Crown Holdings reports Q3 EPS of $2.24, raises 2025 EPS guidance amid strong European beverage performance and healthy cash flow generation.

OPERATOR - (00:00:59)

Good morning and welcome to Crown Holdings third quarter 2025 conference call. Your lines have been placed on listen-only mode until the question and answer session. Please be advised that this conference call is being recorded. I would now like to turn the call over to Mr. Kevin Clozier, senior Vice President and Chief Financial Officer. Thank you sir, and you may begin. Thank you Elle and good morning. With me on today's call is Tim Nonahu, President and Chief Executive Officer. If you don't already have the earnings release, it is available on our website@crowncork.com on this call, as in the earnings release, we will be making a number of forward looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings, including our Form 10K from 2024 and subsequent filings. Earnings for the quarter were $1.85 per share compared to a loss of $1.47 per share in the prior year. Quarter adjusted earnings per share were $2.24 compared to $1.99 in the prior year. Quarter net sales in the quarter were up 4.2% compared to the prior year, reflecting a 12% increase in shipments across European beverage, the pass through of higher raw material costs and a favorable foreign currency translation partially offset by lower volumes across Latin America. Segment income was 490 million in the quarter compared to 472 million in the prior year, reflecting increased volumes in Europe and strong results in our tinplate businesses as well as continued operational improvements from across the global manufacturing Footprint. For the nine months ended September 30, free cash flow improved to 887 million from 668 million in the prior year, reflecting higher income and lower capital spending. The company repurchased 105 million of common stock in the quarter and 314 million year to date. When combined with dividends, we have returned more than $400 million to shareholders this year. The company achieved its long term net leverage target of two and a half times in September and remains committed to a healthy balance sheet while returning excess cash to shareholders in the future. The company continued to perform well in the quarter with year on year improvements in segment income, adjusted EBITDA and free cash flow. We have seen limited direct impact from tariffs and remain attentive to the indirect effects that tariffs have had on the global consumer and industrial demand. Considering our strong performance to date, we're raising our guidance for the full year adjusted EPS to $7, $0.70 to $7.80 and project the fourth quarter adjusted EPS to be in the range of $1.65 to $1.75. Our adjusted earnings guidance for the full year includes modest changes to the following assumptions. We expect net interest expense of approximately 350 million. Exchange rates assume the US dollar at an average of $1.13 to the euro, non controlling interest expense to be approximately 150 million and dividends and non controlling interest are expected to be approximately 140 million. Remaining unchanged. We expect full year tax rate of 25%, depreciation of approximately 310 million. We now estimate 2025 full year adjusted free cash flow to be approximately $1 billion after $400 million of capital spending and net leverage to remain close to our long term net leverage target of two and a half times. With that, I'll turn the call over to Tim. Thank you Kevin and good morning to everyone. I'll be brief and then we'll open the call to questions. As Kevin just summarized and as reflected in last night's earnings release, third quarter results were better than expected. Consolidated earnings per share advanced 13% as the strength of our balanced portfolio drove higher segment income and cash flow, in turn lowering interest costs, strong demand in European beverage and an improving cost structure across the U.S. tin plate businesses combined to offset weakness across Latin America. Two items to remind everyone of first delivered aluminum reached $2.10 a pound last Friday. That is up 74 cents a pound or 54% in the last 10 months, primarily from the increased United States delivery premium we contractually passed through aluminum. So the increased denominator effect will reduce percentage margins, not absolute margins. And this is primarily a North American issue. And it had about a 1.25% impact on America's beverage margins in the third quarter. Second, as most of you are aware, we operate our Brazilian operations through a joint venture. As Brazil profits go up or down, the minority interest that you see on the face of the income statement will also go up or down. The lower minority interest that you see in the third quarter are the result of the lower Brazilian income which is reported in the Americas beverage segment income following numerous quarters of above market growth including 10% in last year's third quarter. America's beverage volumes were down 5% in the quarter, the result of a 15% volume decline across Brazil and Mexico. The effects of an uncertain and tariff weary Mexican consumer combined with the coldest Brazilian winter in 20 years subdued demand. We do expect fourth quarter in Brazil to return the growth and 2026 in Brazil may be bolstered by government initiatives to lower interest rates and provide subsidies to the lower income populations. And as discussed earlier, the net earnings impact to the company is somewhat muted by the reduction in the Brazilian minority interest. North American volumes were mixed in the quarter, down 3% after getting off to a slow start in July and August. However, activity rebounded firmly in September which was up 3%, and shipments to date in October have also been strong. For reference, North American volumes were up 5% and Latin American volumes were up more than 18% Eastern in the prior year third quarter European beverage posted a record quarter with income 27% above the prior year on the back of 12% volume growth. As has been the case throughout the year, growth was recorded in each region of the segment as the CAN continues to gain share across Europe, while in the Gulf states the emergence of local brands is driving outsized growth. Margins across Asia remained above 17% in the quarter despite lower Southeast Asian volumes of 3% as Asian industries and consumers alike feel the pinch of higher tariffs to their economies. Transit packaging income remained level to the prior year as increased shipments and continuing cost efforts offset the impact of lower equipment activity. The industrial markets remain challenging, but the transit team is executing well to control costs and generate cash. North American Food can benefited from firm harvest demand and efficiency. Improvements to recently installed capacity combined with a lower cost structure in aerosol cans and increased activity in can making equipment results in other significantly exceeded the prior year third quarter. So in summary, performance across the portfolio resulted in another strong quarter, segment income up 4% and earnings per share up 13% against a very strong prior year. Third quarter European Beverage reflects the ongoing benefits from overall market growth and substitution. North American Food continues to gain from new capacity brought online over the last two years. The balance sheet is strong and when combined with robust cash flow, the company remains well positioned to responsibly return cash to shareholders. And lastly, before we open the call to questions, we've had an exceptional year in 2025 as the entire Crown family continues the mission to serve our brand partners and we sincerely thank them. So with that Elle, we are now ready to take questions. Thank you Chair. We will now begin the question and answer session. If you would like to ask a question, please press Star. And then the number one Please unmute your phone and record your name and company name clearly when prompted. These are required to introduce your question and to cancel your request, please press Star. And then the number two. Our first question comes from the line of George Stephos of Bank of America. Your line is now open. Thanks so much. Hi everyone. Good morning. Thanks for the details. How are you? Congratulations on the progress. I guess the first question I had, Europe, you grew 12% as you stated, share gains, I think from a PAC mix standpoint and underlying market growth. Can you give us a bit more color? And in particular, should we worry at all about pre buying lapping, tough comps at some point? How long do you see Europe growing at maybe not 12% but at what's been the historical rate given what's been very, very strong growth through the first nine months and that had a one or two follow ons. Okay, so good question, George. It'll allow me to say something that I do want to get out on the call as well. So the third quarter of last year, I think Europe was up 6%, up 12% this year. And George, you've been around a long time like I have. Maybe I have more gray hair. But you know that 6% and 12% is not the history of the can business, right? The can businesses is a low growth business with pockets of outsized growth requiring discipline. Cash flow is quite high and it gives you the opportunity to generate a lot of value. So anybody expecting the company to grow 12% quarter after quarter or expecting us to grow earnings per share 20% year after year, you know that's not what the can industry is. Right? It's certainly much more stable than that. And but having said that, I don't think we would ascribe any volume growth that we had this year in Europe to pre buy. I think as we've said before, and I know repeatedly Tom and Kevin have told you before, the long term growth rate in Europe has been on the order of 4 to 4.5%. 4 to 5% got a couple open years in there, perhaps when the Germans outlawed cans and some other things. But for the most part over the last 20 to 25 years it's been pretty consistent the amount of growth. And I just point out that while the Segment was up 12% in the quarter, Continental Europe was up more than the Middle East. So this was a European driven growth phenomenon. And I think it's largely to do with growth itself, underlying growth and substitution, as we've discussed before. Okay, appreciate that, Tim. Second question. As we think about the year and certainly what looks to be an up fourth quarter versus where we were and where consensus was, how are you thinking about the Americas EBIT overall? At one point in time you mentioned billion dollars of ebit. I think if I'm correct, as being aspirational can you talk about what the outlook is for the year? If you can talk a little bit about in terms of the third quarter or however you want to frame it, what the profit impact negatively was from what you saw in Mexico and Brazil and how that's woven into the billion dollars. And then lastly, and I'll turn it over, was there any pickup from spread or is it purely cost reduction and your volume increase that drove the performance? Thank you. So you're going to have to stay on the line, George, because you asked a bunch of questions. Only two. Two. The first one was long, so repeat the. Just get me started on the first one again. Basically the billion dollars of EBIT being mean. Oh, a billion dollars still the case. And Brazil, Mexico kind of what impact did they have? So billion dollars. I was prepared to again tell you this morning it was aspirational. Kevin reminded me this morning that it looks like we will get there this year. Brazil, Mexico, Mexico. We own 100% of our operations, George. Brazil is a joint venture. If you look at the difference in minority interest, which is what, 12 to 15 million dollars if you want to say the impact of Brazil itself was more than $20 million in the quarter. And the impact from Mexico, Mexican cans, glass was flattish to slightly up in the quarter. Mexican cans was also an impact of about 5 or 6 million in the quarter. So more than the total decline in America's beverage came from Mexico and Brazil. Got it. And spreads in metal and steel and alternative. So I don't believe at this time we're benefiting in the third quarter from any spreads in steel. Perhaps there was some spread benefit earlier in the year, but in the third quarter I don't believe we had any. Thank you very much, guys. I'll turn it over. Thanks, George. Thank you. Our next question will be from Gunsham Punjabi of Baird. Your line is now open. Thank you, operator. Good morning, everybody. Morning, operator. Morning. I guess, you know, if we switch to North America, I think you said, Tim, volume's down 3%. You know, sort of a mixed start of the quarter. End of the quarter, much better. What do you think the industry did during the third quarter? And, and is there anything else just going on in terms of movement as it relates to promotional spending that's a little bit more episodic. And so you're seeing that as your customers adjust things or what do you think is going on in the market? Tom does his best to estimate the market. Not everybody reports data, so we have to make some estimates. As we said, we were down 3 in the quarter. And Tom's best estimate is perhaps the market was up 2% in the quarter. So we will have underperformed the market. Our underperformance is specific to one customer that we pruned at the start of the year. So I'll leave it at that. It was a complicated customer with short runs, a lot of label changes. Frankly, the pricing didn't warrant the complexity put on the factories, the inefficiencies put on the factory. So we didn't participate, no longer participate in that account. What do I think is going on with promotions? You know, boy, I tell you, in the summer, Ganshaum, it felt like they were. They were much more aggressive promoting. I think through the third quarter, even through Labor Day, it didn't feel like promotions. Now, you know, we've got folks that are in supermarkets up in the Philadelphia area, and we're down here in the Florida area, so we're not covering the whole country. But it didn't feel like, you know, when you go to the supermarket and you look. Because it's one thing for your customers to tell you what they're doing nationally, it's another thing to actually walk into stores and seeing the promotions, it didn't feel like it was very. They were heavily promoting. I think the strength in the market, if the market is indeed up 2%, as Tom says, is more about the resilience of the beverage can, is more about the experience that the consumer has with affordable pleasures in a challenging environment. I think it just. It shows the strength of the can and it shows the strength of our industry. And I'm not trying to be promotive when I say that, Ghanshem. I just don't. I don't see the promotions from our customers driving the growth. I see the consumer, just the consumer demand for the product right now driving the growth. Okay, fair enough. And then just related to that, you know, so just based on what you said about pruning and, you know, some of the adjustments in the market, et cetera, what's your base case as it relates to volume specific North American beverage for 2026? You know, I'm just trying to get a sense as it relates to if there's any spillover from the pruning and so on and so forth. And then for my second question on Europe, just given the strength, which has been phenomenal for multiple years, how do you feel about capacity in the region and your specific footprint to align with that growth expectations having changed pretty nicely over the years? Yeah, so we like our footprint. We're very strong in the perimeter. There's some pockets in the central part of the European continent where we're smaller or not present. You know, the only thing I would tell you is the margin opportunity in those regions have not justified us putting capacity in. I think that and we've talked about this before because we're on the perimeter and we're closer. We're very strong across the Mediterranean. We do benefit when tourism is up and tourism was up this summer, so it can go either way. Gonchon. But this year we were the beneficiaries of a strong tourism season. I do think again, as I said to George, I don't think that. And you've been around a long time as well. Gancham. I don't think anybody should ever anticipate that. 12% is a number that you should expect companies in the can business to print every quarter. We may get a quarter or two like that every so often. But you know, the growth rate in Europe is as you said, it's been very nice. Growth, 4 to 5% for 20 plus years. We'll take that for the next 20 years. Capacity. There are pockets of open capacity specific to one or two regions but by and large the market's in pretty good shape. And from time to time, you know, the hope is we're all responsible and we pick our moments as to when we want to add more capacity. And beverage North America 20, 26 volumes. I think as we've said before, we expect to be up next year. Okay, fair enough. Thank you. Thank you. Thank you. Our next question will be from Stefan Diaz of Morgan Stanley. Sir, your line is open. Hi, good morning Sam. Good morning Kevin. Hi. Yeah, maybe just to begin, can you just give more details on the drivers for the better than expected performance. In other I know in the prepared remarks said that food cans are strong. Maybe you saw some green shoots in the equipment business but maybe on a go forward basis, how should we think about the earnings power in this business? Well, last year was not a very good year. So let's start with the comp was low. I never want to say anything is easy but the comp was low. We knew coming into this year we were going to do much better across food and aerosol food with some volume gains early in the year. And we brought on three new lines over the last couple of years. Two two piece lines and then we have a three piece line. Two three piece lines that are co located at a customer facility and all are operating much better now than they were earlier. So volume Growth, say pet food in Q1, vegetables in Q2, pretty constant volume in Q3, but really a lot of efficiency gain here in Q3 in food. We did close an aerosol camp plant last year, so the aerosol cost structure is much lower. So we're benefiting from that. And I almost used the term green shoots in my prepared remarks, but I thought better of it. Although I will tell you that equipment sales, equipment and tool sales in can making are up. In Q3, profitability is up. There is growth globally in beverage can and beverage can equipment. It's in a lot of regions of the world that many Americans are not familiar with. But we do operate a global equipment business out of the headquarters in the UK and green shoots? I don't know, it might be too early to say that, but I think we're, we're happy with where the business looks like it's going right now. Okay, great, that's helpful. And then maybe in Cignode, correct me if I'm wrong, but I think you expected like a 25 million headwind due to tariffs in that business. I mean, you were able to grow income there modestly. Is this headwind still the right way to think about 2025 and maybe just sticking with signode? It seems like revenue declines have been getting better over the previous two quarters. Do you think the business is in a position to maybe start growing top line as we look into 4Q and 2026? Thank you. Yeah. So just on the revenue, remember one thing. We also pass through material costs in signode and by and large, that's steel. Not tin plate steel, but steel and plastics. So as the price of those commodities move up or down, our revenues move up or down. But in total, overall volumes would have been lower. Equipment and tools would have been lower. There are higher value items that get sold and there are higher margin items that get sold, offset by plastic strap, which was up nicely in the quarter. You know, I'll wait right now before I say we're at a bottom. I think they're. There are some things that still need to be sorted out with tariffs and everything else before we get too confident on where we think cross border shipments of equipment are likely to be as we go forward. Tariffs. Kevin and I looked at this the other day. I would say we said that originally we expected 10 million of direct tariffs. I think we still expect that through 3/4. We're in the 7, $7.5 million range. So we expect the 10 indirect. We said 15, which was a function of lower order patterns from Customers given uncertainty and or increased cost for some of the equipment that we make in Switzerland or Finland, that would have to come into the US and we are seeing lower equipment and tool sales that are made abroad that would otherwise come into the US So I think that's still a good number. And as I said, the. The transit team doing a really nice job of managing their cost structure, looking for ways to reduce cost, running more efficiently, running more responsibly. You know, the one thing we have delivered to the Signode franchise since we've owned it now for seven years is we brought them back to understanding they are a manufacturing company. And as we try to do in our can business, we've put a number of the former can guys in the cignode who are helping them understand the positive benefits of efficiency and lower spoilage and lower labor hours to make as many or more units. And I think it's paying off. So cost structure a lot lower. The opportunity for us to benefit greatly when the industrial markets return is there. I just, you know, I don't. A little too early to call for that right now. Thank you. I'll turn it over. Thank you, Stephanie. Thank you. Our next question will be from Chris Parkinson of Wilfried. Sir, your line is open. Great. Thank you so much. When we think about your global operations, we've seen consistent improvements in operating profitability. Could you just do a quick flyby of how we should be thinking about that in terms of 2026 and where you think you still could be seeing some opportunities? Obviously, given that just the asset changes in Asia obviously be one top of mind. And then also in the US it just seems like some of your newer facilities in the last five years continue to operate a little bit more efficiently. So if you could give us some color there, it would be greatly appreciated. Thank you. Yeah, listen, I think that, I think we're going to continue to improve operations. I mean, it's not a, you know, the manufacturing team has goals every year and the goal is to get better every year. And we've described to you before that we typically characterize our plants in one of three buckets. And if you're in the bottom bucket, you're expected to be the top bucket the prior the next year. So it doesn't always happen, but that's the goal, continuous improvement. So from that standpoint, we always expect the manufacturing teams to do a better job. That's their job. Having said that, one thing that will happen as the price of quoted aluminum on the London Metal Exchange increases and more specifically as the delivery premium stays higher for longer, we will have percentage margin impact, especially in North America. So that will flow through the Americas beverage segment as we, as we pass through one for one, the denominator gets bigger with the same dollar. So you understand the denominator effect. And then, you know, we'll see how, we'll see how Mexico and Brazil do next year in the face of, of a tariff environment that has consumers and customers alike a little uncertain to this point. And I should mention that across Asia the tariff environment perhaps even more impactful than it is in Brazil. So, you know, all in all, margins across our business are pretty healthy. I think in every reportable segment we have, we're well into the double digits. And you know, even transit is a business right now where demand is low, but they're making above 13%. So we describe that as a 12 to 15% business. And historically, if you look across packaging land, 12 to 15% in a low growth, low capital intensive businesses is really quite nice because you generate a lot of cash and give the management team a lot of flexibility how to return the money to shareholders. So we're quite happy with the portfolio at this point. Just as a quick follow up, just when we're thinking about your free cash flow conversion, given your updated number for 25, how should we think about then 26 in terms of priorities now that you've hit your 2.5x leverage target in terms of buybacks and anything else you're considering. Thank you. Yes, Kevin does want to tell you that we've probably got a little timing on capex flipping into next year, but we're still going to have exceptional cash flow next year and as we said in the press release, balance sheet's in really good shape. We'll responsibly return cash to shareholders. You know, we might move debt down, up or down a little bit, but we're going to be in and around two and a half times and there's a lot of cash left over to return. Thank you so much. Thank you. Thank you. Next question will be from Anthony Pitinari of Citigroup. Sir, your line is open. Good morning. Just following up on the last question. So the capex that was lowered for this year, I guess it just shows up in next year and I don't know if you had any kind of further comments about CapEx specifically in 26, just given that North America, Europe seems like the system is probably running pretty full or I'm not sure how you'd characterize it, but any color you can give there? Well, I'll characterize it this way because it's a good question. I would say they're running full enough for everyone to be responsible and have a good margin environment. Now, you know the history of the world. People get greedy and they try to take more than they need to, but the systems are pretty full and we should find a way to operate and improve. Everybody should find a way to improve. We originally said 450 of capital. This year we're going to be about 400. So if we thought about 450 and 450, maybe next year is in the 450 to 500 range. Okay, that's very helpful. And then just switching gears on Transit. How did transit demand kind of hold up in 3Q kind of relative to the the expectations you shared with us over the summer? And as we think about 4Q and finishing the year, I mean, is demand improving? Is it deteriorating? Is it kind of in line with 3Q? Just any thoughts you can give there? I would say that on the commodity side, that is steel and plastic strap film, all the protective products actually holding up and specifically in India and the United States, holding up much better than we had initially anticipated at the beginning of the year. And that's probably driving a little bit of the slightly better performance that we had in Q2 and Q3 than we might have otherwise expected. And it's offset by lower equipment and tools, which is, you know, much hard, much higher margin business. So equipment and tools impacted by the tariffs and perhaps in a reverse way, tariffs are going to help our commodity businesses because it just becomes that much more expensive to bring commodity products into the country from overseas. So, you know, all in all, I think holding up as we expected or just a touch better. Okay, that's helpful. I'll turn it over. Thank you. Thank you. Our next question will be from Phil Eng of Jefferies. Sure. Your line is open. Hey, guys. Sean, quarter. Congrats. So, Tim, I guess, you know, when we think about North America this year, the market's up. It's been a little noisy for you guys. But it sounds like you're seeing good momentum in the fourth quarter when you kind of look out to 2026. It sounds like you expect growth again. How are you positioned now? I know during the summer months you were sold out. Inventory was pretty tight. Do you think you're going to be in a position to better service that demand next year? And then you made the point that everyone's got decent capacity, should be able to make good money and profitability. In the spirit of that, I believe there are some contracts that are going to be up for renewal in north america the next 12 to 24 months. Do you view that as a opportunity to sustain profitability at these levels and build off of it, or there's some risk factors we should be appreciative of? Well, you know, the. Phil, the risk factor is that we're in a competitive business and not everybody has the same goals and aspirations as everybody else. And you know, we operate our business the way we operate our business. And I, I can't really comment on how other people operate their business, but I think we've done a nice job over the last several years bringing on capacity at reasonable margins and trying to get a return as quick as we can. For the amount of money it costs to build and run a can plant, I think that, you know, we'll see where the, where the market takes us. But as I said earlier, we're not unhappy with our margin profile. Got it. And then your ability to service that North American demand next year was a little tighter this year? No, we should be okay to service the demand next year. Not an issue. Okay. And then Europe, obviously, really strong growth. And to your point, capacity is pretty tight. Same question your ability to kind of service that demand. And lapping pretty tough comps. Appreciating mid single digit growth is historically how it's grown. Is that still a good way to think about things when we look out the 26? Yeah, we have. We bought the German plant sometime early last year, I guess it was. And we're still trying to bring them through the crown learning curve as opposed to whatever learning curve they thought they were on before. But it is getting better and that yields more cans as you go through that process. And we are modernizing a facility in Greece and essentially we're operating the two old can lines currently, but we're building two new can lines on the same property. And then when they're done, they'll be much higher speed, obviously greater output capacity, and we'll take down the old lines when we're done. So we are adding capacity in Europe as we speak. And there are other ways that we're looking at to incrementally add capacity if needed. Got it. Remind me when those two new plants come online in Greece. Well, it's two lines, not two plants. I'm sorry, two lines. Yeah, they should be done sometime early next year. Okay. Appreciate the color. Thank you. You're welcome. Thank you. Our next question will be from Matt Roberts of Raymond James. Sir, your line is open. Hey, Tim. Kevin, good morning. Good morning. Let me take another stab here at 2026. Let's diverate the point. But based on the demand you're seeing now, do you continue to expect to build inventory in 4Q and then more broadly? I mean, it seems like at max last week, a lot of customers seem to be showing off innovation or areas of growth. Are there areas of the portfolio where you'd like to lean into more in 2026 or on the contrary, certain pockets of the portfolio that are becoming more competitive going into 2026 that you'd want to diversify away from to protect price and margin? I don't know if there's anything I'd say is becoming more competitive. The business has always been very competitive, and I don't think we really want to lean away from anything. I think the. You know, Kevin and I were talking earlier. You know, we mentioned earlier to you the price of delivered aluminum right now at $2.10 a pound, most of that increase being made up by the increased delivery premium. This is the highest that we ever remember. And it does remind us of mid to late 2022, when a massive rise in the aluminum price to the delivered aluminum to the mid-4000s a ton did have an inflationary impact across the can business. And you know, the one thing that our business survives very well is recessionary environments, many businesses and demand. You do worry about inflation. So see, before we get too excited about next year, let's see what higher aluminum and higher inflation because of aluminum means to not only our customers, but also to the consumers. But nothing that we're going to lean away from. It's just, you know, you're always mindful of inflation. That certainly makes sense. Thank you, Tim. And one more on Europe, you did note continental did better than Middle east within continental Europe. Was that across the board for the market or more specific to your, I'll call it, Southern Europe exposure for us? It was across the board. Okay, well, you didn't know tourism, I mean, it seems like some travel companies are saying tourism season is getting expanded. Was that evident in October or does that impact seasonality in that business at all going forward or just too minimal, all things considered? No, tourism is very big from, let's say, May to September. It is more seasonal than. It's not an October phenomenon. Appreciate that. Maybe I could squeeze one last one. And it looks like you have some maturities due in 2026 just to refinance the Euro notes plans to address remaining maturities or impact the interest in 2026 or. Matt, thanks for taking all the questions. Yeah, so, yeah, Matt, in terms of 2026 notes, if you look at the balance sheet now, we really have cash on the balance sheet to settle those notes, and some of them have different call dates. So we'll look at the call dates and address them as they come due. In terms of interest expense for next year, I would think it's largely in line with this year is what I would forecast. Tim, Kevin, thank you again. Thank you. Thank you. Our next question will be from Mike. Mike Rocksland of Truist Securities. Sir, your line is open. Thank you, Tim, Kevin, Tom, for taking my questions. And congrats on a strong quarter. Tim, just would love to get your thoughts around capital allocation for 2026. Given you've had a strong growth this year, increasing free cash flow generation, which you just increased with your updated guide, you're now at your targeted leverage level. So how should we think about capital return next year, particularly in light of some of the expansion projects you mentioned as well that you're pursuing in Europe? Well, I think we said this year capital is 400. We said next year is 450 to 500. That doesn't materially reduce cash flow. But you know, if you want to, if you want to say we got a billion this year and you're only happy with 900 next year, we'll be happy with 900 next year. We'll see where it comes out. But, and as we said, the balance sheet's in pretty good shape. And at the end of the third quarter, we're 2.5x levered. Whether we're 2.3x or 2.7 or 2.5, I'm not sure in the world when right now makes a whole lot of difference. I think it gives us the flexibility, depending on the share price, to be opportunistic how and when we want to return more cash to shareholders. I mean, I totally get it. Do you think, given the accelerating free cash flow, that you could repurchase 400 million of shares, $500 million worth of shares? Any number that you'd like to just give as a baseline, given your strong performance for 26, it is, I could give you a whole lot of numbers. I don't want to give you a number because you're going to write it down, but you can do the math clearly. You know, if you want to start with 900 million, you know, if we don't buy back a number like you just said, what are we going to do with the cash, we can either pay down debt or buy back stock. So I don't mean to not give you an answer. I just, I don't, I don't want to say I'm going to buy back a certain amount and if the price doesn't make sense, you know, we'll see where we get to. But there's adequate cash to allow us, I don't want to say unlimited flexibility, but a lot of flexibility in what we do. Totally get it. One quick follow up just on the CapEx, the 450 to 500 million dollars, is that solely related to the two new lines in Greece and the modernization of the German plant? Is there anything else that we should be mindful of with Capex and could that number actually wind up being higher if you decide to pursue other projects? Thank you. We also have a plant, a third line that we're putting in a plant in Brazil that we've talked about earlier. So that's included in there. And there may or may not be one other opportunity that we've not decided on. Certainly not announced yet. Thank you. Thank you. Thank you. Our next question will be coming from Arun Viswanathan of RBC Capital Markets. Your line is open. Great. Thanks for taking my question. Congrats on a very strong quarter there. I guess first off, just in North America. I understand that. I think your volumes may be, I think you mentioned minus three, industry may be up plus two. I think you attributed a good portion of that to some customer mix issues by your own intentions earlier in the year. So I guess would you characterize the rest of your portfolio as somewhat in line with industry excluding that event or maybe ahead or behind? I think you guys are a little bit under indexed to energy versus your peers. Did that result in maybe a less in industry performance or would you say that you guys were in line and seeing pockets of strength elsewhere? No, I think you're, I think the customer prune probably gets us pretty close to flat year over year. Then there is slight underperformance and you may want to attribute that to under indexing energy. The other thing I would tell you is that alcohol was stronger in Q3 than we've seen for some time. And as you know we're under index to beer in North America. So that could have attributed some of it as well. Okay, that's helpful. So then if we consider that maybe you will post some growth as you noted in Americas next year, do you expect also continued growth in the other segments as well? I mean European beverage really standout performance, but you are going to be facing pretty tough comps there. And then signode and non reportables or transit non reportables appear to have achieved a structurally higher earnings power level. Is that correct? Is that a fair characterization? And can you grow from what you did this year or is this year more transitory? So I think, you know, we expect the European business to continue to grow volume and income wise. I think the can still has penetration available to it across southern Europe and it certainly has substrate shift available to it across the entire continent. Transit the cost structure is significantly lower than it was a couple of years ago. That business is only waiting for industrial demand to pick up and there is embedded gains in that business. Now, as I've said before, whether that's one, two or three years away, I can't answer it for you. But the business from a cost standpoint is in excellent shape. Food business I would say that as you know, food is not a growth business. So we expect food to be a very stable business. We do see the move from human food in cans shifting more to pet food in cans and that is ongoing and we have a very large and stable pet food can presence and we're going to continue to benefit from that. So I think the growth that we're likely to see in the other segment comes from greater efficiencies on stable volumes in food and aerosol combined with some recovery in the can making equipment business over time. And I really appreciate that. Just if I could squeeze one last in just on the Midwest premium and maybe even aluminum in Europe, I know that the percent margin may start to get impacted. But would that inflation also potentially start to impact demand at some point, especially in Europe, as you potentially negotiate those price increases or how does that work? So I mean obviously we did say North America. We are mindful of inflation, the impact of inflation on the consumer specific to higher delivered aluminum, which is mostly related to the Midwest premium. Right now the delivery premium in Europe is not the Midwest premium and it's not as elevated as the Midwest premium because they're not dealing with a tariff structure for imported aluminum. So we don't have the same inflationary element notwithstanding the London metal exchange price for aluminum. So I don't right now have the same concern with European demand that I do with North American demand. Great, thanks. Thank you. Thank you. Our next question will be from Josh Spector of UBS through your line open. Hey, good morning. First, I just wanted to ask a quick follow up on free cash flow and deployment there. I think in Response to an earlier question, you talked about paying off some of your debt coming due. Just curious, do you think you need to reduce your gross debt level from here or like just trying to think about why do that versus refi and buybacks into next year and how you're thinking about it. So look, we give you a net debt leverage ratio which is 2.5 times. So the cash on the balance sheet right now is really there to pay off debt that's coming due. It's a net leverage. So it doesn't move, you know, as we think about it going forward, you know, absolute debt levels. You know, we're comfortable with the absolute debt level because it tells us net debt level because we're at the two and a half times we do have to address the bonds that are coming due to use the cash and refinance. You're effectively levering up at that point. So we're comfortable at the net leverage ratio of two and a half times. Yeah, we don't expect any levering up to satisfy 20, 26 maturities. Just to summarize it, I think we're in and around the long term target of two and a half times. If we took all the cash flow we generated next year and paid dividends, bought back stock, we'd still be levered in and around two and a half times. Okay, I appreciate that. And just to ask, on the Novelis fire that was reported earlier, I mean, from this call, it doesn't sound like that's impacting your volumes at all. But curious, just does it have any impact for you or your view on what the impact there could be on the industry? So the direct impact to Crown from that fire is not as large as it is to others, including some of the customers. That does not mean there's not an indirect impact. And Novelis is looking to subsidize lost automobile production with can sheet production. So we are monitoring that, but we're not a. We don't have a lot of exposure to Novelis in total, but we are mindful of the impact on some of the customers we have that do buy directly from them. We don't see a negative impact to the company over the next several months. Okay, thank you. Thank you. Thank you. Our next question will be from Edlin Rodriguez of Mizuhos. Your line is open. Thank you. And good morning, everyone. I mean, Tim, so when you look at share repurchase, I mean, again, since earnings last quarter in July, there was like a long down spell in the stock. Was there any thinking of trying to be more aggressive with buying back shares over the past couple of months or was getting to the targeted leverage or higher priority? I don't think there was no priority to get to the targeted leverage. I think we got to the targeted leverage a little earlier than we anticipated, probably for three reasons. We generated a little bit more cash than we thought we would. Some of that was the result of more earnings than we thought we would have. And then I think currency helped us as well. So we do have a fair amount of debt that's denominated in euros and the euro did devalue a little bit in Q3. So all of that helped us get to that leverage target a little sooner than we thought we would. Whether we got to 2.5x by the end of this year or sometime next year was never really our concern. It was a target and we had a clear pathway to get there. Over time, when we chose to buy back stock was more a function of. As we got further through the third quarter and the, and the big season, you get a little bit more comfortable where the season's going to end up. That was all it was. Okay. And one last one on Europe, again, clearly outperform even your expectation, I believe. So over the past couple of months, as the quarter progresses, where were the big surprises versus what you were expecting again? 12% volume growth. And maybe, I think you were expecting maybe it could be like half of that, a little more. Like, what were the big surprising items there for you? Well, I think we always knew we were going to have a real strong campaign in Europe. You know, we were at a conference in early September and all we did at that conference was tell people, you know, the analyst at this conference put out a note that said the weather in Brazil was really lousy and demand was lousy. And we tried to remind everybody we have other businesses, namely we have a European business that's going to do really well. We did expect Europe to do really well, but I think it was broad based. Broad based across our portfolio in Europe, which is, as I said earlier, is perimeter based and does benefit from tourism. And we just had a very strong season. Okay, thank you very much. Thank you. Thank you. Our last question will be from Jeff Zegoskas of JPMorgan. Third line is open. Thanks very much. In your share repurchase, did you buy your shares radically through the quarter and sequentially? I think your share count is down maybe 150,000 shares. Did you issue shares in the quarter or is there an issuance number for this year? There were no shares issued in the quarter. The shares. How many shares did you buy, Kevin? A million. So we bought shares later in the quarter, Jeff. A little over almost 1.1 million. And they would have all been bought over a couple week period. Yeah. And no share ratio? No. Suresh, as you look in the fourth quarter, has the European strong volume trend continued? We expect Europe to be very firm in the fourth quarter as well. As I said earlier, you should not expect 12% every quarter. But long term compound annual growth rate for the region in the range of 4 to 4.54 to 5%. That's something reasonable to expect. Great. Thanks so much. Thank you. And Al, I think you said that was the last question, so thank you very much, El. And we thank all of you for joining us and we'll speak to you again in 2026. Bye now. Thank you. Thank you. And that concludes today's conference. Thank you everyone for joining. You may disconnect now and have a great day.