BERY - Earnings call transcript Q2 2022 | Berry Global Group, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Berry Global Earnings Call. At this time, all participants are in a listen-only mode. Please be advised that today’s conference is being recorded. After the speakers’ presentation there will be a question and answer session [Operator Instructions] I would now like to hand the conference over to your first speaker today, Dustin Stilwell. you. Thank ahead. go Please

Dustin Stilwell

XXXX good earnings Welcome we call. second the to and Fiscal will Berry’s Quarter the March as quarter XXXX Throughout fiscal morning, you, to everyone. Second refer quarter. Thank this call,

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

Joining the Officer, I Miles. Berry’s Tom have Salmon; Mark me Officer, Company, from Chief and Executive Chief Financial

Following to order Tom questions. comments to one time and question will you back participate, we In the question everyone ask have to at the additional opportunity a a and any Mark’s fall queue for allow we then session. yourself and into limit answer do today, to

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

Thomas Salmon

everyone Dustin. four I you, the thank presentation and being quarterly us to Slide Welcome for with today. you refer to everyone Thank to like would material.

exceeded free share quarter report First, and billion sales volumes, macroeconomic we with inflationary organic our challenges. flow EBITDA net and despite in-line and I’m with finishing of additional that adjusted for pleased cash expectation $X.X earnings delivered the expectations, our record pressure per

per We are adjusted year. reaffirming full free flow both the our ranges and earnings for cash share fiscal

increased quarter. in of we return X% shares cash shareholders, repurchase million total our our we $XXX Additionally, the to of shares outstanding as or

at $XXX on that As the and least we call, we XXXX, last stated have fiscal million quarters. are already in our first repurchasing to achieved committed we during two threshold

would to to Given we the shareholder back value, able half our to year. were persist, fortunate take prices. top our of If the a prevailing the pace repurchase of current driving of shares valuations attractive repurchase shares at return be we and at opportunity fiscal priority to continue similar advantage expect in

our our $XXX remaining share in half. approximately billion program, our $X authorized flow with recent have We generated second the of majority fiscal on million cash repurchase

call. earnings seen Next, last we inflation continued have our since

aggressive to costs these taking action price our are businesses. We offset across

dynamic to teams have well. navigate operating this exceptionally we continue While executing through environment, our

finally, to We at the operational our us any is costs customer time. unlike input continue our industry. growth, and other enabled to our higher offering scale focus customers recovering service and had our in portfolio also to agility demand prioritize our while continue same and And on

shop Our unique and on a ability basis for global stop one a to differentiated. our customers is provide

and value focus creation. product a additional on with growth long-term faster-growing that for sustainability-led growth-oriented opportunities and the for geographies categories, growth along investing innovations drive are We with growth

base. demand we be of are being by which will customer sustainability driven led towards strides ambitious We with have needed goals, global and great commitments, our and our the to continue our extensive made

me let XX,XXX one is that teammates highest to value and healthy is of priority. all turn safe Number our our Slide core safety. on our Keeping X Next,

to commitment minimizing ongoing and an have identifying, safety managing We risk.

have teams progress Our continued to environment. a make despite on great safety challenging

itself. to as performance improve. you see, And speaks has continued can Our for safety

We of OSHA XXXX, for significantly average an our incident industry delivering than of fiscal proud leadership rate are very one X.X. industry the better is below which

entire Our the a today, environment on global emphasis our optimism on us better working made safely a Company’s Company servicing success. and in has giving us and great team’s challenging customers future stronger

lastly, our ensuring mention employees am while be Ukraine not assist have to and this a generously extremely having As innovation we see in the and circularity of to external on better carbon volatile industry natural multiple who providing initiatives with partners to you can resources support. improve many financial continue to our extremely providing to and would are that I strong I Company period, both from remiss challenging how we to And shelter bringing refugees slide, footprint. proud commitment and during provide opportunities lives and

who over turn review Mark. Mark Now will results. the to financial I will call Berry’s

Mark Miles

you, Tom. Thank

Before benefited the quarter XXXX to will for ago. period we quarter, The impact on We investors and has quarter COVID impact as to please yet in of like basis. the our this note the the to X to meaningful would refer will which to negatively this useful now. compare business. portions businesses current trends refer with information we and our mitigates consistent of everyone we the about two-year that believe ahead move of Slide last March businesses I and our quarter, both COVID, impacted and in to details years a meaningfully that longer-term provides two comparison

When organically $XX per XX%. earnings volumes over year X% perspective, expected recorded share quarter a on organic From with record For On the are primary up billion up down year, volume of operating in benefit Organic strong each invest significant two-years cost compared we lower ago. material basis, last XX% by the was higher strong freight, and increases resin volumes were a results X% sales with X% realized XX% estimated line a as expectations from prior year the raw ago. basis, EBITDA than by focused prior product our net raw energy our on and the driven of in our mix a than in to operating X%. our which is as and increased two-year the we in pre-COVID face adjusted organic an basis. businesses to materials, two-year and as year execution the year X% the labor. strategy two-year other million growth in as a of past $X.X increased well These delivered were levels quarter, earnings EBITDA inflation

and our again fiscal we remain facilities our throughout cost committed advantages. and our believe to demonstrated customers will from cost have proximity well which their along we sustainability with provides both and these are XXXX, passing in to close scale, service ability given As we locations, positioned through historically, increases to

inflation $X.X efficiently to up demonstrated last our ability selling prices over billion four the million through pass year $XXX quarter Our quarters. was a as and nearly were than the substantial again prior higher

our Now like Slide I would performance segments, the of quarterly X. to by four turn on starting to each

X%. our two-year growth delivered year and on in International quarter, prior over basis, Consumer XX% a division increase of the a improvement a the X% organic For Packaging including revenue volume

X%, Operating cost while markets organic recorded basis recovering partially continue and health EBITDA timing was Our a up by the markets offset food, volume industrial driven two-year growth higher solid modest and on to growth by lag volume beverage costs. the care headwinds. of productivity some experience

volume pass-through XX% basis North two-year a Packaging year. volume in delivered continue organic including From organic volume our Slide Consumer in for two-year a XX% restaurants a to used Health, of cups On a was the convenience of fully Specialties similar higher Selling division drink higher quarter, prior strong the including EBITDA from delivered XX% & quarter period. versus selling over revenue the strong from and our our growth a costs. prior coming exceeded of In polypropylene year Next, the divisions, year saw delivered improvement beverage on from strong our organic America stores. market prices we and driven perspective, Flat Operating growth. same X%. off X% the demand year-over-year clear X% strong in on see a on in quick volume by X, by basis, of up XX% demand other increase and and costs. prior division over increase significantly over increased the by a including markets, pass-through organic of two-year our food the increase growth basis the to prices a growth the recyclable X% volume expectations we Hygiene service revenue

supply In volume modestly challenges. volume the chain the partially the customer on EBITDA EBITDA in by committed to impacted modest than of was a in the but prices two-year higher of the from primarily were the a two-year and quarter challenges. COVID, As with investment prior strong and increase negatively increase lastly, basis investments a hygiene the healthcare, as business period. a attributed saw to over our our from more supply Volumes was the compared recovery productivity, volume to basis, along supporting were the year lower increase and of the specialties basis supporting delivered new decline And by and revenue down lag by comparisons with was On XX% the basis prior strong XX% our two-year expected, capital from year-over-year Operating XX% result cost prior chain segment down same quarter, than benefited organic a a on as hygiene offset growth, X% from on reduction, two-year division up year offset Operating costs. costs. a projects health markets we over of a care in pandemic. higher Materials from onboarding pass-through customers capital business year products. the selling by in recovering were related Engineered weakness timing up modestly organic volumes

from Slide costs are $X.XX repurchases. adjusted X, the by benefit higher tax strengthening a assumes as our can lower foreign share headwind timing currency reaffirming earnings of you of lower from recovering U.S. businesses, to share see primarily XX. we Next, offset dollar lag from $X. and range rate EBITDA the The the per divested and on

have remain significant XXXX. inflation As referenced incurred starting on to our fiscal in last recovering call, we committed we the

recover expect of of to we to sequentially the we inflation of of progresses in year to as investments. the anticipate the growth as at communicated volume second an single-digit capital earnings and half growth perspective and along both low anticipate volume the the the continue improved and continue new as with year, beginning We start-up Further, year. we year and improve organic business second the half from

business new flat This expect cash modestly well XXXX. guidance guidance since billion fiscal and our above includes cost $X from full-year, we growth of $XXX supply our in volumes the of On extremely of we see of flow growth to continue XX, flow capital volume the organic are capital. timing $X.XX which $XXX and plus X%, to we of started to projects, prior reaffirming cost Slide returns This cash guidance expenditures $X.XX million million guidance our X% a we to be than reduction every cash deliver off operations our ago. as startups billion strong of up I’m to ability proud on year nine-years For billion. is coming pipeline lower continued to challenges. providing our of chain because of single free

We down a and sustainable funding organic organic flow free investments opportunistic of a projects, capital customer-supported portion to our dependable includes which cash strategic have intend consistent flexible clear long-term strong growth. pay and to fund management. repurchases, allocation share and growth portfolio drive strategy, debt We that use

strategic and generated also both We acquisitions through portfolio active historically value significant divestitures. management, have including

it $XXX as our management will to year, prevailing buy we market us value for of prices. the financial at of continue market turn review, As to to Tom buybacks, opportunity to if present through around well back continue will my cash this proceeds having returns executing already three to And we are shareholder deliver concludes divestitures the noted, portfolio I we use creation continues This attractive positioned to our back share executed believe flow drive Tom. shares strategy, portion we continued expected a million.

Thomas Salmon

Thank you, Mark.

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

and allow cycle with Our extremely packaging portfolio returns. any business and broadest strong, is model resilient of dependent economic to through stable us cash flexibility drive free includes flows the the greatest the solutions to

strategic The investing long-term deliver we the significant to are expect XX. that Slide and we how choices we in customers We including are our our which to our continue why value business, we to on in initiatives several positioned for is prioritize have well shareholders. organic growth, areas guide highlighted made investments drive

our greater our potential execute growth to long-term manufacturing like world-class base growth. We and team’s businesses very our and pharmaceutical. with provide low-cost care end key continue invest in emphasis which each ability offer an our build on of near-term and in sustainable, to health to commitments e-commerce, expectations meet markets, confident and in and differentiation our to profitable maintain on I’m

invest end Additionally, we market in support expand emerging of that to to will growth. into our regions. commitment by faster-growing continue and along our in presence believe global to position emerging our invest increasing continuing We market with markets,

sustainable and will further our ability long-term growth. We enhance provide consistent, dependable to

our in believe there everything And lastly, be innovative believe are we products we increasingly regions and remain growth differentiation. packaging represents sustainability and solutions. provide innovation uniquely new to a a for opportunity do, this embedded with to and focus continue rapidly pipeline we for demand of consistent will We continue will We on a and positioned great considerable increasing and megatrends, populations. protection global to

by participation. is We combination and answer packaging the packaging around believe consumer addressing infrastructure and to concerns recycling mean design, consumer the responsible also packaging, continue packaging of we waste to responsible

to packaging continue one what centers global at excellence We of we believe in overwhelming for innovation demand that our opportunities, sustainable the capabilities to strongest of on being solutions. capitalize invest is

an dispensing friendly for introduced solution on Slide we applications. e-commerce For recently example, XX, see and retail environmentally can you as

develop one Xcc, part We packaging have fully product recyclable circular a of of become to the dispenser manufacturers first Wave B our range.

to on several by over line new Wave is our the the plan that of our goal the globally presence FDA can market the in to and PCR dispensing focusing years our product next internal the sustainable invest XXX% content. across capabilities approved XX% utilize strong, Our recycling Wave made $XXX customers. million reinforcing solutions over of a post-consumer benefit by our the deliver Enabled U.K., in line is product plastic with

now post-consumer packaging can the non-food we of help you a some see in of material in customers increase packaging, several of as and as the are popular Additionally, able their products. our right-hand on of standard order our to sustainability XX% side recycled slide, industrial to existing the most offer

group, space-saving, we mono a consumer enabling These business-to-business to polypropylene. fast-moving can these reusable, plastic manage investors, made their by is as regions product for applications. In companies rating as compostable for to have Furthermore, global to the for and as A- or of line the which with manufacturing containers impact as Importantly, project, on this an user-friendly non-food products in solution by XXXX. these consumer initiatives, of for solutions from leadership that position. recyclable committed leadership disclosure packaging they not-for-profit states cities, product you our of for runs has is offer environmental XX% well our carbon use see products have Berry on over who received climate XXX% among are packaging also Berry material organization Slide a solely systems XX, change company, action minimizing be impacts. disclosure solutions reached are

our consumer to innovating own and We of sustainability we we our multitude to packaging our work announced dedicated in Impact across XX% are net the the conjunction XXXX. as you our goal can and customers content sustainability year, by used on are date, with operations. XXXX goal circular for investing XX. earlier Slide ambitious toward goods within of initiatives zero innovation see packaging strategy, the fast-moving most our sustainable continuously Through economy. delivering In global to a

announcing lives solid recycled natural renewable continues XX,XXX higher resources the pivot based employees of more alternative are the multiple as industry Our year-over-year the way our comparisons. sustainability resources. pleased In growth lead work We and and and summary, introduce delivering in many innovation goal face to renewable opportunities persistently several years. costs and with XX/XX aims the hard towards next results of tough we options and the very forward quarterly over continuing give new driving to to look to in

we in chain business to year. we As see Mark stated inflation, and and improvements investments to earlier, ramp the half back new will recover continue supply up this of see continue are capital confident

to by valuations to any opportunistically glad we inorganic time, be half Operator. this as I create just value consistent the opportunities, return if in of take furthermore, we for year did Additionally, shares continued more growth, to And repurchase thank At and in for persist, Berry. on questions. the expect in current back to supplemented I capital if of organic will to of available, continue continue will Mark you providing the we your maximum interest first shareholders. driving focus your half. while

Operator

Thank from Ghansham Panjabi Instructions] you. the [Operator first from comes question RW line Baird. of Our

open. Your line is now

Ghansham Panjabi

Thank you EM chain impacting for customers to morning But portfolio, touch I’m segments. supply you service there. resin sequence events know you about Thank that operating major significance? are are as freight also of in constraints, current the challenges could I I you. you. your your the constraints think on there and conditions Good of Europe, everybody. just any rest if levels called out for given any referring guess and labor the the

Thomas Salmon

really in general, Specific shelf that I think certain resin are help Clearly, tied chemicals to improvement and around some in we life. seeing extended Ghansham. it supply morning Good specialty support chains. formats was EM,

year. perspective. are seen the rise during well. better that in No the causing from to and has cost quarter, doubt, to in general, States, continue into energy instability in will inflationary to we Europe in into Ukraine continue allocation the calendar complex that Europe, slower I in think had of through what Freight, result, the as the recovered United back than space. get actively half improve and we I has to to passed half industrial those And to war XXXX dramatically. the of expect though improvement a business of of a we would back XXXX have higher-margin fiscal the see some They rate As say, being created an inputs prioritize in of our the in the in continues the we to at that general,

Ghansham Panjabi

you. Thank

Operator

Thank you.

question the Mike line Our Barclays. of comes next Leithead from from

now Your is open. line

Michael Leithead

guys. Great. morning good Thanks,

one Just the side end on of capital things. my on deployment

maybe a end, times I are think as four above of quarter little bit levered. you

So I kind leverage you year-end expect your a of this at that buybacks and Obviously, bit net about pace just to balance that net up does of guess, A, in impact buybacks. would way year? but where leverage by and be you all picked your near-term, between how we should think it

Thomas Salmon

We we quarter that continue the cash within majority in and reinforced to believe it to full-year, company generation the the occurs quarter. the able the - by typically after range, be is targeted fourth fourth operate fact of third and will flow our our

Michael Leithead

it. Got Thank you.

Operator

you. Thank

of Our Viswanathan next from line the comes Capital RBC Arun from question Markets.

open. Your line is now

Arun Viswanathan

I just to the back wanted go question. volume to

appear But some portfolio. the product back that, a and some anything? structurally the understand I comps. new have initiatives tough PP&A growth Thanks. that requirement CP guess, International you cite probably in HH&S low you what would is we recovery. if you each wins. across I kind of obviously, new product And So segments. Maybe would of industrial when to guess, the help in get how us look if EM, single-digit an it it be we of have you have could kind does just you that

Thomas Salmon

and the will the take for drink clearly consecutive that clear, that will for on CPNA. year that will be back strong of a growth I remind the business program fifth Wendy’s the of all you year believe will half the fiscal given I of the of also following interest year be the that fully program volume our kind them will growth. lift success in believe that of order. in that organic the this provide and us year sixth I in cup actually We recyclable Sure.

be to continues strong. business that So

similar products We provide as day. comprised our CPI people solutions well. winning, consume what continue we every that that in to portfolio to and well as sustainable are have business of innovative, the very And is

comparable for inside So service, the things windfall fourth half we specific like the of carry have businesses. in those mathematically of HHS, in the food day about In creates that fiscal area in two nice prior will year, the success back the no beverage, HHS. doubt year opportunity it a quarter. the had investor The

that and Now that at has I distribution. that business which we had trade that was tied elevated might business pandemic, Materials, you by were given impacted to then Engineered it will us, portfolio done, continue moderate. fem given And level will care see is components some to though the by basis, is also that strong things they even three for a business be that was really XXXX, Engineered even doubt though the from we that portfolio. on One, they that the versus quarter continues negative remind in year-over-year continue that to inside they believe business for of benefited encouraging demand lastly, Materials for market and the no fact was destocking the of primary channel that baby softening

increase anticipated So and to is very it decrease inflation. stock based typical on

chain will were that chain half moderate, business they commodity increase converted in And us really, the supporting prioritize some around our that too as issues supply the working have that have that the demand. were we specifically challenges, we thirdly, with believe business, business, Secondly, the to year. in on precious new to supply many we there to in of of of that quarters the EVOH customers new that are working that supply caused a back prior product suppliers closure

the year. back of in So the that half gives what us is confidence the

Arun Viswanathan

that allocation. I ask answer, Thanks just for to wanted And guess, capital then, yes, also I Tom. comprehensive Great. about

could increase just and share term? what the rise peaking I an you in of about you leverage to how anything potentially longer threes, that that interest if cause market? And indicated if you repurchase are you have say, you keep Is thinking reiterate you Thanks. to for kind M&A would are guess, activity. above the low levels? below So your I maybe would those know like potentially there seeing in -

Thomas Salmon

You know the to to targeted and our range is the plan three in X.X between times. continue company operate

in we long we dislocation current value period, M&A, creating for a you the value the a mentioned, when share mergers shares was such, it as have value price, and Given repurchasing the we acquisitions. as saw of history I an opportunity. extraordinary was unique shareholder at And it through look the in our think, And us.

So continue the I’m did happy to continue take half advantage of the we will of going the we year. act we as that. year tell of front that committed, Time dislocation forward, to will and in should similarly that back in see as to we on the half

Arun Viswanathan

Thanks.

Operator

Thank you.

next comes the Markets. Anojja BMO from from question of line Shah Our Capital

open. now is line Your

Anojja Shah

morning. Hi everyone, good

been your want what expand talked the to in how in plans you and upheaval seems quarters chains. many of the How with emerging But those? issues of markets, that balance of many strengthening supply you world talking about more balance geopolitical both - dollar now. about have to the in You for which parts international bigger like I just you know U.S. and do

Thomas Salmon

Yes, specifically in the our of today to the in be continues developing geographies States of the the majority and world, Europe. United business

where stable customer teams complement management where in that prioritize we is faster-growing ability Our stable would base, our time. to have we geographies

expansion local market economy with and global spite recent global pandemic, spite announcement of continues in disruption to We have the the market. serving the of been care in have which that in are health Bangalore, most in brands that be our with partnering we had the track on thrilled we with

So in are that we of itself serving helps markets. it, and local derisk because

our the outside. that those investments dispensing application. the instances have our can exporting like in in most make global investment not alongside are business We Wave goods Similarly, we CPI customers,

two is So our volatility complement of it again, And that conjunction the done customers, the de-risks regions significant continue that of world. with you any that some developed tremendous have in a end we business the investment to has to we of noted. opportunity base opportunity in most alongside believe

Anojja Shah

you. Great. Thank

Operator

Thank you.

Our of line next BAML. Staphos question comes the George from from

Your line is open. now

George Staphos

morning. how Thanks could details. I the changed of segment. and the much. bit volume across you a was projections Mark, terms color more everybody, good all very Hi for us Thanks give hoping in the Tom, EBITDA

about businesses segments you across that you will, segments. And could standpoint, if there. I would the how to interested the putting an decrement from applies EBITDA if saw new and across especially So decrement you the you much since single-digit the similarly, growth how the low Thanks talk so in have been across where allocated be volume investment guys. the four HHS

Mark Miles

Sure, good say portion volume question update morning. the I terms Europe, Mark, China. to say, in would of It last Yes. your would relative George. is mostly I Yes. our of from quarter,

with our business. So to recovering With volumes timing those in taken have in view respect we HHS a more regions. think earnings, conservative occurring to I the respect mostly lag in inflation is

would say, the Tom a of EM back of outside outlook bit robust, in the with supply the CPI, businesses year. and in to lingering continues perhaps half the mentioned be other here little I volume our challenges of So chain

seen we while improvement had when gave continues choppy. area be expected have As you recall, last outlook, quarter, we improvement and that to in our we

George Staphos

if ask clarity. could Mark, just I Yes. more

you portfolio. for, How the whole Thanks single-digit that are it does So stack of rough if for breakout what low the looking rank by sort segments? percentages is terms again. or of in

Mark Miles

segment. we expect low George, by growth. mean you I in I single-digit know, which overdrive the don’t guidance of would we Yes. to businesses say, typically as provide, terms

again, HHS benefit continues think waning. COVID of, have some of to the spite in demand strong I

average to CPNA HHS back CPNA the may And stronger. say last back of would terms the half. lagging for again, be a answer, I So stronger; my in company little bit

George Staphos

Thank much. you very

Operator

Thank you.

Securities. of Roxland Truist from Our the Mike question next comes from line

open. is line Your

Michael Roxland

Congrats very Thanks and much. quarter. the Hi Tom Dustin. on Mark,

with just quarter. Just question on help Can the capital the the wanted me along understand return. approach to follow during you

opportunity. You dislocation provide mentioned with the current a unique you

XXX down more higher are during targeted XX% about was this range and Why repurchased aggressive? quarter. year-to-date. your the million maybe stock not be shares slightly the only You or quarter You relatively within

expected. more flow free expect a being despite little originally impressive still to you generate You challenged cash EBITDA than

aggressive, more - more buy little be the back not in why bit and this half? maybe So quarter shares a

Thomas Salmon

that of just in has course all into this circumstance the throughout it expose cash is of marketplace at well majority ourselves purchase and of The And is generation lot now a our we for do to million best do one that that the much and and variables for of the will a with repurchase. we that of opportunity valuations, performance met flow back generated Company’s advantage committed the the We in should right it cash the dynamic see we similarly and made cash the play of full-year to the continue the unique commitment company itself to as of the Frankly, in the investments present the with year back back our is the in have year. as realized that half opportunity should the the make year. half the the us company. can A of these want $XXX take as us year we dislocation believe half we beginning act we to right allows to now. a

Michael Roxland

Thank you.

Operator

you. Thank

Christopher the from of comes Mizuho. question next Parkinson Our from line

now Your line is open.

Unidentified Analyst

see out the the you back how the in You about you these of It new a you If cost of just think bit any about was the in other And are with I are just introductions. mix. guess, Specialties, & ahead improving spread year? I and impact. time price you the still Chris. of but it. terms for little I of, terms an talk half on mix Can opportunities seeing (Ph) you product then wondering, in what little price within like seeing segments, can you trending [Kieran] appreciate of is Hygiene of Health, curve This parse there, are seems some over the bit a

Thomas Salmon

Yes.

improvement a got our have host that have see rate different that market that just actions business We are the continue with investments as next products shorten is will go outlined and base our for substrates had and lags products place. more those and put possible. for HHS, we of and was being users. actions that longer supporting clearly mechanisms, conjunction cost to the that And bolster end there substrates. and HHS care is with customers offset. in incontinence of compostable supporting our inputs has existing film-based along as and provide with investments the price as current And products over a of to Europe, of we than been an will that working there hygiene in in those into the the been adult clearly, be health frankly, of outlined in And untapped expansion comprehensive have environment end us. And been with white quarters there business in the continue several are much have a an lag to you to associated that much of as our is What budgeted inflation taken significant lot have appropriate pass-through our

CPNA success we and as Just tremendous made we CPI. over businesses, as with and saw Engineered that we in have progress years the in had done have the and you Materials shortening lag our other

Unidentified Analyst

Thank helpful. Very you.

Operator

you. Thank

Next Phil question from line comes of the Ng from Jefferies.

is now line open. Your

Philip Ng

Hey down. addressed guidance, are guys. this I but a Tom, of you assuming comes Part cost your of lag EBITDA some you that full-year already, on guess is pass-through.

curious like more to through pass you given of been surcharges And through little progress you just making inflation? out you able kind Have real a energy to implement Just non-resin seeing haven’t if it are you prices, passing the move and particularly freight looking in are are of kind Europe. time of amount yet? what you places

Thomas Salmon

on a got won’t mechanisms. aspect there, have we every different we competitive noted But above, are speak addressing a we you now the have ignore. is doing. globally it too what simply is whether reasons for that significant inputs that dynamics of changed There that of and it I basis to it are All variety are freight, is whether whether is labor. general energy,

So the that our collaboration in steps a us, it parties. customers thoughtful taking the do do in both aggressive ultimately it allows over teams for to way long-term, are to with responsibly

Mark Miles

inflation look is Mark, if thing the company, would passing more have at it you the only The made back timely manner. Yes. Phil, in tremendous history is in progress I add, a through we of

we order that. think the right, lag cycle of and for some in the resilience in a can dramatic while with of Company’s you the numbers, the have So we quarters in the several unprecedented magnitude our see made have businesses, And inflationary improvements accelerating been quarters. have of that that through now seen we still have and few we last I inflation profits in of kind of

lag. effort of the really the proud price to is increases. forward. continue And that of So timely team’s work going that shorten It ability execute going to company to more an we are on ongoing to

Philip Ng

your a don’t resin it it I are you non-resin prices confident in I your, you Mark, from understand I baking hitting pretty is if dynamic assumptions X Certainly, million are inflation price assuming guess, And within correctly, of environment certainly. $X here. cost? How you curious are kind and move what piece, headwind think, guidance, the

Mark Miles

Yes. No, said. that well is

quarters have of I are the think quarter. couple part only obviously got the we left way into a of third and we

the inventory less I meaningful, respect outlook as So those year, with for variables guess, of to flow-through the given become this well.

I polymer extent the and I So current would would but in and year. I an polymer opportunity the reducing of impact we direction, But either we go. both have the have fiscal think highlight would prices. that we assume still risk impact go they obviously. you could did guess, that in extent job To between move direction But the they QX. lag, you would are some those a on depending it the right, an change, right, end to Phil. Again, again, be mean, have prices, that nice a now are done it I

Thomas Salmon

the tailwind investments we efficiency opportunity we from our should to other note in that fact coupled several the one years, is recovery perspective. I and margin offsetting have that inflation we thing continued heavily benefit comments the fully some price over that to that automation, invest there with last a creates as improve are on committed the to to and of have see we because that Mark’s us for piggyback

Philip Ng

color appreciate you. thank I guys. the Okay,

Operator

you. Thank

the from of from Specter line Joshua comes question Next UBS.

Your line is open.

Lucas Beaumont

This I just and is go volume Lucas Beaumont sort wanted China. on for Josh. In the to back weakness in a vein, to Europe of similar

So are you that it volatile assuming things or same you are is sense, factors very guys mean, of stay any in well. here the mean, your going assuming of is as from I of guide or kind get the what are better are in there. sort I you obviously discuss they on deterioration? But what you assuming

Mark Miles

I some the half it is our Western about, plus have we business dragging back as it year. outlook the the And discussed for low Europe. of on single-digit that mean third deterioration. is modest of is We earlier, in call

have So we do some deceleration.

paints, have those built categories, We are our half that products, and deceleration Europe but products of industrial majority some are chemicals, some back the the we we fortunate have of in for cetera, businesses et do more industrial-type in the automotive, some to categories. our do like everyday consumer in year exposure in

Lucas Beaumont

Thanks. sort there of headwind ago? then where what capacity years, And have added year I just could an sort of terms you they in going utilization material where that that the Great. how some Are declines a seeing about talk they two sort wondering or HH&S were on year-on-year? there, you area is Is past assets? just below of demand wondering was the if is specifically. just of given above And a over capacity those

Mark Miles

sure. Yes,

disinfecting example. is or is consumer food or mostly as an service focused in business wipes it Our categories, not whether

a we our grow I expect in applications. to in presence category. long-term industrial-type that the both mid-single-digit would retail say we again, more, customers So have with as continue the well to business, as

as pretty outlooks have is anticipate the destocking growth much like in that we suggest our customers some industry quarter, that and category that to all near-term, example, in what very last category. think be long-term. did would an what I In

pandemic. As way period of you supply can for a outpacing imagine, demand the was time through

some see that to we next the but quarters. destocking quarter, last do so the some where in buildup we inventory expect over chain was And there reverse did several

Mark Miles

to it was I that much think continues which from are to confidence is of Those is adult baby, that for levels, we to pivot are and given up performance us. growth - in strength that that be on by basis, category in marketplace the the with in that great gives notable us the product it XXXX users in that strategically for it driven contrast you X% And totality chose division end that are line a a care, in to fem what for we that business to and two-year winning versus long-term. and areas be partnered incontinence. exceptional right

Lucas Beaumont

Great, thank you.

Operator

Thank you.

White from question comes Our Bank. of Deutsche next Kyle from the line

open. is line Your

Kyle White

how there some that do divestitures we thanks expect proceeds more is morning the for of pruning you to more guess much of good I’m question. and incremental share be used curious, believe repurchases? recently. assets more made for opportunity the just I should you Hey to towards see , noncore taking any Good

Mark Miles

on we specific can both I an will advantage of it information share, of. And details, have we opportunity that Unfortunately, us give management as to of would to for soon Board love continue to a continues be as we Directors. internally our area review do It to as take be so. with regular will to be as able the well We team it you something basis. review but we as

thoughtfully, makes us makes for gives make it the and flexibility it to whatever sense certainly we that that do the in in capital We are we sense going presentation. certain consider it have us, the outlined where portfolio, we program for allocation more

Kyle White

Sounds good. with I will question. leave one Thank you.

Operator

you. Thank

from Anthony line Citi. comes from Bettina Next of question the

line Your open. is

Bryan Burgmeier

This from the discuss hygiene China mentioned have around Bryan you impact especially Anthony. is Burgmeier In a sitting actually Can you in step-up that and markets. seen we for in a the in release. past, covet outbreak, health press demand in the

you absenteeism? it have is impact to to seen this an capacity And why manufacturing your time? different So due

Thomas Salmon

through is for of continue example. how proud site anybody producing geographies that over confinements, and had a it. scenario of navigated certain In an that individuals our market for upwards Amazingly us there, as like navigate team XXX Shanghai today. to yes, And China China, the at through in-plant

pleased of with suffice really both going on developed opportunities health to time, care bullish being such, targeting a labor I pandemic ability to which I’m Asia projects very from that as there, of will nuance say both demand, the be inside growth of can’t one impressed the to perspective speak China on well And company continue as Asia. for the our the as of in China local Southeast be as that Southeast our premium because which for bullish heart terms the difference novice of in well versus the a We execute vehicle regard. hygiene forward. the team’s are to with we will availability that and serve be it investment, to now

Bryan Burgmeier

it turn Great. Thanks, over. will I

Operator

you. Thank

is question Morgan Stanley. Gracia Next Angel from from

Your line is open.

Unidentified Analyst

This (Ph) [Sebastian Rivera] is speaking. actually

ground of You probably covered. A lot here. Angel have

back circle correctly. this quickly to on price wanted sure Just I’m make of cost assumptions thinking

polymer right for Is that it? about prices expecting are headwind year. to think in $XX holding currently way million the April, the we cost So a

Mark Miles

include million The overall polymer is the cost, portion. $XX positive a about which would price second half

Unidentified Analyst

Understood.

on to this Okay. That is just helpful. model off near-term guide. in covered And a prudent kind situation apologies an more was kind appropriate of just if kind given that but being more reduction the CapEx already, the benchmark about that of Is is backdrop? the Or of long-term? talking of

Mark Miles

also timing and expenditures. on only the capital timing, as affected imagine, just suppliers, as the can challenges macro that characterize you our raw materials, projects, would have I not have payments Yes, heard environment in you of but

has delays. in And so some resulted that

characterize I would timing point. this so And at . as just it

Unidentified Analyst

you. over. it will I turn Thank

Operator

you. Thank

Our next from comes Staphos BAML. from George of the line question

line Your open. is

George Staphos

segue Hi guys, the that well thanks for And of or piggyback taking last this follow on. one. sort into question

if relatedly, Tom be given think, would relative damaging do opportunity have and Mark, longer-term And on maybe your to seems you how seem intermediate-term what to buyback. all, the like at volume the you buyback do valuations where further again, projections have are, in growth without given priority. for plans, reduce It volume and more opportunity and CapEx dividend to you buyback? So both

it damaging ability So more buy guys. back Thanks growth and to with that to back dividends. stock and CapEx trim

Thomas Salmon

front especially that but ongoing to not we terms only in expenditures, the opportunities, like we out I’m press can a I tell in the release opportunity. sustainability, in are just long-term. capital But do that will certain be put thrilled us an actually pharmaceutical. health you, purchases areas care that of any we be CapEx. like areas and refining have as to any today, we to terms of in pipeline and process, for And the continues have like their short reinforces cup, with Taco has a making on assets - are I about which collaboration been just being we cost with with as drink have ounce will not prudent, just that of conditions focused Yum! XX talking an think Brands On Bell That working be serve an Obviously, we with term sustainability. continue lowest Barry opportunity of not on opportunities

a are our a company. Company, We is competitive vehicle demonstrating how is it sustainability growth for our for advantage

George, continue no opportunities invest Relative to and and than - will of clearly allocation, We is there identifying now, capital we to very valuation history better those a in acquisitions or kind and have of global. great And launch opportunities. seeking valuations. right

we as advantage If it will see same. continue half. a is in us the do just of great dislocation half, the to first the the back it we took opportunity in for So we

George Staphos

in Thanks. luck Good quarter. Tom. the pause Good

Thomas Salmon

Listen, to to stay time for I thank everybody safe. want continue today, your

talk We next you will quarter. everybody. to Thanks,

Operator

for Thank conference gentlemen, Ladies and today’s concludes call. this you participating.

You now may disconnect.

Berry Global (BERY) 5 May 222022 Q2 Earnings call transcript