Pantry Stocking Households Rescue Orora From Full Force of Chinese Wine Tariffs in Fiscal 2021

Orora’s performance in fiscal 2021 aligned with our expectations, with delivery of full-year group EBIT of AUD 249 million a slim 0.5% ahead of our forecast. Year-on-year, group EBIT rose a sizable 10% as the turnaround of Orora’s long beleaguered North American distribution and visual merchandising divisions gathered pace. While the introduction of Chinese wine import tariffs weighed on the Australasian segment, heightened at-home consumption amid the ongoing pandemic delivered an offsetting, albeit transitory, boost to aluminium can earnings. While the fiscal 2022 organic growth outlook for its Australasian segment appears challenged, our long-term expectations for the no-moat stock remain largely unchanged.