Amcor plc (NYSE:AMCR) Q2 2023 Earnings Call Transcript

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Michael Casamento: So below the leverage we took a $215 million gain, obviously, on the sale transaction. And then there were some costs just in relation to transferring a business. Some of Ukraine costs still to just transfer equipment, et cetera, in that. As we look forward, you’ll see the restructuring costs start to come through that will run through that line. But generally, the costs in relation to Russia are finished, yes.

Operator: We’ll take our next question from Brook Campbell-Crawford with Barrenjoey.

Brook Campbell-Crawford: Just on CapEx. It looks like a larger CapEx quarter. The December quarter, it looks like it’s about $94 million. Can you just remind us, I guess, what the expectations are for the full year? I think at the last result, it was $550 million to $600 million of CapEx was the expectation. So just an update on that one would be great and any reasons for the lighter investment period in the December quarter?

Michael Casamento: Yes. Sure. In terms of the half, we’re in around that $250 million. There’s a bit of FX in there as well versus prior year. So versus prior year, we’re running about 3%, 4% ahead. For the full year, the number of $550 million to $600 million still in the range of outcomes, we’re likely to be kind of that 5% to 10% ahead of prior year. And we’ve got — we continue to invest in the focus segments and the innovation platforms, which is where we’ve been focused on that investment. So no real change on the CapEx outlook, perhaps a little lower than where we were at three months ago, but pretty similar.

Brook Campbell-Crawford: And a follow-up, if I could, just around capital and the M&A strategy. Ron, if you wouldn’t mind just reminding us of the M&A strategy as it is today? And has it changed at all over the last couple of years. I guess I asked just because more recent investments seem to be focused on sort of fiber paper-type smaller deals like pull back in the one in China. You seem to be becoming a bit more substrate-agnostic. But just an update really on your M&A strategy will be fantastic.

Ron Delia: Yes. Well, look, I mean we are substrate agnostic. That’s been true of the Company throughout its history. And in fact, about 25% of what we do is either fiber or aluminum. But as far as M&A goes, no change, I mean we think there’s going to be good bolt-on opportunities across the portfolio. I think you see some examples this year with this health care acquisition in China MDK. Michael referred earlier to a plant we bought in the Czech Republic earlier in the year to bolster our Eastern European footprint. So we think there’ll be deals like that. I mean those are the deals that are out there because many of the companies in our space are small, and so we’ve got to be comfortable bolting on small businesses to our footprint.

That will be part of the mix. And then where we can supplement the portfolio, we would like to do that, too. I mean, certainly, in the priority segments that we’ve nominated, we’d like to continue to grow, health care being the one we’ve talked more about today. In Rigids, obviously, the hot fill space is one that we have a strong position in. But outside of beverage, there are opportunities for us to continue to grow as well. So, there’s a number of areas where we think the portfolio could be bolstered, but they’ll be bolt-on opportunities across the Flexibles and Rigids segment. So, no change to note.

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