Amcor plc

Ladies and gentlemen, thank you for standing by and welcome to the MCOR first quarter 2021 results conference call. At this time, all participant 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 further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Tracy Whitehead. Ma'am, the floor is yours.

Thank you and welcome to AMCOR's first quarter earnings call for fiscal 2021. Joining 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, you'll find our press release and presentation, which will be discussed on the call today. We'll also discuss non-GAAP financial measures and related reconciliations can be found in 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 statements on Form 10-K, to review those factors. With that, I'll hand over to Ron.

Thanks, Tracy. Thanks, everyone, for being with us today to discuss Amcor's first quarter results for our 2021 fiscal year. We appreciate you making the effort to join the call. And as well, for any of our team members who are on the call who sometimes join in, we appreciate their efforts as well, which have been really outstanding over the start to the fiscal year. As Tracy mentioned, joining me on the line today is Michael Casimeno, Amcor's CFO. And we'll start with some brief prepared comments before we take your questions. If I start with slide three, everything we do at Amcor starts with safety. As you would know from those who have followed us before, safety is a value at Amcor. So the priorities in the business may shift from time to time, but our values remain consistent, and safety would be the most important of those values. And this year, given the context around COVID-19, we're also clearly focused on keeping everyone on our team healthy as well. And as we continue to navigate the additional risk and complexity of operating during the ongoing pandemic, we remain confident and convinced that the protocols we implemented earlier this year in our facilities will enable us to continue to keep our coworkers healthy and to keep our plants running as they have been thus far. With regard to safety in a more traditional sense, our recent performance continues to be a real highlight for MCOR through the first quarter. Across the company, we achieved a 30% reduction in the number of injuries compared to the prior year, and over half of our sites were injury-free for at least 12 months. That's a significant achievement in our view, particularly in the current environment, and it's a direct result of the dedication, commitment, and focus of our employees to keep themselves and their coworkers safe. Moving on to slide four and the key messages we have for today. First and foremost, we've had a strong start to fiscal 2021. We delivered outstanding results in the first quarter, which were ahead of our expectations, and both segments produced strong organic growth. Our flexible packaging business is capitalizing on the strategic and financial benefits from the transformational Bemis acquisition, and the rigid packaging business is also building momentum with strong volume growth and cost performance. Second, the outperformance in the first quarter gives us the confidence to raise our outlook for fiscal 21. We now expect adjusted EPS growth of 7% to 12% in constant currency terms. And today, we've also announced a dividend increase and a share buyback. And lastly, the investment case for Amcor has never been stronger. In the near term, organic growth from our consumer and healthcare exposure should remain resilient. We'll deliver further acquisition synergies, and we continue to offer an attractive dividend currently yielding more than 4%. And longer term, we're very well positioned. Momentum is building around innovations to deliver more sustainable packaging, and we have a strong balance sheet and annual free cash flow of over a billion dollars, which provides the capacity to invest back in the business, to pursue growth opportunities, and to maintain an attractive dividend. Slide five provides a summary of our first quarter financial results. And earnings growth was strong, with EPS increasing 20% on a constant currency basis. And that growth was really driven by three discrete components. At first, 8% of the EPS growth was organic, which was a real highlight for both the flexibles and rigid packaging segments. And in EBIT terms, organic growth in the flexible segment was more than 4%. and all of the 7% growth in the rigid packaging segment was organic. And the strong performance in the operating businesses was partially offset by the phasing of some corporate expenses during the first quarter. Demand for our products remained resilient, and we saw overall volume growth in North America and the Asia-Pacific region, while volumes in Europe were marginally lower than last year. There was also good leverage through to the bottom line, which was enhanced even further by favorable operating cost performance. Seven percent of the EPS growth came from synergies resulting from the Bemis acquisition. We delivered an incremental $20 million in cost synergies during the period, and we're well on track for the full year. And third, the remaining four percent of the EPS growth came from the benefits of the share buyback that we completed in the last fiscal year. Free cash flow was also in line with our expectations, and the business continued to make good progress on working capital, and our balance sheet remained strong. The strength in the underlying business and financial position means we've also been able to increase cash returns to shareholders during the quarter. Today, the board declared a quarterly dividend of 11.75 cents per share, continuing our long track record of dividend growth, and we also announced plans to repurchase $150 million of shares. So the key message here is Amcor had a strong start to the 2021 fiscal year with both segments delivering excellent results and building momentum. And with that, I'll hand over to Michael to provide some more color on the financial performance for the quarter and our outlook for 2021.