Anojja Shah

Anojja Shah inquired about the expected impact of the World Cup on Brazil's performance, including the timing and potential pickup. She also asked for clarification on 'lower input cost recovery' in North America, specifically if it's beyond immediate pass-throughs like aluminum and tariffs, and if it's expected to persist.

Answer

CEO Oliver Graham indicated that the low to mid-single digit guide for Brazil broadly incorporates the World Cup effect, potentially pushing towards the mid-range if Brazil performs well. He expects inventory build and sell-through in Q2. CFO Stefan Schellinger clarified that lower input cost recovery in North America is due to supply chain and metal situation challenges, leading to operational disruptions like shorter runs and suboptimal freight, confirming these costs are expected to persist through the first half of 2026.

Anojja Shah inquired about the expected impact and timing of the World Cup on Brazil's performance, and sought clarification on 'lower input cost recovery' in North America, specifically if it relates to factors beyond immediate aluminum pass-throughs.

Answer

CEO Oliver Graham stated that the low to mid-single digit guide for Brazil incorporates the World Cup effect, with potential for pickup in Q2 due to inventory build and sell-through. CFO Stefan Schellinger clarified that lower input cost recovery in North America stems from supply chain and operational challenges related to metal disruptions, leading to non-recovered freight and associated costs, which are expected to persist through the first half of the year.

Anojja Shah, on behalf of Josh Spector, asked about current capacity utilization rates in North America and Brazil, the impact of a competitor's new plant in Brazil, and whether the updated EBITDA guidance implies conservatism for the second half of the year.

Answer

CEO Oliver Graham and CFO Stefan Schellinger confirmed that the guidance reflects appropriate conservatism given it is early in the year and the macro environment remains volatile. Graham stated North American utilization is in the 90s%, while Brazil is in the high-80s to low-90s. He noted the competitor's new plant in Brazil was long-anticipated and is not a concern, as it reflects the market's healthy long-term growth prospects.

Anojja Shah inquired about the reconciliation between the increased Fit to Win cost savings target of $750 million and the unchanged 2027 adjusted EBITDA target. She also requested an update on the demand forecasting success rate, previously at 50%, and any financial benefits observed.

Answer

CFO John Haudrich clarified that the 'at least $1.45 billion' 2027 adjusted EBITDA target remains, and the increased Fit to Win savings help mitigate commercial environment uncertainty and prolonged affordability challenges. CEO Gordon Hardie reported that the demand forecasting success rate improved to 68%-69% in 2025, highlighting the new Chief Supply Officer's focus on stripping waste from the supply chain with customers and suppliers, noting good progress and significant remaining opportunity.

Anojja Shah of UBS questioned why the 2027 adjusted EBITDA target remained unchanged despite an increased Fit to Win cost savings target of $750 million, suggesting potential offsets from volume. She also requested an update on O-I Glass's progress in improving demand forecasting accuracy with customers, previously at a 50% success rate, and any resulting financial benefits.

Answer

CFO John Haudrich clarified that the "at least $1450 million" 2027 adjusted EBITDA target remains, with the additional $100 million in Fit to Win savings intended to mitigate commercial environment uncertainty and prolonged affordability challenges. CEO Gordon Hardie reported that demand forecasting success with customers improved from 50% to 68-69% in 2025, with the new Chief Supply Officer now focused on further stripping waste and inefficiency from the supply chain to drive future opportunities.

Anojja Shah of UBS Group, sitting in for Josh Spector, asked if halting the Magma project would result in any additional cost savings not previously included in guidance. She also inquired about the updated working capital outlook and its expected contribution to 2025 free cash flow.

Answer

CFO John Haudrich stated that the primary savings from the Magma decision come from reduced R&D and engineering costs, which are already incorporated into the company's overall SG&A savings targets. He confirmed that working capital is now expected to be a benefit of up to $50 million for the year, driven by strong inventory reduction. This positive is offset by higher restructuring costs and interest expense, but the overall target of a $300 million year-over-year improvement in free cash flow remains intact.

Anojja Shah, on behalf of Joshua Spector, inquired about the potential opportunity from tariffs on aluminum and whether O-I has seen early signs of customers considering a switch to glass.

Answer

CEO Gordon Hardie responded that it is too early to see substrate shifts from aluminum, as such changes are complex. CFO John Haudrich added that while aluminum tariffs could help close the price gap, O-I's primary focus is on improving its own cost base through its 'Fit to Win' program, which is a controllable factor, rather than relying on external tariff policies.

Anojja Shah asked for more details on Crown Holdings' investments and growth drivers in Spain, noting previous capacity additions, and requested a comparison of the current can-per-capita rate in Spain versus the UK. She also inquired about the expected impact of Mexico's recently raised sugar beverage tax on Crown's soft drink exposure and volumes in 2026.

Answer

Tim Donahue, Chairman, President and CEO, explained that Spain is a large can market in Europe where Crown has made significant capital investments, including a new plant in Valencia and doubling capacity at the Agoncillo plant, to support relationships with large global customers. He did not provide a specific can-per-capita rate. Regarding Mexico, Donahue stated that the majority of Crown's business there is beer, with soft drinks accounting for a smaller 10-15% of their portfolio.

Anojja Shah asked for more details on Crown Holdings' investments and growth drivers in Spain, including a comparison of the current can-per-capita rate in Spain versus the UK to gauge future growth potential. She also inquired about the impact of Mexico's recently raised sugar beverage tax on Crown's volumes and the company's soft drink exposure in that market.

Answer

Tim Donahue, Chairman, President and CEO, explained that Spain is one of Europe's largest can markets, where Crown has made significant capital investments, including a new plant in Valencia, adding a line to Agoncillo (converted from steel to aluminum), and a plant in Seville, driven by strong relationships with large global customers. He did not provide a specific can-per-capita rate. For Mexico, he stated that the majority of Crown's business is beer, with soft drink exposure being approximately 10%-15% of their portfolio.

Anojja Shah, on for Josh Spector, asked for the Q1 volume growth in Europe, inquired about the trend of reusable packaging in Europe in light of EPR requirements, and asked for an estimate of the North American market's performance in Q1 with a potential product split.

Answer

CEO Timothy Donahue confirmed European beverage can volumes were up 5% in Q1. Regarding reusability, he stated Crown's focus is on maximizing collection and recycling rates to meet sustainability goals, as the can itself is not refillable. For North America, he estimated the total market was up around 3%, with growth in soft drinks and energy likely outpacing alcohol, where flavored alcoholic beverages are offsetting declines in mass beer.

Anojja Shah of UBS, on for Josh Spector, inquired about the tangible benefits from the secular trend of back-end automation in the Transit Packaging business. She also asked for more detail on the drivers of the company's manufacturing improvements.

Answer

President and CEO Timothy Donahue confirmed the company has seen benefits from automation, both for third-party customers and internally, but noted these gains are currently masked by low orders for standard equipment. Regarding manufacturing improvements, he cited high volumes as a key driver of focus and efficiency, but also credited a change in manufacturing leadership in North American beverage over the last 18 months for having a 'tremendous impact' on performance.

Anojja Shah asked about the impact of new FDA food guidelines promoting protein, specifically if this presents a significant opportunity for the metal cans business or if there are offsets elsewhere in the portfolio. She also inquired about the modest step-up in CapEx to $310 million for 2026, asking for details on where investments are expected to increase, particularly for dispensing and pet food growth.

Answer

Adam Greenlee, President and CEO, stated that Silgan is working closely with customers to position products for new FDA guidelines, viewing protein as an opportunity among several, but not specifically outlining it in guidance. Alex Hutter, Senior Vice President, Strategy and Investor Relations, added that protein accounts for about 10% of Metal Containers volume. Sean Fabry, EVP and CFO, confirmed the $310 million CapEx for 2026 is driven by increased growth in pet food and dispensing products, noting satisfaction with pet food customers and long-term agreements. Mr. Greenlee added that investments in wet pet food have been a consistent part of Silgan's CapEx profile for decades, supporting customer growth.

Anojja Shah asked about the potential impact of new FDA food guidelines promoting protein on Silgan's metal cans business, questioning if it represents a significant opportunity or if there are offsets elsewhere in the portfolio. She also inquired about the modest CapEx step-up for 2026, specifically asking for details on where the $10 million year-over-year increase, driven by dispensing and pet food growth, is expected to be allocated.

Answer

CEO Adam Greenlee stated that Silgan is working closely with customers to position products in line with new FDA guidelines, viewing protein as an opportunity for metal cans to deliver nutritional value, but not outlining specific impacts in guidance. SVP Strategy and Investor Relations Alex Hutter added that protein accounts for about 10% of metal containers' volume. CFO Sean Fabry explained that the $310 million CapEx guidance for 2026 is driven by increased investments in pet food and dispensing products, supporting growth prospects and long-term agreements with pet food customers. Mr. Greenlee added that investments in wet pet food have been consistent over the past 30 years, supporting significant customer growth.

Anojja Shah asked about Ball's capital deployment priorities for 2026 beyond share repurchases and dividends, specifically inquiring about potential bolt-on M&A in any of the regions.

Answer

CEO Ron Lewis stated that all capital deployment opportunities are filtered through the EVA lens. For 2026, Ball is balancing new plant construction (Millersburg), continued share buybacks, and the Benepack acquisition, while still aiming to reduce leverage to 2.7x. He sees opportunities across all levers for EVA returns.

Anojja Shah with UBS asked about Ball's capital deployment priorities for 2026 beyond share repurchases and dividends, specifically inquiring if more bolt-on M&A is expected in any of the regions.

Answer

CEO Ron Lewis explained that all capital deployment opportunities are filtered through an EVA lens, balancing new plant builds, share buybacks, the Benepack investment, and leverage reduction. He indicated that Ball sees opportunities across all these levers.

Anojja Shah of UBS Group, on behalf of Josh Sector, asked about the outlook for can demand in a high-inflation environment, questioning if cans are as resistant to inflation as they are to recessions, particularly given potential tariff impacts.

Answer

CEO Daniel Fisher concurred with the premise, stating the business is 'recession resistant not inflation resistant.' He explained that when customers must raise prices to cover their own input costs, it creates a direct volume headwind for Ball, as experienced in recent years. While currently benefiting from consumers trading down, he acknowledged that sustained high inflation would ultimately be a negative for the entire value chain.

Speaking for Josh Sector, Anojja Shah asked about the outlook for beverage cans in a high-inflation environment, considering potential tariff impacts and historical performance during recessions.

Answer

CEO Daniel Fisher characterized the business as 'recession resistant, not inflation resistant.' He explained that when customers pass on higher input costs, it creates a volume headwind for Ball. However, in the current environment where consumers are already strained, it could accelerate a shift to a recessionary dynamic where cans, as a value-oriented package, tend to perform well.

Anojja Shah, on behalf of Josh Sector, inquired about how beverage cans would perform in a high-inflation environment, considering potential tariff impacts.

Answer

Chairman & CEO Daniel Fisher acknowledged that Ball is 'recession resistant, not inflation resistant.' He explained that when customers are forced to pass on significant input cost inflation, it creates a volume headwind for cans. However, in the current environment, can demand is benefiting from a shift to value, but sustained high inflation would be a challenge for the entire value chain.

Anojja Shah sought clarification on whether price increases are excluded from North America's commercial initiatives. She also noted an increase in EMEA's commercial initiatives bucket from $100 million in Q3 to $200 million and asked if potential price decreases in Europe are accounted for within this updated figure.

Answer

Chairman and CEO Andy Silvernail confirmed that no incremental price is included in either North America or EMEA guidance. For EMEA, the $200 million commercial initiatives reflect underlying market growth of 1.7% plus 0.5% from known wins, with no unsettled price changes built in. He highlighted potential upside from unincluded price increases: approximately $630 million annually for a $70/ton increase in North America and $300 million for a EUR 100 paper price increase in Europe.

Anojja Sha sought clarification on the commercial initiatives bucket for EMEA, noting an increase to $200 million from $100 million in Q3, and asked if any potential price decreases in Europe were factored into this guidance.

Answer

Chairman and CEO Andy Silvernail confirmed that no incremental price, whether increases or decreases, is built into the guidance for either North America or EMEA. He explained that EMEA's $200 million commercial initiatives include underlying market growth of 1.7% and known strategic customer wins contributing an additional 0.5% outperformance. He also mentioned a $70 price increase in North America (potential $630 million upside) and a EUR 100 paper price increase in Europe (potential $300 million upside), neither of which are included in the current numbers.

Anojja Shah asked for specifics on the sudden January demand upturn, questioning if it's linked to stimulus or tax refunds given low consumer confidence and unchanged CPG earnings. She also inquired about the 2026 cash tax expectation and potential year-over-year step down due to depreciation expensing.

Answer

President Tom Hassfurther attributed the demand upturn to extremely low customer inventories and increased market positivity from cleared uncertainties, rather than specific stimulus. He noted that while consumer confidence surveys vary, more money in consumers' pockets generally drives demand. CFO Kent Pflederer stated 2026 cash tax would be higher than 2025 but still benefit from bonus depreciation related to the Greif acquisition.

Anojja Shah from UBS asked for specifics on what drove the sudden upturn in demand in January, given mixed consumer confidence and CPG earnings, and whether it was influenced by potential stimulus or tax refunds. She also inquired about the cash tax expectation for 2026 and if a meaningful year-over-year step down was anticipated due to depreciation provisions.

Answer

President Tom Hassfurther attributed the demand upturn to incredibly low customer inventories and a more positive market outlook, with less uncertainty than the previous year, and noted that increased consumer spending ultimately benefits the box business. He also stated that while a specific cash tax forecast for 2026 was not provided, it would be higher than 2025, though still benefiting from bonus depreciation provisions.

Anojja Shah of UBS questioned the guidance for flat sequential packaging prices in Q3, asking if any of the February price increase was still flowing through. She also asked for an update on e-commerce growth trends and the outlook for the year.

Answer

President Thomas Hassfurther explained that the price guidance is flat because PCA typically realizes increases faster than the industry and has essentially completed the pass-through, with only a slight potential upside remaining. On e-commerce, he stated that PCA's customers in the space are still growing at mid-single-digit rates, but noted that e-commerce is a second-half-weighted business, making a full-year outlook difficult mid-year.

Anojja Shah asked about capital allocation priorities for next year, specifically if there's room for bolt-on M&A or international expansion beyond deleveraging and share repurchases, given the significant free cash flow and reduced CapEx.

Answer

Mike Doss (President and CEO, Graphic Packaging) stated that the priorities are deleveraging the balance sheet and returning cash to shareholders.

Anojja Shah asked about Graphic Packaging's capital allocation priorities for the next year, given the expected significant free cash flow, specifically inquiring about the balance between deleveraging, share repurchases, and potential room for bolt-on M&A or international expansion.

Answer

President and CEO Mike Doss stated that the company's primary capital allocation priorities are deleveraging the balance sheet and returning cash to shareholders.

Anojja Shah asked about the historical impact of customer M&A on business and questioned why full-year EBITDA guidance remained flat despite a higher revenue forecast driven by foreign exchange.

Answer

CEO Michael Doss explained that customer M&A is not new and typically involves a re-bidding process rather than a need to requalify products. EVP & CFO Stephen Scherger confirmed the revenue lift was FX-driven and that the flat EBITDA guidance reflects a cautious operational stance, focused on matching supply with uncertain demand rather than an increase in expected inflation.

Anojja Shah inquired about the outlook for capital expenditures in 2026, asking if a significant step-up is expected given the number of ongoing growth projects.

Answer

President and CEO Howard Coker indicated it was too early for a specific 2026 forecast but does not anticipate a material step-up from the current ~$360 million annual run rate. He noted that spending is aligned with the prior year and that a major new customer win would be the primary reason for a significant increase.