Amcor reports fiscal 2019 full year results and provides outlook for fiscal 2020

GAAP results

FY18 USD
million

FY19 USD
million

Net sales

9,319.1

9,458.2

Net income

575.2

430.2

EPS (US cents)

49.4

36.3

Cash flow from operating activities

871.4

776.1

Adjusted non-GAAP results

FY18 USD
million

FY19 USD
million

Reported 
var%

Currency
impact

var%

Constant
Currency
var%

Sales

9,319.1

9,458.2

1.5

(4.0)

5.5

EBITDA

1,389.9

1,393.9

0.3

(3.8)

4.1

EBIT

1,056.4

1,075.4

1.8

(3.9)

5.7

Net income

697.3

729.5

4.6

(4.4)

9.0

Free cash flow (before dividends)

643.4

733.4

Cash flow after dividends

116.6

192.7

*GAAP earnings reflects earnings for the legacy Amcor business plus earnings for the legacy Bemis business since 11 June 2019. Adjusted non-GAAP measures exclude items which management considers are not representative of ongoing operations. Further details related to non-GAAP measures and reconciliations to GAAP measures can be found under "Presentation of non-GAAP financial information" and in the tables included in this release. All amounts referenced throughout this document are in US dollars unless otherwise indicated.

FY19

Net
sales

USDm

Adjusted
EBIT
USDm

Adjusted
EBIT /
Sales %

Net
sales
USDm

Adjusted
EBIT
USDm

Adjusted
EBIT /
Sales %

Adjusted EBIT /
average funds
employed %

Flexibles

6,534.6

801.3

12.3

22.9

6,566.7

817.2

12.4

20.8

Rigid Packaging

2,787.5

298.3

10.7

16.2

2,892.7

308.2

10.7

16.8

Other

(3.0)

(43.2)

(1.2)

(50.0)

Total Amcor

9,319.1

1,056.4

11.3

19.5

9,458.2

1,075.4

11.4

18.7

FY18 USD
million

FY19 USD
million

Reported
var%

Currency
impact

var%

Constant
Currency
var%

Sales

6,534.6

6,566.7

0.5

(4.9)

5.4

Adjusted EBIT

801.3

817.2

2.0

(4.7)

6.7

Adjusted EBIT / sales %

12.3

12.4

Adjusted EBIT / average funds employed %

22.9

20.8

1.  Commentary relates to the legacy Amcor business only.

FY18 USD
million

FY19 USD
million

Reported
var%

Currency
impact

var%

Constant
Currency
var%

Sales

2,787.5

2,892.7

3.8

5.4

Adjusted EBIT

298.3

308.2

3.3

4.8

Adjusted EBIT / sales %

10.7

10.7

Adjusted EBIT / average funds employed %

16.2

16.8

Adjusted EBIT

FY18 USD million

FY19 USD million

Equity earnings in affiliates, net of tax

19.0

18.1

General corporate expenses

(62.2)

(68.1)

Total Other

(43.2)

(50.0)

Amcor⁽²⁾

Bemis⁽³⁾

Adjustments⁽⁴⁾

Combined results

Net sales ($ million)

9,458.2

3,798.2

(284.1)

12,972.3

Adjusted EBITDA ($ million)

1,393.9

549.9

(64.9)

1,878.9

Adjusted EBIT ($ million)

1,075.4

405.0

(47.8)

1,432.6

Adjusted Net income ($ million)

729.5

257.9

(40.3)

947.1

Adjusted EPS (US cents)

58.2

Cash flow after dividends ($ million)

192.7

101.1

(16.7)

277.1

Leverage, times (adjusted net debt⁽⁵⁾ / Adjusted EBITDA) 

2.7

Adjusted EBIT / sales %

11.0

Adjusted EBIT / average funds employed⁽⁶⁾ %

13.0

(1)  Further details related to non-GAAP measures are presented below and reconciliations to GAAP measures can be found in the attached schedules.

(2)  Amcor adjusted financial result as presented throughout this document and includes adjusted result from the legacy Bemis business from 11 June 2019.

(3)  Adjusted financial result of the legacy Bemis business from 1 July 2018 to 10 June 2019.

(4)  Elimination of financial results attributable to flexible packaging plants in Europe and the United States which were required to be sold in order to secure anti-trust approval for the Bemis acquisition. 

(5)  Net debt at 30 June 2019 reduced by $394 million of proceeds received during August 2019 related to the sale of flexible packaging plants in Europe.

(6)  Average funds employed includes shareholders equity and net debt, calculated using a four quarter average.

FY19

Net
sales
USDm

Adjusted
EBIT
USDm

Adjusted
EBIT /
Sales %

Flexibles

10,080.6

1,238.6

12.3

Rigid Packaging

2,892.7

308.2

10.7

Other⁽¹⁾

(1.0)

(114.2)

Combined

12,972.3

1,432.6

11.0

(1)  Other includes equity earnings in affiliates, net of tax of $18.1 million and General Corporate expenses of $132.3 million.  

Media - Australia
James Strong

Citadel-MAGNUS
+61 448 881 174
[email protected]

Media - Europe
Ernesto Duran
Head of Global Communications
Amcor
+41 78 698 69 40
[email protected]  

Media - North America
Daniel Yunger
Kekst CNC
+1 212 521 4879
[email protected]

Amcor plc UK Establishment Address: 83 Tower Road North, Warmley, Bristol, England, BS30 8XP, United Kingdom 
UK Overseas Company Number: BR020803
Registered Office: 3rd Floor, 44 Esplanade, St Helier, JE4 9WG, Jersey
Jersey Registered Company Number: 126984, Australian Registered Body Number (ARBN): 630 385 278

Cautionary Statement Regarding Forward-Looking Statements

This communication contains certain statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. Amcor plc ("Amcor") has identified some of these forward-looking statements with words like "believe," "may," "could," "would," "might," "possible," "will," "should," "expect," "intend," "plan," "anticipate," "estimate," "potential," "outlook" or "continue," the negative of these words, other terms of similar meaning or the use of future dates. Such statements are based on the current expectations of the management of Amcor, as applicable, are qualified by the inherent risks and uncertainties surrounding future expectations generally, and actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. None of Amcor or any of its respective directors, executive officers or advisors, provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur. Risks and uncertainties that could cause results to differ from expectations include, but are not limited to: failure to realize the anticipated benefits of the acquisition of Bemis Company, Inc. ("Bemis"), and the cost synergies related thereto;  failure to successfully integrate Bemis' business and operations in the expected time frame or at all; integration costs related to the acquisition of Bemis; the loss of key customers or a reduction in production requirements of key customers; fluctuations in consumer demand patterns; significant competition in the industires and regions in which Amcor operates; Amcor's inability to expand its business; the potential loss of intellectual property rights; price fluctuations or shortages in the availability of raw materials, energy and other inputs; disruptions to production and supply; costs and liabilities related to current and future environmental, health and safety regulations; the possibility of labor disputes; uncertainties related to future dividend payments and share buy-backs; fluctuations in our credit ratings; other risks related to the business, including the effects of industry, economic or political conditions, legal and regulatory proceedings, interest rates, exchange rates and international operations; disruptions to the financial or capital markets; and other risks and uncertainties discussed in Amcor's disclosures to the Australian Securities Exchange ("ASX"), including the "2018 Principal Risks" section of Amcor's Annual Report 2018; and other risks and uncertainties discussed in Amcor and Bemis' filings with the U.S. Securities and Exchange Commission (the "SEC"), including the "Risk Factors" section of Amcor's Registration Statement on Form S-4 filed on March 25, 2019 and the "Risk Factors" section of Bemis' annual report on Form 10-K for the fiscal year ended December 31, 2018. You can obtain copies of Amcor's disclosures to the ASX for free at ASX's website (www.asx.com.au). You can obtain copies of Amcor and Bemis' filings with the SEC for free at the SEC's website (www.sec.gov). Forward-looking statements included herein are made only as of the date hereof and Amcor does not undertake any obligation to update any forward-looking statements, or any other information in this communication, as a result of new information, future developments or otherwise, or to correct any inaccuracies or omissions in them which become apparent, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement. 

On-market share buy-back

Under the buy-back, any repurchases will be effected in accordance with Amcor plc's general authority to repurchase shares and CDIs established and in accordance with all relevant legal and regulatory requirements.  Management has not set a time limit for completing the buy-back, the company is not obliged to make any repurchases and the buy-back may be suspended for periods or discontinued at any time.

Amcor and Bemis combination

On 11 June 2019, the all-stock acquisition of Bemis Company, Inc. was completed under the terms of the agreement announced on 6 August 2018. Pursuant to that agreement, Bemis shareholders received 5.1 Amcor shares for each Bemis share held and Amcor Limited shareholders received one Australian Securities Exchange listed CHESS Depositary Instrument for each share held.  As a result of these share exchanges, the assets of both Amcor Limited and Bemis were merged into Amcor, and Amcor was determined to be the acquirer for accounting purposes.  As a result, the historical financial statements of Amcor, prepared under U.S. generally accepted accounting principles ("U.S. GAAP"), for the periods prior to the combination are considered to be the historical financial statements of Amcor Limited.

Basis of Preparation of Supplemental Unaudited Combined Financial Information

In order to provide the most meaningful comparison of results of operations and results by reporting segment, the Company has included Supplemental Unaudited Combined Financial Information, which combines Amcor and Bemis historical operating results and has been prepared to illustrate the effects of the combination, assuming the combination had been consummated on 1 July 2018. The Supplemental Unaudited Combined Financial Information includes adjustments for (1) accounting policy alignment, (2) elimination of the effect of events that are directly attributable to the combination (e.g., one-time transaction costs), elimination of the effect of consummated and identifiable divestitures agreed to with certain regulatory agencies as a condition of approval for the transaction, and (4) items which management considers are not representative of ongoing operations. The Supplemental Unaudited Combined Financial Information does not include the preliminary purchase accounting impact, which has not been finalised at the date of the release and does not reflect any cost or growth synergies that Amcor may achieve as a result of the transaction, future costs to combine the operations of Amcor and Bemis or the costs necessary to achieve any cost or growth synergies. The Supplemental Unaudited Combined Financial Information has been presented for informational purposes only and is not necessarily indicative of what Amcor's results of operations actually would have been had the combination been completed as of 1 July 2018, nor is it indicative of the future operating results of Amcor. The Supplemental Unaudited Combined Financial Information should be read in conjunction with the separate historical financial statements and accompanying notes contained in each of the Amcor and Bemis periodic reports, as available.  For avoidance of doubt, the Supplemental Unaudited Combined Financial Information is not intended to be, and was not, prepared on a basis consistent with the unaudited condensed combined financial information in Amcor's Registration Statement on Form S-4 filed March 25, 2019 with the SEC (the "S-4 Pro Forma Statements"), which provides the pro forma financial information required by Article 11 of Regulation S-X. For instance, the Supplemental Unaudited Combined Financial Information does not give effect to the combination under the acquisition method of accounting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standard Codification Topic 805, Business Combinations ("ASC Topic 805"), with Amcor treated as the legal and accounting acquirer. The Supplemental Unaudited Combined Financial Information has not been adjusted to give effect to pro forma events that are (1) directly attributable to the combination, (2) factually supportable, or (3) expected to have a continuing impact on the combined results of Amcor and Bemis. More specifically, other than excluding Amcor's divested plants and one-time transaction costs, the Supplemental Unaudited Combined Financial Information does not reflect the types of pro forma adjustments set forth in S-4 Pro Forma Statements. Consequently, the Supplemental Unaudited Combined Financial Information is intentionally different from, but does not supersede, the pro forma financial information set forth in S-4 Pro Forma Statements. 

Presentation of non-GAAP financial information

Included in this announcement are measures of financial performance that are not calculated in accordance with U.S. GAAP.  These measures include adjusted EBITDA (calculated as earnings before interest, tax, depreciation and amortisation), adjusted EBIT (calculated as earnings before interest and tax), earnings per share, adjusted free cash flow, adjusted cash flow after dividends, net debt and the Supplemental Unaudited Combined Financial Information including adjusted earnings before interest, tax, amortisation and depreciation, adjusted earnings before interest and tax, and adjusted earnings per share and any ratios related thereto.  In arriving at these non-GAAP measures, we exclude items that either have a non-recurring impact on the income statement or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not singled out, potentially cause investors to extrapolate future performance from an improper base. While not all inclusive, examples of these items include:

• material restructuring programs, including associated costs such as employee severance, pension and related benefits, impairment of property and equipment and other assets, accelerated depreciation, termination payments for contracts and leases, contractual obligations and any other qualifying costs related to the restructuring plan;
• earnings from discontinued operations and any associated profit on sale of businesses or subsidiaries;
• consummated and identifiable divestitures agreed to with certain regulatory agencies as a condition of approval for Amcor's acquisition of Bemis;
• impairments in goodwill and equity method investments;
• material acquisition compensation and transaction costs such as due diligence expenses, professional and legal fees and integration costs;
• material purchase accounting adjustments for inventory;
• amortization of acquired intangible assets from business combinations;
• impact of economic net investment hedging activities not qualifying for hedge accounting;
• payments or settlements related to legal claims; and
• impacts from hyperinflation accounting.

Management has used and uses these measures internally for planning, forecasting and evaluating the performance of the company's reporting segments and certain of the measures are used as a component of Amcor's board of directors' measurement of Amcor's performance for incentive compensation purposes. Amcor also evaluates performance on a constant currency basis, which measures financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute constant currency results, we multiply or divide, as appropriate, current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. Amcor believes that these non-GAAP measures are useful to enable investors to perform comparisons of current and historical performance of the company. For each of these non-GAAP financial measures, a reconciliation to the most directly comparable U.S. GAAP financial measure has been provided herein. These non-GAAP financial measures should not be construed as an alternative to results determined in accordance with U.S. GAAP.   The company provides guidance on a non-GAAP basis as we are unable to predict with reasonable certainty the ultimate outcome and timing of certain significant items without unreasonable effort.  These items include but are not limited to the impact of foreign exchange translation, restructuring program costs, asset impairments, possible gains and losses on the sale of assets and certain tax related events.  These items are uncertain, depend on various factors and could have a material impact on U.S. GAAP earnings and cash flow measures for the guidance period.

Year ended 30 June

(USD million)

2018

2019

Net sales

9,319.1

9,458.2

Cost of sales

(7,462.3)

(7,659.1)

Gross profit

1,856.8

1,799.1

Selling, general and administrative expenses

(793.2)

(999.0)

Research and development costs

(72.7)

(64.0)

Restructuring and other costs

(40.2)

(130.8)

Other income, net

43.2

186.4

Operating income

993.9

791.7

Interest expense, net

(196.9)

(191.1)

Other non operating income (expense)

(74.1)

3.5

Income from continuing operations before income taxes

722.9

604.1

Income tax expense

(118.8)

(171.5)

Equity in earnings of affiliates, net of tax

(17.5)

4.1

Income from continuing operations

586.6

436.7

Income/(loss) from discontinued operations, net of tax⁽¹⁾

-

0.7

Net income

586.6

437.4

Net income attributable to non controlling interests

(11.4)

(7.2)

Net income attributable to Amcor plc

575.2

430.2

USD:EUR FX rate

0.8383

0.8767

Basic earnings per share attributable to Amcor

49.7

36.4

Diluted earnings per share attributable to Amcor

49.4

36.3

Weighted average number of shares outstanding – Basic

1,154.4

1,180.3

Weighted average number of shares outstanding - Diluted

1,161.7

1,183.8

Included in Amcor's U.S. GAAP results for the year ended 30 June 2019, are the following contributions from the legacy Bemis
business since 11 June 2019:

USD million

Net sales

215.4

Operating income

(10.4)

Net income

(13.1)

(1)  Represents income generated from three former Bemis plants located in the United Kingdom and Ireland since 11 June 2019.  Amcor announced the disposal of these assets to Kohlberg & Company on 25 June 2019 and the transaction closed on 8 August 2019. This divestment was required by the European Commission at the time of approving Amcor's acquisition of Bemis on 11 February 2019.

Year ended 30 June

(USD million)

2018

2019

Net income

586.6

437.4

Depreciation, amortisation and impairment

357.1

453.0

Changes in working capital

(122.5)

6.7

Other non-cash items

50.2

(121.0)

Net cash provided from operating activities

871.4

776.1

Purchase of property, plant and equipment and other intangible assets

(365.0)

(332.2)

Business acquisitions, net of acquired cash and investments in affiliated companies

(13.2)

41.9

Proceeds from sale of property, plant and equipment and other intangible assets

137.0

84.7

Proceeds from sale of affiliated companies and subsidiaries

-

216.3

Net debt (repayments)/proceeds

34.3

(57.8)

Dividends

(526.8)

(679.7)

Other, including effects of exchange rate on cash

(78.4)

(68.5)

Net increase/(decrease) in cash and cash equivalents

59.3

(19.2)

Cash and cash equivalents at the beginning of the period

561.5

620.8

Cash and cash equivalents at the end of the period

620.8

601.6

(USD million)

30 June 2018

30 June 2019

Cash and cash equivalents

620.8

601.6

Receivables

1,379.0

1,864.3

Inventories

1,358.8

1,953.8

Assets held for sale⁽¹⁾

-

416.1

Property, plant and equipment

2,698.5

3,975.0

Goodwill and intangible assets

2,381.4

7,462.8

Other assets

619.0

891.4

Total assets

9,057.5

17,165.0

Payables

1,861.0

2,303.4

Short term debt and current portion of long term debt

2,157.9

794.2

Long term debt

2,690.4

5,309.0

Liabilities held for sale⁽¹⁾

-

20.9

Accruals and other liabilities

1,652.8

3,062.8

Shareholders equity

695.4

5,674.7

Total liabilities and shareholders equity

9,057.5

17,165.0

(1)  Represents the net asset value related to three former Bemis plants located in the United Kingdom and Ireland.  Amcor announced the disposal of these assets to Kohlberg & Company on 25 June 2019 and the transaction closed on 8 August 2019. This divestment was required by the European Commission at the time of approving Amcor's acquisition of Bemis on 11 February 2019.

Year ended 30 June 2019

(USD million)

EBITDA

EBIT

Net
income

EPS
(cents)

EBITDA

EBIT

Net
income

EPS
(cents)

Net income attributable to Amcor

575.2

575.2

575.2

49.4

430.2

430.2

430.2

36.3

Net income attributable to non controlling interests

11.4

11.4

7.2

7.2

(Income) / loss from discontinued operations

-

-

(0.7)

(0.7)

Tax expense

118.8

118.8

171.5

171.5

Interest expense, net

196.9

196.9

191.1

191.1

Depreciation and amortisation

352.7

349.6

EBITDA, EBIT, Net income and EPS

1,255.0

902.3

575.2

49.4

1,148.9

799.3

430.2

36.3

Material restructuring and related costs

14.4

14.4

14.4

1.2

64.1

64.1

64.1

5.4

Impairment in equity method investments

36.5

36.5

36.5

3.1

14.0

14.0

14.0

1.2

Net investment hedge not qualifying for hedge accounting

83.9

83.9

83.9

7.2

(1.4)

(1.4)

(1.4)

(0.1)

Material transaction and other costs⁽¹⁾

-

-

-

-

143.1

143.1

143.1

12.1

Material impact of hyperinflation

-

-

-

-

30.2

30.2

30.2

2.6

Net legal settlements

-

-

-

-

(5.0)

(5.0)

(5.0)

(0.4)

Amortisation of acquired intangibles

-

19.3

19.3

1.7

-

31.1

31.1

2.6

Tax effect of above items

(32.0)

23.2

2.0

Adjusted EBITDA, EBIT, Net income and EPS

1,389.8

1,056.4

697.3

60.0

1,393.9

1,075.4

729.5

61.6

(1)  Includes costs associated with the Bemis acquisition.

Year ended 30 June 2018

Year ended 30 June 2019

(USD million)

Flexibles

Rigid Packaging

Other⁽¹⁾

Total

Flexibles

Rigid Packaging

Other⁽¹⁾

Total

Net income attributable to Amcor

575.2

430.2

Net income attributable to non controlling interests

11.4

7.2

(Income) / loss from discontinued operations

-

(0.7)

Tax expense

118.8

171.5

Interest expense, net

196.9

191.1

EBIT

772.8

293.1

(163.6)

902.3

800.7

209.1

(210.5)

799.3

Material restructuring and related costs

14.4

-

-

14.4

-

64.1

-

64.1

Impairment in equity method investments

-

-

36.5

36.5

-

-

14.0

14.0

Net investment hedge not qualifying for hedge accounting

-

-

83.9

83.9

-

-

(1.4)

(1.4)

Material transaction and other costs

-

-

-

-

(12.8)

3.0

152.9

143.1

Material impact of hyperinflation

-

-

-

-

3.5

26.7

-

30.2

Net legal settlements

-

-

-

-

-

-

(5.0)

(5.0)

Amortisation of acquired intangibles

14.1

5.2

-

19.3

25.8

5.3

-

31.1

Adjusted EBIT

801.3

298.3

(43.2)

1,056.4

817.2

308.2

(50.0)

1,075.4

Adjusted EBIT / sales %

12.3

10.7

11.3

12.4

10.7

11.4

Averaged funds employed⁽²⁾ (last 12 months)

3,492

1,843

5,419

3,933

1,830

5,738

Adjusted EBIT / average funds employed %

22.9

16.2

19.5

20.8

16.8

18.7

(1)  Other includes equity earnings in affiliates, net of tax and General corporate expenses.

(2)  Average funds employed includes shareholders equity and net debt, calculated using a 12 month average.

(USD million) 

30 June 2018

30 June 2019

Net cash provided from operating activities

871.4

776.1

Net capital expenditure

(228.0)

(247.5)

Material transaction related costs⁽¹⁾

-

204.8

Adjusted free cash flow (before dividends)⁽²⁾

643.4

733.4

Dividends

(526.8)

(679.7)

Add back pro-rata dividend payment⁽³⁾

-

139.0

Adjusted cash flow after dividends⁽²⁾

116.6

192.7

(1)  Transaction costs related to the Bemis acquisition. 

(2)  Adjusted free cash flow excludes material transaction related costs because these cash flows are not considered to be directly related to the underlying business. Cash flow after dividends excludes material transaction related costs and payment of pro-rata dividends because these cash flows are not considered to be directly related to the underlying business and/or are non-recurring.

(3)  Amcor paid a pro-rata dividend of 12.0 US cents per share on 13 May 2019 to cover the March 2019 quarter.  This pro-rata dividend aligned the period over which dividends had been paid to Amcor and Bemis shareholders prior to completion of the acquisition.

(USD million)

30 June 2018

30 June 2019

Cash and cash equivalents

(620.8)

(601.6)

Short term debt

1,173.8

788.8

Current portion of long term debt

984.1

5.4

Long term debt excluding current portion of long term debt

2,690.4

5,309.0

Net debt

4,227.5

5,501.6

Proceeds from sale of businesses⁽¹⁾

-

(394.0)

Adjusted net debt

4,227.5

5,107.6

(1)  Proceeds received on 8 August 2019 related to the sale of flexible packaging plants in Europe.