Crown Holdings, Inc. Q4 2008 Earnings Call Transcript

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2009-02-03 08:58:14.0

Tags: U.S., J.P. Morgan Chase & Co., Beverage, Call Transcript, Earnings, Crown Holdings Inc., Food & Beverage, Manufacturing, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Claudia Shank Hueston - J.P. Morgan.

Claudia Shank Hueston - J.P. Morgan

I just wanted to get a little more color on what happened in the America’s bev can business, the volumes were really strong. And could you talk a little bit about specific trends, particularly in the U.S. and where you may have picked up share and what you are seeing that is different than what the market was showing.

John W. Conway

As you said, we did have a strong quarter and a pretty strong year. The growth, as Tim noted, came largely from Canada and Brazil, but also Mexico and Colombia were strong, and for us the United States was flat year-on-year and the market, of course, was down.

We have a good customer mix now in the United States and was probably the focus of the question. We have more beer volume than we have had in the past. We continue to increase our specialty can business. We think we are a very low-cost producer of 16 oz. cans and 10 oz. cans, for example, which helps us tremendously. And we have got a nice spread of business in the soft drinks side, a fair bit of private label, but also a group of customers now beyond private label who had relatively successful years.

So unlike four or five years ago when we were overly exposed to one customer, who has been struggling recently, I think all of that accounts for the performance during the quarter.

Claudia Shank Hueston - J.P. Morgan

Any comments in terms of what your volume outlook is for 2009 in the bev can business.

John W. Conway

We think beverage volume globally is going to be up 2% to 4% for us. Probably flat again in the U.S. and every place else continuing to grow, but obviously at reduced rates.

Operator

Your next question comes from Christopher Manuel - KeyBanc Capital Markets.

Christopher Manuel - KeyBanc Capital Markets

As you look at your capacity and supply issue heading into 2009, it looks like your capex is going to be relatively similar, 2009 versus 2008. Where are you with capacity additions, timing and such, for 2009?

John W. Conway

In the Americas we are completing our new plant in Brazil. We are just beginning now to make first cans and will be solidly into commercial production by the end of the quarter.

 

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