Slide 1: Amcor 2018 Half Year Results
For personal use only Amcor 2018 Half Year Results 12 February 2018 Ron Delia Managing Director & CEO Michael Casamento CFO
Slide 2: Disclaimer
Disclaimer Forward looking statements readers are cautioned not to place conditions of the major markets in uses these measures to assess the For personal use only This presentation contains forward- undue reliance on such forward looking which Amcor operates. performance of the business and looking
Slide 3: 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 5 Acquisition 1.00 0.9 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 0.60 0.5 2.4 2.4 2.0 2.0 2.0 0.40 2 0.20 1 0.00 0 2008 to 2012 data inc
Slide 4: First half results
For personal use only First half results
Slide 5: Summary and highlights
Summary and highlights (1) • Delivered earnings growth and margin expansion, strong cash flow and high returns For personal use only • First half result in line with expectations outlined at the AGM in November • PBIT up 1%; PAT and EPS up 4% • Margins expanded 30 bps to 11.4% • Strong cash flow and
Slide 6: Half year results
Half year results(1) For personal use only USD million Dec 16 Dec 17 % Constant • PBIT growth drivers Currency % • Contribution from both Flexibles and Rigid Plastics Sales revenue 4,467.3 4,502.2 0.8 (1.7) segments PBIT 495.7 513.8 3.7 0.8 • Continued margin expansion PBIT margin (%) 11.1 11.4 0.
Slide 7: Flexibles segment
Flexibles segment For personal use only • PBIT growth in line with AGM Constant expectations Currency USD million(1) Dec 16 Dec 17 % % • Organic growth Sales revenue 3,090 3,166 2.5 (1.2) • Normal time lag in recovering raw material costs PBIT(2) 373.0 396.8 6.4 2.3 • Outstanding performance on co
Slide 8: Flexibles full year outlook for 2017/18
Flexibles full year outlook for 2017/18 In constant currency terms, the Flexibles segment is now expected to deliver modest PBIT growth in the For personal use only 2017/18 financial year, compared with PBIT of USD 804.7 million (EUR 738.8 million) achieved in the 2016/17 year. This takes into accou
Slide 9: Rigid Plastics segment
Rigid Plastics segment • PBIT growth in line with AGM expectations For personal use only Constant • Solid performance given weak beverage Currency volumes USD million Dec 16 Dec 17 % % Sales revenue 1,377 1,336 (3.0) (2.6) • Organic growth PBIT 143.5 143.7 0.1 0.4 • Weak volumes in North America b
Slide 10: Rigid Plastics full year outlook for 2017/18
Rigid Plastics full year outlook for 2017/18 The Rigid Plastics segment is now expected to deliver PBIT in the 2017/18 financial year which is For personal use only broadly in line with PBIT of USD 342.7 million achieved in the 2016/17 year. This takes into account: • lower earnings in the North Ame
Slide 11: Cash flow
Cash flow USD million • Solid first half cash flow For personal use only Dec 16 Dec 17 PBITDA 677.7 695.2 • Strong capital discipline Interest (77.5) (80.7) Tax (86.1) (66.6) • Working capital: Capital expenditure (203.8) (187.1) • Higher raw material costs Working capital (222.9) (275.7) • Recent a
Slide 12: Balance sheet and debt profile
Balance sheet and debt profile For personal use only Balance sheet Dec 16 Dec 17 Debt profile Dec 17 Net debt (USD million) (4,285) (4,353) Fixed / floating-interest rate ratio 39% fixed Net finance costs (USD million) (93.8) (101.7) Bank debt / total debt 30% bank PBITDA interest cover (x) 7.9 7.5
Slide 13: Amcor strategy and value creation....
Amcor strategy and value For personal use only creation....
Slide 14: 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 Significant Strong cashgrowth opportunities generation and growth opportunities SHAREHOL
Slide 15: 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 16: Long term growth: opportunities across all businesses
Long term growth: opportunities across all businesses For personal use only All Amcor Businesses: Organic and Acquisition Opportunities Focus segments: substantial growth potential Flexible Packaging Flexible Packaging Rigid Plastics Closures Americas Asia specialty containers Amcor sales(1) USD 1 b
Slide 17: Delivering on current operating priorities
Delivering on current operating priorities Contribution to earnings growth by 2019/20(1) Current priorities to advance and accelerate For personal use only our strategy >USD 100m • Generating our own growth • More than USD 30 million of benefits from prior period investments in H1 Flexibles Alusa So
Slide 18: Sustainability: Leading by example
Sustainability: Leading by example For personal use only Amcor is the first packaging company pledging to develop all its 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 packagin
Slide 19: Recognised for Sustainability Leadership
Recognised for Sustainability Leadership For personal use only In 2017, Fortune named Amcor one of 56 global companies helping to ‘Change the World’ Amcor’s work with the UN World Food Programme improves aid packaging, so that life-saving nutrition reaches people in urgent need 19
Slide 20: Summary
Summary For personal use only • First half delivered earnings growth, margin expansion and solid cash flow • Resilience in context of short-term industry challenges • Continuing to deliver against strategic priorities • Long-term growth potential remains substantial FY2018 PAT expected to be higher
Slide 21: Appendix slides
Amcor 2018 Half Year Results For personal use only Appendix slides
Slide 22: FX translation impact
FX translation impact For personal use only PAT currency exposures(1) EUR:USD Decrease in average USD million impact Decrease in Jan 18 USD to Euro rate on PAT for 1H18 average USD to Euro rate EUR, 1H18 0.8502 vs 0.8459 vs 1H18 average 25-35% 1H17 0.9117 rate of 0.8502 USD(2), 7% 8 <1% 35-40% Other
Slide 23: 1H18 PBIT growth
1H18 PBIT growth For personal use only Sources of PBIT growth Segment PBIT - growth rate Market PBIT - organic growth rate(1) 1% 1% 2% 8% -9% 0% 0% Acquisitions Organic Reported Flexibles Rigid Plastics growth growth Developed Emerging Markets Markets (1) Excludes AMVIG and Corporate costs. 23
Slide 24: Finance and cash expectations – FY2018
Finance and cash expectations – FY2018 For personal use only Net financing costs USD 195 million - USD 205 million(1) • Cash costs in line with P&L charge Effective tax rate between 19% and 21%(2) • Cash tax 85-95% of P&L charge Corporate costs USD 75 million - USD 85 million(1) Free cash flow USD 1
Slide 25: Cash flow
Cash flow USD million Dec 16 Dec 17 For personal use only PBITDA 677.7 695.2 Interest (77.5) (80.7) Tax (86.1) (66.6) Capital expenditure (203.8) (187.1) Movements in working capital (222.9) (275.7) Flexibles segment restructuring (1) (36.2) (34.0) Other 1.7 39.7 Operating cash flow 52.9 90.8 Divide
Slide 26: Working capital performance
Working capital performance For personal use only Amcor average working capital to sales (1) (%) 9.8% 10.0% 10.4% 9.0% 9.5% 9.2% 9.3% 8.2% Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Solid working capital performance (1) Working capital to sales from December 2013 onwards exclude the dem
Slide 27: Debt profile
Debt profile Drawn at 31 USD million Facility For personal use only Dec 2017(1) Debt currency profile Overdrafts/leases - 167 Commercial paper(2) - 877 Other CY2018 1,308 1,292 9% EUR 26% CY2019 1,406 856 AUD CY2020 685 119 18% CY2021 275 275 CY2022 896 210 CY2023 381 381 CY2024 - - CY2025 - - CY202
Slide 28: Focused portfolio and balanced global footprint
Focused portfolio and balanced global footprint For personal use only 1H18 sales 1H18 sales Australia, NZ Rigid Emerging 5% Plastics Markets 30% 30% Western Europe 33% Flexibles 70% North America 32% Focused portfolio Balanced global footprint 28
Slide 29: Focused portfolio by substrate and end market
Focused portfolio by substrate and end market 1H18 sales by substrate 1H18 sales by end market For personal use only Aluminium Home & Personal Other 15% care 5% 4% Food Fibre Healthcare 38% 13% 14% Tobacco Packaging 14% Plastics 72% Beverage 25% Common substrates Defensive end markets 29
Slide 30: Historic performance – underlying half yearly PBIT
Historic performance – underlying half yearly PBIT For personal use only USD million Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Flexibles (1) USD 404 388 435 397 388 354 402 373 432 397 Rigid Plastics USD 159 128 170 139 182 154 199 144(2) 199(2) 144 Investments/Other USD
Slide 31: Flexibles – historic performance half yearly sales
Flexibles – historic performance half yearly sales(1) For personal use only USD million Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Europe, Middle 2,073 2,000 2,158 1,696 1,590 1,530 1,562 1,469 1,539 1,580 East and Africa(2) Americas(2) 252 262 223 293 401 435 414 Specialt
Slide 32: Flexibles raw materials input costs
Flexibles raw materials input costs For personal use only 135.0 130.0 125.0 120.0 115.0 110.0 105.0 100.0 95.0 90.0 85.0 80.0 75.0 Input 1 Input 2 Input 3 Input 4 Input 5 All inputs Reflects pricing in the European market for a basket of raw materials, including films, resins, papers, liquids and fo
Slide 33: Rigid Plastics – historic performance half yearly sales
Rigid Plastics – historic performance half yearly sales For personal use only USD million Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 North America 1,172 963 1,150 965 1,113 988 1,071 1,033 1,163 984 Latin America 443 465 467 520 557 497 643 269(1) 248(1) 279 Bericap 69 64
Slide 34: 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 1,057 million USD 1,336 million USD 279 million 7% 5% 17% 30% 29% 39% 32% 12% 71% 31% 27% ▪ CSDW ▪ Custom (1) Sales revenue for the half year ended 31 Decemb
Slide 35: Rigid Plastics – North America
Rigid Plastics – North America Custom Containers Specialty Containers For personal use only 4,000 400 3,500 350 3,000 Sales revenue (USD millions) 300 2,500 250 Million units 3,744 2,000 200 3,236 338 280 1,500 150 1,000 100 500 50 0 0 1H17 Acquisition Mix/Growth/Raw 1H18 1H17 Decline 1H18 materials
Slide 36: 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 37: Historical acquisitions
Historical acquisitions Acquired business Business group Country Completion Currency Acquisition price EBITDA Acquired sales For personal use only date (Local currency Multiple (Local currency millions) millions) Jiangsu Shenda Group Flexibles Asia Pacific China H1 2014 RMB 350 8.0 440 Parry Enterpr
Slide 38: Flexibles segment – Euro results
Flexibles segment – Euro results EUR million For personal use only Dec 16 Dec 17 % Sales revenue 2,818 2,692 (4.5) PBIT(1) 340.0 337.4 (0.8) PBIT margin % 12.1 12.5 Average funds employed 2,840 2,987 Return on funds employed % 24.7 24.4 Operating cash flow 276.9 232.7 Sales Jun 13 Dec 13 Jun 14 Dec
Slide 39: Results
Results Statutory result Adjustments(1) Underlying result For personal use only USD million 1H17 1H18 1H17 1H18 1H17 1H18 Sales revenue 4,467.3 4,502.2 - - 4,467.3 4,502.2 PBITDA 650.3 695.2 (27.4) - 677.7 695.2 - Depreciation and amortisation (182.0) (181.4) - - (182.0) (181.4) PBIT 468.3 513.8 (27
Slide 40: Details of adjustments
Details of adjustments USD million For personal use only Flexibles Investments / EUR million Flexibles Rigid Plastics Other Consolidated Income statement 1H17 1H18 1H17 1H18 1H17 1H18 1H17 1H18 1H17 1H18 Flexibles segment restructuring (25.0) - (27.4) - - - - - (27.4) - Total PBIT adjustments (25.0)
Slide 41: Details of adjustments continued
Details of adjustments continued Flexibles segment restructuring For personal use only 1. Main initiatives announced Date Announcement 14 June 2016 Closure of the Flexibles packaging plant in Halen (Belgium) 14 June 2016 Closure of the Specialty Cartons plant in Bristol (England) 14 June 2016 A rest
Slide 42: 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