- Rigid Packaging Market Size, Trends, Sustainable Innovations and Key Player Insights
Nov 7, 2025
Precedence Research
According to data published by Towards Packaging, a sister firm of Precedence Research, the global rigid packaging market will rise from USD 550.49 billion in 2025 to USD 1,020.61 billion by 2034, growing at a CAGR of 7.1%. The surge is fueled by increasing use of sustainable and innovative packaging materials, particularly in food, healthcare, and cosmetics industries, led by key players such as Amcor, Berry Plastics, and Sealed Air Corporation.
Ottawa, Nov. 07, 2025 (GLOBE NEWSWIRE) -- The global rigid packaging market is projected to grow from USD 550.49 billion in 2025 to USD 1,020.61 billion by 2034, at a CAGR of 7.1%. Growth is driven by rising demand for eco-friendly, lightweight, and smart packaging solutions across industries such as food & beverages, healthcare, and cosmetics. Major players include Amcor, Berry Plastics, and Sealed Air Corporation, with strong markets in North America, Europe, and Asia Pacific.
Request Research Report Built Around Your Goals: sales@towardspackaging.com
Report Highlights: Important Revelations
Key influences on the rigid packaging sector in Asia Pacific. North America's impact on the global rigid packaging scene. Significance of rigid plastic packaging across different industries. Crucial function of rigid boxes in contemporary packaging methods. Wide-ranging uses of rigid packaging within the food and beverage industry
Get All the Details in Our Solutions - Access Report Sample: https://www.towardspackaging.com/download-sample/5147
The rigid packaging sector makes prominent use of plastic owing to their numerous advantages, include becoming durable, portable, chemically impermeable, and reasonably priced. Considering 31% of the world's plastic utilisation volume going to the packaging, the industry certainly is dominating with the manner when plastics are used. Comparing to other forms of packaging, rigid packaging is more lightweight. It also reduces food waste and spoiling, protects against breakage, and offers a host of other advantages. Rigid plastic widely used in various industries such as food and beverage, personal care, healthcare and others.
Rigid packaging is often chosen since it is lightweight than components including glass or metal and consumes less electricity to transport. The carbon footprint of a product can be reduced by up to 40% by switching from glass bottles to plastic equivalents, according to recent research. This emphasises rigid plastic packaging's sustainability, which makes it a sensible option for both producers and customers.
Story Continues
Rigid Packaging Market Trends
Sustainable and Eco-Friendly Packaging: The packaging industry is shifting towards recyclable, biodegradable, and reusable materials. Companies are increasingly adopting plant-based plastics, glass, and recycled PET to reduce environmental impact. Smart Packaging Technologies: Integration of QR codes, IoT, and RFID technology into rigid packaging enhances customer engagement and supply chain transparency, offering real-time authentication, tracking, and product information through smart labels. Lightweight Packaging Solutions: Manufacturers are focusing on lightweight yet durable packaging materials to lower costs and carbon footprints, with innovations in thin-wall plastic containers and lightweight glass bottles gaining traction. Customization and Personalization: Advances in digital printing and 3D packaging design enable brands to create tailored packaging that resonates with consumer preferences, including limited-edition and interactive designs. Regulatory Compliance and Circular Economy: Governments worldwide are enforcing stricter regulations on packaging waste and sustainability, promoting circular economy principles focused on reuse and recycling of packaging materials. Eco-friendly and Sustainable Packaging: Due to rising concerns about global warming the demand for rigid packaging solutions that are recyclable or manufactured from recycled materials has increased. This trend is driven by consumers' increased awareness of environmental issues, including plastic waste and pollution. Companies are investing in alternative materials like biodegradable plastics and plant-based polymers to reduce environmental impact. Packaging is being designed with reduced material usage and improved recyclability, focusing on minimalistic designs and less waste. Premiumization of Products: As consumers increasingly demand for higher-quality products, there is a rising trend towards premium packaging solutions. Rigid packaging, particularly glass and high-quality plastic, is utilized to convey freshness, luxury, and quality. This is particularly evident in the food and beverage sector, where glass bottles, jars, and rigid containers are being used to differentiate premium products. Shift from Plastic to Alternative Materials: There is a gradual shift away from single-use plastic in favour of alternative rigid packaging materials such as glass, metal, and paperboard. This trend is especially strong in consumer goods, food & beverages, and cosmetics industries. Glass is regaining popularity for its premium feel and sustainability attributes, though it remains heavy and costly compared to plastic. Customization and Personalization: Consumers are increasingly preferring personalized products, and packaging plays a role in this trend. Brands are focusing on offering customized packaging designs, whether through colors, shapes, or branding elements, to appeal to specific consumer groups.
North America's Role in Global Rigid Packaging Landscape
North America is expected to grow at a significant rate over the forecast period. The robust advancements in the rigid thermoform plastic packaging industry are responsible for this region's expansion. Numerous benefits of thermoforming include its lower cost and adaptability. The rigid thermoform plastic packaging industry has seen enormous growth in product manufacture, creating a sizable client base that is fueling the expansion of the North American rigid packaging market. The key players operating in the North America region are focused on adopting inorganic growth strategies like partnership/collaboration to develop rigid packaging, which is estimated to drive the growth of the rigid packaging market in the near future.
North America is the rigid packaging sector's second-greatest market. North America is acknowledged as the world's top region in packaging consumption and is home to major players in the industry, including International Paper, Tetrapak, Reynolds Group, Ball Corporation, and Owens-Illinois. In the course of the region, rigid materials are widely used in a variety of applications.
The US has the biggest market share for rigid packaging in North America. This dominance is a direct result of the nation's substantial consumer base, advanced technology, and strong industrial infrastructure. The food and beverage, pharmaceutical, personal care, and household product industries are just a few of the diverse industries that make up the U.S. rigid packaging market.
North America's standing as a major participant in the global rigid packaging scene is strengthened by the existence of top packaging companies, ongoing innovation, and research and development spending. Furthermore, producers in the region are compelled to implement eco-friendly practices and provide recyclable packaging solution due to strict restrictions pertaining to packaging materials and sustainability activities.
North America's leading position in the rigid packaging market underlines how important it is to the development of industry trends and innovation in response to changing consumer needs and legal regulations.
U.S. Rigid Packaging Market Size 2025-2030 (Value - USD Billion)
Year/Market Size 2025 2026 2027 2028 2029 2030 USD Billion 140.9 145.5 150.6 156.2 162.3 168.9
U.S. Rigid Packaging Market Size By Material 2025-2030 (Value - USD Billion)
By Material 2025 2026 2027 2028 2029 2030 Plastic 49.1 50.0 51.0 52.1 53.3 54.6 Metal 27.3 28.8 30.3 32.1 34.0 36.0 Paper & Paperboard 38.7 39.7 40.9 42.2 43.6 45.1 Glass 20.4 21.3 22.2 23.2 24.2 25.4 Bioplastic 5.3 5.8 6.3 6.7 7.2 7.8
U.S. Rigid Packaging Market Size By Product Type 2025-2030 (Value - USD Billion)
By Product Type 2025 2026 2027 2028 2029 2030 Boxes 34.5 36.0 37.7 39.5 41.6 43.8 Trays 23.1 24.0 24.9 25.9 27.0 28.2 Containers & Cans 35.8 36.7 37.8 38.9 40.2 41.5 Bottles & Jars 38.9 40.1 41.4 42.8 44.4 46.1 Others 8.6 8.7 8.8 9.0 9.1 9.3
More Insights of Towards Packaging:
Rigid Substrate Market: Smart Packaging, Sustainability, and AI Integration Rigid Box Market Size, Segments, and Regional Data with Competitive Analysis Rigid Chilled Food Packaging Market Research, Consumer Behavior, Demand and Forecast PET Rigid Plastic Packaging Market Dynamics, Competitive Forces and Strategic Pathways Rigid Sleeve Boxes Market Size, Segments, Regions, Competition & Value Chain 2025-2035 Collapsible Rigid Containers Market Size, Share, Trends, Analysis, and Forecast 2025-2035 Rigid Polyolefin Market Size, Competitive Analysis, Value Chain & Trade Analysis 2025-2034 Rigid Paper Packaging Market Demand Soars in 2025, Fueled by Food, E-Commerce, and Recyclability Rigid IBC Market Size, Trends, Segmentation, Competitive Landscape, and Regional Outlook 2025-2035 Rigid Food Packaging Market Size, Trends, Segmentation, Regional Outlook, and Competitive Landscape to 2035 Rigid Bulk Packaging Market Size, Segments Data, Regional Trends, Competitive Landscape, and Key Manufacturers PP Rigid Plastic Packaging Market Size, Segments, Companies, Competitive Analysis, Value Chain & Trade Analysis 2025-2034 Rigid Tray Market Size, Segments, and Regional Outlook (2025-2035), Competitive Landscape, Value Chain, and Trade Analysis Luxury Rigid Box Market Size, Share, Trends, Segmentation, Regional Outlook, Manufacturers, and Trade Data and Forecast 2025-2035 Rigid Plastic Packaging Market Size, Segments, Regional Outlook (NA, EU, APAC, LA, MEA)
Sustainable Development Trends in Rigid Packaging
Berry Global Highlights Global Scale and Diversified Strength with $13 Billion in Revenue
Berry Global Group, Inc. (NYSE: BERY), a leading global supplier of innovative packaging and engineered products, today released key operational and financial metrics underscoring its expansive global footprint, diversified business model, and strategic focus on key consumer and industrial end-markets.
The overview confirms the Company's commanding position in the global packaging industry, anchored by its USD $13 billion in annual revenue and an operational network of approximately 290 manufacturing locations worldwide.
Geographic Dominance and Operational Scale
Berry Global's global presence is strategically aligned with major consumer markets, with a clear focus on the Western hemisphere and Europe:
Sales Concentration:North America remains the Company’s primary sales driver, accounting for a majority (57%) of net sales. EMEA (Europe, Middle East & Africa) represents the next largest market, contributing a substantial 35% of net sales. Manufacturing Footprint: The operational base is heavily concentrated in its two largest markets, with Europe hosting the highest number of sites (130) and North America close behind (121). This dual regional strength ensures robust supply chain resilience and customer proximity.
CEO Quote (Example):"Our operational footprint of nearly 290 sites is a critical competitive advantage, allowing us to serve global customers with local expertise and speed. The clear alignment between our manufacturing sites in Europe and North America and our primary revenue streams underscores a well-executed strategy focused on global scale with regional execution."
Diversified and Balanced Divisional Strength
Berry Global maintains a highly balanced and diversified revenue profile across its four main business segments, minimizing exposure to volatility in any single market:
Division % of Total Revenue Strategic Insight Consumer Packaging – International 38 % The single largest division, highlighting the success of the Company's international consumer strategy. Consumer Packaging – North America 21 % Core domestic strength in consumer markets. Health, Hygiene & Specialties (HHS) 21 % Provides stability and access to high-growth, non-cyclical end markets. Engineered Materials 20 % A significant, balanced contributor, serving diverse industrial and specialty markets.
CFO Quote (Example):"The even split across our four core divisions—each contributing approximately 20% of revenue, with International Consumer Packaging providing a solid anchor at 38%—is a testament to the strength of our business model diversification. This balance ensures financial resilience and supports our investment strategy focused on Innovation for a Circular Economy."
Berry Global continues to integrate its financial strength and global scale with its core mission to lead the industry in sustainable solutions. The Company is leveraging its vast network and deep innovation expertise to advance materials science and product designs that promote recyclability and the use of post-consumer recycled content, accelerating the transition to a net-zero economy.
About Berry Global At Berry Global Group, Inc. (NYSE: BERY), we create innovative packaging and engineered products that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy.
Significant Reduction in Freight & GHG Emissions Achieved Through Sustainable Packaging Conversion
This report highlights the dramatic positive impact of converting from a composite can to a non-round, nestable, single-substrate PP (Polypropylene) container for our 2 million unit volume product. The transition has yielded a 320% increase in freight efficiency per truck, resulting in a 67.92% reduction in annual truck shipments and a total annual Greenhouse Gas (GHG) emission reduction of 98 MT. This initiative showcases a clear commitment to operational sustainability and a lower carbon footprint across the supply chain.
Key Findings & Metrics: Life Cycle Assessment (LCA) and Freight
The following data, derived from the Life Cycle Assessment (LCA) focusing on freight, demonstrates the immediate and quantifiable benefits of the packaging change.
Case Study: Composite Can to Rigid Plastic Container (Volume: 2 Million Units)
Metric Before (Composite Can) After (PP Container) % Change Interpretation Parts per Truck 37,800 120,960 +320 % Massive increase in loading density due to the nestable, non-round design. Trucks per Year 53 17 −67.92% Significant reduction in logistics volume, cutting the need for more than two-thirds of annual truck trips. Gallons of Diesel per Year 2,609 1,569 −39.86% Substantial fuel savings directly lowering operational costs and fossil fuel consumption. **Emissions per Year (MT CO₂) ** 27 MT CO₂ 16 MT CO₂ −40.74% Direct reduction in transport-related carbon emissions due to fewer trucks on the road.
Environmental Impact: GHG Emissions Comparison
The analysis of total annual Greenhouse Gas (GHG) emissions across the entire product lifecycle shows a significant environmental win.
Composite Can (Before): 631 MT/year PP Container (After): 533 MT/year Total Annual Reduction:98 MT/year
Impact Equivalencies (for Stakeholder Communication):
To put the 98 MT/year reduction into relatable terms for a broader audience, this is equivalent to:
21 passenger vehicles driven for one year. 227 barrels of oil consumed. The carbon sequestration of 128 acres of U.S. forest for one year.
The successful conversion to the non-round, nestable, single-substrate PP container is a testament to our commitment to both operational excellence and environmental stewardship. By prioritizing smart, space-saving design, we have not only achieved a 320% improvement in freight loading but also directly translated that efficiency into tangible environmental benefits, significantly reducing our transportation carbon footprint and overall product emissions. This project is a model for how strategic design can deliver both cost savings and a lower-impact supply chain.
Lightweighting & Nestable Design Achieves Significant Environmental and Cost Savings
The findings of a case study demonstrating the significant environmental and economic benefits achieved by transitioning from an HDPE Blow-Molded Canister to a PP Thermoformed Container. The design focused on lightweighting and nestability for a product volume of 10 million units over a transportation distance of 200 miles.
Key Performance Improvements
The shift to the "Eco Canister" yielded substantial benefits across weight, efficiency, and sustainability:
Weight Reduction:34% package weight reduction. Logistics Improvement:7.4× more canisters per truck load was achieved due to the nestable design (Units per truck increased from 35,000 to 259,200). Cubic Efficiency: Increased cubic efficiency in transportation. Recyclability: Improvement in end-of-life recyclability.
Inbound Freight Environmental and Economic Impact
The dramatic increase in units per truck led to major reductions in freight requirements and associated costs:
Metric Annual Reduction Detail Trucks Eliminated 247 inbound trucks Reduced road congestion and overall logistics footprint. Diesel Savings 7,600 gallons Significant reduction in fossil fuel consumption. Cost Savings $ 20,520 Calculated based on diesel at $2.70 per gallon.
Emissions Comparison and Total Reduction
The project resulted in a significant reduction in annual Greenhouse Gas (GHG) emissions across both manufacturing and freight.
Parameter Current (HDPE Blown Canister) (MT/year) Eco (PP Thermoformed Container) (MT/year) Reduction (MT/year) Package Manufacture 1,134 670 -464 Freight 90 12 -78 Total 1,224 682 542
The Total GHG Reduction is 542 metric tons per year.
Equivalent Environmental Impact
The annual GHG savings are equivalent to a substantial positive environmental impact, illustrating the scale of the reduction:
117 passenger vehicles driven for one year. 1,255 barrels of oil consumed. 708 acres of forests storing carbon.
This information highlights the compelling business case for sustainable design changes, demonstrating how lightweighting and nestability can deliver simultaneous benefits in environmental performance, operational efficiency, and cost reduction.
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About Us
Towards Packaging is a global consulting and market intelligence firm specializing in strategic research across key packaging segments including sustainable, flexible, smart, biodegradable, and recycled packaging. We empower businesses with actionable insights, trend analysis, and data-driven strategies. Our experienced consultants use advanced research methodologies to help companies of all sizes navigate market shifts, identify growth opportunities, and stay competitive in the global packaging industry.
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- Rigid Packaging Market Size, Trends, Sustainable Innovations and Key Player Insights
Nov 7, 2025
Ottawa, Nov. 07, 2025 (GLOBE NEWSWIRE) -- The global rigid packaging market is projected to grow from USD 550.49 billion in 2025 to USD 1,020.61 billion by 2034, at a CAGR of 7.1%. Growth is driven by rising demand for eco-friendly, lightweight, and smart packaging solutions across industries such as food & beverages, healthcare, and cosmetics. Major players include Amcor, Berry Plastics, and Sealed Air Corporation, with strong markets in North America, Europe, and Asia Pacific.
Request Research Report Built Around Your Goals: sales@towardspackaging.com
Report Highlights: Important Revelations
Key influences on the rigid packaging sector in Asia Pacific.North America's impact on the global rigid packaging scene.Significance of rigid plastic packaging across different industries.Crucial function of rigid boxes in contemporary packaging methods.Wide-ranging uses of rigid packaging within the food and beverage industry
Get All the Details in Our Solutions - Access Report Sample: https://www.towardspackaging.com/download-sample/5147
The rigid packaging sector makes prominent use of plastic owing to their numerous advantages, include becoming durable, portable, chemically impermeable, and reasonably priced. Considering 31% of the world's plastic utilisation volume going to the packaging, the industry certainly is dominating with the manner when plastics are used. Comparing to other forms of packaging, rigid packaging is more lightweight. It also reduces food waste and spoiling, protects against breakage, and offers a host of other advantages. Rigid plastic widely used in various industries such as food and beverage, personal care, healthcare and others.
Rigid packaging is often chosen since it is lightweight than components including glass or metal and consumes less electricity to transport. The carbon footprint of a product can be reduced by up to 40% by switching from glass bottles to plastic equivalents, according to recent research. This emphasises rigid plastic packaging's sustainability, which makes it a sensible option for both producers and customers.
Rigid Packaging Market Trends
Sustainable and Eco-Friendly Packaging: The packaging industry is shifting towards recyclable, biodegradable, and reusable materials. Companies are increasingly adopting plant-based plastics, glass, and recycled PET to reduce environmental impact.Smart Packaging Technologies: Integration of QR codes, IoT, and RFID technology into rigid packaging enhances customer engagement and supply chain transparency, offering real-time authentication, tracking, and product information through smart labels.Lightweight Packaging Solutions: Manufacturers are focusing on lightweight yet durable packaging materials to lower costs and carbon footprints, with innovations in thin-wall plastic containers and lightweight glass bottles gaining traction.Customization and Personalization: Advances in digital printing and 3D packaging design enable brands to create tailored packaging that resonates with consumer preferences, including limited-edition and interactive designs.Regulatory Compliance and Circular Economy: Governments worldwide are enforcing stricter regulations on packaging waste and sustainability, promoting circular economy principles focused on reuse and recycling of packaging materials.Eco-friendly and Sustainable Packaging: Due to rising concerns about global warming the demand for rigid packaging solutions that are recyclable or manufactured from recycled materials has increased. This trend is driven by consumers' increased awareness of environmental issues, including plastic waste and pollution. Companies are investing in alternative materials like biodegradable plastics and plant-based polymers to reduce environmental impact. Packaging is being designed with reduced material usage and improved recyclability, focusing on minimalistic designs and less waste.Premiumization of Products: As consumers increasingly demand for higher-quality products, there is a rising trend towards premium packaging solutions. Rigid packaging, particularly glass and high-quality plastic, is utilized to convey freshness, luxury, and quality. This is particularly evident in the food and beverage sector, where glass bottles, jars, and rigid containers are being used to differentiate premium products.Shift from Plastic to Alternative Materials: There is a gradual shift away from single-use plastic in favour of alternative rigid packaging materials such as glass, metal, and paperboard. This trend is especially strong in consumer goods, food & beverages, and cosmetics industries. Glass is regaining popularity for its premium feel and sustainability attributes, though it remains heavy and costly compared to plastic.Customization and Personalization: Consumers are increasingly preferring personalized products, and packaging plays a role in this trend. Brands are focusing on offering customized packaging designs, whether through colors, shapes, or branding elements, to appeal to specific consumer groups.
North America's Role in Global Rigid Packaging Landscape
North America is expected to grow at a significant rate over the forecast period. The robust advancements in the rigid thermoform plastic packaging industry are responsible for this region's expansion. Numerous benefits of thermoforming include its lower cost and adaptability. The rigid thermoform plastic packaging industry has seen enormous growth in product manufacture, creating a sizable client base that is fueling the expansion of the North American rigid packaging market. The key players operating in the North America region are focused on adopting inorganic growth strategies like partnership/collaboration to develop rigid packaging, which is estimated to drive the growth of the rigid packaging market in the near future.
North America is the rigid packaging sector's second-greatest market. North America is acknowledged as the world's top region in packaging consumption and is home to major players in the industry, including International Paper, Tetrapak, Reynolds Group, Ball Corporation, and Owens-Illinois. In the course of the region, rigid materials are widely used in a variety of applications.
The US has the biggest market share for rigid packaging in North America. This dominance is a direct result of the nation's substantial consumer base, advanced technology, and strong industrial infrastructure. The food and beverage, pharmaceutical, personal care, and household product industries are just a few of the diverse industries that make up the U.S. rigid packaging market.
North America's standing as a major participant in the global rigid packaging scene is strengthened by the existence of top packaging companies, ongoing innovation, and research and development spending. Furthermore, producers in the region are compelled to implement eco-friendly practices and provide recyclable packaging solution due to strict restrictions pertaining to packaging materials and sustainability activities.
North America's leading position in the rigid packaging market underlines how important it is to the development of industry trends and innovation in response to changing consumer needs and legal regulations.
U.S. Rigid Packaging Market Size 2025-2030 (Value - USD Billion)
Year/Market Size202520262027202820292030USD Billion140.9145.5150.6156.2162.3168.9
U.S. Rigid Packaging Market Size By Material 2025-2030 (Value - USD Billion)
By Material202520262027202820292030Plastic49.150.051.052.153.354.6Metal27.328.830.332.134.036.0Paper & Paperboard38.739.740.942.243.645.1Glass20.421.322.223.224.225.4Bioplastic5.35.86.36.77.27.8
U.S. Rigid Packaging Market Size By Product Type 2025-2030 (Value - USD Billion)
By Product Type202520262027202820292030Boxes34.536.037.739.541.643.8Trays23.124.024.925.927.028.2Containers & Cans35.836.737.838.940.241.5Bottles & Jars38.940.141.442.844.446.1Others8.68.78.89.09.19.3
More Insights of Towards Packaging:
Rigid Substrate Market: Smart Packaging, Sustainability, and AI IntegrationRigid Box Market Size, Segments, and Regional Data with Competitive AnalysisRigid Chilled Food Packaging Market Research, Consumer Behavior, Demand and ForecastPET Rigid Plastic Packaging Market Dynamics, Competitive Forces and Strategic PathwaysRigid Sleeve Boxes Market Size, Segments, Regions, Competition & Value Chain 2025-2035Collapsible Rigid Containers Market Size, Share, Trends, Analysis, and Forecast 2025-2035Rigid Polyolefin Market Size, Competitive Analysis, Value Chain & Trade Analysis 2025-2034Rigid Paper Packaging Market Demand Soars in 2025, Fueled by Food, E-Commerce, and RecyclabilityRigid IBC Market Size, Trends, Segmentation, Competitive Landscape, and Regional Outlook 2025-2035Rigid Food Packaging Market Size, Trends, Segmentation, Regional Outlook, and Competitive Landscape to 2035Rigid Bulk Packaging Market Size, Segments Data, Regional Trends, Competitive Landscape, and Key ManufacturersPP Rigid Plastic Packaging Market Size, Segments, Companies, Competitive Analysis, Value Chain & Trade Analysis 2025-2034Rigid Tray Market Size, Segments, and Regional Outlook (2025-2035), Competitive Landscape, Value Chain, and Trade AnalysisLuxury Rigid Box Market Size, Share, Trends, Segmentation, Regional Outlook, Manufacturers, and Trade Data and Forecast 2025-2035Rigid Plastic Packaging Market Size, Segments, Regional Outlook (NA, EU, APAC, LA, MEA)
Sustainable Development Trends in Rigid Packaging
Berry Global Highlights Global Scale and Diversified Strength with $13 Billion in Revenue
Berry Global Group, Inc. (NYSE: BERY), a leading global supplier of innovative packaging and engineered products, today released key operational and financial metrics underscoring its expansive global footprint, diversified business model, and strategic focus on key consumer and industrial end-markets.
The overview confirms the Company's commanding position in the global packaging industry, anchored by its USD $13 billion in annual revenue and an operational network of approximately 290 manufacturing locations worldwide.
Geographic Dominance and Operational Scale
Berry Global's global presence is strategically aligned with major consumer markets, with a clear focus on the Western hemisphere and Europe:
Sales Concentration:North America remains the Company’s primary sales driver, accounting for a majority (57%) of net sales.EMEA (Europe, Middle East & Africa) represents the next largest market, contributing a substantial 35% of net sales.Manufacturing Footprint: The operational base is heavily concentrated in its two largest markets, with Europe hosting the highest number of sites (130) and North America close behind (121). This dual regional strength ensures robust supply chain resilience and customer proximity.
CEO Quote (Example):"Our operational footprint of nearly 290 sites is a critical competitive advantage, allowing us to serve global customers with local expertise and speed. The clear alignment between our manufacturing sites in Europe and North America and our primary revenue streams underscores a well-executed strategy focused on global scale with regional execution."
Diversified and Balanced Divisional Strength
Berry Global maintains a highly balanced and diversified revenue profile across its four main business segments, minimizing exposure to volatility in any single market:
Division% of Total RevenueStrategic InsightConsumer Packaging – International38%The single largest division, highlighting the success of the Company's international consumer strategy.Consumer Packaging – North America21%Core domestic strength in consumer markets.Health, Hygiene & Specialties (HHS)21%Provides stability and access to high-growth, non-cyclical end markets.Engineered Materials20%A significant, balanced contributor, serving diverse industrial and specialty markets.
CFO Quote (Example):"The even split across our four core divisions—each contributing approximately 20% of revenue, with International Consumer Packaging providing a solid anchor at 38%—is a testament to the strength of our business model diversification. This balance ensures financial resilience and supports our investment strategy focused on Innovation for a Circular Economy."
Berry Global continues to integrate its financial strength and global scale with its core mission to lead the industry in sustainable solutions. The Company is leveraging its vast network and deep innovation expertise to advance materials science and product designs that promote recyclability and the use of post-consumer recycled content, accelerating the transition to a net-zero economy.
About Berry Global At Berry Global Group, Inc. (NYSE: BERY), we create innovative packaging and engineered products that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy.
Significant Reduction in Freight & GHG Emissions Achieved Through Sustainable Packaging Conversion
This report highlights the dramatic positive impact of converting from a composite can to a non-round, nestable, single-substrate PP (Polypropylene) container for our 2 million unit volume product. The transition has yielded a 320% increase in freight efficiency per truck, resulting in a 67.92% reduction in annual truck shipments and a total annual Greenhouse Gas (GHG) emission reduction of 98 MT. This initiative showcases a clear commitment to operational sustainability and a lower carbon footprint across the supply chain.
Key Findings & Metrics: Life Cycle Assessment (LCA) and Freight
The following data, derived from the Life Cycle Assessment (LCA) focusing on freight, demonstrates the immediate and quantifiable benefits of the packaging change.
Case Study: Composite Can to Rigid Plastic Container (Volume: 2 Million Units)
MetricBefore (Composite Can)After (PP Container)% ChangeInterpretationParts per Truck37,800120,960+320%Massive increase in loading density due to the nestable, non-round design.Trucks per Year5317−67.92%Significant reduction in logistics volume, cutting the need for more than two-thirds of annual truck trips.Gallons of Diesel per Year2,6091,569−39.86%Substantial fuel savings directly lowering operational costs and fossil fuel consumption.**Emissions per Year (MT CO₂) **27 MT CO₂16 MT CO₂−40.74%Direct reduction in transport-related carbon emissions due to fewer trucks on the road.
Environmental Impact: GHG Emissions Comparison
The analysis of total annual Greenhouse Gas (GHG) emissions across the entire product lifecycle shows a significant environmental win.
Composite Can (Before): 631 MT/yearPP Container (After): 533 MT/yearTotal Annual Reduction:98 MT/year
Impact Equivalencies (for Stakeholder Communication):
To put the 98 MT/year reduction into relatable terms for a broader audience, this is equivalent to:
21 passenger vehicles driven for one year.227 barrels of oil consumed.The carbon sequestration of 128 acres of U.S. forest for one year.
The successful conversion to the non-round, nestable, single-substrate PP container is a testament to our commitment to both operational excellence and environmental stewardship. By prioritizing smart, space-saving design, we have not only achieved a 320% improvement in freight loading but also directly translated that efficiency into tangible environmental benefits, significantly reducing our transportation carbon footprint and overall product emissions. This project is a model for how strategic design can deliver both cost savings and a lower-impact supply chain.
Lightweighting & Nestable Design Achieves Significant Environmental and Cost Savings
The findings of a case study demonstrating the significant environmental and economic benefits achieved by transitioning from an HDPE Blow-Molded Canister to a PP Thermoformed Container. The design focused on lightweighting and nestability for a product volume of 10 million units over a transportation distance of 200 miles.
Key Performance Improvements
The shift to the "Eco Canister" yielded substantial benefits across weight, efficiency, and sustainability:
Weight Reduction:34% package weight reduction.Logistics Improvement:7.4× more canisters per truck load was achieved due to the nestable design (Units per truck increased from 35,000 to 259,200).Cubic Efficiency: Increased cubic efficiency in transportation.Recyclability: Improvement in end-of-life recyclability.
Inbound Freight Environmental and Economic Impact
The dramatic increase in units per truck led to major reductions in freight requirements and associated costs:
MetricAnnual ReductionDetailTrucks Eliminated247 inbound trucksReduced road congestion and overall logistics footprint.Diesel Savings7,600 gallonsSignificant reduction in fossil fuel consumption.Cost Savings$20,520Calculated based on diesel at $2.70 per gallon.
Emissions Comparison and Total Reduction
The project resulted in a significant reduction in annual Greenhouse Gas (GHG) emissions across both manufacturing and freight.
ParameterCurrent (HDPE Blown Canister) (MT/year)Eco (PP Thermoformed Container) (MT/year)Reduction (MT/year)Package Manufacture1,134670-464Freight9012-78Total1,224682542
The Total GHG Reduction is 542 metric tons per year.
Equivalent Environmental Impact
The annual GHG savings are equivalent to a substantial positive environmental impact, illustrating the scale of the reduction:
117 passenger vehicles driven for one year.1,255 barrels of oil consumed.708 acres of forests storing carbon.
This information highlights the compelling business case for sustainable design changes, demonstrating how lightweighting and nestability can deliver simultaneous benefits in environmental performance, operational efficiency, and cost reduction.
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- Rigid Packaging Market Size, Trends, Sustainable Innovations and Key Player Insights
Nov 7, 2025 · globenewswire.com
According to data published by Towards Packaging, a sister firm of Precedence Research, the global rigid packaging market will rise from USD 550.49 billion in 2025 to USD 1,020.61 billion by 2034, growing at a CAGR of 7.1%. The surge is fueled by increasing use of sustainable and innovative packaging materials, particularly in food, healthcare, and cosmetics industries, led by key players such as Amcor, Berry Plastics, and Sealed Air Corporation. According to data published by Towards Packaging, a sister firm of Precedence Research, the global rigid packaging market will rise from USD 550.49 billion in 2025 to USD 1,020.61 billion by 2034, growing at a CAGR of 7.1%. The surge is fueled by increasing use of sustainable and innovative packaging materials, particularly in food, healthcare, and cosmetics industries, led by key players such as Amcor, Berry Plastics, and Sealed Air Corporation.
- RIGID PACKAGING MARKET SIZE, TRENDS, SUSTAINABLE INNOVATIONS AND KEY PLAYER INSIGHTS
Nov 7, 2025
ACCORDING TO DATA PUBLISHED BY TOWARDS PACKAGING, A SISTER FIRM OF PRECEDENCE RESEARCH, THE GLOBAL RIGID PACKAGING MARKET WILL RISE FROM USD 550.49 BILLION IN 2025 TO USD 1,020.61 BILLION BY 2034, GROWING AT A CAGR OF 7.1%. THE SURGE IS FUELED BY INCREASING USE OF SUSTAINABLE AND INNOVATIVE PACKAGING MATERIALS, PARTICULARLY IN FOOD, HEALTHCARE, AND COSMETICS INDUSTRIES, LED BY KEY PLAYERS SUCH AS AMCOR, BERRY PLASTICS, AND SEALED AIR CORPORATION. ACCORDING TO DATA PUBLISHED BY TOWARDS PACKAGING, A SISTER FIRM OF PRECEDENCE RESEARCH, THE GLOBAL RIGID PACKAGING MARKET WILL RISE FROM USD 550.49 BILLION IN 2025 TO USD 1,020.61 BILLION BY 2034, GROWING AT A CAGR OF 7.1%. THE SURGE IS FUELED BY INCREASING USE OF SUSTAINABLE AND INNOVATIVE PACKAGING MATERIALS, PARTICULARLY IN FOOD, HEALTHCARE, AND COSMETICS INDUSTRIES, LED BY KEY PLAYERS SUCH AS AMCOR, BERRY PLASTICS, AND SEALED AIR CORPORATION.
- SHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates PGRE, BERY, PBPB on Behalf of Shareholders
Sep 27, 2025
NEW YORK, Sept. 27, 2025 (GLOBE NEWSWIRE) -- Halper Sadeh LLC, an investor rights law firm, is investigating the following companies for potential violations of the federal securities laws and/or breaches of fiduciary duties to shareholders relating to:
Paramount Group, Inc. (NYSE: PGRE)’s sale to Rithm Capital Corp. for $6.60 per share. If you are a Paramount shareholder, click here to learn more about your rights and options.
Berry Global Group, Inc. (NYSE: BERY)’s sale to Amcor plc for 7.25 Amcor shares for each Berry share. Upon closing of the proposed transaction, Berry shareholders will own approximately 63% of the combined company. If you are a Berry shareholder, click here to learn more about your rights and options.
Potbelly Corporation (NASDAQ: PBPB)’ssale to RaceTrac, Inc. for $17.12 per share in cash. If you are a Potbelly shareholder, click here to learn more about your rights and options.
Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures and information concerning the proposed transaction, or other relief and benefits on behalf of shareholders. We would handle the action on a contingent fee basis, whereby you would not be responsible for out-of-pocket payment of our legal fees or expenses.
Shareholders are encouraged to contact the firm free of charge to discuss their legal rights and options. Please call Daniel Sadeh or Zachary Halper at (212) 763-0060 or email sadeh@halpersadeh.com or zhalper@halpersadeh.com.
Halper Sadeh LLC represents investors all over the world who have fallen victim to securities fraud and corporate misconduct. Our attorneys have been instrumental in implementing corporate reforms and recovering millions of dollars on behalf of defrauded investors.
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- SHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates PGRE, BERY, COMP, ETNB on Behalf of Shareholders
Sep 23, 2025
NEW YORK, Sept. 23, 2025 (GLOBE NEWSWIRE) -- Halper Sadeh LLC, an investor rights law firm, is investigating the following companies for potential violations of the federal securities laws and/or breaches of fiduciary duties to shareholders relating to:
Paramount Group, Inc. (NYSE: PGRE)’s sale to Rithm Capital Corp. for $6.60 per share. If you are a Paramount shareholder, click here to learn more about your rights and options.
Berry Global Group, Inc. (NYSE: BERY)’s sale to Amcor plc for 7.25 Amcor shares for each Berry share. Upon closing of the proposed transaction, Berry shareholders will own approximately 63% of the combined company. If you are a Berry shareholder, click here to learn more about your rights and options.
Compass, Inc. (NYSE: COMP)’s merger with and Anywhere Real Estate Inc. Upon completion of the proposed transaction, current Compass shareholders will own approximately 78% of the combined company. If you are a Compass shareholder, click here to learn more about your legal rights and options.
89bio, Inc. (NASDAQ: ETNB)’s sale to Roche. Under the terms of the proposed transaction, 89bio shareholders will receive $14.50 per share in cash at closing, plus a non-tradeable contingent value right to receive certain contingent payments of up to an aggregate of $6.00 per share in cash upon achievement of specified milestones. If you are an 89bio shareholder, click here to learn more about your legal rights and options.
Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures and information concerning the proposed transaction, or other relief and benefits on behalf of shareholders. We would handle the action on a contingent fee basis, whereby you would not be responsible for out-of-pocket payment of our legal fees or expenses.
Shareholders are encouraged to contact the firm free of charge to discuss their legal rights and options. Please call Daniel Sadeh or Zachary Halper at (212) 763-0060 or email sadeh@halpersadeh.com or zhalper@halpersadeh.com.
Halper Sadeh LLC represents investors all over the world who have fallen victim to securities fraud and corporate misconduct. Our attorneys have been instrumental in implementing corporate reforms and recovering millions of dollars on behalf of defrauded investors.
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- Amcor (AMCR) Q4 2025 Earnings Call Transcript
Aug 14, 2025
Image source: The Motley Fool.
DATE
Thursday, August 14, 2025 at 8:00 a.m. ET
CALL PARTICIPANTS
Chief Executive Officer — Peter Konieczny
Chief Financial Officer — Michael Casamento
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RISKS
The North American beverage business saw an earnings decline of approximately $20 million in fiscal Q4 2025 due to operating inefficiencies, including higher labor and freight costs. These elevated expenses are expected to persist into fiscal Q1 2026.
Combined volumes for the legacyAmcor(NYSE:AMCR) andBerry Global(NYSE:BERY) businesses were 1.7% lower compared to the prior year in fiscal Q4 2025.
Management confirmed that overall market volumes are expected to remain flat, with no significant recovery assumed in fiscal 2026 guidance, reflecting continued macroeconomic uncertainty and weak consumer sentiment.
Note: Amcor's fiscal year ends June 30.
TAKEAWAYS
Acquisition and integration-- Amcor completed the Berry Global acquisition, initiated integration measures, and is 100 days into combining operations, targeting €650 million in total synergies through fiscal 2028 and expecting $260 million in synergies in fiscal 2026.
Fiscal 2026 EPS guidance-- Adjusted earnings per share is guided to be $0.80 to $0.83 for fiscal 2026. This represents expected adjusted EPS growth of 12%-17% for fiscal 2026, driven primarily by synergy realization rather than volume recovery.
Free cash flow guidance-- Free cash flow is expected to double to $1.8 billion–$1.9 billion in fiscal 2026, after deducting approximately $220 million in integration and transaction costs.
Synergy realization-- Of the targeted $260 million in synergies for fiscal 2026, $240 million is cost-related, and $20 million is projected from financial items. G&A and procurement will drive the majority of near-term savings.
Q1 2026 EPS outlook-- Management projects adjusted EPS of $0.18–$0.20 for fiscal Q1 2026. This includes $35 million–$40 million in pre-tax synergies. This equates to approximately 8% growth from adjusted EPS of $0.162 per share in fiscal Q1 2025.
Legacy business volume trends-- Combined volume declined 1.7% from the previous year in fiscal Q4 2025, with North America driving sequential softness, and both flexibles and rigid packaging volumes down low-single digits year-over-year.
Segment results—Flexibles-- Net sales rose 18% at constant currency in fiscal Q4 2025, but volumes declined approximately 1.5% for the combined flexible packaging businesses. Growth in health care, protein, and liquids was offset by declines in categories such as snacks, confectionery, and unconverted film.
Segment results—Rigid packaging-- Net sales increased 121% at constant currency in fiscal Q4 2025, primarily due to the Berry Global acquisition. Overall segment volumes declined approximately 2% in fiscal Q4 2025. Adjusted EBIT rose 173% to $204 million in fiscal Q4 2025.
North American beverage segment-- Earnings fell $20 million year-over-year in the North American beverage segment in fiscal Q4 2025 due to cost overruns from operational disruptions, and the business has been re-segmented for direct management focus and improvement.
Leverage-- The net leverage ratio stands at 3.5x as of fiscal Q4 2025. There are expectations to reduce this to approximately 3.1x–3.2x within the next twelve months, excluding potential portfolio-related proceeds.
Portfolio review and optimization-- Management identified $2.5 billion in annual revenues from businesses “less aligned” with long-term strategy, including the $1.5 billion North American beverage unit. These figures represent combined annual sales as identified in the company’s portfolio review, and management will evaluate restructuring, divestiture, or partnership options.
CapEx guidance-- Capital expenditures are forecast at $850 million–$900 million in fiscal 2026. Depreciation is expected to be slightly above capex in fiscal 2026.
Procurement synergy durability-- Konieczny said, "the potential divestment of the North American Beverage business will not have a material impact on our ability to generate the procurement savings."
Q4 free cash flow-- Adjusted free cash flow for fiscal 2025 reached $926 million, in line with prior guidance and mainly due to strong fiscal Q4 cash generation.
End-market performance-- Focus categories such as health care, protein, and pet care delivered low to mid-single digit volume growth in fiscal Q4 2025, but broader categories including snacks, home, and personal care were weaker.
SUMMARY
Amcor(NYSE:AMCR) executives highlighted the immediate financial impact of the Berry Global acquisition, reporting considerable increases in net sales and adjusted EBIT across both main business segments in fiscal Q4 2025. Management detailed the combined portfolio’s strategic focus, noting that approximately 75% of total sales now derive from advanced, innovation-focused solutions. Additionally, 50% of core portfolio sales are concentrated in six “focus” categories expected to sustain higher growth and margin profiles. Initiatives are underway to divest or restructure approximately $2.5 billion in annual sales from operations deemed misaligned with Amcor’s strengthened core, including the restructured North American beverage division. Progress on some smaller assets is expected in fiscal 2026. Capital allocation priorities are centered on reaching a 2.5x–3x leverage target before pursuing buybacks or additional M&A. The call emphasized that earnings and cash flow growth for fiscal 2026 will be driven by internal cost actions and synergy capture, with management explicitly avoiding any forecast of a meaningful volume rebound due to persistent macro headwinds.
Konieczny said, "We will remain disciplined as we work through these processes, and there is no definite timeline for completion."
Adjusted EBIT margin in the flexibles segment was 14.1% in fiscal Q4 2025. The rigid packaging segment posted an adjusted EBIT margin of 10.9% in fiscal Q4 2025, reflecting changes from Berry Global’s inclusion.
Integration activities have included headcount reductions of over 200 positions, closure of one site, and approval for four more site closures within the first 100 days post-acquisition.
Michael Casamento clarified that the $133 million inventory step-up amortization related to purchase price accounting is complete and will not impact fiscal 2026 results.
Leadership confirmed, "Share is not the issue, and neither is destocking," attributing volume pressures solely to end-market consumption trends rather than competitive losses or customer inventory corrections.
Management stated the use of value-based pricing could be expanded across the Berry Global platform, leveraging Amcor’s historical success in this area to drive commercial synergies.
INDUSTRY GLOSSARY
TRIR (Total Recordable Incident Rate): A safety metric indicating the number of recordable workplace injuries per 200,000 labor hours, referenced as 0.27 for Amcor and 0.57 for Berry Global over specific periods.
Unconverted film: Packaging substrate sold without further modification, typically to converters or end users for additional processing.
Full Conference Call Transcript
Peter Konieczny: Thank you, Tracey, and thank you to everyone joining us today. I would like to start by highlighting that this has been a significant milestone quarter for Amcor. We completed the acquisition of Berry Global and are now one hundred days into combining two complementary businesses and transforming Amcor's ability to create value for our customers and shareholders. Our efforts are reflected in our expectation to deliver strong adjusted EPS growth of 12% to 17% in fiscal 2026 with free cash flow expected to double to €1.8 to €1.9 billion. Significant work was done ahead of close and integration efforts kicked off quickly on day one.
Feedback from customers has been positive and leadership teams are in place across the organization. We're executing against our synergy work plans, and we have undertaken the strategic portfolio review discussed in prior calls. In short, we are creating a stronger business that is well-positioned to deliver higher levels of consistent organic growth and long-term shareholder value.
Turning to slide three and safety. Similar to Amcor, safety has always been a core value for Berry. Both companies have a long history of excellent execution in providing a safe workplace, and this remains our number one priority. For fiscal 2025, Amcor's total recordable incident rate, TRIR, was 0.27, and 68% of our sites remained injury-free for the entire year. For the two months of May and June, Berry's TRIR was 0.57. Our commitment to providing and sustaining a safe working environment remains absolute. Slide four outlines our key messages for today, and these are aligned with our near-term priorities to deliver on the base, integrate and capture synergies, and optimize the portfolio.
First, in terms of results. With two months contribution from Berry, Q4 shows a step up to a high level of quarterly net sales, EBITDA, and EBIT for Amcor. Second, integration is progressing well. Synergy realization is tracking to plan, and we remain confident in delivering €650 million in total synergies through fiscal 2028, including $260 million in fiscal 2026. Third, we have now conducted a strategic review of our combined portfolio, primarily focused on defining our core portfolio. Going forward, Amcor is the global leader in consumer packaging and dispensing solutions for nutrition and health. As part of this review, we also identified businesses that are less aligned with our core portfolio.
And for these, we will explore alternatives to maximize value. Most importantly, our fiscal 2026 guidance reflects expectations for a year of strong earnings and cash flow growth, largely driven by self-help actions. Turning to Slide five and our fourth quarter results. While the acquisition of Berry drives strong increases across several financial metrics, the performance of both legacy businesses fell short of our expectations for two reasons.
First and consistent with broader market data, we experienced sequentially weaker volumes and for our consumers and customers in both our flexibles and rigid packaging solution segments through the quarter, particularly in North America. Overall volume performance across both legacy businesses was similar and on a combined basis were 1.7% lower than last year compared to our expectations for relatively flat. Second, in addition to lower volumes, earnings in the North American beverage business were negatively impacted by operating challenges at a few high-volume sites, which resulted in higher costs. Michael will speak more to the nature of the challenges, but let me just say here that we are comprehensively addressing the performance of this business.
On that point, we have taken advantage of the Amcor and Berry combined platform to divide the legacy Amcor rigid packaging business in its three parts. North American Beverage is now being run as a separate dedicated beverage business unit with new and focused management. We're addressing the operating challenges and we will be improving efficiency across the network. Amcor's legacy specialty containers business is now integrated with the legacy Berry business in North America, confirming an excellent product and technology fit. And in Latin America, the legacy rigid packaging and flexibles businesses are being combined to create scale and synergies in the region.
Before turning over to Michael to cover the results, I'd like to talk about the progress we've made over the last one hundred days, integrating the Berry and Amcor businesses and the work we have done to define our core portfolio. Beginning with slide six and integration. First and foremost, we have quickly engaged with customers around the world, highlighting the many benefits and new opportunities this combination creates. Feedback has been very positive, and already, we have seen additional business wins directly linked to combining the product portfolio, operations, and capabilities of our legacy businesses.
As an example, legacy Amcor is now providing membrane leading for coffee capsules supplied by legacy Berry, thereby offering a packaging solution rather than individual packaging components. This is a great early example of the opportunity discussed when we announced the merger. From a G&A cost synergy perspective, we have moved fast to begin eliminating duplication, lowering headcount by more than 200 until now. In terms of operations and footprint, we have been combining assets, identifying open capacity, repatriating outsourced film supply, and transferring production volumes across the network to improve efficiency and lower cost.
While still in the very early stages, we have closed one site, approved closure of four additional sites, and we're making good progress on further footprint actions. Looking at procurement, we have combined spend data within one platform to provide full transparency, access, and real-time insight across the function globally. And our teams have worked extensively with our direct and indirect suppliers in all regions, validating the synergy pipeline and delivering quick wins, will benefit earnings from the '26.
I'm happy with the progress we've made over the first one hundred days, bringing our two companies together and feel good about how we are executing against our proven integration playbook and setting the business up to drive strong earnings growth in fiscal 2026. We're confident in delivering EUR $260 million synergies in fiscal 2026 and a total of $650 million through fiscal 2028, and we are reaffirming both targets today.
Slide seven profiles Amcor's core combined portfolio. These are large stable end markets with attractive growth and margin profiles where we have leadership positions and room to grow. Approximately 75% of sales come from advanced solutions requiring innovation, and 50% of sales are generated from focus categories, which I come back to shortly. Slide eight shows our unique and expanded product portfolio with flexible and rigid packaging solutions to address the varied needs of our customers in these sizable end markets. This view also again highlights the complementary nature of this combination with both companies bringing different capabilities and product strength to create a stronger customer offering than either could do on a stand-alone basis.
We already have leading positions in these categories and plenty of room to grow given the fragmented nature of these markets. Slide nine further identifies six focus end market categories, which we have spoken about previously and collectively represent approximately $10 billion or 50% of core portfolio sales. Each has higher than average growth rates historically supported by long-term consumer trends and a requirement for complex packaging solutions. We are already winning in these attractive categories and are now better positioned with enhanced scale, capabilities, and solutions.
Turning to slide 10. As part of the portfolio review, we have also identified several businesses with combined annual sales of approximately $2.5 billion that are less aligned with our go-forward core portfolio for one or more reasons. They may have a different growth or margin profile, the business operates in an industry with relatively low barriers to entry, or where Amcor may not see a clear pathway to becoming a leading supplier at scale. For these businesses, we will explore alternatives to maximize value, which may include restructuring, partnership or JV ownership models, cash sales, or a combination thereof.
These actions will enhance focus on our core portfolio, result in higher levels of more consistent organic growth, and create value for shareholders. Our $1.5 billion North American Beverage business has been placed in this group. And over the next few quarters, we will execute against the work plan I mentioned earlier to strengthen the performance of this business before exploring alternatives. We will remain disciplined as we work through these processes, and there is no definite timeline for completion. However, we do expect to make progress in some of the smaller assets in fiscal 2026.
Looking forward, and as you will hear from Michael when he covers our fiscal 2026 guidance, Amcor is now a stronger business, and we are taking the right strategic actions to build on our foundation for creating long-term shareholder value. With that, I'll turn the call over to Michael.
Michael Casamento: Thanks, PK, and hello, everyone. Before getting into further detail of financial performance for Q4, a couple of things to note. Firstly, a reminder that the reported Q4 financial results include three months' contribution from the legacy Amcor business and two months contribution from the legacy Berry business. Second, as PK mentioned earlier, we moved swiftly to operate as a unified organization, making decisions and managing the business on a combined basis. This included optimizing our network by reallocating volumes to better balance supply and demand. And as a result, while both legacy businesses saw a similar overall volume performance in May and June, our volume commentary will be primarily focused on year-over-year performance on a combined basis.
Starting with the global flexible packaging solutions segment on slide 11, which includes Amcor's large-scale flexible packaging business and Berry's flexible business from the 05/01/2025, volumes for the combined businesses were down approximately 1.5%. By region, demand in North America was weaker than anticipated, with volumes down low single digit, primarily reflecting softer demand in unconverted film as well as in categories such as snacks and confectionery that can be a little more discretionary. Across all other regions, volumes were broadly in line with the prior year, with continued growth across Latin America and Asia, including in Brazil and China, offsetting modestly lower volumes in Europe.
From an end market perspective, we delivered another quarter of solid growth across several focus categories. Health care, protein, including meat and dairy, and liquids delivered low to mid single digit volume increases, supported in part by market share gains, and pet care was strong. These gains were more than offset by softer volumes in other categories, including unconverted film, snacks and confectionery, and home and personal care, which generally fall into our niche application and nutrition value categories. Overall, net sales increased by 18% on a constant currency basis, primarily driven by the acquisition of Berry, along with favorable price mix trends.
And adjusted EBIT of £450 million was up 11% on a constant currency basis, largely driven by approximately £50 million of acquired earnings net of divestments, with the remaining variance reflecting an unfavorable price mix partly offset by cost benefits. EBIT margin remained solid at 14.1%. Turning to Slide 12 and the Global Rigid Packaging Solutions segment, which includes Amcor's legacy rigid packaging business along with Berry's larger scale Consumer Packaging North America and Consumer Packaging International businesses from the 05/01/2025. Overall net sales increased by 121% on a constant currency basis, primarily driven by the acquisition of Berry.
Rigid Packaging Solutions saw similar combined volume trends to those I just mentioned for flexibles, down approximately 2% and down 1% excluding North America beverage.
As noted earlier, our performance in the quarter reflects ongoing soft consumer and customer demand primarily in The United States. Outside of The US, volumes in Europe were in line with the prior year and modestly higher in Latin America. By category, volumes grew low single digits across health care, and food service was in line with last year, offset by low single digit volume declines within beauty and wellness and specialty categories. Volumes across a broad range of food and beverage end markets were in line with last year.
Adjusted EBIT came in at $204 million, up 173% on a constant currency basis, and this was driven by approximately £150 million of acquired Berry Global earnings, net of divested earnings from the December 2024 Berry Cap joint venture sale, with the remaining variation largely reflecting lower North American beverage earnings. Turning to more details on North American beverage. As mentioned, volumes came in below our expectations entering the quarter, and in addition, we experienced operating challenges at high volume sites, which resulted in elevated costs through the quarter, including higher freight costs to service out of region supply, higher labor costs and lower fixed cost absorption.
As PK mentioned, we have developed a detailed plan to address current challenges and have already taken a number of actions. While we expect these measures will lead to better operational performance through fiscal '26, we anticipate the cost base for North America beverage will remain elevated in Q1. EBIT margin for Global Rigid Packaging Solutions was 10.9%, a new level of performance based on our acquisition of Berry.
Moving to cash and the balance sheet on Slide 13. Annual adjusted free cash flow of $926 million was within the guidance range provided in April, and as usual, cash generation and conversion was strongest in the fourth quarter of the year. CapEx for the year was $580 million up from last year, driven primarily by the addition of Berry for the two months. We anticipate capital spending in the range of $850 million to $900 million in fiscal '26, with associated depreciation expected to be slightly above CapEx levels. Turning to leverage.
Leverage was 3.5 times exiting the quarter, taking into account combined annual earnings, and we expect leverage to fall to approximately 3.1 to 3.2 times over the next twelve months. This excludes the benefit of any proceeds received from asset sales through fiscal '26, which would enable us to delever further.
Looking ahead to fiscal 2026 on slide 14, which, for the avoidance of doubt, does not reflect the completion of any portfolio optimization actions, We anticipate a year of strong EPS and cash flow growth, and we are confident we will realize significant synergies from the Berry acquisition. We are not factoring in a meaningful rebound in consumer demand, which we believe is a prudent approach given the current macroeconomic environment and ongoing uncertainty surrounding tariffs and their potential impact on customers and end consumers. As such, we currently anticipate broadly flat volumes for FY '26. We expect adjusted earnings per share of between $0.80 to $0.83 on a reported basis, representing strong year-over-year growth between 12-17%.
Our confidence in delivering 12% earnings growth in FY '26 is based on self-help in executing against our identified synergies of $260 million. In terms of phasing for the fiscal year, we expect approximately 42% to 45% of earnings will be delivered in the first half, with more weighting to the second half, particularly Q4, as our synergy run rate will build through the year. For Q1, we expect EPS to be between $0.18 and $0.20 per share, including approximately $35 million to $40 million of pre-tax synergies, which represents 8% growth compared with adjusted EPS of $0.162 per share last year.
And we expect earnings from the combined base businesses to be broadly in line with the prior year based on our expectation that the demand environment will remain challenged. From a cash flow standpoint, we expect free cash flow to double over fiscal '25 to be $1.8 billion to $1.9 billion in FY '26, which is after deducting approximately $220 million of integration and transaction costs. Net interest expense is expected to be in the range between $570 million and £600 million and we anticipate an effective tax rate in the range of 19% to 21%. So in summary for me, we're excited about the opportunities ahead and confident in our ability to execute with discipline.
So with that, I'll hand back to you, PK.
Peter Konieczny: Thank you, Michael. I want to leave you with a few closing thoughts prior to opening the call for questions. We have several levers under our control that will lead to strong earnings growth over the next several years. We remain confident in our ability to deliver $260 million in synergies this fiscal year and a cumulative total of $650 million by the '28, reflecting the strength of our integration strategy and execution. We're taking definite actions that will improve the financial performance of our North American Beverage business. And through portfolio optimization, we're focusing the business on attractive nutrition and health markets. Each and all of these contribute to creating a stronger business and long-term shareholder value.
Operator, we're ready for questions.
Operator: Thank you. We will now begin the question and answer. Your first question comes from Matthew Roberts with Raymond James. Please go ahead.
Matt Roberts: Hi, PK, Michael, Tracey, good morning or afternoon or evening, depending on where you are.
Peter Konieczny: Good morning.
Matt Roberts: On the potential beverage strategic considerations, now that's been officially announced, while the timing is uncertain, how could that impact the procurement synergies given that complementary resin buying was a portion of the buying power there? And in the event there is an action taken, should we think of procurement savings as a similar dollar amount over the three years or maybe as a percent of revenue? Any considerations would be helpful there. Thank you.
Peter Konieczny: Well, thanks, Matthew. I think the potential divestment of the North American Beverage business will not have a material impact on our ability to generate the procurement savings. We spoke on several calls before that both legacy businesses have been strong buyers of different resin categories. Berry actually buys little PET material, whereas this is the major material for the North American beverage business. And we should also keep in mind that, you know, some of the resin that we convert in the North American beverage business is actually tolled. So on the back of that, we believe that the procurement savings that we're estimating, which are making up about 50% of the committed synergies are not materially impacted.
So we're still in dollar terms. We're still expecting that $650 million.
Operator: Your next question comes from the line of George Staphos with Bank of America. Please go ahead.
George Staphos: Hi, everyone. Thanks for all the details. PK, my question is on top line trends. Can you talk a bit about why from what your customers are saying you're still seeing such weakness in what should be stable to growing markets, especially markets that you think you're now gaining share in. So why are we not seeing better volume trends there? And for that matter, volume trends out of you, given that you're gaining share. And the related question, way back when Amcor was one of the, I think, first company that did value-based pricing across its portfolio to good effect, what opportunities do you see here about implementing the same thing across the Berry platform? Thank you.
Peter Konieczny: Thanks, George. Two questions there. Let me just make a quick note here so that I don't forget. So first off, on the volume performance, maybe that gives me an opportunity to step back and shed a little more light, and then summarize the key messages again. Fourth quarter came in a little softer than what we expected and also sequentially softer. That was essentially the miss against our expectations. We had expected the same volume performance in Q4 that we saw in Q3. When you took a look at the major underlying trends, it's really the weakness in North America that drove it.
When we look outside of North America, we saw volume performance, which was broadly flat versus prior year. We saw some growth in the emerging markets between LatAm and Asia Pacific that was offset by just a tad of a weakness in Europe. So North America, the major source of weakness here. Both businesses have seen similar trends. So exposure, they're pretty much the same in North America to a weaker environment, and that was driven by overall consumer sentiment in a in a macroeconomic environment that drives just different buying behaviors and has sees consumers that are more value seeking.
And that's what we're seeing from our from our customers, who are pretty much broadly aligned with the volume trends that we're also see seeing. So a lot of consistency, I think, in the in the customer comments, particularly in The US. A final comment maybe, I may, a little more of a softening on the Berry side than the legacy Amcor side. But don't forget, while the trends are the same, that Berry has a higher exposure to North America and also is exposed a little more to some exposure to, I would call them, industrial end market segments like unconverted film that have seen a bit more of an impact.
Peter Konieczny: Excuse me. Excuse me. I just want to add here, Michael is saying that was the second part of the question was absolutely right, the value-based pricing. Just a quick comment on that. Do we see opportunities on for value-based pricing going forward? Absolutely. In the context of our commercial synergy work streams, we're looking at deploying best practices from both sides of the legacy businesses. And we believe that the value-based pricing that Amcor has worked on for many years in the past is an opportunity for us to look carefully at pricing across the Berry portfolio, and we're going to make use of that. Thank you.
Operator: Your next question comes from the line of Anthony Pettinari with Citi. Please go ahead.
Anthony Pettinari: Good morning. I'm wondering if you could give any more detail on the $1 billion under review that isn't the North American Bev business, understanding those are smaller businesses, from a geographic standpoint or product standpoint or just sort of strategically, what characteristics do they have?
Peter Konieczny: Yeah. Thanks, Anthony. Happy to do that. First off, we're talking about 10 businesses that make up the billion dollars. The businesses are pretty much distributed between the two legacy businesses, so you will find some of them in the legacy Amcor portfolio. You will find some of them on the legacy Berry portfolio. In terms of the criteria that we have applied, let me just help you with that a bit. And I spoke about that, and some of those are summarized, I think, on slide 10.
We said on a high level, you know, in terms of headlines, you know, do our businesses that we now have on a combined basis, do they have an attractive growth and margin portfolio? And that is obviously a consideration over the long term. And how do we like the industry structure? That would include questions like, are we exposed to large markets? Do we have room to grow? What are the barriers to entry? And there's a couple of other considerations. And then the third one was scale and leadership where we said, well, do we have significant share in that in that category, or are we large in that category as an as a combined Amcor?
Or another one would be, do we have technology that positions us well in those categories? Where businesses failed one or a combination of these criteria, we put them aside and that makes now up for the 10 plus 10 businesses plus North American beverage. The just maybe one more comment that gives you a bit of a flavor of what we're talking about. These are businesses also where you could say, you know, they have an exposure to a more cyclical end market exposure. That could be one criteria.
Or if it is consumer packaging related and therefore a little more stable, think about a single market where we have an activity, but we're participating more than winning because we're not really positioned that well in that market. And where we take a decision where we say, look, in order for us to get to a number one or number two position in that market, we would have to deploy capital, which at this point in time, we have other sources or we have other opportunities for which we would prefer. So that's how we got to the portfolio.
Operator: Your next question comes from the line of John Purtell with Macquarie. Please go ahead.
John Purtell: Good day, Peter and Michael. Hope you're well. Look, just further to an earlier question, just around any just to clarify any market share shifts to call out as well as any just in terms of, I suppose, talking to the volume performance, any market share shifts to call out? And has there been any destocking by your customers that you've seen? Obviously, that has been something that we've seen in the past.
Peter Konieczny: Yeah. Thanks, John. I think it's it's a I wanna keep it really simple here and try to help you understand market share shifts or share gains or losses, particularly given the volume performance, is not the driver. We've we are we're laser focused on that, and we're really trying to understand well where the performance comes from. It really comes down to consumer and customer demand. Share is not the issue, and neither is destocking. We have a couple of quarters ago seen a very structured and, you know, broad approach of our customer base to reduce inventory levels to more efficient lower levels.
We have literally gone through that even in the health care business, which was lagging this whole trend. We have significantly improved. I couldn't tie any of that back to destocking. Where we do see destocking maybe on single customers, I would call that more either seasonally driven stock movements, which we have seen beforehand too, or maybe they're tactical inventory movements, but nothing that we've seen beforehand.
Operator: Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please go ahead.
Arun Viswanathan: Yes, thanks for taking my question. Hope you guys are well. Yes, congrats on integration there getting started. Just looking at that 260 number, it looks like that's about $0.10 of accretion next year. Maybe you can just put that in context. So does that kind of accelerate through the year as you said, probably will be back half loaded. You already have cut some head achieved some headcount. So I guess, is that kind of be the main driver?
Maybe you can just discuss some of the logistics actions and some of the other integration efforts you are going to undertake to achieve that $0.10 And then I guess how does that or that $260 million and how does that proceed from there? Do you expect to be maybe at 80% in year two or what should we what should we think how the synergies kinda come in? Thanks.
Michael Casamento: Yeah. Thanks, Arun. It's Michael here. I can take that one for you. So, yep, you're quite right. We called out $260 million in our guidance as synergies, and that's right in line with what we the timing we've we've pitched from the start. So we're reaffirming that and feel really confident around that. That's about 40% of the $650 million, and, you know, we'd expect it to '27, just to answer that question, another 40% with 20% coming in year three.
And, you know, that split of synergies in FY '26, $240 million of it is cost more cost related, and there's about $20 million that we see in financial synergies in the interest and tax line there for you. The other point to note is that the $260 million obviously is pretax. So from an EPS standpoint, it's about 9¢. So that's about the 12%, you know, baseline growth that we talked to on the you know, to get us to that bottom end of the range of 80¢. So, again, we feel really confident in that the ability to deliver that in the self-help there.
And then if I just touch on where we think it's coming from, you're you're right. We've had a we've had a good start. You know, we've we've taken out around 200 heads. We've already identified five sites for closure, and as PK mentioned, we've made good progress on procurement. So, typically, though, what you see first is the general and admin costs tend to come in first. You know, we'll get some procurement this year as well, and to a lesser extent, the footprint and growth synergies. And, you know, we're we're making really good progress on that.
So in terms of Q1, you know, I called out, we think that the phasing there is gonna be around $35 to $40 million in Q1. That's around 15% of the total for the year. Probably, as you work your way through the half, it will be more around kind of 35%. And so, you know, you'll get which is about $90 million, and then you'll get the balance in the back half of the year, so as we as we exit strongly in Q4.
And look, of the $240 million cost that I called out, you know, I'd I'd say, you know, that's gonna be largely G&A and procurement with a little bit of a little bit of operational improvement and a smaller growth synergy included in that.
Operator: Your next question comes from the line of Ramon Lazar with Jefferies. Please go ahead.
Ramon Lazar: Good morning, Phil sorry, good morning, PK and Michael. A quick one from If you could give us a little bit more color on the operational issues within that Rigid Beverages business and perhaps maybe just quantify that impact?
Peter Konieczny: Yeah. Ramon, I'll be happy to do that. Let me start and then quantification, I'll I'll hand it off to Michael. Look. I'm gonna say it very loud and clear. We're not happy with the performance of the North American beverage business in the fourth quarter. If I if I'd summarize very simply what actually has happened, The business was very focused, rightly so, on taking cost out, particularly in the first half of the year in order to support earnings in an environment of lower volumes. And then as they then were approaching what we were approaching the fourth quarter, which in that business seasonally is the highest volume quarter, we ran into service issues for our customers.
And that had to do with the out of region supplies, drove higher waste levels, drove higher labor cost in the business. And that is and that is what happened. We're not proud of it. Flexing our capacities with volumes is something that we're very, very familiar with. In that case, we have, we have obviously done too much of that, but we're gonna get that fixed. Now in terms of quantification, Michael, do you wanna take that?
Michael Casamento: Yeah. No. Look. I think, you know, just to put a bit of color around that, I mean, you can see from the results that year on year, if you exclude the Berry Cap impact because we know that was in the prior year, that was about $7 million. You know, if I take that out, the business was down in North America beverage primarily around $20 million. So, you know, it was a reasonable, decline versus the prior year. And to PK's point, you know, we're not happy with that. It was really a combination of, you know, the labor. We'd started to build labor.
And, you know, as we said in there's a couple of big plants where the volumes did increase, but we just we just couldn't operationally manage those through. So we incurred some higher labor, less fixed cost fixed cost absorption, and, you know, we had some out of region freight to be able to service customers. So that really drove the decline for the higher cost base versus the prior year. We're on it. PK has touched on that. We're still expecting some elevated cost in Q1, and we'll drive improvement from there.
Operator: Your next question comes from the line of Michael Roxland with Truist Securities. Please go ahead.
Michael Roxland: Yes. Thank you, PK, Michael, Tracey, Damon and Gusman for taking the question. And congrats on closing the deal on all the progress. You're guiding to adjusted EPS of approximately, I guess, $0.80 to $0.83 What type of volume growth is embedded in that forecast? And relatedly, you also mentioned you expected an elevated cost base for North America Beverage to impact negatively impact 1Q. How should we think about the impact that North America and Ben have had on that EPS forecast through the balance of fiscal 2026? Thank you.
Michael Casamento: Yes. Thanks, Mike. I can start there. Perhaps I'll take that for you. So look, we as I said in my remarks, from a demand environment, we're not anticipating any real, you know, improvement in the demand environment. We're still expecting volumes to be pretty subdued. So, you know, within we're giving you a guidance range of 80 to 83. I think, you know, probably the underlying principle is that volumes are gonna be flat, so you're not gonna see much revenue growth on that front. And, obviously, you know, if we see a better outcome than that, then that's one of those areas that helps us get to the top end of the range.
If it was worse than that, you know, we obviously can take some cost out and help manage that. So that's a way to offset that. I think as I as I called out, I think from a beverage North America beverage standpoint, we will still see some elevated costs in the first quarter. You know, that said, the underlying business again in Q1, and I touched on that, you know, we are expecting volumes to be perhaps similar to Q4, maybe slightly better, but not nothing materially different. So we, you know, we will manage the cost base, you know, with a strong focus in Q1, but we also get the synergy delivery.
So, you know, we are expecting that $35 million to $40 million in synergies come through to about 8% EPS growth.
Operator: Your next question comes from the line of Keith Chau with MST Financial. Please go ahead.
Keith Chau: Hi, PK, Michael and team. A question relating to the North American beverages business again. So sorry for laboring the point. But quite clearly, it's been identified as an asset for sale, but also quite clearly, it's underperforming at the moment. So I just want to try and understand the process in a bit more detail. I mean, obviously, you'll be looking to divest or do something with that business when the earnings power is right. But what gives you a degree of confidence that, you know, there is a lot of sight to improving business performance?
And, you know, clearly, you've mentioned a few aspects already, but, you know, if you think about the fail-safe measures, the day to days, you know, what are the parameters that you're looking at before divestment, please?
Peter Konieczny: Yeah, Keith. It's a it's a good question. And I will start out by saying, you know, these two things are actually, you should try to keep them apart. The operating performance of the business in a short period of time should not drive your strategic assessment of the portfolio. And so these are two things. They're difficult to keep apart when you have the situation that we just had, Right? You make a strategic assessment and you see an operating performance of the business, which is not great. And, but, you know, the theory what the science would say, you should keep that apart.
Now we the way that we look at this in the current situation is we're gonna we're gonna focus, and I said that in my prepared comments, we're gonna focus on stabilizing the business, and that will probably take a couple of quarters for us to get there. And I think that's the right thing to do. We need to stabilize this business before we can realistically think about bringing this business to the market. And it will not take forever, but it will take a bit of time. Once that is done, we will go forward and we will very quickly assess the alternatives that we have for this business.
And this is something where generally for all of the businesses, we will have to look at a couple of stakeholders that we need to keep in mind. First and foremost, I will say it's actually the customer. We will do nothing here across all of those 10 plus one businesses, 10 plus the North American Beverage business. We'll do that together with our customers because the customers will have to be supportive of everything that we do. And then obviously, our owners and the shareholders and that will be a combination of a value consideration and a speed consideration. Because once you identify businesses that are non-core, you actually want to make progress against those.
So we have that also on the agenda. There's no question. And I think that covers it from my side. Thank you.
Operator: Your next question comes from the line of Nathan Reilly with UBS. Please go ahead.
Nathan Reilly: Thanks. Pete, just a quick, I'm just curious, how are you thinking about the timing of potential growth investment or even share buybacks? Just noting, obviously, you're targeting a reduction in your leverage. There's also potential there for divestments. I'm just curious to get an understanding that you're thinking about maybe target leverage in terms of those opportunities.
Michael Casamento: Yes. I can take that one, Nathan, if you like. It's Michael here. Yeah. Thanks for the question. Yeah. Look. I mean, we're committed to the investment grade credit rating, and, you know, we've said that as part of this transaction all the way along. You know, for us, that means, you know, a leverage range of two and a half to three times. And, you know, as we talked about today, we're outside that range, you know, which is in line with our expectations at this point in time. So, you know, the first thing we need to do is, you know, deliver and get that get that leverage back into that range. So that will be the focus.
And, obviously, the strong cash flow that we're generating in FY 2026 contributes to that, and you see a really good delevering down, you know, from the 3.5 times we're at today, you know, down more into that 3.1, 3.2 times. And as I said in my remarks, you know, that doesn't include any proceeds from portfolio optimization. So if we were to get some proceeds there, we would first and foremost put that to delevering further, so paying down debt. And then once we're comfortably in that two and a half to three times range, we'll we'll then start to think more about the capital allocation, particularly around share buybacks.
But, you know, you know as well as others that industry, you know, at times comes up with there will be some M&A opportunities out there. You know, that still remains on the agenda, obviously, because, you know, typically, you know, we've obviously got to get through a fair part of the integration to start with. But as we work our way through that, you know, they're they're typically bolt-on and small types of acquisitions. So, we wouldn't discount those. But clearly, first and foremost, we're focused on delivering and getting the balance sheet back into that 2.5 to three times range.
Operator: Your next question comes from the line of Brook Campbell-Crawford with Biren, Joey. Please go ahead.
Brook Campbell-Crawford: Yes, thanks for taking my question. Just one on Berry and accretion. I guess back in the last result call, we talked about being $0.01 per share accretive in the June. So just how should we think about that for FY 2026, I guess, accretion from the deal before synergies? And can you comment on the magnitude of the EBIT performance, I guess, probably decline in Berry in May and June 2025 versus the PCP banks?
Michael Casamento: Yes. I can start on that one, Brook. Thanks. Yes. Look, the Berry combination did have some contribution to our EPS in the quarter. It was, call it, you know, half to 1¢, which is what we what we kind of referred to back in April. And it's always gonna be a factor of the income versus the share count and how that flows through. You know, what I can tell you is the 71 the 71.2¢ we reported, you know, that's that's pretty If you look at it on a combined basis, it's a pretty similar number. So you only you know, that's what that's where we start from.
And as we look forward, we feel pretty good about the 12%, you know, base 12 to 17% EPS growth that we're guiding to next year. A significant part of that is the accretion from the synergy delivery. So, you know, we feel pretty good about where that's coming from and the contribution there. In terms of the EBIT performance of Berry or the performance generally, it was pretty similar to what Amcor saw. So you heard, PK touch on the volume, and notwithstanding, Berry doesn't have an exposure to the North American beverage business or, doesn't. But outside of that, you know, volumes were pretty similar to Amcor, down slightly, normally in North America.
You know, at the net income line, we are off about four or 5%, and that was you know, I think that's that's a good proxy for where Berry was at.
Operator: Your next question comes from the line of Jakob Cakarnis with Jarden Australia. Go ahead.
Jakob Cakarnis: Hi, Peter. Hi, Michael. I just wanted to go to Slide 22, if I could, please. Michael, you might be able to help with this one. There's an adjustment to the statutory to adjusted EBIT. It says it's an inventory step up amortization. It's on note two. Its value is $133 million. Could you just step me through what that is, please? Obviously, there's only a modest period for that included in fiscal 2025. Can you just get me through how that might look also in '26, please?
Michael Casamento: Yeah. Look. That's just a said and done purchase price accounting adjustment. That's all there is. It's for two months. It's all done. There is there's nothing further to come in '26. I guess the point I would say as well is just remember that the opening balance sheet and the numbers that we put here, I mean, it's a the PPA is a which price accounting is an estimate. You know, it's based on the information we have at time, and, obviously, that, you know, that does get updated, or we can update that in the first twelve months.
So, you know, I think all that does is brings the that particular entry you're referring to really just brings the inventory in line with market value, And that's a pretty standard adjustment that you're seeing, particularly when you've got a deal of this size.
Operator: And that concludes our question and answer session. And I will now turn the conference back over to Peter for closing comments.
Peter Konieczny: Well, thank you, operator, and thank you, everybody, for joining us. I wanna keep it maybe at the end really simple here. We're pretty confident. I think we're moving pretty fast. We should not forget that, you know, we closed this acquisition in five months. We're a hundred days into it now. Feel really good about the synergies. We've got some challenges that we're not proud of in North American Beverage, but we're responding to it. And we're pretty confident about 12% of growth in fiscal 2026. So look forward to the opportunity sitting down with you or many of you over the course of the quarter. Thank you very much. And that concludes the call.
Operator: Ladies and gentlemen, thank you for your participation in today's call, and you may now disconnect.
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- Amcor: Berry Global Acquisition To More Than Double Cash Flows, Stock Near All-Time Lows
Jun 21, 2025 · seekingalpha.com
Amcor is a global packaging leader trading below pre-pandemic levels, offering a strong dividend and attractive risk-reward after acquiring Berry Global. The Berry Global acquisition brings significant synergy potential, expected to drive 12% EPS accretion by FY26 and 35%+ by FY28, doubling cash flow. As a Dividend Aristocrat, Amcor's dividend yield is historically high at 5.6%, and the Berry deal should support its sustainability while allowing for future buybacks and balance sheet improvement.
- Q3 2025 Amcor PLC Earnings Call
May 1, 2025
Participants
Tracey Whitehead; Head of Investor Relations; Amcor PLC
Peter Konieczny; Chief Executive Officer; Amcor PLC
Michael Casamento; Executive Vice President - Finance, Chief Financial Officer; Amcor PLC
Ghansham Panjabi; Senior Research Analyst; Robert W. Baird & Co Inc
Anthony Pettinari; Analyst; Citi
Daniel Kang; Analyst; CLSA
Matt Roberts; Analyst; Raymond James
Jaobk Cakarnis; Analyst; Jarden Australia
George Staphos; Analyst; BofA Global Research
Brook Campbell-Crawford; Analyst; Barrenjoey
John Purtell; Analyst; Macquarie Group
Mike Roxland; Analyst; Truist Securities
Keith Chau; Analyst; MST Financial
Nathan Reilly; Analyst; UBS
Sam Seow; Analyst; Citi
Cameron McDonald; Analyst; E&P
Arun Viswanathan; Analyst; RBC Capital Markets
Presentation
Operator
Well, good day, everyone, and welcome to Amcor's Fiscal 2025 third-quarter results conference. This conference is being recorded.
At this time, I would like to hand things over to Ms. Tracey Whitehead, Head of Investor Relations. Please go ahead, ma'am.
Tracey Whitehead
Thank you, operator, and thank you, everyone, for joining Amcor's fiscal '25 third-quarter earnings call. Joining the call today is Peter Konieczny, Chief Executive Officer; and Michael Casamento, Chief Financial Officer.
Before I hand over, let me note a few items. On our website, amcor.com, under the Investors section, you'll find today's press release and presentation, which we'll discuss on the call. Please be aware that we'll also discuss non-GAAP financial measures and related reconciliations can be found in that press release and the presentation.
Remarks will also include forward-looking statements that are based on management's current views an assumptions. The second slide in today's presentation lists several factors that could cause future results to be different than current estimates. Reference can be made to Amcor's SEC filings, including our statement on Form 10-K and 10-Q for further details.
Please note that during the question-and-answer session, we request that you limit yourself to a single question and then rejoin the queue if you have any additional questions or follow-up.
With that, over to you, PK.
Peter Konieczny
Thank you, Tracey, and thank you to all who have joined us for today's call. Today is a defining day for Amcor as we successfully closed our transformational combination with Berry Global earlier than we anticipated in a record time. Early close means we are now positioned to accelerate earnings growth through the delivery of significant synergies that are identified and within our control.
I want to thank the Amcor and Berry teams for their hard work and dedication over the past months. Together, they have navigated challenges and complexity to accomplish a truly remarkable outcome that positions Amcor for a faster start and synergy delivery and growth.
As always, on slide 3, we begin with safety, our number one priority. This commitment remains unchanged as we welcome 30,000 new colleagues to Amcor. Our total recordable incident rate, TRIR, fiscal year to date was 0.027, and 69% of our sites have remained injury-free for over a year. Our focus on workforce safety and the well-being of our people is resolute and we continue to achieve industry-leading performance.
Our key messages for today are on slide 4. First, we continue to deliver EPS growth in Q3, reflecting disciplined execution and resilience in a demand environment that became more variable and uncertain as the quarter progressed, particularly for our North American business.
Second, as I mentioned, the Berry combination closed ahead of schedule. It took less than six months from announcement to close, during which time we secured shareholder approvals, completed the necessary refinancing including a multi-billion dollar debt offering and obtained unconditional approval from regulators in all required jurisdictions. As a result, our earnings and cash flow guidance has also been updated to reflect expectations for the combined company in the fourth quarter.
And third, our early close also means we will enter fiscal '26 in an even better position. With confidence, the synergy run rate will start strong and built quickly through the year. The source of synergies has been identified, our execution plans are clearly set out and within our control, and synergies alone give us clear visibility to significant total earnings accretion of approximately 12%.
Turning to slide 5. As we begin integration, our focus is clear. deliver identified synergies and grow faster. Experience with previous acquisition tells us that having clear accountability and alignment from day one is critical to our success. This combination brought together two extraordinary pools of talent, and we are fortunate to have a team of leaders in place with significant functional, operational, and industry expertise.
Our business is organized around two segments. Amcor's global flexibles business is being led by Fred Stephan, who has many years of experience with a number being large-scale flexible packaging businesses. And Jean-Marc Galvez, former President of Berry's Consumer Packaging International division, is leading Amcor's Global Containers and Closures business. Fred and Jean-Marc are well supported by world-class functional leaders and dedicated integration teams, with separate work streams focusing on capturing costs, financial, and growth synergies.
Slide 6 provides a recap of the highly compelling rationale for this combination and the alignment with our strategy to become the packaging partner of choice for customers, while also delivering stronger, more consistent, and sustainable organic growth and further improving margins.
There are a number of growth unlocks now available. The combined company is a better business, with a complementary and broader portfolio of primary packaging solutions at scale across consumer goods and healthcare end markets.
In the context of a stronger, larger-scale company, we are now uniquely positioned to further refine our portfolio mix to focus even more on attractive, higher-value, faster-growing end markets. With further pruning, we will increase average growth rates, margins, and cash generation across the remaining portfolio, and we continue to advance our work on this review.
In addition, Amcor has exceptional and now enhanced capabilities in material science and innovation, providing opportunities to drive growth by effectively and efficiently leveraging our combined resources. With more than 1,500 R&D professionals and annual R&D investment of approximately $180 million, we can now optimize and redirect R&D spend, providing capacity to focus on solving the most complex functionality and sustainability challenges faced for our customers and consumers. Executing against these growth opportunities and delivering the significant identified synergies is largely within our control and will drive compelling near- and long-term value for shareholders.
Turning to synergies on slide 7. The work our integration teams have already completed gives us confidence in delivering $650 million of synergies, which will result in significant earnings growth over the next three years. Approximately 40% of total synergies, or $260 million, is expected to end at fiscal '26 earnings. A further $260 million of synergies will benefit earnings in fiscal '27, with a balance in fiscal '28, leading to total EPS accretion in excess of 35% over the three-year period.
In addition, we expect one-time cash benefits of $280 million from working capital improvements, which will fund costs to achieve.
Finally, on slide 8 and the compelling sustainable financial value we're creating. Including synergies, annual cash flow available to reinvest will exceed $3 billion each year by fiscal '28 and will enable us to maintain a strong investment-grade balance sheet, deploy additional cash to support higher levels of organic volume-driven growth, finance further M&A, and continue funding a compelling and growing dividend for Amcor's current annualized base of $51 per share.
With stronger cash generation and greater opportunities to invest, we also expect to increase long-term EPS growth and raise the outcomes under our shareholder value creation model to a new and higher level. Simply put, this combination is a game changer for Amcor's financial profile and provides self-help earnings growth opportunities at a time of increasing uncertainty in the macroenvironment.
Moving to slide 9 for a summary of our third-quarter financial results. Overall volumes were in line with last year with modest share gains offset by weaker consumer and customer demand. As Michael will cover in more detail, there were a number of puts and takes across our regions. Volume growth in the low- to mid-single-digit range in each of Europe, Asia Pacific, and Latin America was offset by weaker-than-anticipated consumer demand in our North American businesses, including North America beverage.
Notwithstanding the increasingly dynamic consumer environment, Q3 saw continued growth across key financial metrics with net sales of $3.3 billion and EBIT of $384 million, both marginally higher than last year. We also delivered another quarter of adjusted EPS growth, up 5% on a comparable basis, benefiting from a continued focus on cost as well as improving healthcare volumes which benefited price mix trends as anticipated.
I'll now turn the call over to Michael to cover the third-quarter result and our updated outlook in more detail.
Story Continues
Michael Casamento
Thanks, PK, and hello, everyone. Beginning with the Flexibles segment on slide 10. Volumes for the quarter were up 1% on last year. Modest share gains in several important categories, including healthcare and protein, were partly offset by weaker consumer demand, primarily in North America. Overall demand remained solid through the quarter in Europe, Asia, and Latin America, with each region achieving low- to mid-single-digit volume growth.
China and India continued to deliver mid- to high single-digit growth and volumes were up across most countries in Latin America. As PK mentioned earlier, the demand environment in North America became more variable and uncertain as the quarter progressed. North America volumes were down low single digits, which was lower than we anticipated heading into the third quarter, including in snack, confectionery and home and personal care categories.
From an end market perspective, we continue to see good growth in a number of our priority markets. Petcare, premium coffee, and ready meals continue to grow strongly. And volumes in meat, dairy, and liquids were uploaded at mid-single digits, benefiting in part from modest share gains.
Healthcare volumes continuing to improve sequentially. Medical volumes were up in the high single digits. And as expected, demand for pharmaceutical packaging improved significantly as destocking is now essentially behind us. Strength in these categories more than offset volume declines in end markets such as snacks and confectionary and home and personal care, which were both down low single digits.
Improved healthcare volumes support a return to favorable price mix, and overall net sales were up 1% on a comparable constant currency basis. Adjusted EBIT of $358 million grew 2% on a comparable constant currency basis, benefiting from the higher volumes and continued strong cost performance. And EBIT margin for the quarter remained strong at 13.7%, broadly in line with last year.
Turning to Rigid Packaging on slide 11. The Rigid business had a more challenging quarter as solid growth in Latin America and specialty containers was more than offset by weaker-than-anticipated consumer and customer demand in North American beverage.
Net sales were approximately 3% lower than last year, reflecting a 2% decline in overall volumes and an unfavorable impact from price mix of approximately 1%. Entering the quarter, we anticipate a continued soft demand in North American beverage. However, consumer and customer demand across our key categories weakened further, resulting in a high-single-digit volume decline.
Latin American volumes were up mid-single digits, and growth was strong in several countries and regions, including Mexico and Central America. And volumes were higher in the specialty containers business with growth in healthcare end markets.
From an earnings perspective, adjusted EBIT of $55 million for the quarter no longer includes any contribution from the Bericap joint venture, which was divested in December 2024. Bericap benefited Rigid Packaging segment earnings by approximately $5 million in the third quarter last year.
On a comparable basis, EBIT was unfavorably impacted by lower volumes and price/mix headwinds. This was partly offset by favorable cost performance, net of sequentially higher labor costs in the North American beverage business. And it's typical for manning capacity to increase in the March quarter as the business approaches the seasonally strongest June quarter, and this had an unfavorable impact on earnings for the quarter given the lower-than-anticipated volumes.
Moving to cash flow on the balance sheet on slide 12. On a year-to-date basis, the business had a net cash outflow of $17 million, which is lower than we expected and compares with a cash inflow of $115 million last year. The key driver of this underperformance is higher inventories as a result of weaker sales volumes in the March quarter.
In response, we have significantly increased our team's focus on working capital performance and we are prioritizing inventory reductions to a level that is more aligned with the expected demand. Leverage of 3.5 times was higher than we were anticipating due to stronger euro spot rates towards the end of the quarter, which negatively impacted leverage by 0.1 times as well as higher quarter-end net debt.
We expect to exit fiscal '25 with leverage at approximately 3.4 times, inclusive of acquisition impacts. And we remain confident in bringing leverage down to approximately 3 times by the end of fiscal 2026. This trajectory is aligned with expectations we set out when the merger was announced in November last year.
Our teams did an excellent job completing the required refinancing of Berry Global debt prior to transaction close and ahead of this current period of increased volatility in financial markets.
Finally, the company has returned $550 million in cash to shareholders through a growing dividend, and the Board of Directors today declared the March quarter dividend of $0.1275 per share, which is 2% higher than the same quarter last year.
This brings me to the outlook on slide 13. As we look ahead into the fourth quarter, we are not anticipating any improvement in the overall demand environment, and we believe this is a particularly prudent approach given current macroeconomic conditions and uncertainty around tariff impacts on consumers and customers. As a result, we expect overall Q4 volume growth to remain muted and aligned with the March quarter. That said, with the successful early close of the merger, we have taken into account two months of Berry ownership and we continue to expect earnings for fiscal 2025 within our original guidance range.
Heading into the final quarter of the year, we are narrowing our outlook range for adjusted EPS to $0.72 to $0.74 per share on a reported basis. This takes into account two months of earnings from the legacy Berry business as well as additional shares issued upon close, which results in a net accretion of up to $0.01 per share.
In terms of free cash flow, we expect a range of $900 million to $1 billion for the year, which also includes the contribution from the legacy Berry business. Importantly, as PK mentioned earlier, before we even consider assumptions around organic performance for fiscal 2026, we have clear visibility to significant EPS growth of approximately 12% through delivery of $260 million of synergies alone which is not dependent on improving macroeconomics, customer or consumer demand.
We're excited about the opportunities ahead and confident in our ability to execute on the controllables and deliver significant value to shareholders in FY26 and beyond. With that, I'll hand back to you, PK.
Peter Konieczny
Thanks, [Mike C.]. To sum up before taking questions, with an enhanced global footprint, expanded capabilities across consumer and healthcare packaging, and a clear roadmap to significant synergies over the next three years, Amcor is well positioned to deliver value to our stakeholders despite an increasingly uncertain external environment. We are thrilled to welcome our new colleagues, customers, and shareholders.
This is day one of an even stronger future for Amcor and the best is yet to come. Operator, we're now ready to take questions.
Question and Answer Session
Operator
(Operator Instructions) Ghansham Panjabi, Baird.
Ghansham Panjabi
Congrats on the merger close first off. I guess on the progressive deceleration in North American volumes that you called out, maybe you can just share with us what customers are sharing with you as it relates to the sequential weakening.
And the reason I ask is volumes were already at a low point to begin with, given previous destocking, consumer affordability issues, and all that stuff. So what got worse do you think? And related to that, was various volume profile any different than what you reported? Thank you.
Peter Konieczny
Yeah, thanks, Ghansham. Really good questions. And let me start with what we're seeing in North America. First off, just to position that and put it into perspective, we went into the quarter with an expectation of low- to mid-single-digit volume growth across the board. And we came out of the quarter seeing that we pretty much hit that expectation everywhere, except in North America. So that was the whole back.
In North America, we have seen real weakness on the consumer demand, particularly hitting our North American beverage business which was down high single digits and therefore, softer than what we have seen in the prior quarter where it was down about mid-single digit.
And we've also seen some weakness in our North American Flexibles business. which was driven by categories that can be more discretionary. For example, beverage and confectionery. Unconfectionery, also keep in mind that we're seeing a lot of inflation coming from the cocoa environment. While that was offset with some categories where we've seen growth, in healthcare, meat, dairy, and liquids, that was essentially the overall story for North America, weaker than what we expected.
I just want to make one more comment. As you pointed that out, volumes have been low and in the past quarters, certainly driven by destocking, which, however, reduced over time. The destocking is now behind us. What we're seeing now is no longer an impact from destocking. What we're seeing now is really soft consumer demand, which I'd say really goes back to sticky inflation. We called that out in earlier calls. And then in the third quarter -- or the first quarter of this calendar year, certainly the whole uncertainty around the tariff situation has had an impact.
Operator
Anthony Pettinari, Citi.
Anthony Pettinari
You pointed to the 20% synergy-driven EPS growth assumption for fiscal '26. And I think you talked about that take -- it is before taking into account any organic performance in the underlying business. I guess a couple of questions there. Is there an underlying assumption that organic growth is going to be positive in fiscal '26? Or are you not really making any assumptions at all?
And maybe to kind of ask the question in another way. If we are in a much more challenging macroenvironment in fiscal '26, can you talk about your ability or your confidence in achieving the synergies in a tougher macroenvironment?
Peter Konieczny
Okay, Anthony. I may want to start here, and then I'm sure that Michael is going to build. Before I get back to your question, let me just finish off the other question from Ghansham that I didn't answer. And he actually asked the question about the Berry volume performance.
Look, it's a little early for me to be across all the details of the volume performance in the last quarter because we just closed the acquisition right now. But from a higher level, we're very excited about better growth performance on the Berry side, and I think the answer lies in mix with regards to customer exposure and category exposure. Keep in mind that North American beverage is not a category that Berry operates in.
So it's mixed, Ghansham, and I just wanted to make sure that I cover that off.
Now, Anthony, to your question. Your question was sort of volume guidance for '26 and what we're assuming for '24 and what we sort of believe the macroeconomic environment is like. Let me start there.
We already in our prepared comments, we said that at this point in time, we're really just guiding towards the end of this fiscal year, which includes Q4. And the way that we look at this is that we would never make drastically different assumptions in terms of the macroeconomic environment on a very short period of time. So going from Q3 to Q4, you would always see us pretty much roll forward the macroeconomic environment that we operate in.
So we've seen flat volume growth overall on the Amcor side. We've seen a bit of growth on the Berry side. We're going to get two months of contribution from Berry in the fourth quarter, and that will get you to a pretty much flat to slightly up volume performance expectation for the fourth quarter. That's the way how we triangulate ourselves into the fourth quarter in terms of volumes.
Now with regards to '26, we're not going to guide today for '26. We typically do that in August. But what we're pointing to here is that we have a lot of benefits from the combination with Berry. And we have an ability because we have been able to close the acquisition in a record time to get our hands around and our arms around the synergy opportunities two months earlier than what we thought. And that will set us up really for a great opportunity to get out of the blocks for '26 really fast. And we have a high level of confidence in the ability to generate the synergies in year one, which is fiscal '26 and which amounts to $260 million.
And just if you do the math, that creates an EPS uplift of 12%. I'll stop there and see if Michael wants to add anything or --
Michael Casamento
No. I think you covered it, PK. We feel really confident around the ability to deliver those synergies, and it's not contingent on the macroeconomic environment or the consumer or customer demand. And in fact, for Amcor, we see that as a real advantage because we've got self-help in the form of those synergies.
So out of the gates, as PK mentioned, we've closed earlier that we've got good line of sight to teams, have been working on this synergy delivery by function. And we've got four functional teams set up across SG&A and procurement, operations, and growth, dedicated teams working on that. And we're going to hit the ground running. And so from July 1, we're really confident around the ability to deliver that.
Operator
Daniel Kang, CLSA.
Daniel Kang
Just an extension on the synergies commentary. So $260 million in FY26. Just wondering if you can categorize the breakdown of that, particularly with regards to procurement. I'm just interested in how the preliminary discussions have gone with key raw material suppliers. Any color you can shed on that would be much appreciated. Thank you.
Michael Casamento
I'll start on that one, Daniel. Look, I mean the $260 million synergies, we broke out -- as we said, we've broken out the $650 million over three years, a portion from procurement, SG&A operations, and growth. In '26, I mean, clearly, out of the gate, your focus and ability to deliver is, first and foremost, comes from the G&A side. So that's typically the first piece you get on to.
Procurement will deliver as well, and that will build through the first 12 months and into the second year. And then on the operations side, typically takes a little longer because that's footprint optimization. That said, we've already identified some areas where we've got overlap. So again, teams have been working on that, and we'll hit the ground running, but they tend to take a little bit more just because you've got to move that work around, et cetera.
And then, look, on the growth synergies, again, that's something that typically takes a little longer, but again, a dedicated team on that. So we haven't called out exactly the mix of the synergy, Daniel, but that kind of gives you a flavor that SG&A typically comes first, procurement comes through and will build, and then you get into the operations and the growth.
Peter Konieczny
Yeah. And if I add to that, Daniel, I mean, we didn't provide and we're not intending to provide a detailed breakdown of the $260 million in the first year, but Michael gave you some quality here. So no question that procurement will be a major contributor.
You asked how things are going so far in the conversations. Look, we may have had some touch points with suppliers, but the level of engagement around that question has been really on a high level, and that is understandable because we haven't even closed the acquisition yet. And the suppliers are not really interested to engage in that conversation unless there's something real on the table. So we'll go into that, I think, a lot more from here on.
That said, the teams have been doing all the work that you would expect them to do. We have clean teams set up that actually have been looking at details. And all the work has really resulted in a point where we say we're pretty confident with the ability to deliver.
Operator
Matt Roberts, Raymond James.
Matt Roberts
Thanks for the time and congratulations on the completion of the merger. PK, maybe on the portfolio pruning, you did discuss given that there's weakness in industrial end markets or just broader uncertainty in demand in general in the M&A environment, how has your idea of timing around that pruning change from when a merger was announced to now? Or when could we expect the incremental color on that portfolio review? Thanks for taking my question.
Peter Konieczny
No, thanks, Matt. I was -- for a couple of calls, I've been very explicit that a little more dynamic portfolio management as an opportunity for the business, even more so now that we have combined ourselves with Berry. I have mentioned before that we have kicked that analysis off. And what we're doing there is just simply taking all of our activities and we're assessing that against certain criteria, and we've made some sort of progress around it.
Now the first thing that I will say is we will have to take a look at that assessment in the context of the new combined entity that we're looking at. We have a significant synergy opportunity that we will capture. We have more capabilities at our hands. We can learn from each other in terms of best practices, and that may have an impact on our assessment of the different businesses and their ability to compete and be successful in the areas where they operate. That's the one thing.
The second thing is, you mentioned also the current environment that we're operating in. Now the environment will not stop us on the initiative per se. So we're going to move on. We're going to get the assessment done. And if really what's behind your question is a question on timing, when can we execute against that, that's a really hard one to answer, I would say, at this point.
Things are changing by the day. And the only thing that I can really point to is that we continue to be that we are very disciplined around anything that we do on that end. That's something I can promise.
Operator
Jakob Cakarnis, Jarden Australia.
Jaobk Cakarnis
Sorry, excuse me, guys. Hi, Peter. Hi, Michael. I was just going to focus on the procurement synergies, if I could, please. There are 60% of the overall cost synergies that you guys are targeting. Michael and Peter, if I understood correctly, you were saying that that relied on a combined entity to have those discussions with the suppliers.
So I guess if you could step us through for '26 is the priority, a harmonization of those supplier terms. And then as we turn our minds to '27, '28 to hit those EPS accretion targets, is it more about drilling down into the terms of that procurement and potentially looking for some pricing benefits given your new scale, please?
Peter Konieczny
Yeah, Jakob, I'll have a go at this. I mean, the way it works, having been through these acquisitions at large scales a couple of times with Amcor, there's a very general principle, which is get to the synergies fast or never.
So I'm not sure that you pace yourself in the conversations with suppliers when you particularly look at procurement. You need wait until you can represent a combined spend. That's what I meant in my earlier answer. As long as the acquisition is not closed, you don't really have to stand on when you enter into the conversation. Now that that's the case, we can enter into the conversations and have the discussions with our suppliers, and that is what's going to happen.
And as we start those discussions, it will be around -- across everything. It will be across price. It will be across terms. It will be across a number of different things. And then we'll try to make progress as quickly as possible against that. I think that's the way I would want to answer that question.
Michael Casamento
And I think if I just add there, PK, to put it in perspective, if you remember again, the total addressable spend for the combined entity is around [$13 billion], of which $10 billion is raw materials. So when you put that into perspective, it's kind of a 2.5% to 3% impact that we're expecting from the procurement area for the synergies. So that's 1% a year. It's something that's absolutely achievable from where we sit.
Operator
George Staphos, Bank of America.
George Staphos
Hi, everyone. Good morning, good afternoon. Thanks for the details. How are you?
So my question is going to focus on growth, kind of tying together a lot of what's already been talked about. So can you, PK, tell us what in particular in the consumer environment, and certainly, there's been the volatility with tariffs and so on. But how has that affected your customers' outlook on demand when in reality, they're producing staples, confectionery items, protein, coffee, how is all the volatility in things that are much more discretionary kind of filtering back into what your customers are thinking about in terms of their outlook for growth?
And you need to be, I'm sure, thinking about that because the growth or lack of it is an important variable in terms of your valuation over time. Relatedly to that, what your customers are saying, with the growth outlook decelerating? I recognize you're only a few days into owning Berry, what would you say the probabilities are and what levers will you use to perhaps see whether those synergy targets or at least achievable, if not conservative at this juncture.
You already mentioned that as a percentage of the overall spend, the procurement spend, the revenue of the company, which is over $20 billion, is a relatively small percentages. So how should we think about how you'll be able to leverage, perhaps grow that you target, especially with volume growth being relatively flat at the moment.
Peter Konieczny
Thanks, George. There was a lot in that question. Let me try to bucket it up in two parts, and I'll invite Michael to come in to share his views too. The first one was, if I understood you correctly, a question of how our customers are performing in this environment and how the uncertainty sort of drives their growth performance. And that obviously is, for us, a major factor because our customers' demand drive essentially our ability to sell.
So we try to be close to our customers in order to understand that I think if I take a step back, the uncertainty that we have particularly seen in the last quarter in North America, has really driven weakening consumer demand. That's sort of the source of the issue.
And when you go and try to understand the consumer, you will find the consumer change their behaviors in terms of seeking value in terms of thinking very carefully about where to spend money and what you typically see is that the consumers buy less where they have an opportunity to do so and where you come to the essentials, they would buy different. By different in terms of trading down, buying bulk, going to different channels, and that's all of that is what we're seeing and what the customers are seeing.
And from what I've seen and what I've heard from the customers, that is very much aligned with what our customers are actually seeing. Now that's the one thing that drives the customers. And everybody has uncertainty right now in forecasting demand scenarios.
And there is a lot of volatility out there, which makes it really hard. And in some cases, we get volume forecast from our customers, which do not materialize and we need to deal with that as part of the value chain like everybody else does. But that's the situation that we're seeing. That's bucket number one.
Let me stop there and see if I ask Michael if he wants to add anything to that.
Michael Casamento
No. Okay. Then I get to the bucket number two, which was more about the question of in this environment, how do we think about synergies and synergy outperformance. Particularly, look, we have been very transparent around the amount of synergies that we expect, which is the $650 million over a period of three years.
We have made some comments around how we face that across the years. And we are now currently working on translating that. We have good pipelines in place for every single bucket of those synergies to go after them. I would say, in some cases, the pipelines would suggest that we have more opportunities than what we were thinking about. But they would have to translate in the current environment. So I'm not comfortable of driving any different expectations than what we have announced.
And I would also lock myself into a breakdown by bucket for those synergies. But overall, again, we sit here today, and we're pretty confident that we can get that done.
The final point that I will make is, let's not forget, this is a very volatile situation out there. We have created a situation in North America in a very short period of time by driving uncertainty around the whole tech tariff situation. And again, even that situation is very volatile. So we may sit here again in a couple of quarters and look at a different situation that presents itself for ourselves. And that will drive a different view in terms of the operating environment, but all of that will not change our expectations on the synergies.
It's been a bit of a long-winded answer here, George. I'm sorry for that, but I hope I sort of addressed the underlying question that you had on your mind.
Operator
Brook Campbell-Crawford, Barrenjoey.
Brook Campbell-Crawford
Just one on the North American beverage business. You've called that high single-digit decline in volume. I think it was in the quarter on a year-over-year basis. And I guess just looking through that, it seems to look like even for North America, beverage will be down sort of 20% or sort of year over year. So could you maybe just provide a comment if that's a sense or assumption that given that, is there any sort of structural issues going on in that business that need to be discussed at this point?
Peter Konieczny
Yes. Let me start with that and try to be more pointed on that question. I'll start by just contextualizing the volume performance that we've seen high single digits down. I want to make clear that this is pretty much exactly aligned with what we see in the market. So the point of what I just said is it's not an issue of share or share loss.
When you look at scanner data in North America, you take a look at the categories or the subcategories that we participate in, and you keep in mind our customer exposure. You can pretty much trying yourself into the performance of volumes that we've seen in the quarter. So that's the first thing.
The second thing is I'll let Michael comment on how that translates into the bottom line. You also asked a question of is there a structural element to that business. We have had this -- we've owned this business for a long period of time, and we have seen a number of cycles in the past. This is a long cycle and an extended cycle, but a lot of things are sort of happening around us and they have different drivers.
We, at this point in time, are still not ready to call it structural, and it doesn't take much volumes to come back and to improve the overall performance of the business. Michael, if you want to talk to the --
Michael Casamento
Just to follow up on it. In terms of the EBIT performance, Brook, I mean the first thing that we have to take into account is that the prior-year EBIT includes the Bericap business, which we disposed in December 2024. So that was about a $5 million contribution to EBIT in the prior year. So obviously, we don't have that in the current year.
And then the rigid overall performance was down about 12% on a comparable constant currency basis. And that was really driven by the volume decline, particularly in North America beverage.
And in addition to that, we did build some labor into the business in quarter 3, and we would typically do that build some manning up ahead of the busy season in the June quarter to be able to manage the increased demand there. But obviously, we've put that in place, but with the softer-than-expected volume performance in the quarter, that did have an impact on the cost base of the business, which impacted the bottom line in the quarter. So that's really what drove the 12% decline year on year. We would expect some improvement on that as we head into Q4.
Operator
John Purtell, Macquarie Group.
John Purtell
Peter and Michael, just a comment or question around sort of volumes within the quarter. Perhaps what you saw within the quarter and any comment you can make on April which sort of goes to a broader question about your expectations for Q4 and some of the moving parts within that.
Peter Konieczny
Yes, John, I sort of mentioned that before, but let me summarize it again. I guess the new part is that we have seen throughout the quarter, the consumer demand -- weakness. I think that's a fair comment. I'm not a big fan of of discussing volume performance month by month. And I said that before, I don't think it helps a lot.
But in this particular case, I think there was a weakening demand through the quarter. I will say, again, a very much different portfolio between the different regions, a pretty solid demand in terms of our expectations of low to mid-single digits everywhere else. But in North America, we've seen the weakening.
Now as I said before, the way how we go into the fourth quarter is very much aligned with what we've seen in the third quarter. We're expecting from volumes. And Berry came in with a bit of growth in the third quarter, which we were happy to see. We'll keep two months of contribution of Berry in the fourth quarter, assuming now on the same principle, assuming that to sort of continue you would get the fourth quarter to something that is flat to slightly growing.
Operator
Mike Roxland, Truist Securities.
Mike Roxland
Yes. Thank you, PK. Michael, Tracey taking my questions. And congrats on closing the deal and on all the progress. Just I wanted to focus on synergies, not to be a dead horse here, but I wanted to just follow up with you regarding the procurement savings of $325 million.
Now both you and Berry are some of the largest purchasers globally of resin I don't believe there's a direct overlap maybe in some of the grades, I think you guys may be more heavier to PET, very maybe heavier to propylene. There is some overlap on propylene. So there you have direct overlap in some things. In addition, the resin producers themselves are under pressure, and I think they'd be somewhere looking to offer normal price concessions given the financial difficulties they're catering. So would just love to get your thoughts about how you intend to approach the procurement savings, particularly in a more challenging environment on resin.
And then secondly, can you remind us about the vetting process you undertook regarding the cost synergies. How did you determine that these figures were the correct figures in terms of synergies themselves?
Peter Konieczny
Yes, Mike, I'll start out and then maybe Michael wants to build. And I want to go back to a couple of those data points that we have discussed on prior calls. Michael already mentioned, the combined spend of the company is $13 billion, $10 billion of that relates to raw materials.
If you hold that against the expected synergies you get yourself into the range of something like 3% that we're expecting over a three-year period, and that, of course, needs to go on top of what we typically produce in year but that's not a tremendous expectation on the procurement synergies. So that's just to contexturalize. And we've said that before, and we're very consistent with that.
The second thing that you said is it's very complementary. And there is a bit of overlap, but to a large extent, particularly on the resin side, it's pretty complementary. And that's actually good because we see Berry, for example, being much stronger on the polypropylene side, Amber is much stronger on the PP and PE side. And that sets us up for an opportunity to just harmonize terms with the larger buyer, and that was one of the levers that we have always been expecting and with all the work that we've done, we feel pretty confident that, that's an opportunity for us. So that's the way how we approach that.
And then maybe the final point is how do we think about generating those synergies in a tougher environment. My expectation is if we are in a volume muted environment, a large buyer has quite a bit of attractiveness and to the supply base because we're able to bring critical volumes in order to help load capacities existing capacities.
And the very final point that I will make is we do have alternatives, we do have alternatives. And it's not that we're locked in one or two suppliers only. We do have alternatives, and that's what we need to touch.
Michael Casamento
And Mike, I'd just pick up on your question, the second part of the question, which is around just a reminder of how we came out the synergy number and shored that up. I mean we put a lot of work in behind the scene on this on both sides actually on the Berry and Amcor side.
Obviously, we've both got a lot of experience in M&A. We used external consultants to help us benchmark what you should affect the deal this size and the various components relating to that. We've had the integration teams in place.
So we stress tested that along the way. And I mean, typically, you would see synergy delivery in these type of deals, somewhere around the 5% sales would be the cost synergies. And that's where we ended up around -- if you just take the cost in this line of $530 million, you then got $60 million of growth and $60 million on financials. So we triangulated that from all different ways and broke it out by the various components. We felt really confident around the ability to deliver that number.
Operator
Keith Chau, MST Financial.
Keith Chau
So just back on the procurement synergies, I guess the point that some are trying to get to on this call like us, a 3% savings at Amcor over three years may not sound like a lot, but some of these suppliers with margins are EBIT margins, call it, 10% to 15%, you're talking about the 300% -- I'm sorry, 300-basis-point haircut to their EBIT margin.
So I guess, the extent to which you can drive procurement and maybe go to alternative suppliers of some don't play ball. I just want to refer back to a letter or an e-mail that was sent to your suppliers on April 20, where you've asked them to meet in Chicago. First one is, it sounds like a bit more of a directive rather than a brandership going forward.
But I just want to understand how many suppliers responded to their e-mail or letter. How many do you expect or proportionately what proportion of your suppliers do you expect to turn up to that meeting? And what are the consequences to those suppliers if they are at play ball? And perhaps an extension to that is what proportion of your raw materials, can you have alternate sourcing given the size of the two combined businesses and I get the point that you've been involved in a lot of these large acquisitions, but this one is particularly big.
Mike Roxland
No, Keith, you've sort of said all the right things. This one is particularly big and I've been involved in some of the larger acquisitions, and that's why I'm going to have to tell you, I can't really get any further into that conversation. We have a playbook and some of those conversations are obviously very sensitive with the suppliers, and we're going to handle it in a very respectful manner and we have a business interest to represent here, and that's what we're going to do.
So I understand the question, but I would understand also and would ask for some understanding that this is really a level of detail that I don't want to handle on this call.
Operator
Nathan Reilly, UBS.
Nathan Reilly
Look, we've been hearing a little bit more about the North American consumers sort of value-seeking behaviors right now. So can you please talk to how your merged flexibles portfolio was positioned to respond to that shift in consumer behavior, just particularly in terms of any shift to private label smaller portion sizes or anything else we should be thinking out on that shipment behavioral?
Peter Konieczny
Yes, Nathan, this is a good one. We see a couple of things that we can respond to and one that I want to carve out here is when you think about value-seeking behavior in the direction of going potentially to non-branded product alternatives. That is something like on the private loan side, that's certainly something that you could expect the consumers to do. We have a good participation in that category.
In North America, we're pretty much proportionally represented -- and the reality is that the packaging formats that we're actually selling, whether it's branded or private label, are very similar. They end up being very similar. So one of the things that we take away from that is expanding our participation in those areas where consumers will turn to, and that is certainly something that we do.
Again, North America, that is pretty well established. In other regions, we may have some opportunities here and there, and we would be driving that.
Operator
Sam Seow, Citi.
Sam Seow
Just on North American beverage. Just wondering, is there any numbers you can give us around the net exposure of North American beverage in the combined business? And going forward, when you think about pruning, is that just Berry businesses you're looking at? Or is there some segment there as well?
Peter Konieczny
If I go backwards, we're definitely looking at pruning of the portfolio in the context of the combined company. So that's a new one for going forward. It has nothing to do with carving out either legacy Berry or legacy Amcor. So that's a clear answer on the second question.
On the first one, I'm not sure I fully understood the question, but I just want to make very clear, the Containers and Closers business from Berry has no participation in the North American beverage category. That's an Amcor question.
Let me just see with Michael here if he heard the question differently.
Michael Casamento
Yes. No, that's right. I think the exposure on the beverage side, for us, it's really the Amcor legacy, Amcor business has $1.5 billion kind of revenue into the beverage space and Berry really is nothing. So that's the exposure.
Operator
Cameron McDonald, E&P.
Cameron McDonald
Just wanted to touch on the below-the-line costs. So with the early integration of Berry, it looks like you've taken $26 million already below the line. What's the expectation for that relative to the fourth quarter? And can we confirm then that that's including -- that is part of the $280 million, so that in FY26 and beyond that, whatever is incurred in this quarter and the next quarter is a reduction to that $280 million in the following years?
Michael Casamento
Yes. Look, just to put some clarity on that. There's a couple of things going on in that line. So firstly, there's transaction costs. And for a deal of this size, you'd expect the transaction cost kind of 1.5% to 2% of the enterprise value.
So call it $250 million to $300 million, part of which would end up in the berry perimeter and the balance in Amcor. So what we've seen to date by the line. I think there's about $36 million in that year to date, of which third $28 million to $30 million is actual transaction costs. So that's things like legal fees, consultant fees, financing charges. So we've got more of that to come through, and that will come through in the next couple of quarters.
And in addition to that, over the three-year period, we're going to have around $280 million of cash costs relating to the cost to achieve again, which we'll call those out as we progress that over the term.
Operator
Arun Viswanathan, RBC Capital Markets.
Arun Viswanathan
Congrats on completing the merger. I guess I had two questions. So first off, going back to the growth side, Berry, I think struggled with low single-digit volume growth for the last few years, they did start to have some line of sight to that. going forward, but it was somewhat elusive. So maybe you can just comment on if that's something that you see that's still within the crosshairs for the combined company?
And then secondly, on the procurement side, I appreciate the math on the 2% to 3% reduction there in that square with the synergy guidance. But is this a little bit surprising given that Berry was already such a large buyer of resin as you were as well. And so I think you mentioned that there are many other terms that you can kind of work through to achieve those synergies.
So can you just confirm that it's not just price could maybe long-term supply agreements or whatever else to get those?
Peter Konieczny
Yes. Let me work through that. On the growth side, I would probably agree with the assessment of various growth profile, low single-digit growth. We have seen that. I would say that it's not much different from what Amcor has seen over long periods of time. And we are going to have an opportunity as we combine the company to drive that into higher levels on a sustainable basis.
The portfolio realignment and pruning will certainly help on that end. We have a broader product portfolio that we can offer to customers at scale and globally. We have leverage opportunities in the products that we talked about. Think about the established base of Amcor in Latin America and Asia Pacific and the barrier products that we can sell through the existing network.
And I would say those are the most important levers that we see plus and that's the one that I was struggling with here plus the innovation capabilities that we now have on a combined basis to drive functionality but particularly also sustainability as we go forward. That will differentiate our product portfolio going forward. So those are the four big levers that I would see to get ourselves into a stronger growth trajectory going forward, and we have made that a real priority for the company. So that's the growth side.
On the procurement side, look, I don't know how much I can add to this, to be honest with you. I think the most important thing that we have is, it's a very complementary buy and the party that has the bigger scale typically has the better terms. And that is something that we can roll out as we combine the two companies. So think in that direction because there is real value there.
Now in terms of terms, yes, there is more than price and other things that you can look at. No question. and we will have to take a comprehensive approach. And we'll do all the things that you have at your fingertips to drive the conversation. And we're not against long-term supplier relationships if that drives value mutual value on both sides.
Operator
Everyone, that is all the time we have for questions today. This does conclude our question-and-answer session. I will now hand things back to PK for additional or closing remarks.
Peter Konieczny
Yes. Thank you, operator. Look, thanks for the interest to everybody here on the call. I just want to make a comment here in closing. With the merger now completed, Amcor really is better positioned than ever to meet customer and consumer needs as the markets continue to evolve.
We are really thrilled to welcome our new colleagues, customers and shareholders. And as far as I'm concerned, this is day one of an exciting and an incredibly strong future for Amcor and all our stakeholders. Thank you, operator. Please close the call.
Operator
Thank you, sir. And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.
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- Amcor completes acquisition of Berry Global
Apr 30, 2025
This story was originally published on Packaging Dive. To receive daily news and insights, subscribe to our free daily Packaging Dive newsletter.
Amcor, a global multi-substrate rigid and flexible packaging manufacturer, closed its all-stock acquisition of Indiana-based Berry Global on Wednesday – ahead of schedule, Amcor executives touted. CEO Peter Konieczny said in a statement that Amcor will enter fiscal year 2026 “in a better position than we anticipated.”
Amcor reiterated expectations for $650 million in savings by the end of FY2028 — including $260 million in FY2026 — for the consumer and healthcare packaging giant. In a presentation during Amcor’s fiscal Q3 earnings call late Wednesday, executives detailed that this will start as procurement, general and administrative and operations — or footprint optimization — efficiencies, followed by growth and financial synergies. Amcor said these benefits are not contingent on the macroeconomic environment.
The Zurich-based company’s reach now spans approximately 140 countries, with some 400 facilities, 70,000 employees and $23 billion in anticipated sales revenue.
“This combination delivers on our strategy to become a stronger company with a broader, more complete offering for customers and enhanced positions in attractive categories,” Konieczny said in a statement, highlighting plans to further refine the portfolio.
Amcor projects annual cash flow of more than $3 billion by FY2028, “providing significant capacity for Amcor to fund organic reinvestment, value accretive M&A and shareholder returns,” the company announced.
Fred Stephan, who was previously president of Amcor Flexibles North America and then chief operating officer for Amcor, will serve as division president for global flexibles, which covers about 60% of Amcor’s business. Jean-Marc Galvez, who served as Berry’s president of the international consumer packaging division, has been appointed president of global containers and closures at Amcor, which is expected to account for the remaining 40%.
The deal, described as the largest transaction in Amcor’s history, was first announced last November and was previously valued at $8.4 billion. Earlier in 2024, Berry had discussed combinations and other strategic alternatives with multiple other companies. The transaction received respective shareholder approvals in February.
That same month, Konieczny explained that Amcor would consider divestitures from Berry’s portfolio. On Wednesday, Konieczny clarified that “we’re definitely looking at pruning of the portfolio in the context of the combined company” but it “has nothing to do with carving out either legacy Berry or legacy Amcor.”
Story Continues
Amcor last reported annual net sales of $13.6 billion for its 2024 fiscal year. Berry’s most recent annual net sales totaled $12.3 billion.
Berry released first-quarter results on Wednesday. Net sales totaled $2.52 billion, which represented 2% organic growth. In flexibles, net sales decreased by 5% to $761 million, which Berry partly attributed to selling its tapes business.
Amcor’s sales during the quarter ended March 31 fell about 2% year over year to $3.33 billion. Sales in flexibles increased while rigids declined. Customer and consumer demand was particularly weak in the North American beverages business, CFO Michael Casamento said on the earnings call.
Inflation and subsequent tariff uncertainty have hurt consumer sentiment, Konieczny noted. Now in its fiscal fourth quarter, Amcor expects volume growth will remain muted.
With its fiscal year ending on June 30, Amcor now projects adjusted earnings per share in a narrower range of 72 to 74 cents per share and adjusted free cash flow between $900 million and $1 billion. This takes into account having Berry in May and June.
Editor’s note: This story has been updated with additional information from Amcor’s fiscal Q3 earnings call and presentation late Wednesday.
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