Good day, and thank you for standing by. Welcome to the Berry Global earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to our speaker today, Mr. Dustin Stilwell. Thank you. Please go ahead. Thank you, and good morning, everyone. Welcome to Berry's first fiscal quarter 2022 earnings call. Throughout this call, we will refer to the first fiscal quarter as the December 2021 quarter. Before we begin our call, I would like to mention that on our website we have provided a slide presentation to help guide our discussion this morning. After today's call, a replay will also be available at our website at berryglobal.com under our investor relations section. Joining me from the company, I have Berry's Chief Executive Officer, Tom Salmon, and Chief Financial Officer, Mark Miles. Following Tom and Mark's comments today, we will have a question and answer session. In order to allow everyone the opportunity to participate, we do ask you to limit yourself to one question with a brief follow-up, and then fall back into the queue for any additional questions. As referenced on slide two, during this call, we'll be discussing some non-GAAP financial measures. The most directly comparable GAAP financial measures and the reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and investor presentation on our website. Finally, a reminder that certain statements made today may be forward-looking statements. These statements are made based upon management's expectations and beliefs concerning future events impacting the company, and therefore involve a number of uncertainties and risks, including, but not limited to, those described in our earnings release, annual report on Form 10-K, and other filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. Now I would like to turn the call over to Berry's CEO, Tom Salmon. Thank you, Dustin. Welcome, everyone, and thank you for being with us today. Let's begin this morning on slide four, where we've laid out our key takeaways for today. First, we are reaffirming our full year fiscal 2022 outlook, despite the impact of ongoing unprecedented inflation and supply chain challenges across the world. The convergence of these continuing issues and the new Omicron variant negatively impacted earnings in the quarter, with the strongest effects felt in the month of December. Overall demand finished in line with our expectation, but could have been stronger had we seen improvements in supply chains. We have focused our efforts on meeting customer demand while actively combating rising costs and investing for future growth in this dynamic macro environment. As we manage these disruptions, we are continuing to work alongside our customers to provide the innovative and sustainability-focused products they require. I will highlight a few of these projects in my closing remarks, as they play a pivotal role in maintaining our growth momentum in fiscal 2022 and beyond. We are confident in our demand outlook and even more confident in our long-term strategy, our people, and strong leadership position in the market. Next, delivering value to our customers and shareholders remains a top priority. We've been committed to a flexible and disciplined capital allocation strategy that balances returning capital to our shareholders and investing in our business for long-term growth through both organic and inorganic opportunities. Our financial performance and balance sheet have strengthened considerably over the past several years. We are now in a solid position to return capital to shareholders while still maintaining financial flexibility to execute our strategic plan, further strengthen our balance sheet, and invest in future growth. As a result, as we announced earlier today, the company's board of directors has approved a $1 billion share repurchase authorization program, which replaces the existing authorization. We anticipate fully utilizing this new program over the next two to three years and expect to repurchase at least $350 million of shares of outstanding common stock in fiscal 2022, including the $50 million we repurchased in the first fiscal quarter. This authorization demonstrates the board and management's confidence in the company's future and its ability to generate consistent and dependable free cash flow. As we've stated on previous calls, we are committed to a balanced capital allocation strategy to maximize shareholder value, which is supported by our strong free cash flow and will thoughtfully include continued investment to grow our business organically, growth through strategic acquisitions that will enhance our ability to grow organically, returning capital to shareholders, and debt reduction. We are highly confident in our ability to generate significant shareholder value based on our historic track record and future growth prospects. Backed by a very strong order backlog, an active pipeline of opportunities, and a number of planned organic growth initiatives, we are optimistic and committed to our long-term organic growth strategy. Next, let me turn to our number one core value on slide five, and that is safety, keeping all of our teammates healthy and safe. We have an ongoing commitment to identifying, managing, and minimizing safety risk. Through the past few years, the pandemic presented many challenges across our global footprint. Our global Berry team stepped up and took on the challenge by implementing and maintaining new protocols, all while keeping each other safe. In spite of these added challenges in operating during the pandemic, our safety performance has continued to show improvement. We are very proud of our industry leadership delivering an OSHA incident rate below one for fiscal 2021, significantly better than the industry average of 3.7. Our team's emphasis on working safely and servicing our customers in a challenging environment has made us a stronger and better company, giving us great optimism on the company's future success. Additionally, as you can see on the slide, we have a strong commitment to ensure that we are providing better opportunities and bringing innovation to provide multiple lives to natural resources, while heading many initiatives with industry and external partners to improve circularity and our carbon footprint. Now I'll turn the call over to Mark, who'll review Berry's financial results. Mark? Thank you, Tom. Before we move ahead into the details for the quarter, please note that the prior year December 2020 quarter contained additional shipping days for our U.S.-based businesses. When we discuss volumes, we have made the necessary adjustments to exclude the additional days and have provided normalized data for proper comparison, just as we did last year. Additionally, we will compare the current period quarter to the pre-COVID quarter two years ago, the December 2019 quarter, and we'll refer to this on a two-year basis. We believe this comparison provides meaningful and useful information to investors about the longer-term trends in our businesses and mitigates any impact that the COVID-19 pandemic has both benefited and negatively impacted portions of our markets. I would like to refer everyone to slide 6 now. For the first fiscal 2022 quarter, reported sales were $3.6 billion. Normalized sales were 18% higher than the prior year and up 30% on a two-year basis. Organic volumes were 3% lower than last year, in line with our expectation as we recorded 7% organic volume growth a year ago. When compared to pre-COVID levels on a two-year basis, organic volumes were up 4%. From an earnings perspective, we generated operating EBITDA of $457 million, which was down from the prior year quarter, primarily as a result of the product mix benefit realized a year ago and unprecedented inflation and supply chain disruptions this year. Despite these challenges, on a two-year basis, operating EBITDA increased 4% and adjusted earnings per share increased by 33%. These strong results over the past two years are driven by our focused strategy to invest organically in each of our businesses and strong execution in the face of significant cost increases in our primary raw material, resin, as well as inflation in other raw materials, freight, and labor, on top of ongoing supply chain challenges. Our employees around the world have shown an unwavering dedication to executing against our strategies, which has delivered 2% organic volume growth in fiscal 2020, 4% in fiscal 2021, and we expect another 2% in fiscal 2022. As we have demonstrated historically, and will again throughout fiscal 2022, we remain committed to passing through cost inflation and believe we are well-positioned, given our scale, to serve customers with our facilities in close proximity to our customers' locations, providing cost and sustainability advantages. Our ability to efficiently pass through inflation was demonstrated as our selling prices were over $700 million higher than the prior year, with a pass-through percentage of approximately 95%. Now I'd like to turn to the quarterly performance by each of our four operating segments, starting on slide seven. For the quarter, our Consumer Packaging International division delivered a 7% increase in revenue over the prior year and a 15% improvement on a two year basis, including organic volume growth of 3%. Regionally, we have seen modest positive volumes in developed markets, along with stronger growth in emerging markets such as India and Eastern Europe. From a market perspective, categories such as food and beverage and food service have seen solid volume growth, while industrial markets continue to experience some modest headwinds related to supply disruptions experienced by our customers. Operating EBITDA on a two-year basis is up 10%, primarily attributed to the organic volume growth and cost productivity, partially offset by the timing lag of recovering inflation. Next, our Consumer Packaging North America division delivered a 40% improvement in revenue on a two-year basis, including organic volume growth of 6%. Selling prices increased by over 30% versus the prior year from the pass-through of inflation. From a market perspective, we have seen solid demand for food, beverage, and healthcare markets, partially offset by the impact of supply chain challenges. Operating EBITDA on a two-year basis is essentially flat as the organic volume growth has been offset by the timing lag of recovering significant inflation. On slide nine, our Health, Hygiene, and Specialties division delivered a 36% increase in revenue on a two-year basis, including an impressive organic volume growth of 11% during the same period, partially benefited by strong demand in response to the COVID-19 pandemic. In the quarter, similar to our other divisions, we saw selling prices increase significantly from the pass-through of inflation. As expected, volumes were modestly lower than the prior year quarter as a result of strong year-over-year comparisons in our hygiene and healthcare markets. On a two-year basis, the segment benefited from organic capital investment in support of strong market growth in healthcare, hygiene, and PPE-related products. Operating EBITDA on a two-year basis is up 13%, primarily attributed to strong volume growth, partially offset by the timing lag of recovering inflation. Lastly, our Engineered Materials division delivered a 36% increase in revenue on a two-year basis, with a modest volume decline over the same period. In the quarter, we saw selling prices increase by 32% from the pass-through of inflation. Volumes were down modestly as the recovery in business was negatively impacted by COVID-19, along with the onboarding of new business, were offset by supply chain and labor challenges. On a two-year basis, Operating EBITDA was down 9%, primarily attributed to the timing lag of recovering inflation. Next, as you can see on slide nine, we are reaffirming our fiscal 2022 guidance of adjusted earnings per share of $7.20-$7.70, and organic volume growth of 2% as provided on our November earnings call. We are also reaffirming our full-year free cash flow range of $900 million-$1 billion. As Tom noted, we expect to repurchase at least $350 million of shares in fiscal 2022, including the $50 million we repurchased in our first fiscal quarter. We are pleased with the efforts of our teams and the resilience of our business to reaffirm guidance given the persistence of inflation, supply chain disruptions, and labor constraints. As referenced on our last call, we remain committed to recovering the significant inflation we witnessed in fiscal 2021 and here in early in fiscal 2022. We anticipate from both an earnings and volume perspective, a stronger second half of the fiscal year as we continue to recover inflation, supply chains improve, and new business and capital investments ramp up. On slide 10, again, for free cash flow, we continue to expect to generate $900 million-$1 billion. This includes cash from operations of $1.7 billion-$1.8 billion, less capital expenditures of $800 million as we continue to see a strong pipeline of growth and cost reduction projects with returns well above our cost of capital. I'm extremely proud of our execution in delivering on our free cash flow guidance every single year since we started providing guidance nine years ago. Our capital allocation plan is clear with a flexible return-based focus. We intend to use our strong, dependable, and consistent free cash flow to fund customer-supported investments that drive sustainable long-term organic growth together with active portfolio management that enhances our organic growth potential through strategic acquisitions and divestitures with a targeted leverage range of 3.0-3.9 times. This concludes my financial review, and I'll turn it back to Tom. Thank you, Mark. As you can see on slide 11, we have consistently driven top-tier results in nearly all key financial metrics, including strong compounded annual growth rates for revenue, earnings, and free cash flow, and have grown our adjusted earnings per share every year as a publicly traded company. Likewise, on slide 12, you'll see the significant value created for shareholders since our IPO, which is favorable compared to the S&P 500 returns. Our business model is extremely resilient and includes the broadest portfolio of packaging solutions with strong, dependable, and stable free cash flows to allow us the flexibility to drive the greatest returns for our shareholders. We are very well-positioned to continue to deliver significant value for our customers and shareholders. The strategic choices we've made guide how we prioritize our investments into the business, and we're investing now in several areas that will continue to drive long-term organic growth, such as the initiatives highlighted on slide 13. We continue to invest in each of our businesses to build and maintain our world-class, low-cost manufacturing base with an emphasis on key end markets which offer greater potential for differentiation and growth, like e-commerce, healthcare, and pharmaceutical. I'm very confident in our team's ability to meet our near-term and long-term expectations and execute on our commitments to provide sustainable, profitable growth. Near term, we are a dependable growing business that is supported by a robust pipeline of new earned and secured business, which we believe is enhanced as we increase our presence in these faster-growth end markets. In line with our focus on faster-growing end markets, we commercialized our first U.S. comprehensive commercial-scale clean room for our nine-layer blown film manufacturing line, which supports business applications in the fast growth markets of healthcare and pharmaceutical. Next, we will continue to invest and expand our emerging market position in support of our unwavering commitment to global growth. We believe that by increasing our presence in the faster-growing end markets, along with continuing to invest into emerging market regions, we will further enhance our ability to provide consistent, dependable, and sustainable long-term growth. We will continue to focus on our global mega-trends as we expect emerging markets to grow faster than advanced economies, and we believe there will be a considerable demand for our protection products in regions with rapidly increasing populations. Lastly, we remain uniquely positioned to provide a consistent stream of innovative new packaging solutions. We continue to invest in global innovation capabilities and centers of excellence to capitalize on what we believe is one of our strongest opportunities for both growth and differentiation, that being the overwhelming demand for sustainable packaging solutions. For example, we believe our recyclable polypropylene drink cup is the most widely recyclable cup for quick serve restaurants and convenience stores, having the ability to incorporate recycled content while maintaining the performance and clarity attributes our customers require. Our demand and growth pipeline for these products, including other beverage and spirits products, is strong, and we expect to continue to grow in these areas and capture share from alternative substrates. In line with the strong customer demand, just recently, we announced a $110 million expansion for our clear, sustainable food service packaging business. These investments are customer aligned, and the clear design meets an increased demand for a cup that showcases premium brand image and beverage appeal while improving restaurant operational efficiencies and offering an effective, sustainable packaging solution as compared to the other cup offerings in the market. We are committed to remaining at the forefront of the industry and innovating to meet and exceed our customers' sustainability goals. In line with these initiatives, as you can see on slide 14, Berry has received an A-minus rating for our leadership action on climate change from the Carbon Disclosure Project, or CDP, which is a not-for-profit organization that runs global disclosure systems for investors, companies, cities, states, and regions to manage their environmental impacts. Berry is part of only 12% of companies in the plastic product manufacturing group who have reached this leadership level. Additionally, Berry was honored to be named number 35 out of 2,000 public companies on America's Most Responsible Companies, presented by Newsweek and global research firm Statista. Further demonstrating our commitment to sustainability leadership, we recently announced our partnership in collaboration with TotalEnergies to make food packaging more circular and divert waste from landfills. This will help reduce waste and allow us to use more recycled plastic in our food and beverage packaging and healthcare products. Through our collaborations with suppliers, we aim to provide customers with premier access to these in-demand sustainable resins, like those already serving the European region. In conjunction with the multiple recent collaborations, we just recently announced our most ambitious sustainable packaging goal to date, as you can see on slide 15. 30% circular content used across our fast-moving consumer goods packaging by 2030. This is an increase from our original target of 10% and includes both recycled and renewable materials. Our new 30-by-30 goal aims to give natural resources multiple lives and introduce alternative renewable resources as the industry continues to pivot towards recycled and renewable resources. We look forward to continuing to lead the way in driving innovation and sustainability-based growth and announcing many more opportunities over the next several years. In summary, Berry delivered solid first quarter results in the face of supply chain challenges and persistent inflation. This leaves us with much work to do toward delivering on the expectations as we had provided for the balance of the year, and our teams are ready for the challenge. As Mark stated earlier, we are confident in our fiscal 2022 plans for both volumes and earnings as we continue to recover inflation, experience supply chain improvements, and see new business and capital investments ramp up in the back half of this year. We're very proud of our accomplishments in achieving our stated goals set forth in May of 2019, including growing organically, integrating our most recent acquisition, and deleveraging the balance sheet. These results, along with our expectations going forward, including generating $1.7 billion or more of cash flow from operations to continue to allow us to drive sustainable and consistent organic growth, are the result of a resilient business model and the hard work and perseverance of our entire team globally. We will continue to focus on driving organic growth, supplemented by inorganic opportunities, while providing more consistent return of capital to create maximum value for all stakeholders. I thank you for your continued interest in Berry. At this time, Mark and I will be glad to answer any of your questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Our first question comes from the line of Ghansham Panjabi with Baird. Your line is now open. Hey, guys. Good morning. As it relates to the 2% volume growth assumption for the fiscal year 2022, I mean, obviously, first quarter down 3%, you have top line comparisons for 2Q and 3Q. I guess what are you seeing in the pipeline and end markets that is giving you confidence that you'll be able to hit those numbers? You know, it seems like the world is more likely to normalize this year in full as opposed to Omicron. I'm just curious, what wouldn't that be a headwind for you in terms of volumes? We have invested, Ghansham, in each of our businesses to enable low single-digit growth. Frankly, we'll see that sequential improvement, you know, play out in quarter two and beyond. The only segment that, you know, really, based on the difficult comp from a prior year, will face, you know, further headwinds would be our HH&S business. Yet, very pleased with its performance here in the first part of the year, given the exceptional quarter one that it had. It's really tied to the capital investments that we've made. We anticipate onboarding at least $400 million of new revenue tied to capital investments going forward. Lastly, I would say the pipeline and backlog that we have as a business right now gives us good confidence going forward to achieve the 2%. Okay. For my second question, you know, obviously price cost was negative $41 million for the December quarter. Resin did decline in the quarter, but towards the back end. Will that benefit sort of flow through in the March quarter? And if so, what does that price cost line look like relative to that $41 million? We would anticipate, you know, being neutral price-to-cost no later than quarter three. Thanks so much. Our next question comes from the line of Anthony Pettinari with Citi. Your line is now open. Hi, this is actually Bryan Burgmeier sitting in for Anthony. You know, in the last quarter, you called out a $90 million headwind from the pandemic mix benefit largely fading away. You know, where does that stand now given Omicron and the U.S. government's plan for free mask distribution? This is Mark Miles, good morning. We have assumed that that benefit doesn't happen in fiscal 2022. You know, in Q1 here, inventories were higher, and so there was some inventory depletion that occurred in Q1. I think, you know, we all certainly hope this virus is behind us, but to the extent, you know, inventories get back in line and there is more variance or whatever, that would be a tailwind for that business. I would say our Q1 impact was very modest, and we do not have any impact built into our guidance for the balance of the year. Got it. Thanks for that. On your goal for the 30% circular materials by 2030, can you talk about the supply and availability of those materials right now? You know, how Berry, as industry leader, can help drive further availability of those materials in the coming years? Any incremental CapEx or impact to P&L that we should be mindful of as Berry ramps up their use of those materials? Berry has, I think, been a very strong advocate for the use of circular materials. The announcement, you know, relative to TotalEnergies, with an additional source of advanced recycling material, is just adding to that position. We are hoping to secure close to one billion pounds of advanced recycling material to satisfy our customers' needs. That pipeline continues to grow similarly. From a post-consumer recycle perspective, we've invested in our Plasgran facility in Europe that will contribute to our pipeline, as well as we just recently joined the WWF Bioplastic Feedstock Alliance. This is, I think, testimony to the fact that we don't believe one solution will solve the problem. It's gonna take a variety of solutions, and the advent of a bio-based component will continue to further our efforts to reduce our dependence on fossil fuels. It continues to grow, and it's all supported by what is unprecedented end customer demand, which continues to be very robust. I don't anticipate you know, beyond the norm, capital investment that would be incremental beyond what we would normally do in that any capital investment would be to support our organic growth initiative as the priority. Got it. Thanks a lot. Our next question comes from the line of Jeffrey Zekauskas with JP Morgan. Your line is now open. Thanks very much. In your guide, you say that your shares outstanding in 2022 will be 139, which is flat with what they are in 2021. You said that you'd also buy back $350 million worth of stock, which at $65 is about 5.4 million shares. Is there 5.4 million shares of issuance in shares and options in 2022? Are there similar numbers for 2023 and 2024, or is it 2.5? Can you talk about your share issuance? Yeah, I mean, certainly the timing matters. That number is an average over the course of the year. Your assessment is correct in that, you know, basically the shares purchased are offsetting incentive compensation shares, but the numbers are significantly lower than what you were coming up with. Maybe offline we can work through the math. Mm-hmm You know, that number is closer to two million than the five million. I suspect part of it is, again, the way you're averaging it over the course of the year. You know, that five million would depend on the timing of when you purchase it. Again, it would be averaged over the course of the year. We can offline go through the math. Go through the math. Mm-hmm. Secondly, in purchasing circular material, is it mostly polypropylene? Is that where there is an easier avenue to get circular material or, you know, is it also significant in polyolefin? Polypropylene is the primary area of focus with, you'll see it across all polyolefins at some point. Polypropylene is the predominant polyolefin right now, where the advanced materials are coming from. Okay, great. Thank you so much. Our next question comes from the line of Adam Samuelson with Goldman Sachs. Your line is now open. Yes, thank you. Good morning, everyone. Maybe first, I was hoping to just clarify the price cost commentary that I thought I heard in response to an earlier question. Neutral price cost by the third quarter, which would be similar to what you'd said last quarter. I think last quarter you talked about resin being flat. Resin has come off. I'm just trying to make sure I'm understanding kind of if something has actually changed there, and if so, what is it? Is it more freight, labor availability? Just help me think about that price cost balance a little bit. Yeah, sure. Two things. One is, yeah, there has been some decreases in resin in the U.S. You know, that same dynamic has not occurred in Europe, where we also obviously have a very big presence. Effectively, yeah, there is a benefit we're expecting to come through from that drop in resin from the guidance we provided a year ago, and that's being offset by higher inflation in other categories, you know, such as freight, other raw materials, energy, specifically in Europe, as you've probably seen in the news, has continued to escalate. Again, we're committed to passing those costs through, but there is a timing lag in passing through those incremental costs. Those two dynamics are effectively offsetting each other. Got it. On those non-resin related costs or those maybe less contractual or the lag on how those can work with your own pricing, that just take longer? I'm just trying to make sure I'm understanding kind of how the case- Yeah, That would be correct. Yeah. Yeah, that's a fair assessment. Okay. Maybe just quickly otherwise, you know, I think about the operating environment, the supply chain challenges. Did you have any volume issues or lost volume related to labor availability in your own operations? Or were customers not able to take volumes that you'd otherwise anticipated based on labor and supply chain challenges in their operations? I think it's a little bit of both, and I think you've hit it. You've heard other companies report, other major CPGs report, you know, disconnects in their supply chain. It ultimately, you know, creates a cascade down to us, where orders that are placed may not be ultimately shipped, or because of a given raw material, they may not be able to be made to meet that specific demand. It's a little combination of both. Clearly, on the prime resins today, we're seeing improvement in those materials in terms of supply and availability, similar to some improvement as well on the specialty resin side as well. We do anticipate that, you know, in the coming quarters, we'll see continued improvement in those supply chains, creating a more steady state of operation, reducing the amount of disruption to operations. All right. That's all very helpful. I'll pass it on. Thank you. Our next question is from Angel Castillo with Morgan Stanley. Your line is now open. Hi. Good morning, and thanks for taking my question. Just wanted to follow along the lines of the raw material question, I guess. You know, as we think about obviously what we've seen with energy and oil prices moving higher, I think you've talked about keeping everything flat in terms of your assumptions for the guidance. But are you assuming also maybe some inflation, whether it's on energy or, you know, particularly in Europe or other areas as we think about the March quarter, and perhaps a little bit beyond there? Yeah, no, that's fair. I mean, I think the resin assumption, we've assumed flat. On the other costs, you know, as mentioned, a couple questions ago to the response to that, we do have incremental inflation assumed, for those other costs such as energy. Got it. That's helpful. Just a quick clarifying one. I didn't see, I guess, an EBITDA table in the slides. Just curious if the range is still $2.25 billion-$2.35 billion that you're thinking about, or, have kind of pieces within guidance kind of moved around a bit? Yeah, no, I think we're. Look, we're committed to driving EBITDA growth here in fiscal 2022. Obviously, our guidance we provide with is with respect to full year EPS and cash flow, and we're committed to achieving both of those as well as, again, growing our EBITDA organically in fiscal 2022. Understood. Thank you. Our next question is from Mike Leithead with Barclays. Your line is now open. Hey. Great. Thanks. Good morning, guys. I guess just to kind of piggyback off that real fast. I guess you did provide an operating range last quarter. I don't see it this quarter. Is it fair to assume it's lower now since you haven't reaffirmed it? No, that's not the intention. Again, we had a slide in there. We just didn't update it this quarter. Okay. Fair enough. Tom, on the upsize buyback, I think in the release, the company highlighted rightfully the strong and dependable cash flow and desire to return cash to shareholders. I guess, can you maybe just give a bit more color on how the board ultimately decided to go this route versus maybe starting a modest dividend or I guess even doing both with the steady cash flow you highlighted? Yeah. It's a balanced approach. We highlighted the three primary objectives for the company. First and foremost, invest in our organic growth. Secondly, finding ways inorganically to complement that. Thirdly, returning cash to shareholders in the form of a share repurchase. I think it's a very strong statement relative to the confidence that both management and the board have in the growth prospects for our company. I think, you know, demonstrated by the commitment to repurchase, at a minimum, $350 million worth of stock in fiscal 2022, including the $50 million ASR we've already completed. This allows us to do all three of those things, and again, further support our organic growth goals and objectives. Okay. Our next question is from Josh Spector with UBS. Your line is now open. Yeah. Hey, guys. Thanks for taking my question. Just curious if you would comment on, you know, if you were at a stable resin environment and you recovered inflation as you expect to do over the course of this year, where could EBITDA have been in this quarter versus two years ago? I guess I look at that in the context that organic volumes were 4% higher. You should have more synergies from, you know, from RPC in that base, but EBITDA was essentially flat. So can you help us think about what the right base would or could have been? Yeah, I'm just trying to think of the. There's so many moving pieces in that, you know, over that stretch of period. I mean, I think certainly, there were a lot of challenges over the holidays, as you might suspect. You know, a lot of suppliers, customers took extended shutdowns over the holiday break. Last year, you know, we had an extra week in there as well and ran solid over that time period. Look, I would say it's probably in the $10 million-$20 million range of incremental EBITDA that could have been, and maybe even a little more when you think about cost inflation recovery. But probably somewhere in that order of magnitude. Okay. That's helpful. Just within Engineered Materials, you know, your comments on the year-over-year decline or supply chain issues, was that more you getting supplies or was that more customers' ability to take supply or shipping? How does that evolve now into the next quarter versus what you saw in December? Yeah, the business ultimately in terms of from a demand perspective was predominantly consumer films supporting the snacking and cereal category. You probably read some transcripts of major well-known brands that had similar issues that we in turn were impacted by. I would say also, though, that the businesses that were negatively impacted by COVID, you know, made strong improvements in line with our expectations. In this business, we continue to have about $70 million of new investment to support some of the higher growth markets like e-commerce that will play out, you know, over the coming quarters. That's a little bit of the space inside Engineered Materials. Okay. Thank you. Our next question is from George Staphos with Bank of America. Your line is now open. Hi, everyone. Good morning. Thanks for taking my question, and thanks for all the details. I wanted to come back to the overall outlook for the year. If you could give us a bit more in terms of your assumptions that are embedded in growth or the volume outlook for HH&S, and also the cadence and seasonality of EBITDA. Did performance in Q1 come in as a company below expectations? In turn, how are you making that up, and how does it occur over the quarters such that you're maintaining your guidance? George, thanks for the question. Each of our businesses ultimately have been invested in to deliver, you know, low single digit growth. From a seasonality perspective, Q1 is traditionally our softest quarter, and then we see ramps improve in Q2, three, and four subsequently. Inside CPNA, CPI, Engineered Materials, we continue to expect low single digit growth, and we'll continue to see some headwinds in HH&S, which we anticipated, again, given the incredibly strong comp that we had in the prior year. The backlog of opportunity, the pipeline of new growth is such that it gives us confidence that we have an improving dynamic going into Q2, three and four. You know, we can offset and mitigate some of those gaps in addition to fully offsetting the resin inflation, and other raw material inflation that we've experienced no later than Q3. Yeah. George, on the seasonality, I mean, you know, traditionally our strongest quarter, as you know, is June, followed closely by September, then March. As Tom said, the December quarter is almost always our seasonally weakest quarter. It's typically around 21% of the full year from an EBITDA perspective. You know, this year may be a point different than that for the factors that we've discussed here this morning. But generally pretty close to kind of the normal seasonality trend that we see every year. Last year I would say was the kinda abnormal year, if you will, and part of that was just due to the fact that we had that extra week where every six or seven years we have a 53rd week to our fiscal year. Understood. All right. Thanks for that, Mark and Tom. Just a follow on regarding sustainability. You're obviously partnering with lots of folks. You mentioned Total today. I think you have something going on with PureCycle. Can you talk at all about which technologies that you're looking at right now seem to be the most promising in terms of your sustainability goals? The 30% that you articulate, what is that actually measuring? You say one billion pounds, but I would seem to recall that 30% of your total resin buy would be higher than one billion. Help me understand the disconnect. What am I missing there? Thanks, guys, and good luck in the quarter. Sure. It's 30% circular plastics across our fast-moving consumer goods packaging business by 2023. Got it. That includes post-consumer, PIR, and biobase. Relative to technologies, I think you've seen that we're spreading ourselves across, you know, and to give us maximum optionality, both in terms of investments for post-consumer, advanced recycle materials as well as the new alliance that we're in around bioplastics feedstocks as well. It's gonna take them all to help our end customers meet their goals in sustainability. That said, the technology that in my view, personally, I believe has the ability to handle the largest amount of waste would be the advanced recycled, you know, technologies that are out there right now. We continue to work to secure additional feedstocks. Early on, George, we always said that our number one role in this is demand creation. I think, you know, as a company, we continue to be able to deliver more and more examples how to incorporate these materials successfully in conjunction with our end users to meet their sustainability goals and objectives. Thank you, Tom. Appreciate it. Good luck in the quarter. Our next question comes from the line of Salvatore Tiano with Seaport Research. Your line is now open. Yes, good morning. Hi. My first question is a little bit about your some of the new investments that you've been discussing over the past years, including disposable wipes and films for e-commerce, plastic mailers. I just want to see if you see any risk to demand there, given that when it comes to disposable wipes, obviously, as we saw, you know, with the Omicron, we may go to an endemic stage. When it comes to plastic mailers, you know, it certainly comes to our attention that companies like Amazon have been using a lot of new craft paper envelopes instead of the traditional plastic mailers. What are you seeing there? Is there any risk that the demand may not be as strong? Great question. We continue to believe that, you know, the e-commerce space is gonna continue to create incremental growth opportunities for us for a variety of technologies. Given, you know, the current penetration that we have in that market, we expect that, you know, to be a growth vehicle for our company going forward. Relative to hard surface disinfectant wipes, this is a global market. The penetration since the pandemic, when you contrast the demand levels versus the pre-pandemic period, have grown exponentially. We feel really good about our leadership position in that space, in addition to translating that technology to geographies like Europe, where they were previously under-penetrated. We're looking forward to that. Great. For my second question, I wonder, as you think about both organic investments and M&A, does it make sense to go a little bit beyond plastics to other substrates? We're seeing a number of other large packaging companies willing to diversify more recently. Would that be something Berry would consider? We continue to believe that plastics provides an amazing opportunity, you know, to deliver the feature benefits that our end customers demand. Our ability to ultimately incorporate unique design to minimize a weight composition as well as provide them the opportunity to have sustainable solutions to meet those performance criteria, we believe we're uniquely positioned. If you consider the growth outlook for plastic substrates, certainly beyond the developed regions of the world, in terms of per capita consumption, there is exponential benefit that leads us to believe we're in the right substrate. That said, if there's opportunities for us ultimately to create value in other materials, you know, we'll certainly give that thought and consideration, you know, in the future. At this point, we believe that clearly, we're in a really good spot, and the commitment we've made towards sustainable solutions is the best place to be because our end customers need it, and they similarly value and benefit from the attributes of plastics, and they wanna see that continue well in the future. Okay, great. Thank you very much. Our next question is from Michael Roxland with Truist Securities. Your line is now open. Thanks for taking my questions. First one, just how much of the inflation you experienced in the quarter relates to, let's say, raw materials versus labor? Obviously, labor and some other costs may be a little more stickier, so it's harder to recoup than raw materials. Just wanna get a sense of the breakdown between the percentage that it was raw material inflation in the quarter versus labor and other costs that may be a little stickier. Yeah. Again, the largest cost for us is certainly resin. You know, it's about half of our total cost structure. Labor is the second largest cost category, followed by energy and freight. On a percentage basis, you know, certainly resin moves the needle most significantly, given it's half of the total cost. But if you're looking at it just, you know, as an inflation percentage by category, I would say some of the other categories have had very substantial inflation, you know, in excess of 20%, and many of those Categories that fall below the top four. Resin is really going to be the one that moves the needle for the company. Got it. Thanks, Mark. Just, you know, Tom, I wanted to get your thoughts just around the broader portfolio and businesses. As you constantly analyze your portfolio, are there any businesses that you think don't have as well a strategic fit within the broader organization? Let's say maybe like the cakes business and Engineered Materials. Obviously, as you mentioned just recently, the $70 million new investment to support e-commerce within Engineered Materials. As you constantly evaluate the portfolio, we look to target areas where there are growth and where you consider getting out of areas where maybe there are less strategic fits. Yeah, you know, we noted that, you know, in our earnings conference call supplemental materials relative to our capital allocation. That as part of that capital allocation, organic growth being number one, and number two being inorganic growth, as well as the prospect for potential divestitures. If there's pieces of the portfolio we think ultimately could have, you know, greater value for someone else. That is an active part of reviews that we do with our board and management on a regular basis. It's probably all I can say, you know, on that at this point. Thank you. Our next question is from Mark Wilde with Bank of Montreal. Your line is now open. Thanks. Good morning, Tom. Good morning, Mark. Mark Wilde. Can you, Mark, first of all, can you just tell us, real quickly, how much of an Omicron drag would you anticipate in the second quarter? Any way to quantify? You know, I don't believe it. Particularly thinking of labor, I guess. Yeah. Yeah, no, it's a fair point. I mean, look, our teams are doing a great job. You know, everyone is fighting absenteeism as a result of COVID, you know, and we're certainly not immune from that. We're certainly still gonna have some headwinds in that regard in the current quarter. You know, last quarter, again, I think it was probably somewhere in the $10 million range. Again, that's a combination of that, not just our own internal absenteeism. I think it's gonna still be in that range, would be my guess here in Q2. Okay. For my second question, I wonder, Tom, can you just update us on a couple of issues around resin over in Europe? One, these proposals for kind of resin taxes. Then what kind of impact have you seen, if any, on demand for any types of plastic packaging in Europe over the last two or three years as Europeans seem to have moved faster on this issue than we have in North America? They have moved faster, and those that have embraced sustainability upfront are winning. That's clearly the stance that we took, that we were gonna embrace sustainability as a growth vehicle, and lead in that market. We're doing just that, whether it's you know with you know what we announced today with Total on advanced recycled materials or whether it's the internal investment we've made in post-consumer materials, that's providing a huge benefit for us. That has also been matched by the continued investments that we make around designing for sustainability as well. Things like on our dispensing solutions, having an all plastic solution, and it makes it easier to recycle. From a macro perspective on tax, you know, in areas that we'd be impacted by a tax, that is getting passed along to the consumer, and it's not yet impacted demand because we've ultimately been able to, you know, showcase opportunities for continued productivity and weight reduction in some of those applications. I thought something that recently just came out in Spain that was really notable was that, you know, a material, that being advanced recycling, was removed from the taxation list in Spain, which, you know, I think is a great sign of the opportunity out there in terms of incorporating these sustainable solutions and materials to meet the CPG's, you know, global requirements and do it responsibly and sustainably. It's a growth vehicle for our company. Okay. Very good. I'll turn it over. Our next question comes from the line of Philip Ng with Jefferies. Your line is now open. Good morning, Tom. Good morning, Mark. This is actually John sitting in for Phil. I appreciate all the details and thanks for taking my question late in the call here. I just wanted to touch on a couple of things. I think you said that you expect in the guidance, resins to be flat. I assume that's flat to January levels. Could you also break out some of the other assumptions that are built into your price-cost guide of getting back to neutral in fiscal 3Q? Sure. Yeah. No, your assumption is correct, that it's January polymer costs. Relative to other assumptions, you know, we've got price increases that started taking effect in January 1, you know, continuing again in February 1, just a couple days ago and ongoing, right? We're continuing to combat increased inflation with additional price increases to customers. As we talked about earlier, we have very efficient passthroughs on resin. The other costs are a little less efficient, but we're committed to passing them through. I would say, you know, broadly, our assumption is flat resin, increasing costs and other categories being passed through with incremental price as the year progresses. Are there any buckets that you, I guess, assume will improve by 3Q? You know, thinking like freight. I mean, labor is obviously gonna be out next quarter, but you know, freight, energy, you know, any of that coming down baked into the guidance, or that's all continuing to kind of stay flat to where it is? Yeah, it's a good question. Some of the other purchased items that tend to follow polymer, you can think about inks and colorants. Some of those have started to moderate as a result of the recent. I'm referring to the United States following some of the recent reductions in resin costs. Some of those have some moderation built in, and those, you know, that's actually happening. That's not a forecast. That's actually happening. Got it. Appreciate the color. Just jumping back over to the increase in your sourcing of circular resins. Again, it's still very early in the process, you know, for sourcing these going out to 2030. You noted that the premise for increasing your sourcing is really helping with some demand creation. Your customers are obviously looking to get more sustainable. Is there any direction, you know, in this early stage of where you're seeing cost comparisons for these circular resins compared to your traditional polyolefins? Or are they, at least as of right now, pretty in line? Do you actually see, you know, potential for margin creation as you're able to increase your sourcing of circular resins and they become, you know, more in demand from your end customers? It's interesting. During periods of inflation on virgin materials, they become a lot more comparable. In periods of deflation, you know, they become, you know, less comparable. That being said, the commitments externally that the brands have made around sustainability and content, you know, are driving adoption. The great thing about these materials, they can be metered in different percentages to ultimately mitigate some of the overall cost impact, especially when it's incorporated in addition to, you know, new design iterations that might ultimately take out weight while not impacting functionality. I don't see this stopping by any means. In fact, the demand from the consumer packaging houses has been incredibly strong. They're pushing the industry for more choices and optionality for them to incorporate, you know, in their products. I think just with some of the publicized closes that Berry has made in this regard, these are very well-known global brands, and our speculation is that the adoption rate will only continue to grow. As we continue to get further access to more feedstock, it will increase the supply, and as the supply is created, the cost will come down. The great news is it's all supported by demand, and that is what early on we stated was our number one goal, to make certain we were doing our part to create the necessary demand to support the capital investment, and it's beginning to happen. Understood. Thank you very much. Our next question comes from the line of Kyle White with Deutsche Bank. Your line is now open. Hey, good morning. Thanks for taking the question. I wanted to follow up on that last one in regard to the alternative resin use. I am curious if there's an opportunity to margin up when using this feedstock, but I'm also wondering, is this just cannibalizing existing business, or are you actually seeing new business wins and potential growth in this as well? Both. I mean, part of it's gonna be a transition in some applications, but the primary opportunity near term has been in new business. As the supply grows and increases, I think you'll see it migrate into the core portfolio. We're going to do everything in our power to capture the appropriate value that we bring up to and including what we incorporate in terms of material design proximity of our manufacturing locations in which we're advantaged by being able to put them in close proximity, reducing the environmental footprint by shortening the transit time. All those will become factors in terms of, you know, margin optimization. Berry has quite a good record, I think, over quite a long period in doing a very good job in terms of maintaining and growing our margins. Got it. On the share repurchase, I appreciate the target for this year, but I'm just wondering, you'll be at the midpoint of your leverage target range by the end of this year. I guess on a long-term basis, should we then expect any kind of excess cash outside of M&A to go towards repurchases, or do you see the need to further reduce your leverage beyond this year? You know, we're pleased to operate within our targeted range. Again, part of the rationale for our this evolution in our capital allocation strategy was it enables us to focus on those things that we think will maximize shareholder value, organic growth, inorganic growth, as well as returning cash to shareholders. We're able to do all of those while staying within that range. Got it. Thank you, and good luck in the year. Our next question is from Arun Viswanathan with RBC. Your line is now open. Great. Thanks for taking my question. I guess I was just kind of curious if you could update us on how to think about resin within your system, both from a P&L and free cash flow standpoint. In the past, I think you've noted that each penny is about $10 million on working capital each year. I guess, is that accurate? How do you think about on the P&L, just given some of the... Pricing and negotiated pass-through that you have on an annual basis. If you could help us with that'd be great. Thanks. Yeah, sure. On the first part of your question there with respect to the balance sheet and one-time kinda cash flow, the numbers you described are accurate. You know, I think last year, you know, you saw our sales go up 20%. This year, first quarter we're up, you know, mid-teens, again. Obviously the impact on working capital was very modest last year as we took actions to mitigate the impact of the increase. To the extent, you know, there's decreases, we'll have to make those decisions. Just as we said in our prepared comments, we're committed to achieving the cash flow guidance irrespective of, you know, what happens with polymer costs. We're committed to achieving the cash guidance. On the P&L side, which is obviously the more important part, you know, we have very efficient pass-throughs in both directions. When it goes up, it's passed through efficiently, and the same thing on the way down. You know, we've done a really good job of mitigating that over the years. We used to have a much longer lag. It's about a net one-month lag for us now. You know, again, it was much longer than that years ago. You can see that with the volatility, right? Massive volatility in resin, and you see very little impact on our results quarter to quarter. Really proud of our team's execution there. Obviously, the inflation now we've seen in some of the other cost categories, you know, is pushing us to make further adjustments to those other cost categories that weren't necessary in the past. We continue to work on that and proud of our progress to date. Great. Thanks. If I could follow up just on the capital allocation standpoint, you've provided the $350 million for fiscal 2022 and the $1 billion program. What are you seeing, I guess, on the M&A side? Is there any focus there? Would you expect to do anything transformative? If not, is there the potential to see some upside on that repurchase number? Thanks. As you saw noted in our supplemental materials, inorganic growth, you know, was listed as the second most important component to creating shareholder value. We continue to be inquisitive and seek out opportunities to complement and support our organic growth goals and objectives, both in terms of targeted markets and geographies. Relative to size, transformative or otherwise, less important. You know, it is a part of our overall growth strategy. Again, it's all gonna be focused on how it complements our growth objectives long term. Thanks. Our next question is from Chris Parkinson of Mizuho. Your line is now open. Great, thank you. You know, given all the commentary, you know, kind of on the ESG front and some of your efforts there, can you just speak to, you know, one of the agreements, you know, I think people find particularly interesting is the one with Wendy's and LyondellBasell. You know, in terms of your overall goals over the long term, how important are these types of agreements to achieve them, in terms of just overall having a collaboration model? Thank you. Yeah, we believe whether it's in our food service space or any part of our through our businesses having projects that are customer linked creates the highest likelihood for success, because those ultimately reduce risk because there's mutual commitment on both sides. We're gonna continue to strive to align our capital investments with customers to help them meet their growth objectives and find ways to do it sustainably. We're thrilled to have a partner in Wendy's, and you know, you should expect throughout in the near term to hear more announcements and communications around similar partnerships you know that we'll be thrilled to communicate. Got it. Just as a quick follow-up, just given all the puts and takes in, you know, 2022, you know, when we take a step back and look at some of your growth markets, specifically HH&S and e-commerce, just for those trying to dissect your longer-term assumptions on the volume, organic volume fronts, you know, do you have any updates in terms of, you know, newer products or anything we, you know, we should be considering on the extras? Just any color there would be appreciated. Thank you. Yeah. You know, I'll remind you that you know, it's HH&S grew before the pandemic, and we had made an active effort to pivot more of our portfolio to faster-growing components inside the nonwoven space, adult incontinence, premium baby and fem care, aligning our business around faster-growing geographies like China, Southeast Asia. Pivoting more of the portfolio to things like you know, in the healthcare space and areas for you know, to serve some of these developing regions that we're gonna be converting from antiquated technologies to contemporary ones. That continues to be alive and well and gives us great excitement about that space, especially given its continued success really after from the great year it had in 2021. You know, similarly inside our Engineered Materials business, we continue to modernize and innovate that business. We continue to invest in areas like snack and cereal that, you know, continue to be supported by a larger at home consumption component of the market. We have communicated a new investment in a nine layer line that will support, you know, barrier films and, you know, help replace, you know, PET films in Engineered Materials business. Yeah, we have a tremendous pipeline. The capital investment we're making in our business continues to be robust. The opportunity set for us to continue that, to drive and support the organic growth continues to give us, you know, the ability to just to maintain our outlook for growth in 2022 and beyond. Thank you for the color. Our next question is from Josh Wilson with Raymond James. Your line is now open. Yes, thanks for squeezing me in. A couple cash flow questions here. First, your inventory turns got a little worse in the quarter. Can you speak to what drove that and also give us a sense of what the working capital assumption is within your cash from ops guidance? Sure, yeah. Inventory, you know, built for a couple reasons. One is, most importantly is, you know, supply to customers. We continue to build. As we talked about seasonally, Q1 is our weakest, so that's our opportunity to build inventory for the stronger upcoming seasons here, especially, you know, the spring and summer, where many of our products just have higher volume rates. Our assumption for working capital for the year is zero. We basically assume a flat working capital assumption for the year. Got it. As we think of your cash needs more longer term, should we think CapEx in fiscal 2023 is a similar level to what you're guiding 2022? Yeah, we continue to have a really strong pipeline of projects, both on the growth and cost reduction side, and so we're excited about the opportunity set in front of us. We'll continue to update the market with respect to our capital going forward, but I think, you know, this year is not an abnormal year in either direction, either high or low. I think it's pretty consistent with what we're expecting going forward. Thanks. I'll turn it over. Our last question is from George Staphos with Bank of America. Your line is now open. Hi, guys. Thanks for taking the call, and I'll make it very, very quick. You talked about some of the lags that you have in some of your other raw material costs. What can you do, and would you like to use the tracking of your adjustments for those, you know, costs away from resin? Or would there be maybe some disadvantage that arise from that longer term? How do you think about that? Thanks, and good luck on the quarter. Yeah, you know, it's interesting. Some of those aren't tied, as you said, George, to resin escalators, de-escalators and those types of indices. Frankly, in periods like now where we may be temporarily disadvantaged, there's other times that we're advantaged. Nonetheless, you know, we are bringing all forms of inflation to our end customer partners. As we prioritize supply above anything else during this period, they recognize that, and we're looking to offset, you know, all the inflation that we're incurring during this time, you know, given the unprecedented nature of it, you know, that we've been dealing with. There will be continued work and effort to continue to optimize those agreements. There's no better time than now. It's a fair question and, you know, we continue to work on it. Thank you, Tom. Listen, guys, thanks for everybody for your time and attention today. We appreciate your interest. Look forward to talking to you next quarter. Be safe. Ladies and gents, that concludes today's conference call. Thank you for participating. You may now disconnect.