Solid Q3, despite supply chain challenges for Crown
Crown Holdings has announced its financial results for the third quarter 2021, where its global beverage can volumes grew by 3%
Net sales in the third quarter were $2,920 million compared to $2,489 million in the third quarter of 2020, reflecting the pass through of higher material costs and increased beverage can and transit packaging sales unit volumes.
Income from operations was $348 million in the third quarter compared to $315 million in the third quarter of 2020. Segment income was $379 million in the third quarter compared to $367 million in the prior year third quarter, primarily due to increased sales unit volumes.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated: “The Company’s results in the quarter were solid despite certain anticipated global inflationary and supply chain pressures in addition to extensive lockdown measures in Vietnam to stem the spread of COVID.
“Crown remains on track for another record year in earnings. Strong performances in our North American beverage and food businesses combined with the Transit Packaging business more than offset weakness in Asia Pacific due to notably softer volumes in Vietnam. In addition, while volume in the country remains strong, the Brazil business faced a very difficult comparison as that market experienced a “V-shaped” pandemic recovery during the third quarter of 2020.
As expected, the sale of its European Tinplate business to KPS Capital Partners was completed on 31 August. In addition to having implemented a quarterly dividend in March, the company has repurchased $759 million of its shares through 22 October, executing on our strategy of returning capital to shareholders.
“Beverage can demand growth continues to be very robust, and we expect this trend to continue in the coming years. Customers and consumers recognise and appreciate the inherent benefits of the aluminium can, including the fact that it is the most recycled beverage package in the world. Approximately 75% of new beverage products are now being introduced in cans, more than double the rate of just five years ago.
To support the significant increase of current and future requirements, Crown is implementing several beverage can capacity expansion projects globally including both new facilities and additional lines in existing plants. Importantly, this new capacity, underpinned by multi-year supply agreements, will meet the needs of a diverse and balanced customer portfolio encompassing a wide array of both existing and new alcoholic and non-alcoholic beverage segments.
“During the quarter, we commercialised production on the second line at our new facility in Bowling Green, KY, began operations on the third line of the Olympia, WA plant and are currently commencing operations at our new plant in Vung Tau, Vietnam. These projects, in addition to the others that the Company has announced and is currently implementing, set the stage for continuing profitability growth in 2022 and beyond.
“The Company continues to make tremendous strides on its sustainability journey. Crown again holds the top position for mitigating environmental, social and governmental (ESG) risk within the metal and glass packaging sector, following a new assessment by ESG ratings provider Sustainalytics.
The organisation also advanced Crown to the Negligible Risk category, a designation achieved by only 1% of the more than 12,000 global companies reviewed. In addition, its North American Beverage Packaging business recently ranked within the U.S. Environmental Protection Agency’s Top 25 Green Power Partners from the Fortune 500 list for demonstrating a commitment to advancing the green power market.
Also during the quarter, the Company joined The Climate Pledge, a commitment to be net-zero carbon across its operations by 2040, 10 years ahead of The Paris Agreement.”