Packaging the world – Amcor | Summer Series

Bryce: [00:00:17] Welcome to the Equity Mates Summer Series, proudly supported by Sharesies over 12 episodes where diving into some of the most exciting, interesting and well known companies from Australia and the U.S.. Each episode we're also joined by an expert to help us unpack the key metrics to look at the bull case and the bear case for each company. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you? 

Alec: [00:00:43] I'm very good, Bryce. I am glad to be back. Yes, we have spoken about some fascinating companies, some companies that you've called boring. This one is going to straddle the line for you because they make their money selling cardboard boxes and packaging, but they sell a lot into the retail space. And we know how much we love retail. 

Bryce: [00:01:04] Love retail. I also love global leaders from our backyard Australian backyard and that's what we have here today with Amcor. We're digging into Amcor listed on the Australian Stock Exchange and our expert in the second half of the episode is Anna Milne from Wilson Asset Management to help us through it. 

Alec: [00:01:22] Let's be clear, it's also listed on the New York Stock Exchange dual listing. 

Bryce: [00:01:25] There you go. Love to see that. As we said, Equity Mates summer Sharesies proudly supported by shares who have an incredible platform that allows you to invest the way you like. Choose from over 8000 companies and exchange traded funds on the Australian market, the US market and New Zealand share market. And that's. 

Alec: [00:01:43] You know, that means Bryce. 

Bryce: [00:01:44] What's that? 

Alec: [00:01:44] What's that? It means you could buy Amcor in Australia and Amcor in the US on Sharesies. 

Bryce: [00:01:49] Sure you could. And not only that Ren, but you could also invest into Amcor with their auto invest feature which truly allows you to execute dollar cost averaging into the three markets that we spoke about Australia, US and New Zealand. Just get it going.

Alec: [00:02:04] Just get it going. There is a promo code. It's not specific to Equity Mates. There's no way to track how many conversions we have and we don't get paid if someone uses it, but it does give you ten bucks, so we're going to share it with you. The promo code is GROW when you sign up to the Sharesies platform, if you use it, you'll get ten bucks in your account. Promotion T&Cs apply. 

Bryce: [00:02:22] Head to sharesies.com.au to learn more or download the Sharesies app and as a reminder we are licenced but we are not aware of your personal circumstances. All information on the show is for education and entertainment purposes only. Any advice is general advice. 

Alec: [00:02:36] So when I was trying to get a try and get in and get you to do it, but also I can do it. All right, Bryce. We are starting these episodes with company in a sentence. Yeah, Amcor in a sentence.

Bryce: [00:02:48] Amcor makes packaging for the stuff you buy in supermarkets. 

Alec: [00:02:52] Not bad, that's basically it. Also the stuff you buy in pharmacies and retail locations. 

Bryce: [00:03:01] Food, health care, beverages, you name it, they're in it. Founded in Australia in 1860, it is now one of the world's largest packaging producers operating in over 220 sites across 43 countries and employing 44,000 people. 

Alec: [00:03:21] Now we set its jewel listed in the US and Australia. An important note the stock tickers are different in Australia. AMC, I assume that was taken by AMC Cinemas over in the States. 

Bryce: [00:03:31] I was just going to say, I am saying. 

Alec: [00:03:33] Do not get that mixed up. You want ASX:AMC. You do not want that. 

Bryce: [00:03:39] You don't you don't want to look at the five year chart for AMC Entertainment. 

Alec: [00:03:43] Not one New York Stock Exchange. AMC, you want the New York Stock Exchange? AMC R for Ren. Remember that. Or just R for remember anyway about a 17 billion US dollar market cap. It's a giant it's I mean it anvisa sort of the two to box company started in Australia taking on the world love it they also this isn't alleged because they admitted to it they also colluded to fix prices maybe like 20 years ago. 

Bryce: [00:04:17] Well, we'll leave that there. But yes, they are big in consumer packaging. The consumer end market, you know, us in supermarkets, in health in health food shops, 95%, over 95% of sales goes towards packaging in those markets. So think about food, Pepsi, Coca-Cola, Nestlé, Mondelez, Unilever, all use Amcor as packaging Johnson and Johnson. Colgate, you name it. Kimberly-Clark, Kimberly-Clark. 

Alec: [00:04:48] GSK. 

Bryce: [00:04:50] P&G,all the big consumer brands. 

Alec: [00:04:53] Say Mondelez. 

Bryce: [00:04:54] I do.

Alec: [00:04:54] And Unilever. Yes. And are you even listening? Yeah. So I was actually just fact checking. It was about 20 years ago that they did that price fixing and it was about 20 years ago. 

Bryce: [00:05:04] Nice, good fact check. So they are massive players within the consumer packaging for food, beverages and health care and their business is kind of split in two. 

Alec: [00:05:16] Two segments that they split into flexible packaging and rigid plastic Packaging. So Flexibles is that big business that did 2020 to us $11.3 billion in sales. It has 170 plants in 39 countries, 38,000 employees, and it produces the flexible packaging, folding cartons for food, beverage, pharmaceutical, medical, home, personal care, other products. Think of things like chip packet, yet pet food packets just like walked down a supermarket aisle. Not the fresh food section, not the meat section. Just look in the aisles and you're surrounded by Amcor products. 

Bryce: [00:06:01] There are, there is flexible packaging everywhere. 

Alec: [00:06:04] Yeah. So let's we'll get to that because the big conversation here is. So we will get to that. Yes. So that's the flexibles. That's the bigger business. It does 11.2 billion in revenue. The other one is rigid plastic. It does 3.4 billion. 50 plants in 11 countries, 6000 employees. It's still one of the world's largest suppliers of plastic containers. And as the name suggests, whether one business is flexible, this one is rigid. So you're thinking here more like your water bottles and stuff like that? Yeah, but it's just packaging. It's like, hey, have you got a product that you want to put in something? Go to Amcor and they'll design what you need.

Bryce: [00:06:45] Great business. 

Alec: [00:06:46] Great business there. Team of package ologist will get your stuff in. 

Bryce: [00:06:52] My time in Woollies I did spend some time in our packaging team and the science that goes into it is, is, is astonishing. So it would be interesting to get some insight into how they go about it, but ran some key numbers, $18 billion US market cap, they're actually up 1% year to date. Inflation proof, inflation proof. 

Alec: [00:07:15] Wow, all they have bargaining power and they can pass those costs on.

Bryce: [00:07:19] That would probably be it. They are up 10% for the past five years. So huge growth, definitely underperforming the index over the Last five years. 

Alec: [00:07:33] They would be a company that is just just exposed to like global GDP at this point. It's like, sorry, but if the global consumer is going to buy more stuff, they're probably going to end up buying more Amcor packaging. Yeah.

Bryce: [00:07:44] Well I'm keen to hear what is the bull case outside of just being a GDP tracker. 

Alec: [00:07:50] I mean, without. 

Bryce: [00:07:51] From and. 

Alec: [00:07:51] Without trying to jump the gun, what it's going to be maybe a valuation by given the market, but it's going to be a bit of technology. By the way, this is May channelling an Amcor CEO though the way that we deal with the sustainability challenges of packaging is new and better packaging. Amcor have the balance sheet to invest in R&D to deliver sustainable and healthy and cost efficient and environmentally safe packaging that none of our competitors can do. We're investing $1,000,000,000 a year on the next generation of packaging and we're going to blow our competitors out of the water doing it. 

Bryce: [00:08:29] Next question. 

Alec: [00:08:30] You never say packaging like this before. 

Bryce: [00:08:33] Revenue of 14 and a half billion up from 9.1 billion five years ago. Revenues increased almost 60% in the past five years. As we said, most of that revenue is generated from that flexible side of the business. 77% and almost half of their revenue comes from markets in North America, where, as you would expect, a lot of those consumer markets are. [00:08:56][22.9]

Alec: [00:08:56] It's so it's a global company, but it hasn't forgotten its Australian roots. Yes. So it splits out geographically. North America, 48% of its revenue, Western Europe, 22% of its revenue. Emerging markets. Now that in cups encapsulates a lot of the world, yeah, 27%, but it still splits out Australia and New Zealand. 3% of total revenue still calling Australia. [00:09:21][24.6]

Bryce: [00:09:21] I love to say it has a healthy profit of $805 million. It was 564 five years ago. So they've increased profit to the tune of 43% over the past five years. So it's just one of those big companies that keeps churning out. Yeah. 

Alec: [00:09:38] Now we're talking about where the companies see their future. Amcor sees a future of more and better packaging filling out landfills. Yes. And our recycling bins now. So they've identified a few priority segments where they think they have a competitive advantage and leadership protein, health care, premium coffee, pet food. And this is an interesting one that I haven't had a lot to do with hot fill beverages coffee, but like, yeah, but I think it's ones where you feel hot and then it gets chilled. I don't really know.

Bryce: [00:10:13] But in the production process, look at the photo.

Alec: [00:10:15] They've got the I know this isn't great on a podcast, but they've got a Gatorade bottle gator. 

Bryce: [00:10:18] Rights or maybe. 

Alec: [00:10:19] Like a. When's a Gatorade getting hot? 

Bryce: [00:10:22] Maybe in the production process.

Alec: [00:10:23] Is it isn't it just, like, cordial? Not if you few. Sorry. All right. You know.

Bryce: [00:10:30] Like, I wouldn't be surprised if it's. If that has hate involved in creating Gator.

Alec: [00:10:35] Do you know why it's called Gator? Right. It started the Florida Gators. The college sports team. They made it for them. Oh, they go to eight. 

Bryce: [00:10:44] They go. 

Alec: [00:10:45] Yeah. 

Bryce: [00:10:46] Well, you did mention sustainability. And this. 

Alec: [00:10:48] Is that it is a. 

Bryce: [00:10:49] Big it is a big challenge for an industry of consumable packaging. So. So where does Amcor sit here? 

Alec: [00:10:55] The fundamental challenge when it comes to packaging is packaging waste. They food waste and you'll see people line up on both sides of this. Amcor will say food waste is more environmentally damaging than packaging waste. If our packaging can extend the life of food and reduce food waste, then there's a net benefit to the environment by not having that food go to waste. And that makes sense. It's also a net benefit to people just having more food to be consumed. But you know, when food breaks down in landfill, it releases methane. And that's got like 26 times the global warming potential of carbon dioxide like you. They're not wrong. But on the other side, there's a lot of people that look at just the state of packaging now. You know, read cycle collapsed earlier this year. We did an episode on that on the dive that people should go and listen to and they say plastic packaging is out of control. Way too much of it isn't recyclable through commercial, scalable municipal channels, and we need to do something about it. And so that's really the tension. 

Bryce: [00:12:03] Does this mean that we're going to see less packaging or is is it just kind of a continued tension where Amcor say our packaging is just going to get better, technology is going to mean we can to your point, food's going to last longer, less food waste. That's where we're going to play and that's where we're going to stay. 

Alec: [00:12:21] Yeah, I think it's when I was channelling the Amcor say earlier when it's like technology, you know, new packaging, different packaging, better packaging. That's going to be the catchcry. Mm hmm. There's so much greenwashing in this space. It frustrates me so much. But they're not wrong, I think that is the important thing. Two things can be true at the same time. Reducing food waste is important, and there's a lot of greenwashing when it comes to sustainability in packaging. We pulled out some of the ESG presentations and some of the numbers are pretty startling. 30% of food is wasted globally. 

Bryce: [00:12:55] Yeah, it's nuts. 

Alec: [00:12:56] Yeah. Food waste accounts for 8% of global greenhouse gas emissions. And if if it were a country, food waste would be third. Wow. For greenhouse gas emissions. Yeah. I assume China and the US. The only toilet item. Wow. Wow. Yeah. So, like, the thing that we don't really say is a lot of food waste gets wasted after we buy it and we leave it in the fridge for too long. Oh, we forget about it in the pantry. No quality of packaging is going to stop that. 

Bryce: [00:13:26] Can improve it.

Alec: [00:13:27] Could improve it. But you know that stuff that you've left in the crisper for six months, it's sorry. Yeah. And on the other side, another big bucket of food waste is at the farm gate, like stuff that doesn't get accepted and so it gets wasted at farm. Also, the best packaging in the world is going to solve that. Look, we're pretty complex as a species. We can work and walk and chew gum at the same time. We can solve food waste and improve and reduce packaging. Yes. Yeah, but not if I am right now.

Bryce: [00:13:57] Amcor is listed on the ASX. The stock ticker is AMC and you can access the Australian market, the US market and New Zealand markets on the Sharesies platform with no investment minimum, you can buy shares or portions of shares on the Sharesies platform from just one sense, the Sharesies platform makes investing easy. All investing involves risk. This is not a recommendation and you should perform your own research priorities and CS apply. Now we're going to take a very quick break and we will be right back to discuss it with Anna Milne, equity analyst at Wilson Asset Management. One, two, three. Bring it back.

Alec: [00:14:35] Hey, it's another delightful day here in vacation land. 

Bryce: [00:14:38] All right, Ren we've just spent 20 minutes or so rambling about Amcor and our thoughts on it, but I'm excited to welcome an expert to help us through the bull case, the bear case. What are some of the key metrics? So it is our pleasure to welcome Anna Milne, equity analyst at Wilson Asset Management and responsible for the WAM latest portfolio. ASX is WAM that's the ticker. Anna, welcome. 

Anna: [00:15:01] Thank you. Thanks for having me.

Alec: [00:15:02] We've spoken a little bit about what the company is, what it does, but we really want to talk about the company as an investment now and we want to start with the metrics that matter for this company. You know, Bryce and I have a retail background and in the world of retail, it's sales per square metre, it's same store sales. And so let's start there for Amcor. What metrics matter and perhaps just as importantly, what metrics don't when analysing this company. 

Anna: [00:15:28] Yeah, maybe I'll start with the latter process of elimination. What doesn't matter. And then we can elaborate on what does matter. So first of all, it's a mature company generating billions of dollars in cash flows. So you don't have to be looking at your revenue multiples, you don't have to be looking at your terms. You don't have to look at a revenue forecast in five and ten years time just to get some kind of finger in the air. Guidance on how you should value the thing. So of more importance is really the traditional metrics. So from a fundamental analysis perspective, number one, free cash flow, free cash flow is king. So free cash flow is your earnings less your CapEx and your working capital. So basically, you're putting in new production lines on your building, new facilities, your accounts receivable payables, all those little bits that move around. But long story short as how much money you have in the bank from your operations at the end of the period. So that's free cash flow. And the second metric is just a metric could use for all companies is your revenues, your earnings and therefore your margins. You have to be a little bit careful with Amcor's margins, a lot of their costs variable, they go up and down all the time. So that's the likes of polymers and just all their plastic type inputs and they have passed through mechanisms to their customers so they don't take on that risk, but it does distort their margin profile. So you kind of have to strip that out and work out for every $1 of revenue. Are they becoming more efficient at generating earnings? 

Bryce: [00:16:55] We did notice that they were up 1% year to date or thereabouts, and we did speak about the fact that they would have passed on all of their input costs through to customers. And so that makes a bit of sense. 

Anna: [00:17:05] Yes, exactly. And it occurs with a lag as well. So it's not perfect. And in the last few years we've had rising input costs, but it's as they fall, it works the other way as well. So you do definitely have to watch that.

Alec: [00:17:19] So you mentioned there you look at those numbers and you make an assessment, are they getting more efficient over time? Are they getting more efficient over time? 

Anna: [00:17:28] It's an interesting point. I think it is very dependent on the operating environment that they are in because there's a lot of operating leverage in a business like this and there are also a lot of mix impacts as well. So we'll go into it later. But as you move into more sustainable packaging, you're taking a huge problem off your customers hands and so you can charge a lot more for ultimately the same product if you are solving some of the sustainability issues. So those are probably the fundamental analysis metrics that we look at. And then from a valuation perspective, it's the usual the pays, the average does so for every $1 of earnings, how much are you willing to pay?

Bryce: [00:18:08] So for those sitting at home and thinking about, you know, making their own investment checklists or frameworks or whatever it is, you mentioned that you're looking at this through the lens of it's now an established company. It's not the growth company. So why is cash flow an important metric amongst all the others that you could look at? Why? Why cash flow?

Anna: [00:18:27] Cash flow is ultimately the lifeblood of the business and I think Amcor does a really good job of communicating this shareholder value creation model. They say there are four key pillars, so they are guiding to 1 to 1.1 billion of cash flow this year and within that there are four things they spend it on. It's the first one is, as we've said, CapEx. So building new factories, putting new lines on to generate that organic growth. The second one is acquisitions for inorganic growth and that is very active in the acquisition space. Whether that be transformative or more Boltons that just complement their existing strategies. The third pillar is share buybacks. They've actually bought back around 8% of their shares on issue over the last three years and that is pretty high. And so on an earnings basis that you can assume doesn't change a lot, the proportion each shareholder gets is that much bigger when there's less shares on issue. So that's massively value accretive for shareholders. And then the last point is the dividend yield. And so they say with those four pillars being kept. Fix acquisitions, share buybacks and dividends that would generate 5 to 10% EPS growth or earnings growth every year, as well as a dividend yield of 4 to 5 per. So that is 10 to 15% value for shareholders every year. [00:19:49][81.8]

Alec: [00:19:49] Yeah, the Americans must be loving it that there's an Australian company on there now on their exchange paying 4% dividend. [00:19:56][6.3]

Anna: [00:19:58] No, that's not completely different mindset. 

Alec: [00:20:02] So we want to, I guess, get the two sides of the story that the bull case in the bear case and really understand I guess what needs to be true for both. So, you know, we're optimistic people here. So let's start with the bull case. What is it? And, you know, we're all about building sustainable competitive advantages. That's what we're looking for with these companies. So where is Amcor building that sustainable competitive advantage? [00:20:24][22.3]

Anna: [00:20:25] So given that industries Amcor operates in majority food and beverage and health care, the range of outcomes that they can experience in any kind of economic environment is pretty narrow. Plus 5 to -5. So even if we say, you know, earnings are down, they're not down 20%, they're not down 30%, are down 2% or 3%. When you compare that to the likes of high risk, high growth cyclical names, or it could be plus 50%, -50%, you name it, it's a possible outcome. So with that in mind, to generate a bull scenario, you want earnings to beat expectations and you also need valuations to go higher. And because that earnings is a little bit limited and how far it can go, a lot of it actually comes down to the sentiment and the valuation. And in my fund we're really focussed on three key factors the macro environment, the fundamentals and the sentiment. It's actually a little bit counterintuitive, but the bull case for Amcor might actually be a slight softening in the macro environment because if, if the economy slows, we eat more at home, we go out less and there are a lot more leverage to at home consumption than they are out of home consumption. And in the GFC this exact thing happened and it took four years post GFC for the at home versus out-of-home to return to more normal levels. So they really benefited during that time. From a macro perspective, it's not actually, you know, economic growth continuing to grow. That will actually be the best case scenario for them, which is quite interesting. And then from a fundamental perspective for their own companies initiatives with our boating a sustainable competitive advantage, they have four main pillars, so that is Nespresso coffee capsules. And we can probably have the debate. I'd like to hear your opinions to discuss below. 

Alec: [00:22:21] On the quality of coffee or the sustainability of coffee capsules

Anna: [00:22:25] I mean, they both come into consideration, but I was actually thinking more if we are heading into a soft economic environment, do people trade down from a 450 or maybe maybe it's a five $50 latte to an espresso, or do they go from an espresso to an instant one question?

Alec: [00:22:42] Yeah, good question. 

Anna: [00:22:43] Always the net change. 

Alec: [00:22:44] I think if people are listening to an investing podcast, surely they've done the maths on a dollar 50 and they realise that even buying like a top of the line Breville coffee machine makes sense. The payback is like a year. Yeah, maybe two years, depending on how. 

Anna: [00:22:59] Much they're already using the Nespresso.

Alec: [00:23:01] I hope so. 

Anna: [00:23:04] Well, that is one of the growth pillars. The second one is pet food. Yeah, pets have been a massive trend of last few years. I've succumbed to it with a two year old cocker spaniel.

Alec: [00:23:14] Okay. I like hearing the age of people's pets because you can say, like where? Relative to clover. Yeah, exactly. Yeah, yeah, yeah. 

Anna: [00:23:25] The third category is protein and the fourth is health care. So all of these have large addressable markets growing above GDP or general economic growth. And a high margin. 

Alec: [00:23:36] We pulled out from one of their investor presentations those four categories. They said protein, health care, premium coffee and pet food, which all makes sense. They also said hot fill beverage. And the photo is a photo of a Gatorade bottle. And we have no idea what that means. 

Anna: [00:23:52] So I'm not an expert. Yeah, I'll say that to start. But you can either the production process will either be hot or be cold. And Gatorade bottles are done in a hot filled process. So there's a mould and the the inputs poured with. 

Alec: [00:24:09] Oh, okay. Yeah, okay. That makes so much more sense. So the bottle like the plastic is hot. 

Anna: [00:24:14] Exactly. 

Alec: [00:24:15] And it's like K2, right? It's not hot. Glad you're here, because that makes it so much worse. 

Anna: [00:24:20] You go. So those are the four key categories. Emerging markets are also a really big opportunity, just as, you know, incomes, populations moving to more sophisticated retail out. It's from the likes of wet markets. So that really plays into that protein theme packaging red meat, for example. And the other upside could come from a creative M&A I and the US dollar weakening. So again, because of the range of earnings outcomes being relatively limited sentiment, is that much more of an important driver? So in the scenario that we're talking about, we're saying economic growth is going to slow. And when thinking about the earnings multiple, that would be applied in that scenario. You'd think it would be a risk off scenario and as well in a risk off environment, which means investors are flooding to those safety stocks. So that would be the higher earnings and the higher valuation to get your share price. 

Bryce: [00:25:15] Love it. Well, let's flip the coin. What's the downside? What's the bear case if things don't pan out or what are the red flags that we should be looking for when it comes to a company like AM cool. 

Anna: [00:25:25] Yeah. The Bear case is clearly the opposite. So earnings below expectations and a lower valuation to get you a lower times. A lower. Yes. Share price. Yeah. Let's not think about that too much because the negative times are negative as opposed to. So using the same framework or the macro, the fundamental in the sentiment. The worst case scenario would be if we entered a deep global recession. Volumes are soft across the board regardless of the eating out, eating in and competitors would have stopped discounting. That would be a bad scenario because at lower volumes your lower price equals lower revenues. Continued strength in the US dollar also hurts Amcor quite materially and both these factors are negative for earnings. And then the opposite is also true for the fundamentals of those growth. Pillars in emerging markets don't come off as the market expects that would be negative. And then again, the fun, the sentiment is the bigger driver really here. And if the slowdown in growth is so severe that central banks have to conclude their hiking cycle earlier than expected, Mark, it's going to be all on and people don't want to own these defensive names when we're back in a bull market. 

Alec: [00:26:37] Those unprofitable textbooks.

Anna: [00:26:39] Exactly. So, yeah, that would be a lower earnings on a lower earnings multiple. 

Bryce: [00:26:43] Yeah. Nice. 

Alec: [00:26:43] You mentioned competitors there. I don't know how competitive the the packaging world is, how much new innovations coming through, but there are a couple of other big names. You know, Vizzy is another one that sort of came out of Australia and is taking on the world. How do you think about Amcor relative to its competitive set. 

Anna: [00:27:03] That clearly the market leader. So the number one inflexible, flexible and rigid packaging packaging in North America, the number one in flexible packaging in Europe, Asia-Pacific and LatAm and the number one globally in healthcare packaging. So it's a pretty impressive position to be in and they should be at the forefront of price and innovation. Yeah. 

Alec: [00:27:26] The way we described it earlier in this episode is if you've walked into a supermarket aisle, you've been surrounded by Amcor. Exactly. Yeah. 

Anna: [00:27:33] Exactly.

Bryce: [00:27:33] We've had a not a lot of number ones. The series, number one, non-alcoholic beverages, Coke, number one, apparel, Nike, number one, national storage. 

Alec: [00:27:43] It's true. Storage would be an online course. 

Bryce: [00:27:52] Anyway. So to close out to close out. And we want to understand the long term view here. And we finished our sort of conversation around sustainability. And so that's got to factor in your thinking when it comes to Amcor, what does the next ten years or what is Amcor look like in ten years? And if you can speak to the sustainability side, yeah, that'd be great. [00:28:15][23.3]

Anna: [00:28:16] So in ten years we're closing in on 2033 and while this isn't a podcast on sustainability, it is clearly of utmost importance to Amcor's financial future over the long term. And it's a very different discussion talking about the long term view of Amcor versus the short term which is so focussed on the economic cycle and 2033 sustainability targets would be that much further progressed. They better be. And it's just clearly unacceptable the amount of non-recyclable packaging that ends up in landfill every day. And I think the onus is on us as consumers to make good decisions about consumption and disposal of waste. It's on companies to package their goods responsibly. It's on waste companies and governments to provide the infrastructure. But the most upstream participant in this discussion is the packaging producers being Amcor, and there will always be a role for packaging to extend the shelf life of food and health care products, to protect consumers and to provide marketing to promote brands. But clearly a lot more progress needs to be made on the ability to reuse recycled content and packaging and the ability to then recycle the packaging. So Amcor is currently targeting 30% recycled materials by 2030 and that is a recent goal that's been publicised in the last few months, which is great and they are market leading innovators as we said that number one. And so I'm. Categories globally, states should be at the forefront of change, but if they do execute on this, they'll gain further market share. They'll be able to charge what they want and ultimately generate earnings well above expectations over the long term. I think we should think about Amcor overall as an investment to put in the bottom drawer. It's a steady earnings compounder. It's not your ten bagger that you keep up at night excited about, but you also don't keep up at night worrying about how it's going to go. And when you're in my position where you're helping run a portfolio of stocks, it's a great one to have in your arsenal when you're wanting to move your portfolio more defensive. So it's a really good tool to have a stock like Amcor in your portfolio and definitely worth doing the work on. As a retail investor, if you're wanting something that's maybe offset some of your more spicy things that you can rely on for that 10 to 15% return year after year. 

Bryce: [00:30:27] Yeah, awesome. Well, we thank you so much for for coming in and helping us unpack Amcor today. It's a really interesting company and it's great to see some world leaders in our backyard. So yeah, love it. Thank you so much. 

Anna: [00:30:42] Thanks for having me. 

Alec: [00:30:43] Thank you. 

Bryce: [00:30:44] Well, that brings us to the end of today's episode. A huge shout out to Sharesies for sponsoring the Equity Mates Summer Series. You can download the Sharesies today or head to sharesies.com.au to find out more information. If you want to sign up you can use the code GROW in Sharesies. These will put $10 into your account to get you started investing. So we'll leave it there and we'll pick it up next week. 

Alec: [00:31:07] Sounds good.