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Dec 31, 2020
Silgan Q4 2020 Earnings Report
Silgan reported record earnings and cash generation in 2020.
Key Takeaways
Silgan Holdings Inc. reported a strong performance for Q4 2020, with net sales increasing by 17.0% to $1.23 billion compared to Q4 2019. The company's net income for the quarter was $60.1 million, or $0.54 per diluted share, compared to $34.8 million, or $0.31 per diluted share, in the same period of the previous year. Adjusted net income per diluted share for Q4 2020 was $0.60, up from $0.38 in Q4 2019.
Fourth quarter year-over-year volume increases of 15 percent in each of metal containers and closures and 8 percent in plastic containers.
Reported record revenue of $4.9 billion, with all-time high volumes achieved in each business segment.
Delivered record earnings per diluted share of $2.77, an increase of 59% over 2019.
Achieved record adjusted earnings per diluted share of $3.06, an increase of 42% over the previous record in 2019
Silgan
Silgan
Silgan Revenue by Segment
Revenue by Segment
Metal Containers Revenue
CapyFin.com Forward Guidance
The Company currently estimates that its adjusted net income per diluted share for the full year of 2021 will be in the range of $3.30 to $3.45 and free cash flow in 2021 will remain at or near record levels and be approximately $380 million.
Positive Outlook
- Segment income in the metal container business is expected to modestly improve in 2021 as compared to 2020 as a result of anticipated continued strong demand levels and strong operating performance.
- Segment income in the closures business in 2021 is expected to increase significantly over the prior year primarily due to the inclusion of a full year from the dispensing operations of Albéa acquired in June 2020, as well as the anticipated partial recovery in the second half of the year in the beauty and fragrance markets.
- Segment income in the plastic container business is expected to benefit from anticipated higher volumes driven by new business awards and continued manufacturing efficiencies.
- The Company expects higher interest expense in 2021 primarily due to higher average outstanding borrowings, partially offset by lower weighted average interest rates.
- For the first quarter of 2021, the Company is providing an estimate of adjusted net income per diluted share in the range of $0.65 to $0.75
Challenges Ahead
- Estimates for 2021 assume that the Company, its customers and its suppliers are able to continue running plants during the ongoing COVID-19 pandemic
- Estimates for 2021 assume that there are no legislative changes to income tax rates.
- Higher rationalization charges in 2020
- The unfavorable impact from the lagged pass through to customers of higher resin costs in the plastic container and closures businesses
- A continued shift towards smaller metal packages sold in the metal container business