Silgan (SLGN) 21 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Kimberly Ulmer	VP, Finance & Treasurer
Anthony Allott	CEO & Chairman
Robert Lewis	EVP & CFO
Adam Greenlee	President & COO
Bryan Burgmeier	Citigroup
Mark Wilde	BMO Capital Markets
Adam Josephson	KeyBanc Capital Markets
George Staphos	Bank of America Merrill Lynch
Gabrial Hajde	Wells Fargo Securities
Kyle White	Deutsche Bank
Ghansham Panjabi	Robert W. Baird & Co.
Jeffrey Zekauskas	JPMorgan Chase & Co.
Arun Viswanathan	RBC Capital Markets
Brian Maguire	Goldman Sachs Group
Salvator Tiano	Seaport Global Securities

Call transcript

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Operator

Thank you for joining the Silgan Holdings Third Quarter 2020 Earnings Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Kim Ulmer, Vice President, Finance and Treasurer. Please go ahead.

Kimberly Ulmer

Thank you.

company Greenlee, have Bob President and the and Allott, Lewis, from CFO. Adam CEO; and me today, Anthony I Chairman EVP Joining COO; and

to, uncertainties it we begin concerning this those turn on winter in Form risks and company made may could the company and financial limited forward-looking the over the These the like other call based described not we or annual in statements. that, call certain and today, the events implied Tony. forward-looking a statements Before to Therefore, to report made affecting XX-K the conference filings differ number statements. make With the but materially on actual therefore, SEC. it and operations beliefs forward-looking clear of company's results be from today upon that of statements expectations of would for I'll those including, involve XXXX are condition management's or with expressed

Anthony Allott

to everyone, XXXX Welcome, earnings Kim. our Thanks, call. conference quarter third

agenda the any will have. on third Adam to these I this Bob, then financial to remainder pleased and quarter performance might for review the remarks, Our will for the the year. morning and of questions After the you be answer outlook focus for

team these versus business As very Silgan. safety to we've result increase customers have working this had our with excellent ensured products of protocols the segments a our direct share the adjusted to extended press business over meet Through strong challenging hours, a opportunity prior an of efforts, This our products Since environment. you Silgan saw these they record of performance quarter, release, employees continued do rigorous to success diluted was XX% in year and the record earnings continued of demand all $X.XX world. essential exactly pandemic, showcase and just third across supply the per the followed why consumers our we delivered demands entire a beginning in for exceptional of the the for to results.

During the the result customers pleased at-home a canned of our XX% from certain and growing the front marketing this growth well of these pack-related foods awareness benefits primarily were of container strong half and increased food benefited as new food discovering metal of of restaurant third shift in in continue quarter, in promoting supporting consumption consumer that as value idea our are picked volumes, unit We to summer, and even demand a from the business year volumes timing reenergized the up over quarter. consumers the are to them. activity the though the and products see as

range, was pumps business Group these weaker partly quarter. products, drove product Our on in acquired offset across for had in dispensing foamers, demand particularly This the a as products. from certain per share having earnings recently demand in impact neutral which, resulted Albea for operations for by the where and great closures beauty continued systems, expected, most increase dispensing surface but demand cleaners, strong XX% a continued our of demand

securing well strength plastics Our XXXX. of of new third further growth service its to operational in of and as been business strong XX% This markets driving awards continued market-leading light has doubling as the quarter success income continued and customer demonstrate driven performance. model, has our versus certain segment volume nearly by food hygiene growth in in

over to customers, leading strong to behalf us of teams demand a once at We deliver adjusted XX-year and of and midpoint, XX% to our expect market continue outlook levels for XXXX increase again share our our for earnings operating on compounded per growth remain of of range a $X.XX the represents to versus from rate a annual prior earnings which, $X.XX the increase to $X.XX $X.XX, to year XX%.

given our review we explanation the strong in to the in our to strong more detail performance financial overall the results customers' XXXX. over company our level to levels additional and at holding, for Finally, remain that stronger demand provide around earnings now expect and for this With estimates are view, Bob I'll turn that, XXXX.

Robert Lewis

Tony. everyone. you, Thank Good morning,

Tony board. record an performance exceptionally our we income businesses. two strong of the records, each ongoing in As integration outstanding leading and highlighted, new quarter delivered volume to of all-time the across Including operating acquisitions,

$X.XX of due and material XX% On a offset to diluted of by we debt. than and increase while in early billion, As a of the partially XXXX for million pass-through $X.XXX record volumes to better quarter per of container Therefore, prior third basis, a each shutdown for quarter for the diluted per delivered $X.XX of consolidated share per net Results and or result, share facilities expenditures systems lower X attributable weighted adjusted the outpacing of were $XX.X extinguishment costs in XXXX Year-to-date million prior costs. the of charges the to on earnings of included XXXX due from business, for share raw adjusted the an $XXX.X of the the of $XXX.X attributable a acquisitions Capital rationalization $XXX.X the of Albea XXXX quarter expense for year. third $X.XX metal year. expectations quarter to loss million partly borrowings, primarily result per third rates. higher sales of the quarter the quarter included to announced diluted quarter primarily the early on second compared $XX.X million other in expenditures acquisition third year $X for average outstanding offset third and in earnings $XX.X to million, loss interest XXXX largely XXXX. of share totaled quarter. third versus debt lower Group, capital before $X.XX by versus the million debt totaled the of million average extinguishment increased was operations quarter XXXX Interest $X.XX in prior XX.X%, the dispensing

due food certain mix offset million inclusion demand continued Plastics We'll into third costs volumes cost performance to the unit closures net grew recent record continued strong demand This legacy This the gains $XX.X the was lower end higher higher was get Net third sales costs offset dispensing million $XX.X in of demand an quarter XX% approximately was prior of largely of cans strong record of This costs the lower offset higher year the the of approximately to primarily quarter, performance, and volumes, a prior acquisitions, business a the a volumes versus primarily was prior manufacturing were impact mix for sold. into The result This pass-through unit certain the from currency consumer million. currency canned material $X products of million metal costs was volumes quarter. by of an higher in plastic lower material $XX.X of of the to a was income. health costs. $XX.X increase XXXX A primarily Segment care the higher Net by business XX%, the totaled cash of in of the due weak from XX% the and for health, up income lower regarding the the income. approximately percentage the of the favorable the and pension of business for Segment quarter volumes and $XX.X significant cash recorded cans and strong products percentage million was food third due million, increase of material income of raw unit by Cobra offset of increase of million, and business improvement of and XXXX was favorable business primarily consumer pass-through of result less record segment specifics paid in pack-related dividend the of a contracts favorable performance The the in third operating increases due all-time and continued sold. more each the of year the of sold, volumes, quarter. quarter record X.X%, due and of year-to-date foreign $X favorable million foreign rationalization of primarily in consumer $XX.X million food higher acquisition total partially income increase of Segment the Albea million including XX% sold. all-time that at $XXX.X personal pass-through volumes, an in of quarter a million, new at-home third by unit in of $XX.X sold strong of moved of to increase financial for XXXX, raw the half by $XX.X Unit and to for the quarter. quarter a customer due increase pension were products volumes was well mix certain million the versus sales certain hygiene increased pension a These smaller primarily ago. of the container of partially for lower as new versus quarter Additionally, and the increased volume the smaller year a raw offset quarter September quarter. quarterly and or we versus consumption and third hygiene, income strong beauty of and and higher $XXX.X year for business in $XXX.X the a operating products. $XXX.X $XX.X partially approximately X million, certain businesses. timing $XX.X XXXX closures XXXX, $X.XX the the basis, partially share same front metal renewal more in higher per container for of increase On The unit the performance products. translation now and for approximately primarily to primarily sales result favorable to partially increased operating higher by as the year of for awards. of attributable income demand million volumes business million. container period the higher the with XXXX. dividends of a volume to products in as

our to XXXX. now outlook Turning for

the our to tightening for of quarter, a fourth seasonally we smaller are typical is $X.XX. range As range of estimates

strong The to $X.XX to certain quarter a range also providing on the share estimate an earnings of XXXX from XX% outlined of to of and diluted of the strong $X.XX of midpoint We're a net of share operating based our the year-to-date year, of release. continued at excludes the are the revised the per outlook adjustments the for and per of a range net range prior year. estimate $X.XX. result range a demand providing income of fourth compared impact increase increase. $X.XX $X.XX we in remainder As adjusted adjusted represents in This a $X.XX, press estimate range the adjusted in midpoint the year-over-year per $X.XX from for of performance, diluted our the income B Table XXXX share, increase to diluted as previous XX% in

we continue be In to addition, for free the cash million approximately $XXX to year. estimate flow

expect our could That concludes that working we provide so back capital Q&A expenditures As a for open she fuel can increase capital session. and in so the modest it growth. Emma and up I'll we slightly prepared for to turn Q&A comments, it directions higher to future

Operator

Instructions]. [Operator

We from Anthony Pettinari with Citi. first will our question take

Bryan Burgmeier

XQ of those sitting the or margin to comment, you actually the the impact Is This on add in Burgmeier can in Anthony. plastics? volume it for of can And Bryan the profile on to any detail extent the wins? to possible business which lines you wins is product quantify

Adam Greenlee

Sure, Bryan, Adam. it's

have the a As we look at as calls awards. we've previous with they success, business discussed of business, had lot on our plastics new

a is So you. some have but should is The for their that The volume of increased board. a don't the demand reality reality across through of is their specific course the volume. say. seeing I portion playing of is I that increase, number XXXX out It we're

the are the really then related volume profile in products health quarter. consumer would and majority new I higher of increases to awards, it's products And the far consistent. we've seen business of volume hygiene as that Bob say and the the as outlined very the So margin the

had to or we for that current it's and we've margin time, they several over awards target of business this business margins the brought over in say new talked we've business. have already But the quarters phase in, only would EBITDA kind XX% next as continue for I but will better well. not at our the through As bring

Robert Lewis

And the I in, you market. growth is think as

kind to long we've in served of of someone of waiting we've have player been essentially time. typically absolutely to So spot. talking didn't it's for at customers, plastic been tell player. et care, we markets what We in home, is period the service that same for for cetera, some of that the food, we a said about think we health emerge there plastics kind that time provider is we as the you, premier was Silgan think a Today, for

they're beginning for performance get consistent for so to their customers. And rewarded strong

Bryan Burgmeier

then the pretty Got And throughout? But are detail. pretty I volumes you Or it. the quarter? I see still improvement it appreciate weak. did sequential beauty understand any consistent in Albea throughout was markets

Adam Greenlee

would It hear to was some potentially we're say the fairly to fragrance I positive market. building consistent and throughout the starting quarter. momentum specific

market markets particular. or for areas actually You Brazil, look than world European U.S. like in fragrance or our those done China, have the the better at geographies around like

I customers dialogue but been positive. So quarter, it through has the the think our was with consistent

challenges transaction which have One of location the occurs. the the is they at

travel e-commerce or little fragrance of an channel. retail, through it's was whether very going So

would a of e-commerce, in us one which talking will how item, you're again, what we're So if with to a time of fragrance about be you the all variety essentially think or for samplers, about talking samples perfume means, through us multiple through with of about good they've fragrance. sampler of whether sale a bottle getting working spent be and through it's their lot because, the of long-term consumers, them reach for

through So forward. feeling might there be we're but positive the some momentum going consistent quarter, like

Robert Lewis

That I was business surprise to. both way an would the is operational basis, volume there there, no Yes. too, a on here. we Bryan, and the operated very much basis anticipated point other it add

Operator

next question Bank We'll take of with our from Wilde Mark Montreal.

Mark Wilde

beverage Tony, that about plastics, lot you in businesses Bob. being you also a And if you've that in now Adam, competitive sustainable I'd we fit wondered, in bar that of that performance that you Are does confident to like advantage? got sort I think where talk the you the a description. meet given business. Tony, know ever of you times, sustainable could advantage. hear have can

Robert Lewis

can. Beverage

Okay.

to back second So your come I'll question.

market something And I a So have the we for in that our always customers. businesses great plastics, in about our are for earlier years, that's to in I believe best holding kind sure that of bottles have up we we We many our will we that our weren't American everything the what and the for say the again best market it's question. say we And of provide in all we that high. we customers provide heads are It's that. unique said stayed to. just space. in did service, of standard this exactly North call, the hold solution best we plastic

move where are the we but provide to situation, what So continue drop of we which those do equation to on customers no lot delivering got to But is it to a got point pandemic We've helped this I value footfall enough? products, we've we keep I is are need. way our so, for pushing. more. customers. new in at the we think can We've and got the on.

crossed So mean Yes, here. yes, I an we've think important really Bevcan? so definitely did milestone you

Mark Wilde

really did. I Yes, actually Bevcans. mean I

Anthony Allott

Well, as know, you we're --

Mark Wilde

don't I are at businesses curious this and I a bending around, mean metal know of kind I mean making where capital containers. business. being lot good you but you like of I'm there's very thrown about

Anthony Allott

Sure.

us another a case. to another that of is Bevcan piece that can, lot can in two secret no it's make today. mean, I So it's them just We

we market Do sure. Yes, do. space? So participate in think we could we that

to going case, have in to be can scale. -- the going to would it -- have know to I we're customer. us that on well would something think are, we bring what focus not not unique we you've And to the known we're

need is something more a or So the to else. unique be be particular to specific not customers' might that geographic

us, talked could of And packaging. growth a then make have in to move. comes think it to organic returns. answer do I you'd so see we've you that the you for where lot down you always before question where And And that about really see

not the You return you capital that see tend on to want.

PET were at you great always They And we if booming as the so example show bottle. the look thing.

and they get fact, invested didn't it interestingly from were Bevcan, return. In and you there the capital everyone taking

kind aligned I like us Do in were there we that to there. So a was make capacity question growth Bevcan think for the of and be. long-term opportunity and the the feel real would move well good

Mark Wilde

Okay. business, And sense contribution some I we us wonder And food food from turn food think can you the time, could sort you this pet From whether in quarter. if kind and the of give the been the #XX can business I cans? the shift also, of earnings in then have Tony, just business as smaller-sized just a and on wondered might follow-on, to then big about just us toward institutional impact and of over versus what food pet drag can cans help more business the the cans can the the from business. the

Anthony Allott

Okay. will A there, that. maybe work through together and add I lot we'll

we have like been I particularly talked of of period for time. So has food, of some very first human shift. in soup the all, consumption vegetable about the shift think, And stable been areas had historically consistent

answer. to there's in way I think a this long go

products. is much that, U.S. of cetera. And market The like different a first We the than lower Europe, with market. part of had thing market out eating say et is other the about was markets U.S. some more I'd a reason that of consumption the those

lasting market while. some at that more had of happened it the level of question, out eating flat that's lately thing that's trend a restaurants. that's even may to eating one a is you're global that But So one U.S. is your And the of though of for one seeing versus a revert a wasn't things home out. normal reverts more that's happened thing think amount led of -- of sort what just that more normal we be maybe into

fact for growing, certain that, proteins, years, that we're many that food, trend the pet about So we against talked continues.

So we've we've say pet food through really reason year, growth. for seen solid nice up continued that, to yet no COVID you even seen would there's very growth this though that speak

can't So I comes that it plant, you cetera. that contribution for on a say they're in out because trend -- the continues of our to all the break But there et really would same comparable. progress. I business basis, margin profit

profit the not terms So a those. there's in of meaningful difference of

institutional cans. of about expensive you to to that it's package. That this degree, that gallon the more Finally, dollar, is cans a more cans have big much restaurants. lost year we some areas a asked in contribution It the one more true is are out lot per because can a #XX

And impact sell And third that in margin. so been of quarter. typically Those in there can that. bit see has some you a the

what one that's comprehensive margin at it. had hope that the points the piece the So third of can that quarter all. in helped is about on you that I

Operator

take from We'll Adam our question Josephson KeyBanc. next with

Adam Josephson

just event, tracking could returns number? from you full business that was growth relatedly, year what just how the the the or well. families think quarter? normalcy? on sales us on and to the on in stimulative And I the next get and what tell you contribution hope you just EBITDA Albea, TTM start your realistically, versus good really business how a can some Congrats another cetera, EBIT And was are to et basis retail, you quarter. it year in travel, Bob, versus is much

Robert Lewis

Yes.

it comments, the for business along So as quarter. I tracking the to expected is what really we deliver earlier made right

earnings. So a neutral revenue. bottom to basis, of the was it more on And little roughly $XX line than then there's million

carry it we exactly customers on it only be the and it's largely that's Obviously, standpoint, below offset but quarter. So basically, but the be to where us, shortfall we the the interest where enough from expected we're it's not the as due competitors to to is our acquisition expected to experiencing, which that fragrance for business, contributing well. our

bottom. it And some $XX so to million-ish on we expected off that business, be the

So what seeing. that's kind of we're

get think of the for is what going more levels. recovery timing and the next to be will and some is recover our COVID fragrance knows business around it to I that year. back But who moving So kind will normalized view into

or and anticipation the back So is expecting we that of whether levels we'll we next wait we were fully but not, when it's get can the our bought that there year see, to kind business.

Adam Josephson

mean about demand And also Tony, talk be the businesses? normally you about across could visibility I mistaken levels. prompted third that just in commentary next trends elevated year How there. into had I can what you you release make comment? remaining what you're But XX, prompted quarter. Yes. at much on profit on in to you comment? the that again, next commenting don't have year I your And these remember

Anthony Allott

many what that hit, an we we Sure. companies not We recall that's our did. we not that that we budgets be that, hard Actually, And knowledge have to going were your felt completed at had would so reason budgets we're understood. you felt a this share that The or issues, we There shareholder not about say memory to things to was is do it and that like obligation correct. we had we most an you'll have we a to all weren't true. and usually, when being yet, than for it. you We outsider know too talk to impact. very dropped yet that told going completed did how analyst and knew our quarter, COVID also going mention really but foot, that we more changes all guidance

to all the would things And very hard right in hearing be customers, understanding it Albea. all from know so markets, we're similarly, our seeing you for about different now,

So obliged knew. with you what share we we to felt

we being. that And expect That XXXX a us, whatever ends that. that really that so improvement, for percent is can was hold that we we said well, believe XX-some up incredible number year what we

is that of of things account. a that and taking into lot a put take so And we're

pre-buy of some reports not sell of we We're amount surge necessarily cans in the since so the had early saying same a year. we next that And exactly then. this. seen I've happened Again,

not assuming case. that the and will that that, know don't we will be we're the so be case And

think the than assuming is seeing We lasting right We we're giving certainly demand further that not that's commentary strong part we're lasting, actually XXXX. but that the through of some that, are of now.

Adam we the similarly, wins those hygiene wins look We pre-buy products at about well. be But there we in. in we've because of businesses want know done, the so other tally talking a against And of lot customers was domestically sourced was know to some as before. they in of performance that, more that we also than were our some the of

to So of improvements the least some we're in. we we at we're the asked don't think to Albea. this year. thinking there's And it now, when plus that you some from We believe all tabulate us that all right that trying that big a year, comeback ought as take saying, great be rather profit than as all thinking this that has strong were that. from of good But

Adam Josephson

Tony, last one situation. supply demand on food just the can

of obviously you some it supply/demand So contemplating Obviously, state how relatedly, that were food can in closing you talk been U.S. pre now? would the pandemic? can about the changed characterize that pre a oversupply pandemic of to the had has in you status and degree. significant And X market pretty plants

you So shot. initially you it now? it maybe in that supply? of balanced? about characterize were Is those in to talk short planning oversupplied? Just Is even that Is plants context X the how would it still it

Anthony Allott

Sure. Well, think that the on will I then Adam to we'll move next and do question.

Adam Greenlee

Adam. Thanks, Yes.

a across platform sizable we the container about increase obviously, call, as talked So on as with metal our the volume now. X last dealing right the far as pretty of plants, we're rationalization

just and expectations rationalize But requirements-based. that got a of needs change. Part are know, So we constantly And incredibly And additional on those digging requirements. taking to, focus is contracts, we've Tony again, to relentless our you focused paused right our what never of customer we're our now. their as we've meeting evaluating costs on plans alluded also deep what this are is plants. those. of system out into XXXX will and Many we're

So are we're point. see evaluate and and we at commitments expectations that XXXX and where we'll finalizing

every the sold got to quarters been here. X and would think marketplace, as over well. it's months supply the say, I made the in an as far that X got last basically As just interesting demand I X can

business, food you of the as certainly through if of but So quarter quarter second the seasonality think lot third a also can the the volume well. about goes

available That's was in how the and quarter? capacity first run business. we our So there fourth Probably.

But to how out So we'll plays going see we on be the year. how go and and certainly, that's then some see there's volume capacity with as our impacted shoulders, next we'll QX into expectations.

Operator

next from with We'll America. of take our Staphos Bank question George

George Staphos

appreciate I it for try draw point from because levels do wanted least the to Albea and as possible, you guess for say I a good in that earnings this expected on expect year finer to, at to to and improvement that earnings if expect we giving be next you as you us year's you guidance.

give in we 'XX? terms that to increment net models, versus wide view about EBIT to if of of You our as us Albea's have a should what be up range in EBITDA this have view. 'XX were seat, some But sort building our on we're kind recognizing maybe you you any of view or that? on thinking Could

Anthony Allott

lot it. of Bob a you try. could I gave Sure.

mean, it's I how exactly we what have said costs. it's covering basically off, interest So performed is, and first its

it. for months X no So the we'll of contribution year this Yes. earnings that have

So in EBITDA, order to you do that, if million on some off $XX will. to $XX-ish you're million

would $XX got million you we So to expect annual bought to like it when it, something on where was a million an if improvement. $XX back it basis,

business of something off which fragrance way about Now be XX%. XX% the that where market, like all that The it was. back is is would

that you. are that won't we've January we what you surprise assuming said So X, we not fragrance in to will starting get back all

decline we thinking is thinking of half more of you'll like we see what there, that something the that recovery So kind that. into recovery be in will the some saw the are

year kind then So of the half as I what it is full and half about, talking just improvement, impact George, was that I thinking you our you get of of now. said, on get right

George Staphos

'XX Okay. Are next the that on us in remind you you million, front, point, could on of by the how $XX related year? you do much And get synergy front? if all

Adam Greenlee

rate George, million achieve it's was XX-month going time kind we line. were the run that to Again, a at of $XX Adam. that

that to know acquisitions be a those we'll We run are synergies above take as months. or just other So at had going our far little that at some than XX longer transpired. as normal of rate bit

George Staphos

had, I aside other food to and better been food evidence for prior the question talked would can looks that you pet have a having growth it anecdotal maybe Next rate, COVID. than minute, about

use volume you what's describing the Now you that talk not it's last gives outlook of question. you exactly what how longer-term one those would because And Can it. evidence, studies have are I what happened COVID? that? drive confidence what my about for then words, and phrased you you have with And phrasing what

Adam Greenlee

give well. of what George, a of with, mix, little it's Adam, example Silgan with again. you just of we're CMI I bit data a dealing as want data to one kind

approximately market. years the year. So over soup. time And had our talking soup the We've a spent QX lot versus up XX% about CMI soup of data prior

exact So a of is growth. soup tremendous the X% did that we volume increase we amount in year-over-year QX reality it's in shift we volume at same a look QX, and The in QX. as

that elevated that has QX. that very increase is in and demand high that whole had maintained you And point So rate. our that at demand occurred

calling soup actually QX. for Our and increment even be above another to QX up is QX

soup customers demand rate available an time. them to seen going the our again, of QX. take is usually some of sit today, some soup in able at but for continue And in about as talking advantage to that, season their elevated of we least starts capacity So spilling we've here period to QX, were

Anthony Allott

at trends would George, I are too. to And other couple about, more of kind add macro there's look that thinking of a just and we that,

in on macro, between. so and macro it's work But So Campbell is sure customers, thing two have said not I the I'm are exposure. that on somewhere all, got first first new that's doing interesting think some customers side, good you've is this and there of we new data cans the new pretty

also have home, work the more side, home, -- at home, have a at On now lot macro et cetera. at obviously, we eat you

is implying real that. home. the probably I think to there's COVID agree even work market probably be most Certainly, of an of us coming enhanced of that out going at amount would estate

at So more work means home at home. eating

already launching First Then you there. of so all, home, lunch a in you're you're got at home. dinner, start

city, et out So you're not in cetera. the

So can some there when recover, conclude calories. going the over tend spare to to cost economies be look for price what consumption trends lowest the lower good, by my valuable at-home And then to you but will economy I more But to food lead and like to get far, be you time. going that is good down whole would litany can. think predict global it's -- I there's way I'll us

not And economies surprised I And people, tend et by to the so this through be out, have a lot those that. good cetera. much been a think paycheck pandemic by continue that for going they of how way, down to have save, money

more much So will, you we also guess, if but was more I think this spent visibility by there's is consumers. to eating out opinion, how being American

Operator

We'll take Wells Hajde Securities. our from from next Gabe Fargo question

Gabrial Hajde

fast going casual et Tony, some are can the things us that that in how customers maybe in or into then heard directionally point, #XX cetera. maybe tell data if it's curious, of that of a of threat do, kind kind I'm just way restaurants, pouches. applications to of a of much there fact, cans? that automate large some #XX could was these reopen. and assuming restaurant it fed out a vertical as in there business as restaurant I fact, if part from a curious you is, view to your have for relates restaurants any I and And And as you've fluid your of with of was manufacturers couple some pouch discussed flexible

Anthony Allott

pouch -- we has -- there. been it's So the

So could there. be some there enhancement

The product number the I at demand, right cetera. XX, pretty a that it. restaurants et fluid, around that stable most in things think are good for come that's you're of like restaurants

So I would be very surprised.

We that. trend seeing shift are not for away any from gallon of cans

cans as exact said, larger percentage. are I the I small. you much relatively So I'm not how really a sure percentage But But on have per for drop-through. a of basis, you. here. would sure lot help it's I'm small unit not the it's relatively a it

margins period. of in to matters it a So kind given

Gabrial Hajde

aggregate what then, in as statement next couple I can impact look But view like, in a lot on million least think preliminary was year? of And the early. year. know I it's Bob, income any A at benefit pension $XX Okay. it months. might happen this a

Robert Lewis

Yes.

ultimately, year-end year is It that evidence right. it's would and You're to rate And be right early. there's We there. think out I factor determining the discount returns. pressure with finish will the the some the got now, big suggest that

is So $XX that out it would of to either to headwind. TBD. that's point this we a that's way, of shake is a noncash earnings, way would that right $XX million out all impact Again a now. swag, but but see it could the I be million

Operator

White question Kyle next with take We'll Deutsche our Bank. from

Kyle White

to new or of of the result you're what's it is is level? any of growth of related the CapEx Or as type And seeing? new I'm projects? some curious, it Bob, all investment a pull acceleration forward projects

Robert Lewis

we're That's as in volume provide in the to our for well given into we've expecting the basis that much on our little free also earnings we do as increased going out as CapEx that prior going going And some probably to much the go-forward we're next higher year. process we existing volumes million cash with to think a reduction support that some the going more that Yes. ready customers customers build working which has we into as to provide of to in rate versus quarter. customers the that a that constant as can we thought Obviously, be will we try we're what we those to inventory in our had. And an means not see growth for see $XXX going board, the we're and of year. of as versus across we why see have, capital, coming elevated as held that a we're guidance invest seen essentially anticipating really to improvement were QX flow put and bit projects

two those earnings. the combined offset things will So

million something you're million probably range. So the talking side, $XX the about or I think $XX that's in CapEx

Anthony Allott

flow talking stock price. about the we're that like current something is cash free said, All an X% yield on

Robert Lewis

correct. That's

Kyle White

the All little promoting helpful. situation, if right. curious they of side, also coming those fiscal Would for you they do you But just of adding your this their make in fulfill that? capacity about on to I'm on and supply. Campbell's. some of what talked a and terms in increases able go in Or ahead referenced have That's does need next your bit investments? capacity? you of We've be about terms would soup capacity that more obviously a for to year That mean makes They're lot can. sense. talked marketability work doing soup

Robert Lewis

Kyle. Sure,

You in think talking our of soup our with We're about market, and all particular. about in touch XXXX. customers

that available. supply able XXXX So we're might the little to support in earlier of in our current utilizing those and willing out that. out we're footprint about we do comment position have believe of capacity to requirements bit more their volume, increased than a obviously very the good we be It of year made to the to shoulders I but be a the more current to

Operator

next our Panjabi Baird. question take We'll with Ghansham from

Ghansham Panjabi

and we industry. related to in out as contract and you've inventory? past? in lot I of growth customers of give well. different these I in unfavorable How should the going yarn back then mean I on the metal characterize Retailers, sense the mean some confidence food assume onwards, would about of would called to how a chain trade are nodes just your guess less think And there's Tony, a XXXX supply you you in us capacity it? I renewals can there excess there. segment.

Just your thoughts as well. on that

Adam Greenlee

would supply I'll whatever the I Adam. for that here And Tony of happened cans. warehouses, the I'll But all can, is retail just looking very up into search goes that chain regional by I behind the regardless was I you our it's let think distribution the customers' jump miss. food earlier you happened, at metal What got centers, the really product were in taxed. me with supply with about the clean tell point-of-sale year. Ghansham, in. taxed chain think entire products to what inventory, that

working meeting consumer on their demand, very very been customers is increased which with really cans. meeting We're we've demand, the focused food closely. demand So our for on focused

be business second -- is first the supply will of chain the point first for And or the meeting of So the the happens. demand. whenever replenishing consumer point that us

So we're the point, at And food to replenishing really I to get can. tell consumers just we're Tony, chain not would any that? as this we this trying point. out best you, other on thoughts just at focused supply on

Anthony Allott

of said, you what's et like with, comply in kind so market do contracts, the I look cetera.

seasons is, pretty would I shoulder competitors. think desperate say capacity, our market I full. do but out does the so for have pretty we So as Adam not these It do, sold full. or it's it's as said,

our So trying just market of I would competitively kind call service now, we're customers. to the stable right

away. As you of comes in impact to one that -- that contracts the specifically, know, the and of kind as coming big

contracted So average, you this I we year, XX% contract. can of did long-term business may our recall X-year renegotiated beginning was term some of believe,

of kind behind that's So us.

we no So need to of two, nature anything you would do year the in next that or in way. major there's expectation if a look that

Adam Greenlee

over XX% into coming we year, left I X think, contract the were And years in life. their

Ghansham Panjabi

we is in growth mean, more gives inventory George's earnings? Got adds given are terms of plastics, to you wins I customers new seeing sort that Then of the for back aspect, a we business the second, existing that replenishment XXXX that just super then helpful. capacity at you the And earlier to confidence the service that just that and question going it. need That's also there, that to and referenced? point then you're for what

Adam Greenlee

Ghansham. Great. Good Thanks, question.

For do think plays in the the XXXX confidence, a I inventory that. role

will or be the supply think I really way 'XX. it cans make think we're year occurring the all full in and the consumer those to going at replenish I capacity running absolutely that next chain, to be whether

of does it in confidence projection. some level So the provide volume

moving plastics. So to over then

wins mentioned, but As we've Bob awards, in particularly both business plastics. businesses, and just all new several had in three

with of solution associated plastics, going kind capacity it. line a is adding we're adding talking multiyear And with into volume there about agreements our capital that's for all more custom a customers. So for contractual but really,

is. So we where feel about that good very business

of some capital, to the Bob the is think I about, business plastics well. specific increased talked as again,

Robert Lewis

not so but opportunities I through talking at got our Ghansham, CapEx impairs would Yes that to really grow that's we're return about good point organic CapEx free it rates outsized nice flow. we've the cash here, out business where

Anthony Allott

And thing, Ghansham. just Yes. one

I to will volumes can we the so we've we're think be want about talking earlier, I is clear said strength. what this think have food

can a on you have food We direction volumes. given not

against pantry first the pandemic. So we part are a cycling in stuff the of

that language confidence So our we can think is will to and clear, strong. volumes remain our be

else over necessarily haven't our plus a this that's We We're everything the said is earnings impact, the plus. current net of and all saying of Albea including year.

clear. Just to be

Operator

We'll from Jeff Zekauskas JPMorgan. with take our next question

Jeffrey Zekauskas

something normalized Was million. level is expense in spending was about that $XX SG&A of now? your there more unusual Or Your a that number?

Robert Lewis

Yes.

the acquisitions in big the So the inclusion of there there. you've got is issue

basis, comparative and the SG&A costs are that a business it's the acquired the some of but we the included of then it's you've got Well, acquisition earnings out P&L. on acquisition. in all So per share adjusted strip

Jeffrey Zekauskas

get of been resin And all rest difficulties getting on have tight that and in that the Or any you polyethylene Okay. the in United very allocation? you polypropylene all have of you been them States that many have customers can had want the you and want?

Adam Greenlee

are Well, on of some have the tight. that allocation. very certain suppliers been of majeures companies And packaging we the force to I There think know certainly -- market declared. resin is they

talking and Fortunately we've about. from, been been materials that able get our for requirements our the folks even purchase we of elevated to that the resin all we've us at levels

to And the as chain supply for business so we resin. relates very our feel good it about

Jeffrey Zekauskas

containers, then this run you X at did quarter? what lastly, And last on months year, forward utilization the both in average the rate metal in

Adam Greenlee

we It's I utilized. discuss would fully metric a call. on a that great question. It's not we typically say were this

it year. was So you'd high utilize end continue incredibly to through portion of to fully do to year-to-date percentage and we'll the a whatever number the like -- an that

Operator

Arun next our Analyst. Research question Viswanathan, take We'll from

Arun Viswanathan

really just focus on performance. wanted I ask cost I strong a guess you mentioned reduction. on a to again, Congratulations

that there? of you So cost or some to it over us something is reductions structural year transitory had it you've you're could make understand more help that what next going kind the of you can the opportunity you kind have case Or more undertake two? permanent? Is that

Anthony Allott

everyday it's reducing focused that on think eliminating Well, we're cost exercise and an costs. or Silgan I at

culture. So part of it everyday our an truly is

announced Obviously, as capacity talked number a were operational specifically, when that's think about our out commitment. and for plan had business. because we to for we their and strategies. capacity our much the time. rightsizing one, metal we rationalization their our today XXXX. requirements dealing our of in what's going here growth were changed we're, what we plan, now customers I We've talking announced And really, with make of we that sort that that will taking rate about of volume we higher market were we previously customer was the we be we're think got of extended happened we're with needs with And and meet that some sure period our that container

than operationally. we say other rate businesses, again, that now there's right So I'll our very And running on we're at significant meeting focused utilization. And across I'll our just say requirements nothing pause specifically. a customer high we're all program when that really, of of you go

Arun Viswanathan

kind metal the I at looking margin in especially But the performance obviously, just guess in nice you and I margin curious, containers. understanding plastic metal difficult And it's just container of with definitely, pass-through. levels, was had

for us whether in want maybe of think you you'd volume Is level could characterize it any it due if each some was there QX the you to any business? you that achieved margins due have normal continue? of just shouldn't level that was outsized maybe margin -- So that to to of about

Robert Lewis

Well, and the I were would margin. say takes in there puts

case margin at the where a selling outsized I you looked and particularly in had Because say can you the were everything. inventory had second building primarily. quarter, quarter, the you you business in would If second

lot the -- you of off the quarter third little quarter. some a fact, that, That's where in moved of in took costs. reverse You of not of out you second bit inventory, sold had those in costs a

primarily quarter. that. those said And year, -- the do had as also some we would quarter third There referred had the pricing beginning to was that third The of before. the -- of contract did we we at renewals hit I impact

business, there's blended us. price if so sort QX third elevated. seems that nothing little second can it will particularly had look all be in, couple level that But a it third So the margins, things And would there. in I lasting, you quarter. of brought reasonable is a more the actually quarter that quarter, we at it of to down a say the about the from when the was

Arun Viswanathan

on COVID just keeping or discover just integration? even given in you provide COVID been then this little could you tailwinds a Have able neutral been world? but And maybe update in by challenges a on And has been you Or impacted a progress? any that to if it an doing Albea, little bit, relatively synergy there's some a are bit more contribution. maybe the

Anthony Allott

and meet in trying global teams, due on It's and What look Arun. and the you on period. do after good the chance X Sure, get acquisition get whites pandemic. to about the mean during integrate with into an that's do the details really to a ground eyes of diligence is Because the to like in a business. boots to question. go of I that first think the day it really we get

any to we've So Teams utilizing able been all it's you're new do technology to about. Zoom other sorts tools or or be that, talking whether of

significantly team, and lines. also I'll it's challenge the one legacy together, out pandemic a And global the with have a kind global outstanding, acquisition. that's impacting work done of through say of primary dispensing but So business an Albea a just our the been been our to not in gate job, teams a have came that team trying of terrific pandemic working coming only their product

we'd synergies, what this about said at where that, I'd right we what point. earlier we're I with be you is tell So thought

we the feel I we'll XX-month very or And that's go if down kind the we're business. and I you doing just $XX that slightly of really where million, the think to list. a above right think, period probably what Emma, it end with now. market challenging that rate about at of targeting run move good the be It's were we'll

Operator

our take with Goldman question We'll next from Maguire Sachs. Brian

Brian Maguire

wanted to follow-on the just earlier I question kind margins. of on

sort volume normal bridge and fixed kind of I good, the into year-over-year. maybe of XX% volume used growth why didn't growth growth. earnings there growth. But if not you have given of is could the might the see the guess business, translate food in it obviously level put in improvement just XX% margin can as with wondering really into growth that businesses. EBIT growth was trying context the was more the volume but to -- the were of I much Just as And cost to absorption expected strong those

or accruals some there of or other sort comp thinking that true-ups about? incentive we was So be that occur should

Anthony Allott

So good question.

the XX% So was QX, as margin previous volume. have elevated strong cover you time perhaps just not not as third containers to with off, expected, were periods, quarter. you volumes considering fairly in the as that had up consistent elevated might And the

going But to do the basically, just half question. were as I liquidated really The performance. basic the year, I strong the in for basically, were So operating and -- reasons have we that, think we -- had that's the inventory we we great, of as first said, we said third built in quarter.

So all had you the you that got in of you as liquidate overhead take of to inventory. suffer out QX, have to costs you've that QX

obviously, now sold more. So

what margin is that we drop-through a in. thing, good because call margin in, cost coming it's basis, a it's on less of So volume benefit that coming but

So that's of a piece big it.

at total contract. The of the we that price other was had roughly concessions of the of it beginning revenue under of renewed. the I what talked price year, contract, is X% And contracts we about we the said, piece

third it the in going that the and to it But of because was quarter. going product, when take price. modest relatively So they're customer to was be predominantly

have the what impacting you quarter. in that also So happening was

either. and it normal the would view together, seems not volume it for net as level said we'd a when that reasonable us, to had. We business. margin not all say But the a So level that you that elevated margin all depressed for

Adam Greenlee

And came expected what we into quarter. as we the

Anthony Allott

Correct.

Brian Maguire

any I quarter outlook on on break just out volumes fourth organic you helpful. And the you what just And an up segment? then including Wondering could that kind closures, in acquisitions. for lastly, basis. Okay. That's were were they then XX%, said think of if the just

Robert Lewis

know, are you as couple Brian, the about our that different a products comprised segment. in of times we've talked closures And kind of Sure.

volume to are acknowledge upfront half fact closures thing XX% that And so about a the little first of of have just unit and you right the the our our is revenue. dispensing over

closure is we've mix is closure, said not from a standpoint. a a as before, So closure not a

They the business not And So were get your to acquisition. had business, fantastic a dispensing legacy our that's legacy now to our XX% up quarter. that's question, versus year. prior with

for in kind particular, terrific all total. U.S. product if of quarter. dispensing The sprayers, other that another we've up So was closure flat that business, And then then and almost the in about had XX% beverages. strong sprayers, of in will. And say, move our or you should a to plastic that's there about for I market we've you business drinks our food, for And kind business That was is lines market, growth bit cap XX%. in group was hot-fill market, food. foamers, talked up sports about quite we our performance talked trigger over you good the volume think

outside markets. did softness was bit focus We of the the in literally really, the U.S. and Silgan some really So legacy nice the fantastic businesses the and market. a across it's saw in of U.S. board. volume growth really, tremendous international the little quarter saw But

Brian Maguire

Okay.

So acquisition the just volume quantify a to that the in contribution is to segment? there way to was what confirm,

Robert Lewis

Sure.

little legacy over a total X%. closures So were up

acquisitions straight go again addition on just the X%. volume, the of unit you X and made up If other our

Operator

question next Global. We'll Seaport with Salvator Tiano take our from

Salvator Tiano

price question little XXXX. about components like are resin? So and thoughts is bit some my key your cost freight first in What a about

Robert Lewis

back those call, just we we'll of we 'XX, tightness resin earlier we the think increases into see the season, are half the on that did price in hurricane to table. XXXX. say in announcing still start during the and of At That resin had Maybe this with we for with point, led the producers commentary as look kind Sure. market. the

speak. of that we and now. as lot out those would right a we availability as through headwind well. for be over-the-road likely a of Again, Freight 'XX. But difficult resin others product talking there's certainly, we're it's putting somewhat So is are

us. trend the of as So in another well. XXXX. just is comment specifically freight The here steel, half hurting. I'll for input didn't inflationary but ask then the rates industry year a have on been slightly had year make you And back We a deflationary quick about steel for major

the point steel for negotiating our the the We're we're increases. is process and ask fighting every in steel for there entry of this comes any at But forward. day I think is looking increase early out to for customers going through. mitigate that

Anthony Allott

And through. those just all because general as a rule, passed we costs

might on through So And freight, it. some what's just you -- will that as some on then may of or But of is et happen have pass a lag side. to cetera. giving rule general some you raw the material that going idea resin issues, you

Salvator Tiano

how last strong on know just this you year has just Yes. the Perfect. I did but been. M&A. question And Albea, given

would seasonality leverage move? large to of You leverage capital, the ready, you standpoint, year working target undertake you be both your up end operationally you end -- seem like think a should do end up also from the the already. in in you should given M&A roughly When at higher another but

Adam Greenlee

Yes.

So, good question.

the hit think you right I on point.

is are those out ring and able We debt-to-EBITDA. range, we right synergies. high integration, of feel acquisition really X.Xx which of end should in that of the to then get given to lies of our year fully Which To the right? good the kind of the is And exit net both accomplish remind that's I'll our everybody be for we as us. And about midst forecast, we here. back half mission-critical on X.X the it Albea being the integrated where and focus

opportunity. metric, think So financial I from we'd for the ready a says, right be that

positions businesses on to looking we're looking lot to their for for markets. think reasonable competitive that that, that, -- that's about Now how And there's We'd a cash target. return something that obviously, and be that's free we that a right? in have has flow reiterate accretive M&A

feel said, business corner it in to turn as business We standpoint. side, around growth to opportunistic our we've and of the fragrance that we the opportunity opportunities. again, particularly starts have there's got that So do to to those All necessarily don't take to you you advantage compelled footed, be if we we're think the have anything. fleet will, from that growth good have we a that good -- catalyst the for think

on business. equally be focused to as run XXXX, that value we'd out just So in bringing happy the out

Operator

We'll take KeyBanc. our Josephson question next from with Adam

Adam Josephson

XXx just pretty your say, the attractive. that and thinking you Day, the I'm valuation yield, can years your at get Tony, I and at EBITDA, else? about a to of since and that at like in you your what cash I wondering for your Analyst stayed getting X.X Just And you're your of to your terms in you compared discrepancy think something about about under desire thinking X% peers. Day, while free asked now willingness business relative beverage about as were interest that packaging know. in Day about just you hot you're beverage to gone thinking flow little thinking situation? some you was into, have does the earlier cans overarching a call Mark think how Analyst at or that And same which Analyst talked at just all things to I earlier wondering in your ago, how skywards was it valuation call you your between again. multiple be the your those consider about call And yourselves peers the you're one of on mentioned the

Anthony Allott

our That's a every are great asking we day degree. themselves question. Obviously, and and scratch to every company head that a certain question

think look our -- always strong, and the cash a sustainable have for for I looked of free lot think, generation. we we positions

and driven. that can't think be on wants that got equity that land to ignore where growth ultimately we've that we And growth you so I market the is

And that business. comes dispensing did. of fragrance, be of I the we very question We've of would got that closure done Bob Bob to in feel as answer a franchise we've as phenomenal the said, business, our recover. -- EBITDA is that, on catalyst good and with which build talked so what we'll we've just XX% part as it other as soon we is our back got is already Investor out Albea, a And about Day, on the

we one There's catalyst such so there. And great. And a at pace. feel already fast been we've delevering

the which able As coming talk Bob do our is are is at Day, strong cash-generative forward, view businesses. sustainable have we is out, the that another you pointed to deal Analyst exactly

And any it. back And high cash, time, at you thing, that generate deploy them. it those find we've of better growth outperformed that look think over growth you whatever against multiples sexy you'll than might time, at you if take I be. will those companies over us You

get a to to ball. we it to and I about less And that say, that will be that's want can all want and not packaging, be we're a out very all We we've know little on investors back it like long it do will those that the then the what that and interest high stay with delivered growth. reward get that about clear, get to again, our if I we're organic really to because think so play be said, But want And and get. with seen able want is reward quick, see might we've growth growth. organically, some you us in clear that

Operator

George Bank Instructions]. take our We'll America. with of [Operator Staphos question next from

George Staphos

the I question XQ, I X%. I in versus you want at through If just but food XQ think already go of grew Q&A, answered we it. around some had think growth. XX% the something with containers, about to XQ I metal organic other Revenue look

This X%. a And quarter, FX had the the I yet remember revenue as what bit and again little volume you growth of in benefit from well XX% year-on-year about an discussion. was grew

implications then of are terms going the in we think improvement third if the had of should the it sort from realize quarter which more was lack you to showing cans? it's impact effect? relative how lift any effect ahead? forward, 'XX it, that smaller that in I And mix price from predominant that in the that mix the is of in was project as above. discussed? revenue probably you you out renewals of But the for all year-on-year more and of contract about to Or quarter there volume, the So up in of the

Anthony Allott

that. of of is far, the through. the being driver lower your that biggest By passed raw materials That's biggest cost of

revenue, when is the against that so take And entirety meaningful. the you meaningful, of but price it's not

So some it. it's mix talking been the language, We are to that's of pet the clear, I in like wouldn't out. press cans gallon again, just things about we that say release exact we've the our to is the been the that And be did shift about. want slightly be growing, I shift. There use mix thing. But so on price We talking same is -- is yes, it we've food, the a tend very then same because big didn't cans. part some but smaller of protein, language

little really raw So mix the mostly, this there's of a a pass-through. But bit more material quarter. about that's

Operator

At this we have time, no in further queue. questions

Anthony Allott

very year-end we appreciate you end to for the and January right. look results. time Emma, All and much talking at you thank forward we everyone's of to

Operator

you teleconference. participation. your for our concludes Thank This

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