Crown’s beverage can volumes grow 20% in Q2
Crown Holdings has announced its financial results for the second quarter ending 30 June 2021.
Net sales in the second quarter were $2,856 million compared to $2,137 million in the second quarter of 2020 reflecting increased beverage can and transit packaging sales unit volumes, the pass through of higher material costs and favorable currency translation of $125 million.
Income from operations was $385 million in the second quarter compared to $208 million in the second quarter of 2020. Segment income was $395 million in the second quarter compared to $250 million in the prior year second quarter primarily due to increased sales unit volumes and $18 million of favorable currency translation.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated: “The Company’s performance during the second quarter continued to be strong, and Crown remains on track for another record year in earnings. Adjusted earnings per share and segment income increased 61% and 58%, respectively, and were largely fueled by beverage can volume growth of 20%, as each global region recorded double-digit gains.
Demand recovery has been robust in regions such as Brazil, throughout Europe, Mexico, the Middle East and Southeast Asia that previously had been adversely impacted by the pandemic. Each of our businesses performed very well commercially and operationally despite certain challenges posed by supply chain disruptions.
“The strong results delivered by Transit Packaging were driven by continuing improvement in global manufacturing activity and the achievement of several cost reduction initiatives. So far this year, the Company has repurchased $379 million of common stock, executing on our capital allocation strategy of returning cash to shareholders.
“The company previously announced an agreement to sell its European Tinplate business to KPS Capital Partners. The business comprises 44 manufacturing facilities in Europe, the Middle East and Africa that produce food cans and ends, aerosol cans, metal closures and promotional packaging for various consumer brands. We expect that the transaction will close during the third quarter of 2021. Net proceeds from the transaction will be used for debt reduction, beverage can capital projects and continued share repurchases over time.
“To meet accelerating demand for beverage cans, the world’s most recycled and sustainable beverage packaging, the Company is implementing several capacity expansion projects globally, which include both the construction of new plants and the addition of production lines to existing facilities.
By the end of 2022, we expect to have 97 billion units of annualised global beverage can capacity, an increase of 28%, or 21 billion units, from the 2019 base. During the second quarter, the first line in our new Bowling Green, Kentucky facility began commercial shipments, with the second line expected to commence production during the third quarter.
“Also early in the fourth quarter, the Company will begin operation of a new one-line plant in Vung Tau, Vietnam as well as additional production lines in Olympia, Washington and Rio Verde, Brazil. Beverage cans now account for approximately 75% of the Company’s income from operations.”
Six Month Results
Net sales for the first six months of 2021 were $5,420 million compared to $4,443 million in the first six months of 2020, primarily due to increased sales unit volumes, the pass through of higher material costs and $177 million of favorable currency translation.
Income from operations was $712 million in the first half of 2021 compared to $426 million in the first half of 2020. Segment income in the first half of 2021 was $764 million versus $515 million in the prior year period, primarily due to increased sales unit volumes and $24 of foreign currency translation.
Interest expense was $137 million for the first six months of 2021 compared to $151 million in 2020 primarily due to lower outstanding debt balances.
Net income attributable to Crown Holdings in the first six months of 2021 was $339 million compared to $214 million in the first six months of 2020. Reported diluted earnings per share were $2.52 compared to $1.59 in 2020. Adjusted diluted earnings per share were $3.97 compared to $2.46 in 2020.