Silke Kueck

Silke Kueck inquired whether Crown Holdings' European growth could exceed the 4-5% forecast, potentially reaching high single digits, given the significant new capacity (approximately 2 billion cans) coming online in Greece and Spain.

Answer

Tim Donahue, Chairman, President and CEO, clarified that while new capacity is being installed in 2026, the full run rate of this capacity is not achieved for 18-30 months due to the learning curve. He explained that adding 5-6% capacity to the European footprint means it will be grown into over this extended period, implying that immediate high single-digit growth solely from new capacity might be too optimistic.

Silke Kueck asked if the new capacity coming online in Europe (approximately 2 billion cans from Greece and Spain) could lead to higher European growth rates, potentially in the high single digits, or if the previously suggested 4%-5% growth was a more realistic expectation.

Answer

Tim Donahue, Chairman, President and CEO, clarified that Crown's base capacity in Europe is larger than the quoted figure. He explained that while new capacity installation occurs this year, the full run rate is achieved over an 18-30 month learning curve. Therefore, adding 5%-6% capacity to the footprint is grown into over time rather than immediately producing at full volume, suggesting a more gradual impact on growth rates.

Silke Kueck asked about major product launches for 2026, specifically how the BASF collaboration will affect consumer fragrances/scent or enzymes/H&B. She also inquired if protein-enriched beverages are an opportunity for IFF, and if so, whether it's a taste or H&B opportunity. Finally, she asked if faster growth in regionals/locals implies faster private label growth and how IFF approaches private label business.

Answer

CEO Erik Fyrwald explained the BASF collaboration leverages BASF's chemistry position and IFF's enzymes, expecting enzyme growth from late 2026 into 2027, which will also improve scent relationships. He confirmed strong protein movement, especially in plant-based proteins, creating growth opportunities for IFF's protein business and broader food ingredients (mouthfeel, taste, stability), opening doors for taste capabilities. He affirmed that faster regional/local growth includes private label, and IFF is increasing emphasis on working with private label retailers and co-manufacturers.

Silke Kueck asked about major product launches for 2026, the impact of the BASF collaboration on consumer fragrances/scent versus H&B enzymes, the opportunity for IFF in protein-enriched beverages (Taste vs. H&B), and how IFF approaches the private label business given faster growth in regionals and locals.

Answer

CEO Erik Fyrwald explained that the BASF collaboration presents a strong opportunity for enzyme growth (H&B) starting late 2026 into 2027, also improving scent relationships. He noted strong growth in protein-enriched beverages, benefiting IFF's plant-based proteins (Food Ingredients) and creating opportunities for broader food ingredients and Taste capabilities to offer total solutions. He confirmed that private label is increasingly important due to the K-economy, and IFF is emphasizing work with private label retailers and co-manufacturers.

Silke Kueck, on for Jeff Zekauskas, suggested the Q2 EBIT margin outlook seemed conservative and questioned the underlying SG&A assumptions. She also asked about the annual run-rate of MAP-related charges and sought clarification on the potential accrual for the Rust-Oleum litigation.

Answer

Frank Sullivan, Chair and CEO, affirmed that the margin dynamics and SG&A discipline from Q1 would continue into Q2, and that any volume upside would lead to better-than-guided results. On the litigation, he stated the accrual range is from $0.5 million to the original $190 million verdict, but the company feels strongly about a significantly different outcome on appeal, given the case relates to a $2 million product line and is a contractual IP dispute, not a product liability issue.