Press release·05/03/2025 05:03:32

Amcor’s Resilient Performance Amid Challenging Market Conditions

Amcor, a global leader in responsible packaging solutions, has reported its financial results for the three and nine months ended March 31, 2025. Despite facing a challenging economic environment, the company has demonstrated resilience and delivered solid performance across its business segments.

Overview

Amcor is a global packaging company that operates in 40 countries and employs over 41,000 people. In fiscal year 2024, the company generated $13.6 billion in annual sales. Amcor is focused on developing innovative, sustainable packaging solutions that protect products, differentiate brands, and improve supply chains.

Significant Developments

The most significant development during the reporting period was Amcor’s completion of the merger with Berry Global Group, Inc. on April 30, 2025. This strategic acquisition is expected to strengthen Amcor’s market position and enhance its capabilities in flexible and rigid packaging.

Economic and Market Conditions

The operating environment remained challenging, with softer consumer demand and customer order volatility in certain markets, as well as higher costs, including labor costs. Despite these headwinds, Amcor has benefited from overall sales volume growth of 1% through the first nine months of fiscal year 2025, although sales volumes in North America softened sequentially in the third quarter.

The volatility in the market can be attributed to various factors, such as geopolitical tensions, changes in tariff frameworks, inflation, and customer destocking. Amcor has remained focused on taking pricing and cost actions to offset inflation and align its cost base with market dynamics.

Russia-Ukraine Conflict and Restructuring

In response to the sale of its Russian business in December 2022, Amcor announced a $110 million to $130 million restructuring plan to partly offset the divested earnings. As of March 31, 2025, the company has initiated restructuring and related projects with an expected net cost of approximately $220 million, of which $130 million is expected to result in net cash expenditures. Management expects to realize an annualized pre-tax benefit of approximately $50 million from these restructuring actions by the end of fiscal year 2025.

Highly Inflationary Accounting

Amcor has subsidiaries in Argentina that historically had a functional currency of the Argentine Peso. Due to the high inflation in Argentina, the company began reporting the financial results of its Argentine subsidiaries with a functional currency of the U.S. dollar in July 2018. In April 2025, the Argentine government lifted its capital controls over the Argentine peso and implemented a currency band, which is expected to provide more stability.

Financial Performance

Three Months Ended March 31, 2025

• Net sales decreased by 2% to $3,333 million, primarily due to negative currency impacts, the impact of disposed operations, and the pass-through of higher raw material costs, partially offset by higher sales volumes and favorable price/mix.
• Net income attributable to Amcor plc increased by 5% to $196 million, driven by lower selling, general, and administrative expenses and higher other income, partially offset by a decrease in gross profit.
• Diluted earnings per share increased by 5% to $0.136.

Segment Performance

Flexibles Segment

• Net sales increased by 0.3% to $2,605 million, reflecting higher sales volumes and favorable price/mix, partially offset by negative currency impacts and the impact of disposed operations.
• Adjusted EBIT decreased by 0.3% to $357 million, with favorable volumes and operating cost performance offset by unfavorable price/mix.

Rigid Packaging Segment

• Net sales decreased by 10% to $728 million, primarily due to the impact of disposed operations, negative currency impacts, and unfavorable sales volumes and price/mix.
• Adjusted EBIT decreased by 22% to $55 million, driven by unfavorable volumes and price/mix, partially offset by lower operating costs.

Nine Months Ended March 31, 2025

• Net sales decreased by 2% to $9,927 million, with the negative impacts from currency, disposed operations, and the pass-through of lower raw material costs partially offset by higher sales volumes.
• Net income attributable to Amcor plc increased by 16% to $550 million, primarily due to lower selling, general, and administrative expenses, lower restructuring and integration costs, higher other income, and lower interest expense.
• Diluted earnings per share increased by 16% to $0.380.

Segment Performance

Flexibles Segment

• Net sales increased by 0.3% to $7,667 million, with favorable sales volumes and the pass-through of higher raw material costs partially offset by negative currency impacts and the impact of disposed operations.
• Adjusted EBIT increased by 2% to $1,008 million, driven by favorable volumes and operating cost performance, partially offset by unfavorable price/mix.

Rigid Packaging Segment

• Net sales decreased by 8% to $2,260 million, primarily due to the impact of disposed operations, negative currency impacts, and unfavorable sales volumes and price/mix.
• Adjusted EBIT decreased by 7% to $171 million, reflecting unfavorable volumes and price/mix, partially offset by favorable operating cost performance.

Consolidated Performance

Amcor’s consolidated gross profit decreased by 1% for the nine-month period, primarily due to negative currency impacts, lower sales, and the impact of disposals, partially offset by improved operating cost performance. Selling, general, and administrative expenses decreased by 2% due to cost reduction initiatives and the non-recurrence of CEO transition costs.

Restructuring, transaction, and integration expenses decreased by 13% for the nine-month period, as a decrease in restructuring and related expenses was partially offset by transaction and integration costs related to the merger with Berry.

Other income, net, increased significantly, primarily driven by lower negative impacts from highly inflationary accounting in Argentina and a gain on the divestiture of Bericap.

Liquidity and Capital Resources

Amcor’s cash flows from operating activities decreased by $102 million for the nine-month period, mainly due to higher working capital outflows, partially offset by higher net income. Net cash used in investing activities decreased by $120 million, primarily due to proceeds from the sale of Bericap.

The company’s net debt increased from $6.1 billion as of June 30, 2024, to $6.8 billion as of March 31, 2025, primarily due to the issuance of $2.2 billion in senior notes to fund the repayment of certain Berry indebtedness in connection with the merger.

Amcor maintains an undrawn committed credit facility of $2.54 billion and has investment-grade credit ratings, which provide it with access to diverse and liquid funding sources.

Outlook and Strengths

Despite the challenging market conditions, Amcor has demonstrated its ability to navigate the volatility and deliver solid financial performance. The company’s key strengths include:

1. Diversified global footprint: Amcor operates in 40 countries, which provides geographic diversification and resilience to regional market fluctuations.

2. Innovative and sustainable packaging solutions: Amcor’s focus on developing responsible packaging that is increasingly recyclable, reusable, and made with recycled content positions it well to meet evolving customer and consumer demands.

3. Successful integration of acquisitions: The completion of the Berry Global Group merger is expected to enhance Amcor’s market position and capabilities, further strengthening its competitive advantage.

4. Disciplined cost management: Amcor’s ability to take pricing and cost actions to offset inflation and align its cost base with market dynamics demonstrates its operational agility.

5. Strong financial position: The company’s investment-grade credit ratings, access to diverse funding sources, and prudent capital allocation support its long-term growth and resilience.

Looking ahead, Amcor remains cautiously optimistic about its future prospects, as it continues to navigate the challenging market environment and leverage its strengths to drive sustainable growth and value creation for its shareholders.