John Purtell

John Purtell asked Steve Scherger for his perspectives on the synergy opportunity with the Berry acquisition and the dynamics between plastics and other substrates, given his extensive experience in the packaging space.

Answer

CFO Steve Scherger praised Amcor's capabilities and the exceptional momentum in synergy capture, expressing confidence in achieving the targets. He noted that rigid and flexible packaging, particularly on a global scale, has a broad 'right to win' and a fit for purpose that aligns well with the daily life of consumers, positioning Amcor uniquely.

John Purtell from Macquarie Group asked CFO Steve Scherger for his perspectives on the synergy opportunity with Berry and the dynamics between plastics versus other substrates, given his extensive experience in the packaging space.

Answer

CFO Steve Scherger expressed that Amcor is an incredibly capable global consumer packaging company, highlighting the exceptional synergy capture momentum, outstanding tracking, and commitment to thoughtful investment, which underpins confidence in the $260 million and multi-year synergy targets. Regarding substrates, he noted that rigid and flexible packaging, particularly on a global scale, have a 'right to win' and are 'fit for purpose,' aligning broadly with consumers' daily lives, positioning Amcor uniquely.

John Purtell asked about the underlying cost and productivity management, noting that comparable EBIT was up 4% despite a 2.8% volume decline, which implied strong cost and productivity performance.

Answer

CFO Michael Casamento confirmed that teams focused heavily on cost management, flexing the cost base, managing shift patterns, and driving out discretionary spend. He also highlighted the significant contribution of synergy delivery, with $38 million realized in the quarter, comprising two-thirds G&A and one-third procurement savings.

John Purtell questioned how Amcor achieved a 4% comparable EBIT increase despite a 2.8% volume decline, seeking details on the underlying cost and productivity management and synergy contributions.

Answer

Michael Casamento, CFO of Amcor, attributed the strong performance to disciplined cost management, including flexing the cost base, managing shift patterns, and driving out discretionary spend. He also highlighted the significant synergy delivery of $38 million in the quarter, with $33 million benefiting EBIT from G&A and procurement savings.

John Purtell asked for clarification on whether market share shifts or customer destocking were contributing factors to the recent weak volume performance.

Answer

CEO Peter Konieczny stated definitively that neither market share shifts nor customer destocking were the cause of the volume weakness. He attributed the performance squarely to softer consumer and customer demand, noting that the broad destocking trend seen in prior quarters has concluded.

John Purtell asked for color on volume trends within the quarter, including any insights from April, and the key assumptions behind the Q4 volume growth forecast.

Answer

CEO Peter Konieczny noted that consumer demand weakness in North America was observed throughout the quarter. He explained the Q4 forecast assumes a continuation of Q3 trends for the legacy Amcor business (flat volumes) combined with a two-month contribution from Berry's slightly positive volume profile, resulting in an overall flat to slightly growing outlook.

John Purtell asked about the key benefits of globalizing the Rigid Packaging business through the Berry merger and the growth outlook for the acquired closures and dispensing systems businesses.

Answer

CEO Peter Konieczny clarified that the merger creates a scaled, multi-region player by combining Amcor's $3B Rigids business with Berry's $7B containers and closures business. He stressed the complementarity, noting Berry's portfolio aligns with Amcor's higher-value specialty containers business, not its North American beverage business. He highlighted attractive additions like Berry's healthcare containers and dispensing systems. He deferred giving a specific growth outlook for closures, stating it was too early.

John Purtell asked for confirmation on Q1 volume growth, noting that Flexibles volume growth of 3% was consistent with Q4 and not an acceleration.

Answer

CEO Peter Konieczny explained that overall company volume growth accelerated by 100 basis points to 2%. He noted that excluding healthcare and North American beverage headwinds, the rest of the portfolio grew 4%, with the Flexibles segment growing 5% on that same basis. Konieczny added that medical device destocking has ended, while pharma destocking should abate by the end of the calendar year, setting up a stronger second half.