Crown Holdings(CCK) - 2025 Q2 - Quarterly Results

Performance Overview & Outlook Crown Holdings reported strong Q2 2025 results, with segment income up 9% and adjusted diluted EPS rising to $2.15, leading to increased full-year 2025 adjusted EPS guidance of $7.10-$7.50 and projected $900 million in free cash flow Financial Highlights Crown Holdings reported strong second-quarter 2025 results with a 9% increase in segment income and a 19% rise in adjusted diluted EPS to $2.15. The company raised its full-year 2025 guidance for adjusted EPS to a range of $7.10 to $7.50 and expects approximately $900 million in adjusted free cash flow, while reaffirming its long-term net leverage target of 2.5x Financial Highlights - Q2 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted EPS | $1.56 | $1.45 | | Adjusted Diluted EPS | $2.15 | $1.81 | | Income from Operations | $391 million | $379 million | | Segment Income | $476 million | $437 million | - The company has raised its full-year 2025 guidance and provided a Q3 outlook - Q3 2025 Adjusted Diluted EPS: Expected to be between $1.95 and $2.05 - Full Year 2025 Adjusted Diluted EPS: Guidance range increased to $7.10 to $7.50 - Full Year 2025 Adjusted Free Cash Flow: Expected to be approximately $900 million - Long-Term Net Leverage Ratio Target: Reaffirmed at 2.5x[8][10][11] Second Quarter 2025 Performance In Q2 2025, segment income grew 9% year-over-year, driven by strong performance in Americas Beverage, European Beverage, and North American Tinplate. Net sales increased to $3,149 million from $3,040 million, reflecting higher shipments and the pass-through of material costs, despite lower shipments in Asia Pacific and Transit Packaging - Segment income growth of 9% was primarily led by the Americas Beverage, European Beverage, and North American Tinplate businesses, supported by shipment growth in Europe and the Middle East, favorable product mix, and strong operational performance[2] Key Financial Metrics - Q2 | Financial Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $3,149 million | $3,040 million | | Income from Operations | $391 million | $379 million | | Segment Income | $476 million | $437 million | | Net Income | $181 million | $174 million | | Diluted EPS | $1.56 | $1.45 | | Adjusted Diluted EPS | $2.15 | $1.81 | - Net sales growth was driven by increased beverage and food can shipments in North America and European Beverage, the pass-through of $120 million in higher material costs, and a $23 million favorable foreign currency translation[3] Six-Month 2025 Performance For the first six months of 2025, net sales rose to $6,036 million from $5,824 million in the prior year. Income from operations saw a significant increase to $756 million, and net income attributable to Crown Holdings grew to $374 million, resulting in diluted EPS of $3.21 Key Financial Metrics - H1 | Financial Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Sales | $6,036 million | $5,824 million | | Income from Operations | $756 million | $624 million | | Segment Income | $874 million | $745 million | | Net Income | $374 million | $241 million | | Diluted EPS | $3.21 | $2.01 | | Adjusted Diluted EPS | $3.81 | $2.83 | - The performance improvement in the first half was attributed to the pass-through of $214 million in higher material costs, increased shipments in Americas Beverage, European Beverage, and North America food can, improved manufacturing performance, and savings from prior restructuring in Asia Pacific[6][7] 2025 Outlook Based on strong first-half results, Crown Holdings increased its full-year 2025 adjusted diluted EPS guidance to $7.10-$7.50. The company anticipates Q3 adjusted diluted EPS to be between $1.95 and $2.05 and projects generating approximately $900 million in adjusted free cash flow for the full year - Full Year 2025 Adjusted Diluted EPS: Guidance raised to a range of $7.10 to $7.50 - Third Quarter 2025 Adjusted Diluted EPS: Expected to be in the range of $1.95 to $2.05[10] - Full Year 2025 Adjusted Free Cash Flow: Expected to be approximately $900 million - Capital Spending: Approximately $450 million planned for 2025 - Adjusted Effective Tax Rate: Expected to be approximately 25%[11] Financial Statements and Segment Details The company's Q2 and H1 2025 financial statements show growth in net sales and income, driven by strong beverage segments, while the balance sheet reflects reduced debt and increased shareholders' equity, alongside improved operating cash flow Consolidated Statements of Operations The unaudited statements of operations for Q2 and the first six months of 2025 show year-over-year growth in net sales, income from operations, and net income. For the six-month period, net income attributable to Crown Holdings increased from $241 million in 2024 to $374 million in 2025 Six Months Ended June 30 (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $6,036 | $5,824 | | Income from operations | $756 | $624 | | Net income attributable to Crown Holdings | $374 | $241 | | Diluted EPS | $3.21 | $2.01 | Three Months Ended June 30 (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $3,149 | $3,040 | | Income from operations | $391 | $379 | | Net income attributable to Crown Holdings | $181 | $174 | | Diluted EPS | $1.56 | $1.45 | Segment Performance In Q2 2025, Americas Beverage and European Beverage segments drove growth in both net sales and segment income. Asia Pacific experienced a decline in sales and income, while Transit Packaging saw lower sales but stable income. The 'Other' category showed significant income growth Net Sales by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Americas Beverage | $1,405 | $1,325 | $2,725 | $2,547 | | European Beverage | $635 | $560 | $1,147 | $1,042 | | Asia Pacific | $256 | $290 | $535 | $569 | | Transit Packaging | $526 | $550 | $1,008 | $1,070 | Segment Income (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Americas Beverage | $268 | $243 | $504 | $432 | | European Beverage | $97 | $88 | $164 | $139 | | Asia Pacific | $50 | $55 | $97 | $97 | | Transit Packaging | $72 | $73 | $132 | $141 | Consolidated Balance Sheets As of June 30, 2025, Crown Holdings' balance sheet showed total assets of $14,478 million, a decrease from $14,858 million a year prior. Total debt (short-term and long-term) was reduced to $6,490 million from $7,410 million, and shareholders' equity increased to $2,891 million Key Balance Sheet Items (in millions) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total current assets | $4,652 | $4,932 | | Total assets | $14,478 | $14,858 | | Total current liabilities | $4,373 | $4,688 | | Total debt (Current + Long-term) | $6,490 | $7,410 | | Crown Holdings shareholders' equity | $2,891 | $2,507 | Consolidated Statements of Cash Flows For the first six months of 2025, net cash from operating activities increased to $463 million from $343 million in the prior year. The company used $209 million for common stock repurchases. Adjusted free cash flow for the six-month period more than doubled to $387 million from $178 million in 2024 Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $463 | $343 | | Net cash used for investing activities | ($44) | ($143) | | Net cash used for financing activities | ($427) | ($70) | | Net change in cash and cash equivalents | $22 | $111 | - Adjusted free cash flow for the first six months of 2025 was $387 million, a significant increase from $178 million in the same period of 2024[30] Non-GAAP Measures and Supplemental Data The company provides reconciliations for non-GAAP measures, showing adjusted net income and segment income, while demonstrating improved adjusted EBITDA and a reduced net leverage ratio, alongside a favorable foreign currency impact in Q2 2025 Reconciliation of Non-GAAP Measures The company adjusts GAAP results for items like intangibles amortization and restructuring costs to provide non-GAAP measures such as segment income and adjusted net income. For Q2 2025, reported net income of $181 million was adjusted to $249 million, resulting in adjusted diluted EPS of $2.15 compared to the reported $1.56 Reconciliation to Segment Income - Q2 (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Income from operations (GAAP) | $391 | $379 | | Intangibles amortization | $38 | $41 | | Restructuring and other | $47 | $17 | | Segment income (Non-GAAP) | $476 | $437 | Reconciliation to Adjusted Net Income - Q2 (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $181 | $174 | | Adjustments (net) | $68 | $43 | | Adjusted net income (Non-GAAP) | $249 | $217 | Adjusted EBITDA and Net Leverage Ratio For the twelve months ending June 30, 2025, adjusted EBITDA reached $2,073 million, an 11% increase from the prior twelve-month period. This strong performance, combined with debt reduction, led to an improvement in the adjusted net leverage ratio from 3.2x to 2.7x Adjusted EBITDA & Leverage (Twelve Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $2,073 million | $1,875 million | | Net Debt | $5,554 million | $5,996 million | | Adjusted Net Leverage Ratio | 2.7x | 3.2x | - The company is progressing towards its long-term target leverage ratio of 2.5x of adjusted EBITDA[3] Foreign Currency Impact In the second quarter of 2025, foreign currency translation had a net favorable impact, increasing total net sales by $23 million and segment income by $5 million. The European Beverage segment was the primary contributor to this positive effect Q2 2025 Foreign Currency Impact (in millions) | Segment | Net Sales Impact | Segment Income Impact | | :--- | :--- | :--- | | Americas Beverage | $(10) | - | | European Beverage | $19 | $3 | | Asia Pacific | $7 | $1 | | Transit Packaging | $6 | $1 | | Total | $23 | $5 | Other Information This section outlines Crown Holdings' business as a global packaging supplier, provides details for an earnings conference call, and includes a cautionary statement regarding forward-looking information and associated risks Company Information and Forward-Looking Statements This section provides details for a conference call to discuss the results, a cautionary note regarding forward-looking statements, and a brief overview of Crown Holdings' business. The company is a leading global supplier of rigid packaging products and transit and protective packaging products, headquartered in Tampa, Florida - Crown Holdings, Inc. is a leading global supplier of rigid packaging for consumer marketing companies and transit/protective packaging for various end markets[17] - The press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those expressed. Key risk factors are discussed in the company's Form 10-K[15][16] - A conference call to discuss the earnings release was scheduled for July 22, 2025, at 9:00 a.m. (EDT)[14]