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Crown Holdings and Bemis look ahead to bright 2013

By Joe Whitworth , 01-Feb-2013

Crown predicted strong unit volumes in beverage and Bemis expects to push ahead after a year of re-organising the business, as both firms reported their Q4 and full year results.

Crown said it expects a recovery in its food can unit volumes after poor weather and sluggish economy despite announcing a review of its UK and Ireland manufacturing and business support facilities this month.

Bemis suffered volume decrease due to the closure of nine plants in four countries as part of a strategic review linked to its takeover of Alcan in 2010, but said its manufacturing footprint now better matches their growth strategy around packaging for food safety and sterility.

Crown in tough times

Crown Holdings’ net sales for the full year were $8.47bn compared to $8.64bn in 2011, reflecting $243m of unfavorable foreign currency translation and the pass through of lower material costs which was partially offset by 5% growth in global beverage can volumes.

Segment income in 2012 was $895m compared to $953m in 2011.  The decrease in 2012 was due to 2011 inventory holding gains not recurring and reduced profits in the European three-piece steel packaging businesses. 

Asia focus

During the fourth quarter of 2012, the company acquired an aluminum beverage can and end production facility in Dong Nai Province, Vietnam and also acquired a controlling interest in Superior Multi-Packaging Ltd. (SMP). 

The acquired Dong Nai facility, which has one beverage can and two beverage end lines, is located northeast of Ho Chi Minh City and will be combined with Crown's existing Dong Nai facility, which is adjacent to the acquired site. 

SMP, with annual sales of $130m, produces metal and plastic containers for the paint, chemical, petrochemical, marine and edible oil industries at its facilities in Singapore, China and Vietnam.

John W. Conway, chairman and chief executive officer, said: "While European economic conditions remain challenging, net income per share before certain items and free cash flow performance met or exceeded the prior year.

"We look confidently ahead to 2013 and expect higher free cash flow, increasing productivity and contribution from our 2012 beverage can capacity additions, and the realization of benefits from our recent restructuring actions in Europe to continue to create increasing shareholder value.”

Bemis report

Bemis said for the full year 2012, US Packaging net sales of $3bn represented a decrease of 2.3% compared to 2011 but acquisitions increased net sales by 0.8%.

US Packaging segment operating profit for 2012 was $366.7m, or 12.1% of net sales, with facility consolidation program costs negatively impacting results during each period.

Lower net sales in 2012 reflect generally lower unit sales volumes of packaging for certain non-barrier packaging, partially offset by increased unit sales volumes of barrier packaging for products such as refrigerated foods where safety is a requirement.

Substantially all of the savings generated from the facility consolidation activities in 2012 benefited the US Packaging segment, with the last production transfers to other plants expected to occur by the end of Q1.

Global Packaging fall

In the Global Packaging segment for 2012, net sales of $1.5bn represented a decrease of 5.7% compared to 2011.

Acquisitions increased net sales by 2.4%, which was more than offset by a 9.7% decrease in net sales related to currency translation.

Global Packaging segment operating profit for 2012 was $59.9m, or 3.9% of net sales, compared to $112.6m of net sales, for 2011.

Henry Theisen, Bemis president and chief executive officer, said: “We expect recent sales mix improvements to be sustainable as we continue to drive volume growth in barrier packaging.

“In total, unit sales volumes in 2013 are expected to be consistent with 2012. We are on pace to achieve the cost savings associated with our 2012 facility consolidation program.”