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Amcor (ASX:AMC) share price drops 4% on CEO retirement

The retirement of the CEO of Amcor (ASX: AMC) has been announced, sending the Amcor share price down by 4%.

Amcor describes itself as the global leader in developing and producing responsible packaging for food, beverage and healthcare (including medical & pharmaceuticals). The company is focused on making packaging that is increasingly lighter weight, recyclable and reusable, and made using an increasing amount of recycled content.

CEO to leave

Ron Delia has been Amcor’s CEO for nine years, but his tenure is nearly over. He told the board of directors that his decision to retire was based on health reasons.

The board has appointed Peter Konieczny, the current chief commercial officer and a long-standing member of the company’s global management team, as the interim CEO.

Mr Delia will provide support in an advisory role until 30 September 2024 to facilitate the transition.

The board is conducting a thorough search process to identify a permanent successor for the CEO role, which will include and external candidates. The new CEO could have an important influence on the Amcor share price.

Comments

Mr Delia said:

It has been a privilege to serve as Amcor CEO for the last nine years and to work alongside such a committed, talented and experienced team. Together, we have created a stronger global packaging leader and laid the foundations for an exciting future as the business has substantial potential and is building near-term momentum.

I have complete confidence in the strength and capabilities of Amcor’s leadership team, and Peter will do an outstanding job as Interim CEO during the transition period. I would like to thank my Amcor colleagues around the world and the Board of Directors for many years of invaluable collaboration and support.

Guidance reaffirmed

With this announcement, Amcor reaffirmed its FY24 guidance.

It is expecting to report adjusted profit / earnings per share (EPS) of between $0.67 to $0.71.

The business is also predicting adjusted free cash flow of between $850 million to $950 million, representing “solid growth” compared to FY23.

It also said it’s expecting to allocate around $70 million towards a share buyback as part of the program, which was announced in FY23.

I think Amcor shares can be an attractive source of dividends, though I’m not sure how much the Amcor share price will be able to grow in the next five years.

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