Amcor Plc · NYSE:AMCR
Amcor — Macquarie Australia Conference 2018
35 slides from Amcor's conference presentation, May 3, 2018
Slide 1: Macquarie Australia Conference 2-3 May 2018
Macquarie Australia Conference 2-3 May 2018 Ron Delia Managing Director & CEO
Slide 2: Disclaimer
Disclaimer Forward looking statements undue reliance on such forward looking These forward looking statements Non-IFRS information This presentation contains forward- statements. speak only as of the date of this Certain non-IFRS financial information looking statements that involve In particular, w
Slide 3: Safety
Safety Lost-time frequency rate Recordable-case frequency rate 1.80 1.6 8 7.4 1.60 Acquisition 7 1.40 1.2 impact 6 5.1 Acquisition 1.20 0.9 0.9 0.9 5 4.1 impact 1.00 0.8 4.0 0.8 0.7 4 3.4 0.80 0.6 0.6 2.6 0.5 3 2.4 2.5 0.60 2.0 2.0 2.0 0.40 2 0.20 1 0.00 0 Global Reduce hand Eliminate Evolve priorit
Slide 4: Agenda for today
Agenda for today 1 Context: Uniquely positioned and high performing 2 FY18 Update 3 Future: Clear strategy and substantial growth potential 4
Slide 5: Amcor is a global leader in packaging
Amcor is a global leader in packaging • Founded in Australia in 1860s • USD 9bn sales, AUD 16bn market cap • Global leader: flexible and rigid plastic consumer packaging • ~200 plants, ~35,000 employees, 43 countries Global Scale Innovation Sustainability Strong Reach Player Leader Focus Financial M
Slide 6: Focused portfolio of high value packaging for consumer staples
Focused portfolio of high value packaging for consumer staples Sales by product segment Sales by end market High value add products 4% 5% 13% 14% 4% 38% 53% 14% 30% 25% Food Flexible packaging Rigid Plastic containers Beverage Specialty Cartons Healthcare Closures Home & Personal care Other consumer
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 East & 30% Africa 41% Developed Americas 44% markets 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: Margin improvement and strong return on capital
Margin improvement and strong return on capital 12.0% 11.1% 11.2% 10.9% EBIT Margins 9.1% Returns on funds 8.7% employed (%) 21.6 8.1% 20.3 20.4 7.7% 19.4 18.6 7.1% 6.8% 15.9 14.1 11.8 12.4 10.5 Estimated pre-tax WACC 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 9
Slide 10: Consistent cash generation and strong earnings growth
Consistent cash generation and strong earnings growth Free Cash Flow after capex and dividends (USD millions) 268 343 298 311 245 Reported EPS (USD cents per share) 57.3 56.2 55.8 57.7 60.6 FY13 FY14 FY15 FY16 FY17 Constant currency EPS growth +9.2% +6.4% +11.3% +10.1% 10
Slide 11: Strong total returns for shareholders
Strong total returns for shareholders 303.9% 152.1% 70.8% Notes: Citi, IRESS, FactSet. Market data as at 13 April 2018. Global packaging index represents a weighted index comprising: Aptar Group, Ball Corp, Bemis, Berry Plastics, Crown Holdings, Graphic Packaging, Huhtamäki, Mayr Melnhof Karton, Owe
Slide 12: Agenda for today
Agenda for today Context: Uniquely positioned and high performing 2 FY18 Update Future: Clear strategy and substantial growth potential 12
Slide 13: FY18 Update
FY18 Update • Strong underlying performance in several parts of the Company • Controlling the controllables - Amcor-wide focus • Excellent cost performance: SG&A and plant cost reductions, procurement savings and restructuring benefits • Pricing actions: raw material cost recovery and pricing aligne
Slide 14: Agenda for today
Agenda for today Context: Uniquely positioned and high performing FY18 Update 3 Future: Clear strategy and substantial growth potential 14
Slide 15: Amcor strategy
Amcor strategy Our Businesses FOCUSED PORTFOLIO FLEXIBLE RIGID PLASTIC SPECIALTY PACKAGING CONTAINERS CLOSURES CARTONS Our Differentiated Capabilities THE AMCOR WAY Our Aspiration Significant growth opportunities THE leading global packaging company WINNING FOR KEY STAKEHOLDERS 15
Slide 16: Amcor strategy – business portfolio
Amcor strategy – business portfolio Our businesses FOCUSED PORTFOLIO FLEXIBLE RIGID PLASTIC SPECIALTY PACKAGING CONTAINERS CLOSURES CARTONS Strong businesses Multiple paths to winning • Primary packaging • Market leadership • Consumer packaging • Scale positions • Good industry structure • Different
Slide 17: Growth opportunities in each segment
Growth opportunities in each segment All Amcor Businesses: Focus segments: Organic and acquisition opportunities Substantial growth potential Rigid Plastics Flexibles Flexibles Specialty Americas Asia containers Closures Amcor sales USD 1bn USD 1bn USD 750m USD 400m FLEXIBLE RIGID PLASTIC SPECIALTY
Slide 18: Amcor strategy – differentiated capabilities
Amcor strategy – differentiated capabilities Our businesses FOCUSED PORTFOLIO FLEXIBLE RIGID PLASTIC SPECIALTY PACKAGING CONTAINERS CLOSURES CARTONS Our differentiated capabilities THE AMCOR WAY Significant growth opportunities 18
Slide 19: Differentiated capabilities - The Amcor Way
Differentiated capabilities - The Amcor Way The keys to winning in the packaging industry and: • Competitive advantage • Leverage and scale benefits • Additional growth and productivity • Team alignment 19
Slide 20: Amcor strategy
Amcor strategy Our Businesses FOCUSED PORTFOLIO FLEXIBLE RIGID PLASTIC SPECIALTY PACKAGING CONTAINERS CLOSURES CARTONS Our Differentiated Capabilities THE AMCOR WAY Our Aspiration Significant growth opportunities THE leading global packaging company WINNING FOR KEY STAKEHOLDERS 20
Slide 21: Amcor strategy
Amcor strategy Our businesses FOCUSED PORTFOLIO FLEXIBLE RIGID PLASTIC SPECIALTY PACKAGING CONTAINERS CLOSURES CARTONS Our differentiated capabilities THE AMCOR WAY Our Aspiration Significant Investors growth benefit fromopportunities Amcor’s consistent growth and superior returns WINNING FOR INVEST
Slide 22: Amcor shareholder value creation model
Amcor shareholder value creation model Dividend Growth in line with (~ USD 500m) EPS ~ 4% yield Total shareholder Strong, Capital Organic EPS growth value of 10-15% defensive cash expenditure of ~ 3-4% per annum with flow (~ USD 400m) low volatility Acquisitions EPS growth of ~ 2-7% and/or buy-backs
Slide 23: Value creation starts with strong cash flow
Value creation starts with strong cash flow Strong, Organic EPS growth defensive cash of ~ 3-4% flow 23
Slide 24: Value creation through dividend yield
Value creation through dividend yield Dividend Growth in line with (~ USD 500m) EPS ~ 4% yield Strong, Organic EPS growth defensive cash of ~ 3-4% flow 24
Slide 25: Value creation through organic growth
Value creation through organic growth Dividend Growth in line with (~ USD 500m) EPS ~ 4% yield Strong, Capital Organic EPS growth defensive cash expenditure of ~ 3-4% flow (~ USD 400m) Multiple sources of organic growth • Commercial and cost productivity • Customer relationships – Big and small bran
Slide 26: Customer relationships – winning with big and small brands
Customer relationships – winning with big and small brands Flexibles EMEA Rigid Plastics North America Beverage (FY17 sales) Regional Business Unit >4,000 CAGR 14% ~25 ~10 # of customers €m sales per annum >30m 10m-30m <10m FY13 FY17 USD sales % of Flexibles EMEA sales ~35% ~15% ~50% 26
Slide 27: Innovation - effective and highly regarded capabilities
Innovation - effective and highly regarded capabilities Product safety Differentiation Total cost of Sustainable ownership Packaging Vento AmLite Family 100% PCR Formpack Fortis container Ultra/Dessiflex Coffee Food & Beverages Home care Pharma Medical Global sales reached >USD 100 million in 2 year
Slide 28: 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 29: Emerging markets - packaging spend growth
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 30: Value creation through acquisitions and/or buy-backs
Value creation through acquisitions and/or buy-backs Dividend Growth in line with (~ USD 500m) EPS ~ 4% yield Strong, Capital Organic EPS growth defensive cash expenditure of ~ 3-4% flow (~ USD 400m) Acquisitions EPS growth of ~ 2-7% and/or buy-backs (~ USD 200-300m) 30
Slide 31: 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 32: Summary
Summary 1 Context: Uniquely positioned and high performing 2 FY18 Update 3 Future: Clear strategy and substantial growth potential 32
Slide 33: Macquarie Australia Conference 2-3 May 2018
Macquarie Australia Conference 2-3 May 2018 Ron Delia Managing Director & CEO
Slide 34: Global and regional sustainability partnerships
Global and regional sustainability partnerships Global Initiatives Regional Initiatives Addressing global issues through Identifying and implementing practical, sustainability partnerships with … efficient recycling options with … CEFLEX European collaboration, Ellen MacArthur Foundation‘s New Plast
Slide 35: Flexibles raw material cost inflation
Flexibles raw material cost inflation Resin (ex PET) Aluminium Liquids Asia Europe Americas Ingredient 1 Ingredient 2 H118 December 17 vs June 17 +8% +5% +13% +10% +17% +36% FY18 Cumulative since June 17 +17% +11% +15% +20% +26% +67% YTD to March 18 Data reflects LDPE (Asia, EU, US, Latam), HDPE (As