Amcor reports fiscal results and expands further into India

Amcor has reported its financial results for the fiscal year 2023, saying that it has returned approximately $1.2 billion to shareholders through cash dividends and share repurchases in addition to completing three bolt-on acquisitions.

The company reported net sales of $14.694 billion, in line with the prior year on a comparable, constant currency basis; GAAP net income of $1.048 billion and GAAP diluted earnings per share (EPS) of 70.5 cents per share (cps).

The results show strong cash returns to shareholders of $1.2 billion with an annual dividend increased to 49.0 cps; $431 million of shares repurchased (approximately three per cent of outstanding shares).

The fiscal year 2024 outlook EPS has been adjusted to 67-71 cps with adjusted free cash flow of $850-950 million.

During the conference call, Amcor CEO Ron Delia said throughout the fiscal year 2023, the company’s teams did an “excellent job” of proactively recovering inflation and reducing costs in a highly challenging environment. 

“Adjusted EBIT grew modestly in comparable, constant currency terms, and we returned $1.2 billion of cash to shareholders,” Delia said.

“After delivering earnings growth of 8 per cent in the first half, demand softened considerably, and customer destocking persisted through the last two quarters of the year.

“While we expect current market conditions to continue in the near-term, we have visibility to a number of controllable factors we believe will support a return to solid earnings growth in the second half of fiscal 2024 and leave us well placed to grow at our long-term trend of high-single digit rates thereafter. 

“We are pricing to compensate for inflation and we expect benefits from our cost reduction and productivity initiatives will have a favourable and sustainable impact on operating leverage. In addition, we expect the headwinds from the sale of our Russian plants and higher interest expense will be largely limited to the first half.

“We remain focused on our long-term growth strategy and will continue to pursue opportunities to invest in the business, particularly through innovation and sustainability initiatives in faster-growing, higher-value markets. 

“We will also continue pursuing value-creating M&A and returning cash to shareholders through share repurchases and a compelling and growing dividend.”

A few days before the financial results announcement, Amcor acquired Phoenix Flexibles, expanding its capacity in the high-growth Indian market. The business generates annual revenue of approximately US$20 million from the sale of flexible packaging for food, home care and personal care applications.

Amcor currently has four flexible packaging plants in India. The business has delivered double-digit organic sales growth per annum over the last three years, significantly outpacing growth in the underlying market.

It is also investing to double its local footprint in the pharmaceutical and medical packaging categories.

Amcor Flexibles Asia Pacific president Mike Cash said, “Amcor continues to see substantial opportunities to grow our flexible packaging business in India. With this acquisition, we are investing to maintain and build upon the significant momentum the business has delivered over several years. The scalable nature of the acquired facility, combined with the localisation of new capabilities, further enhances our customer value proposition in this attractive high-growth market”.

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