Crown (CCK) 25 Jul 232023 Q2 Earnings call transcript

Good morning. And welcome to Crown Holdings Second Quarter 2023 Conference Call.

Your lines will be placed in a listen-only mode until the Q&A session of today’s call and please be advised that this call is being recorded.

I would now like to turn the call over to your host, Mr. Kevin Clothier, Senior Vice President and Chief Financial Officer. begin. may you Sir,

and on everyone. Donahue, today’s Officer. Chief Jackie, -- President me with Executive me call good you, With morning, today and Thank is Tim

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

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

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

compared diluted $X.XX quarter, quarter compared quarter, earnings per share of Second were $X.XX in earnings $X.XX $X.XX business. to included the second net $X.XX a share share, per year in Kiwi the were sale our to the prior from XXXX. per in which Adjusted share

in year, prior businesses lower Beverage approximately million Net U.S. the material lower from were in reflecting from and by raw higher quarter dollar. $XXX the stronger sales of XX% Americas most unit impact other pass-through volumes of in volumes of offset down the the $XX the million unit sales costs,

recovery and Segment the $XXX million volumes. initiatives in year compared by overall income benefit offset in lower to in $XXX the inflationary net prior from and at quarter, in cost year cost reduction million the of contractual increases Beverage prior reflects European Transit Packaging,

our to reduce $XXX the year improvement the levels this the year-end. to in flow million at $XXX was years months in Operating XXXX, for flow million operating $XXX XX cash and highest was inventory compared year. six last the cash the reflects in cash million The efforts the prior of from elevated point flow approximate operating of

expected. the in were The results quarter as second

per We to per expect $X.XX share $X.XX the to of quarter in third share. be range EPS adjusted

full EBITDA grow XX%. between and expect X% We to year

exchange expense EPS difference previous per per being earnings with and $X.XX foreign the year share to the lower in from full share, expect higher to $X.XX adjusted equity transactional We be our range of guidance.

the in and interest XX%. expense XXXX, to shares to of pension million following, and rate guidance. in full $XXX of adjusted be postretirement Our average incremental which include $X.XX million with our common previous costs, a full compared non-cash outstanding line earnings is the in to year and be $XXX approximately XXXX, million between XX% $XXX year Net tax

Depreciation $XXX million of in non-controlling compared approximately non-controlling dividends $XXX approximately and of $XXX interest $XXX to to expense interest million XXXX, million. approximately million, be to

spending $XXX cash projected of Free is flow $XXX million. to with capital million, be

of until our go free X within flow cash debt times targeted We majority X.X ratio to expect levered. reduction of our to times the leverage to we range get

With the call that, I turn to Tim. over will

morning everyone. before will prepared Kevin, questions. open call Trends limited thank to so you, the to and be to were quarter, remarks our first the good similar we

As earnings reflected in was and line Kevin last with in second as performance night’s release, quarter just expectations. summarized,

offsetting the As beverage Europe and well, and lower and in earnings. equity Packaging to foreign below-the-line perform exchange continue Transit losses Americas

results of as of briefly second statement. XXXX raw to on carrying are levels. the inventories flow initial risk experienced which we beverage year-end reduce also half finished Kevin has And from mitigated efforts The evident inventory this our that cash the year. been in and noted important,

activity year. volume in June, and prior and half in third about accelerated optimistic April, volumes very versus unit remain year. America Latin quarter, while strong the are also to-date the Beverage, Americas X.X% the versus promotional in early we still in year, America improved flat In volumes of weak with in and After for and growth in prospects up the the back America July a North X.X% the prior quarter, was North the May

second the given for X% the market commentary, approximately North period. for was Accordingly, market for American to that full to estimate half. X% customer in on both assumption year volume down the the the the we revised and in growth the quarter decline X% six-month we first Based range the

Income April PPI of offsetting insurance XXXX on fully the for to growth $XX almost the with August. performance million levels. startup in Xst in inventory quarter Bowling Nevada facility impact lower late Green the activity and increases quarter with scheduled Mesquite, was completion down volume nearing the bring of the levels second commercial designed and recoveries strong Construction is

weakness Unit volumes offsetting in U.K. the and declined in growth France, Spain, in Greece, European and with in second Italy the Beverage X% quarter, Turkey

this in have plant to August of we in commercial importantly, you half Lines continue U.K. expected and with segment, and nearing second shipments progress performance. in More significant will made The from is investment respectively. October the X, to see X which margins construction Peterborough justifying restoring in completion, the

We the remains Asia. see over Asia-Pacific second slowing first The to half improve against more Southeast across income prior albeit quarter, can performance to volumes consumption in be year did but comps double the Vietnam soft. Similar and declined the effects We easy lower expect are quarter. Cambodia, beverage in recovery of to fourth inflation, do with digits. economies combined weighted contributing towards cumulative

SKUs even in quarter impact had the performance business management the up well the have highest ever, expected product combined XX% of with is over solid Packaging all across industrial With years. with prior as as the to lines future margins lower deliver improving reductions income to positioned overheads more price Transit year, income another activity with and offset to cost more XXXX volumes. than be improves

year-over-year leading income and the quarters. and second in solid first to plan, the in fourth performance quarter a significant on half was in in third expected quarters segment EBITDA summary, In in improvement the with businesses improvement second half most

X again, the of we just with range leverage the of our XXXX midpoint the year, X well is within times. to second the sheet. times, to stated EBITDA expect to Turning in under against improved comps, expected year-over-year balance At times easy leverage close half, X.X

limit will an as opportunity. you we that yourselves before just to questions many you we as And that ask two have possible call, so open of the

Jackie, questions that, ready to take are we with now please. And

Thank Instructions] from America. George Staphos you. Bank Our of question [Operator first is of

Your is line open.

had in Kash morning. in conflicting Yeah. This We morning. George. sitting for actually this Hi. is calls Good

guess, why do ultimately telling longer an is customers and I right or trend volume your recover worries guess, them term And here, there to you are anything that what firstly, you outlook the underlying relatedly, you volumes now? expect here? So, from about or I

I you then about are are I and region asking mean, North you the just talking America. guess the about Well, -- will are you what I question. answer question

helpful. North be Yeah. I Yeah. guess America would

Yeah. to Well, are going when volume is I recover. mean, you saying

the exceptionally weak. us single were was in We market for in high The think, I down April. June. high was digits were X.X%. we and up I think, were digits May up down. We Listen, April single

We digits are in July. already high up single

have trend here, three a solid months the So in row. I think we

we to going think year. see I to high continue single are the of for digits balance the

to new we previously The they well. going for they should we have them. seems the control price -- their over constituents right value a manage but model how have described to is doing as working them their all market model be they it are We volume with really customers the think I now. business, to quite their drive manage how for are don’t and tell business, nor

year. continue down we I even And am normal a can’t the business. are I be is listen, not up sure to being up X% X% to going -- the the it’s in and in am we not are of more back we to complain, sure the new half

up. will -- you and be the of I as going that market see said, year, overall to I think the I flatter in think are a second half

is Got for you Europe to get profit the there for end just it. XXXX? Thank for XXXX. this view your And and levels year by of secondly, just, back XXXX guys Are on you target could that. you to still Europe, what in track

Yeah.

XXXX said the So we this be said we as as we last year, we few back ago, calls way year. a of mean, would XX% I thought to

the last would I think we XX% way the be is, of year. said what back we this call on

where June a close through it’s I years probably were months think to-date you XXXX of if such months than weaker at currency to we look to in XXXX, with here couple very even levels a six were ago. six

we are back our well levels to on this year. So way XXXX

really is of performance half we I in think second feel the about the trend year. So the good the and to-date

of not We coming that estimate. off are

to our really, sit going we next at back, are confident pretty this getting least year. we XX% way today, more if back well are as and year, way in early, the but We all be pretty on here even not it’s

Great. Thanks.

you. Thank

Thank you.

Our next Mizuho. question of is from Christopher Parkinson

line Your is open.

outlook terms growth changes the half the volume dissect ready-to-drink ramps. you in energy of no well about are Just North pretty your momentum, benefiting in outlook in just as thinking are well as U.S. we which lucrative some activity believe Can with well? America, in you I promotional from promotional the CSD, as as how the specifically CSD, second drink platform, what as on activity

would just helpful? how any target should the market so on be growth So color very, your thinking very Thank much. be you about

Yeah.

So are little the I we a was think expected. first lighter we than quarter --

have mentioned. really -- July XX I June I July a May quite it, only And didn’t into as said, days we the as also strong and in big quarter. Although disappointment first to-date. but April big numbers we and was have strong, are

very of looking you the which back at strong. last the coming was of capacity of back the roughly than new also of are back with half year XX% last if the especially not up We higher half back half half year, year, the year, recall,

we mentioned easy here reason. against have so that one and again, So be times few will a comps

are think rapidly, don’t the want teas, specifically growing other, waters, around on them more I the positioned much promotional drinks, but obviously, business carbonated to we and starting call soft base. well think some the a activity, But nutraceuticals I enhanced smaller energy of drinks, see but I to

soft in water. a States because volume not and numbers in then we to drinks, are for us, alcohol through you sparkling get is way only big The carbonated alcohol lesser the extent these United

at see perhaps, like see, limited we to are they this than we more those starting So to promotions a would are but making bit point. promotions,

Got the it just and it. Brazilian but market, still at I which some on little And the comps, your other for mentioned question, challenging to market seems like second the presumably, you customer just about a down more shifting same Could you dynamics, going easier be you hemispheres. second bit recycling there’s see time, the forth. mean, talk dynamics, the how you. XXXX thought last your head and importantly, just so that us it more and on view market, on onwards? trends, probably so in you long-term the of to of kind half, it intermediate call, we updated the Thank as give and evolving process into Can in glass my

have Brazilian welcome. think, market we before, very are others long-term. I over and we a favorably and said Listen, medium- view You the

in period. get three-month one-month, any excited going in market six-month to We are not or overly a volume about performance

time of I three and whether five-year of periods periods three-year time want think if going lop that any compare, of five describe you start you to to growth in are see looking period, off at to years to market. and you you those significant years,

past. much than is was market it larger the Obviously, in today the

growth when how the context have perhaps many a need growth as large large, it growth takes remain So beverage percentages takes. capacity X equipment business. is and billion lines can and In to larger of still billion the not are volume but how as significant or units the to deliver for market, or to much X it of you the

half do think easier I year think, the last we the of are But to don’t compared as back back at seeing. this again, we there’s are half Brazil a look anything I in year, So the year. comps little of

in the was strong the fairly again second quarter up the Brazil here in are but X.XXXX% first a We up bit second first as was little we bit up into XXXX expecting in think weak, performance the about and tremendously of they quarter, carnival up tremendously very a season. think in I go a I although quarter. first in quarter their QX little quarter, the were

situation we cans, of the think of in bankruptcy pulling share the described time the customer work near-term. is they -- -- So fairly for market QX, cans are better customer in a process, workout they for now, process. They a I relatively one are are I in think term, don’t the the have short are the delivering ceded any they and strong volumes period in paying their cans, right those their

now. So right we are Brazil very positive on

you. Thank color. Helpful

you. Thank

Thank is question Mike you. with [Operator Barclays. Our from Leithead Instructions] next

Your line is open.

Great. Good guys. morning, Thanks.

cost. best this since assume business of I earnings and First Packaging, one the mostly great, think, I quarter isn’t question that so demand acquired assume have on Transit the you it’s I is

or think can kind sort thoughts So economic us business’ of you volume now you just some improvement? should it have or this earnings of what much give potential a operating is how leverage to just around

if think, XX%. down I XX% a or order look question. second -- the I That’s the probably, good we quarter, at listen, of volume in on

business the understand you to got Now is diverse. very that

commodity be So XX%. down might lines some of the

tooling tooling But in and/or quarter, pro. the as the Tooling said in commodity us a was -- flattish first not of we walking you quarter lines. the in customers decline more money being make you than volume and in third think which and about are SKUs, make I -- very away from that

away In impact no from fact, we had the profitability. business walked on

and around So cost we other business unprofitable things by lines. the walking some done simplified have structure away the from

and of And rightly growth cost around cost, paper. year-to-date, year, steel we expected as also largely management as point the are and on out, recovering around profit how the but you the balance quarter in good and hot-rolled also for indexed price

doing team good the a job. So very

and I business I the cost managing going us business here of and that that gives leverage -- leverage. Now way the the do the the structure the a team with is of prediction, think am as returns, respect industrial not to the activity far sit we is have we management make to but confidence new business greater do what future, the

am I look -- huge lever as appropriate just but But activity don’t there doesn’t all a that’s volume you -- And the number you, to is X% agree I growth I with no with that industrial to the be believe to prepared in point, that a or if out we reason returning, give fall will think we to right bottomline, were you this step business that, there’s about and XX% forward. but at not think now.

to year you next you just then us you where flow where bit maybe return and a next Fair this in you enough. just about think some using your on into down shareholders. talked ends year second, thoughts And release, Tim, to increased of still leverage get more the just cash year? give Could pay to want debt to and updated

we range. So well I we think will will the be I -- said, within as

If you euro because have debt where times, end a I’d on about want little bit. debt X.X that are year, the the the we we this depending a X.XX say, -- will do year much euro about finishes Think closer times. and number, we translates

pretty as that’s we I safe -- that pretty here think sit feel saying we today. in

have We our times. range to always X of X.X times described

that markets shareholders end from more before calls, we probably some who and larger just lower think shareholders. at to couple excess return also would we given the I even have -- range said heard of we have cash it if the where to the last feel financing more of we were or we cost in below comfortable the our range and debt, of the our lower of begin end feel of comfortable are cash slightly would

down the be having X shareholders even are to slightly excess far X is be and returning point. Now those. expenditures that, that below we no next be free flow said doubt they contemplating and should or and leverage at should the That year, so will bringing of cash than to this achieve lower times able both capital year to higher times

as the But debt several accretion where in last call, back and far over stock it just been on given between the borrowing paying differential today, is I down last value the narrower rates to years. has than today shareholders said are buying

you. Thank Tim. Thanks,

us Operator, a for questions? moment, Operator if you. more can do Thank see find the we we Jackie, will Give lost the We Tom. any have we you.

Hello.

Hello.

is Michael Truist from next from Our question Securities. Roxland

line is open. Your

recovery the XQ Tom, I my well. there? persistent call, type in see guess XQ questions. weakness and what’s Vietnam said been expected you you, some for Thank driving Tim, Kevin, Last in you to taking of as

slowed I think has tremendously there. economy the

stretched GD for this last a GDP estimated rest me the Vietnam X% probably GDP XX% and or X% now way, GDP was been -- the very or are or years it over let had X% of this say it I think to several running if in between has they and X% they closer estimating and consumer. year

in strict just to of customers think how It I some marketplace. will to laws The they that our some deal going changing introduction are very trying understand dynamics come drunk of with they the they so New and Chinese inventory are back. driving excess and working It’s they have got fully from time excess absorbed didn’t inventory it. get frame that -- carried over that the February, through in are some that field March Year

think big or a make a six-month we have market that it’s It’s any disruptions in investments market. in get about don’t period. future three-month has again, But are excited tend as great market, volume growing about talk I and when we potential we a when there Brazil, said, we to overly

capital mentioned think, customers purchase last to some then Got to cans the also you U.K. to trying are costs. I to call of their that, manage any it. better I any been in and And own that is on Has summer was there quickly, closer improvement improvement seeing or been Has referencing, you interest their defer and working to just obviously, try that? in minimize the think, there

and I the think, Europe, are U.K., So improvement in have we was margins Europe in the focused say I exceptionally U.K. little and at chasing or should in that there but I right. the of what that. volume are it on general, it and that, lower region specifically, probably we reference been specifically you think leave not that’s how bit say at margins would I A is improving

it. Got much. very Thanks

Thank you.

Thank you.

from Our Panjabi next Ghansham of Baird. question is

Your line open. is

you, Thank everyone. morning, Good Operator.

Ghansham. Hi,

North last for Could are of morning, sort given cetera, level just versus typical, the relative months, would to us way what’s going frame you you as the to expectation higher, activity the to to sense year maybe how year the just what’s best and perhaps the the be promotional back et the trying Good history. to for America, that? activity be I am back warmer think earnings question a sensitive about in outlook of Tim. promotional would that of now just seeing half get the to your

question. good a That’s

I Let dangerous. will always talking, last going is to part try answer to which while think question of last the that am me -- I am I because

you very before, As time. a have you this described long well, have we know industry and Ghansham, for the covered very

promote Promotional discounting carbonated call XX the XX specifically offered in soft drinks four to timeframe years on the -- September March the, packs being for and activity at from let’s centered in ranging last were year, August, it, to last no quarter for they at $XX didn’t whatsoever. and and $X or five almost almost and they third XX-pack for last fourth quarter all $XX for year, promotions a charging

This year, the get one one the brands. are buy we sparkling water promotions some are seeing on of

So think getting like offered $X a about two a for water you being XX-pack, not sparkling awful. at is $X, XX-pack, that’s $X which so are

On still they the drinks $X.XX now where carbonated depending free. there’s is about offering pricing are running are two soft you a non-discounted on one $X.XX still and XX-pack -- to get buy

XX-pack. that that’s to So a what out comes $X

what than higher we certainly historically. seen have So

How volume to their these they and more within as opposed the have with much the drive that? get consumer been and well new to volume so be as will in higher a costs price our are their to to that. this be elevated model. new is deal don’t lower at that they going to $X.XX not volume prepared their be paying $X XX-pack set past, we will they and that for then is XX-pack that to and get the but consumer They Their and with as to ultimately, product return with points used and used probably that discount, to will have have they that model going sell value input at may hope drive are might if prepared

as cans April activity July, as we the But, are some was was weak, I high consumer June digits, can cans. mid-single said, so was customers and customers the last are seen of think over pull that taking. I and to-date our that we months single really said, have activity, lot May high we single and so that seeing digits, digits seeing more amount I are several we see from and a

on materialize, To the is, if put the range I the X% half had Well, earnings Kevin to point XX%. if how you year of it. back volume EBITDA, in gave sensitive for doesn’t the our to band a of

think that in I forecast. are our comfortably right we range with now

materialize, say too but I end lower come probably of big if range. would maybe pretty the at to the a the down, way we that that and be a volume not within to think that’s still range, that’s easiest number big it’s did the of number,

that and Okay. to Perfect. to sequentially has like in out And is how summer, the switch of if dynamic as a helpful. terms your the spending half adjustments assume backdrop year I of What’s tourism in That’s are -- what to I mean, Europe, that there’s but back there in is European on and weak? customers then are it making indications responding Europe we this very, the consumer so of particular. ton look consumer they the year? very any looks core they positive this weakened

Yeah.

I think there’s no recession. in is doubt a Europe

to You of indexes and XX are XX in various for the the exceptionally They manager there. which well the these look below some and the XX. at range, they countries are of economies bigger low some are are purchasing

point food stretched as supplies don’t they you I core it’s ends the but want energy. make And U.K., out, to them exceptionally meet basic just consumer, weak, poor, call France, are whether to the rightly

X% can other the -- down I and or to deliver business the beverages we well. our in the much market still is Now as any is am as the quarter, is to -- that, are. to economical we assume having going going said or are am a I not holding way down that up relatively product the food assume

middle, the we periphery on described big through is Europe of in you not we now. Italy, said but Greece, the and chasing operate to and U.K., better did, than I right earlier, I would so do of Scandinavian before, plants are as up that a the Spain, we Turkey, middle we the couple countries. are We that imagine will volume Germany the market in not

margins. improving really are focused We on

are weaker again, might while with consumer our patterns think you don’t as their market the weak on So deal we are be as is I for little to just think customers think others adjusting consumer. a different is and our than cans. a might is now margins. beverage right it improving and focused the I weak, buying strategy

you. Thank Yeah.

Thank you.

you. Thank

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

Your line is open.

Great. for questions. my Thanks taking

question, America. So guess, North in volume I guess just I back to the

heard if you on you think, this correctly, up side you quarter by the mainly an and I down in and and alcohol CSD water weakness market seeing you to said, maybe I So X% are maybe are still year some the X% overall the driven side. some improvements on

look companies to So a you back that characterize really year, maybe the growth? would next back get X% to the we how to market -- I growth that to get you to level so of tell but kind do as you into beverage this do, poised can’t what of rate. X% know

So really a the question. I again good -- think

we I year, had of year. year quarter the fourth last than we half an a think comp this back easier probably -- in the this have especially

we have think these data and six were I down remember, estimates. months to quarter estimated So don’t in if X%. when my I published We down, are X% the

customers at I said publicly. what really looking am have our

feel that’s and I there, only far of am X.X% do kind I they decline. going comments of were one out confident to range decline I or in that’s the so that information think from there’s CSD larger company but other anecdotal X% in just and range reported

were to of year year QX future. Arun, last X% perhaps flat because X% down we slightly in the the think very -- just numbers half guide to probably we think to If were or and the I decline you will not in be back tried X% we I quarter, range last from X% up to the see that even of good. narrowed

listen, company the for larger be can successful, especially be as doesn’t it managing than doesn’t be that X%, with we growth, have the have had be industry to beverage business base in can have much today we successful X% we X%, And an to it of to past. -- have a exceptionally our

and share to of then how that at substrate come of is And you the we about think you stomach when a always got to other from stomach, have share from share stomach growth cans. look things going of substrates change much couple of of

some and think agree well view. is can I all from -- of environmentally point believe we we you positioned of a perhaps substrate all that agree the

of the money The consumer a has confidence, of more to long and a that spend question and on for that have is refreshing with do out model before a our treat, that how nice to some treat there has something the customers customer’s quite that’s feels with little that’s -- step more consumer some do confident but now back successful them. bit clearly pricing, very a

others. we of not market as shifts But be X%. to don’t at as participating to can successful I bit to said, are we have perhaps, that, X% exceptionally now, a much happening as There be not some little successful. -- X% We growth be right are share are we a in

here good responsibly, right I early XX good and say sit have year, next think, we the but today, pretty very now. we feel months. good pretty to to as are a we we are else have know year about going this going don’t next year about It’s how little year. a it I to But talk year to a next

Okay. Thanks is for there robust that. definitely a agree at rate. I that And yeah, would a outcome no, low growth even single-digit

I you know So volume I coming that with that muted some than from target it to I thought. restructuring guiding that trying Is note, X% conservative. EBITDA right a maybe Transit little an growth now some next is think annual the is really rate achieve even to targets are you expect for now, the consensus more are guess EBITDA is at as growth year of you X% are right given growth be and that other kind mean, that you on able XXXX. XX% up and what or X% drivers’ you maybe may to of recovery But Europe. XX% which your we achieve should because on X%, in internal basis, for to possible,

So to your that? thoughts get I on just want

see you looked here if this number a you and the Well, all we growth papers XX% comfortably Clothier’s listen, would at range. sitting were in to X% within the looking office Yeah. that’s you year EBITDA Kevin if for at,

are end are have Our and for months, and where so ahead within -- said six will full initial revolved of a pretty Transit was of market, our on initial it thought we they both remain we the predicated high comfortably European that would year, now XX% North they Beverage, that in of and we the to American range. confident say -- I flat that which remain range to through plan revolved growth ahead offset have we But be would already, X%. that to beverage around that that XX% going X% revised

little Again, early But year. doing early. want a comment next most and number I really other well of I the to things and next is across them on talk briefly think to the about there are It’s or XX% talk about can say know way. to a let’s go to -- there’s businesses or I little X% things really I X% don’t if just really whether some we always are don’t the X% want that year. it’s that

we reset in profile cost the have But Transit Packaging.

doing That’s mindset from base exceptionally is much in we as and industrial the business one. product better year activity to future. positioned volumes deal well a way and the manufacturing We to are lower with have and benefit Transit that number reset in lower better we Packaging from cost return a sell really a this

the margins appropriate and we we in we have we that reestablished European as getting more way target business that two, our on beverage well are justify said, to back to investment established. our can Number have have

they So those two doing are quite well. businesses,

United around. base may Beverage to are And But to businesses States, from it’s whether service some continue do of us business, businesses a the Mexico, I think a Americas value we customers. well manufacturing footprint move is within the these we the to in positioned that deliver whether positioned total, well well Brazil, it’s whether it’s and as cost to believe

little Asia now. is a choppy

to are Asia going a still the I market. long-term confident view think that be we is Southeast in growing

is a going bubble don’t that. we always -- take don’t We that right and feeling don’t wrong. I go think if pop. We the I economy So don’t is where know up will now We eventually know currency are things there’s know to can us.

really down really benefit we changes our I don’t buying markets return infrastructure allow a and and you cost to get storms product. more consumers of settle and lot weather which our profile, next the I will year. industrial want can us tell to made as to that have But into to

Okay.

Thank you.

Phil is question next Our Ng of Jefferies.

is open. line Your

right, you have All Do another Phil? have Jackie. seem moment. We lost question? for Phil a to

All right. thank you.

see. up. looks me queued also he Let like It

Let other line. Can just try this Phil. us? and you ahead me Hello, go hear

hear Yes. you. Can you me? I can hear

ahead, Yeah. We Phil. sorry. can hear you, Go

Hey, Tim.

the call. of Sorry I that. missed about parts

your asked give more You comment on I a in you the how little why the coming along, backdrop. because customers The half. talked down some can you startups more little one capacity in your a color certainly back -- reason of expect contribution macro Europe, the us earlier, do

So I just thinking terms want little with in half coming to some that get on? the more a about and flavor how are of capacity of back you

Yeah.

a is in core Europe about up we year talked I think in this in response to potentially question, volumes Tourism a core and fairly consumer. that’s consumer. weak weaker offsetting Europe in Ghansham’s

have focused before to market will driving strategy. need opposed to said, as further margins in can investing recovery a on continue we appropriate been But exceptionally margin like and as earn that. We chasing we every that consider with I we last

is going trace the year, we said, ridiculously of well, Now I’d the back half to are the thing that, last half having the of say -- comps said Having back last we easy. are going are to year. first

QX going of be are to this So QX, last year QX, multiples QX year.

So better come some will price cost of from that management.

comes new and capacity as startup costs the then we down in wind move of of it Brownstone the through we our and into comes additional from and out work up will Spain as Peterborough sales Italy Some Peterborough. way that

of half better year to back the going but going year. last year. It’s last So, this multiples nothing were in is be where Europe like we than to look

Okay.

given about the So timely coming you feel just capacity pretty of at Europe? a in macro on challenges good some backdrop, the

you know for making are Well, investment long-term. investments, when an the listen, Phil, you make you

beverage you months was worried to to If I a never six going you can do of would hundred plant I and really the build told me spend about next million couple months, or was a dollars it. three

we products market our investing sustainability how investments those believe that’s are their the the to you believe really importantly, make We product. regions believe believe ultimately customers XX-year the products those our countries of We in, in we to want product. and in consumers and consumers those the are in and and in and to These we investment.

And investments. as to long-term said number I three-month are I a said, get overly These in any six-month or have are of times, we going concerned period. not

we you, of the do I can the on am but will months, three we months going about to exceptionally are what our investments going well profile short-term but the think have comment cost tell overcome good is consumer and we I over feel made manage six the future we -- that not I disruptions, business. think or I we to

and sense, choppy. here. then has how kind pretty the on of that you. perspective, sort The perspective little Got Asia are Tim. how expecting quarter? about give sounds Can earnings fourth from you a you some profile are the pickup a has look, like how us pointed been back Makes it steady you been half will an thinking And out in you progression of background the

The been Asia. only not profile has It earnings been the you, thing has in Yeah. you said steady correct I’d steady.

in only year-to-date. down are We QX not but significantly,

talking --for drop been it’s But I right, brought quarters, sequentially, am we just last from [ph] the… steady the under down relatively about these few levels

I think.

think… I

we do think... here, …from

QX, be QX QX. Asia down for year’s should going QX be But last are came the than down last of than thought has -- will said, we we back the last year’s half last would. better back as much it to of QX but this comps in And I than year last similar in to such, be full because will in and better to be QX similar the year, year, year. just easier we only QX again, year, half weaker

Thanks lot. the color. Appreciate Okay. All a right.

Thank you.

Thank you.

question of Pettinari is from next Citi. Anthony Our

line open. Your is

in question. is This for Thanks sitting taking morning. actually Bryan for the Good Anthony. Burgmeier

about on growth. U.S. outperforming volume can XX% industry like by are You talking

second which a a weakness first half startup bit? little the think was that also then outperformance maybe been little the has think Thanks. Mesquite of I expand the is Do can surprising little half bit online, delays U.S. Mesquite a you mark, once the and is in below beer. given the XX%

little be had some up So suppliers already panels, initially Mesquite component now. components would still startup ease, from it’s these a are et delays has as targeting that things that but we the out get electrical would are and there. some been we August supply cetera, are there issues to We -- need We we chain -- for had delayed. hoped we of but we disappointing. Most starting late been

the around activity think around we in half curve, promotional some the Mesquite, of of acceleration growth the I but of back some it our that see learning year, having June largely the July here through the capacity that. we through and customers to see our have -- we its to we expect third it Martinsville relates around the the of the contract startup customers and as and quarter we service of that in available it that begun business make in to carry May, in end that the the under

on of maybe non-reportable maybe too to in for Thanks. turn Got and will so to we think unwinding basis, why XXXX start quarter. a it bit the we is year back Can get I about expected it. remind an was this much EBIT do you levels? much, do weaker kind over. Thanks we the talk than question us the detail. me, non-reportable but you for Last don’t

it at was XXXX inventory prices. Well, in doesn’t from this the higher That XXXX big carrying we difference and the much took into QX year. gains recur tinplate that you saw

two The and open pretty about that’s have other thing it, happening we been things.

digits. North volume entire when well say digits, for double over preview market cans I assuming Europe, decline mean, across aerosol a XX% we and One, year-on-year, Europe aerosol most although for are can I which is products But volumes the can in longer. any double the And American am I of economy. not aerosol exceptionally weak

going look we economy six like say volumes, what follow that as can months or you back, If next we over months. -- our predict historically is we the always can eight look the we aerosol to

So, months. for months has been or eight but weak aerosol now six

Beverage in of our the we business quarter, than And to last Equipment as up years global noted has business. you Supply past. capacity lower it at the secondly, reduction in end the we then Making and brought it than is startup several the is took business in digest so Equipment headcount much And of business slower they been new the Can a now -- and that companies the is been that first has

business not of look am in But do don’t year-to-date. last we I business. me. half similar as I the think -- to the back of in half far will think year, total sure I to how we below are look this front back the very XXXX, year in I in XXXX have that that of

for Thanks all Got detail. it. the

Bryan. You are welcome,

Thank you.

Our from is next question Bank. White Kyle Deutsche of

open. is line Your

rates are happy Hi. Good the taking higher drive up Mesquite question. footprint spot, the U.S., there backdrop? In current start, now good the a given improvement that your in just morning. Martinsville U.S., room current to ramping is here with operating about Thanks to demand for for the you in you or have in think I

I what to position do. it’s -- -- we careful, to I got be I think, others don’t my not this, I about Listen, say talk

probably -- as as I announce know We I do don’t capacity say us years you of to didn’t think how all or I we wanted two were ago. this? always three much years

measured we we in to that, that are in with capacity and opposed as we we over say were measured our given expansion the couple total. and would and I last the a to that years market footprint, more of company very happy approach the announced the affected

throughout in transpiring that next are share infrastructure today with and where would North over industry the I America the our we market footprint XX our gains gains geographically sit months we wise. see with satisfied and that we where -- size say

and have say cans our geographies, we not all So would with We all and remember, sizes different a we XX-ounce platform. making I satisfied of just anymore. quite are that, variety are

to think, makes were then I the volumes is That XX%, down quarter global backdrop. sense. the Transit, it. on Got you And in which XX% given relatively expected said

some start easier deceleration I curious know half? just going quarter, lapping the progressing but you half? things how in you are curious seeing second as go throughout will into are into progressed how Just back comps, the the that demand you any

Yeah.

the where So decline second quarter through with I you. your I -- agree have volumes and in exactly have to question would they is, I would quarter expected the didn’t. I know because

team think our volume. half the year of really I cautious in the going back on Transit is into

other they are than year, half not as they businesses. But the better of is comps little of a I think, as going easy to however, up the better. are easy, the back business that. some holding The do are

the business up team cautious. holding a holding -- I Then implies business right had and fears and better the because have only through I is put even up now than better Kevin they been Transit little July your think -- forward your probably question than our it’s

because is have they probably Now up been don’t But business cautious rightly we holding what’s the to so know better. happen. really going

serve, much upon different I -- before. end XX -- dependent The not it’s than XX more years really have business, we a the talked it or a was more business markets diverse metals is is business the that It’s so years about they ago. just much inventory.

has So been that the just supply. the have the very we we serve and given supply the of but said cyclical, before, certainly diversity are end market some customer stable, of some of markets -- its markets as business

be I point, the seems bigger So to holding we well keep as very it point, well. the waiting we for slowdown, understand understand up a even but

Thank it. over. turn you. I it Got will

you. Thank

Wells from question is Thank Hajde Securities. next you. Gabe Fargo And the of

is Your open. line

Tom, Kevin, good morning. Tim,

morning, Gabe. Good

morning, Good Gabe.

flow Transit I specifically, of maybe intent presentation there. and know characteristics cash is and its of the maybe in lot dynamics or this to generates to there just a of And cash business are food of trying of but your a rest a on just business a about the the out your go the business? am detail, was of, of terms flow with flow North that the in relative there about to you tough of understand repatriating where it’s forum or part I think, the bit even, then the website curious, quite that investor unique investors of Tim, the detailing out I can characteristics presentation what it guess, in lot cash Transit maybe anything it some cash let that presentation. I into talking American of

Second one complications have easy. don’t really part far whatsoever We repatriating -- Transit. have don’t might significant in less question minority think no other cash I businesses. we positions of than interest in in we Transit, certainly any in Almost have -- the any

don’t XX% the businesses all and have is the greater in of of in So -- much business any and cash the of countries is we in than the where ours the all is restrictions States business almost whatsoever. United

I think presentation. that investor fulsome it’s a we while probably been since a had

thought if we it’s would [inaudible]. just whether we helpful it’s put it conferences to one website, used in posted be to or So together on available investors the

and say, I business cash growth thing. about, money company it makes really a several got over investing worry don’t the are flow, always be run So worry everybody wonder plan it about I because guy with important. pension is is businesses, Cash hear investor me that cash last ourselves their cash know the an flow, a we and about bad point else which flow reminding whenever the is about that’s years to you everybody to flow need excited don’t cash and a certain of characteristics

and And aerosol little businesses so which and cans Packaging, generate the Transit or whether maintain cash footprints, run it’s food very and require these generate. industrial capital have to they well-established that

we made from and there business investment well food for focused the North food as time have food that’s aerosol quite to pet where American large some Food to food, and and has consumption more supplier on food do a from food, human the been and are especially market can. very time, we has investments we to pet pet the grown

that the On several would or we growth of bolt-on said, business, business in any annual great capital we Transit, are very capital X.X% we grow sales in business to maintain acquired the marginally that come from are talking ago, when and in not that acquisitions. the about business as years needs

business. and a capital-intensive not so So -- it’s

of for percentage but than part. manufacturing business report, The we low. businesses, our if It’s think somewhere I probably a the long-lived in more business in that’s still a business. long-lived of show assets annual as that service it’s a other you assets very revenue is

cash understand So important important. it’s where we that is the everybody flow -- we cash. listen, just think generate We

Understood. Right.

it’s a think I good business.

And so -- just…

part… Second

T

only last several is The that, beverage the say, over years. can we been business thing I’d have growing the Gabe,

flow a depressed. cash down in that in business. business the has of in years been But step obviously, significant next the couple expecting So over capital that

well. is So of cash going a return business lot generating to to that as

Okay.

I two-part, one, apologize. Second

a is, obviously, anything saw I that things perspective, sort inventories where terms at. scratching and the months over your number past, out, But a were you play from on bit the my of of head XX don’t it pick finished we can your business, stock of am to why I in don’t little or is that can One this specifically reason want because, difference and there obviously, us to a The maybe a there’s between but as inventory talking I customer’s asking tell sell-in beverage I disconnect, am say relates about sell-through for inventory. America. timing the North

this and So But share looking not big said, Crown. we there, appreciate know again, for as Nielsen again beer there side, there’s growing in at data are shifts. and it’s I CASM I some are it like I the on seems

the that, might called Mexican in some noise you you as but with North So participate for terms Mexico the be American has that beer. been And to inventories has the then talk customer, ability system? where going beneficiary, think, think just been anything is, tell can you part beer a anything big of I in around out can with your about pretty second winner, around of the Modelo us obviously,

time. them the North a to have don’t deliver say, carry and customers washer. They The ship in would out. I go America, -- specific carry just roll I So, then customers the of they XX-minute excess any can no in fill inventory. In hand. America They inventory. cans North into both believe We them intervals. our and almost don’t They on in they Europe, inventory lot

typically customer a as Asia, work Brazil, a and they Southeast that seen higher demand But inventory We in little in to and have North bit post-Chinese even Carnival than we seen our regions. might post there’s New issue have little no in Year it those customer inventories at inventory their level. lower America, as to from customers our down led relates being have

a have one the beer States for you larger variety are else. I big of into we United our wide ships or beer that of would very the a it beer very We customers, can situation, do service Mexican customer larger including a beer, is large On customer is somebody customers, suggest that business. that the a not describing

Got it. Thank you. Good luck.

Thank you.

speakers. questions you, have At queue. Thank this time, don’t we any on

of Okay. Then, today. October. you the I speaking Jackie, for again thank with in forward Thank all you concludes and that we now. you us very look to much. call Bye joining guess

Thank Thank you, joining. you today’s everyone. concludes call. for That

may You disconnect. now