Silgan Holdings Inc.

standby, we're about to begin. Good day and welcome to the Silden Holdings Second Quarter 2024 Earnings Call. Today's conference is being recorded. At this time, I'd like to send the conference over to Mr. Alex Hutter. Please go ahead.

Thank you and good morning. Joining me on the call today are Adam Greenlee, President and CEO, Bob Lewis, EVP of Corporate Development and Administration, and Kim Ulmer, SVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made on this conference call may be forward-looking statements. These forward-looking statements are made 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-K for 2023 and other filings for 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, free cash flow, and adjusted net income per diluted share. Reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release under non-GAAP financial information 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 second quarter 2024 earnings call. The second quarter continued to display the strength of our portfolio with another quarter of strong financial performance in our businesses and significant progress towards our long-term strategic objectives. We delivered second quarter adjusted EPS above the midpoint of our estimated range with improving volume trends across all of our segments and strong operational and cost performance driving our results as the Silgan team remains focused on executing our plans for 2024 and beyond. After several quarters of destocking trends for our food and beverage products, we are particularly encouraged that our customers' order patterns appear to be returning to more normal levels and, as expected, have led to the positive inflection in our volume trends in the second quarter. As demand for our product continues to recouple with what had been resilient in-market demand, we expect this momentum to carry into the second half of the year. Additionally, we are pleased to have recently announced an agreement to acquire VaynerPackaging, a best-in-class differentiated dispensing business with very attractive margins and strong organic growth that has all the hallmarks of our highly successful dispensing acquisitions in the past, including Westrock's dispensing business, Albea Dispensing, Gateway, and UNICEF. Our capital deployment model is a key component of the Silgan value creation story, and we're encouraged that after several years of M&A market challenges and macro uncertainty, during which time we were able to create value with outstanding performance and by returning capital to our shareholders, it now appears that value, earnings, and return accretive transactions are becoming more actionable. We continue to believe that Silgan is advantageously positioned to win in this M&A market backdrop and create value for our shareholders as a result of our ability to act with speed and certainty, our long track record of achieving value enhancing synergies, our access to capital, and our ability to rapidly deleverage as a result of our strong free cash flow. We're excited that Vayner represents such a clear cultural fit with our company. and expect the combination to help drive incremental organic growth well into the future. Turning now to the second quarter results for our segments, our dispensing and specialty closure segment delivered another quarter of strong results as demand for our global dispensing products remains at a high level, with double-digit volume growth driven by continued success in the marketplace. Our market-leading innovation, manufacturing, and service capabilities continue to drive demand for our products that outpaces market growth and in some cases currently exceed their own ability to supply certain portions of the market. Consumer demand for our food and beverage products improved sequentially and year over trends also improved from the first quarter as our customers stocking activities appear to have come to an end and promotional activity has been more pervasive in the market for many of our beverage customers products during the seasonal peak demand of the summer months. We are on track for stronger year over year trends in the food and beverage closures in the second half of the year as demand for our products more accurately resembles in market demand. In metal containers, our year-over-year volumes show growth driven by pet food and soup, and we anticipate continued growth in these and other products for the remainder of 2024. We continue to make progress on our cost reduction initiatives during the quarter, but as expected, the impact of lower production and less inventory build in the second quarter due to the previously discussed reduction in a large pack customer's plans for 2024 led to underabsorbed fixed costs in the quarter that impacted our financial results. Our custom container segment delivered strong results in the second quarter with 7% volume growth as a result of improving market demand, the successful commercialization of new business in the first quarter, and the early commercialization of the second new business award in the second quarter. Turning now to our outlook for the full year of 2024, we continue to believe the business is positioned to deliver volume and profit growth and are pleased to confirm our estimates for the year, which includes EPS growth of 7% at the midpoint of our guidance range. We continue to expect dispensing and specialty closures volumes to grow by a mid single digit rate with high single digit growth in our dispensing products and low single digit growth in our closure products, driving better profitability for the segment through an improved mix. In metal containers, we continue to expect volume growth with mid single digit growth in pet food, which represents approximately half of our total volume offset by lower fruit and vegetable volumes as a result of the previously discussed decision by a PAC customer to reduce their volumes in 2024 to reduce their working capital. In addition to the unfavorable fixed cost absorption in our system we experienced in the second quarter, the impact of growth in pet food and fewer than normal vegetable can sales will drive a less favorable mix in the third quarter. Custom containers volumes are expected to grow by low to mid single digit percentage as destocking trends appear to have concluded. Market demand remains solid and new commercial awards continue to provide incremental volume and profit contribution through the year. We are encouraged we are on track to deliver another year of strong financial results for the company, with success in our strategic growth initiatives driving tangible improvements in our results. Additionally, we're pleased that our capital deployment model continues to yield opportunities to grow our company at attractive returns and drive organic growth and margin improvement. With that, Kim will take you through the financials for the quarter and our estimates for the third quarter and full year of 2024. Thank you, Adam.