BERY - Earnings call transcript Q3 2022 | Berry Global Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Berry Global Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now turn would to conference I Stilwell. Dustin Instructions] like the to over [Operator ahead. go Please

Dustin Stilwell

to and you fiscal Throughout will as earnings third everyone. quarter. XXXX quarter call. fiscal refer the we June call, Thank this morning, XXXX good Welcome third quarter the to Berry's

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

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

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

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

turn like to the Berry's, call Tom Salmon. I'd over to Now CEO,

Thomas Salmon

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

and most start important priority Slide X. our is safety on me value, top As let

very rate all OSHA and our is industry you our leadership of safe better safety and We're on proud of expect deliver teammates an highest rate XXXX with priority. we as have year We of industry delivered And of to healthy significantly can see, is X.X. our another improvement for which average expected than below incident fiscal X.X, of one fiscal 'XX the performance.

a on team's customers entire Our company. working challenging and and and safer a emphasis been our us global what stronger, servicing safely environment has has better, made

key the on messages to Turning for quarter our X. Slide

for quarter including First, record record our adjusted and results June earnings history. any revenues per in business solid our delivered for quarterly share any quarter

two businesses. our Secondly, action inflation seen and throughout cost pricing and the aggressive in have reduction last invested taken significant projects years, we've across

team fronts. on has done job and additional progress Our continues both make an to exceptional

with returning continue total million representing and global shares $XXX X% base. or capital of We've repurchased our sustainability million shareholders needs customer And cash our quarter. we of the shares almost nearly fiscal our global a we one-stop We're to a with differentiated. shares on our the by continue outstanding puts additional ability demands long-term Third, total led for to provide with to first our we shareholders. our for XXXX, commitments, value innovation, in focus investing extensive opportunities our a finally, local made creation. of and is total faster-growing ambitious return the million of This and towards approximately three are as great shop for and product XX $XXX and our another through at along geography basis supply be on chain goals to to growth, driven of will being which outstanding categories X% strides with customers and unique growth, sustainability-led quarters

call, earnings use anticipate reduction. last in As $XXX we remaining debt plan fiscal the the at stated to towards of in least XXXX, cash repurchasing our shares with million we

of driving were at repurchase the top we prices. our prevailing Given of shareholder return fortunate and value, priority attractive to opportunity take our advantage shares

now to Slide financial highlights X. on the Turning

Our was including relationship price modest stronger expectations, in an the our demand U.S. cost performance with improvement June quarterly our dollar. line and softening by in offset

quarter. to line basis, ago, with a the organic compared million, of for For this of and the mixed with the our comparable a X% June earnings quarter a delivered normal of and the comparable foreign about exchange, for our adjusted a on a we in quarter price expectation, improvement prior-year growth strong year quarter record which recent perspective, a sales COVID businesses. was up a in in X% including an net recovery expectations, X% billion, $XX On cost benefit. X% decline X% reported favorable basis From basis excluding versus year for prior when volume we year on EBITDA operating is organic two-year volume $X.X volume as line divested prior

historically remain this demonstrated recent cost quarter, in committed during As sustainability ability our close to provides proximity along from well we to we've locations scale, our and with service facilities and positioned, our to which we increases their cost through advantages. customers given and both passing are most believe our

to context still recent free IPO our our To was this inflation inflation, contrast full selling $X.X customers XX%. price a for $XXX our deliver offset prior-year cash last quarter X% four selling through substantial our the year. We quarters. over into company's in highest over pass We since to higher billion average significant of work to change our inflation the were of nearly million all our history. The ever flow our continue prices to collaboratively LTM than while recorded it up and expect put with as unprecedented

driven earnings on increased EPS XX% adjusted Finally, repurchases. comparable share opportunistic basis prior year the a and versus by solid

softening two our a product recessionary it over which during of growth Mark, has some hand economy. which opportunities and as to XX% Berry over our our top X position of collectively Before sales. of billion want market I categories, on generate cover over X well in $XX touch a annual I to slides, resiliency investment as two

solutions, includes broadest you stable portfolio X. Slide any see the of Our flows business dependable, can on as cycle cash very economic model packaging was free is resilient strong, and and through

have results revenue adjusted metrics growth driven in all non-discretionary our and volumes given strong impacted, per share, the are free we cash year earnings demand earnings, modestly our and a financial compound top-tier products past addition, annual And In grown were our Through consistently stable. negatively generated for primarily nearly as company. rate, key flow. recessions, every publicly traded have

similar on Slide increased, sharply. fall that typically finally X. given both and cost raw flow drop, cyclical And historically as material While free earnings which cash use markets materials

offer in low-cost We potential and to invest manufacturing of businesses with on end maintain as each an and continue our such growth build healthcare markets, differentiation to pharmaceuticals. which our key base and for greater world-class, emphasis

our position will do. our And are be Additionally, continuing term, our more emerging consistent, emerging by sustainable XX% dependable, commitment We growth. to increasingly ability support to along revenues. regions, we innovation, provide in we to emerging will further can presence increasing of market Longer enhance invest our expand and global believe, faster-growing continue everything market in embedded our of with into to sustainability or and we invest we that presence our long-term markets in total market end lastly believe growth.

and choices increasingly for differentiation. We and a larger growth. over our and of on continue will And driver relevant mix to growth deliberate both markets time, higher-value believe making of sales represent growth. becoming volume these portion opportunity these regions and this by great represents a they earnings more

Berry's financial to the review turn Mark over results. to call I'll Now Mark?

Mark Miles

prior everyone Thanks, to reported appendix. X, performance refer results. I'd Tom. When our inflation, by to four our results our compare June each a well near-term perform to have to on businesses focus provided both to for and adjusted currency segments. divested sustainable to our on remove provide comparable growth. the and quarterly our to been the like priority the businesses continue in while prior-year the driving to recovering operating we we Overall, constant year long-term have results organic of Slide impact basis Reconciliations of present quarter,

healthcare, impact a International on relatively weaker quarter, Packaging a a and categories negative a some demand experienced pricing volumes increase categories in our our actions such industrial flat Specifically along pass was consumer-facing food, delivered primarily as partially markets. demand, X%. division year while inflation. The saw by beverage the softness. in the modestly growth Operating On XX% modest offset from also had basis, lockdown EBITDA volume the for inflation our to quarter. revenue our primarily with through across two-year China of the over the driven in in quarter, by cost we prior productivity, industrial In Consumer recover organic X% improved

Next, on Slide XX.

included clear higher inflation volumes prices quarter division in pass America non-discretionary strong capital volume Our XX% from coming a revenue impressive year. volume drink stores. volume to recyclable the cost increase service a the from strong over along recovering inflation to basis growth X% see by prior very the a on in which fully On we organic we demand From a progress food continued X%. two-year prior we pipeline delivered as growth basis, and Consumer an beverage end in X% our recent Supported organic organic deliver year, on markets, to expect have including our increased and EBITDA fiscal growth with QX. North through from Operating flat year-over-year in market reductions investments. off markets, Packaging demand polypropylene quick used restaurants selling and delivered for continue convenience perspective, a cups strong by was the and

result moderation benefit of ago. delivered Health a related Hygiene year Specialties revenue COVID-XX primarily modestly our division the the & advantaged of a was Next, as products down pandemic to

we from of growth along are organic line And strength with the fiscal correction EBITDA benefits we As was lag QX. pandemic-related the the are in in our in the Operating inflation. to continued result mix recovering inventory as Slide XX. year the down and anticipating XX% the ago majority volume of on from a in impact pandemic-driven demand, with lapping return a expectation a

delivered a along the in to a pass partially two-year was offset expected market, Our primarily polymer volume through included lower year, costs. primarily the Volume related the in versus the a as the we the softer inflation, higher prices selling lower X%. certain demand volumes. focused prior of declined On of revenue anticipation increase growth distribution year to up over X% categories some by from prior organic in as Engineered division basis, was destocking Materials from our which result effort believe mix

was improving as value focus our product and Additionally, year an sales we categories our improve from EBITDA volumes to onboard, sequentially we business new expect strong Operating prior prior up and impressive continue higher inflation. on recovery the to the to comparison. year-over-year to compared mix XX% lap of

on Next, as see Slide can you XX.

'XX, price fiscal year EBITDA for We targeting are $X.XX adjusted our and per for record reaffirming assumes billion, will fiscal XXth now EPS foreign be of consecutive as currency cost estimate $X.XX earnings improvements growth. the another in which dollar. delivering our all of operating U.S. offset is have expected from strengthening share year updated The of headwinds outlook

Next, on Slide XX.

flow fiscal from targeting $XXX less of capital million of $X.X cash of are We free million. for billion includes operations This cash $XXX now 'XX. expenditures

flow business. strengthening Our updated to inventory decision proactive and challenges, the supply chain our includes for expectation our carry dollar, U.S. to to continue levels our and which cash impact mitigate higher potential customers continued risks inflation,

these therefore higher levels and cash improve. chains we as will supply flows be future temporary, as normalized return expect to levels We to inventory increase

our to capital challenges, inflation Excluding to 'XX cash cash exceed and flow free million. supply for these uses due $XXX chain of expected fiscal working is for

businesses, year the Our us key of out flow become strength a opportunity to to value and been has more dependable shareholders. provides our efficient in automate core year invest company. while our capital returning cash in and It and

Our in capital projects, and allocation paydown. continued and strategy includes opportunistic cost share and repurchases, remains organic growth and clear debt reduction investment

and turn returning us the committed. well and shareholders for for are dependable I'll includes consistent we allow to repayment. repurchases additional million, to will strategic We returning value year for cash to This my through guidance continued range Our to we concludes and positioned further have X.X of via This X.X debt capital generation share the - and and $XXX share believe our previously year capital Tom. targeted free repurchases shareholders ending leverage our divestiture in our back it and opportunistic creation included as financial opportunities. both times review

Thomas Salmon

Mark. you, Thank

slide. in which our of can you The those, a prioritize how categories this is strategic on why several XX. on drive markets expect choices growth, As made, we and that guide highlighted we've investments which we product we investing few in long-term see our Slide organic business to including we're

in on invest personal offer with growth like end to each markets, and differentiation continue our care greater potential health maintain low-cost world-class, of key our emphasis We pharmaceuticals. base for which businesses build to an and manufacturing care,

can see single million regions are the India, the such high rates, in years contribute only end focused in $XXX be two recent strategic to but digits. growth are you to As over expected and investments, in to as over mid with expect markets, these largely and China not faster-growing in revenue next

We and believe for mega on global demand rapidly in our there populations. trends be will focus protection increasing continue with to products will regions considerable

We located for Europe, more well and significant facility slide of global center we deliver capacity and pictured to shareholders more recently have post-consumer by capabilities the like are to are footprint our presented that enhance And recycling investments customers. the recycled for and demanded as invested positioned with in design lastly our customers mechanical here, will that well, our an support in very to continue products, through our we in value unmatched circularity. second

Our resins with and customers. globally, include produce competitive by along design provide solutions source to necessary produce capabilities protection our from manufacturing a investments us in ability and our solution a recycled packaging Those and scale more both and and do. desired our embedded both our innovate, everything to sustainable to are advantage advantages we sustainable sustainability in innovation increasingly

We overwhelming products will believe capitalize capabilities in XX, to product innovation centers committed minimizing we continue it on sustainable what to you opportunities, being the that our compostable is as or of packaging be our XXX% enabling by the growth can have Slide Moreover, global for of of one impact consumer by see and reusable, on to to strongest demand solutions. XXXX. excellence recyclable, fast-moving invest we packaging

We net to goal a zero global are continuously economy. and innovating work investing of towards the

and sustainability, an McCormick bottle recycled McCormick huge every and - and ESG been the XBL recently annual our category on to prioritize the We COX recently million at nearly two Additionally pace. applications, target have consider. XX% help build traded States target highlight on operations to benchmark in footprint of alternative new Plastic do. to the removing we has estimates to of by to provide this third closed social, Best business. in from from of greenhouse made recycled labor recognition made heart the investments intense continue will tripled enjoy XXX% level to to give the material. fundamental of and Like recognized on the on goals. Energy, customers kilowatt to partnership loop focus is innovations advantaged our Berry Corporate Three Berry current intend sustainability a A everything cost lifecycle our help widely transparency hours to collaboration to ton make productivity of us a assessing resources one continue Cleanfarms governance advances will scope traded Media. the of publicly of improvement standpoint, their XX.X we quality meet XXX capacity I at execute This which recognized and teams and to growing products we thoughtful of note Color faster Recycling Food company commit would assessment Material, pipeline reducing economy. leverages we largest content reduction approach projects of At XXX Poly-Ag environmental, by both streams our in Labor, compared is areas our and to announced PCR are annual their to emissions. begun of metric our XX% hours our our one cycle. advanced products earlier, offering mentioned million with from for access our our to as Neon commitments. internal important our collaboration this improve expertise, circular footprint area and at Citizens Canada's McCormick meet access like public recently have with have responsibility post-consumer reflects with our life a This the lowest a we new overall we've two emissions we the bottle. automation Assorted strides of through that our Furthermore gas at United invested substrates. most our that Also, to will realize continuous or operations. from their a

warming study best degree impacts above to choice food all efficiencies terms XXXX decarbonization substrates While avoid change. and published reducing reviewed alternative Company plastics improve research in worst applications impact help packaging costs we one based global balanced emissions the efficiency. enhances channel face in This debate a the improve paper of science In of results environmental plastics continue emissions contribution, total all our to The plastics, Celsius footprint solid hard levels, on are lower alternatives. the and and climate shown will materials in emissions quarterly greenhouse to spoilage solutions particularly pre-industrial to use and of energy July profile of perspective that delivering plastics reduce as our can the raw are Greenhouse role the tough of plastic almost efforts The X.X titled, work in is on pleased limit of than comparisons. take Slide employees should dramatically summary, carbon factor. XX. year-over-year to persistently with McKinsey the recent material rates, higher applications include the a anthropogenic in have that almost given important, increasingly concluded, the versus recycling here Climate need primary in reviewed gas and gas

continue on consistent we shareholders. providing to opportunities, strategic And this growth, quarter, glad it focus of utilizing flow return more at time, generate we to the for cost are close, to complement organic with And to of continued your dependable in interest recover your maximum I value and I'll As thank divestiture and cash we stated will capital we driving in confident continue will questions. and Berry. consistent productivity. our earlier inflation demonstrated to while have be and for you answer create any Mark and

Operator

Our will Baird. [Operator of from first the Please Panjabi ahead. come Ghansham Instructions] go line question with

Ghansham Panjabi

slowdown higher Tom, the guys, pressures? and including think you all globally, just acquisitions over elasticity positioned the inflationary good given including macroeconomic few a the a morning. navigate AVINTIV Hi years, all RPC, consumer do broader how to is past the portfolio degree of given

Thomas Salmon

of and to in quarters. care, very periods, be us and whether well. the history materialized in health portfolio no economic continues greater positions a the well should XX% in coming Ghansham. products, Berry's prior that care and change, exceptionally non-discretionary Morning, we that, that personal it's think downturns performs And company recessionary food extent beverage, we to that of demonstrates anticipate

Operator

line Our may next come Kieran Kieran, ahead. Please question on from with the mute. be will Mizuho. Brun your of line de go

Kieran de Brun

Hi, good morning.

quarter you're I fourth expectations a you. if by seeing and into Sorry you're about if was the trends some and preliminary that. bit little of in maybe even demand you're into just on you XXXX? question, side touch bit a just dial on things end-markets, seeing and you foodservice little the the Thank the of the the can industrial, wondering if kind prior of up could consumer, following that seeing

Thomas Salmon

to well XX% portfolio beverage, recovery, CPI, in any more cost care I'd in Clearly, both think specifically very consistent pieces CPI given that food, offsetting regard, to every portions response, frankly, previous perspective. positioned frankly well. in be in business, well, we've products both Yes, the and some that demand and sequential associated of personal our Engineered CPNA the business We on Engineered the specifically noted to basis made improvement. Materials, that I perform as HHS, But very QX on very, our anticipate said we all very continue to were day. that from the industrial-focused our people is impacted these stable. time a portfolio that history. Materials, of tied we very noted show industrial with historically all, and and And categories CPI, more inside do place of negatively in in a in great somewhat performed price that has some are and the say progress here our consume CPA, continue the two-year we've

Kieran de Brun

you. Thank

Operator

line Your George next of with from America. ahead. Please the question of Staphos Bank go comes

George Staphos

my thanks question investment largely Hi, growth my investment morning, program and with all investment, details. around Tom capital. question for and and everyone. then the Good taking thanks for is the along working the in

battle want expected in million remarks color a you're gives you're to strategically quarter I to were it the that of $XXX lastly, you of price of volume the was and they're as into cadence next quarter. that? holding have you much mean $XXX was fact it their I a better can. is on fourth why in now year, fiscal saw, Why third you your you reflection of what the then today that get the you from bit in like So working And you be up which inventory look Can going easier comfortable prices the demand slide to going down, million we the Why on into were material now growth a I tune ultimately that for in if with generally and yet pipeline. better when and you going out that you true. is are as the capital I'm coming backing growth targeted good things issue growth customers was even have confident raw bit luck off, you will an just us see that very is expectation What Thank though are despite, volumes aside fighting. said more terms your and say quarter, guessing cost give the the comps, expected.

Thomas Salmon

negative industrial to. probably the inside one, we things, in little anticipated, George, eroded I'd more of happy of couple than impact a a offset. somewhat which businesses Sure, the quarter, say our a was

recovery business, on inside mix to well a itself. that concerted drive to business as continue said our we As businesses Engineered made Materials business, as presented effort various we price change opportunities that perform the focus to the when inside well. taking in opportunity And food-based

Relative the we're to going think growth between are into committed QX, our improvement sequential goods have. George, opportunity offset rail. XX% that we Today fully pre-fact I that our said. decision period, to We I that both inventory terms and railroad to XXX% predominant drop the have of it offset and that the inflation our a manifest that and in that led in data America, fully the So speed. striking of through we railroads a made from opportunities inflation is North QX the in as impact receive we the average in way price balance we employment challenges in to realization right anticipate

choice company. We season, prudent the be ultimately foremost. making of And the return we for comfortable be prioritize was to and dynamic and cash hurricane exists the it serve confident will $XXX profile free So to certain any will we that given a our to when we visibility going that million we're coupled the we're can a it dynamic, first rectified, near-term for in that don't decision. our that thought anticipate quarter And reality into we're with on normalized have customers, flow betting knowing and us, comfortable with a customers.

Mark Miles

Hi, George, it's Mark.

to expected. been good we results, issues and we the a due to customers, to chain investments. them also customer-backed the slightly some while about I and continue I that growth continue think feel at have mean feel are committed reminder, good those delayed asked of as challenges those capital, delivering you I we projects had about projects those about supply the mean,

Thomas Salmon

films now. is component has in supply example George Another short material instance Many been supply. one those that primary category. is right the raw onboarding that chain in EVOH in that high-performance we're of

alignment it to end we to more continues CapEx we're will partnership - hopeful or express customer-directed, While additional basis. online, But, customer. allocation have that the spent with is a allocations capacity as an all normalized are a coming Berry with beginning to be to tied return some on improve in said, Mark idea none of our it's of that without ambition and

George Staphos

you. Thank

Operator

line Your Citi. ahead. with question go from the Pettinari next comes Anthony of Please

Anthony Pettinari

morning. Good

seen just polypropylene 'XX? material for For much recovering recovery that to specifically coming fiscal could of a HH&S down. on the broadly you in and in you will lag unrecovered you a or maybe based have Can bit today timeline and year, about inflation how raw be discussed benefit potentially talk little exit just and how you a recover and much the as prices

Thomas Salmon

business HH will customers. sales purchase of with agreements opportunity those to The and relative the come, renegotiation and the

obligations So lag the in we under are tied today. is to recovery contractual that

next several expiration, with agreements those price in will recovery. renegotiating process the be of months, related the alignment Over we their in both both to volume and

Anthony Pettinari

of Okay, to that's exiting any view able just kind the costs in helpful. then you be that year And get 'XX on back might total unrecovered or?

Mark Miles

Yes. obviously, Thanks, Anthony, it's target. moving Mark. I mean the inflation a is

have expect a progress, that four improve we've been know capital target, say implemented all relative good and made we're not behind. cost in good a that still we here but recovery to cost I to that improvement, bit again you to but And number of lot I we making down. our recovery segments, all I relationship that great price little would projects segments, profit down moving saw would all got Right. inflation we say have a bit our it's to little mean, but QX. of drive be continue inflation implemented recover, seek progress. and target, but moving mean again, of four also I some to drive - four in cost to continuing we're drive a So to of a to but it's

Thomas Salmon

to our was commentary, strong on support my number saw a in from add dramatically think internal of resources Anthony to expanded I we've reduction projects. The that an cost automation. to quarter productivity benefit the tied

us. our was quarter be excess for concentration for think million area and $XX I to benefit the of focus that continues in the of

Anthony Pettinari

very I'll helpful. over. turn Okay, that's it

Operator

of Your Morgan Stanley. next comes line ahead. from Angel the question Castillo with Please go

Angel Castillo

you my XX. on And for taking to focus just in thank wanted Hi, question. Slide

we're for that changes there about think strategy of in a past, as thinking kind the pieces the I couple notable Just guess. I way the from starters, that capital allocation of

the love kind if We maybe, future as kind out at are you some dividend pushed seems share of comments and bit. I around, acquisitions, of, more kind look hear it any potential, a way? maybe of would changed that up when importantly, in little it's But moved to like gotten how repurchases have that's perceiving we

free how dividend the that potential maybe normalizing a as we give for next forward, very going maybe would So divestitures Thank you're about of you quantifying about think the and you. just could kind year acquisitions thinking and us maybe versus for of be flow if cash helpful? buybacks sense level

Thomas Salmon

really how focus The especially first going authorization, disburse, that, executed of organic continue fact that we're It's And foremost levels. at have Sure. aggressively to we'll from repurchase in is opportunities cash around and that pretty flow against we operations given prioritized unique terms to current growth. we've our the intentional. and do

dividend clearly will to third a an The basis should able engage that be I tell piece commentary type make regular you, on we'll active broad we in for any potentially divestitures, huge to we hopefully in own portfolio. a and think shareholder the the we a and our piece but think invest discuss specific it. of but The materialize shares, intentional. an portfolio, do our repurchase business extensive as is side, were now, it's process, that is, in that and to facilitate and if opportunity priority to, we'll another, is from we'll we is one leverage the puts in business is it examine was should in soon to speak as value again to growth update you to intent exchange the right re-prioritize a again, organic regard, and it piece something similarly can for us divestitures perspective, us value of opportunities of help a it exceptional can, look in that at we and again creation acquisitions materialize something position public a to

Angel Castillo

Very thank you. helpful,

Operator

Deutsche Your with from Kyle Bank. of question Please next the comes White ahead. line go

Kyle White

capital for the the the that hold see a the capital year? Thanks I go, do working in until I of forward you morning. level down the based on to for expect question year, you on next to to future capital, rail Hi, we back chain potentially expect good foreseeable working working could the going next actually improves, supply it what should this question. in guess, environment come or George's taking we wanted

Mark Miles

Good Yes, Kyle, the I supply chains. Mark. morning. totally on it's dependent It's think,

Tom it's to service We referenced taking the appropriate sites. sure it's providing prudent, material longer our customers. for to make As arrive our we're to think

term for And carry We business. if to of the to higher that need a care to means, that's bit do our so that's, our inventory think thing right little long take we customers.

things going sooner would predict this later when hopefully at those that's to point, levels. readjust guessing to we'll than As inventory certainly I honestly, happen. try to normalize rather But quite be think I

Kyle White

is is a be so should American I just that follow-up America rail, monitoring global chain If it this I we just called or there? North more the mostly know you curious on supply basis? North out

Thomas Salmon

America I North factor. mean it's dynamic, it's a I would but - say North largely global

Operator

of Adam Please ahead. line will question from come go the Samuelson Goldman next with Your Sachs.

Adam Samuelson

it thanks, guess trying commentary morning fourth million just I like quarter $XXX I'm of Yes, good I'm sure implies make to It EBITDA. looks right. the squaring everyone.

little you right up billion the If were on a scenario, about the the XX $X.XX that for for $XX million up in year-over-year. you see number bit, And little year.

kind single-digits low a EBITDA low volume have you kind that's contribution. If of double-digit of

guess earnings, that guidance to - item that you hit of when step the last how fiscal fourth the is by up I tailwind do carry I parts number, think quarter? think we cost price sure into as to price thinking that's to step-up usually that fiscal in FX. years, I - meaningful of a just not right on big in early it implies we cost that in there's get make hit about up to kind a that traditional And that be largely few bridge to big would because offset Thanks. the, pretty the 'XX? that of sequentially the

Mark Miles

expectation drive is by Thanks, you and Yes, XX% largely discussed, basis math comparable year-over-year approximately a the to EBITDA on right. driven Adam. that's a Mark. Yes. which No. got improvement on price It cost. be continued It's our just factor in the know, up is basis, you will you've

as been material in our pricing modest quarter well. that take then has some inflation to the will primary and again actions offset benefit moderation that continue there We raw will, to

Operator

will question Zekauskas from next come of Your Please line go Jeffrey the with ahead. JPMorgan.

Jeffrey Zekauskas

much. very Thanks

it recycled it carbon faster material growing your much on, other being and the growing access or lower of trade-off as is demand that a terms a plastics, rate access recycled to business more that plastic carbon because emission you plastics you at your more increase material for part have cannibalized really between standard side that carbon In is over of traditional rate plastics? products, that a than lower where faster can something from the emission growth period if see longer do

Thomas Salmon

going traditional great industry from answer grow. Yes, question. I'm a resin ways. the in continues perspective One to to two

additional becoming circularity X most a online of better pounds to to as an instances perspective, materials, going there McKinsey study of to XXXX. will the the and see get coming ability net for footprint. billion coming innovate polypropylene you we by an from discussion important polyethylene have And As world to online. virgin-based carbon design and sustainability component, enable who in carbon billion relative or heard Berry's an for zero an X continue design to around increasingly you're pounds is example, to equal

what incremental materials addition to that have can to on complement value in mechanically recycled access announced we portfolio based of not 'XX, between support to the already content, fiscal in of recycle back post-consumer recycled responsibly managed showcased terms and be in will earnings virgin total Berry's both that of In sitting organic commissioning expansion bio-based We growth and recycled our both the design advanced in to materials, an ideally. terms capability bio-based materials are how release and the that we supported users. both recycling, by recycling, plants with in global we base portfolio into that serve can customer that incorporate proximity that end that And all mechanical those advanced to close minimized, to in that reduce and our transportation significant costs. from that proximity to a transportation uniquely component is to end a is carbon Berry's users be given be ultimately closer not positioned perspective footprint be should

Jeffrey Zekauskas

so thanks Great, much.

Operator

next from with ahead. Michael Roxland Securities. go comes Truist the Your of question line Please

Michael Roxland

Thanks Mark. taking Hi, my Tom. question. for

issues issue, the natural packaging want and or demand Just from substrates gas. on you glass, magnesium, of customers European cans in wanted rigid issues thoughts seen given your to increase the to with that experienced aluminum any Have the experienced some in you may these you if get existing have more and some and the try little company packaging new other a with that issues of may substrate want can to with some that also be to to exploit you to maybe And stability? these about customers, talk other, substrates? look at for the pursuing initiatives a the packaging

Thomas Salmon

business, up X%, our continues Each We brands both and those we case. two-year on have America Materials, the CPI opportunity X%, for meet choices we and best material was continues that the Plastics, day, requirements is for basis every a for to the base meet X%. is physical pandemic be competitively requirements cost it that to Engineered up CP and unique for showcase those our of be and physical a to given up that think the to the really to the, the appropriate on business the North recommendation nuances, end-use understand make their application, needs. and business

great that and as being provides the packaging existing the substrate the well showcased circularity both markets. and think a to for developing level design this capacity will demand markets I responsible to for Berry's relative to materials, choice, saw And can in brought at substrate grow confidence incremental to carbon by And incorporate lends the a good as market, your recycled of So continue ultimately as data piece versus aptitude you of the other well to you when increase is plastics itself carbon that that materials goals. very third-party as alternative plastics the a footprint combination. content investigative support relative to look

Operator

from be of with go come Capital Viswanathan on Arun line ahead. Markets. Your RBC may the mute. next Arun, you question Please will

Arun Viswanathan

taking questions. my me Can hear you for now? thanks Great, Thanks.

Thomas Salmon

Yes.

Arun Viswanathan

Yes, question. thanks. just doing? volume the Hello, I I wanted you guess to back how to get are

low So that, growth a the organic some little of I I you shows guess, that maybe should couple single-digit of while. dollars volume from of thinking about that out million the timing have what kind a volume making you're investments we next slide over in hundred segment by expect? of drive, on a guess there growth sort basis, could Are you of that describe you how plays here? should and

Thomas Salmon

on showcased capacity cup all We the in continue as our that in to Europe Recycled incremental new to United of alternative. India a an support spoken $XXX - to We've based U.S. segment new support new so our CapEx polypropylene much site will a expand justifying million a to and and with introduction dispensing an well low-single-digit for for it's a We're growing showcased, Pharmaceutical Europe, in plus it's in believe for spend and so Europe all we've market a all which be currently investments the States X that is materials growers. for, the introduced and service geography. that Quebec as Plasgran white the introduced both the capacity. both us. substrate We investment solutions sustainable businesses lid. is made food developing

purpose many or incorporating of feature of material recycled in both the growth that advanced benefits of specific the instances traditional capital the benefits that's yes, So, those are with in the categories investments aligned content customers with recycling.

Arun Viswanathan

if I then could up well. follow as And on Okay. price

have how guys costs about, with over periods. you of should moderating, as know industry and last lot you of So a the price a increases, whole think the resin we enacted, couple

prices costs you expect moderating, And far you potentially hold how moderating? as as Is you implement with deal of So increases price you onto how do offset to now inflation? some kind the to are that implement the potentially would that continue some there non-resin resin do to to input or can of price much surcharges expect with that?

Thomas Salmon

area direction see our energy and We from unprecedented you the that there is of labor whole materials, tell of packaging everything obviously the your the resin would materials frankly escalator/de-escalator. I going host about But Yes, and other talked other are and in is still. and machinery pallets parts shelf. on majority of in inflation and we've a

it. be, get we And table will to ability variety area of strong an were progress said of very anticipate pricing relative procure. the with four warranted make just the - quarter that a certainly get have that on be inputs the our So we've well three. that on we of commitment done. quarter variety different a into that improvement and discussion it 'XX, to and sequential continues and pleased in We make strong to on used vehicles we'll result around is in We the based we we'll to

Mark Miles

just Yes, right. price of obviously I the and our Arun. help environment get does other mean primary I material would to for add, raw ability falling cost

extent, whether as and So to as certainly raw escalator an the you got, much escalator it's you've not or it drop. down the material helps not on primary by de or assist going can

an definitely for So it's sure. enabler

Arun Viswanathan

increase noted companies supply nature, one transitory see the you levels. decision here? customers by potentially could capital that to have take making that that a Wouldn't many on inventory time with just your like have is guys expand but that now chain you that just because conscious issues. dealing a structural working it necessity not in is that are help you chain It greater sounds And carrying you greater to wouldn't or investments do kind out be of supply been

Thomas Salmon

to made believe some point to choice and at in that the in as to here make normalized will again, that is be transitory. we drive this will to support with both term labor some access period as the innovation in And see things our necessary will We conscious we efficiencies. expect well customers that the return that my that greater did changes additional level. near somewhat inventories We wholly view

Mark Miles

repeat if next still it's obviously, wouldn't even And it year. didn't improve Right. itself

would be worse environment and that continue year that mean, seems year with could unlikely perspective, you it potentially, a or to get that worse and case if itself, suppose, an even but you it from feels that one-time. it it's the than not repeat scenario. made next So improve. a dealt if the next like doesn't headwind like worse I I

Arun Viswanathan

lot. a thanks Okay,

Operator

Spector from the comes Josh question UBS. go Please with line of next Your ahead.

Josh Spector

you hi, question. a more Any way investments world your guys emerging there. versus rest Do for emerging your markets around thoughts lower? lot business Yes, are in there organic significantly to that the of guess Is the and my or growth highlight about Thanks. scale thanks going a you be continue to regions? higher clearly, of taking I markets profitability need think would in those appreciated. in

Mark Miles

would be I profile markets to very most around We mean in that similar. similar. very of fragmented. - I relative those to tend scale tends margin it's continue develop scale, I investments and global to is, are partners focus to so we the general, and the think say reality

may that sourcing to on scale while helps product scale say basis, I not So as a we capability global as perspective provide have well from would have competitive we that a scale certainly relative do other our regions and footprint our well.

Mark Miles

India, benefit, And management facility that as I expansion. example, existing the team an Bangalore, use have had existing manage an expansions we through also ultimately help an to we an we was there, that felt capable

of and scale and advantage take we teams our breadth operate to capabilities existing execute. Berry know the can resource entire and using our how Another that mix the example and

Josh Spector

thank you. Okay,

Operator

comes question Please Your go ahead. with from Ng of Phil Jefferies. the line next

Phil Ng

too guys, of the Hi polyethylene we're future Tom, actually stayed. highlighted coming prices some Phil polypropylene and a you've that and amount in it's seeing distant could capacity fair resin not Ng. signs on certainly,

standpoint. procurement you've of trend, leverage kind to to that XX how call and next about the your it that scale, just given from capacity six to on, six historically, thinking comes been a you're able of how next curious - months, So think when I kind

And So then kind of a question help us for think that Mark. through.

that resin some some bigger inflation. on some what I bit, Thanks. inputs? assumptions, other you're of your little think, are or implicit assuming you XQ Can it's expand whether fade the a of guide, in in the

Thomas Salmon

and most with America, industry this it's can obviously to XX% again located. the try the think I coming online thrilled to important close industry that in it and base that these market, But pricing we'll capacity compete on has scale. openly business continues volume and is, we're expansions the size supporting the existing amount it's North comes that whenever grow of start here our secure Berry his to we to to an that of growing support excited where best I'll we're component on of

wouldn't believe our on growth, We be you the could it we it's its on region maybe. what and to happier. largest be call comment But is, about let really it's I'll proximity, benefit this particularly. what us couldn't So about speculate two, on we nonetheless, and,

Mark Miles

four to of lag your last getting impact here year bulk the I in other nonetheless, in through inventory. our those cost recent still some see polymer and guidance. earlier, obviously, the an embedded polymer, very that pace, in changes the on timing we we assumptions But, assume mentioned, quarters. But and quarter inflation in to With August the Phil. morning, about moderation will there given to months as our inflationary like in pricing. for are status the are actually was at like and benefit that those September, we outside Europe, we results see same of question extent costs respect which accelerating inflationary the fiscal P&L here environment, and and all out little was costs, July cost, cost of due will in those continuing the our to guide of in the that September not that close as assumptions Good have energy mentioned the will, U.S. And the we're seen have actually the on some Tom

Phil Ng

And historically be a negotiate especially been days. you the these forward. has on passing biggest new Will on energy of solid that you dynamic. especially pretty just in important kind know very contracts energy resin Europe very, an But element? How dynamic, going as there. piece. that Thanks, I did inflation are managing Mark. you through? And pretty note, Looking that job Europe

Mark Miles

on use And improve less than electricity products, continually to certainly energy department the as the so side mentioned, certainly, to amount Tom reducing working that. with consumed our fortunate energy generate the make our sourcing our that to actually think by we out that we're energy each we And do consume procuring market of products. get have the energy But do that as materials. we'll to market our results I we're we're and that operate. recover customers. competitive we yes, to we operations you while pricing in works in best in those can obviously good our can in continue we in diligently And our costs inflationary success that see had doing

Thomas Salmon

on not It's just throughout That forefront to component a get market. and an oddity to It's table. the recovery. is relief in bring significant European the that too to the

Phil Ng

Thanks a lot. Appreciate color. the

Operator

comes go Your the Securities. of next ahead. Hajde with Gabrial Wells from question Please Fargo line

Gabrial Hajde

annualizing et and of we I again then million CapEx two availability of about I'll lot in question and come curious of reliability, given you based and of see quarter ways, on your spend you Good then your of kind you've the about But got referenced that I about. Tom XXX discussion embedded kind in this of over have guess would talked the morning, at past suggest results one to been I cetera months. in what see? walls to $XX beginning there within labor this Tom And maybe that of out XX-XX then, in here can lot what know million can productivity maybe responses think Mark. to next you is kind of numbers to you $XX in a your $XX net to been start it's kind again and see that you're the has four get a expect B, A, productivity. to and opaque that? annually And million something that confirm year? of disruption that a quarter I'm

Thomas Salmon

done doing reasonable it's right to from make on about has I maximize and and job a focused that productivity. expectation. can really think get team that an think is the now more inability so nice to you labor The range really that a labor We're things. two we any certain getting

similar talent both which which share one by in and and be use you on safety. with global you using emphasis safety We look are change the been bring an excited really Inside the pool, best leadership if a is the means continues in possible that further be our a, to relative our And driving upper we anticipate, business and that think that and to noted because and a maximum to productivity to increasing we what it's automate that we And the definitely and of to are complementing drive It's journey, we cadence that industry similar of progress we We the business. ways there are And in know at think labor performance, increase critical. it business terms to is our front-line benefits differentiator. of performer. worker quarter quartile means in on is a our clearly is very us the our 'XX outside can we in it practices productivity. are ongoing is and will aspects about a what beyond. unique dynamic

Gabrial Hajde

you would on etcetera. kind to that shorter I surface go-forward more out Thank at I again like live then, contract you you transition maybe a looking adult that lot half here. know us? it's a, anything to and years, five of terms past the for When the challenging to get HH&S. contract the you I or that, for mix or - you Mike lags underneath But of of basis done are in for better Tom. incontinence to say look benefits work have cadence products, profitability And here you year renegotiations a I guys envision want over back know give benefit you the kind can be referenced some of the Do kind of a of

Mark Miles

made aspects and so quarter. premium baby, our All negotiation And offset material, our the really the incontinence enter our mix we gowns to concerted of their we and leadership absolutely. around wipes invest segment. that to for of pass had capital a through to growing presence care, in was in comps that access have alongside that above. that maintain through and strong industry all premium very drapes adult the that very, helped and to position we customers its support growth, our fem effort mask us it mechanisms The into company Working increase stable and the

Gabrial Hajde

good you luck. and Thank

Operator

Barclays. Please ahead. Leithead question the comes line of Mike next Your from go with

Mike Leithead

Thanks Great. for squeezing me in.

real Just quick.

to help doubles also recent divestitures Tom, would divestments divestiture associated your some us around on could of wanted you at an guess, looking question, that? EBITDA be you or looking And follow singles comments further or would to as earlier the associated well? the up bigger some I maybe edges, the size with be For at you I column with just

Thomas Salmon

company got a we've say Suffice certain very be a and with those in with minimal large We review executed and going we're the to of entire portfolio part our being the of with meeting. best every to We're completed scale discussions. of was the optionality. lot We a Board It Board to it's quarter. to interest disruption make footprint, global value just that creating customers. able and a

to tip I able won't So be one the other. or really side

a Just portfolio and consider draw to to from pretty robust should the up think sense. I circumstance got we've makes

Mark Miles

your on first thus EBITDA. And 'XX your Mike, The we've in contributed part million this question. of businesses is Mark annually far fiscal divested that around of $XX

Mike Leithead

guys. Thanks

Operator

come ahead. Please will Mark with the line question from Montreal. of next Bank go of Wilde Your

Mark Wilde

then drag million which $XXX the secondly, in now? early retail process of some Where some sense couple your as a we're might seeing move year, about from COVID you destocking from And just hearing from what got effects the this you of give at the us mass I've in be can a about in products. One, talking from Tom. were in what quick mix cleanups. business? of we're Thanks, that a lot HH&S merchandisers, you we that away the right that premium

Thomas Salmon

in Engineered material seeing raw down of distributors in think prices. distribution typical. it's to anticipation tied be business draw more inventory And that Two pronounced I their business falling areas, would will in one destocking inventories that you're very Material, our

Engineered be plus primary traditionally And channel. pandemic. destocking. disinfectant again are around impacted ebbs regard. wipes categories there to excess business XX hard to continues the In that surface of that the drawn down. our inventory factor. and traditionally business the flows HH&S that that of have lumpy inventory of is that serve So the by our terms saw demand be in industry category would that is of two lot business, because percent destocking And saw off in Materials of of the primary We and been Those the coming that a area

Mark Miles

at largely expect point. this the last say I on And lot question, QX Mark. I a us part forward. would wouldn't in of that's behind your of impact

LTM mix that our pretty much from think point. this at is I results benefit removed

Mark Wilde

Thank you. Okay, That's very good. helpful.

Operator

Your go next Josephson Adam question line come ahead. will from of Please the with KeyBanc.

Adam Josephson

Thanks a lot. Tom and Mark. Hope you're well.

Just one If allocation. I more on may. capital

of So this obviously expecting a buying you're back year, or $XXX stock significant more. amount million you're

initiate you're yet. count a You're that necessarily come Do to stock if paying buybacks reasonable-sized a that at stock go you investors buying and obviously you were and to you think reliable is consequently because and and the of which your trading? not on? can't to lower just discount that discount likely steady dividend obviously is dividend still compared back be Do

Mark Miles

got I current Mark. we view to shareholder our how as the allocation we capital it's on we management's this Adam, take with consistent with that think regularly in both and line value. Okay. well is as shareholders. shareholders maximize from feedback feedback strategy, And prospective mean outlined we've

Adam Josephson

Thank you, Mark.

Operator

question with follow-up Zekauskas Please Jeffrey go is line from a the of ahead. final JPMorgan. Our

Jeffrey Zekauskas

your the recycle, now? your polyethylene efforts, primary do polymers or on, And In recycled polypropylene, for it material much. very what Thanks PET? applications or are which you is recycling focus

Thomas Salmon

both predominantly recycled material is and mechanically polypropylene as as on industrial-based the on the well more It's applications. polyethylene -

in On ability the consumer its contact. readily used advanced be given recycling goods to food more basis, it's

Jeffrey Zekauskas

recycled Where do materials for from what polymers, those? you get advanced or

Thomas Salmon

polypropylene. They prominently are

Jeffrey Zekauskas

so you Okay, Thank much. great.

Operator

over for to I any back closing management will now remarks. turn the conference

Thomas Salmon

Thank Thanks That concludes forward for this time quarter. to and you. Look call. next you everybody morning's to your Thanks. morning. this interest talk

Operator

gentlemen for today's Thank you Ladies call. all and concludes that joining.

You may now disconnect.

Berry Global (BERY) 3 Aug 222022 Q3 Earnings call transcript