Speaking at its 2013 AGM, Chris Roberts, chairman, Amcor, said the launch was an ‘exciting next step in the evolution of Amcor’ and one that all Board members believe will lead to higher shareholder value over time.
“I am pleased to unveil the identity of our new company,” he said.
Difficult to remain a leader
“What has been the Australasian and Packaging Distribution business segment within Amcor will now be known as Orora, and will be a separately listed company on the ASX.”
Explaining the demerger, Roberts said it was difficult to remain a leader across a range of businesses, where each has different end markets, products and manufacturing technologies.
“Although Amcor’s portfolio is far more focused than eight years ago, the company continues to operate two distinct and very different businesses,” he said.
“Amcor has a broad global footprint focused on flexibles and rigid plastics. On the other hand, Orora is a regionally focused business manufacturing fibre, metal and glass products as well as having a significant position in packaging distribution.
Roberts to become Orora chairman
“Given the fundamental differences in the two businesses, the Board strongly believes that shareholder value will be optimized if they are separated into two companies where each are focused on their own unique strategic priorities and agendas.”
If approved by shareholders, Orora and Amcor will each have its own management team and Board.
For Amcor, Graeme Liebelt will be the chairman and Ken MacKenzie will remain the managing director and CEO.
Roberts will become chairman of Orora and Nigel Garrard, the current president of Orora will be appointed CEO.
Garrard has been the managing director of Orora for the past four years and prior to that, he worked in the consumer goods market.
'Ups and downs'
“I have been Amcor’s chairman for the past 13 years. There have been ups and downs in this period, but the company today is one in which we can all take enormous pride – so I thank you and my Board colleagues for the honour of serving you,” he said.
The company financial results saw profit after tax and before significant items for 2013 increased by 8.6% to $689.5m and earnings per share increased by 9.4% to 57.2 cents per share.
“The key drivers of earnings growth were benefits from acquisitions, organic growth in emerging markets, improved product mix and operating cost improvements,” added Roberts.
Returns, measured as profit before interest and tax over average funds employed, increased from 15.9% to 16.4%.
Operating cash flow, after cash significant items and base capital expenditure, increased by $96m to $740m and higher earnings and strong cash generation enabled the company to increase the annual dividend by 8.1% to 40 cents per share.
“Given that economic conditions were generally subdued across a number of key markets, business performance for the year was particularly pleasing,” said Roberts.
“In emerging markets, which represents 28 countries for Amcor, there continued to be solid growth underpinned by rising household incomes and the ongoing development of more organized retail distribution.”
Operating cash flow for the group was $740m and over the past seven years, aggregate operating cash flow has exceeded $4bn.