Amcor Q4 Earnings Call Highlights

Key Points

• Amcor’s earnings strengthened: Fiscal Q4 adjusted EPS rose 23% year over year to $1.23, while full-year adjusted EPS increased 13% to $4.02. Modest volume growth, cost controls, pricing actions and Berry Global synergies supported margins despite inflation.
• Berry synergies are ahead of plan: Amcor captured $285 million in fiscal 2026 synergies, about 10% above its initial first-year target, and remains committed to $650 million over three years. The company also secured nearly $140 million in Berry-related new business awards.
• Management sees improving momentum: Free cash flow fell short of guidance at $1.3 billion because of working-capital effects tied to the Middle East conflict, but Amcor expects to recover more than $500 million over the next year. It projects $1.80–$1.90 in adjusted EPS for the six-month transition period and expects double-digit adjusted EPS growth in calendar 2027.

Amcor NYSE: AMCR reported fiscal 2026 fourth-quarter adjusted earnings per share of $1.23, up 23% from a year earlier, as synergy gains from its acquisition of Berry Global, cost management and modest volume growth supported results amid elevated input-cost inflation.

For the full fiscal year, adjusted EPS rose 13% to $4.02. Fourth-quarter revenue totaled $6.4 billion, while adjusted EBITDA reached $1.045 billion and adjusted EBIT was $836 million. Chief Executive Officer Peter Konieczny said the company’s diversified packaging portfolio and the Berry acquisition helped support margin expansion and operating performance despite a challenging macroeconomic environment.

“We were pleased to see an inflection to modestly positive volume growth in the quarter,” Konieczny said. Volume improved about 200 basis points sequentially, with growth across several categories. He said the company’s teams secured supply, pursued productivity measures and used pricing actions to offset inflationary pressures.

Synergies Run Ahead of Initial Targets

Amcor realized $115 million in synergies during the fourth quarter, bringing fiscal 2026 synergy capture to $285 million, approximately 10% above its initial first-year expectation. The company remains committed to achieving $650 million in total synergies over three years from the Berry transaction.

The company attributed the stronger-than-expected result primarily to accelerated execution in general and administrative expenses and procurement. It also cited progress in operational and network synergies, which it expects to contribute to earnings growth and productivity over the next two years.

Amcor said it achieved about half of its three-year growth-synergy target during the year, with nearly $140 million in new business awards against an initial three-year goal of $280 million. These wins include combining the legacy companies’ product offerings, expanding products into new geographies and cross-selling to customers. Konieczny said the awards are expected to ramp over roughly 12 to 15 months, with a larger earnings contribution anticipated during the transition period and calendar 2027.

The company also closed five divestitures during the second half of fiscal 2026 as it sought to increase its focus on higher-growth, higher-return businesses. Completed divestitures are expected to reduce prior-year adjusted EPS by $0.04 during the upcoming transition period.

Segment Volumes Improve

In Global Flexible Packaging Solutions, sales increased 16% on a constant-currency basis, mainly reflecting the Berry acquisition and the pass-through of higher raw-material costs. Comparable volumes rose about 1% year over year, an improvement of nearly 200 basis points from the prior quarter. Adjusted EBIT increased 20% on a constant-currency basis to $533 million, while adjusted EBIT margin was 15.1%.

Global Rigid Packaging Solutions sales rose 35% on a constant-currency basis, also driven primarily by the Berry acquisition and higher raw-material pass-through. Comparable volume increased about 0.5% in both core and non-core businesses. Adjusted EBIT was $352 million, up 57% on a constant-currency basis, and adjusted EBIT margin improved 180 basis points to 12.3%.

Within its core portfolio, Amcor reported strong volume growth in food service, pet care and protein categories. Liquids and beauty and wellness volumes were flat. Healthcare volumes declined because of weakness in lower-margin healthcare categories, although Konieczny said the company was seeing favorable mix toward higher-margin pharmaceutical products, including nasal, ophthalmic and inhalation devices.

Management said volume gains were broad-based across the company’s core and non-core operations, segments and regions. Emerging markets continued to grow, led by Asia, while developed markets improved sequentially. Konieczny said food service, pet care and protein were among areas showing “green shoots,” while CFO Stephen Scherger said July volume trends remained consistent with the fourth quarter.

Cash Flow Affected by Middle East Conflict

Fiscal-year free cash flow was $1.3 billion after $290 million of Berry transaction, restructuring and integration-related cash costs. That total was $200 million below Amcor’s outlook range, largely because inventories and receivables were higher than expected amid the Middle East conflict, as well as accelerated integration spending.

Scherger said the company expects to recover more than $500 million of cash over the next 12 months, primarily through the reversal of working-capital effects tied to the conflict and broader initiatives involving inventory, receivables and payables. He said Amcor could recover roughly $100 million to $300 million during the first six months of that period, depending in part on supply-chain conditions.

Leverage ended the fiscal year at 3.5 times, in line with expectations and partly supported by divestiture proceeds. Amcor expects leverage of about 3 times by the end of calendar 2027, supported by cash generation and its commitment to maintaining an investment-grade credit rating.

Transition-Period and 2027 Outlook

As part of a previously announced fiscal year-end transition, Amcor provided guidance for the six months ending Dec. 31, 2026. The company expects adjusted EPS of $1.80 to $1.90, compared with $1.83 in the comparable prior-year period before the impact of divestitures.

• Divestitures are expected to reduce adjusted EPS by $0.04 per share.
• Higher interest expense and taxes are expected to create a $0.10 to $0.12 per-share headwind.
• Synergies and net operating performance are expected to add $0.13 to $0.21 per share.

Management’s outlook assumes flat to modestly positive volume growth and continued pricing actions that offset inflation. Scherger said the company recorded about $280 million of pricing pass-through during the fourth quarter, broadly matching inflation.

For calendar 2027, Amcor said it has line of sight to double-digit adjusted EPS growth as portfolio actions, synergy realization and organic volume growth increasingly contribute. Konieczny said the company expects to complete the actions needed to deliver the majority of its $650 million synergy target by the end of 2027. The board declared a quarterly dividend of $0.65 per share, representing a modest increase from the prior year.

About Amcor (NYSE:AMCR)

Amcor NYSE: AMCR is a global packaging company specializing in the design, development and production of flexible and rigid packaging solutions for food, beverage, pharmaceutical, medical, home and personal care, and other consumer and industrial products. The company's product portfolio encompasses flexible films, pouches, specialty cartons, rigid containers, metal closures and dispensing systems. Amcor's packaging solutions are engineered to preserve product quality, extend shelf life and meet the specific requirements of a wide range of end markets.

Founded in its current form in 2005 following a spin-off from a mining conglomerate, Amcor expanded its capabilities and geographic footprint through organic investments and strategic acquisitions.

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