Slide 1: itt anal?
7 i c itt anal?
Slide 2: Amcor
AMCOR
Slide 3: Forward-looking statements 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 identified by
Slide 4: Agenda
* Overview of results * The way forward ° Australasia * Non Australasian businesses « Finance « Summary °° Q&A © Amcor Ltd 2005 - Ken MacKenzie - Ken MacKenzie - Lou Lachal - Ken MacKenzie - Peter Day - Ken MacKenzie - All (6 34
Slide 5: Group result headline metrics
PBIT ($m) PAT ($m) EPS (c) PBIT/AFE (%) Dividend (c) © Amcor Ltd 2005
Slide 6: Execution priorities announced in August 2005
* Execution priorities announced in August 2005 * Specific action plans developed * Progress announced today « Substantial upside potential over the next few years a, > © Amcor Ltd 2005 q ©
Slide 7: Strong market positions framework
Strong i Jere positions *Segment | / + As announced in attractiveness | August 2005 _sCompetitive __ Needs « Review ongoing Position —_improvem —Potential sale proceeds between $0.5 to $1.0 billion —Further possible restructuring $100 to $150 million a“. > © Amcor Ltd 2005 q © .
Slide 8: The Way Forward - Strong Market Positions - Sell
i GAR nee OO ae, v bt he 9 oy, yy ps 4, ne gate FG pm, ge BG » om & The Way Forward — Strong Market Positions - Sell Asset sales approximately A$400 million +Segment _ attractiveness: » Proceeds from sale of White Cap Closures €230million « Proceeds from sale of non-core Asian businesses $21 millio
Slide 9: The Way Forward - Strong Market Positions - Close
g The Way Forward - Strong Market Positions - Cl « European Flexibles operations: Propose to close two plants Both in the processed food segment Cash costs of €32 million Improved earnings €10 million by the end of the second year ~ Non cash write offs an additional €18 million « Review proceeding ~
Slide 10: Improving underperforming businesses
ron sees ee * Opportunities to substantially improve underperforming businesses: -- Corrugated in Australia ~ PET in Mexico - European Flexibles Needs a improvement © Amcor Ltd 2005
Slide 11: Market Positions - Grow
Market Positions - Grow « Identified growth markets ~ Flexibles and Tobacco packaging in emerging markets Custom PET Select market segments in Australasia * » Announcements ~ Flexibles expansion in Eastern Europe with additional presses in both Russia and Poland ~ Tobacco packaging expansion in Pola
Slide 12: Market Positions - Grow
Market Positions - Grow « Identified growth markets ~ Flexibles and Tobacco packaging in emerging markets Custom PET Select market segments in Australasia * » Announcements ~ Flexibles expansion in Eastern Europe with additional presses in both Russia and Poland ~ Tobacco packaging expansion in Pola
Slide 13: Summary
Summary » Substantial progress over the past six months » Review ongoing and on schedule Needs improvement © Amcor Ltd 2005 AMCOR
Slide 14: Leading sales and market capability
% Leading sales and market capability Extensive program developed % ® Change the culture Better execution of customer and _ market facing activities will A VE er Value | © Amcor Ltd 2005
Slide 15: Lower costs - European Restructure
y Lower costs ~ European Restructure —_ pan @& <4 oe soy, (<) = < Se i Amcor Flexibles and Amcor Rentsch restructure Previous Structure Y Tobacoo European Flexibles and eel Food pears ee Gomes Tobacco Packaging sity 2 ———_ restructure * Streamlined European PET New Structure head office Combined sav
Slide 16: Lower costs - European Restructure
y Lower costs ~ European Restructure —_ pan @& <4 oe soy, (<) = < Se i Amcor Flexibles and Amcor Rentsch restructure Previous Structure Y Tobacoo European Flexibles and eel Food pears ee Gomes Tobacco Packaging sity 2 ———_ restructure * Streamlined European PET New Structure head office Combined sav
Slide 17: Compressible head office costs allocated to business units
« Compressible head office costs allocated to the business units - Greater focus as costs in business units budget and incentive programs - Better focus on “true” Amcor corporate costs offset fon recovered cost increases and | “ Ys deliver shareholder value ~~ : ~ Creates a “user pay” mindset ~ Bett
Slide 18: Ongoing opportunities
« Ongoing opportunities ~ Structure will continue to follow strategy if - Overhead reviews in other business units and offset non recovered cost increases and _ head office where and when appropriate deliver shareholder value | ~ Cross business benefits will evolve via ' leverage in a range of areas
Slide 19: Capital expenditure: base and growth capital
i « Base Capital ~ To cover: ~ Floor spend ~ Cost reduction capital projects ~ Incremental growth -- Approximately depreciation « Growth Capital -- Growth opportunities in target market segments - predominately organic ~ Redeployment of asset sale proceeds © Amcor Ltd 2005
Slide 20: Improve: cultural change
Improve CULTURAL CHANGE Progress in all areas « The program is ongoing pm © Amcor Ltd 2005 q 6
Slide 21: The way forward - Summary
The way forward - Summary improve | shareholder | CULTURAL CHANGE * Progress in all areas * Next stage is obtaining the benefits * The program is ongoing © Amcor Ltd 2005
Slide 22: Australasia
(am e A Sond R AUSTRALASIA
Slide 23: Australasia results
Dec 04 Sales $M 1,315 PBIT $M 175.2 A.F.E. $M 1,743 PBITIAFE % 20.1 Employee's 6,562 Dec 05 1,321 153.8 1,864 16.5 6,525 © Amcor Ltd 2005 2 Earnings $153.8 million Returns on Average Funds Invested continue to be good at 16.5% Difficult half on half comparison given stronger economic conditions in 0
Slide 24: Fibre packaging performance
« Performance disappointing in Australia * Gross margins maintained « Volumes 4% lower — Key fruit and produce sectors lower ~ Market conditions impacting grocery and industrial sectors — Loss of market share at small customer end « In New Zealand loss of major customer will impact in the second a «
Slide 25: Fibre - Cartons / Board
oo be 9 sug ope 0, 9% 2 f Ss, ay gry Fibre ~ Cartons / Board « Converting volumes lower due to weaker overall demand * Cartonboard mill profits lower — Domestic board prices reduced due to import competition ~ Lower export prices ~ Lower domestic volume « Improvements in board quality to meet higher
Slide 26: Solid first half despite slower economic conditions
© Ame * Solid first half although generally slower economic conditions » Successful management of input costs in most segments * Major restructuring in NSW completed — Closure of plant at Enfield, and relocating equipment to Regents Park » The multiwall sack business continues to benefit from produc
Slide 27: Beverage cans, food cans and glass
* Beverage cans — Volumes up 3% — Soft drink and RTD — Continued sound operating performance * Food cans — Market conditions resulting in lower volumes — Earnings improved due to ongoing operational improvements » Glass — Another sound half — Wine bottle market continues to exhibit good growth — Con
Slide 28: Australasia outlook
» The overall operating environment of the past six months will continue for the balance of the fiscal year » Generally softer volumes in most divisions — Economic conditions — Customers relocating offshore — Increasing packaged goods imports ° Benefits from management changes and restructuring in F
Slide 29: Amcor PET Packaging
OR PET PACKAGING
Slide 30: Amcor PET Packaging results
Amcor PET Packaging * Overall volume growth 8.8% °° Custom volume growth 32% « Returns improved from 9.1% to 10.1% Regional Volumes Latin America, 24% Europe, 26% Dec 04 Dec 05 Sales US$m 1,253 1,520 PBIT US$m 80.8 97.7 A.F.E. US$m 1,785 1,931 a PBIT/AFE % 9.1 10.1 cael Employees 6,122 6,118 Total c
Slide 31: Strong first half - volumes up 15.5%
© Amco & & & & & Strong first half —~ Volumes up 15.5% ~ Hot summer a major positive Custom volume growth up 35% Improved industry capacity utilisation Obtaining benefits from the restructuring programs of the past two years Capital investment focus is in custom products “> F Ltd 2005 « 6 .
Slide 32: Strong first half - volumes up 15.5%
© Amco & & & & & Strong first half —~ Volumes up 15.5% ~ Hot summer a major positive Custom volume growth up 35% Improved industry capacity utilisation Obtaining benefits from the restructuring programs of the past two years Capital investment focus is in custom products “> F Ltd 2005 « 6 .
Slide 33: Strong volume growth of 9%
© Amco ° Strong volume growth of 9% « Custom products up 47% off a low base * Continued poor results in Mexico ~ Substantial injection of senior North American operational management to address the issues -- Ongoing restructuring costs will be incurred over the next 12 months ~ Earnings to improve i
Slide 34: Volumes slightly higher on continuing basis
© Ame * Volumes slightly higher on a continuing business basis ¢ Custom volume higher ~ Benefits from diversification into a broader range of products in the UK * Continued poor performance from Poland (6 34 or Ltd 2005
Slide 35: PET outlook: disciplined use of capital
* Disciplined use of capital ~ Growth in custom PET segment * Recovery of energy cost increases ~ Substantial challenge in the short term ° Improving performance in Mexico “> © Amcor Ltd 2005 « e .
Slide 36: Flexibles
FLEXIBLES
Slide 37: Flexibles results
80 € 60 PBIT Roare 4° 20 (i) Dec 04 Sales €m 989 PBIT €m 63.2 AFE €m 1,150 PBIT/AFE% 11.0 Employees 9,997 Dec 05 1,021 59.3 1,168 10.2 9,854 14 % : » Flexible sales up 3% . » Tobacco Packaging $ sales up 6% 2 » Returns 10.2% © Amcor Ltd 2005
Slide 38: Raw material and market price trends
ice Trends ial Market Pr Raw Mater 20 S}UBSAOCI] JOHIEI JO XOPU] COR © Amcor Ltd 2005
Slide 39: Raw material and market price trends
ice Trends ial Market Pr Raw Mater 20 S}UBSAOCI] JOHIEI JO XOPU] COR © Amcor Ltd 2005
Slide 40: Flexibles performance by segment
« Processed Food ~ Good improvement ¢ Fresh Food ~ Solid performance offset by costs related to overtrading in one market segment ° Healthcare ~ Good performance ~ One plant loss making and new management addressing the issues e Americas ~ Very strong half ~ Strong performance in recovering cost inc
Slide 41: Solid half with sales up 6%
& Solid half with sales up 6% Demand continues to exceed production The new machine installed in France commenced production in September & & — The full benefits from this investment will be realised in the 06/07 year Outlook for the business remains positive & “> © Amcor Ltd 2005 « 6 .
Slide 42: Flexibles outlook
* Short term likelinood of further cost increases ~ Both raw material and energy related * Organisation restructure and proposed plant closures * Additional capacity in Russia and Poland will benefit 06/07 and beyond “> © Amcor Ltd 2005 « e .
Slide 43: Sunclipse
SUNCLIPSE
Slide 44: Sunclipse results
Amco uSs$ 35 Sales $m PBIT $m A.F.E. $m PBIT/AFE % Employees Dec 04 457 28.9 247 23.4 2,142 Dec 05 473 23.4 256 18.3 2,148 © Amcor Ltd 2005 Sound half with earnings well up on the second half last year Returns 18.3% Distribution achieved improved margins Pass through of cost increases Bottom slicing
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Slide 46: Asia: sales up 7% and PBIT up 9%
« Sales up 7% and PBIT up 9% SingS « Returns 16.2% om * Solid performance in tobacco ts packaging and flexibles ts * Increased investment in waPBIT 49 Vision Grande ee * Underperforming assets sold 5 * Focus will increasingly be on : growth in China ° ~ Tobacco Packaging Dec 04 Dec 05 — Flexibles Sa
Slide 47: © Amcor Ltd 2005
© Amcor Ltd 2005
Slide 48: Finance agenda
co eS e € € € © Amcor Ltd 2005 Key results and significant items Borrowing costs Cash flow and returns Capital structure and capital management AIFRS impacts Summary (6 34
Slide 49: Group profit and loss summary
$mill Dec 04 Dec05 % Change (Sales 5,493.4 5,750.1 4.7 %) PBITDA 647.9 637.3 (1.7)% PBIT 418.2 401.2 (4.1)% Borrowing costs (incl PACRS) (107.2) (124.0) (15.7)% PBT 311.0 277.2 (10.9)% Tax and Minorities (72.4) (62.8) 13.3% (PAT 238.6 214.4 (10.1)%) (EPS cents 27.2 24.4 (10.3)%) DPS cents 17.0 17.0
Slide 50: PAT bridge
© Ame Actual %PAT Impact PAT - 1H Dec 04 238.6 Borrowing costs (15.3) (6.4)% Tax and minorities 1.4 0.6% FX impact (5.8) (2.4)% Operating performance (4.5) (1.9)% PAT - 1H Dec 05 214.4 (10.1)% *(Before Significant Items) ‘or Ltd 2005 AMCOR
Slide 51: Borrowing costs
$mill Dec 04 “Dec 05 %Change Baselnecais 14°C Higher rates/borrowings 7.0 Credit rating impact 2.0 AIFRS pension and other 2.0 80.8 92.4 PACRS interest 26.4 26.4 PACRS conversion discount 5.2 107.2 124.0 15.7% “> © Amcor Ltd 2005 « 6 .
Slide 52: Weighted average cost of debt
f Weighted Average Cost at Period End Dec04 Dec05 PACRS 8.57% 10.0% PRIDES 7.25% 7.25% Other Debt Facilities -US 4.5% 5.5% -Europe 3.7% 4.8% -Australia 5.0% 6.5% -New Zealand 7.0% 7.3% -Asia 4.8% 4.8% Weighted Average Cost* 4.9% 5.7% Other Borrowing Costs c.13bp c.15bp *Includes positive impact of i
Slide 53: Significant items
© Ame 1H Dec 05 Impairment of Asian corrugated business (22.6) Gain on holding Vision Grande options 16.2 Impairment of Closures business (15.3) Other items 0.7 (21.0) Tax effects 8.5 Net significant items* (42.5) *Before minority interests or Ltd 2005 (6 34
Slide 54: Cash flow from operations
500 —- 466 7 0.8 459 vy oo + 0.7 400 -- + 0.6 0.55 tos “a $m o 300 + A Te 7+ 0.4 ie) LN ~s oO + 0.3 200 + + 0.2 i + 0.1 100 = : “= : ty) 1H Dec 02 1H Dec 03 1H Dec 04 1H Dec 05 is CFO = Cash Flow from Operations (= PAT plus Depreciation & Amortisation plus/minus tax payments before movements in prov
Slide 55: Cash Flow 1H Dec
Cash Flow 1H Dec 0 $m © Amcor Ltd 2005 Inflows 5 Outflows Tax Dividends Working Capital Borrowing Costs Capital Expenditure (net) Other & Pension Fund top-up
Slide 56: Cash flow reconciliation
© Ame Reported PAT after SI and before Minorities Depreciation Non cash significant items Other Cash Flow from Operations (earlier slide) Movement in working capital Other payments against provisions Net cash per accounts disclosure or Ltd 2005 $m 205.1 236.1 21.6 (3.6) 459.2. (161.6) (42.7) 254.9 (
Slide 57: ss — ne inn : :
ss — ne inn : : i wed Let & g wae 2 i we 14.0 12.0 4 a 1.7 of 10.0 6.0 4.0 - 0.0 02/03 03/04 04/05 1H Dec-05 *Before significant items *02/03 and 03/04 AGAAP basis; thereafter AIFRS AMCOR © Amcor Ltd 2005
Slide 58: Working Capital Performance
Working Capital Performance Working capital at period end 1500 - r 14 1300 + 13 1100 $m 900 p12 % 700 L 44 500 140 02/03 03/04 04/05 1H Dec 05 02/03 — 03/04 AGAAP, 04/05 & 1HDec 05 — AIFRS © Amoor Ltd 2005 After factoring of receivables AMCOR
Slide 59: Capital structure and gearing
nod June0s (AGAAP) (AIFRS) Dec 05 (AIFRS) Convertible Securities 929 898 Net D Balan ebt 2,357 2,575 ce Sheet Capital 6,956 6,853 tems ood OO Total Capital 7,618 7,383 Gearing on Balance Sheet 47.2% 50.7% on a veg Bele © (36d Intere © Amcor Ltd 2005 “eo . LEE SE | vay BE wa aed pe a SL q+ OBS liems
Slide 60: Flexible Capital Structure
Flexible Capital Structure PACRS1-AUD 400m PACRS2Z ~ AUD2ZTOm Amcor Can Convert Holder Can Convert Holder Can Convert PACRS Rese Dat 2005 =e 2006 => 2007 —=Be PRIDES a CC r—“‘“‘C‘“‘C‘“‘CC“#R A f i 1 1 i i 1 1 i | wren Conpeicen PRIDES USD230m © Amcor Ltd 2005
Slide 61: PACRS1 Timetable
PACRS1 Timetable Repurchase mm = Conversion - offer 7m _i pricing” 24 2 24 29 10 20 28 30 = #1 Feb Mar Mar Mar Apr Apr Apr Apr May ertrrrtttt 4 seeesesessens D> | i Record date for interest Record date for repurchase rannnnnnaenannnnannnannninannnnnnnnannnannninnnennnennth / Repurchase & interest |
Slide 62: AIFRS impact on profit and loss account
Profit and loss account & No goodwill amortisation S Tax loss recoupment & Share based payments, pensions, decommissioning etc. & Overall net $50-60m p.a. positive effect vs. AGAAP “> © Amcor Ltd 2005 « 6 .
Slide 63: Finance summary
» Underlying operating PAT steady » Cash flow remains strong » Absorbed higher working capital requirement * Tax rate maintained * Gearing within target range « Interest cover needs improvement * Commitment to capital expenditure discipline * Financial flexibility of capital structure “> © Amcor Ltd
Slide 64: Summary of the half
* Significantly improved PET result » Mixed result in Australia with fibre volume down but maintaining gross margins » Sound recovery in margins in Sunclipse » Good management of raw material cost increases — Around 95% recovery across the group » Significant increase in interest costs » Recovery of
Slide 65: The Way Forward
The Way Forward » Progress against objectives » $400 million in asset sales * Growth markets identified » Restructuring to lower overhead costs * Plant rationalisation in Western Europe » Program established for customer and market focus » New capital expenditure process implemented © Amcor Ltd 2005
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7 i c itt anal?