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AP

Amcor plc (AMCR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY25 delivered modest underlying earnings growth amid a softer consumer backdrop in North America; net sales were $3.33B, GAAP EPS was $0.136, and adjusted EPS was $0.180, up 5% on a comparable basis .
  • Revenue missed Wall Street consensus ($3.33B actual vs $3.47B estimate*) and adjusted EPS was slightly below ($0.180 actual vs $0.182 estimate*); sequentially, sales and adjusted EPS improved vs Q2 FY25, supported by cost execution and better healthcare volumes .*
  • The Berry Global merger closed on April 30, enabling earlier-than-anticipated synergy capture; management reiterated a $650M synergy plan over three years and ~12% adjusted EPS accretion in FY26 from $260M year-one synergies alone .
  • Guidance was narrowed: FY25 adjusted EPS to $0.72–$0.74 (from $0.72–$0.76) and adjusted FCF maintained at $900M–$1,000M; leverage expected ~3.4x at June 30, 2025 (then ~3.0x by June 30, 2026) given merger impacts .
  • Near-term stock catalysts: narrowed EPS range, revenue miss vs consensus, North America beverage weakness, and synergy execution visibility tied to early merger close .*

What Went Well and What Went Wrong

What Went Well

  • Cost execution and margin discipline: adjusted EBIT rose to $384M and margin held at 11.5%, with comparable constant currency growth and strong cost performance offsetting price/mix headwinds .
  • Healthcare recovery: medical volumes up high-single digits and pharma destocking “essentially behind us,” improving mix in Flexibles and aiding adjusted EPS growth .
  • Synergy visibility: ~$650M total synergies identified, $260M in FY26 alone driving ~12% adjusted EPS accretion; “we have significant control over delivery of synergies” (CEO quote) .

What Went Wrong

  • North America beverage weakness: volumes down high-single digits versus prior year, pressuring Rigid Packaging (adjusted EBIT $55M, −12% comparable) .
  • Revenue miss vs consensus and muted volumes: company-level volumes “in line” with last year; macro/tariff uncertainty cited as a demand headwind, particularly in North America .*
  • Working capital drag and leverage: adjusted FCF was $20M for the quarter (vs $63M prior year Q3) due to higher inventories amid weaker March quarter volumes; leverage at 3.5x, with FX adding ~0.1x .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$3,411 $3,241 $3,333
GAAP Diluted EPS ($)$0.129 $0.113 $0.136
Adjusted EPS (US cents)17.8 16.1 18.0
Adjusted EBIT ($USD Millions)$397 $363 $384
Adjusted EBIT Margin (%)11.6% 11.2% 11.5%

Segment breakdown (March quarter):

SegmentQ3 2024 Net Sales ($MM)Q3 2025 Net Sales ($MM)Q3 2024 Adj EBIT ($MM)Q3 2025 Adj EBIT ($MM)Adj EBIT Margin Q3 2024Adj EBIT Margin Q3 2025
Flexibles$2,598 $2,605 $358 $357 13.8% 13.7%
Rigid Packaging$813 $728 $71 $55 8.7% 7.6%

KPIs:

KPIQ3 2024Q2 2025Q3 2025
Adjusted Free Cash Flow ($MM)$63 $358 $20
Net Debt ($MM)—$6,496 (Dec 31, 2024) $6,752 (Mar 31, 2025)
Leverage (Net Debt / LTM EBITDA)—3.3x (Dec 31, 2024) 3.5x (Mar 31, 2025)
Dividend per share (US$)$0.1250 (prior-year Q3) $0.1275 $0.1275
Cash and Equivalents ($MM)—$445 (Dec 31, 2024) $2,045 (Mar 31, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$0.72–$0.76 $0.72–$0.74 Narrowed
Adjusted Free Cash FlowFY 2025$900M–$1,000M $900M–$1,000M Maintained
Net Interest ExpenseFY 2025$290M–$300M Not reiterated in Q3 release—
Effective Tax RateFY 202519%–20% Not reiterated in Q3 release—
LeverageFY 2025 / FY 2026≤3.0x by 6/30/25 ~3.4x by 6/30/25; ~3.0x by 6/30/26 Raised near-term; timeline extended
DividendQuarterly$0.1275 declared $0.1275 declared Maintained (2% YoY increase)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY25)Previous Mentions (Q2 FY25)Current Period (Q3 FY25)Trend
Berry merger & synergiesStrategy to accelerate growth; $650M synergies outlined Progress toward closing; 40% year-one synergies ($260M) Closed early; executing dedicated workstreams; ~12% EPS accretion in FY26 Improving visibility/earlier execution
North America beverageHigh-single-digit decline; cost actions supported EBIT MSD decline; trajectory improved; EBIT up 10% High-single-digit decline; softer demand and manning ahead of season weighed on earnings Persistently weak; seasonal cost timing amplified impact
Healthcare volumesPharma destocking continued; medical modest growth Destocking largely behind; medical high-single-digit up Medical high-single-digit growth; pharma destocking “essentially behind us” Improving; mix turns favorable
Procurement synergies$13B combined spend dimensionalized Components: SG&A first, procurement builds; operations longer-dated Expect ~2.5–3% procurement impact over 3 years; supplier engagement post-close Building into FY26–27
Tariffs/macroConsumer flat-to-down; not banking on restocking Benign raw materials; regional pass-through; tariffs impact limited Macro uncertainty and tariff backdrop drove prudence in Q4 outlook Cautious near term
Portfolio pruningFocus on higher-growth/margin categories Pruning review across combined portfolio Timing uncertain; combined lens; discipline emphasized Ongoing assessment
Cash flow/leverageSeasonal cash usage; leverage slightly elevated Strong Q2 cash generation; leverage 3.3x Inventory-driven FCF underperformance; leverage 3.5x; FX +0.1x Near-term pressured; plan to normalize

Management Commentary

  • “Today is a defining day for Amcor as we closed our transformational merger with Berry Global…we are now uniquely positioned to deliver more consistent and sustainable organic growth and further improve margins” — Peter Konieczny, CEO .
  • “We are narrowing our outlook range for adjusted EPS to $0.72 to $0.74 per share…we continue to expect earnings for fiscal 2025 within our original guidance range” — Michael Casamento, CFO .
  • “Approximately 40% of total synergies or $260 million is expected to land at fiscal ’26 earnings…synergies alone give us clear visibility to significant total earnings accretion of approximately 12%” — Peter Konieczny .
  • “North America beverage…was down high single digits…weaker-than-anticipated consumer demand…manning capacity increased ahead of the season, impacting earnings” — Michael Casamento .

Q&A Highlights

  • Demand deceleration: Management attributed sequential weakening in North America to “sticky inflation” and tariff uncertainty; Berry’s mix excludes NA beverage exposure .
  • Synergy cadence: SG&A first, procurement builds, operations and growth synergies longer-dated; ~$13B combined addressable spend with ~2.5–3% procurement impact over three years .
  • Portfolio pruning: Combined portfolio under review; timing uncertain given market conditions, focus on higher-margin/higher-growth categories .
  • Below-the-line costs: YTD ~$36M transaction costs; ~$250–$300M expected for a deal of this size, plus ~$280M cost-to-achieve over three years (funded by working capital benefits) .
  • Customer behavior: Value-seeking shifts, private label exposure, and channel mix changes; Amcor positioned to serve these formats .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD)3,454,763,100.0*3,322,088,660.0*3,467,371,520.0*
Revenue Actual ($USD)3,353,000,000.0*3,241,000,000.0*3,333,000,000.0*
Primary EPS Consensus Mean ($)0.1640*0.1576*0.18237*
Primary EPS Actual ($)0.1620*0.1610*0.1800*

Values retrieved from S&P Global.*

Implications:

  • Revenue missed consensus in Q3 FY25 (~$134M shortfall), reflecting North America beverage weakness and softer consumer demand; adjusted EPS was marginally below .*
  • Sequential improvement vs Q2 FY25 (sales and adjusted EPS higher) supported by healthcare mix improvement and cost performance .

Key Takeaways for Investors

  • Revenue miss and narrowed FY25 EPS range suggest near-term caution; watch Q4 volumes (management expects muted growth) and mix effects as healthcare tailwinds continue .*
  • Early merger close is a positive catalyst: execution on $260M FY26 synergies (~12% EPS accretion) is under management control and not contingent on macro improvement .
  • North America beverage remains the swing factor; high-single-digit decline and seasonal labor timing pressured rigids margins (7.6% vs 8.7% LY) — monitor scanner data and customer resets .
  • Working capital normalization is key to FY25 FCF delivery; inventories drove Q3 FCF to $20M and leverage to 3.5x — management targets ~3.4x at FY25 and ~3.0x by FY26 .
  • Flexibles resilience: volumes and margin held (13.7%); Europe/Asia/LatAm growth offset North America softness, aided by healthcare recovery .
  • Procurement synergy pathway: supplier term harmonization post-close, potential ~1% benefit per year over three years; watch SG&A actions in FY26 and footprint moves thereafter .
  • Dividend continuity (12.75c declared) supports yield while merger integration proceeds; board commitment to growing DPS maintained .