ZURICH, Switzerland,
Feb. 11, 2020 /PRNewswire/ -- Amcor
(NYSE: AMCR, ASX: AMC) today reported results for the six months
ended December 31, 2019.
First Half Fiscal 2020 Highlights(1)
- GAAP net income of $252 million
and earnings per share (EPS) of 15.5
cents per share;
- Adjusted EBIT of $699 million, up
4.4% in constant currency terms;
- Adjusted EPS of 29.2 cents per
share, up 10.7% in constant currency terms;
- Quarterly dividend of 11.5 cents
per share declared today;
- Total cash returns to shareholders of more than $600 million, including the repurchase of 21.9
million shares;
- Integration of the Bemis business progressing well, with
approximately $30 million of pre-tax
synergy benefits delivered in the first half of fiscal 2020 and
outlook for fiscal 2020 pre-tax synergy benefits increased to
$80 million; remain on track to
deliver $180 million of total pre-tax
synergy benefits over three years; and
- Fiscal 2020 outlook for adjusted EPS growth in constant
currency terms improved to 7-10%.
Amcor's CEO Mr Ron Delia said:
"Amcor delivered a good first half result and our outlook for
fiscal 2020 adjusted EPS growth has improved to 7-10%. The
integration of the Bemis business is on track and the combined
flexible packaging business has achieved mid-single digit organic
growth in addition to the delivery of synergy benefits. We are
making very good progress capturing synergies with momentum
building ahead of our initial expectations and we are excited by
the opportunities for the combined business as we look ahead."
"Amcor's financial profile remains strong and will be enhanced
further as we realize the full financial benefits from the Bemis
acquisition. With over $1
billion of annual free cash flow, we are well placed to
generate strong returns for shareholders by simultaneously
investing in our core business, paying a compelling dividend,
buying back shares and growing through acquisitions."
"Today, Amcor is the global leader in consumer packaging with
differentiated commercial and innovation capabilities, unparalleled
scale and a global footprint. These powerful competitive
advantages uniquely position us to serve our customers and to
develop packaging solutions that are more sustainable and better
for the environment."
Key Financials(1)
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Half Year Ended
December 31,
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GAAP
results
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2018
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2019
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Net sales
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|
|
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4,546
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6,184
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Net income
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237
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252
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EPS (diluted US
cents)
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20.4
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15.5
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Half Year Ended
December 31,
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Reported
∆%
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|
Constant
Currency ∆%
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Adjusted non-GAAP
results
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Combined
2018
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2019
|
|
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Net sales
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6,429
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6,184
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(3.8)
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(2.4)
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EBIT
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678
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699
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3.1
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4.4
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Net income
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435
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473
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8.8
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10.3
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EPS (diluted US
cents)
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26.8
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29.2
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9.2
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10.7
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(1) GAAP
results for the prior year reflects the legacy Amcor business only.
Adjusted non-GAAP measures exclude items which management considers
as not representative of ongoing operations. Adjusted non-GAAP
results for the prior period are based on unaudited combined
financial information. Full 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.
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Note: All amounts
referenced throughout this document are in US dollars unless
otherwise indicated and numbers may not add up precisely to the
totals provided due to rounding.
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Presentation of Prior Year Financial Information
On June 11, 2019, the all-stock
acquisition of Bemis Company, Inc. was completed. Amcor was
determined to be the acquirer for accounting purposes and as a
result, financial information prepared under U.S. generally
accepted accounting principles ("U.S. GAAP") for periods prior to
the completion date reflects the historical financial information
for the legacy Amcor business only.
Financial information included in this release and described as
"Combined" represents the addition of Amcor and Bemis individual
adjusted results for the half year ended December 31, 2018, after deducting for the
required divestiture of certain flexible plants in Europe and the
United States. See "Basis of Preparation of Supplemental
Unaudited Combined Financial Statements" in this release for full
details.
Bemis Acquisition Update
Integration of the Bemis business continues to progress well,
with momentum building in the first half of fiscal 2020.
The company delivered approximately $30
million (pre-tax) of cost synergies primarily from overhead
and procurement initiatives in the first half. Cost synergies have
been realized faster than our initial expectations, and as a
result, synergy benefits are now expected to reach approximately
$80 million (pre-tax) in fiscal 2020
(previously $65 million).
We remain on track to achieve the previously announced benefits
of $180 million (pre-tax) by the end
of fiscal 2022.
Cash restructuring and integration costs of approximately
$45 million were incurred in the
first half of fiscal 2020. Total cash integration costs are
estimated to be $150 million, with
approximately $100 million expected
to be incurred in fiscal 2020.
Capital Returns to Shareholders
$500 Million On-Market Share
Buy-Back
Amcor repurchased 21.9 million shares during the first half of
fiscal 2020 for a total cost of $223
million. The company expects to complete the
$500 million buy-back program by the
end of fiscal 2020.
Dividend
The Amcor Board of Directors today declared a quarterly cash
dividend of 11.5 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 17.1
Australian cents per share, which reflects the quarterly dividend
of 11.5 cents per share converted at
an average AUD:USD exchange rate of 0.6739 over the five trading
days ended February 3, 2020.
The ex-dividend date will be March 3,
2020, the record date will be March
4, 2020 and the payment date will be March 24, 2020. 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 March 3, 2020 to
March 4, 2020, inclusive.
First Half Financial
Results(1)
Segment Information
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Combined
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Half Year Ended
December 31, 2018
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Half Year Ended
December 31, 2019
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Adjusted
Financial
Results
|
|
Net
sales
$ million
|
|
EBIT
$ million
|
|
EBIT /
Sales
%
|
|
EBIT / Average
funds employed
%(2)
|
|
Net
sales $
million
|
|
EBIT $
million
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EBIT /
Sales
%
|
|
EBIT / Average
funds employed
%(2)
|
Flexibles
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5,025
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582
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11.6
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14.2
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4,846
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620
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12.8
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14.4
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Rigid
Packaging
|
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1,404
|
|
|
149
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10.6
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17.7
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1,340
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130
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9.7
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16.5
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Other
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(1)
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(52)
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(2)
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(51)
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Total
Amcor
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6,429
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678
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10.6
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13.4
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6,184
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699
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11.3
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13.8
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(1) Adjusted
non-GAAP measures exclude items which management considers as not
representative of ongoing operations. Adjusted non-GAAP results for
the prior period are based on unaudited combined financial
information. 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.
|
(2) Average funds
employed includes shareholders equity and net debt, calculated
using a four quarter average and LTM adjusted EBIT.
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Net sales for the Amcor group of $6,184
million were 1.4% lower than the prior period in constant
currency terms after excluding a 1.0% unfavorable impact from the
pass through of lower raw material costs.
Flexibles
|
|
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|
|
|
|
|
|
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Half Year Ended
December 31,
|
|
Reported
∆%
|
|
Constant
Currency ∆%
|
|
|
Combined
2018
|
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2019
|
|
|
Net sales
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5,025
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4,846
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(3.6)
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(2.0)
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Adjusted
EBIT
|
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582
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|
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620
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6.6
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8.0
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Adjusted EBIT / Sales
%
|
|
11.6
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|
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12.8
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|
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|
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Adjusted EBIT /
Average funds employed %
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14.2
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14.4
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Flexibles segment net sales were 1.4% lower than the prior
period in constant currency terms after excluding a 0.6%
unfavorable impact from the pass through of lower raw material
costs. Volumes grew modestly across the Flexibles North
America and Flexibles Europe, Middle
East and Africa businesses,
offset by lower volumes and unfavorable mix in the Flexibles Latin
America and Specialty Cartons businesses.
Adjusted EBIT of $620 million was
8% higher than last year in constant currency terms and includes
approximately $20 million (or 3%) of
synergy benefits related to the Bemis acquisition. The
remaining 5% organic growth reflects strong cost performance and
year over year benefits from the normal time lag in recovering raw
material cost movements, partly offset by the unfavorable earnings
impact of lower sales.
Adjusted EBIT margins of 12.8% increased 120 bps compared to the
prior year period.
In Europe, volumes grew across
a range of end markets including protein, dairy, pet care, coffee,
medical and ready meals. Earnings also benefited from delivery
of synergies and overall operating cost performance.
In North America, volumes grew
in the high value protein, liquids and healthcare segments and
operating cost performance was strong. Delivery of synergy
benefits gained momentum throughout the first half and long term
commitments have been secured with a number of large customers
during the period, reflecting the strength of Amcor's enhanced
value proposition.
In Latin America, volumes were
lower reflecting challenging economic conditions across the region
and the impact of volumes lost within the legacy Bemis business
prior to the acquisition close. This was partly offset by the
delivery of synergy benefits. The company has also taken steps
to simplify the portfolio in Latin
America with the sale of its interest in a tube laminate
joint venture.
In Asia Pacific, volumes were
higher across the emerging markets of India, China
and South East Asia, with
India performing particularly well
as volumes ramped up in a new greenfield plant. Earnings were
favorably impacted by the delivery of synergy benefits and strong
operating cost performance.
Net sales generated from specialty folding carton products were
lower than the prior period due to weaker volumes in Europe, and in particular in Eastern Europe where there was an increase in
the prevalence of illicit trade as well as customer
destocking. This was partly offset by higher earnings in the
Asia and Americas regions and
continued growth in reduced risk product categories.
Rigid
Packaging
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|
|
|
|
|
|
|
|
Half Year Ended
December 31,
|
|
Reported
∆%
|
|
Constant
Currency ∆%
|
|
|
2018
|
|
2019
|
|
|
Net sales
|
|
1,404
|
|
|
1,340
|
|
|
(4.6)
|
|
|
(4.0)
|
|
Adjusted
EBIT
|
|
149
|
|
|
130
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(12.5)
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|
(11.9)
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|
Adjusted EBIT / Sales
%
|
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10.6
|
|
|
9.7
|
|
|
|
|
|
Adjusted EBIT /
Average funds employed %
|
|
17.7
|
|
|
16.5
|
|
|
|
|
|
Rigid Packaging segment net sales were 1.6% lower than the prior
period in constant currency terms after excluding a 2.4%
unfavorable impact from the pass through of lower raw material
costs, with no impact from volumes but unfavorable mix compared to
the prior year.
Adjusted EBIT of $130 million was
lower against a particularly strong comparative period, which was
highlighted in our first quarter results. We anticipate a
return to profit growth for the Rigid Packaging segment in the
second half of fiscal 2020.
In North America, earnings were
lower in the current period as overall mix was unfavorable in both
beverage and specialty containers, which also led to higher
costs. This compares to the prior period which benefited from
exceptionally strong mix. Beverage volumes were 0.2% lower
than last year with hot fill container volumes up 4% despite a
strong comparative period, driven by market growth and share gains
as a range of customers launch new products in the PET format.
In Latin America, volumes were
2% higher compared with the first half of last year, however
earnings were lower than the strong result achieved in the prior
period. This reflects unfavorable mix across the portfolio and
lower earnings in Argentina where
the early recovery of cost inflation benefited the second quarter
result last year.
Other
|
|
|
|
|
|
|
Half Year Ended
December 31,
|
Adjusted
EBIT
|
|
Combined
2018
|
|
2019
|
Equity earnings in
affiliates, net of tax
|
|
7
|
|
|
5
|
|
Corporate
expenses
|
|
(59)
|
|
|
(55)
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Total
Other
|
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(52)
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|
(51)
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|
Corporate expenses of $55 million
include approximately $10 million of
synergy benefits related to the Bemis acquisition.
Net interest and income tax expense
Net interest expense for the six months ended December 31, 2019 was $99
million compared with combined net interest expense of
$138 million in the prior period and
primarily reflects benefits from lower borrowing costs as several
long dated fixed rate facilities matured during the
half.
GAAP income tax expense for the six months ended December 31, 2019 was $67
million. Excluding amounts related to non-GAAP
adjustments, adjusted income tax expense for the six months ended
December 31, 2019 was $123 million, representing an effective tax rate
of 20.5%.
Cash flow and balance sheet
Adjusted free cash flow (before dividends) was $310 million and includes the impact of higher
cash earnings and improved working capital performance offset by
higher net capital expenditure.
Net debt was $5,537 million at
December 31, 2019, broadly in line
with net debt as of June 30,
2019. Leverage, measured as net debt divided by adjusted
trailing twelve month EBITDA, was 2.9 times as of December 31, 2019.
Fiscal 2020 Outlook
The company expects:
- Adjusted constant currency EPS growth in fiscal 2020 of
approximately 7-10% (previously 5-10%).
- Compared with adjusted combined EPS of 58.2 US cents per share
in fiscal 2019 and assuming fiscal 2019 average exchange rates,
this implies a constant currency EPS range of 62.0 - 64.0 US cents
per share (previously 61.0 - 64.0 US cents per share).
- Assuming average exchange rates for the first half of fiscal
2020 prevail for the remainder of the year, currency would have an
unfavorable impact on reported EPS of approximately one US cent per
share.
- This range includes anticipated pre-tax synergy benefits
associated with the Bemis acquisition of approximately $80 million (previously $65 million).
- Free cash flow (before dividends) of over $1 billion before approximately $100 million of cash integration costs.
- Equivalent to $300 - $400 million after dividends but before cash
integration costs.
The company also expects:
- Corporate expenses before synergies of $160 - $170 million
in constant currency terms;
- Net interest costs of $210 -
$230 million (previously $230 - $250
million) in constant currency terms; and
- Adjusted effective tax rate of 21% - 23%.
Conference Call
Amcor is hosting a conference call with investors and analysts
to discuss these results Tuesday, February
11, 2020 at 5:30 pm US Eastern
Time / February 12, 2020 at
9.30 am Australian Eastern Daylight
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 1837796:
- 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 dialing +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 supply 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 an increasing amount of recycled content. Around 50,000
Amcor people generate $13 billion in
sales from operations that span about 250 locations in 40-plus
countries. NYSE: AMCR; ASX: AMC
www.amcor.com I LinkedIn I
Facebook I Twitter I YouTube
Contact Information
Investors
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Tracey
Whitehead
|
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Damien
Bird
|
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Jay
Koval
|
Head of Investor
Relations
|
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Vice President
Investor Relations
|
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Vice President
Investor Relations
|
Amcor
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Amcor
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Amcor
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+61 3 9226
9028
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+61 3 9226
9070
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+1 224 313
7127
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tracey.whitehead@amcor.com
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damien.bird@amcor.com
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jay.koval@amcor.com
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Media -
Australia
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Media -
Europe
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Media - North
America
|
James
Strong
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Ernesto
Duran
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Daniel
Yunger
|
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Head of Global
Communications
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Citadel-MAGNUS
|
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Amcor
|
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Kekst CNC
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+61 448 881
174
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+41 78 698 69
40
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+1 212 521
4879
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jstrong@citadelmagnus.com
|
|
ernesto.duran@amcor.com
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daniel.yunger@kekstcnc.com
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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 and are qualified by the
inherent risks and uncertainties surrounding future expectations
generally. 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 and projections made herein
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 industries and regions in which Amcor operates;
failure by Amcor 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 identified from time to time in
Amcor's filings with the U.S. Securities and Exchange Commission
(the "SEC"), including without limitation, those described under
Item 1A. "Risk Factors" of Amcor's annual report on Form 10-K and
in Amcor's quarterly reports on Form 10-Q. You can obtain copies of
Amcor's 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. The company may not complete the
buy-back on the estimated timeline, 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 June 11, 2019, the all-stock
acquisition of Bemis Company, Inc. was completed under the terms of
the agreement announced on August 6,
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 July 1, 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), (3) 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 finalized 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 July 1, 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 EBIT (calculated as
earnings before interest and tax), adjusted net income, adjusted
earnings per share, adjusted free cash flow before dividends,
adjusted cash flow after dividends, net debt and the Supplemental
Unaudited Combined Financial Information including adjusted
earnings before interest, tax, amortization 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
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
Half Year Ended
December 31,
|
($
million)
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Net sales
|
|
2,285
|
|
|
3,043
|
|
|
4,546
|
|
|
6,184
|
|
Cost of
sales
|
|
(1,832)
|
|
|
(2,426)
|
|
|
(3,701)
|
|
|
(5,020)
|
|
Gross
profit
|
|
453
|
|
|
617
|
|
|
845
|
|
|
1,164
|
|
Selling, general
and administrative expenses
|
|
(205)
|
|
|
(308)
|
|
|
(404)
|
|
|
(680)
|
|
Research and
development expenses
|
|
(17)
|
|
|
(24)
|
|
|
(32)
|
|
|
(49)
|
|
Restructuring and
related expenses
|
|
(40)
|
|
|
(24)
|
|
|
(52)
|
|
|
(42)
|
|
Other income,
net
|
|
31
|
|
|
11
|
|
|
42
|
|
|
20
|
|
Operating
income
|
|
222
|
|
|
272
|
|
|
399
|
|
|
413
|
|
Interest expense,
net
|
|
(47)
|
|
|
(46)
|
|
|
(100)
|
|
|
(99)
|
|
Other non-operating
income (loss), net
|
|
6
|
|
|
4
|
|
|
3
|
|
|
12
|
|
Income from
continuing operations before
income taxes and equity in income (loss) of
affiliated companies
|
|
180
|
|
|
231
|
|
|
302
|
|
|
326
|
|
Income tax
expense
|
|
(31)
|
|
|
(45)
|
|
|
(53)
|
|
|
(67)
|
|
Equity in income
(loss) of affiliated companies,
net of tax
|
|
(9)
|
|
|
2
|
|
|
(7)
|
|
|
5
|
|
Income from
continuing operations
|
|
141
|
|
|
188
|
|
|
242
|
|
|
264
|
|
Income (loss) from
discontinued operations,
net of tax(1)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(8)
|
|
Net income
|
|
141
|
|
|
188
|
|
|
242
|
|
|
256
|
|
Net (income) loss
attributable to non-controlling
interests
|
|
(2)
|
|
|
(2)
|
|
|
(5)
|
|
|
(4)
|
|
Net income
attributable to Amcor plc
|
|
139
|
|
|
186
|
|
|
237
|
|
|
252
|
|
USD:EUR FX
rate
|
|
0.8765
|
|
|
0.9035
|
|
|
0.8682
|
|
|
0.9013
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Amcor
|
|
0.120
|
|
|
0.115
|
|
|
0.205
|
|
|
0.155
|
|
Diluted earnings per
share attributable to Amcor
|
|
0.120
|
|
|
0.115
|
|
|
0.204
|
|
|
0.155
|
|
Weighted average
number of shares outstanding
- Basic
|
|
1,154
|
|
|
1,613
|
|
|
1,154
|
|
|
1,618
|
|
Weighted average
number of shares outstanding
- Diluted
|
|
1,157
|
|
|
1,615
|
|
|
1,158
|
|
|
1,620
|
|
|
(1)
Represents loss generated from three former Bemis plants located in
the United Kingdom and Ireland from July 1, 2019 to
August 8, 2019. Amcor announced the disposal of these assets
to Kohlberg & Company on June 25, 2019. This divestment
was required by the European Commission at the time of approving
Amcor's acquisition of Bemis on February 11, 2019.
|
U.S. GAAP
Condensed Consolidated Statement of Cash Flows
(Unaudited)
|
|
|
|
Half Year Ended
December 31,
|
($
million)
|
|
2018
|
|
2019
|
Net income
|
|
242
|
|
|
256
|
|
Depreciation,
amortization and impairment
|
|
187
|
|
|
332
|
|
Changes in working
capital
|
|
(223)
|
|
|
(192)
|
|
Other non-cash
items
|
|
29
|
|
|
(53)
|
|
Net cash provided
from operating activities
|
|
235
|
|
|
342
|
|
Purchase of property,
plant and equipment and other intangible assets
|
|
(172)
|
|
|
(207)
|
|
Proceeds from sale of
property, plant and equipment and other intangible
assets
|
|
60
|
|
|
3
|
|
Proceeds from
divestiture
|
|
-
|
|
|
397
|
|
Net debt (repayments)
proceeds
|
|
83
|
|
|
177
|
|
Dividends
paid
|
|
(291)
|
|
|
(391)
|
|
Share
buy-back
|
|
-
|
|
|
(223)
|
|
Other, including
effects of exchange rate on cash and cash equivalents
|
|
(45)
|
|
|
(27)
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(130)
|
|
|
72
|
|
Cash and cash
equivalents at the beginning of the period
|
|
621
|
|
|
602
|
|
Cash and cash
equivalents at the end of the period
|
|
491
|
|
|
674
|
|
U.S. GAAP
Condensed Consolidated Balance Sheet (Unaudited)
|
|
($ million)
|
|
June 30,
2019
|
|
December 31,
2019
|
Cash and cash
equivalents
|
|
602
|
|
|
674
|
|
Trade receivables,
net
|
|
1,864
|
|
|
1,669
|
|
Inventories,
net
|
|
1,954
|
|
|
1,892
|
|
Assets held for
sale(1)
|
|
416
|
|
|
-
|
|
Property, plant and
equipment, net
|
|
3,975
|
|
|
3,758
|
|
Goodwill and other
intangible assets, net
|
|
7,463
|
|
|
7,340
|
|
Other
assets
|
|
891
|
|
|
1,500
|
|
Total
assets
|
|
17,165
|
|
|
16,833
|
|
Trade
payables
|
|
2,303
|
|
|
2,076
|
|
Short-term debt and
current portion of long-term debt
|
|
794
|
|
|
357
|
|
Long-term debt, less
current portion
|
|
5,309
|
|
|
5,854
|
|
Liabilities held for
sale(1)
|
|
21
|
|
|
-
|
|
Accruals and other
liabilities
|
|
3,063
|
|
|
3,143
|
|
Shareholders
equity
|
|
5,675
|
|
|
5,403
|
|
Total liabilities and
shareholders equity
|
|
17,165
|
|
|
16,833
|
|
|
(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 June 25, 2019 and the transaction closed
on August 8, 2019. This divestment was required by the European
Commission at the time of approving Amcor's acquisition of Bemis on
February 11, 2019.
|
Reconciliation of
Non-GAAP Measures
|
Reconciliation of
adjusted Earnings before interest, tax, depreciation and
amortization (EBITDA), Earnings before interest and tax (EBIT), Net
income and Earnings per share (EPS)
|
|
|
|
Half Year Ended
December 31, 2018
|
|
Half Year Ended
December 31, 2019
|
(USD
million)
|
|
EBITDA
|
|
EBIT
|
|
Net
Income
|
|
EPS
(Diluted
US
cents)
|
|
EBITDA
|
|
EBIT
|
|
Net
Income
|
|
EPS
(Diluted
US
cents)
|
Net income
attributable
to Amcor
|
|
237
|
|
|
237
|
|
|
237
|
|
|
20.4
|
|
|
252
|
|
|
252
|
|
|
252
|
|
|
15.5
|
|
Net income
attributable to
non-controlling interests
|
|
5
|
|
|
5
|
|
|
|
|
|
|
4
|
|
|
4
|
|
|
|
|
|
(Income) loss from
discontinued
operations
|
|
-
|
|
|
-
|
|
|
|
|
|
|
8
|
|
|
8
|
|
|
8
|
|
|
0.5
|
|
Tax
expense
|
|
53
|
|
|
53
|
|
|
|
|
|
|
67
|
|
|
67
|
|
|
|
|
|
Interest expense,
net
|
|
100
|
|
|
100
|
|
|
|
|
|
|
99
|
|
|
99
|
|
|
|
|
|
Depreciation and
amortization
|
|
166
|
|
|
|
|
|
|
|
|
321
|
|
|
|
|
|
|
|
EBITDA, EBIT, Net
income
and EPS
|
|
561
|
|
|
395
|
|
|
237
|
|
|
20.4
|
|
|
751
|
|
|
429
|
|
|
259
|
|
|
16.0
|
|
Material
restructuring and
related costs
|
|
38
|
|
|
38
|
|
|
38
|
|
|
3.3
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|
2.5
|
|
Impairment in equity
method
investments
|
|
14
|
|
|
14
|
|
|
14
|
|
|
1.2
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net investment hedge
not
qualifying for hedge
accounting
|
|
(2)
|
|
|
(2)
|
|
|
(2)
|
|
|
(0.1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Material transaction
and
other costs(1)
|
|
35
|
|
|
35
|
|
|
35
|
|
|
3.0
|
|
|
101
|
|
|
101
|
|
|
101
|
|
|
6.3
|
|
Material impact of
hyperinflation
|
|
19
|
|
|
19
|
|
|
19
|
|
|
1.6
|
|
|
19
|
|
|
19
|
|
|
19
|
|
|
1.1
|
|
Net legal
settlements
|
|
(16)
|
|
|
(16)
|
|
|
(16)
|
|
|
(1.3)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Amortization of
acquired
intangibles(2)
|
|
|
|
10
|
|
|
10
|
|
|
0.8
|
|
|
|
|
109
|
|
|
109
|
|
|
6.8
|
|
Tax effect of above
items
|
|
|
|
|
|
(14)
|
|
|
(1.2)
|
|
|
|
|
|
|
(56)
|
|
|
(3.5)
|
|
Adjusted EBITDA,
EBIT, Net
income and EPS
|
|
650
|
|
|
493
|
|
|
321
|
|
|
27.7
|
|
|
911
|
|
|
699
|
|
|
473
|
|
|
29.2
|
|
Combined
Adjustments(3)
|
|
254
|
|
|
185
|
|
|
114
|
|
|
(0.9)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Combined Adjusted
EBITDA,
EBIT, Net income and EPS
|
|
904
|
|
|
678
|
|
|
435
|
|
|
26.8
|
|
|
911
|
|
|
699
|
|
|
473
|
|
|
29.2
|
|
|
(1) Includes costs
associated with the Bemis acquisition. The half year ended
December 31, 2019 includes $58 million of acquisition related
inventory fair value step-up recognized in the September 2019
quarter.
(2) The half year
ended December 31, 2019 includes $26 million of sales backlog
amortization related to the Bemis acquisition recognized in the
September 2019 quarter.
(3) Includes Bemis
and remedy adjustments. EPS also adjusts for new shares issued to
complete the Bemis combination.
|
Reconciliation of
adjusted EBIT by reporting segment
|
|
|
|
Half Year Ended
December 31, 2018
|
|
Half Year Ended
December 31, 2019
|
($
million)
|
|
Combined
Flexibles
|
|
Rigid
Packaging
|
|
Combined
Other(1)
|
|
Total
Combined
|
|
Flexibles
|
|
Rigid
Packaging
|
|
Other(1)
|
|
Total
|
Net income
attributable
to Amcor
|
|
|
|
|
|
|
|
237
|
|
|
|
|
|
|
|
|
252
|
|
Net income
attributable to
non-controlling interests
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
4
|
|
(Income) loss from
discontinued
operations
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
8
|
|
Tax
expense
|
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
|
67
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
100
|
|
|
|
|
|
|
|
|
99
|
|
EBIT
|
|
359
|
|
|
91
|
|
|
(54)
|
|
|
395
|
|
|
409
|
|
|
101
|
|
|
(81)
|
|
|
429
|
|
Material
restructuring and
related costs
|
|
-
|
|
|
38
|
|
|
-
|
|
|
38
|
|
|
32
|
|
|
6
|
|
|
3
|
|
|
41
|
|
Impairment in equity
method
investments
|
|
-
|
|
|
-
|
|
|
14
|
|
|
14
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net investment hedge
not
qualifying for hedge accounting
|
|
-
|
|
|
-
|
|
|
(2)
|
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Material transaction
and other
costs(2)
|
|
1
|
|
|
1
|
|
|
33
|
|
|
35
|
|
|
73
|
|
|
2
|
|
|
27
|
|
|
101
|
|
Material impact of
hyperinflation
|
|
3
|
|
|
17
|
|
|
-
|
|
|
19
|
|
|
-
|
|
|
19
|
|
|
-
|
|
|
19
|
|
Net legal
settlement
|
|
-
|
|
|
-
|
|
|
(16)
|
|
|
(16)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Amortization of
acquired
intangibles(3)
|
|
7
|
|
|
3
|
|
|
-
|
|
|
10
|
|
|
107
|
|
|
3
|
|
|
-
|
|
|
109
|
|
Adjusted
EBIT
|
|
369
|
|
|
149
|
|
|
(24)
|
|
|
493
|
|
|
620
|
|
|
130
|
|
|
(51)
|
|
|
699
|
|
Combined
Adjustments(4)
|
|
213
|
|
|
-
|
|
|
(28)
|
|
|
185
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Combined Adjusted
EBIT
|
|
582
|
|
|
149
|
|
|
(52)
|
|
|
678
|
|
|
620
|
|
|
130
|
|
|
(51)
|
|
|
699
|
|
Adjusted EBIT /
sales %
|
|
11.6
|
%
|
|
10.6
|
%
|
|
|
|
10.6
|
%
|
|
12.8
|
%
|
|
9.7
|
%
|
|
|
|
11.3
|
%
|
Average funds
employed(5)
|
|
8,687
|
|
|
1,783
|
|
|
|
|
|
|
8,786
|
|
|
1,773
|
|
|
|
|
|
Adjusted EBIT /
average
funds employed %
|
|
14.2
|
%
|
|
17.7
|
%
|
|
|
|
13.4
|
%
|
|
14.4
|
%
|
|
16.5
|
%
|
|
|
|
13.8
|
%
|
|
(1) Other includes
equity in income (loss) of affiliated companies, net of tax and
general corporate expenses.
(2) Includes costs
associated with the Bemis acquisition. The half year ended December
31, 2019 includes $58 million of acquisition related inventory fair
value step-up recognized
in the September 2019 quarter.
(3) The half year
ended December 31, 2019 includes $26 million of sales backlog
amortization related to the Bemis acquisition recognized in the
September 2019 quarter.
(4) Includes Bemis
and remedy adjustments.
(5) Average funds
employed includes shareholders equity and net debt, calculated
using a four quarter average and LTM adjusted EBIT.
|
Reconciliation of
adjusted free cash flow and cash flow after
dividends
|
|
($
million)
|
|
Half Year
Ended
December 31, 2019
|
Net cash provided
from operating activities
|
|
342
|
|
Net capital
expenditure
|
|
(204)
|
|
Operating cash flow
related to divested operations
|
|
60
|
|
Material transaction
and integration related costs(1)
|
|
112
|
|
Adjusted free cash
flow (before dividends)(2)
|
|
310
|
|
Dividends
|
|
(391)
|
|
Adjusted cash flow
after dividends
|
|
(81)
|
|
|
(1) Includes cash
integration costs of $45 million.
(2) Adjusted free
cash flow excludes material transaction related costs because these
cash flows are not considered to be directly related to the
underlying business.
|
Reconciliation of
net debt
|
|
($ million)
|
|
June 30,
2019
|
|
December 31,
2019
|
Cash and cash
equivalents
|
|
(602)
|
|
|
(674)
|
|
Short-term
debt
|
|
789
|
|
|
353
|
|
Current portion of
long-term debt
|
|
5
|
|
|
4
|
|
Long-term debt
excluding current portion of long-term debt
|
|
5,309
|
|
|
5,854
|
|
Net
debt
|
|
5,502
|
|
|
5,537
|
|
Supplemental Unaudited Combined Amcor and Bemis 2018
Financial Information for the Half Year Ended December 31, 2018
The Supplemental Unaudited Combined Financial Information
presented for the half year ended December
31, 2018 reflects estimates for Amcor as if the Bemis
acquisition took effect on July 1,
2018.
Key combined
financial measures and ratios(1)
|
|
|
|
Amcor(2)
|
|
Bemis(3)
|
|
Adjustments(4)
|
|
Combined
Results
|
Net sales ($
million)
|
|
4,546
|
|
|
2,029
|
|
|
(146)
|
|
|
6,429
|
|
Adjusted EBITDA ($
million)
|
|
650
|
|
|
294
|
|
|
(40)
|
|
|
904
|
|
Adjusted EBIT ($
million)
|
|
493
|
|
|
212
|
|
|
(27)
|
|
|
678
|
|
Adjusted Net income
($ million)
|
|
321
|
|
|
135
|
|
|
(22)
|
|
|
435
|
|
|
(1) Further details
related to non-GAAP measures and reconciliations are presented
above. Refer "Basis of Preparation
of Supplemental Unaudited Combined Financial Statements' in this
release for full details.
(2) Adjusted
financial result of the legacy Amcor business from July 1, 2018 to
December 31, 2018.
(3) Adjusted
financial result of the legacy Bemis business from July 1, 2018 to
December 31, 2018.
(4) Elimination of
financial results attributable to flexible packaging plants in
Europe and the United States which were
required to be sold to secure anti-trust approval for the Bemis
acquisition. Refer "Basis of Preparation of Supplemental
Unaudited Combined Financial Statements' in this release for full
details.
|
Bemis
synergies
|
|
|
|
|
|
Pre-tax
Benefits
|
($
million)
|
|
Cash Integration
Costs
|
|
Flexibles
|
|
Other
|
|
Total
|
Recognized in
1H20
|
|
45
|
|
20
|
|
10
|
|
30
|
Expected balance to
be
recognized in 2H20
|
|
50 - 60
|
|
|
|
|
|
50
|
Expected to be
recognized
in FY21 & FY22
|
|
~50
|
|
|
|
|
|
100
|
Cumulative costs
and benefits
|
|
~150
|
|
|
|
|
|
180
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/amcor-reports-first-half-results-and-improved-outlook-for-fiscal-2020-301002436.html
SOURCE Amcor plc