10-QPeriod: Q1 FY2025

Amcor plc Quarterly Report for Q1 Ended Sep 30, 2024

Filed November 1, 2024For Securities:AMCRAMCCF

Summary

Amcor plc (AMCR) reported its financial results for the quarter ended September 30, 2024, showing a modest increase in net income attributable to Amcor plc to $191 million, up from $152 million in the prior year, translating to a diluted EPS of $0.132, a 26% increase. This improvement was driven by higher gross profit, lower restructuring expenses, and a favorable shift in "Other income/(expenses), net," partially offset by increased selling, general, and administrative expenses. Despite a 3% decrease in net sales to $3,353 million, primarily due to unfavorable price/mix impacts and the pass-through of lower raw material costs, the company demonstrated operational resilience. The Flexibles segment saw a slight sales decrease but an improvement in Adjusted EBIT, while the Rigid Packaging segment experienced a more significant sales decline but maintained its Adjusted EBIT. The company's liquidity remains strong with $1.9 billion in undrawn credit facilities, and management anticipates continued performance improvement into fiscal year 2025, though acknowledging ongoing economic volatility and geopolitical risks.

Financial Highlights

54 data points
Beta

Revenue

$3.35B

19.7% Gross Margin

Net Income

$191.00M

5.7% Net Margin

EPS (Diluted)

$0.66

Total Assets

$16.91B

Cash & Equivalents

$432.00M

Free Cash Flow

-$269.00M

Financial Statements
Beta
Revenue$3.35B
Cost of Revenue$2.69B
Gross Profit$659.00M
R&D Expenses$28.00M
SG&A Expenses$276.00M
Operating Income$312.00M
Net Income$191.00M
EPS (Basic)$0.66
EPS (Diluted)$0.66
Shares Outstanding (Diluted)288.80M

Key Highlights

  • 1Net income attributable to Amcor plc increased by 26% to $191 million for the quarter, with diluted EPS rising to $0.132.
  • 2Consolidated net sales decreased by 3% to $3,353 million, impacted by unfavorable price/mix and lower raw material cost pass-throughs.
  • 3Gross profit increased by 2% to $659 million, with gross profit margin improving to 19.7% from 18.7% year-over-year.
  • 4Restructuring and related expenses significantly decreased by $22 million to $6 million, contributing to the net income improvement.
  • 5The Flexibles segment showed stable Adjusted EBIT year-over-year at $329 million, despite a 1% dip in net sales.
  • 6The Rigid Packaging segment's net sales declined by 8% to $801 million, but its Adjusted EBIT remained flat at $62 million.
  • 7Net debt increased to $6.9 billion from $6.1 billion at the prior quarter end, driven by operating cash flow use and investing activities.
  • 8Amcor has $1.9 billion in undrawn credit facilities, indicating strong liquidity.

Frequently Asked Questions

The primary drivers for the 26% increase in net income attributable to Amcor plc were a $14 million increase in gross profit, a significant $22 million decrease in restructuring and related expenses, and a $20 million favorable swing in 'Other income/(expenses), net', largely due to less negative impact from highly inflationary accounting in Argentina compared to the prior year. These were partially offset by higher selling, general, and administrative expenses and income tax expenses.

Consolidated net sales decreased by 3% to $3,353 million. This decline was primarily attributed to an unfavorable price/mix impact of approximately 3% and the pass-through of lower raw material costs ($20 million). Higher sales volumes of approximately 2% partially offset these factors. Currency impacts also had a negative effect of $16 million.

Amcor maintains a strong liquidity position, with $1.9 billion in undrawn credit facilities available as of September 30, 2024. Management believes its operating cash flows, combined with available borrowings, are sufficient to fund operations, capital expenditures, and other commitments into the foreseeable future. The company expects performance to continue improving in fiscal year 2025, despite ongoing economic uncertainties.

Restructuring and related expenses decreased substantially by $22 million to $6 million for the three months ended September 30, 2024, compared to the same period in 2023. This reduction was mainly due to lower expenses associated with the 2023 Restructuring Plan, contributing positively to the net income growth.