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By the numbers: Q4 and full-year 2023
2023 net sales: $12.01B
Down 7.2% year over year
2023 Americas Beverage net sales: $5.15B
Crown’s largest unit, up 0.4% year over year
2023 net income: $450M
Down 38.1% year over year
- Q4 results: Crown’s Americas Beverage division reflected promising trends in the fourth quarter, but dampened demand for the company’s equipment and aerosols offerings is poised to continue, executives described during the company’s Q4 and full-year 2023 earnings call on Tuesday. Net sales in the quarter totaled $2.86 billion, down 5.1% year over year. Beverage can volumes increased in Crown’s largest business, Americas Beverage, up 5% in North America, whereas most other businesses saw lower volumes. Net sales were up 7.4% in Americas Beverage to $1.3 billion, while sales declined in its European Beverage, Asia Pacific and Transit Packaging divisions.
- Footprint changes: CEO Tim Donahue said Crown closed five production facilities globally during the quarter, adding that the “difficult decisions” were “necessary to adjust our cost structure with expected future demand.” Those included closures at a Batesville, Mississippi, beverage can plant, and a Decatur, Illinois, aerosol can plant. Also as part of a “manufacturing modernization program,” Crown shuttered beverage can facilities in Ho Chi Minh City, Vietnam, and in Singapore, shifting capacity to a new “high-speed” plant in Vung Tau, Vietnam.
- Weaker points: Demand for aerosol cans is expected to remain depressed. Aerosol products are expensive, and some air fresheners, for example, have transitioned from aluminum or steel to plastic packaging, Donahue said. “I don't see the business getting any worse, but it could be a year or two before it gets better.” Crown’s business that sells canmaking equipment is at a “low point,” with no new equipment sales expected to occur in 2024 or 2025, Donahue said, adding that it will be “predominantly a service and parts business” in the coming year. But since sales were “minimal” in 2023, it won’t create a headwind in 2024.
- Maintaining non-beverage businesses: Asked about rethinking non-beverage businesses in its portfolio, Donahue said Crown is “not in the market to give our businesses away” in hopes of short-term gains. “I have a difficult time understanding how we create more value by getting smaller.”
- Outlook: The company expects consumers will continue to be “under pressure in most markets,” according to its release. Europe, where consumers have been hit particularly hard by inflation, is expected to improve following Q1, executives said. While Crown expects the North American beverage sales market will broadly be flat or see up to just 1% growth in 2024, as a company Crown expects it will have another year of volume growth in North America, as well as Brazil. In the Transit Packaging division, performance is expected to improve as industrial activity accelerates. Crown said its 2024 focuses include generating cash and improving operations. Donahue said in the release that the company “has established a manufacturing platform which will allow us to service existing and additional market demand with significantly reduced levels of capital investment.”
