Slide 1: Amcor Half Year Results
Amcor Half Year Results Investor Presentation Ron Delia – Managing Director & CEO Michael Casamento – CFO
Slide 2: Disclaimer
Disclaimer Forward looking statements readers are cautioned not to place conditions of the major markets in extracted from Amcor’s annual financial This presentation contains forward- undue reliance on such forward looking which Amcor operates. report and have not been subject to looking statements
Slide 3: Safety
Safety Lost time frequency rate Recordable case frequency rate 2 1.9 9 8.4 1.8 8 7.4 1.6 1.6 7 1.4 1.2 6 1.2 5.1 5 1 0.9 4.1 4.0 0.8 0.8 4 0.8 0.7 3.4 0.7 0.6 3 2.6 0.6 0.5 2.0 2.0 2.0 0.4 2 0.2 1 0 0 2001 to 2012 data includes the demerged Orora business. 2013 to 2015 are shown exclusive of Orora.
Slide 4: Overview
Overview Strong result with constant currency EPS up 10.2% Strong RoAFE of 20.2% Solid cash flow enabling: • Dividend of 19.0 US cents • Completion of US$500 million on-market share buy-back • 6 acquisitions either announced or completed since 30 June 2015 • US, China, India, Brazil & South Africa S
Slide 5: Half year results
Half year results Constant Strong constant currency earnings growth US$ million Dec 14 Dec 15 % currency • PAT up 6.6% % • EPS up 10.2% Sales revenue 4,809.0 4,547.7 (5.4) 3.3 • Negative currency impact of US$37m on PAT PBIT 518.8 489.0 (5.7) 4.3 Improved shareholder returns PBIT / Sales margin (%
Slide 6: Strong constant currency PBIT growth
Strong constant currency PBIT growth 3% 7% 2% Acquisition benefits 4% Organic growth by market: 5% • Developed markets 4% • Emerging markets 6% PBIT Growth Adjustments(1) Adjusted PBIT growth Stronger than expected organic growth in Rigid Plastics and Tobacco Packaging (1) Adjustments include non re
Slide 7: Flexibles
Flexibles Constant Reported currency • Adjusted PBIT up 6.1%(1) in constant currency terms Euro million Dec 14 Dec 15 % % • Negative impact of CHF:EUR strength Sales revenue 2,521 2,706 7.3 4.5 Tobacco Packaging PBIT 308.1 321.0 4.2 3.0 • Particularly strong performance Adjusted PBIT(2) 298.9 321.
Slide 8: Flexibles full year outlook for 2015/16
Flexibles full year outlook for 2015/16 The full year earnings outlook for the flexibles business has marginally improved compared with the guidance given in August 2015. The business is expected to deliver modest constant currency earnings growth in the 2015/16 year, compared with PBIT of €652.1 mi
Slide 9: Rigid Plastics
Rigid Plastics • Strong earnings performance USD million Dec 14 Dec 15 % • PBIT up 10% Sales revenue 1,563 1,562 (0.1) • RoAFE above 20% PBIT 139.1 153.5 10.4 AFE 1,599 1,513 (5.4) PBIT/AFE % 17.4 20.3 2.9 • Strong volume performance across Operating cash flow (21.0) (45.8) (118.1) the business, pa
Slide 10: Rigid Plastics full year outlook for 2015/16
Rigid Plastics full year outlook for 2015/16 Strong growth in earnings notwithstanding challenging economic conditions in Brazil, Argentina and Venezuela. 10
Slide 11: Cash flow
Cash flow US$ million Dec 14 Dec 15 Comments PBITDA 701.9 664.3 Up 4.2% on a constant currency basis Interest (72.8) (56.8) Lower due to FX and lower average cost of debt Tax (69.8) (91.4) Refunds received in prior period Capital expenditure (156.3) (162.2) In line with D&A including restructuring c
Slide 12: Balance sheet and debt profile
Balance sheet and debt profile Jun 15/ Debt profile Dec 15 Balance sheet Dec 14 (1) Dec 15 Fixed / floating interest rate ratio 37% fixed Net debt (US$ million) 2,880 3,524 Bank debt / total debt 20% bank Net finance costs (US$ million) 91.8 78.2 Undrawn committed facilities US$514 m PBITDA interest
Slide 13: Amcor shareholder value creation model
Amcor shareholder value creation model Dividend Growth in line with (~$500m) EPS ~ 4% Total shareholder Strong, Reinvestment Organic EPS growth value of 10-15% defensive cash (~$400m) of ~ 3-4% per annum with flow low volatility Acquisitions EPS growth of ~ 2-7% and/or buy-backs (~$200-300m) 13
Slide 14: Total value creation of 14.0% for the half year
Total value creation of 14.0% for the half year Dividend yield of 4% Constant currency PAT Value creation growth 7% of 14.0% Reduction in average number of shares on issue 3% Multiple sources of value under resilient shareholder value creation model 14
Slide 15: Where to from here....
Where to from here....
Slide 16: Amcor is well positioned
Amcor is well positioned Amcor Today – Position of strength Operating environment – Increasingly dynamic • Focused portfolio – leadership • Lower growth relative to longer positions, good industry structure, term trends significant emerging market • Shorter cycle / more rapid change exposure • Fast,
Slide 17: Opportunities for Amcor
Opportunities for Amcor Areas of focus Capturing value Generating our own growth • market share gains (customer focus, innovation, M&A) • investing in new plants • Philippines, Indonesia and USA • 6 acquisitions announced since 30 June 2015 • 1 in each Business Group Increasing agility and adapting
Slide 18: Summary
Summary Strong result with constant currency EPS up 10.2% Strong RoAFE of 20.2% Solid cash flow enabling: • Dividend of 19.0 US cents • Completion of US$500 million on-market share buy-back • 6 acquisitions announced or completed since 30 June 2015 Solid foundation to build on for future growth Stro
Slide 19: Half Year Results Appendix slides
Half Year Results Appendix slides
Slide 20: Shareholder value creation of 14.0%
Shareholder value creation of 14.0% Contribution to constant Contribution to Shareholder Value 14.0% currency PBIT growth 3.9% 14.0% Acquisitions 2% 12.0% Organic growth 5% Emerging markets 6% Developed markets 4% 3.2% 10.1% 10.0% 8.0% 3% 7% 1.4% 6.0% 2% 5.5% 4% 4.0% 5% 2.0% 0.0% PBIT growth Adjustm
Slide 21: Half year results
Half year results • Strong constant currency earnings growth Constant US$ million Dec 14 Dec 15 % currency • Key drivers % Sales revenue 4,809.0 4,547.7 (5.4) 3.3 • Benefits from acquisitions • Underlying organic growth of 5% PBIT 518.8 489.0 (5.7) 4.3 PBIT / Sales margin (%) 10.8 10.8 0.0 • Impro
Slide 22: Results
Results US$ million Dec 14 Dec 15 Average exchange rates Dec 14 Dec 15 Sales revenue 4,809.0 4,547.7 USD:Euro 0.7767 0.9063 PBITDA 701.9 664.3 Depreciation and amortisation (183.1) (175.3) PBIT 518.8 489.0 Net finance costs (91.8) (78.2) Currency impact Profit before tax 427.0 410.8 • Negative PBIT
Slide 23: FX Translation impact
FX Translation impact PAT currency exposures(1) Euro:USD Euro, Increase in USD to US$ million impact Increase in Jan 16 25-30% Euro rate on PAT for H1 16 average USD to H1 16 vs H1 15 Euro rate against H1 16 average USD, 16% 14.0 1% 35-40% Other currencies(2):USD Weighted average US$ million impact
Slide 24: Cash flow
Cash flow US$ million Dec 14 Dec 15 PBITDA 701.9 664.3 Interest (72.8) (56.8) Tax (69.8) (91.4) Capital expenditure (156.3) (162.2) Movements in working capital (325.0) (264.0) Other 25.0 12.0 Operating cash flow 103.0 101.9 Dividends (253.2) (257.4) Free cash flow (150.2) (155.5) Acquisitions & gro
Slide 25: Finance and cash expectations – FY16
Finance and cash expectations – FY16 Net financing costs between US$165 and US$175 million • Cash costs in line with P&L charge Effective tax rate between 21% and 23% • Cash tax 85-95% of P&L charge Corporate costs US$70 – US$75 million taking into account current exchange rates Cash reinvested into
Slide 26: Working capital performance
Working capital performance Amcor average working capital to sales (1) (%) 9.8% 10.0% 9.5% 9.0% 9.2% 8.2% Dec 10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Working capital to sales ratio continues to improve (1) Working capital to sales for December 2013, 2014 and 2015 exclude the demerged Orora business. P
Slide 27: Debt profile
Debt profile Drawn at 31 US$ million Facility Dec 2015(1) Debt currency profile Overdrafts/Leases 130 Commercial paper(2) 958 Other CY2016 350 342 13% Euro 26% CY2017 100 100 CY2018 1,298 1,043 CY2019 1,348 598 AUD CY2020 674 215 19% CY2021 277 277 CY2022 - - CY2023 349 349 (1) Gross debt excluding
Slide 28: Focused portfolio and balanced global footprint
Focused portfolio and balanced global footprint FY15 Sales FY15 Sales Australia, NZ 5% Emerging Rigid Markets Plastics 32%(1) 35% Western Europe 32% Flexibles 65% Nth America 31% 1. Includes Amcor share of AMVIG sales Focused portfolio Global footprint 28
Slide 29: Focused portfolio – by substrate and end market
Focused portfolio – by substrate and end market FY15 sales by substrate FY15 sales by end market Aluminium Home & Personal Other 14% care 2% 3% Healthcare Food 14% 32% Fibre 14% Tobacco Packaging 14% Plastics 72% Beverage 34% Common substrates Defensive end markets 29
Slide 30: Historic performance – Half yearly sales revenue
Historic performance – Half yearly sales revenue Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec (million) 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 Flexibles € 935 869 869 1,940 2,248 2,329 2,272 2,411 2,534 2,553 2,467 2,529 2,521 2,711 2,706 Rigid Plastics US$ 1,272 1,203 1,064 1,1
Slide 31: Historic performance – Half yearly PBIT
Historic performance – Half yearly PBIT Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec (million) 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 Flexibles € 69 80 81 171 198 252 246 281 280 308 289 317 308 344 321 Rigid US$ 82 103 82 104 101 139 117 156 128 159 128 170 139 182 154 Plastics
Slide 32: Historic performance – Average funds employed
Historic performance – Average funds employed (million) Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 Flexibles € 1,033 1,009 981 1,463 2,195 2,209 2,195 2,199 2,447 2,457 2,515 2,498 2,529 2,560 2,611 Rigid US$ 1,655 1,601 1,453 1,460 1,786
Slide 33: Flexibles – Historic performance half yearly sales
Flexibles – Historic performance half yearly sales Sales Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec € million 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 Europe, Middle East 654 620 589 1,360 1,552 1,604 1,492 1,558 1,503 1,563 1,475 1,556 1,231 1,341 1,315 and Africa(1) Americas(1
Slide 34: Flexibles – raw material input costs
Flexibles – raw material input costs 220 200 180 160 140 120 100 80 60 Resins Aluminium Rolling quarterly weighted average index for Western European Polyethylene & Polyethylene resins and film and PET film expressed in Euro’s Rolling quarterly average index for LME aluminium prices expressed in Eur
Slide 35: Rigid Plastics – Historic performance half yearly sales
Rigid Plastics – Historic performance half yearly sales Sales Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec US$ 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 million North America 845 834 647 815 982 1,203 1,104 1,245 998 1,172 963 1,150 965 1,113 988 Latin America 385 322 373 322 380 4
Slide 36: Rigid Plastics – product mix
Rigid Plastics – product mix North America Sales revenue (1) Total Sales revenue (1) Latin America Sales revenue (1) USD 988 million USD 1,562 million USD 497 million 21% 16% 24% 37% 47% 19% 65% 34% 39% CSDW Custom Diversified Products (1) Sales for the half year ended 31 December 2015. 36
Slide 37: Rigid Plastics – North America
Rigid Plastics – North America Custom Containers Diversified Products 4,000 250 13 3,500 219 (7) 4 3,000 200 Sales revenue (US$ millions) 2,500 Million units 150 2,000 235 3,337 225 3,118 1,500 100 1,000 50 500 0 0 H1 2015 Growth H1 2016 H1 2015 Raw material Acquistion Improved H1 2016 pass through
Slide 38: Investments / other
Investments / other PBIT (US$ million) Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Dec 15 AMVIG 33.7 34.0 26.2 19.8 21.3 11.5 Glass Tubing 18.2 - - - - Corporate costs(1) (71.5) (73.7) (63.7) (59.7) (61.9) (30.2) Total (19.6) (39.7) (37.5) (39.8) (40.6) (18.7) Corporate costs for FY16 expected to be US$70-US
Slide 39: Historical acquisitions
Historical acquisitions Business group Country Completion Currency Acquisition price EBITDA Acquired sales Synergy: date (Local currency Multiple (Local currency Acquired millions) millions) sales Alcan Packaging Flexibles Global H2 2010 USD 1,948 5.1 4,100 5% Alcan Medical Flexibles Flexibles Europ
Slide 40: Non-IFRS information
Non-IFRS information The following notes provide further details of certain non-IFRS financial measures used throughout this presentation: Operating cash flow is cash flow from operating activities calculated in accordance with IFRS and extracted from Amcor’s financial statements, adjusted to take i