Crown Holdings, inc (CCK) Q2 2021 Earnings Call Transcript

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Crown Holdings, inc (CCK 1.02%)
Q2 2021 Earnings Call
Jul 20, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning and welcome to Crown Holdings Second Quarter 2021 Conference Call. [Operator Instructions] Please be advised that this conference is being recorded. I would like to turn the call over to Mr. Thomas Kelly, Senior Vice President and Chief Financial Officer. Sir, you may begin.

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

Thank you, Harley, and good morning. With me on today's call is Tim Donahue, President, and Chief Executive Officer. If you don't already have the earnings release, it is available on our website at crowncork.com. On this call as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release, and in our SEC filings including in our Form 10-K for 2020, and subsequent filings.

Earnings for the quarter were $0.95 per share compared to $0.94 in the prior year quarter. Adjusted earnings per share increased to $2.14 in the quarter compared to $1.33 in 2020. Net sales in the quarter were up 34% from the prior year primarily due to increased volumes across all segments, favorable foreign currency translation, and the pass-through of higher material cost. Segment income improved to $395 million in the quarter compared to $250 million in the prior year primarily due to higher sales unit volumes including recovery in many locations affected by COVID in last year's second quarter.

As outlined in the release, we currently estimate third quarter 2021 adjusted earnings of between $1.90 and $2 per share. This estimate includes the results of the European Tinplate operations through August 31st. We are increasing the midpoint of our full year adjusted earnings guidance from $6.70 per share to $7.35 per share again assuming the sale of the Europe Tinplate business closes at the end of August. Our expected adjusted tax rate for the full year remains at 24% to 25%.

I'll now turn the call over to Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you Tom. Good morning to everyone and thank you for joining us this morning, and our continued best wishes for the continued health, and safety of you and your families. As reflected in last night's earnings release, the company recorded another strong quarter for the three months ended June 30, 2021 and despite numerous transitory headwinds such as supplier, and transportation delays, COVID lockdowns, and cost increases, our global associates continue to rise to the challenges supplying our customers with high quality packaging products in a safe and timely manner.

Demand remained strong across all product lines, and geographies, and importantly the company continues to convert this growth into record earnings. Average segment income from continuing operations over the last four quarters, or last 12 months June 2021 is approximately $100 million per quarter higher than the average of the four preceding quarters or LTM June 2020, with approximately $60 million of that income growth found in the Americas Beverage segment, clearly a step change in our earnings outlook. We look forward to commercializing significant new capacity in the second half of this year into next to take the next step change up.

The results of the European Tinplate operations are now shown as discontinued. Had the business been included in continuing operations, LTM June EBITDA would have approximated $2.1 billion. Before reviewing the operating segments, we remind you that delivered aluminum in North America is approximately 65% higher today than at this time last year. LME and delivery premium are contractual pass-throughs, so reported beverage revenues reflected both the volume increase, and the higher aluminum cost. As last year's second quarter was the so called COVID quarter, we will also provide beverage growth percentages for the first half of 2021 versus the first half of 2019 to give a bit more information perhaps relevance related to our beverage can unit volume growth.

In Americas Beverage demand remained strong across all the markets we serve with overall segment volumes up 18% compared to the second quarter of 2020. First half '21 versus first half '19 volumes advanced 19%. As described previously, we expect demand will continue to outweigh supply for the foreseeable future. Commercial shipments from the first line of the company's new beverage can plant in Bowling Green, Kentucky commenced in June with shipments from the second line scheduled to begin in September. The third line in Olympia, Washington and the second line in Rio Verde, Brazil are now scheduled for an early fourth quarter start-up.

As previously announced, the company will commercialize five new can lines in 2022. New two line beverage can plants are being constructed in both Uberaba, Brazil; and Martinsville, Virginia along with a second can line being installed in Monterrey, Mexico. Additionally the company announces today that it will construct a new two-line beverage can plant in the Southwestern United States with commercial shipments commencing late second quarter of 2023. Customer commitments have already been secured for the plants' production capacity.

Unit volumes in European Beverage advanced 28% over the prior year second quarter, and 14% for the first half compared to the first half of 2019. Income reflects contribution from the volume growth, which was recorded throughout the segment. Asia-Pacific recorded 15% volume growth in the quarter, and 8% for the first half versus the first half of 2019, as most operations across Southeast Asia were able to grow despite numerous COVID lockdowns and movement control orders. We do expect both Crown and customer operations to be subject to various and intermittent COVID lockdown measures throughout the balance of the year.

Commissioning will commence at the new plant in Vung Tau, Vietnam in September with customer shipments beginning in October. Results in Transit Packaging were significantly higher than last year, and in line with our expectations, as strong demand for transit products and solutions mirrored the surge in overall industrial activity. The business did well to navigate transportation delays, cost increases, and supply shortages, and is well-positioned for continued earnings growth as these conditions gradually ease. We expect earnings growth in the back half of the year to approximately approximate first half growth.

Demand remained firm across North American food and aerosols along with the beverage can equipment making businesses. In summary, a record first half for the company. New capacity was commercialized during the quarter, and significant new capacity will be commissioned over the back half of the year. Importantly, we continue to convert growth into expanded earnings and cash flow. Segment income, and adjusted earnings in the first half up 50% to 60% over the prior year, and leverage at 3.6 times after repurchasing $300 million of company common stock is ahead of plan. As Tom discussed, we have raised full year guidance, and the expected closing of the Tinplate sale still remains in the third quarter.

And with that Harley, we are now ready to take questions. Thank you.

Questions and Answers:

Operator

Certainly. [Operator Instructions] The first question is from Mike Leithead from Barclays. Your line is open.

Michael Leithead -- Barclays Capital, Inc. -- Analyst

Great, thanks, good morning guys, and congrats on the quarter.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Michael Leithead -- Barclays Capital, Inc. -- Analyst

Tim, I think you touched on some of the supply chain disruptions that you overcame in the quarter. I was hoping you could talk a little bit more about where you're seeing that? And is it quantifiable how much you maybe left on the table or missed out on this quarter because of some of these disruptions? And does that just get pushed into the third quarter or just any way to kind of help us think through that?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, so I would say that I think you're all well aware of there are container shortages globally, so getting container -- suppliers getting containers to move product around has been a challenge. There are -- with the rapid restart in the economy both here, and in Europe, component manufacturers are overwhelmed, and so their ability to manufacture components for assembly for us. For example, in our beverage can equipment making business and/or the Transit businesses, a little bit delayed. Construction, steel, other construction products whether it's lumber, cement, drywall, all of that in high demand, and a bit delayed, so I don't want to characterize. I mean, clearly there is -- the biggest impact we had in earnings, in Transit would have been in the Transit business, and maybe that's a handful $5 million, or $6 million.

It probably gets pushed into the next several quarters not just the back half of the year, the next several quarters. There is a limitation as to how much our teams -- if we received everything we were awaiting on tomorrow, there's still a limitation on how much our teams can process it one time as well, so that will take a little while. But given the performance, and the trajectory of the overall company in each of the individual businesses, I'm not overly concerned about it. We are in the business of providing service to our customers whether that be high quality products, or service, and so you always hate to tell the customers they're going to have to wait or turn customers away. But they're generally -- they're hearing it from all their suppliers, and we're hearing it from many of our suppliers as I expect many companies are.

Michael Leithead -- Barclays Capital, Inc. -- Analyst

Great. That's helpful color. And then maybe a follow-up question for Tom. I was hoping could you give us how much the pass-through of aluminum and other input materials boosted sales year-over-year in the quarter? I was just hoping to get a cleaner look at overall incremental margins of the business?

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

Yeah, I don't have that in front of me Mike. I can follow-up post call on that.

Michael Leithead -- Barclays Capital, Inc. -- Analyst

Got it. Thanks guys.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Arun Viswanathan of RBC Capital Markets. Your line is open.

Arun Viswanathan -- RBC Capital Markets LLC -- Analyst

Good morning. Thanks for taking my question. Congrats on the strong results. I guess I just wanted to understand maybe to get your thoughts and perspective on some of the scanner data. So we've obviously seen some conflicting reports on volumes, and those are up against some tough comps. So when you think about your own kind of beverage can volumes are obviously up nicely year-on-year, where would you expect those volumes to kind of I guess shake out over the next couple of quarters? Would you expect similar kind of percentage gains within your own system? And again, could you help us kind of understand maybe, or maybe just offer your own perspective on what we're seeing the scanner declines as well? Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, so we provided you the -- not only the second quarter volumes versus the second quarter of last year. And I don't want to say it's not relevant, but clearly the second quarter of last year had a large event that none of us anticipated at that time making the comparisons were easy to share, that's why we gave you the first half of '21 versus the first half of '19. You get a better picture of perhaps -- it forces you to extrapolate what growth is because it's over a two-year period, but nonetheless is extremely significant especially for a packaging business.

The growth-- we continue to expect growth across the businesses, all of the businesses. Perhaps the Asia business will be a little slower depending on some of the COVID lockdowns, but we expect significant growth through the back half of the year. It will not be at the second quarter levels, because the second quarter last year was so depressed in certain markets, but significant growth. We are still turning away unfortunately in Europe and the Americas -- we are still turning away customer requests.

We are still in boarding cans in the United States, not quite at the level of last year, but fairly close, and demand remains high. So I understand some of the scanner data may have some of you worried. I think I'm not sure that scanner data includes all retailers. And when it doesn't include all retailers especially the largest retailer in the country, you need to take that -- you need to try to find another way to measure it. But I can tell you where our company sits, and within our industry what we're hearing from our customers, they are desperate for cans. We are desperate to get as much capacity up and running as quickly as we can. And so the growth outlook for us remains very strong.

Arun Viswanathan -- RBC Capital Markets LLC -- Analyst

Okay, great, thanks. And as a quick follow-up, maybe I can just ask a question on capital, and cash. So you will be exiting this year at a relatively high rate of capex, and obviously at your Investor Day you kind of laid out a plan, and outlook for capital from here on. But you also have some new commitments as far as dividend, and potentially some stock buyback actions. So could you just kind of review the priorities for cash used at this point, and where you expect to kind of finish the year on net debt and leverage? Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

I think what we've said before is -- leverage, we'd like to be in the 3 to 3.5 times, and depending on how we see capital requirements going forward, that will determine whether or not we're at the higher end of that range, or the lower end of that range. I think we should be comfortably within that range by the end of this year, and it will allow us to buy back a significant amount of stock. Obviously, we've initiated a dividend.

We're going to -- the intention is to continue to pay the dividend and depending on capital requirements going -- so I think the leverage is going to be where we want it by the end of the year especially after the Tinplate sale and the piece that moves around is how much stock you buy each year. So in other words almost all of the cash flow -- free cash flow we generate each year will be used for dividends and share buyback. One thing I'll say, we've got, I think some of you fellows that have been covering the industry for a longer time than some of the newer fellows and some of the newer investors on the buy side who are unfamiliar with the cash flow characteristics of a packaging company, especially a Metal Packaging company, you are not so comfortable at higher levels of debt.

We have tried to maintain and we still maintain we never had a leverage problem. And as you can see, even with buying $300 million of stock before the proceeds from Tinplate the leverage is 3.6 times so leverage is not an issue for a Metal Packaging company. You may not like the time it takes us to get there, but we're fully confident we're going to get there and we're going to generate the cash. Now that we're there, we're going to buy back a lot of stock.

Arun Viswanathan -- RBC Capital Markets LLC -- Analyst

Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Kyle White of Deutsche Bank. Your line is open.

Kyle White -- Deutsche Bank Securities, Inc. -- Analyst

Thanks. Good morning Tim and Tom, congrats on the quarter.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Kyle.

Kyle White -- Deutsche Bank Securities, Inc. -- Analyst

Just wanted to walk through the guidance for the full year the raise, specifically on the back half, kind of get to about 26 EPS rates for the back-half, just wondering how much of that is driven by having European Tinplate results for July and August? How much is driven by some of the repurchases you've made in the quarter and then just how much is driven by underlying business growth? Thank you.

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

Yeah, I mean, so the European Tinplate business the two months is worth about $0.20, so then the residual is effectively everything else you mentioned. Improvements in the underlying business, net of any -- anything going the other way.

Kyle White -- Deutsche Bank Securities, Inc. -- Analyst

Got you. And then I wanted to talk about Europe. You announced the -- some new capacity here in the U.S. You haven't really announced any new capacity in Europe, while other competitors appears to have. Are you concerned at all that you might be losing share in that region? Is it just a function of the markets you're in and the customers you have and maybe not growing as fast or is it just you'd rather allocate the capital to better markets such as Americas and Asia-PAC?

Timothy J. Donahue -- President and Chief Executive Officer

No, I think it's just a matter of timing and don't go to sleep on us, that's all I'll say. So we have -- with the exception of the one market over there that we don't participate in, we participate in the balance of the Western European markets. So, Crown at the appropriate time will make those decisions and make those announcements. But no, we're fully confident in our platform in Europe and the platform's ability to offer continued growth to the company.

Kyle White -- Deutsche Bank Securities, Inc. -- Analyst

Got it. Thanks. Good luck in the balance of the year.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

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

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

Hi, everyone, good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, George.

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

Thanks for the details and congratulations on your progress so far. I wanted to come back to some commentary from last quarter and see what if any effect we should consider for the rest of the year in 2022 from your comments. So last quarter you said, you were worried a little bit about a pull forward of volume, accelerating volumes and that was a reason why sequentially you are looking for a downtick in 2Q versus 1Q. As it turned out that was not the case, you had a better quarter sequentially.

Do we still have to worry about that pull forward or are you less concerned about that in terms of the back half of the year? And stretching a bit, recognizing it's not fourth quarter, do you think that given what you're seeing from customers from your capacity plans and your ability to allocate capital that you should be able to grow through the dilution in '22 considering European Tinplate won't be part of the portfolio.

Timothy J. Donahue -- President and Chief Executive Officer

So I think -- we had this discussion last quarter and I understand the question George. We're sometimes as baffled by the outperformance as you are, and as I said last time that the reason why you're not overly ecstatic with it is it could go the other way and then that's a more difficult conversation. Having said that, I would say as we look forward to the back half of the year, the amount of available capacity that we have to have an upside earning surprise is significantly limited from where we were in the first quarter or even at the end of the first quarter. And then we are -- it's the Asian COVID situation across several of the countries. There were some lockdowns in Q2 but not to the extent that we were anticipating.

We do anticipate that across Asia and some of the markets we're going to get more lockdowns. We have lockdowns in two jurisdictions right now for the next three weeks. So that will have an impact. The other thing is transitory inflation. We'll get the inflation back and the formulas next year but there is some inflation in the business. And having said that, we're earning through it with the growth we have. Looking at the fourth quarter and in the next year, do we have enough growth to earn through the dilution from Tinplate? I think one of the ways you're going to earn through the dilution from Tinplate is buying back a mountain of stock and it's not clear to me, George, that we're trading on our P/E multiple anyway. So whether we post $7.50 or $7, it's not sure to me that anybody is really looking at an appropriate P/E multiple for our company, and I'd leave it at that.

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

Fair enough, fair enough, Tim. And for the record, not that it really matters for this call but -- I mean, your performance was better than expected as was your guidance relative to our model for it's worth but just for the record, what are beverage company marketing folks telling you about the outlook for new categories, new product innovation, in other words, is there something else that can take the baton or at least keep up in the race with spiked seltzers? What's your view on that on next categories if there are any, or do we have to worry just about or expect just new flavors out of spiked seltzers to be the driver of can growth over the next couple of years?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I know one, I don't want to talk about it, because I don't want to expose the idea, which is specific to one customer or perhaps a group of customers but I think we should expect that the marketers are going to continue to try to develop. Doesn't mean they're all going to be successful but they're going to continue to try to develop new products and new flavors, new mixed cocktails across a variety of -- whether it's real alcohol based or some kind of mash of alcohol mixed with a variety of flavors, be it more healthy or less healthy, and that's probably the wrong term to use, but I'll leave it at that.

I don't think we see any shortage of ideas coming from them. Historically, we might have been worried about how much we are going to spend on incremental artwork for some of these labels but given the strength of the market now we charge for the artwork. So I'm not so worried about incremental artwork that we do if a product fails. But I think as we've said, we continue to maintain -- the outlook is really strong and it's -- given the amount of imports we have coming into North America this year, I'm a little bit more bullish on the next 24 months perhaps than I was before, because it hasn't really slowed down from last year like I thought it would.

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

Thanks, Tim. My last one and I'll turn it over just from some inbound that we've gotten, can you update us on the portfolio and how you look at Transit, how you look at North American Tinplate relative to the fit, the relevance, the importance in the portfolio and in particular what you think the trajectory for Transit is over the next couple of years? Thanks and good luck in the quarter.

Timothy J. Donahue -- President and Chief Executive Officer

Sure. So the first thing I'll say is that we've pegged August 31 for the Tinplate sale for the purposes of the discussion today. We're hopeful that it closes earlier than that. I don't think it's going to close July 31. As we look at the other businesses in the portfolio and specifically to your question, the non-beverage businesses, we've discussed previously that they don't require a lot of capital. The return on capital from those businesses is quite high and the cash flow generated is quite high.

And so to the extent that any organization has a lot of demands on its cash, be it a growth capital in one business versus another and/or share buybacks, dividends, return on capital to shareholders, it's important, in our view, to have it well balanced and businesses that generate a lot of cash flow where you just tend the garden, you're not having to plant a lot of trees. And so for the time being, we're running those businesses as efficiently as we can. I would like to have a discussion with all of you at some point where we're able to demonstrate to you the upside to a business like Transit Packaging, but for the time being we're just going to tend the garden.

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

All right. Very good. I'll turn it over. Thanks Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thanks, George.

Operator

Thanks you. The next question is from Gabe Hajde of Wells Fargo Securities. Your line is open.

Gabe Hajde -- Wells Fargo Securities LLC -- Analyst

Tim, Tom, good morning. I hope that you everyone that's important is doing well. I'm trying to revisit a question that I think George started to go down the path of recognizing difficult to talk about some of these topics in a forum like this. But I guess is there anything you can share with us from customer dialog that gives you comfort that the industry doesn't find itself kind of in a meaningful over supply situation in 18 to 24 months? And part of that is obviously predicting consumer behavior but more talking about potential for substrate gains or maybe the multiplier effect of pre-mixed cocktails that maybe were under-appreciating similar to kind of what we're observing in Brazil that's happened over time with returnable glass?

Timothy J. Donahue -- President and Chief Executive Officer

So we touched on this a bit last time, Gabe, I think even if we -- even as we come back from the pandemic, I think the spiked seltzers are one thing right, and mixed cocktails are another. And if you were a bar owner, you think about people going back to bar first, and they're going to drink those products, they're going to be served in a can. They're not going to be served -- they're not going be mixed by the bartender. And if you were a bar owner, it offers you the opportunity to control inventory, and control waste, and control them in a much better way than bottles of alcohol that have to be mixed with seltzer out of a gun, etc.

So, I think from that standpoint, we're not so worried about the reopening and I think piggybacking on that when you think about that it offers a lot of upside to the can into the future. But you're right, you never know what consumer behavior is going to be. I do think there is a large portion of the population, not only in the United States but especially in Europe where habits have changed post pandemic or not really post pandemic, we're still in it, but -- and it's going to take a longer time for that to return to what we view as historical normal than perhaps we anticipate.

But there is always a possibility where as an industry we're going overbuild and I don't see that happening for the next two to three years. I think, as I've said and I can only say it so many times, demand is going to far outweigh supply for the next several years. And you're not going to scare me right now by telling me some guys are doing this or some guys doing that and how do you feel? Where we sit today, we know -- we've got customers banging the door every day, looking for more supply and we're not in the business of telling people no. So, we're not worried about it.

Gabe Hajde -- Wells Fargo Securities LLC -- Analyst

Okay, thanks for that. And then I guess kind of early indications from on-premise and in-fact reopening and I think kind of going back to this candidate of something that I don't necessarily think we have great visibility on at least on the sell side is obviously the supply chain is much different and pipeline fill ahead of kind of July 4 holiday. From our research I think that was pretty robust. Do you have any visibility in terms of anything you can share with us, in terms of kind of where those inventories are? Again, appreciating that I guess kind of the Memorial Day holiday I think was somewhat missed just given timing of reopening across the country?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah. So it's an interesting question, because when cans are in short supply -- typically the customers don't warehouse a lot of cans, or warehouse of filled products, but given the cans are in short supply what I don't have a handle on right now is are they're buying ahead and warehousing empty, or filled cans for the balance of the summer and the Labor Day, because they're worried about supply. That I couldn't honestly tell you, but I can tell you that the demands on us have only increased from the conversation we had three months or six months ago.

Gabe Hajde -- Wells Fargo Securities LLC -- Analyst

Okay. Thank you.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Ghansham Panjabi of R. W. Baird. Your line is open.

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

Thanks. Good morning everybody.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning Ghansham.

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

Tim, what do you think is realistic in terms of the growth rates for the industry specific to the U.S. in '21 versus '20? And then the new plant that you just announced, the two-line plant, is that for existing product categories, new categories that we just don't know about at this point, or the combination of the two?

Timothy J. Donahue -- President and Chief Executive Officer

I would say it's existing in new customers, but existing categories, Ghansham. I'm sorry what was the first part of the question?

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

Just the industry growth rate?

Timothy J. Donahue -- President and Chief Executive Officer

Oh, oh, oh. The problem is the COVID quarter kind of screws it up, right? So, I would tell you that if last year we had -- what did we have Tom? 97 billion units, and with imports we are about 108, 110, 112. Is it reasonable to say that this year, you could have 10% on 112? That seems like a big number. I think it depends on the supplier's initiation of capacity output. If we were apples-to-apples, I'd say that Crown is comfortable at 10% on its base. It could well be that we have 10% this year, but I feel more comfortable in the 5% to 7% range as an industry.

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

Got it. And then in terms of the obvious, the delta variant, and the impact on lockdowns, etc. What you are you seeing across the regions real-time? And then also in Brazil. I don't think you mentioned much about Brazil, but that country is going to lapse some pretty significant comparisons for the back half of the year versus an extraordinary last year. Just your outlook for the back half to be specific Brazil as well?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, I think -- I mean, we're going to remain sold out in Brazil. The only headwind we have in Brazil is how quickly we get the second line up in Rio Verde. Clearly the comparisons are much higher in Brazil. If we all had more capacity, it wouldn't matter. We're going to chew up all this new capacity. As quickly as we can make the cans, they're going to be taken by the customers. On the delta variant or the other miscellaneous variants around the world, we talked about Asia. And the Asian governments are really trying to restrict the number of new cases. I say restrict the number of new cases, you take some big Asian cities with several million people they don't like to have 20 new cases. So that's why the restrictions there are so much different.

Now the availability of vaccines and the availability of quality vaccines is much lower across many of these Asian jurisdictions than it is in Europe, and the United States. I don't -- I'm not in Europe, and we haven't been able to get to Europe, so I'm going to pass on that for the time being. But I would say that in United States, I don't believe any of the Governors want to go back to lockdown, and I would go as far as to say to the extent that they were able to use lockdowns for whatever other political purpose they had, they've accomplished that other political purpose. They're not going back to lockdowns at this point, and with some of the bigger cities I know we are in Philadelphia.

We've got at least 60% to 65% of the people fully vaccinated in the city of Philadelphia, and at some point perhaps not popular say, I don't really care. You don't get vaccinated. Don't complain when something bad happens to you. There is an opportunity out there for you to be vaccinated, for you to protect yourself, and your family, and if you're not willing to do that, that's on you, but don't ask the rest of us to suffer, and delay leading our lives, because you've got some belief one way or the other where you don't want to take the vaccine. It's pretty clear, right? Drug companies aren't trying to kill us. They're trying to extend our lives, so they can sell us more drugs. I haven't heard a good reason why people don't get the vaccination. So I don't think regardless of any of the variants. We might have some cities like Los Angeles that are forcing us to mask up again. I don't think we're going back to any shutdowns in the United States anytime soon.

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

Got it. Thank you.

Operator

Thank you. Our next question is from Jeff Zekauskas of J.P. Morgan. Your line is open.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Thanks very much. You spoke about your year-over-year can growth. What was your sequential can growth in beverage?

Timothy J. Donahue -- President and Chief Executive Officer

From Q1 to Q2?

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Yes.

Timothy J. Donahue -- President and Chief Executive Officer

Oh boy. Hold on.

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

Well Q1 was up 8%.

Timothy J. Donahue -- President and Chief Executive Officer

No, no. No, I know that was up 8%, but it's. That's a meaningless number, because it's got COVID quarter last year, right? I think what you really want to know is how many more cans that we sold in the second quarter than the first quarter?

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

That's it. That's the question.

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

19.5% in the first quarter.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, so what I can tell you is globally we're a little over 20% in the times at 19.5%, but I think it's -- maybe it's 20%, not 19.5%, 19.9% in the second quarter, and maybe for the full year we're like 13.5%, something like that, so if that gives you help.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Okay, I'll take what you're giving. In the quarter what was EPS from continuing operations?

Timothy J. Donahue -- President and Chief Executive Officer

Sorry, what was the again the question again, Jeff?

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Sure. In the second quarter, what was EPS from continuing operations? And what was EBITDA from continuing operations and pro forma if you didn't discontinue the Tinplate business?

Timothy J. Donahue -- President and Chief Executive Officer

So the EPS is on the schedule, right? The $2.14.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

No, but exclusive of discount.

Timothy J. Donahue -- President and Chief Executive Officer

So the earnings per share from continuing operations was $0.57, discontinued was $0.37. I'm sorry. Continuing was $0.97, discontinued was a loss of $0.02.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

No, adjusted?

Timothy J. Donahue -- President and Chief Executive Officer

$2.14.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

The $2.14, $0.50 in disconts, and, $1.64 in continuing operations, is that the rough estimate?

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

You've got to be careful with that, because you have the pro forma to disconts doesn't mean we're going to lose. You have to back out interest and everything else.

Timothy J. Donahue -- President and Chief Executive Officer

There is no -- on the face of the income statement when you show you income from discontinued operations, it's not reduced by any interest expense. All the interest expense is up in continuing operations as required.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Okay.

Timothy J. Donahue -- President and Chief Executive Officer

And your second question was EBITDA for the second quarter from continuing operations?

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Right, and pro forma.

Timothy J. Donahue -- President and Chief Executive Officer

So I don't have the first quarter press release. So pro forma 12 months June.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

I know pro forma 12 months?

Timothy J. Donahue -- President and Chief Executive Officer

So if you have the prior press release, if you backed out.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

So it's 559 for pro forma if you look at the prior numbers, but I don't know if that's correct. Is that the right numbers? Is it 559 for the quarter pro forma?

Timothy J. Donahue -- President and Chief Executive Officer

No, so, what I was trying to say Jeff, if we look at the first quarter, LTM March EBITDA was 1917, and that has food as continued operations, right? There were no discontinued operations. And pro forma 12 months June is 2081, so the second quarter -- if we didn't have discontinued operations, the second quarter is $164 million higher than the second quarter last year. On this call that's the best I can do for you, but I'll spend a lot more time, some other I want to spend.

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Okay. Thanks very much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Mark Wilde of Bank of Montreal. Your line is open.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Thanks. Good morning Tim. Good morning Tom.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

First of all Tim, did you provide a capacity number for the new southern U.S. plant?

Timothy J. Donahue -- President and Chief Executive Officer

I would tell you to think about $2.5 billion very similar to Bowling Green and/or Martinsville.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Okay, that's helpful. In terms of packaging, when you acquired the business, I think you were pointing to about $85 million or $90 million a quarter in EBITDA. Is that still a reasonable number in your view in light of kind of say the efforts you've made to improve the business, or is it a little higher, or little lower than that going forward?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, so I think where we see segment income plus depreciation, we're going to be $90 million would be $360 million. We're going to be higher than $360 million this year, no doubt. And so we'll see what industrial activity is for the balance of this year, into next year, and into '23, but there is no reason why that number shouldn't continue to grow at least at GDP rates until such time that we take a different view on how much we would want to try to grow that business.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Would you say Tim, just as we looked at that second quarter number, were there any pieces of that business that were still cyclically weak, or does that second quarter number reflect the business is pretty much up and running full?

Timothy J. Donahue -- President and Chief Executive Officer

So there is nothing cyclically weak. What is a little depressed is the equipment business. Just because we're having issues on the supply side from our suppliers getting components, and other items, and I estimated that maybe about $5 million earlier during the call. That demand is exceptionally strong, and as I said earlier even probably far stronger than we can handle right now with the folks we have in place if we had all the supply, but we don't have all the supply.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Okay. And last one from me. Is it possible for you to just talk with us broadly about what Crown is doing to help boost the recycling rate for North American beverage cans? I think that's running about 50%, and I wondered given the energy intensity of aluminum cans, if we continue to landfill 50% of all of them, is this going to somehow threaten that whole sustainability argument around cans if that rate isn't moved over time?

Timothy J. Donahue -- President and Chief Executive Officer

Mark, we did this last time. And when I went back, and I thought about it, I thought crossed in my mind that you're [Indecipherable] for the paper industry. One thing I feel really good about is the paper guys are never going to find a way to package carbonated beverages. But however your point, your question is a good question, and you and I had a disagreement on whose responsibility it is. No doubt the government is going to make it either our responsibility, or the customer's responsibility, because we don't vote in elections.

Individuals vote in elections, but if consumers who are individuals don't start properly handling, or disposing of products that have real value. If aluminum has real value, then you're going to have. We're going to find a different answer, but we have talked in the past about higher recycling rates in deposit states versus non-deposit states and I don't really want to get on one side, or the other of that issue, because some of our customers have strong feelings of that. However my view is that if we're going to have deposits for aluminum cans, you better start having deposits for everything else that goes into the way stream. It's not fair to pick on one substrate.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Okay. Fair enough.

Timothy J. Donahue -- President and Chief Executive Officer

What I'm doing -- we sponsor a number of efforts around the organization nationally, and internationally, and we do it not only individually as a company, but we do it in coordination with the Can Manufacturers Institute as well.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Okay, fair enough. Thanks Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Good luck in the second half.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Neel Kumar of Morgan Stanley. Your line is open.

Neel Kumar -- Morgan Stanley & Co. LLC -- Analyst

Great. Thanks for taking my question. In terms of the 18% segment volume growth year over year in Americas beverage could you just break down the volume growth in North America, Brazil and Mexico? And then the North America.

Timothy J. Donahue -- President and Chief Executive Officer

Yes, I could. I think, you're going to have exceptional numbers in Mexico and Brazil because those markets were so depressed last year. You know that was the COVID quarter and many of our alcohol customers were shut down. Lot of those cans were made but they were sold in North Americas. So I would say the North American number in high single-digits, the Mexican and Brazil numbers high double-digits and when I say high double-digits, I mean high double-digits.

Neel Kumar -- Morgan Stanley & Co. LLC -- Analyst

Okay.

Timothy J. Donahue -- President and Chief Executive Officer

As I said earlier -- Neel, as I said earlier, I don't want to characterize some of the growth rates in the second quarter is meaningless but when we start seeing numbers like that they are somewhat meaningless because of what the COVID quarter was last year.

Neel Kumar -- Morgan Stanley & Co. LLC -- Analyst

Right. That make sense.

Timothy J. Donahue -- President and Chief Executive Officer

And here's what I'd tell you, if we looked at the first half of '21 versus the first half of 2019, Mexico and Brazil are up high single to mid double digits in that period. So growth still quite high and North America up more than 20% over that period. It's just -- I think it's a more relevant measurement period then comparing against the second quarter of last year or we can sit here and talk about unbelievable growth rate that mean nothing because you can't model them forward

Neel Kumar -- Morgan Stanley & Co. LLC -- Analyst

Right, that makes sense. And then just in terms of beverage can imports, I know you mentioned that Crown obviously had imports a bit lower than last year but it seems like imports for the overall industry are up significantly year-to-date? So, I just wanted to get an estimate of how many cans potentially imported this year versus 7 billion to 8 billion cans import of last year? And are you seeing any evidence of beverage customers having independently sourced cans from abroad, as you and your large businesses are generally sold out.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, so, if I -- I didn't mean for you think that we're importing a lot less cans, we're importing a lot of cans this year again, slightly below what we imported last year. So, I don't know what the industry imports were last year, you mentioned number of $8 billion. If that's the case we probably imported 25% of those, I can't tell you what the other guys did but we're still importing an extraordinary amount of cans this year. There are customers out there trying to make their own deals to import cans because we and the other global manufactures is only so much we can do.

Neel Kumar -- Morgan Stanley & Co. LLC -- Analyst

Great, thank you.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Alton Stump of Longbow Research. Your line is open.

Alton Stump -- Longbow Research -- Analyst

Great. Hi, Tim and Tom. Thanks for taking my question. Of course -- I mean you guys pretty much beat every [Indecipherable] expectations but the big surprise to me was European beverage can volume number, particularly the first half versus first half '19 be almost as strong as Americas, I guess what drove the reason why you're seeing strength to drive that huge growth of mid teens versus first half of two years ago?

Timothy J. Donahue -- President and Chief Executive Officer

So well, there is growth in the market and even prior to all these beverage can euphoria there has been consistent 3% to 5%, 4% to 6% growth across Europe, year in and year out for the last decade or decade and a half. You coupled that with we have installed new capacity in throughout our European operations although we don't have anything announced right now. Between 2019 and today we put a new two-line can plant in Valencia, Spain and a new one-line can plant in Parma, Italy. So we have new capacity. So that would be specific to Crown that will be the reason our growth numbers are pretty high compared to first half of 2019.

Alton Stump -- Longbow Research -- Analyst

Great, makes sense. And just as you just referenced, you have announced that capacity, how soon might that be coming or how big is the need over the next 12 to 18 months to that capacity in Europe in your view.

Timothy J. Donahue -- President and Chief Executive Officer

I don't want to -- I guess we're not going to talk about that right now. We'll let you know in due time.

Alton Stump -- Longbow Research -- Analyst

Okay. Thanks guys.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. So next question is from Anthony Pettinari of Citigroup. Your line is open.

Anthony Pettinari -- Citigroup Global Markets, Inc. -- Analyst

Hi, good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Anthony Pettinari -- Citigroup Global Markets, Inc. -- Analyst

At the Analyst Day you talked about expectations to grow global Beverage Can volumes, I think by 10% in 2021. I think in your response to Jeff you talked about maybe being able to grow 13% plus if I heard that right and so that's the first question, and then to the extent of there has been a change in view, is it primarily driven by better than expected demand or is it really driven more by better operations in terms of getting some of these plants up earlier than expected and running well.

Timothy J. Donahue -- President and Chief Executive Officer

Well, so what we said was, I think Jeff was asking the rate of growth in the second quarter versus the first quarter and what we said was the second quarter was up about 20% and year to date June were up about 13% or 13.5%. So, clearly the second quarter had higher growth than the first quarter, some of which is due to COVID. I still think, we are going to grow in the third and fourth quarter but those growth rates in the third and fourth quarter will not match the growth rate in the second quarter because of the comparison to COVID. So I think perhaps, on a global basis perhaps 10% or 11% is still a reasonable number.

Anthony Pettinari -- Citigroup Global Markets, Inc. -- Analyst

Okay, OK, that's helpful. And then we've read about increases in construction cost, whether it's materials or steel or labor, when you look at the cost of construction and staffing a Greenfield Beverage Can plant maybe compared to a couple of years ago, is it up 10% or 15%, is there any kind of rough, any kind of color you can give us on that and then in terms of impact of risk from rising construction cost to capex guidance and maybe the longer term capex goals that you articulated at the Analyst Day, any thoughts there.

Timothy J. Donahue -- President and Chief Executive Officer

So, I -- where we sit today and it's plant specific because -- we expect some of this will -- I don't know if the steel guys are at their ApEx yet, but might be at their ApEx. But as we sit today, I shut down to sketch out a plant cost today versus what we thought our plant was going to cost just to build two or three years ago, it could be 20% to 25% higher today than it was two or three years ago. I don't think we're going to stay at that level over the next several years. So, I don't think we need to adjust our long term capital planning to take that into account. I think we're going to get a reversion on some of that.

The risk to the company by spending an extra $30 million or $40 million dollars to build the factory today versus two or three years ago, I think you need to look at that risk over a 40 to 50 year period. Because when you build a factory for beverage cans you plop it down in a place and as we've said before it's not like moving a call center, right? It's not like moving all you fellows out of New York City to Hoboken. You're not going to move a can plant. So, that plant is going to be there for 40 to 50 years. So, we're not going to get overly excited. We don't like it, but we're not going to get overly excited nor change our strategy as relating to trying to service our customers.

Anthony Pettinari -- Citigroup Global Markets, Inc. -- Analyst

Okay. That's extremely helpful. I'll turn it over.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Adam Samuelson of Goldman Sachs. Your line is now open.

Adam Samuelson -- Goldman Sachs & Co. LLC -- Analyst

Yes, thank you. Good morning, everyone.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Adam Samuelson -- Goldman Sachs & Co. LLC -- Analyst

A lot of grounds have been covered I just wanted to clarify, so on the guidance in one of your comments, you mentioned that about $0.20 of the 25% or so increasingly implies that can have guidance is really your reflection on the treatment in divestiture and the timing impact. And then separately, you just said that in May you talked of global can volumes for the year will be up 10, and you saw that was still pretty good estimate maybe 10 to 11. So I'm trying to make sure I'm characterizing that right especially given the magnitude of the second quarter outperformance, and so the view have you tempered your second half volumes if you exceeded the full year range by so much in the second quarter, just to make sure comparing apples to apples there.

Timothy J. Donahue -- President and Chief Executive Officer

No, the comparisons in the second half are much different in the comparisons on the first half especially the second quarter, right? No, but the comparisons in the second half are much different than the comparisons in the first half specially the second quarter right now. You've got growth rates in some of the locations that were severely impacted by COVID last year in the second quarter you're not going to have those same growth rates in the second half because those markets came back in the second half of last year. So, while there is still going to be very good growth in the second half, you just can't have another COVID quarter nor do we want another COVID quarter.

Adam Samuelson -- Goldman Sachs & Co. LLC -- Analyst

That's, that I get just maybe framed differently then, is it that in the guidance you've given for the fourth quarter frankly if we're going back for the first quarter which you meaningfully exceeded in both cases is the real variance you had left a good amount of kind of volume contingency out of your formal guidance because you were uncertain about the macro and ultimately mobility was good, demand was good and operations ran well that you were able to outperform your initial expectations in both the first and second quarter?

Timothy J. Donahue -- President and Chief Executive Officer

I think we're doing our best to bring capacity on as quickly and as efficiently as possible. And you know if we're up 13.5% through 6 months, maybe for the full year we're going to be up 11.5% or 12% or 13%. As I sit here today, I'm telling you 10% or 11% it just it really depends on how quickly we can get the capacity up and running and how efficient the factory is when it comes up and running. We have a lot of capacity coming up in the second half and I have no doubt that whatever we bring to market we're going to fully sell out. It's just a function of how quick we can get it up.

Operator

Thank you. Any additional questions, Adam?

Adam Samuelson -- Goldman Sachs & Co. LLC -- Analyst

Sorry, that's very helpful. Thank you very much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Adam Josephson of KeyBanc. Your line is open.

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

Thanks. Tim and Tom, good morning, hope you're well.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning Adam. Thank you.

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

Just a couple of guidance questions. Tom just on the buyback, can you clarify what you're expected to buy back this year? Is it just the $379 million or an amount significantly greater than that as part of your full year guidance?

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

As Tim was saying we're kind of solving the leverage, so who let the leverage to be 3 to 3.5 pick the midpoint of that. We'll buy back stock such that we're about 3.25. So the $379 million there will be more to come, as we go through the last six months.

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

Got it. Okay. And Tim on the 3Q guidance, similar question to what came up on the last call which normally your 3Q earnings were higher than your 2Q earnings. I know you're losing a few cents, I assume in September from European but the presumed absence of European Tinplate. But can you just remind me or help me understand why the implied sequential earnings declined? I know you said you think you'll have some production constraints which I think you thought as well going into the second quarter you talked about inflation but I think you also talked about inflation you're expectation of inflation last quarter and obviously you ended up beating your guidance quite significantly.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, we've modeled and given you a forecast assuming we keep your European Tinplate's through August for most of you who followed us for some time the European Food businesses heavily weighted to the third quarter and it's heavily weighted to September. And so, that is a fairly good size number. I think that as we sit here their inflation in the business and it will take us till, we get the contract risers the opportunity to do that next year to recover that. I hope we're being a, and I hope we're being a bit cautious but we'll see right. It's as I said earlier that one of the big things Adam is that the available capacity in the third quarter to outperform what you or I would forecast the available capacity is lower because you've already built in to your forecasts that you're going to sell everything and more than you can make in Q3.

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

Got it. And I appreciate that Tim. And just longer term one on capex so, I think you talked about $900 million this year and obviously you just announced new plants come '23-ish. Is there any reason to expect a decline in capex from this year's presumed levels of $900 million over the next call it two or three years?

Timothy J. Donahue -- President and Chief Executive Officer

So, I think there is, I think as I sit here today, I could comfortably tell you that we expect to spend similar or more next year. Beyond that, my crystal ball is not that good, so we'll see.

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

And Tim just one last one on the cash flow issue, just given the new assumed closing date of the deal, any thoughts on what your cash flow might look like I know, working capital is going to be messed up there are other issues that are going to be messed up, but any thoughts on what cash flow is likely to look like given these myriad issues?

Timothy J. Donahue -- President and Chief Executive Officer

Yes, so again the food business a lot of shipments over the summer and the cash flow is lower because you lose the earnings from the business for the last four months ones not only that but the working capital through up with the buyers happens within the purchase price mechanism not through the cash flow statement not through free cash flow. So, I think him and again I don't like to use the term meaningless, but it's not something that's meaningful for modeling purposes going forward.

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

Right. Appreciate it Tim. Thank you.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Philip Ng of Jefferies. Your line is open.

Philip Ng -- Jefferies LLC -- Analyst

Hey guys, thanks for squeezing me in. I guessed you mentioned Tim, your outlook for the next 24 months is it a bit more bullish than you previously thought. Sounds like maybe you're a little less worried about the reversal from a reopening dynamic, but any more color on why your little more update than you were three to six months ago on the demand side?

Michael Leithead -- Barclays Capital, Inc. -- Analyst

Well, look two reasons, the one is that the customer's request for cans have not subsided at all, in fact they're increasing and the level of imports that we and others are bringing in again are not really subsiding and just as we talk to customers and you think about what a reopening think might look like or a delayed reopening might look like. Just gives you a little bit more confidence that even in a full reopening, it's the growth rates are going to far outweigh any impact from a reopening.

Philip Ng -- Jefferies LLC -- Analyst

Got it. Were there any pockets that were more stronger a bigger contribution is it any of these new products that we might not be as opposed. Your spiked seltzer seems to be a little as moderate a little bit and maybe the reopening fees, I'm just trying to flush out were their variables or your customer base where you've seen a little stronger demand than you previously expected.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah so, obviously they're not going to have the same growth rates that they had in the past, right? they've had tremendous growth rates but they're growing off a much larger base so from the standpoint from a can company's standpoint, there's still significant unit volume growth. And sometimes we get hung up on growth rates and we forget about absolute unit volume growth and the contribution we get from that. The demand has been across all products. Without saying something I don't want to say, I'll just leave it at that.

Philip Ng -- Jefferies LLC -- Analyst

Okay. That's helpful. And then we think about the back half of your guidance you few of my peers have just mentioned that the guidance looks a little more conservative and there's different reasons why you're accounting for that and you mentioned maybe the capacity constraints provides a little more let more limitation for big outside surprises that we've seen in the first half appreciating you have some of that capacity coming on later this year but you know when you any kind of expect that capacity kind of hit its full stride where you have more optionality for upside is that early next year but just any more color around that would be really helpful?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, I'd like to think we're and we are getting better and I'd like to think we are getting better at bringing lines on and getting up through learning curve quicker and better than we have in the past, I think we are doing that. We have some locations around the world that do it much better than others. So far it feels like the first line in Bowling Green is going really well. Now are they able to continue that advancement through learning curve as well as they're doing in the first line when you complicate the plan and you bring up the second line, we'll see. So typically we'd like to tell you that it takes us about 12 months to get through full learning curve. Some of the factories to better as I said, and the only thing I can tell you is I know all the teams are trying as hard as they can.

Philip Ng -- Jefferies LLC -- Analyst

Got it. Alright, thanks a lot.

Timothy J. Donahue -- President and Chief Executive Officer

Thanks Phil.

Operator

Thank you. Our last question is from Salvator Tiano of Seaport Research Partners. Your line is open.

Salvator Tiano -- Seaport Global Holdings LLC -- Analyst

Yes, thanks for taking my question. Just wanted to check a little bit on venue start-ups. Firstly, I was under the impression that some of them were scheduled for Q3 so want to confirm that they are being delayed by few months as most of the start-ups are now in Q4. And secondly, as we think about the start up expenses, do you expect most of them to align with the calendar of the start-ups say Q4 or with the hiring and training in advance to Q3 include the lot more start-up costs than Q4. How should we think about that?

Timothy J. Donahue -- President and Chief Executive Officer

So, you are correct in saying that there's been a small slippage in bringing some of the factories up, maybe a month or two from late Q3 and into the early Q4. Some of that has to do with raw material supply, building supply some quite frankly has to do with the fact that we're right in the middle of the season and we're trying not to disrupt the line from running at the highest efficiencies it can possibly run at.

On start up costs, the only thing I'm going to tell you is we don't talk about the impact of start-up cost, we've been building plants, greenfield plants for well over 20 years, we've added significant greenfield capacity to our platform globally in every market, it's something we do and it's just something that's embedded in the forecast that Tom's provided you. So, I don't think I have an answer for you as to whether there is more or less, it's part of the business when you bring up factories and we're going to have enough growth and enough positive things happen that we don't need to talk about the impact from start up costs

Salvator Tiano -- Seaport Global Holdings LLC -- Analyst

Yeah, I guess and I think in the past you've mentioned also that you do not provide an explicit dollar number. My question to you would be more about the timings, as we try to model it on our own and make our own assumptions, should we think that because these are early Q4 start ups that a lot of the start-ups of course will happen in Q3, or should we think that no it's going to be in Q4 regardless of what amount?

Timothy J. Donahue -- President and Chief Executive Officer

Oh, if you're going to model it, most of you, if you're starting a plant up in Q4 you're going to have a little bit of training and other expenses in Q3 and then you're going to have some, as the plant comes up through learning curve, you got significant expenditures in Q1 and Q2 and so you get the breakeven, and that's just all part of the number that you're seeing. I'll let you guys model how you want to model.

Salvator Tiano -- Seaport Global Holdings LLC -- Analyst

Okay. Perfect. Thank you very much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.So, Harley, I think you said that was our last call. Thank you very much Harley and for all of you that will conclude our call today. Thank you for joining us. We look forward to speaking with you again in October. Bye now.

Operator

[Operator Closing Remarks]

Duration: 31 minutes

Call participants:

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

Timothy J. Donahue -- President and Chief Executive Officer

Michael Leithead -- Barclays Capital, Inc. -- Analyst

Arun Viswanathan -- RBC Capital Markets LLC -- Analyst

Kyle White -- Deutsche Bank Securities, Inc. -- Analyst

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

Gabe Hajde -- Wells Fargo Securities LLC -- Analyst

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

Jeff Zekauskas -- J.P. Morgan Securities LLC -- Analyst

Mark Wilde -- BMO Capital Markets Corp. -- Analyst

Neel Kumar -- Morgan Stanley & Co. LLC -- Analyst

Alton Stump -- Longbow Research -- Analyst

Anthony Pettinari -- Citigroup Global Markets, Inc. -- Analyst

Adam Samuelson -- Goldman Sachs & Co. LLC -- Analyst

Adam Josephson -- KeyBanc Capital Markets, Inc. -- Analyst

Philip Ng -- Jefferies LLC -- Analyst

Salvator Tiano -- Seaport Global Holdings LLC -- Analyst

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