Berry Global Group, Inc. (NYSE:BERY) Q3 2023 Earnings Conference Call August 9, 2023 10:00 AM ET Company Participants Dustin Stilwell - Investor Relations Thomas Salmon - Chief Executive Officer & Chairman Mark Miles - Chief Financial Officer Conference Call Participants Josh Spector - UBS George Staphos - Bank of America Ghansham Panjabi - Baird Aaron Viswanathan - RBC Capital Markets Phil Ng - Jefferies Gabe Hajde - Wells Fargo Adam Samuelson - Goldman Sachs Operator Good day, and welcome to the Third Qua ...

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------|-------|---------------------------------------------|-------|----------------------------------------|----------------------------------------------------------------------------------------|----------------|---------------------------------------------------------------------------------------| | Fiscal Period \nApril | | Total Number of Shares Purchased \n51,500 ...

Berry Global Group, Inc. (NYSE:BERY) Q2 2023 Earnings Conference Call May 4, 2023 10:00 AM ET Company Participants Dustin Stilwell - Head, IR Thomas Salmon - CEO & Chairman Mark Miles - CFO Conference Call Participants Anthony Pettinari - Citigroup Adam Samuelson - Goldman Sachs Group Kieran De Brun - Mizuho Securities Michael Roxland - Truist Securities Kyle White - Deutsche Bank Ghansham Panjabi - Robert W. Baird & Co. Arun Viswanathan - RBC Capital Markets George Staphos - Bank of America Merrill Lynch J ...

Financial Performance - Net sales declined by $200 million (9%) year-to-date, primarily due to a 6% volume decline and decreased selling prices of $286 million [20]. - Operating income decreased by $45 million (27%) year-to-date, attributed to a $25 million unfavorable impact from foreign currency changes and a $20 million unfavorable impact from volume decline [22]. - Year-to-date net sales decreased by $1 billion, or 14%, to $6.348 billion compared to $7.348 billion in the prior year [53]. - Operating income for the quarter was $301 million, down from $341 million in the prior quarter, reflecting a decrease of $40 million [70]. - Comprehensive income for the quarter was $203 million, down from $313 million in the prior year [70]. - Net income for the quarter was $280 million, down from $326 million in the same quarter last year, representing a decrease of approximately 14.1% [79]. - Total net sales for the quarter ended April 1, 2023, were $3,288 million, a decrease of 13% compared to $3,775 million for the same period in 2022 [112]. - Operating income for the quarter was $301 million, down from $341 million in the prior year, reflecting a decrease of approximately 12% [112]. - Basic earnings per share (EPS) for the quarter was $1.44, compared to $1.53 for the same quarter in 2022, representing a decline of approximately 6% [118]. Segment Performance - Net sales in the Health, Hygiene & Specialties segment declined by $300 million (18%) year-to-date, attributed to a 9% volume decline and decreased selling prices of $136 million [27]. - Net sales in the Engineered Materials segment decreased by $156 million, or 17%, from the prior quarter, totaling $778 million [50]. - The Consumer Packaging International segment experienced a net sales decline of $122 million due to unfavorable foreign currency impacts and a 5% volume decline [55]. - The Consumer Packaging International segment reported net sales of $1,059 million, down from $1,139 million in the prior year, a decrease of about 7% [112]. - The Health, Hygiene & Specialties segment's net sales decreased to $677 million from $822 million, reflecting a decline of approximately 18% [112]. Cash Flow and Investments - Net cash from operating activities increased by $182 million year-to-date, primarily attributed to working capital improvement [33]. - Net cash used in investing activities increased by $109 million year-to-date, primarily due to the acquisition of Pro-Western [33]. - Net cash from operating activities for the quarter was $168 million, compared to a negative $14 million in the same period last year [77]. - The company projects cash flow from operations between $1.4 billion to $1.5 billion and free cash flow between $800 million to $900 million for fiscal 2023, assuming $600 million of capital spending [124]. Debt and Equity - The company had no outstanding balance on its $1,050 million asset-based revolving line of credit as of the end of the quarter [32]. - Long-term debt increased slightly from $9,242 million to $9,295 million, an increase of 0.6% [73]. - The Company issued $500 million of 5.50% first priority senior secured notes due 2028 during the quarter ended April 1, 2023 [95]. - Total stockholders' equity increased from $3,196 million to $3,295 million, an increase of about 3.1% [73]. - The company repurchased $333 million worth of common stock during the quarter [77]. - The company repurchased a total of 2,544,405 shares during the quarter at an average price of $60.92 per share, with $710 million remaining under the repurchase program [130]. Currency and Interest Rates - Interest expense increased by $8 million (6%) year-to-date, primarily due to higher interest rates [31]. - Interest expense increased by $8 million, or 11%, from the prior quarter, totaling $79 million [51]. - The effect of currency translation on cash was a positive $43 million [77]. - The accrual for customer rebates was $95 million as of April 1, 2023, down from $103 million on October 1, 2022 [86]. - The Company had outstanding long-term debt of €785 million designated as a hedge of its net investment in certain euro-denominated foreign subsidiaries as of April 1, 2023 [100]. - Interest rate swaps with notional amounts totaling $2.826 billion were executed to manage interest expense variability, all expiring in June 2026 [103]. Operational Insights - The cost of goods sold decreased by $968 million, or 16%, year-to-date, primarily due to lower raw material prices and volume decline [53]. - The primary raw material is polymer resin, and the company has managed supply chain disruptions by closely working with suppliers and customers [123]. - The company emphasizes the importance of passing through raw material cost changes to customers to maintain profitability [124]. - The company has geographic and end market diversity, which mitigates the impact of economic fluctuations on overall performance [124]. - The company is focused on delivering protective solutions that enhance consumer safety and providing advantaged products in targeted markets [124]. - Business integration expenses include restructuring and impairment charges, divestiture-related costs, and other optimization costs, impacting overall financial performance [125]. Legal and Regulatory - There have been no material changes in legal proceedings from the items disclosed in the most recent Form 10-K [127].

Fiscal 2023 – 1st Quarter Results Earnings Conference Call Supplement Thursday, February 2, 2023 @ 10AM ET Tom Salmon Chairman and CEO CFO Mark Miles Safe Harbor Statements and Important Information Forward-Looking Statements Statements in this presentation that are not historical, including statements relating to the expected future performance of the Company, are considered "forward looking" within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the P ...

Financial Data and Key Metrics Changes - The company reported a 3% growth in operating EBITDA and an 11% increase in adjusted earnings per share for the first fiscal quarter of 2023 [10][20] - There was a 6% decline in volume, attributed to short-term softer market demand, which aligned with reports from global customers [13][23] - The company returned $211 million to shareholders through share repurchases and dividends in the quarter [14][32] Business Line Data and Key Metrics Changes - Consumer Packaging International division experienced lower revenue due to softer demand, but higher pricing helped offset this decline [16] - Engineered Materials division saw a 15% revenue decrease primarily due to volume declines and lower selling prices [18] - Health, Hygiene, and Specialties division reported a 17% revenue decline, with operating EBITDA down 21% due to volume declines and lower selling prices [27][28] Market Data and Key Metrics Changes - Demand remained stable in consumer-facing categories like retail food and beverage, but discretionary markets such as automotive faced weaker demand [23] - The company noted that the outbreak of COVID in China negatively impacted volumes and earnings during the quarter [23] Company Strategy and Development Direction - The company is focused on pivoting its portfolio into higher growth markets, particularly in food service, healthcare dispensing, and pharmaceutical markets [10][11] - The long-term strategy includes increasing the presence in emerging markets, aiming for these markets to represent 25% or more of total revenues [15] - The company has lowered its long-term leverage target to 2.5x to 3.5x net debt to adjusted EBITDA [19][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining earnings growth despite a challenging demand environment, emphasizing cost reduction and inflation recovery efforts [19][37] - The company anticipates that industrial markets will remain sluggish throughout much of fiscal 2023 [37] - Management noted some signs of demand improvement in January, suggesting a potential easing of inventory destocking [60][61] Other Important Information - The company plans to repurchase at least $600 million of shares in fiscal 2023 [12] - A new international Center of Excellence and Circular Innovation Hub will be established in Barcelona, Spain, to support sustainability and innovation efforts [44][45] Q&A Session Summary Question: Inventory destocking cycle across core end markets - Management indicated that consumer markets are reducing inventory due to uncertainty, with expectations for gradual improvement as demand stabilizes [60][61] Question: EBITDA guidance and price cost benefits - Management revised the price cost benefit estimate for fiscal 2023 to approximately $125 million, driven by cost reduction activities [63] Question: Capital allocation priorities for 2023 - The company plans to prioritize share repurchases while balancing debt repayment and dividends, with a focus on maintaining a lower leverage range [73][74] Question: M&A strategy and focus areas - Management emphasized a focus on bolt-on acquisitions to complement organic growth, particularly in healthcare and sustainability solutions [80] Question: Outlook for China and its impact on volumes - Management noted that while China is a small part of the portfolio, normalization post-COVID is expected to provide a steady growth path [82] Question: Return on capital and long-term targets - Management indicated a historical return on capital around 14%, with expectations to drive that higher through incremental investments [88]

Consolidated Balance Sheets (in millions of dollars) 6 | --- | --- | --- | --- | --- | |----------------------------------------|-------|-------------------------------------|--------------------------|-----------| | | | Quarterly \nDecember 31, 2022 | Period Ended \nJanuary | 1, 2022 | | Consumer Packaging International | | $ 3 | $ | 2 | | Consumer Packaging North America | | 1 | | 1 | | Health, Hygiene & Specialties | | 3 | | (1) | | Engineered Materials | | 5 | | 1 | | Consolidated | | $ 12 | $ | 3 | | - ...

Financial Performance - In fiscal 2022, Consumer Packaging International accounted for 30% of the company's consolidated net sales[12] - Consumer Packaging North America contributed 24% to the consolidated net sales in fiscal 2022[13] - Engineered Materials segment represented 24% of consolidated net sales in fiscal 2022[14] - Health, Hygiene & Specialties accounted for 22% of the company's consolidated net sales in fiscal 2022[15] Debt and Financial Risk - As of October 1, 2022, the company had $3.4 billion in term loans and a $1,050 million revolving credit facility with no borrowings outstanding[102] - A 0.25% change in LIBOR would increase annual interest expense by $3 million on variable rate term loans[102] - A 10% decline in foreign currency exchange rates would have resulted in an $18 million unfavorable impact on fiscal 2022 net income[103] Sustainability Goals - The company targets 100% reusable, recyclable, or compostable packaging by 2025[20] - The company aims to achieve 10% recycled content by 2025 through expanded recycling operations[20] Employee Safety - The OSHA incident rate is below 1.0, significantly lower than the industry average, indicating strong employee safety measures[23]

Financial Data and Key Metrics Changes - The company reported record results for both revenue and earnings per share, with revenue growing by 10% and earnings per share increasing by 7% compared to the previous fiscal year [9][11] - For the full year, revenues reached $14.5 billion, marking a 10% increase, and adjusted earnings per share met the target of $7.40 [17][19] - EBITDA for the September quarter was up over 9%, and adjusted EPS increased by 18% from the prior year quarter [15][17] - The company generated $876 million in free cash flow and returned $709 million to shareholders, representing approximately 90% of total shares outstanding [11][12] Business Line Data and Key Metrics Changes - Consumer Packaging International division saw an 8% revenue increase over the prior year quarter, driven by inflation pass-through and improved product mix [29] - Consumer Packaging North America division delivered a 14% revenue increase, with flat volumes but strong demand from food and beverage markets [31][32] - Health Hygiene & Specialties division experienced a modest revenue reduction in the quarter due to lower polymer prices, but annual revenue increased by 3% [33] - Engineered Materials division's revenue was down 7% for the quarter but up 10% for the fiscal year, primarily due to inflation pass-through [35][36] Market Data and Key Metrics Changes - Demand in consumer businesses, which represent 70% of the portfolio, remained steady, while distribution and industrial markets faced modest headwinds [23] - The company noted that inflationary pressures and supply chain challenges impacted customer demand, particularly in the automotive and construction sectors [14][24] Company Strategy and Development Direction - The company aims to focus on organic growth, inflation recovery, and cost reduction while delivering strong returns to shareholders through share repurchases [13][41] - Investments will continue in emerging markets and key end markets like healthcare and pharmaceuticals, with a goal to increase emerging market revenue from 15% to over 25% [26][27] - Sustainability and innovation are central to the company's strategy, with commitments to make all fast-moving consumer packaging products reusable, recyclable, or compostable by 2025 [57][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a choppy demand environment in industrial markets but expressed confidence in the company's ability to recover inflation and drive cost benefits [46][45] - The outlook for fiscal 2023 includes expectations for adjusted earnings per share between $7.30 to $7.80, with a focus on continued inflation recovery and cost reduction benefits [37][39] - Management highlighted the importance of capital investments in positioning the company for long-term growth despite near-term challenges [75][84] Other Important Information - The company initiated a quarterly cash dividend and increased its stock repurchase program to over $1 billion, reflecting confidence in its business outlook [12][19] - The company has reduced net debt by nearly $3 billion since the RPC acquisition, achieving a leverage ratio of 3.7 net debt to EBITDA [47][48] Q&A Session Summary Question: Can you expand on automation and asset optimization? - Management stated that automation is a priority across the entire portfolio, with over 125 dedicated technicians supporting projects [64] Question: What is the guidance for price cost variances in fiscal year 2023? - Management indicated that about $100 million of growth is embedded in the EBITDA guide for 2023, primarily from cost reductions and some price recovery [67] Question: Are inventory levels normalized? - Management confirmed that inventory levels have normalized and are actively monitoring rail negotiations [70] Question: What is the outlook for free cash flow in 2023? - Management expects free cash flow to be in the range of $800 million to $900 million, with cash from operations of $1.4 billion to $1.5 billion [40] Question: How does the company view its capital structure and leverage? - Management expressed confidence in maintaining a leverage ratio between 3 and 3.9 times, prioritizing share repurchases and dividends while still being able to deleverage [114][115]

Fiscal 2022 – 4th Quarter & Fiscal Year Results Earnings Conference Call Supplement Mark Miles CFO Tuesday, November 15, 2022 @ 10AM ET Tom Salmon Chairman and CEO Safe Harbor Statements and Important Information Forward-Looking Statements Statements in this presentation that are not historical, including statements relating to the expected future performance of the Company, are considered "forward looking" within the meaning of the federal securities laws and are presented pursuant to the safe harbor provi ...