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Jun 30, 2023
Silgan Q2 2023 Earnings Report
Silgan reported a decrease in net sales and net income compared to the same period last year, but highlighted growth in high-value dispensing products and adjusted EBIT in Metal Containers.
Key Takeaways
Silgan Holdings Inc. reported second quarter 2023 net sales of $1.43 billion and net income of $78.9 million, or $0.71 per diluted share. The company's performance was impacted by customer inventory management initiatives and the effects of inflation on consumer buying habits. However, Silgan continued to advance its strategic initiatives and secured new long-term business awards.
High single digit growth in high value dispensing products.
Double digit adjusted EBIT growth in Metal Containers.
Progress towards long-term strategic initiatives with multiple new business awards.
Near-term performance will be impacted primarily by customers' inventory management initiatives.
Silgan
Silgan
Silgan Revenue by Segment
Revenue by Segment
Dispensing & Specialty Closures Revenue
CapyFin.comMetal Containers Revenue
CapyFin.comCustom Containers Revenue
CapyFin.com Forward Guidance
The Company has revised its estimate of adjusted net income per diluted share for the full year of 2023 from a range of $3.95 to $4.15 to a range of $3.40 to $3.60.
Positive Outlook
- Adjusted EBIT in the Dispensing and Specialty Closures and Metal Containers segments for 2023 are now expected to be comparable to record levels achieved in 2022.
- Free cash flow in 2023 is expected to benefit from improvements in working capital.
- The Company expects low single digit organic volume growth in the Dispensing and Specialty Closures segment for Q3 2023.
- The Company expects flat volumes in the Metal Containers segment for Q3 2023.
- Capital expenditures are now expected to be approximately $230 million in 2023.
Challenges Ahead
- Customer inventory management in the food and beverage markets impacting volumes in the second half of the year.
- Custom Containers volumes in 2023 are now expected to be approximately 10% below the prior year due to delays in the commercialization of new business and customer inventory management programs.
- This will result in lower adjusted EBIT in the Custom Containers segment in 2023 as compared to 2022.
- Interest expense for 2023 is now expected to be approximately $0.30 per diluted share higher than the prior year primarily due to higher interest rates.
- Volumes in the Custom Containers segment for the third quarter of 2023 are expected to be approximately 10% below the prior year quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income