Bemis Company, Inc. BMS provided an overview of its long-term financial targets and strategic priorities for the next five years at its investor conference.
From the $4.3 billion reported in 2014, revenues are projected to grow to $5.8 billion in 2019, assuming constant currency. The growth will be equally balanced between organic and inorganic growth.
As per Chief Executive Officer, William F. Austen, global market trends are conducive for the company’s sophisticated packaging solutions business. Increasing focus on health and wellness, prioritization of sustainability, access to healthcare, and product differentiation on the retail shelf will boost demand for Bemis’ products. The company is thus proactively responding to these trends with increased attention to its customer needs, along with higher capital investment focused on growth and productivity projects.
On the margins front, the U.S. Packaging segment’s margin will increase from 13.1% in 2014 to the range of 15% to 18% over the course of the next three to five years. In the Global Packaging segment, margins are projected to increase from 7.6% in 2014 to greater than 10% in the next three to five years. Increased sales of sophisticated, value-added products to meet global demand, productivity improvements, and the benefit of commercial decisions supported by enhanced data and analytics will drive the improvement. This in turn is expected to lead to earnings per share improvement of approximately 10% per year.
Operating cash flow is projected to be around $550 million in 2019, backed by targeted revenue growth, earnings improvement, and working capital discipline. The company remains confident of delivering higher levels of operating cash flow in the future.
Headquartered in Neenah, WI, Bemis is a global manufacturer of flexible packaging products and pressure sensitive materials sold primarily to the food industry. The company also sells its products to other customers in the chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, and graphic industries.
Bemis currently holds a Zacks Rank #2 (Buy). Some other stocks worth considering in the sector include Berry Plastics Group, Inc. BERY, Rock-Tenn Company RKT and Sealed Air Corporation SEE. While Berry Plastics sports a Zacks Rank #1 (Strong Buy), Rock-Tenn and Sealed Air carry the same rank as Bemis.
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