Crown Holdings, Inc. (CCK) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary reveals strong performance in European Beverage, positive North American trends, and promising guidance, particularly in EPS and cash flow. While some concerns exist, such as inflationary impacts and start-up costs, the overall outlook is optimistic. The Q&A section supports this with bullish views on Europe and sustainable cash flow. Despite some uncertainty in management's forecasts, the raised EPS guidance and positive market trends suggest a likely stock price increase in the short term.
Key Financial Performance
Earnings per share (EPS) Earnings in the quarter were $1.31 per share compared to $3.02 per share in the prior year quarter, which included a $2.32 per share gain from the sale of Eviosys. Adjusted earnings per share were $1.74, up 9% compared to $1.59 in the prior year quarter.
Net sales Net sales in the quarter were up 8% compared to the prior year quarter, reflecting a 3% increase in global beverage can volumes, $189 million from the pass-through of higher raw material costs and $58 million from favorable foreign exchange.
Segment income Segment income was $420 million in the quarter compared to $428 million in the prior year, reflecting strong performance in European Beverage, offset by lower volumes in Transit Packaging.
Adjusted EBITDA For the year, the company delivered record adjusted EBITDA of almost $2.1 billion compared to the prior year record of $1.9 billion in 2024. The improvement was driven by strong commercial and operational performance across the beverage and tinplate businesses.
Free cash flow The company generated record free cash flow of $1.146 billion in 2025 compared to the prior year record of $814 million in 2024. The $332 million improvement was largely driven by the 8% improvement in EBITDA and lower pension contributions.
Net leverage The company maintained its net leverage target of 2.5x, which was achieved at the end of September 2025, down from 2.7x at the end of 2024.
Shareholder returns The company returned $625 million to shareholders in 2025, consisting of $505 million in share repurchases and $120 million in dividends, compared to a total of $336 million in 2024.
Global beverage can unit volumes Fourth quarter global beverage can unit volumes were up 3%, helping to deliver level global beverage segment income against a very strong prior year fourth quarter.
Americas Beverage volumes Volumes in Americas Beverage were up a bit more than 1% in the quarter as North American gains of 2.5% were offset by a 3% decline in Brazil. For the full year, volumes in North America were flat, while Brazil was down 3%.
European Beverage volumes European Beverage volumes increased 10% in the fourth quarter, with shipments remaining strong across the Mediterranean and the Gulf states. For the full year, volumes were also up 10%, generating record segment income more than double what it was only a few years ago.
Asian operations sales unit volumes Sales unit volumes across Asian operations were down 3% in the fourth quarter, owing entirely to the border conflict between Cambodia and Thailand.
Transit Packaging income Income across Transit Packaging was down in line with lower industrial activity. Plastic and steel strap volumes held up well, while higher-margin equipment and tool offerings continue to be impacted by ongoing tariff adjustments.
North American tinplate businesses North American tinplate businesses benefited from 5% food can volume growth, offsetting softness in steel aerosols during the fourth quarter. For the year, income and other was up 80% against an easy prior year comp and supported by food can volume growth and improved operating performance across newly installed capacity.
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Operating Highlights
Global beverage can volumes: Increased by 3% in Q4 2025, contributing to an 8% rise in net sales.
North American tinplate businesses: Benefited from 5% food can volume growth, offsetting softness in steel aerosols.
European Beverage volumes: Increased by 10% in Q4 2025, with strong shipments across the Mediterranean and Gulf states.
Asian operations: Sales unit volumes down 3% in Q4 2025 due to the border conflict between Cambodia and Thailand.
Record adjusted EBITDA: Achieved $2.1 billion in 2025, up from $1.9 billion in 2024, driven by strong commercial and operational performance.
Free cash flow: Generated a record $1.146 billion in 2025, up from $814 million in 2024, due to improved EBITDA and lower pension contributions.
Capacity expansions and facility upgrades: Planned $550 million capital spending in 2026 for growth objectives in Brazil, Greece, and Spain.
Shareholder returns: Returned $625 million to shareholders in 2025 through share repurchases and dividends.
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Risk or Challenges
Earnings Decline: Earnings per share in the quarter dropped significantly from $3.02 to $1.31 compared to the prior year, primarily due to the absence of a $2.32 per share gain from the sale of Eviosys.
Transit Packaging Volumes: Lower volumes in Transit Packaging were reported, reflecting reduced industrial activity and ongoing tariff adjustments, which could impact cash flow and margins.
Inflation and Start-Up Costs: North American beverage volumes are expected to grow by 2%-3% in 2026, but this growth is anticipated to be offset by inflation and start-up costs.
Border Conflict in Asia: Sales unit volumes in Asia were down 3% in the fourth quarter due to the border conflict between Cambodia and Thailand, coupled with subdued consumer purchasing power and tariff concerns.
Brazilian Market Decline: Beverage volumes in Brazil declined by 3% for the full year, reflecting weaker market conditions in the region.
Tariff Impacts: Ongoing tariff adjustments are negatively affecting higher-margin equipment and tool offerings in the Transit Packaging segment, as well as consumer purchasing power in Asia.
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Guidance & Outlook
First Quarter 2026 Adjusted Earnings Per Share: Projected to be in the range of $1.70 to $1.80.
Full Year 2026 Adjusted Earnings Per Share: Projected to be in the range of $7.90 to $8.30.
2026 Full Year Free Cash Flow: Estimated to be approximately $900 million after $550 million of capital spending.
Capital Spending for 2026: $550 million allocated to support growth objectives, including capacity expansions and facility upgrades in Brazil, Greece, and Spain.
Net Leverage Target: Expected to maintain at approximately 2.5x.
North American Beverage Volume Growth: Expected to grow by 2% to 3% in 2026, offset by inflation and start-up costs.
European Beverage Volume Growth: Further growth in volumes and income expected in 2026, more than offsetting start-up costs in Greece and Spain.
Asian Operations Volume Growth: Expected volume growth in 2026 driven by commercial adjustments despite subdued consumer purchasing power and tariff concerns.
Transit Packaging Income Growth: Positioned for future income growth when industrial demand returns, supported by focused cost reductions and operational improvements.
North American Tinplate Business Growth: Further gains expected in 2026, driven by strong food can demand and increased can-making equipment orders.
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Shareholder Return Plan
Dividends in 2025: The company returned $120 million in dividends to shareholders in 2025, compared to $336 million in total shareholder returns in 2024.
Future Dividend Commitment: The company remains committed to paying a dividend that grows over time.
Share Repurchases in Q4 2025: The company repurchased $191 million worth of shares in the fourth quarter of 2025.
Total Share Repurchases in 2025: The company repurchased $505 million worth of shares in 2025.
Future Share Repurchase Plans: The company plans to continue disciplined share repurchases as part of its shareholder return strategy.
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Key Q&A
Q:What is the outlook for Americas EBIT for this year?
A:Americas Beverage income is expected to be slightly down due to ongoing inflationary impacts from labor tariffs and start-up costs in Brazil, offsetting volume gains in North America of 2% to 3%.
Q:What is the expected European volume growth for this year?
A:Management did not provide a specific forecast but suggested penciling in 4% to 5% growth, with a bullish outlook for Europe.
Q:What are the key drivers of volume growth in North America and Europe in 2026?
A:In Europe, beer growth in cans, conversion from glass to cans, and increased can filling capacity are key drivers. In North America, energy drinks, flavored alcohols, sparkling water, and carbonated soft drinks are performing well, with the World Cup expected to boost demand.
Q:Can free cash flow grow in line with volume growth in the future?
A:Management believes $1 billion is a reasonable and sustainable free cash flow number, with potential for growth if capital expenditures are maintained at $450 million to $500 million.
Q:What is the outlook for operating leverage in 2027 and beyond?
A:Management aims to generate more absolute margin and cash flow, focusing on profitability rather than just filling factories. They expect to be as successful over the next five years as in the past five years.
Q:What is the outlook for Brazil in 2026?
A:Management did not provide a specific forecast but suggested using 3% growth as a placeholder. They remain positive on Brazil despite current economic challenges.
Q:What is the North American beverage outlook for 2026?
A:The market is expected to grow 2% to 3%, with tight capacity utilization. Crown does not see a need for new capacity in North America over the next 1-2 years.
Q:What is the expected capital expenditure for 2026?
A:Capital expenditure is targeted at $550 million, primarily for projects in Europe and Latin America. Management does not foresee the need for new capacity in North America.
Q:What is the outlook for the affordability of cans given rising aluminum prices?
A:Management believes cans remain the cheapest and most effective way to deliver products, despite rising aluminum costs. They are not overly concerned about demand in 2026 and 2027.
Q:What is the outlook for the Asian market?
A:Management sees plenty of growth opportunities in Asia and plans to flex commercially to grow business. They aim to maintain a low-cost structure and high margins.
Q:What is the outlook for European growth?
A:Management is bullish on Europe, expecting mid-single-digit growth, with strong performance in Southern Europe and the Gulf states.
Q:What is the expected impact of start-up costs in Brazil, Greece, and Spain?
A:Start-up costs are expected to be second-half weighted in 2026, with most volume pull-through occurring in 2027.
Q:What is the outlook for food can demand in 2026?
A:Management expects to grow slightly above the market, driven by strong demand for pet food cans.
Q:What is the outlook for the Transit business?
A:Management aims to generate cash flow with minimal resources, focusing on profitability rather than growth. They see significant upside once tariff clarity improves.
Q:What is the capital allocation strategy?
A:Management plans to use a disciplined approach to share buybacks, balancing debt reduction and shareholder returns.
Q:Review of Unclear Management Responses
A:Management avoided providing specific forecasts for European volume growth and Brazil's 2026 outlook, instead suggesting placeholder figures. They also did not quantify the dollar impact of start-up costs in Brazil, Greece, and Spain, stating it is part of doing business in a growing environment.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Americas Beverage
Beverage gain
Beverage volume
Brazil Greece
Brazil volume
Cambodia Americas
Cambodia Thailand
Donahue President
EUR dollar
El
European Beverage
Eviosys share
Greece Spain
Mediterranean Gulf
Sales unit
Spain Sales
Spain leverage
Thailand Cambodia
Thailand consumer
activity steel
adjustment softness
adjustment volume
aerosol income
beverage tinplate
border conflict
business dividend
business focus
business food
business record
capacity gain
cash share
record improvement
share repurchase
sheet cash
tinplate business
volume income
volume record
CCK Transcript
Crown Holdings, Inc. (CCK) Q4 2025 Earnings Call Transcript
Positive2-5
The earnings call summary reveals strong performance in European Beverage, positive North American trends, and promising guidance, particularly in EPS and cash flow. While some concerns exist, such as inflationary impacts and start-up costs, the overall outlook is optimistic. The Q&A section supports this with bullish views on Europe and sustainable cash flow. Despite some uncertainty in management's forecasts, the raised EPS guidance and positive market trends suggest a likely stock price increase in the short term.
Crown Holdings, Inc. (CCK) Q3 2025 Earnings Call Transcript
Positive10-21
The earnings call reveals strong financial performance, with increased net sales and segment income. European operations show robust growth, while North American food and beverage segments have mixed results. The company raised its EPS guidance, indicating optimism. Although there are challenges in the Americas and Asia, the outlook for 2026 is positive, with growth expected in North American beverage volumes and strong free cash flow. The Q&A section highlights effective management strategies and capacity expansions in Europe. Despite some uncertainties, the overall sentiment is positive, likely leading to a stock price increase.
Crown Holdings, Inc. (CCK) Q2 2025 Earnings Conference Call Transcript
Unknown7-22
The earnings call summary indicates mixed signals: strong financial performance and optimistic guidance are positives, but concerns over tariffs, weak Asian markets, and flat EPS projections temper enthusiasm. The Q&A highlights sustainability in margins and capital return plans, but also notes uncertainties, especially in Europe and Asia. Given the lack of strong catalysts and the absence of market cap data, a neutral sentiment is appropriate, suggesting limited stock movement.
Earnings call transcript: Crown Holdings Q1 2025 beats forecasts, stock surges
Positive4-29
The earnings call reveals strong financial performance, including record adjusted EBITDA, increased EPS, and improved segment income. Shareholder returns are robust, with significant share repurchases. Guidance for 2025 is optimistic, with expectations of high free cash flow and reduced net leverage. Despite concerns about economic factors and tariffs, management's outlook remains positive, supported by improved operational performance and strong demand. The Q&A highlighted minimal negative impacts from tariffs and continued strong demand. Overall, the positive financial metrics and optimistic guidance suggest a likely positive stock price reaction.
CCK Report
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