Amcor announces profit result for year ended 30 June 2015
The Tobacco Packaging business had a solid year with earnings higher than the same period last year. The business has continued to benefit from prior period acquisitions and the ongoing customer trend towards higher value add packaging. As the only manufacturer with a global footprint the business is uniquely positioned to deliver innovations and manufacturing improvements to customers across the various regions.
In Western Europe market decline rates returned to long term trend through the year, following an 18 month period where decline rates were greater than the long term trend.. Earnings were negatively impacted by the Swiss Franc appreciation against the Euro in the second half of the year. The business also incurred restructuring costs of approximately €6 million related to the previously announced closure of a plant in Germany. In total, earnings in Western Europe were lower than last year. In Eastern Europe, tobacco industry volumes weakened, mainly due to the unfavourable impact of tax driven price increases in Russia. The business more than offset this impact through continued mix improvements, driven by a higher exposure towards premium brands and commercialisation of new innovations. In the Americas, the business continues to benefit from the integration of the Shorewood acquisition. Earnings were higher than the prior period driven by strong volume growth in Latin America and improved operating efficiencies throughout the region. In April 2015, the BRL 96 million (US$30 million) acquisition of Souza Cruz’s internal tobacco packaging operations in Brazil was announced. Souza Cruz is majority-owned by British American Tobacco plc. The Brazilian market represents 35% of Latin American cigarette consumption and Souza Cruz is the market leader. This investment is supported by a long-term supply agreement between Amcor and Souza Cruz and annual sales are expected to be approximately BRL 200 million (US$63 million). The transaction is expected to close in the December 2015 half year. In the high growth Asian region, the business had an excellent year with strong volume growth and improved operating performance.
The business was successful in securing new volumes for a multinational customer within the Philippines market. These volumes were progressively transferred across to Amcor during the second half of the year. Capital works on a new greenfield plant in Indonesia commenced during the year. The new plant will supply both existing and new customers and better position the business to be awarded additional new volumes. It is expected the plant will be operational in early calendar year 2016.
Source: News Release Amcor