REXAM
Plastic packaging underperforms / Personal care business could be sold / Optimism for 2012
Global consumer packaging company Rexam (London / UK; www.rexam.com) is open to offers for its personal care plastic packaging business. Divestment is one of the options under consideration, according to an interim management statement dated 17 November, following continuing weak performance. Earlier in the year the company said sales in the healthcare business were down 3.7%, with turnover in personal care static – see Plasteurope.com of 08.08.2011. Overall, the plastic packaging business is not performing to expectations, principally because of lower volumes and despite the cost actions that have been taken to protect profitability.
The weakness in plastic packaging has been offset by results in the beverage cans business, which are slightly ahead of plan. Outside Russia, where can sales have been soft, Rexam managed to grow volumes in Europe. In the US there was strong growth in specialty cans and the business is said to be on track to deliver profits ahead of 2010. Trading improved in South America, too, despite slower market growth.
The sale of the closures business to Berry Plastics (Evansville, Indiana / USA; www.berryplastics.com) for USD 360m (EUR 266m) was completed on 1 September – see Plasteurope.com of 21.06.2011. The proceeds have been used to reduce net debt, which was GBP 1.4 bn (EUR 1.6 bn) at 30 September.
Chief executive Graham Chipchase said overall performance for the period since 1 July has been in line with expectations. Good progress has been made in raising cash, controlling costs and improving the return on capital employed. Next year the group expects lower GDP growth in several of its major markets and some specific cost challenges, notably GBP 20m (EUR 23m) of higher metal conversion costs and the impact of a key healthcare product coming off patent. Nevertheless, Chipchase said: “We expect 2012 to be a year of further progress.”
Chairman Peter Ellwood has informed the Rexam board that he will retire at the close of business on 22 February 2012. He will be succeeded by Stuart Chambers, currently a non-executive director of Tesco, The Manchester Airport Group and Smiths Group.
The weakness in plastic packaging has been offset by results in the beverage cans business, which are slightly ahead of plan. Outside Russia, where can sales have been soft, Rexam managed to grow volumes in Europe. In the US there was strong growth in specialty cans and the business is said to be on track to deliver profits ahead of 2010. Trading improved in South America, too, despite slower market growth.
The sale of the closures business to Berry Plastics (Evansville, Indiana / USA; www.berryplastics.com) for USD 360m (EUR 266m) was completed on 1 September – see Plasteurope.com of 21.06.2011. The proceeds have been used to reduce net debt, which was GBP 1.4 bn (EUR 1.6 bn) at 30 September.
Chief executive Graham Chipchase said overall performance for the period since 1 July has been in line with expectations. Good progress has been made in raising cash, controlling costs and improving the return on capital employed. Next year the group expects lower GDP growth in several of its major markets and some specific cost challenges, notably GBP 20m (EUR 23m) of higher metal conversion costs and the impact of a key healthcare product coming off patent. Nevertheless, Chipchase said: “We expect 2012 to be a year of further progress.”
Chairman Peter Ellwood has informed the Rexam board that he will retire at the close of business on 22 February 2012. He will be succeeded by Stuart Chambers, currently a non-executive director of Tesco, The Manchester Airport Group and Smiths Group.
23.11.2011 Plasteurope.com [220884-0]
Published on 23.11.2011
German version of this article...