Amcor(AMCR) - 2025 Q4 - Annual Results

Executive Summary and Financial Highlights Amcor's fiscal 2025 results highlight the transformative Berry Global acquisition, positioning the company for strong fiscal 2026 earnings and free cash flow growth Overview and CEO Remarks Amcor's CEO emphasized the Berry Global acquisition as a milestone, driving strong fiscal 2026 earnings and free cash flow growth, with integration on track and a $20 billion core portfolio identified - The acquisition of Berry Global is a significant milestone, expected to drive strong adjusted EPS growth of 12-17% and Free Cash Flow of $1.8-$1.9 billion in fiscal 2026[1] - Integration is progressing well, with synergy targets on track; a strategic portfolio review has identified a $20 billion core portfolio focused on consumer packaging and dispensing solutions for nutrition and health[2] Fiscal 2025 Performance Highlights For fiscal 2025, Amcor achieved 11% constant currency net sales growth to $15,009 million, 12% adjusted EBIT growth to $1,723 million, and 3% adjusted EPS growth to 71.2 cents per share Fiscal Year 2025 Highlights | Metric | Value | Constant Currency Growth | | :--- | :--- | :--- | | Net Sales | $15,009 million | 11% | | Adjusted EBITDA | $2,186 million | 13% | | Adjusted EBIT | $1,723 million | 12% | | Adjusted EPS | 71.2 cps | 3% | | Adjusted Free Cash Flow | $926 million | N/A | | Annual Dividend | 51 US cents per share | N/A | Q4 Fiscal 2025 Performance Highlights Q4 fiscal 2025 results show significant impact from the Berry Global acquisition, with 43% constant currency net sales growth to $5,082 million, a GAAP Net Loss of $39 million, and strong adjusted EBITDA and EBIT growth Q4 Fiscal 2025 Highlights | Metric | Value | Constant Currency Growth | | :--- | :--- | :--- | | Net Sales | $5,082 million | 43% | | GAAP Net Income | ($39) million | N/A | | Adjusted EBITDA | $789 million | 43% | | Adjusted EBIT | $611 million | 34% | Key Financials Summary This table provides a comparative overview of Amcor's GAAP and adjusted non-GAAP financial metrics for Q4 and full fiscal years 2024 and 2025, reflecting significant top-line growth post-acquisition GAAP and Adjusted Non-GAAP Results (in millions, except EPS) | Metric | Q4 2024 | Q4 2025 | FY 2024 | FY 2025 | | :--- | :--- | :--- | :--- | :--- | | GAAP Results | | | | | | Net Sales | $3,535 | $5,082 | $13,640 | $15,009 | | Net Income | $257 | ($39) | $730 | $511 | | EPS (diluted US cents) | 17.8 | (1.9) | 50.5 | 32.0 | | Adjusted Non-GAAP Results | | | | | | Net Sales | $3,535 | $5,082 | $13,640 | $15,009 | | EBIT | $454 | $611 | $1,560 | $1,723 | | Net Income | $305 | $408 | $1,015 | $1,136 | | EPS (diluted US cents) | 21.1 | 20.0 | 70.2 | 71.2 | | Free Cash Flow | $837 | $943 | $952 | $926 | Strategic Developments and Shareholder Returns Amcor completed the Berry Global acquisition, reorganizing into two segments, identifying a core portfolio, and increasing its quarterly cash dividend Berry Global Acquisition and Integration Amcor completed the all-stock acquisition of Berry Global on April 30, 2025, targeting $650 million in pre-tax synergies by fiscal 2028, and reorganized into Global Flexible and Rigid Packaging Solutions - The all-stock acquisition of Berry Global was completed on April 30, 2025[7] - Amcor is targeting total pre-tax synergy benefits of $650 million by the end of fiscal 2028, with $260 million expected in fiscal 2026[10] - The company has been reorganized into two segments: Global Flexible Packaging Solutions and Global Rigid Packaging Solutions, combining legacy businesses from both Amcor and Berry Global[9] Portfolio Review and Optimization A portfolio review identified a $20 billion core portfolio focused on consumer packaging for nutrition and health, while businesses with $2.5 billion in sales are under review for strategic alternatives - A review identified a $20 billion core portfolio focused on consumer packaging and dispensing solutions for nutrition and health[11] - Businesses with combined annual sales of approximately $2.5 billion, including the $1.5 billion North America Beverage business, are considered less aligned with the core portfolio and are under review for strategic alternatives such as restructuring, partnership, or sale[12] Shareholder Returns Amcor's Board declared a quarterly cash dividend of 12.75 cents per share, increasing the total annual dividend for fiscal 2025 to 51.0 cents per share Quarterly Dividend Information | Metric | Value | | :--- | :--- | | Quarterly Dividend per Share | 12.75 US cents | | Annual Dividend for FY2025 | 51.0 US cents | | Ex-dividend Date (ASX) | September 4, 2025 | | Ex-dividend Date (NYSE) | September 5, 2025 | | Record Date | September 5, 2025 | | Payment Date | September 25, 2025 | Financial Performance Analysis Amcor's fiscal 2025 net sales grew 10% to $15,009 million and adjusted EBIT increased 12% in constant currency, primarily driven by the Berry Global acquisition Consolidated Financial Results For fiscal 2025, Amcor's net sales grew 10% to $15,009 million and adjusted EBIT increased 12% in constant currency, largely driven by the Berry Global acquisition, despite some volume and price/mix offsets - For FY2025, constant currency net sales grew 11%, driven by a 10% contribution from acquired sales and 1% from higher volumes, partially offset by a 1% unfavorable price/mix[24] - For Q4 2025, constant currency net sales grew 43%, almost entirely due to a 43% contribution from acquired sales, with overall volumes declining by 1.7%[19][20] - FY2025 adjusted EBIT grew 12% in constant currency, with a 13% contribution from acquisitions, partly offset by unfavorable price/mix, though strong cost performance and higher volumes provided some benefit[25] Segment Performance: Global Flexible Packaging Solutions The Global Flexible Packaging Solutions segment saw fiscal 2025 net sales increase by 6% in constant currency to $10,872 million and adjusted EBIT up 5% to $1,458 million, driven by acquisitions and volume growth Global Flexible Packaging Solutions - Q4 FY2025 | Metric | Q4 2024 ($M) | Q4 2025 ($M) | Constant Currency ∆% | | :--- | :--- | :--- | :--- | | Net Sales | 2,686 | 3,205 | 18% | | Adjusted EBIT | 403 | 450 | 11% | | Adjusted EBIT Margin | 15.0% | 14.1% | N/A | Global Flexible Packaging Solutions - Full Year FY2025 | Metric | FY 2024 ($M) | FY 2025 ($M) | Constant Currency ∆% | | :--- | :--- | :--- | :--- | | Net Sales | 10,332 | 10,872 | 6% | | Adjusted EBIT | 1,395 | 1,458 | 5% | | Adjusted EBIT Margin | 13.5% | 13.4% | N/A | - In Q4, combined volumes for the segment were down approximately 1.5%, with low single-digit declines in North America and lower volumes in Europe, while emerging markets saw low single-digit growth[30] Segment Performance: Global Rigid Packaging Solutions The Global Rigid Packaging Solutions segment experienced dramatic growth in fiscal 2025, with constant currency net sales up 26% to $4,137 million and adjusted EBIT surging 47% to $375 million, primarily due to the Berry acquisition Global Rigid Packaging Solutions - Q4 FY2025 | Metric | Q4 2024 ($M) | Q4 2025 ($M) | Constant Currency ∆% | | :--- | :--- | :--- | :--- | | Net Sales | 849 | 1,877 | 121% | | Adjusted EBIT | 75 | 204 | 173% | | Adjusted EBIT Margin | 8.8% | 10.9% | N/A | Global Rigid Packaging Solutions - Full Year FY2025 | Metric | FY 2024 ($M) | FY 2025 ($M) | Constant Currency ∆% | | :--- | :--- | :--- | :--- | | Net Sales | 3,308 | 4,137 | 26% | | Adjusted EBIT | 259 | 375 | 47% | | Adjusted EBIT Margin | 7.8% | 9.1% | N/A | - In Q4, combined volumes for the segment were down approximately 2%, or 1% excluding North America beverage; the decline was partly due to operating challenges and higher costs in the North America Beverage business[36][37] Other Financial Items Fiscal 2025 adjusted net interest expense rose to $332 million due to acquisition-related debt, adjusted free cash flow was $926 million, and net debt reached $13,271 million, including $7.4 billion from the Berry Global acquisition - Adjusted net interest expense for FY2025 was $332 million, up from $310 million last year, due to increased debt from the acquisition[41] - Adjusted free cash flow for FY2025 was $926 million, compared to $952 million in the prior year[42] - Net debt increased to $13,271 million as of June 30, 2025, which includes about $7.4 billion of debt from Berry Global[42] Fiscal 2026 Outlook Amcor forecasts strong fiscal 2026 adjusted EPS of 80 to 83 cents per share, representing 12% to 17% constant currency growth, and robust free cash flow of $1.8 to $1.9 billion Fiscal 2026 Guidance Amcor's fiscal 2026 guidance projects adjusted EPS of 80 to 83 cents per share (12-17% constant currency growth) and free cash flow of $1.8 to $1.9 billion, including $260 million in Berry Global synergy benefits Fiscal 2026 Guidance | Metric | Guidance Range | Notes | | :--- | :--- | :--- | | Adjusted EPS | 80 - 83 cents per share | 12% to 17% constant currency growth | | Free Cash Flow | $1.8 - $1.9 billion | After ~$220M integration/transaction costs | | Capital Expenditure | $850 - $900 million | | | Net Interest Expense | $570 - $600 million | | | Effective Tax Rate | 19% - 21% | | - The guidance includes pre-tax synergy benefits of approximately $260 million related to the Berry Global acquisition[48] - The guidance reflects a full 12 months of ownership of Berry Global and does not account for the impact of potential portfolio optimization actions[43] Appendix: Financial Statements & Reconciliations This appendix provides unaudited U.S. GAAP financial statements and detailed reconciliations of non-GAAP measures, offering a comprehensive view of Amcor's financial performance and position U.S. GAAP Financial Statements This section presents unaudited U.S. GAAP condensed consolidated financial statements for periods ending June 30, 2025, including Statements of Income, Cash Flows, and Balance Sheets - The Condensed Consolidated Statements of Income show a GAAP net loss of $39 million for Q4 2025 and net income of $511 million for FY 2025, impacted by significant restructuring, transaction, and integration expenses[56] - The Condensed Consolidated Balance Sheet as of June 30, 2025, shows total assets of $37,066 million and total liabilities of $25,326 million, reflecting the significant increase in assets and debt following the Berry Global acquisition[58] - The Condensed Consolidated Statements of Cash Flows for FY 2025 show net cash provided by operating activities of $1,390 million and a net increase in cash of $239 million for the year[57] Reconciliation of Non-GAAP Measures This section reconciles non-GAAP financial measures to U.S. GAAP, detailing adjustments for items like restructuring costs, acquisition-related expenses, and amortization of acquired intangibles - For Q4 2025, GAAP Net Income of ($39) million is reconciled to Adjusted Net Income of $408 million; major adjustments include $166 million for Berry Transaction & Integration costs, $133 million for inventory step-up amortization, and $130 million for amortization of acquired intangibles[61] - For FY 2025, GAAP Net Income of $511 million is reconciled to Adjusted Net Income of $1,136 million; key adjustments include $246 million for amortization of acquired intangibles, $202 million for Berry Transaction & Integration costs, and $133 million for inventory step-up amortization[63] - A reconciliation of net debt is provided, showing an increase from $6,111 million at June 30, 2024, to $13,271 million at June 30, 2025[70] Components of Net Sales Growth This table breaks down fiscal 2025 net sales growth into foreign exchange, raw material pass-through, comparability items (acquisitions), and organic growth (volume and price/mix) FY2025 Total Company Net Sales Growth Components | Component | Q4 FY2025 | Full Year FY2025 | | :--- | :--- | :--- | | Reported Growth % | 44% | 10% | | FX % | 1% | (1)% | | Constant Currency Growth % | 43% | 11% | | Raw Material Pass Through % | 1% | 1% | | Items affecting comparability % | 43% | 10% | | Organic Growth % | (1)% | 0% | | - Volume % | (2)% | 1% | | - Price/Mix % | 1% | (1)% |