Hello, and welcome to the Amcor Q1 2024 Results Conference. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. I will now turn the conference over to Tracey Whitehead, Head of Investor Relations. Please go ahead. Thank you, operator, and thank you everyone for joining Amcor's Fiscal 2024 Q1 Earnings Call. Joining today is Ron Delia, our Chief Executive Officer, and Michael Casamento, our Chief Financial Officer. Before handing over, a few items to note. On our website, amcor.com, under the Investor section, you'll find today's press release and presentation, which we will discuss on this call. Please be aware that we'll also discuss non-GAAP financial measures, and related reconciliations can be found in that press release and presentation. Remarks will also include forward-looking statements that are based on management's current views and assumptions. The second slide in today's presentation lists several factors that could cause future results to be different than current estimates. Reference can also be made to Amcor's SEC filings, including our statements on Form 10-K and 10-Q for further details. Please note that during the question-and-answer session, we request that you limit yourself to a single question and one follow-up, and then rejoin the queue if you have any additional questions. With that, over to you, Ron. Thanks, Tracey, and thanks everyone for joining Michael and myself today to discuss Amcor's Q1 results for fiscal 2024. We'll begin with some prepared remarks before opening for Q&A. As seen on slide three, Amcor continues to be an industry leader in safety, with a recordable case frequency rate that has trended significantly downwards over many years. In our Q1, 65% of our sites around the world were injury-free for the past 12 months, with more than 30% injury-free for three years or more. Safety is deeply embedded in Amcor's culture, and providing a safe and healthy working environment is the number one focus for our global teams. Turning to our key messages on slide four. First, we delivered a Q1 result in line with our expectations, despite a challenging demand environment characterized by continued weak consumer demand and ongoing customer destocking. Against this backdrop, our teams executed well and remained focused on managing the areas under their immediate control. Second, the Q1 performance puts us on track to deliver against our full year guidance, which we are reaffirming today. Our expectations for phasing through the two halves of the fiscal year have not changed, and we continue to expect adjusted EPS for the H2 of fiscal 2024 to grow by mid-single digits over last year on a comparable constant currency basis. As a reminder, there are several reasons why we expect a stronger H2, including continued benefits and increased earnings leverage from ongoing price and cost actions, additional benefits from structural cost initiatives building through the year, a reduction in interest expense headwinds, and favorable comparisons to the prior year's volume performance. Our third key message is we're making significant strides in our sustainability efforts within our own operations and in the design of our products. Our commitment to sustainability, and the creation of a circular economy for packaging represents one of our most promising avenues for growth as we enable our customers to meet consumer demand for more responsible packaging. Fourth, we remain confident in our long-term growth and value creation strategy. The strength of our market positions and underlying business, our proven execution capabilities, and our consistent capital allocation framework collectively make a compelling case for investment in Amcor. Moving to slide five for a summary of our financial results. September quarter financial performance was in line with our expectations as we continued to take proactive cost and price actions to align the business with market dynamics, including ongoing inflation and continued weak and volatile volumes. Sales were 6% lower than last year on a Comparable Constant Currency basis, which reflects Price Mix benefits of approximately 2%, offset by an 8% decline in volumes, which was within the range we anticipated for the H1 of fiscal 2024. As expected, volume weakness persisted and was broad-based through the September quarter due to a combination of lower consumer demand and continued customer inventory destocking. Fiscal Q1 Adjusted EBIT of $358 million was 5% lower than last year on a Comparable Constant Currency basis. Benefits from ongoing cost actions and price and mix benefits were more than offset by the weaker volumes, and our teams drove working capital improvements, which resulted in Free Cash Flow being well ahead of the same period last year. We expect to deliver strong cash returns to shareholders this fiscal year, with returns of approximately $200 million in the Q1, up more than 10% over last year, through a combination of share repurchases and a growing dividend, which the board increased to $0.125 per share. I'll turn it over now to Michael to provide some further color on the financials and our outlook. Thanks, Ron, and hello, everyone. Turning to our flexible segment performance on slide six, net sales were down 8% on a reported basis, which includes a favorable impact of 3% related to movements in foreign exchange rates, and an unfavorable impact of 2% related to the pass-through of lower raw material costs. On a comparable constant currency basis, net sales were down 6%, reflecting 8% lower volumes, partly offset by price mix benefits of approximately 2% as the business continues to take pricing actions to recover inflation. Q1 volume trends remained similar to last quarter, with all regions continuing to be impacted by lower consumer demand and destocking. Volumes across North America and Europe were down high single digits, with Europe a little softer than North America. Volumes in Latin America were also down high single digits, and in Asia, volumes were broadly in line with last year as continued growth in India and a return to positive volume growth in China offset lower overall volumes in Southeast Asia. The impact of destocking across the Flexibles business was similar to last quarter, accounting for approximately one-third of total volume declines. By end market, we continue to see stock demand and destocking impact categories including protein, coffee, liquid beverage, and healthcare. Pet care and confectionery categories remain strong in key markets, with volume growth delivered in the quarter. Adjusted EBIT was down 5% in comparable constant currency terms for the quarter, reflecting favorable operating cost performance and price mix benefits, offset by the lower volumes. Turning to Rigid Packaging on slide seven. Reported sales were 6% lower than last year, including the favorable impact of 1% related to movements in foreign exchange rates and the unfavorable impact of 1% related to the pass-through of lower raw material costs. On a Comparable Constant Currency basis, net sales were 6% lower than last year, as price mix benefits of approximately 1% were offset by a 7% decline in volumes. In North America, volumes in both the beverage and specialty containers business continued to be impacted by lower consumer demand and similar levels of customer destocking as experienced last quarter. In the beverage business, overall volumes were down 9%, although mix trends were favorable. In specialty containers, volume growth in food was offset by weaker volumes in healthcare and home and personal care. In Latin America, while market demand was somewhat softer across the region, our business is benefiting from new business wins, and overall volumes were up mid-single digits compared with last year. The businesses in Brazil and Colombia delivered strong volume growth, offsetting lower volumes in Mexico. Adjusted EBIT was 6% lower than last year on a Comparable Constant Currency basis, reflecting lower overall volumes, partly offset by Price Mix benefits and favorable cost performance. In terms of cash flow on the balance sheet on slide eight, our adjusted free cash flow performance was in line with our expectations and meaningfully better than last year, enabling us to reaffirm our full-year cash flow guidance, which I'll come back to shortly. The cash flow improvement of more than $170 million compared to the Q1 of fiscal 2023, mainly reflects our focused inventory reduction efforts, which have resulted in a decrease of more than $500 million since the peak in November 2022. We remain highly focused on working capital performance, which is particularly critical in this environment of continued inflation and rising interest rates. We also continue to return cash to shareholders, purchasing approximately three million shares during the Q1 for a total cost of $30 million. Consistent with our comments in August, we expect to allocate a total of at least $70 million towards share repurchases in fiscal 2024. In terms of the balance sheet, we maintain a strong investment-grade credit rating with leverage at 3.3 times, in line with our expectations at this time, taking into account the usual seasonality of cash flows and the short-term impacts of cycling the divestiture of our Russian business earnings and higher working capital levels. We expect leverage will decrease to approximately 3 x by the end of the Q4. Turning to our outlook on slide nine. Our Q1 performance was in line with our expectations, and we are reaffirming our full-year guidance for Adjusted EPS of $0.67 to $0.71 per share. We continue to expect the underlying business to contribute organic earnings growth in the ± low single-digit range, and share repurchases will result in a benefit of approximately 2%. The US dollar has strengthened slightly since August, and we now anticipate currency translation to result in a benefit of up to 2%. This is expected to be offset by a negative impact of approximately 3% related to the sale of our three plants in Russia in December 2022, and we also expect a negative impact of approximately 6% from higher interest and tax expense. Our expectations for interest and tax expense for the full year remain unchanged, with interest in the range of $320 million-$340 million, and a tax rate in the range of 18%-20%. In terms of cash flow, we are trending better than the Q1 last year, and we continue to expect significant adjusted free cash flow in the range of $850 million-$950 million in fiscal 2024, representing growth of up to $100 million over last year. Our plan to repurchase at least 70 million of Amcor shares in 2024 is unchanged, and we continue to pursue value-creating M&A opportunities. Turning to slide 10, Amcor has a proven track record of strong and consistent long-term earnings growth. As noted on our call in August, it's important to call out that fiscal 2024 phasing of comparable earnings growth is not expected to align with prior years. Consistent with our comments from last quarter, we anticipate challenging market dynamics will persist in the near term, resulting in similar mid- to high single-digit volume declines through the December quarter. Combined with the unfavorable impact of higher interest expense, which is expected to moderate in the H2, our guidance for the H1 is unchanged. Compared with last year, we expect that Adjusted EPS for the six months of fiscal 2024 will be down in the high single-digit to low double-digit range on a comparable constant currency basis. For the Q2, this implies Adjusted EPS and EBIT in absolute terms will be broadly in line with or marginally lower than the September quarter just finished. As Ron mentioned earlier, our confidence in delivering mid-single-digit comparable constant currency earnings growth in the H2 of fiscal 2024, and resuming our long-term trend of high single-digit earnings growth shortly thereafter, is supported by visibility to several known second-half factors. First, we have the benefit of approximately $35 million from structural cost-saving initiatives that builds through the year. Second, we have increased earnings leverage resulting from ongoing benefits of price and cost actions taken. Third, as I noted earlier, a reduced interest headwind. And fourth, we expect that customer inventories will have largely normalized as we progress through the H2, and we will benefit from favorable prior year volume comparatives. Finally, and also consistent with our comments in August, we do not need to see a significant change in the demand environment to return to solid earnings growth in the H2 and beyond. With that, I'll turn the call back to Ron to provide some longer-term comments. Thanks, Michael. Before we open the call to questions, I want to provide a few words on the building blocks that inform how we think about growth over the longer term, and then finish with a brief preview of our 2023 sustainability report, which will be released in the coming days. Looking at slide 11, we have multiple drivers that have enabled us to deliver solid and sustainable earnings growth over the longer term, including opportunities in priority categories, emerging markets, and through innovation. These have not changed and collectively give us confidence in our ability to deliver future growth in line with our historic trend rates. Turning to slide 12 and some highlights from our forthcoming sustainability report, which covers the significant strides we've made in product development and operational sustainability. Sustainability provides meaningful opportunities to differentiate and drive growth and value. This is particularly important in today's landscape as consumers focus on the critical need for more sustainable, high-performance packaging solutions, and as customers increasingly look to work closely with responsible, sustainability-focused partners. Starting with our own operations, since launching Amcor's EnviroAction program 15 years ago, we've diligently worked towards reducing our greenhouse gas emission intensity and have achieved a cumulative reduction of more than 40% against our 2006 baseline. Along the way, we've also increased our ambition and committed to net zero emissions by 2050, in line with the Science Based Targets initiatives. In fiscal 2023, we delivered an annual reduction in absolute emissions of 10% through a range of measures, including an increasing focus on the use of renewable electricity. In addition to carbon-related objectives, we maintain robust targets for reducing water and waste. 100% of our sites have a water management plan in place, and 143 of our sites have achieved zero waste to disposal certification, which is an increase of around 20% in the last twelve months. Transitioning to slide 13, we also continue to make significant progress in supporting the development of circular systems and what we believe are the three requirements for responsible packaging: package design, waste management infrastructure, and consumer participation. Amcor's industry-leading innovation capabilities position us well to develop the more sustainable and high-performing packaging consumers are looking for, and we believe this is one of our greatest opportunities for growth and differentiation. Today, almost all of our rigid packaging and specialty carton portfolios are fully recyclable. Looking at our flexibles portfolio, 61% of fiscal 2023 sales were recycle-ready, according to the Ellen MacArthur Foundation definition, meaning these solutions are designed to be recycled using current technologies where infrastructure is available. Additionally, another 28% of sales had recycle-ready alternatives available, providing a meaningful growth opportunity when our customers are ready to transition more of their portfolios to sustainable solutions. In total, 89% of our flexible packaging portfolio is designed to be recycled or has a recycle-ready alternative, a six percentage point increase over fiscal 2022. Our use of recycled content also continues to grow, increasing by 29% over fiscal 2022, reflecting our commitment to work closely with customers to reduce the use of virgin materials. Over the past four years, we've more than tripled our use of recycled material, and we're confident we'll achieve 30% recycled content across our portfolio by 2030. We also continued to leverage our position as an industry leader and trusted resource to help our customers navigate their sustainability journeys. As an example, in fiscal 2023, we hosted several Amcor webinars, which were attended by hundreds of customers and covered topics such as the use of recycled content in food contact and healthcare packaging, and the impact of evolving regional regulations on packaging options. Through these efforts, we're reinforcing our value proposition and helping customers accelerate conversion of their packaging portfolios to comply with emerging regulations and to meet their own sustainability goals. We take pride in the strides we've made across all aspects of our sustainability journey. We eagerly anticipate the opportunities ahead, which will continue to differentiate Amcor and also advance our growth objectives, all while contributing to the creation of a circular economy for the packaging industry. In summary, on slide 14, fiscal 2024 has started in line with our expectations. We have reaffirmed our earnings and cash flow guidance today as we continue to have confidence and visibility to solid earnings growth in the H2. We're making good progress on our sustainability agenda, and we remain focused on our strategy to deliver long-term growth and value creation. Operator, we are now ready to open the call for questions. So if you have a question, please press star one on your telephone keypad. To withdraw your question, simply press star one again. In the interest of time, we would like to remind participants to limit their questions to one, and then to rejoin the queue for any follow-up. Your first question comes from the line of Ghansham Panjabi with Baird. Your line is open. Thanks, operator. Good day, everybody. Ron, could you give us a bit of a sense as to, you know, what your base case is for volumes for fiscal year 2024? And I'm just trying to get a sense as to the sequencing beyond the Q1, which was down 8%. Would Would it be sort of 4Q before you hit that inflection point on a year-over-year basis? Yeah. Thanks for the question, Ghansham. Look, firstly, as we entered the year, we flagged that we expected volumes to be down mid-to-high single digits for the H1, and that's exactly what we saw in the Q1, and we expect a similar trajectory for the Q2 as well. As we look forward to the H2, we do expect the trajectory to improve. So we would expect that the destocking will abate as we get past year-end, and as we start to cycle several quarters of inventory reductions, we would expect that impact to start to moderate. And we would expect for the H2 volumes more reasonably or flattish, flat to up to plus or minus low single digits. I think it's more reasonable to expect that the trajectory will improve. Now, exactly the rate at which that trajectory improves in the H2 is difficult to predict. But certainly, as we get into the Q4, the comps get a lot easier. And we would expect things to be improving as we exit the year. Okay, thanks for that, Ron. And I'm just trying to understand the divergence also between volumes which are, you know, quite a bit lower against improved price mix as you, as you've established over the last couple of quarters and, you know, the sustainability of that dynamic. And typically, during periods of weaker volumes, you know, there tends to be some sort of a trade-down, and you actually are showcasing the opposite. So more color on that, please. Well, look, mix over a longer period of time, over multiple years is a major source of earnings leverage for us and has been over a long period of time. As we emphasize higher value segments, both product segments and end market categories, mix is a very important part of our playbook. For this year, on a full year basis, we expect mix to be more or less neutral. We've had a reasonably good start in the Q1 with positive mix in both segments. We would expect that probably will continue in the Q2, but for the full year, we would expect that might normalize a little bit. The reason for that is some of the segments that are higher value have declined at a lower rate than some of the lower value categories. But as we look forward into the H2, we think that the healthcare destocking will continue, and ultimately that will balance out the positive Q1. So all up, relatively neutral for fiscal 2024, but on a multi-year basis, mix is absolutely part of the earnings algorithm going forward. Your next question comes from the line of Daniel Kang with CLSA. Your line is open. Good morning, everyone. I guess the first question from me is on destocking cycle. Clearly, some persistent in the quarter. Are you seeing any evidence or signs of destocking easing as we walk into the Q2? Perhaps you can comment on what you're seeing on customer stock levels as well. Yeah, look, I think it's, we're using the term destocking. I think what we're seeing more broadly is just inventory reductions. Destocking might imply that inventories started at a higher level, and I think that's certainly true in some categories that were subject to more of the supply chain constraints and raw material shortages over the last 12-18 months. There certainly were some inventory accumulation, but I think we've got a few different dynamics that are driving the inventory reduction trend. The first is, for those categories that started at a high level, obviously, they're working down the excess at a time when consumer demand has softened. And also, carrying cost of inventory is now much higher than it's been in a long period of time. So I think that we're seeing a number of companies, including Amcor, try to drive inventories down to lower levels than they've been in quite some time. And I know that we are certainly on that path. So I don't expect that trend to be past us in the Q2, particularly as we're heading towards a year-end, and cash flow at year-end becomes, you know, an important metric that companies are driving towards. So, you know, we would expect that the destocking will abate in the H2, but not in the Q2. Got it. Thanks, Ron. Secondly, I'm just interested in the progress of the new packaging products, AmLite, AmFiber, et cetera. Realize it's early days, but can you comment on the volume growth and customer adoption that you're seeing and the pricing premium that you're achieving? Yeah, look, we're really excited about some of those platform products that you mentioned. AmLite, which is a retortable, recycle-ready retortable structure. AmFiber, which is a paper-based solution. AmSky, which eliminates PVC and PVDC from blister packaging. We think that we've got some really special products there with a really compelling value proposition for customers that are trying to drive their own sustainability agenda. It is early days. Several of those products, though, are generating real sales. So AmPrima, which is also a recycle-ready alternative, AmSky, AmFiber, they're all each generating sales in the tens of millions of dollars, low tens of millions of dollars, but real meaningful sales. AmSky, it's early days, and it's primarily oriented to the pharma industry, so the qualification period is a bit longer. But we are in active trials with a whole range of customers on that one as well. So we continue to be really excited about those platforms that you've asked about. Your next question comes from the line of Adam Samuelson with Goldman Sachs. Your line is open. Yes, thank you. Good afternoon. I was hoping maybe first talk about just the performance in the quarter, the difference between volume and comparable constant-currency operating profit growth, and just very little volume leverage in the period. To contrast the fiscal 2023 experience, maybe, Ron, just a little more color on kind of how you were able to narrow the gap with volumes down mid- to high-single digits, kind of keeping the profit declines that narrow. Yeah, look, it's, it's just been really aggressive, pulling the cost lever, really aggressively, and we continue to do that through the back end of fiscal 2023 and into the start here in the Q1 of fiscal 2024. So, you know, you might recall in August, we talked about the cost actions that we took in fiscal 2023, where we, we reduced costs by over $200 million. We reduced headcount by over 1,200 people. We had pulled the procurement lever really hard. We, we'd cut overheads. All of that continued in the Q1 and actually accelerated. So in the Q1, coming off a year where we took $200 million of cost out, in the Q1, we, we took another $70 million of cost out versus the Q1 of the previous year. And so that's really resulted in improved earnings leverage, and I'd say a much more dynamic ability to flex costs in the face of weaker volumes. Okay. I appreciate the color. I'll keep it to one question then. Thanks. Okay. Thanks, Adam. Your next question comes from the line of George Staphos with Bank of America. Your line is open. Hi, everyone. Good morning, good afternoon. Thanks for taking my questions. I just want to make sure it's two questions per or one question per? I don't want to overdo the quota here. George, for you, it's two. Okay. Okay. I'll try to keep them good then. So I guess the first thing I wanted to ask is, in an environment where we're still, to some degree, waiting for customers, your customers, to begin promoting more aggressively to drive volume, if you agree with that premise, are you starting to see that? And how does that reconcile with your wanting this to push more innovative new products, new product sustainability, which are typically going to have a higher price point? Who's, you know, who's winning that tug-of-war right now, as you think about it, and are we seeing more promotional activity? Look, it's anecdotal at best, George. I mean, there's, I think, a general recognition across the customer base that, you know, the price lever has been pulled really hard. And, you know, you see that from the results of a range of consumer companies, that price has been, you know, a real driver of revenue growth, more so than volumes. And maybe that, maybe those two variables can be brought back into better balance over time. And you do hear anecdotally more customers talking about reprioritizing volume or, or balancing their mix a little bit more towards volume. We need to see it, and we haven't seen it yet. And so, you know, we're not setting the business up on the expectation that that happens. In fact, our H2 earnings uplift that we're expecting is not at all levered to an improved demand environment, and is not at all predicated or dependent on consumers taking a more active approach to promos. Thanks, Ron. And the second question, you know, broadly, can you talk a little bit about the momentum you apparently are seeing in protein packaging? You have a new high barrier win that you highlight on one of the slides. You have your recycle-ready, eco-type package. You know, is there a way to put a quantum size, what kind of momentum you're seeing, you know, what kind of incremental revenue you're getting? And broadly, you know, why you are gaining this momentum, in the market, given that you're the smaller, player in the market? Thanks, and I'll be back if there's time later on. Okay. Look, I think it's the early innings of our journey on protein, in particular, our journey as a full-service solutions provider in meat and protein packaging, which includes the ability to offer equipment now as a result of the acquisition that we made earlier this year in Moda. It's early innings. I think that we are picking up some modest pieces of business along the way, but I would also point out that meat sales have been weak. We're in a down part, a down cycle or a trough, let's say, a low point of the cycle in beef, in particular. And so meat sales have actually been weak across the company in the Q1. It's a long, it's a long game, and we're in the early innings. So I would say that, you know, we're really confident in the value proposition that we have and that we're building. We think we've got some really special films, and we think we've got a really special comprehensive offering that includes now equipment and service, b ut it's very, very new, very recent. The Moda acquisition is only a few months, a few months old. Your next question comes from the line of Sam Sal with Citi. Your line is open. Morning, evening, all. Thanks for taking my question. Just a simple one on the balance sheet. Just wondering if we don't get that H2 volume stabilization, would that result in net debt outside your range, or would there be enough in the seasonality and the unwinding of working capital to bring that down, irrespective of if volumes didn't continue to decline? Yeah, thanks for the, for the question, Sam. I can take that one. Yeah, look, I, I mean, we finished the quarter with net debt at kind of $6.5-$6.6 billion and leverage at 3.3 times, which was right in line with where we expected it to be. You know, and that takes into account the relatively normal seasonality of the cash flows from Q4 to Q1. We typically see a tick up in leverage, you know, versus we were at three times in June. The other factors impacting leverage are really on the two temporary impacts. Firstly, we're lapping now three quarters of divested Russia earnings, and that's being reflected in the last twelve months EBITDA, and that's ahead of us getting the benefit of the restructuring, which is gonna start to come through in H2. So you'll start to see that improvement, absolutely. And then the other one is really the higher than normal working capital levels. You know, we've been driving inventory down, but at the same time, payables have come down at a faster rate, really just on the back of the lower demand environment. So again, you know, we'd expect that to start to normalize as we get into the H2 and, you know, we'll get- we'll get the leverage back to three times by the end of June. So that's kind of the way we see it. And as we look forward from there, you know, there'll be further opportunity for improvement, particularly in the working capital as it continues to normalize and as we cycle through the full 12 months of the Russia and the benefits from the restructuring that we're gonna get into the P&L. So, you know, we're on track there. Got it. And just maybe a follow-up, you talked at length about your volume expectations for the year. Maybe thoughts on, pricing, kinda ex pass-throughs, given end market weakness, and ongoing destocking? Well, look, our pricing strategy has been first and foremost to compensate for inflation, and, you know, that's our approach. It's as simple as that. We've had inflationary pressure on the cost base for 12-18 months now, and as a result, we've taken price as a high priority from an industry leadership perspective, and certainly prioritized price and inflation recovery over volume. Inflation rates are starting to ease. We haven't seen large parts of the cost base experience decreases yet, but the rate of inflation has eased, and so our pricing, the pace of our pricing will ease as a result. And, you know, beyond that, you know, our pricing approach is really just a price for value. If we have a differentiated value proposition, you know, there's an opportunity to generate a positive price. But, you know, that's something that needs to be earned every day in the marketplace. Your next question comes from the line of Mike Roxland with Truist Securities. Your line is open. Thank you, Ron, Michael, Tracey, and Damon for taking my questions. Actually, just one question, really. You know, the company has made solid progress streamlining the portfolio, another $70 million of savings this quarter, closing plants, realigning production, headcount reduction. If when volumes begin to improve, should we expect to see a reversal of this and you putting more capital to work in new plants, increasing headcount? Or really, does your existing footprint, as it stands today, have enough excess capacity to absorb incremental volumes without any additional investment? Yeah, it's a great question. You know, I think the short answer is we're gonna be well set up when volumes come back, and I think we're gonna get even stronger earnings leverage as volumes return. And we're taking really two sets of actions on the cost side. So the first, the $70 million that I referred to earlier, that you just referenced, is really ongoing productivity oriented benefits, where we're taking shifts out, reducing headcount, driving procurement, optimizing the overhead and SG&A part of the business. Kinda steady state, but aggressive belt-tightening, I would say. That's one form of cost reduction, and I don't think a lot of that. Now, some of it will come back. Obviously, as volumes come back, you need to add, you might need to add shifts, but we will be in a much better position from a leverage perspective as volumes return. So that, that's on that side. The second stream of cost takeout relates to more structural initiatives, which are more the restructuring type, which are plant closures and more permanent and deep cutting overhead reductions. We really haven't seen the benefits yet from those initiatives. Those will start to build in the H2, as Michael referred to earlier. We expect to get about $35 million of benefits from more structural initiatives in the H2. And those also will be long-lasting and sustainable because we're gonna be taking out several plants in the network that we can compensate for with the remaining footprint. In many cases, when we close a facility, we relocate the productive assets into another facility, and we don't really take capacity out necessarily. So I think we're gonna be well-positioned when and if volumes return. Thanks, Ron. Good luck, good luck in the Q2. Thanks. Your next question comes from the line of Richard Johnson with Jefferies. Your line is open. Thanks very much. Ron, can I just return to the subject of price and in particular, the US protein market? I mean, I'm interested in the comments you make, and I'm just trying to reconcile that with what others in the market are saying, and they're referring to significant overcapacity in that market, which makes sense given how weak the end market is, which is leading to acute price pressure because of that unused capacity. Just be interested to get your thoughts on that. Yeah, I don't know that the pricing pressure or the intensity of the competition is any more so at the moment in that segment than it has been in the past or that it will be in the future. You know, you have to remember as well that the assets that are deployed against that segment are fungible across a range of categories. So we have film assets that produce into the protein market, also produce specifications for dairy and a number of other segments as well. So, you know, it's certainly not a market that we look at as being overly, overly capitalized or having much excess capacity. And then as you sort of spread that through the U.S. around the different categories, I mean, can I extrapolate from your comments around how that you're seeing positive price mix trend? That's really across all the categories, or are there any areas where price is starting to, or you're starting to give back price, which inevitably you would expect, given how far price has gone, at some point that'll normalize, correct? Look, I think it's gonna be a function of inflation. The rate at which pricing changes in this industry, I think from this point forward, will be primarily a function of the rate and the direction of travel of inflation. You know, it's not been an industry over the years that's had positive price in the absence of value. It's been an industry that is compensated for inflationary cost pressures, and I think that's kind of where we're at right now. Got it. That's very helpful. Thank you. Your next question comes from the line of Cameron McDonald with E&P. Your line is open. Good morning, Ron, Michael. Can I just ask a question on slide 10? So you've got the average of high single digit of 8% from 2014 to 2023. But if we think about the environment, you know, we had interest rates collapse to zero during that period. You've had significant transformational acquisition with Bemis. You've had the buybacks, et cetera. Like, how—when you then talk about the high single digits expected long-term, how do we marry that up? Or do you still think that, you know, there are significant M&A opportunities and the synergies that will create? And then, you know, but I suppose I come back to that interest rate environment. You've got a significantly higher interest rate that's gonna be impacting that EPS. Yeah, look, it's a good question because it's really a segue into why we're confident that we're gonna get back to kind of high single-digit growth rates going forward. And, you know, we just believe in the conviction of our formula that's that served us well over many years. And that is that volumes in a normal environment will grow sort of low single digits. We will get leverage in terms of higher rates of profit growth than that because the mix will improve over time, and as we generate more productivity in our operations. So low single-digit volume growth will translate into higher rates of profit growth, and then the business generates a substantial amount of cash and really excess cash, excess to the needs of the business from a CapEx perspective and, and to fund the dividend. And with that extra cash, our first priority will be to do acquisitions, as we've done over a long period of time, and short of acquisition opportunities, we'll buy back shares. And so you go from low single-digit volume growth to something higher than that, mid single-digit type profit growth organically, and then the cash flow and balance sheet optionality to generate further EPS growth through either acquisitions or share repurchases. So that's the formula. That's the formula that's delivered the 8% over almost a decade, and that's the formula that we'll expect to deliver the same types of earnings growth rates going forward. Thank you. Thanks. As a follow-up to that, just on the M&A, you know, when you think about the industry at the moment, you've spoken about, you know, the industry doesn't really have real price power without value. You know, you've got a changing, you know, expectation around sustainability. We're seeing, you know, we've obviously seen WestRock and Smurfit get together. You know, do you think the industry needs to more significantly and, and aggressively consolidate to change some of those industry dynamics? Well, look, we have been big beneficiaries and we've driven a lot of consolidation over the years. I think that what's important is industry structure and industry dynamics at a segment level. The fact is that there are a lot of players that are very small in the industry. So when we think about our M&A agenda, you know, it's largely gonna be bolt-ons. We've been quite active. Even in the last 12-15 months or so, we've done four small deals, and you can expect to continue to see us do that. Look, a lot of the value that comes out of those deals is cost synergies. You know, I think that's where most of the value is gonna come from, in this, particularly in this type of environment, and we're gonna be active participants in the M&A space. Your next question comes from the line of Nathan Riley of UBS. Your line is open. Thanks, Ron. Just to follow up in terms of that Free Cash Flow allocation point, can you talk about where deleveraging sits in the context of the allocation of excess Free Cash Flows? Yeah, I mean, you know, obviously, we're committed to an investment-grade balance sheet. And so for us, that kind of, you know, we've had been in the range of 2.5-3 times leverage, you know, for a long time, and that's, that's where, you know, you, you should expect us to sit, you know, as we move forward. So, you know, to, to Ron's point, as the earnings grow, you know, the cash flow grows, and we can, we can reinvest that, in the base business. So you should expect, CapEx over a period of time to increase as well. So we've been increasing our level of CapEx to grow organically. You know, that's been in that 3%-4% range. It's now, you know, as we look longer term, that's probably gonna be more in that 4%-5% range. You know, that's gonna drive the organic growth, and we still have cash left over, you know, to invest in the M&A agenda as a priority, and again, grow earnings through that, create value, and then do buybacks. And so, you know, as you look at all that, we would continue to maintain that leverage in that 2.5-3 times range. So, you know, that's how you should think about it. The excess cash will be deployed in that way. That's great. Thanks, Michael. Line of John Purtell with Macquarie. Your line is open. Good day, Ron and Michael, hope you're well. Just a couple of questions, if I could. The first is on GLP-1. Obviously, there's been concerns across the sector, and it's obviously, you know, all still sort of long-term in terms of potential impacts on food consumption and packaging demand, but you know so still very early days, but do you have any general observations to make? Yeah, I do, John. I think firstly, I would just, y eah, I just want to reinforce that we have seen no impact whatsoever on demand in our segments from reduced consumption resulting from these drugs. So the first point I wanna make is that we've seen no impact as of yet. I think in terms of trying to estimate the future impact, you know, I think there's some things that we, there's plenty of things we don't know, and there's some things that we do know based on history. You know, I think what we don't know is the rate of adoption of these drugs. We don't know what the impact on total consumption will be. We don't know what will happen when people go off the drugs in large numbers. So there's a number of unknowns that I think, you know, only time will tell. What we do know is the food and beverage industry over many, many years, over decades, has been fantastic at innovating to address consumer needs as they change and evolve over time. Think about the evolution towards lower fat, low sugar, less salt, organic. The food and beverage industry has navigated those trends really successfully through innovation and through adapting product portfolios to suit whatever consumers are prioritizing at that point in time. So we know that that's been the history and that's been the track record, and I expect that that would be the same going forward. And the other thing that we know is, to the extent there's reduction in portion sizes or serving sizes, it tends to, and has historically been very good for packaging intensity, and units of packaging have tended to go up as portions have gone down, and as serving sizes have been reduced. So, you know, I think it's early days, as you said. I would lean more on the things that we know to have been true historically, and probably put more emphasis or more weight on those factors than the things that we don't know at this stage. Got it. Thank you. And just second question, for Michael, if I could. Page 11 of the news release obviously shows that reconciliation between reported and adjusted earnings. We can see that the hyperinflation impacts were higher than last year, and Russia, Ukraine costs were higher as well. So what were the key drivers of that, and should we expect to see those Russia, Ukraine costs reduced going forward? Thank you. Yeah, sure, John, I can take that one. Look, the Russia, Ukraine costs are really the, that's the cost of the restructuring. So, you know, we've moved into the program, and Ron touched on the program earlier, the structural program, where we've, you know, committed to spend about $170 million in cash from the Russia proceeds, you know, across, you know, some plant closures. So there'll be, you know, 7-10 plant closures, some SG&A right sizing. And, you know, we've, you know, so they, they are the restructuring costs there, and they're gonna continue through the year. You know, you'll see those continue on, it's. And obviously, from that restructuring, we're gonna generate the $50 million in EBIT benefits, $35 million of which will come in H2, and then a further $15 million into FY 2025. So, you know, you should expect to see, you know, a continuation of some cost in that line. In relation to Argentina, you know, there was. Argentina is a hyperinflation economy, and, you know, we have to account for Argentina certain ways, and really, that's just there was a devaluation in August, and that's the devaluation impact. On the monetary assets, which was higher than it was in the prior year. But again, you know, that seems to have eased at the moment, but we'll see where that goes as we work through the year. Your next question comes from the line of Brooke Campbell-Crawford with Barrenjoey. Your line is open. Good afternoon, thanks for taking my question. Ron, just earlier on, you mentioned about the destocking in healthcare segments likely to continue in the H2. Correct me if I'm wrong, I think you mentioned that. Just. Right. Can you provide some color there on why you think that's gonna play out, and why you might have more visibility on destocking in that part of the market versus other, other categories that you serve? Thanks. Yeah, it's a good question. You, you've got that right. I did refer to destocking accelerating really through the Q1 in healthcare, especially in the medical device side of that business. And it really comes down to the fact that there were some real supply constraints over the last 12-18 months in that segment or in the products that we supply into medical, predominantly, but also pharma in some product categories. Where we and the rest of the industry lived through some real raw material shortages, which I think led to some stock buildup in some segments. And so we're now on the other end of that, and the raw materials are now more available. There's no longer a shortage, and we can supply in real time. So customers are sitting on a reasonable amount of inventory that needs to be worked down. I think, you know, we started to see that in the Q1. I think we'll see that continue into the H2 of this fiscal year. Okay, thanks. And just one quick follow-up on slide thirteen there, you just talked to some progress you're making on designing the packaging to be recycled, and great progress there over the years. But in flexible packaging, there's still, you know, 11% of the portfolio that isn't designed to be recycled, and there's no trials underway at the moment by the looks of that graph. So can you just talk to that part of the portfolio? What's the plan, and do you have a commitment still to have 100% of that portfolio designed to be recycled by 2025? Thanks. Yeah, look, we're gonna continue to shrink that part of the graph. So the 11% you're referring to is, is 6% lower than it was a year ago. And we've been making really good progress. It's, it's substantially improved over even three, four years ago, and we're gonna continue to close that gap. Look, are we gonna get all the way to 100%? I'm not sure. I think we're gonna get really close. Some of the more sophisticated structures where the material is providing multiple types of functionality, whether it's, whether it's barrier or, sealant strength or, or, or physical strength, there's a number of different components that go into some of the more sophisticated materials that we make. Those will take the longest, but we're still at it, we're hard at it, and we haven't wavered in our ambition to get to 100%. And so, you know, we've got our sights on closing that gap. Your next question comes from the line of George Staphos with Bank of America. Your line is open. Thanks for taking the follow-on. I'll make it quick, guys. So Ron, if we think about the $200 million last year of temporary savings, if that's the way you framed it, and then the $70 million so far this year. At the end of the day, how much of that truly will be temporary, and how much do you think will be structural? I know it's hard to say, we won't hold you to the basis point, but, you know, if you were in our seat trying to model Amcor, what would you try to bake in? And then just a minor question, I thought I heard you say, or Michael, maybe it was you, that 2Q, in terms of earnings and EBITDA might be flat to slightly down versus 1Q. I just wanted to make sure I heard that correctly. Thanks, guys, and good luck in the quarter. Yeah, so I can take the second point there, George. Yeah, you heard that correctly. I mean, Q2, Q1 and Q2 typically are pretty similar. You know, if you look over the history of Amcor, pretty similar. We're not expecting anything, you know, to be different in this dynamic. I mean, Q2 is gonna be broadly in line with Q1, perhaps marginally less, but H1 as per our expectations that we've outlined. So no. Yep N o change there whatsoever. Yep. Yeah, look, on the cost side, George, I'm not gonna parse it down and give you a number. What I would say is, you know, most of the cost that's come out has come out of the operational side. We, the overhead portion of the cost reduction is certainly gonna stay out. On the plant side, to the extent we've driven procurement benefits, those will be sustained. And then to the extent that we've taken costs out by removing shifts, then obviously we'll put those shifts back on as volumes return. So I would just describe it more in terms of the buckets of costs that have come out. We don't think about that whole quantum of cost as being temporary necessarily. We do think there's some that stays out of the business even as volumes return. Thanks, Ron. Appreciate it. Good luck in the quarter. Thanks, George. Ladies and gentlemen, this concludes our question-and-answer session. I will now turn the call back to Ron for closing remarks. Okay, thanks, again, to everyone who's joined the call today. Thank you for your questions, and thanks for your interest in Amcor. Operator, with that, we'll close the call. Thank you. This concludes today's conference call. Thank you for joining. You may now disconnect your line.