Orora (ASX:ORA) reported a “robust” first-half FY26 result, pointing to volume growth in cans and Saverglass, EBITDA expansion across all operating segments and strong operating cash flow as the company continues reshaping its portfolio toward a focused beverage packaging business.
Managing Director and CEO Brian Lowe, alongside CFO Shaun Hughes, told investors the group’s performance reflected “discipline, execution, and controlling the controllables,” while also highlighting a strong balance sheet that supported an interim dividend and a new on-market share buyback program.
Group financial performance and shareholder returns
Operating cash flow from continuing operations was AUD 189.7 million, up 51%, with cash realization of 112%. Net debt was AUD 386 million at 31 December, with leverage at 0.9x net debt to EBITDA, supported by liquidity of more than AUD 1.2 billion.
The board declared an interim dividend of AUD 0.05 per share (unfranked), representing a 79% payout ratio, within the company’s target range of 60% to 80% of NPAT. Management also highlighted capital returns via buybacks:
- Completion of a 2025 calendar-year on-market buyback totaling AUD 227 million (110 million shares, about 8% of shares on issue)
- Announcement of a new on-market buyback of up to 10% of issued shares, or approximately AUD 270 million, expected to commence after customary waiting periods
Statutory NPAT for the half was AUD 58.9 million, reflecting after-tax significant items of AUD 18.9 million related to Saverglass restructuring costs.
Cans: double-digit volume growth and capacity investments nearing completion
Orora’s cans business delivered revenue of AUD 442 million, up 18.6% (or 15% excluding aluminum pass-through), supported by volume growth of 11.2%. Hughes said demand continued to be driven by an ongoing substrate shift and growth in new beverage categories, alongside new customer filling investments in Queensland.
Cans EBITDA increased 8.1% to AUD 60.7 million. Management noted the first half included an allocation of AUD 5 million of corporate overheads following the sale of OPS; adjusting for that allocation, EBITDA was up 17% and EBIT growth was stronger. Reported cans EBIT rose 4.4% to AUD 51.6 million, with higher interstate freight costs and increased depreciation and amortization tempering the result.
On capital spending, Orora said cans growth investments are nearing completion. The Rocklea (Queensland) expansion remained on schedule for completion by the end of FY26, with commissioning in the first half of FY27. The company said Rocklea will add a new 375ml can line and lift network capacity by about 13%. Lowe said approximately AUD 100 million had been spent to date, with about AUD 40 million remaining.
Management also flagged a one-off working capital build in the second half: approximately AUD 30 million of raw material and finished goods inventory to support increased demand, citing longer lead times for imported aluminum and increased complexity across different can configurations.
Global Glass: Saverglass order momentum and Gawler efficiency gains
In Global Glass, Orora described market conditions as challenging. Saverglass volumes increased 2.6% in the half, which management characterized as a solid outcome given broader market softness in wine and spirits. Lowe said average monthly orders in the first seven months of FY26 (to January) were up 18% versus the prior corresponding period, and customer-owned inventory continued to decline, which management took as a sign that destocking was behind the business.
Saverglass revenue was EUR 298 million, down 2.6%, while EBITDA rose 0.9% to EUR 69.1 million on cost discipline and mix. EBIT fell 9% to EUR 34.9 million, driven by higher depreciation and amortization, including cycling prior-period one-off benefits from a mold amortization policy realignment.
Executives said the Saverglass product mix in the first half was skewed toward spirits, and volumes were driven by categories including tequila and vodka. In Q&A, management said top customers—many of them spirits customers—grew slightly faster than the overall 2.6% volume increase, while wine was slightly down, influenced by reduced orders from a large U.S. distributor in the second quarter due to inventory levels.
Orora outlined six priorities for Saverglass under a new executive team, including accelerating new business, improving time-to-market for new product development, pricing transformation, inventory reduction, lowering SG&A (including establishing shared services), and operational efficiency through lean and Industry 4.0 initiatives. The company said a corporate restructure would incur EUR 7.8 million in after-tax costs and deliver EUR 6 million of annual EBIT savings from late FY26. Separately, the Le Havre F4 furnace closure was nearing completion, with final redundancies occurring in February; management said it expected an annualized run-rate benefit of EUR 9 million of EBIT from February 2026.
At Gawler (GALA), revenue was AUD 155 million (flat), while EBITDA rose 54% to nearly AUD 35 million and EBIT increased 94% to AUD 17 million. Management attributed the improvement to the prior-period impact of the G3 furnace rebuild and the move to a two-furnace operation. Lowe said the G3 furnace was outperforming expectations, delivering 31% energy efficiency improvements versus the prior furnace. However, the company noted ongoing softness in beer and wine volumes and a continued substrate shift for beer to cans.
FY26 outlook: largely unchanged, with cost and depreciation factors in focus
Management said the full-year FY26 outlook remained “largely unchanged.” For cans, Orora expects higher EBIT and volumes consistent with long-term growth rates, with EBITDA growth partially offset by the AUD 5 million corporate cost allocation in the first half and higher depreciation following recent project completions.
For Saverglass, Orora expects FY26 EBIT to be broadly in line with FY25 in euro terms, supported by volume growth and cost reductions, with stronger second-half EBITDA moderated by higher depreciation. For Gawler, management reiterated a target of AUD 30 million of EBIT in FY26, acknowledging first-half volumes were softer than internal expectations and emphasizing continued focus on volume and cost levers.
The company said group EBITDA and cash flow growth across all businesses would be partially offset by additional corporate costs previously allocated to OPS (AUD 7 million) and higher depreciation. Management noted the outlook remains subject to economic conditions, currency fluctuations and “no further changes in U.S. tariffs.”
About Orora (ASX:ORA)
Orora Limited designs, manufactures, and supplies packaging products and services to the grocery, fast moving consumer goods, and industrial markets in Australia, New Zealand, the United States, and internationally. The company operates through Orora Australasia and Orora North America segments. It also provides glass bottles, aluminum cans, tabs, and ends, closures and caps, boxes and cartons, point-of-purchase displays, packaging equipment, rigid and flexible packaging, and general packaging materials and supplies.
