Amcor Plc · NYSE:AMCR
Amcor — Citigroup Australia & New Zealand Investment Conference 2004
28 slides from Amcor's conference presentation, March 2004
Slide 1: Investor Presentation, Citigroup Australia & New Zealand Investment Conference
Investor Presentation Citigroup Australia & New Zealand Investment Conference March 2004
Slide 2: Investor Presentation
Investor Presentation • Overview of results • Divisional performance • Key financials • Summary • Questions and answers
Slide 3: Key Results for First Half
Key Results for First Half $ mill Dec 02 Dec 03 Sales 5,499 5096 -7.3% PBITDA 663 622 -6.1% PBITA 414 404 -2.4% PBIT 342 340 -0.7% PBT 243 252 +3.8% PAT 176 188 +6.8% EPS (cents) 21.2 21.9 +3.3% EPS (pre goodwill: cents) 29.8 29.3 -1.7% Dividend per share (cents) 15.0 16.0 +6.7%
Slide 4: Amcor PET Packaging
Amcor PET Packaging $m % 160 18 140 16 120 14 12 PBITA 100 10 ROAFI 80 8 60 6 40 4 20 2 0 0 Dec-01 Dec-02 Dec-03 Sales $m 413 1,560 1,541 Local currency PBITA $m 39 136 121 PBITA 10% A.F.I. $m 748 3,017 2,696 PBITA/AFI % 10.4 9.0 9.0 Employees 1,665 5,458 6,186
Slide 5: Year-over-Year Volume Growth 17%
Year-over-Year Volume Growth 17% 02/03 13.1 billion units globally* Custom Containers 15% CSD/Water Containers/ Preforms 85% 03/04 15.3 billion units globally* Custom Containers 16% CSD/Water Containers/ Preforms 84% * First 6 months of Fiscal Year
Slide 6: North America
North America • Volumes up 16% • Canada down 10% Europe/ Asia • US up 23% 30% • Earnings in North North America America down 17% 52% • Canada down Latin America 18% • US earning flat with the West Coast plants down and the balance of the US higher Unit volume
Slide 7: Latin America
Latin America North America • Strong volume growth of 23% 52% • Earnings up 39% • Significant improvements in • Mexico Latin America 18% • Argentina Europe/ Asia • Venezuela 30% • Brazil impacted by over- capacity and credit caution Unit volume
Slide 8: Europe/Asia
Europe/Asia • Strong volume growth at 16% Latin America 18% • Earnings up 40% • Hot summer conditions were a Europe/ key contributor Asia 30% • 16% volume growth in custom North America 52% • Multilayer growth for beer and juice markets expanding Unit volume
Slide 9: PBITA overview
PBITA overview Canada and Latin Non West the US West Europe up America up Coast US up Coast both 40% 39% 13% down substantially Schmalbach-Lubeca acquisition performing well
Slide 10: PET outlook
PET outlook Positives Negatives Expectations Continued earnings improvements Earnings to grow but Short term pricing • Europe less than volume pressure • Latin America growth • US non West Coast + + Earnings turnaround Returns for 2003/04 • Canada to be around 10.5% • US West Coast and to improve at
Slide 11: Amcor Australasia
Amcor Australasia 200 20 $m % 160 16 120 12 PBITA RoAFI 80 8 40 4 0 0 'Dec. 2001 'Dec. 2002 'Dec 2003 Sales $M 1,196 1,244 1,270 PBITA $M 125 141 163 AFI $M 1,799 1,798 1,839 PBITA/AFI % 13.9 15.7 17.7 Employee No.’s 7,851 7,827 7,550
Slide 12: Glass
Glass • Excellent sales and profit result • Plant at full capacity • Strong customer support • Productivity levels continue to exceed expectation • Second furnace on schedule and volumes secured.
Slide 13: Amcor Flexibles
Amcor Flexibles 70 14 $m % 60 12 50 10 PBITA 40 8 ROAFI 30 6 20 4 10 2 0 0 Dec-01 Dec-02 Dec-03 Sales $m 988 1,095 1,067 Local currency PBITA $m 35 57 59 A.F.I. $m 1,036 1,200 1,290 PBITA 11% PBITA/AFI % 6.7 9.5 9.2 Employees 6,375 6,602 7,695
Slide 14: Europe – Key Issues
Europe – Key Issues • Poor economic conditions – Germany and Nordic region – Impact €3 million • Strengthening Euro – Impact €2 million • Strong performance in the UK and Southern region – Earnings and returns well up
Slide 15: Short term outlook
Short term outlook Positives Negatives Expectations Significant earnings Margins will Volumes to remain growth in the continue to soft until economic second half of the improve conditions improve year of around 20% PBITA + + + Strong Euro currency Improving returns of Rexam acquisition to impact exp
Slide 16: Amcor Sunclipse
Amcor Sunclipse 60 18 $m % 16 50 14 40 12 PBITA 10 ROAFI 30 8 20 6 4 10 2 0 0 Dec-01 Dec-02 Dec-03 Sales $m 719 704 582 PBITA $m 51 51 33 Local currency A.F.I. $m 631 600 466 PBITA/AFI % 16.2 16.9 14.1 PBITA 20% Employees 2,481 2,535 2,418
Slide 17: Amcor Rentsch and Amcor Closures
Amcor Rentsch and Amcor Closures 60 18 $m % 16 50 14 40 12 PBITA 10 ROAFI 30 8 20 6 4 10 2 0 0 Dec-01 Dec-02 Dec-03 Sales $m 310 769 516 PBITA $m 23 45 52 Local currency A.F.I. $m 377 1,236 745 PBITA/AFI % 12.4 7.3 13.9 PBITA 22% Employees 2,021 3,706 3,052
Slide 18: Amcor Asia
Amcor Asia 25 18 % $m 16 20 14 12 PBITA 15 10 ROAFI 8 10 6 5 4 2 0 0 Dec-01 Dec-02 Dec-03 Sales $m 158 143 123 PBITA $m 22 21 14 Local currency A.F.I. $m 341 302 233 PBITA/AFI % 12.8 13.6 12.4 PBITA 14% Employees 2,596 2,844 1,638
Slide 19: Sensitivity to Currency
Sensitivity to Currency $A vs $USD $A vs EUR $A vs $SING .5545 to .6878 .5587 to .5916 .9751 to 1.1942 24% 6% 22% Current Amcor full year sensitivity Impact at PAT level • USD 1 cent =$1.5m p.a • EUR 1 cent =$2.5m p.a • SGD 1 cent =<$0.5m p.a 1H Dec 03 Impact on PAT $17 mill 1H Dec 03 Impact of SHF
Slide 20: Currency Impact on Profit
Currency Impact on Profit 1H 02/03 1H 03/04 As reported As reported At 02/03 Rates FC Impact Performance A$M A$M A$M A$M A$M Performance Change Currency Change PBIT 342 340 372 (32) +30 +9% Interest (100) (88) (98) 10 +2 +2% Tax/Minorities (66) (64) (69) 5 -3 -5% PAT 176 188 205 (17) +29 +17% *This
Slide 21: EPS Growth
EPS Growth Compound earnings growth 4.7% Compound earnings growth 8.8% 29.8 29.3 30 24.7 25 22.8 21.2 21.9 20.9 20.3 19.7 EPS Cents 20 18.2 15 10 5 0 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Half Year Half Year Half Year Half Year Half Year EPS Basic pre significant items (PACRS as interest) EPS Basic pre
Slide 22: PBITA to Average Funds Invested
PBITA to Average Funds Invested 16.0 15.0 % 9.1% Pre Tax WACC 13.8 14.0 13.2 12.2 12.0 11.5 11.0 9.9 10.3 10.0 8.0 6.0 4.0 2.0 0.0 97/98* 98/99* 99/00 00/01 01/02 02/03 04/03 *PBIT to Average Funds Employed Returns for the first half of each year
Slide 23: Cash Flow from Operations
Cash Flow from Operations* 500 0.8 0.7 400 0.56 0.55 0.6 $m 0.47 0.5 $ share 300 0.4 0.36 466 471 200 0.3 300 0.2 231 100 0.1 0 0 Dec-00 Dec-01 Dec-02 Dec-03 Half Year Half Year Half Year Half Year CFO = Cash Flow from Operations (= PAT plus Depreciation & Amortisation plus/minus tax payments and mo
Slide 24: Cash Flow Summary for Operating Businesses
Cash Flow Summary for Operating Businesses Inflows ($m) Outflows ($m) $63 Work. Capital Increase $170 Sustaining Capex $62 Net Borrowing Costs PBITDA $33 Tax $622 $95 Dividends DRP & PACRS $30 Other (net) Debt $509 $678 Growth Capex/Acq/Disposals
Slide 25: Capital Structure with OBS Financing
Capital Structure with OBS Financing $ mill Jun 02 Jun 03 Dec 03 Equity & PACRS 4,567 4,636 4508 Net Debt* (257) 0 1/ 02 2,318 2583 4,310 6,954 7091 OBS financings** 413 850 782 Total Capital 4723 7804 7873 Gearing (3%) 41% 43% Interest cover: PBITA 3.9x 4.2x 4.6x Interest cover: PBITDA 6.0x 6.5x 7.
Slide 26: Short-term outlook
Short-term outlook • Solid earnings growth in local currency terms from the three larger businesses – PET – Australasia – Flexibles • For the three smaller operations – Rentsch & Closures earnings will be up – Sunclipse down – Asia flat • Returns for the group overall will be up on last year
Slide 27: Summary: Simple & consistent strategy
Summary Simple & consistent strategy Capital spend of Strong earnings more than $5 Built industry growth from billion over the leading positions existing assets past four years Priority is to deliver improving returns
Slide 28: Investor Presentation, Citigroup Australia & New Zealand Investment Conference
Investor Presentation Citigroup Australia & New Zealand Investment Conference February 2004
Amcor — Citigroup Australia & New Zealand Investment Conference 2004 on 6ix