Amcor plc

Good day, everyone, and welcome to the MCOR half-year 2023 results. Today's call is being recorded. 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, simply press star 1 on your telephone keypad. If you would like to remove yourself from the queue, press star 1 again. In interest of time, we would like to remind participants to limit your question to 1 and rejoin the queue for any follow-ups. I would now like to turn the conference over to Tracy Whitehead, Head of Investor Relations. Please go ahead.

Thank you, Operator, and thank you everyone for joining AMCOR's Fiscal 23 First Half Earnings Call. Joining 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 Investor section, you'll find today's press release and presentation, which we'll discuss on the call. Please be aware that we'll also discuss non-GAAP financial measures and related reconciliations can be found in that press release and the 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 AMCLAW's SEC filings, including our statements on Form 10-K and 10-Q for further details. Please note that during the question and answer session, we request that you limit yourself to a single question and one follow-up, and then rejoin the queue if you have additional questions. With that, over to you, Ron.

Thanks, Tracy, and thanks, everyone, for joining Michael and myself today to discuss AMCOR's first half financial results for fiscal 2023. We'll begin with some prepared remarks before opening for Q&A. And I'll start with slide three, which covers our first and most important value, safety. Safety is deeply embedded in Amcor's culture, and our management teams understand our collective responsibility to provide a safe and healthy working environment. Our dedication to eliminating injuries in the workplace continues to result in industry-leading metrics. In our first half, we improved further and made great progress with a 24% reduction in the number of injuries globally compared to last year. And 65% of our global sites have been injury-free for the past 12 months, with more than 30% injury-free for three years or more. Safety and a culture of caring for our people will always be our highest priority. Turning to our key messages for today on slide four. First, the business delivered a strong first half and second quarter, despite ongoing challenges in the macroeconomic environment. Our teams are doing an excellent job driving value for customers while managing the many aspects of the business under their control. We've increased our focus on flexing costs, as demand evolved and were proactively taking actions to drive further efficiency and productivity improvements while recovering general inflation and passing through higher raw material costs. The outcome was strong operating leverage with an 8% increase in both EBIT and adjusted EPS in the first half on a comparable constant currency basis. Second, although not entirely immune in a weakening demand environment, our business remains resilient. Ninety-five percent of our portfolio is exposed to consumer staples in healthcare and markets, which combined with our broad geographic footprint positions us well through economic cycles. Our volume performance through the first half demonstrates that resilience and compares favorably to the mid-single-digit or higher declines reported by others in our value chain. Third, a solid first half, strong execution, and a resilient portfolio gives us the confidence to reaffirm our guidance ranges for fiscal 23. We're confident in the ability of our teams to continue focusing on the controllables. However, we're also mindful that through the second quarter, the demand environment softened and became increasingly volatile. We expect this will continue in the near term, and as we enter the second half of the fiscal year, we're more cautious in relation to the demand outlook, and we currently expect to be toward the lower end of our EPS guidance range. And our final and most important key message is that we remain focused on executing against our strategy for long-term growth. The business generates significant annual cash flow, which allows us to invest in organic growth opportunities, pursue acquisitions, pay an attractive and growing dividend, and regularly repurchase shares. We're confident in the strength of our underlying business, execution capabilities, and capital allocation framework, all of which support our compelling investment case. Moving to a few financial highlights on slide five. First half reported net sales were up 6%, which includes approximately $670 million of price increases related to higher raw material costs. Excluding this impact, organic sales were up 2% on a constant currency basis and volumes were 1% lower. Both the flexibles and rigid segments did an excellent job driving price and mixed benefits, including recovering around $160 million of general inflation. We're making good progress on our commercial and strategic agenda, and with our priority segments continuing to deliver high single-digit organic growth and several of our emerging markets businesses also growing at high single-digit rates in line with long-term trends. Positive price mix performance more than offset modestly lower overall volumes, which reflected generally softer and more volatile demand, as well as customer destocking in parts of the business. Operating leverage was strong. as we continue to increase our focus on costs, and the business delivered an 8% increase in both adjusted EBIT and EPS for the first half. Looking at our December quarter financial performance, reported net sales growth was 4% and 1% on an organic basis. Adjusted EBIT and EPS each grew 7%. So another solid quarter highlighting the benefits of geographic diversification and exposure to more defensive end markets, even as we experienced softer demand. Through the first half, AMCOR returned approximately $400 million of cash to shareholders through a combination of dividends and share repurchases. And today, we've increased our planned repurchases for fiscal 23 by up to $100 million. Our overall financial profile remains robust, with return on average funds employed at 17%. We're pleased with our first half and our December quarter financial performance, and I'll now turn it over to Michael to cover more of the specifics. Thanks, Ron.