Daniel Kang

Daniel Kang inquired about the customer acceptance of recent price increases and the outlook for the upcoming spring selling season, also asking about the impact of early commercial synergy wins on FY 2026 results.

Answer

CEO Aaron Erter stated that price increases, effective January 1st across fiber cement, Deck, Rail, and Accessories, and PVC trim, have been well-accepted. He noted that commercial synergies are expected to primarily impact the P&L in FY 2027, with confidence in achieving the $125 million revenue synergy target by the end of FY 2027.

Daniel Kang inquired about the acceptance of recent price increases by customers as the company enters its final quarter, and the outlook for the all-important spring selling season. He also asked if early commercial synergy wins would significantly impact FY2026.

Answer

CEO Aaron Erter stated that price increases, effective January 1st for fiber cement, deck, rail, accessories, and PVC trim, have been well-accepted, contributing to price and mix benefits. He clarified that sales synergies are expected to primarily impact the P&L in FY2027, with confidence in achieving the $125 million revenue synergy target by the end of FY2027.

Daniel Kang from CLSA asked about the competitive intensity from other materials and its effect on pricing, and whether expectations of interest rate cuts are factored into the guidance.

Answer

CEO Aaron Erter described the competitive environment as 'as severe as ever,' but asserted that James Hardie continues to outperform, suggesting a long-term view is best for assessing share gains. Regarding rate cuts, Erter acknowledged the encouraging signs but stated it's 'still early days' and the company's guidance reflects the outlook established at the beginning of the year.

Daniel Kang asked for a breakdown of the $260 million in fiscal '26 synergies, with a specific focus on procurement and the status of initial discussions with suppliers.

Answer

CFO Michael Casamento outlined the typical sequencing, with SG&A synergies realized first, followed by procurement and then operations, but did not provide a specific breakdown. CEO Peter Konieczny added that detailed supplier negotiations could only begin after the deal's close, and the company is now positioned to start those conversations.

Daniel Kang asked for details about the recent Amcor-Berry integration planning event and whether it gave leadership greater confidence and granularity on the $650 million synergy target, particularly for procurement, G&A, and operations.

Answer

CEO Peter Konieczny confirmed the event occurred as part of integration preparedness, following Amcor's proven playbook. While integration work cannot begin yet, the teams are organizing and planning. He stated that as they review the estimates, their confidence in achieving the $650 million synergy target is growing. He highlighted that the largest component, procurement ($325M), represents about 3% of the combined $13 billion spend, which they believe is a well-aligned and achievable target.

Daniel Kang asked about the growth opportunity in the newly added focus categories of dairy and liquids, including Amcor's current position and medium-term goals.

Answer

CEO Peter Konieczny detailed that Amcor holds a strong position in North America for both dairy (cheese, yogurt) and liquids (pumpable foods like sauces). He stated the immediate goal is to leverage these successful, differentiated products across Amcor's global network. He sized the opportunity by noting that each category already generates between $800 million and $1 billion in annual revenue for the company.