Silgan Holdings Inc.

Good day and welcome to the Selga Holdings 4th Quarter 2023 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Alex Hutter, Vice President of Investor Relations. Please go ahead, sir.

Thank you and good morning. Joining me on the call today are Adam Greenlee, President and CEO, Bob Lewis, EVP, Corporate Development and Administration, and Kim Ulmer, SVP and CFO. Hello. Before we begin the call today, we'd like to make it clear that certain statements made on this call may be forward-looking statements. These forward-looking statements are based upon management's expectations and beliefs concerning future events impacting the company and, therefore, involve a number of uncertainties and risks, including but not limited to those described in the company's annual report on Form 10-10-K for 2022 and other filings with the Securities and Exchange Commission. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statements. In addition, commentary on today's call may contain references to certain non-GAAP financial metrics, including adjusted EBIT, adjusted EBITDA, free cash flow, and adjusted net income per diluted share. A reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release

and under non-gap financial information available in the investor relations section of our website at silganholdings.com with that let me turn it over to adam thank you alex and we'd like to welcome everyone to silgan's fourth quarter and full year 2023 earnings call our team delivered another year of strong performance in 2023 amid an unprecedented and rapidly changing market backdrop proving once again that our businesses and our company are resilient regardless of the broader economic circumstances. We delivered our second highest adjusted EPS and adjusted EBIT in the history of the company, and our robust free cash flow and strong balance sheet allowed us to return over $250 million to our shareholders through buybacks and dividends. Our disciplined approach to everything we do, including our customer partnerships, our contractual arrangements, and our capital deployment, has positioned the company to continue to perform for years to come. During the year, we embarked upon a multi-year $50 million cost improvement program, which is the largest in our company's history, to strengthen our already market-leading cost positions across each of our businesses. To achieve these savings, we made several difficult decisions beginning in late 2023 and have announced the consolidation of five of our manufacturing facilities to date. These actions will position the company to continue to meet the unique needs of our customers and compete and win in the markets we serve, with an even lower cost operating footprint. Volume trends in 2023 were mixed among the end markets we serve and the products we produce. Our strategic growth products for dispensing and pet food continue to see success and performance outpace broader market trends, and products that had experienced post-pandemic destocking in 2022 delivered strong recovery and growth in 2023. While consumer demand for our essential food and beverage products remains resilient, Midway through the year, it became apparent that our volumes would be adversely impacted across the segments by our customers' decisions to focus on destocking initiatives in the food, beverage, and pet food markets as a result of the impact of inflation throughout the supply chain. At the segment level, our dispensing and specialty closure segment delivered another year of strong organic growth and new business wins for our high-value dispensing products, particularly in the high-end fragrance markets. This growth drove margin improvement and a more favorable mix that partially offset the impact of lower volumes in food and beverage products from customer destocking. We successfully recovered our cost in the marketplace and mitigated the impact of a unique situation at one of our U.S. operating facilities that presented discrete labor challenges and drove incremental costs in the operating system during the year. In metal containers, we reported our sixth consecutive year of record-adjusted EBIT. Our long-term contractual arrangements and disciplined pass-through mechanisms helped our business to offset lower volumes and the impact of our own inventory management program in the prior year to grow adjusted earnings. In custom containers, our volumes fell short of the prior year due to continued customer destocking primarily in the second half of the year, and the delay of commercializing new business wins into 2024. As we now turn our focus to 2024, we believe the business is positioned to deliver volume growth, and with the benefit of our cost savings initiatives beginning to impact profitability, we expect to meet or exceed our prior record for adjusted EBITDA. We have seen early signs of recovery in certain end markets for the customer destocking activities that we experienced in 2023, and expect these favorable trends to continue to improve through the first half of 2024. We are expecting dispensing and specialty closures volumes to grow by a mid single digit rate, driven by another year of high single digit growth in our dispensing products and low single digit growth in our closures products, resulting in an improved mix for the segment. Metal containers volumes are expected to grow by a low single digit percentage, driven primarily by mid single digit growth in pet food. Custom container volumes are expected to be comparable to prior year levels with more pronounced stocking in the first quarter, offset by growth driven by new business wins in the subsequent quarters of the year. As we enter 2024, we continue to make progress and execute our strategic priorities. We have taken strong actions to effectively manage the factors within our control and believe the company is positioned for earnings and free cash flow growth in 24 and beyond. Our customer partnerships remain strong. We continue to compete and win in the markets we serve. Our strategic growth initiatives continue to shape the company's future, and our disciplined capital deployment model continues to create significant value for shareholders. With that, I'll turn it to Kim, who will take you through the financials for the quarter and our estimates for the first quarter and full year of 2024. Thank you, Adam.