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

Feb 01, 2018 • 10:00 am ET

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

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Executive
Bill Austen

to return free cash flow to shareholders, resulting in over $700 million of value returned through dividends and share repurchase. We've added Emplal, SteriPack and Evadix to our global portfolio, each positioning us well for the long term in their respective markets. And through Agility, we are creating a cost-effective and more disciplined structure that is positioned to capture growth.

Looking at 2018. We will deliver the financial improvement plan we've laid out, but equally as important, we are also setting the stage for a profitable growing company in the years to come. Agility, fix, strengthen and grow is what drives that. High-level fix involves near-term profitability improvement and strengthen and grow create the foundation for continued success. At its core, Agility is about working differently to quickly and confidently respond to changes in the market and make the internal changes needed to drive growth for Bemis.

There are a variety of work streams underway that lay the foundation for growth and long-term value creation. First, I'll start by discussing the framework we have established. We have identified 10 areas of focus. The range -- these range in topic from best-in-class quality and service that exceeds our customers' expectations to managing our product portfolio and organizational structure, to targeting growth through short-run business. Each of these key areas has a fully vetted work stream that defines the deliverable and lays out the road map for success. Each work stream is owned by a specific leader within our business who has a full support team assigned to the area of focus. As to accountability framework, our project management office reports to me and is responsible for ensuring each milestone is delivered on time and on budget. We have made real progress within many of these work streams.

With regard to fix, we are executing our cost reduction plans, and we will see a $35 million benefit in 2018 from optimizing manufacturing capacity and from reducing our SG&A cost structure through actions such as consolidating office space, reducing 262 administrative positions and eliminating our aviation cost center. With regard to supporting the strengthen aspect of Agility, we have bolstered our North American operations by bringing in new talent in the last six months for over a dozen critical roles in operations, supply chain, capacity planning and quality.

With regard to grow, we are laying a foundation in our US business to deliberately pursue pockets of growth through the creation of what we call agile lane, which aligns our people, processes and assets to excel in short-run business that exists at large customers, small customers and medium-sized customers. We have established customer service representatives to support this business. We are actively in the market with a streamlined set of specifications or what we call core specs. We have a quick quoting procedure in place, and we have established certain manufacturing assets as dedicated to servicing short-sized runs.

As we become simpler, quicker and easier to work with, we are able to more deeply