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    AMCR
    Earnings call· Mar 2026(Q3 FY26)

    Amcor Q3 FY26 earnings call AMCR

    May 6, 2026 Source

    Executive summary

    Amcor Q3 FY26 — Strong Synergy Capture and Resilient Performance

    Amcor delivered resilient Q3 FY26 results, with adjusted EPS in line with expectations, driven by accelerating synergy capture and disciplined execution. The company is proactively mitigating impacts from the Middle East conflict through supply chain flexibility and pricing actions, though this led to a strategic decision to hold higher inventory, impacting free cash flow guidance. Portfolio optimization through divestitures is progressing well, sharpening the focus on higher-value markets and improving the business's earnings profile.

    Highlights

    5

    • Adjusted EPS increased 6% year-over-year to $0.96 per share in Q3 FY26, in line with expectations.

    • Synergy delivery accelerated to $77 million in Q3 FY26, reaching $170 million for the first 9 months, exceeding the initial year 1 target.

    • Six noncore business divestitures were agreed upon for approximately $500 million, with proceeds used for debt reduction.

    • Core portfolio EBIT dollars were up approximately 4% year-to-date despite modestly lower volumes.

    • Total recordable incident rate (TRIFR) improved for the third consecutive quarter to 0.49, with 71% of sites injury-free.

    Concerns

    5

    • Free cash flow guidance for FY26 was reduced to $1.5 billion-$1.6 billion from $1.8 billion-$1.9 billion due to a strategic decision to hold more inventory at higher costs.

    • Year-end leverage is now expected to be 3.4x-3.5x, a modest uptick from original guidance, due to lower volumes and the inventory impact.

    • Overall volumes were down approximately 1.5% in Q3 FY26, with developed markets (North America and Europe) experiencing low single-digit declines.

    • The Rigid Packaging Solutions segment was impacted by a $25 million unfavorable effect from winter storms in the U.S. in January and February.

    • Healthcare volumes were slightly down in Q3 FY26, attributed to U.S. winter storms and a weaker cold and flu season.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year Adjusted EPS
    $3.98 to $4.03 per share
    high materiality
    High
    Full-year Free Cash Flow
    $1.5 billion to $1.6 billion
    high materiality
    Medium
    Year-end Adjusted Leverage
    approximately 3.4 to 3.5x
    high materiality
    High
    Synergy delivery
    $270 million
    high materiality
    High
    Cumulative Synergy delivery
    $650 million
    high materiality
    High
    Growth synergies annualized revenue
    $280 million
    medium materiality
    High
    Fiscal Year-End Transition Period Guidance
    To be provided
    low materiality
    High
    Fiscal 2026 Capital Spending
    $850 million to $900 million
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Global Flexible Packaging Solutions
    Sales increased significantly due to the Berry acquisition. Comparable volumes showed sequential improvement. EBIT margin reflects synergy benefits.
    Comparable volumes: down approximately 1.5%Comparable volumes vs Q2: 100 basis points improvementDeveloped markets volumes: down low single digitsEmerging markets volumes: up (mid-single-digit growth in Asia)Volumes higher in: pet food and proteinsVolumes lower in: healthcare and other nutritionAdjusted EBIT: $452 millionAdjusted EBIT growth (constant currency): 28%Acquired earnings (net of divestitures): $78 millionComparable adjusted EBIT growth: approximately 3%
    		—29% (constant currency)—13.9%
    Global Rigid Packaging Solutions
    Sales increased significantly due to the Berry acquisition. Volumes were impacted by U.S. winter storms. Synergy benefits were offset by the storm impact.
    Comparable volumes (core and noncore): down approximately 1.5%Volume performance: modestly weaker sequentially due to U.S. winter stormEmerging markets volumes: continued growth (mid-single-digit growth in Latin America)Volumes higher in: liquids, foodservice and beauty and wellnessVolumes lower in: healthcare and other nutritionAdjusted EBIT: $276 millionAdjusted EBIT growth (constant currency): up over last yearAcquired earnings (net of divestitures): approximately $175 millionComparable adjusted EBIT (excluding noncore): broadly in line with prior yearUnfavorable impact from winter storms: $25 million
    		—significant (constant currency)—approximately 13% (excluding winter storm impact)

    Operational metrics

    26
    Adjusted EPS
    $0.96up 6% year-over-year
    Q3 FY26

    In line with expectations, includes benefits from tax-related synergies, partially offset by $25 million unfavorable impact from winter storms.

    Adjusted EPS
    $2.79increased 11%
    9 months FY26

    For the first 9 months of fiscal year 2026.

    Revenue
    $5.9 billionsignificantly higher than prior year
    Q3 FY26

    Result of Berry acquisition, disciplined cost management, improved productivity, and accelerating synergy benefits.

    EBITDA
    $892 millionsignificantly higher than prior year
    Q3 FY26

    Result of Berry acquisition, disciplined cost management, improved productivity, and accelerating synergy benefits.

    EBIT
    $687 millionsignificantly higher than prior year
    Q3 FY26

    Result of Berry acquisition, disciplined cost management, improved productivity, and accelerating synergy benefits.

    Berry transaction, restructuring and integration-related cash costs
    $78 million
    Q3 FY26

    Funded during the quarter.

    Free cash outflow
    $39 million
    Q3 FY26

    After funding Berry transaction, restructuring and integration-related cash costs.

    Free cash outflow
    $93 million
    9 months FY26

    For the first 9 months of fiscal year 2026.

    Berry acquisition synergy delivery
    $77 million
    Q3 FY26

    Synergy delivery continued to accelerate.

    Berry acquisition synergy delivery
    $170 million
    9 months FY26

    Total synergies for the first 9 months.

    G&A and procurement synergies
    approximately $160 million
    Year 1

    Expected target for year 1.

    G&A and procurement synergies
    approximately $325 million
    FY28

    Expected target by fiscal 2028.

    Financial synergies
    approximately $20 million
    Q3 FY26

    Reflecting ongoing optimization of debt and tax structures.

    Financial synergies
    approximately $30 million
    9 months FY26

    Total for the first 9 months.

    Growth synergies annualized revenue
    exceeding $110 million
    current

    Tracking well against $280 million 3-year annualized revenue target.

    Core portfolio EBIT margin
    approximately 12.3%
    Q3 FY26

    Reflecting favorable mix, higher concentration of advanced solutions, and benefit of year 1 synergies.

    Noncore business margin
    expanding meaningfullysequentially
    Q3 FY26

    Improved financial performance in the noncore business.

    Winter storm impact on EBIT
    $25 millionunfavorable impact
    Q3 FY26

    Due to lost production days in weather-impacted areas across the Midwest and Northeast in January and February.

    Polymer sourcing from Middle East
    less than 5%
    current

    Of total sourced resin.

    Resin sourcing from North America
    approximately 65%
    current

    Of total resin sourced.

    Contracted vs. non-contracted business split
    70% contracted / 30% non-contracted
    current

    Roughly splits between contracted and non-contracted business for the combined Amcor and Berry.

    Total procurement spend
    $13 billion
    current

    Overall procurement spend.

    Indirect procurement spend
    $3 billion
    current

    Portion of total procurement spend.

    Resin procurement spend
    approximately $5 billion
    current

    Portion of direct procurement spend.

    Focus categories outperformance
    150 basis points
    Q3 FY26

    Outperformed the company overall; collectively flat.

    Corporate functions migration
    initiate migration and consolidation
    beginning in 2027

    To a new U.S. headquarters in Miami, Florida, aligning resources more closely with operating footprint.

    Industry KPIs

    7
    MetricValueDetails
    Safety0.49
    Dividends$0.65USD/share
    Net debt leverage3.8x
    CAPEX capital program$687 millionUSD
    Volume production growthdown approximately 1.5%%
    End market demand driverslow single digits%
    Adjusted underlying EBITDA$892 millionUSD

    Deals & partnerships

    1
    Multiple unnamed partiesSale of noncore businessesapproximately $500 million

    Six noncore businesses (4 additional agreements in Q3, 2 previously announced in Q1) with combined annual revenue of approximately $500 million. Average multiple of around 6x.

    Risks & headwinds

    4
    Middle East conflict and cost inflationQ4 FY26 and beyond

    Resin prices up close to 100% in a very short period of time (analyst comment); no material impact on Q4 earnings expected.

    Mitigation: Minimal exposure to Middle East (less than 5% resin sourced); broad global network and supplier base; ability to flex production locations and reformulate; holding more inventory; well-established pass-through mechanisms and collaborative pricing actions with customers.

    Challenging volume environmentQ3 FY26 and calendar H2 2026

    Overall volumes down approximately 1.5% in Q3 FY26; low single-digit market decline expected for calendar H2 2026.

    Mitigation: Focus on execution, synergies, cost and productivity improvements, and responsible pricing actions. Focus categories outperforming overall business.

    U.S. winter storms impactQ3 FY26 (January and February)

    $25 million unfavorable impact on Adjusted EBIT.

    Mitigation: Teams acted quickly to mitigate cost inflation with balanced and fair price actions.

    Stretched consumerOngoing

    Consumer is stretched, leading to value-seeking behavior.

    Mitigation: Customers are committed to supporting volumes, which may translate into promotional activities and other initiatives.

    What to watch in Q4 FY26

    5

    Free cash flow recovery and inventory normalization

    beyond Q4 FY26, into CY27
    CurrentFY26 guidance $1.5B-$1.6B (reduced from $1.8B-$1.9B)
    TargetDelivery of previously anticipated inventory and working capital improvements

    Why it matters

    Indicates the unwinding of temporary working capital decisions and return to stronger cash generation, crucial for deleveraging.

    As supply conditions normalize, we expect to deliver the inventory and working capital improvements we previously anticipated, reversing the temporary timing impact📎 we have now factored into our range.

    Q&A highlights

    8

    Will the Middle East conflict have a residual impact on calendar H2 2026, especially given Berry's contract structure and the recent resin price increase? How is Amcor mitigating this?

    Amcor has minimal exposure to the Middle East and expects no material impact on Q4. Beyond Q4, the company assumes pass-through mechanisms and customer relationships will continue to offset cost increases. They use a collaborative approach with customers for the 70% contracted business, justifying costs and ensuring supply continuity.

    “Our planning assumption is that our pass-through mechanisms and the relationships we have with our customers will continue to offset the cost environment. So on a Q4 basis, as we talked, no material impact, and that would be the same assumption as we look beyond Q4, given the mechanisms that are in place to offset either in an inflationary environment or if it were to revert to the other direction.”

    asked by Ghansham Panjabi · answered by Stephen Scherger

    3 min read7 chapters

    Detailed Narrative

    01

    Safety Performance and Integration Milestones

    Amcor continues to prioritize safety, achieving an industry-leading total recordable incident rate (TRIFR) of 0.49, which improved for the third consecutive quarter following the Berry acquisition. 71% of sites remained injury-free. The company also marked the first anniversary of the Amcor-Berry combination, highlighting smooth integration, strong leadership team formation, and rapid delivery on synergy commitments.

    02

    Portfolio Optimization and Divestitures

    The company made significant progress on portfolio optimization, reaching agreements for four additional noncore business divestitures in Q3, adding to two previously announced. The combined transaction value for these six divestitures is approximately $500 million, implying an average multiple of around 6x. All cash proceeds will be used to reduce debt, and the net impact on EPS is not expected to be material. Discussions for remaining noncore businesses, including the North American beverage business, are encouraging due to improved financial performance.

    03

    Synergy Acceleration and Future Outlook

    Synergy delivery continues to accelerate, reaching $77 million in Q3 and $170 million for the first nine months, exceeding the initial FY26 target. The company is confident in delivering $270 million in FY26 and $650 million cumulatively over three years. G&A and procurement synergies are ramping up as planned, with financial synergies contributing $20 million in Q3. Growth synergies have achieved over $110 million in annualized revenue, tracking well towards the $280 million three-year target.

    04

    Middle East Conflict Mitigation and Supply Chain Strategy

    Amcor is proactively mitigating the impact of the Middle East conflict, with no material impact expected on Q4 earnings. The company has minimal exposure to the region (less than 5% of resin sourced from there) and leverages its broad global network and supplier base for flexibility. To ensure supply continuity for customers, Amcor made a strategic choice to hold more inventory than previously assumed, which temporarily impacts free cash flow but helps mitigate cost inflation and maintain reliable service.

    05

    Volume Performance and Consumer Trends

    Overall volumes were down approximately 1.5% in Q3, a 100 basis point sequential improvement from Q2. This decline was equally split between core and noncore businesses. Developed markets (North America and Europe) saw low single-digit volume declines, while emerging markets (Latin America and Asia) experienced mid-single-digit growth. Focus categories within the core portfolio outperformed the overall company, remaining collectively flat. The consumer is perceived as stretched, leading to value-seeking behavior, though customer commitment to supporting volumes remains solid.

    06

    Fiscal Year-End Change and HQ Relocation

    Amcor announced a transition of its fiscal year-end from June 30 to December 31, effective in 2027, to enhance comparability with peers. This will involve a 6-month reporting period from July 1, 2026, to December 31, 2026. Additionally, the company will initiate the migration and consolidation of select corporate functions to a new U.S. headquarters in Miami, Florida, beginning in 2027, to align resources more closely with its operating footprint.

    07

    Capital Allocation and Deleveraging Commitment

    Despite a modest uptick in year-end leverage guidance to 3.4x-3.5x due to lower volumes and inventory decisions, Amcor remains committed to an investment-grade credit rating and deleveraging to a 2.5x-3x range. Stronger Q4 free cash flow is expected to drive leverage down at fiscal year-end. The company sees a clear pathway to achieving its target leverage through continued synergy capture, divestiture proceeds, and robust free cash flow generation, with fiscal and calendar 2027 expected to be an important year for inflection.

    AI-generated summary of the company’s earnings call. Not investment advice.