Amcor reports first half results and improved outlook for fiscal 2020

ZURICH, Switzerland, Feb. 11, 2020

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⁾

								Half Year Ended December 31, ARIVA.DE Börsen-Geflüster Kurse Amcor 9,40 € +1,62%
GAAP results								2018			2019
Net sales								4,546			6,184
Net income								237			252
EPS (diluted US cents)								20.4			15.5
		Half Year Ended December 31,						Reported ∆%			Constant Currency ∆%
Adjusted non-GAAP results		Combined 2018			2019
Net sales		6,429			6,184			(3.8)			(2.4)
EBIT		678			699			3.1			4.4
Net income		435			473			8.8			10.3
EPS (diluted US cents)		26.8			29.2			9.2			10.7
(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.
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.

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

		Combined
		Half Year Ended December 31, 2018												Half Year Ended December 31, 2019
Adjusted Financial Results		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		5,025			582			11.6			14.2			4,846			620			12.8			14.4
Rigid Packaging		1,404			149			10.6			17.7			1,340			130			9.7			16.5
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