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By the numbers: Q3 2024
Net sales: $3.07B
Up 0.2% year over year
Americas beverage net sales: $1.37B
Up 5.6% year over year
Net loss: $175M
Reflecting pension settlement charges of $517M
- Q3 recap: In contrast to a particularly challenging third quarter in 2023, Crown Holdings exceeded analysts’ expectations in Q3 2024. Crown’s revenues were about flat year over year, reflecting increases in its larger Americas beverage and European beverage segments but decreases in its Asia Pacific and transit packaging units.
- Growing segments: The Americas beverage business had a 21% increase in segment income, with volumes up 10%, including a 5% jump in North America. The results were also aided by strong performance in Brazil and Mexico. CEO Tim Donahue said “we do believe the alcohol segment grew faster than the non-alcohol segment, and some of that could be a bounce back of some of the mass beer declines we've experienced over the last seven or eight quarters.” Overall, Crown estimates the North American beverage market is up as much as 1.5% this year, and Donahue projects that Crown is up in that market as much as 7% year to date. Donahue said he expects Crown’s growth to be more in line with the market next year. In Europe, shipments grew 6%, supported by sustainability trends, Donahue said.
- Declining segments: Income improved in the Asia Pacific business, in part as the company reduced capacity amid demand weakness; it saw an 11% drop in unit volume sales. Donahue said the transit packaging business continues to feel the pain of “weakening global manufacturing conditions,” which the company does not expect will improve this year.
- Net loss: The company reported a $175 million net loss during the quarter, which it said was related to pension settlement charges. Crown reported that it “transferred portions of its U.S. and Canadian pension plan obligations to insurers,” which resulted in total pension settlement charges of $517 million. Specifically, it contributed “approximately $100 million into the pension plan and settled nearly all pension obligations for retiree and deferred vested participants.”
- Outlook: Crown maintained its outlook for adjusted free cash flow of at least $750 million on the year. Capital expenditures are projected to not exceed $450 million. It expects North American beverage segment volumes to grow 5% to 6%. Donahue said customer promotional activity in both 2023 and 2024 have been “lackluster, but that may well be the new norm.” In the fourth quarter specifically, Crown expects it will outperform year over year in the European beverage business, given last year’s destocking.
