Amcor says it has set itself itself up for continued growth in all its businesses post its coming demerger, after reporting an 8.6 per cent growth in net profit, to $689.5 million, for the 2012-2013 financial year.
Announcing its yearly results today, Amcor's managing director and chief executive officer, Ken Mackenzie, said: “The key message is we are excited to post an excellent result for 2013 in terms of record earnings and growth and we see further earnings growth opportunities across all our businesses.”
He said the record profit was achieved despite a $14 million impact from the transition of overseas earnings to Australian currency values. Without this, he said, profit growth would have been 11.5 per cent.
Mackenzie said the solid performance boded well for continued growth for all the company's current business sectors following its demerger, expected to be complete by the end of the year, into Amcor Australasia and Packaging Distribution (AAPD), which will cover its local metal canning, glass bottling and fibreboard business, together with its Australasian and North American packaging distribution assets, and the remaining Amcor, which will largely concentrate on its global flexible and rigid plastics packaging operations.
He took advantage of the company's financial results announcement to re-iterate the reasons for the de-merger, a move he said would enable the company's business units to focus on their core strengths.
“To be a successful market leader, the company needs to be focused in terms of product portfolio and end-markets,” he said.
“If you look at Amcor today it actually comprises two very different businesses in terms of market segments and geographic markets.”
He forecast the AAPD would enjoy continued earnings growth by building on the foundation of more than $1 billion investment in new capabilities and facilities in the past four years, cost reductions across many areas, and the benefits of its new B9 paper making machine in Sydney coming on-line.
He said these measures were on track to deliver a further $81 million to AAPD's bottom line over the next three years.
Looking at the global business that will make up the bulk of the global company post-demerger, he forecast solid growth based on its strong emphasis on stable, defensive market segments. He said the defensive nature of such markets – food, beverages, healthcare and tobacco packaging – had enabled it to ride out tough global economic conditions.
“It is now four years since the global financial crisis (GFC), and our sales volumes have considerably demonstrated our resilience,” he said.
He said while growth in these sectors in the developed markets of North America and Europe would be constrained, it would be more than made up by strong growth in its businesses in emerging economies.
He said that while at present its business in emerging economies accounted for about 20 per cent of its overall business, post-demerger such markets would make up 30 per cent of its core Amcor sales.
Amcor says $1 billion of investment in its Australasian operations in the past four years, including its new B9 plant in Sydney (above), will put the local business on solid footing when it is demerged from its global parent later this year.
