Silgan Holdings Inc. Q2 FY2025 earnings call

• Structural changes in the business over the past decade have led to 15% adjusted EPS growth and record adjusted EBIT. - Success in Dispensing and pet food markets, integration of Weener acquisition, and cost reduction initiatives. - Weather impacted North American beverage Specialty Closures volumes, leading to $10 million impact on segment adjusted EBIT. - Customer bankruptcy in North America to impact Metal Containers adjusted EBIT by ~$10 million in second half of 2025. - Custom Containers saw adjusted EBIT margins expand 190 basis points from cost savings.

Dispensing and Specialty Closures: Second quarter sales increased 24% versus prior year, driven by inclusion of Weener sales and higher organic volumes of dispensing products. Record adjusted EBIT of $193 million for the quarter, up 17% year-over-year. Metal Containers: Sales increased 4% due to favorable price/mix and foreign currency translation. Adjusted EBIT increased 21% primarily due to normalized production. Custom Containers: Sales decreased 3% but comparable volumes grew 2% after exiting lower margin business. Adjusted EBIT margins expanded 190 basis points from cost reduction activities.

• Revised adjusted EPS range to $3.85 to $4.05, midpoint exceeding prior records. - Expect Dispensing organic volume to grow high single-digit, but weather impact on North American hot fill beverage closures to hit segment adjusted EBIT by ~$10 million. - Metal Containers volumes on track for mid-single-digit growth, but customer bankruptcy to impact second half by ~$10 million. - Free cash flow revised to ~$430 million, a 10% increase from prior year but offset by higher cash interest and CapEx.

• Adverse weather in North America impacting North American beverage Specialty Closures volumes, affecting segment adjusted EBIT by ~$10 million. - Customer bankruptcy in North America impacting Metal Containers adjusted EBIT by ~$10 million in second half of 2025.

Q: Matt Roberts asked about the customer bankruptcy in Metal Containers and its impact on volume, assets, and future scenarios.

A: Adam Greenlee discussed the customer's bankruptcy, no financial exposure, competitively advantaged facilities, and readiness to rightsize capacity.

Q: Matt Roberts asked about Dispensing segment EBIT increase and Weener's impact.

A: Adam Greenlee mentioned mid- to high teens percentage increase in Dispensing and Specialty Closures adjusted EBIT, with $10 million impact from beverage weakness.

Q: George Staphos asked about legacy Dispensing volume growth and Weener's inclusion.

A: Adam Greenlee stated legacy Dispensing products have mid- to high single-digit growth, and discussed impact of wet weather on beverage promotions.

Q: Ghansham Panjabi asked about EPS adjustment reasons.

A: Adam Greenlee said it's due to beverage weakness and customer bankruptcy impacts.

Q: Gabe Hajde asked about worst-case scenario for customer bankruptcy impact.

A: Adam Greenlee discussed competitive advantage of facilities and readiness to rightsize capacity.

Q: Anthony Pettinari asked about tariffs on steel and aluminum.

A: Adam Greenlee discussed contractual pass-throughs of costs and impact on food can business.

Q: Michael Roxland asked about preempting customer bankruptcy and Metal Containers base.

A: Adam Greenlee discussed preparation for bankruptcy, no financial exposure, and readiness to rightsize capacity.

Q: Arun Viswanathan asked about Metal Containers inventory impact and closures weakness.

A: Adam Greenlee discussed preparation for bankruptcy outcomes and non-structural nature of closures weakness.

Q: George Staphos asked about volume outlook and working capital.

A: Adam Greenlee confirmed volume outlooks and discussed getting paid for working capital efforts.