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Fortune 500

Industries included in the sector are building materials, forest products, metals, and packaging.

Fortune Sector Leaders: Materials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500 2021-Berry Global Group

The packaging company creates a wide range of plastic containers and packaging for use in the health, engineering, and consumer goods industries.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-358-Berry-Global-Group

The company manufactures and markets plastic packaging products that focus on three business segments: health, hygiene and specialties; consumer packaging; and engineered materials.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Berry Global Group, formerly Berry Plastics Group, is a manufacturer and supplier of plastic products in consumer and industrial end markets. Berry Global Group operates as a subsidiary of Amcor, a global packaging company headquartered in Switzerland.

Q3 2024

Berry Global Group (BERY): Company Profile, Stock Price, News, Rankings

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Berry Global Group

berry global group

Good day, everyone, and thank you for standing by. Welcome to the Q3 2020 4 Veri Global Group Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

Please be advised that today's conference is being recorded. I will hand the call over to Dustin Stillwell with Berry Group. Please go ahead.

Thank you, operator, and thank you to everyone for joining Berry's 3rd fiscal quarter 2024 earnings call. Joining me this morning, I have Berry's Chief Executive Officer, Kevin Kowinski and Berry's Chief Financial Officer, Mark Miles. Following our prepared remarks 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 with a brief follow-up and then fall back into the queue for any additional questions. A few things to note before handing the call over.

On our website at barryglobal.com, you can find today's press release and earnings call presentation under our Investor Relations section. As referenced on Slide 23, during this call, we will be discussing certain non GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measures in our earnings press release and presentation, which were made public earlier this morning. Additionally, we will make forward looking statements that are subject to risks and uncertainties. Actual results or outcomes may differ materially from those that may be expressed or implied in our forward looking statements.

Some factors that could cause the results or outcomes to differ are in the company's latest 10 ks, other SEC filings and our news release. I will now turn the call over to Berry's CEO, Kevin Kowlinski.

Thank you, Dustin, and thank you to everyone for joining us today to discuss Berry's 3rd quarter results for fiscal 2024. Our team delivered 2% organic volume growth and strong financial performance during the quarter. Our results were consistent with our expectations, and we made substantial progress toward our long term strategic objectives and delivering on our multiyear cost improvement initiatives.

We delivered 3rd quarter adjusted EPS and operating EBITDA growth of 16% and 6%, respectively, over the prior year quarter, with volume growth and strong operational performance driving our results as our team remains focused on managing the items that are within our control. Our proactive measures around repositioning our portfolio to higher growth markets and reducing our cost structure have allowed us to outperform in a weaker than normal macro demand environment. We continue to be confident in our outlook, bolstered by our steady sequential improvement and the fact that our customers are communicating their focus on driving growth over price, including increased promotional activity. As a result, we are confirming our fiscal 2024 guidance within our previously announced ranges for adjusted EPS and free cash and expect our 4th fiscal quarter to deliver low single digit volume growth, aligned with our long term targets. As part of our ongoing commitment to maintaining a strong and stable balance sheet, we remain committed to achieving a year end leverage of 3.5x or lower by the end of fiscal 'twenty four.

Including our September quarter expected cash flow generation of $1,000,000,000 and anticipated portfolio optimization proceeds, we expect to deliver over $3,000,000,000 of cash over the next 4 quarters. Specifically, we believe cash proceeds could exceed $2,000,000,000 from strategic divestitures alone within the next year. This includes approximately $1,000,000,000 from the already announced proposed spin off merger and another $1,000,000,000 from future portfolio optimization opportunities within fiscal 2025. With respect to portfolio optimization, we continue to make progress. Not only will these divestitures accelerate deleveraging, they will push us toward our goal of increasing our consumer products focus from over 70% to over 80% of volume.

The Berry HHNF and Glatfelter transaction is still expected to close before the end of the calendar year and is subject to approval by Glatfelter shareholders and completion of customary closing conditions. Our teams continue to work on integration activities, and we remain optimistic about substantial upside potential in our base synergy case. We made great progress during the quarter on furthering our continuous improvement focused culture. We stood up our 1st lean transformation site at our healthcare focused facility in Franklin, Indiana. I had the opportunity to visit Franklin again a few days ago, and I'm very excited and encouraged by the level of engagement by our associates and leadership there.

The focus in this facility has shifted from how do we win the month to how do we win the hour, and this shift brings in a whole new level of urgency for results. We have begun hosting visits from other business units to see what is being built in Franklin so that they can begin replicating our business operating model in other areas of the company. We have also begun to recruit additional lean leaders to support and scale a faster implementation path across the business. We are also seeing substantial improvements in how we deliver quality and service to our customers. Our capability to identify root causes and quickly apply corrective actions has increased and accelerated.

The result is improved product and service differentiation that is allowing us the opportunity for faster organic growth. Faster organic growth is also being enabled by our efforts to improve the capability of our commercial excellence process. During the quarter, we began the 2nd phase of our pilot in Consumer Products North America, where we are building a world class conversion engine to produce the right innovation, deliver that innovation to the best target pipeline and convert that pipeline at world class rates of conversion. As with lean, this pilot is serving as a center of excellence from which we will replicate the new processes across the other Berry business units. Now I will turn the call over to Mark, who will review Berry's financial results.

Thank you, Kevin. Turning now to our financial results highlights on Slide 8. As Kevin pointed out, our quarterly results for both revenue and earnings aligned with our expectations. Our global teams have persistently worked towards optimizing our manufacturing footprint, enhancing our customer experience and improved product mix across our businesses.

We've made considerable strides in consolidating our higher cost assets and as volumes continue to recover, we anticipate an incremental earnings benefit for more efficient assets. These strategic actions and our focused approach are effectively countering the challenges posed by softer global market demand due to inflation. For the quarter, adjusted earnings per share saw a 16% increase amounting to $2.18 per share. Operating EBITDA also increased to $546,000,000 a 6% increase compared to the previous year. In line with our expectations, volumes increased delivering 2% year over year growth with all 4 operating segments delivering organic volume growth.

I would like to refer everyone to Slide 9 for our quarterly performance by each of our 4 operating segments. The segment review will focus on the year over year changes for fiscal Q3. Starting with our Consumer Packaging International division, revenue was down 5% from the pass through of polymer costs, partially offset by organic volume growth of 1%. Our industrial and personal care markets improved compared to the prior year, while foodservice markets were weaker. We continue to execute our strategy to drive improved product mix to higher value products.

Operating EBITDA was up 5% compared to the prior year quarter, driven by our structural cost reduction initiatives, lower energy costs in certain European regions and positive organic volume growth. We also continue to invest and expect improved product mix by utilizing our sustainability leadership and increasing our presence in healthcare packaging, pharmaceutical devices and dispensing systems. On Slide 10, revenue in our Consumer Packaging North America division increased by 3%, primarily driven by 2% organic volume growth. This growth was broad based across many markets including food, beverage, personal care, home care and industrial. Our foodservice business saw a modest decline against a strong prior year quarter.

Our teams have successfully mitigated a weaker demand environment driven by inflation through share gains. Notably, we've witnessed numerous substrate conversions from paper, foam, glass and metal to plastics. Our ongoing efforts include integrating more circular materials, offering sustainable solutions and enhancing the end consumer experience. Operating EBITDA showed strong performance increasing by 10% compared to the prior year quarter. This growth was primarily attributed to our cost reduction efforts, focus on higher value products, timing of polymer pass throughs and a 2% organic volume increase.

And on Slide 11, revenue in our flexibles division declined 2% due to lower selling prices, partially offset by a 2% organic volume increase, primarily in our consumer categories and European film products. While our industrial markets experienced modest headwinds when compared to the prior year, we continue to see recovery as overall volumes increased over Q2. Operating EBITDA for the quarter increased by 2% compared to the prior year quarter, driven by positive volume growth and structural cost reduction initiatives, partially offset by unfavorable mix. On Slide 12, revenue in our Health, Hygiene and Specialties division remained flat compared to the prior year. This result was driven by a 2% organic volume increase, which was offset by lower selling prices from polymer pass throughs.

Notably, we observed strong volume growth in our surgical suite, hard surface disinfecting wipes and adult incontinence markets. Encouragingly, overall volumes have shown sequential improvement over the past 4 quarters. Additionally, operating EBITDA for the quarter increased by 5% compared to the prior year quarter, fueled by volume growth and our ongoing structural cost reduction initiatives. The HHS segment delivered solid volume and earnings growth during the quarter, while at the same time continuing integration activities of the previously announced Spin Merge transaction, including the creation of the Magnera brand. Magnera will be a global leader in the specialties materials industry with the broadest global product offering in high growth markets for both polymer and fiber based product applications.

Our consistent cash flows have allowed us the ability to deliver substantial returns to our shareholders, a testament to our company's core strength and value. This financial fiscal strength and stability enables us to channel investments into our businesses to drive organic volume growth, boost efficiency and concurrently distribute capital to our shareholders. As shown on Slide 13, our unwavering capital allocation strategy is rooted in returns and captures ongoing investments in growing markets, strategic portfolio management, debt repayment, share buybacks and a growing quarterly cash dividend. As Kevin mentioned, we expect to deliver over $1,000,000,000 in free cash flow in our fiscal Q4. Additionally, we foresee generating proceeds exceeding $2,000,000,000 within the next year, inclusive of our proposed spin merger transaction with Cloudfilter that we previously announced.

These divestitures align seamlessly with our long term strategy, which aims to streamline the portfolio, bolster earnings stability and augment long term growth. Capitalizing on our robust and reliable cash flows, we have strengthened our solid balance sheet with a focus on driving long term value for our shareholders. We project to be within our targeted leverage range by the close of fiscal 2024. We believe we are well positioned for continued value creation. Our strong cash flows have allowed us the flexibility to drive returns for our shareholders.

As demonstrated on Slide 14, Berry has reduced net debt by more than $3,000,000,000 since mid-twenty 19 along with more than $1,500,000,000 returned to shareholders through both share repurchases and dividends in fiscal 2022 and 2023. By the end of fiscal 2024, we expect that we will have returned an impressive $5,400,000,000 of cumulative net debt reduction and capital returns since fiscal 2020. As you can see on Slide 15, Berry's track record of delivering top tier results across various key financial metrics including revenue, earnings and free cash flow underscores our consistent growth, a testament to the effective implementation of our strategies. We remain committed to enhancing long term value for our stakeholders by maintaining a reliable and balanced portfolio. This consistency has withstood numerous economic cycles and since our last notable acquisition of RPC in 2019, we have generated free cash flow annually ranging from $850,000,000 to $1,000,000,000 Furthermore, from an earnings standpoint, our annual adjusted EPS CAGR of over 20% from 2015 to 2023 significantly surpasses the peer adjusted EPS our leading position in the industry.

This concludes my financial review and now I'll turn it back to Kevin.

Thank you, Mark. Our fiscal 'twenty four guidance and assumptions outlined on Slide 16 reflect a solid 3 quarter performance. We are now targeting $7.60 earnings per share for fiscal 2024. This EPS target assumes operating EBITDA of nearly $2,100,000,000 Specifically, fiscal Q4 assumes EBITDA of $560,000,000 or a 2.5% increase over the prior year quarter and low single digit volume growth.

We continue to expect free cash flow in the range of $800,000,000 to $900,000,000 Furthermore, and in line with our focus on driving long term shareholder value, we expect to prioritize repayment of debt to meet our leverage target commitment along with further share repurchases. We continue to believe our shares are undervalued and our repurchases reflect our confidence in the outlook of our business and long term strategy. As you can see on Slide 17, you will observe that Berry has a track record of meeting and often surpassing our objectives. Our long term objectives underscore the reliability and steadiness of our model, targeting an EBITDA growth of 4% to 6%, an adjusted EPS growth of 7% to 12% and a total shareholder return of 10% to 15%. We foresee our dividend growing year on year, and we're on track to reach our recently reduced long term leverage target by the close of fiscal 2024.

To summarize, our strategic objectives are unchanged: optimize the portfolio, apply lean transformation and expedite growth through top tier commercial excellence. With a clear trajectory to attain a low-3s leverage in the next 12 to 15 months, a lean transformation pipeline that enables a 2% to 3% annual reduction in conversion costs and the capacity to achieve organic growth of 2% to 3% per year, we anticipate delivering performance above that of our peers. Our positive outlook for the next several quarters is fueled by several elements, including the ongoing mitigation of inflation and a resurgence of more standard levels of customer promotional activity. Lastly, we have acted on areas to enhance our valuation multiple. We have fortified our robust balance sheet, reduced our targeted leverage range, and returned significant cash to shareholders.

And as we persist in showcasing sales volumes atorabovethepeeraverage, we are confident that we will persistently narrow the valuation gap to our peer group, thereby offering a compelling investment opportunity. Thank you for your time and interest in Berry. And with that, Mark and I are happy to address any questions which you may have. Operator?

Thank you so much. And it comes from the line of Josh Spector with UBS. Please proceed.

Hi, good morning. Actually, this is Sean speaking on behalf of Josh. Thank you for taking my question. So, well, in terms of our interest expense, and the guidance in the Q4, it looks much higher than the average positive 3 quarters. So any color on that?

Yes, sure. Good morning. This is Mark. The incremental increase in interest expense is primarily driven by some non cash interest income if you will that falls off or did fall off in Q3. And that was always projected in our outlook for fiscal 'twenty four.

Okay. Got it. Thank you. And in terms of our I mean, so the take out carbon market share trends and we mentioned before that we are gaining market share. So any color on the current trend?

The question was about volume trends in general or anything specific?

Takeout cups? Yes. So there were some, as you probably saw in many of our customer reports, foot traffic has been a little weaker than expected, driven by predominantly inflation. So as a result of that, you've seen many of our customers increase promotional activity here recently and we are starting to see the benefit of that in our volumes here in the short term. And we expect those customers to continue to focus on growing their business.

So we're optimistic about the outlook going forward. Yes, I would say we've in the last few weeks seen a notable improvement.

Thank you. Our next question comes from the line of Philip Ng with Jefferies. Please proceed.

Hey, guys. I guess on that note, a lot of the QSRs and even the CPG guys have talked about consumer being weaker, inflation and all that. So my question is, have you already felt the pain and seen it in your numbers? Pretty encouraging to hear that you're seeing some uptick here. So I guess, predicated in your guidance for the Q4 that low single digit volume growth, are you assuming things kind of pick up from here because of the promos already?

And what do you have kind of supporting that low single digit growth? Is this easier comp? Just give us a little more context on what you're seeing.

Yes, that is really and has been all year, our view is that we would just have improved comps. We expected the second half to not continue to see any deterioration, but to show some very modest improvement, but still to be kind of down from where they historically would have been. And that's really what we're seeing. So our 4th quarter projection is it's not dependent on any market improvement. If there is market improvement, I would say that would give us some upside.

But it's really just what we see happening now translating versus what we saw in the Q4 of last year.

And what have you seen Kevin, I guess, in the month of July so far?

We're having a good month. Okay. It's positive and encouraging.

an update on the process of the potential divestitures, just given the $3,000,000,000 of cash you highlighted coming in? And then just help us contextualize just given the EBITDA profile might be will be different post the spin. How do you kind of see leverage shaping up by the end of 2025? Could you kind of actually get below 3x? Just give us some color there.

And with your balance sheet in that leverage target ratio by the end of 2020 4, how are you prioritizing capital deployment? You talked about maybe buying back more stock. Give us a little more context in terms of capital deployment, M and A, buybacks and debt pay down from here?

Sure. Yes, we're committed to getting to that 3.5 or lower this year. I would expect in 'twenty five percent with our divestiture plan and the cash flows that we see coming, we should be in the very low 3s. I mean, possibly you could hit the high 2s, but I would say safely in the very low 3s. And I think we're very focused on the value of our stock being below what it should be.

So we continue to see share buyback as meaningful value for our shareholders. Of course, we're always looking at bolt on acquisitions that are highly accretive. So we would balance that with what opportunities we see transpire in the market.

Thank you. Our next question comes from the line of George Staphos with Bank of America Securities. Please proceed.

Hi, everyone. Good morning. How are you doing, Kevin, Mark, Dustin? Thanks for the details. My two questions.

I want to talk about the 2 pipelines that you talked about. First of all, can you talk about how the pilot at Franklin has evolved and what you've learned? You gave us a little bit of detail. Would like to get maybe some quantification there relative to what it can mean for the broader business over time in terms of improved efficiency and margin and the like. 2nd question, you talked about the innovation pipeline that you're developing.

We'd like a little bit of color, a little bit more on that. And in particular, with customers now beginning to promote more, especially at the foodservice side, what are they asking from you now in terms of promotion, excuse me, in terms of innovation, right? So if they're dropping price and trying to come to the customer with a reason for them to show up through their doors, how is the packaging, how is your product helping that occur and what's new beyond kind of the clear cup from a couple of years ago? Thanks and good luck in the quarter.

Sure. Yes, I'll start with the second one first, the innovation and growth. I'm extremely encouraged by the progress that we've seen in a very short period of time. In our CPNA business, we are tracking $75,000,000 of wins ahead of where we were at the same point last year. And we see really strong momentum developing there.

Of course, a piece of that business is in fact foodservice. And where we really differentiate and help drive success in these promotions is in 2 ways. We have an excellent sustainable solution in a very clear product that the consumer has shown in multiple tests to have a high preference for, which is why we continue to win share in that space. And we have the ability to service customers with rapidly changing demand requirements in a very consistent way. And they rely on us to be able to move with them when they start to promote and they want to go quickly, we have the ability to go quickly in a way that our most of our competitors just can't match.

And then in the first area, lean, we focused on Franklin because it was a ripe environment in a very meaningful growth area for our business in healthcare and one where we knew by driving productivity, we could immediately impact sales. Since we began the effort, we have seen north of 20% improvement in throughput, and it's really coming from a couple of key areas. One is the daily management processes that have gone out to really drive hour by hour focus at the shop floor level to quickly raise areas of opportunity to drive improvement, fix issues with machines, with how we schedule with the supply chain side of the business and quickly respond and remove those bottlenecks. We think that that process will have dramatic impact across all of our facilities, which we have around 200 facilities post HHS divestiture and very few of them have that sort of daily management process in place today. The second big lever we're finding is in the area of total predictive maintenance, preventive maintenance and predictive maintenance in general.

We have we're asset intensive in terms of conversion, and we need to make sure that those assets are running at a very high uptime. Our OEEs have room to improve and we seen substantial improvement in those OEEs through a focus on that predictive maintenance and being ahead of the game and avoiding breakdowns. That is another area we are building out as part of this lean transformation, which will ultimately help us to be more capital efficient to achieve the same growth levels. And as we grow faster than we have historically, we should be able to do that without having to raise our overall capital requirements.

Kevin, is it too soon to say what the raising of the OE could mean in terms of your earnings? Thanks. Sorry to come back, but it was kind of a hanging question.

Yes. I mean, we're building into our 'twenty five outlook, what we think it can mean in 'twenty five, but we are definitely targeting this 2% to 3% continual conversion cost improvement. And we see no reason why we can't continue to focus on that as the goal.

Thank you. Our next question comes from the line of Mike Roxanne with Truett Securities. Please proceed.

Thank you, Kevin, Mark and Dustin for taking my questions. Just one quickly on the EBITDA guidance. It seems like you lowered EBITDA to $2,060,000,000 from a prior range of $2,050,000,000 to $2,150,000,000 despite better volumes and positive price costs. So just want to get a sense for you of what's driving this lower EBITDA outlook? And also can you just give us some color on how you expect to generate $1,000,000,000 in free cash flow in fiscal 4Q as you're negative about $176,000,000 on a year to date basis?

Yes. So the first part on EBITDA, we did not lower our EBITDA guidance. We are coming in, in the range that we've talked about. We just are reporting the Q3. We have 1 quarter left.

So we're being more specific in where we see the final number for the year. What really drives the range for us is how much resin inflation we see and our timing on recovery of that, and that is by far and away the biggest impact in bringing us to the outcome of the range where we are. We have seen supply side constraints in around the world with areas that you will know in terms of transportation, getting through the Suez sorry, yes, the Suez and the Red Sea. We also have outages in North America that have affected the markets to move price higher. So that just puts us a bit behind in terms of the timing of recovery of that.

It's not a long term issue. When we look at the actual results of the business, our margins are better than we would have expected and we see really strong momentum and performance on cost. So when I look at our EBITDA performance, I'm actually very encouraged by it and very happy with the results. I would say the other the final thing I would focus on is I've come in as a new CEO and I have certainly caused a level of disruption. And I'm doing that with a focus on driving the ultimate long term rate of improvement in EBITDA, even though there are some short term impacts from that activity.

So I think all in all, I am very positive about where our EBITDA has developed and what it means momentum going into 'twenty five and beyond. And then on the cash side, we just have so many moving parts with divestitures. We still see the opportunity to manage our cash, short term working capital and still come in within our range.

Yes, just to add on the cash point, our outlook for Q4 is actually below what we've achieved the last 2 years on average, so very achievable and this is normal in terms of the cash flows on a quarterly basis.

Got it. And I appreciate the color. Very helpful. And then just one quick question on Flexibles. You mentioned persistent weakness in North American transportation and shrink from, I believe.

Previously, I think you said the same thing this quarter. Any initiatives underway to drive better performance from that sector? And if you could just share some provide some color around what you're doing to try to improve that? Or if not, what are your considerations for possible divestiture or something else? Any color you can provide would be helpful.

Yes, I mean, really our North American business in those areas has been really strong. I would say we're outperforming the market. We have shifted such a large portion of our volume to value added higher level of engineered product that allows customers to use less product because the performance is there through lightweighting and material science. And we are continuing to win share in that area at margins that we really like. I would say what you mentioned, I think, is really more limited some of what we've seen in Europe, and it's just a slower recovery in Europe.

But ultimately, we do see recovery happening in Europe. It's just happening at a slower rate.

Thank you. Our next question comes from the line of Ghansham Panjabi with Baird. Please proceed.

Hey, guys. Good morning. Your volumes are obviously up a little bit year over year, but are still at a very low threshold as are most of your peers in the industry, just given the challenges with consumer affordability that seems to be spreading, etcetera. How is that dynamic starting to impact competitive activity as you see it at this point in context of some of your peers calling out price competition in areas such as foodservice, for example?

Yes. I mean, we have we certainly are seeing higher levels of competition. We are offering a product offering specifically in foodservice that is quite superior. And we see really the ability to maintain margins there. We are continuing to win share in that space without sacrificing our margins in this space.

And I think we will continue to be able to do that going forward.

In general, I think our growth was good to see. It was what we expected, but seeing that validated was positive. I think when we look at the negatives that some of our peers experienced in prior years and periods, We didn't go to the same level of negative. So what we're seeing, they're flashing maybe a couple of numbers that are a little higher, but they're coming off of a much worse performance and we were much more consistent through this cycle.

And I think we've really set up the business well for consistency. And as we continue to refine this portfolio, we will just become more consistent going forward.

Yes, I think as you may recall Ghansham, we moved pretty early in fiscal 'twenty three to right size our footprint and remove our higher cost assets. Our peers did the same. I think many of them were a little slower to respond, but I think much of that higher cost capacity has been taken out of the network across many of our product categories.

Okay, got it. And then in terms of Europe, any update you can share in terms of the obvious questions on substrate shifts to wafer plastics into paper, etcetera? Have you seen any shift in that dynamic? And how does the European consumer just more broadly feel at this point in terms of core spending, etcetera?

Sure. The number one metric in Europe that is extremely encouraging to me is our growth has moved from 5% to 7%, So kind of our growth top line wins rate, and we seem to be picking up momentum with products that are really differentiated, especially multi component products in dispensing, in deodorant, in these sorts of categories, we are having a lot of success and we see momentum building. And that's really from very sustainable mono material lightweighted products that are better than the competitive offering. I would say the one area where there has been shift in terms of substrate is in drink cups. And in Europe, drink cups are really paper based.

And we see because of the regulation a shift to reusable plastic cups, and we are participating in that plastic cup space. So for us, it's a net positive driver of growth on a forward basis. The other thing that is causing us to have some superior growth in Europe is also related to regulation, it's the tethered cap. So on bottles, there's regulation that requires the cap to be fixed to the bottle for better recycling. And we have a superior product and we are winning with the big players there.

And that is a net positive and increasing driver of growth for us in Europe. The consumer obviously is, I would say, behind what we see in terms of the U. S. In terms of recovery, but we are seeing recovery and we've seen stabilization and really in the quarter we saw our first positive growth.

Thank you. Our next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please proceed.

Great. Thanks for taking my question. Hope you guys are well. I guess, it's encouraging to see the 1% to 2% or low single digit volume growth in fiscal Q3. I guess, how do you see that kind of evolving as you move into fiscal Q4 and 2025 for each of the different segments?

I guess, you do would you maintain that rate? And maybe if you can discuss if there's any specific drivers as far as new business wins or if it's merely just market based recovery?

Sure. I think we would we expect similar low single digit growth in the Q4, and we would expect to have accelerating growth in 2025 based on our performance in those markets, not due to recovery of the markets. If we see recovery of the markets really happening in 2025, that should be additional upside to our current outlook.

And then when we think about that in the context of maybe some of the planned divestitures, do you expect EBITDA growth next year? Or how should we think about the earnings power of the business? Is there any other cost reductions and operating leverage kind of drivers that you would have to lever that low single digit growth maybe to mid singles or how should we think about that? Thanks.

Yes. I mean, we're not giving guidance today on 25, but I expect that we will see EBITDA growth in roughly the way you characterized it.

Yes. And I would just add to that. Sorry,

I was just going to ask similarly on free cash flow and also in light of some of the divestitures, would you be seeing lower CapEx and maybe some increased free cash flow growth or how should we think about that? Thanks.

Yes, it's Mark. Yes, I would say, we've again consistently delivered between $850,000,000 to $1,000,000,000 of free cash since the RPC acquisition. Obviously, that would have to be adjusted for the spin merge, but there's nothing that free cash flow is an important metric for us and there's nothing that of substance that would change our outlook other than again the obvious adjustment you have to make for that spin merge.

Berry Global Group Q3 2024 Earnings Call Transcript | Fortune

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Berry Global Group (BERY) Q3 2024 Earnings Call Transcript

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