Packaging group Nampak is entering the next phase of its turnaround, pivoting from balance-sheet repair and operational stabilisation to manufacturing-led growth and optimisation, following a year marked by improved profitability, reduced debt pressure and stronger operating leverage.

In its 2025 Integrated Report, published on Friday, the JSE-listed group reports that the completion of its Nigerian disposal and the settlement of Covid-19 insurance claims have materially eased financial constraints that previously limited strategic flexibility. As a result, Nampak is now positioned to pursue targeted capacity expansion, efficiency improvements and selective growth initiatives across its core beverage and diversified packaging operations.

“Our focus has now shifted to optimising our core business and strengthening relationships with our customers,” said  chairperson Andre van der Veen, adding that growth depended on the group’s ability to understand customers’ objectives.

“Our CEO designate, Riaan Heyl, brings extensive FMCG [fast-moving consumer goods] experience that will help embed a customer-centric approach across the group,” said Van der Veen.

Heyl’s appointment, announced in September, followed a period of leadership transition turmoil at Nampak. The company was forced to reconsider its succession plans after COO Andrew Hood, who had been set to assume the CEO role on October 1, unexpectedly resigned.

Heyl, who most recently served as CEO of PepsiCo South Africa, will assume the role of Nampak CEO on February 1.

Van der Veen said Nampak’s focus on 2026 would be to prioritise manufacturing efficiency by installing additional can-manufacturing capacity. Procurement processes would also be will also optimised to ensure secure and cost-effective access to raw materials.

Outgoing CEO Phil Roux reflected on Nampak’s financial-year performance, which was reported earlier this month.

Operational performance improved despite muted growth across the FMCG sector. Revenue increased by 8% during the year, while trading profit rose by 26%, supported by sustained cost discipline and stronger operating leverage. Trading margin expanded to 12.3%, up from 10.5% in the prior year, and earnings before interest, tax, depreciation and amortisation based on operating profit increased to R1.9-billion from R1.5-billion.

The beverage can business remains the group’s primary growth engine, benefiting from increased adoption of cans relative to other packaging formats. While broader economic conditions continued to constrain volumes in South Africa, demand for beverage cans remained resilient, underpinned by convenience, innovation and sustainability considerations.

Roux noted that intermittent production challenges on a key can line in South Africa earlier in the year constrained the group’s ability to fully meet peak seasonal demand. These issues have since been addressed, with efficiencies and output improving materially. He said operation was now positioned to leverage recent capital expenditure, including the relocation of a beverage can line from Angola to South Africa, to support both volume growth and margin optimisation.

The Beverage Angola business delivered a standout performance during the year, benefiting from a more favourable operating environment and a stable currency. Spare capacity, an expanding customer base and the commissioning of new fillers in Angola and the Democratic Republic of Congo are expected to support further growth through increased utilisation, exports and market expansion.

By contrast, the Diversified South Africa business faced structural pressures as some customers shifted away from cans to alternative packaging formats in an effort to reduce costs. While market share gains were achieved in select segments, the group does not expect lost volumes from certain format changes to return. As a result, management is prioritising cost control, operational competitiveness and targeted market-share opportunities to support earnings growth.

With debt reduction having been the central strategic priority in recent years, the easing of financial pressure is also reshaping capital allocation decisions. Nampak expects a substantial increase in free cash flow after debt service in the coming year, with funding earmarked for residual relocation costs, further efficiency initiatives and the planned resumption of dividend payments in 2026.