Results for six months ended December 31, 2009

Amcor announces interim profit result for six months ended 31 December 2009.

23 February, 2010:

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Highlights

• Profit after tax and before significant items of $172.5 million up 3.0%
• On a constant currency basis profit after tax and before significant items increased 12.8%
• The negative impact from translation of overseas earnings to Australian dollars on profit after tax and before significant items was negative $16.4 million
• Operating cash flow of $144.5 million
• Significant items, primarily relating to the acquisition of Alcan Packaging businesses and planned restructuring, were an after tax loss of $77.5 million
• Acquisition of the Alcan packaging businesses completed on 1 February 2010

 In announcing the result, Amcor’s Managing Director and CEO, Mr Ken MacKenzie said: "The half year result was particularly pleasing given economic conditions were considerably weaker than the previous comparative period.

"More than 80% of our sales are into the food, beverage, healthcare and tobacco packaging segments and the defensive nature of these segments was evident during this period of economic weakness.

"Excellent management of costs across all the businesses helped offset the impact of lower volumes in some sectors and on a constant currency basis profit before interest and tax for the half was up 3.1%.

"The Rigid Plastics business achieved a solid result with an improved performance in Latin America offsetting lower volumes in North America.

"The Australasian business performed well with the benefits from restructuring and improved operational performance delivering higher earnings than the same period last year.

"Within the Flexibles group the healthcare and tobacco packaging operations had particularly strong performances with volumes resilient to slowing economic conditions. The food flexibles business experienced lower volumes which were, in part, offset by lower costs and improved operating efficiency.

Alcan Packaging Acquisition

Mr Ken MacKenzie said: “Having spent four years developing our core capabilities and focusing the portfolio of businesses, the opportunity to purchase Alcan Packaging could not have come at a better time.

"Not only were we well prepared to embark on this next phase of growth, but we were able to acquire the business at bottom of the cycle earnings and at a bottom of the cycle multiple.

"The detailed integration planning undertaken over the past six months has ensured a smooth initial transition.

"We remain confident of achieving $200 to $250 million in cost synergies relating to overhead cost reductions, procurement cost savings and improved operational efficiencies.

"A clear benefit from this acquisition has been the addition of a talented management team from the former Alcan Packaging.

"There is no doubt that this acquisition is an exciting opportunity for Amcor and one we believe will create substantial shareholder value.

Summary and Outlook

"In summary, although economic conditions in many countries remain difficult, Amcor businesses delivered solid earnings and an outstanding cash flow performance in the first half.

"Even though it is unclear when economies will improve, the Alcan acquisition gives us confidence we can grow shareholder value through the ability to enhance our value proposition to customers, improve our operational performance and reduce costs."

 

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