Summary:
- Restructuring and cost savings plan
initiated to improve profitability by reducing manufacturing and
administrative cost structure
- Benefit of program: annual savings run
rate targeted at $55 to $60 million, with targeted timing of 5-10%
in 2017, 50-60% in 2018, and the remainder in 2019
- Cost to implement: estimated between
$100 to $120 million
Bemis Company, Inc. (NYSE: BMS) announced today its planned
actions in a restructuring and cost savings program to improve
efficiency and profitability that further positions the Company for
long-term success. The Company will implement these initiatives
while maintaining the high quality products, best-in-class service,
and culture of respect and innovation consistent with Bemis’
standards.
“Improving the performance of our U.S. Packaging business is a
key priority in creating value for our shareholders," said William
F. Austen, Bemis Company's President and Chief Executive Officer.
"During April, we began a review to align our U.S. manufacturing
and administrative cost structures with the demands of our customer
base to better position the Company in the current environment and
for its long-term success. Given the challenges in the Brazilian
economic environment, we also expanded the scope of our review to
include our entire global business. We are targeting a total
company cost savings plan of $55 to $60 million as we create a more
agile, streamlined, and efficient business that is well-positioned
for the long-term.”
Actions include:
Optimizing manufacturing capacity. The Company has
definitive plans to close two manufacturing facilities; work
performed at these facilities will be transferred to other Bemis
locations. The Company will initiate the closing of one of these
facilities in 2017 and the other in 2018. Benefits from these two
plant closures will be approximately $10 million when fully
implemented. The Company continues to evaluate opportunities to
consolidate additional facilities.
Reducing SG&A Cost Structure. The Company will reduce
its administrative support cost structure to align with the current
business environment. These activities will result in a reduction
of approximately 300 positions, or 5 percent of the global
administrative workforce, over the next three years. Impacted
employees will receive job placement assistance and severance
benefits to assist in their transition. The cost savings from these
changes will be approximately $20 million over the next three
years.
The Company will provide additional details associated with its
targeted savings plan in the coming quarters as part of its regular
earnings reporting cycle.
Austen commented, “We are focused on improving our business and
further positioning ourselves for long-term profitable success. As
we begin to implement the first steps of this cost savings plan in
2017, we will also continue our comprehensive review to finalize
the remaining cost savings, to outline future capital spending, to
explore ways to offset headwinds of the current economic
environment in Brazil, and to reshape our go-to-market efforts to
align with the evolving U.S. packaged food landscape.”
Austen continued, “The strong foundational elements of Bemis
Company remain unchanged. We are committed to our dividend program
and returning free cash flow to our shareholders, to developing
opportunities for organic and inorganic growth, and to providing an
attractive, long-term investment for our shareholders.”
FORWARD-LOOKING STATEMENTS
This release contains certain estimates, predictions, and other
“forward-looking statements” (as defined in the Private Securities
Litigation Reform Act of 1995, and within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended). Forward-looking statements are generally identified with
the words “believe,” “expect,” “anticipate,” “intend,” “estimate,”
“target,” “may,” “will,” “plan,” “project,” “should,” “continue,”
or the negative thereof or other similar expressions, or discussion
of future goals or aspirations, which are predictions of or
indicate future events and trends and which do not relate to
historical matters. Such statements are based on information
available to management as of the time of such statements and
relate to, among other things, expectations of the business
environment in which we operate, projections of future performance
(financial and otherwise), including those of acquired companies,
perceived opportunities in the market and statements regarding our
strategy and vision. Forward-looking statements involve known and
unknown risks, uncertainties, and other factors, which may cause
actual results, performance, or achievements to differ materially
from anticipated future results, performance or achievements
expressed or implied by such forward-looking statements. We
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
Factors that could cause actual results to differ from those
expected include, but are not limited to:
- A failure to realize the full potential
of our restructuring activities;
- Our ability to retain and build upon
the relationships and sales of our key customers;
- The potential loss of business or
increased costs due to customer or vendor consolidation;
- The ability of our foreign operations
to maintain working efficiencies, as well as properly adjust to
continuing changes in global politics, legislation, and economic
conditions;
- Variances in key exchange rates that
could affect the translation of the financial statements of our
foreign entities;
- Our ability to effectively implement
and update our global enterprise resource planning ("ERP")
systems;
- Changes in governmental regulations,
particularly in the areas of environmental, health and safety
matters, fiscal incentives, and foreign investment;
- Changes in the competitive conditions
within our markets, as well as changes in the demand for our goods;
and
- Changes in our ability to attract and
retain high performance employees.
These and other risks, uncertainties, and assumptions identified
from time to time in our filings with the Securities and Exchange
Commission, including without limitation, those described under
Item 1A "Risk Factors" of our Annual Report on Form 10-K and our
quarterly reports on Form 10-Q, could cause actual future results
to differ materially from those projected in the forward-looking
statements. In addition, actual future results could differ
materially from those projected in the forward-looking statements
as a result of changes in the assumptions used in making such
forward-looking statements.
INVESTOR CONFERENCE CALL
Bemis Company, Inc. will webcast its next investor telephone
conference regarding its second quarter 2017 financial results on
July 27, 2017 at 10:00 a.m., Eastern Time. Individuals may listen
to the call on the Internet at www.bemis.com under “Investor
Relations.” Listeners are urged to check the website ahead of time
to ensure their computers are configured for the audio stream.
Instructions for obtaining the required, free, downloadable
software are available in a pre-event system test on the site.
ABOUT BEMIS COMPANY, INC.
Bemis Company, Inc. (“Bemis” or the “Company”) is a major
supplier of flexible and rigid plastic packaging used by leading
food, consumer products, healthcare, and other companies worldwide.
Founded in 1858, Bemis reported 2016 net sales from continuing
operations of $4.0 billion. Bemis has a strong technical base in
polymer chemistry, film extrusion, coating and laminating,
printing, and converting. Headquartered in Neenah, Wisconsin, Bemis
employs approximately 17,500 individuals worldwide. More
information about Bemis is available at our website,
www.bemis.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170630005138/en/
Bemis Company Inc.Erin M. Winters,
920-527-5288Director of Investor Relations
Bemis (NYSE:BMS)
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