SILGAN HOLDINGS INC Q4 FY2024 earnings call

• 2024 was a year of strong performance with mid-single-digit organic adjusted EPS growth and double-digit free cash flow growth despite customer destocking. - Made progress on $50M cost-saving initiative and invested in businesses. - Acquired Weener Packaging, adding a high-margin, strong organic growth business. - Dispensing and Specialty Closures had three consecutive quarters of double-digit organic growth, Metal Containers' pet food markets showed improving trends, Custom Containers had strong operating performance. - Outlook for 2025 includes record performance with double-digit earnings and free cash flow growth, segment-wise volume growth expectations.

Dispensing and Specialty Closures: Fourth quarter sales increased 22% vs prior year, adjusted EBITDA margins expanded, organic volumes expected mid-single-digit growth in 2025. Metal Containers: Sales declined 8% vs prior year, adjusted EBIT increased 3%, volumes expected mid-single-digit growth in 2025. Custom Containers: Sales increased 6% vs prior year quarter, adjusted EBIT increased 40%, volumes expected mid-single-digit growth in 2025.

• Adjusted EPS expected in range of $4 to $4.20, midpoint 13% increase from 2024. - Depreciation expected to increase $40M to $50M. - Dispensing and Specialty Closures organic volumes mid-single-digit growth, Metal Containers volumes mid-single-digit growth, Custom Containers volumes mid-single-digit growth. - Free cash flow estimate approximately $450M, 15% increase from prior year.

• Inventory reduction in Dispensing and Specialty Closures led to $10M impact on adjusted EBIT. - Dynamic market conditions in fruit and vegetable markets with customer inventory reductions and severe weather. - Integration challenges with acquisitions, including communication and operational alignment.

Q: Talk about learnings with Weener so far, discrete cost reduction, and tax rate.

A: Weener integration has gone well, learned about more commercial opportunities than anticipated, $30M cost reduction expected in 2025, tax rate for Q4 was 8.8% due to foreign tax restructuring.

Q: Bridge volume differential and confidence in 2025 volume growth.

A: 2024 was a more normal business environment, less noise around customers and consumers, strategic initiatives delivering value, confidence in 2025 being a normal year.

Q: M&A strategy and Eurobonds.

A: Actively looking at M&A opportunities, balance sheet supports, Eurobonds due in March will be addressed opportunistically.

Q: Inventory reduction in Dispensing and Specialty Closures and new business wins in dispensing.

A: Inventory reduction was part of restructuring to optimize, dispensing has many new wins in 2024 and more in 2025 with innovation and design driving growth.

Q: Free cash flow components and M&A capacity.

A: Free cash flow components include higher interest, cash tax, but working capital benefits, actively looking at M&A with good pipeline.

Q: Evolution of DSC and metal cans competitive landscape.

A: DSC is high-margin, fast-growing, focus on capital allocation, metal cans 90% of business under long-term contracts, stable market activity with strong customer partnerships.

Q: Customer feedback and corporate costs.

A: Customers have targeted promotional activity, corporate costs around $40M due to development activity, free cash flow expected to continue growing.

Q: Restructuring charges in Custom Containers and Weener Q4 performance.

A: Restructuring charges part of cost savings program, Weener performed well in Q4, slightly above acquisition model.

Q: Commercial opportunities with Weener and fruit vegetable market outlook.

A: No revenue synergies modeled, fruit vegetable market still working on pack plans, expecting to recover half of 2024 financial impact.

Q: Philippe Chevrier's impact and pet food operations.

A: Chevrier brings strong leadership, pet food is a large part of Metal Containers, diversifying aluminum supply chain to manage risks.

Q: Comps and pet food growth in 2025.

A: 2025 will have growth, pet food growth driven by customer investments and contractual arrangements