Q3 2025 Amcor PLC Earnings Call

Operator: Well, good day, everyone, and welcome to Amcor's Fiscal 2025 Third Quarter Results Conference. This conference is being recorded.

Well good day, everyone and welcome to M course fiscal 'twenty twenty-five third quarter results Conference. This conference is being recorded at this time I would like to hand things over to MS. Tracey Whitehead head of Investor Relations. Please go ahead ma'am.

Tracey Whitehead: At this time, I would like to hand things over to Ms. Tracey Whitehead, Head of Investor Relations. Please go ahead, ma'am.

Tracey Whitehead: Thank you, Operator, and thank you, everyone, for joining Amcor's Fiscal 25 Third Quarter Earnings Call.

Thank you operator, and thank you everyone for joining M cord seafood twenty-five third quarter earnings call.

Tracey Whitehead: Joining the call today is Peter Konieczny, Chief Executive Officer, and Michael Casamento, Chief Financial Officer. Before I hand over, let me note a few items. On our website, Amcor.com, under the Investor section, you'll find today's press release and presentation, which we'll discuss on the call. Please be aware that we'll also discuss non-GAAP financial measures and related reconciliations can be found in that press release and the presentation.

Peter: Joining the call today is Peter couldn't get to the interim Chief Executive Officer, and Michael Casamento, Chief Financial Officer.

Peter: Before I hand over to let me note a few items on our website amcor dot com under the investors section you'll find today's press release and presentation, which we'll discuss on the call. Please be aware that we will also discuss non-GAAP financial measures and related reconciliations can be found in that press release and the presentation.

Tracey Whitehead: 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 results to be different than current estimates. Reference can be made to Amcor's SEC filings, including our statements on Form 10-K and 10-Q, for further details.

Peter: Food. So 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 results to be different than current estimate referenced can be made to AMCOL and SEC filings, including our statement on Form 10-K and 10-Q.

Peter: Further details.

Tracey Whitehead: 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.

Peter: 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 up with that over to you and PK.

Peter Konieczny: With that, over to you, PK. Thank you, Tracey, and thank you to all who have joined us for today's call.

Speaker Change: Thank you Tracy and thank you to all who have joined us for today's call.

Peter Konieczny: Today is a defining day for Amcor, as we successfully closed our transformational combination with Barry Global earlier than we anticipated and in record time. Early close means that we are now positioned to accelerate earnings growth through the delivery of significant synergies that are identified and within our control. I want to thank the Amcor and BERI teams for their hard work and dedication over the past months. Together, they have navigated challenges and complexity to accomplish a truly remarkable outcome that positions Amcor for a faster start on synergy delivery and growth.

Speaker Change: Today is a defining Dave for encore as we successfully closed our transformational combination with very global.

Speaker Change: Earlier than we anticipated in a record time.

Speaker Change: Early close means that we are now positioned to accelerate earnings growth through the delivery of significant synergies that are identified and within our control.

Speaker Change: I want to thank the Umpqua and Barry teams for their hard work and dedication over the past months.

Speaker Change: Together, they have navigated challenges and complexity to accomplish a truly remarkable outcome that positions <unk> for a faster start on synergy delivery and growth.

Peter Konieczny: As always, on slide three, we begin with safety, our number one priority. This commitment remains unchanged as we welcome 30,000 new colleagues to Amcor. Our total recordable incident rate, TRIR, fiscal year to date was .027. and 69% of our sites have remained injury-free for over a year. Our focus on workforce safety and the well-being of our people is resolute and we continue to achieve industry-leading performance.

Speaker Change: As always on slide three we begin with safety our number one priority.

Speaker Change: This commitment remains unchanged as we welcomed 30000, new colleagues to encore.

Speaker Change: Our total recordable incident rate P. R. I, our fiscal year to date was points here of 27.

Speaker Change: And 69% of our sites have remained injury free for over a year.

Speaker Change: Our focus on workforce safety and the wellbeing of our people is resolute and we continued to achieve industry leading performance.

Peter Konieczny: Our key messages for today are on slide four. First, we continue to deliver EPS growth in Q3, reflecting disciplined execution and resilience in a demand environment that became more variable and uncertain as the quarter progressed, particularly for our North American business. Second, as I mentioned, the Berry combination closed ahead of schedule. It took less than six months from announcement to close, during which time we secured shareholder approvals, completed the necessary refinancing, including a multi-billion dollar debt offering, and obtained unconditional approval from regulators in all required jurisdictions. As a result, our earnings and cash flow guidance has also been updated to reflect expectations for the combined company in the fourth quarter.

Speaker Change: Our key messages for today on slide four first we continued to deliver EPS growth in Q3, reflecting disciplined execution and resilience in a demand environment that became more variable and uncertain as the quarter progressed, particularly for our North American business.

Speaker Change: Second as I mentioned, the Berry combination closed ahead of schedule. It took less than six months from announcement to close during which time, we secured shareholder approvals completed the necessary refinancing, including a multi billion dollar debt offering and obtained unconditional approval from regulators in all.

Speaker Change: Required jurisdictions.

Speaker Change: As a result of our earnings and cash flow guidance has also been updated to reflect expectations for the combined company in the fourth quarter.

Peter Konieczny: And third, our early close also means we will enter fiscal 26 in an even better position. With confidence, the Synergy run rate will start strong and build quickly through the year. The source of synergies has been identified, our execution plans are clearly set out and within our control, and synergies alone give us clear visibility to significant total earnings decretion of approximately 12%.

Speaker Change: And third our early close also means we will enter fiscal 'twenty, six and an even better position with confidence the synergy run rate will start strong and built quickly through the year.

Speaker Change: The source of synergies has been identified our execution plans are clearly set out and within our control and synergies alone give us clear visibility to significant total earnings accretion of approximately 12%.

Peter Konieczny: Turning to slide five. As we begin integration, our focus is clear, deliver identified synergies and grow faster. Experience with previous acquisition tells us that having clear accountability and alignment from day one is critical to our success.

Speaker Change: Turning to slide five.

Speaker Change: As we begin integration our focus is clear deliver identified synergies and grow faster.

Speaker Change: Experience with previous acquisition tells us that having clear accountability and alignment from day, one is critical to our success.

Peter Konieczny: This combination brought together two extraordinary pools of talent and we are fortunate to have a team of leaders in place with significant functional, operational and industry expertise. Our business is organized around two segments. Amcor's global flexibles business is being led by Fred Steffen, who has many years of experience within Amcor, leading large-scale flexible packaging business. And Jean-Marc Galvez, former president of Barry's Consumer Packaging International division, is leading Amcor's global containers and closures. Fred and Jean-Marc are well-supported by world-class functional leaders and dedicated integration teams, with separate workstreams focusing on capturing cost, financial, and growth synergy.

Speaker Change: This combination brought together two extra ordinary pools of talent and we are fortunate to have a team of leaders in place with significant functional operational and industry expertise.

Speaker Change: Our business is organized around two segments <unk>.

Speaker Change: <unk> global flexible business is being led by Fred Stephan was many years of experience with a number of leading large scale flexible packaging businesses.

Speaker Change: Joe Marc Galvez, former president of various consumer packaging International Division is leading <unk> global containers and closures business.

Speaker Change: Credit's Hallmark, a well supported by World class functional leaders and dedicated integration teams with separate work streams, focusing on capturing cost financial and growth synergies.

Peter Konieczny: Slide six provides a recap of the highly compelling rationale for this combination and the alignment with our strategy to become the packaging partner of choice for customers, while also delivering stronger, more consistent and sustainable organic growth and further improving margins. There are a number of growth unlocks now available. The Combined Company is a better business, with a complementary and broader portfolio of primary packaging solutions at scale across consumer goods and health care and markets. In the context of a stronger, larger-scale company, we are now uniquely positioned to further refine our portfolio mix, to focus even more on attractive, higher-value, faster-growing end markets.

Speaker Change: Slide six provides a recap of the highly compelling rationale for this combination and the alignment with our strategy to become the packaging partner of choice for customers, while also delivering stronger more consistent and sustainable organic growth and further improving margins.

Speaker Change: There are a number of growth unlocks now available.

Speaker Change: The combined company is a better business with a complementary and broader portfolio of primary packaging solutions at scale across consumer goods and health care end markets.

Speaker Change: In the context of a stronger larger scale company. We're now uniquely positioned to further refine our portfolio mix to focus even more on attractive higher value faster growing end markets.

Peter Konieczny: With further pruning, we will increase average growth rates, margins, and cash generation across the remaining portfolio, and we continue to advance our work on this review. In addition, Amcor has exceptional and now enhanced capabilities in material science and innovation. providing opportunities to drive growth by effectively and efficiently leveraging our combined resources. with more than 1,500 R&D professionals, an annual R&D investment of approximately $180 million. We can now optimize and redirect R&D spend, providing capacity to focus on solving the most complex functionality and sustainability challenges faced by our customers and consumers. Executing against these growth opportunities and delivering the significant identified synergies is largely within our control and will drive compelling near and long-term value for shareholders.

Speaker Change: With further pruning, we will increase average growth rates margins and cash generation across the remaining portfolio and we continue to advance our work on this review.

Speaker Change: In addition, <unk>.

Speaker Change: <unk> has exceptional and now enhanced capabilities in materials science and innovation.

Speaker Change: Providing opportunities to drive growth by effectively and efficiently leveraging our combined resources.

Speaker Change: With more than 1500, R&D professionals and annual R&D investment of approximately 180 million.

Speaker Change: We can now optimize and redirect R&D spend providing capacity to focus on solving the most complex functionality and sustainability challenges faced by our customers and consumers.

Speaker Change: Executing against these growth opportunities and delivering the significant identified synergies is largely within our control and will drive compelling near and long term value for shareholders.

Peter Konieczny: Turning to synergies on slide 7, the work our integration teams have already completed gives us confidence in delivering 650 million of synergies, which will result in significant earnings growth over the next three years. Approximately 40% of total synergies, or $260 million, is expected to benefit fiscal 26 earnings. A further $260 million of synergies will benefit earnings in fiscal 2027. with a balance in fiscal 28, leading to total EPS accretion in excess of 35% over the three-year period. In addition, we expect one-time cash benefits of $280 million from working capital improvements, which will fund costs to achieve.

Speaker Change: Turning to synergies on slide seven the work our integration teams have already completed gives us confidence in delivering $650 million of synergies, which will result in significant earnings growth over the next three years.

Speaker Change: Approximately 40% of total synergies or $260 million is expected to benefit fiscal 'twenty six earnings.

Speaker Change: A further $260 million of synergies will benefit earnings in fiscal 'twenty seven.

Speaker Change: With the balance in fiscal 'twenty, eight leading to total EPS accretion and excellence in excess of 35% over the three year period. In addition, we expect one time cash benefits of $280 million from working capital improvements, which will fund cost to achieve.

Peter Konieczny: Finally, on slide eight, and the compelling sustainable financial value we're creating. Including synergies, annual cash flow available to reinvest will exceed $3 billion each year by fiscal 28 and will enable us to maintain a strong investment-grade balance sheet. deploy additional cash to support higher levels of organic volume driven growth. finance further M&A and continue funding a compelling and growing dividend for Amcor's current annualized base of 51 cents per share. With stronger cash generation and greater opportunities to invest, we also expect to increase long-term EPS growth and raise the outcomes under our shareholder value creation model to a new and higher level.

Speaker Change: Finally on slide eight and the compelling sustainable financial value we're creating.

Speaker Change: Including synergies annual cash flow available to reinvest will exceed $3 billion each year by fiscal 'twenty, eight and will enable us to maintain a strong investment grade balance sheet.

Speaker Change: Deploy additional cash to support higher levels of organic volume driven growth.

Speaker Change: Finance further M&A and continue funding a compelling and growing dividend for <unk> current annualized base of 51 per share.

Speaker Change: With stronger cash generation and greater opportunities to invest we also expect to increase long term EPS growth and raise the outcomes under our shareholder value creation model to a new and higher level.

Peter Konieczny: Simply put, this combination is a game changer for Amcor's financial profile and provides self-help earnings growth opportunities at a time of increasing uncertainty in the macro environment.

Speaker Change: Simply put this combination is a game changer for <unk> financial profile and provides self help earnings growth opportunities at a time of increasing uncertainty in the macro environment.

Peter Konieczny: Moving to slide nine for a summary of our third quarter financial results. Overall volumes were in line with last year, with modest share gains offset by weaker consumer and customer demand. As Michael will cover in more detail, there were a number of puts and takes across our regions. Volume growth in the low to mid-single-digit range in each of Europe, Asia-Pacific, and Latin America was offset by weaker than anticipated consumer demand in our North American businesses, including North America beverage. Notwithstanding the increasingly dynamic consumer environment, Q3 saw continued growth across key financial metrics with net sales of $3.3 billion and EBIT of $384 million, both marginally higher than last year.

Speaker Change: Moving to slide nine for a summary of our third quarter financial results.

Speaker Change: Overall volumes were in line with last year with modest share gains offset by weaker consumer and customer demand.

Michael: As Michael will cover in more detail there were a number of puts and takes across all regions.

Michael: Volume growth in the low to mid single digit range in each of Europe Asia Pacific and Latin America.

Michael: It was offset by weaker than anticipated consumer demand in our north American businesses, including North America beverage.

Michael: Notwithstanding the increasingly dynamic consumer environment Q3 saw continued growth across key financial metrics with net sales of $3 3 billion in EBIT of $3 $84 million, both marginally higher than last year.

Peter Konieczny: We also delivered another quarter of adjusted EPS growth, up 5% on a comparable basis, benefiting from a continued focus on cost, as well as improving healthcare volumes, which benefited price-mixed trends as anticipated.

Michael: We also delivered another quarter of adjusted EPS growth up 5% on a comparable basis benefiting from a continued focus on cost as well as improving health care volumes with benefited which benefited price mix trends as anticipated.

Michael Casamento: I'll now turn the call over to Michael to cover the third quarter results and our updated outlook in more detail. Thanks P.K. and hello everyone.

Michael: I'll now turn the call over to Michael to cover the third quarter results and our updated outlook in more detail.

Michael: Thanks, Peter and Hello, everyone.

Michael Casamento: Beginning with the flexible segment on slide 10. Volumes for the quarter were up 1% on last year. Modest share gains in several important categories, including healthcare and protein, were partly offset by weaker consumer demand primarily in North America. Overall demand remains solid through the quarter in Europe, Asia and Latin America, with each region achieving low to mid-single digit volumes. China and India continue to deliver mid-to-high single-digit growth, and volumes were up across most countries in that. As PK mentioned earlier, the demand environment in North America became more variable and uncertain as the quarter progressed. North American volumes were down low single digits, which was lower than we anticipated heading into the third quarter, including in snacks and confectionery and home and personal care categories.

Michael: Meaning with the flexible segment on slide 10.

For the quarter were up 1% on last year.

Michael: Modest share gains in several important categories, including health care and pricing were partly offset by weaker consumer demand primarily in North America.

Michael: Overall demand remained solid through the quarter in Europe, Asia, and Latin America with each region, achieving low to mid single digit volume growth.

Michael: China and India continue to deliver mid single mid to high single digit growth and volumes were up across most countries in Latin America.

Michael: As I mentioned earlier, the demand environment in North America became more variable and uncertain as the quarter progressed, North American volumes were down low single digits, which was lower than we anticipated heading into the third quarter, including in snacks, and confectionery and Highland personal care categories.

Michael Casamento: From an end market perspective, we continue to see good growth in a number of our priority markets. Petcare, premium coffee and ready meals continue to grow strongly. And volumes in meat, dairy and liquids were uploaded mid-single digits, benefiting in part from modest share gains. Healthcare volumes continue to improve sequentially. Medical volumes were up in the high single digits, and as expected, demand for pharmaceutical packaging improved significantly, as de-stocking is now essentially behind us. Strengthening these categories more than offset volume declines in end markets such as snacks and confectionery and home and personal care, which will both down low single digits.

Michael: From an end market perspective, we continue to see good growth in a number of our priority markets.

Michael: Cash premium coffee and ready meals continued to grow strongly.

Michael: And volumes in meat dairy and liquids were uploaded mid single digits benefiting in part from modest share gains.

Michael: Health care volumes, continuing to improve sequentially medical volumes were up in the high single digits and as expected demand for pharmaceutical packaging improved significantly as Destocking is now essentially behind us.

Michael: Strength in these categories more than offset volume declines in end markets, such as snacks, and confectionery and home and personal care, which were both down low single digits.

Michael Casamento: Improved healthcare volumes supported a return to favourable price mix and overall net sales were up 1% on a comparable cost of currency. Adjusted EBIT of $358 million, grew 2% on a comparable currency basis, benefiting from the higher volumes and continued strong cost performance. And EBIT margin for the quarter remains strong at 13.7%, broadly in line with last year.

Michael: Improved health care volume supported our return to favorable price mix and overall net sales were up 1% on a comparable constant currency basis.

Michael: Adjusted EBIT of $358 million grew 2% on a comparable constant currency basis.

Michael: Benefiting from the higher volumes and continued strong cost performance and EBIT margin for the quarter remained strong at 38, 7% broadly in line with last year.

Michael Casamento: Turning to rigid packaging on slide 11. The Ridges business had a more challenging quarter as solar growth in Latin America and specialty containers was more than offset by weaker than anticipated consumer and customer demand in North America. Net sales were approximately 3% lower than last year, reflecting a 2% decline in overall volumes and an unfavourable impact from price mix of approximately 1%.

Michael: Turning to rigid packaging on slide 11.

Michael: The <unk> business had a more challenging quarter as solid growth in Latin America, and specialty containers was more than offset by weaker than anticipated consumer and customer demand in north American beverage.

Michael: Net sales of approximately 3% lower than last year, reflecting a 2% decline in overall volumes and an unfavorable impact from price mix of approximately 1%.

Michael Casamento: Entering the quarter, we anticipate a continued soft demand in North American beverages. However, consumer and customer demand across our key categories weakened further, resulting in a high single-digit volume decline. Latin American volumes were up mid-single digits and growth was strong in several countries and regions including Mexico and Central America. and volumes will hire in the specialty contagious business with growth in healthcare in mind.

Michael: Entering the quarter, we anticipate a continued soft demand in north American beverage, however, consumer and customer demand across our key categories weakened further resulting in a high single digit volume decline.

Michael: Latin American volumes were up mid single digits and growth was strong in several countries and raises including Mexico and Central America.

Michael: And volumes were higher in the specialty containers business with growth in health care and markets.

Michael Casamento: From an earnings perspective, adjusted EBIT of $55 million for the quarter no longer includes any contribution from the Berry Cap joint venture, which was divested in December 2024. FairyCat benefited rigid packaging segment earnings by approximately $5 million in the third quarter last year. On a comparable basis, EBIT was unfavourably impacted by lower volumes and price mix headwinds. This was partly offset by favourable cost performance, net of sequentially higher labour costs in the North American beverage... and it's typical for manning capacity to increase in the March quarter as the business approaches the seasonally strongest June quarter and this had an unfavourable impact on earnings for the quarter given the lower anticipated volume.

Michael: From an earnings perspective, adjusted EBIT of $55 million for the quarter no longer includes any contribution from the <unk> joint venture, which was divested in December 2024.

Michael: Aercap benefited rigid packaging segment earnings by approximately $5 million in the third quarter last year.

Michael: Now on a comparable basis EBIT was up 5 billion impacted by lower volumes and price mix headwinds.

Michael: This was partly offset by favorable cost performance net of sequentially higher labor costs in the North American beverage business.

Michael: It is typical for many capacity to increase in the March quarter as the business approaches a seasonally strongest June quarter, and this had an unfavorable impact on earnings for the quarter, given the lower anticipated volumes.

Michael Casamento: lower than anticipated Moving to cash flow on the balance sheet on slide 12 On a year-to-date basis, the business had a net cash outflow of $17 million, which is lower than we expected and compares with a cash inflow of $115 million last year. The key driver of this underperformance is higher inventories as a result of weaker sales volumes in the March quarter. In response, we have significantly increased our team's focus on working capital performance. and we are prioritising inventory reductions to a level that is more aligned with the expected demand. Leverage of 3.5 times was higher than we were anticipating due to stronger Euro spot rates towards the end of the quarter, which negatively impacted leverage by 0.1 times, as well as higher quarter end net debt.

Michael: Lower than anticipated volumes.

Michael: Moving to cash flow and the balance sheet on slide 12.

Michael: On a year to date basis, the business had a net cash outflow of $17 million, which is lower than we expected and compares with a cash inflow of $158 million last year.

Michael: The key drivers of this underperformance is higher inventories as a result of weaker sales volumes in the March quarter.

Michael: In response, we have significantly increased our team's focus on working capital performance.

Michael: And we are prioritizing inventory reductions to a level that is more aligned with the expected demand.

Michael: Leverage is three five times as high than we were anticipating due to stronger euro spot rates towards the end of the quarter.

Michael: Which negatively impacted levered five one times as well as higher quarter end net debt.

Michael Casamento: We expect to exit Fiscal 25 with leverage at approximately 3.4 times inclusive of acquisition impacts and we remain confident in bringing leverage down to approximately 3 times by the end of the year. This trajectory is aligned with expectations we set out when the merger was announced in November last year.

Michael: We expect to exit fiscal 'twenty five with leverage at approximately three four times inclusive of acquisition impacts and we remain confident in bringing leverage down to approximately three times by the end of fiscal 2026.

Michael: This trajectory is aligned with expectations, we set out when the merger was announced in November last year.

Michael Casamento: Our teams did an excellent job completing the required refinancing of Berry Global Debt prior to transactions closed and ahead of this current period of increased volatility in financial markets.

Michael: Our teams did an excellent job completing the required refinancing of Berry global debt prior to transaction close and.

Michael: And ahead of this current period of increased volatility in financial markets.

Michael Casamento: Finally, the company has returned $550 million in cash to shareholders through a growing dividend and the Board of Directors today declared the March quarter dividend of $12.75 per share. 2% higher than the same quarter last year.

Michael: Finally, the company has returned $550 million in cash to shareholders through a growing dividend and the board of directors today declared the March quarter dividend of $12 75 per share, which is 2% higher than the same quarter last year.

Michael Casamento: This brings me to the outlook on slide 13. As we look ahead into the fourth quarter, we are not anticipating any improvement in the overall demand environment and we believe this is a particularly prudent approach given current macroeconomic conditions and uncertainty around tariff impacts on consumers. As a result, we expect overall Q4 volume growth to remain muted and align with the March quarter. That said, with the successful early close of the merger, we have taken into account two months of BERI ownership and we continue to expect earnings for Fiscal 2025 within our original guidance range.

Michael: This brings me to the outlook on slide 13.

Michael: As we look ahead into the fourth quarter, we are not anticipating any improvement in the overall demand environment and we believe this is a particularly prudent approach given current macroeconomic conditions and uncertainty around tariff impacts on consumers and customers.

Michael: As a result, we expect overall Q4 volume growth to remain muted and align with the March quarter.

Michael: That said with the successful early close of the merger we have taken into account two months of Berry ownership and we continue to expect earnings for fiscal 2025 within our original guidance range.

Michael Casamento: Heading into the final quarter of the year, we are narrowing our outlook range for adjusted EPS to $0.72 to $0.74 per share on a reported basis. This takes into account two months of earnings from the Legacy Berry business, as well as additional shares issued upon close, which results in a net accretion of up to one cent per share. In terms of free cash flow, we expect a range of $900 to $1 billion for the year, which also includes a contribution from the Legacy Berry business.

Michael: Heading into the final quarter of the year, we are narrowing our outlook range for adjusted EPS to <unk> 72 to 74 cents per share on a reported basis.

Michael: This takes into account two months of earnings from the legacy Berry business as well as additional shares issued upon clients, which.

Michael: <unk> in the net accretion of up to <unk> <unk> per share.

Michael: In terms of free cash flow, we expect a range of $900 billion to $1 billion for the year, which also includes the contribution from the legacy Berry business.

Michael Casamento: Importantly, as PK mentioned earlier, before we even consider assumptions around organic performance for fiscal 2026, we have clear visibility to significant EPS growth of approximately 12% through delivery of $260 million of synergies alone, which is not dependent on improving macroeconomics, customer or consumer demand. We're excited about the opportunities ahead and confident in our ability to execute on the controllables and deliver significant value to shareholders in FY26 and beyond.

Michael: Importantly, as I mentioned earlier before we even consider assumptions around organic organic performance for fiscal 2026, we have clear visibility to significant EPS growth of approximately 12% through delivery of $260 million of synergies alone, which is not dependent on improving macroeconomics customer.

Michael: Consumer demand.

Michael: We're excited about the opportunities ahead and confident in our ability to execute on the controllable and deliver significant value to shareholders in FY <unk> and beyond.

Peter Konieczny: So with that, I'll hand back to you, Peter. Thanks MC. To sum up before taking questions, with an enhanced global footprint, expanded capabilities across consumer and healthcare packaging, and a clear roadmap to significant synergies over the next three years, Amcor is well positioned to deliver value to our stakeholders, despite an increasingly uncertain external environment.

Michael: So with that I'll hand back to you.

Michael: Thanks <unk>.

Michael: To sum up before taking questions with an enhanced global footprint expanded capabilities across consumer and health care packaging and a clear roadmap to significant synergies over the next three years and of course, well positioned to deliver value to our stakeholders. Despite an increasingly uncertain external environment.

Peter Konieczny: We are thrilled to welcome our new colleagues, customers and shareholders. This is day one of an even stronger future for Amcor, and the best is yet to come.

Michael: We are thrilled to welcome our new colleagues customers and shareholders.

Michael: This is day, one of an even stronger future for encore and the best is yet to come operator, we're now ready to take questions.

Operator: Operator, we're now ready to take questions. Thank you, sir and everyone. Once again, it is star one. If you have a question today, we do ask that you limit yourself to one question and then rejoin the queue.

Speaker Change: Thank you, Sir and everyone. Once again it is star one if you have a question today, we do ask that you limit yourself to one question and then rejoin the queue.

Ghansham Panjabi: Our first question today comes from Ghansham Panjabi Baird.

Ghansham Panjabi: Our first question today comes from Ghansham Panjabi Baird. Thank you, operator. Good day, everybody.

Speaker Change: Thank you operator, and good day, everybody congrats on the merger closed first off.

Ghansham Panjabi: Congrats on the merger close, first off. You know, I guess on the progressive deceleration in North American volumes that you called out, maybe you can just share with us what customers are sharing with you as. And the reason I ask is, you know, volumes were already at a low point to begin with, given previous destock. accountability issues and all that stuff. So what got worse, do you think, and related to that, was Barry's volume profile any different than...

Speaker Change: I guess on the progressive deceleration in North American volumes that you called out.

Maybe you can just share with us what customers are sharing with you as it relates to the sequential weakening and the reason I ask is you know volumes are already at a low point to begin with given previous destocking in consumer affordability issues and all that stuff.

Speaker Change: So what got worse do you think and related to that was berry's volume profile any different than what you reported thank you.

Peter Konieczny: Yeah, thanks, Ghansham. Really good questions. And let me start with what we're seeing in North America. First off, just to position that and put it into perspective, we went into the quarter with an expectation of low to mid-single-digit volume growth across the board. And we came out of the quarter seeing that we pretty much hit that expectation everywhere except in North America, so that was the holdback. In North America, we have seen real weakness on the consumer demand, particularly hitting our North American beverage business, which was down high single digits and therefore softer than what we had seen in the prior quarter, where it was down about mid-single digit.

Speaker Change: Yes, Thanks, Ghansham really good questions and let me start with what we're seeing in North America first off just to position that and put it into perspective.

Speaker Change: We went into the quarter with an expectation of low to mid single digit volume growth across the board and we came out of the quarter seeing that we pretty much hit that expectation everywhere, except in North America. So that was the hold back.

Speaker Change: In North America, we have seen real weakness on the consumer demand, particularly.

Speaker Change: Particularly hitting our north American beverage business, which was down high single digits, and therefore softer than what we had seen in the prior quarter, where it was down about mid single digit.

Peter Konieczny: And we've also seen some weakness in our North American flexibles business, which was driven by categories that can be more discretionary. For example, beverage and confectionery. On confectionery, also keep in mind that we're seeing a lot of inflation coming from the cocoa environment.

Speaker Change: And we've also seen some some weakness in our north American flexible business.

Speaker Change: Which was driven by the categories that can be more discretionary.

Speaker Change: For example, beverage and confectionery and confectionery also keep in mind that we are seeing a lot of inflation coming from the <unk> environment, while that was offset.

Peter Konieczny: While that was offset with some categories where we've seen growth in healthcare, meat, dairy, and liquids, that was essentially the overall story for North America, weaker than what we expected. I just want to make one more comment as you pointed that out. Volumes have been low and in the past waters certainly driven by destocking, which however reduced over time. The restocking is now behind us. What we're seeing now is no longer an impact from destocking. What we're seeing now is really soft consumer demand, which I'd say really goes back to sticky inflation.

Speaker Change: With them some categories, where we've seen growth in health care meat dairy and liquids.

Speaker Change: That was essentially the overall story for North America, and weaker than what we expected.

Speaker Change: Just wanted to make one more comment as you pointed that out volumes have been low and in the past waters, certainly driven by Destocking, which however.

Speaker Change: Reduced over over time.

Speaker Change: Destocking is now behind us what we're seeing now is no longer an impact from Destocking. What we're seeing now is really soft consumer demand, which I would say really goes back to sticky inflation, we called that out in earlier calls and then in the third quarter or the first quarter of this calendar year.

Peter Konieczny: We called out in earlier calls and then in the third quarter or the first quarter of this calendar year, certainly the whole uncertainty around the tariff situation has had an impact.

Speaker Change: Certainly the whole uncertainty around the tariff situation has had an impact.

Anthony Pettinari: Our next question is Anthony Pettinari, Citi. Good afternoon. You pointed to the 20% synergy-driven EPS growth assumption for fiscal 26. And I think you talked about that, it's before taking into account any organic performance in the underlying business.

Speaker Change: Our next question is Anthony Pettinari Citi.

Anthony Pettinari: Hi, good afternoon.

Speaker Change: You too.

Anthony Pettinari: Ed.

Speaker Change: Synergy driven EPS growth assumption for fiscal 'twenty, six and I think you talked about that.

Anthony Pettinari: Take.

Speaker Change: It's before taking into account in your organic performance in the underlying business I guess a couple of questions. Eric is there an underlying assumption that organic growth is going to be positive in fiscal 'twenty stakes or you're not really making any assumptions at all.

Anthony Pettinari: I guess a couple of questions there, is there an underlying assumption that organic growth is gonna be positive in fiscal 26, or are you not really making any assumptions at all? And maybe to kind of ask the question another way, if we are in a much more challenging macro environment in fiscal 26, can you talk about your ability or your confidence in achieving the synergies in a tougher macro environment?

Speaker Change: And maybe to kind of ask the question. Another way if we are in a much more challenging macro environment.

Speaker Change: In fiscal 'twenty six can you talk about your ability.

Speaker Change: Your confidence in achieving the synergies.

Speaker Change: In a tougher macro environment.

Speaker Change: Okay, Anthony up I may want to start here and then I'm sure that Michael is going to built.

Speaker Change: Before I get back to your question, let me just finish off.

Speaker Change: The other question from Ghansham that I didn't answer and he actually asked the question about the Berry volume performance.

Speaker Change: Look it's a little early for me to be across all of the details of the volume performance in the last quarter, because we just closed the acquisition right now.

Speaker Change: But from a higher level, we're very excited about better growth performance on the Berry side and I think the answer lies in mix with regards to customer exposure and category exposure keep in mind that North American beverage.

Speaker Change: Is it not aid category that Berry operates and so it's mix Ghansham and I just wanted to make sure that I cover that off.

Speaker Change: Now Anthony answer to your question.

Speaker Change: Ed.

Speaker Change: Your question was sort of volume guidance for 'twenty, six and what we're assuming for 24 and what we sort of believe the macroeconomic environment is like let me let me start there.

Speaker Change: We already in our prepared comments, we said that at.

Speaker Change: At this point in time, we're really just guiding towards at the end of this fiscal year, which includes Q4 and the way that we look at this is that we would never make drastically different assumptions in terms of the macroeconomic environments on a very short period of time, so going from Q3 to Q4, you would all.

Speaker Change: Please see us pretty much roll forward.

Speaker Change: Margaret economic environment that we operate in so we've seen a flat volume growth overall.

Speaker Change: On the <unk> side, we've seen a bit of growth on the on the Berry side, we're going to get two months of contribution from Barry in the fourth quarter.

Speaker Change: That will get you to a pretty much flat to slightly up volume.

Speaker Change: Volume performance expectation for the fourth quarter.

Speaker Change: That's the way, how we triangulate ourselves into the fourth quarter in terms of volumes now with regards to 'twenty six.

Speaker Change: Yes.

Speaker Change: We're not going to guide today for 'twenty six we typically do that in August.

Speaker Change: But what we're pointing to here is that we have a lot of benefits from the combination with Barry.

Speaker Change: And we have an ability because we have been able to close the acquisition in record time.

Speaker Change: To get our hands around and our arms around the synergy opportunities two months earlier than what we thought.

Speaker Change: That will set us up really for a great opportunity to get out of the blocks for 26 really fast and we have a high level of confidence in the in the ability to generate the synergies in year, one which is fiscal 'twenty six.

Speaker Change: And which amounts to $260 million.

Speaker Change: And it just if you do the math.

Speaker Change: It creates an EPS uplift of 12%.

Michael: I'll stop there and see if Michael wants to add anything no I think Kevin PK we.

Speaker Change: We feel.

Speaker Change: Really confident around the ability to deliver those synergies and it's not contingent on the macroeconomic environment or the consumer or customer demand.

Speaker Change: And in fact for AMCOL, we see that as a real advantage because we've got self help in the form of those synergies.

Speaker Change: Out of the guidance to speak I mentioned, we closed earlier that we've got good line of sight to teams.

Speaker Change: I think working on the synergy delivery.

Speaker Change: <unk> functions that we've got for functional team set up across SG&A and procurement operations and growth.

Speaker Change: Our dedicated teams working on that and we're going to hit the ground running and MSI from July one, we're really confident around the ability to deliver there.

Daniel Kang: Our next question is from Daniel Kang, CLSA. Good morning, PK, good morning, Mike. Just an extension on the Synergy's commentary. So $260 million in FY26. Wondering if you can categorize the breakdown of that, particularly with regards to procurement. I'm just interested in how the preliminary discussions... have gone with key raw material suppliers.

Speaker Change: Our next question is from Daniel Kang CLSA.

Daniel Kang: Good morning Peak, Hey, good morning, Mike.

Speaker Change: Just.

Speaker Change: An extension on the synergies commentary.

Speaker Change: 260 million in FY 'twenty six just wondering if you can categorize the breakdown of that particularly with regards to procurement.

Speaker Change: I'm just interested in how deep preliminary discussions.

Speaker Change: Have gone with key raw material supplies.

Michael Casamento: any color you can shit on that I'll start on that one, Daniel. Look, I mean, the 260 million synergies, you know, we broke out, as we said, we've broken out the 650 over three years, you know, a portion from procurement, SGA, operations and growth, you know, in 26, I mean, clearly, out of the gates, you focus and ability to deliver is, you know, first and foremost comes from the G&A side. So that's typically the first piece you get onto. Procurement will deliver as well, and that will build through the first 12 months and into the second year.

Speaker Change: Any color you can shed on that would be much appreciated. Thank you.

Speaker Change: So I'll start on that one look at the $260 million synergies.

Speaker Change: We broke out as I said, we've broken out the 650 over three years.

Speaker Change: A portion from procurement SG&A and operations and growth.

Speaker Change: In 2006, I mean, clearly the out of the gate.

Speaker Change: Focus and.

Speaker Change: The ability to deliver is is.

Speaker Change: First and foremost counts from the G&A side, so thats typically the <unk>.

Speaker Change: First the first place you get onto procurement will deliver as well and that will build through the first 12 months and into the second year.

Michael Casamento: And then, you know, the operations side typically takes a little longer because that's footprint optimization. That said, you know, we've already identified some areas where we've got overlaps. So again, teams have been working on that and we'll hit the ground running, but they tend to take a little bit more just because you've got to move network around, etc. And then look on the growth synergies. Again, that's something that typically takes a little longer, but again, a dedicated team on that. So we haven't called out exactly, you know, the mix of the synergy, Daniel, but that kind of gives you a flavour that, you know, SG&A typically comes first, procurement comes through and will build, and then you get into the operations and the growth.

Speaker Change: And then on the operation side.

Speaker Change: Typically takes a little longer because thats footprint optimization that said, we've already identified some areas, where we've got overlap. So again <unk> been working on that and we'll hit the ground running the die tend to take a little bit more just because you've got a new network around et cetera, and then look on the growth synergies again, thats something that typically takes a little longer but again.

Speaker Change: And a dedicated team on that side.

Speaker Change: We haven't called out exactly the mix of the synergy Daniel but that kind of gives you a flavor of that SG&A typically comes first procurement costs through and we will build and then you get into the operations and the growth.

Peter Konieczny: Yeah, and if I add to that, Daniel, I mean, we didn't provide and we're not intending to provide a detailed breakdown of the 260 in the first year, but Michael gave you some quality here. It's no question that procurement will be a major contributor. You asked how things are going so far in the conversations. Look, we may have had some touch points with suppliers, but the level of engagement around that question has been really on a high level. And that is understandable because we hadn't even closed the acquisition yet. And the suppliers are not really interested to engage in that conversation unless there's something real on the table.

Speaker Change: Yeah, and if I had if I add to that Daniel I mean, we didn't provide them, we're not intending to provide a detailed breakdown of the two <unk>. The first year about micro gave you. Some some quality here no question about that.

Speaker Change: <unk>.

Speaker Change: Procurement will be a major contributor you asked how things are going so far in the conversations.

Speaker Change: Look we may have had some touch points with with suppliers, but the level of engagement around that question has been has been really on a high level and that is understandable because we haven't even closed the acquisition yet.

Speaker Change: And the suppliers are not are not really interested to engage in that conversation unless there is something real on the table so well.

Peter Konieczny: So we'll go into that, I think, a lot more from here on. That said, the teams have been doing all the work that you would expect them to do. We have clean teams set up that actually have been looking at details and all the work has really resulted in a point where we say we're pretty confident with the ability to deliver.

Speaker Change: We'll go into that I think a lot more from hereon.

Speaker Change: That said the teams have been doing all the work that you would expect them to do we have clean teams set up that actually have been looking at details.

Speaker Change: All of the work has really resulted in the point, where we say, we're pretty confident with the ability to deliver.

Matt Roberts: The next question comes from Matt Roberts, Raymond James. Hey, good afternoon, good morning, everyone. Thanks for the time and congratulations on the completion of the merger. PK, maybe on the portfolio printing that you did discuss. Given that there's weakness in industrial end markets or just broader uncertainty and demand in general in the M&A environment. How has your idea of timing around that pruning changed from when the merger was announced to now, or when can we expect an incremental color on that portfolio review? Thanks for taking the question. No, that's, thanks, Matt.

Matt Roberts: The next question comes from Matt Roberts Raymond James.

Matt Roberts: Hey, good afternoon, good morning, everyone.

Matt Roberts: Thanks for the time and congratulations on the completion of the merger.

Matt Roberts: And maybe on.

Matt Roberts: The portfolio pruning that you did discuss.

Matt Roberts: Given that there is weakness in industrial end markets or just broader uncertainty in demand in general in the M&A environment.

Matt Roberts: How is your idea of timing around that earning change from when the merger was announced to now or when can we expect the incremental color on that portfolio review.

Speaker Change: Thanks for taking the question.

Matt Roberts: No.

Peter Konieczny: I was, you know, for a couple of calls, I've been very explicit that a little more dynamic portfolio management is an opportunity for the business, even more so now that we have combined ourselves with BERI. I have mentioned before that we have kicked that analysis off. And what we're doing there is just simply taking all of our activities and we're assessing that against certain criteria. And we've made some really good progress around it. Now, the first thing that I will say is we will have to take a look at that assessment in the context of the new combined entity that we're looking at.

Matt Roberts: Thanks, Matt.

Matt Roberts: I was.

Matt Roberts: For a couple of calls have been very explicit.

Matt Roberts: A little more dynamic portfolio management is an opportunity for the business even more so now that we have.

Matt Roberts: Combined ourselves with Berry.

Matt Roberts: I have mentioned before that we have kick that analysis off and what we're doing there is just simply taking all of our activities and we're assessing that against certain criteria and we've made some some really good progress around it now.

Matt Roberts: Now.

Matt Roberts: The first thing that I will say is we will have to take.

Matt Roberts: Take a look at that assessment in the context of the new combined entity that we're looking at we have a significant synergy opportunity that we will capture we have more capabilities at our hence we can learn from each other in terms of best practices and that may have an impact on our assessment of the different a different businesses.

Peter Konieczny: We have a significant synergy opportunity that we will capture. We have more capabilities at our hands. We can learn from each other in terms of best practices, and that may have an impact on our assessment of the different businesses and their ability to compete and be successful in, you know, the areas where they operate. That's the one thing. The second thing is, you know, you mentioned also the current environment that we're operating in. Now, the environment will not stop us on the initiative per se, so we're going to move on and we're going to get the assessment done.

Matt Roberts: And their ability to compete and be successful in the.

Matt Roberts: The areas where they operate.

Matt Roberts: That's the one thing the second thing is <unk>.

Matt Roberts: You mentioned also the.

Matt Roberts: Occurred environment that we're operating in now the environment will not stop us on beef on the initiative per se. So we're going to move on that we're going to get the assessment done.

Peter Konieczny: And if really what's behind your question is a question on timing, when can we execute against that? That's a really hard one to answer, I would say, at this point. Things are changing by the day, and the only thing that I can really point to is that we'll continue to be very disciplined around anything that we do on that end. That's something that I can promise.

Matt Roberts: And if really what's behind your question is a question on timing of when can we execute against that that's a really hard one to answer I would say at this point.

Matt Roberts: Things are changing by the day.

Matt Roberts: And the only thing that I can really point to is that we're continue to be that we will very disciplined around around anything that we do on that and that's something that I can promise.

Jakob Cakarnis: We'll take the next question today from Jakob Cakarnis, Jardin, Australia. Jacob, your line is open. Please check your mute button. Sorry, excuse me, guys. Hi, Peter. Hi, Michael.

Speaker Change: We'll take the next question today from Jacob kick harness Jarden, Australia.

Speaker Change: Okay.

Speaker Change: Jacob Your line is open please check your mute button.

Speaker Change: Sorry, excuse me guys, Hi, Peter Hi, Michael.

Jakob Cakarnis: I was just going to focus on the procurement synergies, if I could, please. They're 60% of the overall cost synergies that you guys are targeting. Michael and Peter, if I understood correctly, you were saying that that relied on a combined entity to have those discussions with the suppliers.

Speaker Change: I was just going to focus on the procurement synergies if I could please stay at 60% of the overall cost synergies that you guys are targeting.

Speaker Change: Michael and Peter if I understood correctly, you were saying that that relied on a combined entity to have those discussions with the suppliers. So I guess, if you could step us through 26 is the priority harmonization of those supplier terms and then as we turn them on to 27 and 28 to hit those Aps accretion.

Jakob Cakarnis: So I guess if you could step us through for 26, is the priority a harmonisation of those supplier terms? And then as we turn our minds to 27 and 28, to hit those EPS accretion targets, is it more about drilling down into the terms of that procurement and potentially looking for some pricing benefits given your new scale, please?

Speaker Change: <unk> targets is it more about drilling down into the terms of that procurement and potentially looking for some <unk>.

Speaker Change: Pricing benefits given your new scale place.

Michael Casamento: Yeah, Jakob, I'll have a go at this. I mean, the way it works, having been through these acquisitions at large scales a couple of times with Amcor, you know, there's a very general principle, which is get to the synergies fast or never. So I'm not sure that you pace yourself in the conversations with suppliers when you particularly look at procurement. You know, you need to wait until you can represent the combined spend. That's what I meant in my earlier answer. You know, as long as the acquisition is not closed, you don't really have a leg to stand on when you enter into the conversation.

Speaker Change: Yes, Jacob I'll have I'll have a go at this I mean, the way it works, having having been through these acquisitions with large scales a couple of times with encore.

Speaker Change: There is a very general principle, which is get to the synergies fast or never.

Speaker Change: So I'm not sure that you pace yourself in the conversations with suppliers when you, particularly look at procurement.

Speaker Change: You need to wait until you can represent the combined spend that's what I meant in my earlier answer as long as the acquisition has not closed we don't really have elected standoff. When you when you enter into the conversation.

Peter Konieczny: Now that that's the case, we can enter into the conversations and have the discussions with our suppliers. And that is what's gonna happen. And as we start those discussions, you know, it will be around across everything. It will be across price, it will be across terms, it will be across a number of different things. And then we'll try to make progress as quickly as possible against that.

Speaker Change: Now that that's the case, we can enter into the conversation some have.

Speaker Change: Have the discussions with our suppliers.

Speaker Change: And.

Speaker Change: That is what's going to happen and as we've as we start those discussions.

It will be around across everything will be across them.

Speaker Change: We'll be cross a price that will be across terms that will be across a.

Speaker Change: A number of different things.

Speaker Change: Then we will try to make progress as quickly as possible against that I think thats the way.

Michael Casamento: I think that's the way I would wanna answer that question. And I think if I just add there, PK, to put it in perspective, if you remember, again, the total addressable spend for the combined entity is around 13 billion of which, you know, 10 billion is raw materials. You know, so when you put that into perspective, it's kind of a two and a half to 3% impact that we're expecting from. from the procurement area for this energy. So, you know, that's 1% a year. It's, you know, something that's absolutely achievable.

I would want to answer that question and I think if I just just to add if he had to put it in perspective.

If you remember again, the total addressable spend for the combined entity is around 8 billion of which $10 billion is raw materials.

Speaker Change: When you put that into perspective, it's kind of a two 5% to 3%.

Speaker Change: The impact that we're expecting from.

Speaker Change: From the procurement.

Speaker Change: Area for the synergy so that's 1% a year.

Speaker Change: Something thats, absolutely achievable from where we sit.

George Staphos: George Staphos from Bank of America is up next. Hi, everyone. Good morning, good afternoon. Thanks for the details. How are you? So, my question is going to focus on growth, kind of tying together a lot of what's, you know, already been sort of talked about. So, can you, PK, tell us what in particular in the consumer environment, and certainly, you know, there's been the volatility with tariffs and so on, but how has that affected your customers' outlook on demand when, in reality, they're producing staples, you know, confectionery items, protein, coffee? How is all the volatility in things that are much more discretionary, kind of filtering back into what your customers are thinking about in terms of their outlook for growth.

Speaker Change: George Staphos from Bank of America is up next.

Speaker Change: Hi, everyone.

Speaker Change: Good morning, good afternoon, thanks for the detail how are you.

Speaker Change: No.

Speaker Change: My question is going to focus on growth kind of tying together a lot of whats already been talked about so can.

Speaker Change: Can you PK tell us what in particular.

Speaker Change: In the consumer environment and certainly.

Speaker Change: And the volatility with tariffs and so on but.

Speaker Change: How has that affected your.

Speaker Change: <unk> customers outlook on demand when in reality.

Speaker Change: They are producing staples.

Speaker Change: <unk>.

Speaker Change: Confectionery items protein coffee, how is all of the volatility.

Speaker Change: And things that are much more discretionary kind of filtering back into what your customers are thinking about in terms of their outlook for growth and you need to be I am sure thinking about that because the growth or lack of it is an important variable in terms of.

George Staphos: And you need to be, I'm sure, thinking about that because the growth or lack of it is an important variable in terms of your evaluation over time. Relatedly to that, what your customers are saying, with the growth outlook decelerating I recognize you're only a few days into owning Barrett. What would you say the probabilities are and what levers will you use to perhaps see whether those synergy targets are at least achievable if not conservative at this juncture? You already mentioned that as a percentage of The overall spend, the procurement spend, the revenue of the company, which is over $20 billion, is a relatively small percentages.

Speaker Change: Your valuation over time relatedly to that what your customers are saying with the growth outlook decelerating.

Speaker Change: I recognize you're only a few days into owning Barry.

Speaker Change: What would you say the probabilities are and what levers will you use perhaps see.

Speaker Change: Whether those synergy targets.

Speaker Change: Least achievable if not conservative at this juncture.

Speaker Change: Already mentioned that as a percentage of net.

Speaker Change: The overall spend the procurement spend the revenue of the company, which is over $20 billion is a relatively <unk>.

George Staphos: So how should we think about how you'll be able to leverage, perhaps grow, that synergy target, especially with volume growth being relatively flaccid at the moment. Thank you and good luck in the quarter.

Speaker Change: Small percentages, so how should we think about how you'll be able to leverage perhaps grow that synergy target, especially with volume growth being relatively flattish at the moment. Thank you and good luck in the quarter.

Peter Konieczny: Thanks, George. There was a lot in that question.

Speaker Change: Thanks, George there was a lot in that question.

Peter Konieczny: Let me try to bucket it up in two parts and I'll invite Michael to come in to share his views too. The first one was, if I understood it correctly, a question of how our customers are performing in this environment and how the uncertainty sort of drives their growth performance. And that obviously is for us a major factor because our customers demand drive essentially our ability to sell. So we're trying to be close to our customers in order to understand that. I think if I take a step back, the uncertainty that we have particularly seen in the last quarter in North America is really, has really driven weakening consumer demand.

Speaker Change: Let me, let me try to bucket it up in two parts.

Speaker Change: Michael to come in to share his views.

Speaker Change: The first one was if I understood you correctly a question of.

Speaker Change: How our customers are performing in this environment and how the uncertainty sort of drives their growth performance.

Speaker Change: And that obviously is for us a major factor because our customers demand drive essentially our ability to sell.

Speaker Change: So rich white will be close to our customers in order to understand that.

Speaker Change: If I take a step back.

Speaker Change: The uncertainty that we have particularly seen in the last quarter in North America.

Speaker Change: Is really.

Speaker Change: It's really driven weakening consumer demand.

Peter Konieczny: That's sort of the source of the issue. And when you go and try to understand the consumer, you will find the consumer change their behaviors in terms of seeking value, in terms of thinking very carefully about where to spend money. And what you typically see is that the consumers buy less where they have an opportunity to do so. And where you come to the essentials, they would buy different. They buy different in terms of trading down, buying bulk, going to different channels. And all of that is what we're seeing and what the customers are seeing.

Speaker Change: Sort of the source of the issue and.

Speaker Change: And when you go and try to understand the consumer and you will find the consumer changed their behaviors in terms of seeking value in terms of thinking very carefully about where to spend money and what you typically see is that the consumers buy list, where they have an opportunity to do so and where you come to the.

Speaker Change: <unk> they would buy different they buy different in terms of.

Speaker Change: Trading down buying bulk going to different channels.

Speaker Change: And Thats all about this is what we're seeing and what the customers are seeing and from what I've seen and what I've heard from the customers that is very much aligned with what our customers are actually seeing.

Peter Konieczny: And, you know, from what I've seen and what I've heard from the customers, that is very much aligned with what our customers are actually seeing. Now, that's the one thing that drives the customers. And, you know, everybody has uncertainty right now in forecasting demand scenarios. And there is a lot of volatility out there, which makes it really hard. And, you know, in some cases, we get volume forecasts from our customers, which do not materialize. And we need to deal with that as part of the value chain, like everybody else. But that's the situation that we're seeing.

Speaker Change: No.

Speaker Change: That's the one thing that drives the customers end.

Speaker Change: Everybody has uncertainty right now in forecasting demand scenarios.

Speaker Change: And there is a lot of volatility out there, which makes it really hard.

Speaker Change: In some cases, we get volume forecast from our customers, which do not materialize.

Speaker Change: And we need to deal with that as part of the value chain like everybody else does but thats, but thats. The situation that we're seeing that's bucket number one let me stop there and see if I ask Michel if he wants to add anything to that.

Michael Casamento: That's bucket number one. Let me stop there and see if I ask Michael if he wants to add anything to that. No? Okay.

Peter Konieczny: Then I get to the bucket number two, which was more about the question of in this environment, how do we think about synergies and synergy outperformance particularly? Look, we have been very transparent around the amount of synergies that we expect, which is the $650 million over a period of three years. We have made some comments around how we face that across the years, and we are now currently working on translating that. We have good pipelines in place for every single bucket of those synergies to go after them. I would say, in some cases, the pipelines would suggest that we have more opportunities than what we were thinking about, but they would have to translate in the current environment, so I'm not comfortable of driving any different expectations than what we have announced.

Speaker Change: Okay.

Speaker Change: Then I get to the bucket number two which was more about the question of in this environment, how do we think about synergies and synergy outperformance, particularly.

Speaker Change: Look we have.

Speaker Change: <unk>.

Speaker Change: Been very transparent around the amount of synergies that we expect which is the $650 million over a period of three years.

Speaker Change: We have.

Speaker Change: <unk>.

Speaker Change: Made some comments around how we face that.

Speaker Change: Across the years and we are now currently working on translating that we have good pipelines in place for every single bucket of those synergies to go after them.

Speaker Change: I would say in some cases the pipelines would suggest that we have more opportunities than what we were thinking about but.

Speaker Change: They would have to translate in the current environment. So I am not comfortable of of <unk>.

Speaker Change: Driving any different expectations than what we have announced.

Peter Konieczny: And I would also not lock myself into a breakdown by bucket for those synergies, but overall, again, we sit here today and we're pretty confident that we can get that done. The final point that I will make is, let's not forget, this is a very volatile situation out there. We have created a situation in North America in a very short period of time by driving uncertainty around the whole tariff situation. And again, even that situation is very volatile. So we may sit here again in a couple of quarters and look at a different situation that presents itself to ourselves and that will...

Speaker Change: And I would also not lock myself into a breakdown by buckets for those synergies, but overall.

Speaker Change: When we sit here today, and we're pretty confident that we can get that done the final. The final point that I will make us let's not forget this is a very volatile situation out there.

Speaker Change: We have created a situation in North America in a very short period of time.

Speaker Change: By driving uncertainty around the whole tariff situation.

And again, even that situation is very volatile so.

Speaker Change: We may sit here again in a couple of quarters.

Speaker Change: Look at a different situation.

Speaker Change: Thats presents itself for ourselves.

Speaker Change: And that will.

Peter Konieczny: you know, drive. different view in terms of the operating environment, but all of that will not change our expectations on the synergies. It's been a bit of a long-winded answer here, George. I'm sorry for that, but I hope I sort of addressed the underlying question that you had on your mind.

Speaker Change: Drive.

Speaker Change: Different view in terms of the operating environment.

All of that will not change our expectations on the synergies it's been a bit of a long winded answer here George I'm, sorry for that but I hope I sort of addressed.

George Staphos: The underlying question that you had on your mind.

Brook Campbell: The next question will come from Brook Campbell Crawford from Barron Joey. Yeah, thanks for taking my question, just one on the North America beverage... call that high single digit decline in volume, I think it was. in the quarter on a year-over-year basis and I guess just through that, it seemed. look like even for North America beverage will be down sort of 20% or so year over year. So could you maybe just provide a comment if that's a sensible assumption?

Speaker Change: The next question will come from Brook Campbell Crawford from bearing jelly.

Speaker Change: Yes, thanks for taking my questions.

Speaker Change: Just wanted to add the North America beverage business.

Speaker Change: Call that high single digit decline in volume I think it was.

Speaker Change: In the quarter on a year over year basis.

Speaker Change: Okay got it Steve.

Speaker Change: It looks like EBIT for <unk>.

Speaker Change: North America fabrics will be down 20% year over year. So could you maybe just provide.

Speaker Change: All lines have a sensible assumption.

Brook Campbell: You know, given that, is there any sort of structural issues going on in that business that need to be discussed at this point?

Speaker Change: Given that is there any sort of structural issues going on in that business that needs to be discussed.

Speaker Change: At this point thanks.

Peter Konieczny: Let me start with that, Brooks, and try to be more pointed on that question. I'll start by just contextualizing the volume performance that we've seen, high single digits down. I want to make clear that this is pretty much exactly aligned with what we see in the market. So the point of what I just said is it's not an issue of share or share loss. When you look at SCANA data in North America, you take a look at the categories or the subcategories that we participate in, and you keep in mind our customer exposure, you can pretty much triangulate yourself into the performance of volumes that we've seen in the quarter.

Speaker Change: So let me start with that Brooks and.

Speaker Change: Try to be more pointed on that question.

Speaker Change: I'll start by just contextualize the volume performance that we've seen high single digits down.

Speaker Change: I'd want to make clear that.

Speaker Change: This is pretty much exactly aligned with what we see in the markets. So the point of what I. Just said is it's not an issue of share or share loss.

Speaker Change: When you look at scanner data in North America, and you take a look at the categories or the subcategories that we participate in and you keep in mind our customer exposure.

Speaker Change: Can pretty much triangulate yourself into into the performance of volumes that we've seen in the quarter. So that's the first thing. The second thing is I'll, let Michael comment on how that translates into into the bottom line. You also asked a question of is there is there a structural element to that business.

Michael Casamento: So that's the first thing.

Peter Konieczny: The second thing is I'll let Michael comment on how that translates into the bottom line. You also asked a question of, is there a structural element to that business? We've owned this business for a long period of time, and we have seen a number of cycles in the past. This is a long cycle and an extended cycle, but a lot of things are happening around us, and they have different drivers.

Speaker Change: We have had this we've owned this business for a long period of time and we have seen a number of cycles in the past. This was a this is a long cycle and an extended cycle, but a lot of things are sort of happening around us and they have different drivers.

Peter Konieczny: At this point in time, we are still not ready to call it structural, and it doesn't take much volumes to come back and to improve the overall performance of the business.

Speaker Change: Sure.

Speaker Change: At this point in time are still not ready to call it structural.

<unk>.

Speaker Change: It doesn't take much volumes to come back and to improve the overall performance of the business.

Michael Casamento: Michael, if you want to talk to the presentation. Just to follow up on that, in terms of the EBIT performance, Brooke, the first thing that we have to take into account is that the prior year, EBIT includes the BerryCat business, which we disposed in December 2024. So that was about a $5 million contribution to EBIT in the prior year. So obviously, we don't have that in the on a comparable constant currency basis. That was really driven by the volume decline, particularly in North American beverage. In addition to that, we did build some labour into the business in quarter three, and we would typically do that, build some manning up ahead of the busy season in the June quarter to be able to manage the increased demand there.

Michael: Michael If you want to talk to you guys.

Speaker Change: Just to follow up and I think in terms of the EBIT performance Brooke.

Speaker Change: First thing that we have to take into account is that the prior year EBIT includes the <unk> business, which we disclosed in December 2024, So that was about $5 million contribution to EBIT in the prior year. So obviously, we don't have that in the current year.

Speaker Change: And then the overall performance was down about 12% on a comparable constant currency basis.

Speaker Change: And that was really driven by the volume declines, particularly in North American beverage.

Speaker Change: And in addition to that we have we did build some some labor.

Speaker Change: Into the business in quarter, three and we would typically do that build to many update ahead of the bdcs and in the June quarter to be.

Speaker Change: Ill, let us to manage the increased demand there.

Michael Casamento: But obviously, we've put that in place, but with the softer than expected volume performance in the quarter, that did have an impact on the cost base of the business, which impacted the bottom line in the quarter. So that's really what drove the 12% decline year.

Speaker Change: But obviously with the we put that in place that with the softer than expected volume performance in the quarter that did have an impact on the cost the cost base of the business, which impacted the bottom line in the quarter.

Speaker Change: So thats really what drove that 12% decline year on year.

Michael Casamento: We would expect some improvement on that.

Speaker Change: We would expect some improvement on that as we head into Q4.

John Purtell: Up next we'll take a question from John Purtell in the query group.

Speaker Change: Up next we'll take a question from John Purtell Macquarie Group.

Speaker Change: Yes.

Peter Konieczny: Oh, G'day Peter and Michael, hope you're well. Just a comment on, or a question around sort of volumes within the quarter, perhaps what you saw within the quarter and any comment you can make on April, which sort of goes to a broader question about your expectations for Q4 and some of the moving parts within that. Yeah, John, I sort of mentioned that before, but let me summarize it again. I guess the new part is that we have seen throughout the quarter the consumer demand weakening. I think that's a fair comment.

Speaker Change: Can I patron Michael <unk>.

Speaker Change: Yes.

Speaker Change: Just to comment on.

Speaker Change: A question around sort of.

Speaker Change: Volumes within the quarter.

Speaker Change: Perhaps what you saw within within the quarter and any comment you can make on April which sort of goes to a broader question about your expectations for Q4, and some of the moving parts within that.

Speaker Change: Yes, John I sort of.

Speaker Change: I've mentioned that before but let me summarize it again.

Speaker Change: Sure.

Speaker Change: Yes, the new par dose that we have seen throughout the quarter. The consumer demand weakening I think thats, a fair comment I'm not a big fan of.

Peter Konieczny: I'm not a big fan of discussing volume performance month by month. And I said that before. I don't think that it helps a lot. But in this particular case, I think there was an element of weakening demand through the quarter. I will say again, you know, a very much different portfolio between the different regions, you know, pretty solid demand in terms of our expectations of low to mid single digits everywhere else. But in North America, we've seen the weakening. Now, as I said before, the way how we go into the fourth quarter is very much aligned with what we've seen in the third in with with a bit of growth in the in the third quarter, which we were happy to see.

Speaker Change: Discussing volume performance month by month, and I've said that before I don't think that it helps a lot but in this particular case I think there is there was an element of weakening demand through the quarter I will say again.

Speaker Change: A very much different portfolio between the different regions.

Speaker Change: A pretty solid demand in terms of our expectations of low to mid single digits every wells spud in North America.

Speaker Change: We've seen the weakening.

Speaker Change: Now as I said before the way how we go into the fourth quarter is very much aligned with what we've seen in the third quarter risk.

Speaker Change: We are expecting from from an upper side overall flat volumes.

Speaker Change: <unk>.

Speaker Change: Barry came.

Speaker Change: In with a bit of growth in the in the third quarter, which we were happy to see.

Peter Konieczny: We'll see two months of contribution of Berry in the fourth quarter, assuming on the same principle, assuming that to sort of continue, you would get the fourth quarter for something to something that is that is flat to slightly growing.

Speaker Change: We will see two months of contribution of <unk> in the fourth quarter, assuming no on the same principle is assuming that to sort of continue you would get the fourth quarter for something to something that is flat to slightly growing.

Mike Roxland: The next question today is Mike Roxland, Truist Security. Yeah, thank you, PK, Michael, Tracey, David, for taking my questions, and congrats on closing the deal and on all the progress. Thanks, Mike.

Speaker Change: The next question today is Mike <unk> Securities.

Speaker Change: Yes. Thank you a PK Michael <unk> ACD with taking my question and congrats on closing the deal.

Speaker Change: On the progress.

Speaker Change: Thanks, Mike.

Mike Roxland: I wanted to focus on synergies, not to be a dead horse here, but I wanted to just follow up with you regarding procurement savings of $325 million. Now, both you and Barry are some of the largest purchasers globally of resins. I don't believe there's a direct overlap maybe in some of the grades. I think you guys may be more heavier to PET. Barry may be heavier to polypropylene. There is some overlap on polyethylene. So you don't have direct overlap in some things. In addition, the resin producers themselves are under pressure, and I think they'd be looking to offer notable price concessions given the financial difficulties they're encountering.

Speaker Change: Just I wanted to focus on synergies.

Speaker Change: Could be a dead horse here, but.

Speaker Change: I wanted to just follow up with you regarding.

Speaker Change: Procurement savings of $325 million now both you and Barry.

Speaker Change: Some of the largest purchase shares globally of resins.

Speaker Change: I don't believe Theres, a direct overlap maybe in some of the grades I think you guys, maybe more heavier to PDP barrier or it may be heavier to the polypropylene. There is some overlap on polyethylene.

Speaker Change: So youll have the spot rate normal ops and some things. In addition to the resin producers themselves are under pressure and I think they'd be some of them are looking to offer global price concessions given the financial difficulties. There encountering so would just love to get your thoughts about how you intend to approach the procurement savings, particularly in a more challenging.

Mike Roxland: So we'd just love to get your thoughts about how you intend to approach the procurement savings, particularly in a more challenging environment on resin.

Speaker Change: Environment on resin and then secondly can you remind us about the bedding products. Since you undertook regarding the cost synergies. How did you determine that these figures are the correct figures in terms of synergies themselves. Thank you.

Mike Roxland: And then secondly, can you remind us about the vetting process you undertook regarding the cost synergies? How did you determine that these figures were the correct figures in terms of synergies themselves? Thank you.

Peter Konieczny: Yeah, Mike, I'll start out, and then maybe Michael wants to build. And I want to go back to a couple of those data points that we had discussed on prior calls. Michael already mentioned the combined spend of the companies is $13 billion, $10 billion of that relates to raw materials. If you hold that against the expected synergies, you get yourself into the something like 3% that we're expecting over a three-year period. And that, of course, needs to go on top of what we typically produce in year. But that's not a tremendous expectation on the procurement synergy.

Speaker Change: Yes, Mike I'll start out and then and then maybe Michael wants to build.

Speaker Change: And I want to go back to a couple of those data points that we have discussed on prior calls.

Speaker Change: Nickel already mentioned the combined spend of the companies was $13 billion $10 billion of that relates to raw materials.

Speaker Change: If you hold that if you hold that against the expected synergies.

Speaker Change: You get yourself into the range of something like 3% that we're expecting over three year period, and Thats and that.

Speaker Change: Of course needs to grow on top of what we typically produce.

Speaker Change: In the year.

Speaker Change: But that's a.

Speaker Change: A tremendous expectation on the procurement synergies so thats just to contextualize and we've said that before and that's and we're very consistent about the second thing that you said is.

Peter Konieczny: So that's just to contextualize. And we've said that before, and we're very consistent on that. The second thing that you said is it's very complementary. And there is a bit of overlap, but to a large extent, particularly on the resin side, it's pretty complementary. And that's actually good, because we see Berry, for example, being much stronger on the polypropylene side. Amcor is much stronger on the PET and PE side. And that sets us up for an opportunity to just harmonize terms with the larger buyer. And that was one of the levers that we have always been expecting.

Speaker Change: It's very complementary.

Speaker Change: And there was a bit of overlap, but to a large extent, particularly on the resin side, it's pretty complementary.

Speaker Change: And Thats actually good because we see Barry for example, being much stronger on the polypropylene side Umpqua is much stronger on the <unk> side.

Speaker Change: And that sets us up for an opportunity to just harmonize terms with the larger buyer and Thats and that was one of the levers that we have always been expecting.

Peter Konieczny: And with all the work that we've done, we feel pretty confident that that's an opportunity for us. So that's the way how we approach that.

Speaker Change: And with them with.

Speaker Change: All the work that we've done.

Speaker Change: We feel pretty confident that thats an opportunity for us.

Speaker Change: So that's the way how we approach that and then maybe the final point is how do we think about generating both synergies and in a tougher environment.

Peter Konieczny: And then maybe the final point is, how do we think about generating those synergies in a tougher environment? My expectation is, if we are in a volume-muted environment, a large buyer has quite a bit of attractiveness to the supply base, because we're able to bring critical volumes in order to help load capacities, existing capacities.

Speaker Change: Our expectation is if we are in a volume unit environment.

Speaker Change: A large buyer has quite a bit of attractiveness.

Speaker Change: The supply base.

Speaker Change: We're able to bring critical volumes in order to help load capacities existing capacities and the very final point that I will make us.

Peter Konieczny: And the very final point that I will make is, we do have alternatives. We do have alternatives. And it's not that we're locked in one or two suppliers only. We do have alternatives, and that's what we need to leverage.

Speaker Change: We do have alternatives and we do have alternatives.

Speaker Change: But reluctant.

Speaker Change: In one or two suppliers only we do have alternatives and thats and thats, what we need to leverage.

Michael Casamento: And Mike, if I just pick up on your second question, the second part of the question, which was around just a reminder of how we came about a Synergy number and shored that up, I mean, we put a lot of work in behind the scenes on this, on both sides, actually, on the BERI and Amcor side, obviously, we've both got a lot of experience in M&A, we used external consultants to help us benchmark what you should expect, you know, the deal of this size and the various components relating to that, you know, we've had the integration teams in place.

Speaker Change: And Michael I'll, just pick up on your second question. The second part of that question, which is around just a reminder of how we kind of about the synergy number and showed that up I mean, we put a lot of work and behind the scenes on this.

Speaker Change: On both sides actually on the <unk> side, obviously, we put a lot of experience in M&A, we used external consultants to help us benchmark. What you should expect the deal of this size and the various components relating to that.

Speaker Change: We've had the integration teams in place that we stress tested that along the line I mean, typically you would see synergy delivery in these type of deal somewhere around the 5% of sales would be the cost synergies.

Michael Casamento: So we stress tested that along the way. And I mean, typically, you would see Synergy delivery in these type of deals, somewhere around the 5% of sales would be the cost synergies. And, you know, that's where we've ended up around, if you just take the cost synergies line of $530 million, you've then got $60 million of growth. So, you know, when we triangulated that from all different ways and broke it out by the various components, you know, we felt really confident around the ability to deliver that number.

Speaker Change: And that's where where we've ended up around a few times just like the cost synergies line of $530 million is at about $60 million of price and $60 million of financial.

Speaker Change: When we triangulated that from all different ways.

Speaker Change: And broke it out by the various components.

Speaker Change: Felt really confident around the.

Speaker Change: The ability to deliver that number.

Keith Chau: And your next question comes from Keith Chau, MST Financial. Oh, hi PK. Hi Michael. So, just back on the procurement synergies, I guess the point that, you know, someone trying to get to on this call like us... Because a 3% saving for Amcor over three years may not sound like a lot, but to some of these suppliers where margins are, EBIT margins are call it 10 to 15%, you're talking about a 300 basis point haircut to their EBIT margins.

Speaker Change: And your next question comes from Keith Chau MST financial.

Speaker Change: Hi.

Keith Chau: Hi, Michael.

Speaker Change: Just back on the procurement synergies I guess applaud that.

Speaker Change: So I'm trying to get to on this call like us.

Speaker Change: That's great savings for AMCOL over three years may not sound like a lot, but some of the supply chain margins.

Speaker Change: EBIT margins are call it 10% to 15% you're talking about a 300% I'm sorry 300.

Speaker Change: Basis points haircut today that margin.

Keith Chau: So I guess the extent to which you can drive procurement synergies and maybe go to alternative suppliers if some don't play ball, I just want to refer back to a letter or an email that was sent to your suppliers on the 16th of April where you've asked them to meet in Chicago. First one is, it sounds like a bit more of a directive, rather than a partnership going forward, but I just want to understand. How many suppliers have responded to their email or letter? How many do you expect or proportionately? You know, what proportion of your suppliers do you expect to turn up to that meeting?

Speaker Change: Okay.

Speaker Change: The extent to which you can drive procurement synergies and maybe got alternative supplies of sometimes people.

I just wanted to refer back to.

Speaker Change: Our name out there with Santana suppliers on the 16th of April.

Speaker Change: Your Boston Tonight.

Speaker Change: In Chicago.

Speaker Change: First one is it sounds like a bit more of a directive.

Speaker Change: Rather than a partnership going forward, but I just wanted to understand.

Speaker Change: How many suppliers have responded to that in our laser.

Speaker Change: How many do you expect to hold proportionately.

Speaker Change: What proportion of your suppliers do you expect to turn up to that meeting.

Keith Chau: And what are the consequences to those suppliers if they don't play ball? And perhaps an extension to that is what proportion of your raw materials can you have alternate sourcing given the size of the two combined businesses?

Speaker Change: And what are the consequences to those supplies is that arent pie bowls.

Speaker Change: And perhaps an extension to that is what proportion of your raw materials.

Speaker Change: Ken you have alternate sourcing given the size of the combined businesses and I'll.

Peter Konieczny: And Pika, look, I get the point that you've been involved in a lot of these large acquisitions, but this one is particularly big. Thank you. No, Keith, you've sort of said all the right things. This one is particularly big and I've been involved in some of the larger acquisitions and that's why I'm going to have to tell you I can't really get any further into that conversation. We have a playbook and some of those conversations are obviously very sensitive with the suppliers and we're going to handle it in a very respectful manner and we have a business interest to represent here and that's what we're going to do.

Speaker Change: I'll get the point that you've been a volatile all of these large acquisitions, but this one is particularly big thank you.

Speaker Change: Okay.

Speaker Change: You sort of said all the right things for this one is particularly big and I've been involved in some of the larger acquisitions from Thats why im going to have to tell you I can't really get any further into into that compensation.

Speaker Change: Have a playbook.

Speaker Change: And some of those conversations are obviously very sensitive with the suppliers.

Speaker Change: And we're going to handle it.

Speaker Change: In a in a very respectful manner.

Speaker Change: And we have a business interests to represent here and that's what we're going to do so.

Nathan Reilly: So, you know, I understand the question but would understand also and would ask for some understanding that this is really a level of detail that I don't want to handle on this We'll move to Nathan Reilly, UBS. Thanks for taking my question. We've been hearing a little bit more about the North American consumers' value-seeking behaviours right now, so can you please talk to how your merged flexibles portfolio is positioned to respond to that shift in consumer behaviour? Just particularly in terms of any shift to private label, smaller portion sizes or anything else we should be thinking out on that shift in behaviour.

Speaker Change: And understand the question, but would understand also would ask for some for some understanding that this is really a level of detail that I don't want a handle on this call.

Speaker Change: Well move to Nathan Reilly UBS.

Nathan Reilly: Thanks for taking my question.

Speaker Change: We've been hearing a little bit more about the north American consumers value seeking the highest as Rodney I'm sorry can you. Please talk to how you will merge to flexible portfolio was positioned to respond to that shifting consumer behavior.

Speaker Change: Particularly in Chegg of any shift to private label smaller portion sizes or anything else, we should be thinking at all met shipments hyperbole.

Peter Konieczny: Yeah, Nathan, this is a good one. We, you know, we see a couple of things that we can respond to, and the one that I want to carve out here is when you think about value-seeking behavior in the direction of, you know, going potentially to non-branded product alternatives, that is something, like on the private label side, that's certainly something that you could expect the consumers to do. We have a good participation in that category. In North America, we're pretty much proportionally represented, and the reality is that the packaging formats that we're actually selling, whether it's branded or private label, are very similar, and they end up being very similar.

Speaker Change: Yes, Nathan this system. This is a good one.

Speaker Change: We we see a couple of things that we can respond to.

Speaker Change: The one that I want to carve out here is when you when you think about value seeking behavior in the direction of.

Speaker Change: Going potentially to non branded.

Speaker Change: Our product alternatives.

Speaker Change: That is something like on the private label side, Thats, certainly something Budd.

Speaker Change: You could expect the consumers to do we have a good participation in the category.

Speaker Change: In North America, we're pretty much.

Speaker Change: Proportionally represented.

Speaker Change: And the reality is that the packaging formats that we're actually selling.

Speaker Change: Whether it's branded or private label.

Speaker Change: Are very similar they end up being very similar so one of the things that we take away from that is.

Peter Konieczny: So one of the things that we take away from that is, you know, expanding our participation in those areas where consumers will turn to, and that is certainly something that we do. Again, North America, that is pretty well established.

Speaker Change: Expanding our participation in those in those areas where.

Speaker Change: Consumers will turn to and that is certainly something that we do.

Speaker Change: Again North America.

Speaker Change: Is pretty well established in other regions. We may have some opportunities here and there and we would be we would be driving that.

Peter Konieczny: In other regions, we may have some opportunities here and there, and we would be driving that.

Samuel Seow: Next up is Sam Seow City. Thanks guys, appreciate you taking the question. Just on North American beverage, just wondering is there any numbers you can give us around the net exposure of North American beverage in the combined business?

Speaker Change: Next step is Sam CL city.

Speaker Change: Thanks, guys appreciate taking the question.

Speaker Change: Just on North American beverage just wondering is there any numbers.

Speaker Change: You can give us around the net exposure of North American beverage in the combined business.

Peter Konieczny: And going forward when you think about pruning, is that just berry businesses you're looking at or is there some Amcor segments there as well? Now, if I go backwards, we're definitely looking at pruning of the portfolio in the context of a combined company. So that's a new Amcor going forward. It has nothing to do with carving out either legacy Berry or legacy Amcor. So that's a clear answer on the second question. On the first one, I'm not sure I fully understood the question, but I just want to make very clear the containers and closures business from Berry has no participation in the North American beverage category.

Speaker Change: And going forward. When you think about training is that Jeff Berry businesses Youre looking at.

Speaker Change: <unk> segment, there as well thanks.

Speaker Change: Now if I go backwards, we're definitely looking at pruning of the portfolio in the context of the combined company. So about some new arm for going forward has nothing to do with carving out either legacy Berry our legacy amcor.

Speaker Change: So that's a clear answer on the on the second question on the first one.

Speaker Change: I'm not sure I fully understood. The question, but I just wanted to make very clear the containers and closures business from Barry has no participation in the North American beverage category.

Michael Casamento: That's an Amcor question. Let me just see with Michael here if he heard the question differently. Yeah, no, that's right. I think the exposure on the beverage side... ahhhh for us, you know, is really the Amcor, legacy Amcor business has, you know, one and a half billion kind of revenue into the beverage space, and very rarely is nothing. That's the exposure.

Speaker Change: That's on Umpqua question, let me just see with Michael here.

Speaker Change: I heard the question differently.

Speaker Change: Yeah, No that's right I think.

Speaker Change: The exposure on the on the beverage side.

For us Israeli the Amcor legacy Amcor business has one 5 billion.

Speaker Change: Kind of revenue.

Speaker Change: <unk> into the beverage space and very rarely is nothing so.

Speaker Change: That's the exposure.

Cameron Mcdonald: We'll take the next question from Cameron McDonald, E&P.

Speaker Change: We'll take the next question from Cameron Mcdonald E&P.

Michael Casamento: Good morning. I just wanted to touch on the below the line costs. So with the early integration of BERI, it looks like you've taken $26 million already below the line. What's the expectation for that relative into the fourth quarter? And can we confirm then that that is part of the $280 million? So that in FY26 and beyond that, whatever's incurred in this quarter and the next quarter is a reduction to that $280 million in the following year.

Speaker Change: Hi, Good morning, just wanted to touch on the <unk> costs with the early integration.

Barry: Barry It looks like you've taken 26 million already <unk> align.

Barry: What's the expectation for that relative to the fourth quarter and can we confirm then that's included.

Barry: That is part of the 290 <unk> said that in.

Barry: <unk> 2006.

Barry: And beyond that what it is <unk>.

Barry: This quarter in the next quarter is a reduction to that 290 <unk> following <unk>.

Michael Casamento: Yeah, look, just to put some clarity on that, we, there's a couple of things going on in that line. So firstly, there's transaction costs. And for a deal of this size, you know, you'd expect the transaction costs kind of one and a half to 2% of the enterprise value. So call it 250 to 300 million, part of which would end up in the Berry perimeter and the balance in Amcor. So what we've seen to date, by the line, I think there's about 36 million in that, in that year to date of which, you know, 28, 30 is actual transaction costs.

Barry: Yes, just to put some clarity on that.

Barry: Are things going on in that line. So firstly this transaction cost and for a deal of this size.

Barry: You would expect the transaction cost kind of 152% of the enterprise value.

Barry: So call it $250 million to $300 million part of which would end up in the Berry.

Barry: Perimeter and the balance in <unk>, so what we've seen to date.

Barry: And I think thats about $36 million in that in that year to date of which 30.

Barry: 2030 is actual transaction costs, so that's things like legal fees consulting fees financing charges.

Michael Casamento: So that's things like legal fees, consultant fees, you know, financing charges. So, you know, we've got, we've got more of that to come through. And that'll come through in the next couple of quarters. And then in addition to that, over the three year period, we'll, we're, you know, we're going to have around 280 million of cash costs relating to the cost to achieve the synergies, again, which we'll call those out as we progress back over the, over the term.

We've got more of that to come through and that will come through in the next couple of quarters and then in addition to that over the three year period, we'll plan, we're going to have around $290 million of cash costs relating to the cost to achieve synergies.

Barry: Which we'll call those out as we progress that I.

Barry: Over the term.

Erin Viswanathan: Next up, we'll take a question from Erin Viswanathan, RBC Capital Market. Great, thanks for taking my question.

Speaker Change: Next up we'll take a question from Erin.

Speaker Change: <unk> RBC capital markets.

Speaker Change: Great. Thanks for taking my question and congrats on closing the merger.

Erin Viswanathan: Congrats on closing the merger. I guess I had two questions. So, first off, going back to the growth side, you know, Berry, I think, struggled with low single-digit volume growth for the last few years. They did start to have some line of sight to that going forward, but it was somewhat elusive. So, maybe you can just comment on if that's something that you see that's still within the crosshairs for the combined company. And then, secondly, on the procurement side, I appreciate the math on the 2% to 3% reduction there, and that does square with the synergy guidance.

Speaker Change: I guess I had two questions so first off.

Speaker Change: Going back to the growth side.

Speaker Change: Terry I think struggled with low single digit volume growth for the last few years.

Speaker Change: They did have start to have some line of sight to that going forward, but.

Speaker Change: It was somewhat elusive. So maybe you can just comment on.

Speaker Change: If that's something that you see that still within the crosshairs for the combined company.

Speaker Change: And then secondly on the procurement side.

Speaker Change: I appreciate the math on the 2% to 3%.

Speaker Change: Reduction there that does square with the synergy guidance, but.

Erin Viswanathan: But it's just a little bit surprising, given that Berry was already such a large buyer of resin, as you were as well. And so, I think you mentioned that there are many other terms that you can kind of work through to achieve those synergies. So, can you just confirm that it's not just price, you know, maybe long-term supply agreements or whatever else to get those?

Speaker Change: It's just a little bit surprising given that Barry was already has such a large buyer of resin as you are as well and so I think you mentioned that there are many other terms that you can kind of work through that to achieve those synergies. So.

Speaker Change: Can you just confirm that it's not just price.

Speaker Change: Okay, maybe maybe long term supply agreements or whatever else to get those thanks.

Peter Konieczny: Thanks. Yeah, let me work through that. On the growth side, I would probably agree with the assessment of various growth profiles, low single-digit growth. We have seen that. I would say that's not much different from what Amcor has seen over longer periods of time. And, you know, we are going to have an opportunity as we combine the company to drive that into higher levels on a sustainable basis. The portfolio realignment and pruning will certainly help on that end. We have a broader product portfolio that we can offer to customers at scale and globally. We have leverage opportunities in the products that we talked about.

Speaker Change: Yes, let me, let you work through that.

Speaker Change: On the on the growth side I would.

Speaker Change: Probably agree with the assessment of various growth profile.

Speaker Change: Low single digit growth.

Speaker Change: We have seen that I would say that it's not much different from what <unk> seen over longer periods of time.

Speaker Change: And.

Speaker Change: We are going to have an opportunity as we combine the companies.

Speaker Change: To drive that into higher levels on a sustainable basis.

Speaker Change: The portfolio realignment and pruning will certainly help on that end.

Speaker Change: We have a broader product portfolio that we can offer to customers at scale and globally.

Speaker Change: We have leverage opportunities in the products that we talked about think about the established base of Amcor in Latin America, and Asia Pacific and the various products that we can sell through the existing network.

Peter Konieczny: Think about the established base of Amcor in Latin America and Asia Pacific and the various products that we can sell through the existing network. And I would say those are the most important levers that we see plus, and that's the one that I was struggling with here, plus the, you know, the innovation capabilities that we now have on a combined basis to drive functionality, but particularly also sustainability as we go forward that will differentiate our product portfolio going forward. So those are the four big levers that I would see to get ourselves into a stronger growth trajectory going forward.

Speaker Change: And.

Speaker Change: Ed.

Speaker Change: I would say those are those are the most important levers that we see plus and thats. The one that I was struggling with here plus the.

Speaker Change: Innovation capabilities that we now have on a combined basis.

Speaker Change: To drive functionality, but particularly also sustainability as we go forward that will differentiate our product portfolio going forward. So those are those are the four big levers that I would see two two.

Speaker Change: Get ourselves into a stronger growth trajectory going forward and we have made that a real priority for the company. So that's the growth side on the procurement side look I don't know how much I can add to this to be honest with you.

Peter Konieczny: And we have made that a real priority for the company.

Peter Konieczny: So that's the growth side. On the procurement side, look, I don't know how much I can add to this, to be honest with you. I think the most important thing that we have is it's a very complementary buy and the party that has the bigger scale typically has the better terms. And that is something that we can roll out as we combine the two companies. So think in that direction because there's real value there. Now, in terms of terms, yes, there is more than price and other things that you can look at, no question. And we will have to take a comprehensive approach.

Speaker Change: I think the most important thing that we have is it's a very complementary by and the party that has the bigger scale typically has the better terms and that is something that we can rollout as we combine the two companies. So so thinking that direction.

Speaker Change: But because there is real value there now in terms of the terms, yes, there was more than price and other things, but you can look at no question.

Speaker Change: And we will have to take a comprehensive approach and we will do we will do all the things that you have at your fingertips to drive the compensation, we're not against long term supplier relationships, if that drives value mutual value on both sides.

Peter Konieczny: And we'll do all the things that you have, you know, at your fingertips to drive the conversation. And we're not against long-term supply relationships if that drives value, mutual value on both sides.

Operator: And everyone, that is all the time we have for questions today. This does conclude our question and answer session.

Speaker Change: And everyone that is all the time, we have for questions today.

Speaker Change: This does conclude our question and answer session I will now hand things back to PK for additional or closing remarks.

Peter Konieczny: I will now hand things back to PK for additional or closing remarks. Yeah. Thank you, operator. Look, thanks for the interest to everybody here on the call.

Speaker Change: Yes. Thank you operator look thanks for the interest to everybody on the call I just want to make.

Peter Konieczny: I just want to make a comment here in closing. With the merger now completed, Amcor really is better positioned than ever to meet customer and consumer needs as the markets continue to evolve. We are really thrilled to welcome our new colleagues, customers and shareholders. And as far as I'm concerned, this is day one of an exciting and an incredibly strong future for Amcor and all our stakeholders.

Speaker Change: Common here in closing with the merger now completed umber really is better positioned than ever to meet customer and consumer needs as the markets continue to evolve.

Speaker Change: We are really thrilled to welcome our new colleagues customers and shareholders.

Speaker Change: And as far as I'm concerned. This is day one of an exciting an incredibly strong future for encore in all of our stakeholders.

Operator: Thank you, operator.

Speaker Change: Thank you operator, please close the call.

Operator: Please close the Thank you, sir. And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today.

Speaker Change: Thank you Sir and once again, everyone that does conclude today's conference we would like to thank you all for your participation today you may now disconnect.

Operator: You may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Operator: Thanks for watching!