CHICAGO and MELBOURNE, Australia, Aug. 20, 2019 /PRNewswire/ -- Amcor plc (NYSE:
AMCR, ASX: AMC) today reported results for the fiscal year ended 30
June 2019.
Highlights*
- GAAP net income of $430.2
million; Cash flow from operating activities of $776.1 million;
- Adjusted EBIT of $1,075.4
million, up 5.7% in constant currency terms;
- Adjusted net income of $729.5
million, up 9.0% in constant currency terms;
- Adjusted cash flow after dividends of $192.7 million;
- 2019 total dividend increased to 45.5 US cents per share,
including 12.0 US cents per share dividend declared today;
- All-stock Bemis acquisition completed 11
June 2019 and $180 million of
pre-tax cost synergies over three years reconfirmed; and
- Proceeds from required divestments to drive shareholder value
through a $500 million share buy-back
and $50 million in strategic
investments to advance Amcor's sustainability agenda.
Amcor CEO Mr Ron Delia said: "2019 was a transformative year
for Amcor, marked by the successful completion of the Bemis
acquisition and our listing on the New York Stock Exchange.
The integration of Bemis is well underway and we remain confident
in our ability to deliver $180
million of pre-tax cost synergies by the end of the 2022
fiscal year."
"The legacy Amcor business performed well during the 2019
financial year, delivering results right in line with expectations
and building momentum in several areas including safety, sales and
working capital. Overall, Amcor delivered net income growth
of 9% in constant currency terms with good performance in both the
Rigid Packaging and Flexibles reporting segments."
"Our financial profile is strong and will be enhanced as we
deliver financial benefits from the Bemis acquisition and continued
organic growth across the business. Amcor's capacity to
drive shareholder returns is evident in the initiatives announced
today including increasing the dividend, returning $500 million to shareholders through a share
buy-back and investing at least $50
million in strategic projects to accelerate our
sustainability agenda."
"Today, Amcor is the global leader in consumer packaging with a
unique combination of talented people, differentiated capabilities,
scale and global reach. These are powerful competitive
advantages that enable us to better serve our customers and to
develop and deliver packaging that best protects the
environment."
Key financials*
GAAP
results
|
FY18 USD
million
|
FY19 USD
million
|
Net sales
|
9,319.1
|
9,458.2
|
Net income
|
575.2
|
430.2
|
EPS (US
cents)
|
49.4
|
36.3
|
Cash flow from
operating activities
|
871.4
|
776.1
|
Adjusted non-GAAP
results
|
FY18 USD
million
|
FY19 USD
million
|
Reported var%
|
Currency
impact
var%
|
Constant
Currency var%
|
Sales
|
9,319.1
|
9,458.2
|
1.5
|
(4.0)
|
5.5
|
EBITDA
|
1,389.9
|
1,393.9
|
0.3
|
(3.8)
|
4.1
|
EBIT
|
1,056.4
|
1,075.4
|
1.8
|
(3.9)
|
5.7
|
Net income
|
697.3
|
729.5
|
4.6
|
(4.4)
|
9.0
|
Free cash flow
(before dividends)
|
643.4
|
733.4
|
|
|
|
Cash flow after
dividends
|
116.6
|
192.7
|
|
|
|
*GAAP earnings
reflects earnings for the legacy Amcor business plus earnings for
the legacy Bemis business since 11 June 2019. Adjusted
non-GAAP measures exclude items which management considers are not
representative of ongoing operations. Further details related
to non-GAAP measures and reconciliations to GAAP measures can be
found under "Presentation of non-GAAP financial information" and in
the tables included in this release. All amounts referenced
throughout this document are in US dollars unless otherwise
indicated.
|
Bemis acquisition update
On 11 June 2019, the acquisition
of Bemis Company, Inc. was completed. Under the terms of the
agreement announced on 6 August 2018,
the all-stock acquisition was effected at a fixed exchange ratio of
5.1 Amcor shares for each Bemis share.
This strategic combination establishes Amcor as the global
leader in consumer packaging with a comprehensive global footprint,
scale in every region and industry leading R&D
capabilities. Combined, these unique characteristics provide
substantial differentiation in the packaging industry and underpin
a stronger value proposition for shareholders, customers, employees
and the environment.
Operating performance and contribution to earnings
During the June 2019 quarter, the
legacy Bemis businesses demonstrated similar financial performance
to the previous three quarters, with the exception of the business
in Latin America which delivered a
marginal loss in the June 2019
quarter.
Included in Amcor's results for the 2019 fiscal year are sales
of $215.4 million, adjusted EBIT of
$22.7 million and adjusted net income
of $14.3 million generated by the
legacy Bemis business since 11 June 2019. Sales, adjusted
EBIT and adjusted net income for the legacy Amcor business were
therefore $9,242.8 million,
$1,052.7 million and $715.2 million respectively. Cash flow
after dividends for the legacy Amcor business was $206.6 million
Integration and synergies
Amcor has commenced the 2020 fiscal year on track to achieve the
previously announced synergy benefits of $180 million (pre-tax) by the end of the 2022
fiscal year, with $65 million of
those benefits expected in the 2020 fiscal year. Since
completion, the integration teams have been focused on capturing
the cost synergies and current progress is in line with our
expectations. Given the 11 June
2019 transaction closing date, there were no material
synergy benefits included in Amcor's financial result for the 2019
fiscal year.
Total cash integration costs are expected to be $150 million, with approximately $100 million expected to be incurred in the 2020
fiscal year.
Redeployment of proceeds from required divestments
As previously announced, Amcor was required to divest flexible
packaging plants in Europe and
the United States in order to
secure anti-trust approval for the Bemis acquisition.
Combined after tax proceeds from the sale of these assets were
approximately $550 million.
Given Amcor's strong balance sheet and capacity to generate
higher levels of free cash flow as the financial benefits from the
Bemis acquisition are delivered, the Company is positioned to
redeploy the proceeds from these divestments while maintaining the
ability to invest in organic growth and acquisitions as well as
maintaining strong investment grade credit metrics.
The divestment proceeds will be used to drive shareholder
returns through two initiatives announced today:
$500 million on-market share
buy-back
The Amcor Board of Directors has approved a $500 million on-market buy-back of ordinary
shares and Chess Depositary Instruments (CDIs). Amcor intends
to repurchase its ordinary shares on the New York Stock Exchange
(NYSE) and CDIs on the Australian Securities Exchange (ASX) in
proportion to the number of shares and CDIs currently on issue.
Strategic investments to further advance Amcor's
sustainability agenda
Amcor has committed to invest at least $50 million in strategic projects to further
advance our sustainability agenda and accelerate progress towards
the company's 2025 goals, announced in January 2018:
- to make all our packaging reusable or recyclable;
- to increase use of post consumer recycled material; and
- to collaborate with others to increase rates of recycling
worldwide.
The additional strategic investments will fund a range of
initiatives including research and development infrastructure,
manufacturing equipment, extensions to Amcor's current
partnership network, and investments in open innovation.
2019 financial results
Segment information
|
FY18
|
FY19
|
|
Net
sales
USDm
|
Adjusted
EBIT
USDm
|
Adjusted
EBIT /
Sales %
|
Adjusted EBIT /
average funds
employed %
|
Net
sales
USDm
|
Adjusted
EBIT
USDm
|
Adjusted
EBIT /
Sales %
|
Adjusted EBIT /
average funds
employed %
|
Flexibles
|
6,534.6
|
801.3
|
12.3
|
22.9
|
6,566.7
|
817.2
|
12.4
|
20.8
|
Rigid
Packaging
|
2,787.5
|
298.3
|
10.7
|
16.2
|
2,892.7
|
308.2
|
10.7
|
16.8
|
Other
|
(3.0)
|
(43.2)
|
|
|
(1.2)
|
(50.0)
|
|
|
Total
Amcor
|
9,319.1
|
1,056.4
|
11.3
|
19.5
|
9,458.2
|
1,075.4
|
11.4
|
18.7
|
Flexibles
|
FY18 USD
million
|
FY19 USD
million
|
Reported
var%
|
Currency
impact
var%
|
Constant
Currency var%
|
Sales
|
6,534.6
|
6,566.7
|
0.5
|
(4.9)
|
5.4
|
Adjusted
EBIT
|
801.3
|
817.2
|
2.0
|
(4.7)
|
6.7
|
Adjusted EBIT / sales
%
|
12.3
|
12.4
|
|
|
|
Adjusted EBIT /
average funds employed %
|
22.9
|
20.8
|
|
|
|
Net sales increased by 5.4% in constant currency terms, of which
3.3% reflects additional sales from the legacy Bemis business since
11 June 2019. Excluding sales from the legacy Bemis
business, net sales increased by 2.1% in constant currency terms
which includes a 0.9% favourable impact from the pass through of
higher raw material costs.
Adjusted EBIT of $817.2 million
was 6.7% higher than last year in constant currency terms, of which
3.2% reflects additional adjusted EBIT from the legacy Bemis
business since 11 June 2019. Excluding the legacy Bemis
business, adjusted EBIT increased by 3.5% in constant currency
terms which includes approximately $8
million of benefits from businesses acquired in prior
periods net of lower full year earnings from healthcare plants
divested in the United States in
June 2019. Organic growth primarily reflects a combination of
higher sales and strong operating cost performance, the final
benefits from legacy Amcor restructuring initiatives of
approximately $9 million and a
benefit of approximately $5 million
from the normal time lag in recovering higher raw material
costs.
Regional performance(1)
Sales increased in Europe
across a range of end markets including healthcare, pet care,
coffee and ready meals and earnings benefited from prior period
restructuring initiatives. Product mix mainly within the
snacks and confectionary and fresh food end markets was
unfavourable and operating costs in healthcare plants increased in
order to meet stronger than expected sales growth.
In the Americas region, sales were higher than last year in
constant currency terms with continued strong growth in the
healthcare business. Earnings also benefited from additional
contributions from businesses acquired in prior periods net of
lower full year earnings from the plants divested in the United States in June 2019.
In the Asia Pacific region,
sales were higher than last year in constant currency terms mainly
driven by growth across the emerging markets. Operating and
overhead cost performance across the region was significantly
better than last year and included benefits from prior period cost
savings initiatives.
Sales generated from specialty folding carton products were
higher than the prior year in constant currency terms, with good
growth experienced in the Asia and
Americas regions. Earnings benefited from continued growth
within reduced risk product categories in Europe and Asia and strong plant cost performance.
1. Commentary
relates to the legacy Amcor business only.
|
Rigid Packaging
|
FY18 USD
million
|
FY19 USD
million
|
Reported
var%
|
Currency
impact
var%
|
Constant
Currency var%
|
Sales
|
2,787.5
|
2,892.7
|
3.8
|
(1.6)
|
5.4
|
Adjusted
EBIT
|
298.3
|
308.2
|
3.3
|
(1.5)
|
4.8
|
Adjusted EBIT / sales
%
|
10.7
|
10.7
|
|
|
|
Adjusted EBIT /
average funds employed %
|
16.2
|
16.8
|
|
|
|
Net sales increased by 5.4% in constant currency terms which
includes a 3.7% favourable impact from the pass through of higher
raw material costs.
Adjusted EBIT of $308.2 million
was 4.8% higher than last year in constant currency terms which
reflects higher volumes, favourable product mix and benefits from
restructuring initiatives of approximately $8 million.
Adjusted EBIT margins, excluding the sales revenue impact from
passing on higher raw material costs, expanded by approximately 40
bps compared with last year, driven by better mix.
In North America, beverage
volumes were 1% higher than the same period last year.
Product mix was favourable with hot fill container volumes 7%
higher, while combined preform and cold fill container volumes were
4% lower than the prior year. Volume growth across smaller
regional customers continued to be strong throughout the year.
Acquisition benefits in the specialty container business were
offset by disappointing cost performance in two plants and the
closures business was negatively impacted by start up costs at the
recently commissioned plant in Mexico.
In Latin America, volumes were
3% higher than last year, inclusive of lower volumes in
Argentina where economic
conditions adversely impacted consumer demand through the
period. Excluding Argentina, volumes were approximately 10%
higher than last year, reflecting strong growth in Mexico, Colombia and Brazil. The business also
did an outstanding job of managing cost inflation through the year.
Restructuring initiatives
As announced on 21 August 2018, a
restructuring program in the Rigid Packaging reporting segment
commenced in the 2019 fiscal year which includes investments to
optimise the manufacturing footprint, improve productivity and
reduce overhead costs.
Full run rate benefits are now expected to be $20 to $25 million
(previously $15 to $20 million) by the end of the 2021 fiscal year,
representing a return of around 40% on the total cash investment of
approximately $60 to $65 million, of which $33
million was incurred in the current fiscal year.
Excellent progress has been made, and adjusted EBIT for the year
ended 30 June 2019 includes a benefit
of approximately $8
million.
Total after-tax costs are expected to be between $70 million and $80
million (pre-tax $90 million
and $95 million). Of this
amount, approximately $53 million
(pre-tax $64 million) was recognised
in the 2019 fiscal year and is excluded from adjusted
EBIT.
Other
|
|
|
Adjusted
EBIT
|
FY18 USD
million
|
FY19 USD
million
|
Equity earnings in
affiliates, net of tax
|
19.0
|
18.1
|
General corporate
expenses
|
(62.2)
|
(68.1)
|
Total
Other
|
(43.2)
|
(50.0)
|
General corporate expenses of $68.1
million were $5.9 million
higher than last year, including $2.8
million of additional costs from the legacy Bemis business
since 11 June 2019.
Net interest and income tax expense
Net interest expense for the year ended 30 June 2019 was $191.1
million, a $5.8 million
decrease from the $196.9 million
incurred in the prior period.
GAAP income tax expense for the year ended 30 June 2019 was $171.5
million and $118.8 million in
the prior period. Excluding amounts related to non-GAAP
adjustments, adjusted income tax expense for the year ended
30 June 2019 was $148.3 million, in line with $150.8 million in the prior period. The
adjusted effective tax rate of approximately 17% for the current
year was in line with expectations and compares with approximately
17.5% last year.
Cash flow and balance sheet
Adjusted free cash flow (before dividends) was $733.4 million and $90.0
million higher than the prior year primarily due to lower
capital expenditure and strong working capital performance.
The average working capital to sales performance for
the legacy Amcor business was outstanding at 9.0%, compared with
10.6% last year.
Net debt was $5,502 million at 30
June 2019. The increase of $1,274
million compared with last year was mainly driven by the
addition of the legacy Bemis debt facilities.
Leverage, measured as adjusted net debt divided by adjusted
combined EBITDA, was 2.7 times at 30 June 2019.
Dividend
The Amcor Board of Directors today declared a June 2019 quarterly cash dividend of 12.0 US
cents per share. Combined with dividends previously declared
and paid in relation to the 2019 fiscal year, the total 2019
financial year dividend is 45.5 US cents per share.
The dividend will be paid in US dollars to holders of Amcor's
ordinary shares trading on the NYSE. Holders of CDIs trading
on the ASX will receive an unfranked dividend of 17.725 Australian
cents which reflects the quarterly dividend of 12.0 US cents per
share converted at an average AUD:USD exchange rate of 0.6770 over
the five trading days ended 13 August 2019.
The ex-dividend date will be 10 September
2019, the record date will be 11
September 2019 and the payment date will be 8 October
2019. Amcor has received a waiver from the ASX's settlement
operating rules, which will allow Amcor to defer processing
conversions between its ordinary share and CDI registers from
10 September 2019 to 11 September 2019 inclusive.
Going forward, the Board intends to declare dividends on a
quarterly basis.
Supplemental Unaudited Combined Amcor and Bemis 2019
Financial Information
The supplemental Unaudited Combined Financial Information
reflects estimates for Amcor as if the Bemis acquisition took
effect on 1 July 2018.
Key combined financial measures and
ratios(1)
|
Amcor(2)
|
Bemis(3)
|
Adjustments(4)
|
Combined
results
|
Net sales ($
million)
|
9,458.2
|
3,798.2
|
(284.1)
|
12,972.3
|
Adjusted EBITDA ($
million)
|
1,393.9
|
549.9
|
(64.9)
|
1,878.9
|
Adjusted EBIT ($
million)
|
1,075.4
|
405.0
|
(47.8)
|
1,432.6
|
Adjusted Net income
($ million)
|
729.5
|
257.9
|
(40.3)
|
947.1
|
Adjusted EPS (US
cents)
|
|
|
|
58.2
|
Cash flow after
dividends ($ million)
|
192.7
|
101.1
|
(16.7)
|
277.1
|
Leverage, times
(adjusted net debt(5) / Adjusted
EBITDA)
|
|
|
|
2.7
|
Adjusted EBIT / sales
%
|
|
|
|
11.0
|
Adjusted EBIT /
average funds employed(6) %
|
|
|
|
13.0
|
(1) Further
details related to non-GAAP measures are presented below and
reconciliations to GAAP measures can be found in the attached
schedules.
|
(2) Amcor
adjusted financial result as presented throughout this document and
includes adjusted result from the legacy Bemis business from 11
June 2019.
|
(3) Adjusted
financial result of the legacy Bemis business from 1 July 2018 to
10 June 2019.
|
(4) Elimination
of financial results attributable to flexible packaging plants in
Europe and the United States which were required to be sold in
order to secure anti-trust approval for the Bemis
acquisition.
|
(5) Net debt at
30 June 2019 reduced by $394 million of proceeds received during
August 2019 related to the sale of flexible packaging plants in
Europe.
|
(6) Average
funds employed includes shareholders equity and net debt,
calculated using a four quarter average.
|
Unaudited Combined Segment Information
For segment reporting purposes, the legacy Bemis operating
results (US Packaging, Latin America Packaging and Rest of World
Packaging) are included in the Flexibles reporting
segment.
|
FY19
|
|
Net
sales
USDm
|
Adjusted
EBIT
USDm
|
Adjusted
EBIT /
Sales %
|
Flexibles
|
10,080.6
|
1,238.6
|
12.3
|
Rigid
Packaging
|
2,892.7
|
308.2
|
10.7
|
Other(1)
|
(1.0)
|
(114.2)
|
|
Combined
|
12,972.3
|
1,432.6
|
11.0
|
(1) Other
includes equity earnings in affiliates, net of tax of $18.1 million
and General Corporate expenses of $132.3
million.
|
Guidance for 2020 fiscal year
The company expects 2020 to be a transition year as Amcor
integrates the newly acquired Bemis business. Given the
complexities related to the simultaneous acquisition, divestment of
certain healthcare plants required by regulators and balance sheet
refinancing that are a direct result of the transaction, the
company has elected to provide additional guidance metrics for the
2020 fiscal year.
For the 2020 fiscal year, the company expects:
- Adjusted constant currency EPS growth of approximately 5 to 10%
compared with adjusted combined EPS of 58.2 US cents per share in
the 2019 fiscal year.
o Assuming 2019 average
exchange rates, this implies a constant currency EPS range of 61.0
to 64.0 US cents per share.
o This guidance range is
inclusive of pre-tax synergy benefits associated with the Bemis
acquisition of $65 million.
- Cash flow after dividends of between $200 to $300
million, which is after deducting approximately $100 million of cash integration costs.
- The additional guidance metrics for the 2020 fiscal year
are:
o General corporate expenses
in a range of $160 to $170 million in constant currency terms;
o Net interest costs in a
range of $230 to $250 million in constant currency terms; and
o Adjusted effective tax
rate range of 21 to 23 percent.
Conference call
Amcor is hosting a conference call with investors and analysts
to discuss these results today, Tuesday 20
August 2019 at 6.00 pm US
Eastern Daylight Time / Wednesday 21 August
2019 at 8.00 am Australian
Eastern Standard Time. Investors are invited to listen to a live
webcast of the conference call at our website, www.amcor.com, in
the "Investors" section.
Those wishing to access the call should use the following
toll-free numbers, with the Conference ID 9685516:
- US & Canada - 866 211 4133
- Australia - 1800 287 011
- United Kingdom - 0800 051 7107
- Singapore - 800 852 6506
- Hong Kong - 800 901 563
From all other countries, the call can be accessed by dialling
+1 647 689 6614 (toll).
A replay of the audiocast will also be available on
www.amcor.com following the call.
About Amcor
Amcor is a global leader in developing and producing responsible
packaging for food, beverage, pharmaceutical, medical, home- and
personal-care, and other products. Amcor works with leading
companies around the world to protect their products and the people
who rely on them, differentiate brands, and improve value chains
through a range of flexible and rigid packaging, specialty cartons,
closures, and services. The company is focused on making packaging
that is increasingly light-weighted, recyclable and reusable, and
made using a rising amount of recycled content. Around 50,000 Amcor
people generate US$13 billion in
sales from operations that span about 250 locations in 40-plus
countries. NYSE: AMCR; ASX: ASC
www.amcor.com I LinkedIn I
Facebook I Twitter I YouTube
For further information, please contact:
Investors Tracey Whitehead Head of Investor Relations Amcor +61 3 9226
9028 tracey.whitehead@amcor.com
Liz
Cohen Kekst
CNC +1 212 521
4845 liz.cohen@kekstcnc.com
|
Media -
Australia
James Strong
Citadel-MAGNUS +61 448 881 174
jstrong@citadelmagnus.com
|
Media -
Europe Ernesto Duran
Head of Global Communications Amcor +41 78 698
69 40
ernesto.duran@amcor.com
|
Media - North
America Daniel
Yunger Kekst
CNC +1 212 521 4879
daniel.yunger@kekstcnc.com
|
Amcor plc UK
Establishment Address: 83 Tower Road North, Warmley, Bristol,
England, BS30 8XP, United Kingdom
UK Overseas Company Number: BR020803
Registered Office: 3rd Floor, 44 Esplanade, St Helier, JE4 9WG,
Jersey
Jersey Registered Company Number: 126984, Australian Registered
Body Number (ARBN): 630 385 278
|
Cautionary
Statement Regarding Forward-Looking Statements
|
This communication
contains certain statements that are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended. Amcor plc ("Amcor") has
identified some of these forward-looking statements with words like
"believe," "may," "could," "would," "might," "possible," "will,"
"should," "expect," "intend," "plan," "anticipate," "estimate,"
"potential," "outlook" or "continue," the negative of these words,
other terms of similar meaning or the use of future dates. Such
statements are based on the current expectations of the management
of Amcor, as applicable, are qualified by the inherent risks and
uncertainties surrounding future expectations generally, and actual
results could differ materially from those currently anticipated
due to a number of risks and uncertainties. None of Amcor or any of
its respective directors, executive officers or advisors, provide
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statements
will actually occur. Risks and uncertainties that could cause
results to differ from expectations include, but are not limited
to: failure to realize the anticipated benefits of the acquisition
of Bemis Company, Inc. ("Bemis"), and the cost synergies related
thereto; failure to successfully integrate Bemis' business
and operations in the expected time frame or at all; integration
costs related to the acquisition of Bemis; the loss of key
customers or a reduction in production requirements of key
customers; fluctuations in consumer demand patterns; significant
competition in the industires and regions in which Amcor operates;
Amcor's inability to expand its business; the potential loss of
intellectual property rights; price fluctuations or shortages in
the availability of raw materials, energy and other inputs;
disruptions to production and supply; costs and liabilities related
to current and future environmental, health and safety regulations;
the possibility of labor disputes; uncertainties related to future
dividend payments and share buy-backs; fluctuations in our credit
ratings; other risks related to the business, including the effects
of industry, economic or political conditions, legal and regulatory
proceedings, interest rates, exchange rates and international
operations; disruptions to the financial or capital markets; and
other risks and uncertainties discussed in Amcor's disclosures to
the Australian Securities Exchange ("ASX"), including the "2018
Principal Risks" section of Amcor's Annual Report 2018; and other
risks and uncertainties discussed in Amcor and Bemis' filings with
the U.S. Securities and Exchange Commission (the "SEC"), including
the "Risk Factors" section of Amcor's Registration Statement on
Form S-4 filed on March 25, 2019 and the "Risk Factors" section of
Bemis' annual report on Form 10-K for the fiscal year ended
December 31, 2018. You can obtain copies of Amcor's disclosures to
the ASX for free at ASX's website (www.asx.com.au). You can obtain
copies of Amcor and Bemis' filings with the SEC for free at the
SEC's website (www.sec.gov). Forward-looking statements included
herein are made only as of the date hereof and Amcor does not
undertake any obligation to update any forward-looking statements,
or any other information in this communication, as a result of new
information, future developments or otherwise, or to correct any
inaccuracies or omissions in them which become apparent, except as
expressly required by law. All forward-looking statements in this
communication are qualified in their entirety by this cautionary
statement.
|
On-market share
buy-back
|
Under the buy-back,
any repurchases will be effected in accordance with Amcor plc's
general authority to repurchase shares and CDIs established and in
accordance with all relevant legal and regulatory
requirements. Management has not set a time limit for
completing the buy-back, the company is not obliged to make any
repurchases and the buy-back may be suspended for periods or
discontinued at any time.
|
Amcor and Bemis
combination
|
On 11 June 2019, the
all-stock acquisition of Bemis Company, Inc. was completed under
the terms of the agreement announced on 6 August 2018. Pursuant to
that agreement, Bemis shareholders received 5.1 Amcor shares for
each Bemis share held and Amcor Limited shareholders received one
Australian Securities Exchange listed CHESS Depositary Instrument
for each share held. As a result of these share exchanges,
the assets of both Amcor Limited and Bemis were merged into Amcor,
and Amcor was determined to be the acquirer for accounting
purposes. As a result, the historical financial statements of
Amcor, prepared under U.S. generally accepted accounting principles
("U.S. GAAP"), for the periods prior to the combination are
considered to be the historical financial statements of Amcor
Limited.
|
Basis of
Preparation of Supplemental Unaudited Combined Financial
Information
|
In order to provide
the most meaningful comparison of results of operations and results
by reporting segment, the Company has included Supplemental
Unaudited Combined Financial Information, which combines Amcor and
Bemis historical operating results and has been prepared to
illustrate the effects of the combination, assuming the combination
had been consummated on 1 July 2018. The Supplemental Unaudited
Combined Financial Information includes adjustments for (1)
accounting policy alignment, (2) elimination of the effect of
events that are directly attributable to the combination (e.g.,
one-time transaction costs), elimination of the effect of
consummated and identifiable divestitures agreed to with certain
regulatory agencies as a condition of approval for the transaction,
and (4) items which management considers are not representative of
ongoing operations. The Supplemental Unaudited Combined Financial
Information does not include the preliminary purchase accounting
impact, which has not been finalised at the date of the release and
does not reflect any cost or growth synergies that Amcor may
achieve as a result of the transaction, future costs to combine the
operations of Amcor and Bemis or the costs necessary to achieve any
cost or growth synergies. The Supplemental Unaudited Combined
Financial Information has been presented for informational purposes
only and is not necessarily indicative of what Amcor's results of
operations actually would have been had the combination been
completed as of 1 July 2018, nor is it indicative of the future
operating results of Amcor. The Supplemental Unaudited Combined
Financial Information should be read in conjunction with the
separate historical financial statements and accompanying notes
contained in each of the Amcor and Bemis periodic reports, as
available. For avoidance of doubt, the Supplemental Unaudited
Combined Financial Information is not intended to be, and was not,
prepared on a basis consistent with the unaudited condensed
combined financial information in Amcor's Registration Statement on
Form S-4 filed March 25, 2019 with the SEC (the "S-4 Pro Forma
Statements"), which provides the pro forma financial information
required by Article 11 of Regulation S-X. For instance, the
Supplemental Unaudited Combined Financial Information does
not give effect to the combination under the acquisition
method of accounting in accordance with Financial Accounting
Standards Board ("FASB") Accounting Standard Codification Topic
805, Business Combinations ("ASC Topic 805"), with Amcor
treated as the legal and accounting acquirer. The Supplemental
Unaudited Combined Financial Information has not been adjusted
to give effect to pro forma events that are (1) directly
attributable to the combination, (2) factually supportable, or
(3) expected to have a continuing impact on the combined
results of Amcor and Bemis. More specifically, other than excluding
Amcor's divested plants and one-time transaction costs, the
Supplemental Unaudited Combined Financial Information does not
reflect the types of pro forma adjustments set forth in S-4 Pro
Forma Statements. Consequently, the Supplemental Unaudited Combined
Financial Information is intentionally different from, but does not
supersede, the pro forma financial information set forth in S-4 Pro
Forma Statements.
|
Presentation of
non-GAAP financial information
|
Included in this
announcement are measures of financial performance that are not
calculated in accordance with U.S. GAAP. These measures
include adjusted EBITDA (calculated as earnings before interest,
tax, depreciation and amortisation), adjusted EBIT (calculated as
earnings before interest and tax), earnings per share, adjusted
free cash flow, adjusted cash flow after dividends, net debt and
the Supplemental Unaudited Combined Financial Information including
adjusted earnings before interest, tax, amortisation and
depreciation, adjusted earnings before interest and tax, and
adjusted earnings per share and any ratios related thereto.
In arriving at these non-GAAP measures, we exclude items that
either have a non-recurring impact on the income statement or
which, in the judgment of our management, are items that, either as
a result of their nature or size, could, were they not singled out,
potentially cause investors to extrapolate future performance from
an improper base. While not all inclusive, examples of these items
include:
• material
restructuring programs, including associated costs such as employee
severance, pension and related benefits, impairment of property and
equipment and other assets, accelerated depreciation, termination
payments for contracts and leases, contractual obligations and any
other qualifying costs related to the restructuring plan;
• earnings from discontinued operations and any associated profit
on sale of businesses or subsidiaries;
• consummated and identifiable divestitures agreed to with certain
regulatory agencies as a condition of approval for Amcor's
acquisition of Bemis;
• impairments in goodwill and equity method investments;
• material acquisition compensation and transaction costs such as
due diligence expenses, professional and legal fees and integration
costs;
• material purchase accounting adjustments for inventory;
• amortization of acquired intangible assets from business
combinations;
• impact of economic net investment hedging activities not
qualifying for hedge accounting;
• payments or settlements related to legal claims; and
• impacts from hyperinflation accounting.
|
Management has used
and uses these measures internally for planning, forecasting and
evaluating the performance of the company's reporting segments and
certain of the measures are used as a component of Amcor's board of
directors' measurement of Amcor's performance for incentive
compensation purposes. Amcor also evaluates performance on a
constant currency basis, which measures financial results assuming
constant foreign currency exchange rates used for translation based
on the rates in effect for the comparable prior-year period. In
order to compute constant currency results, we multiply or divide,
as appropriate, current-year U.S. dollar results by the
current-year average foreign exchange rates and then multiply or
divide, as appropriate, those amounts by the prior-year average
foreign exchange rates. Amcor believes that these non-GAAP measures
are useful to enable investors to perform comparisons of current
and historical performance of the company. For each of these
non-GAAP financial measures, a reconciliation to the most directly
comparable U.S. GAAP financial measure has been provided herein.
These non-GAAP financial measures should not be construed as an
alternative to results determined in accordance with U.S.
GAAP. The company provides guidance on a non-GAAP basis
as we are unable to predict with reasonable certainty the ultimate
outcome and timing of certain significant items without
unreasonable effort. These items include but are not limited
to the impact of foreign exchange translation, restructuring
program costs, asset impairments, possible gains and losses on the
sale of assets and certain tax related events. These items
are uncertain, depend on various factors and could have a material
impact on U.S. GAAP earnings and cash flow measures for the
guidance period.
|
U.S. GAAP condensed consolidated statement of income
|
Year ended 30
June
|
(USD
million)
|
2018
|
2019
|
Net sales
|
9,319.1
|
9,458.2
|
Cost of
sales
|
(7,462.3)
|
(7,659.1)
|
Gross
profit
|
1,856.8
|
1,799.1
|
Selling, general and
administrative expenses
|
(793.2)
|
(999.0)
|
Research and
development costs
|
(72.7)
|
(64.0)
|
Restructuring and
other costs
|
(40.2)
|
(130.8)
|
Other income,
net
|
43.2
|
186.4
|
Operating
income
|
993.9
|
791.7
|
Interest expense,
net
|
(196.9)
|
(191.1)
|
Other non operating
income (expense)
|
(74.1)
|
3.5
|
Income from
continuing operations before income taxes
|
722.9
|
604.1
|
Income tax
expense
|
(118.8)
|
(171.5)
|
Equity in earnings of
affiliates, net of tax
|
(17.5)
|
4.1
|
Income from
continuing operations
|
586.6
|
436.7
|
Income/(loss) from
discontinued operations, net of tax(1)
|
-
|
0.7
|
Net income
|
586.6
|
437.4
|
Net income
attributable to non controlling interests
|
(11.4)
|
(7.2)
|
Net income
attributable to Amcor plc
|
575.2
|
430.2
|
USD:EUR FX
rate
|
0.8383
|
0.8767
|
|
|
|
Basic earnings per
share attributable to Amcor
|
49.7
|
36.4
|
Diluted earnings per
share attributable to Amcor
|
49.4
|
36.3
|
Weighted average
number of shares outstanding – Basic
|
1,154.4
|
1,180.3
|
Weighted average
number of shares outstanding - Diluted
|
1,161.7
|
1,183.8
|
|
Included in Amcor's
U.S. GAAP results for the year ended 30 June 2019, are the
following contributions from the legacy Bemis
business since 11 June 2019:
|
|
USD
million
|
Net sales
|
|
215.4
|
Operating
income
|
|
(10.4)
|
Net income
|
|
(13.1)
|
(1) Represents
income generated from three former Bemis plants located in the
United Kingdom and Ireland since 11 June 2019. Amcor
announced the disposal of these assets to Kohlberg & Company on
25 June 2019 and the transaction closed on 8 August 2019. This
divestment was required by the European Commission at the time of
approving Amcor's acquisition of Bemis on 11 February
2019.
|
U.S. GAAP condensed consolidated statement of cash
flows
|
Year ended 30
June
|
(USD
million)
|
2018
|
2019
|
Net income
|
586.6
|
437.4
|
Depreciation,
amortisation and impairment
|
357.1
|
453.0
|
Changes in working
capital
|
(122.5)
|
6.7
|
Other non-cash
items
|
50.2
|
(121.0)
|
Net cash provided
from operating activities
|
871.4
|
776.1
|
Purchase of property,
plant and equipment and other intangible assets
|
(365.0)
|
(332.2)
|
Business
acquisitions, net of acquired cash and investments in affiliated
companies
|
(13.2)
|
41.9
|
Proceeds from sale of
property, plant and equipment and other intangible
assets
|
137.0
|
84.7
|
Proceeds from sale of
affiliated companies and subsidiaries
|
-
|
216.3
|
Net debt
(repayments)/proceeds
|
34.3
|
(57.8)
|
Dividends
|
(526.8)
|
(679.7)
|
Other, including
effects of exchange rate on cash
|
(78.4)
|
(68.5)
|
Net
increase/(decrease) in cash and cash equivalents
|
59.3
|
(19.2)
|
Cash and cash
equivalents at the beginning of the period
|
561.5
|
620.8
|
Cash and cash
equivalents at the end of the period
|
620.8
|
601.6
|
U.S. GAAP condensed consolidated balance sheet
(USD
million)
|
30 June
2018
|
30 June
2019
|
Cash and cash
equivalents
|
620.8
|
601.6
|
Receivables
|
1,379.0
|
1,864.3
|
Inventories
|
1,358.8
|
1,953.8
|
Assets held for
sale(1)
|
-
|
416.1
|
Property, plant and
equipment
|
2,698.5
|
3,975.0
|
Goodwill and
intangible assets
|
2,381.4
|
7,462.8
|
Other
assets
|
619.0
|
891.4
|
Total
assets
|
9,057.5
|
17,165.0
|
Payables
|
1,861.0
|
2,303.4
|
Short term debt and
current portion of long term debt
|
2,157.9
|
794.2
|
Long term
debt
|
2,690.4
|
5,309.0
|
Liabilities held for
sale(1)
|
-
|
20.9
|
Accruals and other
liabilities
|
1,652.8
|
3,062.8
|
Shareholders
equity
|
695.4
|
5,674.7
|
Total liabilities and
shareholders equity
|
9,057.5
|
17,165.0
|
(1) Represents
the net asset value related to three former Bemis plants located in
the United Kingdom and Ireland. Amcor announced the disposal
of these assets to Kohlberg & Company on 25 June 2019 and the
transaction closed on 8 August 2019. This divestment was required
by the European Commission at the time of approving Amcor's
acquisition of Bemis on 11 February 2019.
|
Reconciliation of non-GAAP measures
Reconciliation of adjusted Earnings before interest, tax,
depreciation and amortisation (EBITDA), Earnings before interest
and tax (EBIT), Net income and Earnings per share (EPS)
|
Year ended 30 June
2018
|
Year ended 30 June
2019
|
(USD
million)
|
EBITDA
|
EBIT
|
Net
income
|
EPS
(cents)
|
EBITDA
|
EBIT
|
Net
income
|
EPS
(cents)
|
Net income
attributable to Amcor
|
575.2
|
575.2
|
575.2
|
49.4
|
430.2
|
430.2
|
430.2
|
36.3
|
Net income
attributable to non controlling interests
|
11.4
|
11.4
|
|
|
7.2
|
7.2
|
|
|
(Income) / loss from
discontinued operations
|
-
|
-
|
|
|
(0.7)
|
(0.7)
|
|
|
Tax
expense
|
118.8
|
118.8
|
|
|
171.5
|
171.5
|
|
|
Interest expense,
net
|
196.9
|
196.9
|
|
|
191.1
|
191.1
|
|
|
Depreciation and
amortisation
|
352.7
|
|
|
|
349.6
|
|
|
|
EBITDA, EBIT, Net
income and EPS
|
1,255.0
|
902.3
|
575.2
|
49.4
|
1,148.9
|
799.3
|
430.2
|
36.3
|
Material
restructuring and related costs
|
14.4
|
14.4
|
14.4
|
1.2
|
64.1
|
64.1
|
64.1
|
5.4
|
Impairment in equity
method investments
|
36.5
|
36.5
|
36.5
|
3.1
|
14.0
|
14.0
|
14.0
|
1.2
|
Net investment hedge
not qualifying for hedge accounting
|
83.9
|
83.9
|
83.9
|
7.2
|
(1.4)
|
(1.4)
|
(1.4)
|
(0.1)
|
Material transaction
and other costs(1)
|
-
|
-
|
-
|
-
|
143.1
|
143.1
|
143.1
|
12.1
|
Material impact of
hyperinflation
|
-
|
-
|
-
|
-
|
30.2
|
30.2
|
30.2
|
2.6
|
Net legal
settlements
|
-
|
-
|
-
|
-
|
(5.0)
|
(5.0)
|
(5.0)
|
(0.4)
|
Amortisation of
acquired intangibles
|
-
|
19.3
|
19.3
|
1.7
|
-
|
31.1
|
31.1
|
2.6
|
Tax effect of above
items
|
|
|
(32.0)
|
(2.7)
|
|
|
23.2
|
2.0
|
Adjusted EBITDA,
EBIT, Net income and EPS
|
1,389.8
|
1,056.4
|
697.3
|
60.0
|
1,393.9
|
1,075.4
|
729.5
|
61.6
|
(1) Includes
costs associated with the Bemis acquisition.
|
Reconciliation of adjusted EBIT by reporting segment
|
Year ended 30 June
2018
|
Year ended 30 June
2019
|
(USD
million)
|
Flexibles
|
Rigid
Packaging
|
Other(1)
|
Total
|
Flexibles
|
Rigid
Packaging
|
Other(1)
|
Total
|
|
Net income
attributable to Amcor
|
|
|
|
575.2
|
|
|
|
430.2
|
|
Net income
attributable to non controlling interests
|
|
|
|
11.4
|
|
|
|
7.2
|
|
(Income) / loss from
discontinued operations
|
|
|
|
-
|
|
|
|
(0.7)
|
|
Tax
expense
|
|
|
|
118.8
|
|
|
|
171.5
|
|
Interest expense,
net
|
|
|
|
196.9
|
|
|
|
191.1
|
|
EBIT
|
772.8
|
293.1
|
(163.6)
|
902.3
|
800.7
|
209.1
|
(210.5)
|
799.3
|
|
Material
restructuring and related costs
|
14.4
|
-
|
-
|
14.4
|
-
|
64.1
|
-
|
64.1
|
|
Impairment in equity
method investments
|
-
|
-
|
36.5
|
36.5
|
-
|
-
|
14.0
|
14.0
|
|
Net investment hedge
not qualifying for hedge accounting
|
-
|
-
|
83.9
|
83.9
|
-
|
-
|
(1.4)
|
(1.4)
|
|
Material transaction
and other costs
|
-
|
-
|
-
|
-
|
(12.8)
|
3.0
|
152.9
|
143.1
|
|
Material impact of
hyperinflation
|
-
|
-
|
-
|
-
|
3.5
|
26.7
|
-
|
30.2
|
|
Net legal
settlements
|
-
|
-
|
-
|
-
|
-
|
-
|
(5.0)
|
(5.0)
|
|
Amortisation of
acquired intangibles
|
14.1
|
5.2
|
-
|
19.3
|
25.8
|
5.3
|
-
|
31.1
|
|
Adjusted
EBIT
|
801.3
|
298.3
|
(43.2)
|
1,056.4
|
817.2
|
308.2
|
(50.0)
|
1,075.4
|
|
Adjusted EBIT /
sales %
|
12.3
|
10.7
|
|
11.3
|
12.4
|
10.7
|
|
11.4
|
|
Averaged funds
employed(2) (last 12 months)
|
3,492
|
1,843
|
|
5,419
|
3,933
|
1,830
|
|
5,738
|
|
Adjusted EBIT /
average funds employed %
|
22.9
|
16.2
|
|
19.5
|
20.8
|
16.8
|
|
18.7
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other
includes equity earnings in affiliates, net of tax and General
corporate expenses.
|
(2) Average
funds employed includes shareholders equity and net debt,
calculated using a 12 month average.
|
Reconciliation of adjusted free cash flow and cash flow after
dividends
(USD
million)
|
30 June
2018
|
30 June
2019
|
Net cash provided
from operating activities
|
871.4
|
776.1
|
Net capital
expenditure
|
(228.0)
|
(247.5)
|
Material transaction
related costs(1)
|
-
|
204.8
|
Adjusted free cash
flow (before dividends)(2)
|
643.4
|
733.4
|
Dividends
|
(526.8)
|
(679.7)
|
Add back pro-rata
dividend payment(3)
|
-
|
139.0
|
Adjusted cash flow
after dividends(2)
|
116.6
|
192.7
|
(1) Transaction
costs related to the Bemis acquisition.
|
(2) Adjusted
free cash flow excludes material transaction related costs because
these cash flows are not considered to be directly related to the
underlying business. Cash flow after dividends excludes material
transaction related costs and payment of pro-rata dividends because
these cash flows are not considered to be directly related to the
underlying business and/or are non-recurring.
|
(3) Amcor paid
a pro-rata dividend of 12.0 US cents per share on 13 May 2019 to
cover the March 2019 quarter. This pro-rata dividend aligned
the period over which dividends had been paid to Amcor and Bemis
shareholders prior to completion of the acquisition.
|
Reconciliation of net debt
(USD
million)
|
30 June
2018
|
30 June
2019
|
Cash and cash
equivalents
|
(620.8)
|
(601.6)
|
Short term
debt
|
1,173.8
|
788.8
|
Current portion of
long term debt
|
984.1
|
5.4
|
Long term debt
excluding current portion of long term debt
|
2,690.4
|
5,309.0
|
Net
debt
|
4,227.5
|
5,501.6
|
Proceeds from sale of
businesses(1)
|
-
|
(394.0)
|
Adjusted net
debt
|
4,227.5
|
5,107.6
|
(1) Proceeds
received on 8 August 2019 related to the sale of flexible packaging
plants in Europe.
|
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SOURCE Amcor plc