AMCR - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Amcor 2020 Full Year Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Tracey Whitehead, Head of Investor Relations. Thank you. Please go ahead, ma’am.

Tracey Whitehead

welcome Amcor’s and results full operator, call. you, everyone XXXX to year Thank

today Chief presentation, I’ll Ron Michael the our call the is Joining call today. you’ll where Delia, be our amcor.com, Financial find discussed At Investors the section to release Casamento, Officer. Executive will this you time, and direct press website, under which Chief and Officer; on

measures historical, about can discuss a reasons. non-GAAP future factors. predicted variety found I our Form of financial expected to it a performance and statement talk refer including to against forward-looking made company Please also we Reconciliations due on review combined of or these this will With performance Actual press to We subject these reminder risks the call, from and as results of non-GAAP certain be Amcor’s in presentation and regarding release are XX-Q on information. comparative uncertainties. measures over the during our that that, SEC and to XX-K statements to Also, website. filings, Ron. turn differ results will may

Ron Delia

morning We Thanks, it’s to discuss join call. Australia, so results. thanks making effort us early you’re with the today on Tracey full the to year the in for everyone and Amcor’s U.S. in those in for being for the and evening those acknowledge the we appreciate

CFO Casamento, Q&A. remarks me we as and Joining Michael for the mentioned, begin Amcor’s open line and today, with on the brief then line will is some prepared Tracey

for employees’ a value is Safety well-being at our where and start we us. which priority start is We been will has top always meeting. with Amcor, safety, every

to not been prominence the an XX the level highlights the of our this only to we’ve injury-free safety we largest through half over as XX% prior in environment, but our compared of taken the at performance. even in year, fiscal sites has work history. for integrating on had company’s Against this months. of least fewer one Amcor, safety COVID-XX course, Across a injuries given and acquisition backdrop, us the Of were XXXX also was for need higher year,

focused Now our XXXX COVID-XX. and all in qualities year. to especially demonstrated as can’t of dedication, continue healthy, and communities and consistently our essential we navigate improvement, well-being Early guiding and three in focus, keeping and products, further protocols keeping the from the our navigate number magnitude as and be supply this Safety, more in to be broadly achieved we so coworkers commitment can care through will those we packaging which to new we the on, established without our uncertainty employees health beverage and principles and operate that of plants fallout first of continue on pandemic. to contributing to related health through manage food, they priority complexity the environment, running for implemented then a continue

a products, ability without source to rising nothing enough demonstrated a dedication are challenges care, employees. proud for in business the of consumer been of chain vital We this that has of supply short great role the and continue Their interruption, of And them the through really for playing can’t the great our current passion period, and pride thank we has inspiring. environment. been resilience essential to has our

and outstanding. X, Along control transformational we execution things way, the an unprecedented while today acquisition. market the delivered foremost, was on messages Slide and resilient, end defensive outstanding key against dimensions, have a to first Moving we integrating conditions nature the result was despite can multiple across we on markets the and of now for our evident,

throughout Flexibles the from the performance this is message of second first initial combined delivery benefits anticipated and made increasingly expectations, and in progress We ahead the we progressing Our is across year. the evident excellent year, businesses key synergies Bemis integration momentum. the of building acquisition is on that cost were

and Third, strong another and And in long-term to we conditions. growth have sustainability year our continue long-term throughout ‘XX. well of fiscal we the remain meaningful clear line value for Fourth, exciting remains of make near-term in controllable most drivers macroeconomic strong sight the we expect over progress strong growth deliver to of regardless opportunity, lastly, to year. the positioned shareholders

business buyback numbers by a a Slide ability was to expectations and capital pass-through with cash over solid management the X%, of And which performance couldn’t fiscal a Sales a to execute including Bemis environment growth cost to and impact. I important was year-over-year, XX% the our of constant XXXX, a were in all after against basis acquisition the predictable. related some up organic during growth, EBIT worth in X, in in it’s flow the also better our in from issued of delivered addition less of we the double-digit had the segment, most which line on Amcor outstanding ahead highlights cost earlier, clearly mentioned And the points. material X% is year, synergies when billion Slide in provides in cost unfavorable XX% and was of exceptional. X continue summary original for acquisition, we external Free the results May. dividend. to pausing more ahead year. the of And year highlights up and $X.X one key of pleased time but controllables and resulting the financial outstanding organic was three invest be safety had Turning outperform teams the of financial was Bemis Flexibles the synergies. reduction business businesses. now at was plan. also shares And X completed on the our to EPS and guidance working on currency we overall, than the we while the strong driven increase upgraded growth the excluding raw prior in year, up our was with

third synergies the days, we’re First, $XXX ahead the within fiscal million we all months of focus XX% our expectations. even capture and anticipate million essentially, ‘XX, post delivered first almost FY two our greater and integration integration on in XXX that The $XX the completed on together synergy million of of initial enabled million $XX in ‘XX, cost integration And additional the and synergies. to of $XX to quickly acquisition. expectations. way came activities FY XX and We ‘XX, an businesses by the year were first delivering well are efficient during

that increased business, to strong and the organic segment already footprint benefits. a expanded capabilities, also contributed in than strategic clear delivering acquisition margin importantly, on Second, Most of have year. And high-value Bemis returns best-in-class already XX%. protein which has rest for the benefits, and grew the exposure addition last expansion the from well acquired proposition point both segments we we’ve business is longer-term to of above the well-invested global which and strengthened care, Flexibles synergy and we more like it’s is our innovation to a customer third our high-quality, value health of

one on way So with have potential two investment year becoming and the together, every companies expectations the all-in-all, with after are we tracking long-term clearer return day. the ahead of pleased come

dividends. We Before was for in $X.XXX of But synergies $X.XX been our we’ve and created to the of support through against quarterly a very the now. ‘XX a board hand And share. share, shareholders be form the using which share repurchases growth, returns to progressive X%. of in about and word will dividend framework several FY buyback in in to of strong dividend ‘XX, shareholders year to $X.X total competitive which I committed combination over value and and years cash Michael, dividend organic for paid helped declared the dividend per billion and FY a XX%, for today generated growth benefits, on which just remains was the brings EPS per acquisition flow and a September full yield cash

a average I’ll fiscal beyond year to it XX%. shareholder So, for value bit created well long-term highlights, those XX%, total the Michael above about on detail turn more during To of our some go XXXX. now was over

Michael Casamento

long-term have to few did COVID-XX. discussed March the end second we quarter. at group growth results we’ve regions seen markets. quarters. the impact emerging puts half average the achieved this the have company significant the related across and key with across we our in and material slide America, I on range the disruption is takes Europe two exposures balanced Amcor that the with And markets, also The Overall, minimal seen we is and the Ron plenty expectations. to with over Thanks, what our results would in last line expect financial and and consistent We low no have aligned global financial specifically start attribute with this of end is seen so without on single-digit with operated our could business. a hi North impacts, volume will message cost of from everyone. across during directly a we remained although incurring plants so our period and COVID-XX with comments we what

lays As Slide in portfolio quarter, March global and the second we X across the our out the in positives half. did negatives

with quite we in soft confectionery with is pet Most specialty to like we in July. in in with America level month good seen we well-positioned care pockets has relatively performed cartons the volume America volume see convenience last By have Latin like hygiene, health The all key X care, And than volumes have seen a in The in have America. packaging Asia, months market, well, in comparable would also volumes a into good premise volumes – average. May categories with since North of while Europe was X-month business June improvements last that resilient, overall and despite volumes in experienced typically and then, and a have growth month-to-month in weaker over our America, takeaway volatility good North Latin most continue heightened was long-term remain softer in areas and the continuing weakness consistent of April volume We channels. growth in been global recently, end growth there business. most regions, and and beverage year protein areas. around period.

single-digit Europe last in America, China the excluding fourth emerging where and XX, end the consistent year Moving in terms markets, as constant higher through volume the in quarter volumes year. to in marginally with we in the of towards impact reflects currency line such volumes were low developed momentum and particular. and year were costs. on This prior in the from saw Overall, segment material good higher lower Slide raw the than Asian markets, passing growth India, and North segment Flexibles sales full

of sources. benefits, combination across strong the towards continued referred products, with growth improvements and cost coffee, range and organic and of cartons year, a was of Flexibles with of This The volume business. in sequential which currency the these protein, the taken by have costs. see delivery as and to positive by in Latin from grew in remaining due driven half that was the mix cost encouraged second Adjusted such half coming X.X% we performance along with high-value operating are to We part growth to synergy during more than driven terms, businesses earlier. year of EBIT weighted the for to healthcare Ron growth America a initiatives the operating constant lower XX% simplify

business pleased really as is we Flexibles with of we acquisition. the So performing the are Bemis and result position have the the overall, a unique way

strength markets. X.X% X.X% of X%, growth to to lower year unusually Specialty earnings and Rigid constant last XXXX Turning year, last of in personal America, to in the and in expectations, lower than home unit, with business container America, year reflecting demand raw prior with X.X% North growth in which impact of line adjusted full a annual strong unfavorable care higher weighted each material On care, the in quarter up were full smaller related be a the lower with costs. comparison fill regional volumes business services particularly excluding strong volumes the Full with compared weakness were performance spirits, the with X% Container Mexico, Colombia, half, grew year half in than prior lower end on by food In Latin the than customers. grew America the volumes year. pass-through were a second year, were and currency in health last fiscal second terms given in strong hot Packaging sales year, in of and offset the and And towards Slide the year in second continued basis, half second XX, Volume variable environment. close to Brazil Argentina. and our Central cost X.X%, across EBIT

the growth. business the were volume light with fourth in So challenges of now business in overall, the we for pleased future with resilience and the the of well-positioned quarter

cash cash that flow flow cash pointing the working out XX% by to reflecting XXXX tax flow to reverse of on worth Turning XX, $X.X into year. and of quarter the higher than the million year, benefited payments, quarter this excellent in and It’s also of was fiscal $XX due expect timing earnings performance. higher free billion the we June Slide adjusted last first to capital

through the capital and We integration have on continued continued we year. way worked as this focus many working occasions, our Bemis this discussed our on

be once during even more became focused need environment uncertain. We more X also to the last the months the recognize

all large-scale released costs. basis, $XXX lower typical been around performance level, cash was for is on year this which by million the to the This cash particularly funds and, sales, capital integration requirements, around is like-for-like a through at $XX year in higher has working collections. was last equivalent working working result, a June a in driven capital through spend of the of which reduction the fiscal strong, XXXX. a year ratio, the rate period As We investment that quarter Bemis X.X% representing performance to our essentially ended than X.X% of lower CapEx cash when the at integrations. million reflecting of measure sales in the through

Amcor expectations. with our balance including line XX, strong, rating, an Moving metrics sheet at our X.Xx, Slide investment-grade to has is credit and are leverage in year-end which

committed positioned, than investment drawn to sheet liquidity strong of business is hand. a – that debt relation flexibility to effective ample less credit un-drawn of our returns a within the on cash and low-cost Key have flow in fund we shareholders the lines billion to with We meet in made our $X.X in well the remain very and months a facilities of maintain rating. maturing and and needs way, investment-grade XX strong and cash message X% balance next

to results, the uncertainty XX-month Slide The turn highlights course, we As for over XX, this heightened complexity a ending and year when XX, XXXX. estimating outlook of financial pandemic, COVID-XX of June future particularly creates our period. levels

currency to for account, we to with assume $X.X cash we business packaging And essential of minimal we just expect in and flow $X.XXX disruption. the year free growth our we constant consumer continue expect And XX% adjusted dividends. expect of approximately EPS given we business into goods. billion this in However, demonstrating billion we approximately are to adjusted the our that resilience, supply partners plants to able $X to delivered. continue X% before terms Taking operating compared

and we So in year summary, in outstanding fiscal the results XXXX, strong XXXX. in expect business generated another

over So I’ll Ron. to back that, you, hand with

Ron Delia

a do just a I our here with investor we gears switch end Slide management a that, I’ll with expand September, members I few we’re longer-term for opportunities. the to for just of minutes long-term XX. starting and planning And fulsome mention, briefing number more Michael. a strategy as of Thanks, perspective, our team on Okay. more where will want and take

virtual, So, event, further shortly. which be made will will available on be that information

tuned. stay So

has should strong from deliver challenges compelling macro dividend, with more you and low growth uncertainty care which it the food framework, acquisition XX, this years; longer continued And Bemis even packaging; near we’re So, shareholder be the drivers additional environment; having payment few continue next and visibility capital synergies over the past defensive rate our changed. for for value interest confident in shares controllable given not EPS starting continued despite from our of the term, the to cost model, range back term, this have allocation to, or creation our shareholder Slide organic value to of and of could we us, Amcor will benefit our now, to repurchased X.X% a in year. the approximately call around health

pay model dividends, yield, outcome with that capacity and last and lots to as to acquisitions we over attractive FY years. might per we and balance to continue strong ‘XX higher average of mentioned, year sheet Since several delivered growth Slide saw organic And and generate earlier, consider flexibility, XX%. dividend We growth, EPS number competitive And at as pursue that will else, in a shows dividend for of Michael was to continue yield. an relative much Amcor’s alternatives the offer XX at investors XXXX, residual returns or maintain a continue compelling the shareholders. of we cash combined that return to XX% of

we topic years. you will And some our and know, touch to want opening of many is not the key sustainability two topic many conclude well-informed this Before us, But a remarks here on messages XX. I new today. developed Slide over of perspectives on today, for we’ve

represents just sustainability sustainable long-term now Amcor’s most First, opportunity. important and as as packaging ever; significant is growth second,

across its structures, or into that’s in the recycled recyclable, management use. and second, less includes from life dispose first consumer to third, And and the impacts designed has solution those reusable remain materials requires made through calendar around addressing a XXXX COVID take account place; across the climate concerned uses after the and about composting environmental dominated participation comes year, of of facilities compostable is or packaging both much whether to consumers systems; X course, and and continuous material when here progress And innovating as answer believe it and packaging full but to recycling million in difference the recycled. months, off system contribute Amcor make of or waste and the in XX% have concerns, we over returnable made needs Of as participation. to the you on is that the new total, Amcor right sustainability increased the change responsible which packaging order elements: consumer packaging last cycle, on see world post-consumer to be their packaging development, and supported during packaging challenge the collaborating first, headlines consumers for waste. new And packaging, meaningful PCR. infrastructure, management several use properly uniquely we recycled our of continued XX increase to progress in these positioned Slide and each launching informing can many make that Through a waste product increasing other is developing year, with the educating areas, amount and products, we good And to XX. X XXX% innovation almost from and by designed to we’ve we past resin up made pounds of customers stakeholders

U.S., sustainability with experience collection a consumers and Green stakeholders waste customers educate and regulators the initiated we together implications infrastructure inform establish our to And In to suppliers few River collaborate And last of systems packaging work about for with was recycling and and to insights the packaging. NGO, the to pilot standards. packaging. packaging using environmental the Amcor customers to China and sorting to the collection, the federation, and recycling and successful demonstrating in two organized to their potential bringing China, sustainability months. are continued first We in and statement, the finally, jointly promote develop plastic examples flexible note available a of range increase sorting from the partnership MRFF by the and of for

through behavior we perceptions launched on media channels and year, conducted proprietary and research to social packaging. campaigns industry and the related During consumer

year targets is and results we expectations, times been Slide of off XXXX summarize The progressing that integration on year resilience the to delivered and financial Amcor. uncertain the things performance exceeding financial demonstrated and the milestone synergy outperformed outstanding on close of has first our business. for for and can ahead enhancing the So, overall control. Bemis a We XX, through

continued We toward we will to more – ‘XX sight leading operator, Q&A. committed line and industry for have sustainable future. we growth that, remain a are open clear And to with the fiscal line we of the committed in

Operator

[Operator Anthony from Pettinari question Instructions] Citi. And your with first comes

Anthony Pettinari

morning. Good

Ron Delia

Anthony. Hi.

Anthony Pettinari

care. And a business beginning relative synergy wondering am I like you growth just gone maybe and Bemis could has cost seems gains how the expectations how it talk perspective. from perspective, in at than the protein you performed the better of to the integration it’s reduction then gone expected year. referenced Ron, and about an from if organic health

put Just can of is any if you that? there kind point finer wondering on

Ron Delia

and we businesses Yes. good it’s it’s And important that And a question. business organic synergies, inevitably think well has – will on invested. the point I in strong North to well. get but I the the we well. as high we American the think mean, really well acquired business, but performed a world around the Look, very focused XX of out, I performance known, clearly, got it’s the And the businesses position it’s quality first the is months. performance

‘XX, I growth growth which had think we year. into digits. of was low in in the close momentum that the fiscal European was North the We through carried was really the business there single good positive acquisition, that and of in Generally building Asia. speaking, in June into acquired organic the America,

I track the spot the soft that clear us several year. that, though the times business to have pretty the we Latin it’s by of I that on was was end think right absolutely highlighted think one America,

big of in if broadly profit growth, I say, of the I the in mid-single-digit those know value-add but being don’t which relative to the Flexibles clearly to organic would globally. segments, benefits the I previous over segments those large. Flexibles that and almost two With are care mentioned they segment, business protein which synergies, higher doubled call revenue are more are months. clearly at the health exposed single-digit XX low the we I had a business fact, In should that story, to regard part growth,

Anthony Pettinari

hikes benefits? helpful. that EPS be of the cash That’s benefit there? resin announced up, any of that to just ‘XX, just that a capital that kind kind to Is regards there saw – guidance, non-repeat down. free flow the some with the in any And color Okay. ‘XX the working have guided very ‘XX you given is could then of And reverse of is from been in

Ron Delia

question – Michael Yes. cash throughout the raw material material I Look, was on answer can raw the I talk talk will relatively environment on year. the will about the point, flow. and benign

three maybe for the had flagged quarter, benefits year. I million the million a of our March through we quarter, on was And $X the where modest volatility. had Think just $XX we the be cycling oil, there’s lot was think business about quarters raw would nothing impact the a FY X of But and first the in April we quarter. through In neutral. months Anthony, oil finished fourth some was material We about versus it where point quarter. in impact to, ‘XX. all up, neutral that to in the fourth material

Michael Casamento

yes, really million $XXX double which year-over-year. million the there, QX is the ‘XX. flow And tax difference $XX and you that’s I the so FY cash the consider deferred up get have look, that’s when in movement basically, on a going Anthony, paid side, think, payment, of QX, And in you key we to

really difference that the So out. we that’s key are calling

Anthony Pettinari

I that’s turn Okay, will over. it helpful.

Operator

next comes Larry Credit with Gandler question Your Suisse. from

Larry Gandler

hear you guys. Thanks Can me?

Ron Delia

Yes.

Larry Gandler

Ron, acquisition to be a might will pandemic that I because resulted generally a could question your always pulse. answer, about take difficult opportunities. Thanks, pretty I it’s Ron. see in acquisitions if but much vague it’s ask has the It

be your now turning seeing you well? might to And more deals integrating you attention you are So might perhaps, much of – are be now quite very that Bemis it, as confident opportunities?

Ron Delia

have history, been are We business quite always familiar and our Well, with model our right? look, acquisitive. you

industry have long-time. consolidator for We been the a in a

to of So well. the that’s as be formula we want question forward part growing the There’s business. going no

have great bolted We that got on be market to. can positions

balance strong healthy cash and a We got have flow sheet.

moment, plan it, off our minds we X and synergies if integration start. no towards the is I at be Rigid of business. talking priority continue off X part going space the the integration clearly Bemis overstate nail forward. are could to as question. will and the great that’s So the is really specialty opportunities, in particularly Flexibles turn as But perimeter, a X, what wouldn’t that to close to Look, we is our that come There diversify next. we about

haven’t consumer our is in be it the interested in sector, emanating which seen from has care, makes to we As forward, same be so are, and and exposed the relates us held to that really can probably those of end going and acquisitive. of would question what expect pandemic, much opportunities demand sense up. most you distress in food markets, But staples given we we to beverages terms health the no

Larry Gandler

My fantastic. know about terms I somewhat Europe, talk of picture and you sustainability. risk or Okay, talked just, you wondering question, to if big just acute? might the tax tax second now am again, can be been in resin in it’s resin I tax where think most plastic

Ron Delia

or Well, number should that one, of look, on moving number say, on there is a parts I a of developments that front.

pandemic, place revenue I look. I think, to of a is they think costs with the to this particularly the dealing raise governments struggle as offset may

and seeing that. as in costs are with the think waste just the if gas associated reduction will bit world convenience I value they and reduction a they ultimately, pay greenhouse Europe. that value functionality, then that little around Look, are we consumers value

something that can control. not that’s completely So we

levied cost that it’s society general it. the large, required including raise. add that debate. that’s a will a taxes that of funding go at against waste governments the But we full consumers are think and to ultimately, to focused that down the the to as route, voice infrastructure offering I at it’s value hope our have perspective any product opposed and actually should targeted the and revenue well-structured a would management And be and represent

Larry Gandler

And any particular markets, moment? risk where the you at at see it

Ron Delia

it I levy go member contribute of a effect Europe, to tax, the It’s the EU months. sounds It on like that seen on to to in of un-recycled to No. be to guess. going member XX have the not remains it next quite a a back eventuates. – states what the waste Look, states but into where the that’s how basis else. there’s how you me, in transpires, something highlighted, It They tax EU. call

more responsibility mechanisms activity of there’s could I discussed. think on place we you see extended signs say U.S., where fiduciary So that in being Europe even the type is But front. a

could come sure leading. look, it not So one anywhere, I there’s am Larry. region

Larry Gandler

good. Okay, Thanks, Ron.

Operator

comes from Purtell Macquarie. with John question next Your

John Purtell

Ron, Michael? and how are Good morning. you

Ron Delia

John, Hey, how are you?

John Purtell

we I Thank forward obviously, bit questions. a seen of am Look, consumption not Look, to what fair a debate in too bad. and terms at-home about demand areas. of been sort pull – of couple had of trends extent such just certain in as you. have

sort how of how quarter, Just part that of maybe think growth year conceptually of of for how about as you be through fourth in see that forming and sort of interested you ahead. the your sort developed guidance that sort

Ron Delia

is that the Yes, topic.

us, this where started. a Asia this we business is because in a like have I for pandemic second whole substantial China almost half think topic and

we And this monitoring been closely pretty have so since.

are of March If let’s last, the over coming think volume say, end a out I movements. think we the of say, was the X outside other the where months, let’s and March norm kind April, June July strong we month, to volume-wise, was normal. normalize but was business. March feels generally. our very April started in softer. parts I most of more am again, then generalizing May weak and generally here, was strong. back

and into think X for and of by to that’s the normal through by takes there’s start sequentially, certainly the have and quarter. weeks, more maybe we most and region month I it. that patterns segment. are way last for puts the think this last part, seeing demand the Obviously, But X about So the to probably

John Purtell

specifically Latin question, America. on Thank you. second And

You mentioned, sort a provide to Have full of that been there sort through we volumes, any have level back of Can color you to yet? up as we but improvement. sequential quarter? flat some on did volumes has of where sort end got obviously, weaker year fourth seen

Ron Delia

Yes.

Flexibles the this about Latin America So business. is

have turnaround quarter been was that which America, acquired was Latin performing is kind And for when had That We number Latin of of in have legacy success of what spans the money to trace discussed story I the not you been part well, half referring America, but business fourth great ‘XX. it’s Bemis, to last and lost Bemis. the throughout business Flexibles businesses is the we Latin last whole months America. our fiscal XX Amcor the a we one in that fact, its if legacy a would It’s have months. were of half legacy of a in XX the

We taken the amount out of of an cost enormous business. have

simplified have it. We

business a have sold Brazil. X a venture plants. joint cups We sold and Argentina. was in that We We plates in disposable sold

tried the we up, year to up the simplify overall, it I business. And what the before. as was is profit So said earlier, – Xx almost was

As takes far stabilize. as to the sales, longer that

struggled been into One was had top of That’s leading it well the close truly the and stabilized. the eroding. reasons line

growth to best the I surmise versus we what had when we certainly some that doing, have seas expect through see line were impacts could was But – to was COVID think the can business in steady the look of to we good the stabilized particular. see business in I impact pretty feel think we now back what we COVID May forward. then and top and the can going

John Purtell

Ron. Nice,

Operator

next question Keith MST Chau Your comes Marquee. from with

Keith Chau

target Michael, flow cash billion earlier it the follow-up a going to ‘XX. that tax Michael, was $X.X Hi. adjusted first mentioned free just the be on for around part Ron to the factor contributing swap that bit. of billion or of of back deferred to $X you FY stepping in and question

to any, given some still you can strong guess, guidance capital that you whether position. the in generate on Just to you that that ‘XX? capital saw into wondering can we unwind is give that, and next the year, working improving keep in addition FY CapEx what ‘XX, us if working And FY the can I particularly outlook performance

Michael Casamento

on the Look, throughout particularly focus started the the performance. X in year, to year around we a and obviously, the the strong really working of And sales, exceptional year on this side, at mean, had to past pro-forma basis, X XX.X% months. of Keith. down business sure, a we I Yes, X.X% sales. capital an got

the So Bemis there, a in cash is we acquisition. reduction exceptional had and the that’s as in as of and on, notes, I supports anyone’s integration $XXX about my million, effect, touched which mentioned cost I speaking X.X% terms in

to ahead of important was on great. the get really game there So which

back there, around on to but see gains recall, I main of level, flow, tax FY As reversal. still certainly, to going and next X% standpoint, expect we those forward, in over another the continuous a capital. expect there higher that’s that you where you that But And – get a was again the this to mean, cash in in I would working kind we see the be things. touched as X% that XX%, little move ‘XX. year. really Amcor CapEx spent won’t to We But around We may would difference coming maybe that’s see benefit I would I typically year. we earlier, exceptional we sales to will is hope improvement From $XXX probably wouldn’t some million year, time. in expect

Keith Chau

was that division, as and And a was cost of throughout comment on a Bemis there business great. second performance of of well. course synergies a Okay, the expansion margin notwithstanding made the then strong driver the the key operating FY question, ‘XX, just within some Flexibles

continue FY in runway I a think at performance we there operational that’s going or is and do guess, performance for are steady, FY a, ‘XX I operating obviously, ‘XX, to structure structure cost So paid dividends guess, to and forward? but improve cost in we

Ron Delia

at space. us. it’s think pretty record And in I you there’s of as expansion a for but a end had organic if points you And expansion mix, We to, the it was a factors, expense basis see the that Look, more been the performance, last also and improvement bit Flexibles alluded through abnormally look line. by year operational strong market Ron. over by driven – ‘XX. product you of good product including that I or years combination cost think FY of XX it’s margin and in XX track XX back so, it’s Keith, the mix. an in driven year, of of and sometimes consistent the That’s coming continuous top margin through

XX, will productivity. combination normally, per seen year. of That’s commercial cost basis and we think and full would forward, I sort expect XX points a be of we it what have going XX,

Keith Chau

Thanks very much. fantastic. Okay,

Operator

of George Bank from Staphos with comes question next Your America.

George Staphos

you Hi, everyone. there question. survey ‘XX? in And sustainability terms what measure in and rates. trading terms or Good the couple of sustainability. kind might actually and in plastic trading how of a day. Hey, Congratulations to I a consumers on the is progress that is the somehow terms your to growth are in way for in would added in do know market? fiscal fiscal work if then quantify relatedly, questions in your back order, if ‘XX. out a expect Thanks of you And of it it’s terms core product, seeing my mean what or growth, changes what, follow-on growth have to of tall is opportunity of of in perceived long-term packaging that anything, for fiscal of a your but ‘XX, you Ron, from the I customers, on what biggest taking

Ron Delia

second Well, look, might with I the one, deal first.

have the of that have pandemic or products food maybe about of level bit several I the care cycles a I think, real of world, mean, whole has purpose. and last whether and was right? think a we over debate first been years. needed health to, I think topic the importance, setter ago seen general troughs packaged years different X view over packaged X parts From peaks a on in or a a packaging – all, this packaging, in the I go

think of around and wet the like again some I things with issues that. we markets see that reinforced

sorts is sanitation more So the ever. things prominent and obviously, than think of starting I secondly, on hygiene that’s and focus the point. have now those become And then

attributes accounts How mean, working if through strengthened the fundamental is have book longer-term hard it’s sustainability of interested their – or the by base sort comfort with packaging, plastic I big So and in developments, say. I general it. And this business anything, you as pandemic. in look, with of growth, of really difficult – been very on mean, our it you packaging relates specifically, the – said driven it’s us to of to measure. much global to key

staple really because really a and hard strong much of recycled products always designed say. How growth that that have. have of to be now We versus of that attribute others, are is to

even guess I venture am this not at we sure, So a really that George, could stage.

George Staphos

on you obviously, a appreciate I answer Look, what Switching all mentioned now business term you the recognizing important types quarter-to-quarter, you month-to-month, And across am seeing any India comment basis at runs very you a within the terms much. for and of interested Thank China rates growth you Amcor in are seeing had and longer in XQ? your candor. particularly, product Okay. not right into I lines improved of in there of the business? gears and fiscal seeing fiscal and could are geographies what ‘XX? or more What are XQ you

Ron Delia

what I headline and to through are Look, we that generally that answer term. we expect ‘XX the in that term expect seeing see, have Yes. growth long to long be months the and that say, is think we consistent the and now FY next the question seen let’s with few we would what

what we we Amcor? volume we the It’s That’s saw seen going years. six have to actually whole last see exactly what that the what means And forward. does X% X% in mean growth. of that’s second for across what It half. So the

in region. as see portfolio we America as North is single-digit ours, are Now broad also a In as optimize and we the in the certainly base, question markets, we especially even we there low In about mix, Europe, and high India, range. growth, the to the emerging to double-click particularly mid see when smaller Asia, earlier to asked should what so margins. a single you see; because was by India differences and China that’s and that mid- going in more single-digit digits China, it’s

would as over that be long-haul well. and the over time expectation the – So

X% which businesses and for years some But business, the to have all growth of together, care, been grow X%. X% generates strong rates. grower and health kind we all strong lower that’s of growth you model. of above up, business And averages, at those have parts a the you or volume So really has many it’s a put growth X% like some that assume overall profit that which other organic

George Staphos

Thank now will you. I it turn over.

Operator

next Your Brian comes Goldman from with Sachs. Maguire question

Brian Maguire

talked XQ, something volume good at, about Hey about the in think, I look to little to all. up you I Rigids quarter. just I being X%. a you close to day If wanted ask trends bit

little you maybe service food at-home but up or couple Rigids portion seen. business And for percent on was a expected the of this there hoping X% like from benefit think that so to might of eating business, half or implies part of the at-home through would in in we I down as the the only was in color the seems so? XQ, a then up just Flexibles it just Were get much bit a or was offsets of quarter? more was it trends have a consider asked the kind bit little earlier within only the not some year just as X% truly business

Ron Delia

Yes. Look, a good it’s question.

and and biggest of think Rigids, the I had would the I case referred in swings. to month-to-month variability, that volatility the Rigids business be

in the America, about right, and actually, I’m talking North flagged third You’re right, we quarter, X%, specifically.

a decline it’s in channel, a in the towards volumes In away-from-home – fourth business the growth and volume third was it’s X% American business. perspective, quarter the had C-store in in quarter, business. quarter, we in heavily particular. mid-single-digit consumption, a fourth levered a That’s seasonal big So business that’s the North beverage there from anyway that

April, a decline really fourth a business quarter. down. good that bit that, in July, variability weaker good up so quite and June a so QX weak mid-single-digit month-to-month, volume But of and even again, good end start pretty had May and March the in within really from And the at of

is in picked have a momentum North in quarter. and the which up also the big specialty in well, business America We business as Rigids, business fourth that

we the of America; business is for markets, And lot the one-third, the a In of broad generally, is variability. thing of and just where the diversified America and I one-third, had quarter, you and sort else. we’re North everywhere the think have all end single-digit volumes about takes. about nothing our in extraordinary. in Europe which So it’s low with is think terms growth, how It’s North But geographically. puts Europe; one-third, Flexibles, and to other

So and region. it Latin mixed a was was Asia Really, by bag was America softer, stronger.

Brian Maguire

stable are was just coming on you trends up maybe come interested or markets, But pass-through in seeing renewal? if as just not contracts if are you for given for And in aggressively follow-on, competitive industry seeing any any up kind of resin trying thanks. change? or pricing change as competition just contracts the in to wondering lower I prices much comment more Okay, the hearing increased one you could general, in behavior people renewal. end Are just

Ron Delia

compare dynamics. have like-for-like very I generally product. have many different, the the Look, stand you When same price It’s it There’s the you where right? back speaking, a something question. don’t to it’s is difficult Yes. pricing answer. good sort No if opportunities it’s for competitive appreciation headline, change from no But and think come – short in. in to it be in industry It’s That’s would the that’s got change competitive other industries. pricing dynamics. that an exists stable. of the industries, environment

Brian Maguire

Okay.

one, sneak in. if it could last I Just

ends folding but cartons trends markets? of just there healthcare, little color on in bit provide Just of the on be kind and would spectrum, could if trends you a in of any opposite of those kind the color may imagine

Ron Delia

and pharmaceutical part packaging globally both. for half long business. of about of a We been Well, healthcare device XX% packaging. half has Amcor It’s big medical in the time. It’s roughly a participate

expect volume-wise. – margins. business have actually big look, whole And Amcor rebounded half in time health and of businesses higher first differentiation that have tough grown those continue on On both of We that folding the well. a to in market forward. quite cartons, positions at and over higher product technology both. It lots had going And at rates than we

volumes half going attractive for health the business care, the year. prior of flat with that’s more a other reasons. or And grow were to not rate less at that’s but it’s Second

Brian Maguire

over. I will turn it Thanks.

Operator

question Your Ghansham next Panjabi with comes Baird. from

Ghansham Panjabi

Hi, everyone. Good day.

Ron Delia

Hi, Ghansham.

Ghansham Panjabi

think world. it from a standpoint, high were just from clear that Ron, was pandemic, the western consumers of initial So stages in the level loading pantry the I pretty

were SKUs Some to ensure so on customers availability. of product and your rationalizing

fiscal current? in I’m how a the to what EPS back for of to year the about as half you’re year, at Are to sort first seeing the a think this from comment just trying point. sense this Just of versus half? get phase on normalization for we at ‘XX weighting

Ron Delia

environment speaking, generally think, our normalizing I relates as markets. it is look, Well, the to

a say, to their of – different degrees, was I You’re bit would was right, there well, loading. pantry

if And think, I I volumes, I a behind we That into run us it of different fewer retreat be continuity phenomenon. in SKUs be think consolidated the That’s at certainly customers, now. right are of also April more the could don’t a primarily word, certainly was to higher in is that factor you that. of U.S. supply. that’s might ensure that than know saw March, regions And really right less but

reverses, whether that let’s see. Now

evolves. environment would We SKUs say, are generally, with, where see still I but that an fewer in let’s

As mean, haven’t far by as forward, quarter. guidance we given I looking

the biggest You have half, benefits building those continue driver each month. that the benefits just which synergy of to first in accrue to remember we’re probably is and with benefits,

Ghansham Panjabi

in year-over-year EBIT And of going EBIT ‘XX an terms back like specific Flexibles, $XX it. Got to benefit, so versus ‘XX. on question a to earlier it million looks about

were I think of million that. $XX synergies

break relative you mentioned million EBIT of large You for year, did million mix, of you mix. say, out assume, $XX that flat, mentioned number total of from? like but Because resin I the basically the Where just come were volumes just delta? that let’s $XX that to $XX-some-odd very for segment. seems the just drivers Can other million specific a

Ron Delia

health care of that’s coffee and materials the like so that’s for growth, in that Well, performance would food. call some the things part productivity, mix growth growth, is that’s it. protein higher of pet I mean, We the commercial

year. So part we productivity two It that’s are the big particularly it. all meaningful. in last big. things Ongoing that cost a is is Those the productivity was time. absolutely of Cost fiscal manage

points to have a to to that mentioned alluded as in collectively, low a question basis similar of than earlier volume XX expansion I I we in fairly George’s And traditionally, growth, response that’s to the sometimes see to XX of in question. back would expect and space that we others. bigger margin response bump on

average So was commercial and better cost a organic productivity. perspective, mystery margin to strong but than year it It’s a the year an just expansion both from as on no where.

Ghansham Panjabi

Are the sequential of terms costs and going about tough I from relative this year-over-year should that freight any basis? costs. Flexibles – we other to you obviously? just and the be also comp a that for should think resin Is petrochemical-related in dynamic kind the on full baking in we assume delta of up in to one are I margins final just then how that increase you the given And year have synergies in? U.S. a mean, Okay. year,

Ron Delia

wash takes given expected synergies and look, Well, will million others it’s year range, the have big I majority the million think tends a a for that range That’s for in out clearly of going be as the a of segment. all those or vast a to the a driver Raw it’s big said $XX know, that we is EBIT. historically, margins. forward, negative, everybody. to We of you to materials And The going $XX through to synergies, just of into I Flexibles I pass-through, of right? things timing impact, and that issue it mentioned positive XX-month you be course be mean, us, as still, consideration. any tends mean, year. a

the of into that’s gave EPS guidance level. we factored all that at So the

Ghansham Panjabi

so much. good. Very Thank you

Ron Delia

Thanks.

Operator

Jefferies. Your Richard next Johnson with from comes question

Richard Johnson

one what I I reasonable you notwithstanding recall much. Ron, quickly growth comments and Thanks than mix. could it me flog horse, have ever revenues and could predecessors organic margins issue saying to once, return to saying you on very dead of the to sorry if a margins. are your wasn’t assume you to more earlier flat on of your about rising made just

bottom which So try think a got showed we opportunity do was really, improve much lower for improvement margin particularly you’ve chunk revenue obviously when of great here, how of from to year, related my slicing this which is, question about think number? you the your mix the and you to

Ron Delia

the revenue margin really the lower expansion Look, number. was this not to year related

I came up think XX material that on out maybe the a question points XXX. previous impact basis was raw of

mean, not and a important activity. customers. is the of of especially Flexibles fragmentation the product factor, one. bottom was thousands it’s of really I thousands as the slicing mean, mix, is there’s because that I The a mix big enormous it’s in customer – but ongoing SKUs an So

but So as has a being optimization us it to the X% – X%. margin of critical, the mix that forward, but a will that from so that business ongoing and perspective. lift is grow going will well historically It said, gives

Richard Johnson

what flow question wondering for adjustment, $XXX Great. cash if other million of then Thanks costs that helped the just you I could Michael which me the breakout on for made, you and $XX the you was? $XX me adjustment and was understand a the just integration million, Bemis, help million includes

Michael Casamento

Look, combination things, it’s have Richard, timing there, coming and some out Obviously, years. we partly the business deal, both and just which employee transaction and adviser fees costs cleanup of…. a which of combination of out remedy There’s some spanned transaction of splitting costs there’s over costs. related the then are this to costs, the general fees

Richard Johnson

Okay.

Rigid the restructuring there? in not So is Plastics’

Michael Casamento

normal just Absolutely that not. That’s as treat separate. We cash.

Richard Johnson

started then And you just to Great. perfect. hedge. that I if have quickly noticed Okay, can, I

never just which and hedges place accounting understand PET, to before. We in that what for is? try for I have to seen was got the that I’ve curious what was some

Michael Casamento

which do to back-to-back of We it’s hedging done years. Yes. account, Look, similar on side, we back been have have their have so aluminum for we many the at on customer doing been request. we the what

it, Richard. straightforward that’s that, as as So

Richard Johnson

Okay.

no gains are hedging there or losses? So

Michael Casamento

No.

Richard Johnson

Okay, Appreciate great. very much. it. Thanks

Operator

BMO Anojja Shah Your next Markets. Capital with from question comes

Anojja Shah

reduction about everyone. I ask morning cost Rigid wanted good to Hi, just program in Packaging. that

XXXX, more made what good the details? that benefit targeting just $X million year? you’re million we another $XX I XXXX. to goal? and just you believe still progress next in And give can Is in Can You some expect

Ron Delia

of an us. in more footprint of have there important close. question. are and front to up growth work more closures It’s that couple and is good is some is it more We There of There that remaining part for benefits a some a – business we it’s Rigids. that some plants come. to Yes, in resetting setting plant

coming we we restructuring FY in so And complete ‘XX that see as will program. benefits

Anojja Shah

million? million million And to million is a number, $XX still $X good $XX to $X

Ron Delia

of Yes. reasonable And that the this some time I FY FY plants, of a potential little depending in would the will year we ‘XX. that’s say get of some a the when into but would got see on we close ‘XX. benefit bit year, number. benefit, the residual We benefits carryover we

Anojja Shah

higher a the availability given other slide how products And PCR Got it. fiscal you usage in now? deck, much you of percentage And What go in terms your translate my PCR then PCR? XX% in about of ‘XX. to can of what talked question, increase does use your that in

Ron Delia

Well, be constraints. time that why segment, almost the are, continue some Packaging all to the that exited number to is and at will XX% about of over from grow time, There number There’s that long abate, in PCR. Rigid much to But expect we our term, business reason ‘XX technical no substantially. can’t and higher. supply those fiscal running

it’s well. Packaging, chain available. start supply polypropylene as a because more I and little expand think bit a will in are that to polyethylene general of – Flexible challenge polyolefins less that and But even will

finished finished. we XX%. exit rate of So at We that’s where

Anojja Shah

you. Thank great. Alright,

Operator

with Reilly UBS. question next from Your comes Nathan

Nathan Reilly

to question follow we just per dividends, just guess, there, a, outlook on Hi, rates guys. dividends the I forward? relation basis your in should of EPS going growth a Quick share those terms to in expect dividends wondering,

Ron Delia

will continue is yield I it But The return as continue because we continue sure to it particularly to compelling a for it question. It’s that is. Nathan, and quite, return. inflation. to super it, yield with pretty think dividend good believe, and us we’ve our least not It’s a in with pace grow to attractive it a others time, at whether And grow. keep line to will of relative grow or we that’s dividend EPS interest got dividend will I’m important over rates. for the base quite shareholders. a we alternatives, grow it’s

Nathan Reilly

question, a relation in just Bemis revenue synergies. And just thanks. to Okay, final

I potential are going think sort flagged just now synergy of the those of bit Bemis, now? go revenue of integration previously little revenue those a wondering we’re opportunities little of getting bit synergies. few some term that closer on that, you’ve we of after sort a advanced that would after be more just longer a to a to I’m

Ron Delia

focus global few had a little a on – We’ve now the care, on them a Well, that third a areas footprint little more be focus health have global XX extra months key we on have accounts protein. past we And a complete the supply we had over focus even. to key extra our where area would from.

are the underway. So efforts

generating I to think tends take a dollar – it take this of business sales to a tends while. in

the So think synergies still per line, about off. top se years of that’s any couple we acceleration in and as a revenue

just more can recently, to Although the like some good segments apart those synergy in we’ve be a it’d base point what’s segment what that you to versus hard growth and had of performance and even pull protein.

Nathan Reilly

All Ron. good. Thanks,

Ron Delia

Thank you.

Operator

Campbell-Crawford question next JPMorgan. Brook from Your comes with

Brook Campbell-Crawford

question. thanks Yes, taking hi, for my

Just a follow-up.

business. improvement on earlier Am talked Bemis and in Lat about the You Flexibles the

in improvement dollar around EBIT think if can I from this? numbers was your swing what mentioned correctly? some you FY just comment basically in So provide ‘XX you caught the I Xx ‘XX, profit, to FY

Ron Delia

the we the But us was break enough the we haven’t to am broken that Brazil, what numbers. business not Bemis mean I a in – I to business for business Brook, Mexico. which It’s out. Look, out and is material and referring Argentina acquired, Yes.

And taking money I product we in to of two XX guess, group driving as ways I was It we a alluded to taken different then in will much way. whole the we the But have as several turned the the and or exited them steps of business have business. continue of further simplify I And by in the quite it around at people first and to, amount It’s segments. modest we scheme to a Flexibles perimeter, plants was QX. even And months. simplify the in look so effective complicated hundred already a out grand talked segment. that a And about, that business. lot legacy losing more,

Brook Campbell-Crawford

just as cash for for $XX costs higher you cash it guess, so remaining recently as great. then interest guidance year? next of Thanks. just And have to Michael I Okay, ‘XX? for base ones in other a there below But item be debt. should So year, is that a expect around I for costs is interest you there Bemis? that’s know should we two around simple to year? also or expect next line costs just next And any million we see just well the then provide case, significant integration the refinanced some any can as costs FY

Michael Casamento

Yes. side, $XXX in the haven’t Brook, EPS specific I here. and range. mean, U.S. Obviously, question June, on million. right, your in debt Europe, one the quite around I did in guidance. the one we some take a we’ve in interest two both Thanks. range Look, term we given will bonds, given guidance out you’re

in look, cost, forward, but moving bonds a then look interest forward. lower don’t rates higher The we at As expect a difference we interest we are year-on-year. have material

we’re billion billion to of included expecting terms material around $XX And called costs, – around cash. costs. the there cash that anything out cash $X.X we’ve million So the $X $XX yes, there. adjusted million adjustments in That’s not in to in

Brook Campbell-Crawford

Thanks. Okay, that’s great.

Operator

for I Ladies will session. and turn to now gentlemen, question-and-answer back this closing remarks. concludes management our the call

Ron Delia

operator. Well, thanks,

to start Bemis, visibility Just and growth here. really acquisition biggest continued and a of from year and XXXX an Amcor, XXXX quick was to close milestone the integration perspective. in our on a good to a beyond. financial for a off, recap Off outstanding we’ve got year

will again shortly. the operator. for call will in be and So thanks touch And we end joining, that

Operator

your That you participation. concludes today’s Thank conference. for

You may now disconnect.

Amcor (AMCR) 18 Aug 202020 Q4 Earnings call transcript