Amcor plc

Hello and welcome to the AMCOR fiscal year 24 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. And if you would like to ask a question during this time, please press star one on your telephone keypad. 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 2024 fourth quarter and full year earnings call. Joining today is Peter Konechny, interim 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 this call. Please be aware that we will 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 differ from current estimates. Reference can be made to AMCOR's SEC filings, including our statements on Forms 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 then rejoin the queue if you have any additional follow-up. With that, over to you, PK.

Thank you, Tracey, and thank you to all who have joined us for today's call. I want to open the call with a big thank you to our AMCOR colleagues around the world, all of whom demonstrated tremendous focus in fiscal 24. Their hard work and dedication enabled us to improve our financial performance through the year and to finish the year strong. And I want to publicly recognize their efforts. In terms of Q4, we start as always with safety on slide three. Safety is our number one priority, and our efforts to provide a safe and healthy work environment for our teams resulted in another year of improved performance, which reinforces our industry leadership when it comes to safety. 73% of our sites have remained injury-free for 12 months or longer, and overall, UMGOR experienced a 12% reduction in injuries compared to fiscal 23. Our commitment to our people and to their safety remains our most important value, and we continue to aspire to achieve our ultimate goal of zero injuries. Turning to slide four, UMGOR's near-term priorities remain consistent with those I shared on our Q3 earnings call, and I'm happy to report we're successfully delivering against these priorities. As I just mentioned, providing a safe and healthy work environment for our global workforce will always be number one. Second is to stay close to our key stakeholders, including employees and customers, which helped us finish the fiscal 24 years strongly. Our teams continue to execute well in the fourth quarter, maintaining cost discipline as volume trends continue to improve sequentially with a return to volume growth in Q4. As a result, we delivered another quarter of solid margin expansion and earnings per share growth above the expectations we set out in April. Third is to build on the progress we have worked hard to deliver across the business and ensure we maintain momentum in fiscal 25. We expect our earnings and volume performance to continue to improve. this is reflected in our fiscal 25 guidance and fourth i and our senior leaders continue to focus on providing stability for the business and helping our teams deliver for all our stakeholders we're executing well and winning with our customers as we continue to reinforce that encore strategy agenda and priorities have not changed moving to our key messages for today on slide five first AMCO reported strong financial results for the fourth quarter, driven by solid performance in the underlying business and a return to volume growth, resulting in both segments delivering adjusted EBIT growth on a comparable basis. Second, volumes, EPS growth, and free cash flow were ahead of expectations we set out in April. Overall volumes increased 1% in the quarter compared to last year, which exceeded the low single-digit decline we were anticipating. Earnings per share also outperformed expectations, up 9%, which was above our guidance for mid-single-digit growth. Third, we expect to build further momentum and deliver annual EPS growth through continued strong performance from the underlying business. At the midpoint of our fiscal 25 EPS guidance range of growth of 3% to 8%, we expect total annual value generated to once again be consistent with the 10% to 15% outlined in our shareholder value creation model. assuming a dividend yield aligned with historical average. It is important to point out that we expect the underlying business to continue to deliver strong growth in line with the high single digit earnings growth experienced in Q4, considering our guidance includes an EPS headwind of approximately four percentage points related to normalization of incentives. Michael will step through the components embedded in our guidance range in more detail shortly. Our final key message is that our capital allocation priorities and strategies for long-term growth have not changed. We continue to invest in organic growth across the business, including in higher value priority categories in emerging markets. Strategic M&A also remains an important source of incremental growth and value creation. We believe the strength of our market positions, our opportunities to invest for growth, our execution capabilities, and our commitment to a compelling and growing dividend and to maintaining an investment grade credit rating sums up to a convincing investment case framework. Moving to slide six for a summary of our financial results. We finished fiscal 24 on a strong note. As customer demand continued to improve off second quarter lows, and our teams did an excellent job leveraging our differentiated value proposition to support our customers and drive volumes higher. At the same time, our unwavering focus on proactive cost management through the year resulted in four consecutive quarters of strong margin expansion. Overall volumes returned to growth earlier than we anticipated and were up 1% in Q4, our second consecutive quarter of strong sequential volume improvement. As expected, volumes across healthcare categories and in the North America beverage business remained soft through the fourth quarter. Combined, these two businesses, which represent approximately 25% of sales in Q4, unfavorably impacted overall volumes by approximately 2%. Across the balance of the business, overall volumes were approximately 3% higher than the June quarter last year. This reflects broad-based improvements in customer demand across many end markets and what we believe is the end of destocking in all categories other than healthcare. Price mix had an unfavorable impact on sales of approximately 3%, primarily driven by continued destocking in high-margin healthcare categories. Cost reduction and productivity initiatives remained a focus, and we delivered another quarter of significant cost savings totaling more than $110 million, including an additional $20 million of benefits from structural cost initiatives in Q4. This builds on the outstanding efforts by all our teams across the businesses through the first three quarters, bringing the total cost savings for the year to more than $40 million, including structural savings of $35 million. The result of improving volume trends and our focus on cost and productivity actions was another quarter of strong, urgent leverage as momentum in UMCRA's underlying business continued. Fourth quarter adjusted earnings per share of 21.1 cents grew by 9% on a comparable constant currency basis, above our April guidance for mid-single-digit growth, and adjusted EBIT was up 4% compared with last year. Overall, for fiscal 24, we delivered adjusted EPS toward the top end of our guidance range we provided last August, and our ongoing focus on cash conversion was rewarded with adjusted free cash flow of $952 million, up more than $100 million in last year, and just above the top end of our guidance range. We also continue to return significant cash to shareholders through compelling and growing dividend, in addition to share repurchase, which combined totaled approximately $750 million for fiscal 24. Turn it over to Michael now to provide some further color on the financials and our outlook. Michael. Thanks, PK, and hello, everyone.