RPC Acquisition Helps Boost Berry Global’s Net Sales in Fiscal 2019
Berry Global’s full year fiscal 2019 net sales increased by 13% to $8.9 billion.
Berry Global Group, Inc. recently reported its fourth quarter and fiscal year 2019 results. A 47% net sales increase of $965 million, to approximately $3 billion, in the fiscal fourth quarter was primarily attributed to acquisition net sales of $1.2 billion partially offset by decreased selling prices due to the contractual pass through of lower resin costs of $156 million and lower base volumes of 2%. According to the company, the quarter included continued volume growth in the Consumer Packaging-North America segment offset by lower base volumes in both the Health, Hygiene & Specialties and Engineered Materials segments, with both improving sequentially, as expected.
Berry Global’s full year fiscal 2019 net sales increased by 13% to $8.9 billion. The net sales growth was primarily attributed to acquisition net sales of almost $1.5 billion, partially offset by prior period divestiture sales of $20 million, a $48 million unfavorable impact from foreign currency changes, lower selling prices of $175 million due to the pass through of lower resin costs, a 1% decline as the result of a customer product transition, and a 2% base volume decline.
Net sales for fiscal year 2019 in the Consumer Packaging-International segment grew to $1.2 billion (from $215 million in fiscal 2018), primarily attributed to acquisition net sales from the RPC acquisition of around $1 billion. Net sales growth (to $2.6 billion from $2.5 billion in fiscal 2018) in the Consumer Packaging-North America segment was primarily attributed to acquisition net sales of $133 million related to the U.S. portion of the acquired RPC business and a 2% base volume improvement, partially offset by lower selling prices due to the pass through of lower resin costs.
Net sales declined in fiscal 2019 for the Engineered Materials segment, to $2.5 billion from $2.6 billion in the prior fiscal year, primarily attributed to lower selling prices of $117 million due to the pass through of lower resin costs and a 5% base volume decline due to softness in industrial markets and supply chain disruption related to material qualifications. These decreases were partially offset by acquisition net sales of $151 million related mainly to the Laddawn acquisition.
In the Health, Hygiene & Specialties segment, net sales declined from $2.6 billion in fiscal 2018 to $2.5 billion, primarily attributed to lower selling prices of $40 million due to the pass through of lower resin costs, a 2% decline as the result of a customer product transition, a 3% base volume decline as a result of weakness in the North American baby care market, prior year sales of $20 million related to the divested SFL business, and a $46 million unfavorable impact from foreign currency changes. These declines were partially offset by acquisition net sales of $164 million related to the Clopay acquisition.
“Fiscal 2019 was a transformative year for Berry, marked by the successful completion of the RPC acquisition along with our intense effort and focus on driving sustainable solutions for our customers,” said Tom Salmon, chairman and CEO. “Our combination with RPC creates a global plastic and recycled packaging industry leader with the most diversified, unique, and expansive manufacturing footprint allowing us to further assist customers in meeting their goals by utilizing our superior design and engineering capabilities.
“During the quarter, we delivered outstanding cash flows, while sales and earnings were in line with the expectations we communicated during our last call as we continued to build solid momentum in several areas including organic growth, innovation, and automation, demonstrated by our Consumer Packaging-North America segment, as it delivered its sixth consecutive quarter of positive volume growth.
“Our financial profile remains strong and will continue to be enhanced as we deliver synergies and benefits from our RPC acquisition coupled with our organic growth improvement initiatives. We look forward to the opportunities that lie ahead to continue to grow free cash flow and drive further shareholder value.”
Additional details are available at www.berryglobal.com.