- Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2022 Berry Global Group Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today Dustin Stilwell Investor Relations. ahead. go Please

Dustin Stilwell

XXXX good quarter and will Welcome Berry's of to to Thank earnings morning, call. fiscal September as quarter XXXX fourth we Throughout fourth the you fiscal everyone. quarter. this refer 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 question allow Tom any comments everyone at a brief a will limit then do we to to question-and-answer opportunity you have we time back for participate, with a and queue Mark's and into the the ask additional follow-up order one session. fall to In questions. that today, yourself

company As comparable in a on referenced comparable today impact our some GAAP Please during of our release measures. discussing have website. reminder be divested made, businesses and therefore and year upon the X, statements. involve number our between available earnings uncertainties appendix Therefore and our differences Reconciliations These financial our statements financial the expressed The and from made the those the investor future when call, in provide today we present conditions statements. reported expectations financial a and company earnings and our not and in operations presentation, filings be may actual the provided results. will the forward-looking but in non-GAAP on of been statements SEC. financial presentation. GAAP limited measures to, management's differ appropriate this implied we concerning impacting on of Form a And finally, certain the compare our Slide and XX-K, to are of to results earnings events most adjusted note that of beliefs, are described in based our those or full have measures that other materially, report directly with non-GAAP presentation basis or reconciliation and annual our currency results forward-looking on remove of the and commentary prior the including results in we to the risks, within release, quarter year, a the could constant release to

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

Tom Salmon

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

fiscal on Turning to our and year quarter Slide X. key takeaways the for

delivered both XXXX. year business including fiscal First, record per respectively, results coming X% another in full solid our record earnings off for share fiscal results XX% year revenue growing and and

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

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

Third, $XXX flow free million of during approximately $XXX XX% or our outstanding. year, the we to cash million via and generated repurchases shareholders a shares of share total substantial returned

ambitious strides with making invest relationships expand commitments, are opportunities to goals global continue be our our sustainability we'll long-term to continue We and base. consistent while great our which to to customer for leading growth with towards our

advantages share significantly recovery organic shareholders review through growth our and of inflation will price. on which our dividend, also finally increasing morning, our to on and call, continued with $X you while undervalued year to our decided opportunity commitments, to strong a goals taking focus over capacity company, stock we a billion. this initiate repurchases in Additionally, XXXX returns program our the the release costs which for on Berry quarterly along a issued repurchase further And fiscal reducing milestone has deliver saw to as include significant cash share our press under cash today's is

to now slide financial the on X. highlights Turning

chain September modestly its resulted substantial pressures price/cost and primarily flow impacted perspective, an of quarter up our an Our EPS revenue cash cash in adjusted by free EBITDA, prior X% The $XX demonstrated dollar. in supply the was increased impressive on expectations softer earnings the generate of of US million. again the which pockets continued improvement record the ability to From an from inflationary performance delivering which quarterly demand with company XX% and challenges over was quarter. including along EBITDA strengthening in year was below and customer spread

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

ending revenues delivered year increase we were year traded most to able at year fiscal our of full $XXX free third recent the net our is and $XX.X for per million of XX% ratio share finally billion, publicly earnings met leverage to strong record guidance which by we target a And adjusted a and working consecutive as Also X.X the delever capital driven flow For EBITDA, the annual lowest we debt company. we our year $X.XX. by exceeded cash fiscal management.

undervalued million total $XXX Additionally, as addition new to which putting saw program over million this our strategy shares additional current this Board approximately in remaining of are authorization and for has long-term the and the authorization our the cash our our Directors and share believe of of confidence repurchases We business significantly has operating model announcement, billion. authorized our strength reflects our you in morning's $XXX $X flows. an outlook in increased our

from a want I detailed where we Mark, original XXXX to specifically, X guidance hurdles to XXXX and couple operations Fiscal ended not mention the of the provided year. some an year. over perspective throughout unique hand to forecasting fiscal our slides, slide challenges cover demand I Before to

flow slide our have original guidance We to a earnings to dependable only on we exceed portfolio and cash XXXX us comparison are results. very share. or a modest actual of such for headwinds On enabled guidance fortunate demand diversified meet provided which saw and fiscal have per and to our X,

As of our along of the which strengthening stable result due a our entirely you weren't In dollar to demand remained we with diversified the majority demand immune which the the businesses, can XX% represents softer headwind our despite of customer US very to. and of see currency was portfolio, consumer portfolio foreign steady.

automotive, consistently improve. the fiscal Our year agility recover end of construction. able industrial the profile working a some scale throughout building global markets We areas inflationary modest distribution diversity did Both headwinds To anticipate such year product rather demand offset these teams the $X.X and insulated costs of see our costs a put And and as the result global markets with and provide were to over as and proud pressures. Berry. throughout I'm for during lastly overall of fiscal as were to we into inflation. year billion and in these perspective customers it as increasing increased markets

While growth. spread, focused improvement improved sustainable in On reduction in end both we and cost and dependable, inflation slide expect on fiscal did seven, the long-term, benefits more organic we in XXXX. additional driving year have in the price/cost we remain consistent, and to recover near

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

by long-term our opportunity in and We emerging sustainable market innovation our consistent, markets be in ability to and provide support And we further in and X% to IPO represents faster-growing everything that XX% sustainability our I'll that along discuss and in our we XX%. dependable, for emerging markets growth commitment differentiation remarks. emerging a to with and believe Longer continuing than enhance our in position to total emerging of continue our growth. our invest Additionally, now presence our are we expand invest we increasingly can to great lastly, growth. do will job this believe we growing global believe less continue of XXXX done presence prepared to term, a increasing end later in will regions, since than from revenues. market embedded more great our We've market

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

Mark Miles

Thank operating of and by our to Tom. like for slide performance quarterly eight four year each to would you, refer I segments. our everyone fiscal

focus Our and long-term recovery while well and sustainable to on businesses driving organic generating inflation cost productivity, growth. perform continue

such International increased from beverage, surface primarily categories experienced improved revenue growth prior negative inflation closures year, Packaging by along pass-through we in as the two-year inflation the with in saw the across cost demand such markets while impact the in such China for food driven XX% coatings basis quarter care. Consumer and and by investments growth X% capital EBITDA the and improved our Our by a having mix as health lockdown division on systems quarter and a product over demand dispensing more relatively On volumes. and the our prior the volume recovery, productivity. categories product modest of some softness, quarter, over automotive X%, was year consumer-facing organic in and discretionary driven flat XX% In year improvements, as mix.

of we Consumer and including Packaging year, and recyclable recovery EBITDA lower slide a a quarter organic included generating in an stores. & growth clear offset division XX% capital America Health modest volumes. We over demand X% prior prices product productivity. improving volume restaurants on in of growth markets a volume customer pass-through basis from strong by food to inflation Specialties slide increased delivered see on and in respectively coming continue delivered we impressive as year quarter our recent the as with beverage progress convenience the our fiscal North the pass-through was cups revenue division continued a made fiscal from flat demand off Hygiene year fully had flat strong prior fiscal year. increase for polypropylene organic nine, Next the the nine our mix which in our and used quarter the XX% reduction were organic On and over softer and strong quick-service to revenue growth for drink growth and able from on volumes On by inflation demand polymer X% prior XX% volume investments. two-year cost

quarter continued by For of from X% volume year nonwovens. products due inflation, in partially in related EBITDA COVID. with lag increased over a around on prior organic ago down X% from the two-year primarily expected, year, costs pandemic-related XX% the mix the was advantaged and to was polymer. the revenue the year for the growth fiscal pass benefit the offset moderation year fiscal recovering growth On inflation than basis to and market as other a a through

customers was distribution market certain the the with effort price/cost third related positive spread lower focused be to EBITDA focused division was for prior from of to which in an continue quarter our from we costs. due XX% will some on improving year recovery. versus Materials improve Engineered sequentially And year and increases was over the of to over through year our year-over-year mix, through on slide back year volumes our fiscal categories lower quarter. pass de-stocking down softer anticipation quarter prior X% and mix the along XX% and up inflation in will up included expect X, earnings our value, along cost with a higher polymer as these the sales We volume from to to basis impressive effort product anticipated XX% cost pass for in inflation. in demand The primarily revenue the categories to on higher primarily decline and the the believe prior

are Next, guidance on slide shown and assumptions our XX. fiscal XXXX

consecutive expecting which to delivering another fiscal be EPS that of midpoint $X.XX are to have every done growth at the I'm and of adjusted as year share, XXth per year a company. proud generate record our single would year $X.XX We between public report we to which earnings

$X recent was For fiscal would share. midpoint our XXXX per we In divestitures adjusted year-over-year of deliver another comparison growth and XXXX purposes for year currency X%. strong rates

in we earnings fiscal lag half to timing of the similar the expect to of be cost of inflation stronger XXXX. recovery, Given reduction actions XXXX second timing seasonality and

expected is benefits. reduction includes midpoint recovery continued grow Our cost continued X%, comparable which along with EBITDA the approximately to at inflation

free to million be $XXX to to million expect we capital $X.X billion, million. of Additionally, billion cash in less the expenditures with flow cash of range from $X.X $XXX of $XXX operations

cost Our XXXX from than headwinds currency from some interest non-recurring cash and foreign rates costs higher flow outlook and incremental initiatives. fiscal reduction includes,

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

reducing XX% Tom. cash at and debt valuation XX, are for XXXX includes projects, both quarterly our the repayment consistent it million for and repurchases return and our and expect share repurchases strategic strategy X% which continued slide We shares to capital concludes outstanding and dependable In and can positioned our consistent by and fiscal in investment on approximate opportunities to opportunistic well an we value dividends, yield return-based repurchases and further reduction provide generation growth continued share current new more we financial review free now nearly capital cash levels. cost $XXX creation see remains management As I'll additional further my shareholders believe you to dividend. allocation portfolio share while us via dividend turn This or back debt through repayment. organic including and

Tom Salmon

Thank you, Mark.

economic performance proven our challenging Our are fiscal cycles. over and XXXX many results of different example sometimes another yet operating

per including traded year see year a fiscal have adjusted company. to free XXXX metrics, EPS by we we compounded adjusted key for revenue, results our strong expect annual approximately growing rates This earnings driven As growth as X%. every share on X% we flow, consistently and by in grow nearly earnings grew and publicly XX, including all top-tier can you slide financial cash

proven environment. strong for the to has flexibility shareholders. of demand including flows, model us drive returns portfolio our broad and cash will a our demand for market strong create plastics choppy with solutions stable markets business a industrial resilient, current Our to From global our viewpoint, packaging allow dependable

and on cost asset through throughout any inflation driving demand challenges. footprint strong while benefits We also global our efficiencies will offset continue optimization to focus our recovery,

consecutive share $X acquisition returned Next have to in than adjusted our debt past years XXXX the this repurchases, quarter. past RPC net totaling over reduced share an over on marks shareholders, million the billion per debt XX. over we X.X the value earnings mid-XXXX, our in slide year three $X.X our of to the by nearly net since via third Since growing EBITDA. billion billion, Fiscal at we've while our end additional leverage XXXX, $XXX the acquisition. XX% more RPC Furthermore, to we reduced shareholders year $X fiscal returned including

Next, to quickly highlight announced the today. earlier we want news I

authorize the stronger is to ever have Today, initiation supplemental evidence proud new that are We initiate and to is this Berry underscores to the our succeed. enhancing for This globe program. been completed and clear commitment to dividend quarterly across buyback the of work announcement has position company the long-term it dividend this Berry value teams stakeholders. than all

our has investment made prioritize to been element we how value our our we've creation strategic in and choices investment Another the business.

We product here of portfolio drive and that complement which XX. growth those to we highlighted and efforts products, building we've in several of markets expect few ongoing our organic are of categories investing including on resilient and slide increasing a long-term

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

in to value these believe we well to we over $XXX contribute strategic investments, As to like presented for you and are significant design support these years. million shareholders few and over the footprint deliver circularity. next those through We revenue global investments with see, our unmatched to an positioned can capabilities continue customers expect

will of QX. dedicated be and in second in Europe operational pictured slides, facility mechanical some Our the recycling located in

facility household food-grade closed-loop tons mechanically five is post-consumer will that packaging, annually. world's recycled polypropylene back the to enhance Europe, process customers This demanded our more and polymer the of XXX,XXX As our recycler ability domestically globally. by system waste into are the this with products for top to in material handle more first recovered new capacity site

Our advantage believe design provide higher-growth our embedded advantages and and in remain these innovation a opportunities. demand longer-term of see sustainability everything and a we We solutions increasingly support are sustainability sustainable us investments both in Innovating we include attractive and and long-term which competitive do. growth for strategy. global that circular decarbonization increasing products, will aspect key

and from necessary along the Our to customers. source design and manufacturing sustainable produce and solution our recycled protection include the ability desired product to resin packaging capabilities with innovate advantages by footprint both more a our globally

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

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

energy to are for Engineers for Energy to from required electricity from in XXXX we a Project made XX,XXX the reduction from Association goal use milestone remarkable resin. haircare has of emissions COX we collaboration of received Ingreendients standpoint, Berry line the from The launch of proud Next, XXX bottle emissions hours saved the to operations. one with million-kilowatt highlight global partnered of Further Year our to from that eliminate Energy are post-consumer equal a year. its power to over XXX% product homes this

M&Ms, innovative with the resin. well-known In unchanged. down the and closure recyclability. a received cuts jar Excellence and XX% for Expo remain Award strategic on our include in launch solution a recently such improving announced the and Technology tamper-evident be SKITTLES waste prestigious Sustainability our to Berry tethered as our at This PACK securing summary, also band. packaging Mars closure And by which bottle We priorities post-consumer STARBURTS announced for lastly, weight of the will lighter new products recently

our made remains and customers entire better Our and one and has global working a stronger, safely on company. us number emphasis servicing safer our team's priority

the drive very sustainable I At in Mark persistently I'm operate position to answer our financial navigate any priorities to strategy work of remain higher with our dynamic to success. for as of continue be time, questions. face inflation. competitive value, Berry a market the focused continued and global time, costs expanding delivering on same economy. while glad current and I results long-term will driving with recapturing growth, agility of and this hard long-term executing our our your thank the delivering pleased solid Berry at will we dynamics your of shareholder interest we We in employees and on you to advantages for

Operator

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

open. is line Your line now now your open. Ghansham is

Ghansham Panjabi

you. Thank

Good that. on and asset on benefits Tom, everybody. cost better us about can on just morning, -- just Sorry just segment comments through Hey, on comments. your any those it for sense automation give your XXXX. Anything you driving price you a optimization, Is versus of Mark year variances a there? terms And fiscal across specific just could share of then targeted portfolio? XXXX the expand question for towards follow-up in cost

Tom Salmon

priority the projects a Throughout similarly We're to a as automation internally entire dedicated well at making with capital faster portfolio. assets. help proprietary lower-cost well pace. company, those supporting capability. over execute is third-parties Ghansham fabrication we've partnering We're XXX automation technicians us programs across as the to our support got as investments

ultimately result. yield costs For throughput and as energy a example, electric to machines our in reduce Europe increase

around able including time lower to reduce it's being meaning, global to of energy more So our that conversion serve the the more successfully that to we have part while been higher throughout all at optimization. assets what asset productivity our and and same more moving dependence, chain costs, That customers. to up business doing we've

Mark Miles

our assumed cost, embedded constant adjusted more a guide little morning is cost XXXX million EBITDA growth divestitures the probably Ghansham. towards a about the have to That for currency price we on year. weighted good for you coming from cost, respect price noted, $XXX in of Yes, for side. growth and With as

that we've that the mentioned, yet from got price lot up As we've through. recovery reductions inflation making a of Tom are capital-driven got $XXX customers then million. coming cost rest haven't from And we that of some recovered

Ghansham Panjabi

normalized? talked with capital outperform I'm just issues so based Are last you standpoint. trying just understand and on from a things on perhaps levels freight And inventory forth. so about Okay. movement working carrying you quarter to then how rail higher just and

Tom Salmon

clearly regard hauling. negotiations right well make in us the Things through on have were season should pivoting that are more happy a over-the-road now. the eye we keeping normalized. normalized to underway to concern and backstop nonetheless, But anything as We're relatively traditional means materialize to it for it's an We've not rail from rail that basis. certainly hurricane got

Mark Miles

we spite And certainly I mentioned the on obviously helped lower would slightly of closed finished closed chain. on Ghansham in challenges job get working on working want And And these then expected. year purchases not as that as with has to supply materials our done both the your nice our respect out. well there, as I'd the to capital of question adjusting quantities team the than we year we say as way as say we've capital out but had a volumes good came in

Ghansham Panjabi

Okay. Very good. Thank you.

Operator

comes the Our of question Anthony Citi. next Pettinari from with line

now Your line open. is

Anthony Pettinari

does just Mark flow the Tom million question. four Hi. for just think free the earlier we assume guidance assumptions segments, or expect think that any do company? next Good in might back following on headwind or reverses, in XXXX, then you as The terms stronger volumes XXXX? directionally any you inventory about that get weaker year? XXXX be $XXX there underlying I morning. that would referenced you or then volume And -- up the Ghansham's segments for that the guidance cash are the of for where And

Tom Salmon

as similar dynamic well. No basis on challenging the you a the supply team that as it with a fiscal as overall. economic frankly be was enter XXXX We for very, year and challenges to demand outlook customer strong market start well There's are that are demand. XXXX pockets chain across the I'll Nonetheless, about we little to softer we're we the very our us for and see two-year And we'll terms very us growth. relates XXXX, continues and in delivering versus with pointing that clearly volume There of in believe we out proud single-digit -- and cost position for And capital that year address quite near-term making, a when us. we deviation any long-term the pressures. low of better frankly, initiatives. the a to it about and productivity growth fiscal that doubt X% that is it's investments outlook, given year, our position think a backdrop customers dynamic there. see demand of inflationary that end

Mark Miles

capital Yes. On assume Obviously, getting zero just impact. typically the year we is working Anthony, started here.

So we'll see as the year progresses.

As the year, in we tailwind cost polymer's we is with for the our obviously, the with start situation a But here of in category. have US, road largest year. Europe, long which the ahead energy us a

we've done So how past. we've year but it we'll with working for XXXX, capital assumed in out which in how is see total zero in the plays the consistent

Anthony Pettinari

Okay. of capital That's return are helpful. the really And announcements, then welcome. just

in Just of or Are terms the yields, maybe and the approach certain dividend or future? your the can a certain of that dividend targeting In payout the approach growth thoughts dividend at? sort possible looking set peer there. you're benchmark is any you and you to there, there or a talk about

Tom Salmon

this we're today. foremost and announcement first Well, to thrilled make historic

a tremendously been in of operations, initiation our customers And access to that consistently dividend. we've strong now the and it's a and that operating and gives a new and our precursor been confidence right deliver ultimately that's at given for with investment of to ability to similarly The for. new traded company. for been really which It that given interested there's the company we have is, us percentage the model that that shareholders repurchase from our take as from coupled portfolio the confidence of the years driven first coupled with otherwise our cash publicly shareholder for a our in that that have in income think we may we its authorization, as combination not XX and investors, share well base believe dividend us as operating existing by both resiliency feedback our able the look advantage great flow undervalued a stock a

Mark Miles

it's we thought And regard. the I'd quantity to have respect future given We the the it line With with stay obviously was to to Yes. announcements say and on I S&P. starting respect flow dividend. on much a to, support adequate than in increases, cash certainly, dividend nothing yet with of that guess, this Anthony, point that broader larger market more communicate right kind tuned in

Anthony Pettinari

helpful. I’ll turn That’s it Okay. over.

Operator

comes question George Staphos of of with next the Our line Bank from America.

line is Your now open.

Unidentified Analyst

Hi, yes. actually [indiscernible] my Thanks is for George taking This for morning. this on questions.

prior first quarter? guess So some trajectory its challenges had the just growth growth in questions what the And to during building of can outlook on just you in comment hitting relative your is I upon XXXX, the company some XXXX.

won't or ultimately give in pattern what XXXX So, should this that comfort us repeat? confidence

Tom Salmon

the Appreciate question.

market. customer-linked demand weakness our us with steady investment people footprint As earlier, sustainability, relative I you've businesses stated manufacturing well better in great coupled that That of off ongoing it's those investment the that puts that proving ongoing base resiliency they're gives incredibly buy can the any the And with X% results. clearly we believe on out in facing. the our resilient type in demand. in customers the of has given continued of XXXX backdrop said, be considering we're mention lot dynamic heard going a of given near-term not that investments have that outlook of that the the terms environment, from to think half. environment coming market as position folks. And we've around portfolio and may deliver confidence very economic in that's to XX% and a environments to made a performed plus two-year a And I business forward. tied we CapEx alongside this low-cost our model economic to itself offset is and we a our on the regardless ultimately of with is But that basis provide us pull immune will stronger to a to end record clearly stack on that customers, we necessary that a based softer But our levers back said around not Berry customer

Mark Miles

to longer term low continue a the And Yeah. business view again, as business. we single-digit-growth

are and certainly around to wellness We No going growth is that sustainability care, in to change investments growth that regard. to pivot continue driver and be personal for future company. like to going a markets higher health – think our we are

Unidentified Analyst

Great. in here first trends Okay. the just quarter? And early

Mark Miles

Copper similar to...

Tom Salmon

continues offset front places our to to we comments. in challenging our commitment performing is How center fiscal to start fully the we're team as in well we and and as very The continue all market prepared we to be exited XXXX. XXXX. be said exposed The that

Unidentified Analyst

And Thanks. quick follow-up. Okay. just one

over to of relative from kind about and those in cadence growth layering million investments XXXX, $XXX of the think that we how can XXXX here? that revenue Just of

Mark Miles

detail Yeah, there's exact think I have as big about I of me. I outlined that in a pages. the stick don't hockey front those think projects on are don't granular those

as coming those are of Some speak. we online

I quarters, you that don't significantly eight I modeled think, would don't So if next ratably, it different. over the just think be

Unidentified Analyst

Thanks. Okay.

Operator

of with next from the Our comes line Phil Ng question Jefferies.

open. is line now Your

Phil Ng

your side, execute? of terms in that bolt-ons update Has returning Certainly, potential gotten markets a challenging pursue limit XXXX? it back kind made that did it a shareholders any ability cash more in tougher. the have on the to you've kind to credit Hey, And announced divestitures? move today flip on guys. call of the to Any little of little

Tom Salmon

our three be call. for we to and pursue we'll going report opportunities, opportunity to an doesn't the assets can ultimately the It area have company. nothing We're X.X us. as – deployed the times we ultimately that have range in other of impact to company between this the for be and you our operate to And prospective that of bolt-ons. targeted to It ability Phil, areas to divestments. within as provide continues that contribute strategy markets said those ultimately And believe relative

Phil Ng

Got of the Thank potentially this up unpack wrap to have environment, you. more Mark, to I correctly, of dinged tailwind. to if especially relates good ability And the a cost then, potentially a side, year? bit your deflation resin are on And you that made you guys as self-help cost costs guidance, non-resin which assuming out. of piece, good kind on but price side, on the you $XXX Can doing year, you some XXXX how million progress pricing little the taking for last it have is get much you up you're heard you. stuff falling pretty in then price, of versus do the kind

Mark Miles

Phil. Yes, the yet you our the of of volatile, good I earnings sure. is, sure -- pass-through, Thanks, I'm -- news mean, as as very year, last excellent the earnings. I up job our done we've tightening on on resin movements. guess you an and lag kind was up bad down and you in saw impact saw And fiscal resin little have and record very news

about next and resin, increases of earnings. the for So, of a as improved price that come the cost we -- the resin our as suppliers, efficiently. in We to though, on which doing a kind which would remaining mitigating could through impact we're earnings cost of year provides on and cost that. the call reduction getting moving news include said, from it the changing is bad outside also improvement of resin I'm going And team efforts about point, initiating, from with drops. example. efficient great company more our to X/X good done certainly that to expecting with passing has certainly customers, material it very backdrop through of we're job That's in active again To usage pass -- relative your coming involve

Phil Ng

lot. color. a Thanks the Okay. Appreciate

Operator

comes from the UBS. Spector line with Josh Our question next of

Your open. now line is

Unidentified Analyst

on set the much just due when to was Engineered do see deselecting? of -- you Hi. the on the quarter the Materials. portfolio in product It's Chris to Josh. decline I How volume up And follow point? at Perrella wanted for portfolio the [ph] this

Tom Salmon

films. We'd capital in on anticipate front. of transportation inside we've that business investments refine of made, year, our alongside this the mix has multilayer This demand conscious half continue the sequential improvement specifically been and a films areas we'll to effort back predominantly converted begin to of see distribution-served around to business like our some the fiscal

trying in I'd refining that happy back product of the from and the work team year, general half lower based on throughout input clearly, distributors But been impact the its underway done distribution, say group. that improving the time, year, really periodically, so has Now, be the are destocking costs. to there just anticipate we'll and just the this in a offsetting same prouder more of inflation, be while normalized in Couldn't line rate. its business has at mix, its about efforts

Unidentified Analyst

So just to clarify that.

that more market in slicing you then this just you're the product do still to is the to have for or the do line grow, bottom point unit? mix, and at waiting So set

Tom Salmon

half in work There'll do fiscal some be to year. front still of the the

Unidentified Analyst

on between of a All How a than it's It's expected? quick couple versus lower out that last right. one you sustaining and And growth the what initially CapEx. lower been bit what break does CapEx then years.

Mark Miles

About a or would half more half CapEx, than to little our refer sustaining. is as of what Sure. I maintenance maybe

of got As the within capacity plenty you so grow our assets, mentioned, system. output existing job great of we've to increasing we've of done a the

Many earlier said projects cost focused growth customer continue So our as room I to invest to reducing the those reduction we also grow. both half it's half-and-half, that But we're what half capabilities on growth. contain are the Tom we've projects have. maintenance about We're cost production and our between assets elements, in commitments. to our And of remaining going on of the business. reiterating many and adding and capital right. said But and filling split base capacity got behind about

Unidentified Analyst

very much. Thank you right. All

Operator

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

now is open. Your line

Kyle White

Hey, good Thanks for taking morning. questions. the

segment seeing we consumer called impacts you out are but cycled the then products? impact, in Materials, as Engineered impacts And destocking through from are destocking in the some HH&S you COVID well? destocking any fully in On impact from the other advantaged

Tom Salmon

pointed in communications. at, a been unusual. calls nothing the to dramatically a that's lot it we know I is that We lot look to of and say would point earlier has the been

that of aspect they're tied business people In that given to deflation. regular in benefited to However, that's business that inflation a And was COVID. of areas. and terms more COVID to Does time Materials help? destocking benefits in the Engineered had specifically benefit tied trying and again HHS nature its distribution

Kyle White

through I though? cycled in does. on HH&S, mix fully the guess, that is impact That

Tom Salmon

Mark?

Mark Miles

Yeah.

think a through year-over-year we're on cycled that effectively I basis.

Kyle White

called the service Packaging are America, out details North on Consumer can was Got there? on to? customer that pressures more there In exactly What you. bit just provide And your you follow-up. then the on demand softer inflationary food a impact demand. related And volumes having any

Tom Salmon

demand. inside terms some progress continues of of I demonstrate personal as for up making discretionary large of be And well the much their portfolio given even businesses, States would terms we job we a our cups done in CPG versus both other resilience given winner they the that two United clear CPNA arguably customer space. basic, where continue there's us the as of advantaged as demand overall Those stable execution been beverage, continue both like that in the be of From spaces. compare we specifically in a the portfolio, perspective, price really to have polypropylene, CPI. advantage our and the teams I and of XX% very customers Nonetheless, businesses acceptance, as mean, our all with in both to nature the on well certainly care drink what stable the those both those food businesses most are a in overall around pleased to softer pieces looks and recyclable, global do. serve. demand in Europe sustainability foodservice nice consumer

Kyle White

I’ll over. Thank it you. turn

Mark Miles

would Kyle. supply. My meet out of to demand our our is customer in and having adding we add from area. we're essentially that in to the foodservice moment. comment that in line last sold product continuing to a than and months line the chunk more I my We're exclude demand CapEx we've We're here comments. that committed product That's the on XX got capacity, at supply add supply I’ll

Kyle White

that Sounds Mark. great. Appreciate

Operator

question line Samuelson next comes of from Our Goldman with the Adam Sachs.

is open. line Your now

Adam Samuelson

taking Mark following cups kind on the to you. can the in Good Yes. what capacity there's inside and of of grow fiscal much, XXXX XXXX of think it scope again were investment? the slightly you the more look three-year context up Just capital a have trying lot Does the and volumes frame on volume CapEx, some and the Thank your putting up. a you've to capacity morning, without than have on little made comments, in bit CPNA, the which of like where just really America everyone. point organization over in without the volumes understanding two- versus current plan one North Maybe initial or the more work. period previously, a could fiscal might lower embedded expectations there's we really drink into you suggest needing -- grow thought growth just two-year to would you kind all network down with

Mark Miles

is important. Sure. Yes. Obviously, mix

We of have assets. many on our asset flexibility

have Some less flexibility.

asset particular foodservice So that we we're mentioned on sold out. platform,

we our by demand we'll see more be asset growth that midterm. here We on certainly if lot mix capacity necessary. from. of of a we're take markets. that certainly take selling and in we're again, extent, prepared actively and single-digit it platforms to But have in determined have comes demand But To have the improvement, side meet the and other doing low the actions we're cost don't the out I'd say, those to the will capacity objective we adequate where

comes give a, on It hard that. an So absolute on where to number the from. growth depends volume

Adam Samuelson

if any of the Just of Okay. different us Can just think at for any a very of I and sense? outlook different kind segments And makes regions embedded about, about the you think portfolio the fiscal on like company XXXX of there's volume where it it total if kind a just seems then in the maybe color modest, or kind help growth growth maybe provide level again, from you're parts volume how by expectations, perspective. the framing plan.

Thomas Salmon

you've that seen downturn of businesses this negatively by parts in see change softness in economic that significant like beverage, care XX% we've food, what industrial-based of impacted We've continuing we have very The to our spirits, to been are in tied the regard, our spoken to change don't at personal communicated relative before. more point. the significant areas the a past resilient. a world. And that Not to portfolio, remain

Adam Samuelson

I’ll helpful. pass on, That’s right. All thanks. it Okay.

Operator

the Our Stanley. Morgan Angel question next with of Castillo from comes line

line Your open. is now

Angel Castillo

bit more Hi. I to unpack just Thanks of taking for my the question. XXXX. wanted little a

you destocking half what you As bit would you you perhaps just abating a we of second kind kind talk loaded, that aspects pockets, half of in other that's are about back-end a some of that about better little expect can business accelerate, there think results? the the would as than more the anticipate markets move second price/cost would or to some improvements specifically, where on to you is side, end and/or the anticipate

Thomas Salmon

to being the and currency, though, XXXX. And the and FX job the company XXXX and we've year, environment versus both think materials as we I going well. in – stable a even rise describe year right into benefit improvement a input the more coming of as terms see we're started I we certainly on general, that's that. type done Clearly, cycle clearly, anticipate throughout good what backdrop result if got a of raw all now. would of you're in in as we've that's stable definitely material dynamic see given net we a or improved very And in we any inflation more for than that passing better

Angel Castillo

kind about And That’s allocation, you. you of is think capital peer clearly, X.X think for about the the times or think and capital you working your lot Thank Board delevering maybe helpful. further right you about potential hard to can is of as of leverage we I talk are And in tune. about structure as X.X. fine kind a kind as just the X.X group the you particular three from then why to range? below think of And

that the structure further strategy given So just of how you environment? macroeconomic delever your are capital why perspective? near-term thinking from not about Just kind

Tom Salmon

the the That is acquisition delever We quickly. the RPC company. in company history can flow two, desires demonstrated of at base we're the this since as level our on time dividend the quickly traded opportunity taking wanted ultimately fact of to that We organic the delever those to and the we the as can that investments as in investors. we we're see the And continued company of another a we our to our shareholder investments publicly is there's that thrilled back advantage low dramatically leverage lowest first, so opportunity; at choose can now that based expose demonstrated our ability and a the current Well, to pool the cash recognize with said, to us continue a do can we make, two growth. undervalued, given the making first stock coupled that. and quickly. as component new improve, as we valuations company do that absolute buy right and to that Should to we are take incredibly clearly that the is stock environment valuation that

Angel Castillo

Okay, guys. Thank you.

Operator

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

now is open. line Your

Mike Roxland

Thanks, taking Tom, Mark. Dustin. Appreciate you my questions.

a Just wondering consumers September your to seems Just on of Tom just particularly during the as the quarter. if you I that wanted follow-up month. of growth during have to the peers comment pointed weak volume your about number sort And of a It like sight cadence retrenched to can also of line out where trying comments demand – talking have? to your December? softer as about October? figure – customers you trajectory Are demand demand. some you can type the that about they November, comment where What talking of pointing Are started? to you're

Tom Salmon

dynamic in being demand week fourth a was third August a our the consumer fiscal what specifically quarter, of change perturbation what measuring know customers by other metering referred quite space. interesting. companies backdrop September. heard in end – in in facing terms real ongoing customers, of the was that is calendar you've our It that how they're we're actually terms in cautious just and are really reference they're point of demand. And number inside carrying inventory, the what pronounced. I It you've to. the last referenced In very And there and was or quarter, that

quarter. first excess is outlook there's not fluff fiscal fourth in around that given a the customer So quarter in what for going of supply lot chain rationale softer demand our terms of calendar the to inventories, be

Mike Roxland

then it. just one quick Got And question.

you're up” reworking mix you trying EM us and "mix what last mentioned This quarter in on Engineered to more to color a from quarter with trying do bit provide Materials distribution? aside changes you certain little Can categories.

Tom Salmon

that material but that we're multilayer sustainable while Materials food and capital And transportation applies of we to making structures ultimately capability, to competency do, applies business materials categories, Engineered seek our science we to film the as that is the competency physical is investment more frankly to area pivot Inside toward. to applies that advantage films core it's them standing the only a what and business the and secure more take of inside not grow that compromising science with ability not well. an again to also consistent properties continue material core the making to

Mike Roxland

Thank you.

the Looking quarter.

Tom Salmon

you. Thank

Operator

from comes with Gabe line question next Fargo. of Wells Hajde Our the

line open. is now Your

Gabe Hajde

Mark, Tom, morning. Hi, Dustin. Good

Tom Salmon

Yes.

Gabe Hajde

mismodeling it in touch dig to And not item volumes that next out then year. or going away from XXXX. the adult little benefits, your recovering that A are diaper pandemic-induced that for a any curious I'm of sort point? input out there fiscal in expectations but is but some little that's and just and as on you noise the then or of things? in anything a portfolio what in bit You don't in care. obviously from guess we're you And I a into called have of the somewhat a talk kind I were far late pattern -- in into looking just about thinking there diapers a just at. going us? from price profitability how fem [indiscernible] of could also about semi-discretionary know terms this I out convenience little the And that's strategy, Is moving numbers nature, there's lot in bit us did been intentionally in in of bit terms contractual to call fiscal incontinence price/cost -- you short along say HH&S call. pivoted been I we want have can of was guys customers at for

Tom Salmon

as pivot Gabe. secure that well we'll more share and that continue space. premium, on ongoing to premium baby to more in The efforts path we to our be Thanks, and of portfolio look hygiene, incontinence, continues underway more to adult

of we terms it with drawdowns that business pandemic. recovery function our the was and fiscal We was of performance actually mix actually in with costs our the lag primary an the expect get were fiscal the the baby from and back faced which end though price was along of perspective earnings that frankly positive which the drivers. positive line expectation. masks and with improvement tied And anticipate sequential were on customers, in is quarter XXXX. more from fiscal it's cost our a to perspective quarter position June to non-resin in specifically, of third a And we to and price care contractual QX a in in offset QX we products and wipes year and end pandemic gowns benefited at a our that our on stable the spoke were inventory For we the hygiene drapes say comps this from of ago difficult some what from earnings would the

Gabe Hajde

to not And too you. Thank right. pin much. down All

obviously guys kind the activity You year up ramped share this March. of repurchase in

more similar of course Given and about will we that, be would the I'll or the it a the of year? given swings initiation over dividend you expect of like kind seasonal cadence kind of programmatic the say the guys things

Mark Miles

Yes. Thanks, Gabe.

I fairly would for to repurchases XXXX. fiscal the share your we've front-loaded, is has ratable pretty given laid that's the ratable valuation the share guidance temporary. way repurchases year. Our point, front-loaded, say, slightly the the share over slightly hopefully But to very out current It's

Gabe Hajde

Great, Thank luck. you, Good guys.

Mark Miles

Gabe. you, Thank

Operator

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

now is line open. Your

Arun Viswanathan

$XXX cash look taking $X.X to of XXXX questions. pointing guidance, at Great. about EBITDA, billion FY my of $XXX Thanks off, when for the you I free guess, to first flow. million million you're

volume Just can upper mix it price maybe end price or would above to you cost maybe of or guidance as on wanted you that to push range. just Is or well. elaborate Thanks. the see X%, growth what your the

Mark Miles

job I in XXXX certainly, great range. Yes, that. hurt, we end of year deflation of was inflation a wouldn't did the of getting spite sure. would obviously a and to relative say, higher the to Arun,

talked food we've as given beverage, being our more market. largest about care, much end hygiene, and personal markets, Our are stable,

demand is, from cash, thing right? markets pressure prices larger deflation have earnings. would price impact reality would extent our a the tailwinds us. we a our we doesn't on So spread. know, as And tailwind which for that can commodity large The same decreasing, impact extent downward have on other that you get cost puts some the is the to To help. be on And some volatility,

sit capital We the earlier, tailwind assumed we've zero obviously, Who mentioned here I a create slight of that got As as FX FX. well. that working a another being tailwind end as knows? tomorrow. there, but But target we to is working a capital today, on obviously consider. And, October, factor could would reverse

Tom Salmon

also, this keep of, eye And Thanks. is an energy. on kind

substrates, that sure, to footprint that I will plastics is to energy inflation, users see in pivot lower the value proposition will begin For you economic geographies plastics of as create an end pressure opportunity, of certain consumption the energy than consider. so will from an feasibility perspective, where converters a the around be speculate other continued considerably

Arun Viswanathan

the the noted you to fiscal Would commented of over X when Xs? that you move you so the -- Thanks to in Where the you're years? into couple lower evolving lowest X.X that you've for leverage, want year-end. of next think that now, I do see kind year that. down X.X. about And past, think the at you

So how we Thanks. that? about think should

Tom Salmon

maintain with want deploy value ultimately that's creation. to leverage It's shareholder and level shareholder maximizing consistent We all around a value.

of attracted that the been this and shareholders think as of we have we're very the type are, of both taking actions company company the value attracting, very in have a allow not stability the by to dividends the does is that As right interest cash dividend. now, as us that it do well and generates that very we coupled resiliency as compelling And share to We're existing we’re this this. that we we price may with kind a the to new to addressing is -- happy attract undervalued. portfolio said looking result, initiating shareholders'

at. our share company evolution its this So reupping and we're the we're with we're paying authorization very pleased in in pleased repurchase first dividend where

Arun Viswanathan

Thanks.

Operator

Kieran Our next of from de with question Mizuho. comes line Brun the

is line now Your open.

Kieran de Brun

morning. Good Hi.

[indiscernible] a had kind mechanical side, on do Thank part recycling, recycling of like lot follow-up you you. of the percentage for investments from a from might forward? potential CapEx quick recycling. your seems customers Just a think of those And focus going portfolio? on it of demand what about How there's given those forming mechanical you

Tom Salmon

be That that that to about we're solves Association-approved the be our recycle end We're mechanical will said, not material one if ostensibly is in I'd say new is fully off the that FDA-like ultimately an you committed us all by coming Safety will equivalent. this, its kind customers. fifth this have And problems. first largest line of going Leamington the solution Spa our Food there's allowing which to Europe. site excited

about regard. to when can encouraging proposition unique a have this as I job. the doing we bring alignment a proud lead forward -- And one And CPI And that really going It's team, well our we So And we end address objectives implementing our to could our in continued more very value part globally. as true drive think it. be those be to this this that's bring, have you has true that group. been carbon terms great our goals in Spa while proud. we're both I'm our quietly growth certainly excited. of can Leamington And end bullish as couldn't customers space. circularity, on to some team And teams is models be ultimately company in all the we this for is and of propositions of customer we're that customer for us continues to investment of not quality. value This expectations with a company. our of opportunity believe impacting our

Kieran de Brun

a And you. just bolt-on Great. do of go-forward really mentioned there capabilities to any be any maybe kind want on Thank about when on three basis? now where focused when you're your potential to focused kind to adding you'd follow-up, you think you M&A we range, on, in acquisitions area or regions more quick a would be then, is that X.X times of where that

Tom Salmon

to the didn't great emerging that expansion I'd our excited clear very are ultimately exposure of company job has We've of a is both on support we And it areas our done exposure fiscal generally. The support become answer or a to markets. geographies And the very this for it. increasing objectives. year to but in faster-growing markets commissioned chance and in been have of terms It have today, health speak care it faster-growing interest can in growth that about we're will we markets but fully company. that organic to also, Bangalore pharmaceutical India increasing its track. in

those our faster-growing pharmaceutical, prominent investments some areas in always interest. are So care, very that markets Health been are core solutions with in aligned priorities. customers dispensing of investment types of geographies we've and

Kieran de Brun

Thank Great. you.

Tom Salmon

Thanks.

Operator

next the question Josephson of Adam Capital from line comes with Our KeyBanc Markets.

line is Your open. now

Adam Josephson

first thanks Tom be similar it fiscal my for versus it in I and as you're second thinking will a XXXX call very questions. half taking Mark much Mark, think EBITDA XX-XX. was half, you split, mentioned

half throughout would And you're would more unless And just to want will the like confirm benefit bigger the a get weighted second perhaps, that first sounds – drag be currency that. half be in will volume I in Just it cost half. would be year. better price first the it think fiscal heavily thinking it the to bigger a

Mark? you're components, help just with those thinking you about me can So how those

Mark Miles

appropriate respect we of we're over achieve Yes. assumed would company. just it to No, Adam we'll the say cost the out, your actions you I earnings does outlook the accurate. prepared, the laid With to the way point the think, I extent, and the to was improve, fully haven't FX, flat extent not the demand course for changes any take We to there. year. assumption made to

So strengthened in XXXX. as bigger point half fiscal the to your headwind a back half, than front it course of have will over the the the dollar

Adam Josephson

give of To to I you'll I refinancing of rates, paying buybacks in of that on seems your you're notes? And sense I you're X% vast us on It majority And just that, I'm then, those, some planning coming you've at. wondering Mark. just higher flow is XXXX. up notes dividends like, million current in interest February of those appreciate just of refinance the out next you those? much likely think other those $XXX one. the your extent be At the how got form pay on you cash one can might year. think – rate and what

Mark Miles

well real we million Sure. able as Yeah. pleased XXXX return of the we to $XXX in as mean, that company. I obviously, capital were were de-lever

be refinancing, can how out, I think we'll proven to So we've our think somewhere markets plays you debt the be can seven of me rates it in I go to but in that to to coupon. X%, I eight XXXX check X% year think both. would the note, looking X% the do in that X% tenor we today's would at and this, something but respect on on With capital see depending but the certainly

Adam Josephson

Mark. Thanks so much,

Mark Miles

You’re welcome.

Operator

JPMorgan. Jeff line of with Our next question comes the Zekauskas from

Your open. line is now

Jeff Zekauskas

a And very What number next $XXX settlement would cash was if much. is benefit that? million the derivatives. there be the year for Thanks In statement, is flow one? of from the what there

Mark Miles

Sure. the for Yeah. Thanks question.

a each we've to benefit of at capital. the can of the we redeploy look those cost, talked of have company. available levers levers and We As we about, number

other and those we portfolio derivative such terms customers have levers is discounted to capital one with similar Our of levers as working suppliers.

market, just that And conditions year other have was evaluate. depending rates our so, growing presented you considerations those attractive to And opportunities opportunity some on interest different last thanks an more that of opportunities. than that

answer as to its out. items do to what the My cash assumption markets the be cash will in case has base different flow on deliver So, your company but predict zero question, and but how the XXXX the such would consistent see flows. levers mitigate impact to plays hard many year inflation for me of again, we'll

Jeff Zekauskas

to aim try and the For things, year by scheme about year, that ebb EBITDA. get a is number in benefit to the numbers had the circumstances that flow that million it under out you positive followed business number a it In is that of a numbers levels or cost case positive price -- each negative your of and normal the zero? cost are $XX your the on to to price you of

Tom Salmon

probably this, Mark years. price the is normal may inflationary but versus view a have than positive over environment a frankly, on XX last $XXX million in greater cost

Mark Miles

ones Yes. are year to I net the significant relationship. a like we The year where our price usually, tailwind environment. usually, The just the improving positive that inflation. last would the say of you is focus And to toughest XX% reduction again years material have actually productivity Those are cost of the deflationary costs most in on create have efforts the continue internal are and pressure. to most years thanks in improvements. XX% of our usage, relationship is positive, in efforts

Jeff Zekauskas

so you much. Thank Great.

Tom Salmon

Any operator? caller, other

Operator

questions. further No

Tom Salmon

want for to our first look day. I fourth Well, talking us Have to on thank the fiscal today report joining you call. quarter to great We forward everybody quarter. out for to a

Operator

call. participating. conference This concludes Thank you today's for

You may now disconnect.

Berry Global (BERY) 15 Nov 222022 Q4 Earnings call transcript