Crown Holdings Q4 2025 Crown Holdings Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Crown Holdings Inc Earnings Call
Operator: Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you, and please continue to stand by. Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you, and please continue to stand by. Good morning, and welcome to Crown Holdings Fourth Quarter 2025 Conference Call. Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised that this conference is being recorded. I would now like to turn the call over to Mr. Kevin Clothier, Senior Vice President and Chief Financial Officer. Sir, you may begin.
Operator: Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you, and please continue to stand by. Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you, and please continue to stand by. Good morning, and welcome to Crown Holdings Fourth Quarter 2025 Conference Call. Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised that this conference is being recorded. I would now like to turn the call over to Mr. Kevin Clothier, Senior Vice President and Chief Financial Officer. Sir, you may begin.
Speaker #1: Thank you for momentarily. Until such time, you will hear music. Thank standing by. The conference will begin you. And please continue to stand
Speaker #1: by. Good morning and welcome to
Speaker #2: 2025 conference call. You're lines have been placed on a listen-only mode until the CROWN HOLDINGS, Q4, question and answer session. Please be advised that this conference is being Senior Vice President and Chief Financial recorded.
Speaker #2: over to Mr. Kevin Clothier,
Speaker #2: Officer. Sir, you may begin.
Speaker #3: Thank you, El. And good Donahue, President and Chief
Kevin Clothier: Thank you, Elle, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you don't already have the earnings release, it is available on our website at crownholdings.com. On this call, as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings, including our Form 10-K for 2024 and subsequent filings. Earnings in the quarter were $1.31 per share compared to $3.02 per share in the prior year quarter, which included a $2.32 per share gain from the sale of Eviosys. Adjusted earnings per share were $1.74, up 9% compared to $1.59 in the prior year quarter.
Kevin Clothier: Thank you, Elle, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you don't already have the earnings release, it is available on our website at crownholdings.com. On this call, as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings, including our Form 10-K for 2024 and subsequent filings. Earnings in the quarter were $1.31 per share compared to $3.02 per share in the prior year quarter, which included a $2.32 per share gain from the sale of Eviosys. Adjusted earnings per share were $1.74, up 9% compared to $1.59 in the prior year quarter.
Speaker #3: Good morning. With me on today's call is Tim, Executive Officer. If you don't already have the earnings release, it is at crowncork.com. I would now like to turn the call over.
Speaker #3: On this call, as in the earnings release, we will be making a number of forward-looking statements: actual results could vary materially from such statements.
Speaker #3: Additional information concerning factors that could cause actual results to vary is contained in the press release, and in our SEC filings, including our Form 10-K for 2024 and the quarter were subsequent filings.
Speaker #3: $1.31 per share compared to $3.02 per share in the prior year quarter, which included a $2.32 per share Earnings in gain from the sale of Viveosis.
Speaker #3: Adjusted earnings per share were $1.74, up 9% compared to $1.59 in the prior year quarter. Net sales in the quarter were up 8% compared to the prior year quarter.
Kevin Clothier: Net sales in the quarter were up 8% compared to the prior year quarter, reflecting a 3% increase in global beverage can volumes, $189 million from the pass-through of higher raw material cost, and $58 million from favorable foreign exchange. Segment income was $420 million in the quarter compared to $428 million in the prior year, reflecting strong performance in European beverage, offset by lower volumes in transit packaging. For the year, the company delivered record adjusted EBITDA of almost $2.1 billion compared to the prior year record of $1.9 billion in 2024. The improvement was driven by strong commercial and operational performance across the beverage and tinplate businesses. The company generated record free cash flow of $1.146 million in 2025 compared to the prior year record of $814 million in 2024.
Kevin Clothier: Net sales in the quarter were up 8% compared to the prior year quarter, reflecting a 3% increase in global beverage can volumes, $189 million from the pass-through of higher raw material cost, and $58 million from favorable foreign exchange. Segment income was $420 million in the quarter compared to $428 million in the prior year, reflecting strong performance in European beverage, offset by lower volumes in transit packaging. For the year, the company delivered record adjusted EBITDA of almost $2.1 billion compared to the prior year record of $1.9 billion in 2024. The improvement was driven by strong commercial and operational performance across the beverage and tinplate businesses. The company generated record free cash flow of $1.146 million in 2025 compared to the prior year record of $814 million in 2024.
Speaker #3: Reflecting a 3% increase in global beverage can volumes, $189 million from the pass-through of higher raw material costs, and $58 million from favorable foreign exchange.
Speaker #3: Segment income was $420 million in the quarter compared to $428 million in the prior beverage offset by lower volumes and transit packaging. For the year, reflecting strong performance in European year, the company delivered record adjusted EBITDA of almost $2.1 billion compared to the prior year record of $1.9 billion in 2024.
Speaker #3: The improvement was driven by strong commercial and operational performance across the beverage and template businesses. The company generated record free cash flow of $1,146 million in 2025 compared to the prior year record of $814 million in 2024.
Speaker #3: The $320—excuse me, the $332 million improvement was largely driven by the 8% improvement in EBITDA and lower pension contributions. The company maintained its net leverage target of 2 and a half times which we achieved at the end of September of 2025, and that is down from 2.7 times at the end of 2024.
Kevin Clothier: The $320 excuse me, the $332 million improvement was largely driven by the 8% improvement in EBITDA and lower pension contributions. The company maintained its net leverage target of 2.5 times, which we achieved at the end of September of 2025, and that is down from 2.7 times at the end of 2024. We delivered on our commitment to return excess cash to shareholders, with $191 million of shares repurchased in Q4. For the year, the company returned $625 million to shareholders, consisting of $505 million in share repurchases and $120 million in dividends, compared to a total of $336 million in 2024. Looking ahead, we remain committed to compounding earnings, investing in the business, maintaining a strong balance sheet, and returning excess cash to shareholders.
Kevin Clothier: The $320 excuse me, the $332 million improvement was largely driven by the 8% improvement in EBITDA and lower pension contributions. The company maintained its net leverage target of 2.5 times, which we achieved at the end of September of 2025, and that is down from 2.7 times at the end of 2024. We delivered on our commitment to return excess cash to shareholders, with $191 million of shares repurchased in Q4. For the year, the company returned $625 million to shareholders, consisting of $505 million in share repurchases and $120 million in dividends, compared to a total of $336 million in 2024. Looking ahead, we remain committed to compounding earnings, investing in the business, maintaining a strong balance sheet, and returning excess cash to shareholders.
Speaker #3: We delivered on our commitment to return excess cash to shareholders with $191 million of shares repurchased in the fourth quarter. For the year, the company returned $625 million to shareholders, consisting of $505 million in share repurchases, and $120 million in dividends.
Speaker #3: Compared to a total of $336 million in 2024. Looking ahead, we remain committed to compounding earnings, investing in the business, maintaining a strong balance sheet, and returning excess cash to shareholders.
Speaker #3: the quarter, For excuse me, first quarter share, or projected to be in the range of 2026, adjusted earnings per diluted $1.70 to $1.80, with a full year range projected to be $7.90 to $8.30 per share.
Kevin Clothier: For the quarter, excuse me, first quarter 2026, adjusted earnings per diluted share are projected to be in the range of $1.70 to $1.80, with a full-year range projected to be $7.90 to $8.30 per share. The adjusted earnings guidance for the full year includes net interest expense of approximately $350 to $360 million, depending on the timing of share repurchases, exchange rates at the current levels, with the euro at 1.17 to the dollar, full-year tax rate of approximately 25%, depreciation of approximately $330 million, non-controlling interest expense of approximately $140 million, while dividends to non-controlling interest are expected to be $110 million. We currently estimate 2026 full-year free cash flow to be approximately $900 million after $550 million of capital spending to support our growth objectives, including capacity expansions and facility upgrades in Brazil, Greece, and Spain.
Kevin Clothier: For the quarter, excuse me, first quarter 2026, adjusted earnings per diluted share are projected to be in the range of $1.70 to $1.80, with a full-year range projected to be $7.90 to $8.30 per share. The adjusted earnings guidance for the full year includes net interest expense of approximately $350 to $360 million, depending on the timing of share repurchases, exchange rates at the current levels, with the euro at 1.17 to the dollar, full-year tax rate of approximately 25%, depreciation of approximately $330 million, non-controlling interest expense of approximately $140 million, while dividends to non-controlling interest are expected to be $110 million. We currently estimate 2026 full-year free cash flow to be approximately $900 million after $550 million of capital spending to support our growth objectives, including capacity expansions and facility upgrades in Brazil, Greece, and Spain.
Speaker #3: The adjusted earnings guidance for the full year includes net interest expense of approximately $350 to $360 million, depending on the timing of share repurchases, exchange rates at the current levels with the euro at 117 to the dollar, full year tax rate of approximately 25%, depreciation of approximately $330 million, non-controlling interest expense of approximately $140 million, while dividends to non-controlling interest are expected to be $110 million.
Speaker #3: We currently estimate 2026 full year free cash flow to be approximately $900 million, after $550 million of capital spending to support our growth objectives, including capacity expansions and facility upgrades in Brazil, Greece, and Spain.
Speaker #3: We expect net leverage—we expect—excuse me, we expect to maintain our net leverage at our target level times. With that, I'll turn the call over to Tim.
Kevin Clothier: We expect, excuse me, to maintain our net leverage at our target level of approximately 2.5 times. With that, I'll turn the call over to Tim.
Kevin Clothier: We expect, excuse me, to maintain our net leverage at our target level of approximately 2.5 times. With that, I'll turn the call over to Tim.
Speaker #4: Thank you, Kevin. And good morning to everyone. As reflected in last night's earnings release and as Kevin just summarized, the company delivered another solid quarter.
Timothy Donahue: Thank you, Kevin. Good morning to everyone. As reflected in last night's earnings release and as Kevin just summarized, the company delivered another solid quarter to complete an outstanding year. The company performed well across virtually every metric, generating more than 20% earnings per share growth while also achieving our long-term leverage target of 2.5 times. Q4, global beverage can unit volumes were up 3%, helping to deliver level global beverage segment income against a very strong prior year Q4. Operationally, the teams performed very well to minimize the impacts from tariffs and the border conflict between Thailand and Cambodia. Volumes in America's beverage were up a bit more than 1% in the quarter, as North American gains of 2.5% were offset by a 3% decline in Brazil. For the full year, volumes in North America were flat, while Brazil was down 3%.
Timothy Donahue: Thank you, Kevin. Good morning to everyone. As reflected in last night's earnings release and as Kevin just summarized, the company delivered another solid quarter to complete an outstanding year. The company performed well across virtually every metric, generating more than 20% earnings per share growth while also achieving our long-term leverage target of 2.5 times. Q4, global beverage can unit volumes were up 3%, helping to deliver level global beverage segment income against a very strong prior year Q4. Operationally, the teams performed very well to minimize the impacts from tariffs and the border conflict between Thailand and Cambodia. Volumes in America's beverage were up a bit more than 1% in the quarter, as North American gains of 2.5% were offset by a 3% decline in Brazil. For the full year, volumes in North America were flat, while Brazil was down 3%.
Speaker #4: To complete an outstanding year, the company performed well across virtually every metric, share growth while also achieving our long-term leverage target of 2 and a half times.
Speaker #4: Fourth quarter global beverage can unit volumes were up 3%, helping to deliver level global beverage segment income against a very strong prior year fourth quarter.
Speaker #4: Operationally, the team's performed very well, to minimize the impacts from tariffs and the border conflict between Thailand and Cambodia. Volumes in America's beverage were up a bit more than 1% in the quarter, as North American gains of 2 and a half percent were offset by a 3% decline in Brazil.
Speaker #4: For the full year, volumes in North America were flat, while Brazil was down 3%. Compared to a very strong prior year, the segment delivered record income of over $1 billion on the back of exceptional operating performance and positive mix.
Timothy Donahue: Compared to a very strong prior year, the segment delivered record income of over $1 billion on the back of exceptional operating performance and positive mix. When adjusted for the pass-through of higher aluminum costs, margins were within 30 basis points of last year's fourth quarter. As we look ahead to 2026, we expect North American volume gains of 2% to 3%, but offset by inflation and startup costs. European beverage volumes increased 10% in the fourth quarter, with shipments remaining strong across the Mediterranean and the Gulf States. For the full year, volumes were also up 10%, generating record segment income, more than double what it was only a few years ago. With the can continuing to win share, we expect further growth in volumes and income in 2026, more than offsetting startup costs in Greece and Spain.
Timothy Donahue: Compared to a very strong prior year, the segment delivered record income of over $1 billion on the back of exceptional operating performance and positive mix. When adjusted for the pass-through of higher aluminum costs, margins were within 30 basis points of last year's fourth quarter. As we look ahead to 2026, we expect North American volume gains of 2% to 3%, but offset by inflation and startup costs. European beverage volumes increased 10% in the fourth quarter, with shipments remaining strong across the Mediterranean and the Gulf States. For the full year, volumes were also up 10%, generating record segment income, more than double what it was only a few years ago. With the can continuing to win share, we expect further growth in volumes and income in 2026, more than offsetting startup costs in Greece and Spain.
Speaker #4: When adjusted for the pass-through of higher aluminum costs, margins were within 30 basis points of last year's fourth quarter. As we look ahead to 2026, we expect North American volume gains of 2 to 3%, but offset by inflation and startup costs.
Speaker #4: European beverage volumes increased 10% in the fourth quarter, with shipments remaining strong across the Mediterranean and the Gulf States. For the full year, volumes were also up 10%, generating record segment income more than double what it was only a few years ago.
Speaker #4: With the can continuing to win share, we expect further growth in volumes and income in '26, more than offsetting startup costs in Greece and Spain.
Speaker #4: Sales unit volumes across our Asian operations were down 3% in the fourth quarter, owing entirely to the border conflict between Cambodia and Thailand. While consumer purchasing power across the region remains subdued in the face of ongoing tariff concerns, we expect that our low-cost regional structure will allow for commercial adjustments to drive volume growth in 2026.
Timothy Donahue: Sales unit volumes across our Asian operations were down 3% in Q4, owing entirely to the border conflict between Cambodia and Thailand. While consumer purchasing power across the region remains subdued in the face of ongoing tariff concerns, we expect that our low-cost regional structure will allow for commercial adjustments to drive volume growth in 2026. As expected, income across transit packaging was down in line with lower industrial activity. Plastic and steel strap volumes held up well, while higher margin equipment and tool offerings continue to be impacted by ongoing tariff adjustments. Despite overall industrial softness and tariff headwinds, the transit business continues to generate significant cash flow, while at the same time continuing to earn double-digit to low teens margins. With the focus cost reductions and operational improvements made over the past several years, the business is well-positioned for future income growth when industrial demand returns.
Timothy Donahue: Sales unit volumes across our Asian operations were down 3% in Q4, owing entirely to the border conflict between Cambodia and Thailand. While consumer purchasing power across the region remains subdued in the face of ongoing tariff concerns, we expect that our low-cost regional structure will allow for commercial adjustments to drive volume growth in 2026. As expected, income across transit packaging was down in line with lower industrial activity. Plastic and steel strap volumes held up well, while higher margin equipment and tool offerings continue to be impacted by ongoing tariff adjustments. Despite overall industrial softness and tariff headwinds, the transit business continues to generate significant cash flow, while at the same time continuing to earn double-digit to low teens margins. With the focus cost reductions and operational improvements made over the past several years, the business is well-positioned for future income growth when industrial demand returns.
Speaker #4: As expected, income across transit packaging was down in line with lower industrial activity. Plastic and steel strap volumes held up well, while higher margin equipment and tool offerings continue to be impacted by ongoing tariff adjustments.
Speaker #4: Despite overall industrial softness and tariff headwinds, the transit business continues to generate significant cash flow, while at the same time continuing to earn double-digit to low teens margins.
Speaker #4: With the focus cost reductions and operational improvements made over the past several years, the business is well positioned for future income growth when industrial demand plate businesses benefited from returns.
Timothy Donahue: Our North American tinplate businesses benefited from 5% food can volume growth, offsetting softness in steel aerosols during Q4. For the year, income in other was up 80% against an easy prior year comp and supported by food can volume growth and improved operating performance across newly installed capacity. In 2026, we expect further gains, largely driven by strong food can demand and increased can-making equipment orders. With net leverage at our long-term target of 2.5x, we remain focused on responsibly investing to support our partners' needs to grow their businesses, and we also remain committed to paying a dividend that grows over time and returning the capital to shareholders through disciplined share repurchases. So, you know, in summary, 2025 was another year of improvement for the company. Margins across our businesses remain healthy and demonstrate our ongoing focus on earning appropriate returns on capital employed.
Timothy Donahue: Our North American tinplate businesses benefited from 5% food can volume growth, offsetting softness in steel aerosols during Q4. For the year, income in other was up 80% against an easy prior year comp and supported by food can volume growth and improved operating performance across newly installed capacity. In 2026, we expect further gains, largely driven by strong food can demand and increased can-making equipment orders. With net leverage at our long-term target of 2.5x, we remain focused on responsibly investing to support our partners' needs to grow their businesses, and we also remain committed to paying a dividend that grows over time and returning the capital to shareholders through disciplined share repurchases. So, you know, in summary, 2025 was another year of improvement for the company. Margins across our businesses remain healthy and demonstrate our ongoing focus on earning appropriate returns on capital employed.
Speaker #4: 5% food can volume growth, offsetting softness in steel aerosols, our North American tin during the fourth quarter. For the year, income and other was up 80% against an easy prior year comp and supported by food can volume growth and improved operating performance across newly installed capacity.
Speaker #4: In 2026, we expect further gains largely driven by food—strong food can demand and increased can making equipment orders. long-term target of 2 and a half times, With net leverage at our we remain focused on responsibly investing to support our partners' needs to grow also remain committed to paying a dividend that their businesses and we grows over time and returning to capital to shareholders through disciplined share repurchases.
Speaker #4: So in summary, '25 was another year of improvement for the company. Margins across our businesses remain healthy, and demonstrate our ongoing focus on earning appropriate returns on capital employed.
Speaker #4: With a strong balance sheet and substantial free cash generation, the company remains well positioned to consistently deliver value to And with that, Elle, we are shareholders.
Timothy Donahue: With a strong balance sheet and substantial free cash generation, the company remains well-positioned to consistently deliver value to shareholders. And with that, Elle, we are now ready to take questions. Okay. Maybe we're the only ones here. Peace and harmony. Elle, we're ready to take questions.
Timothy Donahue: With a strong balance sheet and substantial free cash generation, the company remains well-positioned to consistently deliver value to shareholders. And with that, Elle, we are now ready to take questions. Okay. Maybe we're the only ones here. Peace and harmony.
Speaker #4: questions. Okay. Maybe we're the only ones here. Peace and harmony.
Kevin Clothier: Elle, we're ready to take questions.
Speaker #1: Elle, we're ready to take questions.
Speaker #5: Apologies for that. I was on mute. Participants, if you'd like to ask a question, please press star, and then the number one. Please unmute your phone.
Operator: Apologies for that. I was on mute. Participants, if you'd like to ask a question, please press star and then the number one. Please unmute your phone and record your name clearly when prompted, your name and company name, and then to introduce your question. To cancel a request, please press star and then the number two. Our first question will be coming from George Staphos. Your line is open.
Operator: Apologies for that. I was on mute. Participants, if you'd like to ask a question, please press star and then the number one. Please unmute your phone and record your name clearly when prompted, your name and company name, and then to introduce your question. To cancel a request, please press star and then the number two. Our first question will be coming from George Staphos. Your line is open.
Speaker #5: I'm recording your name clearly when prompted. Your name and company name, and request, please press star, and then the number two. Our first question will be coming from George Tapos, your line is open.
George Staphos: Thanks very much. Hi everyone. Good morning. Thanks for the details.
George Staphos: Thanks very much. Hi everyone. Good morning. Thanks for the details.
Speaker #6: Hi everyone, good
Speaker #6: morning.
[Company Representative] (Crown Holdings): Good morning, George.
Kevin Clothier: Good morning, George.
George Staphos: Congratulations on the progress. Free cash flow, aside from being a record for you all, was, I think, one of the strongest free cash flows we've seen in the sector, you know, maybe top five over the last 10 years. So congratulations on that. I guess first thing that we had for Americas EBIT for the outlook for this year. Tim, you said, if I heard you correctly, North America is going to grow 2% to 3%. And then you mentioned it would be offset by inflation and startup costs for 2026. So in total, should we expect Americas EBIT to be flattish, up a little, down a little versus 2025? In our view, it would be relatively flat, but want to hear what your thoughts are there.
George Staphos: Congratulations on the progress. Free cash flow, aside from being a record for you all, was, I think, one of the strongest free cash flows we've seen in the sector, you know, maybe top five over the last 10 years. So congratulations on that. I guess first thing that we had for Americas EBIT for the outlook for this year. Tim, you said, if I heard you correctly, North America is going to grow 2% to 3%. And then you mentioned it would be offset by inflation and startup costs for 2026. So in total, should we expect Americas EBIT to be flattish, up a little, down a little versus 2025? In our view, it would be relatively flat, but want to hear what your thoughts are there.
Speaker #6: progress. A free cash flow aside from being a record for you all was, I think, one of the strongest free cash flows we've seen in the sector, maybe top five over the last 10 years.
Speaker #6: So congratulations on that. I guess first America's EBIT for the outlook for this year, Tim, you said if I heard you correctly, North America is going to grow 2 to 3%.
Speaker #6: versus 2025? In our view, is it to be relatively flat, but want to hear what your thoughts are there. And then second question, then I might have a follow-on.
George Staphos: And then second question that I might have a follow-on: did you mention specifically what you expect European volume to be growing at this year based on your intelligence at this juncture? If you had that and could share it, we'd take that.
George Staphos: And then second question that I might have a follow-on: did you mention specifically what you expect European volume to be growing at this year based on your intelligence at this juncture? If you had that and could share it, we'd take that.
Speaker #6: Did you mention specifically what you expect European volume to be growing at this year based on your intelligence at this juncture?
Speaker #6: And if you had that, okay.
Timothy Donahue: Okay. I'll take them in order, George. So I think, you know, Americas beverage, we expect income in the segment currently to be down a touch. And that'll just be the ongoing inflationary impacts from labor, tariffs, what have you, combined with some startup cost in Brazil for the new line in Brazil, offsetting the volume gains that we mentioned that we see in North America, 2 to 3%. European beverage, to your question, we did not give you a forecast for volume growth. I'm hesitant. You know, we had 10% in 2025. You know, if you want to pencil in 4 to 5%, let's start there, and we'll see how the year progresses. But things look very strong in Europe right now, as you're hearing in the marketplace, not only from us but from others. And we'll see how the year progresses.
Timothy Donahue: Okay. I'll take them in order, George. So I think, you know, Americas beverage, we expect income in the segment currently to be down a touch. And that'll just be the ongoing inflationary impacts from labor, tariffs, what have you, combined with some startup cost in Brazil for the new line in Brazil, offsetting the volume gains that we mentioned that we see in North America, 2 to 3%. European beverage, to your question, we did not give you a forecast for volume growth. I'm hesitant. You know, we had 10% in 2025. You know, if you want to pencil in 4 to 5%, let's start there, and we'll see how the year progresses. But things look very strong in Europe right now, as you're hearing in the marketplace, not only from us but from others. And we'll see how the year progresses.
Speaker #7: I'll take them in order, think America's George. So I segment currently to beverage we expect income in the labor tariffs, what have you, combined with some startup cost in Brazil for the new line in Brazil.
Speaker #7: '25. If you want to pencil in 4 to 5%, let's start there. And we'll see how the year progresses, but things Offsetting the volume gains that we look very strong in Europe right now as you're hearing in the And we'll see how the year progresses, but we're marketplace, not only from us but from others.
Timothy Donahue: But we're very bullish on Europe.
Timothy Donahue: But we're very bullish on Europe.
Speaker #7: very bullish on
Speaker #7: Europe.
Speaker #6: Okay. I appreciate that, Tim. If we
George Staphos: Okay. I appreciate that, Tim. If we think specifically about North America and Europe, and, you know, whenever you talk about end-market questions, a lot of times it winds up being all of the above. Are there particular end markets, though, or events you think will help to drive the volume? You know, World Cup, you know, America's 250 was mentioned on another call. You know, what do you think will be an important driver of the volume growth you see in both regions in 2026? And if you could summarize sort of what's happening.
George Staphos: Okay. I appreciate that, Tim. If we think specifically about North America and Europe, and, you know, whenever you talk about end-market questions, a lot of times it winds up being all of the above. Are there particular end markets, though, or events you think will help to drive the volume? You know, World Cup, you know, America's 250 was mentioned on another call. You know, what do you think will be an important driver of the volume growth you see in both regions in 2026? And if you could summarize sort of what's happening.
Speaker #6: America and Europe, and whenever you talk about end market questions, a lot of times it winds up being all of the above. Are there think specifically about North though, or events you think will volume?
Speaker #6: World Cup, America's 250 was mentioned on another call. What do you think will be an important driver of the volume growth help to drive the you see in both regions in
Speaker #6: 2026? And if you could. Consider what's Well, I think.
Speaker #6: happening. Starting with
Timothy Donahue: Well, I think starting with Europe, you know, Europe doesn't have the beer problem that we seem to have in North America. So we continue to see beer growth in cans, conversion from glass to cans. And we do see, to the extent there is new filling capacity installed, it's more likely being can filling capacity installed as opposed to plastic filling. So when you look at all the other products, soft drinks, and other, we see the substrate shift continuing to accelerate can demand across Europe. And so, you know, that would be, you know, the answer to your question, almost all products. In the United States, again, what we're looking at is energy being very strong. We're not a big player in energy, but where we do participate in energy, our customers are doing well.
Timothy Donahue: Well, I think starting with Europe, you know, Europe doesn't have the beer problem that we seem to have in North America. So we continue to see beer growth in cans, conversion from glass to cans. And we do see, to the extent there is new filling capacity installed, it's more likely being can filling capacity installed as opposed to plastic filling. So when you look at all the other products, soft drinks, and other, we see the substrate shift continuing to accelerate can demand across Europe. And so, you know, that would be, you know, the answer to your question, almost all products. In the United States, again, what we're looking at is energy being very strong. We're not a big player in energy, but where we do participate in energy, our customers are doing well.
Speaker #7: Europe, Europe doesn't have the beer problem that we seem to have in North America. So we continue to see beer growth in cans conversion from glass to cans.
Speaker #7: see to the extent there is new filling capacity installed, And we do it's more likely being can filling capacity installed as opposed to plastic filling.
Speaker #7: So when you look at all the other products, soft drinks and other, we see the substrate shift continuing to accelerate can demand across Europe.
Speaker #7: And so that would be the answer to your question. Almost all products. In the United States, again, what we're looking at is energy being very do participate in strong.
Speaker #7: well. Flavored We're not a big player in energy, but where we sparkling water doing well. With carbonated soft drinks appearing to hold their own in cans and alcohols, doing exceptionally well.
Timothy Donahue: Flavored alcohols doing exceptionally well, and sparkling water doing well, with carbonated soft drinks appearing to hold their own in cans. And, you know, at some point, beer is going to return to flat or growth. So again, not very big market for us in North America. But when it does, you know, we're actually quite big in beer in Canada. I shouldn't say that. But Canada doesn't have the same problems as the US. So again, spread across numerous products and/or end markets. But to your point, I don't know if America 250 really drives much. But certainly, the World Cup will, especially as it's based in the United States and there's so much focus globally on the US anyway, and being in the same hemisphere as South America and Mexico, I think we look forward to that as well.
Timothy Donahue: Flavored alcohols doing exceptionally well, and sparkling water doing well, with carbonated soft drinks appearing to hold their own in cans. And, you know, at some point, beer is going to return to flat or growth. So again, not very big market for us in North America. But when it does, you know, we're actually quite big in beer in Canada. I shouldn't say that. But Canada doesn't have the same problems as the US. So again, spread across numerous products and/or end markets. But to your point, I don't know if America 250 really drives much. But certainly, the World Cup will, especially as it's based in the United States and there's so much focus globally on the US anyway, and being in the same hemisphere as South America and Mexico, I think we look forward to that as well.
Speaker #7: At some point, beer is going to return to flat or gross. So again, not a very big market for us in North America, but when it does, we're actually quite big in beer in Canada.
Speaker #7: I shouldn't say that. But in Canada, it doesn't have the same problems as the US. So again, spread across numerous products. And our end markets, but to your point, I don't know if America 250 really drives much, but certainly the World Cup will, especially as it's based in the United States and there's so much And being in the same hemisphere as South America and Mexico, I think we look forward to that as focus globally on the US anyway. And well.
Speaker #7: I shouldn't say that. But in Canada, it doesn't have the same problems as the US. So again, spread across numerous products. And our end markets, but to your point, I don't know if America 250 really drives much, but certainly the World Cup will, especially as it's based in the United States and there's so much And being in the same hemisphere as South America and Mexico, I think we look forward to that as focus globally on the US anyway.
George Staphos: Got it. My last one, I'll turn over. You know, again, free cash flow is a record. Next this year, obviously, you've called out, understandably, maybe down a bit. As we look forward, do you think you can grow free cash flow in line? You know, maybe pick the middle of the two ranges, call it $1 billion between what you did last year and what you'll do this year in guidance. Do you think you can grow from that level in line with volume, or do you think we've more or less reached kind of a plateau because the growth that you'll see in volume will require investment spending? How should we think about your ability to get free cash flow to the bottom line, given the volume growth that you see in the sector? Thanks and good luck in the quarter.
George Staphos: Got it. My last one, I'll turn over. You know, again, free cash flow is a record. Next this year, obviously, you've called out, understandably, maybe down a bit. As we look forward, do you think you can grow free cash flow in line? You know, maybe pick the middle of the two ranges, call it $1 billion between what you did last year and what you'll do this year in guidance. Do you think you can grow from that level in line with volume, or do you think we've more or less reached kind of a plateau because the growth that you'll see in volume will require investment spending? How should we think about your ability to get free cash flow to the bottom line, given the volume growth that you see in the sector? Thanks and good luck in the quarter.
Speaker #6: last one, I'll turn it over. Again, free cash flow is a record. This year, obviously, you've called out, understandably, maybe down a bit. As we look forward, do you think you can grow free cash flow in line?
Speaker #6: Maybe pick the middle of the two ranges, call it a billion dollars between what you did last year and what you'll do this year in guidance.
Speaker #6: from that level in line with volume or do you think we've more or less reached kind of a plateau because Do you think you can grow the growth that you'll see in volume will require investment spending?
Speaker #6: How should we think bottom line given the volume growth that about your ability to get free cash flow to the you see in the sector?
Speaker #6: Thanks and good luck in the quarter.
Speaker #7: Thank you, George. I think Kevin stared at me. I think that what Kevin would tell us is that a billion dollars seems like a reasonable and sustainable free cash flow number as we look to the future with a moderately reduced capital number.
Timothy Donahue: Thank you, George. I think Kevin staring at me, I think that what Kevin would tell us is that $1 billion seems like a reasonable and sustainable free cash flow number as we look to the future with a moderately reduced capital number. You know, we're looking at $550. But if we think about $450 to 500 on an ongoing basis, that supports fairly good growth opportunities into the future, that $1 billion is not unreasonable.
Timothy Donahue: Thank you, George. I think Kevin staring at me, I think that what Kevin would tell us is that $1 billion seems like a reasonable and sustainable free cash flow number as we look to the future with a moderately reduced capital number. You know, we're looking at $550. But if we think about $450 to 500 on an ongoing basis, that supports fairly good growth opportunities into the future, that $1 billion is not unreasonable.
Speaker #7: We're looking at 550, but if we think about 450 to 500 on an ongoing basis, that supports fairly good growth opportunities into the future, that a billion dollars is not unreasonable.
Speaker #7: We're looking at 550, but if we think about 450 to 500 on an ongoing basis, that supports fairly good growth opportunities into the future, that a billion dollars is not
Speaker #6: You should be able to grow off that level then if you hold the CapEx where it is and you get the volume growth, so.
George Staphos: So you should be able to grow off that level then if you hold the CapEx where it is and you get the volume growth, so.
George Staphos: So you should be able to grow off that level then if you hold the CapEx where it is and you get the volume growth, so.
Speaker #7: Yes.
Timothy Donahue: Yes.
Timothy Donahue: Yes.
Speaker #6: Thank you, guys. I'll turn it over.
George Staphos: Thank you, guys. I'll turn it over.
George Staphos: Thank you, guys. I'll turn it over.
Operator: Thank you. Our next question will be coming from Phil Ng of Jefferies. Your line is open.
Operator: Thank you. Our next question will be coming from Phil Ng of Jefferies. Your line is open.
Speaker #2: Jefferies. Your line is
Speaker #2: open.
Speaker #8: Hey, guys. Congrats on another strong
Phil Ng: Hey, guys. Congrats on another strong quarter. Tim, it was helpful to give us some perspective that perhaps this year you're seeing some startup costs around Brazil and, I guess, some timing nuances around inflation. But when we look at the 2027 and beyond, appreciating you generate record margins, should we expect operating leverage in this business? How should we think about that going forward, especially with some of these costs winding down perhaps in 2027?
Philip Ng: Hey, guys. Congrats on another strong quarter. Tim, it was helpful to give us some perspective that perhaps this year you're seeing some startup costs around Brazil and, I guess, some timing nuances around inflation. But when we look at the 2027 and beyond, appreciating you generate record margins, should we expect operating leverage in this business? How should we think about that going forward, especially with some of these costs winding down perhaps in 2027?
Speaker #8: quarter. Tim, it was helpful to give us some perspective that perhaps this year you're seeing some startup costs around Brazil and, I guess, some timing nuances around inflation.
Speaker #8: But when we look at the 2027 and beyond, I appreciate you generating record margins. Should we expect operating leverage in this business? How should we think about that going forward?
Speaker #8: Especially with some of these costs winding down perhaps in 2027.
Timothy Donahue: Yeah. Listen, I think one thing we've done really well over the last 6, 7 years is convert new capacity into margins that you would expect or even margins that were beyond your expectations. I think our focus has been on trying to earn returns on capital that we employ. We don't necessarily need to have every account to feel good about ourselves. We're not looking just to fill factories up. We're not looking to just be big. We're looking to be profitable. And I think we've managed to do that well over the last several years. You know, the whole issue about leverage, it's a nice term. I'm curious what it means when we hear the term. But, you know, our goal is to continually generate more income.
Timothy Donahue: Yeah. Listen, I think one thing we've done really well over the last 6, 7 years is convert new capacity into margins that you would expect or even margins that were beyond your expectations. I think our focus has been on trying to earn returns on capital that we employ. We don't necessarily need to have every account to feel good about ourselves. We're not looking just to fill factories up. We're not looking to just be big. We're looking to be profitable. And I think we've managed to do that well over the last several years. You know, the whole issue about leverage, it's a nice term. I'm curious what it means when we hear the term. But, you know, our goal is to continually generate more income.
Speaker #7: think one thing we've Yeah. done really well over the Listen, I last six, seven years is convert new capacity into margins that you would expect or even margins that were beyond your expectations.
Speaker #7: I think our focus has been on trying to earn returns on capital that we employ. We don't necessarily need to have every account to feel good about ourselves.
Speaker #7: factories up. We're not looking to just be big. We're not looking just to fill We're looking to be profitable. And I think we've managed to do that well over the last several years.
Speaker #7: The whole issue about leverage - it's a nice term - I always am curious what it means when we hear the term, but our goal is to continually generate more income.
Timothy Donahue: You know, as you know, Phil, that sometimes percentage margins are a little bit misleading from one year to the next only because of the pass-through of raw materials. And you should expect, as long as aluminum stays elevated, for percentage margins to contract a bit because of the denominator effect. But, you know, the goal is to generate more absolute margin and more cash flow as we go forward. And I don't see any reason why, if we look out over the next five years compared to the last five years, we shouldn't be as similarly successful as we were over the last five years.
Timothy Donahue: You know, as you know, Phil, that sometimes percentage margins are a little bit misleading from one year to the next only because of the pass-through of raw materials. And you should expect, as long as aluminum stays elevated, for percentage margins to contract a bit because of the denominator effect. But, you know, the goal is to generate more absolute margin and more cash flow as we go forward. And I don't see any reason why, if we look out over the next five years compared to the last five years, we shouldn't be as similarly successful as we were over the last five years.
Speaker #7: As you know, Phil, that sometimes percentage margins are a little bit misleading from one year to the next only because of the pass-through of raw materials.
Speaker #7: And you should expect as long as aluminum stays elevated for percentage margins, to contract a bit because of the denominator effect. But the goal is to generate more absolute margin and more cash flow as you go forward.
Speaker #7: And I don't see any reason why if we look out over the next five years compared to the last five years, we shouldn't be as similarly successful as we were over the last five
Speaker #7: years. Okay.
Phil Ng: Okay. Great color, Tim. In terms of Brazil, a little softer in 2025. You know, one of your competitors talking about perhaps some destocking into channel to start the year. Help us think through what you're seeing on the ground from a Brazil standpoint. Certainly, some excitement around the World Cup, but also in the uneven macro environment. Are you seeing any trade down into, like, refillable glass like we've seen in past cycles?
Philip Ng: Okay. Great color, Tim. In terms of Brazil, a little softer in 2025. You know, one of your competitors talking about perhaps some destocking into channel to start the year. Help us think through what you're seeing on the ground from a Brazil standpoint. Certainly, some excitement around the World Cup, but also in the uneven macro environment. Are you seeing any trade down into, like, refillable glass like we've seen in past cycles?
Speaker #8: Great color, Tim. In terms of Brazil, a little softer in 2025—one of your competitors talking about perhaps some destocking in the channel to start the year.
Speaker #8: Help us think through what you're seeing on the ground from a Brazil standpoint. Certainly, some excitement around the World Cup, but also in the uneven macro environment.
Speaker #8: Are you seeing any trade down into refillable glass like we've seen in past cycles?
Speaker #7: Well, there has been less consumption combined with a move back towards large 600-milliliter bottles that are shareable among people when they're out. Listen, the economy in Brazil probably—I don't know enough to say that.
Timothy Donahue: Well, there has been less consumption combined with a move back towards large 600-milliliter bottles that are shareable among people when they're out. Listen, the economy in Brazil is. I shouldn't say the economy. I don't know enough to say that. But we do know the consumer is a little weaker than we would like. Now, having said that, and you've heard us say this over time, we don't get overly concerned from one quarter to the next or even one year to the next in Brazil. It's another market that's been exceptionally robust for the can industry. I think we've all done really well. And as we look at any three to five-year period, you know, at the end of that three to five-year period, do you believe you're going to be in a better place than you were three or five years ago? And we believe, yes.
Timothy Donahue: Well, there has been less consumption combined with a move back towards large 600-milliliter bottles that are shareable among people when they're out. Listen, the economy in Brazil is. I shouldn't say the economy. I don't know enough to say that. But we do know the consumer is a little weaker than we would like. Now, having said that, and you've heard us say this over time, we don't get overly concerned from one quarter to the next or even one year to the next in Brazil. It's another market that's been exceptionally robust for the can industry. I think we've all done really well. And as we look at any three to five-year period, you know, at the end of that three to five-year period, do you believe you're going to be in a better place than you were three or five years ago? And we believe, yes.
Speaker #7: But we do know the consumer is a little weaker than we would like. Now, having said that, and is—I shouldn't say the economy. you've heard us say this over time, we don't get overly That's next or even one year to the next in Brazil.
Speaker #7: It's another market that's been exceptionally robust for the canned industry. I think we've all done really well. And as we look at any three to five-year period, at the end of that three to five-year period, do you believe you're going to be in a better place than you were three or five years ago?
Speaker #7: And we believe yes. So I don't—I know your focus is on trying to forecast immediate and then maybe 18 months out. And we have a longer focus than that.
Timothy Donahue: So, I don't, you know, I know your focus is on trying to forecast immediate and then maybe 18 months out. We have a longer focus than that. But we still remain very positive on Brazil. You know, it'll come back. It is a market where the can is really well positioned across beer. We continue to see that doing well.
Timothy Donahue: So, I don't, you know, I know your focus is on trying to forecast immediate and then maybe 18 months out. We have a longer focus than that. But we still remain very positive on Brazil. You know, it'll come back. It is a market where the can is really well positioned across beer. We continue to see that doing well.
Speaker #7: But we're still remaining very positive on Brazil. And it'll come back. And it is a market where the can is really well positioned across well.
Speaker #7: But we're still remaining very positive on Brazil. And it'll come back. And it is a market where the can is really well positioned across beer and we continue to see that doing
Speaker #8: And I may have missed it, Tim. Did you give us your outlook for 2026 for Brazil from a growth standpoint?
George Staphos: I may have missed it, Tim. Did you give us your outlook for 2026 for Brazil from a growth standpoint?
George Staphos: I may have missed it, Tim. Did you give us your outlook for 2026 for Brazil from a growth standpoint?
Speaker #7: Did not. I think it's probably a bit too early to say that. But let's—if you want to—it's early, but if you wanted to use 3%, you could use 3% for the industry and for Crown.
Timothy Donahue: Did not. I think it's probably a bit too early to say that. But let’s, you know, if you wanted, it’s early, but if you wanted to use 3%, you could use 3% for the industry and for Crown.
Timothy Donahue: Did not. I think it's probably a bit too early to say that. But let’s, you know, if you wanted, it’s early, but if you wanted to use 3%, you could use 3% for the industry and for Crown.
Speaker #8: Okay. Helpful. Thank you.
George Staphos: Okay. Helpful. Thank you.
George Staphos: Okay. Helpful. Thank you.
Speaker #7: That's a market that develops.
Timothy Donahue: We'll see how the market develops.
Timothy Donahue: We'll see how the market develops.
Speaker #8: Okay. Thank you.
George Staphos: Okay. Thank you.
George Staphos: Okay. Thank you.
Operator: Thank you. Our next question will be coming from Ghansham Panjabi, Baird. Your line is open.
Operator: Thank you. Our next question will be coming from Ghansham Panjabi, Baird. Your line is open.
Speaker #2: Uber. Your line is question will be coming from Gunchan Punjabi Thank you. Our next
Speaker #2: open. Yeah.
Speaker #8: Thanks, operator. Good morning, everybody. I guess going back to the North American beverage outlook of 2 to 3 percent volume growth for '26, for you specifically, is that also your assumption for industry growth for the year?
George Staphos: Yeah. Thanks, Arpito. Good morning, everybody. I guess, you know, going back to the North American beverage outlook of 2% to 3% volume growth for 2026, for you specifically, is that also your assumption for industry growth for the year? And then just related to that, where are you on capacity utilization in North America relative to, you know, the bit of growth that the industry saw last year or at least over the last couple of years? Just curious as to where you stand on capacity.
Ghansham Panjabi: Yeah. Thanks, Arpito. Good morning, everybody. I guess, you know, going back to the North American beverage outlook of 2% to 3% volume growth for 2026, for you specifically, is that also your assumption for industry growth for the year? And then just related to that, where are you on capacity utilization in North America relative to, you know, the bit of growth that the industry saw last year or at least over the last couple of years? Just curious as to where you stand on capacity.
Speaker #8: that, where are you on capacity utilization in And then just related to North America relative to the bit of growth that the industry saw last year or at least over the last couple of years?
Speaker #8: Just curious as to where you stand on capacity.
Speaker #7: So I think the Gunchan, the market in '25, probably up 2 to 3 percent, maybe 2 and a half percent. I think as we look to 2026, again, it feels like the market should be up 2 to 3 percent.
Timothy Donahue: So I, you know, I think Ghansham, the market in 2025, probably up 2% to 3%, maybe 2.5%. I think as we look to 2026, again, it feels like the market should be up 2% to 3%. I think capacity in the industry is tight. I know we are tight, you know, notwithstanding perhaps there is some capacity coming online. I still think that with the growth we see, you know, 2% growth on a 120 billion can market is 2.5 billion cans. That's a can plant with 2 lines at full operating speed. So it should absorb any new capacity coming online. So I expect the market's going to remain tight.
Timothy Donahue: So I, you know, I think Ghansham, the market in 2025, probably up 2% to 3%, maybe 2.5%. I think as we look to 2026, again, it feels like the market should be up 2% to 3%. I think capacity in the industry is tight. I know we are tight, you know, notwithstanding perhaps there is some capacity coming online. I still think that with the growth we see, you know, 2% growth on a 120 billion can market is 2.5 billion cans. That's a can plant with 2 lines at full operating speed. So it should absorb any new capacity coming online. So I expect the market's going to remain tight.
Speaker #7: I think capacity in the industry is tight. I know we are tight. Notwithstanding perhaps there is some capacity coming online, I still think that with the growth we see, 2% growth on 120 billion can market is 2 and a half billion cans.
Speaker #7: That's a can plant with two lines at full operating speed. So it should absorb any new capacity coming online. So I expect the market's going to remain
Speaker #7: tight. Okay.
George Staphos: Okay. Thank you for that. And then, you know, as it relates to CapEx, I mean, you know, 2023, roughly $800 million CapEx. Last two years, half of that, you know, let's say roughly $400 million. And we're targeting $550 million for 2026. Is this the new baseline as it relates to how you think about the future? You know, this year, obviously, you're spending money in Europe and Latin America. Will that morph into the US 2027 onwards? And then just, you know, I would love to hear your thoughts as it relates to the affordability of the can as well, right? Obviously, aluminum's up significantly. Plastic prices have done very little, if not go down. And so the divergence between the two, you know, how does that affect your thoughts as it relates to the, let's say, the competitiveness of the can?
Ghansham Panjabi: Okay. Thank you for that. And then, you know, as it relates to CapEx, I mean, you know, 2023, roughly $800 million CapEx. Last two years, half of that, you know, let's say roughly $400 million. And we're targeting $550 million for 2026. Is this the new baseline as it relates to how you think about the future? You know, this year, obviously, you're spending money in Europe and Latin America. Will that morph into the US 2027 onwards? And then just, you know, I would love to hear your thoughts as it relates to the affordability of the can as well, right? Obviously, aluminum's up significantly. Plastic prices have done very little, if not go down. And so the divergence between the two, you know, how does that affect your thoughts as it relates to the, let's say, the competitiveness of the can?
Speaker #8: Thank you for that. And then as it relates to CapEx, I mean, 2023, roughly 800 million CapEx. that. Let's say roughly 400. And Last two years, half of we're targeting 550 for '26.
Speaker #8: Is this the new baseline as it relates to how you think about the future? This year, obviously, you're spending money in Europe and Latin America.
Speaker #8: 2027 onwards? And then Will that morph into the US just I would love to hear your thoughts as it relates to the affordability of the can as well, right?
Speaker #8: Obviously, aluminum is up significantly. Plastic prices have done very little, if not go down. And so the divergence between the two, how does that affect your thoughts as it relates to the, let's say, the competitiveness of the
Speaker #8: can? Yeah.
Speaker #7: I wouldn't—I think I wouldn't read too much into the 550 this year. I think we have a situation in Europe where we need capacity and we need capacity to service customers in the Mediterranean, Greece, we have a pretty strong position Spain, and there.
Timothy Donahue: Yeah. I think I wouldn't read too much into the 550 this year. I think we have a situation in Europe where we need capacity. We need capacity to service customers in the Mediterranean, Greece, Spain. We have a pretty strong position there. We're oversold in the region. We just have to, you know, the Greece project is. We're on site with a Greece plant where we're going to remove two old, slower lines and put two high-speed lines in. We pick up a fair amount of capacity. We'll put another line into the plant in northern Spain. That's basically to service markets where we're oversold. You know, do we have other opportunities that we're looking at? Sure. We'll see how they manifest. But to your question about North America, I don't see, you know, never say never.
Timothy Donahue: Yeah. I think I wouldn't read too much into the 550 this year. I think we have a situation in Europe where we need capacity. We need capacity to service customers in the Mediterranean, Greece, Spain. We have a pretty strong position there. We're oversold in the region. We just have to, you know, the Greece project is. We're on site with a Greece plant where we're going to remove two old, slower lines and put two high-speed lines in. We pick up a fair amount of capacity. We'll put another line into the plant in northern Spain. That's basically to service markets where we're oversold. You know, do we have other opportunities that we're looking at? Sure. We'll see how they manifest. But to your question about North America, I don't see, you know, never say never.
Speaker #7: We're oversold in the region and we just have to—the Greece project is a—we're on site with a Greek plant where we're going to remove two old, slower lines and put two high-speed lines.
Speaker #7: capacity. And we'll put another line into the plant And we pick up a fair amount of in northern Spain. And that's basically to service markets where we're oversold.
Speaker #7: Do we have other opportunities that we're looking at? Sure. We'll see how they manifest. But to your question about North America, I don't see—never say never, but as we sit here today, I don't see any need for new capacity for Crown in North America over the next year or two.
Timothy Donahue: But as we sit here today, I don't see any need for new capacity for Crown in North America over the next year or two. The affordability of the can, you know, from production through delivery to the consumer, it still should be the cheapest and most effective way for our customers to deliver product to the consumer. Now, having said that, the aluminum is a lot, is up a lot. You know, I can't you know, you can't make heads or tails over what's going to happen with tariffs long-term and certainly the punishment that we're putting on some of our trading partners, specifically Canada as it relates to aluminum and the need for primary aluminum to come out of Canada. We have not enough primary production in the US, if any.
Timothy Donahue: But as we sit here today, I don't see any need for new capacity for Crown in North America over the next year or two. The affordability of the can, you know, from production through delivery to the consumer, it still should be the cheapest and most effective way for our customers to deliver product to the consumer. Now, having said that, the aluminum is a lot, is up a lot. You know, I can't you know, you can't make heads or tails over what's going to happen with tariffs long-term and certainly the punishment that we're putting on some of our trading partners, specifically Canada as it relates to aluminum and the need for primary aluminum to come out of Canada. We have not enough primary production in the US, if any.
Speaker #7: The affordability of the can, from production through delivery to the consumer, it still should be the cheapest and most effective way for our customers to deliver product to the consumer.
Speaker #7: Now, having said that, the aluminum is a lot is up a lot. I can't—you can't make heads or tails over what's going to happen with tariffs long-term and certainly the punishment that we're putting on some of our trading partners.
Speaker #7: Specifically, for primary aluminum to come out of Canada. We have not enough primary production in the US, if any. So like a lot of things in the new world, Gunchan, when we're talking about sustainability, we're forcing the cost of sustainability on the consumers.
Timothy Donahue: So like a lot of things in the new world, Ghansham, when we're talking about sustainability, we're forcing the cost of sustainability onto consumers. And we'll see how long consumers and retailers want to stay in line with their sustainability goals. And or are they just checking the box? And are they going to, you know, go back towards products that are less sustainable? But I think right now, we're not overly concerned as we look at volumes for 2026 and 2027 as it relates to the cost of aluminum. Demand appears to be very firm.
Timothy Donahue: So like a lot of things in the new world, Ghansham, when we're talking about sustainability, we're forcing the cost of sustainability onto consumers. And we'll see how long consumers and retailers want to stay in line with their sustainability goals. And or are they just checking the box? And are they going to, you know, go back towards products that are less sustainable? But I think right now, we're not overly concerned as we look at volumes for 2026 and 2027 as it relates to the cost of aluminum. Demand appears to be very firm.
Speaker #7: And we'll see how long consumers and retailers want to stay in line with their sustainability goals and/or they just checking the box and are they going to go back towards products that are less sustainable.
Speaker #7: But I think right now we don't—we're not overly concerned as we look at volumes for '26 and '27 as it relates to cost of aluminum, demand appears to be very firm.
Speaker #8: Okay. Thanks for that.
George Staphos: Okay. Thanks for that.
Ghansham Panjabi: Okay. Thanks for that.
Speaker #2: Thank you. Our next question will be coming from Watt Roberts, Raymond James. Your line is open.
Operator: Thank you. Our next question will be coming from Matt Roberts of Raymond James. Your line is open.
Operator: Thank you. Our next question will be coming from Matt Roberts of Raymond James. Your line is open.
Speaker #9: Hey, Tim, Kevin, Tom, good morning.
Matt Roberts: Hey, Tim, Kevin, Tom. Good morning.
Matthew Roberts: Hey, Tim, Kevin, Tom. Good morning.
[Company Representative] (Crown Holdings): Good morning.
Timothy Donahue: Good morning.
Speaker #7: Good morning.
Speaker #9: Firstly, what level of buybacks are assumed in the guide? And I know you have incremental CapEx, but still strong free cash flow generation. So is there any preference in leaning towards M&A, maybe in cans, or otherwise if there were hypothetically speaking any transformational opportunities out there?
Matt Roberts: Firstly, what level of buybacks are assumed in the guide? I know you have incremental CapEx, but still strong free cash flow generation. Is there any preference in leaning towards M&A, maybe in cans or otherwise, if there were, hypothetically speaking, any transformational opportunities out there?
Matthew Roberts: Firstly, what level of buybacks are assumed in the guide? I know you have incremental CapEx, but still strong free cash flow generation. Is there any preference in leaning towards M&A, maybe in cans or otherwise, if there were, hypothetically speaking, any transformational opportunities out there?
[Company Representative] (Crown Holdings): All right. So, Matt, in terms of what we baked into the guide, cash flow's $900 million. Assume dividends to shareholders and minority partners are, you know, $200 million, a little less than $250 million. So they could $650 million. We've assumed we would buy $650 million of stock, some each quarter, leaving us room to be opportunistic if we, you know, see a buying opportunity.
Kevin Clothier: All right. So, Matt, in terms of what we baked into the guide, cash flow's $900 million. Assume dividends to shareholders and minority partners are, you know, $200 million, a little less than $250 million. So they could $650 million. We've assumed we would buy $650 million of stock, some each quarter, leaving us room to be opportunistic if we, you know, see a buying opportunity.
Speaker #7: of what we All right. So Matt, in terms assume dividends to shareholders and minority partners are 200, a little less than 250. So that gives 650.
Speaker #7: We've assumed we would buy 650 million of stock. Some each quarter. Leaving us room to be opportunistic if we see a buying opportunity.
Timothy Donahue: Matt, on the second part of the question, I think the goal of every management team should be to improve its company, its portfolio of businesses. Now, having said that, and at the risk of insulting analysts, investors, and our other cohorts in the packaging space, we do not see any opportunities across packaging that would meaningfully improve Crown as a company. Therefore, our best use of our cash is investing in ourselves by returning cash to shareholders in the form of share buybacks.
Timothy Donahue: Matt, on the second part of the question, I think the goal of every management team should be to improve its company, its portfolio of businesses. Now, having said that, and at the risk of insulting analysts, investors, and our other cohorts in the packaging space, we do not see any opportunities across packaging that would meaningfully improve Crown as a company. Therefore, our best use of our cash is investing in ourselves by returning cash to shareholders in the form of share buybacks.
Speaker #4: question, I think the goal of every management And Matt, on the second part of the improve its company, its portfolio of businesses. Now, having said that, and at the risk of insulting analysts, investors, and our other cohorts in the packaging space, we do not see any opportunities across packaging that would meaningfully improve Crown as a company.
Speaker #4: Therefore, our best use of our cash is investing in ourselves by returning cash to shareholders in the form of share buybacks.
Speaker #9: Thank you, Tim and Kevin. I appreciate the color there. And maybe for my follow-up on a qualitative basis, also at risk of insulting others in packaging, we've certainly seen other peers have had abrupt management changes of late.
Matt Roberts: Thank you, Tim and Kevin. I appreciate the color there. And maybe for my follow-up on a qualitative basis, also at risk of insulting others in packaging, we've certainly seen other peers have had abrupt management changes of late. And your operations and stock performance certainly don't seem indicative of that. But in light of that, how do you think of succession planning or perhaps going against the grain of changes we've seen in packaging C-suites of late? Thank you for taking the questions.
Matthew Roberts: Thank you, Tim and Kevin. I appreciate the color there. And maybe for my follow-up on a qualitative basis, also at risk of insulting others in packaging, we've certainly seen other peers have had abrupt management changes of late. And your operations and stock performance certainly don't seem indicative of that. But in light of that, how do you think of succession planning or perhaps going against the grain of changes we've seen in packaging C-suites of late? Thank you for taking the questions.
Speaker #9: And your operations and stock performance certainly don't seem indicative of that. But in light of that, how do you think a succession planning or perhaps going against the grain of changes we've seen in packaging C-suites of late?
Speaker #9: Thank you for taking the questions.
Speaker #3: Well, I think one thing that helps an organization do well is stability. We've had the, at Crown, like all companies, we've had our ups and downs over decades.
Timothy Donahue: You know, I think one thing that helps an organization do well is stability. We've had the same at Crown, like all companies, we've had our ups and downs over decades. I have the privilege and the good fortune to lead an exceptional group of professionals at Crown. I think I'm only the fourth CEO in the last 70 years. I think that stability says a lot about the organization and the culture we have at Crown. We do have a number of internal candidates when the board decides they're tired of me. And we have a number of highly trained and experienced professionals in the can industry that are certainly prepared and ready to lead this organization going forward. But I think stability is very important. And I think we've been very fortunate at Crown to have stability for so many years.
Timothy Donahue: You know, I think one thing that helps an organization do well is stability. We've had the same at Crown, like all companies, we've had our ups and downs over decades. I have the privilege and the good fortune to lead an exceptional group of professionals at Crown. I think I'm only the fourth CEO in the last 70 years. I think that stability says a lot about the organization and the culture we have at Crown. We do have a number of internal candidates when the board decides they're tired of me. And we have a number of highly trained and experienced professionals in the can industry that are certainly prepared and ready to lead this organization going forward. But I think stability is very important. And I think we've been very fortunate at Crown to have stability for so many years.
Speaker #3: I have the privilege and the good fortune to at Crown. I'm—I think I'm lead an exceptional group of professionals only the fourth CEO in the last 70 years.
Speaker #3: I think that stability says a lot about the organization and the culture we have at Crown. We do candidates when the board of highly trained and decides they're tired of me.
Speaker #3: Experienced professionals in the canned, and we have a number certainly prepared and ready to lead this organization going forward. But I think stability is very important.
Speaker #3: And I think we've been very fortunate at Crown to have industry that are stability for so many
Speaker #9: I appreciate the thoughtful color again. Thank you, Jim.
Matt Roberts: Appreciate the thoughtful color again. Thank you, Jim.
Matthew Roberts: Appreciate the thoughtful color again. Thank you, Jim.
Speaker #2: Thank you. Our next question will be coming from Chris Parkinson of Wolfe Research. Your line is open.
Operator: Thank you. Our next question will be coming from Chris Parkinson of Wolfe Research. Your line is open.
Operator: Thank you. Our next question will be coming from Chris Parkinson of Wolfe Research. Your line is open.
Speaker #2: open. Thank you.
Christopher Parkinson: Thank you. So just a pretty quick question on Asia, just filling out the geographic landscape here. You know, you've improved your cost position pretty dramatically in terms of your asset base there. And yet, there have been competitive changes, you know, challenges in Indonesia, you know, skirmishes in, you know, Thailand and Laos. Just, you know, as it stands today, you know, how do you assess the growth of that market? And, Tim, understanding it's not going to be the next month or two, I'm not asking you to call that. But just when you think about that market, you know, over the next, you know, two years or so versus how you used to think about it in terms of, like, the ultimate profitability potential, what would the update be there? Thank you.
Christopher Parkinson: Thank you. So just a pretty quick question on Asia, just filling out the geographic landscape here. You know, you've improved your cost position pretty dramatically in terms of your asset base there. And yet, there have been competitive changes, you know, challenges in Indonesia, you know, skirmishes in, you know, Thailand and Laos. Just, you know, as it stands today, you know, how do you assess the growth of that market? And, Tim, understanding it's not going to be the next month or two, I'm not asking you to call that. But just when you think about that market, you know, over the next, you know, two years or so versus how you used to think about it in terms of, like, the ultimate profitability potential, what would the update be there? Thank you.
Speaker #10: So just a pretty quick question. On Asia, just filling out the geographic landscape here, you've improved your cost position pretty dramatically in terms of your asset base there.
Speaker #10: And yet there years. challenges in Indonesia. Laos. Just as it stands today, how do you assess the growth of that market? And Tim, understanding it's not going to be the next month or two, I'm not asking you to call that, but just when you think about that have been competitive changes so versus how you used to think about it in terms of the ultimate profitability potential, what would the update be there?
Speaker #10: Thank you.
Speaker #4: Yeah. Chris, I don't—not to be flippant, but we can get commercial adjustments. We can get all the growth we growth anytime we want it.
Timothy Donahue: Yeah. Chris, I don't want to be flippant, but we can get growth anytime we want it. If we just go into the market and make commercial adjustments, we can get all the growth we want. It's a constant evaluation as to what sort of commercial adjustments are necessary to get growth. And do those adjustments and growth improve the business long-term? It could be short-term pain or not. But do they improve the business long-term or not? And so that's a constant evaluation we do. But there's plenty of growth available in the Asian market. We do have a very low-cost structure across Asia. I think, you know, most of the companies we compete with in Asia are private companies and/or companies that don't publicly report.
Timothy Donahue: Yeah. Chris, I don't want to be flippant, but we can get growth anytime we want it. If we just go into the market and make commercial adjustments, we can get all the growth we want. It's a constant evaluation as to what sort of commercial adjustments are necessary to get growth. And do those adjustments and growth improve the business long-term? It could be short-term pain or not. But do they improve the business long-term or not? And so that's a constant evaluation we do. But there's plenty of growth available in the Asian market. We do have a very low-cost structure across Asia. I think, you know, most of the companies we compete with in Asia are private companies and/or companies that don't publicly report.
Speaker #4: We just go into the market and make to what sort of commercial adjustments are necessary to get growth. And do those market over the next two years or adjustments and growth improve the business long-term?
Speaker #4: want.
Speaker #4: It could be short-term pain or not, but do they improve the business long-term or not? And so that's a constant evaluation we do. But there's plenty of growth market.
Speaker #4: It could be short-term pain or not, but do they improve the business long-term or not? And so that's a constant evaluation we do. But there's plenty of growth available in the Asian We do have a very low-cost structure across Asia.
Speaker #4: I think most of the companies we compete with in Asia are private companies and/or companies that don't publicly report. But I would venture to say that our margin profile is therefore the target of many other Asian companies, having said Asia is the envy and well-positioned, and low-cost.
Timothy Donahue: But I would venture to say that our margin profile in Asia is the envy and therefore the target of many other Asian companies. Having said that, we are very large, well-positioned, and low-cost. So we can flex commercially to grow business. And we'll look to do a little of that this year in Asia.
Timothy Donahue: But I would venture to say that our margin profile in Asia is the envy and therefore the target of many other Asian companies. Having said that, we are very large, well-positioned, and low-cost. So we can flex commercially to grow business. And we'll look to do a little of that this year in Asia.
Speaker #4: So we can flex business, and we'll look to do a little of that this commercially to grow year in.
Speaker #4: Asia. And
Speaker #10: just drilling down a little bit more in Europe, is the growth that you mentioned you're bullish and kind of, I guess, were penciling in at least that mixing of digits, that 5-ish percentage growth rate.
Christopher Parkinson: And just, you know, drilling down a little bit more in Europe, you know, is the growth that you mentioned you're bullish and kind of were, I guess, were penciling in at least, you know, that mid-single digits, that 5-ish% growth rate. When you take a step back and look at, you know, Southern Europe versus the UK versus Northern Europe, are there any material differences in terms of, you know, the growth rate in terms of how it's hitting your business? Or is it essentially the same growth rate in all subregions across the board? Thank you.
Christopher Parkinson: And just, you know, drilling down a little bit more in Europe, you know, is the growth that you mentioned you're bullish and kind of were, I guess, were penciling in at least, you know, that mid-single digits, that 5-ish% growth rate. When you take a step back and look at, you know, Southern Europe versus the UK versus Northern Europe, are there any material differences in terms of, you know, the growth rate in terms of how it's hitting your business? Or is it essentially the same growth rate in all subregions across the board? Thank you.
Speaker #10: When you take a step back and look at Southern Europe versus the UK versus Northern Europe, are there any material differences in terms of the business?
Speaker #10: growth rate in terms of how it's hitting your markets we're not in.
Speaker #10: Or is it essentially the same growth rate in all sub-regions across the board? Thank you.
Speaker #10: you.
Speaker #3: Well, there are some
Timothy Donahue: Well, there are some markets we're not in. For example, we're not in Scandinavia. We have one plant in Eastern Europe. We're not very big in Eastern Europe. And we're not in Benelux. So I can't really comment, you know, so much on the growth rates in those markets. I can tell you that we do know that margins are different in those regions. Specifically in those regions, they're different from Scandinavia to Benelux, et cetera. And they're different from Southern Europe and into the Gulf States. But you've heard us from time to time in the past talk about tourism as it affects our business since we're so strong in Southern Europe. We had a very good year this year. And we foresee another very strong year across Southern Europe and into the Gulf States in 2026.
Timothy Donahue: Well, there are some markets we're not in. For example, we're not in Scandinavia. We have one plant in Eastern Europe. We're not very big in Eastern Europe. And we're not in Benelux. So I can't really comment, you know, so much on the growth rates in those markets. I can tell you that we do know that margins are different in those regions. Specifically in those regions, they're different from Scandinavia to Benelux, et cetera. And they're different from Southern Europe and into the Gulf States. But you've heard us from time to time in the past talk about tourism as it affects our business since we're so strong in Southern Europe. We had a very good year this year. And we foresee another very strong year across Southern Europe and into the Gulf States in 2026.
Speaker #3: For example, we're not in Scandinavia. We have one plant in Eastern Europe. We're not very big in Eastern Europe. And we're not in Benelux.
Speaker #3: So I can't really comment so much on the growth rates in those markets. I can tell you that we do know that regions. Specifically in those margins are different in those regions there are different from Scandinavia to Benelux, etc.
Speaker #3: And they're different from Southern Europe. And into the Gulf States. But you've heard us from time to time in the past talk about tourism as it affects our business since we're so strong in Southern Europe.
Speaker #3: We had a very good year this year. And we foresee another very strong year across Southern Europe and '26. differently than the competition. But having But regionally, we're set up a little said that, the entire into the Gulf States in market is doing well.
Timothy Donahue: But, you know, regionally, we're set up a little differently than the competition. But having said that, the entire market is doing well. And we expect everybody to do well across Europe.
Timothy Donahue: But, you know, regionally, we're set up a little differently than the competition. But having said that, the entire market is doing well. And we expect everybody to do well across Europe.
Speaker #3: expect everybody to do well across And we Europe.
Christopher Parkinson: Thank you so much.
Christopher Parkinson: Thank you so much.
Speaker #10: much. Thank you so
Speaker #2: you. Our next question will be coming from Mike Roxland of Troy Securities. Your line is open. Thank
Operator: Thank you. Our next question will be coming from Mike Roxland of Truist Securities. Your line is open.
Operator: Thank you. Our next question will be coming from Mike Roxland of Truist Securities. Your line is open.
Speaker #9: Thank you, Tim, Kevin, Tom, for taking my questions. Tim, can you just talk about what you've seen thus far in terms of demand in January and early read on February?
Mike Roxland: Thank you, Tim, Kevin, and Tom for taking my questions. Tim, can you just talk about what you've seen thus far in terms of demand in January and early read on February?
Michael Roxland: Thank you, Tim, Kevin, and Tom for taking my questions. Tim, can you just talk about what you've seen thus far in terms of demand in January and early read on February?
Speaker #3: Well, I think everything as we expected. I think perhaps the weather may have impacted some shipments, tractor trailers don't do real well on icy highways.
Timothy Donahue: Well, I think everything as we expected. I think perhaps the weather may have impacted some shipments. Tractor trailers don't do real well on icy highways. But February has started off, looks like it's more than fully recovering any shortfalls that were in January. So as expected.
Timothy Donahue: Well, I think everything as we expected. I think perhaps the weather may have impacted some shipments. Tractor trailers don't do real well on icy highways. But February has started off, looks like it's more than fully recovering any shortfalls that were in January. So as expected.
Speaker #3: But February has started off, looks like it's more than fully recovering any shortfalls that were in January. So as
Speaker #3: expected.
Speaker #9: Guys, maybe January a little
Mike Roxland: Got it. So maybe January a little bit weaker due to weather, things out of your control. But February doing better. Have you recovered any of that loss volume in January in this month thus far?
Michael Roxland: Got it. So maybe January a little bit weaker due to weather, things out of your control. But February doing better. Have you recovered any of that loss volume in January in this month thus far?
Speaker #9: A bit weaker due to weather; things out of your volume in January in this month.
Speaker #9: better. thus far? Have you recovered any of that loss
Speaker #3: Yeah.
Timothy Donahue: Yeah. I think that's what I just said. I think February more than recovering.
Timothy Donahue: Yeah. I think that's what I just said. I think February more than recovering.
Speaker #3: I think February more than
Speaker #3: recovering January.
Mike Roxland: Okay. Got it. Got it. Thank you for that, Tim. And then just on food can demand, obviously, I think you called out 5% food can growth in the quarter. What are you expecting for 2026? Do you expect to grow above the market? Are you gaining share in food cans? Any color you can provide around that. Thank you.
Michael Roxland: Okay. Got it. Got it. Thank you for that, Tim. And then just on food can demand, obviously, I think you called out 5% food can growth in the quarter. What are you expecting for 2026? Do you expect to grow above the market? Are you gaining share in food cans? Any color you can provide around that. Thank you.
Speaker #9: for that, Tim. And then just on food can demand, I think you called out 5% food can growth in the
Speaker #9: 2026? Do you expect to grow above the market? Are you gaining share in food cans? Any color you can provide around that? Thank you.
Speaker #9: you. I think Okay. control. Got it. Got it. Thank you
Speaker #9: you. I think Okay. control. Got it. Got it. Thank you I think that's what I just said. that our customer
Timothy Donahue: I think that our customer set and specifically our wet pet food gives us an opportunity to grow a touch above market. I think really, we and only one other company produce pet food cans at any size for the market. So we and the one other company are the beneficiaries of pet food growth, and pet food certainly growing more than human food in cans.
Timothy Donahue: I think that our customer set and specifically our wet pet food gives us an opportunity to grow a touch above market. I think really, we and only one other company produce pet food cans at any size for the market. So we and the one other company are the beneficiaries of pet food growth, and pet food certainly growing more than human food in cans.
Speaker #3: food gives us an opportunity to grow a touch above market. I think really we and only one other company produce pet food cans at any size for the market.
Speaker #3: So we and the one other company are the, and pet food certainly, growing more than human—beneficiaries of pet food growth.
Speaker #3: cans. Thank Thank you. food in
Mike Roxland: Thank you.
Michael Roxland: Thank you.
Timothy Donahue: Thank you.
Timothy Donahue: Thank you.
Speaker #2: Our next question will be coming from But February doing you. Stefan Diaz of Morgan Stanley. Your line is
Operator: Our next question will be coming from Stefan Diaz of Morgan Stanley. Your line is open.
Operator: Our next question will be coming from Stefan Diaz of Morgan Stanley. Your line is open.
Stefan Diaz: Hi, Tim. Hi, Kevin. Congrats on good 2025 results. Maybe just to begin, for the investments in Brazil, Greece, and Spain, I guess, how is that ramp going so far? And then as we think about 2026, you know, what type of volume pull-through should we expect from these investments? Or does incremental volumes from the investments really show up more in 2027?
Stefan Diaz: Hi, Tim. Hi, Kevin. Congrats on good 2025 results. Maybe just to begin, for the investments in Brazil, Greece, and Spain, I guess, how is that ramp going so far? And then as we think about 2026, you know, what type of volume pull-through should we expect from these investments? Or does incremental volumes from the investments really show up more in 2027?
Speaker #7: Kevin. Congrats. On good 2025
Speaker #7: results. Maybe just to Brazil, Greece, and open. Spain, I guess how is that ramp going so far? And then as we think about 2026, what type of volume pull-through should we begin, for the investments in expect from these investments?
Speaker #7: Or does incremental volumes from the investments really show up more?
Speaker #7: in 2027? Oh,
Speaker #3: these are mostly 2027. These year. So little this startups here won't happen until the back half of the year, some startup costs as we do training and other things, recruiting people, second quarter, third quarter, into the fourth quarter.
Timothy Donahue: Oh, these are mostly 2027. These startups here won't happen till the back half of the year. So little this year, some startup costs as we do training and other things, recruiting people Q2, Q3, into Q4, and most of the volume next year.
Timothy Donahue: Oh, these are mostly 2027. These startups here won't happen till the back half of the year. So little this year, some startup costs as we do training and other things, recruiting people Q2, Q3, into Q4, and most of the volume next year.
Speaker #3: And most of the volume next
Speaker #3: year. Okay.
Stefan Diaz: Okay. Great. Makes a lot of sense. And then it wasn't too long ago that, you know, investors were sort of worried about overcapacity and, you know, potential price pressures in North America. You know, one of your competitors signaled that they were pretty much tapped out of capacity in the region. You know, you came out today saying that you don't think you need to put more capacity in North America over the next 1 to 2 years. I guess, number one, how do you see utilization rates in the region? And then two, does Crown have capacity to potentially, you know, pick up some business if, you know, demand is a little better than forecasted? Thanks.
Stefan Diaz: Okay. Great. Makes a lot of sense. And then it wasn't too long ago that, you know, investors were sort of worried about overcapacity and, you know, potential price pressures in North America. You know, one of your competitors signaled that they were pretty much tapped out of capacity in the region. You know, you came out today saying that you don't think you need to put more capacity in North America over the next 1 to 2 years. I guess, number one, how do you see utilization rates in the region? And then two, does Crown have capacity to potentially, you know, pick up some business if, you know, demand is a little better than forecasted? Thanks.
Speaker #7: Great, makes a lot of sense. And then it wasn't too long ago that investors were sort of worried about potential price pressures in North America.
Speaker #7: One of much tapped out of capacity in the region. You came out today saying that you don't think you need to put more capacity in North Americo over the next one to two years.
Speaker #7: I guess number one, how do you see utilization rates in the region? And then two, does Crown have capacity your competitors signaled that they were pretty to potentially pick up some business if demand is a little better than forecasted?
Speaker #7: Thanks.
Speaker #3: Yeah. opportunity there if we generate a lot of cash Listen, I think we flow. That implies keeping capital at reasonable levels. We in other markets perhaps that have opportunities generate better and quicker returns right now than North America.
Timothy Donahue: Yeah. Listen, I think we don't see any need to put any capacity in. You know, we have a playbook that we're operating with that we want to generate a lot of cash flow. We think there's a great return opportunity there if we generate a lot of cash flow. That implies keeping capital at reasonable levels. We have opportunities in other markets, perhaps, that generate better and quicker returns right now than North America. And it does not appear that we need to put any capacity in North America. We have a little bit of open capacity, not that much. We certainly couldn't take a sizable customer on. And, you know, the opportunities elsewhere give us better opportunities. So having said that, you know, utilization is tight. It doesn't mean others won't put capacity in. But we don't need to chase it.
Timothy Donahue: Yeah. Listen, I think we don't see any need to put any capacity in. You know, we have a playbook that we're operating with that we want to generate a lot of cash flow. We think there's a great return opportunity there if we generate a lot of cash flow. That implies keeping capital at reasonable levels. We have opportunities in other markets, perhaps, that generate better and quicker returns right now than North America. And it does not appear that we need to put any capacity in North America. We have a little bit of open capacity, not that much. We certainly couldn't take a sizable customer on. And, you know, the opportunities elsewhere give us better opportunities. So having said that, you know, utilization is tight. It doesn't mean others won't put capacity in. But we don't need to chase it.
Speaker #3: don't see any need to put any capacity in. We have generate a lot of cash operating with that we want to a playbook that we're flow.
Speaker #3: And it does not appear that we need to put any capacity in North America. We have a little bit of open capacity, not that much.
Speaker #3: customer on. And the We certainly couldn't take a sizable opportunities elsewhere give us better So having said that, utilization is tight. opportunities. doesn't mean others won't put capacity in.
Speaker #3: it. So I think we're happy with the statement we made that we don't see the need for Crown to put any capacity don't need to chase over the next couple of years into North But we
Timothy Donahue: So I think we're happy with the statement we made that we don't see the need for Crown to put any capacity over the next couple of years into North America.
Timothy Donahue: So I think we're happy with the statement we made that we don't see the need for Crown to put any capacity over the next couple of years into North America.
Speaker #3: America. Thank you.
Operator: Thank you. Our next question will be coming from Josh Spector of UBS. Your line is open.
Operator: Thank you. Our next question will be coming from Josh Spector of UBS. Your line is open.
Speaker #2: Our next question will be coming from Josh Specter of UBS. Your line is open.
Anojja Shah: Hi. Good morning. It's Anojja Shah sitting in for Josh. I just wanted to go back. Good morning. I just wanted to go back to Europe for a while. Can you give us a little more detail on what you're doing in Spain and what's driving that kind of growth? Because if I recall correctly, I think you, in the last five years, you've added capacity to three different plants there. And maybe you can ballpark the current can per capita rate there versus, say, the UK just so we get a sense of how much runway there is.
Anojja Shah: Hi. Good morning. It's Anojja Shah sitting in for Josh. I just wanted to go back. Good morning. I just wanted to go back to Europe for a while. Can you give us a little more detail on what you're doing in Spain and what's driving that kind of growth? Because if I recall correctly, I think you, in the last five years, you've added capacity to three different plants there. And maybe you can ballpark the current can per capita rate there versus, say, the UK just so we get a sense of how much runway there is.
Speaker #10: Good morning. It's Anuja Shah, sitting in for Hi. Good, Josh. I just want...
Speaker #10: to go back. Morning. I just wanted to go back to Europe for a while. Can you give a little more detail on what you're doing in Spain and what's driving that kind of growth?
Speaker #9: Good morning.
Speaker #10: Thank you. In the—because if I recall correctly, in the last five years, you've added capacity to three different plants there. And maybe you can ballpark the current can per capita rate there versus, say, the UK, just so we get a sense of how much runway there is.
Speaker #3: I'm looking at to see if Tom can come up with a per capita can can market in Europe. It's probably the rate. Spain's not the largest second largest can market in Europe after the And so I think UK.
Timothy Donahue: I'm looking at that. We'll see if Tom can come up with a per capita can rate. You know, Spain's not the largest can market in Europe. It's probably the second largest can market in Europe after the UK. And so I think probably maybe seven years ago, we built a plant in Valencia, a new high-speed two-line plant. The plant in Agoncillo in the north of Spain in the Bilbao region that we're adding the line to now used to be a steel can plant, two-line steel can plant, slower, older lines. We ripped the steel lines out. We put a new aluminum line in. And now we're doubling the plant. We also make ends in that facility. And then in Seville, we have a two-line aluminum plant as well. So yeah, a lot of capital put into the market.
Timothy Donahue: I'm looking at that. We'll see if Tom can come up with a per capita can rate. You know, Spain's not the largest can market in Europe. It's probably the second largest can market in Europe after the UK. And so I think probably maybe seven years ago, we built a plant in Valencia, a new high-speed two-line plant. The plant in Agoncillo in the north of Spain in the Bilbao region that we're adding the line to now used to be a steel can plant, two-line steel can plant, slower, older lines. We ripped the steel lines out. We put a new aluminum line in. And now we're doubling the plant. We also make ends in that facility. And then in Seville, we have a two-line aluminum plant as well. So yeah, a lot of capital put into the market.
Speaker #3: probably 7, maybe 7 years ago, we built a plant in the Valencia, a new plant. The plant in high-speed two-line Agancio in the north of adding the line to now Spain in the Bilbao region that we're used to be a steel can plant two-line steel can We ripped the steel lines out.
Speaker #3: plant slower, older lines. And part of what makes our success is their success. And we continue to support their success by
Speaker #3: put a new aluminum line in. And now we're doubling the plant. We also make ends in that facility. And We then in Seville, we have a two-line aluminum plant as well.
Speaker #3: capital put into the market. But it's a market that we So yeah, a lot of enjoy pretty good relationships with two very large global customers.
Timothy Donahue: But it's a market that we enjoy pretty good relationships with two very large global customers. And, you know, part of what makes our success is their success. And we continue to support their success by investing.
Timothy Donahue: But it's a market that we enjoy pretty good relationships with two very large global customers. And, you know, part of what makes our success is their success. And we continue to support their success by investing.
Speaker #3: investing. Okay.
Anojja Shah: Okay. Great. Thank you. And then for my follow-up, Mexico recently raised the sugar beverage tax quite significantly, I think, starting this year. Can you remind us? I know a lot of your portfolio there is beer. But can you remind us what your soft drink exposure is there and what impact you expect this to have this year on your volumes?
Anojja Shah: Okay. Great. Thank you. And then for my follow-up, Mexico recently raised the sugar beverage tax quite significantly, I think, starting this year. Can you remind us? I know a lot of your portfolio there is beer. But can you remind us what your soft drink exposure is there and what impact you expect this to have this year on your volumes?
Speaker #10: Great. Thank you. And then for my follow-up, Mexico recently raised the sugar beverage tax quite significantly. I think starting this year. Can you remind us?
Speaker #10: I know a lot of your portfolio there is beer. But can you remind us what your soft drink exposure is there and what impact you expect this to have this year on your volumes?
Speaker #3: Yeah. I think that the majority of our business there is order of 10 to 15 percent. The balance mainly being
Timothy Donahue: Yeah. I think that the majority of our business there is beer, soft drinks for us, on the order of 10% to 15%, the balance mainly being beer.
Timothy Donahue: Yeah. I think that the majority of our business there is beer, soft drinks for us, on the order of 10% to 15%, the balance mainly being beer.
Speaker #3: beer. Okay.
Anojja Shah: Okay. Great. Thanks. I'll turn it over.
Anojja Shah: Okay. Great. Thanks. I'll turn it over.
Speaker #10: Great. Thanks. I'll turn it
Speaker #3: Thank
Timothy Donahue: Thank you.
Timothy Donahue: Thank you.
Speaker #2: Our next question will be coming from Capital Markets. Your line is open.
Operator: Our next question will be coming from Arun Viswanathan of RBC Capital Markets. Your line is open.
Operator: Our next question will be coming from Arun Viswanathan of RBC Capital Markets. Your line is open.
Speaker #2: from Arun Vishwanathan of RBC
Speaker #7: Great. Thanks for taking my you. questions. Hope you guys are well. Congrats on a successful
Stefan Diaz: Great. Thanks for taking my questions. Hope you guys are well. Congrats on a successful 2025. I guess, first off, in North America, so, you know, you discussed the strength and energy, your position there. You said CSD is kind of holding its own. And beer will come back. And, you know, there's also some commentary in Canada that you offered. I guess we've been hearing that one of your large CSD customers is interested in regaining some share. So I guess maybe you can just comment on your position with your customers in North America. Do you feel like you're well-positioned in CSD? Are you hearing any commentary from your customers about promotions and increasing those promotions to drive volume? A couple of years ago, they were really focused on price.
Arun Viswanathan: Great. Thanks for taking my questions. Hope you guys are well. Congrats on a successful 2025. I guess, first off, in North America, so, you know, you discussed the strength and energy, your position there. You said CSD is kind of holding its own. And beer will come back. And, you know, there's also some commentary in Canada that you offered. I guess we've been hearing that one of your large CSD customers is interested in regaining some share. So I guess maybe you can just comment on your position with your customers in North America. Do you feel like you're well-positioned in CSD? Are you hearing any commentary from your customers about promotions and increasing those promotions to drive volume? A couple of years ago, they were really focused on price.
Speaker #7: Off, in North America, you discussed the strength in energy. Your position there—you said CSD is kind of holding its own. And beer will come back.
Speaker #7: And there's also some commentary in Canada that you offered. I guess we've been hearing that one of your large CSD customers is interested in regaining some share.
Speaker #7: So, our position with your customers—guess maybe you can just comment on that. Do you feel like you're well-positioned in CSD? Are you hearing any openness?
Speaker #7: commentary from your customers about promotions and increasing those promotions to drive volume? A couple of years ago, they were really focused on price. But I'm just curious with the rising aluminum prices and worried about this demand holding up and if they would require a greater if now they're starting to get really continue to drive that demand in that 2 to 3 percent range.
Stefan Diaz: You know, I'm just curious with the rising aluminum prices and Midwest Premium, if now they're starting to get worried about this demand holding up and if they would require greater promotions to really continue to drive that demand in that 2% to 3% range? Thanks.
Arun Viswanathan: You know, I'm just curious with the rising aluminum prices and Midwest Premium, if now they're starting to get worried about this demand holding up and if they would require greater promotions to really continue to drive that demand in that 2% to 3% range? Thanks.
Speaker #7: promotions to
Speaker #7: Thanks. Yeah.
Timothy Donahue: Yeah. Listen, I think you're going to, if you watch the Super Bowl this weekend, you're going to see two really slick commercials. I don't know how many times they're each going to run them. But one of the major beer companies and one of the major soft drink companies are going to run some really, really slick commercials that are really well done. And in the case of the soft drink company, it focuses and showcases the can as the package in the commercial. So clearly, they spent some time. And I got to, you know, I'm not an advertising executive. But I got to tell you, these two commercials are exceptionally well done. And I'm going to assume the consumers are going to receive them very well. And hopefully, that kickstarts even more can consumption as we go through the rest of the year.
Timothy Donahue: Yeah. Listen, I think you're going to, if you watch the Super Bowl this weekend, you're going to see two really slick commercials. I don't know how many times they're each going to run them. But one of the major beer companies and one of the major soft drink companies are going to run some really, really slick commercials that are really well done. And in the case of the soft drink company, it focuses and showcases the can as the package in the commercial. So clearly, they spent some time. And I got to, you know, I'm not an advertising executive. But I got to tell you, these two commercials are exceptionally well done. And I'm going to assume the consumers are going to receive them very well. And hopefully, that kickstarts even more can consumption as we go through the rest of the year.
Speaker #3: Listen, I think you're going to if you watch the Super Bowl this weekend, you're going to slick see two really commercials - I don't know how many times they're each going to run them - one of the major soft drink companies are going to run some really, really slick commercials that are really well done and, in the case of the soft drink company, it but one of the major beer companies and the can as the focuses and showcases package in the commercial.
Speaker #3: So clearly, they spent some time and I got to I'm not an advertising exceptionally well done and I'm going executive. But I got to tell you, these two commercials are to assume the consumers are going to receive them very well.
Speaker #3: And hopefully, that kickstarts even more can consumption as we go through the rest of the year.
Stefan Diaz: Okay. And then I guess I'll ask on transit as well because we haven't talked that much about it. But, you know, is there anything else that you guys can do? You've taken out a lot of cost. But, you know, is there consolidation? Or is there anything else in the market that you think could be interesting from and could drive maybe a little bit better volume outlook for transit? Thanks.
Arun Viswanathan: Okay. And then I guess I'll ask on transit as well because we haven't talked that much about it. But, you know, is there anything else that you guys can do? You've taken out a lot of cost. But, you know, is there consolidation? Or is there anything else in the market that you think could be interesting from and could drive maybe a little bit better volume outlook for transit? Thanks.
Speaker #7: on transit as well because we haven't talked that much Okay. And I guess I'll ask about it. But what's the outlook there? I mean, obviously, very macro-driven.
Speaker #7: anything else that you guys can do? You've taken But is there on a lot of cost. is there consolidation? Or is there anything But think could be interesting else in the market that you from and could drive maybe a little bit better volume outlook for transit?
Speaker #7: Thanks.
Speaker #3: again, we can drive volume any way we want. We can go Well, cut price. We can make bolt-on acquisitions. We can do a lot of things.
Timothy Donahue: Well, again, you know, we can drive volume any way we want. We can go cut price. We can make bolt-on acquisitions. We can do a lot of things. What we've chosen to do in this business is have this business generate as much cash flow as it can for the organization in excess of $250 million a year with very little resources being given to this business. Now, if we're going to have an honest conversation about our transit business, our transit business generates margins even in a down cycle that are in excess of many of these other so-called high-value packaging franchises that you guys all write about.
Timothy Donahue: Well, again, you know, we can drive volume any way we want. We can go cut price. We can make bolt-on acquisitions. We can do a lot of things. What we've chosen to do in this business is have this business generate as much cash flow as it can for the organization in excess of $250 million a year with very little resources being given to this business. Now, if we're going to have an honest conversation about our transit business, our transit business generates margins even in a down cycle that are in excess of many of these other so-called high-value packaging franchises that you guys all write about.
Speaker #3: What we've chosen to do in this business is have this business generate as much cash flow as it can for the organization in excess of 250 million dollars a year.
Speaker #3: With very little resources being given to this business, now, if we're going to have an honest conversation about our transit business, our transit business generates margins even in a down cycle that are in excess of many of these other so-called high-value packaging franchises that you guys all write about.
Speaker #3: So, if we want to have an honest conversation about valuation and where this business sits in relation to other packaging companies, this business is, in our view, performing exactly as we need it to do.
Timothy Donahue: So if we want to have an honest conversation about valuation and where this business sits in relation to other packaging companies, this business is, in our view, performing exactly as we need it to do, very little resources being given to it generating exceptional cash.
Timothy Donahue: So if we want to have an honest conversation about valuation and where this business sits in relation to other packaging companies, this business is, in our view, performing exactly as we need it to do, very little resources being given to it generating exceptional cash.
Speaker #3: Very little resources being given to it, generating exceptional—I don't mean—
Speaker #3: Cash. That wasn't directed at you. Thank you, Arun. That was just a general comment.
Speaker #7: Thanks.
Mike Roxland: Thanks.
Arun Viswanathan: Thanks.
Operator: Thank you. Our next question will be coming.
Operator: Thank you. Our next question will be coming.
Timothy Donahue: I don't mean to hit you with that, Arun. That wasn't directed at you. That was just a general comment.
Timothy Donahue: I don't mean to hit you with that, Arun. That wasn't directed at you. That was just a general comment.
Speaker #7: No worries.
Mike Roxland: No worries. Thanks.
Arun Viswanathan: No worries. Thanks.
Speaker #7: Thanks. Thank you.
Operator: Thank you. Our next question will be coming from Anthony Pettinari of Citigroup. Your line is open.
Operator: Thank you. Our next question will be coming from Anthony Pettinari of Citigroup. Your line is open.
Speaker #2: Our next question will be coming from Anthony Pettinari of Citigroup. Your line is open.
Speaker #11: Good morning. Sorry if I missed this. But is it possible to put a finer point on the dollar impact of the startup costs in Brazil, Greece, and Spain?
George Staphos: Good morning. Sorry if I missed this. But is it possible to put a finer point on the dollar impact of the startup costs in Brazil, Greece, and Spain? And then in terms I guess of timing, I think you said those projects or the costs would be sort of second-half weighted. Just wondering if you can confirm that.
Anthony Pettinari: Good morning. Sorry if I missed this. But is it possible to put a finer point on the dollar impact of the startup costs in Brazil, Greece, and Spain? And then in terms I guess of timing, I think you said those projects or the costs would be sort of second-half weighted. Just wondering if you can confirm that.
Speaker #11: And then in terms—you said those projects or, I guess in terms of timing, I think costs would be sort of second-half weighted?
Speaker #11: Just wondering if you can confirm that.
Speaker #3: Projects are second-half weighted. Most of the startup costs are also second-half weighted. We'll start to hire and train people in Q2, so there is some cost there.
Timothy Donahue: Projects second-half weighted. Most of the startup costs second-half weighted. We'll start to hire and train people in Q2. So there is some cost there, not numbers we typically call out, just telling you that they're there. And it's part of doing business. If you want to grow your business, get used to it. It's a part of the cost. It's not a number we ever put too fine a point on. You can calculate this number a variety of different ways. But there are costs that are there. And it's a cost of doing business in a growing environment.
Timothy Donahue: Projects second-half weighted. Most of the startup costs second-half weighted. We'll start to hire and train people in Q2. So there is some cost there, not numbers we typically call out, just telling you that they're there. And it's part of doing business. If you want to grow your business, get used to it. It's a part of the cost. It's not a number we ever put too fine a point on. You can calculate this number a variety of different ways. But there are costs that are there. And it's a cost of doing business in a growing environment.
Speaker #3: Not numbers. We typically call out just telling you that they're there and it's part of doing business. If you want to grow your not a number we ever put too fine a point on.
Speaker #3: But they're costs that are there. You can calculate this just a part of the cost. We're And it's a cost of doing business and a growing environment.
Speaker #11: And then switching to Asia, I think you indicated that the Thailand-Cambodia conflict was basically responsible for I don't know if you said all of the shortfall or the majority of the shortfall.
George Staphos: Then switching to Asia, I think you indicated that the Thailand-Cambodia conflict was basically responsible for, I don't know, if you said all of the shortfall or the majority of the shortfall. I'm wondering if you can just provide any additional detail on that. Then in terms of sort of the state of play, in terms of that issue impacting volumes like right now, where are we? Do you maybe at some point lap that? Because I think the conflict sort of started last year and then sort of stopped. I'm just wondering if you can put any finer point on that.
Anthony Pettinari: Then switching to Asia, I think you indicated that the Thailand-Cambodia conflict was basically responsible for, I don't know, if you said all of the shortfall or the majority of the shortfall. I'm wondering if you can just provide any additional detail on that. Then in terms of sort of the state of play, in terms of that issue impacting volumes like right now, where are we? Do you maybe at some point lap that? Because I think the conflict sort of started last year and then sort of stopped. I'm just wondering if you can put any finer point on that.
Speaker #11: And I'm wondering if you could just provide any additional detail on that. And then in terms of sort of impacting volumes, right, the state of play in terms—we?
Speaker #11: now, where are And do you maybe at some point lap that? Because I think the conflict sort of started last year and then sort of stopped.
Speaker #11: Just wondering if you can put any finer point on that.
Timothy Donahue: Yeah. We'll lap that sometime in Q3. It's just a land dispute, one side arguing that they own 15 miles of border that the other side they own. You know, I don't know enough about it. Certainly, it's inappropriate for me to comment on what two governments are discussing. But it was responsible for more than our shortfall, especially in the Thai business.
Timothy Donahue: Yeah. We'll lap that sometime in Q3. It's just a land dispute, one side arguing that they own 15 miles of border that the other side they own. You know, I don't know enough about it. Certainly, it's inappropriate for me to comment on what two governments are discussing. But it was responsible for more than our shortfall, especially in the Thai business.
Speaker #3: sometime in the third Yeah. We'll lap that dispute. One side arguing that they of border that the other side is they own 15 miles own.
Speaker #3: I don't know enough about it. And certainly, it's inappropriate for me to comment on what two governments are discussing. But it was responsible for more quarter.
Speaker #3: Thai business.
Speaker #11: Okay, that's helpful. I'll turn it.
George Staphos: Okay. That's helpful. I'll turn it over.
Anthony Pettinari: Okay. That's helpful. I'll turn it over.
Speaker #11: over. Thank you.
Operator: Thank you. Our next question will be coming from Silke Kueck of J.P. Morgan. Your line is open.
Operator: Thank you. Our next question will be coming from Silke Kueck of J.P. Morgan. Your line is open.
Speaker #2: Our next question will be coming from Silke Kook of JP Morgan. Your line is open.
Speaker #12: Hi. Good morning. I'm sitting in for Jeff this
Silke Kueck: Hi. Good morning. I'm sitting in for Jeff this morning. In Europe, with the expansion that you're doing, so it's like 1 billion cans coming on in Greece and maybe 1 billion cans from the line in Spain. Your base capacity is maybe 15 or 16 billion. So is there a world where based on the capacity that you're bringing, your growth in Europe is higher than 4 to 5, maybe more like high single digits? Or that's too optimistic?
Silke Kueck: Hi. Good morning. I'm sitting in for Jeff this morning. In Europe, with the expansion that you're doing, so it's like 1 billion cans coming on in Greece and maybe 1 billion cans from the line in Spain. Your base capacity is maybe 15 or 16 billion. So is there a world where based on the capacity that you're bringing, your growth in Europe is higher than 4 to 5, maybe more like high single digits? Or that's too optimistic?
Speaker #12: Good morning. Open. In Europe, with the expansion that you're doing, it's like a billion cans coming online in Greece, and maybe like a billion cans from the line in Spain, and your base capacity is maybe 15 or 16 billion.
Speaker #12: So is there a world where you're based on the capacity that you're bringing, you're growth in Europe, is higher than four to five? Maybe more like high single digits? optimistic?
Speaker #12: So is there a world where you're based on the capacity that you're bringing, you're growth in Europe, is higher than four to five? Maybe more like high single digits?
Speaker #12: Or that's too
Speaker #3: Yeah. I think I caught our base capacity in Europe is probably bigger than the number you quoted if I heard you It's just a land But listen, I think the capacity we're bringing online the installation happens this year.
Timothy Donahue: Yeah. I think I caught what you said. I think our base capacity in Europe is probably bigger than the number you quoted if I heard you quote 16. But listen, I think the capacity we're bringing online, the installation happens this year. But through learning curve, you don't get the full run rate of that capacity for 18 to 30 months. So as you think about adding 5% or 6% capacity to a portfolio or a footprint, you're really looking, you don't really need to fill it out immediately because you don't produce that immediately. It gets produced over; it gets grown into over 18 to 30 months.
Timothy Donahue: Yeah. I think I caught what you said. I think our base capacity in Europe is probably bigger than the number you quoted if I heard you quote 16. But listen, I think the capacity we're bringing online, the installation happens this year. But through learning curve, you don't get the full run rate of that capacity for 18 to 30 months. So as you think about adding 5% or 6% capacity to a portfolio or a footprint, you're really looking, you don't really need to fill it out immediately because you don't produce that immediately. It gets produced over; it gets grown into over 18 to 30 months.
Speaker #3: But
Speaker #3: For 18, quote 16 to 30 months. So as you think about adding 5% or 6% capacity to footprint, you don't really need to fill it out immediately, because you don't produce that immediately.
Speaker #3: It gets produced a portfolio or a over it gets grown into months.
Speaker #3: over 18 to 30
Silke Kueck: Okay. Thank you.
Silke Kueck: Okay. Thank you.
Speaker #12: Thank
Speaker #12: you.
Timothy Donahue: Thank you.
Timothy Donahue: Thank you.
Speaker #2: All right. Edlin Rodriguez of Mizuho, your line is open. Our last question will be coming from you.
Operator: All right. Our last question will be coming from Edlain Rodriguez of Mizuho. Your line is open.
Operator: All right. Our last question will be coming from Edlain Rodriguez of Mizuho. Your line is open.
Speaker #13: Thank you. Good morning. I mean, just one quick one, Tim. So when you look at the portfolio right now, you're looking at the industry fundamentals, both beverage can and transit, most opportunities and challenges?
Edlain Rodriguez: Thank you. Good morning. I mean, just one quick one, Tim. So when you look at the portfolio right now, if you're looking at the industry fundamentals, both beverage, can, and transit, what are and where do you see the most opportunities and challenges?
Edlain Rodriguez: Thank you. Good morning. I mean, just one quick one, Tim. So when you look at the portfolio right now, if you're looking at the industry fundamentals, both beverage, can, and transit, what are and where do you see the most opportunities and challenges?
Timothy Donahue: Well, I think that the biggest challenge anybody has, we in the industry have done exceptionally well for the last five or six years. I think the challenge, for all of our managers as they lead the businesses, is to not get complacent, is to keep pushing forward and to do better. So that's number one. I think number two, trying to find the right balance between supporting our customers' growth objectives and ensuring that what we have to do to support their growth objectives returns fair value to us. And as an industry, we've done a little better over the last five or six years with that. I still think there's more we can do to return more value to our company and our shareholders in line with supporting our customers' growth objectives. Certainly, we do see beverage cans growing globally.
Timothy Donahue: Well, I think that the biggest challenge anybody has, we in the industry have done exceptionally well for the last five or six years. I think the challenge, for all of our managers as they lead the businesses, is to not get complacent, is to keep pushing forward and to do better. So that's number one. I think number two, trying to find the right balance between supporting our customers' growth objectives and ensuring that what we have to do to support their growth objectives returns fair value to us. And as an industry, we've done a little better over the last five or six years with that. I still think there's more we can do to return more value to our company and our shareholders in line with supporting our customers' growth objectives. Certainly, we do see beverage cans growing globally.
Speaker #3: I think that the biggest anybody has we've done we in the industry have done exceptionally challenge six years. And I think the challenge as well for the last five or you for all of our managers as they lead the businesses is to not get complacent, is to keep pushing forward.
Speaker #3: And to do better. So that's number one. I think number two, trying to find the right balance between supporting our customers' growth objectives and ensuring that what we have to do to support their growth objectives returns fair value to us.
Speaker #3: And as an industry, we've done a little better over the last five or six years with that. I still need to return more value to our company and our shareholders, in line with objectives.
Speaker #3: supporting our customers' growth Certainly, we do see beverage cans growing globally. The think there's more we can do and increasing profits is always one we look for.
Timothy Donahue: The intersection between growth and increasing profits is always one we look for. And so we're constantly focused on that as opposed to just trying to get bigger. And I do believe that, ultimately, these industrial markets are going to return. We get some clarity on tariffs. So if we can just stop changing what we say about tariffs, if we just had whatever they're going to be, if they just would be what they're going to be, and they don't change every day, then I think companies and purchasing managers across the industrial space could have a little bit more confidence in where they're going. Having said that, when that does happen, we do see significant upside to the transit profitability profile just given the amount of cost we've taken out over the last several years.
Timothy Donahue: The intersection between growth and increasing profits is always one we look for. And so we're constantly focused on that as opposed to just trying to get bigger. And I do believe that, ultimately, these industrial markets are going to return. We get some clarity on tariffs. So if we can just stop changing what we say about tariffs, if we just had whatever they're going to be, if they just would be what they're going to be, and they don't change every day, then I think companies and purchasing managers across the industrial space could have a little bit more confidence in where they're going. Having said that, when that does happen, we do see significant upside to the transit profitability profile just given the amount of cost we've taken out over the last several years.
Speaker #3: And so we're constantly focused on that, as opposed to just trying to get bigger. And I do believe that, ultimately, these industrial markets are going to return.
Speaker #3: We get some clarity on tariffs. So if we can just stop changing what we say about tariffs, if we just had whatever they're going to be, if they just would be what they're going to be and they don't change every day, then I think companies and purchasing managers across the industrial space could have a little bit more confidence in where they're going.
Speaker #3: And having said that, when that does happen, we do see significant upside to the profitability profile, just given the amount of cost we've taken out over the last several years.
Speaker #13: Okay. Okay. Great. And one last one, capital allocation. Stock is not too far from its all-time high, I believe. Is share buyback still a good use of capital in your view?
Edlain Rodriguez: Okay. Okay. Great. And one last one, capital allocation. Stock is not too far from its all-time high, I believe. Is share buyback still a good use of capital, in your view?
Edlain Rodriguez: Okay. Okay. Great. And one last one, capital allocation. Stock is not too far from its all-time high, I believe. Is share buyback still a good use of capital, in your view?
Speaker #3: Well, I think Kevin and his team will use a discipline approach when and how we shares. Depending on where interest rates go, you can make the argument that you want to continue to pay down debt.
Timothy Donahue: Well, I think Kevin and his team will use a disciplined approach when and how we choose to buy back shares. Depending on where interest rates go, you can make the argument that you want to continue to pay down debt. I think one of the challenges with paying down debt is it's really hard to make adequate returns when your leverage is too low. So 2.5 is a nice place to be. It feels like a sweet spot to be with leverage to generate as best return as you can. And we'll be intelligent as we use the cash flow that we generate when we're buying back shares.
Timothy Donahue: Well, I think Kevin and his team will use a disciplined approach when and how we choose to buy back shares. Depending on where interest rates go, you can make the argument that you want to continue to pay down debt. I think one of the challenges with paying down debt is it's really hard to make adequate returns when your leverage is too low. So 2.5 is a nice place to be. It feels like a sweet spot to be with leverage to generate as best return as you can. And we'll be intelligent as we use the cash flow that we generate when we're buying back shares.
Speaker #3: I think the one of the it's really hard to make challenges with paying down debt is low. So two and a half is a choose to buy back nice place to be.
Speaker #3: It feels like a sweet spot to be with leverage to generate as best return as you can. And we'll be intelligent as we use the cash flow that we generate when we're buying back
Speaker #3: shares.
Speaker #13: Okay. Thank
Edlain Rodriguez: Okay. Thank you.
Edlain Rodriguez: Okay. Thank you.
Speaker #3: Thank you, Edlin. Thank you for your question. So, we thank everybody for joining us, and we look forward to speaking with you again in a few months.
Timothy Donahue: Thank you, Edlain. So Elle, I think you said that was our last question. So we thank everybody for joining us. And we look forward to speaking with you again in a few months. Bye now.
Timothy Donahue: Thank you, Edlain. So Elle, I think you said that was our last question. So we thank everybody for joining us. And we look forward to speaking with you again in a few months. Bye now.
Speaker #3: Bye
Speaker #3: Now. And that concludes today's conference.
Operator: That concludes today's conference. Thank you, everyone, for participating. You may now disconnect.
Operator: That concludes today's conference. Thank you, everyone, for participating. You may now disconnect.
Speaker #2: Thank you, everyone, for participating. You may now disconnect.
