CCK - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Crown Holdings First Quarter 2020 Conference Call.

Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised that this conference is being recorded.

I would now like to turn the call over to Mr. Thomas Kelly, Senior Vice President and Chief Financial Officer. begin. may you Sir,

Thomas Kelly

making Good President me On and the materially will as Kathy. Actual forward-looking is could results this today's Tim in vary be we release, Donahue, Chief such earnings number morning. you, of on statements. statements. With from call call, a Thank Executive Officer.

XX-K contained subsequent filings, factors release and press concerning information the including additional the our could cause and actual our in SEC for results For that to filings. in Form vary XXXX is in

currency the per for impacted per $XX quarter tinplate $XX pass-through and million of compared $X.XX volumes as steel million lower Earnings versus Net were quarter in costs. share flat prior year year XXXX higher of the of were XXXX. material as quarter prior to businesses, $X.XX can prior from to were the the as sales expected, offset the $XXX the priced quarter. inventory. raw $X.XX by quarter year Segment beverage in year-end was million versus negatively in below share by related income the the in carryover global $X.XX translation unfavorable of in Comparable the earnings were were increased

X.XX X.X the of of times At the net revolving was its billion and within over times. had borrowing under ratio liquidity $X.X well the covenant end quarter, between company in capacity balances The of requirement cash credit leverage the facility.

of of areas, dependent although the goal million, free is distancing spending some a on in capital and release, withdrawing discretion pervious social to have other measures. original that the approximating cash in our is discussed As do respect are our certain duration guidance number and guidance. we the $XXX our financial we flow With with

that, turn to the call I'll Tim. With over

Tim Donahue

morning to you call. on us today's Good for Tom. thank and joining everybody, you, Thank

health go you and wishes out and Our families. safety the to best for your

dedication their of thank the for fellow times. Before our want employees during I operating these to segments, all trying reviewing

ensure to not their efforts around that To and are employees, critical the who to appreciate our food supply products line, factory can employees. out and transportation of said vital you and food, time the to only to I and do transportation that. the in the we who and your skills joined can deliver you all beverage, is that hard products customers customers are is that in and day fellow inspiration certainly an then able efforts, any support a manufacture a there so on and are consumers our our first of someone and your ever work company Your services understand ultimately the world. spent work industries global are systems, there When day once me to plant in

when So, the perform great hard you feel at that many a really people. people, during fear with work this can pandemic, Crown only with combined have take great we and company

Officer, remain COVID-XX the distancing and temperature Among virus. restrictions, COVID-XX, Jerry have employee developed In and established safety of and enabled work coronavirus, for each the an primary under that the Operating action of our of early taskforce and may checks required their visitor our many becomes pre-entry our possible, the all leadership February, developed health to, Gifford, an our exposed of, exhibit suppliers now and and customers The has symptoms visitors a facility, employees to confirmed company travel from where social measures, concern. implemented taskforce. been Chief at when home sanitization employees diagnosis aware families, or employees, processes, plan we a

the our ensure that ventilators doing to against help U.K., business virus. equipment in in the C&B is in its is the Engineering, in participating companies, British build many country. the to National supply Health program fight Service can necessary Like part needed Crown to of a equipment beverage

to a help production X,XXX with already ventilator parts to of partnered shipped have an in follow. We with for the and additional manufacturer XXX portable units ventilators,

Additionally, critical PPE provide Mexico, locations in our utilizing printing division has Monterrey, its been capabilities employees in Packaging throughout XD Transit to responders to to the first company. and multiple

withdrawn quarter issued strong with and precludes uncertainty for first While performance from the financial guidance results from we the year. despite the the measures, any virus pressures confidence. initial distancing Therefore, surrounding us severity of projecting was the our have previously social reasonable duration

We beyond crisis we the the dynamic to will in but it the do currently, you tell what best businesses challenging that. makes our of nature see each of

remain demand customer points the liquidity primary grow adequate company. ensuring operate meeting focus Our of and ensuring to employee and safety,

on lead enhanced we you raw the down to steel We XX% volume more sustained lower pass-through the that All of unit growth is, single-digits, that cost, and remind line. year, will tinplate mid material value. shareholder offset last believe revenue than which, and aluminum down delivered from of

segment XXXX 'XX. discussed, million share quarter by was Tom income tinplate as from per carried into and first $XX inventories we impacted $X.XX priced Additionally, just higher or as negatively

Beverage, Turning with XX%. shipments accelerated American up XX% demand unit to in very North strong March, remains in Americas advanced America in overall volumes North the segments, April. and quarter in the

sold remain We America the expect in Northern market XXXX. out will

a is start-up in Toronto early the now January, line in shipments As of of until virus previously in late discussed, Nichols the began the while June, pandemic. result delayed the third commercial line third

QX beverage facility startup we the Green, ground a commercial in Bowling state-of-the-art can can X% Kentucky; and late announced sales in for quarter. were During up quarter, In Brazil, broke scheduled new XXXX. on the

soften occur nowhere April to where March, well unemployment and quarter their with that, consumers rising and spending more beer considerably. demand the XX% second below Beer in activity be Brazil beer Brazilian has channel. is prevalent a declining However, income and as the are reshaping and behavior and of this foodservice shipments sales were consumption in and down we in expect of social X% full the is month

contraction QX demand the and in short followed by for fourth in improvement is scenario base some Our quarters. third

despite although in flat U.K. we X% food through year. increasing and began increased civil situation in European quarter Italy, beverage operations Gains Turkey, the being unit notably lines month with a continue March first quarter prior first the quarter, first Sales the in were the were we most European expect both demand for volumes a will across in the of comparable to the down in second the see the A realized quarter month in plant slowdown in and the March, of XXXX quarter. can X% over conversation. against in volumes strong Unit

the signs point can to campaign annual fillers stocks. While to the look demand it's difficult full to quarter. can to from year quarter do replenish accelerate demand, second food for All strong in the of the we success first filled expect gauge as depleted demand

$XX higher priced by from into million First quarter income segment 'XX. metal 'XX was of carried impacted

so second shipments Southeast were up XX% through expect as country Asian Khae, Asia-Pacific to new the in in in year. Nong plant of the In in normal quarter and a schedule decline commercial of remain in China can COVID-XX, levels this recovery demand return advanced remains X%. March, in quarter that In XX% China the balance third to Asia offset to the China. while of declined Shipments as initial we the month begin operations The began shipments the X% on growth quarter, its X% from in Thailand year. Southeast in

year. prior distancing prior the impact but be we will Southeast demand quarter significantly be year social the below expect of expect lows do effect. improve takes still second quarter as the full will and from below However, in quarters, the measures gradually third second Asia We fourth

for offsetting lower Packaging situation. X.X%, the in To March tool were We the the Sales the the and the much period volume business quarter Transit performed our structure of declined decline with protective, currency overall we industries and actions first materials Transit lower X.X%, current full volumes are some better date, has pass-through for equipment with similar well of in of taking demand time, strap the serve to in we expect from X%. month align cost of do and Trends raw X% business. to and a some accounting to the plastic in lower quarter. of

quarter. Demand end of was non-reported demand with for shipments strong the in in continued X% firm American outlook for the businesses year. the the The North food first tinplate up is

these was tinplate impacted inventories by over $XX million income XX. higher priced of from businesses in carried quarter First

In challenging going year be to summary, for it's all of us.

year product, a addition our our we from factories XXX geographic history all In two more of that operation time. near wars surviving of global years world XXX truly across derive been our XXX diversity, for has than strength to people, countries. its Crown during company XX

day, is thing heard only uncertainty. I is the say someone the certain As other that

our debt adequate long-term have maturity essential deliver However, to generate liquidity to continue to to we execute very operate business, and a continue and profile manageable significant strategies. cash, and products

with And now ready Kath, take we that questions. to are

Operator

Anthony first Pettinari [Operator of Citi. from you question Thank Our Instructions] is

Your line open. now is

Anthony Pettinari

morning. Good

Tim Donahue

Good morning.

Anthony Pettinari

quantify possible channels? talked much hear And great or everyone's to bev up cans about or it foodservice to Tim, estimate voice, how of on-premise Brazil. and think You in end you your is

any the at you home, you see to and on exposure, generally Just maybe comments wondering if America? demand thoughts had translate North how on on-premise global especially

Tim Donahue

Yes.

talked I think I So, Brazil. about

and I think throughout that to Southeast characteristics the apply the Asia. countries like countries to same a Mexico lesser extent

experience the in demand so a just ship be will still Mexican the demand in America can States will and cans United the in is those manufactured, We North from slowdown we strong. but them customers, because U.S.

moved have volume to loss Mexican our U.S. those can significant expect don't the we because we at facilities, So,

I channels similar you Brazil we I As foodservice to would did because in being in prepared described of remarks, Asia weaker QX, do expect shutdown. -- as what Southeast in the say but demand all with describe

really European little glass several fountain, going restaurants, the we market, at a I in of slowdown bit pandemic market, because think to the there. only in on-premise typically are the hotels, Europe look you As countries probably bars, and/or exacerbated see

some So, slowdown see beverage in we European market. will can

but most then, as beginning beer drink States glass, soft is the mainly part now water strong scenario, but we as the are number category. carbonated United cans that's the the make exceptionally in and market products talked in is much For we an spirits, right inroads just and what discussed greater fountain you a the carbonated and before, anything to currently across on-premise U.S. explosion to in in the we've flavored and before, in of is see

America think to remain balance So, expect through this of fully we North the oversold year. I

Anthony Pettinari

wondering if the that guess in or within do segments you and just look on helpful. any across Okay, are early was similar business deteriorating maybe others, and I that's kind demand of better there? very view of stable, have April, expectation, which QX, would there Transit sort my then any been are into thoughts quarter, Transit, reads is any holding it was fourth as just categories, and further you to you up geographies is And the there indicated then March

Tim Donahue

Yes.

two So, only weeks we are April. into

we that have that we you. is So, one fortune bad The two weeks two early only the fortune we of explain good have to only of going is of have to weeks only have knowledge.

only of we knowledge. So, weeks two have

would the April So to the of far April, first first two weeks trends I in March the in quarter. are in say similar

expect do some we However, in the softening business.

business primarily a Asia-Pacific it's India, notably support because think business steel operated will and I largely largely be out is a impacted. industry of the certainly business that be softer a will and

would are They other The well up you for lot up extremely that companies. used are I strap, consumer say plastic protective of know. businesses holding A well. product actually is holding doing quite as well.

doing two markets first markets to steel strap block we haven't of in other soften autos, but that, white make stools things seen we Signode, Equipment lumber, although in serve quarter two contraction and like no end like especially see well, we April I brick, of it's performance little in first holding but most goods, it construction, the for are will and tools, second yet. in the up expect a weeks bit, We expect well. weeks, steel although for the equipment soften, doubt, a

Anthony Pettinari

over. Okay, helpful. it turn that's I'll

Operator

you. Thank

of question next R.W. Panjabi Our Ghansham Baird. is from

line is open. now Your

Ghansham Panjabi

so everybody. Good morning, much. Thanks

Tim Donahue

morning. Good

Thomas Kelly

Good morning.

Ghansham Panjabi

as a give mentioned the and March, Hey, were us so, some basically of in you March, do Did occur going give countries, on? I after behind, countries, more the those is Italy virus example, Tim, U.K. and couple wouldn't why little the you a What beverage, slower think just some then you us see that can acceleration that color saw was just month European for in bit initial as hit you U.S. think in decline and on context. well an some Italy? if that more you of the of that

Tim Donahue

we quick, as reasons, the real store is don't level number just like or Well, big kitchens I like and beverage the stuff don't reason of space U.S. the think storage I don't for have simple the and real loading food, -- think whether a pantries pantry and it in have in they occurs of the we the to it's does U.S. don't garages do. do a they big Europe in

the in virus City. New certain think more I say impact that let's even communities in than of the Europe significant York is

certain are I of to have that's the the a throughout social So, certainly one the or in safety In the been maybe do the particularly well region Italy, or Spain this. things being employed regions it's New spots, seeing that's hard and with Parma you done the community help. will is others has net some and that approach had whether of virus by countries York around in we many there world, are United not one Congress a in that, think States but the U.S., real around City Europe Milan, Lyon U.K. challenge in that the in and Paris, been are in hit, there

So, for was unemployment never decline most going you good So, mass expect to see of you're consumption, be consumption areas in world, policy unemployment. a where going to of right? should to mass Ghansham, the

the don't oversold need time people and home. really was up any and place they I and distancing into and to market to in works period and different well coming still States year, drink, still be will market of difference here, consume, the in but works can things to drink, see social for considerable people we at eat find cans eat currently. in let that think with expect I shutdowns is and the beverage United the

Germany at the Europe, expect we I think different, other from us in rural U.S. the London, most wealth get in mean of in Netherlands. areas look So, Europe little is in to the big Paris, than and that you that poor and are the of we level a cities disposable about parts and of like Europe, income States. Europe, Whereas much Europe don't change it's Zurich, different situation not as United Europe, in are into America and of Madrid, generally outside people same I accustomed the countries the we

hits unemployment areas. in those really consumption So, quite hard

Ghansham Panjabi

beverage from any then back we just Okay. that are there second for the -- you a my far? U.S., there How seeing is SKUs, to are standpoint, shifts keep material, impacting Thanks the of from for example, have new delaying so narrowing can terms PPG you specialty And question, you about their know, big that high-level so companies versus down what that products. just much. are traditional sizes are in seen hearing

Tim Donahue

in we we we've I labels seen in Well, them. had might difference Ghansham, a them, to labels and but beverage is that have down run don't labels, think large if a four generally what can seen from for XX a so, producer we running difference different be sizes, the

lines. output, maximum maximum get get they the in can we So, and can filling output

that's So, what we're seeing.

Ghansham Panjabi

In cans traditional? specialty versus

Tim Donahue

the seeing and think same we're general traditional, specialty I mix.

Ghansham Panjabi

much. thanks Okay, so

Tim Donahue

Thank you.

Operator

Thank you.

Bank. Our Jones Deutsche next of Debbie from question is

Your line is open. now

Deborah Jones

I understanding question. and what the see would challenges U.S.? could just transporting just cans and of to summarize to the your if there you U.S. or situation taking kind them Thanks start morning. currently, for any is you in then my expect of transferring Hi, wanted to Mexico the the good with

Tim Donahue

So, initially have the channel right significant product is of that. beer non-essential in government deemed industry, -- now. a a reversed Mexican There overloading the it is they

consumer, expensive a than staples like we'll financially, like Brazilian as markets other the drinks, Brazil, consumer and little soft like Mexico, and consumer, glass to and Mexican in returnable markets beer and the can and it more and beer drinks that. are generally to products the a beans to bit in opposed look other buy As soft to food similar is and strained rice

with Mexican States. So, time a and Mexico difficult heard beer That to North It is start you, the little the takes the to fortunately, you've strong, the are production producers bit Mexican and right take very to exceptionally see we Mexican more however, border. explained begin but up to the not produce we the we've from are will specifications. from for now, United able lacquers demand, internal demand it's cans the is American to across consistent as others, and to labels think get I

from U.S., qualified the readily the customers Mexico our all in from to we're and So, to move we're locations, cans into our U.S. able Mexican

Deborah Jones

schedules Do on have inventory? then kind how you do to question, manage understand this down this the my focus a production than you in did areas where in your thanks. to you seeing shut Okay, time, at kind I'm And given second some And of weakness facilities? the unprecedented COVID later? like things you you continue risks the level for or you of have environment? if trying Brazil, are expecting you sooner you at produce bit rather of same like in little situation. this case Do any might

Tim Donahue

be so I say say did clear, let's it. it, Yes, didn't Debbie. I If I thought

back now, I Looking notes contraction thought didn't at describe a little, little Brazil. in my a I

it contraction. I described think as sharp a I

it. Brazil. So no severe let's a is about There mistake decline make consumption in

not making are running of of be cans building making cost, right are we nine have we're sake going Brazil, just inventory I the not We if sake we to the them of inventory. to cans might absorb for think two can build in probably, we now lines, for

season but for the low, up and a us and again summer it in operations. months to a curtail will summer, it's Fortunately, spring in the are we QX, low pick begins Brazil

before bring off, cost. under we'll the Law in Employees utilize our summer later to to will take then We to will Labor demand or look utilize months vacation back laid they're picks Brazilian them and what we're minimize allowed up. as temporarily

Deborah Jones

Tim. helpful, is that Okay, thanks,

Tim Donahue

you. Thank

Operator

you. Thank

America. is Our next Bank from of question George of Staphos

Your line now open. is

George Staphos

accounted and switch a I talk all about transit Good you're COVID, for packaging. wanted Thanks a doing gears Tim, for everyone. bit Tom. bit and everybody morning. Thanks, to

heard you taking I revenue Could correctly, about think mentioned you're I uncertainties. to you and some relative a that? if obviously margin to couple additional interpretation bit follow-ons. my manage actions. of was the I that further a guess it And costs then talk

Tim Donahue

year. Vegas you I you're aware because George, in so last think the Yes, show attended

We ongoing have cost an process in categories. reduce specifically to G&A the

We the are the under of industries how as across a go industrial to number protective and and to the we the we've one platform separate and at opposed platforms. products, businesses combined market looking industrial of -- two management

and will see -- I to expect that's markets, supply one. we earlier we the demand So, see expect. in end Number as as we which that's two been number we certain soften, and ongoing, two, would number described as continue; you of

will furloughed obviously they're employees employees do, but franchise, healthy We first vacation and what temporarily furlough to have want to It's the we'll not and take then furlough, the entire minimize costs. look doing. for it's necessary we're that's you before something of first to or

George Staphos

what No kind undetermined -- but least earnings talk is have and of absorber can't shock course at [Ph] course I year, is still or possible you comment, juncture, about not there you types way this to of on size or of actions over this guess, the to to from these the at that maybe of form?

Tim Donahue

they contraction than anything like near that Yes, but to was described financial look period say I think that to at going the -- I XX% far prefer 'XX the 'XX they the and then. to that I Signode we think don't level about I when as crisis experience as today and not 'XX that in and with was think different something it form, XX%, the for full-year, it will have EBITDA contraction to in business concern to had 'XX, most you we've of we're the people at this back it is talk look following, I

contraction, significant to. there we'll I know, XX%, However, don't but see comes that XX% a now where is it will out be

George Staphos

on in press review somewhat question. Okay. had but make portfolio And comment the release, probably our point be helpful, able at had stands just mentioned and you you that from likely pursued, less we're on then because this advantage like thoughts can any you to and entering COVID would all the one recession last would be the where something

Tim Donahue

Sure.

marketplace I be the could - they of not is do there review work whether have I from behind ongoing. still that process scenes, explored. that is the corporate going things, doing think done or the be which several home everybody have we to we mean lot believe can in processes are or a a we're there So, a could at work

So that is ongoing. review

like think we and have it I about capital fortunate flow lot require of market businesses flow, little thing that very talked cash cash we've this, the generate that before, a important, lot in a about can of exceptionally talk a is things, talk we to companies of they're were a of about and fortunate. but lot we things, be lot going to and the

stable cash we have and capital have a have We very structure. liquidity, flow, we

protect are value we're some So the opportunities, the the that work to be business for but business the when and run to behind we and exploration and employ we're to going situation for doing that the a see continue scenes work doing of allows of we'll currently in to franchise the where grow if ready businesses, environment. we those

George Staphos

one worried Europe perhaps and can about little Tim, and if care and I a for mentioned where or missed seeing and any from paychecks obviously that April their customers you Thanks sustainability quarter. is in in change, a over, you the environment people your it My last bit rate entering they it, and own Can are are thanks elsewhere apologize. comment run that. cans signs and recognizing luck in good volume what on wellbeing. and you beverage about for the more less I'll Europe turn lot I Hey it

Tim Donahue

You asked about Europe, George?

George Staphos

table? more and Europe, get run more in trying care consumers -- about customers less then the Europe but, and they're food sustainability when to do worried rates on broadly, about then and

Tim Donahue

Yes.

were quarter the for mean, we up I double-digits. So

were month we X.X%. of March, the up For

in down of a numbers, in saw and numbers our demand. the the April, looking at. going order more are XX% see of We're Italy, production I we'll be production the I that just production, government at and markets, you're trying Turkey, quarter XX% I a as we probably Not that's to because U.K., probably second April to we're said, reflection think in several to down or So demand I expect, when match contraction absenteeism. we're of foreclosures reflection on the down look

We subside, in levels but decline to factories, and on and in in beginning food have absenteeism of approach beverage and now. that the is balances historical right absenteeism starting more Europe, some had both significant to is

So the about you a All know, tremendous we three we probably factories, running I, factories the phenomenally are that the Jerry globally and this fear day. considered, that face things doing a times of face. talk workforces have are the or two job in the they

feel about this we actually that, pretty demand but is so and good is demand So, issue, slowing.

George Staphos

turn I'll over. you. Thank it Okay.

Tim Donahue

Thanks George.

Operator

Thank you.

Our of next is from question Mike Leithead Barclays.

Your line open. now is

Mike Leithead

guess Good look guess I cash working first working question the has and seasonal started. flow I changed on bit sales capital the a year since a fairly outlook build, capital, typical obviously Thanks. morning, like but guys. XQ

in a So with, about fluid help base but the it's you'd you that target, still how just model, think expect you think just getting can year? us that how maybe back this would about seasonal throughout unwind year? Obviously do you your the cash

Tim Donahue

Yes.

I cash really our duration think of to on in can do gave going social base depend you. distancing guidance to that, talked we we're to stick So, know, It will these everything you the we the scenario. flow Tom measures original

governments be much to the close of around the We measures have by various the are -- quarter. the extended we we through believe the second world will what end

in and quarter. of that third easing some fourth We quarter are expecting

shortfalls businesses, across We whether line offset globally there described flow, it's we with international CapEx significant some most that the we in be comfortable largely ability feel we'll the within lines, that various have the is as and is. to beverage and number or still to the expect the down this actually our that, see strongly and cash cost we've of that cash cash believe so come flow what and can demand to business clearly to flow and generate beverage of of would year discretion you across the accordingly. EBIT come down So can global going businesses and the we in much

out in fair a by In terms seasonal pretty going QX, of I still smaller smaller number a see think QX, probably a come the the build, build year. you're probably in recovery balance of on and but end the to to

Mike Leithead

Got you're are up understand North returning XX%. helpful. I And more it, or soda and about Tim, whatever. I drinking can't sustainably between XX% volumes to cultural saying regions beer just beverage, people then and what guess consumption with America's differences that's imagine helpful. American or I the that's

So I pantry pre-buy how factors other guess, do loading about that? you like think or or

Tim Donahue

Yes.

third in first is it Mike, XX% the new certainly and last you growth So, online at mind just February with would and all in that the nickels fourth do I gains line. growth but smaller as looked guaranteed that see so, much XXXX have it think because the comfortable the and quarter, full-year, second the that greater we year, like keep coming capacity the quarter, fourth we like and quarters we'll knew and describing that fourth this felt first be in percentage than in but and we are quarter to than or a experience the at greater we a Toronto in and quarter would October going third some point we year, third was where we of whether

on when So, XX% don't think see cans, we're manufactured outsize I of the brought this just have year that. on think but we'll restaurants, the capacity, and believe product, where from products brought the kind that sized year-to-year that experience do soda in is that and of which the be capacity because larger but still depending something the numbers in -- XX%. I any they're I going that market more have believe buying it they're we're in full-year, year, house, why U.S. the people in PET buying not consuming pantry, and growth I is well don't from we're fountain was growth stores flat to we for are consumed. to an bounces it where it's they're XX% the I not gets - others I close very to go to on firm. their do versus pantry, what but see brings going consuming to capacity proportion reason think likely don't not on that a going I around who year

everybody's pantry children about are the they think everybody's and want, is home thing when school, grabbing from what from children you my are nothing know they one going the school, to they want house, So home it. in about and children

this is be I So, being is to continue extremely America to going consumed stuff be that robust year. balance North the of expect throughout

Mike Leithead

you. Thank okay. it, Got

Tim Donahue

you, Thank Michael.

Operator

you. Thank

is question Arun Capital from next RBC Viswanathan Markets. Our of

is Your now open. line

Arun Viswanathan

we to bucket Great, thanks and Europe is as especially moving volume my the Good but morning, of Obviously, guess you're it Asia-Pacific. well. cost and question for right my and now, taking I that all for a imagine guidance. other of were was thanks lot main in say changing FX, things and other question. Is into if the are price first on cans? that would and I for right out volume beverage area uncertainty, doing

Tim Donahue

Well in Brazil, right?

Arun Viswanathan

Right.

Tim Donahue

Brazil predominant earlier, is we going is the are of those in prevalence mean the or we because hardest only see of beer of in the the I as that nature to service food be Brazil and Asia channels. Southeast probably described the consumption Well, hit the, markets

that have I compared or kind and in to month the to kind the be vacuum metal conversation handful the prior what with hold we is how are we speculate products where year, but be early of have to expected you would Globally, foreign to what and strong not largely in we we and segment big moving volume see going and do thing, of as of but volume, so the for big largely America know I'm we baby our as well, for enter and of, very impact currency nutritionals is, I a of to said years. North seeing we're up million bounces year last currencies factor to a everything closures the going know about not food we quarter, around the dollar we know, currency be income, now, compared say versus were is we where like like condiments the first what to that it's February to don't well. So to beverage, aerosol cans muted tell because prices talk and the know adult on food price price was we quarter we we're don't hold We'll exceptionally you trying and to like right tried going food. up March $X

weaker, and very in and but Some then the Arun, Transit That's some weak it's of the businesses like uncertainty. be volume, it's now. some Europe Brazil, in will will beverage volume right up Asia so, will Southeast of parts hold be markets well, the

Arun Viswanathan

or ongoing should And there year, just do from a or kind your maybe of kind is program reduction we that how cost operational expect that of about within target announce of kind system every you opportunity? larger standpoint, a to you think productivity

Tim Donahue

Well, we XX at problem are point. month not some expecting this an to be

how we'll virus of willing the Social you but cans see force and contact future, thing going the need in process. get to these they beings some with bars face life markets any into customer that in to prepared in global a simple and are life, support geographies to do to beverage the many be back other to in normal and the consumer they back tell population base and human is any here, other to those demand. get our distancing or we're back with still may going measures to get globally is they support I this at point we to fear go not as manufacturing restaurants, one close so have to will full become events are regard or eased across sporting of be lifted

it high beverage people lot need workers. run plants skills, productivity, we is You make but to train to them it and whether them highly go, we're. automated, and or those let skilled workers end you, of want go you and and They we you invested We've on highly have the decorator, we're skilled. to that have efficiently very let to automated a time a not are to no are appreciate and our understanding through if looks about front walked work can fellows on lines the on fellas the real those hesitant have mistake, it's very that factory

you're place, a beyond and are headcount there is things of requires would but in So, skills. do that's that we of what be something can't and the that reduction, in can the describing equipment afford some high do, much you much to -- business

with the to look will when we but their and prepared we sanitized prepared need back customers So, can, do keep maintained, factories come and as as the requirements. much the customers demand we to to keep the support people

Arun Viswanathan

year next plans then a that if plans guys planned Thanks. that? look you though, longer-terms, to just so and your should we or on of on any delays just I you investments lot this any for regionally, thoughts Could on and guess Understood changes year. have expansion you there expect elaborate, point, your

Tim Donahue

think to I we're the that $XXX spend that the capital to you growth previously, inside we gave that capital was million growth So growth capital capital. going number continue the within

the only at We delayed pandemic. line the are nickels because on of third

just their the of Some able New been conversion well, April. function in to bring were to the lockdowns early OEM That's and steel site delayed. home conversion from the up to that's and a to early not June in in sometime aluminum working to Seville, as We place, either complete as their technicians through we're done that The way don't engineers lines of specific reduction, can some the done year. the the may reduce ahead always and next expansion those discretion other next beyond or being all cost items, on discretionary full everything have that function all get year. be engineers year other and engineers that get reduction capital able we we do are this steam expansion, but are projects a we and to but where cost without on can country this we cash we the of just scheduled also get not were probably get that's will countries York We'll returning engineers our until preserve of both and we year other there, or put in try that. to and

Arun Viswanathan

Thanks.

Tim Donahue

Thank you.

Operator

you. Thank

is Mark go Montreal. from Bank of ahead. of question next Our Please Wilde

Mark Wilde

Good Good Tom. morning, morning, Tim.

Tim Donahue

Hi, Mark.

Mark Wilde

larger little recall, any to kind also can Tim, is headwinds the the amount there's carry second it around over than like and quarter? non-reportable, whether of a a I possible more and detail seems it Europe then in inventory put into

Tim Donahue

to I down, the fourth up about have little be way this think quarter liked a would I the little $X.XX historically going when be back has higher happened higher had a of it gone. one the be or season with so million lot we I'd now last in second poor into dollars Europe year, otherwise came from inventory couple a year we or probably only said because $X.XX guide, was like that that. say more than was a with the we inventory there's there's Mark we to and than than most and would have, and in other but $X.XX, prior-year than and going it's more bleeds that's into no lot when quarter, year it turned more to out a the Maybe European this foods,

Mark Wilde

wondered some there's food I Okay, what just come. there noticed staying for of million that was and in with more kind and European and I if $X involved to restructuring Europe, also about

Thomas Kelly

from in that food transit now. protective businesses talked particular we're on the focused and in ways in putting with where the European it Mark, area, so that was restructuring about arising the any wasn't industrial some Tim one in

Mark Wilde

from the hit U.S. Mexico, about of business Okay. I potential wondered to about in ability then, the export kind down to talked there. into down Tim, And glass sort you the Mexico of cans the

Tim Donahue

Yes, great question.

difficult be will furnace Chihuahua impacted pretty little glass glass have State, certainly in is one that border. much the more and to U.S. close we so move which a to bit So,

the truck, The was and Cans are wouldn't cans in difficult. U.S. required other move unless glass your use very bars than restaurants, cruise, consumer get Not difficult, probably facility and easier much west but and is very not glass. than required. to anything about of certainly to hours it's very more at home expensive now consuming possible move and it to by more U.S. two so to that is from direction the in will the there

of I to only cash be on head think that, top preserve I the consumer of possible. maybe budget, because home their my in is the fillers XX% So Mexico, side to back glass ultimately and up but the give we to factory was probably on in in might returnable much do on front the expect it can that looking cheaper skewed run largely towards side be the if the glass only it'll Mexico, a who of will when think come of glass is can XX% the is to I side the much as on you budget productivity as off we number try

that little see in Mexico. in we'll a consumption quicker Mexico So come back than can

Mark Wilde

in quarter, might just Tom America's a last if wonder was Kelly, quarter? costs get Okay, expect had terms during the I beverage it's of startup during one there about to second possible we sense first how in and I what much was the

Thomas Kelly

business have of business, real good of have one don't, had things, some have that average quarter, a quarter. the Mark, quarters and of them depending them on of those the some some a you businesses good really

have didn't those I right to with we you. don't of forward things be it's honest So one looking go that kind of now.

Mark Wilde

in sounds the right, of year, luck All Good good. the Okay. balance Tim.

Tim Donahue

Thank you, Mark.

Operator

Thank you.

is Adam question Josephson KeyBanc. of next Our

Your line is now open.

Adam Josephson

morning. good Tom, and Tim

Tim Donahue

Good morning, Adam.

Adam Josephson

are your hope well families you hope I safe. and and

Tim Donahue

as and you well. you Thank

Adam Josephson

Tim. Thanks,

to volume back moment. on Just for a

of us and America two that I'm world, regions in and not or quarter the growing, could relatedly Southeast the and not appreciating Brazil, U.S. situation any just America think the give putting Asia and side just you as Brazil next it for strong that Southeast opposite margin Canada, and it you're level, you're is here that my is So on Tim up, of Brazil, mix North and what of given talked about there I that's you're the for I guidance same the being margin nearly higher balance or in you can the capacity moving just fast North and in in your assume obviously thinking it's Asia order of be XX-ish demand impact looking you magnitude you're recollection the given are? year, wondering Asia as for Southeast giving have a call two margin the how at so kind and

Tim Donahue

or margin were to such somebody margin saw better to improving, are think we haven't else. question, February want this something. to say me demand pleased the in answer not talked in profiles we margins made investments I as prepared question. are not somebody's make to maybe with but Ghansham and the to, America, give this. Europe, I the we're We and about in where was your just quite the you America, response, we North I'll talked about We in Yes, past. where opportunity North going investments it profile

have businesses Brazil globally. So, are you margin I'm I at confidence improving demand kind enough the but but I of in to really to but are that some will Asia of don't looking contraction, Southeast give margins have a it I in give don't number you, in and both want to are here, have number better that be of North terms the we it America, you the right, significant.

be Just keep that in significant. it mind, will

we in the whatever we half, of we two lose have said markets markets, are Southeast at a us Now, as have that, well. we and those cut then we in participate big income two partners minority markets and line, Cambodia, having interest markets, in big of the XX% for so Brazil, in significant segment we both Vietnam the participate and but Asia, in a number

muted EBITDA of So at the because and share of interests. on the one per line declining net earnings impact the segment it's obviously then line impact is but income minority or income number

minorities we results then locations. year be year those smaller the pay the this dividends cash that ultimately, are only be the in and expected next to to So, in will smaller because

fact that minority impact but muted significant both of that a those the with partners. share by in So we areas

Adam Josephson

beverage, Asia you you of because any where two industrial them are you visibility is Transit down would to pretty be but about packaging economy. one kind be the rank like Asia-Pac America's everyone that beverage is and down get year-on-year Yes, think others, European of and Brazil of could and because just could Tim, thinking Yes, the sense? when situation, else's Southeast most in situation I the that obviously the because then then, of limited, likely your XQ it XQ, segments totally appreciating on transit

Tim Donahue

and think I non-reportables to flat European food Well, the be up. to are likely

could you Brazil businesses think them, it's or because beverage the in if America's there. I had got I rank take I to beverage think

Adam Josephson

Yes.

Tim Donahue

America's numbers, right? or beverage beverage, and than less Asia America's a all guessing similar but bit down here, European little I'm beverage, down Transit

Adam Josephson

thought on I understand. one One balance just appreciate when of buyback back your the more if totally I and last that. any sure. quarter, about in the the of year? you process you bought shares the you're on talk for what can was No, kind and planning doing

Tim Donahue

to else pandemic the should anybody -- or we or concerns shares We might maybe numbers the shares. think how we I really where believe before guys to we had It was that deep cause this Well, before we contraction buy going were Yes. use demand. you some thought trade. opportunity understood lower understood all a it and lot than

got more set board average authorized to never of an bought at but stock wanted we not We we're be about to of million $XXX any buying year. shares different stock million. where The $XX enough think buy. did other back think price $XX, we we the than going levels this worth low I I got

the we the, this duration understand until think going pandemic. look are and to I other to most we preserve liquidity of companies

Adam Josephson

Thanks, Stay well. Tim.

Tim Donahue

too. You

Operator

Thank you.

Our Brian Sachs. next from of Goldman Maguire question is

Your line is now open.

Brian Maguire

a morning, a guys. and Good Hey. Thanks of business detail. cycles through Tim, different the for lot different you've all lot of been recessions.

one the than recessions? different coming you beverage other one one seen in this ones that food look see either recovery early you a related cans like the words, Just wondering or be some negative permanently or and that note, altered some any behaviors say or in than get XXs, or this expect In be in if 'XX you 'XX the on the thoughts out two do or might would think way you could consumer kind this do of of for positive have of could ones those like we prior kind will how from and different of being cans?

Tim Donahue

I've you out 'XX, in was at to we the all 'XX, how well, recovery was through certainly It because I pretty for out other is were and you I pointing our V-shaped. where these been was cycles. some think, business like 'XX quick, right took something banks I'd businesses, at since 'XX Seriously, in am blaming of you and Brian, I think and and nobody's financial everybody's Transit that the control. guys Well, No. old anybody thank looked wrong. back this doing a brunt the that the fault was around. is anybody whether that's don't or for of crisis, of time This whatever, blamed kind

this a one people was in recovery, to to was your So in to of of certainly question. it sectors. Does that, little a at That time answer but industry. uneven 'XX, together than fingers think all doesn't We opposed wasn't a wanting going we're some was burst years, more XXXX-XXXX when this really their other bit to kind point a regards couple want took as just across it 'XX assets was longer it? U-shaped hear, wouldn't, whether I things come that. and a challenges V-shaped, to and dotcom it's bubble be back, overvalued businesses of across

the going unions high XX,XXX, isn't more parking at work, want a in because with game, does a consumer there that going - football a friends to lot that going all ease, to bounce other standpoint, when they quite being having believe other concerned have to to U.S. and to businesses, see really little a to shoulders and people a if back right very congregate now, little that to and are competence we're a done that to and time. to this be or and and looked there to competence each are together really that think to answer, need country Transit telling, start a that's This but at is spend do from than see, I'm don't his that'll together baseball want that's the drink hard people sectors I to manner and need other, we a recover. our that will socialize example, rapidly now construction get than are some others. lot take in think rub only for are whether each back get I in I something I an I to and be maintenance bar want each come smart when very we're going are know things go Brian. be be stadium, longer. but are not things nothing and I'm crazy and slower going be and back to five at V-shaped concerned is when are get they I more done some are do with a there whether other, and the with then enough going NFL fan some of and other that good money,

know. don't I have for the I'm I answer you. So don't sorry.

Brian Maguire

Got it. a of sort That's fair. time. It's definitely unprecedented

question I Just the one last to guess question. related just inventory

in much kinds looks in like the year towards growth business we seemed first the and be well seems of we into significantly. the amazingly expectations and it like down there with a own asked world February, the March, end about it numbers April production full talking hit your seem January, this Somebody then April, much wall running of industry for good volume and of of were earlier quarter, out March you're brick for doing to globally even

have be correction down wondering demand actual you Brazil, some specifically maybe didn't in the people beyond just in too destruction heading inventory inventory and just like Asia, could channel in Southeast might bev So if the inventory there look there? much into might so cans into period you what assess, the needed this, and know, in whether key level of

Tim Donahue

a of matter was It practice.

but we're some and as Our a you water out problems few tell me America, and in larger a try times to was or a can stores North looking they certainly be in channels that markets stuffed Brazil, pretty said or customers Asia, to sparkling I those call, multi-channel inventory. locations, possible. keeping money whether the money fill beer consume frank in protecting went North we I the now went it terms can all to get I as is and -- where any their the you to are specifically, and not the have retailers in we've was empty inventory no don't more their They're Certainly social have -- stocked families. Southeast the opportunity of as having they as of keep spending they're That's the them America, sparse. yesterday are and having feeding things important congregate consumed and they just they're having which as concerned both they families their on elsewhere channels settings buy quick past. in one not conserving and this they supermarket, right in and have the in I they're to to tell consumer to would they to are said tell it let's Mexico, the had I in money for

don't full So that's companies beer curtailed the I production, they that large and in their had need channels would they why part, curtail production, the the and say are packages. as

Brian Maguire

everyone. Stay sense. color. appreciate And I the that safe makes

Tim Donahue

Thank you.

Operator

you. Thank

of Wells Our is Gabe next from question Hadey Fargo.

open. is line Your now

Gabe Hadey

thanks Crown Tim, your gentlemen. the wishes morning, same Good for and and everyone at family. well to

Tim Donahue

Thank you.

Gabe Hadey

food in and you regard in terms migrant a to two in their from of off just few and was I've workers to curious season, if planting European about wanted I thing harvest planting? inability anything talking ask coming for crop I yields of mentioned the and you've borders articles cross your heard and One that customers about, consecutive years. two read their pore importance

Tim Donahue

out I'm else see glad I am. Gabe, somebody reading there Well, to to like

So, heard this we've customers. from the

we year, come damaging, they that migrant rapidly pandemic seed (b), challenges, ask into February not seed the they the like requirements to to they talked and getting and the response contracted of being was come for and to for as what countries started number the where the January, planting (a), their initially country ability lines they virus. get from able was and would had them and be their thought needed early be extremely for more, United countries virus in Europe, Spain they cross already had France late would initial their Spain to and like States, throughout that with they harvest a two workers, (b), into and not customers thought QX to willing France spread of the because (a), workers the or, either So,

plant. believe than they're they more initially going I budgeted So, any don't plant to to

So a the XX% more because harvest where have we're we've still going to last be to but opportunity not be to they have would year than on a year. mentioned. year, up it's product reasons of going firm they the believe thought We to I going just they

Gabe Hadey

the suggests All American remind because North guess non-reportable, obviously right, Food, we're you. it's you then in question I at us a Nielson product And now and that last were doesn't year similar benefit so necessarily it packed up data -- those American you thank Food mix there your looking can this North canned because vegetable end-market can or curious but year, sales XXX%-plus, mix just for on business? your mix

Tim Donahue

their cat food before It's dog People and Pet been will right. feed Yes, an is big feed strong, has in pet real their food. one, before vegetable, so themselves. interesting soups. soups, we're as very they'll

balance through a are to and I it's and some the pets, in a primarily don't we third, balance much Europe. like of think bit fruits some end as mainly North but continue are fish America, cats, well probably and we're little XX% but that's We're other to as the not XX% of say A want markets. three third. third, of very flow soups, vegetables year. little things products that, vegetables, dairies the The a the all up and a bit, and I expect flowing will

Gabe Hadey

roughly model around be interest it last Is XXX Tom, I my to you, was one with Thank rates, It we moving have lower one, something than guys had or you quarter. now there? And this a interest Right. rates. new expense the guided think view Tim. do XXX

Thomas Kelly

I hasn't the rate, capital it the lower Gabe, year. ballpark with is and Yes, was been XXX build think in our as large working as last

down So little as well. that it balances a that

Gabe Hadey

luck. Good guys. you, thank Great,

Thomas Kelly

Thanks, Gabe.

Operator

Thank you.

Kumar of last Stanley. question Morgan from Our is Neel

open. Your line is now

Neel Kumar

taking for thanks my Great, question.

the seen Given to decisions to environment And cans versus expect aluminum of to the view decline we've aluminum? in how cost economics would general, customers prices, current switch do sustainability-driven you oil that currently? PET substrates perhaps you the delay in by

Tim Donahue

versus the time believe that gas shelter-in-place benefit out. bottle likelihood Having PET specifically in of better over remain the to of said oil a for longer, product in in medium-term they're we cans decline remains or stays the consuming a effect that because the store certainly think will consumer the cans of America, cost though, as the period time, and inside for which continue I and in PET leaks Well, load concerned the to possibility North with duration on home up the more orders the package better at and competitiveness of that much some maintain cans. will going is at home, integrity the leaks

don't I right is because virus the now on think making So long-term of or anybody sustainability decisions oil.

think and we're the and safety product I consumers all -- and and of deliver customers item of ensure we the to. the our to business that employees, health our maintain is first

more line. it's environmental the lines probably along So than social the

manufacturers staples out food most discussion, customers other world. environmentally can I they I support as to you've PET think and that consumers for right the on believe, the now there, think consumer far around and we'll the others the and but it's continue by we all and have and say, product the heard us sustainable can to the is be and the manufacturers in or retailers other whether ultimately of hands plastic their deck the products, that

Neel Kumar

sense you there take-or-pay context. terms cans on, terms new Great, that And yes, of could beverage place? volumes. us helpful your capacity customer in the in are just just for any equipments how arrangements then in have of other bringing give Is a that's of of structured some you question, one you're

Tim Donahue

call. not we're Something to going talk this about in

Neel Kumar

you. right, thank All

Tim Donahue

you. Thank

it. Okay, Kath I think, that ends

July. you joining much. today. for thank very in speak Thanks So, call That'll you conclude We'll with again, the us.

Operator

your you conference. And participation. Thank that concludes for today's

You may disconnect. now

Crown (CCK) 21 Apr 202020 Q1 Earnings call transcript