Good day, and welcome to the Silgan Holdings First Quarter 2025 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Alex Hutter, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. Joining me on the call today are Adam Greenlee, President and CEO; Philippe Chevrier, EVP and COO; Bob Lewis, EVP, Corporate Development and Administration; and Kim Ulmer, SVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made on this conference call may be forward-looking statements. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company and, therefore, involve a number of uncertainties and risks, including, but not limited to, those described in the company's annual report on Form 10-K for 2024 and other filings with the Securities and Exchange Commission. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statements. In addition, commentary on today's call may contain references to certain non-GAAP financial metrics, including adjusted EBIT, adjusted EBITDA, free cash flow and adjusted net income per diluted share or adjusted EPS. Reconciliation of these metrics, which should not be considered as substitutes for similar GAAP metrics can be found in today's press release and under the non-GAAP Financial Information portion of the Investor Relations section of our website at silganholdings.com. With that, let me turn it over to Adam.

Thank you, Alex, and we'd like to welcome everyone to Silgan's first quarter earnings call. Before we get into our discussion on the quarter today, I want to take a moment to welcome Philippe Chevrier, Silgan's Chief Operating Officer to the call. Since joining the company in February, Philippe has integrated into the Silgan culture and has already contributed to the success of our organization. We're excited to have Philippe on the Holdings team.

Thank you, Adam, for the warm welcome, and it is a pleasure to join our analysts and investors on today's call. This has been an exciting quarter personally and professionally. Having had almost 90 days to become more fully acquainted with the company and our businesses, I continue to be very impressed with the caliber of our people at Silgan. The effectiveness of our operating model, the intense focus on execution, and the strong position we enjoy as long-term partners with our customers across all our businesses. The unique structure clearly drives an opportunity culture in the company that is built upon a sense of accountability and naturally creates opportunities for profitable growth with our customers. I have been impressed by the passionate people I've met and the high level of efficiency in our operations and manufacturing technology. I'm excited to be part of this talented team and look forward to contributing to Silgan's continued successes and growth.

That's great. Thank you, Philippe. Now turning our attention back to Silgan's performance. Our company is off to a very strong start in 2025 as our team delivered another quarter of record results that reflect the success of our long-term strategic efforts, the efficiency of our operating model, our focus on meeting the unique needs of our customers, the resilience of our chosen end markets and products, and the power of our capital deployment model. The continued normalization of volume conditions in our food and beverage markets highlighted the success of our strategic initiatives as we delivered double-digit revenue growth and nearly 20% adjusted EPS growth in the first quarter, primarily driven by strong organic growth in each of our businesses, our cost savings actions, and the contribution of the Weener acquisition. Our Dispensing and Specialty Closure segment continues to capitalize on our momentum in the marketplace, our market-leading innovation and the strength of our long-term customer relationships by delivering our fourth consecutive quarter of double-digit organic growth in dispensing products. The Weener acquisition integration is on track, and we continue to see incremental opportunities to leverage both our commercial presence and our expanded product offering to drive accelerated growth well into the future as a result of this combination. Our teams are executing well on both the synergy capture for the Weener acquisition and our multiyear cost reduction initiative in our legacy businesses. In Metal Containers, our volume growth continued to accelerate in the first quarter, driven by strong demand for both pet food and soup products. Consumer demand for our customers' pet food products continues to grow at a mid-single-digit rate, driven by pet population growth and mainstream premiumization in our core markets for cats and small dogs. In soup, consumers continue to appreciate the value that these highly efficient, low-cost meal occasions provide, and we have commercialized several new customer product launches in the category to drive growth. In Custom Containers, our business delivered record operating performance and experienced continued success in the marketplace as the commercialization of contractual business awards, more normalized market conditions, and growth in pet food products drove low single-digit volume growth and nearly 250 basis points of adjusted EBIT margin improvement. With our strong start to the year and momentum into the second quarter, we remain confident in our ability to achieve our objectives in 2025 and deliver record results. Our long-term contractual arrangements and localized manufacturing philosophy of sourcing materials and producing packaging in regions where the products are consumed insulate us from much of the recent uncertainty in international trade policy that has impacted the financial markets. The deliberate construct of our portfolio of products and end markets, our long-term partnerships with our customers, and our low-cost global manufacturing footprint continue to uniquely position Silgan to outperform through all stages of the economic cycle. Additionally, our unwavering focus on meeting the unique and at times evolving needs of our customers and aiding those customers to solve any challenges they face through uncertain times solidifies our company as the long-term packaging partner of choice to the world's most recognizable and most successful brands. Our expectations for the remainder of 2025 remain largely unchanged. We continue to expect the Containers and Specialty closures organic volume mix to grow by a mid-single-digit rate in 2025, driven by another year of high single-digit growth in our dispensing products and improved mix. Our metal containers are on track to grow by a mid-single-digit percentage, driven primarily by mid-single-digit growth in pet food and a partial recovery in fruit and vegetable pack volumes. In Custom Containers, with the annualization of the new business that ramped up in 2024 as well as additional new business awards in 2025, we continue to expect volumes to grow by a mid-single-digit percentage this year. We remain focused on the opportunities that lie ahead for the company in both the near and longer term and confident in our ability to execute our plan. Our customer intimacy model continues to set us apart in the marketplace as we compete and win in the markets we serve. After several years of market disruptions, we are confident that the success of our strategic growth initiatives will be more evident in our results in 2025 as our organic growth and the power of our capital deployment model drive record results. With that, Kim will take you through the financials for the quarter and our estimates for the second quarter and the full year of 2025.

Thank you, Adam. As Adam highlighted, we reported another quarter of record financial results that were near the high end of our expected range in the first quarter, driven by strong performance from the Weener acquisition, organic growth in each of our segments, and the success of our cost reduction plan. Net sales of approximately $1.5 billion increased 11% from the prior year period, driven primarily by the addition of the Weener business, which closed in the fourth quarter of 2024, and organic volume growth in all segments. Record total adjusted EBIT for the quarter of $158.3 million increased by 17% on a year-over-year basis, driven by the inclusion of Weener Packaging, strong organic growth, and the benefits of our cost reduction efforts resulting in record adjusted EBIT in the dispensing and specialty closures and Custom Container segments and higher adjusted EBIT in the Metal Container segment. Record adjusted EPS of $0.82 increased $0.13 or 19% from the prior year quarter. Turning to our segments. First quarter sales in our Dispensing and Specialty Closures segment increased 25% versus the prior year, primarily as a result of the contribution from the Weener Packaging acquisition, which added approximately $126 million during the quarter, and a higher volume mix of 4%. The improvement in volume mix was driven primarily by a double-digit increase in organic volume of dispensing products during the quarter, resulting in favorable mix. Record first quarter 2025 Dispensing and Specialty closures adjusted EBIT increased $21 million or 28% versus the prior year period as a result of the contribution from the Weener Packaging acquisition, which added approximately $17 million and favorable volume mix. In our Metal Container segment, sales increased 2% versus the prior year as a result of a 4% increase in unit volumes during the quarter due to mid-single-digit growth in pet food and strong demand for soup. Higher volumes were partially offset by less favorable price mix due to the strong growth in smaller cans for pet food markets, which drove a less favorable mix. Metal Containers adjusted EBIT increased 10% primarily as a result of favorable price cost and higher volumes. In Custom Containers, sales increased 2% compared to the prior year quarter driven by a 2% increase in volumes as a result of the commercialization of new business awards. Custom Containers adjusted EBIT increased 22% as compared to the first quarter of 2024, primarily due to favorable price cost, including mix, and higher volumes. Looking ahead to 2025, we are confirming our estimate of adjusted EPS in the range of $4 to $4.20, a 13% increase at the midpoint of the range as compared to $3.62 in 2024. This estimate includes interest expense of approximately $185 million, a tax rate of approximately 24%, corporate expense of approximately $45 million, and a weighted average share count of approximately 107 million shares. At the midpoint of our 2025 adjusted EPS range, we will exceed our prior records of adjusted EBIT, adjusted EBITDA, and adjusted EPS achieved in 2022. From a segment perspective, we are confirming our prior expectations of a mid-teen percentage increase in total adjusted EBIT in 2025, driven primarily by a greater than 20% increase in Dispensing and Specialty closures adjusted EBIT, a mid-teen percentage increase in Custom Containers adjusted EBIT, and a high single-digit percentage increase in Metal Containers adjusted EBIT. Based on our current earnings outlook for 2025, we are confirming our estimate of free cash flow of approximately $450 million, a 50% increase from the prior year as earnings growth will be partly offset by higher cash interest and tax payments, with CapEx of approximately $300 million. This estimate also includes approximately $20 million of cash costs to support our cost reduction program. Turning to our outlook for the second quarter of 2025. We are providing an estimate of adjusted earnings in the range of $0.98 to $1.08 per diluted share, a 17% increase as compared to adjusted EPS of $0.88 in the prior year period. The year-over-year improvement in adjusted earnings in the second quarter is driven primarily by the inclusion of Weener Packaging, higher volumes in the Dispensing and Specialty closures and Custom Container segments, and the ongoing benefits of our cost reduction program. Dispensing and Specialty Closures second quarter volume mix is expected to grow by a mid-single-digit percentage. Volumes in the Custom Container segment are expected to grow by a mid-single-digit rate. Metal Containers volumes are expected to be flat to prior year levels in the second quarter, with the majority of the volume improvement for the fruit and vegetable pack occurring in the peak harvest months during the third quarter. That concludes our prepared comments, and we'll open up the call for questions. Rachel, would you kindly provide the directions for the question-and-answer session.

And we will take our first question from George Staphos with Bank of America.

Hi, everyone. Good morning. Thanks for the details. Hope you're doing well. My question to start is just really around volume. The question, I know you've probably received because you've received it from some of us on the phone and certainly that we get from investors. Why you remain comfortable with the volume guidance that you've been providing in light of the fact that portions of your business, especially in metal, are not the most rapidly growing, Adam. And recognizing that a lot of the volume, just because of the nature of business, is seasonally weighted to the second half and the third quarter, and we have the overlay certainly of kind of a potentially weaker economy as a factor. So can you go through the one, two, three in terms of why you remain or maybe have changed your view on the outlook. Secondly, on volume. Secondly, can you talk if at all whether you're seeing customers changing their purchasing patterns, doing any tactical moves within the supply chain to get ahead of any potential risks in terms of tariffs and the like, how that's factoring into your business. As you mentioned earlier in the call, I apologize that I joined the call late - and I'll stop there.

Great. Thanks, George. Maybe just a couple of things, getting back to kind of your first question with overall volume. So nothing has changed for us. We continue to expect mid-single-digit volume growth in each of our operating segments for 2025. And I think it's important to understand the details of that. As we just talked about, we've just delivered our fourth consecutive quarter of double-digit growth in dispensing products. So very pleased with how the business continues to perform. I think we've talked a lot about in the higher-end segments that we participate in. We are winning a disproportionate amount of the new product launches in those categories. So really right in line with our expectation. It's driving mid-single-digit growth for that segment, and we continue to feel really, really good about that. Our innovation agenda and our customer relationships are all driving outperformance versus the market and versus competition. I think when you move over to Metal Containers, it's really important to reiterate that about 50% of our overall unit volume falls into the pet food category. And I know we've talked about that many, many times, but we've been a required supplier for 30-plus years and have decades of experience and understanding the dynamics of that market. Having another quarter where we've delivered mid-single-digit growth in our pet food products is critically important to what we've done, and I think I'd probably throw in a comment here that our strategic growth initiatives include a significant capital deployment in our dispensing products, and you're seeing that growth fall through. Our other strategic growth initiative around the Metal Containers business is the investments we've made over time to continue to support our customers' growing pet food product demands. We've just continued to deliver results year after year in the pet food segment of our business. So feeling really good about that. It's half of our volume. I'll dovetail just a second, George, and start to answer a part of your second question. For our volume in the quarter, we didn't see any unusual buying activity. Remember, half of our volume is in pet food. And for the most part, those are aluminum cans. Our aluminum volumes are supported primarily by North American suppliers. So just take that there's nothing to do from a tariff or a supply chain perspective on half of the volume. I'll come back to the other side in just a second, but wrapping up on custom containers, we talked a lot last year about two specific large new business awards. We've commercialized those in 2024 as we cycle over and get the full year annualization of those awards, and that's a bit of a driver for our growth. It's very clear that we continue to win in that market. We've said for a while that we believe the market has been underserved from a customer service perspective, and that's what Silgan brings to the table. And then I'll jump back to the other part of the question, George, just going back to customers buying activities. Food and beverage is a big part of what we do. We've said, I think, on this call, roughly 75% of our products fall into that consumer staple category. So these really, for the most part, are nondiscretionary items that consumers are making purchase decisions on. We feel comfortable and confident in our outlook. We've got excellent relationships. When you get to the food can side, remember, so much of that business is on site or near sight with our customers. We're returning back to the historic days of having quite a bit of transparency and clarity between us and our customers and the supply chains that support them having success in the marketplace. So George, long question, probably even longer answer, so I apologize for that, but hopefully, the detail was helpful.

No. I appreciate it, Adam. Quickie, and I'll turn it over, just out of respect for everybody. Just Weener, sounds like it's going well. Any - what would be the one learning you've had that makes you comfortable on the deal model? I'll leave it there. Thank you.

Sure. Look, Weener is going really well. We're very pleased with the acquisition. As you know, George, we've known that business for a long time. So not a whole lot of surprises. It's probably a confirmation in our thesis for dispensing products that there are greater than market growth rate activities available for the right business, for the right innovation, and for the right customer service model. And so we talked on the last call, we had some opportunities to invest in, and some new capital supporting customer growth. We did that at the end of last year. That is part of the beat that we had in Weener in Q1 as we're realizing the volumes that we were able to invest in at the end of last year. So it's been really good. It's right in line with what we were hoping for, and it's a really strong business.

Thank you very much.

Thank you. We will take our next question from Ghansham Panjabi with Baird.

Thank you, operator. Good morning, everybody. Adam, I just want to go back to your comments to George's question. Obviously, you laid out guidance assumptions for 2025, which seems very comparable to what you said when you reported Q4, it seems like a lifetime ago. But just given the sequence of events that have occurred, which undoubtedly create more uncertainty from a macroeconomic standpoint, maybe you can answer the question as it relates to customer new product activity and if you've seen any change there across the different regions and businesses that you sell into?

Look, I think we're at the forefront of innovation and new product development with our customers. Maybe the one thing that I would give you, Ghansham, that I can think of that has changed versus Q4, one of our large soup customers actually initiated two new product launches for 2025 in the first quarter. And as a large CPG, those two launches fall into their top 5 of total spend for new product launches in 2025. So if anything, I'd tell you, we're feeling more comfortable with our soup volume in particular. We had a good first quarter, as you heard. As we look to the rest of the year, we think there's potentially some opportunity there. And then when you think about the, but let me just jump to dispensing really fast. Again, a little longer pipeline with our dispensing product. So no knee-jerk reaction to the uncertainty that maybe the market has felt here in the first quarter. To think about kind of the fragrance and beauty market, we're catering to a specific set of consumer demographics that are just simply less elastic with the products that they purchase. The utility we provide to our customers at that high end of prestige and luxury fragrance and beauty. We haven't seen any slowdown in the development activities and innovation requests from our largest customer. So again, I understand the question. And I think what I would tell you, we were confident on the last call. I think our confidence is unchanged as we look at the rest of the year, given the intelligence and knowledge we have about our businesses.

Okay. Fair enough. And then in terms of the impact of tariffs, obviously, the direct impact seems pretty low for you. But in terms of what your best estimate is in terms of the DSC segment, do you have a sense as to how much crosses borders? You mentioned some of the categories like luxury fragrances, et cetera, those get shipped around. What would that equate to? And then just separately, what do you expect net debt to EBITDA to end 2025?

Sure. I'll pass it to Kim for the second part of that question. But for the impact of tariffs, Ghansham, I mean it's a good question for DSC specifically. And there just isn't that much cross-border activity within that business. And it's back to what I mentioned earlier, our manufacturing philosophy, we like to buy raw materials, make it, and sell it in the same geography. So you sort of take out the noise of all this cross-border activity that we've been dealing with. So in DSC, there's not a whole lot of impact that we see on tariffs, in fairness, specifically on fragrance. A lot of that product is built in Europe and shipped around the world. But you talk about the price point of those products. And I think, again, as I mentioned before, it's just a different consumer demographic that we're addressing. What we have seen is several of our customers on the high-end beauty and fragrance side of the business have actually gone out with price increases to reflect any additional inflation from the tariffs. So again, we're feeling comfortable that we've got a good understanding of the impact for Silgan; as you mentioned, there really isn't much of an impact financially to Silgan. We will pass through the inflation to our customers, and I'll say that irrespective of the segment that we're talking about. And I think that's kind of in summary, Ghansham, how we're feeling about tariffs at this point. We don't believe it's driving any different purchase activity for our customers.

And on the leverage ratio side. So on a long-term basis, our range is 2.5x to 3.5x, we would expect to be towards the low end of that range by the year-end, assuming there are no acquisition opportunities. And that's driven primarily by our strong earnings, as talked about, including the Weener acquisition and a strong free cash flow of about $450 million for the year-end. So I think from us, as you've heard us say before, with our range of 2.5x to 3.5x when we get to the lower end of that range, we would expect to be deploying cash on them.

Okay. Perfect. Thank you, guys.

We will take our next question from Matt Roberts with Raymond James.

Hi. Good morning, everyone. And welcome, Philippe. Good to hear you. First question, if I may ask on Metal Containers. I believe you said flat volume expectation in Q2? Or is that EBIT? And if it is volume, you know that there were new product launches in soup; there is a harder comp in Q2 and metal. Maybe you could just talk about the split between pet and food cans in Q2. And just generally what you're seeing on each of those. It seems like some of your peers have also put up strong results in metal food cans as well. So just getting your view there.

Sure. Yes, you've got it right. So volume for Metal Containers was expected to be flat in Q2. So the one thing I would mention, Matt, we're working through the details. There may have been a slight pull forward of some aluminum can volume on the pet food side into Q1 as one of our customers was dealing with a labor issue in one of their facilities. So it doesn't materially impact anything. But as they were preparing for those issues that have now been fully resolved, there might have been a little bit of volume that got brought into Q1. But outside of that, not a whole lot of activity. So as we - you're right, it's a pretty tough comp as we look at last year's volume. Soup, in particular, was up quite a bit last year in the second quarter. So as we look at the year-over-year comps, we're expecting nice growth again in pet food. What we'll see is our veg and fruit volumes; that's going to happen more in the back half of the year. And I'm saying back half intentionally because that's when the products packed. It will be stronger in Q3. We'll see how late the pack runs this year. But given that in some pack volume in Q2 last year, it's just the timing of a couple of our specific markets. But nothing out of a surprise or out of the realm of what we were expecting as we came into the year for Q2.

Okay. That makes sense. Thank you, Adam. And maybe on pet performance, there continues to impress, and our customers seem to corroborate that view. In pet, are you seeing any changes in the promotions in that category? Or maybe even just more broadly, what you're seeing in terms of the promotional environment overall? Thank you again for taking the questions.

Sure. Yes, great question. We talked about on the last call that one of the examples that we talked about was where promotional activity had been successful was on the wet pet segment and our canned pet food. We continue to see that. So in the first quarter, there was strong promotional activity. And I think one thing that I want to bring in that's on a broader base. It's not only our customers promoting the product; it's retail establishments promoting product as well. So I think we've been a beneficiary of that now for a couple of quarters. We're anticipating that to continue. It's a big part of our customers' plans and profiles for 2025. I think broadly speaking, where we see that targeted promotional activity, we are seeing volume follow that. We have a couple of instances where maybe, to jump over to Dispensing and Specialty Closures for a quick second, we're seeing very good promotional activity in certain areas of the business in items like isotonics and sport drinks. We're seeing a mixed bag where we've got several customers with very aggressive promotional activity. We're seeing volume follow the promotional activity and grow, and we're seeing others that didn't promote quite as aggressively as maybe what we would have liked them to do. Therefore, they're not seeing the growth that they expected. So isotonics is the one point where I'd probably tell you it's just a little mix. Customers that are targeted and aggressive, they are driving growth, and where that's not happening, the growth is not following. Outside of that, across the businesses, targeted promotional activity is driving growth throughout all of Silgan.

Helpful. Thank you, Adam.

Thank you. We will take our next question from Gabe Hajde with Wells Fargo Securities.

Adam, Kim, Bob, good morning. I had a question on import tariffs a little bit from an angle, Adam. Based on your conversations with some of your fruit vegetable customers, has there been any discussion around Chinese food not making its way into the U.S. and onto shelves? And I know, again, like it requires planning ahead and planting, et cetera, but maybe that leads to actually a better-than-expected, I guess, harvest in 2025 and better planting in '26.

Yes. It's a really interesting question, Gabe. As you very well know, we're putting crops in the ground right now. So it's the time that the contract acreage has concluded their planting crops. They are planning right now for the pack season of this year. Back to imported filled goods; that was an issue, a large issue, call it a year ago, one of the large retailers in the U.S. market for their private label brand had brought in field goods from Southeast Asia and actually had a social media campaign that went against that change in their private label brand. They did move back to purchasing canned vegetables for the U.S. market from U.S. producers. So that was a good thing last year. I think that continues a bit this year. I think your question is spot on. There probably is some upside in the event that there is a tariff on filled goods coming in from any other region outside of the U.S. into the U.S. market. And really that should be the benefit to the packers of fruit and veg in the U.S. market. Obviously, we're a little underweight to the category, but to the can makers, that should also be a benefit as well. We don't have anything that says that's what's happening, but it's one of the opportunities on our list as well.

Okay. And then in pet food, it seems like maybe just depending on which scanner data you look at, the trend could be decelerating or disappointing if you're talking about through traditional channels. Do you have a sense for how much pet food goes through eCommerce at this point? And is your, to the best of your knowledge, I know it's tough to say once it leaves your factory, but are you overweight or underweight or under indexed to the overall eCommerce channel in pet food specifically?

What I tell you, and it's a little bit of a loose number, Gabe, but call it 25% of the market goes through kind of an eCommerce channel, and now it's very loose after that. So what I tell you is we are significantly overweight in the market for wet pet food products. I assume that our market share sort of correlates to that 25% of the market that goes through an eCommerce channel. In fairness, our small dog and cat products ship very efficiently. So, my guess is we're appropriately represented through eCommerce, and you wouldn't see a big change in our share of that particular channel. Again, we think that we've got a winning solution with our largest branded customers who are represented in private label that really think about us as the big brands that are driving the volume growth into this segment on a continued basis.

Understood. Last one, maybe a little bit of an in-the-weeds question on corporate. I think, Kim, you reaffirmed around $45 million for the year, a bit elevated in the first quarter. You guys run on a mostly decentralized, fully allocated, I guess, reporting basis for Weener specifically, I'm thinking about. So, was there, is there any added corporate expense as it relates to Weener? And if not, that means that Bob is really busy.

Bob is very busy. And yes, so from our perspective, it's all in here at the holdings office and it was about $45 million, $5 million higher as a result of higher corporate development activity in the first quarter. So, our expectation is going forward that we're going to be at a total for $45 million, as we mentioned in the opening remarks.

Gabe, to your point, I think that the SG&A and the corporate costs associated with Weener reside down in the business. So, what Kim's describing is our corporate activities here at the holdings level.

Thank you. We will take our next question from Anthony Pettinari with Citi.

Hi, good morning. This is actually Bryan Bergmeier sitting in for Anthony. Thank you for taking the question. Maybe just one housekeeping item to start. After acquiring Weener, do you have an earnings sensitivity to changes in FX or could you share maybe what your guidance is assuming in terms of FX rates for the euro at this point? I think Silgan's about 25% revenue from Europe now. So I just wanted to check on that?

Great. Look, just from an FX perspective, what we have, typically what we do is we kind of hold a current rate spot rate through the end of the forecast period. So that's where we are. We're kind of taking the end of Q1 spot rate and we hold that for the balance of the year on all currencies. So specific to the Euro as well. And really it's kind of a 113, 114 number. I'm not sure exactly which one. From a sensitivity perspective, we talk a lot about the fact that we've got a natural hedge that we like to have local debt and local currency that offsets any exposure to FX. So we can come back to you on that one. I'll just say the exposure sensitivity is pretty limited from an FX perspective.

Okay, got it, got it. Makes sense. And then maybe just on the M&A landscape. Adam, you've been with Silgan for a while. In your experience, do you think these heightened levels of economic uncertainty can create more or less appetite from sellers? Do you think people want to cash out, or do interest rates become kind of a roadblock for Silgan, even perhaps just kind of your general thoughts here, just kind of given the macro backdrop? Thank you. I'll turn it over.

Yes, sure. Look, I've been here for a little over 20 years. Bob has me beat by a stretch, so we'll ask his opinion too. But from my perspective, what I tell you is that I think the opportunity for corporate development and M&A activity is probably as great as it's ever been in my time with Silgan. I also would say that I think we are more advantaged in these kinds of environments because of our ability to be deep into our market, so we understand the businesses we're talking about. We are quick and thorough in our diligence, we have access to capital, we've got tremendous cash generation in our legacy businesses, and we are ready and able to move when the time is right. So much like with the Weener transaction, very competitive process, we thought we were advantaged from the get-go, and there were a lot of reasons for that. But I feel like we're sort of in the same position today. And I'll throw it over to Bob for any other comments he might add.

Yes, I think Adam's answer was spot on. I think if you recall back to the last earnings call, we spoke pretty optimistically about our ability to get a deal done. I still certainly believe that level of optimism is warranted, particularly from an internal perspective. Right. For all the reasons that Adam just laid out, we feel like we've got our arms around the Weener acquisition, and we're well on our way to that integration and on track with the synergy capture. Our leverage outlook, as we talked about, is really good, trending to the lower end, having just completed nearly a $1 billion acquisition and getting back inside the range pretty quickly. As Adam indicated, we've got some strategic candidates out there that we've identified. We've begun doing our internal work there. So should they become available, we believe we can move really quickly. So all of that is still intact. I think the only thing that's changed from the last call is a bit of the economic political backdrop. And the only difference that that makes to us is whether or not some of those targets choose to come to market. Otherwise, we're armed and ready to go.

Thank you. We will take our next question from Mike Roxland with Truist Securities.

Yes, thank you for taking my questions and congrats on the quarter and the progress. Adam, you've spoken at length about volumes outlook. Just quickly trends you're seeing thus far in April. How are order books shaping up for May? Is everything consistent? I'm sure the answer is probably going to be yes, it is. Mike, move on to the next question, but figured I'd throw it out there anyway in terms of how things have trended in April and what the orders look like for May thus far?

Sure. And again, we're about 30 days into the second quarter, and so what I tell you, the momentum we carried into the quarter continues on, and we're right in line with what we expected for the month of April. And so, our quarter is off to exactly the start that we were expecting and that we were looking for. Each of our businesses continues to perform. Weener continues to perform. So again, hopefully, it comes across in the conversation. There's a level of clarity and confidence here in what we're doing and how we're doing it that's translating to continued growth for the company. We're looking forward to the remainder of '25 as well.

That's great. Any early read on May thus far in terms of order books?

Yes. Obviously, it's order book - yes, it's order book activity. And again, I start with DSC and Dispensing and Specialty Closures, very strong as we prepare for the summer months. We're now heading into kind of the beverage season that we have our hot-fill beverages and Dispensing and Specialty Closures. Metal Containers right in line with expectations, nice month already in pet food, and expect it to continue. We talked a while back, Mike, about our customers' investments and manufacturing capacity expansions; they're running those lines better this year than they did last year. And that's great news for us that they've improved their efficiencies as well. That's part of the support for the year-over-year volume increase in pet food products. And then in custom containers, again, I'll just say the team has done a great job. They continue to win in the marketplace, multiple new business awards, nothing quite as big as we had last year at this point to announce. But winning every single day in that business, again, that just flows through to the bottom line, and it flows through to the volume conversation. So right where we wanted to be in Q2 and feeling confident in the delivery of Q2.

That's great color. Thank you, and good luck in 2Q.

Thank you.

We will take our next question from Arun Viswanathan with RBC Capital Markets.

Thanks for taking my questions. Congrats on the strong quarter there. Apologies if I missed this. I think the volume expectations you provided last time were mid-single digits for each segment. I think you may have moderated that a little bit, but could you just review what your volume expectations for the full year are now again?

Sure. No problem. And we did talk about that a little bit earlier. Just for clarity, no change in our original expectations for the year. So mid-single-digit volume growth in each of the segments. And again, I think with a really strong first quarter, it's confirming our belief and our confidence in the full year as well.

Thanks. Regarding free cash flow, I understand your guidance is set at $450 million for this year. Previously, you indicated there might be around $50 million in working capital drags that won’t occur next year, which would put you at a base of $500 million for next year. Is that still your outlook? Additionally, considering your comments about M&A, is that still the main priority for utilizing that cash flow? Could you possibly pivot to share buybacks, especially if market opportunities for deals aren't available?

Sure. So yes, our assumption is our free cash flow is $450 million this year. That includes really strong earnings growth, as Adam has been talking about, both organically and from Weener. We have a lower rationalization spend year-over-year, so $30 million last year for $20 million run rate savings. And then the reverse this year, $20 million of spend for $30 million of run rate savings. We are assuming a lower working capital benefit versus the prior year, but it is still a benefit to our numbers. We do have higher interest and cash tax again from the Weener acquisition and then our profit from that perspective. Capital expenditures are expected to be what we had provided as guidance last time, and our working capital is, as I mentioned, a little bit less of a benefit this year than last year.

And so I think the normalized free cash flow maybe to that very point is about $500 million, and that's how we continue to think about the business. So does that answer your question, Arun?

Yes. And just as far as the deployment, what would you say priority is there?

Yes. And clearly, I mean, I think you heard Bob mention as well, we're comfortable with the pipeline of activity in our corporate development activity. So we obviously put M&A as a priority for our capital allocation. And again, we are incredibly disciplined, as I think you've seen over the years with our 41 acquisitions and how we evaluate and integrate and bring on M&A opportunities into the company. Outside of that, sure, we've got the usual levers that we can pull for capital allocation, whether it's returning cash to shareholders, whether it's paying down debt, but a clear preference to continue to grow out the portfolio in a very deliberate way as we've done in the past M&A activity.

Arun, if I could just add one thing to that. I think we've got a long history of discipline and patience here about how we deploy capital. And yes, while we would love to get an M&A deal done, and we think that's how we've created a lot of value for shareholders on an ongoing basis, we've also been disciplined and patient around how we deploy capital. I don't think there's anything changed in that strategy, and we'll go where we need to go relative to the capital deployment. But I think given where the leverage is at year end, we still have the ability to read the tea leaves relative to the M&A market, and we're going to do what's right for shareholders and the returns therefore.

Thank you. We will take our next question from Jeff Zekauskas with JPMorgan.

Thanks very much. Propylene values have come down pretty sharply. Does that give you a benefit in your Dispensing and Specialty Closure business?

Jeff, regarding resin pass-through, I want to start with custom containers since that's been our focus for a long time. We have worked hard over the years to reduce our exposure to shifts in resin costs and pass-throughs, and I can confidently say we have nearly eliminated this lag in that business. However, in our Dispensing and Specialty Closures segment, we typically see that the pass-throughs of resin changes take a bit longer due to our ongoing investments and expansions. We are actively working to reduce these resin pass-through lags whenever possible and as quickly as we can. To address your question, there is indeed a slight lag effect in this segment, but overall, it has a minimal impact on our business. If propylene continues on the recent downward trend, it would provide a slight advantage to the company.

And as far as the Weener acquisition, when you look at the first quarter results on a pro forma basis, how did you do in terms of volumes and operating profit?

For the Weener acquisition, really...

In other words, versus the pro forma results from last year?

Yes. So I mean, a, Silgan performed really well; b, Weener performed really well as two separate entities. Both grew versus the prior year. And again, I think for Weener specifically, the ability that we had to put some capital into play to support customer growth, that is indeed driving not only volume growth at Weener but also bottom line growth as well. So versus our models, Weener came in slightly ahead of where we were expecting as we came into the year, Jeff.

Okay, great. Thank you so much.

Thank you.

Thank you. At this time, we have no further questions. I would now like to turn the call back for any additional or closing remarks.

Great. Thank you, Rachel. I appreciate everyone's interest in the company and look forward to reviewing our second quarter results towards the end of July. Thank you.

This does conclude today's call. Thank you for your participation. You may now disconnect.