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SILGAN HOLDINGS INC (SLGN)·Q4 2024 Earnings Summary

Executive Summary

  • Record Q4 on an adjusted basis: revenue $1.41B (+5% YoY), adjusted EPS $0.85 (+35% YoY), and total Adjusted EBIT $151.7M (+12% YoY), driven by Dispensing & Specialty Closures strength and contribution from Weener Packaging .
  • GAAP EPS fell to $0.42 (vs $0.60 LY) on higher restructuring and acquisition-related costs; unusually low 8.8% tax rate aided GAAP net income but management guided back to a ~24% tax rate for 2025 .
  • 2025 outlook calls for double‑digit growth: adjusted EPS $4.00–$4.20, free cash flow ~$450M, interest ~$185M, tax ~24%, and capex ~$300M; Q1’25 adj. EPS $0.74–$0.84, with higher volumes and Adjusted EBIT across all segments .
  • Strategic drivers: three consecutive quarters of double‑digit dispensing volume growth; record segment Adjusted EBIT; pet food volumes up double‑digits; Weener integration tracking slightly ahead on profit, with additional commercial opportunities identified .

What Went Well and What Went Wrong

What Went Well

  • Record Dispensing & Specialty Closures performance: segment net sales up 22% to $639.4M; Adjusted EBIT up to $99.9M (record), with Weener contributing ~$11.1M and double‑digit organic dispensing volume growth .
  • Pet food drove Metal Containers stability: despite sales -8% from mix, Adjusted EBIT rose to $41.9M on favorable price/cost and SG&A management; double‑digit pet food growth offset fruit/veg weakness .
  • Free cash flow beat: FY24 FCF $391.3M (vs guide ~$375M), aided by working capital improvements including deliberate inventory reductions in closures late in Q4; company exceeded prior FCF estimate .

Selected management quotes:

  • “Our Dispensing and Specialty Closures business continues to perform exceptionally well and achieved record…Adjusted EBIT and the third consecutive quarter of double-digit…growth in dispensing products” .
  • “We are…positioned to deliver record performance in 2025 with double-digit increases to both earnings and free cash flow” .

What Went Wrong

  • GAAP profitability pressured by restructuring and acquisition costs: Q4 EBIT $94.2M (vs $126.1M LY) with $21.4M restructuring and $15.7M acquisition costs; GAAP EPS $0.42 (vs $0.60 LY) .
  • Mix headwinds in Metal Containers: segment sales -8% YoY to $610.2M as fruit & veg volumes fell due to severe weather and a major customer’s planned pack reduction; sales mix skewed to smaller pet cans pressured revenue .
  • Closures inventory optimization reduced segment profit by ~$10M relative to plan in late Q4 as higher-cost inventory was sold through to rightsize working capital .

Financial Results

Headline Results vs prior year and prior quarter

MetricQ4 2023Q3 2024Q4 2024Consensus (Q4 2024)
Revenue ($M)$1,340.1 $1,745.1 $1,411.2 N/A (S&P Global data unavailable)
GAAP EPS ($)$0.60 $0.93 $0.42 N/A (S&P Global data unavailable)
Adjusted EPS ($)$0.63 $1.21 $0.85 N/A (S&P Global data unavailable)
GAAP EBIT ($M)$126.1 $167.3 $94.2 N/A

Notes: SPGI consensus unavailable due to data access limit at time of query.

Margins (computed from company-reported figures)

MetricQ4 2023Q3 2024Q4 2024
Gross Profit ($M)$218.5 $293.3 $239.0
Gross Margin (%)16.3% 16.8% 16.9%
GAAP EBIT Margin (%)9.4% 9.6% 6.7%
Total Adjusted EBIT ($M)$135.9 $205.6 $151.7
Adjusted EBIT Margin (%)10.1% 11.8% 10.8%

(Percentages derived from reported sales and profit figures.)

Segment Breakdown – Q4 2024 vs Q4 2023

SegmentNet Sales Q4’23 ($M)Net Sales Q4’24 ($M)YoY %Adjusted EBIT Q4’23 ($M)Adjusted EBIT Q4’24 ($M)YoY %
Dispensing & Specialty Closures$522.3 $639.4 +22% $87.0 $99.9 +15%
Metal Containers$665.3 $610.2 -8% $40.8 $41.9 +3%
Custom Containers$152.5 $161.6 +6% $13.0 $18.2 +40%
Corporate (Adj. EBIT)$(4.9) $(8.3) —
Total Adjusted EBIT$135.9 $151.7 +12%

Additional KPIs and Balance Sheet Highlights

KPIQ4 2024Prior Year
Effective Tax Rate (Q4)8.8% 23.0%
FY Free Cash Flow ($M)$391.3 $356.7
Cash & Equivalents ($M, 12/31)$822.9 $642.9
Total Debt ($M, 12/31)$4,136.8 $3,426.8
Pro forma Net Debt / EBITDA3.3x (end of year) —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025—$4.00–$4.20 New
Free Cash Flow ($M)FY 2025—~$450 New
Capex ($M)FY 2025—~$300 New
Interest & other debt expense ($M)FY 2025—~ $185 New
Effective Tax RateFY 2025—~24% New
Adjusted EPSQ1 2025—$0.74–$0.84 New
Adjusted EPSQ4 2024$0.78–$0.88 Actual $0.85 Achieved within range
Free Cash Flow ($M)FY 2024~$375 Actual $391.3 Beat
Capex ($M)FY 2024~ $255 Actual $262.8 Slightly above

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Dispensing growth & capacityDouble‑digit dispensing volumes; capacity tightness; ongoing mold/tooling adds Third straight quarter of double‑digit dispensing growth; record segment Adjusted EBIT; more capacity additions as needed Positive momentum; ongoing investment
Weener Packaging integrationClosed Oct 15; synergy plan ~18 months; expected ~10% accretion at full synergy Slightly ahead on profit vs model; more commercial opportunities than expected; €700M term loan financing; leverage 3.3x Integration progressing; early upside
Metal – Pet foodHigh single‑digit growth Q3; long-term contract extension with largest customer Double‑digit Q4 pet food growth; expect mid‑single‑digit pet growth in 2025 Structural growth driver
Metal – Fruit & Veg2024 pack cut by large customer; severe weather shortened pack; historic low pack Q4 volumes below LY; expect recovery of ~half of 2024’s ~$40M EBIT decline in 2025 Recovery expected in 2025
Promotional activityMixed: strong in aerosols/pet; weaker in isotonic beverages Targeted promos effective (pet, soup); isotonic still mixed; more targeted plans for 2025 Targeted promos continue
Cost-savings program$50M 2‑yr plan underway $20M delivered in 2024; ~$30M slated for 2025 Execution on track
Tax rateFavorable items lowered tax in Q3 Q4 tax 8.8% due to foreign tax restructuring; guide back to ~24% in 2025 One‑time Q4 benefit

Management Commentary

  • “Record fourth quarter adjusted EPS and Adjusted EBIT and double digit free cash flow growth…We expanded our market leading dispensing business with the acquisition of Weener Packaging” — Adam Greenlee, CEO .
  • “After completing the Weener transaction, we ended the year at 3.3x pro forma net debt to EBITDA, which is within our target leverage range” — CFO Kim Ulmer .
  • “We are providing an estimate of free cash flow of approximately $450 million [in 2025]…CapEx of approximately $300 million” — CFO .
  • “Inventory reduction [in flat caps] cost us approximately $10 million in adjusted EBIT relative to expectations, but contributed to exceeding free cash flow” — CFO .

Q&A Highlights

  • Weener integration: More commercial opportunities than underwritten; performance slightly above model; early investment approvals to support contractual growth .
  • Cost program: $20M realized in 2024; ~$30M expected in 2025 to complete $50M plan .
  • Tax: Q4’s 8.8% effective tax due to foreign restructuring; normalizing to ~24% in 2025 .
  • 2025 bridge: +$50M Adjusted EBIT from Weener; +$30M cost saves; remainder from organic growth; headwinds include higher interest, FX, and higher corporate costs ($40M) .
  • Metal/aluminum supply chain: Diversifying aluminum supply under long-term contracts to support growing pet volumes .

Estimates Context

  • We attempted to retrieve S&P Global consensus EPS and revenue for Q4 2024 but were unable to access the data due to a provider daily request limit at the time of query. As a result, “vs. consensus” comparisons are not shown. If you’d like, we can refresh and add the consensus once access is restored.

Key Takeaways for Investors

  • Adjusted results accelerated into Q4, led by Dispensing & Specialty Closures and supported by Weener; mix headwinds in Metal Containers masked underlying pet food strength .
  • 2025 guide implies mid‑teens Adjusted EBIT growth and double‑digit adjusted EPS/FCF growth, underpinned by Weener (+~$50M EBIT), $30M cost savings, and volume improvements across all segments .
  • One-time items (restructuring, acquisition costs, purchase accounting inventory step-up) weighed on GAAP Q4; adjusted metrics better reflect run-rate operations as inventory and footprint are optimized .
  • Pet food remains a secular growth engine; weather- and customer-driven fruit & veg trough in 2024 sets up partial EBIT recovery (~half of ~$40M) in 2025 .
  • Balance sheet remains within target leverage (~3.3x) even post-acquisition, supporting ongoing M&A optionality focused on high-margin dispensing/healthcare niches .
  • Near‑term trading: Stock sensitivity likely to 2025 execution on Weener synergy capture, Q1 delivery within $0.74–$0.84 range, and signs of fruit/veg pack normalization .
  • Medium term: Portfolio tilt to high-value dispensing and healthcare should continue to expand margins and FCF conversion through cycle .

Citations:

  • Q4 2024 8‑K press release and tables:
  • Q4 2024 earnings call transcript:
  • Q3 2024 press release and tables (prior quarter context):
  • Q2 2024 8‑K and transcript (trend context):