CROWN HOLDINGS, INC. Q4 FY2024 earnings call

• Fourth quarter operating performance was well ahead of prior year, driven by stronger global beverage can businesses. - Americas Beverage had 8% income improvement in Q4 with 5% shipment increase. - European beverage volumes up 8% in Q4, full-year up 7% leading to record income. - Asia Pacific income up 27% full-year, with stabilization efforts. - Company received $338 million from sale of Eviosus and recorded a $275 million gain. - Delivered record adjusted EBITDA of $1.942 billion for the year, up from $1.882 billion in 2023. - Returned $336 million to shareholders in 2024 ($119 million dividends, $217 million share repurchases). - Reduced net leverage to 2.7 times at year-end, with target to 2.5 by end of 2025.

The company's segment performance included: Beverage businesses saw net sales up, with segment income $428 million in Q4 vs $382 million prior year. Americas Beverage had an 8% income improvement in Q4 with a 5% shipment increase, North American volumes up 7% in Q4 and 7% full-year, Brazil up 4% full-year. European beverage volumes increased 8% in Q4, full-year up 7%, leading to record income. Asia Pacific income was up 27% full-year, though Q4 volumes down 4% due to prior year actions. North American food volumes improved significantly. Transit packaging had lower volumes impacted by macroeconomic headwinds. Revenue contribution: Beverage businesses were a key contributor, with global beverage can growth driving performance.

• First quarter 2025 adjusted earnings per diluted share projected in range of $1.20 to $1.30 per share, full-year range $6.60 to $7.00 per share. - 2025 full-year adjusted free cash flow estimated at approximately $800 million after $450 million capital spending. - Net leverage expected to be closer to targeted ratio of 2.5 at end of 2025. - Adjusted earnings guidance includes net interest expense, exchange rates, tax rate, depreciation, non-controlling interest expense and dividends.

• Macroeconomic headwinds impacting the transit business. - Potential tariff impacts with indirect exposure via consumer spending. - Uncertainties in industrial rebound for transit packaging, with first six months of 2025 expected to be similar to prior period. - Substrate substitution regulations and consumer spending patterns in different regions posing potential challenges.

Q: Tariff impact on transit business?

A: With more appropriate tariff levels on China, there could be protection for the domestic transit business. The 232 tariffs had negative knock-on effects, but there's an opportunity to protect domestic businesses.

Q: Volume in Mexico and its outlook?

A: Mexico is a large business over a billion dollars, with a little mismatch in 2025 but largely solid. Had a customer gain last year and a little loss this year, but overall a solid business.

Q: Depreciation and EBITDA guidance?

A: Depreciation around $310 million, and EBITDA guidance is within the range discussed, with depreciation expected to increase year on year as capital spending is higher than depreciation.

Q: Substrate substitution in U.S., Brazil, Mexico?

A: U.S. glass to can transition is mostly complete, PET has runway. Brazil beer is 65-70% cans, soft drinks still 80% EEG. Mexico has room for can growth in beer and soft drinks.

Q: Outlook for North American food cans?

A: North American food cans have been relatively stable to up for the last six to eight quarters, with a well-balanced portfolio including strong pet food and vegetable presence, driving improvement in performance.