Amcor rides demand surge as US, Europe re-open

Growth in meat, coffee and pet food packaging offset a fall in demand for healthcare as Amcor delivered a record annual profit.

Amcor saw its net income rise 53 per cent to $US939m and forecast adjusted earnings per share growth of 7-11 per cent in the 2022 financial year.

Global packaging giant Amcor delivered record annual profit as growth in meat, coffee and pet food packaging offset a fall in demand for healthcare as consumers put off elective surgeries and collecting prescriptions due to the Covid-19 pandemic.

Amcor saw its net income rise 53 per cent to $US939m and forecast adjusted earnings per share growth of 7-11 per cent in the 2022 financial year as economies in North America and Europe re-open after extended lockdowns from the pandemic.

Its flexibles unit, which drives the bulk of earnings, saw 9 per cent growth in adjusted earnings to $US1.4bn as people consumed more food and coffee along with supplies for their pets.

Double-digit growth in China and India was also recorded, underscoring the reach of its global operations.

Demand for sports drinks, ready to drink tea and juices saw a 8 per cent jump in its North American beverage unit over the 12 month period, driving a 8 per cent rise in rigid packaging earnings to $US299m.

The company last year credited “pantry loading” from US consumers during COVID-19 for boosting earnings but said that rush toward panic buying had now eased off with major economies in North America and Europe re-opening their doors following a vaccination blitz.

Amcor chief executive Ron Delia. Picture: John Feder

“We’re seeing consumption normalise in most parts of the world,” Amcor chief executive Ron Delia told The Australian.

“I think it’s too early to be able to tell exactly what the lingering consumer behaviour changes are out of the pandemic, but we’re seeing much more away from home consumption in Europe and North America.

“There are some categories that remain elevated in terms of stay at home consumption but generally speaking we are seeing things come back more of less to where they were.”

The company, which traces its origins to establishing Victoria’s first paper mill on the banks of the Yarra River in the 1860s, now runs 230 packaging factories across more than 40 countries.

Amcor spent $US6.8bn acquiring one of its main rivals, Bemis, in 2018 to boost its global clout and is looking ahead at smaller deals after completing the deal.

The Bemis buyout increased Amcor’s footprint from 30 countries to 40 and led to the company listing on the New York Stock Exchange.

Management expects to exceed the original $US180m synergy target from the Bemis transaction by an extra 10 per cent, with $US75m of those savings captured in the current fiscal year.

Bemis makes flexible packaging for healthcare companies and consumer packaged goods providers like Kraft Heinz.

Amcor shares rose 2.5 per cent to $17.04.