This breakthrough reinforces Amcor's commitment to developing packaging solutions that support its broader mission of enabling a circular economy, reducing the environmental impact of packaging and protecting our future. Brazil's current paper recycling rate stands at 66.9%, according to Indústria Brasileira de Árvores (IBÁ). With this in mind, Amcor posed a simple question: "What if we could enhance some packaging recyclability by shifting more packaging to AmFiber™ Performance Paper? And, what would be th ...

Group 1 - Samuel Smith has extensive experience in dividend stock research and investment, having served as lead analyst and Vice President at notable firms [1] - He is a Professional Engineer and Project Management Professional with degrees in Civil Engineering & Mathematics and a Master's in Engineering focused on applied mathematics and machine learning [1] - Samuel leads the High Yield Investor investing group, collaborating with Jussi Askola and Paul R. Drake to balance safety, growth, yield, and value in investment strategies [2] Group 2 - High Yield Investor provides real-money core, retirement, and international portfolios, along with regular trade alerts and educational content [2] - The service includes an active chat room for investors to share insights and strategies [2]

Group 1: Market Overview - Market volatility is prompting retail investors to seek lower-risk opportunities, with traditional safe havens like U.S. Treasury bonds facing challenges [1] - Dividend stocks are highlighted as a potential source of steady passive income during turbulent market conditions [1][2] Group 2: DHT Holdings Inc. - DHT Holdings Inc. has a dividend yield of 5.17% and an annual dividend of $0.60, with a significant annualized 3-year dividend growth of 97.40% [4] - The company reported earnings per share (EPS) of 27 cents, exceeding analyst predictions by 12 cents, and ended the quarter with $277 million in total liquidity [4] - Analysts rate DHT shares as a Buy, with a consensus price target over 14% higher than current levels, despite a year-to-date increase of over 17% [6] Group 3: Sunoco LP - Sunoco LP has a dividend yield of 6.67% and an annual dividend of $3.59, with a dividend payout ratio of 64.68% [8][10] - The company is expanding aggressively, including a $9 billion acquisition of Parkland, expected to enhance cash flow by 10% [9] - All six analysts rate SUN shares as a Buy, with a consensus price target more than 16% above current levels after a nearly 7% year-to-date increase [10] Group 4: Amcor plc - Amcor plc has a dividend yield of 5.60% and an annual dividend of $0.51, with a dividend payout ratio of 91.07% [11] - Despite recent earnings disappointment, analysts remain optimistic, with seven out of eleven rating it a Buy and a consensus price target suggesting over 25% upside potential [13] - The high dividend payout ratio may not be sustainable if profit growth does not improve [14]

Industry Overview - The Zacks Containers - Paper and Packaging industry is experiencing weak demand due to lower consumer spending amid inflation, but pricing actions by industry players are expected to mitigate the impacts of supply-chain disruptions and elevated costs [1][4] - The industry is supported by rising e-commerce activities and increasing demand for sustainable packaging options due to environmental concerns [1][5] Market Dynamics - The industry has faced volume declines as consumers reduce spending and inventory levels, impacting top-line performance [4] - Supply-chain disruptions and higher costs for materials, labor, and transportation, along with tariffs, are adding pressure on margins [4] - Companies are implementing pricing strategies and cost-reduction actions to counter these challenges [4] E-commerce Impact - E-commerce accounted for over 19% of global retail sales in 2023, with revenues projected to reach $4.3 trillion by 2025, growing at a CAGR of 8% from 2025 to 2029 [5] - The U.S. online retail market is expected to exceed $1.5 trillion by 2026, while China's e-commerce market is projected to reach $2 trillion by 2027 [5] - The industry has significant exposure (over 60%) to consumer-oriented markets, ensuring stable demand for packaging solutions [5] Eco-Friendly Trends - There is a growing preference for biodegradable packaging materials driven by increased consumer awareness of environmental issues [6] - The industry is adopting new technologies and innovative products to meet this demand, including incorporating recycled content into production [6] Industry Performance - The Zacks Containers - Paper and Packaging industry ranks 149 out of 246 Zacks industries, placing it in the bottom 39% [8][9] - The industry has underperformed the S&P 500, declining 13.3% over the past year compared to the S&P 500's growth of 9.1% [10] Valuation Metrics - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 19.76X, higher than the S&P 500's 12.88X and the Industrial Products sector's 19.30X [13] - Over the last five years, the industry has traded between 16.28X and 24.25X, with a median of 20.60X [16] Company Highlights - **Brambles (BXBLY)**: Reported a 1% year-over-year revenue increase to $4.9 billion, with expectations of 4-5% revenue growth in fiscal 2025 and underlying profit growth of 8-11% [17][18] - **AptarGroup (ATR)**: The Pharma segment is seeing healthy demand for drug delivery systems, with a focus on acquisitions to expand technology and market presence [22][23] - **Amcor (AMCR)**: Recently merged with Berry Global, expecting $260 million in pre-tax synergies in fiscal 2026 and projected annual cash flow exceeding $3 billion by FY28 [26][27]

Core Viewpoint - Amcor Plc reported third-quarter fiscal 2025 adjusted EPS of 18 cents, aligning with expectations and the previous year's figure, while also completing the merger with Berry Global, enhancing its market position in consumer and healthcare packaging solutions [1][14]. Financial Performance - Revenues decreased by 2.3% year over year to $3.33 billion, missing the Zacks Consensus Estimate of $3.49 billion [2]. - The cost of sales fell by 1.5% year over year to $2.68 billion, with gross profit declining by 5.5% to $654 million, resulting in a gross margin of 19.6%, down from 20.3% [4]. - Adjusted operating income was $384 million, down 3% from $397 million in the prior-year quarter, with an adjusted operating margin of 11.5% compared to 11.6% [5]. - Adjusted EBITDA was $477 million, a 4% decrease from $499 million in the prior-year quarter, with an adjusted EBITDA margin of 14.3% [6]. Segment Performance - Flexibles segment net sales increased by 0.3% year over year to $2.6 billion, with a volume rise of 1% [7]. - Rigid Packaging segment reported net sales of $728 million, down 10.5% year over year, with a volume decline of 2% [9]. Cash Flow and Balance Sheet - As of the end of the fiscal third quarter, Amcor had $2.05 billion in cash and cash equivalents, up from $588 million at the end of fiscal 2024 [12]. - Net debt totaled $6.75 billion, an increase from $6.11 billion as of June 30, 2024 [12]. Guidance and Future Outlook - Adjusted EPS guidance for FY25 has been lowered to 72-74 cents from the previous 72-76 cents, with projected adjusted free cash flow of $900-$1,000 million [13]. - The merger with Berry Global is expected to yield 35% EPS accretion by FY28, with anticipated pre-tax synergies of $260 million in fiscal 2026 [14][15]. Market Performance - Over the past year, Amcor's shares have decreased by 6.2%, compared to an 11.4% decline in the industry [17].

Financial Performance - Net sales for the three months ended March 31, 2025, decreased by $78 million, or 2%, compared to the same period in 2024, totaling $3,333 million[138]. - Gross profit for the three months ended March 31, 2025, was $654 million, representing a gross margin of 19.6%, down from 20.3% in 2024[128]. - Operating income increased to $313 million, or 9.4% of net sales, compared to $307 million, or 9.0% of net sales, in the prior year[138]. - Net income attributable to Amcor plc rose by $9 million, or 5%, to $196 million for the three months ended March 31, 2025[139]. - Net sales decreased by $178 million, or 2%, for the nine months ended March 31, 2025, with a remaining decrease of approximately $30 million reflecting higher sales volumes of 1%[151]. - Net income attributable to Amcor plc increased by $77 million, or 16%, for the nine months ended March 31, 2025, mainly due to lower selling, general, and administrative expenses and higher other income[152]. - For the three months ended March 31, 2025, net income attributable to Amcor plc was $196 million, an increase of 4.8% compared to $187 million in the same period of 2024[166]. - Adjusted EBIT for the nine months ended March 31, 2025, was $1,112 million, slightly up from $1,106 million in the prior year, reflecting a growth of 0.5%[166]. Segment Performance - The Flexibles Segment reported net sales of $2,605 million, a slight increase of $7 million, while the Rigid Packaging Segment saw a decrease of $85 million, totaling $728 million[141][143]. - Adjusted EBIT for the Flexibles Segment increased by $16 million, or 2%, for the nine months ended March 31, 2025, reflecting favorable volumes of approximately 8%[155]. - Adjusted EBIT for the Rigid Packaging Segment decreased by $13 million, or 7%, for the nine months ended March 31, 2025, primarily due to unfavorable volumes of approximately 7%[157]. Expenses and Costs - Gross profit decreased by $38 million, or 5%, for the three months ended March 31, 2025, with gross profit as a percentage of net sales declining to 19.6%[145]. - Selling, general, and administrative expenses decreased by $27 million for the three months ended March 31, 2025, primarily due to cost reduction initiatives and restructuring benefits[146]. - The company incurred $99 million in employee-related expenses and $34 million in fixed asset-related expenses as part of its restructuring plan[133]. - Adjusted EBIT decreased by $16 million, or 22%, for the three months ended March 31, 2025, compared to the same period in 2024, driven by unfavorable volumes of 8% and unfavorable price/mix impacts of approximately 11%[144]. Cash Flow and Debt - Net cash provided by operating activities decreased by $102 million to $276 million for the nine months ended March 31, 2025, compared to $378 million in the same period of 2024[187]. - Total debt as of March 31, 2025, was $8,797 million, an increase from $6,699 million as of June 30, 2024, representing a growth of 31.3%[168]. - Net debt increased to $6,752 million as of March 31, 2025, compared to $6,111 million as of June 30, 2024, indicating a rise of 10.5%[168]. - Net cash provided by financing activities increased by $1,654 million for the nine months ended March 31, 2025, compared to the same period in 2024[190]. - The company had cash outflows of $47 million for the purchase of its own shares during the nine months ended March 31, 2025[203]. Mergers and Restructuring - The company completed the merger with Berry Global Group, Inc. on April 30, 2025, issuing approximately 846 million ordinary shares and paying $2.2 billion to extinguish certain Berry indebtedness[130]. - The company expects to realize an annualized pre-tax benefit of approximately $50 million from restructuring actions related to the Russian business by the end of fiscal year 2025[133]. Tax and Other Income - The effective income tax rate increased by 2.0 percentage points to 20.2% for the nine months ended March 31, 2025, primarily due to the tax impact of the divestiture of Bericap[162]. - Other income, net changed by $95 million for the nine months ended March 31, 2025, primarily driven by lower negative impacts of highly inflationary accounting for subsidiaries in Argentina[161]. Assets and Liabilities - The company’s current assets increased to $1,991 million as of March 31, 2025, compared to $1,325 million as of June 30, 2024, reflecting a growth of 50.3%[181]. - Current liabilities decreased to $1,809 million as of March 31, 2025, from $2,375 million as of June 30, 2024, a reduction of 24.0%[181]. Financing Activities - On March 17, 2025, the company issued additional guaranteed senior notes totaling $2.2 billion, including $725 million due 2028, $725 million due 2030, and $750 million due 2035[193][194]. - As of March 31, 2025, the revolving senior bank debt facility had an aggregate limit of $3.75 billion, with $1.21 billion drawn[199]. - The company declared and paid a cash dividend of $0.1275 per ordinary share during the three months ended March 31, 2025[200]. - The company had an undrawn committed credit facility available amounting to $2.54 billion as of March 31, 2025[198]. - The company maintained a leverage ratio not higher than 3.9 times, in compliance with all applicable covenants under its bank debt facilities as of March 31, 2025[196]. - The company entered into an interest rate swap contract for a notional amount of $400 million, paying a fixed rate of 4.30%[192]. - The company paid a commitment fee of $11 million on the Bridge Facility in the three months ended December 31, 2024[199].

Core Insights - Amcor reported $3.33 billion in revenue for the quarter ended March 2025, reflecting a year-over-year decline of 2.3% [1] - The EPS for the same period was $0.18, unchanged from a year ago, with no EPS surprise against the consensus estimate [1] - The reported revenue was a surprise of -4.37% compared to the Zacks Consensus Estimate of $3.49 billion [1] Financial Performance Metrics - Rigid Packaging net sales were $728 million, falling short of the $795.13 million average estimate, representing a year-over-year decline of 10.5% [4] - Flexible net sales reached $2.61 billion, slightly below the $2.67 billion estimate, with a year-over-year increase of 0.3% [4] - Adjusted EBIT for Flexibles was $357 million, compared to the average estimate of $372.48 million [4] - Adjusted EBIT for Corporate expenses was -$28 million, better than the average estimate of -$31.37 million [4] - Adjusted EBIT for Rigid Packaging was $55 million, below the average estimate of $69.01 million [4] Stock Performance - Amcor shares have returned -4.9% over the past month, contrasting with the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Amcor reported quarterly earnings of $0.18 per share, matching the Zacks Consensus Estimate, and consistent with earnings from the previous year [1] - The company posted revenues of $3.33 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.37%, and down from $3.41 billion a year ago [2] - Over the last four quarters, Amcor has not surpassed consensus EPS or revenue estimates [2][3] Market Performance - Amcor shares have declined approximately 0.9% since the beginning of the year, while the S&P 500 has decreased by 5.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $3.65 billion, and for the current fiscal year, it is $0.73 on revenues of $13.77 billion [7] - The Containers - Paper and Packaging industry is ranked in the bottom 17% of over 250 Zacks industries, which may negatively impact Amcor's stock performance [8]

Financial Data and Key Metrics Changes - Amcor reported net sales of CHF 3.3 billion and EBIT of CHF 384 million, both marginally higher than the previous year [13] - Adjusted EPS grew by 5% on a comparable basis, benefiting from cost management and improved healthcare volumes [14] - The company expects adjusted EPS for fiscal 2025 to be in the range of $0.72 to $0.74 per share [24] Business Line Data and Key Metrics Changes - In the Flexibles segment, volumes increased by 1%, with modest share gains in healthcare and protein, but offset by weaker consumer demand in North America [15] - The Rigid Packaging segment faced challenges, with net sales approximately 3% lower than last year due to a 2% decline in volumes and unfavorable price mix [19] - Adjusted EBIT for the Rigid Packaging segment was £55 million, impacted by lower volumes and price mix headwinds [20] Market Data and Key Metrics Changes - North American volumes declined by low single digits, particularly in the Beverage sector, while Europe, Asia Pacific, and Latin America saw low to mid single-digit growth [16] - Healthcare volumes improved, with medical volumes up in the high single digits, indicating a recovery in pharmaceutical packaging demand [17] - The overall demand environment in North America became more variable and uncertain, affecting consumer demand [23] Company Strategy and Development Direction - The merger with Berry Global is expected to deliver significant synergies, with an identified total of €650 million over three years, leading to an estimated EPS accretion of over 35% [11] - The company aims to refine its portfolio mix to focus on higher value, faster-growing end markets, enhancing growth rates and margins [10] - Amcor is committed to maintaining a strong investment-grade balance sheet while increasing long-term EPS growth and shareholder value [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving synergies despite a challenging macroeconomic environment, with a clear visibility to significant EPS growth driven by synergies alone [25] - The company anticipates muted overall demand in Q4, aligning with the current macroeconomic conditions and uncertainty around tariff impacts [23] - Management highlighted the importance of understanding consumer behavior changes, particularly in response to inflation and economic uncertainty [70] Other Important Information - The company has returned £550 million in cash to shareholders through a growing dividend, with a declared dividend of $12.75 per share, a 2% increase from the previous year [22] - Amcor's R&D investment is approximately €180 million annually, with over 1,500 R&D professionals dedicated to addressing complex challenges in functionality and sustainability [10] Q&A Session Summary Question: Insights on North American volume decline - Management noted that North American Beverage business saw high single-digit volume declines, primarily due to weak consumer demand and inflationary pressures [31][32] Question: Synergy-driven EPS growth assumptions - Management confirmed that the €260 million in synergies expected for fiscal 2026 is achievable even in a challenging macro environment, with confidence in delivering these synergies [41][42] Question: Breakdown of procurement synergies - Management indicated that procurement synergies will be a major contributor, with initial focus on SG&A, followed by procurement and operations [47][50] Question: Impact of consumer behavior on growth outlook - Management acknowledged that consumer demand has weakened, leading to changes in purchasing behavior, which affects customer forecasts [70][72] Question: Structural issues in North American Beverage business - Management clarified that the current volume decline is not deemed structural, and improvements are expected as volumes recover [80][82]

Financial Data and Key Metrics Changes - The company reported net sales of CHF 3.3 billion and EBIT of CHF 384 million, both marginally higher than the previous year [14] - Adjusted EPS grew by 5% on a comparable basis, benefiting from cost management and improved healthcare volumes [15] - The company expects adjusted EPS for fiscal 2025 to be in the range of $0.72 to $0.74 per share, reflecting two months of earnings from the legacy Berry business [25] Business Line Data and Key Metrics Changes - In the Flexibles segment, volumes were up 1% year-over-year, with modest share gains in healthcare and protein, offset by weaker consumer demand in North America [16] - The Rigid Packaging segment faced challenges, with net sales approximately 3% lower than last year due to a 2% decline in overall volumes and unfavorable price mix impacts [20] - Adjusted EBIT for the Rigid Packaging segment was £55 million, impacted by lower volumes and price mix headwinds [21] Market Data and Key Metrics Changes - North American volumes were down low single digits, particularly in the Beverage sector, which saw a high single-digit decline [17][32] - Europe, Asia Pacific, and Latin America achieved low to mid single-digit volume growth, with China and India showing mid to high single-digit growth [16][17] - The healthcare market continued to improve, with medical volumes up in the high single digits, indicating strong demand for pharmaceutical packaging [18] Company Strategy and Development Direction - The company aims to deliver identified synergies and accelerate earnings growth following the merger with Berry Global, with a synergy run rate expected to start strong in fiscal 2026 [8][12] - The combined entity will focus on higher value, faster-growing end markets, optimizing R&D investments to address complex functionality and sustainability challenges [11] - The company plans to prune its portfolio to enhance growth rates, margins, and cash generation across remaining segments [11][56] Management's Comments on Operating Environment and Future Outlook - Management noted a variable and uncertain demand environment, particularly in North America, driven by consumer affordability issues and inflation [32][34] - The company remains confident in achieving significant EPS growth through synergies, independent of macroeconomic conditions [26][41] - Management anticipates muted overall demand in Q4, aligning with current macroeconomic conditions, but expects to maintain earnings within original guidance [25] Other Important Information - The company has returned £550 million in cash to shareholders through dividends, with a 2% increase in the March dividend compared to the previous year [24] - The integration teams have already identified €650 million in synergies, with €260 million expected to benefit fiscal 2026 earnings [12][26] Q&A Session Summary Question: Insights on North American volume decline - Management indicated that North American Beverage business saw high single-digit declines due to weak consumer demand, particularly in discretionary categories [32][34] Question: Synergy-driven EPS growth assumptions - Management confirmed that the €260 million in synergies for fiscal 2026 is expected to provide a 12% EPS uplift, independent of organic growth assumptions [36][41] Question: Breakdown of synergies, particularly procurement - Management stated that procurement will be a major contributor to synergies, with initial focus on SG&A, followed by procurement and operations [46][49] Question: Portfolio pruning timing and strategy - Management emphasized the importance of dynamic portfolio management and indicated that the assessment of businesses will continue, but timing for execution remains uncertain [55][56] Question: Procurement synergies and supplier engagement - Management highlighted the importance of harmonizing supplier terms and leveraging the combined entity's purchasing power to achieve procurement synergies [95][96]