Amcor faces risks from softening consumer demand, customer order volatility, higher labor costs, geopolitical tensions, inflation, customer destocking, raw material price fluctuations, and supply shortages. International operations, labor disputes, climate change, cybersecurity, rising interest rates, potential goodwill write-downs, and litigation (including environmental and tax-related issues in Brazil) also pose risks. The company's liquidity is dependent on operating cash flow, borrowings, and debt/equity issuances.
Financial Upside
Amcor expects improved performance from sequential volume increases, cost initiatives, and cost base adjustments. The 2023 Restructuring Plan, while costly, is expected to yield annualized pre-tax benefits of $50 million by the end of fiscal year 2025. The company's investment-grade credit ratings should allow for favorable debt issuance terms. Sales volume improvements and cost savings initiatives are expected to increase gross profit and net income.
