Earnings call transcript: Amcor beats Q1 2026 earnings expectations

Amcor reported its first-quarter earnings for fiscal year 2026, surpassing analyst expectations with an adjusted earnings per share (EPS) of $0.19, compared to the forecasted $0.18. Revenue also slightly exceeded projections, reaching $5.75 billion. Following the announcement, Amcor’s stock rose 2.54% in aftermarket trading to $7.87, reflecting positive investor sentiment toward the company’s performance and future outlook. The packaging giant currently trades at $8.07, with a substantial 6.32% dividend yield that ranks among the highest in its sector.

Key Takeaways

• Amcor’s adjusted EPS for Q1 2026 was $0.19, a 5.56% surprise over forecasts.
• Revenue reached $5.75 billion, slightly above expectations.
• The stock price increased by 2.54% in aftermarket trading.
• The company reported a 25% increase in net sales for Global Flexible Packaging Solutions.
• Amcor expects to achieve $260 million in synergies for FY2026.

Company Performance

Amcor demonstrated strong performance in the first quarter of fiscal year 2026, with a significant 18% year-over-year increase in adjusted EPS. The company attributed its success to robust growth in its Global Flexible Packaging Solutions segment and the successful integration of the Berry acquisition. Despite a 2% decline in volumes, Amcor’s focus on emerging markets and key product categories helped offset weaknesses in other areas.

Financial Highlights

• Revenue: $5.75 billion, slightly above the $5.74 billion forecast.
• Earnings per share: $0.19, compared to a forecast of $0.18.
• Adjusted EBIT: $687 million, a 4% increase on a comparable basis.
• EBIT margin: 12%, up 110 basis points from the previous year.
• Free cash flow outflow: $343 million.

Earnings vs. Forecast

Amcor exceeded market expectations with an EPS of $0.19, surpassing the forecasted $0.18 by 5.56%. Revenue also came in slightly higher than anticipated at $5.75 billion, compared to the $5.74 billion forecast, marking a 0.17% surprise. This earnings beat is consistent with the company’s historical performance trend, where it has often met or exceeded analyst expectations.

Market Reaction

Following the earnings announcement, Amcor’s stock experienced a 2.54% increase in aftermarket trading, closing at $7.9. This positive movement suggests investor confidence in the company’s ability to maintain its growth trajectory. The stock remains within its 52-week range, with a high of $10.71 and a low of $7.67, indicating room for potential growth. According to InvestingPro analysis, Amcor appears slightly overvalued at current levels, with a Financial Health Score of 2.44 ("FAIR"). Investors seeking deeper insights can access Amcor’s comprehensive Pro Research Report, one of 1,400+ detailed analyses that transform complex data into actionable intelligence.

Outlook & Guidance

Amcor provided an optimistic outlook for FY2026, projecting full-year adjusted EPS between $0.80 and $0.83, representing 12-17% growth. The company also anticipates free cash flow of $1.8 to $1.9 billion and aims to deliver at least $260 million in synergies. Amcor’s strategic initiatives, including exploring alternatives for non-core assets and focusing on high-growth categories, are expected to drive future performance. InvestingPro data shows Amcor offers a compelling 6.32% dividend yield, significantly above its 5-year average of 5%, making it an interesting option for income-focused investors despite its current valuation.

Executive Commentary

CEO Peter Konieczny emphasized Amcor’s strong positioning, stating, "We are uniquely positioned with $650 million in identified synergies." CFO Michael Casamento expressed confidence in achieving the full-year synergy target, noting, "We feel really confident in the ability to deliver the full year of that $260 million."

Risks and Challenges

• Supply chain disruptions could impact production and delivery timelines.
• Market saturation in developed regions may limit growth opportunities.
• Macroeconomic pressures, such as inflation, could affect cost structures.
• Potential regulatory changes in key markets may pose compliance challenges.
• Currency fluctuations could impact financial results.

Q&A

During the earnings call, analysts inquired about Amcor’s healthcare segment, which was flat but expected to improve. The company also highlighted growth opportunities in private labels and addressed operational issues in its North American beverage business, which have been resolved. Executives expressed optimism about achieving positive volumes in the second half of the fiscal year. With a beta of 0.69, Amcor offers lower volatility than the broader market, which may appeal to defensive investors. For comprehensive analysis of Amcor and similar dividend stocks, InvestingPro provides exclusive portfolio ideas and advanced screening tools to identify opportunities aligned with your investment strategy.

Full transcript - Amcor (AMCR) Q1 2026:

Peter Konieczny, Chief Executive Officer, Amcor: Thank you for standing by. At this time, we welcome everyone to the Amcor 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 Tracey Whitehead, Head of Investor Relations. You may begin.

Tracey Whitehead, Head of Investor Relations, Amcor: Thank you, Operetta, and thank you, everyone, for joining Amcor’s Fiscal 2026 First Quarter Earnings Call. Joining today is Peter Konieczny, 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. A 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.

Peter Konieczny, Chief Executive Officer, Amcor: Thank you, Tracey, 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 $0.193 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 and performance, improved productivity, and synergy delivery toward the upper end of our expected range. Our synergy run rate continues to build, and we have a clear line of sight to opportunities that will drive at least $260 million in synergy benefits in Fiscal 2026. 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 Berry. As a combined company, our focus on safety remains absolute, and Fiscal 2026 has started well with strong performance. For Q1, our industry-leading safety metrics continue with Amcor’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 Berry, 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 12-17% and doubling free cash flow over Fiscal 2025. 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 through Fiscal 2028, including at least $260 million in Fiscal 2026. 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 swift progress underscores our commitment to disciplined 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 2026 guidance. Importantly, Amcor is well positioned with significant earnings and cash flow growth expected through delivery of $260 million in synergies, largely under our control and not impacted by divestments of non-core assets. This means achieving our guidance for 12%-70% EPS growth this year is not dependent on improvements in the macroeconomic environment or in customer or consumer demand. Fifth, the board has approved an increase in Amcor’s quarterly dividend to $0.13 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 have 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 2026 is off to a good start as our businesses benefited from disciplined cost performance, improved productivity, and delivery of cost and financial synergies, while also building a pipeline of revenue synergies. First quarter EPS of $0.193 per share was above the midpoint of our guidance range, growing 18% on a constant currency basis. Excluding non-core North American 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. 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 Amcor’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, excuse me, 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’re 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 2026. We’re confident in delivering at least $260 million in synergies this year and $650 million in total through Fiscal 2028. 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 Amcor’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 of the past decade.

He will continue with Amcor in an advisory capacity through June, working closely with our teams to support a smooth transition. We look forward to welcoming Steve Sugar, who will join Amcor as CFO next week. Steve brings deep industry expertise and a strong understanding of both the U.S. 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.

Michael Casamento, Chief Financial Officer, Amcor: Hello everyone, and thank you, PK, for those kind words. It’s been a privilege to work with our talented teams over the years, and I look forward to continuing to support Amcor’s strategic objectives over the next several months while helping Steve transition into the role and ensure that he is well equipped to continue delivery of the significant opportunities ahead and value capture from the transformational Berry acquisition. Now, before we get into further detail, I note that comparative data throughout our earnings materials will continue to represent the legacy Amcor business only for most of the fiscal year.

However, we also understand that insights on the performance of the business on a like-for-like basis is important to understand, and several of our comments today related to volumes and adjusted EBIT will be focused on first quarter performance compared with estimated prior period results for the combined legacy Amcor and Berry businesses. Starting with the global flexible packaging solutions segment on slide seven. Net sales increased 25% on a constant currency basis, primarily driven by the Berry acquisition. On a comparable basis, net sales were down 2%, with favorable price mix dynamics offset by a 2.8% decline in volumes. By region, demand across the developed markets of North America and Europe was down low single digits, with volumes across emerging markets in line with last year, reflecting growth in Asia, offset by lower demand in Latin America.

From an end market perspective, volumes in our focus categories reflected relative strength and were broadly in line with the prior year. We saw good growth in pet care and dairy categories and volumes comparable to last year in healthcare, offsetting softer demand in fresh meat and liquids. Broader nutrition was weaker, including in categories such as snacks and confectionery, coffee, and condiments, partly offset by growth in other categories, including fresh produce and prepared meals. Adjusted EBIT rose 28% on a constant currency basis to $426 million, driven primarily by approximately $75 million in acquired earnings net of divestments. On a comparable basis, EBIT was up approximately 2%. Reflecting synergy benefits and improved cost performance and productivity, partly offset by the unfavorable impact of lower volumes. The quality of the business continues to improve, with EBIT margin of 13.1% up 20 basis points over last year.

Turning to slide eight and the global rigid packaging solution segment. Net sales increased 205% on a constant currency basis, mainly driven by the Berry acquisition. On a comparable basis, net sales were lower than the prior year, reflecting a 1% volume decline excluding non-core North American beverage, as well as unfavorable price mix. By region, demand in North America was in line with the prior year, excluding North American beverage. Outside of the U.S., volumes in Europe were marginally down, and Latin American volumes were down low single digits. From an end market perspective, our strategic focus categories were broadly in line with last year, with strong performance in pet care and continued growth in Europe in healthcare, helping offset softer demand in food service and premium beauty and wellness.

Adjusted EBIT of $295 million increased 365% on a constant currency basis, driven primarily by approximately $240 million in acquired earnings net of divestments. On a comparable basis, and excluding non-core North American beverage, adjusted EBIT was up approximately 3%. Reflecting synergy benefits and disciplined cost performance, partly offset by the unfavorable impact of lower volumes. The strength and value creation from the combination with Berry Global is clear in this segment, with EBIT margin increasing to 11.9%, which is 420 basis points higher than last year. Moving to slide nine, covering cash flow on the balance sheet. Free cash outflow for the first quarter was $343 million, and in line with expectations. It represented a year-over-year improvement of more than $160 million prior to funding acquisition-related costs. Capex was $238 million, up from last year as anticipated, primarily due to the acquisition of Berry.

We continue to expect capital spending in the range of $850 million-$900 million for fiscal 2026, with depreciation expected to slightly exceed Capex. Leverage exiting the quarter was 3.6 times, in line with our expectations given seasonality of cash flows. We expect solid cash flows in Q2 and remain on track to reach the 3.1-3.2 times by fiscal year-end. This outlook includes $100 million of proceeds from the small asset sales announced today, but excludes proceeds from any additional asset sales through the balance of the year, which would support further deleveraging. Our commitment to maintaining an investment-grade balance sheet and as a dividend aristocrat to growing our dividend annually, as we did again this quarter, is unwavering. We are confident that our strong annual cash flow generation fully supports these priorities. Turning to slide 10 and our financial outlook.

Q1 EPS came in above the midpoint of our August guidance, reinforcing our confidence in delivering a year of strong EPS and cash flow growth. As PK noted, we are reaffirming our guidance for adjusted EPS of $0.80-$0.83 per share on a reported basis, representing strong year-over-year growth of 12%-17%. Our confidence in delivering at least 12% earnings growth is fully supported by continued execution against our identified synergy opportunities and does not rely on any improvement in the macro environment or increases in customer or consumer demand. In terms of the December quarter, which historically has been a seasonally weaker quarter, particularly for the legacy Berry business, we expect EPS of $0.16-$0.18 per share, including approximately $50 million-$55 million of synergy benefits.

At the midpoint, this represents around 12% comparable growth against prior-year estimated combined EPS of approximately $0.15 per share. Interest expense and effective tax rate are both expected to be similar to the September quarter. This also means that earnings phasing is expected to be consistent with Amcor’s historical performance, with approximately 55% of EPS being delivered in H2. Growth is also expected to accelerate in the second half and particularly in the fourth quarter as synergies build throughout the year. We’re also reaffirming our free cash flow guidance of $1.8 billion-$1.9 billion in fiscal 2026, which is double fiscal 2025 cash flow and is after funding approximately $220 million of cash integration and transaction costs, of which $115 million was funded in the first quarter.

Our full-year net interest expense range of $570 million-$600 million remains unchanged, and we are currently tracking toward the lower end of our effective tax guidance range of 19%-21%. In summary, we had a solid start to the year, executing well against the outlook we provided in August. With that, I’ll hand back to you, PK.

Peter Konieczny, Chief Executive Officer, Amcor: Thank you, Michael. Before we move to Q&A, I’d like to take a few minutes to discuss the mid to longer-term growth opportunities for Amcor. As we look ahead, we’re well positioned with significant synergies from the Berry acquisition, which over the three-year period ending fiscal 2028 is expected to drive more than 30% EPS growth. At the same time, we’re taking deliberate steps to position Amcor for sustained volume growth in our base business through three strategic initiatives shown on slide 11. First, we have clearly defined our core portfolio, establishing Amcor as the global leader in consumer packaging and dispensing solutions for nutrition, healthcare, and beauty and wellness. These are large, stable end markets with attractive margin profiles where we hold leadership positions and see meaningful opportunities to grow.

As part of our portfolio optimization efforts, we’re exploring strategic alternatives for several businesses that are less aligned with the core portfolio. As mentioned earlier, we’ve already entered into agreements to sell two smaller businesses. We continue to review strategic options to accelerate actions on non-core assets, and we anticipate additional actions this fiscal year. Second, we have meaningful opportunities to supply customers with solutions that neither legacy company could have provided on its own. Our now combined teams are already actioning more than 10 growth synergy initiatives, which include straightforward geographic expansion for cross-selling opportunities, such as taking Berry solutions into Amcor’s Latin America or Asia-Pacific footprint. They also include more complex combined solution offerings that meet customers’ complete packaging needs, including combining legacy Berry containers plus Amcor lids or seals or legacy Amcor bottles and containers with Berry closures.

In just a few months, we have already been awarded new business wins totaling more than $70 million in annualized sales revenue, and our pipeline is building rapidly. As an example, we expanded our business with a large food service customer. Amcor had a strong relationship with the customer and technical know-how, and legacy Berry brought core manufacturing capabilities that were not then available to Amcor. Bringing our business together allows us to accelerate execution for the customer and deliver a disruptive and sustainable solution faster to the market. We also recently won business in Latin America with a large beauty and wellness customer across product categories. This is a great example of Amcor’s ability to mitigate supply chain risk with production flexibility across a stronger multi-site footprint within a single country. This also included a complete solution when combining Amcor’s rigid container with a legacy Berry closure system.

Finally, about 50% of our core portfolio, or $10 billion in annual sales, comes from six key focus categories where volumes have historically grown at mid to high single digit rates with above-average margins, supported by demand for complex packaging solutions. We are already winning in these attractive categories, and with enhanced scale and capabilities post-Berry acquisition, we are even better positioned for continued success. We are making tangible progress across all three strategic initiatives, and we are confident our focus will result in more consistent volume growth in the low single digit range, translating to meaningful long-term earnings growth and shareholder value creation. In closing, this is our first full quarter combined with Berry. The quality of our combined business is showing as we execute well against our financial commitments. Integration is progressing well, and we are building significant synergy momentum, including for revenue synergies.

We moved swiftly on portfolio actions, reaching agreements to sell two smaller non-core businesses. We increased our quarterly dividend, which now stands at $0.13 per share. We have also reaffirmed our fiscal 2026 EPS and free cash flow guidance, which is not contingent on any improvement in the macroeconomic environment or increase in current customer or consumer demand. As we look ahead, we are uniquely positioned with $650 million in identified synergies. Over the three-year period ending fiscal 2028, synergies alone are expected to drive more than 30% EPS growth. At the same time, we are taking deliberate steps with strategic growth initiatives to create an even stronger business that delivers consistent organic growth and value for our shareholders and is the global packaging partner of choice for our customers. Operator, we are ready for questions.

Tracey Whitehead, Head of Investor Relations, Amcor: I would like to remind everyone, in order to ask a question, press star one on your telephone keypad. Again, we ask you, please limit yourself to one question. Your first question comes from the line of Ghansham Panjabi with Baird.

Peter Konieczny, Chief Executive Officer, Amcor: Yeah, thank you, Operator. Michael, first off, congratulations on the announcement, and wish you the very best for the future.

Tracey Whitehead, Head of Investor Relations, Amcor: Thanks, Cass.

Peter Konieczny, Chief Executive Officer, Amcor: Yeah, thanks. PK, just going back to the flexibles business. It looks like after an increase in the first three quarters of fiscal year 2025, the volume cadence is basically reversing the growth from the year-ago period. I think you saw that last quarter as well. What do you think is driving this most recent decline? Is it the same issue with consumer affordability challenges you called out? Confectionery and obviously cocoa prices have gone up significantly. Are you seeing some sort of order pattern distortions because of that, or do you see another sort of leg down in terms of volumes at the consumer level?

Yeah, thanks, Ghansham. I think it’s important for us to take a step back and just remind ourselves again. We expected the volumes to be very similar to Q4, and that’s exactly where they were, down about 2% if you exclude the non-core North American beverage. Now you’re asking specifically about flexibles, which was a little weaker and particularly was weaker in Europe. The flexibles weakness really that we’ve seen is in Europe. If you double-click on that one, you get to a subcategory that we call unconverted film. The unconverted film category was weak essentially following really general market softness. This is film that we make. We don’t further process it. We don’t print it. We don’t cut it. We don’t slit it. We don’t make any pouches. We just sell that film into different end markets.

Those particular segments that have been particularly weak. That is really what’s driven the flexibles demand in the last quarter.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Romain Lecar with Jefferies.

Michael Casamento, Chief Financial Officer, Amcor: Good evening, guys. Michael, congratulations on your announcement from us as well. Just a quick one on just the North American beverage business, if you can give us any kind of update there. It looks like volumes for the quarter fell high single digits there. Just any progress you’re making on turning that business around, given the issues that you identified last quarter, and any update on investments of that business potentially?

Peter Konieczny, Chief Executive Officer, Amcor: I’m happy to take that, Raymond. Look, first off, I’ll say we made really good progress on the operational side with that business. We were reporting a couple of challenges in the last quarter. I was not proud of those, but I have to say kudos to the team that sort of jumped on it. As I was expecting, that was very quickly turned around. We’ve exited the first quarter with those issues completely under control again. That is important. You’re right that volumes softened sequentially from the fourth quarter last year to the first quarter this year. On the back of the operational activities and the strengthening of the business, we actually increased the profitability of the business sequentially, which puts us in a much better spot. Finally, as this is a non-core business, you’re absolutely right. We are pushing ahead.

Ambitiously to find strategic alternatives for that business. We’re exploring a broad range of options. We said about 90 days ago, and I’ll just repeat that today, that we’re very open to all kinds of solutions here, including joint ventures or also partnerships. That is progressing, and we’ll see how that plays out. It’s really hard to be more definitive on timing.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Anthony Pettinari with Citi.

Good evening. With the high growth category, as you called out in slide 11, I’m just, if company volumes were down 2% for the quarter, is it possible to generalize kind of the volume performance of these focus categories? I know there’s six of them, but are these categories posting positive growth and maybe the sort of more base businesses seeing much sharper declines, or are you seeing the same kind of challenges currently in healthcare, beauty and wellness that you’re seeing maybe in the more conventional CPG kind of food service categories?

Peter Konieczny, Chief Executive Officer, Amcor: Yeah, Anthony, I think it’s a great question. Look, I think generally what I would say is that the focus categories, and that’s what we were referring to on that slide, they performed better. They generally performed better than the overall business. They also did collectively in the first quarter of 2026. If I give you a bit of a detail around that, and I start with health, beauty, and wellness, in that area, healthcare would have been in line with prior year, beauty and wellness was down, sort of low single digits. That was certainly reflecting the consumer being more value-oriented. Moving to the nutrition space, the one that I would call out, pet care, really a strong category, continues to grow strongly, very resilient, very happy with the performance there. Dairy is being a subcategory to protein. We’ve seen some low single digit growth.

With really good performance in Europe on yogurt, in North America with cheese, and in Latin, we saw some good performance on margarine. Happy with dairy overall. Meat, the other subcategory in protein on the other side, was a little weaker. I think it’s fair to say that. We’re having a bit of a tough time in the protein cycle, in the meat cycle right now, and that also reflects the value-conscious behavior of the consumers. Food service and liquids, they were also down. Low single to mid single digits. It’s a bit of a mixed bag. When you pull it all together, the focus categories overall, they did perform better than the rest of the business.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of John Purtell with Macquarie Group.

Good day, Peter and Michael. And Michael, thanks for all your help over the years and all the best going forward. Just in terms of the comparable, but up 4% on a 2.8% volume decline. Obviously, there’s some synergies in there. Can you just talk to the sort of, I suppose, the underlying sort of cost and productivity piece? Because it does imply that there’s been some pretty good cost and productivity management there.

Michael Casamento, Chief Financial Officer, Amcor: Yeah, no, thanks, John. I can take that one. Yeah, you’re right. We were really pleased with where the quarter ended up. The teams really focused on the cost side of things, knowing that we were anticipating volumes to be similar to what we saw in Q4. We knew there was going to be some softer demand. We worked really hard to flex the cost base accordingly, manage the shift patterns, manage the line performance, drive cost out where we can, and particularly on the discretionary spend as well. We were really pleased with the performance on that front. Of course, you had the synergy delivery as well, which is really unique to us. I think that’s something.

We were really pleased with the way the synergies ended up toward the upper end of the range that we guided to with $38 million in the quarter. A good mix of G&A and some procurement coming in there as well, some financial synergies. We feel really confident in the ability to deliver the full year of that $260 million. We are really pleased with where that came out and the pipelines that are coming through, which also include, as PK touched in his remarks, revenue synergies as well in that pipeline. We feel pretty good about the synergy delivery overall and where the business is performing from a cost standpoint because we are able to flex when we can see that the volume is a little softer than we would typically like.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of George Staphos with Bank of America.

Peter Konieczny, Chief Executive Officer, Amcor: Hi, everyone. Thanks for taking my question. Thanks for the details. And again, Michael, thanks for everything and best of luck in the next chapter. Really appreciate your support of our research. My question’s on synergy broadly, PK and Michael. Can you talk a little bit more about how the sort of marriage, if you will, of Latam and specialty containers is going with Legacy Berry? I think you touched on a couple of synergy benefits. Can you talk a bit more, provide a bit more color, maybe what kind of growth you’re getting there? And then somewhat relatedly, can you give us a bit more color on this food service award you got, putting the two businesses together and getting a revenue synergy out of that? Thank you very much.

Yeah, thanks, George. I’ll start out here and try to take the three tiers of your question. Let me start off with the synergies. Before I get specifically into the benefits that we would be expecting from the combination of Rigid and Flexible packaging on Latin America, let me just make some high-level comments here. Let’s first of all calibrate ourselves against the fact that we’re really just 180 days into the combination of the two companies. It’s really important to calibrate that because it feels like we’ve been together forever. The teams are really executing well. I’m very pleased with all of that. In the first quarter, we’ve seen synergies coming through and really falling to the bottom line, which were at the upper end of our guidance range.

What you’re not seeing here, because it hasn’t translated yet, is really the momentum that we’re building with the pipelines. Some of that you can take from the guidance. In Q2, obviously, the synergies are stepping up. That gets us, when we think about the exit rates of Q2, to a really clear line of sight of at least $260 million. You will notice that we positioned that a little different to what we said beforehand. We said, "Now we’re saying it’s at least $260 million." We have really strong confidence in the synergy delivery for this year. You’ve been asking about Latam. Latam, and I think you’re connecting that to the decision to combine the two businesses.

We are doing this because we believe that we have an opportunity to more efficiently and effectively address the region of Latin America by representing a larger product suite, which we know is very complementary between the two businesses. That is why we are doing it. When I talk about the synergies that result from that, you referenced, I think, the beauty and wellness customer that actually was in Latin America. It was not the food service customer. That one is North America. In Latin America, it was a beauty and wellness customer. We achieved an agreement for two products across two products. Two things helped us actually land that win. One is we have a combined footprint between Berry and Amcor that actually provided a contingency solution in-house for the customer, which was really high on the customer’s list. More importantly.

We’re combining an Amcor rigid container with a Berry closure. It falls into the bucket of the systems solution cell. That’s the Latin American piece. I hope I captured sort of your question. Thank you.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Jeff Zacosquis with JPMorgan.

Thanks very much. In your raw material cost savings, were they largely in the United States or in Europe? In your description of global rigid packaging, you said your volumes were down 1% against combined prior year X non-core North American beverage. What were they down inclusive of the non-core North American beverage?

Peter Konieczny, Chief Executive Officer, Amcor: Do you want to talk to?

Yeah, no, I can take you on the synergy side. Look, if I break down the synergies for the quarter, that’s probably a better way to think about it. On the synergies in the quarter, we delivered $38 million, which was at the upper end of our guidance range. Of that, $33 million was in the EBIT space. Then we had $5 million financial synergies, which related to some interest benefits as we’ve got more flexibility now with fixed and floating and commercial paper, etc. On the EBIT side of things, of the $33 million, about two-thirds of that was G&A. That comes from the fact we’ve already taken out 450 roles across the business. We are starting to see the benefits there. On the procurement side, again, it was one-third. It was not a significant amount. It was pretty general across the board.

That’s where we ended up for the quarter. As we said, that will build through the second and third quarter into the full year. We feel really confident around that number.

Jeff, I think you asked the question in terms of volume performance. We said Rigid overall, excluding North American beverage, was a point down. If you roll North American beverage in there, it is 2.5% down.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Brook Campbell-Crawford with Barrenjoey.

Speaker 2: Yeah, thanks for taking my question. I know you’re talking about not expecting markets to improve in FY26. Does your EPS range you’ve given for FY26 cover a scenario where volumes continue to decline at that sort of 2.5% year-over-year trend that you saw in the first quarter?

Peter Konieczny, Chief Executive Officer, Amcor: Thanks, Brooke. Let me start this, and maybe Michael wants to build on that. I think we’ve discussed the volume expectations for the first half, right? The first quarter is done. The second quarter we’ve discussed. You’re specifically asking about the back half of fiscal 2026. I’d say if we take a step back, I believe that there is actually even an opportunity for the volumes to be positive in the back half of the fiscal year. The reason for that is, one, is technically we’re cycling softer comps in the back half. We’re also seeing wins coming through now that will translate. I told you that we are very much driving very discrete and select growth initiatives. In the second half, we will have a little more time for them to actually gain traction.

You could even expect the volumes to be positive. Now, what adds to that, though, is the underlying market environment. I do not know how that is going to look like. I think nobody really knows what the underlying consumer and demand environment is going to look like. That creates a bit of the challenge here. What we are going to do in the back half is we are going to do exactly the same thing that we did in the first quarter, which we did well. What we are set sail to do in the second quarter, we will manage our costs, and we will adjust our capacities to the actual volume situation. We will focus on the delivery of synergies. That is what we have done very well. It was a good recipe in the first quarter. We want to do the same thing in the back half.

Our guidance range obviously includes a number of ranges on volumes outcomes, and volume is not the only driver for our guidance ranges, as you know. Even if the overall macro environment would not improve, that would be covered within our guidance range. That’s the way I always think about it.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Matt Roberts with Raymond James.

Hey, PK and Michael, hello. Michael, I’ll echo others. All the best to you and Australia. You should all be so lucky. Quickly, on the investors you mentioned, can you give a sales and EBITDA contribution? I apologize if I missed that. I assume there’s still about $900 million to go there in the non-core, non-beverage assets. Based on those initial, albeit small, smaller contributions in sales there, where the public markets are trading, how did multiples compare to your prior expectations on that? How’s line of sight for the remaining $900 million that you have remaining? Anything you could, I don’t know if you will frame it, but anything you’d give in potential impact to leverage or timing there would be appreciated. Thank you.

Yeah, sure. Look, I think in terms of the two investments that we announced today, one of those is just a small plant in Europe, sales less than $20 million. Not a significant impact on earnings or sales. The other one was actually a joint venture. We were not consolidating that one. We were equity accounting that. That also contributes to the $100 million in earnings. We were pretty pleased with the outcome of that. We’ll use that cash to pay down debt when it comes in. We continue to focus on the other items. I think PK already touched on the North American beverage business. We’re working hard on the other businesses as well. We’ll keep you up to date as that progresses.

Your next question comes from the line of Cameron McDonald with E&P.

Good morning. Just in terms of the volume performance. I appreciate that you’ve said that it’s hard to see what the underlying environment is going to be going forward. When you think about either the core business or the North American business, in beverages, are you thinking that that is all organic volume reductions, or have you experienced some market share loss to other substrates, particularly in that North American beverage sector?

Peter Konieczny, Chief Executive Officer, Amcor: Look, generally, I’d say in the way that we look at our whole portfolio, and there are always puts and takes, as you will appreciate. This is not a story of share loss. Generally, I would say that when you dive deeper into the beverage business per se and you talk about shifts between substrates, we have referenced in the past, and I think that is still something. That is the only trend that I would be able to point to, that you have in multi-pack sales that go through big box stores. You have a more attractive price point for consumers when you choose an aluminum bottle versus other substrates. That is the space where, because of where the consumer goes, as the consumer is seeking value.

That’s where you could see, in that specific case, you could see that there is some shift. Other than that, we don’t see anything significant.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Keith Chau with Macquarie Group.

Speaker 4: Hi, PK. Hello, Michael. Welcome to the call. I think the question is that. Keith, this is PK. You really broke up a lot here, and I had a really hard time to follow up with the question.

Peter Konieczny, Chief Executive Officer, Amcor: I’m not getting any better. It’s not getting any better. I’m sorry. I think we probably need to move on. Maybe you can just dial back in again, and we’ll try to take your question when you come back in with a better line.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Nathan Reilly with UBS.

Hey, thanks. Just a question on private label. Can you give us an update on your exposure to private label products and maybe just talk to some volume trends that you’re seeing in that category at the moment?

Peter Konieczny, Chief Executive Officer, Amcor: Yeah, Nathan, I think it’s also a great question. I mean, in private label, you would assume that generally the consumer seeking value would turn to private label more. That’s something that we would expect, that in certain cases we do see and that we want to participate in. Obviously, we have some pretty good exposure to private label across the regions, both in North America and Europe. If I just focus on those two big markets where private label really plays a role, I would also say that we are probably somewhat underrepresented in the market. When you look at the share of private label and our sort of share of business with private label, you will see that we have an opportunity there. That will be a focus area for us to drive additional growth going forward.

That will make us participate in the trend.

Tracey Whitehead, Head of Investor Relations, Amcor: Your next question comes from the line of Gabe Hodgie with Wells Fargo.

Good afternoon. Good evening. My pleasure to work with you. I just had a question about health care. I think the expectation was that it was going to return to growth kind of in the back half of 2025. I think you made some general comments around the business, but just if anything has changed with that trajectory. Maybe, I do not know if you want to talk about it in calendar year terms, but just the prospects for that business in 2026.

Peter Konieczny, Chief Executive Officer, Amcor: Yeah, Gabe. I’d say, first off, I’d say we believe that healthcare is a gem in our portfolio. I’ve said this many times, and I continue to say that. The performance of healthcare has some differences between the regions. What we’re seeing right now is that we’re having a really strong performance in North America. Very happy there. In North America, we tend to be more focused on the medical side of the business. Our performance is improving, but on a comparable basis, a little weaker on the European side, where we have more of a pharma exposure. That has averaged out to overall a flat healthcare business, which I would still say, if I compare it to the prior quarters, is a solid outcome given the fact that medical had improved faster than pharma over time.

My expectations for health care are that we will see continued improvement in that business into calendar 2026 and also into the back half of our fiscal year 2026.

Tracey Whitehead, Head of Investor Relations, Amcor: Ladies and gentlemen, this concludes our question and answer session. I will now turn the call back to management for closing remarks.

Peter Konieczny, Chief Executive Officer, Amcor: Thank you, operator. Listen, I’ll keep this very short here. We feel like we’ve executed a pretty solid quarter in line with our expectations, maybe even a little better than what we expected. We’re very confident in the synergies, with a delivery of at least $260 million. The revenue synergies, they’re also coming through. We talked about those, and the pipeline is really building strongly. We talked about reaffirming our guidance, where the low end of our guidance, the 12% EPS growth, is really just driven by the synergies that we have good line of sight of. In the long term, and this is important for me also to make that point, we continue to really drive the growth strategy on the back of three pillars. One is the portfolio optimization. The other one is, again, capturing the revenue synergies.

The third one would be the focus categories and our drive towards those. Thank you again for joining us. We look forward to the opportunity to sit down with many of you over the course of the quarter. Thank you.

Tracey Whitehead, Head of Investor Relations, Amcor: That concludes today’s call. Thank you all for joining. You may now disconnect.

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