“We made progress during the third quarter, driven in part by operational and manufacturing efficiencies in our US business,” says William F. Austen, Bemis Co. president/CEO. “Profit in our Global business also improved over the second quarter. As anticipated, in Latin America, unit volumes continued to be weak due to the challenging economic environment in Brazil; profit improved sequentially as we reduced variable costs to align with customer demand in Brazil.
“During the third quarter, we concluded the analysis of our restructuring and cost savings plan to properly align our manufacturing and administrative cost structures and better position the Company in the current business environment and for the long-term. We established an Enterprise Project Management Office to enhance ownership and accountability and to ensure that our planned $65 million in savings are delivered on time. The actions we are taking will create a more agile, streamlined, and efficient business, and we will implement these initiatives while maintaining the high quality products, focus on service, and culture of respect and innovation consistent with Bemis’ standard.”
Austen further comments, “While we have made good progress on our business initiatives during the third quarter, we anticipate volume challenges during the fourth quarter in our US and Latin American businesses. We will continue to stay focused on our cost savings plan and initiatives to strengthen our business.”
US Packaging Segment
US Packaging net sales of $672.3 million for Q3 2017 represented an increase of 2.2% compared to the same period of 2016. Compared to the prior third quarter, unit volumes were up approximately 2%.
US Packaging operating profit decreased to $99.6 million in Q3 2017, or 14.8% of net sales, compared to $100.8 million, or 15.3% of net sales, in 2016. Compared to the prior year, profits were impacted by previously-negotiated contractual selling price reductions on select products, partially offset by manufacturing efficiencies and the benefits of increased unit volumes. Compared to Q2 2017, increased profits were due to strong operational performance and manufacturing efficiencies, stabilization at a facility in Wisconsin that struggled with an ERP go-live during the second quarter, and lower business incentives related to select customers who were unable to meet their commitments for new business volume.