Q4 2019 Earnings Call
Huh.
Hello, everyone and welcome to the fourth quarter and full year 2019 result.
This call all participants will be enough listen only mode. After what they'll be a question and answer session and please note that the college being recorded I'll now hand, the call over to Paul <unk>, Chairman and CEO. Please begin.
Hi, good morning, and good afternoon, everyone and welcome to our fourth quarter earnings call, which follows publication earlier today of our results for the quarter well here with me as usual, our David Matthews, our CFO shown Murphy, our COO, John John Murphy in our corporate development and Investor Relations.
Director.
Our remarks, we'll incur certain forward looking statements. These reflect circumstances at the time, they're made and the company expressly disclaims any obligation to update or revise any forward looking statements actual results or outcomes may differ materially from those that maybe expressed or implied.
Due to a wide range of factors, including those set forth in RCC fighting some news releases.
Our earnings release for the quarter as well as our financial report related materials can be found that art I group Dot com information regarding the use of Nongaap financial measures May also be found in the notes section of the release, which also includes a reconciliation to the most comparable GAAP measures of adjusted EBITDA and adjusted earnings per share.
For full details of the company's Dr. Creek forward looking statements disclaimer can be found.
In our SBC fine.
As you're aware the divestment of Arkutun specialty business was completed on the 30% of October and following which are dot holds a 42% stake in the trivial packaging joint venture.
Our comments today, well, however focus on our continuing operations comprising metal beverage advanced packaging.
Trivia packaging were reported 2019 results on the of March next.
So turning to the overall results.
Ah first for the fourth quarter.
The results were in line with our expectations with revenue growth of 1% at constant currency to $1.6 billion adjusted EBITDA of $267 million increased by 6% again at constant currency.
For the full year adjusted EBITDA of 1.173 billion most in the upper end of our guide range with adjusted earnings per share of $1.82 cents, which was slightly ahead of archive.
And if we look at the segment performance in the quarter ending the year and again are focusing here on a constant currency movements.
The metal beverage business, which now represents over half of our annual revenues and where we have leading market positions in Europe and in the Americas.
Total units shipped in the quarter increased by 4% in the quarter and 5% for the year.
Metal beverage America demand remains strong across the.
Across the region during the quarter as it did for the full year fourth quarter revenue increased by 6% to $457 million with unit shipped increasing by 9%, partly offset by the pass through of lower income input costs. Adjusted EBITDA of 66 million was 4% lower than the same period last year.
In the reflecting a particularly strong comparable quarter last year.
But over the past two years fourth quarter 2000.
2000, <unk> adjusted EBITDA has grown by a compound race of 15%.
Full year, adjusted EBITDA increased by 9% to $250 million with good gains in both the U.S. and in Brazil.
We're very pleased with the continued strong development of method beverage in the Americas since we acquired the business in 2016 units shipped in 2019 increased by 7% with growth in specialty cans.
Of 17% of this is an area where were around represented.
And as we look 2020 and over the medium term the outlook remains very positive in the Americas industry volumes in North America grew by 3.5% in 2019.
The greater sustainability awareness has contributed to new product introductions being increasingly skewed to beverage cans.
Brazilian market grew by double digits in 2019, and structural shifts further underpinned consumer driven demand growth over the medium term.
In addition in addition to these industry wide factors, we in our door have significantly diversified our own customer base in recent years and notably this has been the case in North America, and we have been growing our presence in faster growing segments of the markets, including how hard so.
Officers energy drinks in sparkling waters.
And the focus that we have on portfolio optimization with an emphasis on value over volume has delivered tangible benefits since 2016.
And in parallel with this we've made investments in support of our customers growth, including our new ends facility in Minocin, Brazil, and the addition of specialty capacity in North America.
Despite all these investments we have a times been stretch to meet customer demand on our available for capacity capacity for 2020 is fully sold.
And as we look forward, we see opportunities.
To invest further in both North America and Brazil.
In support of customer growth and market can and market conditions.
And the evolution of support this also I'll return to this topic later in my remarks.
Moving to metal beverage Europe, where revenue of $341 reflects a reduction of 1% and unit shipped in the quarter compared the same period last year.
Marginally lower shipments reflected a strong comparable in 2018 as well as a disciplined commercial focus which led us to reduce volume with certain customers in the latter part of the year.
Full year units shipped in Europe increased by 2% compared the same period in 2018.
Market fundamentals remain attractive, but temporary cost under recovery from some legacy contract resulted in a reduction in adjusted EBITDA in the quarter. We do however expect to cycle through these headwinds by the middle of this year.
European beverage can demand remains healthy underpinned by ever increasing sustainability awareness and our capacity for 2020 is fully sold.
Our GA, our geographic exposure, our 40% specialty mix on a well invested cost efficient asset base provide confidence in our outlook for the area.
But we will remain focused on achieving appropriate value for our products.
If I turn to glass glass in Europe delivered another excellent performance with good progress in adjusted EBITDA margins of over 25%.
Revenue increased by 6% to $395 million compared same period last year, principally due to positive pricing of the pass through of increased input costs.
You mix was flat in the quarter full year revenue increased by 5% to $1.6 billion compared with 2018.
Adjusted EBITDA of $99 million in vast Europe increased by 21% compared the same period in 2018.
EBITDA for the full year grew by 15% of $391 million.
Market conditions remain attractive invest your with growing sustainability awareness on an appreciation by consumers of the infinite Recyclability Abbas packaging.
And.
By the brand owners of the potential of glass to drive growth through Premiumization innovation.
Glass packaging in North America performed well in the fourth quarter demonstrate benefiting from the wide ranging actions we initiated in 2017 in response to challenging market conditions.
Revenue 388 million was marginally lower than the same period last year as a 2% decline in volume and mix was offset by the pass through of input and have increased costs.
Full year revenue fell by 1% to $1.7 billion compared with last year.
Adjusted EBITDA increased by 18% to $58 million compared with same quarter last year growth was driven by cost efficiencies, including from past footprint adjustments the discipline pass through of input costs and positive IRS 16 effects.
Full year EBITDA increased by 9% to 279 admitted.
We're pleased to have stabilized profitability for two in 2019 with some growth achieved in the second half the multiple initiatives that our team in North America has undertaken.
In the last two years and Rightsizing, our footprint Rebouncing, our business makes investing in quick return project and continuously benchmarking and optimizing our cost base have significantly improved the position of the business.
And its ability to navigate current markets.
But there is much more to be done we see scope for improvement in the coming years, and we'll invest in pursuit of further efficiencies and enhancing our capabilities.
As we outlined last.
Quarter.
Alongside these initiatives as a member of the American vast coalition, we filed antidumping and countervailing duty petitions in 2019 against unfairly traded Chinese glass container imports. We file this at the International Trade Commission and.
At the Department of Commerce in Washington, and we welcome the Itcs unanimous preliminary findings last November of a reasonably indication of material Indus injury to domestic producers from such imports and we look forward to the department of Commerce as assessment of duties, which is due shortly.
Such duties once imposed would be in addition to tariffs which were introduced in 2018 by the U.S. government on Chinese imports and will remain enforced subject deep on these new tariffs will remain in four subject to final approval for an initial five year period.
While the vast market North America remains oversupplied.
Our footprint adjustments and other actions coupled with the establishment of a level playing field.
Lead us to see a positive future for vast packaging in North America. We are committed to the successful long term development of this business with Europe, providing the temptation for well invest in an efficient industry supplying high quality sustainable packaging to a diversified customer base.
Turning then to sustainability purchase Ben.
A very hot topic in the last year and we've seen a greater focus on this hold area and our does the producer of infinitely recyclable metals invest packaging is set to benefit from this trend. It is also an area in which we have invested significant resources over many years.
As we view economic sustainability and environmental sustainability as interdependent.
This has informed our initiatives to achieve industry, leading colored usage in Europe, including direct investments and cut production and treatment kind of treatment joint ventures, as well as continuous programs to down gauging lightweight our products.
We recently published our 2019 sustainability report updating on progress made towards our 2025 targets.
We've also point to the senior executive as Chief Sustainability Officer.
And have recently established aboard sustainability committed to oversee this important area.
On our progress continues to be recognized by external accreditation is most recently with our climate change ranging from the carbon disclosure project.
And sustainability driven shifts in substrate are here to stay as permanent materials matlin vast packaging are well positioned to win from this stronger medium term demand outlook and we are totally focused on seizing the opportunity just prevent by providing an existing and new customers with sustainable solutions as they respond.
And to changing consumer preferences.
If I turn now to business growth investments.
The favorable current and projected demand backdrop for our products has created a range of investment opportunities right across the group.
All of which leverage our existing scale and market presence generate attractive returns on investment.
In an environment, when low or even negative interest rates have significantly elevated the valuation multiples of acquisition targets.
The pursuit of our organic growth opportunities represents a compelling shareholder value proposition.
These investments are also de leveraging.
We therefore plan to invest approximately $250 million on business growth investments in 2020, this investment with a car principally in our metal beverage businesses on in glass Europe.
We will prioritize growth investments in existing production facilities.
These investments have materially lower implementation times and startup risks, thereby resulting in enhanced returns.
The investments in new capacity will also be supported by customer contracts.
The business growth investments will be additional a two and separate from annual maintenance capex expenditure across our business, which is approximately 350 million in 2020.
The business growth investments will be funded and cash flow.
If I turn that into our capital structure.
We have also we have joining last year materially enhanced our capital structure, we de Levered to 4.5 times pro forma adjusted EBITDA, reflecting strong cash generation and the divestment of the food and specialty packaging to the trivial joint venture.
And in parallel we continue to invest in our business with $500 million of capital investment in our continuing businesses during 2019.
Annualized cash interest costs were reduced by 180 million during the year to a pro forma $260 million as a result of debt repayment.
And the August refinancing of our 2024 senior notes. These actions also had the effect of extending our average debt maturity to almost six years.
Also we refinanced the dash of our holding company in 2019 with maturities extended to mid 2027, and the interest rate reduced from approximately 7.2% to less than 5.8%.
And having de lever to four and a half times EBITDA at the end of 19, we intend to maintain leveraging a range of four to four and a half times adjusted EBITDA and we believe this range to be appropriate given the inherent stability of our business.
Underpinned by a scale with annualized revenues of almost $7 billion and adjusted EBITDA of some $1.2 billion.
And with the geographic focus in Europe on in North America in the smaller one in Brazil.
Second the.
We supplier diversified blue chip customer base, and the stable beverage and food and markets with three quarters of our revenue under multiyear contract uncertainty our prudent capital structure, where average debt maturities I mentioned earlier, almost six years, and where some 90% of our debts at fixed rates.
Current interest cover is approaching five times and in addition, we retain significant secured debt capacity and an attractive covenant structure. So for all these reasons, we think the range of four to four and a half.
For leverage at times EBITDA for leverage is appropriate.
So in summary performance for 19 has seen significant operational and financial progress and we look to the future with confidence whilst we're mindful of macroeconomic risks we are targeting further progress in 2020 and expect the following.
Adjusted EBITDA of approximately $1.2 billion. This compares with the 2019 pro forma EBITDA of 1.173 billion.
Which at current exchange rates of around $1.82 the to the euro versus a daughter 12 in 2019. This equates to 1.15 bid.
Business growth investments are expected to only contributed modestly to EBITDA in 2020.
We expect free cash flow in that in 2020 before these business growth investments of 375 to 400 million Dollarss and we expect maintenance capital expenditure in the year of $350 million.
Adjusted EPS is expected to be in the range of 1.48.
Add to 1.6 $4 Centsper share. This excludes the contribution from Tribune packaging, which will be equity accounted on for which no catch contribution is expected in the initial years.
We expect first quarter 2020, adjusted EBITDA to be approximately $270 million.
So having made these opening remarks, we're delighted to take any questions, which you may have.
Thank you, ladies and gentlemen, if you do with to ask a question. Please press from zero at that one on your telephone keypad now if you wish to withdraw your question, you're making so by pressing Sierra.
First question Ultimate line of.
How are you from.
Please go ahead your bye now.
Good morning, guys. This is actually Randy tole sitting in for Anthony.
You completed for 150 million in special payback projects at the end of 2019.
Which were originally expected to boost EBITDA by 40 million or so on a continuing operation standpoint.
With that EBITDA guidance buying an uplift of about 25 million year over year as a possible to say how much of that is from these projects converse organic growth. Thank you.
Well I think we saw some of those vendors the investment spread over two year period and would have seen a very small amount coming in 2018 with than they did contribute to at usefully in that over the course up that Plenti 19, So the Matt contribution add the current haired public.
The order bet.
8 million ourselves as beginning that yogurt 2019, but the bottom one other point as we mentioned the 11 73 to the approximate 1200, if you adjusted for currency instead of being that the odd million net Mara.
Hello.
Okay.
Thanks.
And then I think on those projects there was something like a three year payback period.
I'm just wondering if a 259.
You announced.
What kind of returns you're expecting there what kind of payback.
But I think we said that they are de leveraging which by definition would mean there last from the port core and a half year payback.
Okay Thats helpful. I think in your prepared remarks, you mentioned the specialty can Mexican around 40% of your portfolio right now.
Is that expected to increase after these projects announced today.
Are completed.
Yes.
We have yet the mix.
Overall healthcare is about half, 40% higher step stayed on reported presented.
And the other mark.
In that area.
Okay. That's helpful I'll turn it over thank you.
Next question is from Roger Spitz from Bank of America. Please go ahead. Your line is now.
Thanks, Good afternoon.
First.
The.
Outstanding amount on your off balance sheet securitization at December 31.
470 million.
And on your assumptions for the 375 different your free cash flow on you gave the 350 as to Capex base Capex.
What do you have for cash interest taxes working capital like any other items.
To make him a little.
Roger.
Let me just walk you through that Roger we start with.
Around 1200 EBITDA.
Capex maintenance Capex threefifty interest around to six day.
Tax 80, we've got repayments on the leases the now on the balance sheets of around 80, and we expect a bit of investments in working capital support the growth projects of sort of around 40 million. So you have that law that should come to a number in the 375 400 range and Thats clearly before.
The business growth investments and.
Got it and in terms of struck investment.
What we like to exceed.
2021 to be on the same order of magnitude of 250 or will that start to ramp down.
We haven't made any decisions on that get it depends on market conditions than demand conditions.
I think if they continue the growth in demand continues as we see it now a particularly in our Bev can business I think it's likely that there will be further investment off the quantum of that would be.
We couldn't get say, but it's it's attractive for us because.
I mentioned the.
That the paybacks on us.
And obviously, we wait where when business to support our customers. So it's very much depends on on demand trends, but as as trends are today have there. The demand is very strong in the back kind of area. Then yes, I think is like you'll see some investments further investments.
And lastly can you give a sense.
How much are.
Yes.
And we'll grow both your.
Level average can capacity and year last year capacity say on a percentage basis.
Well I think most of.
The bulk of the investment will occur in.
In metal beverage.
Both in principally in the Americas, and the lesson in Brazil, and southern European glass.
Hi, Thank you very much.
Next question from that Travis Edwards from Goldman Sachs. Please go ahead, Sir your line is now.
Hi, Thanks for the time and good morning, I just wanted to ask a quick question on capital allocation was wondering if you had any updated thoughts or commentary on how you're thinking about your dividend policy as far as actually maybe taking out a dividend for shareholders and potentially.
Chipping away from those Holdco notes.
I think at the moment.
Travis we are continuing with our dividend pretty which is pretty much in line dominant in previous quarters and I think this will be a year of investment we have made any decision yet in relation to whether it will be a further dividends for shareholders or not I think it's too early in the year to come 20, such conclusion.
Ill, because we have Pasadena too.
Due to pay dividends and reduce our holdco debt as as we go forward and I think thats something we will eventually do.
Got it and then do I, just refreshing us on that RP capacity that you have the opco.
The RP capacity at the moment is $580 million.
You should the time, thank you very much.
Next question is from Tobey Jones from Deutsche Bank. Please go ahead your line.
Hi, good morning.
Well My question, Matt in North America investments.
Okay, what you're putting in right now will allow you to grow in line market and 23 line.
Gravel around this rate.
And it's it's not.
Prepared add to add incremental capacity.
Slide scale weather.
Like that.
While Debbie our approach to this has been to look at.
Off investment and increases in capacity in our existing plants, rather than build greenfield plants. All returns are better it's easier to execute these projects and Thats, where our focus lies at the moment and thats going to make additional line speed up the et cetera et cetera.
Yes of course as I said in an earlier answer we will look at further investment if thats appropriate and the returns are there to it's backed up by customer contracts.
I think at the moment, we don't have any plans to build greenfield operations.
So it is whether or not we get we we get out paced by the market in terms of percentage share I'm not sure Thats.
The main consideration for us to be disciplined.
In our approach to pricing and returns and obviously to be disciplined in terms of the returns we make on these capital investments.
Local four points arm.
Great value equal farm pretty optimistic about.
Gross barrels Wow, So I'm curious how you manage stopped going forward.
Right now our Latin America.
Yes glass.
Right.
Im sorry, the last bit Debbie I didn't quite catch them, but to your question.
Okay.
Hi, Rob.
Okay right now.
Latin America.
For the investment, but you also responded pretty confident we're pretty optimistic about the grass farm.
Well I just want to get your thoughts from how you manage that.
Well.
The other regions.
Yes, I think I think the the situation in Brazil is that there are structural changes in the marketplace down there with people moving from one type of packaging to another.
See moving from Glasgow cans, there and presented were not in boss down there, but as so that has led to increased demand and other factors as well down there and tab. We're lucky in that the three plants, we have in monopolist and Jack right now the he knows the two compounds side.
It has been Jack Ray and then the ads plan terminals were lucky that we can significantly increased capacity within those existing factories without having to build any new facility. So it's much easier for us to increase capacity and also the returns on adding additional lines are more.
Our attractive.
And.
Than building greenfields or having to build new plants and much less risky. So that we've also got a very strong team down there right across the piece and we have very modern assets and we're certainly prepared to invest to expand them. So I think for us.
It's a good situation in Brazil.
Okay. Thanks, very much clarity I'll turn it over.
Yes.
Next question is from Michael from Barclays. Please go ahead. Your line is open.
Thanks. Good afternoon, guys I guess first question, if I look at the metal cans businesses. It looks like in the fourth quarter organic revenue was up but EBITDA was down. So can you causes parse through some of the cost headwinds that you guys have in this quarter.
I think there has to frame in that in Europe for the past several quarters Liam lives as was the number of contract that came up for renewal and new classes coming into the market on behalf of reacted.
At business.
Around debt plane by 17 led by company.
Cost headwinds there and it does fully recover we would expect be fully cycles for that by the time at by the mid level that is part of here.
And the American.
Performed very strongly we've seen good volume.
We could expect as we mentioned to meet demand.
In both North America and in that in Brazil. So you know that needs to make beef cost there, but as extended their market that well within a two year basis.
You know the compound rate growth in that fourth quarter EBITDA in our Americas beverage business, 15%, So thats security Cambria both.
Businesses like strongly on a full year bake revenue volumes on EBITDA.
Got it that's helpful and I think you made in your prepared remarks, the commentary about your fully sold out for 2020. So what does that look like that in terms of volume growth year over year versus 19, and also times EBITDA growth for the model can.
I think in Europe that at the market is that it's traditionally being a low single digits feeds and growth could be a little bit better than that we did mention that tam discipline in the fourth quarter that we'll assess some business we didn't take add to that will deliver software so that.
Kind of in that low single digits.
Range and then in North America in Brazil.
As add to.
Struggling at times to meet demand. So we have these investments going in but they will take a limited time felt they will limit the yet they are affected the current period will be limited in terms of volume we've also.
At diversified our cost base in our business.
Not purely about volume and their uptick in North America.
So but value.
Got it.
Got it and if I could just squeeze one more and.
If we look at North American glass market, obviously, it's been a bit of an evolution in terms of volume numbers for the past year. So you guys still seems to be doing well on the cost front.
You can you breakdown.
In line. So can you maybe just talk a little bit about what your expectations are just with a broader north American glass market as we enter 2020 and how you guys are thinking about affirming our guidance.
Well I think there's still as I said earlier, our Michael the still.
Excess capacity in the market.
I think the the tariffs the coming the existing tariffs on the coming tireless from the from the actions we took all will strengthen demand.
Or at the very least.
Steadily the the falls and demand.
And.
I think if we we've right sized our we believe our portfolios now rightsized to the business we have on our focus will be on improving the.
The profitability of the business through an improvement in operating performance.
So.
As we see it to as I said earlier I mean, I don't think it's going to take time for just start growing again, but we're quite optimistic that.
We have the leavers to do that.
Great. Thank you guys.
Next question from Brian Maguire from Goldman Sachs. Please go ahead. Your line is now.
Good morning. This is actually Arthur on for Brian and in past conference in December of last year. You mentioned you were looking to alter your contract structure, particularly in European glass.
I was hoping you could give us some more color on what percentage of the overall revenues in that segment would be change based on those contracts and when you think that timeline is going to take place.
I think while we delivered to us much European glass.
Following there this year and over many years being.
During the positive at we've talked more sell about Pat some of the indexation and policy like that in North America add on the mats item.
Some aspects of the glass side, where we've been working on that appeared both that's progressing but you can only do as eggs, which context view so.
Thats media getting add path to the cost pass through that more aligned Rob just dissipate static and crude.
To lap that labor on the tariff rate Componentary chemicals mode. We've made good Atlanta.
We're into.
In Europe.
I wasn't referring to the pricing, maybe I misunderstood than but I was under the impression that it had to do more so with volumes specifically with customers having to actually purchase the capacity that they are making arda obligated to cover or it was my under.
Standing of that incorrect, while having it I wouldn't make a huge issue I mean, it's something area that way that are turned up we have been working on to make sure where you've got full capacity utilization of your capacity.
In some cases excess demand in Europe, reclassed want to make sure that the customers that you allocate capacity to actually take that capacity I think that may have in the reference on.
You see we're working very closely with our customers.
To ensure that we fully used our capacity each year and that we don't have on unused capacity or unsold capacity in markets, which are very tight. So I think it's more that kind of commercial focus throb, perhaps.
Some contractual change, but I think thats more of that the general commercial focus than anything else.
Thank you.
No.
Okay question is from maybe from Wells Fargo Securities go ahead.
Thank you good morning, gentlemen.
Can you hear me.
Sure.
Curious if you had more im sure you do have visibility into European beverage contracts.
Kind of cycling through what seems to be a little bit of under.
Recovered inflation hair.
How much of that business has turned kind of since it was acquired in 2016 and are you at a point, where now youve kind of cycle through all those and are on terms that you like.
But I think we gave we at the time of the takeover and 16 clearly there was a fair amount of shifting around with volumes that were new entrants a new capacity over the last few years built in Europe and the market has set to grow into that capacity and at the time, we took an over we had to defend some volumes on some of those.
Contracts are now starting to run off and as we said earlier, we'll probably cycled through.
Most of those headwinds by the middle of this year and we're very focused now on getting property paid.
For our products.
And as John said.
Earlier, we have walked away from business in the last quarter of last year, because we weren't happy that it provided us with the appropriate returns for our product. So we will adopt.
Very disciplined approach to it I think at clarity the demand supply situation in North American Brazil is tighter than it is in Europe, but it is tightening in Europe as well as we see increased demand for our core beverage can products in Europe and I think.
You know as has been referenced by others saw we may evolve, we probably will see us some migration of seltzer volume in Europe, as well, which will provide growth opportunities as we go forward.
Okay. Thank you and I think that the question has been asked a couple of different angles and ill try one more time is there something different.
That you're doing within kind of the four walls of of the beverage can business. I mean, my understanding is that you get much past three lines within a facility and things get a little complex.
To manage sometimes and so I guess if growth persists.
Colin in this 3% to 5% range and the markets in which you participate.
Is there a point in time Im sure there is that you're going to have to put new.
Brick and mortar in the ground or can use continue to add here in the next two years, if again growth has sustained in that range.
I want to yes, there may be but we certainly don't see it happening in the immediate future for us because we have opportunities to invest in our existing pads side I kind of common for others. It's a function of but while space you have your buildings and the configuration of the plants, but we feel quite strongly that we should take these opportunities for.
Investment first before we look at any.
Greenfield investments they are much less risky you have trained personnel on the on site already who could mentor new staff.
And on the execution risks are far lower.
So we're comfortable as I said earlier, we will be disciplined in our approach to this old area.
I don't know what's going to happen two years I mean, that's something we'll have to look at B C. Plus the evolution of the market is but I don't think we want to get out ahead of our skis here.
Understood and one just maybe try to put a finer point when you made the comment about being fully sold out and North America or you can you comment if you're in fact towing cans at all in the market or you're just running full out.
That is it was a modest amount over the last couple of years, but we don't visit any.
Earlier in 2007.
Great. Thank you good luck.
Thank you.
Next question is from Mark will be from bank of Montreal. Please go ahead your line.
Good morning, Paul.
40, Mark how are you.
Good.
I wondered if we could get a little more granularity on where the 250 million is going in terms of kind of particular projects and how much capacity this will add.
No I think mark we're comfortable with the amount of granularity we've given already I don't think does.
I think we've given your guidance as to where it will be.
But as just specific cloud specific line specific customers now I think we'll we'll pass on that.
Okay is it possible also to get a sense of whether theres any benefit in 2020 from.
Some of these contracts that were re done in North America, and the beverage can business.
Yes, there either.
And as possible get any kind of order of magnitude on that for how much it will benefit our it up.
No I think you know I mean, the big contract.
I have been re negotiated for in the market.
We reduced our exposure to some of the bigger customers in the us since 2016, our business mix has changed.
We are much less dependent on the bigger of the bigger customers than that we were when we when we bought the business in 2016.
And this has been a focus to improve pricing and improved margins and I think it's reflected in the results.
Okay, and then any thoughts Paul on act potential actions to improve liquidity in the stock overtime.
At the current levels no in terms of increasing the free float I think are we which we refined our holdco debt.
In a way that.
I'll put it out to 2027, I mean, clearly in the future, we can still plate stock and reduced that data or but I wouldn't be of a mine to do that.
The current stock levels share prices, given our view of the the businesses were in the.
The prospect for those businesses going forward.
Okay last one for me just kind of very industry specific one week, we talked a lot about the sustainability of glass, but at least in North America, just it seems like less than a less glass is actually being collected by kind of.
Recyclers or municipalities.
But in reality the amount of the class, that's actually being recycled probably going down.
Any thoughts on that.
Yes, I mean, clearly recycling rates in last in North American market Theres, some around 30% compared to much much higher levels than that in Europe, so they're very low.
One of the main driver is that too much last far too much glass in the US go straight to landfill and there isn't segregation.
One issue there. The second issue you have is some of the quality of supply and the quality of the colors.
Is not as good as we find in Europe on the cost of it as well and we're working with with various people.
On various initiatives and with customers who are very focused on this area. Some of the bigger beer customers. For example in the US are very focused on trying to improve these recycling level, but it's not.
It's not something you can.
Flasher, Wanda and get an instant results on this is something thats. Some structural changes are going to uptake base here, but it is very strange as a European to see so much Glasgow straight to landfill length and of course as much cheaper in the southern Europe.
Okay, all right Thats helpful. I'll turn it over good luck in 2020.
Thank you.
And that was our final question for today's call hand, the call back to Polk Wilson for any closing comment. Please go ahead.
Good well. Thank you everyone for joining us on the call today, we look forward saw.
Talking to you again in April with our Q1 results Okay.
Thank you very much.
This concludes the conference call. Thank you all for attending you may now disconnect.
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