Earnings call transcript: Silgan Holdings Q2 2025 misses EPS expectations

Silgan Holdings Inc. (SLGN), a $5 billion market cap packaging solutions provider, reported its Q2 2025 earnings, revealing an adjusted EPS of $1.01, slightly below the forecast of $1.03. Despite this miss, revenue surpassed expectations, reaching $1.54 billion against a forecast of $1.53 billion. The company’s stock reacted negatively, dropping 7.6% in pre-market trading and closing down 15.94% from the previous day’s close, reflecting investor concerns over the earnings miss and other market factors. According to InvestingPro analysis, the stock is currently fairly valued based on its comprehensive Fair Value model, which considers multiple valuation metrics and growth factors.

Key Takeaways

• Silgan’s Q2 revenue exceeded expectations, growing 11% year-over-year.
• Adjusted EPS fell short of forecasts, with a 1.94% negative surprise.
• Stock price fell significantly, closing 15.94% lower post-earnings announcement.
• Strong growth noted in dispensing products, exceeding 40% year-over-year.
• Full-year EPS guidance was reaffirmed, with a midpoint increase of 9%.

Company Performance

Silgan Holdings demonstrated solid revenue growth in Q2 2025, reporting a year-over-year increase of 11%. The company highlighted its strong performance in the dispensing products sector, which saw over 40% growth. Despite the EPS miss, Silgan achieved record total adjusted EBIT of $193 million, a 17% increase from the previous year. The company continues to benefit from its strategic focus on high-end fragrance, beauty, and pet food markets.

Financial Highlights

• Revenue: $1.54 billion, up 11% year-over-year.
• Adjusted EPS: $1.01, up 15% from the prior year quarter.
• Total adjusted EBIT: $193 million, up 17% year-over-year.

Earnings vs. Forecast

Silgan’s Q2 EPS of $1.01 missed the forecasted $1.03, resulting in a 1.94% negative surprise. However, the company’s revenue slightly exceeded expectations, coming in at $1.54 billion versus the $1.53 billion forecast. This mixed performance contrasts with previous quarters where Silgan consistently met or exceeded both EPS and revenue forecasts.

Market Reaction

Following the earnings release, Silgan’s stock experienced significant volatility, though InvestingPro data shows the stock historically trades with low price volatility (Beta: 0.75). The pre-market session saw a 7.6% decline, and the stock closed 15.94% lower at $51.56. This movement reflects investor concerns over the EPS miss and potential challenges in the North American beverage market. Trading near its 52-week low of $44.37, the stock has shown resilience with a 16.17% total return over the past year, despite current bearish sentiment.

Outlook & Guidance

Silgan reaffirmed its full-year 2025 adjusted EPS guidance, projecting a range of $3.85 to $4.50, representing a 9% increase at the midpoint. The company anticipates exceeding $1 billion in adjusted EBITDA and expects continued high single-digit growth in dispensing volumes and mid-single digit growth in metal containers. Analyst consensus remains strongly bullish, with a "Buy" recommendation and price targets ranging from $47 to $75 per share. For comprehensive analysis and detailed forecasts, access the full Pro Research Report available exclusively on InvestingPro.

Executive Commentary

CEO Adam Greenleaf noted, "Our second quarter results showcase the structural changes that have been taking shape in our business." He expressed confidence in the company’s growth trajectory, stating, "We continue to expect dispensing organic volume to deliver another year of high single-digit growth."

Risks and Challenges

• Potential $10 million EBIT impact from the North American beverage market.
• $10 million EBIT impact due to customer bankruptcy in metal containers.
• Weather-related challenges affecting hot fill beverage market volumes.
• Raw material cost increases requiring effective working capital management.
• Tariffs expected to have minimal impact but remain a concern.

Q&A

During the earnings call, analysts inquired about the impact of customer bankruptcy and weather-related volume challenges. Management addressed these concerns, emphasizing their focus on working capital management and reaffirming that there are no structural market concerns affecting long-term growth prospects.

Full transcript - Silgan Holdings Inc (SLGN) Q2 2025:

Conference Operator: Good day, and welcome to the Silgan Holdings Second Quarter twenty twenty five Earnings Call. Today’s conference is being recorded. Relations. Please go ahead.

Alex, Investor Relations, Silgan Holdings: Thank you, and good morning. Joining me on the call today are Adam Greenleaf, President and CEO Philippe Chevrier, EVP and COO Bob Lewis, EVP, Corporate Development and Administration and Kim Ulmer, SVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made on this conference call may be forward looking statements. These forward looking statements are made based upon management’s expectations and beliefs concerning future events impacting the company and therefore involve a number of uncertainties and risks, including, but not limited to, those described in the company’s annual report on Form 10 ks for 2024 and other filings with the Securities and Exchange Commission. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward looking statements.

In addition, commentary on today’s call may contain references to certain non GAAP financial metrics, including adjusted EBIT, adjusted EBITDA, free cash flow and adjusted net income per diluted share or adjusted EPS. Reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today’s press release and under the non GAAP financial information portion of the Investor Relations section of our website at silganholdings.com. With that, let me turn it over to Adam.

Adam Greenleaf, President and CEO, Silgan Holdings: Thank you, Alex, and we’d like to welcome everyone to Silgan’s second quarter earnings call. Our second quarter results showcase the structural changes that have been taking shape in our business over the past decade as our teams continue to build upon the momentum in our business and delivered 15% adjusted EPS growth and a record adjusted EBIT driven by the success of our strategic initiatives, the strong operational execution of our teams and the benefit of our capital deployment model. Our second quarter and first half results have shown significant organic growth in dispensing and pet food markets, the integration of the Vayner acquisition and the success of our cost reduction initiatives that have resulted in first half adjusted EPS that is 17% above the prior year period, record first half adjusted EBIT and record first half adjusted EBITDA. Our dispensing and specialty closures segment showed significant year over year growth and delivered another quarter of record adjusted EBIT with over 40% growth in dispensing products and continued success in the markets we serve. Our market leading innovation and design capabilities, the strength of our long term customer relationships, and the execution and focus of our teams continue to set us apart in the market and drive organic growth that outpaces our peers and the end markets we serve.

We have made meaningful progress in the integration of the Vayner acquisition from a cultural, synergy and product portfolio perspective. And we have been very pleased with the incremental opportunities our teams are continuing to uncover to leverage both our global commercial presence and our expanded product offering to drive accelerated growth well into the future as a result of this combination. We continue to have success with new and existing customers in our core high end fragrance and beauty, personal care and home care markets and are seeing incremental opportunities in health care and pharma markets as well. Our dispensing momentum remains strong into the second half of the year as we execute on our near and long term priorities in this rapidly growing high value portion of our business. Volumes for our North American beverage specialty closure products, particularly in the hot fill markets, fell short of our expectations entering the quarter due mostly to cool wet weather experienced in much of the country during the second quarter.

Additionally, with weather impacting consumption patterns in the first half, our customers have adjusted their promotional spending plans to reflect the lower consumption patterns during this period, which further impacted our volumes. While weather conditions have improved as we enter the third quarter, our expectation is that the missed consumption occasions for these beverages in the first half of the year will not be recovered in the balance of the year as our customers work through the inventory they built for the peak season. In metal containers, we continue to see strong demand for our pet food products, which grew by a mid single digit percentage in the second quarter, driven by our strong presence in the fastest growing portions of the pet food market. As expected, our total volumes in the second quarter were comparable to prior year levels, mostly as a result of the timing of orders for containers for soup markets in the first half. Our adjusted EBIT performance in metal containers during the second quarter was 21% above the prior year period, driven by a more normalized production environment relative to the prior year.

In custom containers, our business delivered strong operating performance and experienced continued success in the marketplace as comparable volumes grew 2% after adjusting for the impact of lower margin business exited as a result of our cost savings initiatives. As expected, our adjusted EBIT margins expanded 190 basis points as a result of our cost reduction activities. With our strong start to the year, we remain confident in our ability to deliver on our strategic objectives and achieve significant earnings growth in 2025. And our expectations for continued growth in dispensing and pet food products remain unchanged. We continue to expect dispensing organic volume to deliver another year of high single digit growth, but we now expect the adverse weather impact on our hot filled beverage specialty closures volumes in North America in the second and third quarters to impact segment adjusted EBIT by approximately $10,000,000 for the year.

Our metal containers volumes are on track to grow by a mid single digit percentage, driven primarily by mid to high single digit growth in pet food and a partial recovery in fruit and vegetable pack volumes. Unfortunately, a recent customer bankruptcy in North America that has resulted in that customer exiting certain markets is expected to impact metal containers adjusted EBIT by approximately $10,000,000 in the 2025. In custom containers, with the annualization of the new business that ramped up in 2024 as well as additional new business awards in 2025, we continue to expect comparable volumes to grow by a mid single digit percentage this year. We remain focused on the opportunities that lay ahead for the company and are confident in our ability to execute in our plan as the structural changes and evolution in our portfolio have positioned us to drive significant growth in our business in the near term and long term. Our financial performance remains strong, and we are pleased that we are positioned to achieve a 9% increase in adjusted EPS and exceed $1,000,000,000 in adjusted EBITDA at the midpoint of our estimated adjusted EPS range in 2025.

With that, Kim will take you through the financials for the quarter and our estimates for the third quarter and the full year of 2025.

Kim Ulmer, SVP and CFO, Silgan Holdings: Thank you, Adam. As Adam highlighted, we recorded another quarter of strong financial results in the second quarter, driven by the continued success of our dispensing business, more normalized production of metal containers and the execution of our cost reduction plan. Net sales of approximately $1,500,000,000 increased 11% from the prior year period, driven primarily by growth in dispensing products, including the addition of the Vayner business and the pass through of higher raw materials and other manufacturing costs in metal containers. Record total adjusted EBIT for the quarter of $193,000,000 increased by 17% on a year over year basis, driven by strong growth in dispensing products, including from the acquisition of Vayner, improved price cost in metal containers, and the benefits of our cost reduction efforts resulting in higher adjusted EBIT in all segments and record adjusted EBIT in the dispensing and specialty closures segment. Adjusted EPS of $1.01 increased $0.13 or 15 percent from the prior year quarter.

Turning to our segments. Second quarter sales in our Dispensing and Specialty Closures segment increased 24% versus the prior year period, primarily as a result of the inclusion of the sales from Vayner and higher organic volumes of dispensing products. Due to the rapid integration of Vayner and the overlapping customers and products, organic volume mix calculations have become less meaningful for the segment and for dispensing products in particular. Volumes for food and beverage specialty closures declined 3.3% during the quarter, driven by a mid single digit decline in North American beverage products, predominantly in hot fill markets. The decline in North American beverage volume was a result of cool, wet weather in the second quarter, which drove lower overall consumption of these products and as a result, lower promotional activity.

Record second quarter twenty twenty five dispensing and specialty closures adjusted EBIT increased $15,000,000 or 16% versus the prior year period as a result of the contribution from Vayner and higher organic volumes of dispensing products. The previously discussed decrease in North American beverage volumes resulted in an approximately $5,000,000 year over year headwind to adjusted EBIT in the second quarter. In our metal metal container segment, sales increased 4% versus the prior year period as a result of favorable price mix due to the contractual pass through of higher raw material and other costs and a 1% benefit from foreign currency translation. As expected, unit volumes during the quarter were comparable due to mid single digit volume growth in pet food and higher volume for fruit and vegetable markets, partially offset by lower volumes for soup markets, related to the timing of orders during the first half of the year. Metal containers adjusted EBIT increased 21% primarily as a result of favorable price cost due to a more normalized production schedule and better fixed cost absorption relative to the prior year quarter, which was impacted by a customer’s reduction of their fruit and vegetable pack plans midyear.

In custom containers, sales decreased 3% compared to the prior year quarter, driven by a 2% decrease in volumes due to the exit of lower margin business as a result of a planned footprint reduction to achieve the previously announced cost reduction goals. Excluding the lower margin business exited to achieve cost reduction plans, volumes increased 2%. Custom Containers adjusted EBIT increased 11% as compared to the 2024, primarily due to favorable price cost, including mix, as a result of cost savings initiatives. Looking ahead to the full year of 2025, we are revising our estimate of adjusted EPS from a range of $4 to $4.2 to a range of $3.85 to $4.5 a 9% increase at the midpoint of the range as compared to 3.62 in 2024. The revision in our estimate of adjusted EPS is the result of lower volume expectations for specialty closures in the North American beverage market, which we expect to impact dispensing and specialty closures adjusted EBIT by approximately $10,000,000 and the impact associated with certain changes in the market due to a customer bankruptcy in metal containers, which is also expected to impact the second half and full year by approximately $10,000,000.

This estimate includes interest expense of approximately $185,000,000 a tax rate of approximately 24%, corporate expense of approximately $45,000,000 and a weighted average share count of approximately 107,000,000 shares. At the midpoint of our estimated 2025 adjusted EPS range, we will exceed the prior record levels of adjusted EBIT and adjusted EBITDA and exceed $1,000,000,000 of adjusted EBITDA for the first time in the company’s history. From a segment perspective, we now expect a low teen percentage increase in total adjusted EBIT in 2025, driven primarily by an approximately 20% increase in dispensing and specialty closures adjusted EBIT, a mid teen percentage increase in custom containers segment adjusted EBIT, and a mid single digit percentage increase in metal containers adjusted EBIT. Based on our current current earnings outlook for 2025, we are revising our estimate of free cash flow from approximately $450,000,000 to approximately $430,000,000 a 10% increase from the prior year as earnings growth will be partly offset by higher cash interest and CapEx of approximately $300,000,000 This estimate also includes approximately $20,000,000 of cash costs to support our cost reduction program. Turning to our outlook for the 2025, we are providing an estimate of adjusted earnings in the range of $1.18 to $1.28 per diluted share.

Third quarter earnings are expected to benefit from the inclusion of Vayner, higher organic volumes of dispensing products, and the ongoing benefits of our cost reduction programs. These benefits are expected to be partially offset by the reduction in specialty closures volumes in the North American beverage markets and the impact of a recent customer bankruptcy in metal containers. Dispensing and specialty closures third quarter net sales were expected to grow by a mid to high 20s percentage rate driven by strong volumes for dispensing products, including the results of Zener. Metal Containers and Custom Containers third quarter volume is expected to increase by a mid single digit percentage. Third quarter adjusted EBIT in the dispensing and specialty closures and custom container segments are expected to be above prior year levels.

Metal containers third quarter adjusted EBIT is expected to be slightly below prior year levels as a result of a 5,000,000 to $10,000,000 impact related to the previously discussed recent customer bankruptcy. That concludes our prepared comments, and we’ll open the call for questions. Rachel, would you kindly provide the directions for the question and answer session?

Conference Operator: Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question. To remove yourself from the queue, please press star 2.

And we will take our first question from Matt Roberts with Raymond James.

Matt Roberts, Analyst, Raymond James: Hey. Good morning, everyone. Thank you for taking the question. First, on metal, maybe if you could help me understand that customer. I I believe they used to be 3% of revenue.

They cut 30% last year, so called about 2% of revenue now if my math is right there. How much of a hit to volume was that in ’25, and what categories did that expand to versus ’24? And maybe long longer term, thinking out to ’26. I mean, what’s what’s the worst case scenario? 2% of revenue goes away.

I mean, how much would EBIT be down in ’26? Are there any assets or facilities that are are co located or or dedicated to this customer? Or what is the more likely scenario for ’26? Any any additional color would be great there. Thank you.

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. Thanks, Matt. You know, obviously, it was a a recent filing that that our one of our large customers, went into bankruptcy proceeding. So, we’ve been dealing with that for a a little bit of time now. And and one thing I would say, just to be really clear, our company and our teams did a great job of of protecting to any downside financial risk related to that filing.

So, our teams worked very hard and diligently to make sure there was no financial impact of the filing itself. Now as we pivot and move forward to the ongoing operations, there’s a couple things to think about. One, you know, you’re right. It’s a it’s a large customer. You can probably figure out for yourself who that might be.

We’ve got near site, on-site locations that are competitively advantaged to any other potential supply, scenario that that that particular customer could, consider. We continue to operate under our contracts, as normal, and we are working really hard to help them have a successful 2025 act. And, as they ramped into the bankruptcy proceeding, they’ve been operating under an asset light strategy. So by that, I I guess I would say they’ve been sort of shedding some of their operating facilities and moving some of their volume to co pack. And that’s where really the impact is is where we’re feeling at this year.

They’ve closed a couple of facilities, and I’ll just and I won’t give you the specific market that that they closed those facilities for. They’ve moved most of that volume. They’ve lost some share. They’ve moved most of the remaining volume to co pack locations. And in some instances, we are the supplier of of that co pack locations or location.

Excuse me. In some instances, we are not. So where we are not is where we would have a a potential shortfall in volume that we’ve now included in our forecast for the remainder of the year. The bankruptcy, proceeding should conclude sometime probably in the first quarter of next year. So we’ll, like I said, work really hard to help them have a successful 2025 pack season.

Anything beyond that would be speculation, but I’ll just reiterate what I started with is we have competitively advantaged facilities on-site or near site to the filling location, and that’s proven for about thirty eight years to be a very effective business model.

Matt Roberts, Analyst, Raymond James: Thank thank you. I really, really appreciate all that.

Adam Greenleaf, President and CEO, Silgan Holdings: Hey, Matt. Sorry. Maybe just one last thing. No. Please.

You know, look. And if if the volume doesn’t come back or if the volume doesn’t stay, you know, we we have a long track record of rightsizing our capacity to the demand levels of our customers, and we’ll absolutely do that here. I think we’re premature, in saying that at this point because we don’t know what the final outcome is going to be. But, clearly, that’s that’s a core part of our strategy is we do right size our capacity to the demands of our customers, and and we’ll continue to do that. We’ll have cost out opportunities if we need them.

Matt Roberts, Analyst, Raymond James: Okay. No. You certainly really appreciate all the color there, Adam. And then maybe if I may ask another one on on the dispensing side. Aaron can take it, but I know Kim, I believe you said mid teens 25 EBIT increase where I think last quarter you were expecting 20%.

So my math says that’s about a 20,000,000 shortfall and beverage was 10 of that. Am I missing anything there or or maybe my math is wrong? And on the dispensing side, I think you still said you expect high single digit volume and mix, but hard to parse that out with with Vayner now. So is that high single digit volume mix inclusive of Vayner, or could you discuss how Vayner is done versus ’24 and your legacy dispensing volumes in ’25? And and just any color on end markets and dispensing, how that’s performing amid tariffs or whether it’s fragrance, beauty and and the likes?

Any additional color there would be great. Thanks again for taking the question. Sure.

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. No problem. And I think maybe you were a little high on your your increase. Yeah. Matt, think about,

Alex, Investor Relations, Silgan Holdings: you know, mid to high teens percentage increase. The the impact from, as Adam said, from the the hot fill beverage is about 10,000,000. So no reduction to the balance of the business.

Adam Greenleaf, President and CEO, Silgan Holdings: And that’s the important point. The the only thing we’re dealing with here in this conversation are the two discrete items that we outlined in the the comments earlier. The the balance of the the prospects and and forecast for the business remain. And then I think, Matt, you know, you think about dispensing volume. Yes.

I we’re we’re seeing significant growth. I mean, it’s it’s really interesting. We’ve acquired 42 companies in our history at Silgan, and we’ve done a pretty good job of integrating all of those businesses. And it should be no surprise to anyone that that Boehner is is already not fully integrated, but we’ve made significant progress. So the synergies are right on track where we expected.

What’s really interesting is is some of the growth opportunities when you think about the global footprint, you think about the the broadening of our our basket of products we take to our customers, we’re finding more opportunities than what we had initially we had initially identified. And as a reminder, we don’t include those commercial synergies in our estimates when we set our synergy estimates at the beginning of the announcement of the acquisition. So we’re feeling really good about it. It gets harder and harder to parse out our legacy volume from Vayner because we are making investments into Vayner facilities. And, you know, one thing I would say is remember, those facilities are very well capitalized and, you know, carry with them a a slightly higher depreciation.

So if you think of EBIT margin, maybe the incremental EBIT margin didn’t appear to be as robust as you would have thought. But when you get to the EBITDA margin level, we’re delivering exactly what we would have expected from the Vayner acquisition. And then the last point I’d make in DFC is you’ve got this this powerhouse in fragrance and beauty for our products that continues to perform. And what we’ve seen, a good indicator of of future market needs is our sampler platform. I’ll just say we continue to essentially be sold out in in samplers, and volume has been very, very strong.

Our fragrance and beauty volumes are accelerating in the second half of the year. So we’re expecting significant growth, in the back half of the year with new product launches. And I think many of our customers, in the prestige and high end of of this market segment have been talking about new product launches on their their public calls and talking about how, these products continue to perform versus some of the other portfolio of products they have in their in their company. And, you know, we feel really good about high end fragrance and beauty, and our customers do too. They continue to invest, and and we’re right there with them to support them for their growth.

Matt Roberts, Analyst, Raymond James: Adam, thank you again for all the detail there and correcting my user error. Back to math class, I go.

Adam Greenleaf, President and CEO, Silgan Holdings: Thanks, Matt.

Conference Operator: Thank you. And we will take our next question from George Staphos with Bank of America.

George Staphos, Analyst, Bank of America: Hi, everyone. Good morning. Hope you’re doing well. Thanks for the details. Hey, Adam, I know you’ve already said you don’t really want to get into the organic legacy growth question on dispensing, but I wanna give it one more shot if you can answer the question this way.

I mean, clearly, you know the number of parts, you know the number of units you’re shipping, and you probably knew what Vayner was doing at the time you acquired it. If we sort of

Adam Greenleaf, President and CEO, Silgan Holdings: stop the clock at that

George Staphos, Analyst, Bank of America: point with Vayner’s units being what they were and you measured all the other incremental growth from here as growth in legacy, what kind of growth would that show ex beverage? Is there any way you can can talk to that?

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. And and, George, you’re exactly right. I I think we can do that. We obviously have done that, but there’s a little bit of of mathematics that it takes to get there, and you’re making some assumptions too. So I maybe let me just Our be really our legacy dispensing products are in the the mid to high single digit growth rate in the quarter, which is right in line with our expectations.

So the business continues to perform. There are no issues whatsoever. You mentioned hot fill beverage. Unfortunately, with the the wet, cool weather that we talked about, you know, our our customers did pull back a bit on their promotional spending in the second quarter as they saw really limited opportunity for consumers to be out about enjoying their sports drinks, as an example, given that it was raining just about everywhere. I think, you know, one of the anecdotal comments from a customer was that they didn’t put in their forecast for the year 25 of of rain in a in a particular market that they serve.

So those are the kind of issues we’re dealing with. It is really I mean, we mentioned food and beverage in the in the press release, but it’s this is really a North American hot fill. You can call them my Totonic sports drinks, on the go, whatever you want. It’s it’s those products that people typically enjoy when they’re not in their home and out doing activity.

George Staphos, Analyst, Bank of America: Sure. And and at the end of the day, the customer is the customer. You’re not going to dictate to them. They’re going to ask you to help them in the market. But with that being said, you knew there was a but coming.

Alright. So it it it’s it’s not gonna rain fifty two weeks out of the year. Presumably, they are going to need to defend share in the third quarter and even into the fourth quarter and football season. What are they doing in terms of promotional activity? Why have they why haven’t they at least dialed it back up to capture that portion of the market, again, to the extent that you can can comment?

And what might it mean for your business for the rest of the year. Last question for me, and I’ll turn it over, after this and come back. So soup was down. You mentioned it was timing. What is the outlook for third and fourth quarter, and how’s that factored in?

And then, yeah, I’ll turn it over there, I’ll come back. Thank you.

Adam Greenleaf, President and CEO, Silgan Holdings: Oh, okay. Thanks, George. Back to the the hot fill segment for just a second. So it’s a great question, one that, obviously, we’re we’re working really hard to understand what our customers do. So there’s there’s a couple things that the preseason filling for hot fill beverages, sports drinks, etcetera, really starts in February and March.

So they they’re building inventory to support the demand of the season, you know, call it late in the first quarter through the second quarter and through the summer. The reality is with the lower consumer demand that we’ve seen, they’ve actually built a little bit of inventory. Nothing to be worried about, but they’re gonna burn off their inventory. And then the reality of that market is, you know, there’s a summer season for sports drinks, and the shoulders is just less demand. There is less demand.

So, you know, there is going to be a recovery. It’s highly unlikely that’s in ’25. It will be in ’26. And, again, I we’re not gonna try to forecast weather for ’26 at this point, but there’s nothing about the the underlying demand and our customers’ position. They are very focused on maintaining or growing their market share, and usually, that plays out pretty well for the packaging suppliers.

So we feel good that there’s a recovery. It’s just unfortunate that it’s gonna be beyond the current calendar year. And then when you think about soup, you know, look. Soup’s very stable in second half. We just had a little bit of timing issue in the first half.

Was a little bit of pull into q one, and then we had a really strong, q two last year. So outside of that, soup volumes are really consistent. We’ve got super close relationships with those customers in those markets and and understand what their programs are for the back half and and feel like we’re in a very good spot. And and soup continues to perform well. Again, underlying demand at the consumer level seems to be very consistent, and and our customers are confident in their second half forecast.

George Staphos, Analyst, Bank of America: Adam, just a point of clarification. You said you expect stable, second half of the year on soup? Did I hear that right?

Adam Greenleaf, President and CEO, Silgan Holdings: Yes. Yes. You got it. Thank you.

George Staphos, Analyst, Bank of America: Thank you. Thank you very much.

Conference Operator: Thank you. We will take our next question from Ghansham Panjabi with Baird.

Ghansham Panjabi, Analyst, Baird: Yes. Thank you, operator. Good morning, guys. I guess, as you step back a bit, Adam, coming into the year, I think your initial view was that volumes would be up mid single digits across the three operating segments, if I remember that correctly. And so the adjustment for EPS for 2025 specific as of this morning, is that specific to the weakness in specialty closures in North American beverage and then and then the bankruptcy impact of the customer level, or is there anything else we should consider?

Adam Greenleaf, President and CEO, Silgan Holdings: I know. I think you’ve got it exactly right. I mean, I I think it’s two incredibly discreet items, the the hot fill beverage item in North America and the customer bankruptcy in metal containers. And everything else about our message and our story remains exactly the same as we came into the year. So, you know, I mean, we actually feel we feel very confident that that, a, we had it right with the exception of those two discrete items, and, b, our businesses continue to to perform.

And maybe the last item I tell you is our our key strategic markets of dispensing and pet food continue to accelerate in the second half of the year, and we will see that acceleration in both of those product categories.

Ghansham Panjabi, Analyst, Baird: And that statement’s true even with the mixed consumer across The US and Europe, just just to be clear on some of your discretionary categories and so on. Right?

Adam Greenleaf, President and CEO, Silgan Holdings: Yeah. Yeah. And then fair enough, you know, with literally a 100% of our products being consumer staples, you know, we we feel like we fall very much into the category category that consumers use and and need the products that we manufacture.

Ghansham Panjabi, Analyst, Baird: Got it. And then just as a clarification, so the the weakness in specialty closures in North American beverage, when did you start seeing that, you know, during the quarter, relative to, you know, when you reported last and you had visibility in the first month into the quarter that time?

Adam Greenleaf, President and CEO, Silgan Holdings: Yeah. It it was shortly thereafter. It’s really kind of the mid part of the quarter that they are we saw the the weather. We kept asking the questions. Our customers did not pull back their forecast until mid to to later in the quarter, unfortunately.

George Staphos, Analyst, Bank of America: Got it. Thank you.

Kim Ulmer, SVP and CFO, Silgan Holdings: Thank

Conference Operator: you. We will take our next question from Jeff Zekauskas with JPMorgan.

Jeff Zekauskas, Analyst, JPMorgan: Thanks very much. For 2026, should we think as a base case of the effect of the food can bankruptcy as an additional 10,000,000 versus 02/2025?

Adam Greenleaf, President and CEO, Silgan Holdings: So I think, Jeff, you know, number one, again, we’re, we haven’t concluded all the way through the process of the the bankruptcy filing. I think, you know, what what we have in there right now is a $10,000,000 impact in the back ’25. I think that there there is some element of that where our customers that customer has exited the market in certain areas, and that volume has gone to co packers that we don’t supply. There is a chance some of that comes back next year, to be clear. I think the the base case is that it stays right where it is in the second half of the year.

As far as the remaining assets and remaining volumes, it’ll largely depend on on who actually, acquires the business out of bankruptcy and what their intention, of running the assets are.

Jeff Zekauskas, Analyst, JPMorgan: K. And then, what you did is you you you talked about these 2 10,000,000 pretax items, and you lowered your free cash flow by 20,000,000. And, you know, I I would think currencies would be a a help to you in the second half. Is the free free does the free cash flow generation reduction contain something more than these two items?

Kim Ulmer, SVP and CFO, Silgan Holdings: No. It’s primarily the few items that we talked about on the EBITDA line.

Adam Greenleaf, President and CEO, Silgan Holdings: And there’s a lot of moving parts on currency, foreign currency too. We’ve got some favorability with with the euro. We’ve got some unfavorable in other jurisdictions. So all of that is factored in and really came out in the wash as a net zero. And the the $20,000,000 impact is directly attributed to the two discrete items that we’re talking about.

So from an earnings, from a free cash flow perspective, those are the only things that have changed, as far as our outlook for the year.

Jeff Zekauskas, Analyst, JPMorgan: Great. Thank you so much.

Kim Ulmer, SVP and CFO, Silgan Holdings: Thank

Conference Operator: you. We will take our next question from Gabe Hajde with Wells Fargo Securities.

Gabe Hajde, Analyst, Wells Fargo Securities: Good morning, Philip and team. I guess with the stock reacting the way it is, I’ll try to take one more stab at the question. I mean, Jeff asked about if there’s an incremental $10,000,000 in the next year. But maybe as it sits today, you mentioned you’re assuming kind of the business that’s transitioned to co packers for the bankrupt customer sits where it is for the for the remainder of of the year. I I kinda came up with the same revenue number that Matt did.

So, you know, in a worst case scenario, which seems to be what sort of implied in, like I said, today’s stock move, would that total hit be in the notwithstanding cash cost that may you may have to put out to to restructure the business. But would that in the EBITDA terms, in that 20 to $25,000,000 range? Is is there anything else that we should be aware of or thinking about?

Adam Greenleaf, President and CEO, Silgan Holdings: Well, I I I think that’s a a very large number, one that’s that’s larger than what we’re considering, to be honest with you, Gabe. So I I I really don’t think there’s anything else to consider. You know, the the remaining facilities that we supply, we are on-site or near site. And, yeah, I it doesn’t really matter who the owner of of the the filling asset is. We are going to be significantly competitively advantaged versus any other supply option they have.

So the the question I have gave, and just full disclosure here, is is what is the new owner gonna do with those assets? In fairness, again, under the asset light strategy, they exited a couple facilities. They they still own several facilities, and those facilities are some of the best in the world. And anybody who buys them, I think it’ll be a very interesting set of conversations as to whether they wanna run them or not. I think they’re advantaged versus others in the market, and we feel really good about our position right next door to them.

Gabe Hajde, Analyst, Wells Fargo Securities: Understood. Clear. Okay. Maybe, Kim, one for you. It seems like every year that goes by, the working capital swing gets bigger, and Adam talked about the team being proactive in terms of protecting Silgan again from from any sort of AR or inventory exposure to this other customer.

So I I think the outflow including changes in outstanding check balances was an outflow of 1,325,000,000.000. Is is there anything that you all are doing different operationally or maybe with with Vayner or some addition of of assets that the working capital outflow is so large at this point? And then anything that gives you consternation that, I mean, I know you you talked about $4.30 of free cash flow that that it won’t come back in the second half?

Adam Greenleaf, President and CEO, Silgan Holdings: Hey, Gabe. It’s Adam. I’m just gonna jump in before Kim goes. And and really, the biggest change in working capital was the the ability that we were able to to execute to secure additional raw materials in advance of the tariffs being implemented. And and really, I think as you understand, it it really has no impact on a full year basis for Silgan.

So we don’t benefit from that. The cash that went out the door will come in by the end of the year and the receivable. But what it does do, it helps us mitigate the cost increase that gets passed on to our customers in 2025. So this was great execution by our team. Yes.

In a certain quarter, it’s gonna look like, maybe working capital was a little out of whack. We’re incredibly confident as we are every year that that all comes back and it’s cleansed by the end of the year. So I just I wanted to say that really the biggest difference is that we took advantage of that opportunity to provide even more value to our customers in the metal containers market. Right.

Kim Ulmer, SVP and CFO, Silgan Holdings: And I Adam has it right. It’s just it’s just timing. So as we move through the year, that will go back to our normalized level, and we’re still expecting to be at our regular free cash flow levels.

Adam Greenleaf, President and CEO, Silgan Holdings: And I know you’re probably tired of me saying it, Gabe, but everything else remains exactly as it was before. So the Vayner acquisition working capital is exactly what we expected. The balance of the businesses are exactly what we expected. It was this one one item that will have no impact on the full year.

Gabe Hajde, Analyst, Wells Fargo Securities: Sounds like you guys sleep better at night than I do. All right. Thank you.

Conference Operator: Thank you. We will take our next question from Anthony Pettinari with Citi.

Anthony Pettinari, Analyst, Citi: Good morning. Regarding tariffs on steel and aluminum, I I think a few weeks ago, one large can buyer talked about maybe potentially repositioning the food can in their portfolio. And I’m just wondering if there’s sort of any finer point you can put in terms of how tariffs are impacting your customers or just the competitive environment. I guess we also had recent trade deal with Europe. So just maybe how that’s evolved or, the impact that you’re seeing or not seeing.

Adam Greenleaf, President and CEO, Silgan Holdings: Yeah. I think, you know, we’ve talked a lot about the impact of tariffs, and and I’ll say again that the the company, Sylvan, will not have any impact from tariffs on our our financial exposure of of acquiring, in this case, dealing a little bit of a higher cost and passing those through to our customers. The contractual pass throughs of our long term agreements allow for the pass through of all of those costs, and and that’s what’s going to happen, which makes the last conversation really interesting because we’re helping mitigate some of those costs for our customers within the year. So, you know, we think that, you know, the the purpose of the food can is many things. It’s the lowest cost means of getting nutrition to consumers that need it.

And for the most part, you know, our customers within a can today, our customers actually cook their their product in our can. It’s an integral part of their filling operation and how they they take nutrition to the market. So it’s not easy to replace. It’s not easy to replicate, and we think those barriers to entry still remain. And what’s in a food can today pretty much has to be in a food can from a a preparation and a process standpoint.

I think with the two thirty two tariffs maintaining it, call it 50% on on steel, you know, I think the the the impact on the food can itself is about something like 5¢, per food can on an kind of an average, food can. When you get to the largest part of our business, which is, our wet pet food category, those are primarily aluminum cans. And, again, we’ve talked a lot about the idea that, you know, we like to source raw materials in the markets where we manufacture and the markets in which we sell. Most the vast, vast majority of our aluminum products are sourced in The US and not subject to tariff. And so there is a little bit of price change with some of the the the pricing components.

The Midwest premium, has increased, and we’re obviously passing that through. And I tell you, it’s something like a a penny per can on the wet pet food side. So reason why I wanted to walk you through that, Anthony, is I think it’s important. We don’t think either of those values cause the consumer to make a different decision at the purchase point, when they’re, securing product for their families themselves or their pets. So, you know, we think, you know, we’ve got a a really good mechanism to pass those costs through.

We think our customers understand how to deal with it, and we think consumers are paying a little bit higher price. But as I said, it’s it’s not a material change to the cost of the the finished goods.

Jeff Zekauskas, Analyst, JPMorgan: Okay. That that that’s very helpful.

Anthony Pettinari, Analyst, Citi: And then just maybe two quick follow ups on on hot fill closures. The the 10,000,000 hit from, you know, as customers work, down inventories, is it your view that it’s highly unlikely that that headwind could persist into ’26? I don’t wanna put words into your mouth, but that that’s kinda what it sounded like, but maybe maybe not. And and then the second question, you know, in closures, I mean, there’s there’s some scanner data that shows that, you know, PET, maybe in some cases, has, you know, lag bev cans in the first half of the year. And obviously, you know, sports drinks and juices are not, you know, one for one, you know, what goes into a beverage can.

But I’m just wondering if if you think about substrate, you know, share shift or maybe, you know, certain containers doing better than others, do you think any of that could have crept into the weaker volumes that you saw in the first half?

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. Great question. And maybe let me just I’ll touch the second point first and, you know, just on the substrate. A couple of things. I mean, really, the best can is not a substitute for kind of our sports drink package or on the go packages.

They’re not only reclosable, they’re resealable. And so we think that’s a differentiated product, and there’s been no discussion with our customers about a a potential shift. And I I think when you think about, I’ll just say, more of the niche isotonic markets that we support versus the incredibly high volume, high output carbonated soft drink and maybe, you know, canned water market, they’re just fundamentally different. And the good news is our customers are are focused on maintaining their market share in the hot fill segment, and we think that’ll that’ll be what drives recovery in in 2026. I think if you you know, the inventory levels that we understand our customers have will meet the needs for, you know, what remains of the the peak season of of sports drinks in 2025.

They cannot go into the 2026 summer season with no inventory. So that’s we’re pretty confident that it’s gonna normalize, and I think we’ve got pretty good line of sight into their inventory levels and to their projections for next year and feel comfortable that, you know, the recovery is going to happen next year. We’re disappointed. It’s not this year, but all of the data points would align to say, There will be a recovery to a normalized level next year in ’26.

Anthony Pettinari, Analyst, Citi: Got it. That that’s very helpful. I’ll turn it over.

Conference Operator: Thank you. We will take our next question from Mike Roxland with Truist Securities.

Alex, Investor Relations, Silgan Holdings0: Thank you, Adam, Bob, Kim, Philippe and Alex for taking my questions. Just one quick one on metal containers. Are you aware of any other customers who may be facing similar headwinds in their food can businesses? Or this particular customer that you mentioned in terms of different bankruptcy, the only one that you’re aware of that has these, these issues?

Adam Greenleaf, President and CEO, Silgan Holdings: Well, it’s it’s a very discreet item to one customer that that did file for bankruptcy that has been a requirement customer for us since we acquired their assets twenty five or thirty years ago. So it really made it very simply. We are the only one dealing with this in the canning industry because we’re a requirement supplier, and we continue to operate underneath that under that contract.

George Staphos, Analyst, Bank of America: Yeah. And given that said close I’m sorry.

Adam Greenleaf, President and CEO, Silgan Holdings: Go ahead. Go I would say the balance of our pack business is actually doing pretty well. You know, no one’s asked about the weather for the pack yet, but, you know, for the most part, the the pack, we’re expecting a normal season. And thus far, you know, so far, the reports from the fields have been pretty good. So the balance of our pack business is right in line with our expectations for the year.

Alex, Investor Relations, Silgan Holdings0: Got it. And, you know, given that you’re so close to your customers, I mean, when I there any way you could have preempted this a little bit? I mean, given that you’re, you know, you’re situated so closely, I think you could have done it in advance. Like, when did you find out if there’s anything you could have done earlier, maybe two minutes to preempt it?

Adam Greenleaf, President and CEO, Silgan Holdings: Well, it’s a good question, and I I actually I’ll pivot right off of your your question into the answer because we were ready for this. We didn’t talk about it publicly, but we’ve been preparing for this day. Day. We’ve been concerned for quite a while for, I’d say, several years. And, you know, again, I actually speak with great pride that we had no financial exposure as their single largest supplier.

We had no financial exposure or loss related to this this bankruptcy filing. And that is a real testament to being incredibly close with that customer, understanding all of the items they were dealing with and anticipating eventual outcomes. And there were a whole bunch of outcomes that we were ready for. And when this happened, we were ready for it. And, again, we continue to operate under our contract, and, you know, we’re gonna try to help them have as good a pack season as they can have in 2025.

Alex, Investor Relations, Silgan Holdings0: Got it. One last question, Adam. I appreciate all the color. Just is this something that’s structural, meaning that if, let’s say, the the company goes through with the with bankruptcy, they they close more, plants. Is metal containers now at a lower base in terms of both revenue and EBITDA?

Or is there a way for you to maybe attract other customers, bring in other customers that could get you back to where you were with this customer?

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. I think it’s an interesting question. I think our you know, in in the markets that we serve and our deep customer relationship, I think what I would tell you, Mike, I mean, the first thing we would look at is is making sure we understand the landscape. And if there are the the right opportunities that that fit with the profile of operations that we have, we would obviously consider taking on additional volume. Outside of that, we absolutely have cost out measures that we would implement, in a worst case scenario sort of what you’re describing.

So, you know, I don’t think it’s a rebasing of the the EBITDA of the business because we’ll either fill those assets because they’re incredibly low cost, or we will exit facilities and take out higher cost operations.

Alex, Investor Relations, Silgan Holdings0: Got it. Thank you very much.

Conference Operator: Thank you. We will take our next question from Arun Viswanathan with RBC Capital.

Alex, Investor Relations, Silgan Holdings1: Great. Thanks for taking my question. Sorry to belabor the point here, but yeah, I guess this is, maybe the second or third time we’ve seen this in the last few years, not necessarily bankruptcies, but, some major customer disruptions on the metal container side. Maybe you can just talk about if there’s further impacts on the inventory side that you expect from this. And then, related to that, just wondering, you know, if it’s really you know, I’m sure you guys have these discussions, but is it more indicative of some structural, you know, concerns about the food can market, in general and, you know, maybe some shifting consumer tastes?

Or, what would you attribute some of these, you know, dis disruptions to, I guess, if anything?

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. It’s a good question, Arun. I mean, a couple things. One, you’re right. Last year, we had a customer call down their pack volume by about 30% right at the beginning of the pack last year.

Unfortunately, it’s the same customer we’re talking about. So, again, we keep calling these things discrete. It is discrete to the same customer. They have been you know, as we talked about, we were preparing for a variety of potential outcomes over a longer period of time. So, unfortunately, you know, I would just say it it revolves around a very similar conversation.

The good news of that is there’s absolutely nothing about the structural components of the food can market, the fruit and vegetable market, anything about what we do with the balance of the business. Pet food is a a wonderful growing product category for us. Soup is stable. The balance of our fruit and vegetable pack business is very good this year. Even in spite of this discreet item, you know, we’re on track to deliver mid single digit growth in the the metal container segment this year and feel pretty good about that.

So, unfortunately, it was the same customer. You know, we feel great about food cans. It’s a it’s a fantastic part of our portfolio. And with our product portfolio and mix of markets that we serve, I think we are well advantaged for the future. And wet pet food, again, is is growing at a a very a very nice rate.

It will accelerate for the second half of the year. And I’ll just say it’ll be something around 50% of our total volume, and and that’s part of our thesis. Right? That’s one of the the key strategic growth areas for our entire company is driving growth and continued growth in wet pet food, and we’re doing just that.

Alex, Investor Relations, Silgan Holdings1: Okay. Appreciate that. And then, I did have a related question, which is, you mentioned redirecting, some of these volumes, which are very low cost assets, elsewhere. So it sounds like you may have a strategy to offset some of this loss. You know, is that is that is that a fair characterization?

And, and then, I guess, similar question for closures. You know, given the the weakness that we’ve seen in isotonic now for quite a while, does that also appear to be structural? Are there any customer, concerns there that we should be aware of? And, you know, if something like that happens, can you redirect, your your your volumes elsewhere? And and could you do potentially even do that, in an anticipatory fashion, you know, just given the last few quarters of weakness?

Thanks.

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. So a couple of things. One, on on the metal container side, you know, first of all, we’re continuing to operate under our requirements contract. So, you know, there’s no shifting of volume anywhere else at this point. I think what I’d like to give our team a lot of credit for is, again, planning for a whole series of potential outcomes and not being surprised by any of them.

So as this bankruptcy proceeding continues on and and hopefully gets, to conclusion sometime in the maybe first quarter, early second quarter of next year, we’ll be prepared for any of those eventual outcomes. I can’t tell you which one will be the actual outcome. We’ll be ready for a whole variety of them with specific actions to take. And and we’ll talk about probably more on this call at that point once once the the future of those assets is a little more clear. And then, actually, I I do feel differently on the the closures volume.

So, yeah, it’s that segment in hot fill that that is a challenge for us right now. It was a little challenged last year, but it it goes with the territory of being, you know, kind of the the leader in the market. We we had a disruptor brand that we supply a requirements contract to that provided significant volume growth in that that particular market late twenty three or actually, I’m sorry, through through ’23, and that disruptor brand all that went away in ’24. So we were the only ones that experienced that volume lift and the volume decline because of our presence in that market and our market share. So I think the good news, Arun, is that there continue to be disruptor brands, and and we’re actively engaged with many at this point that we hope will become billion unit franchises, but we’ll see what happens.

So nothing structural about the business. And, you know, we think, you know, the the underlying hot fill market continues to grow. And, you know, with our low cost long term customer relationship and and leading market share in that business, we think we’re positioned for success, on the long term and and certainly in ’26, moving forward.

Alex, Investor Relations, Silgan Holdings1: Great. Thanks. And and if I may, just one quick one. So given that that you’re reducing guidance only by about 4% at the midpoint here, and then, you know, your stock is off quite a bit more than that, maybe triple. So can you pivot and change your strategy maybe, to focus more on share buyback and be opportunistic here, rather than deleveraging?

Or maybe you can just comment on on how you view that. Thanks.

Adam Greenleaf, President and CEO, Silgan Holdings: Yeah. So you’re right. I I think we view this guide as something like a a 4% change for two specific items on on the full year basis with the entirety of the rest of the thesis intact. So there is no change to strategy. There’s no change to really anything else in the business outside of these two items.

And I think Bob can talk about, you know, capital deployment and how we think about share repurchases in the grand scheme of what else we do here.

Alex, Investor Relations, Silgan Holdings2: Sure. Yeah. Arun, I I think we’ve been pretty clear over the over the years that that’s kind of the the third leg of the stool, if you will, in terms of of capital allocation. Obviously, we we would target m and a activity where we can find it, and it then it earns the kind of returns that we’re accustomed to and that shareholders are accustomed to. In the near term, we would we would delever.

But, you know, as in the past, we have we have done share repurchases when the market has gotten and stayed dislocated. So I don’t think there’s anything that’s changed about that strategy, and we will continue to kinda focus on what opportunities we have in the m and a market.

Kim Ulmer, SVP and CFO, Silgan Holdings: Thanks.

Conference Operator: Thank you. We will take our next question from Daniel Rizzo with Jefferies.

Alex, Investor Relations, Silgan Holdings3: Good morning. Thanks for fitting me in. So with the bankruptcy by the customer, does your with everything that’s going on, is your contract now more liberal whereas it gives you a lot more flexibility as this becomes resolved where you don’t have the same commitments that you’ve had since you bought the asset as as you mentioned?

Adam Greenleaf, President and CEO, Silgan Holdings: The the contract continues on in the bankruptcy filing. So, you know, so we are operating they are operating, and we are operating under the same requirements contract that we have been operating under for many, many years that has been renewed multiple times since we originally acquired those assets. So, Dan, no flexibility beyond that. We’ll honor the contract as they are as well.

Alex, Investor Relations, Silgan Holdings3: Okay. And then, I mean, the weather issue was was, I guess, a little bit unique with with the wet spring we we had at least here in the Northeast. But I was wondering if if weather has ever been kind of an issue before or something that I mean, just with with global warming, it’s the kind of more extreme weather patterns if it’s something that could crop up from time to time as we move forward.

Adam Greenleaf, President and CEO, Silgan Holdings: So I think, you know, I’ve been here for twenty years. I think Bob’s a little bit ahead of me on that. It’s the first time that that we’ve seen cold and wet weather affect a a sports drink kind of product in market for a specific period of time for, you know, call it, the fill the peak part of their season. It’s just it was a different experience this year than anything that I’ve seen. So I don’t anticipate it returning going forward, and, you know, we’re planning on normalization for 2026.

Our customers are talking about that and planning for it. So we’ll see what happens then. And and, you know, I think if if I were trying to predict the weather, I would not be very good at that. No.

Gabe Hajde, Analyst, Wells Fargo Securities: No. I I get that.

Alex, Investor Relations, Silgan Holdings3: I guess what I was also thinking is, like, if something, like, with global warming, if, like, warm weather could affect soup, going forward, I mean, from time to time.

Adam Greenleaf, President and CEO, Silgan Holdings: I think I mean, who knows? What I tell you again is I think the the food can and soup included is is probably the lowest cost of means or lowest cost of getting nutrition to consumers that need it. And I I just feel very comfortable saying that I think the the food can will always have a real value for consumers at the end of the day regardless of what the other circumstances may be.

Alex, Investor Relations, Silgan Holdings3: Alright. Thank you very much.

Kim Ulmer, SVP and CFO, Silgan Holdings: Thank

Conference Operator: you. We will take our next question from George Staphos with Bank of America.

George Staphos, Analyst, Bank of America: Hi, everyone. It’s late in the call. I’ll try to ask these quickly. Just for posterity for the next couple of quarters, what should we expect is your volume outlook for the segments for 2025 after 2Q? So I think you already said, metal is still mid single digits.

Correct me if I’m wrong on that. Is custom still mid okay. Single digits even with And DSE, ex beverage, legacy, mid to high sing mid mid single digits are better. Would that be all correct?

Adam Greenleaf, President and CEO, Silgan Holdings: Yep. You’ve got it exactly right, George.

George Staphos, Analyst, Bank of America: Okay. Number two, on the working capital and the work that you did for your customers to mitigate their cost increase, is there any way that you can get paid for that extra working capital effort that you’re putting out for them? Or no. It’s just part of being, you know, a great supplier in the market. How do you how can you get paid for that if at all, or its normal part?

It’s it’s it’s, you know, table stakes.

Adam Greenleaf, President and CEO, Silgan Holdings: Yeah. So it’s an interesting question, George. So I my my first answer is we do get paid for that, and we do get paid for that, you know, throughout the system as as we have our contractual pass throughs. All of the costs associated of procuring that raw material, whether it’s freight, whether it is carry cost, whatever it may be, we ultimately get paid for that. And and our customers and and we lock we’re arm in arm in that conversation, And it was a good thing for them, and and they understand that those costs will will be passed through.

And and we felt it was a great opportunity to help them be advantaged versus their competition in the marketplace.

George Staphos, Analyst, Bank of America: Okay. Appreciate that, Adam. And then the last question, came and up a couple times before. So let’s assume the customer in question here is acquired or has some of those operations acquired. How does the contract work in that at that stage?

Do you are is it still cover are you still covered? Are you still the supplier? Number one. Number two, you know, and you’ve mentioned, and and certainly, we’ve we’ve known this. We’ve covered Sylvan for a very long time that your operations are going to be lower cost.

You’re well located logistically and so on. But since such of the some of the volume has now moved to co pack operations, do you have do your operations have the same status being the best logistically placed, the lowest cost? Because now you know, you know, that volume isn’t necessarily running at where it used to run. How would you answer those questions? Thanks, and and good luck, the rest of the year.

Adam Greenleaf, President and CEO, Silgan Holdings: Sure. Thanks, George. So we we won’t go into specific details of any of our our contracts, but I would just say, broadly speaking, you know, our our long term agreements in metal containers provide for a follow the liquid provision. And and so that’s how we think about metal containers volume anytime there’s a change of control, being considered. So so there’s that component.

The second component is you’re right. The you know, we support these filling assets with the lowest cost, again, near site, on-site production model available in the market. I tell you that even if we bring in a disadvantaged freight component, this site these sites that we’re talking about are probably still advantaged at the end of the day in the can making market in North America. So we feel good about that position. And then the final point, George, I think that, you know I mean, we’ll we’ll have the cost takeout opportunities if if we need them.

And and whether it’s these assets or or other higher cost assets in our system, you know, we’ll have the ability to respond to really anything that happens from from a market perspective with with the assets and whether a new owner wants to run them or not. Maybe the last point for you, George, is is those co pack locations. It’s not that we can’t supply them. It’s just that we’re not supplying them today. I mean, typically, we focus on our brands and helping them be successful in the marketplace, and that’s where a lot of our effort and energy is.

If we need to pivot there, certainly, we could do that with our very low cost footprint as well.

George Staphos, Analyst, Bank of America: Okay. Thanks so much, Adam.

Adam Greenleaf, President and CEO, Silgan Holdings: Thanks, George.

Conference Operator: Thank you. This does conclude today’s question and answer session. I would now like to turn the call back for any additional or closing remarks.

Adam Greenleaf, President and CEO, Silgan Holdings: Great. Thanks, Rachel, and thanks, everyone, for their interest in Silgan. We look forward to sharing our third quarter results later in the year.

Conference Operator: Thank you. This does conclude today’s call. Thank you for your participation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.