Joint Statement by Baillieu Limited Chairperson David Trude and Managing Director Gavin Powell

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Profile: Amcor plc (ASX: AMC) is a global packaging company which develops and produces packaging for an array of products and industries including food, beverage, pharmaceutical, medical-device, home and personal-care. AMC offers a variety of flexible packaging, rigid containers, specialty cartons, closures and other services. AMC is listed on both the NYSE (AMCR.NYS) and the ASX.

History: AMC was established in the 1860s as Victoria’s first paper mill, operating as Australian Paper Manufacturers (or APM). It listed on the ASX in 1969. In the 1970s and 1980s AMC expanded into packaging operations through new business partnerships and acquisitions. In 1986, APM changed its name to Amcor Limited and in 2013, AMC demerged Orora Limited, which focused on fibre and beverage packaging in Australasia and packaging distribution in North America. In June 2019, AMC acquired Bemis, with Bemis shareholders receiving 5.1 AMC shares for each Bemis share. Since the merger, AMC’s primary listing has been on the NYSE.

Earnings composition: The Flexibles segment generated US$817m (73%) of FY19 Earnings Before Interest and Tax (EBIT). Rigid Plastics generated US$308m (27%) of EBIT. In FY19, 46% of AMC’s sales were generated in North America and 24% generated in Western Europe. By end market, 44% of AMC’s products were used in food packaging and 24% were used in beverage packaging.

Most recent result – 1H20: EBIT increased 4.4% cc (constant currency) on the prior corresponding period (pcp) to US$699m. Flexibles EBIT increased 8% cc on the pcp to US$620m. This reflects a US$20m benefit from Bemis synergies and cost reductions, partially offset by lower net sales. Rigid Packaging EBIT decreased 12% cc on the pcp to US$130m, driven by lower sales due to unfavourable mix as well as a strong prior comparative period. Group sales decreased 2.4% cc on the pcp to US$6.2bn. Total pre-tax Bemis synergies for the period was $30m. A dividend of A17.1 cents per share was declared for the quarter, or US11.5cps, bringing dividends declared during 1H20 to US23cps, up from US21.5cps in 1H19.

Company outlook: AMC upgraded underlying FY20 cc EPS growth guidance to 7-10% (previously 5-10%) or 61-64 US cents per share. It also upgraded guidance for FY20 synergies from the Bemis acquisition to $80m pre-tax (previously $65m) but maintained its guidance for total synergies of $180m by FY22.

Important dates: Ex-dividend date is 3 March 2020. Payment date is 24 March 2020.

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