Driven by robust aluminium demand across diverse global packaging industries, Novelis, a global leader in aluminium rolling, recycling and sustainable solutions, has reported strong momentum in the aluminium beverage packaging segment. To address this growth trajectory, the company is progressing with capacity expansion at its new Alabama facility, targeting sustainability-led demand in the sector.
For the quarter ended June 30, the company reported beverage packaging sales of nearly USD 2.5 billion, marking a year-on-year growth of over 22 per cent. Increased beverage packaging shipments across regions offset declines in automotive and speciality segments, resulting in a total rolled product shipment increase of just over 1 per cent year-on-year. The performance, however, faced pressure from elevated scrap costs and a net-negative tariff impact.
FY26 financial result highlights
The organisation has recently released its financial report, showing that net income attributable to common shareholders dropped 36 per cent year-on-year to USD 96 million (USD 116 million excluding special items, a 43 per cent decline). In comparison, adjusted EBITDA fell 17 per cent to USD 416 million and EBITDA per tonne declined 18 per cent to USD 432 per tonne.
These declines were primarily due to elevated aluminium scrap costs, an unfavourable product mix and a net negative tariff impact of USD 28 million, though somewhat offset by higher product prices, lower SG&A costs and favourable FX movements. Despite this, net sales rose 13 per cent to USD 4.7 billion, driven by higher aluminium prices and a slight shipment increase, especially in beverage packaging, offset by weaker automotive and speciality volumes.
Operating cash flow rose 42 per cent to USD 105 million. Still, adjusted free cash flow remained negative at USD 295 million, mainly due to USD 386 million in capital expenditures on capacity expansion, primarily the new Bay Minette, Alabama rolling and recycling plant.
Projected growth rate in the beverage packaging sector
Reporting results for the first quarter of fiscal 2026, the company highlighted that beverage packaging accounted for 60 per cent of its total shipments in fiscal 2025. The company anticipates a 4 per cent compound annual growth rate in the segment between 2024 and 2030 across most regions, underpinned by sustained sustainability-driven demand.
Additionally, the firm is also advancing construction of its greenfield rolling and recycling facility in Bay Minette, Alabama, a USD 4.1 billion project designed for 600 kilotons of annual capacity. Approximately 70 per cent of this capacity, or 420 kt, is designated for beverage packaging and is already under contract. Equipment installation is underway, with the facility slated to commence operations in the second half of calendar year 2026.
Major beverage packaging clientele
The firm counts among its key packaging clients global beverage leaders Anheuser-Busch InBev, PepsiCo and multiple Coca-Cola bottlers, along with major canmakers Ardagh, Ball and Crown Holdings, all of which have recently reported shipment growth. Ball represented approximately 15 per cent of the company’s quarterly net sales.
With sustained demand in beverage packaging and strategic capacity expansions underway, Novelis is positioning itself to capitalise on long-term sustainability trends. The company’s investments, particularly in the Bay Minette facility, underpin its commitment to meeting growing global requirements despite prevailing cost and tariff headwinds.
Also read: VELUX to source 70%-recycled aluminium from Novelis - Why is it important
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