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SILGAN HOLDINGS INC (SLGN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered record Adjusted EBIT ($193.0M) on net sales of $1.54B (+11% YoY), with adjusted EPS of $1.01; Dispensing & Specialty Closures posted record net sales and Adjusted EBIT, while Metal Containers improved EBIT on normalized production .
  • Versus consensus, revenue was a modest beat ($1.539B vs $1.533B*) while EPS was slightly below ($1.01 vs $1.03*) as hot-fill beverage closures underperformed due to unusually cool/wet weather, and FX/geographic mix raised the effective tax rate .
  • FY25 guidance was lowered: adjusted EPS to $3.85–$4.05 (from $4.00–$4.20) and FCF to ~$430M (from ~$450M), citing two discrete items: North American beverage closures (-$10M segment EBIT) and a customer bankruptcy in Metal Containers (-$10M in H2) .
  • Near-term catalyst: guidance reset tied to beverage closures/weather and bankruptcy, offset by strong Dispensing momentum (fragrance/beauty, samplers “sold out”) and pet food growth; Q3 EPS guided to $1.18–$1.28 .

What Went Well and What Went Wrong

What Went Well

  • Record quarter in Dispensing & Specialty Closures: net sales $702.2M (+24% YoY) and Adjusted EBIT $107.9M (+16%), driven by Weener integration and strong dispensing volumes .
  • Pet food strength: mid-single digit volume growth in Q2; Metal Containers Adjusted EBIT +$12.3M YoY on normalized production and favorable price/cost .
  • Management execution and innovation: “Our teams continue to win… record first half Adjusted EBIT,” with continued acceleration expected in dispensing and pet food into H2 ; CEO: “sampler platform… essentially sold out” in prestige fragrance; volumes accelerating in H2 .

What Went Wrong

  • Hot-fill beverage closures: North American volumes below plan due to cool/wet weather; segment EBIT headwind ~$5M in Q2 and ~$10M for the year .
  • Customer bankruptcy: Metal Containers H2 impact ~$10M; Q3 segment EBIT expected slightly below prior year (+$5–$10M headwind) .
  • Working capital swing: outflow tied to pre-buying raw materials ahead of tariffs; FCF reduced ~$20M in FY25 (from $450M to ~$430M) though timing expected to normalize by year-end .

Financial Results

MetricQ4 2024 (oldest)Q1 2025Q2 2025 (newest)
Revenue ($USD Billions)$1.411 $1.467 $1.539
Diluted EPS (GAAP) ($)$0.42 $0.63 $0.83
Adjusted EPS ($)$0.85 $0.82 $1.01
EBIT Margin %10.21%*9.65%*11.53%*

Note: Values with asterisk (*) retrieved from S&P Global.

Q2 2025 Actual vs ConsensusRevenue ($USD Billions)EPS ($)# of Estimates (EPS)# of Estimates (Revenue)
Actual$1.539 $1.01 ——
Consensus$1.533*$1.03*8*9*

Note: Consensus values retrieved from S&P Global.

Segment breakdown (Q2 YoY):

SegmentQ2 2024Q2 2025Change
Dispensing & Specialty Closures – Net Sales ($MM)$565.4 $702.2 +24%
Dispensing & Specialty Closures – Adjusted EBIT ($MM)$92.7 $107.9 +16%
Metal Containers – Net Sales ($MM)$650.8 $676.1 +4%
Metal Containers – Adjusted EBIT ($MM)$58.5 $70.8 +$12.3
Custom Containers – Net Sales ($MM)$165.2 $160.9 -3%
Custom Containers – Adjusted EBIT ($MM)$22.5 $24.9 +$2.4

KPIs:

KPIQ2 2024Q2 2025
Total Adjusted EBIT ($MM)$165.3 $193.0
Total Adjusted EBITDA ($MM)$218.5 $253.0
Effective Tax Rate (%)24.3% 25.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$4.00–$4.20 $3.85–$4.05 Lowered
Free Cash Flow ($MM)FY 2025~$450 ~$430 Lowered
Q3 Adjusted EPSQ3 2025—$1.18–$1.28 New
Interest Expense ($MM)FY 2025~185 ~185 Maintained
Effective Tax Rate (%)FY 2025~24 ~24 Maintained
Corporate Expense ($MM)FY 2025~45 ~45 Maintained
CapEx ($MM)FY 2025~300 ~300 Maintained
Total Adjusted EBITFY 2025Mid-teen % increase Low-teen % increase Lowered
DSC Adjusted EBITFY 2025>20% increase ~20% increase Maintained
Custom Containers Adjusted EBITFY 2025Mid-teen % increase Mid-teen % increase Maintained
Metal Containers Adjusted EBITDAFY 2025High-single digit increase Mid-single digit increase Lowered
Dividend ($/share)Q3 2025—$0.20 (payable Sep 16, record Sep 2) Declared

Drivers of the change: beverage closures weather impact (-$10M segment EBIT) and customer bankruptcy in Metal Containers (-$10M H2) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Dispensing momentum (fragrance/beauty)Record segment Adj. EBIT; double-digit dispensing volumes; Weener acquisition closed [31 not needed]Record Adj. EBIT; “samplers… sold out” and H2 acceleration; integration producing opportunities Strengthening
Pet food demandDouble-digit Q4 volume; mid-single digit Q1 growth; ~50% of can volume Mid-single digit Q2 growth; H2 acceleration expected Strong/stable
Hot-fill beverage closuresQ1: mixed promotional outcomes; new beverage award ramps late 2025 Weather-driven volume shortfall; ~$5M Q2 EBIT headwind; ~$10M FY impact; recovery expected in 2026 Near-term headwind
Tariffs/working capitalQ1: limited DSC cross-border, natural hedge; FX held at spot Pre-buy raw materials to mitigate tariffs caused working capital outflow; FCF timing impact only Managed
Customer bankruptcy (Metal)Q4: pack volume cuts; Metal down on fruit/veg; prepared for outcomes ~$10M H2 impact; Q3 Metal EBIT slightly below; contract “follow-the-liquid” protections Discrete headwind
M&A/capital allocationQ4/Q1: ready for deals; delever to low end of 2.5–3.5x; buybacks if dislocation No strategy change; opportunistic buybacks possible; pipeline remains active Consistent

Management Commentary

  • “Our second quarter results… delivered 15% Adjusted EPS growth and record Adjusted EBIT driven by strategic initiatives, strong execution, and capital deployment” .
  • “Dispensing and Specialty Closures… another quarter of record Adjusted EBIT… over 40% growth in dispensing products” .
  • “We are positioned to achieve a 9% increase in Adjusted EPS and exceed $1 billion in Adjusted EBITDA at the midpoint of our estimated Adjusted EPS range in 2025” .
  • CFO: “Net sales of approximately $1.5 billion increased 11%… Record total Adjusted EBIT… $193 million (+17% YoY)… Adjusted EPS of $1.01 (+15%)” .

Q&A Highlights

  • Bankruptcy impact and risk management: Company expects ~$10M H2 EBIT effect; “no financial exposure” from the filing; advantaged near/on-site supply; readiness for multiple outcomes .
  • Beverage closures outlook: Legacy dispensing mid-to-high single digit growth ex-beverage; hot-fill volumes impacted by weather and tempered promotions; recovery expected in 2026 .
  • Working capital and tariffs: Pre-buying raw materials ahead of tariffs drove timing outflow; costs passed through under contracts; FCF effect is timing only .
  • Capital allocation: Guidance cut ~4% mid-point; strategy unchanged; M&A prioritized; buybacks if market dislocation persists .
  • Contract protections: “Follow-the-liquid” provisions and advantaged footprint support retention of supply even under change of control .

Estimates Context

  • Q2 2025: Adjusted EPS $1.01 vs consensus ~$1.03* (slight miss); revenue $1.539B vs ~$1.533B* (beat) .
  • Q3 2025: Company guides $1.18–$1.28; consensus EPS ~1.22* sits within guidance; implied sales growth mid-to-high 20% YoY driven by Dispensing and Weener, with Metal slightly below prior year EBIT due to bankruptcy impact .
  • Implications: Street EPS models likely edge down FY25 on beverage closures/weather and bankruptcy impacts; Dispensing momentum and pet food strength partially offset.
    Note: Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Quality of earnings remains strong: record Adjusted EBIT/EBITDA with Dispensing driving mix and margin expansion; Metal improving on normalized production .
  • Guidance reset appears driven by discrete, non-structural items (weather in hot-fill beverage; a single customer bankruptcy), with H2 tailwinds in Dispensing/fragrance and pet food .
  • Near-term setup: Q3 EPS guide brackets consensus; expect continued Dispensing outperformance and Metal modestly below prior year due to bankruptcy; watch beverage closures normalization into 2026 .
  • Cash flow discipline intact: FCF trimmed ~$20M on timing, but contracts pass through costs; working capital expected to normalize by year-end .
  • Capital deployment optionality: delevering toward low end of 2.5–3.5x; M&A remains priority; potential opportunistic buybacks if valuation dislocation persists .
  • Segment focus: Maintain overweight to Dispensing (fragrance/beauty, healthcare) and pet food; monitor soup stability and fruit/veg pack through Q3 season .
  • Risk watchlist: weather-sensitive beverage closures, bankruptcy resolution path, tariff impacts (operationally mitigated), FX/tax mix .