Amcor (AMC) This morning, the world’s largest consumer packaging company announced their results for the full year of 2023, which came in below market consensus due to a more challenging macroeconomic environment. The Core Portfolio has a 4.8% weight, with the Income Portfolio a 4% weight to AMC.

  • Profits Down: Full year profits were down 9% to US$1.1 billion as the destocking of consumer staples products continues to weigh on demand for Amcor’s packaging business and a stronger USD impacted earnings made in Asia and Europe. Flexible packaging saw sales up 1% for the year due to 5% increase in prices but was offset by 3% lower volumes. Rigid packaging noted net sales down 3% due to slower volume demands and customer destocking but was partially offset by 8% price growth.
  • Inflation and Cost Savings: AMC has managed inflation well as expected, with contracts structured to automatically pass through US$1.1 billion in increases in resin, plastic films and aluminium over the year. On top of this, AMC announced they were able to reduce some of their costs by $200 million, as well as $50 million more in cost savings over the next two years.
  • Dividend Up: The full-year dividend of A$0.74 per share, up +13% on 2022. For Australian investors, the AUD has weakened against both the USD and EUR over the past year, so both profits and dividends for our investors are up.
  • Why is the stock off? On the call, management announced that they are still seeing demand weakness across all of their products, citing that they expect revenue to fall in the low single digitals in the first half but will see a rotation back to growth in the latter half of the year after the Russian plant sales have rolled off. Exiting Russia, while politically the right thing to do, reduced profits by 4%.
  • Guidance: AMC guided to US 67-71 cents per share of earnings for FY24, equating to adjusted free cash flow of US$850-950 million with a US$70 million share repurchase program to be completed by the end of this calendar year.


Portfolio Strategy: Amcor is the largest global packaging company with operations in 43 countries. While packaging is not the most exciting of industries, Amcor exposes the Portfolio to global growth in consumer and medical goods and manufacturer demands for increasingly sophisticated packaging, particularly recyclable packaging, which attracts a premium price. 95% of AMC’s customer base is in consumer staples, such as packaging for meat, cheese, sauces and condiments, beverages, coffee, pet food, healthcare and personal care products, all of which have stable defensive characteristics. AMC trades on a PE of 12.7x with a quarterly yield of 5.2%

AMC finished down -2.9% to $14.17.