Amcor Plc · NYSE:AMCR
Amcor — CLSA Investors Forum 2018
41 slides from Amcor's conference presentation, September 2018
Slide 1: CLSA Investors Forum
CLSA Investors Forum Ron Delia Managing Director & CEO September 2018
Slide 2: Disclaimer
Disclaimer Cautionary Statement Regarding expected timing of the completion of the satisfied or waived, including that a of the parties to the contemplated Forward-Looking Statements contemplated transactions. Such governmental entity may prohibit, delay or transactions; transaction costs; actual or
Slide 3: Disclaimer continued
Disclaimer continued Cautionary Statement Regarding Forward- Important Additional Information Will Be Participants in the Solicitation Non-IFRS information Looking Statements cont. Filed with the SEC Results shown refer to underlying results Bemis, Amcor, New Amcor and their You can obtain copies of
Slide 4: Safety
Safety Lost-time frequency rate Recordable-case frequency rate 1.80 8 1.6 7.4 1.60 Acquisition 7 1.40 impact 1.2 6 1.20 5.1 1.0 5 Acquisition 1.00 0.9 0.9 4.1 impact 0.8 4.0 0.8 4 0.80 0.7 3.4 0.6 0.6 3 2.6 2.6 0.60 0.5 2.4 2.0 2.0 2.0 0.40 2 0.20 1 0.00 0 Committed to our goal of ‘no injuries’ 2008
Slide 5: Key messages
Key messages 1 Amcor: High Performing and Uniquely Positioned 2 FY18 Result and FY19 Outlook 3 Clear Strategy and Significant Growth Potential 4 Bemis transaction: Substantial Value Creation Opportunity 5
Slide 6: Amcor overview
Amcor overview • Founded in Australia in 1860s Focused portfolio of high value • USD 9bn sales, AUD 17bn market cap, ASX listed packaging for consumer staples • Global leader: flexible and rigid plastic consumer packaging • ~195 plants, ~33,000 employees, 40+ countries 4% 6% 13% 14% 37% 4% USD 9bn U
Slide 7: Geographic diversification, global reach and local presence
Geographic diversification, global reach AND local presence Sales by Sales by emerging and Emerging market sales geographic region developed markets by country Asia Pacific 15% Emerging Europe, markets Middle 30% East & Africa 41% Developed Americas markets 44% 70% Europe, Middle East & Africa Ameri
Slide 8: Leadership positions and scale in key segments
Leadership positions and scale in key segments Flexibles Rigid Plastics EMEA 1° North America 1° Flexibles 1° Asia Pacific Rigid Plastics 1° Latin America Flexibles Latin America 1° Specialty Cartons, 1° Global Flexibles Europe, Flexibles Flexibles Asia Rigid Plastics Specialty Cartons USD billion a
Slide 9: Strong financial metrics and consistent margin improvement
Strong financial metrics and consistent margin improvement 12.0% 11.6% 11.1% 11.2% 10.9% Returns on funds employed (%) EBIT Margins 9.1% 8.7% 8.1% 7.7% 7.1% 6.8% 19.0 11.8 Estimated pre-tax WACC 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 9
Slide 10: Strong total returns for shareholders
Strong total returns for shareholders Total return % Amcor shareholder base: geographic dispersion 387% 145% 94% Notes: Citi, IRESS, FactSet. Market data as at 31 July 2018. Global packaging index represents a weighted index comprising: Aptar Group, Ball Corp, Bemis, Berry Plastics, Crown Holdings,
Slide 11: Key messages
Key messages 1 Amcor: High Performing and Uniquely Positioned 2 FY18 Result and FY19 Outlook 3 Clear Strategy and Significant Growth Potential 4 Bemis transaction: Substantial Value Creation Opportunity 11
Slide 12: FY2018 full year result
FY2018 full year result(1) • PAT and EPS in line with last year in constant currency terms USD million Jun 17 Jun 18 % Constant Currency • Flexibles: USD 43m total impact from normal time lag in % recovering higher raw material costs Sales revenue 9,101.0 9,319.1 2.4 (0.6) • Rigid Plastics: weak b
Slide 13: FY2019 outlook
FY2019 outlook(1) • Encouraging signs heading into the 2019 financial year • Modest improvement in volumes in the North America beverage segment • Earnings headwinds have started to slow in some regions from the lag in passing on higher raw material costs • Emerging markets growth of 4% in H2 • Expe
Slide 14: Key messages
Key messages 1 Amcor: High Performing and Uniquely Positioned 2 FY18 Result and FY19 Outlook 3 Clear Strategy and Significant Growth Potential 4 Bemis transaction: Substantial Value Creation Opportunity 14
Slide 15: Amcor strategy
Amcor strategy Our businesses FOCUSED PORTFOLIO: FLEXIBLE RIGID PLASTIC SPECIALTY CLOSURES PACKAGING CONTAINERS CARTONS Our differentiated capabilities THE AMCOR WAY: Our winning aspiration WINNING FOR CUSTOMERS, Significant growth opportunities EMPLOYEES, INVESTORS AND THE THE leading global packag
Slide 16: Amcor shareholder value creation model
Amcor shareholder value creation model Dividend Growth in line with (~ USD 500m) EPS ~ 4% yield Total shareholder Strong, Reinvestment Organic EPS growth value of 10-15% defensive cash (~ USD 400m) of ~ 3-4% per annum with flow low volatility Acquisitions EPS growth of ~ 2-7% and/or buy-backs (~ USD
Slide 17: Sustainability: leading by example
Sustainability: leading by example We are the first packaging company pledging to develop all packaging to be recyclable or reusable by 2025 Develop all our packaging to be recyclable or reusable by 2025 Significantly increase our use of recycled materials in our packaging Work with others to drive
Slide 18: Key messages
Key messages 1 Amcor: High Performing and Uniquely Positioned 2 FY18 Result and FY19 Outlook 3 Clear Strategy and Significant Growth Potential 4 Bemis transaction: Substantial Value Creation Opportunity 18
Slide 19: Amcor and Bemis combination
Amcor and Bemis combination Amcor and Bemis combination to create the global leader in consumer packaging ...Stronger value proposition for customers, employees and the environment …Substantial value creation for all shareholders …Two proud histories, one great future 19
Slide 20: Strategic rationale
Strategic rationale Stronger value proposition for customers, employees and the environment Greater scale to Increased exposure Best-in-class Comprehensive better serve to attractive end operating and global footprint customers in every markets & product innovation region segments capabilities Conti
Slide 21: The global leader in flexible packaging
Flexible The global leader in flexible packaging packaging Comprehensive global flexible packaging footprint Amcor Flexibles1 Bemis2 Combined company USD 5bn USD 4bn ~110 plants ~50 plants USD 9bn ~160 plants North America Latin America Asia Pacific EMEA 1. Based on CY17 revenues, excluding specialt
Slide 22: Leadership positions and scale in all key regions
Flexible Leadership positions and scale in all key regions packaging Flexibles North America Flexibles Europe 0.3 2.8 3.4 3.2 Flexibles Asia 2.9 0.5 0.2 Amcor Bemis Combined company Amcor Bemis Combined company 1.4 1.2 Flexibles Latin America Amcor Bemis Combined company 0.5 0.9 0.4 Amcor Bemis Comb
Slide 23: Best-in-class capabilities…greater differentiation…global platform
Best-in-class capabilities…greater differentiation…global platform Amcor brings: 13 Amcor Flexibles segment % PBIT return on sales 12 • Track record of growth through acquisition 11 10 • Strong relationships with Global Key Accounts 9 • Long history of profitable emerging markets participation 8 7 •
Slide 24: Best-in-class capabilities: Bemis brings
Best-in-class capabilities…greater differentiation…global platform Bemis brings: Bemis North America CY17: USD 2.8 bn sales, 13.4% margin • Material science and technology Amcor • R&D resources and infrastructure, incl. Innovation Centre Meat & cheese Dairy & liquids Specialty food & meals • Strong
Slide 25: Financial rationale
Financial rationale Substantial value creation for all shareholders Stronger Compelling Greater financial Cash and tax transaction liquidity for profile going free metrics investors forward 25
Slide 26: Significant cost synergy benefits
Significant cost synergy benefits Substantial cost synergy opportunity of USD 180 million p.a. (4-5% of Bemis sales)1 Estimated synergies Estimated synergy realisation (USD m) Estimated USD 180 million cost synergies Potential for 180 additional sources of synergies2 130 40% 100% 65 20% 40% Year 1 Y
Slide 27: Summary
Summary 1 Amcor: High Performing and Uniquely Positioned 2 FY18 Result and FY19 Outlook 3 Clear Strategy and Significant Growth Potential 4 Bemis transaction: Substantial Value Creation Opportunity 27
Slide 28: Appendix slides
CLSA Investors Forum Ron Delia Managing Director & CEO Appendix slides
Slide 29: Strong financial metrics and consistent margin improvement
Strong financial metrics and consistent margin improvement Reported free cash flow Spend on flexibles restructuring 29
Slide 30: Customer relationships: winning with big and small brands
Customer relationships: winning with big and small brands Flexibles EMEA Rigid Plastics North America Beverage (FY18 sales) Regional Business Unit >4,000 >40% sales growth ~25 ~10 # of customers €m sales per annum >30m 10m-30m <10m FY14 FY18 USD sales % of Flexibles EMEA sales ~35% ~15% ~50% 30
Slide 31: Packaging spend per capita
Emerging markets: packaging spend growth Low income Inflection point • Young and growing population • Young and growing population • Very low incomes • Rising incomes Canada • Wet markets, unpackaged goods • Urbanisation, modernising retail channels, packaged goods Australia USA Packaging spend per
Slide 32: Track record of growth by acquisition in all businesses
Track record of growth by acquisition in all businesses 700 Rigid Plastics 600 Flexibles Americas Flexibles Europe USD million spend 500 Specialty Cartons Flexibles Asia Pacific 400 300 200 100 0 2012 2013 2014 2015 2016 2017 Total spend (USDm) (1) 273 191 104 58 655 323 Number of 3 4 3 2 8 3 acquis
Slide 33: Amcor reporting segment overview
Amcor reporting segment overview Flexibles Rigids Flexibles Europe, Middle Flexibles Americas North America Beverage Latin America East and Africa North America Specialty Flexibles Asia Pacific Specialty Cartons Bericap NA (JV) Containers 2018 Sales: USD 6.5bn Employees: ~26,000 2018 Sales: USD 2.8b
Slide 34: Amcor Flexibles overview
Amcor Flexibles overview Sales by business Sales by end group market 3% 19% 20% 40% 4% USD 6.5bn 47% USD 6.5bn sales 5% sales 13% 11% 18% 20% Flexibles EMEA Flexibles Asia Pacific Food Healthcare Flexibles Americas Specialty Cartons Beverage Home & Personal care Capsules Foil & Industrial Other Note
Slide 35: Amcor Flexibles historical growth
Amcor Flexibles historical growth PBIT margins and RoAFE near doubled in the last decade 24.1% 18.0% 16.0% 13.1% 12.9% 12.8% PBIT Margin % 14.0% 12.1% 12.5% 12.5% 12.0% 11.2% 11.6% 9.8% 10.0% 9.0% 8.4% 8.0% 6.6% 6.6% 6.0% 4.0% 2.0% 0.0% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 PBI
Slide 36: Amcor Rigid Plastics overview
Amcor Rigid Plastics overview Sales by business North America sales unit by category 5% 7% 19% 29% 30% USD 2.8bn USD 2.3bn 51% sales sales 24% 34% North America beverage CSDW North America specialty containers Custom Latin America Specialty containers BCNA JV BCNA JV Notes: Based on FY18 sales reven
Slide 37: Amcor Rigid Plastics historical growth
Amcor Rigid Plastics historical growth PBIT margins and RoAFE near doubled in the last decade 17.0% 16.0% 14.0% 12.0% PBIT Margin % 9.6% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 PBIT Margin % 37
Slide 38: Amcor and Bemis combination: Strategic rationale
Amcor and Bemis combination: Strategic rationale Stronger value proposition for customers, employees and the environment • Unique, truly global flexible packaging supplier Comprehensive global footprint • Comprehensive flexible packaging footprint across all key regions, including larger, more balan
Slide 39: Amcor and Bemis combination: Financial rationale
Amcor and Bemis combination: Financial rationale Substantial value creation for all shareholders • All-stock acquisition at an implied value in line with Amcor’s current trading EV/PBITDA multiple, pre synergies Compelling transaction metrics • USD 180 million of pre-tax annual cost synergies by the
Slide 40: Amcor 2018 financial results
Amcor 2018 financial results Statutory result Adjustments(1) Underlying result USD million 2017 2018 2017 2018 2017 2018 Sales revenue 9,101.0 9,319.1 - - 9,101.0 9,319.1 PBITDA 1,311.5 1,441.8 (135.5) - 1,447.0 1,441.8 - Depreciation and amortisation (358.8) (356.3) - - (358.8) (356.3) PBIT 952.7 1
Slide 41: 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