Amcor plc (AMCR) Earnings Call Transcript & Summary

Good morning, good afternoon, good evening, depending on where you are. Welcome to Amcor's Virtual Investor Briefing. Today, we're linking up with speakers in several locations, Chicago, Zurich, Shanghai, So Paolo and here in Melbourne. I'm Tracey Whitehead, Head of Investor Relations at Amcor. And as host today, my role is to ensure you get the best out of the 3 hours we have together in this virtual format. Before we move on, I point you to the disclaimers in the materials made available today, including those related to forward-looking statements. Please see our SEC filings for risks and uncertainties related to financial results. We have 3 objectives for today: first, we'll provide an overview of Amcor; second, we'll clearly outline our investment case; and third, we'll introduce you to several members of Amcor's management team. In terms of the agenda for today, our Chief Executive Officer, Ron Delia, will begin the briefing, and this will be followed by presentations related to sustainability and Amcor Rigid Packaging before the first of 2 20-minute Q&A sessions. We'll then take a 5-minute break before turning to Amcor Flexibles, the second 20-minute Q&A session, and then Ron will finish up for a few closing remarks. Before beginning the first session, there are a few additional points to help us navigate through the briefing smoothly. For the best viewing experience, please switch to speaker view. To help us manage the Q&A sessions, please ensure you have your full name displayed on your Zoom profile. Please adjust this now, if necessary. The 2 Q&A sessions will be panel style, and you'll have an opportunity to direct questions to the presenters you've just heard from. [Operator Instructions] In the event we're not able to cover all the questions asked today, the Amcor Investor Relations team will be in contact with you after the event. With that, I'll hand over to Ron Delia to go through the first session, why invest in Amcor?

Thanks, Tracey, and thanks for all of you for joining today in different parts of the world, different times of day. Very much appreciate it. And of course, we wish we were doing this in person. I think we're going to have a good showing here today. We've got a number of members of our senior management team, as Tracey alluded to, and we've also got some videos to help bring you inside our facilities to the extent that we can in this virtual setting. We'll start here today where we always start, which is with safety. Safety for us is a value. It's our most important value and business priorities at times shift, but values really are pretty steadfast. And safety is absolutely at the top of the list for us. We've been at this for quite some time now, probably since the late 1990s, actually. And you can see the progress on the right-hand side of the slide, we're quite proud of that, but we are committed to no injuries. We're not there yet. But on a 1 million man-hour basis, we're at 2.8x -- 2.8 recordable cases per million man-hours worked, which if you're familiar with the OSHA benchmark is a high watermark. We'll get right into it today, which is the theme of the whole event really is why invest in Amcor, and there's a lot of things we could talk about with regard to the company, why work for the company, why buy products from Amcor. But unapologetically, today is about why to invest in Amcor, and this slide here captures our key messages around the investment case. Firstly, we're a global industry leader with 160-year history, strong track record and a clear strategy going forward. Our organic growth has been very consistent. We're supplying stable end markets. We've got several levers to pull, which we'll talk about in quite some depth today. And all up, we consistently deliver 3% to 4% organic profit growth. Our dividend has always been an important part of the investment case, remains compelling. We'll continue to grow, currently yielding over 4%. And we have an investment-grade balance sheet with lots of capacity to invest and no shortage of opportunities for growth projects and really no constraints in our ability to pursue them. And then lastly, we have momentum right now. We finished a very strong financial year on June 30. We're in the middle of another one. And we've got very good momentum across the businesses organically and also coming from cost synergies as a result of the Bemis acquisition. All up, this is an investment story that's around 10% to 15% of shareholder value each year, which is a combination of EPS growth and dividend yield. And we'll go through each element of that return in more detail here this morning or this afternoon. Amcor on one slide, we would present in this way. It's, again, 160 years old, founded in Australia in 1860. The company does about $12.5 billion in sales, just shy of $2 billion in EBITDA, listed in both New York and in Australia and a global business in over 40 countries around the world. And most importantly, the track record for the company over the last 10 of those 160 years has been quite strong. And I'd start with the financial approach the business has taken. We've always maintained a relatively consistent capital structure, consistent approach to funding the business. And we've been quite active in a number of transactions, but there really have been no boom or bust cycles as it relates to our balance sheet. We've been maintaining an investment-grade position for over 20 years. From that position, we've delivered consistent earnings growth, high single-digit EBITDA CAGR, 8% EPS growth over this period, an attractive dividend that's yielded on average 4.6%. And all up, shareholders have been rewarded. The total return to shareholders from the appreciation of the stock price and the dividends has been 15% over the last 10 years. The company today is essentially supplying consumer end markets. It's basically what we do. Food, beverage, health care would be the largest of those 3, a combination of big multinational customers and local customers or national players. We are supplying 4 different primary packaging products, Flexible Packaging being the largest, Rigid Packaging as well as specialty cartons and closures. And we're a global business. We operate globally, as I mentioned, over 40 countries, 230 locations. And importantly, the company feels very global. There's no one dominant region. As Tracey pointed out, you'll hear from leaders today in Chicago and Zurich, So Paulo, Shanghai, Melbourne. And that's pretty much what you would see in any Amcor leadership gathering. It's a pretty diverse group, and we pride ourselves on maintaining that feeling. The other point I would make on this slide is the emerging market position that the company has. We've got over $3 billion business in emerging markets, which in and of itself is quite diversified across Latin America, Asia and Eastern Europe. 27 markets in total. And I'll come back in a minute as to why those are so important for us going forward. Our strategy, which has not changed, has 3 elements: first is the portfolio of businesses that we're in; the second is the leverage we get from those businesses, which we get through the differentiated capabilities we've branded the Amcor way; and then lastly, most importantly, our aspirations and what we're trying to achieve particularly for shareholders. A few words about our portfolio, really 3 points I want to leave you with. The first is that we've been very active managers of the portfolio for quite some time, really for several decades. Very active on optimizing the portfolio, always with an eye towards maximizing shareholder value and also evolving and meeting evolving consumer needs, which have led us in different directions over the years in terms of package formats and substrates. But there's no sacred cows. We've been quite active both buying and selling businesses, obviously, most recently with the Bemis acquisition. And even this year, we've done some portfolio pruning, some smaller parts of the business, just to sharpen our focus that much more. The second point about the portfolio is that all the businesses now that we operate have some things in common. First of all, they're all consumer packaging, primary consumer packaging, where innovation is particularly important and the opportunity to add value and help our customers differentiate is there, and it creates an opportunity for us. Secondly, industry structure, critical. We would say, probably the single most important determinant of success in packaging and multiple paths to winning, including through scale and leadership positions. And probably, the most important part of the slide here is on the right-hand side, which is the stable of businesses that we're in today are almost all in leading positions. Starting with our Global Healthcare business, Flexible Packaging in all of the major Flexible Packaging markets around the world, Rigids in the Americas and specialty cartons globally. Each of those businesses occupies a leadership position in the place that they play. And the last point about the portfolio is that the businesses are all very complementary, and we get real synergies on an ongoing basis from having these businesses together. Cost synergies are obvious commercial benefits, but also the talent and capability advantages that we generate by having these businesses as part of the same stable. The second part of the strategy is about what ties it all together, and we have run a relatively decentralized operating model for quite some time, but we choose to get leverage and competitive advantage through differentiated capabilities. And we call those The Amcor Way. These are the 5 capabilities, we think, the 5 drivers of success that we believe matter to winning in the packaging industry. It's not everything. But we've made choices to double down and resource up in these 5 areas that you see on the page here, competitive advantage but also leverage and scale benefits and additional growth and productivity, not to mention the alignment of our team around the world in the disparate places that we operate. Probably the best way to bring The Amcor Way to life is just with one example around commercial excellence. This is the part of The Amcor Way we've been at the longest, goes back to 2006. Common in all Amcor businesses would be the way we manage the commercial side of the business. The pyramid on the right -- on the left-hand side would describe some of the things that I'm talking about here, but capabilities like key account management or pricing or marketing. One example on the page here is a tool that we use to manage profit in a very granular way at a product or customer or even transaction level, and it supports the ability to make very informed mix decisions. On the bottom right, you can see a scatter plot. Each dot, in this case, would represent a customer or a transaction or a product segment, and the idea is to commercially optimize that mix and drive higher margins and sales as a result. The Amcor Way has certainly contributed in a big way to the performance of the company over the last several years. This is a margin chart going back 10 or 11 years for the business. EBIT margins have expanded quite consistently 10, 20, 30 basis points every year with a few step changes in there as a result of bigger portfolio moves, and The Amcor Way has absolutely been a major contributor to that outcome. And we expect it to continue going forward, including in the last fiscal year, where we added 100 basis points of EBIT margin to the business. Now the last part of our strategy is arguably the most important, which is our aspirations and what it means for shareholders in particular. I mean we've been around for 160 years, and we know it to be around for another 160, we've got multiple stakeholders that we need to be attentive to. But we also know we're a public company and without any apologies, we know that our shareholders are the most important. And so we're going to talk about how we think about winning for shareholders in a little bit more detail here. This slide is about capital deployment as much as anything, but it's our shareholder value-creation framework, and it talks about how we take the cash flows of the business, which are very consistent, defensive, given our end market exposure, and how we allocate that capital and that cash every year to generate 10% to 15% value for shareholders. I'll walk through each of these in turn. But before we walk through the framework, I think it's important to check in on the track record, which is this slide here and basically says that the business has been performing for the last 6 or 7 years very much in line with this model. We've had steady sales growth of about 2%, high single-digit EPS growth at 8% plus a dividend has meant that, on average, over the last 6 or 7 years here since 2014, we've been delivering 12% of shareholder value. Just so happens that lines up almost exactly what the shareholder experience. TSR over that period has been 11%. And so we feel pretty confident that this is what the business is set up to deliver and will continue to deliver indefinitely into the future. Now I want to walk through these drivers. Starting with the organic growth drivers. Now our business leaders are going to talk in more depth about each of these themes. But I'm going to just highlight what you can expect to hear from each of those leaders that you hear from later today. There are multiple sources of organic growth in this business. Starting with the market that we're in, the markets that we're in, which all grow, the way we manage mix, as I alluded to earlier, innovation. And cost productivity, while we won't spend a lot of time talking about it today, we're going to focus more on the commercial side of growth. It's a big part of our formula. And we get scale advantages by virtue of the size that we have and also capability benefits that come from areas like procurement, et cetera. So cost is very much a part of our agenda. Happy to take questions on that, but we've chosen to focus on the first 3 elements of organic profit growth. And I would also say a word here about sustainability. Now sustainability, without question, is the single biggest driver of organic growth in this business going forward. We've allocated an entire section of this agenda on the topic of sustainability as it relates particularly to more sustainable packaging. And so Dave Clark, who leads that part of our company, will speak directly after me on all aspects of our sustainability agenda. Quickly to hit on some of these other growth themes. Look, our end markets grow. We're supplying consumer staples, food, beverages, health care, in particular. They grow because economic activity grows, consumption grows, population growth, all of those macro drivers contribute to steady growth as well as then the packaging intensity in each of those segments grows -- contributes to growth as well, premiumization, convenience, et cetera. All up, developed markets continue to grow at low single digits. Emerging markets grow a little bit faster than that at mid-single digits. And as I mentioned earlier, I think it's worth an extra comment or 2 on emerging markets. You'll hear from some of our emerging market leaders actually later today, but they're a really important part of our story. We've been operating in most of our emerging markets for decades. We've been operating profitably and successfully. And we continue to be very bullish on emerging markets going forward. There are a number of key drivers of growth in emerging markets that make them particularly interesting for us. There's an intensity of use curve on the left-hand side of this chart here, which basically just plots packaging consumption per capita on the vertical axis and then per capita incomes on the horizontal axis. And I think it should be quite evident that at lower income levels, you've got less sophistication in the retail setting, quite often you have wet markets. You just have less disposable income. As consumers shift and incomes rise, consumerism rises and other things become more important. You have urbanization and you have convenience and functionality becoming more important parts of the way consumers go about making choices. Packaging becomes a lot more important. And many of our markets are right in the middle of this kick point here. China, obviously, being the largest, but many others as well. So we expect continued mid-single-digit growth from our emerging markets exposure going forward. And we've been successful for 20, 25 years in most of these markets for many of the reasons that are outlined on the right-hand side of this slide. Most importantly and listed first there is the experienced and profit-focused local leadership teams that we have. And I can't emphasize this enough that emerging markets for us have always been about generating profit and returns. We've never been about expanding the number of flags that we've planted or subsidizing top line growth for any long period of time. These businesses are all quite self-sufficient and robust, and it starts with the local leadership teams that we have in place. You'll get a chance to hear from 2 of those local emerging markets leaders later today. The next driver of organic growth, which you'll hear about from all of the businesses but is worth mentioning here is mix management. Ongoing migration of the product mix, the segment mix, the customer mix towards more higher value added, more differentiated parts of the market has been a big source of our profit growth over the years, the margin expansion and also allows us to make informed and purposeful choices about the top line. Sometimes foregoing some top line in the interest of bettering our position and furthering our margin position and differentiation in the marketplace. On one dimension, which is segment mix, the best example to point to is health care. We have a global health care business that's approaching $2 billion in sales, really 2 segments, medical device packaging and pharmaceutical packaging. Split -- the sales for the combined health care segment split roughly 50-50. As I said, it's a global business across both Flexible Packaging and Rigid Packaging. Lots of opportunities to differentiate. The value proposition is quite broad. Our ability to add value is quite high. And this set of segments, medical and pharma, would be as attractive as any in our mix as a result. Very briefly on innovation, where, again, we'll spend more time later today. This is clearly a differentiator for our company relative to our peers. We get lots of positive recognition, most importantly, from our customers but also from the industry at large. We've got extensive resources. We would spend over $100 million a year on R&D with an extensive patent portfolio that's growing over time and continues to set us apart. We made a big announcement today on a first of its kind, Flexible Packaging development. It's a pouch that's retortable, which means it can be heated to almost 200 degrees. The food is cooked inside the pouch and it's fully recyclable. We'll talk more about that, I'm sure, later today. So innovation is an important part of our agenda in every one of our businesses and a big contributor to our growth going forward. Now if we think about the second way we allocate capital on a regular basis, there's the dividend, which has been attractive and has been growing and continues to be compelling, particularly in a low rate environment. You can see the current yield is about 4.7%. The S&P is yielding less than 2, so it's 2.5 times the yield you get in the S&P more broadly. And obviously, with rates as low as they are, it becomes even more compelling at the present point in time. The dividend has also been growing consistently. We were admitted earlier this year into the S&P 500 Dividend Aristocrats list, which puts us in some really fantastic company with others who are as committed to their dividend as we are. And then lastly, but certainly not least, we've been allocating a substantial amount of cash after capital expense in the business and after dividends. Over the last 10 years, that's been over $3 billion of cash in acquisitions and buybacks. That's about 2/3 M&A, about 1/3 of that cash has gone towards buybacks. That's before the Bemis acquisition, which was an all-stock deal. We've completed more than 30 deals in the last 10 years, and we have a really rich pipeline looking forward, and we will absolutely be active across our portfolio. Just a word on the Bemis transaction, which was, by far, the largest deal in our history, which we closed in June of 2019. A brief word on the status after 15 months. In short, it's gone very, very well so far. Financial benefits accruing in the form of cost synergies, also organic margin expansion based on the momentum of the business, the quality of the business that was acquired, has been phenomenal. And the strategic benefits are starting to become clearer and clearer every day as well. So I've just described how we allocate the cash flows of the business for the benefit of shareholders. I've walked through the allocation towards CapEx and the drivers of organic growth, which you're going to hear more about, the dividend, which is an important part of the investment case here, and then the acquisition and buyback history. I think another way to look at this, simply put, is that the sources of return to shareholders can be described as 5% to 10% constant currency EPS growth and a dividend, which has yielded historically between 4% and 5%. So all up, 10% to 15% shareholder value proposition each year. I'm going to pass it over to Dave Clark here in a second. But just to summarize the investment case, I think it's hopefully set out clearly on this slide, but we've been around for a long time, and we have a really strong track record with a clear strategy looking forward, consistent growth and a healthy dividend, backed up by a strong balance sheet with lots of capacity to invest and momentum across all parts of the company. I think without further ado, given the importance of sustainability and the opportunity that it represents for Amcor in a number of dimensions, I'm going to turn it over now to Dave Clark for a deeper dive.

Thanks, Ron, and hi, everyone. I'm really pleased to be able to be here today and talk about how sustainability is contributing to Amcor's winning aspiration to be the leading global packaging company for our investors and our customers and also for our employees and for the environment, and the role that sustainability is playing in the growth of the business and differentiating our products. We'll spend a lot of time talking about products themselves and their end-of-life scenario, but it's important to take a step back and understand that our sustainability strategy is much more comprehensive than that. It starts with our plants and our operations. We've had some really good success reducing greenhouse gas emissions across our business by over 1/3, significantly reduced the amount of waste that comes from our own operations and also improving the efficiency of water use across our business. That's one part of our strategy. Another part is reducing ESG supply chain risk, which is important for our investors and our customers. And then ensuring that the materials we use, our product design are as sustainable as possible and securing good end-of-life solutions for those products. We've received a lot of good independent recognition by different organizations that take a wide range of ESG matters into account. And those awards have been for both the quality of the work that we're doing and for our reporting and transparency. Many of you have probably seen this slide before about Amcor's points of view on packaging strategy, but it really forms the foundation of the work that we're doing around sustainability. People are living longer, and they're healthier than ever before in the history of our planet. And one of the reasons for that is the way that we're able to produce food, medicines, personal care products and other products and then distribute them around the world in ways that are safe, so that they're available and ready when people need them, and that's never been more important than now. There is always going to be a role for packaging to play in preserving products and reducing total waste. We've done a great job of that over the history of the company. But of course, demands are changing. Consumers are expecting more sustainable packaging and a particular packaging that leads to less waste. So our sustainability strategy is really focused on delivering responsible packaging that's designed well but then works with waste management infrastructure and ensuring that infrastructure exists and consumers can use it. And you'll hear about how Amcor is uniquely positioned and how we're leading the way in these areas. Bill is going to come on and talk about how we're innovating, developing new products, more sustainable products. We're collaborating with stakeholders, not only our customers and suppliers, but waste management companies and others who are parts of the solution. And we're informing the discussion with governments, NGOs and others about our vision and the steps that we're taking to reduce plastic waste and create more sustainable solutions. When we talk about more sustainable products, there are really a large number of levers that we can pull, and those range from looking at raw materials, in particular, using more recycled content or using renewable or bio-based content. For example, the Lfbergs coffee package or the Espoma garden products' packages we released this year that included recycle -- included renewable or bio-based polyethylene, which not only decoupled the source of the raw material from fossil fuels, but also offered a lower carbon footprint. But then also looking at the design of the packages, reducing the amount of materials that we use, lightweighting and downgauging for efficiency, lower carbon footprint, using less raw materials in the first place, designing for end of life, and that could be recyclability of plastic packaging, also the packaging that fits into recycling streams in the aluminum stream, for example, or paper-based packaging, which is also recyclable. And then looking at other end-of-life scenarios, for example, packaging reuse. Our RefPET business is really exciting and growing, and Eric Roegner will be able to talk more about that. Packaging reuse is a growing area with a lot of interest. And then other scenarios, like compostability, that are suitable for some products in some markets, and we're able to offer those as well. When we look at developing responsible packaging, of course, packaging design is an important part of it, but it needs to fit within a waste management infrastructure. And as I said, that infrastructure could be reused, it could be compost or it could be recycling. And when we look at recycling infrastructures around the world and the ones that work, what we see is, in every case, there's some form of collection, that could be curbside collection that many of us have, it could be some type of drop-off program, it could be less formal programs that exist in other parts of the world today. After material is collected, it needs to be sorted, because recyclables flow into different areas. We have what we call recycling streams for paper, for metals, for different types of plastics. That sorting may take place with the consumer, if they have multiple bins, it may take place after collection in what we call municipal recovery facilities or sorting centers. Once the material's sorted, it's typically sold as a commodity to other processors. For example, the paper mills that are making recycled paper, glass plants that are making bottles from recycled glass or plastics recyclers, which could be independent recyclers or resin manufacturers. So when we talk about building the infrastructure, we're talking about getting all of those parts in place so that we can create the circular types of solutions that we want to make sure that the packaging that we make stays in the economy and out of the environment. And then, of course, it's critical that when those systems exist and the packaging is recyclable, consumers know what to do with it. And this is really important because one of the ways that consumers most engage with feeling responsible or feeling more environmentally responsible is through recycling. If we can create packaging that's recyclable, give them opportunities to do that, that really helps develop the identity that our brands want and helps consumers identify with feeling more sustainable. When we get into discussions about more sustainable packaging solutions with our customers, we really have to take the full life cycle into account, and that often begins with a discussion about the carbon footprint of the packaging. We're part of our customers' supply chains, and they often have targets about reducing the carbon footprint of their operations and their products. The packaging that we make often stacks up really well against other substrates in terms of reducing carbon footprint. And we'll continue to build on that success using, as I said, bio-based products, recycled content that further reduces the greenhouse gas emissions associated with the packaging that we make. Our customers are interested in the recyclability of the packaging. Plastic packaging has often had a reputation or a misunderstanding that it's difficult to recycle. If we look around the world at recycling rates today, we can find examples where the recycling rates for PET bottles are as high or higher than the recycling rates for similar types of packages, and it's not just in areas like Scandinavia or Japan. In Michigan, where I'm from and where the Rigid Plastics group is based, the recovery rate for carbonated soft drink bottles is 90%. In California, the biggest market in the United States, the recovery rate is 70%. So we can show that it's the package and the infrastructure together, needs to come together to reach these types of high recycling rates. And I'll talk more about how we're doing that with Flexible Packaging as well. When we get into discussions with our customers about can we put recycled content in, the answer is yes. But this is an area where PET bottles can really stand out. They're the only package today where we see 100% recycled content being used in practice and at scale. And it's not just beverage containers, like Naked Juice or Tazo Tea, we're doing it now in food packaging, like the Hellman's Mayonnaise jar, we're doing it in home care products made for Method or Everspring and new categories like vitamins for Ritual. And Eric Roegner is going to talk more about how we're really a leader in the area of incorporating PCR into our PET packaging. And we're increasing the amount of recycled content that we use in our flexible packaging, too, with new releases in several markets. When it comes to flexible packaging, here's a misconception that I really want to try to clear up with many of you. You may have read in reports or talked to people who say that flexible packaging is not recyclable or multilayer flexible packaging, what's called MLPs in some parts of the world, is not recyclable. And that's really not the case. When it comes to developing recyclable packaging, we really need to make sure that we're developing packaging that fits into those recycling streams that I talked about. You can make monolayer packaging out of materials that are not recyclable, it won't be recyclable. And you can make multilayer packaging out of materials that are compatible with recycling, and it will be recyclable. And these are some of the breakthroughs that Bill is going to talk about in terms of moving our flexible packaging into recyclable designs, recycle ready, that then will fit into those recycling infrastructures. So here's a little bit more about what that looks like. Obviously, we need to design packaging to be recycled, and that means fitting into one of the major recycling streams. As I said, there are existing streams for PET bottles, aluminum beverage containers, different types of paper, corrugated newsprint, for example. And if you get enough of those together, you can sell them on commodity markets. There are existing commodity markets today for PE film in many parts of the world, and we're developing commodity markets for polyolefins as well. And as those markets are developed, then the infrastructure comes into place so that consumers can recognize these packages are not only designed to be recyclable, I can recycle them where I live and where I use those products. And when we get to that point, that's when the products truly become recyclable and get recycled at scale. Those designs for recyclability standards are really important to align our industry, not only the packaging industry and the consumer brands who are using packaging, but the recyclers, for example, to understand the products that they're going to get, what's in them, the potential value. And Amcor is contributing to those discussions in a number of ways. We work with CEFLEX, the Circular Economy for Flexible Packaging in Europe, developing standards there, sitting on their board. In the United States, we have the how to recycle label, which is really the arbiter for what's recyclable in the U.S. That's based on standards from the Association of Plastics Recyclers. We sit on their technical committee. We also work with REDcycle in Australia, which is linked to the Australian packaging covenant and their prep tool, which is used to develop recyclable flexible packaging or, as they call it, soft plastics in Australia. And we work with the Ellen MacArthur Foundation, which is a global organization, that's trying to help ensure that packaging is designed to be recyclable and fits into a circular economy. In many cases, Amcor's sitting right in the middle of all of the standards development, and that creates a really important advantage for us when we look at how do we transition our own portfolio to be more recyclable. Our Rigid Plastics packaging and our folding cartons are virtually 100% recyclable already. There are existing streams. They fit into those and those streams are widely available for consumers. On the Flexible Packaging side, many of our packages today are designed to be recyclable and can fit into existing streams where those exist. There's some of our packaging that is that multilayer packaging that may be designed with materials that are not recyclable today. That's the part where our R&D teams are working to innovate new products, like the AmLite HeatFlex product that you may have seen launched today or other products that are moving that 61% quickly into the 70s, 80s and beyond that. And as I said, Bill Jackson is going to talk more about the work he's doing to make those recycle-ready products available for our customers so that we can get them into the market and, ultimately, in the hands of consumers and recyclers. When it comes to flexible packaging, if you remember, I said there's design for recyclability, there's collection and then there's the processing infrastructure. And there's a really clear path that moves us from left to right on the slide that shows that in some countries today, there's no collection and no recycling. But then the first step is we start adding collection, and it may be drop-off programs, it may be local in certain cities. Once we start collecting and we can get enough material together, then we can start developing the markets for recyclable materials, and we see that today in many parts of the world. Right now, probably only Germany and the Netherlands are at the point where virtually 100% of households have access to collection of flexible packaging. And that's one of the reasons the AmLite HeatFlex product was launched in the Netherlands. But in many cases where that packaging is collected today at scale, there are outlets to be able to recycle it as well. And of course, our goal is to get to full collection and full recycling of the packaging that we made. So we're actively partnering with others to try to get that waste management infrastructure in place. We work with the ReSource Plastics project, which is part of WWF. We're working with The Recycling Partnership here in the United States. I mentioned the Ellen MacArthur Foundation before, EUROPEN in Europe, several others in different parts of the world as well. And what's really important here is these organizations are not just NGOs with support from businesses, but they're really bringing together our customers, the consumer packaged goods companies; also our suppliers, companies like Indorama and Borealis, ExxonMobil and Dow; the waste management companies, SUEZ, Veolia, and the United States Waste Management and Republic, so that we can work together and collaborate, understand what materials are coming into these systems, how to make them better, more efficient and what can come out of them. And again, Amcor is partnering and leading and trying to bring these types of projects together. I'm going to show you an example of just one of these projects. This is the Materials Recovery for the Future project. And what you're about to see is one of the sorting centers that I talked about. This is based in the Philadelphia area, it services about 1.3 million households and brings together their mixed materials recycling where it's sorted into the different commodity streams. And this was a test that we did, of course, in collaboration with others, to try to allow the households to put flexible packaging into the recycling bins and see if we could successfully sort it to begin to develop the technologies to manage this on a scale where we can develop markets and move forward. So with that, let's take a look at this video. [Presentation]

So that's one example of the work that we're doing to enable the collection and sorting of flexible packaging. Another is the project HolyGrail, which was recently launched in Europe, using a technology, but also looking at how flexible packaging can be sorted to get the most value from it. So stand by, I'm really excited about some of these projects that are coming up. And of course, as I said, once the infrastructure is in place, we have to make sure that public, NGOs and governments all understand these systems and are comfortable using them. So we're actively working to inform and educate the public. We have the Amcor Big Ideas Podcast, where I interview outside industry experts about packaging sustainability. We've had almost 30,000 downloads of packaging -- of Big Ideas Podcast, which to me is phenomenal that many people are interested in packaging sustainability. We've launched a number of webinars this year since we haven't been able to travel to conferences. We've had between 400 and 1,000 people attending 6 or 8 different webinars that we've produced this year. Our social media is very active and engaging with people within industry, also consumers and others to help them understand the sustainability propositions and the direction that we're going with the packaging that we make. And of course, we're also collaborating with others. Every Bottle Back is a program from the American Beverage Association with our beverage customers and others, communicating with consumers that when you're finished with that package, we want it back because we're going to make a new package out of it, and you can enjoy it again in a few weeks. REDCycle is one I've mentioned before where we're trying to align our colleagues across the value chain in Australia and New Zealand to help consumers understand that soft plastics are recyclable and demonstrate the products that can be made from soft plastics. So I've been really excited to be able to share this short presentation with you. I'm looking forward to the presentations from my colleagues. I think you'll see many of the elements that I described here in the presentations from across Amcor, and I'm looking forward to your questions. So thank you very much. And with that, I'll turn it over to Eric and Carmen.

All right. Thank you so much, David, and hello, everyone. With 6,000 employees working out of -- we go to this page. There we go. With 6,000 employees working out of 50 manufacturing locations in 11 countries with a comprehensive network of technologies and manufacturing across North America and Latin America, Amcor Rigid Packaging has delivered in the last year $290 million of EBIT across $2.7 billion of revenue. And with that base, we are the market leader, the absolute market leader across these technologies. And we are the market leader here. And the reason I know that we are this market leader is because of our customers. When customers really want to make a difference, whether it's a large customer that's looking at changing the game and revitalizing a category, if they want to drive lightweighting, they want new product design, they want to increase the amount of PCR that they have, they will call us. If it's a new customer, a brand-new customer that wants to change the game, revitalize an entire category, what they will do is they will call us because they're going to need a partner, a partner that has the technology and the manufacturing footprint across this entire network that will enable them to meet those needs. And it's as we develop that value proposition that our customers win. And what we're going to do over the next couple of minutes is Carmen and I are going to deep dive this value proposition and show you why we are so convinced that Amcor Rigid Packaging is an attractive and profitable growth business. Please, if you could go back one page. As Ron described, there are several elements of this value proposition. What we start with is the markets. Over the last 10 years, what the team at Amcor Rigid Packaging has been able to do is move from what has traditionally been a commodity type of market in cold fill CSD and water and transition into an expansive set of very attractive markets. In beverage, we've grown into hot fill with very nice markets, in isotonics, in sports drinks, healthy hydration specialty waters. But more than that, we've been able to expand into non-beverage segments, such as food, home, personal care, pharmaceuticals and spirits and wine. And in doing this, the other thing that we really focused in on is optimizing our mix towards those attractive customers and subsegments, for example, small and medium customers or distributors or co-packers or those especially attractive subsegments in bigger markets, like aseptic dairy or the healthy hydration. And anchoring all this together has been innovation. Our intellectual property foundation, with many of the things we've already briefly mentioned from the lightweighting to the use of PCR to design, has enabled that growth into those new segments and help those customers be successful. And anchoring that and really reinforcing that has been our network and the corresponding cost position. By really optimizing our manufacturing base into large regional hubs that can provide the full set of technologies and manufacturing capabilities in different areas, that is then complemented by bespoke on-site or near-site manufacturing locations. Not only do we have a world-class and leading cost-to-produce position in those, but we have established a foundation of technologies and capabilities that will enable even more growth. What I'm going to do now is change gears a little bit, because overall ARP being a large business across multiple regions, in the interest of time, what I want to do is focus on North America. And all of the levers that I'm about to discuss are equally as relevant in Latin America and elsewhere. Starting with manufacturing. Over the last couple of years as we've worked very hard to integrate acquisitions and enable growth in new technologies, what we have done is double down on our manufacturing network to establish world-class regional hubs that have the range of technologies as well as technical support where our customers are and where they need that support. Those then are complemented by the bespoke on-sites or near-sites that can leverage the resources back from that hub and that will then establish not only a really world-class cost position but enable that expansive growth. And with that, what we've been able to do is take new technologies that we've either acquired into the company or that we've developed organically. We've expanded materials. From the base of PET, we've moved into polyethylene and polypropylene, into multilayer co-extrusion materials. We've taken what we actually physically do in the facilities from the base of injection and 2-step blow molding into linear and rotary extrusion, in-mold labeling, we've been able to go into assembly. And that foundation, having it where we need it around the U.S., has enabled us to not only grow beverage into more attractive markets, but has really enabled us to grow into other areas, and particularly non-beverage categories that we've talked about. So let me get a little bit more specific on that. With that network and those capabilities, our beverage market has grown into hot fill attractive markets, like sports drinks, healthy hydration, enhanced waters, aseptic dairy, things that are growing above average with the market but even more so into the non-beverage segments. And what we can see is the attractive parts of those markets that really resonate with PET and the lightweighting plastic value proposition, home personal care, food, pharmaceutical, spirits and wine, even to our closures business, which not only supports all of those markets, but with its depth of intellectual property and differentiation, has also grown into very attractive adjacent markets, like industrial cleaners, lubricants and even agricultural chemicals. But let me back down again and double down on the beverage market, because it's very important that we understand that the underlying beverage market is an attractive growing market with liquid refreshment beverages still growing at about 2%. And within that market, the portions of the market that lend themselves to the PET value proposition are growing even faster than the base liquid refreshment beverage market. PET is growing in this space. And what's been fantastic news for Amcor, given all of the work we've done over the years to really invest in our capabilities in the attractive markets there, is that it is resonating. Last year alone, we had over 200 new product launches in those attractive portions of the beverage market. For example, big new launches in sports drinks, in enhanced waters, in healthy hydration, in brewed teas, in aseptic dairy, in those portions of the market that are growing quickly and are really attractive. Underpinning that growth, not only in beverage, but actually across our whole portfolio is that incredible value proposition of our materials and capabilities. We all know plastics have some just inherent advantages in the markets that they support. There are physics around the fact that it's not breakable that the materials lend themselves, as David mentioned, to multiple sources, including having bio-based polyethylene, for example. But particularly in today's world, the story around sustainability is resonating, and that is anchoring on the use of PCR, or post-consumer resin. As David had talked about, using PET, it is infinitely 100% recyclable, whether it's mechanical recycling, chemical recycling, all of those molecules can go right back into packaging forever. One of the things that's particularly unique about PET that only PET can say is if you want to hold a package in your hand that is made of 100% recycled material, only, only PET will do that. And that's a very compelling value proposition. And as end consumers are demanding that recycled content and linked into the broader story around greenhouse gas emissions, where like-for-like, any PET container is a significantly better greenhouse gas footprint, up to 70% better than other materials. As consumers are demanding that, and it gets into the brand owners, what we have been seeing is a radical growth rate in the use of PCR in the market. And that is something that we are capitalizing upon. What I'd like to do now is hand over to Carmen, who's going to take us on a deep dive into some of those most attractive markets. So Carmen, over to you.

Thank you, Eric. So I think here, the first segment we're going to look at is going to be regional customers. And about 5 years ago, we recognized that the growth rate for regional customers was outpacing the overall market, and this was a nothing that we're really paying attention to, but we saw great potential. So we took the time to think about how do we structure ourselves and we came up with 3 changes to our approach to these type of customers. The first was we developed a dedicated or established a dedicated commercial team that would only concentrate on regional customers. These were the only customers they would call on. The second is we went to a regional hub, as Eric mentioned earlier. We took small volumes from platforms and placed them across our network. This really allowed us to diversify and make sure that we were in proximity to these regional customers as well as to have low volume order production in a cost-effective way. And then finally, we shared our world-class innovation. And between this focus and positioning, we really made it attractive to work with small regional customers. We could help them launch quickly. We could help them innovate and differentiate versus their competition. And as a result of this focused approach, we've seen over the last 5 years an annual growth of 13% per year. We expect this trend to continue and this is going to be a big focus area for us going forward. Eric, can you take us to the next slide? So next, we're going to look at pharmaceuticals. Again, very attractive segment overall for Amcor. And here, there's really 4 subsegments that we're going to focus on. First is going to be ophthalmics. We are the industry leader in ophthalmics, and we see this continuing to grow as the population ages. Next is nutraceuticals. And essentially here, we're talking about vitamins and supplements. This has been a trend overall as consumers become more aware about their health and wellness and they really want to proactively take care of their health. So again, good opportunity for us. Third is diagnostics, and this is really a new category for us. Here, we're talking about blood and culture vials, along with dropper style assemblies for virus testing. This has not been a strong area for us. It was really the technology specifications were tough. It was dominated by glass. But over the past couple of years, we've had strong innovation and have been able to convert -- see the glass to plastic conversion. So really excited about this. It addresses a key issue that we have in health care, and that is the breaking of glass vials. So great opportunity. And then final is animal health. Here, this is just a growing category. It's a result of increased pet ownership as well as just they spend a lot on their pets. So really excited here. Part of what gives us a superior value proposition is our experience in the ophthalmic category. We understand how to navigate the heavy regulatory requirements to launch new products. We know how to effectively operate in clean rooms. And in fact, we have 6 clean rooms across 4 plants, and this is really important from a redundancy and business continuity. It's a long qualification process to get new products launched or to go to new production places. So redundancy is very important. So really attractive segment, something that you're going to hear about further and later with the Flexibles business group as well. Next slide. So the last area that we're going to look at is dairy. And here, I want to really clarify, we're not talking about the gallon jug of white milk you buy from supermarket to take home. Really here, we're talking about single-serve on-the-go consumption of value-added dairy, dairy alternatives and meal replacements. Brands in this area really need to innovate. They need to differentiate. They need to improve their sustainability footprint. And they need to figure out how to get more out-of-home consumption and penetrate e-commerce. And this is where Amcor really has a great offering. We have one-stop shopping. We are able to offer -- our PCR expertise is able to help them improve their sustainability footprint. And with our barrier technology, we can help them get into non-refrigerated distribution channels. So again, a really great segment. We see opportunities. And if you look at over the past 5 years, we've seen double-digit growth rates, and we expect this to continue into the future. And so I think what we've noted here is that our innovation in technology really is one of our primary growth levers. It's an area where we have launched, on average, over 200 products per year. We have been able to develop proprietary technologies that's allowed us to have 170 patent families. And if you look at the key products we're launching, they are really around package design, light-weighting, barrier capability as well as increased use of PCR. So to give everybody a better feel of our world-class innovation and R&D capabilities, we're going to share a short video right now. [Presentation]

Excellent. As you saw in the video, innovation is at the absolute heart of what we do. And one of the best examples of how Amcor has used innovation to grow an entire category and grow a wonderful growth market is what we have seen us do in the hot-fill market. Now hot fill is different than cold fill in that when the liquid goes into the package, it's going in at 185 degrees or more. And what this does is the thermal, mechanical and the barrier challenges, the properties that this presents are staggering, because as the liquid goes in and the material expands very quickly and then it contracts and pulls a vacuum. Everything about that package needs to be designed in a way to address that. And this is where Amcor's intellectual property and innovation engine really comes to bear. With a patent portfolio of over 60 families of technologies, where we look at the sides of the package, when we look at the basis to put rigidity in or we look at active basis, what we have been able to do is constantly drive innovation that enables more and more sophisticated and lighter weight, more PCR packages into this space. And it plays right into our value proposition. And very specifically, what I'd like to do now is talk about the huge trend that we have been at the forefront of leading which is the light-weighting of this package. In the last 10 years, by constantly driving generation after generation of this technology, we've been able to provide our customers with options that they can use to take over 50% of the weight out of these packages. And you can do it in generation, starting with the sides, then being able to put more of the mechanical properties into the base of the package, which liberates design freedom and lightweight in the side. And then by making an active-based technology that as the vacuum starts to compress, you can handle that inside the base, and you won't have the walls collapse. All of this has been fantastic and allowed our customers to succeed in the market. But that's not where we've stopped. We have the next several generations already in the pipeline. In fact, some of them we're working to commercialize today. And beyond just light-weighting, what these technologies enable us to do is they are the same underlying technologies coupled with additive and manufacturing process expertise that will allow us to use even that much more PCR inside of the packaging, marrying that lightweight and that PCR to drive what I'm going to call true revolutions in the next generations of packaging. So in conclusion, I just want to say that I feel so blessed to be part of this team that is taking the value proposition that Carmen and I just described, that helps our customers win, and that is what is going to serve to drive that profitable growth in the future, whether it's large brand owners that want to completely revitalize their brand by coming up with a revolutionary new designs, by finding ways to take the whole new step change of weight out, take PCR to 100% levels even in hot fill applications, we are the ones that they are going to call and partner with. It's a brand new customer. We don't even know yet who has an idea to revitalize or completely redefine a category. And what they're going to need is that partner that brings not only the technology to design that new package, but the manufacturing capabilities and infrastructure across the entire region that they need to be there, that can help them every step of the way from 10 million to 100 million to 1 billion to 2 billion units, we are the ones they're are going to call. And as we work together intimately on technology, developing those radical new packaging solutions and then commercially on that operational footprint, here's what I know is going to happen: We will grow profitably. And we'll do that because our customers will win. And our customers are going to win because we have and will deliver. And with that, thank you. And Tracey, Ron, I'm going to hand it back to you. Thanks.

Thanks, Eric. This brings us to our first Q&A session. Ron, Dave, Eric and Carmen will join the panel for the next 20 minutes, so please submit questions which are most relevant to this group. Just a reminder before we start, our panelists are all located in separate rooms. So please bear with us as we navigate through the session, queuing each other in as necessary to make sure that we get your questions answered. [Operator Instructions]

The first question today is from John Purtell at Macquarie. And his question is, what drives Amcor's confidence that sustainability is its most exciting long-term organic growth opportunity? What are the sustainability risks? And will you derive higher margins from more sustainable products? Dave, I will pass that question on to you to get us started.

Yes. Thanks, Tracey. I think I'd outline the opportunity in 3 ways. First of all, if you look at Amcor's pledge, where we've said we'll make our packaging recyclable or reusable, use more recycled content and work with others to increase the collection recycling of our packaging, we did that 2 years ago with a small number of companies. And since then, it's become the global commitment sponsored by the Ellen MacArthur Foundation and United Nations, and we're getting close to 1,000 different companies, governments and NGOs signing on to that same global commitment, and that represents a significant part of the overall packaged goods market. So it started as an Amcor pledge and a few other companies has now really become a movement that's creating an opportunity for alignment within the industry and then for Amcor to leverage our presence across a much larger customer base. I think second of all, the value proposition for sustainable packaging or more sustainable packaging is changing. Certainly, consumers are indicating they're more willing to pay for more sustainable options and products. But at the same time, we're seeing changes in other forces. California just passed a regulation that's going to require beverage bottles in California to include certain percentages of recycled content. We're seeing regulations in Europe that are going to create advantages for packaging that contains recycled content or advantages for packaging that's more recyclable. So the value proposition of the offerings that Amcor has is really going to change and it's going to create more value for those more sustainable packages compared to packages that may not be recyclable or may be made from all virgin materials. And third, I think when you put those 2 together, with Amcor's global position, our scale, the level of investments we're making, the talent that our R&D team has to bring these new innovations to bear and then the way that Amcor can bring solutions to both the global consumer brands and also the regional brands who are interested in more sustainable options, when you put those together, it's a really great opportunity for profitable growth for Amcor, and it's going to be a win-win for the environment, too. So back to you, Tracey.

Thanks, Dave. The next question we have is from Brook Campbell-Crawford at JPMorgan. So Eric, this will be a question for you. And Brook asks, can you confirm how many plants have been closed in relation to the restructuring program initiated in 2018? And how much capacity has been taken out of the rigids business and will be taken out of the business once this program is completed? Eric, over to you.

Thanks, Tracey, and great question. Very important to note that over the last 5 or so years, as we've done the combination of integrating acquisitions into the ARP family, while also really optimizing our manufacturing and technology footprint into, as I described, these large at scale regional hubs with the bespoke on a near site assets, what that's enabled us to do is consolidate a number of locations, particularly small- or medium-sized stranded locations into one or the other of those capability centers. Now in doing that, we did collapse a number of sites in. And as a result, several hundred roles were restructured out of the organization. But it's important to note why we did that. The goal was not to take capacity out of the network. Quite to the contrary, actually, our capacity utilization has stayed high. But what we've done by collapsing and consolidating as we did is we've been able to establish a world-class low cost to produce. So a great cost structure that leverages the infrastructure of those sites. But even more importantly, as we wanted to grow into the non-commodity beverage spaces inside of beverage, and even more so into the non-beverage markets, by doing it this way and moving the right technologies into the right locations, we've enabled ourselves to have that technology set in the regions necessary so that we could actually grow with these customers and in those markets where needed. Thanks, Tracey. Back to you.

Thanks, Eric. The next question is another one that I'll give back to you. It's from Andrew Scott at Morgan Stanley. Andrew's question is, how are customers that have shifted to recycled content generally promoting this? Would we see this on the label? Would we see it as part of an advertising campaign? Or do they have other methods of promoting to the consumer the recycled content? Over to you, Eric.

Okay, Tracey. Great question. And I'll tell you what, the answer is all of the above, there are very many ways that our customers are doing this. There are some customers that have latched on to the PCR value proposition very early on and go right out on the label, from hand soaps like Method or the Hellmann's mayonnaise jar that David mentioned, where they are leading front and center and saying, well, this container has 100% PCR, and it's right there in all of their marketing and all of their advertising. There are others that the way they're approaching it is making broader claims about getting to certain levels of PCR across their product categories and then they're feathering it in. Sometimes those claims will be quite overt on the label. Sometimes they're a little bit more subtle, but they've decided to market it more across their whole portfolio. So what we're seeing is that segment by segment, customer by customer, product by product, we are seeing different ways of them communicating it into the market, but they've all looked at their end customers and said, "What's the best way for us to do this to get that message out there?" Back to you, Tracey.

Thanks, Eric. The next question over the Zoom chat box is from Julia Weng at Paradice Investors. Dave, this is one for you. And Julia's question is, would Amcor seek to directly invest in recycling infrastructure or technology to accelerate the process of recycling plastic?

Yes. Thanks, Tracey. Well, I can say that we certainly consider it, and we consider it from a couple of different perspectives. First of all, if you look at the processing side, when I first joined Amcor, I was running the business that made recycled resin for the Rigid plastics business. We had operations in the United States and also in Europe. And over time, we realized that the better strategy is probably to move away from vertical integration and develop a supply chain and supply base, and we were able to dramatically increase the amount of recycled content that we could put into our packaging. If you look at the collection side, that's really a specialized business. And there are people -- companies like Veolia, SUEZ, Republic and others who are managing that waste management infrastructure. And it's really not just plastics collection. If you look, plastics play a very small part in the recyclables business if you look at all of the material its collected from households in terms of paper, metals and other things. So it's a very broad business with a completely different skill set. I guess I would say that -- would we consider it? Of course, the answer is yes. If we solve it was a faster pathway to achieve our goals that also delivered profitable growth, it's certainly something that we'd consider. I'm sorry, back to you, Tracey.

Thanks, Dave. No problem. Thanks, Dave. The next question that was pre-registered is from Brook Campbell-Crawford at JPMorgan. Ron, this will be one for you. Amcor has made a number of asset sales over the last 12 months, including a Flexible packaging plant in the U.K., 2 plants in LatAm, and last week, the AMVIG sale. Were these transactions part of a broader rethink about the portfolio? And should we expect to see these sorts of divestments continue over the next 12 months? Over to you, Ron.

Yes. Thanks, Tracey. Thanks, Brook. Look, I wouldn't consider it a broader rethink of the portfolio. I would say it's really a continuation of a theme that's been the way we've managed things for a long period of time, and there's been a lot of acquisitions, but there's also been a lot of businesses that we've exited. Some big ones over the years. These that you mentioned are I would put more in the portfolio pruning bucket. These were in the first 3 examples that you mentioned, a business in the U.K., which was producing bread bags, a business in Argentina making disposable products for food service, a joint venture we had in Brazil with Huhtamaki to make tube laminate, these are one plant operations, not places that we were going to really double down and invest to win. And so we're essentially dabbling and decided to take it out and just in the spirit of further focusing and refining, our resources and our management attention. In the case of AMVIG, it was a unique ownership structure we got into in 2003 or 2004. We took an ownership stake in a public company called AMVIG, which makes cartons for tobacco and some other products in China. And it is a company that trades in the Hong Kong Stock Exchange. Essentially, we took an option on that business about 15 years ago. Again never committed to really double down and further help drive growth in consolidation and decided to exit that stake last week. So I wouldn't consider it a broader rethink of the portfolio as much as just the continuing evolution in refinement and really tightening up the focus on the places where we think we can win. And you're hearing a lot about those today, rigid packaging in particular, in the Americas, Flexibles globally, cartons and closures as well. So that's what those are about. Tracey, back to you.

Thanks, Ron. The next question is through the Zoom Chat Box platform, and it's from Richard Johnson at Jefferies. A question for Eric. Could you talk about the competitive environment in the U.S. and particularly as it relates to rising customer self-manufacture? Over to you, Eric.

All right. Thanks, Tracey. And one thing is I'm not going to talk about any particular competitors, but what I will say in this market in general is that if you are positioned as we are, as the innovation leader in a market that is dynamic, where there are growing and attractive segments that lend themselves to innovation, then the ebbs and flows of certain trends, like self-manufacturing, are things you're aware of, but don't really fundamentally change the underlying nature of the business. Generally speaking, this is a well-structured market in North America. We have a very advantaged position. As I mentioned earlier, we spent quite a bit of time and effort over the last number of years working on that mix of assets and technologies, customers and products to deprioritize and deemphasize the more commodity products. For example, CSD and water cold fill, to really enable us to win in the advantage segments, like hot fill categories that we talked about around healthy hydration and, even more so, diversifying beyond beverage into those specialty container market that Carmen talked about. And so while there are ebbs and flows in a number of those different areas, we really think that we are especially well positioned in the attractive growth markets where innovation will lead. Back to you, Tracey.

Thanks, Eric. The next question we have is a Zoom raised hand, so I'll hand over the microphone to the person to ask the question directly. And the first one on the raised-hand platform comes from Larry Gandler at Crdit Suisse equity. So Larry, we'll open your microphone, and then we'll go directly to one of the panelists to answer the question. Larry, go ahead.

Thank you, guys. My question, I guess, is for Eric. Excuse me, I'm a bit of a technical, I couldn't find the chat box, but I'll get it from [ Daniel ]. So my question relates to that slide you had up there with volume. You showed unit growth over time. Could you talk to, particularly with regards to lightweighting, how resin -- your resin use has grown. I think that would be a great sustainability message if you could perhaps describe that perhaps your use of resin has not nearly grown as much as your units over the last few years.

Excellent. Yes, this is Eric. Thanks so much for the question. And by the way, I completely emphasize with the chat box thing, it's right there next to the page turn, which I couldn't figure out earlier. That's a great insight. Because back to this point about light-weighting and use of PCR complemented with light-weighting, while the units have grown, we've been able to actually hold our total resin consumption, both the combination of resin and virgin, just about flat over the last number of years. And we plan on maintaining that trend, if not even improving on it, going over into the future. So bringing that innovation to continuously drive the light-weighting enables us to hold resin at level or drop it while the units continue to grow. That's a really good insight. Thanks, and back to you, Tracey.

Thanks, Eric. The next question is from Andrew Scott at Morgan Stanley. And Ron this will be one for you as well. Andrew is asking, gearing remains manageable, do you feel you have the management bandwidth for acquisitions? If yes, should we think of this being focused on rigids? Or do you see scoping Flexibles even with the Bemis integration ongoing? Over to you, Ron.

Tracey. Thanks, Andrew, for the question. Look, the balance sheet is in a good position. It's been -- been well-managed, consistently managed for a number of years now, and it puts us in a comfortable position, that the Bemis deal being an all-stock transaction, obviously, preserve flexibility for us. Cash flows in the business so strong. So from a financial perspective, there's no question that we've got the firepower and the capacity to pursue acquisitions. From a management bandwidth perspective, if you think about the Bemis acquisition, it really fits within the Flexibles perimeter. And even within the Flexibles perimeter, there's 4 different regional businesses that are each at different stages of integration. I think it's not too far from being within the realm of possibility that the management bandwidth frees up and some of those businesses, if not all of them, can start to think about what's next from an inorganic growth perspective. And then clearly, in the rigid packaging segment, I think Eric and Carmen did a great job of describing some of the opportunities, particularly outside of the beverage space, where we already have a really big scale position, lots of runway for growth in North America, in particular, outside of Beverage. And that business has not been tied up with an integration. So I think long story short, Andrew, we've got the financial capacity to pursue deals. And I would say, more or less, we've got the management bandwidth, particularly over the next couple of quarters, across the whole company. So you can expect to see us be active going forward as we have been historically as well. So thanks for the question. Andrew. Back to you, Tracey.

Thanks, Ron. The next question is a Zoom Chat box question from Matthew Ryland at Greencape. Ron, I think this is another one for you. It relates to sustainable products. And the question is, will the sustainable products initially gain greater penetration in short-run packaging markets?

Yes. Matt, thanks for the question. Look, I think that over the years, we've seen lots of innovation come from places that maybe we wouldn't ordinarily expect. Some of the smaller companies in the developed markets, some of the niche brands who've been more aggressive in terms of marketing their products, merchandising their products. Eric mentioned Method Products Company, which gained pretty significant share on the back of their sustainability credentials in a relatively stayed category like home and home care products several years ago. So you see innovation come from brands like that. And we also see innovation coming from the emerging markets and some of the national brands that you'll hear a bit more about later. So I think it's not so much that the more sustainable technologies are better suited for short runs. I think that there's every bit as strong a likelihood that some of the smaller customers get to the market faster with some of these innovations, which take a bit of a leap of faith in some cases. And those companies have proven over the years to be a bit more aggressive in marketing and launching new products. It's not to say that the larger customers are not active. We've got extensive agendas with all of the big FMCGs that you would think of, and they're quite active as well. But I would say it's -- I put equal money on both types of customers in terms of who gets to the market first, with some of the more innovative solutions on more sustainable products, whether they're recyclable or those products with higher recycled content. Thanks for the question. Tracey, back to you.

Thanks, Ron. The next question is a raised hand question from George Staphos at Bank of America. George, your microphone will be open very soon, and you can go ahead and ask your question, then the panelists will jump in to provide an answer. Over to you, George.

Great. Thanks, Tracey. Thanks, everybody, for the presentation so far. I had 2 questions. Number one, Dave, you had mentioned several recyclability statistics across your portfolio, I think 61% for Flexibles, 95% plus for Rigids. Can you talk about the percentage of material within those product lines that are economically recycled closed-loop back to packaging? And then the second question I had, Eric, I appreciated your presentation. You talked about mix enhancement. You talked about the hub-and-spoke approach, light-weighting, certainly which has been going on to the PET industry for a long time. What do you think we'll need to see on a going-forward basis to see an even better profit performance out of the Rigid business on a going-forward basis?

Yes. Thanks, George. It's a good question. I think, first of all, if you look at the collection rates around the world, and what percentage of that is going back into packaging again, a good indication is, in the United States, you have probably about half of the PET, maybe a little bit less, that's being collected going back into packaging. Some of that's going back into beverage containers. Actually a larger percentage is going back into thermal forms today. And we see that as actually a good thing because if you have multiple competitors trying to buy the same material then that helps to support the market. And we see other markets, Europe, with typically 40% to up to 100% PCR, which Coca-Cola has just made that commitment in the Nordic country. So the economics vary a bit from one location to another, depending on producer responsibility, regulations and other things. But we're seeing that level increase year-on-year. And within Flexible packaging, it's still a little bit earlier, both in terms of the collection rates and the amounts that's being put back into packaging, but we're seeing Amcor products with 30% PCR being put into them in some cases today. And of course, we're working to make those rates much higher. So back to you, Tracey.

Thank you, Dave. That brings us to the end of the first Q&A session. So thank you to all the panelists, and thank you to the audience for all the questions. There are a number of questions which will remain in the queue, and we'll take those forward to the second panel and address those then. We will now take you on a short 5-minute break. So you'll see some videos rolling through this break, and we will join you -- we will come back to focus on Amcor Flexibles business. And so we'll be back in about 5 minutes. Thank you. [Break]

Hi, everyone. I'll have the pleasure to kick us off here for the Flexibles session with a couple of slides in order to get us started. And I want to do this by running through the key messages that we want to leave behind and that we will probably come back to as you go through the following conversations with us. So the first one is, we're the only player with a truly global footprint. And wherever we play, that's the number two. We have leadership positions, and we operate at scale in every single region. And you will see that clearly when we take you through the other slides that are going to come. The third one is we're leading in differentiated and growing segments. And that's really important because we make choices about where we want to play. We do not want to be every one -- everything for everybody. The fourth one is we're having a world-class R&D infrastructure and capabilities. And the last one is we have multiple sources of organic and acquisition growth opportunities in the business. Now the next slide that I'm going to get to is speaking to the scale of the business and to the global reach. We're talking about the flexible segment here, and the segment reaches about $10 billion of sales, as you can see on the upper left-hand side. And it's actually very well distributed across the globe, with about 30% being in North America, 30% being in Western Europe and 30% being in emerging markets. A very small piece is in Australia and New Zealand. You see that we have about 180 plants in about 39 countries, and we operate with about 40,000 employees. So that clearly speaks to the scale of the business. As I then dissect the Flexible segment, I would get to 2 businesses, 2 separate businesses. One is the global business in specialty cartons and the other one is the global Flexibles business. Both of those businesses make up for the flexible segment that I just talked about. Now the specialty cartons business is a great business. Many of the things that I just talked to on the global Flexible segment apply here also. It is definitely a global business, and we're the only global player in the world in that particular product segment. It is an innovation leader. It has excellent -- this business has excellent relationships to a consolidated set of customers, and it is run extremely well from an operational point of view. So you pull these things together, and you get yourself to a business that generates really good margins and a strong and very consistent cash flow. And therefore, this business becomes a very attractive business and an extremely important contributor to the Flexible segment. Now this is the only part in the presentations where we talk to the specialty cartons business. And the only reason for that is that we needed to make choices what we wanted to discuss as we're going through the Flexibles segment. And we made the choice to discuss and focus really on the global Flexibles business, which is by far the bigger piece of the business and which is probably the more interesting one, also given the acquisition that we've made about 18 months ago, and that is the Bemis business. So as we talk about the global Flexibles business, let me take you through this chart, and there is a couple of messages that I want to leave behind. First of all, again, it speaks also on the global Flexibles business to the global reach of the business. We also see here the market size, the size of the markets in which we operate, and they're significant. Now the first message that I want to leave behind here is how the market size compares to actually the size of our business in each region. And that speaks to the fact that the markets and the businesses in every single market are fragmented and that we have ample opportunity to grow in the business through acquisitions. The second big message here is that we are in leading positions because we've compared ourselves against the next biggest competitor in the different regions. And you can see that in every single case, we are significantly larger than the next biggest competitor. And the mere fact that you see different colors here for the different competitors by region just indicates that there are different competitors in every region, which also speaks again to the fact that we're the only truly global player in this field. Now the final point that I would like to make before I hand it off here to the innovation piece is, again, coming back to the sources of growth that we have in the business. And the first one really is that the markets in which we operate, they're all growing. So should we. We should also be growing. The second one is that we're active mix managers. And that again speaks to the fact that we're trying to move our portfolio into those areas of the market where we expect higher profitability at more attractive opportunities. The third one is the innovation capabilities. We have world-class R&D capabilities and infrastructure, and we are a leader in high barrier film and foil technologies. And the last one is the cost productivity side. We have proven over the past that we're able to take cost out of the system and expand our margins, and we believe that we have more opportunity to do so as we go forward. That should be enough as a quick introduction to the global Flexibles business. And with that, I want to hand it off to Bill, who's our Chief Technology Officer. Bill?