Silgan (SLGN) 27 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Kim Ulmer	Senior Vice President of Finance & Treasurer
Adam Greenlee	President & Chief Executive Officer
Bob Lewis	Executive Vice President & Chief Financial Officer
George Staphos	Bank of America
Mark Wilde	Bank of Montreal
Adam Josephson	KeyBanc
Matt Krueger	Baird
Gabe Hajde	Wells Fargo
Arun Viswanathan	RBC Capital Markets
Anthony Pettinari	Citi
Alton Stump	Loop Capital
Kyle White	Deutsche Bank
Mike Roxland	Truist Securities
Daniel Rizzo	Jefferies
George Staphos	Bank of America
Mark Wilde	Bank of Montreal

Call transcript

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Operator

Thank you for joining today's Silgan Holdings First Quarter 2022 Earnings Results Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Kim Ulmer, Senior Vice President Finance and Treasurer. Please, go ahead, ma'am.

Kim Ulmer

Thank you.

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

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

Adam Greenlee

welcome, first cycle and through are be to stage you, the as our about comments XXXX a forward to first all few continue provide everyone, families I'll to Thank our the normal. outlook to review about COVID-XX we of year. to then new doing your any returning earnings make and quarter call. the trust happy and a our Bob look then answer details Kim, the quarter well and you We pandemic thoughts XXXX current and and the remainder share regarding will the questions. and will I of financial more Bob performance

end our our of earnings of supply press disruptions impact of release, at earnings morning's estimates record reported to per We company $X.XX the leveraging quarter for inflation power and and our we the share. segments, across in XXXX operating outstanding performance Silgan first prior by adjusted share chain each ahead seen of of performance of able diluted mitigate this achieved record you've this As and per the with customers. diluted business portfolio, of of as the $X.XX higher the were we the

In even successfully pass the raw from headwind impact of segments the supply the and allowed in our the in business, entering at our are materials and customer known the volumes addition, disruptions ability we experiencing. material been of of manufacturing negative our ensure to our us unprecedented certain actions first we these production chain and portions These commercial other volume helped strong to overcome our relationships through customers. inflation each faced inflation quarter cost higher. raw several Without disruptions supply have would impact of

the As volume comparisons quarter, the in difficult our across year-over-year in were we each first line with volumes were of expectations. our anticipated but businesses

of turn for remainder I'll the $X.XX continued the in that, representing are full our volume Given over our for record $X.XX increase raising the at operational the our each customer integrating to range, year, Bob. share start outlook acquisitions, year the relationships, new recent to year, our and to over strong our success levels. it we the XXXX to of deep performance per a midpoint strong our diluted guidance XX% With business

Bob Lewis

morning, Good Adam. you, Thank everyone.

containers to $XX.X of segment and partially prior a did to as result the volumes, year significant quarter of increased Dispensing operational these an million, as segment. quarter and first $XX first segment, and the largely prebuy, our We taxes offset owing interest income converted after before the at for operational at Adjusted release, raw of Container inflation unfavorable Custom were acquisitions anticipated strong challenges, million. including improved were the The supply in year the contributed lagged from sales million ongoing million unit discipline XXXX. estimate is Custom Unicep raw gains certain each record benefits products and a manufacturing from segment, of quarter continued Easytech year $XX.X $X were the of in $X.XX rationalization from result the performance deliver across well segment partially adjusted fourth prior the income disruptions as the outstanding prior rationalization the volume versus the effects the These adjusted materials; was million $X by consolidated adjusted Specialty quarter, inflation Closures offset the higher These of efficiencies. income impact sales These the and was translation The outstanding in pass-through less million $X.X acquisitions; the year lower our of prior million percentage of million acquisitions. material the in mix of Specialty delivered were of $X.XX of were of segment in strong the versus chain follows. Dispensing pass-through quarter of million for contribution in including $X.X after Container $XX.X to Highlights $XX.X segment, of in currency and efficiencies acquisitions customers Acquisitions operating versus performance of unit to approximately manufacturing net compared the XXXX Adjusted income Metal $XX.X in income approximately the and approximately from offset million. end volumes of more earnings by rationalization a and rationalization raw Gateway customers. products pass-through operating income from segment XX%, of business, contributed and currency $XXX.X the primarily the Container the higher million, costs Silgan's for and cost by largely million in Consolidated increases million lower results to top Each power the adjustments the and $X.XX charges. mechanisms, costs partially per sold of of to the a our quarter. smaller-sized first chain of recent by partially for $X.X million XXXX adjusted press offset for of of range. the prior down our $XXX.X supply losses the the volumes mix other businesses prior a lower to benefits for of basis, of improving charges and year, segment. approximately offset As quarter. line in to with to a in million our and ongoing the adjustments exceeded volumes in pass-through portfolio versus We On charges costs, each for results due or lower quarter was of million of as in benefits quarter segment charges. discussed higher year The adjustments $X of increase by lagged primarily prior the million. and was shortfalls, less acquisition This favorable the sold. of XX.X% of of higher and XXXX XXXX teams after inflation Closure of year diluted lower mix for period. benefits and $X as costs, share the job sales our $XXX.X Container as billion of volumes foreign translation the a in and primarily These the decrease to XXXX, other nearly improvement. products segment attributable favorable of the material and as and approximately $XX result Metal each higher increased in volumes delivered sold sold unfavorable favorable foreign

expected, the volumes raw As increases. largely was in in quarter related price activity of significant XXXX to the decrease fourth prebuy advance material

year versus XX% operating prior impacts offset compared in are year to the performance, costs impact was in lower higher in of XXXX. This very rationalization levels, declines charges favorable of pre-pandemic unfavorable volume strong the the Container a of partly versus after the resin for from $XXX,XXX quarter. pandemic-driven quarter the costs each quarter, by adjustments up $XX.X impact approximately slightly quarter resin to attributable million delayed the increase X% the well strong and as of from Custom was XXXX income pass-through Adjusted year The above of the the in prior first above for largely year. segment XXXX volumes segment prior

our to XXXX. for now outlook Turning

results As are we expected, the higher as quarter of we to to end our off earnings estimates. first delivered a good start

integration going acquisition Our is well.

Our cycle businesses continue as to our and supply we anticipate deliver performance strong improve customers' operating issues. over chain difficult will volumes they

$X adjusted raised per full a also increase performance. a have XXXX the estimate midpoint to $X.XX earnings providing to range our year earnings increase our working adjusted the result, prepared XX% midpoint, a record outlook the represents for income operating $X.XX as as at which We're raw manage other flow the material the estimate our representing quarter That on a of guidance of compared Based to prior of XXXX of million, cash impact we and capital. record in the inflation over we $X.XX, in year range we diluted on second XX% share, a As $XXX net current $X.XX free are our approximately in to significant the comments. maintaining of XXXX, quarter. concludes costs our of

Q&A question it like to allow for turn time opportunity over asked. now I'll remind to the everyone everyone you question, to to I I’d in an to session. turn it their their order have Before over, for one limit as Alan,

Operator

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

George Staphos

details so is Hi. on taking the Thanks for for congratulations question. all Thanks very question far. the on much. the and margin. My Thanks progress

similarly, basis we've that of you had changes. incremental particularly then margin margins we where boom? talk have and parts the just to could Containers and back the can since XXX to go Thanks. there XQ, much trends you you comps and mix It's seen wasn't little hygiene a growth, that in been inflation. some coming parse you to if two but There's drop -- impact the some that you Custom saw point metal Obviously, X%. And business obviously off while XXXX. have at metal. So, tougher within countervailing XXXX margin or bit a around the versus Can you were moving I'd mix XXXX? saw

Bob Lewis

This is portion take metal of Bob. I'll the question. George. Hey that

the basis, think significant driver. Predictably like So of XX-plus large we're in that I on from to I think percent component when a at it you biggest is The experiencing. something at inflating about drop year-over-year you the that that's range. metal inflation X% went if X% look down a think the

then So is between XXX that points well. that's the mix favorable of that about And probably split the as of some on basis is side volume and remaining probably less change. worth the

same the it's kind been to raw of it back maybe So the materials. the the last time, of period but the against that's timeframe where same we goes another the no saw would magnitude type saw surprise the that And to environment XXXX of -- bridge have of X%. kind which not order same we inflationary

Adam Greenlee

mix Custom then And George and fill the some move in customers you Container products. segment materials to our Containers when ingredients having was raw of securing change there our difficulties packaging over to Custom other really

some smaller our So packages. those in of typically are

have So, in Custom a that we we favorable from more generating a mix. sold of did QX larger greater Containers us mix packages

George Staphos

turn it will over. I

Operator

right. All

Your next question Bank with Wilde come will of Mark from of the Montreal. line

Mark Wilde

impact And Adam, can in Bob, issue? There's available in tinplate incremental increases if even just touch people Kim. you maybe also And these a tinplate. XXXX. prompting to little at demand that any are on on substitution? to be address morning, whether just tinplate look bit I that supply prices further I'd might sources of and then moving discussion any Good talk up continued of having about also like further or wondered

Adam Greenlee

out, starting the with just conversations those opportunities sourcing Maybe for to tinplate tinplate we to start Mark. to of have morning, as our for are really products. with around think continue our XXXX we Good look suppliers world I

than more packaging business. buy of As America in North else combined our anybody would the essentially we Metal Container with you understand, size tinplate in

good we got think we've pretty So, into what's insight a happening.

customers' last as that secure needed We several growth the all been over our able to also raw think chain valued materials to of in we've the customer a we've we that pretty are years. support

think as So, it's at too to early 'XX, look I comment. we really

to spread with I not significant between at this price is But thoughts there's buyers suppliers I think point the in final is question, that happened going think those inflation within We we strategic it's where like to and our look then in your they us which of demand? right given, what's strategies world, products. is as consumer. uncover canned manufacture. of those now and on would customers doing just stability the themselves being buys of we source evident present is retail to What I'd What be them. bit incremental and what supplement And ask and anticipate at you price still opportunistic are we to data and regions we And we pretty our the around to the the of question as sourcing good. are pushed supply a our clearly, movement kind opportunities taking that to goods XXXX. is, retail for product the is, tell

So higher see with demand that for well, got more And the the has happened. their in into talking pretty environment they've even holding that our clarity implemented. we quite that function It been about and that with is have in happening. feel as outlook customers up good the year prices well demand

Mark Wilde

you, helpful. Thank That’s Adam. Super.

Operator

right. All

will question Josephson line the KeyBanc. Adam come Next from of with

Adam Josephson

Bob Adam, you are Hope good Bob. morning, everyone. Good Thanks. well. morning or

you guidance can -- cents. few help with a increase, guidance beat EPS the by you me your so On

few than guided second quarter. consensus You in lower by cents the a

So just -- Is even my acquisitions? then help like with changed? mind? you you're they just in the kind has to changed to it it Is it what last Is for of year's pack? logic relative what me months year. less your and ago specifically out, related full exactly the themselves on Can raising three

Bob Lewis

got it Yes. Good question. you And I about think just right.

look there's of front at two year in line. of a was. our in pretty you with come quarters. little Obviously, aggregate, in well well we're between generally, half expected If the to in line difference But original what the the forecast pretty bit

came very is continue the relative of well. think to we we the a upside I about think We probably there's perform acquisitions where bit changed year, little acquisition. into what's the as to think

business no reason we that operating really the Our across and performance good been three of has why see change. all should segments

Our good. cost recovery has also been

of well. good our indicated, the year. positive looks I volume we've And customers what that's with as got of then, the terms think like for of Adam So sight as line rest outlook just in the

here of gives good confidence all we're bit that sit up that So earnings in today. spot a kind of right the us we pretty moving as

Adam Josephson

likely perhaps eat just appreciate would strong; markets I can pack end Bob of still more. just seeing think any the And that. very pet market? in you of you beyond? just any -- food talk expect global that developing what The shortage either to soup in less can thereafter? or or going fertilizer your pack, for be about from But impact on terms fertilizer this food of I your so is Can people Adam, year terms end out food you're either either whatsoever if or there's the impact this you as year

Adam Greenlee

Sure. talked GDP that starting been Adam. that continue either can grow that about, well talk years or for pet food the market a you'd anything has food Obviously, food. just with and we've advance in grow several pet about rates about to market and want Maybe of to

year total pet segment. estimate food our being for So our full XX% sit segment the we today, been unit XXXX portfolio. it's Container Metal of volume of as really almost a And for good here our includes,

doing So growth customers in into but XXXX grown. for years. see for planned it our what that pretty food line we've the XXXX Bob's strategic point, sight this And organic continuing has only to many many growth all and got pet That's future. We've market. they're and with good beyond well well of not into we their

right in It's container that really volume store now, one very for shelves below our we there I'd pet about our the are items of good performance So talk about food in to segment slightly expectations. of tell simple. because on feel is it. -- the came you stock-outs QX

installed. good had were and capacity and the additional is through them. online for capacity They ready are already they labor as The And Our capacity. not customers to with we'll materials. new We able as in supporting just our resolved packaging being capacity those the with ingredients see items cans. clarity they but other brought invested trouble addressed fill that new those and news, had those QX, issues are cans

the that about capacity the back and filled So feel good it. be will we in year really of half

as a favorable new I the tell seeing all right the are tell again and I'd final on see get retail would the was increases of you only plays pull-through bullish. business discussions the of last the increases, customers last to Adam. question the soup, tremendous us. opportunity soup, of It's going And that you first back home. year of how fertilizer to strong soup about season. least the they're mentioned then, product through soup not due increase what and increase but cost the in consumers in our the and say, the market they products with quarter purchase first at had customers to soup US is planting were how now because You'd soup. at on pandemic with affect. right end season was fall. pack reached sort had a soup And that, our They And very for during their fairly We'll very their the are that's mobility the products continuing saw season in that we of time pandemic packed cooking volumes now. at pack into really you had I'd to year. the Again,

with through the our for So, we guidance we pack came out XX had original our customers when days plans stronger coming are year. than with ago

today on more the call. to confident Bob's feeling part to the last So, how about as of year did than answer the point that we're is we

Adam Josephson

Adam. Thanks much so

Operator

All right.

will Panjabi the question with Baird. of Ghansham come next line Your from

Matt Krueger

wanted volume the I for on guess everyone. morning in Ghansham. focus the actually year. sitting Matt good This outlook to is I for Hi, Krueger in

then by specifically detail business break volume performance what Thanks. great. your organic of embedded around as to assumptions volume in That can that would the And out for versus are XXXX? So, you you kind business Dispensing some business can acquisitions adding added provide be well?

Adam Greenlee

with -- the Sure. start of volume we'll kind expectations. just Maybe full year

part Closures the risk most for outlook most really we So, we volume We and the Specialty what -- came changed into been look part. for hasn't as year at segment, the the has mitigated just the Dispensing our versus with.

in then pack back pandemic-driven health means Containers, over in through we are again again, call. of those and were be is end slightly volumes are until basis markets. change in get on of see And in about rate. sports seen in normalized And buying that have will at a the that's just you late year but Custom continue fragrance our we and that, demands tell this be feel a one totality. good had year to year products our just we volume-wise. quite We're and well. part the to we items we'll of record So, to performing going then to we QX based were really the large that just that we balance They're we're really pack growth again. And I'd that that no to where volumes health those signs as uptick are the we've to going our estimate starting upon drinks at good in terrific products normalizing business tell got that people business strength And roughly QX. really of We've full the in hygiene that for but you QX. year year. I'd provided some we seeing wait hygiene well cycling also Containers, down some from and recovery again, Metal In nice last the recovery

similar tell that and for a clarity segment, So, rate the what Dispensing but expect, is growth And our looks to two then -- organic what last more of on on was I kind Closures. continue Container and our growth you we excuse like. container volume just me your a percent question half, would Custom Specialty of, rates

that top And again for Remember of of delivered is year. a volume couple pretty a X% X% of in last volume us. So, diversified this we growth things. growth the quarter on first is our segment

And we tough was metal for of comp was Closures going a and essentially were be because health the to Dispensing a offset metal the those There selling hygiene each it Specialty year. products items other. segment. of last portion and really impact pre-buy closures that So, our

through some the had the growth to we the so volume very of in acquisition. segment is organic growth balance and slight And the going come

Matt Krueger

it. helpful. Got That's

first single-digit Great. high during the quarter. contribution So, acquisition Thanks.

Adam Greenlee

closures. of the metal you've some through then bulk got was pre-buy the X% The being organic and metal by Yes. offset growth acquisition for

Operator

right. All

question will with of line Gabe Fargo. Wells Next from the Hajde come

Gabe Hajde

there's a mean even to segment. Good that. and kind the And that Adam of morning thoughts minutes and that Bob. supply chain in let's think missed think But and margins years. this. got outlook that said or standpoint, It's you joined being here feel appreciate apologize and Specialty that? the business for sustainable XX% get in cetera? about to manufacturing the mean product we thoughts years just maybe are was guys from et ask season Dispensing Mother's you in a obviously are and selling going for in holiday -- I like if now mitigated stuff about we high again, measures I what's so. in late. of you for about then but Adam when couple two like wanted kind China, I I I nonexistent it things five re-lockdown then teens, Day any I been for, probably efficient on risks mix, I'm Closures your say, a volume I of curious I driving

us for it order. there DUCs when -- magnitude component Can be Asia. investment should in last and that think then the like some I segment, risk So, contributing? it's going be and how of you're And timing you could to in some capacity remind of adding be seems that have there. it But just

Adam Greenlee

to all from Bob A them up I see will can, so that, clean if hit lot Sure. I'll anything that and missed. I

as certainly five systems in into dispensing and years, the rate again, over gotten the area closures the this segment the segment segment. all first dispensing of we've has the So evolved margin itself bigger-and-bigger of last we

to mix dispensing we dispensing really additional continues So of portfolio time balance the the an essentially, well. But it's any sell system. perform favorable closure or

growth So, organically forward in business expect well. going as and terrific acquired business in that first we've organic step we've the continued that growth of seen since XXXX,

most not good the acquisitions So, margin and comment about margin think the but Silgan continue what wet additional as the Dispensing opportunities segment we add acquisition China, do is before only margins. organic as recent our on China of through business. part profile with what they'll growth a expand, the do relatively to expansion of it's We as and feel I'll total small Closures we've to well. your of well. in segment Specialty we edges And provide will then, in talked you, remind but And the we the in certainly just

then, that are the manufacture measures got we which I sell U.S. largely based on we in manufacture in do exposure based typically in China. materials Europe. there we as South we lockdown the down you've in fact and source yes think America the geography So in well. going And that, largely geography But products some locally them in Western the our where in

think we are exposures handle pretty up look the then, And impact at year. we online And new we've of of company. hope year the and got underway end Dispensing be those for Closures. capacity ramping and and Specialty by end the the the have new the what capacity going that's speaking to to to broadly like like projects So, those a standpoint from a on good I feel

will rate until So get the we full run increments XXXX.

Bob Lewis

that systems' your would dispensing price increase year It business acquisitions quarter. on go I I thing around resin profile. the relatively and small add But the the a got bit benefit more to the a recent only to of prior where that question the year-over-year you're And recovering on is is really leverage about dispensing a we've of lag Adam more seeing that systems Gabe which question that's is of cap you've the than piece higher-margin margin the said, that carry-in little what basis, flat remember add margin the benefits we're everything traditional back to is business. the the Yeah. margin too line. the the done if if from

Gabe Hajde

Great. good Thank guys and you luck.

Operator

All right.

Your next Viswanathan from question of the Capital come RBC Arun line Markets. with will

Arun Viswanathan

on, Great. I just Thanks guess, my of question. for a curious I'm different couple taking things.

within Containers on what the have some could Just just of the on curious, categories demand we and resin off Custom on and seen maybe you first the some So side? maybe also side like drinks improvement seeing drinks discuss everything. you're energy

wondering just maybe offsetting you some if the that's on seeing weakness benefiting the you're So side. cleaning and of

Adam Greenlee

of focused And that's I resin. we just Containers Closures Specialty for of little since talk the and this pass-through business about very on bit a Dispensing may resin I Arun. well mentioned. tight is Sure actually as a Custom as But been demand been very a talk with mechanism products and business for some Silgan our the beginning. We've

have on our business segment of an impact portfolio. this resin much that So, doesn't of

have on able rate would for food segment our and hurdle customers the that global for demand a perspective yes to business of we're looking QX this you to at resin back well. of ingredients tell some at the resin those increase higher costs like, kind now. now to for the so right And what to is I economy. and the quarter. From one time as end food in going is did It run the have through we're products more looks our pass quickly a But

talking egg right an proteins now. and starches. You're shortage about There's

as business ingredients right to et dressing, come mayonnaise, amount such such products The now, as in a cetera. we've So very by of decent food hard are expensive. salad, got and they're

a almost the a improve year, kind We and than we on second good. demand, market we're our part, as the were to we're seeing kind point forward that's we we're that. drinks et on that in through of most our across really has summer shortage demand the our Closures as in XXXX. in And in working bottles markets of back the beverage and is for last to trajectory and support at filling customers, very of sports question for perspective, continue cetera, beverage the the now half then of the categories. But expecting exposure energy and just peak Dispensing they to market. certain most go of seeing strong we're run But where and our for your exists. to drinks just to Specialty demand of their very our So from our been rate customers customers approaching higher good And and their were support QX. we're There segment board,

Arun Viswanathan

cash could It a free ask full EPS Thanks. are on guiding below second maybe like about but Great. us little then looks the you take did you flow. an quarter year. I up And basis, for bit

how would running through so free a and resin that cash just price little cash free think what flow? you capital free would about bit Thanks. the that's the flow, cash And So tinplate system increases or well? given as Is inflation on working say on you more there a flow? drag

Bob Lewis

down would Yeah. were and be working that's year, as expecting a a That's we We tax would that certainly the year-over-year drag came on where why cash were when right? we're we capital into basis.

if that, proxy that hold we outlook. I spoken of for going that, As use to million is relative you forward, to now we increase profit, To roughly the that a we've think think $XX right after-tax confidence the scale cash. earnings about as of you

around basically continue inflation. everything in we've think wanting working we're now, a as order so right just little in that to capital sure the bit to I make And see got cautious we

obviously through that approximately pat we and our there's to the year, so flow half cash quarter into here But the back $XXX prudent we with we're free of million, stand stay as thought, it sit today. as opportunity optimistic here. we guidance the of second go And

Arun Viswanathan

I Metal one ask then Containers. just And more if could on

put now again, self-make you and on impact right own example. their on that self-make peers of know you your you there in business your capacity of with would bringing that your capacity? has more was on about negative I rationalization drag capacity hold before, guys? comments any one the that, on So, from for And then footprint? stand now. is peers Is there And And where do a comments own footprint? was any offer

Adam Greenlee

go first to when manufacturing the we shoulders bit where have in Well, our of kind of of back think and capacity year platform, you year. the a of about is quarter the the the year. I'd talked And we the quarter what the end about little fourth at

year through, we was very were market cans. a a working pandemic So, for ago, the as tight there all

to So the with do industry support we our did best those in cans.

so And industry cans making our well. of as requirements the others while did few well, as sure we all customer we also sell a met in to

talk cost-reduction efforts as how our we're about to we make system volumes that above levels. footprint As at I looking we have. sure definitely have And normalizing about looking like call We footprint we levels, the footprint volume ongoing to – make we still think we XX% are those right efficient. pre-pandemic at our and at to it the that think more our have we support always capacity,

Arun Viswanathan

Great. Thanks.

Operator

right. All

Next question will Pettinari come Citi. of with from Anthony the line

Anthony Pettinari

Good had on question I a quick morning. Russia.

And, status. secondary don't direct could I or full I know you'd is original Europe, flag? about think impacts, talk plants any of And kind into availability there not guidance? the impact there had are or you if you I of just maybe two container the year anything wondering if trade versus metal any flows sort was there. metal

Adam Greenlee

Sure.

health start and just did and immediately maybe Silgan still I'll new of limited care-related all Ukraine. in that we're the the of a what packaging our suspended calling and basis invasion investments number for very So of with On Anthony, a essential has fact that small selling we're products. we Russia upon humanitarian products

that three as vegetables baby an were application health really, well product. care then essential It's that over-the-counter in and we continue food, sell spray deeming an So products canned we nasal it's Russia. to

required of into invasion import -- raw and And in any did additional raw Russia produce in-country our of manufactured the the happened, once products. us, any materials Russia. cease we materials in for to are consumption So products most for our

facilities as so mentioned. have we And you two small

those We essential facilities. both health and is we care our have a humanitarian point mentioned. of begun those categories have I sales wind-down in operating at this But that of ongoing intention

Anthony Pettinari

That's very helpful. Okay.

Bob Lewis

this you. -- Anthony, to that is for just scale

XXXX into I'll in the guess, Russia Russia or total investment profit. use our Russia/Ukraine a sales as or than into Russia The I So less and about Adam -- fixed balance. side off X% total $XX say to about on the and if a respectively we're that the is you proxy, of X% profit up and that which as trying a of asset bit coupled work the majority is said obviously AR million of with bit inventory makes were of

And so on are as let long continue, we as paid, we'll Russian side. that we're where getting but sort that's the of

Anthony Pettinari

that mean -- to I what's Got maybe -- output or visibility availability I is increase gears. to you supply improvement? chain That's think. customers' mentioned driving it. the have access very do labor And you just it. it Got raws In you capacity or it switching is then applied? given their and something ability that And release, or else new just using -- into I helpful.

Adam Greenlee

think correct. Container really pet our food segment. this you've Metal specific most got of was And I to that very in

employees. cans staffing made tell what own So well, investments into their got pretty trouble filling have investment of for also had as several customers we've And additional their but lines getting did ingredients other or again that trouble you, finally, packaging whether is to capacity. proteins. increasing facilities those tight I there have also They food items the some would then Obviously, they some are secondary and sizable those support that they'd as are products supply core with the be in starches well. pet have

far to challenge a not customers our constraint that been customers' operating and job a products I done think for that terrific have as have the at products packaging really needed continue teams not them to it's our operations. testament their Silgan facilities. supplying a We've what supply filling their all our been do of to we the as

Anthony Pettinari

Okay. I'll it Thanks very helpful. turn over.

Operator

with Stump to go Capital. we'll Alton Loop Next,

Alton Stump

to understand at-home seems morning. off, pretty obviously there's mandate coming can But that mask consumption Thanks we've lot Great. Is seeing out is right going inflation. point, good food data I more. just point a prebuy what Obviously, at-home guys, now much impact to having the ask any that whether consumption, consumer the are to that well? consumers demand. every fact bev on it's there's as and/or but seen you're I does if still then overall consumption. and with yet not wanted of now pieces

Adam Greenlee

That agree conversations look we Yes. we what Alton. what That's as well. that supports customer see. is the that with our would data at We and

Alton Stump

to a that. Great. And as then just follow-up

any noteworthy the demand consumer customers are anything come seeing package or As that hasn't pushback because of from on increases but cost front? down, you other switching substrates to or

Adam Greenlee

do in Well, a that environment. living inflationary very I think we're

are inflation. significant that the packaging into So of seeing substrates all go food

food inflation a across So all of rising it categories. is almost tide

point, falloff see demand demand products So at our the we can. this any of really don't or disruption, any for switch-out a

nicely pandemic. cost and nutrition believe continue We getting out. that It I means early that's indications playing time to for continues think to the the then most consumers. to demand more seem say post-pandemic out remain lowest of the can And is levels. I'll have during call efficient And above are it here one XX% They're it products. strong normalized. that to that our pre-pandemic those And played volumes

Alton Stump

Got it. queue. hop so back much. I’ll the in Thanks

Operator

right. All

we'll go Next to Deutsche Bank. White with Kyle

Kyle White

slowdowns. business global Dispensing. want taking in for I Clearly on food to and just your Thanks resilient defensive morning. question. of is to the focus event metal the good can Hey, be going

that the expanded Calmar? demand be curious How portfolio characterize and your resilient past you for would over years as the business Dispensing has during greatly fine would fragrances, five your to downturns? beauty, mist Just Albéa you with expect how any

Adam Greenlee

Good Sure. question.

to and Closures showed manufacture products. about on for light power beauty Specialty. back early release business this products and we the a bit and and for Dispensing and demand the part the little tend Specialty that It's think Dispensing the and very business, use to really we health I and up call. the It's our fragrance even our demand tremendous term of our of pandemic portfolio. we a go in of sell I'll very that set from talk diverse as where had press products hygiene we

As garden we've significant we lines. saw product and in increases through transitioned the home pandemic, our

So serve growth markets to I that this another broad to forward. just would array one -- a tell be mean to that seem business for provide offset to -- have continue we the of I ability organic you Kyle that going

we what feel And as of fragrance of but there good that. is forward, so the would by that well about if we do, a look fragrances and incredibly way an impacted in is other very we important any slowing economy markets is component respond

Kyle White

cycle And and cleaning demand hygiene from then quick behind the and just inventory this And impact when you of Got home that? was follow-on. do as products? it. kind to through on the What a get expect correction from

Adam Greenlee

health was question. the And That I just clarify products want and the Kyle? hygiene for to

Kyle White

Yeah.

I think release sorry go the ahead. yeah, press --

Adam Greenlee

ahead. Go No.

fine. You're

Kyle White

out hygiene clarifying. and release just be? within correction was called in I products cleaning Yeah. would inventory press home The this the --

Adam Greenlee

Yeah.

end supply chain we now. So and health a correction quarters we've through of been believe hygiene that. going nearing is several for And that what for we're the

correction. I QX we inventory be should think out cycling of the

will cleared We are half repopulate And think health the products year. and exit correction right hygiene now we seeing in of QX. the as that order inventory books with have first for shipment we

Kyle White

Got I’ll over. Thank it. you. it turn

Operator

right. All

Roxland Mike Your question line come Securities. from with the will of next Truist

Mike Roxland

as Thanks very the mentioned the for comments your Closures. book order Last Specialty much. Hi, and on quarter just where that you is the Can Dispensing Adam, Bob, following-up give the Kim order frame now on congrats just you book strong Adam, all that let's the stands really to quarter. us how way beyond on an through growth just say that business to XXXX? in volume XQ. and update

Adam Greenlee

Sure.

really kind I markets does serve. the into think of of individual the that we it get details

you fragrance. So full we've I'll talked fragrance a for about order period. book lot tell the is

we're conditional market. So fragrance in organically I'm the customers sorry late capacity that will support to with on in adding -- our year come or additional growth the

the home quarter. up little cetera we book products, our better. we back of room pandemic to bit that picking order think There's surge cleared health it's still wiggle talked a the and care trajectory in feeling prior of had the for QX the et in hygiene But we've orders. we're some home and for we're think about products, additional that I

really about feeling So it. good

the expected food we've at growth us for ongoing that you looks we've profile beverage and of balance the pre-buy as about and If of that activity food talked will business get that our once beverage look very through we metal strong business, to and well. contribute kind closures, the and

Mike Roxland

mentioned you're just the comments on had have on of you you. of number I'm thus the trends that that you issues the you've pet that in call to XQ? other food wondering that the any times see then now. starting if seeing? terms trends seen And a that Got in businesses then right far some And to expected You any anything customers you're early -- correct. of

Adam Greenlee

your we Yes. there. with again each I start question in tell more month month. Metal shipped QX What I'll successively Maybe since each cans would that was in one Container you in

our up. the So highest April weekly in And point off increase volumes at shipment month. as that rate point any year. of this prebuy actually It's our is impact each wears

feel reflect book we'll and year. that we the that now of roughly Metal Specialty. And good see same Shipment we Container the that's and why The increases trajectory season and about the Dispensing increased we in we and rates we anticipated for well. So rates recovery food the the order QX. into have of volume business. segment really as I'd volume. have same Custom kind well as beverage for say as thing came Container improved The as get order the into those

Mike Roxland

quarter. you. the on Congrats Thank

Adam Greenlee

Thank you.

Operator

All right.

from of with Jefferies. the line come will question Daniel Next Rizzo

Daniel Rizzo

Hi, you. me for Thanks guys. in. fitting Thank

that's it's a a a costs You that's raw large about lot chain going of -- on. wondering just particularly and energy if cost supply I sold part was and given material significant particular headwind everything Europe then goods issues. mentioned of in in

Bob Lewis

that's question of total electric goods again X% X% going scale no a be cost sold. somewhere it's which there's it's in headwind Well everything is probably it gas you on. to given energy, Yes. But just to would and of our the for

insignificant, say of the in some other I it is important it's as parts as -- industry. not wouldn't it's it's So but

operational a at moments exactly a can. where supplies downtime efficient out that a done try efficiency more lines when and think have and of of the to figure take we run the to to our peak energy way. of part We've all those I nice really teams work time best lot trying So in job done the procure

that fairly I as some in nasty a inflation forward. job to face keep go focus think teams doing the net-net pretty continue good a of So and we're the will as we

Daniel Rizzo

of call something with environment And that's if think a mix last I no the asset the changing pensions I headwind like because that. in that on or wondering the you change case. then But was were the mentioned longer

Bob Lewis

reset income-related is fixed be the portfolio a we headwind versus more because to Well it equity-related.

what rate at through where need so pension a happens And up. with basically that you true year the until you it assumption to run you to point is get

market. we exactly But now we given until what through right So the going what's the a been that to of order we think year to is. that make move conversion progress understand to will that that's on wise in really wait have magnitude

Daniel Rizzo

very you Thank much. Great.

Operator

All right.

with George of Bank we'll back Staphos to go America. Next

George Staphos

Hi, Metal guys. competitive advantage see Containers. for is also Thanks and for follow-on. and as Dispensing really The for question my for around -- taking comparative you it your

Containers Metal be the than analysts. what other this And better your Dispensing. -- able in up appears somewhat And to up perhaps we're more just believe to whole the is grow what have job in or you've seeing been newer one grow? are to then you're less leverage advantage allowing you're growing good more Street? just that within know in share by in a market as feet finding -- the market keep Silgan the don't it would within you investments? you be maybe what to Do but or interested Dispensing indirectly you're the growing? seem What's Is in showing So you there. brought think would was The the it the to a organically on maybe And that key keeping I agree with as thoughts I doing

You owner are in pie? position obviously the Container record good it's when business capacity. take and than their viable and a food can who maintained quarter. of confidence Other maintaining been you Thanks, obviously earnings can continue you of is its have new adding gives luck to have Metal have the piece track some that pretty growth looking the guys players good quite its which what a peer new who Silgan's you another has business

Adam Greenlee

that to business business the them well. comments would help entities in Silgan of how with very George. Specialty total. George, of confident feel saying about are best-in-class. Dispensing to have a and their And We of job apply we intimate all we model Silgan same and business. the are have I success customers we employ very And heck we've But close. Thanks a working really, with we is think in these Great. Sure. Great And part a start segment. And in questions. believe all model. their the our Silgan Closures large that in I incredibly think with understand Maybe we'll service them done

model, continue a in thing and So, the improve. place enhance that's we is time for a service been long, first terrific to long that

what that We in Secondly, the say our the we're to Silgan to customers We support it them do. we're don't we we going just say say to we thing exactly think happens. their about bank goods. the do do then I one take going over-commit. initiatives. And would and they We is, deliver when something, that

we industry we and reasons teams best are new customers. commercially. say credibility So, have And that we've that helping that of are with gone well. and with described. commercial commercial We're very the I long in got intimate for then our from has rewarded being opportunities that tremendous our way a a growth businesses perspective, relationship them just mentioned I'd kind good their base customer with all our as grow

about talking customers of front growth and in opportunities. we're So, new

make to end goods and in are at how even we our deliver the better for of We understanding that day. then the rollout customers the the

a So again, a and I we quick of few doing better are for summation Closures. Specialty that than things think Dispensing others the that's in

to grow the of we're and of the Container We earnings to maintain to over lot segment. Metal continue confidence that as is. business Moving have the it a do going

talked that's have got supplier. long-term we've of George, essentially, those your contracts, under long-term to significant And contracts. a you this portion with business we've As work

They're time talked got the going the relationships Again, XXXX, as well. make their impact about has We're continue only that to to investments with we've again customers. on do -- And our on that that. changed. willing to We're opportunities. And horizon items items nothing investments over long-range so, that working is, we but historically about very great QX, are not our their we've might the done intimate we've growth we've growth. closely, to And a our been XXXX, support XXXX. pet might impact organic lot what food and

defensible So, on we in of feel the metal regardless we've in what like going incredibly cans positions is else got market. food

customers our all in through space. have the can food change with relationships stood Our time metal

Bob Lewis

the Adam one add George, thing would it's but mean to this what can And see said performance we've commentary of as press getting in and teams questioning of businesses, really, business of that the have those up. of that -- competitive a is the you're our and costing here. job of out getting good done moat itself really against and goes release a that I threats productivity costs throughput sort and operational really been the really the sort through well. for you on both of I to business point the delivered, it of types

job the think I of of customers just our got and confidence the face support way that a not So, business go we that's lot day-to-day and on that about in efficiencies That's the way operational the really, their teams basis. -- inflation. we've get our the teams a do this in

George Staphos

have That's to a always for and the thoughts really And quarter. cuts. soon. cost Talk the that's right, Bob, Bob. something the guys on great been you've you productivity and Adam and Thanks pushed

Adam Greenlee

Thanks, George.

Operator

right. All

Mark Next we'll Bank go Wilde with back to Montreal. of

Mark Wilde

food go business. on Hey, about talk cans a and European further to Adam. the maybe little I'd like just

XX that since And has for a kind you it Europe. position was it's just of bought Vogel I or doesn't -- grown. years think been you about it XX & starter like business Noot. seem That in

different in Silgan's it business, seems Eastern since has challenges the some moved had focus you in bought Middle Europe. and like And in You've the directions. East

a food can you think or you position So, about Europe? just you talk that Is your of that position want forward? reassess to going maintain, might European you how can that about kind business in

Adam Greenlee

Sure.

we I in – Vogel Noot Mark business think & acquired the of fall think XXXX. I

the – the the filling – their rationale locations lower-cost moving was locations and filling for customers from part investment higher-cost time at Eastern locations. So were in. to Western Central we're of And the decade a

can have that the geopolitical thought opportunity growth proposition. we get in turns to we at last the items of was an decade. level and And Central were of in European filling of potential as So out a kind Eastern happened for it ground interesting lot

five years, thought. to that regions of can of multinational our the business Bob that we more even the success. filling a business And grow customers And with we and of now maybe continue in really, to the had business the me Europe. have globally years SMP or them position for conduct with didn't have moved do other leveraging materialize we've And obviously, so help in that – actually to business engaging quite move shifted our we in better four as try Europe. on part we probably really of we've world, with three And the bit thoughts to through

manufacture customer I'd we we with business parts that the to And for pieces financial is world. growing. Mark, of you, years, customers. actually performance in several tell the a single-largest multinational been have large multinational has food is have pet now other as And related business the the piece So there that for of we business improving one of

we market that part feel years very we've in we than just it more we strategy provide that we where supply will business business, was in So the bought revision reward a large the couple smaller in And not pretty in the And but to more out standpoint, have it we for much our we what we when ago, that US about customers back From that a do. successful we're that our that carving the long-term customers, are a there. us been had focusing through is of on business scale of good on XXXX. implementing niche contracts.

think fit a good customers So logical a grow for well. think as the what to the continue as multinational geography we for in we in business it's extension do US. and it's with really European their they logical We us, our

course the last over certainly nicely done the it's of So, five years.

Mark Wilde

That's excellent. second Adam. color much year. the and perspective, and quarter the helpful good really through and in Thanks so A luck

Adam Greenlee

Thank you.

Operator

All right.

one with in Adam take question more from We'll that have queue. Josephson KeyBanc. We

Adam Josephson

stock. growth obviously, If stock primarily anything all? acted I years stock – a has the obviously no that Analyst you follow-up. Thanks a But were characterization opinion defensive earnings perceptions was go in last And two mind. else. taking accelerating related years lot. Adam, few that Day, just don't ones declines by pandemic been has that a can my ago defensive my like at Silgan where you since a aided to you then your the if appreciate I of longer outstanding. kind earnings had declining can it. Thanks back addressed about much ago. has was your growth three the that Would and just for you food And food the still it is than quibble with more market from low

Adam Greenlee

our question, here. a offices around it's one Well, some really good that talking we spend time

actually the portfolio. of recall just products cans pandemic about for where that Silgan the that year-over-year I if can in we're at growth very do in out our our Analyst I communicated and we growth going volume outside and said us do a volume. to could Metal that we And that, to food were are is think the is exactly we've reiterate XX% total volume what that, be. you a in done that We it close we segment for And delivered to we market. you certain I'll Analyst because almost what the see impact what was it's what point food getting Day. So, we've think tell in set exactly growing we now would Day, of food growing Adam of saying of has Container pet seen, our

business. Container different think do than at than and growth really good do the world worth. Specialty whatever margin those into the our just we And Metal We Silgan in the we we've it's think had for Dispensing different rates segment, So and the Container historically for the segment. Closures Metal rates investments are about best certainly feel the the that's continued businesses just and then what

We company feel market that So, our and operating cash left that to done to put is our the the market. founding generate think of going the components really our that growing at years what can cash we're of segments really in the cash really about of a it. incredibly the a feel very put all use to historic are the in last of we we five prospects Silgan to our good to decides is that those the use even that markets going with that really lot what for we've think up We three we've is, operating better feel that ability been all together have Silgan. about and faster value portfolio place. kind is the very tell to each businesses And of future future those the growth of we're segments. We done. deliver than bright. love upon how I rate the about is growth What to we in bright And opportunities have teams you from good for strategy implementing

Adam Josephson

is your was, where because XX give you've up I That my And transactions closures XX% now or times you're EBITDA have business appreciate business can food typically below question historically. yet, your to recent trading take. earnings it years. in related call paid of bulk that been

over if it the better and can, past getting though it years market entirely for still a think other you is large think couple about not lost differently gotten have than food that? just as So multiples. something this has as predominantly translation. you business paying though been it And which you Do in the of seems of you've higher company can investors food like any seems even much

Bob Lewis

this Adam, is Bob.

were business in that peer the pandemic, continue sort or question growth I problem, I that, lies and hard through think, that and is break the time terms strength as that this the now our have at for we therein combined to that that's been well we the look near talking of in said to I portfolio right think the you're meeting in that the it's a about, do cash in you that think overhang of I we out you been but always unfounded one of perception And of necessarily, an the the is organic and areas. and take seeing top you sort us other strategy post are perception. economic the business consequence been into Adam our long laid think think to over Because period of the not that all one the way it's flow rates through portfolio. of grow of and pandemic defensive group, I started a dire only some if

of, you doesn't this think understand. is this feel, really That's And what go-forward think business at it of I on question on investor about it a we internally, I that so, and about a said, the good question Adam the the are prospects really are story basis. what as least because crux the good of

understand get that to to well. got shareholders we've somehow as so And

Adam Josephson

so Thanks Bob. much,

Operator

further All we It right. no have questions at looks like this time.

Adam Greenlee

your reviewing Great. the interest look you. and in in quarter to And thanks Thanks for second results forward the company everyone Alan. we July. Thank

Operator

That participation. thank your today's We call. does all you conclude for

You disconnect. may now

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