Cameron McDonald

Cameron McDonald inquired about the potential impact of GLP-1 use on other parts of Amcor's business, particularly ultra-high processed foods, snacks, and confectionery, and whether it creates a structural headwind for the 60% of the business exposed to nutrition.

Answer

CEO Peter Konieczny acknowledged the positive health trend driven by GLP-1 and Amcor's participation in the healthcare sector. He believes that while it may cause a shift from unhealthy to healthier categories within snacking, Amcor's broad portfolio makes it robust to this trend, not a structural headwind. He noted that customers are innovating, and Amcor is well-positioned to support them through its innovation capabilities and diverse category exposure.

Cameron McDonald from E&P asked about the potential impact of the explosion in GLP-1 use on other parts of Amcor's business, particularly ultra-high processed foods, snacks, and confectionery, and if this represents a structural headwind for the 60% of the business exposed to nutrition.

Answer

CEO Peter Konieczny affirmed support for health trends and Amcor's participation in the healthcare industry, citing a GLP-1 win. He acknowledged that 'unhealthy' categories might be impacted, but 'healthy' categories would likely increase, leading to a shift in snacking from unhealthy to healthy options. Given Amcor's broad-based portfolio, he believes the company is robust to this trend, expecting a volume shift rather than a structural headwind. He also noted that customers are innovating, and Amcor is well-positioned to support these efforts, with the impact being moderate so far.

Cameron McDonald asked whether the volume reductions in the core business or North American beverage were entirely organic, or if the company had experienced market share loss to other substrates, particularly in the North American beverage sector.

Answer

CEO Peter Konieczny (PK) stated that generally, it is not a story of market share loss. He identified one specific trend in North American beverage: a shift in multi-pack sales within big box stores towards aluminum bottles, driven by more attractive price points for value-seeking consumers. No other significant substrate shifts were observed.

Cameron McDonald questioned whether the volume performance in the core business and North American beverage was due to organic reductions or market share loss, particularly to other substrates in the North American beverage sector.

Answer

Peter Konieczny, CEO of Amcor, stated that generally, it is not a story of share loss. He acknowledged a specific trend in multi-pack sales in big box stores where aluminum bottles offer a more attractive price point, leading to some substrate shift due to consumers seeking value, but noted no other significant shifts.

Cameron McDonald asked for clarification on below-the-line integration costs, the Q4 outlook for these costs, and how they relate to the $280 million cost-to-achieve figure.

Answer

CFO Michael Casamento distinguished between two sets of costs: one-time transaction costs (e.g., legal, financing fees) estimated at $250M-$300M, and the separate $280M in cash costs required to achieve the synergies over three years. He clarified that the previously mentioned working capital benefit is expected to fund these costs to achieve, not be offset by them.

Cameron McDonald requested clarification on a $13 million restructuring adjustment, questioning if it was related to the company's exit from Russia.

Answer

CFO Michael Casamento confirmed the cost was part of the previously announced restructuring program designed to offset earnings lost from the disposal of the Russian business. He noted the program, which involved plant closures and restructures, is nearly complete and on track to deliver its targeted annualized benefits, with some already realized in FY24 and more in Q1 FY25.