Berry (US:BERY)2023-11-17 23:50Financial Data and Key Metrics Changes - Berry Global reported a record for adjusted earnings per share and exceeded free cash flow guidance by over $100 million, finishing at $926 million for fiscal 2023, which is a 6% increase compared to the prior fiscal year [34][61][92] - Adjusted earnings per share increased by 1% year-over-year, while operating EBITDA remained essentially flat [38][62] - The company returned $728 million to shareholders through share repurchases and dividends, reducing total shares outstanding by more than 22 million shares, or 17% [39][45] Business Line Data and Key Metrics Changes - Revenue in the Consumer Packaging International division decreased by 6% due to softer consumer and industrial market demand, partially offset by an improved product mix [40] - The Consumer Packaging North American division saw a 13% decline in revenue, primarily from lower selling prices due to resin cost pass-through and softer demand [41] - Revenue in the Engineered Materials division fell by 16%, driven by lower selling prices and volume softness, although growth was noted in consumer and custom film markets [42] - The Health, Hygiene & Specialties division experienced a 17% revenue decline, mainly due to reduced selling prices and softer demand in several specialty markets, despite improved demand in wipes and adult incontinence [43] Market Data and Key Metrics Changes - The foodservice segment grew slightly below double digits in Q4 but is expected to continue growing in fiscal 2024 as the company adds capacity to meet demand [19] - The company anticipates continued growth in emerging markets, supporting its commitment to global growth and innovation [36] Company Strategy and Development Direction - The company is evaluating strategic alternatives for its Health, Hygiene & Specialties segment to enhance long-term shareholder value [35] - Berry aims to increase its consumer-facing product mix from 70% to over 80% in the long term, focusing on high-margin, significant scale growth [8][36] - The company is committed to sustainability and innovation, leveraging its design capabilities to meet customer needs and expectations [37][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2024, expecting positive impacts from easing inflation and a return to more normalized customer promotional activity [71] - The company plans to prioritize debt repayment and share repurchases, reflecting confidence in its business outlook and long-term strategy [47][96] Other Important Information - Berry has reduced net debt by over $3 billion since mid-2019 and anticipates a balanced capital allocation strategy for fiscal 2024 [45][62] - The company expects free cash flow in the range of $800 million to $900 million for fiscal 2024 [47] Q&A Session Summary Question: What are the strategic alternatives being considered for the HHS segment? - Management is conducting a thorough evaluation process but cannot provide specific details at this time [4][88] Question: How is the Engineered Materials business evolving? - The company is focusing on increasing consumer-facing products and improving the product mix to drive growth [7][8] Question: What is the outlook for foodservice growth? - The foodservice segment is expected to continue growing, with strong performance anticipated in fiscal 2024 [19] Question: How does the company plan to manage capital allocation in 2024? - The company plans to balance debt repayment, share repurchases, and dividends, with a focus on maintaining financial health [9][92] Question: What are the productivity goals moving forward? - The company aims for a 2% to 3% productivity improvement annually, which will be additive to existing capital initiatives [83][96]