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Berry Global Equity Sells-Off As EUR Bonds Tighten Post Q1 Result

CAPITAL GOODS


  • Berry Global’s equity is down over 12% though it’s two EUR bonds are streaming with spreads over 11bps tighter DoD in the wake of Q1 earnings this morning despite a 4.5% miss on net sales (-7% YoY), a 3% miss on adj-EBITDA (-3% YoY) and a 7% miss on EPS.
  • The underperformance is mainly attributed to mainly on the back of the net sales impact from lower polymer prices and 3% volume drop, offset by favourable currency changes.
  • FY24 EPS and FCF (USD 800-900MN) guidance was affirmed, and management continues to expect compliance with their 2.5x-3x leverage target from 3.7x at FY23.
  • Berry also announced a tax-free spin-off and merger of its Health, Hygiene & Specialties (HH&S) segment with Glatfelter Corporation. Post-transaction, Berry is expected to own approximately 90% of the combined company, valued at USD 3.6bn.

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