Slide 1: Amcor 2018 full year results
For personal use only Amcor 2018 full year results 21 August 2018 Ron Delia Managing Director & CEO Michael Casamento CFO
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 For personal use only Forward-Looking Statements contemplated transactions. Such governmental entity may prohibit, delay or transactions; transa
Slide 3: Disclaimer continued
Disclaimer continued Cautionary Statement Regarding Forward- Important Additional Information Will Be Participants in the Solicitation Non-IFRS information For personal use only Looking Statements cont. Filed with the SEC Results shown refer to underlying results Bemis, Amcor, New Amcor and their Yo
Slide 4: Safety
Safety Lost-time frequency rate Recordable-case frequency rate For personal use only 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 2008 to 2012 data inc
Slide 5: Full year results
For personal use only Full year results
Slide 6: Summary
Summary(1) • Encouraging signs heading into the 2019 financial year For personal use only • 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
Slide 7: Full year results
Full year results(1) • PAT and EPS in line with last year in constant For personal use only currency terms USD million Jun 17 Jun 18 % Constant Currency • Outstanding cost performance across the business % • Ongoing net benefit from US tax reform Sales revenue 9,101.0 9,319.1 2.4 (0.6) PBIT 1,088.
Slide 8: Flexibles segment
Flexibles segment • PBIT modestly lower than last year in For personal use only constant currency terms Constant Currency • Excellent cost performance across all businesses USD million(2) Jun 17 Jun 18 % % • Exceptional progress in restructuring with Sales revenue 6,227 6,535 4.9 (0.1) incremental
Slide 9: Flexibles full year outlook for 2018/19
Flexibles full year outlook for 2018/19 In constant currency terms, the Flexibles segment is expected to deliver solid PBIT growth in the 2018/19 For personal use only financial year, compared with PBIT of USD 835.1 million achieved in the 2017/18 year. This takes into account: • modest organic grow
Slide 10: Rigid Plastics segment
Rigid Plastics segment • Beverage For personal use only • Weak customer and market volumes negatively Constant impacted North America beverage and Bericap Currency earnings USD million Jun 17 Jun 18 % % • North America Beverage - organic volumes 5% lower; Sales revenue 2,877 2,788 (3.1) (1.8) unfa
Slide 11: Rigid Plastics full year outlook for 2018/19
Rigid Plastics full year outlook for 2018/19 For personal use only The Rigid Plastics segment is expected to deliver solid underlying PBIT growth in the 2018/19 financial year, compared with USD 312.0 million achieved in the 2017/18 year. This takes into account: • modest organic growth; • net benef
Slide 12: Cash flow
Cash flow USD million • Solid cash flow For personal use only Jun 17 Jun 18 PBITDA 1,447.0 1,441.8 Interest (176.7) (196.9) • Interest increased due to depreciation of USD Tax (160.2) (149.7) against currencies in which borrowings are (372.1) drawn and higher floating rates in the USA Capital expend
Slide 13: Balance sheet and debt profile
Balance sheet and debt profile For personal use only Balance sheet Jun 17 Jun 18 Debt profile Jun 18 Net debt (USD million) 4,050 3,872 Fixed / floating-interest rate ratio 49% fixed Net finance costs (USD million) 187.0 204.8 Bank debt / total debt 21% bank PBITDA interest cover (x) 7.8 7.0 Undrawn
Slide 14: Long-term growth potential....
Long-term growth potential.... For personal use only
Slide 15: Amcor Strategy
Amcor Strategy For personal use only 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
Slide 16: Amcor shareholder value creation model
Amcor shareholder value creation model For personal use only 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% a
Slide 17: Sustainability: Leading by example
Sustainability: Leading by example For personal use only 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
Slide 18: Amcor and Bemis combination: Key messages
Amcor and Bemis combination: Key messages For personal use only 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 fu
Slide 19: Amcor and Bemis combination: Strategic Rationale
Amcor and Bemis combination: Strategic Rationale For personal use only 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 & pr
Slide 20: The global leader in flexible packaging
Flexible The global leader in flexible packaging packaging Comprehensive global flexible packaging footprint For personal use only 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 revenu
Slide 21: Leadership positions and scale in all key regions
Flexible Leadership positions and scale in all key regions packaging For personal use only 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.
Slide 22: Best-in-class capabilities: Amcor brings
Best-in-class capabilities…Greater differentiation…Global platform Amcor brings: 13 Amcor Flexibles segment % EBIT return on sales For personal use only 12 • Track record of growth through acquisition 11 10 • Strong relationships with Global Key Accounts 9 • Long history of profitable emerging marke
Slide 23: Best-in-class capabilities: Bemis brings
Best-in-class capabilities…Greater differentiation…Global platform Bemis North America For personal use only Bemis brings: CY17: $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 foo
Slide 24: Amcor and Bemis combination: financial rationale
Amcor and Bemis combination: financial rationale For personal use only Substantial value creation for all shareholders Compelling Stronger Greater liquidity Cash and tax transaction financial profile for investors free metrics going forward 24
Slide 25: Significant cost synergy benefits
Significant cost synergy benefits Substantial cost synergy opportunity of USD 180 million p.a. (4-5% of Bemis sales)1 For personal use only Estimated synergies Estimated synergy realisation (USD m) Estimated USD 180 million cost synergies Potential for 180 additional sources of synergies2 130 40% 10
Slide 26: Summary
Summary For personal use only • Encouraging signs heading into the 2019 financial year • Continued focus on growth levers within our control • Continued strong progress on strategic priorities that will drive earnings growth going forward • Expect constant currency earnings growth and strong cash fl
Slide 27: Amcor 2018 full year results Appendix slides
Amcor 2018 full year results For personal use only Appendix slides
Slide 28: Amcor share register analysis at August 2018
Amcor share register analysis at 7 August 2018 For personal use only Geographic dispersion 1% 7% 16% 14% Offshore Australian shareholders shareholders 33% 29% Retail Institution - Australia Institution - North America Institution - Europe Institution - Asia Institution - Rest of world Source: Amcor
Slide 29: FY 2017/18 PBIT growth
FY 2017/18 PBIT growth(1) For personal use only Sources of PBIT Segment PBIT Market PBIT - organic(2) 0% -2% -3% -3% -3% -3% Acquisitions Organic Reported Developed Emerging Markets Markets -7% Flexibles Rigid Plastics (1) Growth rates expressed in constant currency terms. (2) Excludes AMVIG and Cor
Slide 30: Restructuring costs incurred during FY 2017/18
Restructuring costs incurred during FY 2017/18 For personal use only USD million P&L costs Cash costs Restructuring and integration costs 35.9 35.0 Impairment costs 4.4 - Flexibles segment restructuring - 60.8 Total 40.3 95.8 30
Slide 31: FX translation impact
FX translation impact For personal use only PAT currency exposures(1) EUR:USD Euro strengthened vs USD million impact Euro weakened vs USD. USD. Average USD to on PAT for FY18 Jul 18 average USD to EUR, EUR rate FY18 0.8383 EUR rate 0.8559 vs FY18 30-40% vs FY17 0.9180 average rate of 0.8383 USD(2),
Slide 32: Finance and cash expectations – FY 2018/19
Finance and cash expectations – FY 2018/19 For personal use only Net financing costs USD 200 million - USD 210 million(1) • Cash costs in line with P&L charge Effective tax rate between 17.0% and 18.0% • Cash tax 85-95% of P&L charge Corporate costs USD 85 million - USD 95 million(2) Free cash flow
Slide 33: Cash flow
Cash flow USD million Jun 17 Jun 18 For personal use only PBITDA 1,447.0 1,441.8 Interest (176.7) (196.9) Tax (160.2) (149.7) Capital expenditure (379.2) (372.1) Movements in working capital 159.0 17.6 Flexibles segment restructuring (98.1) (60.8) Other (57.4) 41.0 Operating cash flow 734.4 720.9 Di
Slide 34: Working capital performance
Working capital performance For personal use only Amcor average working capital to sales(1) (%) 10.6% 9.6% 9.5% 8.9% 9.6% 8.7% 8.6% 8.3% Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Solid working capital performance (1) Working capital to sales from December 2013 onwards exclude the demer
Slide 35: Debt profile
Debt profile Drawn at 30 USD million Facility For personal use only Jun 2018(1) Debt currency profile Overdrafts/leases/other - 148 Commercial paper(2) - 760 Other 6% CY2018 299 299 EUR CY2019 1,385 634 AUD 25% CY2020 681 116 19% CY2021 1,121 927 CY2022 867 150 CY2023 368 368 CY2024 - - CY2025 - - C
Slide 36: Focused portfolio and balanced global footprint
Focused portfolio and balanced global footprint For personal use only FY 2017/18 sales FY 2017/18 sales Australia, NZ Rigid Emerging 5% Plastics Markets 30% 30% Western Europe 32% Flexibles 70% North America 33% Focused portfolio Balanced global footprint 36
Slide 37: Focused portfolio by substrate and end market
Focused portfolio by substrate and end market FY 2017/18 sales by substrate FY 2017/18 sales by end market For personal use only Aluminium Home & Personal Other 14% care 6% 4% Food Fibre 37% Healthcare 13% 14% Tobacco Packaging 14% Plastics 73% Beverage 25% Common substrates Defensive end markets 37
Slide 38: Historic performance – underlying half yearly PBIT
Historic performance – underlying half yearly PBIT For personal use only USD million Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 Flexibles(1) USD 388 435 397 388 354 402 373 432 397 438 Rigid Plastics USD 128 170 139 182 154 199 144(2) 199(2) 144 168 Investments/Other USD (
Slide 39: Flexibles – historic performance half yearly sales
Flexibles – historic performance half yearly sales(1) For personal use only USD million Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 Europe, Middle 2,000 2,158 1,696 1,590 1,530 1,562 1,469 1,539 1,580 1,741 East and Africa(2) Americas(2) 252 262 223 293 401 435 414 436 Spec
Slide 40: Flexibles raw material cost inflation
Flexibles raw material cost inflation For personal use only Resin (ex PET) Aluminium Liquids All Asia Europe Americas regions 1H December 17 vs +9% +8% +5% +13% +10% Up to 36% 2017/18 June 17 March Cumulative since +14% +17% +11% +15% +10% Up to 67% 18 YTD June 17 to March 18 FY Cumulative since +15
Slide 41: Rigid Plastics – historic performance half yearly sales
Rigid Plastics – historic performance half yearly sales For personal use only USD million Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 North America 963 1,150 965 1,113 988 1,071 1,033 1,163 984 1,116 Latin America 465 467 520 557 497 643 269(1) 248(1) 279 254 Bericap 64 86
Slide 42: Rigid Plastics - NAB beverage volumes, mix & seasonality
Rigid Plastics - NAB(1) beverage volumes, mix & seasonality For personal use only Lower volumes, adverse mix vs prior year Less ability to flex costs in H2 vs H1 FY18 Volume Growth vs FY17 FY18 Volume Seasonality (H1=100) H1 H2 H1 H2 Full Year Total NAB volume (7)% (3)% (5)% Total NAB Volume 100 116
Slide 43: Rigid Plastics – product mix
Rigid Plastics – product mix For personal use only North America sales revenue(1) Total sales revenue(1) Latin America sales revenue(1) USD 2,255 million USD 2,788 million USD 533 million 7% 5% 16% 29% 28% 37% 30% 13% 71% 34% 30% ▪ CSDW ▪ Custom (1) Sales revenue for the full year ended 30 June 2018
Slide 44: Rigid Plastics – North America
Rigid Plastics – North America Custom Containers Specialty Containers For personal use only 9,000 800 8,000 700 7,000 Sales revenue (USD million) 600 6,000 500 Million units 5,000 8,414 400 7,654 679 4,000 642 300 3,000 200 2,000 100 1,000 0 0 FY2017 Acquisition Volume/ Price/ FY2018 FY2017 Decline
Slide 45: Track record of growth by acquisition
Track record of growth by acquisition 700 For personal use only 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 acquisitions 3
Slide 46: Flexibles segment – Euro results
Flexibles segment – Euro results For personal use only EUR million Jun 17 Jun 18 % Sales revenue 5,716 5,478 (4.2) PBIT(1) 738.8 700.0 (5.3) PBIT margin % 12.9 12.8 Average funds employed 3,029 2,913 Return on funds employed % 24.4 24.1 Operating cash flow 792.4 714.9 Sales Dec 13 Jun 14 Dec 14 Jun
Slide 47: Results
Results Statutory result Adjustments(1) Underlying result For personal use only 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
Slide 48: Details of adjustments
Details of adjustments USD million For personal use only Flexibles Investments / EUR million Flexibles Rigid Plastics Other Consolidated Income statement 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 Flexibles segment restructuring (124.4) - (135.5) - - - - - (135.5) - Total PBIT adjustments (12
Slide 49: Non-IFRS information
Non-IFRS information The following notes provide further details of certain non-IFRS financial measures used throughout this presentation: For personal use only Operating cash flow is cash flow from operating activities calculated in accordance with IFRS and extracted from Amcor’s financial statemen