Orora
Annual
Report
Contents
1
2
4
6
Orora at a glance
FY22 financial overview and highlights
A message from the Chair
A message from the
Managing Director and CEO
8 We are One Orora
9 Orora Group strategy update
12 Orora’s sustainability approach
22 Group financial review summary
24 Operational review Australasia
26 Operational review North America
28 Corporate Governance Statement
38 Principal risks
40 Board of Directors
42 Executive Leadership team
44 Directors’ report
49 Remuneration report
66
67 Auditor’s independence declaration
68 Financial report
133 Directors’ declaration (Financial report)
134 Independent auditor’s report to the
Directors’ declaration (Directors’ report)
members of Orora Limited
139 Statement of shareholdings
141 Five-year historical financial information
142 Shareholder information
143 Financial calendar
144 Corporate directory
Investor Centre
To view this report online or to
download a copy, visit Orora’s website:
www.ororagroup.com
Orora AGM
Orora’s Annual General Meeting (AGM) will be
held on Thursday, 20 October 2022.
To access more information, visit
www.ororagroup.com/agm
Orora at a glance
We are manufacturers and distributors of sustainable and innovative packaging
and visual solutions to customers all over the world.
An ASX-listed public company headquartered in Melbourne, Australia with over A$4 billion
in sales in FY22, Orora’s purpose is to be a leading sustainable packaging solutions provider,
designing and delivering products and services that enable our customers’ brands to thrive.
Our values
Our portfolio
We operate a portfolio of three businesses
across two key geographic segments.
Beverage Australasia
Across Australia and New Zealand Orora
Beverage provides innovative, state-of-the-art
packaging design and manufacturing solutions
to customers in the beverage industry. Working
within three specialist business units in Glass,
Cans and Closures, we craft and produce
the glass bottles, aluminium cans, tabs and
ends, closures and caps that keep consumers’
favourite beverages safe for transportation
and consumption.
OPS North America
Orora Packaging Solutions (OPS) leads the
US market in custom packaging design and
solutions, and supply chain optimisation. From
corrugate manufacturing to equipment and
automation, we create sustainable packaging
solutions to serve a range of sectors including
food and beverage, industrial, warehouse and
shipping, healthcare and beauty, technology
and automotive, offering complementary
services in global product sourcing, testing,
printing and distribution.
Orora Visual North America
Orora Visual delivers cutting-edge visual and
product marketing solutions including Point-of-
Purchase (PoP) displays, promotional signage,
retail-ready and consumer packaging, and
labels and tags for packaging, horticulture
and retail customers across segments such
as food, beauty, home and apparel, hospitality
and entertainment. We provide design and
creative services, print, finishing, fulfilment and
distribution plus a range of value-add services.
4.8k
Team
members
41k
Shareholders
22
Manufacturing
plants
77
Distribution
sites
1
ORORA LIMITED ANNUAL REPORT 2022 FY22 financial overview
and highlights
Our financial year 2022 results reflect the benefits of Orora’s diversified
packaging assets, underpinned by strong pricing discipline and the continued
execution of our strategy. We delivered strong earnings growth against the
backdrop of a higher inflationary operating environment and supply chain
disruptions.
Financial overview[1]
• Strong increase in both Group
Earnings Before Interest and
Tax (EBIT) and Net Profit After
Tax (NPAT), up 14.6% and
19.4% respectively.
• Disciplined working capital
management, robust cash
generation and a strong
balance sheet supports further
investment and growth.
• Earnings Per Share (EPS)
of 21.7 cps, representing
growth of 28.2%.
• North American EBIT up
32.6% in local currency
terms, on the back of revenue
growth and continued margin
improvement.
• Robust earnings performance
in Australasia supported by
growth in the Beverage Cans
business.
• Final ordinary dividend of
8.5 cps (unfranked), taking the
full-year dividend to 16.5 cps,
representing 76.2% of Group
NPAT[2] — the top end of the
target payout range.
• $109.0 million of capital
returned to shareholders with
30.7 million shares acquired
via the on-market share
buyback announced in
October 2021.
NOTE REGARDING NON-IFRS FINANCIAL INFORMATION: Throughout this report, certain non-IFRS financial information has been included. This information is
presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. Orora use these measures
to assess the performance of the business and believe that the information is useful to investors. The following non-IFRS measures have not been audited but
have been extracted from Orora’s audited financial statements: Earnings Before Interest and Tax before significant items (EBIT); Earnings Before Interest, Tax,
Depreciation and Amortisation before significant items (EBITDA); and Return on Average Funds Employed (RoAFE). Performance measures such as Earnings Per
Share (EPS), RoAFE and EBIT margins have been calculated using the non-IFRS measures listed above. All other non-IFRS measures, unless otherwise stated,
have not been extracted from Orora’s audited financial statements. The financial periods presented in this report represent underlying earnings from continuing
operations of the Group excluding the impact of significant items.
2
ORORA LIMITED ANNUAL REPORT 2022 Group sales revenue
$4,090.8m
15.6%
Group EBIT
$285.5m
14.6%
Australasia (AUD million)
$909.1m
9.0%
North America (USD million)
$2,308.3m
14.3%
Australasia (AUD million)
$150.6m
0.2%
North America (USD million)
$97.9m
32.6%
RoAFE[2]
Net Profit After Tax
(NPAT) [2]
EPS
Underlying
operating cash flow
Dividend
per share
22.4% $187.1m 21.7cps $272.6m 16.5cps
250bps
19.4%
28.2%
10.8%
17.9%
[1] Except as expressly defined in this Annual Report, $ refers to Australian dollars.
[2] The financial periods presented above represent underlying earnings from continuing operations of the Group excluding the impact of significant items.
FY21 excludes a significant item expense of $38.6 million recognised with respect to the decommissioning of the former Petrie mill site. Further details
can be found in the 2021 Annual Report.
3
ORORA LIMITED ANNUAL REPORT 2022 A message
from the Chair
Results for the financial
year ended 30 June
2022 reflect disciplined
execution of strategy
and the Group’s robust and
defensive earnings profile.
This year we continued
to build on the positive
momentum of the last few
years. We made a number
of strategic investments
to further develop Orora’s
competitiveness and ensure
we are well positioned for
ongoing growth.
While COVID-19 continued to add
complexity and challenge to our operating
environment, we have maintained our
clear commitment to the safety of
our people and successfully managed
COVID-19 during FY22.
Additional safety measures were
introduced to protect our people,
mitigating the risk of transmission at our
sites and maintaining the high safety
and health standards set by Orora teams
throughout the pandemic.
Pleasingly, this enabled some site visits
to safely resume. In April, the Board
met in California, USA, spending time
with both our team members and our
Executive leaders. Members of the Safety,
Sustainability & Environment Committee
(SSEC) attended site tours to observe
safety and sustainability initiatives
in action at OPS and Orora Visual in
Fullerton, Orange County.
While this is certainly a step towards
‘COVID-normal’, there is still much work to
do with our customers and procurement
partners to ensure continuity of
operations and quality of supply as we
navigate the ongoing impacts on supply
chain and workforce availability.
Group financial performance
I am pleased to report that the financial
results for year ended 30 June 2022
continued to demonstrate Orora’s
diversified strength.
Group revenue increased by 15.6% on
the prior corresponding period (pcp) to
$4,090.8 million.
In North America revenue was up 14.3% on
the prior year in US dollar terms, reflecting
significant improvement in operating
performance with a year-on-year increase
achieved by both OPS and Orora Visual.
In Australasia we increased revenue by
9.0% driven by higher aluminium costs
passed through to customers, slight
growth in Cans and Glass volumes,
partially offset by Glass product sales mix.
Earnings Before Interest and Tax (EBIT)
increased to $285.5 million up 14.6% on
the prior year and 12.7% on a constant
currency basis.
Our ongoing focus on profit improvement,
driven by operating efficiency and cost
to serve initiatives saw margins increase
80bps to 5.2% at OPS in North America.
Despite changes in glass product mix to
lower margin categories and inflationary
pressures related to freight, energy and
material costs, robust earnings also
continued in Australasia, with EBIT in line
with the prior year, up $0.3 million.
Net Profit After Tax (NPAT) before
significant items was $187.1 million,
increasing 19.4% or 17.6% on a constant
currency basis from FY21. Statutory
NPAT was $184.7 million.
Robust cash generation continued in
FY22. Underlying operating cash flow
was $272.6 million, exceeding the prior
year by $26.6 million driven by earnings
growth and working capital management,
partially offset by higher base capex.
In FY22 cash conversion slightly
increased to 73.5% from 72.9% in FY21.
Earnings Per Share (EPS) was 21.7 cents,
representing outstanding growth of
28.2%, driven by an increase in NPAT
and the impact of our on-market share
buyback.
The Board has declared a final dividend
for the year of 8.5 cents, a 1.0 cent or
13.3% increase on the pcp. Total dividends
declared for FY22 of 16.5 cents, represent
a 2.5 cent or 17.9% increase on FY21 and a
payout ratio of 76.2%.
The FY22 dividend will be unfranked,
due to near-term capital investment
programs and the tax benefits associated
with Australia’s instant asset write-off
legislation for capital expenditure, plus
other timing differences.
4
ORORA LIMITED ANNUAL REPORT 2022 Creating value through
disciplined capital
management
At the end of FY22, Orora had committed
undrawn debt facilities of $372.4 million
with an average committed debt maturity
of 2.4 years.
Orora’s disciplined approach to capital
allocation remains focused on an
appropriate balance between capital
deployment and cash returns to
shareholders. This approach has driven
strong shareholder returns to date and
ensures the balance sheet retains the
flexibility to pursue organic and inorganic
investment opportunities.
Australasia is a more capital-intensive
segment due to the greater number of
manufacturing assets. The Beverage
business is currently undertaking
significant capex projects with delivery
ranging between FY23 and FY25.
Orora will continue to invest in
business improvement and growth
capex to support strong end-market
customer demand such as capacity
and line expansions in Cans. To drive
sustainability we are targeting increased
use of recycled content at our new
~$25.0 million cullet beneficiation
plant from FY23.
Total capex is up $30.1 million this year
to $87.2 million with growth capex up
$25.6 million to $50.8 million.
In October 2021 we announced an
on-market share buyback[1], purchasing
30.7 million shares and returning a
further $109.0 million to shareholders.
The buyback closed on 30 June 2022.
RoAFE was 22.4% up from 19.9% in the
pcp, reflecting higher North American
earnings, partially offset by higher
Australasian average working capital.
Leverage was 1.8 times EBITDA, up from
1.5 times at 30 June 2021, and remains
below the Board’s long-term targeted
level of 2.0 to 2.5 times. Leverage is
expected to increase in FY23 and FY24
due to the growth capex program with
earnings to flow in FY24.
Net debt increased from FY21 by
$176.1 million to $629.0 million,
due to the on-market share buyback,
higher capex spend and the FX increase
on US dollar denominated borrowing,
partially offset by higher earnings.
Working towards a low
carbon future
Orora are favourably positioned in
sustainability, having made significant
progress on our goals over the past few
years. In FY22 we outlined ‘Our Promise
to the Future’ and redefined the pillars
of our sustainability framework to
Circular Economy, Climate Change and
Community.
We continue to be a proven leader in the
Circular Economy, taking great strides
to increase recycled content in our
manufactured packaging and to ensure
it can be recycled. Putting Circular
Economy at the heart of what we do
lays strong foundations to improve
sustainability outcomes, minimising
waste and pollution to reduce our
greenhouse gas emissions.
As we elevated our sustainability focus,
we committed to achieving Net Zero
Scope 1 and 2 greenhouse gas emissions
by 2050, with an interim goal of 40%
reduction by 2035 (from a FY19 baseline).
As an energy-intensive manufacturer,
this is not an easy challenge. However,
transitioning to a low carbon future is
a strategic driver for Orora as a leading
global packaging and visual solutions
provider, and your Board is committed
to the investment and action required to
drive this outcome.
Board of Directors update
In April 2022 we welcomed Michael
Fraser to the Orora Board as a
Non-Executive Director. Michael’s
appointment follows a successful
30-year executive career at AGL
Energy, where he held various senior
management positions including leading
AGL as Managing Director and Chief
Executive Officer.
Michael’s wide-ranging skills as a
public company CEO, combined with
his experience in finance and consumer
marketing, complement the diverse skills
and experience of our Board.
His extensive knowledge of the energy
sector will also be valuable to support
Orora’s sustainability agenda.
Jeremy Sutcliffe will retire from his role
as Independent Non-Executive Director
and Deputy Chair of the Orora Board on
31 August 2022. I would like to personally
thank Jeremy for his significant
contribution to the business during this
time and for helping steer Orora through
demerger to be the successful company
it is today.
Outlook and
acknowledgements
Whilst difficult to predict in an uncertain
global economic environment, positive
operating and earnings momentum is
expected to continue in FY23 despite
ongoing headwinds and persistent
inflationary and energy cost pressures.
We will continue to lay the foundations
for sustainable growth, and capital
expenditure will remain elevated as we
invest in the capacity and capabilities
to support customer demand, combined
with a balanced focus on business
optimisation and growth.
My sincere thanks to the Orora Executive
and Leadership teams, and all Orora
team members across the globe for their
dedication and contributions that led to
this year’s strong result. I would also like
to thank our Orora shareholders for their
ongoing support.
ROB SINDEL
CHAIR
[1] An Appendix 3C was released on 21 October 2021. The buyback commenced on 5 November 2021.
5
ORORA LIMITED ANNUAL REPORT 2022 A message from the
Managing Director and CEO
Orora’s FY22 performance
was characterised by
strong revenue growth
in North America and
continued robust earnings
in Australasia.
I would like to thank and
recognise the entire Orora
team for their focused and
disciplined execution of our
strategy this year, which has
culminated in such a strong
result.
Across the Group we achieved strong
earnings growth in FY22, with a 14.6%
increase in EBIT and a 19.4% increase
in NPAT from the prior year, supported
by sound pricing discipline to mitigate
inflationary pressures.
EPS increased 28.2% and shareholders
will receive a full-year dividend of 16.5
cents, up 17.9% or 2.5 cents from FY21.
The continued positive sustainable
growth in earnings we have achieved,
despite rising costs and supply chain
challenges, again demonstrates the
benefits of Orora’s diversified portfolio
and the commitment within our
businesses to deliver for our customers.
Orora is building a growing defensive
earnings profile, underpinned by the
strong leadership positions we hold in
attractive markets, the diversified nature
of our operations and our broad customer
base. Resilient consumer staples and
industrial manufacturing categories
represent our largest end-markets
and continue to provide Orora some
safeguard from the economic volatility
and challenges brought about by the
pandemic.
6
Operating highlights —
North America
Operating highlights —
Australasia
Orora’s North American segment
achieved a year-on-year sales revenue
increase in FY22, with total revenue up
14.3% to US$2,308.3 million.
Local currency EBIT increased 32.6%
on the prior year to US$97.9 million
driven by strong earnings growth in both
manufacturing and distribution, reflecting
continued business optimisation and
active account profitability management.
North American EBIT margins expanded
50bps to 4.2%, with OPS margins
increasing by 80bps to 5.2%, a credit
to the team’s ongoing focus on sales
force alignment for profit improvement,
operating efficiencies and cost to serve
initiatives.
Inflation and wage cost increases
continued throughout the second half
with stringent cost and pricing discipline
in place to ensure impacts were passed
on to customers.
During the year we realised operational
and financial benefits in OPS from
the integration of Pollock and Bronco
operations into a single central
operating region.
We continued our work on business
model enhancements in OPS and Orora
Visual to improve digital platforms and
customer interaction, a focus that will
continue into FY23 as we also look to
refresh eCommerce platforms, extend
our product and service offering, further
broaden our customer base and expand
OPS custom packaging capabilities.
Revenue in our Australasian Beverage
business increased 9.0% in FY22,
attributable to higher aluminium costs
which we passed through to customers
and slight volume growth in Cans and
Glass, partially offset by changes to
product sales mix in our Glass business.
EBIT was in line with forecast and
FY21, up $0.3 million to $150.6 million.
Following significant Cans volume growth
in FY21, Cans volumes have remained
strong with a slight improvement in
both growth and product mix. This was
partially offset by changes in Glass
product sales mix as we successfully
redeployed capacity impacted by Chinese
wine tariffs to lower margin categories,
inflationary pressures and supply chain
impacts at key customer sites. EBIT
margin was down 140bps to 16.6%,
largely due to aluminium costs passed
through to customers.
Inflationary cost pressures experienced
in Australasia were well managed but
presented challenges to FY22 financial
performance due to timing of contracted
pass-through mechanisms.
We continue to invest actively to drive
growth, with capital committed to a
number of key projects that expand
capacity to support strong end-market
customer demand and sustainability
initiatives.
ORORA LIMITED ANNUAL REPORT 2022 Orora made $65.0 million in capex
investments in Australasia in FY22,
including $49.8 million of growth capex
for our new Cans line and ends capacity
expansions, and construction of the new
cullet beneficiation plant, now complete
with commissioning underway. We
also announced a new ~$85.0 million
multi-size cans line at Revesby in
New South Wales, with construction
to commence in FY23.
The coming year will see a continued
focus on executing these investment
initiatives, volume growth and product
mix optimisation, driving and enhancing
eCommerce capability and supply
chain excellence, and cost reduction
initiatives and active pass-through of
cost increases to subdue the impacts of
inflationary pressures.
Our progress in sustainability
This year we worked towards our
sustainability goals announced early
in FY22, under the redefined pillars of
Circular Economy, Climate Change and
Community.
We are committed to addressing
climate change and achieving Net Zero
greenhouse gas emissions by 2050
for Scope 1 and 2, and we are making
significant investments to support
this goal.
We are currently working towards a
reduction goal of 40% by 2035, with a
well defined plan of targeted activity.
Our plan includes increasing the
use of recycled glass cullet as we
commission our new ~$25.0 million cullet
beneficiation plant in early FY23 as a key
priority under our Circular Economy pillar.
The advanced plant will enable us to
significantly increase the recycled
content in our glass beverage packaging,
along with cullet we continue to source
from Container Deposit Schemes.
This motivation to increase our use of
recycled content extends across Orora
with some great outcomes achieved
in FY22 — an average of 57% recycled
content in aluminium Beverage Cans,
and 54% in the corrugated board
manufactured by OPS, with Orora Visual
making use of an innovative printable
fabric comprising 100% recycled
content.
Orora also plans to implement less
greenhouse gas intensive furnace
technologies, such as the Australian-first
introduction of oxyfuel technology in the
upgrade of our G3 furnace at Gawler in
South Australia, and we will continue to
procure greenhouse gas free electricity.
Our pathway beyond 2035 requires
advances in technology and will develop
over time.
We continue to prioritise action for our
people and our communities, focused
on protecting safety, health and human
rights, and championing diversity,
equity and inclusion. Simply put, we are
stronger together with our many views,
perspectives and experiences.
The safety and health of our people
remains of paramount importance.
Thankfully no serious injuries or fatalities
were recorded at Orora this year, however
there were some workplace injuries that
could have been avoided and we have
seen a slight increase in injury rates.
Our Global Integrated Safety
Improvement Plan (GISIP) is progressing
as intended, focused on managing
high risk activities and improving
effectiveness of critical controls. I’m
confident that this focus, coupled with
additional measures to improve our
response to COVID-19 and the ongoing
global adoption of our Stay Safe rules,
already being embraced by our teams, will
drive improvements over the coming year.
We are One Orora
While our Group and business strategies
remain consistent, aligning our focus and
outlining what we will deliver, the way we
express who we are, what we do and how
we do it, has evolved.
In June 2022 we shared One Orora across
our businesses. One Orora evolves and
resets how we define what it means
to be part of Orora today and captures
the essence of who we are — it signifies
the great diversity across our portfolio,
what we have in common that unites us
including our promise, our purpose and
identity, and the principles that guide us,
all underpinned by the Orora values.
Driving innovation
Innovation continues to be one of Orora’s
core principles and enables us to unlock
growth. The pandemic has provided
ample opportunity for unconventional
thinking, to reflect on the impetus for
innovation and the agility needed to grow
and stay competitive. It’s clear that
harnessing and empowering the talent,
ideas and ingenuity present within Orora
is more important than ever.
In FY22 we gave innovation a renewed
focus. In September 2021 we announced
the Think Orange Fund, which represents
a substantial investment to support ideas
that will make Orora a better business.
Teams or individuals can submit ideas
via a portal to be considered by the Think
Orange Review Group (TORG).
Looking ahead
Each Orora business has a clear set of
strategic priorities aligned to our group
strategy and collectively these position
Orora to deliver shareholders consistent
above-market, long-term growth.
We are well positioned to explore
strategic acquisitions in the near term
with a strong balance sheet and positive
operating and earnings momentum,
reflecting the resilience of the business in
what is expected to be a challenging year
of economic conditions.
I am incredibly proud of what the Orora
team has achieved this financial year
and I would like to thank the Board and
my Executive team for their support and
commitment. I also extend my thanks to
all Orora customers across the world for
their partnership and ongoing support.
BRIAN LOWE
MANAGING DIRECTOR AND CEO
7
ORORA LIMITED ANNUAL REPORT 2022 We are
One Orora
Orora has always been a
business defined by our team.
Back in 2014 we began shaping what
we believe, what we value and what we
deliver — but how we express the essence
of Orora, what we do and how we do it,
has evolved over time.
This year we reviewed the ways we’ve
defined Orora since inception — to
consolidate and take the best of who we
are and our past into the future.
One Orora is the outcome of this review.
It’s a culmination of the artefacts that
make up our DNA, originating from our
team, our culture and our strategy.
One Orora evolves
and resets our
shared definition
and understanding
of what it means
to be Orora today.
Through One Orora, we recognise what
unites us across our business portfolio
— our promise, our purpose and our drive
to deliver on our strategy — guided by
our principles and always underpinned
by our values. We also celebrate what
sets us apart and how we leverage these
differences as a source of strength — our
identity and the unique nature of each
of our businesses, the diversity of our
operations and our talented team.
One Orora embeds our ambition into our
purpose, reflecting our desire to lead, and
our resolve to do and be better.
To be a leading sustainable packaging solutions
provider, designing and delivering products and
services that enable our customers’ brands to thrive
We operate a portfolio of customer-focused
packaging businesses aligned by our common
purpose and unifying principles
Optimise
to grow
Enhance and
expand
Enter new
segments
Customer value-add
Digitally-enabled
Diverse talent
End-to-end capabilities
Innovation
Operating excellence
Staying safe
Sustainability
Every day, across our businesses, we deliver
sustainable and innovative packaging and visual
solutions that lead the industry and bring
our customers’ brands to life.
Together we deliver on the promise of what’s inside.
8
ORORA LIMITED ANNUAL REPORT 2022 Orora Group
strategy update
Orora’s steadfast pursuit of
our strategy has resulted in
substantive progress this year,
as we continue to strengthen
our platform for growth.
Orora’s strategic pillars
1. Optimise to grow
2. Enhance and expand
3. Enter new segments
In FY22 we saw a number of operational
efficiency programs undertaken over
the past two years generate positive
business momentum in North America,
while we continued our investment
in Australasia to improve capacity
and enhance the sustainability of our
operations in the Beverage business.
Established in FY20, the three core pillars
of Orora’s strategy are well embedded as
our basis for strategic planning, driving
focused business activity across our
portfolio and enabling us to capitalise on
growth opportunities as they emerge.
We maintain our disciplined focus
on creating value for customers and
shareholders and continue to leverage
our Group’s core capabilities, refining
and maximising the effectiveness of our
businesses. Investment is supplemented
by our ongoing focus on generating
further operational efficiencies and is
supported by increasing innovation.
The leadership positions held by Orora in
attractive markets, the diversified nature
of our operations and our broad customer
base, underpin our growing and defensive
earnings profile.
Strong cash flows are expected to
continue. They will be deployed via a
prudent combination of distributions to
shareholders (as dividends), strategic
investments and/or acquisitions to
enhance Orora’s offering and deliver
growth. Further ad hoc returns of capital,
such as the recent on-market buyback,
may be undertaken in the future as the
Board deems appropriate.
We continue to target end-market
segments with appealing growth and
financial return characteristics. Any
growth initiatives are assessed as
part of our rigorous approach to capital
allocation to ensure only value-add
investments that meet our stringent
return criteria are pursued.
Our strategic principles
Our three strategic pillars are supported
by our One Orora principles, which help
ensure our business decisions, strategic
initiatives and everyday actions are
purposeful and focused on making real
progress towards delivering our strategy.
As a fundamental tenet of how we
operate at Orora, financial discipline
has now been built into our principle of
operating excellence.
Principle in focus
Digitally-enabled
Digitally-enabled is one of our eight
Orora principles. We invest in digital
capabilities to unlock sustainable
advantage as a key enabler of our
growth strategy.
As the digital landscape becomes
more sophisticated, so does the way
consumers browse and transact,
and the way in which we fulfil those
transactions.
Orora’s customers and suppliers are
increasingly looking to interact with
us via digital platforms, and we are
working on making it easier and more
efficient for them to do business with
us, through continued investment and
focus on our digital capabilities.
FY22 has seen us progress our digital
transformation, launching a new
website and inaugural eCommerce site
for Orora Beverage, and a refreshed
website for Orora Visual. We also
renovated our corporate website to
enhance user experience, security and
performance. In OPS, we launched an
exciting digital customer experience
platform, and we continued to refine
Orora Visual’s print procurement and
campaign platform.
This pivotal work on our digital
channels and eCommerce platforms
will further streamline and simplify
processes, drive increased volumes
and support lower costs.
ECommerce will undoubtedly continue
to escalate as a global megatrend.
All Orora businesses will continue to
pursue a range of initiatives to take
advantage of these tailwinds as part
of our digital transformation journey.
This will differentiate Orora across our
markets, solidify our digital footprint
and deliver our customers from the
homepage to the shopfront.
9
ORORA LIMITED ANNUAL REPORT 2022 Orora Group
strategy update
Shareholder value blueprint
Our three strategic pillars are also
fundamental to Orora’s blueprint for
shareholder value creation, first
released in FY20.
Our target, to achieve top quartile Total
Shareholder Return (TSR) performance for
our shareholders, remains unchanged and
we continue to pursue it by executing on
our strategy.
Orora’s TSR performance is driven
by three key components, outlined in
the blueprint. These include applying
a returns-focused, risk-weighted
investment approach (for capital projects
and acquisitions) across each of our
strategic pillars.
The blueprint shows we will target a
return that represents an appropriate
premium to Orora’s weighted average
cost of capital (WACC) based on the
risk assessed as associated with the
investment. This forms part of our
balanced and disciplined approach to
capital allocation, enabling us to make
appropriate investment decisions
across each pillar.
To support strong end-market customer
demand, Orora will continue to invest
in base and growth capex to generate
sustainable dividends and ultimately
maximise shareholder returns.
Ongoing financial discipline underpins
the deployment of capital for any
strategic initiatives.
ORGANIC
GROWTH
INVESTMENT
CAPITAL
MANAGEMENT
Optimise to grow
Enhance
and expand
Enter new
segments
Disciplined approach
to capital allocation
Australasia
North
America
Capital
investment
Acquisitions
Sustainable
dividend
• Complementary
adjacencies —
near-term
focus in ANZ
• Payout ratio
of 60%—80%
• Franked to the
extent possible
• GDP sales
growth
• Enhanced
by innovation
and customer
wins
• GDP sales
growth
• Supplemented
by market
share gains
and increased
share of
wallet
• Enhance digital
capabilities,
particularly
in North
America
• Enhance
sustainability,
capacity and
product
capabilities
across portfolio
• Customer-
backed growth
projects
• Beverage
footprint
expansion in
ANZ and
offshore
• Expand
aluminium and
glass product
capability in
ANZ
• Expand product
and service
capabilities in
North America
RETURN TARGETS
Lower
Premium to WACC
Higher
Sensible
leverage
• Target leverage
at 2.0—2.5x
EBITDA
(excluding
AASB 16)
Potential
additional
capital
returns
• Assessed
when
appropriate
• On- or
off-market
buybacks
• Special
dividends/
capital returns
T
N
E
N
O
P
M
O
C
R
A
L
L
I
P
R
S
T
I
C
G
E
T
A
R
T
S
T
N
E
M
E
L
E
10
ORORA LIMITED ANNUAL REPORT 2022
Progress against strategic priorities
At Orora, each business has a clear set of strategic priorities aligned to our strategic pillars. Collectively these strengthen and
position Orora to deliver shareholders with consistent above-market, long-term growth. In FY22 solid progress was achieved across
a number of our priorities.
Optimise
to grow
Enhance
and expand
Enter new
segments
FY22
progress
AUSTRALASIA
— Beverage
• Increase utilisation/
shifts to enhance
production volumes
• Build capacity to
• Expand current
meet increased Cans
customer demand
substrates into new
categories
• Continue i4.0 and
• Grow share of wallet in
Integrated Work System
deployment
• Drive supply chain
excellence
• Pursue further
automation
• Drive increased
recycled content
current markets
• Continue developments
in light-weighting
• Drive further
development of digital
printing capabilities
• Enhance eCommerce
capability
• Explore potential
ANZ adjacencies
• Explore potential
offshore entry points
(Asia, North America)
• Construction commenced for
installation of new Beverage
Cans line at Dandenong,
Victoria and expansion of can
ends multi-size capacity at
Ballarat, Victoria
• Announced plans to construct
a new multi-size can line at
Revesby, New South Wales,
expected to come online
in FY25
• Construction of cullet
beneficiation plant at Gawler,
South Australia to help drive
increased recycled content
in glass bottles is now
complete with commissioning
underway
• New glass products launched
for the ANZ market (spirits,
olive oil)
• Will welcome a government
grant to progress Australian-
first upgrade of our G3
furnace to oxyfuel technology
at Gawler
• Continued assessment of
M&A opportunities in ANZ
adjacencies and offshore
expansion
NORTH AMERICA
— OPS
• Drive account
profitability
• Enhance sales force
effectiveness
• Integration of
previous M&A
• Digitisation of business
• Extend product and
• Continued material
model (including
refreshed eCommerce
platform)
• Expand custom
packaging capabilities
• Assess manufacturing
footprint expansion
opportunities
service offering
• Consider scale
expansion opportunities
(including M&A)
improvement in financial
performance and operating
discipline, with corresponding
lift in EBIT margin
• Significant development work
on ongoing business model
enhancement
NORTH AMERICA
— Orora Visual
• Refine core business
• Consolidate digital client
processes
platforms
• Harmonise estimation
procedures
• Enhance sales force
effectiveness
• Extend positions in
fabric printing and
horticulture
• Strategic review completed
during FY22
• Critical business model
enhancements introduced,
including improved digital and
customer interaction
11
ORORA LIMITED ANNUAL REPORT 2022
Our Promise
to the Future
At Orora we care about making
a difference. As a leading
packaging and visual solutions
provider, sustainability is
Our Promise to the Future.
Our sustainability approach
Since Orora’s inception, sustainability has
been integral to our journey. In FY21 we
conducted a comprehensive review of our
sustainability approach and objectives,
informed by an assessment of our risks
and opportunities. Using these insights,
we redefined the pillars that form our
sustainability program to Circular
Economy, Climate Change and Community
and set new goals in FY22.
Many of the activities that underpin
our pillars have been part of our way
of operating for many years, driven by
our obligations as a signatory to the
United Nations Global Compact (UNGC),
but our program now represents a
broader and more aspirational approach
to sustainability, more closely aligned
with the expectations of our people,
customers, investors, regulators and the
communities in which we operate.
Our diversified portfolio sees us
take a broad approach to managing
sustainability risk and maximising
opportunities. We work across a wide
range of focus areas, with some being
location or business specific.
Circular Economy
• Recycled content
• Recyclable packaging
• Recyclable substrates
• Certification
Climate Change
• GHG reduction
• Energy efficiency
• Renewable energy
• Climate risk analysis
Community
• Safety and health
• Diversity, equity & inclusion
• Human rights and supply
chain
• Responsible sourcing
12
ORORA LIMITED ANNUAL REPORT 2022 Our performance
highlights
Circular Economy
Climate Change
Community
Our Promise
60% recycled content*
for Orora glass beverage
containers by 2025.
Net Zero emissions by
2050. 40% reduction
in emissions by 2035.
Prioritising action for
our people and our
community.
This target exceeds the 2025
50% recycled content target for
glass packaging supported by the
Australian Packaging Covenant
organisation.
*pre and post-consumer
Our FY22 progress
We set our goal of achieving 60%
recycled glass content (cullet) by
2025, which exceeds the target for
glass packaging supported by the
Australian Packaging Covenant.
Achieved 38% recycled content
in Glass this year, an increase
on the 31% achieved in the prior
corresponding period.
Construction of our ~$25.0 million
Gawler cullet beneficiation plant
is complete with commissioning
underway. The plant will
significantly increase the recycled
content in our glass packaging,
avoid more cullet going to landfill,
reduce our need to use virgin
materials in production and reduce
our greenhouse has emissions.
Orora are committed to achieving Net
Zero greenhouse gas emissions by
2050 for Scope 1 and 2 and achieving
a 40% reduction in greenhouse gas
emissions by 2035 for Scope 1 and 2
from FY19.
Our pathway between 2035 and
2050 will be developed over time and
will require advances in technology.
We’re focused on initiatives
that benefit our teams and our
communities through:
• Protecting safety, health and
human rights
• Championing diversity, equity
and inclusion.
Announced a further significant
investment to be made in
Australasia with the support of a
$12.5 million government grant
to help rebuild our G3 furnace
using oxyfuel technology. The G3
furnace will move into the top
10% of energy efficient furnaces
worldwide and Orora will deliver a
step change reduction in fossil fuel
use, and reduce nitrogen oxide and
carbon dioxide emissions.
Total Scope 1 and 2 greenhouse
gas emissions decreased by 4.11%
(utilising market-based factors for
Scope 2) and by 8.33% (utilising
location-based factors for Scope 2)
from the FY19 baseline year*.
Ongoing implementation of
renewable energy initiatives as
part of procuring greenhouse
gas-free electricity for Orora
globally.
Procuring warehouse-based
Electric Vehicles as leases arise for
renewal in OPS.
*As per the Greenhouse Gas Protocol
Scope 2 guidance.
Launched Stay Safe rules globally
to help our team make better
decisions about working safely.
Conducted a global Assurance Audit
to establish a baseline for safety
systems and processes.
Continued progressing our Serious
Injuries or Fatalities (SIF) Prevention
program.
Implemented our safety incident
investigation training program to
set a new standard for incident
investigation.
The Diversity, Equity & Inclusion
(DE&I) Council in North America
received Orora’s highest recognition
Hero award for their initiatives
creating awareness around DE&I
described in this Annual Report.
Our Orora culture shaping
workshops were launched as we
aim to move our culture from ‘good’
to ‘great’.
Orora’s Women in Leadership
Program (WILO) continued in FY22,
now in its sixth year.
Unconscious Bias training was
conducted for all senior leaders in
North America.
Submitted our second Modern
Slavery Statement (FY21).
We’re a proven leader in the
circular economy
We’re committed to
addressing climate change
We’re working to enrich
our communities
13
ORORA LIMITED ANNUAL REPORT 2022
Circular
Economy
Our participation in
the circular economy
is about examining
and implementing
ways to maximise
the recycled content
of our products to
ensure they can be
continually recycled,
to minimise waste and
pollution and reduce
greenhouse gas
emissions.
Laying the foundations
for strong sustainability
outcomes
The circular economy seeks to maximise
the life of resources by recycling them. At
Orora we work towards our manufactured
packaging and visual solutions products
containing as much recycled content as
possible.
This means innovating to increase the
waste glass, known as cullet, used in our
bottles, emphasising recycled content in
our cans and finding new ways to ensure
our visual solutions are produced from
recycled materials.
This year we again increased our use
of recycled glass cullet derived from
state government Container Deposit
Schemes (CDS) in Australia. Since FY21
we’ve imported recycled glass cullet
from Western Australia’s CDS to use in
our furnaces and manufacture new glass
beverage containers. This initiative, along
with ongoing glass cullet use from other
State schemes, has further increased the
recycled content[1] of the glass containers
we produce to an average of 38% in FY22
contributing to our target of reaching
60% recycled content by 2025.
Orora will continue to use approximately
80% of the recycled glass cullet derived
from the South Australian CDS plus
the vast majority from the Western
Australian CDS. We continue to pursue
ways to maximise recycled glass cullet
use through interstate sourcing, working
with our customers and CDS partners.
Orora has made a significant
~$25.0 million investment in our new
cullet beneficiation plant at Gawler in
South Australia (supported by an
$8.0 million grant from the
Commonwealth and South Australian
governments through the Recycling
Modernisation Fund), which will be
a powerful contributor to increasing
recycled content in our glass packaging,
Recycled content (cullet %) progress
in manufactured glass products
Target: 60% recycled content
38%
31%
25%
FY20
FY21
FY22
by avoiding cullet going to landfill and
reducing the need for virgin material to be
used in production.
In Beverage Cans we worked to
emphasise the recycled content of
aluminium coils and flat sheets, achieving
an average of 57% recycled content, a
reduction on FY21 due to a constrained
international aluminium market. We also
achieved further light-weighting of can
bodies and ends, reducing waste and
greenhouse gas emissions.
In North America, Orora Visual continued
to increase utilisation of an eco-friendly
printable fabric comprising 100%
recycled content, converted from
recycled PET bottles, reducing waste to
landfill by taking used plastic out of our
ecosystem and minimising use of new
raw materials. The revolutionary process
grinds plastic into ultra-fine particles,
which are turned into polyester yarn and
woven into fabric rolls used to print a
range of visual marketing graphics, from
light-weight sheers to heavier Point-of-
Purchase (PoP) displays.
Our significant investment at Gawler
is matched by our drive to increase the
recycled content of the packaging we produce.
14
[1] Pre and post-consumer.
ORORA LIMITED ANNUAL REPORT 2022 Our Promise to the Future
Partnering with our customer AT&T, the
Orora Visual team also recently ran a
campaign that returns the fabric from
AT&T retail outlets to prevent it going
to landfill.
At OPS we averaged 54% recycled
content in the manufacture of our
corrugated board and continue to pursue
new opportunities to utilise and maximise
recycled content.
Building resource recovery
into design
We place a strong emphasis on ensuring
our manufactured packaging is
recyclable, pro-actively building resource
recovery into our packaging design.
Many of our products are made to be
infinitely recyclable, which means they
can be transformed and re-created,
time and time again. For example, the
aluminium we use to create cans is
infinitely recyclable and our scrap
aluminum is returned to manufacturers
for recycling — in fact, 75% of aluminum
produced globally is still in use today.
So, when you enjoy a drink from one of our
aluminium cans and put it in the recycling
bin, it can be back in your hands as a new
can in 180 days.
All our primary manufactured substrates
are recyclable, and we continue to work
on increasing the sustainability of our
packaging substrates with a focus on
fit-for-purpose applications and reducing
waste of end products.
In OPS we have developed a fully
recyclable curbside cooler box made from
corrugated fibre boxes with corn starch-
based insulation pads as an alternative
to cooler boxes made from expanded
polystyrene.
In November 2021 our teams celebrated
National Recycling Week in Australia
and America Recycles Day, affirming our
commitment to large-scale recycling and
the ways we can contribute to recycling
as individuals.
Glass beneficiation plant
to drive advances in
Circular Economy
Our advanced glass beneficiation plant being
built at Gawler, South Australia will be fully
commissioned in early FY23.
Representing a significant investment of
$25 million, supported by $8 million secured
as a grant from the Commonwealth and
South Australian governments through the
Recycling Modernisation Fund, the new plant
will significantly increase the recycled content
in Orora glass beverage packaging and progress
us towards our Circular Economy sustainability
goals.
This state-of-the-art facility will have the
annual capacity to process up to 150,000
tonnes of cullet.
Utilising more cullet will also assist Orora
to achieve our Climate Change goals, as we
leverage the benefits of energy and greenhouse
gas reductions.
15
ORORA LIMITED ANNUAL REPORT 2022 Climate
Change
We are addressing
the risk of climate
change by reducing
gross greenhouse gas
emissions across our
business and making
smart and renewable
choices on energy use
to minimise waste.
16
Addressing risks presented
by climate change
At Orora, we continually re-examine
the sustainability landscape to identify
current and emerging physical and
transition risks and opportunities.
This determines how we best approach
those material risks and opportunities as
part of our climate change strategy.
In FY22 we concluded the review and
implementation of findings from the
Financial Stability Board’s Task Force on
Climate-related Financial Disclosures
(TCFD) recommendations with the support
of independent external consultants.
The TCFD analysis, which explored the
impact of climate change on Orora under
different scenarios, did not identify any
material risks to Orora and confirmed that
our climate change strategy is currently
fit-for-purpose and supports Orora’s long-
term sustainable growth. Outcomes of
this analysis, including actions we have
taken to address or capitalise on identified
climate-related risks and opportunities,
will be made publicly available on Orora’s
website.
Our work towards gross/absolute
greenhouse gas emissions reduction over
the past seven years and our ongoing
efforts to develop our understanding of
the potential impacts of climate change
on our operations and investments,
reinforce our commitment to minimising
Orora’s impact on climate change and
recognising our obligations under
Principle 7 of the UNGC, which requires
businesses to support a precautionary
approach to environmental challenges.
It also reflects our ongoing commitment
to assessing and measuring our exposure
to material risks in accordance with the
ASX Corporate Governance Council’s
Recommendation 7.4[1] and other
regulatory expectations.
Making meaningful
investments to reduce our
environmental impact
Reducing greenhouse gas emissions
across our business has always been
core to our sustainability approach. We
are prioritising investment in technology
and process to reduce our gross/absolute
greenhouse gas emissions.
The refresh of our sustainability program
has elevated this focus as we work
towards achieving Net Zero Scope 1 and 2
emissions by 2050 and a 40% reduction
in these emissions by 2035, both from a
FY19 baseline. We will achieve this through
a combination of applying new technology,
utilising higher recycled content in our
manufactured products and deploying
renewable electricity sources.
When we innovate to increase and
maximise the recycled content in our
bottles and cans, contributing to the
circular economy, we not only create less
waste, but we also reduce greenhouse
gas emissions.
GHG reduction progress*:
Locaton-based factors
8.33%
GHG reduction progress*:
Market-based factors
4.11%
383
349
362
117
104
109
351
101
e
₂
O
C
s
e
n
n
o
t
K
266
245
253
249
FY19
FY20
FY21
FY22
Scope 1
Scope 2
Location
GHG Total
e
₂
O
C
s
e
n
n
o
t
K
445
411
427
427
180
166
174
178
266
245
253
249
FY19
FY20
FY21
FY22
Scope 1
Scope 2
Market
GHG Total
*from FY19 baseline to FY22
*from FY19 baseline to FY22
[1] Recommendation 7.4: A listed entity should disclose whether it has any material exposure to
economic, environmental, and social sustainability risks and, if it does, how it manages or intends
to manage those risks. Source: Corporate Governance Principles and Recommendations, Australian
Securities Exchange Corporate Governance Council (4th edition), 2019.
ORORA LIMITED ANNUAL REPORT 2022
Our Promise to the Future
Orora remains on track to achieve a
40% reduction in greenhouse gas
emissions for Scope 1 and 2 by 2035.
In May 2022 we committed to further
investment in the Beverage business to
progress an Australian-first upgrade of
our G3 furnace to oxyfuel technology at
our Gawler glass manufacturing plant in
South Australia.
To support Orora’s ~$40 million investment
in building our new oxygen plant, we
will welcome a Federal Government
grant of $12.5 million under the Modern
Manufacturing Initiative — Manufacturing
Translation Stream of the Recycling and
Clean Energy program to accelerate
development and commercialisation of
low emissions technologies.
The upgrade will move the G3 furnace into
the top 10% of energy efficient furnaces
worldwide and deliver a step-change
reduction in fossil fuel use plus reductions
in nitrogen oxide and carbon dioxide
emissions, providing our customers and
end-consumers with a sustainable option.
Since FY19 Orora has reduced emissions
by 8.33% (location-based factors Scope 1
and 2) and 4.11% (location-based factors
Scope 1 and market-based factors Scope 2),
as demonstrated in the graph[2].
During FY23 Orora will examine Scope
3 emissions and the potential to set
targets which aim to reduce them, in
collaboration with our customers and
supply chain partners.
Energy efficiency and smart
use of energy sources
contribute to decarbonisation
We are committed to driving energy
efficiency in our daily operations, working
closely with our teams to identify
opportunities to improve resource
efficiency.
In FY22 we focused on efficiency in gas
and electricity use to further reduce our
greenhouse gas emissions. In Beverage
Closures we continued to reduce gas
usage and installed new lighting and
air conditioning upgrades to drive
down electricity use, while we made
productivity improvements in Beverage
Cans to reduce energy consumption
and installed power and air meters to
measure usage.
We are also making smart use of
renewable energy sources by finding
alternate ways to purchase, produce and
use electricity.
Our long-term power purchase
agreements with renewable energy
providers continue to supply wind-
generated electricity to Beverage
operations on Australia’s east coast,
and secure renewable energy supply for
volumes equivalent to approximately
80% of our total electricity requirements
in Australia.
We have operational solar systems
installed at our sites in New Jersey, USA,
and Gawler, Dudley Park, Ballarat and
Rocklea in Australia and will investigate
further installations.
We continue to explore further
transitioning to lower emissions
furnace technology, working with global
technical partners and local industry
groups with common goals, including the
South Australian hub-to-hub Hydrogen
Technology Cluster, which is evaluating
development of a hydrogen industry
in Australia.
Eco Targets drive focused
improvements
In FY22 we worked towards achieving our
Eco Targets for the second year, which
focused on reducing CO2 emissions,
waste to landfill and water use over
a five-year period through to 30 June
2024. Since the FY20 base year we have
made strong progress towards our FY24
goals, except for the water Eco Target
for the distribution business. Initiatives
have already commenced to address
this concern, caused by increased water
consumption in North America.
Water use will be reduced further through
an innovative program sponsored by our
Think Orange Innovation Fund. The project
will migrate Orora Visual’s lithography
operations to a revolutionary water and
chemistry-free plate making process
delivering significant production and
sustainability benefits.
[2] As per the Greenhouse Gas Protocol Scope 2 guidance.
Performance against
Eco Targets
CO₂e Emissions
Target: 5% reduction in emissions
ratio intensity
CO₂e intensity: Production
0.425
322.2
FY20
0.400
336.4
FY21
0.398
328.3
FY22
CO₂e absolute (kt)
CO₂e intensity
CO₂e intensity: Distribution
0.0786
25.8
FY20
0.0778
25.5
FY21
0.0679
22.3
FY22
CO₂e absolute (kt)
CO₂e intensity
6.3%
13.6%
Waste to Landfill
Target: 5% reduction in waste to landfill
ratio intensity
Waste to landfill intensity: Production
11.9%
0.0039
2,987
FY20
0.0034
2,814
FY21
0.0035
2,842
FY22
Waste to landfill absolute (t)
Waste to landfill
intensity
Waste to landfill intensity: Distribution
5.0%
0.0326
9,188
FY20
0.0316
8,890
FY21
0.031
8,711
FY22
Waste to landfill absolute (t)
Waste to landfill
intensity
Water Use
Target: 5% reduction in water use
ratio intensity
Water intensity: Production
0.791
6.3%
0.744
564,329
FY20
0.729
609,127
FY21
648,134
FY22
Water absolute (kL)
Water intensity
Water intensity: Distribution
0.1%
7.746
1,640,248
FY20
7.729
1,631,535
FY21
7.740
1,633,880
FY22
Water absolute (kL)
Water intensity
Measured as ratios against metrics
that reflect the primary activities of
our businesses, Eco Targets are divided
into metrics for production of packaging
(measured against tonnes produced), and
distribution of packaging (measured against
floor space square metres).
17
ORORA LIMITED ANNUAL REPORT 2022 Community
We are enriching the
lives of our teams
and our communities
by protecting
safety, health and
human rights, and
championing diversity,
equity and inclusion.
18
The safety, health and wellbeing
of our people will always be of
paramount importance.
Our Safety & Health framework, which
aligns with applicable international
safety standards[1] provides a strong
foundation to ensure we operate safely
and to benchmark and improve our safety
performance.
Now in its third year, Orora’s Global
Integrated Safety Improvement Plan
(GISIP) is progressing as intended,
focused on managing high risk activities
and improving effectiveness of critical
controls, through several initiatives
undertaken in FY22.
In FY22 we completed an internal
assurance audit against our Safety &
Health framework, to educate teams,
establish a baseline for safety systems
and processes across Orora globally, and
identify and manage safety and health
risks and opportunities as part of an
ongoing assurance program.
We also continued to develop and
implement our high-risk safety
procedures including energy isolation/
LOTO, traffic management and incident
reporting and investigation. ICAM
incident investigation training was held
for our Safety & Health team to set a new
standard in incident investigation and
establish the root cause of incidents.
We proudly introduced the Orora Stay
Safe rules this year. Our Stay Safe rules
target 10 high-risk activities that have
the potential to cause the greatest harm
to our people. They are specific to the
risks we know are present in the work we
do and how we need to manage them.
The Stay Safe rules reinforce that we
empower our team members to STOP
WORK if they feel unsafe and to TAKE 5
before starting work to ensure pre-work
checks and safe practices are in place.
While we did not achieve our desired
improvement in the number of injuries at
Orora this year, we did achieve continuous
improvement in incident reporting
through increased rigour in governance
processes and driving greater awareness
of requirements.
Orora Group safety performance[2]
8.1
6.8
7.1
6.8
7.2
2.3
1.8
1.7
2.0
2.5
FY18
FY19
FY20
FY21
FY22
Lost Time Injury Frequency Rate (LTIFR)
Recordable Case Frequency Rate (RCFR)
On balance, our Lost Time Injury
Frequency Rate (LTIFR) and our
Recordable Case Frequency Rate (RCFR)
reflect a similar trend or a small increase
compared with FY21, and this was
somewhat more evident in North America.
Thankfully no Serious Injuries or Fatalities
(SIFs) were recorded. Some potential
SIFs were brought to our attention
and refinements to the SIF Prevention
program were progressed during the year.
In FY23 we will continue to evolve and
embed all elements of the GISIP into
Orora’s Safety & Health strategy. We are
focused on continuing to improve the
quality of reporting and investigation
through training, setting procedure and
minimum standard expectations, and risk
awareness. Our Stay Safe rules will be
implemented across all Orora operations
in FY23, through focused communication
and education sessions on the
requirements for each individual rule.
Throughout FY23 we will also further
progress our SIF prevention program
— with the global rollout of our hazard
identification and risk management
procedure and aligned risk assessment
process, and the development of Critical
Control checklists.
[1] ISO 45001:2018.
[2] Orora’s injury rates are measured using two key metrics, Recordable Case Frequency Rate (RCFR) and
the Lost Time Injury Frequency Rate (LTIFR). LTIFR is measured by dividing the total number of Lost
Time Injuries in a 12-month period by the total number of hours worked in the same 12-month period,
then multiplying by 1,000,000. RCFR is measured by dividing the total number of Recordable Case
Injuries (Lost Time Injury, Restricted Work Case & Medical Treatment Injury) in a 12-month period by
the total number of hours worked in the same 12-month period, then multiplying by 1,000,000.
ORORA LIMITED ANNUAL REPORT 2022 Our Promise to the Future
Continuing to mitigate the risk of COVID-19
In FY22 they included:
Operating during COVID-19 has continued
to add complexity and challenge to our
operating environment.
We introduced additional safety and
health measures to continually improve
our response, targeted at mitigating the
risk of transmission into and at Orora’s
sites. These measures included:
• Vaccination incentive programs
across North America and Australasia,
to encourage vaccination through
raffle prizes, meal vouchers and
charity donations, in compliance with
applicable laws.
• Innovative wearable devices to ensure
that people maintain a 1.5 metre social
distance while working onsite and give
Orora the ability to rapidly quarantine
people if there is a workplace
exposure.
• Rapid Antigen Testing for self-testing
on arrival at Orora’s Australasian sites.
• Risk-based assessment tools
developed to account for factors such
as vaccination rates, case numbers
and local regulations, to assess when
to ease or tighten COVID control
measures at Orora workplaces. The
tools play a key role in determining
when and how to allow team members
to return to Orora workplaces.
Caring for team wellbeing
Our FY22 health and wellbeing initiatives
demonstrate our ongoing commitment
to taking a holistic approach to individual
wellbeing — encompassing emotional,
physical, social and financial aspects.
• R U OK Day in September 2021 as a
reminder to regularly check in with
colleagues, friends and family. This
year our Australasian team focused on
asking ‘R U OK?’ as part of every day.
• Mental health awareness was
propelled forward by the DE&I Council
throughout North America and more
widely through the Mental Health
Community group on Orora’s internal
social network.
• Put Yourself First is an Orora
Beverage health and wellbeing
program developed by our people
and run by passionate volunteer site
ambassadors. Activities throughout
the year covered health, finance,
wellbeing, community and mental
health.
Our Orora culture program
Throughout FY22 all Orora senior leaders
attended Our Orora culture shaping
workshops, a global program supported
by specialised external consultants.
The effectiveness of these workshops
is assessed by culture impact surveys
before and two months after each
workshop to determine how our leaders
are embedding key learnings. A follow-up
check will be undertaken one year after
the workshops.
As we aim to move our culture from ‘good’
to ‘great’, our leaders will share workshop
learnings with their teams via culture
conversations in early FY23.
This program will foster culturally-aligned
leadership language, approaches and
ways of thinking as we work to create an
environment where our team members
can continue to thrive.
A global engagement survey will also be
undertaken in FY23.
Diversity as a powerful source
of competitive advantage
We are creating vibrant Orora workplaces
that reflect the richness of the
communities in which we operate.
We see diversity as a powerful source
of competitive advantage, driving
better decision making, innovation and
growth. With a strong focus on equity
and inclusion we’re creating workplaces
where team members from different
backgrounds, with different ways of
thinking and abilities, can bring their
best selves to work and collaborate with
respect and openness.
Throughout the year we continued our
focus on Diversity, Equity & Inclusion
(DE&I) activities in accordance with our
Diversity, Equity & Inclusion Policy and
measurable objectives approved by the
Board. In FY22 females represented
37% of all external new hires exceeding
our 30% target, with an increase of
5% on FY21.
Refer to our Corporate Governance
Statement for information on our
diversity measurable objectives and
gender statistics.
Stay Safe rules are
designed to help
our team make
better decisions
about working
safely.
19
ORORA LIMITED ANNUAL REPORT 2022 Community
Our culture at Orora is founded on being
courageous and innovative, on saying what
we mean and standing by our word. This starts
with our leaders.
Women in Leadership at Orora
Now in its sixth year and with 104
Women in Leadership at Orora (WILO)
graduates to date, our latest WILO
program sees a group of 25 talented
women from Australia, New Zealand,
the USA and Mexico participate in the
10-month program to elevate their skills
and expertise, expand their professional
networks, and build their careers as
Orora’s future leaders. This specialised
development program aims to cultivate
a diverse, global pipeline of leadership
talent for Orora by harnessing the
potential of our female leadership cohort,
as we continue to foster a culture that
enables women to thrive and succeed in
leadership positions. The people leaders
of WILO participants are supported by a
comprehensive coaching program.
Previous WILO graduates also act as
coaches for our participants, which
reinforces connections amongst our
WILO network.
Celebrating Pride, Orora Proud
Each year we celebrate Pride month and
the diversity of the LGBTIQ+ community.
In FY22 we explored key community
topics in a six-part Ask me Anything video
series to raise awareness and educate
our wider workforce. This Orora Proud
initiative was developed by our
DE&I Council in North America and is
shared amongst our global team.
Protecting human rights
and supply chain integrity
We are committed to protecting and
respecting human rights and oppose all
forms of slavery in both our operations
and the operations of our suppliers.
We understand our responsibilities to
provide transparency on any modern slavery
risks that exist in our operations and supply
chain, and how they are being addressed.
In FY22 we published our second Board-
approved Modern Slavery Statement,
which amongst other things described
the modern slavery risks associated with
our business activities, actions taken
to address those risks and priorities for
the coming year to ensure continuous
improvement. Our Modern Slavery
Statements are available on our website.
Supplier Conduct and Assurance
Orora continued to apply our Supplier
Code of Conduct and Ethics Policy,
which sets minimum standards for our
suppliers’ conduct and their supply chains
in line with our values, our commitment to
the Ten Principles of the UNGC and other
legislative requirements. Orora’s Supplier
Code of Conduct and Ethics Policy
complements Orora’s Code of Conduct
and Ethics Policy and is supported by our
Supplier Assurance Framework (SAF),
which was improved during the reporting
period. The SAF helps our procurement
team identify and mitigate potential
human rights and environmental issues
with suppliers.
A risk assessment tool is applied to
identify high risks, which in some cases
are further assessed through Sedex
(the Supplier Ethical Data Exchange) or
EcoVardis. Suppliers must successfully
mitigate any risks via an agreed plan and
if unsuccessful, may no longer be able to
partner with Orora.
Responsible fibre sourcing
We remain committed to the use of fibre
from traceable, transparent, socially and
environmentally responsible sources in
our North American businesses.
Forest Chain of Custody certification
ensures our raw materials and finished
fibre-based products meet this standard.
We hold Forest Stewardship Council®
(FSC) Chain of Custody certification
status across a number of our OPS
recycled corrugated sheet and carton
board manufacturing operations[1].
Our responsible fibre sourcing approach is
supported by a due diligence framework
giving preference to suppliers with
credible, independent chain of custody
certification based on international
standards and transparent and traceable
supply chains.
Two of our award-winning DE&I council members
from OPS North America, Marisa Brambila (left)
and Matthew Cheng (right).
Our Diversity, Equity & Inclusion Heroes
In December 2021 we announced the
winners of our annual Hero Awards,
our highest level of recognition which
celebrates individuals and teams that
have excelled across Orora.
The overall FY22 winner was our
DE&I Council, a group of volunteer team
members from across North America.
The DE&I Council has led the way to
increase participation, awareness and
education in important areas that align
with our Community pillar, culture and
values. In FY22 the DE&I Council focused
on initiatives including celebrating Pride,
creating a Council of 24 members who
consider themselves allies, increasing
Orora’s team mental health initiatives,
and building readiness for FY23 initiatives
including developing tools that continue
to support these initiatives ongoing.
In Australasia, the I Belong @Orora
Diversity and Inclusion program used
insights from team members to define
and deliver an action plan focused on the
priorities of an inclusive culture, diversity,
flexible working and inclusive leadership.
One component of I Belong is the
Call it Out program, designed to promote a
psychologically safe workplace free from
bullying, harassment, discrimination and
negative behaviours.
[1] FSC Chain of Custody Certification Standard Ref: FSC-STD-40-004V3c. FSC COC Certification of Multiple Sites Standard Ref: FSC-Std-40-003V2.1.
FSC Certification Code: VS013968/12.
20
ORORA LIMITED ANNUAL REPORT 2022 Our Promise to the Future
We believe good
governance and
transparency is
fundamental.
This belief and our
values underpin
Our Promise to
the Future.
Our sustainability governance
Our sustainability reporting
In FY22 we began our new chapter in
sustainability, underpinned by the same
sound governance and transparency of
reporting.
Orora’s sustainability approach continues
to be framed by our obligations as a
signatory to the UNGC, which ensures
compliance with applicable requirements
(including the ASX Corporate Governance
Council’s Recommendation 7.4[1]), and
considers emerging landscapes and
expectations where appropriate.
Our Board oversees and approves Orora’s
strategic direction and the effectiveness
of Orora’s corporate governance
policies. The Board retains ultimate
oversight of material environmental and
sustainability risks and opportunities
and operates through the Board Safety,
Sustainability & Environment Committee
(SSEC). Orora’s CEO and Executive
Leadership team, supported by working
groups, have ultimate responsibility for
sustainability at Orora. Regular updates
and recommendations are provided to
the Board on sustainability activities
across Orora.
We report on sustainability activity
annually through Communication on
Progress (CoP) to the UNGC, which
outlines the action we’ve taken to further
implement the Covenant’s Principles on
human rights, labour, environment and
anti-corruption.
We continue to support the CDP[2],
voluntarily disclosing information under
the Climate, Water and Forest Risk CDP
sections. As part of our commitment to
sustainable operations we achieved a
score of C for Climate, B- for Water and
B- for Forest Risk.
As a signatory to the Australian
Packaging Covenant (APC), we
provided a FY21 annual report and
were again assessed as being in the
‘Leader’ category[3]. We also received
a ‘Comprehensive’ rating from the
Australian Council of Superannuation
Investors following its review of
environmental, social and governance
reporting in the ASX 200 for the period to
31 March 2022[4].
[1] Recommendation 7.4: a listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks
and, if it does, how it manages or intends to manage those risks. Source: Corporate Governance Principles and Recommendations, Australian Securities
Exchange Corporate Governance Council (4th edition), 2019.
[2] CDP, formerly known as the Carbon Disclosure Project.
[3] APCO 2021 Annual Report and Action Plan for Orora Packaging Pty Ltd,
https://www.ororagroup.com/ckeditor_assets/attachments/533/2021_ActionPlan_OroraPackaging.pdf.
[4] ACSI ESG reporting trends in the ASX200: June 2022,
https://acsi.org.au/wp-content/uploads/2022/07/1ACSI-ESG-Reporting-Trends-in-the-ASX200-JUN22-.pdf.
21
ORORA LIMITED ANNUAL REPORT 2022 Group financial
review summary
Income statement[1]
AUD million
Sales revenue
Earnings before depreciation, amortisation, interest, related
income tax expense and significant items
Depreciation and amortisation
Earnings before interest, related income tax expense and
significant items
Significant items
Earnings before interest and related income tax expense
Net financing costs
Income tax expense
Profit for the financial period from continuing operations
Balance sheet[2]
AUD million
Cash
Other current assets
Property, plant and equipment
Right-of-use lease assets
Goodwill and intangible assets
Other non-current assets
Total assets
Borrowings
Lease liabilities
Payables and provisions
Total equity
Total liabilities and equity
Cash flow[3]
AUD million
Earnings before depreciation, amortisation, interest, related
income tax expense and significant items
Right-of-use asset lease payments
Non-cash items
Movement in total working capital
Net base capital expenditure
Underlying operating cash flow
Cash significant items
Operating free cash flow
2022
2021
4,090.8
3,538.0
403.4
369.3
(117.9)
285.5
(120.2)
249.1
-
285.5
(26.7)
(71.7)
187.1
2022
52.6
1,255.1
685.2
173.7
433.2
109.0
(38.6)
210.5
(32.8)
(48.0)
129.7
2021
50.6
930.2
627.5
200.5
411.2
104.6
2,708.8
2,324.6
681.6
224.5
1,071.0
731.7
2,708.8
503.5
252.8
799.7
768.6
2,324.6
2022
403.4
(59.1)
26.8
(62.6)
(35.9)
272.6
(27.0)
245.6
2021
369.3
(59.4)
27.7
(61.6)
(30.0)
246.0
(33.8)
212.2
[1] Represents continuing operations only, as reported in the segment note contained within the financial
statements (refer note 1) with the exception of net unallocated financing costs and income tax
expense, which is not included in the segment note.
IFRS compliant information extracted from the audited financial statements.
[2]
[3] Operating free cash flow includes principal lease and interest payments associated with
Right-of-Use (ROU) assets as reported per the segment note in the financial statements (refer note 1).
Revenue
Sales revenue was $4,090.8 million, up
15.6% on FY21 or 13.0% on a constant
currency basis.
In Australasia revenue increased 9.0% to
$909.1 million, driven by higher aluminium
costs which have been passed on to
customers, slight growth in Cans and Glass
volumes, partially offset by Glass product
sales mix.
In North America, revenue was up 17.7% to
$3,181.7 million (up 14.3% to US$2,308.3
million in local currency terms) with year-on-
year revenue growth for both OPS and Orora
Visual. The increase in revenue was primarily
attributable to price increases reflecting
disciplined management of inflationary
pressures.
Earnings before
interest and tax
Earnings Before Interest and Tax (EBIT) was
$285.5 million, up 14.6% on the prior year (up
12.7% on a constant currency basis).
Earnings in Australasia were robust, with EBIT
growth in line with prior year, up $0.3 million.
Following significant Cans volume growth in
FY21, can volumes were maintained in the
current year with a slight improvement in
both growth and product mix. This was offset
by a change in Glass product sales mix to
lower profit margin categories, inflationary
pressures relating to freight, energy and
materials, and supply chain disruptions at key
customer sites.
North America continued to deliver a strong
financial performance, with reported EBIT
increasing 36.6% on the prior year to
$134.9 million (up 32.6% on a constant
currency basis). This was a result of strong
revenue growth across both manufacturing
and distribution, with an ongoing focus on
business optimisation, account profitability
management and cost to serve, with OPS
margins improving by 80bps to 5.2%.
US dollar earnings were translated at
AUD/USD ~72.6 cents in FY22, compared
to ~74.7 cents in the prior year.
22
ORORA LIMITED ANNUAL REPORT 2022
Significant item expense
During the period Orora recorded a
significant item tax expense of $2.4 million
relating to finalisation of the tax position of
the Australasian Fibre business (‘Fibre’) and
the filing of associated tax returns with tax
authorities.
Balance sheet
Total assets increased by $384.2 million
or 16.5% in FY22.
Our centralised approach to cash
management ensured cash balances were
tightly managed with a 30 June cash
balance of $52.6 million.
Other current assets increased by
$324.9 million, with trade and other
receivables increasing $63.4 million and
inventory increasing $251.7 million,
inclusive of a foreign currency increase of
$50.7 million.
Trade and other receivables increased
reflecting sales revenue growth. Inventory
levels were also higher due to the
increased volume and value of raw
materials (aluminium) and the return to
normal stock levels for both the
Australasian and North American
businesses.
Net property, plant and equipment (PP&E)
increased by $57.7 million. This includes a
foreign currency translation impact
(increase) of $10.8 million. Capex spend for
FY22 was $87.2 million and included spend
on Beverage Cans expansion projects (new
cans line at Dandenong and ends capacity
at Ballarat, Victoria), construction of the
new Glass cullet beneficiation plant at
Gawler, South Australia and leasehold
improvements at OPS in North America.
Depreciation for the period was $64.4
million (excluding ROU assets). An increase
in intangible assets was largely driven by
foreign currency impacts ($29.2 million).
Investments of $5.5 million were made in
digital platforms and software upgrades,
and amortisation for the period was $8.9
million.
Net debt increased by $176.1 million during
the year, attributable to the $109.0 million
spent on the share buyback and capital
expenditure invested in the business of
$87.2 million. This was partially offset by
increased operating cash flow attributable
to earnings growth.
We remain well within all debt covenant
requirements.
The $271.3 million increase in payables
and provisions was driven primarily by an
increase in trade and other payables of
$280.4 million, including a $39.8 million
foreign currency impact. This was mainly
due to the increased volume and price of
aluminium for the Australasian business,
reflecting the cost of raw materials and
increased levels of inventory. Trade and
other payables were also higher for the
North American businesses reflecting
higher volumes and the value of inventory.
The net lease liability position remained
broadly in line with the prior year, declining
$1.5 million. ROU leases relate
predominantly to the North American
businesses, with very few leases in
Australasia.
Cash flow
Orora sustained robust cash generation in
FY22, with increased earnings converted
into cash. Operating cash flow of
$272.6 million was up by $26.6 million
or 10.8% on the prior year, whilst cash
conversion of 73.5% was marginally above
the prior year of 72.9%.
Base capex of $36.4 million was slightly
above the prior year. Growth capex of
$50.8 million was up $25.6 million as a
result of the investment in the new
Beverage Cans line and can ends capacity
as well as the Glass cullet beneficiation
plant.
FY22 income tax payments of $55.4 million
reflect a return to normal company tax
payments following Fibre Australasia
related impacts in FY21.
Working capital
During FY22 average total working capital
to sales increased to 6.6% (6.4% in FY21),
attributable to higher average working
capital balances driven by a replenishment
of inventories depleted in FY21 and the
increased price of aluminium.
The medium-term management target for
average total working capital to sales is
less than 10.0%.
Capital management
During FY22 Orora purchased 30.7 million
shares (representing 3.5% of issued
capital) as part of an on-market buyback,
which was announced in October 2021.
Shares were bought back for a total outlay
of $109.0 million and a volume weighted
average price of $3.55 per share.
When combined with the FY21 share
buyback, special dividend and capital
return, Orora have now returned $965.2
million to shareholders following the
disposal of Fibre, in addition to ordinary
dividends. Consistent with a focus on the
disciplined pursuit of growth and capacity
enhancement investment opportunities,
we continue to maintain a strong balance
sheet to support further investment and
growth.
Corporate
Corporate costs have been allocated
directly to the business segments.
In December 2021 Orora refinanced a
$35.0 million bilateral facility. The
refinanced facility will mature in April
2023. In June 2022 a $50.0 million
uncommitted bilateral facility was
amended to a $100.0 million committed
facility and extended to July 2027.
Commercial terms and composition of both
facilities were not materially changed.
Orora have substantial headroom under our
existing debt facilities, with committed
undrawn facilities of $372.4 million as at
30 June 2022 and no material maturities
until July 2023.
Petrie decommissioning
The decommissioning of the former Petrie
mill site is progressing but continues to be
a significant and complex exercise
involving multiple government agencies. A
further $26.5 million was spent on
decommissioning the site during the year
($28.4 million in the prior year). Impacts of
the unprecedented rainfall levels in
Queensland are being managed within the
existing provisions. Orora continues to
engage a specialist environmental
consulting firm to manage the completion
of the remaining remediation works. The
provision at 30 June 2022 represents
management's best estimate in respect of
the anticipated costs to complete the
remediation, using all currently available
information and considering applicable
legislative and environmental regulations.
ORORA LIMITED ANNUAL REPORT 2022
23
Operational review
Australasia
The Australasian[1]
Beverage business
delivered a robust
earnings performance
against the backdrop of
inflationary pressures
and supply chain
disruptions,
demonstrating the
diversified strength
and resilience as a
leading supplier of
Cans, Glass and Wine
Closures in Australia
and New Zealand.
Key points
• Sales revenue was up by 9.0% to $909.1 million in Australasia.
• EBIT of $150.6 million was broadly in line with the prior year — a solid
earnings performance during a period of inflationary cost pressures,
supply chain disruptions and changes in product sales mix.
• Australasia's earnings performance reflects slight volume gains in Cans
across most formats, with all sites operating 24/7 to meet demand,
partially offset by a change in Glass product sales mix to lower profit
margin categories, as the business cycled the impacts of lower wine
exports to China.
• EBIT margin declined to 16.6%, primarily reflecting the impact of higher
aluminium costs which are directly passed through to customers.
• Our Australasian operations are in a period of growth in capital
expenditure, reflecting a strong customer-led outlook for Cans volume
growth, underpinned by long-term customer contracts and a
commitment to sustainability.
• Return on Average Funds Employed (RoAFE) was down 80bps to 24.6%,
driven primarily by higher average working capital.
• Cash conversion increased slightly on the prior year to 72.9%.
Earnings[2]
AUD million
Sales revenue
EBIT[3]
EBIT margin %
RoAFE[4]
Segment cash flow
AUD million
EBITDA[5]
Lease repayments
Non-cash items
Cash EBITDA
Movement in total working capital
Base capex
Sale proceeds
Operating cash flow
Cash significant items
Operating free cash flow
Cash conversion
Change
9.0%
0.2%
Change
(1.1)%
(2.3%)
(1.3%)
FY22
909.1
150.6
16.6%
24.6%
FY22
195.6
(3.7)
21.9
213.8
(43.0)
(15.2)
0.4
156.0
(26.6)
129.4
72.9%
FY21
834.1
150.3
18.0%
25.4%
FY21
197.8
(6.0)
27.1
218.9
(41.7)
(18.9)
(0.3)
158.0
(28.5)
129.5
72.2%
[1] The financial information provided
represents Orora’s continuing Australasia
operating segment.
[2] As reported in the segment note
contained within the financial statements,
refer note 1.
[3] Earnings Before Interest, related income
Tax expense and significant items.
[4] Return on Average Funds Employed
(RoAFE) is calculated as EBIT divided
by average funds employed.
[5] Earnings before Depreciation,
Amortisation, Interest and related income
Tax expense and significant items.
24
ORORA LIMITED ANNUAL REPORT 2022
Performance highlights
Beverage Closures
Earnings performance was slightly below
the prior year, reflecting lower wine bottle
volumes as well as international supply and
shipping challenges for aluminium. The
shortfall in volumes was partially offset by
a favourable product mix with a shift to
premium closures. Second half earnings in
FY22 improved on the first half, attributable
to new customer wins.
Beverage Cans
Earnings were marginally above the prior
year, reflecting the impact of supply chain
challenges, COVID-related customer site
disruptions on production volumes and
capacity constraints.
Despite these challenges, can volumes
have remained strong in the current year,
following significant growth in FY21.
FY22 can volumes were slightly ahead of
the prior year, underpinned by ongoing
strong demand in craft and mainstream
beer and carbonated soft drinks. Both
segments benefited from a continuation of
the preference shift from glass and plastics
to can formats. Slim can and Sleek can
volumes also increased from the prior year,
reflecting improved activity in the off-
premises and convenience channels.
Inflationary pressures were well managed
during the year. Cost increases relating to
freight, energy and non-aluminium
materials were mostly offset by cost
recoveries and ongoing improvements
in operating efficiencies.
Revenue growth was driven by an increase
in the cost of aluminium, which was passed
through to customers. When adjusted for
the price increase of aluminium, revenue
growth was 1.5%, reflecting the existing
capacity constraints.
The capital investment in Cans capacity
and capability, supported by strong end-
market customer demand, will deliver
further earnings growth. A ~$110 million
investment in a new cans line in
Dandenong, Victoria, and expansion of can
ends capacity at Ballarat, Victoria, are
scheduled to be commissioned in FY23. A
further ~$85 million investment in a second
cans line at Revesby, New South Wales,
was also announced in the second half of
FY22 and is scheduled to be completed in
FY25.
Beverage Glass
Earnings were slightly below the prior year
as the business cycled the impact of lower
wine bottle volumes resulting from Chinese
tariffs on Australian wine exports. The
Beverage Glass business successfully
redeployed these lost volumes in the first
half of FY22 to new lower margin products
in the olive oil and spirit segments.
Second half revenue and earnings improved
year-on-year with growth in volumes driven
by the successful expansion into the new
segments as we diversified our glass
portfolio mix.
The increase in new product volumes also
helped curtail the impact of a packaging
mix shift in beer, higher supply chain costs
and commodity prices, combined with a lag
in passing cost increases through to
customers attributable to the timing of
contractual price adjustment mechanisms.
The Beverage Glass business completed
construction on the ~$25 million cullet
beneficiation plant in late FY22, which will
be fully commissioned in early FY23. This
advanced plant will enable Orora to
increase recycled glass content towards
our sustainability target of ~60%. Orora’s
commitment to sustainability was further
highlighted with the announcement to
upgrade the G3 furnace at our
manufacturing site in Gawler, South
Australia, to oxyfuel technology with the
construction of an oxygen plant at a gross
cost of ~$40 million. This investment is
scheduled to be complete in 2024 and
supports Orora’s goal of a 40% reduction in
Scope 1 and 2 greenhouse gas emissions
by 2035.
ORORA LIMITED ANNUAL REPORT 2022
25
Operational review
North America
Our businesses in
North America
delivered significant
earnings growth with
continued margin
improvement,
reflecting continued
business optimisation,
effective pricing pass-
through and disciplined
execution of strategy.
Key points
• Local currency sales revenue grew by 14.3% to US$2,308.3 million,
with year-on-year growth achieved by both OPS and Orora Visual.
• Significant increase in EBIT of 32.6% in local currency terms, with
earnings growth in both manufacturing and distribution driven by
improvements in customer account profitability, operating efficiency
and cost to serve.
• A relentless focus on managing inflationary inputs aided by embedded
pricing discipline.
• OPS EBIT margin improved by 80bps to 5.2%.
• Operating cash flow increased by 28.7% to US$84.6 million on the
back of further earnings growth, with cash conversion remaining strong
at 74.1%.
• RoAFE increased by 530bps to 20.3%, reflecting the higher earnings.
Earnings[1]
AUD million
Sales revenue
EBIT[2]
EBIT margin %
RoAFE[3]
USD million
Sales revenue
EBIT
Segment cash flow
USD million
EBITDA[4]
Lease repayments
Non-cash items
Cash EBITDA
Movement in total working capital
Base capex
Sale proceeds
Operating cash flow
Cash significant items
Operating free cash flow
Cash conversion
FY22
FY21
Change
3,181.7
2,703.9
134.9
4.2%
20.3%
98.8
3.7%
15.0%
17.7%
36.6%
FY22
FY21
Change
2,308.3
2,019.8
97.9
73.8
14.3%
32.6%
Change
17.7%
28.7%
28.7%
FY22
150.8
(40.2)
3.5
114.1
(14.2)
(15.4)
0.1
84.6
(0.3)
84.3
FY21
128.1
(39.9)
0.5
88.7
(14.9)
(9.7)
1.6
65.7
(4.0)
61.7
74.1%
74.1%
[1] As reported in the segment note
contained within the financial statements,
refer note 1.
[2] Earnings Before Interest, related income
Tax expense and significant items.
[3] Return on Average Funds Employed
(RoAFE) is calculated as EBIT divided
by average funds employed.
[4] Earnings before Depreciation,
Amortisation, Interest and related income
Tax expense and significant items.
26
ORORA LIMITED ANNUAL REPORT 2022
Performance highlights
Orora Visual
Orora Visual delivered another year of
revenue growth with an increase in sales
revenue driven by an improvement in retail
activity and stronger packaging sales.
Following a positive full year EBIT result in
FY21, Orora Visual’s contribution margin
remained broadly in line with the prior year.
Business integration actions, including
improvements to drive further earnings
growth, are in progress across the four
Orora Visual sites. These initiatives are
yielding improvements in operational
performance as operations are
streamlined.
Orora Packaging
Solutions
OPS delivered another significant earnings
performance in FY22. Revenue growth of
15.1% was primarily driven by price
increases.
This embedded pricing discipline, combined
with the customer account profitability
initiative, a focus on operating efficiency
improvements and cost to serve,
translated to a further 80bps increase in
OPS EBIT margin during the year. Since
FY20 OPS’ EBIT margin has improved
by 160bps to 5.2%.
The OPS customer account profitability
program, focused on margin recovery and
efficiency programs, has continued to
deliver earnings growth benefits and will
remain an integral part of the business’
ongoing initiatives.
The strong growth in earnings in both
manufacturing and distribution also
mitigated normal second half seasonality
softness. This reflected the additional
operation and final benefits from the
integration of Pollock and Bronco
operations into a singular OPS central
region.
We continue to benefit from OPS’ vertically
integrated corrugate manufacturing
capability and will continue to build on the
earnings momentum to drive further cost
efficiencies and margin expansion.
ORORA LIMITED ANNUAL REPORT 2022
27
Corporate Governance
Statement
The Board is committed to achieving and demonstrating
standards of corporate governance appropriate to the
operations and size of the Company, and continuing to refine
and improve Orora’s governance framework and practices
to ensure they meet the interests of shareholders and other
stakeholders.
The Board of Directors of Orora Limited and
its subsidiaries (Orora or the Company)
believe good corporate governance:
•
is an integral part of the culture and
business practices of the Company;
and
• will add to Orora’s performance to
create shareholder value, while having
regard to other stakeholders and an
appropriate risk and return framework.
The Board is committed to achieving and
demonstrating standards of corporate
governance appropriate to the operations
and size of the Company, and continuing to
refine and improve Orora’s governance
framework and practices to ensure they
meet the interests of shareholders,
regulators and other stakeholders.
The Board has adopted Charters and key
corporate governance documents which
articulate the policies and procedures
followed by Orora. These documents,
together with Orora’s 2022 Annual Report
referred to in this Corporate Governance
Statement, are available on Orora’s website
at www.ororagroup.com under the
‘Investors’ section.
This Corporate Governance Statement
summarises Orora’s main corporate
governance practices for the reporting
period, being the year that ended 30 June
2022, which comply with the Australian
Securities Exchange (ASX) Corporate
Governance Council’s Corporate
Governance Principles and
Recommendations 4th Edition
(ASX Principles).
This Statement is current as at 18 August
2022 and has been approved by the Board.
The Board of Directors
The Board
The Directors of the Company as at the
date of this Statement are set out below,
all of whom (except Orora’s Managing
Director and Chief Executive Officer (CEO),
Brian Lowe), are independent Non-
Executive Directors. Details of each
Director’s tenure, experience, expertise and
qualifications are set out in the Board of
Directors section of the 2022 Annual
Report and on Orora’s website.
• A R H (Rob) Sindel (Chair)
• B P (Brian) Lowe (CEO)
• A P (Abi) Cleland
• M A (Michael) Fraser
– appointed 1 April 2022
• T J (Tom) Gorman
• S L (Sam) Lewis
•
J L (Jeremy) Sutcliffe
The Board periodically reviews its
composition, and tenure and succession of
the Directors, upon input and
recommendation from the Nomination
Committee.
Role of the Board
The Board is responsible for the
governance of the Company and is
accountable to shareholders for guiding
and monitoring the effective management
and performance of the Company.
The Board Charter, available on Orora’s
website, sets out how the Board’s role,
powers and responsibilities are exercised,
having regard to principles of good
corporate governance, market practice and
applicable laws.
The Board operates in accordance with the
principles set out in its Board Charter, the
Company’s Constitution, relevant laws and
ASX listing rules.
Responsibilities of the Board
The Board’s responsibilities, as
summarised in the Board Charter, include:
• defining the Company’s purpose and
approving and monitoring
management’s development and
implementation of the Group’s strategy,
plans and core values of the Group
• setting the risk appetite within which
the Board expects management to
operate
reviewing, approving and monitoring
the Company’s risk policy and risk
management systems (for both
financial and non-financial risks),
including internal compliance and
control mechanisms
•
• overseeing the Company’s accounting
and corporate reporting systems and
disclosures
• approving the overall remuneration
policy and remuneration of Non-
Executive Directors, the CEO and senior
management, including any incentive
and/or equity plans
• overseeing, with recommendations
•
from the Human Resources Committee,
that the remuneration policy is aligned
with the Company’s purpose, values,
strategic objectives and risk appetite
receiving information regarding
material breaches of the Company’s
Code of Conduct and Ethics, Anti-
bribery and Anti-Corruption Policy and
reports of material incidents under the
Whistleblower Policy
• determining the size, composition and
structure of the Board, and the process
for evaluating its performance
• approving and removing the CEO and
Company Secretary, and approving and
reviewing succession plans for the
Non-Executive Directors, CEO and
senior management
• satisfying itself that the Board
reporting framework is appropriate and,
where required, providing constructive
feedback to challenge the CEO and
senior management
• ensuring provision of adequate,
accurate and timely information to the
market of all material information and
developments relating to the Company
• adopting appropriate procedures to
ensure compliance with all laws,
governmental regulations and
accounting standards
reviewing and, to the extent necessary,
amending the Board and Committee
Charters.
•
Board composition and succession
The Board is committed to ensuring that it
is comprised of individuals who collectively
have the appropriate skills and experience
to develop and support the Board’s
responsibilities and Company objectives.
The Board’s composition is determined
based on criteria set out in the Company’s
Constitution and the Board Charter,
including:
• a majority of Independent
Non-Executive Directors and a
Non-Executive Director as Chair
the Board having an appropriate mix of
skills, knowledge, experience,
independence and diversity necessary
to review and approve the strategic
directions of the Company, and to guide
and monitor management
re-election of Directors at least every
three years (except for the CEO).
•
•
28
ORORA LIMITED ANNUAL REPORT 2022
Board skills
and experience
Board skills matrix
The Board recognises the importance of
having Directors with a broad range of
skills, backgrounds, expertise, diversity
and experience in order to facilitate
constructive decision making and
facilitate good governance processes
and procedures.
Skill/Experience
Strategic thinking
The Company has established a Board
skills matrix relevant to the Company. A
summary of the main skills and experience
of the Board as applicable to its strategic
objectives is set out in the skills matrix
below. A regular assessment of the
optimum mix of these skills and experience
is computed and takes into account the
strategic positioning of the Company.
The skills attributed to each Director
recognise their experience acquired
through previous executive or non-
executive director roles. The Board has
unfettered access to the Company’s senior
management team and external
consultants for required expertise. The
Board considers that there are currently no
significant gaps in the skill set that it seeks
to have represented on the Board, and that
the skills and experience of the Directors
are relevant and appropriate to Orora.
Directors with Skill/Experience
Experience in developing and implementing enterprise-wide successful
strategies, and an effective capital management framework, including
appropriately questioning and challenging management on the delivery of
agreed strategic planning objectives.
Workplace safety and health
Senior executive or substantial board experience in key workplace safety and
health risk, including management, performance and governance of workplace
safety and health.
Financial acumen
Experience in financial accounting and reporting, corporate finance and/or
restructuring, corporate transactions, including ability to evaluate the
adequacies of financial and risk controls and understand key financial drivers
of the business.
Technology and innovation
Experience in oversight, adoption and implementation of technology and
innovation to support growth and drive competitive advantage, the ability to
understand key factors relevant to Orora including digital disruption,
opportunities and risks and cyber risk management.
People, culture and remuneration
Senior executive or substantial board experience leading people, oversight of
culture and organisational design, remuneration frameworks that attract and
retain a high calibre workforce and a culture that promotes diversity, equity
and inclusion.
Sustainability and environment
Senior executive or substantial board experience in management,
performance and governance of sustainability, environmental and social
responsibility initiatives, risks and opportunities including in relation to
sustainability and climate change.
Corporate Governance
Experience with a major organisation that is subject to rigorous governance
standards, a proven track record of leadership and governance skills and
demonstrated behaviours consistent with Orora’s values, and an awareness
of global practices and trends.
Relevant industry experience
Senior executive or substantial board experience in a number of relevant
industries, including packaging, manufacturing, FMCG, food and beverage,
recycling, industrials and logistics, product or customer strategy.
Risk management
Understanding of and senior executive or substantial board experience in
identifying and monitoring key existing and emerging risks to an organisation
and implementing appropriate risk management frameworks, procedures and
controls.
ORORA LIMITED ANNUAL REPORT 2022
7/7
7/7
7/7
6/7
6/7
7/7
7/7
6/7
7/7
29
Corporate Governance
Statement
Board experience
Relevant industry experience
86%
Relevant
industry
experience
14%
No relevant
industry
experience
Board gender diversity
29%
Female
71%
Male
Board age
43%
<55yo
57%
>55yo
Board tenure
57%
0–5
years
43%
5–10
years
The Company aims to have a diverse skill
set and an appropriate mix of gender,
thought, age and cultural background
represented on the Board. Further details
of the Company’s diversity objectives and
Diversity, Equity and Inclusion Policy are
set out in the Sustainability section of the
2022 Annual Report. The relevant industry
experience, gender diversity, age and
tenure of the Board are shown in the
charts on this page.
Directors’ independence
The Board has adopted specific principles
in relation to Non-Executive Directors’
independence as set out in the Board
Charter.
The Board Charter states that:
•
the Board shall consist of a majority of
Non-Executive Directors who are
considered by the Board to be
independent
•
• Directors must immediately disclose to
the Company Secretary and the Chair
any information, facts or
circumstances of which they become
aware, which may affect their
independence
in the absence of special
circumstances, the tenure for Non-
Executive Directors should be limited
to a maximum of 10 years, to ensure
Directors remain demonstrably
independent, with a view to best
represent the interests of
shareholders.
The Board undertakes an annual review of
the extent to which each Non-Executive
Director is independent, having regard to
the relationships affecting the independent
status of a Director as described in the ASX
Principles and any other matters the Board
considers relevant. Where the Board
determines a Director is no longer
independent, an announcement will be
made to the market.
As at the date of this statement, with the
exception of the CEO, the Board considers
that each Non-Executive Director is
independent.
Conflicts of interest
Directors must keep the Board advised, on
an ongoing basis, of any interest that could
potentially conflict with their duties to the
Company. The Board has developed
procedures to assist Directors to disclose
potential conflicts of interest and, each
year, all Non-Executive Directors complete
independence declarations. Where the
Board believes that a significant conflict
exists for a Director on a Board matter, the
Director concerned does not receive the
relevant Board papers and is not present at
the meeting whilst the item is considered.
The Chair
The Board Charter provides that the Chair
should be an Independent Director and
should not be the CEO. The Chair, Rob
Sindel, is considered by the Board to be
independent and his role is separate to
that of the CEO.
The Chair’s role and responsibilities are
outlined in the Board Charter and include:
•
leadership of the Board and assisting
the Board to work effectively and
discharge its responsibilities, and
encouraging and facilitating a culture of
openness and debate between
Directors to foster a high-performing
and collegiate team
• maintaining effective communication
and promoting constructive and
respectful relationships between the
Board and management
• chairing general meetings of the
Company
• setting the agenda for each Board
•
meeting in consultation with the CEO
and Company Secretary
representing the Board in
communications with shareholders and
other key stakeholders.
The Chair has acknowledged that the role
will require a significant time commitment
and has confirmed that other positions will
not hinder the effective performance of the
role of Chair.
30
ORORA LIMITED ANNUAL REPORT 2022
The Company Secretary
The Board has appointed Ann Stubbings
as Company Secretary. Details of the
Company Secretary’s skills, experience
and expertise are set out on Orora’s
website. The role of the Company
Secretary is set out in the Board Charter.
The Company Secretary is accountable to
the Board through the Chair, and the
appointment or removal of the Company
Secretary is a matter for the Board as a
whole. Each Director is entitled to access
the advice and services of the Company
Secretary.
Checks and information on Directors
Before appointing or proposing a person
for election as a Director, Orora conducts
all appropriate background checks,
including reference checks and criminal
and bankruptcy record checks.
Prior to a Non-Executive Director’s election
or re-election by shareholders, the Board
provides shareholders with all material
information known to Orora which is
relevant to the decision of shareholders to
elect or re-elect the Director, in order to
assist their decision-making process. This
information is contained in the notice of
meeting of the Annual General Meeting at
which the Director’s appointment will be
considered by shareholders.
A candidate for election or re-election as
a Non-Executive Director will be required
to provide the Board or Nomination
Committee with all material information
and an acknowledgement that he or she
will have sufficient time to fulfil his or her
responsibilities as a Director.
Agreements with Directors
Non-Executive Directors are appointed
pursuant to a formal letter and a deed of
appointment, which set out the key terms
relevant to the appointment, including the
term of appointment, the responsibilities
and expectations of Directors in relation to
attendance and preparation for all Board
meetings, appointments to other boards,
the procedures for dealing with conflicts of
interest, and the availability of independent
professional advice. Non-Executive
Directors are expected to spend a
reasonable amount of time each year
preparing for and attending Board and
Committee meetings and associated
activities. Other commitments of Non-
Executive Directors are considered by the
Nomination Committee prior to
appointment to the Board and are reviewed
each year as part of the annual Board
performance assessment.
Director induction and development
Orora has in place a formal process to
educate new Directors about the operation
of the Board and its Committees, the
Company’s purpose, values, strategy, any
financial, strategic, operational and risk
management issues, and the expectations
of performance of Directors. This induction
program includes providing new Directors
with access to previous Board and
Committee meeting minutes, Orora’s
policies and the strategic plan, and
facilitating meetings with senior
executives. This induction process was
recently undertaken for Michael Fraser.
Directors visit Orora sites on an ongoing
basis, as COVID-19 travel restrictions allow,
and meet with management to gain a
better understanding of business
operations. These visits are conducted
either as a full Board, or Board Committee,
or with one or two Directors. Directors are
also given access to continuing education
opportunities to update and enhance their
skills and knowledge.
Performance evaluation
The Board undertakes a performance
evaluation to review its performance and
that of its Committees at least annually.
The Chair reports to the Board regarding
the performance evaluation process and
the findings of these reviews.
The evaluation may involve surveys by the
Directors and the Board, the assistance of
external facilitators and consideration of
the degree to which each Non-Executive
Director has demonstrated the skills
relevant to the position of Non-Executive
Director or Chair, as applicable.
During the reporting period, the Company
undertook an internal evaluation of the
Board and Committee performance
(including the performance of the Chair and
Committee Chairs), having regard to the
ASX Principles.
This evaluation concluded that the
composition of the Company’s Non-
Executive Directors is appropriate having
regard to the skill set, expertise and
experience required for a company of
Orora’s size and geographic spread. The
evaluation further concluded that the
Company’s Committee structure is
effective and is well-led by appropriately
experienced and skilled Directors.
Independent professional advice
and access to information
Each Director has the right to access
all relevant Company information and
senior executives and, subject to prior
consultation with and approval from the
Chair, may seek independent professional
advice from an advisor suitably qualified in
the relevant field at the Company’s
expense.
A copy of advice received by the
Director will be made available for all
other Directors.
ORORA LIMITED ANNUAL REPORT 2022
31
Corporate Governance
Statement
Senior management
Delegations to management
Day-to-day management of Orora is
formally delegated to the CEO, supported
by senior management, in accordance with
the Board Charter and the Company’s
Delegated Authority Policy, a summary of
which is available on Orora’s website.
These delegations are reviewed on a
regular basis to ensure that the division of
functions remains appropriate to the needs
of the Company.
Senior executive appointments
and agreements
The Company conducts all appropriate
background checks on prospective senior
executives, including reference checks and
criminal and bankruptcy record checks.
The Company also has in place a written
agreement with the CEO and each senior
executive, setting out the terms and
conditions of their employment and the
obligations they are required to fulfil in their
role. Each candidate is required to accept
all terms and obligations as a condition of
their employment. The key terms of the
CEO’s and Chief Financial Officer’s (CFO)
employment contracts are set out in the
Remuneration Report in the 2022 Annual
Report.
Senior executive induction
and performance evaluation
The Company has an established process
for the induction of new senior executives,
which enables them to gain an
understanding of the Company’s purpose,
values, strategy, financial position,
operations and risk management policies.
The performance of senior executives is
reviewed on an ongoing basis, and a formal
performance evaluation takes place every
six months in accordance with the
Company’s established evaluation process.
Senior executives and the CEO are
assessed against measurable short and
long-term objectives which are aligned with
the Company’s business strategy and
operating plan, as well as how they have
demonstrated behaviours that are
consistent with Orora’s values. The CEO
performs the evaluations of the other
senior executives. An evaluation of senior
executives was last undertaken in
July/August 2022. The outcomes of these
assessments are then reported to the
Board.
The Board is responsible for approving
the objectives of the CEO and conducting
a formal annual evaluation of the
performance of the CEO, including an
assessment against these objectives and
the demonstration of behaviour consistent
with Orora’s values.
The outcomes of the performance
evaluations of the senior executives
and the CEO then contribute to the
determination of the senior executives’
and CEO’s remuneration.
The Company’s Senior Executive Reward
and Evaluation Policy is published on
Orora’s website.
Further information relating to the
performance evaluation of applicable
senior executives can also be found in
the Remuneration Report in the 2022
Annual Report.
Board Committees
To increase its effectiveness, the Board has
established the following standing Board
Committees:
• Audit, Risk & Compliance
• Executive
• Human Resources
• Nomination
• Safety, Sustainability & Environment.
The members of these Committees as at
the date of this Statement are set out in
the table below. Profiles of each
member/Director, including their relevant
experience and qualifications, are set out in
the Board of Directors section of the 2022
Annual Report and on the Company’s
website. The Company Secretary is the
Secretary of each Committee.
Each Committee has a Charter which
includes a more detailed description of its
role, responsibilities and specific
composition requirements. The Charters
are available on Orora’s website. The Board
may establish other Committees from time
to time to deal with matters of special
importance.
All Directors are welcome to attend
Committee meetings even though they
may not be a member.
The Committees have access to senior
executives and management, and
independent advisors. Committee agendas
and papers are available to all Directors
before the meetings. Copies of the minutes
of each Committee meeting are made
available to the full Board, and the Chair
of each Committee provides an update on
the outcomes at the Board meeting that
immediately follows the Committee
meeting.
Board
Audit, Risk &
Compliance Committee
Executive
Committee
Human Resources
Committee
Nomination
Committee*
Safety, Sustainability &
Environment Committee
Board Committees
Directors
Rob Sindel
Brian Lowe
Abi Cleland
Tom Gorman
Sam Lewis
Jeremy Sutcliffe
Michael Fraser
Chair
Member
* All Nomination Committee matters were dealt with by the full Board during the financial year.
32
ORORA LIMITED ANNUAL REPORT 2022
Audit, Risk & Compliance Committee
The Committee Charter provides that all
members of the Committee must be
Non-Executive Directors, the majority of
whom are independent, and the Chair
cannot be the Chair of the Board. At least
one member of the Committee must be a
qualified accountant or other finance
professional with relevant experience of
financial and accounting matters. Current
members including Chair of the Committee
are shown in this Statement and in the
Board of Directors section of the 2022
Annual Report. Michael Fraser was
appointed as a member of the Committee
on 1 April 2022.
The Committee assists the Board in
fulfilling its responsibility for oversight of
the quality and integrity of the accounting,
auditing and financial reporting of the
Company, the Company’s compliance with
legal and regulatory requirements and
operations, effectiveness of the enterprise
risk framework, including monitoring risk
parameters, of the Company, the
Company’s systems of internal control and
its risk management framework (for
financial and non-financial risks), including
elevated, new or emerging risks, and such
other duties as directed by the Board. The
Committee Charter provides that the
Committee has the authority and resources
necessary to discharge its duties and
responsibilities, including meeting with the
internal and/or external auditors without
management present.
The Committee approves the appointment,
or dismissal, of the head of the Company’s
internal audit function. The head of the
internal audit function provides regular
reports directly to the Committee.
The Committee is responsible for the
appointment, compensation, retention and
oversight of the external auditor, including
its independence, and review of any non-
audit services provided by the external
auditor. The Committee’s policy is to
review the performance of the external
auditor regularly regarding quality, costs
and independence. In discharging its role,
the Committee is empowered to
investigate any matter brought to its
attention.
The internal and external auditors, the CEO
and the CFO are invited to the Committee
meetings at the discretion of the
Committee Chair.
The Committee is required under its
Charter to meet at least quarterly and
otherwise as necessary.
ORORA LIMITED ANNUAL REPORT 2022
Executive Committee
The Executive Committee deals with
matters referred to it by the Board or with
urgent matters that may not be deferred
until the next meeting of the Board. A
majority of the Committee members must
be independent. Current members,
including Chair, of the Committee are
shown in this Statement and in the Board
of Directors section of the 2022 Annual
Report.
Human Resources Committee
The Human Resources Committee assists
the Board in fulfilling its responsibilities to
shareholders and regulators in relation to
the Company’s people and culture policies
and practices, including overseeing CEO
and senior executive remuneration and
performance.
All members of the Committee are required
to be Non-Executive and Independent
Directors. The Committee reviews the
remuneration of the CEO and other senior
executives, taking advice from external
advisors where appropriate. No individual is
directly involved in deciding their own
remuneration.
Current members of the Committee,
including the Chair, are shown in this
Statement and in the Board of Directors
section of the 2022 Annual Report. Michael
Fraser was appointed as a member of the
Committee on 1 April 2022. The CEO is not
a member of this Committee, but attends
meetings by invitation, other than for
matters relating to his own remuneration.
The Committee meets at least quarterly
and as otherwise required.
Nomination Committee
The Nomination Committee oversees the
nomination and succession planning
processes for Directors, and reviewing or
making recommendations to the Board on
matters which the Committee considers
necessary, or are requested by the Board.
When a vacancy in the position of Non-
Executive Director exists or there is a need
for particular skills, the Committee, in
consultation with the Board, determines
the selection criteria based on the skills
deemed necessary, having regard to the
skills and experience of the Board as
referred to in the Board skills matrix. The
Committee identifies potential candidates,
with advice from an external third party
where appropriate. The Board then
appoints the most suitable candidate.
Board appointees must stand for election
at the next Annual General Meeting of
shareholders following their appointment.
The Committee also makes
recommendations to the Board and
oversees implementation of the procedure
for evaluating the performance of the
Board, the Board Committees and each
Non-Executive Director, and also oversees
and makes recommendations to the Board
in respect of any ongoing training
requirements for Directors. The Committee
comprises three Independent Non-
Executive Directors, and the Chair of the
Board is the Chair of the Committee.
Current members of the Committee are
shown in this Statement and in the Board
of Directors section of the 2022 Annual
Report.
Committee members are not involved in
making recommendations to the Board in
respect of themselves. All Committee
matters were dealt with by the full Board
during the reporting period and
consequently there was no separate
meeting of the Committee.
Safety, Sustainability &
Environment Committee
The Safety, Sustainability and Environment
Committee provides advice and assistance
to the Board in reviewing and
recommending to the Board for approval,
appropriate Safety and Sustainability goals
and objectives, and monitoring the
decisions and actions of management. This
includes upholding the Company’s
commitment as a signatory to the United
Nations Global Compact (UNGC).
All members of the Committee are required
to be Non-Executive and Independent
Directors. Current members of the
Committee, including the Chair, are shown
in this Statement and in the Board of
Directors section of the 2022 Annual
Report.
The Committee meets at least quarterly
and as otherwise required.
Attendance at Board and Committee
meetings during the reporting period
Details of Director attendance at Board
and Committee meetings held during the
financial year are provided in the Directors’
report.
33
Corporate Governance
Statement
Sustainability
Orora’s sustainability approach is framed
by its obligations as a signatory to the
UNGC, matters of utmost importance to
key stakeholders and legal requirements.
The pillars that form Orora’s redefined
sustainability program are Circular
Economy, Climate Change and Community.
The Sustainability section of the 2022
Annual Report explains Orora’s
sustainability governance and reporting,
how business-wide processes support
Orora’s sustainability objectives, how the
most important sustainability issues are
managed, and the progress made during
FY22. The Principal Risks section of the
2022 Annual Report lists Orora’s current
strategic risks, including exposure to social
and environmental risks, and outlines
strategies to respond to identified
exposures.
Acting ethically and
responsibly
Code of Conduct and Ethics
Orora recognises the importance of
honesty, integrity and fairness in
conducting its business, and is committed
to increasing shareholder value in
conjunction with fulfilling its
responsibilities as a good corporate citizen.
All Directors, managers and team members
are expected to act lawfully and with the
utmost integrity and objectivity, striving at
all times to enhance the reputation and
performance of the Company.
Orora continually assesses and upgrades
its policies and procedures to ensure
compliance with corporate governance
requirements.
Code of Conduct and Ethics,
Anti-Bribery and Anti-Corruption
and Whistleblower policies and
procedures
Orora’s Code of Conduct and Ethics Policy
(Code) and values set the standards we
expect of our people. It represents Orora’s
commitment to act ethically, lawfully and
responsibly.
The Code emphasises a strong culture of
integrity and ethical conduct in association
with independent Anti-Bribery and Anti-
Corruption and Whistleblower policies.
Trading of securities during a blackout
period can only occur in exceptional
circumstances and with the approval of the
Company Secretary or, in some
circumstances, the Chair.
The Directors and executive team are
required to certify their compliance with
the policy at the end of each financial year.
The policy prohibits Directors, team
members and certain associates from
engaging in hedging arrangements over
unvested securities issued pursuant to any
employee option or share plans and certain
vested securities that are subject to the
Minimum Shareholding Policy. The Share
Trading Policy meets the requirements of
the ASX Listing Rules on trading policies
and is available on Orora’s website.
Other policies
The Company has a number of other
governance policies which outline
expected standards of behaviour of
Directors and team members which are
available on Orora’s website.
Human Rights due diligence
Orora is committed to our people, and the
protection of human rights. All forms of
slavery in our operations and the
operations of our suppliers are opposed.
Orora’s human rights commitments and
initiatives can be found in the
Sustainability section of the 2022 Annual
Report, in our FY21 Modern Slavery
Statement and on Orora’s website under
the ‘Sustainability’ section.
Compliance training
Orora has a compliance training program in
place which is completed by team
members. This program supports the
principles set out in the Code and other
applicable policies. Orora also has a
comprehensive competition/anti-trust
compliance training program.
There are also numerous activities and
compliance programs across the Company
designed to promote and encourage the
responsibility and accountability of
individuals for reporting inappropriate or
unethical practices.
The policies cover expectations on a broad
range of issues, including environmental
management, health and safety, human
rights, community engagement, political
donations and participation, use of
information and its security, market
disclosure, fraud, bribery, corruption and
the avoidance of conflicts of interest.
Team members and other third parties
(including suppliers) can report reasonably
suspected misconduct or an improper
state of affairs or circumstances within the
Company, including unethical/illegal
behaviour, coercion, harassment or
discrimination, fraud or corrupt practices,
or workplace safety or environmental
hazards through eligible recipients noted in
the Company’s Whistleblower Policy,
including anonymously through an
independent third-party integrity reporting
service. The Whistleblower Policy
emphasises that Orora will not tolerate
anyone being discouraged from speaking
up or being adversely affected because
they have reported misconduct in
accordance with the policy. These policies
are available on Orora’s website.
Material breaches of the Code and the Anti-
Bribery and Anti-Corruption Policy, and
reports of incidents under the
Whistleblower Policy, are reported to the
Board through the Audit, Risk &
Compliance, or the Human Resources
Committee, and the program is periodically
reviewed for its effectiveness and
promoted to team members across Orora.
The Company’s Supplier Code of Conduct
and Ethics Policy (Supplier Code) sets out
the expectations of Orora’s suppliers and
applies to all suppliers, including all
organisations and sub-contractors
providing goods and services to Orora,
globally. The Supplier Code is available on
Orora’s website.
Trading in Company securities
Orora has a Share Trading Policy that
outlines insider trading laws and prohibits
Directors, team members and certain
associates from trading in Orora’s
securities during specified ‘blackout
periods’.
The blackout periods are the period from
the close of trading on 31 December each
year until after the announcement to the
ASX of the Company’s half-year results, the
period from the close of trading on 30 June
each year until after the announcement of
the Company’s full-year results and any
other period that the Board specifies from
time to time.
34
ORORA LIMITED ANNUAL REPORT 2022
Diversity, equity
& inclusion
Orora’s major centres of operation,
in Australia, New Zealand and North
America, are in some of the most
demographically diverse countries.
Orora is committed to developing an
inclusive and respectful work
environment to optimise diversity
of thought and background. Bringing
together people with different
backgrounds and ways of thinking is
a powerful source of competitive
advantage in driving better decision
making, innovation and growth.
Orora’s Diversity, Equity and Inclusion
Policy, available on Orora’s website,
recognises the positive differences
each team member brings to the
business and how Orora team
members can connect and work
together to capture the benefits
of these differences.
Each year Orora reports Gender
Equality Indicators in accordance with
the Workplace Gender Equality Act
2012 (Cth). Our FY22 submission can
be viewed at the website of the
Workplace Gender Equality Agency.
During the reporting period, the
proportion of Orora’s workforce
currently represented by women in
leadership roles is set out in the
chart on this page.
Further information relating to Orora’s
Diversity, Equity and Inclusion focus
and initiatives is included in the
Sustainability section of the 2022
Annual Report.
Measurable objectives
and progress
Each year the Board approves
measurable objectives for diversity,
equity and inclusion and monitors
progress towards achieving them. The
measurable objectives for FY22 remain
unchanged from FY21. The FY22
progress towards achieving these
objectives is outlined on this page.
Orora will also progressively add more
diversity, equity and inclusion goals as
part of its redefined sustainability
program.
Female representation at each executive level
%
45
40
35
30
25
20
15
10
5
0
39
39
32
36
37
35
33
29
*
17
17
Board
CEO 1
CEO 2
CEO 3
Total
FY22
FY21
*In April 2022 the number of Directors increased from six to seven as a temporary measure to facilitate Board
transition.
FY22 measurable objectives approved by the Board
FY22 measurable objective
Progress (as at 30 June 2022)
Maintaining not less than 30%
of each gender in the
composition of Orora’s Board
Ensuring that Orora continues
to employ greater than 30%
female of all external new hires
29% female and 71% male Directors, which reflects the
temporary increased number of Directors from six to seven on
Michael Fraser’s appointment in April 2022. The retirement of
Jeremy Sutcliffe as a Non-Executive Director effective 31 August
2022 will once again result in female Directors representing
33% of the Board’s composition.
37% (234 new females have been recruited across all of Orora in
the past 12 months).
Ensuring that Orora identifies
and attracts female talent for
Board and senior management
vacancies
Orora continues to ensure that female talent candidates are
included in Board and senior management succession planning
and vacancies – progress is always within the context of hiring
the best talent available.
Supported by:
The development of women
into leadership roles, including
through the Women in
Leadership at Orora (WILO)
program
Orora continues to support development of women into
leadership roles and invest in female talent with the WILO
program running for the sixth consecutive year in 2022. Ongoing
talent reviews for the WILO graduates have been introduced to
support continuous development.
Using an objective process in
valuing roles and setting
comparative male and female
remuneration for salaried
positions
Promoting holistic working
practices, including, but not
limited to, continuing to offer
the employee assistance
program and supporting flexible
working arrangements, where
practicable
A role-based remuneration structure is being established to
reduce unconscious bias during remuneration decision making.
Gender pay equity reviews have been introduced at various
stages of the remuneration cycle, including during annual
remuneration review and incentive outcome assessments.
Orora continues to prioritise employee health and wellbeing.
An ongoing flexible working approach has been introduced at
Orora where team members are able to choose between a full
five days in the office or, alternately, adopt a hybrid working
model between the office and remote working subject to
business, team and individual needs.
ORORA LIMITED ANNUAL REPORT 2022
35
Corporate Governance
Statement
Remuneration
Details of Orora’s remuneration policies,
practices and performance reviews and
outcomes, and the remuneration paid to
Directors (Executive and Non-Executive)
and key management personnel are set out
in the Remuneration Report section of the
2022 Annual Report. Non-Executive
Directors receive no incentive payments
and there are no retirement benefit
schemes in place.
Shareholders will be invited to consider and
adopt the Remuneration Report at the
2022 Annual General Meeting.
Risk management
and assurance
The Company understands and recognises
that rigorous risk and opportunity
management is essential for corporate
stability and for sustaining its competitive
market position and long-term
performance.
Risk management
The Board is responsible for overseeing the
risk management framework, internal
controls and systems for monitoring legal
and ethical compliance. The Board sets the
risk appetite and considers Orora’s risk
profile on a regular basis to ensure it
supports the achievement of Orora’s
strategic and business goals.
The Principal Risks section of the 2022
Annual Report lists the current strategic
risks, including Orora’s exposure to social
and environmental risks, and outlines our
strategies to respond to identified
exposures.
Orora’s approach to managing the
sustainability aspects of strategic and
operational risks is set out in further detail
in the Sustainability section of the 2022
Annual Report.
The Company has implemented an
enterprise risk management (ERM)
framework that incorporates the principles
of effective risk management, as set out in
the Global Risk Management Standard
ISO 31000. ERM seeks to apply risk
management across the entire
organisation and it does this so that
all material risks (both financial and non-
financial) can be identified, assessed and
managed.
The Audit, Risk & Compliance Committee
reviews the Company’s risk management
framework on a regular basis to ensure that
it continues to be sound. The framework
was reviewed during the reporting period. It
remains fit for purpose and will be reviewed
on an ongoing basis for continuous
improvement opportunities.
Several layers assist the Board in ensuring
the appropriate focus is placed on the risk
management framework:
• Audit, Risk & Compliance Committee —
provides assistance and advice to the
Board in fulfilling its responsibility
relating to the Company’s financial
reporting, internal control structure,
risk management systems, including
the risk management framework, and
the internal and external audit
functions.
• Safety, Sustainability & Environment
Committee — provides assistance and
advice to the Board on the
management of the Company’s safety,
sustainability and environment goals,
objectives, legal responsibilities and
monitoring the decisions and actions of
management in upholding the
Company’s commitment as a signatory
to the UNGC and achieving the
Company’s goal to be a sustainable
organisation.
• Human Resources Committee —
provides assistance and advice to the
Board on the Company’s people, culture
and remuneration policies and
practices as well as the Company’s
involvement in the communities in
which it operates.
• Executive Team — senior executives
have responsibility for driving and
supporting risk management across
the Orora Group. Each business group
within the Company then has
responsibility for implementing this
approach and adapting it, as
appropriate, to its own circumstances.
Orora’s Continuous Disclosure Committee
has responsibility for assessing any
potential material risk to Orora and any
consequent need for market disclosure.
Assurance
The Board is responsible for oversight of
the effectiveness of the Company’s internal
control environment, with input and
recommendation from the Audit, Risk &
Compliance Committee.
The Board’s policies on internal control
governance are comprehensive, as noted
earlier in this Statement, and include
clearly drawn lines of accountability and
delegation of authority, as well as
adherence to the Code.
In order to effectively discharge these
responsibilities, the Company has a
number of assurance functions (including
internal and external audit) to
independently review the control
environment and provide regular reports to
the Board, the Audit, Risk & Compliance
Committee and management committees.
These reports and associated
recommendations are considered and
acted upon to maintain or strengthen the
control environment.
Financial reporting
The Audit, Risk & Compliance Committee
assists the Board in fulfilling its
responsibilities in overseeing Orora’s
processes which ensure the quality and
integrity of financial statements and
reporting, compliance with legal and
regulatory requirements, and reviewing
material changes in accounting or reporting
requirements and assessing subsequent
effects on Orora’s policies and practices.
Before approving the financial statements
for each half year and full year, the Board
receives a declaration from the CEO and
CFO stating that:
•
•
in their opinion, the Company’s
financial records have been properly
maintained and that they comply with
the relevant accounting standards and
give a true and fair view in all material
respects of the Company’s financial
position and performance; and
the opinion has been formed based on
a sound system of risk management
and internal control which is operating
effectively.
36
ORORA LIMITED ANNUAL REPORT 2022
periodic communications and a range of
forums and publications, available on the
Company’s website.
Other shareholder engagement activities
include:
• Encouraging shareholders to
participate in general meetings,
including the AGM, by attending
exercising voting rights and asking
questions of the Board. Orora conducts
all voting at general meetings by a poll,
ensuring that voting outcomes reflect
the proportionate holdings of all
shareholders who vote (whether in
person or by proxy or other
representative). The Company’s
external auditor will attend the AGM
and will be available to answer
questions from shareholders on the
conduct of the audit.
• Participating in Orora’s investor
relations program, which includes
investor roadshows and ad-hoc
investor meetings and conference calls
with institutional investors, private
investors and sell-side analysts.
• Engagement with proxy advisors,
investor representative organisations
and the Australian Shareholders
Association.
• Providing through the Company’s
website up-to-date information about
the Company and its operations, the
Corporate Governance Framework, the
Board and management, ASX
announcements, the share price,
dividend distributions and other
relevant information. Information about
Orora is also communicated through a
range of other channels, such as
Twitter and LinkedIn.
• Giving shareholders the option to
receive communications from, and
send communications to, Orora and its
share registry electronically.
Verification of corporate reports
The Company completes a documented
internal verification process of corporate
reports that the Company releases to the
market, including those that are not
audited or reviewed by the external auditor.
The Company’s annual and half-year
financial statements are underpinned by a
Group-wide certification process where
each executive and chief financial officer
for each business responds to set
questionnaires and signs a certification.
This process provides verification and
approval for the CEO and CFO to then
provide a signed representation letter to
the external auditor and a signed
declaration to the Board that supports that
the accounts provide a true and fair view,
that there is integrity in the statements,
and that the financial statements comply
with the Corporations Act 2001 and
relevant accounting standards. The CEO
and CFO are both present for Board
discussions relating to financial
statements, and the Audit, Risk &
Compliance Committee has private
sessions with the external auditor to
discuss any issues or concerns without
management before recommending the
Board approves the release of financial
statements to the market. The certification
process is reviewed annually having regard
to any changes in the Corporations Act
2001, accounting standards or governance.
For other types of periodic corporate
reports (including the annual Directors’
Report, annual Modern Slavery Statement
and this Statement), the Company
conducts an internal review and
verification process to ensure that such
reports are materially accurate, balanced
and provide investors with appropriate
information before approval by the Board
and release to the market. External advice
is obtained as required.
Engagement with
shareholders and
other stakeholders
Orora has a number of stakeholders
including shareholders, employees,
customers, suppliers and local
communities. The Board identifies and
prioritises Orora’s key stakeholders,
develops a strategy for engagement with
stakeholders and supports management to
engage with key stakeholders to
understand, consider and respond to
issues.
Orora is committed to keeping the market
informed in a timely manner and complying
with its continuous disclosure obligations.
Continuous disclosure and
communications
Orora’s Market Disclosure and
Communications Policy is available on
Orora’s website and details the Company’s
procedures to ensure compliance with
applicable legal and regulatory
requirements under the Corporations Act
and the ASX Listing Rules. The Policy is
approved by the Board and is reviewed
regularly to ensure compliance with the
ASX Listing Rules and guidance on
continuous disclosure. It applies to all
Directors and Orora team members. Its
purpose is to ensure:
• Compliance with legal obligations to
identify and keep the market fully
informed of material information.
• That access to this material
information is protected and controlled
until such material information is
announced to the market.
• Orora meets its disclosure obligations.
• That investors are provided with equal
and timely access to material
information.
Orora’s Continuous Disclosure Committee
meets as required, and often on very short
notice, to ensure compliance with
disclosure requirements. The CEO approves
all disclosures before they are released.
The Board approves all disclosures that
are significant and Directors receive a copy
of all ASX disclosures promptly following
release. The Company Secretary is
responsible for communications with
the ASX.
Shareholder engagement
Orora is committed to providing
shareholders and other financial market
participants with consistent and
transparent corporate reporting, as well as
timely and accurate disclosures.
Shareholders and other stakeholders are
informed of all material matters affecting
the Company through ASX announcements,
ORORA LIMITED ANNUAL REPORT 2022
37
Principal
risks
Orora actively manages a range of principal risks and uncertainties with the potential to have a material impact on the Orora Group and
its ability to achieve its strategic and business objectives. While every effort is made to identify and manage material risks, additional
risks not currently known or detailed below may also adversely affect future performance. Orora’s principal risks are outlined below in no
particular order.
Area of Materiality
Risk
Mitigation and Monitoring Strategies
Workplace safety
and health
Workplace safety and health events may have the
potential to adversely affect Orora’s team members and
operations.
Business interruption
and disruption
(including cyber risk)
Orora operates numerous sites across a number of
countries. Circumstances such as natural disaster,
pandemic, cyber breaches, operational failure or
industrial disruption may occur, which may preclude key
sites from operating. In these circumstances,
operational and financial performance may be
negatively impacted.
Economic conditions
Orora is susceptible to major changes in macro-
economic conditions globally or in a single country,
region or market. Sudden and/or prolonged deterioration
in the economy may impact the value chain or
industries on which Orora is dependent and could have
a material negative impact on operational and financial
performance.
Orora’s commitment to keeping people safe and healthy is paramount and
is a core value. Orora’s senior leadership team and Board are focused on
enhancing Orora's safety culture and performance, and regularly review
safety performance and improvement strategies and activities across the
business, including training. Further information regarding Orora’s
commitment to safety and health and response to COVID-19 is set out in
the Sustainability section of this Report.
Orora undertakes business continuity and disaster preparedness planning
for strategically important sites and functions. This includes continuously
monitoring and, as appropriate, enhancing information security capabilities
to keep pace with the evolving nature and sophistication of cyber threats.
Orora’s Information Security team, established in December 2018,
continues to enhance Orora’s ability to prevent, detect and respond to
cyber attacks both through implementing new tools and a cyber
awareness program to all team members. Orora has suitable cyber
insurance coverage in place.
Orora’s business continuity processes including safety, supply chain,
talent and customer preferences have proven to be effective in responding
to the COVID-19 pandemic.
Orora also engages in continuous identification, review and mitigation of
property risks, as well as independent loss prevention audits and has a
suitable insurance program in place. Insurances are reviewed annually.
Orora seeks to mitigate the severity of impact that deterioration in
macro-economic conditions may have by:
•
•
•
•
•
operating businesses that have a broad spread of geographic
locations, raw material inputs and customers servicing a number of
end-markets
deploying an operating model that focuses on continually improving
the value proposition to customers
creating and maintaining a high-performance culture
remaining disciplined in cash and cost management
continuing to invest in manufacturing capabilities and innovation to
improve cost positions.
Competition
Supply chain
Talent
38
Orora operates in highly competitive markets with
varying barriers to entry, industry structures and
competitor motivational patterns. The actions of
established, new or potential competitors may have a
negative impact on financial performance.
Orora is well placed to leverage both its regional experience and insight,
and its international footprint and scale, to deliver new ideas and value
propositions to customers to gain competitive advantage. Orora also
continuously focuses on quality and innovation as a source of competitive
advantage.
Disruption to Orora’s supply chain caused by an
interruption to the availability of key components, raw
materials, energy supply, or cost-effective
transportation may adversely impact delivery timelines
for capex projects, sales and/or customer relations,
resulting in unexpected delays or increased costs.
Orora’s businesses are sensitive to input price risks,
specifically energy and other commodities, in various
forms and with varying degrees of impact. Although
Orora seeks to mitigate these risks through various
input pricing strategies and pass-through mechanisms,
there is no guarantee that Orora will be able to manage
all future energy and commodity price movements.
Failure to do so may adversely affect Orora’s operations
and financial performance.
Orora’s operating and financial performance is largely
dependent on its ability to attract and retain talent and,
in particular, key personnel. Any loss of key personnel
could adversely affect operating and financial
performance.
Orora’s approach to supply chain risk management is multi-faceted and
includes:
•
•
•
•
•
implementing a multi-sourcing strategy for the supply of raw
materials
customer contracts that provide for regular and timely pass-through
of movements in raw material input costs
input pricing strategies including active monitoring of input prices
supplier due diligence and risk management including a supplier
assurance framework and code of conduct
a focus on innovation in sustainable energy sourcing and pricing
including entering long-term renewable energy power purchase
agreements.
Orora’s strategic Human Resources (HR) priorities aim to create an
inclusive culture that optimises diversity of background and thought, by
attracting and retaining the best talent in the market. Orora continues to
invest in a high performance culture, is encouraged by setting challenging
objectives and rewarding high performers, while succession planning is
undertaken to develop leadership talent. Orora believes this strategic
approach to HR management provides a tangible source of competitive
advantage.
Remuneration is competitive in the relevant employment markets to
attract, motivate and retain talent, and is aligned with business outcomes
that deliver value to shareholders.
ORORA LIMITED ANNUAL REPORT 2022
Principal
risks
Area of Materiality
Risk
Mitigation and Monitoring Strategies
Sustainability,
including climate
change
Customers
and consumer
preferences
Capital
investments
Mergers &
Acquisitions (M&A)
Country and
regulatory risk
Litigation
Financial and
treasury
The physical and non-physical impacts of
environmental, social and governance (ESG) risks,
including climate change, may affect Orora’s licence to
operate, assets and productivity. Climate change may
present risks arising from extreme weather events
affecting business operations and certain customer
segments, which could impact the future profitability
and viability of Orora.
Climate change may also present transition risks which
may include but are not limited to changes in the
market, regulatory environment, technology, and
customer preferences, which could also impact the
future profitability and viability of Orora.
Orora has strong relationships with key customers for
the supply of packaging and Point of Purchase products
and related services. These relationships are critical to
Orora’s success. The loss of a key customer, or a
significant quality issue, could have a negative impact
on financial performance.
Changes in consumer preferences may result in some
of Orora’s existing product range becoming obsolete or
new products not meeting sales and margin
expectations.
Consumer preferences may be influenced by regulation
change and environmental risk, including climate risk
(both of these risks are separately listed in this Principal
Risks section).
Orora is increasing expenditure on capital works in
response to increasing customer demands for our
products, and an ongoing commitment to invest in the
upgrade of our plant and equipment. There is a risk that
the returns on these investments may vary if customer
requirements materially change or there is substantial
delay in the delivery of plant or equipment.
Orora is committed to achieving its goals under the redefined pillars that
form its sustainability program – Circular Economy, Climate Change and
Community. The Sustainability section of this Annual Report summarises
the Company’s focus, goals and initiatives for these three pillars to deliver
Orora’s ‘Promise to the Future’. Further sustainability activities and
disclosures are, and will progressively be made available, on Orora’s
website under the ‘Sustainability’ section. ESG risks to and opportunities
for Orora are continually assessed, and activity is overseen by the Board,
the Safety, Sustainability & Environment Committee, and the Executive
Leadership team, with regular updates and recommendations provided to
the Board.
In addition, Orora continuously reviews operating and capital expenditure
plans to mitigate its ESG and customer risk, and operating businesses that
have a broad geographic spread and customers serving a number of end
markets.
The key to mitigating customer risk is Orora’s commitment to being the
industry-leading customer-focused sustainable packaging solutions
company. This is embedded in Orora’s promise to its customers.
In addition, no single customer generates revenue greater than 10% of
total revenue for the Orora Group.
Orora’s commitment to responsible capital investment linked to
contracted customer demand, innovation, and its strong relationships with
its customers, seeks to address evolving consumer preferences.
Orora continuously reviews operating and capital expenditure plans to
mitigate customer risk or changing consumer preferences.
Orora seek to mitigate these risks through a variety of measures including:
linking capital investments to contracted demand
due diligence throughout procurement and tender processes
project oversight through steering and governance committees
an ongoing focus on supply chain issues
•
•
•
•
• management of project risk in accordance with our Enterprise
Risk Management Framework.
Orora’s growth opportunities are dependent, in part, on
disciplined selection and successful integration of
acquisition targets that are consistent with the Group’s
strategy. Failure to be disciplined in selection, effective
at integration or focused on capturing value could
impact operations and have adverse consequences for
the achievement of expected financial benefits.
The Group has an established M&A framework that imposes rigour in target
selection, approval, due diligence, integration planning and post-
acquisition value capture. In addition, Orora’s management team possess
experience in undertaking M&A activity and executing the integration
process. Where deemed necessary, the Group will utilise the services of
external advisors to supplement internal resourcing to successfully
execute and integrate acquisitions.
Orora predominantly operates in Australia, New Zealand
and the United States under a broad range of legal,
accounting, tax, regulatory (including environmental)
and political systems. The profitability of Orora’s
operations may be adversely impacted by changes in
fiscal or regulatory regimes including tax policies,
difficulties in interpreting or complying with the local
laws of the countries in which Orora operates and
reversal of current political, judicial or administrative
policies, including as a result of geopolitical tensions.
Orora’s customers, many of which operate across a
broad range of countries, are subject to regulatory risk
in various jurisdictions, which may have an impact on
their operations and consequently Orora’s operations.
Orora continually monitors changes or proposed changes in regulatory
regimes that may have an impact on Orora and, where appropriate,
engages consultants and advisors to address specific issues. Where
possible, Orora appoints local management teams that bring a strong
understanding of the local operating environment and strong customer
relationships. Orora also has a global compliance training program and its
business leaders regularly review country and regulatory risk.
Orora’s tax affairs are governed by a tax risk framework that is approved,
reviewed and reported against by the Audit, Risk & Compliance Committee
of the Board. Tax risks are actively monitored and managed.
As is the case with all organisations, Orora is exposed to
potential legal and other claims or disputes in the
ordinary course of business, including contractual
disputes and other claims.
Orora takes legal advice in respect of such claims and, where relevant,
makes provisions and disclosure regarding such claims in its financial
statements. There are no current undisclosed claims or disputes of a
material nature.
Orora faces a variety of risks arising from the
unpredictability of financial markets, including the cost
and availability of funds to meet its business needs and
movements in market risks, such as interest rates,
foreign exchange rates and commodity prices.
Orora’s Treasury function adopts a financial risk management policy
approved by the Board. Appropriate commercial terms are negotiated and
derivative financial instruments are used, such as foreign exchange
contracts, commodity contracts and interest rate swaps, to hedge these
risk exposures. In addition, liquidity requirements are managed by, where
possible, proportionally drawing down debt in currencies that align with
the proportion of assets in those same currencies, thereby creating a
natural hedge.
ORORA LIMITED ANNUAL REPORT 2022
39
Board of Directors
Rob Sindel
(BEng, MBA, GAICD, FIEAust, CPEng)
Brian Lowe
(MBA)
Abi Cleland
(BA, BCom, MBA, GAICD)
Michael Fraser
(BCom FCPA MAICD)
Independent Non-Executive
Director and Chair
Managing Director and
Chief Executive Officer
Independent Non-Executive
Director
Independent Non-Executive
Director
Prior to Orora, Brian Lowe
spent eight years with Delphi
Technologies where he was
Managing Director of the Asia
Pacific Powertrain business,
including five years based in
Shanghai. This followed a
10-year career at General
Electric (GE), where he held
various leadership roles in sales
and marketing, and supply
chain. He was Managing Director
of GE Plastics, Australia from
2001 to 2003.
In his 11 years at Orora, Brian
has been the Group General
Manager of the Beverage (2011-
2015) and Fibre (2016-2019)
businesses. He was appointed
Managing Director and Chief
Executive Officer of Orora
Limited in October 2019.
Board Committee membership
Michael Fraser has a wealth
of experience, following a
30-year career at AGL Energy
where he held various senior
management positions in sales
and marketing, distribution,
corporate services and
regulatory management.
Michael was formerly the
Managing Director and Chief
Executive Officer of AGL Energy
Limited. Michael is currently
Independent Chairman of APA
Group and was until recently,
a non-executive director of
Aurizon Holdings Ltd.
Directorships of listed
entities and other
directorships and offices
Current:
• Independent Chair, APA
Group (since October 2017;
Independent Director since
September 2015)
Recent (last 3 years):
• Director, Aurizon Holdings Ltd
(February 2016 to February
2022)
Board Committee membership
Abi Cleland has extensive global
experience in strategy, M&A,
digital and running businesses.
This has been gained from
senior executive roles in the
industrial, retail, agriculture
and financial services sectors,
including with ANZ, Amcor,
Incitec Pivot and as Managing
Director of 333 Management,
after starting her career in
Australasia.
From 2012 to 2017, Abi
established and operated an
advisory and management
business, Absolute Partners,
focusing on strategy and
building businesses leveraging
disruptive change for large
corporates and entrepreneurial
businesses.
Abi has been a Director of Orora
Limited since February 2014.
Directorships of listed
entities and other
directorships and offices
Current:
• Director, Coles Group Ltd
(since November 2018)
• Director, Computershare
Limited (since February 2018)
• Director, Methodist Ladies
College Victoria (since
January 2021)
Recent (last 3 years):
• Chair, Planwise Australia
(June 2016 to March 2020)
and Director (January 2016 to
March 2020)
• Director, Swimming Australia
(Audit Chair) (July 2015 to
June 2021)
• Director, Sydney Airport
Limited (April 2018 to
March 2022)
Board Committee membership
Rob Sindel has extensive
experience obtained from
executive management and
leadership positions, principally
from his 30-year career in the
construction and manufacturing
industries both in Australia and
the United Kingdom. Rob has
particular insights in sales and
marketing, in B2B environments,
process improvement, strategic
management and operating in
high-risk industries.
Rob was formerly the Managing
Director and Chief Executive
Officer of CSR Limited from 2011
until 2019.
Rob has been a Director of Orora
Limited since March 2019 and
was appointed Chair of the
Board in February 2020.
Directorships of listed
entities and other
directorships and offices
Current:
• Director, Boral Limited
(since September 2020)
• Director, Mirvac Group
(since August 2020)
• Member, Yalari NSW
Advisory Committee
(since August 2017)
Recent (last 3 years):
• Director, Australian Business
and Community Network
(October 2013 to
November 2019)
• Director, Green Building
Council of Australia
(September 2013 to
November 2019)
• Managing Director and Chief
Executive Officer, CSR Limited
(January 2011 to
September 2019)
• Member, UNSW Australian School
of Business Advisory Council
(June 2013 to December 2019)
Board Committee membership
40
ORORA LIMITED ANNUAL REPORT 2022 KEY — Committee Member
(Chair of each Committee indicated
by black circle outline)
Executive Committee
Nomination Committee
Safety, Sustainability &
Environment Committee
Human Resources Committee
Audit, Risk & Compliance
Committee
Tom Gorman
(BA, MA, MBA)
Sam Lewis
(BA (Hons), CA, ACA, GAICD)
Jeremy Sutcliffe
(LLB (Hons))
Independent Non-Executive
Director
Independent Non-Executive
Director
Independent Non-Executive
Director and Deputy Chair
Jeremy Sutcliffe has broad
international corporate
experience as CEO of two ASX
Top 100 companies and has
extensive experience with
businesses operating in North
America and Europe with diverse
trading relationships in Asia. A
qualified lawyer in Australia and
the UK, Jeremy previously held
positions with Baker McKenzie
in London and Sydney, Sims
Metal Management Limited and
associated companies (including
Group CEO), and Interim
Managing Director & CEO of
CSR Limited.
Jeremy has been a Director of
Orora Limited since December
2013.
Directorships of listed entities
and other directorships and
offices
Current:
• Director, Amcor Limited
(since October 2009)
Recent (last 3 years):
• Member, Advisory Board of
Veolia Environmental Services
Australia (June 2010 to
December 2018)
Board Committee membership
Thomas (Tom) Gorman brings
a wealth of experience to
Orora, following a 30-year
career in executive positions
at Ford Motor Company and
Brambles Limited, of which he
was Chief Executive Officer.
Tom has worked in multiple
functions including finance,
operations, logistics, marketing
and business development in
England, France, Australia and
the United States (where he is a
resident).
Tom graduated cum laude
from Tufts University with
BA degrees in Economics and
International Relations, obtained
an MA from the Fletcher School
of Law and Diplomacy, and an
MBA with distinction from the
Harvard Business School.
Tom has been a Director of Orora
Limited since September 2019.
Directorships of listed
entities and other
directorships and offices
Current:
• Director, Alcoa Corporation
(since May 2021)
• Director, Sims Limited
(since June 2020)
• Director, Worley Limited
(since December 2017)
Board Committee membership
Samantha (Sam) Lewis is a
chartered accountant with
extensive experience in
accounting, finance, auditing,
risk management, corporate
governance, capital markets
and due diligence. Sam has
been a Non-Executive Director
since 2014. Prior to becoming
a Non-Executive Director, she
spent 24 years with Deloitte,
including 14 years as a Partner.
In that role, she led the audit of
a number of major Australian
listed companies in the retail,
FMCG, manufacturing and
industrial sectors. In addition,
Sam provided accounting and
transactional advisory services
including due diligence, IPOs and
debt/equity raisings.
Sam holds a Bachelor of Arts,
Economics from the University
of Liverpool in the UK, and is
a member of the Institute of
Chartered Accountants in
Australia and the Institute
of Chartered Accountants in
England and Wales.
Sam has been a Director of
Orora Limited since March 2014.
Directorships of listed
entities and other
directorships and offices
Current:
• Chair, APRA Audit and Risk
Committee (since June 2016)
• Director, Aurizon Holdings
Limited (since February 2015)
• Director, Nine Entertainment
Co Holdings Limited
(since March 2017)
Board Committee membership
41
ORORA LIMITED ANNUAL REPORT 2022 Executive
Leadership team
Brian Lowe
(MBA)
Managing Director and
Chief Executive Officer
Simon Bromell
(BSc, GDip Agribus, GAICD)
Group General Manager,
Beverage
Simon Bromell joined Orora in
2014, and has over 30 years
of experience in leadership
roles across the national food
and beverage supply chain in
consumer goods, agribusiness
and packaging. Prior to Orora,
Simon was General Manager
of Gold Coin Asia and also
spent four years as Managing
Director of Fonterra’s
Australian Ingredients
business.
Before this, he held senior
management roles across
a range of businesses and
functions at Mars from
1996 to 2009.
Prior to Orora, Brian Lowe
spent eight years with Delphi
Technologies where he was
Managing Director of the Asia
Pacific Powertrain business,
including five years based in
Shanghai. This followed a
10-year career at General
Electric (GE), where he held
various leadership roles
in sales and marketing,
and supply chain. He was
Managing Director of GE
Plastics, Australia from
2001 to 2003.
In his 11 years at Orora, Brian
has been the Group General
Manager of the Beverage
(2011-2015) and Fibre (2016-
2019) businesses. He was
appointed Managing Director
and Chief Executive Officer of
Orora Limited in October 2019.
Bob Firenze
(BA)
Shaun Hughes
(BComm, BA, GAICD, CA ANZ)
President, Orora Visual
Chief Financial Officer
Robert (Bob) Firenze was
appointed President, Orora
Visual in March 2020, bringing
over 20 years of experience
in sales and management in
the North American packaging
industry. Bob joined Orora in
2001 as a Division Manager in
Orora Packaging Solutions. He
was responsible for growing
and expanding the business
in multiple North American
regions and served as Senior
Vice President — East Region,
Orora Packaging Solutions
immediately prior to his
appointment as President,
Orora Visual.
Shaun Hughes was appointed
CFO at Orora in October
2020, having spent more
than 20 years leading the
finance, procurement and IT
teams for a range of ASX-
listed and multinational
companies operating across
diverse industries. Shaun
has extensive financial
management experience
in building and growing
organisations having held
global leadership roles with
Telstra, Elders, IBM and EBOS.
Shaun is a member of the
Institute of Chartered
Accountants of Australia
and New Zealand.
42
ORORA LIMITED ANNUAL REPORT 2022 Frank Pennisi
(BS Eng, MS Eng)
President,
Orora Packaging Solutions
Frank Pennisi was appointed
President of Orora Packaging
Solutions in November
2020. Prior to joining Orora,
Frank was the President of
the Industrial Technologies
segment for FLIR Systems,
based in Santa Barbara,
California. In this role Frank
accelerated the digital
transformation and growth
of the business through
automation of tools and
services, as well as focusing
commercial and operational
resources. Frank has also held
leadership roles including VP
Strategy and Marketing with
Honeywell where he drove a
range of strategic digital and
commercial excellence growth
programs.
Frank began his career with GE
where he held several general
management and operational
roles in three countries.
Ann Stubbings
(BA/LLB, GAICD)
Chief People, Sustainability
and Governance Officer,
Company Secretary and
Group General Counsel
Ann Stubbings leads
the Human Resources,
Sustainability, Corporate
Safety, Legal, Company
Secretariat and Corporate
Affairs/Communications
teams. Ann was appointed
to the Orora Executive
Leadership Team upon
Orora’s listing on the ASX
in December 2013.
Prior to joining Orora, Ann
held various senior in-house
legal roles in corporate and
commercial law, dispute
resolution, governance and
company secretariat across
manufacturing and financial
services, and commenced her
career in private legal practice
at Hall and Wilcox.
Matthew Wilson
(LLB, BCom (Hons))
Chief Strategy and
Corporate Development
Officer
Matthew Wilson joined Orora
in January 2020, bringing
over 20 years of experience
in corporate finance and
strategy. Prior to Orora,
Matthew was Managing
Director at independent
corporate advisory firm,
Flagstaff Partners and
previously spent 15 years
at J.P. Morgan in both
Melbourne and Sydney
where he led the Australian
investment banking division’s
coverage of healthcare,
telecommunications,
technology and private
equity clients.
Matthew began his
professional career in the
investment banking division
of Macquarie Bank.
43
ORORA LIMITED ANNUAL REPORT 2022 Directors’
report
The Directors of Orora Limited (Orora or
the Company) present their report,
together with the financial statements
of the Company and its controlled entities
(collectively referred to as the
consolidated entity or the Orora Group),
for the financial year ended 30 June 2022.
In this section
Directors’ report
Statutory matters
Board of Directors
Company Secretary
Directors’ meetings
Operating and financial review
State of affairs
Principal activities
Events subsequent to the
end of the financial year
Likely developments
Dividends
Environmental performance
and reporting
44
45
45
45
45
46
46
46
46
46
46
46
Directors’ interests
Unissued shares under option
Shares issued on exercise of options
On-market share purchases to satisfy
employee share plans
Indemnification and insurance
of officers
Indemnification of auditors
Proceedings on behalf of the Company
Non-audit services
External audit services
Rounding off
Corporate Governance Statement
47
47
47
47
47
48
48
48
48
48
48
Remuneration report
Directors’ declaration
Auditor’s independence declaration
49
66
67
44
ORORA LIMITED ANNUAL REPORT 2022
DIRECTORS’ REPORT
Statutory
matters
Board of Directors
The Directors of the Company in office as at the date of this report are:
A R H (Rob) Sindel
B P (Brian) Lowe
A P (Abi) Cleland
M A (Michael) Fraser
T J (Tom) Gorman
S L (Sam) Lewis
J L (Jeremy) Sutcliffe
All Directors, except Michael Fraser, served on the Board for the period from 1 July 2021 to 30 June 2022. Michael Fraser was appointed
Director on 1 April 2022.
The qualifications, experience and special responsibilities of the current Directors, and other directorships held by them during the
previous three years, are set out on pages 40 to 41 of this Annual Report.
Company Secretary
A L (Ann) Stubbings is the Company Secretary of the Company, having commenced the position on listing of the Company on the ASX in
December 2013. Ms Stubbings’ qualifications and experience are set out on page 43 of this Annual Report.
Directors’ meetings
The following table sets out the number of Directors’ meetings (including meetings of Board Committees) held during the period from
1 July 2021 to 30 June 2022, and the number of meetings attended by each Director.
Board
8
4
A
12
5
11
11
12
12
11
B
12
5
12
12
12
12
12
Audit, Risk &
Compliance
Committee
4
-
A
4*
1
4
4
4*
4*
3
B
-
1
4
4
-
-
4
Executive
Committee
Human Resources
Committee
Nomination
Committee**
2
1
4
-
-
-
A
1*
-
1*
2
3
3
-
B
-
-
-
3
3
3
-
A
4
1
4
4*
4*
4*
4
B
4
1
4
-
-
-
4
A
-
-
-
-
-
-
-
B
-
-
-
-
-
-
-
Safety,
Sustainability
& Environment
Committee
4
-
A
4
2*
3*
4
4*
4
3*
B
4
-
-
4
-
4
-
Scheduled Meetings
Unscheduled Meetings
A P Cleland
M A Fraser[1]
T J Gorman
S L Lewis
B P Lowe
A R H Sindel
J L Sutcliffe
[1] Mr Fraser was appointed as Director on 1 April 2022. He attended all Directors’ meetings from his date of appointment to 30 June 2022.
A
B
Number of meetings attended.
Number of meetings held during the time the Director held office (in the case of Board meetings) or as a member of the Committee during the year (in the case
of committee meetings).
Indicates that although the Director is not a member of a specific Committee, the Director attended the meeting. All Directors are welcome to attend Committee
meetings even though they may not be a member.
All Nomination Committee matters were dealt with by the full Board during the financial year.
*
**
ORORA LIMITED ANNUAL REPORT 2022
45
DIRECTORS’ REPORT
Statutory
matters
Operating and financial review
An operating and financial review of the consolidated entity during the financial year and the results of these operations begins at page
22 of this Annual Report.
State of affairs
There have been no significant changes in the state of affairs of the consolidated entity during the financial year ended 30 June 2022
other than as disclosed in this Annual Report.
Principal activities
The principal activities of the consolidated entity at the date of this report are set out in the ‘Orora at a glance’ section on page 1 of this
Annual Report. There were no significant changes in the nature of the principal activities of the consolidated entity during the financial
year ended 30 June 2022.
Events subsequent to the end of the financial year
There have been no matters or circumstances which have arisen between 30 June 2022 and the date of this report that have
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the
Group in future years.
Likely developments
The Operating and Financial Review section from pages 22 to 27 of this Annual Report contains information on the consolidated entity’s
business strategies and prospects for future financial years, and refers to likely developments in the consolidated entity’s operations and
the expected results of these operations in future financial years. Information on likely developments in the consolidated entity’s
business strategies, prospects and operations for future financial years and the expected results of those operations has not been
included in this report where the Directors believe it would likely result in unreasonable prejudice to the consolidated entity. Details that
could give rise to material detriment to the consolidated entity, for example, information that is commercially sensitive, confidential or
could give a third party a commercial advantage, have also not been included.
Dividends
Dividends paid or declared by the Company to members during the financial year ended 30 June 2022 are set out in note 2.2 to the
Financial Statements.
No waiver was sought from the Trustees of the Orora Employee Share Trusts in respect of the entitlement of Treasury Shares held in the
Trusts to be paid from the 2022 interim or final dividends, in compliance with Australian Tax Office Tax Determination (TD 2019/13). The
Trusts received dividends on unallocated shares and the Employee Share Trusts were subject to tax at the applicable rate on dividends
received in respect of the unallocated shares.
Environmental performance and reporting
The Orora Group is committed to continuous improvement of its environmental performance by finding better ways to manufacture and
distribute its products. This is guided by the Orora Group’s Environmental Policy, a copy of which is available on Orora’s website.
(a) Carbon emissions
The National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (Rule) made under the National Greenhouse and Energy
Reporting Act 2007 (Cth) (NGER Act) applies to facilities with direct CO2 emissions (Scope 1) of greater than 100,000 tonnes per year.
These facilities are required to maintain their direct emissions below their historical peak level. Facilities that exceed their historical peak
CO2 emissions will be required to purchase CO2 credits to offset their increase in emissions.
The only Orora Group facility that exceeds the 100,000 tonnes per year CO2 threshold is the glass facility in Gawler, South Australia.
The Glass facility at Orora moved from a calculated baseline to a production adjusted baseline in FY21. To date, the site has never
exceeded the Safeguard Mechanism baseline. This facility complies with its obligations under the Rule.
(b) Greenhouse gas requirements
In Australia, the Orora Group is subject to reporting obligations under the NGER Act.
The NGER Act requires the Company to report on its annual Australian greenhouse gas emissions and energy use. The Orora Group has
data gathering and management systems in place that comply with the NGER Act and the Clean Energy Regulator’s audit processes. To
comply with this obligation, Orora provides a report to the Clean Energy Regulator each year.
46
ORORA LIMITED ANNUAL REPORT 2022
DIRECTORS’ REPORT
Statutory
matters
(c) Manufacturing
All of Orora Group’s manufacturing sites are subject to significant environmental regulation, including, where applicable, specific
environmental licences. These licences require discharges to air, land and water to be below specified levels of contamination.
Compliance with these regulations and Group’s overall environmental performance is monitored by Orora’s internal Sustainability Team,
which liaises directly with divisional and site-based health, safety and environment professionals. Orora Group’s environmental
performance and material regulatory compliance is also discussed regularly at Executive Leadership Team meetings.
The Directors are not aware of any material breaches of environmental regulations or site-specific licences during or since the financial
year ended 30 June 2022.
Directors’ interests
The relevant interests of each Director in the share capital of the Company as at the date of this report are as follows:
Name
Directors of Orora Limited
A P Cleland
M A Fraser
T J Gorman
S L Lewis
B P Lowe
A R H Sindel
J L Sutcliffe
Number
of shares
130,632
55,000
56,000
93,835
541,656(1)
140,000
131,355
(1)
Details of rights and options over shares in the Company held by B P Lowe are set out in section 6.4 of the Remuneration Report.
Unissued shares under option
Unissued ordinary shares or interests of the Company under option as at the date of this report are as follows:
Options granted
30 Oct 2015
22 Oct 2018
Expiry date
Issue price
30 Sep 2024
31 Aug 2027
2.08
3.58
Number
under option
226,567
1,226,125
These options do not allow the holder to participate in any share or rights issue of the Company. Refer to the Remuneration Report for
further information.
Shares issued on exercise of options
There were no ordinary shares of the Company issued during or since the financial year ended 30 June 2022 on the exercise of options
granted over unissued shares or interests.
On-market share purchases to satisfy employee share plans
During the financial year ended 30 June 2022, 3,587,270 ordinary shares of the Company were purchased on-market and held on trust to
satisfy obligations under the Company’s employee incentive plans. The average price per security at which these shares were purchased
was $3.58.
Indemnification and insurance of officers
In accordance with the Company’s Constitution, the Company has entered into agreements with each person who is, or has been, an
officer of the Company. This includes the Directors in office at the date of this report, all former Directors and other executive officers of
the Company, indemnifying them against any liability to any person other than the Company, or a related body corporate, that may arise
from their acting as officers of the Company, notwithstanding that they may have ceased to hold office. There is an exception where the
liability arises out of conduct involving a lack of good faith, or is otherwise prohibited by law.
ORORA LIMITED ANNUAL REPORT 2022
47
DIRECTORS’ REPORT
Statutory
matters
During and since the end of the financial year ended 30 June 2022, the Company has paid or agreed to pay the premiums for an insurance
policy to insure current and previous Directors and other executive officers of the Company against certain liabilities incurred in that
capacity.
Due to the confidentiality obligations and undertakings set out in these agreements, no further details in respect of the premiums paid,
or the terms of the agreements, can be disclosed.
No indemnity payment has been made under any of the documents referred to above during or since the financial year ended
30 June 2022.
Indemnification of auditors
The Company’s auditor is PricewaterhouseCoopers (PwC). During and since the financial year ended 30 June 2022:
• no premium has been paid by the Company in respect of any insurance for PwC
• no indemnity has been paid by the Company in respect of PwC’s appointment as auditor
• no officers of the Company were partners or directors of PwC, while PwC undertook an audit of the Company.
Proceedings on behalf of the Company
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court, nor has any application for leave
been made in respect of the Company, under section 237 of the Corporations Act 2001.
Non-audit services
During the year, PwC, the Company’s auditor, performed certain other services in addition to their statutory duties. The Board has
considered the non-audit services provided during the financial year ended 30 June 2022 by the auditor and, in accordance with written
advice provided by resolution of the Audit, Risk & Compliance Committee, is satisfied that the provision of those non-audit services
during the financial year by the auditors is compatible with the general standard of independence for auditors, and did not compromise
the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the
Audit, Risk & Compliance Committee to ensure they do not impact the impartiality and objectivity of the auditor. In particular, all non-
audit services are approved in accordance with the non-audit services delegations and approvals framework and reported to the
Audit, Risk & Compliance Committee at each meeting.
• The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and
rewards. A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 can be found
on page 67 of this Annual Report.
• Details of the amounts paid to PwC and its related practices for audit and non-audit services provided during the financial year are
set out in note 7.2 to the Financial Statements. In each case, the engagement of PwC was made on its merits (based on service level,
expertise, cost, as well as geographical spread).
External audit services
PwC has been the Company’s external auditor approval by shareholders at the Company’s 2014 AGM. Following completion of a tender
process, the Company intends to recommend the appointment of KPMG as the Company’s external auditor commencing for the year
ending 30 June 2023, subject to regulatory and shareholder approval.
Rounding off
The Company is of a kind referred to in the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. In
accordance with the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, and except where otherwise
stated, amounts in the Financial Statements and Directors’ Report have been rounded off to the nearest $100,000 or to zero where the
amount is $50,000 or less.
Corporate Governance Statement
The key features of the Company’s corporate governance framework are set out in the Corporate Governance Statement, which is
available on pages 28 to 37 of this Annual Report.
48
ORORA LIMITED ANNUAL REPORT 2022
DIRECTORS’ REPORT
Remuneration
report
Orora’s remuneration framework
continues to demonstrate the strong
alignment between financial
performance, shareholder returns and
executive remuneration outcomes.
Dear Fellow Shareholder,
As Chair of the Orora Human Resources Committee and on behalf of our Board of Directors, I am pleased to present Orora’s Remuneration
Report for the financial year ended 30 June 2022.
In partnership with my fellow Directors, Committee members and Orora’s Executive team, I remain committed to providing transparent
reporting and clear communication for shareholders. We recognise that ensuring Orora’s Human Resources policies and remuneration
framework are structured to attract, retain and motivate diverse talent is fundamental to Orora’s long-term sustainability.
Company performance and financial year 2022 remuneration outcomes
Orora’s performance for the financial year ended 30 June 2022 (delivering earnings before significant items, interest and tax (EBIT) of
$285.5 million was strong despite ongoing challenging economic conditions around the world. As always, we focused first on the safety
of our people and meeting the needs of our customers. Responding to the high demand experienced across many product categories has
meant navigating the volatility of higher input costs and intermittent supply. The team remains committed to deliver progress against the
Orora strategy with operational efficiency programs driving solid earnings improvement in North America, and investment in Australasian
Beverage improving capacity to support increases in demand. Orora’s ongoing resilience can be attributed to a broad, diversified portfolio
and wide customer base, building our defensive earnings profile, and strengthening our platform for growth.
Orora’s executives are rewarded for annual performance against business plans as well as longer-term returns for shareholders. Incentive
plan outcomes for this year again reflect the strong alignment between Orora’s financial performance, executive remuneration outcomes
and the challenging nature of Orora’s strategic business objectives.
In line with last financial year, the Board did not exclude any COVID-19 impact on the Group’s financial performance in the assessment of
long and short-term incentive outcomes. It remains our belief that Orora and our people must be agile, adapt and perform in a wide array
of challenges and circumstances.
The short-term incentive (STI) assessment includes financial and non-financial metrics (at a Group and individual level). STI payments for
the current Executive KMP will be paid between 90% and 95% of maximum STI opportunity.
In FY19 we made changes to Orora’s long-term incentive (LTI) plans that better aligned them with market practice and met the goals of
Orora’s remuneration framework, making performance rights the only form of grant. This change resulted in two grants being tested at
30 June 2022, being the FY19 grant of rights and options with a four-year performance period, and the FY20 grant of rights, which has a
three-year performance period and a one-year employment holding lock. With strong results achieved across both periods, the FY19 grant
will vest at 85.8% in August 2022, while the FY20 grant will vest at 100% the following year in August 2023, at the conclusion of the
one-year employment holding lock.
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Remuneration changes during the financial year
No changes were made to our remuneration framework in FY22. In FY22 the Executive KMP received a fixed remuneration increase of
2.5%, in line with market increases.
The Human Resources Committee periodically reviews the remuneration of Executive KMP against similar roles in other ASX-listed
companies of comparable size and industry dynamics to ensure that the remuneration levels are aligned with market. For FY23, the
Board of Directors considers it appropriate to increase the fixed remuneration for the CEO and CFO by 3.5% and 7.5% respectively, in line
with the market.
When Brian Lowe took over as CEO at the end of 2019, his total fixed remuneration and target LTI award were set lower than his
predecessor, which the Board determined at the time was appropriate for a new appointee. Having considered the Group’s strategy, focus
on value creation and shareholder returns and remuneration levels in comparable organisations, the Board of Directors now considers it
appropriate to increase the target LTI award for the CEO to the same level as his predecessor, that is, an increase from 70% to 100% of
his Total Fixed Remuneration. This proposed LTI grant for FY23 will be subject to shareholder approval at the Annual General Meeting.
Final thoughts
I would like to thank Orora shareholders for your support this year and warmly congratulate the Orora team for delivering another strong
result in globally challenging times. The team’s ongoing commitment to delivering for our customers is outstanding, and they remain
focused on keeping themselves and their colleagues safe.
It is my pleasure to provide the FY22 Remuneration Report on the following pages and I welcome shareholder queries for any clarification
they may need in respect of this Report.
Warm regards,
TOM GORMAN
CHAIR, HUMAN RESOURCES COMMITTEE
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Introduction
The Remuneration Report provides a summary of Orora’s remuneration policy and practice for Key Management Personnel (KMP) for the
financial year ended 30 June 2022. This report has been prepared as required by the Corporations Act 2001 (Cth) for the Company and its
controlled entities (collectively, the Group or Orora) and has been audited by Orora’s external auditor. This Remuneration Report forms
part of the Directors’ Report.
Structure of this report
Orora’s 2022 Remuneration Report is divided into the following sections:
Section
Message from Tom Gorman, Chair Human Resources Committee
u Key Management Personnel
v Overview of FY22 remuneration
w Remuneration framework
x Relationship between performance and remuneration outcomes
y Non-Executive Director remuneration
z Additional required disclosures
Page No.
49
51
52
54
56
61
61
Key Management Personnel (KMP)
1.
For the purposes of this Remuneration Report, KMP include Executive and Non-Executive Directors and nominated senior executives who
have authority and responsibility for planning, directing and controlling the activities of the Group, either directly or indirectly. For the year
ended 30 June 2022, the KMP were:
Name
Non-Executive Directors (NED)
A R H (Rob) Sindel
A P (Abi) Cleland
T J (Tom) Gorman
S L (Sam) Lewis
J L (Jeremy) Sutcliffe
M A (Michael) Fraser[1]
Executive Director
B P (Brian) Lowe
Executive
Position
Chair
Director
Director
Director
Director
Director
Term as KMP
Full year
Full year
Full year
Full year
Full year
Partial year
Managing Director and Chief Executive Officer (CEO)
Full year
S C (Shaun) Hughes
Chief Financial Officer (CFO)
Full year
(1) M A Fraser was appointed as a Director on 1 April 2022.
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2. Overview of FY22 remuneration
2.1. Summary of remuneration framework
Orora’s executive remuneration framework applies to the CEO and all of his direct reports of which the Executive KMP form a subset. This
framework was introduced in FY20. Refer to Section 3.1 for a detailed explanation of the current remuneration components. Refer to
Section 6.3 for an explanation of performance hurdles used and the vesting schedule.
OUR PURPOSE
To be a leading sustainable packaging solutions provider, designing and delivering
products and services that enable our customers’ brands to thrive
Our Purpose is supported by our remuneration principles and
performance framework, overseen by the Board
REMUNERATION PRINCIPLES
Attract, motivate and
retain talent
Drive a high-
performance culture
Create long-term
shareholder value
REMUNERATION COMPONENTS[1]
Fixed remuneration (FR)
Short-Term Incentive (STI)
Long-Term Incentive (LTI)[2]
• A market-based reward for
• Rewards the achievement of Group and individual
• Reinforces focus on creating long-term
role.
• Delivered as cash salary and
contribution to retirement
benefits.
goals over a 12-month period.
• CEO has a target STI of 70% of FR and a maximum
opportunity of 100% of FR. The other Executives
have a target of 50% and a maximum opportunity
of 75% of FR.
• 2/3 delivered in cash and 1/3 in Deferred Share
Rights (DSR) deferred for two years.
value for shareholders.
• 50% to 100% of FR delivered as an
upfront grant of Performance Rights
(PR) with a three-year performance
period and an additional one-year
employment holding lock before
vesting.
• Any increases in salary will
consider the market median
remuneration for similar roles
and individual performance.
LINK TO PERFORMANCE
• A scorecard of performance measures at a Group
level is used to determine STI award payable. The
scorecard represents the key priority areas for the
current year and typically includes strategic
initiatives and has a strong weighting towards
financial growth and returns. A safety and
performance overlay also applies.
• Deferral of payment in equity aligns reward
outcomes with long-term value creation for
shareholders.
The following performance hurdles apply
to LTI aligning executive and shareholder
interests:
• Earnings per Share (EPS) growth with a
Return on Average Funds Employed
(RoAFE) gateway.
• Relative Total Shareholder Return
(RTSR) with an Absolute Total
Shareholder Return (ATSR) gateway.
Supports alignment of Executive and Shareholder interests
Large proportion of remuneration
is at risk and delivered as equity.
Clawback and malus provisions
apply to all equity.
Use of EPS, RoAFE, RTSR and
ATSR performance hurdles for PR.
Minimum shareholding
requirements.
(1)
(2)
An award of shares or cash deferred up to five years is occasionally used at the time of recruitment to replace existing entitlements from previous employers or
as a specific retention award for existing executives.
The FY19 grant, which will partially vest in August 2022, comprises performance rights and options. This award is subject to a four-year performance and
vesting period.
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2.2. Snapshot of FY22 performance and remuneration outcomes
The Executive KMP remuneration outcomes for the financial year ended 30 June 2022 are summarised below. For more detailed
information on remuneration outcomes and link to performance, please refer to Section 4.
Remuneration
component
Changes to
remuneration
for FY23
Short-Term
Incentive (STI)
Long-Term
Incentive (LTI)
Description
•
•
The Board periodically benchmarks the remuneration of Executive KMP against comparable roles in other
ASX-listed companies of similar size and industry dynamics as Orora.
For FY23, reflecting the overall performance of the Company, the Board has decided that the CEO will receive a
fixed remuneration increase of 3.5%, in line with market increases, and the CFO will receive a fixed remuneration
increase of 7.5%, to position his total remuneration at a market competitive level.
• Considering the Group's strategy, focus on shareholder returns, market data and demonstrated achievement in
the role, the Board also considered it appropriate to increase the LTI for the CEO from 70% to 100% of FR which
is the same level as the CEO's predecessor. More details of the benchmarking approach used can be found in
Section 4.4.
FY22 award
• Orora’s STI assessment includes several financial and non-financial metrics (at Group and individual level).
•
The Earnings before Interest and Tax (EBIT) and Average Working Capital (AWC) as a % of sales exceeded the
targets set by the Board for the financial year ended 30 June 2022.
• As a result, STI payments for current Executive KMP will be paid out between 90% and 95% of maximum
STI opportunity.
Awards due to vest in FY22 and FY23
• DSR awarded as part of the STI payment for the financial year ended 30 June 2019 vested in September 2021.
The Board did not identify any performance or conduct factors that would warrant lapsing of unvested equity.
Accordingly, the Board approved full vesting of the FY19 DSR.
• DSR awarded as part of the STI payment for the financial year ended 30 June 2020 are due to vest in September
2022. The Board did not identify any performance or conduct factors that would warrant lapsing of unvested
equity. Accordingly, the Board approved full vesting of the FY20 DSR. For this equity to vest, the executive must
remain employed until the vesting date (September 2022).
FY22 award
• Executive KMP were awarded 70% of their FR as Performance Rights with a three-year performance period (1
July 2021 to 30 June 2024) and an additional one-year employment holding lock before vesting. The grant to the
CEO was awarded post shareholder approval at the 2021 AGM.
Award tested in FY22 and vesting in FY23
•
The FY19 LTI grant had a four-year performance period which ended on 30 June 2022 and is due to vest in
August 2022. This award included a grant of performance rights and options.
• 50% of the award had an EPS performance hurdle with a RoAFE gateway and 50% had a RTSR performance
•
hurdle with an ATSR gateway.
The RoAFE and ATSR gateways were met for this grant. Orora’s EPS growth performance of 6.5% was between
the 4% and 8% vesting range for this grant and Orora’s RTSR performance was at the 70th percentile of the peer
group. This resulted in 85.8% of the grant vesting.
Award tested in FY22 and vesting in FY24
• As previously disclosed, the Board removed options from the LTI plan from FY20 to better align with market. The
performance period of the LTI grant was reduced from four years to three years to facilitate robust goal setting,
with an additional one-year employment holding lock for vesting to occur.
• Accordingly, the FY20 LTI grant had a three-year performance period which ended on 30 June 2022. This grant
has a one-year employment holding lock before vesting (August 2023).
• 50% of the award had an EPS performance hurdle with a RoAFE gateway and 50% had a RTSR performance
•
hurdle with an ATSR gateway.
The RoAFE and ATSR gateways were met for this grant. Orora’s EPS performance of 8.3% exceeded the 4% and
8% vesting range for this grant and RTSR performance was above the 75th percentile of the peer group.
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3. Remuneration framework
3.1. Remuneration components
Remuneration
component
Fixed
Remuneration (FR)
Short-Term
Incentive (STI)
Description
•
•
Includes cash salary and contribution to retirement benefits.
The Board sets the fixed remuneration for KMP based on market median remuneration for similar roles in
ASX-listed companies of similar size, industry and geographical footprint. The annual review of fixed
remuneration takes into consideration market relativity, skills, experience, past performance and impact on total
remuneration.
• Rewards the achievement of Group and individual financial and non-financial goals over a 12-month period.
• 2/3 of the award is delivered annually in cash following the release of the end of year financial results.
•
1/3 of the award is delivered in DSR[1] deferred over two years subject to malus conditions. Vesting after two
years is subject to continued service.
The number of units is calculated as 1/3 of the STI award divided by the volume-weighted average share price
(VWAP) of Orora shares for the five trading days up to and including the end of the financial year (30 June).
The CEO has a target STI of 70% of FR and a maximum opportunity of 100% of FR. Other executives have a
target of 50% and a maximum opportunity of 75% of FR.
•
•
Long-Term
Incentive (LTI)
• Aligns executive and shareholder interests by reinforcing executive focus on long-term sustainable shareholder
returns.
• 50% to 100% of FR delivered as PR[1] subject to a three-year performance period and an additional one-year
employment holding lock with the following performance hurdles:
— Growth in EPS hurdle with a RoAFE gateway – 50% weight
— RTSR hurdle with an ATSR gateway – 50% weight
The combination of EPS and RoAFE represents a strong measure of overall business performance.
The use of RTSR hurdle with an ATSR gateway focuses on growth of the Group and creating above average value
for shareholders. Refer to Section 6.3 for a more detailed explanation of the hurdles used.
•
•
• After considering internal and external benchmarks, the Board set the following performance hurdles for the
FY22 LTI grant:
— PR subject to EPS hurdle: RoAFE gateway of 15% must be met for the performance period for vesting to
occur. If the RoAFE gateway is met, EPS growth of 4% over the performance period will be required for 50%
vesting, with 100% vesting requiring an EPS growth of 8%.
•
•
— PR subject to RTSR hurdle: Orora’s ATSR over the performance period must not be negative for vesting to
occur. If the ATSR gateway is met, RTSR over the performance period must be at the 50th percentile of the
comparator group for 50% vesting, with 100% vesting requiring RTSR to be at the 75th percentile.
The number of units granted is calculated as value of the grant (50% to 100% of FR) divided by the VWAP of
Orora shares for the five trading days up to and including the end of the financial year (30 June).
For LTI grants from FY22, the share price used to calculate the ATSR of the Group and each of the comparator
companies for the performance period will use the 20 trading days VWAP for both the starting share price and
the closing share price. The previous approach used five trading days VWAP for the starting share price and
20 trading days VWAP for the closing share price. This change has been made to reduce the impact of share
price volatility and to improve consistency.
(1)
A Right (either DSR or PR) is the right to receive one Orora share (or cash of equivalent value) upon vesting, subject to adjustment for certain capital actions.
Rights do not carry any dividend entitlements or voting rights prior to vesting. Shares allocated upon vesting carry the same rights as any other Orora share. For
DSR and PR, forfeiture and clawback provisions apply for behaviour contrary to Orora’s values or any actions that bring the Group or any company within the
Group into disrepute. If employment ceases due to resignation or dismissal, any unvested DSR or PR will lapse. If employment ceases due to other reasons, the
Board has discretion with respect to unvested Rights, including to lapse any unvested DSR or PR fully or partially.
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3.2. Target remuneration mix and delivery
Orora’s executive remuneration framework provides an appropriate mix of short, medium and long-term incentives to attract, motivate
and retain talent and to drive high performance. Delivering a significant portion of remuneration in equity (1/3 of STI delivered as DSR
deferred over two years and LTI delivered as PR subject to a three-year performance period and an additional one-year employment
holding lock) aligns the interests of executives and shareholders.
MD & CEO[1]
Other Executive KMP
LTI
29%
STI
29%
FR
42%
LTI
32%
STI
23%
FR
45%
(1)
For FY23, the proportion of FR, STI and LTI will be 37%, 26% and 37% respectively for the MD and CEO.
Delivering a significant portion of remuneration as equity over a four-year period reinforces executive focus on achieving long-term
objectives and creating sustainable value for shareholders.
July 2021
June 2022
June 2023
June 2024
June 2025
Fixed remuneration
Delivered as cash
Short-term incentive
2/3 delivered as cash
1/3 delivered as DSR with a 2-year vesting period(1)
Long-term incentive
Delivered as PR with a 3-year performance period and an additional one year holding lock(1)
Performance period with EPS and RTSR hurdles
(1)
The grants to the CEO are awarded post shareholder approval at the 2021 AGM (for LTI) and 2022 AGM (for STI). The award is due to vest in August 2025.
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4. Relationship between performance and remuneration outcomes
4.1. Performance framework
Orora’s executives are rewarded for annual performance against challenging business plans as well as longer-term returns for
shareholders. Financial and non-financial performance measures that align with the key priority areas for the Group are carefully selected
by the Board at the start of the financial year. The performance measures selected for FY22 are summarised below:
Performance overlay:
Safety overlay:
Impacts individual
STI by 20%
If not met, may reduce
STI award by 10%
Group earnings
(60% weight)
Group asset
management
(10% weight)
Considers ’how’ the
performance was
achieved
Performance against
key safety metrics
Earnings before
interest and tax
(EBIT)
Average working
capital as a % of
sales
Individual strategic
measures
(30% weight)
Individual strategic
measures
Overall
outcome
Total performance
4.2. Performance outcome
Achievement against the performance measures both at a Group and individual level is assessed every six months by the Human
Resources Committee (HRC), which provides recommendations to the Board. At the end of the financial year the Board determines
the STI outcome for executives based on their performance against the agreed measures.
The STI assessment includes a number of financial and non-financial metrics (at a Group and individual level).
Significant items (both positive and negative) are assessed each year by the Board to determine whether any significant items should be
included in the STI assessment, and in the past have been generally excluded for the purpose of measuring performance for STIs as they
are not part of ordinary trading results. There were no significant items excluded when determining STI assessments for FY22.
At the end of the financial year, the HRC reviews Group performance against the LTI performance hurdles to confirm the vesting outcome
of any PR that have completed their performance period. The HRC also assesses if there are any significant Group or individual
performance factors that require the Board to apply discretion to claw back previously granted equity or reduce the quantum of LTI to
be granted.
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4.2. Performance outcome (continued)
An overview of the performance measures for FY22 and achievement against these measures is summarised below.
KPI
Group earnings
Earnings Before Interest and Tax (EBIT)
Group asset management
Average working capital (AWC) as a % of sales
Individual strategic measures
Performance measures vary for each role and support
Orora’s strategy of expanding and optimising Group
outcomes while delivering our sustainability goals
(‘Our Promise to the Future’)
Safety overlay
Performance and leadership against a selection of
key safety metrics
Performance overlay
The Board also considers:
•
•
if performance was aligned to Orora’s values.
if the Executive was proactive in overcoming
challenges in the delivery of the final outcome.
• what their individual contribution was to the
Group performance.
Performance commentary
Outcome
The focused execution of strategic priorities has
led to a 12.7% increase in constant currency
underlying EBIT and reported underlying EPS of
21.7 cents — growth of 28.2% before significant
items.
Exceeded maximum
AWC continued to be a priority and the result for
the financial year ended 30 June 2022 was
6.6%, better than the medium/long-term goal of
being less than 10%.
Exceeded target
Performance outcomes varied for executives
with assessments ranging from partially
achieved to fully achieved.
Varied for each executive
Safety results for the financial year ended 30
June 2022 were disappointing and an overlay
was applied where appropriate.
A number of initiatives were launched across
the business to address safety performance.
The Board considered how the executives
achieved performance and was satisfied that
the STI outcomes were appropriate, and no
further performance overlay was necessary.
5% reduction in outcome for
executive KMP; varied for
other executives
No overlay applied
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4.3. Group financial performance (total operations)
The table below summarises the key indicators of Orora’s performance and relevant shareholder returns for the five years to 30 June
2022. The table below shows total operations of the Group including the Australasian Fibre business which was divested during the FY20
financial year, and which is presented in the Financial Report as a discontinued operation.
Financial summary for year ended 30 June
EBIT ($m)
Dividends per ordinary share (cents)
Closing share price (as at 30 June)
EPS growth (%)
NPAT ($m)
TSR (%)[C]
Operating cash flow ($m) [D]
RoAFE (%)[E]
2022(A)
285.5
16.5
$3.65
28.2%
187.1
18.4%
272.6
22.4%
2021(B)
249.1
14.0
$3.33
(2.3%)
156.7
32.6%
246.0
19.9%
2020(B)
288.2
12.0
$2.54
(22.9%)
167.3
(13.4%)
57.9
12.0%
2019(B)
335.2
13.0
$3.24
3.7%
217.0
(5.6%)
268.9
13.0%
2018(B)
323.4
12.5
$3.57
11.5%
214.1
29.0%
325.3
14.0%
(A)
(B)
(C)
EBIT, NPAT, EPS growth and RoAFE exclude the impact of the significant item tax expense amount of $2.4 million recognised upon finalisation of the tax position
of the Australasian Fibre divestment. Refer to note 1.2 of the financial statements for further detail.
EBIT, NPAT, EPS growth and RoAFE exclude the impact of the significant item income and expense items. Details of the significant items excluded from these
measures, for each year in the table above, can be found in the relevant 2018-2021 Annual Reports.
TSR is calculated as the change in share price for the financial year, plus dividends paid during the financial year, divided by the opening share price for the
financial year.
(D) Operating cash flow excludes cash significant items that are considered to be outside the ordinary course of operations and non-recurring in nature but includes
non-growth net capital expenditure.
RoAFE is calculated as Earnings Before Income and Tax (EBIT) excluding significant items divided by average funds employed.
(E)
4.4. Remuneration changes for FY23
Reflecting the overall performance of the Company, along with total compensation outcomes, the Board awarded Executive KMP a 2.5%
increase in fixed remuneration, in line with market increases in FY22. A minor adjustment was made in July 2022 for Executive KMP to
align their superannuation with the increased Superannuation Guarantee rate effective 1 July 2022.
In determining remuneration for executives, Orora considers market relativity, skills, experience and past performance. Remuneration is
reviewed annually and approved by the Board. For Australia based executives, Orora uses ASX-listed companies of a similar size
(assessed by market capitalisation) and industry for comparison. For US based executives, Orora uses both ASX-listed companies and
NYSE/NASDAQ-listed companies of a similar size and industry for comparison. For FY23, on reviewing market data and considering the
overall performance of the Company, the Board has decided that the CEO will receive a fixed remuneration increase of 3.5%, in line with
market increases, and the CFO will receive a fixed remuneration increase of 7.5%, to position his total remuneration at a market
competitive level.
The Board also considered it appropriate to Increase the LTI for the CEO from 70% to 100% of FR. This change aligns CEO pay with market
pay levels for similar organisations and also supports Orora's focus on delivering long-term growth. When the CEO took office in 2019, his
total fixed remuneration and target LTI award were set lower than his predecessor, which the Board determined at the time was
appropriate for a new appointee. The Board now considers it appropriate to increase the target LTI award for the CEO to the same level as
his predecessor. Executive focus on medium to long-term returns is reinforced by delivering a larger proportion of remuneration in the
form of equity which vests after four years. For FY23, equity represents more than 45% of total target remuneration for the CEO which
further enhances the alignment between executive and shareholder long-term interests.
4.5. Short-term incentive outcomes
FY22 STI award
An overview of Orora’s performance measures for FY22 and achievement against these measures can be found in Section 4.2. Orora’s
EBIT and AWC performance for FY22 exceeded the targets set by the Board. The FY22 STI outcomes reflect Orora’s resilience, improved
execution of strategy and financial discipline despite ongoing challenging conditions. After considering individual and business
performance against the financial and non-financial targets set by the Board, STI payments were paid as per the table below.
Executive KMP
Target STI
as % of FR
Maximum STI
as % of FR
$
% of FR
Cash STI ($)
DSR ($)
# of DSR
% of maximum
STI forfeited
B P Lowe
S C Hughes
70%
50%
100%
75%
1,197,680
494,330
93.3%
71.3%
798,455
329,554
399,225
164,776
108,485
44,776
6.7%
4.9%
(1)
The cash and DSR will be granted in September 2022. DSR allocations are determined based on the volume-weighted average price of the Company’s shares for
the five trading days prior to 30 June 2022 ($3.68 per share).
STI awarded[1]
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STI award due to vest in FY22 and FY23
DSR awarded as part of the STI payment for the financial year ending 30 June 2019 vested in September 2021. The Board did not identify
any performance or conduct factors that would warrant lapsing of unvested equity. Accordingly, the Board approved full vesting of the
FY19 DSR.
DSR awarded as part of the STI payment for the financial year ended 30 June 2020 are due to vest in September 2022. The Board did not
identify any performance or conduct factors that would warrant lapsing of unvested equity. Accordingly, the Board approved full vesting
of the FY20 DSR. For this equity to vest, the executive must remain employed until the vesting date (September 2022).
4.6. Long-term incentive outcomes
FY22 LTI award
Details of the Executive KMP LTI opportunity and the actual award for FY22 are provided below:
Executive KMP
LTI as % of FR # of units granted
Face value of grant[1]
Performance hurdles associated with the grant
B P Lowe
70%
273,847
922,864
S C Hughes
70%
148,066
460,485
50% CAGR EPS with minimum RoAFE gateway of 15.0%.
50% Relative Total Shareholder Return (TSR) with an absolute TSR
gateway.
A one-year employment holding lock applies before vesting until
31 August 2025.
Refer to Section 3.1 for further details.
(1)
Face value of grant reflects the share price at the date the award was granted. The award for Mr Lowe was granted on 5 November 2021 ($3.37 per share), for
Mr Hughes the award was granted on 30 September 2021 ($3.11 per share).
LTI tested in FY22 and vesting in FY23
The FY19 grant was delivered as PR and Share Options (SO) with 100% of SO and 1/3 of PR subject to the EPS hurdle with RoAFE gateway
and 2/3 of PR subject to the RTSR hurdle with ATSR gateway. Refer to Section 6.3 for a more detailed explanation of the hurdles used and
the vesting schedule. The performance period for the grant commenced on 1 July 2018 and concluded on 30 June 2022 and this grant is
due to vest in August 2022. The results are outlined below:
Performance hurdles and gateways
Result
Proportion vested
Proportion lapsed
RoAFE gateway
EPS hurdle
ATSR gateway
RTSR hurdle
Achieved
Partially achieved (6.5 %)
Achieved
Partially achieved (70th percentile)
N/A
81.6%
N/A
90%
18.4%
10%
As the performance hurdles were partially met, 85.8% of the FY19 LTI grant vested. During the end of the year review, the Board did not
identify any individual or Company performance or conduct factors that would warrant lapsing of any unvested LTI.
LTI tested in FY22 and vesting in FY24
The FY20 grant was delivered as PR with a three-year performance period and an additional one-year employment holding lock for
vesting. 50% of the PR are subject to the EPS hurdle with RoAFE gateway and 50% are subject to the RTSR hurdle with ATSR gateway.
Refer to Section 6.3 for a more detailed explanation of the hurdles used and the vesting schedule. The performance period for the grant
commenced on 1 July 2019 and concluded on 30 June 2022 and this grant is due to vest in August 2023 at the conclusion of the
one-year holding lock. The results are outlined below:
Performance hurdles and gateways
Result
Proportion eligible to vest at
the end of the employment
holding lock
Proportion lapsed
RoAFE gateway
EPS hurdle
ATSR gateway
RTSR hurdle
Achieved
Achieved (8.3%)
Achieved
Achieved (82nd percentile)
N/A
100%
N/A
100%
0%
0%
As the performance hurdles were fully met, 100% of the FY20 LTI grant is eligible to vest in August 2023 at the end of the one-year
employment holding lock.
ORORA LIMITED ANNUAL REPORT 2022
59
DIRECTORS’ REPORT
Remuneration
report
4.7. Total remuneration realised by Executive KMP during FY22
The table below summarises the remuneration realised by Executive KMP during the performance periods ended 30 June 2021 and 30
June 2022. This table has been included to increase transparency and provide shareholders greater clarity around remuneration
outcomes. This table differs from the statutory remuneration table in Section 6.2, which presents remuneration in accordance with
accounting standards.
Remuneration realised by Executive KMP for FY21 and FY22 is explained below.
Remuneration component
Description
Fixed
Remuneration (FR)
Cash Short-Term
Incentive (STI)
Deferred Share Rights
(DSR)
Performance Rights
(PR)
• Comprises cash salary and contribution to retirement benefits for the relevant year.
• Comprises the cash component of the STI earned in the relevant year which is paid after the issuance of the
relevant financial year’s annual report.
• Represents the value of DSR that were awarded as part of STI in previous years and vested in the relevant
year. For 2022, this comprises the value of DSR awarded as part of the STI payment for the financial year
ended 30 June 2019 that vested in September 2021. For 2021, this comprises the value of DSR awarded as
part of the STI payment for the financial year ended 30 June 2018 that vested in September 2020.
• Represents the value of equity tested at the end of the performance period to 30 June and vesting is
approved by the Board. The value is based on the VWAP on the ASX for the five trading days up to and
including 30 June of the relevant year. The actual value realised will depend on the share price at exercise.
For this equity to vest, the executive must remain employed until the vesting date (and to the end of any
applicable employment holding lock periods). For 2022, this comprises the value of FY19 LTI that partially
vested. For 2021, this comprises the value of FY18 LTI that did not vest.
Executive KMP
Year
Fixed Remuneration
Cash STI
DSR[1]
PR[2]
SO[3]
Total remuneration
B P Lowe
S C Hughes[4]
2022
2021
2022
2021
1,275,347
1,250,000
689,566
480,683
798,453
833,335
329,553
239,217
10,275
64,465
-
-
322,500
19,951
-
-
-
-
-
-
2,426,526
2,147,800
1,019,119
719,900
Incentives realised
(1)
(2)
(3)
(4)
The value of DSR was calculated using the VWAP on the ASX for the five trading days up to and including the vesting date. The VWAP for the DSR award that
vested during the period was $3.40 per share (2021: $2.27 per share).
The value of PR was calculated using the VWAP on the ASX for the five trading days up to and including the end of the performance period. The VWAP for
30 June 2022 was $3.68 per share (2021: $3.28 per share).
The value of the SO was calculated using the VWAP on the ASX for the five trading days up to and including the end of the performance period less the exercise
price of $3.58. The VWAP for 30 June 2022 was $3.68 per share (2021: $3.28 per share).
S C Hughes was appointed CFO effective 15 October 2020 and was designated as a KMP from this date. The employee benefits for Mr Hughes in the comparative
period therefore represent the period 15 October 2020 to 30 June 2021.
60
ORORA LIMITED ANNUAL REPORT 2022
DIRECTORS’ REPORT
Remuneration
report
5. Non-Executive Director remuneration
The NED fee policy enables the Company to attract and retain high-quality Directors with relevant experience. The fee policy is reviewed
annually by the HRC. In setting and reviewing NED fees, the HRC considers fees paid by comparable companies and the qualifications and
experience necessary for the role, and provides recommendations to the Board.
NED receive a base fee for being a Director of the Board, and additional annual fees for either chairing the Audit, Risk and Compliance
Committee (ARCC) ($25,000), HRC or Safety, Sustainability & Environment Committee (SSEC) ($20,000). Where a NED is not a Chair of a
Committee, an additional $20,000 is paid for membership of two Committees, being membership of the ARCC, HRC and/or SSEC. No
additional fees are payable to the Chair of the Board for membership of Committees or other NEDs if they are already remunerated for
Chairing the ARCC, HRC or SSEC. No additional fees are paid for Chairing or membership of the Executive or Nomination Committees.
The current NED aggregate fee limit is $1,900,000 as approved by shareholders at the 2015 Annual General Meeting. No increase was
made to fixed-base fees or Committee fees, during the financial year ended 30 June 2022.
A minor adjustment (0.5%) was made in July 2022 to superannuation for all NEDs located in Australia to align with the increased
Superannuation Guarantee rate effective 1 July 2022.
NEDs do not receive performance-based remuneration and are not granted equity instruments by Orora as part of their remuneration.
6. Additional required disclosures
6.1. Remuneration governance
The Board maintains overall accountability for the oversight of Orora’s remuneration approach for all Orora executives and NEDs, having
regard to the recommendations made by the HRC. The HRC reviews and makes recommendations to the Board on NED and executive
remuneration and at-risk remuneration policies for all Orora executives taking into account business strategy, corporate governance
principles, market practice and stakeholder interests. More information on the Board’s role and Orora’s corporate governance policies for
KMP (including minimum shareholding, share trading, and the prohibition of hedging or margin lending in respect of Orora securities) can
be found on Orora’s website at: https://www.ororagroup.com/investors/policies-and-standards.
During the reporting period, the HRC did not receive any remuneration recommendations (as defined by the Corporations Act 2001) from
external consultants.
ORORA LIMITED ANNUAL REPORT 2022
61
DIRECTORS’ REPORT
Remuneration
report
6.2. Statutory remuneration disclosures
Executive KMP remuneration
Details of the Executive KMP remuneration prepared in accordance with statutory requirements and accounting standards during the
reporting period are given in the table below.
Executive KMP
Year
Base salary
benefits[1] Superannuation
Cash STI
Other
Long service
leave
Share-based
payments
(DSR/PR/SO)[2]
Total
remuneration
Performance
related
remuneration
B P Lowe
2022
2021
S C Hughes[3]
2022
S G Hutton[4]
2021
2021
1,239,710
1,228,306
701,180
465,234
-
-
-
-
23,568
798,453
21,694
833,335
23,568
329,553
15,449
239,217
336,653
342,612
21,694
-
49,340
25,300
16,547
8,908
6,872
830,513
229,340
243,355
99,847
(415,498)
2,941,584
2,337,975
1,314,203
828,655
292,333
55.4%
45.5%
43.6%
40.9%
-
(1)
(2)
(3)
(4)
Other benefits include costs associated with employment (inclusive of any fringe benefits tax) and include notice period payments.
The value of the share-based payments represents the accounting fair value of restricted shares, options, rights and performance rights granted, collectively
referred to as the ‘grants’. In accordance with the Accounting Standards the accounting fair value of the grants is recognised proportionally over the grant’s
performance period. The amounts above represent management’s best estimate, at the date of this report, of the likelihood that the performance conditions of
the grants being met and will therefore vest, at which point the Executive KMP will be entitled to receive the share-based payment. If the performance
conditions are not met, the Executive KMP will not be entitled to the share-based payment. The comparative period value of share-based payments includes
negative amounts relating to options and rights that did not vest during the period as non-market conditions were not met and for rights that were forfeited on
retirement.
S C Hughes was appointed CFO effective 15 October 2020 and was designated as a KMP from this date. The employee benefits for Mr Hughes in the comparative
period therefore represent the period 15 October 2020 to 30 June 2021.
S G Hutton retired as CFO on 15 October 2020 and ceased to be designated as a KMP from this date. The employee benefits above for Mr Hutton represent the
period 1 July 2020 to 31 December 2020 which includes his notice period. Mr Hutton remained an employee during his notice period to assist the transition of
the new Chief Financial Officer but he was not a KMP.
NED remuneration
Details of the NED remuneration during the reporting period are given in the table below.
NED
A R H Sindel
A P Cleland
M A Fraser[1]
T J Gorman
S L Lewis
J L Sutcliffe
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Base and Committee fees
Superannuation benefits
Total remuneration
396,606
396,606
210,868
210,868
52,477
-
230,900
230,900
215,434
215,434
210,868
210,868
23,568
21,694
21,087
20,032
5,248
-
-
-
21,543
20,466
21,087
20,032
420,174
418,300
231,955
230,900
57,725
-
230,900
230,900
236,977
235,900
231,955
230,900
(1) M A Fraser was appointed as a Director on 1 April 2022. The above remuneration represents the period from 1 April 2022 to 30 June 2022.
62
ORORA LIMITED ANNUAL REPORT 2022
DIRECTORS’ REPORT
Remuneration
report
6.3. Terms of equity grants
Performance Rights granted from FY20
The FY20 and FY21 PR were granted consistent with the terms described in Section 3.1.
PR subject to an EPS hurdle must first meet a minimum RoAFE gateway to vest. RoAFE is calculated as EBIT excluding significant items
divided by the average funds employed in each financial year at the 30 June testing date. EPS measures the earnings generated by the
Group attributable to each Orora share. EPS is calculated based on the net profit after tax (NPAT) excluding significant items calculated
on a constant currency basis for the relevant financial year divided by the weighted average number of Orora shares on issue.
The growth in the Group’s EPS over the relevant performance period will be calculated as the increase in audited EPS over the base EPS
(the normalised EPS outcome for the previous financial year). The compound growth in EPS will be expressed as a cumulative percentage.
If the RoAFE gateway is not met in the relevant performance period, all PR subject to the EPS hurdle will lapse. If the RoAFE gateway is
met, the PR subject to the EPS hurdle will vest in accordance with the vesting schedule below.
RTSR measures the growth in the Group’s share price together with the value of dividends declared and paid or any other returns of
capital during the performance period against companies ranked 50 to 150 on the S&P/ASX index as at the start of the performance
period.
The share price used to calculate the TSR of the Group and each of the comparator companies for the performance period will be
measured as follows:
•
•
the opening share price is the VWAP on the ASX for the final 20 trading days of the previous financial year for PR granted from FY22.
For the FY20 and FY21 grants, the opening share price is the VWAP on the ASX for the final five trading days of the previous financial
year.
the closing share price is the VWAP on the ASX for the final 20 trading days of the performance period.
PR subject to the RTSR hurdle must first meet a minimum ATSR gateway to vest. The ATSR gateway is a condition that Orora’s TSR over
the performance period must not be negative. If the ATSR gateway is not met in the relevant performance period, all PR subject to the
RTSR hurdle will lapse. If the ATSR gateway is met, the PR subject to the RTSR hurdle will vest in accordance with the vesting schedule
below.
% CAGR in EPS over
performance period
% of PR subject to EPS
hurdle that will vest
Below 4%
4%
Between 4% and 8%
0%
50%
RTSR over
performance period
Below 50th percentile
50th percentile
% of PR subject to RTSR hurdle that
will vest
0%
50%
Pro-rata straight line vesting will
occur between 50% and 100%
Between 50th and 75th percentile
Pro-rata straight line vesting will
occur between 50% and 100%
8% or higher
100%
75th percentile or higher
100%
Orora engages the services of an independent external provider to calculate TSR performance.
Performance Rights and Share Options granted prior to FY20
PR granted in FY19 had similar terms to the FY20 grant. The main differences between the grants are:
• The FY19 grant had a four-year performance period.
• Grants were delivered as PR and SO with 100% of SO and 1/3 of PR subject to the EPS hurdle with RoAFE gateway and 2/3rd of PR
subject to the RTSR hurdle with an ATSR gateway.
• The comparator group used for the RTSR hurdle are companies ranked 30 to 130 on the S&P/ASX index as at the start of the
performance period.
Rebased FY19 and FY20 Long-Term Incentive performance hurdles and gateways
On 30 April 2020, Orora completed the sale of its Australasian Fibre business to a wholly owned subsidiary of Nippon Paper Industries
Co., Limited. The subsequent capital return and share consolidation approved by shareholders, required the Orora Board to consider any
potential impact on Orora’s employee equity incentive plans, under the rules governing those plans, to minimise or eliminate any resulting
material advantage or disadvantage to employees. The Board determined there would be no change to PR, but the options on foot would
be restructured. The restructure did not result in a material change to the quantum or exercise price of options awarded.
As indicated in the 2020 Remuneration Report, to ensure fair and equitable treatment to employees aligned to shareholders’ interests,
the Board exercised its discretion to re-base the EPS calculation for LTI grants with a vesting date of August 2021 and beyond to exclude
the divested Australasian Fibre business. In October 2020, the Board reviewed the performance hurdles and gateways associated with
the LTI plan and reset the RoAFE gateway and base EPS to an appropriate level for continuing businesses. The RoAFE gateway was reset
from 12.5% to 15% for grants prior to FY21 to balance performance targets for the continuing businesses with the need to find new
growth opportunities. The RoAFE gateway for the FY21 grant remained at 12.5%. The base EPS was reset to 16.5 cents (from 17.4 cents)
and 17.2 cents (from 18.0 cents) for the FY19 and FY20 grants respectively to reflect the size of Orora’s continuing businesses. There
was no change made to the vesting schedule or the performance thresholds required for vesting.
There was no change made to the ATSR gateway and RTSR hurdle.
ORORA LIMITED ANNUAL REPORT 2022
63
DIRECTORS’ REPORT
Remuneration
report
6.4. Options and Rights over equity instruments
The table below shows the DSR, PR and SO held by Executive KMP during the reporting period. Any rights that vest will automatically be
exercised at no cost on or around the time that Orora notifies the participant of vesting. During the period no share options vested nor
were any exercised by the Executive KMP.
Type of
equity
Grant
date
Number
granted
First date
exercisable
Expiry
date
Number
%
Number
%
Number
Fair value
at grant
Exercise
price
Vested
Lapsed
Unvested
B P Lowe[1]
27/08/2021
127,032 01/09/2023 01/09/2023
15/09/2020
70,640 01/09/2022 01/09/2022
-
-
-
-
13/09/2019
3,022 01/09/2021 01/09/2021
3,022
100%
5/11/2021
273,847 31/08/2025 31/08/2025
28/10/2020
339,147 30/08/2024 01/09/2024
22/11/2019
270,900 31/08/2023 01/09/2023
22/10/2018
100,500 31/08/2022 30/08/2022
20/10/2017
122,000 30/08/2021 30/08/2021
22/10/2018
244,500 30/8/2022 30/08/2027
20/10/2017
465,500 30/08/2021 30/08/2026
S C Hughes
DSR
27/08/2021
36,466 01/09/2023 01/09/2023
30/09/2021
148,066 30/06/2025 01/09/2025
06/11/2020
183,000 30/06/2024 01/09/2024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
127,032
70,640
-
- 273,847
- 339,147
- 270,900
-
100,500
122,000
100%
-
-
- 244,500
-
-
-
-
-
-
- 465,500
100%
-
-
-
-
-
-
-
-
-
-
36,466
148,066
183,000
$3.13
$2.14
$2.65
$2.27
$1.81
$2.23
$1.91
$2.36
$0.38
$0.63
$3.13
$1.99
$1.78
-
-
-
-
-
-
-
-
$3.58
$2.86
-
-
-
B P Lowe was appointed Managing Director and Chief Executive Officer effective 1 October 2019 and was designated a KMP from this date. Grants prior to this
date relate to his previous roles.
DSR
DSR
DSR
PR
PR
PR
PR
PR
SO
SO
PR
PR
(1)
64
ORORA LIMITED ANNUAL REPORT 2022
DIRECTORS’ REPORT
Remuneration
report
6.5. Shareholdings
To strengthen alignment of the interests of Orora’s executives and NEDs with shareholders, there is a minimum shareholding requirement
(MSR).
Executive KMP shareholdings
The CEO and other executives are required to build and maintain a shareholding equivalent to 100% and 50% of FR respectively within six
years of their appointment. Once the relevant MSR has been attained, executives must not dispose of Orora equity granted as incentive
on or after 1 January 2014, where it will result in them holding less than the MSR.
Executive
B P Lowe
S C Hughes
Balance on
1 July 2021
Received on
exercise of grant
Shares acquired during
reporting period
Shares disposed of
during reporting period
Closing balance on
30 June 2022
Value of total holdings
as a % of FR
538,634
55,000
3,022
-
1,000
50,000
-
-
542,656
105,000
156.7%
56.1%
Non-Executive Director shareholdings
The Board resolved in August 2020 to adopt an updated Board Charter that, amongst other things, specifies that Non-Executive Directors
will be expected to purchase Orora shares (at times when they are permitted to trade) to achieve a shareholding equivalent in value to
one year’s base fee remuneration within five years of joining the Board, or going forward, for existing NED, and thereafter to maintain at
least that level of shareholding throughout their tenure.
NED
A R H Sindel
A P Cleland
M A Fraser
T J Gorman
S L Lewis
J L Sutcliffe
Balance on
1 July 2021
Shares acquired during
reporting period
Shares disposed of
during reporting period
Closing balance on
30 June 2022
Value of total holdings
as a % of base fees
140,000
128,574
-
56,000
91,705
131,355
-
2,058
55,000
-
2,130
-
-
-
-
-
-
-
140,000
130,632
55,000
56,000
93,835
131,355
130.0%
228.1%
86.9%
89.3%
160.4%
229.4%
6.6. Executive KMP service agreements
The details of the contract terms for the Executive KMP are disclosed:
Type of contract
Permanent ongoing
Notice period
six months
Termination payment
Greater of amount payable required by law
and payments in lieu of notice (total termination
payment must not exceed 12 months’ FR)
6.7. Transactions with KMP
No other transactions occurred between KMP and the Group during the reporting period.
6.8. Loans to KMP or related parties
No loans to KMP or related parties were provided during the reporting period.
ORORA LIMITED ANNUAL REPORT 2022
65
DIRECTORS’ REPORT
Directors’
declaration
This Directors’ report is made in accordance with a resolution of the Directors.
A R SINDEL
CHAIR
18 August 2022
66
ORORA LIMITED ANNUAL REPORT 2022
Auditor’s independence
declaration
ORORA LIMITED ANNUAL REPORT 2022
67
Financial
report
This is the financial report of Orora Limited
(the Company) and its subsidiaries
(collectively referred to as the Group).
The financial report has been prepared in a
style that attempts to make the report less
complex and more relevant to
shareholders. The note disclosures have
been grouped into a number of sections
with each section also including details of
the accounting policies applied in
producing the relevant note, along with
details of any key judgements and
estimates used.
Notes to the financial statements provide
information required by statute,
accounting standards or Listing Rules to
explain a particular feature of the
financial statements. The notes which
follow also provide explanation and
additional disclosures to assist readers in
their understanding and the
interpretation of the Annual Report and
the financial statements.
In this section
Financial statements
68
Notes to the financial statements
74
Financial risk management
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Cash flow statement
69
70
71
72
73
5.1 Market risks
5.2 Credit risk
5.3 Liquidity and funding risk
5.4 Hedging instruments
Group structure
6.1 Principal subsidiary
undertakings and
investments
6.2 Orora Employee Share Trust
Other notes to the
financial statements
7.1 Share-based compensation
7.2 Auditors’ remuneration
7.3 Commitments and contingent
liabilities
7.4 Orora Limited
7.5 Deed of Cross Guarantee
7.6 Related party transactions
7.7 Key Management Personnel
7.8 New and amended
accounting standards
and interpretations
About this report
Results for the year
1.1 Segment results
1.2 Significant items
1.3 Earnings per share (EPS)
1.4
Income
1.5 Operating costs
Capital structure and financing
2.1 Capital management
2.2 Dividends
2.3 Net debt
2.4 Equity
Assets and liabilities
3.1 Trade and other receivables
3.2
Inventories
3.3 Trade and other payables
3.4 Other assets
3.5 Property, plant and equipment
3.6 Leases
3.7
Intangible assets
3.8
Impairment of
non-financial assets
3.9 Provisions
Income tax
4.1
Income tax expense
4.2 Deferred tax balances
74
76
76
80
81
82
83
84
84
85
86
89
93
93
94
95
95
96
97
101
102
104
107
107
108
110
111
116
116
119
122
122
122
123
123
126
126
127
128
131
131
132
68
ORORA LIMITED ANNUAL REPORT 2022
Income
statement
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
$ million
Continuing Operations
Sales revenue
Cost of sales
Gross profit
Other income
Sales and marketing expenses
General and administration expenses
Profit from operations(1)
Finance income
Finance expenses
Net finance costs
Profit before related income tax expense
Income tax expense
Profit from continuing operations
Discontinued Operations(2)
Note
2022
2021
1.1
1.4
1.4
1.5
4.1
4,090.8
(3,318.0)
3,538.0
(2,863.8)
772.8
674.2
3.9
(233.1)
(258.1)
3.6
(201.5)
(265.8)
285.5
210.5
0.6
(27.3)
(26.7)
258.8
(71.7)
187.1
0.2
(33.0)
(32.8)
177.7
(48.0)
129.7
(Loss)/profit from discontinued operations, net of tax
1.2
(2.4)
6.1
Profit for the financial period attributable to the owners of Orora Limited
184.7
135.8
Earnings per share for profit from continuing operations attributable to the ordinary equity holders
of Orora Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit attributable to the ordinary equity holders of Orora Limited(2)
Basic earnings per share
Diluted earnings per share
Cents
Cents
21.7
21.5
21.4
21.2
14.0
13.9
14.6
14.5
1.3
1.3
1.3
1.3
(1)
In the comparative period the profit from continuing operations, includes a significant item expense of $38.6 million (after tax $27.0 million) relating to additional
expected costs associated with the decommissioning of the Petrie site. Refer to note 1.2 for further details of the significant items.
(2) On 30 April 2020, the Group completed the sale of its Australasian Fibre business, accordingly, the financial results of this business are presented separately as a
discontinued operation within this income statement. The earnings per share includes the after-tax net loss on sale of $2.4 million (2021: after-tax net gain $6.1
million) recognised in respect of the sale of the Australasian Fibre business, refer note 1.2. Further details regarding the sale of the Australasian Fibre business
can be found in the 2021 and 2020 Annual Reports.
The above Income Statement should be read in conjunction with the accompanying notes.
ORORA LIMITED ANNUAL REPORT 2022
69
Statement of
comprehensive income
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
$ million
Note
2022
2021
Profit for the financial period
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Cash flow hedge reserve
Unrealised gain on cash flow hedges
Realised (gain)/loss transferred to profit or loss
Realised gains transferred to non-financial assets
Income tax relating to these items
Exchange fluctuation reserve
Exchange differences on translation of foreign operations
Net investment hedge of foreign operations
Other comprehensive income/(expense) for the financial period, net of tax
Total comprehensive income for the financial period attributable to the owners of Orora Limited
Total comprehensive income for the financial period attributable to the owners of Orora Limited arises
from:
Continuing operations
Discontinued operations
2.4.2
2.4.2
2.4.2
184.7
135.8
9.9
(2.5)
(4.6)
(0.8)
31.2
(3.9)
29.3
214.0
216.4
(2.4)
214.0
2.9
5.7
-
(2.4)
(42.9)
7.5
(29.2)
106.6
100.5
6.1
106.6
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
70
ORORA LIMITED ANNUAL REPORT 2022
Statement of
financial position
AS AT 30 JUNE 2022
$ million
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivatives
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Goodwill and intangible assets
Derivatives
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Derivatives
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Other payables
Borrowings
Lease liabilities
Derivatives
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
Equity
Contributed equity and treasury shares
Reserves
Retained earnings
TOTAL EQUITY
Note
2022
2021
2.3
3.1
3.2
5.4
3.4
3.5
3.6
4.2
3.7
5.4
3.4
3.3
2.3
2.3, 3.6
5.4
3.9
3.3
2.3
2.3, 3.6
5.4
4.2
3.9
52.6
561.8
650.8
15.8
26.7
1,307.7
685.2
173.7
16.1
433.2
1.1
91.8
50.6
498.4
399.1
4.2
28.5
980.8
627.5
200.5
26.2
411.2
0.5
77.9
1,401.1
1,343.8
2,708.8
2,324.6
931.2
650.8
35.0
49.7
1.9
17.6
86.9
-
48.0
2.3
16.9
88.3
1,122.3
806.3
5.0
646.6
174.8
-
13.7
14.7
854.8
1.8
503.5
204.8
0.4
6.8
32.4
749.7
1,977.1
1,556.0
731.7
768.6
2.4.1
2.4.2
2.4.3
(37.3)
138.9
630.1
731.7
80.8
107.6
580.2
768.6
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
ORORA LIMITED ANNUAL REPORT 2022
71
Statement of
changes in equity
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
$ million
Balance at 1 July 2020
Net profit for the financial period
Other comprehensive income/(expense):
Unrealised gain on cash flow hedges
Realised losses transferred to profit or loss
Exchange differences on translation of
foreign operations
Deferred tax
Total other comprehensive income/(expense)
Transactions with owners in their capacity
as owners:
Share buyback
Purchase of treasury shares
Proceeds received from employees on
exercise of options
Settlement of options and performance
rights
Share-based payment expense
Dividends paid
Balance at 30 June 2021
Net profit for the financial period
Other comprehensive income/(expense):
Unrealised gain on cash flow hedges
Realised gains transferred to profit or loss
Realised gains transferred to non-financial
assets
Exchange differences on translation of
foreign operations
Deferred tax
Total other comprehensive income
Transactions with owners in their capacity
as owners:
Share buyback
Purchase of treasury shares
Settlement of options and performance
Share-based payment expense
Dividends paid
Balance at 30 June 2022
Note
2.4.3
2.4.2
2.4.2
2.4.1
2.4.1
2.4.1
2.4.1
7.1
2.2
2.4.3
2.4.2
2.4.2
2.4.2
2.4.1
2.4.1
2.4.1
7.1
2.2
Contributed
equity and
treasury
shares
333.6
-
-
-
-
-
-
(256.2)
(0.9)
1.0
3.3
-
-
80.8
-
-
-
-
-
-
-
(109.0)
(12.8)
3.7
-
-
(37.3)
Attributable to owners of Orora Limited
Cash flow
hedge reserve
Share-based
payment
reserve
Demerger
reserve
Exchange
fluctuation
reserve
Retained
earnings
Total
equity
(4.4)
-
2.9
5.7
-
(2.4)
6.2
-
-
-
-
-
-
1.8
-
9.9
(2.5)
(4.6)
-
(0.8)
2.0
-
-
-
-
-
3.8
11.1
132.9
(0.4)
557.4
1,030.2
-
-
-
-
-
-
-
-
-
(3.3)
0.9
-
8.7
-
-
-
-
-
-
-
-
-
(3.7)
5.7
-
10.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(35.4)
-
(35.4)
-
-
-
-
-
-
132.9
(35.8)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27.3
-
27.3
-
-
-
-
-
132.9
(8.5)
135.8
135.8
-
-
-
-
-
-
-
-
-
-
(113.0)
580.2
184.7
-
-
-
-
-
-
-
-
-
-
(134.8)
630.1
2.9
5.7
(35.4)
(2.4)
(29.2)
(256.2)
(0.9)
1.0
-
0.9
(113.0)
768.6
184.7
9.9
(2.5)
(4.6)
27.3
(0.8)
29.3
(109.0)
(12.8)
-
5.7
(134.8)
731.7
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
72
ORORA LIMITED ANNUAL REPORT 2022
Cash flow
statement
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
$ million
Note
2022
2021
Cash flows from/(used in) operating activities
Profit for the financial period from continuing operations
Depreciation and amortisation of finance leased assets
Amortisation of right-of-use assets
Amortisation of intangible assets
Net finance costs
Net loss on disposal of non-current assets
Net gain on disposal of leases
Fair value gain on financial instruments at fair value through income statement
Share-based payment expense
Net impairment losses and other sundry items
Restructuring and decommissioning expense
Income tax expense
Operating cash inflow before changes in working capital and provisions
- (Increase)/decrease in trade and other receivables
- (Increase)/decrease in inventories
- (Increase)/decrease in prepayments and other operating assets
- Increase/(decrease) in trade and other payables
- Increase/(decrease) in provisions
Interest received
Interest and finance costs paid
Income tax (paid)/received
Net cash inflow from continuing operating activities
Net cash used in discontinued operating activities
Net cash inflow from operating activities
Cash flows from/(used in) investing activities
Granting of amounts to associated companies and other persons
Government grant received
Payments for acquisition of controlled entities and businesses, net of cash acquired
Payments for property, plant and equipment and intangible assets
Proceeds on disposal of non-current assets
Net cash flows used in continuing investing activities
Net cash flows from discontinued investing activities(1)
Net cash flows used in investing activities
Cash flows from/(used in) financing activities
Proceeds from exercise of employee share options
Share buyback
Payments for treasury shares
Proceeds from borrowings(2)
Principal lease repayments
Dividends paid and other equity distributions
Net cash flows used in continuing financing activities
Net cash flows from discontinued financing activities
Net cash flows used in financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial period(3)
1.5
1.5
1.5
7.1
1.2
2.4.1
2.4.1
2.4.1
2.2
2.3
187.1
64.4
44.6
8.9
26.7
1.3
(2.5)
(0.4)
5.7
22.8
-
71.7
430.3
(52.7)
(239.2)
(5.5)
220.6
(12.9)
340.6
0.1
(27.7)
(55.4)
257.6
-
129.7
68.1
44.2
7.9
32.8
1.9
-
(0.2)
0.9
24.4
38.6
48.0
396.3
(81.5)
(17.9)
17.1
12.0
(24.4)
301.6
0.2
(32.7)
1.5
270.6
-
257.6
270.6
(3.9)
5.0
-
(92.2)
0.5
(90.6)
(9.3)
(99.9)
-
(109.0)
(12.8)
150.1
(49.3)
(134.8)
(155.8)
-
(155.8)
1.9
50.6
0.1
52.6
(0.1)
-
(1.9)
(57.1)
1.9
(57.2)
20.7
(36.5)
1.0
(256.2)
(0.9)
131.8
(48.9)
(113.0)
(286.2)
-
(286.2)
(52.1)
107.3
(4.6)
50.6
(1) Net cash flows from discontinued investing activities in the current period represents payments for the settlement of amounts already provided for relating to the
sale of the Australasian Fibre business. In the comparative period, the cash flows represent net receipts received on finalisation of the post-close completion
process of the sale. Further details regarding the sale of the Australasian Fibre business can be found in the 2021 and 2020 Annual Reports.
(2) Short-term draw downs and repayments of facilities are presented net within the financing activities of the cash flow statement.
(3) For the purpose of the cash flow statement, cash and cash equivalents includes cash on hand and at bank and short-term money market investments, net of
outstanding bank overdrafts. Refer to note 2.3 for details of the financing arrangements of the Group.
The above cash flow statement should be read in conjunction with the accompanying notes.
ORORA LIMITED ANNUAL REPORT 2022
73
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
About this report
Orora Limited (the Company) is a for-profit entity for the
purposes of preparing this financial report and is domiciled in
Australia. The Company and its subsidiaries (collectively referred
to as the Group) are primarily involved in the manufacture and
supply of packaging products and services to grocery, fast
moving consumer goods and industrial markets.
This financial report is a general purpose financial report which:
• has been prepared in accordance with Australian Accounting
Standards (AASBs), including Australian Accounting
Interpretations adopted by the AASB, and the Corporations
Act 2001. The financial report of the Group also complies
with International Financial Reporting Standards (IFRSs) and
Interpretations as issued by the International Accounting
Standards Board (IASB);
• has been prepared under the historical cost basis except for
financial instruments which have been measured at fair
value. Non–derivative financial instruments are measured at
fair value through the income statement;
is presented in Australian dollars with values rounded to the
nearest $100,000 unless otherwise stated, in accordance
with the ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191;
•
• presents reclassified comparative information where
required for consistency with the current period
presentation;
• adopts all new and amended Accounting Standards and
Interpretations issued by the AASB that are relevant to the
operations of the Group and effective for reporting periods
beginning on or after 1 July 2021 (refer note 7.8);
• does not early adopt any Accounting Standards and
Interpretations that have been issued or amended, but are
not yet effective; and
• has applied Group accounting policies consistently to all
periods presented.
This general purpose financial report for the Group for the year
ended 30 June 2022 was authorised for issue in accordance
with a resolution of the Directors on 18 August 2022. The
Directors have the power to amend and reissue the financial
report.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Company and its controlled entities. Details of
the controlled entities (subsidiaries) of the Company are
contained in note 6.1.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that the Group
obtains control until the date that control ceases. The subsidiary
financial statements are prepared for the same reporting period
as the parent company, using consistent accounting policies and
all balances and transactions between entities included within
the Group are eliminated.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting when control is obtained by
the Group.
Foreign currency
Items included in the financial statements of each of the entities
included within the Group are measured using the currency of
the economic environment in which the entity primarily
generates and expends cash (the ‘functional currency’). These
financial statements are presented in Australian dollars, which is
the functional and reporting currency of the Company, Orora
Limited.
Transactions in foreign currencies are initially recorded in the
functional currency of the entity using the exchange rate
prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the
rate of exchange ruling at the balance sheet date. Foreign
exchange gains and losses arising from the translation of the
monetary assets and liabilities, or from the settlement of foreign
currency transactions, are recognised in the income statement,
except when deferred in equity as qualifying cash flow hedges or
net investment hedges. The amounts deferred in equity in
respect of cash flow hedges are recognised in the income
statement when the hedged item affects profit or loss and for
net investment hedges when the investment is disposed of.
As at the reporting date, the assets and liabilities of entities
within the Group that have a functional currency different from
the presentation currency, are translated into Australian dollars
at the rate of exchange at the balance sheet date and the
income statements are translated at the average exchange rate
for the year. The exchange differences arising on the balance
sheet translation are taken directly to a separate component of
equity in the Exchange Fluctuation Reserve.
Judgements and estimates
The preparation of the financial statements requires
management to exercise judgement in applying the Group’s
accounting policies. It also requires the use of estimates and
assumptions that affect the reported amounts of assets,
liabilities, income and expenses.
The areas involving a higher degree of judgement or complexity
are set out below and in more detail in the related notes:
Note
Note 3.6
Leases
Note 3.8
Impairment of non-financial assets
Note 3.9
Provisions
Section 4
Income tax
Note 5.4
Hedging instruments
Note 7.3
Commitments and contingent liabilities
Climate change
The Group's current strategy to manage climate related risk and
opportunity is underpinned by Orora's Circular Economy and
Climate Change pillars of the Group’s Sustainability strategy, Our
Promise to the Future. This strategy focuses on reducing gross
greenhouse gas emissions across the Group and investing in low
emissions technologies and renewable energy sources, as well
as maximising the recycled content of our products to ensure
they can be continually recycled to minimise waste and pollution
and to reduce greenhouse gas emissions.
74
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
The Group has committed to achieve net zero greenhouse gas
emissions by 2050 for Scope 1 and 2 emissions and a 40%
reduction by 2035, both from a FY19 baseline. Under the Circular
Economy pillar, the Group has set a target of 60% recycled
content for Orora glass beverage containers (pre and post-
consumer) by 2025.
Greenhouse gas emissions reduction projects, such as the
upgrade of the G3 glass furnace in Australia to utilise oxyfuel
technology, will move this furnace into the top 10% of energy
efficient furnaces worldwide and will deliver a step change
reduction in the Group's fossil fuel use, nitrogen oxide and carbon
dioxide emissions. The construction of a cullet beneficiation
plant at Gawler in South Australia will significantly increase the
recycled content in the Group's glass beverage packaging in
support of both our Circular Economy goal and our greenhouse
gas emissions reduction goal. The Group has also entered into
long term power purchase agreements to secure renewable
energy supply for volumes equivalent to 80% of the Group’s total
electricity requirements in Australia.
These projects have been incorporated into the forecast cash
flows when assessing impairment indicators of the Group's
assets. Any change to the Group's strategy around climate
change and the circular economy could impact these forecasts
and the Group's significant judgements and key estimates.
Future changes in the Group's climate change strategy, global
regulatory requirements and expectations of customers,
investors and the communities the Group operates within may
impact the Group's significant judgements and estimates and
may result in changes to the financial results and the carrying
values of certain assets and liabilities in future reporting periods.
Other accounting policies
Significant and other accounting policies that summarise the
measurement basis used, and which are relevant to an
understanding of the financial statements are provided
throughout the notes to the financial statements.
Current period significant events
Dividend
During the financial year the Group paid an unfranked FY21 final
dividend of $65.9 million at 7.5 cents per ordinary share and an
unfranked FY22 interim dividend of $68.9 million at 8.0 cents per
ordinary share.
Since 30 June 2022 the Directors have determined a final
dividend for FY22 of $71.9 million, unfranked, of 8.5 cents per
ordinary share. Refer note 2.2 for further details.
Share buyback
On 21 October 2021 the Group announced an on-market share
buyback of issued share capital up to $150.0 million. The
Dividend Reinvestment Plan was suspended while the on-market
buyback was undertaken.
The share buyback ceased on 30 June 2022. During the period
ordinary shares totalling 30,673,993 were purchased on-market
through the share buyback for a total value of $109.0 million,
representing 3.5% of the share capital at the date the share
buyback was announced. Refer note 2.4.
Coronavirus (COVID-19) pandemic
The Group’s response to the COVID-19 pandemic continues to be
guided by local government and health advice across each
jurisdiction in which Orora operates. The Group has maintained a
number of measures to mitigate the effects of COVID-19. The
business continues to prioritise key focus areas including:
safety, health and wellbeing of our people; ensuring continuity
and quality of supply to customers and preserving ongoing
supply chains, and the financial performance of operating units.
Refinancing
During the year ended 30 June 2022, the Group refinanced its
two bilateral facilities. The $35.0 million bilateral facility that
was due to mature in January 2022 was extended to April 2023.
The $50.0 million uncommitted bilateral facility due to mature in
June 2022 was amended to a $100.0 million committed facility
and extended to July 2027. There were no material changes to
the banking syndicate counterparties or commercial terms.
Decommissioning costs
The decommissioning of the Petrie site is progressing, but
continues to be a significant and complex exercise involving
multiple government agencies. During the twelve months to 30
June 2022 $26.5 million was spent on decommissioning the
site. Impacts of the unprecedented rainfall levels in Queensland
are being managed within the existing provisions. The Group
continues to engage a specialist environmental consulting firm
to manage the completion of the remaining remediation works.
The provision at 30 June 2022 (refer note 3.9), represents
management’s best estimate in respect of the anticipated costs
to complete the remediation, using all currently available
information and considering applicable legislative and
environmental regulations.
The notes to the financial statements
The following notes include information which is material and
relevant to the operations, financial position and performance of
the Group. Information is considered material and relevant due to
its size or nature or the information:
•
is important for understanding the Group’s current period
results;
• provides an explanation of significant changes in the Group’s
•
business – for example, business acquisitions; or
it relates to an aspect of the Group’s operations that are
important to its future performance.
The notes are organised into the following sections:
• Results for the year – provides details on the results and
performance of the Group for the year;
• Capital structure and financing – outlines how the Group
manages its capital structure and related financing
activities;
• Assets and liabilities – provides details of the assets used to
generate the Group’s trading performance and the liabilities
incurred as a result;
Income tax – provides information on the Group’s tax position
and the current and deferred tax charges or credits in the
year;
•
• Financial risk management – provides information on how the
Group manages financial risk exposures associated with
holding financial instruments;
• Group structure – explains the characteristics of and
changes within the group structure during the year;
• Other notes to the financial statements – provides additional
financial information required by accounting standards and
the Corporations Act 2001, including details of the Group’s
employee reward and recognition programs and
unrecognised items.
ORORA LIMITED ANNUAL REPORT 2022
75
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 1: Results for the year
In this section
This section focuses on the results and performance of the Group. On the following pages you will find disclosures explaining the Group’s
results for the year, segment information, significant items and earnings per share.
This section also analyses the Group’s profit before tax by reference to the activities performed by the Group and an analysis of key
operating costs. Earnings before significant items, interest and related income tax expense (EBIT) is a key profit indicator for the Group. This
measure excludes discontinued operations and the effects of individual significant non-recurring gains/losses that may have an impact on
the quality of earnings, and reflects the way the business is managed and how the Directors assess the performance of the Group.
1.1. Segment results
The Group’s operating segments are organised and managed according to their geographical location. Each segment represents a
strategic business that offers different products and operates in different industries and markets. The Corporate Executive Team, the
chief operating decision-makers (CODM), monitor the operating results of the business separately for the purpose of making decisions
about resource allocation and performance assessment.
The following summary describes the operations of each reportable segment.
Orora Australasia
This segment focuses on the manufacture of beverage packaging products within Australia and New Zealand. The products
manufactured by this segment include glass bottles, beverage cans and wine closures.
Orora North America
This segment, predominately located in North America, purchases, warehouses, sells and delivers a wide range of packaging and other
related materials. The business also includes integrated corrugated sheet and box manufacturing and equipment sales capabilities, point
of purchase retail display solutions and other visual communication services.
76
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
The results of the reportable segments for the year ended 30 June 2022 and 30 June 2021 are set out below. The following segment
information has been presented for continuing operations only.
$ million
Reportable segment revenue(1)
Reportable segment earnings
Earnings before significant items, interest, tax,
depreciation and amortisation
Depreciation and amortisation
Earnings before significant items, interest and tax
Allocated finance expense - lease liabilities interest
Earnings before significant items, unallocated interest and tax
Australasia
2021
`
2022
North America
2021
2022
Total Reported
2021
2022
909.1
834.1
3,181.7
2,703.9
4,090.8
3,538.0
195.6
197.8
207.8
171.5
403.4
369.3
(45.0)
150.6
(0.6)
150.0
(47.5)
150.3
(0.7)
149.6
(72.9)
134.9
(9.2)
125.7
(72.7)
98.8
(9.8)
89.0
(117.9)
285.5
(9.8)
275.7
(120.2)
249.1
(10.5)
238.6
Capital spend on the acquisition of property, plant and equipment
and intangibles
65.0
34.2
22.2
22.9
87.2
57.1
Receivables
Inventory
Payables
Total reportable segment working capital
Average funds employed(2)
Operating free cash flow(3)
155.3
342.5
(387.5)
110.3
150.3
195.4
(262.7)
83.0
422.4
308.3
(522.7)
208.0
338.9
203.7
(380.7)
161.9
577.7
650.8
(910.2)
318.3
489.2
399.1
(643.4)
244.9
610.8
590.8
664.8
659.7
1,275.6
1,250.5
129.4
129.5
116.2
82.7
245.6
212.2
(1) Represents total revenue from external customers. Across all segments, in accordance with AASB 15 Revenue from Contracts with Customers, the timing of
revenue recognition materially occurs at a point in time, refer note 1.4.
(2) Average funds employed excludes intersegment balances and represents net assets less net debt and assets under construction, at the beginning and end of the
reporting period.
(3) Operating free cash flow represents the cash flow generated from the Group’s operating activities and non-growth capital expenditure activities, including lease
payments but before interest, tax and dividends. In the current period the operating free cash flow of the Australasia segment includes an outflow of $26.5 million
(2021: $28.4 million) representing expenditure on the decommissioning of the Petrie site, refer note 1.2 and 3.9.
ORORA LIMITED ANNUAL REPORT 2022
77
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 1: Results for the year (continued)
1.1. Segment results (continued)
Accounting policies
Segment performance is evaluated based on earnings before significant items, interest and related income tax expense (EBIT). This
measure excludes the effects of significant items which are typically gains or losses arising from events that are not considered part of
the core operations of the business whilst including items directly attributable to the segment as well as those that can be allocated on a
reasonable basis.
Interest income and expenditure and other finance costs, other than interest on lease liabilities, are not allocated to the segments, as
this type of activity is managed at the Group level. Transfer prices between segments are priced on an ‘arms-length’ basis, in a manner
similar to transactions with third parties, and are eliminated on consolidation.
Geographical segments
In presenting information on the basis of geographical location both segment revenue and non-current assets are based on the location
of the Orora business. This information has been presented for continuing operations only.
Revenue
$m
Non-current assets(1)
$m
Revenue by product
$ million
Corrugate and paper-based packaging
Beverage packaging
Traded packaging products
Total sales revenue
(1)
Non-current assets exclude deferred tax assets and non-current financial
instruments.
2022
2021
1,583.5
909.1
1,598.2
1,316.8
834.0
1,387.2
4,090.8
3,538.0
No single customer, within an operating segment, generates revenue greater than 10% of the Group’s total revenues.
78
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Reconciliation of segmental measures
The following segmental measurements reconcile to the financial statements as follows:
Profit before related income tax expense
$ million
Reported segment earnings
Significant items before related income tax (refer note 1.2)
Unallocated net finance costs
Profit before related income tax expense
Capital spend on the acquisition of property, plant and equipment and intangibles
$ million
Reported segment capital spend
Movement in capital creditors
Government grant received included in segment capital spend
Movement in prepaid capital items
Other non-cash adjustments
Acquisition of property, plant and equipment and intangibles for total operations(1)
(1)
Refer notes 3.5 and 3.7, excludes balances acquired through business combinations.
Operating free cash flow
$ million
Reported segment operating free cash flow
Add back capital expenditure activities included in segment operating free cash flow
Add back principal lease repayments included in segment operating free cash flow
Less operating activities excluded from operating free cash flow:
Interest received
Interest and borrowing costs paid
Income tax (paid)/received
Net cash flows from operating activities
2022
2021
275.7
-
(16.9)
258.8
238.6
(38.6)
(22.3)
177.7
2022
2021
87.2
10.0
5.0
(0.6)
18.3
119.9
57.1
1.9
-
1.8
(3.5)
57.3
2022
2021
245.6
212.2
35.9
49.3
0.1
(17.9)
(55.4)
30.0
48.9
0.2
(22.2)
1.5
257.6
270.6
ORORA LIMITED ANNUAL REPORT 2022
79
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 1: Results for the year (continued)
1.1. Segment results (continued)
Working capital
$ million
Reported segment working capital
Add/(less) amounts included in working capital for management reporting purposes:
Derivatives
Add/(less) amounts excluded from working capital for management reporting purposes:
Net capital receivables and payables
Loan receivables and other assets
Other payables
Reconciles to the financial statements as follows:
Trade and other receivables (note 3.1)
Inventories (note 3.2)
Trade and other payables (note 3.3)
Current prepayments (note 3.4)
2022
2021
318.3
244.9
(13.9)
(1.9)
7.3
0.3
(10.8)
301.2
561.8
650.8
(931.2)
19.8
301.2
30.3
0.1
(7.5)
265.9
498.4
399.1
(650.8)
19.2
265.9
1.2. Significant items
Significant items are typically gains or losses arising from events that are not considered part of the core operations of the business.
$ million
Continuing operations
Decommissioning costs
Discontinuing operations
Net (loss)/profit on sale of Australasian Fibre businesses
Total significant item (expense)/income
Decommissioning costs
2022
2021
Before tax
Tax (expense)/
benefit
Net of tax
Before tax
Tax (expense)/
benefit
Net of tax
-
-
-
-
-
-
-
(2.4)
(2.4)
(2.4)
-
-
(2.4)
(2.4)
(2.4)
(38.6)
(38.6)
1.5
1.5
(37.1)
11.6
11.6
4.6
4.6
16.2
(27.0)
(27.0)
6.1
6.1
(20.9)
In the comparative period, following ongoing project review and reassessment of remediation requirements, additional costs associated
with the decommissioning of the former Petrie Mill site of $38.6 million ($27.0 million after-tax) were recognised in respect of estimated
costs to complete. The expense was recognised as a significant item and presented in ‘general and administration’ expense. The Group
continues to engage a specialist environmental consulting firm to manage the completion of the remaining remediation works. The
provision at 30 June 2022 (refer note 3.9), represents management’s best estimate in respect of the anticipated costs to complete the
remediation, using all currently available information and considering applicable legislative and environmental regulations.
Net profit on sale of Australasian Fibre business
During the period a tax expense of $2.4 million was recognised upon finalisation of the tax position of the Australasian Fibre business and
the filing of associated tax returns with tax authorities. In the comparative period an incremental net gain on disposal of $11.3 million
(after tax $12.8 million) was recognised upon the finalisation of the post-close completion accounts, which occurred on 29 September
2020. This gain was offset by the recognition of additional costs and obligations associated with the sale totalling $9.8 million (after tax
$6.7 million). Further details regarding the sale of the Australasian Fibre business can be found in the 2021 and 2020 Annual Reports.
80
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
1.3. Earnings Per Share (EPS)
Earnings Per Share (EPS) is the amount of post-tax profit attributable to each share.
Basic EPS is calculated on the Group profit for the year attributable to ordinary shareholders of the Company of $184.7 million
(2021: $135.8 million) divided by the weighted average number of shares on issue during the reporting period, excluding ordinary shares
purchased by the Company and held as Treasury Shares, being 864.0 million (2021: 928.3 million).
Diluted EPS reflects any commitments made by the Group to issue shares in the future and so it includes the effect of the potential
conversion of share options and rights granted to employees. To calculate the impact it is assumed that all share options and rights are
exercised and new shares are issued.
Basic and Diluted EPS, before significant items, is presented below in order to show the business performance of the Group in a consistent
manner and reflect how the business is managed and measured on a day-to-day basis. It is also a measure that is considered by the Board in
determination of dividend payments.
Calculation of EPS
Calculation of basic and diluted EPS has been based on the following profit attributable to ordinary shareholders and weighted average
number of ordinary shares outstanding.
EPS attributable to the ordinary equity holders of Orora Limited
million
Continuing operations
Profit for the financial period from continuing operations before significant items
Significant items (refer note 1.2)
Discontinued operations
Significant items (refer note 1.2)
Profit for the financial period
Weighted average number of ordinary shares for basic earnings per share
Dilution due to share options and rights
Weighted average number of ordinary shares for diluted earnings per share
Earnings per share for continuing operations
Basic earnings per share
Diluted earnings per share
Basic earnings per share, before significant items
Diluted earnings per share, before significant items
Earnings per share
Basic earnings per share(1)
Diluted earnings per share(1)
Basic earnings per share, before significant items
Diluted earnings per share, before significant items
2022
2021
$187.1
-
$187.1
$156.7
($27.0)
$129.7
($2.4)
$6.1
$184.7
$135.8
864.0
6.2
870.2
928.3
5.3
933.6
21.7c
21.5c
21.7c
21.5c
21.4c
21.2c
21.7c
21.5c
14.0c
13.9c
16.9c
16.8c
14.6c
14.5c
16.9c
16.8c
(1) Earnings per share includes the after-tax net loss on sale of $2.4 million (2021: $6.1 million after-tax net gain) recognised in respect of the sale of the
Australasian Fibre business. Further details regarding the sale of the Australasian Fibre business can be found in the 2021 and 2020 Annual Reports.
ORORA LIMITED ANNUAL REPORT 2022
81
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 1: Results for the year (continued)
1.4.
The information presented in this note is for continuing operations only.
Income
$ million
Revenue from sale of goods
Sub-lease income
Other
Total other income
External interest income
Total finance income
Accounting policies
2022
2021
4,090.8 3,538.0
1.3
2.6
3.9
0.6
0.6
2.5
1.1
3.6
0.2
0.2
The Group generates revenue primarily from the sale of packaging materials and products providing customers with an extensive range of
tailored packaging and visual communication solutions.
The Group provides standard packaging materials to its customers as well as customer specific (made-to-order) packaging products. The
Group also sources and provides packaging equipment/solutions to customers who enter into long-term agreements under bundled
contract arrangements.
Revenue is recognised when control of the goods or services are transferred to the customer and the Group’s right to payment arises.
Revenue is measured on the consideration to which the Group expects to be entitled to in a contract with a customer.
For certain customers the Group provides retrospective rebates once the quantity of product purchased during the period exceeds a
threshold specified in the contract. For contracts that include rebates the amount of revenue recognised is adjusted to the anticipated
rebates payable, which is based on the purchase history of the customer.
Standard packaging products
Customers obtain control of standard packaging products when the goods are delivered to the customer. Invoices are generated at that
point in time with payment terms varying depending on the customer, ranging from 30 to 90 days.
Some contracts allow for volume discounts/rebates.
Made-to-order packaging products
Made-to-order packaging products are usually long-term contracts which contain several elements. In the vast majority of cases these
elements represent only one performance obligation to the customer.
In some cases the Group produces these products in advance of delivery. Typically control over these goods remains with the Group until
shipment, or when the customer takes physical possession of the goods. The right to payment arises only at the point in time when
control over the good is transferred to the customer.
The Group has determined that for made-to-order products the customer obtains control of the products when the goods are delivered to
the customer. This represents the point in time when invoices are generated as the right to payment arises. Payment terms varying
depending on the customer, ranging from 30 to 90 days.
Some contracts allow for volume discounts/rebates.
Bundled packaging solutions
The Group sources and provides packaging equipment/solutions to customers who enter into long term product supply arrangements.
The customer obtains control of the equipment and product when the goods are delivered to the customer. Invoices are generated at that
point in time with payment terms varying depending on the customer, ranging from 30 days to 60 days.
82
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
1.5. Operating costs
The information presented in this note is for continuing operations only.
Employee benefit expense
$ million
Wages and salaries
Workers compensation and other on-costs
Superannuation costs on accumulation funds
Other employment benefits expense
Share-based payments expense
- Options
- Performance rights and other plans
- Grants forfeited and failing to vest
Total employee benefits expense
2022
2021
630.8
35.8
7.1
-
0.1
5.6
-
593.1
30.3
6.6
0.1
0.2
3.3
(2.6)
679.4
631.0
The Group’s accounting policy for liabilities associated with employee benefits is contained in note 3.9, whilst the policy for share-based
payments is set out in note 7.1.
Depreciation and amortisation
$ million
Depreciation
Amortisation of finance leased assets
Amortisation of right-of-use assets
Amortisation of intangibles
Total depreciation and amortisation
Finance expenses
$ million
Interest paid/payable:
- Finance charges on right-of-use assets
- Unwinding of discount
- External interest expense
Total interest paid/payable
Borrowing costs
Total finance expenses
2022
2021
64.3
0.1
44.6
8.9
68.0
0.1
44.2
7.9
117.9
120.2
2022
2021
9.8
0.1
15.6
25.5
1.8
27.3
10.5
-
18.6
29.1
3.9
33.0
Refer to note 3.6 for the Group’s accounting policy and details on right-of-use assets and note 2.3 regarding the Group’s external
borrowings.
ORORA LIMITED ANNUAL REPORT 2022
83
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 2: Capital structure and financing
In this section
This section outlines how the Group manages its capital structure and related financing, including its balance sheet liquidity and access to
capital markets.
The Directors determine the appropriate capital structure of the Group, specifically, how much is raised from shareholders (equity) and how
much is borrowed from financial institutions (debt) in order to finance the Group’s activities both now and in the future. Maintaining capital
discipline and balance sheet efficiency remains important to the Group, as seen through the refinancing activities undertaken during the
year. Any potential courses of action in respect of the Group’s structure take into account the Group’s liquidity needs, flexibility to invest in
the business and impact on credit ratings.
In order to optimise the capital structure, the Group may:
adjust the amount of ordinary dividends paid to shareholders;
•
• maintain a dividend investment plan;
•
•
raise or return capital to shareholders; and
repay or raise debt for working capital and capital expenditure requirements, or to facilitate acquisitions in line with the strategic
objectives and operating plans of the Group.
The Directors consider the Group’s capital structure and dividend policy at least twice a year ahead of announcing results, and do so in the
context of its ability to continue as a going concern, to execute the strategy and to invest in opportunities to grow the business and
enhance shareholder value.
2.1. Capital management
Capital is defined as the combination of shareholders’ equity, reserves and net debt. The key objective of the Group when managing its
capital is to safeguard its ability to continue as a going concern, so that the Group can continue to provide returns for shareholders and
benefits for other stakeholders, and maintain an optimal capital and funding structure.
The aim of the Group’s capital management framework is to maintain an investment grade credit profile, and the requisite financial metrics,
to secure access to alternate funding sources with a spread of maturity dates and sufficient undrawn committed facility capacity. The
Group’s capital management framework also aims to optimise, over the long term and to the extent practicable, the weighted average cost
of capital to reduce the cost of capital to the Group while maintaining financial flexibility.
The Group uses a range of financial metrics to monitor the efficiency of its capital structure, including on-balance sheet gearing and leverage
ratios, and to ensure that its capital structure provides sufficient financial strength to allow it to secure access to debt finance at
reasonable cost. At 30 June 2022, the Group’s gearing and leverage ratios, excluding lease liabilities, were 46.2% (2021: 37.1%) and 1.8
times (2021: 1.5 times), respectively.
2On-market share buyback
On 21 October 2021, the Group announced an on-market share buyback of issued share capital of up to $150.0 million. The buyback
commenced in November 2021. The Dividend Reinvestment Plan was suspended whilst the on-market buyback was undertaken.
The share buyback ceased on 30 June 2022. During the period ordinary shares totalling 30,673,993 were purchased on-market through the
share buyback for a total value of $109.0 million, representing 3.5% of the share capital at the date the share buyback was announced.
$ million
Financial borrowings
Total borrowings
Less: Cash and cash equivalents
Net debt
Lease liabilities
Net debt including lease liabilities
Equity and reserves
Contributed equity and treasury shares
Reserves
Retained earnings
Net Capital
Note
2022
2021
2.3
2.3
2.3
2.4.1
2.4.2
2.4.3
681.6
(52.6)
629.0
224.5
853.5
(37.3)
138.9
630.1
731.7
503.5
(50.6)
452.9
252.8
705.7
80.8
107.6
580.2
768.6
1,585.2
1,474.3
84
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
2.2. Dividends
Declared and paid during the period
For the year ended 30 June 2021
2020 Final dividend (unfranked)
2021 Interim dividend (unfranked)
For the year ended 30 June 2022
2021 Final dividend (unfranked)
2022 Interim dividend (unfranked)
Proposed and unrecognised at period end(1)
For the year ended 30 June 2021
2021 Final dividend (unfranked)
For the year ended 30 June 2022
2022 Final dividend (unfranked)
(1)
Estimated final dividend payable, subject to variations in the number of shares up to record date.
Shareholder distributions – cents per share (excludes special dividends)
Cents per
share
Total
$ million
5.5
6.5
7.5
8.0
7.5
8.5
53.1
59.9
113.0
65.9
68.9
134.8
65.7
71.9
Dividend reinvestment plan
The Group operates a dividend reinvestment plan which allows eligible shareholders to elect to invest dividends in ordinary shares. All
holders of Orora Limited ordinary shares with Australian or New Zealand addresses registered with the share registry are eligible to
participate in the plan. The allocation price for shares is based on the average of the daily volume weighted average share price of Orora
Limited ordinary shares sold on the Australian Securities Exchange, calculated with reference to a period of not less than ten consecutive
trading days as determined by the Directors. The Dividend Reinvestment Plan was suspended whilst the on-market buyback was
undertaken.
Franking account
Franking credits for shareholders of the Company apply at a corporate tax rate of 30% (2021: 30%). The interim dividend for 2022 was
unfranked (2021 Interim: unfranked), the proposed final dividend for 2022 is unfranked (2021 Final: unfranked). The balance of franking
credits available as at 30 June 2022 is nil (2021: nil).
ORORA LIMITED ANNUAL REPORT 2022
85
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 2: Capital structure and financing (continued)
2.2. Dividends (continued)
Conduit Foreign Income (CFI) account
For Australian tax purposes, non-resident shareholder dividends will not be subject to Australian withholding tax to the extent that they
are franked or sourced from the Company’s CFI account. For the 2022 dividends, 100% of the interim dividend and 100% of the 2022
final dividend is to be sourced from the CFI account (2021: 100% of the interim and final dividend were sourced from the Company’s CFI
account). As a result, none of the 2022 dividends paid to a non-resident will be subject to Australian withholding tax. The balance of the
conduit foreign income account as at 30 June 2022 is $69.2 million (2021: $103.5 million). The estimated final dividend to be paid on 10
October 2022 of $71.9 million (2021: $65.7 million) will be paid from this balance and the advance receipt of FY23 foreign dividends.
2.3. Net debt
In addition to the US Private Placement of notes of USD243.0 million, of which USD100.0 million matures in July 2023 and USD143.0 million
in July 2025, the Group has access to the following committed facilities as at 30 June 2022:
•
•
•
a $350.0 million revolving multicurrency facility through a syndicate of domestic and international financial institutions, maturing in
November 2024;
a USD150.0 million five-year USD revolving facility, through a syndicate of domestic and international financial institutions, maturing in
April 2024; and
two bilateral agreements with domestic institutions: a $35.0 million facility maturing in April 2023 and a $100.0 million facility maturing
in July 2027.
These facilities are unsecured. During both the current and comparative reporting period Orora Limited has complied with the financial
covenants of its borrowing facilities.
The Group successfully refinanced the Global Syndicated Facility in the prior financial year.
$ million
Cash on hand and at bank
Deposits at call
Total cash and cash equivalents
Lease liabilities
Due within one year
Due after one year
Total lease liability
Borrowings
Bank loans due within one year
Current borrowings
Finance lease liabilities due after one year
Bank loans due after one year
US Private Placement due after one year
Non-current borrowings
Total borrowings
Total debt
Net debt
Accounting policies
2022
2021
52.5
0.1
52.6
49.7
174.8
224.5
35.0
35.0
-
295.0
351.6
646.6
681.6
44.3
6.3
50.6
48.0
204.8
252.8
-
-
0.1
180.0
323.4
503.5
503.5
906.1
756.3
853.5
705.7
Cash and cash equivalents
Cash and cash equivalents include cash at bank and on hand and short-term money market investments with an original maturity of
three months or less and are classified as financial assets held at amortised cost. Cash at bank earns interest at floating rates based on
daily bank deposits. Short-term deposits are made for varying periods, depending on the immediate cash requirements of the Group, and
earn interest at the respective short-term deposit rates.
The carrying value of cash and cash equivalents is considered to approximate fair value due to the assets’ liquid nature.
86
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Bank loans
All loans and borrowings are initially recognised at the fair value of the consideration received, less directly attributable transaction
costs. Subsequent to initial recognition, interest-bearing liabilities are measured at amortised cost using the effective interest rate
method.
Interest-bearing liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires. The
difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the
consideration paid is recognised in profit or loss.
Interest-bearing liabilities are classified as current liabilities, except for those liabilities where the Group has an unconditional right to
defer settlement for at least 12 months after the reporting period, which are classified as non-current liabilities.
The US Private Placement notes have a carrying value of $352.1 million (excluding borrowing costs) while the fair value of the notes is
$351.7 million. For all other borrowings, the fair values are not materially different to their carrying amount since the interest payable on
those borrowings is either close to current market rates or the borrowings are of a short-term nature.
2.3.1. Net debt reconciliation
The following table illustrates the cash and non-cash movements of net debt:
$ million
Net debt at 1 July 2020
Cash flows
Change in lease arrangements
Unwinding of discounting
Other non-cash movements
Effect of movements in foreign exchange rates
Net debt at 30 June 2021
Cash flows
Change in lease arrangements
Unwinding of discounting
Other non-cash movements
Effect of movements in foreign exchange rates
Assets
Liabilities from financing activities
Cash and
cash
equivalents
Lease
liabilities
Bank loans
US Private
Placement
107.3
(52.1)
-
-
-
(4.6)
50.6
1.9
-
-
-
0.1
(279.6)
59.4
(42.1)
(10.5)
(0.2)
20.1
(252.9)
60.0
(4.0)
(9.8)
-
(17.8)
(48.0)
(131.8)
-
-
(0.1)
(0.1)
(180.0)
(150.1)
-
-
-
0.1
(351.2)
-
-
-
(0.2)
28.0
(323.4)
-
-
-
(0.2)
(28.0)
Total
(571.5)
(124.5)
(42.1)
(10.5)
(0.5)
43.4
(705.7)
(88.2)
(4.0)
(9.8)
(0.2)
(45.6)
Net debt at 30 June 2022
52.6
(224.5)
(330.0)
(351.6)
(853.5)
ORORA LIMITED ANNUAL REPORT 2022
87
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 2: Capital structure and financing (continued)
2.3. Net debt (continued)
2.3.2. Borrowings
The maturity profile of the Group’s external borrowings drawn down, excluding the impact of capitalised borrowing costs, as at 30 June
2022 is illustrated in the following chart:
Maturity profile of drawn debt by facility
Loans due within one year
• $35.0 million drawn under the $35.0 million bilateral agreement maturing in April 2023 (2021: nil drawings under $35.0 million
bilateral agreement maturing January 2022);
Loans due after one year
At 30 June 2022, bank loans due after one year include:
• $245.0 million drawn under a $350.0 million committed global syndicated multicurrency facility maturing in November 2024 (2021:
$180.0 million drawn);
• nil drawings under the USD150.0 million committed syndicated facility maturing in April 2024 (2021: nil);
• $50.0 million drawn under the $100.0 million bilateral agreement maturing in July 2027.
All drawings as at 30 June 2022 were denominated in Australian dollars and bore interest at the applicable BBSY plus an applicable credit
margin. Any drawings in US or New Zealand dollars would bear interest at the applicable LIBOR and BKBM rate plus an applicable credit
margin.
The US Private Placement of notes of USD243.0 million, consists of USD100.0 million which matures in July 2023 and USD143.0 million
which matures in July 2025.
88
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
2.4. Equity
This section explains material movements in shareholders’ equity that are not explained elsewhere in the financial statements. The
movements in equity and the balance at 30 June 2022 are presented in the statement of changes in equity.
2.4.1. Contributed equity and treasury shares
$ million
Ordinary shares issued and fully paid
Share buyback reserve
Treasury shares
Total contributed equity and treasury shares
Contributed equity
2022
2021
-
(26.4)
(10.9)
(37.3)
127.4
-
(46.6)
80.8
Ordinary shares
Ordinary shares are classified as equity. The Company does not have authorised capital or par value in respect of its issued shares. All
issued shares are fully paid, all shares rank equally with regards to the Company’s residual assets. Ordinary shares entitle the holder to
participate in dividends, as declared from time to time, and are entitled to one vote per share at meetings of the Company. Incremental
costs directly attributable to the issue of new shares or the exercise of options are recognised as a deduction from equity, net of any
related income tax benefit effects. Where the Group reacquires its own shares, for example as the result of a share buyback, those
shares are cancelled. The consideration paid to acquire those shares, including any directly attributable transaction costs net of income
taxes, is recognised directly as a reduction in equity.
Share buyback reserve
Due to the share buybacks being undertaken at higher prices than the original subscription price, the balance for ordinary share
contributed equity has been reduced to nil, and a reserve created to reflect the excess value of shares brought over the original amount
of the subscribed equity.
Treasury shares
Where the Orora Employee Share Trust purchases equity instruments in the Company that have been identified as treasury shares, the
consideration paid, including any directly attributable costs is deducted from equity, net of any related income tax effects. When the
treasury shares are subsequently sold or reissued, any consideration received, net of any directly attributable costs and the related
income tax effects, is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in retained
earnings. Refer to note 6.2.
In the comparative period, 14,214,228 ordinary shares purchased on-market under the Share Buy-Back program announced by the Group
had not been cancelled, these shares were presented as Treasury Shares as at 30 June 2021. Subsequent to the end of the 2021
financial year the shares were cancelled.
The following table illustrates the movements in the Group’s contributed equity and treasury shares.
ORORA LIMITED ANNUAL REPORT 2022
89
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 2: Capital structure and financing (continued)
2.4. Equity (continued)
2.4.1. Contributed equity and treasury shares (continued)
At 1 July 2020
Share buyback
Acquisition of shares by the Orora Employee Share Trust
Acquisition of shares under share buyback program(1)
Proceeds received from employees on exercise of options
Restriction lifted on shares issued under the RSU Grant (note 7.1)
Exercise of vested grants under Employee Share Plans
Treasury shares used to satisfy exercise of vested grants under Employee Share
Plans
Contributed equity
Treasury shares
No. '000
$ million
No. '000
$ million
965,363
(75,123)
-
-
-
-
841
335.2
(210.1)
-
-
1.0
0.2
3.1
(655)
-
(412)
(14,214)
-
-
-
(841)
(2.0)
841
(1.6)
-
(0.9)
(46.1)
-
-
-
2.0
At 30 June 2021
890,240
127.4
(14,440)
(46.6)
Share buyback
Acquisition of shares by the Orora Employee Share Trust
Acquisition of shares under share buyback program(1)
Restriction lifted on shares issued under the RSU Grant (note 7.1)
Treasury shares used to satisfy issue of RSU Grant
Exercise of vested grants under Employee Share Plans
Treasury shares used to satisfy exercise of vested grants under Employee Share
Plans
(30,674)
-
(14,214)
-
-
357
(109.0)
-
(46.1)
0.2
(1.5)
3.5
(357)
(0.9)
-
(3,587)
14,214
-
433
-
357
-
(12.8)
46.1
-
1.5
-
0.9
At 30 June 2022
845,352
(26.4)
(3,023)
(10.9)
(1) As at 30 June 2021, 14,214,228 ordinary shares purchased on-market under the share buyback program announced by the Group had not been cancelled, these
shares have been presented as Treasury Shares. Subsequent to the end of the 2021 financial year the shares were cancelled.
90
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
2.4.2. Reserves
$ million
Cash flow hedge reserve
Share-based payment reserve
Demerger reserve
Exchange fluctuation reserve
Total reserves
2022
2021
3.8
10.7
132.9
(8.5)
138.9
1.8
8.7
132.9
(35.8)
107.6
Details of movements in each of the reserves is presented in the statement of changes in equity.
Accounting policies
Cash flow hedge reserve
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet been realised.
During the 12 months to 30 June 2022 the following movements were recognised in the cash flow hedge reserve:
$ million
Unrealised gains/(losses) on cash flow hedges
Forward exchange contract gains
Realised (gains)/losses transferred to profit or loss
Forward exchange contract (gain)/loss
Realised (gains)/losses transferred to non-financial assets
Forward exchange contract gain
2022
2021
9.9
(2.5)
(4.6)
2.9
5.7
-
Refer to note 5.4 for further information on these derivative instruments.
Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of options and rights recognised as an expense. The Company
provides benefits to employees of the Group in the form of share-based payments, whereby employees render services in exchange for
options or rights over shares. Refer to note 7.1 for further details of the Group’s share-based payment plans.
The fair value of options and rights granted is recognised as an employee benefit expense in the income statement with a corresponding
increase in the share-based payments reserve in equity and is spread over the vesting period during which the employees become
unconditionally entitled to the option or right. Upon exercise of the options or rights, the balance of the share-based payments reserve,
relating to the option or right, is transferred to share capital.
Demerger reserve
The demerger reserve represents the difference between the consideration paid by Orora under an internal corporate restructure and the
assets and liabilities acquired, which were recognised at their carrying value under a common control transaction.
Exchange fluctuation reserve
For controlled entities with a functional currency that is not Australian dollars, their assets and liabilities are translated at the closing
exchange rate at reporting date, while income and expenses are translated at year-to-date average exchange rates.
On consolidation all exchange differences arising from translation are recognised in other comprehensive income and accumulated in the
exchange fluctuation reserve.
In addition, foreign exchange gains or losses are deferred in equity if they relate to qualifying cash flow hedges, qualifying net investment
hedges or are attributable to part of the net investment in a foreign operation. When a foreign operation is disposed of, the cumulative
amount recognised within the reserve relating to that foreign operation is transferred to the income statement as an adjustment to the
profit or loss on disposal.
ORORA LIMITED ANNUAL REPORT 2022
91
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 2: Capital structure and financing (continued)
2.4. Equity (continued)
2.4.3. Retained earnings
Retained earnings comprises profit for the year attributable to owners of the Company and other items recognised directly in equity as
presented on the statement of changes in equity.
$ million
Retained earnings at the beginning of the period
Net profit attributable to the owners of Orora Limited
Ordinary dividends:
Final paid (refer note 2.2)(1)
Interim paid (refer note 2.2)(2)
Retained earnings at the end of the period
(1) 2021 final dividend paid on 11 October 2021 (2020: 2020 final dividend paid on 12 October 2020).
(2) 2022 interim dividend paid on 30 March 2022 (2021: 2021 interim dividend paid on 1 April 2021).
2022
2021
580.2
184.7
764.9
(65.9)
(68.9)
557.4
135.8
693.2
(53.1)
(59.9)
(134.8)
(113.0)
630.1
580.2
92
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities
In this section
This section details the assets used to generate the Group’s trading performance and the liabilities incurred as a result. On the following
pages there are notes covering working capital, other assets, non-current assets and provisions.
Liabilities relating to the Group’s financing activities are set out in Section 2, whilst the assets and liabilities recognised in respect of
derivative instruments, used to hedge financial risks, are contained in Section 5. Information pertaining to deferred tax assets and liabilities
is provided in Section 4.
3.1. Trade and other receivables
$ million
Trade receivables
Less loss allowance provision
Other receivables(1)
Total current trade and other receivables
2022
2021
512.0
(6.5)
505.5
56.3
435.9
(3.2)
432.7
65.7
561.8
498.4
(1) These amounts generally arise from transactions outside the usual operating activities of the Group. Interest may be charged at commercial rates where the
terms of repayment exceed six months. Collateral is not normally obtained.
Accounting policies
Trade receivables and other receivables are all classified as financial assets held at amortised cost.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method, less a
loss allowance provision. The Group, from time to time, may enter into trade financing instruments in respect of trade receivables and as
a result the receivable is derecognised.
The carrying value of trade and other receivables, less impairment provisions, is considered to approximate fair value, due to the short-
term nature of the receivables.
Impairment of trade receivables
The collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts which are known to be uncollectable are
written off when identified.
The Group recognises an impairment provision based upon anticipated lifetime losses of trade receivables. The anticipated losses are
determined with reference to historical loss experience and is regularly reviewed and updated.
The amount of the impairment loss is recognised in the income statement within ‘general and administration’ expense.
Credit risks related to receivables
In assessing an appropriate provision for impairments of receivables consideration is given to historical experience of bad debts, the
ageing of receivables, knowledge of debtor insolvency or other credit risk and individual account assessment.
Customer credit risk is managed by each business group in accordance with the procedures and controls set out in the Group’s credit
risk management policy. Credit limits are established for all customers based on external and internal credit rating criteria and letters of
credit or other forms of credit insurance cover are obtained where appropriate. In monitoring customer credit risk, customers are grouped
according to their credit characteristics, including whether they are an individual or a legal entity, whether they are a wholesale, retail or
end-user customer, their geographic location, industry and existence of previous financial difficulties.
For some trade receivables the Group may also obtain security in the form of guarantees, deeds of undertaking or letters of credit which
can be called upon if the counterparty is in default under the terms of the agreement. The Group does not otherwise require collateral in
respect of trade and other receivables.
ORORA LIMITED ANNUAL REPORT 2022
93
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.1. Trade and other receivables (continued)
The following tables sets out the ageing of trade receivables, according to their due date:
$ million
Not past due
Past due 0-30 days
Past due 31-120 days
More than 121 days past due
Loss allowance
provision
Gross carrying
amount
2022
2021
2022
2021
-
-
3.6
2.9
6.5
-
-
0.7
2.5
3.2
442.5
50.7
15.9
2.9
512.0
373.2
48.3
11.9
2.5
435.9
The Group has recognised a net loss of $4.4 million (2021: $2.4 million) in respect of the trade receivables written off in the financial
year. The loss has been included in ‘general and administration’ expense in the income statement.
3.2.
Inventories
$ million
At cost
Raw materials and stores
Work in progress
Finished goods
Total inventory carried at cost
At net realisable value
Raw materials and stores
Finished goods
Total inventory carried at net realisable value
Total inventories
Accounting policies
2022
2021
204.3
8.2
371.3
583.8
57.9
9.1
67.0
85.8
7.5
260.6
353.9
36.6
8.6
45.2
650.8
399.1
Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and selling expenses.
Costs incurred in bringing each product to its existing location and condition are accounted for as follows:
• Raw materials – purchase cost on a weighted average cost formula;
• Manufactured finished goods and work in progress – cost of direct material and labour and an appropriate proportion of production
and variable overheads incurred in the normal course of business.
Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of inventory.
During the period the Group recognised a net write-down of $8.7 million (2021: $30.5 million) with regard to the net realisable value of
inventories which has been recognised in ‘cost of sales’ expense in the income statement.
94
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
3.3. Trade and other payables
$ million
Current
Trade creditors
Deferred grant income
Other creditors and accruals
Total current trade and other payables
Non-current
Deferred grant income
Other creditors
Total non-current other payables
Accounting policies
2022
2021
560.9
0.3
370.0
931.2
364.7
-
286.1
650.8
4.7
0.3
5.0
-
1.8
1.8
Trade and other payables
Trade and other payables are all classified as financial liabilities held at amortised cost. Trade and other payables represent liabilities for
goods and services provided to the Group prior to the end of the financial year which were unpaid at the end of the financial year and
these amounts are unsecured. The Group, from time to time, may make available trade financing instruments in respect of trade payables
which continue to be recognised within trade and other payables.
The carrying value of trade and other payables is considered to approximate fair value due to the short-term nature of the payables.
Trade and other payables are included in current liabilities, except for those liabilities where payment is not due within 12 months from
reporting date, which are classified as non-current liabilities.
Deferred grant income
Grants from governments are recognised at their fair value when there is a reasonable assurance that the grant will be received, and the
Group will comply with all attached conditions. The grants received are in relation to the purchase and construction of items of property,
plant and equipment. The grants are recognised as deferred income and are credited to the income statement on a straight-line basis
over the expected useful life of the related asset.
3.4. Other assets
$ million
Current
Contract incentive payments(1)
Prepayments and other current assets
Total other current assets
Non-current
Contract incentive payments(1)
Other non-current assets
Total other non-current assets
2022
2021
6.9
19.8
26.7
23.8
68.0
91.8
9.3
19.2
28.5
17.7
60.2
77.9
(1) Contract incentives are provided to customers to secure long-term sale agreements and are amortised over the period of the contractual arrangement.
ORORA LIMITED ANNUAL REPORT 2022
95
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.5. Property, plant and equipment
The following note details the physical assets used by the Group to operate the business to generate revenues and profits.
The cost of these assets is the amount initially paid for them with a depreciation charge recognised in the income statement to reflect the
wear and tear of the assets as they are used which reduces the value of the asset over time.
Land
improvements
Land
Buildings
Plant and
equipment
Finance leased
assets
Assets under
construction
$ million
Cost
At 1 July 2020
Additions for the period
Disposals during the period
Additions through business acquisitions
Other transfers
Effect of movements in foreign
exchange rates
At 30 June 2021
Additions for the period
Disposals during the period
Other transfers
Effect of movements in foreign
exchange rates
At 30 June 2022
Accumulated depreciation and impairment
At 1 July 2020
Depreciation charge
Disposals during the period
Effect of movements in foreign
exchange rates
At 30 June 2021
Depreciation charge
Disposals during the period
Impairment loss
Effect of movements in foreign
exchange rates
At 30 June 2022
Net book value
At 30 June 2021
At 30 June 2022
13.9
-
(0.6)
-
-
-
13.3
21.1
-
-
-
34.4
-
-
-
-
-
-
-
-
-
-
8.3
-
(0.1)
-
-
247.4
0.4
(6.5)
-
1.5
1,248.7
42.5
(24.0)
1.0
(15.3)
-
(4.5)
(28.3)
8.2
238.3
1,224.6
-
-
-
0.1
8.3
(2.7)
(0.1)
-
3.9
(4.2)
4.5
3.9
45.0
(11.3)
2.3
26.2
246.4
1,286.8
(79.0)
(8.1)
3.6
(765.2)
(59.8)
23.8
-
2.8
19.3
(2.8)
(0.2)
-
-
-
(80.7)
(781.9)
(8.8)
3.2
-
(3.0)
(55.3)
10.7
(1.5)
(16.4)
(3.0)
(89.3)
(844.4)
13.3
34.4
5.4
5.3
157.6
157.1
442.7
442.4
4.6
-
(0.6)
-
-
(0.4)
3.6
-
-
-
0.3
3.9
(4.3)
(0.1)
0.6
0.3
(3.5)
(0.1)
-
-
(0.3)
(3.9)
0.1
-
Total
1,522.9
51.3
(31.8)
1.0
(13.8)
(33.2)
1,496.4
114.4
(15.5)
-
30.5
-
8.4
-
-
-
-
8.4
44.4
-
(6.8)
-
46.0
1,625.8
-
-
-
-
-
-
-
-
-
-
(851.2)
(68.1)
28.0
22.4
(868.9)
(64.4)
13.9
(1.5)
(19.7)
(940.6)
8.4
46.0
627.5
685.2
At 30 June 2022, no property, plant and equipment was provided as security for any interest-bearing borrowings (2021: nil).
96
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Accounting policies
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the item including borrowing costs that are related to the acquisition, construction or
production of an asset. Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount, or recognised as a separate asset, only when it is probable that future
economic benefits associated with the item will flow to the Group.
All other repairs and maintenance are charged to the income statement during the financial year in which they are incurred.
Depreciation
Property, plant and equipment, excluding freehold land, is depreciated at rates based upon the expected useful lives, or in the case of
leasehold improvements and certain leased plant and equipment the lease term, using the straight-line method. Land is not depreciated.
Depreciation rates used for each class of asset for the current and comparative periods are as follows:
• Buildings 2%
Land improvements 3-5%
•
• Plant and equipment 5%-20%
Depreciation is calculated by estimating the number of years the Group expects an asset to be used over. At each reporting date
depreciation methods, residual values and useful lives are reassessed and adjusted if necessary. In addition, assets subject to
depreciation are reviewed for impairment whenever events or changes in circumstances indicate that an asset carrying amount may not
be recoverable. If an asset’s value falls below its depreciated value an additional one-off impairment charge is made against profit. Refer
note 3.8 for further details.
3.6. Leases
The following note details leased right-of-use assets utilised used by the Group as a lessee to operate the business to generate revenues
and profits. This includes the lease of warehouse, office and factory facilities, vehicles and other items of plant and equipment.
The cost of these assets represents the net present value of the future lease payments with an amortisation charge recognised in the
income statement to reflect the utilisation of the right-of-use asset over the term of the lease arrangement.
Other than minor sub-lease arrangements, the Group is not a lessor of assets.
Leases for premises typically run for a period of 10 years with an option to renew the lease after that date. Lease payments for premises
are adjusted annually either through a fixed rental increase, typically 3.0% per annum, or are linked to changes in the consumer price
index or as a result of a market rent review process.
The leases for items of plant and equipment, which includes vehicles, typically run for periods of three to five years. In the majority of
instances when these lease contracts expire they are replaced by new leases for similar underlying assets.
ORORA LIMITED ANNUAL REPORT 2022
97
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.6. Leases (continued)
Right-of-use assets
$ million
Cost
At 1 July 2020
Lease additions and modifications
Derecognition of right-of-use assets
Effect of movements in foreign exchange rates
At 30 June 2021
Lease additions and modifications
Derecognition of right-of-use assets
Effect of movements in foreign exchange rates
At 30 June 2022
Accumulated amortisation and impairment
At 1 July 2020
Depreciation charge for the period
Derecognition of right-of-use assets
Impairment loss
Reversal of impairment loss
Effect of movements in foreign exchange rates
At 30 June 2021
Depreciation charge for the period
Derecognition of right-of-use assets
Reversal of impairment loss
Effect of movements in foreign exchange rates
At 30 June 2022
Net book value
At 1 July 2021
At 30 June 2022
Amounts recognised in the income statement
The following amounts, for continuing operations, were recognised in the income statement:
$ million
Amortisation of right-of-use assets
Expenses relating to short-term leases
Expenses relating to low-value assets
Income from sub-leasing right-of-use assets
Interest on lease liabilities
Property
Plant and
Equipment
248.7
31.3
(5.2)
(17.6)
257.2
19.6
(37.6)
19.5
258.7
(52.1)
(36.8)
5.2
(3.6)
4.4
3.8
(79.1)
(37.2)
15.7
3.0
(7.1)
27.7
10.8
(1.4)
(2.2)
34.9
2.1
(0.9)
2.8
38.9
(7.0)
(7.4)
1.4
-
-
0.5
(12.5)
(7.4)
0.9
-
(0.2)
Total
276.4
42.1
(6.6)
(19.8)
292.1
21.7
(38.5)
22.3
297.6
(59.1)
(44.2)
6.6
(3.6)
4.4
4.3
(91.6)
(44.6)
16.6
3.0
(7.3)
(104.7)
(19.2)
(123.9)
178.1
154.0
22.4
19.7
200.5
173.7
2022
44.6
15.7
0.7
(0.8)
9.8
2021
44.2
12.4
1.2
(0.6)
10.5
98
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Lease liabilities
$ million
Current lease liabilities
Non-current lease liabilities
The following table sets out the undiscounted maturity analysis of future lease payments.
$ million
Within one year
Between one and five years
More than five years
Less sub-lease rental income
2022
49.7
174.8
224.5
2022
55.9
154.8
28.8
239.5
(6.9)
232.6
2021
48.0
204.8
252.8
2021
57.0
182.7
49.4
289.1
(8.2)
280.9
In addition to the above commitments, there are signed lease agreements for properties for which the Group has not yet taken
possession. At 30 June 2022 these leases have not been recognised on the balance sheet as the lease has not yet commenced. The
future undiscounted lease payments of these properties total $21.6 million (2021: nil).
Accounting policies
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liability
Lease liabilities include the net present value of the following lease payments:
fixed payments (including in-substance fixed payments), less any lease incentive receivable
•
• variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date
• amounts expected to be payable by the group under residual value guarantees
the exercise price of a purchase option if the group is reasonably certain to exercise that option; and
•
• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Payments associated with short-term leases of equipment and vehicles and all low-value assets are recognised on a straight-line basis
as an expense in the income statement. Short-term leases are leases with a lease term of 12 months or less.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases in the Group, the Group’s incremental borrowing rate is used, being the rate that the Group would have to
pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with
similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the
lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is
reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the income statement over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability
•
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs; and
•
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the
Group is reasonably certain to exercise a purchase option, the right-of-use asset is deprecated over the underlying asset’s useful life.
ORORA LIMITED ANNUAL REPORT 2022
99
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.6. Leases (continued)
Lease term
Extension and termination options are included in a number of property leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and termination options held are
exercisable only by the Group and not the respective lessor.
Deferred tax
A lease transaction is considered a single transaction in which the recognition of the right-of-use asset and the lease liability are
integrally linked. As a result, differences that arise between the settlement of the lease liability and the amortisation of the leased asset
result in a net temporary difference on which deferred tax is recognised in accordance with the Group’s deferred tax accounting policy.
Judgements and estimates
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an
extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not terminated).
For leases of properties and equipment, the following factors are normally the most relevant:
•
•
•
if there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not terminate)
if any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to extend (or
not terminate)
otherwise, the Group considers other factors including historical lease durations and the costs and business disruption required to
replace the leased asset.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise)
it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which
affects this assessment, and that is within the control of the Group.
100
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
3.7.
Intangible assets
The following note details the non-physical assets used by the Group to generate revenue and profits.
These assets include computer software and licences, customer relationships and goodwill. The cost of these assets is the amount that the
Group has paid or, where there has been a business combination, the fair value of the specific intangible assets identified. In the case of
goodwill, its cost is the amount the Group has paid for acquiring a business over and above the fair value of the individual assets and
liabilities acquired. The value of goodwill is ‘intangible’ value that comes from, for example, synergies available with the integration of the
acquired business into the Group, a skilled and knowledgeable assembled workforce, proprietary technologies and processes and uniquely
strong market positions.
$ million
Cost
At 1 July 2020
Additions for the period
Disposals during the period
Other transfers
Effect of movements in foreign exchange rates
At 30 June 2021
Additions for the period
Disposals during the period
Effect of movements in foreign exchange rates
At 30 June 2022
Accumulated amortisation and impairment
At 1 July 2020
Amortisation charge
Disposals during the period
Impairment loss
Effect of movements in foreign exchange rates
At 30 June 2021
Amortisation charge
Disposals during the period
Effect of movements in foreign exchange rates
At 30 June 2022
Net book value
At 30 June 2021
At 30 June 2022
Accounting policies
Other intangible assets
Computer
software
Other
Goodwill
Total
145.7
6.0
(30.2)
13.8
(7.1)
128.2
5.5
(4.9)
8.0
136.8
(99.3)
(7.3)
28.7
(3.0)
3.6
(77.3)
(8.2)
1.1
(5.8)
(90.2)
50.9
46.6
29.0
-
(0.3)
-
(2.1)
26.6
-
-
2.2
28.8
(22.4)
(0.6)
0.1
-
1.9
(21.0)
(0.7)
-
(1.9)
(23.6)
468.2
-
-
-
(33.2)
435.0
-
-
33.7
468.7
(87.2)
-
-
-
6.9
(80.3)
-
-
(7.0)
(87.3)
642.9
6.0
(30.5)
13.8
(42.4)
589.8
5.5
(4.9)
43.9
634.3
(208.9)
(7.9)
28.8
(3.0)
12.4
(178.6)
(8.9)
1.1
(14.7)
(201.1)
5.6
5.2
354.7
381.4
411.2
433.2
Other intangible assets
Other intangible assets include computer software, customer relationships and software licences. The cost of these assets is the
amount that the Group has paid or, where there has been a business combination, their fair value at the date of acquisition.
Internal spend on computer software is only capitalised within the development phase, when the asset is separate and it is probable that
future economic benefits attributable to the asset will flow to the Group. Costs incurred in the customisation and configuration in the
implementation of a Software-as-a-Service arrangements are only capitalised when a unique customised software product controlled by
the Group is identified.
Following initial recognition, other intangible assets are carried at cost less amortisation and any impairment losses.
Other intangible assets are amortised on a straight-line basis over their useful life, and tested for impairment whenever there is an
indication that they may be impaired. Refer to note 3.8 for further details on impairment.
Computer software and licences are amortised over a period of between three to ten years whilst customer relationships are amortised
over a period of up to 10 years. The amortisation period and method is reviewed each financial year.
ORORA LIMITED ANNUAL REPORT 2022
101
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.7. Intangible assets (continued)
Goodwill
The goodwill recognised by the Group has arisen as a result of business combinations and represents the future economic benefits that
arise from assets that are not capable of being individually identified and separately recognised.
Goodwill is initially measured as the amount the Group has paid in acquiring a business over and above the fair value of the individual
assets and liabilities acquired.
Goodwill is not amortised but is instead tested annually for impairment, or more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost less any accumulated impairment losses.
Where there has been a change in the Group’s circumstances such as, technological changes or a decline in business performance, a
review of the value of the intangible assets, including goodwill, is undertaken to ensure the assets’ value has not fallen below its
amortised value. Should an assets’ value fall below its amortised value an additional impairment charge is made against profit and the
carrying value of the asset. Refer note 3.8.
Impairment of non-financial assets
3.8.
Testing for impairment
The Group tests property, plant and equipment, intangibles and goodwill for impairment:
• where there is an indication that an asset may be impaired (which is assessed each reporting date);
• where there is an indication that previously recognised impairments (on assets other than goodwill) have changed; and
• at least annually for goodwill.
In testing for impairment, the recoverable amount is estimated for an individual asset or, if it is not possible to estimate the recoverable
amount for the individual asset, the recoverable amount of the cash generating unit (CGU) to which the asset belongs. CGUs are the
smallest identifiable group of assets that generate cash inflows that are largely independent from the cash flows of other assets or group
of assets. Each CGU is no larger than an operating segment.
Assets are impaired if their carrying value exceeds their recoverable amount. The recoverable amount of an asset or CGU is determined
as the higher of its fair value less costs of disposal or value in use.
An impairment loss is recognised in the income statement if the carrying amount of an asset or a CGU exceeds its recoverable amount.
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU
(group of CGUs) and then, to reduce the carrying amount of the other assets in the CGU (group of CGUs).
Impairment calculations
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects the risks specific to the asset or CGU and the market’s current assessment of the time value of money.
Value in use is assessed using cash flow projections for five years using data from the Group’s latest internal forecasts and is
management’s best estimate of income, expenses, capital expenditure and cash flows for each CGU. Changes in selling prices and direct
costs are based on past experience and management’s expectation of future changes in the markets in which the Group operates. These
cash flow projections included estimates of capital outflows required to meet the Group's current strategy and commitment to manage
climate related risk and opportunities. Orora will continue to develop reporting plans and quantitative analysis around the Group’s climate
change strategy, the financial Implications of which will continue to be considered and built into future cash flow assumptions used
within impairment modelling.
Cash flows beyond the five-year period are extrapolated using estimated growth rates which are determined with regard to the long-term
performance of each CGU in their respective markets and are not expected to exceed the long-term average growth rates for the industry
in which each CGU operates.
The discount rate used in performing the value in use calculations reflects the Group’s weighted average cost of capital, as adjusted for
specific risks relating to each geographical region in which the CGU’s operate.
Reversal of impairment
Where there is an indication that previously recognised impairment losses may no longer exist or may have decreased, the asset is
tested for impairment. The impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount of the asset and is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, had no impairment loss been recognised. Impairments recognised for
goodwill are not reversed.
102
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Goodwill impairment tests
For the purpose of impairment testing, goodwill is allocated to CGUs or groups of CGUs according to the level at which management
monitors goodwill. Goodwill is tested annually or more regularly if there are indicators of impairment.
The recoverable amounts of the CGUs were based on the present value of the future cash flows expected to be derived from the CGU
(value in use calculation). Value in use is calculated from cash flow projections for five years using data from the Group’s latest internal
forecasts. The key assumptions for the value in use calculations are those regarding the expected changes in earnings during the initial
five-year period, discount rates and growth rates applied to the extrapolated periods of the value in use calculation.
The following table presents a summary of the goodwill allocation and the key assumptions used in determining the recoverable amount
of each CGU:
2022
Goodwill allocation ($ million)
Pre-tax discount rate (%)
Terminal growth rate (%)
2021
Goodwill allocation ($ million)
Pre-tax discount rate (%)
Terminal growth rate (%)
Orora Visual CGU
Australasia
Orora Packaging
Solutions
Orora Visual
32.2
10.7
2.0
32.7
8.8
2.0
282.3
9.7
2.0
260.4
9.2
2.0
66.9
9.8
2.0
61.6
9.1
2.0
As at 30 June 2022, as a consequence of the impairment charge recognised during the financial year ended 30 June 2020, the excess of
the estimated recoverable amount over the carrying value is more limited for the Orora Visual CGU than other Orora CGUs. It is expected
that the excess will increase as initiatives and actions focused on enhancing the earnings of this business are implemented, driving an
increase in value over time. The assumptions used in determining the recoverable amount of this CGU are sensitive, and dependent on
the continued improvement in the underlying business. It is not considered likely that any reasonable, possible change in a key
assumption would result in any impairment.
Other CGUs
Whilst the outlook for the Group remains subject to the future potential impacts of rapidly changing market conditions and inflationary
pressures, based on current economic conditions and performance of the Australasia and Orora Packaging Solutions CGUs, no reasonable
possible change in any of the key assumptions would be expected to result in a material impairment to the Group using the value-in-use
methodology.
Judgements and estimates
The determination of impairment involves the use of judgements and estimates that include, but are not limited to, the cause, timing and
measurement of the impairment. Management is required to make significant judgements concerning the identification of impairment
indicators, such as changes in competitive positions, expectations of growth, increased cost of capital, and other factors that may indicate
impairment, such as a business restructuring.
Management is also required to make significant estimates regarding future cash flows and the determination of fair values when assessing
the recoverable amount of assets (or groups of assets). Inputs into these valuations require assumptions and estimates to be made about
forecast earnings and related future cash flows, growth rates, applicable discount rates, useful lives and residual values.
The judgements, estimates and assumptions used in assessing impairment are management’s best estimates based on current and
forecast market conditions. Changes in economic and operating conditions impacting these assumptions could result in changes in the
recognition of impairment charges in future periods.
ORORA LIMITED ANNUAL REPORT 2022
103
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.9. Provisions
$ million
2022
Opening balance
Provisions made during the period
Payments made during the period
Released during the period
Effect of movement in foreign exchange rate
Closing balance
Current
Non-current
2021
Opening balance
Provisions made during the period
Payments made during the period
Released during the period
Additions through business acquisitions
Effect of movement in foreign exchange rate
Closing balance
Current
Non-current
Accounting policies
Employee
entitlements
Workers'
compensation,
insurance and
other claims
Asset restoration,
restructuring and
decommissioning
25.8
16.9
(12.8)
(0.5)
0.7
30.1
28.0
2.1
26.9
15.1
(12.7)
(3.1)
0.1
(0.5)
25.8
23.7
2.1
16.5
1.7
(4.3)
(3.2)
0.6
11.3
10.4
0.9
6.9
10.0
(0.2)
-
-
(0.2)
16.5
14.2
2.3
78.4
11.3
(30.5)
(0.2)
1.2
60.2
48.5
11.7
83.0
48.6
(51.6)
(0.4)
-
(1.2)
78.4
50.4
28.0
Total
120.7
29.9
(47.6)
(3.9)
2.5
101.6
86.9
14.7
116.8
73.7
(64.5)
(3.5)
0.1
(1.9)
120.7
88.3
32.4
A provision is recognised when: the Group has a present legal or constructive obligation arising from past events; it is probable that cash
will be paid to settle it; and a reliable estimate can be made of the amount of the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments
of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost in the
income statement.
Employee entitlements
The provision for employee entitlements represents the obligation for annual leave, long service leave entitlements and incentives
accrued by employees.
Liabilities for employee benefits such as wages, salaries and other current employee entitlements represent present obligations arising
from employees’ services provided to the reporting date and are calculated at undiscounted amounts based on remuneration wage and
salary rates, including related on-costs, such as workers compensation insurance and payroll tax, and are presented in other payables.
The liability for annual leave and long service leave is measured as the present value of estimated future cash outflows to be made in
respect of services provided by the employee up to the reporting date. Consideration is given to expected future wage and salary levels,
experience of employee departures and period of service. Expected future payments that are not expected to be settled within 12
months are discounted using market yields at the reporting date of high-quality corporate bonds. The rates used reflect the terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
104
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Workers’ compensation, insurance and other claims
The Group self-insures for various risks, including risks associated with workers’ compensation. Provisions are recognised for claims
received and expected to be received in relation to incidents occurring prior to reporting date and are measured based upon historical
claim rates.
Estimated net future cash flows are based on the assumption that all claims will be settled and the weighted average cost of historical
claims adjusted for inflation will continue to approximate future costs.
Asset restoration, restructuring and decommissioning
Asset restoration and decommissioning
Where the Group has a legal or constructive obligation to restore a site on which an asset is located, either through make-good provisions
included in lease agreements or decommissioning of environmental risks, the present value of the estimated costs of dismantling and
removing the asset and restoring the site is recognised as a provision with a corresponding increase in the related item of property, plant
and equipment.
At each reporting date, the liability is remeasured in line with changes in discount rates, estimated cash flows and the timing of those
cash flows. Any changes in the liability are added to or deducted from the related asset, other than the unwinding of the discount, which
is recognised as a financing cost in the income statement. If there is no related asset in respect of the restoration or decommissioning
activity changes in the liability are recognised in the income statement.
The asset restoration provision includes amounts that have been recognised in respect of certain environmental contamination
indemnities provided under the Australian Fibre sale and purchase agreement. The indemnity relates to certain pre-existing
contamination that may exist at the Australasian Fibre sites as at 30 April 2020, where after this date the contamination is either a)
required to be remediated by a regulatory agency or b) the site is subject to regulatory enforcement action that is directly related to pre-
existing contamination.
Restructuring
A provision for restructuring is recognised when the Group has a detailed formal restructuring plan and the restructuring has either
commenced or has been publicly announced, including discussions with affected personnel. Future operating costs in relation to the
restructuring are not provided for. Payments falling due greater than 12 months after reporting date are discounted to present value.
ORORA LIMITED ANNUAL REPORT 2022
105
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 3: Assets and liabilities (continued)
3.9. Provisions (continued)
Judgements and estimates
A provision is recognised by the Group where an obligation exists relating to a past event, it is probable that a cash payment will be required
to settle it, and the Group is not certain how much cash will be required to settle the liability. The value of that provision is based upon
estimates and assumptions with regards to the amount and timing of cash flows required to settle the obligation, which are dependent on
future events. The key assumptions applicable to the determination of the provisions are as follows:
Employee entitlements
The provision for employee entitlements is based on a number of management estimates, which include:
•
•
•
future increase in salaries, wages and on-cost rates
future probability of employee departures
future probability of years of service (long service leave provision)
Workers’ compensation
The self-insured workers’ compensation provision is based on a number of management estimates including, but not limited to:
future inflation
claim administration expenses
•
•
• historical weighted average size of claims
•
claim development
Asset restoration and decommissioning
Asset restoration and decommissioning provisions require assessments to be made of lease make-good conditions and decommissioning
and environmental risks. The provisions require estimates to be made of costs to dismantle and remove equipment and to restore the site to
the condition required under the terms of the lease or contract and as required by environmental laws and regulations.
The recognition and measurement of asset restoration and decommissioning provisions is a complex area and requires significant
judgement and estimates. The measurement of the provision can vary as a result of many factors, including, but not limited to:
•
•
•
•
changes in the relevant legal or local/national government requirements and any other commitments made to stakeholders;
review of remediation and restoration options
identification of additional remediation requirements identified during the restorative process
the emergence of new restoration techniques
In determining an appropriate provision management gives consideration to the results of the most recently completed surveying data in
respect of the remediation process, current cost estimates and appropriate inclusion of contingency in cost estimates to allow for both
known and unknown residual risks.
Estimates can be impacted by the emergence of new restoration techniques and experience at other operations. This is compounded by the
fact that there has been limited restoration activity and historical precedent within the Group against which to benchmark estimates of the
costs to remediate.
The decommissioning of the Petrie site is a significant and complex exercise involving multiple government agencies. The Group continues
to use a specialist environmental consulting firm to manage the completion of the remaining remediation works. At the date of this Report,
decommissioning work continues on site with the estimated costs to complete the decommissioning contingent on final remediation
requirements which require significant judgement in respect of determining a reliable estimate.
Management have measured the Petrie decommissioning provision as at 30 June 2022 using all currently available information and
considering applicable legislative and environmental regulations. However, given the complexity and multiple stakeholders involved in the
decommissioning of the Petrie site, there remains a risk of further currently unidentified costs in the future.
All the uncertainties discussed above may result in future actual expenditure differing from the amounts currently provided for in the
balance sheet.
Restructuring
Restructuring provisions require assessments to be made regarding the timing of recognition, specifically are plans sufficiently detailed,
approved and communicated to support recognition at a point in time. The provisions also require estimates to be made of the cost of
restructuring and the timing of these cash outflows.
The judgements, estimates and assumptions used in the recognition of all provisions are evaluated on an ongoing basis and are based on
historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstance
and are management’s best estimates based on currently available information, legislation and environmental laws and regulations. The
actual result may differ from these accounting estimates. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
106
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 4: Income tax
In this section
This section sets out the Group’s tax accounting policies, the current and deferred tax charges or credits in the year (which together make
up the total tax charge or credit in the income statement), a reconciliation of profit before tax to the tax charge for the period and the
movements in the deferred tax assets and liabilities.
Income tax expense
4.1.
The total taxation charge in the income statement for continuing operations is analysed as follows:
$ million
Current tax expense
Current period
Adjustments relating to prior periods
Total current tax expense
Deferred tax expense
Origination and reversal of temporary differences
Total income tax expense
Deferred income tax expense included in income tax expense comprises:
(Decrease)/increase in deferred tax assets
Increase in deferred tax liabilities
Deferred income tax expense included in total income tax expense
2022
2021
(56.8)
(0.2)
(57.0)
(50.8)
3.0
(47.8)
(14.7)
(71.7)
(0.2)
(48.0)
(2.6)
(12.1)
(14.7)
10.2
(10.4)
(0.2)
The following table provides a numerical reconciliation of income tax expense for continuing operations to prima facie tax payable:
$ million
Profit before related income tax (expense)/benefit
Tax at the Australian tax rate of 30% (2021: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Net tax effect of amounts which are non-deductible/non-assessable for tax
Net tax credits and tax loss utilisation
Over provision in prior period
Foreign tax rate differential
Total income tax expense(1)
2022
2021
258.8
(77.6)
177.7
(53.3)
(0.1)
0.7
1.3
4.0
(0.8)
-
3.0
3.1
(71.7)
(48.0)
(1) Total income tax expense in the comparative period includes an income tax benefit of $11.6 million in respect of significant items recognised during the period,
refer note 1.2.
ORORA LIMITED ANNUAL REPORT 2022
107
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 4: Income tax (continued)
4.2. Deferred tax balances
Deferred income tax in the balance sheet relates to the following:
$ million
Deferred tax assets
Net right-of-use lease accounting
Trade receivable loss allowance provision
Valuation of inventories
Employee benefits
Provisions
Tax set-off
Deferred tax asset
Deferred tax liabilities
Property, plant and equipment
Intangible assets
Financial instruments at fair value
Accruals and other items
Tax set-off
Deferred tax liability
Deferred income tax in the income statement from continuing operations relates to the following:
$ million
Property, plant and equipment
Net right-of-use lease accounting
Trade receivable loss allowance provision
Intangible assets
Valuation of inventories
Employee benefits
Provisions
Financial instruments at fair value
Accruals and other items
Deferred tax expense
Accounting policies
2022
2021
14.6
1.6
20.2
36.3
15.0
87.7
(71.6)
16.1
66.0
13.7
1.7
3.9
85.3
(71.6)
13.7
15.6
0.5
16.7
32.6
25.2
90.6
(64.4)
26.2
60.1
8.5
0.4
2.2
71.2
(64.4)
6.8
2022
2021
3.4
2.1
(1.1)
4.3
(3.1)
(1.2)
10.2
0.6
(0.5)
14.7
5.4
0.7
(0.1)
4.2
(2.4)
(6.4)
(0.4)
0.7
(1.5)
0.2
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it
relates to items recognised directly in equity or in other comprehensive income, in which case it is recognised directly in equity or in
other comprehensive income respectively.
Current tax
Current tax is the expected tax payable on taxable income for the period, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous periods. Current tax is also adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in
the financial statements, and by the availability of unused tax losses.
Current tax assets and liabilities are offset where the Group has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
108
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Deferred tax
Deferred tax is recognised using the balance sheet method in which temporary differences are calculated based on the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
•
•
•
taxable temporary differences arising on the initial recognition of goodwill;
taxable differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit; and
temporary differences relating to investments in subsidiaries to the extent that the Group is able to control the timing of the reversal
of the temporary difference and it is probable that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied when the temporary difference reverses, that is, when the asset
is realised or the liability is settled, based on the laws that have been enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only to the extent that it is probable that
future taxable profits will be available against which the assets can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Offsetting deferred tax balances
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate
to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but the Group intends to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Unrecognised deferred tax assets and liabilities
Deferred tax liabilities have not been recognised in respect of temporary differences arising as a result of the translation of the financial
statements of the Group investments in subsidiaries. The deferred tax liability will only arise in the event of disposal of the subsidiary,
and no such disposal is expected in the foreseeable future.
Unremitted earnings of the Group’s international operations are considered to be reinvested indefinitely and relate to the ongoing
operations. Upon distribution of any earnings in the form of dividends or otherwise, the Group may be subject to withholding taxes
payable to various foreign countries, however, such amounts are not considered to be significant. As the Group controls when the
deferred tax liability will be incurred and is satisfied that it will not be incurred in the foreseeable future, the deferred tax liability has not
been recognised. There are no unrecognised deferred tax assets.
Judgements and estimates
The Group is subject to income taxes in Australia and foreign jurisdictions and as a result the calculation of the Group’s tax charge involves a
degree of estimation and judgement in respect of certain items, including assumptions made in respect of the application of tax legislation.
There are many transactions and calculations relating to the ordinary course of business for which the ultimate tax determination is
uncertain. The Group recognises liabilities for uncertain tax positions based on management’s best estimate of whether additional taxes will
be due. Where the final outcome of these matters is different from the amounts that were initially recorded, these differences impact the
current and deferred tax provisions in the period in which such determinations are made.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the
nature and timing of their origination and compliance with the relevant tax legislation associated with their recoupment. The assumptions
regarding the future realisation, and therefore the recognition of deferred tax assets, may change due to future operating performance and
other factors.
The assumptions made in respect of the recognised tax balances are subject to risk and uncertainty and there is a possibility that changes
in circumstances or differences in opinion will alter outcomes which may impact the amount of deferred tax assets and deferred tax
liabilities recognised and the amount of tax losses and timing differences not yet recognised.
ORORA LIMITED ANNUAL REPORT 2022
109
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 5: Financial risk management
In this section
The following section outlines how the Group manages the financial risks it is exposed to associated with holding financial instruments that
arise from the Group’s need to access financing (bank loans and overdrafts and unsecured notes), from the Group’s operational activities
(cash, trade receivables and payables) and instruments held as part of the Group’s risk management activities (derivative financial
instruments).
Financial risk management is carried out by Orora Group Treasury under the Treasury Risk Management Policy that has been approved by the
Board for managing each of the below risks including principles and procedures with respect to risk tolerance, delegated levels of authority
on the type and use of derivative financial instruments and the reporting of these exposures. The Treasury function reports regularly to the
Board and treasury procedures are subject to periodic reviews.
In accordance with Board approved policies the Group typically uses derivative financial instruments to hedge underlying exposures arising
from the Group’s operational activities relating to changes in foreign exchange rates on foreign currency commercial transactions
(transaction risk), exposure to changes in commodity prices, changes in interest rates on net borrowings and changes in the Company’s
share price.
The Group’s overall financial risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group’s financial performance as set out in the table below:
Risk
Exposure
Management
Market risks
•
Interest rate
risk
•
Foreign
exchange risk
• Commodity
price risk
• Employee
share plan risk
Credit risk
The Group is exposed to interest rate risk in respect
of short and long-term borrowings where interest is
charged at variable rates.
The Group is exposed to foreign exchange risk
because of its international operations and the need
to undertake certain transactions denominated in
foreign currencies. These risks relate to future
commercial transactions (mainly relating to export
sales, the purchase of inventory and capital
expenditure), financial assets and liabilities not
denominated in A$ and net investments in foreign
operations.
The Group is exposed to changes in commodity
prices in respect of the purchase of aluminium raw
materials and the price of electricity and gas.
The Group’s employee share plans require the
delivery of shares to employees in the future when
rights vest or options are exercised. The Group
currently acquires shares on market to deliver
these shares exposing the Group to cash flow risk –
i.e. as the share price increases it costs more to
acquire the shares on market.
The Group is exposed to credit risk from financial
instrument contracts and trade and other
receivables. The maximum exposure to credit risk
at reporting date is the carrying amount, net of any
provision for impairment, of each financial asset in
the balance sheet.
The Group mitigates interest rate risk primarily by maintaining an
appropriate mix of fixed and floating rate borrowing
arrangements. Where necessary the Group hedges interest rate
risk using derivative instruments – eg interest rate swaps. Refer
notes 5.1.1 and 5.4.
Loans are drawn in foreign currency by foreign entities to create a
natural hedge of foreign currency assets and liabilities. Where a
natural hedge does not exist the Group’s policy is to hedge
contractual commitments denominated in a foreign currency by
entering into forward exchange contracts. Refer notes 5.1.2 and
5.4.
Where possible, the Group mitigates raw material commodity
price risk by contractually passing rise and fall adjustments
through to customers. To mitigate the variability of wholesale
electricity prices in Australia, the Group utilises Power Purchase
Arrangements (PPAs). Refer notes 5.1.3 and 5.4.
The Group has established the Orora Employee Share Trust which
manages and administers the Group’s responsibilities under the
employee share plans through acquiring, holding and transferring
shares or rights to shares in the Company to participating
employees. Refer note 5.1.4, 6.2 and 7.1.
The Group manages credit risk through a robust system of
counterparty approval, granting and renewal of credit limits,
regular monitoring of exposures against such credit limits and
assessing the overall financial stability and competitive strength
of the counterparty on an ongoing basis. Refer to notes 5.2 and
3.1 for credit risk exposures relating to trade and other
receivables.
The Group only enters into financial instrument contracts with
high credit quality financial institutions with a minimum long-
term credit rating of BBB+ or better by Standard & Poor’s.
110
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Risk
Exposure
Management
Liquidity and
funding risk
The Group is exposed to liquidity and funding risk from
operations and from external borrowings, where the
risk is that the Group may not be able to refinance debt
obligations or meet other cash outflow obligations
when required.
The Group mitigates funding and liquidity risks (refer note 5.3) by
ensuring that:
•
a sufficient range of funds are available to meet working
capital and investment objectives;
adequate flexibility within the funding structure is maintained
through the use of bank overdrafts, bank loans and unsecured
notes;
through regular monitoring of rolling forecast of cash inflows
and outflows, the cost of funding is minimised and that the
return on any surplus funds is maximised through efficient
cash management;
there is a focus on improving operational cash flow and
maintaining a strong balance sheet.
•
•
•
5.1. Market risks
5.1.1. Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest
rate risk. The Group’s Treasury Risk Management Policy is to maintain an appropriate mix between fixed and floating rate borrowings,
monitoring global interest rates, and where appropriate, hedging floating interest rate exposures or borrowings at fixed interest rates
through the use of interest rate swaps and forward interest rate contracts.
The Group’s objective is to hold a percentage of fixed rate debt within the appropriate range for its tenor as defined in the Treasury Risk
Management Policy. At 30 June 2022, approximately 52% (2021: 64%] of the Group’s debt is fixed rate. The movement in fixed rate debt
was a result of an increase in bank debt drawn during the current period, which is at variable rates.
Exposure
The Group had the following variable rate borrowings and there were no interest rate swap contracts outstanding at 30 June:
2022
Bank loans
Interest rate swaps (notional principal amount)
Net exposure to cash flow interest rate risk
2021
Bank loans
Interest rate swaps (notional principal amount)
Net exposure to cash flow interest rate risk
Weighted average
interest rate
Balance
$million
2.5%
-
1.4%
-
330.0
-
330.0
180.0
-
180.0
ORORA LIMITED ANNUAL REPORT 2022
111
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 5: Financial risk management (continued)
5.1. Market risks (continued)
5.1.1. Interest rate risk (continued)
Interest rate derivatives used for hedging
The Group did not hold any derivative instruments as at 30 June 2022 (2021: nil) in respect of hedging interest rate risk.
The Group’s interest rate swaps are predominantly classified as cash flow hedges so any movement in the fair value is recognised
directly in equity. The amounts accumulated in equity are transferred to the income statement in the period in which the hedged item
affects profit or loss. During the period no amounts were recognised directly in equity in relation to interest rate swaps (2021: nil).
Sensitivity
At 30 June 2022, if Australian and US interest rates had increased by 1.0% (100 bps), post-tax profit for the year would have been $2.3
million lower (2021: $1.3 million lower), net of derivatives. If interest rates on Australian and US dollar denominated borrowings had
decreased by 1.0% (100 bps), post-tax profit for the year would have been $2.3 million higher (2021: $1.3 million higher), net of
derivatives.
Amounts recognised in profit or loss and other comprehensive income
During the year no amounts, relating to cash flow hedges on interest rate swaps were recognised in other comprehensive income (2021:
nil) and no amounts were recognised in the income statement in respect of hedge ineffectiveness on interest rate swaps (2021: nil). In
addition, during the period there were no amounts relating to cash flow hedges on interest rate swaps that were transferred from equity
to operating profit (2021: nil).
5.1.2. Foreign exchange risk
The Group operates internationally and is therefore exposed to currency risk arising from movements in foreign currency rates, primarily
with respect to the US Dollar and NZ Dollar. The foreign exchange risk arises from:
•
recognised monetary assets and liabilities held in a non-functional currency and net investments in foreign operations (translation
risk); and
• differences in the dates foreign currency commercial transactions are entered into and the date they are settled (transaction risk).
Translation risk
To limit translation risk exposure the Group’s borrowings are generally denominated in currencies that match the cash flows generated
by the underlying operations of the Group, which are primarily Australian and US dollars. Interest payable on those borrowings is
denominated in the currency of the borrowing. In respect of the US operations this provides a natural economic hedge without requiring
derivatives to be entered into.
Exposure
The summary quantitative data about the Group’s exposure to translation currency risk, as reported to the management of the Group, is
as follows:
$ million
Funds employed
Net Debt
2022
USD
729.9
(336.8)
NZD
65.3
19.1
2021
USD
663.0
(300.8)
NZD
63.8
17.0
46.1%
(29.2%)
45.4%
(26.6%)
112
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Transaction risk
To manage foreign currency transaction risk, where a natural hedge does not exist, the Group’s policy is to hedge material foreign
currency denominated expenditure at the time of commitment and to hedge a proportion of foreign currency denominated forecasted
exposures on a rolling 18-month basis (mainly relating to export sales, the purchase of inventory and capital expenditure and the
resulting payables) through the use of forward foreign exchange contracts or foreign currency options taken out for up to two years from
the forecast date.
The Group’s exposure to foreign currency risk at the end of the reporting period in respect of foreign denominated monetary items,
expressed in Australian dollars, was as follows:
$ million
2022
Trade receivables
Trade payables
Foreign currency forwards
Cash flow hedges
Buy foreign currency
Sell foreign currency
Fair value hedges
Buy foreign currency
Held for trading
Buy foreign currency
Sell foreign currency
2021
Trade receivables
Trade payables
Foreign currency forwards
Cash flow hedges
Buy foreign currency
Sell foreign currency
Held for trading
Buy foreign currency
Sell foreign currency
USD
NZD
EUR
GBP
19.9
(142.8)
116.7
-
112.3
8.7
-
0.7
-
-
2.5
-
-
0.4
10.1
(13.0)
0.6
(0.2)
141.7
-
4.0
-
-
2.8
-
0.4
-
(1.2)
7.4
-
-
2.0
-
-
(1.5)
-
3.9
0.3
-
-
(0.3)
3.9
-
-
-
-
-
-
4.4
-
-
-
ORORA LIMITED ANNUAL REPORT 2022
113
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 5: Financial risk management (continued)
5.1. Market risks (continued)
5.1.2. Foreign exchange risk (continued)
Forward exchange derivatives used for hedging
The below carrying values represent the fair value of instruments used to hedge foreign exchange risk together with the associated
nominal volume:
2022
Cash flow hedges
AUD/USD
AUD/EUR
AUD/GBP
NZD/USD
NZD/AUD
Fair value hedges
AUD/USD
NZD/USD
Notional
Item
Weighted
Average
$ million
Asset
Liability
USD109.3
EUR9.4
GBP3.9
USD16.1
NZD2.9
0.7226
0.6442
0.5417
0.6391
0.9296
USD95.2
USD17.1
0.7277
0.6766
7.0
0.1
-
0.6
0.1
7.0
1.9
-
(0.3)
(0.3)
-
-
-
-
Total derivatives in an asset/(liability) position
16.7
(0.6)
2021
Cash flow hedges
AUD/USD
AUD/EUR
AUD/GBP
NZD/USD
NZD/AUD
Total derivatives in an asset/(liability) position
Sensitivity
USD118.5
EUR4.2
GBP4.4
USD27.2
NZD3.2
0.7619
0.6339
0.5448
0.7055
0.9293
3.0
0.1
-
0.8
-
3.9
(0.6)
-
-
(0.4)
-
(1.0)
The following sensitivity illustrates how a reasonably possible change in the US dollar and NZ dollar would impact the financial results
and position of the Group as at 30 June:
•
•
if the Australian dollar had weakened by 10% against the US dollar with all other variables held constant, post-tax profit would have
been $9.1 million higher, net of derivatives, and equity would have been $20.9 million higher (2021: post-tax profit $0.4 million higher
and equity $14.8 million higher).
if the Australian dollar had weakened by 10% against the NZ dollar with all other variables held constant, there would have been no
material impact upon post-tax profit and equity would have been $0.4 million lower (2021: no material impact upon post-tax profit
and equity would have been $0.6 million lower).
Amounts recognised in profit or loss and other comprehensive income
Within general and administrative expense in the income statement the Group recognised a net foreign exchange loss of $0.7 million
(2021: $0.3 million loss) and, in respect of foreign currency derivatives designated at fair value through profit or loss, a gain of $0.4
million (2021: $0.2 million gain).
In addition, a gain of $9.9 million (2021: $2.9 million gain) relating to cash flow hedges and a $27.3 million gain (2021: $35.4 million loss)
on the translation of foreign operations was recognised in other comprehensive income. Gains of $2.5 million (2021: $5.7 million loss)
relating to cash flow hedges were transferred from equity to operating profit, whilst gains of $4.6 million were transferred from equity to
non-financial assets (2021: nil).
114
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
5.1.3. Commodity price risk
The Group is exposed to commodity price risk arising from the purchase of aluminium and the price of electricity.
Energy prices
To manage the risk associated with the variability of wholesale electricity prices in Australia the Group utilises Power Purchase
Arrangements (PPAs). These contracts are entered into in order to economically hedge exposure to fluctuations in electricity prices by
purchasing electricity at predetermined prices.
These derivative instruments meet the requirements for hedge accounting. Settlement of the contracts require exchange of cash for the
difference between the contracted and spot market price. The contracts are measured at fair value and the resultant gains or losses that
effectively hedge designated risk exposures are deferred within the cash flow hedge reserve.
At 30 June 2022 the net carrying value, and fair value, of the instruments used to hedge commodity price risk in respect of electricity
prices is a net liability of $0.5 million (2021: $0.9 million net liability).
Aluminium purchases
Commodity derivatives used for hedging
The below carrying values represent the fair value of instruments used to hedge commodity price risk together with the associated
nominal volume as at 30 June 2022 (2021: nil):
2022
Fair value hedges
Commodity LME price (USD / mt)
Total derivatives in an asset/(liability) position
Notional
Item
Average
Price
$ million
Asset
Liability
USD6.9
2,778.2
-
-
(0.6)
(0.6)
In managing commodity price risk associated with aluminium purchases the Group is able to pass on the price risk contractually to
customers through rise and fall adjustments. In the case of aluminium some hedging is undertaken using fixed price swaps on behalf of
certain customers. Hedging undertaken is upon customer instruction and all related benefits and costs are passed through to the
customer on maturity of the transaction.
The movements in commodity hedges are recognised in equity and the cumulative amount of the hedge is recognised in the income
statement when the forecast transaction is realised. There is no impact on profit as a result of movements in commodity prices where
hedges have been put in place as the Group passes the price risk contractually through to customers. As the Group ultimately passes on
the movement risk associated with commodity prices to customers, no sensitivity has been performed.
5.1.4. Employee Share Plan risk
The Group is exposed to movements in the value of ordinary shares of the Company in respect of the obligations under the Group’s
Employee Share Plans (refer note 7.1). To mitigate this risk the Group has established the Orora Employee Share Trust (the Trust) to
manage and administer the Group’s responsibilities under the Employee Share Plans through the acquiring, holding and transferring of
shares, or rights to shares, in the Company to participating employees.
As at 30 June 2022, the Trust holds 3,485,020 treasury shares in the Company (2021: 306,567) of which 461,347 are allocated shares in
respect of the Restricted Share Unit (RSU) grants (2021: 80,000). Refer to note 6.2 for further details.
ORORA LIMITED ANNUAL REPORT 2022
115
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 5: Financial risk management (continued)
5.2. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. It arises principally from the Group’s receivables from customers, cash and cash equivalents and in-the-money derivatives.
There is also credit risk relating to the Group’s own credit rating as this impacts the availability and cost of future finance.
The Group manages credit risk through the maintenance of procedures such as the utilisation of systems of approval, granting and
renewal of credit limits, regular monitoring of exposures against such credit limits and assessing the overall financial stability and
competitive strength of the counterparty on an ongoing basis.
Trade and other receivables
Credit risk exposures related to trade and other receivables are discussed in note 3.1.
Cash and cash equivalents and derivatives
Credit risk related to balances with banks and financial institutions is managed by Orora Group Treasury in accordance with the Group’s
Treasury Risk Management Policy. The policy only allows financial derivative instruments to be entered into with high credit quality
financial institutions with a minimum long-term credit rating of BBB+ or better by Standard & Poor’s. In addition, the Board has approved
the use of these financial institutions, and specific internal guidelines have been established with regards to limits, dealing and
settlement procedures.
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any
security held, is equivalent to the carrying amount and classification of the financial assets (net of any provisions) as presented in the
statement of financial position.
Guarantees
The Group’s policy is to provide financial guarantees only to certain parties securing the liabilities of subsidiaries. These are only provided
in exceptional circumstances (refer note 7.3).
5.3. Liquidity and funding risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s financing policy is to
fund itself for the long term by using debt instruments with a range of maturities and to ensure access to appropriate short-term
facilities. Orora Group Treasury aims to maintain flexibility within the funding structure through the use of bank overdrafts and bank
loans.
Management manages liquidity risk through maintaining minimum undrawn committed liquidity of at least $150.0 million that can be
drawn upon at short notice and regularly monitoring rolling forecasts of cash inflows and outflows in relation to the Group’s activities.
This monitoring includes financial ratios to assess possible future credit ratings and headroom and takes into account the accessibility of
cash and cash equivalents.
Financing arrangements
In addition to a range of short-term uncommitted credit lines, as at 30 June 2022 the Group had access to the following committed facilities:
• $350.0 million through a revolving multicurrency facility, provided by a syndicate of domestic and international financial institutions
maturing in November 2024.
• USD243.0 million via a US Private Placement of notes of which USD100.0 million matures in July 2023 and USD143.0 million matures in
July 2025.
• USD150.0 million through a USD revolving facility, provided by a syndicate of domestic and international financial institutions, maturing
in April 2024.
• $35.0 million and $100.0 million through bilateral agreements which mature in April 2023 and July 2027 respectively.
These facilities are unsecured.
116
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
The committed and uncommitted standby arrangements and unused facilities of the Group are set out below:
$ million
Financing facilities available:
Bank overdrafts
US Private placement
Loan facilities and term debt
Facilities utilised:
Bank overdrafts
US Private placement
Loan facilities and term debt
Facilities not utilised:
Bank overdrafts
US Private placement
Loan facilities and term debt
Committed
2022
Uncommitted
Total
Committed
2021
Uncommitted
Total
-
352.1
702.4
1,054.5
-
352.1
330.0
682.1
-
-
372.4
372.4
6.2
-
73.0
79.2
-
-
-
-
6.2
-
73.0
79.2
6.2
352.1
775.4
1,133.7
-
352.1
330.0
682.1
6.2
-
445.4
451.6
-
324.1
585.1
909.2
-
324.1
180.0
504.1
-
-
405.1
405.1
6.3
-
127.7
134.0
6.3
324.1
712.8
1,043.2
-
-
-
-
6.3
-
127.7
134.0
-
324.1
180.0
504.1
6.3
-
532.8
539.1
ORORA LIMITED ANNUAL REPORT 2022
117
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 5: Financial risk management (continued)
5.3. Liquidity and funding risk (continued)
Maturity of financial liabilities
The table below allocates the Group’s financial liabilities, including derivatives, into relevant maturity groupings based on the period
remaining until the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows (including
interest), so will not always reconcile with the amounts disclosed in the statement of financial position:
$ million
2022
Non-derivative financial instruments
Trade and other payables
Lease liabilities
Borrowings
Total non-derivatives
Derivatives
Net settled (interest rate swaps and commodity
contracts)
Gross settled forward exchange contracts
Inflow
Outflow
Total gross settled forward exchange contracts
Total derivatives
2021
Non-derivative financial instruments
Trade and other payables
Lease liabilities
Borrowings
Total non-derivatives
Derivatives
Net settled (interest rate swaps and commodity
contracts)
Gross settled forward exchange contracts
Inflow
Outflow
Total gross settled forward exchange contracts
Total derivatives
1 year
or less
931.2
55.9
56.0
1,043.1
1-2 years
2-5 years
More than
5 years
Total
contractual
cash flows
Carrying amount
(assets)/
liabilities
0.5
48.6
160.7
209.8
1.4
106.2
467.5
575.1
3.1
28.8
50.0
81.9
936.2
239.5
734.2
1,909.9
936.2
224.5
681.6
1,842.3
(1.1)
-
344.9
(329.9)
15.0
13.9
650.8
57.0
14.8
722.6
26.6
(25.5)
1.1
1.1
0.3
53.8
14.5
68.6
(1.1)
(1.1)
-
-
-
-
-
-
-
-
-
-
371.5
(355.4)
16.1
15.0
16.1
15.0
652.6
252.8
503.5
1,408.9
1.5
128.9
522.2
652.6
-
49.4
0.3
49.7
652.6
289.1
551.8
1,493.5
(0.8)
(0.1)
195.4
(192.7)
2.7
1.9
16.0
(15.8)
0.2
0.1
-
-
-
-
-
-
-
-
-
-
(0.9)
(0.9)
211.4
(208.5)
2.9
2.0
2.9
2.0
118
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
5.4. Hedging instruments
Hedging activities and the use of derivatives
What is a derivative?
A derivative is a type of financial instrument typically used to manage risk. A derivative’s value changes over time in response to underlying
variables, such as exchange rates or interest rates, and is entered into for a fixed period of time. A hedge is where a derivative is used to
manage exposure in an underlying variable.
The Group is exposed to certain market risks which include foreign exchange risk, interest rate risk and commodity price risk. In accordance
with Board approved policies the Group manages these risks by using derivative financial instruments to hedge the underlying exposures.
Why do we need them?
The key market risks facing the Group:
•
•
Foreign currency transaction risk is the risk that currency fluctuations will have a negative effect on the value of the Group's future cash
flows due to changes in foreign currency between the date a commercial transaction is entered into and the date at which the
transaction is settled.
Interest rate risk arises from fluctuations in variable market interest rates impacting the fair value or future cash flows on long-term
borrowings.
• Commodity price risk arises from significant changes in the price of energy and key raw material inputs, in particular the purchase of
aluminium.
How do we use them?
The Group employs the following derivative financial instruments when managing its foreign currency, interest rate and commodity price
risk:
•
•
Forward exchange contracts and options are derivative instruments used to hedge transaction risk. They enable the sale or purchase of
foreign currency at a known fixed rate on an agreed future date. The Group holds forward exchange contracts and options denominated
in US Dollars, Euros, British Pounds and NZ Dollars to hedge highly probable forecast sale and purchase transactions (cash flow hedges);
Interest rate swaps are derivative instruments used to manage interest rate risk. They enable the exchange of a fixed rate of interest for
a floating rate, or vice versa, or one type of floating rate for another. These derivatives are entered into to manage the Group’s exposure
to fixed and floating interest rates arising from borrowings. These hedges may incorporate cash flow hedges, which fix future interest
payments, and fair value hedges, which reduce the Group’s exposure to changes in the value of its assets and liabilities arising from
interest rate movements.
• Power Purchase Arrangements are derivative instruments that are used to hedge transaction risk associated with the variability of
wholesale electricity prices in Australia. These forward commodity contracts exchange a variable wholesale price of electricity for a
fixed electricity price.
In respect of managing commodity price risk associated with aluminium purchases the Group uses forward commodity contracts. Forward
commodity contracts are derivative instruments used to hedge price risk, so they enable the purchase of aluminium raw materials at a
known fixed rate on an agreed future date. On behalf of customers, aluminium hedging is undertaken using fixed price swaps. Where
contracted, the Group passes on the price risk of commodities contractually through to customers, including any benefits and costs relating
to swaps upon their maturity (fair value hedge).
All derivative financial instruments utilised by the Group are hedges of highly probable forecast transactions with a hedge ratio of 1:1,
therefore the change in the hedging instrument is equal to the change in the value of the underlying hedged item.
Derivative financial instruments are only undertaken if they relate to underlying exposures, the Group does not use derivatives to speculate.
Analysis of the derivatives used by the Group to hedge its exposure and the various methods used to calculate their respective fair values
are detailed in this section.
Accounting policies
Derivative financial instruments are recognised initially at fair value on the date the instrument is entered into and are subsequently
remeasured at fair value or ‘marked to market’ at each reporting date. The gain or loss on remeasurement is recognised immediately in
the income statement unless the derivative is designated as a cash flow hedging instrument in which case the remeasurement is
recognised in equity.
Hedge accounting
At the inception of the hedge relationship, the Group formally designates the relationship between hedging instruments and hedged
items, as well as its risk management objective for undertaking various hedge transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, as to whether the derivatives that are used in hedging transactions have been and will
continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. Where option contracts are used to
hedge forecast transactions, only the intrinsic value of the option contract is designated as the hedging instrument.
ORORA LIMITED ANNUAL REPORT 2022
119
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 5: Financial risk management (continued)
5.4. Hedging instruments (continued)
Rebalancing
If the hedging ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the
hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging
instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes. Any hedge
ineffectiveness is calculated and accounted for in profit or loss at the time of the hedge relationship rebalancing.
For the purposes of hedge accounting, hedges are classified as fair value hedges, cash flow hedges or net investment hedges and are
accounted for as set out in the table below.
Fair value hedge
Cash flow hedge
Net investment hedge
A derivative or financial instrument
designated as hedging the change
in fair value of a recognised asset or
liability or firm commitment.
A derivative or financial instrument hedging
the exposure to variability in cash flow
attributable to a particular risk associated
with an asset, liability or forecasted
transaction.
Financial instruments hedging changes
in foreign currency when the net assets
of a foreign operation are translated from
their functional currency into Australian
dollars.
What is it?
Movement in
fair value
Changes in the fair value of the
derivative are recognised in the
income statement, together with
the changes in fair value of the
hedged asset or liability attributable
to the hedged risk.
The effective part of any gain or loss on the
derivative financial instrument is recognised in
other comprehensive income and
accumulated in equity in the hedging reserve.
The change in the fair value that is identified
as ineffective is recognised immediately in the
income statement within ‘other income’ or
‘general and administration expenses.
Amounts accumulated in equity are
transferred to the income statement in the
periods when the hedged item affects profit or
loss (for instance, when the forecast sale that
is hedged takes place). However, when the
forecast transaction that is hedged results in
the recognition of a non-financial asset (for
example, inventory), the gains and losses
previously deferred in equity are transferred
from equity and included in the measurement
of the initial cost or carrying amount of the
asset.
Where options are used, changes in the fair
value of the option are recognised in other
comprehensive income depending on whether
it is designated as the hedging instrument in
its entirety, or its intrinsic value only. If only
the intrinsic value is designated, the option’s
time value that matches the terms of the
hedged item is be recognised in equity and
released to profit or loss over the term of the
hedged item.
When a hedging instrument expires or is sold,
terminated or exercised, or when a hedge no
longer meets the criteria for hedge
accounting, any cumulative gain or loss
existing in equity at that time remains in
equity and is recognised when the forecast
transaction is ultimately recognised in the
income statement. When a forecast
transaction is no longer expected to occur, the
cumulative gain or loss that was reported in
equity is immediately transferred to the
income statement.
On consolidation, foreign currency
differences arising on the translation of
financial assets and liabilities
designated as net investment hedges of
a foreign operation are recognised in
other comprehensive income and
accumulated in the foreign exchange
reserve, to the extent that the hedge is
effective. Any ineffective portion is
recognised in the income statement.
Upon disposal of the foreign operation,
which is subject to the net investment
hedge, the cumulative amount that has
been recognised in equity in relation to
the hedged net investment is transferred
to the income statement and recognised
as part of the gain or loss on disposal.
Discontinuation
of hedge
accounting
If the hedge no longer meets the
criteria for hedge accounting, the
adjustment to the carrying amount
of a hedged item, for which the
effective interest method is used, is
amortised to the income statement
over the period to maturity using a
recalculated effective interest rate.
120
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Fair value measurement
The following table sets out the fair value of derivative financial instruments utilised by the Group, analysed by type of contract. There
were no transfers between level 1 and 2 for recurring fair value measurements during the year. The Group does not hold any material level
1 or 3 financial instruments.
$ million
Cash flow hedges
Interest rate swap contracts
Foreign exchange derivative contracts
Electricity and commodity derivatives
Fair value hedge
Foreign exchange derivative contracts
Total derivatives in an asset/(liability) position
Current asset/(liability)
Non-current asset/(liability)
Judgements and estimates
Level 2 Fair Value Hierarchy
2022
2021
Note
Asset
Liability
Asset
Liability
5.1.1
5.1.2
5.1.3
5.1.2
-
7.8
0.2
8.9
16.9
15.8
1.1
-
(0.6)
(1.3)
-
(1.9)
(1.9)
-
-
3.9
0.8
-
4.7
4.2
0.5
-
(1.0)
(1.7)
-
(2.7)
(2.3)
(0.4)
The Orora Group Treasury team performs the financial instrument valuations and reports directly to the Chief Financial Officer (CFO) and the
Audit, Risk & Compliance Committee. Discussions of valuation processes and results are held with the CFO and Orora Group Treasury at
least once every six months, in line with the Group’s half-yearly reporting requirements. Significant valuation issues are reported to the
Audit, Risk & Compliance Committee.
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are categorised
into three levels as prescribed under accounting standards, with each of these levels indicating the reliability of the inputs used in
determining fair value. The levels in the fair value hierarchy are:
Level 1: Financial instruments traded in an active market (such as publicly traded derivatives, and trading and available-for-sale securities).
Fair value is from a quoted price, for an identical asset or liability at the end of the reporting period, traded in an active market. The quoted
market price used for assets is the last bid price.
Level 2: Financial instruments that are not traded in an active market (for example over-the-counter derivatives). Fair value is determined
using valuation techniques that maximise the use of observable market data and rely as little as possible on entity-specific estimates. All
significant inputs used in the valuation method are observable.
Level 3: Financial instruments for which no market exists in which the instrument can be traded. Where one or more of the significant inputs
in determining fair value for the asset or liability is not based on observable market data (unobservable input), the instrument is included in
level 3.
Determining fair value
The specific valuation techniques used to value derivative financial instruments are as follows:
•
•
•
the fair value of forward exchange contracts and currency options is determined by using the difference between the contract
exchange rate and the quoted exchange rate at the reporting date;
the fair value of interest rate swaps is determined by calculating the present value of the estimated future cash flows – i.e. the amounts
that the Group would receive or pay to terminate the swap at the reporting date, based on observable yield curves; and
the fair value of electricity and aluminium commodity forward contracts is determined by using the difference between the contract
commodity price and the quoted commodity price at the reporting date.
ORORA LIMITED ANNUAL REPORT 2022
121
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 6: Group structure
In this section
This section provides information on those subsidiaries whose results principally affect the financial results of the Group, including details
of the divestments and acquisitions that occurred during the period.
Details of the Orora Employee Share Trust are also discussed below.
6.1. Principal subsidiary undertakings and investments
The ultimate parent of the Group is Orora Limited, a company incorporated in Australia. The companies listed below are those whose
results, in addition to the parent Company, principally affect the figures shown within the Annual Report:
Controlled entities
Orora Packaging Australia Pty Ltd
Orora Packaging New Zealand Ltd
Orora Packaging Solutions
Landsberg Orora
Orora Packaging Texas LP
Kent H. Landsberg Co of Illinois LLC
Orora Visual TX LLC
Orora Visual LLC
Pollock Investments Incorporated
Country of
incorporation
Ownership interest
2021
2022
Australia
New Zealand
United States
United States
United States
United States
United States
United States
United States
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
6.2. Orora Employee Share Trust
The Group holds shares in itself as a result of shares purchased by the Orora Employee Share Trust (the Trust). The Trust was established
to manage and administer the Company’s responsibilities under the Group’s Employee Share Plans (refer note 7.1) through the acquiring,
holding and transferring of shares, or rights to shares, in the Company to participating employees. In respect of these transactions, at
any point in time the Trust may hold ‘allocated’ and ‘unallocated’ shares.
As at 30 June 2022, the Trust held 3,485,020 treasury shares in the Company (2021: 306,567) of which 461,347 are allocated shares in
respect of the Restricted Share Unit (RSU) grants (2021: 80,000).
Allocated shares
Allocated shares represent those shares that have been purchased and awarded to employees under the RSU Grant (refer note 7.1). In
the comparative period the allocated shares also included those shares held on trust in respect of vested grants that contain a post-
vesting holding lock.
Shares granted to an employee under the RSU Grant, and vested shares that contain a post-vesting holding lock, are restricted in that the
employee is unable to dispose of the shares for a period of up to five years (or as otherwise determined by the Board). The Trust holds
these shares on behalf of the employee until the restriction period is lifted at which time the Trust releases the shares to the employee.
Allocated shares are not identified or accounted for as treasury shares.
Where the Orora Employee Share Trust purchases equity instruments in the Company, as a result of managing the Company’s
responsibilities under the Group’s RSU Grant Employee Share Plan award and for those vested shares with a post-vesting holding lock,
the consideration paid, including any directly attributable costs is deducted from equity, net of any related income tax effects.
Unallocated shares
Unallocated shares represent those shares that have been purchased by the Trustee on-market to satisfy the potential future vesting of
awards granted under the Groups Employee Shares Plans, other than the RSU Grant. As the shares are unallocated they are identified and
accounted for as Treasury Shares refer note 2.4.1.
Accounting policies
Transactions with the Group-sponsored Trust are included in these financial statements. In particular, the Trust’s purchases of shares in
Orora Limited are debited directly to equity. The shares are held in the Trust until such time as they may be transferred to participants of
the various Group share schemes.
In accordance with the Trust Deed, the Trustees have the power to exercise all voting rights in relation to any investment (including
shares) held within the Trust.
122
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 7: Other notes to the financial statements
In this section
This section includes additional financial information that is required by the accounting standards and the Corporations Act 2001, including
details about the Group’s employee reward and recognition programs.
7.1. Share-based compensation
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based incentives. The Orora
employee incentive plans have been established to ensure employees are motivated and incentivised to develop and successfully execute
against both short and long-term strategies that grow the business and generate shareholder returns. The plans provide an appropriate level
and mix of short and long-term incentives to appropriately recognise and reward employees creating a high-performance culture and Orora’s
ability to attract and retain talent. Orora’s remuneration strategy is competitive in the relevant markets to support the attraction and
retention of talent.
The following information provides details of Orora’s employee incentive plans. During the period the Group recognised a share-based
payment expense of $5.7 million (2021: $0.9 million). Employee expenses and employee provisions are shown in note 1.5 and 3.9
respectively.
This note should be read in conjunction with the Remuneration Report, as set out in the Directors’ Report, which contains detailed
information regarding the setting of remuneration for Key Management Personnel.
The following table details the total movement in the RSU Grant, Share Options, Performance Rights or Performance Shares issued by the
Group:
RSU Grant
Share Options
Performance Rights and
Performance Shares
Deferred Equity(1)
Long-Term Incentive Plans
Short-Term Incentive Plan
No.
$(2)
No.
$(2)
No.
$(2)
No.
2022
Outstanding at beginning of period
Granted during the period
Exercised during the period
Forfeited during the period
Outstanding at end of period
80,000
463,075
(65,000)
(16,728)
461,347
3.22
3.57
3.26
3.62
3.55
4,635,817
-
-
(3,183,125)
1,452,692
Exercisable at end of period
-
-
226,567
2021
Outstanding at beginning of period
Granted during the period
Exercised during the period
Forfeited during the period
Outstanding at end of period
168,000
-
(88,000)
-
80,000
3.23
-
3.23
-
3.22
9,438,208
-
(470,061)
(4,332,330)
4,635,817
Exercisable at end of period
-
-
487,128
0.55
-
-
0.63
0.39
0.43
0.54
-
0.44
0.54
0.55
0.43
4,793,172
1,688,568
(162,000)
(1,294,840)
5,024,900
-
4,890,338
2,199,647
(5,000)
(2,291,813)
4,793,172
-
2.00
2.05
2.98
2.20
1.93
-
2.14
1.68
1.69
1.99
2.00
-
610,707
1,006,900
(194,817)
(47,610)
1,375,180
-
581,689
441,007
(376,970)
(35,019)
610,707
-
$(2)
2.31
3.13
2.65
2.57
2.85
-
2.94
2.14
3.03
2.94
2.31
-
(1) The equity outcomes for the 2022 financial year short-term incentive will be determined and allocated in September 2022 and are therefore not included in the
above table.
(2) The above weighted average fair value is determined in accordance with AASB 2 Share-based Payment in respect of recognising the share-based payment
expense of the award granted.
ORORA LIMITED ANNUAL REPORT 2022
123
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 7: Other notes to the financial statements (continued)
7.1. Share-based compensation (continued)
The exercise price of the RSU Grant, Performance Rights and Performance Shares and Deferred Equity Awards are nil. The exercise price
of Share Options outstanding at the end of the year are set out below:
Grant date
Vesting Date
Expiry date
Exercise price
30 Oct 2015
20 Oct 2017
22 Oct 2018
30 Sept 2019
30 Aug 2021
31 Aug 2022
30 Sept 2024
30 Aug 2026
31 Aug 2027
2.08
2.86
3.58
Share options outstanding at end of period
Weighted average contractual life of options outstanding at end of period
Number
2022
2021
226,567
-
1,226,125
226,567
3,183,125
1,226,125
1,452,692
4,635,817
4.7 years
5.3 years
Accounting policies
The cost of the share-based compensation provided to employees is measured using the fair value at the date at which the option or
right is granted and is recognised as an employee benefit expense in the income statement with a corresponding increase in the share-
based payment reserve in equity. The expense is spread over the vesting period during which the employees become unconditionally
entitled to the option or right granted. Upon exercise of the option or right, the balance of the share-based payment reserve, relating to
the option or right, is transferred to share capital.
At each reporting period the Group revises the estimate of the number of options that are expected to vest based on the non-market
vesting conditions. Any impact to the revision of an original estimate is recognised in the income statement with a corresponding
adjustment to the share-based payment reserve. The employee expense, recognised each period, reflects the most recent estimate. The
fair value of options is measured at grant date taking into account market performance conditions, but excludes the impact of any non-
market conditions (e.g. profitability and earnings growth targets). Non-market vesting conditions are included in the assumptions about
the number of options that are expected to be exercisable.
The fair value of each option granted is measured on the date of grant using the Black Scholes option pricing model that takes into
account the exercise price, the vesting and performance criteria, and where applicable the market condition criteria, term of the option,
impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk free interest rate for the term of the option.
The fair value of rights is measured at grant date using a Monte-Carlo valuation model which simulates the date of vesting, the
percentage vesting, the share price and total shareholder return. Once the simulated date of vesting is determined a Black-Scholes
methodology is utilised to determine the fair value of the rights granted.
The following weighted average assumptions were used in determining the fair value of options and rights granted during the period:
Expected dividend yield (%)
Expected price volatility of the Company's shares (%)
Share price at grant date ($)
Risk-free interest rate - rights (%)
Expected life of rights (years)
No options were granted during the current period (2021: nil).
2022
2021
4.70
31.00
3.16
0.31
4.00
4.30
29.19
2.56
0.13
3.67
The dividend yield reflects the assumption that the current dividend payout will continue with no anticipated changes. The expected price
volatility, of the Company’s shares, reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
124
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
A description of the equity plans in place during the year ended 30 June 2022 is described below:
Retention/Share Payment plan
Long-term incentives
Short-term incentive
RSU Grant
Share Options
Performance Rights and
Performance Shares
Deferred Equity
Under the long-term incentive plan, share options or
Provides an additional short-
•
term incentive opportunity to
selected employees, in the form
of rights to ordinary shares. The
number of rights that are
allocated to each eligible
employee is based on:
• 33.3% of the value of the
cash bonus payable under
the Short-Term Incentive
Plan, following the end of
the performance period;
the volume weighted
average price of Orora
Limited ordinary shares for
the five trading days up to
and including 30 June,
being the end of the
performance period; and
• where cash bonuses are
determined in currencies
other than Australian
dollars, the average foreign
exchange rate for the same
five-day period.
Remain in employment of the
Group at vesting date.
Overview
The Board endorses certain
employees as eligible to
receive ordinary shares in
part satisfaction of their
remuneration for the relevant
financial year. The number of
shares issued is at the
discretion of the Board.
The restrictions on these
shares do not allow the
employee to dispose of the
shares within the
vesting/restriction period.
The shares subject to the
RSU Grant carry full dividend
entitlements and voting
rights.
performance rights over ordinary shares in the Company, or
performance shares, may be issued to employees. The exact
terms and conditions of each award are determined by the
Directors of the Company at the time of grant.
The Group has ceased offering share options under the long-
term incentive plan. The last share option grant was issued
in FY19, with a performance period end date of 30 June 2022.
Give the employee the right
to acquire a share at a future
point in time upon meeting
specified vesting conditions,
described below, and require
payment of an exercise price.
The share options are granted
at no consideration and carry
no dividend entitlement or
voting rights until they vest
and are exercised to ordinary
shares on a one-for-one
basis.
Give the employee the right
to receive a share at a future
point in time upon meeting
specified vesting conditions,
as described below, no
exercise price is payable.
The rights are granted at no
consideration and carry no
dividend entitlement or voting
rights until they vest and
convert to ordinary shares on
a one-for-one basis.
Vesting
conditions
Subject to alignment of
performance with Orora’s
Values as assessed by the
Board and the employee
remaining in employment of
the Group at the vesting date.
Subject to meeting an
Earnings per Share (EPS)
hurdle, the satisfaction of a
Return on Average Funds
Employed (RoAFE) gateway
test, and the employee
remaining in employment of
the Group at the vesting date.
For grants issued FY20
onwards, 50% are subject to
meeting a relative Total
Shareholder Return (TSR) and
the satisfaction of an
absolute TSR gateway test,
and 50% are subject to
meeting an EPS hurdle and
the satisfaction of a RoAFE
gateway test.
For grants issued prior to
FY20, two-thirds are subject
to meeting a relative Total
Shareholder Return test, the
remaining one-third is subject
to meeting an EPS hurdle and
the satisfaction of a RoAFE
gateway test.
Vesting of the rights is
subject to the employee
remaining in employment of
the Group at vesting date.
Vesting
period
Vested
awards
Unvested
awards
Up to 5 years
4 years
4 years
2 years
Restriction lifted upon
vesting.
Vested share options will
remain exercisable until the
expiry date. On expiry, any
vested but unexercised share
options will lapse.
Shares are issued upon
vesting.
Shares issued upon vesting.
Unvested awards are forfeited if the employee voluntarily ceases employment or is dismissed for cause or poor performance.
ORORA LIMITED ANNUAL REPORT 2022
125
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 7: Other notes to the financial statements (continued)
7.2. Auditors’ remuneration
$ thousand
Auditors of the Company PwC Australia
Audit and other assurance services
Audit and review of financial reports
Other services
Taxation services and other advice
Australasian Fibre business divestment advisory services(1)
Total PwC Australia
Network firms of PwC Australia
Audit and other assurance services
Audit and review of financial reports
Other services
Taxation services and other advice
Total Network firms of PwC Australia
Total Auditors remuneration
2022
2021
992.1
848.2
254.5
-
154.8
178.0
1,246.6
1,181.0
14.0
15.0
52.3
66.3
46.3
61.3
1,312.9
1,242.3
(1) Taxation and other related services provided in respect of the sale of the Australasian Fibre business. Further details regarding the sale of the Australasian Fibre
business can be found in the 2021 and 2020 Annual Reports.
7.3. Commitments and contingent liabilities
7.3.1. Capital expenditure commitments
At 30 June 2022, the Group has capital commitments contracted but not provided for in respect of the acquisition of property, plant and
equipment of $61.8 million (2021: $20.7 million).
7.3.2. Other expenditure commitments
At 30 June 2022, the Group had other expenditure commitments of $51.7 million (2021: $37.1 million) in respect of other supplies and
services yet to be provided.
7.3.3. Contingent liabilities
A contingent liability is a liability that is not sufficiently certain to qualify for recognition as a provision where uncertainty may exist
regarding the outcome of future events.
Guarantees
The Group has issued a number of bank guarantees to third parties for various operational and legal purposes. In addition, Orora Limited
has guaranteed senior notes issued by Landsberg Orora in the US private placement market, the notes have maturities between 2023
and 2025 (see note 2.3). It is not expected that these guarantees will be called on.
Other
Certain entities in the Group are party to various legal actions and exposures that have arisen in the ordinary course of business. The
actions are being defended and the Directors are of the opinion that provisions are not required as no material losses are expected to
arise.
Judgements and estimates
Legal proceedings
The outcome of currently pending and future legal, judicial, regulatory and other proceedings of a litigious nature cannot be predicted with
certainty. Legal proceedings can raise difficult and complex issues and are subject to many uncertainties and complexities including, but
not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which each proceeding is brought
and differences in applicable law.
An adverse decision in a legal proceeding could result in additional costs that are not covered, either wholly or partially, under insurance
policies, which could significantly impact the business and the results of operations of the Group.
Each legal proceeding is evaluated on a case-by-case basis considering all available information, including that from legal counsel, to assess
potential outcomes. Where it is considered probable that a future obligation will result in an outflow of resources, a provision is recognised
in the amount of the present value of the expected cash outflows, if these are deemed to be reliably measurable.
126
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
7.4. Orora Limited
Orora Limited financial information
The financial information for the parent entity Orora Limited has been prepared on the same basis as the consolidated financial
statements, except as set out below.
Investments in subsidiaries
In the Company’s financial statements, investments in subsidiaries are carried at cost less, where applicable, accumulated impairment
losses.
Nature of tax sharing agreement
Upon tax consolidation, the entities within the tax-consolidated group entered into a tax sharing agreement. The terms of this agreement
specify the methods of allocating any tax liability in the event of default by the Company on its group payment obligations and the
treatment where a subsidiary member exits the group. The tax liability otherwise remains with the Company for tax purposes.
Orora Limited and its wholly-owned Australian resident entities have formed a tax-consolidated group and are therefore taxed as a single
entity. The head entity within the tax-consolidated group is Orora Limited.
The Company, and the members of the tax-consolidated group, recognise their own current tax expense/income and deferred tax assets
and liabilities arising from temporary differences using the ‘stand-alone taxpayer’ approach by reference to the carrying amounts of
assets and liabilities in the separate financial statements of each entity and the tax values applying under tax consolidation.
In addition to its current and deferred tax balances, the Company also recognises the current tax liabilities (or assets), and the deferred
tax assets arising from unused tax losses and unused tax credits assumed from members of the tax-consolidated group, as part of the
tax-consolidation arrangement. Assets or liabilities arising as part of the tax consolidation arrangement are recognised as current
amounts receivable or payable from the other entities within the tax-consolidated group.
Summarised income statement and comprehensive income
$ million
Continuing Operations
Profit before related income tax expense
Income tax expense
Profit for the financial period from continuing operations
Discontinued Operations
Profit from discontinued operations, net of tax (1)
Profit for the financial period
Comprehensive income for the financial period
Continuing operations
Discontinuing operations
Total comprehensive income
Orora Limited
2021
2022
199.9
(29.2)
170.7
(2.4)
168.3
172.7
(2.4)
170.3
209.9
(24.9)
185.0
6.1
191.1
190.5
6.1
196.6
(1) On 30 April 2020, the Group completed the sale of its Australasian Fibre business. On 29 September 2020, the Group finalised the post-close completion
accounts process. Accordingly, the financial results of this business are presented separately as a discontinued operation in both the current and comparative
period. Further details regarding the sale of the Australasian Fibre business can be found in the 2021 and 2020 Annual Reports.
ORORA LIMITED ANNUAL REPORT 2022
127
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 7: Other notes to the financial statements (continued)
7.4. Orora Limited (continued)
Summarised balance sheet
$ million
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity and treasury shares
Reserves:
Share-based payment reserve
Cash flow hedge reserve
Retained profits
Total equity
Contingent liabilities of Orora Limited
Orora Limited
2021
2022
536.2
1,284.7
338.4
1,190.9
1,820.9
1,529.3
752.6
368.9
1,121.5
524.1
225.2
749.3
699.4
780.0
(37.3)
80.8
10.7
3.8
722.2
699.4
8.7
1.8
688.7
780.0
Deed of Cross Guarantee
Pursuant to the terms of the ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785, which relieves certain wholly-owned
subsidiaries from specific accounting and financial reporting requirements, Orora Limited and all of the Company’s Australian wholly-
owned subsidiaries entered into an approved deed for the cross guarantee of liabilities. No liabilities subject to the Deed of Cross
Guarantee at 30 June 2022 are expected to arise to Orora Limited and subsidiaries, as all such subsidiaries were financially sound and
solvent at that date.
Details of the deed and the consolidated financial position of the Company and the subsidiaries party to the Deed are set out in note 7.5.
Other guarantees
Orora Limited has guaranteed senior notes issued by Landsberg Orora in the US private placement market, the notes have maturities
between 2023 and 2025 (see note 2.3). It is not expected that these guarantees will be called on.
7.5. Deed of Cross Guarantee
The Company, Orora Limited, and the subsidiaries listed below are subject to a Deed of Cross Guarantee (Deed) under which each
company guarantees the debts of the others:
• Orora Packaging Australia Pty Ltd
• Pak Pacific Corporation Pty Ltd
• Fibre Containers (Queensland) Pty Ltd
•
Lynyork Pty Ltd
• Chapview Pty Ltd
• AGAL Holdings Pty Ltd
• Rota Die Pty Ltd
• ACN 089523919 CCC Pty Ltd
• Orora Closure Systems Pty Ltd
• Envirocrates Pty Ltd
• ACN 002693843 Box Pty Ltd
Under the terms of ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785, those wholly-owned subsidiaries that have
entered into the Deed are granted relief from the Corporations Act 2001 requirement to prepare and lodge audited Financial Reports and
Directors’ Reports.
128
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Financial statements for the Orora Limited Deed of Cross Guarantee
The consolidated income statement, statement of comprehensive income and statement of financial position of the entities party to the
Deed for the year ended and as at 30 June, are set out below.
Consolidated income statement, statement of comprehensive income and retained earnings.
$ million
Continuing Operations
Sales revenue
Profit from operations
Net finance costs
Profit before related income tax expense
Income tax expense
Profit from continuing operations
Discontinued Operations
(Loss)/profit from discontinued operations, net of tax (1)
Profit for the financial period
Other comprehensive income/(expense)
Cash flow hedge reserve
Unrealised gains on cash flow hedges, net of tax
Realised (gains)/losses transferred to profit or loss, net of tax
Realised gains transferred to non-financial assets, net of tax
Other comprehensive income, net of tax
Total comprehensive income for the financial period
Total comprehensive income/(expense) for the financial period attributable to:
Continuing operations
Discontinuing operations
Total comprehensive income for the financial period
Retained profits at beginning of financial period
Profit for the financial period
Dividends recognised during the financial period
Retained profits at end of the financial period
2022
2021
777.9
215.6
(7.2)
208.4
(30.8)
177.6
727.2
229.8
(9.8)
220.0
(20.9)
199.1
(2.4)
6.1
175.2
205.2
7.0
(1.8)
(3.2)
2.0
2.0
3.7
-
5.7
177.2
210.9
179.6
(2.4)
177.2
204.8
6.1
210.9
771.8
175.2
(134.8)
679.6
205.2
(113.0)
812.2
771.8
(1) On 30 April 2020, the Group completed the sale of its Australasian Fibre business. On 29 September 2020, the Group finalised the post-close completion
accounts process. Accordingly, the financial results of this business are presented separately as a discontinued operation in both the current and comparative
period. Further details regarding the sale of the Australasian Fibre business can be found in the 2021 and 2020 Annual Reports.
ORORA LIMITED ANNUAL REPORT 2022
129
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 7: Other notes to the financial statements (continued)
7.5. Deed of Cross Guarantee (continued)
Consolidated balance sheet
$ million
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivatives
Other current assets
Total current assets
Non-current assets
Investments in controlled entities
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Goodwill and intangible assets
Derivatives
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Derivatives
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Other payables
Borrowings
Lease liabilities
Derivatives
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
Equity
Contributed equity and treasury shares
Reserves
Retained earnings
TOTAL EQUITY
2022
2021
0
18.7
129.0
303.4
15.8
10.2
477.1
567.7
509.9
12.0
-
22.1
1.1
19.7
10.6
139.6
176.6
4.2
12.7
343.7
567.7
456.6
13.1
11.6
22.4
0.5
11.1
1,132.5
1,083.0
1,609.6
1,426.7
357.9
35.1
3.1
1.9
1.2
54.3
453.5
4.9
295.0
12.4
-
5.2
9.5
327.0
223.8
0.1
4.4
2.3
4.2
61.6
296.4
1.5
180.0
17.3
0.4
-
28.3
227.5
780.5
523.9
829.1
902.8
(37.3)
54.2
812.2
829.1
80.8
50.2
771.8
902.8
130
ORORA LIMITED ANNUAL REPORT 2022
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
7.6. Related party transactions
The related parties identified by the Directors include investments and key management personnel.
Details of investment in subsidiaries are disclosed in note 6.1 and details of the Orora Employee Share Trust are provided in note 6.2. The
Group does not hold any interests in associates or joint ventures.
7.6.1. Parent entity
The ultimate parent entity within the Orora Group is Orora Limited, which is domiciled and incorporated in Australia. Transactions with
entities in the wholly-owned Orora Group are made on normal commercial terms and conditions and during the year included:
• purchases and sales of goods and services;
• advancement and repayment of loans;
interest expense paid by Orora Limited for money borrowed;
•
transfer of tax related balances for tax consolidation purposes;
•
• provision of transactional banking facilities on behalf of subsidiaries;
• provision of payroll, superannuation, share-based remuneration and managerial assistance.
7.6.2. Other related parties
Contributions to superannuation funds on behalf of employees are disclosed in note 1.5.
7.7. Key Management Personnel
Key Management Personnel (KMP) consists of Orora Limited Executive and Non-Executive Directors and the Chief Financial Officer. Key
management personnel compensation is as follows:
$ thousand
Short-term employee benefits
Long-term employee benefits
Post employment benefits
Payments on retirement
Share-based payment expense(1)
2022
2021
4,386
66
140
-
1,074
5,666
4,373
41
141
337
(86)
4,806
(1)
The comparative period share-based payment expense includes negative values relating to options and rights that did not vest during the period as non-market
vesting conditions were not met and for rights that were forfeited upon retirement.
Detailed remuneration disclosures are provided in the Remuneration Report section of the Directors’ Report. Apart from the information
disclosed in this note, no Director has entered into a material contract with the Group this financial year and there were no material
contracts involving Directors’ interests existing at year end (2021: nil).
At 30 June 2022, no individual KMP or related party holds a loan with the Group (2021: nil).
ORORA LIMITED ANNUAL REPORT 2022
131
Notes to the
financial statements
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Section 7: Other notes to the financial statements (continued)
7.8. New and amended accounting standards and interpretations
All new and amended Australian Accounting Standards and Interpretations mandatory from 1 July 2021 to the Group have been adopted,
including:
• AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2
• AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions beyond 30 June 2021
•
Implementation of IFRIC Agenda Decision – Costs Necessary to Sell Inventories
The Group has no transactions that are affected by the newly effective standards and interpretations, or the Group’s accounting policies
are already consistent with the new requirements. As such the adoption of the amending standards has not resulted in a change to the
financial results or position of the Group.
Issued but not yet effective
There are a number of new and amending accounting standards issued by the AASB that are effective for annual reporting periods
beginning after 1 January 2022, with early adoption permitted. These standards have not been early adopted and have therefore not been
applied in preparing this financial report.
The following amending standards are not expected to have a significant impact upon the Groups’ consolidated financial statements:
• AASB 2020-1 and AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-
Current
• AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments
• AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting
Estimates
• AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
• AASB 2022-1 Amendments to Australian Accounting Standards – Initial Application of AASB 17 and AASB 9 – Comparative
Information
132
ORORA LIMITED ANNUAL REPORT 2022
Directors’
declaration
1.
In the opinion of the Directors of Orora Limited (the Company):
(a)
the financial statements and notes, and the Remuneration Report within the Directors’ Report, are in accordance with the
Corporations Act 2001 including:
i.
ii.
complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the Orora Group’s financial position as at 30 June 2022 and its performance for the year
ended on that date; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
2. Within the notes to the financial statements it is confirmed that the financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
3. At the date of this declaration, there are reasonable grounds to believe that the Company and the consolidated entities identified in
note 7.5 will be able to meet any obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross
Guarantee between the Company and those consolidated entities pursuant to ASIC Corporations (Wholly-Owned Companies)
Instrument 2016/785.
4. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 by the Managing Director and
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2022.
Signed in accordance with a resolution of the Directors.
A R SINDEL
CHAIR
18 August 2022
ORORA LIMITED ANNUAL REPORT 2022
133
Independent auditor’s report
to the members of Orora Limited
134
ORORA LIMITED ANNUAL REPORT 2022
Independent auditor’s report
to the members of Orora Limited
ORORA LIMITED ANNUAL REPORT 2022
135
Independent auditor’s report
to the members of Orora Limited
136
ORORA LIMITED ANNUAL REPORT 2022
Independent auditor’s report
to the members of Orora Limited
ORORA LIMITED ANNUAL REPORT 2022
137
Independent auditor’s report
to the members of Orora Limited
138
ORORA LIMITED ANNUAL REPORT 2022
Statement
of shareholdings
Statement pursuant to Australian Securities Exchange official list requirements.
Top 20 shareholders as at 27 July 2022
Rank
Name
Shares held % of issued capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
NETWEALTH INVESTMENTS LIMITED
PACIFIC CUSTODIANS PTY LIMITED
PACIFIC CUSTODIANS PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
NAVIGATOR AUSTRALIA LTD
BKI INVESTMENT COMPANY LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
THE MANLY HOTELS PTY LTD
EDWARD ZORN & CO PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
POWERWRAP LIMITED
UBS NOMINEES PTY LTD
Substantial shareholders as at 27 July 2022
Holder
State Street Corporation
The Vanguard Group, Inc.
312,872,465
131,981,604
106,866,961
44,997,000
36,233,041
8,296,190
6,934,782
4,615,176
3,589,160
3,485,020
2,550,108
2,090,577
1,600,000
1,535,609
1,470,178
1,258,507
902,175
831,860
751,725
746,269
37.01
15.61
12.64
5.32
4.29
0.98
0.82
0.55
0.42
0.41
0.30
0.25
0.19
0.18
0.17
0.15
0.11
0.10
0.09
0.09
673,608,407
79.68
Last Notice of
Substantial
Shareholding
No. of Shares
22 July 2022
42,331,792
18 December 2018
48,284,772(1)
(1)
Calculated based on number of shareholdings reported in the latest notice to ASX, on a basis of each five shares to be consolidated to four shares, fractions
rounded up to the next whole number.
ORORA LIMITED ANNUAL REPORT 2022
139
Statement
of shareholdings
Distribution of shareholdings
Fully paid ordinary shares as at 27 July 2022
Range
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable parcels
No. of holders.
No. of shares % of issued capital
115
3,241
4,669
17,598
14,897
40,520
1,777
695,150,014
67,522,401
32,949,538
42,431,472
7,298,365
845,351,790
85,224
82.23
7.99
3.90
5.02
0.86
100.00
0.01
Voting rights
Votes of shareholders are governed by Rules 17 and 18 of the Company’s Constitution. In broad summary, but without prejudice to the
provisions of these rules, on a show of hands every shareholder present in person shall have one vote and upon a poll every shareholder
present in person, or by proxy or attorney, shall have one vote for every fully paid share held.
Unquoted equity securities — Issued pursuant to various
Orora Limited Employee Incentive Plans as at 27 July 2022
Unquoted equity securities
No. of employees participating
No. of securities
Options over ordinary shares – exercise price $2.08
Options over ordinary shares – exercise price $3.58
Rights
1
6
55
226,567
1,226,125
6,400,080
140
ORORA LIMITED ANNUAL REPORT 2022
Five-year historical
financial information
Results shown for all operations before significant items except where indicated[1]
$ million (except where indicated)
For the years ended 30 June
Orora Consolidated Results
Sale revenue
Operating profit before interest and tax pre significant items
Operating profit before tax pre significant items
Net operating profit pre significant items
Net operating profit after significant items
Basic earnings per share (cents) pre significant items
Basic earnings per share (cents) after significant items
Dividend and distribution
Dividend per ordinary share (cents)
Dividend franking (% p.a)
Dividend cover (times)
Financial Ratios
Net tangible asset backing per share ($)
Net PBITDA interest cover pre significant items (times)
Gearing (net debt/net debt and shareholders' equity) (%)
Return on average funds employed (%)[8]
Financial Statistics
Income from dividends and interest
Depreciation and amortisation provided during the year
Net finance costs
Cash flow from operations
Capital expenditure and acquisitions
Balance Sheet Data as at 30 June
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Contributed equity and treasury shares
Reserves
Retained profits
Total shareholders' equity
Other data as at 30 June:
Fully paid shares (000's)
Orora share price
- year's high ($)
- year's low ($)
- close ($)
Market capitalisation
Employee numbers
Number of shareholders
2022
2021
2020
2019
2018
4,090.8
3,538.0
4,659.1
4,761.5
4,248.0
285.5
258.8
187.1
184.7
21.7
21.4
134.8
16.5
-
11.2
0.33[5]
15.1
46%
22.4%
0.6
117.9
26.7
257.6
92.2
1,307.7
1,401.1
2,708.8
1,122.3
854.8
1,977.1
731.7
(37.3)
138.9
630.1
731.7
249.1
216.3
156.7
135.8
16.9
14.6
113.0
14.0
288.2
230.4
167.3
238.9
17.4
24.8
606.6[2]
49.3[2]
-
30%/50%[3]
9.7
4.8
0.37[6]
11.2
37%
19.9%
0.2
120.2
32.8
270.6
59.0
980.8
1,343.8
2,324.6
806.3
749.7
1,556.0
768.6
80.8
107.6
580.2
768.6
0.60[7]
7.6
22%
11.9%
0.6
149.2
57.8
17.7
174.3
1,055.4
1,442.8
2,498.2
817.1
650.9
1,468.0
1,030.2
333.6
139.2
557.4
335.2
295.8
217.0
161.2
18.0
13.4
156.7
13.0
30%[4]
12.4
0.85
11.9
29%
323.4
288.9
214.1
212.2
17.8
17.7
144.2
12.5
30%
17.0
0.94
12.9
29%
13.0%
14.0%
0.4
132.9
39.4
297.9
334.3
1,446.2
2,471.2
3,917.4
1,160.6
1,113.1
2,273.7
1,643.7
484.1
164.7
994.9
0.3
121.9
34.5
329.0
204.3
1,318.1
2,299.0
3,617.1
1,098.7
887.9
1,986.6
1,630.5
479.9
152.1
998.5
1,030.2
1,643.7
1,630.5
845,352
890,240
965,363
1,206,685
1,206,685
4.00
3.06
3.65
3.33
2.23
3.33
3.45
2.54
2.54
3.69
2.89
3.24
3.60
2.73
3.57
3,085.5
2,964.5
2,452.0
3,909.7
4,307.9
4,820
40,646
3,768
44,653
3,776
52,694
7,221
55,087
7,014
54,164
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
The financial information in the above table is presented on a total operations basis and therefore the period FY18-FY20 includes the financial results of the
Australasian Fibre business that was divested in April 2020.
A special dividend of 37.3 cents, 50% franked, was paid on 29 June 2020.
The FY20 final dividend was unfranked, FY20 special dividend was 50% franked, FY20 interim dividend was 30% franked.
The FY19 final dividend was 30% franked, FY19 interim dividend was 50% franked.
The net tangible asset backing per ordinary share is inclusive of right-of-use assets and liabilities. This measure would reduce to $0.13 if right-of-use assets
were excluded and right-of-use liabilities were included in the calculation.
The net tangible asset backing per ordinary share is inclusive of right-of-use assets and liabilities. This measure would reduce to $0.15 if right-of-use assets
were excluded and right-of-use liabilities were included in the calculation.
The net tangible asset backing per ordinary share is inclusive of right-of-use assets and liabilities. This measure would reduce to $0.38 if right-of-use assets
were excluded and right-of-use liabilities were included in the calculation.
Return on average funds employed (RoAFE) is calculated as EBIT divided by average funds employed.
ORORA LIMITED ANNUAL REPORT 2022
141
Shareholder
information
Shareholder enquiries
Shareholders seeking information about
their shareholding or dividends should
contact Orora’s Share Registry, Link
Market Services Limited (Link). Contact
details can be found on the inside back
cover of this report. For security and
privacy reasons, before contacting the
Share Registry, shareholders should
have their Securityholder Reference
Number (SRN) or Holder Identification
Number (HIN) available.
Shareholders can also access a wide
variety of holding information via Link’s
website:
www.linkmarketservices.com.au and
make changes either online or by
downloading a form.
These changes include:
• choosing the preferred method of
receiving the Annual Report, Notice
of Meeting and payment
statements
• checking holding balances
• updating address details
• providing an email address
• updating or providing bank details
• electing to participate in the DRP.
Stock Exchange listing
Orora Limited shares are listed on the
Australian Securities Exchange (ASX)
and are traded under the code ORA.
Annual General Meeting
The Annual General Meeting of Orora
Limited will be held at 10.30am
(Melbourne time: AEST) on
20 October 2022.
Formal notice of the Meeting is sent to
each shareholder.
Orora publications and
communications
The Annual Report is mailed in
mid- September only to those
shareholders who have previously
requested to receive hard copies of the
document.
If you have previously requested a
printed copy of the Annual Report, but
no longer require it in printed form,
please update your preference online
with Link Market Services or advise Link
in writing. To view this report online, or
to download a copy, visit Orora’s
website: www.ororagroup.com.
Orora’s website, www.ororagroup.com,
offers shareholders details of the latest
share price, announcements made to
the ASX, including half-year and full-
year results, investor and analyst
presentations and many other
publications that may be of interest.
Dividend Reinvestment
Plan (DRP)
The DRP provides shareholders in
Australia and New Zealand with the
opportunity to reinvest their dividends
to acquire additional Orora shares.
Shares acquired under the DRP rank
equally with existing fully paid ordinary
shares.
Full details of the DRP and a DRP
election form are available from Orora’s
Share Registry or from Orora’s website.
Dividends
Orora normally pays dividends around
April and October each year.
Shareholders should retain all
remittance advice relating to dividend
payments for tax purposes.
1. Direct deposit to a bank,
building society or credit
union account
Shareholders can receive their
dividends directly into a nominated
bank, building society or credit union
account held in Australia, the United
States of America or New Zealand.
The currency selected must match the
location of the financial institution. For
example, NZD can only be paid into an
account held with a financial institution
located in New Zealand.
Shareholders can provide or update
banking details online at Orora’s
Share Registry at:
www.linkmarketservices.com.au.
2. Cheque payable to
international shareholders
(other than New Zealand)
International shareholders (other than
shareholders domiciled in New Zealand)
who do not have an account with an
Australian or United States financial
institution will receive their dividends
by Australian dollar cheque.
Lost or stolen cheques should be
reported immediately in writing to
Orora’s Share Registry to enable a
‘stop payment’ and replacement.
In addition, eligible shareholders can
choose to have their dividend earnings
reinvested in Orora shares.
142
ORORA LIMITED ANNUAL REPORT 2022
Financial calendar
2022—2023
Financial year 2022 (FY22) ends
Announcement of full-year results for FY22
Ex-dividend date for final dividend FY22
Record date for final dividend FY22
Dividend payment date for FY22 final dividend
Annual General Meeting
Financial half-year 2023 ends
Announcement of interim results
for financial year 2023 (FY23)
Ex-dividend date for interim dividend FY23
Record date for interim dividend FY23
Dividend payment date for FY23 interim dividend
Financial year 2023 (FY23) ends
30 June 2022
18 August 2022
5 September 2022
6 September 2022
10 October 2022
20 October 2022
31 December 2022
February 2023
March 2023
March 2023
April 2023
30 June 2023
ORORA LIMITED ANNUAL REPORT 2021
143
Corporate
directory
Orora Limited
Registered office and principal
administrative office:
109–133 Burwood Road
Hawthorn Victoria 3122
Australia
Telephone: +61 3 9116 1711
Website: www.ororagroup.com
ABN: 55 004 275 165
Chair
Mr A R Sindel
Managing Director and
Chief Executive Officer
Mr B P Lowe
Chief Financial Officer
Mr S C Hughes
Company Secretary
Ms A L Stubbings
Auditors
PricewaterhouseCoopers
2 Riverside Quay
Southbank Victoria 3006
Australia
Telephone: +61 3 8603 1000
Facsimile: +61 3 8603 1999
Website: www.pwc.com.au
Orora share registry
Link Market Services Limited
Street address:
Tower 4, Collins Square
727 Collins Street
Melbourne Victoria 3008
Australia
Postal address:
Locked Bag A14
Sydney South NSW 1235
Australia
Telephone: +61 1300 554 474
(toll free within Australia)
Facsimile: +61 2 9287 0303
Email:
orora@linkmarketservices.com.au
Website:
www.linkmarketservices.com.au
144
ORORA LIMITED ANNUAL REPORT 2022
If any amendments to
this Annual Report
are required, they
will be disclosed to
the ASX and posted on
Orora’s website under
the Investor section at
ororagroup.com/investors
www.ororagroup.com