Berry Global Group Reports Strong Second Quarter 2020 Results; Net Sales up 53 percent; 2 Percent Organic Volume Growth.

ENPNewswire-May 4, 2020--Berry Global Group Reports Strong Second Quarter 2020 Results; Net Sales up 53 percent; 2 Percent Organic Volume Growth

(C)2020 ENPublishing -

Release date- 01052020 - EVANSVILLE, Ind.- Berry Global Group, Inc. (NYSE:BERY) today reported its second quarter 2020 results, referred to in the following as the March 2020 quarter.

Second Quarter Highlights

(all comparisons made to the March 2019 quarter)

Net sales up 53 percent to $3.0 billion

Operating income up 54 percent to $284 million

Operating EBITDA up 52 percent to $539 million

Net income per diluted share increase of 71 percent to $0.94

Adjusted net income per diluted share increase of 42 percent to $1.19

RPC Group Plc ('RPC') integration progressing on plan; synergy target remains on track

Reaffirmed fiscal year 2020 cash flow from operations and free cash flow guidance of $1.4 billion and $800 million, respectively

Berry's Chairman and CEO, Tom Salmon said, 'While there are unprecedented uncertainties impacting the global economy right now, we are fortunate to have an extremely diverse portfolio of products, both geographically and by end market, which will further demonstrate our proven track record of stability as we progress through the back half of fiscal 2020. The long-term fundamentals of the business have strengthened and we remain focused on our top three financial objectives of improving our strong balance sheet, organically growing our businesses, and integrating the RPC acquisition as demonstrated in this recently completed quarter.

'I am happy to report we generated March quarterly records for net sales and operating EBITDA, both increasing over 50 percent to $3 billion and $539 million, respectively. Our adjusted earnings per share increased 42 percent to $1.19, and we reported a significant improvement in quarterly free cash flow, bringing our four quarters ended free cash flow to $886 million.

'For the March 2020 quarter, overall volumes were up 2 percent in the aggregate. We estimate the net volume benefit from corona-driven activity in the quarter was 1 percent. Specific detail by segment includes our Health, Hygiene & Specialties segment, which recorded stronger than expected volume growth of 3 percent. We anticipated volume growth inflection within this business in the June quarter and we are very proud of accomplishing this goal a quarter ahead of plan. Our Engineered Materials team delivered volume growth in the quarter of 2 percent, which was in line with our commitment. Our Consumer Packaging North American business had flat volume for the quarter with strength in healthcare, household cleaning and grocery offset by softness in food service and industrial markets. We remain encouraged by the momentum of the division with a continued growing revenue pipeline. And lastly, our Consumer Packaging International business reported improved volumes sequentially, and we continue to efficiently integrate the business with an intense focus on developing our growth pipeline and realizing the cost synergies in our initial forecast of $150 million.

'Our financial profile remains solid as we have a strong liquidity position with over $950 million of cash at the end of the quarter as well as an undrawn $850 million asset-based line of credit representing $1.8 billion of liquidity. Also, we have no financial maintenance covenants or near-term debt maturities.'

March 2020 Quarter Results

Consolidated Overview

Overall net sales in the quarter were $2,975 million a 53 percent increase compared to the prior year quarter. The net sales growth is primarily attributed to acquisition net sales of $1,174 and a base volume increase of 2 percent. These increases were partially offset by lower selling prices of $148 million due to the pass through of lower resin costs and prior quarter divestiture sales of $24 million.

The operating income increase is primarily attributed to acquisition operating income of $81 million, an $11 million decrease in business integration costs, a $9 million decrease in selling, general and administrative expenses primarily related to timing of issuing annual option awards to employees and an $8 million decrease in depreciation and amortization. These improvements were partially offset by a $9 million negative impact from price cost spread and prior quarter divestiture operating income of $7 million.

Consumer Packaging - International

Consumer Packaging - International delivered net sales of nearly $1.1 billion in the March 2020 quarter. The net sales and operating income growth in the Consumer Packaging International segment is attributed to the RPC acquisition.

Consumer Packaging - North America

Consumer Packaging - North America delivered net sales of $706 million, a 10 percent increase compared to the March 2019 quarter. The net sales growth in...

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