Flexibles drive Amcor growth

Amcor’s Flexible Packaging business unit recorded a strong result in the company’s 2012/13 financial year, which ended June 30, and helped the overall profit grow 8.6 percent.

Amcor’s profit after tax and before significant items reached AUS$689.5 million (US$630.5 million) in the year to June 30, 2013, while revenue in the flexibles area grew from marginally over AUS$6 billion (US$5.5 billion) to AUS$6.4 billion (US$5.9 billion), or 5.4 percent. Conversely, revenue in Rigid Plastics fell from AUS$3.3 billion to AUS$3.1 billion. Sales revenue in the Australasia and Packaging Distribution business, which Amcor recently announced plans to demerge, stayed relatively stable at a growth of 2.5 percent.

The Flexible Packaging segment had an “excellent year”, according to Amcor’s financial statement for the year to June 30, and recorded strong results despite ongoing subdued economic conditions in developed markets. Amcor said the improvement reflects the “strong market positions the businesses have across the portfolio [and] benefits from acquisitions”, as well as the defensive nature of the food, beverage, healthcare and tobacco packaging end markets.

Flexibles Europe & Americas, Flexibles Asia Pacific and Tobacco Packaging fall under the Flexible Packaging segment in Amcor’s reporting structure.

Between them, recent acquisitions have included Aperio Group, Jiangsu Shenda Group, Uniglobe, Aluprint, IPC&L and AGI-Shorewood’s tobacco packaging interests.

The outlook for Flexible Packaging is for higher earnings in the 2013/14 year, with continued growth in emerging markets offsetting the subdued economic conditions in developed markets. Benefits will be felt from recent acquisitions and ongoing cost improvement programs.

Amcor’s managing director and chief executive officer Ken MacKenzie said: ‘The Flexible Packaging segment had a strong year with profit up 11.9 percent and record returns of 24 percent. The operating sales margin increased from 11.2 percent to 11.6 percent, which is an outstanding achievement and reflects the benefits from recent acquisitions and strong growth in emerging markets.’

Speaking in relation to the company’s overall performance and outlook, MacKenzie added: ‘This is an exciting time for Amcor. Each of the business segments is expecting to deliver increased earnings in the current year and the strong cash flow generation will ensure there is the opportunity to deliver further growth in shareholder value.’

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