ZURICH, May 11, 2020 /PRNewswire/ --
Highlights - Nine Months Ended March
31, 2020(1)
- GAAP net income of $433 million
and earnings per share (EPS) of 26.9
cents per share;
- Adjusted EBIT of $1,059 million,
up 6.9% in constant currency terms;
- Adjusted EPS of 44.7 cents per
share, up 13.7% in constant currency terms;
- Bemis integration progressing well with year to date pre-tax
synergy benefits of $55 million;
- Adjusted free cash flow of $367
million, up $217 million;
- Quarterly dividend of 11.5 cents
per share declared;
- 3.2% of outstanding shares repurchased year to date; and
- Fiscal 2020 outlook for adjusted EPS growth in constant
currency terms increased to 11-12%.
Well positioned
and demonstrating resilience
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Amcor's CEO Mr. Ron
Delia said: "During this period of unprecedented challenge, the
vital role that primary packaging plays in the supply of essential
food, beverage and healthcare products has never been
clearer. Right now, consumers are especially focused on
product safety, hygiene, shelf life and convenience, and Amcor is
helping meet those needs around the world with packaging for
consumer staples. I am extremely proud of the commitment and
dedication our 50,000 co-workers are demonstrating every day to
continue supplying our customers during these difficult times and
we cannot thank them enough."
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"While we are not
immune from the current challenges, Amcor remains relatively well
positioned and defensive, given our sales are almost entirely
weighted to essential consumer staples end markets and we have
broad geographic diversification and global scale. For the
second consecutive quarter we have increased guidance for the 2020
fiscal year. Earnings growth has remained strong due to
momentum in the base business and faster than expected synergies
from our acquisition of Bemis last year. Amcor continues to deliver
consistent cash flow and the Board remains committed to a
compelling dividend."
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"While the near term
environment remains uncertain, we are confident in the
defensiveness and underlying potential of the business. We
have visibility to organic growth from defensive end markets, cost
synergies from the Bemis acquisition and the EPS benefits from
shares repurchased this year. Amcor has a strong balance
sheet and we expect to generate over $1 billion of annual free cash
flow, enabling continued investment in the business and cash
returns to shareholders."
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Key Financials(1)
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Nine Months Ended
March 31,
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GAAP
results
|
|
|
|
|
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2019
|
|
2020
|
Net sales
|
|
|
|
|
|
6,855
|
|
9,325
|
Net income
|
|
|
|
|
|
350
|
|
433
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EPS (diluted US
cents)
|
|
|
|
|
|
30.1
|
|
26.9
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
March 31,
|
|
Reported
∆%
|
|
Constant
Currency ∆%
|
Adjusted non-GAAP
results
|
|
Combined
2019
|
|
2020
|
|
|
Net sales
|
|
9,663
|
|
9,325
|
|
(3.5)
|
|
(1.8)
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EBITDA
|
|
1,346
|
|
1,378
|
|
2.4
|
|
4.0
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EBIT
|
|
1,007
|
|
1,059
|
|
5.2
|
|
6.9
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Net income
|
|
649
|
|
719
|
|
10.8
|
|
12.7
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EPS (diluted US
cents)
|
|
40.0
|
|
44.7
|
|
11.7
|
|
13.7
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Free cash flow
(before dividends)
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|
150
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|
367
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144.7
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|
|
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(1) GAAP results for
the prior year reflects the legacy Amcor business only. Adjusted
non-GAAP results exclude items which management considers as not
representative of ongoing operations.
Adjusted non-GAAP combined results for the prior period are
presented as if the Company's acquisition of Bemis had been
consummated as of July 1, 2018 and also exclude items which
management considers not representative of ongoing operations. See
"Presentation of Prior Year Financial Information" for more
information. In addition, reconciliations of these non-GAAP
measures to their most comparable GAAP measures, including pro
forma measures prepared in accordance with SEC Regulation S-X
Article 11, are included in the "Reconciliation of Non-GAAP
Measures" section of 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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COVID-19 update
Amcor's operations have been recognized as 'essential' by
governments and authorities around the world given the role the
Company plays in the supply chains for critical food and healthcare
products. In dealing with the exceptional challenges posed by
COVID-19, Amcor has established three guiding principles:
- Keeping our employees healthy - The health and safety of our
co-workers is one of our values and always Amcor's first priority.
Around the world, local teams have implemented a range of practices
including more frequent cleaning and disinfection, increased
physical distancing in work and break out spaces, restricted
visitor access, temperature screening, protective masks and
flexible working from home arrangements.
- Keeping our operations running - To support our business
partners, every Amcor plant and office has business continuity
plans in place which address infection prevention measures,
incident response, return to work protocols and supply chain
risks.
- Contributing to relief efforts in our communities - Amcor has
launched a global program to help mitigate the impact of COVID-19
by donating food and healthcare packaging products and by funding
local community initiatives to improve access to healthcare,
education or food and other essential products.
From the start of the COVID-19 outbreak to the current point in
time, the Company has operated its 250 plants around the world with
minimal disruption and has not experienced significant business
continuity issues related to accessing raw materials. To
date, operating costs have also not been materially impacted.
The extent to which the global pandemic influenced overall
demand for the Company's products in the third quarter is unclear
as certain regions and segments appear to have benefited while
others were constrained. For example, the Company has seen
good demand for healthcare globally and most food and beverage end
markets were relatively strong in the developed world but weaker in
emerging markets including China
and India. Volumes in the Flexibles North America business
were 4% higher than the March quarter last year. In the Specialty
Cartons and Flexibles Latin America businesses, volumes improved
compared with the first six months of the year, but remain below
the prior year on a year to date basis.
The ultimate near-term impact of the pandemic on the Company's
businesses, including the fourth quarter, will depend on the extent
and nature of any future disruptions across the supply chain, the
duration of social distancing measures and other government imposed
restrictions and the nature and pace of macroeconomic recovery in
key global economies.
Longer term, notwithstanding the current uncertainty, Amcor's
business is expected to remain defensive as the Company continues
to play an important role in the supply chain for essential
consumer goods. Combined with a strong balance sheet, a global
plant network and dedicated workforce, the business is expected to
continue demonstrating resilience and remain well positioned to
generate value for all stakeholders.
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" is being presented to allow shareholders to more easily
compare the current year results with the prior year
results. The Combined results represent non-GAAP measures that
provide stakeholders with an additional perspective on the
Company's financial and operational performance and
trends. The Combined results are presented as if the Company's
acquisition of Bemis had been consummated as of July 1, 2018 and exclude the impact of
non-recurring acquisition and integration related costs,
acquisition related amortization expenses, and other items
management considers as not representative of ongoing
operations.
The presentation of non-GAAP combined measures is not meant to
be considered in isolation or as a substitute for results prepared
and presented in accordance with U.S. GAAP. Reconciliations
of non-GAAP combined measures to their most comparable GAAP
measures, including pro forma measures, prepared in accordance with
SEC Regulation S-X Article 11, are included in the "Reconciliation
of Non-GAAP Measures" section of this release.
Bemis Acquisition Update
Progress on the integration of Bemis, acquired in an all-stock
transaction in June 2019, continues
ahead of initial expectations for the first year.
The Company has delivered approximately $55 million (pre-tax) of cost synergies year to
date, primarily from overhead and procurement initiatives, of which
$40 million was recognized in the
Flexibles segment and $15 million in
Other. Amcor continues to expect synergy benefits of
approximately $80 million (pre-tax)
in fiscal 2020, and remains on track to achieve $180 million (pre-tax) in synergy benefits by the
end of fiscal 2022.
Cash restructuring and integration costs of approximately
$69 million have been incurred year
to date out of approximately $100
million expected in fiscal 2020. Total cash
integration costs by the end of fiscal 2022 are estimated to be
$150 million.
Capital Returns to Shareholders
$500 Million On-Market Share
Buy-Back
Amcor repurchased 51.5 million shares (3.2% of outstanding
shares) during the nine months ended March
31, 2020 for a total cost of $478
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 17.7
Australian cents per share, which reflects the quarterly dividend
of 11.5 cents per share converted at
an average AUD:USD exchange rate of 0.6481 over the five trading
days ended May 4, 2020.
The ex-dividend date will be May 27,
2020, the record date will be May 28,
2020 and the payment date will be June 17 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 May 27, 2020 to
May 28, 2020, inclusive.
Year-to-date results (nine months ended March 31,
2020)(1)
Segment Information
|
Combined
|
|
|
|
|
|
|
|
|
Nine Months Ended
March 31, 2019
|
Nine Months Ended
March 31, 2020
|
Adjusted
Result
|
Net
sales
$
million
|
|
EBIT
$
million
|
|
EBIT
/
Sales
%
|
|
EBIT / Average
funds
employed %(2)
|
Net sales
$ million
|
|
EBIT
$
million
|
|
EBIT /
Sales %
|
|
EBIT / Average
funds
employed %(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flexibles
|
7,526
|
|
863
|
|
11.5
|
|
13.1
|
7,280
|
|
947
|
|
13.0
|
|
14.5
|
Rigid
Packaging
|
2,138
|
|
218
|
|
10.2
|
|
18.1
|
2,047
|
|
202
|
|
9.8
|
|
16.6
|
Other
|
(1)
|
|
(75)
|
|
|
|
|
(2)
|
|
(89)
|
|
|
|
|
Total
Amcor
|
9,663
|
|
1,007
|
|
10.4
|
|
12.9
|
9,325
|
|
1,059
|
|
11.4
|
|
13.7
|
|
(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.
|
Year to date net sales for Amcor of $9,325 million were 1.8% lower than the prior
period in constant currency terms, or 0.5% lower after excluding a
1.3% unfavorable impact from the pass through of lower raw material
costs. Overall year to date volumes were 0.2% higher with the
remaining 0.7% representing unfavorable price/mix.
Flexibles
|
|
Nine Months Ended
March 31,
|
|
|
|
|
|
Combined
2019
|
|
2020
|
|
Reported
∆%
|
|
Constant
Currency
∆%
|
Net sales
|
|
7,526
|
|
7,280
|
|
(3.3)
|
|
(1.4)
|
Adjusted
EBIT
|
|
863
|
|
947
|
|
9.7
|
|
11.3
|
Adjusted EBIT / Sales
%
|
|
11.5
|
|
13.0
|
|
|
|
|
Adjusted EBIT /
Average funds employed %
|
|
13.1
|
|
14.5
|
|
|
|
|
Year to date net sales for the Flexibles segment were 1.4% lower
than the prior period in constant currency terms, or 0.7% lower
after excluding a 0.7% unfavorable impact from the pass through of
lower raw material costs. Overall year to date segment
volumes were 0.2% lower than the prior year, with higher volumes in
the Flexibles North America and Flexibles Europe, Middle East and Africa businesses offset by lower volumes in
Flexibles Latin America and for specialty carton
products. The remaining 0.5% represents unfavorable
price/mix.
In North America, year to date
volumes grew in the low single digit range, mainly driven by
strength in the high value healthcare, pet care, protein, liquids
and home and personal care end markets as well as specialty folding
carton products. In Europe, low single digit year to date
volume growth was driven by higher volumes in dairy, pet care,
coffee, medical, ready meal and snack products. Sales of
specialty folding carton products in Europe improved sequentially in the third
quarter but remained lower than the prior nine month period, driven
by weaker volumes in the first half of the fiscal year reflecting
an increase in the prevalence of illicit trade and customer
destocking in Eastern Europe.
In Asia Pacific, year to date
volumes continued to grow across the Asian emerging markets
notwithstanding lower volumes in China through January and February and lower
volumes in India in March.
In Latin America, volumes improved sequentially in the third
quarter but were lower than the prior nine month period reflecting
challenging economic conditions across the region and the impact of
volumes lost within the legacy Bemis business prior to the
acquisition close in June 2019.
Year to date adjusted EBIT of $947
million was 11.3% higher than last year in constant currency
terms and includes approximately $40
million of synergy benefits related to the Bemis
acquisition. The remaining 7% organic growth primarily
reflects strong cost and operational performance across all
operating segments.
Adjusted EBIT margins of 13.0% increased 150 bps compared to the
prior year period.
Rigid
Packaging
|
|
Nine Months Ended
March 31,
|
|
|
|
|
|
2019
|
|
2020
|
|
Reported
∆%
|
|
Constant
Currency ∆%
|
Net sales
|
|
2,138
|
|
2,047
|
|
(4.3)
|
|
(3.4)
|
Adjusted
EBIT
|
|
218
|
|
202
|
|
(7.7)
|
|
(6.8)
|
Adjusted EBIT / Sales
%
|
|
10.2
|
|
9.8
|
|
|
|
|
Adjusted EBIT /
Average funds employed %
|
|
18.1
|
|
16.6
|
|
|
|
|
In line with expectations, Rigid Packaging adjusted EBIT grew 4%
in the March quarter with growth in North
America and Latin
America.
Year to date net sales for the Rigid Packaging segment were 3.4%
lower than the prior period in constant currency terms, or 0.2%
higher than the prior period in constant currency terms after
excluding a 3.6% unfavorable impact from the pass through of lower
raw material costs. The 0.2% increase was driven by volume
growth of 1.5% partly offset by unfavorable price/mix of 1.3%.
In North America, year to date
beverage volumes were 1.7% higher than the same period last year
with hot fill container volumes up 5%, driven by market growth and
share gains as a range of customers launched new products in the
PET format. In Latin America, year to date volumes were 3.4%
higher compared with the prior period.
On a year to date basis and in constant currency terms, adjusted
EBIT of $202 million was 6.8% lower
against a particularly strong comparative in the first half of last
year primarily related to exceptionally strong mix in North America and the early recovery of cost
inflation in Argentina.
Other
|
|
Nine Months Ended
March 31,
|
Adjusted
EBIT
|
|
Combined
2019
|
|
2020
|
Equity earnings in
affiliates, net of tax
|
|
13
|
|
8
|
Corporate
expenses
|
|
(88)
|
|
(97)
|
Total
Other
|
|
(75)
|
|
(89)
|
Year to date corporate expenses of $97
million include approximately $15
million of synergy benefits related to the Bemis
acquisition.
Net interest and income tax expense
Net interest expense for the nine months ended March 31, 2020 was $140
million compared with combined net interest expense of
$203 million in the prior period,
driven primarily by lower borrowing costs.
Excluding amounts related to non-GAAP adjustments, adjusted
income tax expense for the nine months ended March 31, 2020 was $194
million, representing an effective tax rate of 21.1% which
compares with 18.6% in the nine months ended March 31, 2019.
Cash flow
Adjusted free cash flow (before dividends) was $367 million, in line with expected
seasonality. The $217 million
increase over the prior year period primarily reflects higher
earnings and improved working capital performance.
Balance sheet
Net debt was $5,984 million at
March 31, 2020, an increase from
June 30, 2019 due primarily to the
seasonality of cash flow generation and dividend payments.
Leverage, measured as net debt divided by adjusted trailing twelve
month EBITDA, was 3.1 times as of March 31,
2020, in line with 3.1 times in the prior year period.
Amcor has a solid investment grade balance sheet, rated
BBB/Baa2. The Company has $538
million of cash and cash equivalents, access to $1.4 billion of liquidity in the form of undrawn
committed bank facilities, and no material refinancing to complete
during the next 12 months.
Fiscal year ending June 30,
2020 outlook
The COVID-19 pandemic creates significantly higher degrees of
uncertainty and additional complexity with regard to estimating
future financial results. Assuming the Company and its supply
chain partners and customers are able to continue operating with
minimal disruption, Amcor expects:
- Adjusted constant currency EPS growth in fiscal 2020 of
approximately 11-12% (previously 7-10%).
- 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 64.6 - 65.2 US cents per share (previously 62.0 - 64.0 US
cents per share).
- Assuming current exchange rates prevail for the remainder of the
year, currency would have an unfavorable impact on reported EPS of
approximately 1.0 to 1.5 US cents per share.
- This range includes pre-tax synergy benefits associated with the
Bemis acquisition of approximately $80
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.
- The Company also expects:
- Corporate expenses before
synergies of $160 - $170 million in constant currency terms;
- Net interest costs of $190 -
$200 million (previously $210 - $230
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 on Monday May 11,
2020 at 6:00pm US Eastern
Daylight Time / Tuesday May 12, 2020
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 2478808:
- 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 webcast 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
|
|
Damien
Bird
|
|
Jay
Koval
|
Head of Investor
Relations
|
|
Vice President
Investor Relations
|
|
Vice President
Investor Relations
|
Amcor
|
|
Amcor
|
|
Amcor
|
+61 3 9226
9028
|
|
+61 3 9226
9070
|
|
+1 224 313
7127
|
tracey.whitehead@amcor.com
|
|
damien.bird@amcor.com
|
|
jay.koval@amcor.com
|
|
|
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Media -
Australia
|
|
Media -
Europe
|
|
Media - North
America
|
James
Strong
|
|
Ernesto
Duran
|
|
Daniel
Yunger
|
|
|
Head of Global
Communications
|
|
|
Citadel-MAGNUS
|
|
Amcor
|
|
Kekst CNC
|
+61 448 881
174
|
|
+41 78 698 69
40
|
|
+1 212 521
4879
|
jstrong@citadelmagnus.com
|
|
ernesto.duran@amcor.com
|
|
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 document contains certain statements that are
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are generally identified with
words like "believe," "expect,", "target", "project", "may,"
"could," "would," "approximately," "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 actual
results to differ from expectations include, but are not limited
to: the continued financial and operational impacts of the
COVID-19 pandemic on Amcor and its customers, suppliers, employees
and the geographic markets in which it and its customers operate;
fluctuations in consumer demand patterns; the loss of key customers
or a reduction in production requirements of key customers;
significant competition in the industries and regions in which
Amcor operates; 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; failure by
Amcor to expand its business; the potential loss of intellectual
property rights; various risks that could affect our business
operations and financial results due to the international
operations; price fluctuations or shortages in the availability of
raw materials, energy and other inputs; disruptions to production,
supply and commercial risks, including counterparty credit risks,
which may be exacerbated in times of economic downturn; the
possibility of labor disputes; fluctuations in our credit ratings;
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 for the fiscal year
ended June 30, 2019 as supplemented
by the risk factor contained in Amcor's Current Report on Form 8-K
filed on March 9, 2020. 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.
Basis of Preparation of Supplemental Unaudited Combined
Financial Information
The fiscal 2019 unaudited combined financial information
presented in the release gives effect to Amcor's acquisition of
Bemis as if 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.
Reconciliations of non-GAAP combined measures to their most
comparable GAAP measures and reconciliations of pro forma net
income in accordance with Article 11 of Regulation S-X to combined
net income are included in the "Reconciliation of Non-GAAP
Measures" section of this release.
Presentation of non-GAAP financial information
Included in this release 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
March 31,
|
|
Nine Months Ended
March 31,
|
($
million)
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
Net sales
|
|
2,310
|
|
3,141
|
|
6,855
|
|
9,325
|
Cost of
sales
|
|
(1,890)
|
|
(2,489)
|
|
(5,591)
|
|
(7,509)
|
Gross
profit
|
|
420
|
|
652
|
|
1,264
|
|
1,816
|
Selling, general and
administrative expenses
|
|
(221)
|
|
(353)
|
|
(624)
|
|
(1,033)
|
Research and
development expenses
|
|
(16)
|
|
(25)
|
|
(47)
|
|
(74)
|
Restructuring and
related expenses
|
|
(9)
|
|
(20)
|
|
(61)
|
|
(62)
|
Other income,
net
|
|
6
|
|
17
|
|
48
|
|
38
|
Operating
income
|
|
181
|
|
271
|
|
580
|
|
684
|
Interest expense,
net
|
|
(48)
|
|
(41)
|
|
(148)
|
|
(140)
|
Other non-operating
income (loss), net
|
|
1
|
|
5
|
|
4
|
|
17
|
Income from
continuing operations before income taxes and
equity in income (loss) of affiliated companies
|
|
135
|
|
236
|
|
437
|
|
562
|
Income tax
expense
|
|
(28)
|
|
(56)
|
|
(81)
|
|
(123)
|
Equity in income
(loss) of affiliated companies, net of tax
|
|
6
|
|
4
|
|
(1)
|
|
8
|
Income from
continuing operations
|
|
112
|
|
184
|
|
355
|
|
447
|
Income (loss) from
discontinued operations, net of tax(1)
|
|
—
|
|
—
|
|
—
|
|
(8)
|
Net income
|
|
112
|
|
184
|
|
355
|
|
439
|
Net (income) loss
attributable to non-controlling interests
|
|
—
|
|
(2)
|
|
(5)
|
|
(6)
|
Net income
attributable to Amcor plc
|
|
113
|
|
182
|
|
350
|
|
433
|
USD:EUR FX
rate
|
|
0.8799
|
|
0.9070
|
|
0.8721
|
|
0.9032
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Amcor
|
|
0.097
|
|
0.114
|
|
0.302
|
|
0.269
|
Diluted earnings per
share attributable to Amcor
|
|
0.097
|
|
0.114
|
|
0.301
|
|
0.269
|
Weighted average
number of shares outstanding – Basic
|
|
1,155
|
|
1,594
|
|
1,154
|
|
1,610
|
Weighted average
number of shares outstanding - Diluted
|
|
1,158
|
|
1,595
|
|
1,158
|
|
1,611
|
|
(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)
|
|
|
|
Nine Months Ended
March 31,
|
($
million)
|
|
2019
|
|
2020
|
Net income
|
|
355
|
|
439
|
Depreciation,
amortization and impairment
|
|
270
|
|
499
|
Changes in operating
assets and liabilities
|
|
(548)
|
|
(441)
|
Other non-cash
items
|
|
45
|
|
(28)
|
Net cash provided
from operating activities
|
|
121
|
|
470
|
Purchase of property,
plant and equipment and other intangible assets
|
|
(251)
|
|
(313)
|
Proceeds from sale of
property, plant and equipment and other intangible
assets
|
|
69
|
|
4
|
Proceeds from
divestiture
|
|
—
|
|
425
|
Net debt (repayments)
proceeds
|
|
323
|
|
469
|
Dividends
paid
|
|
(292)
|
|
(574)
|
Share
buy-back
|
|
—
|
|
(478)
|
Other, including
effects of exchange rate on cash and cash equivalents
|
|
(43)
|
|
(67)
|
Net (decrease)
increase in cash and cash equivalents
|
|
(72)
|
|
(64)
|
Cash and cash
equivalents at the beginning of the period
|
|
621
|
|
602
|
Cash and cash
equivalents at the end of the period
|
|
549
|
|
538
|
U.S. GAAP
Condensed Consolidated Balance Sheet (Unaudited)
|
|
($
million)
|
|
June 30,
2019
|
|
March 31,
2020
|
Cash and cash
equivalents
|
|
602
|
|
538
|
Trade receivables,
net
|
|
1,864
|
|
1,731
|
Inventories,
net
|
|
1,954
|
|
1,820
|
Assets held for
sale(1)
|
|
416
|
|
—
|
Property, plant and
equipment, net
|
|
3,975
|
|
3,633
|
Goodwill and other
intangible assets, net
|
|
7,463
|
|
7,264
|
Other
assets
|
|
891
|
|
1,436
|
Total
assets
|
|
17,165
|
|
16,421
|
Trade
payables
|
|
2,303
|
|
1,861
|
Short-term debt and
current portion of long-term debt
|
|
794
|
|
313
|
Long-term debt, less
current portion
|
|
5,309
|
|
6,209
|
Liabilities held for
sale(1)
|
|
21
|
|
—
|
Accruals and other
liabilities
|
|
3,063
|
|
3,235
|
Shareholders
equity
|
|
5,675
|
|
4,803
|
Total liabilities and
shareholders equity
|
|
17,165
|
|
16,421
|
|
(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
Pro Forma Net income under Article 11 to combined adjusted Net
income
|
|
($
million)
|
|
Nine Months
Ended
March 31, 2019
|
Pro forma net income
under Article 11
|
|
479
|
Restructuring
costs
|
|
62
|
Impairment of equity
method investments
|
|
14
|
Transaction related
and other costs
|
|
33
|
Amortization of
acquired intangibles
|
|
127
|
Reversal of purchase
accounting adjustments for backlog and property, plant and
equipment valuation
|
|
(14)
|
Legacy Bemis
adjustments
|
|
(21)
|
Impact of
hyperinflationary accounting and other
|
|
13
|
Tax effect of above
items
|
|
(44)
|
Combined adjusted
net income
|
|
649
|
Reconciliation of
adjusted Earnings before interest, tax, depreciation and
amortization (EBITDA), Earnings before interest and tax (EBIT), Net
income and Earnings per share (EPS)
|
|
|
|
Nine Months Ended
March 31, 2019
|
Nine Months Ended
March 31, 2020
|
($
million)
|
|
EBITDA
|
|
EBIT
|
|
Net
Income
|
|
EPS
(Diluted
US
cents)
|
|
EBITDA
|
|
EBIT
|
|
Net
Income
|
|
EPS
(Diluted
US
cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Amcor
|
|
350
|
|
350
|
|
350
|
|
30.1
|
|
433
|
|
433
|
|
433
|
|
26.9
|
Net income
attributable to non-controlling
interests
|
|
5
|
|
5
|
|
|
|
|
|
6
|
|
6
|
|
|
|
|
(Income) loss from
discontinued operations
|
|
—
|
|
—
|
|
|
|
|
|
8
|
|
8
|
|
8
|
|
0.5
|
Tax
expense
|
|
81
|
|
81
|
|
|
|
|
|
123
|
|
123
|
|
|
|
|
Interest expense,
net
|
|
148
|
|
148
|
|
|
|
|
|
140
|
|
140
|
|
|
|
|
Depreciation and
amortization
|
|
248
|
|
|
|
|
|
|
|
469
|
|
|
|
|
|
|
EBITDA, EBIT, Net
income and EPS
|
|
831
|
|
583
|
|
350
|
|
30.1
|
|
1,178
|
|
710
|
|
441
|
|
27.4
|
Material
restructuring and related costs
|
|
45
|
|
45
|
|
45
|
|
3.9
|
|
60
|
|
60
|
|
60
|
|
3.7
|
Impairment in equity
method investments
|
|
14
|
|
14
|
|
14
|
|
1.2
|
|
—
|
|
—
|
|
—
|
|
—
|
Net investment hedge
not qualifying for hedge
accounting
|
|
(1)
|
|
(1)
|
|
(1)
|
|
(0.1)
|
|
—
|
|
—
|
|
—
|
|
—
|
Material transaction
and other costs(1)
|
|
55
|
|
55
|
|
55
|
|
4.7
|
|
116
|
|
116
|
|
116
|
|
7.2
|
Material impact of
hyperinflation
|
|
29
|
|
29
|
|
29
|
|
2.5
|
|
23
|
|
23
|
|
23
|
|
1.5
|
Net legal
settlements
|
|
(15)
|
|
(15)
|
|
(15)
|
|
(1.3)
|
|
—
|
|
—
|
|
—
|
|
—
|
Amortization of
acquired intangibles(2)
|
|
|
|
14
|
|
14
|
|
1.2
|
|
|
|
150
|
|
150
|
|
9.3
|
Tax effect of above
items
|
|
|
|
|
|
(15)
|
|
(1.3)
|
|
|
|
|
|
(71)
|
|
(4.4)
|
Adjusted EBITDA,
EBIT, Net income and EPS
|
|
957
|
|
724
|
|
476
|
|
40.9
|
|
1,378
|
|
1,059
|
|
719
|
|
44.7
|
Combined
Adjustments(3)
|
|
389
|
|
283
|
|
174
|
|
(0.9)
|
|
—
|
|
—
|
|
—
|
|
—
|
Combined Adjusted
EBITDA, EBIT, Net
income and EPS
|
|
1,346
|
|
1,007
|
|
649
|
|
40.0
|
|
1,378
|
|
1,059
|
|
719
|
|
44.7
|
|
(1) Includes costs
associated with the Bemis acquisition. The nine months ended
March 31, 2020 includes $58 million of acquisition related
inventory fair value step-up recognized in the September
2019 quarter.
|
(2) The nine months
ended March 31, 2020 includes $26 million of sales backlog
amortization related to the Bemis acquisition recognized in the
September 2019 quarter.
|
(3) Includes Bemis
and remedy adjustments. EPS also adjusts for new shares issued to
complete the Bemis combination.
|
Reconciliation of
adjusted EBIT by reporting segment
|
|
|
|
Nine Months Ended
March 31, 2019
|
Nine Months Ended
March 31, 2020
|
($
million)
|
|
Flexibles
|
|
Rigid
Packaging
|
|
Other(1)
|
|
Total
|
Flexibles
|
|
Rigid
Packaging
|
|
Other(1)
|
|
Total
|
Net income
attributable to Amcor
|
|
|
|
|
|
|
|
350
|
|
|
|
|
|
|
433
|
Net income
attributable to non-
controlling interests
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
6
|
(Income) loss from
discontinued
operations
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
8
|
Tax
expense
|
|
|
|
|
|
|
|
81
|
|
|
|
|
|
|
123
|
Interest expense,
net
|
|
|
|
|
|
|
|
148
|
|
|
|
|
|
|
140
|
EBIT
|
|
525
|
|
142
|
|
(84)
|
|
583
|
683
|
|
158
|
|
(131)
|
|
710
|
Material
restructuring and related
costs
|
|
—
|
|
45
|
|
—
|
|
45
|
42
|
|
14
|
|
4
|
|
60
|
Impairment in equity
method
investments
|
|
—
|
|
—
|
|
14
|
|
14
|
—
|
|
—
|
|
—
|
|
—
|
Net investment hedge
not qualifying
for hedge accounting
|
|
—
|
|
—
|
|
(1)
|
|
(1)
|
—
|
|
—
|
|
—
|
|
—
|
Material transaction
and other costs(2)
|
|
5
|
|
2
|
|
48
|
|
55
|
76
|
|
2
|
|
38
|
|
116
|
Material impact of
hyperinflation
|
|
4
|
|
26
|
|
—
|
|
29
|
—
|
|
23
|
|
—
|
|
23
|
Net legal
settlement
|
|
—
|
|
—
|
|
(15)
|
|
(15)
|
—
|
|
—
|
|
—
|
|
—
|
Amortization of
acquired
intangibles(3)
|
|
10
|
|
4
|
|
—
|
|
14
|
146
|
|
4
|
|
—
|
|
150
|
Adjusted
EBIT
|
|
544
|
|
218
|
|
(38)
|
|
724
|
947
|
|
202
|
|
(89)
|
|
1,059
|
Combined
Adjustments(4)
|
|
320
|
|
—
|
|
(37)
|
|
283
|
|
|
|
|
|
|
—
|
Combined Adjusted
EBIT
|
|
863
|
|
218
|
|
(75)
|
|
1,007
|
947
|
|
202
|
|
(89)
|
|
1,059
|
Adjusted EBIT /
sales %
|
|
11.5%
|
|
10.2%
|
|
|
|
10.4%
|
13.0%
|
|
9.8%
|
|
|
|
11.4%
|
Average funds
employed(5)
|
|
9,470
|
|
1,782
|
|
|
|
|
9,009
|
|
1,774
|
|
|
|
|
Adjusted EBIT /
average funds
employed %
|
|
13.1%
|
|
18.1%
|
|
|
|
12.9%
|
14.5%
|
|
16.6%
|
|
|
|
13.7%
|
|
(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 nine months ended
March 31, 2020 includes $58 million of acquisition related
inventory fair value step-up recognized in the September
2019 quarter.
|
(3) The nine months
ended March 31, 2020 includes $26 million of sales backlog
amortization related to the Bemis acquisition recognized in the
September 2019 quarter.
|
(4) Includes Bemis
and remedy adjustments.
|
(5) Average funds
employed includes shareholders equity and net debt, calculated
using a four quarter average and LTM adjusted EBIT.
|
Reconciliations of
adjusted free cash flow and cash flow after
dividends
|
|
|
|
Nine Months Ended
March 31,
|
($
million)
|
|
2019
|
|
2020
|
Net cash provided
from operating activities
|
|
121
|
|
470
|
Net capital
expenditure
|
|
(182)
|
|
(308)
|
Operating cash flow
related to divested operations
|
|
—
|
|
60
|
Material transaction
and integration related costs(1)
|
|
30
|
|
145
|
Adjusted free cash
flow (before dividends)(2)
|
|
(31)
|
|
367
|
Combined
adjustments(3)(before dividends)
|
|
181
|
|
—
|
Combined adjusted
free cash flow (before dividends)
|
|
150
|
|
367
|
Dividends(4)
|
|
(378)
|
|
(574)
|
Combined adjusted
cash flow after dividends
|
|
(228)
|
|
(207)
|
|
(1) The nine months
ended March 31, 2020 includes cash integration costs of $69
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.
|
(3) Includes Bemis
and remedy adjustments.
|
(4) The nine months
ended March 31, 2019 includes dividends paid to former Bemis
shareholders of $86 million.
|
|
|
|
Nine Months Ended
March 31,
|
($
million)
|
|
2019
|
|
2020
|
Adjusted
EBITDA
|
|
957
|
|
1,378
|
Interest and tax
payments
|
|
(216)
|
|
(247)
|
Net capital
expenditure
|
|
(182)
|
|
(308)
|
Movement in working
capital
|
|
(511)
|
|
(370)
|
Other
|
|
(79)
|
|
(86)
|
Adjusted free cash
flow (before dividends)(1)
|
|
(31)
|
|
367
|
Combined
adjustments(2)(before dividends)
|
|
181
|
|
—
|
Combined adjusted
free cash flow (before dividends)
|
|
150
|
|
367
|
|
(1) Adjusted free
cash flow excludes material transaction related costs because these
cash flows are not considered to be directly related to the
underlying business.
|
(2) Includes Bemis
and remedy adjustments.
|
Reconciliation of
net debt
|
|
($
million)
|
|
June 30,
2019
|
|
March 31,
2020
|
Cash and cash
equivalents
|
|
(602)
|
|
(538)
|
Short-term
debt
|
|
789
|
|
310
|
Current portion of
long-term debt
|
|
5
|
|
3
|
Long-term debt
excluding current portion of long-term debt
|
|
5,309
|
|
6,209
|
Net
debt
|
|
5,502
|
|
5,984
|
Bemis
synergies
|
|
|
|
Cash
Integration
|
Pre-tax
Benefits
|
($
million)
|
|
Costs
|
Flexibles
|
|
Other
|
|
Total
|
Recognized nine
months ended 31 March 2020
|
69
|
40
|
|
15
|
|
55
|
Expected balance to
be recognized in 4Q20
|
~30
|
|
|
|
|
25
|
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-year-to-date-results-and-raises-outlook-for-fiscal-2020-301056396.html
SOURCE Amcor