That's consistent with the following year-end numbers in the 10-K:
EBITDA: $2.2 billion
Cash: $1.1 billion
Debt: $9.5 billion
Net debt: $8.4 billion
8.4/2.2 = 3.8
They've crept above 4x as of the last quarter end due to working capital movements causing net debt to increase, but if their projections for the next two quarters are anything close to correct, they'll be back below 4x by then. Management confirmed this calculation on the last call:
[Analyst]
Just one on my end on the capital deployment side of things. I think as of quarter end, you're maybe a little bit above 4x levered. So I guess, A, where would you expect net leverage to be by year-end? And does that kind of impact your way at all in your pace of buybacks? Obviously, you picked it up a bit near term, but just how should we think about that balance between net leverage and buybacks this year?
Thomas Salmon
We continue to believe after the full year, we'll be able to operate the company within our targeted range [i.e., 3 - 3.9x] , and it's reinforced by the fact that the majority of our cash flow generation typically occurs in the fourth quarter -- third and fourth quarter, sorry.
***
Part of the confusion may arise from the fact that same data sources do not appear to match the SEC filings. For example, I could not reconcile Tikr's numbers with what's in the 10-K.
Isn't the EV/EBITDA multiple almost identical to Amcor's? The difference in P/E is due to leverage - why should that make Berry more attractive? It is simply more volatile.
Groupe Guillin SA is another pretty good comp - 'cheaper' than both the above.
Are they already effectively below 4x levered? As of the last fiscal year-end, they claimed to be at 3.8x. See slide 7: https://ir.berryglobal.com/static-files/efe6c178-871e-4f28-919f-a790c5e32a35
That's consistent with the following year-end numbers in the 10-K:
EBITDA: $2.2 billion
Cash: $1.1 billion
Debt: $9.5 billion
Net debt: $8.4 billion
8.4/2.2 = 3.8
They've crept above 4x as of the last quarter end due to working capital movements causing net debt to increase, but if their projections for the next two quarters are anything close to correct, they'll be back below 4x by then. Management confirmed this calculation on the last call:
[Analyst]
Just one on my end on the capital deployment side of things. I think as of quarter end, you're maybe a little bit above 4x levered. So I guess, A, where would you expect net leverage to be by year-end? And does that kind of impact your way at all in your pace of buybacks? Obviously, you picked it up a bit near term, but just how should we think about that balance between net leverage and buybacks this year?
Thomas Salmon
We continue to believe after the full year, we'll be able to operate the company within our targeted range [i.e., 3 - 3.9x] , and it's reinforced by the fact that the majority of our cash flow generation typically occurs in the fourth quarter -- third and fourth quarter, sorry.
***
Part of the confusion may arise from the fact that same data sources do not appear to match the SEC filings. For example, I could not reconcile Tikr's numbers with what's in the 10-K.
Isn't the EV/EBITDA multiple almost identical to Amcor's? The difference in P/E is due to leverage - why should that make Berry more attractive? It is simply more volatile.