Berry Global Group, Inc.

Good day, and thank you for standing by. Welcome to the second quarter 2023 Berry Global Group Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Dustin Stilwell. Please go ahead.

Thank you, and good morning, everyone. Welcome to Barry's second fiscal quarter 2023 earnings call. Throughout this call, we will refer to the second fiscal quarter as the March 2023 quarter. Before we begin our call, I would like to mention that on our website, we have provided a slide presentation to help guide our discussion this morning. After today's call, a replay will also be available on our website at barryglobal.com under our investor relations section. Joining me from the company, I have Barry's Chief Executive Officer, Tom Salmon, and Chief Financial Officer, Mark Miles. Following Tom and Mark's comments today, we will have a question and answer session. In order to allow everyone the opportunity to participate, we do ask that you limit yourself to one question at a time and then fall back into the queue for any additional questions. As referenced on slide two during this call, we'll be discussing some non-GAAP financial measures. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and investor presentation on our website. Please note that in our commentary today and within our presentation, when we compare our results to the prior year quarter or four year, we have adjusted to present on a constant currency basis and remove the impact of divested businesses to provide the appropriate comparable results. Reconciliations to reported results have been provided in our earnings release and in the appendix of our presentation. And finally, a reminder that certain statements made today may be forward-looking statements. These statements are made based upon management's expectations and beliefs concerning future events impacting the company and therefore involve a number of uncertainties and risks, including but not limited to those described in our earnings release and report on Form 10-K and other filings within the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statement. And now I would like to turn the call over to Barry's CEO, Tom Salmon.

Thank you, Dustin. Welcome, everyone, and thank you for being with us today. Turning to our key takeaways for the quarter on slide four. Our visit delivered solid second quarter and first half results with adjusted earnings per share growth of 4% and 7% respectively. For the past several quarters, we have seen supply chain constraints continue to ease and have prioritized structural cost reductions and improved our mix of high-value growth products. Throughout the last several years, we've made concentrated investments to pivot our portfolio into higher growth markets in several areas, such as food service, health and beauty, dispensing, and pharmaceutical markets, including sustainability-focused, customer-linked projects. Furthermore, we continue our focus on returning capital to shareholders In the first half of this fiscal year, we have repurchased over 5.5 million shares, or 4.4% of our total shares outstanding, and continue to expect share repurchases of $600 million or more in fiscal 2023. As we stated last call, we have continued our commitment to strengthening our balance sheet by further lowering our long-term leverage target to 2.5 to 3.5 times. We expect to be at 3.7 times at the end of fiscal 23 and within our new targeted range by the end of fiscal 24. And finally, we believe 2023 will see challenging overall market demand. In turn, we're making long-lasting structural cost improvements while advancing our strategic initiatives to exit 2023 a much stronger and more focused company. We remain confident in our ability to sustain earnings growth and are reaffirming our earnings and cash flow guidance for the year. Turning now to the financial highlights on slide 5. The March 2023 quarter performance for both earnings per share and EBITDA were ahead of our expectations, including strong price-cost spread from inflation recovery, cost reduction, and mixed improvements. These internally driven actions were partially offset by a 6% volume decline from weaker end market demand, which was in line with what our global customers have reported thus far. Demand in the quarter has been negatively impacted by price inflation on consumer purchases, destocking, and small pockets of continued supply chain issues. From an earnings perspective, for the comparable prior year quarter and half, EBIT was up 1% and 2% respectfully. and EPS increased 4% and 7% respectively. Additionally, we delivered sequential EBIT improvement from Q1 of over $100 million, with three of our four segments generating significant improvement, while EPS grew 50% sequentially. As we've demonstrated historically and during the most recent quarter, we remain committed to driving cost improvements, passing through inflation, and believe we are well-positioned given our scale, along with our ability to service our customers from our facilities in close proximity to their locations, providing both cost and sustainability advantages. During the quarter, we performed well, delivering strong operational performance and took additional actions to reduce our cost structure, optimize our assets, and further automate our facility, which will bring our total annual savings from recent cost initiatives to $115 million, $70 million of which will be realized in fiscal 23. In line with our long-term strategy to provide strong capital returns for our shareholders, we have returned nearly $400 million to shareholders through both share repurchases and dividends in the first half of fiscal 23. Before I hand over to Mark, I want to review slide 6 and what we continue to focus on in both the near and long term. We remain focused on driving consistent, dependable, and sustainable organic growth and continue investing in each of our businesses to build and maintain our world-class, low-cost manufacturing base with an emphasis on key end markets which offer greater potential for differentiation and long-term growth, such as healthcare, personal care, beauty, and food service markets. We've grown these select markets over the past 10 years from 20% to now more than 30% of our portfolio. Additionally, we will continue to invest and expand our emerging market position in support of our commitment to global growth. Longer term, we are committed to growing our businesses in these regions and believe our emerging market presence can be 25% or more of our total company revenues. And lastly, Innovation and sustainability are increasingly embedded in everything we do, and we continue to believe this represents a great opportunity for growth and differentiation. We continue to grow the number of sustainability-focused products, meeting our customers' needs and expectations. We have grown our total sustainable polymer purchases by nearly 70% over the past several years, with the expected growth rate of 20% to get us to 30% circular materials by 2030. These drivers, when combined with our ability to deliver continual cost improvements by leveraging our scale advantages and capability, gives us great confidence we will continue to consistently deliver solid earnings growth from our stable portfolio of businesses. Now I'll turn the call over to Mark. We'll review Barry's financial results. Mark?