Crown Holdings, Inc. Q1 2009 Earnings Call Transcript

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2009-04-17 04:31:25.0

Tags: Europe, Call Transcript, Earnings, Citigroup Inc., Crown Holdings Inc., Supply Chain Management (SCM), Food & Beverage, Enterprise Software, Software, Manufacturing, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Timothy Thein – Citigroup.

Timothy Thein – Citigroup

Two questions if I may, first on just to make sure I heard this right Tim, did you say that on the Europe bev can side you guys for the region as a whole volumes were up?

Timothy J. Donahue

5%.

Timothy Thein – Citigroup

So the Middle East I take it was up huge then? Didn’t you say Europe, Western Europe was down, is that right?

Timothy J. Donahue

Well the industry was down in Western Europe and specifically for us the Mediterranean which would be Spain, Italy, Greece, Turkey we were up slightly over last year and the Middle East we were up and then Northwest Europe, France and the UK were down. But, up 5% throughout our operations.

Timothy Thein – Citigroup

On the capacity it sounds like the Slovakian plant starts up I guess in a week or so. Any indications in terms of what you’re seeing there? There’s certainly been from the headlines at least from an economic standpoint some pretty dicey situations in that region. At this point what can you see from the startup of that new plant?

John W. Conway

Tim, I think you’re thinking of discussions we had over a year ago. We decided to slide the commencement of operations in that plant by a year so what we’re thinking of now and in fact, what we’re going to do now is we’re talking about a start up of that plant late first quarter 2010. So, our view is that we’ll be coming up learning curve in 2010, we’ll hit full production capability in 2011 and also this plant is sold out for the first many years with firm volume commitments. So, we’re pretty confident about it but in response directly to your question we are not adding any capacity that is going to come on stream this year in this market in Europe.

Timothy Thein – Citigroup

Lastly, real quick on the food can side another major player in Europe just recently had said that they saw similar to you guys, evidence of a pre-buy most pronounced in January and February and to a much lesser extent in March. Is that kind of consistent with what you are seeing?

John W. Conway

We are but we’re not sure, we never felt the pre-buy was that large. We knew there was some of it but we didn’t think it was that large because there wasn’t that much steel available and there weren’t that many cans available because the steel companies were doing such a good job of managing their own price increases. But, what has surprised us a little bit, we think that the destocking was much more wide spread and the supply chain had an ability to take a lot more units out than we had anticipated. But, March came back very, very well and the first reports in to April are strong as well. So, we’re quite confident for the year but it was we think quite a major destocking event.

 

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