“All of our segments performed in-line with our expectations, overcoming incremental headwinds from currency and freight costs. In our U.S. business, strong operational performance within our factories continued. In our Latin American business, our teams continued to execute cost improvements in light of the challenging economic environment in Brazil. In our Rest of World business, our teams delivered the highest level of operating profit since the reporting segment was created through strong operational performance and organic sales growth of our healthcare packaging business.”
Austen concluded, “Through three quarters of 2018, we have increased adjusted earnings per share by 18 percent over the prior year and implemented numerous operational, commercial, and administrative improvements through Agility. Our teams across the globe are committed to improving our business for the long-term.”
As part of the Company’s previously-announced improvement plan called “Agility” to fix, strengthen, and grow its business, the fix aspect of this plan includes a restructuring and cost savings target of $65 million pre-tax by the end of 2019. Agility-related savings were approximately $9 million during the third quarter of 2018, for a year-to-date total of $26 million, reflecting a solid pace to meet the Company’s full year 2018 savings plan of approximately $35 million. Through three quarters of 2018, the strengthen and grow aspects of Agility are also on pace to meet the Company’s internal targets for growth of short-run business.
PROPOSED COMBINATION WITH AMCOR
On August 6, 2018, Bemis announced a plan for an all-stock combination with Amcor to create the global leader in consumer packaging with the footprint, scale, talent, and capabilities to better serve customers around the world, drive significant value for shareholders, create enhanced opportunities for employees, and deliver the most sustainable innovations for the environment.
Austen stated, “We believe combining these two organizations will drive significant value for shareholders, employees, and customers over the long-term. Bemis shareholders will have the opportunity to benefit from the expected increased dividend, which nearly doubles from Bemis’ current dividend, and the value creation driven from not only the $180 million of cost synergies identified as part of the transaction but also additional potential revenue synergies.”
Austen continued, “We remain on track for the transaction to close in the first quarter of 2019, after regulatory and shareholder approvals. All internal workstreams supporting regulatory filings and integration planning are on pace to our expectations. Until the transaction closes, we will continue to operate as an independent company and will remain focused on serving our customers and delivering our operating plans.”
Austen concluded, “For Bemis, this is the next exciting chapter in our evolution, and our employees will carry forward the Bemis legacy as they showcase their talents, knowledge, and passion for serving our customers and providing inspired packaging solutions as part of the global leader in consumer packaging that is being created through this transaction.”
During the third quarter of 2018, Bemis Company recorded $10 million of costs related to the planned transaction with Amcor, which are excluded from the Company’s adjusted earnings per share metric.