Amcor plc

Thank you for joining us and welcome to AMCOR's fiscal 2026 fourth quarter earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Kate Pearlman, Senior Vice President, Investor Relations and Treasury. Kate, please go ahead.

Thank you for joining AMCOR's fiscal 2026 fourth quarter earnings call. Here with me today are Peter Konieczny, chief executive officer, and Steve Scherger, chief financial officer. In the investor section of our website, amcor.com, you'll find today's press release and presentation, which we will discuss on today's call. Please be aware that we will also discuss certain non-GAAP financial measures, and related reconciliations can be found in the 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 MCOR's SEC filings, including our statements on Form 10-K and Form 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, I'll turn the call over to PK.

Thank you, Kate, and thanks to everyone for joining us today. As always, we will start with our industry-leading safety performance on slide three, which remains our highest priority. The total recordable incident rate improved this quarter to 0.47, marking the fourth consecutive quarter of improvement as we leverage our world-class safety program across the combined organization. were encouraged by the early results from our harmonized safety efforts and remain focused on driving continuous improvement. Before turning to our quarterly results, I want to take a moment to discuss a transition on our investor relations team. After more than 15 years leading Amcor's investor relations efforts, including through two strategic acquisitions, Tracey Whitehead has chosen to remain in Australia and pursue opportunities there. I have valued her steady leadership and the lasting impact she made on the company. Tracey will remain with Amcor in an advisory capacity through December to ensure a smooth transition. I also want to extend a warm welcome to Kate Pearlman. Kate has developed a strong reputation leading both investor relations and treasury teams in consumer facing industries. We look forward to leveraging her expertise and perspectives. Turning to slide four. We were pleased to deliver strong operating performance in the fourth quarter despite a challenging macroeconomic backdrop. Q4 adjusted EPS of $1.23 per share increased 23% year over year, resulting in full year fiscal 2026 adjusted EPS of $4.02 per share, up 13% compared to the prior year. First, these results reflect the resilience of our business model and the benefits of our diversified global portfolio. strengthened by the transformative acquisition of BERI last year. We were pleased to see an inflection to modestly positive volume growth in the quarter. Sequentially volume increased approximately 200 base points with growth across several market categories. Importantly, we continue to deliver for our customers through a period of unprecedented input cost inflation. Highly coordinated efforts by our teams across the globe enabled us to secure the necessary supply. while also executing on productivity initiatives and taking responsible pricing actions to fully mitigate these inflationary pressures. Second, synergy capture exceeded our expectations during the quarter as we realized $115 million of synergy bringing total fiscal 2026 synergies to $285 million. This is approximately 10% ahead of our initial year one expectations. The successful integration of the legacy businesses, combined with our proven track record of execution, continues to create meaningful value. We have built a strong pipeline of opportunities across procurement, SG&A, operations, and commercial growth, and remain confident in achieving a $650 million three-year synergy target. Third, we continue to make progress on optimizing our portfolio with a total of five divestitures closed in the second half of fiscal 2026. By sharpening our focus on higher return, higher growth opportunities across our core business, we expect to drive more sustainable growth in attractive categories and markets. At the same time, our non-core businesses delivered improved year-over-year performance driven by strong execution against broad-based operational initiatives. And finally, turning to our outlook. As part of our previously announced fiscal year-end transition, we are providing expectations for the six months ending December 31st, 2026. We expect adjusted EPS to be in the range of $1.80 to $1.90 per share, which reflects continued improvement in our operating performance, partially offset by higher interest and tax expense. Later in the call, Steve will walk through the building blocks for our EPS outlook. Turning now to slide five. We also wanted to provide investors with a view of where we see the business heading in 2027 as the benefits of our transformation become more fully realized. We expect that our portfolio actions will drive increased penetration in our higher growth, higher margin focus categories. By year end 2027, we expect to complete the actions required to deliver the synergies and to achieve the majority of the $650 million target. We also anticipate organic volume growth as we leveraged the BERI acquisition, which created a stronger, more diversified portfolio with expanded product offerings, broader geographic reach, and enhanced capabilities and innovation and sustainability. Against this backdrop, we have line of sight to delivering double digit adjusted EPS growth in calendar year 2027. We're expecting leverage to be approximately three times by year end, are modestly growing the dividend. We're entering this next chapter from a position of strength. The underlying business is performing well, integration is on track, and we see a compelling path to accelerating earnings growth and cash flow generation over the next several years. Moving to slide six and our financial performance for the fourth quarter and full year. The business generated quality revenue of $6.4 billion, adjusted EBITDA of $1,045,000,000 and adjusted EBIT of $836,000,000. Each of these metrics increased versus the prior year period, driven by synergy realization, disciplined cost management, and one additional month of acquired Barry earnings, which supported further margin expansion during the quarter. Adjusted EPS increased 23% to $1.23 per share for the quarter at the high end of our outlook range, This includes benefits from organic volume growth, strong synergy capture, and responsible price and cost management during a period of rapid inflation. For the fiscal year, free cash flow was $1.3 billion, which was impacted by the Middle East conflict. Steve will discuss these dynamics in further detail later on the call. Today, the board also declared a quarterly dividend of $0.65 per share, which represents a modest increase over the prior year. and reflect our long-standing commitment to annual dividend growth. Turning to slide seven. As I mentioned earlier, synergies are tracking ahead of expectations, primarily driven by accelerated execution of our G&A and procurement initiatives. We have also made progress on operational and network synergies, which we expect to benefit earnings growth and productivity over the next two years. Finally, We achieved half of our three-year growth synergy target this year with new business awards representing nearly $140 million compared to our initial $280 million three-year goal. As we expected, we're winning new business by bringing together highly complementary product portfolios with participation in attractive categories. This allows us to unlock new opportunities that neither legacy company could have accessed on its own. Let me give you just one example. In Mexico, we recently extended our relationship with a legacy Amcor customer that specializes in beauty and wellness, so that we are now leveraging expertise and closures from the legacy Berry team to produce caps for their product as well. In fact, just one year into the integration, our pipeline of growth synergies continues to build, which reinforces are a long-term expectation that there is greater potential for revenue synergies beyond the initial $280 million three-year target. Keep in mind that fiscal year earnings benefited by a few million dollars as a result of these wins, which are expected to ramp up further in the coming months. Taking all these synergies together, we achieved $115 million in the fourth quarter, resulting in full-year synergies of $285 million, which were 10% ahead of our initial target. Looking ahead, the organization remains focused on driving out the cost synergies while taking advantage of our enhanced capabilities to deliver growth with our commitment to deliver the total target of $650 million over three years intact. With that, I'll turn the call over to Steve.