Amcor plc SEC 10-K Report

Amcor plc, a global leader in responsible consumer packaging and dispensing solutions, has released its annual Form 10-K report for the fiscal year 2025. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the market. The merger with Berry Global Group, Inc. has been a significant event for the company, influencing various aspects of its performance and future outlook.

Financial Highlights

• Net Sales: $15,009 million, reflecting a 10% increase from the previous fiscal year, driven by the merger with Berry Global Group, Inc. and higher raw material costs.
• Gross Profit: $2,834 million, representing a 4% increase from the prior year, primarily due to the merger and higher sales volumes, although the gross profit margin decreased to 18.9% from 19.9% due to amortization of merger-related inventory step-up.
• Operating Income: $1,009 million, a decrease from $1,214 million in the previous year, impacted by increased restructuring, transaction, and integration expenses related to the merger.
• Net Income Attributable to Amcor plc: $511 million, down 30% from the previous year, mainly due to higher expenses associated with the merger and increased interest expenses.
• Diluted EPS: $0.320, a decrease of 37% from the previous year, influenced by the decline in net income and an increase in the diluted weighted-average number of shares outstanding due to the merger.

Business Highlights

• Business Overview: Amcor plc is a global leader in developing and producing responsible consumer packaging and dispensing solutions across various materials for nutrition, health, beauty, and wellness categories. The company focuses on sustainability, innovation, and customer-centric strategies to drive growth and value creation.
• Merger with Berry Global Group, Inc.: On April 30, 2025, Amcor completed its merger with Berry Global Group, Inc., a global manufacturer of rigid and flexible packaging products. This strategic merger is expected to enhance cash generation, enabling increased investment in organic growth, targeted acquisitions, and enhanced shareholder returns.
• Segment Information: Amcor operates through two reportable segments: Global Flexible Packaging Solutions and Global Rigid Packaging Solutions. The Global Flexible Packaging Solutions segment accounted for approximately 72% of consolidated net sales, while the Global Rigid Packaging Solutions segment accounted for approximately 28% in fiscal year 2025.
• Global Flexible Packaging Solutions: This segment develops and supplies flexible packaging globally, employing approximately 42,000 employees across 210 facilities in 36 countries. It is one of the world's largest suppliers of polymer resin, aluminum, and fiber-based flexible packaging.
• Global Rigid Packaging Solutions: This segment manufactures rigid packaging containers, closures, dispensing and pharma devices, employing approximately 34,000 employees across 213 facilities in 34 countries.
• Sustainability and Innovation: Amcor is committed to sustainability, with a goal to make all packaging recyclable, compostable, or reusable by 2025. The company has increased its target for recycled materials usage to 30% by 2030 and invests approximately $180 million annually in R&D to drive innovation.
• Geographical Performance: Amcor's operations span over 400 locations in more than 40 countries, with significant presence in Europe, North America, Latin America, and the Asia-Pacific regions. The company leverages its global scale to deliver value and meet customer needs across diverse markets.
• Future Outlook: Amcor aims to achieve approximately $530 million in pre-tax synergies from the merger with Berry by the end of fiscal year 2028, focusing on procurement, supply chain, and administrative savings. The company is also targeting $60 million in annual financial synergies and $60 million in pre-tax earnings benefits from growth synergies.

Strategic Initiatives

• Strategic Initiatives: Amcor completed a significant strategic initiative by merging with Berry Global Group, Inc. for a purchase consideration of $10.4 billion, excluding assumed debt. This merger aims to create a global packaging leader with enhanced capabilities and market reach. The company initiated the 'Berry Plan' to integrate the combined organization, targeting $530 million in pre-tax synergies by fiscal year 2028.
• Capital Management: Amcor issued $2.2 billion in senior notes to finance the merger with Berry and repaid $2.2 billion of Berry's debt. The company maintained a revolving senior bank debt facility with an aggregate limit of $3.75 billion, with $1.70 billion drawn. Amcor paid $845 million in dividends in fiscal year 2025 and did not repurchase any shares under the buyback program, which expired during the third quarter of fiscal year 2025. The company also managed its capital structure to maintain investment-grade credit ratings.
• Future Outlook: Amcor plans to continue focusing on realizing synergies from the Berry merger, with a target of $530 million in pre-tax synergies by fiscal year 2028. The company expects to fund its operations and capital expenditures through cash flows from operating activities and available credit facilities. Amcor aims to maintain flexibility in its funding structure and manage liquidity risk by maintaining undrawn committed liquidity and spreading the maturity dates of long-term debt facilities.

Challenges and Risks

• Integration Challenges: The merger with Berry Global Group, Inc. introduces integration challenges, including harmonizing operating practices and retaining key personnel, which could impact the company's ability to achieve anticipated synergies and growth opportunities.
• Merger-Related Risks: The company faces significant risks related to the successful integration of Amcor and Berry, including potential disruptions in business operations, higher than expected integration costs, and the inability to realize anticipated merger benefits such as cost savings and synergies.
• Financial Risks: Substantial merger costs are expected to continue, including restructuring and integration expenses, which may not be offset by strategic benefits in the near term. The company's increased indebtedness post-merger may limit financial flexibility, increase borrowing costs, and potentially lead to a downgrade in credit rating, affecting financial condition and results of operations.
• Market and Consumer Risks: Changes in consumer demand, driven by economic conditions, regulatory developments, and environmental concerns, could lead to a decline in demand for certain products, impacting sales and profitability. The company is exposed to significant competition, which could adversely affect its market position and financial performance.
• Operational Risks: Operational risks include global economic conditions, geopolitical tensions, and supply chain disruptions, which could negatively impact business operations and financial results. The company is subject to various international risks, including changes in fiscal or regulatory regimes, trade restrictions, and geopolitical events, which could adversely affect operations and financial results.
• Management Strategies: Management is focused on addressing integration challenges from the merger with Berry by dedicating significant resources to harmonizing practices and retaining key personnel to achieve anticipated synergies. The company has implemented a hedging policy to manage foreign exchange rate risk, but effectiveness is not guaranteed.

SEC Filing: Amcor plc [ AMCR ] - 10-K - Aug. 15, 2025