Crown (CCK) 26 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Timothy J. Donahue	President & Chief Executive Officer
Kevin Clothier	Senior Vice President & Chief Financial Officer
Ghansham Panjabi	Baird
Kyle White	Deutsche Bank
George Staphos	Bank of America
Philip Ng	Jefferies
Michael Leithead	Barclays
Gabe Hajde	Wells Fargo Securities
Bryan Burgmeier	Citi
Arun Viswanathan	RBC Capital Markets
Christopher Parkinson	Mizuho
Micheal Roxland	Truist Securities
Anojja Shah	BMO Capital Markets
Angel Castillo	Morgan Stanley
Adam Samuelson	Goldman Sachs

Call transcript

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Operator

Good morning, and welcome to Crown Holdings ' First Quarter 2022 Conference Call.

Your lines have been placed in 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. Kevin Clothier, Senior Vice President and Chief Financial Officer. begin. may you Sir,

Kevin Clothier

(ph). Tim morning. Executive Donahue, Kerry today's Officer. me call is President And you, With good on Thank and Chief

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

to the per quarter actual a in from raw per our $X.XX results press $XXX million of to Additional due share n was quarter Net to year filings, compared to of is North share primarily in higher could the in prior income and information million year sales profitability $XXX equipment, concerning material XX-K increased of lower Adjusted the were in can unfavorable factors including the foreign exchange. the $X.XX million the to the primarily and benefit $X.XX earnings contained prior businesses subsequent million Segment related company's earnings net to from in due America pass-through costs the share quarter. compared Form incremental release beverage of volumes. improved tinplate can-making our in of insurance $XX tornado Green cost $X increased and up the of cause compared and by and filings. in offset SEC for costs, inventory, a timing recovery that XX% the in including Bowling in to XXXX. in quarter XXXX recorded vary for the $X.XX The prior-year to quarter the earnings

that in common million of stock billion. the date board December. authorized We the $X that to have repurchased was from Crown XXX Program

billion EBITDA dollar $XXX recover the in X And year the project the Europe, we U.S. in While for volumes now Brazil the begin when And with soft, full-year. expect throughout stronger to higher QX. combined energy and year. we to million to be for do remains costs

the from Our earnings the $X estimate the adjusted to $X.XX estimate proceeds will for collection XXXX, on and by assumes share. for to timely we year-end. full in losses $X.XX from in share. guidance remain range an few for all the to Second per year, million stock full-year we continues be recovered The Bowling in billion of assume of Green Quarter $X range of is $X of year. per the for the repurchased And for additional $XXX insurance common a It

flow maintain to capital be We billion. for spending leverage And that, X.XX with times Tim the turn With the ratio (ph). call $X over range expect to continue $XXX cash of million, XXXX. free will of we to a I target in

Timothy J. Donahue

call we'll the you, Thank and everyone. I'll to morning good and Kevin, then be questions. open brief, to

As and Kevin first reflected in overall as release just than performance expected. quarter summarized, night's last was better

the results the being demand operating remaining most in market. line quarter excluding when of were year, in the Global the reflect in X% to compared for beverage can markets Although prior excess an up segments. volumes conditions and cans quarter beverage sold-out exception mixed of across the the by volumes sales where in our Brazil supply, to Brazil, ability X.X% unit market advanced by our with XX%, the Overall, global declined XX%. decline

steel year. the cost Reported the of XX% month. costs. begin to customers almost Uberaba, second with this shipments We line quarter second increased greenfield the due material and inflated the as commercial doubled the in raw plant capacity quarter, of line earlier shipping projects revenues first in the is have our major in began release the new Monterrey, summarized prior month, in Mexico pass-through expansion first Brazil start-ups The primarily tinplate to next will follows: of Comparatively,

first second the and in incremental the due unemployment, quarter. $XX Brazilian quarter Bowling first-quarter return tornado. to further noted, income system Recent softness market. early beginning and the temporary see Bowling the summer was was first quarter the second Segment follows: lines and opportunities notable in Americas led temporary quarter we of Unit capacity. unit delay growth in the levels diluted. do While the operating strength production million We in dollar segment expect recoveries European Low Green, learning approximately high quarter. inflation the operations of year average, remains $X volume with capacity. in the driven segment significant in the transit, Bowling Bowling U.S. Green Beverage Due in and by of aluminum for million, And Colombia, loss progresses. X%, operation Asia to volume to up while the was million Demand as Kevin America season, expect our operating at unit reflects improvements to the do prior inventory ahead growth we of year, like-for-like We year, by in Mediterranean capacity In in consumer is beverage reducing Green $X over volumes recently to volume of as loss carefully million. impacted on expect curve carnival North excluding Arabia. managed costs as recovery across begin in Green the strong advanced on second-quarter further volumes X% European now both continued XXXX. receiving the limited prior Green quarter, insurance and by by capacity, X% both installed Saudi busy income of in the during approximately each, income the offsetting with $X exceed up Bowling and and XX% beverage growth growth with Mexico will timing. selling confidence, insurance we backing

year. out, COVID the the higher Moving Asia better into we for of transit projects in balances the across currency, to second announced Income the will in higher-priced due quarter in declined the Asia-Pacific inflation for from in this earnings year-end during Spain forecast, costs, Beverage to and was second Appropriate segment volume first due the segment including impact into growth significant restrictions and primarily quarter Southeast quarter, carryover to capacity, and packaging actions headwinds recently and and the of Adjusting second-quarter incremental expect in steel previously forward impact in as sold volumes and X% remain quarter, the balance discussed, mix, UK. offset taken, we XXXX. brought in expect we and can of $X segment income segment been million the of China. pricing reflect advanced that. than shipments strong have but in income as the the look XXXX do the

release, additional beverage and in equipment XXXX, food, first food making cans the quarter in had food the capacity in Installed our North XX%-unit In of XXXX. in sales benefited noted in from self-made two-piece the businesses quarter. tinplate American leading American to can we two-piece As first growth North can results strong volume

recover inventory. Additionally, items, were taken including cost actions pricing XXXX of prior to inflationary year-end the benefit

start summary, year in but mixed, plan. a So results of overall, the with solid ahead to

to continue have contractual the back on Bowling to strong. in Looking Xst to to demand recover and beverage ahead we of pricing running, second inflation, America, transit now North April quarter, taken remain expect global recovery in can been actions Green up commenced inflation is and

Kerry, now that, questions. we think with I are take ready to So

Operator

Thank you.

Ghansham Instructions] the first line will question Our is of coming We Panjabi now from session. question-and-answer of [Operator begin Baird. the

now Your line is open.

Ghansham Panjabi

I or mobility maybe be Can just c. of the guess, move well, increase, et beverage it volumes c. on with if you restaurants, impact morning, relates and is that, on-premise, any as for as characterize that's commensurate year you -- to the even Good how maybe to Thank food you. having on around, unfolding? to see sales Tim, et starting the packaged us dollars rest everybody. improving people focusing U.S., flying, clearly On-promise seem

Timothy J. Donahue

good a it's Ghansham, question.

seen You I -- to what expect yet. you would be said just haven't haven't it we true.

notes, stages through call, initial -- capacity Bowling the aggressive we does weren't that learning capacity slowing levels, lost curve that that We're the I but and Green, won't very is year, as we cans the get Now, until not our sell full early we with cans we've, prepared in beverage for plant said have momentum given obviously, at concerned demand that -- back much. we inventory appear the it a QX. on to in little the trying summer were on

Ghansham Panjabi

Sounds least, and at far of sense what good. been, reduction theory drivers, in break you the out last quantify then then for quarter year maybe what -- for do first just impact QX? could the you terms seeing modest just so as us for in have in a in various far maybe And given so versus in year, the might the Brazil EBITDA you're -- have of to this and just carnival year, this timing the

Timothy J. Donahue

this be sit it's incremental of on the headwinds forecasting Right Ghansham, probably currency, but a year, off were an from it's ago. at to were today, an of bat months think million headwind already we where currency couple we I XX where the we reduction incremental EBITDA a probably --

similar in I right you you million you, to time months it think the by we talked a but using not two and And where Asia X.X reduction. some were by XXX, million euro talked the Brazil, Energy of Brazil. interest incremental we to talked that at in from or at line, we're as now. performance EBITDA of that move proxy, maybe in out just to a didn't the the we a you Beverage a euro currencies I'll it's anticipate using couple quarter, all food euro, proxy, when the we the at gains, months as Brazil bet about in minority ago first to XX Europe. headwinds talked Think you a and the we beverage XX XX while when to was offset months when in gets EBITDA you and million, offset net ago XXX Europe we or $XX XXX. to to obviously XXX ago European

Ghansham Panjabi

Brazil Yes,

Timothy J. Donahue

carnival. hard hard the quantify to, market to delay down. was of The It's

down XX ten carnival At I face it, market the XX%. is was however, high I we confidence market best XX. in XX% were shaky. the going the we're in you high It down inflation got than still be balance feel better unemployment. Consumer doesn't good to of of The think me to are make the that down maybe is. to tell

the before, our long-term. in as Brazilian you conditions to seen for and growth we've not the from does market time-to-time it dampen outlook in we've so these Brazil said And before

have as higher recover we We expect. fully levels. what in seem always had that's we've we occasionally And and we said Brazil before, to to gifts

Ghansham Panjabi

Thanks so much.

Timothy J. Donahue

Ghansham. you. Thank

Operator

is question Our White line of next of from coming Kyle Bank. the Deutsche

Your now open. line is

Kyle White

see just good taking the saw demand we recover that to at that Thanks up to Brazil. Hey, and the question. and year? giving you Austin's the the balance where quarter, the I the guess this question follow deceleration that morning. on of through consumers wanted given I of for there you're kind confidence going what's

Timothy J. Donahue

not I and weeks terms, Early started starting comparatively see to April, months positive -- -- think comparative last in into already we're the -- we're we've but momentum to customer's three momentum, April, see comparative from only three absolute pull year-on-year. here X.X positive some weeks to some full. year, in

and we get quarter to -- have here So we'll the Carnival World well. in obviously and have as selling I Cup the the we'll year, fourth we Brazil and as shortly think summer for the get later season

wings again, we're the So confidence I before, the will that the that's time-to-time and I'll it going volatility can and in to economy from to -- confident it's I be come we've and to that volatile can an or -- economy Ghansham, seen as react pretty this back. as said their ebbs consumer say

Kyle White

And non much from much - you business inventory was well driven the last improvement to own? reportables. then food Are earnings you as sell-through just equipment by How the cans out was that quarter? this to able the of transitioning of underlying in improvement parse How year? it. Got drivers as

Timothy J. Donahue

quarter were cans the to we're flat, we paying freight tell cans us, whole this means made from year, piece What food not Crown, I were more in XX% bunch volumes which is you would to that however we are the for sell. third-parties paying, from significant buying That's else means, we of while that can profit that sold to last we a we're overall flat and a somebody in of were profit that come able Europe. not not for we bought year

being about equipment. about Kevin -- X/X the think million the a in we that's cans the that's noted, half and half. I X/X of $XX As the other half Think and had significant quarter net so gain, growth food inventory about other a a a

Kyle White

it. turn very Got helpful. That's it I'll over.

Timothy J. Donahue

you. Thank

Operator

you. Thank

Next in America. from queue of George Staphos, Bank

Your line is now open.

much. Hi, for very Good Thanks guys. Thanks the morning. details.

Kyle's of clarification question. Tim, Just point there, on

second about expected. as -- signal question made. Can said you give sold food of there from cans fourth to I network you be a it was transit were you your to this XX% XX year And outlook expecting February? for you -- a guess, said, something give this remember, the more I first rough were you of what question transit, inflation expecting then, more And terms year. of quarter, you versus whether in were you all at had versus you're my us expecting a was two-piece as breakdown only bit That growth for you is, you can profit or three-piece you your terms than right? I has currently? So in in -- more the and in segment changed where contributor two-piece, stands think Crown release us guidance

Timothy J. Donahue

to give just a was going -- give hate think I -- you I you a It's number. number. I to

Q- George Staphos

take Tim. We'll numbers,

Timothy J. Donahue

know too, George. your I'll on, will. you like, It's half salary now. I Yeah. just Come of take

nothing of Half nothing, Tim [indiscernible]. is

Timothy J. Donahue

be full business about million million think on to be $XX that we're and full-year, think -- up $XX of bit sold the still those quarters, fairly would for next to order the if I So little profitable loss in that to the of probably the going the we currencies a you after headwind, three we're two items transit of Kiwi year, headwind. about and a probably considering of were which net $XX tell currency going a think business the for up I we

Understood. And -- on

Timothy J. Donahue

cans. on three-piece Question

you said go you -- sit two-piece versus where and in ahead. terms three-piece of Yeah,

Timothy J. Donahue

We cans. in has the excess know, don't three-piece you George can any buy Everybody as three-piece capacity. market,

third being the which up a three-piece cans, was in flat, big our But that two-thirds, X% maker. looking cans at principally a self-made were we the percent, are And a XX% at of cans few largely quarter cans two were in quarter. three-piece. first but two-piece had Crown We were We're growth probably with in tremendously. to just two-piece up business the piece about

reaffirmed Brazil, Can could Thanks. in now right great, if as Ghansham a Beverage you is or my Brazil, one talk helpful. market outlook anything America's and That's to why might is within volume. lot to your obviously related or already just from that's America North been you very and growth in outlook, your Is to there's growth Kyle last that seeing dampening you're there Tim, questions feel And the broadly on products. comfortable a on which new you. relative concern of from that

Thanks talking peer packaging from you a fact your sold in of when macro quarter. the One about share rigid macro packaging of companies about today to downturns? substrate. Do luck what the returnable typically glass because one because worry all conditions, was that losing you good see you to different out at have the and in they're cans way

Timothy J. Donahue

Thank you, George.

the ml large term, So the I bottle. think shift in to glass bottle -- short XXX the see in a XXX you glass potentially will ml

Okay.

Timothy J. Donahue

they single-serve to or a among opposed as two in and own to people three having buying less share look have power their consumers beer can. As a

said is that, these in points. a are to Now, six headwind the data economy. months This having three short-term

the the economy I over economy, Brazilian think next XX the as for the a outlook for is quite global outlook overall bright to Brazil XX years. and

we remained so remain Brazil. very bullish we've to And continued on --

in the very become Brazil. turn, anything to going in short-term continues concerned We're exceptionally the preferred seen and not it think look confident at we've and if the increasingly in can it's short-term, we're concerned. I be the before you you package can to because that

And North America?

Timothy J. Donahue

North America.

very to first got selling I the Ghansham, in we to said weren't quarter. aggressive say I in As

got continue ask said to much at are customers cans or that customers As smaller, our our we've that, rates customers own and said, for higher having potential seen. other I ever than we've and

dampening is expect So earnings I the very I right it -- that think that would said really at last out, And a mean at I everything don't demand you Ghansham eating on I of some a as time call those isn't I perhaps prospect is perhaps, the noted, little, that, the of food we'd it's with that's compelling shot restaurants reopening but hasn't service take a the lousy, think good. see not happened expensive, to restaurants it of but now. prospect

going you nowadays decide think the and the where re-energized can lot we're we've a kitchen of beverages I a used pre-pandemic if is continue years it relates a felt at to being you to so think be period home continue really from I pre-pandemic. kitchens. that to being used post-pandemic, think And of for want when prepare will good it used in meal more in their own be to and and consumers is The couple can seeing strong. we're to a And food standpoint I can a ago sustainability we by as usage purposes

Tim. you, Thank Okay.

Timothy J. Donahue

George. Thanks,

Operator

Thank you.

line Jefferies. Our is of next coming question Philip of from Ng the

Your line is now open.

Philip Ng

Tim. Hey, your guys. a going And we little an you supply impact But any that's certainly of your contracts renegotiated a Europe. to Europe in of of export your mindful called should basis. peers issue of. large energy, energy to in commodities, costs morning. in as out I bigger conversation it that be Good including guess we pass margins of are bit little on few a speak. clearly and a Russia, like on have real-time as How kind your are freight going? a sounds more And push trying energy

Timothy J. Donahue

renegotiate we Well, I think contracts.

and those We materials, energy, our we as costs, includes [indiscernible], conversion the compensated regulated any in to and raw steadfast unregulated freight, of raw that materials determination labor, well other that in fairly services be as the goods are etc. for provide the and

do we contracts. however, interim, I So in have think the

seen supply materials adhere in likewise, that, Having expect global any expect not to the sites disruption to they contracts, Europe. of raw we said to and us our including adhere customers ours. and We our to to energy our to their have in sites, the and suppliers

Philip Ng

strong it. to contracts color business [indiscernible] standpoint us in that contracts will it the That's my Got good reset is get have largely business think expecting you're were? anything hiccup certainly, Is be on it your longer-term, you've in And more in QX. your helpful. a outlook a so question to there? you cyclicality And this that seems more then an medium, about that forward. Thanks little how one-quarter Can to of you it inflation pretty like lag of It lot. Curious, business? contractual bulk a those when helpful the going cyclical. since done the from pass-through How moderate is results. owning tends the remind still

Timothy J. Donahue

Thank you.

First part of question. the the sorry, on Signode. contracts, The I'm

commodities larger let's for have So of escalator order say business index, the is proportion, overall part, they monthly customers The contracts where rest be, business. the probably from have of But a will on whether up that Signode where where the small hot coil rolled the paper and will or is or most makes time-to-time. it's clauses. based by resin priced XX%

into XX% XX% ago back XX% and and having only it industry food that, beverage metals So business the we before they selling business principally be to to might the in and And to as that have to having price have -- industry, owning beverage, to away supply products. metals into can it, even the metals industry. if maybe in we more do XX so X% than greater owned business years ability then, move consumer Since we steps to selling taken XX both rapidly -- now. other being food it from the significant were was the business. much prior supplier do the XX% if we And said with the owner, the they're

backlogs, wants I the nobody talk word. the R to do think I about think

Timothy J. Donahue

to that businesses, equipment think also provided the and disruption can-making so any for Signode, the even not little and bit, I see only it do little a I in George backlog services to on for year. but we backlog this slow don't is forecast the things to a take while earlier that will clear large for tools such our if

Philip Ng

a Thanks Okay. lot.

Timothy J. Donahue

Thank you.

Operator

Mike in Next of Mr. one Leithead is Barclays. queue

open. now is line Your

Michael Leithead

morning Good thanks. guys. Great,

there. on doubles singles it's that stands or congrats the just as within really transit your multiple Or portfolio do Are the overall packaging them there guess about think divestment, I today? call nice you other it First portfolio? transaction like how

Timothy J. Donahue

I transit for would industry. under But commodities. trying other umbrella. that an in whether would There be the but anything And the think of are self-contained, one I software customers software. was focus was business. to one, operates, in me it's be also Obviously metal. the not or signaled the the do. transit easy to customers The business the going improve easy for partner in numerous at businesses and so I of couple software was Crown that looking years right fairly the you it customers service corrugated portfolio to to who Small that always business it those the the on the get is many business operate. grow say We're to to inappropriate equipment of reason it see is businesses. it in of was probably And to trying think and we business. we're continue multiple, to it is improving businesses wish we're for a the portfolio than are that in the for took that And the done I is app, find I

Michael Leithead

then But it, strong, recovery guess any there. price European Great. cadence back of is And -- gives Beverage, it the contract and demand just if go there? should appreciate quite filled could just for hyperbolic the Tim. are you're market these second, almost or how to sounds like leverage market expect of Appreciate we recovery I we gone sort I you faster structuring? the out.

Timothy J. Donahue

Yes.

what capacity let's any I of -- spot, October and don't our price get we call a market. it of in or constraints We third we a it the we whether think those are it we year said back excess 'XX. think it capacity, we of to us at balance you right so in it years a within or -- excess about that get I contracts the of exist is So February the couple have and take it get cans said get next could we'll now. that If selling we today's had will

Michael Leithead

it. you. Thank Got

Timothy J. Donahue

you. Thank

Operator

Our Fargo Wells the line of is next Securities. question of coming Gabe from Hajde

Your line open. now is

Gabe Hajde

Tim, morning, Good Kevin.

Timothy J. Donahue

Morning Kevin.

Gabe Hajde

I a there commentary normalization practice too not of question I in I marry UK. above common some to trying had can portion was on about volumes think but I much your up, focus near-term, capital. you'd business And the know on have for mean, that large a I'm the to it's contract before committing

underlying So And interval if just bit guess confidence seeing or better. better you're something that production or then is in profitability curious driving that that? there. and Was and volume what levels in that demand happened? you What there apologize. country, future I I was demand Europe relatedly, else it, a trajectory little was I But in said missed

Timothy J. Donahue

away So Jordan. to capacity than of had the the the It to can. not migrate into largest capacity, remains continues in exceeds and capacity. and substrates principally lot existing forecast demand that's QX better other There's volumes market sold but the market announced we out Europe. in UK going cans Saudi from can UK for the Arabia a and is only the

bullish we're I So we market point. remain UK on to really think the want can -- at say is very this I all

Gabe Hajde

those way and in conceptually I then then products were is the I if there that earnings guess is are packaging impact QX then protecting steel for the uses or you that the quantify said And to I in back again, you're Thank transit, the QX for or missed I volatility that. price I opportunity the can think you road items know you've you expansion from But Do the apologize you. high-value getting ensuring on margin get suspect business. that we able it. I inflation, would about it efficiently And transit extent saw Okay. to and in

Timothy J. Donahue

Kevin inventory gives transit inside probably described two million, grow four obviously inflation. and we're on trying you make think got the do million or what and better, and that X side, X about always to X earnings, you to you're of margins. XX that to tinplate to a add recover $X of we trying sure to had or net I XX we're business yes had the grow your to obviously transit, in headwind got, headwind million expand a you've or also we about answer things We're we the think little question trying trying

environment then margins that is environment that's higher in of margins raw in Because to I that? significantly up. an denominator are down, be lower we pass-through, think, versa XX% the i.e. Now, the the margins year-on-year. at go come material where aluminum costs, effect absolute higher percentage of appreciate when, the percentage I vice tinplate likely Do do and when commodities

Gabe Hajde

Thank you.

Timothy J. Donahue

Thank you.

Operator

line Pettinari The Citi. next of one of is coming from the Anthony

Your line open. now is

Bryan Burgmeier

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

in you Europe that are unrelated two raw an contract moving throughs - You've talks see well those and in expect to are material forward, announced new another? Is indication so. pass going that your capacity adds Europe renewal in the or last more or to one month

Timothy J. Donahue

always Well, related. think they are I

commitments we capacity add notion enter we're from But unless and it's to the see by willing also existing a reflection in compensated fairly I for think of demand products. volume that going underpinned that into customers. customers to it's who new are the the we're not market

So the built more connected, answer you it is, it have didn't is but it if wouldn't volume.

Bryan Burgmeier

given already, will are in sense. products? fear, Europe, it consumers if Last possible. Crown, you your portfolio? In I seeing question not seeing Makes And is signs and would lower-price beverage trade how impact priced it that beverage dynamic down to any the it. say trading towards lower for lower-priced are down U.S. you me. drinks of Got soft

Timothy J. Donahue

store and labels, are a we described we're the Bowling expand happening it in do what those seeing head, it's it. strong marketers point you very shutdown. of capacity who from I of store the by in brands We happening, but private absolutely with limited are national and I'm certain temporary the that now, off strong for obviously have label labels fill exponentially to to and can some products. right cans But cans. beverage So Green I brands demand also and regional top can't our business beverage the very other beverage is I food, of can my can't point not

think well I in that yes. that environment, do we So

Anthony Pettinari

Got it. Thanks a lot quarter. in and good luck the

Timothy J. Donahue

Thank you.

Operator

Next is queue one of RBC Markets. Viswanathan Arun in Capital

now Your open. line is

Arun Viswanathan

question. Thanks for my taking

Sorry about question the about just market. a I ready-to-drink that. have

-- the of system. expect that's to just your Do it with high single-digits? you that the markets, that to of growth. and place? to growth one how few seeing negative have for non-ready-to-drink and because Is ready-to-drink I that And data within what we're So the guys you're guess seeing markets the mid-single actually own square continue cocktail does show in continue Thanks. you comps capacity the you are seeing scanner

Timothy J. Donahue

for maybe think I couple momentum. over we've year, some a about of years. talked up ready-to-drink It a picking a is little

so with footprint momentum cans can of the the to grow of also capabilities, is so and and reasons an beverage while in the obviously, volume we've marketers -- incredibly expanding the one and for slowdown a consumers the shape of industrial of for prefer, Some announced business to of but offsetting the or of has in capacity the the that these can products, yes. or all the bit the the types the market, growth those grow the beverage in XX% [indiscernible], business all line and, many as sleek drinks of size growth that of demand can XX% important slowed [indiscernible] market, even are of more part the [indiscernible], it's sleek or little maybe

Arun Viswanathan

-X similar weak follow-up, the I'm as seems CSD and way. should continue, that market for that thanks relatively curious and as growth That's Okay then to and about across a years, have expect Europe, or versus turned a in showing rates, -X many what was market around. North is [indiscernible]? you maybe of to expect America if the and it we far some growth as CSD positive Thanks. in Do and a

Timothy J. Donahue

you for CSD? rates So want growth

Arun Viswanathan

in to Yeah, if it's across just positive what expect growth if you and I'm curious continue you expecting? rates regions, are CSD

Timothy J. Donahue

a I that is start into is we think can. entertain conversion going But more basis. CSD we think CSD you, some you expect other, I beverage the out, certainly, should most growth. with think pretty in a for bullish and think responsible the want on fairly It see than But it CSD, with if tell cans some who of hope global get And respect in markets. uptick bit the you I markets I North glass to in decline is we to on back certainly big environment your given probably growth conditions. the from you large to away the point more showing growth hard globally the tell do America, on we're growth mean, the in I the all just like a thing did they've Europe, numbers, as back I and I be exact see from respect that sold-out would they're so to that And several that growth PET come bit seems while. a been we're more would think to showing been But to us the in now two only is America. I North to have good global fairly marketers analysts. one products in right the talking for you tremendous

we over So it's absorb industry to going us take that where the get time. as growth an levels to while to the come the can we can a think to will capacity

Arun Viswanathan

I'll right. turnover. All

Timothy J. Donahue

Thank you.

Operator

Next of from question is of line Parkinson coming Chris the Mizuho.

is open. now Your line

Christopher Parkinson

you. Thank Great.

on PET. environment the quickly and comment the your on very Just

even been a base, off incredibly continues shift just an over Miami could versus that distance? that Have something shifting a is any to agreement low in of aluminum the happening signs and of what's most given states to that Pepsi material linger Just or California kind an of plastic. couple be notably actually has with there a other in Beach airlines there and of off and few incremental somewhat even

Timothy J. Donahue

I think. lingering want to I distance No, in as don't say it's you say. ultimate the

think a just United regard. more least a I think point in are of a I say to in some some take couple states. At if where the momentum lot that jurisdictions, the there. let's in are but There what you there you States the out see momentum is we're going states, will will, little jurisdictions, it blue longer in

I earlier, 's think see that But we're question. I momentum in all throughout to said as Europe, to going Arun regard.

think have get those we be in is who ability thing to the industry more from for accept from to think an us conversion environment our That as that mental greater I rapid capacity environmental wants fashion. driven that to limiting concerns. an standpoint

of of all as that you've couple an number the significant So we're last we're announcements industry, over seen years, a making.

I think significantly are it's by the pretty substrates. marketers products clear product introductions other more towards aluminum can existing that beverage new or marketers and new weighted have

equipment the to build as time we factory trying industry here there, build equipment, an an trained clean industry we're as doing it procure to and takes takes to best and to to, the time and, we're planet. can up it workforce, takes a it we're time get help So

Bryan Burgmeier

question, already. Got hit And RTD real you just quick a on it.

seeing last on very you're seen 'XX perhaps as in you. quickly, European as your and you've North just the what energy for just four remainder America what both Thank drinks, longer? outlook of well Just the and you hit in could months

Timothy J. Donahue

Thank you.

have we So are do customers. energy we drink --

a looking on expand energy energy the just business. both that, right exploding you've on we mentioned now. drink that -- -- have market huge We don't but We're drink continents have and a to both

outlook is the energy So high. for quite

Christopher Parkinson

you much. Thank very

Timothy J. Donahue

Thank you.

Operator

Our line Roxland Mike of is of from coming Securities. next the question Truist

Your open. now line is

Micheal Roxland

all and Tim, the Tom Congrats. good Kevin, the quarter on Thanks. despite takes. and puts

them those lot What chains. Just two recent lockdowns. improvement already my a material really you have questions that recently? chain seen the a COVID just seen, of Chinese been supply any Have were supply you of some ones was of any There's asked, that constraints transportation, improving from some to in about prior obviously, quick have talk just been here. bottlenecks? And

Timothy J. Donahue

has caught Shanghai that the the Port something been for second. off port put weeks, that's a guard. several let's happened one aside is Shanghai industries many last over month, So that's

We count of are that the think through so be but also so they town that. from working we're some is far. trucks businesses And the that our might difficult, get hope a ease. it's can't managing China effectively port The I province [indiscernible] in open, but or will tension

standpoint still in the from headwind can the to we in tors doing screens, I equipment the components can the big much transit equipment think we circuit signaled short that a select chain to that is globally we've other need some beverage Like equipment, our seen businesses boards, display making of and from equipment a for and or supply suppliers. try supply are best many that of like procures and we few industries, things as

suppliers tight. we the Let's that's do that. to we try still our we're best that as meet doing customers a all But be honest, standards few the that to and can remains require require, that so select

Micheal Roxland

one -- does you or Got are last terms on quick expansions? that lead then your planned [indiscernible] Just -- On or respect and put making, at longer any point, getting you. Tim, follow-up. your Bevcan there constraints business, metals times there for to you if own in to to is with expansions And of that of the given impact that? the if delays any risk procuring need things other the make have to that procure that So

Timothy J. Donahue

transit second I we Martinsville and slips is doing try So the It's February this of both to had the might we lines up goods from to only some do service early second what tight, to construction -- 'XX with supply But can customers. as we'd others we're said, 'XX. have equipment time-to-time, be. year. think, the steel. that the procure our really best that Bevcan into slipped our in have or thought equipment deliveries from has managing. to I line thing been from or of But And service we in we've and would running customers, Martinsville, but thought slip are the days some into, had line original And Virginia will XX XX We we

Micheal Roxland

the you. luck the in Got Good balance of year.

Timothy J. Donahue

Thank you.

Operator

queue. question three We have in more

Shah is Capital one from BMO Our of coming Markets. Anojja next the line of

open. now is line Your

Anojja Shah

Thank everyone. you. Morning,

Timothy J. Donahue

Anojja. morning, Good

Kevin Clothier

Good morning.

Anojja Shah

Morning.

this elevated lot demand glass hearing We're glass wondering. a in major morning weaker producer. Just about from a

that, Mexican around we seeing you glass Given an or business in Are a get update interest pickup business? your can on that?

Timothy J. Donahue

The So our long-term yes. X agreement less tonnage, do again, to the factories, more volume, We we furnaces so customer. we one try on And X we the make proportion, significant you is bottles tons. bottle in answer our are with much And depending operate are. type under a furnaces, is more tied of best a constrained. or of the through on can to push but through, we're making. push only Obviously you depending capacity

service non-contract say, But under customers, there's our contract other quite love many, obviously you other we're well. have So be spot service. as doing a few best customers, to as demand that customers we And high. to then we'd to is able

our as but strong. follow Latin see least in markets do exposure of America, glass, American quite markets. it don't we we it Mexico, Latin other follow glass at the because We the in For is

Anojja Shah

lines all the retire then that I'm in you you that And enough new is two Agoncillo demand that. those Thank lines? there steel lines. Great. there correct, just right now, steel for those have for I in or announced to Spain. Is think If idea line eventually you steel lines

Timothy J. Donahue

the -- was It's up decades set was region steel you steel the in ago. It or many beverage are where reason, correct. are, So can a we plant towards Bilbao the a Spain it of north steel facility. as -- for mills and that

now. have in plant the We beverage making in can

line. We we're the steel depend Spain customers we putting expect have still aluminum when we'll one willing aluminum but steel will and to price and we versus and line the would but between depend in line, the for if be time. whether wide of the -- to not, it line, those steel steel may arbitrage on aluminum can. a aluminum, we or Regardless keep steel Depending take of on retire second a in on add the steel that in

Anojja Shah

much. Thank sense. Okay. you Makes very

Timothy J. Donahue

you. Thank

Operator

Morgan question Our from line Angel is from of next coming Stanley. Castillo the

is now open. Your line

Angel Castillo

my question. taking Hi. for Thanks

the you Just one, given number? us I guess. or any kind update full for quarter, think global year -- beverage a shipments you'd than Could year quick on me. last of excuse I the X% greater last

Bowling you that have full-year to see we have in online, we it's and coming coming cadence in to how coming Green how shipment do that some these think and plants seasonality, again? do the you numbers also is QX, you should -- back about those so on where some whether just of but So think about

Timothy J. Donahue

X% X% we that -- were year. this grew so we we you, thought here, year. at let's We we told grow we something last felt initially looking We're X% -- another say

I recover does and softness think we're the is you, the just with given think today, given on, it the with Brazil. as in honest X%, in X% maybe Brazil in goes ourselves QX, at saw were if year softness if looking Brazil we the now and I we being but QX

Angel Castillo

the some impressive Understood. rates of that, still wanted million, that so able we any from you're cash to benefit curious see as And and all it's softness, what or to the switch interest rising? are flow, impact and puts to there, then maintain within just given pension takes $XXX

Kevin Clothier

coming reduce way very than 'XX easiest chain the billion, We've level we headwind guidance, flow to cash to the all EBITDA over inventory is typically carried and to inventory there X a from million of the clearly we guidance supply our a have reduced but all had. issues. into high XX up place make due to that more you ways inventory. terms have XXXX looking In we're the for had We've

really main the is that item or will the driver, offset So the EBITDA. main that

Angel Castillo

Understood. on And pension? comments guess any I

Kevin Clothier

in get in our be the part year, as free cash The in the $XXX million proceeds settlements we guidance, additive. we this are on on flow the as part million pension, year expected. would plan of through thing expecting and or 'XX, that this of UK contributions of through one of Pension neighborhood $XXX first to that's

year. we've press If proceeds you back added we've look actually gotten so the this that at release, far the

Timothy J. Donahue

cash So recovery just UK to on [indiscernible] does just the from pension of make not million that, the we're assets the plan. settlement include clear last free year's XXX pension sure flow illiquid the of

immaterial pensions. States basis, Canada about than it's the global So a plans around the in really we talk very other plant and for world when that, on the and we United have pension

Angel Castillo

you. Thank helpful. Very

Timothy J. Donahue

you. Thank

Operator

question last Samuelson is of Adam from in line Our the coming Sachs. queue Goldman from

Your line is open. now

Adam Samuelson

me you. Thank yes. morning for in. squeezing Hi, thanks Good and

Timothy J. Donahue

morning. Good

Adam Samuelson

are the lot that in is transit the both still equipment, just get still business about in on I'm of the visibility businesses to growing equipment and [indiscernible] today? if backlog, through was I just having year. trying transit sense backlog a are sitting beverage the Where book-to-bill on can the we you especially talked of and a visibility -- wondering with rolling

Timothy J. Donahue

Yeah.

that million backlog. think, potential the business we're else? backlog, backlog interest think always procure too those best does lose I $XX if I ship backlog or need and the business, As stay out when to go does the buyers trying now to was a business, it do we So million we to remain $XXX somewhere complete that stays we do -- and there said, or I too I concerned big for long, the It's it components are, can transit we it's orders the the the $XXX acquire we're million.

the product is that introductions, many several for of backlog quite customers new retirement enhanced product equipment and introductions, But users of Some is years above. the of looking have the that upgrade, had are high. to all

Adam Samuelson

this orders longer are specifically shipments lead point, exceeding for still equipment? bigger at guess the especially I And

Timothy J. Donahue

Yes.

Adam Samuelson

also that And the true is on the right. equipment can All Okay. side? equipment beverage on

Timothy J. Donahue

not, Yes. hand. have on we Believe or more orders it

in New orders line Yes. for we'll beverage out can push year. specific this of the and pieces coming

Adam Samuelson

helpful. That appreciate really color is it. I you. Thank

Timothy J. Donahue

Thank you.

thank Okay. Carrie, much. very you

Bye call July. concludes of now. thank that today. again We we'll think you in with joining and speak the for I us you all

Operator

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

disconnect. You now may

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