Amcor PLC (NYSE: AMCR) stock rose over 3.8% in the pre-market session of Feb 3rd, 2021 (Source: Google finance) after the company posted better than expected topline results for the second quarter of FY 21 & raised the 2021 full year guidance.
The company’s leverage is 2.9 times on a trailing 12-month EBITDA basis. The company generated adjusted free cash flow of $276 million was higher than the prior year, excluding approximately $50 million of U.S. cash tax payments that were deferred under the CARES Act from Q4 2020. And as a reminder, the cash flow is seasonally weaker in the first half of the fiscal year, and this outcome was in line with the expectations, which leaves the company on track to deliver more than $1 billion in this financial year. The company remains focused on improved working capital management, and execution has been strong across all businesses with the rolling 12-month average working capital sales ratio continuing to improve, closing at 8.2% for sales at the end of December. This represents more than a $300 million reduction in average working capital over the last 18 months since the Bemis acquisition.
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AMCR in the second quarter of FY 21 has reported the adjusted earnings per share of 18 cents, beating the analysts’ estimates for the adjusted earnings per share of 17 cents, posted better than expected topline results for the second quarter of FY 21. The company had reported the adjusted revenue of $3.1 billion in the second quarter of FY 21, beating the analysts’ estimates for revenue of $3.08 billion. Flexibles segment’s overall segment volumes were 2% higher than the prior year, which resulted in net sales being 1% higher than the first half of last year, excluding the unfavorable impact of currency and the pass-through of lower raw material costs. Adjusted EBIT for the period increased 9% in constant currency terms, and margins expanded by 110 basis points, driven by the higher volumes, strong operating cost performance and $30 million of cost synergy benefits. The Flexibles business continue to improve as the company extract benefits from the Bemis acquisition, deliver innovative new products to support customer growth and operate the plants efficiently.
For fiscal 2021, the company expects constant currency EPS growth to be in the range of 10% to 14%. And the company continues to expect adjusted free cash flow to be between $1 billion to $1.1 billion, the company sees more opportunities to deliver cash flow toward the top half of that range.