Amcor(US:AMCR)2025-08-15 20:21Part I Business Amcor, a global leader in consumer packaging, operates through flexible and rigid packaging segments post-merger with Berry Global Group, Inc., focusing on customer-centricity, sustainability, and portfolio optimization - On April 30, 2025, Amcor completed its merger with Berry Global Group, Inc. Under the agreement, Berry shareholders received 7.25 Amcor ordinary shares for each share of Berry common stock17 - The company's business strategy is centered on three core elements: a customer-first mindset, leadership in sustainability and innovation, and optimizing its portfolio towards high-growth, high-margin categories181921 Segment Contribution to Net Sales (Fiscal Year 2025) | Segment | Percentage of Consolidated Net Sales | Employees | Manufacturing Facilities | Countries | | :--- | :--- | :--- | :--- | :--- | | Global Flexible Packaging Solutions | ~72% | ~42,000 | 210 | 36 | | Global Rigid Packaging Solutions | ~28% | ~34,000 | 213 | 34 | - Amcor has made significant sustainability commitments, including designing all packaging to be recyclable, compostable, or reusable by 2025, using 30% recycled materials by 2030, and achieving net zero emissions by 20503235 - Post-merger, the company expects to spend approximately $180 million annually on research and development (R&D) and holds over 7,000 patents, registered designs, and trademarks33 Human Capital Overview (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total Employees | ~77,000 | | Regional Breakdown | North America (38%), EMEA (35%), Latin America (12%), Asia Pacific (15%) | | Collective Bargaining Coverage | ~37% | Risk Factors The company faces significant risks from the Berry merger integration, increased indebtedness, shifts in consumer demand, raw material price volatility, cybersecurity threats, potential goodwill impairment, and evolving ESG regulations - Risks related to the Berry merger include difficulties in integrating the two complex businesses, retaining key personnel, harmonizing corporate cultures, and realizing expected synergies6773 - The combined company had $14.1 billion of debt outstanding as of June 30, 2025, which may limit operational flexibility and increase borrowing costs74 - The company faces strategic risks from shifts in consumer preferences towards more sustainable packaging, potential loss of key customers, and intense competition on price, innovation, and quality788083 - Operational risks include challenging global economic conditions, complexities of international operations with 25% of sales from emerging markets, and price fluctuations or shortages of key raw materials like polymer resins and aluminum889198 - The company is exposed to cybersecurity risks, including cyber-attacks and IT system disruptions, heightened by geopolitical instability and the integration of Berry's systems112115 - As of June 30, 2025, the company had $18.7 billion of goodwill and other intangible assets, primarily from the merger, where a significant impairment would materially affect financial results123 - The company faces increasing legal and compliance risks from evolving ESG regulations, including climate-related rules, extended producer responsibility (EPR) programs, and restrictions on substances like PFAS133135 Unresolved Staff Comments The company reports no unresolved staff comments from the Securities and Exchange Commission - None Cybersecurity The company's cybersecurity governance involves Board and Audit Committee oversight, with a CISO leading a NIST-based program that includes assessments, training, and vendor risk management, actively integrating Berry's systems post-merger - Cybersecurity oversight is shared by the Board of Directors, the Audit Committee, and management, with the CISO having over 20 years of experience leading the enterprise-wide information security strategy151152 - The company has implemented a cybersecurity program based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework to manage risks153 - Integration efforts are underway to unify the cybersecurity risk programs of Amcor and the recently acquired Berry, focusing on harmonizing policies, processes, and operations150 Properties As of June 30, 2025, the company operates 423 manufacturing and support facilities across its two segments, with the majority being owned Manufacturing and Support Facilities (as of June 30, 2025) | Segment | Number of Facilities | Ownership Status | | :--- | :--- | :--- | | Global Flexible Packaging Solutions | 210 | ~75% owned, ~25% leased | | Global Rigid Packaging Solutions | 213 | ~55% owned, ~45% leased | Legal Proceedings Information regarding legal proceedings is provided in Note 20 of the notes to the consolidated financial statements - Refer to Note 20, "Contingencies and Legal Proceedings," of the notes to consolidated financial statements for information about legal proceedings159 Mine Safety Disclosures This item is not applicable to the company - Not applicable Part II Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Amcor's ordinary shares trade on the NYSE and its CDIs on the ASX, with 92,040 registered holders as of June 30, 2025, and no share repurchases during the quarter, with a performance graph showing cumulative total shareholder return - The company's ordinary shares are traded on the New York Stock Exchange (NYSE) under the symbol AMCR, and its CHESS Depositary Instruments (CDIs) are traded on the Australian Securities Exchange (ASX) under the symbol AMC161 - No shares were repurchased during the three months ended June 30, 2025, and there were no outstanding approved share repurchase programs during that period162 Cumulative Total Shareholder Return (Assuming $100 Invested on June 30, 2020) | Date | Amcor plc | S&P 500 | S&P 500 Materials | S&P/ASX 200 | Peer Group | | :--- | :--- | :--- | :--- | :--- | :--- | | June 30, 2020 | $100.00 | $100.00 | $100.00 | $100.00 | $100.00 | | June 30, 2025 | $112.74 | $215.89 | $172.77 | $177.69 | $126.58 | Reserved This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations In fiscal year 2025, Amcor's financial performance was significantly shaped by the merger with Berry Global Group, Inc., resulting in increased net sales to $15.0 billion but decreased net income to $511 million, with strong liquidity despite increased net debt to $13.3 billion - The merger with Berry Global Group, Inc. was completed on April 30, 2025, for a purchase consideration of $10.4 billion, with Amcor assuming approximately $5.2 billion of Berry's debt171 - The company targets realizing approximately $530 million of pre-tax synergies from the Berry merger by the end of fiscal year 2028, with an estimated total pre-tax cash cost of $280 million for restructuring and integration172 Consolidated Results of Operations (FY2025 vs. FY2024) | Metric | FY2025 ($ in millions) | FY2024 ($ in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | 15,009 | 13,640 | +10% | | Operating Income | 1,009 | 1,214 | -17% | | Net Income attributable to Amcor plc | 511 | 730 | -30% | | Diluted EPS | $0.320 | $0.505 | -37% | Segment Performance (FY2025 vs. FY2024) | Segment | Net Sales (FY25, $ in millions) | Sales Change (%) | Adjusted EBIT (FY25, $ in millions) | EBIT Change (%) | | :--- | :--- | :--- | :--- | :--- | | Global Flexible Packaging Solutions | 10,872 | +5% | 1,458 | +5% | | Global Rigid Packaging Solutions | 4,137 | +25% | 375 | +45% | Cash Flow Summary (FY2025 vs. FY2024) | Cash Flow Activity | FY2025 ($ in millions) | FY2024 ($ in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | 1,390 | 1,321 | | Net cash used in investing activities | (2,102) | (476) | | Net cash provided by/(used in) financing activities | 910 | (857) | - Net debt increased significantly to $13.3 billion as of June 30, 2025, from $6.1 billion at June 30, 2024, primarily due to the Berry merger219199 - Critical accounting estimates include business combinations (especially valuing intangible assets from the Berry merger), pension obligations, impairment testing of goodwill and other intangible assets, and deferred taxes236242249254 Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks including interest rate, foreign exchange, commodity price, and credit risk, using derivatives to manage these exposures, with a 1% increase in floating interest rates impacting pre-tax income by $24 million and a 1% increase in raw material prices reducing pre-tax income by $97 million - A hypothetical 1% increase in the floating interest rate would result in an adverse impact on income before income taxes of $24 million for fiscal year 2025259 - The company is exposed to foreign exchange risk, where a hypothetical 1% adverse change in the Euro exchange rate would have impacted FY2025 net sales by $26 million, with operations in Argentina also posing currency risk260261 - A hypothetical 1% increase in the average prices of primary raw materials (e.g., polymer resins, aluminum) not passed on to customers would have resulted in an adverse impact on pre-tax income of approximately $97 million for fiscal year 2025265 Financial Statements and Supplementary Data This section contains the company's audited consolidated financial statements for fiscal years 2023-2025 and accompanying notes, with an unqualified auditor opinion on financial statements and internal controls, excluding the recently acquired Berry Global Group, Inc. from the internal control audit - The independent auditor, PricewaterhouseCoopers AG, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 30, 2025271 - The audit of internal control over financial reporting excluded the recently acquired Berry Global Group, Inc., which represented 36.0% of total assets and 10.6% of total revenues for the year ended June 30, 2025275 - The auditor identified the "Acquisition of Berry Global Group, Inc. – Valuation of Customer Relationships" as a Critical Audit Matter due to the significant management judgment and high degree of auditor subjectivity involved in estimating the fair value of the $5.5 billion in acquired customer relationships280281 Key Financial Statement Data (in millions) | Account | June 30, 2025 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | Total Assets | $37,066 | $16,524 | | Total Liabilities | $25,326 | $12,571 | | Total Shareholders' Equity | $11,740 | $3,953 | | Net Cash from Operations (FY25) | $1,390 | $1,321 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None Controls and Procedures Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of June 30, 2025, with the latter assessment excluding the recently acquired Berry business - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025557 - Management concluded that the company maintained effective internal control over financial reporting as of June 30, 2025, with the independent auditor's report concurring with this assessment560561 - The assessment of internal control over financial reporting for the fiscal year ended June 30, 2025, excluded the recently acquired Berry business, which was acquired on April 30, 2025559 Other Information During the fourth quarter of fiscal 2025, no director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025563 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable Part III Directors, Executive Officers and Corporate Governance Information regarding directors and corporate governance is incorporated by reference from the company's definitive proxy statement, which will be filed within 120 days of the fiscal year-end - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Shareholder Meeting565 Executive Compensation Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement, which will be filed within 120 days of the fiscal year-end - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Shareholder Meeting569 Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters This section provides details on equity compensation plans as of June 30, 2025, with further information regarding security ownership incorporated by reference from the company's definitive proxy statement Equity Compensation Plans (as of June 30, 2025) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by security holders | 62,379,640 | $10.17 | 35,901,203 | | Not approved by security holders | 0 | N/A | 0 | | Total | 62,379,640 | $10.17 | 35,901,203 | - Additional required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Shareholder Meeting572 Certain Relationships and Related Transactions, and Director Independence Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive proxy statement, which will be filed within 120 days of the fiscal year-end - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Shareholder Meeting573 Principal Accountant Fees and Services Information regarding principal accountant fees and services is incorporated by reference from the company's definitive proxy statement, which will be filed within 120 days of the fiscal year-end - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Shareholder Meeting574 Part IV Exhibits and Financial Statement Schedules This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K, including the Report of the Independent Registered Public Accounting Firm, consolidated financial statements, and a comprehensive list of exhibits - This section contains the list of all financial statements, schedules, and exhibits filed with the Form 10-K575 - Financial Statement Schedule II - Valuation and Qualifying Accounts and Reserves is included in the filing575 Form 10-K Summary No Form 10-K summary is provided - None