Amcor plc

Ladies and gentlemen, thank you for standing by, and welcome to the MCOR First Quarter 2020 Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Tracy Whitehead. Please go ahead.

Thank you and welcome to AMCOR's 2020 first quarter earnings call. Good evening to those of you in the US and good morning to those in Australia. Joining me on the call today is Ron D'Elia, Chief Executive Officer and Michael Casamento, Chief Financial Officer. At this time I'll direct you to our website, amcor.com, under the investor section where you'll find our press release and presentation which will be discussed on this call. We'll also discuss non-GAAP financial measures as we talk about performance against combined comparative information. Reconciliations of these non-GAAP measures can be found on the press release and presentation on our website. Also a reminder that statements regarding future performance of the company made during this call are forward looking and subject to certain risks and uncertainties. Actual results may differ from historical expected or predicted results due to a variety of factors. Please refer to AMCOR's SEC filings including our statement on Form 10-K to review these factors. With that, I'll hand over to Ron.

Thanks, Tracy, and thanks, everyone, for joining us to discuss AMCOR's first quarter results for the 2020 financial year. As Tracy mentioned, with me here today is Michael Casimeno, AMCOR's chief financial officer, and we'll begin with some brief prepared remarks and then open the line for Q&A. I'll move on to slide three in the presentation pack. And everything we do at Amcor starts and ends with safety, which is our first and foremost value. And so we begin these calls with safety like we begin every meeting at Amcor with safety. And fiscal 2020 is a busy year for our leadership teams and employees as we seek to simultaneously grow the underlying business and also integrate the legacy Bemis sites while making progress against our goal of no injuries. And while we're not at no injuries yet, we are working from a position of strength, with more than half of our sites around the world injury-free for the last 12 months, and an overall recordable case frequency rate of 3.6 per million man-hours work. You may recall that the recordable case frequency rate for the legacy Amcor business last year was 2.1. And we know from past experience that acquired businesses typically have higher numbers of injuries than we're accustomed to at AMCOR, and this is no different with Bemis. So our primary focus this year is on aligning the Bemis sites with AMCOR's safety practices, and our approach has been embraced with enthusiasm by our new colleagues. So we look forward to providing updates on our progress throughout the year as we make strides towards eliminating all injuries from our facilities. We move on to slide four to the four key messages we have for today. First, we've had a solid start to the fiscal year, in line with our expectations for EBIT growth, driven both by organic growth and synergies. Second, the Bemis integration is right on track and delivering. Cost synergies made an impact in Q1 and will build through the financial year. Third, we're gaining momentum on sustainability, in particular with our key customers, with whom we share the same objectives and similar perspectives on how to achieve them. And fourth, we're on track for the balance of fiscal 2020, and we're reaffirming our outlook for 5% to 10% EPS growth for the full year. Now, on slide five, we've got a summary of the first quarter results. And before I get to those numbers, just a word on the financials that we're presenting today. The prior year numbers have been prepared on a pro forma basis, as if Amcor had owned Bemis July 1st, 2018. And the key message here in relation to these results is that we delivered strong earnings growth in line with our expectations and therefore keeping us on track to meet our FY20 outlook. And we're encouraged by the momentum in the base business particularly. Sales revenue for the period was in line with the prior year in constant currency terms and excluding a negative impact related to the pass-through of raw material costs. We saw growth in our larger businesses including the core flexible packaging businesses in Europe and North America and the rigid packaging business in North America. And this was offset by sales declines in Latin America and especially cartons business in Europe. Total EBIT was up 10% in constant currency terms with organic EBIT growth in both segments and synergy benefits of approximately $10 million in the quarter. Net income and EPS increased by 15% in constant currency terms and the board declared a quarterly dividend of 11.5 cents per share. And lastly, we started a $500 million share buyback, which we announced in August, and we purchased nearly 6 million shares in the first quarter. I'll hand over now to Michael to provide some more color on the financial performance of the quarter and our outlook for 2020, and then I'll come back to talk about some of AMCOR's longer-term growth opportunities.