AMCR - Earnings call transcript Q3 2024

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Operator

Thank you for standing by. My name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amcor Third Quarter 2024 Results Call. [Operator Instructions] I would now like to turn the conference over to Tracey Whitehead, Head of Investor Relations.

You may begin.

Tracey Whitehead

thank Earnings for Call. and XXXX Amcor's operator, Quarter Third you, you, joining everyone, Fiscal Thank

Joining Executive Casamento, Officer; is and today Peter Michael Chief Konieczny, Financial Interim Chief Officer.

our a find you'll press this release we to hand call. Investors which today's few presentation, discuss I under the over, note. Before On will website, and Please amcor.com, section, aware items on be forward-looking in measures statements that management's and discuss also reconciliations related we'll will on and also are non-GAAP presentation. Remarks that financial include release based current press assumptions. be that and the found can views

XX-K today's lists Amcor's XX-Q results made estimates. [Operator details. in slide second that, for cause than can could Reference factors SEC future filings, The to further be current and different you, With presentation P.K. Form Instructions] several including be that over our also to on statement

Peter Konieczny

to moments thank years third Bemis, in history, and a in in speak a Russia. the discussing have Tracey, during I in X for accomplishments guidance few established thanking a guided alone, Ron our commercial capabilities, largest integration of I industry shape you acquisition recently, our us our successfully you, directed the us the I'm geographies, performance, Delia, correct with and team Ron Ron through the opportunities particularly talent the at to transformational leadership, teams at quarter now all and Thank around Prior pandemic markets key Amcor. In members over time. Today, CEO. today's years his navigating through few our Board leader his last team the take other and us the divest Ron for company's recognizing business dedication and difficult the predecessor, made worked the our strategy, who period. And many years my clearly spend business call. and I've to led and providing joined safely and challenging and the with of with as capacity in interim want has to acquisition decision And economic XX honored many his this innovation for reins and differentiated Amcor all in closely Ron, growth. years and our multiple management world, an high-value executive is our to the execute help Amcor and world-class and to capture leadership global to our and our Board, most employees

the across the quarter positioned the third benefiting to company also align of business with evident again recent those leverage steps challenging conditions. The market the the across well continue earnings to cost from our by as we our proactive showed business. actions strong is in base leaders Importantly, taken performance were decisive financial results

we stronger year-over-year and momentum sequential right is team and trend driving I'm we expect continue growth supported capitalize growth. and our credible in quarter earnings strong success, also fiscal to will the to a organization. and players a It team maintain further as and surrounded on stay position basis, leaders to earnings we volume improved that on we're and is and 'XX. My throughout talented on we drive effort accelerate role now focused track and by ensure close Third performance this year

my X, Slide on seen are As near-term priorities simple.

environment First, our for workforce. provide safe healthy ensure continues to work Amcor and a global

year our fiscal are our and employees we performance, After and Second, improved we've our third stay and strongly. close positioned to today. to our full year XXXX customers, an key raised finish do stakeholders, guidance including well so, quarter

delivering clear keep our build our priorities fiscal fourth, momentum for that. we momentum Third, and And focused the stakeholders provide worked 'XX, to our as hard have business, ensure through for for stability on planning set by business the deliver to we continues. on the all and across cycle reinforcing our work teams

Our and changed. our changed has have not not strategy not agenda priorities has our changed,

with Slide Amcor's starting safety to on QX X. performance, Moving

and months experienced on environment. XX% Our the is culture of to X of or embedded been health and of teams a commitment healthy reduction compared Safety of the and in priority, our past XX focus critical injuries longer, providing to first have in we've and cornerstone to Amcor's XX% our months safe deeply our #X sites safety 'XX. work success. injury-free fiscal continue we and remains for our a is a

our for today messages on key Slide X. to Turning

First, in earnings the out expectations business outperformance share exceeded third in that in resulted adjusted underlying quarter February. the set we per for the

each Rigid through Flexibles year-over-year performance the Improved earnings sooner in resulted leading to than year-to-date a also quarter growth EBIT delivered to adjusted anticipated. cash growth, adjusted capital year working Our a Packaging segment in free increase flow. and Amcor returning we

several Second, earlier, as abated customer quarter destocking of we businesses. basis as end volume across and trajectory a I sequential significantly in mentioned experienced higher our third our improved on markets, demand most

trend, of earnings encouraging continuing and positive focused teams is our a third clearly to improved return costs, us quarter this and on consecutive and helped highly control a While an deliver leverage to this remain growth. earnings

and we of have and year. trajectories will improve, XXXX, believe fiscal to experienced is expect demand which by $X.XXX and quarter and volume and guidance quarter our for turned flow supported cash sequential in our continue we $X.XX momentum the March the further performance gives for financial us trends $XXX in adjusted first full per increase adjusted a the million share business corner guidance $XXX earnings range after calendar to across the growth million the weeks fourth EPS free our expected our year We April. to challenging the our reaffirm between to confidence Third,

with and compelling a Finally, Amcor. strength long-term in for of for strategy believe for market along our commitment We we capabilities, execution and dividend, our the to our convincing opportunities growing investment growth. allocation confident remain a capital and framework our make our positions, case investment

results. Moving to of summary a Slide X for financial our

and quarter. Better-than-anticipated of helped demand a the with the pleased in offset in 'XX growth improved year. trajectory to reflect believe our continued impact decline results and in in of the in of saw return EBIT cost cost Three as quarter. inflection of adjusted our broad-based Volume EBIT demand continued unfavorable with to profit of our the fiscal lower The December customer X% financial quarter significant compared are strong benefits entering the destocking up with X% and to months strong consecutive an per leverage the last March proactive point ahead trends X%. our quarter earnings a share results, X The strengthened. reached earnings volumes abated of performance year-to-date trends experienced we sales, and leading QX underlying in operating with business from and adjusted We third resulted the we've expectations first quarters actions. EBIT

the December care, $XX Our and approximately the another which cost million structural cost approximately in approximately a weakness, teams we volume result savings, in the and which declines volume including largely growth ongoing focus quarter remaining combined unfavorable in now net high-margin and initiatives across cost destocking several of behind These productivity in improvement health health represent of greater improving on volume sales benefits compared continue believe to leverage. $XXX of the anticipated reduction delivered of from earnings quarter, collectively primarily improved were approximately total another beverage trends, expectations, initiatives. and also resulted results categories volumes the This with business a of in outstanding million destocking health quarter is sales. Across Interest our Amcor's tax with share in significant categories is Outside benefits, of North reflects year. which care had for grew expected expects $X.XXX, further care impact with year, comparable than X%, constant XX% of quarter. predominantly with basis, categories, X% were which American business, related adjusted net our business, modestly were year, currency relatively X%. QX a XX% higher by of out QX to and than X% prior overall last volumes and and on of delivered flat lower down us. Price/mix called sales overall geographies. including the line we per earnings on total prior last and is with an

and compelling color first on dividend months which turn outlook. cash million the X it continue some through and $XXX We and through to totaled over further growing the shareholders year. I'll approximately the a return our provide to of significant repurchases, share to to and financials now Michael

Michael Casamento

Thanks, unfavorable X% price/mix compared PK, was X%, and and overall were hello, X quarter. percentage which on on X% everyone. decline and X of Net Beginning down an QX sales in with the of performance. with significant Slide Flexibles December segment a improvement points reflecting impact the QX volumes, our a for focusing

a the including growth unconverted North number an of in we meat, the cheese volumes double unfavorable on Europe, saw declines volumes mix emerging volumes categories. Flexibles balance impacted quarter, unfavorably third remained a quarter grew in markets, of growth and and pet across health driver continued, also As of overall products X% volumes for end America and in approximately quarter, with total, food, approximately film particularly several X% segment foil, destocking and and health in impact declined we last were our the primary weak care and unfavorable to volumes by care quarter. America North anticipated and price/mix health portfolio, unfavorable sales and X% care lower markets. Across rates, of called related in Across was the digits, net had high this net single-digit mid-single-digit and the down and Europe. In out at

grew quarter, care care, health business India trends, constant growth sales in combined $XXX lower Asian helped strong growth increased flat of performance we for prior saw Brazil, and a were Peru. the a the the Philippines and delivered and improvement across Asian Excluding EBIT strong, quarter, comparable earnings including year from in and cheese, was the than for meat cost last up business. EBIT margins of growth these broadly China led volume higher volumes leverage, another demand and to to through Mexico adjusted than million low regions, XXX restructuring on higher the Strong X in volumes, XX.X%. initiatives, volume basis modestly in by quarter quarter, X% with Latin good health single currency net offset basis. third in America, volume digits points volumes care also Thailand, QX respectively. Across the which Southeast improving In consecutive pet the and mid-single-digit were sequential region, and year.

lower Packaging constant currency Slide volumes. lower net sales comparable Turning to Rigid a reflecting mainly QX were X. on X% basis, on

X% meaningful key lingering the end destocking. America, in beverage continue markets, more significantly destocking. Latin volumes and in consumer were North volumes were represents volumes While with line December from demand for beverage year Amcor's to XX%, which customer sequentially soft overall demand the Brazil In a were down by some impacted offset down in Total December quarter, American experienced with last be impacted quarter. in overall volumes this along improving weaker improvement Argentina. we growth decline and quarter, in by over with Colombia XX% by was the

We Rigid and are year. to quarter Strong earnings earnings offset the of the with EBIT pleased lower productivity point margins on from measures up Packaging to business volumes, leading for restructuring modestly increase X.X% third over than focus leverage cost last and continued realization resulting more initiatives quarter. to from adjusted to return a basis see reduction growth, benefits in XX the EBIT an

fifth capital broadly on flow and within million ahead performance and of working free months with mainly reducing quarter. is year, the first outcomes balance expected half the Leverage approximately for of Adjusted range successfully the last cash for the cash quarter. $XXX Slide by first line sheet was driven the levels the at inventory in third consecutive X.Xx to X. improved on X Moving for

through levels, business the remains increases capital, cycling XXXX. As business than December temporary reflecting in and the of XX-month lower in our a reminder, historic trailing divestiture is EBITDA working at Russian

to to our the decrease XX. continue Xx brings our approximately outlook by at cash expect ahead, me Slide fiscal our flow in of supported end we fiscal Looking on to earnings leverage year, and seasonally stronger quarter. This will fourth

year. performance share per continue earlier, to our raising full quarter we reflect expectation EPS noted our to guidance PK the volumes the in and $X.XXX in adjusted third to improve the As year balance the business underlying through to that $X.XX are our for of will

remain initiatives. also controlling on deliver further and structural savings costs including QX, our We to expect from focused in

half. which approximately the to of or the to a single-digit related continue X% plus the For repurchases fiscal contribute X%. contributing of was earnings a underlying translation December we expect growth by sale benefit range, This our in organic favorable business share currency first in minus all negative approximately with adding low to the and Russian is benefit impact impact to offset up XXXX, X% business the in of of XXXX,

between negative our estimate higher X% for which a up into of year million account of the expect net from to impact takes and interest full to expense, million. interest $XXX also tax We updated expense $XXX

We over last on performance, quarter constant adjusted are on confident will grow share And expected build mid-single comparable third for and to currency overall down digits basis. our quarter and a fourth the earnings the year we to quarter in primarily volumes per low range, is expected care continued beverage. in in North fourth destocking due to weak demand in customer American categories and ongoing the consumer be are health by single-digit

the will fiscal us in continue the third fourth quarter, through experienced as the as enter XXXX. we expect volume we which improvement to We we progress quarter position well

million to million also reaffirmed range have the our cash for $XXX We adjusted of year. $XXX for free flow guidance

to back PK. I'll hand with So that,

Peter Konieczny

financial closing, expectation Thank will that is In guidance very all Amcor earnings you, balance the well year the globe the build 'XX leadership results, QX and highlight our Michael. continue is business. Amcor's we that established. for industry momentum across in our a fiscal of fiscal XX, Slide to on well-positioned

commitments Our preserve companies we through products momentum achieving take continue to cost on made world promote sustainability to smaller also controls. We're capabilities around in and enabling actions them to while the in confident will opportunities have objectives in taken improve talented and and the Amcor's protect, sustainable differentiated are and their best-known across employees on to brands closely reduce continue see and to capitalizing meet offerings emerging priority positive the to world's focus innovation our invest have markets assisting the to productivity. stakeholders, growth are we categories, their operations while the cost given growth, and they continuing

on to now we I to always focused be As growth. The capitalize position we the earnings me and that reinforcing but Amcor's will our role that we for to continued for on by track priorities our of and safety strong strategy, of ensure beginning are mentioned our the at second at and our of my agenda is accelerate maintain changed. focused call, momentum the stakeholders right and our agenda, teams have further in keep the our is very now top people close delivering not a on all right stay

us. the put are in we stronger Our our faced earnings trajectory QX calendar volume and growth underscores momentum as in financial performance confidence 'XX challenges further behind

have full mid-single-digit EPS We earnings and year delivering guidance, growth raised we QX. anticipate in our

gives Our our sight performance line expectation, shareholder few to value the we're questions. our line to first supports creation in April in and with the weeks return this creation to growth turn longer-term of and line of our now strategy model. Operator, to ready to a value over us growth commitments

Operator

of [Operator Your Baird. first from Instructions] Ghansham line comes Panjabi the question of

Ghansham Panjabi

given sounds a your upon customers? third of you forecast, like by I lower to that your it improvement do just just guess fiscal as during first 'XX? volume your that's off, upside you're than build a sustainable out XQ think is just going inventory year you in coming Do more Or this to function aggressive surprised the to you of destocking year-end look you quarter. think

Peter Konieczny

Yes. there's a Thanks. things away here couple the mean discussion the question. It's to of a great I of from quarter. take

that is we first let and that QX. But performance, back is to the one the third momentum volume carries had one, second the the really we volumes one that into is great get the really, over cost question. The improved, me believe

the second were remind significant volumes ourselves, to So quarter, quarter. we on sequentially down the third second improvement from XX%. To

is X% between year. drivers. That's at two were we much then mean you categories prior and X% the consumer impacts, customers, the and the demand it I when exposure And were that, by splits pretty down one we and our that quarter, equally market down, look coming in Third versus and to destocking. second

you by care much being portfolio, beverage. that North destocking and balance ended That decline. in health So our XX%, all much flat. it, that also pretty about you balance outcome about way X% pretty up means XX% because to pretty at of decline the of of and driven business, flat. And came pleased the And means portfolio with and health look American is was this when that beverage the X% think the the another up that American the is North in made care we're -- when

take when Now at performance, and I a step we back look now we few the quarter there's away. volume a third that take things

the by strong January, strong bit of unwind low to bit very confirm us, of December we mark in And from December question one the a about unwind month. first of left we pretty unusually was performance is a we also can much extent, a month. a certain when December that of in and destocking February, a a the we and QX around that volumes bit second a saw of sort how discussed driven The we January unwind And was quarter, benefited there as the of an talked in an month. behind of

the thing that we've we So that customers is towards background that responding also and here in talked -- that was the first is customers, particularly a are and and turning our between that the the last one. But margins. bit quarter. perform better, about and second volumes seen more better talking balance sort more more a dial towards of and large customers are more The

we abate. with health third certain we've And through. And a that American So extent, North would of pretty exception pretty beverage. the to some the that much in one much seen that what happened destocking lingering come is and then expected destocking the care

from the breaking just me make is look, down to performance came quarter, And sort and quarter the the is floor the slightly in to in But quarter, by to in Rigids being an second then significantly up you the market because the I two stop. color destocking in segments third balance and down when volumes, of just I made and then even I'll more impact third more Flexibles, terms the health look of it as pretty abated. impact on again, at down down one decline. into much all discussion being Flexibles X% quarter. the the let so from drove performance also went in in comments quarter the So it here of improvement. important. In flat we on down customer was portfolio third the segment, the the the the XX% second comment X% improved then that's of up. And have care Rigids The think XX%

continue We also. market, soft a but to see significantly Rigids destocking the rated as in

we you to So across to no when good be of discussed, continue abatement And believe board, And and improvement. to, question. to one, -- relates really, where I further what that components performance that -- in that in that the we think will believe we really see the continue second, also good back the we there's customer to QX. destocking; sustainable,

Operator

question next comes CLSA. from line of Your of Kang the Daniel

Daniel Kang

question care. on health a Just

comps going stock should and to some the given customer half it care volumes? forward, 'XX reasonable fiscal continued Can levels XQ, quarter. mentioned your working double that show to quite care improvement comment you from the fall year in be December to similar to XQ? And that there expect in first from health of is in just sounds which health You sequential was any memory digits with on whether we low improvement visibility

Peter Konieczny

help health bit. me care you Let with a

been situation third much quarter. really in care abating to will care, health really would demand reduce QX. marginally destocking expect performance the the overall, driver would because from do sort care I the the in of destocking, not so see health the the care health further main in destocking health So changed further between has overall and fourth has say, is the QX though of the improvement and sort second quarter. better We you the of

to most low by driven certainly a in matter believe quarter, health As that by of is of single-digits more again, in but want guide driven care that we'll we this everything also low in care. be of the sort to when decline in point exit first about volumes volumes. And is of see that of as -- that, we that fact, we're that quarter the quarter destocking far fourth would bit an decline the single exactly a to will bit 'XX, when on that would fourth a to end. as we health an -- thing all fourth of fiscal impact would trajectory, to with is at volume we improving It stretch talking But the I don't further expecting time. Maybe I I a with digits quarter. the in into of see go Maybe will know know fourth add flat an would one quarter. really the come we're

Operator

Adam line of the question Goldman next Your of Sachs. comes from Samuelson

Adam Samuelson

given actually talk I volumes the little on kind just little efficiencies about performance, especially to to from amount lack be cost was how the realized durable in fixed operating to to versus reductions would if prove declines you system deleverage gains still to and you hoping improvements the saw maybe and to business aggregate and profit the relative mix a cost period. Hoping variable leak of Or the leverage think how the have bit start maybe or serve thereof the normalize. and the to of period volumes in productivity here? just incremental kind volume costs those the of cost much productivity a Flexibles, bit the into variable quarter, side, in the in in

Michael Casamento

some Thanks on take We in Michael for business with here. which cost in took place. kind restructuring we're from pleased QX. million cost, look, the included really program that got we've the that. I'll of side, of question, another the $XXX benefit out Yes, the of cost Adam. performance It's the

through. to come So now starting now are we see that

doing? million, There's as we've a if focused things the back work cost we're take expected. And we actually you think and was about that So that two on. step just $XX been are doing, about what

and cost volume response is lower flexing earnings. side Russia in second we've cost program structural talked And productivity about operational then offset the divested environment. in to business, so to of of that that some trying Firstly, the the a the

that So and from in in Rigid well. both, the and saw both Flexibles the quarter, we segment we as saw benefits

that doing? and been really the pleasing. side, taking and demand account that's lower operational into And both We've the the was So in base, environment. we look, aggressive proactive what flexing been on cost have

So way. We're we've overtime some cost over And in labor shifts to reducing get with been extended focused out, customers, Honestly, we're so of there. the certainly really to closed environment, cost take shuts eliminating we've fully get where we've things drive been out take spend. we our to the we're the has that savings, the to going for opportunity that's a and also labor out work to can, long procurement. controlling that discretionary and been really on and when procurement aligning weekends driving plants done tightly other taking lower shuts team volume our take extended good that, us and an

plant side. And kind the of operating then on closures. structural the about that's on that's So side, more

plant and actually X X announced closure X X completed around recently, those. we've of we've restructures. or So closures the And more

The of majority Flexibles, pleased now also And Rigids. through we've and we're was million million to and in FY was So to the that few program million through, $XX we see million. second to 'XX, that benefit benefit million are in in flow half that benefits seeing come FY over $XX those a 'XX. And deliver QX, program, that of predominantly $XX report EBIT into we about going then in the but started now as a contributed another anticipated. $XX that

good but is we've again, stick out And what with would to is control a head of taken how it's difficult those areas. long we that going I count to the both business. So say of business cost determine the that significant term, in much pretty guess of

The that come out, do permanent. -- you time permanent, structural mean, over costs efficiency, able If mean quarters, with sustained. so anticipate $XX structural being the less. they'll we've cost they're think have we'd last the comes through that the procurement I out be productivity, million the be and those on to will benefits, I productivity, about improved improved several more over

that put as be So linear. back, the it's but shifts, labor to back the expect we'd come again, volumes to not into will continue. But have to business, we going rebuild

continue improvement, XX margin we So time, ongoing to that cost see will this take and taken you the continue but -- business in across Amcor's we'd of that through will XX to year. contribute basis mean a the we'd And improving, volumes added cost here, really typically, period XXX of we've expect quarter. I program a and measures performance on the a in margin enhancement. margin that was to increase delivered great. saw point we basis long back to this and points that strong, the over have out expect there We the just

So we There's feel pretty out. come good about where we're at. still more to cost

benefits taken. programs well actions as as structural already from some the the from efficiency we've in ongoing benefits further see QX You'll

Peter Konieczny

with growth environment pretty particularly would we're returned quarter profit because Rigids the active that's back we Michael, of here in in third And acknowledged been a the to still. I that the add that done business pleased soft the the on work segment

leverage a good business. to in speaks that So that

Operator

Your the Purtell of from Macquarie. John comes line next of question

John Purtell

The in one. commentary the pickup developed than my so ask release, sequential to just just from volume I'll the emerging Flexibles, mainly that in markets come appeared markets. from rather

So volume America North there Europe, and for improvement sequential much example? in was

Peter Konieczny

question. that's a also great Yes,

volume obviously our saw regions, developed we're And was and of markets, year. the our sort performance prior or saw right, we third low terms markets the still terms versus pleasing quarter, of on you're we in sequential which positive. performance of So country in improvement single-digit while bigger in growth emerging in the different negative

ones hit that now care sense, markets to you a health our would the bigger that make and Now those destocking, keep also markets. with to therefore, were with the got with more and normalization, exposure inventory particularly in the mind that builds heavily in were

Operator

question from comes of of Jefferies. the Your Richard Johnson next line

Richard Johnson

positioning Rigid I'm but think to right the just the how get the really pretty overall much than recovering sense of feel appearing Rigids. I every strategic a a at PK, And the part except the of of which backdrop be a quicker business slightly anyway, the group in you perhaps beverage is I'd be you on also in interested saying worked lot in to with moment, different position. of, other substrates in focusing plastics. particularly Plastics, market about

Peter Konieczny

really the I We've -- particular for tough volume business. we're we're had weakness, And possible a worked thanks the as business right Richard, us again. situation of we've of now. as in we in well question. advantage the to with a is take and right improving behind hard mean with there the believe the volumes situation now exactly position quarters to couple that's Yes,

So QX. discussing we after for low we quarter, back, we particularly discussing business I better can we said And we see in performance quarter confirm stand, in a said feel volume and where second we're was will the that the the That's our quarter that. third we think like the having the as now we second on believe -- point.

have businesses. the So strategic starting of believe, questions get, to Rigid we point. In Plastics, couple And side. at Rigid that we it's that a I've the felt not asking think capacity in all, look the we my of businesses Plastics, we a managed here when give we that's I've about But without good strategically. And been bit, you environment, to views back earnings Rigid the I'll first business right. myself. we you're a around want to Plastics, particularly from of Amcor

than very often, actually an of business important you one different when more North of it's number portfolio the beverage, it's the no for We a it. it's a Amcor. And American roof. that. question business. secondly, First scale we but discussing look at of businesses There's strong focus It's under about in -- all, business,

We Specialty so to started business, we have a where diversify. Containers

our have We American business. business, have and we [ a with closures business ] a Latin BC&A

So it's of a businesses. portfolio

We industry participate, Rigids really like have And good across positions. customer where that we the have. relationships we we

gone really good relationships. that we've example, the profit through plastic, said that, the back in the of strong lot that profile, solid with on to the a I when we've finally, beginning. strengthening restructuring, customer come overall I'll at growth. back sustainability us optimization a a enabled the in footprint generated to have to we We've business have done top is what leverage We has business, and of that return the of for context particularly important. And business And in also which

where want come It's and it the if deliver. or that's I little volumes Rigid the leave stand see to where I can Plastics call the would clarification. then you. and no I There's is it's Packaging question to want see the we we want way, business. just what right Rigid deliver -- to more, So think business Packaging back, business the we a we for now we you it business I Actually, know don't business. now. By Thank the said think Rigid the that

Operator

Jarden question next James of comes of Your Wilson line Australia. the from

James Wilson

that? able be that's else understand out, through are have driving that unchanged what's put to net had some there you just looks you've interest but capital leverage particularly that us guidance? you guys the I driving improvements, lower talk anything Would net that in the guidance given working your interest

Michael Casamento

the for thanks No, question. Yes.

guidance. You saw we us slightly the -- reduced

look, that million see we prior little $XXX guidance so to the ] or range capital [ bit and was outside cash the reduced just a business, the better we at the little there of look phasing it. million, million And forecast to profile we debt. and back we But timing mix the lot adjusted coming cost, a of that, of of the that timing for there's can really cash the interest saw rate guidance $XXX not accordingly. of on upside in change real this the and see on working fourth there's No to quarter, a down that's the that into improvements. We Our flows $XXX the million. of which, $XXX to the as quarter to

Operator

America. from Your of line the Bank Staphos of next of question George comes

George Staphos

could PK, in what implications customers are one you cheese give their the for you us And of perhaps you terms of in the other of well? some color a of and the bit companies, seeing growth of and targets protein the some in relatedly, are trends key some your pushing and markets? Flexible, in sustainability you're back seeing more as larger of on [ ] branded terms

Peter Konieczny

Sure.

Flexibles, a in drivers market pretty in main of QX QX. in impact. here: terms did volumes the between So again, comment make I two a improvement significant earlier and

health went balance much low -- drove destocking in were flat to and portfolio impact pretty the pretty destocking growing. and of the the are We the of versus volume it single the that third sort the care quarter, much prior and is is much decline slightly digits, year, to pretty of flat

one; differentiated business the we in products a and terms we be priority the pet Now market remember that of growth dynamics. you which categories are protein and meat; would breaks heard position a really categories in where that; we talk premium we're health here those meat, us with. the good fill the the we've And couple have be X where are beverage, in and in obviously, seen that against category to market cheese, have in those of would have we seen, really care, believe would care; performance you the like cheese driving coffee focused that, pleased drive. And in hot we pet food; protein, quarter, out and we particularly meat and

these shoots, I away growth Now that believing walk is digits. low this don't single will from These significant would like say are call the green numbers. and be

was, particularly mean So work a more and be But now take of want a time and initiative Europe, they little we basis we'd on and little America know question, of to Meat, here. that and that we come I to XXXX, we to my just less of the other we've years, as part learned be like little And and having would Unilever, targets of our also wins that that some a a alone. some cheese, industry do the learned first can of see, here mind. bolted together, also to seen. I see the to come waste out going up have in environment. we that things requires together. critical have make sustainability in for to discussions a And and on who's talking that side that pushing the putting lot their plastic, think being are sort initiatives. At but part effect here, for the Look, check particularly if of targets their conversations. resetting we out the day, we're to to in have was about that to have set Nobody and business. we're economy circular will we which come course, plastic the the targets on circularity keep participants don't of the the That noticed out the more industry and we've -- commitment, end the place, about sustainability has to worked targets industry in essentially we ago. I correctly started the and the they if take understanding topic, the it on more. Maybe backwards, stay I color a closely. is, which ones the you little think have about asked after follow the pushed love North very to closely the a get over less may were destocking, just out of my you regional with And in lot. got a lot, destocking. what right I on Actually, make a think years the notes

simply ] a matter So to I what it's realism additional [ saying. accept of they're think just

we this customers them. out we have, XX% really or alternatives this to when packaging structures, to pretty in good point that first our recyclable, a We're company packaging by have because corner. progress those out at make available, not of much terms them to the recycle-ready time. reusable we'll at our made push of making pledge XXXX, or compostable we're to in We there XXXX. targets want sell and have of time, Now do and Amcor, portfolio the have in ready XXX% We're we're need we in in point the roughly packaging around pledge our they

So piece. to to like sustainability Unilever is, to pushing We're We now. our everybody on right is. are targets anything are, committed means that We're don't industry big do it very others needs particularly out. customers think our that targets their to holding particularly their our us the targets

So drive we continue with full to force. that

Operator

the from comes Brook of question of line next Campbell Your Barrenjoey.

Brook Campbell-Crawford

unchanged. third than quarter, to growth in is trajectory Just quarter financial was the saw bit quarter business, your been to you've back versus despite mid-single The EPS some kept expectation expected. which In with the a down fourth Feb. better for at at EPS. EPS you this respect growth And third be this, year the has in digits,

into Any fourth So fourth quarter upgrading performance that my the from quarter? back wouldn't great. really is, what's first holding would be the question better why the reasons continue for expectation quarters X you

Michael Casamento

take that Yes. for can Michael Thanks, Brook, here. you. it's I one

January, growth, an February quarter weren't improve helped led which on on saw March might out look, of really slightly the to couple performance that back to sure able clearly, a growth, December we and the performance, our which EPS was And was we with for December, some us better the December. on of relating some translate of of pleasing. was unwind what being that we And really EPS to So the pleasing. in PK yes, QX worked we that coming way the of how rest from in saw XXX% things, volumes improved really finished the was period was earlier. When We deliver out that through touched quarter. clearly, in some as and of more unwind, which

that's That's sequential the on. That in the We've So In the really the clearly, volumes itself of point you've to back there. the year by $X.XX, held so That's past. we're seen going sequential that $X.XXX, has really talked mix, to in health and some taken that touched both the volumes really performance volume full us back we've we're an see increase to PK still care. guidance the guidance. QX, of in full on And drivers improvement, QX. year key back increase continued expecting as in destocking profit. in holding the which improvement QX the that, in improved in unfavorable

QX, there. And quarter to So to through piece unwind the adding absorption mid-single also biggest cost start well is expecting the start the our for the from we're get that earnings health volumes But unfavorable the that future benefits through care there. as improve good into will although will QX QX, cost seasonally structural still certainly abate, to as from is the We as which initiative P&L continue expecting in into good out, from leverage mix normalize digit. that trajectory well. and as

So for QX. is the about we feel pretty outlook where good

didn't time. that confirmed confidence in the in parts get the marketing to delivering we ahead we April within We in that this of range. given range, Clearly, seen given feel need ourselves point a at there. What range. just we've early outlook, we so we've have of And confident felt the we've you volume

outcome could reasonable a come expecting, QX. And we're better impact let's one get little the that the full way and clearly, of as that's upper volumes what that's So end the well. see year the raw cost, with towards along than in for a range where then, if in the materials range,

feel good and to we a where say in deliver what's year. ahead pretty I'd overall, QX landed QX in So we've of about good us

Operator

line the from Your of of Keith Chau next question comes MST.

Keith Chau

regulation that European any to plastics know the this impacts some I to whether you Union? I or being headwind Parliament around PPWR Can that mitigation is expected are to in the a for headwinds. on with give headwind think question the views a and a of that Peter, into around place, planning changes to sense put strategies are are the Amcor just guess, in in be, Flexibles by month. for business But keen to plastics if there's European respect Amcor earlier voted was what us a planning the you industry is mitigate in there any whether XXXX. your be Europe just is there hear Amcor ahead the

Peter Konieczny

this making of to make obviously us sitting I'll because from value a the a supportive legislative PPWR that pretty the think welcomed play. Look, in an we're creating also as chain very drive out progress economy we're strategy. that We're for the -- environment and we're Amcor has whole much sustainability to to such, actually our and start. of everybody I And sort and It's saying industry whole the -- by by plastic. that developments question from regulatory industry that circular Amcor direction. Again, role more and is the at into falls great start allows into

plastic for the recycled, that Our are XXXX. be that making of that job hitting really good end a little and can I up progress targets by is in recycle-ready, come with to earlier we're said our packaging structures

certainty a structures, challenge we packaging structures want these of have for of help ready we in not I economy already have the business we're gets support to plastic remind the extent And life. that doing plastic and and substrate. substrate to find it's level circular are its addresses recycle-ready when So is these there and direction so is gets certain And provide very that regulation a welcomed. customers got sustainability. that, them we're place is also efficient The can into with in right? here. high-performing creating mean, many place that end commercial. And us today, the work to environment, we by set. context and So very directions ourselves the to why to efficient a the -- regulatory because in high-performing of packaging. everybody The much order It's

Operator

Your question McDonald E&P. Cameron from of next line the comes of

Cameron McDonald

Question for I Michael, if can.

floating the Can of to There exposure guidance. -- due like? hedging your rate us interest exposure. rate rates. understanding is the some back significant interest my that, had mainly you what actually and year, looks to you And profile going remind was Just was last obviously, hedging that to

month your into interest we about So FY how profile rate that the do think 'XX, exposure the as hedging rate that in in volatile changing please? have been to environment so, interest and or last rather expectations

Michael Casamento

sure. Yes,

first -- look, middle coming off that, XX% is the start, the we With floating. point about today of until now should XX% debt no we think fixed, maturities the profile XXXX. I have

interest So respect, book the debt got we exposure. can flexibility how of that bit from we've the a in manage and

some As 'XX, for you 'XX. look for you FY forward, guidance guidance we any but we've haven't clearly, given provided

not the we XX on that of look you maturities the months the material our at then we've and so, expense just next interest you some movement over look and coming. curves at got have debt based or we're expecting a forward the in our If profile debt profile

how we well. through work and to flexibility some book as exposure got debt that that currency we've So manage

that look provide the put material into interest on any impact in you when together, or forward we on time. guidance FY we So expense you we'll see when that at change all as we But provide year guidance the full 'XX for further that don't August 'XX.

Operator

Your comes next Longo question from Morgan. Anthony of the line of

Anthony Longo

a one on Just quick destocking.

of here? that that And as in top no the about but you how ultimately, just from customers' that philosophies but light you're thinking does bit I inform some you to already, thinking inventory had the have and spoken that restocking line your You've date? about growth positive of customer early how ultimately are discussions there's here around what expectations guidance, well. from appreciate a management fair about cycle the

Peter Konieczny

industry, the starting to they're the very inventory and anyway, built more so We right is couple level. of -- little of and I'll categories. partly was inventory shocks industry because levels chain be reasons. But way that care of building inventory, of wants across build the in a that to the health their have other protecting maybe line see to they we're also seeing normalizing they top on that because again after we've we're the and a environment normal is delayed conservative last Look, look and they what are we that industry holding it. correction over destocking supply a a at bit again the probably pretty this then start much currently of volatile the environment, Michael the is a by sort is seen their industry, The which really there too now And reduce seeing can dynamics now driven in years. that then by confident that's derisking

is Now of efficiency new normal going what in looking that it from rates the terms and interest inventories, we're what right inventories new The that's cost of of before. is through industry probably down drive further. because at different running Holding was now. levels

inventory, they business. along those will see the will will changes of we in go forward, but be Going seasonality tactical or the with

the to a everything new a to that see we trend about not there I think down So different coming businesses. or from it and The be the is following tactical as is is to going normal, industry restocking. seasonality would of there

-- behind renewed and So also that's about impact and hopefully customer going see how I also exposure then forward, think extraordinary will and category we And us, with have therefore, this interest it. our once we a stronger demand. consumer and

will growth. We top line see

Operator

comes Your of of question last from Scott the Andrew Stanley. Morgan line

Andrew Scott

items a for maybe last get versus million to see Can sight line charges you. of seeing quarter. of below-the-line you are end restructuring Michael, question to there, talk I items? just below-the-line up things, relative And noncash two us, to the these of do when $XX-odd just there? an we cash

Michael Casamento

now the through Look, the the pretty around are see in that Andrew, there so. XX had main We've X/X quarter benefits program, to through. of months for from way is in we've really That come the started or much restructuring last items which program. the program the

$XXX $XXX to cash. that might million. We've You invest spent about remember, on committed to around in program we million date

are go. But see starting we to million $XX benefits to million come $XX that. the from to got still we've So through

So pretty the about year, And that expect program. we're by pleased most the really, end of to of we'd through the calendar the progress. be way

the through, X said, the see way now $XX as the 'XX. we're from million getting and we'll expect benefits, that quarter quarter pleased we're on to that in in And build we that's there. I So came it the then into and

the program's at, it's where So with on track. and pretty pleased

Operator

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

Peter Konieczny

cost we importantly, we're seen to based the to performance. And improvement call really out before in margin everybody, is a has QX that the combined thank we will the have to some thing The momentum QX. broad-based into volume business underlying the impacted on operator. that believe the pretty was us. in quarter for also we you, hope here with some that -- Yes. with good this were pleased say in that carry in that Look, want -- performance here order we've third more the Thank interest our how you, for turned able we only company. way I that demonstrate I we close the

of fiscal the and situation you we're that, at pleased with We're very to call, year. talk the end much. again we're with we're in. to going going And we're going the momentum. advantage to close take very the the So each of other Thank to

Operator

conference concludes This today's call.

You may disconnect. now

Amcor (AMCR) 30 Apr 242024 Q3 Earnings call transcript