Slide 1: Investor Presentation Edinburgh October 2002
Investor Presentation Edinburgh October 2002
Slide 2: Agenda
• Strategy • Review of 2001/02 results • Schmalbach-Lubeca acquisition • Summary
Slide 3: Cash generation to fund growth internationally
Predictable returns High market Geographic shares spread Low cost Strong cash generation Strong relationships Beverage & Flexible with global Corrugated Cartons food cans plastics customers … cash generation to fund growth internationally
Slide 4: Consistent growth and superior returns
Significant Higher levels Geographic growth Strong underlying of technology expansion and opportunities and common growth innovation customers Meet customers’ needs in more products and Flexible Tobacco PET & plastics cartons closures Distribution locations … consistent growth and superior returns
Slide 5: Amcor at a glance: EBIT breakdown
220 Plants 36 Countries 30,000 Employees Asia Sales A$11.5 b 3% Market capitalisation A$7.4 b Europe The 34% Americas Products Segments % Sales 41% • PET 31 Aust & NZ • Flexibles 22 22% • Corrugated/Paper 14 • Distribution 10 • Closures 9 • Cartons 8 EBIT BREAKDOWN • Metals 5
Slide 6: Group results 2001 vs 2002
$ mill 2001 2002 Operating revenue 5,667 7,488 +32.1% Net profit (before goodwill) 280.1 335.0 +19.6% Goodwill Amortisation 42.0 54.5 Net profit (after goodwill) 238.1 280.5 +17.8% EPS (before goodwill) 44.7 50.5 +13.0% EPS (after goodwill) 38.0 42.3 +11.3%
Slide 7: Segment sales, PBIT and returns
250 18 $m 230 16 % 210 14 190 12 170 PBIT 10 150 RoFE 8 130 110 6 90 4 70 2 50 0 98/99 99/00 00/01 01/02 Sales $m 2,151 2,230 2,283 2,368 PBIT $m 209 218 235 239 A.F.E. $m 1,664 1,721 1,805 1,616 RoAFE % 12.6 12.7 13.0 14.8 Employees 8,377 8,069 7,796 7,807
Slide 8: Segment sales, PBIT and returns
45 20 $m 18 % 40 16 35 14 30 12 PBIT 10 RoFE 25 8 20 6 4 15 2 10 0 97/98 98/99 99/00 00/01 01/02 Sales $m 230 225 255 328 310 PBIT $m 24 29 33 37 44 A.F.E. $m 255 260 268 283 271 PBIT/AFE % 9.6 11.0 12.3 13.1 16.0 Employees 2,202 2,232 2,459 2,549 2,797
Slide 9: Segment sales, PBIT and returns
175 18 $m 150 16 % 14 125 12 PBIT 100 10 RoFE 75 8 6 50 4 25 2 0 0 97/98 98/99 99/00 00/01 01/02 Sales $m 1,238 1,411 1,515 2,087 2,387 PBIT $m 82 99 116 157 160 A.F.E. $m 571 663 673 1,051 1,374 PBIT/AFE % 14.4 14.9 17.2 14.9 11.7 Employees 3,485 3,590 3,755 4,567 5,017
Slide 10: Segment sales, PBIT and returns
120 16 % $m 100 14 12 80 10 PBIT 60 8 RoAFE 6 40 4 20 2 0 0 98/99 99/00 00/01 01/02 Sales $m 793 796 957 2,417 PBIT $m 50 53 49 118 AF.E. $m 330 358 497 1,262 PBIT/AFE % 15.2 14.8 9.8 9.3 Employees 2,595 2,917 3,117 8,102
Slide 11: Segment highlights: very good second half
• Very good second half • Volumes steady – Good capacity utilisation across the plants • Successful plant rationalisation • Synergies ahead of target
Slide 12: Basket of base material purchases index
Index 110 100 90 80 70 60 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Representative Basket of AFE Base Material Purchases January 2001 = 100
Slide 13: Earnings per share
EPS 55 EPS Basic pre significant items (PACRS as interest) Cents EPS Basic pre significant items and amortisation 50.5 50 44.7 45 42.3 40.0 40 38.0 34.5 35 30 99/00 00/01 00/02
Slide 14: Profit after tax and cash flow from operations
PAT = Profit After Tax (and PACRs) CFO = Cash Flow from Operations (= PAT plus Depreciation & Amortisation plus/minus tax payments and $m 650 movements in provisions) before WC movements & spend 694 on Sustaining Capital Expenditure 550 526 450 415 350 250 281 238 218 150 1999/00 2000/01 2001/02
Slide 15: Cash inflows and outflows
Inflows ($m) Outflows ($m) $231 Maintenance Capex PBITDA $902 $113 Net Interest $60 Tax $76 Net Distributions paid Working Capital $491 Growth Capex & Acq. $175 $106 Net Debt reduction
Slide 16: Gearing and interest cover
Jun 01 Jun 02 Jul 02 Proforma Total equity (incl. Hybrids) 2,996 5,110 5,179 Net debt (net of cash) 1,732 (818) 2,085 Total 4,728 4,292 7,264 Gearing • All Hybrids as equity 37% (19%) 29% • All Hybrids as debt 54% 8% 44% Interest cover (All Hybrids as interest) • PBIT 3.7x 3.7x • PBITDA 5.4x 6.0x
Slide 17: Return on funds employed vs WACC
% 16 15.0 14 13.2 12.5 12.5* 10.6% WACC 11.3 12 10.0 10 9.6 8 6 4 2 0 96/97 97/98 98/99 99/00 00/01 01/02 * Excluding acquisitions returns would have been around 14.5% for the year 01/02
Slide 18: Schmalbach-Lubeca acquisition
• Purchase of Schmalbach-Lubeca’s (Schmalbach) PET and Closures operations – Schmalbach will continue to own its beverage can operations • Acquisition price $2.875 billion – Transaction closed early July • Funding mixture of equity, debt and the sale of 45% of Kimberly-Clark Australia
Slide 19: Acquired sales, EBITDA and multiple
$ million Sales EBITDA EBITDA Multiple PET 2,475 328 Closures 866 101 TOTAL 3,341 429 6.7 Both EBITDA and sales are trailing 12 months to March 2002.
Slide 20: Significant value creation
EPS positive in year Target 15% EBITA Significant one both pre & post return on funds employed by end of value amortisation year three creation Strong cash flow Potential substantial generation tax benefits
Slide 21: Broad geographic spread
High value Significant No. 1 globally add large position in CSD & Sales $3.3 billion increase in water custom products Broad geographic spread
Slide 22: PET bottles
PET bottles \caw enti : =e ol \ NGE Stasse y) 4 ‘ we ; - bol } : hui Drinkyegh aie
Slide 23: PET volume growth by region 2000-2005
2000-2005 CSD Bottled Custom Total (Volume) Water North America 5.0% 16.8% 9.5% 7.4% Latin America 6.7% 16.2% 17.3% 9.8% Europe 8.8% 9.2% 11.5% 9.2% Asia Pacific 11.3% 14.6% 14.9% 12.8% TOTAL 9.6%
Slide 24: Low cost manufacturing position
• Major North American and European modernisation programmes are complete • Approximately $1.1 billion invested since 1998 to restructure and upgrade operations • Closed 14 plants in Europe and North America during the past four years Low cost manufacturing position
Slide 25: PET: 51 plants in 20 countries
51 plants 20 countries 15 in-house blow facilities
Slide 26: Leading global position
Strong market Low cost producer Growth in shares with & technology developing regions excellent customer leader relations Leading global position
Slide 27: Closures
Closures
Slide 28: Closures: 21 plants, 15 countries
21 plants 15 countries Sales $1 billion
Slide 29: Closures and PET EBITDA growth
EBITDA $ million 106* 660 50 75 429 12 mths Synergies Closures PET & to March 02 Restructuring Closures Growth * Represents 3¼ yrs growth from April 1 2002 to June 30 2005 * Estimated depreciation year three approx $230 million
Slide 30: Strong position in all key markets
Strong position in all key markets Leader in Top five player No.1 in Europe No.1 globally in No.1 packaging distribution of No.1 globally in globally in in flexible tobacco company in packaging PET closures packaging packaging Australia products in the US
Slide 31: Solid earnings growth
European Recovery in Improvement Growth in PET flexibles Sunclipse in Australia and closures Solid earnings growth
Slide 32: Delivering on Schmalbach-Lubeca acquisition expectations
Focus on management is to deliver on expectations for the Schmalbach-Lubeca acquisition EPS positive both Successful Realise benefits pre and post integration into of being the amortisation Amcor market leader
Slide 33: Clear and consistent strategy
Clear & consistent Growth Strategy opportunities Strong Businesses Manage Superior growth while Returns maintaining Sound good returns balance sheet Global Packaging Quality Leader management
Slide 34: Investor Presentation Edinburgh October 2002
Investor Presentation Edinburgh October 2002