Slide 1: Amcor 2017 Half Year Results
For personal use only Amcor 2017 Half Year Results 13 February 2017 Ron Delia Managing Director & CEO Michael Casamento CFO
Slide 2: Disclaimer
For personal use only Disclaimer Forward looking statements readers are cautioned not to place conditions of the major markets in measures to assess the performance of This presentation contains forward- undue reliance on such forward looking which Amcor operates. the business and believes that the
Slide 3: Safety
For personal use only Safety Lost time frequency rate Recordable case frequency rate 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 0.8 4 3.4 0.8 0.7 0.6 0.6 3 2.6 0.6 0.5 2.3 2.0 2.0 2.0 0.4 2 0.2 1 0 0 2008 to 2012 data includes the demerged Orora business. 2013 to 2017 are shown ex
Slide 4: Highlights
For personal use only Highlights (1) Underlying earnings unless otherwise indicated • Full year earnings expectations unchanged • Solid first half financial performance • In constant currency terms PBIT up 3.5% and EPS up 4.6% • PBIT up 9% and EPS up 12% excluding Venezuela • Solid cash flow and str
Slide 5: Half year results
For personal use only Half year results(1) Constant Solid constant currency earnings growth and full US$ million Dec 15 Dec 16 % currency year expectations unchanged % • PAT up 3.8%; EPS up 4.6% Sales revenue 4,547.7 4,467.3 (1.8) (0.6) PBIT 489.0 495.7 1.4 3.5 • Negative currency impact of US$8.4m
Slide 6: Balanced growth across multiple dimensions
For personal use only Balanced growth across multiple dimensions(1) Sources of PBIT growth Segment PBIT - growth rate Market PBIT - organic growth rate(2) 4% 9% (5.5%) 12% 5% 5% 7% 3.5% 1% Acquisitions Organic growth Total growth Venezuela Reported growth Flexibles Rigid Plastics (ex Venezuela) Deve
Slide 7: Flexibles segment
For personal use only Flexibles segment Constant • Solid underlying PBIT growth in constant Reported currency Euro million Dec 15 Dec 16 currency terms % % • Reflects benefits from acquisitions and strong cost Sales revenue 2,706 2,818 4.1 5.3 performance partly offset by customer destocking in Toba
Slide 8: Flexibles segment - investments in future growth
For personal use only Flexibles segment - investments in future growth • Hebei Qite (China) completed in January 2017 • Alusa acquisition Acquisitions • Philippines plant ramping up Greenfield • Agreement reached to build a dedicated greenfield plant in India for a global fast moving plants consumer
Slide 9: Flexibles full year outlook for 2016/17
For personal use only Flexibles full year outlook for 2016/17 No change to guidance provided in August 2016. In constant currency terms, the Flexibles segment is expected to deliver particularly strong PBIT growth in the 2016/17 year, compared with PBIT of €681.2 million achieved in the 2015/16 year
Slide 10: Rigid Plastics segment
For personal use only (1) Rigid Plastics segment • Outstanding performance with 12% growth Reported Venezuela Excl • Reflects growth delivered from acquisitions USD million Dec 15 Dec 16 % impact(2) Venezuela US$ million % and organic sources Sales revenue 1,562 1,377 (11.8) (200) 1.1 • North Americ
Slide 11: Rigid Plastics segment - investments in future growth
For personal use only Rigid Plastics segment - investments in future growth • Sonoco North American rigid plastics specialty container business • US$280 million acquisition cost. Expected to add US$50 million of PBIT by the end of FY2020 Acquisitions • Enhances Amcor’s product offering by adding com
Slide 12: Rigid Plastics full year outlook for 2016/17
For personal use only Rigid Plastics full year outlook for 2016/17 The full year earnings outlook for the Rigid Plastics segment has not changed from the guidance provided in August 2016. Compared with PBIT of US$352.5 million achieved in the 2015/16 year, this outlook takes into account: • the deci
Slide 13: Cash flow
For personal use only Cash flow US$ million Dec 15 Dec 16 • Operating cash flow in line with expectations PBITDA 664.3 677.7 outlined in August Interest (56.9) (77.5) Tax (91.4) (86.1) • Continued strong working capital performance Capital expenditure (162.2) (203.8) Working capital (264.0) (222.9)
Slide 14: Balance sheet and debt profile
For personal use only Balance sheet and debt profile Balance sheet Dec 15 Dec 16 Debt profile Dec 16 Net debt (US$ million) 3,524 4,285 Fixed / floating interest rate ratio 40% fixed Net finance costs (US$ million) 78.2 93.8 Bank debt / total debt 30% bank PBITDA interest cover (x) 8.9 7.9 Undrawn c
Slide 15: Where to from here....
For personal use only Where to from here….
Slide 16: Amcor today
For personal use only Amcor today Strong foundation Current operating priorities • Focused portfolio • Generating our own growth • Differentiated capabilities • Increasing agility and pace of adapting operations • Disciplined cash and capital deployment • Strengthening and engaging our team • Resili
Slide 17: Mid-term PBIT growth
For personal use only Mid-term PBIT growth Flexibles Alusa Sonoco Organic growth restructuring acquisition acquisition and other FY16 PBIT US$40-50M US$65M US$50M acquisitions (FY19) (FY19) (FY20) US$155 – 165 million Investment in restructuring plus Alusa and Sonoco acquisitions underpins >US$150 m
Slide 18: Amcor Strategy
For personal use only Amcor Strategy 1. Focused portfolio SALES & MARKETING INNOVATION 2. Differentiated capabilities PROCUREMENT TALENT M&A 3. Shareholder value Strong cash generation Significant and growth growth opportunities opportunities creation 18
Slide 19: Growth - Momentum
For personal use only Growth - Momentum • Strong customer relationships • Innovation Momentum growth opportunities in all Amcor • Broad emerging markets footprint businesses • M&A track record 19
Slide 20: Growth – Focus segments
For personal use only Growth – Focus segments Flexible Packaging Flexible Packaging Rigid Plastics Closures Americas Asia specialty containers Amcor sales(1) US$1 billion US$1 billion US$750 million US$400 million Estimated total US$25 billion US$20 billion US$15 billion US$25 billion market (2) Est
Slide 21: Amcor shareholder value creation model
For personal use only Amcor shareholder value creation model Dividend Growth in line with (~$500m) EPS ~ 4% yield Total shareholder Strong, Reinvestment Organic EPS growth value of 10-15% defensive cash (~$400m) of ~ 3-4% per annum with flow low volatility Acquisitions EPS growth of ~ 2-7% and/or bu
Slide 22: Summary
For personal use only Summary • Expectations for the 2016/17 financial year unchanged • Solid financial performance • Progress against strategic priorities • Defensive and resilient with substantial growth potential Solid result and on track to deliver another year of strong earnings growth in FY201
Slide 23: Appendix slides
For personal use only Amcor 2017 Half Year Results Appendix slides
Slide 24: Results
For personal use only Results Statutory result Adjustments(1) Underlying result (US$ million) 1H16 1H17 1H16 1H17 1H16 1H17 Sales revenue 4,547.7 4,467.3 - - 4,547.7 4,467.3 PBITDA 664.3 650.3 - (27.4) 664.3 677.7 - Depreciation and amortisation (175.3) (182.0) - - (175.3) (182.0) PBIT 489.0 468.3 -
Slide 25: FX Translation impact
For personal use only FX Translation impact PAT currency exposures(1) Euro:US$ Euro, Increase in average US$ million impact Increase in Jan 17 25-30% US$ to Euro rate on PAT for 1H17 average US$ to Euro 1H17 0.9117 vs rate 0.9161 vs 1H17 1H16 0.9063 average rate of 0.9117 US$, 35-40% 1% 1 <1% Other
Slide 26: Finance and cash expectations – FY17
For personal use only Finance and cash expectations – FY17 Net financing costs between US$180 and US$190 million in constant currency terms • 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$80 million taking into ac
Slide 27: Cash flow
For personal use only Cash flow US$ million Dec 15 Dec 16 Underlying PBITDA 664.3 677.7 Interest (56.9) (77.5) Tax (91.4) (86.1) Capital expenditure (162.2) (203.8) Movements in working capital (264.0) (222.9) Flexibles segment restructuring (1) - (36.2) Other 12.1 1.7 Operating cash flow 101.9 52.9
Slide 28: Working capital performance
For personal use only Working capital performance Amcor average working capital to sales (1) (%) 9.8% 10.0% 9.5% 9.3% 9.0% 9.2% 8.2% Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Solid working capital performance (1) Working capital to sales from December 2013 onwards exclude the demerged Orora b
Slide 29: Debt profile
For personal use only Debt profile Drawn at 31 US$ million Facility Dec 2016(1) Debt currency profile Overdrafts/Leases 85 Commercial paper(2) 839 Other Euro 9% CY2017 100 100 22% CY2018 1,295 1,241 AUD CY2019 1,325 775 16% CY2020 670 141 CY2021 1,062 556 CY2022 - - CY2023 340 340 CY2024 - - CY2025
Slide 30: Focused portfolio and balanced global footprint
For personal use only Focused portfolio and balanced global footprint 1H17 Sales 1H17 Sales Australia, NZ Rigid 5% Emerging Plastics Markets 31% 31% Western Europe 33% Flexibles 69% Nth America 33% Focused portfolio Balanced global footprint 30
Slide 31: Focused portfolio – by substrate and end market
For personal use only Focused portfolio – by substrate and end market 1H17 sales by substrate 1H17 sales by end market Aluminium Home & Personal Other 13% care 3% 4% Food Healthcare Fibre 34% 14% 15% Tobacco Packaging 15% Plastics 72% Beverage 30% Common substrates Defensive end markets 31
Slide 32: Historic performance – Half yearly sales revenue
For personal use only Historic performance – Half yearly sales revenue (million) Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Flexibles € 2,534 2,553 2,467 2,529 2,521 2,711 2,706 2,760 2,818 Rigid Plastics US$ 1,497 1,682 1,490 1,702 1,563 1,754 1,562 1,795 1,377 Investments/Other
Slide 33: Historic performance – Underlying half yearly PBIT
For personal use only Historic performance – Underlying half yearly PBIT (million) Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Flexibles(1) € 280 308 289 317 308 344 321 360 340 Rigid Plastics(2) US$ 128 159 128 170 139 182 154 199 144(3) Investments/Other US$ (22) (16) (24) (15)
Slide 34: Historic performance – Average funds employed
For personal use only Historic performance – Average funds employed (million) Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Flexibles € 2,447 2,457 2,515 2,498 2,529 2,560 2,611 2,643 2,996 Rigid Plastics US$ 1,738 1,699 1,649 1,630 1,599 1,582 1,513 1,512 1,567 Investments/Other US
Slide 35: Flexibles – Historic performance half yearly sales
For personal use only Flexibles – Historic performance half yearly sales Sales Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 € million Europe, Middle East 1,503 1,563 1,475 1,556 1,231 1,341 1,386 1,399 1,340 and Africa(1) Americas(1) 266 290 202 263 366 Tobacco Packaging 537 565 55
Slide 36: Flexibles – raw material input costs
For personal use only Flexibles – raw material input costs 115.0 110.0 105.0 100.0 95.0 90.0 85.0 80.0 75.0 Weighted average index for a basket of raw materials - including films, resins, papers, liquids and foils - consumed by Amcor’s business. Reflects pricing in the European market. 36
Slide 37: Rigid Plastics – Historic performance half yearly sales
For personal use only Rigid Plastics – Historic performance half yearly sales Sales Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 US$ million North America 998 1,172 963 1,150 965 1,113 988 1,071 1,033 Latin America 443 443 465 467 520 557 497 643 269(1) Bericap 61 69 64 86 79 84 77
Slide 38: Rigid Plastics – product mix
For personal use only Rigid Plastics – product mix North America Sales revenue (1) Total Sales revenue (1) Latin America Sales revenue (1) USD 1,033 million USD 1,377 million USD 269 million 12% 24% 27% 36% 12% 44% 76% 32% 37% CSDW Custom Diversified Products (1) Sales for the half year ended 31 Dec
Slide 39: Rigid Plastics – North America
For personal use only Rigid Plastics – North America Custom Containers Diversified Products 4,000 300 3,500 250 3,000 Sales revenue (US$ millions) 2,500 200 Million units 3,744 2,000 150 280 3,337 235 1,500 100 1,000 50 500 0 0 1H16 Acquistion Mix/Growth/Raw 1H17 1H16 Growth 1H17 materials 39
Slide 40: Track record of growth by acquisition
For personal use only Track record of growth by acquisition 700 Rigid Plastics 600 Flexibles Americas US$ million spend Flexibles Europe 500 Tobacco Packaging Flexibles Asia Pacific 400 300 200 100 0 2012 2013 2014 2015 2016 2017 YTD Total spend (US$m) 273 191 104 58 655 308 Number of acquisitions 3
Slide 41: Historical acquisitions
For personal use only Historical acquisitions Business group Country Completion Currency Acquisition price EBITDA Acquired sales Synergy: date (Local currency Multiple (Local currency Acquired millions) millions) sales Jiangsu Shenda Group Flexibles Asia Pacific China H1 2014 RMB 350.0 8.0 440 Parry
Slide 42: Details of adjustments
For personal use only Details of adjustments US$ million Flexibles Investments / (€ million) Flexibles Rigid Plastics Other Consolidated Income statement 1H16 1H17 1H16 1H17 1H16 1H17 1H16 1H17 1H16 1H17 Flexibles restructuring - (25.0) - (27.4) - - - - - (27.4) Change of accounting treatment Venezu
Slide 43: Details of adjustments continued
For personal use only Details of adjustments continued Flexibles restructuring 1. Initiatives announced Date Announcement 14 June 2016 Closure of the Flexibles packaging plant in Halen (Belgium) 14 June 2016 Closure of the Tobacco packaging plant in Bristol (England) 14 June 2016 A restructure of th
Slide 44: Non-IFRS information
For personal use only 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 statemen