Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you discuss the exit rates or early Q1 rates for your key businesses and provide an update on Eviosys' performance relative to the original EBITDA guidance? A: The adjusted run rate for Eviosys is approximately $390 million for 2024, with expectations of a 10% increase in 2025. We are seeing sequential improvements in our metal can business in North America and slight improvements in the paper can business. The industrial business has shown consecutive improvements over the last three quarters, and we are optimistic about the start of 2025 despite macroeconomic uncertainties.
Q: What are your expectations for the ThermoSafe business in 2025, and how does it factor into your leverage target? A: We expect the ThermoSafe divestiture process to be completed by the end of 2025, and this is included in our deleveraging plan. While volumes were soft in Q4 2024 due to industry-wide issues, we are optimistic about 2025, particularly with the growth in GLP-1 drugs and flu vaccines. The divestiture is expected to contribute to our leverage target of 3 to 3.3 times net debt to adjusted EBITDA by the end of 2026.
Q: Can you elaborate on the productivity expectations for 2025 and any supply chain concerns, particularly regarding tariffs? A: We anticipate productivity improvements of $60 million to $65 million in the base business for 2025, with a balanced mix between consumer and industrial segments. Regarding tariffs, while they impact our US business, we have mechanisms to pass through costs and minimize their impact. Our diverse supply chain provides opportunities to mitigate these effects, especially since 60% of our business is outside the US.
Q: How is the integration of Eviosys progressing, and what are the expectations for synergies? A: The integration of Eviosys is proceeding well, with strong leadership and cultural alignment. We are focusing on customer and market opportunities, particularly with common CPG customers. We expect to achieve $100 million in synergies by the end of 2026, with significant opportunities in procurement and shared services across Europe. The integration is on track, and we are confident in achieving our synergy targets.
Q: What are the key factors contributing to your 2026 leverage target, and how should we view CapEx trends? A: Our leverage target of 3 to 3.3 times by the end of 2026 will be supported by strong operating and free cash flow generation, as well as proceeds from the ThermoSafe divestiture. Regarding CapEx, we are focusing on growth and value-generating investments, with approximately 60% of capital allocated to value-added projects. We expect to maintain capital expenditures at 4.5% to 5.5% of sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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