Annual Report 2018 WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e Amcor Limited ABN 62 000 017 372 Contents 6 Message From the Chairman Annual General Meeting Note regarding non-IFRS financial information 7 Senior Executives The Annual General Meeting of Amcor 8 Message From the Managing Limited will be held at the Club Pavilion, Within this report, Amcor has included Director and Chief Executive Officer RACV Club, Level 2, 501 Bourke certain non-IFRS financial information. Street, Melbourne, Victoria at 10:30am This information is presented to assist 10 Amcor at a Glance (Melbourne time), Thursday in making appropriate comparisons with 12 Operating and Financial Review 11 October 2018. prior periods and to assess the operating performance of the business. Amcor Formal notice of the meeting is sent 31 The Board of Directors uses these measures to assess the to each shareholder. and Company Secretary performance of the business and believes 34 Directors’ Report Julie McPherson that the information is useful to investors. Company Secretary The following non-IFRS measures 54 Financial Report Amcor Limited have not been audited but have been 118 Directors’ Declaration About this report extracted from Amcor’s audited financial statements: 119 Independent Auditor’s Report Amcor’s Full Year Financial Report can be to Shareholders of Amcor Limited viewed on, or downloaded from, Amcor’s • Profit before interest and tax before 124 Statement of Shareholdings website www.amcor.com significant items (PBIT) • Profit before interest, tax, depreciation 126 Statistical Summary With sustainability playing a key role in and amortisation before significant Amcor’s business plan, all publications are items (PBITDA) 128 Investor Information available online. You can help save paper 130 Financial Calendar by downloading the electronic version of • Significant items Amcor’s publications. • Profit after tax before significant items 131 Senior Management (PAT) and Corporate Directory If you previously requested a printed report but no longer require it in printed • Average funds employed 132 US Legal Considerations form, please advise Link Market Services Performance measures such as Earnings in writing of changes to your report Per Share, Operating Margins and Return mailing preferences, or update your details on Average Funds Employed have been online at www.linkmarketservices.com.au calculated using the non-IFRS measures Contact details for Link Market Services listed above. are provided in the back of this report. In this report, ‘the year’, ‘2017/18’, ‘2018’, ‘FY18’ and ‘fiscal 2018’ refer to the financial year ended 30 June 2018. ‘2016/17’, ‘2017’, ‘FY17’, ‘fiscal 2017’ refer to the financial year ended 30 June 2017. All references to dollars are references to US dollars unless otherwise stated. The Financial Report was authorised for issue by the Directors on 21 August 2018. The Directors have the power to amend and reissue the Financial Report. WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e Amcor Annual Report 2018 1 We are a global leader in developing and producing high-quality, responsible packaging for a variety of food, beverage, medical-device, pharmaceutical, home and personal-care and other products. WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e 2 Amcor Annual Report 2018 Food Protecting food – assuring it is at its most flavourful and nutritious, and accessible to people worldwide. Home care Helping people around the world easily and safely keep their homes and businesses clean and welcoming. WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e Amcor Annual Report 2018 3 Beverages Making sure drinks of all kinds are bottled efficiently and responsibly, and arrive fresh and refreshing. Healthcare Assuring medical equipment is sterile and medicines are dispensed accurately, so that patients become and stay healthy. WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e 4 Amcor Annual Report 2018 Pet care Caring for pets with products that are simple to dispense, re-seal and store, maintaining freshness and minimising odours. Personal care Maintaining quality and performance of fragrances, cosmetics and other products, so consumers look and feel their best. WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e Amcor Annual Report 2018 5 Ecommerce Protecting the products that consumers want, in a way that’s optimised for the supply chain and the environment. Sustainability Better protecting the environment because of Amcor’s leadership in operations and packaging. WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e 6 Amcor Annual Report 2018 Message from the Chairman Amcor has an obligation to help assure the safety of our employees, customers and suppliers; the consumers who use our packaging; and the communities where we operate. Dear Shareholder, The ratio of incidents that required operations, which set Amcor on the path medical treatment, also per million hours to becoming a global packaging supplier, After several strong years, fiscal 2018 worked, was 2.6, representing a little over is comparable. was a trying one for our industry and 200 cases. On both counts, we compare for Amcor. Marketplace conditions were We believe the cash- and tax-free favourably with similar companies, but relatively difficult, with higher raw- characteristics of the planned acquisition, the only acceptable rate is no injuries – material prices as well as soft demand along with the combined financial an accomplishment recorded by more volumes and unfavourable product mix profile and liquidity of the companies, than 100 of our locations last year. in some areas. are compelling for Amcor and Bemis The board’s ultimate responsibility shareholders. We hope to complete At the same time, the year underscored to shareholders is to assure superior the transaction in early calendar year two fundamental reasons why we remain returns over time. Amcor’s consistently 2019, after securing investor and certain very positive about Amcor’s strategy: strong cash flow helps make that regulatory approvals. 1) the defensive nature of our business possible, funding a value-creation and 2) the leadership strength and Among many benefits, the combination model comprising three elements: adaptability of the Amcor team. of Amcor and Bemis will extend our 1. Dividends – In FY18, the board leadership in sustainability, and builds Overall, our financial results were solid. authorised dividends of US 45.0 on a commitment made in January to Revenue (USD 9.3 billion), profit after cents per share, an increase of 4.7% develop all our packaging to be recyclable taxes (USD 724 million) and earnings representing 72% of EPS and a yield and reusable by 2025. We are proud per share (EPS, US 62.6 cents) were of 3.6%. of the evolving environmental profile of all comparable to fiscal 2017 levels in Amcor’s operations and products. Setting constant-currency terms. Our free cash 2. Capital Expenditures – Typically and fulfilling even higher ambitions will be flow (USD 194 million) was again strong, about USD 400 million each year, good for society and good for business. and Amcor’s balance sheet remains to organically maintain and grow the investment-grade. business, and expand earnings. We would like to thank all shareholders for your continued support. This is a time The company benefited from 3. Acquisitions and/or buybacks – of great opportunity for Amcor. Your accelerated realisation of efficiencies in Usually representing USD 200 million board is very confident in your company’s our flexible-packaging business following to USD 300 million each year. strategy, in its people, and in its ability to the 2016 acquisition of Alusa, which There is no cash required for what will generate value for all stakeholders as we expanded Amcor’s presence in South be the company’s largest acquisition move into this exciting period. America. Recently we have initiated to date. In early August, five weeks after further projects in the rigid-containers the end of the fiscal 2018 financial year, business to reduce costs and secure we announced that Amcor would acquire future earnings growth. Bemis, the largest supplier of flexible Your board and management also have plastic packaging in the Americas, in an Graeme Liebelt a strong focus on non-financial goals. all-share transaction. Chairman of the Board Amcor has an obligation to help assure This combination will be transformational, the safety of our employees, customers making the new Amcor the global leader and suppliers; the consumers who use in consumer packaging. We will have our packaging; and the communities the footprint, scale and capabilities to where we operate. drive significant value for customers, Our rate of time lost to injuries during shareholders and employees, and deliver FY18 was 1.0 day per one million hours the most sustainable primary packaging. worked, which represents about 80 For strategic significance, only our 2010 such cases across some 200 locations. purchase of Alcan’s consumer-packaging WorldReginfo - 5fe480fb-4215-47cc-89d8-7d258b05277e Amcor Annual Report 2018 7 Senior Executives Ron Delia Michael Casamento Tom Cochran Managing Director and Executive Vice President, Finance, President, Chief Executive Officer and Chief Financial Officer Amcor Flexibles Americas Jerzy Czubak Steve Keogh Peter Konieczny President, Executive Vice President, President, Amcor Flexibles Europe, Amcor Specialty Cartons Human Resources Middle East and Africa Julie McPherson Michael Schmitt Tracey Whitehead Group General Counsel President,