Slide 1: Amcor Information Slides
AMCOR INFORMATION SLIDES September 2006
Slide 2: Disclaimer
Disclaimer • This presentation contains forward-looking statements that involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to, Amcor. Forward-looking statements can generally be ide
Slide 3: Mission, Vision and Values
Mission, Vision and Values Amcor’s Mission, Vision and Values philosophy is at the core of how we conduct our business and forms the foundation of our future direction. MISSION • To generate sustainable shareholder value – by becoming premier packaging solutions provider; creating superior customer
Slide 4: History of Amcor
History of Amcor VICTORIA NEW SOUTH WALES Ramsden’s Melbourne Mill AUSTRALIAN PAPER CO (1868) Collingwood (later Liverpool) Mill (1868) VICTORIAN PAPER MNFG CO FEDERAL PAPER Geelong (Fyansford) Mill (1868) MILLS Broadford Mill (1890) Botany Mill (1901) THE AUSTRALIAN PAPER THE SYDNEY PAPER MILLS MIL
Slide 5: Amcor at a Glance
Amcor at a Glance 1995 FUNDAMENTALS 2006 • Leading paper & packaging • Leading packaging company company in Aust & NZ in Aust & NZ • In top 10 globally • Ranked 3 globally by sales • Largest PET producer globally Sales $6.5b 75% Aust/NZ Sales ~ $11.4b 20% Aust/NZ 25% Rest of World 80% Rest of World
Slide 6: Evolution of Amcor
Evolution of Amcor AUSTRALIAN ACQUISITION FOCUSED PAPER PAPER & • FLEXIBLES INTERNATIONAL DIVESTMENT PACKAGING • PET PACKAGING 1995 2006 Sales $6.5b 75% Aust/NZ Sales ~ $11.4b 20% Aust/NZ 25% Rest of World 80% Rest of World 20,000 employees 24,000 employees ~ 140 plants ~ 217 plants 21 countries 34
Slide 7: Amcor at a Glance
Amcor at a Glance 1995 STRUCTURE NOW Amcor Limited Amcor Limited Containers Amcor Fibre Amcor Amcor Asia Packaging Packaging Australasia Investments Amcor 50% Kimberley- Amcor Flexibles Paper Group Clark Aust Amcor PET Amcor Group (includes 46% Spicers Paper Packaging Sunclipse Amcor Rentsch)
Slide 8: Management Structure
Management Structure Ken MacKenzie Managing Director & CEO Amcor Flexibles (AF) Louis Lachal Eric Bloom Billy Chan Bill Long Gerard Blatrix Peter Brues Jerzy Czubak Managing President & Managing Managing Director, President, Director, CEO, Amcor Director, Managing Director, Managing Director, Amcor
Slide 9: Operational Structure
Operational Structure Amcor Limited Amcor Flexibles Group Amcor PET Amcor Amcor Amcor Asia Packaging Australasia Sunclipse Amcor Flexibles Amcor Rentsch • No. 1 globally • No. 1 packaging • No. 1 globally • No. 1 globally • Leading • A leading for PET company in for flexible for tobacco distribution
Slide 10: Amcor at a Glance
Amcor at a Glance 1995 GLOBAL PRODUCT MIX 2006 Cans Other Closures – Metal & Plastic 8% Flexibles PET Plastic Tubes Corrugated & Paper PET Rigid Plastics 17% 35% 20% Cartons 8% Metal 4% Papers & Paper Based Packaging Flexibles 28% 80%
Slide 11: The Way Forward
The Way Forward Improve EXECUTION FOCUS shareholder Strong Customer Capital market & market Low cost discipline value positions focused CULTURAL CHANGE • Execution priorities announced in August 2005 – Two to three year program • Significant progress in all areas over the past 12 months Substantial
Slide 12: The Way Forward – Strong Market Positions
The Way Forward – Strong Market Positions EXECUTION FOCUS Customer Strong and Capital market Low cost market discipline positions focused • Flexibles and tobacco packaging in emerging and attractive markets • Custom PET Good Grow Assess: • Select Market segments in Australasia • Segment attractivene
Slide 13: The Way Forward – Strong Market Positions
The Way Forward – Strong Market Positions EXECUTION FOCUS Strong market Customer and Low cost Capital FIX market discipline positions focused • Opportunities to substantially improve underperforming businesses: – PET in Mexico – PBIT improvement of more than USD15 million over two years – Fibre in A
Slide 14: The Way Forward – Strong Market Positions
The Way Forward – Strong Market Positions EXECUTION FOCUS Strong market Customer and Low cost Capital SELL market discipline positions focused • Asset sales – White Cap Closures – Asian corrugated, sacks and closures – Australasia PET – Review ongoing and further asset sales possible Completed asset
Slide 15: The Way Forward – Strong Market Positions
The Way Forward – Strong Market Positions EXECUTION FOCUS Customer CLOSE Strong and Capital market Low cost market discipline positions focused • European Flexibles operations: – Closing two plants – Colodense in the UK and Hochheim in Germany – Cash costs of €32 million – Improved earnings of €10 m
Slide 16: The Way Forward – Strong Market Positions
The Way Forward – Strong Market Positions EXECUTION FOCUS Customer GROW Strong and Capital market Low cost market discipline positions focused Organic Growth Acquisitions • Custom PET • Tobacco Packaging – New plant for Gatorade in the US – Increased investment in Vision Grande – Specific projects i
Slide 17: The Way Forward – Strong Market Positions
The Way Forward – Strong Market Positions EXECUTION FOCUS Customer Strong and Capital market Low cost market discipline positions focused Good Grow Summary Assess: • Substantial progress over • Segment attractiveness the past 12 months • Competitive position Fix • Review ongoing and on Needs improve
Slide 18: The Way Forward – Customer & Market Focused
The Way Forward – Customer & Market Focused EXECUTION FOCUS • Focus is on: Customer Strong and Capital market Low cost market discipline positions focused – Building capability in sales and marketing – Changing culture • Extensive program developed and being “rolled out” across the businesses – Wave
Slide 19: The Way Forward – Lower Costs
The Way Forward – Lower Costs EXECUTION FOCUS Customer • Operational Strong and Capital market Low cost market discipline positions focused – Continuous cost reduction at the plant level – Improved focus and execution discipline – Substantial component of the turnarounds is lowering costs • Procurem
Slide 20: The Way Forward – Capital Discipline
The Way Forward – Capital Discipline EXECUTION FOCUS Strong market Customer and market Low cost Capital discipline Capital discipline is managing the positions cash flow and balance sheet to focused deliver optimal performance for shareholders • The focus is on: – Capital expenditure – Working capit
Slide 21: The Way Forward – Capital Discipline
The Way Forward – Capital Discipline EXECUTION FOCUS Customer Strong and Capital market Low cost market discipline positions focused Base Capital $442 million • Capital required for existing businesses – Maintenance spend – Cost reduction projects – Incremental growth • Depreciation $473 million
Slide 22: The Way Forward – Capital Discipline
The Way Forward – Capital Discipline EXECUTION FOCUS Customer Strong and Capital market Low cost market discipline positions focused Growth Base Capital Capital $442 million $70 million • Funding the specified growth markets – Vision Grande $55 million – Custom PET $14 million (Wytheville) • Funded
Slide 23: The Way Forward – Capital Discipline
The Way Forward – Capital Discipline EXECUTION FOCUS Customer Strong and Capital market Low cost market discipline positions focused Growth Base Capital Capital $442 million $70 million Reduction in working capital of $123 million • Average working capital to sales ratio increased from 11.0% to 11.4
Slide 24: The Way Forward – Capital Discipline
The Way Forward – Capital Discipline EXECUTION FOCUS Customer Strong and Capital market Low cost market discipline positions focused Targets for 2006/07 • Base capital expenditure to be around depreciation • Spending on growth projects for 2006/07 approximately $110 million • Reduction in the averag
Slide 25: The Way Forward – Capital Discipline
The Way Forward – Capital Discipline EXECUTION FOCUS Improved Cash Flow Strong market positions Customer and market Low cost Capital discipline A$ m 05/06 focused PBITDA 1,249 Interest (240) Tax (79) Base Capex (442) Significant items (cash component) (26) Movement in w.c. 123 Other (63) Operating c
Slide 26: The Way Forward - Summary
The Way Forward - Summary Improve EXECUTION FOCUS Strong Customer Capital shareholder market & market Low cost discipline positions focused value CULTURAL CHANGE • Substantial changes to the leadership team • New culture being developed based around the three key areas of the execution: – Customer a
Slide 27: The Way Forward - Summary
The Way Forward - Summary Improve EXECUTION FOCUS Strong Customer Capital shareholder market & market Low cost discipline positions focused value CULTURAL CHANGE • Excellent progress in all areas • Benefits to be realised over the next 12 to 24 months
Slide 28: Summary
Summary • Key issues understood • Execution plan established – Strategic – Operational • Benefits from execution to take time • Stability of earnings and cash flow • Short term negative issues to continue – Input costs • Modest expectations for current year • Substantial upside in earnings and retur
Slide 29: The Strategy related to divisions
The Strategy related to divisions Internationally Focused on selective, high value added Global or regional market segments leadership positions Specialty PET Flexibles Folding Distribution Containers Cartons Australasia Product Leadership in Leadership & Broad product offering Australasia Innovatio
Slide 30: Changing face of Amcor
Changing face of Amcor Divestments Acquisitions John Sands Greeting Cards Group Leigh-Mardon Printing Business 1995 Rentsch Folding Cartons – Switzerland Corrugated packaging business Europe 1996 European Flexibles Business (UCB) Paper Mill in USA 1997 Leigh Mardon Flexibles Australia Sawmilling Bus
Slide 31: Health and Safety
Health and Safety 15 L T 10 I 5 F R 0 1997 1998 1999 2000 2001 2002* 2003* 2004* 2005* 2006 • Amcor’s vision for safety performance - that no-one is ever injured on an Amcor site. • The “No Injuries” program was introduced in 1997 and has resulted in a massive drop of working days lost per year - fr
Slide 32: Importance of “Triple Bottom Line”
Importance of “Triple Bottom Line” • Amcor is committed to the concepts of sustainability. • Long term economic performance is linked to environmental & social performance. • Member of the World Business Council for Sustainable Development and the Dow Jones Sustainability Index. • Amcor was one of t
Slide 33: PBITA to Average Funds Invested
PBITA to Average Funds Invested 9.6% Pre Tax WACC Target – 15% % 14.0 12.9 12.8 12.2 12.0 11.1 11.1 10.9 11.3 11.2 10.0 10.0 8.0 6.0 4.0 2.0 0.0 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 •97/98 and 98/99 are PBIT to Average Funds Employed •All calculations before significant items
Slide 34: Ranking of Major Global Packaging Companies by Sales 2004
Ranking Of Major Global Packaging Companies By Sales Calendar 2004 Tetra Pak Smurfit-Stone Container Amcor International Paper¹ Crown Holdings Toyo Seikan² Owens-Illinois Alcan Packaging Rexam Ball - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2004 Sales (US$) Notes: 1 Packaging Div
Slide 35: Summary
Summary V1 Reshaping & growing Optimizing 1998 2004 2006 Australian Leading Global Paper & Global Packaging Packaging Packaging Company Company Packaging Industry Leverage position Company Consolidator to improve returns Delivering good growth in both earnings and dividends
Slide 36: Broad Global Platform
BROAD GLOBAL PLATFORM 217 plants in 34 countries Annual Sales $11.1 billion
Slide 37: Amcor PET Packaging
Amcor Pet Packaging Key Drivers Opportunities Priorities - product innovation & - strong volume growth - management of resin cost Amcor PET technology - custom pass-through and pricing Packaging - manufacturing - CSD / water - deliver acquisition excellence - continued earnings synergies, including
Slide 38: Amcor Flexibles Group
Amcor Flexibles Group Amcor Key Drivers Opportunities Priorities Flexibles - market leadership - geographic spread - margins will continue to improve - deliver acquisition synergies - implement market focussed & Amcor - product range - strong global customer - Rexam acquisition performing well organ
Slide 39: Amcor Australasia
Amcor Australasia Key Drivers Opportunities Priorities - product breadth & - gradual recovery from - lowering cost base via Amcor leadership the drought restructuring Australasia - operational - investments: - product innovation excellence - 2nd wine bottle (23% plant of Group Sales ) - Petrie mill
Slide 40: Amcor Asia
Amcor Asia Key Drivers Opportunities Priorities - Global economic - Business positioned - Tight control of costs Amcor Asia activity well for recovery ( 2% - Volume growth - Growth in tobacco / - Manage margins of Group Sales ) flexibles
Slide 41: Amcor Sunclipse
Amcor Sunclipse Key Drivers Opportunities Priorities - Economic activity - Well positioned for - tight control of costs Amcor in the USA economic upturn Sunclipse - Continued expansion - minimise new capex outside California (11% - USD50/tonne increase - manage margins of Group Sales ) in liner boar
Slide 42: Our Global Presence: PET Packaging
OUR GLOBAL PRESENCE PET PACKAGING
Slide 43: Our Global Presence: Flexibles
OUR GLOBAL PRESENCE FLEXIBLES
Slide 44: Our Global Presence: Tobacco & Specialty Cartons
OUR GLOBAL PRESENCE TOBACCO & SPECIALTY CARTONS
Slide 45: Our Global Presence: Corrugated Distribution
OUR GLOBAL PRESENCE CORRUGATED DISTRIBUTION
Slide 46: Amcor's Operations in Europe Map
AMCOR’S OPERATIONS IN EUROPE MAP
Slide 47: Amcor's Operations in Australia Map
AMCOR’S OPERATIONS IN AUSTRALIA MAP
Slide 48: Research & Technology Centres
RESEARCH & TECHNOLOGY CENTRES
Slide 49: www.amcor.com
AMCOR www.amcor.com