Amcor plc Ordinary Shares Jefferies Global Industrials Conference 2026

All right. Good afternoon, everyone. We've got Steve Scherger here from Amcor. My name's Ramoun. I'll open it up to Q&A at the end, but I've got a few questions for Steve to kick it off. Steve, we're entering year two of the Berry merger. Maybe kick it off with how the pace of that integration's going, and touch on the synergy run rate versus your overall targets there, and then we'll jump into it.

Yep. I'll be glad to. Ramoun, thanks for taking the time today. Thanks for the audience as well, for joining us, so appreciate that. Yeah. Thank you. We're now a little over a year into the acquisition of Berry and creating Amcor in the state that it's in today. When we completed the acquisition and established the goal, $650 million of synergies were the three-year targets that we established for the business. Year one target, $260 million. We're now post year one, and we captured $285 million of synergies in the first year. Importantly, those drop through to the bottom line for us, which is obviously critical when you take on an acquisition of this scale and help to drive double-digit EPS growth for the year. We're entering into a six-month transition period here. We're changing our fiscal year to 12/31.

We expect to capture another $130 million of synergies during that six-month period, which is also in line with our expectations. $650 million over three years, our expectation we'll make that in that three-year period of time. Our internal goals are obviously to get there faster. The mix is as we expected it to be. We've got an important mix of procurement-related synergies. We acquire, every year, over $13 billion of raw materials, so we established a strong synergy target around procurement. SG&A, of course, $100-plus million taken out of the business. We've got a nice trajectory on revenue synergies, about a $280 million goal for three years, about $60 million of EBIT. We've captured $140 million of real business that is new to the company, much of which will start to come in over the coming quarters.

So we also, just including the commentary, we indicated we would spend about $280 million to capture the $650 million of synergies. We've spent about $160 million of that, so we're nicely on our way. So overall, really in line, slightly ahead of our expectations on synergy capture.

Yeah. Maybe on the revenue synergy side, it's a pretty good outcome so early on. What's driving that? Is it cross-sell? Because there was minimal overlap with Berry in terms of the product set, so just the motivation of customers coming to you Yeah is driving it.

We like what we see, and I say that, and you touched on it there. The combination, there was very little actual product overlap, and so we've seen really no revenue leakage from the combination, meaning we haven't gotten so large with a customer who says, "I've got to kind of redistribute." That's good. The revenue synergies are, in fact, additive, and they tend to fall into a couple of categories. One tends to be a little more systems-based, meaning that we can sell you now multiple components of a package. For example, we made the yogurt cup before, now we can make the lid. Creates a little more of a systems-based approach. We can sell multiple components to you as customer. Gives you confidence that it's coming from one company, more confidence in the combination.

We're doing that in our healthcare space, making for single-dose applications, making the blister card, and then also making the bottle. We're seeing some real nice movement in that direction. We're also seeing some customer wins that are coming from some of the PPWR and some of the EPR fees. We've got some new innovation that is associated with, for example, a bottle with a dispenser on the top. We've got some innovation that allows us to make both of those for you as a customer, before either company alone was making one. So we hold a pretty high bar, very high bar actually, to what we count. It has to be that we couldn't have sold you that business individually as either company. It has to be new to us, and that's been good traction.

It actually has exceeded our expectations a bit, which gives us a lot of confidence in that $280 million run rate over the next few years.

Great. Just turning it to the current operating environment, very volatile in the raws. Maybe just touch on what you're seeing on raw material prices and Amcor's strategy of recouping those costs.

Yeah. No, I appreciate you raising it, and it has been. It's been a very volatile time really for the last several years. If you think about the inflation that the day-to-day consumer has absorbed over the last several years, it is very substantial, and we, of course, are a part of that as a packager. With the Middle East conflict and the movement in resins, so of that $13 billion a year that we acquire in raw materials, $5 billion of it is resin-based. Within that resin base, we acquire resins around the world. Only about 4% of it actually comes from the Middle East, which is obviously experiencing the significant unfortunate disruptions that are happening there. Overall, inflation has been very substantial.

We passed through $280 million of price inflation to our customers in what was our fourth quarter, so the last quarter, and that was in line with the inflation that we were experiencing. So we, over the last several years, have developed the muscle, if you will, the capabilities that when we see significant disruption on costs, that we work with our customers hand in hand to pass that through them on a significantly reduced lag basis. In other words, do it quickly, do it in line with the inflation that we're experiencing, and we are successful at doing that in the prior quarter, and we'll continue and have expectations we'll do that here for the coming quarters. Unfortunately, it's not unprecedented because we've seen periods like this. It's not preferred, obviously. Our customers have come to understand that we want to keep you in product, we want to keep you in supply, want to do it well, and that this is the best way to do it, is to pass it through to you in a way that's consistent, that is not a win-lose.

It's in line with what we're actually experiencing, and we've had good execution on that front, expect to continue to do so. It remains a volatile environment, as you indicated.

Yeah. You guys have tightened the lags historically that you've had to much shorter sort of- We have.

We have, and it's important because, generally, the lags, if you will, lag from an inflationary environment to a price change, has tended to be in that 3-month range. Historically, it went years back, it would've been longer. It's been tightened down to 3. Actually, in times of significant disruption like we've been experiencing, we'll tighten them up even more down to a month, so that we're in literally a very reduced lag. Now, that tends to be temporary because you don't want it to be permanent. It doesn't help with forecasting for our customers, doesn't help them with cost consistency. But it's something that we'll do for periods of time when we have this level of disruption, which allows us to keep that relationship in line like we did in the prior quarter and will do for the coming quarters.