Crown (CCK) 24 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Kevin Clothier	executive
Timothy Donahue	executive
Michael Leithead	analyst
Cashen Keeler	analyst
Arun Viswanathan	analyst
Anthony Pettinari	analyst
Ghansham Panjabi	analyst
Gabe Hajde	analyst
Jeffrey Zekauskas	analyst
Philip Ng	analyst
Adam Samuelson	analyst

Call transcript

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Operator

Good morning, and welcome to Crown Holdings Third Quarter 2023 Conference Call. [Operator Instructions] 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. Sir, you may begin.

Kevin Clothier

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

If not available on you it our release, do website already have at crowncork.com. earnings the is

we as the of call, statements. could such results materially Actual making this On forward-looking earnings release, a will in number from statements. vary be

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

million the from share offset a third in lower $X.XX $X.XX positive translation to were prior costs $X.XX per were were from prior of earnings quarter Net raw most pass-through currency other share the impact businesses. to compared in as year, sales in the $XX down X% quarter quarter. share unit foreign by sales higher Third were in million XXXX. compared volumes earnings in Adjusted quarter and in $X.XX volumes per material of $XXX unit lower and Americas Beverage the

at year's European million cost Packaging. America, reflects million and initiatives quarter the the higher in increases $XXX cost of in compared the in year $XXX benefit recovery prior volumes contractual to in prior the of unit beverage North and inflationary in the Transit income reduction Segment

cash leverage prior by flow $XXX and the higher Net of X.Xx, year, to operating the to result income the operating driven management. million million first for $XXX X working a Cash the third in of improvement second improved from compared months better of half 'XX better quarter, turn quarter flow. capital

share of a $X.XX to $X.XX projected share. $X full to be year EPS $X.XX adjusted range quarter EPS Fourth of in per to adjusted is with per the

and pension to dividends million net guidance be million in interest approximately and noncontrolling $XXX $XXX noncash of year 'XX, million, noncontrolling approximately XX%. approximately the average $XXX includes following: to $XXX tax compared interest a of interest, postretirement Depreciation million, approximately approximately of costs, common $X.XX XXX million. outstanding full expense rate incremental expense and shares $XXX Our of million approximately

of I'll is million, spending Tim. $XXX call that, expect and be With turn capital After free at cash to year-end the projected leverage we X.XXx. over $XXX million, to currently flow

Timothy Donahue

Thank Kevin good numbers, and so sea morning to to and you, provided call then a questions. Kevin, be just open everyone. I'll the of we'll brief,

as that to Transit larger last night's X in reflected release North was perform just as continued performance Kevin quarter in Beverage, As expectations summarized, offsetting Packaging and is all each well, aerosols softness and Beverage our businesses, earnings in line European in third Americas of with Asia. American

quarter, year For third from income the segment we fourth expect quarter. XX% improvement prior improved challenging the a similar by in and quarter total company

the due million leverage being by of Importantly, the through in X as months, prior X/X noted, is to turn Kevin free cash working just reduced improved position a quarter. year capital ahead X-month an period $XXX and with net full

to acquisition leverage As Kevin early October. Helvetia completed net year-end estimate in to the X.XXx noted, around after effect giving packaging be we

demand prior early And advance growth are income to fourth the maintain year. while are by North than the for American estimate in prior and over year. X% the X% more the North we of XX% quarter, in unit we year. up America over the in still firm our remains months, full helping the X third Beverage in advanced Americas XX.X% volumes quarter, volumes segment Through

enter Brazil, before positive Line and X Line commercial the we scheduled selling startup we as at month, shipments summer improving the company's Nevada, this plant the the Earlier commenced to year. Mesquite, remain Post-pandemic be of conditions busy of end season. X economic in new appear with the from in

prior the was European in business third year inflationary helped year quarter. prior the pass-throughs over challenging the Beverage as from significantly up performance recover Income margin

underperform unit down in Europe the market. weighted were our mix, more towards volumes volumes regional as Southern flattish which sell is across Our segment the a X% our quarter

More Asia in important adjust Cambodia as country the operating restored were than volumes, with filled conditions. acceptable across firm Pacific weakening remained Volumes their Unit margins that weakness Vietnam inventory continued X% fillers down across business. have China look economic into to quarter. been the to and goods across volumes in

as consumables solid and XX% Income through in was in higher X performance overhead than with months costs equipment Packaging positive lower price/cost Transit deliveries up continued reduced volumes. almost A the combined of well management, structure, and more With with cost quarter a for tracking to very performance. in business year flow further XX% industrial sales activity at net benefit the income improves is positioned the cash streamlined future. more another strong as full offset

equipment and can-making very aerosol Performance XX% by tinplate with can aerosol the American across quarter prior soft in to a of the volumes continued be impacted North year. to demand

quarter quarter So delivering third was leverage is fourth the earlier, in summary, and said as as debt EBITDA leverage down percentage similar by improve income third reduction. expectation should performance we a that and on and our quarter, further plan, up,

limit you that And have questions before possible we yourselves would as we questions, open the so will call questions, take please. an And now opportunity. that to we X you that, to as again Elmer, ready with to ask are many of

Operator

Barclays. Mr. is from our of first And the [Operator question Mike from Leithead Instructions] line

Michael Leithead

potential right early I XXXX about now maybe to speak but world drivers? company-specific thoughts a any uncertain is can know the or earnings Crown's bit you

Timothy Donahue

Why February. don't we till leave that

process. we're complete budget complete. we're I And Still be around. in the until better -- moving served say process, think not that we early think we're I yet will if wouldn't but things we're some the I wait

Michael Leithead

on enough. then Fair just second, North And America.

you outlook et what sort are, your year. tailwinds, company-specific market kind full to own for the volumes speak your -- but the obviously, your North today. reaffirmed Can your with in just of have cetera, customers you for America just You've conversations of demand,

Timothy Donahue

Yes.

some others, but mix, light our different carbonated weighted than little water. CSD a more nutraceuticals, the So perhaps of drinks, energy towards

to cans as long continue important they see an going And as cans. element benefit in They to as journey. sustainability can the to push can. to Our customers their continue promote continue we're

we obviously, 'XX. higher I we've number And that positive outlook very can similar here probably absolute a for 'XX, base, see would today, absolute to growth QX. as can So saw we but say level of in the got growth the we on sit volume a of in the

So significant can again. growth

Operator

Next question from the from is line Staphos of America. of George Bank

Cashen Keeler

Cashen George. This this had We on is actually Keeler morning. for conflicting calls

prior any around just change changes Asia that first I biggest revised guess what guess and Was in relative guess put possible primarily aerosol? expectations there? expectations? segments is the And So numbers on your guidance, I the in to to forecast I saw it

Timothy Donahue

for performance the and prepared release also I aerosol and I said both North the and as think to I somewhat order perhaps think down $XX and magnitude, back by million night's Transit. America it's we order the X magnitude, we to release, But X if -- in as of we Kevin when than in the $XX talked of you offset in saw July. what would it's Americas million in the in the comments, and last those in in put X better Qs you Asia, businesses said have business

Cashen Keeler

it. Got

from to from is of an in the earnings revenue here? just standpoint then way a there acquisition, quickly about impact think And terms the Helvetia or Okay.

Timothy Donahue

what paid you a can below pretty and especially to line, similar plant, What talked others with we it's what following I you've value level, can tell a a company around line -- So million. plants. we what -- plant build a haven't it is end come in you'll one-line deal been for for. if a an we're conclusion, $XXX an the we significantly line. to high-speed costs would the high-speed quickly about We paying that's And build that can are to plant with good at can paid

what ensure all work it's fourth little we plant we're spoilage into of consider light time including will at. their only doing slower. We year up they're next much-needed And using would preventative and the from because standards to Crown and maintenance do clean where have right the a and quarter, and that down to plant is efficiency now some this KPIs, improve we're back the what

of were -- between million income. for take million what they their see about depreciation, -- lives. using order look we and but $XX depreciable So got the segment obviously, somewhere And think it on to at $X a

Operator

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

Arun Viswanathan

I line to with ahead in volumes with have line American expectations. that. in bit quite to you North looks little a well. it you expectations appear then relates are overall, your like recovery yes, strong, as be been does your on profit Maybe And so Obviously, Europe, there. it comment guess, as promotional your on just activity could

before that see to the then year? into how million trending you growth EBIT? expect on in So for do that low Europe volume you you've expect specifically, profitability that seen guess, I improve do North and America single-digit maybe $XXX next

Timothy Donahue

Yes.

of against And as and quarter. we market were going So one call the North down X% in for did that last status as questions. America, can these market. stable that's X%, a other year's the because But America, I markets market plus we or we third thing to the the in around can I I'm stay first the Certainly, is third XX.X%. that the maybe on on numbers. market quarter well their would quarter as up North quarter North year. historically where the probably say forget my years was But be world stable down emerging we a That's volumes could X% year third American last for remember as we worst experienced in that's big we or based and big like never minus North as anything American big last the have XX-plus said, as

much half weak we today last to from October, early gain second the recovery this extremely levels perhaps really as we May, third saw pushing up year year. had quarter promotions their So and beginning balance, said promoting of in here last we the on customers a year. as roughly quarter And are still as well the than as pick sit And was we the third we call greater at quarter. into in an

that's So that.

you yes, a you income in to 'XX always be be I going to not. initially end halfway the 'XX, -- always to back plus couple to think your we XX% minus is the I currency is year, we'd be level, told all we what We're fully going On way thought to questions the goal Did estimate of 'XX back think and probably that for or our income 'XX to that we do. or hard Europe, bucks to currency, I told the of levels. next that closer level answer to through of back

Arun Viswanathan

have that was Yes, If one great. I follow-up. could

on CapEx. Just next year with that on you free lower cash flow point seeing are return, inflection capital the

cash of allocated to more you extra kind they share Would potentially? those how use be expect do So free towards flow repurchase dollars?

Timothy Donahue

Yes.

industry, can to generating to and a growth pay pushing in a used scenarios, the industry, growth, EPS stock that lower X% we've year. and using back of XX% buy So method a packaging cash historically, down flow the XX% generating XX% debt to each and lot lot of of cash,

increasingly, to be lower go I likely prolonged we're time, than our many think and X leverage to are and where of X.Xx. for to given shareholders rates they're prefer might period stay hearing necessarily a that where that they likely where to from would interest they're need

And to look at that. we'll so continue

the due. the entire In at of and have it's maturities that will maturities than back is but currently bonds refinanced do so those higher debt we point. have just coming on has -- better now. the than I think most paying balance if it's the clear bond face you this at our coming buying landscape high-yield rates upcoming maturities, of that sheet not be due, And stock we down math, the not And

many we in to our calling shareholders larger our especially leverage of past. closely would a listening have more are we the comfortable now for than who been shareholders, less are So little with

Operator

from Pettinari question next Anthony from Our is Citi.

Anthony Pettinari

talk about for by And rates kind given maybe broadly preliminary I'm operating 'XX. can you've CapEx 'XX, guidance wondering of if you region.

doesn't Assuming include greenfields. this CapEx big guidance

wondering the without of Just be of next where big about over to years if you able grow couple may kind volumes you think you adding could talk projects?

Timothy Donahue

and all operating to And good quarter a say I healthy. push customers quarter, more got I come would the capital. plants United this in I imbalance about market stronger. grow We in their XX% we're without have And can as little productivity can we large Listen, through think go the supply-demand We as little adding continue they get clearly, are Things they're think brought to to be Yes. North Virginia and there's up more curve X every capacity. learning cans I Nevada. see the that we America. if think imbalance in year, second grow. America the America. that say back I'm but healthy fairly to North that the pretty and currently of cans, -- was in in thinking and the industry we out improves XX%, saleable demand. a around would are line, a rates end third supply-demand don't I XX%. going bit can We North a fill And to spare of healthier. going States don't

probably other That I there mean of markets, is markets think in are slack. most doesn't the healthy. little a not bit

I than -- down GDP turning but little the think Brazil down to seen a rise spending we starting improve positive. coming the slower starting as Interest rates consumer albeit a a prepared is little, a said past, economically. in to remarks, in little, little, coming we've unemployment

for in well market have are so growth continue over last next X the several the positioned to to Brazilian And the meet we we ongoing the decades. as and others years,

exceptionally market Vietnamese the year. Obviously, this has soft been

onne I give this that compared about months year, the fillings could you Vietnam is in XX%. for number think to I down X last year beer

in again, U.K. is that we're positioned can So large as well a bringing plant that now. X-line the very of Europe, in we Not capacity. market on grow. all to incremental recovers, And are

the But in as there it the and that last plant capacity replaces well that added U.K. Italy the there incremental early year. late we we're of. out is Some in other this of capacity Spain or year moving as certainly,

X we've So next positioned years. without this number spend having or to for $XXX talked than million about the any we are grow couple well that to more

Anthony Pettinari

on moving aerosol. very then And Okay. outlook understand additional gears. process? on And just aerosol what's switching maybe help that the are Can in just maybe destocking, this you going us we kind you can of If any with helpful. and That's forward? give color is where

Timothy Donahue

Yes.

before, economically more mean, of product. So as an we aerosol I said is sensitive

the dispense way bit clean more about can, to convenient it's you way, the consumer. a aerosol product, expensive If convenient think a very and really for little a albeit

need So consumer things They the air shaved ever tighten don't to to need buy spray, up, bug less to are their than buy belt. start starts to tighten before. and man they don't less shaving freshener,

shave bar couple a to just buying little the spend and or you a your soap, with money, they comfortable, they're cream So not your don't face, if as don't nicks have spend shave of less you cut blot cuts, more a money, you much guess. but maybe the on I

area. said having now that's So that, one

So economically, the the -- down. is market

aerosol. steel talk moving aerosol more let's some the a And will more other steel been from the the some market slow can suntan down. Slowly, to It's in women's that's products from everybody move. that's There's But else. a steel aerosol would and, of, than for same. I the slight think I are to Historically, tell is expect of onw let's that lotions. company aluminum to also move aluminum. economic-related anything say, now other products you'll you that products probably say,

Operator

Baird. from Ghansham is from question Panjabi next Our

Ghansham Panjabi

American better? very going the et So your promotional that was Was in XQ, in Was so, I And you that? itself And XX.X%. do line drove internal what grew back Beverage it hot Or plan? it guess the America what to cetera? up North with then estimate in the quarter? market third Maybe spending? for a if summer, North

Timothy Donahue

handle we we as touch good QX. nobody would were of We you to to was be a got we XX% told this significantly I probably I kind pretty it. thought say anticipated. believed -- going We sat Ghansham, -- we So on July, XX.X%. in better up than a it what we're here in when

by And better-known than a we companies large drink point and be. more would soft X just sparkling of increasing X.X the number as carbonated points we're brands. of the and thought water as maybe that's some higher we or well promotions So regional national

up if And this from market, for I last the guess. domestic year, percent. As the include we few we percent. to anymore for flattish like CMI, were guessing. But Maybe imports would I've few about purely to to be the market, think X%. guess you at to we you got That least data market if domestic almost have at to don't up nil a point. feels were was be my a believe year lower imports but it are producers, up total for get compared producers, this I'm

Ghansham Panjabi

Okay.

made then Okay. sense. constructive you again, to And That are on specific there some But new America. makes comments players. supply/demand, North

and conscious, customers being inflation. much et resetting are of consumer is Your price purchasing dealing patterns cetera. with persistency more The

think just I'm maybe of very next renewals next contracts the years, current lumpy years. contract renewal? up players as the couple trying operating to for it the should where we over the between we paradigm kind as industry we of are come a do As have out the to assuming expect we going volumes about for this different relates forward, think environment X

Timothy Donahue

Well, still I today, Based it project It and does think into new we market. appear by going anybody doesn't -- is to I one go the don't lines the Mesquite on have perhaps into and more capacity of capacity the environment. that the Midwest the after any not the current other entrants. of putting know operating any capacity of one installed

their manufacturing in domestic sustainability imports have agendas cans. installed sustainability served we've a based sustainability that now, They without customers can. goals we're footprint domestic got the let's market we're a meet. competing and capacity, and promise to our that -- that meet they market are just So goals the which all lack promoting They on cannot say of by with and the entire now

why on currently based shape only I will good feel in and that, better. that's pretty supply/demand that So get

part, most the don't the due of maybe for contracts until we can't everybody, end coming for I Now talk 'XX. any but have

of couple out. So years we're a

perhaps X, for if scramble possible, you should a there's here why, is don't contracts, volumes as want there's any outside I to of Ghansham. then anything think that we growth today, and/or concerned. be incrementally, overly say, growth. as years, existing reason we sit out X.X But there's, looking Now But

Operator

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

[Technical Difficulty]

Timothy Donahue

Gabe. careful a problem, Just be got ahead, you've connection that. Gabe, Go of

Gabe Hajde

better? Is any that

Timothy Donahue

yes. better, You're

Gabe Hajde

can I indicated and revisit wanted you it's regional a bit to player. Europe appreciate ask I little a by and I think it market market flattish. a -- about vary

market competitor I plant where that It specific little activity I think it's are second a shorter guys like there's 'XX. maybe adding a think competitive the would a see the a like are customer that's in point we bit set there. little because seems contracts might be you bit more It at this seems pretty Chinese but well there.

speaking Are highly competitive utilization. You're of of kind confidently of regions the like anything next that? revisit I'm activity about there just or the antenna year. kind specific in pockets or about question terms curious or your

Timothy Donahue

Yes.

advantage The they're competitor, they reductions aluminum say thing listen, That the plant first customer-specific. the Belgium, about while Chinese have -- in have cheap they're They metal. they Chinese don't And buying Europe. government-sponsored first built they're or getting rates. they're very paying whether European is They're they're cheap and/or they labor either labor, a Belgian metal litter in Chinese that advantages Belgium, China. importing I'd in don't same in

them might Chinese markets. challenges the or other in the you competing challenge against China, not the foresee in that same So against Europe competing

in now are towards And the Helvetia one in acquisition, and in Germany then We more France Slovakia. at one certainly, Italy, have we presence now are plant -- have with the the Turkey. a is perimeter and that we, we U.K., the Spain, weighted Greece, Crown

that efficient -- sit a we new back year, company story with probably I get the well where no certainly as capacity today, sustainability Northern there's capacity, towards not year, we in -- North X, the and we and as And we future. benefit another to as is plus new alive to Europe to that increase believe X, well. is minus a have said, or well where increased we're level in lines So some were Central I to We've the reason probably but more as high-speed this market here The we maybe got next were into the we down a think we but very Europe weighted won't prevalent. bit, 'XX. not growth flattish, footprint

So as story it's maybe the America, sustainability even have more same we North so. in

Gabe Hajde

I'm but the a this, a you conversations to can one, operated bit drinks. your what's sugary myself apologize, And squeeze maybe asked criticism of going I it. of right is terms us more. there East obviously sure disruptive, try secondly, long sort bit. that having X help -- in I going lot up obesity a I'm know in first that have customers drugs potential I'm and bit I opening about little you of for here. And anything for time, and Okay. and then impact now attention guys on, it's that definitely Middle we a headlines, a on with to But from gotten or you're in little on little just of Anything wrote comment

Timothy Donahue

Yes.

the first or small the any cans So don't not Palestine East, one us amount. Palestine any even it's in Israel, we've time but seen are honest. no cans in fillers. in operations there's to import Israel, of there filler in the if have From don't we I We aware Israel. know be in to a impact. a time, shipping Palestine. Middle I'm

Saudi, and Jordan. Middle in the is North Dubai Tunisia, Saudi, the Africa, in East in footprint Emirates, Our

So Jordan Israel skirmish from Palestine, and region. been little so impact Jordan, a has to closer there. date, to the insulated no But between that

don't think to have Walmart jump say When less clientele or food, drinks. retailer and at every beer would I comment As fund decided buying the off large and other same made, Ozempic the to they hedge liked it they're who's less soft boat is of that relates at to time. add that drugs they these on the more pulling a the pharmacy color buying major those before aware Wegovy I the have little drugs, the I'm

you what other and may items that, and cheese, take doesn't be understand, the macaroni want less type when from frozen these pizza They buying fatty I body drugs.

and I treat. impact. the think regional No to thing. you large in And fillers to multinational And they're our if talk need United a even same beverage some a products level were still to you seen whatsoever. we've tell States, going no of the You of impact

that rate that Americans point, in can be are at if to future going calorie projected some experience to move the goes reduction afford it's think they can you it's to XX some the that out if XX out remarkable project measure take-up or that that years, discount the this to low try to might want ascribe drug, take-up somebody Remarkable and and companies, to if miraculous even back we it's me and to -- think they want what me packaging other that. had just rate to that you had, it's remarkable you very thought

for I foreseeable being businesses our our an impact or business don't to customers' as see future. this the

And deal the that reported. effects side starting with and more more to be that doesn't

it at that. I'll So leave

Operator

is Jeff Zekauskas JPMorgan. question from next Our from

Jeffrey Zekauskas

There we go.

in there go Your the you Is million, growth Or That that $XXX what's component one? think down is next the if a is will $XXX growth component? year. a to is million CapEx, level? there maintenance

Timothy Donahue

Yes.

million So is and I balance $XXX growth is would think the product about million replacement. maintenance and/or $XXX to minor

so always replacement -- that's And maintenance. is or growth a product

it, negative have don't growth. you If do you

like we standard like to slim and things that. -- et let's So product say, from go cetera, cans, cans maintenance,

million. million, So $XXX think about $XXX

Jeffrey Zekauskas

Great. Pacific is when around? to forecast turns easy -- And it Asia

Timothy Donahue

bottle answer more the am. countries work in But most Asian to I United I economics one the to that they've and right I to got attuned that's your and don't in fillings don't have biggest the those in beer growth bank know, The increased it's States a the than are I incremental number the can the a is, as you've for United bank mean jumped had be a**, beer a to Jeff, bank specifically for of can. tremendous States, or industries well-capitalized have apologize. in for you going beverage any of fillings, the region smart past and people industry

but any -- if their project to gather. middle beer So they population disposable growing I don't and like if ours, less time if been there to but like class, their and you've it. but you've than don't treat, young. extremely level, -- certainly -- The can know income small Asia you're a there, they is I -- if Asian spent again, know is but a and And I

And when is growth you so a about we recover. as -- decade there. the today expect the that's Vietnam -- I is you for population, with going for sit continued to here for growth can't next opportunity young when and think But to project

expect recover next Will by it time for next it down wouldn't stays know. year? all I of year. this don't I

Operator

[Operator And Phil on Ng line Instructions] a have the we question from from Jefferies.

Philip Ng

to Tim on matter. took shock the an appreciate get but offer, the you I'm it a far, question GLP-X so I insights subject half hour

Timothy Donahue

-- gather have want eat and time. and -- Well, that food hard I that time I to Americans, trim good drug spec to don't they on But and it's have can it believe This by we This a impact of this to just remarkable really to on lose else. watched drink Maybe billion some is and or market. is something a consumption off need is a wants products me to listen, is because weight going somebody about are $XXX find levels diabetes maybe food to from believe market. of we're talking time, anybody that pounds that there a to any far. to XX an the people who's actually gotten desires American's the eat this

Philip Ng

expecting Tim, heard business in you're if you America, up your I North XXXX. more correctly, Well, similar X%, guess profile you growth for a and be calling importantly, I to

us [indiscernible]... help So

Timothy Donahue

same level of higher, the year, next base by of be the would percentage right? up the What the absolute I is that was cans because them amount said

Philip Ng

Okay.

seeing driving as you've So Are well? assuming or -- share that? Or can a you help And year size this market? what you you're that seen guess? percent then, would I flattish is it gains imply like what's

Timothy Donahue

it grow. the going to it quantify support February, share can cetera. in the but is a promote is certainly can, gain a stackability, filling as the -- that. market in February, going transport, that There's to unique features well combined We -- speeds, of -- the there's efforts with believe to we for are The is sustainability tell you you believe as doubt continue to their product. We'll no et would early which customers I for remarkable continue about of cans just

Philip Ng

guess it pricing. you've sounds up great like I mean I locked thing the is

So and year? exceptionally to volume line businesses. from you to sensitive that of well for X progressed too pivoting activity, your well. how good got more far managed be a a you've Transit this has I Transit standpoint so quoting sight and this aerosol year. as there But in And economically clear, bidding guess

Timothy Donahue

is had million. hard unlevered appreciate here to and a small in automotive down. rate some business of almost getting just we've investor the -- hard XX%, up, the across community, board. Transit, We've to excess has shave delivers some in it's the year in air requires of business segments flow got a aerosol some down the other aerosol business, XX% it's DOT-sensitive business, And third out, quarter, no for between the a are the most had aerosol right? anywhere across XX% of cash But of cash a creams, products. board, the plus. $XXX capital, Well, conversion time community our benefit of But getting got part, bug the sprays, we've which we've of -- fresheners, XX% that maybe and a listen, and analyst segments generates a time the year

a actual team chance I've that who said like It's of a on highway, very there's every the by, there's in variety done wants The that not when you product product, we've the go team. a business, an managing truck time an anybody It's Signode yes, an broad-based but -- year. truck, a supplying business you're -- product see before, Signode in I exceptional Signode a this job exceptional truck. to a industries. XX% to the listen, business. So good a it's this is

industry does the perform without Signode. transportation not So

much it's a And so more business. stable

sensitive. spend capital. economically it's Yes, lot a We don't of

So those equipment high-margin delivering our somewhat to even and limited still growth their equipment is a and cost a But take market, process. consumable market, got in who a of The business, some automation out to for down business. products. customers in we're down And we've GDP. wish very automation

good it's but very don't leave that. to I'll So it at too I sound want a defensive, business.

Philip Ng

I'm activity getting in incorrectly. demand the Transit? for trying bad your is getting are aerosol stabilizing to either just question the I Tim, to gauge, point asked where or less quoting and you

Timothy Donahue

Okay. I'm sorry.

didn't now you month got activity improve. would overly in that a seen in said, better Transit, operate have I in equipment we've of think at did preliminary of stay can't I have But long. beginning September budget September, for especially said, ago. markets, And a transportation I better a the this aerosol, that budget Transit. for I without about a like asked budget of I but probably the probably question -- can't me ask In weeks few not felt little I It You question couple the Signode. say had down was I the no. market feel the industry actually poorly. quoting The the than I -- as defensive, would no, too market.

equipment but automation. and we better the consumables we come term, So near see for are are back a to traction going to starting see little in

Operator

from Truist Roxland Michael Next one Securities. from is

Unknown Analyst

the hoping for This is was during Mike month could about Nico today. in from America Roxland to actually ] shipments I quarter cadence on the talk month? just [ of North you Pacini

Timothy Donahue

to the August, we X% X% X% X%, think July don't April progressively it I can front that exceptionally you'll July, that I June. have XX.X%. saw really maybe better. in I May And my to you weak. digit, and could then just leading got transcript, you but I and -- I September, we of -- in me, back quarter strong was tell to go XX.X%, top our mid-single head, We but had third of told saw if the We each you see month a would that off growth in probably

Unknown Analyst

follow-up. Perfect. a And then

briefly about in Just start-up the U.K. your it on earlier you spoke

X start wanna August X in starting was Line and October? Line Peterborough think I

Timothy Donahue

That's been had some Line delayed. components We're and and contractor start probably starting electrical in Line other and X now a issues. delays, We've X. month or will X

there. So we're getting

Operator

one next Sachs. is from from Goldman Adam samuelson Our

Adam Samuelson

into into There's and but there additional from of been the on and order kind their like of backdrop helpful. patterns years seem a in their lot your what summer. there consumer kind would you're covered, you're customer of couple be there, favorable peak last the going color Any demand base getting seeing coming season. more of Does maybe obviously, ground to a back environment than Brazil

Timothy Donahue

Yes.

year the was think I quarter, what fourth say, strong. the year, So we it's volumes, last third were X% market I actually I quarter, interesting, third in and or would last fairly up at X%. looked

we fourth think or more. X% were maybe the quarter, or X% I up

completing know one as have we [ Brazil, in customer opposed [ if -- receivable I's dotted going to be are on seems in had major don't comp been their assets close So to terms comp supply, the reorganization going in market T's I but an to that coverage in the a we balance firmer the have easy our is all -- and and as the we're positioned ] we of but and they with can settling. North place. they're America, but The ] and concern, have only reorganization them, operate in not pretty process, well in their to they're

pretty feel good we about that. So

think I market the So be should firm.

takes can as is earlier, just said the it's continually the think and And pandemic. in X market And up excess but the recovering get as companies look beverage as I that's for of we markets going economically to the probably years forward. years, you healthier the slowly market, I market for -- a capacity said, eat X, to couple from the

Adam Samuelson

will Any then for kind production just in just there's of P&L result and the kind through of kind any the in allusion some Okay. That's specific the a overhead of that quantify helpful. aerosol that. And to in flow quarter, can and/or quickly Transit. volume way impact unallocated to Asia of fourth the as downtime

Timothy Donahue

Yes.

desire of desire is X% flow, working reduce our X% us we're levels paying. absolute anymore, or heard talk generate briefly Interest It's not capital, reduce it's our allude -- debt. or more you've to reduce whatever free right? to cash So leverage, about

So really we an such in much critical why effort as and that QX. we in possible, to get do made debt going we're QX, continue to can that's as and low levels as we as

new balance year the sheet. with positioned a better much start we So

shipments the QX soft QX, last fairly market all adjust that order might again, Asia, of as And to I know as -- down in we gave but down or don't volumes in think. need a to were say cans, carry order said, And without Vietnam year. XX% crappy performance don't XX% would I and if largest for you can need -- digits. very up, in it's been Vietnam, They bet don't But Asia. I the you high we aerosol more I to But as in much I'll of our Transit, aerosol margin all and in the weak. that's inventory volume the than market but number, -- Southeast don't market. down after gave year was a if it impact XX% a I on otherwise I know And single a mid- carry. consumables quarter. pretty is in equipment we

firmer. to absorption. or absorption China, a further QX Cambodia, work low have -- little a go loss little I as quarter any absorption debt some withstand absorb as And down as I just So the this. prepared talk to get be possible I'll third trying we forward. in But There from inventory be the think in we're the how And get there along. will careful to been may about

just down when $XX million million, you. to for number and we to I perhaps Asia we out know, million. So number, there I aerosol, there. were It's But where out in threw to $XX the you from $XX throw don't July a the want talked earlier last a similar call

Operator

speakers. have our questions. don't the any back I'd floor further to to like I hand

Timothy Donahue

Okay. I Elmer, Bye forward speaking new will conclude with you very year, We'll call. much. today's now. the to you thank look February. again early That think in

Operator

conference, speakers, Thank today's that for joining. all and and you you, thank concludes

you You may now disconnect. Thank very much.

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