Sales Dip for Berry Global in 2019 Fiscal Second Quarter
Net sales in Berry Global’s Engineered Materials segment decreased by $27 million (4%) from the 2018 quarter to $628 million.
Berry Global Group, Inc. recently reported its second fiscal quarter 2019 results (the March 2019 quarter). Net sales of $1.5 billion represented a $17 million decrease (1%) from the 2018 quarter, primarily due to an organic sales decrease of $72 million and a $22 million unfavorable impact from foreign currency changes, partially offset by acquisition net sales of $77 million. The company reports that the organic sales decrease is primarily attributed to a 3% percent base volume decline and decreased selling price of $5 million
Net sales in the Engineered Materials segment decreased by $27 million (4%) from the 2018 quarter to $628 million, primarily due to an organic sales decline of $62 million, partially offset by acquisition net sales of $36 million. The organic sales decline is primarily attributed to a 7% volume decrease due to customer destocking and supply disruption related to material qualifications and decreased selling prices of $18 million.
Net sales in the Health, Hygiene & Specialties segment decreased by $23 million from prior year quarter, primarily due to an organic sales decline of $43 million and a $21 million unfavorable impact from foreign currency changes, partially offset by acquisition net sales of $41 million. The organic sales decline is primarily attributed to a 6% volume decline as a result of customer destocking, weakness in baby care, and customer product transitions in hygiene.
Net sales in the Consumer Packaging segment increased by $33 million over the 2018 quarter, primarily as a result of organic sales growth. The organic sales growth is primarily attributed to a 3% volume improvement and increased selling prices of $14 million.
“We generated record operating EBITDA for any March quarterly period of $354 million,” said Tom Salmon, chairman and CEO. “Our adjusted net income per diluted share was in line with the prior year quarter at $0.84 and we reported a significant improvement in free cash flow.
“Specifically by segment, our Consumer Packaging division delivered strong sales growth of 6 percent in the quarter, which was largely led by our foodservice products. We continue to be encouraged by the momentum of this division, delivering six consecutive quarters of positive sales growth. Within our Health, Hygiene & Specialties segment we recorded an improvement of 39 percent in operating income as well as a 6 percent improvement in Operating EBITDA, primarily as a result of the Clopay acquisition.
“Inside our Engineered Materials division, while our March results were weaker than expected, we completed the qualification of alternate and new raw materials and improved our cost position and service to customers. The fundamentals of this business remain strong and we are now better positioned for growth in these attractive markets. Additionally, we continue to be excited about the Laddawn acquisition which has been inspiring new ways for us to look at our core business as a vehicle to enhance growth, as well as, our customer experience.”
Additional details are available at www.berryglobal.com.