Crown Holdings has announced its financial results for Q3 ending 30 September 2023.

Net sales in the third quarter were $3,069 million compared to $3,259 million in the third quarter of 2022 reflecting higher beverage can volumes in North America and favorable foreign currency translation of $60 million, offset by lower volumes across most other businesses and the pass through of $187 million in lower material costs.

Income from operations was $374 million in the third quarter compared to $297 million in the third quarter of 2022. Segment income in the third quarter of 2023 was $430 million compared to $336 million in the prior year third quarter reflecting the benefits from higher beverage can volumes in North America, the contractual recovery of prior years’ inflationary cost increases in Europe and the successful implementation of cost reduction programs in Transit Packaging.

Commenting on the quarter, Timothy J. Donahue, chairman, president and chief executive officer, said: “Operating results for the third quarter were solid, and the Company performed in line with expectations despite the cumulative effects of persistent inflation and challenging macroeconomic conditions in certain markets, such as Asia, which continue to adversely impact volumes. 

“Beverage can volumes in North America expanded by 13% and the can continues to be the preferred choice by both customers and consumers alike for new beverage product introductions.

“The benefits of the overhead cost reduction program were clearly visible in strong Transit Packaging results for the quarter, more than offsetting generally sluggish volumes resulting from lackluster production in several industrial markets. 

“Actions taken in 2022 to negotiate more comprehensive raw material and other inflationary pass-through provisions resulted in improved income performance in the European Beverage division.  Beverage can volumes in Asia Pacific and aerosol can shipments in North America continued to be weak during the quarter.

“Looking forward, we remain focused on customer satisfaction and executing that which is under our control.  We have adjusted production schedules to reduce inventory levels across aerosols, Asia and Transit in response to current demand.  Net leverage at 3.5 times is one-half turn lower than only three months ago and we remain on pace to generate approximately $500 million in free cash flow.  We anticipate that capital expenditures will be significantly reduced to approximately $500 million in each 2024 and 2025, and the Company expects to use the increased cash flow to pay down debt and return capital to shareholders.”

Interest expense was $111 million in the third quarter of 2023 compared to $76 million in the third quarter of 2022 reflecting higher interest rates.

Net income attributable to Crown Holdings in the third quarter was $159 million compared to $127 million in the third quarter of 2022.  Reported diluted earnings per share were $1.33 in the third quarter of 2023 compared to $1.06 in 2022 and adjusted diluted earnings per share were $1.73 compared to $1.46 in 2022.

Nine Month Results

Net sales for the first nine months of 2023 were $9,152 million compared to $9,931 million in the first nine months of 2022, primarily due to 6% higher beverage can volumes in North America and favorable foreign currency translation of $35 million, offset by the pass through of $575 million in lower material costs and lower overall net volumes.

Income from operations was $1,010 million in the first nine months of 2023 compared to $1,107 million in the first nine months of 2022, which included a gain of $113 million for the sale of the Transit Packaging segment’s Kiwiplan business.  Segment income in the first nine months of 2023 was $1,164 million versus $1,151 million in the prior year period, reflecting benefits from higher beverage can volumes in Americas Beverage, the contractual recovery of prior year’s inflationary cost increases in European Beverage and cost reduction initiatives in Transit Packaging, partially offset by $60 million of year over year inventory impact of steel repricing in the Other segment and lower volumes in most other businesses, notably in aerosols in North America and beverage cans in Asia.

Interest expense was $323 million for the first nine months of 2023 compared to $194 million in 2022 primarily due to higher interest rates.

Net income attributable to Crown Holdings in the first nine months of 2023 was $418 million compared to $638 million in the first nine months of 2022.  Reported diluted earnings per share were $3.49 compared to $5.23 in 2022 and adjusted diluted earnings per share were $4.61 compared to $5.58 in 2022.

Donahue added: “The Company completed the acquisition of Helvetia Packaging in early October and we welcome our new associates to the Crown family.”

Outlook

Fourth quarter adjusted diluted earnings per share are expected to be in the range of $1.40 to $1.50 and full year 2023 adjusted diluted earnings per share in the range of $6.00 to $6.10 reflecting full-year improved operating results in Americas and European Beverage and Transit Packaging, offset by continued weakness in Asia and the North America aerosols business which are traditionally more economically sensitive.  Adjusted free cash flow is expected to be approximately $500 million after approximately $900 million of capital expenditures.