Alcan and Ball acquisitions key to Amcor financial performance

- Majority of business in the defensive food, beverage, healthcare and tobacco packaging segments, which have proven to have stable demand in difficult economic conditions

 

- Future focus on improving customer value proposition, product innovation, growth in emerging markets and acquisitions

 

Global packaging manufacturer Amcor made a record profit in the financial year to June 30, 2012, benefiting from two ‘transformational acquisitions’.

 

Amcor said profit after tax and before significant items was AUS$634.9 million (US$667 million), up 11.3 percent year-on-year, with profit after tax and significant items at AUS$412.6 million (US$433.5 million), a 15.7 percent growth.

 

Significant items, primarily relating to acquisitions and restructuring activities, were an after tax expense of AUS$222.3 million compared with an after tax expense of AUS$213.6 million in 2011.

 

Operating cash flow as of June 30, 2012 was AUS$643.7 million, up 46 percent from the AUS$440 million at June 30, 2011.

 

The company also completed an AUS$150 million on-market share buy-back.

 

Amcor managing director and chief executive officer Ken MacKenzie said: ‘The full-year result represented a record underlying profit, record returns and a record dividend for the company.

 

‘To achieve an 11.3 percent increase in underlying earnings was an outstanding effort by our co-workers, given subdued economic conditions and a AUS$35 million adverse impact on reported earnings due to the appreciation of the Australian dollar.

 

‘Operating cash flow for the year was AUS$643.7 million. This was an outstanding result and underpins our ability to continue to grow shareholder value.

 

‘More than 85 percent of the business is in the defensive food, beverage, healthcare and tobacco packaging segments. A clear highlight of the year was that these markets have again proven to have very stable demand in difficult economic conditions.

 

‘This strong performance is particularly pleasing given that economic conditions are likely to remain subdued in the developed markets.’

 

MacKenzie added: ‘During the global financial crisis the business undertook two transformational acquisitions, purchasing Alcan Packaging and Ball Plastic Packaging.

 

‘The integration programs for both acquisitions are ahead of schedule in terms of timing and total synergy benefits. These improvements have been a key component of earnings growth for the year.’

 

‘Over the past seven years Amcor has been on a journey that has involved developing and embedding a proprietary operating model, “The Amcor Way”, and focusing the business portfolio on those areas where we have a long-term competitive advantage,’ he said.

 

‘Transformational acquisitions, undertaken during the global financial crisis, have significantly improved industry structures and positioned Amcor as the global leader in its chosen market segments.

 

‘The company also has approximately 20 percent of its sales in emerging markets with an extensive footprint of 65 plants in 24 countries. 

 

Stable markets

‘Amcor has over 85 percent of its sales in the defensive end market segments of food, beverage and healthcare packaging. Consumer demand in these segments was particularly stable during the global financial crisis in 2009 and this stability has continued over the ensuing three years.

 

‘Growth in emerging markets continues to be strong with sales increasing 10 percent.

 

‘In the current year it is expected that volumes will again be resilient and that the benefits from recent acquisitions, growth in emerging markets, cost reduction initiatives and continued strong cash focus will combine to deliver another year of higher earnings, expressed in constant currency terms.

 

‘Over the next few years the operating cash flow will continue to increase, creating opportunities to further enhance shareholder value. The focus will be on improving the customer value proposition, new product innovation, growth in emerging markets and acquisitions.

 

‘With market leadership in our chosen market segments and an extensive global manufacturing footprint, the company is well positioned to further improve our customer value proposition and deliver improved earnings and returns for shareholders.’

 

Read more on Amcor here

Read more news from Australia here