Amcor Aims for $1.8B-$1.9B Free Cash Flow and 12-17% EPS Growth in 2026 with $650M Synergy Plan

Amcor targets $1.8B-$1.9B free cash flow and 12-17% EPS growth in fiscal 2026, with a $650M synergy plan. CEO Peter Konieczny highlighted the completion of the Berry Global acquisition, stating that the company is now 100 days into combining the two businesses. The acquisition has transformed Amcor's ability to serve customers and create value.

Amcor plc (AMCR), a leading packaging company, has reported significant progress in its integration with Berry Global and set ambitious financial targets for fiscal 2026. CEO Peter Konieczny highlighted that the company is now 100 days into combining the two businesses, which has transformed Amcor's ability to serve customers and create value. The acquisition has been a key driver of Amcor's financial outlook for the coming year.

The company expects to achieve strong adjusted EPS growth of 12% to 17% in fiscal 2026, with free cash flow expected to double to $1.8 billion to $1.9 billion. The synergy realization is tracking to plan, and Amcor anticipates delivering $650 million in total synergies through fiscal 2028, including $260 million in fiscal 2026. This synergy plan is a key component of Amcor's strategy to drive growth and create shareholder value.

The acquisition of Berry Global has had a notable impact on Amcor's financial results. In the fourth quarter of fiscal 2025, Amcor reported a step-up in quarterly net sales EBITDA and EBIT, driven primarily by the two months of Berry contribution. The Flexibles segment saw a 1.5% decrease in volumes but a 18% increase in net sales on a constant currency basis. The Rigid Packaging Solutions segment experienced a 121% increase in net sales on a constant currency basis, driven by the Berry acquisition.

However, the North American beverage business underperformed due to operating challenges at high-volume sites, resulting in elevated costs. This segment's EBIT declined by approximately $20 million year-over-year. Despite these challenges, Amcor remains confident in its ability to generate procurement savings and achieve synergy targets.

Amcor's management has also announced a strategic review of businesses that are less aligned with the core portfolio, including the $1.5 billion North America beverage business. The company is exploring alternatives to maximize value from these businesses. Additionally, Amcor expects to reduce its leverage ratio from 3.5x to approximately 3.1 to 3.2x over the next 12 months.

Analysts have expressed concerns about the pace of operational recovery and the ability to achieve synergy targets if volume trends remain subdued. However, Amcor management maintains a confident stance, emphasizing their commitment to long-term shareholder value creation through focused execution and strategic action.

Amcor's integration with Berry Global is progressing well, and the company is on track to meet its financial targets for fiscal 2026. The acquisition has provided Amcor with new opportunities to serve customers and create value, and the company is well-positioned to capitalize on these opportunities in the coming year.

References:
[1] https://seekingalpha.com/news/4485616-amcor-targets-1_8b-1_9b-free-cash-flow-and-12-17-percent-eps-growth-in-fiscal-2026-with-650m