Berry Global Group, Inc. (NYSE:BERY) Q4 2022 Earnings Call Transcript

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Anthony Pettinari: Hi. Good morning. Tom or Mark just following up on Ghansham’s question. The free cash flow guidance for 2023 does that assume that the — I think the $150 million inventory headwind that you referenced earlier reverses, or do you get that back next year? And then just in terms of the guidance for 2023, are there any underlying volume assumptions for the company? And then directionally as we think about the four segments, any segments where you would expect volumes might be stronger or weaker in 2023?

Tom Salmon : I’ll start with the overall. No doubt about it we — when you think about 2022, it’s a very dynamic and challenging year and frankly quite proud of the team on a two-year basis delivering 2% volume growth given that 2021 was a very, very strong year for us. We see that similar dynamic and economic backdrop as we enter our fiscal 2023 as well. There continues to be inflationary pressures. There’s pockets of supply chain challenges that are out there. And frankly, our end customers are pointing to a near-term outlook that is a little softer customer demand. Nonetheless, we believe that the capital investments that we’re making, better position us versus the market and position us well for the long-term for low single-digit growth. And clearly as it relates to demand in that outlook, any deviation we see in terms of demand across the fiscal year, we’ll address with cost and productivity initiatives.

Mark Miles: Yes. On working capital Anthony, we typically assume zero impact. Obviously, the year is just getting started here. So we’ll see as the year progresses. As we start the year, polymer’s a tailwind in the US, which is our largest cost category. But obviously, with the situation with energy in Europe, we have a long road here ahead of us for the year. So we’ll see how the year plays out but we’ve assumed zero in total for working capital in 2023, which is consistent with how we’ve done it in the past.

Anthony Pettinari: Okay. That’s helpful. And then just the return of capital announcements, are really welcome. In terms of the dividend and your approach there, can you talk about the approach to the dividend and maybe possible dividend growth in the future? Are you targeting a certain payout or certain yields, or is there sort of a benchmark or peer set that you’re looking at? Just any thoughts there.

Tom Salmon: Well, first and foremost we’re thrilled to make this historic announcement today. The first dividend in our 10 years as a publicly traded company really driven by the confidence that we have in our operating model and the resiliency of the portfolio and its ability to consistently deliver strong operating income and cash flow from operations, and that’s given us the confidence coupled with feedback from our investors, which there’s been a percentage of our customers that have been interested in the initiation of a dividend. It similarly gives us access to a new shareholder base as well that ultimately may look at that as a precursor for investment that we’ve otherwise not been able to take advantage for. And given that we believe our stock is, tremendously undervalued right now that coupled with the share repurchase authorization, we think it’s a great combination for both existing and new shareholders for our company.

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