Keep going? Okay. We might play that at the end. It's actually a very enjoyable video that we played about 10 minutes ago, and it had lovely sound. Good morning, everyone, and thank you for joining us. I'm Rob Sindle, Chair of Orora Limited, and I will chair the meeting today. On behalf of the Board of Directors, I'm pleased to welcome you to the 12th Annual General Meeting of the company. We're holding today's meeting as a hybrid meeting, so I welcome shareholders joining us online and, of course, those of you here in person. Firstly, if you have a mobile phone, we'd really appreciate it if you switched to silent for the duration of the meeting. Could I also ask that no photographs or recordings of the meeting be taken, as a replay of the presentation will be available on the Orora website shortly.
As we now have a quorum, I declare the AGM open. A notice of meeting has been distributed to all shareholders, and I take the notice as read. In attendance today, on my left, we have Ann Stubbings, the Company Secretary and Group General Counsel; Brian Lowe, Orora's Managing Director and CEO; and my fellow Non-Executive Directors in the room, Sarah Hoffman, Jackie McCarthy, and Michael Fraser. Joining us by video link are Claude Alain Tadhi and Tom Gorman. Michael, Tom, and I will stand for reelection today. We're also very pleased to welcome Jackie McCarthy to the board this year. Jackie is standing today for election. We also have our company auditors, Penny Stragalinos, a partner at KMG, joining us today. Thanks, Penny. Penny will answer any questions on behalf of the auditor.
Before addressing the formal items of business, I'll recap on the company's major activities during the 2025 year, including financial highlights, our 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 Q1 trading and reiterate our guidance for FY 2026. As noted earlier, Jackie McCarthy stands for election today and brings extensive experience in consumer marketing and the fast-moving consumer goods sector, having held a number of executive leadership and board positions with a number of global companies. Her insights will be invaluable as we embark on the next phase of growth at Orora. Financial year 2025 was a transformative year for the company.
We focused on integrating Saverglass into the group and reorganizing our global glass business into three regions. We also completed the successful sale of Orora Packaging Solutions and the closures business. These strategic changes were major milestones for the company, completing the realignment of our portfolio that began with the fiber sale in 2020 and the transformational acquisition of Saverglass in 2023. Having said that, the performance of Saverglass has not met expectations in our first 18 months of ownership. Demand was softer than expected. However, we are confident the changes we are making, both here in Australia and globally, will ensure the future success of our glass business. The sale of our North American packaging business was the right strategic decision, and a very good price enabled us to pay down debt as well as return capital to shareholders.
Orora is now a focused beverage business with strong market positions in Australian cans and global premium glass. Our investment in the cans business and network optimization across global glass ensures we are well placed for sustainable cash generation. With no further acquisitions or portfolio changes expected into the near to medium term, we remain committed to disciplined capital management. This, combined with our strong balance sheet, positions us well for ongoing shareholder returns through dividends and our ongoing on-market buyback program. Turning briefly to the financial results for the year ending 30 June 2025. Despite external challenges in our glass business, Orora delivered solid earnings in FY 2025. The group reported EBIT of AUD 262 million, representing an increase of 9.5% on financial year 2024. NPAT, or net profit after tax, was AUD 151 million, up 18% on the prior year. The board declared a final dividend of AUD 0.05 per share, unfranked.
This brought the total dividend in FY 2025 to AUD 0.10 per share, consistent with the prior year. Cash generation was strong, with operating cash flow of AUD 334 million, an increase of 46.4%. During the year, we continued to make good progress towards our sustainability goals. Since 2019, we have reduced Scope 1 and Scope 2 emissions by 22%, reflecting ongoing investment across the group in sourcing renewable energy and other energy efficiency initiatives. We remain on track to achieve our internal goal of a 41% reduction in greenhouse gas emissions for Scope 1 and Scope 2 by 2035. Global Glass and Cans also have sustainability programs that are characterized by decarbonization and clear targets that are consistent with Orora's overall objectives.
The Global Glass team has made promising progress in new manufacturing techniques designed to reduce energy intensity, while preliminary work is underway in our global glass business to source alternative fuel sources. Scope 3 greenhouse gas emissions data was reported for the first time by Orora for continuing operations, inclusive of our global glass business and cans. 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. With the portfolio transformation now complete, our company is focused on value-added beverage packaging, and we enter FY 2026 with cautious optimism.
We will focus on driving organic growth through our well-established networks and well-invested assets as we continue to invest in cans capacity and optimize our global glass footprint. Our strong balance sheet and disciplined capital management position us well for sustainable cash flow growth and consistent returns for shareholders. Before we commit to the procedural part of the meeting, I would like to acknowledge the significant number of shareholders who did vote against our remuneration report. We acknowledge that shareholders have used their vote to voice their concerns with remuneration outcomes. Your board has listened, and we respect the feedback provided to us by shareholders. I would also note the sale of the North American OPS business was a highly successful transaction, delivering an EBITDA multiple of 9.9 times.
It was considered appropriate by the board to reward executives for their significant effort in improving the OPS business over many years. This enabled the successful execution of the sale, which in turn delivered strong outcomes for shareholders. Again, while we acknowledge that performance at Saverglass has not met expectations, in contrast, the sale of OPS provided strong returns to shareholders. The reset of our earnings per share base and other long-term incentive targets was necessary to reflect the significant transformation of Orora's business following the sale of both those businesses. These divestments fundamentally changed the scale and earnings profile of the group. As a Board, we are confident that the changes we made to remuneration ensured that incentive plans remain relevant, fair, and aligned with the ongoing business so that executives are neither unfairly advantaged nor disadvantaged through structural changes.
This is completely consistent with the approach we used following the fiber divestment in 2020. Finally, I'd like to thank our shareholders for their support and our team across the globe for their dedication in delivering these results. I extend my gratitude to Brian and our leadership team and all our global team members for their significant contribution to Orora during the year. I will now hand over to Brian for his comments.
Thank you, Rob, and thank you all for your continued support of Orora. Before I talk about the financial results, I'd like to provide an update on our safety and sustainability performance. Our positive trend in safety performance continued again in FY 2025, demonstrating the value of our global health and safety strategy. Lost time injury frequency rate improved 35%, and the recordable injury frequency rate improved 5%, with no serious injuries or fatalities recorded. This is a true reflection of our ongoing focus on communication, continuous improvement activities, and programs to identify hazards as well as manage risks. Our attention now turns to the implementation of our FY 2026 to FY 2028 global health and safety strategy, which will build on the previous strategy by maintaining focus on safety awareness and embedding safety culture across all Orora sites.
The health, safety, and well-being of our people remains a fundamental and ongoing commitment at Orora. We will continue to focus on ensuring our safety performance improves even further through our targeted safety improvement programs. We continue to make strong progress against our targets for recycled content and emissions reductions, and we recently announced new global targets inclusive of Saverglass. We have achieved 59.5% recycled content for glass, and we are well on track to exceed our target of 60% by the end of this calendar year. Our new recycled content target is 68% for colored glass by FY 2035, as we continue to expand our colored sourcing programs. Cans are committed to maintaining a high level of recycled content through FY 2030. For emissions reductions, our new group targets equate to a 41% reduction for Scope 1 and Scope 2 emissions by FY 2035.
These targets will be enabled by our ongoing investment in decarbonization of the glass network. Our recent investment in the oxygen plant at Gorla has resulted in the G3 glass furnace being one of the top 10% of energy-efficient furnaces in the world. As part of our ongoing sustainability journey, in August, we disclosed our Scope 3 emissions for the first time and committed to further reduction targets. For our Orora group, we are targeting a 31% reduction in Scope 3 emissions by FY 2035. Further details on Orora's new sustainability targets can be found in the company's 2025 annual report. We are extremely proud of the work in this important area, and we look forward to making further progress on our sustainability journey during FY 2026.
In FY 2025, the business delivered a resilient financial result as we navigated a challenging marketplace and focused on delivering significant capacity expansion programs for our cans business to meet customers' demand. Orora cans had a strong year on the back of 6% higher volumes, with elevated customer demand and commissioning of our new line at Revesby. When adjusting for the additional corporate costs and a bad debt, EBIT increased 7%, with further growth expected as we continue to invest in new capacity in Rocklea in Queensland and the recent commissioning of our digital printer called Helio. Our global glass business is comprised of Saverglass and our Gorla facility here in Australia. For Saverglass, volumes remain challenged due to global destocking, but we saw an improvement in the second half. This improvement, together with cost reductions and delivery of synergies, resulted in EBIT being 5.5% lower compared to 12% lower volumes.
This strong cost performance sets the business up well now that we have seen some signs of volume stabilization and growth in our standard premium wine and champagne sales. As the Chair noted, we are focused on optimizing capacity for Saverglass, which will provide further operational and financial benefits. For Gorla, the result reflects a flat volume environment and the impact of the G3 glass furnace rebuild. Conditions are tough for the commercial wine market in Australia, which is why we have closed the G1 furnace. This necessary decision enables Gorla to run as a highly utilized and efficient two-furnace operation into the future. We have market-leading positions in cans, premium, luxury spirits, and wine bottles. Together, with an efficient and well-calibrated operating footprint, we are well positioned for the future and for growth, notwithstanding the global economic uncertainty around tariffs and consumer sentiment.
We proudly hold the number one position in Australasian cans, with this market forecast to grow strongly as it benefits from the consumer preference shift to aluminum, growth in new categories, and brand proliferation from our customers. In September, we were also delighted to launch Helio, the first high-speed digital printing system of its kind installed in the Southern Hemisphere, and the first globally to be integrated directly into a can manufacturing line. It delivers photorealistic full-color decoration directly onto cans at unrivaled speeds, representing a major innovation for the beverage packaging market across Australasia. Helio utilizes direct-to-shape digital printing technology, unlocking endless possibilities in color and texture for unique can design and decoration, eliminating the need for long production lead times associated with traditional can decoration and printing methods.
Customers will benefit from quicker turnaround times, as well as a smaller minimum quantity, ideal for promotional campaigns, new product launches, and special events. The global glass business is well positioned to benefit from ongoing premiumization trends, and we continue to be focused on realizing the synergies and opportunities this business presents. The premium wine and spirit market is forecast to outgrow the category into the future, with premiumization remaining a long-term sustainable trend. This positions Saverglass extremely well, given its focus on this part of the market and our global network, which we continue to optimize. In Australia, our Gorla operations continue to face challenging conditions for commercial wine. Importantly, our operations are strategically located, and the flexibility we have from our Saverglass network will enable this business to reset and improve its financial performance into the future.
Finally, before I hand back to the Chair for the procedural part of the meeting, I'd like to reiterate Orora's outlook for FY 2026 and also provide a trading update for Q1. At a group level, there is no change to our FY 2026 outlook. EBITDA growth is forecast for all businesses compared to FY 2025, with the addition of AUD 7 million of corporate costs and higher D&A tempering FY 2026 EBIT growth. Q1 trading for cans has been in line with expectations, seeing continued demand supporting volume growth. We expect EBIT to be higher, with volumes consistent with our long-term growth rates, which do support EBITDA growth. Q1 trading for Saverglass has seen volume in line with the prior corresponding period in FY 2025, with a continuation of product mix skewed towards wine and champagne at lower price points, consistent with the second half of FY 2025.
Our guidance for FY 2026 EBIT remains unchanged and is expected to be broadly in line with FY 2025. We expect a lower comparative first half EBIT, with cost actions from Lahav and other initiatives expected in the second half of FY 2026. Q1 trading for Gorla is in line with expectations, and FY 2026 EBIT is expected to be approximately AUD 30 million due to the operational benefits from running a highly utilized two-furnace operation. As always, this outlook remains subject to global and domestic economic conditions, currency fluctuations, and no further changes in U.S. tariffs. With that, I'll hand back to the Chair for the procedural part of the meeting. Thank you all.
Thank you, Brian. Now, I'll just let you know there's a number of procedural items on the agenda this morning, so I apologize in advance. We've got four directors up for election, plus we also have a constitutional change. I'll move through these as quickly as possible, and then we'll open up the floor for questions. I think that'll lead to a much more efficient outcome. Before I do that, I'll just outline the voting and questioning procedure for today's meeting. For those attending in person, we appreciate it. When you registered this morning, you'll have received an admittance card. Yellow cards were issued to shareholders and proxy holders entitled to vote. Blue cards are for those shareholders entitled to speak but not to vote, and you'll need either of these cards to ask a question or to re-enter 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 making the appropriate mark on the boxes. Visitors at today's meeting have been issued with red cards. I remind visitors they are not entitled to speak or vote at the meeting. The resolution at today's meeting will be decided by poll. For those attending virtually, or 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, where are you, Julie? Thanks, Julie. Julie Stokes from MUFG Corporate Markets, 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's website or, of course, the ASX website. Subject to directors having a personal interest in the outcome of the resolution, I confirm that the board recommends shareholders vote in favor of all resolutions. As Chair of the meeting, I intend to vote all underwritten proxies in favor of each resolution. I will invite questions from shareholders and proxies on all items of business once we've put all resolutions to the floor. 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, and for those shareholders present today, if you would like to ask a question, please move towards the microphone and show your card to the attendant at the appropriate time. We've received some questions in advance, which we will address later in the meeting. As a courtesy, if you have more than one question, I'll ask that you allow others the opportunity to ask a question 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. As mentioned earlier, 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.
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 business is the ordinary business, the tabling of the financial statements for the financial year ending June 30, 2025, and of course, the reports of directors and the auditor's report, which have been made available to shareholders. These reports will be tabled but are not subject to a resolution, not the subject of a resolution. We'll now move to the second item of business, the reelection of myself, Tom Gorman, and Michael Fraser as directors. We will also be putting Jackie McCarthy up for election as a director, as this is her first AGM.
I'll now hand over to Sarah Hoffman, the Chair of the Audit Risk and Compliance Committee, to introduce the next item of business as it relates to my reelection as a director.
Thank you, Chair. As stated in the notice, Rob Sindle retires by rotation and, being eligible, has nominated himself for reelection. The details of Rob's qualifications and experience are set out in the notice of meeting, and I would like to invite Rob to briefly speak to his reelection.
Thank you, Sarah. Again, I'm honored to have the opportunity to present myself for reelection to the board of Orora Limited. Since my appointment in March 2019, I believe I've applied myself diligently to the role as a director of the company and as Board Chair since February 2020. I appreciate and understand the trust the shareholders put in directors to carry out their duties to the highest possible standards. If elected today, I'll continue to act in the best interests of all shareholders to ensure the ongoing success of Orora. My board colleagues and I have been pleased with the portfolio changes that the company has achieved over the last five years. Each of these transactions has entailed an enormous amount of work on behalf of the management team.
All of us believe that our focus on global glass and cans here in Australasia is the right strategy for Orora. None of us are satisfied with the performance of global glass business, and I feel a personal accountability to continue to work hard to improve performance and ultimately return for shareholders. As a board, we also spend time visiting our operations and interacting with many of our team members to both monitor the performance of the business and also assess culture and alignment with our values. For the Orora team members I have personally met, I continue to be hugely impressed by the leadership and passion, as well as the clear personal ownership for the company. If reelected today, I promise you my full commitment, and I'll continue to work diligently to improve value for shareholders.
Thank you, Rob. I'd now like to disclose the way in which proxy votes have been directed to reelect Rob. I put the motion that Rob Sindle be reelected as a Director. Would you please complete your yellow voting card in relation to item 2A on your online voting card for those attending virtually? I'll now hand back to Rob.
Thank you, Sarah, and thank you to shareholders. I continue to appreciate your, I'm very appreciative of your continued support. As stated in the notice of meeting, Tom Gorman retires by rotation and, being eligible, has nominated himself for reelection. The details of Tom's qualification and experience are set out in the notice of meeting, and I'd like to invite Tom to briefly speak to his reelection.
Thank you very much, Rob. It is both my privilege and my pleasure to present myself for consideration to continue as a Non-Executive Director of our company, Orora Limited. Over the past six years, I've worked diligently, as have you, to share my business acumen with my board colleagues and Orora management. As a former Chief Executive Officer of Brambles Ltd. and current Non-Executive Director of two other global corporations, I believe I have the appropriate skill mix, level of experience, and knowledge to deliver meaningful contributions to the board. I am deeply committed to the success of Orora, and I'm looking forward to working to deliver the many opportunities that lie ahead within our corporation. I currently reside in the Northeast of the United States, but travel frequently across North America.
I travel to Australia, Europe, and the Middle East to visit operating locations and to meet with management teams. I appreciate your support, and if reelected, I look forward to continuing to serve on your behalf. Thank you very much.
Thank you, Tom. I'll now disclose the way in which proxy votes have been directed to reelect Tom Gorman. I put the motion that Tom be reelected as a Director. Would you please complete your yellow voting card in relation to 2B or your online voting card for those attending virtually? Thank you, shareholders. As stated in the notice of meeting, Michael Fraser retires by rotation and, being eligible, has nominated himself for election. The details of Michael's qualifications and experience are set out in the notice of meeting, and I would like to invite Michael to briefly speak to his reelection.
Thanks very much, Chairman, and good morning to all of our shareholders who've been able to join us today. As set out in the notice of meeting, I've had extensive corporate experience over many decades now, including as a former CEO and Managing Director, as well as a Non-Executive Director of a number of listed and unlisted entities. That background has provided me with a broad range of experiences, not only from an operational and leadership point of view, but also from a corporate strategy, corporate governance, capital, and risk management perspective. I also have a very deep energy background, which is the topic which is really front and center of much of the sustainability debate these days.
As has already been said by the Chairman and CEO this morning, I do firmly believe that our strategy of focusing on our global glass business and our cans business here in Australasia is the right strategy for the company, and I'm very committed to making sure that I play my part in ensuring that that delivers long-term value for you, our shareholders. In summary, I believe that my background and experience, along with the understanding of the Orora business that I've developed in my three and a half years on the board, leaves me well placed to make a positive contribution to the Orora board, and I'll be very grateful for the support of shareholders this morning. Thank you.
Thank you, Michael. I will now disclose the way in which proxy votes have been directed to reelect Michael Fraser. I put the motion that Michael be reelected as a director. Shareholders, would you again please complete your yellow voting card in relation to item 2C on your online voting card and for those attending virtually? As stated in the meeting, Jackie McCarthy retires in accordance with Rule 19.5 of the company's constitution, and, being eligible, has nominated herself for election. The details of Jackie's qualifications and experience are set out in the notice of meeting, and I'd like to invite Jackie to briefly speak to her election.
Thanks, Rob. I'm Jackie McCarthy, and it's an absolute privilege to be able to be considered for the role of Non-Executive Director to the board of Orora. I'm an engineer by trade, and I have spent most of my executive career working in fast-moving consumer goods, supply chains, big supply chains, logistics, and transport throughout Asia-Pacific, Middle East, Africa, Europe, and the U.S. in both mature and emerging markets. I've had a lot of fun doing it along the way as well. In my board career, more recently, I've been in the ASX 100 to 200 type organizations, and usually, I've gravitated towards companies that either make things or move things. That's just where I've ended up. I've had a lot of fun doing it as well.
What you won't read about me in my bio is that one of my formative executive roles was I was in charge of buying a lot of packaging of all different types, sizes, and shapes for a very, very big, large, well-known global company. It was there that I really developed a passion and an appreciation for the role that packaging plays, not just in customer branding, but in the lives of consumers and just how it works within operations. Very fortunate to have had that experience. I must say, since I've had the experience of being on the Orora board, all the men and women that I've met, no matter what level within the organization, they all really understand the intrinsic value that packaging plays for the global brands that Orora supplies.
Not just the experiences of consumers, but the role that packaging plays now and into the future when it comes to sustainability outcomes and a sustainable future for all. I think that the experiences that I've had mean that I can serve you well on this board, and I hope to have your support. Thank you for listening.
Thanks, Jackie, and I hope shareholders agree that Jackie is eminently qualified to represent you as a director of the company. I'll now disclose the way in which proxy votes have been directed to elect Jackie McCarthy. I put the motion that Jackie be elected as a director. Would you please complete your yellow voting card in relation to item 2D or your online voting card for those attending virtually? Thank you, shareholders. Moving to item 3 in 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. 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 in 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 2026 financial year. Any short-term incentive grants made to Mr. Lowe are also subject to Orora's overall safety performance. Importantly, the board has overall discretion in granting the proposed short-term incentive to Mr. Lowe. I will now disclose the way in which proxy votes have been directed on this item. I put the motion under item 3A that Brian Lowe be granted deferred share rights under the short-term incentive plan. Shareholders, would you please complete your yellow voting card in relation to item 3A 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 and 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 3B that performance rights be granted under the long-term incentive plan. Would you please complete your yellow voting card in relation to item 3B or your online voting card for those attending virtually? Thank you again, ladies and gentlemen. The fourth item in the notice of meeting is the remuneration report. I spoke to this earlier. In accordance with the Corporations Act, the directors have prepared a remuneration report for the financial year ending June 30, 2025, which is included in the annual report.
Orora's executives are rewarded for annual performance against business plans as well as long-term returns to shareholders. Incentive plan outcomes for this year again reflect the strong alignment between Orora's financial performance, executive performance, and the 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. As previously advised, a significant number of shareholders did not vote in favor of the remuneration report. I will now disclose the way in which proxy votes have been directed on this item. Would you please complete your yellow voting card in relation to item 4 or your online voting card for those attending virtually? Thank you, shareholders. Turning now to the final item on today's agenda, the proposal to amend the company's constitution as detailed in the notice by inserting a new clause 3.2A.
Now, shareholders, this is a special resolution which requires at least 75% of the votes cast by shareholders entitled to vote on the resolution to vote in favor of the resolution. The proposed amendment to the constitution addresses the request of institutional shareholders to give shareholders the opportunity to vote on any proposal involving a material share issue by the company not related to the pro-rata offer to existing shareholders. Shareholders are asked to approve the proposed amendment to the company's constitution 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 that the proposed amendment to the company's constitution is approved by passing a special resolution as set out in the notice.
Again, shareholders, would you please complete your yellow voting card in relation to item 5 on your online voting card for those attending or on your online voting card for those attending virtually? Thank you, shareholders. I'll now invite shareholders and proxies to ask any questions. We might start with the questions online, and then we'll open up the floor if that's okay. Are there any questions online, Carolyn?
Chair, we have received two questions of a similar nature from shareholders online regarding Saverglass. These have been received from Mr. Glenn Good and Mr. David Bryce. The questions relate to whether the Saverglass acquisition has proved to be as profitable as first expected and whether there are any intentions of divesting Saverglass given the challenges and cost of doing business in France.
Thank you for those questions online. I think I addressed some of those comments around have we been happy with the performance of Saverglass in the first 18 months of ownership, and the answer to that is no, but this is a long-term proposition for us. The consumer demand that softened post-COVID has significantly affected a number of companies. What we've done is taken the opportunity to rebalance the footprint we have in Saverglass, and that's that closure. Brian talked to that, a closure of one of our furnaces in Australia. That will enable more product to come from a much cheaper facility in the Middle East, and we've also realigned the footprint in France. The global demand for premium spirits and wines continues to increase at a greater rate than what we'd say in commercial wine. That's been a trend that's over 35, 40 years.
The reason for that is the growth in the middle class globally continues to increase. We love that thematic, and we think that is a good potential growth engine for Orora. Acquisitions proved themselves over 10 or 15 years, not over 18 months. We've got no intention of selling the business. The second part of the question is doing business in France. If you look at the products that Saverglass manufacture, 45% of that product ends up in the U.S., and what drives the global economy is the consumer in the U.S. The majority of that product is not consumed in France. It's consumed somewhere else in the world. One of our biggest products that you'll see over there is Grey Goose Vodka.
The consumption of Grey Goose Vodka is global, and it happens to be made in France in a very efficient factory by very dedicated employees who love working for Saverglass. We don't see the same, you know, get out of France because the French economy is tough. It's a completely different dynamic. I hope that answers the question online.
Thank you, Chair.
You got anything else to add, Brian?
I think that's well covered, Chairman.
The next question comes from Ms. Kerry Tate. The question is, what work is Orora doing to fully integrate the Saverglass team and processes into the Orora group to deliver the savings promised?
Thanks, Carolyn. I think that's a great operational question around integration of Saverglass. I might let Brian address that one.
Thank you, Rob. We've made really good progress over the last 18 months on integration. As investors may recall, our global CFO, Sean Hughes, relocated to France in July of 2024. He's been there for more than a year now to really help oversee that integration process. We've made really good progress relative to processes and aligning the Saverglass business to being part of Orora as a listed organization. We have also made really good progress in terms of delivering on the synergies that we foresaw when we acquired the Saverglass business, and we are getting close to realizing the full run rate of those synergies.
We have also announced back in May new leadership coming into the Saverglass business with Emmanuel Ledant, who started with us on the 1st of July, and he will replace Jean-Marc Ehrenborg, who retires at the end of December, and that transition is going very smoothly. Overall, we're quite happy with the progress we're making on integration.
Thank you, Brian.
Chair, the next two questions come from Mr. Brett Morris from the Australian Shareholders Association, which represents Australian retail shareholders. Mr. Morris would like to express his thanks to the Orora team for meeting with him last week. His first question is, Orora has transformed in the last five years. What has the transformation done to the company's environmental targets?
Okay, thank you. That's the first, just the environmental targets. We spoke to a lot of those in the meeting, but I might let Brian add anything else that he wants to. The only comment I'd make, and the most significant issue is here in Australia, where as many shareholders will know, we have what's called an obligation to meet a safeguard mechanism where we need to reduce carbon intensity by 4.9% every year in our energy-intensive businesses. It's a piece of legislation. The investment that we made in Gorla enables us to make a step change in that. We've reduced the carbon intensity or the energy consumption in that furnace by 30%. I think Brian alluded to earlier, it puts us in the top 10 furnaces in the world.
If we're chasing 4.9% a year, if we get 30% out of one furnace in one year, then that's capital well invested to help us achieve that objective. You know, that's something that the global, certainly the Australian public and a lot of the global consumers want is lower intensity of their packaging, which Jackie spoke to. The other thing we've done in terms of our environmental targets is align what we do with Scope 1, Scope 2, and Scope 3 across the entire Orora business. Does that cover everything, Brian?
Covered very well, Chairman. Thank you.
Thank you, Chair. The second question for Mr. Morris is, remuneration is always a difficult matter for shareholders. Can you explain the increase in the CEO's pay and how that was determined?
Year on year, in terms of fixed term, there are three components to the CEO's pay. It's fixed pay, it's STI, the short-term incentive, and LTI, which shareholders voted on a moment ago. In terms of fixed remuneration, we increased all employees by about 3%. It was more a cost of living increase, arguably less than the cost of living. From a short-term incentive, the only thing we changed in Brian's realm was to reward him 25% for, as I said, the sale of the OPS business. That was a multi-year project to improve the performance. We doubled the profitability, we increased the margins, we then sold it for a really good price, and we're in a process of returning that money to shareholders through an on-market buyback. The amount of work that went into both improving the business and the sale process we thought was a good reward.
In terms of LTIs, Brian and the team have suffered, as have shareholders. The number of awards he's got from long-term incentives has come down considerably in the last couple of years, and that's driven by the TSR, the total shareholder return that's come down, and that has affected all directors, and it's affected Brian and the management team most of all.
Thank you, Chair. There are no further online questions.
I should have asked Tom, is there anything you wanted to add on that REM question?
No, Chairman, I think you've covered it well. I think in your opening comments when you referred to, you know, relevant, fair, and aligned, I think that's a theme that as the Chair of the Remuneration Committee and as a colleague to the rest of the Board, I think that's something that we focus on. What is the right balance to strike so that we make sure that we're looking after our employees appropriately, but aligning that with shareholder outcomes. All of our senior management have suffered a lack of long-term incentives coming through because our overall performance has not been strong, and they have been completely aligned with the shareholder. The actions that we've taken on the OPS sale were also very consistent with what we did a number of years ago when the fiber business was sold.
We think we've been consistent, we've been fair, and we have been aligned with shareholders.
Thanks, Tom. Any other questions online?
No further questions online.
Okay, thank you, Carolyn. I appreciate shareholders' patience. If there's any questions on the floor, I'd ask you to step up and grab the microphone from Nicole. If you could please state your name, that would be very helpful.
Chair, may I introduce shareholder Brendan Wilkinson?
Thank you, Mr. Wilkinson.
Thank you, Chair and Board. Question regarding both cans and glass. They're both heavily energy intensive, and I suspect you use a lot of natural gas. I assume you've considered the price of natural gas as it goes into the future and what sort of, I don't know whether you have hedging or risks, what risk you consider. Also, just as a second minor question, I was listening to the Country Hour and Brown Brothers in Wangaratta, or just outside Milawa, have introduced a, and I think it's a metal can, a metal bottle. I was wondering whether Orora would be interested in that sort of product.
Thank you, Mr. Wilkinson. Both great questions. I'm going to throw the real energy intensity is in our glass. Our cans business is less energy intensive, but still, it's generally electricity. Brian, why don't you take the gas? Michael, it's a great one to add to that with his experience.
Certainly, when it relates to our Australian glass facility in South Australia, our gas supply is contracted out through 2030. We have assurity of supply, first and foremost, which is really important, but you also have pricing assurity. We're quite comfortable relative to the economics over the next five years and supply. In Europe, we have an annual contract basis relative to our energy supply, and we have an annual reset mechanism with our customers. We don't have price exposure, but we are also working on transition, as we did with our Gorla facility, putting more oxygen in, replacing gas. That was over a 20% reduction in gas consumption as part of that investment that we've recently done. Similarly, in Europe, we're looking at electrification of furnaces that will switch more to electricity rather than to gas.
The second part of the question about wine and other, you know, bottled water, sorry, sparkling water in cans. Do you want to take that question, Brian?
Yeah, I mean, we're certainly looking at all formats. We're in beverage packaging now, so we're in cans and we're in bottles. Today, we do not manufacture an aluminum or a steel bottle, but we continue to look at what innovations are being developed. We have a number of partners around the world that we look at in terms of what we think those trends will really develop into. Is that something that's appropriate for us? We're firmly keeping an eye on development in beverage packaging as a whole.
Thank you. The only other thing I'll add, Mr. Wilkinson, is if beer as a huge commodity in glass, it used to be 70% bottles and 30% cans. It's now 50% bottles and 50% cans as consumer trends change. We've been the beneficiary of that. We don't make as many beer bottles at Gorla as we do wine bottles. It's about, I think it was on your slide, Brian, 30%. That's helped our can production, and that's why we put nearly AUD 350 million into our cans business, which will have very good returns over the next 10 or 15 years.
Thank you very much.
Any other questions from shareholders? There are no further questions. I really appreciate everyone coming today. I'm assuming you've all been able to complete your voting cards. If you need more time or any assistance, please put up your hand. I'll now ask the share registry staff to move through the room to collect their yellow voting cards.
As Orora, packaging is our passion. Every day, millions of people around the world enjoy a drink from a bottle or can proudly crafted by Orora. With unmatched capabilities in design, decoration, and manufacturing, we're privileged to work with some of the best-known beverage brands in the world. Our global glass network spans seven glass manufacturing sites and four decoration sites, servicing high-end luxury wine and spirits through to mainstream wine and beer. Our extensive network of six can manufacturing sites across Australia and New Zealand leads the way in designing, decorating, and producing aluminum cans for soft drinks, beer, ready-to-drink beverages, and more. Sitting at the heart of everything we do is our commitment to sustainability. We call this our promise to the future.
The packaging solutions we manufacture are infinitely recyclable, and we're constantly evolving our approach for the good of our communities, the environment, and for generations to come. Of course, our greatest strength is our people. A team of more than 4,000 talented individuals embody our values of teamwork, passion, integrity, and respect. Collectively, our team is the driving force behind our success that's underpinned by a spirit of innovation, finding new and better ways to do things to ultimately help our customers' brands to thrive.
Thank you, and thanks team down the back. I'm pleased we were able to play the video. There's a couple of heart attacks going on down the back, but it's all worked. All the voting cards have now been collected, and I declare the poll for all items now closed. The results of the poll will be released to the ASX and will be available on the Orora website later this afternoon. Thank you, ladies and gentlemen, for your participation at today's meeting and for your continued support of Orora. I can assure you that your directors and the entire Orora team will continue to work hard to deliver long-term value for shareholders in these complex and ever-changing times. I now declare the meeting closed and invite those in the room to join us for refreshments outside.