Berry Announces Third Quarter 2023 Results
- Berry Global reports strong financial performance with net sales of $3.2 billion and operating income of $267 million. The company's commitment to returning capital to shareholders through share repurchases and dividends demonstrates financial strength and confidence in future performance.
- Despite a 7% volume decline, Berry Global managed to achieve a 3% growth in adjusted earnings per share, showcasing operational efficiency and cost-saving initiatives.
- The company's fiscal 2023 guidance for adjusted EPS of $7.30 and the plan to return at least $700 million of capital to shareholders through share repurchases and dividends indicates a positive outlook for future financial performance.
- None.
Third Quarter Highlights
-
GAAP: Net sales of
; Operating income of$3.2 billion ; Earnings per share of$267 million $1.18 -
Non-GAAP: Operating EBITDA of
; Adjusted earnings per share of$522 million $1.90 -
Returned
to shareholders in the quarter ($115 million via share repurchases and$83 million in dividends)$32 million - Fiscal 2023 outlook: Guidance within our previous announced ranges for adjusted EPS and free cash flow
Key Financials (1)
|
June Quarter |
June YTD |
||||||||
GAAP results |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||
Net sales |
|
$ |
3,229 |
$ |
3,726 |
$ |
9,577 |
$ |
11,074 |
|
Operating income |
|
|
267 |
|
336 |
|
778 |
|
906 |
|
EPS (diluted) |
|
|
1.18 |
|
1.58 |
|
3.47 |
|
3.93 |
June Quarter |
Reported |
Comparable |
June YTD |
Reported |
Comparable |
|||||||
Adjusted non-GAAP results |
|
2023 |
|
2022 |
Δ% |
Δ% |
|
2023 |
|
2022 |
Δ% |
Δ% |
Net sales |
$ |
3,229 |
$ |
3,726 |
( |
( |
$ |
9,577 |
$ |
11,074 |
( |
( |
Operating EBITDA |
|
522 |
|
550 |
( |
( |
|
1,506 |
|
1,562 |
( |
( |
Adjusted EPS (diluted) |
|
1.90 |
|
2.03 |
( |
( |
|
5.23 |
|
5.21 |
-% |
|
(1) |
Adjusted non-GAAP results exclude items not considered to be ongoing operations. In addition, comparable change % excludes the impacts of foreign currency, acquisitions, and recent divestitures. Further details related to non-GAAP measures and reconciliations can be found under our “Non-GAAP Financial Measures and Estimates” section or in reconciliation tables in this release. In millions of USD, except per share data |
Financial Results – Third Quarter 2023
Consolidated Overview
The net sales decline is primarily attributed to decreased selling prices of
The operating income decrease is primarily attributed to a
Consumer Packaging - International
The net sales decline is primarily attributed to a
The operating income decrease is primarily attributed to a
Consumer Packaging -
The net sales decline is primarily attributed to decreased selling prices of
The operating income decrease is primarily attributed to a
Health, Hygiene, & Specialties
The net sales decline is primarily attributed to decreased selling prices of
The operating income decrease is primarily attributed to a
Engineered Materials
The net sales decline is primarily attributed to an
The operating income decrease is primarily attributed to a
Cash Returns to Shareholders
Berry generates significant cash flow and is committed to returning capital to shareholders. This annual cash flow provides substantial capacity to simultaneously reinvest in the business for organic growth, pursue bolt-on acquisitions, pay down debt and return cash to shareholders through a compelling dividend as well as regular share repurchases. The Company expects to return over
Dividend and Share Repurchases
As previously announced, Berry’s Board of Directors declared a quarterly cash dividend of
Fiscal Year 2023 Guidance
(based on information available as of August 9, 2023)
-
Adjusted earnings per share of
$7.30 -
Cash flow from operations of
; free cash flow of$1.45 million $800 million -
Anticipate returning at least
of capital to shareholders through share repurchases and dividends$700 million
Investor Conference Call
The Company will host a conference call today, August 9, 2023, at 10 a.m.
By Telephone
Participants may register for the call here now or any time up to and during the time of the call, and will immediately receive the dial-in number and a unique pin to access the call. While you may register at any time up to and during the time of the call, you are encouraged to join the call 10 minutes prior to the start of the event.
Via the Internet
The conference call and accompanying webcast slides will also be broadcast live over the internet. To access the event, click on the following link: https://ir.berryglobal.com/financials. A replay of the webcast will be available via the same link on our website approximately two hours after the completion of the call.
About Berry
At Berry Global Group, Inc. (NYSE:BERY), we create packaging and engineered products that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry leading talent of 46,000 global employees across more than 250 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. For more information, visit our website, or connect with us on LinkedIn or Twitter.
Non-GAAP Financial Measures and Estimates
This press release includes non-GAAP financial measures such as operating EBITDA, Adjusted EBITDA, Adjusted net income, Adjusted earnings per share, free cash flow, and comparable basis net sales, adjusted EPS and operating EBITDA. A reconciliation of these non-GAAP financial measures to comparable measures determined in accordance with accounting principles generally accepted in
Forward Looking Statements
Statements in this release 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 Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “outlook,” “anticipates” or “looking forward,” or similar expressions that relate to our strategy, plans, intentions, or expectations. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.
Our actual results may differ materially from those that we expected due to a variety of factors, including without limitation: (1) risks associated with our substantial indebtedness and debt service; (2) changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices to our customers on a timely basis; (3) risks related to acquisitions or divestitures and integration of acquired businesses and their operations, and realization of anticipated cost savings and synergies; (4) risks related to international business, including transactional and translational foreign currency exchange rate risk and the risks of compliance with applicable export controls, sanctions, anti-corruption laws and regulations; (5) increases in the cost of compliance with laws and regulations, including environmental, safety, and climate change laws and regulations; (6) labor issues, including the potential labor shortages, shutdowns or strikes, or the failure to renew effective bargaining agreements; (7) risks related to disruptions in the overall global economy, persistent inflation, supply chain disruptions, and the financial markets that may adversely impact our business, including as a result of the
Berry Global Group, Inc. Consolidated Statements of Income (Unaudited) |
|||||||||||||||
|
Quarterly Period Ended |
|
Three Quarterly Periods Ended |
||||||||||||
|
July 1, 2023 |
|
July 2, 2022 |
|
July 1, 2023 |
|
July 2, 2022 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
3,229 |
|
$ |
3,726 |
|
$ |
9,577 |
|
$ |
11,074 |
||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
2,649 |
|
|
|
3,105 |
|
|
|
7,873 |
|
|
|
9,297 |
|
Selling, general and administrative |
|
215 |
|
|
|
215 |
|
|
|
671 |
|
|
|
657 |
|
Amortization of intangibles |
|
61 |
|
|
|
63 |
|
|
|
181 |
|
|
|
196 |
|
Restructuring and transaction activities |
|
37 |
|
|
|
7 |
|
|
|
74 |
|
|
|
18 |
|
Operating income |
|
267 |
|
|
|
336 |
|
|
|
778 |
|
|
|
906 |
|
Other expense |
|
11 |
|
|
|
7 |
|
|
|
13 |
|
|
|
13 |
|
Interest expense, net |
|
78 |
|
|
|
70 |
|
|
|
228 |
|
|
|
212 |
|
Income before income taxes |
|
178 |
|
|
|
259 |
|
|
|
537 |
|
|
|
681 |
|
Income tax expense |
|
35 |
|
|
|
52 |
|
|
|
114 |
|
|
|
148 |
|
Net income |
$ |
143 |
|
|
$ |
207 |
|
|
$ |
423 |
|
|
$ |
533 |
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share |
$ |
1.20 |
|
|
$ |
1.61 |
|
|
$ |
3.50 |
|
|
$ |
4.02 |
|
Diluted net income per share |
|
1.18 |
|
|
|
1.58 |
|
|
|
3.47 |
|
|
|
3.93 |
|
|
|
|
|
|
|
|
|
||||||||
Outstanding weighted average shares (in millions) |
|
|
|
|
|
|
|
||||||||
Basic |
|
118.7 |
|
|
|
128.6 |
|
|
|
121.0 |
|
|
|
132.6 |
|
Diluted |
|
121.1 |
|
|
|
130.7 |
|
|
|
121.9 |
|
|
|
135.6 |
|
Condensed Consolidated Balance Sheets (Unaudited) |
||||||
(in millions of USD) |
July 1, 2023 |
October 1, 2022 |
||||
Cash and cash equivalents |
$ |
633 |
$ |
1,410 |
||
Accounts receivable |
|
1,748 |
|
|
1,777 |
|
Inventories |
|
1,730 |
|
|
1,802 |
|
Other current assets |
|
229 |
|
|
175 |
|
Property, plant, and equipment |
|
4,651 |
|
|
4,342 |
|
Goodwill, intangible assets, and other long-term assets |
|
7,558 |
|
|
7,450 |
|
Total assets |
$ |
16,549 |
|
$ |
16,956 |
|
Current liabilities, excluding current debt |
|
2,313 |
|
|
2,831 |
|
Current and long-term debt |
|
9,212 |
|
|
9,255 |
|
Other long-term liabilities |
|
1,637 |
|
|
1,674 |
|
Stockholders’ equity |
|
3,387 |
|
|
3,196 |
|
Total liabilities and stockholders' equity |
$ |
16,549 |
|
$ |
16,956 |
|
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||
|
|
|||||
(in millions of USD) |
July 1, 2023 |
July 2, 2022 |
||||
Cash flows from operating activities: |
|
|
||||
Net income |
$ |
423 |
|
$ |
533 |
|
Depreciation |
|
425 |
|
|
424 |
|
Amortization of intangibles |
|
181 |
|
|
196 |
|
Non-cash interest, net |
|
(45 |
) |
|
11 |
|
Settlement of derivatives |
|
36 |
|
|
69 |
|
Deferred income tax |
|
(94 |
) |
|
(66 |
) |
Share-based compensation expense |
|
36 |
|
|
34 |
|
Other non-cash operating activities, net |
|
18 |
|
|
(2 |
) |
Changes in working capital |
|
(490 |
) |
|
(854 |
) |
Net cash from operating activities |
|
490 |
|
|
345 |
|
|
|
|
||||
Cash flows from investing activities: |
|
|
||||
Additions to property, plant, and equipment, net |
|
(560 |
) |
|
(556 |
) |
Divestiture (acquisition) of businesses and other |
|
(88 |
) |
|
131 |
|
Net cash from investing activities |
|
(648 |
) |
|
(425 |
) |
|
|
|
||||
Cash flows from financing activities: |
|
|
||||
Repayments on long-term borrowings |
|
(687 |
) |
|
(16 |
) |
Proceeds from long-term borrowings |
|
500 |
|
|
170 |
|
Repurchase of common stock |
|
(415 |
) |
|
(637 |
) |
Proceeds from issuance of common stock |
|
26 |
|
|
24 |
|
Dividends paid |
|
(97 |
) |
|
- |
|
Other, net |
|
6 |
|
|
- |
|
Net cash from financing activities |
|
(666 |
) |
|
(459 |
) |
Effect of currency translation on cash |
|
47 |
|
|
(25 |
) |
Net change in cash and cash equivalents |
|
(777 |
) |
|
(564 |
) |
Cash and cash equivalents at beginning of period |
|
1,410 |
|
|
1,091 |
|
Cash and cash equivalents at end of period |
$ |
633 |
|
$ |
527 |
|
|
|
|
||||
|
|
|
||||
Non- |
|
|
||||
Cash flow from operating activities |
$ |
490 |
|
$ |
345 |
|
Additions to property, plant, and equipment (net) |
|
(560 |
) |
|
(556 |
) |
Non- |
$ |
(70 |
) |
$ |
(211 |
) |
Segment and Supplemental Comparable Basis Information (Unaudited) |
|||||||||||||||||||
|
Quarterly Period Ended July 1, 2023 |
||||||||||||||||||
(in millions of USD) |
Consumer Packaging - International |
|
Consumer Packaging- North America |
|
Health, Hygiene & Specialties |
|
Engineered Materials |
|
Total |
||||||||||
Net sales |
$ |
1,036 |
|
$ |
798 |
|
$ |
657 |
|
$ |
738 |
|
$ |
3,229 |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income |
$ |
68 |
|
|
$ |
89 |
|
|
$ |
22 |
|
|
$ |
88 |
|
|
$ |
267 |
|
Depreciation and amortization |
|
79 |
|
|
|
54 |
|
|
|
45 |
|
|
|
29 |
|
|
|
207 |
|
Restructuring and transaction activities |
|
17 |
|
|
|
6 |
|
|
|
12 |
|
|
|
2 |
|
|
|
37 |
|
Other non-cash charges |
|
6 |
|
|
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
11 |
|
Operating EBITDA |
$ |
170 |
|
|
$ |
151 |
|
|
$ |
81 |
|
|
$ |
120 |
|
|
$ |
522 |
|
|
Quarterly Period Ended July 2, 2022 |
||||||||||||||||||
Reported net sales |
$ |
1,096 |
|
|
$ |
927 |
|
$ |
788 |
|
|
$ |
915 |
|
|
$ |
3,726 |
|
|
Foreign currency and divestitures |
|
(20 |
) |
|
|
13 |
|
|
|
7 |
|
|
|
1 |
|
|
|
1 |
|
Comparable net sales (1) |
$ |
1,076 |
|
|
$ |
940 |
|
|
$ |
795 |
|
|
$ |
916 |
|
|
$ |
3,727 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income |
$ |
82 |
|
|
$ |
104 |
|
|
$ |
56 |
|
|
$ |
94 |
|
|
$ |
336 |
|
Depreciation and amortization |
|
78 |
|
|
|
53 |
|
|
|
44 |
|
|
|
28 |
|
|
|
203 |
|
Restructuring and transaction activities |
|
3 |
|
|
|
1 |
|
|
|
3 |
|
|
|
— |
|
|
|
7 |
|
Other non-cash charges |
|
— |
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
4 |
|
Foreign currency and divestitures |
|
(2 |
) |
|
|
5 |
|
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(21 |
) |
Comparable operating EBITDA (1) |
$ |
161 |
|
|
$ |
164 |
|
|
$ |
105 |
|
|
$ |
123 |
|
|
$ |
553 |
|
(1) |
The prior year comparable basis change excludes the impacts of foreign currency, acquisitions, and divestitures. Further details related to non-GAAP measures and reconciliations can be found under our “Non-GAAP Financial Measures and Estimates” section or in reconciliation tables in this release. |
Reconciliation of Non-GAAP Measures |
|||||||||||||||
Reconciliation of adjusted earnings before interest, tax, depreciation and amortization (EBITDA), Net income, and earnings per share (EPS) (in millions of USD, except per share data amounts) |
|||||||||||||||
|
Quarterly Period Ended |
Three Quarterly Periods Ended |
|||||||||||||
|
July 1, 2023 |
|
July 2, 2022 |
|
July 1, 2023 |
|
July 2, 2022 |
||||||||
Net income |
$ |
143 |
|
$ |
207 |
|
$ |
423 |
|
$ |
533 |
||||
Add: other expense |
|
11 |
|
|
|
7 |
|
|
|
13 |
|
|
|
13 |
|
Add: interest expense |
|
78 |
|
|
|
70 |
|
|
|
228 |
|
|
|
212 |
|
Add: income tax expense |
|
35 |
|
|
|
52 |
|
|
|
114 |
|
|
|
148 |
|
Operating income |
$ |
267 |
|
|
$ |
336 |
|
|
$ |
778 |
|
|
$ |
906 |
|
|
|
|
|
|
|
|
|
||||||||
Add: restructuring and transaction activities |
|
37 |
|
|
|
7 |
|
|
|
74 |
|
|
|
18 |
|
Add: other non-cash charges |
|
11 |
|
|
|
4 |
|
|
|
48 |
|
|
|
18 |
|
Adjusted operating income (2) |
$ |
315 |
|
|
$ |
347 |
|
|
$ |
900 |
|
|
$ |
942 |
|
|
|
|
|
|
|
|
|
||||||||
Add: depreciation |
|
146 |
|
|
|
140 |
|
|
|
425 |
|
|
|
424 |
|
Add: amortization of intangibles |
|
61 |
|
|
|
63 |
|
|
|
181 |
|
|
|
196 |
|
Operating EBITDA (2) |
$ |
522 |
|
|
$ |
550 |
|
|
$ |
1,506 |
|
|
$ |
1,562 |
|
Net income per diluted share |
$ |
1.18 |
|
|
$ |
1.58 |
|
|
$ |
3.47 |
|
|
$ |
3.93 |
|
Other expense, net |
|
0.09 |
|
|
|
0.05 |
|
|
|
0.11 |
|
|
|
0.10 |
|
Restructuring and transaction activities |
|
0.31 |
|
|
|
0.06 |
|
|
|
0.61 |
|
|
|
0.13 |
|
Amortization of intangibles from acquisitions (1) |
|
0.50 |
|
|
|
0.48 |
|
|
|
1.48 |
|
|
|
1.45 |
|
Income tax impact on items above |
|
(0.18 |
) |
|
|
(0.14 |
) |
|
|
(0.44 |
) |
|
|
(0.40 |
) |
Foreign currency, acquisitions, and divestitures |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
(0.12 |
) |
Adjusted net income per diluted share (2) |
$ |
1.90 |
|
|
$ |
2.04 |
|
|
$ |
5.23 |
|
|
$ |
5.09 |
|
|
Estimated Fiscal 2023 |
|
||
Cash flow from operating activities |
$ |
1,450 |
|
|
Net additions to property, plant, and equipment |
|
(650 |
) |
|
Free cash flow (2) |
$ |
800 |
|
|
(1) |
Amortization of intangibles from acquisition are added back to better align our calculation of adjusted EPS with peers. |
(2) |
Supplemental financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in
We define “free cash flow” as cash flow from operating activities, less net additions to property, plant, and equipment. We believe free cash flow is useful to an investor in evaluating our liquidity because free cash flow and similar measures are widely used by investors, securities analysts, and other interested parties in our industry to measure a company’s liquidity. We also believe free cash flow is useful to an investor in evaluating our liquidity as it can assist in assessing a company’s ability to fund its growth through its generation of cash.
Adjusted EBITDA is used by our lenders for debt covenant compliance purposes. We also use Adjusted EBITDA, Operating EBITDA, and comparable basis measures, among other measures, to evaluate management performance and in determining performance-based compensation. Operating EBITDA is a measure widely used by investors, securities analysts, and other interested parties in our industry to measure a company’s performance. We also believe EBITDA and Adjusted net income are useful to an investor in evaluating our performance without regard to revenue and expense recognition, which can vary depending upon accounting methods. |
(BERY-F)
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809102435/en/
Company Contact Information
Dustin Stilwell
VP, Investor Relations
+1 (812) 306 2964
ir@berryglobal.com
Source: Berry Global Group, Inc.
FAQ
What are Berry Global's third quarter net sales and operating income?
What is Berry Global's fiscal 2023 guidance for adjusted EPS?
How much capital does Berry Global anticipate returning to shareholders?