Q1 2025 Ardagh Metal Packaging SA Earnings Call

April 24, 2025

Operator: Good day, and welcome to the Ardagh Metal Packaging S.A. Quarterly Results Call. Today's call is being recorded. At this time, I'd like to turn the call over to Mr. Stephen Lyons, Investor Relations. Please go ahead.

Good day and welcome to the art of metal packaging S. Eight quarterly results call. Today's call is being recorded at this time I'd like to turn the call over to Mr. Stephen Lyons. Please Investor Relations. Please go ahead.

Stephen Lyons: Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's Q1 2025 earnings call, which follows the earlier publication of AMP's earnings release for the first quarter. I'm joined today by Oliver Graham, AMP's Chief Executive Officer, and Stefan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook. AMP's earnings release and related materials for the first quarter can be found on AMP's website at ir.ardaghmetalpackaging.com. Remarks today will include certain forward-looking statements and include use of non-IFRS financial measures. Actual results could vary materially from such statements. Please review the details of AMP's forward-looking statements disclaimer and reconciliation of non-IFRS financial measures to IFRS financial measures in AMP's earnings release. I will now turn the call over to Oliver Graham.

Thank you operator and welcome everybody. Thank you for joining today are John metal packaging. Its first quarter of 2025 earnings call, which follows the earlier publication of a M. P's earnings release for the first quarter I'm joined today by Oliver Graham A&P as Chief Executive Officer Stefan Schellinger.

Stefan Schellinger: A M P's Chief financial Officer.

Stefan Schellinger: Before moving to your questions. We will first provide some introductory remarks around A&P is performance.

Stefan Schellinger: A&P the earnings release and related materials for the first quarter can be found on <unk> website at IR jobs are done in metal packaging dotcom.

Stefan Schellinger: Our remarks today will include certain forward looking statements.

Stefan Schellinger: With the use of non <unk> financial measures.

Stefan Schellinger: Actual results could vary materially from such statements. Please review the details of A&P as forward looking statements disclaimer and reconciliation of non <unk> financial measures to buy abreast financial measures and a M P's earnings release.

Oliver Graham: I will now turn the call over to Oliver great.

Oliver Graham: Thanks, Stephen.

Oliver Graham: Thanks Steven.

Oliver Graham: ... Our Q1 performance represents a strong start to the year, with 6% global shipments growth and 16% adjusted EBITDA growth versus the prior year, ahead of initial guidance and reflecting a strong performance across our business. Adjusted EBITDA growth in the quarter was driven by higher volumes and improved fixed cost absorption. The quarter also finished strongly, particularly in the Americas. Against the backdrop of a highly dynamic macro environment, this performance is testament to the resilience of our business, its well-balanced portfolio of customers and end markets, and the attractiveness of the beverage can as a packaging choice for our customers. At the current time, we anticipate minimal impact to our business arising from the tariff measures announced. In North America, we have no can-making operations outside of the United States.

Oliver Graham: Our Q1 performance represents a strong start to the year, with 6% global shipments growth and 16% adjusted EBITDA growth versus the prior year, ahead of initial guidance and reflecting a strong performance across our business. Adjusted EBITDA growth in the quarter was driven by higher volumes and improved fixed cost absorption. The quarter also finished strongly, particularly in the Americas. Against the backdrop of a highly dynamic macro environment, this performance is testament to the resilience of our business, its well-balanced portfolio of customers and end markets, and the attractiveness of the beverage can as a packaging choice for our customers. At the current time, we anticipate minimal impact to our business arising from the tariff measures announced. In North America, we have no can-making operations outside of the United States.

Oliver Graham: Our first quarter performance represents a strong start to the year with 6% global shipments growth and 16% adjusted EBITDA growth versus the prior year.

Oliver Graham: Ahead of initial guidance and reflecting strong performance across our business.

Oliver Graham: Adjusted EBITDA growth in the quarter was driven by higher volumes and improved fixed cost absorption that goes to also finish strongly particularly in the Americas.

Oliver Graham: Against the backdrop of a highly dynamic macro environment. This performance is testament to the resilience of our business, it's well balanced portfolio of customers and end markets and the attractiveness of the beverage can packaging choice for our customers.

Oliver Graham: So at the current time, we anticipate minimal impact to our business arising from the tariff measures announced in North America, we have no kind of making operations outside the United States.

Oliver Graham: Across our global operations, our suppliers, customers, and end consumers are mostly regional in nature. Our customers' products are defensive, and beverage cans are typically resilient across economic cycles. In all our markets, the beverage can continues to gain share in our customers' packaging mix. Despite the uncertain macroeconomic environment, the can's attractiveness to our customers supports our expectations for continued favorable shipments growth. Secular trends, such as customer innovation favoring the beverage can, were strongly evident in Q1, and we are encouraged by our performance so far this year and our momentum into Q2. Before going through the results in further detail, briefly, I'll touch on the tariff situation. So while the situation remains uncertain, based on the current announcements, we do not anticipate a material impact to our business. Our customer contracts have robust pass-through mechanisms for LME and premiums.

Oliver Graham: Across our global operations, our suppliers customers and then consumer is it mostly regional in nature.

Oliver Graham: Our customers' products are defensive in beverage cans are typically resilient across economic cycles.

Oliver Graham: In all our markets. The beverage can continues to gain share in all customers packaging mix.

Oliver Graham: Despite the uncertain macroeconomic environment, the cabinet attractiveness to our customers supports our expectations for continued favorable shipments growth.

Oliver Graham: Secular trends such as customer innovation favoring the beverage can.

Oliver Graham: Strongly evident in the first quarter.

Oliver Graham: And we are encouraged by performance so far this year and the momentum into the second quarter.

Oliver Graham: Before going through the results in further detail briefly I'll touch on the tariff situation. So while the situation remains uncertain based on the current amount since we do not anticipate a material impact to our business.

Oliver Graham: Customer contracts every bus pass through mechanisms rather me in premiums. In addition, A&P and our customers are largely hedged domestic exposure to mitigate short term volatility.

Oliver Graham: In addition, AMP and our customers are largely hedged on metal exposure to mitigate short-term volatility. Specifically in the US, the increase in the Midwest premium represents a minimal impact to the overall retail cost of the beverage can, less than $0.01, and this recent increase has also been offset by the decline in the LME price. Our supply chain and customer filling locations are regional in nature. Again, looking specifically at the US market, our can sheet is largely sourced domestically, and end consumption of our customers' products mostly occurs within market. We do not import empty cans, and our indirect exposure to customers' filled beverage can imports into the US is very low. Now, looking at AMP's Q1 results by segment.

Oliver Graham: Specifically in the U S. The increase in the Midwest premium represents a minimal impact to the overall retail cost of the beverage can less in one sentence and this recent increase so those have been offset by the decline in the <unk> price.

Oliver Graham: Our supply chain and customer filling locations are regional in nature again, looking specifically at the U S market can.

Oliver Graham: Can sheet is luxury stores domestically and then consumption of our customers' products, mostly because of the market.

Oliver Graham: Do not import empty cabins, and our indirect exposure to customers filled beverage can imports into the U S is very long.

Oliver Graham: Now looking at IMTT quota one results by segment in Europe first quarter revenue increased by 10% to $528 million, so 14% on a constant currency basis compared with the same period in 2024, principally due to volume growth in the posture at higher cost to customers.

Oliver Graham: In Europe, Q1 revenue increased by 10% to $528 million, or 14% on a constant currency basis compared with the same period in 2024, principally due to volume growth in the pass-through of higher input cost to customers. Shipments grew by 5% for the quarter, ahead of our expectations, as the beverage can continues to take share in our customers' packaging mix. Q1 Adjusted EBITDA in Europe increased by 14% to $49 million, or by 20% on a constant currency basis, driven by volume growth, stronger input cost recovery, and lower operating costs, mainly due to stronger fixed cost absorption. Our positive early start to the year supports our expectation for shipments growth of 3% to 4% for full year 2025.

Oliver Graham: Shipments grew by 5% for the quarter ahead of our expectations as the beverage can continues to take share in our customers' packaging mix.

Oliver Graham: First quarter adjusted EBITDA in Europe increased by 14% to $49 million or by 20% on a constant currency basis, driven by volume growth and stronger cost recovery and lower operating cost mainly due to stronger fixed cost absorption.

Oliver Graham: A positive early start to the year supports our expectation for shipments growth of 3% to 4% for full year 2025 capacity remains tight in the region, but the continued ramp up of our more recent installed capacity will support this growth.

Oliver Graham: Capacity remains tight in the region, but the continued ramp-up of our more recently installed capacity will support this growth. We do not ship any empty cans from Europe into the US, and from our customer dialogue, we estimate that our indirect exposure to customers' filled beverage can exports to the US is minimal, representing only a very low single-digit percentage of our European shipments. In the Americas, revenue in Q1 increased by 12% to $740 million, which reflected higher volumes and the pass-through of higher input cost to customers. Americas Adjusted EBITDA for the quarter increased by 16% to $106 million, due to favorable volume growth, positive mix effects, and lower operating costs. In North America, shipments increased by 8% for the quarter, reflecting our portfolio's mix of attractive and growing customers and product categories.

Oliver Graham: We do not ship any empty cabins from Europe into the U S from our customer dialogue, we estimate that our indirect exposure to customers filled beverage kind of exports to the U S is minimal representing only a very low single digit percentage of our European ship.

Oliver Graham: In the Americas revenue in the first quarter increased by 12% to $740 million, which reflected higher volumes and the posture of higher input costs to customers.

Oliver Graham: Adjusted EBITDA for the quarter increased by 16% to $106 million due to favorable, but I'm very positive mix effects and lower operating costs.

Oliver Graham: In North America shipments increased by 8% for the quarter, reflecting a portfolio mix of attractive and growing customers and product categories.

Oliver Graham: Market demand for non-alcoholic beverages was strong in the quarter, supported by continued strengthening in promotional activity, and we believe that we outperformed the market, growing ahead of scanner data. This included strong double-digit growth in our energy drinks category. Given our strong shipments performance in Q1 and continued momentum into the second quarter, we are increasing our guidance for full-year North America shipments growth from at least low single-digit to mid-single-digit growth. In Brazil, first quarter beverage can shipments increased by 4%, outperforming the industry, which grew only modestly. Following a soft start across the first two months of the year, both AMP and the industry recorded strong growth in March, boosted by strong demand from carnival celebrations. We retain our guidance for full-year shipments growth for Brazil of a low single-digit percent.

Oliver Graham: Market demand for nonalcoholic beverages was strong and Nicola supported by continued strength in your promotional activity and we believe that we outperformed the market growing ahead of scanner data.

Oliver Graham: This included strong double digit growth in our energy drinks category.

Oliver Graham: Given our strong shipments of homes in Q1 and continued momentum into the second quarter, we are increasing our guidance for full year North America shipments great from at least low single digit to mid single digit growth.

Oliver Graham: In Brazil first quarter beverage can shipments increased by 4% outperforming the industry, which grew only modestly following a stop start across the first two months of the year, both A&P and industry recorded strong growth in March boosted by strong demand from Carnival celebrations.

Oliver Graham: We retain our guidance for full year shipments to Brazil, or a low single digit percent. This maintains our cautious outlook. Despite a positive start to the year to reflect the volatility and industry shipment trends over the last couple of quarters.

Oliver Graham: This maintains our cautious outlook, despite our positive start to the year, to reflect the volatility in industry shipment trends over the last couple of quarters. We are also now entering the quieter winter selling period in Brazil, which naturally limits our full year visibility. In summary, we expect shipments growth in the Americas segment of a low to mid single-digit percentage for 2025, an increase from our previous guide of at least low single digits. I'll hand over now to Stefan to talk through our financial position before finishing with some concluding remarks.

Oliver Graham: We're also now answering the quad the winter selling period in Brazil, which naturally limits our full year visibility.

Oliver Graham: In summary, we expect shipments growth in the Americas segment at a low to mid single digit percentage for 2025, an increase from our previous guide of at least low single digits.

Oliver Graham: I'll hand over to Stefan spoke to our financial position before finishing with some concluding remarks.

Stefan Schellinger: Thanks, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $570 million. The reduction in our liquidity versus the end of last year reflects the usual seasonal working capital outflow in the first quarter. We note that in addition to our strong liquidity position, we have no near-term bond maturities. Also, the currency mix of our debt broadly matches the currency mix of our earnings. Net leverage of 5.5x net debt over the last twelve months Adjusted EBITDA similarly reflect the seasonality of our working capital movements. Given the strength of our Adjusted EBITDA growth, our leverage ratio is much improved versus the 6.2x reported in Q1 2024.

Stefan Schellinger: Thanks Ali and good morning, and good afternoon, everyone. We ended the quarter with a robust liquidity position of $570 million the reduction of our liquidity by the end of last year reflects the usual seasonal working capital outflow in the first quarter.

Stefan Schellinger: We note that in addition to our strong liquidity position that we have no near term bond maturities also the currency mix of our debt broadly matches the currency mix of our earnings.

Stefan Schellinger: Net leverage of five five times net debt over the last 12 months adjusted EBITDA. Similarly reflects the seasonality of our working capital movements.

Stefan Schellinger: Given the strength of all adjusted EBITDA growth our leverage ratio is much improved versus a $6 two times reported in Q1 2024.

Stefan Schellinger: In line with our improved outlook for Adjusted EBITDA, our expectation for adjusted free cash flow for 2025 has increased to at least $150 million. In terms of the various components of the free cash flow, our expectations are most in line with what we said in February. We still expect maintenance CapEx of around $135 million, lease principal repayments of approximately $100 million, cash interest to increase to just over $200 million, and small exceptional cash outflows of less than $10 million. Our expectations have slightly changed for the following cash flow items, and we now expect slightly lower cash tax of approximately $45 million.

Stefan Schellinger: In line with our improved outlook for adjusted EBITDA, our expectation for adjusted free cash flow for 2020 has increased to at least $150 million.

Stefan Schellinger: In terms of the various components of the free cash flow our expectations are mostly in line with what we said in February we still expect maintenance capex of around $135 million lease principal repayments of approximately $100 million.

Stefan Schellinger: Cash interest to increase to just over $200 million and small exceptional cash outflows of less than $10 million.

Stefan Schellinger: Our expectations have slightly changed for the fall and cash flow items, and we now expect slightly lower cash tax of approximately $45 million.

Stefan Schellinger: Still, it's more about reduced outflow and working capital, and slightly higher growth CapEx of around $70 million, given the acceleration of the timing for certain high return projects, generating new and more flexible capacity in our European business. Our current expectations for future annual growth CapEx are unchanged in the range of $50 to 60 million. We have today announced our quarterly ordinary dividend of $0.10 per share, and there's no change to our capital allocation policy. And with that, I hand it back to Ollie.

Stefan Schellinger: So it's more that reduce outflow in working capital and slightly higher gross capex of around 70 million given the acceleration of the timing for certain high return projects generating new and more flexible capacity in our European business.

Stefan Schellinger: Our current expectations for future annual growth Capex unchanged in the range of $50 million to $60 million.

Stefan Schellinger: We have today announced a quarterly ordinary dividend of <unk> 10 per share and there is no change to our capital allocation policy.

Ali: And then back to Ali.

Oliver Graham: Thanks, Stefan. So before moving to take questions, I'll just recap on AMP's performance and key messages. So firstly, Adjusted EBITDA growth in Q1 of 16% was ahead of guidance, underpinned by global shipments growth of 6% and a strong performance in each of our regions. We anticipate minimal impact to our business arising from the current tariff measures announced so far, as our suppliers, customers, and end consumers are all typically regional in nature. The beverage can continues to outperform other substrates in our customers' packaging mix, supporting our growth. So reflecting our strong start to the year and recent favorable currency movements, and assuming no further adverse change to the current macro environment, we are upgrading our full-year guidance.

Ali: Thanks, Devin, let's say before maybe it's take questions I'll just recap on A&P is performance and key messages. So firstly adjusted EBITDA growth in the first quarter of 16% was ahead of guidance underpinned by global shipments growth of 6% and a strong performance in each of our regions, we anticipate minimal impact to our business arising from the current tariff measures announced.

Ali: As our suppliers customers and end consumers are all typically regional in nature.

Ali: The beverage can continues to outperform other substrates in our customers' packaging mix supporting our growth.

Ali: So, reflecting our strong start to the year and recent favorable currency movements and assuming no further adverse change to the current macro environment. We are upgrading our full year guidance. We now expect shipments Ryan P squared between <unk>, 4%, which compares with our initial guidance range of between two and 3%.

Oliver Graham: We now expect shipments for AMP to go between 3 to 4%, which compares with our initial guidance range of between 2 and 3%. Full year adjusted EBITDA is now expected to be in the range of $695 to 720 million, with the upgrade split between improved underlying business performance, and a more favorable currency outlook based on current FX rates. In terms of guidance for Q2, adjusted EBITDA is expected to be in the range of between $195 and 205 million, ahead of the prior year of $178 million. Having made these opening remarks, we'll now proceed to take any questions you may have.

Ali: Full year adjusted EBITDA is now expected to be in the range of $695 million to $770 million with the upgrade split between improved underlying business performance and a more favorable currency outlook based on current FX rates in terms of guidance for the second quarter. Adjusted EBITDA is expected to be in the range of between 195 and two.

Ali: <unk> hundred $5 million ahead of the prior year of $178 million, having made these opening remarks.

Ali: We will now proceed to take any questions you might have.

Operator: Thank you. If you would like to ask a question, you may signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, star one for questions. We'll go first to Anthony Pettinari with Citi.

Speaker Change: Thank you if you would like to ask a question you may signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our AR.

Speaker Change: Quit met.

Speaker Change: Once again star one for questions well go first to Anthony Pettinari with Citi.

Anthony Pettinari: Good morning. I'm wondering-

Anthony Pettinari: Good morning. I'm wondering.

Speaker Change: Good morning.

Speaker Change: I'm wondering if you could talk about Hey, Hey, good morning, I Wonder if you could talk about April.

Oliver Graham: Good morning.

Anthony Pettinari: Hey, hey, good morning. I'm wondering if you could talk about April, you know, kind of month-to-date trends, and specifically after the, you know, Liberation Day announcements, which I guess was the second. Did you see any change, you know, either from channel partners, suppliers, end consumers, in terms of people pulling back or order behavior or just kind of any change in behavior? And then, you know, understanding you don't have much direct impact to tariffs, do you think, you know, of maybe inflation-stressed consumer could, you know, could impact demand for Bev cans?

Speaker Change: Month to date trends and specifically after the.

Speaker Change: Liberation day announcements, which I guess it was the second did you see any change either from channel partners suppliers and consumers in terms of people pulling back or order behavior or just kind of any any change in behavior.

Speaker Change: And then you know.

Speaker Change: Understanding you don't have much direct impact of tariffs do you think you know maybe an inflation stressed consumer could.

Speaker Change: Could impact.

Speaker Change: Demand for for for Bev cans.

Oliver Graham: Sure. No, I mean, I think the answer to the first question is definitely not. We haven't seen any change in April. In fact, one of the reasons, you know, we're upgrading guidance is because of a continued momentum of our sales into April, particularly in North America, where, you know, the growth is pretty broad-based. You know, we've seen a lot of inflation go into the North American beverage can market in the last few years, and in fact, it's been moderating. And at the moment, we're not seeing, you know, direct inflationary impacts from the tariffs.

Speaker Change: So no I mean, I think the answer to the first question is definitely no. We haven't seen any change in April in fact, one of the reasons. We're updating guidance is because of our continued momentum above sales into April, particularly in North America.

Speaker Change: Well you know that.

Speaker Change: It's pretty broad based.

Speaker Change: We've seen a lot of inflation go into the North American beverage can market in the last few years and in fact, it's been moderating.

Speaker Change: And at the moment, we're not seeing a direct inflationary impacts from the tariffs I mean I mentioned.

Oliver Graham: I mean, I mentioned in the prepared remarks that if you play through the increase in the Midwest premiums coming from the tariffs, you get to sort of around a $0.01 increase in the retail cost of the can, which I think is a number that's been, you know, talked about pretty broadly. But then, with the overall economic backdrop, you know, we're seeing LME falling. So if you were buying today, you're not far off, roughly the aluminum cost you were, you know, before any of these announcements. Now, as I also said in the remarks, Anthony, I think, you know, most people will be hedged for this year, so would it be unlikely it has a significant effect for this year anyway? So, you know, we're not, as I say, anticipating any major impacts from the current set of announcements.

Speaker Change: In the prepared remarks that if you play through the increase in the Midwest premiums coming from the tower. So you get to sort of around the one.

Speaker Change: Increase in the retail cost of the can which I think is the number that's been talked about pretty broadly, but then with the overall economic backdrop.

Speaker Change: Seeing <unk> falling so if you were buying today, you're not far off roughly the Dominion costs. You are before any of these announcements now as I also said in the remarks and is now I think.

Speaker Change: Most people will be hedged for this year.

Speaker Change: It would be unlikely as a significant effect for this year anyway. So.

Speaker Change: We're not anticipating any any major impacts from the current set of announcements obviously things can change in this environment, but as we as we sit here today, we don't see any.

Oliver Graham: Obviously, things can change in this environment, but as we sit here today, we don't see any big impact on the business.

Speaker Change: Big impact on the business.

Anthony Pettinari: Got it. Got it. And then just zooming in on North American energy, are you confident that that's kind of turned the corner? Or, you know, given some of the challenges you saw last year, can you maybe give a little bit more color on energy and kind of where you think that end market is?

Speaker Change: Got it got it and then just zooming in on North American energy.

Speaker Change: Can you are you confident that that it is.

Speaker Change: Kind of turned the corner or given some of the challenges you saw last year can you maybe give a little bit more color on energy and kind of where do you think.

Speaker Change: The debt.

Speaker Change: That end market is.

Oliver Graham: Yes, I mean, I would be quite confident, actually. I think that, and the reason for that is that the growth is pretty broad-based across our customer base. We're seeing it, you know, with the more traditional energy players, we're seeing it with the newer players. We've got a lot of growth with some of the more innovative players in the space. So it does seem to be quite a broad-based recovery. I think I was always confident that it was a strong category with strong players who would get back on the innovation train. They've been pushing, clearly been pushing a bit more on price, and last year looks like a bit of a breather after some, you know, some big growth in the previous few years.

Speaker Change: Yes.

Speaker Change: Would be quite confident actually I think the reason for that is that the growth is pretty broad based across our customer.

Speaker Change: Customer base, we're seeing it with the more traditional LNG players are saying with the newer players we've got a lot of growth with some of the more innovative.

Speaker Change: Players in this space. So it does seem to be quite a broad based recovery I think I was always confident that.

Speaker Change: It's a strong category with strong players who would get back on the innovation train they've been pushing clearly been pushing a bit more on price.

Speaker Change: Last year, it looks like a bit of a breather after some.

Speaker Change: Some big growth in the previous few years.

Oliver Graham: Obviously, we're still early in the year, so I mean, I you know do have to sound you know a note of caution that we haven't been through the summer season yet. You know, some of what we're seeing in our numbers is inventory build. So I think until we go through the summer, we won't know the full picture. But, you know, from where we're sitting today and with the trends that we're seeing in April and the way customers are talking about Q2, it does look like the category has turned the corner.

Speaker Change: Obviously, we're still early in the year.

Speaker Change: Do you have to sound a note of caution that we haven't been through the summer season, yet some of what we're seeing in our numbers it is inventory build.

Speaker Change: So I think until we go through the summer we won't know the full picture of it from where we're sitting today and with the trends that we're seeing in April in the way customers are talking about Q2. It does look like the category has turned the corner.

Anthony Pettinari: Okay. That, that's very helpful. I'll turn it over.

Speaker Change: Okay. That's very helpful I'll turn it over.

Oliver Graham: Thanks, Anthony.

Anthony Pettinari: Thanks Anthony.

Operator: Thank you. We'll take our next question from Stefan Diaz with Morgan Stanley.

Speaker Change: Thank you we'll take our next question from Stefan <unk> with Morgan Stanley.

Stefan Diaz: Hello, everybody, and congrats on a good quarter. Thanks for taking my questions. Maybe, Oli, you, you continue to sound confident as far as there being limited impact on your volumes from tariffs. Maybe how do you think about the potential, you know, substrate switch risk, just given, you know, the increased premium in the US? And then maybe, the strength in Q1 numbers, do you, you know, do you allocate any of that to a pull forward in demand ahead of potential tariffs?

Speaker Change: Hello, everybody and congrats on a good quarter. Thanks for taking my questions.

Speaker Change: Maybe already you.

Speaker Change: Continue to sound confident.

Speaker Change: As far as they're being limited impact on your volumes from tariffs.

Speaker Change: Maybe how do you think about the potential substrate switch risk just given the increased premium in the U S and then maybe.

Speaker Change: The strength in <unk> numbers.

Speaker Change: Do you allocate any of that to a pull forward in demand out of potential tariffs.

Oliver Graham: So taking that second one first, no, I, I don't think we see any pull forward from what we're, you know, hearing from the customer base and what we're seeing. I mean, most of our customers are pretty just in time, you know, in the way that they operate their businesses. Obviously, we're, we're building inventory for them in some situations, but, you know, I don't get the feeling that consumers are stockpiling, you know, soft drinks, to be honest. And that's certainly. We've had no feedback on that. So what we could be seeing is people building inventory for, you know, the anticipation of a strong summer season, and sometimes that doesn't play through exactly how our customers, you know, expect.

Speaker Change: So taking that second one first no I don't think we see any pull forward from what we did in.

Speaker Change: We're hearing from the customer base and what we're seeing in most of our customers are pretty just in time and in a way that they operate their businesses.

Speaker Change: Obviously, we were building inventory for them in some situations but.

Speaker Change: I didn't get the feeling that consumer stockpiling in a soft drink to be honest and that certainly we've had no feedback on that.

Speaker Change: So what we could be seeing is people building inventory for the anticipation of a strong summer season, and sometimes that doesn't play through exactly how our customers expect and sometimes we do that we'll see a bit less growth back into Q2 Q3, if the summer doesn't fully play out.

Oliver Graham: Sometimes we do, therefore, see a bit less growth, you know, at the back end of Q2 or Q3 if the summer doesn't fully play out. But I don't think we're seeing any pull forward that we're aware of from the tariff situation. And then, yeah, the substrate switch, I think, honestly, is a bit overplayed. You know, as I said, I think there's some increase in premiums, but mostly major players will be hedged. We're certainly hedged for this year. And then with the LME coming down, you know, the overall cost of the can is actually pretty unchanged from a metal perspective. So I don't see this driving any particular substrate shift. And to be honest, what we see in our numbers in all our markets is that actually we're the ones benefiting still from substrate shift.

Speaker Change: But other than you were seeing any pull forward that we're aware of from the tariff situation and then yes. The substrate switch I think honestly is a bit overplayed.

Speaker Change: As I said I think there's some increase in premiums, but mostly major players will be hedged with that.

Speaker Change: The hedged for this year, and then with the enemy coming down the overall cost of the Kennedy is actually pretty unchanged from a metals perspective.

Speaker Change: So I don't see this driving any particular substrate shift and to be honest, what we see in our numbers in all our markets as the actually were the ones benefiting still from substrate shift.

Oliver Graham: You know, I talked about the innovation trend. That's very significant in North America. I think sustainability is still a tailwind. The efficiency and cost position of the can is still a tailwind. At the moment, we remain positive that we're the right side of substrate shifts in beverage packaging.

Speaker Change: I talked about the innovation trend that's very significant in North America, I think sustainability is still a tailwind the efficiency.

Speaker Change: Cost position that they can still a tailwind at the moment, we remain positive that we're the right size of substrate shifts in beverage packaging.

Stefan Diaz: That's very helpful. Thanks. And then, maybe for my second question, so you had the customer mix drag on your volume numbers for the past couple of quarters in Brazil. You know, for Q1, it came in better than we were modeling. You know, maybe what are you seeing down there in the region? And, you know, is the customer mix issue sort of behind us going forward? Thanks.

That's very helpful. Thanks, and then maybe for my second question.

Speaker Change: So you had the customer mix drag on your volume numbers for the past couple of quarters in Brazil.

Speaker Change: For <unk> came in better than we were modeling maybe what are you seeing down there in the region and as a customer mix issue sort of behind us going forward.

Oliver Graham: Yeah. I think it's still volatile. So, you know, certainly January, February, were up and down, but then March, as I mentioned, was really strong for the industry, and particularly for us as well. I think Carnival went well, and so, you know, customers were rebuilding after that, which is a good sign. And then, yes, you know, we were sitting on the right side of the customer mix. I think we're maintaining some caution, as I mentioned in the remarks. I think we've had volatility, the market's had volatility the last six, nine months, so, you know, although we've had a positive start, we're not really changing our guidance at this point for Brazil, reflecting, you know, a bit of caution, you know, to make sure that those situations are fully behind us.

Speaker Change: Yes, I think it's still volatile.

Speaker Change: Certainly January February were up and down but that March as I mentioned was really strong for the industry and particularly for us as well I think carnival went well and so customers are rebuilding after that which is a good sign.

Speaker Change: And then yes, we were sitting on the right side of the customer mix I think.

Speaker Change: We're maintaining some caution as I mentioned in the remarks I think.

Speaker Change: We had volatility the markets had volatility the last six nine months.

Speaker Change: Although we've had a positive start.

Speaker Change: Not really changing our guidance at this point for Brazil.

Speaker Change: Reflecting a bit of caution to make sure that those those situations are fully behind us, but look long term money.

Oliver Graham: But look, long term, I think, you know, it remains a very attractive market for beverage cans, and we still anticipate good growth there. I think we're just being cautious on 2025 still at this point.

Speaker Change: <unk> is a very attractive market for beverage cans and we still anticipate good growth that I think we're just being cautious on 2025 still at this point.

Stefan Diaz: Great. Thanks. Maybe if I could just sort of slip in one, one more here. Does Brazil use the Midwest premium for pricing, or, or, or is it more of a local premium? Thanks, and I'll turn it over.

Speaker Change: Great. Thanks, maybe if I could just sort of flip in one one more here.

Speaker Change: It does it Brazil use the Midwest premium.

Speaker Change: Pricing or is it more of a local premium.

I'll turn it over.

Oliver Graham: So there's a mix, and then there's also whether it's duty paid or duty unpaid. So there's some impact of the Midwest premium in Brazil, though, as I say, there's a mix of situations going on there. But obviously, one very beneficial impact for Brazil at the minute is the devaluation of the dollar, which reduces overall metal costs for our customers in Brazil. So, that's, that's been very good news the last few weeks.

Speaker Change: So theres a mix.

Speaker Change: And then this.

Speaker Change: So whether it's due to paid or duty unpaid. So there is some impact.

Speaker Change: The impact of the <unk>.

Speaker Change: <unk> premium in Brazil.

Speaker Change: Though as I say it is a mix of situations going on there, but obviously, one very beneficial impact for Brazil at the minute is that the the.

Speaker Change: The devaluation of the dollar.

Speaker Change: Which reduces overall medical costs for our customers in Brazil. So.

Speaker Change: That's been very good news the last few weeks.

Operator: Thank you. We'll take our next question from George Staphos with Bank of America.

Speaker Change: Thank you we'll take our next question from George Staphos with Bank of America.

George Staphos: Thanks very much, everyone. Good morning. Thanks for the details. Hey, Oli, so you know, it's great that you're raising guidance and the outlook is better for the year. You know, as you sit back and think about where you were, I don't know, two, three months ago, is it that your customers are seeing a better development in their volume and that's then flowing to you? Is it that they were relatively constructive on the year but, you know, given the volatility that we've seen in the markets the last two, three years, you wanted to keep a little bit in reserve until you saw, you know, so to speak, the whites of their eyes? You know, as you think about it, what was the one or two things that drive the better-than-expected outlook for the year as you think about it?

George Staphos: Thanks, very much everyone. Good morning, thanks for the details.

George Staphos: So you know, it's great that you're raising guidance and the outlook is better for the year.

George Staphos: You sit back and think about where you were I don't know two three months ago.

Speaker Change: Is it that your customers are seeing a better development in their volume and that's then flowing to you is it that they were relatively constructive on the year, but you know given the volatility that we've seen in the markets. The last two three years you wanted to keep a little bit in reserve until you saw them.

Speaker Change: To speak the whites of their eyes now as you think about it what was the one or two things that drive the better than expected outlook for the year as you think about it.

Oliver Graham: ... Yeah. Hi, George. Look, I think it, particularly North America, the strength of some of the customers, in some key categories for us, so energy, sparkling water-

Oliver Graham: Yeah. Hi, George. Look, I think it, particularly North America, the strength of some of the customers, in some key categories for us, so energy, sparkling water-

Speaker Change: Yeah.

Speaker Change: Look I think particularly North America and the.

Speaker Change: The strength of some of the customers.

Speaker Change: In some key categories for us so LNG sparkling water.

George Staphos: Yep.

Oliver Graham: Some of the cocktails, some of the health and wellness drinks, the gut health drinks, you know, some very innovative younger customers, and then also some are more established. But I think it's that portfolio; it does have growth and upside in it, but you can't always predict it, because it is a mix of customers with some really innovative new players in there. So I think that's the key thing that's going on this year, which is some of those players and some of those categories have performed ahead of our expectations. And I think, you know, to be honest, theirs as well, in terms of the sort of guidance we had at the beginning of the year.

Speaker Change: Some of the cocktails.

Speaker Change: The health and wellness strength, the gut health drinks.

Speaker Change: Some very innovative younger customers and then also some of them are established but.

Speaker Change: I think its the that portfolio it does have growth and upside in it but you can't always predict it.

Speaker Change: Because it is a mix of customers with some really innovative new players in that so I think that thats the key.

Speaker Change: Key thing that's going on this year, which is some of those players and some of those categories that performed ahead of <unk>.

Speaker Change: Alright expectations, and I think to be honest, there's as well.

Speaker Change: In terms of the sort of guidance, we had at the beginning of the year.

Oliver Graham: And as I say, you know, you never quite know in Q1 what you're looking at, but I think that the continuing momentum into April and the sort of messages we're getting on the outlook for Q2 looks pretty positive. So I think that's the core piece to this and to the upgrade. Obviously, FX is also a piece to the upgrade. And then I think, you know, we're also feeling good about the way the year has started in Brazil and Europe. You know, we haven't upgraded anything there, but certainly it's been a very solid start relative to our expectations. And so that also gave us the confidence, I think, to say, you know, there's enough here, despite the very volatile macro environment, to see an upgrade to, you know, Q2 and the full year.

Speaker Change: And as I say you never quite know in Q1, what you are looking at but I think the continued momentum into April and the sort of messages we're getting.

Speaker Change: On the outlook for Q2 looks pretty positive. So so I think that's the core piece to this and to the upgrade obviously FX has is also a piece to the upgrade and then I think.

Speaker Change: We're also feeling good about the way the year started in Brazil and Europe.

Speaker Change: Haven't upgraded anything there.

Speaker Change: He has been a very solid start relative to our expectations and so that also gave us the confidence I think to say, yes. There is enough here, despite the very volatile macro environment.

Speaker Change: To see.

Speaker Change: Great.

Speaker Change: Q2, and the full year, but I think at the heart of it is the very strong North American performance, which is I think.

Oliver Graham: But I think at the heart of it is the very strong North American performance, which is, I think, you know, a testament to the portfolio we've built there, both of customers and the categories we're operating in.

Speaker Change: Testament to the portfolio that we build that base of customers and the categories. We're operating in.

George Staphos: Olly, that's great, and I really appreciate the detail there. If I can just dig in on one thing. On the products like energy, sparkling water, the gut health drinks, if you will, is it from what you're hearing from your customers or what you're seeing, is it a proliferation of new labels? Or is it those existing products that were in those categories are actually gaining share of stomach with the consumer in terms of what's moving the needle? Again, to the extent that you have a view on that. Second question and third question, I'll turn it over. I know what in the fourth quarter guide, you were expecting, I think, some margin compression in Europe because of PPI effects and some cost increases. How are those playing out again in Europe?

Speaker Change: Oh, that's great I really appreciate the detail there if I can just dig in on one thing on the products like energy sparkling water.

Speaker Change: The gut health drinks. If you will is it from what you're hearing from your customers or what you're saying is.

Speaker Change: Is it a proliferation of new labels.

Speaker Change: Or is it those existing products that were in those categories are actually gaining share of stomach with the consumer in terms of.

Speaker Change: What's moving the needle again to the extent that you have a view on that second question and.

Speaker Change: Third question I'll turn it over I know what.

Speaker Change: In the fourth quarter Guide you were expecting I think some margin compression in Europe, because of PPI effects and some cost increases how are those playing out again in Europe, and then well it's not a huge factor.

George Staphos: And then, while it's not a huge factor, you did up the growth CapEx number for this year. That's good. Where are you finding that you need to do that? Thanks, and I'll turn it over.

Speaker Change: You did up the growth Capex number for this year that's good.

Speaker Change: Or are you finding that you need to do that thanks, and I'll turn it over.

Oliver Graham: Yeah. Thanks, George. I think on the question of what's really driving the growth, we're seeing some existing products that have been in the market, you know, really driving strongly. So it's not just completely new labels, new products, but we have got some, you know, really innovative young companies in there as well that are spiking. So I think we've got a mix of both, and our portfolio is exposed to both through, you know, directly, but also through distributor relationships that work well for us. So I think it's a bit of both, but I think, again, testament to the way our customers are putting more and more innovation in the can and are really trying to drive their innovation through beverage cans.

George Staphos: Yeah. Thanks George.

Speaker Change: I think on the question of what's really driving the growth that we're seeing some existing products that have been in the market.

George Staphos: You know really driving strongly.

George Staphos: So it's not just completely new labels new products, but we have got some.

George Staphos: <unk> young companies in there as well.

Speaker Change: Ah spiking.

George Staphos: I think we've got a mix of both in our portfolio is exposed to both through.

Speaker Change: Directly but also through distributor relationships.

Speaker Change: Well for us so I think it's a bit of both but I think again testament to the way cut.

Speaker Change: Customers are putting more and more innovation in the can and are really trying to drive their innovation through three beverage cans.

Oliver Graham: On the Europe question, yes, look, there still is some headwinds in our Europe numbers this year from the increased aluminum conversion costs and the fact that PPI went negative coming into this year. But it's true that in Q1, we had a slightly better performance than expectations through really, really good input cost management on the energy side and the metal side. So good work by the team to control those costs, manage mix, and really drive, you know, everything that we could out of those categories to improve our results. So we did have some upside there, but that's not to say that, you know, in our overall numbers, there isn't still some headwind on the PPI and aluminum conversion cost.

Speaker Change: On the Europe question, Yes, there still is some headwinds in all your numbers. This year from the increased minimum conversion costs and the fact that PPI went negative coming into this year, but it's true that in Q1, we had a slightly better performance than expectations through really really good input cost management on the energy.

Speaker Change: The metal side, so good work by the team.

Speaker Change: To control those costs manage mix and really drive everything that we could out of those categories to improve our results. So we did have some upside there, but thats not to say that.

Speaker Change: Overall numbers, there isn't still some headwind on the PPI and our lead conversion cost.

Oliver Graham: And then, yeah, I think the growth CapEx, I mean, it's not a big increase, but I think it's reflecting the fact that if you look at our European business now, it's pretty tapped out. We're probably running in the high 90s utilization. We're ramping up capacity this year from the projects that were not complete, and we're also debottlenecking and, you know, improving performance in other plants. But we're seeing, as we look out, you know, a year or two, that that's not gonna be enough for the growth in Europe. And therefore, we are starting to target some high return projects that increase both the capacity, but also the flexibility of our capacity. So I think it's a good sign. You know, we're seeing other of our peers announcing additional capacity for Europe.

Speaker Change: And then yes, I think the growth capex.

Speaker Change: The increase but I think it's reflecting the fact that if you look at our European business now, it's pretty tapped out.

Speaker Change: Probably running in the high Ninety's utilization, we're ramping up capacity this year from the projects that were not complete them.

Speaker Change: Also debottlenecking and an improving performance in other plants, but we are seeing.

Speaker Change: As we look out.

Speaker Change: Year or two that that's not going to be enough for the growth in Europe and that but.

Speaker Change: But we are starting to target some high return projects that increased both the capacity, but also the flexibility of our capacities.

Speaker Change: A good sign that we're seeing other about payers announcing additional capacity for Europe. I mean, Europe is nearly 100 billion can market now so if it goes 3% and eight 3 billion a year to keep the satisfied so it's not surprising I think that.

Oliver Graham: I mean, Europe's nearly a 100 billion can market now, so if it grows 3%, you need 3 billion a year to keep it satisfied. So it's not surprising, I think, that we and our peers are putting in little bits of incremental capacity into the market to make sure we can serve that growth.

Speaker Change: We and our peers are putting in a little bit of incremental capacity into the market to make sure. We can we can serve that growth.

George Staphos: Thank you, Olly.

Speaker Change: Thank you Ali.

Oliver Graham: Thanks. Cheers, George.

Speaker Change: Thanks, Joe.

Operator: We'll take our next question from Mike Roxland with Truist Securities.

Speaker Change: We'll take our next question from Mike Rock, Mike Rocks with Securities.

Michael Roxland: Thank you, Olly, Stefan, and Stephen, for taking my questions, and congrats on a good quarter. Just wanted to follow up quickly on North America and what George is drilling down on. You know, 60% of your mix is CSD and sparkling water. Those categories did well last quarter. They seem to do well again this quarter. So the remaining 40% roughly is what? Energy, mixed cocktails, gut health drinks, and the like. It sounds like they just started to grow a lot more strongly than had been the case, and correct me if I'm wrong there, which is why your North American volumes were up. But anything around share gains, maybe customer contractual stipulation?

Mike Roxland: Thank you, Olly, Stefan, and Stephen, for taking my questions, and congrats on a good quarter. Just wanted to follow up quickly on North America and what George is drilling down on. You know, 60% of your mix is CSD and sparkling water. Those categories did well last quarter. They seem to do well again this quarter. So the remaining 40% roughly is what? Energy, mixed cocktails, gut health drinks, and the like. It sounds like they just started to grow a lot more strongly than had been the case, and correct me if I'm wrong there, which is why your North American volumes were up. But anything around share gains, maybe customer contractual stipulation?

Mike Rock: Thank you al and Steve for taking my questions and congrats on a good quarter.

Speaker Change: Just wanted to follow up quickly on North America, and what George is drilling down on.

Speaker Change: 60% of your mix is CSD and sparkling water.

Speaker Change: Quarter over quarter always did well last quarter, they seem to do well again this quarter. So the remaining 40% roughly is what energy mixed cocktails.

Speaker Change: Mike.

Speaker Change: It sounds like Dave just starting to grow a lot more strongly that had been the case and correct me if I'm wrong there.

Speaker Change: Which is why your north American volumes were up but anything about share gains maybe customer contractual stipulations, just trying to get a sense of how you went from being down, let's say, 3% last quarter when 60% of your mix, we're still growing two being up the way you were in <unk>.

Michael Roxland: I'm just trying to get a sense of all this, how you went from being down, let's say, a few percent last quarter, when 60% of your mix was still growing, to being up the way you were in Q1.

Mike Roxland: I'm just trying to get a sense of all this, how you went from being down, let's say, a few percent last quarter, when 60% of your mix was still growing, to being up the way you were in Q1.

Oliver Graham: Yeah. Hi, Mike. Yeah, good question. So I think, you know, you're right, Q4, sleek and specialty in those categories was not particularly strong for us. I think, it was both a customer mix issue, so we, in that quarter, we were a bit, the wrong side of some of the customers and, and which ones were growing. I think there was, must have been also some share, slippage in Q4, you know, relative to, to some of our peers, just in certain customer situations, which, you know, we think is being corrected this year. But we think it's mostly them in the market. You know, some of these are sole supply positions, where they're just performing extremely well. So we think that's a, a big part of it, which is that they're just having a, a much better year.

Mike Rock: Yeah, Hi, Mike Good question.

Mike Rock: And you're right Q4, sleek and specialty in those categories is not particularly strong for US I think it was both a customer mix issue. So we in that quarter, we were a bit.

Mike Rock: The wrong side of some of the customers and which ones are growing I think the must've been also some share.

Mike Rock: Slippage in Q4, and you know relative to some of our peers just in customer situations, which we think is being corrected this year.

Mike Rock: But we think it's mostly been in the market. Some of these adult supply positions, where they're just performing extremely well.

Mike Rock: So we think Thats, a big part of it which is just having a much better year.

Oliver Graham: You know, I think the category did, as I say, take a bit of a breather last year, got a bit overstocked in retail. Some of the innovation has not been working quite so well, so I think, you know, our customers went back to the drawing board on innovation, and worked on their portfolios. And they are clearly driving a bit of price promo activity up in the space. So I think it's a host of factors, but, but broadly, the energy market category, you can see, is, is back and growing. You can see that in the scanner data. And then, yeah, look, I think we're the right side of it in, in our customer mix this quarter relative to last quarter, and then maybe there's, you know, a little bit of share gain in there. Nothing dramatic.

Speaker Change: Yes, I think the category as I say took a bit of a breather last year it got a bit overstocked in retail.

Mike Rock: Some of the innovation is not working quite well so I think.

Speaker Change: Our customers went back to the drawing board on innovation.

Mike Rock: <unk> worked on their portfolios.

Mike Rock: Really driving a bit of price promo activity up in the space. So I think it's a host of factors, but broadly the energy category. You can see is is back in growth you can see that in the scanner data and then yeah look I think we're the right side of it and in our customer mix this quarter relative to last quarter and then maybe it is a.

A little bit of share gain in there nothing dramatic.

Michael Roxland: Got it. Got it. So thank you, Alex. And then just one quick follow-up. You know, and I know this question has been asked on prior calls, but I just wanted to get a sense for you as to the competitive landscape, particularly in North America. You have contracts; the industry more broadly has contracts that are coming up for renewal, 2026 and 2027. You have competitors who are trying to fill up their new capacity. You know, at the same time, the CPGs are being squeezed, given persistent volume weakness. You had one report this morning where volumes were down in North America 3-4%. I would assume that they would likely to get some of the price back that they gave up during when contracts were last negotiated, you know, five years ago.

Mike Roxland: Got it. Got it. So thank you, Alex. And then just one quick follow-up. You know, and I know this question has been asked on prior calls, but I just wanted to get a sense for you as to the competitive landscape, particularly in North America. You have contracts; the industry more broadly has contracts that are coming up for renewal, 2026 and 2027. You have competitors who are trying to fill up their new capacity. You know, at the same time, the CPGs are being squeezed, given persistent volume weakness. You had one report this morning where volumes were down in North America 3-4%. I would assume that they would likely to get some of the price back that they gave up during when contracts were last negotiated, you know, five years ago.

Speaker Change: Got it got it got it thank you Ali.

Mike Rock: One quick follow up.

Speaker Change: This question has been asked.

Mike Rock: On prior calls, but I just wanted to get a sense for you.

Mike Rock: The competitive landscape, particularly in North America, you have contracts at the industry more broadly has contracts that are coming up for renewal in 2006 and 2007.

Mike Rock: So we're trying to fill up their new capacity.

Mike Rock: Time, Cpg's are being squeezed given persistent volume weakness you had one report this morning, where volumes were down in North America, 34%.

Mike Rock: I would assume that he would like to get some of the price back did they gave up their own contracts with less negotiated deal five years ago. So just trying to get a sense of the competitive landscape.

Michael Roxland: So just trying to get a sense, you know, you know, of the competitive landscape and what you think is gonna happen with contract renewals and pricing, given a more dynamic, more competitive environment.

Mike Roxland: So just trying to get a sense, you know, you know, of the competitive landscape and what you think is gonna happen with contract renewals and pricing, given a more dynamic, more competitive environment.

Mike Rock: You seem to have it with contract renewals and pricing.

Mike Rock: Given a more dynamic more competitive environment.

Oliver Graham: Yeah, look, I think, you know, I think the first thing to say is that if you look at 12-ounce pricing over the cycle, it's not that it dramatically moved in COVID times. I mean, it did strengthen, and we talked about that. But I think the big area where there was better pricing was clearly in specialty with the, you know, the very strong growth in sleek. So I don't think that there's something particular for our customers to go after in the 12-ounce space, frankly, in terms of our margin profile. And then I look at, therefore, the competitive environment and the way these are playing out, and I don't, at this time, see any, you know, material risk to the business, you know, in volumes or margins. And I think discussions are progressing well.

Mike Rock: Yes look I think.

Mike Rock: I think first thing to say.

Mike Rock: If you look at 12 ounce pricing over the cycle.

Mike Rock: It's not that it dramatically moved in and Covid times I mean, it did strengthen and we talked about that but I think the big.

Mike Rock: Area, whether it was with better pricing is clearly in specialty with the you know that.

Mike Rock: Very strong growth in sleep, so I don't think that Theres something in particular for our customers to go after in the 12 ounce space frankly in terms of our margin per ton.

Mike Rock: And then I look at therefore, the competitive environment and the way these are playing out.

Mike Rock: At this time.

Mike Rock: Any material risk to the business.

Mike Rock: In volumes or margins I think discussions are progressing well, obviously, we're not gonna give running commentary on that.

Oliver Graham: Obviously, we're not gonna give running commentary on that. You know, most of it will be resolved in the next 6 to 12 months. And as I say, at the moment, as we look into our planning cycle, we're not seeing anything particularly material from that. And while the competitive environment, there is capacity in North America, there is also growth in certain pockets, and also we're seeing some players coming out of the industry. So we're not seeing that the market is particularly irrational or anything particular happen. So yeah, we're confident with the strength of our relationships, the filling locations we have, and with the market, it will come through those recontracting events.

Mike Rock: Most of it will will be resolved in the next six to 12 months.

Mike Rock: And as I say at the moment as we look into our planning cycle.

Mike Rock: We're not seeing anything, particularly materials from that and while the competitive environment. There is capacity in North America. There is also growth in certain pockets and also we're seeing some players coming out.

Mike Rock: The industry, so we're not seeing that.

Mike Rock: The market is particularly irrational.

Mike Rock: Hum.

Mike Rock: And I think particular happened so yes, where.

Mike Rock: We're confident with the strength of our relationships depending locations we have.

Mike Rock: With the market.

Mike Rock: That will come through those studies.

Mike Rock: Re contracting events.

Michael Roxland: Got it. Thanks very much, and good luck for the rest of the year.

Mike Roxland: Got it. Thanks very much, and good luck for the rest of the year.

Mike Rock: Got it thanks, very much and good luck for the rest of the year.

Oliver Graham: Thanks, Mike.

Mike Rock: Thanks.

Operator: We'll take our next question from Josh Spector with UBS.

Speaker Change: We'll take our next question from Josh Spector with UBS.

Anojja Shah: Hi, there. It's Anoja Shah sitting in for Josh. Just kind of following up on that last point, I wanted to talk about utilization rates. You said Europe was very strong, very tight, but utilization rates in North America and Brazil, and also we read recently about a new plant coming up in Brazil from the number four global player. So how does that factor into, into that?

Anojja Shah: Hi, there. It's Anojja Shah sitting in for Josh. Just kind of following up on that last point, I wanted to talk about utilization rates. You said Europe was very strong, very tight, but utilization rates in North America and Brazil, and also we read recently about a new plant coming up in Brazil from the number four global player. So how does that factor into, into that?

Shah: Hi, there it's been noticed Shah sitting in for Josh.

Speaker Change: Just kind of following up on that last point I wanted to talk about utilization rate in Europe is very strong and tight.

Speaker Change: Utilization rates in North America, and breakdown and also be read recently about a new plant coming up and everything else in that number for a global player. So how does that factor into that.

Oliver Graham: Yeah, sure. Look, I think that the North America, we believe, is operating in the 90s utilization as a market, which I think is a reasonable place for it to be. With the growth we've had this quarter and what we're seeing in Q2, we're also now into the 90s with our curtailment, and then obviously we still have some curtailment activity that will take us into the mid- to high 90s this year. And actually, our network is seeming extremely tight at the moment, with all the pressure that's coming in from the, you know, the increased specialty sales. So, I think North America is sort of growing into a balanced position, and as I say, I think is operating rationally, with the capacity position that that is in place.

Speaker Change: Yes, So look I think the North America, we believe is operating in the Ninety's utilization in the market.

Speaker Change: Which I think is a reasonable place for it to be and with the growth we've had.

Speaker Change: Quarter and what we're seeing in Q2 were all down now into the Ninety's without curtailment and then obviously, we still have some curtailment activity that will take us into the mid to high 90, this year and actually our network. It is an interesting target at the moment.

Speaker Change: With all the pressure that's coming in from the you know the.

Speaker Change: The increase specialty sales.

Speaker Change: I think North America is sort of growing into a balanced position and as I say I think.

Speaker Change: <unk> is operating rationally.

Speaker Change: With the capacity position that that is in place in Brazil, I mean again I think the market is.

Oliver Graham: In Brazil, I mean, again, I think the market is in either the late 80s or early 90s. Brazil is a more complex market logistically with, you know, big distances, so tends to feel a bit tighter at lower utilization rates. And we are, you know, we started the year in the mid-80s with a mid-80s number. That's after some hard curtailment. And at the minute, we're obviously not changing that prediction for the year, because we haven't changed our guidance, but equally, we're obviously operating a bit ahead of that with the performance we had in Q1, in Q1, Q2. And then, yeah, look, I think that announcement was long planned. It was delayed by 2 or 3 years, with the delay to the customer's brewery, but they're now going ahead with that.

Speaker Change: <unk> is already 90, Brazil is a more complex market logistically with big distances, so tends to be feel a bit tighter lower utilization rates.

Speaker Change: And we are you know we started the year with a mid <unk> number that's after some hard curtailment.

Speaker Change: And at the minute, we're obviously not changing that prediction for the extra haven't changed that guidance, but equally we're obviously operating a bit ahead of that.

Speaker Change: Four months, we added.

Speaker Change: In Q1, Q2, and then yes, I think the announcement with long plan. It was delayed by two or three years.

Speaker Change: With the delayed the customer's brewery.

Speaker Change: But they're not going ahead with that.

Oliver Graham: You know, as I said earlier, I think Brazil remains a very attractive market for beverage cans. There's a long-term secular shift out of two-way glass packaging into one-way packaging, which is principally beverage cans. And so, you know, you've got that sort of mid-single digit growth trajectory over the, over the medium term, and that therefore does need additional capacity to come in, particularly regionally; you get shortages. So no particular concern with that investment. It was long anticipated, and I think just reflects the good growth that that customer has in the market.

Speaker Change: As I said earlier, I think Brazil remains a very attractive market for beverage cans. There is a long term secular shift out of two way glass packaging into.

Speaker Change: While my packaging, which is principally beverage cans.

Speaker Change: So you've got that sort of mid single digit growth trajectory over the <unk>.

Speaker Change: Over the medium term and that therefore does need additional capacity to come in particularly region that you get shortages. So no particular concern with that investment as long anticipated nothing just reflects.

Speaker Change: The good growth that that customer has in the market.

Anojja Shah: Okay, great. Thank you for all that detail. And then I wanted to go back to the EBITDA guidance raise. By my math, I think you raised it by about $23 million at the midpoint for the full year, which is a bit less than the overage in Q1 and Q2, versus consensus and also versus your guidance. Is that just conservatism built in for the back half, or is there anything that we should be thinking of in the back half, or any things to watch out for in the back half?

Speaker Change: Okay, great. Thank you for all that detail.

Speaker Change: And then I wanted to go back to the EBITDA guidance range.

Speaker Change: Matt I think everybody is it by about $23 million at the midpoint for the full year.

Speaker Change: Which is a bit less than the overage in Q1 and Q2.

Speaker Change: But the consensus can also affect the guidance.

Speaker Change: Is that just conservatism built in for the back half or is there anything that we should be thinking of in the back half of annual things to watch out for in the back half.

Oliver Graham: Yeah, maybe I'd take that in part also to Stefan. I don't think there's anything particular in the back half. We are cautious. You know, we've had a good start to the year, but as I say, until you go through the summer season in Europe and North America, you don't really know where you are. We'd be pretty optimistic based on the momentum going into Q2, but again, I think we're very early in the year. The macro environment does remain volatile. We said it clearly in our remarks. I think that in the current macro environment, we're confident in raising the guidance, but we don't know what's happening in the world today. So you know, it's another reason to be a little bit cautious. But I don't think there's anything specific. I'll just check that with Stefan.

Speaker Change: Yes, maybe I'll.

Speaker Change: Take that.

Speaker Change: Stephanie.

Speaker Change: Thanks, a lot.

Speaker Change: Yeah.

Speaker Change: Yes Im cautious.

Speaker Change: We've had a good start to the year, but let's say until you go through the summer season in Europe, and North America, you don't really know where you are.

Speaker Change: We'd be pretty optimistic based on the momentum going into Q2, but again I think we're very early in the year. The macro environment does remain volatile we said it clearly in our remarks I think that in the current macro environment. We are confident in raising the guidance, but we don't know what's happening in the world today. So it's another.

Speaker Change: Reason to be a little bit cautious.

Speaker Change: Anything specific I'll, just check that stephane.

Stefan Schellinger: Yeah. Yes, I confirm all that. I think there's nothing particular, no specific factor that is driving what you pointed out. I mean, we have obviously relative visibility into Q2, so that is a reflection also of what we've seen in the business. But yeah, I think, yeah, you might say it's a, maybe a little bit conservatism, but I think in the world we're currently living in, that might be appropriate from our perspective.

Speaker Change: Yes.

Speaker Change: I confirm all of that.

Speaker Change: <unk>.

Speaker Change: There are no specific sector.

Speaker Change: You pointed out.

Speaker Change: Relative to the visibility into Q2.

Speaker Change: So what you're seeing in the business, but yeah, I think yes, you might say that maybe a little bit conservatism, but I think.

Speaker Change: We are currently living in.

Speaker Change: It might be appropriate.

Speaker Change: Dave.

Anojja Shah: Great. Thank you for that, and congratulations on a good quarter.

Speaker Change: Alright, thank you for that and congratulations on a good quarter.

Oliver Graham: Thank you.

Speaker Change: Thank you.

Operator: We'll take our next question from Gabe Hajde with Wells Fargo.

Speaker Change: We'll take our next question from Gabe.

Speaker Change: Wells Fargo.

Oliver Graham: Olly, Stephen, good morning. Just-

Gabe Hajde: Olly, Stephen, good morning. Just.

Speaker Change: Holly Stephen good morning.

Speaker Change: Just most of my questions have been asked to be honest.

Oliver Graham: Hi, Gabe.

Oliver Graham: Most of my questions have been asked, to be honest. Just one on sort of the conservatism baked in. I mean, again, you didn't put any specificity on volumes. I don't think you did in April. But just 6% in the first quarter, if we assume second quarter kind of up mid-singles, it sort of implies a decel in the back half of the year. Is that something that you're seeing, or is it, again, just conservatism in the outlook, given we've had some false starts here in the past two years, and then obviously everything that's going on in the macro environment?

Gabe Hajde: Most of my questions have been asked, to be honest. Just one on sort of the conservatism baked in. I mean, again, you didn't put any specificity on volumes. I don't think you did in April. But just 6% in the first quarter, if we assume second quarter kind of up mid-singles, it sort of implies a decel in the back half of the year. Is that something that you're seeing, or is it, again, just conservatism in the outlook, given we've had some false starts here in the past two years, and then obviously everything that's going on in the macro environment?

Speaker Change: Just one on sort of the conservatism baked in I mean again, you didn't put any specificity on volume I don't think you did in April but.

Speaker Change: 6% in the first quarter, if we assume.

Speaker Change: Second quarter kind of up mid single it sort of implies a T cell in the back half of the year.

Speaker Change: Is that something that youre seeing or is it again just conservatism in the outlook given we've had some false starts here in the past two years.

Speaker Change: And then obviously everything that's going on in the macro environment.

Oliver Graham: Yeah, I think it's exactly that, Gabe, which is, you know, we think about Brazil, you know, last year we were sitting mid-September, you know, market up double digits, you know, looking at some pretty good numbers. We hadn't captured all that growth, and then, you know, suddenly we, you know, had a unexpected event that pulls us right back to Q3, Q4. So, you know, again, we're not upping the Brazil guidance yet, even though, you know, when you play it through mathematically, you'd expect to see a bit of upside. So we're being cautious there. I think, you know, on Europe, again, you know, we have to recognize that last year, our customers did not build inventory to the extent needed. The industry didn't do that. They were all cautious after, you know, a pretty rough end to 2023.

Speaker Change: Yes, I think it's exactly that day, which is.

Speaker Change: We think about Brazil.

Speaker Change: Last year, we were sitting mid September.

Speaker Change: Market up double digits, you know looking at some pretty good numbers.

Speaker Change: Captured all of that growth and then suddenly we.

Speaker Change: Unexpected event pull to drive back to Q3 Q4.

Speaker Change: We're not upping, the Brazil guidance, yet, even though you know when you play through mathematically you would expect to see a bit of upside. So we're being cautious I think.

Speaker Change: On Europe again, we have to recognize that last year, our customers did not build inventory to the extent needed the industry can do that the rural quarters after a pretty rough and 2023 and so as a result this year our customers are building inventory and we are too and so we have to be cautious as I say until we go through.

Oliver Graham: So as a result, this year, our customers are building inventory, and they and we are too. You know, we have to be cautious, as I say, until we go through the summer seasons, to be absolutely sure that we're gonna get the rate of sell-through that they're predicting. And same with North America, again, trends are very strong, but until you've really been through the summer, you don't absolutely know what you've got. I think it is appropriate, as Stefan just said, and you mentioned, you know, we are in a very volatile macro environment. I think that we're demonstrating how strong the business is in the face of that macro environment, because structurally, it's well positioned for that environment and, you know, naturally somewhat defensive in nature, but equally, you know, big things can happen that can knock us off course.

Speaker Change: The summer seasons to be absolutely sure that we're going to get the right to sell through that they're predicting segment North America again trends are very strong, but until you've really been through the summer heat I absolutely know what you've got so I think it is appropriate as Stefan just said and you mentioned you know we are in a very volatile macro environment I think.

Speaker Change: We're demonstrating how strong the business is in the face of that macro environment, because structurally it's well positioned for that environment.

Speaker Change: Naturally somewhat defensive in nature, but equally big things can happen that can can.

Speaker Change: And not that of course, so yeah I think it's just that we're early in yet.

Oliver Graham: So yeah, I think it's just that we're early in the year, and we want to be somewhat cautious about, you know, the back half.

Speaker Change: And we want to be somewhat cautious about.

Speaker Change: The back half.

Oliver Graham: Got it. Okay. And then on the CapEx side, just a point of clarification. I thought I heard going up to $70 for expansion slash return capital this year. And did Stefan say up from $50 to 60, or was that $50 to 60 sort of like a baseline that we would expect on a go-forward basis? And really-

Gabe Hajde: Got it. Okay. And then on the CapEx side, just a point of clarification. I thought I heard going up to $70 for expansion slash return capital this year. And did Stefan say up from $50 to 60, or was that $50 to 60 sort of like a baseline that we would expect on a go-forward basis? And really.

Speaker Change: Got it Okay, and then on the Capex side, just a point of clarification.

I thought I heard going up to 74 expansion slash return capital this year.

Speaker Change: It's definitely up from 50 to 60 or was that 50 to 60 sort of like Oh.

Speaker Change: Our baseline that we would expect on a go forward basis.

Oliver Graham: Yeah, the last...

Oliver Graham: Yeah, the last.

Andrew: Andrew Yes.

Oliver Graham: Again, Olly. Sorry, Olly, I think you mentioned-

Gabe Hajde: Again, Olly. Sorry, Olly, I think you mentioned-

Ali: Again Ali.

Andrew: Alright, alright.

Andrew: Alright, guys.

Oliver Graham: Sorry, go ahead, Gabe. Yeah.

Speaker Change: Yeah, you feel good about your brick and mortar infrastructure as it sits right now in Brazil, and North America.

Oliver Graham: Yeah, you feel good about your brick-and-mortar infrastructure as it sits right now in Brazil and North America, but if the growth persists in Europe, can you talk about maybe the need for a new factory or anything like that?

Gabe Hajde: Yeah, you feel good about your brick-and-mortar infrastructure as it sits right now in Brazil and North America, but if the growth persists in Europe, can you talk about maybe the need for a new factory or anything like that?

Andrew: But if the growth per se.

Andrew: In Europe.

Andrew: Can you talk about maybe the need for a new factory or anything like that.

Oliver Graham: Yeah, sure. So I think, yeah, Stefan's comment was back to run rate. So he was saying that the sort of run rate we expect is $50 to 60 million at the moment, but we'd increased to $70 million this year. So yeah, that was the second one that you mentioned in terms of those two options. So yeah, look, I think Europe, the way we're seeing it, as I say, is we're pretty tapped out. We're growing capacity through existing projects that are ramping up. We're debottlenecking and improving the performance of other factories, so that'll get us about 1 billion of capacity this year.

Andrew: Yes, sure. So I think <unk> comment, but was back to run rate, so you're saying that sort of run rate. We expect is the 50 to 60 million at the moment, but we had increased to $70 million. This year. So yeah that was the second one you mentioned in terms of those two options.

Andrew: So, yes look I think Europe.

Andrew: And the way, we're seeing it as I say is with pretty tapped out.

Andrew: We are growing capacity at your existing projects that are ramping up with debottlenecking and improving the performance of other factories, so that'll get us about $1 billion of capacity this year.

Oliver Graham: So then, you know, we see we need another $1 billion or so going through the next year or two, so then we're starting to target mostly, in fact, entirely within our existing footprint projects to increase capacity and increase flexibility, with particular projects linked to particular customer contracts and growth projects. So, you know, we'll talk more about those details as they come up over the next 6, 9 months. But I think, you know, our prediction is that Europe is the place that needs it, whereas, as you say, I think although we're feeling very tight in North America right now, that's because some of this growth is a bit unexpected, and we have got the capacity in North America to get some good growth in the next year or two, and similarly with Brazil.

Andrew: We see we need another 1 billion also going through the next year or two so then were starting to target mostly in fact entirely within our existing footprint projects.

Andrew: Increased capacity and increased flexibility.

Andrew: With particular projects linked to a particular customer contracts and growth projects. So.

Andrew: We'll talk more about those details as they climb up over the next six nine months, but I think you know our prediction is that Europe is the place it needs it whereas as you say I think although we're feeling very tight in North America, right now and Thats because some of this growth is a bit unexpected and we have got the capacity in North America to get some good growth in the next year.

Andrew: And similarly, with Brazil, So I think Europe is the place where we definitely need a little bit more at this stage with what we see in front of it it's not a new factory we.

Oliver Graham: So I think Europe is the place where we definitely need a little bit more. At this stage, with what we see in front of us, it's not a new factory. You know, it can be done within the existing footprint.

It can be done within the existing footprint.

Oliver Graham: Got it. Thank you.

Gabe Hajde: Got it. Thank you.

Andrew: Got it thank you.

Oliver Graham: Thanks, Gabe.

Andrew: Thanks Scott.

Operator: We'll take our next question from Arun Viswanathan with RBC Capital Markets.

Andrew: We'll take our next question from Erinn Viswanathan with.

Speaker Change: RBC capital markets.

Arun Viswanathan: Great, thanks for taking my question, guys. So I guess, yeah, I just wanted to continue along, the discussion around, volumes. It sounds like, you know, volumes have been a little bit more robust than what you thought, especially in North America. Understanding that has been led mostly by the non-alcoholic beverages side. Do you feel comfortable at all, kind of, at the upper end of the longer term outlook? Maybe are we talking about 2% to 3% kind of consistent growth going forward? And maybe I can just get your thoughts on the beer category as well. We've obviously seen continued weakness there. So do you think that is gonna persist, or do you think that could also turn around, as you move through the year and into next year? Thanks.

Speaker Change: Great. Thanks for taking my question guys.

Speaker Change: So I guess, yeah I just wanted to continue along the discussion around Oh volumes it sounds like you.

Speaker Change: Volumes have been a little bit more robust than what you thought, especially in North America understanding that has been led mostly by the non alcoholic beverages side.

Do you feel comfortable at all kind of at the upper end of the longer term outlook, maybe are we talking about 2% to 3% kind of consistent growth going forward and maybe I can just get your thoughts on the beer category as well. We've obviously seen continued weakness there. So do you think that is going on.

Speaker Change: Persist or do you think that could also turn around as you move through the year and into next year. Thanks.

Oliver Graham: Sure. Yeah, no, I mean, as you say, we're not, we're not big players in the, in the mass beer segment, and we do still see the weakness in the scanner data, which obviously a big part of that has been the decline in domestic produced and sold beer relative to imported, beer. Because, I mean, if you go back 10 years, beer grew in cans, and it was actually the soft drink side of the house that was struggling with the growth of PET. So, so yeah, look, I think if domestic beer, you know, started to take share back from imported beer, which, you know, potentially the tariff situation could drive some of that, then you could see beer go back into growth.

Speaker Change: Sure.

Speaker Change: As you said, we're not we're not big players in the math.

Speaker Change: And we do you still see the weakness in the scanner data, which obviously a big part of that has been a decline in domestic <unk>.

Speaker Change: <unk> and Phil relative to imported.

Speaker Change: Because I mean, if you go back 10 years.

Speaker Change: <unk> grew in cans and it was actually the soft drink side of the house that was struggling with the growth of P. T. So so yeah look I think if domestic bed.

Speaker Change: It started to take share back from imported bearish in essentially the tariff situation could drive some of that and you could see big go back into growth.

Oliver Graham: I think it is all about which brands are growing, because there's no reason why, you know, cans wouldn't be taking share in that category. In fact, they are taking share in that category from glass. But as I say, you're just seeing it going outside the US instead of production. So yeah, no reason why that came back and no reason why the US can market can't grow 2 to 3%. As I say, I think, you know, there's been a lot of commentary around the category recently that has been a little bit negative, you know, about possible trends and, you know, SNAP and weight loss drugs. But I think that commentary is, has been a bit overweight things that aren't yet happening and a bit underweight things that are happening, which is that innovation's going into the can.

Speaker Change: I think it is all about which brands.

Speaker Change: Our growing.

Speaker Change: Because there's no reason why.

Speaker Change: Ken's wouldn't be taking share in that category and patriotic get share in that category from glass.

Speaker Change: Is it that you're just seeing it going outside the U S and set of production. So yeah. No reason why that came back and no reason why the U S Cat market Congress two 3%.

Speaker Change: With that I think it's been a lot of commentary around the category recently that there has been a little bit negative you know about possible trends and I'm in a snap.

Speaker Change: Snap in weight loss drugs, but I think that commentary.

Speaker Change: That's been a bit overweight things happening on the way things are happening, which is the innovation going into the Cannes Mccann is still very strong from a sustainability point of view in the cabinet still super efficient from a filling in economics point of view. So we see those long term trends driving the category.

Oliver Graham: The can is still very strong from a sustainability point of view, and the can is still super efficient from a filling and economics point of view. So, you know, we see those long-term trends as driving the category. And there's no reason therefore why North America can't grow at that sort of rate, which it grew pre-COVID at that kind of rate. So, yeah, I'd remain optimistic on North American can growth for sure.

Speaker Change: And there's no reason that sort of wide North America conquer that so the rate, which it grew pre COVID-19 at that kind of rate. So.

Speaker Change: Yes.

Speaker Change: We remain optimistic on the North American Congress for sure.

Speaker Change: Okay.

Arun Viswanathan: And then, thanks for that. And then just on the balance sheet, you know, obviously leverage is still relatively high, but you guys have made some nice progress, and seeing that the, you know, better-than-expected EBITDA growth. So, how are you guys feeling about free cash flow, and I guess, year-end leverage? And maybe, you know, any plans to bring that down a little bit more? Are there any other options to consider, whether it be, you know, asset disposition or anything like, along those lines? Thanks.

Speaker Change: And then thanks for that and then just on the balance sheet.

Speaker Change: Obviously leverage is still relatively high but you you guys have made some nice progress.

Speaker Change: And seeing that you know better than expected EBITDA growth. So.

Speaker Change: How are you guys feeling about free cash flow and I guess, a yearend leverage and and maybe any plans are to bring that down a little bit more are there any other options to consider whether it be you know asset disposition or anything along those lines.

Speaker Change: <unk>.

Stefan Schellinger: Yeah, I think overall, we are feeling good about free cash flow generation. You know, we slightly increased our expectations for the full year, as mentioned earlier. I think in terms of the leverage towards the end, certainly we expect that to come down from where we are here at the end of Q1. Probably direction of travel, similar to what we had shown at the end of 2024, so just under 5x. In terms of what are the key levers for deleveraging, I think predominantly it's really growing the business, EBITDA growth, and being disciplined on our capital allocation, and yeah, managing the working capital and the balance sheet.

Speaker Change: Yeah.

Speaker Change: Overall, we are feeling good about free cash flow generation.

Speaker Change: The increase in expectation for a colorful yeah as I mentioned earlier.

Speaker Change: I think in terms of the yen.

Speaker Change: And.

Speaker Change: Certainly we expect that to come down from where we are.

Speaker Change: Q1, probably direction of travel is similar to what we had.

Matt: Sure Matt.

Speaker Change: So just some.

Matt: Five times.

Matt: Comes off.

Matt: The key lever for deleveraging I think they don't want it.

Matt: But they're small.

Matt: In disciplined.

Matt: Our capital allocation.

Matt: And.

Matt: Managing managing the working capital on the balance sheet I don't think that any.

Stefan Schellinger: I don't think there's any bigger structural, I think, thing we have in mind at this particular juncture.

Matt: Sure.

Matt: I was saying.

Matt: Yeah.

Matt: This particular downturn.

Arun Viswanathan: Thanks.

Matt: Thanks.

Operator: Thank you. With no additional questions in queue, I'd like to turn the call back over to our speakers for any additional or closing remarks.

Speaker Change: Thank you with no additional questions in queue I'd like to turn the call back over to our speakers for any additional or closing remarks.

Oliver Graham: Thanks, Katie, and thanks for everyone for joining the call. So yeah, just to summarize, we had a good quarter. Global shipments grew by 6%, Adjusted EBITDA up by 16%, both ahead of guidance, and with both regions performing strongly. Reflecting that encouraging start, also favorable currency movements and the strength of our business overall, we're raising our expectations for the full year shipments growth and our Adjusted EBITDA. We look forward to talking to you again at our Q2 results. Thank you very much.

Speaker Change: Thanks Casey.

Speaker Change: Thanks, everyone for joining the call so yeah just to summarize.

Speaker Change: We had a good quarter global shipments grew by 6% adjusted EBITDA.

Speaker Change: EBITDA by 16%.

Speaker Change: And with both regions performing strongly and reflected not encouraging start also type of currency movements and the strength of our business overall, we're raising our expectations for the full year shipments growth and our adjusted EBITDA and we look forward to talking to you again at our Q2 results. Thank you very much.

Operator: That will conclude today's call. We appreciate your participation.

Speaker Change: That will conclude today's call. We appreciate your participation.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: [music].

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