Crown (CCK) 20 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Tim Donahue	President, Chief Executive Officer
Tom Kelly	Senior Vice President, Chief Financial Officer
Ghansham Panjabi	Baird
Mike Leithead	Barclays
Neel Kumar	Morgan Stanley
Adam Josephson	KeyBanc
Phil Ng	Jefferies
Mark Wilde	Bank of Montreal
George Staphos	Bank of America
Bryan Burgmeier	Citi
Kyle White	Deutsche Bank
Salvator Tiano	Seaport Global
Arun Viswanathan	RBC Capital Markets
Gabe Hajde	Wells Fargo Securities
Adam Samuelson	Goldman Sachs
Jeff Zekauskas	J.P. Morgan

Call transcript

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Operator

Good morning and welcome to Crown Holdings, First Quarter 2021 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,

Tom Kelly

and Donahue, With Officer. President Dale call on is Tim and good you, me morning. today’s Thank Chief Executive

you forward-looking www.crowncork.com. statements. the on have we from will in don’t such it a release, results If available number could making is materially of the earnings earnings our Actual this On release, at be call, statements. as website already vary

through favorable were Segment the in sales in earnings all to actual the $X.XX XXXX. up costs translation and Additional XX% SEC higher we million charges per in volumes $XXX increased the the from quarter across pass to primarily results $X.XX vary the could for in information Adjusted to higher the concerning our in per and factors is due increased to non-recurrence to quarter. prior XXXX foreign $XXX million currency filings. in due in price unit improved Plate and volumes, quarter to press including primarily $X.XX cause prior release were for of year the and material our that share, share quarter, $X.XX filings, favorable Net the XXXX. contained segments, compared Tin quarter XX-K year, Earnings carryover year, to to compared the prior in Form in income cost in of the saw mix compared costs. sales the subsequent that for

estimate results. business with discontinued be results the beginning estimate as the As share. $X.XX XXXX $X.XX adjusted the outlined quarter operations second earnings of second This between currently Plate and reported which quarter in Tin release, of per European will we the includes

adjusted earnings We are to $X.XX of guidance per our share. full $X.XX maintaining year

Tin per will our year that balance by European about original guidance. be closes impact improved $X.XX results the quarter, of third earnings remaining of the business share operations the of the of to we Assuming the the compared expect in at the beginning the delusion Plate sale over offset as

year XX%. XX% over to Our tax with to rate I'll for the the expected that, remained call Tim. turn at And

Tim Donahue

Thank continued wishes safety and everyone, and morning for of our the your for Good you, joining thank best health families. and you us Tom. you

great As necessary winter not the to company States, growth been reflected the possible strong of earnings continued without in very night's strong our all XXXX. the manner. safe pandemic, timely the ensuring is And in major global start release, associates deploying weather to new businesses customers off the and remind Demand in last products it the in ongoing a receive record the are continue to have to us and that our to widespread increased behaviors. and strong services quality vigilant our adhering for continues a recommended customer in remain Global demand and rates meet we that needs. Cans we capital are in while we convert by United people volume the in jurisdictions now turning strains performance company face available, be and challenges some to into Beverage across severe despite that positivity with feels pandemic This corner and must high posed good very to extraordinarily and could vaccinations the earnings. perform was committed

capacity on to in last bring to with X commercialize investments XXXX. Beverage being As units XXXX detailed least that in expect in Can billion further night's of much release, we at more made

time, $X.XX increase contractually as aluminum year would we And around segments, operating so be we at a last a of well that an aluminum to Before thought remind delivered this revealing you $X.XX sits in versus pass North it the America pound will pound XX%. In up X% costs reflect LME strong volumes serve delivery the Americas the segment demand across overall quarter. the all in Beverage reported revenues first we the higher this of with and volume markets year. and the premium, through both remains increases

We the lines and future expect in described have in continue you we markets to eight to these of XXXX production and outweigh to that during foreseeable more February, to as supply various will construction, for demand stages supply XXXX. bring

quarter. increased lines the year no quarter increased same across our you which for income conversion volumes, volumes demand in in aluminum the exchange Europe carry the Segment softness period. Saudi publishes growth and first continues increased year's Sales While the Plate Segment in from American Tin X% down and prior benefit the Seville, which business Unit volume volumes negative doubled CMI the industry food of in in European from first reflects as North and tell almost longer foreign the last noted the we the of prior growth volume reflects European prior over to consumer volumes first quarter. in unit X% West for Arabia. food. Spain the million the quarter Mediterranean impact in North first year in compared income favorable that above in growth, as can Beverage XX% to year quarter the first packaged strong the $X two offset amount were contribution included

expect discontinued Food. into European includes be said, European X, will agreement As with Tin entered to quarter third Tom in the into sale XXXX, be an its the as company Plate quarter And April we reflected completed the businesses beginning second and operations. to results reported which sell on

reported volume continued more related shutdowns. growth up pandemic recovery quarter show Asia Asia the the China from Southeast XX% up in Pacific and to X% as first both than X%

and expect in region are activity the we control orders time-to-time will from levels across be shutdowns there movement returning, XXXX. described however virus throughout February, related As

XXXX Beverage a Packaging in the with over positioned in American against start North global Food demand XX% surging, the second completed Excluding will an outperformance Other foreign will projects numerous segment strong results gains XXXX. were segment quarter strong and easy growth year of Can and led equipment to post There continue the to great and the Transit quarter With comp operations for year. activity XXXX. prior last currently be by we in exchange, underway, Transit In we remain end also several results With with our year. Can industrial well a of remains the our line further income in year businesses. full through of approximately making extremely in expect summary, first to Beverage more reported the share capture growth. large

to continue cash and we flow. earnings growth convert Importantly, expanded into

before questions, first commodity with queue. continued across better from to despite to their a always to and feel As through And Transit earn the Beverage Tom you just discussed, will will that initially, now strong we performance have as, everyone dilution Dale, our we so ask questions we're the allow And to that of Tin ask the question. open into sale than ready the quarter open expected in to yourself two you chance environment. with combined demand expected call a limit year remains that cost unchanged free European to But the questions. call guidance back jump sale to dilution rising Plate full us related businesses,

Operator

from much. Thank Our the Panjabi, you first Ghansham comes so line question [Operator Instructions] Baird. of

may you is open now proceed. line You

Ghansham Panjabi

morning everybody. Thanks. Good

Tim Donahue

Hi Ghan.

Ghansham Panjabi

the to speaking the know drove to of the for relative And just kind gave know what specific is a bridge to you first you quarter strong exactly for XX, then terms seasonally XQ, of you the guidance upside on So, also guidance as in generally Hey! quarter? first can February quarter. you XQ

this is not period. second quarter as know earnings number the to higher first why you we've the what for curious Just relative the delivered to in quarter, than

Tim Donahue

Okay.

throughout. it’s I'll Ghansham read So here. just

again, segment for was know the we You operation ahead. every might income quarter, have what budgeted first in

Food up America Food Signode up Beverage up up $X million, $XX $XX million million, up So to million, you America for North example, $XX South $X million. was $XX know European million, was European

much. – was and because you quarter It much, Just at believe to look start across direction the we as and extremely have nice come pushed the than budget and third, hard the these while look trying fourth off and will realistic because four last you had in we how always we're was rest so always understand, in could that we much what and a it’s tell the that year, to was know off to forward don't the you want board, the with in more outperform how that you quarter could we by miss to outperformances team third having was miss all other we we volume that been everybody teams big the we year, saw of perhaps different a the that conversation to than today. that this up. year you I that's

second quarter the second together. why to be know and as about related, So, lower, we looking said, question start trying forward it two the as so quarter, but I to understand to volume we're the your sequentially would you all and

ahead. I our some here the the to lower as think higher is second pulled than we quarter, but guidance we budget I second so the pulled second expected and as the volume in than sit quarter, look know we and had for quarter QX at as you from at certainly quarter said relook Obviously, our first certainly quarter. what ahead volume second we

I quarters quarter. second capacity in the than probably third be more the are are think in we and we going to constrained first

the always while chemical go specific basket, denominator the the is up opportunity whether a year-on-year smaller. a coatings and is looking And at specialty in you of others cost outperformance we bunch as PPI then in commodity side. coatings, that’s the the especially your because and year, into start a the to now, always be have know volume all of are number So they you we QX for just labor, whole utilities, balance the QX right environment look at just, greater of pass-through commodities, has basket, and

So but second where see that’s at we’re the progresses, quarter we’ll how now.

Ghansham Panjabi

see And and it. with the on you just you know proliferation, what's you is of real the but you're report the comment, second that’s then was time the just business. headlines to very know said question, impact view on got easy associated from given just related etc., you know then and full that, what that specific that comps, region; mobility any and Brazil, to my I your virus have – second Brazil. we that terms cycling all that any Okay, for impact in see, noisy, your started on to through

Tim Donahue

second be, Asia quarter Brazil, the correct. easier for the state, as will you be comps Mexico, Southeast will So

to the know happen. As a but virus, different right going and other not here bad approach perhaps discussion really that just will don't U.S., reason in now know the a We India, is country year. we've but to Brazil, you is doesn't the of another the why get so that only be a, of the taken lot balance what's

to yet India. countries in but have any and not movement do have one orders. Brazil in now, two or or control restrictions right two countries movement We or Southeast We in see some of those controllers real Asian restrictions the

Ghansham Panjabi

Thanks much. so

Tim Donahue

welcome. You’re

Operator

Thank question line you for that. The comes Barclays. of Mike the Leithead, next from

Your line is open. now

You may proceed.

Mike Leithead

guys. quarter! Yeah great. on morning Thanks, good the Congrats

Tim Donahue

morning, Mike. Good

Mike Leithead

in I sensitivity on guys number cost however release, highlight internally? either leverage think improvements earnings terms made, it margins the you structure First how as the or to in industrial or incremental we cost we about industrial or business of with here, Packaging, up-cycle, think a recovery you've about Transit of this this the you of should think continue

Tim Donahue

going XX% I prepared it's least you to know saying approximately we're going as know you Well, Transit up, I to the be at XX%, see year-on-year. I'm remarks, in think said

the So of of A that's reductions segment of number years that’s demand. the $XX is of million income recovery you cost know industrial we've $XX to and about that? know of year-on-year, $XX last million EBITDA well. which improvement combination a over you million? – couple done as what

the I think much in better did first that they quarter.

than the like our business, QX for the They much materials that better concerns, lot globally, not raw businesses Transit a a lot that. the assemble meet we the quarter the had to we first materials just on the of Can and softer demand to but say but ability Let's necessary was businesses or in business budgeted. – to and then time convert through and/or being equipment, pull challenges raw availability based a globally, able those they weren’t of budget so of

about the something is related this put platform been the the to business how good we industrial this a exists think business. there all COVID surge But into very feel is. Is today very global just see long positive demand We’ll more it with tremendous view, that's or it year. economies. with about our in it the stimulus feel we upside has the as and I

our taken we’ve in just Transit, thing, the in know out one reasons out not prior last Americas our of to compared Food, for throughout taken European pulling European significant the businesses. cost You is over teams we the the amount Beverage the whether tremendous it's Beverage, quarters know are of outperformance of transit, that have year one costs that’s you but out other quarters businesses, all across several the

do come we’re volume that and that then bottom you to what through falls it seeing. straight back a So just all when you that’s of little and get line the

Mike Leithead

Great! the recent the with your Food business? just then maybe something is you complete strategic American European to after Plate That’s And do review North look super would helpful. officially like similar potentially Tin or other assets announcement,

Tim Donahue

know if complete. know is You ever don’t a like I review strategic

the for term is assets for company I'm constituents, the the time employees, Board but always etc. duty the to incumbent a duty it's But first, from term Management we have think company's long upon all and long I to at determine and also shareholders what outcome and and the best between have time the we look other to traders shareholders a term long shareholders. delineating to suppliers, to

So we're a that feel great was this at we always business and right. looking

over several full fair I generation. that, of we last business. quarters. its high organization You the do for tell an said the price. I business we and my can flow overall did cash this what from like terms what and a like cash receive probably could in stability believe was its Having comments really

businesses business, and have very We forward. performing retain little move the we’ll a well. remaining But have stub are we'll the we

with capital flow, of over until deploy years takes and spend capacity the lot Beverage to Transit next to view. North businesses have capital the will supplement such business the need needs Can a that and time their of a Plate different we couple We Tin new cash the American our board

Mike Leithead

you. Thank Great.

Tim Donahue

you. Thank

Operator

from Kumar, Thank next comes Stanley. the question Neel Morgan you for from The line that.

line Your is now open.

proceed. may You

Neel Kumar

you. Great! Thank

stake about post European offer continuing just thinking Tin And just own up was will business. the just sale, of then you you're I the its now how how remaining what a I any in rational pretty for interest terms in equity to could European Plate did XX% XX% the was In mean curious was in I if thoughts wondering EBITDA. Tin show on clear Plate leverage sale. the

So adjust leverage how flow? to for target will account you your the cash

Tim Donahue

last ended year or I with Well, X.Xx think we Xx.

in of our the of is now, to can quarter what time thing first this that I first that is than the the [inaudible] the earlier I’ve the our leverage – lower as first was one at of at I we a interesting, think end been was unfortunately the remember the end year. time the months at leverage get end of the end actually here long quarter – around three

we rationale that forward, X.Xx So to keeping Xx leverage easiest the we could believed the in increase and there profile best reduce are think for your comfortable couple the earnings that's needs The a leverage, range reduce what was see XX%, But we we're going conditions of depending ways I but company other flow capital the and business to we is new way that understanding we cash for to deal to a that make globally. shareholders. say for would the upon what did.

put you up, So have less equity greater mind perhaps equity for got a they’ve can business. the got Equity sponsor keep bid And price for to in private put they a up. you've to they company, making the pay a a

that would order know of of stub the the had of taken euros. the I So euros million increased about the equity tell it cost million purchase what, net the XX what only that price cost order while us XX on to appears XX% XXX you the you would about euros, to have versus million us not received probably been we price the we on

– got didn't lot on the If to value to by So we allowing this what understood a less that’s you if for cost there. it. it greater to enterprise the equity keep us I because stub, said sponsor business, have overall a put

Neel Kumar

just high I low the the for in think for helpful. full growth that you very follow-up, digit, the then was single my case? prior And American range. that’s is Is And for double-digit expectations know still year Yeah, much up your service Sparkling to categories coming like carbonated Water, break a sales and kind part there alcohol soft is more merging that [ph], how way categories beer. of of beverage by from mature that or drinks categories North growth other versus

Tim Donahue

what remember we think think I we in I said, to February, said. I’m trying what

XX% about I year. said America think North we'd we be this

quarter, But more down year; point it much where first first and break are Green comfortable quarters that to and as it sure just we're have than we denominator. with needs capacity we’ll you We’ll third, time selling by customers trying make and lines at and is think of still myself, to easier I the up lot lower whole XX%. becomes in be to I in XX% everything haven’t said at available fourth very bring because your are now. Bowling that that meet for to because at up more to to the earlier, of up understand your category we we're and I albeit making not the Olympia try and spent second Listen, critical possible growing bring what year. later only the category. I'm that's disappoint think we're a in this it's a do by I some less categories as can customer it’s

place where you that or in we opportunity others demand the us, means not year next we where probably least if four and as are opportunity. or to our far going others year also most years, we or for get is next two outweigh to over to As and trying see not like the two, see focused three for over said capacity or next at earlier, disclosing supply much I the on the

Neel Kumar

Alright, thank you.

Tim Donahue

you. Thank

Operator

comes next Adam the of The question from KeyBanc. line Josephson,

now line is Your open.

proceed. You may

Adam Josephson

good Tim Tom, morning. good Thanks. and on another really Congrats quarter.

Tim Donahue

Thank you.

Adam Josephson

of the dilution guidance. and just Tom, or one Tim the

it’s diluted the $X.XX in So second half.

$X.XX You close beat the by your in first to quarter. guidance

just So the some over know quarter, think you your said of Is kind unchanged. effectively why it effectively given think do quarters? you to be one right the what’s seems there to an that in the your of there I happened by of pulled way year rest is full perhaps outlook be which in may element may like XQ, amount the three it of and forward demand raising about there, it been and is Ghansham you're the have past conservatism

Tim Donahue

Well, I right. hope you're

don't like You know of sound you the Prince Darkness.

sound da Vasco to now, explorer, but Adam Josephson Gama You right great sure the here. or like I’m if not not talking

and resist. you’re that. I said and said had talking I couldn't India, points I Like go about I pull to I but didn't down Sorry, Listen, here. and right. to were say hope commodity ahead me as four costs constraints Brazil virus in and Ghansham written Ghansham, you reminded also this the capacity forward, I I Tom of

customer is just are there – and This about of now bunch and do meet business you'd Can is customer's needs. here approach cost couple demand and bit not that's in quarter. that first It’s It lot the a on. things I trying to last satisfy whole running everything, the going got here there we've know it's a are like easy But just that globally globally, are even squeezing, right get really excited be global too. So in an to really We measured. performance materials, would the thing take the of will to sourcing exciting and – understand are on the business, we and, there it’s to we're business say and in or – of pushing also is quarters affecting of shouldn’t raw squeezing, the materials their we’re of some time are economies they I a over little businesses, but all a similar going raw and businesses. surges but a suppliers having really price are demand so but things recovery Tran the with first

know. we’re I right now. So, – I don't it’s at where

characterize $X.XX I know to QX think $X.XX, would in $X.XX. order of that you not in outperformance the I the

a bit about in the guidance know the little a of three at time we outperformance of had. gave there's just we So mid-point you the of I the second certainly quarters. – quarter original remaining second bit budget little –

So just of us. and half year we’ll back what the the see brings

Adam Josephson

And update what three XXX. sorry presumably you on of flow just your perhaps didn't cash of this capital Yeah, I sale, time, because what perhaps ago you no XXX you in Tom thinking reason, working year. the, for months appreciate I free on CapEx didn’t you cash it. give neighborhood with know guidance consequently, flow, I appreciate guiding cash guidance you're a but were look CapEx, that. and Can but of you're this us the roughly give for know terms thinking I guys. for

Tim Donahue

quarter. when on Adam, is be of know cut there and think date X, recovery depending purchase was third July knows goes be. the sometime capital you an cash but think close in year flow or guidance you XX will hit who because an it's to meaningful, on so arbitrary off the it the cash we which to the but We this that not against plus But the the working movements for price. Yeah, perhaps it happens, the said when of you depending of August, flow gave could We when you, just I going year. be that give because minus balance Tom know July for which transaction. the statement, easy

be it's is meaningful what year to will the we believe that But of $XXX could not order So you, we for almost in capital I flow. think cash million. tell this

that here spending we are assuming and steel, business commodities lumber, a assume especially year. let's – combination of accelerated seeing in we were cash that But you're we the up, of so. and order it cement, We tell closed take there, to free are material, also that all know, you would $XXX December you million I out on project drywall, if up business going right, the we spend year helps costs; then construction the little capital, construction told had we this sit – flow you that A capital the you. if we be accelerated as said million sold to will for XXXX have would on going XX, $XXX

Adam Josephson

Tim. Best you Thank perfect. of luck! That's

Tim Donahue

you. Thank

Operator

Next question comes Jefferies. the from line Phil Ng, of

now open. is line Your

proceed. may You

Phil Ng

on Margins a built and see strong Hey were very and quarter! forward strong typically guys! earnings particularly and I you here, Americas called from Europe Congrats but margins Bev. in pulled demand. mean you

get trying price I'm handle XQ. a is I’m flush a big seasonal cost more. better to just typical as impact your that little So enough to and improvement a that in you XQ see don't profitability out trying and bit

Tim Donahue

You’re taking absolute about percentage or Phil.

Phil Ng

Percentages.

Tim Donahue

delivered Yeah, I cost the mentioned so the prepared you up right, notes, aluminum know XX%, is in aluminum.

the second an got we will and quarter. be at effect, costs effect now higher it this aluminum for we much you So third have as that the least see denominator

but know margin one-for-one the reported you but you're pass absolute percentage pass a know one-for-one down. So a on through it through, margins, doesn't or on affect revenues – you comes are higher,

little to commodity want be percentage margins that through. are cost you careful just about you So passing increasing a environment an in

Phil Ng

that’s whatever price call cost per What this expect improvement, metric through because you can like profitability think about, know you you did mismatch. Do you a seasonal potential or cleaner.

Tim Donahue

profitability more improvement improvement. costs are spread and we your going greater season, across naturally I think get summer because sell fixed getting the profitability selling the have volumes into you and so just Listen, are to you we we

Phil Ng

data, on Brazil, lap concerns in know some takes of you is some when you that you're puts Tim, that comps and you the know you helpful. in nice in risk the at-home and for even guess Mexico about I slipping consumption that's any But offsets. on uptick But talked saw COVID on certainly know your I and last you the then we tougher of And these products. some any comps matter. look terms negatives, outlook for growth India assume color tougher the it, of to potential year. with Nielsen got when front markets I Got demand, like the starting at but good new and

Tim Donahue

in in first Yeah, well real we I'll the so thing is Mexico. a improvement are virus say seeing

So I wouldn't Brazil same and category in as India. Mexico throw the

be time, take the I home. consume and start home remains going people seen to it's for it but outside consuming to long think to over less how more at

the that’s for business a I that and especially the big percentage so the in especially and the and for beer in in far outweigh America etc. in going is next think have of product and to reversal for hemisphere some think products demand and couple over America western at-home there’s But worried can new the Latin sell-throughs, so that'll population of I North years. that of new consumption rightly of about beverage still introduction time. we take virus any

Phil Ng

Thanks lot. appreciate I Okay. the color. a

Tim Donahue

you. Thank

Operator

of Thank The that. of next Bank question line comes you for from Wilde, the Montreal. Mark

Your now open. line is

proceed. may You

Mark Wilde

morning good Tim; morning Good Tom.

Tim Donahue

Mark. Hi

Mark Wilde

from that Plate also wondered, you I use it possible proceeds of give of Tin to terms in know prioritizing and how might that cadence transaction color through the is for you of you just year. more us kind any thinking at this the point

Tim Donahue

and we know trenches don't and want you’re as going little to put really a much got to I – stock, I into you’re we've view? do want get going possible, of we’re what, a so you be – don't Tom, I careful want I because it a how debt we it’d back obviously stock of to don't know efficiently to that. don’t buy think to debt, some too got as know, – I You know which you some much – out mean

Tom Kelly

somewhere at the the big the and Xx north. year. will the think be and at range, that to Yeah, X.Xx look I close A have you leverage of end to between think so probably

Mark Wilde

and in about about room on rate rate, now right kind the XX% now. because your a thoughts but business the Can right latest the about goodwill and the towards low lot were the recycling there's I they know right cans was just for improved issue think being the now, The Beverage curious about Canmaker U.S. recycling and you of Beverage we're Tim, aluminum the elephant of I was day performance The other of you industry Okay. the talking how reading Can I that

Tim Donahue

right? We XX%, higher plastic or around recycling than are is which glass certainly

Mark Wilde

Yeah, to be sure.

Tim Donahue

recycling is they're out generally across then so point in United All take you so has relevant are you to keep mind a it's certainly value and trying you States as made. a The point Canmaker well, outside for aluminum Canmaker know Europe sometimes higher value, UK as States, The publication we is they are the as know And rates a the and wealthy society United a get granted. and

we society So in disposable a you live know right.

it they breaks, cost don't $XX.XX. If get fixed, buy and only it DVD one, you buy because new player your you a

to find I fix real pretty any you pretty customers it? around and it separating you them. you politician properly generally, popular people to and can States and the [inaudible] mean to it; it hard but not could they people’s and be I it can to of buying if to the are through the to specifically. on, take the or producers. are look want go and not producers You you and you and tough trash the has don't the like come have you that market in think of United properly consumer see that know guy down do are going on force the can back fine that'll you item every disposing very how and does So get Switzerland do

So know an it’s like, you process. education

we has consumers if it, to recycle or an of incentive recycling it know not So would common and incentivize it end that really great a I program in all the stream prepare to way force want sure for but you. aluminum up waste answer as to more stream. consumers am to there's a opposed it's for the the shame to I have don't value to

Mark Wilde

you have actually know that? on your advocating guys increased Well like know about talked have one for deposit things use any this. you Do view peers loss, you of of

Tim Donahue

you I deposits, Well, look think certainly deposit deposit occurs more is the states in if at there that the states. recycling

collecting get to but rates or Now sales states deposits. of their bringing Is into the Mexico back nickel. that there you deposits. – they that cans the nickel. I sold cans and in for California didn't New home with from higher doubt in Arizona, know, no them it brought California it don't into in and in a to California are to get is but is in California the Nevada example due their California They state, California people nickel pay coming cans higher rate has

the I customer in to deposit dip of face likely in think and initiation want to understands challenge the that a they the is there's don't dip base our demand that be at demand. that

I think normal cans normalizes, say a for to PET on you unfair and but demand a you to you're deposit plastic I once put everything just put demand PET that’s patterns. deposit else. a that and it everything, bottle bottle, on deposit put aluminum and on a deposit ketchup that be on put that doesn't a will a dip in used mean and mayonnaise not would back then

So products. be put control a you waste, find a get on to want only try generally I think the but looking also everything, has because then deposits, to deposits just on you There know the if everything. not that’s beverage can PET most to probably to consumer product really you're going bottles the on How that much should have deposit value. consumer's way to on the withstand, But back. that

Mark Wilde

it leave Tim. that. luck the Good of I'll in at balance Okay, the year

Tim Donahue

you, Thank

Operator

next America. The question from of line George of Bank Staphos, comes the

open. line now Your is

proceed. may You

George Staphos

Thanks for morning. try want more Hey on and guys, first longer assumptions so some I Congratulations the to into I've you. term My progress that dig question, a guidance good far. for of you the the details. one got then have to just time question

and in you're goes that to assume your of down for terms within earnings? to assumes the it assuming year, pay midpoint we XXX EBITDA the it the that XXX in templates of of this And range that rest up? In what the be guidance should somehow you or in will show cash Will will purely European stub on where buy the back. equity available include P&L, to your debt

Tom Kelly

equity stub The be XX%. at earnings will in

a the meaningful to Xx it the we yeah, business, stock As like contributor about in look today, the it's through time far – year, not where starts the using that you I flowing the of right. stock buybacks. modeling, for growth know leverage we sound the but midpoint yeah buyback, sell That's earnings are as this by to actually it X.Xx,

George Staphos

looks see strong XX% those China China to to us Asia performance both step year. keeper a easy to its the or I volumes And Signode which it’s had the performance more the given and Signode businesses? portfolio of question, are Southeast the are budget trending It every thanks would like in work. your very be as the do comparison. you that What we supply/demand than Tom, first these you that within even very for Asia going fit guys. In the capital if trend the into the you the a business up were very quarter. seeing, but luck Tim of for are know ago. quarter. it’s rest in to think China, your doing you and quarter versus portfolio a supply/demand does And frankly have the a for Southeast take reason, volumes allocation be my been and bit I what to back nine the capital no, clinical the in you you the around months within looks performance And performance said that. our better versus Thanks as to saw obviously guess given put other for well if you're know days very, do willingness any, rest strong implications that or in in that about Good six very and expected Okay and you healthy months you China in

Tim Donahue

in business come for lines the of line that right another We’ll in put and signal up capital projects. size we there's new growth, across come So, we and plant see the have Asia and company Transit – Beverage with new a the now new the minimal but had where considering plant for cash the business. Asia, year. this good capacity last do obviously. plans years. the flow We are have dollars supply consistently the industry over several principal I last up Southeast think is – a plant The generates. we two the the allocation, There a specific is it commercialized fairly We have capital year, more so in allocation minimal is capital of Can the

expand plans We to capacity in China. current have no

George Staphos

it's and The because and that. amount a long just profit here, fair Okay, is the that's term given not say. been a you I difficult of summation a should to you've basis be done but on great, competition capacity; earn – a growth would that

Tim Donahue

Yeah, among other yes. factors,

George Staphos

you thank guys. Okay,

Tim Donahue

Yeah, you're welcome.

Operator

Anthony Your Citi. next line of the from comes question Pettinari,

now open. is line Your

You may proceed.

Bryan Burgmeier

Burgmeier Anthony. this for in sitting Hi, Bryan actually is

impacts businesses? food the the corporate expense aware there separating are European that are You you U.S. food can in EBIT be European or style know non-reportable dissynergies to know following there of and of, should we any and the

Tim Donahue

non-reportables, no segments So, are million, and the annual food that. There European has dissynergies like retaining an can food in probably $XX European something packaging the basis other specialty million aerosol and business can. of on North or around American $XX EBITDA the separating the business,

was So the of balance quarter And it's discontinued that'll question? after in ops. the to going Brian, we’re other come the what over part starting the year I'm out of sold second the or because sorry

Bryan Burgmeier

of impact expense? corporate any There’s

Tim Donahue

going cans we're Oh yes! European business – beverage going a to now So, is you left which there only. to – we're have know are be

so billion, little it very what can did $X.X Sizes, less one than beverage it business opposed to product as food have itself $X overhead is it's sizes, the to Europe division, a know beverage not more in multi-product certainly a while manufacturing, is require a manufacturing was we're the to bit all homogeneous it'll corporate manage as you a division, and manage a than and going to billion are far there more material. cans food business homogeneous. diverse So It's the can division. large as

providing. that the that it So is Tom numbers in already

Bryan Burgmeier

follow-up, Texas America’s the possible And forced facilities it XQ? Got quantify bev as on of to in Thanks it! for the winter in XQ. storm to in that. Were down your the is take any your impact results my detail time on

Tim Donahue

in Houston of in Texas big each. two have for a days area We Beverage down were and the Can couple plants they

had million, a a to pick know You you know a if number probably guess, but not I that’s bad quantify like guess. it, $X

Bryan Burgmeier

Got it. Thank you.

Tim Donahue

welcome. You’re

Operator

the from comes Kyle Deutsche question of line next White, The Bank.

now open. Your line is

proceed. may You

Kyle White

Hey, good doing is morning. Hope everyone well.

[inaudible]. you're what just more front Europe into going applications We’re have this this what I’m the consultants going Europe, do then you seeing Thank is introduction can-urban curious Can on some And in those you into also seeing of categories or you. are more beverage much seeing the region. kind of and in primarily Beverage growth it

Tim Donahue

in to see we more be how materials. than are States, it products see get will in growth just Europe, into I We'll those other see more like European and as to the you're introduced United going I much or beverages. glass think actually more cans

very the growth in expect good We beer side.

rest drinks the UK exception the depending continent. soft of rollout depending on on the and jurisdiction of it's side the On in going with vaccine, carbonated very of the the slow the

on-premise longer as relates recovery substrates and like take some in dining a be to going what it'll it the looks and dining, just little So soft than full America. North have It's drinks. to carbonated season. the to can a we'll other But what see good impact tourist you're know going see as of the looks outside you summer season to That'll outside like.

Kyle White

to it large price impact in a from And practically in an then cash like particularly the has but then just looks in the aluminum, terms your Mark Right. earnings you the this year. standpoint, capital it working answer mentioned on understand up-flow of and

Tim Donahue

during the We don't have capital on the year. the working impact

in But hand-to-mouth a know us put have whole you fourth as have I before depending into carry of billing, that on to – the end I we I let’s can Asian year as well Brazil the selling believe a inventory year. opportunity next to we expect the demand. on typically think right summer don't what everything to so we expect It'll of with Southeast basically some collected don't we business, that is of be countries in – selling it depend how – now, know you most we’re we're get that we’re exception is much of where need quarters lot you season to way. big make.

Some impact provided. impact, but again built the the is Tom’s numbers into already capital working

Kyle White

Right, I’ll hand it over. Thank you.

Tim Donahue

Thank you.

Operator

Salvator comes of from Tiano, the Seaport The next Global. question line

open. Your line is now

proceed. You may now

Salvator Tiano

hi. Yeah,

ask Transit I Packaging. to want So firstly about

but industrial was strong. year-over-year, flat were demand revenues currency constant really about mentioned You

outperformed bit the provide that markets year-over-year. perhaps what color and So did on or more factor a markets can regions what you regions or little declines

Tim Donahue

On – was think say income we income. said a I constant so meant it operating I segment currency – I talking I I what basis wrong, what if Yeah, apologize. to or about

certainly on sales currency constant strong year-over-year; Europe. very up were in I basis very strong Asia, in a think

strong softer little across is volume on equipment the think I and side; Europe on everywhere, strong the Americas. Asia, performance, tool an a income and in but

through just see I timing timing costs of which come passing commodity we’ll through think May, in issue. here so that's just know and the you April

Salvator Tiano

around And just I know that the paid I questions that to understand bit you so little you said is you the about spurs give dilution probably a come guess of you the European to few would Full to basis, already don't going $X back from out. to bring it'll the proceeds. year back $X.XX this be perfect. buyback here. the, a to assuming Okay, close sale got through

to not minimize to accelerate where valuation in to what big your the buy earnings it I So try a sold. guess of order would from is be being rationale chunk backs the pretty

not You scenario? know this consider why

Tim Donahue

company and lower a smaller a earnings base base. we're comfortable forward lower we Just with having and believe going flow what cash leverage a

Tom Kelly

we we to of just back, so how matter a do said, that it's buy fast. intend As

Salvator Tiano

what you I lead than think more guess were Tom, before to of you point. about mentioning Xx perhaps the leverage X.Xx, the

sure accelerate know that’s because it, the sense buybacks upper end, end be minimize of by to and perhaps material the why for otherwise you leverage you're seems. will way wouldn't the it and make year You best on to it make dilution

Tom Kelly

like and do advantage we of the know X.Xx, again take ratio is option to you back we’d that what comes Xx it. to You at to this if so is comfortable know, it range have leverage

Salvator Tiano

you Okay, perfect. very Thank much.

Tim Donahue

you. Thank

Operator

from Markets. of comes Capital the RBC Viswanathan, line question next The Arun

open. now is line Your

proceed. may You

Arun Viswanathan

ask Okay, maybe performance of questions thanks. years. know here. couple a the – I next a of you question question a strong and on Good lot first off very know been can near I could the you congrats morning so we have guess ask asked, just about term just maybe

far going to outstrip supply You cans. noted beverage that demand and is

this know could of around outstrip to What you're products your units is most XX you X on of the things and about from adding statement year, that know customers far couple the that demand potentially by over next has you're through address billion alternatives are this supply and you know alcohol some billion sell years. You of the demand going water freshness, alternatives. hearing units the kind trends of driven supports new specifically and maybe been you side recently some

kind or you coming future? also that the is skews the see year because new product of in So growth and is it more high product new this skews do you supporting development, the it maybe last do water companies alternatives some and next then beverage velocity favored development

Tim Donahue

I think alternatives. think out to as the back in restaurants And premise a consume carbonated of true it yet. of couple I belief water we've has of the demand aware going people our resurgence I going growth, the we on there of will the drinks. during which that But soft development. not continued see to least we’re to before that go earlier, we’ve the pandemic seen last growth on as to would I is for can always time new and much over be some that's product years be had and products at not I is to been characterize take sell-throughs start side opposed some strong more home. said to new in say

of of to we've likely we into I try point years believe the this in one want our could get don't hall, forecast kind with customers and comfort got anything specific which is a somebody to you years. any next describing public likely to determine to on demand really customer. for couple look we what for over the next contract where at several the customer know get their we years that's to meet forecast as you those So, next several for

Arun Viswanathan

XX. Okay, fair guys have I announced enough. event And May an guess investor on you then, similarly

as or CapEx or two can as on discuss at it Thanks. strategy you you So to the touch on as could what is now. previous you well. there you'll as there, least those far you portfolio see anything Maybe financial know maybe provide maybe even

Tim Donahue

Tin we businesses get think full of you’ll have the portfolio certainly the the European ex I a all in review Plate. remaining

this and where view least the last are been a balance a about to of hopefully and So the Transit would the what of do as like the you I probably revenues try businesses are we it percentage on X.X it's the of X.X you get year is have EBITDA describe year to and of years begin we from of – see looks projects education years various You'll we’ll it in working some X.X a or Packaging. story for for for that frankly to – it our time the Event? process about it’s capital to and new Investor at been reeducate, and think some company since terms

well investment not there in no analyst reasons many comp. or community it's So and public by again, for is that. understood we are the There understand

that So along of just to begin line again reeducate or education the business. process

Arun Viswanathan

a thanks guys, lot. Okay

Tim Donahue

Thank you.

Operator

The next question comes from the line of Gabe Wells Hajde, Fargo Securities.

open, now is line proceed. Your you may

Gabe Hajde

morning. for good Thanks taking Tom, questions. Tim, the

Tim Donahue

Gabe. Hi

Gabe Hajde

As try and of to asked. investors lot more strategic business Signode take questions of an would stab kind the that kind a some of operation, people multiples. to on married previously you but – many of trough at depressed up review in apparent I the financial and head don't resilience another think I with profile have going stated, been face kind consumer at that perhaps think dispute industrial do the of I'm to appreciate would and packaging of market I recessionary and a scratch having so their environment, based want a earnings business

there November, the being any in of more kind complete guys is the on that the scenes that or guess more businesses? I is work initiated So behind strategic still back you review directly, of is done

Tim Donahue

don't it’s As ever think complete. earlier, said I I

best I it. think to you operate want are do that trade I the portfolio assets want do board want or and management an for wouldn't the industrial to continue company's this industrial and looking an do cash the business; and this assets to to you determine I’d for use the business. the you call all at always packaging convert, to call

cans. business, business that nothing I business. other different But strategies different, There just, tell so is food than it’s than beverage they're a business. than customers are beverage packaging both food beverage business are packaging materials and packaging a cans you different, are unlike food packaging is their a a Not cans cylinders, similar different different, it's cans. different, is are it beverage about different, and cans are processes would So different different cans packaging are manufacturing market the it’s seasons but the

Gabe Hajde

subject. other some on seltzers enough, beverages, guess of a this more, hard Fair XX And etc., your consumers but drink speak kind alright. point, maybe is drinking imported customer if might displacing are folks it is of hard see seltzers delicate the behalf their a to of years certain asking I that to head these maybe our being other then scratching terms in countries as XX, much on of U.S. strategy, some and into be energy Not strategy ago. really similar

fact of some these America, earmarked curious perhaps for the that in the of introductions. product you're some that I'm is if you in So North world other of on of new growth seeing some parts

Tim Donahue

I the, in then about a think sold pretty exported, talking filled think think are you but probably that's it's happening, then I I small are States that that are if cans here and United the number.

down. the no bars obviously home many there's pandemic premise since or people think been that drinking I on at doubt has bars shut than have most more

as bottled home. know you're drinking canned beer drinking beer, to opposed draft or beer you at So

reopen, be to seltzers are in may house going a your seltzer to home. a these continue drinking do spiked gin a opposed I whether that a bar. cans you these drink having in in served vodka and served population, are there's spiked soda, the at consuming As or to that they think I are tonic of or in think cans, seltzers bars a and when segment

it I don’t from see seltzer or lost while. happen to natural as a to We're bars I we faded kind but think of I I standpoint, for I business way. So that. the draft, here think the beverages that They lost think big think any are be sub think from feel in spiked be not I obviously as the going to down restaurants and in going our and phenomenon a growth. substrates real other think event to – growth, reopen, are in going of it's canned we is consumption natural to said turned we volume will a stay will

Gabe Hajde

Thank you. Understood.

Tim Donahue

you. Thank

Operator

Adam The next question Samuelson, Sachs. Goldman of line comes from the

open, you Your proceed. may line now is

Adam Samuelson

everyone. Yes, you. thank morning Good

Tim Donahue

Good morning.

Adam Samuelson

for in in and cost and A think Americans profit the and margins XX% margin lot to significant the to wanted in contribution that just Beverage same of your just quarter, sure. about, leverage make think Americas to think the probably growth, price margin you would ground on just profit too, the back you normal business. the has of store the Americas And operating reduction, about come European try mix, just both you high Beverage would and in revenue incremental I'm again been think covered, said drivers just X% especially but trying and about saw Beverage the growth I Beverages in incremental European volumes thinking XX% operating seem in very

Tim Donahue

one in Toronto. in production I York, lines mean, of facility, two last installed year we third one in the New

upon can feeds cost lowest in we in through. big not one reduce earlier, spread our the you line is big costs costs, entire Spain. and was out certainly as is plant. at beverage the might been to to plant, the contribution so as a as two system, option line in all greater you plant every I provide last incumbent do. more quarter. costs the Europe So we’ve so It’s customers, second a the line the we thing can us to year-on-year three much a that third A year, had, all companies even It a in when from throughout our imagine, a operation reducing into than you And put said plant to or first Seville, just line plan have year

France aluminum in so only a the that back not but with to you throughout We and than you steel and the bottom the cut growth are and converting and Mediterranean, it more that through production It's know in plant not and it, also line. volume you UK lines fall that. couple now then cost the have much Spain is in from and really to you complicated does volume come

Adam Samuelson

them. got Okay,

level Were of seeing experienced similar in Just to first in XX% America one quick Are about similar still short up what the backed XXXX? you running follow-up, a quarter are versus… capacity, volume just with start talked North domestic you import kind to growth. we get levels you that

Tim Donahue

into quarter, in the significantly the begin this last be in and cans a So imports industry second and we did those beer very there Crown at importing for were U.S. – When until the second Brazilian know really during businesses of down the period not time shut the lower quarter you Mexican year. than for into third were from the last There regions, least imports the U.S., year U.S. will were some but not first we large. the but quarter, into had other year. countries

Adam Samuelson

I’ll much. very it on. you pass Thank great. Okay,

Tim Donahue

Thank you.

Operator

comes Morgan. of Zekauskas, Next Jeff J.P. line question the from

may open, now Your proceed. you line is

Jeff Zekauskas

Tin to Plate after for proceeds European the sales, to subtractions of other segments much. divestiture? the very other were of Plate made tax revenue the And Thanks what the correct Tin the Food What outside need be of in business.

Tim Donahue

the revenue have. head, The top off my of don't I

Tom Kelly

and… in million $XXX about It’s aerosol

Tim Donahue

No, no. no,

Tom Kelly

Yeah, and a less XXX, was promotion a then than right.

the after euros on talked be the tax should billion in release On about than tax that we million. proceeds $XXX X.X the less pretax, a

Jeff Zekauskas

very Can Beverage thank capacity of Have longer large or any about then have changed in very, industry? made the announced strategy you follow-up that. term differently think – those announcements for the for your And way you competitors Other my tightness additions.

Tim Donahue

Not at this time.

Jeff Zekauskas

great. Okay, much. you Thank so

Tim Donahue

you. Thank

Operator

in you proceed. now Speakers, have queue. we question don't of any may As

Tim Donahue

Dale. you, Thank

Investor virtual May the you. everybody the again concludes Event. speak today. with So call Thank in during Bye that now. We’ll

Operator

today's participating. you for concludes that all conference. Thank And

now may disconnect. You

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