Sales and profits rising at Amcor

Packaging giant Amcor saw its sales and profits for the full year all rise in constant currency terms, but take a hit in real terms thanks to adverse currency fluctuations, as CEO Ron Delia declared it the "global leader in consumable packaging".

Net sales rose by 1.5 per cent to $9.46bn, or 5.5 per cent in constant currency; EBITDA rose marginally up by 0.3 per cent to $1.39bn, though in constant currency terms it was up by 4.1 per cent. Net income rose by 4.6 per cent to $729.5m, which is up a healthy nine per cent in constant currency.

Flexibles sales were up by half a per cent or 5.4 per cent in constant currency to $6.57bn, with an adjusted EBIT rising by 2 per cent to $817.2m, or 6.7 per cent in constant currency.

The Rigids division saw its figures all rise, although again impacted by adverse currency changes, with sales up by 3.8 per cent to $2.89bn, which is 5.4 per cent in constant currency, while adjusted EBIT rose by 3.3 per cent, or 4.8 per cent in constant currency terms.

In the Asia-Pacific region, sales were higher than last year in constant currency, terms mainly driven by growth across the emerging markets. The company said operating and overhead cost performance across the region was significantly better than last year, and included benefits from prior period cost savings initiatives.

Sales generated from specialty folding carton products were higher than the prior year in constant currency terms, with "good growth" experienced in the Asia and Americas.

Amcor confirmed the all-stock Bemis acquisition, completed 11 June, will deliver $180m of pre-tax cost synergies over three years.

The company expects 2020 to be a transition year as it integrates the newly acquired Bemis businesss, which if it had been part of Amcor for the full year would have added $3.8bn in sales and $550m in EBITDA to the books.

Amcor will funnel proceeds from the anti-trust required divestments of its flexible packaging plants in Europe and the US to drive shareholder value through a $500m share buy-back, and making $50m in strategic investments to advance its sustainability agenda.

Speaking on the results Ron Delia, Amcor CEO, said, “2019 was a transformative year for Amcor, marked by the successful completion of the Bemis acquisition and our listing on the New York Stock Exchange.

“The legacy Amcor business performed well during the 2019 financial year, delivering results right in line with expectations, and building momentum in several areas including safety, sales and working capital. Overall, Amcor delivered net income growth of nine per cent in constant currency terms with good performance in both the Rigid Packaging and Flexibles reporting segments.

“Our financial profile is strong and will be enhanced as we deliver financial benefits from the Bemis acquisition and continued organic growth across the business. Amcor’s capacity to drive shareholder returns is evident in the initiatives announced today including increasing the dividend, returning $500m to shareholders through a share buy-back and investing at least $50m in strategic projects to accelerate our sustainability agenda.

“Today, Amcor is the global leader in consumer packaging with a combination of talented people, differentiated capabilities, scale and global reach. These are powerful competitive advantages that enable us to better serve our customers and to develop and deliver packaging that best protects the environment.”