Fiscal 2026 Second Quarter Results Peter Konieczny Chief Executive Officer Steve Scherger Chief Financial Officer 3 February 2026 5:30pm US EST 4 February 2026 9:30am Australian EDT 1 Disclaimers and Notes Cautionary Statement Regarding Forward-Looking Statements Unless otherwise indicated, references to "Amcor," the "Company," "we," "our," and "us" in this document refer to Amcor plc and its consolidated subsidiaries. This document contains certain statements that are "forward-looking statements" within th ...

Core Insights - Amcor reported solid second quarter results for fiscal 2026, reaffirming its guidance for the year, with strong adjusted EPS growth driven by the Berry acquisition and disciplined execution [1][2][3] Financial Performance - For the three months ended December 31, 2025, net sales reached $5,449 million, a 68% increase year-over-year, primarily due to the Berry acquisition [1][2] - Adjusted EPS for the quarter was $0.86, up 7%, while adjusted EBITDA was $826 million, reflecting an 83% increase [1][2] - Free cash flow for the quarter was $289 million, including $69 million in acquisition-related costs [1][2] Fiscal Guidance - The company reaffirmed its fiscal 2026 guidance, expecting free cash flow between $1.8 billion and $1.9 billion and adjusted EPS in the range of $4.00 to $4.15, indicating a constant currency growth of 12% to 17% [1][2][3] Segment Performance - In the Global Flexible Packaging Solutions segment, net sales for the December 2025 quarter were $3,188 million, a 23% increase year-over-year on a constant currency basis [2][3] - The Global Rigid Packaging Solutions segment saw net sales of $2,264 million, a 200% increase year-over-year on a constant currency basis, driven by the Berry acquisition [3][4] Cost Management - Adjusted EBIT for the three months ended December 31, 2025, was $603 million, a 62% increase year-over-year, with synergy benefits from the Berry acquisition contributing approximately $50 million [1][2][3] - The company reported a GAAP net income of $177 million for the quarter, including acquisition-related costs [1][2] Dividend Declaration - Amcor declared a quarterly dividend of $0.65 per share, reflecting confidence in its growth opportunities and ability to generate significant free cash flow [2][3]

Core Insights - Magnera reported a strong performance in the fourth quarter of 2025, achieving net sales of $839 million, a 51% increase compared to the same quarter in 2024, driven by the Glatfelter merger and favorable foreign currency changes [3][6][5] - The company aims to improve reported earnings by approximately 9% in 2026 through cost improvement and capacity optimization initiatives [2][14] - Magnera's adjusted EBITDA for the fiscal year 2025 was $354 million, reflecting a 26% increase from the previous year [3][5] Financial Performance - For the September quarter, net sales reached $839 million, with an operating income of $10 million, compared to a loss of $167 million in the same quarter of 2024 [3][5] - The fiscal year 2025 net sales totaled $3.2 billion, up from $2.2 billion in 2024, while operating income improved to $5 million from a loss of $141 million [3][5] - Adjusted EBITDA for the September quarter was $90 million, a 36% increase year-over-year, and for the fiscal year, it was $354 million, a 26% increase [3][5][7] Segment Performance - In the Americas segment, net sales increased by $122 million due to the Glatfelter merger, although this was partially offset by a $28 million decrease in selling prices and a 3% organic volume decline [8][9] - The Rest of World segment saw a net sales increase of $206 million, aided by the Glatfelter merger and favorable foreign currency impacts, despite a 4% organic volume decline [10] Cash Flow and Debt Management - Magnera achieved record cash flow with cash from operations of $96 million in the fourth quarter and a post-merger adjusted free cash flow of $126 million, representing a yield of over 30% [5][12] - The company is focused on reducing leverage, ending the fiscal year with a leverage ratio of 3.8x and total net debt of $1.647 billion [13][11] Future Guidance - For fiscal year 2026, Magnera projects adjusted EBITDA between $380 million and $410 million, and free cash flow between $90 million and $110 million [14][27]

Core Insights - The Chinese packaging industry is characterized by intense competition, described as "scattered" and "rolled up," with over 60,000 enterprises competing, leading to frequent price wars. However, Amcor has achieved double-digit growth in this market [1][2] - Amcor's strategy focuses on selective market segments rather than broad expansion, emphasizing collaboration with local leaders in areas such as pet food, food packaging, medical devices, and PCB protection films [1][2] Industry Overview - The competitive landscape in the Chinese packaging market is likened to a "gym" for foreign companies, necessitating continuous improvement to maintain competitiveness [2][4] - Amcor has established two R&D centers in China and invested over 1 billion yuan in a smart packaging factory in Huizhou, with annual R&D spending nearing 200 million USD [1][2] Strategic Approach - Amcor avoids price wars by seeking breakthroughs through technology and collaboration, focusing on technical output and ecological synergy rather than large-scale mergers [2][4] - The company has invested over 150 million yuan in its Asia-Pacific R&D center in Jiangyin, aiming to develop cost-effective and quality-enhancing products [2][5] Innovation and Development - Amcor's innovation strategy includes three main areas: quality protection, consumer communication, and emotional value. This involves extending shelf life and enhancing freshness through advanced packaging technologies [6] - The company has developed local alternatives for products like PCB protection films and ultra-thin stretch films, significantly reducing weight and carbon emissions [2][6] Market Dynamics - Local Chinese packaging companies are rapidly growing, prompting Amcor to embrace this competition as beneficial for industry consolidation [4][5] - Amcor's approach to local market demands includes a proactive innovation mechanism, allowing for rapid response to customer needs by leveraging a prepared portfolio of solutions [5][6] Global Perspective - Amcor is not only bringing global technology to China but is also exporting Chinese market innovations back to its global operations, reflecting a shift from "importing" to "exporting" innovation [4][6]

Core Insights - The global rigid packaging market is expected to grow from USD 550.49 billion in 2025 to USD 1,020.61 billion by 2034, with a CAGR of 7.1% driven by demand for eco-friendly and smart packaging solutions [1] - Major players in the market include Amcor, Berry Plastics, and Sealed Air Corporation, with significant markets in North America, Europe, and Asia Pacific [1][3] Market Trends - The rigid packaging sector is heavily reliant on plastic due to its durability, portability, and cost-effectiveness, with 31% of the world's plastic usage attributed to packaging [3] - Rigid packaging is preferred for its lightweight nature compared to glass or metal, which also reduces transportation energy consumption [4] - The shift towards sustainable packaging is evident, with companies adopting recyclable and biodegradable materials, including plant-based plastics and recycled PET [7][14] Regional Insights - North America is projected to experience significant growth in the rigid packaging market, driven by advancements in rigid thermoform plastic packaging [8] - The U.S. holds the largest market share in North America, supported by a substantial consumer base and advanced industrial infrastructure [10][11] - North America accounts for 57% of Berry Global's net sales, with EMEA contributing 35% [23] Company Insights - Berry Global reported USD 13 billion in annual revenue, with a diversified business model across four main segments: Consumer Packaging, Health, Hygiene & Specialties, and Engineered Materials [17][20] - The company emphasizes sustainability, focusing on innovations that promote recyclability and the use of post-consumer recycled content [20][21] - Berry Global's operational footprint includes approximately 290 manufacturing locations worldwide, enhancing its ability to serve global customers [19][23] Environmental Impact - Transitioning to more efficient packaging solutions has led to significant reductions in freight and greenhouse gas emissions, exemplified by a 320% increase in freight efficiency and a 67.92% reduction in annual truck shipments [25][30] - The shift from composite cans to polypropylene containers resulted in a total annual GHG emission reduction of 98 metric tons [25][32]

Core Insights - Amcor reported a net sales of $5.75 billion for Q1 FY2026, reflecting a 71.3% year-over-year increase, marking the first full quarter of integration with Berry Global [1] - The company achieved $38 million in deal synergies from the Berry Global acquisition, with net income attributable to Amcor rising to $262 million from $191 million a year prior [1] - Amcor's guidance for FY2026 includes projected pre-tax synergy benefits of at least $260 million from the Berry acquisition, with expectations of $650 million total by the end of FY2028 [1] Financial Performance - Global flexibles net sales reached $3.26 billion, up 27.6% year over year, while global rigid packaging net sales surged to $2.49 billion, a 210.6% increase year over year [1] - Volume performance in the flexibles unit declined by approximately 2.8% compared to the previous year, while rigid packaging volumes decreased about 1% year over year, excluding the North American beverage business [1] Market Trends - End market performance was described as a "mixed bag," with resilient demand in priority markets like pet care, but challenges in sectors influenced by "value-conscious" consumer behavior, such as meat and protein, food service, and beauty and wellness [1] - In North America, growth in healthcare and beauty and wellness offset weaknesses in nutrition categories, while the North American beverage business is under review for potential alternatives, including joint ventures or partnerships [1] Strategic Actions - Amcor has entered agreements to divest two businesses for approximately $100 million, with ongoing reviews of non-core assets expected to lead to additional actions this fiscal year [1] - The company anticipates free cash flow for FY26 to be between $1.8 billion and $1.9 billion, after accounting for integration and transaction costs related to the Berry acquisition [1]

Financial Performance - Net sales increased by 68% to $5,745 million[11], driven by acquired businesses[19, 23] - Adjusted EBITDA increased by 92% to $909 million[11] - Adjusted EBIT increased by 85% to $687 million[11], including approximately $295 million net acquired earnings[12] - Adjusted EPS increased by 18% to 19.3 cents per share[11] - The company reaffirmed fiscal year 2026 outlook[9, 39] Synergy and Integration - Approximately $38 million in total synergies were delivered in 1Q26[15] - The company is on track to deliver at least $260 million total synergies in fiscal year 2026[13, 14, 46] and $650 million in total[14, 46] - Approximately $50-55 million synergy benefits are expected in 2Q26[15] - Berry integration is on track[9, 39] Segment Performance - Global Flexible Packaging Solutions net sales increased by 25% to $3,257 million[18], including approximately $640 million from acquired businesses[19] - Global Flexible Packaging Solutions adjusted EBIT increased by 28% to $426 million[18], including approximately $75 million from acquired businesses[19] - Global Rigid Packaging Solutions net sales increased by 205% to $2,488 million[22], including approximately $1.7 billion from acquired businesses[23] - Global Rigid Packaging Solutions adjusted EBIT increased by 365% to $295 million[22], including approximately $240 million from acquired businesses[23] Cash Flow and Leverage - Free Cash Flow use of $343 million, in line with expectations[26] - The company is on track to deliver Free Cash Flow of $1.8-$1.9 billion in fiscal year 2026[26, 29] - Leverage at approximately 3.6 times[24, 26] - The company continues to expect leverage of approximately 3.1 to 3.2 times at June 30, 2026, excluding proceeds from potential asset sales[26]

Core Insights - The global clear plastic film market is set for significant growth, driven by strong industry trends and changing consumer preferences towards sustainable and innovative packaging solutions [1][2][3] Market Overview - The market is experiencing steady growth due to rising demand for transparent packaging across various industrial applications, with a focus on lightweight, durable, and transparent materials [2] - North America leads the market, supported by robust packaging and food processing industries, advanced manufacturing technologies, and major film producers [3][13] Product Definition - Clear plastic film is a thin, transparent sheet made from polymers like polyethylene, polypropylene, or polyester, widely used in packaging, labeling, and protective applications across multiple industries [4] Key Trends - **Sustainability & Biodegradable Films**: Manufacturers are increasingly developing biodegradable and recyclable films to meet environmental regulations and consumer demand for eco-friendly packaging [6] - **Lightweight, Multi-Layer & High-Barrier Films**: There is a focus on lighter film structures that maintain high barrier properties, with multi-layer co-extrusion being adopted to improve performance [7] - **Surge in Flexible Packaging**: Rising demand for flexible packaging in food, pharmaceuticals, and personal care products is driven by the protective qualities and cost-effective transportation benefits of clear plastic films [8] - **Technological Advancements & Smart Features**: Innovations include digital printing, smart packaging technologies, and functionalities like anti-fog and antimicrobial coatings [9] Growth Drivers - Ongoing technological and agro-industrial innovations are propelling market growth, with notable developments such as biodegradable agricultural films and high-barrier film capacity expansions [11] - The increasing demand for packaged food, e-commerce packaging, and industrial protective films further drives market growth [14] Regional Insights - **North America**: Dominates the market due to strong packaging, food processing, and pharmaceutical industries, with stringent food safety regulations supporting innovation [13][15] - **Asia Pacific**: Expected to grow at the fastest rate, driven by rising disposable incomes, urbanization, and government initiatives promoting recyclable films [19][23] - **Europe**: Growth is supported by a strong regulatory framework mandating recyclability and the expansion of e-commerce [24] - **Latin America**: Steady growth is driven by the expanding food and beverage sector and technological advancements in film production [25][26] Material Insights - The polyethylene segment dominated the market in 2024 due to its versatility and excellent physical properties, while the polypropylene segment is expected to grow significantly due to its balance of cost and strength [29][30] End-Use Industry Insights - The food & beverage segment led the market in 2024, driven by demand for hygienic and visually appealing packaging solutions [31] - The pharmaceutical segment is projected to grow rapidly due to the need for secure and moisture-resistant packaging solutions [32] Recent Innovations - Nextek and Coveris introduced the COtooCLEAN process for recycling flexible films into high-quality materials [35] - FrankLowe launched an upgraded protective film with enhanced UV protection [35]

Core Insights - Amcor has announced the hiring of Stephen Scherger as its new Chief Financial Officer, effective November 10, succeeding Michael Casamento who has served in the role for 10 years [1][4]. Company Developments - Stephen Scherger previously served as CFO of Graphic Packaging International (GPI) for a decade, during which GPI's net sales more than doubled, highlighting his significant impact on the company's growth [2]. - Under Scherger's leadership, GPI completed major acquisitions, including the 2018 merger with International Paper's North America consumer packaging business and the 2021 acquisition of AR Packaging for $1.45 billion [3]. - Amcor's recent leadership change marks its second major C-suite transition in two years, following the promotion of Peter Konieczny to CEO in 2024 [5]. Transition Details - Scherger will conclude his tenure at GPI after the third-quarter earnings report on November 4, with Charles Lischer appointed as interim CFO [6].

Market Overview - The global Packaging Materials Market was valued at approximately USD 950 billion in 2024 and is projected to reach USD 1,450 billion by 2032, with a CAGR of 5.5% from 2025 to 2032, driven by evolving consumer preferences and regulatory frameworks [2][3]. - The market is characterized by a significant upward trend towards sustainable solutions and advancements in functional packaging, reflecting its critical role in the global supply chain [3][10]. Technological Advancements - Artificial intelligence (AI) is enhancing efficiency in the packaging materials market by optimizing design, improving supply chain management, and predicting demand more accurately [5][6]. - Innovations such as advanced barrier films, smart packaging solutions, and the development of biodegradable and compostable materials are key trends driving growth [10][18]. Sustainability Trends - There is a strong push towards eco-friendly alternatives, with innovations in biodegradable, recyclable, and compostable materials being paramount [8][10]. - The market is influenced by increasing consumer awareness and regulatory pressures regarding environmental impact, leading to a focus on sustainable practices and circular economy models [10][20]. Regional Insights - North America is expected to maintain steady growth with a regional CAGR of approximately 5.0%, driven by innovation and e-commerce [27]. - The Asia Pacific region is the largest and fastest-growing market, with a projected CAGR of approximately 6.2%, fueled by rapid urbanization and increasing disposable incomes [27]. Key Players - Major players in the packaging materials market include Amcor Plc, Berry Global, Mondi Plc, and Tetra Pak, among others [11]. Future Outlook - The packaging materials market is projected to see substantial investment in R&D aimed at creating more environmentally benign materials, including advanced bio-plastics and improved recycled content solutions [15][29]. - The long-term trajectory will be shaped by sustainability and environmental regulations, alongside the growth of e-commerce, which demands constant evolution in packaging design [29][32].