Berry Global (BERY) 2 Feb 232023 Q1 Earnings call transcript

Good day and welcome to the Q1 2023 Berry Global Group Inc. 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 Mr. Stilwell. Dustin ahead. go Please

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

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

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

Following 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

As comparable in a on referenced some GAAP during release measures. discussing website. X, between available differences financial financial The and in investor call, and financial earnings our be will the non-GAAP GAAP measures this we on of the Slide are most our measures directly non-GAAP presentation reconciliation and

of reported presentation. in Reconciliations the results businesses full-year, to results. our earnings presentation, within today been commentary we compare divested and to a constant quarter comparable when on present release provide have appendix appropriate of to remove our that and impact we and provided note to Please the year our our prior adjusted the the our or results have in basis currency

described are risks, therefore be the our on the made, SEC. earnings and future our may report Form involves made and events and those XX-K, number statements and impacting release, filings in limited including reminder based These of a beliefs, other And that expectations finally, not to a with statements statements. concerning today annual but certain upon company uncertainties management's forward-looking

differ could the implied expressed and materially, results statements. or financial of company Therefore conditions in operations the our from actual of forward-looking those

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

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

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

first results growth and earnings made we gradually of the EBITDA Our XX%. last strong concentrated including into quarter X% years, two pivot Throughout delivered growth share investments higher have business regions. solid portfolio per our markets growth to adjusted and operating

proactive including in ahead We areas significant in opportunities projects. such diligently seen robust cost care our of invested food customer we've taken productivity linked health investment of projects, service, markets, all actions, have several and cost reduction a businesses. sustainability pipeline Also, as pricing dispensing, and us of work focused inflation cost pharmaceutical across on

on cost soft short-term easing During along in or million capital focus another of reduction fiscal XXXX. Furthermore, million at market shares of $XXX with $XXX we the returning businesses. continued efforts inflation quarter, X.X% our demand nearly repurchased of a and expect repurchase those shares to shares least of helped shares outstanding, our million outstanding across and modest offset X total

strong for generation, EPS cash an continue and long-term free And EBITDA. growth investments X.Xx last our shareholders. returns target focus at which the growth our debt earnings our strong earnings to adjusted target on ability confident X.Xx growth capital X% support earnings reaffirmed includes sustain long-term Additionally, have which we've to guidance we midpoint flow finally, to net lowered to with to leverage call, our on will our are provided to in and along

both our quarter have X% were was Slide cost actions customers share market reported. driven performance in-line EBITDA with Turning our now met spread, These The demand, partially efforts. volume expectations, earnings for X. by primarily the XXXX financial to our December price highlights including per and on offset strong primarily a driven what reduction which softer global by decline, by cost driven internally short-term

From a XX% including from increased year million from an EBITDA comparable positive quarter, benefit the earnings over operating prior EPS up $XX adjusted was and price X% perspective, cost spread.

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

initiatives repurchases actions quarter, the During to to share automate will the facility, cost additional savings which returns our with million. strong our assets, long-term our through from structure, dividends fiscal returned optimize to our In-line our $XXX and capital year shareholders million we've taken in cost quarter. to further total for reduce the strategy provide bring over we $XXX and both to shareholders, our

with in to hand our we're and key an emphasis continue I as to differentiation I potential want what and driving each on cost long-term base markets. to greater our and in offer which before end long-term. and and X remain and dependable, growth, focused review focused of growth such both sustainable low businesses markets, over healthcare to the on and Mark, manufacturing for We pharmaceutical Slide organic consistent, near world-class build the on Now, maintain invest

emerging and total our sustainable provide increasing will less will we than expand now since to to in growing end presence and with growth. Longer-term, our along long-term presence emerging XX%. continuing our believe our we in growing dependable, X% IPO emerging growth. believe consistent, enhance market or global We've of XX% of done invest a markets further support job can position from invest be We our our XXXX ability revenues. to great more we our that regions, continue to emerging Additionally, market in market commitment market our in to by faster

and businesses. cost of solid by continue improvements we confidence earnings innovation us our continual we stable represents are in consistently give deliver differentiation. and to believe to our leveraging lastly, this will advantages to the from a do with combined drivers increasingly we ability continue sustainability and scale capabilities portfolio deliver and our And growth everything opportunity growth great for when embedded These

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

like I Tom. you, to each quarterly Slide Thank operating our X refer our everyone for would segments. four performance by of to

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

International lower pass-through softer Our inflation. higher division from customers, Consumer the demand offset reported driven pricing our from modestly primarily by by revenue partially of Packaging dollars,

Demand positive cost negatively such EBITDA was And earnings of consumer China softer spread stable outbreak across surface relatively our customer in facing coatings. beverage as automotive such customer and the volumes offset in overall categories markets quarter. weaker and in price was flat as and the with COVID also impacted demand. essentially food discretionary Operating retail demand as

cost spread effort focused inflation our to our packaging, recovery, and by by presence increasing and productivity, healthcare product cost devices, The dispensing positive price our systems. pharmaceutical improve was mix driven in

actions pricing continue reduction our growth driving recover sustainability and We cost cost from to leadership. revenue inflation initiatives while through

selling XX% Next, was customer and year industrial the lower on revenue Consumer Slide demand, result of primarily our quarter in the as X, of in down from from North pass-through in softer the overall America costs prior a resin our U.S. division markets. prices Packaging lower

We our continue other service to substrates food to deliver conversion cup. strong polypropylene continue growth in to see we market clear our from as

continues recovery incremental manufacturing and continued to location impressive reduction the We supply internal cost additional prior for demand product this an quarter, including as XX% an technology for driven continue efforts by EBITDA along inflation cups, improved by year over with increased primarily outpace mix. add supply. Operating our to

soft Engineered revenue Slide to cost. volume in decline Materials prices the related on declines path volume was the X, demand, our down industrial was due in resin to quarter, selling And division a including primarily The overall European for our markets. XX% lower to from lower customer

product focused effort XX% primarily efforts. our transportation over as an categories normalize. and mix also the like year Volumes along and categories to internal higher our in reduction EBITDA chains was Operating certain customer destocking prior by impressive were zones] [shrink mix sales [ph], cost impacted on focused and improving up effort quarter, from up with supply value

XX, revenue of Slide XX% in the curve Health, selling was prices down Hygiene, On costs. due in declines with resin past and lower Specialties volume division lower along to our

to stable along our see to specialties such see continue with inside portions of as our demand construction. destocking inventory softer while ongoing markets and markets, We hygiene building in business our continue demand

due recovering than in polymer. XX% Operating as EBITDA expected timing was a down for on other lag costs to inflation quarter the

pass-through to to earnings and will improve customers cost continue sequentially. expect our We these increases

XXXX fiscal adjusted both assumptions for and are and cash guidance EPS Slide our reaffirming our are shown guidance Next, we on flow. XX. free Today,

strong per the share, record our of as We year to have year EPS and every public be a another midpoint delivering of to track $X.XX earnings $X.XX expect fiscal of growth, at continue consecutive single EPS improving tenth year growth. adjusted which and record company would between a

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

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

see investment repurchases, growing growth share continued a a reduction debt dividend. in can organic cost you our includes and XX, on allocation As and capital strategy return-based Slide quarterly projects, is and repayment, cash

dividends, to we repurchases levels. shareholders XXXX, current or X% by million reducing and our fiscal expect return share including In at outstanding $XXX via shares more to valuation further

million shareholders the X.X% thus million outstanding quarter, in shares to the dividend, quarter. and first quarterly another $XXX paid During repurchased of of or first shares $XXX fiscal we our returning back

are dependable strong our flows management on model both earnings, long-term shareholders. moved continue leverage our cash as to focus for value to opportunities. we given our believe creation we our we X.Xx earlier, and mentioned continued Tom long-term strategic resilient through X.Xx range business to value As have and down We portfolio for well-positioned driving

review, my to turn concludes Tom. financial back This and I'll

you, Mark. Thank

strong strong polymer-based model Our allow to cash for us portfolio broad resilient, proved stable returns dependent including solutions the business on flexibility drive packaging a with to our flows of shareholders. has

Europe our global unmatched local and and design customers in-house capabilities serve X top advantages in a and top competitors. build scale with all to footprint regional centers both and X Our being provides toolmaker the us by differentiation recycler while and markets

recovery demand we've choppy, stronger to been offset able softer While productivity environment improvements. remained the with has demand customer price and

in-line viewpoint, throughout industrial remain we of markets will much be current demand our with global our fiscal challenged and believe From customers our XXXX.

stable any we our driving dependable earnings provide allow through and growth very efficiencies throughout asset will internal demand benefits historically will and offset us challenges. portfolio as reduction strong had footprint We to also efforts demonstrated. and while inflation the optimization cost global our We believe to ability stability recovery, focus cost demand and

consistently can As have on earnings, flow, driven Slide including company. including our years, to as several driving the be per a adjusted value revenue, top metrics, our past for growing every annual strong and see The earnings all focus publicly share cash rate top-tier growth we targets you free in continues nearly traded including year results priority. XX, financial settled on compounded over our we've shareholder key

mix Starting while markets began in to segments, of each heavily with the four several our portfolio. and ago, in faster working years improve emphasis regions, the our of growth we investing growing in product more

As majority have used an attractive average we at strategies acquisition to you can we or opportunity. our post balance delivered Slide results see on our and and from improve above these debt sheet the Historically, peer commitments. reduce XX, the of cash our

our Now, to similar keep We share opportunity in and of a to believe and the initiated our we've chosen equity to peers, to in very provides cash dividend. majority investment. us long-term to will quarterly new be for shareholders continue close valuation these to range our the a market leverage providing lower believe return now which make a to range, strengthen a our effort and our the will X.Xx attractive opportunity gap, further concerted of via balance our time repurchases rewarded X.Xx over leverage sheet strategies

Since $X in RPC Furthermore, growing per $X.X our of also Next XXXX, share our and by from XX. acquisition and have billion acquisition. dividends These fiscal value share nearly three our via use debt since cash debt the mid-XXXX, in returned billion XXXX, on shareholders past net fiscal we've adjusted XXXX the Slide expected we fiscal will reduction, while years over XX% of over than to our and RPC first total share in including returned reduced repurchases the paying while dividend. $X.X earnings shareholders uses cash to repurchases, will ever quarterly more of billion.

of The created We and the ahead. provided model our cost the our past are believe substantial to there synergies return RPC shareholders. we and ability and product opportunities over years, and several for attractive believe combined innovation, and consistency include sustainability has enhancing The leverage significant revenue cap and portfolio. value to additional for technology development stakeholders value commitment know-how has underscores our stability acquisition our our long-term

new a growth, new will Spain. global announce to to This in location option, excited spirit for and the diversity, Innovation high Center development. we're talent to and commitment located indicators. with being designed considered One is sustainability, international of that Berry Circular Barcelona XX, Hub Slide On were foster the preferred talent, our Berry's new demonstrates Excellence Several Barcelona, and and sustainability locations international and to economic center scoring be due

Barcelona the for circularity customer the innovation was part one and net products economy. to interactive and of Berry's experience elected the center, various are designs as an achieving hub cities zero a will in point capabilities in be and best learning recently new focal how This a showpiece solution world. live innovation for a sustainability underlining house

significant We creation. innovation deliver presented here we unmatched on design sustainability shareholders like innovations see through global for have can and strong and customers been well-positioned you as Furthermore, are through with XX, investments of linked and footprint an customer to value strategic these to value investments, a part capability support our Slide believe our circularity. recent our

shelf proud innovations, starting Berry’s solutions, and few improved highlight healthy spreads innovative a We're longer imaging life. combining to with reusable SuperLock that packaging recent and with an container provides

Coca-Cola pleased in seen the might Sustainability Union to to to in circular packaging tethered to International release, recently first given in is caps with press to provide likely EXPO Coca-Cola for at and soft a company remain for Coca-Cola our the supply The its you have collaboration PET plastic designed littered closure carbonated PACK more make likely Prestigious a as recycled. bottles. announce intact new tethered lightweight recent European this was be became to manufacturer less Next, the a in Berry for solution. We Award markets. the closure model, with Europe drinks with it tethered be I'm

worked and offering, efficiency and sustainability a core we met product German while Innovation improvements finally, time providing leading for providing their filling their at the XX% customer, reduced are Berry. with Milchwerke and sustainability and dairy goals logistics by And together of weight needs lines. Schwaben same strength smart

considerable with to R&D leading geographic products the capabilities and have to our expertise. capabilities We When unique our ongoing needs and these global provide reach, opportunities and develop of meet science customers. material unmatched differentiated scale coupled

key Next, on Berry Slide XX. key long-term for our highlights I the for want to targets long discuss our investment metrics. with

benefits primarily extensive procurement our world, the With manufacturing more technologies largest We are a CPG customers, provide global with with locations from capabilities. leader non-discretionary customers than platform, both and market. and to a innovation us several XXX across platforms our around [indiscernible] in providing proximity our stable the our scale low-cost products to

a We flow of have exceptionally earnings stable on with as growth, history XX, Slide along consistent proven cash and of businesses. set earlier shown

customers gas products, in economy. role focus manufacturers of our as zero taken net a we've leadership reducing a innovative with the one largest evidenced supporting world, Additionally, a sustainability plastic portfolio of the and by greenhouse a on emissions

X% returns of to X% XX%. to to Our growth of and includes consistency shareholder which EBITDA targets of EPS of long-term X%, XX% total model, evidence XX%, further our and the operating dependability growth

the As growth forward. past or over expect exceeded targets long-term met years, so can you we've similarly three to see, going and do these

and our metrics providing Additionally, believe and the initiated newly with similar to long-term achieve to in business returns we dividend the we updated lower grow range leverage target we've to expect shareholders. our while these We capital be of leverage X.Xx. to X.Xx operating can annually, consistent

remain priorities summary, In our unchanged. strategic

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

agility with market We inflation. while to current recapturing dynamics will continue growth to we as sustainable navigate operate drive

on advantages Berry delivering time, the and financial position our of solid our value, shareholder to long-term global and a very delivering costs we long-term I'm expanding executing dynamic of higher priorities our competitive hard strategy in persistently remain employees, At success. with on our driving pleased of face focused for economy. the same the results work

all for you Berry. Thank continued in interest your

note that year-end. Q&A, want to to I I announced we that at today turn retire before to Now, plan we

to glad I the and we Mark company the transition value throughout any positioned all you With be very that, may will well for make questions stakeholders. As deliver to have. remains answer XXXX, to significant continue

Instructions] First from Panjabi with question you. will Thank come Ghansham [Operator Baird.

Your line is open.

between major announcement on Tom, CPG the on end your and core markets have similar a as and on very based where down congrats well. morning. your on Do cycle that retirement. Good to across quarter, destocking guys. maybe the you some off, sense split to inventory the just of volumes very, your reported companies. guess, as Yes. we also are consumer markets industrial first your on it's volumes being Hi X% I the December by

Yes.

time I that smaller measure a in expectations is count can consumer any on that they think I and until from certainly regular cadence more inventory reduce higher prudent take certainty greater have the a continue of deliver the to frankly terms of side, uncertainty, in quantities basis. consumer demand. there's specific expect they we to there's

I change expect dramatically. that So, don't to

some demand remain for there's would prevalent destocking certainly – From a part that we people's as less improvement, as showcased if of seeing certainty, demand better sluggish are industrial will. it green XXXX. January. expect I being print, shoots. And you in fiscal describe an the we relatively basis, industrial will become We in more

you. a then for question Mark. maybe Okay. And Thank

was sort EBITDA year of fiscal number guidance? higher, heading it with first be bridge sort the On just earlier are typical because EBITDA embedding quarter, your of it $XX to I'm like asking What seasonality. cost And for about start relative looks for million resin that like for benefit. XXXX correlating the looks a price to will you,

into million. now gone have year cost better about the the Yes, XXX Thanks, Ghansham. feeling we of number. Sure. We're I'd on say that price side, thinking

driven by that of for thinking action that's XXX we're activity XXXX, the on. has company cost fiscal more reduction the like think taken and million I

so Perfect. Thanks much.

Thank question. with for One Anthony our of the you. [Technical moment Citi. Difficulty] from next Pettinari line

Your line is open.

next best Good morning congratulations the and on and chapter. Tom, wishes

on Just question. Ghansham's up following

call, with last talked cost and you earnings about cost recovery the On flat reductions. guidance, volumes full-year growth coming assuming EBITDA from

about we reductions, or is volumes for a on I are – view concentrated accelerated if the expected segments? So, so, XXX should offsetting year? a four think think And is that that the that maybe volumes million, weaker-than-expected fiscal which than weaker where cost the where maybe now maybe bit along as

Yes.

primarily component type incorporate plan leverage on performing X on price. all reduction, done. clearly, you the front, cost will XXXX hours see I right would which million inflation deviation an in from we of our over is consider to improvements and in And for any deploying the from cost one more cost. demand it If the two get areas, through We've over last automation made other And to with our operating cylinders a variablize following. alone – offset The the now will operations say, huge years remove $XXX three energy of sustainability million operationally. company capital is perspective, efficiency labor structure

$XXX from million hours over million-kilowatt operations. remove to We've our XXX invested over

we to in right we're the continue best but So much right do footprint not for thing also it ultimately and with safety. the is mention the carbon what doing making are And of we messaging improving not decision, to terms material the and better. only making financial that sustainability what actually

focus site. it when really you And are game, and our the have – productive areas our about some some keep a our priority, benefits. that the the safety in safe, Number again, of Those the overall, think we've heavy significant but is of had scale can people company inside them X keeping

estimated that of of we're million we've that from actions the right be had done and plus So to that's that investment Mark make get in and the where range happen. $XXX the taken to quoted

just helpful. the very definitely then to sense. turns leverage And that makes target X.X X.X That's updated Okay. on

sort X.Xx, you it's about balance as, a your at I wondering think debt XXXX from in and for talk those? slides, far just if versus there's repurchases paydown of Understanding reference but leverage I'm target which I unchanged too the is, to guess, XXXX a potentially last staying how range, you priority year. from not

believe And that compelling to shares dislocation within being precedent, anticipate opportunity end unmatched the We target the right question. our great opportunity now, at is the reason of for a takes that fiscal an us. we range is the valuation it our repurchase given XXXX. It's in

in as continue of shares further believe end shares, to allocation program in And of going we by we're pivot But that we buying can XXXX. again, valuation the ultimately to those improvement capital our see as in on the we fiscal back our to part debt focus range So, be of reduction. XXXX. certainly, we'll

Yes.

quantum I portion grow can our can do growth of mean think generate debt. cash a we all earnings We continue I just the can shares the the We that back and substantial and Anthony, of and business, dividends. buy to stability we three. repay of

to So, I do a three. think all we have opportunity great

I we're inside one improvement the clearly suited better that opportunities have some for look we markets our financing Anthony, perhaps have other there. to think, of at in We showcased businesses out the see starting are operations. is, enablers that portfolio to

expect a that big some allocation opportunity pivot As our that you that energy clearly markets focus capital and such, of get if our A allows portfolio built, we to then as will. we've size. to that improve, the to proceeds a component big and throughout here XXXX us wheel should and of And beyond. those of the be do to easier financing for

very I'll turn That's it helpful. Okay. over.

next One Mizuho. with come will moment for our from Brun That the of De line Thank Kieran you. question.

Your open. line is

focused past the that a like areas your front side Hi, be how more capital XXXX growth strategy? think where XXXX, think helpful? into, things, I where into Maybe we any longer-term kind now be to thinking of which about going up on would you. the circularity of on seems about When fitting are morning. you'd opportunity the big good to, see allocation. should focus, just we I you a or that Thank think, M&A of follow do forward? on And be like, mean, that kind thoughts

to markets means The of There's we we in articulated acquisitions as have access in our do how no utilize focus scale. care, organic Yes. believe pharmaceutical unique emerging solutions, the which create to mention, is right attractive a solutions a in all least that real spot dispensing like growing Berry are large-scale sustainability to that at we've bolt-on markets. to health acquisitions We not ultimately of some to right clearly – accentuate growth. more on the that now. past, is

So, while we [sites] that in provide recently pharmaceutical some greenfield just take care advantage [ph] announced a growth. at will opportunity it the bolt-ons complement site to of point, that Bangalore, health for to and clearly,

And That's again, allow all – that look opportunities to others having can our can the be supported organic we We to that priority approach. a company by utilized against I in us can continue of dividends, – of why, those be our continue some as own invest Mark and portfolio mentioned, to just we a believe portfolio, proceeds it's balanced deploy and dispose lower as those for really better reaffirm our leverage the balanced pieces range, look as of we by growth said, – we allocation we as a inside that can us. of as commitment could operate to between at objectives. buybacks growth today capital

to, Great. your what half fiscal expect kind post the throughout the rebound Thank volume the in it impacts a has for follow-up China year? I'm throughout Are of second your and quarter seems that just on you curious on it the I been thoughts quick Chinese mean of And first the on specifically, then seeing you. that China you you're just that seeing? kind the gradually Year? gradual quarter. outlook increase Lunar like of acceleration and how New year the still Is back something maybe

the part was relatively portfolio China will those provide quarters. But a it said, growth China, the impact path for inside think consistent shutdowns. overall. there coming [indiscernible] relative normalize some to more That small as steadier, in our I is of COVID-related a

certainly for tailwind that sure. be So, would a

Thank Great. you.

moment our Bank will George come And you. with Staphos Thank that America. One – for of question. next

line is open. Your

Congratulations else's evolved I'll your Thanks Tom, echo Thanks all over comments. good very and much. the Hi, everyone morning. Company's to details, you. for time. everyone, significantly

So, congratulations couple questions. of on that. A

last The on first and the targets on cost. then price

targets, you the target being again your of this is we terms that of X.Xx, the terms to would certainly what view. in to deleveraging in view, In now right X.Xx with the most target why changed So, agree now? talked

mature see higher growth? anything where of being in it your Berry is acquisitions why anymore changed applied the terms to leverage? do Is in you growth to be. cost of target. expect capital that's have and terms And need this with in near in you a place mentioned what in Was see in to don't number view Will you there terms have to Is Relatedly, the targets of on capital several view a the on better I is that do terrific. to now you companies return Slide of you it a be capital one XX, could the don't recurring continue to over future? mind next of years?

We've a George, short amount size doubt, as time. relatively doubled in No maturing we're a company. in of

growth focus is can mentioned, add not scale – company flexibility. prominent the we're ultimately the then us. consistent of of market with leverage received terms real lower portfolio the global that range. us driver. accentuate also is some those the our amount global scale And of What feedback an the cash the to in has flow That's we've robustness our amazing given gives driver or that for presence. well again, focus our we on And larger predominant target to that as relative is the the shareholder grown Mark to the and it allow point pieces As is us the to that our how fortunate

mean as return pretax. been around of has capital I over – return we've XX% capital, our several of the company. On years the George, That's last a

look to north something target that. we tend for we As incremental of investments,

includes think So, acquisitions lower on plus I because had a bit on of just a larger number that way obviously, and including that to return it size, naturally them. to a grow about lot we're therefore, don't things, XX% it number, looking think little but capital were is to different bad obviously, that in

for overall company, investments, So, I I the to but XX%. think drive a spot XX% we think can good on incremental is

term And did to micro, congratulations question, Mark. other that of kind your the then or so quarter. than near in on cost. job Thanks that on the real Again, to other good a price HH&S more segments, other you

was price quarter. You lag. you more on on and that luck Thank year? cost going this it there HH&S course over anything a was the positive you do a difficult HH&S to mentioned good the period? expect in price/cost And when But else of be made

Yes.

your question, we think was your factor, relative negatively mentioned, that specialty higher our what a more results. mix as of I the certainly first on some product part to a little margin quarter, categories of impacting carry the impacted

as markets to would of get that over component year, course improve of So, those better. expect relationship the the I the

the We've mentioned incremental the got, over of quarters. next course prepared as impacting business the ongoing several comments, price also that in

to So, continue think make progress. we're I going to

I relative XXXX think as something of outside changing inflect to of when a inflation, would to to we go back half we expect positive the to positive.

hygiene the be George, And stable. to business piece of very that continues

those customer solid filtration, outlook confidence niche like dryer is there some Some of any wrap. and sheet, areas or demand improvement spaces terms These are or of all discretion franchises house going very ultimately, to customer benefit that businesses. those were only really in

improvements see So, we'll renewed as and as implanted. sequential Mark contracts are said,

you very much. Thank

Will question. Jefferies. you. with next moment Ng line of Thank for our the One from come Phil

Your line is open.

Hi over years, the you'll Tom, be certainly help the for and missed. thanks all

how back segment? tracking off, goal potentially do see the And in of year about still year? Is guys point? progression declines I see appreciate. in bad this and first volumes you do the how XQ inflecting being less at flat guess, volume this think half? realistic you kind this a should Like really in by the we we So, volumes

that demand the consistent plenty other we print with fared that we've really the start half not some frankly. that the fire in as And first would think the had well we pretty half, That there. the that irons peer the our that we're anticipate in materialize. back the than reports that are being world, by customers I softer for on of got should certainly, demonstrated, front the but of out said, is quarter, around saying based in seeing quite regard I'll we've

further going team's that they demand, variabilize in cost been and over put our and a several excited soft enhanced ramp. as been both the good have have as well I'm structure years And last of demands productivity profitability really position as in these can done. investments made us as forward, We that really concentrated the terms again,

ultimately base, So, which of that again, to difficult pieces our puzzle, would with all But we customer exactly. call expect. performance is it consistent very our

And guess, you. Mark. for question Got a I

seeing whether it's number? of thinking up just called you there non-resin cost your that and any self-help of million. that from XXX think Maybe XX from And this guy you some upside like are here? provide your profile, how inputs, deflation resin could potentially cost you largely year, out price to some stuff? good I productivity be a are that about so Is million

would on Yes. Tom Sure. Obviously, but mentioned I think side. is largest is million cost material. that, – say of I XXX the XXX the you million breakout, know cost our

teams reductions – operations long and costs across next down the different material our So, anything sourcing approved some automation driving including mentioned in products are can do great cost lot that reduction drive our cross got projects. of is cost diligently generate are category. We've initiatives, a to costs. labor savings. cost largest of investments improvement pipeline labor working a We've to got in of we our Tom to productivity

And largest got the our falls usage. right and obviously, a company pull, lot can we've we've of a cost largest on the energy said, levers Tom that. as energy but to we focusing of number savings, material labor generate of categories across certainly, reduce got behind So, initiatives the

as resin that level right at mentioned it, of – teams working operationally are very now. a part I Mark high and being are the And biggest said,

XXXX net a since you over an sense, give across seen alone, we've sites being our in that XX% improvement yield type to of efficiency. Just our generating

So, as a you're operations, across more benefit, efficiency and said, as grow your well as volumes opportunity and a reducing provides, I as generating near-term you're your scrap, that to ramp. your continue long-term

Okay. Thank you. color. Appreciate the

next Difficulty] our of Castillo for Thank question. you. Angel moment Stanley. with [Technical One Morgan

open. Your line is

thanks retirement. Hi, question my your and taking congratulations Tom, for on again,

question hoping color I seeing, to we that instance, potential the little us more versus sales a quick give the I about that on growth how the about, down EBITDA inorganic wanted how are in terms as little you're So, those – think bit to we thinking more as bit you particularly is much targets. just bolt-on could to of organic a opportunities? long-term of and X% how of for a was X%, breakdown, break

growth breaking And then beyond down that, EBITDA and of you or how kind margin underlying that how of much on line, EPS of are would it then be, in terms buybacks? kind kind expansion? And the of lastly,

Sure.

as now talked I aggregate, got prepared and the has we focused our markets. think many think range. the single-digit grown We've in lot have low higher-growth of to pivoting a to effort we quarters, business comments about in the for in

mix moment, time, the of as as than business EBITDA result, over again mix our we're but low we growth the opportunities. looking a current deliver single-digit So, higher volume that side, of which certainly, on higher for leverage fixed the something we on costs, well our can get support as benefit on at improvement

those So, bolt-on price it conditions to difficult. meets cetera. is depends attractive et the thresholds, a very that on at Obviously, how to think, cetera, the in our sellers et return that's I predict company market acquisitions, and year-to-year, market

acquisitions targets acquisitions. another. those single-digit EBITDA by contribution the provide and But on So, supplemented meant long-term higher incremental side year-to-year, targets, again, of low be lower year one going vary, be the in to is could bolt-on that you to something know growth should in volume are

of X% should about is be of kind mindful the anything rest thinking are longer X%, to on more just if how And there? curious else then EPS term, side, it's buybacks of you kind we the or

very us is different Right Yes, attractive. going provide market thing. share to our same different opportunities is with the now, times. price Yes, at

But it's great our so, certainly. able providing to that's we're situations be accordingly opportunity advantage respond and that market very depending of, at we'll the EPS to results, those drive And taking investment us, what results. provides bolstering us on and the

mentioned a your on January. from size maybe earlier, a green And just It incremental hearing would changes and you give Could shoots And lastly in helpful. seeing then customers, what us as green color but might of be be? you orders kind to some shoots question like seeing That's sounds it. Got the just are customers you're maybe any with destocking little conversations bit, little of frequency bit those or helpful? how color what those evolving? of

Yes. be ultimately, improvement get here It's taken and year. there's not to path their whenever uncommon coming been the half the peaks with agile that's continue We'd down. strategic to we And more that into requires to uncertainty an meeting relative it in take demand. that inventories They play to of fiscal back in out an months demand. to valleys expect us as relative our

that they're demand. our to have regular they visibility in demand it's that that And We're much and and is inventory customers what changing, in of and order patterns terms their levels of it's possible, but as with consumer learning conversation to evolving. what need meet means type

So, we'll be them. flexible with

While that gets worked out.

pipeline have as be of continues we'll a be their feel robust. the position those to plants from of that But as discussions, possible. in though, to very our given the really that growth very, proximity Nonetheless, meet perspective we very as needs to part good of expeditiously locations their good, a we opportunity

point and America additional some in robust of advancements his North to be our seeing reusable that mention the and and creation they're being in with success carryout programs in to of of the Europe well. demand by in commentary certainly Mark very continues of the as polypropylene serve the some incredibly we're of meet execution around to cup for with that on with inside those quick relative investment in foodservice heard lid. growing cups marketed You that largest programs, are participating world, all the ultimately And our QSRs is those focus

continue to customers targeted work in through to of we as growth So, in this our investments pipeline, choppiness lot lots a compelling lock support the going to on reasons our demand. for us

Okay, helpful. you. Thank

Thank Bank. you. our it Deutsche with come for moment And the from will One Kyle line of White question. next

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mix the Materials. Hi, portfolio Obviously, for taking good your How are question. morning. improving you here? of the Thanks assets thinking Engineered you're about in

the the the opportunity is newly you portfolio? have to established be for You any allocation done? there more capital where optimization And pruning most community, see within do

Yes. diverse globe. portfolio a We're businesses around of the

for key our area and certain be calls, a previous that opportunities capital to priority, Board and assets on redeploy other shared of our for center needs. proceeds relative by can allocation to concentration and continues or it's dispose our Board. support we front teams towards of those That growth the to As opportunities then our

as financial improve, I'd that. to in disposed of some We begin businesses we of are markets three fiscal to and XXXX. be expect that seeing

and continue Again, to allow create our then proceeds, area it's an against us to think focus will value. concentration be in ultimately them an based on to allocation dispositions types those for wheel shareholder redeploy all us. greater going take I of velocity maximize what's that those capital opportunity of for going to these

we many we Got quarters it. And then but returns? top should actions of impacting on these are in there? the line, shedding improve lower you to the improving Engineered expect where as see How purposeful Materials, obviously the more mix at business margin

job business mix One, of inside the you'll capital out, the that. two supported throughout to enhancing year further as support EM. networks different of of no this towards we start they'll which think well and the an fantastic half business the I the in things. the more a has improve, industrial And their done of as Same a back plays year. thing in period improvement the nicer and similarly year same inflation the see to by half did opportunity the that hyperinflationary mix from a then was benefit as of investments curates inflationary Yes, consumer market front see as already price, offsetting with that business, it the

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is line Your open.

taking question. Congratulations Great. Tom. my Thanks on the for retirement announcement,

of So, I guess a questions. just I ask wanted couple to,

X% X% targets, growth. XX% the some long-term and provided to the you So, X% EBITDA EPS to growth

a if leverage. to low inflation achieve that it's little we to environment been some see been need [ph] the years, couple and [calling the last single-digit on. and wondering and kind so of of level, Just bit of there's business] I challenging do operating know a in of growth organic

those flat next the have are would challenging able in, in environment? some stays or long-term hit environment say, maybe XX to of levers still for a little still that kind to environment months of XX of to kind bit targets what be sluggish that growth the you volume you a So, achieve a months, the assuming more

Yes. now with those we're right seeing delivering demand, commitments. I and weaker right, mean that you're unfortunately, on

us obviously, on costs the it So, is doing side, is the we're optimizing materials. what market our more to gives exactly when on material weaker, executing do opportunity on

a good even while certainly certainly a backdrop. there through we weaker so, in that volume, spot we're incremental rather results would in drive And we economic can get we positive think

items the of the Okay. and cash on some on – outlook just flow. free on Thanks then Mark

you expect that you assuming million XXX expect to XXXX, do that in greater XXX I in delivered fiscal evolve little a how your free free cash potential cash in going working capital maybe million mean you bit given and and strategy here – So, M&A pivot potentially flow the XXXX the how to from conversion. help should less forward focus, just that more the growth accelerate would and XXXX, internal

if Just algorithm has Thanks. wondering that well. changed as

and Yes. are of impact Look, a different can Yes, things improve certainly, we're there's capital. same the outside thing changes in that cash it. working ultimately number Obviously, to earnings of trying our always results.

we achieve and goals, looking to to continue we're earnings those. gave target So,

I just one. If ask can more one quick

saying looking for effectively So, here the you are – you're the just X.Xx on. not on leverage, the necessarily strategy now point scale that you for made to from and X.Xx

effectively market by that you some potential but you scale aren't there well? organically. that potentially that consolidation procurement acquisitions, attractive deliver opportunities investing that the many in has I advantages think are Thanks. read growth anymore, as would side as saying can still from there's changed could So, you the on and better

certain The number and for remains we the an still But given understand where fragmented, our done, acquisitions in scale pockets. again, we've still portfolio, presents changed all. not of and have at has opportunity. it's we significant It market

that investments, been we've consistent us with for acquisitions doing. our approach faster-growing geographies, to right the As access faster-growing feel comfortable very organic which markets, growth targeted is what such, bolt-on us that to support again is we get

to capital at presides those that and and said, bullish as these opportunities those it's a shareholder begin of to financing us, for more markets of going we've opportunity And needs it return. proceeds then improve, we're to facilitate because, allocation And own market portfolio, opportunities. of is, a we to externally, very dispositions to use got various again, our like circle. maximize those look number opportunities one the our find support internally And

Thanks.

Michael One Roxland moment line from come of for our next the Truist. Will with question.

line open. Your is

Tom, And what retire and now. Mark Dustin. Thanks Tom congrats reiterate your let's said, on else everybody

your make potential CPNA and to portfolio, less highlighted maybe the consumer in in in in maybe elements analysts, I some the dispositions. your you've of on your some color of to looking industrial response more wanted but CPI, other know order Just those cyclical in service it a around at oriented? elements automotive get of industrial portfolio exposure, of companies number more of more in spoken cyclical little more your that you've maybe to some a would the about they times be focused

Yes.

we it out it add businesses our our going fair – build and I us. up pretty are do the to to a And with as by the in-line when, build more that portfolio, good but that, know the just I divested laid think to you on falls non-discretionary very it's accurate. very sense again, which further characterization helps piece for value premise be be we're stable And makes is you again, customers It that. our specific we not going frankly, of think, strategy. can our

just HHS, weakness Got the there. it. quickly one And on volume

destocking due factors occurred at it the mentioned some more dialing purchases? of was there just, I of cycled related makes that fully think volume where volume was in was really last other other What that saw quarter the destocking? you point quarter, kind this which benefits, their to COVID through. Or consumers the HHS? back to And was you weakness things driving

a dryer that as we the long-term be in space Areas like wrap, but don't expect filtration, well modestly destocked period, phenomenon. was areas to like the house sheet

those franchises as inside we the portfolio, in great these general a HHS improvement I our pivot we As said, see are to expect economy.

Thank you.

will Wells Fargo. our from Thank that And Gabe question. of the with you. Hajde One moment for next line come

Your line is open.

Tom, to echo I Tom. congrats Mark, morning. everyone And good you, else's Dustin

you. Thank

of I person of as the on organization you the for the Tom, obviously and covalence here, the the but you the just to charge, be search being out where company's to kind IPO part company expect maturation, hate next as within in to would and organization? the the in of looks focus process put spot through some

for things bolt-on of you that maybe some priority mean focus you more being talked mean guys the for – something about, know on maybe scale, but But plants was organization wasn't looking any be someone and to give to efficient, I consolidation like say, like, just you. going to Maybe might things mind we're sort have the I more comes operational tell that the a in want is not in that or I look M&A, past done background. what can obviously, us you more the answer focused footprint on, perhaps that. and color not

internal the Well, process end We're the that planning to. we have very for again replacement, Thanks adhere has words. for succession long-term is Berry question. and the candidates consider no, incredibly of a my to which to until the structured fantastic Remember, I year. appreciate kind a fortunate

make stage. also well so, can bottom certain line making the share appropriate. the while. The you along in contracted But now. can company So, most all is, at also for say best, have Stuart we to Spencer with do we spot we'll with that information that's right way, an more is And the really you that amazing if decision. I this look a have [indiscernible] a are informed to But we as take guys we're me as externally

we We X%, articulate a stop the of think When EBITDA the X.Xx, X% on that a about to made, time. you to an exciting we've today, trade it's ratio to catalysts to leverage that results. group, time. growth XX% that long-term versus where our X.Xx our When consider XX% peer we've changes annual exciting TSR compelling This We're we shares dividend. established opportunity. and a our buying with back an growth, because you contrast it's have you is

the next dividends investments targeted level can take peer in around that of XXXX, see our around spot, leadership how as right that position will on So, that the Berry's the in this we've terms paying focused now is organic our great investor versus to group we growth, we're trending and sustainability, with deck slide. in geographic are a addressed with and franchise you We're growth, and since how group that our story great you it been absolutely couple be it's in peer footprint, Gabe. scale, our in-line our our Berry in a

in I'm a is to great the seat proud to be proud the to I'm level. spot next part of this team. take the and the to of what doing take company whoever this team opportunity has is

in So, place. a great we're

much. Thank you very

One of for next [Technical with the Spector moment will question. line from Difficulty] come Josh UBS. our

line open. is Your

Tom. and Hey in guys. my Thanks I for squeezing echo congrats, me

probably is level last forecasting of that help FX in business look is done negative guess, So, the Consensus years, at, under level you I did in much earning understand Consumer you this about us slightly you it's months wanted for business business, XXX I it normal is I through, but about synergies same months, or is when your rolling how business think have I for on over to can I Thank bought And If what million two that first XX that ask today? earnings view? first you. EBITDA. International. that that mean about million XXX in EBITDA, year. XX

it's Yes, Mark.

we I The will be that EBITDA, business. that has it and numbers, consider but that didn't to It divestitures. got to you I is able deliver would mentioned Tom other to thing in the exactly on yes, So, divestitures your follow say were that. think grown its continue

Tom be we've of in care, continue dynamics got that We've of lot some a opportunity. investments cetera. growth China, that areas opportunities. business, to solutions, health India, dispensing pharmaceutical great got devices And also in the we're of mentioned making et the

– doing business. is things. we future about a job, we're So, the of think and the we're can doing great Pete business that opportunistic that right

you. Thank Okay.

call back questions showing this like now turn queue the remarks. any time. further for would over management to I'm I to at in closing the no

time the call. to your interest attention today. Berry. in hearing forward next We your look Thank all you and Thanks, everybody, for appreciate you. from We on seeing you and

Thank today's you all This for call. program. participating concludes in today's

now disconnect. You may