Orora flags headwinds after Saverglass buyout

The news: Packaging giant Orora has flagged potential headwinds for Saverglass in 2024 just weeks after completing its $2.26 billion acquisition of the French premium bottle maker.

The numbers: Orora said Saverglass’ earnings for the remainder of FY24 is expected to be broadly in line with its FY23 performance of 168 million euros ($274 million). However, this could be impacted if either of the current prolonged customer destocking or softness in consumer demand persist beyond early calendar 2024.

The context: Orora reiterated that its group earnings are expected to be higher in FY24, and also said there has been no change in outlook for the North America and Australasian operations. The company acquired Saverglass, which makes bottles for the premium and ultra-premium wines & spirits market, in September with the aim of making it the centrepiece of its global glass business unit and operate as a third platform for growth. Orora shares are down more than 20% since after the company raised a combined $1.1 billion through a discounted institutional placement and rights entitlement offer to fund the buyout.