Executive Summary
Business. The Company's operations are organized into four operating segments:
Consumer Packaging International, Consumer Packaging North America, Health,
Hygiene & Specialties, and Engineered Materials. The structure is designed to
align us with our customers, provide improved service, drive future growth, and
to facilitate synergies realization. The Consumer Packaging International
segment primarily consists of closures and dispensing systems, pharmaceutical
devices and packaging, bottles and canisters, and containers. The Consumer
Packaging North America segment primarily consists of containers and pails,
foodservice, closures, bottles, prescription vials, and tubes. The Health,
Hygiene & Specialties segment primarily consists of healthcare, hygiene,
specialties, and tapes. The Engineered Materials segment primarily consists of
stretch and shrink films, converter films, institutional can liners, food and
consumer films, retail bags, and agriculture films.
Raw Material Trends. Our primary raw material is polymer resin. In addition,
we use other materials such as butyl rubber, adhesives, paper and packaging
materials, linerboard, rayon, polyester fiber, and foil, in various
manufacturing processes. While temporary industry-wide shortages of raw
materials have occurred, we have historically been able to manage the supply
chain disruption by working closely with our suppliers and customers. Changes
in the price of raw materials are generally passed on to customers through
contractual price mechanisms over time, during contract renewals and other
means.
Outlook. The Company is affected by general economic and industrial growth, raw
material availability, cost inflation, supply chain disruptions, and general
industrial production. Our business has both geographic and end market
diversity, which reduces the effect of any one of these factors on our overall
performance. Our results are affected by our ability to pass through raw
material and other cost changes to our customers, improve manufacturing
productivity, and adapt to volume changes of our customers. Despite global
macro-economic challenges in the short-term attributed to persistent inflation,
supply chain disruptions, currency devaluation and general market softness, in
part because of the Russia-Ukraine conflict, we continue to believe our
underlying long-term demand fundamental in all divisions will remain strong as
we focus on delivering protective solutions that enhance consumer safety and by
providing advantaged products in targeted markets. For fiscal 2023, we project
cash flow from operations between $1.4 to $1.5 billion and free cash flow
between $800 million to $900 million. Projected fiscal 2023 free cash flow
assumes $600 million of capital spending. For the definition of free cash flow
and further information related to free cash flow as a non-GAAP financial
measure, see "Liquidity and Capital Resources."
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