Business News
Amcor announces results for year ended 30 June 2010
Thursday 26. August 2010 - Profit after tax and before significant items of $409.2 million up 13.5% The negative impact from translation of overseas earnings to Australian dollars on profit
Amcor today announced their Full Year Results for the year ended June 30, 2010.
Highlights
Profit after tax and before significant items of $409.2 million up 13.5%
The negative impact from translation of overseas earnings to Australian dollars on profit after tax and before significant items was approximately $58 million
Excellent cash flow performance with operating cash flow of $566.8 million
Significant items, primarily relating to the acquisition of the former Alcan Packaging businesses and planned restructuring, were an after tax expense of $226.2 million
Integration of the former Alcan Packaging businesses progressing well and on track to achieve synergy targets
Acquisition of Ball Plastics Packaging Americas business completed on 3 August, creating additional opportunity
In announcing the result, Amcors Managing Director and CEO, Mr Ken MacKenzie said: “The full year result was particularly pleasing given the ongoing difficult economic conditions.
“More than 80% of our sales are into the food, beverage, healthcare and tobacco packaging segments and the defensive nature of these segments was evident during the period.
“Amcor took the opportunity to purchase Alcan Packaging at the right time, acquiring the business at bottom of the cycle earnings and at a bottom of the cycle multiple.
“By conservatively funding the acquisition, our balance sheet has remained strong.
“A highlight for the year has been the exceptionally strong cash flow performance. The operating cash flow was $566.8 million which was an outstanding performance.
“In Flexibles, the businesses have performed well and the integration of the former Alcan Packaging businesses is proceeding as anticipated.
“I could not be more pleased with the way the two organisations have come together.
“Culturally, the fit between the two organisations has been better than anticipated. As a result, teamwork and co-operation across the new organisation has been excellent.
“The response from customers has been positive. We are working collaboratively with our major customers to demonstrate the benefits of our new value proposition.The outcome from these customer discussions will be a key input into our plant rationalisation strategy.
“We remain confident of achieving $200 to $250 million in synergies relating to overhead cost reductions, procurement cost savings and improved operational efficiencies.
“There is no doubt this acquisition is an exciting opportunity for Amcor and one we believe will create substantial shareholder value.
“The Rigid Plastics business achieved a solid result with an improved performance in Latin America offsetting lower volumes in North America.
“Volumes in North America have been seasonally stronger in the fourth quarter and into the start of the 2011 financial year due to the record warm temperatures across most of the mid west and Atlantic coast.
“Earlier this month we reached completion on the Ball Plastics Packaging acquisition.The purchase price of US$280 million represented four times the last 12 months acquired EBITDA. Significant synergy opportunities will underpin strong returns from the first full year of acquisition.
“This is a great example of how we can build critical mass in the high growth,high margin Diversified Products market.
“Second half earnings for the Australasia and Packaging Distribution business were 56% stronger than the second half last year.
“For the year, earnings in all of the business units were higher than the same period last year.
“The third glass furnace, which was a $150 million investment, began commissioning during the second half of the year. This is an exciting opportunity to enter the growing beer bottle market and creates further possibilities going forward.
Summary
“In summary, Amcor delivered solid earnings and an outstanding cash flow performance for the year.
“Integration of the recently acquired Alcan Packaging and Ball Plastics Packaging businesses is progressing well.
“The strong strategic fit of these acquired assets provides an excellent platform for us to grow shareholder value through the ability to enhance our value proposition to customers, improve our operational performance and realise synergies.
“As a result, we are well positioned for strong earnings growth in the 2011 financial year”.