Executive Vice President, Finance, and Chief Finance Officer at Amcor
Thanks, Ron. And I'll begin with the Flexibles segment on Slide 6. Performance throughout fiscal '22 was excellent across several different dimensions as each one of our businesses responded quickly to the continued evolving market environment, implementing measures to recover higher raw material cost, manage general inflation, improved cost performance and deliver increasing mix benefits. Year-to-date sales of $11.2 billion includes significant recoveries of higher raw material costs of $1.1 billion, the overall price cost impact has remained a manageable headwind through this inflationary cycle, given the diversity of materials we buy, the multiple reasons in which we consume those materials and the leverage we get from our well-developed and deeply embedded capabilities, which have enabled us to implement a range of pricing actions across the business in a timely manner.
Excluding this raw material impact, we are very pleased with the organic sales growth, which was delivered across all Flexibles business units as well as the momentum built through the year as we focused on successful recovery of rising general inflation and optimizing mix benefits. Organic sales growth was 4% for the year and 6% in the June quarter, representing the strongest quarter of growth for the year. The strong mix benefits in part reflect continued growth in priority segments, including Healthcare, Pet Food, Meat and Coffee. We have made deliberate choices to focus on these segments and through the year have seen organic sales growth in the mid to high single-digit range across these categories.
More broadly, supply chain disruptions had a dampening effect on growth in certain high value categories through the year, including in the June quarter. As a result, year-to-date in June quarter volumes across the Flexibles business were in line with last year. Based on these constraints, we proactively took action in parts of the business to direct constrained materials to the highest value use further enhancing mix. In terms of earnings, adjusted EBIT growth of 9% on a year-to-date basis and 11% for the June quarter reflect strong price mix benefits and favorable cost performance. Margins also remained strong at 13.6% despite an adverse impact of 150 basis points from the mathematical consequence of pass-through pricing of higher raw material costs.
Turning to Rigid Packaging on Slide 7, the key messages today, the underlying demand has remained elevated across North and South America through fiscal '22, leading to continued sequential strengthening in our earnings growth in the June quarter, in line with our expectations. On a year-to-date basis, reported sales grew by 20%, which included approximately 16% related to the recovery of higher raw material costs. The 5% organic sales growth was driven by favorable price/mix benefits of 2% and volume growth of 3%.
In North America, year-to-date beverage volumes were up 1%. Hot-fill container volumes increased by 2% for the year against a strong comparative period of double-digit growth and were up 4% in the June quarter, reflecting continued strength in categories like isotonics and juice. While leveraging Amcor's highly differentiated technology, design and PCR handling capabilities, we are well differentiated and adding significant value for our customers in the hot fill segment which over a multi-year period has resulted in compound volume growth of around 5%, helping drive consistent fixed benefit.
Specialty container volumes continue to improve throughout the year, including in the June quarter. But on a full year basis remained below the prior year which benefited from a strong first half in the home and personal care category. And in Latin America, the business delivered double-digit volume growth for the year, supported by higher volumes in all countries we operate in the region and the June quarter marked the highest level of volume growth for the business this year led in part by strength in Brazil.
Turning to earnings, in line with our expectation, operating conditions and financial performance in the North American business improved through the second half of the year after being adversely impacted by industry-wide supply chain complexity and disruptions as well as capacity constraints in the first half. As a result, the overall business delivered adjusted EBIT growth of 4% in the second half with growth improving sequentially and reaching 5% in the June quarter.
Moving to the cash and the balance sheet on Slide 8, we continue to generate strong free cash flow even as we step up our capital investments and compensate for additional working capital needs from higher raw material cost and supply constraints. Free cash flow was $1.1 billion, in line with the expectations and broadly in line with fiscal 2021. We are pleased with this result given we've worn the favorable working capital impact of higher raw material costs throughout the year and have also proactively increased inventories across the business to help offset some of the volatility, created by supply constraints. Our working capital performance remains a top priority, one even more critical in this inflationary environment and despite these challenges, we've been able to maintain a 12-month average working capital to sales ratio below 8% and in line with last year.
We also see ample opportunity to increase investments in strategic growth projects, which generate strong returns in excess of 20%. This led to a 13% increase in capital investments during the '22 fiscal year and as we've previously communicated, we will continue to step up investments to support future organic growth. We maintained an investment-grade credit rating, which gives us access to funding through the cycle of competitive rates and approximately 54% of our debt is fixed.
Leverage at 2.7 times on a trailing 12-month EBITDA basis was in line with our expectations at year-end and the balance sheet is extremely well positioned with only one maturity in the next 18 months, being a EUR300 million bond in March '23. We continue to deliver on our investment case returning meaningful capital to shareholders during fiscal '22 year through repurchasing $600 million worth of shares and raising our annual dividend per share to $0.48. In total, we are pleased to have returned more than $1.3 billion to shareholders in fiscal '22.
Turning now to Amcor's outlook for fiscal 2023 on Slide 9, we expect adjusted EPS of approximately $0.80 to $0.84 per share on a reported basis. This includes growth of 5% to 10% from the underlying business and a benefit of approximately 2% from share repurchases, offset by three non-operating items. The first, the negative impact of approximately 4% from higher interest expense, which is based on the assumption that interest rates increased in line with the current market forward curve expectations. Second, an estimated 2% negative impact from the scale down and planned sale of our three plants in Russia. And third, a 2% negative impact related to a stronger US dollar assuming current exchange rates prevail for the balance of the fiscal year.
In terms of cash flow, we expect to continue to generate significant adjusted free cash flow for the year of approximately $1 billion to $1.1 billion, even as we fund the further 15% increasing capital investments to capture organic growth opportunities. While Amcor's cash flows are typically weighted to the second half, in fiscal 2023, the seasonality is likely to be slightly more pronounced as we intend to maintain higher levels of inventory in the near-term before returning to more normalized levels later in the year. As a result, free cash flow in the September '23 quarter is expected to be lower than first quarter of fiscal '22. Our strong cash generation enables us to continue paying a compelling and growing dividend and allocate approximately $400 million in cash to share repurchases during the 2023 fiscal year.
So in summary, from me today, the business has delivered another strong year of organic growth as we remain focused on executing for our customers recovering inflation and higher raw material costs and increasing earnings leverage by managing mix. Our continued and consistent performance supports our confidence in delivering another year of underlying growth in fiscal 2023.
With that, I'll hand back to Ron.