Cirrus Logic Reports Q4 FY19 Revenue of $240.4 Million

Published

5 years ago

May 1, 2019

Reading Time: 8 minutes

Progress on Strategic Initiatives in FY19 Positions Company for
Future Growth

AUSTIN, Texas–(BUSINESS WIRE)–Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-performance,
low-power ICs for audio and voice signal processing applications, today
posted on its website at http://investor.cirrus.com
the quarterly Shareholder Letter that contains the complete
financial results for the fourth quarter and full fiscal year 2019,
which ended March 30, 2019, as well as the company’s current business
outlook.

“In FY19 we significantly expanded our penetration of the handset
market, driven by strong demand for our boosted amplifiers,” said Jason
Rhode, president and chief executive officer. “Although smartphone
market headwinds brought challenges this past year, revenue for the
quarter was at the high end of guidance. We are pleased with our
progress in FY19 as we executed on key strategic initiatives and gained
momentum with new product lines, while expanding our customer base.”

Reported Financial Results – Fourth Quarter FY19

Revenue of $240.4 million;
GAAP and non-GAAP gross margin of 51.8 percent and 52 percent,
respectively;
GAAP operating expenses of $117.5 million and non-GAAP operating
expenses of $102.9 million; and
GAAP earnings per share of $0.10 and non-GAAP earnings per share of
$0.37.

Reported Financial Results – Full Year FY19

Revenue of $1.19 billion;
GAAP and non-GAAP gross margin of 50.4 percent and 50.5 percent,
respectively;
GAAP operating expenses of $496.7 million and non-GAAP operating
expenses of $411.9 million; and
GAAP earnings per share of $1.46 and non-GAAP earnings per share of
$2.64.

A reconciliation of the non-GAAP charges is included in the tables
accompanying this press release.

Business Outlook – First Quarter FY20

Revenue is expected to range between $200 million and $240 million;
GAAP gross margin is expected to be between 49 percent and 51 percent;
and
Combined GAAP R&D and SG&A expenses are expected to range between $120
million and $126 million, which includes approximately $14 million in
stock-based compensation and $7 million in amortization of acquired
intangibles.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT today to answer
questions related to its financial results and business outlook.
Participants may listen to the conference call on the Cirrus
Logic website. Participants who would like to submit a question to
be addressed during the call are requested to email [email protected].
A replay of the webcast can be accessed on the Cirrus Logic website
approximately two hours following its completion, or by calling (416)
621-4642, or toll-free at (800) 585-8367 (Access Code: 6169247).

Cirrus Logic, Inc.

Cirrus Logic is a leader in high-performance, low-power ICs for audio
and voice signal processing applications. Cirrus Logic’s products span
the entire audio signal chain, from capture to playback, providing
innovative products for the world’s top smartphones, tablets, digital
headsets, wearables and emerging smart home applications. With
headquarters in Austin, Texas, Cirrus Logic is recognized globally for
its award-winning corporate culture. Check us out at www.cirrus.com.

Cirrus Logic and Cirrus are registered trademarks of Cirrus Logic, Inc.
All other company or product names noted herein may be trademarks of
their respective holders.

Use of non-GAAP Financial Information

To supplement Cirrus Logic’s financial statements presented on a GAAP
basis, Cirrus has provided non-GAAP financial information, including
non-GAAP net income, diluted earnings per share, operating income and
profit, operating expenses, gross margin and profit, tax expense and
effective tax rate impact on earnings per share, and effective tax rate.
A reconciliation of the adjustments to GAAP results is included in the
tables below. Non-GAAP financial information is not meant as a
substitute for GAAP results, but is included because management believes
such information is useful to our investors for informational and
comparative purposes. In addition, certain non-GAAP financial
information is used internally by management to evaluate and manage the
company. The non-GAAP financial information used by Cirrus Logic may
differ from that used by other companies. These non-GAAP measures
should be considered in addition to, and not as a substitute for, the
results prepared in accordance with GAAP.

Safe Harbor Statement

Except for historical information contained herein, the matters set
forth in this news release contain forward-looking statements including
our statements about our future growth opportunities, along with
estimates for the first quarter fiscal year 2020 revenue, gross margin,
combined research and development and selling, general and
administrative expense levels, stock compensation expense and
amortization of acquired intangibles. In some cases, forward-looking
statements are identified by words such as “expect,” “anticipate,”
“target,” “project,” “believe,” “goals,” “opportunity,” “estimates,”
“intend,” and variations of these types of words and similar expressions.
In addition, any statements that refer to our plans, expectations,
strategies or other characterizations of future events or circumstances
are forward-looking statements. These forward-looking statements
are based on our current expectations, estimates, and assumptions and
are subject to certain risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties include, but
are not limited to, the following: the level of orders and shipments
during the first quarter of fiscal year 2020, customer cancellations of
orders, or the failure to place orders consistent with forecasts, along
with the risk factors listed in our Form 10-K for the year ended March
31, 2018 and in our other filings with the Securities and Exchange
Commission, which are available at www.sec.gov.
The foregoing information concerning our business outlook represents our
outlook as of the date of this news release, and we undertake no
obligation to update or revise any forward-looking statements, whether
as a result of new developments or otherwise.

Summary financial data follows:


CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)

	Three Months Ended									Twelve Months Ended

	Mar. 30,			Dec. 29,			Mar. 31,			Mar. 30,			Mar. 31,
	2019			2018			2018			2019			2018
	Q4’19			Q3’19			Q4’18			Q4’19			Q4’18
Portable products	$	207,099		$	288,640		$	262,777		$	1,032,049		$	1,363,876
Non-portable and other products		33,342			35,655			40,396			153,475			168,310
Net sales		240,441			324,295			303,173			1,185,524			1,532,186
Cost of sales		115,802			161,115			150,543			588,027			771,470
Gross profit		124,639			163,180			152,630			597,497			760,716
Gross margin		51.8	%		50.3	%		50.3	%		50.4	%		49.6	%

Research and development		92,251			88,575			95,556			375,139			366,444
Selling, general and administrative		30,194			30,364			36,307			126,502			131,811
Gain on sale of assets		(4,913	)		–			–			(4,913	)		–
Total operating expenses		117,532			118,939			131,863			496,728			498,255

Income from operations		7,107			44,241			20,767			100,769			262,461

Interest income		2,248			1,740			1,378			6,960			3,609
U.K. pension settlement		–			(13,768	)		–			(13,768	)		–
Other expense		(150	)		101			(158	)		(217	)		(971	)
Income before income taxes		9,205			32,314			21,987			93,744			265,099
Provision for income taxes		3,048			2,381			9,983			3,753			103,104
Net income	$	6,157		$	29,933		$	12,004		$	89,991		$	161,995

Basic earnings per share:	$	0.10		$	0.50		$	0.19		$	1.50		$	2.55
Diluted earnings per share:	$	0.10		$	0.49		$	0.19		$	1.46		$	2.46

Weighted average number of shares:
Basic		59,031			59,511			62,654			60,116			63,407
Diluted		60,199			60,783			64,572			61,583			65,951

Prepared in accordance with Generally Accepted Accounting Principles Advertisement

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION

(unaudited, in thousands, except per share data)

(not prepared in accordance with GAAP)

Non-GAAP financial information is not meant as a substitute for GAAP
results, but is included because management believes such information is
useful to our investors for informational and comparative purposes. In
addition, certain non-GAAP financial information is used internally by
management to evaluate and manage the company. As a note, the non-GAAP
financial information used by Cirrus Logic may differ from that used by
other companies. These non-GAAP measures should be considered in
addition to, and not as a substitute for, the results prepared in
accordance with GAAP.


	Three Months Ended									Twelve Months Ended

	Mar. 30,			Dec. 29,			Mar. 31,			Mar. 30,			Mar. 31,
	2019			2018			2018			2019			2018
Net Income Reconciliation	Q4’19			Q3’19			Q4’18			Q4’19			Q4’18
GAAP Net Income	$	6,157		$	29,933		$	12,004		$	89,991		$	161,995
Amortization of acquisition intangibles		7,228			7,630			13,266			40,991			48,066
Stock-based compensation expense		12,583			11,181			12,533			49,689			48,740
U.K. pension settlement		–			13,768			–			13,768			–
Gain on asset sale		(4,913	)		–			–			(4,913	)		–
Acquisition-related items		–			–			(279	)		–			(4,327	)
Adjustment to income taxes		1,202			(7,003	)		(4,502	)		(26,781	)		27,254
Non-GAAP Net Income	$	22,257		$	55,509		$	33,022		$	162,745		$	281,728

Earnings Per Share Reconciliation
GAAP Diluted earnings per share	$	0.10		$	0.49		$	0.19		$	1.46		$	2.46
Effect of Amortization of acquisition intangibles		0.12			0.13			0.21			0.67			0.73
Effect of Stock-based compensation expense		0.21			0.18			0.19			0.81			0.74
Effect of U.K. pension settlement		–			0.23			–			0.22			–
Effect of Gain on asset sale		(0.08	)		–			–			(0.08	)		–
Effect of Acquisition-related items		–			–			–			–			(0.07	)
Effect of Adjustment to income taxes		0.02			(0.12	)		(0.08	)		(0.44	)		0.41
Non-GAAP Diluted earnings per share	$	0.37		$	0.91		$	0.51		$	2.64		$	4.27

Operating Income Reconciliation
GAAP Operating Income	$	7,107		$	44,241		$	20,767		$	100,769		$	262,461
GAAP Operating Profit		3	%		14	%		7	%		8	%		17	%
Amortization of acquisition intangibles		7,228			7,630			13,266			40,991			48,066
Stock-based compensation expense – COGS		288			220			422			877			1,474
Stock-based compensation expense – R&D		8,270			6,761			6,847			29,115			26,136
Stock-based compensation expense – SG&A		4,025			4,200			5,264			19,697			21,130
Gain on asset sale		(4,913	)		–			–			(4,913	)		–
Acquisition-related items		–			–			(279	)		–			(4,327	)
Non-GAAP Operating Income	$	22,005		$	63,052		$	46,287		$	186,536		$	354,940
Non-GAAP Operating Profit		9	%		19	%		15	%		16	%		23	%

Operating Expense Reconciliation
GAAP Operating Expenses	$	117,532		$	118,939		$	131,863		$	496,728		$	498,255
Amortization of acquisition intangibles		(7,228	)		(7,630	)		(13,266	)		(40,991	)		(48,066	)
Stock-based compensation expense – R&D		(8,270	)		(6,761	)		(6,847	)		(29,115	)		(26,136	)
Stock-based compensation expense – SG&A		(4,025	)		(4,200	)		(5,264	)		(19,697	)		(21,130	)
Gain on asset sale		4,913			–			–			4,913			–
Acquisition-related items		–			–			279			–			4,327
Non-GAAP Operating Expenses	$	102,922		$	100,348		$	106,765		$	411,838		$	407,250

Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	124,639		$	163,180		$	152,630		$	597,497		$	760,716
GAAP Gross Margin		51.8	%		50.3	%		50.3	%		50.4	%		49.6	%
Stock-based compensation expense – COGS		288			220			422			877			1,474
Non-GAAP Gross Profit	$	124,927		$	163,400		$	153,052		$	598,374		$	762,190
Non-GAAP Gross Margin		52.0	%		50.4	%		50.5	%		50.5	%		49.7	%

Effective Tax Rate Reconciliation
GAAP Tax Expense	$	3,048		$	2,381		$	9,983		$	3,753		$	103,104
GAAP Effective Tax Rate		33.1	%		7.4	%		45.4	%		4.0	%		38.9	%
Adjustments to income taxes		(1,202	)		7,003			4,502			26,781			(27,254	)
Non-GAAP Tax Expense	$	1,846		$	9,384		$	14,485		$	30,534		$	75,850
Non-GAAP Effective Tax Rate		7.7	%		14.5	%		30.5	%		15.8	%		21.2	%

Tax Impact to EPS Reconciliation
GAAP Tax Expense	$	0.05		$	0.04		$	0.15		$	0.06		$	1.56
Adjustments to income taxes		(0.02	)		0.12			0.08			0.44			(0.41	)
Non-GAAP Tax Expense	$	0.03		$	0.16		$	0.23		$	0.50		$	1.15


CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands

	Mar. 30,			Dec. 29,			Mar. 31,
	2019			2018			2018
ASSETS
Current assets
Cash and cash equivalents	$	216,172		$	219,319		$	235,604
Marketable securities		70,183			59,793			26,397
Accounts receivable, net		120,656			142,135			100,801
Inventories		164,733			167,879			205,760
Other current assets		53,239			51,151			45,112
Total current Assets		624,983			640,277			613,674

Long-term marketable securities		158,968			165,063			172,499
Property and equipment, net		186,185			191,324			191,154
Intangibles, net		67,847			76,389			111,547
Goodwill		286,241			286,678			288,718
Deferred tax asset		8,727			13,131			14,716
Other assets		19,689			24,003			37,809
Total assets	$	1,352,640		$	1,396,865		$	1,430,117

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	48,398		$	108,022		$	69,850
Accrued salaries and benefits		29,289			23,566			35,721
Other accrued liabilities		37,853			38,175			34,638
Total current liabilities		115,540			169,763			140,209

Non-current income taxes		78,309			78,532			92,753
Other long-term liabilities		18,551			18,769			35,427

Stockholders’ equity:
Capital stock		1,363,736			1,349,941			1,312,434
Accumulated deficit		(222,430	)		(217,871	)		(139,345	)
Accumulated other comprehensive income (loss)		(1,066	)		(2,269	)		(11,361	)
Total stockholders’ equity		1,140,240			1,129,801			1,161,728
Total liabilities and stockholders’ equity	$	1,352,640		$	1,396,865		$	1,430,117

Prepared in accordance with Generally Accepted Accounting Principles

Contacts

Investor Contact:
Thurman K. Case
Chief Financial
Officer
Cirrus Logic, Inc.
(512) 851-4125
[email protected]

Germany

IMC Germany Announces Outstanding Preliminary Q3, 2024 Performance with 50% Growth Over Q2

Published

1 day ago

October 2, 2024

CISION (PR Newswire)

imc-germany-announces-outstanding-preliminary-q3,-2024-performance-with-50%-growth-over-q2

TORONTO and GLIL YAM, Israel, Oct. 2, 2024 /PRNewswire/ — IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) (the “Company“, “IMCannabis“, or “IMC“), a leading medical cannabis company with operations in Israel and Germany, is pleased to announce that the preliminary sales results in Germany by its German subsidiary, Adjupharm GmbH (“IMC Germany“), for the third quarter of 2024 have significantly exceeded expectations, showing a remarkable 50% increase in revenue compared to the second quarter, where IMC Germany sold about CAD$ 3.5M. This outstanding growth demonstrates IMC Germany’s successful execution of its strategic initiatives and strong market demand for its products.

Since the partial legalization of cannabis in Germany came into effect in April 2024, the demand for cannabis products in pharmacies has increased significantly, emphasizing the importance of a robust, reliable supply chain.

“Since April 1^st, one of our key objectives was to ensure a supply chain strong enough to meet the increase in demand. This preliminary 50% growth is testament, in part, to delivering on this objective,” said Oren Shuster, CEO of IMC. “We are thrilled with our Q3 performance, which not only surpassed our own targets but also highlights the dedication and hard work of our entire team.”

About IM Cannabis Corp.

IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has focused its resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.

The IMC ecosystem operates in Israel through its commercial relationship with Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms, distribution centers, and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients.

Disclaimer for Forward-Looking Statements

This press release contains forward-looking information or forward-looking statements under applicable Canadian and U.S. securities laws (collectively, “forward-looking statements”). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to statements relating to compliance with Nasdaq’s continued listing requirements, and timing and effect thereof; the potential outcome of the Licensing Agreement and the effect of collaboration with Carmel in the Israeli market and the potential exclusive launch of the BLKMKT^TM brand this year in Germany.

The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include: the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company’s ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and Focus Medical (collectively, the “Group”) to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group’s obligations; the Group’s possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group’s cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt and war, conflict and civil unrest in Eastern Europe and the Middle East.

Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

CAUTIONARY NOTE REGARDING FUTURE ORIENTED FINANCIAL INFORMATION

This press release may contain future oriented financial information (“FOFI”) within the meaning of Canadian securities legislation, about prospective results of operations, financial position or cash flows, based on assumptions about future economic conditions and courses of action, which FOFI is not presented in the format of a historical balance sheet, income statement or cash flow statement.

The FOFI has been prepared by management to provide an outlook of the Company’s activities and results and has been prepared based on a number of assumptions including the assumptions discussed under the heading above entitled “Cautionary Note Regarding Future Oriented Financial Information” and assumptions with respect to the costs and expenditures to be incurred by the Company, capital expenditures and operating costs, taxation rates for the Company and general and administrative expenses. Management does not have, or may not have had at the relevant date, firm commitments for all of the costs, expenditures, prices or other financial assumptions which may have been used to prepare the FOFI or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not, or may not have been at the relevant date of the FOFI, objectively determinable.

Importantly, the FOFI contained in this press release and the documents incorporated by reference herein, are, or may be, based upon certain additional assumptions that management believes to be reasonable based on the information currently available to management, including those assumptions discussed under the heading “Disclaimer for Forward-Looking Statements” and assumptions about: (i) the future pricing for the Company’s products, (ii) the future market demand and trends within the jurisdictions in which the Company may from time to time conduct the Company’s business, and (iii) the Company continued ability to maintain its capital to fund its ongoing business development and future growth.

The FOFI or financial outlook contained in this press release do not purport to present the Company’s financial condition in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in any such document, and such variation may be material (including due to the occurrence of unforeseen events occurring subsequent to the preparation of the FOFI). The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments as at the applicable date. However, because this information is highly subjective and subject to numerous risks including the risks discussed under the heading above entitled “Cautionary Note Regarding Future Oriented Financial Information”, FOFI or financial outlook within this in this press release should not be relied on as necessarily indicative of future results.

Company Contact:

Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected]

Oren Shuster, CEO
IM Cannabis Corp.
[email protected]

Logo – https://mma.prnewswire.com/media/1742228/IM_Cannabis_Logo.jpg

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Gedeon

Gedeon Richter presents analysis on cannabis usage among patients with schizophrenia: a new medical solution to a severe issue might be available

Published

1 week ago

September 25, 2024

CISION (PR Newswire)

A novel psychiatric scale developed by colleagues of Gedeon Richter Plc. in collaboration with academia was also presented at the 37^th ECNP conference

BUDAPEST, Hungary, Sept. 25, 2024 /PRNewswire/ — During the 37^th Annual Meeting of the European College of Neuropsychopharmacology (ECNP), held between 21-24 September 2024, new analyses of cariprazine studies were presented by Gedeon Richter Plc. First of all, cariprazine seems to be an effective treatment option for patients with schizophrenia and comorbid cannabis use disorder, according to one of the five posters presented at the congress. Furthermore, during an industry sponsored session, a new transdiagnostic scale for quantifying and visualizing symptom severity of patients with different psychiatric conditions was also presented, that was developed by the medical team of Gedeon Richter Plc. and recognized professors.

Schizophrenia often co-occurs with cannabis use disorder however, available antipsychotic treatments frequently fail to address both disorders. In a scientific poster showcased by Gedeon Richter at ECNP in Milan, cariprazine was presented to be a potentially effective treatment option for patients with first-episode schizophrenia and comorbid cannabis use disorder according to the results of a 6-month observational study. Four other scientific posters were also presented at the congress by Gedeon Richter about the role of cariprazine in the treatment of schizophrenia such as the efficacy of cariprazine in patients who develop akathisia as a side effect or the impact of functioning on the risk of relapse in patients treated with cariprazine vs placebo. Cariprazine is a 3^rd generation antipsychotic medication with a unique receptor profile and proven efficacy in schizophrenia, including negative symptoms.

Lacking biomarkers in psychiatry calls for valid and reliable assessments of psychopathology across mental disorders that are easy to use, bridge research and clinical care, and that can capture clinician and patient perspectives. Recognizing this problem, the Gedeon Richter medical team together with experienced psychiatric professors developed a scale to handle this challenge. Using this new transdiagnostic scale called the Transdiagnostic Global Impression – Psychopathology (TGI-P) scale could help CNS professionals and psychologists to quickly assess and visualize symptoms in several psychiatric conditions. During an industry sponsored session, the details and the usability of the tool were shown to the audience.

About Richter and About Cariprazine

View original content:https://www.prnewswire.co.uk/news-releases/gedeon-richter-presents-analysis-on-cannabis-usage-among-patients-with-schizophrenia-a-new-medical-solution-to-a-severe-issue-might-be-available-302258335.html

Cannabis

Bioplastic Packaging Market Size Expected to Reach USD 87.98 Bn by 2033

Published

2 weeks ago

September 20, 2024

GlobeNewswire

Ottawa, Sept. 20, 2024 (GLOBE NEWSWIRE) — The global bioplastic packaging market size was valued at USD 17.99 billion in 2023 and is predicted to increase from USD 21.09 billion in 2024 to USD 87.98 billion by 2033, a study published by Towards Packaging a sister firm of Precedence Statistics.

Key Takeaways: Leading Factors of the Bioplastic Packaging Market

Use of renewable resources due to growing sustainable demand is the major factor that drives the market.
Eco-friendly alternatives perceive growth in North America due to growing environmental concerns.
Food and beverage industry is the dominating sector in the market due to the increasing consumption of packed food.
Limited infrastructure for bioplastic processing is an unceasing challenge for the market.

Download Statistical Data: https://www.towardspackaging.com/download-statistics/5215

Bioplastic Packaging Market: At a Glance

The bioplastic packaging market revolves around adoption renewable packaging which can be used multiple times and which is an alternative to the fossil fuel-derived plastics. Along with this, resource depletion, reduction of carbon footprint and material waste are the leading objectives of the market. The demand for sustainable packaging solution and the increasing plastic waste has increased the demand of the market.

The bio-degradable feature attributes to the reusable function of bioplastic packaging. The consumer demand for sustainable packaging has also increased the demand of the bioplastic packaging, given the reason it provides resistance and prevents denting as well. The bioplastic material tends to degrade easily which also reduces landfill waste.

Regional Insights

Europe thrives with its vision of sustainable packaging demand

Europe is the dominating region in bioplastic packaging market. The sustainability focus of Europeans has sustained the environment and the alternative packaging solutions have increased the popularity of eco-friendly packaging. The European vision of preserving sustainability is also about turning packaging materials into recyclable or reusable material by 2030 and this has increased exploration of alternative materials, design strategies and mostly importantly waste management system.

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Europe targets to reduce unnecessary packaging by 10% in 2035 and by 15% in 2040. The demand for bioplastic as an alternative increase as Europe has strict regulations against plastic usage which aims to reduce the utilization of single use-plastic to prevent environmental hazards, especially, in marine environment and human health. In addition, European Union also aims at promoting circular economy and innovative sustainable packaging solutions with specific targets which are 77% separate collection target for plastic bottles by 2025 and will be increased to 90% by 2029. Furthermore, 25% of recycled plastic will be incorporated in PET beverage bottles from 2025 and will be increased by 30% in all plastic beverage bottles from 2030.

In January 2024, European retailers were relived to watch the inflation slow down as it had decreased the consumer rate by 0.1%. Despite the increasing rates and fleeting number of consumers, shopkeepers were committed to the sustainable drive. The UK consumer survey stated that 62% believed that high prices are pulling them back from being sustainable and 52% said that sustainable alternatives should have affordable prices.

North America is a steady region for the bioplastic packaging market due to its sustainable packaging demand which is also the growing consumer requirement. The impact of conventional plastic adds to the ocean litter hazard and as an alternative to reduce carbon print, sustainable solutions are being adopted. Although the American consumers worry more about convenience, price and quality given the increased purchasing rates and the tax-paying lifestyle, 40% of consumers pay more attention to the provided sustainable packaging.

The use of compostable packaging allows circular economy in the US and the companies are innovating new alternatives to support the sustainable drive and to increase their profit margin. According to U.S Environmental Protection Agency, reuse of plastic materials circulates the economy and reduces environmental impact if the material is in constant use instead of manufacturing new one. According to PEW’s research, reuse of plastics can accomplish 30% of reduction, substitution efforts by 17%, improved innovations in recycling by 20% and proper management at end-of-life can achieve a 23% reduction of plastic pollution in the environment.

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In November 2023, Knox County, a startup had announced the of AgroRenew LLC and had also planned to build $83 million processing facility which was designed to convert food waste into eco-friendly bioplastics. The company had expected to establish itself in early 2024 and had aimed to produce 150,000 tons of bioplastic annually.

Asia-Pacific is the fastest growing region in bioplastic packaging market with its large population as a contributor and its rapidly increasing industrial sector. The packed food consumption and the boom of e-commerce also gave preference to sustainable packaging due to strict regulations and subsidies provided to promote the compostable packaging. According to Department of Biotechnology, Ministry of Science & Technology, Government of India, the usage of single-use plastic (SUPs) was intended to stop by December 2022. The policy of Government of India (GOI) was changed to promote the development of biodegradable plastic products instead of single-use plastic.

The method used for testing substances should be able to demonstrate biodegradability as per national and international standards and should also be interim approved and receive provisional certification of biodegradability. China having a large industrial production had signed the Paris agreement to reduce carbon footprint and oil dependency as well.

Although the National Development and Reform Commission and Ministry of Ecology and Environment had plans to reduce plastic garbage, the limited infrastructure for recycling and manufacturing biodegradable plastic came as a challenge. The Chinese Government had implemented ban on plastic recycled and prohibition of non-biodegradable single-use plastic.

In February 2024, Balrampur Chini Mills Limited (BCML), which is a leading integrated sugar mill Kolkata-based company had announced a project with integration of ₹2,000 crore and it was going be the first industrial bioplastic plant in India. The company also stated that it had well-aligned sustainable goals to combat the climate change.

Driver

Government regulations drive the bioplastic packaging market

The major driving factor is the environmental regulations due to increasing plastic waste production which is a problem for the eco-system. The growing concern for climate change, increasing plastic pollution and landfill waste has led to the utilization of bioplastic packaging which is reliable and bio-degradable. The government policies promote the use of biodegradable and bioplastic packaging as it reduces the use of plastic and also its generation.

The government initiatives will increase sales, improve brand perception and also contribute to cost-savings. According to the Consumer Brands Association, FMCG manufacturers have adopted 100% recycled packaging by 2030.

Restraint

Limited infrastructure and higher costs of materials hinder the market growth

The leading challenges which hinder the growth of bioplastic packaging market is high material costs and limited infrastructure. The manufacturing process and raw materials can affect the production of biodegradable packaging. The limited infrastructure also poses as a challenge for the manufacturing and recycling processes.

Opportunity

Integration of Artificial Intelligence

The technological advancement offers new trends which are development of raw materials like algae, mushroom mycelium, and agricultural waste which poses as an emerging alternative. The major factor which technology can contribute is in biodegradability which will enhance the decomposing process of plastic and it also offers upcoming features like the antimicrobial properties which are significant for medical applications, use of UV resistance for outdoor use, and improved barrier properties for food packaging. Collaboration among leading industries can create more innovate and ground-breaking effective solutions for the bioplastic packaging market.

Top Companies Leading the Bioplastic Packaging Market

Amcor plc
Novamont S.p.A
NatureWorks, LLC
Coveris
Sealed Air
Alpha Packaging
Constantia Flexibles Group GmbH
Mondi plc
Truegreen
Transcontinental Inc.
ALPLA
Envigreen
Nature’s Bio Plastic
Raepak Ltd.
Tipa-corp Ltd.
Treemera GmbH
Element Packaging Ltd
Alpagro Packaging

Recent Development

Company	Balrampur Sugar Mills Firm
Headquarters	Uttar Pradesh, India
Recent Development	In June 2024, the Uttar Pradesh Government had announced to build a bioplastic park in the Lakhimpur Kheri district which aimed at increasing local economy. The bioplastic park was designed to promotes the usage of bioplastic plastics.

Company	Praj Industries
Headquarters	Maharashtra
Recent Development	In February 2024, Praj Industries had announced that its pilot plant for polylactic acid (PLA) will be completed by April 2024. The company will develop renewable chemicals which is a part of R&D push. The Union Budget had also contemplated a policy for bio-manufacturing and bio foundry.

Segmental Insights

By Type

The flexible segment is the dominating segment in the bioplastic packaging market. It is dominating due to its properties which are conserving resources and contributing to the sustainability. The flexible segment provides convenience, strong protection and reduces wastage of food and can also resist denting and breakage. Apart from this, it also increases shelf life of the products and the packaging is in demand due to its features like multi-layer construction and eco-friendly packaging solution. Lightness, safety and resistance are the factors which increase the demand of bioplastic packaging.

The rigid segment is the fastest growing segment in the bioplastic packaging market. It will dominate the market due to its properties which are providing protection, resistance and preserving product quality. The rigid segment offers a durable and reliable packaging which makes it preferred among the consumers. Customization and exceptional product protection are the essential features of the rigid segment.

By Application Type

The food and beverage segment are the dominating segment in the bioplastic packaging market. The segment dominates due extended shelf life provided to the food products and long-lasting convenience and visibility. The bioplastic packaging depends upon the type of packaging it provides which provides string barrier against external elements like oxygen, moisture and prevents food spoilage as well. Th global consumption of containers like boxes, bags, jars and pouches has increased the bioplastic packaging demand in food sector.

The consumer and goods segment are the fastest growing segment in the bioplastic films packaging market. The segment dominates due to sealed packaging and robust protection by bioplastic packaging.

More Insights of Towards Packaging

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Bioplastic Packaging Market Segment

By Material

Biodegradable
- Polylactic Acid
- Starch Blends
- Polybutylene Adipate Terephthalate (PBAT)
- Polybutylene Succinate (PBS)
- Others
Non-biodegradable
- Bio Polyethylene
- Bio Polyethylene Terephthalate
- Bio Polyamide
- Others

By Type

Flexible
Rigid

By Application

Food & Beverages
Consumer Goods
Cosmetic & Personal Care
Pharmaceuticals
Others

By Region

North America
- U.S.
- Canada
Europe
- Germany
- UK
- France
- Italy
- Spain
- Sweden
- Denmark
- Norway
Asia Pacific
- China
- Japan
- India
- South Korea
- Thailand
Latin America
- Brazil
- Mexico
- Argentina
Middle East and Africa (MEA)
- South Africa
- UAE
- Saudi Arabia
- Kuwait

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