10-QPeriod: Q3 FY2021

Amcor plc Quarterly Report for Q3 Ended Mar 31, 2021

Filed May 6, 2021For Securities:AMCRAMCCF

Summary

Amcor plc reported solid financial results for the nine months ended March 31, 2021, demonstrating resilience and operational strength. Net sales increased by 0.9% to $9.41 billion, driven by volume growth in both the Flexibles and Rigid Packaging segments, alongside favorable pricing. Net income attributable to Amcor plc saw a significant jump of 58% to $684 million, leading to a substantial increase in diluted Earnings Per Share (EPS) to $0.438. This performance reflects the successful integration of the Bemis acquisition, ongoing synergy realization, and improved cost management, including reduced interest expenses and lower restructuring costs. The company maintained a strong liquidity position with $617 million in cash flow from operations for the nine-month period and $1.2 billion in undrawn credit facilities, underscoring its ability to navigate market uncertainties and fund ongoing operations, dividends, and share repurchases. For the third quarter ended March 31, 2021, Amcor also showed positive momentum. Net sales increased by 2.0% to $3.21 billion, while net income attributable to Amcor plc surged by 48% to $267 million, resulting in diluted EPS of $0.173. The Flexibles segment, in particular, saw a notable improvement in Adjusted EBIT margin. The company's proactive approach to managing costs, including SG&A expenses and interest expense, coupled with effective management of raw material price pass-throughs, contributed to the improved profitability. Amcor continues to execute on its strategic priorities, including integration synergies and capital allocation through share buybacks, while reinforcing its commitment to employee safety and operational continuity amidst ongoing global economic factors.

Financial Highlights

54 data points
Beta

Revenue

$3.21B

21.3% Gross Margin

Net Income

$267.00M

8.3% Net Margin

EPS (Diluted)

$0.86

Total Assets

$16.59B

Cash & Equivalents

$690.00M

Free Cash Flow

$175.00M

Financial Statements
Beta
Revenue$3.21B
Cost of Revenue$2.52B
Gross Profit$682.00M
R&D Expenses$25.00M
SG&A Expenses$325.00M
Operating Income$373.00M
Interest Expense$36.00M
Net Income$267.00M
EPS (Basic)$0.86
EPS (Diluted)$0.86
Shares Outstanding (Basic)310.16M
Shares Outstanding (Diluted)310.00M

Key Highlights

  • 1Net sales for the nine months ended March 31, 2021, increased by 0.9% to $9.41 billion, reflecting growth in both Flexibles and Rigid Packaging segments.
  • 2Net income attributable to Amcor plc for the nine months jumped 58% to $684 million, with diluted EPS rising to $0.438.
  • 3The company reported strong cash flow from operating activities of $617 million for the nine months ended March 31, 2021.
  • 4Adjusted EBIT from continuing operations for the nine months increased by 8.7% in the Flexibles segment and 5.9% in the Rigid Packaging segment.
  • 5Selling, General, and Administrative (SG&A) expenses decreased by 7.0% for the nine-month period, aided by synergies and cost savings initiatives.
  • 6Interest expense decreased significantly by 28.5% for the nine months, attributed to debt repayment and lower interest rates.
  • 7Amcor completed a one-year extension on its $3.75 billion revolving credit facilities, enhancing liquidity and financial flexibility.

Frequently Asked Questions

For the nine months ended March 31, 2021, Amcor reported a 0.9% increase in net sales to $9.41 billion. Net income attributable to Amcor plc significantly grew by 58% to $684 million, and diluted EPS rose to $0.438 from $0.269 in the prior year. This improvement was driven by higher gross profit, Bemis acquisition synergies, reduced costs, and lower interest expenses.

Amcor generated $617 million in net cash provided by operating activities for the nine months ended March 31, 2021, a notable increase from $470 million in the prior year. The company also has substantial financial flexibility with $1.2 billion in undrawn credit facilities as of March 31, 2021, and had extended its $3.75 billion in revolving credit facilities by one year.

Amcor is continuing with its 2019 Bemis Integration Plan and its 2018 Rigid Packaging Restructuring Plan. For the nine months ended March 31, 2021, restructuring and related expenses net decreased to $22 million from $62 million in the prior year, primarily due to a gain from the disposal of a non-core business. The company continues to expect to realize approximately $180 million in pre-tax synergies from the Bemis integration by the end of fiscal year 2022.

Amcor's total debt stood at $6.60 billion as of March 31, 2021, with net debt at $5.91 billion. The company has been actively managing its debt by repaying higher-cost debt and utilizing commercial paper, leading to a significant decrease in interest expense. Amcor maintains investment grade credit ratings and has access to substantial credit facilities, indicating a stable capital structure.