Berry Global Group, Inc. recently reported its third quarter 2020 results (referred to as the June 2020 quarter). Net sales jumped 50% compared to the prior-year quarter, to $2.9 billion. The net sales growth is primarily attributed to acquisition net sales of almost $1.1 billion and a base volume increase of 2%. These increases were partially offset by lower selling prices of $99 million due to the pass through of lower resin costs, a $19 million unfavorable impact from foreign currency changes, and prior-quarter divestiture sales of $34 million.

“Through our employees’ relentless effort and dedication, along with our diverse, stable portfolio, we were able to deliver record earnings for any quarter in the Company’s history,” said Tom Salmon, chairman and CEO. “We have made progress and remain focused on our top three financial objectives of improving our strong balance sheet, organically growing our businesses, and integrating the RPC acquisition as demonstrated in this recently completed quarter.

“I am happy to report we generated a June quarterly record for net sales of over $2.9 billion, up 50 percent compared to the prior year quarter. Operating income increased 61 percent to $347 million while Operating EBITDA was a record for any quarter in the Company’s history at $581 million. Our adjusted earnings per share increased 69 percent to $1.52, and we reported a significant improvement in quarterly free cash flow, bringing our four quarters ended free cash flow to over $1 billion.

“For the June 2020 quarter, overall organic volumes for our legacy Berry businesses were up 2 percent. Our Health, Hygiene & Specialties segment recorded strong volume growth of 14 percent related to our recent investments, our targeted market approach, along with COVID-19 related benefits in our healthcare portfolio. Excluding COVID-19 benefits, we believe the business delivered high-single digit growth in the quarter. We are very proud of our teams in achieving their objectives of delivering profitable and sustainable growth. Our Consumer Packaging-North American business recorded flat volume for the quarter with strength in healthcare, household cleaning and grocery offset by softness in food service and industrial markets. We remain encouraged by the momentum of the Division with a continued growing revenue pipeline. Our Engineered Materials business saw volume declines of 8 percent in the quarter driven by headwinds related to COVID-19. Many of the products in that business are sold through distribution to schools, offices, or restaurants, to name a few end markets, which saw more contracted demand than our more consumer facing businesses. Excluding COVID-19, we believe the business would have grown low-single digits.”

Consumer Packaging-International segment delivered net sales of just over $1 billion in the June 2020 quarter, compared to $52 million in the 2019 quarter. The growth in the Consumer Packaging-International segment is attributed to the RPC acquisition.

In the Consumer Packaging-North America segment, net sales were $718 million, compared to $652 million in the 2019 quarter. The net sales growth in the this segment is primarily attributed to acquisition net sales of $117 million related to the U.S. portion of the acquired RPC business, partially offset by lower selling prices of $51 million due to the pass through of lower resin costs.

The Engineered Materials segment struggled in the June 2020 quarter, with net sales decreasing to $564 million from 2019’s $630 million. The net sales decrease in the segment is primarily attributed to an 8% base volume decline, reflecting the impact of COVID-19, as well as lower selling prices of $24 million due to the pass through of lower resin costs, partially offset by acquisition net sales of $7 million.

In the Health, Hygiene & Specialties segment, net sales increased to $608 million from $603 million in the prior-year quarter. The increase is primarily attributed to base volume growth of 14%, partially offset by lower selling prices of $24 million due to the pass through of lower resin costs, a $19 million unfavorable impact from foreign currency changes, and prior quarter sales of $34 million related to the divested Seal for Life business.

According to a company statement, “We still believe approximately 65 percent of our portfolio is advantaged to neutral with about 35 percent negatively impacted related to COVID-19. Specifically, on volumes, we anticipate our Health, Hygiene & Specialties segment to produce low double-digit growth. Our Consumer Packaging-North American business, we believe, will experience low-single digit volume growth as headwinds in the foodservice space moderate along with continued solid demand in hygiene and grocery markets. We believe both our Consumer Packaging-International and Engineered Material businesses will experience low-single digit and mid-single digit volume declines in our fiscal fourth quarter, respectively, related to the weakness from the impact of COVID-19. As COVID-19 headwinds subside we would expect the businesses to ultimately achieve low-single digit volume growth.”

Additional details are available at www.berryglobal.com.