Amcor plc

Good afternoon. My name is Krista and I'll be your conference operator today. At this time, I would like to welcome everyone to the AMCOR's first half and second quarter 2024 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 that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, again, press star one. Thank you. I would now like to turn the conference over to Tracy Whitehead, Head of Investor Relations. Tracy, you may begin your conference.

Thank you, Operator, and thank you, everyone, for joining AMCOR's Fiscal 2024 First Half and Second Quarter Earnings Call. Joining today is Ron D'Elia, our 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 this 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 AMCOR'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 any additional questions. With that, over to you, Ron.

Thanks Tracy, and thanks everyone for joining Michael and myself today to discuss AMCOR's second quarter and first half results for fiscal 24. We'll begin with some prepared remarks before opening Q&A. As seen on slide three, our focus on safety remains unwavering, and our significant commitment to providing a safe and healthy work environment continues to be rewarded. Seventy percent of our sites have been injury-free for the past 12 months or longer. and we've experienced a 17% reduction in injuries when compared to the first half of fiscal 2023. Safety is deeply embedded in AMCOR's culture and is the number one priority for our global teams. Turning to our key messages on slide four. First, our reported earnings per share for the second quarter and first half were modestly better than the expectations we set out in October. and improved working capital performance helped drive a year-over-year increase of more than $100 million in adjusted free cash flow. Second, our financial performance through the half was supported by strong and proactive focus on controlling costs. This helped us offset second quarter volumes that were a couple of percentage points lower than we anticipated. Our teams around the world continued to respond, doing an excellent job proactively taking further cost actions. Third, Our first half financial performance puts us on track to deliver against our full year guidance, which we are again reaffirming today. Relative to the first half, we believe Q2 was the low point for earnings growth, and we continue to expect the trajectory of adjusted EPS growth to improve through the second half of fiscal 24, including delivering mid single digit adjusted earnings growth in the fourth quarter. Our confidence is supported by our improved earnings leverage, as well as a number of known factors we'll cover in more detail later that will benefit earnings through the second half of the fiscal year. Additionally, our volume trajectory has improved generally through January, and this underpins our confidence that Q2 marked a low point for volumes. Finally, we remain confident in our long-term growth and value creation strategy and in our ability to deliver a combination of strong earnings growth and a compelling and growing dividend. The strength of our market positions, execution capabilities, and consistent capital allocation framework collectively continue to make a compelling investment case for Amcorp. Moving to slide five for a summary of our financial results. Organic sales on a comparable constant currency basis were down 8% for the half and 10% for the quarter. Price mixed benefits were around 1% for the first half and flat in the second quarter, reflecting moderating inflation, which resulted in reduced pricing actions by our teams. Volumes were down 9% for the first half and down 10% for the December quarter. Second quarter volumes were modestly lower than our October expectations, with the main difference being an acceleration of destocking, especially in the month of December. First half and December quarter adjusted EBITs. was $709 and $352 million respectively, modestly above our expectations. On a comparable constant currency basis, declines of approximately 6% in both periods reflect lower volumes, partly offset by benefits related to decisive and proactive cost actions taken across our businesses in response to evolving market dynamics. In total, our actions reduced costs by more than $200 million in the first half compared to last year. with a reduction of more than $130 million achieved in the second quarter. Adjusted EPS was $31.3 and $15.7 per share, respectively, also modestly above our earlier expectations. For both periods, this was down 10% on a comparable basis, reflecting lower adjusted EBIT and the unfavorable impact of higher interest costs. Working capital improvement remains a focus and helped drive free cash flow for the first half well ahead of the same period last year and in line with our expectations. And we returned approximately $390 million of cash to shareholders in the first half through a combination of share repurchases and a growing dividend, which has increased to 12.5 cents per share. I'll turn it over now to Michael to provide some further color on the financials and our outlook.