Crown beverage can volumes grow by 9%
Crown Holdings, Inc. announced its financial results for the fourth quarter ended December 31, 2021.
The company reported fourth quarter loss of $7.95 per share, including the impact of full UK pension settlement, and adjusted earnings of $1.66 per share in the fourth quarter.
Global beverage can volumes grew 9% in the fourth quarter and for the full year, while it returned over $1 billion to shareholders in 2021.
Crown fully settled its UK pension plan, significantly reducing future risk.
Their 2022 adjusted earnings guidance expected to be in a range of $8.00 to $8.20 per share
Fourth Quarter Results
Net sales in the fourth quarter were $3,054 million compared to $2,460 million in the fourth 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 $303 million in the fourth quarter compared to $307 million in the fourth quarter of 2020.
Segment income was $357 million in the quarter compared to $358 million in the prior year fourth quarter as unfavourable currency translation and higher costs offset sales unit volume increases.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, said: “The Company had a solid fourth quarter performance to end an exceptional year in 2021. Global beverage can shipments for the year of more than 79 billion units grew 9% over 2020, with robust expansion in all regions, led by North America, Europe and Mexico.
“Full year adjusted earnings per share advanced 29%, more than offsetting the dilutive effects of the sale of the European Tinplate business.
“Segment income rose 21% for the year, with each of the Company’s businesses improving results compared to the prior year despite the effects of the ongoing pandemic and significant inflation and supply chain disruptions.
“The Crown team performed well during 2021, successfully navigating numerous challenges and meeting the needs of our customers.
“In addition to delivering strong financial results, the team commercialised significant new capacity positioning the Company for continued long-term growth.
“Unfortunately, in early December our newest beverage can plant in Bowling Green, Kentucky sustained significant tornado damage.
“Fortunately, all our associates and their families are safe and we recognise their efforts, along with those in the community at large, in the rebuilding and restoration efforts following the devastating effects of the storm.
“We expect the plant will resume operations late in the first quarter of this year.
“During 2021 the Company commercialised significant beverage can capacity at new plants in Bowling Green, Kentucky, and Vung Tau, Vietnam, as well as adding new production lines to existing facilities in Olympia, Washington, Rio Verde, Brazil and Hanoi, Vietnam.
“Additionally, and as previously announced, the Company completed the sale of its European Tinplate businesses and fully settled its UK pension obligations, resulting in pension obligations being reduced by approximately $3 billion and eliminating future risk.
“As we look forward in 2022, the Company expects to have another outstanding year, with EBITDA estimated to grow more than 12% to approximately $2 billion. Beverage can demand remains in excess of supply and in 2022 the Company expects to commercialise new production capacity at new plants in Martinsville, Virginia, and Uberaba, Brazil, as well as with can line additions to plants in Phnom Penh, Cambodia and Monterrey, Mexico.
“Segment income in our global beverage can businesses is expected to improve as a result of 9% anticipated volume increase, contractual pass through of inflation and more efficient operating performance.
“Demand remains strong in all regions and, while results in our European beverage business are expected to decline year over year, we are taking required actions to fully recover commodity and other cost increases.
“Following a strong performance in 2021, segment income in Transit Packaging is expected to improve as a result of continued volume growth, efficiency gains and cost improvements. Significant segment income growth is expected in the non-reportable segment as a result of increased food can volumes, increased beverage can equipment deliveries and contractual recovery of inflation.
“During 2021, the Company completed the construction of a two-piece food can plant in Dubuque, Iowa and the addition of a two-piece food can line to its Hanover, Pennsylvania plant.
“Additionally, the Company will add a third two-piece food can production line to its Owatonna, Minnesota plant.
“In addition to earnings growth, we expect to use the significant free cash flow generated by these businesses to again support beverage can capacity expansion and the return of more than $1 billion to shareholders in 2022.”
In connection with the sale of its European Tinplate business, the company entered into a previously announced transaction to irrevocably transfer its UK pension plan obligations to an insurer in November 2021, resulting in a pension settlement charge of $1.5 billion and elimination of the cash flow and earnings risk associated with the plan.
Interest expense was $50 million in the fourth quarter of 2021 compared to $70 million in 2020 primarily due to lower outstanding debt balances.
Net loss attributable to Crown Holdings in the fourth quarter was $1,001 million compared to net income of $151 million in the fourth quarter of 2020. Reported loss per share was $7.95 in the fourth quarter of 2021 compared to income of $1.12 in 2020. Adjusted diluted earnings per share increased to $1.66 over the $1.50 in 2020.
A reconciliation from net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share is provided below.
Full Year Results
Net sales for the full year of 2021 increased to $11,394 million from $9,392 million in the full year of 2020, primarily due to the pass through of higher material costs and increased sales unit volumes.
Income from operations was $1,363 million in 2021 compared to $1,048 million in 2020. Segment income in 2021 was $1,500 million versus $1,240 million in the prior year primarily due to increased sales unit volumes.
Interest expense was $253 million in 2021 compared to $290 million in 2020 primarily due to lower outstanding debt balances.
Net loss attributable to Crown Holdings in 2021 was $560 million compared to net income of $579 million in 2020. Reported loss per share was $4.30 compared to income of $4.30 in 2020. Adjusted diluted earnings per share were $7.66 compared to $5.92 in 2020.