Ladies and gentlemen, thank you for standing by, and welcome to the Amcor Third Quarter 2021 Results Conference Call. I would now like to hand the conference over to our speaker today, Tracey Whitehead. Please go ahead. Thank you, operator. I'd like to welcome everyone to Amcor's third quarter earnings call for fiscal 2021. Joining the call today from Amcor's side is our Chief Executive Officer, Ron Delia, and Chief Financial Officer, Michael Casamento. At this time, I'll direct your attention to our website, amcor.com, under the investor section, where you'll find our press release and presentation, which we will discuss today. We'll also discuss non-GAAP financial measures and related reconciliations can be found in those documents on our website. As a reminder, the call today includes some forward-looking comments which remain subject to certain risks and uncertainties. Please refer to our SEC filings to review factors that could cause actual results to differ materially from what we're discussing today. With that, I'll hand over to Ron. Thanks, Tracey, and thanks, everyone, for joining us today to discuss Amcor's year-to-date results. Joining me on the line, as Tracey indicated, is Michael Casamento, our Chief Financial Officer. We'll begin with some prepared remarks and then open the line for Q&A. Starting on slide three, we begin every meeting at Amcor with safety, so we'll start today with safety as well. This year our safety performance has been a real highlight. Across Amcor, we've reduced the number of injuries by almost 30% in the first nine months of the year, and all of our business groups reported fewer injuries, with over half of our sites remaining injury-free for the last 12 months or more. Of course, over the last year, we've also been equally focused on keeping our coworkers healthy as well as safe. As the COVID pandemic continues to present challenges in many countries, maintaining our protocols and our vigilance remains a top priority for our teams around the world, who also understand the critical role we play in helping maintain availability of essential healthcare and food products. Given the continued challenges of navigating the pandemic, we're particularly pleased with our safety performance so far this year, and we remain confident that our objective of no injuries is in fact possible. Our key messages for today are set out on slide four. First, our year-to-date financial results have been strong and ahead of expectations, with organic momentum continuing through the year, such that the March quarter has been our strongest thus far this year, despite the operating environment remaining dynamic and volatile, maybe even more so over the last few months. Our teams have navigated that volatility by demonstrating an exceptional ability to stay focused on the key business drivers within our control, to respond quickly as conditions change, and to execute to deliver results despite the circumstances. The second message here is that this strong performance translates into higher expectations for the 2021 fiscal year, and we've raised our outlook for full-year EPS growth to 14%-15% on a constant currency basis. Third, we're actively investing in several growth initiatives, which illustrate the range of opportunities we have over the medium term to maintain our momentum. The strong results, increased guidance, and growth investment examples demonstrate the strength of our investment case, which I'll touch on briefly on slide five before turning to the results in more detail. The Amcor investment case is set out on slide five, and it's one we've shared a few times this year. We believe the investment case is as strong as ever. This slide sets out the reasons why, including our global leadership positions, consistent growth from attractive end markets, a strong balance sheet, and significant annual cash flow of more than $1 billion and growing to fund growth investments and dividends. Lastly, momentum's been building, which you can see in our upgraded guidance, and we believe that will continue. Looking ahead into fiscal 2022, we'd expect EPS growth to benefit from continued organic growth, additional synergies from the Bemis acquisition, a lower share count after the repurchases during FY 2021, and the value that will be created from the $300 million-$400 million of free cash flow that will remain after CapEx and dividends. The Amcor investment case has not changed, and that's part of the message here today. Despite volatility in our operating environment, and maybe even more so because of that volatility, the Amcor investment fundamentals remain very attractive and will continue to generate total value of 10%-15% each year across EPS growth and dividends. Slide six includes the actual outcomes of that investment case over the last decade. Over this period, we've always maintained an investment-grade capital structure. We've delivered consistent sales and profit growth, including margin expansion organically through multiple economic and commodity cycles. We've consistently paid out a compelling dividend. That growth and yield has been supported by best-in-class free cash flow conversion and return on invested capital, which have also contributed to strong total returns to shareholders as well. Organic growth has always been a key driver of our overall financial performance. That will become increasingly evident going forward. Slide seven highlights three of the key organic growth drivers for Amcor. The starting point on the left is the set of growing end markets we serve around the world. Amcor has substantial positions in several higher growth, higher value add, more packaging-intensive segments like healthcare, protein, and premium coffee, or hot-fill beverage containers and barrier films. In each of these segments, market growth tends to track higher than average, and in each one, we have differentiated positions, scale positions, differentiated products, and global leverage opportunities. Second, emerging markets will also continue to be a key source of organic growth for Amcor. We've got a scale emerging markets portfolio with over $3 billion in annual sales from 27 profitable emerging market businesses, where we benefit from leadership positions and differentiated capabilities, and where we have a long history of profitable growth. Third, growth enabled by innovation, which is an area where we continue to differentiate ourselves from competition, and we're investing to extend that lead. All of our businesses go to market with world-class innovation and R&D capabilities, which are increasingly valued by our customers as they look for packaging to meet shifting consumer needs around the world, particularly around sustainability, which I'll come back to in a minute. We're also allocating capital and actively investing for growth in a number of areas, slide eight shows two examples. First, the example on the left. Within a few weeks, we will expect to begin commissioning a major capacity expansion for one of our aluminum-based product segments at a flexible packaging plant in Switzerland. Now, this investment will support the continued high growth of the premium coffee segment and is underwritten by a long-term supply agreement with a key customer. We've made a number of similar investments over the years, and several recently, where we have real long-term partnerships with higher growth customers who value the various ways Amcor can help them grow. In the other example on the right-hand side of the slide, in the last quarter, we began construction of a new greenfield plant in China to add capacity to our business in that high-growth market, where we already maintain a leadership position and healthy financial profile. The new state-of-the-art plant will be the largest in Amcor's China network and will start up by the end of calendar 2022 to support a range of global and local customers, primarily in the food and personal care segments. Turning to slide nine. Last week, we announced a corporate venture-type investment in ePac, a relatively new startup in the flexible packaging space who has leveraged technology and a unique business model to grow to $100 million in sales in just over 4 years. Now, as excited as we are to work with ePac, the key point of this slide is to make clear our intentions to do more with regard to open innovation and corporate venturing generally so that we can complement our internal innovation capabilities with great external ideas from all around the world. We're looking forward to exploring opportunities across new packaging products, processes, and business models, We'll be much more systematic and purposeful in this area. Moving to slide 10. It remains very clear to us that our best and most exciting opportunity for growth and differentiation will come from the development of more sustainable packaging. More sustainable packaging means responsible packaging, starting with better package design. On that dimension, which needs to take into account the full product life cycle, there's no one better positioned in the industry than Amcor, and we're demonstrating that with a steady stream of new product platforms and launches around the world. Waste management and consumer participation will be equally important and both require close collaboration with others across our value chain. Amcor has been actively partnering with others in both areas to drive scalable solutions and real impact, and I'll describe some of the progress we're making on the next slide. The Kit Kat example on the left is a great one because it demonstrates the potential for Amcor to use chemically recycled resin in food-grade flexible packaging. It also highlights the level of collaboration that's possible across the full value chain to make it happen, in this case, in Australia. In the middle is AmSky, which is a breakthrough innovation launched by Amcor just last week. Amcor created the world's first recycle-ready thermo form blister packaging by eliminating PVC without compromising functionality or the consumer experience. AmSky is an exciting development which has the potential to transform the sustainability profile of healthcare packaging, particularly for solid dose pharmaceuticals. It also highlights the potential to eliminate PVC in other packaging segments as well. The example on the right-hand side of the slide is another one that brings to life the concept of responsible packaging with a real example in practice, in this case in the U.K. The supermarket rollout of this rice product in a recycle-ready microwavable pouch made with Amcor's HeatFlex technology coincided with a number of U.K. retailers announcing in-store trials to collect and recycle flexible packaging. This one demonstrates that responsible packaging design enabled by Amcor can catalyze change and motivate progress on the waste management and consumer participation requirements as well. Finally, in March, Amcor also took an executive committee role in the Alliance to End Plastic Waste, a group whose mission is fully aligned with our vision for responsible packaging through design, infrastructure, innovation, and consumer participation. Turning now to a summary of our results on slide 12. The business has delivered strong year-to-date earnings growth, with EPS up 16% on a comparable constant currency basis. Of that EPS growth, 7% was organic, as overall demand for our products has remained healthy and, combined with outstanding execution, has resulted in organic growth continuing to build each quarter. 6% of the EPS growth comes from incremental Bemis acquisition synergies, which have reached $55 million so far this fiscal year. We continue to progress ahead of initial expectations, and we're well-positioned to deliver at least $180 million of synergies by the end of fiscal 2022. The remaining 3% EPS growth reflects benefits from share repurchases in fiscal 2020 and 2021. Free cash flow and the balance sheet continue to be strong and in line with our expectations, and we've returned more than $850 million so far this year of cash to shareholders through higher dividends and share buybacks. The key message here is that we're executing very well, building momentum, delivering strong growth and cash returns to shareholders. With that, I'll hand over to Michael to provide some further detail. Thanks, Ron, and hi, everyone. Starting with the Flexible segment on slide 13. Overall sales were 1% higher than the prior year, and this was all driven by higher volumes. Demand has remained relatively broad-based, with growth in North America, Latin America, and the Asia Pacific regions, while Europe was in line with last year. Through the last nine months, we've consistently seen solid growth across a broad range of end markets, including in high-value end markets like protein, coffee, cheese, and pet food. This has been partly offset by lower healthcare volumes driven by fewer elective surgeries and lower prescription trends, which began back in the June quarter of 2020. Adjusted EBIT has grown 9% in constant currency terms and margins expanded by 110 basis points, reflecting volume growth, $45 million of cost synergy benefits, and strong cost performance and management. It's worth noting here that increases in raw materials have remained manageable given the diversity of the materials we buy and the multiple regions in which we consume those materials, combined with the strong commercial capabilities that we have built for over a decade as part of the Amcor Way. The business also continues to extract the financial and strategic benefits from the Bemis acquisition, which is covered on slide 14. We acquired a high-quality, well-invested business, which has delivered consistent earnings growth since the date of the acquisition. In terms of cost synergies, our teams have done a great job of delivering benefits from overhead reduction, procurement, and by optimizing our footprint. Year to date, we've delivered $55 million of benefits, and we continue to expect this will increase to approximately $70 million for the full year. At the end of fiscal 2021, cumulative benefits will have reached $150 million, and we expect to deliver at least $180 million of total cost synergies by the end of fiscal 2022. It's also exciting to see examples of collaboration across the regions as we leverage our capabilities and differentiated product offerings to support customer growth. For instance, our business in China, Australia, and Brazil have all secured differentiated packaging for protein and pet food applications from other Amcor regions across the globe. There are many examples like this and more in the pipeline to come through. Turning to Rigid Packaging on slide 15. In summary, the business has continued to deliver outstanding results driven by strong consumer demand. Sales growth included a 4% increase in volume as well as a 3% price mix benefit, including higher pricing to recover cost inflation in Latin America. In North America, year-to-date beverage volumes are 7% higher than last year, and hot fill container volumes are up 13%. We have seen another quarter of strong consumer demand for PET packaged beverages, particularly in hot fill categories including juice, ready-to-drink tea, and sports drinks. This strong demand has filled capacity across our network and reflects higher consumer demand, innovative brand extensions, and new product launches and formats. Year-to-date, specialty container volumes were higher than the prior period, with growth in certain categories including spirits, personal care, and home cleaning. Volumes in Latin America were also 2% higher than last year, with growth delivered in Brazil, Central America, and Argentina. The EBIT growth of 9% reflects higher volumes and favorable mix across the business. Pardon the interruption. Mr. Casamento's line is disconnected. I don't know if it's disconnected, operator. Just give us a second here. We'll see if we can get him back on. Operator, I'll pick it up from here. It's Ron Delia. I'll just pick up from where Michael left off. Michael was just summarizing the Rigid Container story, Rigid Packaging segment. Sorry about that for those on the line. I think he was just updating on the specialty container volumes, which were higher than the prior period, with growth in a number of categories. Volumes in Latin America 2% higher than last year, with growth particularly in Brazil, Central America and Argentina. EBIT growth in the segment of 9% reflects that higher volume and favorable mix across the business, partially offset by higher labor costs and transportation costs as well. Rigid containers, it's rapidly become evident, the preference for rigid containers, given their recyclability, light weight, resealability, and hygiene profile, as well as having the lowest carbon footprint. The business has continued to benefit from these trends. We've doubled the use of PCR, post-consumer recycled resin, over the last two years, even while navigating the pandemic. We continue to launch new products made of 100% PCR. In fact, today, almost all of our sites in North America are converting PCR along with virgin resin. We move on to slide 16. Adjusted free cash flow of $360 million was in line with prior year. However, this includes approximately $50 million of U.S. cash tax payments deferred under the CARES Act in the Q4 of FY 2020. Excluding that timing variance, adjusted free cash flow is approximately 10% higher than last year and is in line with our expectations. Our financial profile is solid. Leverage is at three times on a trailing 12-month EBITDA basis. This is lower than last year and in line with what we'd expect at the end of the March quarter, given the seasonality of the cash flows in the business. With strong annual cash flow and a strong balance sheet, the business has significant capacity to invest as well as to return a substantial amount of cash to shareholders as we have this year already, through a growing dividend and further share repurchases. In fact, in nine months so far this year, we've returned over $850 million to shareholders. Turning to slide 17, which is the outlook slide. You'll find the latest view here, which is a revised or an increased outlook for the year. The continued strong performance of the business and the organic momentum that has been building gives us the confidence to raise our 2021 full-year guidance. We expect constant currency EPS growth of 14%-15% for the full year, which is comparable to and higher than the 10%-14% guidance provided in February and includes an unfavorable EPS impact from businesses we've disposed of over the last 12 months of approximately 1%. To be clear, the constant currency EPS growth for this year would have been 15%-16% had the disposals not occurred. In terms of cash flow, we continue to expect adjusted free cash flow between $1 billion- $1.1 billion. In closing today, on slide 18, Amcor has delivered a strong result ahead of expectations, and organic momentum has continued. This has translated into higher expectations for the full year, and we've raised our outlook for fiscal 2021. We're actively investing in the future, and these investments, along with strong execution, will enable continued momentum and reinforce our belief that the Amcor investment case has never been stronger. Operator, with that, we've finished our opening remarks, and we're happy to open the line for questions. Thank you. Just as a reminder, in order to ask a question, you will need to press star one on your telephone keypad. If you wish to withdraw a question, it's the pound key. In the interest of time, we'd like to remind participants to limit their questions to two and then rejoin the queue for any follow-ups. Your first question will come from George Staphos of Bank of America. Please go ahead. Hi. Thanks for taking my question. How are you, Ron? Hey, George. Appreciate all the details. Hey, two questions, both really around volume. I guess first off, it seems like every week we get another press release from Amcor. This is a high-class problem in terms of another new product. Is there a way you could give us some form of a vitality index or some approximation, how much of your sales right now or volumes are coming from products that you hadn't created, produced 2 years ago, 3 years ago, whatever timeframe you want to use? That's question number one. Then question number two, recognizing you prefer to look at things on a year to date basis, a yearly basis. When we do some reverse engineering of the press releases, this quarter versus last quarter, it looks like Flexibles saw a little bit of a slowdown. Volumes might have been flat to slightly down. Can you give us some perspective in terms of what was happening in the third quarter? Yeah by market and some key products? Thank you. Yeah. Look, good questions, George. Look, on the vitality index, it's not a measure that we use pervasively inside the company. I think what we're really focused on is launching products that are commercializable and will have take-up in the market, and then tracking the sales of each of those, none of which are material to the group per se. We think it's important to continue to demonstrate the vitality of our innovation pipeline, because ultimately that will contribute to the positive mix and the positive margin that we want to drive in the business. The ultimate vitality index for us is the margin expansion that we've generated period after period after period for well over 10 years now. That's the vitality index, because what it says is that each new product that we sell today is a higher margin product than the unit it's replacing from prior periods. That's maybe the roundabout way of answering your first question. On Q3, we'll talk about Q3. We do tend to focus on the full year to try to orient the conversation to the longer term. That being said, the third quarter was our strongest quarter of the year on a number of dimensions. We had increasing organic momentum, profit momentum across both Rigid and Flexibles. We're really pleased with the execution because the environment in the fiscal third quarter for us from an operating perspective was probably as difficult as it's been so far this year. As it relates to the sales side of things, yeah, look, I think these businesses, both Rigid and Flexibles, will generate low single-digit growth over the long term. I think that's roughly where we've been, where we were through six months. That's likely where we'll be at the end of the fiscal year. The 90-day period that was Q3 was a little bit softer in Flexibles, particularly because of the ongoing weakness in the medical device packaging and pharmaceutical packaging. More or less, we're consistent with our long-term trends in both businesses for this fiscal year at sort of low single digits. Okay. Thank you. Your next question will come from Ghansham Panjabi of Baird. Please go ahead. Thank you. Hi, Ron. Hi, everybody. Ron, just kind of following up on George's question in terms of the cadence of volumes as we look ahead. Some CPG companies, as they reported, have talked about an abrupt sort of shift in terms of volumes as you cycle through tougher comps from a year ago. Mobility in certain parts of the world is starting to increase, in North America, for example. Can you just sort of give us a real-time pulse as to what you're seeing so far in your 4Q, and then how exactly you expect volumes to sort of evolve over the next two to three quarters? Yeah. Look, good question. Last year at this time, we would've been describing pretty much a neutral impact from COVID, and that carried through then to the fourth quarter of FY 2020, and that's pretty much been our experience. That's because of the geographic diversity of the business. Last year, our Q3 would've seen a real strong negative impact in Asia, particularly in China, which is a business that generates a lot of growth for us. We would've seen softness in other parts of the business compensating for some of the better sales in North America in the month of March last year, as an example. The net of all that last year wasn't really much. As we think about cycling comps this year, including the result that we're reporting today, there's really not much in it in terms of variation period to period related to COVID. That's the perspective that I would offer looking forward as well. Our Q4, as I said, to respond to George's question, it will be back at the end of this fiscal year, and we'll be in the low single digits, which is where we would expect to be on any given year. It's not the sexiest answer I could give you, but it's the reality of the diversified portfolio that we're operating. Understood. For my second question on raw materials, your favorite question, I'm sure. With the reflation dynamics that we saw in the U.S. coming into this year and then Winter Storm Uri, just give us a sense as to how you're navigating pricing in context of just significant cost inflation on the resin side, plus logistics, et cetera. What's different, if anything, post Bemis in terms of how your commercial guys are tackling higher cost inflation? Look, it's a good question. It's obviously a key topic this period. First thing I would say is that this isn't new, right? These are commodity cycles that we experience every few years. If we look back over the last 10 years or so, it's probably maybe the third or fourth real pronounced spike that we've seen in our input costs. It's not new. It's something you deal with periodically. The way we navigate it is with lots of rigor and lots of precision, and I would say that that rigor and that precision improves every time we go through one of these cycles. I think that whether it's the shortening the pass-through lags on contracts, whether it's expanding the coverage of the materials that are subject to rise and fall mechanisms, and the like, I just think we get better at it with each year. I can go back to each of those cyclical peaks over the last decade and kind of point to things that we've learned and that we've added to the toolkit so that the next time, the experience is less impactful. I think that's what we're seeing now. Obviously, we're warring a headwind like everyone else, but it's not material enough to distort the results, and it's certainly not holding back our expectations for the fiscal year. I think with Bemis, maybe Bemis is a segue into another dimension to this question, which is the diversification of our spend, which only got further enhanced or further diversified with the Bemis acquisition. Obviously, if we take the two business segments, you've got rigid packaging, which is largely PET-based, which operates on a much tighter lag. It's an easier administrative process, if you will, because it's really primarily one material. When we talk about lags in Amcor's businesses, it's primarily in flexibles. In flexibles, it's also important to remember that about 60%, or maybe I'll say it the other way, about 40% of what we buy in the flexible segment is not polymer-based. It's aluminum, it's fiber, and it's other things. The spend from a commodity perspective is pretty well diversified. Then particularly in polymers, the other 60%, that's really split. It's split across four geographic regions, and it's split across grades. The netting of that, the portfolio effect of that, again, with the addition of Bemis, which is $4 billion out of the $9 billion of sales in that segment, just creates more of a portfolio effect or a dampening or a leveling effect. To sort of summarize it, we're better at this, and our portfolio is better positioned to withstand these kind of cyclical spikes. Perfect. Thanks, Ron. Our next question will come from Richard Johnson of Jefferies. Please go ahead. Thank you very much. Ron, sorry, just to continue on with your commentary on raw material price lags. I'm just trying to understand properly what the impact of, or what the lag is when you think about what the impact on your revenue line has been of lower raw material prices, and it's the same for the group as it is with flexibles. That's been negative really right through 2020 and into 2021. If you assume that nearly all raw materials really started to turn back up midway through last year, it looks like the impact on your revenue lines continued to be negative for nine further months. Is it that simple, or how should we think about the lag? Look, I think the way to think about the lag is that in flexibles, it's roughly a quarter. There's probably an average in there that's somewhere between three and four months, but it's close enough. That hasn't really changed over time. I think with the addition of the Bemis portfolio, that part of the equation hasn't really changed much. I think we have to remember, there were times over the last 9 or 12 months, I think, was the period you referenced where raw materials also went down in some parts of the world. I wouldn't read too much into the I think it'd be very difficult to bridge back the commodity charts with the raw material impact on the revenue line, which is why we just break it out for you. Our measure of organic sales growth excludes the impact, positive or negative, of commodity prices. Yeah, absolutely. That's always been negative for quite some time, though. Anyways, that's helpful. Thank you. Then just secondly, on sustainability, I'd be interested in your view on what's going on in France at the moment. Obviously, their single-use plastic legislation passed a big hurdle overnight. I'm particularly interested around what they're thinking about doing in supermarkets with compulsory refill stations and the like. Is that something we should be worried about longer term? No. Look, I think consumer consciousness is rising everywhere, and that's a good thing, because ultimately we need the consumer to participate. In countries like France and others in Europe that have various forms of legislation in place, all of that is supportive to the infrastructure funding that's required, whether it's composting infrastructure, recycling infrastructure, et cetera. None of that is necessarily a bad thing. I think on the reusable side of things, I'm not sure that's an Amcor issue, per se, particularly in France. The consumer behavioral shift required for reuse at scale is just not something we've seen anywhere in the world yet. It doesn't mean it won't happen, but I think that's a big ask of the consumer at this stage, quite frankly, when we're trying to get them to recycle or compost. That's very helpful. Thanks, appreciate it. Thanks. Your next question will come from Anthony Pettinari of Citi. Please go ahead. Good afternoon. Ron, when you first gave fiscal 2021 guidance last year, I think you guided to 5%-10% EPS growth and the $1 billion-$1.1 billion free cash flow. You've now raised the EPS guide a couple of times. I think you're basically double the original guide at the midpoint in terms of EPS growth. The free cash flow is still that sort of $1 billion-$1.1 billion. I understand it's not a huge delta, but is there any kind of working capital impact from resin that maybe you get back in fiscal 2022? Is there something on the CapEx side? Just wondering how we should think about you being maybe at the low end or the high end of that free cash flow guide. Yeah, no, it's a good question. Michael's actually back, so we'll let him tackle that one. Yeah. Hi, can you hear me, Ron? Yep. Yep. Okay. Yep, perfect. No, yeah, look, you're quite right. The guidance has increased through the year, and we're still talking about a cash flow range of $1 billion-$1.1 billion. We think we'll be at the upper end of that range. That said, clearly, the raw material escalation will have some impact on working capital as we just cycle through those increases and get them out into the marketplace. Really, that's the reason why we're sticking with the $1 billion-$1.1 billion. It's basically that point. As I said, we think we can get to the upper end, but let's wait and see what happens with any further raw material movements. That's really the simple answer. Okay. That's helpful. Then you saw strong rigid volumes in the quarter. I think hot-filled volumes were up double digits. I think you indicated on the flexible side for next quarter, there wasn't necessarily much in the way of a big COVID benefit when we look at the year-over-year comp. If I got that right, does that also apply to rigids? Just as the U.S. economy reopens, how should we think about the positives and the negatives for rigid on kind of a year-over-year comp basis? Yeah. Look, I think you're right to call out the trends. The business hasn't had much of an impact. I know we've sort of sounded a bit like a broken record on that point, because we don't have a whole lot of exposure to the food service side. The place where we have a little bit of exposure is the convenience channel in rigids, where you saw some softer sales at times last year. The offset to that has been the healthcare segment. The two just about net. Again, I think somebody else asked the question earlier, and I made the comment. As far as trying to find a comp on whether it's a negative or a positive, there's just not a whole lot in it for us. I think you're going to see volume growth at the end of the year that's consistent with our long-term averages. We're having, obviously, a pretty good year in rigids with positive mix on the hot-fill side. That's really driven by just the consumer demand in some of the hot-fill sports drink, juice, and tea segments more than anything else. Okay. That's helpful. I'll turn it over. Thanks. Your next question will come from Salvator Tiano of Stifel. Please go ahead. Yes, hi. Thanks for taking my questions. Firstly, I wanted to see a little bit with your fiscal 2022 starting in less than two months from now. How should we think about the earnings bridge, some big key items, key buckets for EBITDA? I know you have additional Bemis synergies that are going to be accretion from buybacks, but any other things we should consider as we look into the next fiscal year? Look, actually, I think you described the main elements in the bridge. There's no secret here. We pretty much lay it out there each quarter. The business will generate organic growth kind of mid-single digits, 3%-4%. I think as you've heard us say a few times, the momentum organically in the business has accelerated actually this year. You can make your own assumption around that piece. The Bemis synergies, we're saying we're going to end up this year at about $70 million. We got to $80 million last year, and we're on track to get at least $180. You can make your own assumption about what the increment might be next year. We purchased shares this year, which will add to the base for next year. The other thing that we want to make sure people don't lose sight of is this business will generate a lot of cash, and we'll generate well over $1 billion of cash again next year, which will result in $300 million-$400 million left over after CapEx and after dividends. We'll do something with that. That's been our track record. We've been active acquirers over the years, and we've also been active share repurchasers over the years. You should assume that some productive use for the benefit of shareholders will come out of that extra cash. Perfect. Touching base exactly on potential opportunities for M&A, what are you seeing on the pipeline? What's your view on the multiples out there? Any specific areas that you're targeting? I guess on the reverse side, I think after Bemis especially, people are spending less and less time focusing on your folding carton business. Does this continue to fit into your strategy going forward? Yeah. Well, let me answer the first part, then I'll come back to folding cartons. Look, we're going to be active acquirers. There's no question about it. We've done about 30 deals over the last 10 years, I hope we do at least that number over the next 10 years. That'll be part of our playbook. This is an industry where even despite leadership positions across our portfolio, there's still lots of bolt-on opportunities across flexibles and in rigids. Then there's some areas that we'd like to double down on or that represent bigger opportunities for us. Obviously, flexibles in Asia. We have a business that's well over $1 billion in sales, but the market opportunity is enormous. Hopefully we can supplement our growth there with M&A as one example. Probably another one would be in the rigid packaging space outside of beverage. We've got a big business growing well organically. Can we supplement that with further M&A? We certainly hope so. Those would be a couple of examples, but there's bolt-on opportunities across the board, and we really hope to be active. Look, on folding cartons, it's a business that's about 80% of sales in Amcor. It's the industry leader in what it does because it's a very specialized type of folding carton. High graphic intensity, and shapes, and tactile features as well. It's sort of the high end. It's not cereal boxes per se. It's a high-margin business that generates a lot of cash. It's pretty core to our flexibles parameter because it's essentially a printing and converting business. Industrially, it looks exactly like our flexibles businesses. In fact, some of the equipment is actually the same. It's every bit as core as everything else, and it's got a great financial profile. It's obviously got a different top-line profile than the rest of the company, but from a return on capital and cash perspective, it's about as good as it gets. Perfect. Thank you very much. Our next question will come from Adam Samuelson of Goldman Sachs. Please go ahead. Yes, thanks. Good afternoon. Good morning, everyone. Hi there, Adam. Hi. I guess first question, just thinking about kind of business trajectory. I was hoping you could maybe give us a bit of a split by geography in terms of what regions, especially EM versus developed markets, and especially you talked about some of the volume kind of weakness in healthcare, and any sense on kind of when do comps ease there and visibility to business activity kind of picking up, especially in the U.S. where getting past the worst of COVID, it seems? Well, look, healthcare is a good long-term grower. That's a business that would have been disproportionately accretive to growth for a long period of time. It's a medical device business, and it's a pharmaceutical business. Both of those have fantastic financial characteristics, including growth in excess of more traditional FMCG growth. That will come back. There's no question about that. I think we're seeing signs of life in the developed markets in particular, which were the hardest hit through COVID. We operate that business globally. In particular, it's big in Europe and North America, as you'd expect. Those are the areas where the COVID impacts, the reduced elective surgeries, the lower prescription rates had a particular bite. That's obviously, I think we're coming out the other end of that. Hopefully over the next couple of quarters, we start to see that normalize. Normalize in that sense means it's accretive to growth. That's been the big impact really. The rest of the portfolio will continue to grow low single digits. The comp issue is sort of less meaningful everywhere else in the company except for the negative impacts from the healthcare dynamics that I just referred to. Okay. That's helpful. Just to follow up on the ePac acquisition, which I guess the framing of it was different, and then you called it a corporate venture investment. Can you talk about kind of what your real plans are for that business? Is there a real opportunity to gain some penetration with faster-growing small and medium-sized customers that you struggle to reach today? Yeah. Well, look, I think the framing is intentional, so I'll talk about ePac in a second, but the key point to take away here is that we're going to be much more purposeful and systematic in tapping into external ideas of all types. We believe, and we have conviction, that we have differentiated R&D capabilities in the company. We're not naive enough to think we've got all the great ideas out there. That's really the headline message is that we're open for business if there's a great idea that somebody wants to help developing or wants to come talk to us about. ePac is a corporate venturing type investment. It's a minority stake in a business that is essentially a startup. It's about a four-year-old business. Fantastic business, really exciting. It's a flexible packaging business in essence. It's gone really from $0 to about $100 million in sales in four years. It's got about 15 sites, most of them are in the U.S. I think there's a couple outside the U.S. We're really excited to learn from it, quite frankly. The first objective is to learn, and kind of leave it alone. What we hope to learn is in a few areas. One is the commercial approach, which, as you point out, is geared towards smaller enterprises, and it leverages short runs, quick turnarounds, and also high quality. That is a commercial learning opportunity for Amcor. I think industrially, the business is enabled by digital printing and some other kind of neat industrial aspects inside the four walls of a plant, which are also interesting to us. The third thing honestly is how does a business grow from $0-& 100 million in 4 years? I think there's a hell of a lot we can learn, like any big company, from a startup and how that happens from a managerial and organizational perspective as well. We're going to leave it alone a little bit, Adam, in the first instance. Not a little bit. We're going to leave it alone, and we're going to watch and listen and learn, and then watch the space. I think you'll see different manifestations of those learnings benefit Amcor for many years to come. Okay. I appreciate that color. I'll pass it on. Thank you. Thanks. Our next question will come from Larry Gandler of Credit Suisse. Please go ahead. Hey, Ron. Hey, Michael. I also had a question about ePac and raw materials, so might as well continue the ePac conversation. $0- $100 million in sales in four years, that's, as you say, incredible. What does it say about the size of that market? Can you give us some color about how big that small customer market is and really what the opportunity is? I think it says that it's pretty damn big. I don't know that we'd even sized it. I think that's primarily a U.S. figure that I gave you. You can compound that when you think about the other parts of the world. I think it's really big. What I don't know at this stage is just of that bridge from 0- 100, how much of that is new business with new customers of that type, versus how much of it is the growth of those customers as they continue to outgrow the big multinational FMCG players. Both are important. Direct answer to your question, Larry, I'm not sure we could really size it per se. Okay. Let me ask a different way. When you look at ePac, do you have any similar customers, or is it a completely different market than where Bemis and Amcor is sitting in the U.S.? Well, we certainly have customers like that in the rigid space. In some respects, you've heard us talk about our regional business unit. Yeah we created our own version of ePac about 5 or 6 years ago in rigids, for exactly that purpose. Look, in flexibles, I would say I'm sure we have customers of that type, but I'm not sure we've been all that purposeful and systematic about attacking that part of the market, and that's where the real opportunity comes from. Okay. On raw materials, Ron, you described the situation as manageable. As I talk to investors and characterize Amcor, we talk about it as safety, quality, the Amcor Way. When it comes to managing raw materials, I know pass-through is one of your mechanisms, and that also characterizes Amcor. Can you give us some anecdotes about Amcor's raw material procurement? I remember, perhaps in the last or two resin spikes ago, I think Amcor was bringing resin into the U.S. from Asia in a unique fashion, which others were not doing. Maybe you can call out some anecdotes on how you're beating the high raw material costs through procurement and raw material management. I will, but let me just make one thing really clear. The convention in the industry is that the raw material fluctuations are passed through to the marketplace. The conversation about the lag or the P&L impact of changes in raw material prices is really about the commercial side of the business and the commercial capabilities of, first of all, measuring what those changes are, and then executing price increases to recover those costs. That's the absolute key point here. I think we have a pretty special approach at doing that, which goes all the way back, firstly, to understanding the profit of each order and each customer and each product. I can talk more about that, but that's the commercial side. On the procurement side, which I treat as a slightly different dimension, I think our procurement capabilities have evolved over the years. I think as we've gotten bigger, we've added people, we've added expertise, we've added IT systems. Our buy is broad. I think the fact that we're now a bigger buyer in the U.S. gives us visibility into the dynamics in this market that maybe we always had in Europe, and didn't have as well in the U.S. As regional as the market can be at times, it absolutely has elements of a global market as well. I think all those things contribute. Okay. Thanks, Ron. Yeah. Thanks, Larry. Your next question will come from Mark Wilde of Bank of Montreal. Please go ahead. Good afternoon, Mike. Good afternoon, Ron. Hey there. Ron, I wonder, with COVID, are you getting drawn into more conversations with your customers about automation and automation of the packing processes as part of the packaging? Yeah. Automation has always been important, and it's always been important from a productivity perspective, I think for obvious reasons in terms of labor cost reductions. That's always been there. I think what's added, what's been accretive to that discussion now is the hygiene factor, right? Obviously meat packing gets a lot of attention. There are other segments as well, where you've got a lot of people in a confined space, and that creates a health risk that none of us appreciated 12 months ago. The short answer is absolutely. We think we have some unique product offerings that will help support that over the journey. Yeah. I remember about four or five years ago, Bemis was talking about a flat film technology used in fresh meat that would replace three-sided bags which- Yeah could be stuffed manually. Are you seeing pickup there? Yeah. Well, you're on it. That's the differentiation, right? There's two ways to pack fresh meat, really simply stated. There's a continuous process using film and then there's bags, which obviously is a bit more labor intensive. We think we have some good products to offer in both, but our film technology we would put up there with anybody's. Yes, we would expect to see an acceleration in that space. Okay. Just as a follow-on, you mentioned the use of PCR PET in a number of your North American rigid containers. Just trying to get a sense of what% of the mix post-consumer PET would be at this point for you in North America? I'm glad you asked, because we're pretty excited about this. It's almost becoming pervasive. We're going to exit this year in North America converting about 10% of our resin as post-consumer recycled material. 10% of what we convert in North America will be PCR. In terms of absolute pounds, that's a doubling of the amount of pounds we were converting two years ago, and that's despite the pandemic. The pandemic has actually slowed down that trajectory. We probably would be at a higher level than 10% had it not been for some of the disruptions in the supply chain from the pandemic. It's also pretty exciting that many of the new SKUs that we launch, and we've got a lot of new product examples scattered throughout our materials today, many of them are made with 100% PCR. It's almost like electric vehicles to some extent. We're not launching a lot of new products in PET that aren't leveraging PCR to some extent, and many of them are 100% PCR. I think what you're seeing, you're right, we're in the middle of a migration to a different industry convention, which says there's no reason you can't continue to reuse this material over and over and over again. Is the supply of PCR the limiter or is it just getting the consumer goods companies to try it? It's a little bit of both. I think right now we're adequately supplied, and I would say the market is creating the right level of demand. We all project out at some point, in the near to medium term where we could have a supply constraint, but that's absent other factors that will increase supply. Things like deposit legislation expanding beyond 10 states in the U.S. Things like consumer education. You may have seen the Every Bottle Back campaign that a number of the beverage companies are co-sponsoring. Absent big increases in supply, we could be tight in the next couple of years. I do think there will be big increases in supply, however. I think this trend will continue. I think it'll accelerate, quite frankly. I think we get through the pandemic, any concerns around hygiene, any cessations of collection schemes will end, and we'll start collecting again. I think that 10% number that we're going to end this year at will be much higher 12, 24 months from now. Okay. That's really helpful, Ron. Thank you. Thanks, Mark. Our next question will come from Brook Campbell-Crawford of JP Morgan. Please go ahead. Yeah, good morning. Thanks, Ron and Michael. Just had a couple of follow-up questions on the corporate venture side of things. Just wondering if you'd consider pre-committing a dollar amount to an internal fund of some sort, or is it just really opportunistic investments sort of made at the head office level? That's the first question. The follow-up would be, would you consider investing in raw material processing or recycling assets on that side of things, the sort of evolving technologies on the raw material side? Yeah. Look, two good questions. Two discussions that are always ongoing inside Amcor. On the corporate venturing side, we are getting more systematic. As I said, part of that is including a couple of staff who will be full-time focused on this. Whether or not we're going to communicate a number remains to be seen. We probably will. We'll allocate a certain portion of capital every year towards investments of that type, it won't be material, I can tell you that, in the grand scheme of the capital budget that we have each year or the free cash flow that the business generates. We think a purposeful amount of investing on a regular basis will help us make sure that we're tapped into the best ideas out there. I would say, Brook, watch this space on this one. There'll be more to be said on this topic. On the investments in the recycling part of the value chain, look, never say never. We prefer not to put big licks of capital into parts of the value chain that are not necessarily areas we can be differentiated and unique in. We would prefer to be a demand catalyst and a source of demand for others who might put their capital in those spaces because it's more aligned with what they do. The other way that we hope to influence infrastructure development is through some of the collaborations and partnerships that we've entered into. We announced recently that we've signed up with the Alliance to End Plastic Waste, which is not a new entity, but one that we stayed close to for a couple of years and are really encouraged by the progress that group's making, particularly on the waste management side. We're hopeful that we can influence that part of the responsible packaging equation without allocating substantial amounts of capital. Understood. Thanks. One quick one for Michael, just on the corporate cost line. In the nine months, about $18 million increase in corporate costs, if we put synergies to one side. Are you able to just provide a few examples of what's driven the step-up there, and is any of it one-off in nature so that we might see it unwind in FY 2022? Basically, Brook, the corporate cost increase is $8 million year- to- date. Accounting [inaudible] there's puts and takes against that. If we just think about that, half of the $8 million is FX. We have unfavorable FX in that, and we've talked about some insurance claims, higher insurance claims that we've had and insurance costs that we've had year to date. They're really the two key areas behind the increase. As we look forward, I'd say that they're probably going to roll through to the year end, and that's going to be about the increase versus prior year at year end. Really that's it. You're not seeing any major movements in the costs, albeit we are investing in things like sustainability and innovation in those areas. We'll continue to invest in that space as well. Understood. Thank you. Our next question will come from Keith Chau of MST Marquee. Please go ahead. Hi there, Ron Delia and Michael Casamento. First one, Ron Delia, just following up on Adam Samuelson's question previously on raw materials. In the disclosure it talked about an unfavorable impact on revenues in the nine months, certainly as raw material prices have increased, the impact on sales should be favorable within the third quarter of FY 2021. Just wondering if you could narrow it down, just to give us a sense of whether raw materials did contribute favorably to sales and whether there was indeed an impact or not in the third quarter. Whether as we look into the fourth quarter of the fiscal year 2021 and the initial quarters of the next financial year, whether there will be any impact from raw materials? Yeah. No, absolutely. Short answer is yes. In the third quarter, in the Flexible segment, you'll see a positive impact from raws, and I would suspect that will be the case in the fourth quarter as well. Any guesses as to what the magnitude could be? Not material enough to be concerned about? Not material enough to be concerned about. Also, as we report the numbers, we're always referring in the first instance to organic sales. We're stripping out that impact. I'm answering your question directly, and there will be a positive impact in reported sales from passing through higher raw material costs. Okay. Thanks, Ron. The second one, it seems like the business is becoming significantly more comfortable with the Bemis assets. Certainly an upgrade coming through for synergies, if not today, being a soft upgrade there, something further in the future. Can you give us a sense of whether that will be driven through the cost line or whether you're starting to see some revenue synergies start to come through for Bemis? Yeah. Michael might just comment on the cost side, and then I'll talk about the commercial benefits. Yeah. No, look, on the cost side, as we've said, we feel really good about where we are. The integration's gone exceptionally well. We've been able to generate the synergies from the G&A side, from the procurement, and more recently, we're starting to get impact on the footprint side. As Ron commented earlier, we got $80 million last year. We're at $55 million year-to-date this year, we'll end up approximately $70 by year end. As we exit the year, we will have captured $150 million, we'll be at least able to capture the $180, we've got clear line of sight around the projects that are still to come to deliver that extra synergy benefit next year. As we get more and more through the timeframe, we feel more increasingly confident around that delivery. We're right on track to deliver at least $190. Yeah. Then just briefly on the commercial side, I would say more broadly, I think there's examples of products transfers going in both directions. We've called out a few examples, and I wouldn't describe them as material yet, but we've got some products going from the North American business into ANZ. I think we've got an example on Bega Cheese, individual wrapped slices. That's a good example of leveraging a structure from the U.S. Legacy Bemis business into ANZ. We've got some examples going the other way from our New Zealand dairy film business going to the U.S. market. I think you'll see more and more of that. It's a really interesting and complementary mix of segment participation that the businesses have had historically. If I look in North America, the big positions in protein and hard cheese, processed cheese, that we acquired are absolutely additive for our portfolio in Europe. Then the pet food and coffee positions that we've had in Europe historically are completely new and additive to the legacy Bemis platform in North America. I think we'll see more and more of that. I think our Amcor Way to probably describe that will be through examples as much as anything else. I think we're starting to see it already. Great. Thanks very much. Our next question will come from Kyle White of Deutsche Bank. Please go ahead. Hey, thanks for taking the question. On the severe weather this quarter, was there any meaningful impact to earnings from this event outside of the raw material inflation that you saw? Yeah. I wouldn't say material, but definitely impacts. We, like everyone else, we're struggling to get raw materials at times. Some of the businesses that were most dependent on specific materials out of specific plastic plants were a bit constrained. We have all of that and more. It was a really difficult quarter, which is why we're particularly proud that it was our best profit quarter of the year. Not to mention the fact that in certain parts of the world, we're dealing with continued impacts from COVID. In Latin America, India, the businesses are wearing extra costs and certainly extra complexity and management time and attention to keep everybody healthy. We're not calling anything out as material, Kyle, there's no question that the business had a headwind in the quarter from all those exogenous factors. Yeah. Thank you. I know it's a bit early, given the greenfield plant you referenced on slide eight in China, should we anticipate an uptick in CapEx next year, or will it be similar to this year's level? I'll take that one, Kyle. Look, I think we typically would spend 3.5%-4% of sales on CapEx. Last year being the first year after an acquisition like Bemis was a little lower than that, so we were around the $400 million mark. I think this year, this FY 2021 will finish the year probably about 10% higher than that. As we look forward, we can manage these investments of this kind, we've done them before within our CapEx spend, and you should expect that the CapEx is going to be somewhere around 3.5%-4% of sales. Probably getting closer to $500 million as we move forward. We're really pleased with these types of investments because they generate growth, and they get good returns. They really help us deploy our customer base as well. We're quite pleased to be able to invest in these activities. Sounds good. Thank you. Our next question will come from John Purtell of Macquarie. Please go ahead. Oh, good day, Ron and Michael. Sorry, just another one on raw materials. Obviously a popular theme here. If we go back to fiscal 2018, emerging markets seem to be, in particular, an area that we saw an extended lag of up to six months. You seem to be flagging a shorter lag this time. I know you sort of alluded to it, but just trying to understand what dynamics have changed there. Yeah. It's a good pickup, John. You've watched the company for a long time, and as I said, I alluded to in my answer earlier, I think we improve with each commodity spike, and we improve not just when raws are going up, but I think each year. If I contrast where is the company today with where were we in 2018, when I also would've said we're reasonably good at this. I think that the base capabilities are more pervasive around the company. The Asian business, the Latin American business are closer in sophistication and maturity at passing through raw materials. They're almost indecipherable from maybe the legacy European business. That would be the key. If I look back at the 2018 cycle, that would be the key legacy of that. If I go back to the one before, we got much more sophisticated about aluminum when the spike in aluminum occurred in 2011-2012. Each opportunity for learning is capitalized on, and I think our capabilities are just continuing to evolve. Thank you. Just the final one. We've seen large increases in aluminum and inks and solvents prices. Is the pass-through lag or pass-through and recovery mechanism similar to resin? Yes. The short answer is yes. I think that we have good contractual coverage. For contracted customers, we absolutely have coverage over those commodities. The pass-through mechanisms function, for all intents and purposes, the same way. Thank you. Okay, thanks. Our next question will come from Nathan Reilly of UBS. Please go ahead. Hey, Ron. A question coming through on plant capacity and utilization. Can you give us a bit of an update on where you are on those factors at the moment? Notwithstanding the fact you've flagged some growth opportunities, are there any areas around the network where you might be a touch constrained? Are there some opportunities to grow with customers in some of those areas of the network? Yeah. Look, it's a very good question. The one standout area is in the hot fill space in containers in North America. I think, without question, the network is maxed out. It's a segment that has grown steadily over a 5 or 6-year period at about 3% a year. Obviously has had a much better run over the last several quarters. Without question, that part of our footprint is capacity constrained at the moment. Now, that won't last forever. Obviously, we'll put the capacity in place if necessary to capitalize on that growth, but that's the one that stands out. Other than that, the supply-demand balance is manageable, but as Michael alluded to a couple of questions ago, we do hope to deploy some more capital and get back up towards that 4% of sales number to capitalize on the growth opportunities that we see. Perfect. Thank you. That's all the time we have for questions today. I'll now turn the call back over to the presenters for the closing remarks. Okay. Thank you, operator, and thanks everyone for joining the call today, for your interest in Amcor, and for your questions. We'll close the call now. Thanks very much. This concludes today's conference call. Thank you very much for joining. You may now disconnect.