Slide 1: Amcor 2015/16 Full Year Results
For personal use only Amcor 2015/16 Full Year Results Investor Presentation 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 2 1.9 9 8.4 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 4 3.4 0.8 0.7 0.6 0.6 3 2.6 0.6 0.5 2.0 2.0 2.0 0.4 2 0.2 1 0 0 2007 to 2012 data includes the demerged Orora business. 2013 to 2016 are show
Slide 4: Highlights
For personal use only Highlights (1) Underlying earnings unless otherwise indicated • Strong financial performance • Balanced earnings growth • Strong cash flow and balance sheet • Increased ROAFE to 21.6% • $1.2 billion cash redeployed for benefit of shareholders • Increased annual dividend to 41.0
Slide 5: Full year results
For personal use only Full year results(1) Constant Strong constant currency earnings growth US$ million Jun 15 Jun 16 % currency • PAT up 7.5% % • EPS up 11.3% Sales revenue 9,611.8 9,421.3 (2.0) 3.7 PBIT 1,053.3 1,055.3 - 7.0 • Negative currency impact of US$51m on PAT PBIT / Sales margin (%) 11.0
Slide 6: Well balanced earnings growth
For personal use only Well balanced earnings growth(1) Sources of PBIT growth Segment PBIT - growth rate Market PBIT - organic growth rate(2) Organic Growth 4% 10% 8% Contribution acquisitions 7% from 3% 5% Total 7% Flexibles Rigid Plastics Developed Markets Emerging Markets Balance growth by segmen
Slide 7: Flexibles Segment
For personal use only Flexibles Segment Constant Reported currency • Solid PBIT growth in constant currency terms Euro million Jun 15 Jun 16 % % • Business group performance Sales revenue 5,232 5,466 4.5 4.7 Tobacco Packaging PBIT(1) 642.9 681.2 6.0 7.2 • Very strong in Europe on inventory build PBI
Slide 8: Flexibles Restructuring
For personal use only Flexibles Restructuring(1) • Announced on 9 June 2016 • Initiatives designed to accelerate the pace of adapting the organisation within developed markets • Generates excellent returns – 35% on cash invested of US$120 to US$150 million • benefits of US$40-US$50 million within th
Slide 9: Flexibles full year outlook for 2016/17
For personal use only Flexibles full year outlook for 2016/17 Flexibles segment is expected to deliver particularly strong earnings growth in the 2016/17 year in constant currency terms compared with €681.2 million achieved in the 2015/16 year. This outlook takes into account: • modest organic growt
Slide 10: Rigid Plastics
For personal use only Rigid Plastics • Outstanding performance USD million Jun 15 Jun 16 % • Strong volume performance across all Sales revenue 3,317 3,357 1.2 business units, partly driven by new Underlying PBIT(2) 321.3 352.5 9.7 business wins AFE 1,582 1,512 (4.4) • 7.6% growth in North America b
Slide 11: Rigid Plastics full year outlook for 2016/17
For personal use only Rigid Plastics full year outlook for 2016/17 The outlook for the Rigid Plastics segment , compared with PBIT of US$352.5 million achieved in the 2015/16 year takes into account: • A negative impact of approximately US$40 million related to Venezuela; • continued growth in Latin
Slide 12: Cash flow
For personal use only Cash flow US$ million Jun 15 Jun 16 Comments PBITDA 1,408.6 1,409.3 Up 6.5% on a constant currency basis Interest (165.8) (153.4) Tax (154.7) (170.3) Due to timing of payments Capital expenditure (323.0) (348.9) Moderately higher than D&A including restructuring and integration
Slide 13: Cash flow - continued
For personal use only Cash flow - continued US$ million Jun 15 Jun 16 Comments Operating cash flow 778.4 791.5 Dividends and other equity (480.1) (480.3) distributions Free cash flow 298.3 311.2 Acquisitions/Divestments (97.6) (496.6) Increased acquisition activity compared with prior years Venezuel
Slide 14: Balance sheet and debt profile
For personal use only Balance sheet and debt profile Balance sheet Jun 15 Jun 16 Debt profile Jun 16 Net debt (US$ million) 2,880 3,829 Fixed / floating interest rate ratio 48% fixed Net finance costs (US$ million) 169.2 166.8 Bank debt / total debt 22% bank PBITDA interest cover (x) 8.4 8.4 Undrawn
Slide 15: 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 (~$400m) of ~ 3-4% per annum with flow low volatility Acquisitions EPS growth of ~ 2-7% and/or bu
Slide 16: Total value creation of 15% for the full year
For personal use only Total value creation of 15% for the full year Dividend yield of 4% Constant currency PAT Value creation growth 8% of 15% Reduction in average number of shares on issue 3% Multiple sources of value under resilient shareholder value creation model 16
Slide 17: Where to from here....
For personal use only Where to from here….
Slide 18: Current operating priorities
For personal use only Current operating priorities Amcor Today – Position of Strength Opportunities for Amcor • Focused portfolio – leadership • Generating our own growth - positions, good industry structure, customer focus, innovation, M&A significant Emerging Market exposure • Increasing agility a
Slide 19: Current operating priorities
For personal use only Current operating priorities Current operating priorities Progress Generating our own growth • Market share gains (customer focus, innovation, emerging markets, • Investing in new plants M&A) • Philippines, Indonesia and USA • 8 acquisitions announced since 30 June 2015 • 1 in
Slide 20: Future earnings to benefit from increase in acquisitions
For personal use only Future earnings to benefit from increase in acquisitions 700 Rigid Plastics 600 Flexibles Americas US$ million spend Flexibles Europe 500 Tobacco Packaging Flexibles Asia Pacific 400 300 200 100 0 2012 2013 2014 2015 2016 Total spend (US$m)(1) 273 191 104 58 655 Number of acqui
Slide 21: Strategy and growth
For personal use only Strategy and growth Objective is clear Delivery is enabled by: Business Portfolio – strong businesses with significant growth potential Total shareholder value of 10-15% per annum with low volatility Unique Capabilities - sources of differentiation and competitive advantage Sub
Slide 22: Growth opportunity - Flexibles Americas
For personal use only Growth opportunity - Flexibles Americas Global Flexible packaging Market share demand by region Amcor 25% <5% 75% Americas ROW Significant opportunity to accelerate growth in the Americas region 22
Slide 23: Growth opportunity – non beverage rigid plastics
For personal use only Growth opportunity – non beverage rigid plastics • Differentiation and competitive advantage • Materials and production technologies Food • Barrier and decoration capabilities Pharmaceutical • Footprint • Significant growth opportunities Personal / Home Care • Conversions from
Slide 24: Summary
For personal use only Summary • Strong financial performance • Balanced earnings growth, strong cash flow and balance sheet • US$1.2 billion cash deployed for shareholders • Good progress against strategic priorities • Defensive and resilient with substantial growth potential Strong result delivered
Slide 25: Full Year Results Appendix slides
For personal use only Full Year Results Appendix slides
Slide 26: Results
For personal use only Results Statutory result Adjustments(1) Underlying result (US$ million) 2015 2016 2015 2016 2015 2016 Sales revenue 9,611.8 9,421.3 - - 9,611.8 9,421.3 PBITDA 1,420.4 929.7 11.8 (479.6) 1,408.6 1,409.3 - Depreciation and amortisation (355.3) (354.0) - - (355.3) (354.0) PBIT 1,0
Slide 27: Shareholder value creation of 15%
For personal use only Shareholder value creation of 15% Contribution to constant Contribution to Shareholder Value 16% currency PBIT growth 4% 15% Emerging markets(1) 8% 14% Developed markets(1) 5% 12% 3% 11% 10% 9% -1% 8% 3% 7% 3% 6% 4% 4% 2% 0% Organic PBIT Acquistions PBIT growth After tax PBIT I
Slide 28: FX Translation impact
For personal use only FX Translation impact PAT currency exposures(1) Euro:USD Euro, Increase in average US$ million impact Increase in Jul 16 25-30% USD to Euro rate on PAT for FY 16 average USD to Euro FY 16 0.9011 vs rate 0.9043 vs FY 16 FY 15 0.8312 average rate of 0.9011 USD, 8% 14 <1% 35-40% O
Slide 29: Flexibles full year outlook for 2016/17
For personal use only Flexibles full year outlook for 2016/17 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. This outlook takes into account: • modest org
Slide 30: Rigid Plastics full year outlook for 2016/17
For personal use only Rigid Plastics full year outlook for 2016/17 The outlook for the Rigid Plastics segment in the 2016/17 year, compared with PBIT of US$352.5 million achieved in the 2015/16 year, takes into account: • the decision announced on 9 June 2016 to eliminate Amcor’s financial exposure
Slide 31: Finance and cash expectations – FY17
For personal use only Finance and cash expectations – FY17 Net financing costs between US$185 and US$195 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$80 million taking into ac
Slide 32: Cash flow
For personal use only Cash flow US$ million Jun 15 Jun 16 Underlying PBITDA 1,408.6 1,409.3 Interest (165.8) (153.4) Tax (154.7) (170.3) Capital expenditure (323.0) (348.9) Movements in working capital (46.0) 37.2 Other 59.3 17.6 Operating cash flow 778.4 791.5 Dividends and other equity distributio
Slide 33: Working capital performance
For personal use only Working capital performance Amcor average working capital to sales (1) (%) 9.6% 9.6% 9.5% 8.9% 8.7% 8.6% 8.3% 7.9% Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Working capital to sales ratio continues to improve (1) Working capital to sales from Jun 2013 onwards excl
Slide 34: Debt profile
For personal use only Debt profile Drawn at 30 US$ million Facility Jun 2016(1) Debt currency profile Overdrafts/Leases 100 Commercial paper(2) 588 Other 11% Euro CY2016 275 275 25% CY2017 100 100 CY2018 1,306 1,015 AUD CY2019 1,359 864 16% CY2020 676 159 CY2021 281 281 CY2022 - - CY2023 367 367 CY2
Slide 35: Focused portfolio and balanced global footprint
For personal use only Focused portfolio and balanced global footprint FY16 Sales FY16 Sales Australia, NZ 5% Emerging Rigid Markets Plastics 32% 36% Western Europe 31% Flexibles 64% Nth America 32% Focused portfolio Balanced global footprint 35
Slide 36: Focused portfolio – by substrate and end market
For personal use only Focused portfolio – by substrate and end market FY16 sales by substrate FY16 sales by end market Aluminium Home & Personal Other 13% care 2% 3% Healthcare Food 14% 33% Fibre 15% Tobacco Packaging 15% Plastics 72% Beverage 33% Common substrates Defensive end markets 36
Slide 37: Historic performance – Half yearly sales revenue
For personal use only Historic performance – Half yearly sales revenue Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun (million) 09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 Flexibles € 869 869 1,940 2,248 2,329 2,272 2,411 2,534 2,553 2,467 2,529 2,521 2,711 2,706 2,760 Rigid Plastics U
Slide 38: Historic performance – Half yearly PBIT
For personal use only Historic performance – Half yearly PBIT Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun (million) 09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 Flexibles(2) € 80 81 171 198 252 246 281 280 308 289 317 308 344 321 360 Rigid US$ 103 82 104 101 139 117 156 128 159 128 1
Slide 39: Historic performance – Average funds employed
For personal use only Historic performance – Average funds employed Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun (million) 09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 Flexibles € 1,009 981 1,463 2,195 2,209 2,195 2,199 2,447 2,457 2,515 2,498 2,529 2,560 2,611 2,643 Rigid US$ 1,601 1
Slide 40: Flexibles – Historic performance half yearly sales
For personal use only Flexibles – Historic performance half yearly sales Sales Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun € million 09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 Europe, Middle East 620 589 1,360 1,552 1,604 1,492 1,558 1,503 1,563 1,475 1,556 1,231 1,341 1,315 1,328
Slide 41: Flexibles – raw material input costs
For personal use only Flexibles – raw material input costs 220 200 180 160 140 120 100 80 60 Resins Aluminium Rolling quarterly weighted average index for Western European Polyethylene & Polyethylene resins and film and PET film expressed in Euro’s, Rolling quarterly average index for LME aluminium
Slide 42: Rigid Plastics – Historic performance half yearly sales
For personal use only Rigid Plastics – Historic performance half yearly sales Sales Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun US$ 09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 million North America 834 647 815 982 1,203 1,104 1,245 998 1,172 963 1,150 965 1,113 988 1,071 Latin Ameri
Slide 43: 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 2,059 million USD 3,357 million USD 1,140 million 15% 21% 24% 36% 46% 22% 63% 34% 40% CSDW Custom Diversified Products (1) Sales for the full year ended 30 J
Slide 44: Rigid Plastics – North America
For personal use only Rigid Plastics – North America Custom Containers Diversified Products 9,000 600 8,000 454 3.6 7,000 500 (12.3) 18.7 Sales revenue (US$ millions) 6,000 400 Million units 5,000 300 7,733 7,279 4,000 484 474 3,000 200 2,000 100 1,000 0 0 FY 2015 Growth FY 2016 FY 2015 Raw material
Slide 45: Investments / other
For personal use only Investments / other PBIT (US$ million) Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 AMVIG 33.7 34.0 26.2 19.8 21.3 18.2 Glass Tubing 18.2 - - - - - Corporate costs(1) (71.5) (73.7) (63.7) (59.7) (62.0) (71.3) Total (19.6) (39.7) (37.5) (39.8) (40.7) (53.1) Corporate costs for 2016
Slide 46: Historical acquisitions
For personal use only Historical acquisitions Business group CountryCompletion Currency Acquisition price EBITDA Acquired sales Synergy: date (Local currency Multiple (Local currency Acquired millions) millions) sales Alcan Packaging Flexibles Global H2 2010 USD 1,948 5.1 4,100 5% Alcan Medical Flex
Slide 47: Details of adjustments
For personal use only Details of adjustments US$ million Flexibles Investments / (€ million) Flexibles Rigid Plastics Other Consolidated Income statement 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 Sale of surplus land in Turkey(1) 9.2 11.8 11.8 - Flexibles Restructuring - (85.5) - (94.9) - -
Slide 48: 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 49: Details of adjustments continued
For personal use only Details of adjustments continued Venezuela As announced on 9 June 2016, economic conditions in Venezuela deteriorated during the period and impacted the business environment, including the ability to convert local currency to the US dollars required for importing raw materials.
Slide 50: 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