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    AMCR
    Earnings call· Jun 2026(Q4 FY26)

    Amcor Q4 FY26 earnings call AMCR

    Aug 12, 2026 Source

    Executive summary

    Amcor Q4 FY26 — Strong Operating Performance and Ahead of Synergy Targets

    Amcor delivered strong operating performance in Q4 FY26, exceeding synergy targets and achieving positive volume growth despite a challenging macroeconomic environment. The company is now focused on leveraging the Berry acquisition for accelerated earnings growth and cash flow generation, with a clear path to double-digit adjusted EPS growth in calendar year 2027 and a commitment to deleveraging to approximately 3x by year-end CY27.

    Highlights

    5

    • Q4 adjusted EPS increased 23% year-over-year to $1.23 per share, with full-year FY26 adjusted EPS reaching $4.02, up 13%.

    • Synergy capture exceeded expectations, realizing $115 million in Q4 and $285 million for FY26, approximately 10% ahead of initial year 1 targets.

    • Achieved modestly positive volume growth in Q4, inflecting sequentially by approximately 200 basis points, with broad-based improvement across categories and regions.

    • Successfully mitigated inflationary pressures through coordinated efforts and responsible pricing actions, with $280 million of price realization in Q4.

    • Declared a quarterly dividend of $0.65 per share, representing a modest increase and reflecting commitment to annual dividend growth.

    Concerns

    3

    • Free cash flow for FY26 was $1.3 billion, $200 million below outlook, primarily due to working capital impacts from the Middle East conflict and accelerated integration spending.

    • Higher interest and tax expenses are expected to unfavorably impact adjusted EPS by $0.10 to $0.12 during the 6-month transition period.

    • Overall volumes in the healthcare segment were down due to softness in lower-margin subcategories, despite underlying growth trends in higher-margin areas.

    Guidance & targets

    6
    CategoryTargetConfidence
    Adjusted EPS
    $1.80 to $1.90 per share
    high materiality
    High
    Adjusted EPS growth
    double-digit growth
    high materiality
    High
    Leverage (Net Debt to EBITDA)
    approximately 3x
    high materiality
    High
    Dividend growth
    modestly growing
    medium materiality
    High
    Leverage (Net Debt to EBITDA)
    3.5x to 3.6x
    medium materiality
    High
    Free Cash Flow
    $2.5 billion
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Global Flexible Packaging Solutions
    Sales growth driven by Berry acquisition and raw material cost pass-through. Volumes improved sequentially, with modest growth in North America and Europe, and low single-digit growth in emerging markets (mainly Asia). Adjusted EBIT growth driven by acquired earnings, divestitures, and synergy benefits.
    Comparable volumes: up 1% year-over-yearSequential volume improvement: nearly 200 basis points compared with Q3Adjusted EBIT margin: 15.1%
    		—16% constant currency—$533 million adjusted EBIT
    Global Rigid Packaging Solutions
    Sales growth primarily due to Berry acquisition and raw material cost pass-through. Volumes strengthened sequentially, driven by improved consumer demand and noncore business performance, particularly in developed markets (Europe and North America). Adjusted EBIT growth driven by acquired earnings, divestitures, synergy benefits, and volume improvement.
    Comparable volumes: up 0.5% in core and noncore businessesSequential volume improvement: approximately 200 basis pointsAdjusted EBIT growth: 57% over last year on a constant currency basisAdjusted EBIT margin: 12.3%Adjusted EBIT margin (excluding noncore businesses): 13.3%
    		—35% constant currency—$352 million adjusted EBIT

    Operational metrics

    23
    Adjusted EBIT
    $836 million
    Q4 FY26

    Company-wide adjusted EBIT for the fourth quarter.

    Adjusted EPS impact from divestitures
    -$0.04unfavorable impact
    6 months ending December 31, 2026

    Unfavorable impact on adjusted EPS for the transition period due to divestitures completed to date.

    Baseline prior year adjusted EPS
    $1.79
    6 months ending December 31, 2026

    Adjusted EPS from the prior year period, adjusted for divestitures, used as a baseline for the transition period outlook.

    Adjusted EPS impact from synergy and operating performance
    $0.13 to $0.21positive impact
    6 months ending December 31, 2026

    Positive impact on adjusted EPS for the transition period from synergy capture and net operating performance.

    EBIT synergies
    $110 million
    6 months ending December 31, 2026

    Implied EBIT synergies contributing to the transition period outlook.

    Polyethylene price change
    $0.15came down
    June

    Polyethylene price reduction observed in June.

    Propylene price change
    came down
    June

    Propylene price reduction observed in June.

    Transaction-oriented restructuring costs
    $130 million
    FY26

    Portion of total Berry transaction and restructuring costs that were transaction-oriented.

    Integration-oriented restructuring costs
    $160 million
    FY26

    Portion of total Berry transaction and restructuring costs that were integration-oriented.

    Expected integration-related costs
    $50 million
    6 months ending December 31, 2026

    Expected integration-related costs for the transition period, significantly lower than prior year.

    Price realization
    $280 million
    Q4 FY26

    Price realization in Q4, largely offsetting inflation.

    Price/mix (excluding raw material pass-through)
    -1%consistent
    last year

    Consistent negative price/mix trend observed over the last year, excluding raw material pass-through.

    Capital expenditure as % of sales
    5%
    ongoing

    CapEx is roughly 5% of sales, considered steady and consistent to support growth initiatives.

    Adjusted EPS impact from interest and taxes
    -$0.10 to -$0.12unfavorable impact
    6 months ending December 31, 2026

    Unfavorable impact on adjusted EPS for the transition period due to higher interest and tax expense.

    Tax assumption (first half)
    16%
    first half of transition period

    Tax assumption for the first half of the transition period, returning towards a more normalized 19%.

    Depreciation reduction
    $30 million
    6 months ending December 31, 2026

    Modest decrease in depreciation expense during the 6-month transition period, impacting EBIT.

    Working capital impact from Middle East conflict
    $500 million
    FY26 cumulative

    Cumulative working capital impact, primarily accounts receivable driven, due to the Middle East conflict.

    Working capital recovery
    $100 million to $300 million
    next 6 months

    Expected recovery of working capital impacts from the Middle East conflict in the next 6 months.

    Core portfolio sales
    $21 billion
    full year FY26

    Total sales generated by the core portfolio for the full fiscal year.

    Core portfolio EBIT margin
    12.7%
    full year FY26

    EBIT margin for the core portfolio.

    Core portfolio EBIT dollar growth
    8%
    full year FY26

    EBIT dollar growth for the core portfolio, ahead of the total company.

    Focus categories share of core portfolio sales
    >50%
    current

    Six strategic focus categories (nutrition, healthcare, beauty & wellness) represent more than 50% of core portfolio sales.

    Volume assumption
    flat to very modestly up
    6 months ending December 31, 2026

    Volume assumption embedded in the adjusted EPS outlook for the transition period.

    Industry KPIs

    6
    MetricValueDetails
    Safety0.47
    Dividends$0.65USD per share
    Net debt leverage3.5x
    Volume production growth200 basis pointsbps
    End market demand drivers—
    Adjusted underlying EBITDA$1.045 billionUSD

    Deals & partnerships

    2
    BerryTransformative acquisition of Berry, strengthening diversified global portfolio.

    The acquisition created a stronger, more diversified portfolio with expanded product offerings, broader geographic reach, and enhanced capabilities in innovation and sustainability.

    Multiple unnamed partiesDivestiture of noncore businesses to sharpen focus on higher-return, higher-growth opportunities.

    A total of 5 divestitures were closed in the second half of fiscal 2026.

    Risks & headwinds

    3
    Working capital impact from Middle East conflictFY26

    $500 million cumulative impact on free cash flow

    Mitigation: Targeting recovery of $500 million over the next 12 months, with $100 million to $300 million in the next 6 months, through structural improvements in inventory, receivables, and payables.

    Higher interest and tax expense6 months ending December 31, 2026

    $0.10 to $0.12 per share unfavorable impact on adjusted EPS

    Mitigation: Offset by synergy capture and net operating performance, which is expected to provide a $0.13 to $0.21 positive impact to adjusted EPS.

    Macroeconomic backdrop and inflationQ4 FY26 and ongoing

    Rapid inflation experienced in Q4 FY26

    Mitigation: Highly coordinated efforts to secure supply, execute productivity initiatives, and take responsible pricing actions to fully mitigate inflationary pressures. Price realization of $280 million in Q4.

    What to watch in Q1 FY27

    5

    Working capital recovery from Middle East conflict

    next 6 months
    Current$500 million cumulative impact
    Target$100 million to $300 million recovered

    Why it matters

    Recovery of working capital is crucial for improving free cash flow and achieving deleveraging targets.

    As we mentioned, we expect to get the $500 million back over the next 12 months. The exact timing over the next 6 months, we certainly expect to make progress. So if you put that into the $100 million, $200 million, $300 million range. I think that's a fair assumption for this first 6 months, if you will.

    Q&A highlights

    5

    How much of the $500 million working capital impact from the Middle East conflict is expected to be recovered in the next 6 months, and what are the structural improvements planned?

    Management expects to recover $100 million to $300 million of the $500 million working capital impact in the next 6 months, with the full amount over 12 months. Structural improvements include specific goals for days of inventory, days sales outstanding, and increases in days payables.

    “As we mentioned, we expect to get the $500 million back over the next 12 months. The exact timing over the next 6 months, we certainly expect to make progress. So if you put that into the $100 million, $200 million, $300 million range. I think that's a fair assumption for this first 6 months, if you will.”

    asked by John Purtell · answered by Stephen Scherger

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Portfolio Optimization

    Amcor continues to optimize its portfolio, having closed 5 divestitures in the second half of fiscal 2026. This strategy aims to sharpen focus on higher-return, higher-growth opportunities within core businesses, driving sustainable growth in attractive categories and markets. The noncore businesses also showed improved year-over-year performance, reflecting strong operational execution.

    02

    Synergy Realization and Growth Opportunities

    The company exceeded its initial synergy expectations, realizing $285 million in FY26, 10% ahead of target. This was primarily driven by accelerated execution in G&A and procurement. Amcor has also achieved half of its 3-year growth synergy target with $140 million in new business awards, leveraging complementary product portfolios and expanded capabilities to unlock new opportunities, such as cross-selling closures to existing beauty and wellness customers.

    03

    Outlook for Calendar Year 2027

    Management expressed excitement for calendar year 2027, viewing it as the first 'clean' year post-Berry acquisition. The focus will be on core categories like nutrition, health, beauty, and wellness, which already constitute over 50% of sales. The combination of Amcor and Berry's broader product range, global reach, and innovation in sustainability is expected to drive outperformance versus market growth, building on current green shoots in protein and pet care.

    04

    Working Capital and Cash Flow Recovery

    Free cash flow for FY26 was impacted by $500 million due to the Middle East conflict, primarily affecting accounts receivable. Management targets recovering this amount over the next 12 months, with $100 million to $300 million expected in the next 6 months. Structural improvements in working capital are planned across inventory days, days sales outstanding, and days payables to support this recovery and achieve the leverage target.

    05

    Price-Cost Dynamics and Inflation Management

    Amcor successfully managed price-cost dynamics in Q4 FY26, achieving $280 million in price realization that largely offset inflation. This stability is expected to continue through the transition period. The company's ability to adapt to rapid inflationary pressures, particularly following the Middle East conflict, was highlighted as a testament to the organization's strong performance during the integration phase.

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