Amcor(AMCR) - 2023 Q2 - Quarterly Report

Financial Performance - Net sales for the three months ended December 31, 2022, increased by $135 million (4%) to$ 3,642 million compared to $3,507 million in the same period in 2021[127] - Net income attributable to Amcor plc increased by$ 234 million (104%) to $459 million for the three months ended December 31, 2022, driven by a$ 215 million pre-tax net gain from the disposal of the Russian business[128] - Diluted earnings per share (Diluted EPS) increased by $0.159 (107%) to$ 0.307 for the three months ended December 31, 2022, compared to $0.148 in the same period in 2021[128] - Gross profit for the three months ended December 31, 2022, was$ 662 million (18.2% of net sales), up from $645 million (18.4%) in the same period in 2021[116] - Operating income for the three months ended December 31, 2022, was$ 559 million (15.3% of net sales), a significant increase from $322 million (9.2%) in the same period in 2021[116] - Net sales for the six months ended December 31, 2022, increased by$ 427 million (6%), with a 2% increase excluding raw material costs, currency impacts, and acquisition impacts[140] - Net income attributable to Amcor plc increased by $264 million (62%) for the six months ended December 31, 2022, mainly due to a$ 215 million pre-tax net gain from the disposal of the Russian business[141] - Net income attributable to Amcor plc for the six months ended December 31, 2022 was $691 million, up from$ 427 million in the same period in 2021[155] - Adjusted EBIT for the six months ended December 31, 2022 was $791 million, compared to$ 769 million in the same period in 2021[155] Segment Performance - The Flexibles segment's net sales increased by $99 million (4%) to$ 2,812 million for the three months ended December 31, 2022, compared to $2,713 million in the same period in 2021[129] - Adjusted EBIT for the Flexibles segment was$ 353 million (12.6% of net sales) for the three months ended December 31, 2022, compared to $352 million (13.0%) in the same period in 2021[129] - Rigid Packaging Segment net sales increased by$ 36 million (4%) in Q4 2022, but decreased by $37 million (5%) excluding raw material cost pass-through and currency impacts[131] - Adjusted EBIT for Q4 2022 increased by$ 2 million (5%), with a 6% increase excluding currency impacts, driven by a 48% favorable price/mix[132] Disposal of Russian Business - The company sold its Russian manufacturing facilities for net cash proceeds of $365 million, with a pre-tax net gain of$ 215 million[123] - Restructuring and related activities, net, changed by $223 million in Q4 2022, mainly due to a$ 215 million pre-tax net gain from the disposal of the Russian business[135] Costs and Expenses - Consolidated gross profit increased by $17 million (3%) in Q4 2022, with gross profit as a percentage of net sales decreasing to 18.2% due to higher raw material costs[133] - Selling, general, and administrative expenses decreased by$ 5 million (2%) in Q4 2022, primarily due to positive currency impacts[134] - Interest expense increased by $40 million (103%) in Q4 2022, driven by higher interest rates on variable rate debt[136] - Interest expense increased by$ 59 million, or 75%, for the six months ended December 31, 2022, compared to the same period in 2021, driven by higher interest rates on variable rate debt[149] Tax and Income Mix - Effective income tax rate decreased by 14.3 percentage points in Q4 2022, primarily due to differences in income mix and discrete events[138] - The effective tax rate for the six months ended December 31, 2022 decreased by 10.7 percentage points to 11.6%, primarily due to differences in income mix and discrete events[150][151] Debt and Financing - Net debt increased to $6,065 million as of December 31, 2022, up from$ 5,715 million as of June 30, 2022[159] - Net debt as of December 31, 2022, was $6.1 billion, compared to$ 5.7 billion as of June 30, 2022[178] - Undrawn credit facilities available as of December 31, 2022, amounted to $0.9 billion, with senior facilities maturing in April 2025 and April 2027[179] - The company entered into interest rate swap contracts for a total notional amount of$ 1.25 billion, with a weighted average fixed rate of 4.53%[176] Share Repurchases and Dividends - The company plans to repurchase up to $100 million in additional shares and use the remaining cash from the Russian business sale to reduce net debt[124] - The Board of Directors approved a$ 400 million share buyback program, with $40 million repurchased during the six months ended December 31, 2022[182] - Cash outflows for share purchases in the open market and using forward contracts totaled$ 221 million for the six months ended December 31, 2022[183] - The company held treasury shares at a cost of $18 million, representing 2 million shares as of December 31, 2022[183] - The company declared and paid cash dividends of$ 0.12 per ordinary share in Q1 FY2022 and $0.1225 per ordinary share in Q2 FY2022[180] Cash Flow - Net cash provided by operating activities decreased by$ 178 million for the six months ended December 31, 2022, compared to the same period in 2021, primarily due to higher working capital outflows[174] - Net cash used in/provided by investing activities increased by $289 million for the six months ended December 31, 2022, driven by disposal proceeds from the sale of the Russian business, partially offset by acquisitions and investments[174] - Net cash used in financing activities decreased by$ 145 million for the six months ended December 31, 2022, due to lower share buybacks and net debt drawdowns[175] Obligor Group Performance - The Obligor Group, consisting of Amcor plc and its guarantor subsidiaries, reported a net loss of $244 million for the six months ended December 31, 2022[166] - Total assets of the Obligor Group decreased to$ 12,554 million as of December 31, 2022, from $13,711 million as of June 30, 2022[167] - Total liabilities of the Obligor Group decreased to$ 18,536 million as of December 31, 2022, from $19,748 million as of June 30, 2022[167]