Mike Roxland

Mike Roxland asked about the demand trends observed in January and early February. He also inquired about Crown Holdings' expectations for food can demand in 2026, specifically if the company anticipates growing above the market or gaining share.

Answer

Tim Donahue, Chairman, President and CEO, reported that January demand was as expected, with some potential impact from weather, but February started strong and is 'more than fully recovering any shortfalls' from January. For food can demand in 2026, he expects Crown to grow 'a touch above market,' primarily driven by its customer set and strong position in wet pet food, which is growing faster than human food in cans.

Mike Roxland asked about Crown Holdings' demand trends observed in January and early February 2026. He also inquired about expectations for food can demand growth in 2026, specifically if Crown anticipates growing above the market or gaining share, particularly in wet pet food.

Answer

Tim Donahue, Chairman, President and CEO, indicated that January demand was as expected, with some weather-related impact on shipments, but February started strong and is 'more than fully recovering' any January shortfalls. Regarding food cans, Donahue stated that Crown's customer set, especially in wet pet food, provides an opportunity to grow 'a touch above market,' as Crown and one other company are primary beneficiaries of pet food growth, which is outpacing human food in cans.

Mike Roxland asked about Crown Holdings' capital allocation strategy for 2026, specifically regarding share repurchases, given strong growth, increased free cash flow, and achieving the targeted leverage level. He also inquired if the $450 million-$500 million CapEx for 2026 includes only the Greece lines and Brazil plant, or if other projects could increase that number.

Answer

President and CEO Tim Donahue stated that with exceptional cash flow expected in 2026 and leverage around 2.5x, the company has significant flexibility for capital allocation, including opportunistic share repurchases, without committing to a specific number. He confirmed that the CapEx guidance for 2026 includes the two new lines in Greece, the modernization of the German plant, and a third line in Brazil, noting there might be one other unannounced opportunity that could potentially increase the CapEx.

Mike Roxland asked about the capital allocation strategy for 2026, given strong growth, increased free cash flow, and achieving the targeted leverage level. He sought clarity on potential share repurchase amounts and details on the $450-$500 million CapEx for 2026, including specific projects and the possibility of higher spending.

Answer

President and CEO Tim Donahue and SVP and CFO Kevin Clothier reiterated exceptional cash flow and balance sheet strength, allowing flexibility for opportunistic share repurchases or debt paydown while maintaining the 2.5x leverage target, though no specific buyback number was provided. Tim Donahue confirmed the 2026 CapEx includes new lines in Greece, the German plant modernization, and a third line in Brazil, with potential for one additional unannounced project.

Mike Roxland requested more details on the specific wins achieved through the Weener acquisition, asking about the types of products involved and the expected growth contribution from Weener in 2026. He also inquired about the metal containers segment, specifically if Silgan could regain lost tomato share due to a recent bankruptcy settlement, the total EBITDA loss (if any) from the customer bankruptcy, and whether Silgan still plans asset rationalization or consolidation in metal containers.

Answer

CEO Adam Greenlee explained that Weener is fully integrated into the dispensing business, contributing to the mid-single-digit growth forecast for dispensing products in 2026. He cited an example of leveraging Weener's valve technology with existing Silgan food customers in North America and growing deodorant and personal care products. Regarding the customer bankruptcy, Mr. Greenlee clarified that the situation is not fully resolved but noted that the broth and fruit businesses are going to existing Silgan customers, and the vegetable business to a new player where Silgan is co-located, positioning them well. He stated that Silgan does not anticipate further risk in 2026 from this situation, having already closed a facility in 2024 as part of a cost reduction program.

Mike Roxland requested more details on the specific wins achieved through the Weener acquisition, including product types and expected growth contribution. He also asked about the Metal Containers segment, specifically if Silgan could regain lost tomato share due to a customer's bankruptcy settlement, the total EBITDA loss from the bankruptcy, and any plans for asset rationalization or consolidation in the segment.

Answer

Adam Greenlee, President and CEO, reiterated that Weener is fully integrated into the Dispensing and Specialty Closures segment's mid-single-digit growth. He cited leveraging Weener's valve technology with existing Silgan food customers in North America and growing deodorant/personal care products as examples of combined strength. Regarding the Metal Containers customer bankruptcy, Mr. Greenlee stated the situation is not fully resolved but indicated that broth and fruit businesses are going to existing Silgan customers, and the vegetable business to a new player where Silgan is co-located and well-positioned. He expects no significant upside or risk in 2026 and noted a facility closure in 2024 as part of a cost reduction program related to this customer, deferring further asset decisions until full resolution.

Mike Roxland asked for Adam Greenlee's rationale for remaining in the North America hot fill beverage market, given its recent issues and a peer's exit. He also sought confirmation on the double-digit decline in hot fill sports drink volumes in Q3 and an update on the metal containers customer undergoing bankruptcy, including the $10 million EBIT impact for 2H and potential 2026 implications.

Answer

Adam Greenlee, President and CEO, Silgan Holdings, defended the North America hot fill beverage market as historically stable and growing, offering technologically advanced closure solutions. He confirmed the 10% decline in hot fill sports drink volumes in Q3 was in line with expectations, attributing it to isolated weather challenges. Regarding the bankruptcy, Greenlee stated no new update, with resolution expected around year-end. He noted the customer performed as expected in Q3 and reiterated a potential $10 million cost reduction opportunity over the next couple of years if volumes remain at current levels, suggesting a new owner might grow the business.

Mike Roxland with Truist asked about any potential changes in customer relationships or business wins following recent management changes and a 'back to basics' approach, and for an update on the $500 million Ball Business System savings, including how much has been realized and if the company is on track for year-end completion and standardized operating practices.

Answer

CEO Ron Lewis highlighted strong customer interactions and long-term strategic partnerships, with contracts extending into 2027 and beyond. He confirmed that the $500 million cost savings target from the Ball Business System will be delivered within the three-year timeframe (2024-2026), with more than two-thirds (closer to three-quarters) already achieved. He emphasized continuous improvement and standardized operational excellence across all 67 plants globally.

Mike Roxland asked about any potential changes in customer relationships or business wins resulting from recent management changes or a 'back to basics' approach, and the progress made on the $500 million Ball Business System savings target.

Answer

CEO Ron Lewis stated that customer interactions have been positive, and Ball is well-contracted with strategic customers into the next decade, indicating no negative impact from management changes. He confirmed that over two-thirds (more like three-quarters) of the $500 million cost savings target from the Ball Business System has been delivered in the first two years (2024-2025) of the three-year plan, and all 67 plants have rolled out the Ball Operational Excellence platform.

Mike Roxland questioned the stickiness of North American costs, particularly mill reliability, given a Q4 volume increase but an EBITDA miss. He asked which costs are most problematic and how they are being addressed. He also asked if the challenging North American cost structure influenced the decision to spin off the European business.

Answer

Chairman and CEO Andy Silvernail acknowledged over $700 million in total cost reductions. He identified lingering costs from mill shutdowns/closures and the need for consistent investment in mill reliability as stickier challenges. He emphasized aggressive investments in the North American mill system (CapEx, transformation costs, Lighthouse rollout) to drive reliability and customer satisfaction. Mr. Silvernail firmly stated that the challenging North American cost structure was not a factor in the spin-off decision. The primary driver was to create two distinct regional powerhouses with minimal overlap, allowing for focused capital allocation and strategy tailored to unique market dynamics in each region.

Mike Roxland questioned the 'stickiness' of certain costs in North America, such as mill reliability, and how the company plans to address them. He also asked if the cost structure challenges in North America were a factor in the decision to spin off the European business.

Answer

Chairman and CEO Andy Silvernail acknowledged that lingering costs from mill closures and consistent investment in reliability are harder to address, but expressed satisfaction with over $700 million in total cost reductions. He emphasized aggressive investments in the North American mill system, including expanded CapEx and Lighthouse model rollout, to drive reliability. He clarified that the spin-off decision was driven by the value creation potential of two distinct regional powerhouses, simplifying complexity, and aligning capital and people to unique market opportunities, rather than North America's cost structure.

Mike Roxland followed up on the 5% volume decline in Q1, asking what gives management confidence in achieving flat to slightly up volumes for the full year, and the implications for the EBITDA guide if volumes remain weak. He also asked for clarification on the fiber price-cost spread anniversary and details on the proprietary SiOx barrier technology.

Answer

CFO Larry Hilsheimer reiterated confidence in the low-end EBITDA guidance, noting Q1 was expected to be low and small plastic volumes are picking up in Q2. CEO Ole Rosgaard added that the full-year volume bridge was not based on Q1 performance but on expected normalization, emphasizing commercial team activities, organizational changes, new incentive programs, and disciplined CapEx targeting short-term gains. Larry Hilsheimer clarified that the fiber price-cost spread would annualize in the second half of the fiscal year. Ole Rosgaard confirmed the SiOx technology is operational in France, with three more machines in production for deployment this year, and they have received orders.

Mike Roxland asked about the company's confidence in achieving flat to slightly up volumes for the year, given the 5% decline in Q1, and the implications for the EBITDA guide if volumes remain weak. He also followed up on the Fiber price-cost spread and requested more details on the proprietary SiOx barrier technology.

Answer

CFO Larry Hilsheimer expressed extreme confidence in the low-end EBITDA guidance, noting Q1 was expected to be low and small plastic volumes are now picking up. CEO Ole Rosgaard clarified that the full-year volume bridge was not based on Q1 year-over-year performance and that commercial team activities, organizational changes, and targeted CapEx are driving customer wins and share gains. Larry Hilsheimer explained that the Fiber price-cost spread would annualize in the second half, particularly the last quarter, due to contractual pass-throughs. Ole Rosgaard confirmed that the SiOx technology has received orders, with the first machine operational in France and three more in production this year, showing very good initial results, though the financial impact for this year is not significant.

Mike Roxland sought reconciliation for the projected $700 million to $800 million free cash flow in 2026, considering the year-to-date negative adjusted free cash flow, the $400 million CapEx step-down, and the impact of higher working capital, cash taxes, and interest mentioned in the previous quarter. He also questioned the comfort level in bringing 550,000 tons of Waco capacity online in a depressed market, or the flexibility to push out if SBS/folding cartons do not improve.

Answer

SVP and Chief Accounting Officer Chuck Leisher highlighted that Q4 is typically a strong cash quarter. He outlined the bridge to 2026 free cash flow, including the $400 million CapEx reduction, cost controls (SG&A, plant, discretionary spending), inventory reduction, and favorable federal cash taxes, which are expected to be near zero. President and CEO Mike Doss stated they will ramp Waco as fast as possible as it's their lowest cost/highest quality mill, using the K1 machine to match supply/demand, which will help compete in new markets and protect margins.

Mike Roxland followed up on the 1-2% growth lost in Europe due to inability to pivot to smaller formats, asking how AMP plans to become more nimble and shift its mix away from beer in Q4 and early 2026. He also inquired if new lines would be built with greater flexibility and about the risk of North America metal supply issues persisting into 2026.

Answer

Oliver Graham (CEO) explained that AMP is undertaking projects in Q4 and Q1 to convert lines and add flexibility for specialty sizes in Europe, and future new capacity will incorporate this flexibility. He expressed confidence that there is no risk to North America's metal supply in 2026, citing new mills ramping up, Novelis's operational issues being resolved, and diversified sourcing strategies.

Mike Roxland followed up on the 1-2% lost growth in Europe due to inability to pivot to smaller formats, asking how the company plans to become more nimble to capture growth categories and minimize beer exposure. He also asked if new lines would be built with flexibility and about the risk of North America's metal supply issues persisting into 2026.

Answer

CEO Oliver Graham explained that projects are underway in Q4/Q1 to convert lines and add flexibility for specialty sizes in Europe, which will improve agility for Q2/Q3 next year. He confirmed new capacity would be built with flexibility. For North America, he expressed confidence that metal supply issues would not impact 2026 volumes, citing new mills, supplier fixes, and diversified supply chains.

Mike Roxland asked about potential upside to Greif's projected $240 million EBITDA and $60 million synergies. He also sought details on the benefits derived from the extended five-week maintenance outage at the Massillon mill and whether the lower-than-expected Greif EBITDA for the first month of ownership was due to outages, economic downtime, or inventory management. Additionally, he inquired about initial thoughts on 2026 capital expenditures.

Answer

CEO Mark Kowlzan stated that PCA is sticking with current Greif projections but sees daily positive results, with upside dependent on market conditions. He detailed extensive work by PCA personnel at Massillon, covering cleaning, inspection, and equipment upgrades, expecting tens of millions in CapEx over the next couple of years for improvements, not half a billion like previous acquisitions. He noted a 50% quality improvement at Massillon post-outage. CFO Kent Pflederer clarified that the lower Greif EBITDA was primarily due to outages and revenue/profit recognition timing, not economic downtime. Mark Kowlzan added that 2026 CapEx plans would be updated in January, highlighting ongoing large converting projects and future energy projects aimed at making three mills electricity independent.

Mike Roxland followed up on the projected GRIF EBITDA and synergy numbers, asking if there was potential upside after six weeks of ownership. He also requested comments on efficiency and cost improvements at the Massillon mill, specifically the benefits from its extended five-week maintenance outage. Additionally, he questioned if GRIF's lower-than-expected EBITDA for the first month was due to outages or economic downtime, and asked for initial thoughts on 2026 capital expenditures.

Answer

CEO Mark Kowlzan stated PCA would remain conservative with projections but acknowledged potential upside depending on market conditions. He detailed extensive PCA personnel involvement in Massillon's comprehensive refurbishment, leading to a 50% improvement in quality metrics post-startup. He projected capital spending for GRIF mill improvements to be in the tens of millions over the next couple of years, not hundreds of millions. CFO Kent Pflederer clarified that GRIF's initial lower EBITDA was primarily due to outages and revenue recognition timing, not economic downtime. Mark Kowlzan mentioned 2026 CapEx plans would be updated in January, highlighting ongoing major projects in Ohio and New York, and future energy opportunities.