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Crown Holdings Inc (NYSE:CCK)
Q3 2019 Earnings Call
Oct 17, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to Crown Holdings Third Quarter 2019 Conference Call. [Operator Instructions] I would now like to turn the call over to Mr Thomas, Senior Vice President and Chief Financial Officer. Sir, you may begin.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Thank you, Joe, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. 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 in our Form 10-K for 2018 and subsequent filings. Earnings for the quarter were $1.36 per share compared to $1.23 in the prior year quarter. Comparable earnings per share were $1.56 in the quarter versus $1.71 in 2018. Net sales in the quarter were down 3% versus prior year largely due to the pass-through of lower aluminum costs and $64 million of unfavorable currency translation. Segment income in the quarter excluding currency was down 3% as improvements in Americas Beverage were offset by lower results in European Food and Transit Packaging. As outlined in the release, we estimate fourth quarter 2019 adjusted earnings of between $0.93 and $0.98 per share.

These estimates assume exchange rates remain at their current levels and a full year tax rate of between 25% and 26%. We currently estimate 2019 full year adjusted free cash flow of approximately $725 million with approximately $450 million in capital spending. And with that, I'll turn the call over to Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you, Tom. Good morning, everyone. I'll be brief and we'll then open the call to questions . As reflected in last night's earnings release. And as Tom just summarized, overall third-quarter performance was as expected. Although the results were mixed across the operating segments.

Unit volume demand remained extremely robust for beverage cans globally, while another poor harvest dampened food can demand in Europe. And in transit, overall volumes were up 0.25% although the mix was unfavorable. The major projects in progress and associated timing are summarized in the release and in a supplemental table to the release, we have provided the currency impact on sales and segment income.

So my comments will focus on currency neutral performance . In Americas Beverage, overall sales units declined 1.5% primarily due to the loss of a customer contract in Colombia . As previously discussed with you. North American volumes were up marginally to the prior year as we remain sold out and are not sourcing cans from other suppliers as in the prior year. We look forward to the commercialization of the third production lines in both the Weston and Nichols plants over the next six months.

In Brazil, can demand remains extremely strong with the market up low double digits. However, we remain sold out, and we did not have enough production capacity to match last year's third quarter unit shipments.

The new plant in Rio Verde is nearing completion and will begin shipping cans to customers over the next several weeks, providing much needed capacity for our customer's growing requirements. In Mexico, volumes were up 7%. Segment income up $10 million in the quarter benefit from numerous cost improvement initiatives offsetting the decline in volumes. Unit volumes in European Beverage improved 5%, primarily from the two new facilities in Italy and Spain offsetting softness in Turkey and the UK. Both Italy and Spain continue to progress through their respective learning curves. However, their efficiencies and cost performance are not yet at the level of the more mature plants in Turkey and the UK, yielding negative mix. And we expect that continuing uncertainty surrounding a looming Brexit and the weakening Turkish economy will again offset expected volume growth in the fourth quarter.

Sales unit volumes in European Food were down 2.5% in the third quarter and after nine months stand at plus 1.6% to the prior year. Well off the 6% growth we had anticipated this year after last year's poor harvest. This year's high heat and poor growing season were particularly notable in two of our bigger food businesses that is in France and the UK. As described to you in July, selling price realization was positive in 2019, but not enough to cover inflationary cost increases and this accounts for the $6 million decline in segment income in the third quarter, as our cost reduction efforts offset the impact from lower volumes. For the year, cost reductions and volume contribute positively, but not enough to offset the negative price inflation. A disappointing result again in 2019, especially when compared to a poor 2018 growing campaign. However, we continue to improve our cost profile through a variety of initiatives, and believe we are well positioned to benefit from future harvests, which are more in line with historical growing patterns. Asia-Pacific benefited from double-digit demand growth in Southeast Asia more than offsetting the volume impact from the closure of the two facilities in China and to remind you of the scope of our Chinese beverage can footprint, we now operate three beverage can lines across three plants as compared to six lines across five plants last year with annual revenues approximating $95 million to $100 million. Not so significant to a roughly $12 billion company. Excluding currency, sales in Transit Packaging were down 2% in the [Technical Issues] and less protective packaging and tooling. Hello?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Joe, are we back on?

Operator

Yes, Mr. Kelly, we are live.

Timothy J. Donahue -- President and Chief Executive Officer

Okay. So sorry about that. Everybody, I'll start over on transit and apologies for that. Excluding currency, sales in Transit Packaging were down 2% in the quarter, representing the pass-through of lower raw materials principally steel. Volumes were up 0.25% in the quarter, although the mix was unfavorable as we sold more strap and less protective packaging and tooling . Segment income down $7 million to the prior year reflects the product sales mix and $2 million related to lower absorption of fixed costs. As the business drives down its working capital levels . Adjusting for absorption, third quarter results were in line with our earlier estimates. Overall demand for our Transit Packaging products has been relatively stable despite declining underlying industrial demand across a variety of sectors; steel, auto, white goods, construction among others. In Tom's estimate for the full year, we have taken a cautious approach to contracted customer equipment shipments as it relates to deliveries in December versus what might be pushed into January.

The business continues to perform well. Capital requirements for the base business remain low and cash generated remains a significant proportion of the Company's overall free cash flow. In non-reportables 4% volume growth in North American food was offset by timing-related shipment delays in our can making machinery division. Aerosol volumes in the US and Europe were level to the prior year in the quarter.

As we identified you at the beginning of the year, two non-operating items currency and pension or [Phonetic] approximately a 50% share headwind for the year. So through nine months about $0.37 per share headwind. Operationally, results had increased versus the prior year but have been mixed across the businesses, which from time to time happens in a company with diversed product offerings. Demand for beverage can remain high and we believe it will remain so for some time. And with several projects nearing completion, our ability to service our customers' growing requirements and our own growth prospects for 2020 and beyond are quite strong. And so with that, Joe. We are now ready to open the call to questions.

Questions and Answers:

Operator

Certainly, we will now begin the question-and-answer session. [Operator Instructions] Our first question is from Ghansham Panjabi from RW Baird. Your line is now open.

Ghansham Panjabi -- Robert W. Baird & Co. -- Analyst

Hey guys, good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Ghansham.

Ghansham Panjabi -- Robert W. Baird & Co. -- Analyst

Good morning. So I guess, first off on Americas Beverage, the decline of $37 million or so in terms of sales basis year-over-year in 3Q. Can you just reconcile that for us. How much of it came from the loss of share in Colombia? A little bit in pass-through. Any insight you can give us there beyond the volumes you already gave us?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, I don't have the, what I can tell you Ghansham on the aluminum. [Indecipherable] what aluminum prices are today versus they were a year ago and you'll get a feel for it because I don't have anything specific other than volume down 1.5%, which is all Columbian cans everything else kind of nets out. The growth in Mexico is netted out by Brazil.

But last year at this time if you took LME plus the premium, we were at about $1.11 a pound for aluminum. Today LME plus premium is $0.95. So you're talking about a 15% reduction in aluminum before conversion, so not insignificant, year-on-year. So more or less, it's, it's a little bit of volume down offset by higher pricing, real pricing and then offset by lower aluminum pass-through.

Ghansham Panjabi -- Robert W. Baird & Co. -- Analyst

Okay, that's helpful. And just, I know you gave us the North American beverage can volume numbers from your standpoint for 3Q, but just based on the CMI data up 3% so far this year kind of based on what you're seeing at this point in terms of discussions with customers and so on. Do you think that 3% type number it's as reasonable sort of base case assumption for industry growth in 2020 in North America?

Timothy J. Donahue -- President and Chief Executive Officer

I do. I think that the reason it's 3%, let's -- I'll make this statement. We were flat because we have no capacity. The reason the market was 3% because the market has no more capacity than 3%. I believe firmly that in the third quarter and even in the second quarter this year that the can market could have been up 5%. We could have been up 5% except, nobody has any more capacity than what you're seeing. So the demand is there -- it is actually the demand is absolutely astounding right now. You've covered packaging now for 20 years. I've been around for 35 years, never seen demand numbers like this, except in the mid-80s. And the only thing holding back our shipments as a Company, as an industry is our capacity to meet customer requirements.

Ghansham Panjabi -- Robert W. Baird & Co. -- Analyst

Okay, awesome. Thanks so much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Anthony Pettinari, Citigroup

Anthony Pettinari -- Citigroup -- Analyst

Hi good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Anthony Pettinari -- Citigroup -- Analyst

In Transit. I was wondering if you could maybe contrast the performance in Americas, which I guess is about half the business versus Europe and Asia. And as you went through the three months of the quarter and into October. I wonder if you could give maybe a little bit more detail on Europe in terms of the trends you're seeing there specifically.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, I mean it -- earlier in the year, remarkably Europe was very stable. The business slowed down a little in September in Europe, but it had very little impact on the income. We were looking at it the other day and high-single digit volume decline yielded less than $0.5 million of segment income decline. So we've described to you before the business is extremely diverse and you need a combination of a lot of factors to move them -- the income numbers up or down in either direction. But it is -- it's been -- income performance has been remarkably stable given what you would expect, whether it's underlying industrial demand across the sectors I mentioned earlier or overall general PMI indices that you're seeing. I know the German PMI right now is like 43 [Phonetic] which is unbelievably low.

I think, we're about 47 [Phonetic] in the US and despite that the businesses -- is relatively stable. Asia has been weak all year principally to steel markets. Australia, India, extremely weak, but again the incomes, the business is diverse enough and it's a different business than it was 10 years ago in terms of other products that we offer protective and equipment. So it's not just so focused on steel as it used to be in the past.

So that's why I said in the prepared notes that you know despite what you would have expected given underlying industrial demand across so many different sectors. The performance has been relatively stable. So we are pleasantly surprised by that. But we are obviously -- we are cautious as as you might be and we're cautious because we can see some of the buying habits from our customers are a little bit cautious.

Anthony Pettinari -- Citigroup -- Analyst

Okay, that's very helpful. And then in North American bev, you're sold out. You're bringing on Weston and the Nichols. Can you just remind us when those will ramp and then given the strong demand that you're seeing. I mean, would you expect to be close to sold-out shortly thereafter those additions come online. And then just regarding this demand that we haven't seen demand like this in 30 plus years. Are there, I don't know, two categories or three categories that have really surprised you are really driving your business that you would have been surprised by a year ago.

Timothy J. Donahue -- President and Chief Executive Officer

So I think in the release, we talk about, we're going to -- Weston should be up early in the first quarter and I would hope that Nichols is ready, early in the second quarter. We will be sold out in 2020 again, even if the plants were fully through their learning curve, we would be fully sold out next year. And where -- that volume is contracted. We are very comfortable and very confident that we're going to be fully sold next year which yields a question later on, are we considering other capacity and obviously, we'll continue to consider a variety of things but understanding that we prefer to have things under contract as opposed to building on spec.

The categories, we've seen the sparkling water category, growing over the last several years and there are -- there are more entrants now in the market, including the big beverage, the big CSD guys that have their own brands of flavored water, flavored sparkling water that are entering the market. And if you are a, one of the smaller independent flavored guys, you might be a little worried about the big guys getting into the market. But in -- in fairness, what it's doing is the large promotional budgets they bring to that category actually pushes, it rises the tide for all the boats in the ocean.

So it's been very healthy. Energy drinks, juices, teas, I mean, it's across everything. I -- what we don't know and I kind of hinted at it in Ghansham's -- to Ghansham's question, what we don't know is how much bigger could the growth be and how many other categories, could we be seeing remarkable growth if there were more cans available.

So there is a move under way and clearly more new products are being introduced in cans. As we've said, than in the past. And so it's a good time to be in the beverage can business.

Anthony Pettinari -- Citigroup -- Analyst

Okay, that's helpful. I'll turn it over.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Arun Viswanathan from RBC Capital Markets. Your line is now open.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Good morning. Thanks, guys.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, hi Arun.

Arun Viswanathan -- RBC Capital Markets -- Analyst

I guess, so first off on European Food, you'd addressed some issues around pricing last quarter, which has been insufficient to offset inflation and potentially some structural headwind there. I guess, has that persisted and what's kind of the outlook looking forward here? I mean, this business was doing kind of $250 million in segment EBIT for a while, maybe down to the $220 million this year, is that kind of the structure, the new level of earnings power that we should be expecting in European Food going forward?

Timothy J. Donahue -- President and Chief Executive Officer

So that -- not on the pricing front, no incremental changes to pricing between the second and third quarter. All the pricing was set at the beginning of the year. Understanding that we were expecting, underlying growth to be 6%. That's only materialized to about 1.5% through nine months. So we didn't get enough growth just given the harvest, so you've got two ways to look at this going forward. Clearly, the results are not satisfactory. We're not happy. You're not happy. I can assure you our folks in Europe are not happy compounded by the fact, since we're not happy. We're making their life really measurable and we're going to continue to do that. Structurally, nothing has changed in that demand for canned food in Europe is not declining as it has in the United States over the last 15 years or 20 years.

There still are a variety of different food products packaged in cans and preferred by consumers in Europe much different market than we have here. What we have is two poor growing seasons in a row and we've not been able to offset inflation with pricing. So as we go into next year, we're going to have to take a real look at appropriate levels of pricing through -- to get the income number back up to the number you just mentioned, which historically it's been there. And so the customers aren't going to like that. They're going to -- but listen, we're not. And this isn't a charity. Right? They have the ultimate pricing power to the consumer. We don't, we have to recover the costs.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Okay. And then as you look at just trying to think about the future here and you cited really robust growth continuing through the next, or for some time. So if you would be sold out in North American beverage next year, even with the two new lines and the industry data is still in that 3% range. I guess, would you be in a position to report numbers in that range? Or would it -- would it be kind of I guess, you'd be up by the amount of the Weston and Nichols line?

Timothy J. Donahue -- President and Chief Executive Officer

So we're adding, we're adding about on a full run rate basis, the plants won't be at full run rate next year, but on a full run rate basis. We're going to add close to 2 billion cans on top of our 22 billion can footprint in North America, Canada, US. So call that 9% and as I said earlier, I firmly believe, because they are under contract that if we were at full run rate, we would sell that entire 2 billion cans next year. And so, we'd be up 9% next year. We underindex the market this year because we're sold out.

So it will be our turn to catch up only because it's basically when capacity comes in by supplier, but let's say we, as the plants come through learning curve and they only come up in the first quarter and second quarter that instead of 2 billion incremental cans, we manufacture 1 billion that's, that's 5%. We're going to be up 5% next year in North America at least.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Okay, that's helpful.

Timothy J. Donahue -- President and Chief Executive Officer

Regardless of what the market does, if the markets is up 10%. We can only be up 5% because we don't have any more cans than that. If the market's up 2%. We're going to be up 5% because we're under contract.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Okay, that's great. And that gets to my follow-up, which is your food can businesses and Signode do provide or Transit do provide quite a bit of free cash. So what's kind of the decision-making process to I guess go out with with more capacity, whether it'd be in North America or elsewhere. I know that you'd like to build on to contract rather than spec, but why not consider greater investments at this point from what you're seeing?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I think just general prudence, right. We've not seen and you've heard me say this. Listen, we are extremely excited about the current conditions in the beverage can market as you are and many others are, but this is something that's not been seen for 35 years in the can business.

This is since the mid-80s and what we don't want to contribute to is an over-exuberance in which we all put too much capacity in and we're faced with a different situation in three years or four years. I firmly believe for the next three years or four years, we have very little risk in that regard. But beyond that, we don't know. So we're trying to allocate capital appropriately without getting too excited and too ahead of ourselves. But my -- how times have changed. A year ago, everybody wanted everybody to delever and be responsible.

Now, you want us to throw capital at it. So I think, we're trying to do this in a measured fashion. We're going to continue to delever. You are right to point out that the food can business and the Transit businesses are the cash cows. They are the providers of the capital that are going to allow us to expand the beverage business, modernize the beverage business to the customers' requirements.

Once that installation is in place, then the beverage can business returns to being a cash cow as well. Right. So we're just trying to do this in a measured fashion. We are committed to delevering, we've told you by the end of 2020. We're firmly entrenched to get back down to 3.5 times leverage, which is where we were at before the acquisition and but I think -- I think we're able to do all that and expand the beverage can business at the same time. But -- but even if we threw more capital at the project starting today, we're still 12 months to 15 months away from more capacity coming on.

So we're evaluating it. Just like everybody else is.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Okay. I'll turn it over. Thanks a lot.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question is from Tyler Langton from JP Morgan. Your line is now open.

Tyler Langton -- JPMorgan and Chase -- Analyst

Good morning, Tim. And Tom, thanks

Timothy J. Donahue -- President and Chief Executive Officer

Good morning

Tyler Langton -- JPMorgan and Chase -- Analyst

Just on your European Beverage, I guess volumes have been pretty solid this year but profits I guess have been impacted by both sort of currency and start-up costs. I mean, do you have a sense as to exactly what those impacts have been sort of when they should lap and just kind of how you think about going into next year?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I think currency, we gave you in the release. Right. So you can see that it's starting, it's $5 million through nine months, it was only $1 million in the third quarter. So it's starting to, we're starting to get closer to where the currency rates were last year. So maybe it's another $1 million in the fourth quarter.

The start-up cost was big impact in the first quarter. It's subsiding through the year that the bigger difference you have now is that the volume as I tried to describe it's -- you guys are not manufacturing guys. So but keep in mind, we're a manufacturing company. So for us it's all about absorption and efficiency and cost performance.

And while the plants in Italy and Spain are rapidly coming up learning curve and they're actually performing quite well compared to their curve. They are not as efficient as the more mature plants that we have in the system. And so we've got two plants in the UK and two plants in Turkey. All four of those plants are fairly large and fairly efficient, but you have lower volumes in those markets for two different reasons Brexit and a weakening economy in Turkey, offset by higher volumes, more than offset by higher volumes from the new plant.

So you just have a -- a negative cost mix right now until we cycle through till one of two or both things happen that Turkey and the UK stabilize and/or the, the time at which the cost performance in the new plants catches up to the cost performance in the more mature plants.

Tyler Langton -- JPMorgan and Chase -- Analyst

Okay.

Timothy J. Donahue -- President and Chief Executive Officer

But again nothing fundamentally wrong with the business. Things are progressing quite well.

Tyler Langton -- JPMorgan and Chase -- Analyst

Okay. Yeah that's helpful. And then just a question on sort of the demand growth. I mean, I guess the strong demand, can you maybe provide some color, is it more being driven right now by sort of new products going into cans just I guess growth of existing products sort of -- sort of in cans, are you starting to see some substitution away from other materials sort of into cans, maybe just provide some color there.

Timothy J. Donahue -- President and Chief Executive Officer

I think it's the prior or what you mentioned it's new products coming into cans. So certainly more new products are being introduced in cans than have been historically. And it's -- the growth of existing products. For example, in the United States, mass beer was up I think 3% in the third quarter.

And so for the last several years, mass beer has been down. So we are starting to see growth in existing products. I don't yet think we're seeing substitution other than new products being introduced more in cans than historically, because we're still seeing, I think we're still seeing underlying plastic growth, just not at the levels that in the past.

So the -- the introductions of new products might be very similar in cans versus plastics, where in the past, it was much more skewed to plastics. But -- but pure substitution from plastic bags back to can, I don't think we're quite seeing that yet. And one of the reasons we're not seeing that is there is no can capacity to meet that potential demand yet.

Tyler Langton -- JPMorgan and Chase -- Analyst

Great.

Timothy J. Donahue -- President and Chief Executive Officer

It could only be because the can industry is limited by the amount of cans, we can supply.

Tyler Langton -- JPMorgan and Chase -- Analyst

All right, thanks so much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question is from Gabe Hajde from Wells Fargo.

Gabe Hajde -- Wells Fargo Securities -- Analyst

Good morning, gentlemen. Thanks for taking the question.

Timothy J. Donahue -- President and Chief Executive Officer

Hi Gabe.

Gabe Hajde -- Wells Fargo Securities -- Analyst

One on Europe Food, after I guess kind of this two years of poor weather, is there any risk that some customers could to go away or I guess AR collectability or anything like that that we should be thinking about and/or might it necessitate you guys having to move some capacity around or something like that?

Timothy J. Donahue -- President and Chief Executive Officer

We look at AR, I don't want to say on a monthly basis because I think we look at it even more often than that, but we haven't seen, we're not yet through the season right. So the collectability for a number of the customers we start collecting in Q4, but we haven't seen any weakness in customer collections as regards your question yet, but we are, we are mindful of that. I don't think, we might have. I know, we have one plant we've talked about rightsizing in the European Food footprint, but we've done so much reorganization in that footprint over the last 15 years. We're actually in a pretty good place as it relates to the industrial footprint. And to do any more than that would limit our capabilities when the volume returns for the next good harvest. So I think, we're in pretty good place. It's really about, we need some volume and then importantly, as I said earlier, we do need price to offset some of the inflationary costs that we've had.

Gabe Hajde -- Wells Fargo Securities -- Analyst

Understood. Thank you, Tim. Switching gears to Transit and always try to give you an opportunity to take a run on our models. It was actually a couple of million better than what I was expecting this quarter. But if I look at TTM EBITDA of around $365 million. I think this is actually holding up pretty well. Given all the headlines that we read, but coming into the year, you were talking about $390 million to $400 million, I think of EBITDA. Couple of questions, one, can you parse out for us, how much of the difference between where we are and/or where we may end up and what you're looking for to FX versus sort of some of the unfavorable mix that you talked about as well as maybe a little bit lower volumes versus again kind of expectations coming into the year.

Timothy J. Donahue -- President and Chief Executive Officer

Yes, so in fair, I could say, FX, but in fairness, we would have modeled the FX. So the $365 million that you're modeling plus or minus you are in the range and that's kind of right about what the performance was in 2017 understanding last year was a record year not making excuses, but just to the point, it's been very stable.

But the biggest -- there's a -- in your model for example, the absorption is probably going to be about $6 million or $7 million this year and just, and I'll explain that very quickly for you, obviously, we're all well aware of. We've talked about today. The decline in our European Food can performance, largely around volume as it relates to harvest. Obviously, the cash flow comes down with that. However, with the growth in beverage, we don't have the ability in beverage to do anything from a working capital standpoint to make up the shortfall in European Food cash flow given the growth that we have in beverage.

So the only place we can go to make up the European Food shortfall from a cash perspective is Transit. So as we rapidly drive down Transit working capital to offset food, there is an under-absorption issue and that's about $6 million or $7 million .

So we're using Transit to fill the hole from European Food on a cash point, not an issue because if you do believe in a slowing economy. You'd rather begin the slowing economy of lower inventories than higher. So it kind of works for us. But the -- the biggest item is volume and we had a remarkably strong second quarter last year, which we didn't match this year. Second quarter this year was similar to the second quarter of '17 and that's the biggest, the biggest reconciling item from last year to this year is the second quarter. We had a normal second quarter not a record second quarter and that revolves around volume. Price has been very stable, demand has been stable, although I will tell you that the mix is a little different.

You know, customers, we are selling equipment and tooling, customers are being very cautious and perhaps they're buying equipment and tooling without all the bells and whistles on it.

They're buying the -- the lighter model as opposed to the heavier model. So there is less margin in that, but. But all in all, it's -- it's, it's stable. It's just not the last year's record number [Phonetic] and generally revolves around last year's record second quarter.

Gabe Hajde -- Wells Fargo Securities -- Analyst

Thanks for all the transparency, Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

The next question is from George Staphos from Bank of America Merrill Lynch. Your line is now open.

George Staphos -- Bank of America Merrill Lynch -- Analyst

Hi, everyone. Good morning, thanks for taking...

Timothy J. Donahue -- President and Chief Executive Officer

Hi George.

George Staphos -- Bank of America Merrill Lynch -- Analyst

How are you doing, Tim? Thanks for taking the questions. Tom, how are you? I want to come back to a question or comment you made about Food Europe and I just wanted to make sure that I interpreted correctly.

Were you suggesting that based on the volume outlook you had in Food Europe going into 2019 that there were certain commercial decisions that were made that in retrospect, you probably could have or should have tried to get different commercial terms or maybe a bit more robust in your pricing, given what ultimately transpired with volume or would it not really have worked like that at all? If you could provide a little bit more detail around that and color that would be helpful.

Timothy J. Donahue -- President and Chief Executive Officer

So we anticipated that volume would be up much more than it actually was up this year. Some of the -- the two large food can suppliers in Europe make up about two-thirds of the market and the balance is made up of variety of smaller regional players from country to country or region to region, and many of those smaller guys were quite aggressive coming into this year just giving how poor the harvest was last year.

I mean, we felt at the time it was appropriate that we don't risk losing any business and that the income shortfall from making a commercial decision would be offset by the volume growth that we would experience as we return to a normal harvest. I think that was the right decision.

I'm not suggesting that we should have done anything different coming into this year. What I am suggesting is that we need to take a much harder look at commercial decisions and appropriately recovering cost through selling price as we enter next year.

George Staphos -- Bank of America Merrill Lynch -- Analyst

Okay, that's clear. I guess, would that then not suggest perhaps you take and this, I know you're always looking at the footprint, Tim. So I don't want to suggest that but does it maybe suggest you take an even harder look at the footprint. I think you mentioned to one of the other questions, there's one facility that you've been looking at.

But why not perhaps be a bit more aggressive from where we are right now in terms of footprint, so that you have the leverage if you need it to get a better commercial outcome than we saw this year?

Timothy J. Donahue -- President and Chief Executive Officer

Well I -- I think, I think if we take a different commercial strategy and we have lower volume but we have higher income and we believe that's the right answer. And that lower volume translates into lower capacity needs, then we'll look at it from that standpoint, but it's. As we look at our, at the demand we have in a normal harvest scenario, we don't really have any excess capacity from specification -- specification region to region.

So as you know, food can specifications are far different than beverage can specifications, but I think there is a variety of things we need to look at and we're going to have to have an understanding, our customers are going to have an understanding that if they expect Crown and perhaps the other large food can supplier to be the leaders in the industry with innovation and performance and other things, they're going to have to start paying for it or we're going to go to a model where we skinny a lot of things down and they don't get us to perform, a lot of things that we performed for them currently.

George Staphos -- Bank of America Merrill Lynch -- Analyst

Understood. I guess my last one on this one. And I'll have one final and I'll turn it over. And again, I forgot who was asking the question, but ultimately, where would you see normalized profitability be for Food Europe. I know, it's kind of a touchy segue [Phonetic] to get into partly because you're now beginning these discussions with your customers, but is in a normal year, normal harvest, I recognize there's always going to be variability in harvest across Europe. Is $250 million, a reasonable place to be from a modeling standpoint if things go normally for you.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Well, I think we were what $265 million or roughly in 2017. So back off.

George Staphos -- Bank of America Merrill Lynch -- Analyst

Correct.

Timothy J. Donahue -- President and Chief Executive Officer

Maybe you back off $15 million or whatever the currency number has been over the last couple of years. I don't really know off the top of my head. It's $12 million this year. So if it's $12 million this year, maybe it was a few last year, so $245 million, $250 million that's kind of a, that's kind of a -- normal is a funny word to use, but let's use -- just use the word normal, that's kind of what you would expect. Can we get back there?

I don't know. We're going to have to, we're going to have to change some things and make sure that our team in Europe and our customers in Europe understand that this is a business and we expect to be compensated for what we do for.

George Staphos -- Bank of America Merrill Lynch -- Analyst

Understood. My last question is kind of a two-parter. As we look at Signode and Transit Packaging and certainly, we're expecting given what's been a bit of a fade in the business, not surprisingly. Is next year, likely to be more of a flat to down year, Tim, based on what customers are doing in terms of mix and order patterns or do you think , given the world that we're in that Signode can actually show an up level of profitability.

And given that, do you still anticipate getting to your leverage goals. The 3.5 times. And in that regard, being able to maybe start buying back some stock as we get later into 2020 . Thank you and good luck in the quarter.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you. I think, it's probably too early to describe any of the businesses for next year . And as it relates to Signode. I think, we've used the word stable to the rights -- to describe Signode's performance this year, relatively stable given what's happening in underlying demand.

But let's. I think, we really need to see. We need to get through the budget process, and we need to understand how fourth quarter demand looks specifically fourth quarter demand right now looks in that business before we comment on next year. Whether we get the 3.5 times and we get the 3.58 times, you might worry about the 0.8 times, I won't worry about it. We're going in the right direction and at that level, we have a much different conversation with the Board, as it relates to capital allocation, which may or may not include more shareholder -- shareholder friendly uses of our cash. But that's the direction we're headed in.

George Staphos -- Bank of America Merrill Lynch -- Analyst

All right, I'll turn it over. Thank you, Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Next, we have Mark Wilde from Bank of Montreal. Your line is now open.

Mark Wilde -- Bank of Montreal -- Analyst

Good morning, Tim. Good morning, Tom.

Timothy J. Donahue -- President and Chief Executive Officer

Hi Mark.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Hi Mark.

Mark Wilde -- Bank of Montreal -- Analyst

Is it possible for either or both of you guys to help us think about the give and take next year between the benefits of having this new capacity in the market versus the start up costs that are going to be involved that all of the different plants. And what's the net benefit look like for next year from an EBIT standpoint?

Timothy J. Donahue -- President and Chief Executive Officer

I'm not -- you're talking about Americas Beverage specifically because that's where the big...

Mark Wilde -- Bank of Montreal -- Analyst

Yeah, yeah.

Timothy J. Donahue -- President and Chief Executive Officer

Big capacity is coming on in two in the US and Brazil. The answer is up and so we inside there. Yes, there are start-up cost inside there, but it's overwhelmed by the contribution from higher volume.

Mark Wilde -- Bank of Montreal -- Analyst

Okay and then just staying on Americas Beverage, Tim, I think that's just a single line plant down in Colombia. And so far, it's a kind of pull the overall segment down by 1.5%, so just that volume is down quite a bit down there. Can you just tell us how you're thinking about handling that situation going forward? Do you need to rationalize capacity, what are your options in Colombia?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

I can -- roughly the volumes in Colombia were down, it's -- I hate to give you numbers. You're talking about a 170 million units off a base of 9 billion, that's roughly 1.5% and so the volumes in Colombia, were down more than 50% in the quarter compared to last year because it's a -- up until now it's, or the last couple of years, it's been a one customer market, it is a joint venture, we are a joint venture partner with -- with a bottler, who has another relationship with other global bottlers and global beverage beer company.

So we're going to run the plant and we're hopeful that our partner and his partners continue to promote cans and grow the promotion of cans for their businesses and -- and over time, we will fill the plant back up. But it's up in for the last 30 years, it's been a one customer, one customer market, there are other -- there are other brewers now in the country.

So but, you know with the brewers, so.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. Just turning to capital allocations since you brought it up, you know in the past, you've talked about bulk share repurchases, but also the possibility of a dividend. Can you just give us your -- kind of your current thinking on the relative merits of the two?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Well I think you get the leverage back in a 3.5 times range. And you're generating circa $700 million of free cash flow after the minority dividend. You've got the ability to do a variety of things. And there are -- there are a whole list of companies out there that pay a dividend, buyback stock, make acquisitions from time to time inside -- inside all those numbers that $700 million of free cash flow is a lot of money.

I think we have the ability to do a lot of things. So we'll continue to -- to evaluate that and as we move toward the -- the leverage goal that we have, we'll -- we'll discuss that at the Board meeting, but there should be no reason why you can't do all the above.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. All right last one from me, I just wondered, you've had some contracts that got redone for this year. You've got some contracts that are being redone for next year in Americas Beverage, is there any way for you to just help us size sort of what the impact of that might be as we go into 2020?

Timothy J. Donahue -- President and Chief Executive Officer

There is, but I'm not going to. I don't mean to be cheeky but I don't think it's helpful for us to do that. What I will tell you is that you see significant improvement in segment income in the Americas Beverage segment from '18 to '19 and you will see significant improvement from '19 to '20, maybe some of that's price.

Certainly a lot of it's going to be volume from the new facilities and we're going to be -- continue to become more cost effective, where we really did a good job on cost this year whether it was rightsizing our freight not sourcing cans from others, performance improvement in Nichols, and we're going to continue to do that. I don't know if the Americas Beverage Group, it's going to be up $40 million or $50 million this year compared to last year. And would it be up $40 million, $50 million next year. I don't know, but it will be up a significant number. So I'll leave it at that.

Mark Wilde -- Bank of Montreal -- Analyst

Okay, fair enough. Good luck [Technical Issues] fourth quarter.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question is from Debbie Jones from Deutsche Bank. Your line is now open.

Debbie Jones -- Deutsche Bank -- Analyst

Hi, thanks for taking my question.

Timothy J. Donahue -- President and Chief Executive Officer

Welcome back.

Debbie Jones -- Deutsche Bank -- Analyst

Thank you very much. I wanted to start by asking about the machinery business, you mentioned some of the revenue will not coming through in 3Q. Does that shift into 4Q or 2020? And then I was hoping you could just talk about that business in general, given the growth we're seeing in the industry. I imagine, it's going to drive some growth in that non-reportable segment going forward.

Timothy J. Donahue -- President and Chief Executive Officer

Yes. So we, as you know, we have a can making machinery business in the UK and we, while we don't make all the equipment from front to back on a beverage can line, we make much of the equipment front to back on a beverage can line and -- and so we source equipment for ourselves from that subsidiary.

And many of our competitors also source equipment from that subsidiary depending on price competition as you would expect versus the other major supplier and versus the equipment they might have in a facility, if they're trying to match equipment on one line to another line within a facility.

So as with any machinery business, delivery date sometimes slip either because we slip in our process or the customer isn't yet ready for the equipment because they might have a building manufacturing delay or some other delay, but I think, we will pick up the shortfall in Q4 and some of that slips into next year.

But much of the shortfall, we will pick up in Q4.

Debbie Jones -- Deutsche Bank -- Analyst

Okay, thanks. And then my second question, I know it's been addressed on prior calls, but if we think about the growth in the industry, especially in Europe. In North America that could occur in the next couple of years. Do you have enough metal supply in let's say three years to five years.

And you know, what -- what kind of steps do you have to take to ensure that number one, and then two, what are the considerations you have to make for some of the suppliers, outside of the US and Europe, whether it would be kind of trade considerations or CO2 emissions and things like that.

Timothy J. Donahue -- President and Chief Executive Officer

There is plenty of metal out there. Now, depending on whatever trade deal we cut with China, some of the metal may carry a tariff and some may not. We can currently source metal from a variety of countries that are not tariff impacted. So there is plenty of metal out there. The other thing is as we've talked about before.

I think, some of our aluminum suppliers and suppliers of other products are looking at the growth in the business and they want to be rewarded as well. So it will mean that conversion costs for from ingot to can sheet is going to be more in the future and that's going to have to be borne by our customers because again as I've said, they have ultimate pricing power to the consumer, we do not. We -- we can't absorb those kind of costs and but there's plenty of metal available.

Debbie Jones -- Deutsche Bank -- Analyst

Okay, thanks. I'll turn it over.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Adam Josephson from KeyBanc Capital Markets. Your line is now open.

Adam Josephson -- KeyBanc -- Analyst

Tim and Tom, good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning,

Adam Josephson -- KeyBanc -- Analyst

Tim, one on just kind of your portfolio of businesses. I know, you're getting asked more about perhaps emphasizing one over the others and specifically of beverage cans and how are the kind of the sexy, fast growing business, your closest bev can competitor is trading at a very high multiple, and so some investors want you to double down on that business. And I think, de-emphasize one or more of the others, as you pointed out earlier, though circumstances can and do change pretty quickly.

So can you talk about your portfolio mix and how you think about keeping at the same or changing in the future. Based on what you're seeing today.

Timothy J. Donahue -- President and Chief Executive Officer

Well, look, first thing I'd say is that I -- I don't think we want to become a single product line company. There was a single product line company in the beverage can space and they were acquired a couple of years ago and the mandate is not to sell the company.

The mandate is to -- is to increasingly try to generate returns and grow the business and reward shareholders in that regard. I don't think, it's very difficult to be a single product line company, because as you rightly summarize, things can change and if they change in that one business, things don't look too good. But we talked about earlier, the business is diverse. From time to time you are going to have some ups and downs across a variety of the businesses. Fortunately, we have two businesses in Food and Transit which require very little capital and generate a mountain of cash, and that provides a lot of stability to the overall enterprise. I think anytime you generate cash, things are OK. Things can be a lot worse, if you're not generating cash. You generate a lot of cash. Things are pretty good. To Mark's question, we talked about what we might do with all that cash in the future. It's a great problem to have, what we might do with all that cash in the future, but we're going to continue to look at the allocation issue into the beverage can business globally with more capital. We are trying to do it in a responsible way.

And we're trying to do it in a way in which we get the appropriate returns and the -- and the capacity is -- is appropriately spoken for before we put it in. And we'll continue to look at it. Beyond that, I don't have much to say.

Adam Josephson -- KeyBanc -- Analyst

Just one more on that, Tim. How do you think about the incremental return profiles in each of those businesses? Because obviously bev cans are growing the most quickly now, but they also require by far in a way the most capital.

Timothy J. Donahue -- President and Chief Executive Officer

No, it kind of, it kind of depends on what you sell the cans for. If the selling price is not very good and the returns are not very good. You know, one of the challenges you have right now, it's, it's really easy to make decisions in beverage cans, because you're looking at the demand profile going forward and you're thinking price is going to continue to get healthier and healthier that can change and you look at your food can business and you see what's happening in the food can business and you -- you talk yourself out of doing anything incremental in food cans because you can't believe you might improve price there.

So you've got to take a balanced view and -- and remember, you're in a business and you're trying to always remain relevant in the businesses you are in, which from time to time requires you to do things that may not have the returns that you would otherwise like but are quite necessary.

Adam Josephson -- KeyBanc -- Analyst

I appreciate that. And just one on CapEx for next year. While we're on the subject. Tom, so you're guiding to $450 million this year, based on the projects you have in the pipeline. Do you think it will be up much or even down for that matter. Next year, I know it's early days.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

I think, it's inappropriate for us to comment at this point, because we haven't had the budget approved yet by the Board. I would say, it's not going to be lower than that.

Adam Josephson -- KeyBanc -- Analyst

Right, right. Thank you, Tom.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Thank you.

Operator

Next, we have Chip Dillon from Vertical Research. Your line is now open.

Timothy J. Donahue -- President and Chief Executive Officer

Chip, are you there? Joe, I think, we've lost, Chip.

Salvator Tiano -- Vertical Research. -- Analyst

This is Salvator Tiano filling in for Chip. How are you?

Timothy J. Donahue -- President and Chief Executive Officer

Okay, go ahead.

Salvator Tiano -- Vertical Research. -- Analyst

Great. Great, thank you very much. Just a little bit to wrap up here. How essentially as we look a little bit in Brazil, Southeast Asia, can you provide us little bit with the same data you provided in the Americas, where you mentioned, you have kind of contracted volumes of around 5% and you could see 9% total growth, can you just provide some clarity with regard to the other regions?

Timothy J. Donahue -- President and Chief Executive Officer

Yes listen, In Brazil, the market in Brazil, this year, I think is through nine months is up 13% or 14%.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

16%.

Timothy J. Donahue -- President and Chief Executive Officer

16% through nine months. And this is, this is after many people, many of the analysts have remarked that they don't see can growth in Brazil continuing. And so again another unbelievable year.

I think, we're up through nine months, maybe only 5% or 6% only because we're capacity constrained, so we're going to bring a new line on that has the ability to produce a little over 1 billion cans and depending on how quickly we get the line up and how we get through learning curve. We're going to sell it all. And so we could be up on the order of 10% to 12% next year, if we can set -- if we can make all the cans. I know one thing, we're going to sell every can we can make. Southeast Asia, I think, Southeast Asia, again up high single digits or low-double digits through nine months this year and, and that's our business and depending on the market, the country you're in, whether it's Vietnam, Cambodia, Singapore, Malaysia, Thailand, Indonesia, Myanmar, you name it, they're all different by country.

But again, no reason to believe that the markets aren't going to continue to grow at very healthy rates and that we're not going to continue to participate in that healthy growth rate.

Salvator Tiano -- Vertical Research. -- Analyst

Great, thank you very much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Neel Kumar from Morgan Stanley. Your line is now open.

Neel Kumar -- Morgan Stanley -- Analyst

Hi, good morning. Thanks for taking my question.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning

Neel Kumar -- Morgan Stanley -- Analyst

We've seen several announcements of Stillwater Brands moving into cans. I was wondering, if you just talk about what kind of impact that can have on the industry volume growth next year. Do you think the supply chain can handle a large scale shift?

Timothy J. Donahue -- President and Chief Executive Officer

I think, I've answered that already. The supply chain in 2020 cannot handle a large shift, where even a small shift. We are, we are all rapidly looking at ways to add capacity and trying to understand if this is real and how much capacity, we add, but there is limited capacity for us to handle a large shift.

We are quite happy to handle it. There are roughly 100 billion beverage cans in North America. There's probably 150 PET bottles in North America, but if you look at -- at the volume of liquid in bottles versus cans, it's even a greater distortion and that's because you have 2 liter and 20 ounce and for the most part, we're 12 liter [Phonetic] and 16 ounce in can, so the volume disparity is greater than the 50% unit disparity.

So we are, as an industry, we are sold out currently for the products we have. So there is no way we could handle. I mean, I'm repeating myself, I apologize. There is no way we can handle a large scale shift and we're all trying to understand how we can handle that more appropriately, if we believe it's real. But certainly there is an extremely large opportunity there as marketers and fillers of beverage products understand the sustainability benefits of the can versus the competing products.

Neel Kumar -- Morgan Stanley -- Analyst

Thanks, that's helpful. And then just in Transit Packaging. Could you just give us a sense of how backlogs are tracking currently versus, let's say, the end of the second quarter or beginning of the year.

Timothy J. Donahue -- President and Chief Executive Officer

Well I think the backlogs are -- are a little lighter today than they were six months or nine months or 12 months ago, but they're not shocking lower as I -- I keep using the term relatively stable, and I say that because listen, we're as cautious or is concerned, as you might be given what's going on in the market and -- and there are other packaging companies that are in the industrial packaging space that may or may not see the same trends that we're seeing, but we're cautious, but things are a little bit more stable than we anticipated.

So that's -- that's positive and, but as I said, it's, we really need to get through the fourth quarter before I can give you any more color, where so far things are pretty good. I just am -- we're a little cautious because we don't know what's going to happen with -- with equipment pull here in the fourth quarter compared to the first quarter of next year.

Neel Kumar -- Morgan Stanley -- Analyst

All right, thanks, that's helpful.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Brian Maguire from Goldman Sachs. Your line is now open.

Brian Maguire -- Goldman Sachs -- Analyst

Hey, good morning, Tim. Good morning, Tom.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Brian.

Brian Maguire -- Goldman Sachs -- Analyst

Just wanted to follow-up on some of the questions that were already asked about the leverage and progress on getting there and the portfolio, just sort of combining the two, it sounds like you're happy with the portfolio. The way it is. In general, I was wondering if there is any -- I know Signode itself was a bit of a roll-up and maybe any unique businesses within there that might make sense to try and bring to market seems like maybe the end markets are a little depressed but multiples are still pretty good on those businesses like you mentioned it throws off a lot of good cash flow. Interest rates are low. Just wondering if -- if there is any like select smaller pieces within it that might make sense to try and monetize and accelerate the deleveraging.

Timothy J. Donahue -- President and Chief Executive Officer

Well if it's smaller, it doesn't really accelerate the deleveraging. I mean if you sell a business for $200 million. Okay. It reduces debt by $200 million. But on a leverage basis, when you lose the associated income with it, it doesn't move the needle a whole lot on your leverage. You might go from 4 times to 3.97 times. So I think what we're really looking at is a business which when you look historically back was assembled mainly by a very large industrial conglomerate. But in this regard, in this silo that they had Transit Packaging, they had a -- they had a strategy that they were trying to put together businesses which made sense in terms of offerings to customers to protecting packaged goods for Transit, so in a lot of regards, there's -- there are lot of synergies in terms of commercial strategies that perhaps were not exploited well by the prior owners. But we're going to try to do, now that doesn't mean that there isn't a product or two that you wouldn't look at and say that we don't really need this, but it's, we're focused on running the business as best we can and delevering, we're not going to get sidetracked by trying to spin a business off that might generate $70 million of sales proceeds, because in the near term, that's not, that's not what's really important.

Brian Maguire -- Goldman Sachs -- Analyst

Okay and just a question on the impact of the lower aluminum scrap prices. I was just wondering if that was material on the Americas EBIT or margins and any expect is like full-year impact from that you could quantify?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I think it's in the number, but it's easier to point it out, when your numbers aren't going the direction you want. We've got some businesses where the numbers aren't going the direction we want, so we point out some of the things for the reasons. But in a business like Americas Beverage, where everything is going well. It just gets absorbed and where we've got -- demand is very strong, the commercial aspects are better than they have been in the past and -- and we made significant progress on the cost performance this year, so no real sense to talk about something that's just getting absorbed by all the positive things. That's just -- positive things generally absorb negative things and so that you want more positives than negatives. So I don't really have a quantification, yeah, there is some impact in there but it's being overwhelmed by all the good guys.

Brian Maguire -- Goldman Sachs -- Analyst

Yeah and impressive performance given that headwind. Just last one from me, just wanted to trying to make sure I understood the movements on the free cash flow. I think you, I think Tom, you explained that the sort of the, maybe the weaker EBITDA result in Europe Food would be offset by maybe extracting some added working capital out of Transit. Just wondering, as we think about bridging to 2020, would we expect that to consume some cash back as you restock early next year to kind of rebuild that ?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

No, not necessarily. I think will -- we'll be at this point kind of looking flattish on working capital next year, but too early to say.

Timothy J. Donahue -- President and Chief Executive Officer

Too early to say. But Brian, why don't we just say this on cash flow next year. Let's start with our number this year. Let's hope we have some EBITDA improvement across all the businesses that I'm not saying, it's too early, but working capital flat and then the swing factor is going to be capital. How much capital that we believe is appropriate and does the Board agree that it's appropriate to throw out this growing beverage demand issue and that'll be the swing factor, but I think we firmly believe we're going to have an EBITDA growth next year. And so with working capital flat, you would expect higher cash flow next year, it will depend on CapEx.

Brian Maguire -- Goldman Sachs -- Analyst

Okay and that makes lot of sense. All right, thanks for the time, guys.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you. Well, Joe, it sounds like that's the last call. So thank you, Joe. And that will conclude the call for today, thank all of you for joining us and we'll speak with you again in February. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 63 minutes

Call participants:

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Timothy J. Donahue -- President and Chief Executive Officer

Ghansham Panjabi -- Robert W. Baird & Co. -- Analyst

Anthony Pettinari -- Citigroup -- Analyst

Arun Viswanathan -- RBC Capital Markets -- Analyst

Tyler Langton -- JPMorgan and Chase -- Analyst

Gabe Hajde -- Wells Fargo Securities -- Analyst

George Staphos -- Bank of America Merrill Lynch -- Analyst

Mark Wilde -- Bank of Montreal -- Analyst

Debbie Jones -- Deutsche Bank -- Analyst

Adam Josephson -- KeyBanc -- Analyst

Salvator Tiano -- Vertical Research. -- Analyst

Neel Kumar -- Morgan Stanley -- Analyst

Brian Maguire -- Goldman Sachs -- Analyst

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