Sonoco Products Company

Thank you, Rob, and good morning, everyone. Yesterday evening, we issued a news release and posted an investor presentation that reviews Sunoco's 2025 first quarter financial results. Both are posted on our investor relations section of our website at sunoco.com. A replay of today's conference call will be available on our website, and we'll post a transcript later this week. If you would turn to slide two, I would remind you that during today's call, we will discuss a number of forward-looking statements based on current expectations, estimates, and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties. Therefore, actual results may differ materially. Additionally, today's presentation includes the use of non-GAAP financial measures, which management believes provides useful information to investors about the company's financial condition and results of operations. Further information about the company's use of non-GAAP financial measures, including definitions as well as reconciliations to GAAP measures, is also available on the investor relations section of our website. Finally, references to certain financial metrics along with corresponding year-over-year comparable results made on this call are on a full company basis, except when specifically referred to for continuing operations or for discontinued operations. Joining me on this call today is Howard Coker, President and CEO, Roger Fuller, Chief Operating Officer, and Jerry Cheatham, Interim Chief Financial Officer. For today's call, we will have prepared remarks followed by a Q&A. If you'll now turn to slide four in our presentation, I'll now turn the call over to Howard.

Thank you, Roger, and good morning, everyone. Let me start. Our first quarter results demonstrated the strength of the new Sunoco as our global team achieved record top line and adjusted EBITDA performance. Slide five shows net sales were 31%. or grew 31%, and adjusted EBITDA was up 38%, while adjusted earnings were up 23% despite higher-than-expected interest expenses, taxes, and the negative impact from currency translation. I'll let Jerry go through the key drivers for the quarter, but overall, we are pleased with the improvement in both our consumer packaging and industrial packaging segments. The 127% growth in adjusted EBITDA on the consumer segment reflects a full quarter of the EVOSIS acquisition, along with strong volume mix from our legacy metal and rigid paper can businesses and a positive price-cost environment. The industrial segment generated a 6% improvement in adjusted EBITDA, stemming from a year-over-year improvement in price cost and productivity. Volume was down low single digits in the quarter, Flat results in South America was offset by results in the rest of our served markets. As shown on slide six, we completed the sale of the Thermoform and Flexibles business to Topan Holdings on time and as expected. We received approximately $1.8 billion in cash for the business, which generated approximately $1.56 billion in after-tax proceeds, which we used to significantly reduce and strengthen our balance sheet. We do extend our best wishes for continued success to our approximately 4,500 former TFP teammates and their new SOPAN team. On April 1, we completed the first phase of the integration of EBIOSIS by rebranding the business to NOCO Metal Packaging, EMEA. As shown on slide 7, we're changing our digital imagery as well as physical signage overall, while early, it's been a real nice start to the integration. We're going to treat our global metal packaging businesses as a single enterprise to better capture the best ideas, innovations, and synergies. Our integration efforts produce strong synergy savings across the global metal packaging enterprise in the first quarter, and we now believe we should be able to achieve approximately $40 million of savings in 2025 on our way towards our two-year synergy target of $100 million. Working together, our global can businesses are also identifying long-term savings and commercial opportunities that will benefit our customers for years to come. We're encouraged by the performance of our combined global metal packaging business, and we continue to find opportunities to work with our customers to provide even greater value to enhance innovation and a much stronger global supply chain. After one quarter together, our global metal packaging sales are tracking at our expectations and adjusted EBITDA margins was near 16%. Our U.S. metal packaging business had strong year-over-year results as the business achieved 10% organic volume mix improvement, a strong growth in aerosols and food cans coming from both existing customer demand and new customer wins. Adjusted EBITDA for our EMEA metal packaging business was up approximately 23% in the first quarter on productivity savings and positive year-over-year price-cost environment. Can volumes in Europe reflect the slower market conditions in the region, but we're encouraged by new customer wins, particularly in the pet food segment where we will start seeing benefits in the second half and continuing into future years as we build out additional production capabilities. Finally, our global rigid paper can business had a solid first quarter as low single-digit volume mixed growth in North America and South America was somewhat offset by store European and Southeast Asia volumes. With that brief introduction, I'm turning the call over to Jerry to review the numbers.

Thanks, Howard. I'm pleased to present the first quarter financial results, starting on page nine of the presentation. Please note that all results are on an adjusted basis and all growth metrics are on a year-over-year basis unless otherwise stated. The GAAP to non-GAAP EPS reconciliation is in the appendix of this presentation as well as in the press release. As Howard mentioned, on April 1st, 2025, we finalized the sale of our thermal formed and flexible packaging business, marking a significant milestone in advancing our fewer, bigger businesses strategy. strengthens our focus on core sustainable packaging platforms and positions us to reinvest in higher return opportunities that drive long-term earnings growth and margin expansion. Looking ahead, our leadership in two core markets will enable us to operate more efficiently and serve our customers with greater focus and agility. Adjusted EPS was $1.38. Earnings per share increased 23% year over year. mainly driven by continued strong productivity of $17 million and favorable price-cost performance across our core businesses. These gains were partially offset by unfavorable volume mix, other non-recurring items, and currency translation. First quarter net sales increased 31% to $1.7 billion, excluding discontinued operations of $321 million. This change was driven by favorable price and the impact of the full quarter of S&P EMEA's sales. Adjusted EBITDA of 338 million was up by an outstanding 38%, and adjusted EBITDA margin improved 170 basis points to 16.6%. This was driven by positive price costs, sustained favorable productivity, and the impact of acquisitions and partially offset by volume softness in the industrial segment and the impact of currency translation. Page 10 has our consumer segment results on continuing operations basis. Consumer sales were up 83% due to the S&P EMEA acquisition and favorable volume mix. Global rigid paper containers sales increased marginally compared to the prior year while our domestic packaging business, our domestic metal packaging business achieved double-digit growth, reflecting solid demand and continued commercial execution. Consumer adjusted EBITDA from continuing operations through a remarkable 127% year-over-year due to the impact of acquisitions, favorable price-cost dynamics, continued productivity gains, and positive volume mix. Page 11 has our industrial segment results. Industrial sales decreased 6% to $558 million. Results were impacted by lower volumes, the planned exit of our industrial operations in China, and unfavorable currency translation. These headwinds were partially offset by low single-digit improvements in selling prices driven by index-based price reset. Adjusted EBITDA margins expanded 200 basis points year-over-year in the first quarter, primarily driven by favorable price-cost dynamics and productivity gains. These benefits were partially offset by negative volume mix, as well as the impact of unfavorable currency translation and other items. Adjusted EBITDA increased by 6 million to 101 million, representing a 6% increase. Phase 12 has our results for the all other businesses. The all other sales were 85 million and adjusted EBITDA was 14 million. These sales and adjusted EBITDA results were affected by the divestiture of protective solutions combined with the ongoing softness in some key end markets. Turning to phase 13, we are reporting on our debt reduction progress. As of today, we have reduced our net leverage to just under four times net debt to adjusted EBITDA. We used approximately $1.5 billion in after-tax proceeds from the TFP sale to fully repay our $1.5 billion term loan. Our primary focus is to delever the business through strong organic cash flow and by using divestiture proceeds to reduce debt. We've established a clear and actionable roadmap to achieve this over the next 18 to 24 months. Our liquidity position remains strong, with approximately $915 million in available capacity, providing us with ample financial flexibility to support our operations, navigate market conditions, and invest in strategic initiatives as needed. Slide 14 provides a summary of the four-year guidance. We are reaffirming our four-year guidance. We expect to deliver adjusted EPS within the range of $6 and $6.20. This outlook reflects continued strength in our legacy businesses, the accretive impact of S&P EMEA acquisition, and the now completed divestiture of TFP, which is expected to be modestly diluted. We also anticipate some headwinds, including a higher effective tax rate and some softness on the industrial volume mix. This will be more than offset by the expected favorable price-cost outlook, actions to reduce fixed costs, strong volumes in the consumer segment, and the favorable impact of currency translations due to a weaker U.S. dollar. The previously announced price increases on our URB and converted products in North America were intended to defend our margins from continued inflation. The implementation is going well, and we anticipate seeing those benefits in our second half results. We expect another strong year of cash generation, with operating cash flow projected between 800 to 900 million and free cash flow between $450 to $550 million. And now I'll hand it over to Howard to walk us through our transformation journey.

Right. Thanks, Sherry. One of the things we don't talk enough about when we do our quarterly results is the unbelievable work and dedication our team is putting in the transformation of the new Sunoco into a simpler, stronger, and more sustainable company. In the past quarter, our team successfully completed a complex carve-out of the vestiture of the TFP business. In addition, our 6,500 new teammates with Sunoco Metal Packaging and EMEA are quickly working to integrate the business and drive expected synergy. As we show on slide 15, since we began this journey five years ago, we have reduced the number of divisions in our portfolio from 18 down to three. for consumer and industrial businesses while creating an enterprise that is positioned for future growth. As we show on slide 16, Sunoco was recently recognized by Newsweek as one of the most trustworthy and respected companies in the United States. In addition, just last week on Earth Day, USA Today named Sunoco one of America's climate leaders for 2025 in recognition of our efforts over the past several years to reduce carbon emissions from our operations. These honors belong to our employees who work every day to make life better for our customers, our communities, and shareholders. We've been asked a lot recently about tariffs and how Sunoco may perform during periods of economic stress. Let me make a couple of observations. First, Sunoco's consumer packaging business tends to perform well during periods of economic stress as consumers typically shift the center of the store packaged food. While industrial paper packaging business has experienced some slowing during past recessions, I would point out that our industrial business in 2025 is significantly stronger and the markets we serve have matured since the COVID recession of 2020. Now, does that mean that Snook was immune to an economic downturn or tariffs? Certainly not. If you turn to slide 17, you'll see we believe sunk a better position than ever to navigate the evolving geopolitical landscape. First, our manufacturing network is designed to serve local markets, reducing our exposure to cross-border disruptions and tariff-related risks. Second, while we are actively working with our customers to help manage the impact of higher input costs driven by tariffs, our business model allows for pricing adjustments when necessary. Most importantly, our transformed portfolio is significantly more resilient, with over two-thirds of our sales now coming from consumer food packaging, a segment that has historically demonstrated strong performance across economic cycles. Turning to slide 18, Sunoco's goal is to increase long-term profitability and return capital to shareholders. Over the past two years, Sunoco has generated a record $1.7 billion in operating cash flow and approximately $1 billion in free cash flow. We've used much of this cash to invest in ourselves for future growth and to drive productivity savings. While we are currently focusing on using free cash to lower leverage, our dividend remains an important part of our value creation story. Since 1925, which was roughly 100 consecutive years, Sunoco has paid quarterly dividends. That's why the investment service Sure Dividend is named Sunoco. It's number four top dividend champion for 2025. It's also why our board of directors recently increased our quarterly dividends for the 42nd consecutive year, and it provides a strong yield of 4.6%. In closing, I thought it would be worthwhile to review my priorities for the rest of the year, which are shown on slide 19. First and foremost is the mind of the store, to continue to drive improved performance of our core consumer industrial business. Embedded in that priority is to manage risk associated with the changing macroeconomic conditions. Next, we'll continue to manage the metal packaging EMEA integration and look to further optimize our global manufacturing network and organization. We'll continue to prepare for the planned divestitures who are attractive to non-core temperature-assured business. And finally, we must better communicate our value creation story to help improve our very much underappreciated stock. Slide 20 was developed to better illustrate the new Sunoco. our businesses, our served markets, and our geographic footprint. As Jerry mentioned, we reaffirmed our full-year 2025 guidance as we expect to grow net sales by approximately 20% to nearly $8 billion. We expect adjusted earnings to grow approximately 20% and adjusted EBITDA by approximately 30%. Despite seasonal working capital changes in the first quarter, Sunoco remains a strong cash flow generator, and we expect operating cash flow this year to be between $800 and $900 million. Even with economic uncertainty, we remain confident in our ability to deliver continued growth, margin expansion, and strong cash flow generation, enabling us to drive even greater long-term value to our shareholders. And with that, operator, we're ready to take questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 in your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Your first question comes from the line of George Staffels from Bank of America. Your line is open.

Hi, everyone. Good morning. Thanks for the details. First question I would have, if you could just give us a bit more color on the volume performance by region by key segment or product line. I know you touched on a lot of it, Howard, during your remarks, but if you could just give us sort of a quick review, you know, North America versus Europe versus the rest of the world, if you care, to talk to that, you know, rigid paper, nettle,

and industrial on an organic if you have that that'd be great and then a couple of other questions sure george um boy let's start with the consumer side uh you know felt really positive in total but uh to drill into that and you know we're talking um you know mid single digits uh over the consumer on a global basis but when you drill into that what we're seeing is rigid paper north america was actually slightly up you know and south america the same South America was actually really strong. You go over to Europe, and we were down. And similarly, which is for the first time in a long time, we saw that our Southeast Asia rigid paper volumes were down. Europe and Southeast Asia, and to some extent in North America, one discrete customer, very large customers, going through a transition at this point in time, and we've seen some pullbacks. We don't see that as being nothing more than a timing issue, particularly in Europe and South America, and benefit not South America, Southeast Asia, and benefit as things clear up there. On the industrial side, you know, really a lot of red, but low single digits. You know, like, you know, North America, I would suggest, again, the Low single digits. The real issue call out there would be Europe. Europe was softer than we expected. But if you take South America, which is basically flat, slightly down, and U.S., you know, we're pretty much holding our own on the industrial side as well. So that's kind of the big picture. Oh, and you said ask about metals. In North America, as I said, we said 10%, but let me unpack that a bit. Our aerosol business was up roughly 25% quarter over quarter. Our food can business was probably 10 plus percent. But what's embedded in there is our intercompany sales related to components. So loose ends, et cetera. Again, we have one discrete customer that has pulled back on their volumes that we expect to see return in the relatively near future. So if you're really talking about canned bodies, you're up probably in that 15% type range in total between aerosol and food. In Europe, well, we are very pleased with how things have started and improvement year over year in terms of profitability of the business, a little slower than our expectations, and I'd say right on mid-single digits down. to our expectations. Okay. And we see that as a bit of a timing issue as, you know, it's typically a softer first quarter, and as you're well aware, a ramp up through second and third.

Okay, Howard. And just you're pleased with Europe, but it's down mid-single digits in metal so far, correct? Say that again? Europe, you're pleased, but it's down mid-single digits in metal. correct?

Yes. Okay. Yeah. Possibility was EBITDA was up about 25% year over year.

Thanks for that rundown, Howard. Two quick ones and I'll turn it over. One, are you seeing any changes in purchasing behavior, any changes in supply chain, anything to call out on You know customer promotional activity given tariffs given the macro and that's a sort of. A big question you don't have to go through everything, but if there's anything in particular we as analysts should know about roles how we're modeling you going forward that's kind of what's behind that question and then. You talk about messaging and and trying to you know this is my wording that yours get the story out to a larger degree on snoko. It's neither here nor there, but what do you think needs to be better understood by the market relative to the discount you see in the stock versus where you think it should be? Thanks, and I'll turn it over.

Sure. What we're seeing changes, supply chain, customers, et cetera, you know, really not a lot. I think when we'll start feeling it is when we start seeing what I would suspect would be increased pull-throughs. uh from our consumer customers which historically uh our consumer businesses have performed very well um but not a lot uh what i would suggest that unique to sunoco uh is that we do have our largest uh paper can customer in the midst of an acquisition and so to your point about marketing etc we've seen We've seen decreases there as they anticipate the turnover of that business. So a little stagnation in the last quarter or so with that customer, and we have very, very strong opinions about where the new owner can take this business. So we'll see how that manifests itself post-close mid-year. And the message is really more about as we're ending this whole transition, As you guys know, as you know, the numbers, it's tough to follow what's all going on and to be able to start reaching a point of, I wouldn't ever say finish state, but certainly on the trajectory we've been over literally the last five years, start being able to connect the significantly improved performance the company has seen over the last couple of years and the inverse relationship to our stock and start telling the story on where we are, where we're landing, where we're going. And I think even starting today, it should be a little more clear, a lot more clear than would have been in an earlier period. So that is just it, just getting the message out about who we are, where we're going, what the opportunities look like. And it's a pretty exciting go-forward story for the companies.

All right. Howard, I appreciate it. Thanks. I'll turn it over. Good luck in the quarter. Thanks.

Your next question comes from a line of Michael Roxland from Truist Securities. Your line is open.

Thank you, Howard, Jerry, Roger, and Roger for taking my questions, and congrats on all the progress. Can you help us? You mentioned managing your global network. Can you give us a sense of where there are opportunities, and some of the things that you're considering doing around your global network.

Yeah, Michael, this is Roger. I think that's specifically talking about our metal end, our metal can business, our metal end supply, and Howard's already mentioned how that's integrated into our paper can business. You know, with significant added operations in Europe with a lot of the strategic template supply being provided out of Europe, you know, we're looking across the platform, our European platform, our Asia and U.S., and deciding where is the best location primarily to produce easy open ends, non-easy open ends, components for all of our businesses, all of our consumer businesses now, our canned businesses, and making those decisions over the next couple of years, you know, strategically where can we provide the lowest cost solution to our operations and to our customers, and working through that as we speak. So that's really, in my opinion, outside of the tremendous synergy opportunity, which we can talk about later, that we have just combining our two metal businesses. So again, it's looking at this global platform we have now and making those longer-term decisions on where is the low-cost opportunities, how do we use that to gain market share, to grow our business, which is the ultimate solution, objective of looking at that global platform.

Yeah, Michael, let me add one other. If you look at our global rigid paper container business, this is how we operate. We operate under one single umbrella globally. And the benefit, and we started that probably 10, 12, 15 years in March, and be able to take the best of the best of each market in terms of technology, R&D, innovation, and have that centralized where there's not cross-border challenges or competition, but being able to create the best of global in terms of those categories. It's worked well for us on the paper cam side, and you'll see us over time with that same type structure. And so, again, taking the best of one region and the best of the other region and creating something that no one else has been able to do. Gotcha. That's very helpful, guys.

On ebiosis, this transition, I think I heard you say that EBITDA was up 23% year over year, 1Q. I think you reiterated the guide for EBITDA to be up 10%. Is that just conservatism, or is that some concerns over your tariff and economic uncertainty? Why reiterate the more modest guide relative to the strong 1Q performance?

I just think it's conservative and comps, so no doubt about it. Last year was a weaker quarter, stronger quarter this year. Being conservative as we go forward.

Nothing operationally stands out, though. It's just work. Nah, it's just flow. Yeah. Gotcha. And last question before turning it over, just in terms of the AWS integration, last quarter you mentioned having a very strong leadership team there. What has the company done to ensure that the team is retained and there's not turnover in the near term that could cause disruption and negatively impact results?

Yeah, Michael, it's Roger. Let me just talk a little bit about the integration and maybe this gets out in front of a couple of questions, but I know it's on people's mind, but you're right. We're pleased with the integration, very impressed with the capabilities and talents of the new team and seeing nice progress on the integration across the board. I think number one, it's spending time with the leadership team and the critical people in the business across the board and from our customers, from the market standpoint. and our people are very pleased to see a strategic buyer coming and stepping in and taking a leadership position in the bootcamp market in Europe. So in general, the team is very pleased to be part of Sunoco and they understand the vision. They understand what we're trying to do with the global business and they want to deliver the results that we're looking at. So typically, you know, As you go through these, I think you know there were retention type discussions that we have around timing, around packages, around the business. That's all going extremely well. The leadership team has tremendous experience in the metal can market. They want to continue with the business. So it's really just that constant communication and really the culture of Sunoco is making people feel involved with the business, making people feel part of something bigger. And again, I can tell you across the board, we feel comfortable that the critical people that we need in the business will continue to stay with us. Let me go ahead and talk about synergies because I know it will come up from a cost synergy standpoint. Howard's already mentioned we're upping our run rate this year to the $40 million level by the end of the year, becoming more and more confident that we can at least hit that $100 million level by the end of 2026, which has been our commitment. You know, direct synergies, materials, direct materials, we're looking at it from a global template business standpoint. Indirect, logistics, business S&A, we're looking at it from a European footprint standpoint. Keep in mind that over 40% of Sunoco is now based in Europe. So we're looking at synergies across our paper can business, our industrial business, and our metal business in Europe. And then finally, EBIOSIS, as you know, was a standalone business. So from a corporate S&A standpoint, Good synergies there as well with the team that we have here primarily in Hartsville. But we're most excited about the market and the customer synergies. As I said, tremendous response from our local customers with a strategic stepping into a leadership position. Global customers that we may serve in both regions or one of the other regions are very interested in our global capabilities now. That gets back to your earlier questions on the global capability and the platform that we're looking at. self-manufacture opportunities howard talked about innovation so all in all feel very good about it they're very good about the team uh from a turnover standpoint uh at this point we're not concerned the team's very involved very engaged and we feel good about the connection that they have with our leadership team here and sunoco in general so all in all going well and we're we're depending on that leadership team to continue to help us work work our way and lead the uh lead the business, and deliver on the commitments we've made from a Synergy standpoint.

That's great, Paul. I really appreciate it, and good luck in 2Q.

Your next question comes from the line of Mark Weintraub from Seaport Research Partners. Your line is open.

Thanks so much. So I appreciate that you've upped the target on Synergies by 10 million. At the same time, you've talked about the volume increase environment being weaker. I think you had originally come into the year thinking like a 2% to 3% type of growth in consumer packaging was viable. Correct me if I'm wrong there, but what would your updated view be? And then presumably that delta would be more than a 10 million negative delta. So I'm curious, what are some of the other explicit drivers you think are going to help offset that

uh in keeping the the guidance uh where it had been yeah mark we're uh when you say consumer we're actually all looking at an increase uh in terms of volumes as we head into the the upcoming quarters so uh really you just cannot look at a first quarter particularly in this business, which does have high seasonality. So as we're looking out, we're seeing that much stronger second quarter, third quarter rates really across both the paper can as well as the global metal can businesses. So we're not really factoring, saying, hey, there was a 7% down in the first quarter. That translates for the year. Our expectations are that'll work itself out through the course of the year.

Sorry, just to clarify, so you're still kind of embedding a 2% to 3% volume increase for the year, which I think is what you had been talking about three months ago?

Yes.

Okay, fair enough. That's correct. And then second, any update on ThermoSafe and where your thought process there might be?

Yeah, well, first off, very pleased with the continued solid performance from the team. You know, really not a formal update. I wouldn't say that we're preparing ourselves, and we will make a decision on when to go on, frankly, what it's going to turn out to be, what is the macro situation like at that time. But officially, right now, I'd say we're still looking at – by the end of the year coming to a resolution on that. But, again, happy with the trajectory of the business, and we'll see how that unfolds through the course of the year. Thanks very much.

Again, if you'd like to ask a question, press star 1 on your telephone keypad. Your next question comes from a line of Matt Roberts from Raymond James. Your line is open.

Hey, good morning, everybody. Thanks for the time. Quick question. On leverage post the TFP pay down on April 3rd, where does your net adjusted debt stand? You said it was less than four times, but what would that have been at the end of one Q and recognizing there is some seasonality with a larger metal business? Where do you expect that leverage to be by year end 25?

Yeah, this is Jerry. As we stated, we expect it to be by the end of this year under four times. And we're still on track to reach our target of 3 to 3.3 times by the end of 2026. Okay.

Thank you for the clarification. So the less important is 0 and 25. Got it. And secondly, on the price cost expectations, could you say where your OCC cost expectation now is versus where you had it in January and what kind of market conditions inform that? And we're hearing some constructive commentary around the URB list price increase, although it's not yet reflected in the index. Does the guide assume any incremental benefit there? And if so, how much? Usually it's not reflected on must pass through, but just curious your thoughts or any color you have there. Thank you again.

Yeah. What we assumed in our original guide was an average OCC of around of $100. Obviously, it was around $80, $85 in the first quarter. We expect it to be that similar in the second. And we're expecting it to average somewhere between $90 and $95 in the second half of the year.

Thanks, Jerry. And on the URB price?

Yeah, on the URB price, then you're right. Pretty unique against all paper grades. We're running in probably 92 to 93% utilization rates right now. We're seeing strong yield on. Against the $70 increase in the market, so would be extremely disappointed if if the appropriate indices did not pick that up at their next go round.

Howard Jerry, thank you again.

your next question comes from a line of gabe hodge from wells fargo your line is open good morning team um i had a question maybe point of clarification i apologize it's a busy morning um did you talk about consumer volumes in aggregate on an organic basis um question number one and question number two howard you threw out a bunch of numbers for the metal food business. And so maybe if we could break it down, North America versus Europe and organic. You talked about some pretty big numbers, I think double digit growth in the North American metal business. It's quite a bit better than what we saw for the industry data. Maybe suggesting you guys are winning some business there. Can you talk about that? And would it be your view

um that customers are trying to buy ahead of any potential price increases um in material costs and again i apologize for that if you covered yep no problem gabe uh you know we're looking at uh consumer um from an organic perspective uh about four percent up uh for the first quarter in total uh that's excluding acquisition um On the metal side of the business in terms of breaking down further North America, that kind of details less so on Europe, but North America we saw about 10% improvement and food and about a 25 and keep in mind about a third of our businesses aerosol aerosol recovered nicely up about 25%. And then I would also noted was that we. When you look at units and we've got some work to do in terms of how we have a report this stuff that we've got metal ends that go to a select customer legacy to not go customer. There's been some drawdowns that we expect that will recover, so that's what brought the total. The math doesn't work at 10% of your food cans up. 25% of your aerosol, but you're 10% up in total. It's because of. low low value metal ends are calculated in that number we'll work on on that going forward um europe uh really it's one discreet market um a seasonal market that hasn't kicked in the six seven percent is the fish market and it normally doesn't really start taking off till now or through up up until early june or so so we're expecting to see that turn here in the very near future. Other than that, most of the other markets were exactly where we expected them to be, unless, Roger, you have other commentary to it. No, that's right. So in terms of pre-buy, no, not seeing any activity there. You know, same, I mean, it could be an isolated case, but no, as we talk to our customers going in, as we're rolling into the second quarter, it's, you know, very encouraging in terms of what the volume profile looks like, particularly here in North America. But it's not pulled forward.

Okay. So to be clear, I guess, adjusting for the end sales, which seems like it should balance out over the course of the year, you would expect pretty darn strong volumes in aerosol and food cans also to be up for the full year in North America.

Correct.

Okay. And then a point of clarification, I think, Jerry, you mentioned embedded in the guidance, you talked about getting early realization on the URB price increase, but you'd expect that to flow through in the back half of the year. A, is that in fact what you said? And B, quantification of what that benefit would look like in the second half?

Yeah, let me answer that kind of in a two-part way. You know, the increase is going well in the marketplace, you know, but, you know, you've got to realize that about 80% of the business is really tied to contracts, and some of those contracts reset based off the timing of when the tan bending chip moved, which is what the majority of those contractual customers are on. So that's why we expect the benefit to mostly occur in the second half of the year, just depending on the timing of when the tan bending chip index moves. It has not reflected the open market increase as we speak today, but we do expect that to happen, you know, in the coming month or two. In terms of the impact, you know, as we previously stated, you know, tough to say, you know, how much the TAM Vending Chip Index will move, but what I would say is that with each $10 move in that index typically represents about, you know, an incremental $6 billion a year on an annualized basis of revenue.

Perfect. Super helpful. Thank you.

And that concludes our question and answer session. I will now turn the call back over to Roger Schrum for closing remarks.

Certainly appreciate everybody participating in today's call. I know you've had a very busy day. If you've got follow-up questions, please don't hesitate to give me a call at your convenience. You can disconnect now.

This concludes today's conference call. Thank you for your participation.

You may now disconnect.