Jakob Cakarnis

Jakob Cakarnis from Jarden Australia asked about the initiatives driving Amcor's confidence in its fourth-quarter guidance and exit rates, beyond just volumes and market performance, considering the historical seasonal EPS shape.

Answer

CFO Steve Scherger explained that Q3 to Q4 improvement is driven by accelerating synergy capture and expected improvement in non-core businesses, particularly the North American beverage business, which faced challenges a year ago in Q4. He also highlighted seasonal EBIT improvement of approximately $100 million and synergy growth contributing to the first half to second half EBIT improvement.

Jakob Cakarnis focused on Amcor's fiscal Q4 and exit rates, asking about specific initiatives, beyond volumes and market performance, that provide confidence in the company's guidance.

Answer

CFO Steve Scherger explained that confidence in Q4 guidance stems from continued acceleration of synergy capture, expected improvement in non-core businesses (particularly North American beverage), and a year-over-year improvement compared to Q4 of the prior fiscal year.

Jakob Cakarnis asked for an explanation of the $133 million 'inventory step-up amortization' adjustment and its potential impact in fiscal 2026.

Answer

CFO Michael Casamento clarified that this is a standard, one-time purchase price accounting (PPA) adjustment to bring acquired inventory to market value. He confirmed that the adjustment was for the two months of Berry ownership in Q4 2025 and is now complete, with no further impact expected in fiscal 2026.

Jakob Cakarnis asked about the procurement synergy timeline, suggesting a phased approach of harmonizing terms first before leveraging scale for better pricing in later years.

Answer

CEO Peter Konieczny rejected a phased approach, stating the principle is to 'get to the synergies fast or never.' He confirmed that now the deal is closed, they will immediately pursue all levers with suppliers. CFO Michael Casamento added context, noting the synergy target represents a manageable 2.5-3% of the combined $13 billion addressable spend over three years.

Jakob Cakarnis asked about the improvement trajectory in the healthcare business, the overall healthcare exposure post-Berry merger, and whether current momentum provides confidence in driving future organic growth.

Answer

CEO Peter Konieczny described healthcare as a 'real gem' that will become a $3 billion combined business post-merger, with complementary portfolios like Berry's delivery devices. He reiterated that healthcare destocking, which lagged other categories, is now largely over. He expressed confidence that the healthcare business will return to its historical growth rates of 3-4% over time, which will also remove the negative mix impact and contribute to overall growth.