Good day, and thank you for standing by. Welcome to Orora 2022 full year results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Mr. Brian Lowe, Managing Director and Chief Executive Officer of Orora. Please go ahead, sir.
Thank you, and good morning to everybody for joining us today for the Orora Group FY 2022 results presentation. I am joined by Shaun Hughes, our Chief Financial Officer. I'll provide you with an overview of our FY 2022 financial year results, an update on our safety performance. I'll recap our One Orora approach, which captures the essence of our business and reflects who we are here at Orora. I'll remind you why we believe Orora provides investors with a compelling investment proposition as a defensive growth company, and I'll recap the strategic priorities and our progress against those. I'll then hand over to Shaun, and he'll take you through the group and business unit financial results in some more detail before I conclude with an update on sustainability and our FY 2023 prospects and outlook.
At the end of the presentation, Shaun and I'll be happy to take your questions as always. Before I start, please take note of the important information that we have on slide two, and refer to that in context of the entire presentation. Now, we'll start by turning to slide four and our financial highlights. Orora reported another very strong year of revenue and earnings growth driven by excellent performance in our North American business and continued robust earnings in Australasia. Underlying EBIT increased by 14.6% on a reported basis, driven by a significant increase in North American earnings, which was up 36.6%. Underlying NPAT was up 19.4% to AUD 187.1 million, while EPS increased 28.2% to AUD 0.217 per share.
Cash generation remains strong with underlying operating cash flow increasing 10.8% to AUD 272.6 million and cash conversion improving to 73.5%. The board had declared a final ordinary dividend of AUD 0.085 per share, which is unfranked and 100% sourced from the conduit foreign income account. This brings the total dividends declared for FY 2022 to AUD 0.165 per share, which is a 17.9% increase on our FY 2021 dividends. This represents a total dividend payout ratio of 76.2%. I'll now turn to slide five. Our FY 2022 result demonstrates the continued execution of the Orora strategy, our strategic priorities and strong pricing discipline across our businesses. In Australasia, revenue was up 9%, and this was primarily due to higher aluminium prices.
Excluding the aluminum revenue increase, revenue increased by 1.5%. Australasian EBIT was in line with forecast and slightly up at AUD 150.6 million. Cans volume remained strong in FY 2022, and although earnings growth in Australasia was impacted by a full year of China tariffs on China tariffs on Australian wine, this pleasingly has now been fully cycled. We also experienced supply chain disruptions at some of our key customer sites. Impact of inflationary cost pressures related to freight, energy, non-aluminum related materials, which have been well managed by the Australasian business, are subject to timing of customer contract pass-through mechanisms. Cans saw slight volume growth and improved sales mix underpinned by growth in demand in both mainstream as well as craft beer. We saw continued preference shift towards can formats in the CSD sector.
While glass earnings were slightly down for the year, we are pleased with the redeployment of capacity to new products such as spirits, water, and olive oil bottles. Importantly, the second half of the glass business grew volume, revenue, and earnings. The EBIT margin in Australasia was down 100 basis points to 16.6%, and this reflects the dilutory impact of higher aluminum can prices. In North America, we delivered another excellent result in FY 2022, growing revenue by 14.3% in local currency basis. EBIT increased 32.6% to $97.9 million, with strong earnings growth in both manufacturing and distribution as we continue to drive improvements in operating efficiency and maintain a relentless focus on managing inflationary costs and driving down the cost.
The benefit of our sustained and disciplined approach to operating efficiency and management of inflationary pressures is reflected in the OPS EBIT margin, which expanded by 80 basis points in FY 2022 to 5.2%. The OPS EBIT margin has now improved 160 basis points in the last two financial years. This has really been achieved through a clear focus on a number of areas, being increased sales force effectiveness, leveraging data insights to improve our customer account profitability, ongoing cost control measures, realizing the benefits from the Integration of Pollock and Bronco operations now in a single OPS central region, and continued business optimization through embedded pricing disciplines. We've now seen 15 material price increases in the past two years. I'll move now to slide six. In FY 2022, we recorded a modest increase in recordable and lost time injuries.
These injuries primarily reflect the challenges of a higher labor turnover in our North American businesses. There's been a clear focus on continuous improvement activities and incident reporting and increased rigor of our processes for driving greater awareness of our safety obligations. Importantly, there were no serious injuries or fatalities during FY 2022. Always, the health, safety, and well-being of our people is paramount and is supported by a continuous improvement agenda. In FY 2022, we implemented several new initiatives as part of Orora's global integrated safety improvement program, or as we call it, GSIP. This includes the rollout of our Stay Safe Rules, which targeted 10 high-risk activities that have the potential to cause the greatest harm to our people.
No doubt that COVID-19 continues to add complexity and challenges to our operating environment, and we've responded by introducing further health and safety measures targeted at mitigating the risk of transmission across Orora sites. Some of these initiatives include innovative wearable devices to ensure that people maintain a 2-meter social distance while at a site. We still have in place the requirement for rapid antigen testing as a condition of entry and encouraging our team members to be fully vaccinated, including through vaccination incentive programs. We'll now move to slide seven. At our Investor Day back in April, I introduced our One Orora approach, and this represents our shared definition at Orora and understanding of what it means to be part of Orora today. Over time, we've earned the respect of our shareholders, customers, communities, and our people.
To consistently delivering on our promise to provide sustainable, innovative packaging and visual solutions that lead the industry and bring our customers' brands to life. One Orora Guides our team members and unites us around the things that we have in common and behind our purpose, our identity, our strategy, our principles, and importantly, our values. These are the strategic elements that really unite Orora together. Let me move to slide eight. Orora has delivered for shareholders, and it's clearly shown in the graphs that we have on this slide, which highlight our performance on key measures since FY 2017. Importantly, we've grown the group post the sale of the fiber business in 2020 back to FY 2017 levels. Revenue now above AUD 4 billion and net profit after tax of AUD 187 million.
Since FY 2017, earnings per share have grown 39% and dividends per share by 50%, all while we paid over AUD 820 million in ordinary dividends and returned AUD 965 million to shareholders by way of capital return. On slide nine, this is one we also presented at our Investor Day. I believe it serves as a timely reminder of the compelling investment characteristics that Orora provides investors. Key elements of that include our robust simplified business model, our strong financial track record, and future growth prospects, and our experienced and stable management team. Moving on now to slide 11. You've seen this slide before, which sets out the strategic pillars which were established to support Orora in executing our objective of being a leading sustainable packaging solutions provider.
Our strategic pillars do remain unchanged, and they continue to guide our actions and support the delivery of the achievements you've seen in FY 2022 and will continue to guide us over the coming years. Moving now to Slide 11. Throughout FY 2022, we've made really good progress against these core strategies. In Australasia, there's been continued success in extending key customer contracts in both the glass and cans business, and these contracts underpin our investments in both can capacity expansion and our glass recycling capability. We have commenced construction of the second can line at our Dandenong facility and the installation of additional ends capacity at our Ballarat facility. These investments total AUD 110 million and are scheduled for completion in FY 2023. They'll add 10% additional can capacity and 40% additional ends capacity.
We also announced a further AUD 85 million capacity expansion for a second canning line at our Revesby site in New South Wales, increasing can capacity by a further 10%. Construction of this will commence in FY 2023, with commissioning expected in FY 2025. Our cullet beneficiation plant has now been completed and is in the final stages of being fully commissioned. We are also progressing detailed planning for our new oxy-fuel technology for our Gawler G3 furnace upgrade. The oxygen plant is scheduled for completion during calendar 2024 at a gross cost of approximately AUD 40 million, with the investment supported by government funding of AUD 12.5 million. Our North American businesses continue to execute their strategic priorities and have delivered strong results, as you will have seen for FY 2022.
In OPS, we have continued to drive improvement in operating and financial performance, and this relentless focus has helped manage inflationary pressures and delivered strong EBIT growth during the year. EBIT margins have now lifted to 5.2%, an 80 basis point improvement on the prior year. The OPS business has also realized operational and financial benefits following the Integration of Pollock and Bronco, as I mentioned, into a single OPS central region. As we also mentioned at our half year results, Orora Visual continues to trade profitably. The business delivered revenue growth in FY 2022, and we have integrations underway across all four sites, which will yield and continue to yield operational benefits as we move forward. In FY 2023, our attention is firmly focused on sustaining the momentum we've built and continuing disciplined execution of our overall strategies.
In Australasia, reflecting the strong outlook for can volume, we'll continue to focus on the execution of our cans capacity projects and commence construction of our Oxy-Fuel G3 furnace. Glass and cans mix will continue to be optimized as the benefits of glass accrue from our diversified portfolio and cans benefit from a preference shift from glass and plastics to can formats. We continue to explore business expansion opportunities, new product development, as well as adjacencies and offshore entry points for our Australasian business. In North America, we'll continue our operating and business model enhancement initiatives, including digitization and the launch and further complementary activities around our e-commerce platform to improve our customers' experience. Our work in exploring inorganic opportunities in North America is progressing as we seek to expand our product and service offerings.
For OV, the immediate focus is to continue to build a scalable platform and complete integration action underway. I'll now hand you over to Shaun to discuss the group and regional financial results, before I come back and cover a couple of other topics for you.
Thanks, Brian, and good morning, everyone. I'll start with the group results before I cover the regional financial performance. I'm at slide 13, and this summarizes the group's underlying and statutory earnings result for the full year. At a group level, revenue was up 15.6% on a reported basis or 13% on a constant currency basis. The revenue growth was driven by a strong increase in North American revenue, up 17.7% or 14.3% on a local currency basis, and it's primarily due to growth in OPS sales. This reflects our relentless focus on managing inflationary inputs and the benefits of the pricing disciplines, which we've now embedded in both the manufacturing and distribution sides of the business.
Group EBIT was up 14.6% or 12.7% on a constant currency basis, and underlying NPAT and EPS were both up strongly for the year, with NPAT increasing 19.4% and EPS 28.2%. This reflected the strong revenue and earnings growth in North America, solid earnings performance in Australasia, and the benefits of the share buyback. Turning to slide 14. We delivered sales revenue of AUD 909.1 million, up 9%. Excluding the aluminum pass-through impacts from cans, revenue was up 1.5%.
EBIT of AUD 150.6 million was in line with both expectations and the prior year, and this is a robust earnings performance and demonstrates the diversified strength and resilience of our Australian business during a period where slight volume gains and product mix improvements in cans were offset by a change in the glass product mix as we redeployed available furnace capacity to lower profit margin categories. While the impacts of COVID-19 were managed well, the business did experience some supply chain and customer site disruptions. ROACE was a very solid 24.6%, despite a slight decline resulting from the rebuild of inventories and the higher carrying cost of aluminum. Strong operating cash flow of AUD 156 million was in line with the prior year, and cash conversion was slightly higher at 72.9%.
The Australasian operations have entered a period of growth in capital expenditure with AUD 65 million invested in the business during the period. Base CapEx totaled up AUD 15.2 million, and growth CapEx was up AUD 34.5 million to AUD 49.8 million. I'll provide further details on our investment and capacity and capability on slide 17. We expect that the Australasian business will deliver cash conversion in excess of 70% in FY 2023, excluding CapEx associated with the G3 furnace rebuild. Moving to slide 15. In North America. The North American business delivered another year of significant earnings growth, driven by improvements in account profitability, operating efficiency, and a relentless focus on managing inflationary inputs and cost to serve.
In local currency terms, revenue was up 14.3%. EBIT increased an impressive 32.6% to AUD 97.9 million, and ROACE increased 530 basis points to 20.3%. OPS achieved 15% revenue growth and expanded its EBIT margin by 80 basis points to 5.2%, supported by a strong second half. This result reflects a significant improvement in the operating performance in both the manufacturing and distribution businesses, as the North American management team embedded pricing disciplines, integrated the Pollock and Bronco operations, and successfully delivered further improvements from the account profitability initiative. OV delivered revenue growth on the prior year, benefiting from an improvement in retail activity and stronger sales. We have a series of initiatives underway with OV to drive further profit growth and improve returns.
North American operating cash flow increased by 28.7% to AUD 84.6 million, reflecting improved cash EBITDA, partially offset by an increase in base CapEx. Working capital was well managed during the year. Cash conversion remained strong at 74.1%. Moving to slide 16. Underlying operating cash flow was up AUD 26.6 million or 10.8%. The strong improvement in operating cash flow reflects the increase in cash EBITDA, up 10% or AUD 33.5 million to AUD 371.1 million, partially offset by an increase in base CapEx of AUD 4.5 million. The movement in working capital was in line with the prior year at AUD 62.6 million, with the overall increase attributable to revenue growth and the return to more normal inventory levels.
This included improvements in stock availability and the replenishment of raw materials. The value of inventory increased due to both higher volumes and the impact of inflation, particularly in aluminum. The group invested AUD 87.2 million in base and growth CapEx. This was up AUD 30 million on the prior year. The increase in CapEx was driven by additional growth CapEx of AUD 25.6 million for the cans line capacity expansion at our Ballarat site, and the cullet beneficiation plant. Tax payments of AUD 55.4 million reflect a return to our normal cycle of tax payments, with the prior year including a tax refund from the fiber sale. Cash conversion remains strong at 73.5%, a slight improvement on FY 2021. Turning to slide 17. As we invest in the capacity and the capabilities to support end market customer demand and our sustainability initiatives.
The table on this slide summarizes the significant CapEx projects that are either in progress or that the group is committed to in the near future, a combination of base, growth, and sustainability investment. Projects is approximately AUD 55 million. Our capital investment in Cairns is underpinned by long-term customer contracts, and our commitment to sustainability is evidenced by the commissioning this month of the cullet beneficiation plant and the recent announcements of our investment in Oxy-Fuel technology for future glass furnace rebuilds, commencing with the G3 furnace. As mentioned previously, this will increase to approximately AUD 230 million in FY 2023. Slide 18 highlights Orora's strong balance sheet and net debt position, which continues to provide operating and strategic flexibility to support our growth strategy.
At 30 June, net debt increased to AUD 629 million, with leverage at 1.8x net debt to EBITDA. This represents a 0.3x increase from FY 2021, driven by the on-market share buyback, total CapEx investments of AUD 87 million, tax payments of AUD 55 million as we return to our normal tax payment cycle, and Australian dollar movements in US dollar debt, partially offset by stronger earnings. In the period, we closed the buyback, having acquired 30.7 million shares at an average price of AUD 3.55, returning a further AUD 109 million to shareholders. The company maintains a strong liquidity position with committed undrawn debt capacity of approximately AUD 370 million and cash reserves of AUD 50 million as at the 30th of June. The average tenure of the group's facilities is 2.4 years.
Our approach to capital will continue to be balanced and disciplined, and we remain committed to maintaining sensible debt levels and investment-grade credit metrics with our target leverage range between 2x and 2.5x net debt to EBITDA, as we continue to pursue organic and inorganic investment. Moving to slide 19. The board has declared a final unfranked dividend of AUD 0.085 per share. This takes total FY 2022 dividends declared to AUD 0.165 per share, a 17.9% increase on FY 2021, and represents a dividend payout ratio of 76.2%. The dividend reinvestment plan will be reactivated for this dividend, with shares purchased on market to meet our DRP obligations.
Given the group's near-term capital investment programs, the tax effects of Australia's instant asset write-off legislation and other timing differences, the group does not expect to be able to frank future dividends until after FY 2024. On that note, Brian.
Thank you, Shaun. I'll now turn to slide 21 on sustainability. Sustainability has always been part of Orora's DNA and is vital to the way that we operate our business. We are a proven leader in circular economy initiatives, and are investing for the benefit of our communities, the environment, and we're doing it by maximizing the recycled content of our manufactured products and ensuring that these products can be recycled again and again. Our glass recycled content target of 60% by 2025 is well in excess of the 50% by 2025 target that's supported by the Australian Packaging Covenant Organisation. We're committed to achieve net zero Scope one and two greenhouse gas emissions by 2050.
We have also set an interim goal of 40% reduction in these emissions by 2035, and we'll achieve this through increased use of recycled glass cullet, implementing less greenhouse gas intensive Oxy-Fuel furnace technology, and procuring greenhouse gas-free electricity for our businesses globally. Over time, we'll firm up the pathway beyond 2035 and broaden our approach to address Scope three emissions. I'll now turn to slide 22, where we're progressing what we've termed as our promise to the future. This year, we increased our recycled glass content to 38%, up from 31 the prior year. This will further increase in FY 2023 as we utilize the new cullet beneficiation plant.
In North America, OPS averages 54% recycled content in the manufacture of corrugated board, and our OV business increased utilization of eco-friendly printable fabric, comprising 100% recycled content converted from PET bottles. We concluded a review of the recommendations from the Task Force on Climate-Related Financial Disclosures. Pleasingly, no material risks were identified, and our strategy was deemed supportive of long-term sustainable growth. We also achieved a reduction in Scope one and Scope two greenhouse gas emissions from our FY 2019 baseline, with emissions reducing by 4.1% using market-based factors, and 8.3% using location-based factors for Scope two emissions. Our commitment to an Australian-first Oxy-Fuel furnace at Gawler will move the G3 furnace into the top 10% of energy-efficient furnaces worldwide, also delivering a step change reduction in fossil fuel usage.
The graphs on slide 23 show our progress on the climate change and circular economy pillars and demonstrate the reduction in greenhouse gas emissions under both market-based and location-based factors and the increase in our recycled content of glass up to 38%. Along with the Orora Executive Team, I am extremely proud of the great work that's being done across our business, supporting sustainability in all its areas. Turning now to slide 24, I'll cover the prospects for FY 2023. Firstly, in Australasia, inflation and supply chain disruptions are expected to continue in FY 2023, offsetting the benefit of continued strength in demand for cans, as well as growth and mix optimization in glass. The first half EBIT is expected to be impacted by inflationary pressures ahead of further contract price changes effective in the second half.
Energy costs are well covered in FY 2023, with approximately 80% of electricity costs covered by wind farm PPAs and fixed retail contracts, and approximately 99% of gas costs are contracted. We'll continue to identify and implement cost reduction activities, reinvest in asset upgrades, and build our new capacity to support our customers and mitigate these supply chain challenges. In North America, the focus remains firmly on maintaining the momentum that we've developed to drive further earnings through cost efficiency and margin expansion. While inflationary pressures appear to be stabilizing, we are confident in the pricing disciplines that were built to facilitate market adjustments should they be required. OPS margin is expected to further improve in FY 2023, noting that its seasonality of earnings weighted to the first half and the potential for manufacturing volumes to be impacted by softness in the broader U.S. economy.
In respect to cash flow and CapEx, we're committed to ongoing investment in our existing businesses. Growth CapEx will continue in Australasia with the completion of the new canning line in Dandenong and facility in Ballarat, as well as the construction that has commenced for our second canning line in Revesby. Preparation is well underway for our G3 furnace rebuild and the oxygen plant that will be required at Gawler. We'll continue to target group cash flow above 70% for FY 2023, excluding the G3 glass rebuild. In respect to capital management, FY 2023 dividends will continue to be targeted at the top end of our payout range, and the North American business will continue active assessment of M&A opportunities while the Australasian business will explore potential adjacencies and offshore entry points. I'll now turn to slide 26 and the outlook.
Orora Group earnings are expected to be higher in FY 2023, reflecting the resilience of the business in what is expected to be a challenging year of economic conditions. In Australasia, EBIT is broadly in line with FY 2022, with the first half of 2023 impacted by inflationary cost increases ahead of further second half 2023 customer price recovery. In North America, further EBIT growth is expected, reflecting the full-year impact of FY 2022 price increases and continued implementation of profit improvement programs. As always, this outlook remains subject to global and domestic economic conditions, currency fluctuations, and the continuing impacts of the COVID-19 pandemic. I'd like to thank everybody for listening. We believe the results for this year have been extremely positive for us as an organization. We thank you for your interest and your support.
I'll now ask the operator to open the line for questions.