Thank you for standing by. At this time, I would like to welcome everyone to today's Amcor Fiscal 2026 Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Your telephone keypad. And if you'd like to withdraw your questions, simply press 1 again. Thank you. And I would now like to turn the call over to Tracey Whitehead, Head of Investor Relations. Tracey?

Thank you, operator, and thank you everyone for joining Amcor's fiscal 2026 second quarter earnings call. Joining the call today is Peter Konieczny, Chief Executive Officer, and Steve Scherger, 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 will discuss on this call. Please be aware that we'll also discuss non-GAAP financial measures and related reconciliations can be found in those documents on the website. Remarks will also include forward-looking statements that are based on management's current views and assumptions. The second slide in today's presentation lists several that could cause future results to be different than current estimates. Reference can be made to Amcor's SEC filings including our statements 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-ups. With that, over to you, Peter.

Thank you, Tracey, and thank you to everyone joining us. I'm pleased to welcome you today to discuss our fiscal 2026 second quarter results. This is a transformative and exciting time for Amcor. Our acquisition of Berry created a global leader in consumer packaging and dispensing solutions. We're realizing the benefits of this combination and executing well, resulting in strong momentum toward achieving our fiscal 2026 commitments. With a strengthened platform and a clear growth roadmap, Amcor is well positioned to deliver significant long-term value for shareholders. Before turning to today's key messages, as always, we will start with safety on slide three. The well-being of our colleagues is a core value for Amcor, and our commitment to safety remains unwavering. For Q2, our industry-leading safety performance continued with Amcor's total recordable incident rate at 0.52. This is a modest increase compared with last year's performance which is not unusual when we acquire business. We have moved quickly to drive safety performance across our combined business, and are pleased to see this key metric improve compared to September. Additionally, 79% of all Amcor sites remained injury-free through Q2. Slide four highlights the key messages for today aligned with our near-term priorities, which have not changed. Continuing to deliver on the core business, accelerating synergy realization, and further strengthening the business through portfolio optimization actions. Each and all these near-term priorities are contributing to setting Amcor up to deliver solid and sustained volume-driven organic earnings growth over the mid to longer term. First, our financial performance in the second quarter was in line with the expectations we set out in October. Maintaining momentum toward our full-year objectives. Adjusted EPS was up 7% for the quarter, and 14% for the first half as we continue to execute well against our priorities and…

Thank you, Peter, for those kind words. It is an honor to be here with you and our 70,000 colleagues. In my first few months at Amcor, I've had the opportunity to meet teams from across the organization and around the world. Gaining a deeper understanding of the operational and strategic priorities that will drive and shape significant value creation for years to come. What has stood out most is Amcor's clear market leadership disciplined approach to creating value, and the exceptional quality and capabilities of the people who drive performance globally every day. This quarter, as you can see, we are sharing some additional materials and analytics with you to help provide a clear view of our underlying market trends and the exceptional global consumer packaging platform we are building. I look forward to continuing to share our strategic priorities with current and potential investors in ways that will simplify quantify our compelling value creation model. I look forward to partnering with our global leadership team as we build momentum and deliver strong results for our customers and shareholders. Let me start with the global flexible packaging solutions segment on slide eight. Sales for the segment increased 23% on a constant currency basis. Driven primarily by the Berry acquisition. On a comparable basis, volumes were down approximately 2% and were similar to what we experienced in Q1 in all regions. In the developed regions of North America and Europe, volume trends were consistent with the first quarter. Down low to mid-single digits with Europe remaining modestly more challenged than North America. Volumes across emerging markets were as expected, with low single-digit growth in Asia Pacific offset by modestly lower volumes in Latin America. By market category, volumes were higher in pet food and meat proteins. This was offset by…

Thanks, Steve. In closing, we're making tangible progress across all three of our strategic initiatives. These actions support our long-term organic growth objectives, translating into sustainable volume-driven earnings growth over the mid to longer term. As we close out the 2020 and look ahead, we are pleased with our progress. Executing well, financial performance is in line with expectations, and we are delivering against our commitments. Demonstrating the resilience of our business in a challenging market environment. We're on track to deliver at least $260 million of synergies this fiscal year and $650 million over three years. We have reaffirmed our fiscal 2026 adjusted EPS and free cash flow guidance and portfolio actions are progressing with pace. That concludes our prepared remarks. And with that, operator, please open the line for questions.

Thank you. And at this time, I would like to remind everyone, in order to ask a question, press star then the number one. In the interest of time, we'd like excuse me, we would like to remind participants to limit their questions to one and to rejoin the queue for any follow-ups. And we will pause just a moment to compile the Q and A roster. It looks like our first question today comes from the line of Ghansham Panjabi with Baird. Ghansham, please go ahead.

Yeah. Thanks, operator. First off, Steve, congrats to you, and, welcome back. Best wishes in your new role. I guess, you know Thanks, Ghansham. Peter, may I guess, Peter, in terms of the volumes or, Steve, for that matter, in terms of your expectation for volume for the next two quarters, which are your fiscal year '26, are you embedding just share with us in terms of what you're embedding in terms of volumes between the two segments. Have you seen any improvement in your production backlogs or any other forward indicators that you track? And just asking because some of the CPGs have reported thus far have said some you know, generally speaking, very favorable things as it relates to volumes and pivoting towards volume velocity and fiscal year '26. I'm just curious if you've seen any impact of that whatsoever. At this point. Thanks.

Yeah. Thanks, Ghansham. I'm happy to give you some color, and then maybe Steve wants to follow-up and provide some context with regards to our financial expectations. Look. Generally speaking, I'd say we're approaching the back half, not much different from what we saw in the first half. And therefore, the commentary is very much aligned with what we said in November. I'll start with the positives. I think we're making good progress on the revenue synergies. As we pointed out in our prepared comments. And we are very much focused on the core and growth initiatives that we're driving across the business. So those could potentially provide some upside. But the reality is we're operating in a market that is low single digits down, And while everybody is hoping that the environment will turn in the short term in the second half, we're approaching it very much consistent with what we've seen in the first half. What that means is we will continue to apply the same recipe in terms of focusing on cost, flexing the organization according with the volume demand that we're seeing. So you know, we do see some opportunity for improvement in the back half but we're hoping for the best and planning for something that's very much consistent with the first half. Steve?

And thanks, Peter. And just to add a little bit to that, Ghansham, our guidance assumes really at the bottom half of the guidance, if you will, assumes in a market environment similar to what we've been experiencing, so similar to the one and a half percent that we were down in the quarter. So, really, the bottom half assumes consistent volume environments. And as Peter said well, the upper half would be more aligned with the possibility of more positive activity with our customers as well as the capture of revenue synergies and the work we're doing, to gain position.

Great. Thanks, Ghansham.

And our next question comes from the line of Jakob Cakarnis with Jarden Australia. Jakob, please go ahead.

Thanks, operator. Evening, Peter and Steve. I just want to focus that we've got the guidance for the third quarter more on the fourth quarter and exit rates, if we could. Seasonally, it looks like your EPS historically has been about 30% of the full year in that fourth quarter. It looks like the guidance is largely congruent with that sort of shape for the result. Can you just give us outside of volumes and market performance some of the initiatives you're enacting through the fourth quarter that give you confidence around that guidance, please?

Jakob, this is Steve. Maybe just try to take you through the first half, second half and then a little bit third quarter, fourth quarter. As we look first half, second half, I'll focus on EBIT improvement. Really, there's three things that will drive first half, second half EBIT improvement. One is just seasonality, little bit of what you were just talking about. We should see about $100 million of EBIT improvement first half second half just seasonally, which is would be consistent with historical expectations. Synergy growth is very important. First half second half, the at least $260 million of synergy for the year is another $100 million of improvement first half. Second half, And then I'm sure we'll talk a little bit more about our non-core businesses, the $2.5 billion of non-core. We'll see improvement first half, second half there as well, particularly given a challenging second quarter that we saw with our non-core businesses, primarily the North American beverage business, Q3 to Q4 improvement to your question that too Synergy capture will continue to accelerate Q3 to Q4. Our non-core businesses, we should see improvement Q3 to Q4 then one of the things that we'll see in Q4 specifically on a year over year basis is a year ago in Q4, we had some challenges with our North American beverage business. And we have more confidence that Q4 year over year will see improvement on that front. So just a little bit of first half, second half and third quarter fourth quarter for you. I hope that helps with the context.

Great. Thank you, Jakob.

And our next question comes from the line of Anthony Pettinari with Citi. Anthony, please go ahead.

Good evening. Hey, just following up on Ghansham's question in terms of the volume performance in the first half and maybe the embedded assumptions for the second half. I mean, you think in your major categories are you is your volume performance basically in line with the broader industry Do you think that you're gaining a little bit of share or conversely, are you letting go of some business that's maybe become less profitable?

Yeah. Thanks, Anthony. I think I'll have a go at this one. Me just run you through the numbers again to calibrate and, at the same time, give you a bit of color. So the overall company in the second quarter was down two and a half percent on volumes. And that would have been a performance that's very similar to the first quarter. And then when you take a really hard look, you probably see a performance that is marginally better than the first quarter. But I'd be cautious to read too much into that just because I would like to see a bit more of a trend here, and also the numbers are not that much different. So very much in line, I would say, volume performance wise with the first quarter. Now let me dive into that a little bit more, and by doing that, I'll focus on the core. The core portfolio. So now I'm talking about the $20 billion out of the $23 billion of the company. And the core portfolio really is 1.5% down. That's about a 100 basis points better than the overall business. And the delta, obviously, is made up by the non-core part of the business. But the core is 1.5% down. If I go into the segments between rigid and flexibles, Flexible's down low single digits. Rigid's flat. Again, both have been very similar to Q1. We're happy with that. Happy with the flat performance of rigid. I guess what we're seeing there is that North America is holding up. We're seeing some growth in LatAm. And You Know, We'd Like To Believe That That's A Combination Of Of Market Improvement Maybe, But Also The Efforts That We're Investing In The Business. In Order To Improve The Volume Performance Overall. So Happy With The Rigid's Performance. If I Go By Region, You Know, North America encouraging, as I said, low single digits down. A little better than Q1. Europe's a bit weaker than North America across both segments. And we're seeing growth again in the emerging markets. Low single digits, Then I'll make one more comment After we've we've been flat in Q1. which is important because we keep referencing the focus segments. Of the business, which are more than 50% of the core business. And collectively, those focus segments have have outperformed the core business overall. And we're happy with that. You know, pet care was certainly a standout example. We've seen high single digits growth. Over a couple of periods now, and there, I would say, we probably are gaining some share And meat proteins, has likewise been a category we're happy with with, low single digits growth. And that would be consistent with the efforts that we've put into the category in the past. So I think that gives you some color.

Great. Thank you so much for the question, Anthony.

And our next question comes from the line of Brook Campbell-Crawford with Baron Joey. Brook, please go ahead.

Yes. Thanks for taking my question. It was just on the second half implied earnings improvement, which you know, you've already kinda talked through there. But just with respect to the non-core portfolio, can you provide some EBIT numbers in terms of what we should expect improvement in the non-core EBIT contribution in the second half versus the first half will be super helpful. Thanks.

Yeah, Brook. Again, this is Peter. Let me provide color, and then Steve can help you out on the numbers. The non-core Business, we believe, had a tough quarter in Q2. And that was mostly driven by volumes. Sequentially, Q2 was a little weaker than Q1, particularly in the North American beverage business. I would say you know, we've been looking for explanations and signs. We've been looking at destocking activities. But in the core portfolio of our business, I wouldn't say I could see any destocking impact in the non-core business. There may have been some targeted destocking, so that may have been one of the reasons that drove the volume performance down. The other two things that I wanna tell you is operationally, we operated well. In the non-core portfolio. And that relates back to some challenges that we had in prior periods, but we exited the first quarter already saying that we were okay with that, and I can confirm that in the second quarter. Making these comments also in terms of the outlook into the second half. The thing that's changing going forward for the non-core business that we is is that we've also sat down with a number of our customers, and we have looked at the commercial terms of our contract and really in a in real partnership basis, we have been able to adjust some of those terms on a very fair basis, which will improve the business going forward. So that gives me confidence. We're operating well in the back half. That's our assumption. Commercial terms have improved. That will give us a lift. Then we'll have to see what the volume situation is like, but certainly, you know, Q2 versus Q3 I would expect a bit of a lift if I'm correct with my assumption that we did have some destocking.

Yeah. Brook, this is Steve. Just to kind of add some of the facts there to what Peter was describing. As Peter mentioned, Q2 was a difficult quarter for our non-core businesses. EBIT margins in the 3% range. And that was really where we saw some of the headwinds the $30 million of year over year headwind that was in the context of our overall still growing EBIT at the company level. First half EBIT margins for our non-core business, roughly the $1.2 billion of top line in the 5% range. So that just kind of speaks to the first half. As we look to the second half, let's keep Peter mentioned, new contractual terms, better pricing, good operating environment, we should operate EBITS back in more traditional levels, which is more in the 7%, 8% range, which year first half to second half would be about a $50 million improvement in that business which is really kind of the third component we were talking earlier. Of the first half to second half improvement relative to the North American beverage business in the context of the total non-core businesses.

Alright. Thanks, Brook.

And our next question comes from the line of George Staphos with Bank of America. George, please go ahead.

Thanks very much. Hi, everyone. Steve, good to hear you. Welcome back. Peter, thanks for the details as well. I guess my question is is the following. Can you talk about, especially in your focus categories in flexible, what the exit rate on volume was where are you seeing from fiscal two q into fiscal three q, perhaps some acceleration or decline The sort of related question behind the question you know, when I look at the segment results for flexible on slide eight, you know, I know you're pleased with the synergies and certainly that's going well. But there was really not a lot of operating leverage a lot of earnings growth ex the acquisition, and I'm assuming it's the core businesses being down in volume. So if you could talk about the exit rates on your focus categories in flexible, what's doing well, what's not, and what kind of the mix effect of declining volume was in 2Q for flexibles? Thank you.

Yes. Thanks, George. Me give this a try, and then Steve can follow-up if he can add some additional value. So exit rates of the focus categories. You know, I'm not a big believer of dissecting a quarter into beginning, middle, and end and sort of talking about volume performance in a very short period of time and read too much into it. But what I can tell you is, and I made this comment, the focus categories collectively outperformed the core business in the second quarter. And the core business was 1.5% down The focus categories were anywhere between 50 and a 100 basis points better than that. So that gives you a bit of a flavor of how the focus categories performed. Now as to the performance between the six, I made a couple of comments already. I guess on the positive side, pet care, really strong and this is I went as far as saying in an earlier question that I think we are gaining share in pet care. Meat protein was up low single digits, so we like that. Dairy was a little softer. And meat and dairy together make up protein. And then if I go to health, beauty, and wellness, health care was down just a tad. You would wonder why that is, but if you look at the quarter again, short period of time, US flu season was a little weaker. That sort of is a bit of a driver. And beauty and wellness was in line. With growth in Europe, a little weaker in Asia. The rest of the focus categories are sort of in the range of low single digits down maybe food service a little more which is a reflection of the value conscious behavior of the consumer. And that sort of speaks to the mix between the different categories Steve, is there anything you wanna add?

No. I think the only thing to add there, George, to your segment component of the question, I think if you look at the flex segment, the page eight, kind of the lower left, Overall, volumes were down 2% as we mentioned in the flexible segment, while EBIT was up 1%. Synergy capture in the Flexibles business this quarter was in about the $10 million range. So only 10 million of our $50 million of EBIT synergies So, actually, the EBIT on a comparable basis up roughly up roughly $5 million. Synergies plus 10 the core business actually operated pretty close to flat, just down very modestly. So I think the core we're actually very pleased with how the core business performed in a modest down volume environment. Where we really saw the positive benefits on the rigid segment in the kind of the lower left excluding the non-core businesses, which we mentioned were down $30 million on a year over year basis, was actually up 15%. And so to put that into context, it's about $35 million and 30 million of our 50 of EBIT synergy capture was in the rigid segment because given that's where the Berry business primarily is, we saw a lot of our of our G and A and a lot of our procurement synergies captured there. And there too, excluding that, the core business performed quite nicely flattish. On a in a flat volume environment. So that's just to give you a little bit the details on the segment side.

Great. Thank you, George.

And our next question comes from the line of Neeraj Shah with Goldman Sachs. Neeraj, please go ahead.

Hi, guys. Thanks for taking my question. Just double clicking on synergies. Can you give us some color on the split between G and A and procurement in the second quarter? I think skewed to G and A in the first quarter, but also how you expect that to look in the second half and how the conversations with the suppliers are progressing as well, please?

Yeah. I can touch on that, and Peter can add some color there. Of the $50 million of synergy capture EBIT synergy capture for the for the quarter. It's split actually quite evenly between procurement synergies and G and A. So it was those two categories The 55 that we mentioned, the incremental five, are the financial synergies, kind of more on the on the interest and tax side. So pretty evenly split between procurement and G and A. As we look forward, we'll continue to be on path relative to procurement and G and A synergies. We're not expecting much in the form of revenue synergies in the second half of the year. That will be mostly positives that we're gonna start to see in fiscal out into 2027, so post June. We'll also start to see some of the operational synergies That's really where we've been investing for facility improvement and consolidation Those synergies will start to ramp up as we look past this year's fiscal year end. So, hopefully, that gives you a little bit of the the detail there.

Yeah. Maybe in terms of the color on the procurement side, what I can tell you is that, generally, we feel really good about the synergy ramp up and also the pipeline that supports our expectations for the back half of the year. Steve already said, you know, what what hits first is is G and A. What then comes second is procurement as you wash through the inventory. Anything on the network takes a little more time because it typically has to do with plant restructurings or closures. And the commercial side, while awarded, takes a moment for it to also come through. That's sort of the background to Steve's commentary which I fully support. On the procurement side, look. We have a number of conversations with our suppliers, obviously. About half of the total synergies that we're expecting of the six fifty are procurement related. And the compensations have gone well. And to an extent that, again, we feel very confident about our ability to deliver the synergies If procurement wouldn't perform, we couldn't get there. Just because of the weight in the portfolio. So I feel very good about that.

Great. Thank you, Neeraj.

And our next question comes from the line of Jeffrey Zekauskas from JPMorgan. Jeffrey, please go ahead.

Thanks very much. Sort of a two-part question. Is the conclusion that we should draw from slide six it is it that the non-core businesses have very minimal EBIT? And secondly, on your raw material synergies, And are the raw material synergies independent of the general level of raw material values. So in other words, in a world in which oil falls in value, and we've seen polypropylene prices fall and polyethylene prices fall. Is the amount of synergy capture simply smaller And in a world in which raw material prices really rise, would it be higher or is it independent of commodity changes in value?

Jeff, maybe I'll start on the non-core, and I'll just go back to what we mentioned a little bit earlier just on the margin profiles. You touched on it. Our non-core businesses, the $2.5 billion operated through the first half at about 5% EBIT margins. So think EBITDA in the just sub-ten percent range, and that was below traditional levels mostly because of a very difficult Q2, as we mentioned, down at 3%. Some of the significant volume decline that we saw there, high single digits during the quarter. We do expect that EBIT margins will return to more normalized levels for our non-core businesses in the second half, repeating, as Peter mentioned earlier, better contraction terms, better pricing, more volume commitments. And they would be in EBIT margins more in that 7% to 9% range. As we've talked before, they are below the averages for the company. And, obviously, have a different growth trajectory, which is one of the critical reasons why strategically we're committed to exiting from them. So that's just a little bit of a fact based on that front. And I'll let Peter add on the raw material side. I'd say those savings tend to be more volume driven generally with Peter.

Yeah. I just wanna provide some context here for the scale, Jeff, and break that down bit. We gotta remember that our procurement spend is about $13 billion, of which $10 billion is raw materials and $3 billion is indirects. Out of that $10 billion of the raw materials, 50% is resin based. And the balance is ink solvents, adhesives, and a number of other things. So the first thing that I'd say is you know, we tend to believe our synergies are resin based synergies. It's a lot broader than that. And we need to remind ourselves of this. Also, in terms of the scale of our procurement spend to start, Now in a world where raw material input pricing comes down, and we had this conversation several times on earlier calls, The question is, how big of an influence does scale of our operations have? Just the near volume that we're able to offer to suppliers. And it's had it's had an impact in a situation where you're struggling for volumes, big buyers that can offer volumes do and can make a difference. And we're seeing that. But if we take that plus everything else that we're doing on the procurement side, we get to the synergy expectations that we're confirming today and that we feel very comfortable with.

Alright. Thank you very much for the question.

And our question comes from the line of Ramoun Lazar. Ramoun, please go ahead. By the way, with Jefferies.

Thank you. Good evening, and good morning to all on the call. Just another one just on the volumes Peter. If you could maybe comment on how you see your customers performing in the context of the overall market? Know previously, you've called out market share losses by some of your customers. Do you think those customers have stabilized their share in the end markets and yeah, just keen to see how you're seeing that progress through the Yeah, Ramoun. I mean, you know, it's not for me to comment on the our customer performance, and that's not your question. I know that. So how can I best answer that? The first thing that I would say is we are we have always been we are particularly now after we done the acquisition, very broad. And we have a very broad exposure to a number of different customers and customer groups. So, you know, broad participation. Therefore, our performance should roughly be what the market actually offers. Right? Unless we can outperform what we're trying to outperform. And we have good reasons why we believe we can outperform. So that's one. The second thing, to the extent you know, large customers CPG type customers, have been taking price in the past on the back of a very inflationary environment. And prioritize price over volumes What I can tell you there is that you know, certainly, the conversations have moved to finding a more a better balance between price and volumes. Which also relates to promotional activities that have been, you know, spoken about. By customers, and you see that when they go to market and they talk about how they want to improve their volume performance going forward. And I think we're well positioned to support on that end. And while we haven't really made any specific assumptions in terms of improvements in the back half as we've laid out beforehand. So we're, again, seeing all that happening. We're listening very carefully. We're positioning ourselves to participate as much as we can. And to help customers on their journeys but we're sort of planning and approaching the back half at least very consistently with the first half.

Great. Thank you, Ramoun.

And our next question comes from the line of Matt Roberts with Raymond James. Matt, please go ahead.

Hey, Peter. Steve, hello. And, Steve, good to hear you again. Thanks. Earlier, you noted health care and flexibles is a weak a bit weak. I believe you said low cold and flu season, although not my household. But I believe you're comping a destocking impact in the prior year quarter. So was behind that weakness? Was it confined to a certain region or maybe parse out your expectations for the second half of the year between pharma and healthcare more broadly and any mix impact we should expect from that category?

Well, listen, Matt, it's a good question. I made a couple of comments earlier. I mean, we saw health care volumes being little weaker in the second quarter. That's correct. I do not wanna read too much into that. The health care category itself is a gem, I think, in our portfolio, and I continue to say that. We need to look at the volume performance over longer periods of time. We did have a bit of a overall weaker flu season. Sorry to hear that it didn't apply to your household. But overall, in the market, apparently, in The US, that is the case. And then there could also be in this quarter a bit of phasing of volumes between quarters. So, again, not to read too much into it. And then, don't forget, we have a pretty broad exposure also in between pharma and medical in the health care piece. Which we also need to take into account. Look. I could think about other things that are positive for the health care business. I mentioned in my prepared comments that you know, we're pretty well positioned to participate there. GLP one was an example where we've made a great win, which also speaks to the ability of a combined company to win in the space. And we will continue to double down on that.

Alright. Thank you so much, Matt.

And our next question comes from the line of Cameron McDonald with A and P. Cameron, please go ahead.

Good morning. Peter. Can I just delve into that comment around the GLP one? And it's good to see you know, you're participating in that, which is got a long-term growth profile. How are you guys thinking about the impact on the other side of your business, particularly around ultra-high processed foods and snacks, confectionery, etcetera, you know, high calorific food consumption in an era where we have this explosion in GLP one use. And how much of that is gonna be a structural headwind for that 60% of the business that's exposed to nutrition.

Yeah. It's an excellent question, Cameron. I'm actually quite glad that you brought that up. Because it comes back over and over again, GLP one, and we're spending a bit of time on that too. Look. Let me structure my comments. I by, first of all, saying, you know, everything that makes people more healthy is a good thing. So we are we're supportive of that, and we see that trend very clearly. We're supportive of that, and we're thinking about what it means our company, how we can best respond to it. But it's a good thing. Now we do have an exposure to the health care industry as we just discussed. And, therefore, we can participate in it. Right? So that's very clearly said and clearly understood. Now your question is a little different. You say, well, turn back to all the other categories that you're supporting in food and beverage. Help me understand what the impact is there. And then look. I will go back to some standard conclusions here. Where we have you know, more unhealthy categories where we supply packaging, those will be impacted. But on the other hand, we also have other categories that are considered to be healthy. And they will increase. If you think about snacking, generally, I think that the trend of snacking is gonna go backwards. It will shift. From unhealthy to more healthy, categories. And there's examples in the market where that happens. Now the good news is that Amcor is a broad a very broad-based company with a broad participation across many categories. And therefore, what you see what we are expecting to see is that that's a shift. categories. In volumes between from unhealthy to more healthy And, therefore, were somewhat robust to that trend, and we think that we can participate well in it. Now customers that's the last comment that I may wanna make there. Of course, thinking about that very carefully. And we've seen these trends before or similar trends before and it has led to an innovation. Where customers are leading through these impacts and innovating through those impacts. To support their business and to reinvent their businesses. And this is where, again, Amcor is pretty well positioned to help our customers do that. Through our innovation capabilities and, again, the broad exposure that we have to different categories So overall, you know, I think we're pretty robust. I don't think that that creates a structural headwind for us. But we're very much aligning ourselves with the impact At this point in time, it has been very moderate. From a GLP one perspective.

Alright. Thank you so much for the question.

And our next question comes from the line of Michael Roxland with Truist. Michael, please go ahead.

Yeah. Thanks, Peter, Steve, Tracey for taking my questions. And, Steve, I look forward to working with you again. I just wanted to follow-up on George's question. Given that synergies seem to be more weighted to rigid, should we expect operating leverage to be relatively muted EBITDA margins to be relatively flat year on year and flexible barring recovery in volumes.

Hey, Michael. It's Steve. I that if you're just purely looking at maybe the second half of this fiscal year, probably not a lot of natural movement in margins. But if you take a multiyear view, which we certainly are, relative to the synergy capture, given the revenue synergy commitments, given the operational improvement commitments, actually margin improvement on a multiyear basis could be spread across both segments quite nicely. It's more of a short-term phenomenon, I think, Michael, relative to where the synergy capture is here in fiscal 2026.

Alright. Thank you, Michael.

Our next question comes from the line of Keith Chau with MST Marquee. Keith, please go ahead.

Hi, gents. Thanks for taking my question. Peter, I just wanna go back to the comment around recently renegotiated customer contracts, and I think Steve you mentioned better contract returns, better pricing, and more volume commitment. So it sounds like, you know, clearly, all three factors are positive. I'm just wondering what's happened in the past that has meant that you've been able to get these improvements? Has it been you know, a bit of slippage in customer commitments that you're clawing back? Ultimately, I'm keen to understand how you've been able to do this and whether there is any cost associated with these renegotiated customer contracts. Thank you.

Yeah, Keith. I'll be able to take that. I don't think there's any cost associated to renegotiating the contract. Just to give you a little more color, you know, there were two angles to it. One was we were operating, particularly in the beverage side, in an environment with very low volumes. And the renegotiated outcomes have given us a bit more of line of sight of the volumes going forward and have stabilized in supported the volume outlook going forward. So that's one The other element was just simply in some of those contracts going back and covering the basis of inflation recovery. Which in some cases, you know, we have a reason to do. And that that has also been successful. So between those two things, know, we get some more inflation support and offset if you want. And then we get a better line of sight, and we're a little more confident about volume outlook going forward.

Alright. Thank you so much, Keith.

And our next question comes from the line of Nathan Reilly with UBS. Nathan, please go ahead.

Morning, gents. Just a very quick question about your capital or CapEx budget. I think you spoke to $850 million to $900 million for the year. Can you just give us an update in terms of where you're focusing that investment, particularly with respect to some of your growth investments? Just keen to understand how that might impact volumes on medium-term basis going forward.

Yes, Nathan, it's Steve. I can touch on that. We do see line of sight into the $850 million, $900 million range for the year. And as you would expect, a lot of that beyond just traditional maintenance CapEx will be in our focus market categories. And so we'll invest for growth there, as Peter was mentioning earlier, so into those markets where there's opportunity for differentiation. So I'd say we weight our CapEx on our focus market categories just broadly.

Alright. Thank you so much, Nathan.

And our next question comes from the line of John Purtell with Macquarie. John, please go ahead.

Good day, Peter and Steve. Congrats on the new role, Steve. Steve, you've obviously got a lot of experience in the packaging space and also with acquisitions. Know, I know it's early days, but I'd be interested in your perspectives on the synergy opportunity with Berry, and also how you see plastic versus other substrates and some of the dynamics there.

Yeah. Thanks for that, John. And I will tell you, it has been an honor to be here for the last three months. And this is an incredibly capable global consumer packaging company. I've just been so positive in terms of just raw capabilities, the global acumen, and the very distributed nature of the product categories that we participate in, the market categories we participate in, the synergy capture momentum here is quite exceptional, and it's incredibly well done. The teams that are in place, dedicated, The tracking is outstanding. The commitment to putting money to work thoughtfully that drives synergy capture is very noteworthy, and it shows in the results. It shows in the confidence in the two six sixty. It showed in the confidence to the multiyear. Certainly, relative to substrates and the like, I spent a lot of time in fiber-based packaging, as you know, and it's a fit for purpose business. It has a fit. It has a purpose. That suits those markets well where it has specific opportunities to be utilized effectively. As you know, rigid and flexible packaging, particularly on a global scale, has a right to win and a fit for purpose that is very broad and very much aligned with the day-to-day life of the consumer. I think we're just truly uniquely positioned as a company that globally literally is in the day-to-day life of the consumer, and it's great to be here. So thank you for asking that, John.

Great. Thank you, John.

And ladies and gentlemen, John is our final caller today. We are well over our one-hour meeting duration. So at this point, I will now turn the call back over to management for closing remarks.

Yes. Thanks, operator. And look, everybody, thank you for joining us. And we're certainly looking forward to the opportunity to sit down with you over

Great. Thank you so much. And ladies and gentlemen, that does conclude today's conference call. Again, thanks for joining, and you may now disconnect.