BERY - Earnings call transcript Q4 2021 | Berry Global Group, Inc.

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Operator

Good day, and thank you for standing by, and welcome to the Berry Global earnings call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Dustin Stilwell. Please go ahead.

Dustin Stilwell

Thank you, and good morning, everyone. Fiscal Earnings Fourth Berry's to Quarter Call. XXXX Welcome refer fourth quarter. fiscal this call, as the will we XXXX Throughout quarter to the September

Before replay have berryglobal.com Relations I on we discussion website this to call, at to today's our be begin that call, section. available After mention our a help would guide Investor our also a under provided like we our morning. slide will presentation website, our on

and Chief Joining Officer, Chief me Salmon; the Officer, from Financial Berry's Miles. Executive are Mark Tom company

Following [Operator Mark's comments question-and-answer Tom today, and we'll Instructions]. a have session.

turn financial SEC. and and, to filings or the the annual implied from those of call in including company risks report and to earnings investor As condition are to will differences measures the a forward-looking Form in statements. referenced expectations The statements and expressed operations of non-GAAP like could upon not over on most Slide our our discussing involve measures. results CEO, or that now limited on measures And our and the of reconciliation future between release on X, of XX-K beliefs reminder during a differ the based impacting Salmon. Tom I'd in this website. These be call, statements financial financial materially uncertainties a finally, earnings but made those the release, forward-looking may concerning be actual management's number certain with GAAP we directly and and described presentation GAAP Berry's statements. therefore, Therefore, comparable are made company financial the some non-GAAP today our And available other events

Thomas Salmon

us and Dustin. being for today. Welcome, you, you thank Thank everyone, with

morning laid on X, Let's for takeaways our out today. begin we've key where this Slide

solid unprecedented and history, flow in challenges were free supply spite were of we faced for revenues First, record a September world. any and inflation was in results period our as a company's cash quarter, across the for fiscal record quarter our fourth any chain

of Berry per fiscal were of For the annual all earnings XX%, year, respectively. organic X% achieved the X% XXXX adjusted growth which volumes X records, top XXXX grew segments organic we volume as and Revenues fiscal share, year. with in both by XX% outstanding year another delivering strong during was on and

teams continued have Our diverse chain to management. supply challenges results and an we've Berry's inflation, challenges exceptional growth the and robust the deliver the strategic today. worked ability sustainable while reminder demonstrating diligently focused of remain through by created you offset to driving see is global a labor portfolio long-term and resilience portfolio on COVID, built

which are before, beyond. stated top below in was organic and X in And of leverage we've strong the The our cash reduce our commitment a innovation sheet 'XX takeaway focused just and our to since in turn investing of growth on our fiscal improve by will able our ending been in initiatives, strong proud leverage sustainability-led number was base momentum on a that by we've and and capitalizing of say our including growth flow, half stable projects, strong our maintain for second And years, X.Xx X lower. range balance at fiscal earnings Getting EBITDA. a X.Xx. as debt leverage adjusted a beginning we a year anticipate drive to I'm of net result we and us. key year to and a to as Xx lastly, turn operating full the priority company to

key our X, healthy priority. to me on core safety. that's let value is Next, and turn safe and Keeping teammates all #X a Slide our

and to commitment slide, the we minimizing an you managing ongoing safety As have on can see identifying, risk.

pandemic few the our global challenges past across footprint. presented many the years, During

of keeping And while on the took significantly the continued new better industry very pandemic, average has these for protocols Berry And than spite added safety up, challenges in improvement. the we're leadership, global team 'XX, the operating safe. below OSHA Our show our of implemented maintained during each to stepped of proud other challenge, of industry our delivering an X.X. year rate fiscal performance incident X and

an Our on a company, made emphasis our produce. customers has working success. company's on and servicing giving team's safely future and essential the we This optimism supply has better great products of the us ensured us uninterrupted that stronger

to resources we innovation have while our Additionally, bringing that as opportunities can improve lives and footprint. see providing with to provide many initiatives external on you natural to adding commitment are partners industry we ensure a slide, and and carbon the strong to better multiple circularity

to now X. highlights financial Turning the on Slide

and fiscal year September Volumes for a comparison as freight fourth the up cash XX% any record XXXX, cost headwinds previously prior inflation supply remains demand of chain a the top solid, record certain in Throughout pandemic quarter. was in $XXX markets improve. for continued quarter, on was in and as X% material, revenue were our Free labor raw raw well significant which being for off was and a quarterly XXXX. flat, fiscal that at other to experienced experienced coming strong resin, September primary of products challenges. million. increases we flow essentially Overall our For quarter materials,

the inflation the recovered significant inflation XX% cost and you see, inflation record increase of and experienced $X.X quarter the during over can in the fiscal in cost a billion year. XX% level September As of of we of

close our cost historically, their we've well to facilities serve through we given to proximity locations. and positioned, believe committed demonstrated As to customers our scale are passing we in remain inflation our with

the an highlights range Looking earnings, 'XX inside reduction at year year leverage X. Fiscal Slide exceptional along with our record year our was unwavering an targeted financial and revenues of on of strong with some supply heading environment customers each while fiscal commitment in to our fiscal of service businesses year, in 'XX. a all challenging building year through momentum our much into chain

volume volume From more earnings an an per of was increased organic per XX%, operating to up our impressive by share. share a comparable an the perspective, X%, record on a $X.XX by record X% including earnings $X,XXX,XXX,XXX. with EBITDA to showing or segments also Adjusted XX% over X growth and For growth. year, organic increased basis all annual was X% revenue

Additionally, sheet to the I strengthen have we consistent have X dependable quarters reduced net flow ended last and in year balance used target. our our over further billion range cash and mentioned, the leverage free as debt and inside our $X

strategies, world an and Our the year our attention priorities momentum going have employees shown around results strong a exceptional building we another on as delivered into against while result, future. executing the our with on unwavering of

who results financial Mark? Now more in I'll Berry's turn will the call over detail. Mark, review to

Mark Miles

Tom. you, Thank

quarterly for operating of performance Looking year fiscal our X. on the at Slide and X each segments, starting

of such primarily disruptions headwinds industrial supply markets a some market inflation. beverage related to categories attributed which declines food XX% quarter, prices increase in tough mostly modestly Eastern pass-through customers. and in India we Packaging-International had categories the our down, attributed volume markets, modest stronger growth, selling of improvement in flat. From comparisons while volumes and inflation in Consumer developed For from chain modest the delivered in revenue, a as to perspective, quarter Operating lag at emerging recovering EBITDA such the XX% our Regionally, while had experienced and were the and Europe. were growth volume division timing as an to primarily was with essentially foodservice saw very offset

in currency growth organic foreign primary organic XX%, emerging and food, recovering the EBITDA markets For driven the up categories cost translation of by productivity lag offset timing year was as for led volume by X%, industrials. growth, year, volume such improved gains, revenue foodservice inflation. by Operating by including primarily the and X%, and a

our X% from quarter up the pre-pandemic over and supply in through lower of Volumes XXXX. of in were inflation. the the quarter Packaging-North XX% from up revenue chain Next, as division challenges were America result Consumer categories X% was fourth a fourth Volumes of pass-through the certain level the normalizing in COVID. quarter

the and of passing fiscal the EBITDA division cost primarily and very chain Fiscal XX%, of our XX% and the the through Operating the CPNA ago. managing was related and favorable in a to premium wipes, XX% XXXX & Specialties revenue, organic image primarily strength by delivered momentum, strong fiscal of pandemic-driven offset generated compared health foodservice brand that surface for strong appeal growth fiscal and offering and lag health by by comparison beverage and increase driven cost hygiene year the health in by team. while products, primarily hygiene. restaurant organic timing increase quarter year, inflation pass-through attributed represents by year clear we volume $XXX year volume million X%, growth a cups an delivered markets and shops apparel of XX%, recently organic hard and manufacture For for care the 'XX of X% customer's mix and coffee to sustainable care partially ago, pre-pandemic fourth consecutive the On a for and including volume markets clear X% restaurants, organic a Operating increased upon quarter Health, in strong over driven by costs announced pass-through or protection of Slide Continuing continued where inflation year delivered due from growth. challenges. X% and products. building fourth option a are care by level demand productivity. drink strong the year from year EBITDA inflation, in Organic of X, builds operation supply prior offset growth our the XXXX. lids beverage expansion quarter quick-serve demand The the revenue impressive the for decline the grew These building organic the driven offerings. to year improves customer-aligned, volume a we down premium volume volume growth, volumes over million current continued strong X%, was our Fiscal hygiene cup and design in more up to to an our quarter product investments and volumes recovery sustainable on for increasing in foodservice the $XX stores. of efficiencies disinfecting for the the packaging the showcases construction Hygiene, in a customer's clear convenience cup partially was

liner which Volume chain protective along challenges. was primarily our our in comparable we Engineered mix quarter, for fiscal For XX% was COVID-XX product lastly, approximately the divestitures, favorable the pass-through higher revenue partially organic and e-commerce X%. And estimate can with of for in of that volume on was quarter with a to to our $XX in attributed partial higher million the in basis, the Materials primarily business supply the growth films, by inflation by growth than a the was of recovery growth adjusted division along XXXX. offset U.S., related fourth year, driven

full beverage and the year, Operating full example as of EBITDA are strategic yet For performance and lower business X% our economic a areas packaging. the for was such as quarter supply volume growth strong safety timing of Materials year costs over XXXX chain of fiscal challenges. we results Engineered many cycles. as organic food inflation passing fiscal in to The our managing e-commerce continue make related to delivered through investments and and result different lag the proven another of

for As cash year you a our growth nearly and publicly per compounded top-tier have every adjusted earnings free consistently in traded company. see growing can financial including flow, XX, Slide metrics, revenue, key as including rates all on we strong results share driven annual earnings

plastic resilient, including cash for packaging stable drive very the allow broadest flexibility model is solutions us to of the with to and free our sizable, portfolio returns strong shareholders. business flows dependable Our

year are our we our assumptions guidance with 'XX XX. and per on In Slide ourselves share shown now free Next, to key order cash align guiding flow. earnings to peers, better are fiscal and

are to acquisitions. between adjusted intangibles the expecting of which We per of $X.XX share, amortization includes deliver to $X.XX earnings from

year fiscal $X.XX. per 'XX was share our earnings purposes, adjusted comparison For

Additionally, for X% cash along free we $XXX billion, fiscal to flow million organic 'XX, with expect volume $X of growth.

the improvement fiscal second Given to 'XX chain, we half. the be through passing timing stronger expect earnings of the inflation in supply and in continued lag

X%, year billion strong very per X% extremely free to guidance our flat our to to as and X%, less growth primarily providing is comparable to cost recovering $XXX well of a With we quarters to returns our million since our cash offsetting to growth. $XXX Partially XX, from cost expect inflation 'XX. capital versus HHS guidance majority inflation we mid-single-digit On higher year. flow, X% of we $X.X inside unfavorable proud expecting respectively, $X in started volumes of of Our to we billion. comparable majority of with in with ago. cost be first our volume includes continue capital. reduction earnings be growth fiscal a cash cash negative to execution years EBITDA delivered delivering low the in we operating above of recovering operations favorable volume the expenditures generate the Slide growth guidance to the our March prior line our year lag expect for December half the and the of includes but X% I'm of in experienced versus to X ago, to EBITDA year expect where In pipeline to be modestly produce second see incorporates strong we expected the and team's organic prior flow segment on half every single 'XX. fiscal we for billion are million $X.X and not of This projects our mix, commitment the product assumptions due share, continue expected to conservatively recovery, the and

supported potential range. Our and a investment allocation plan consistent to flow financial capital customer-supported it while sustainable by versus free I'll opportunistically organic management finance organic a driving to dependable staying around our leverage that review, focus fixed is long-term strategy. This and my and more growth portfolio intend strong, targeted concludes growth, active strategic shares cash We clear enhances our and our flexible Tom. repurchasing through use turn return-based rigid within to with divestitures back acquisitions

Thomas Salmon

Thank you, Mark.

today call driving strong for we the X years. the reiterate and that continue our what I on remarks close focus open over questions, to our to prepared we want has Before will been past results

incremental demand growth. support our businesses We to increase our growing our products confident manufacturing long-term are Overall, and continue of our and core nature to of and single-digit to diversity see our we the profitable dependable, business of commitments been have to pharmaceutical, performance to we world-class build invest as global markets health exposure believe end markets the a business, is opportunities continue an the to and is maintain consistency key that in by base in and in as regions our meet low essential Near unwavering organically sustainable, pipeline invest of of technologies. offerings and markets and robust sustainable with new well to enhanced commitment very as emphasis secured supported product low-cost we new each I'm to our as underlying business. the faster-growth earned growing on and with such expectations which a and along provide our team's near-term care ability growth. in term, of

on consistent, on along will As to have with Slides and sustainability-led provide dependable drivers the our believe calls on regions, shown presence XX I positioned faster-growing that invest for growth, market long-term markets, growth. markets emerging previous into into we increasing end gradual that by continuing we and be faster-growth making moves we've focus XX, to sustainable aforementioned highlighted mentioned, several both including We and organic packaging. with

rigid both our continue investments expect will protection to focus a million advanced area, as emerging products this increasing in India on earlier rapidly $XXX to our States, We grow care believe solutions than of economies, capital megatrends and regions health we United faster populations. health need we China. approximately and line considerable will increasing in the with announced In with the presence markets year there be in wellness focus our for we and in and on flexible global

are we and As India. healthcare facility global part of Bangalore, this another opening in manufacturing investment, center

care our pharmaceutical room and growth comprehensive line, which sustainable blown on be our for commercial-scale we years ahead. commercialized will XX, the Furthermore, Slide Additionally, manufacturing health in rigorous and U.S. our continued care powerful us X-layer solutions supports on believe health clean business we for driver also applications. film first the a focus

stores, restaurants having example, not polypropylene incorporate For the clarity and diminishing while is to our we content performance convenience or believe for widely quick-serve cup recyclable cup drink the recycled attributes. ability most

expect other to has alternate opportunities growth products to pipeline and share products, for been and capture further grow we substrates. and continue products, demand Our strong, spirits beverage from these including and these

for balance collaboration with to pathway you drink We innovation, from paper Wendy's lives investments of advantaged cups we through support and packaging cups recently cup The announced innovation circularity. along innovative sustainability can recycled focus all necessary Slide also new at our XX. North to with important collaboration potential remaining recycling, move the to recyclability able recycle, in industry-leading expansion the customer single-substrate first, and through used of in circularity. offering, restaurant plastic-lined film for Based with increase our create ISCC-certified cup the improve to are will development will forefront on sustainability with the on with an the and goals American products as move that industry's mass introduce our LyondellBasell cups our quick-serve approach, drink both multiple clear that the will consumers future. technologies, the of more a towards their latest limited recycled see use on to XX% be advanced committed amount restaurants, plastics meet plastic In to recyclability, equipment Wendy's to design clear and industry a across combination

million example States launch companies new in early in one with across XXXX, the United This using will partnered restaurants use step promote plastics the over estimated All the innovative resources, important life recycled cups is XX accelerate landfills natural XXXX. of of in This waste to set circular first key and the is will opportunities our to commitment Given brands chain, initial from solutions divert pursue plastics. pounds recycled partnerships drink large years. from cup multiple of similar X of with with its a to collaboration that both cup The leading world. actively due amount packaging requires to Canada entire works the set. collaboration is many in to this and recycled expand The across use plastic waste as projected economy. increase with is has Wendy's cups throughout leading first just landfills value Berry to set only diverted Berry

Slide now Turning to XX.

the on to in with last solutions excited and are very Wendy's market highlighted collaboration, we we're and in circular call our customers about bringing close suppliers. partnerships we indicated the As our our innovative

including Wendy's feedstock, considered plastics more technologies like many previously becoming that possible. announcement convert be the forms are New collaborations that unrecyclable, available were into of making many to

imagine to material, state-of-the-art by for expertise across versatile With us investments lower the to value material, can of leader transition in that are it's industry attract zero cost made increase that are towards sizable chain, with believe You future see more being sustainability post-consumer to We value-added brand hard net and infrastructure CPG a we a recycled content, scale, meet partner provide investments. we owners global customers as We advanced already the most to Berry the any global commitments capacity part and Berry unparalleled the the of zero designed the their recycled XXXX. Ultimately, goals. capabilities worldwide affording use partnerships plastics sustainability. that critical the their to without of to with progress are believe solution packaging aid help opportunity and worldwide around long-standing and will Global's our access us have continue circularity will ensure sustainable to to achieve plastics. will plastics net believe to

date. announced and original Today, see economy. by materials. circularity plastic and of develop improving advance recycled across packaging we As is our sustainable most sustainability increase use goal you to XX% XXXX. packaging sustainability expertise, capabilities both and and supply target trends our our design goods tomorrow. chain continue leadership help circular circular focus on reclamation to that XX% of unmatched evidenced and deep Slide we by customers and Leveraging our an help as ambitious consumer the innovation to our our fast-moving growing on products meet can This a scale, demand global XX, from includes we today collaboration, renewable

continues aims goal XX the as to lives natural to by alternative resources XX give multiple energy introduce recycled new and to industry resources. renewable pivot renewable and resources Our

we our confident to lowering with continued cost our range any sustainability thank target and will through many regions. for new goal a sheet partnerships In on invest opportunities our interest and financial both and on achieve the and for of results outstanding of end this our finally, world. time, deliver leverage all who several we with have. in in way future continued access our to 'XX have portfolio challenges. an leading material goals fiscal X% across summary, active results growth, consistent of lead X.Xx. the on and next to to look low leading in delivered delivered chain At I spite by single-digit you X% agility balance top are customer-linked position faster-growing innovative streams, long-term balance are innovation answer meet the along to the These our steady fiscal glad to continued Berry. We metrics, the for of markets, management capabilities sustainability-based focus more I will markets over continued the coupled us growth, our into be environment, through consistent sheet, this driving and X.X you substantial byproduct continuing in your manufacturing our our and organic strong investments, on our along to And all drive capacity within innovations Mark inflationary with We close customer the improving our supply stated end ability in mind. growth, forward improving strategic expansion years. products growth, in year to in designing count capital with to in We dependable questions to with portfolio on and announcing labor growth

Operator

[Operator Instructions].

question Anthony Citigroup. first the comes line of from Your from Pettinari

Anthony Pettinari

out X% for segments, possible it across guide is maybe volume the Mark, directionally? parse or 'XX growth the Tom to four

Mark Miles

volume long-term generally, businesses we're Anthony, would wouldn't typically, low excuse -- volume obviously, single-digit we Yes, of all deliver I long low expecting volume guidance say growth. to give me, our But by term, segment.

in some all But Next pandemic of long minuses be just should from pluses the growers. more things and year, recover may our the haul, volume as single-digit be some over industrial there businesses. low

Anthony Pettinari

terms in in expect the get supply give And continue Okay. general to additional you those or detail And the worse? or Any seen thoughts this for headwinds resin 'XX, there? you you've kind assumptions guidance of year, inflation ease then any and embedded can do general there? of just chain

Thomas Salmon

to It's almost and we fiscal continue a chain it take October, We, types assumed industry, resin in reliability would kind dealing guide as with XX maybe close for so continue have at year here that of of now. to all And quarter improve of Yes. supply -- clearly, for continue months anticipate going see the we challenges supply of conservative in probably a ways And granted. that the these would continuity. we And it's and regard. that, an been it each to But find we aspects to forward. XXXX. crescendo to throughout improve certainly fiscal the came

Mark Miles

October assumed question. also where is resin polyethylene that being resin. the you to of current November primary I maybe the yet We've start think about asked beginning first settle. the and settle, to October at roll kind saw to over, month is materials polypropylene we predominantly was which our of pricing,

So current but our year guidance pricing. we'll see unfolds how the assumes

Operator

Bank George America. Your next is from from Staphos of question

George Staphos

and Tom XX, the on if Mark. the line go so and Slide echo There's XX an hear to me well. you analysts, I can't so apologies to want from

you're last, XX, a And since your the better up do. number of on really decade if performance, public. a amortization of back peers adding peers over well, part of certainly put acquisitions, your terrific Slide company You've I now versus a you're -- number which from the look

us both for specific and dividends. decade, dividends, you very are the that? looking up Is count What risk -- Can been terms good, of share counting And don't now you XXX very have dilution the guidance, quarter. you'll a factor around Can 'XX that set last that in value on is given least of you're expect which you're in terms to to looking has some targets adjusting buyback in there targets? now, buyback? fiscal How about at right that to million from the on we buy value for peer have of leverage in 'XX? investors, back performance us why outline you're XXX return you minimum, last the to return try get point? your your which would million specified at and for that in you for think has terms Now criteria also in the of over in

Thomas Salmon

to both George. want Mark will is I'm do this and clearly, well. purposely strategy. on allocation as Thanks, sure capital It return-based long-term have But weigh in we a to designed be flexible a strategy.

to our priority. view, clearly XXXX. growth way our company XXXX of And $X.X strength organic behind organic XXXX, consecutive we be First investments of growth in us range, by to flow we've foremost, the to of and industry operations investment, the and as of no year first growth stand we prioritized from And growth pleased billion in were our delivering -- a an value foremost, third and in there's this that $X.X our terms flexibility. in greater we're and and leader, in cash billion as it gives than a lot expect

Our exceptional. pipeline is

to business focus. think shareholders, we return-based expand we about term. of more to how focused our and given We I'll authorization in will deliver the is divestiture category, for advantage emerging provides that. leverage markets Wendy's, with targeted existing our repurchase allocation. And what going customers, Our think that with our $XXX it continue thinking either and and nature we're our with buybacks, similar it clearly opportunity prioritized unmatched or opportunistically bolster the collaboration us in take a term, markets to end to term reduce you way top opportunity further best view, And aligned of that's and our have have acquisition unpredictable to the opportunities we're now long million. around already the long primarily of granted, We also both on the at portfolio management, state, fact We've we of our range. form are of noted an capital the given in divestiture. near of it's right both our very that and just saw

Mark Miles

Yes. George, that, the investments. obviously part we mean, And all returns returns our across measure of on certainly I of

You can they're in, see evaluate whether couple the assumptions they when them something in and capital. And and XX% you returns, obviously, when is results. have We've of to inorganic return calculate that's delivered returning what years. invest not last strong XX%, considered projects or certainly obviously on that risk you returns, the and objective returns while or is capital, organic,

we considered all you that evaluate lot of we our a are for asked said, share that when cash based of shareholders. also those to that I yes, also -- fortunate, a was repurchases. opportunity our the as on and share respect get great options options. things Tom a think So the conservative returns generate With lot drive we we and obviously We're guidance, chooses recognize have we in down drive our to count, company assumption about to if

George Staphos

Okay.

like value M&A turn over most at shares buyback next Would that Just will put and a dividends quick today? months. And of fair the It all? be you would value return, sounds it would given sit over. how to ahead it shareholders you to return fit the say one XX I'll be where how

Mark Miles

staying at got company range. mean in I X.X. to in now X.X excited We're back of top committed very the obviously, We're at the X.X. range that we Yes. we're that targeted end to the

to available we've prescribing the of remarks, in of any approach, be lot Whether valuation or not we're unpredictable. a is a we're we opportunities not Obviously, said some amount return-based there's the M&A fortunate to have hard one to at particular category. the a are right got prepared flexible but those options and determine. we going that As are -- fixed

Operator

from question Ghansham & Panjabi Your is Co. next W. Robert Baird from

Ghansham Panjabi

terms constraints we on mismatch of evolving that And million quarter, in Just chain that? your price you you fiscal on some the comments, recover cost just the prepared how anticipate do touched give in from what -- supply exactly of that year your you in terms fourth $XX should the 'XX? to through then us you of the color cost timeline can how

Thomas Salmon

quarter our third Ghansham. of ostensibly fiscal price being anticipate year, would the by We cost-neutral

Ghansham Panjabi

the Great. chain -- And supply yes?

Mark Miles

assumption, And said that's we a flat Ghansham, earlier. as resin

Ghansham Panjabi

chain supply constraints? the And Understood.

Thomas Salmon

team. qualified get -- Like continued source of in number have. world. material a different fluid better, around from said, we of materials enabled from to more expand way to that geographies to We've We've continued I the resiliency the the Yes. opportunity they've the now our

are and supply where not chains. goods. a on, given imported to local surety excited proximity it's customers. about we frankly, the the of heavily really delivers relying of control large And extent, local our We going for is forward with It markets that. we supply, us We're to serving that an believe can our advantage, model right we're is our that, locations -- which

Ghansham Panjabi

chemically you then recycled the Okay. And versus will, resin mechanically of you outlined, on to the bioplastics? if buckets outlined? Tom, various sort by that between kind component you that do constituency, the do relative XX% how see recycled you versus playing XXXX, resin envision XX% circularity of out that you How

Thomas Salmon

combination similarly to going balanced, a and continue and be and in that a plastic It's are waste, outputs. to otherwise The ability we that and provide that, are the very reduce quality incorporate large-scale well from think the they'll throughout materials to materials one potentially bio-based difficult ultimately Europe. are them, incorporate day. solution Yes. investment to in to we've recycle recycling to continue win position I investment evolve. right communications going behind provide advanced to those is the made, strong virgin-like post-consumer that to solutions those all materials with commercializations of made recycled of really significant pretty we've we're going No And

takeaway is to is I something, the for effective on the see packaging couldn't have on be us we've demand. go helping less And that able to it the which that the pipeline you with commercialization type I to something to opportunity by was waste, ultimately towards we demand has And and about about some for plastic was way time been think, passionate more it's have not the a compromise consumer is long of schemes. to going as drive our we XX by closely role biggest felt reason collaborations announce, we're education #X expanding type think real. followed of that can that for XX it. creation, that cause and It's And based to early enabled. this a company, the excited address that quite I of

Operator

Markets. Arun Viswanathan Your RBC Capital from is next question from

Arun Viswanathan

now It understand prices have materialize? than that on kind just really it is come to like that or you in, year? opportunity out an But of that was the more million. materialize price give would I quarter, resin put regain I the September? did guess say, you outsized you would a seen settle I do when to And now prices impact. we've wanted the lower, all normal side, resin that the expected. and if I you'd the down cost back in? mean, bit $XX have that this Or little there go through October looks as what to called we know did

Mark Miles

Yes, sure, Arun.

-- U.S. gone like move, boxes. is from for on So the our And we in down I like would yes, the down, goes the to that until if the customers right. items, that And moderates, the significant months it resin. gone back. what was lag certainly, quarter. negative we inputs, things you up, third a extent as I'll it it in we as of up memory yes, I doubled liners, think with recover lag resin think my our inflation certainly, get has XX, polyethylene for tell other the But way has some then acceleration the October on we've more don't pallets, -- That that experienced was purchased up. would XX built colorants, the other

the lag in those lag recovering of cost raw a a there materials, resin, as so just other in there's step in there's recovering a change and inflation. was So

from to got of last our $XXX to recovering in more $XXX We inflation it in think, do. comments. saw You just prepared million to that passing QX. total committed a I lag go the great just We did We're quarter over work said, job Tom through. timing the million There's it.

Arun Viswanathan

that free since mind? a 'XX, starting we should understand little raws can at is our would up volume then look or cost through factor there at considerations assuming upper push do wide is year. if moderate you're main the kind bit price you. But And the which that the you progress we range, also Got just as cash Or that for flow, swing similarly, we you're end? of in we keep that guiding

Mark Miles

No, low to no. I to mean, yes, certainly, that. mover the price range. would end the cost high biggest and the end is of probably agree I relative the

Operator

from question Samuelson Sachs. Adam Goldman is Your next from

Adam Samuelson

sure remarks on the flipped the benefits. around up and which First million came that fourth year, actually notable pretty would fiscal I that, something want HH&S $XX correct seems and what make that It that's clarify that benefits headwind of 'XX. question is kind to the the clarification in have understanding a quarter. is heard if mix just in fiscal the for prepared how has evolved I to I'm And a if correctly, and for that expectation implied

Mark Miles

Chris, it's Mark.

confusion the that. on for Sorry

of So the started fiscal in mix 'XX, benefit started fiscal in QX 'XX.

And about that $XX was fiscal and $XX so we about in 'XX. number 'XX had in million million

$XX the is year-over-year the million. -- it's So

in the mix 'XX, benefit total year-over-year $XX million was kind $XX in 'XX of so So $XX the million. is million

confusion the Sorry on for that.

Adam Samuelson

Right.

And so...

Mark Miles

in QX. somewhat QX facing in moderate relative did were we to It what

Adam Samuelson

Okay. guide, in think that about 'XX is there? you just what assumed the And as

Mark Miles

assumed is that of virtually that We've gone 'XX. in all

upside some conservatively we've to to a be 'XX. guided could But very there benefit that. obviously, -- in Now little we've got

Adam Samuelson

talked seem you're 'XX. cost and guide getting inflation. a Okay. assumes recovery price the coming of of for balance, net cost guidance, neutral on where It again just out price behind would about And then the to kind clarify, 'XX fiscal you've

is of I on there? the something and face conservatism price am inflation missing So recovery that or

Mark Miles

about. No. It's exactly we talked what just

offset mix so benefit the netting So COVID being a by small number. is and recovery inflation they're the to very

Operator

from Parkinson Chris question is next Your from Mizuho.

Christopher Parkinson

segment you us there a H&W, heading a how very and and that of growth on been can have into but outlook, on into would moving So your lot X% if helpful. food outlook level, safety update thoughts not XXXX. But your be flows that necessarily parts on e-commerce aggregate

Thomas Salmon

the HHS that we But based built we're feel No going on capital the from general, business That's low to deliver business, the over have the prior the facing businesses, long given In doubt, million growth. we're investments investments alone expect, haul. amazing the over headwinds single-digit comps all would year. in we we've how and made half, the are $XXX able The back XXXX. very good these to in all growth that a projects in are be been we've capital to see making. going of continuing recovery to that because the pandemic, we're make throughout we we'll customer-linked generate

as cup potentially making driven ultimately that all That to that the space; ongoing very investments a support HHS and as certainly an year strong previously the the is in by $XX the solution, is in health support our at-home construction foodservice and we're seen in a beginning drink translated as and China of and heard care investments continues in at end You around business; Materials QSRs that other what that by care number fiscal that amazing Strong in more which support plus. clear seeing being business space. demand in we we're the complemented e-commerce have line XXXX, in Engineered in foodservice of we to our a million we've investments articulated: that benefit space. a biopharmaceutical And food waste large health line place inside is trend that's also similarly, our already to America well to Europe; in North well. of as have building HHS consumption, the capital

business, weakness we mitigate over course have CPI to we strength by end growth. year. continue did will access that and beverage and believe the in fiscal chain Our the to emerging market challenges foodservice continue supply driven see We of customers CPI, industrials and most not having in materials our to some

Christopher Parkinson

helpful. customers. amongst Coalition, very the it's outlook, profitability for just you make overall circularity that a the lot It opportunity, long-term Lyondell, be material about done a you, be into very and then sincere this effort financially And worth. So few to just goal X? done this follow-up, given we've Recycling the be else fits of to how a hearing helpful. as large to which else very there's just breadth been the could on really of if to improve just highlight it What like overall a But would and you improve opportunities? That's what what hit needs needs the Slide on seems Polypropylene

Thomas Salmon

Yes.

in creation demand on I to it a investment we're the increasing homage that there you think capital that reduce to of in XX% by Whenever risk XXXX is objective should take enjoying. demand, Berry the what than return. terms is be correlative its helps that's capacity And continue to available electric terms to in good continues car. educate, an happen it's amount the made to our marketplace. no of And continue things different to going demand the and job of are to drive is

different, will electric If about infrastructure the support they to pundits And the to cars of electric to continue recycling car talk and the the ultimately front expansion, these recovery, ultimately cars no support we electric develops. once as you advanced listen and expand say, us is us. use decouple circularized fossil to allow develop infrastructure to growth to the technologies the fuels from in and opportunities to promote

Operator

from Your from next Kyle Deutsche White question is Bank.

Kyle White

labor increased -- transportation? terms inflation. for there churn? in augmentation has nonmaterial able that you against I What business? this Just resulted in any go wanted and some nonmaterial the are Are focus any opportunity to increases thoughts combat Is the with there. on you maybe any doing of on guys price in any out or to to

Thomas Salmon

do, and to a we as you what program. We of ways our capital continue core part allocation to and automate our it continuously can find of improve operations. see It's competence

each market any In our different in geography that service. is is inflation for the labor our And in geography type guidance. labor, sites XXXX terms outlook Each of across of XXX we've we anticipated incorporated unique. a

our make an probably we been focus that beyond anything been, will about we else, be been employer materials, and we'll then recover worry the to individually out-of-market provide it, with probably able Relative -- first it the price. be serve. the some we've come have and go out the the of choice increases that that that we back last to all able yes, can based and incurred able been foremost, -- customers can customers about to on actually we've our strategies to some we those stance, which doubt that similarly been to We've deployed based chains other And we to and raw alternatives, to mitigate. out delivery we'll to service go pandemic piece in that inflation has to that to science certain make treat our no service material been of ultimately and on background recover. using supply So it's geographies to in beginning on and your we've know-how get Those our And certain point, have seeking to out throughout done. are that reformulate, customers. to

Mark Miles

and Yes. to we I advantage. and uniquely would we of committed To us, remain the everything an likes competitively, locations proximity inflation at to impact, product, mitigate facilities just to again, look, actually cost of I'd us And to positioned helps scale add, are percentage say freight doing customer customer while puts given the the probably like our our a locations, while right? the can we closely nobody it, higher extent costs passing we're it don't it through.

about asked I we've churn. of wouldn't any that churn, increased say seen you level So

In fact, it's I anything, if say, decreased would years. recent over

Thomas Salmon

relative but I we to ultimately to will grow customers same pandemic has never the than to them we've their growth am the now the with throughout we the capital XXX% of value as and bring sustainability at our right way investments customers are can have the the their opportunities collaborating objectives the are not inflation business very continue it and time. bullish operated, way we way to company I only robust the But serve, add on allow long-term meet we committed that our growth, our offset And said, also to growth to that at objectives been now, outlook make we more Mark the linked to with time, is for customers. pipeline and, now. same

Kyle White

that the type established shorten to alternative then given be more resin? might of is And maybe it on more mechanism isn't resins or do these of same resins? specific you're market that it. the pass-through volatile, virgin move is resins, Or Got alternative the kind expect and you a bit with looking as and these the recycled more towards you as as using resin lag resin, for

Thomas Salmon

question. about the PCR-based, incorporated percentage and that fair at advanced substrate. thing volume It's the the is bio-based unique lower they're a a materials of the The typically recycling overall for

So that percentage to the same tied base higher those which a have overall it's of indices our the in some product materials, types on instances, have materials while are we lower similarly cost, of a cost.

time. you content of grow technologies the see operationalized, percentage these As become will the over

Operator

Angel Castillo is question Morgan Stanley. next from from Your

Angel Castillo

of to us and And Currently, of circularity And expect signing. moving that whether full becoming And as of contracts? how been and to technology you in I pilot take as the to continue, little give kind color guess, fully Berry's, it's lease kind that we a you should at itself think the to actually full of you've about out bit guess, scale, some contracted? terms kind I I how guess, point plants of I more we could agreements just kind on evolve them from the agreements? structural think of of this to about product? commitment proving what it's kind wanted

Thomas Salmon

at formal either mixed a It's letter if tied contractual a a not agreement. a intent, It's bag. to of minimum

a with just the name around and headline we're on it's a for Conagra, marketing This Our world, continue proven few. just isn't delivering commitment Wendy's, a brands market. that whether the commercial that is in to This us demonstrated we to campaign. based major Mondelez, applications is something

in that's demonstrating to I more the demand, And we're technologies the drive are viable marketplace. So we'll that and objective. anticipate these continue wholly

facilities in leader operationalized, we recycled is for the which brings built more greater likelihood and recycled, can a infrastructure. demand industry create to that the promotes sustainability, the makes which development do this demand, of creates a the it the get thought around the cost, the As content, leader and more down larger-scale widely

believe demand are development in circularity, organizations. well our and promote team affiliation the be drive we're circularity, we and both how couldn't world, this driving and So around with we the the of necessary terms of part is alliances acting the its as ultimately we commercial an with the -- as integral prouder the to of infrastructure

Angel Castillo

to just I something. materials, wanted raw going back then helpful. Very And to Understood. clarify the

year-over-year some end? in Is anything at potential of you prices. also, the inventories data kind higher In that polyethylene some guess, embedded consultant the guidance, running of range, terms any normalization as about material, and terms in And the kind operating terms polypropylene, raw of at that that are of decline higher in lower to does maybe think end And or future? high-teens currently, assume prices about in of deferring at or lower terms to think EBITDA of kind sourcing have look purchases mid-teens near in of of we the for as in I the differently they you buy the we prices? the as

Mark Miles

sure. Yes,

guidance As prices. the polymer we said, October assumes

the our our there's any be would going change to respect priority servicing So #X With is extent to to customers. modification inventories, a that guidance. our forward,

serve make we've our got That's we adequate product our customers. So focus. to want and sure really materials to

Operator

is Adam from question next from KeyBanc. Your Josephson

Adam Josephson

numbers, you through quarter, update provide can the being should progression halfway more year just upward just course volume of we flat it's said just about you Mark, down? last given the what the volume comp the year? first half And far in just gradual the the a given on thus any to than on relative volumes, that trends terms of expect to through

Mark Miles

Yes.

volumes respectively. started and that reasons and past spent we implemented. that's I X% off we earlier. to chain abate question think being that think fiscal is growth and December significantly new 'XX got to right to capital year I got in the Supply the this over of improve March, mentioned capital we've way plan the it, continuing 'XX, of part even would grow 'XX. Obviously, challenges fiscal X% the course and Tom in last more for Adam. to We expect about think your more that we've the

behind over So customer year. build the as online come projects commitments the to those of them, the would expect course with volumes we

Adam Josephson

you're versus Yes. halves, half And given percentage this EBITDA roughly of a calling in occasionally years of given versus for on be expect half, out, you year first us or appreciate -- the can that, frame that to second Mark. just you've expected you I past? And is that what and X previous just weighting, terms precisely calls,

Mark Miles

Yes.

is the quarters again, I higher ex other think prior the to XX% I would QX it's X% more so of pretty low look 'XX, 'XX, the XXs, plus course total XX%-ish and typically will in XX%, or over And years. X the X%. half. of in think back are -- similar 'XX it the then be

Operator

is question from next UBS. Your from Spector Josh

Joshua Spector

to thinking over new increase up further Just $XXX CapEx 'XX the years, for cetera? is time level circularity, the kind you for that that more really on described maintenance million to over build Or like from of us follow that, right $XX few it et the with and does related get as sustainable next about? level it how looks million think just up ticked you And note that? maybe earlier. to around Anything about

Mark Miles

of notable in there's Not on the last some the maybe percentages. part. rounding Nothing --

memory this million think to it $XX it my in we had the is I time, if million, rounded to past, and $XX rounded right.

with your continue In hope the of with really it's have change of customer first rounding. well returns of just cost again above I returning so. I commitments. I great projects, mean, our maintenance No level hope So capital. to part in I question, we think the look, capital

innings positive think advantages and the early of RPC I acquisition a was still of certain we've ago, we're that where in of globalizing still a to of in the big our got early certain regions. years Obviously, product that. the in innings made categories many we couple we're and products,

look forward to teams see to our So globally. I from opportunities to continuing reinvest

Thomas Salmon

echo I that. And

customers that statement think teams, the provide a to our continues our our around company. relationships And of possibilities I and the world. with just it premium long-term doing the strength to the integration of for revenue we're global it's significant brands

problem, quality. good It'd excited very about So high a it. be

Joshua Spector

That's helpful. Yes.

or Just there? clarify, would baked is build are capital any quickly is to your expectations assuming inventory in you inventories. 'XX, there And for just level working Where you in customers? on say flat

Mark Miles

year we others, you inventory, for respect a we've depending product guidance. any in In the say when with been would cases, in guide where in working keep typical got, to the to we're some product extent stand categories. geography. as inventory for a we and we'll I year That's to respect flat provide we to able going position. larger our the updates goes, capital, We've some outlook embedded have To our it's 'XX build with on And vary hand-to-mouth apprised. it.

So is again, our #X to serve customers. priority continuing

Operator

from from next Your Jefferies. Phil is Ng question

Unidentified Analyst

you to the industry bit first to progress on acting the made have Phil. I John recycling the implications. for [ph] I a touch more financial industry. start an little the off want advanced on commending on you But leader guys This want is did for for and as plastic

suppliers But well And in about matched products? some of percentage would side elasticity there of then for would in end that of early? pretty and circularity et these terms your timing they how than propelling cetera, a You've contracts increasing talked the in actually figure still you match store mechanism? right are are it PCR, then of shelves. bioresins, at products, seeing But are they little. or the kind of that will seeing thinking about coming some of I making, on materialize and the you're is terms customers, that plastics up on the higher on consumer some margins product your current you your as you're those margin with the the the the from profile of pass-through the higher within too be now it on

Thomas Salmon

of that pass have substrate, overall increase a scale we a provide I'll you, that ability introduced help this role do of And their vehicle But any ultimately, grow of to it's continue It us. CapEx been percentage because The you allow continue agreements materials, and integral mutes on incorporated the of working the of remind facilities. somewhat. is of pass-through. the type complete to Many -- increase again, next brands companies investment as ability, of to you the innovative Packaging-International several -- the the demand for tied Yes, inflation those and will with use terms basis. an that increased operationalized. as the sustainability being gets ultimately to in allows output around them resin customer some Packaging-North new robust. as they different we along. have confidence that's I remind over We've the years these and and to a impact think these it in think capacity an regular reviewed anchor different suppliers, are gets Consumer see be and we Consumer absolutely and I'll start increased well. scale traditionally markets technology. as communicated that they'll are different size to of it's have part with serve and that be them amazingly the content with the incrementally I to I'll to publicly expansion leading -- America, we built across the

As begin time, it's would to see, allow from the over And companies fuel. ultimately an to decouple and operationalized, more start a it over fossil more term, virgin-based stream. ultimately, to you'll recycled material long of a equilibrium between

Unidentified Analyst

goes advanced what of based it then chemical and I in a the that. you announcement PureCycle follow-up made just just are these And of others, some The is doing kind diligence of, on What you Borealis, due recyclers? terms Excellent. into saw, on it what it with kind up footprint? their needs announced checking you Or that and resin? with? you type and seeing can scale well of polyethylene, how of operations? are your polypropylene, they their gets partnership who from is determining How on actually location it Is of

Thomas Salmon

or vocal ambitions listen, as to we us investments so that So and acquisition. we've do ability diligence introduced the early on. in very I this, our we capital would want we be think have ultimately We and to those into we what to factored where a we're due any actually technologies where management, technology are other of versus tour level expand product. with the locations understand produce their what they are know-how meet the to facilities, analysis. scale the All those leader would And investment been to any have are, reside geographically their going know-how,

Operator

Instructions]. [Operator

is Barclays. from Your Mike next question from Leithead

Michael Leithead

now in adjusted the for do this largely shift just just an was I you why guidance, is the historically, out company thinking of to EBITDA. on EBITDA by some this. the on incentive And annual from could flesh driven the relatedly, felt time EPS Maybe target. the you ask wanted I comp right think to

proxy come when see that in shortly, see we EPS forward? moving So the should shift out we

Mark Miles

sure. Yes,

with I that's the to peers. And align obviously, certainly, to of driver EBITDA, just it's largest so think simply point the EPS, the respect EPS for starting earnings. our is to

metric still company's important it's a performance. relative very the So to

Operator

question is from from next Your Mike Truist. Roxland

Michael Roxland

Just one quick question.

in items, doubled XQ can recover some highlighted What's that in which time inflation I you believe recover time, items? improve your that mentioned You over with boxes, could pallets, your targets material costs those contracts increasing sooner. and period try you've colorants. you liners, you the fiscal to and

those you the given So the contracts suppliers that what's rework rapid faster them? looking And for with other have approved two, your to allow rise you period one, inputs, to with in are relative time return? your

Thomas Salmon

Yes.

mixed pre-price that And materials, frank, really pursuing raw active to to been On recapturing is a relative it inflation. the other be we've bag. and often

our fact CPI it's in that Europe, in line for filling a of supply, a could that. talk have not necessarily chain, that that themselves purchasing allow chains foremost. ultimately And may supply United everyone component prescribed variance. During the seen with not some often required And saw not the supply we objective time materials primary organization these material, a end were periods the need on over the dealing to get is the In users material. instances, Or would it's certainly, like first and customer is months, the about the in you've just and when States, instability you from the they for that components the the last when fill they we XX us.

remain an XXX% and inflation by third We're that that everyone. all to of is cost focused balanced it in recover one neutral way, price from fair quarter. doing not We're the committed it This by felt been it's on it's we it on. and another. passing will XXX% We're a So era in where together. we be and just company

Mark Miles

Yes.

don't they're on agreements all our agreements with on have a weekly date, up customers continually We a basis. So perpetually. up. daily, They're are specific of coming our so coming up coming

Operator

from from is Jeff question next Your JPMorgan. Zekauskas

Jeffrey Zekauskas

X out turned you dropped polyethylene pound over polypropylene another it a and how the would $X.XX next prices earn? much that more months, If

Mark Miles

variables that when at trigger look earnings the through know differently of agreements Yes, in terms you points. our I of don't goes. -- mean, The lot there's work can a customer cycles. in I on that, it different depending

a lag, have by pretty and We again, vary Again, to going modest efficient customer. it's timing pass-throughs. there's

the total, extent of every of grade that earnings I to to way. formula unfortunately, it windfall Tom not experienced So mix the it because other can you It's, business. there's formula can depends obviously, lot it and that and wouldn't timing a really as unfortunately, last a that equates for the in I lag. blank, the the no, And a certainly, $X.XX related But of timing we give mathematical would a said. as blank provide. it drops, year It of headwinds go to be on

Jeffrey Zekauskas

by in issues supply volumes How XXXX? much were affected

Mark Miles

again, that. for to, an say exact would I hard get Yes. number

I think volume the into X%. it the single-digit way looked minus in best expected growth and is we've we coming at quarter, low came we

on probably So estimate X% best at impact it that had QX. is X% our the to

Thomas Salmon

the right. On quarter,

Operator

Your Research Tiano Seaport Salvator next Partners. question, from

Salvator Tiano

should confidence probably what's Again, the a X%, supply the be clarify. volumes. that? the including just want in you on fiscal or number? trying Is days still we from as X% with understand, How impact impact I the comparable first And year. bit to chain, little that any full next gives given of mentioned, just a secondly, mean, to on average? It's What in year X% will the going think you the do you year QX. to I part for So challenged happening you probably is had fewer about X% it

Mark Miles

now. Yes. It's happening

days. the are numbers that for the adjusting we're And so providing

Just to We'll improvements, thing we reported, we the like what respect we do we chain, supply in the us confidence. fiscal that's in the periods. so did look, think for days. future 'XX appropriate when With I seeing same some gives are made adjustments

Thomas Salmon

growth fiscal spoke know made. all commercialized it, factored about when course of the to that million -- will in we've the you investments we 'XX in that we've we've and tied over capital those got in about And year. become $XXX And

make we've the based those it's to So really on pandemic. that commitments, throughout continued capital investments those

Operator

question from Your last Hajde from is Wells Fargo. Gabe

Gabrial Hajde

short, effect? little the somewhat be it's surprised just, And in steel a of I'm inflation that that. that experience apologize kind your cost thinking trade-down don't what the for might been I'm a advance for up X-part. XXX% year. a next I not next in I could in that or hit long-winded we're year has does of sort of like something and And of of terms about know, peas thinking the but can question, One tinplate about of is consumer what

we've to cost as inflation of of risk And a in more again, fact of our choose how given side the mitigation packaging? that supply weather-related seen at saw again, longer substrates, what intensity are your on, of the on kind and if what And energy what around as customers of competing parts may probably that thinking the as was those going to of the well we lot thought or the on not again, resin then the least was of the opposed other about world. some that. benefit supply or kind recently, kind chain, or there's chain to aluminum So here of do vulnerability side, the particularly any other term, countries may steel

plastics cost and substrates. to competitiveness intensity energy other Just trying understand of versus the

Thomas Salmon

terms their cost of customers, I said, the that in goals advantages we we Yes, our ultimately amazingly Continue both company. I lightweighting, I'll answer they're the and the or minutes be if our consistently But and into seen otherwise some it are we hold can. how and We're in, we're and economic it diversity, your interest materials best look and future grower or I the at deliver you've diversity our flow earnings on brings have then terms product to as portfolio, guys, or really year that's of optimal Well, of periods and extent, the nature the preferred the the based well. use. in no resilient. every which it year categories markets portfolio have next benefits we'll portfolio us hour downturns engineering to continues free cash and and we very, the not These plastics, robustness to call. at you stay as discretionary continue feature being I very sustainability other our have up substrates. plastics we'll the want are appreciate to in and large -- And that of to competitiveness the and concerns low about recessions that most seen material able convert, material of XX to they all and competitiveness we and out, of in serve, raw previous and it of we our it's long objectives, just we've growing the some dependably believe versus in do and talk this care. extend a be of the and thanks about its success a that Take ultimately and people single-digit appreciation. continue we'll And past would so. day products argue to to consume a safe, the you with listen, that have design resiliency a that, substrate. -- in I to

Operator

today's concludes you participating. conference for thank This call. We

disconnect. now may You

Berry Global (BERY) 18 Nov 212021 Q4 Earnings call transcript