Half Year 2026 Amcor PLC Earnings Call

February 3, 2026

Speaker #1: Thank you for standing by. At this time, I would like to welcome everyone to today's Amcor fiscal 2026 second quarter earnings call. All lines have been placed on mute to prevent any background noise.

Operator: Thank you for standing by. At this time, I would like to welcome everyone to today's Amcor Fiscal 2026 Q2 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad. And if you'd like to withdraw your question, simply press star 1 again. Thank you, and I would now like to turn the call over to Tracy Whitehead, Head of Investor Relations. Tracy?

Speaker #1: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Speaker #1: And if you'd like to withdraw your question, simply press star one again. Thank you. And I would now like to turn the call over to Tracey Whitehead, head of investor relations.

Speaker #1: Tracey.

Speaker #2: Thank you, operator, and thank you, fiscal 2026 second quarter everyone, for joining Amcor's quarterly earnings call. Joining the call today are Peter Konieczny, Chief Executive Officer, and Steve Scherzer, Chief Financial Officer.

Tracey Whitehead: Thank you, operator, and thank you everyone for joining Amcor's Fiscal 2026 Q2 earnings call. Joining the call today is Peter Konieczny, Chief Executive Officer, and Steve Scherger, 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 will discuss on this call. Please be aware that we'll also discuss non-GAAP financial measures, and related reconciliations can be found in those documents on the website. 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.

Half Year 2026 Amcor PLC Earnings Call

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Half Year 2026 Amcor PLC Earnings Call

AMCR

Tuesday, February 3rd, 2026 at 10:30 PM

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Speaker #2: 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 will discuss on this call.

Speaker #2: Please be aware that we'll also discuss non-GAAP financial measures, and related reconciliations can be found in those documents on the website. Remarks will also include forward-looking statements that are based on management's current views and assumptions.

Speaker #2: Several factors could cause future results to differ from current estimates. Reference can be made to Amcor's SEC filings, including our statements on Form 10-K and 10-Q, for 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. With that, over to you, PK.

Speaker #2: Limit yourself to a single answer session; we request that you ask your question and then rejoin the queue if you have any additional questions or follow-ups.

Speaker #2: With that, over to you. Please note that during the question and answer session—Peter.

Speaker #3: Thank you, Tracey, and thank you to everyone joining us. I'm pleased to welcome you today to discuss our fiscal 2026 second quarter results. This is a transformative and exciting time for Amcor.

Peter Konieczny: Thank you, Tracy, and thank you to everyone joining us. I'm pleased to welcome you today to discuss our fiscal 2026 Q2 results. This is a transformative and exciting time for Amcor. Our acquisition of Berry created a global leader in consumer packaging and dispensing solutions. We're realizing the benefits of this combination, executing well, resulting in strong momentum toward achieving our fiscal 2026 commitments. With a strengthened platform and a clear growth roadmap, Amcor is well positioned to deliver significant long-term value for shareholders. Before turning to today's key messages, as always, we will start with safety on slide three. The well-being of our colleagues is a core value for Amcor, and our commitment to safety remains unwavering. For Q2, our industry-leading safety performance continued with Amcor's Total Recordable Incident Rate at 0.52.

Speaker #3: Barry created a global leader in consumer packaging and dispensing solutions. Our acquisition is realizing the benefits of this combination, executing well and resulting in strong momentum toward achieving our fiscal 2026 commitments.

Speaker #3: With a strengthened platform and a clear growth roadmap, Amcor is well positioned to deliver significant long-term value for shareholders. Before turning to today's key messages, as always, we will start with safety on slide three.

Speaker #3: The well-being of our colleagues is a core value for Amcor, and our commitment to safety remains unwavering. For Q2, our industry-leading safety performance continued, with Amcor's total recordable incident rate at 0.52.

Speaker #3: This is a modest increase compared with usual when we acquire a business. We have moved quickly to drive safety performance across our combined business and are pleased to see this key metric improve compared to the September quarter.

Peter Konieczny: This is a modest increase compared with last year's performance, which is not unusual when we acquire a business. We have moved quickly to drive safety performance across our combined business and are pleased to see this key metric improve compared to the September quarter. Additionally, 79% of all Amcor sites remained injury-free through Q2. Slide 4 highlights the key messages for today, aligned with our near-term priorities, which have not changed. Continuing to deliver on the core business, accelerating synergy realization, and further strengthening the business through portfolio optimization actions. Each and all these near-term priorities are contributing to setting Amcor up to deliver solid and sustained, volume-driven, organic earnings growth over the mid to longer term. First, our financial performance in the second quarter was in line with the expectations we set out in October, maintaining momentum toward our full-year objectives.

Speaker #3: Additionally, 79% of all Amcor sites remained injury-free through Q2. Slide four highlights the key messages for today, aligned with our near-term priorities, which have not changed.

Speaker #3: Continuing to deliver on the core business, accelerating synergy realization, and further strengthening the business through portfolio optimization actions. Each and all of these near-term priorities are contributing to setting Amcor up to deliver solid and sustained volume-driven organic earnings growth over the mid- to longer term.

Speaker #3: First, our financial performance in the second quarter was in line with the expectations we set out in October, maintaining momentum toward our full-year objectives.

Peter Konieczny: Adjusted EPS was up 7% for the quarter and 14% for the first half, as we continue to execute well against our priorities and our market opportunities. Across our core portfolio, comparable adjusted EBIT was up 7%, driven by synergy benefits and in line with the prior year, excluding synergies. This reflects the successful effort of our teams to fully offset the impact of lower volumes with cost and productivity benefits. Our continued solid execution demonstrates the resilience of our business and the capability of our people in what continues to be a challenging and dynamic market environment. Second, synergies were at the upper end of our guidance range, with benefits accelerating to $55 million in Q2, and totaling $93 million for the first half.

Speaker #3: Revenue was up 7% for the quarter, and adjusted EPS was up 14% for the first half, as we continue to execute well against our priorities and our market opportunities.

Speaker #3: Across our core portfolio, comparable adjusted EBIT was up 7%, driven by synergy benefits and in line with the prior year excluding synergies. This reflects the successful effort of our teams to fully offset the impact of lower volumes with cost and productivity benefits.

Speaker #3: Our continued solid execution demonstrates the resilience of our business and the capability of our people in what continues to be a challenging and dynamic market environment.

Speaker #3: Second, synergies were at the upper end of our guidance range, with benefits accelerating to $55 million in Q2 and totaling $93 million for the first half.

Speaker #3: The expanding synergy pipeline, combined with our proven integration track record, reinforces our confidence in delivering at least $260 million of synergies in fiscal 2026.

Peter Konieczny: The expanding synergy pipeline, combined with our proven integration track record, reinforces our confidence in delivering at least $260 million of synergies in fiscal 2026. Third, we have reaffirmed our financial guidance for the fiscal year, updating our adjusted EPS expectations to $4 to $4.15 per share, to reflect the recent 1-for-5 reverse stock split. We remain on track to deliver double-digit EPS growth in fiscal 2026, and to double free cash flow versus fiscal 2025, primarily driven by delivery of identified synergies and productivity gains. Lastly, our identified portfolio optimization actions are advancing well and at pace. In a relatively short period of time, we've made meaningful progress evaluating alternatives for our $2.5 billion of non-core businesses, including the North America beverage business.

Speaker #3: Third, we have reaffirmed our financial guidance for the fiscal year, updating our adjusted EPS expectations to 4 dollars to 4 dollars 15 cents per share, to reflect the recent 1 for 5 reverse stock split.

Speaker #3: We remain on track for fiscal 2026 and to double free cash flow, delivering double-digit EPS growth versus fiscal 2025, primarily driven by delivery of identified synergies and productivity gains.

Speaker #3: And lastly, our identified portfolio optimization actions are advancing well and at pace. In a relatively short period of time, we've made meaningful progress, evaluating alternatives for our $2.5 billion of non-core businesses, including the North American beverage business.

Speaker #3: We believe these focused actions will position us for stronger, more sustainable long-term growth. Turning now to slide five and financial performance for the second quarter and first half.

Peter Konieczny: We believe these focused actions will position us for stronger, more sustainable long-term growth. Turning now to Slide 5, and financial performance for the second quarter and first half. In absolute dollar terms, the business generated strong quarterly revenue of $5.4 billion, EBITDA of $826 million, and EBIT of $603 million. This is significantly higher than the prior year as a result of the Berry acquisition, disciplined cost management, improved productivity, and accelerating synergies. Adjusted EPS has also been updated to reflect the reverse stock split. We delivered $0.86 per share for the quarter, in line with our expectations, including a one-time favorable tax benefit, offset by weaker performance in our non-core business portfolio, which we expect will improve in the second half.

Speaker #3: In absolute dollar terms, the business generated strong quarterly revenue of $5.4 billion, EBITDA of $826 million, and EBIT of $603 million.

Speaker #3: This is significantly higher than the prior year, as a result of the Barry acquisition, disciplined cost management, improved productivity, and accelerating synergies. Adjusted EPS has also been updated to reflect the reverse stock split.

Speaker #3: We delivered $0.86 per share for the quarter, in line with our expectations, including a one-time favorable tax benefit offset by weaker performance in our non-core business portfolio, which we expect will improve in the second half.

Speaker #3: Free cash flow was $289 million for the quarter, after funding approximately $70 million of acquisition-related cash costs. And today, the board declared a quarterly dividend of $0.65 per share, which is up over the prior year and continues our long-term commitment to annualized dividend growth.

Peter Konieczny: Free cash flow was $289 million for the quarter, after funding approximately $70 million of acquisition-related cash costs. Today, the board declared a quarterly dividend of $0.65 per share, which is up over the prior year and continues our long-term commitment to annualized dividend growth. Overall, these results are aligned with our expectations 8 months after a transformational acquisition and demonstrate our ability to execute against our commitments. Taking advantage of a unique opportunity to optimize the portfolio was one of the key commitments we highlighted when announcing the acquisition. As shown on Slide 6, our $20 billion core portfolio represents the strongest part of the combined business. The core portfolio includes our 6 focus categories, namely health, beauty and wellness, protein, liquids, food service, and pet care.

Speaker #3: Overall, these results are aligned with our expectations, eight months after a transformational acquisition, and demonstrate our ability to execute against our commitments. Taking advantage of a unique opportunity to optimize the portfolio was one of the key commitments we highlighted when announcing the acquisition.

Speaker #3: As shown on slide six, our $20 billion core portfolio represents the strongest part of the combined business. The core portfolio includes our six focus categories: namely, health, beauty and wellness, protein, liquids, food service, and pet care.

Speaker #3: This is where we hold leadership positions, where innovation drives differentiation and value, and where long-term consumer demand is most durable. These categories reflect the markets where Amcor has a distinct competitive advantage.

Peter Konieczny: This is where we hold leadership positions, where innovation drives differentiation and value, and where long-term consumer demand is most durable. These categories reflect the markets where Amcor has a distinct competitive advantage. When viewed on its own, the core portfolio has a stronger financial profile and outperforms the total company across all key financial metrics, including volumes. In Q2, our estimated core portfolio volume performance was approximately 100 basis points better than the total combined portfolio. Volumes for the core business were approximately 1.5% lower than the prior year, similar to Q1, with market dynamics remaining largely unchanged. Growth across our focus categories modestly outperformed the broader portfolio in both segments. Adjusted EBIT margins of approximately 12% also reflect a higher concentration of advanced solutions, improved mix within our core portfolio, and synergy benefits.

Speaker #3: When viewed on its own, the core portfolio has a stronger financial profile and outperforms the total company across all key financial metrics, including volumes.

Speaker #3: In the second quarter, our estimated core portfolio volume performance was approximately 100 basis points better than the total combined portfolio. Volumes for the core business were approximately 1.5% lower than the prior year, similar to the first quarter, with market dynamics remaining largely unchanged.

Speaker #3: Growth across our focus categories modestly outperformed the broader portfolio in both segments. Adjusted EBIT margins of approximately 12% also reflect a higher concentration of advanced solutions, improved mix within our core portfolio, and synergy benefits.

Speaker #3: Adjusted EBIT dollars were up approximately 7%, largely reflecting synergy benefits. Excluding synergies, we held earnings flat with the prior year in a market with modestly declining volumes.

Peter Konieczny: Adjusted EBIT dollars were up approximately 7%, largely reflecting synergy benefits. Excluding synergies, we held earnings flat with the prior year in a market with modestly declining volumes. This is a solid result achieved through a focus on the cost and productivity levers within our control. Likewise, as mentioned earlier, our portfolio optimization actions are advancing with pace. We're making strong progress exploring alternatives for the remaining $2.5 billion of non-core businesses, including encouraging discussion related to the North American beverage business. We believe these actions will ultimately ensure resources are allocated to the highest value opportunities within our core portfolio. Slide 7 shows Q2 synergies continued to accelerate as expected, resulting in $55 million of benefits in the quarter, at the upper end of our expected range, and $93 million in the first half.

Speaker #3: This is a solid result achieved through a focus on the cost and productivity levers within our control. Likewise, as mentioned earlier, advancing with our portfolio optimization actions are pace.

Speaker #3: We're making strong progress exploring alternatives for the remaining $2.5 billion of non-core businesses, including encouraging discussion related to the North American beverage business.

Speaker #3: We believe these actions will ultimately ensure resources are allocated to the highest value opportunities within our core portfolio. Slide seven shows Q2 synergies continue to accelerate as expected.

Speaker #3: Resulting in $55 million of benefits in the quarter, at the upper end of our expected range, and $93 million in the first half.

Speaker #3: G&A synergies reflect organizational redesign, system consolidation, and simplification efforts across corporate support functions. We remain on track and have reduced headcount by over 600, consistent with our integration roadmap.

Peter Konieczny: G&A synergies reflect organizational redesign, system consolidation, and simplification efforts across corporate support functions. We remain on track and have reduced headcount by over 600, consistent with our integration roadmap. As expected, procurement synergies continue to ramp up as we consolidate spend, harmonize specifications, and align pricing across the combined supplier base. Negotiations and agreements with our major vendors are on track, underpinning our confidence in delivering $325 million in procurement synergies by the end of fiscal 2028. Fiscal benefits are also flowing through as expected, reaching approximately $10 million through the first half as we continue to execute and optimize our debt and tax structures. Additionally, we are gaining traction on operational synergies, with approximately 20 site closures or restructures approved or announced. These synergies, as expected, will primarily materialize in years 2 and 3 of our synergy realization timeline.

Speaker #3: As expected, procurement synergies continue to ramp up as we consolidate spend, harmonize specifications, and align pricing across the combined supplier base. Negotiations and agreements with our major vendors are on track, underpinning our confidence in delivering $325 million in procurement synergies by the end of fiscal 2028.

Speaker #3: Fiscal benefits are also flowing through as expected, reaching approximately $10 million through the first half, as we continue to execute and optimize our debt and tax structures.

Speaker #3: Additionally, we are gaining traction on operational synergies, with approximately 20 site closures or restructures approved or announced. These synergies, as expected, will primarily materialize in years two and three of our synergy realization timeline.

Speaker #3: Growth synergies have also been strong. We're gaining momentum as customers validate the value we bring through our expanded footprint and integrated product offerings to meet complete and complex packaging needs.

Peter Konieczny: Growth synergies have also been strong. We're gaining momentum as customers validate the value we bring through our expanded footprint and integrated product offerings to meet complete and complex packaging needs. Annualized sales revenue from business wins directly linked to our combination with Berry now exceeds $100 million, a strong start to our original three-year target of $280 million. We expect delivery against these wins will commence in the second half of fiscal 2026. Adding another example of those we discussed last quarter, our strengthened supply chain and multi-format capabilities have enabled us to support a major global pharmaceutical customer as they launch a solid oral dose GLP-1 therapy drug. This is an exciting win that will benefit both segments through supply of blister packaging in Europe and rigid containers in the US.

Speaker #3: Annualized sales revenue from business wins directly linked to our combination with Barry now exceeds $100 million, a strong start to our original three-year target of $280 million.

Speaker #3: We expect delivery against these wins will commence in the second half of fiscal 2026. Adding another example, of those we discussed last quarter, our strength in supply chain and multi-format capabilities have enabled us to support a major global pharmaceutical customer as they launch a solid oral dose GLP-1 therapy drug.

Speaker #3: This is an exciting win that will benefit both segments through the supply of blister packaging in Europe and rigid containers in the US. Overall, our teams are executing well against our proven integration playbook.

Peter Konieczny: Overall, our teams are executing well against our proven integration playbook. We also remain confident in our ability to deliver at least $260 million of synergies in fiscal 2026, and a total of $650 million of synergies through fiscal 2028. Before turning the call over, I'd like to take a moment to formally welcome Steve Scherger, who joined us as Amcor's CFO nearly three months ago. Steve has spent his early days deeply engaged, meeting with our executive team, immersing himself in our business, and getting a clear line of sight into our priorities and opportunities. He brings deep industry experience and a strong understanding of both the US and global packaging markets, and we are excited to have him on board.

Speaker #3: We also remain confident in our ability to deliver at least $260 million of synergies in fiscal 2026, and a total of $650 million of synergies through fiscal 2028.

Speaker #3: Before turning the call over, I'd like to take a moment to formally welcome Steve Scherger, who joined us as Amcor CFO nearly three months ago.

Speaker #3: Steve has spent his early days deeply engaged, meeting with our executive team, immersing himself in our business, and getting a clear line of sight into our priorities and opportunities.

Speaker #3: He brings deep industry experience and a strong understanding of both the US and global packaging markets, and we are excited to have him on board.

Speaker #3: We're fortunate to have an executive of his caliber and reputation join our leadership team, and we're confident that his insights and experience will further strengthen our ability to deliver value for our customers and shareholders in the years ahead.

Peter Konieczny: We're fortunate to have an executive of his caliber and reputation join our leadership team, and we're confident that his insights and experience will further strengthen our ability to deliver value for our customers and shareholders in the years ahead. Steve, over to you.

Speaker #3: Steve, over to

Speaker #3: Thank you, PK, for those kind words.

Steve Scherger: Thank you, PK, for those kind words. It is an honor to be here with you and our 70,000 colleagues. In my first few months at Amcor, I've had the opportunity to meet teams from across the organization and around the world, gaining a deeper understanding of the operational and strategic priorities that will drive and shape significant value creation for years to come. What has stood out most is Amcor's clear market leadership, disciplined approach to creating value, and the exceptional quality and capabilities of the people who drive performance globally every day. This quarter, as you can see, we are sharing some additional materials and analytics with you to help provide a clearer view of our underlying market trends and the exceptional global consumer packaging platform we are building.

Speaker #2: It is an honor to be here with you and our 70,000 colleagues. In my first few months at Amcor, I've had the opportunity to meet teams from across the organization and around the world.

Speaker #2: Gaining a deeper understanding of the operational and strategic priorities that will drive and shape significant value creation for years to come. What has stood out most is Amcor's clear market leadership, disciplined approach to creating value, and the exceptional quality and capabilities of the people who drive performance globally every day.

Speaker #2: This quarter, as you can see, we are sharing some additional materials and analytics with you to help provide a clearer view of our underlying market trends and the exceptional global consumer packaging platform we are building.

Speaker #2: I look forward to continuing to share our strategic priorities with current and potential investors in ways that will simplify and quantify our compelling value-creation model.

Steve Scherger: I look forward to continuing to share our strategic priorities with current and potential investors in ways that will simplify and quantify our compelling value creation model. I look forward to partnering with our global leadership team as we build momentum and deliver strong results for our customers and shareholders. Let me start with the Global Flexible Packaging Solutions segment on slide 8. Sales for the segment increased 23% on a constant currency basis, driven primarily by the Berry acquisition. On a comparable basis, volumes were down approximately 2% and were similar to what we experienced in Q1 in all regions. In the developed regions of North America and Europe, volume trends were consistent with the first quarter, down low to mid-single digits, with Europe remaining modestly more challenged than North America.

Speaker #2: I look forward to partnering with our global leadership team as we build momentum and deliver strong results for our customers and shareholders. Let me start with the Global Flexible Packaging Solution segment on slide eight.

Speaker #2: Sales for the segment increased 23 percent on a constant currency basis. Driven primarily by the Barry acquisition, on a comparable basis, volumes were down approximately 2 percent and were similar to what we experienced in Q1 in all regions.

Speaker #2: In the developed regions of North America and Europe, volume trends were consistent with the first quarter—down, low to mid-single digits, with Europe remaining modestly more challenged than North America.

Speaker #2: Volumes across emerging markets were as expected, with low single-digit growth in Asia Pacific, offset by modestly lower volumes in Latin America. By market category, volumes were higher in pet food and meat proteins.

Steve Scherger: Volumes across emerging markets were as expected, with low single-digit growth in Asia Pacific, offset by modestly lower volumes in Latin America. By market category, volumes were higher in pet food and meat proteins. This was offset by lower volumes in other nutrition, liquids, and unconverted film and foil. Overall, our focus categories performed modestly better than the rest of the portfolio. Adjusted EBIT rose 22% on a constant currency basis to $402 million, driven by approximately $65 million of acquired earnings, net of divestments. On a comparable constant currency basis, adjusted EBIT was up approximately 1%, and adjusted EBIT margin of 12.6% reflects accelerating synergy benefits in line with our expectations. Excluding synergies, comparable earnings were broadly in line with the prior year....

Speaker #2: This was offset by lower volumes in other nutrition, liquids, and unconverted film and foil. Overall, our focus categories performed modestly better than the rest of the portfolio.

Speaker #2: Adjusted EBIT rose 22 percent on a constant currency basis, to $402 million. Driven by approximately $65 million of acquired earnings net of divestments.

Speaker #2: On a comparable constant currency basis, adjusted EBIT was up approximately 1 percent, and the adjusted EBIT margin of 12.6 percent reflects accelerating synergy benefits in line with our expectations.

Speaker #2: Excluding synergies, comparable earnings were broadly in line with the prior year. Our teams remained resolute in their focus on disciplined cost performance and driving productivity improvements to offset the unfavorable impact of lower volumes.

Steve Scherger: Our teams remained resolute in their focus on disciplined cost performance and driving productivity improvements to offset the unfavorable impact of lower volumes. Turning to Slide 9 in the Global Rigid Packaging Solutions segment. Sales for the segment increased significantly on a constant currency basis, mainly as a result of the Berry acquisition. On a comparable basis, volumes were flat with the prior year, excluding non-core businesses. This represents a sequential improvement of approximately 1% or 100 basis points, driven by improved growth in emerging markets, where volumes were up low single digits, primarily in Latin America. In developed market regions, excluding non-core businesses, North America volumes were flat compared with the prior year. As expected, volumes in Europe remained somewhat challenged and were down low single digits.

Speaker #2: Turning to slide nine and the Global Rigid Packaging Solutions segment. Sales for the segment increased significantly on a constant currency basis, mainly as a result of the Barry acquisition.

Speaker #2: On a comparable basis, volumes were flat with the prior year, excluding non-core businesses. This represents a sequential improvement of approximately 1 percent, or 100 basis points, driven by improved growth in emerging markets.

Speaker #2: Volumes were up low single digits, primarily in Latin America. In developed market regions, excluding non-core businesses, North America volumes were flat compared with the prior year.

Speaker #2: As expected, volumes in Europe remained somewhat challenged and were down low single digits. Similar to the flexible segment, focus categories performed better than the rest of the broader portfolio, with growth in the pet food, protein, and beauty and wellness markets.

Steve Scherger: Similar to the Flexible segment, focus categories performed better than the rest of the broader portfolio, with growth in the pet food, protein, and beauty and wellness markets. This growth offset softer volumes in the food service and healthcare markets. Adjusted EBIT was $228 million, up over last year on a constant currency basis, driven by approximately $165 million of acquired earnings, net of divestments. On a constant currency comparable basis and excluding non-core businesses, adjusted EBIT was up 15% as a result of accelerating synergy benefits. Excluding synergies, adjusted EBIT was in line with the prior year, with disciplined cost performance offsetting modestly unfavorable mix. Adjusted EBIT margin, excluding non-core businesses, improved approximately 200 basis points and was 12%, similar to the Flexible segment, underscoring the strength of the business we are creating with this transformational acquisition.

Speaker #2: This growth offset softer volumes in the food service and healthcare markets. Adjusted EBIT was $228 million, up over last year on a constant currency basis, driven by approximately $165 million of acquired earnings net of divestments.

Speaker #2: On a constant currency comparable basis, and excluding non-core businesses, adjusted EBIT was up 15 percent as a result of accelerating synergy benefits. Excluding synergies, adjusted EBIT was in line with the prior year, with disciplined cost performance offsetting a modestly unfavorable mix.

Speaker #2: Adjusted EBIT margin excluding non-core businesses improved approximately 200 basis points and was 12 percent, similar to the Flexible segment. This underscores the strength of the business we are creating with this transformational acquisition.

Speaker #2: Moving to slide 10. Pre-cash flow for the quarter was $289 million, resulting in a first half cash outflow of $53 million, in line with expectations.

Steve Scherger: Moving to Slide 10. Free cash flow for the quarter was $289 million, resulting in a first-half cash outflow of $53 million, in line with expectations. First half capital spending was $459 million, up compared with the prior year, as anticipated. We continue to expect fiscal 2026 capital spending to be in a range of $850 to 900 million. Adjusted leverage exiting the quarter was 3.6 times, consistent with the seasonal cash flow patterns. We expect stronger cash flow in Q3 and continue to expect adjusted fiscal year-end leverage to be in the 3.1 to 3.2 times range. Our commitment to an investment-grade credit rating, a strong balance sheet, and a modestly growing dividend annually remains unchanged. Strong annual cash flow generation fully supports our capital allocation priorities.

Speaker #2: First-half capital spending was $459 million, up compared with the prior year, as anticipated. We continue to expect fiscal 2026 capital spending to be in a range of $850 to $900 million.

Speaker #2: Adjusted leverage exiting the quarter was 3.6 times, consistent with the seasonal cash flow patterns. We expect stronger cash flow in Q3 and continue to expect adjusted fiscal year-end leverage to be in the 3.1 to 3.2 times range.

Speaker #2: Our commitment to an investment-grade credit rating, a strong balance sheet, and a modestly growing dividend annually remains unchanged. Strong annual cash flow generation fully supports our capital allocation priorities.

Speaker #2: Turning to slide 11 and our financial guidance. Another quarter of results in line with expectations reinforces our confidence in delivering a year of strong adjusted EPS and cash flow growth.

Steve Scherger: Turning to Slide 11 and our financial guidance. Another quarter of results in line with expectations, reinforce our confidence in delivering a year of strong Adjusted EPS and cash flow growth. As PK noted earlier, we are reaffirming our full year guidance ranges today. Adjusted EPS expectations remain unchanged, while noting the range has been updated to a range of $4 to $4.15 per share, reflecting our recent 1-for-5 reverse stock split. Our expected year-over-year Adjusted EPS growth of 12% to 17% is primarily driven by synergy capture, in line with our commitments and continued strong cost control as we execute in a challenging market environment. These actions, combined with the portfolio optimization steps PK covered earlier, will position us well to deliver sustained, volume-driven, organic growth over the mid to longer term.

Speaker #2: As PK noted earlier, we are reaffirming our full-year guidance ranges today. Adjusted EPS expectations remain unchanged, while noting the range has been updated to $4.00 to $4.15 per share.

Speaker #2: Reflecting our recent one-for-five reverse stock split, our expected year-over-year adjusted EPS growth of 12 to 17 percent is primarily driven by synergy capture, in line with our commitments, and continued strong cost control, as we execute in a challenging market environment.

Speaker #2: These actions, combined with the portfolio optimization steps PK covered earlier, will position us well to deliver sustained, volume-driven organic growth over the mid to longer term.

Speaker #2: We are also reaffirming free cash flow guidance of $1.8 to $1.9 billion. Relative to the first half of the year, our guidance implies a step up in earnings in the second half in line with our expectations, driven by three key components.

Steve Scherger: We are also reaffirming Free Cash Flow guidance of $1.8 to 1.9 billion. Relative to the first half of the year, our guidance implies a step-up in earnings in the second half, in line with our expectations, driven by three key components. First, synergy benefits will continue to build. Second, seasonality is typically stronger in the second half of the year. And third, performance across our non-core businesses is expected to improve, supported by recently renegotiated customer contracts and improved operating performance compared to the prior year. Looking to Q3, we expect Adjusted EPS to be in the range of $0.90 to $1.00 per share, including realization of approximately $70 to 80 million of synergy benefits.

Speaker #2: First, synergy benefits will continue to build. Second, seasonality is typically stronger in the second half of the year. And third, performance across our non-core businesses is expected to improve.

Speaker #2: Supported by recently renegotiated customer contracts and improved operating performance compared to the prior year. Looking to the third quarter, we expect adjusted EPS to be in the range of $0.90 to $1.00 per share.

Speaker #2: Including realization of approximately $70 to $80 million of synergy benefits. Please also draw your attention to supplemental third quarter and updated full year guidance metrics in the appendix section on slide 14.

Steve Scherger: Please also draw your attention to supplemental third quarter and updated full year guidance metrics in the appendix section on Slide 14, which should be helpful when updating financial models. In summary, we are executing well and delivering against our commitments as we continue to take steps to further strengthen the business and our performance. With that, I'll hand the call back to PK to close out. PK?

Speaker #2: This should be helpful when updating financial models. In summary, we are executing well and delivering against our commitments as we continue to take steps to further strengthen the business and our performance.

Speaker #2: With that, I'll hand the call back to PK to close out. PK? Thanks, Steve. In closing, we're making tangible progress across all three of our strategic initiatives.

Peter Konieczny: Thanks, Steve. In closing, we're making tangible progress across all three of our strategic initiatives. These actions support our long-term organic growth objectives, translating into sustainable, volume-driven earnings growth over the mid to longer term. As we close out the first half of fiscal 2026 and look ahead, we're pleased with our progress. We're executing well. Our financial performance is in line with expectations, and we are delivering against our commitments, demonstrating the resilience of our business in a challenging market environment. We're on track to deliver at least $260 million of synergies this fiscal year and $650 million over three years. We have reaffirmed our fiscal 2026 adjusted EPS and free cash flow guidance, and portfolio actions are progressing with pace. That concludes our prepared remarks. And with that, operator, please open the line for questions.

Speaker #2: These actions support our long-term organic growth objectives, translating into sustainable, volume-driven earnings growth over the mid to longer term. As we close out the first half of fiscal 2026 and look ahead, we're pleased with our progress.

Speaker #2: We're executing well. Our financial performance is in line with expectations, and we are delivering against our commitments, demonstrating the resilience of our business in a challenging market environment.

Speaker #2: We're on track to deliver at least $260 million of synergies this fiscal year and $650 million over three years. We have reaffirmed our fiscal 2026 adjusted EPS and free cash flow guidance.

Speaker #2: And portfolio actions are progressing with pace. That concludes our prepared remarks. And with that, operator, please open the line for questions.

Speaker #2: questions. Thank you.

Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press Star, then the number one on your telephone keypad. In the interest of time, excuse me, we would like to remind participants to limit their questions to one and to rejoin the queue for any follow-ups. We will pause just a moment to compile the Q&A roster. It looks like our first question today comes from the line of Ghansham Panjabi with Baird. Ghansham, please go ahead.

Speaker #3: And at this time, I would like to remind everyone: in order to ask a question, press star, then the number one on your telephone keypad.

Speaker #3: In the interest of time, we—excuse me—we would like to remind participants to limit their questions to one, and to rejoin the queue for any follow-ups.

Speaker #3: And we will pause just a moment to compile the Q&A roster. And it looks like our first question today comes from the line of Guncham Punjabi with Baird.

Speaker #3: Guncham, please go

Speaker #3: ahead. Yeah, thanks, Operator.

[Analyst] (Baird): Yeah, thanks, operator. First off, Steve, congrats to you, and welcome back. Best wishes in your new role. I guess, you know-

Ghansham Panjabi: Yeah, thanks, operator. First off, Steve, congrats to you, and welcome back. Best wishes in your new role. I guess, you know-

Speaker #4: First off, Steve, congrats to you and welcome back. Best wishes in your new role. I guess, you know,

Speaker #2: Thanks, Guncham.

Steve Scherger: Thanks, Gansham.

[Analyst] (Baird): Yeah, thanks. You know, I guess, PK, in terms of the volumes, or, or Steve, for that matter, in, in terms of your expectation for volume for the next two quarters, which are your fiscal year 2026, are you embedding? Yeah, yeah, just share with us in terms of what you're embedding in terms of volumes between the two segments. Have you seen any improvement in your production backlogs or any other forward indicators that you track? And just asking because some of the CPGs that have reported thus far have said some, you know, generally speaking, very favorable things as it relates to volumes and pivoting towards volume velocity in fiscal year 2026. I'm just curious if you've seen any impact of that whatsoever at this point. Thanks.

Speaker #4: Yeah, thanks. You know, I guess, PK, in terms of the volumes—or Steve, for that matter—in terms of your expectation for volume for the next two quarters, which are your fiscal year '26, are you embedding—just share with us in terms of what you're embedding in terms of volumes between the two segments. Have you seen any improvement in your production backlogs or any other forward indicators that you track?

Ghansham Panjabi: Yeah, thanks. You know, I guess, PK, in terms of the volumes, or, or Steve, for that matter, in, in terms of your expectation for volume for the next two quarters, which are your fiscal year 2026, are you embedding? Yeah, yeah, just share with us in terms of what you're embedding in terms of volumes between the two segments. Have you seen any improvement in your production backlogs or any other forward indicators that you track? And just asking because some of the CPGs that have reported thus far have said some, you know, generally speaking, very favorable things as it relates to volumes and pivoting towards volume velocity in fiscal year 2026. I'm just curious if you've seen any impact of that whatsoever at this point. Thanks.

Speaker #4: And just asking because some of the CPGs that have reported thus far have said some, generally speaking, very favorable things as it relates to volumes and pivoting towards volume velocity in fiscal year '26.

Speaker #4: I'm just curious if you’ve seen any impact of that whatsoever at this point. Thanks.

Speaker #2: Yeah, thanks, Guncham. I'm happy to give you some color, and then maybe Steve wants to follow up and provide some context with regards to our financial expectations.

Peter Konieczny: Yeah, thanks, Ghansham. I'm happy to give you some color, and then maybe Steve wants to follow up and provide some context with regards to our financial expectations. Look, generally speaking, I'd say we're approaching the back half, not much different from what we saw in the first half, and therefore, the commentary is keeping very much in line with what we said in November. I'll start with the positives. I think we're making good progress on the revenue synergies, as we pointed out in our prepared comments. And we are very much focused on the course and growth initiatives that we're driving across the business, so those could potentially provide some upside. But the reality is, we're operating in a market that is all single digits down.

Speaker #2: Look, generally speaking, I'd say we're approaching the back half—not much different from what we saw in the first half. And therefore, the commentary is very much aligned with what we said in November.

Speaker #2: I'll start with the positives. I think we're making good progress on the revenue synergies, as we pointed out in our prepared comments, and we are very much focused on the growth initiatives that we're driving across the business.

Speaker #2: So, those could potentially provide some upside. But the reality is we're operating in a market that is low single digits down. And while everybody is hoping that the environment will turn in the short term in the second half, we're approaching it very much consistent with what we've seen in the first half.

Peter Konieczny: While everybody is hoping that the environment will turn in the short term, in the second half, we're approaching it very much consistent with what we've seen in the first half. What that means is, we will continue to apply the same recipe in terms of focusing on cost, flexing the organization according with the volume demand that we're seeing. You know, we do see some opportunity for improvement in the back half, but we're hoping for the best and planning for something that's very much consistent with the first half. Steve?

Speaker #2: What that means is we will continue to apply the same recipe in terms of focusing on cost, flexing the organization according to the volume demand that we're seeing.

Speaker #2: So, we do see some opportunity for improvement in the back half, but we're hoping for the best and planning for something that's very much consistent with the first.

Speaker #2: Half. Steve? Yeah, and thanks, PK.

Steve Scherger: Yeah, and thanks, PK. And just to add a little bit to that, Ghansham, our guidance assumes really at the bottom half of the guidance, if you will, assumes a market environment similar to what we've been experiencing, so similar to the 1.5% that we were down in the quarter. So really, the bottom half assumes consistent volume environments, and as PK said, well, the upper half would be more aligned with the possibility of more a positive activity with our customers, as well as the capture of revenue synergies, and the work we're doing to gain position.

Speaker #3: And just to add a little bit to that, Guncham, our guidance assumes, really, that the bottom half of the guidance, if you will, assumes a market environment similar to what we've been experiencing.

Speaker #3: So, similar to the one and a half percent that we were down in the quarter. So, really, the bottom half assumes consistent volume environments and, as PK said, the upper half would be more aligned with the possibility of more positive activity with our customers, as well as the capture of revenue synergies and the work we're doing to gain position.

Speaker #3: Great, thanks, Guncham. And our next question comes from the line of Jacob Kakarnis with Jardine Australia. Jacob, please go ahead.

Operator: Great. Thanks, Ghansham. Our next question comes from the line of Jakob Cakarnis with Jarden Australia. Jakob, please go ahead.

Speaker #5: Thanks, Operator. Good evening, PK and Steve. I just wanted to focus, now that we've got the guidance for the third quarter, more on the fourth quarter and exit rates, if we could.

[Analyst] (Jarden Australia): Thanks, operator. Evening, PK and Steve. I just wanted to focus, now that we've got the guidance for Q3, more on the Q4 and exit rates, if we could. Seasonally, it looks like your EPS historically has been about 30% of the full year in that Q4. It looks like the guidance is largely congruent with that sort of shape for the result. Can you just give us, outside of volumes and market performance, some of the initiatives you're enacting through the Q4 that give you confidence around that guidance, please?

Jakob Cakarnis: Thanks, operator. Evening, PK and Steve. I just wanted to focus, now that we've got the guidance for Q3, more on the Q4 and exit rates, if we could. Seasonally, it looks like your EPS historically has been about 30% of the full year in that Q4. It looks like the guidance is largely congruent with that sort of shape for the result. Can you just give us, outside of volumes and market performance, some of the initiatives you're enacting through the Q4 that give you confidence around that guidance, please?

Speaker #5: Seasonally, it looks like your EPS historically has been about 30% of the full year in that fourth quarter. It looks like the guidance is largely congruent with that sort of shape for the result.

Speaker #5: Can you just give us, outside of volumes and market performance, some of the initiatives you're enacting through the fourth quarter that give you confidence around that guidance?

Speaker #2: Yeah, Jacob, this is

Steve Scherger: Yeah. Jakob, this is Steve. Maybe just try to take you through the first half, second half, and then a little bit Q3, Q4. As we look first half, second half, I'll focus on EBIT improvement. Really, there's three things that will drive first half, second half EBIT improvement. One is just seasonality, a little bit of what you were just talking about. We should see about $100 million of EBIT improvement, first half to second half, just seasonally, which would be consistent with historical expectations. Synergy growth is very important. First half, second half, the at least $260 million of, of synergy for the year is another $100 million of improvement, first half, second half.

Speaker #2: Steve, maybe just try to take you through the, please? First half, second half, and then a little bit third quarter, fourth quarter. As we look at first half, second half, I'll focus on EBIT improvement.

Speaker #2: Really, there's three things that will drive first-half, second-half EBIT improvement. One is just seasonality, a little bit of what you were just talking about.

Speaker #2: We should see about $100 million of EBIT improvement from the first half to the second half just seasonally, which would be consistent with historical expectations. Synergy growth is very important.

Speaker #2: First half, second half, the at least $260 million of synergy for the year is another $100 million of improvement first half, second half.

Speaker #2: And then I'm sure we'll talk a little bit more about our non-core businesses—the $2.5 billion of non-core. We'll see improvement in the first half and second half there as well, particularly given the challenging second quarter that we saw with our non-core businesses, primarily the North American beverage business.

Steve Scherger: Then I'm sure we'll talk a little bit more about our non-core businesses, the $2.5 billion of non-core. We'll see improvement first half, second half there as well, particularly given a challenging second quarter that we saw with our non-core businesses, primarily the North America beverage business. Q3 to Q4, improvement too, to your question, that too, synergy capture will continue to accelerate Q3 to Q4. Our non-core businesses, we should see improvement Q3 to Q4. And then one of the things that we'll see in Q4, specifically on a year-over-year basis, is a year ago in Q4, we had some challenges with our North America beverage business, and we have more confidence that Q4, year-over-year, we'll see improvement on that front. So just a little bit of first half, second half, and third quarter, fourth quarter for you.

Speaker #2: Q3 to Q4 improvement to your question, that too, synergy capture will continue to accelerate Q3 to Q4. Our non-core businesses, we should see improvement Q3 to Q4.

Speaker #2: And then one of the things that we'll see in Q4, specifically on a year-over-year basis, is a year ago in Q4 we had some challenges with our North American beverage business, and we have more confidence that in Q4, year-over-year, we'll see improvement on that front.

Speaker #2: So just a little bit of first half, second half, and third quarter, fourth quarter for you. I hope that helps with the context.

Steve Scherger: I hope that helps with the context.

Speaker #5: Great. Thank you, Jacob. And our next question comes from the line of Anthony Petnari with Citi. Anthony, please go ahead.

Operator: Great. Thank you, Jakob. And our next question comes from the line of Anthony Pettinari with Citi. Anthony, please go ahead.

Speaker #5: ahead. Good

[Analyst] (Citi): Good evening. Hey, just following up on Ghansham's question, in terms of the volume performance in the first half and maybe the embedded assumptions for the second half. I mean, do you think in your major categories, is your volume performance basically in line with the broader industry? Do you think that you're gaining a little bit of share, or, you know, conversely, are you letting go of some business that's maybe become less profitable?

Speaker #6: Evening. Hey, just following up on Guncham's question in terms of the volume performance in the first half and maybe the embedded assumptions for the second half. I mean, do you think in your major categories, is your volume performance basically in line with the broader industry?

Anthony Pettinari: Good evening. Hey, just following up on Ghansham's question, in terms of the volume performance in the first half and maybe the embedded assumptions for the second half. I mean, do you think in your major categories, is your volume performance basically in line with the broader industry? Do you think that you're gaining a little bit of share, or, you know, conversely, are you letting go of some business that's maybe become less profitable?

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Half Year 2026 Amcor PLC Earnings Call

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Half Year 2026 Amcor PLC Earnings Call

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