Crown Holdings, Inc. Q4 FY2025 earnings call

• The company delivered a solid quarter, with record adjusted EBITDA of almost $2.1 billion for the year, up from $1.9 billion in 2024, and record free cash flow of $1.146 billion. - Maintained net leverage target of 2.5 times. - Returned $625 million to shareholders in 2025, including $505 million in share repurchases and $120 million in dividends. - Beverage segment had strong performance in Europe but mixed results in Americas. - Transit Packaging continued to generate cash flow despite lower volumes. - Tinplate business benefited from food can volume growth and increased can-making equipment orders.

Beverage Segment: Fourth quarter global beverage can unit volumes were up 3%. Americas Beverage volumes: North American gains of 2.5% offset by 3% decline in Brazil; full-year North America volumes flat, Brazil down 3%. European beverage volumes increased 10% in Q4 and 10% for the full year, generating record segment income. Transit Packaging: Volumes lower in the quarter, but continued to generate significant cash flow while earning double-digit to low teens margins. Tinplate: North American tinplate businesses benefited from 5% food can volume growth in Q4; full-year Income and Other up 80% due to food can volume growth and improved operating performance across newly installed capacity.

• First quarter 2026 adjusted earnings per diluted share projected in the range of $1.70 to $1.80, full-year range $7.90 to $8.30 per share. - 2026 full-year free cash flow estimated at approximately $900 million after $550 million of capital spending. - Expect to maintain net leverage at targeted level of approximately 2.5 times. - Adjusted earnings guidance includes net interest expense, exchange rates, tax rate, depreciation, noncontrolling interest expense, dividends, and noncontrolling interest.

• Tariffs and trade conflicts (e.g., Thailand-Cambodia border conflict, Canada aluminum tariffs) impacting volumes. - Macro-economic conditions affecting consumer purchasing power in Asia. - Sustainability and cost implications of aluminum price fluctuations relative to other materials like plastic.

Q: George Staphos asked about Americas EBIT outlook for 2026, European volume growth expectations, and drivers of volume growth in North America and Europe.

A: Timothy Donahue responded that Americas Beverage income expected to be down a touch due to inflation and start-up costs; European beverage volume growth penciled in at 4-5%, with drivers including substrate shift in Europe and various products in North America like energy, flavored alcohols, sparkling water.

Q: Philip Ng inquired about Brazil outlook, operating leverage, and CapEx.

A: Timothy Donahue noted Brazil market will recover over time, operating leverage focused on generating more absolute margin and cash flow, and CapEx in 2026 mainly for Europe and Latin America with no immediate need for North America CapEx in next year or two.

Q: Ghansham Panjabi asked about North American beverage industry growth assumption and capacity utilization.

A: Timothy Donahue stated North American beverage market expected to grow 2-3%, industry capacity tight with Crown expecting market to absorb new capacity, and no immediate need for Crown to add capacity in North America.

Q: Matt Roberts asked about buybacks assumed in guidance and M&A opportunities.

A: Kevin Clothier said $650 million assumed for share buybacks with room for opportunistic buying; Timothy Donahue stated no meaningful M&A opportunities in packaging to improve Crown's portfolio.

Q: Christopher Parkinson asked about Asia market outlook and European sub-region growth differences.

A: Timothy Donahue said Asian market has growth available with low-cost structure, and while there are differences in European sub-regions, overall European market doing well with strong growth expected in Southern Europe and Gulf States.

Q: Michael Roxland asked about demand in January/February and food can demand outlook.

A: Timothy Donahue said January demand slightly weaker due to weather, February recovering, and food can demand expected to grow above market due to Crown's position in pet food cans.

Q: Stefan Diaz asked about investments in Brazil, Greece, Spain ramp and North America capacity potential.

A: Timothy Donahue said investments in Brazil, Greece, Spain start-ups mostly in 2027 with second half weighted costs, and no immediate need for Crown to add capacity in North America over next couple of years.

Q: Anoja Shah asked about Europe expansion details and Mexico sugar beverage tax impact.

A: Timothy Donahue discussed Spain expansion with multiple plants and investments, and Mexico soft drink exposure at 10-15% of business with beer being majority.

Q: Arun Viswanathan asked about North American customer positions, transit outlook.

A: Timothy Donahue mentioned strong customer commercials and transit business generating significant cash flow with high margins despite macro softness.

Q: Anthony Pettinari asked about start-up costs in Brazil, Greece, Spain and Asia conflict impact.

A: Timothy Donahue said start-up costs in Brazil, Greece, Spain second half weighted, and Asia conflict responsible for volume shortfall with lap expected in third quarter.

Q: Silke Cook asked about Europe expansion capacity impact and growth expectations.

A: Timothy Donahue said Europe capacity expansion installation in 2026 with full run rate over 18-30 months, and growth expected in European market but with capacity ramp-up time considered.

Q: Edlain Rodriguez asked about industry opportunities/challenges and capital allocation.

A: Timothy Donahue said challenge is avoiding complacency, balancing customer support and value return, and share buybacks still a good use of capital with disciplined approach considering leverage and returns