Bemis Company, Inc. (NYSE:BMS) Q4 2017 Earnings Conference Call Transcript

Feb 01, 2018 • 10:00 am ET

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Bemis Company, Inc. (NYSE:BMS) Q4 2017 Earnings Conference Call Transcript

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Q & A
Operator
Operator

(Operator Instructions) And first, from Baird, we have Ghansham Panjabi.

Analyst
Ghansham Panjabi

Hey, guys. Good morning.

Executive
Bill Austen

Good morning, Ghansham.

Analyst
Ghansham Panjabi

So, it sounds like, obviously, there's several puts and takes on volumes for U.S. Packaging in '18. Is -- just to clarify, is the business loss in infant care a function of the customer consolidating suppliers or just sort of realigning their own footprint that, that impacted a dedicated plant on your end?

Executive
Bill Austen

A combination of both, Ghansham. They're consolidating suppliers due to the fact that they're shrinking the size of their footprint.

Analyst
Ghansham Panjabi

So, did you -- were you able to rebid for that business that you just lost out on, or?

Executive
Mike Clauer

We couldn't be competitive enough, Ghansham, so.

Analyst
Ghansham Panjabi

Okay, fair enough. And then just a second question. Bill, you had mentioned the pilot that you have for your short-run businesses. Can you sort of expand on that? Do you envision each of your plants over time to build those capabilities? And also, is the short-run process something that you should think about for some of the international businesses that you have as well? Thanks so much.

Executive
Bill Austen

Yes. Ghansham, we will be looking to -- as we get through this pilot in this one -- in two segments that we're in right now, we'll look to put it into other segments, and that may cascade to other plants. And if you look at some of the international businesses that we have, it is short-run business already. They don't have necessarily the large campaigns that the North American business has had over the years. But to answer the question on the front end, yes, we will look to put pilots and agile lanes across the plants if it's appropriate.

Operator
Operator

And moving on, our next question comes from Brian Maguire with Goldman Sachs.

Analyst
Connor Robbins

Hey, good morning, guys. This is actually Connor Robbins sitting in for Brian Maguire. I just had two questions, if I could, the first one relating to just kind of pursuing various pockets of growth. I know you guys mentioned this a few times in the press release and on the call. I was wondering if I could get a little more color on where exactly those pockets of growth are, if they're in certain end markets or just nonfood categories?

Executive
Bill Austen

Yes, good question. So if you were to look at large food and beverage customers, large food and beverage customers have short-run business. Our model over the years has always been to go after the long-run business there and not necessarily be focused on the short run. If you do the analytics of large food and bev customers, there's about a $2.2 billion opportunity for short-run types of business at large food and bev customers. If you bring that down to small- to medium-sized customers, the opportunity exists for about $3.2 billion of market, if you will, that exists at the middle to small-sized customers for short run.

So the analytics we've done, we've peeled that back and said, okay, where do