIT and cash flow growth.

• Underlying EBIT increased 26.0% to $404.0m; underlying NPAT up 10.2% to $223.7m, with strong cost control and margin management.

• Leverage increased to 2.78x due to acquisition debt; final dividend of 5.0 cps declared, payout ratio 60.5%.

• Strategic review underway, with potential OPS divestment and a recent private equity bid declined.

• Focus remains on value-added beverage packaging, with sustainability initiatives and major capex projects advancing.

Financial highlights

• Revenue up 9.5% year-over-year; underlying EBIT up 26.0%; underlying NPAT up 10.2%.

• Underlying operating cash flow up 47.1% to $397.0m; cash conversion at 80.5%.

• Capex of $256m, supporting growth and sustainability; free cash flow to shareholders increased to $56.3m.

• Statutory results include $38.5m post-tax transaction costs for Saverglass acquisition.

• Net debt increased to $1,753.5m, leverage at 2.78x due to Saverglass acquisition.

Outlook and guidance

• FY25 EBIT for OPS expected in line with 2HFY24 exit run-rate; positioned for US economic recovery.

• Saverglass to deliver higher full-year EBIT with volume recovery expected from early CY25.

• FY25 capex guidance of $240m–$260m; net finance costs $130m–$135m; dividend payout target 60–80% of NPAT.

• First half of FY25 expected to be consistent with 2HFY24, with potential uplift in the second half as destocking ends.

• Net debt expected to hold steady in FY25, with deleveraging anticipated from FY26 as earnings recover post-G3 CapEx.