Amcor's statutory profit for the year ended 30 June 2014 from continuing operations was $737.00 million, a surge in profit of 24.6% over the previous year's result - $589.20 million. Earnings per share (EPS) was boosted by 24.7% to 61.1 cents. On a constant currency basis EPS was up 9.2%. Annual dividend increased by 26.5% to 43.0 cents per share.
Returns, measured as profit before interest and tax to average funds employed were 19.4%. Operating cash flow after net capital expenditure was $890.60 million. And net cash from operating activities was $1,171.0 million.
Amcor’s managing director and chief executive officer, Ken MacKenzie commented, “The full year result represents another period of higher profits and returns. The key drivers of higher earnings were the benefits from recent acquisitions, ongoing growth in emerging markets and continued improvement in operating performance.”
It has been a year of new developments and adjustments at Amcor. “We recently announced a new breakthrough technology called LiquiForm[TM]which will transform the rigid plastic container industry, and is an outstanding example of how Amcor is translating its deep understanding of the needs of customers and consumers into new and improved ways of operating,” MacKenzie stated.
“Acquistions remain a key component of our growth strategy going forward and over the past year we announced Flexible Packaging acquisitions in China, Australia, Indonesia and India. These acquisitions enhance our ability to create value for our customers and improves our unique global footprint.”
“The Flexible Packaging segment had a solid performance with earnings up 7.1% in constant currency terms and record returns of 24.3%. The operating sales margin increased from 11.6% to 12.1% which is an outstanding achievement and reflects innovation driven product mix improvements and ongoing strong growth in emerging markets.
The Flexibles Asia Pacific business has 37 plants in seven countries throughout the region. Sales in Australian dollar terms, were up 12.5% and earnings significantly higher.
Australia's underlying volumes were lower, but earnings were significantly higher, due mainly to the synergy benefits from the Aperio acquisition. In April 2014 the A$50 million acquisition of the Detmold Flexibles business was completed. This, too, created synergy opportunities in Australia. The full benefits of the Aperio and Detmold acquisitions are expected to be realised over the next two years.
New Zealand had a challenging year due to a combination of a high New Zealand dollar adversely impacting customer export volumes, a lag in recovering raw material cost increases and manufacturing inefficiencies. Earnings were significantly lower than the prior period. A thorough performance review has been undertaken and a comprehensive improvement action plan is in the process of implementation. Although the performance of the business is expected to improve in 2015 it is not likely to return to prior earnings levels until 2016.
Business in China performed particularly well, growing in share with a number of large customers. In local currency terms earnings growth, excluding the impact of acquisitions, was more than 10%. The RMB350 million acquisition of the flexible packaging operations of Jiangsu Shenda Group was completed in October 2013. The acquired business has sales of approximately RMB440 million and makes Amcor the market leader in Eastern China.
Thailand had a difficult year, particularly in the first half, with the impact of ongoing political uncertainty weakening the domestic market considerably. Sales and earnings are now improving. Export sales, particularly to the Philippines, were solid except for a softer second quarter following typhoon Yolanda.
The operations in India, Singapore and Indonesia performed well, delivering strong earnings growth. Two significant acquisitions occurred during the year - a flexible packaging plant in Gujurat, India and another in Indonesia.
The Rigid Plastics group had a solid year with higher earnings and returns. The business benefited from continued growth in Latin America and strong improvement in the Diversified Products division from new higher value-add products.
“The outlook for the 2014/15 year is for higher earnings,” the statement concluded.
