Amcor FY24 Earnings Call Highlights

Amcor (ASX: AMC) reported a drop in full-year profit on lower customer demand as well as significant customer destocking across North America and Europe.

FY24 Earnings Summary

• Net sales down 6% to US$13.65bn

• EBITDA down 1% to US$1.96bn

• Net income down 5% to US$1.01bn

• EPS down 2% to 70.2 US cents per share

• Total dividend for FY24 of 50 US cents per share (FY23: 49 US cents)

• FY25 outlook includes adjusted EPS between 72-76 US cents per share, adjusted free cash flow between $900-1,000m

Earnings Call Highlights

FY24 performance: "Overall for fiscal 2024, we delivered adjusted EPS towards the top end of our guidance range provided last August and adjusted free cash flow of $952 million, up more than $100 million from last year." – Interim CEO Peter Konieczny

Consumer demand: "Customer demand continued to improve off second-quarter lows, and we delivered strong sequential volume improvement in Q4."

Volume outlook: "We expect overall volumes to continue to grow in fiscal 2025, and we will maintain a sharp focus on cost control and productivity initiatives to drive solid earnings growth." – Interim CEO Peter Konieczny

Price mix: "Price mix had an unfavorable impact on sales of approximately 3%, primarily driven by continued destocking in high-margin healthcare categories." – CFO Michael Casamento

Destocking trends: "Destocking in healthcare categories continued in North America and Europe, resulting in a headwind of approximately 2% on overall segment volumes ... "Across the balance of the business, destocking has ended, and demand has returned to more normalized order patterns." – CFO Michael Casamento

M&A commentary: "Strategic M&A also remains an important source of incremental growth and value creation." – Interim CEO Peter Konieczny

Cost savings: "Cost reduction and productivity initiatives remain a focus, and we delivered another quarter of significant cost savings, totaling more than $110 million." – CFO Michael Casamento

FY25 guidance: "At the midpoint of our fiscal 2025 EPS guidance range of growth of 3% to 8%, we expect total annual value generated to be consistent with the 10% to 15% outlined in our shareholder value creation model." – Interim CEO Peter Konieczny

Analyst Q&A Highlights

The below topics have all been answered by interim CEO Peter Konieczny and CFO Michael Casamento.

Market conditions: "Consumer demand continues to be muted. We would consider that to be low single digit down still ... We would consider that to be low single digit down still. And also, when we go into 2025 with our expectations, we wouldn't assume that that's necessarily improves."

Cycling destocking trends: "You would see the destocking sort of cycling off that gets us a better volume performance ... In the first half of 2025, we would be comping a pretty broad range destocking versus prior period."

On the healthcare market: "We don't have any concerns overall in the stability and the attractiveness of this category to start right there."

On buybacks: "We have a good M&A pipeline and there’s opportunities there as always. So, we elected to not do the buyback."

Inflation drivers: "The main area of inflation now is really in the labor side of things, and that’s probably in that kind of mid-single-digit range ... From a raw material standpoint, it’s a pretty benign environment at the moment."

Beverage outlook: "We're not overly ambitious in terms of expecting the volumes to turn around in the near future ... it has mostly to do with the discretionary sort of nature of the category that we’re exposed to."

Portfolio strategy: "We feel strongly about focusing the business on certain areas that are, you know, potentially value-driven, therefore higher margins and offering better growth than others ... This is the protein category ... premium coffee ... healthcare ... pet food."

This article was generated with the support of AI and reviewed by an editor.