10-QPeriod: Q2 FY2023

Amcor plc Quarterly Report for Q2 Ended Dec 31, 2022

Filed February 8, 2023For Securities:AMCRAMCCF

Summary

Amcor plc (AMCR) reported solid financial results for the second quarter of fiscal year 2023, ending December 31, 2022. The company demonstrated a strong increase in net sales, driven by favorable price/mix and a significant gain from the disposal of its Russian business. This strategic divestiture contributed substantially to the reported net income and diluted earnings per share, showcasing effective portfolio management. Despite macroeconomic headwinds such as inflation and supply chain disruptions, Amcor maintained operational resilience. The company's focus on cost management and passing through raw material costs helped mitigate some of these pressures. Furthermore, Amcor continues to invest in its core segments, Flexibles and Rigid Packaging, showing stable performance in Adjusted EBIT for Flexibles and growth in Rigid Packaging, indicating a balanced approach to profitability and strategic growth. The company also reinforced its commitment to shareholder returns through dividend payments and ongoing share repurchase programs.

Financial Highlights

53 data points
Beta

Revenue

$3.64B

18.2% Gross Margin

Net Income

$459.00M

12.6% Net Margin

EPS (Diluted)

$1.53

Total Assets

$17.48B

Cash & Equivalents

$837.00M

Free Cash Flow

$405.00M

Financial Statements
Beta
Revenue$3.64B
Cost of Revenue$2.98B
Gross Profit$662.00M
R&D Expenses$24.00M
SG&A Expenses$298.00M
Operating Income$559.00M
Interest Expense$79.00M
Net Income$459.00M
EPS (Basic)$1.54
EPS (Diluted)$1.53
Shares Outstanding (Diluted)297.00M

Key Highlights

  • 1Net sales increased by 4% to $3,642 million for the three months ended December 31, 2022, compared to the prior year period, driven by favorable price/mix.
  • 2Net income attributable to Amcor plc surged by 104% to $459 million, largely due to a $215 million pre-tax net gain from the sale of the Russian business.
  • 3Diluted EPS rose by 107% to $0.307 for the quarter, reflecting the strong net income performance and a reduction in outstanding shares.
  • 4The Flexibles segment reported stable Adjusted EBIT ($353 million) despite challenging inflationary pressures, with net sales up 4%.
  • 5The Rigid Packaging segment saw a 5% increase in Adjusted EBIT to $57 million and a 4% increase in net sales, demonstrating growth in this segment.
  • 6Amcor completed the sale of its Russian business for $365 million, recognizing a pre-tax net gain and utilizing proceeds for strategic initiatives, share buybacks, and debt reduction.
  • 7The company's liquidity remains strong, with $0.9 billion in undrawn credit facilities available as of December 31, 2022, and a commitment to ongoing shareholder returns via dividends and a new $100 million share buyback program.

Frequently Asked Questions

The primary driver of the significant increase in net income for the three months ended December 31, 2022, was the pre-tax net gain of $215 million recognized from the disposal of Amcor's Russian business.

Amcor is managing inflationary pressures and supply chain disruptions by working closely with suppliers and customers, driving cost efficiencies within the business, and strategically passing through higher raw material costs. The company also leverages its global capabilities and expertise to navigate these challenges.

Amcor plans to invest $110 million to $130 million of the cash received from the Russian business sale into initiatives to offset divested earnings. Additionally, up to $100 million will be used for share repurchases, with the remainder allocated to reduce net debt.

The Flexibles segment reported stable Adjusted EBIT of $353 million, while the Rigid Packaging segment saw an increase in Adjusted EBIT to $57 million. Both segments experienced net sales growth, demonstrating their continued operational performance despite economic challenges.