Amcor plc

Thank you for standing by. At this time, we welcome everyone to the MCOR first quarter 2026 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, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We do ask that you limit yourself to one question and rejoin the queue for any follow-up questions. Thank you. I would now like to turn the call over to Tracy Whitehead, Head of Investor Relations. You may begin.

Thank you, Operator, and thank you, everyone, for joining AMCOR's Fiscal 2026 First Quarter Earnings Call. Joining today is Peter Konietzny, Chief Executive Officer, and Michael Casamento, Chief Financial Officer. Before I hand over a few items to note, on our website, amcor.com, under the investor section, you'll find today's press release and presentation which we will discuss. Please be aware that we'll 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 earnings 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 then rejoin the queue if you have any additional questions or follow-ups. With that, over to you, PK.

Thank you, Tracy, and thank you to everyone joining us. I'm excited to welcome you today to discuss our first full quarter operating as a combined company. We're 180 days in, and I'm pleased with how well our teams have come together to integrate and execute against our priorities. We're also seeing strong and consistent validation by our customers who are very receptive to our expanded offerings and innovation capabilities. We're now experiencing the quality of the combined business as the global leader in consumer packaging and dispensing solutions for nutrition, healthcare, and beauty and wellness. We're gaining traction with synergy realization, including commercial synergies, and have solid pipelines, which continue to grow. Margins increase in both operating segments, and we're addressing identified non-core assets to enhance focus on our core business. Adjusted EPS of 19.3 cents per share was above the midpoint of our guidance range, increasing 18% compared with last year. This includes the addition of the Berry business and was supported by disciplined cost-add performance, improved productivity, and synergy delivery toward the upper end of our expected range. Our synergy run rate continues to build, and we have clear line of sight to opportunities that will drive at least $260 million in synergy benefits in fiscal 26. We're confident in delivering a year of strong earnings and free cash flow growth. This is an exciting time for Amcor, and I look forward to continuing to execute on our commitment to create an even stronger business that delivers significant long-term value for our shareholders and is the global packaging partner of choice for our customers. Now moving to slide three and safety, which has always been a core value for legacy Amcor and Barrie. As a combined company, our focus on safety remains absolute, and fiscal 26 has started well with strong performance. For Q1, our industry-leading safety metrics continue with Umpra's total recordable incident rate at 0.55. This is a slight increase compared with last year's performance, which is typically the case when we acquire a business. We have already identified opportunities for improvement across our now much broader footprint and global workforce. and we are proud that 89% of our combined sites remained injury-free in Q1. Slide four highlights our key messages for today, which align with our near-term priorities. Delivering on the core business, integrating BERI, realizing synergies, and optimizing our portfolio. First, core business execution. As mentioned, we executed well in the first quarter with EPS above midpoint of guidance. This positions us well to achieve our full-year financial objectives, including earnings per share growth of 12% to 17% and doubling free cash flow over fiscal 25. Second, integration momentum remains strong. We delivered 38 million in synergies during the quarter, which was toward the upper end of our guidance range. In addition to strong cost and financial synergies, we have already secured revenue synergies totaling more than 70 million in annualized sales, and our strong pipeline continues to build. This performance, combined with our track record of executing synergy targets from prior large integrations, reinforces our confidence in delivering a total of 650 million in synergies for fiscal 28, including at least 260 million in fiscal 26. Third, we're addressing previously identified non-core assets and have entered into agreements to sell two businesses for combined proceeds of approximately 100 million. While these businesses are small, this with progress underscores our commitment to discipline portfolio management. We continue to review options to accelerate actions on non-core assets and we anticipate additional actions this fiscal year. Fourth, we are reaffirming our fiscal 26 guidance. Importantly, UMPR is well positioned with significant earnings and cash flow growth expected through delivery of 260 million synergies largely under our control and not impacted by divestments of non-core assets. This means achieving our guidance for 12 to 70% EPS growth this year is not dependent on improvements in the macroeconomic environment or in customer or consumer demand. And fifth, the Board has approved an increase in OnCore's quality dividend to 13 cents per share. Turning now to slide five and our first quarter financial results. As Michael will cover in more detail ahead of our segment commentary, we've moved quickly to operate as a unified organization. As a result, our commentary is focused on the year-over-year performance of the combined business. Fiscal year 26 is off to a good start as our businesses benefited from discipline cost performance, improved productivity, and delivery of cost and financial synergies, while also building a pipeline of revenue synergies. First quarter EPS of 19.3 cents per share was above the midpoint of our guidance range, growing 18% on a constant currency basis. Excluding non-core North America beverage, overall volumes were broadly similar to Q4, down approximately 2% in the quarter and in line with our expectations. Emerging markets performed better than developed markets, led by solid growth in Asia. An EBIT of 687 million was up approximately 4% on a comparable basis as our teams continued to proactively manage and flex costs. These actions, along with the enhanced quality of the combined business, resulted in another quarter of strong margin expansion with reported EBIT margin of 12%, 110 basis points higher than UMGRO's reported margin last year, and 50 basis points higher than combined companies' comparable margin last year. Moving to slide six, which shows we are on track relative to our one- and three-year synergy commitments. Our teams delivered 38 million in synergies during the quarter, which was toward the high end of our guidance range. Approximately 33 million of those synergies benefited EBIT and came from G&A and procurement savings, with the remaining 5 million primarily related to interest. Headcount reductions now exceed 450, and discussions with our vendors and suppliers are progressing well. Our procurement savings and opportunity pipeline continue to build. We are also off to a fast start on revenue synergies, which I will return to shortly. Our teams are executing well against our proven integration playbook, positioning the business to deliver strong earnings growth in fiscal 26. We're confident in delivering at least 260 million in synergies this year and 650 million in total through fiscal 28. Today, we have reaffirmed both targets. Before turning the call over to Michael, I want to take a moment to acknowledge that this will be his final earnings call as Omgur's CFO, as he has decided to return to Australia to spend more time with his family. Michael has been an exceptional partner to me and to the business. and we thank him for his many contributions over the past decade. He will continue with Amcor in an advisory capacity through June, working closely with our teams to support smooth transition. We look forward to welcoming Steve Scherger, who will join Amcor as CFO next week. Steve brings deep industry expertise and a strong understanding of both the US and global packaging markets. We're fortunate to have an executive of his caliber and reputation join our leadership team, And we're confident that his insights and experience will further strengthen our ability to deliver value for customers and shareholders. Michael, over to you.