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Mar 28, 2020
Berry Plastics Q2 2020 Earnings Report
Berry Global Group reported strong results in the second quarter of 2020, with net sales up 53 percent and 2 percent organic volume growth.
Key Takeaways
Berry Global Group reported a 53% increase in net sales to $3.0 billion and a 54% increase in operating income to $284 million. Adjusted earnings per share increased by 42% to $1.19. The company reaffirmed its fiscal year 2020 cash flow from operations and free cash flow guidance of $1.4 billion and $800 million, respectively.
Net sales increased by 53% to $3.0 billion.
Operating income increased by 54% to $284 million.
Adjusted net income per diluted share increased by 42% to $1.19.
Company reaffirms fiscal year 2020 cash flow from operations and free cash flow guidance of $1.4 billion and $800 million, respectively.
Revenue by Segment
Forward Guidance
The company expects COVID-19 to negatively impact volumes with a low-single digit decline, but believes that it will still generate growth in EBITDA for the back half of its fiscal year driven by cost synergies and improved cost productivity. Fiscal year 2020 free cash flow is expected to be in excess of $800 million, which includes at least $1.4 billion of cash flow from operations partially offset by capital expenditures of $600 million.
Positive Outlook
- Company has a diversified portfolio with strong, stable end markets.
- Approximately 65 percent of portfolio is advantaged to neutral related to COVID-19.
- Company expects to generate growth in EBITDA for the back half of fiscal year driven by cost synergies and improved cost productivity.
- Fiscal year 2020 free cash flow will be in excess of $800 million.
- Company intends to realize approximately $150 million of annual cost synergies of which an estimated $75 million is expected to be realized in fiscal 2020.
Challenges Ahead
- Certain markets have been impacted by COVID-19 and related restrictions.
- Guidance has assumed COVID-19 related restrictions, such as shelter-in-place orders, continue for the remainder of fiscal year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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