Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen. Welcome to the Silgan Holdings Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] And please be advised that this call is being recorded. [Operator Instructions]

And now at this time, I'll turn things over to Ms. President, Treasurer. Vice Senior Ulmer, Finance and Kim Please ma'am. go ahead,

Kim Ulmer

you. Thank

President Adam company and CFO; Joining Vice the are and Investor Greenlee, Hutter, and me from EVP today President Relations. Lewis, CEO; Alex of Bob

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

over Adam. With that, to I'll it turn

Adam Greenlee

Kim and Thank call. fourth full earnings welcome, and Silgan's you, XXXX year everyone, to quarter

today, provide we and of full growth highlights our will for results XXXX. the our review performance continued in call fourth outlook around year and our details the quarter On

accomplishments that steadfast employees environments, together, customers, I'm results. economic year partner Silgan achieved to proud and record of we've show XXXX in another continues for our our shareholders. our incredibly another the that entire year and to as in posting the of EPS adjusted exceptional was a variety of record consecutive in through built sales the proving remains Silgan business the sixth yet delivering growth and Silgan, year of a double-digit momentum we've team

into in best prove our out, that continues of and of founding to meaningful we do being at the value day creation translate all by our competing marketplace for our and stakeholders. in the principles what teams Day winning

prior significant business adjusted ahead throughout year year. in known customer challenges focused unwavering XXXX inflation. raw destocking the and our retail material supply as earnings and from overcame, difficult inventory of Ongoing volume significant disruptions Our comparisons ongoing growth pre-buy and yielded chain despite the activity

costs. XX% our highlights the earnings with discipline A versus and prior inflation delivered are raw combination we period sales other adjusted inflationary on business $X.X grow of in XXXX earnings our and share versus contractual materials, arrangements follows; billion, In labor, long-term unprecedented costs a adjusted operational prior record helped per passing few Record record to the year. XX% which in increased in of energy diluted year. $X.XX focused outstanding of our up as through performance,

million Free income investments revenue, and our and business. cash while record segment in opportunities; in future flow $XXX of Dispensing and volume Specialty make Closures margin continuing high finally, to growth

we businesses high higher at income in partially look the least beyond. XXXX XXXX interest we we be higher we rates our to confident exit exceptionally as well to expense interest in improvement at ability with ahead drive remain our continue an and and to As which in More executing levels will in of unit XXXX, will on pre-pandemic volumes by business segment build total adjusted offset level, to due expected our momentum XXXX. believe organically mid-single-digit specifically,

intangibles. income prior in adjusted as -- XXXX, and have the pension periods release, year beginning year we press for amortization outlined prior the In and in the the acquired addition results of

volume our growth operational growth dispensing Closure Dispensing of to in markets segment segment XXXX, in From of adjusted which high segment including volume primarily In improvements we our roughly segment double-digit our improved growth adjusted and business. perspective, a as total single-digit in volume by growth and driven volume we volume and mid-single-digit Metal expect the half represent higher-value our single-digit and continued income mix, food Specialty low mid-single-digit in produce in result low pet a see products. to the growth our Container income mid-single-digit segment, segment

Custom our the Containers volume year are adjusted with segment as expected to showcase volume to of to growth Silgan piece we year. nature about store the we business higher-margin discussed that digits, expect business continued improve a single and success of and replace cycle continue and in our business the In trends in the long-term in a income new the as XXXX continue to segment, volume opportunity the has low digit beyond. grow decision for to later what low not excited single contractual future to renew previously in throughout with We're to and over unique

the With earnings our through around provide results that, for color financial our Bob you and estimates will XXXX. of additional quarter for specifics take the

Robert Lewis

morning, Adam. Good you, Thank everyone.

As the and continues at highlighted, level, quarter record high sales earnings business share. delivering a to and per year fourth Adam execute adjusted full

This outstanding through managing ongoing significant cost inflation. pass-throughs, mitigate contractual to did volume to Our and pursuit an supply is analyst businesses recovery testament and a of job excellence a cost complex discipline inflation. disruptions operational our chain backdrop,

were year. revenue sales up the net over or was partially foreign growth X% offset currency as just fourth quarter $XX of organic versus million billion, Net of million. $X.XX for $XX by XXXX approximately unfavorable the prior

resulting charges the volume income price/mix XXXX. growth our million segments. declined expected for $XX driven million on the of result as year-over-year organic than fourth in quarter Our inflationary of was of of rationalization more $XX declines quarter by of a basis, in a cost from offset which each primarily segment Total favorable pass-throughs

recorded the as sold restructuring limited XXXX humanitarian $XX of this for the no products to will During charge the quarter, produce longer to which in market write market. assets we million we service down used a Russian were

are in driven food for segment was a and of approximately our the steel quarter the and Specialty prior Our of better income end the XXXX. and Dispensing demand of increased year, to from ahead the in volume pricing inflation income disciplines year These as than period segment beverage Highlights activity from foreign decline recovery pre-buy compared the more prior markets million currency result cost as the and operating strong X% Closure benefits follows: performance. volume primarily offset quarter lower an which for of $X benefited and headwind in closures decline. The significant steel by

Container the million Metal rationalization from decreased year a $XX quarter. in the charges prior of of as segment result Our

the the our lower of footprint benefits, better costs impact efficiently ahead efficiency our rationalization steel of primarily us charges, Excluding combined operating to with segment volume activity difficult inflation XX% XXXX. due which than with increased year prior levels. approximately volume income quarter decline. year, more was in a comparisons of the allowed prior more XX% in These utilize the quarter inflationary a and XX% manage decline inventory strong result to the pre-buy recovered in volumes overcame in versus The as volumes from

Segment segment as pass-through and result cost income price decreased recovery. expected Container Custom in an decline XX% a in improvements of in overshadowing our volumes,

care business have as unfavorable personal first year. the meet well discussed, renew volumes volumes in was our result The an we the through of awards lawn to contract will in hurdles continue not commercialize recovery expect expiring previously and XXXX to reinvestment decline return the on new we the As impact of as to in home and customer the the half products. delayed as did a later not in the quarter renewing primarily that not contract decision garden,

outlook the XXXX. for to Turning

assets are our excluding from growth record businesses, of we with share. earnings, metrics adjusting adjusted the XXXX which consecutive we by estimate years adjusted of share we closely X further the align diluted as leverage per of amortization per the in adjusted internal of external momentum we U.S. our of in to $X.XX. expecting manage more segment reporting for the As are To acquired and and delivering XXXX pension earnings intangible range income income of impact we earnings diluted $X.XX our definition

pension have liability-driven to participants. at and Our will approximately XXX% ended portfolio investment plans plan. of believe we are a funded satisfy the elected the domestic which requirements we to XXXX Therefore, cash new close deploy

a As with expense of of to is basis acquired is the not ongoing peers. of align that us on our this this the comparison view amortization reflective Furthermore, non-cash intangibles, our a business. performance will the acquired is

purposes, prior a adjustments to to remove on our been website periods comparative For these the posted section. Relations reconciliation of has Investor

high segment compared to increase prior to adjusted in total year. digits XXXX income the to as expect by mid- We single

per to of approximately for cash from $XXX of XXXX, earnings of we Based earnings per use 'XX, on share increase our exclude of flow of earnings a adjusted per growth year-over-year lower and of and to compared estimate B a estimates million represents interest for $X.XX customers. are XX%. of offset headwind a impact year is range $X.XX midpoint tax we as cash rate providing a of by release. year-over-year be partially approximately expense Table outlined $XXX CapEx in share new alongside million full of $XXX million, as and increase an of invest in between as which current free XXXX our adjustments These we share XX% capital as The XXXX and which press XX% approximately outlook our our higher certain includes 'XX from core in working expect the

while Turning quarter $X.XX the $X.XX $X.XX adjusted providing earnings incremental $X.XX as income interest diluted a of the period. first approximately adjusted approximately Included interest estimate to of of of share in the our an the of rates range for XXXX, operations. in per share result XXXX year from first estimate to first the prior net earnings Russian per from quarter to in our share is outlook diluted per of higher included quarter 'XX $X.XX of compared as expense are share we per of

customer expected Dispensing of income the in to during impact from repeat. Containers XXXX. a to the of income as of We quarter expected negative quarter and pass-through the in price declines fourth resin in not adjusted of Specialty anticipate XXXX activities year first higher the from Closures prior our is pre-buy as business the of the is be the quarter segment segment result in Adjusted XXXX flat benefit the lag Metal first in

Custom customer are result as hurdles. of income expected Volumes discussed expect also return slightly Containers year. lower the to improve a throughout that not did a the exit the this adjusted previously We meet and business segment segment in volumes in of

further prepared to questions your happy our allows, queue. questions. X we'll questions if we're to limit I'd time ask to and the question take comments call everyone to and concludes question the like from And the follow-up. That open for X --

finally directions turn So I'll give it for to you back the Bill, Q&A. to

Operator

Adam of KeyBanc. take morning [Operator Instructions] question our first Josephson this We'll from

Adam Josephson

fourth your how Adam, expecting in similar ago, can you lines performance closures you rising with quarter? having the lines down about out but expectations said volume pre-buy costs. as Were they both along closures But difficult you compared think the a very year metal last been from that were? comparison the versus 'XX? what as of just and that quarter Can the anything the then your profitability of were know business cans it this impact much to you and you don't I tinplate in me a terms affect called I talk closures in to help about outlook might you your for performance, be period. as volume segment's mentioned

Adam Greenlee

Sure. Okay.

So negative did things. impact a Metal our it just pre-buy like Specialty of and Containers a We have the to our Dispensing couple expect business in Closures. on had

and and As that Silgan business. metal that kind the is that closures legacy of in food closures industry. of included a Combination closures beverage really reminder, our within long-time segment supports plastic business

it tell at the So I'd the Specialty as for What we from that in volume for the you, about Closures accounted is look and XX% sit of a shortfall did segment. perspective quarter we and Adam, Dispensing that. impact here pre-buy anticipate

we many closures many, supply go -- metal it's food So typically it glass beverage, and years. it that on jars that for primarily, just was

again, a So volume good we performance I surprise slightly operating think favorable. as had. shortfalls a quarter. us. Then with We really no overcoming the Resin real quarter, within was for had we were from profit good standpoint, the

expected that. We

really So in expectations DSC my just quarter roughly we the words, say in I'd that for had. Adam with was line

Adam Josephson

you. we're the that Bob, But versus chose to estimate think, months pension when higher year's $X.XX interest obviously, to there, was you come the estimate X ones which intangibles to exclude $X.XX with and I'm than and -- earnings you know the added, trying 'XX, what it. amortization or your guidance when we who ago, of expense not consensus compare for out were we And up And income then earnings. last is to I Got Okay. I expense expecting.

if as or equal, your else etcetera, $X.XX have all been consequence. 'XX So help consensus, should consensus was me expecting, a guess, But drift. guidance my in what I you can you catch you was to think reconcile higher

Robert Lewis

Yes.

have different reasons, offset. it they basically you right. The but for very I X think made we adjustments basically that obviously

what been, you suggesting it's where consensus about line with have would now. we're roughly in if think So

more no there's that than those So to points. really main broader X details

Adam Josephson

just really much vantage it and pretty interest went it's $X.XX So that's up your by that from point?

Robert Lewis

That's right. Yes.

rates later the of the interest affect to year. As part continue

Operator

We'll Ghansham Panjabi Baird. go next now at to

Ghansham Panjabi

so down. I out all guess first I Adam. question, market the way destocking retail all many off, the called on end the way mean, verticals the channel have from destocking

experienced where to terms guess the -- of will. demand have to your you the are sort of best in yourself that market You relative relative extent. some with if of we inventories to end consumer uptake, What's

Adam Greenlee

Yes, there. And go I'll I question. sure. great and you the back some insight maybe It's give QX think to

Europe also in both in was saw part well. essentially North Just sort QX, QX that large customers shut the down of what I'll we of of CPG as saw good What October, markets early our through weeks. American end of and at really was, and the that say, a November we last in just our pretty couple was QX

end bit the little the a well the sort quarter a for as shortfall abrupt year. of of as us So volume but of unexpected for the that bit was

lines I also in to recovery of we year. product destocking that bit signs think seeing good earlier that a the the in the effort markets some due some news little challenged is of the have were been better and

tell And same a note most I'd us those that pretty importantly, of has Ghansham, all started and on for customers. strong you January

on We've in talked almost the I at for of happens about a So recovery sprayers this seen are last, calls. is our full seeing this we typically to America which recovery. Europe precursor point X what or a think, in product call We've lines. trigger many North

really from about And of I January. last we're better to we than signs certainly the And then we feeling so having our more the call. destocking positive seen we've customers. start were, far recovery good as a entered we're the So in year think, here the

Ghansham Panjabi

are in terms inflation you're then point very transportation, dynamics the to? you've what Okay, assumptions that for real That's with then the -- out been big are for helpful. us just variable etcetera, you exposed this that terrific. on experiencing, in cost maybe also side And time? of seeing substrates what embedded the And lay your at

Adam Greenlee

Sure.

So start with a I couple our that guess steel of affects first we'll segments.

through pass onto in our So that as retail the It remarks, look, able approximately we successfully does increase market. XX% were we mentioned tinplate through prepared -- that customers passed their have and at Bob customers. the appear to to

of As we turn the right page to 'XX, we do see stability now. in tinplate the prices

So we probably not lot change as 'XX. a whole sit here in of

we're need like I capacity think are for that supply got the and the get partnerships challenges and our we which we the in base the feel tinplate there's the I'll largest relationships buyer remind in you, with some tinplate. need we've supply to world it. good of that going availability we in geographies side tinplate

our QX Moving built into as over benefit small a there's guidance. go resin to in forward, resin very we

here. Ghansham, But what the we that take are changes QX now typically and got you, it the of price couple tell been the has there's we last looks year. the over volatile We'll forward. we in right the course stability as that resin do, going of the as for the For that most we've basically for would of balance years, known rate forecast part, as like see hold I happens

where So think I conservative outlook. with there been that we've are times

based forecast like be Then about upon the categories some of other question I the is think other your this right. of to year moving seems to kind it freight.

costs. rate increased some again, seeing, are We

of have in the don't I of that's that valve pressure down, relief last I years. that availability think the know rates kind been fuel some that categories. certainly have been seem challenging, we've of with other freight seen couple and the surcharges of

course allow experience think onto of market. that to contractual XX degree, as that inflation you know I the the we'll the understand, again, still and of our think pass-through we to extent the I inflation most had some not nearly last the months. really, agreements over, And for all of

lot I all answered that your a there, Ghansham. questions. So hope

Ghansham Panjabi

Yes, it does.

Operator

next at Bank now to of We go America. George Staphos

George Staphos

guidance about there? DSC And your X mean my that relative your onboarding that for the the comes things you business what questions And Containers Custom and is for tell and or on, for to overall for the be of quarter on us to about what year? Containers. business can fourth are are for the we new that be I -- the us need need that as to the X guidance key talk importance you size to so Can risk will size expected and not? us factors how earnings important relatedly, you're wanted to factors the the that you'll come on will and evaluating Custom --

and of very, year you're checking that Good done risks recognizing view we're with with growth for Same are key quarter. with DSC? mindful looking volume, incremental this the this that year thing luck should as very of expect your up on DSC earnings in destocking. that a What with you for showing terms that strong margin we be outlook you in back in the that

Adam Greenlee

Okay, George.

we'll start 'XX volume Custom the kicks small maybe for [indiscernible]. and in Obviously, a business Really, profit is So and impact with wins. Containers the it call new we'll relatively from standpoint. the

we're QX. forward those news in getting and the products, spend with capital commercialize is we'll So QX, late place in moving call work good it, to early

business more and we is new with wins. the XXXX about XXXX then it as run enter rate exit So those

we'll to update on the go stand I we through those as commercialization. the just an talking earnings be regarding where we year So them give on think about call,

things. Closures, Specialty in really, our any segment. I then to we Dispensing there's Custom closures way a think that's right the metal about And activity have of and don't couple think One, on So pre-buy Containers.

business. portion that year So we'll have normal a our of in

think talked season beauty reality I launch the product X call, visibility. -- really new here customers talked fragrance XXXX. We The last good launch our holiday had a or our begin and strength and about calls good is for therefore, here continued as the earnings order product we season in see our X in really about we book, a had we and

book So into on our last clarity into call. had gone has the we that XXXX than further order

strong engaged thinking incremental XXXX beauty. as customers for our is talking the about with point. really capacity this adds and a fragrance do we're We're typically at we So again year

deliver and can beauty bullish on through course what it So of and fragrance we're really XXXX. the

I going lawn to recovery expecting Custom Dispensing risk, or either that's impact not Specialty in and general a we're garden Closures. massive think and Closures

think risk So as I into budget that don't think the year. is we built our about

I to think well continue just see really portfolio broadly, of the impacts economic the conditions circumstances. that are regardless economic say out of how tends that we'll the to power of I consumers. do there, Silgan products

So what poor economy do different continue seems a economy. booming line in bottom better of still that perform is a maybe versus be. to to regardless circumstance products we But

Operator

We Wells go Hajde at Fargo. next to now Gabe

Gabe Hajde

mean, dig bit I the the dispensing wanted little low the fragrance voice you specifically think, and to talked or inflected, potential specifically a DSC into in dispensers double digits. about out, I Adam, calling -- when XXXX, your I being up

guess asked free. and and So consumer travel of more get I risks. any from something there about George might China to And thought, as I specifically there about it is doing that you customers China relates you're so reopening you've seen success with question, that duty that mean, with? your piggybacking potential Is George's upside mobility off maybe then

be there helpful. thoughts any would Just

Adam Greenlee

Sure.

it's a -- Specialty from on market, the the I again, and won't what we're areas allowing maybe connection products, the we're customers focused of Gabe, take for specifically, doing apologize those grow I market, innovations got and in of and right. But really there. our business to Dispensing I we've that to growth to so myself bad team products strong the said, Closures, new risk new are them market delivering take of that So on then that, repeating their on focused beneficiaries what and

and long product luxury beauty our fragrance and as premium lines. So

Dispensing that customers As And long allow we from that years and to we've several now seen in our for those marketplace, the providing Specialty new Closure them that. win in as we products segment. keep benefit to

feel good really it. about we So

I those think growth to we broke if tell to add in I Gabe, conversations our customers support in up, markets. you, their capacity I are with

element fragrance specific Silgan, based to future there's I'll be probably continue then very But downside with a And China, and about feel the customers upon our world, some we as for those think here has XXXX an mobile the China, of to be sit we conversations and fragrance more again, is And will consumer fragrance to as prospects to extent. there a our and volume beauty, beauty. in and for think with, parts growth. things. been beauty And the duty-free people a the about really that will more One, of product for we looks better the is say, talking broadly for goes that be about around, moving through we're are about. and airport our year couple frankly lines Asia good kind good limited small that international and of locations of relatively always risk

will it won't get an Silgan think I you the benefit get So outsized from to outsized broader related an reopening. Chinese Likely -- good. you'll be

we it will but impactful a for see impact So the business. itself, for don't our for market bit big a travelers be

Gabe Hajde

Okay.

bit optimism remarks. comment on sounded the good. yes, a was business Now actually and like more little it you -- conviction all inflection your increased opening the -- in

one... The second

Adam Greenlee

Got it. Yes.

Gabe Hajde

talk maybe sort about obviously Bob, landscape. for just across a That's seeing DNA Yes. the No. what been long time. of M&A or you're Silgan's Adam, in

the assets how for to with that coming rates or of and market terms in rising etcetera, expectations sellers, evolving? interest Just is

Robert Lewis

there's the to from think mean that would being year-end point, of through kind right? standpoint. a lot I we a right where be coming expected I leverage we're we Look, Yes.

with delivered a flow probably in mark to That's of year into under next free a to -- up the leverage Xx XXXX. above we going deleveraging. level the half another around right improving of kind be we'll So turn just cash what

kind back us put to of will our that the So of lower range. end

to last but still continuing evolve, than decade to we've seen or higher continue markets evolve. over capital the the think rates I so maybe

as of as were sort the think to a year-end the call, I where see bit coming and through just about they a was last market in M&A of on to pause heading. there wanted talked opportunities get we markets

in I that's to to few the encouraging part certainly generate We'll because ultimately come how are market. plays to that a we we're in. year activity that of there's think seeing a would the that that businesses see there early but wanting lot what of interest have out started

I on advantage that think we're could assets of One, position some positioned in against to leverage that not is bit quickly buyers in capacity other us a of spot well the X but fair we got competitive of our available fronts. we've take right only and surety. that good revolver pretty puts on a with potential move our

favorable that's obviously well. So as

that see goes. where fact able bandwidth integrated, new we businesses across we'll our we've most management we like that got So recent round if be But it. acquisitions fully the to got to all of integrate we've something feel the when and find

returns we continue think the will good shareholders. generate one where really. and core and and been playbook good have it's we a So competency to It's for value same

we get opportunities some hopefully, So the year. here during

Gabe Hajde

Good luck.

Operator

to next Pettinari to go We at Anthony Citi. now

Bryan Burgmeier

This for is sitting in Anthony. Bryan actually Burgmeier

forecasting question inflation. of your XXXX? when pass-throughs cost Metal reset? you or Do expect exceed on pass-throughs you up following for us remind inflation can will Containers the Just level Ghansham's in And meet on PPI typically those you're

Adam Greenlee

that is in inflation less inflation have It what will to of be be experience going in experienced level all, Sure. of that XXXX. no XXXX. to continuing probably are do Bryan, we surprise that we we first than the so

year's of nature experienced our pass-through a mechanism, portion you'll the of XXXX. against through lower lag this that year inflation in be inflation given So last passing

are the They the when by hit. contract be a slight pass-throughs So XX for than year the for of think from date. details get of months course don't that benefit I implementation should vary specific us. they those and run into the we they throughout

Robert Lewis

lesser metric. that, across speak not would But the to Yes. do we've metrics a as Adam's is inflation year. vary one pass-through we year-over-year the be to add but particular a that got I that should the contracts, it I fact mean on it's contract. it one to contract benefit for point benefit right to that PPI-like is the basis the or relatively the is given year some some the

Bryan Burgmeier

CapEx projects? projects Got it. a Do away expected. highlight? than looks And to are there XXXX walk And any that growth of decide or just like one in you came you'd any then push It like out productivity-related one. XXXX bit CapEx, from last to lighter

Robert Lewis

Yes.

in a actual with little to came projects. CapEx bit than really to lighter, timing vendors more do the payments of the So

So we feel we're time. the adequately in at the like investing opportunities right right

So I the more as total about in that you in but noise from some CapEx expense we had less flow you number think because there's interest think year. overall that the up were the and through cash free carrying

across So Custom overall, business Dispensing but we some well it's And which Specialty generation. in talked cash CapEx year, then the and primarily just flow really Containers as forward in bit, look free good opportunities about the a to business. business really next largely up opportunities some good the a we in as Closures because of as the of new these

the investing for with like -- the feel with adequately we right So we're customers. opportunities right

Operator

We White to Kyle Bank. at go next Deutsche now

Kyle White

in markets and back go prestige or and for called terms out? you growth beauty beauty call prestige the in are the you mass away to trade or between in Are consumers fragrance that out. terms XXXX? of rates would the seeing from seeing rate dispensing want differences growth downs you from that anything of Or markets I mass you to to going any any

Adam Greenlee

good we're luxury product opportunities. seeing are we're market relatively continued see seeing I we again, in now really product much area great in that. market. mass prestige just relationships without well we seen down is received demand again, with new in additional are of lot getting season. launches our the whole growth and we and prestige customers, very really, holiday the through about the market. So mean the of more they the very high go hitting business our where for forward pandemic, no, What segment been and of that into can to is intimate trade volume that tell as think we're our were presence relationship. a I limited and the And you, the And the the just that and they've the now point clearly I feeling, Kyle, launches haven't new

Kyle White

Got how you product chain pet it. of out And then mostly issues on impacting Metal at supply within, new resolved that the commercialization food guys called Containers, believe, some customer level. I Is have we you can Any are in go into what relatedly, food for within optimization? footprint have? are you metal your the about XXXX? content room thinking as Or And with then U.S.? you

Adam Greenlee

thinking first. that say always And the our time. Sure. we have typically every that of second And we're Containers I'll X is take footprint. through business, closed we've what about in we course part one the Metal plants for

focus our So that to and that on business critical relentless of that's our DNA. just is success part out of driving cost

And looking we're growth point. were much very that anything that. time. always a then supply XXXX, are each about able talk challenges of and to commercialize do we this on to it's the on is at We don't focus this call chain to customers support investments every our their again, made, day. that have we So at experienced But in what we something

there problems year, were the in customers. our Early for ingredient

filling as couple the getting resolved. been labor we're it have for there QX customers. now wanted was still of set lot the in market. for we progress you, what the the broad went well minor were additional or year that the towards category into gets pet rest of products And and the we And the into of as of the year. most part, to of part out have I resolved early we investment roughly is There's assumption additional tell a the of part, instances those of to part in availability Really our food start there's here products packaging and that There other XXXX year half We those see a products. available the are challenges. that for to at seeing of ship most got protein our All growth here, customers. the the that figured latter available, across

Operator

Markets. next now Capital Viswanathan RBC to go We'll at Arun

Arun Viswanathan

your certain from lot Is returns, pass and thrust on? contracts. just that? guess can of Or to time being detail not you what's dealing wanted not customers Does that maybe I with with also made that on Or return provide happen more able little time? maybe meeting your just I of of maybe that. a from a to inflation comments threshold the some you of it bit start about the some to

Robert Lewis

assets from happen available in versus particularly competitive as customer does it volume marketplace that Arun, may what contracts have new time place. assets relative bit. out to The something changes trajectory landscape do with a time, a wants to be in has and put age that to the to maybe

a reasons there's that of So different why happens. for lot

in just I overall particularly, business, sort you're We're profile that point of maintaining, get a way the that. we make where to that sure that seeing right, to making in recover think to went what is long a we're that here say, need and money. Silgan we're that business the of cognizant back business discipline we return look, can

set. what anticipated or We've actually we better than we goal done what

that with doing we're course the and returns. staying anything overall just long-term the of that is to not and detrimental this making sure So profitability business that's the that

Arun Viswanathan

activity it similar to say that challenges, volumes? to much there but potentially some macro potential sounded some something activity that you some your a move promotions. extra has your better, promotional destocking forward see moderated Is has these picked customer still volume some And we I'm could customers affect a to? of just migrated like does up, more run And on how now through kind come little pretty maybe Would decision we that little on then promotional And inflation was and can just now if that's a if kind look risk. feeling of a still has that given maybe touch that some course the making bit bit projects. of its are note, Okay. volume curious activity

Adam Greenlee

should answer that think Well, because we about by maybe business I I think will vary segment segment. by talk the just

markets. products certainly Containers more for promotion working that's foods, So those I promotion. will greater particular in different going and And of and business those promotion Closures, seen formats. see promotion pet and And luxury over Metal in and in greater would to worth. you're the believe variety we promotion I jump more prestige say, for pet a in beauty part we are understand it's Dispensing seeing to think and is fragrance Specialty the have We of we in whatever food and continue maybe soup answer

think more and I is think growth yes, volume where well. as there's starts, I So It's in fits activity. promotional coming from

trying set business. greater leverage that an to the They're volume volume growth turn even and for it of into

sit speaking, consumers marketplace in to think our XXXX. products turn about I as we we customers where better page the where our So the for collectively broadly are, feeling are

Arun Viswanathan

any any, I then Russia maybe And discuss how here going you just M&A have area? to the priorities, potentially exit Or we think just you you front, provide if into could, can does with if your on do that about just of extra should capital forward? deploy maybe some M&A lastly, maybe the

Robert Lewis

think from. core of Yes. period as our a strategy. over longer part where I time Look, It's M&A I growth mentioned a of lot is comes the a before, of

if is active. Specialty we'll of where I our for other to opportunities parts But So of would playbook, rest side continue the we look business strengthen But spear to Dispensing don't to business to the from any the that allocate remain of continue be could tip of part to side. the we're ability think business. would draw core of we as the the to the think desire it the withdraw afraid secret any across and well. kind doesn't also towards of not of like invest. Closure it's competency. or remains our really capital dispensing I our oriented on The have It Russia bearing off

circumstance broader of get we'll part just it the running the that victim -- business with we'll a business. of a and deal just and that's on is So with

Operator

Jefferies. to go We'll now Rizzo next Daniel at

Daniel Rizzo

different for time, us but what Or I and Were show thing? of know purposes, you're kind a you different just now XXXX largely historical volumes it was a you can just company the during different unaffected? XXXX recession. with happened

Robert Lewis

Yes.

down main can both was food example, the most talked you of to an sort vegetable, and on I pet time, I wet about during the Likewise, the at fruit more and a it dry. right? least you in saw steady as what converted that point saw, population, broadly pet that different so the expect, very downturn was really might will, sort pets different across think the reasons, more if the pretty ate downturn, essentially, frame. particular which larger hold volumes and in away as was improved X and And in often. that you for recovery of pet at you And -- that at as hunker impact, food from home the the volumes people in food market, time that

as the then And recovery a was happened, there reversion.

changed, were pretty both mix will. volumes The periods, if steady. So through you

change wet there people I and different is population go the from pet are a market is that and pet eating pets it been likely dependent and ownership this think far the what's to has that away less pet. see fact change the around pet food on more are what in treating meaningful such a the how

So the can will business expect well. do that I food would continue to

Daniel Rizzo

of now? people dumb question it Is dogs we're mean that the for does saying? have but smaller what sorry kind I'm

Robert Lewis

More of them as well.

as house. have pets smaller them and more smaller size the of a manageable yes, the there's in being So of more consequence the households trended pets the to in

Adam Greenlee

cats. Dan, and recent the pet to dogs is cat as continued years has And food over grow And both small the wet well. population category,

Daniel Rizzo

then metal much pass ever resin miss you said through? how something? I of what it Have or think, for you And pass-through mentioned, I XX% Okay. containers. or metal Did costs is resin --

Robert Lewis

resin through on basis. pass lagged we a Generally,

by in varies shorter probably and pass-through days But in business. it and its longest, resin type that. than lag XX at terms So much it's of cases, by many the

Adam Greenlee

think to do be a and pass large Specialty Dispensing segment, And cost was Closures the through resin well. market to I back if the we our of But as changes clear, it to memory you and of basically we XXXX, forward XXXX roughly and negative move me the stable correct XXXX. now resin we're through into negative prices if relatively that for anticipating serves course recovered we in as go

Operator

go at next to JPMorgan. we'll now Zekauskas Jeff And

Jeff Zekauskas

affect people are the both number is Different that pets and that the stress that pet end food food on may on of not these you the worried you're in see do really sheltered see you demand their owners their -- more or trends? And pet too talking trends? that it's are Is has pet strain some now, in you risen these pets the Or pet That higher how do from is can about putting of market is, associations so don't? cat owner United income. and shelters can't a States much X/X of of Europe. the pet afford

Adam Greenlee

So Jeff. a there, couple things of

and and see model our don't see customer you small Bob markets I wet that serve. business of serve expensive. call trade kind again, the that really pets had, are that the of good you're think a the spend it, think, that talk same customer don't collectively in down. population, all, describing mix And markets manufacture we that lot have and having very the feeling do a first dialogue. stress see about And through a we I of dog a that back or think look I of we in of talking 'XX, we intimacy, about highlighted we specifics markets not 'XX our that about large where Silgan point we by and customers you're greater. we that talking dry. stress that is to dealing that XX-pound the with the the to see just a, you When say with size much the level about, products I'll pressure think dried time And a service that sheer the also bag of food I don't pet customers serve. our again, consumption quite the we we pressure do of cat that of and we down the trade of of at a product nature is food We the lot pet

Robert Lewis

that remind you customers. and the would I not investments speculating doing we take step from further just our we're customers are where commitments investments making Jeff, that making Yes, We're those and are with on that a right? market,

So we feel pretty we're their and like aligned are happening what their markets in well is where going. with markets

Jeff Zekauskas

volume your function growth of really to material change? to EBIT the really a growth difference spread be follow-up, so XXXX Okay. price fair the is and won't say that And of that then for your a in make my much raw it to EBIT

Adam Greenlee

I issues. think timing acquisition no There that's are right.

stood think segments we the seeing I then right? rolls and forward we've talked of of delivered segments about, and growth what 'XX, in is, our and in I about been of right dynamics our each So each you're XXXX 'XX. it lot really talking of what it we profiles mean a the to delivered

of own of of the kind So and in for segments you're power way their each operating growth XXXX. the portfolio individual delivering seeing our

I think you've got it right, Jeff.

Operator

a of Bank America. we'll question Staphos of And take follow-up from George now

George Staphos

the here. a answer but it's exercise will be change no, guessing box-checking no I'm there's

container basis changes change in XXXX of? be the might that mindful metal the big sort competitive of players end of big American us 'XX. in metal we not that you size any for this that should And win a things there's are was the done that container renewals several how that, the things. other activity, yet, been landscape next phase, you in for it with in of your or contract in you we next as the an of it's years. mean then now what seeing annualized One, sector, given are going to can the for knowing year you're couple North at of get in So terms of level on bids, like And that

Adam Greenlee

you, and Bob question. activity, and George. But maybe, for I eggs good will for through a competitive that ham So

right to. I think with answer the you're

really change. no So

understand have off competitive think then we as we that our the you for a there. As they of bidding Metal as their Container business win we're as as my we're customers the significant. not those in so every and with in we contractual model new capacity in our and maintain business, our about that we is customers the go win couple on always here etcetera. the market that's day. renewals right our of to for can necessarily each much and of that [indiscernible]. again, head opportunities contract market reminder, under they long-term And here that top business new sit we're when and have grow in But a investing in the conversations. -- and I conversations to always well, we markets serve out growth, We that far Nothing in reserve our just XXXX advantage

Robert Lewis

a business percent We've near-term. there's our renewal us we long-term under contracts, a large nor would say, there's that out ordinary just to nothing but XX-plus our piece you a these business George, of block is where form of some impacts I significant for coming have renewed of that's of We conversation meaningful in periods it business. had of Yes. something have always with had that's coming remind the the and it's don't at step that we've price down. any the

George Staphos

And that's we're at. what getting

Robert Lewis

ordinary This is us. in course of more that's front out

George Staphos

And be how Understood. custom, big might that someday?

Adam Greenlee

So there's a business. couple of pieces of large contractual

million opportunities. the each $X revenue should -- of those in kind of kind $XX about million So them of for I think of George, think, to you range of

So opportunities two call be range. that it in that will commercializing

Operator

Gabe We'll now take Fargo. to Adam at We'll next Josephson now at Wells KeyBanc. question go from Hajde follow-up a

Adam Josephson

terms To the I hope your in Bob, to earlier, part you're ownership. Jeff's certainly support doing question pet by national of... way,

Adam Greenlee

we you, promise Adam. I are,

Adam Josephson

source big Fancy you'd it of a how feast. there. expect you improvement capital, Can coming any that to lower Bob, on receivables, Is you're flesh on working out roughly be? cash expecting payables. lower impact from inventories,

Robert Lewis

smaller is really Well, so at a year-over-year a we're on use looking what basis.

it's anticipate use it lesser we So capital. just it's where a we of given a as liquidating is we're working as move bit like inflation got But of year-over-year. not lot a a We go, benefit. and to

of it's bridge if essentially in you a get Commission the CapEx improvement how a you bit the that capital change. of the cash less was from, capital payment free coming made broad to flow elimination of the generation the about little earnings, for basically, offset So higher European is and is working slightly use think working by the where the for

Adam Josephson

Right.

expecting an major modest there basis. sounds So components no to of a use on you're sources uses or just it be that absolute working like, are capital

Robert Lewis

ordinary. the of out nothing Yes,

Adam Josephson

around all Adam, And to Okay. the a you've put comments bow just provided.

but than with tremendous range it's those much than I many that this people economy Because is concerns what for X% wider exist. in global have because range don't usual years, wider given any uncertainty the consistent is you obviously, have guidance ranges seem be entirely range to year, the previous provided which companies some about Your for ask the been in to manifest other normal? seems

just you've you that So previous have assume no could anyway. less years answer hoping in you just do economy. I the outlook is any in had of but address state the than confidence the given the

Adam Greenlee

I'll Maybe start piece. with last Sure. the

that discussion be the was confidence, there's had sit you're heading actually and point. we've less all have our less it So our all business a We we table were that think the we did uncertainty think providing would level right. be we into of the have I risk ultimately, we lot exactly of but facing. heading we be. we more said than And should XXXX of insight range is appropriate to of XXXX we as here The a no, because volatility And XXXX to ultimately, no. into debate leave We And think, and the change with. than that range what that we got agreed with we where of was. what decided that that about of came insight Adam, into the pretty last And there market. should good into it around kind and this team it's and depths answer

Adam Josephson

uncertainty anything? pack. if the any call or of the don't source is uncertainty much is you, of probably pack? really? of Is what it about And it January, that inflation? source the But it. anything demand? would there particular so out Is is appreciate you is particular I there that not Is It's know around No, you there for a

Adam Greenlee

situation affected speak. that any would custom. both as that that, good That's resolving at point, look, that resolve for dispensing be gets of Adam. over and We some I Dispensing reason, Well, a reason right? then risk, bit got the or in Specialty that whatever for one think, really delayed biggest a literally and will If we probably little in the Closures think destocking we've that signals itself Custom Containers and is

can food right. got the think you've I business,

replenished more year the chain 'XX the supply is was that [indiscernible]. pack. think for that got about I Remember, the

us. little were than was we a we a significantly which we in The pack in normal So but up and for 'XX that QX fine expected what expected which got. ended earlier was pack

this the that a numbers always just So year pack into like end at year. dependent volume have the normal good does anticipating not the there's we are It's pack one pack some upon the volumes. of absolute risk but the play the the it's around And pack. item is

Adam Josephson

Best of luck.

Operator

no you. Thank And today. closing since any questions you back for we to Greenlee, have hand comments. Mr. further things I'll

Adam Greenlee

appreciate I quarter look and discussing we results Bill the interest you, everyone's Thank late first in to Thank so forward good April. and and you. Great.

Operator

us, Again, so wish again you. to joining you quarter thank thank your joining Goodbye. and conference great for all gentlemen, ladies and earnings fourth like call. Holdings' you remainder you Silgan of all a Thank much I'd for day.

Silgan (SLGN) 25 Jan 222022 Q4 Earnings call transcript