10-KPeriod: FY2022

Amcor plc Annual Report, Year Ended Jun 30, 2022

Filed August 18, 2022For Securities:AMCRAMCCF

Summary

Amcor plc's fiscal year 2022 Form 10-K filing reveals a company navigating a complex global economic environment, marked by inflationary pressures, supply chain disruptions, and geopolitical events such as the Russia-Ukraine conflict. Despite these challenges, Amcor demonstrated resilience with a net sales increase of 13.1% to $14.5 billion. However, net income attributable to Amcor plc decreased by 14.3% to $805 million, largely due to increased restructuring, impairment, and related expenses, particularly those associated with exiting its Russian operations and broader Russia-Ukraine conflict impacts. The company's strategic focus remains on its "focused portfolio" and "differentiated capabilities," aiming to be the leading global packaging company. Sustainability continues to be a core tenet, with ongoing investments in responsible packaging innovation. Amcor's operations are broadly split between two segments: Flexibles (77% of net sales) and Rigid Packaging (23% of net sales). The Flexibles segment saw net sales grow by 11.1%, while Rigid Packaging sales increased by 20.2%. The company also returned significant capital to shareholders through dividends and share repurchases, completing $600 million in buybacks during the fiscal year and announcing a further $400 million program. Management is optimistic about continuing to manage supply chain volatility and inflationary impacts through pricing actions and operational efficiencies.

Financial Highlights

55 data points
Beta

Revenue

$14.54B

19.4% Gross Margin

Net Income

$805.00M

5.5% Net Margin

EPS (Diluted)

$2.65

Total Assets

$17.43B

Cash & Equivalents

$775.00M

Free Cash Flow

$1.53B

Financial Statements
Beta
Revenue$14.54B
Cost of Revenue$11.72B
Gross Profit$2.82B
R&D Expenses$96.00M
SG&A Expenses$1.28B
Operating Income$1.24B
Interest Expense$159.00M
Net Income$805.00M
EPS (Basic)$2.66
EPS (Diluted)$2.65
Shares Outstanding (Basic)302.80M
Shares Outstanding (Diluted)303.20M

Key Highlights

  • 1Net sales increased by 13.1% to $14.5 billion in fiscal year 2022, driven by favorable price/mix and volumes.
  • 2Net income attributable to Amcor plc decreased by 14.3% to $805 million, impacted by $213 million in net expenses related to the Russia-Ukraine conflict and other restructuring/impairment charges.
  • 3The company is strategically exiting its Russian operations, incurring a $90 million impairment charge and $110 million in other Russia-Ukraine related costs during FY2022.
  • 4The Flexibles segment, representing 77% of net sales, saw sales grow by 11.1%, with Adjusted EBIT increasing by 6.3%.
  • 5The Rigid Packaging segment, representing 23% of net sales, experienced a 20.2% sales increase, though Adjusted EBIT decreased by 3.3%.
  • 6Amcor returned $732 million in dividends and completed $600 million in share repurchases during FY2022, announcing a new $400 million buyback program.
  • 7The company continues to invest approximately $100 million annually in R&D to drive innovation in sustainable packaging solutions.

Frequently Asked Questions

Amcor experienced a 13.1% increase in net sales to $14.5 billion, driven by a combination of favorable price/mix (3.4%) and marginally favorable volumes (0.4%). However, net income attributable to Amcor plc decreased by 14.3% to $805 million due to significant increases in restructuring, impairment, and related expenses, notably those stemming from the Russia-Ukraine conflict and the exit from Russian operations.

The conflict led to a proactive suspension of operations in Ukraine and the decision to sell Russian operations. This resulted in $213 million in net expenses in FY2022, including impairment and restructuring costs, and specifically a $90 million non-cash impairment charge related to the Russian assets held for sale. The company also incurred $48 million in other impairment charges for assets in the conflict region and $62 million in restructuring costs.

Sustainability is central to Amcor's business and growth strategy. The company is committed to designing all its packaging to be recycled, compostable, or reusable by 2025 and increasing its use of recycled content. Amcor invests approximately $100 million annually in research and development to drive innovation in responsible packaging, focusing on product innovation, consumer participation, and infrastructure development. This includes efforts to reduce greenhouse gas emissions and achieve net-zero emissions by 2050.

Amcor experienced persistent supply shortages and price volatility for certain raw materials and inputs during FY2022 due to factors including the COVID-19 pandemic and the Russia-Ukraine conflict. The company is working closely with suppliers and customers, leveraging its global capabilities, and implementing pricing actions and productivity programs to mitigate the impact of inflation and supply chain disruptions. While successful in managing some disruptions, these challenges are expected to continue.