Amcor plc (AMCR) Earnings Call Transcript & Summary

Welcome back, everybody. I'm George Staphos with Bank of America, and we're honored to have Ron Delia, Chief Executive Officer of Amcor, here for our next fireside chat. It will be a great discussion presentation on the latest in flexible and rigid packaging markets. Obviously, Amcor's been a great innovator in this space for many years. Ron joined Amcor in 2005, and he was appointed to his current role as Chief Executive Officer, I think, in April of 2015?

Correct, yes.

And had a number of senior leadership positions in the company prior to becoming CEO. And again, your tenure dates back to [ 2005 ], Ron, welcome.

Thanks, George.

You've been all over the world the last couple of weeks, I think right?

Yes, been to London meeting with some investors there, in Australia as well. So yes, making the rounds.

Excellent. Well, we're honored you're here.

And coming out of earnings season, not just for Amcor, but a lot of the questions were around, where the consumer is? What's the state of mind for spending for the consumer? Is destocking over? How you're handling Russia? Sustainability? So a lot of stuff that we're going to get through today. So I guess, the first point -- and I'm also remiss, if anyone has questions on Amcor, Damon Wright, who heads up North American IR, is in the back of the room. Damon, thanks for being here as well. So look, you just gave guidance not too long ago. But relative to your guidance, what do you think are the biggest supports for your guidance of the $0.77 to $0.81 and the adjusted free cash flow of $1 billion or more? I think, on the call, we appreciate candidness. You were saying you thought things were probably trending to the lower end of the range.

Yes.

Or is the higher. Have us get a further pulse for Amcor at this juncture relative to the outlook.

Yes. Look, it really is all about demand. This is a business that's very defensive in over time and through economic cycles. The business is exposed really too fast-moving consumer goods and health care. But even in those segments, they're not completely immune from the broader macroeconomic environment that we're operating in. And certainly, through the first half, we had a really strong first half. We felt we had great operating leverage. 2% organic sales growth was converted into 8% EBIT and EPS growth through a combination of really strong pricing power to recover inflation, good mix as our health care business grew pretty rapidly and good cost productivity. So we're really pleased with the first half. I think as we got through the first half sequentially, we definitely saw signs of volume softness. And that became particularly pronounced in the second fiscal quarter for us. Bear in mind, we're at June 30 year-end. So we're talking about outlook for the next couple of quarters, not the rest of calendar '23. As we got to the back end of our fiscal second quarter, certainly by December, demand had really slowed. And we had mid-single-digit volume declines in December. And we know that it was a combination of things, including destocking, and we know that because we're obviously close to our customers, but we took extended shutdowns, our customers took extended shutdowns during that period of time. But we also know from the scanner data that the consumer has been pulling back a bit, right? You see that at retail. So when we came to the market to deliver earnings at the beginning of February, we expressed some caution, and it's just a reality. And we did see a bit of a bounce back in January, but it was mixed. And we're probably a little bit more cautious than others. Now again, bear in mind, we're guiding for the next 180 days, not the next 12 months. And so we won't have the benefit of the back end of the calendar year when the comps get a little bit easier. But we are seeing some signs of softness. And so we're cautious, and we did direct the market towards the low end of our guidance ranges. The swing factors, as we look in the second half, really is going to come down to volume. To the extent that we get what we normally would expect to see in our business, which is low single-digit volume growth, that's a potential catalyst, potential upside. To the extent that we continue to overrecover inflation, that's a potential catalyst as raw materials evolve, if raw materials come off rapidly, could create a bit of a tailwind. And the inverse is also true. As volumes evolve, if they continue to be volatile and soft, we could be at the low end of the range. Now normally, this time of the year, our range is narrower than we have at the moment. And our volume range of expectations is wider. Our volume expectations for the second half are everywhere from a low single-digit growth to low single-digit decline. It's highly unusual that we would have a range that would include a modest decline, but that's the environment that we're in.

Thanks, Ron. Appreciate that. Very, very helpful. Do you think -- where do you think your customers are in terms of that whole destocking recognizing? It's really hard to know for sure.

Look, I think -- well, firstly, the good news is in fast-moving consumer goods, by definition, the inventory will move through quicker, right? So this is a few quarters to deal with, not a year or 2 of stock levels to be worked off like in more durable goods. I think we're part of the way through. I don't think we're all the way through. I think we still see evidence of high levels of stock in certain segments, the beverage space in North America, certain subsegments of that. Premium coffee, we make all of the Nespresso capsules around the world. We know there's been a lot of inventory in that.

Wait, thank you for that.

And -- yes. Thanks for consuming them. So we just see anecdotal evidence that there's still more stock in the system. It's not a surprise to us. Our inventory levels were higher through the first half, and it's a reaction to the supply chain disruptions that we've all had to whether over the last couple of years. So that is just going to take a few quarters to unwind.

Sure. And I just want to make sure I got it. You said it on the earnings call, but your volume range is minus low single to up low single.

Correct.

Okay. Understood. Is this an environment where your customers are more likely to try new products and therefore, new packaging? Is the consumer more receptive to innovation? Or if they're a little bit in the bunker, they're probably less likely? I don't want to lead you one way or another, but how do you look at it?

Well, firstly, a lot of the innovation in our space, in our agenda, our innovation agenda is dominated by more sustainable packaging. That's where we're doubling down. That's where we see the greatest opportunities for differentiation. And that's where there's more pull the most pull from our brand owners and pull from their consumers. So that's a secular trend, which has been going on for a while and is not going to abate anytime soon. But I think within that secular trend, there's going to be vacillations and oscillations in terms of interest and receptivity and take-up. I think, George, I would probably say right now there's more of a hunkering-down mentality. Everyone in our value chain, from our suppliers upstream to our brand owner customers, is dealing with high levels of inflation and focusing on cost. It doesn't mean the conversations have stopped. It just means that products that might carry a premium might get pulled through at a slower rate than ordinarily would be the case. I think the trend over time is inexorable. I think there's no doubt that there's going to be continued take-up of more sustainable packaging, and that's not going to abate because of the economic cycle. It just might slow for a period.

Understood. Again, if there are any questions in the audience, happy to take them, live mic. There's a question midway down, if you just want to wait for the microphone. Thank you.

Related to this, on the sustainability driven demand, could you speak a little bit about extended producer responsibility laws? And how you guys are positioned for that going forward?

Yes. Look, that's a great question. We are very close to all of the evolving EPR regulations around the world, as you'd imagine, both individually, but also through groups that we're a member of like the Consumer Goods Forum, aligned with the consumer goods forum, which is where all of our brand owners are represented. By the way, Amcor is the only packaging converter that has a seat at the table in that group. We have sponsored what we call good EPR framework. So we've aligned on the framework that makes the most sense and put our expertise and our perspectives to bear in that, and we -- that's been published. And for the most part, a lot of the EPR that's evolved around the world, both in Europe and in places like Colorado, has followed some of those guidelines. Good EPR is EPR that generates funding for waste management infrastructure, right, as opposed to just a general revenue raise. Good EPR treats all substrates in a similar way. So there are some features of good EPR that we think are very favorable for our business because they level the playing field, they clarify their rules of engagement and ultimately will lead to particularly where there's deposits and there's economic incentives will lead to higher collection rates of material on the back end. So the regulation -- the regulatory framework in Europe is evolving in a sense through the European packaging and packaging waste directive that's very much aligned to our objectives to have all of our packaging recyclable to use more recycled content and to have wider adoption of EPR. So we're generally feeling pretty good about the regulatory environment and the way it's evolving.

Any other questions from the audience? So Ron, I want to switch gears a little bit. I'm going to dive back into sustainability in a little bit. But can you remind us about the game plan to reduce the -- to replace, excuse me, the $80 million to $90 million of lost earnings in Russia? And what's involved between further cost reduction, the reinvestment of the proceeds? And how that cadence and mapping occurs over the next couple of years?

Yes. Look, it's -- we had a very successful business in Russia for over 25 years. We had 3 factories there. That generated about 2% or 3% of our annual sales, but in any given year, would generate 4% to 5% of EBIT. So we're talking about between $80 million and $90 million of EBIT that we divested. We divested it maybe for obvious reasons, maybe not. We just find it -- believe it was untenable to continue to operate there as a Western multinational. And we decided to exit last August. We were able to exit that business in December. We ran a process and had good interest and actually exceeded our expectations with the sale. We liberated over $400 million of cash with that sale, which we've received and repatriated. And we said that we're going to do a few things to offset the deferred earnings. So firstly, we're going to invest $120 million of those proceeds, plus another $50 million we had flagged earlier, so call it $170 million in cost-reduction initiatives to help offset the divested earnings. In this environment, the fastest way that we know of to offset divested earnings is through cost. We're investing more in growth already, and growth takes longer to realize. And so the fastest way is to take structural cost out. What does that mean? It means that we'll close some plants. We'll take some SG&A out, particularly in Europe, and rightsize the business there. And that's part of the agenda. We'll get roughly $50 million of EBIT from that restructuring expense. That will flow through over the next couple of years. It will probably be more back-end weighted in fiscal '24. So the early part of the calendar year of fiscal '24, we'll start to see real benefits there, but we'll get a little bit along the way as we execute those initiatives. With the remainder of the proceeds, we've announced an increase to our share repurchases this year. So our intention is to buy back up to $500 million of shares this year. That's up from $400 million at the outset. And then we'll use the remainder of the proceeds to repay debt in proportion to the EBITDA that we divested. So that's the plan.

And again, more of the cost-reduction benefits at the end of fiscal [ '24 ].

They'll ramp up. They'll ramp up as we get into fiscal '24 as we close plants over the next quarter or 2.

Understood. Look, one thing we know that Amcor does well, will do many things well is you know how to optimize cost and improve returns. So we'll look forward to the progress there. Maybe giving away part of the answer, but that's not what I should have done. And I'm asking this of all the companies. Every company that comes up on the day as today, we thank you that you're here. We'll say you're optimistic about the outlook. You're going to grow. Life is wonderful. But at the end of the day, some days, it's more wonderful than others. We get that. Packaging in paper and forest is a relatively small portion of the S&P 500.

Yes.

So why should somebody think they really want to invest in Amcor right here right now when there's so much more that, frankly, is more important on a relative basis versus packaging, any packaging company, let alone Amcor? So what would you say?

Well, I'd start with the intrinsics of what is the investment offer. And what it offers is consistent growth. It's modest but defensive growth, and it's levered to the consumer globally. So if you believe that consumers are going to continue to consume packaged food, packaged personal care items, packaged health care products, and that will continue over time, you have support for a demand backdrop that's pretty consistent and pretty defensive. So that's the first thing. Second thing I would say is it's -- this is a business that is in well-consolidated segments. So if you were to look across our portfolio, all of our businesses are in -- have the scale position and the leadership position in well-consolidated segments. The third thing I'd say is the financial strength of the company is evident. The balance sheet has been very strong. It's an investment-grade balance sheet, and it's also been very consistent. So through economic cycles, through M&A cycles, there's not been a dramatic change in leverage and deleveraging over time. So it's a business that's fairly consistent, financially sound business that has demonstrated repeated returns to shareholders through share repurchases, but also a dividend. So you take those intrinsics and you map those against other investment alternatives, and it looks to us very much like our customers at a lower multiple. So consistent sort of low single-digit sort of volume growth levered to the consumer around the world, financial discipline and financial stability, good consolidated market positions, which is kind of code for some of the brand power that our customers have. It actually looks more like a consumer company than many of our other packaging peers and many that you'll talk to over the next couple of days. So that would be the pitch. And there's a role, we believe, in everybody's portfolio for that sort of consistency.

On that point, perhaps Amcor going back, I guess, 10, 15 years ago, from my vantage point, was a proponent of value-based pricing. Something that a lot of your peers at the time, when I bring it up, didn't really understand what it meant. Tell us where you stand in that regard. Every year, you're looking to do that. And what could it mean for the business over the next 2, 3 years?

Well, I'll start there. I'll start with the outcome. So if you were to look back over a 10- or 15-year period of Amcor, you'd see pretty consistent margin expansion over that period of time, 10, 20, 30 basis points every period, and then step changes concurrent with acquisitions. So that's the -- that's an outcome of a number of things. But one of the things that has contributed to that is the way we've gotten the market commercially. There's 2 things that I think we've done well over the years. One is value-based pricing, which I'll come to. The other is just having a very clinical and detailed understanding of where we make money. The business, for a long period of time now, has had a very granular understanding of the profitability of a customer, a product and even an order. And understanding the cost inputs has allowed us to get ahead of inflation, has allowed us to price for cost, et cetera. So that's one thing. Second thing is value-based pricing, which is how we convert innovation into value for shareholders ultimately, and that journey continues. And I think we've seen good evidence of that as we migrate our mix, and you've seen good strong mix contribution over the last several quarters, several years even, which is largely predicated on how we deliver value in places like health care, in places like pet food and coffee, where innovation has been really important. We've been pricing for that innovation. And now probably the greatest value-based pricing opportunity in history in our business is the more sustainable structures. And I say that because the brand owners are increasingly marketing the sustainability credentials of the package. You see container -- beverage containers, 100% recycled plastic. You see confectionery packaging. We're helping Nestle and Mars and Ferrero and others get into more paper-based structures. And almost every paper-based structure we sell in the confectionery market is labeled paper, recycled me, right? And so that's an opportunity. We're generating value for the brand owner and we're pricing for that value.

And so we should assume that continued 20, 30 bps of margin expansion over time.

Yes. Absolutely. And as we're growing more in the priority segments that we've called out, health care, protein, coffee, pet food, those are margin accretive as well would support the margin expansion.

Sure. So Ron, I want to push back on the recycled content in plastics and how you're dealing with that. So right now, do you have enough available supply of post-consumer resin that you can use in your food and beverage grade bottle requirement markets?

Right now, the answer is yes. Now we have to separate the conversation into rigid packaging and flexible packaging. And the rigid side of the business, which is in North and South America, the predominant input there is PET. Our usage of recycled material has been growing really rapidly. It's almost doubled over the last -- it's doubled every 2 years for the last several now. We will exit this financial year such that almost 20% of the material we convert will be recycled. We'll be in the high teens this financial year. And that number has been growing rapidly, and the supply has kept pace. There'll be a point in time where collection rates in the U.S., in particular, need to increase to support the increased usage. But at the moment, we're on track and we're adequately supplied. The flexibles side of the equation is a little bit more complicated because the predominant materials there are polyolefins, polyethylene, polypropylene. Mechanically recycled polyolefins can't be used back into food contact applications or into health care applications. So we are using mechanical recycled material in personal care items and in overwraps and things that are nonfood contact, and that's growing as well off a low base. But chemical recycling, advanced recycling will be the big unlock there. We're partnering with all of the major petrochemical companies. We signed a long-term deal with Exxon that we announced publicly at the end of last year. We've put some seed capital into a company called Licella to help facilitate the development of chemical recycling infrastructure around the world. That is the big unlock. And so from that perspective, the supply isn't quite there yet. But we are taking commercial shipments of material from Exxon and others to start to incorporate it.

Some -- there was an interesting article couple of weekends ago in Barron's that talked about the pluses and minuses in plastics and sustainability argument discussion. And one of the things that was mentioned has been mentioned before that, advanced recycling, yes, has a lot of promise. But when you look at some of the heat -- the energy consumption, the emissions, it might not be as positive from a sustainability standpoint as one would think. How do you answer that question? What are your [ thoughts like ].

Well, it starts to look more like glass and aluminum in terms of the energy consumption, right? Look, ultimately, there are going to be ways to decarbonize the production of advanced recycled material, just like there will be ways to decarbonize virgin production and other commodities that the world needs to consume. So look, I think on balance, it's a good outcome. It's a good end-of-life outcome to repurpose and create a circular loop for plastic -- soft plastics and flexible packaging. So I think it will have a role.

Yes, just hang on for the mic. Thanks, Ron.

Just a follow-up question with that on the soft plastics. As you think about the market and the investments you're making on the supply side, kind of where is that chicken-and-egg problem in terms of supply versus demand? And kind of how do you see it playing out?

Yes. Look, right now, I'd say the supply is there. The supply is there. I think the demand has been a little bit slower to ramp up. But again, I take this whole agenda around sustainable packaging as this long-term secular trend, which has got decades to play out. And from quarter-to-quarter, you're going to have more or less demand than the previous quarter. I think right now, because all of these products will carry a premium, while brand owners and consumers are combating inflation, the willingness to proactively adopt something a quarter earlier than they absolutely need to is maybe not there. It's just a slower ramp-up than we see. So the chicken and egg, I think, the egg, if you will, the supply is there, and the chicken will come over time. I think there's another question over here.

Brian, hang on for the mic.

Ron, you just mentioned carbon footprint, right? And it just -- from your perspective, is the bigger priority reducing carbon footprint? Or is the bigger priority just to recyclability, right, to keep waste out of landfills, out of rivers like -- because they are 2 very different things. And I think sometimes, we solve -- companies are trying to solve for one, but they're ignoring the other. So just your perspective on that and...

Yes. It's evolved. And I think you're asking in terms of our customers and their agendas? What in their agendas?

Right. Yes.

Yes. Look, it's -- firstly, it varies by -- from CPG to CPG, to some extent. But all of them have multiple objectives, and they've all made very public commitments on both fronts in terms of packaging waste and also now carbon. So again, from quarter to quarter, there seems to be some ebbs and flows, but I think both are going to become important. That's the answer. I think it's both. And if I think about some of our bigger brand owners, the conversations around packaging waste and packaging source reduction are supportive for their decarbonization efforts. Like the first order of business is taking weight out, taking material out of the package, no matter what the format is, is just taking material out, material content out to help them meet their Scope 3 goals. So there is a synergy there and there's a natural kind of symbiosis between the 2 agendas. But both are important.

And what about from a -- like a regulation, government interaction on this topic [indiscernible].

Well, I'd say for us, the more direct regulatory intervention, if you will, is on the waste side. So as we talked about before, like Europe has got a regulatory agenda around packaging and packaging waste, which is pretty specific. It talks about recyclability, talks about recycled content, calls for more EPRs amongst the member states. So I'd say that there's probably more direct regulatory intervention on the waste side.

On that topic, Ron, and when you consider your more sustainable products, recognizing, you'll say, George, basically, we're trying to make all of our products more sustainable.

Yes.

What do you think the premium is on that more sustainably packaged product at the consumer level from what you can see and what your people tell you? Is it 5%? 15%? And does that pay sufficiently for the cost through the chain back to get that?

Yes. Look, remember that our costs are a fraction of the COGS for the finished product and a smaller fraction, again, of the price at retail. Our estimation is brand owners, and you guys have done work on this as well, it supports work that we've done and others have done. Brand owners believe and consumers are expressing a willingness to pay a modest premium, right, 5%, 10% maybe. That's a lot of headroom when you think about the package premium, right? That's a lot of headroom because the package is such a small portion of the cost. We know that a couple of years ago, we took Unilever into 100% recycled containers for Hellmann's Mayonnaise in the U.S.. And we sort of penciled out the math there. And I think the premium on virgin versus -- recycled PET versus Virgin at the time was like 30%, 40%. They still went forward with the conversion and they paid the premium. The retail price change was indecipherable. It might have -- it translated to $0.01 or so on a $4 jar of mayonnaise. So not even sure they pushed it through. But if they had, nobody would have noticed. So I think there's plenty of headroom, particularly if the consumer -- and we've seen this in other. There's proxies for other cases where the consumer has paid a premium willingly. Like if you think about the premium for all things organic, those premiums are well in excess of the premium that would be required to recover sustainable packaging costs.

So you have a cost that the consumer really doesn't see necessarily. You have sufficient for now post-consumer in Rigid. In Flexibles, not as good.

Getting there.

Getting there. And yet -- so overall, I'd say on balance, things are promising there. Why are we not seeing -- and the company fairly and consistently says that more sustainable products are your greatest growth opportunity.

Yes.

And so why are we not seeing more momentum there if, in fact, it's not a big up charge to the consumer? Is it just the consumer in aggregate is spending less on everything, and therefore, that's why it's not translated...

Well, I think that -- but I also think that -- I think it's coming, and there's a couple of things that I would point to see it coming. I think one is the fact that most brand owners have made big public commitments around 2025 or 2030 that they're going to have to hit. The second thing is, as regulation takes hold, particularly in Europe, which is at the leading edge of this whole discussion, that require certain things of packaging that's going to create pull. That's not in effect yet, right? So you can look out over the medium-term horizon and see some catalysts, some exogenous catalysts that will stimulate demand. I think in the short term, these products carry a premium. They carry a premium. And at the moment, while the consumer may not notice the difference, the brand owners are all public companies trying to make quarterly numbers, and they're not going to be entertaining a premium for something that is not absolutely necessary right now. But I think that the long-term story here is where the focus should be. There's incredible amounts of energy in the whole value chain on this topic.

In terms of pricing, I think we see that the question that continually comes up is feedstock availability. How do you feel about that supply chain you just mentioned, being able to produce enough feedstock to meet these goals.

Yes. Look, right now, we feel good about it. I think because of the investments that are being made in the space and in the chemical recycling space, there's actually -- there's real capital being deployed. Exxon's got a functioning asset. They're building -- they're continuing to expand their production base. Dow, others, Licella in Australia, where I just was, is another example. So there's real capital being deployed. So you can see a line of sight over the next 2 or 3 years to a material step-up in the supply side of things. And demand has to catch up now. So I think back to the chicken-and-egg discussion, I think right now, supply at the moment is probably ahead of demand, particularly for flexible applications. And then in rigids, particularly on PET, we continue to have adequate supply as collection rates gradually rise across the U.S.

Brian?

Just getting back to George's question. If we could -- if you could look into the pipeline of plans or projects that brand owners have to shift packaging, is that pipeline been backed up because of all the supply chain and COVID? The last couple of years, it's been tough for these companies to just keep in stock, right?

Yes.

So is there a pipeline of ideas and projects that...

There's a little bit of pent-up demand. Yes, I would say that's right. I think there was probably a 12- to 18-month period there where projects didn't progress. The initiative and the inspiration and the motivation hasn't changed, but there was more of a -- if you think about the hierarchy of needs, I mean, staying supplied was the topic for a period of time there. I think we're out of that now. I think we're out of that. And I think the agenda will start to accelerate as a result.

So we may see more of this over the next year or 2?

I think so. Yes, we're seeing more trialing activities. I mean I referred to some paper trials that we're doing on a number of different brands that have all kind of come together pretty quickly. That's all pent-up from the last couple of years. So I think the demand is there.

So Ron, when people pull up the Amcor website, they see AmPrima. They see AmLite recyclable. Which of your suite of products do you -- are you most sort of confident about the long-term revenue and profit pool, recognizing it's going to be all of them.

Well, the common thread through those is that they are designed to be recycled. And so we're really excited about AmFiber. So AmFiber is a platform of performance paper-based products. And we're excited about that because consumers get excited about paper. We know paper can be used in a lot of applications. It can't just be -- it needs to be functional and it needs to perform and it needs barrier and it needs to be printable and processable, et cetera. And we believe we've got some unique technologies to do that. So we're pretty excited about AmFiber as a platform. It would be the one that I'd call out, but it's almost like picking your kids. I'm not sure, I think. The thing about AmFiber is the recycling infrastructure.

Or picking your parents.

Or picking your parents, even worst. The recycling infrastructure is just more pervasive for paper, and it needs to catch up for plastics. We believe that it will catch up, but it will take some time.

So as we look out over your key or priority end markets over time, we've got health care, we've got coffee. We have proteinase is another picking-your-kids type question, which of those end markets do you feel right now is maybe not trying to be critical, punching below its weight that we should expect some improvement in? And then irrespective of your answer there, tell us about your outlook on protein and how you see that developing.

Yeah. Look, what certainly punched -- been punching above its way has been health care. So health care is a franchise business for Amcor. It's almost $2 billion in sales within our portfolio. It's half medical packaging, half pharma packaging. I mean we love the space for all the reasons you probably expect, lots of innovations, very sticky long-term relationships with customers. It's a global business. So we love that one, and it's been punching well above its weight, including in the most recent half. I think on the other side, there's been softness in single-serve coffee, the premium coffee that we talked about earlier.

I'm doing what I can.

Yes, keep doing your part. And there's been some downtrading fresh meat to process meat, but these are just blips, we believe. They're longer-term secular tailwinds to growth in these segments. We're really optimistic about protein. It's not a segment Amcor participated in prior to acquiring Bemis. We're super excited. Why? For a number of reasons, but 1 of them is there's really one dominant player globally. There's an appetite out there for another player, and we've got some great technology. And so we're going to be pushing that one really hard. Just particularly on the fresh side, it's a great opportunity to be the second global supplier.

So in summary, and thank you for your comments, Ron. Consumers going through maybe a little bit of an air pocket. Nonetheless, Amcor remains pretty steadfast in this strategy. If people want sort of innovation, defensiveness, predictability and cash flow, you would argue you're a good place for that to be.

It's a good summary.

Bound. And you're still really comfortable and positive on the outlook for more sustainable products and the sustainability of plastics, even if there's some growing pains in terms of demand relative to supply and...

Long-term trend is in one direction.

Okay. Ron, thank you so much. Everybody, please join me in thanking Ron Delia for a great presentation of Amcor.

Thanks for coming. Thanks for having us, George.

It's my pleasure.

Okay. Thank you.