Amcor reports first half and second quarter result for fiscal 2024

Rhea-AI Summary

Amcor reaffirms its fiscal 2024 outlook, reporting a solid second quarter and first half execution. Net sales for the six months ended December 31, 2023, were $6,694 million, with net income of $286 million. Adjusted EPS for the same period was 31.3 cps. The company also declared a quarterly cash dividend of 12.5 cents per share, with a payment date set for March 19, 2024. Amcor repurchased approximately 3 million shares during the six months ended December 31, 2023, for a total cost of approximately $30 million.

Positive

• Solid fiscal 2024 second quarter and first half execution
• Adjusted EPS of 31.3 cps for the six months ended December 31, 2023
• Quarterly cash dividend of 12.5 cents per share
• Repurchased approximately 3 million shares during the six months ended December 31, 2023

Negative

• None.

Insights

Financial Analyst

The reported financial results of Amcor for the December 2023 quarter and six months ended December 31, 2023, indicate a mixed financial performance with a decline in net sales and net income, yet an increase in adjusted free cash flow and a steady dividend payout. The GAAP Net income shows a significant decrease from the previous year, which could be indicative of operational challenges or one-off expenses not adjusted in the GAAP results. However, the increase in adjusted free cash flow suggests effective working capital management and cost control measures.

Investors should note the dividend increase to 12.5 cents per share, which demonstrates the company's confidence in its cash flow stability and commitment to shareholder returns. The share repurchase of $30 million also reflects a strategic approach to capital allocation, aimed at enhancing shareholder value. The reaffirmation of the fiscal 2024 outlook suggests management's confidence in the company's strategic initiatives and cost reduction measures to navigate through the challenging market conditions. However, the lower sales volumes reported could be a point of concern and may warrant monitoring in subsequent quarters for signs of recovery or further decline.

Market Research Analyst

The performance of Amcor, as indicated by the reported financials, shows resilience in a challenging market environment, with a modest increase in adjusted earnings per share (EPS) above expectations. This indicates that the company's efforts to streamline operations and reduce costs are bearing fruit. The mid-single digit adjusted earnings growth projected for the fiscal fourth quarter points to an expected recovery in the latter part of the year.

From a market perspective, the company's proactive cost-reduction actions and structural cost reduction initiatives are crucial for maintaining competitive margins. The flexible packaging segment, despite a decrease in net sales, maintained its EBIT margin, showcasing the company's ability to manage profitability in a segment that typically has variable demand based on consumer goods market dynamics. The rigid packaging segment, on the other hand, saw a slight dip in EBIT margins, which could reflect more pronounced market pressures in that segment.

Economist

Amcor's financial results provide insights into broader economic trends, such as the impact of foreign exchange rates and raw material costs. The favorable impact from foreign exchange movements indicates currency volatility that could have both positive and negative implications for multinational companies like Amcor. The pass-through of lower raw material costs, while unfavorable for net sales, suggests a potential easing of input cost pressures, which could improve margins if managed effectively.

The increased net interest expense reflects the global trend of rising interest rates, which increases borrowing costs and can affect corporate profitability. The company's leverage ratio, currently at 3.4 times, is within management's expectations, but it emphasizes the necessity for continuous monitoring of debt levels in a rising interest rate environment. The expected return to a leverage ratio of 3.0 times by June 2024 indicates a strategic focus on deleveraging, which is prudent financial management during uncertain economic times.

December 2023 quarter:
GAAP diluted EPS of 9.2 cps; Adjusted EPS of 15.7 cps

Highlights - Six Months Ended December 31, 2023

• Net sales of $6,694 million;
• GAAP Net income of $286 million; GAAP diluted earnings per share (EPS) of 19.8 cps;
• Adjusted EPS of 31.3 cps and Adjusted EBIT of $709 million;
• Adjusted Free Cash Flow $113 million ahead of prior year;
• Continued strong cash returns to shareholders: Quarterly dividend increased to 12.5 cents per share and $30 million of shares repurchased; and
• Reaffirming fiscal 2024 outlook: Adjusted EPS of 67-71 cents per share and adjusted Free Cash Flow of $850-950 million.

ZURICH, Feb. 6, 2024 /PRNewswire/ -- 

Amcor reaffirms fiscal 2024 outlook Amcor CEO Ron Delia said: "Solid fiscal 2024 second quarter and first half execution led to adjusted free cash flow ahead of last year and adjusted earnings per share modestly above our expectations set out in October, despite challenging market conditions.  This leaves us on track to achieve our full year earnings and cash flow guidance for the 2024 fiscal year, which we are reaffirming today. Second quarter volumes were slightly lower than we anticipated at the beginning of the quarter, as destocking accelerated, particularly in the month of December, and demand remained soft.  Against this backdrop, our teams responded by proactively taking actions to further reduce cost.  We have seen volumes improve in January relative to the first half and we expect the business to build momentum in the second half, including delivering mid-single digit adjusted earnings growth in the fiscal fourth quarter. Confidence in our earnings outlook is based on known second half benefits related to the elimination of earnings headwinds from the sale of our Russia business, a lower interest expense headwind, and our structural cost reduction and productivity initiatives. Our underlying businesses are strong and we believe we are well-positioned in our markets.  We are confident in our strategy for long term value creation and will continue to invest in the business for organic growth, including in faster growing, higher margin markets, pursue acquisitions or repurchase shares, and return cash to shareholders through a compelling and growing dividend."

 

Key Financials						Six Months Ended December 31,
GAAP results						2022 $ million		2023 $ million
Net sales						7,354		6,694
Net income attributable to Amcor plc						691		286
EPS (diluted US cents)						46.1		19.8
								Comparable constant currency ∆%
		Six Months Ended December 31,				Reported ∆%
Adjusted non-GAAP results(1)		2022 $ million		2023 $ million
Net sales		7,354		6,694		(9)		(8)
EBITDA		994		913		(8)		(5)
EBIT		791		709		(10)		(6)
Net income		548		453		(17)		(12)
EPS (diluted US cents)		36.6		31.3		(14)		(10)
Free Cash Flow		(61)		52

(1) Adjusted non-GAAP results exclude items which are not considered representative of ongoing operations. Comparable constant currency ∆% excludes the impact of movements in foreign exchange rates and items affecting comparability.  Further details related to non-GAAP measures and reconciliations to GAAP measures can be found under "Presentation of non-GAAP information" in this release.

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.

Shareholder returns

Amcor generates significant annual cash flow and is committed to an investment grade credit rating.  We believe that the Company's strong annual cash flow and balance sheet provide substantial capacity to reinvest in the business for organic growth, pursue acquisitions or share repurchases and return cash to shareholders through a compelling and growing dividend.

During the six months ended December 31, 2023, the Company returned approximately $390 million to shareholders through cash dividends and share repurchases.

Dividend

The Amcor Board of Directors today declared a quarterly cash dividend of 12.5 cents per share (compared with 12.25 cents per share in the same quarter last year). 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 18.98 Australian cents per share, which reflects the quarterly dividend of 12.5 cents per share converted at an AUD:USD average exchange rate of 0.6585 over the five trading days ended February 2, 2024.

The ex-dividend date will be February 27, 2024, the record date will be February 28, 2024 and the payment date will be March 19, 2024. 

Share repurchases

Amcor repurchased approximately 3 million shares during the six months ended December 31, 2023 for a total cost of approximately $30 million.

Financial results - Six Months Ended December 31, 2023

Segment information

	Six Months Ended December 31, 2022				Six Months Ended December 31, 2023
Adjusted non-GAAP results	Net sales $ million	EBIT $ million	EBIT / Sales %	EBIT / Average funds employed %(1)	Net sales $ million	EBIT $ million	EBIT / Sales %	EBIT / Average funds employed %(1)
Flexibles	5,591	706	12.6 %		5,049	634	12.6 %
Rigid Packaging	1,763	123	7.0 %		1,645	113	6.9 %
Other(2)	—	(38)			—	(38)
Total Amcor	7,354	791	10.8 %	16.7 %	6,694	709	10.6 %	14.5 %

(1) Return on average funds employed includes shareholders' equity and net debt, calculated using a four quarter average and last twelve months adjusted EBIT.

(2) Represents corporate expenses.

December 2023 half year:

Net sales of $6,694 million were 9% lower than last year on a reported basis, including a favorable impact of 2% related to movements in foreign exchange rates, an unfavorable impact of 2% related to items affecting comparability and an unfavorable impact of 1% related to the pass through of lower raw material costs of approximately $85 million.  

Net sales on a comparable constant currency basis were 8% lower than last year, including price/mix benefits of approximately 1%.  Volumes were approximately 9% lower than last year.

Adjusted EBIT of $709 million was 6% lower than last year on a comparable constant currency basis. 

December 2023 quarter:

Net sales of $3,251 million were 11% lower than last year on a reported basis, including a favorable impact of 2% related to movements in foreign exchange rates, an unfavorable impact of 2% related to items affecting comparability and an unfavorable impact of 1% related to the pass through of lower raw material costs of approximately $30 million.  

Net sales on a comparable constant currency basis were 10% lower than last year, reflecting 10% lower volumes.

Adjusted EBIT of $352 million was 6% lower than last year on a comparable constant currency basis. 

Flexibles segment		Six Months Ended December 31,			Reported ∆%		Comparable constant currency ∆%
		2022 $ million	2023 $ million
Net sales		5,591	5,049		(10)		(8)
Adjusted EBIT		706	634		(10)		(5)
Adjusted EBIT / Sales %		12.6 %	12.6 %

December 2023 half year:

Net sales of $5,049 million were 10% lower than last year on a reported basis, including a favorable impact of 2% related to movements in foreign exchange rates, an unfavorable impact of 3% related to items affecting comparability and an unfavorable impact of 1% related to the pass through of lower raw material costs of approximately $90 million.  On a comparable constant currency basis, net sales were 8% lower than last year reflecting sales from acquired businesses of approximately 1% and lower volumes of approximately 9%.   Volume weakness remained broad based through the half and mainly reflects persistently lower market and customer demand and accelerated destocking in the December quarter.  As expected, increased destocking impacted the global healthcare category in particular, and as a result, volumes were significantly lower than the same period last year.

In North America, net sales declined at high single digit rates driven by lower volumes. Volumes were higher in the condiments, snacks and confectionary categories and this was more than offset by lower volumes in categories including healthcare, meat and liquid beverage.

In Europe, net sales declined at low double digit rates driven by lower volumes, partly offset by price/mix benefits.  Volumes were lower in healthcare, snacks, coffee and unconverted film and foil end markets and this was partly offset by higher confectionary volumes. 

Across the Asian region, net sales and volumes were modestly higher than the prior year. Volumes were lower in  South East Asian healthcare and this was partly offset by volume growth in Thailand, India and China.  In Latin America, net sales declined at high single digit rates driven by lower volumes mainly in Chile and Mexico, partly offset by growth in Brazil.

Adjusted EBIT of $634 million was 5% lower than last year on a comparable constant currency basis, reflecting lower volumes partly offset by favorable price/mix benefits and ongoing actions taken to lower costs and increase productivity.  EBIT margin of 12.6% remained in line with the prior year notwithstanding weaker volumes and a 50 basis point unfavorable impact compared to the prior year related to the sale of the Russian business in December 2022.

December 2023 quarter:

Net sales of $2,481 million were 12% lower than last year on a reported basis, including a favorable impact of 2% related to movements in foreign exchange rates, an unfavorable impact of 3% related to items affecting comparability and an unfavorable impact of 2% related to the pass through of lower raw material costs of approximately $45 million.  On a comparable constant currency basis, net sales were 9% lower than last year reflecting sales from acquired businesses of approximately 1% and volumes were approximately 10% lower than last year. 

As expected, volume weakness experienced in the first quarter continued in the December quarter with broad based lower market and customer demand and destocking, including an anticipated acceleration of inventory reductions in the global healthcare category.  Destocking also accelerated more broadly in the month of December.

Adjusted EBIT of $312 million was 5% lower than last year on a comparable constant currency basis, reflecting lower volumes.  This was partly offset by strong operating cost performance which resulted in improved earnings leverage.  Adjusted EBIT margin of 12.6% was in line with the December quarter last year, despite incrementally weaker volume performance and a 50 basis point unfavorable impact compared with the prior year related to the sale of the Russian business in December 2022.

Rigid Packaging segment		Six Months Ended December 31,			Reported ∆%		Comparable constant currency ∆%
		2022 $ million	2023 $ million
Net sales		1,763	1,645		(7)		(8)
Adjusted EBIT		123	113		(8)		(9)
Adjusted EBIT / Sales %		7.0 %	6.9 %

December 2023 half year:

Net sales of $1,645 million were 7% lower than last year on a reported basis, including a favorable impact of 1% related to movements in foreign exchange rates.  On a comparable constant currency basis, net sales were 8% lower than last year reflecting price/mix benefits of approximately 1% and volumes were approximately 9% lower than last year.

In North America, overall beverage volumes were 14% lower than last year, including a 13% reduction in hot fill beverage container volumes.  This reflects a combination of lower consumer and customer demand, as well as destocking through the half, which also accelerated considerably in the December quarter.  Specialty container volumes were lower than last year.

In Latin America, volumes grew at mid single digit rates compared with last year, reflecting new business wins with growth in Brazil, Peru and Colombia partly offset by lower volumes in Mexico.

Adjusted EBIT of $113 million was 9% lower than last year on a comparable constant currency basis, reflecting lower volumes partly offset by price/mix benefits and favorable cost performance.

December 2023 quarter:

Net sales of $770 million were 7% lower than last year on a reported basis, including a favorable impact of 1% related to movements in foreign exchange rates and a favorable impact of 2% related to the pass through of higher raw material costs of approximately $15 million.  On a comparable constant currency basis, net sales were 10% lower than last year, reflecting price/mix benefits of approximately 2% and volumes were approximately 12% lower than last year.

In North America, overall beverage volumes were 19% lower and hot fill beverage container volumes were 24% lower than the same quarter last year.  This mainly reflects incrementally weaker consumer and customer demand in key categories relative to the September quarter and significant destocking.  Specialty Container volumes were lower than last year and in Latin America volumes grew at mid single digit rates, reflecting new business wins in Brazil, Peru and Colombia.

Adjusted EBIT of $51 million was 12% lower than last year on a comparable constant currency basis, reflecting lower volumes partly offset by price/mix benefits and favorable cost performance.

Net interest and income tax expense

For the six months ended December 31, 2023, net interest expense of $153 million was $35 million higher than last year, reflecting higher interest rates.  GAAP income tax expense was $67 million compared with $91 million last year. Excluding amounts related to non-GAAP adjustments, adjusted tax expense for the six months ended December 31, 2023 was $99 million compared with $121 million last year. Adjusted tax expense represents an effective tax rate of 18%, in line with 18% in the same period last year.

Adjusted Free Cash Flow

For the six months ended December 31, 2023, adjusted free cash inflow was $52 million, which is $113 million higher than the prior year outflow of $61 million, and in line with our expectations.  Compared with last year, the improvement primarily reflects benefits from inventory reduction initiatives. 

Net debt was $6,639 million at December 31, 2023. Leverage, measured as net debt divided by adjusted trailing twelve month EBITDA, was 3.4 times and in line with our expectations.  Leverage is expected to return to approximately 3.0 times at June 30, 2024.

Fiscal 2024 Guidance reaffirmed

For the twelve month period ending June 30, 2024, the Company continues to expect:

• Adjusted EPS of 67 to 71 cents per share which includes:
  • Comparable constant currency earnings made up of underlying business performance down low single digit % to up low single digit %, a benefit of approximately 2% from share repurchases, and a negative impact of approximately 6% related to higher estimated net interest and tax expense;
  • A negative impact of approximately 3% related to the sale of the Company's Russian business on December 23, 2022; and
  • A benefit of up to 2% related to currency translation, assuming current rates prevail through the balance of fiscal 2024.
  • In comparable constant currency terms, the Company expects third quarter adjusted EPS to be mid single digit % lower compared to the third quarter of fiscal 2023, and fourth quarter adjusted EPS to be up mid single digit % higher than the fourth quarter of fiscal 2023.
• Adjusted Free Cash Flow of approximately $850 million to $950 million, representing solid growth over fiscal 2023.
• Approximately $70 million of cash to be allocated towards share repurchases as part of the program previously announced in fiscal 2023.

Amcor's guidance contemplates a range of factors which create a degree of uncertainty and complexity when estimating future financial results. Further information can be found under 'Cautionary Statement Regarding Forward-Looking Statements' in this release.

Conference Call

Amcor is hosting a conference call with investors and analysts to discuss these results on February 6, 2024 at 5.30pm US Eastern Standard Time / February 7, 2024 at 9.30am 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 numbers, with the Conference ID 2761023:

• USA & Canada 646 307 1963 (local), 800 715 9871 (toll-free)
• Australia 02 9133 7103 (local), 1800 519 630 (toll-free)
• United Kingdom 020 3433 3846 (local), 0800 358 0970 (toll-free)
• Singapore +65 3159 5133 (local)
• Hong Kong +852 3002 3410 (local)

From all other countries, the call can be accessed by dialing +1 646 307 1963 (toll).

A replay of the webcast will also be available in the "Investors" section at www.amcor.com following the call.

About Amcor

Amcor is a global leader in developing and producing responsible packaging solutions for food, beverage, pharmaceutical, medical, home and personal-care, and other products.  Amcor works with leading companies around the world to protect their products, 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. In fiscal year 2023, 41,000 Amcor people generated $14.7 billion in annual sales from operations that span 218 locations in 41 countries. NYSE: AMCR; ASX: AMC

www.amcor.com  I  LinkedIn  I  Facebook  I  YouTube |  Twitter

Contact Information

Investors
Tracey Whitehead		Damien Bird		Damon Wright
Global Head of Investor Relations		Vice President Investor Relations Asia Pacific		Vice President Investor Relations North America
Amcor		Amcor		Amcor
+61 3 9226 9028		+61 3 9226 9070		+1 224 313 7141
tracey.whitehead@amcor.com		damien.bird@amcor.com		damon.wright@amcor.com
Media - Australia		Media - Europe		Media - North America
James Strong		Ernesto Duran		Julie Liedtke
Partner		Head of Global Communications		Director, Media Relations
Citadel-MAGNUS		Amcor		Amcor
+61 448 881 174		+41 78 698 69 40		+1 847 204 2319
jstrong@citadelmagnus.com		ernesto.duran@amcor.com		julie.liedtke@amcor.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," "intend," "plan," "anticipate," "commit," "estimate," "potential," "ambitions," "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. Neither Amcor nor 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: changes in consumer demand patterns and customer requirements; the loss of key customers, a reduction in production requirements of key customers; significant competition in the industries and regions in which Amcor operates; failure by Amcor to expand its business; challenging current and future global economic conditions, including the Russia-Ukraine conflict and inflation; impact of operating internationally; 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 volatility;  pandemics, epidemics, or other disease outbreaks; an inability to attract and retain our global executive management team and our skilled workforce; costs and liabilities related to  environment, health, and safety ("EHS") laws and regulations as well as changes in the global climate; labor disputes and an inability to renew collective bargaining agreements at acceptable terms; risks related to climate change; cybersecurity risks; failures or disruptions in information technology systems; rising interest rates; a significant increase in indebtedness or a downgrade in the credit rating; foreign exchange rate risk; a significant write-down of goodwill and/or other intangible assets; a failure to maintain an effective system of internal control over financial reporting; inability of Amcor's insurance policies to provide adequate protections; challenges to or the loss of intellectual property rights; litigation, including product liability claims or regulatory developments; increasing scrutiny and changing expectations from investors, customers, and governments with respect to Amcor's Environmental, Social and Governance practices and commitments resulting in increased costs; changing government regulations in environmental, health, and safety matters; changes in tax laws or changes in our geographic mix of earnings; 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, 2023 and any subsequent 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.

Presentation of non-GAAP information

Included in this release are measures of financial performance that are not calculated in accordance with U.S. GAAP. These measures include adjusted EBITDA and EBITDA (calculated as earnings before interest and tax and depreciation and amortization), adjusted EBIT and EBIT (calculated as earnings before interest and tax), adjusted net income, adjusted earnings per share, adjusted free cash flow and net debt.  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. Note that while amortization of acquired intangible assets is excluded from non-GAAP adjusted financial measures, the revenue of the acquired entities and all other expenses unless otherwise stated, are reflected in our non-GAAP financial performance earnings measures. 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 restructuring plans;
• material sales and earnings from disposed or ceased operations and any associated profit or loss on sale of businesses or subsidiaries;
• changes in the fair value of economic hedging instruments on commercial paper and contingent purchase consideration;
• significant pension settlements;
• 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 combination;
• gains or losses on significant property and divestitures and significant property and other impairments, net of insurance recovery;
• certain regulatory and legal matters;
• impacts from highly inflationary accounting; and
• impacts related to the Russia-Ukraine conflict.

Amcor also evaluates performance on a comparable constant currency basis, which measures financial results assuming constant foreign currency exchange rates used for translation based on the average rates in effect for the comparable prior year period. In order to compute comparable 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. We then adjust for other items affecting comparability. While not all inclusive, examples of items affecting comparability include the difference between sales or earnings in the current period and the prior period related to disposed, or ceased operations. Comparable constant currency net sales performance also excludes the impact from passing through movements in raw material costs. 

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 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 forward-looking 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.

Dividends

Amcor has received a waiver from the ASX's settlement operating rules, which will allow the Company to defer processing conversions between its ordinary share and CDI registers from February 27, 2024 to February 28, 2024 inclusive.

U.S. GAAP Condensed Consolidated Statements of Income (Unaudited)
		Three Months Ended December 31,			Six Months Ended December 31,
($ million)		2022		2023	2022		2023
Net sales		3,642		3,251	7,354		6,694
Cost of sales		(2,980)		(2,630)	(6,024)		(5,428)
Gross profit		662		621	1,330		1,266
Selling, general, and administrative expenses		(298)		(299)	(600)		(601)
Research and development expenses		(24)		(28)	(49)		(55)
Restructuring and other related activities, net		213		(24)	212		(52)
Other income/(expenses), net		6		(28)	8		(46)
Operating income		559		242	901		512
Interest expense, net		(68)		(78)	(118)		(153)
Other non-operating income, net		3		1	3		—
Income before income taxes and equity in loss of affiliated companies		494		165	786		359
Income tax expense		(33)		(28)	(91)		(67)
Equity in loss of affiliated companies, net of tax		—		(1)	—		(2)
Net income		461		136	695		290
Net income attributable to non-controlling interests		(2)		(2)	(4)		(4)
Net income attributable to Amcor plc		459		134	691		286
USD:EUR average FX rate		0.9799		0.9295	0.9870		0.9244
Basic earnings per share attributable to Amcor		0.309		0.093	0.465		0.198
Diluted earnings per share attributable to Amcor		0.307		0.092	0.461		0.198
Weighted average number of shares outstanding – Basic		1,475		1,439	1,474		1,439
Weighted average number of shares outstanding – Diluted		1,485		1,440	1,486		1,440

 

U.S. GAAP Condensed Consolidated Statements of Cash Flows (Unaudited)
		Six Months Ended December 31,
($ million)		2022		2023
Net income		695		290
Depreciation, amortization and impairment		284		295
Net gain on disposal of businesses		(219)		—
Changes in operating assets and liabilities, excluding effect of acquisitions, divestitures, and currency		(696)		(445)
Other non-cash items		81		88
Net cash provided by operating activities		145		228
Purchase of property, plant and equipment and other intangible assets		(250)		(245)
Proceeds from sales of property, plant and equipment and other intangible assets		8		11
Business acquisitions and investments in affiliated companies, and other		(103)		(22)
Proceeds from divestitures		370		—
Net debt proceeds		406		257
Dividends paid		(365)		(361)
Share buyback/cancellations		(40)		(30)
Purchase of treasury shares and tax withholdings for share-based incentive plans		(89)		(51)
Other, including effect of exchange rate on cash and cash equivalents		(95)		(46)
Net decrease in cash and cash equivalents		(13)		(259)
Cash and cash equivalents balance at beginning of the year		850		689
Cash and cash equivalents balance at end of the period		837		430

 

U.S. GAAP Condensed Consolidated Balance Sheets (Unaudited)
($ million)		June 30, 2023		December 31, 2023
Cash and cash equivalents		689		430
Trade receivables, net		1,875		1,820
Inventories, net		2,213		2,150
Property, plant, and equipment, net		3,762		3,810
Goodwill and other intangible assets, net		6,890		6,862
Other assets		1,574		1,655
Total assets		17,003		16,727
Trade payables		2,690		2,338
Short-term debt and current portion of long-term debt		93		58
Long-term debt, less current portion		6,653		7,011
Accruals and other liabilities		3,477		3,293
Shareholders' equity		4,090		4,027
Total liabilities and shareholders' equity		17,003		16,727

 

Components of Fiscal 2024 Net Sales growth
	Three Months Ended December 31,			Six Months Ended December 31,
($ million)	Flexibles	Rigid Packaging	Total	Flexibles	Rigid Packaging	Total
Net sales fiscal 2024	2,481	770	3,251	5,049	1,645	6,694
Net sales fiscal 2023	2,812	830	3,642	5,591	1,763	7,354
Reported Growth %	(12)	(7)	(11)	(10)	(7)	(9)
FX %	2	1	2	2	1	2
Constant Currency Growth %	(14)	(8)	(13)	(12)	(8)	(11)
RM Pass Through %	(2)	2	(1)	(1)	—	(1)
Items affecting comparability %	(3)	—	(2)	(3)	—	(2)
Comparable Constant Currency Growth %	(9)	(10)	(10)	(8)	(8)	(8)
Acquired operations %	1	—	—	1	—	—
Organic Growth %	(10)	(10)	(10)	(9)	(8)	(8)
Volume %	(10)	(12)	(10)	(9)	(9)	(9)
Price/Mix %	—	2	—	—	1	1

 

Reconciliation of Non-GAAP Measures
Reconciliation of adjusted Earnings before interest, tax, depreciation, and amortization (EBITDA), Earnings before interest
and tax (EBIT), Net income, Earnings per share (EPS) and Adjusted Free Cash Flow
		Three Months Ended December 31, 2022								Three Months Ended December 31, 2023
($ million)		EBITDA		EBIT		Net Income		EPS (Diluted US cents)(1)		EBITDA		EBIT		Net Income		EPS (Diluted US cents)(1)
Net income attributable to Amcor		459		459		459		30.7		134		134		134		9.2
Net income attributable to non-controlling interests		2		2						2		2
Tax expense		33		33						28		28
Interest expense, net		68		68						78		78
Depreciation and amortization		141								145
EBITDA, EBIT, Net income, and EPS		703		562		459		30.7		387		242		134		9.2
Impact of highly inflationary accounting		5		5		5		0.3		34		34		34		2.4
Restructuring and other related activities, net(2)		(207)		(207)		(207)		(13.8)		24		24		24		1.7
Other		(1)		(1)		(1)		—		9		9		9		0.6
Amortization of acquired intangibles(3)				40		40		2.6				43		43		3.0
Tax effect of above items						(19)		(1.3)						(17)		(1.2)
Adjusted EBITDA, EBIT, Net income and EPS		500		399		277		18.5		454		352		227		15.7
Reconciliation of adjusted growth to comparable constant currency growth
% growth - Adjusted EBITDA, EBIT, Net income, and EPS										(9)		(12)		(18)		(15)
% items affecting comparability(4)										6		7		8		7
% currency impact										(2)		(1)		(2)		(2)
% comparable constant currency growth										(5)		(6)		(12)		(10)
Adjusted EBITDA		500								454
Interest paid, net		(77)								(94)
Income tax paid		(57)								(71)
Purchase of property, plant and equipment and other intangible assets		(99)								(121)
Proceeds from sales of property, plant and equipment and other intangible assets		4								7
Movement in working capital		56								60
Other		11								44
Adjusted Free Cash Flow		338								279

(1) Calculation of diluted EPS for the three months ended December 31, 2023 excludes net income attributable to shares to be repurchased under forward contracts of $1 million and $3 million for the three months ended December 31, 2022.

(2) Includes incremental costs incurred in connection with the Russia-Ukraine conflict in fiscal year 2023.

(3) Amortization of acquired intangible assets from business combinations.

(4) Reflects the impact of disposed and ceased operations.

 

		Six Months Ended December 31, 2022								Six Months Ended December 31, 2023
($ million)		EBITDA		EBIT		Net Income		EPS (Diluted US cents)(1)		EBITDA		EBIT		Net Income		EPS (Diluted US cents)(1)
Net income attributable to Amcor		691		691		691		46.1		286		286		286		19.8
Net income attributable to non-controlling interests		4		4						4		4
Tax expense		91		91						67		67
Interest expense, net		118		118						153		153
Depreciation and amortization		283								287
EBITDA, EBIT, Net income, and EPS		1,187		904		691		46.1		797		510		286		19.8
Impact of highly inflationary accounting		13		13		13		0.9		51		51		51		3.6
Restructuring and other related activities, net(2)		(204)		(204)		(204)		(13.6)		52		52		52		3.6
Other		(2)		(2)		(2)		(0.1)		13		13		13		0.8
Amortization of acquired intangibles(3)				80		80		5.3				83		83		5.8
Tax effect of above items						(30)		(2.0)						(32)		(2.3)
Adjusted EBITDA, EBIT, Net income and EPS		994		791		548		36.6		913		709		453		31.3
Reconciliation of adjusted growth to comparable constant currency growth
% growth - Adjusted EBITDA, EBIT, Net income, and EPS										(8)		(10)		(17)		(14)
% items affecting comparability(4)										5		6		7		6
% currency impact										(2)		(2)		(2)		(2)
% comparable constant currency growth										(5)		(6)		(12)		(10)
Adjusted EBITDA		994								913
Interest paid, net		(112)								(141)
Income tax paid		(91)								(124)
Purchase of property, plant and equipment and other intangible assets		(250)								(245)
Proceeds from sales of property, plant and equipment and other intangible assets		8								11
Movement in working capital		(610)								(400)
Other		—								38
Adjusted Free Cash Flow		(61)								52

(1) Calculation of diluted EPS for the six months ended December 31, 2023 excludes net income attributable to shares to be repurchased under forward contracts of $1 million and $6 million for the six months ended December 31, 2022.

(2) Includes incremental costs incurred in connection with the Russia-Ukraine conflict in fiscal year 2023.

(3) Amortization of acquired intangible assets from business combinations.

(4) Reflects the impact of disposed and ceased operations.

 

Reconciliation of adjusted EBIT by reportable segment
		Three Months Ended December 31, 2022								Three Months Ended December 31, 2023
($ million)		Flexibles		Rigid Packaging		Other		Total		Flexibles		Rigid Packaging		Other		Total
Net income attributable to Amcor								459								134
Net income attributable to non- controlling interests								2								2
Tax expense								33								28
Interest expense, net								68								78
EBIT		516		50		(4)		562		250		11		(19)		242
Impact of highly inflationary accounting		—		5		—		5		—		34		—		34
Restructuring and other related activities, net(1)		(207)		—		—		(207)		19		5		—		24
Other		6		—		(7)		(1)		1		—		8		9
Amortization of acquired intangibles(2)		38		2		—		40		42		1		—		43
Adjusted EBIT		353		57		(11)		399		312		51		(11)		352
Adjusted EBIT / sales %		12.5 %		6.9 %				11.0 %		12.6 %		6.6 %				10.8 %
Reconciliation of adjusted growth to comparable constant currency growth
% growth - Adjusted EBIT										(12)		(11)		—		(12)
% items affecting comparability(3)										8		—		—		7
% currency impact										(1)		(1)		—		(1)
% comparable constant currency										(5)		(12)		—		(6)

(1) Includes incremental costs incurred in connection with the Russia-Ukraine conflict in fiscal year 2023.

(2) Amortization of acquired intangible assets from business combinations.

(3) Reflects the impact of disposed and ceased operations.

 

		Six Months Ended December 31, 2022								Six Months Ended December 31, 2023
($ million)		Flexibles		Rigid Packaging		Other		Total		Flexibles		Rigid Packaging		Other		Total
Net income attributable to Amcor								691								286
Net income attributable to non- controlling interests								4								4
Tax expense								91								67
Interest expense, net								118								153
EBIT		827		107		(30)		904		506		51		(47)		510
Impact of highly inflationary accounting		—		13		—		13		—		51		—		51
Restructuring and other related activities, net(1)		(204)		—		—		(204)		43		9		—		52
Other		6		—		(8)		(2)		4		—		9		13
Amortization of acquired intangibles(2)		77		3		—		80		81		2		—		83
Adjusted EBIT		706		123		(38)		791		634		113		(38)		709
Adjusted EBIT / sales %		12.6 %		7.0 %				10.8 %		12.6 %		6.9 %				10.6 %
Reconciliation of adjusted growth to comparable constant currency growth
% growth - Adjusted EBIT										(10)		(8)		—		(10)
% items affecting comparability(3)										7		—		—		6
% currency impact										(2)		(1)		—		(2)
% comparable constant currency										(5)		(9)		—		(6)

(1) Includes incremental costs incurred in connection with the Russia-Ukraine conflict in fiscal year 2023.

(2) Amortization of acquired intangible assets from business combinations.

(3) Reflects the impact of disposed and ceased operations.

 

Reconciliation of net debt
($ million)		June 30, 2023		December 31, 2023
Cash and cash equivalents		(689)		(430)
Short-term debt		80		46
Current portion of long-term debt		13		12
Long-term debt, less current portion		6,653		7,011
Net debt		6,057		6,639

 

View original content:https://www.prnewswire.com/news-releases/amcor-reports-first-half-and-second-quarter-result-for-fiscal-2024-302054079.html

SOURCE Amcor

FAQ

What were Amcor's net sales for the six months ended December 31, 2023?

Amcor's net sales for the six months ended December 31, 2023, were $6,694 million.

What was Amcor's net income for the six months ended December 31, 2023?

Amcor's net income for the six months ended December 31, 2023, was $286 million.

What was Amcor's adjusted EPS for the six months ended December 31, 2023?

Amcor's adjusted EPS for the six months ended December 31, 2023, was 31.3 cps.

What was the quarterly cash dividend declared by Amcor?

Amcor declared a quarterly cash dividend of 12.5 cents per share.

How many shares did Amcor repurchase during the six months ended December 31, 2023?

Amcor repurchased approximately 3 million shares during the six months ended December 31, 2023, for a total cost of approximately $30 million.