Amcor plc

Ladies and gentlemen, thank you for standing by and welcome to AMCOR's full year 2022 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Tracey Whitehead, Head of Investor Relations. You may begin your conference.

Thank you, operator, and thank you, everyone, for joining AMCOR's June quarter earnings call for fiscal 22. Joining the call today is Ron D'Elia, Chief Executive Officer, and Michael Casamento, Chief Financial Officer. Before I hand over, let me note a few items. On our website, amcor.com, under the Investors section, you'll find today's press release and presentation, which we will discuss on the call. Please be aware that we will also discuss non-GAAP financial measures and related reconciliations can be found in that press release and presentation. Remarks will also include forward-looking statements that are based on management's current views and assumptions. The second slide in today's presentation lists several factors that could cause future results to be different than current estimates. And reference can be made to AMCOR's SEC filings, including our statements on Form 10-K and 10-Q for further details. During the question and answer session, as the operator mentioned, we request that participants ask their question and then rejoin the queue for any additional questions. With that, over to you, Ron.

Thanks, Tracey, and thanks, everyone, for joining Michael and myself today to discuss AMCOR's financial results for fiscal 2022. We'll begin with some prepared remarks before opening for Q&A. And kicking off with slide three, which covers safety, our first and most important value. Throughout fiscal 2022, we continue to make good progress on our long-term objective of eliminating injuries across our global operations. The focus of our teams on implementing additional safety best practices resulted in a further 3% reduction in the number of reported injuries globally, and I'm pleased to report that well over 50% of our sites continue to be injury-free for the past 12 months or more. We pride ourselves on making the well-being of our 44,000 global employees our number one objective, and we'll continue to strive to achieve our goal of no injuries. Turning to our key messages for today on slide four. First, FY22 has been another outstanding year for Amcor. We could not be more pleased with how our teams have demonstrated remarkable perseverance and agility, continually adjusting to challenges in the operating environment from raw material shortages to high inflation, while remaining focused on driving value for our customers and our shareholders. As a result, financial performance was strong with growth across all key metrics. The business finished the year with good momentum, more than offsetting any external headwinds, so that Q4 was our strongest quarter of sales and EBIT growth, and full-year EPS growth of 11% was at the top end of our guidance range. Second, we expect the business to continue performing well, and we anticipate sustaining strong underlying growth in FY23. And finally, we have a resilient and compelling investment case, which has consistently delivered significant shareholder value for a combination of organic growth, value creating acquisitions, and cash returns to shareholders. Turning to some financial highlights for the year as outlined on slide five. In short, we've added to our track record with another year of sustainable growth in the underlying business. Focusing on the strong June quarter, net sales growth was 13%, and this included approximately $1.7 billion of incremental price increases on an annualized basis related to the pass-through of higher raw material costs. Excluding this pass-through, organic sales growth accelerated through the year, reaching 6% for the June quarter in both the flexibles and rigid packaging segments. And our strong performance reflects good work by our teams to recover broader and higher levels of general inflation, mostly through the second half of the year. It also reflects favorable volume and mixed benefits. And as we have in the past several quarters, we benefited from mid- to high-single-digit growth in high-value priority segments, which confirms that our focus on these faster-growing markets is paying off. This top-line growth converted into adjusted EBIT growth of 9% in the June quarter, and it's worth noting that this high single-digit earnings growth was achieved in a quarter which clearly no longer benefited from any synergies, and while we continued to experience significant inflation and an unfavorable price-cost lag related to raw materials. Flexibles delivered outstanding EBIT growth of 11% in the quarter, and in line with our expectations, earnings growth continued to improve in rigid packaging. For the full year, net sales growth was 13% and 4% on an organic basis, which represents our third consecutive year of accelerating top-line growth. Adjusted EBIT of $1.7 billion was 7% higher than the prior year, and adjusted EPS of $0.805 per share was 11% higher than one year ago. Our financial profile remains strong, with return on average funds employed at 16.3%. And we also returned more than $1.3 billion of cash to shareholders through share repurchases and a higher annual dividend. Now, before handing over to Michael for more detail on the financial results, let me provide an update on our business in Russia. As previously announced, we've been exploring all strategic options for our Russian business. And after a thorough assessment, we've decided to sell our three manufacturing sites in Russia. Until completion, which we expect will occur in the second half of our 2023 fiscal year, we remain committed to supporting our employees and customers while preserving value for shareholders through an orderly sale process. We're also proactively undertaking initiatives to help offset the future impact of the divested earnings, including optimizing our European footprint and adjusting our regional cost base. With that, I'll hand over to Michael, who will cover the estimated impact of this sale on fiscal 2023 guidance.