Amcor plc

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to the AMCAR Half Year Results 2025. 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Tracey Whitehead, Head of Investor Relations. Please go ahead.

Thank you, Kate, and thank you, everyone, for joining AMCOR's fiscal 25 second quarter earnings call. Joining today is Peter Connichney, 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 and third slides in today's presentation with several factors that could cause future results to be different than current estimates. 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 then rejoin the queue if you have any additional questions or follow-ups. With that, over to you, PK.

Thank you, Tracey. And thank you to all who have joined us for today's call. UMCOR had a very active second quarter and we're progressing well on three clear priorities. One, deliver on the base business. Two, complete the work required to close the announced merger with Berry Global. And three, make sure we are well prepared for a fast start and integration. With the base business, we start as always with safety on slide four. I'm incredibly proud of the commitment our teams demonstrate to safety every day. The safety and well-being of our people will always be our top priority, and we're constantly looking for opportunities to improve. In fiscal 25 to date, we have continued to deliver outstanding results. We achieved an industry-leading total recordable incident rate of 0.30, and 79% of our sites remained injury-free for more than a year. Our key messages for today are in slide five. Q2 results were in line with expectations we set in October. as we continue to execute and deliver across key financial metrics. We are pleased to report our fourth consecutive quarter of sequential volume improvement and a return to sales growth, albeit marginal. Margins also continue to improve, helping drive a 5% increase in both adjusted EBIT and EPS on a comparable basis. The solid performance, along with our confidence in the second half, leaves us on track to deliver against our full-year guidance, which we are reaffirming again today. And finally, as we continue to execute well in the underlying business, we're also highly focused on the unique opportunity we have to accelerate growth and enhance earnings and cash generation through the previously announced combination with BERI. Turning to slide six. On our Q1 earnings call in October, I outlined my strategy for Amgur to deliver consistent, sustainable organic growth in the low to mid single digit range through an unwavering focus on our customers, on sustainability, and on our portfolio mix. I also shared my future vision for Amgur to become the global packaging partner of choice. The merger with Berry is directly aligned with this strategy and moves us further towards our vision. Slide 7 highlights the compelling rationale behind this combination. One of the most powerful and transformational long-term benefits of this merger is the opportunity to drive stronger, more consistent and sustainable volume-driven organic growth and to further improve margins. There are a number of growth unlocks that will become available with two of the most significant shown on this slide. First, the combined company will be a better business with a broader primary packaging portfolio at scale across consumer goods and healthcare end markets. In the context of a stronger, larger-scale company, Amker will be uniquely positioned to further refine and prune our portfolio mix to focus even more on attractive, higher-value, faster-growing end markets. This journey is already underway with Barry's recent divestitures of its HHNF and TAFEs businesses, which have significantly enhanced their product mix while reducing cyclicality. As a result of further pruning, we will increase average growth rates, margins, and cash generation across the remaining portfolio. Second, this combination creates exceptional capability in material science and innovation. We will drive growth for innovation and more sustainable packaging solutions by effectively and efficiently leveraging our combined resources, bringing together more than 1,500 R&D professionals An annual R&D investment of $180 million will allow us to optimize and redirect R&D spend, providing capacity to focus on solving the most complex functionality and sustainability challenges faced by our customers and consumers. Accelerated growth combined with significant synergies means this combination will drive compelling near and long-term value for all shareholders. Moving to slide eight. You've seen this slide before, but let me recap a few of the drivers behind the significant and sustainable financial value we're creating. We continue to pressure test our assumptions and are confident in the $650 million in total cost growth and financial synergies we've identified and will deliver. We expect to realize 40% or $260 million of total synergies in the first year and the full run rate in year three with an additional $280 million of one-time cash benefits from working capital improvements, which will fund cash costs to achieve synergies. Including synergies, this combination is expected to deliver significant cash EPS accretion of over 35% and annual cash flow in excess of $3 billion. This will allow us to maintain a strong investment-grade balance sheet and deploy additional cash to invest in organic growth and M&A. We expect to increase long-term EPS growth and take the outcomes under our shareholder value creation model to a new and higher level. Turning to slide nine and an update on the steps we have taken towards closing. We're moving very quickly from a process perspective to complete the work required to bring the merger to close. On January 23, we filed the definitive joint proxy statement prospectus with the SEC, and shareholder meetings are scheduled to take place on February 25. Initial materials required to secure regulatory approvals across nearly all required jurisdictions have been submitted, and the first approvals have been received. The composition of the Board of Directors has been finalized, and our path to completion is well advanced. From an integration preparedness perspective, we're also well positioned. We are focused on building our teams, filling key roles, and ensuring we will make a fast start upon close with clearly defined plans for the first 100 days in line with our proven integration playbook. We have a strong track record of successfully executing on large transactions, and our teams have significant experience in integrating sizable businesses. Moving to slide 10 for a summary of our financial results. As noted earlier, delivering on the base business is a top priority, and we continue to execute well with second quarter results in line with the expectations we outlined in October. Our differentiated value proposition resonates with customers, supporting a return to overall sales growth in Q2, as net sales of $3.2 billion were slightly ahead of last year. Overall volumes grew by 2.3%, improving on the first quarter and offsetting an unfavorable impact of price mix. This was the fourth consecutive quarter of sequential improvement in volumes. As expected, destocking continued to healthcare and demand remained soft in the North American beverage business, impacting mix and unfavorably impacting overall volumes by more than a percent. Across the balance of the business, overall volume growth was consistent with the first quarter up approximately 4%. Improving volume trends and continued proactive cost and productivity actions more than offset unfavorable price mix headwinds, leading to another quarter of solid earnings growth. Adjusted EBIT increased by 5% compared with last year, and adjusted EBIT margin expanded year over year by 40 basis points. Adjusted earnings per share of 16.1 cents also grew by 5% on a comparable basis. and cash generation was above the prior year, positioning us to reaffirm our fiscal year guidance. I'll now turn the call over to Michael to cover the result and outlook in more detail.