Berry Global Group (BERY) Q3 2024 earnings summary

Executive summary

• Achieved 2% organic volume growth in Q3 2024, with net sales of $3.16–$3.2 billion, down 2% year-over-year due to lower selling prices from reduced polymer costs, but offset by volume gains.

• Adjusted EPS grew 16% to $2.18 and operating EBITDA rose 6% to $546 million, with operating income up 13% to $303 million year-over-year.

• All four operating segments delivered organic volume growth, with margin improvement driven by cost reductions and product mix.

• Portfolio optimization advanced with the planned spin/merger of the Health, Hygiene & Specialties (HHNF) business with Glatfelter, progressing regulatory milestones.

• Confirmed fiscal 2024 guidance for adjusted EPS and free cash flow, with leverage expected at or below 3.5x.

Financial highlights

• Q3 adjusted EPS was $2.18, up 16% year-over-year; operating EBITDA reached $546 million, up 6%; GAAP EPS was $1.65, up 40%.

• Net income for Q3 was $193 million, up from $143 million in the prior year.

• Free cash flow for the quarter was $(176) million, reflecting seasonal outflows; fiscal year guidance for free cash flow is $800–$900 million.

• Cash and cash equivalents at quarter-end were $509 million, with no outstanding balance on the $1 billion revolving credit facility.

• Operating EBITDA margin improved by 110 basis points to 17.3%.

Outlook and guidance

• Fiscal 2024 adjusted EPS guidance reaffirmed at $7.60, with operating EBITDA expected at $2.06 billion.

• Free cash flow guidance for fiscal 2024 is $800–$900 million; cash flow from operations projected at $1.4–$1.5 billion.

• Leverage targeted at or below 3.5x by year-end, within a long-term range of 2.5x–3.5x.

• Anticipates continued low single-digit organic volume growth in Q4.

• Long-term objectives: 4%-6% EBITDA growth, 7%-12% adjusted EPS growth, and 10%-15% total shareholder return.