Nathan Reilly

Nathan Reilly asked for an update on Amcor's CapEx budget ($850-$900 million for the year), where the investment is focused, particularly growth investments, and its expected impact on medium-term volumes.

Answer

CFO Steve Scherger confirmed the CapEx range and stated that, beyond traditional maintenance CapEx, a significant portion of the investment is focused on growth in Amcor's focus market categories, targeting opportunities for differentiation.

Nathan Reilly from UBS asked for an update on Amcor's CapEx budget of $850-$900 million for the year, focusing on where growth investments are concentrated and their potential impact on medium-term volumes.

Answer

CFO Steve Scherger confirmed line of sight to the $850-$900 million CapEx range for the year. He stated that beyond traditional maintenance CapEx, a significant portion of the investment is directed towards Amcor's focus market categories, specifically for growth opportunities where differentiation is possible. He emphasized that CapEx is broadly weighted towards these focus market categories.

Nathan Reilly requested an update on Amcor's exposure to private label products and the current volume trends observed in that category, as well as opportunities for future growth.

Answer

Peter Konieczny, CEO of Amcor, acknowledged the consumer trend towards private label due to value-seeking. He noted Amcor's good exposure in North America and Europe but also identified an opportunity for additional growth, suggesting the company is somewhat underrepresented in the private label market.

Nathan Reilly requested an update on Amcor's exposure to private label products and the current volume trends observed within that category.

Answer

CEO Peter Konieczny (PK) noted that private label is expected to grow as consumers seek value, and Amcor has good exposure in North America and Europe. He also indicated that Amcor is 'somewhat underrepresented' in the private label market, presenting an opportunity for additional growth.

Nathan Reilly asked about the company's capital allocation priorities, specifically the timing of potential growth investments or share buybacks given the focus on deleveraging.

Answer

CFO Michael Casamento reiterated that the primary focus is deleveraging to their target range of 2.5x to 3.0x, using strong free cash flow and any potential divestiture proceeds. Once the company is comfortably within that range, it will consider other capital allocation options like share buybacks. Small, bolt-on M&A remains a possibility but is secondary to strengthening the balance sheet.

Nathan Reilly asked how the newly merged flexibles portfolio is positioned to address the trend of North American consumers seeking value, such as shifting to private label.

Answer

CEO Peter Konieczny responded that the company has a strong, proportional participation in the private label market. He noted that packaging formats are often very similar between branded and private label products, and the company sees an opportunity to expand its presence in these value-oriented categories as consumer behavior shifts.

Nathan Reilly noted that the underlying 4% volume growth appeared solid and asked for an update on the state of the consumer across the U.S. and Europe.

Answer

CEO Peter Konieczny agreed the growth was solid but attributed it to factors other than the consumer, which he described as "at best flat, if not a little down." He explained that growth was driven by improved customer performance, the end of widespread destocking, and increasing momentum from market share gains. He stated this dynamic was consistent across both North America and Europe.