Good morning, ladies and gentlemen. I'm Rob Sindel, Chair of Orora Limited, and I'll chair the meeting today. I hope you enjoyed that lighthearted, short video, which was produced in December 2023 to celebrate 10 years of Orora. So it's been a fantastic journey, and as you see, we have some very passionate people who love the organization and hopefully, we can share some of those good stories today. So on behalf of the board of directors, I'm pleased to welcome you to what is the eleventh Annual General Meeting of the company. We are holding today's meeting as a hybrid meeting, so we're. I welcome shareholders joining us online and those who've joined us in person today. Firstly, if you have a mobile phone, please ensure that it's switched to silent for the duration of the meeting.
Could I also ask that no photographs or recordings of the meeting be taken? A replay of the presentation will be available on the Orora website shortly. As we have a quorum, I now declare the AGM open. A notice of meeting has been distributed to shareholders, and I'll take the notice as read. In attendance today, on me, on my left, we have Brian Lowe, our Managing Director and CEO, Ann Stubbings, our Company Secretary and General Counsel, and my fellow Non-Executive directors, Michael Fraser, at the end of the table. And joining us, the good-looking bloke on the screen, joining from the U.S., is Tom Gorman. And finally, our two directors who are standing for election today, who will address you shortly, Sarah Hofman and Claude- Alain Tardy.
We also have some members of the Orora senior leadership team here, and I invite each of them to stand as I introduce them. Firstly, Shaun Hughes, our Chief Financial Officer. Any tough questions, Shaun, I'll be referring to you.
You are.
Angela Di Iorio, our Chief People Officer. Thanks, Angela. We also have the company's auditor, Penny Stragalinos, a partner at KPMG, joining us today. Penny will answer any questions for the auditor at the appropriate time. Before addressing the formal items of business, I will recap on the company's main, major activities during 2024, the 2024 financial year, including financial highlights, our approach and progress on our sustainability goals, and an update on our strategic initiatives. Brian will also provide additional comments on our safety performance, our operating highlights, our sustainability achievements, and progress against our strategic roadmap. Brian will also provide an update on our recently announced binding agreement for the sale of Orora Packaging Solutions business in the U.S. for an enterprise value of $1.78 billion. We will also provide an update on our financial year 2025 outlook.
As noted at our AGM last year, two of our directors, Abi Cleland and Samantha Lewis, reached their tenure of ten years dedicated service to Orora and subsequently retired from the board this year. We are mindful of ensuring an orderly board succession and so have appointed, subject to shareholder approval today, two new independent Non-Executive directors in Sarah and Claude- Alain. Sarah is a chartered accountant with over thirty years' experience in audit, advisory, capital markets, and financial services across the U.K., Europe, and the Asia Pacific. Most recently, Sarah held the position of Partner in Risk and Regulatory Assurance at PwC for eight years. Claude- Alain brings more than forty years' global operating experience to Orora, with particular skills in strategic thinking, operational excellence, health and safety, human resources, and sustainability. Claude- Alain has worked across South America, Europe, the U.S., and Asia.
Most recently, Claude-Alain Tardy held the position as a Divisional CEO at the global company, Saint-Gobain, and is currently a Non-Executive director at Outwork and Vicat. We look forward to hearing from both Sarah and Claude- Alain Tardy shortly. 2024 has been a year of transformation for Orora, with the reshaping of the company's portfolio to focus on sustainable packaging solutions. There's been a long-held-- This has been a long-held ambition and a focus for several years. The Board and Management, under Brian's leadership, has taken decisive actions on the portfolio through the sale of our fiber business in 2020, the optimization of Orora Packaging Solutions in North America, and significant capital investment in our cans business. In 2023, we acquired Saverglass, which is a market-leading business focusing on global luxury through the manufacture of premium spirits and wine bottles.
These decisions were the building blocks for a highly focused beverage packaging business. The final step in our evolution has been the decision to sell OPS, which we announced in September, with the completion expected later this year. As a consequence, Orora will be a much simpler and concentrated business with a market-leading presence in Australasian Cans and a global leader in premium bottles. The expected net proceeds will strengthen the balance sheet, providing options to invest in organic growth and also support future shareholder returns. Turning briefly to the financial results for the year ending 30th of June 2024.
Orora delivered solid earnings and cash flow growth during the year following the acquisition of Saverglass. Underlying earnings before interest and tax, or EBIT, increased by 26% to AUD 404 million due to seven months' contribution from Saverglass. Excluding Saverglass, EBIT increased around 1% to AUD 323 million, which was ahead of our April trading update. Underlying net profit after tax, or NPAT, was up 10.2% to AUD 224 million, and underlying earnings per share decreased by 19.4% to AUD 0.179 per share, a result of the higher share count from the capital raising to acquire Saverglass. Cash generation remained strong, with underlying operating cash flow up 47% at AUD 397 million, and cash conversion of 80%.
The board declared a final ordinary dividend of AUD 0.05 per share, unfranked. This brought the total dividend for the year to AUD 0.10 per share, representing a total payout ratio of 60%. These the ones down the front are fine if you'd like to sit down. During the FY 2024, we continued to make good progress towards our sustainability goals. Since 2019, we have reduced emissions by 17.8% for Scope 2 location-based factors, reflecting ongoing investments across the group in sourcing renewable energy and other energy efficiency initiatives. We remain on track to achieve our interim goal of 40% reduction in greenhouse gas emissions for Scope 1 and Scope 2 by 2035. Pleasingly, Saverglass also have a sustainability program that is characterized by both decarbonization and clear targets, which are in line with Orora's overall objectives.
The Saverglass team has made promising progress in investigating new manufacturing techniques designed to reduce energy intensity, while work has been undertaken to investigate alternative fuel sources. From financial year 2025, both Orora and Saverglass sustainability activities will be combined and reported together. As with sustainability, good corporate governance is integral to the culture and business practices at Orora. It enhances performance, creates value, and supports an appropriate risk and return framework. Our governance practices are summarized in our corporate governance statement, which you can find in this year's annual report or on our website. And finally, before I hand over to Brian, I wanted to revisit the investment proposition for Orora.
We believe that Orora continues to present a compelling case for our investors, and this is reinforced by the strategic decisions we have made over the past year to focus on beverage packaging. We believe the company is set up for the future with our leading capabilities, both here in Australasian Cans and globally with our glass business. While challenges in global beverage markets persist, we are confident that the work we have done in recent years, realigning the portfolio, leaves Orora well positioned to achieve long-term growth for shareholders. I particularly wanted to extend my gratitude to our leadership team and our global team members for their outstanding contribution and dedication to Orora, as you saw, a good example in the video. I'll now hand over to Brian for his comments.
Thank you, Rob, and thank you all for your continued support of Orora. A strong focus on continuous safety improvement across the group during FY 2024 led to a pleasing improvement in our safety performance. Lost time injuries decreased by 38% compared to FY 2023, while recordable case injuries reduced by 43%, reflecting our focus on heightened communication, continuous improvement activities, and existing programs to identify hazards and manage risks before they lead to injuries and illness. We continued to roll out our FY 2023 to FY 2025 global health and safety strategy during the last year. Key elements included building awareness of high-risk activities through improved communication, incident reporting, and governance processes. Our improved performance in FY 2024 reflects the effective implementation of our global strategy, empowering our team members to take ownership of safety in the workplace.
Central to our improved performance in FY 2024 were efforts by our operational sites in completing critical control checklists for our 10 Stay Safe Rules, to verify that critical controls for the ten highest risk activities are in place and effective. From FY 2025, our health and safety strategy activity and reporting will be aligned to include Saverglass and present a group-wide perspective. We made good progress towards our sustainability goals in FY 2024 under our established climate change, circular economy, and community pillars. Our efforts to increase recyclability of our products delivered positive results during the year. With our use of recycled glass, which is known as cullet, increasing to 50% from 38% in FY 2023. We are progressing well towards our group target of 60% recycled content in our manufactured glass containers by 2025 .
Development of our first oxy-fueled furnace at Gawler is also progressing, with completion expected during the first half of FY 2025. The new furnace will deliver both production and sustainability benefits, helping to reduce emissions by up to 20% and moving it into the top 10% of energy-efficient furnaces in the world. This investment will not only support further growth, but is central to achieving our sustainability goals, particularly a 40% reduction in CO2 emissions by 2035. We also made further progress to increase energy efficiency and continue the adoption of renewable energy sources with our can site in Rocklea now powered by wind energy through an agreement with CleanCo, a Queensland government-owned energy provider. Our agreement for solar energy usage at Gawler was also initiated during the last year.
Our overall sustainability commitments and targets are well aligned with those of Saverglass, which has a comprehensive sustainability program already in place. We're working closely with the Saverglass team to implement a combined approach to sustainability, and we look forward to reporting on sound progress together during FY 2025. As part of this, we will reevaluate our sustainability activities and reporting metrics as one group, with our sustainability programs to be fully combined and reported on accordingly. During FY 2025, Orora will also focus on aligning its sustainability reporting with the changes to the Corporations Act in Australia, focused on climate-related disclosures. Orora is well placed to reflect these changes, having already achieved limited assurance for its sustainability disclosures over the previous two annual reporting periods. We look forward to making further progress on our sustainability journey during FY 2025. Now, recapping our FY 2024 results.
We delivered a resilient earnings performance across OPS and Australasia, and we included seven months of Saverglass earnings. For OPS, revenue was down 10.8%, mainly due to the flow-through impact of price deflation and lower volumes from continued softness in the broader North American manufacturing industry. Against these challenging volume headwinds, OPS improved margins to 5.6%, reflecting the benefits of our operational transformation plan. This enabled EBIT margins to remain above 5% in the second half of the year, despite lower distribution volumes. OPS remains a strong business with sound fundamentals. This has provided us with the opportunity to realize an attractive valuation for shareholders through the pending sale to Veritiv. In global beverage, with the acquisition of Saverglass on the first of December 2023, and the inclusion of seven months of earnings, our global beverage business experienced significant growth.
Excluding Saverglass, underlying EBIT increased 2% on revenue that was 2.5% lower, demonstrating the resilience of the Australasian beverage business, with strong consumer demand for cans driving earnings growth despite ongoing softness in domestic glass. Earnings for the cans business was higher than FY 2023, reflecting the impact of continued growth in volumes, which were up 2.5%. This was driven by record production, continued strong operating momentum, and improved product mix, as well as price pass-through mechanisms with customers and further operating efficiencies. Australasian glass revenue was lower due to reduced volumes of Australian commercial wine and beer, which was only partially offset by a modest increase in Chinese exports and the benefit from inflation price recovery. The first seven months of Saverglass contributed EBIT of 48.8 million EUR, with EBITDA consistent with the trading update provided in April.
With a leading position in the premium high-end wine and spirits market and a global production footprint, the business is well positioned for the recovery and demand once the destocking cycle is complete. As Rob mentioned, in early September, we announced Orora had entered into a binding agreement for the sale of Orora Packaging Solutions to Veritiv Corporation, a subsidiary of CD&R, for an enterprise value of $1.775 billion. The sale of OPS follows a strategic review of the business and importantly, is designed to unlock value for shareholders. It will transform Orora into a focused beverage packaging business, with market-leading positions and a defensive growth profile across beverage substrates and end markets. The transaction will leave Orora with a strong balance sheet, providing flexibility to pursue value-accretive organic growth opportunities, including additional cans expansion projects.
Orora intends to bring forward AUD 130 million of capital investment to further expand its cans capacity in Rocklea, Queensland. The Rocklea cans expansion, in combination with recent and ongoing projects, will increase cans production capacity by more than 30% from calendar 2023. We expect completion of the sale to occur before the end of this calendar year, subject to satisfaction of all conditions precedent, including regulatory approvals in the United States and Mexico. As I said at the time of the announcement, we are extremely proud of the way the OPS business has grown and delivered value for Orora. This represents an exciting new chapter for the OPS team as well. For now, our teams remain focused on completion of the necessary steps to execute the transaction, and I look forward to providing further updates at the appropriate time.
We believe that Orora is strongly positioned as a leader in global beverage packaging, both in glass and in cans. The new global glass business, formed by the amalgamation of our Saverglass and Gawler operations, is well positioned to benefit from the ongoing premiumization trends, and we continue to be focused on realizing the synergies and opportunities this business presents. Although we continue to see volume softness from the destocking cycle in global spirits, we expect an end to this sometime in the second half of FY 2025 as inventory levels normalize. We hold the number one position in Australasian cans, with this market benefiting from the consumer preference shift to aluminum. Investments in new production capacity and innovative product offerings, including digital printing, position our cans business for further growth.
Finally, before I hand back to the chair for the procedural part of the meeting, I'd like to cover Orora's outlook for FY 2025. For the group, our EBIT outlook remains consistent with August, with some volume softness, sorry, offset by cost management. For global beverage, we expect Saverglass to deliver higher full-year EBIT with a full twelve months of earnings. There has been some volume softness in Europe, which is expected to persist, but our order book for the second half in North America is showing signs of recovery. Customer-owned inventories continue to fall, and the business remains well positioned for volume recovery once the destocking cycle ends, which we expect in the second half of FY 2025.
From an Australasian global beverage perspective, we expect slightly lower EBIT in FY 2025, with growth in cans being more than offset by the impact of our G3 glass furnace at Gawler and the rebuild impact in the first half. This means earnings will be strongly skewed to the second half of the year. We expect stronger cans volumes growth in the second half from new capacity additions coming online as we continue to invest alongside our customers. Although OPS is anticipated to divest by the end of this calendar year, for completeness, we expect OPS EBIT for the relevant FY 2025 period of ownership to be broadly in line with the FY 2024 second half run rate. This outlook remains subject to global and domestic economic conditions and currency fluctuations. With that, I'll now hand you back to the chair for the procedural part of the meeting. Thank you.
Thank you, Brian. I appreciate the comprehensive update. I'll shortly invite questions from the floor and those received online for each item of business. However, before I do, I will outline the voting and question procedure at today's meeting. Voting, for those attending in person, when you registered this morning, you will have received an admittance card. Yellow cards were issued to shareholders and proxy holders who are entitled to vote. Blue cards are those for those shareholders entitled to speak, but not to vote. You will need either of these cards to ask questions or to reenter the meeting. The yellow card displays a series of boxes for voting. Please remember to indicate on your card how you wish to vote by marking the appropriate boxes. Visitors at today's meeting have been issued with red cards.
I remind visitors that you are not entitled to speak or vote at the meeting. The resolutions at today's meeting will be decided by a poll. For those attending virtually, if you are eligible to vote, you will have registered online. If you are eligible to vote, you will have received a virtual voting card. I encourage you to review the online platform guide available on the Orora AGM link. Julie Stokes, are you there, Julie? Thanks, Julie. Julie Stokes from Link Market Services, Orora's share registrar, will act as returning officer in relation to the poll. The results of the poll can be obtained later today by visiting the company or the ASX websites. Now, subject to a director having a personal interest in the outcome of the resolution, I confirm that the board recommends that shareholders vote in favor of all resolutions.
As chair of the meeting, I intend to vote all undirected proxies in favor of each resolution. As I said, I will invite questions from shareholders and proxies on all items of business once I've put all resolutions to the meeting. If you wish to ask a question, please ensure they are relevant to the matters before the meeting and to shareholders as a whole. Questions on all items of business will be fielded through me as chair of the meeting. For those shareholders present today, if you would like to ask questions, please move to one of the microphones and you'll and show it to the attendants. I think there's one each, on each side. The microphone attendant will invite you to speak when it is your turn. Now, we've not received any registration for phone questions. We do have some online.
If you have more than one or two questions, I ask that you allow others an opportunity before returning to the microphone. If you have any trouble using the online platform, please refer to the guide or call the telephone number shown on the screen for assistance, for those of you who have dialed in. Penny Stragalinos from KPMG is also available to answer any questions about the audit. I will now proceed with the formal business of the meeting, as set out in the notice. There's a couple of chairs up the front here if you... There's a couple right up the front. Thank you. I also declare the poll open so that those of you who need to leave early can complete your voting card and place it in one of the ballot boxes near the exit doors.
The first item of ordinary business is the tabling of the financial statements for the year ended 30th of June, 2024 , and the reports of the directors and the auditors of the company, which have already been made available to shareholders. The reports will be tabled but are not subject to a resolution. We will now move to the second item of business, the election of Sarah Hofman and Claude- Alain Tardy as directors. As stated in the notice, Sarah Hofman retires in accordance with Rule 19.5 of the company's constitution, and being eligible, has nominated herself as a director of Orora. The details of Sarah's qualifications and experience are set out in the notice of meeting. I would like to invite Sarah to briefly speak to her election.
Thank you, Rob. Good morning, and thank you for the opportunity to present my credentials as a Non-Executive Director of Orora. I'm a chartered accountant and have held a number of positions during my career thus far, including senior leadership roles in global organizations as an investment banker, and more recently, as a partner in a professional services firm. My executive career largely focused on funding and capital management, mergers and acquisitions, risk management, governance, culture, compliance, and audit. I was chair of the Australian Securitisation Forum , which is the peak industry body for capital markets in Australia. In February this year, I retired from my full-time executive role to pursue a role as a non-executive director. Since joining the Orora board in March, I believe I have applied myself comprehensively to my role as a Non-Executive Director and Chair of the Audit, Risk and Compliance Committee.
I feel privileged to work alongside the members of this experienced board. I believe I bring unique, yet also complementary skills to Orora, gained from my previous roles in banking, audit, and consulting. Over the past seven months, I have contributed positively to board discussions, bringing fresh perspectives and representing the interests of investors to ensure shareholder value is paramount. I'm passionate about the success of Orora and ask for your support for my election as a non-executive director.
Thank you, Sarah. So I'll now disclose the way in which proxy votes have been directed to elect Sarah Hofman. You see them on the screen there. So I put the motion that Sarah Hofman be elected as a director of Orora. Shareholders, would you please complete your yellow voting cards in relation to item 2A or your online voting card for those attending virtually. If you need assistance with the voting process, please raise your hand to attract the attention of Julie Stokes or some of her staff. Thank you. So, as stated in the notice, Claude- Alain Tardy retires in accordance with Rule 19.5 of the company's constitution, and being eligible, has nominated himself for election to the board of Orora. The details of Claude-Alain Tardy’s qualification and experience are set out in the notice of meeting.
However, I would like to invite Claude- Alain to briefly speak to his election.
Thank you, Rob. Thank you for this opportunity to present my credentials to seek election as non-executive director of Orora Limited. I retired three years ago from Saint-Gobain, a top four hundred, top forty French company and a worldwide leader in building material. During my forty-year career at Saint-Gobain, I held numerous positions in various business, including glass, glass wool, abrasives, and plasterboard. Late in my career, I was Worldwide CEO for Insulation and Plasterboard, a AUD 10 billion business present in 65 countries with more than 25,000 employees and 200 plants. I was fortunate to have the opportunity to deal with different culture throughout the world, including Australia, where my Saint-Gobain teams were providing technological support to CSR. I was also fortunate to be directly involved with many significant acquisitions made by Saint-Gobain throughout the world.
During my career, I lived in Colombia, in the USA, and in France, where I currently reside... Since my appointment to the Orora board, I've tried to bring a complementary view to my fellow directors regarding the overall strategy of Orora. I've also been focused on helping the CEO and his team successfully integrate Saverglass, taking into consideration the two distinct cultures. I'm deeply committed to the success of Orora, and I appreciate your support of my candidacy as a non-executive director of your company.
Thank you, Claude- Alain. I will now disclose the way in which proxy votes have been directed to elect Claude- Alain Tardy. I put the motion that Claude- Alain Tardy be elected as a director of Orora Limited. Again, would you please complete your yellow voting card in relation to item 2 B or your online voting card for those attending the meeting virtually. Thank you, shareholders. Moving to item three of the notice of meeting, the incentive grants to our CEO, Brian Lowe. The board proposes a grant to Mr. Lowe under the terms of the company's short and long-term incentive plans, as summarized in the notice of meeting. As required by the ASX Listing Rule, shareholder approval is being sought in order to grant the proposed securities to Mr. Lowe. Mr. Lowe has not participated in board discussions or resolutions concerning the grants.
Each of these grants will be considered separately. Turning first to the short-term incentive grant to Mr. Lowe. Shareholders are asked to approve a grant of deferred share rights to Mr. Lowe, as set out in the notice. This grant is designed to reward the achievement of specific objectives for the 2025 financial year. Any short-term incentives granted, grants made to Mr. Lowe is also subject to Orora's overall safety performance. Importantly, the board has overall discretion in granting the proposed short-term incentive grants to Mr. Lowe. I will now disclose the way in which proxy votes have directed on this item. Again, I put the motion under item 3 A, that Brian Lowe be granted deferred share rights under the short-term incentive plan.
Shareholders, would you please complete your yellow voting cards in relation to item 3 A, or your online voting card for those attending virtually? Turning now to the long-term incentive grants to Mr. Lowe. Shareholders are asked to approve the grants of performance rights as set out in the notice of meeting. I will now disclose the way in which proxy votes have been directed on this item. I put the motion under item 3 B, that Brian Lowe be granted performance rights under the long-term incentive plan. Shareholders, would you please complete your yellow voting card in relation to item 3 B online or those voting online for those attending virtually. The fourth item in the notice of meeting is the remuneration report.
In accordance with the Corporations Act, the directors have prepared a remuneration report for the financial year ended thirtieth of June 2024, which is included in the annual report that has been made available to shareholders. Orora's executives are rewarded for annual performance against business plans, as well as longer-term returns to shareholders. Incentive plan outcomes for this year again reflect the strong alignment between Orora's financial performance, executive performance, and execution of the company's strategic business objectives. In accordance with the Corporations Act, the vote on the remuneration report is advisory only and non-binding. I will now disclose the way in which proxy votes have been directed on this item. I put the motion that the remuneration report for the period ending thirtieth of June 2024, be adopted by passing an ordinary advisory resolution as set out in the notice.
Again, shareholders, would you please complete your yellow voting card in relation to item four or your online voting card for those attending virtually? Thank you, ladies and gentlemen, for your patience. So I will now invite shareholders and proxies to ask questions on any of the resolutions put to the meeting today. Are there any questions in the room?
Chair, I'd like to introduce Brett Morris, who is representing ASA.
Thank you.
Thank you very much. I'm from the Australian Shareholders Association. We're the voice of small retail shareholders. First, I'd like to thank Anne Stubbings for meeting with us, as she does each year, and enthusiastically taking us through the annual report and answering all of our questions. It's always very helpful. My question today, given Orora's very unique position in production and recycling and so forth, is really targeted at the environmental law and the changes that are taking place there. Orora is a heavy energy user that's involved in recycling, and also there'll be some waste components in that, in the production chain. So the changes to the Corporations Act is coming. Orora is reporting on it extensively.
And I suppose from the ASA's point of view, and also a member of the community, I'm just interested in what is it that's driving the best performance in environmental outcomes? Is it the regulations, of which only some shareholders will read all of the report? Is it the incentives? Is it a change from consumers' point of view or the supermarkets? What's really driving those changes? And as a second part of that question, particularly in relation to the Corporations Act, it requires Orora to have, print all of these annual reports each year, of which much of the time shareholders aren't reading them, but it's much of the world's moving towards electronic things, but Orora's sort of stuck with the corporations law, and I was just wondering if you can comment on those, please.
Okay. Thank you, Mr. Morris. I appreciate your question and also the support of the ASA. We look forward to those discussions with our retail shareholders, and I'm sure they appreciate you attending the meeting today. So on the environmental point, as Brian and I both alluded, the programs that Orora has in place are quite extensive. I won't go through them all, but I think your point about what's the most telling or what pushes us the hardest, there's probably two things. Our customers want better recyclable products, so that drives us down the cullet and the recycled aluminum. The beauty of glass and aluminum is they're infinitely recyclable, which you can't say a lot of about many of the other substrates. What drives this? Customer behavior.
Customers expect it now, but they don't necessarily want to pay more, so you've got to work out how you can do it at a lower cost, and certainly recycling cullet, so Brian referred to it, taking used glass, crushing it, and putting it back through the production process is very energy efficient. So that's the first thing. The second piece is government regulation. So shareholders may be aware, the government has something called the Safeguard Mechanism, and large energy users like Orora in Australia, and particularly in Europe, require us to reduce our energy consumption year on year by 4.9%. So that drives our investment, and the big investment we're making at Gawler, that Brian talked about, was reduces energy intensity by 20%.
So if we're trying to get 5% a year, that gets us four years in one go. Shareholders have funded that, so your money has funded that investment. It costs a bit more than just doing the old, you know, refurbishing the car versus buying a new one. We're buying a new one, and it's a much more energy efficient car. But we think that pays off in the long term because we'll have a lower energy usage. The third point is, the cost of energy in Australia is escalating quite significantly. Your own bills are no different to the ones we get. Gas prices have gone from something like AUD 4 or AUD 5 in South Australia to AUD 10 or AUD 12.
So if you can reduce the energy usage, that's good for the environment, it's good for us as a company, and it's good for shareholders. So I hope that addresses the questions around. So there's a number of factors, probably those last two. In terms of the annual report, I think you make a very good point. We continually ask shareholders, "Please take this electronically," but some shareholders still like to receive the annual report. We'll continue with that process to reduce the number we print each year. The good thing about it being paper is, it gets recycled. So if you put it in your right bin, it goes back to the fiber plant and is reused. But, yeah, we'd encourage shareholders to get the electronic version. So thank you, Mr. Morris, for your questions.
Any other questions from the floor? Yes.
Sure. Pardon me, Pat Quinn. Can you tell us a little bit about the competition that you're facing from international producers, and particularly China? Are you seeing any increased production coming out that's competing in your markets?
Thank you, Mr. Quinn. Yeah, I think if we look at aluminum cans, our major substrates, it's very difficult to produce aluminum cans and produce them in China, send them to Australia, and then fill them here. While the filling's being done in Australia, the product's being put into the can, the reason is this, it's all air, and transporting air is expensive, putting it on a ship. Glass, however, is a little bit more competitive. As our energy costs increase in Australia, obviously, if the Chinese or the Asian producers are able to have lower energy costs, then they can compete. One of the beauties of the Saverglass acquisition is that we have a plant in the UAE.
So that plant has lower energy costs, it has lower labor costs, and so that is supplementing our production in Australia. I think one of the challenges for Australian manufacturing is, while we continue to increase prices, consumer behavior doesn't change greatly, so a lot of that product comes from overseas. One of the synergies that Brian talked about was that a global glass network will enable us to source product from low, lower cost countries. Any other questions from the floor? Thank you, shareholders. Do we have any questions online?
We do, Chair. The first of those is: It is not very clear from various reports, the long-term strategy of Orora. Where does it want to go? I would like to know in simple terms.
Okay, well, I think that's a really good question, and what our actions we've taken over the last four or five years sort of lay that out, and maybe we could explain it better. But I think what Brian said, when these assets were demerged from Amcor, and a lot of the shareholders today own their shares as a consequence of being Amcor shareholders, what came out was a relatively small, underinvested cans business, a glass business in South Australia, a fiber business, a paper business, and a distribution business in the U.S. There was some overlap, but relatively minor overlap. So what Brian and the leadership's done with the board's support is actually transformed the organization by selling fiber, returning nearly AUD 1 billion to shareholders when we did that in 2020.
You remember the capital return and special dividend. The second piece of the puzzle to focus the organization and make it into a focused beverage packaging business was the purchase of Saverglass. Then the third piece of the puzzle is the sale of OPS for... You know, when Amcor tried to sell that business, rumors are they couldn't get more than $500 million. We just sold it for $1.2 billion or AUD 1.8 billion, and, you know, we'll pay down debt, we will invest in our cans and our glass business, and return surplus proceeds to shareholders. So when you look at Australian companies that have been successful overseas, it's because they are incredibly focused on one substrate, and we see that with our global glass business.
That is what we are. That's what we stand for. We have an incredibly good Australian cans business that continues to grow because of the growth in cans. So that's the strategy, and there's a whole series of puzzles, pieces of the puzzle that have been put into place over the last four or five years under Brian's leadership.
Thank you, Chair. The next question is: Why did Orora buy Saverglass from private equity group, Carlyle? There are very few long-term success stories involving purchasing from private equity. Could you please comment?
Okay, another excellent question. I think in terms of whether it's private equity or anyone, the key point for a board and the management team is to do the due diligence to say: Does this fit with our strategy? Do we have confidence in the underlying performance? Do we have confidence in the market structure and the market growth over a period? And what that vendor is promising us, does that represent, you know, the financials of the organization? And your board spent a year going through that process. We spent a lot of money, a lot of time, and a lot of management effort, making sure what we said we were getting is exactly what we got, and that's what's happened. So whether it's private equity or not, they had invested strongly in the business.
They'd actually automated a lot of the processes. They'd invested in the Mexican, the furnace in Mexico, so it wasn't underinvested. I think we've got a, you know, a bit of a blip at the moment in terms of consumer demand, which is not unusual globally. People are tightening their wallets. They're feeling the pressure of increased interest rates, so they're trading down, and this has been seen a number of times before, and as Brian alluded to, but we just feel as though we're really well set up in that luxury segment of the market as global glass demand recovers. Thank you, Susanna, for sharing those. Okay, any other questions from the floor or online? Yes.
Good morning, everybody. I hope you're having a good day, and yeah, thank you for being here, and thank you for your time, guys. I appreciate it. I'm very new to investing in general and a very new shareholder of Orora. I just wanna understand ten years, fifteen years, twenty years down the line, what are we trying to achieve? How are we adding value to this world? And in return, the world is gonna value us.
Okay, thank you. What was your name?
Shiv.
Thank you, Shiv. Look, I think the key criteria for us in what we do as directors and management is actually think out that. How do we add value over a long period of time and try and not get caught up in the noise of the quarterly share price or the daily share price? So that's how we think about it. The beauty of the focus issue is, if you look at the companies that have been successfully globally, as I said earlier, they focus on one thing, and they're the best in the world at doing that. And our intention is to be the best in the world at global high-end glass production.
Our view is that the growth in the middle class globally will continue to grow, and around the world, people want what we have in Australia and what they have in the U.S., standard of living increasing. That in turn leads to higher purchasing power and ultimately leads to growth in premium products. The premiumization of alcohol has been growing at about 6% a year since, I think we went back to 1985 , that sort of period. So what do we see? We see that growth continuing. Growth in the middle class, growth in standard of living around the world, will continue to drive the growth in Saverglass without any noise from outside. The cans business, we think we can bolt on.
We have a very specific relationship with Ball Corporation out of the U.S., which constrains us at this point to the Australian market. We don't mind that because it's an incredibly good market where you're seeing movements away from PET. You're seeing movements towards away from commercial wine in some respects, to ready-to-drink cocktails in a can or water in a can, and they're growth, both growth sectors. So that's the world we see in the future, and we see that as Orora a part of that growth. Do you wanna add anything, Brian?
... We've covered off, you know, we are absolutely committed to net zero by 2050, and have a very good roadmap in terms of, you know, the first stage of that to 2035. Our portfolio is highly recyclable. We are going to continue to be focused on the more sustainable end of packaging products. So I think our alignment, as we've communicated today in beverage, around glass and cans, you know, you should expect that will be the focus. We're not intending to branch out, certainly for the foreseeable future, any wider than that. But that lends on growth in higher value add premium segments, but the overarching requirement to be more and more sustainable over time is also really important for us.
Thanks. I appreciate your support as a shareholder, and hopefully you can get your friends to, your young colleagues, to invest in Orora as well. It's good to see. Thanks. Any further questions from shareholders? So thank you, everyone. As there are no further questions, I will now finalize the voting. So I ask, have all votes been completed? Please indicate to Link Market Services if you would like any assistance with your voting card. So I'll now ask the share registry staff to move through the room and collect the yellow voting cards. While that's happening, if you are voting online, please ensure you have finalized and submitted your votes. Is that everyone? So as there are no further questions, and all the voting cards have now been collected, I declare the poll for all items is now closed.
The results of the poll will be released to the ASX and available on the Orora website later this afternoon. So thank you, ladies and gentlemen, for your participation at today's meeting and your ongoing support of Orora. I can assure you that your directors and the Orora management team will continue to work hard to deliver long-term value for shareholders in these complex times. I now declare the meeting closed. I'd really appreciate it if shareholders could join us outside for refreshments for directors, and I'm sure the directors would like to answer any questions you have and personally meet some of our shareholders. Thank you.