Amcor Plc · NYSE:AMCR
Amcor — Investor Presentation (June 2016)
37 slides from Amcor's investor presentation, June 2016
Slide 1: Amcor Rigid Plastics Latin America
Amcor Rigid Plastics Latin America June 2016
Slide 2: Agenda
Agenda 1 Safety Briefing 2 Introduction to ARP Latin America 1 Where we are 2 What we do 3 Strategy 3 Looking forward 1 Understanding the growth drivers and our competitive position 2 Growth opportunities 4 Wrap up 2
Slide 3: Safety – Evacuation Route
Safety – Evacuation Route Salas Infante Dom Henrique 3
Slide 4: Staying safe on the shop floor
Staying safe on the shop floor Required safety behaviors for visitors Listen to your guide and pay attention to signs. Take Action, Take Care! Obey all instructions (verbal or written) is Amcor’s safety philosophy and a No jewelry cornerstone of staying Consult your guide in case Mobile phones are n
Slide 5: Agenda
Agenda 1 Safety Briefing 2 Introduction to ARP Latin America 1 Where we are 2 What we do 3 Strategy 3 Looking forward 1 Understanding the growth drivers and our competitive position 2 Growth opportunities 4 Wrap up 5
Slide 6: Amcor in Latin America
Amcor in Latin America 1 Dominican Republic Rigid Plastics ATP, ARP & Flexibles 1 3 Mexico 1 Puerto Rico 28 manufacturing plants Latin America 2 El Salvador 1 Trinidad & Tobago 10 countries 6 Venezuela 38 sites 1 3 Colombia Tobacco Packaging 2 Ecuador 3 manufacturing plant 12 countries 2 6 1 Brazil
Slide 7: Amcor in Latin America
Amcor in Latin America Revenue Growth ATP 7% 2013-2016 CAGR AFA 13.2% 27% Revenue Mix ARP 65% AFE 1% Jun-13 USD Jun-14 USD Jun-15 USD 7
Slide 8: Amcor Rigid Plastics (ARP) Key Messages
Amcor Rigid Plastics (ARP) Key Messages Robust growth and Local management Unmatched Significant growth Technology and financial performance teams with in-depth geographical coverage opportunities exist innovation leader in Outpaced GDP and understanding of Scale. Favorable Latin America industry gr
Slide 9: ARP Safety Record FY15
ARP Safety Record FY15 ARP LATAM has achieved … out of 28 plants, 89% had best-in-class safety record … no LTIs and 71% no RCs … 7.89 97% 90% 89% 79% 71% 71% 4.26 66% 64% 3.68 51% 44% 2.10 1.91 1.46 1.46 1.27 1.05 1.46 1.3 0.92 0.99 0.36 0.48 0.58 0.13 0.22 0.14 0.15 FY11 FY12 FY13 FY14 FY15 FY07 Fy
Slide 10: ARP Regional Footprint
ARP Regional Footprint Caribbean Miramar Fl 10 countries Mexico 1 61 1 14 off-site plants 1 1 2 31 14 on-site plants 137 Colombia Central America 2300+ co-workers 2 1 1 1 regional office 1 329 120 Ecuador Venezuela 1 1 1 5 Peru Argentina Brazil 119 518 1 2 4 113 1 2 253 642 10
Slide 11: Long History of Operating in the Region
Long History of Operating in the Region Mexico Dominican Republic 2002 Tlazala 2010 Santo Domingo 2002 Guadalajara 2002 Cuautitlán Trinidad & Tobago 2013 Trincity Central America 2011 Olocuilta Venezuela 2002 Lourdes 1998 Valencia More than 2006 Caucagua Colombia 2009 Funza 2005 2004 Los Teques Turm
Slide 12: Volume by Country FY15
Volume by Country FY15 Volume in Billion units Argentina, Brazil and 2.5 CAM collectively account for 60% of the total business Argentina Brazil CAM Colombia Ecuador Peru Venezuela CAM = Central America, The Caribbean, Mexico 12
Slide 13: Consistent PBIT Growth in Spite of Economic Cycles
Consistent PBIT Growth in Spite of Economic Cycles PBIT in US$ million CAGR +8% FY10A FY11A FY12A FY13A FY14A FY15A 13
Slide 14: Latin American Leadership Team
Latin American Leadership Team Ricardo Vasi VP & GM Latin America 28 years Monsanto, IBM Julie Sauvé Enrique Sobrino Alberto Mascarenas Mauro Catopodis VP Finance Dir. HR VP Operations VP Sales & Marketing 24 years 25 years 25 years 20 years ATP, PWC Microsoft, Lucent, Clorox Unilever, Kraft Foods C
Slide 15: Managing resin, inflation and FX
Managing resin, inflation and FX -7.9% -11.3% Amcor is well protected -11.6% against currency and inflation fluctuations: -15.1% 1) Resin is purchased in US$ and priced in US$ 2) Local cost inflation (energy, labor, etc.) revised on an appropriate cadence depending on country’s inflation 3) Several
Slide 16: Update on Venezuela Operations
Update on Venezuela Operations Venezuela economic conditions are exceptionally challenging Amcor has elected to adopt the floating exchange rate (DICOM) for Venezuelan Bolivars for reporting purposes For year ended 30 June 2016: Operational earnings not impacted, Rigid Plastics outlook unchanged One
Slide 17: Our Customers
Our Customers The top ten customers account for 75% of the regional business Customer A Customer B Customer C Customer D Others Customer E Customer F Customer I Customer G Customer H 17
Slide 18: Key Regional Competitors by Country
Key Regional Competitors by Country Country Amcor Competitor A Competitor B Competitor C Competitor D Argentina Brazil Colombia Dominican Republic Ecuador El Salvador Guatemala Honduras Mexico Panama Peru Puerto Rico Trinidad & Tobago Venezuela 19
Slide 19: Latin America Strategy
Latin America Strategy We will compete by being the best in: Operational Excellence Running safe, efficient, low cost plants that benefit from scale and technology Create value Customer Focus for our shareholders, Delighting our customers through service, employees and winning value propositions and
Slide 20: Operating Model
Operating Model How we operate The value it brings BU GM locally based Faster reaction time Independent BUs Focused – with Operation Functional leaders with direct Better understanding of unique local landscape Accounability report to local GM Closer to customers + Portfolio risk management Strategi
Slide 21: Agenda
Agenda 1 Safety Briefing 2 Introduction to ARP Latin America 1 Where we are 2 What we do 3 Strategy 3 Looking forward 1 Understanding the growth drivers and our competitive position 2 Growth opportunities 4 Wrap up 21
Slide 22: GDP Growth in the Region
GDP Growth in the Region 6.9% Average GDP Growth 5.7% 2005-10 4.6% 4.8% 4.5% 4.5% 4.3% 4.0% 4.0% 2010-15 3.7% 3.4% 3.4% 3.0% 2.7% 2.3% 2015-20 2.4% 2.0% 1.9% 2.1% 1.2% 1.0% 0.6% 0.2% (0.7%) Despite economic Argentina Brazil Columbia Ecuador Mexico Peru Venezuela Latin America slowdown, Latin America
Slide 23: Worldview macro economic indicators: Population, GDP and GDP per capita
Worldview macro economic indicators: Population, GDP and GDP per capita 60,000 Argentina 55,000 Brazil 50,000 Size of the bubble indicates GDP in US$ billion China 45,000 GDP per Capita (,000 US$) 40,000 Colombia 35,000 Ecuador 30,000 25,000 Europe 20,000 Mexico 15,000 10,000 Peru LatAm 5,000 Venezu
Slide 24: Low PET Consumption per Capita with Huge Growth Potential
Low PET Consumption per Capita with Huge Growth Potential PET consumption per capita (kg/year) 10.8 6.70 6.30 5.30 4.88* 3.90 2.90 2.50 1.70 Central America Caribbean Source: DAK Americas 2016, * Canadean 2013 24
Slide 25: What Drives PET per capita consumption
What Drives PET per capita consumption 3.4% Demographics – Latin American is the region with highest population growth rate worldwide 2.4% 2.3% 2.0% Material replacement – opportunity to convert to PET 1.3% away from glass, carton and metal packaging 0.9% Growing middle class and increasing disposab
Slide 26: Deep Understanding of Where We Can Be Competitive
Deep Understanding of Where We Can Be Competitive Country 1 Country 2 Country 3 Country 4 Country 5 Country 6 Country 7 Country 8 Grow PF Protect Maintain CSDW Exit / Don’t Enter CB DP 27
Slide 27: Amcor’s Historical Growth by Country
Amcor’s Historical Growth by Country 2010-15 Avg. AMCOR Volume Growth Amcor delivered strong performance 4.4% 5.3% 10.3% 9.8% 10.1% -14.4% 1.8% 2.8% underpinned by: 4.8% 4.7% 5.4% 4.6% 4.3% 4.8% Customer relationships 3.6% Innovation 2.7% 2.8% Scale position 2.2% 2.4% 2.3% 1.5% 1.0% 0.2% Note:
Slide 28: Agenda
Agenda 1 Safety Briefing 2 Introduction to ARP Latin America 1 Where we are 2 What we do 3 Strategy 3 Looking forward 1 Understanding the growth drivers and our competitive position 2 Growth opportunities M&A / Diversified Products growth Self-manufacturing exits Innovation 4 Wrap up 28
Slide 29: Latin America Market Poised for Consolidation
Latin America Market Poised for Consolidation Self-man Others Others account for 25+ converters Source: ARP LatAm Internal Research CY 15 Rigid Plastics volumes in countries where AMCOR operates 29
Slide 30: Market Opportunity
Market Opportunity Market Size for countries in which AMCOR operates Total Market Size(1) Rigid Plastic Market Size (Rigid Plastics, Glass, Metal, Carbon, Flexibles) Category B units CAGR ‘10-’15 B units % CSDW (2) 56.9 1.9% 42.6 74.9% CB (3) 17.2 8.6% 7.8 45.5% DP (4) 277.6 2.0% 53.8 19.4% Total 35
Slide 31: Diversified Products provides opportunity for growth
Diversified Products provides opportunity for growth Overall Packaging Demand Rigid Plastic Demand Amcor Rigid Plastics LATAM by Category by Category FY15 Volume Breakdown 351.7 billion units 104.2 billion units CSDW CSDW CB CSDW CD DP DP Caps DP PF CB Includes rigid plastics, glass, metal, cartons
Slide 32: DP segment continues to grow and offers opportunity for material replacement
DP segment continues to grow and offers opportunity for material replacement/conversions 60 6.0% Unit Volume 2014 (Billion Units) 50 5.0% % CAGR 2015-20 40 4.0% 30 3.0% 20 2.0% 10 1.0% 0 0.0% Dairy Drinking Yoghurts Oils & Sauces Personal Home Water CSD Juices Sports Milk Fats Care Care Drinks Produ
Slide 33: Brand companies considering exits from self-manufacturing are being monitored closely
Brand companies considering exits from self- manufacturing are being monitored closely Early 2000s - Self manufacturing Lack of merchant suppliers in the region and value chain economics led to self-manufacture of preforms. Today – Exiting self manufacturing Self manufacturing operations require re-
Slide 34: i2i – Ideas to Innovation
i2i – Ideas to Innovation Latin American Innovation Program Process Objectives Enabling Capabilities: Results New insights to differentiate and Processes, Tools, Structure GROW, consistent with ARP’s Phase 2: 704 ideas generated out organic growth initiative Scoping of which 130 have been further 1
Slide 35: Agenda
Agenda 1 Safety Briefing 2 Introduction to ARP Latin America 1 Where we are 2 What we do 3 Strategy 3 Looking forward 1 Understanding the growth drivers and our competitive position 2 Growth opportunities 4 Wrap up 35
Slide 36: What does all this mean?
What does all this mean? PBIT in US$ million CAGR >10% CAGR +8% Organic growth Self manufacturing exits Material conversions Acquisitions FY10A FY11A FY12A FY13A FY14A FY15A FY20 NB: Excludes impact of change in accounting treatment for Venezuela. Refer ASX release dated 9/06/16 36
Slide 37: Key Messages
Key Messages Robust growth and Local management Unmatched Significant growth Technology and financial performance teams with in-depth geographical coverage opportunities exist innovation leader in Outpaced GDP and understanding of Scale. Favorable Latin America industry growth rates country dynamics