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DATE
Oct. 29, 2025 at 11 a.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Adam Greenlee
Chief Financial Officer — Kimberly Ulmer
Vice President, Investor Relations — Alex Hutter
Chief Operating Officer — Robert Lewis
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RISKS
Kimberly Ulmer said, "The total impact of lower volumes, extended downtime, and associated inventory reductions in the fourth quarter is expected to be a $25 million headwind versus our prior estimates."
Management cited higher interest expense and a higher tax rate as additional negative impacts on Q4 and full-year 2025 earnings expectations.
Adam Greenlee noted that the "growth trend in 2025 fell below expectations" for dispensing and specialty closures and custom container volumes, leading customers to adjust inventories downward.
TAKEAWAYS
Net Sales -- $2 billion, up 15% year-over-year, driven primarily by growth in dispensing products, the addition of Vayner, and higher raw material and manufacturing cost pass-throughs.
Adjusted EBIT -- $221 million, increased 8% year-over-year, driven by dispensing growth, the Vayner acquisition, higher custom container price-cost, metal container volume growth, and cost reductions, partially offset by sports drink volume declines and unfavorable price-cost in metal containers.
Adjusted EPS -- $1.22, modestly higher despite EBIT growth being offset by elevated interest expense and a higher tax rate.
Dispensing and Specialty Closures Sales -- Up 23%, primarily due to the Vayner acquisition and higher high-value dispensing product volumes; food and beverage closures volumes declined 5%, with North American hot fill products (mainly sports drinks) seeing double-digit declines.
Dispensing and Specialty Closures Adjusted EBIT -- Rose $18 million, or 19%, to a record result, supported by the Vayner acquisition and strong organic volume of high-value dispensing products.
Dispensing Product Sales -- Nearly 40% growth; fragrance volumes grew 15% organically.
Metal Containers Sales -- Increased 13% year-over-year, benefiting from contract cost pass-throughs, 4% higher unit volumes, and a 1% foreign currency boost.
Pet Food Containers Volume -- Up 10%, now comprising about half of metal container unit volume; fruit and vegetable markets partially recovered, soup volumes declined due to order timing.
Metal Containers Adjusted EBIT -- Decreased slightly due to less favorable price-cost and lower production efficiencies from inventory management.
Custom Containers Sales -- Rose 1%, driven by improved price mix; excluding exited low-margin business, volumes increased 4%.
Custom Containers Adjusted EBIT -- Up 15% year-over-year due to cost-savings and favorable price-cost mix.
Full-Year Adjusted Earnings Guidance -- Management provided a range of $0.62 to $0.72 per diluted share, reflecting volume declines in North American personal care and home care segments.
Segment-Specific Q4 2025 Volume Outlook -- Dispensing and Specialty Closures and Custom Containers are expected to see mid-single-digit percentage volume declines, while Metal Containers are forecast for mid-single-digit percentage volume growth.
Free Cash Flow Guidance -- Estimated at approximately $430 million, up 10% from the prior year, with capital expenditures expected at about $300 million.
Return to Shareholders -- Over $120 million returned year-to-date through dividends and share repurchases; $60 million of buybacks were completed in Q3 2025.
Vayner Acquisition -- Integration completed; $20 million of $25 million in planned synergies delivered, with the remainder targeted over the next six months.
SUMMARY
Silgan Holdings (SLGN 13.57%) reported double-digit sales growth and 8% adjusted EBIT growth for fiscal Q3 2025 (period ended Sept. 30, 2025), fueled by gains in dispensing and specialty closures, record adjusted EBIT in that segment, and expansion in metal container volumes, particularly pet food. Management highlighted a $25 million headwind from volume shortfalls in dispensing and custom container businesses, attributing the shift to both proactive inventory reductions and weaker-than-anticipated North American consumer demand for certain personal and home care products. Segment guidance reflects mid-single-digit percentage volume declines in dispensing and custom containers, with metal containers expected to offset some impact through continued pet food and produce demand. Free cash flow is projected to rise 10% to $430 million, underpinned by earnings growth and working capital improvements. The Vayner acquisition is on track, with most of its targeted synergies already realized, and leverage expected to return to the midpoint of the company’s target range.
Adam Greenlee said, "We returned over $120 million in cash to our shareholders through dividends and share repurchases and successfully integrated the Vayner acquisition."
Kimberly Ulmer noted, "Volume growth during the quarter was driven by 10% growth in products for pet food markets, which represent approximately half of our unit volumes in metal containers."
Adam Greenlee clarified, "These products, following the acquisition, are expected to grow by at least a mid-single-digit rate with above-average portfolio margins."
Management stated, "We continue to expect capital expenditures of approximately $300 million" for 2025.
Robert Lewis indicated, "we're well positioned to continue looking for m and a opportunities to deploy capital and continue to grow the business."
INDUSTRY GLOSSARY
Hot Fill: A beverage packaging process where containers are filled at elevated temperatures to ensure product safety and shelf stability, commonly used for sports drinks and juice products.
Contractual Pass-Throughs: Pricing mechanisms in customer agreements that allow for direct transfer of raw material and other input cost changes to customers, minimizing margin volatility for the supplier.
Free Cash Flow: The net cash generated by a company after capital expenditures, available for debt reduction, dividends, share repurchases, or other discretionary uses.
Footprint Optimization: Strategic initiatives to exit or consolidate lower-margin operations or production lines in order to increase efficiency and profitability.
Full Conference Call Transcript
Adam Greenlee: Thank you, Alex, and we'd like to welcome everyone to Silgan Holdings Inc.'s third quarter earnings call. Our third quarter results continue to show the resilience of our business model, the success of our strategic initiatives, and the power of our unique portfolio of products as we delivered another quarter of strong financial performance. Our teams executed well during the quarter and adapted our operating plans to the changing market conditions we identified mid-year, delivering on our strategic growth initiatives, including meaningful organic growth in high-value dispensing products and metal containers for pet food.
Achieving our cost reduction goals, working closely with our customers to meet their unique needs as we head into the end of the year and begin to plan for 2026. We delivered 10% adjusted EPS growth to the first March of the year, returned over $120 million in cash to our shareholders through dividends and share repurchases, successfully integrated the Vayner acquisition, and are on track to reduce leverage to near the midpoint of our range just over twelve months after closing the acquisition.
Our dispensing and specialty closures segment delivered another quarter of significant year-over-year growth and record adjusted EBIT in the third quarter, with nearly 40% growth in dispensing product sales and continued success in the markets we serve. Our team successfully responded to the anticipated decline in sports drinks volumes following more subdued first-half volumes for these products. We've completed the integration of Vayner and have won additional contractual volume based on the combined power of our innovation teams, complementary portfolios of products, and the new product technology this acquisition brings to our platform.
Our long-term customer relationships continue to expand as the execution and focus of our teams remain a key competitive advantage in our markets to drive organic growth that outpaces our peers in the end markets we serve. Our core high-end fragrance and beauty business continues to win in the market with 15% organic growth in fragrance volumes in the third quarter. We are seeing incremental opportunities in healthcare and pharma end markets that should contribute more meaningfully in 2026. Our metal containers business delivered strong volume growth of 4% as expected, with a 10% increase in products for pet food markets and a partial recovery in the fruit and vegetable markets.
As our team successfully navigated the impact of the bankruptcy of one of our large fruit and vegetable customers during the quarter and executed on our cost reduction plan. In custom containers, our teams continue to build on our commercial success. As comparable volumes grew 4% after adjusting for the impact of lower-margin business exited to achieve our cost savings initiatives. And continue to deliver exceptional operating performance as they execute on our cost reduction plans. As expected, our adjusted EBIT margins expanded 180 basis points largely as a result of these cost reductions, and we're on track to have a record year of adjusted EBIT and adjusted EBITDA for custom containers.
Turning to our expectation for the balance of 2025, we are adjusting our outlook to reflect higher interest expense and a higher tax rate and lower volumes in our dispensing and specialty closures and custom container segments for certain personal care and home care products in the fourth quarter. As 2025 has progressed, it has become clear that North American consumer trends have become more bifurcated with certain high-end products continuing to perform very well while other products appear to have been impacted by a subset of the North American consumer that is stretched by both inflation and muted wage growth.
As a result, some consumers are being more selective with their purchases and focusing their buy around essential low-cost goods like shelf-stable food cans and delaying purchase decisions for products that may be more sensitive to promotional activity like hard surface cleaners or hand lotions. On the other hand, the high-end consumer continues to drive growth, for instance, in the fragrance and beauty markets where we are expecting another quarter of double-digit fragrance volume growth in the fourth quarter.
As a result of these trends, demand for some of the products for which consumers are being more selective with their purchases, predominantly for the personal care and home care markets in our dispensing specialty dispensing and specialty closures and custom container segments. While they are growing, they appear to have been below the levels our customers were anticipating throughout 2025. Our customers remain committed to growing volumes in these products and end markets over time, and we remain very well positioned to capture that growth.
But given the growth trend in 2025 fell below expectations, our customers have shifted priorities in the fourth quarter to more closely align their inventories exiting the year with the levels of demand they have experienced throughout 2025. As a result, we are now expecting dispensing and specialty closures and custom containers volumes to decline by a mid-single-digit percentage in the fourth quarter and have proactively taken the step of reducing our own inventories in the fourth quarter as well. Outside of these specific products, we have seen signs of stabilization in the North American sports drink closures market. We enter the fourth quarter.
And it appears the challenges we saw in the market earlier this year have been contained in the second and third quarters as we expected. Our expectations for metal containers volume and profit are unchanged. We're on track to grow volume by a mid-single-digit percentage in the fourth quarter and full year driven primarily by mid to high single-digit growth in pet food. And higher fruit and vegetable pack volumes. Before I turn it over to Kim to discuss our financial results and outlook, I want to take a few minutes to provide some high-level commentary on each of our businesses.
Our dispensing and specialty closures segment has provided tremendous organic and inorganic growth for our company over the past decade. And while the growth rates of some of the products in our portfolio this year have fallen short of our and our customers' expectations, nothing has changed about the way we think about the growth in this segment. The dispensing products in this segment, which represent approximately 65% of sales, 75% of adjusted EBITDA post the Vayner acquisition, are expected to grow by at least a mid-single-digit rate with above-average portfolio margins for these products, should provide mix enhancement to this segment. Our growth in this segment is underpinned by a long pipeline of product innovation and customer portfolio additions.
We believe will drive above-market growth rates as our team continues to compete and win in the marketplace. The food and beverage products in this segment have historically shown modest growth driven by new customer acquisitions or product innovations from our existing and new customers. While the beverage innovation in the hot fill category over the past few years has been somewhat below historical levels, that we would typically see in the segment, we still believe the category is a stable one for Silgan Holdings Inc. as we continue to be well positioned with the major players in this category as a key strategic partner.
From an inorganic perspective, we continue to see significant opportunities to expand our dispensing and specialty closures business in new and existing end markets through acquisitions with similar growth and financial profiles to the businesses we have acquired over the past eight years. With mid-twenties percentage EBITDA margins and mid-single-digit organic growth. Metal container segment has been the benchmark of the Silgan Holdings Inc. portfolio since our inception. Within our portfolio generates among the highest returns of any of our businesses as a result of the relatively stable nature of overall demand over time.
The resilience of the profit profile through all economic circumstances, due to our contractual cost pass-throughs and relatively low cash requirements to operate this customer partnership model that results in strong free cash flow generation. Over time, we have significantly improved the profitability of this business through cost reductions and organic growth. And currently see opportunity for both continued growth opportunities in our pet food markets further cost reductions in this business. While 2024 and 2025 have presented some unique challenges, we regard to one customer's specific financial situation. We believe it is likely that our customer's business will emerge stronger than it has been over the past several years once this process is complete.
However, should our volumes remain at the current levels for this customer, we see a potential cost reduction opportunity of at least $10 million over the next couple of years as we align capacity with demand. Our customer partnerships remain a key differentiator for Silgan Holdings Inc. in the marketplace. As the long-term arrangements provide tremendous stability to the business. As well as a significant growth opportunity as clearly demonstrated in the pet food market. As a reminder, approximately 90% of our metal containers business is under long-term contracts, typically range from five to ten years in length.
And excluding the volumes from the customer that is currently undergoing a reorganization, approximately 90% of our contractual volume is with large blue-chip customers, nearly all of whom are investment-grade rated publicly traded companies under contracts that extend through the next several years. We continue to believe this unique business creates exceptional value for our shareholders driven by its stable earnings low capital requirements, and strong free cash flow generation. Superior returns, and growth. In fact, after continuing to see strong growth in our differentiated aluminum products for the Pet Food segment, in 2024 and 2025 we anticipate investing in additional capacity in 2026 to support continued contractual volume growth with our long-term partners.
Our custom containers business has demonstrated the value we provide in small and medium run length market delivering consistently strong operating performance and a best-in-class service model. And is on track to deliver another year of record profit. As we look to the future for this business, we see significant opportunities to expand as our service model continues to resonate in the markets we serve. We have long said that this market is the most fragmented market we participate in, would benefit from consolidation And with some of that consolidation having taken place already, we believe we are well positioned as a differentiated value-added player in this market.
While the growth in this business can be somewhat episodic, and lumpy from year to year, the long-term trajectory and the growth of this business is clear. We remain focused on the opportunities that lay ahead for the company and are confident in our ability to execute on our plan as the structural changes and evolution are portfolio have positioned us to drive growth in our business in the near term and long term. While some of the market developments in 2025 have not been as predictable as in the past, We remain excited with the incremental opportunities that we have meant that have materialized during the year.
And we are focused on delivering strong free cash flow and achieving our deleveraging objectives into the year-end. As we begin to look into next year, we continue to see tailwinds in our business, and anticipate higher earnings and free cash flow in 2026. With that, Kim will take you through the financials for the quarter and our estimates for the fourth quarter and full year of 2025.
Kimberly Ulmer: Thank you, Adam. As Adam highlighted, we reported another quarter of strong financial results in the third quarter that were consistent with our expectations. With continued success in our dispensing business and the execution of our cost reduction plan more than offsetting headwinds in sports drinks fraud volumes. And metal containers price cost in the quarter. Net sales of $2 billion increased 15% from the prior year period driven primarily by growth in dispensing products, including the addition of the Vayner business, and the contractual pass-through of higher raw material and other manufacturing costs.
Total adjusted EBIT for the quarter of $221 million increased by 8% on a year-over-year basis driven by strong growth in dispensing products, including from the acquisition of Vayner, improved price cost in custom containers, higher volumes in metal containers, and the benefits of our cost reduction efforts which were partially offset by expected lower volumes for sports drinks in North America and unfavorable price cost, including mix, and metal containers. Adjusted EPS of $1.22 was slightly above prior year quarter as the improvement in adjusted EBIT was mostly offset by higher interest expense and a higher tax rate. Turning to our segments.
Third quarter sales in our dispensing and specialty closures segment increased 23% versus the prior year period, primarily as a result of the inclusion of new sales from Vayner and higher volumes of high-value dispensing products. As anticipated, volumes for food and beverage closures declined 5% during the quarter, driven by a double-digit decline in North American hot fill products predominantly for sports drinks. Record third quarter 2025 dispensing and specialty closures adjusted EBIT increased $18 million or 19% versus the prior year period as a result of the contribution from Vayner and higher organic volumes of high-value dispensing products.
In our metal container segment, sales increased 13% versus the prior year period as a result of favorable price mix due to the contractual pass-through of higher raw material and other costs higher unit volumes of 4%, and a 1% benefit from foreign currency translation. Volume growth during the quarter was a result of 10% growth in products for pet food markets which represents approximately half of our unit volumes in metal containers. And higher volumes for fruit and vegetable markets, which was partially offset by lower volumes for soup markets due to the timing of orders in 2025.
Metal containers adjusted EBIT decreased slightly as a result of less favorable price cost including mix, in the current year quarter due to less favorable production efficiencies associated with inventory management in quarter. In custom containers, sales increased 1% compared to the prior year quarter, driven by improved price mix in the current year quarter. Unit volumes were comparable to the prior year, including the impact of lower margin bid business exited as a result of a planned footprint optimization, to achieve the previously announced cost reduction goals. Excluding the lower margin business exited to achieve cost reduction plans, volumes increased 4%.
Custom containers adjusted EBIT increased 15% as compared to the 2024, due to favorable price cost, including mix, primarily as a result of cost savings initiatives. Turning to our outlook for the 2025, we are providing an estimate of adjusted earnings in the range of $0.62 to $0.72 per diluted share. Fourth quarter earnings are expected to be negatively impacted by the reduction in volumes the North American personal care and home care markets as Adam discussed. And the related impact of under absorbed costs as we take extended downtime and reduce our inventories.
The total impact of lower volumes, extended downtime, and associated inventory reductions in the fourth quarter is expected to be a $25 million headwind in the quarter versus our prior estimates. In addition, fourth quarter earnings are expected to be negatively impacted by high interest expense related to the recent euro bond issuance as well as a higher than expected tax rate due to the geographical mix of profit. Dispensing and Specialty Closures and Custom Containers fourth quarter volumes are expected to decline by a mid-single-digit percentage while metal containers volumes are expected to grow by a mid-single-digit percentage driven by continued strong growth in pet food and higher fruit and vegetable volumes.
From a segment perspective, now expect a high single-digit percentage increase in total adjusted EBIT in 2025, driven primarily by an approximately 15% increase in dispensing and specialty closures adjusted EBIT with custom containers adjusted EBIT up approximately $10 million year over year. Our expectations for metal containers remain unchanged. And we continue to expect approximately $10 million of year over year improvement in adjusted EBIT in the segment for the year. Based on our current earnings outlook for 2025, we are maintaining our estimate of free cash flow of approximately $430 million a 10% increase from the prior year as a result of earnings growth and working capital improvement. We continue to expect capital expenditures of approximately $300 million.
That concludes our prepared comments, and we'll open the call for questions. Anna, would you kindly provide the directions for the question and answer session?
Operator: Yes, ma'am. Thank you. If you would like to ask a question, please let go by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach your equipment. Once again, that is star one if you would like to ask a question. We'll take our first question from Ghansham Panjabi with Baird.
Ghansham Panjabi: Yeah. Thank you. Good morning, everybody. You know, Adam, just kinda zooming out a little bit and kinda you know, back over the last three years when you had a pre previous sort of inventory destocking cycle, etcetera, this seems like the second iteration almost a double dip. If you will, in terms of volume improvement and then, you know, some level of decline, etcetera. What do you sort of attribute this towards? This go around? And how does this go around compared to the first iteration back in, you know, twenty two twenty three?
Adam Greenlee: Hey, Anson. Thank you. It's I think it's a really good question because I think there are some very stark differences between what is occurring in the fourth quarter now versus kind of what we were dealing with in the very broad destocking post pandemic, cycle that we dealt with in 2023. I maybe I'll start with 2023 and just talk about, you know, that was a broad based the cycle post pandemic that really affected all of our products. And know, pretty well described, I think, throughout the portfolio. And then I think about what's going on and 2025, and I'll I'll I'll just start with last quarter and say, you know, we did have a large customer bankruptcy.
Unfortunately, that's had a bad a negative impact to our '25 earnings. We had very poor weather that affected the sports drink category. We've already talked about those, but those are very unique one off instances that we think affected two of our key markets and fruit and veg fresh pack and then our sports drinks category. And, really, I think the difference now is the kind of the bifurcation of consumer activity. Right? So we've got you know, our high value, high end products continue to do well that are targeted kind of a higher income consumer. I think the lower to mid tier of income consumer is really struggling.
You know, I mentioned earlier that, you know, between inflation and maybe some muted wage growth, you know, they're trying to stretch dollars at the at point of purchase. And know, we're seeing it, you know, gone dramatic. We've talked for many, years that know, the food can business is a bit of a an indicator of the broader economy. We are seeing strength in food cans. As those consumers that are making that purchase point and trying decision and trying to stretch the dollars. Moving into categories like shelf stable cans, for nutrition. So pretty consistent with what we've seen in the past.
And then likewise, we see you know, in some products, we've specifically called out kind of hard surface cleaners and hand soaps and lotions. And some of the other products that move into our personal care categories. Know, those are nondiscretionary. But in fairness, those can be stretched. Right? You know, you can you can move that purchase from one month to another, whereas you're feeding your family and you're stretching those dollars, that purchase point decision becomes pretty clear again, we're seeing it. Also, I think, collectively, you know, the market in general we've taught consumers to buy on promotion.
And, you know, if there's not promotional activity that is moving volume or is very focused on moving volume, we have seen consumers be reticent to make that purchase and purchase decision. And we're seeing effective promotional activities drive volume much like we've seen to some degree in our wet pet food category.
Ghansham Panjabi: Okay. That's helpful. And then just related question, you know, so in the last three months, last three months ago, called that weakness in food and beverage. Closures in North America. Now it's personal care, home care, Do you see that broadening to perhaps even pet food? I mean, is at a risk as you kind of think about how the sequencing will work through the early part of into 2026? Thank you.
Adam Greenlee: Yeah. So and so to answer your question directly, no. We don't. And you know, we just delivered 10% growth in Q3 in our pet food segment. We're expecting high single digit growth in the fourth quarter which we communicated on the last call as well. So Petu is playing out exactly we thought it would. For the year, we're looking at mid single digit growth. In the containers business. The metal containers business. So really, everything is playing out exactly as we expected. I'll go back to your point on food and beverage again. You know, we were very specific that conversation while we talked about food and beverage, it was very specific to sports drinks.
And related to the really bad weather and wet weather that, really limited the drink occasions for those products. In the early part of the summer, and our customers responded that with, further inventory reductions because they were not getting the sell through because those drink occasions were limited. They also hold back their promotional dollars. And allocated them to other categories. So I just think it's different, and I think it's much different than it was in '23 back to your earlier question. And we think it's isolated to these specific instances.
So you know, it's back to it's the bifurcation of the consumer and the consumer stretching the dollar is making those purchase point decisions, and focused on low cost nutrition at this point.
Ghansham Panjabi: K. Very good. Thank you.
Adam Greenlee: Sure. Thank you.
Operator: We'll now take our next question from George Staphos with Bank of America.
George Staphos: Hi, everyone. Thanks for the details. Thanks for taking my questions. I guess the first question I had, even though it's it's not surprising given you know, the ultimate release today, Adam, Why did DSC miss on what was think at one point in time, you said mid to high twenties revenue growth for the quarter. I didn't hear kind of a specific comment there. I don't think I did. And I had a couple of follow ons in terms of what's going on in the business and your vantage point.
Adam Greenlee: Sure. Yeah. You're you're right, George. So I think we guided kinda mid to high twenties delivered something like '22, '23. It was really the late September change that we were seeing some pressure in the personal care and home care market. So, you know, really, the change started to really show in our numbers kind of late in the month of September. As we really pressed hard for, additional forecast clarity and visibility with our customers, that's what led to the ultimate reduction here for Q4 as well.
George Staphos: Okay. Look. Just on that point, it's kind of a minor point, but since you already were seeing signs of this in late September, did you ever think about what were your considerations in terms of maybe just you know, doing a guidance reduction or preannouncement? Recognizing the third quarter was coming in, in line, the fourth quarter was going to look a lot different versus what was implied for the fourth quarter in your prior guidance.
Adam Greenlee: Yeah. So, I mean, certainly some around that, George. But maybe just to reiterate what you said, our third quarter came in exactly with our expectations and in fairness, we were trending ahead of the third quarter prior to this conversation regarding personal care and home care products. It takes a little bit of time to work with our to work all the way through their forecast. Obviously, you know, as I as I would relay the information here, George, you we're really good a week out. We're great a week out. We're really good a month out.
And as we get kind of further and further out with our customers, it takes more time for them to aggregate their forecast information. And for us to then react to it. So while we did see volumes starting to soften in late September, we didn't have forecast until the kind of you know, first probably late first week, October. From our customers, and then we're putting our plans together. And did not feel it was, within the timeline to talk about it prior to this call.
George Staphos: Okay. No. That's fair. It's just given the volatility that we've seen in equities over the last number of quarters, with variation from performance and guidance, you know, that's kinda what drives the question.
Adam Greenlee: Understand.
George Staphos: So if we look at the pretax amount of 25,000,000, and it's what we were getting And, you know, very, very simplistic apply the mid single digit to the revenue in DSC and custom containers. I wind up with a relatively high incremental margin. Now I know you're saying there's decrementals from overhead absorption and so on, but can you give us a bit more color in terms of how much is the absorption versus the impact from earnings? And how does that split across the segments? And is it pretty even on the mid single digit decline, I think you said? For both segments?
Adam Greenlee: Yeah. So I think maybe they're gonna carve into that, George. So the 25,000,000, I think you can think about 20,000,000 in the and 5,000,000 in custom containers. And then as this will apply to both businesses because we did take proactive actions to mitigate kind of the impact here and make sure we secured our free cash flow to obtain our deleveraging goals for the year. So of the 25, I'd say it's it's probably half of that is gonna be related to volume. And half of it's gonna be related to kind of us taking cost out and reducing our own inventories in response to the customer forecast change. So it's kind of a fifty.
And, you know, I think that, you know, the volume is not a permanent reduction by any stretch. And we'll expect to recover that in future periods. The lost inventory or the impact of the inventory is kind of a one time gain that we likely aren't going to recover.
George Staphos: K. My last one, I'll turn it over. So if we take the midpoint of your guidance for this year to March, and so that means you're trading right now roughly at you know, less than 10 times trailing twelve month. And while I know you're not guiding on twenty six, we'll take it if you have it, but we assume we'll have to wait till February for that. You know, we assume any growth at all, you're at nine times. And that's the lowest valuation Silgan Holdings Inc.'s been at, I think, in twenty years. Even with your dispensing acquisitions, So, you know, clearly, it's a very skeptical market out there relative to Silgan Holdings Inc.
Recognize the market's been volatile period. So what mile markers are you gonna tell investors here and now and an analyst that we should hold you to in terms of fourth quarter and 1Q to mark your progress and to green, you know, it's kinda to Ghansham's question as well, gain more faith in the outlook for the next year. Thanks, guys, good luck in the quarter.
Adam Greenlee: Sure. Thanks, George. Look, performance matters. And we'll take full ownership and accountability of the performance of the business. So you're right. We're not providing, 26 outlook yet or Q1 guidance. So you're looking for a marker, I think it's very clear that we need to deliver the fourth quarter as we've discussed here already on the call and you saw in the press release. So I think holding us accountable and we're holding ourselves accountable for delivering the free cash flow deleveraging as we've talked about, And, again, unfortunately, it's not the growth that we anticipated for 2025. But delivering a year of growth in 2025 while setting ourselves up for growth.
Not only in EPS for '26, but also in free cash flow. So 1Q, should we be looking at low to mid single digit growth across
George Staphos: platform? That's what I was kinda getting at. Thanks, guys. Sorry about that. Because I know fourth quarter, it is what it is. But
Adam Greenlee: Yep. Thanks, George. We're just not gonna comment on how much for Q1 at this point.
George Staphos: Understood. Thank you, guys.
Operator: We'll take our next question from Matt with Raymond James.
Matt Roberts: Hey, good morning, everybody. Thanks for the time. Adam, I was wondering in dispensing, if you can help parse it down a bit more. First, could you isolate the revenue mix exposure to just those personal and home care products and how much those markets are expected to be down Fragrance, that continues to shine. Is that just general demand resilience? Or how much of that 15% growth was really innovation ahead of holiday releases? And then lastly, within that segment, you did say health care and pharma could contribute more meaningfully in 2026. How much growth do you think that could bring in 2026? Got it. So I'll do the last one quickly for you.
Adam Greenlee: Matt. You know, the health care and pharma for '26, we'll we'll be talking about that on our call when we're providing guidance for '26. So we've got contractual wins that will impact '26 favorably, and we'll we'll get into that in a little more detail in the future period. Back to your beginning of the question, you know, for personal care and home care products, again, how about this? From a volume perspective, we were guiding to kind of mid single digit growth for Q4 and now expect a mid single digit decline in volumes for Q4 versus prior year. So that's kind of the magnitude. It's it's sort of an average margin for the portfolio.
And then you rightly highlighted the fragrance business. You know, again, as we said on the last call, we were expecting double digit growth in Q3. We delivered that. We're expecting double digit growth in Q4 as well. And are positioned for nice growth in '26. And the reason why, I think you touched on a couple of them. One, we continue to win a disproportionate amount of the new product launches in the space where we compete and win every single day. And that's in the premium end of the fragrance and beauty market. So a lot of product from our teams, and that's winning and being rewarded in the marketplace.
Then as our customers continue to innovate, we are being chosen as the partner of choice to help them get their products to market. And, you know, that's been a successful story really since we've been probably all the way back to the Alveta acquisition and 2020 or 2021. Excuse me. And, you know, that is set up for continued growth going forward. And I think as we've talked, Matt, you know, once you're kind of it's not pharma, it's not health but it's pretty darn close. Once you're spec ed in, you have a long runway with those product launches that occur.
And so we benefit in the long term but, again, continue to win a disproportionate amount of the new product launches being made by customers as well. Matt, just one point of clarification.
Alex Hutter: The margins on these products for personal care, home care their average for dispensing, which is obviously higher for the over overall portfolio of DSC. So they're there's mix involved as well.
Matt Roberts: That makes sense. Thank you both there. And then as a follow-up, on Vayner. So you've had that for twelve months now. Could you print out what the trailing twelve month revenue and EBITDA contribution was from that business? Any update on the $20,000,000 in synergies achieved to date? And it sounded like personal and home care was isolated to North Is that really in legacy products or any impact on the Weiner banner portfolio given it has, I think, about a third US exposure? Thanks again for taking the questions.
Adam Greenlee: Yeah. Great questions. And really the personal care and home care impact within the legacy business. So that's that's the traditional Silgan Holdings Inc. side of our dispensing, closures business. So Vayner, you know, Matt is honestly, it's it's fully integrated. It's it's nearly impossible now. Yes. We have a standalone p and l, but we've made investments in their facilities that would have gone into legacy Silgan Holdings Inc. facilities. So it really is difficult to try to break anything out there. What I'll say is that the product portfolio that came over with the acquisition continues to perform really well.
And, you know, right in line, if not slightly ahead of expectations in many of the cases, And, I'm trying to get the synergies. Yeah. So the you know, very detailed synergy estimate that we come up. We do bottoms up synergies. The phasing is very specific, so there are no surprises. So we've delivered what we expected. From a synergy standpoint and really have another six ish months to deliver the remaining synergies. So right on track. I think it's 20 of the 25,000,000 have been delivered, and we're in good shape to deliver the balance.
Operator: Excellent. Thank you again. Our next question will come from Gabe Hajde with Wells Fargo Securities.
Gabe Hajde: Good morning, guys. Thanks for taking the question. Adam, I'm trying to reconcile. I think in your comments, you said you expect 2026 free cash flow to be up from 2025. Appreciating that you guys it sounds like we're obviously whittling down, I think you said, some of your own inventory this year. And historically speaking, we've kinda seen an inverse relationship with production EBITDA, and cash flow. Right? So if you're ramping up earnings, typically, flow is gonna go the opposite direction and vice versa. So and unless the business is in wind down or something like that, I'm curious how you're thinking about or what the levers are to grow cash flow in twenty six v twenty five.
Adam Greenlee: Yeah. And I did I don't disagree with what you said, Gabe. I think for us, if we're looking at '26, it's it's continued improvement in working capital and incremental programs that will execute next year, frankly, just as we have been doing for the last several years. So a, there's always room to improve, but we've got specific working capital initiatives that will be executing in '26.
Gabe Hajde: Okay. And then I guess maybe to George's point, on communications as it relates to expectations and things like that, outside of giving us a view about earnings for next year or guidance on volumes, is there anything that you can think of to do that would instill some confidence and conviction in sort of the strategy? Because I do believe, you know, that DSC should be a faster growing, higher margin segment. You guys have spent a lot of time and effort over the past three to five years to reposition the business. So I'm just curious from your perspective if there are other considerations to instill some confidence Thanks.
Adam Greenlee: Sure, Dave. I look. It's, I think performance matters, delivery upon expectation matters. You know, I think if we take a half a step back and talk about our businesses, you know, the dispensing, especially closures, is still growing and is delivering tremendous organic growth and inorganic growth opportunities for the business. I think it's some of the legacy applications that have been a bit of a challenge in 2025 specifically. Metal containers, has done exactly what we expected it to for the year. We're gonna have another record year of performance in our custom container segment. So you know, I think you know, just how we communicate that to the market.
And, you know, we talked, I think, even the last call about, you know, as we think about getting guidance for 2026, it's likely we're gonna be a little more conservative as far as our outlook of what we'll be delivering for the business. To try to take into account more of the unknown things like a customer bankruptcy, and, you know, whether that impacted a specific product.
Gabe Hajde: Okay. May maybe anything on the capital redeployment side? I know leverage is a consideration, but Yeah.
Adam Greenlee: You know, look, capital allocation is a is a focus for us certainly here in our corporate office all the time. And so you know, we did buy back about $60,000,000 worth of shares in the third quarter. Clearly, we thought there was a dislocation in the market, and we were opportunistic with that. You know, we continue to evaluate our capital allocation all the time. And you know, again, I'll just say we thought there was a dislocation in Q3, and we were opportune opportunistic with that.
Robert Lewis: Yeah. Gabe, I think what's not said in that is that our leverage point is kind of drifting back toward the mid point of the range after we fully integrated the Vayner acquisition. So what that means is that we're well positioned to continue looking for m and a opportunities to deploy capital and continue to grow the business.
Gabe Hajde: Thank you.
Operator: We'll take our next question from Mike Rocklin with Truist Securities.
Mike Roxland: Yes. Thanks, everyone, for taking my questions. Adam, can you tell us why you think North America hot beverage is a good market to be in? You know, obviously, it's facing some issues this year. Seems like it only started to recover, from a volume perspective last year from destocking. At the same time, one of your peers is looking to exit So we'd love to get just any color you have about why you think it's a business that it makes sense to be in.
Adam Greenlee: Yeah. It's always been a really good business Silgan Holdings Inc., very stable. I think, you know, if you go back a decade, growth rates were a little bit more accelerated than we've gotten to today. But it is still a growing market, and we think that we're very well positioned with the largest players in that market. You know, when we think about sports rings specifically, it's it's really not a commodity beverage. It's it's a higher volume beverage in some of the specialty applications that we deal with, but nothing close to kind of the CFC water markets from a volume standpoint. So those packages are differentiated. The beverages themselves are differentiated.
There's a lot of technology that goes into the packaging around those products. So the closures that we provide to the North American beverage market, particularly for these hot co beverages, is a technologically advanced solution. Versus some of the other more commoditized products. And we believe we get value for providing the silicon service model along with really technologically advanced closure systems for that beverage market. So you know, we've always thought it's a good market. Mike, and, you know, it's provided really stable growth over time. And, you know, none of us had anticipated the weather challenge that the sports drinks category was going to face earlier in the year. We think it's isolated to the year.
You know, for the most part, I'd tell you, volume played out in the second and third quarter, ultimately, as we expected. Fourth quarter volumes have stabilized, and we think that the inventory correction took place in Q2. And late Q2 and Q3 as we had discussed previously.
Mike Roxland: Got it. So if I put you correctly, or Kim correctly, that you those double digit decline volumes in hot fill? For sports drinks in 3Q? So that was in line with direct information. Yeah. So right at 10% food and beverage and DSC was down, call it, 5%.
Adam Greenlee: And the hot filled beverage portion, sports drinks was down 10%, but that was right in line with where we expected it to be.
Mike Roxland: Gotcha. Okay. Thank you. And then just one quick follow-up. You know, in terms of metal containers, does that any update on the customer going through bankruptcy, volumes came in better than we were expecting certainly in the quarter. Kudos to you guys for driving significant increase in pet food. But just wondering where that metals container bankruptcy stands and whether the $10,000,000 EBIT impact you mentioned last quarter is still, irrelevant for 2H. And do you have any sense of what that impact could be for 2026?
Adam Greenlee: Yeah. So I you know, metal containers had a really good third quarter. Right? Volume came in right at the not only for the pet food market, as you mentioned, Mike, but also for the customer that was going through the bankruptcy. So really, we don't have an update. You know, we can tell you timing. Would indicate at this point, that there should be some indication of resolution to the bankruptcy proceeding. Call it around year end.
So, you know, we think if we go into '26, we'll have much greater clarity But just wanna make it really clear, that customer did exactly what they said they were going to do in Q3, and volumes were right in line with our expectations. There's a little bit of rollover into Q4 as, you know, the some of the pack went a little bit later. Than the September date for Q3 that we typically talk about. So I think everything is going essentially as planned. I think the thing that we wanna make really clear is you know, we think we're probably at a low point with volume for that customer given what happened in '24 and in '25.
There could be a potential where, you know, a new owner wants to grow the business and put support behind that brand, that'd be a great thing because we'll be able to utilize the capacity that essentially we put on hold for this customer in a requirement based contract. If that doesn't happen, if we just maintain the volume that we have right now again, I think as I said earlier today, you know, we're we're gonna look to take out cost. And I think that's kind of at least in the $10,000,000 range as I sit here now. It won't all be in 2026. But that's kind of the magnitude that we see at the current volume level.
Mike Roxland: Very clear, Adam. Thank you.
Operator: Your next question will come from Jeff Zekauskas with JPMorgan.
Jeffrey Zekauskas: Thanks very much. You have a lower outlook for the fourth quarter, but your free cash flow for the year is unchanged. Why is that? Or what are the compensatory mechanisms to generate the same amount of free cash flow this year?
Adam Greenlee: Yeah. So, Jeff, we, you know, obviously, with the reduction from our customers, We look to drive cost out of our system in Q4. And as we take additional downtime, obviously, that's going to allow for us to reduce our inventory as well. So really, it's it's a couple of components of working capital improvements, but it's really driven by inventory reductions that we're taking I'll just say, proactively as a response to our customers. Reducing demand in Q4.
Jeffrey Zekauskas: Propylene values have really come down And I would think that this might be an opportunity in your dispensing business to build inventories? That there's a polypropylene and propylene changes make a difference to that business?
Adam Greenlee: It does. And I think you've got it exactly right. It is the business that has the most impact, and I'll I'll come back to that in a second. You know, our custom containers business is very tight on their pass through mechanisms. And, you know, there isn't much benefit or detriment to moves in resin I'd say the same thing about our food and beverage closures. When you get to the dispensing systems business, you know, while we've made improvements in reducing the lag, they still exist. So we are a little more subject to you know, kind of a quarterly lag, maybe a little bit longer in some cases.
And so we kind of have a benefit or death detriment depending upon how resin's moving. This most recent change is a pretty significant one. We have included a couple 100,000 of upside in our forecast. For the most recent change that just happened at maybe late last weekend in the resin market. So think you got it right. That's the business that gets impacted, and polypropylene is their largest component of resin buying that business.
Jeffrey Zekauskas: Thanks so much.
Operator: Our next question will come from Arun Viswanathan with RBC Capital Markets.
Arun Viswanathan: Great. Thanks for taking my question. Hope you guys are well. And apologies if this was asked earlier, but, I guess, just wanted to ask about the you know, the last few quarters, we've had a few discrete items show up, and, you know, they were I guess, you know, did you contemplate potentially preannouncing those items at all And you know, maybe that would help, kinda frame you know, that they are kinda one time in nature. Did you did you contemplate that this time around as well or no?
Adam Greenlee: I don't I we talked about it a little bit earlier Arun. And I think the message I was trying to convey was really well, we did see some softening in a couple of the markets, personal care and home care products, you know, in dispensing and specialty closures and custom containers, very late in September. It wasn't until we got all the way through the October, early October forecast cycle. So this was a you know, second week late first week, early October that we were running through those numbers.
And then had to do our kind of reaction and what we were gonna proactively do at Silgan Holdings Inc. to respond to the reduced demand requirements from our customers in Q4. So know, I just I would say, Q3, we delivered exactly what we said we were going to do. And, that was very well known to us as we exited September. And nothing to talk about there. And the Q4 forecasting process was pretty dynamic. Given the magnitude of the change and working with our customers and internally at Silgan Holdings Inc. to make sure we got that right.
Arun Viswanathan: Okay. Thanks for that. And then I guess, on a related or not necessarily related, but along the lines of clarifying what's in each business, Is there a way to kinda segment out maybe within DSC how much of that business, you would consider as highly cyclical or you know, prone to some more of these you know, this volatility.
Adam Greenlee: Versus the portion that is maybe higher growth and less cyclical.
Arun Viswanathan: You know, I think that the sports drink side, you know, while you've you've highlighted a number of positives also does exhibit some of that cyclicality, whereas, you know, fragrance in some other markets maybe, know, maybe more structural growers. So could you help kind of frame that maybe into buckets for DSC and maybe even metal container, I imagine, is not so much included there because it's a little bit more mature. But, yeah, maybe for DSC, that would be helpful.
Adam Greenlee: Yeah. I mean, Arun, here's how we think about our dispenser and specialty closures segment. It's it's basically all of it are consumer staple products. So you know, we really don't view any of that business as being cyclical in nature. Yes. We've had a couple of one time instances here, like really bad weather that affected the sports drinks category. And I think the reality is know, if it hasn't been clear yet, I'll just try to say it one more time. This inventory correction is our customers' growth They are growing. They did not grow in 2025 as much as they had anticipated.
This Q4 correction is kind of moving from a mid to high single digit growth expectation for those categories back to a mid single digit growth or maybe a low single digit growth. In certain products. So, you know, it's kind of it's fixing running through the year with higher expectations for growth. They're still growing. So you know, that's what we've been working through with our customers. So I really don't think that our products are cyclical in nature. I agree with your point. I think know, how I would probably try to bucket that, and I'm I'm looking around the table to my team. And say, we think we have a bifurcated consumer right now.
And that's what's driving this activity. The higher end consumer is doing exceptionally well and is buying products and driving growth for our company. The mid to lower end consumer is really thinking hard about where they're spending their dollars and how they're stretching those dollars. We get the benefit to your very point in our metal containers business. Because nutrition and low cost nutrition is a really important item for all consumers with for that portion of the consumer portfolio. So know, I mean, we have product to personal care. We do you know, home care products like hard surface cleaners. We think those products continue to get it purchased. It just maybe they're put purchased a month later.
You know, we'll see what happens with 2026 and, you know, tax initiatives from the US administration but I do think no tax on tips. I do think no tax on overtime. Is a very clear response trying to provide some support to that lower and mid tier consumer that is trying to stretch dollars today.
Arun Viswanathan: Okay. Thanks for that. And then just last on the free cash flow, so the four thirty sounds, you know, very respectful in light of what's going on. And you know, I know that you're taking a inventory hit Just Right now in Q4. two things. So would you say that the inventory reduction that you know, you're proactively pursuing will address you know, all of that and maybe lingers a little bit into Q1, but does get you substantial part of the way there. And then given that you will be generating that level of free cash flow, could you potentially more aggressively pursue share buyback just given what's going on with the stock here today? And, more recently.
Thanks.
Adam Greenlee: Yeah. So we do think the inventory reduction, both for our customers and for us, Is going to be limited to Q4. And to your point, I wrote it, that big part of us being to deliver the 430,000,000 of free cash flow. I think as we sit here today, again, we talked a little bit about capital employment and capital allocation. You know, I'll just repeat what I said earlier that, you know, we repurchased $60,000,000 of shares in the third quarter. Because we thought the market was dislocated. And you know, I think we have the ability to consider capital allocation in any of the tools that we have in our toolkit.
And I think as Bob said, you know, very clearly, we're we're getting back to the midpoint of our leverage ratio by the end of the year. We've got flexibility whether it be it for m and a activity, whether it be for share repurchase activity, aren't announcing anything by any stretch today, but, you know, I think all things are on the table as we move forward. And focusing on delivering them. Value to our shareholders.
Arun Viswanathan: Thanks.
Operator: We'll now take our next question from Anthony Pettinari with Citi.
Anthony Pettinari: Hi, good morning. Following up on Arun's question, is it possible to talk a little bit more about what your dispensing and specialty closures customers are saying about the weakness in personal care and home care I mean, are they expecting volume growth in '26, or are they changing product mix or promotions or strategies to grow volumes? Just wondering how they're kind of what they're sharing about maybe volume outlook and do they see this as sort of a speed bump or an adjustment or something that could be kind of longer duration?
Adam Greenlee: Yeah. So I that thing just to cut right to the chase, Anthony. It is it is an adjustment to where we have been. Right? So those markets are and those customers are delivering growth in 2025. Just wanna try to really clear about that. It just is going from a mid to high single digit expectation to a low to mid single digit expectation, and that adjustment for the year is occurring all in Q4. So these are growing markets. They are growing categories. They are growing products. And the expectation is very clearly that they will grow in 2026 as well.
And I think what I would say is from a conservative standpoint, I would say you would think about them growing in the low to mid single digits in 2026 versus the original expectation for 25 of mid to high. So that's probably adjustment that we're thinking about as we turn '26 even though we're not giving guidance yet. That's how we're thinking about these specific markets.
Anthony Pettinari: Okay. Okay. That's very helpful. Then just switching gears to metal containers, is there any dialogue with metal containers customers on rising metal costs? Or are you seeing any kind of, like, push out of buying into '26 potentially? Is anyone waiting for tariffs maybe to get pulled back or some kind of moving metal? I'm just curious if you've seen any kind of push from 3Q to 4Q or maybe 4Q into '26. On that. Yeah. So yeah. I mean, as I think you know, Anthony,
Adam Greenlee: you know, the metal component is the largest cost component of a metal food can. So it is literally a daily conversation with our customers. And a really important one. So maybe to get to the end of the question, so no push out from Q3 to Q4. You know, for us and our franchise customer model. You know, they pay the thing value for the can in January that they're gonna pay in November. So really, we don't see that within the year kind of product moving between quarters. I think maybe there's two things to talk about as we think about turning the calendar '26. Yes. I think we're gonna have maybe, hopefully, we'll see.
More clarity on what happens from the tariff perspective and kind of the rulings that are expected between now and the end of the year, from the court system. That is probably you know, would drive some activity, I would think, if the courts overturn the tariffs. I think the other component is right now, we're looking at sizable increases. In the raw materials on the steel side of the metal containers business. 04/26. So in fairness, we're actually having pre buy conversations with some customers ahead of inflation that we're all expecting for 2026 outside of whatever court ruling happened between now and then.
So would that's more of the conversation versus trying to push orders out into '26 at this point.
Anthony Pettinari: Okay. That's very helpful. I'll turn it over.
Operator: We'll now take a question from Daniel Rizzo with Jefferies.
Daniel Rizzo: Hey guys, thanks for fitting me in. So back in, you mentioned that these are legacy issues with the with the destocking. I was wondering if back in 2008, 2009, the Great Recession, we saw something similar. And how long it lasted during that kind of downturn?
Adam Greenlee: 2008, 2009. What I do remember about that and your testing began because that was quite a few years ago, Metal containers volume was accelerating into the Great Recession. Right? So that's that's sort of what I was mentioning earlier that you know, for a very long time at Silgan Holdings Inc., metal containers was an indicator of economic activity because you would see, as times got tougher, metal food cans were the beneficiary of that. And we're seeing that to some degree now. So I'm trying to think of how the other categories performed then.
I just would say as consumers stretch dollars, without knowing specifically, Dan, I would assume that it was a very similar kind of phenomenon that impacted our custom container segment at that time. And probably our beverage segment of our closures business. Prior to dispensing joining Silgan Holdings Inc. in 2017.
Daniel Rizzo: And then conversely, if credit is eased and the consumer is seeing some relief, how long till that kinda flows through to your customers and to you guys? Is it relatively quick, or does it take a couple quarters, or how should we think about that? If things were to improve for the consumer because of that?
Adam Greenlee: Well and I missed the first part of your question. So
Daniel Rizzo: If credit if credit if credit eases Right. And the consumers
Adam Greenlee: Yeah. I do think that again, we're you're talking about the consumer that's making a purchase point decision of feeding their family or buying that you know, hard surface cleaner. A given month. So I think you take a little bit of that pressure off and ultimately that consumer because these are not cyclical products. They're consumer staples. I think they buy both products. And that's what we've seen for a very long time. So if you provide that relief, to those consumers, I do think purchase patterns return more to normal. As we've seen for many years in this business.
Daniel Rizzo: And I'm just curious about is there a time frame that we should think about? How fast it flows through to you specifically?
Adam Greenlee: I think that would flow through pretty quickly. If the consumer is you know, has relief and is less worried about stretching that dollar I think it those decisions get made at the purchase point right then. It's pretty quick.
Daniel Rizzo: Thank you very much.
Operator: We'll now take a follow-up from George Staphos with Bank of America.
George Staphos: Hey, guys. Thanks for taking the follow on. I'll just keep it to one since it's late. You know? So as you look out to next year, I know you're not guiding per se, but you did say you do expect low to mid single digit growth in dispensing and specialty. Metal should do at least as well as this year. Assuming you have a new owner of the affected customer. Which would mean that volumes are, you know, at least flat I forget exactly what you said on because custom, but what would be the reasons why you wouldn't have growth in 2026 in volumes and in earnings. Versus '25, recognizing you're not giving formal guidance here?
What is the biggest at this juncture, concern you have? Would it be uncertainty in tariffs, Although in some ways that could actually help you what would it be? And should we at least expect some growth next year? Guys, and good luck in the quarter. Thanks for taking my question.
Adam Greenlee: Yeah. Thanks, George. You know, I think as we're putting the building blocks together for '26 and then as you alluded to, and we said we're not done yet. But, you know, you're right. I think you've got some of the positives there. I think, you know, some of the headwinds we're gonna face is increased interest expense. Obviously, we've got the new bonds. We'll have a full year of the new four and a quarter bonds that we just issued in Europe. Investment grade bonds, the 1.4% notes come due in April. So, you know, we'll we'll probably be very opportunistic just as we were 2025 as we think about refinancing those bonds.
But at 1.4%, even if we're know, utilizing our revolver, you know, we're we're going to have negative arbitrage on that rate as well. So interest expense will be a headwind. And we're going through the development of exactly what that headwind looks like. I think tax will continue to be a slightly different profile for us going forward. We you know, with the Banner acquisition, we've got quite a bit more income outside of The United States. And The US is our lowest cost tax jurisdiction for many, many years. That was it will continue to be our largest tax jurisdiction, but we have more growth outside of The US at higher tax rates.
So you know, I think it's gonna probably be north of '25 without giving you guidance yet. And we'll see where we wind up as we get through the business planning process. And I think he has the rest of the components right. You know, I'll go back to what I said at the beginning of the call Nothing's changed. As far as how we as a company think about the growth profile of our dispensing and specialty closures business, Nothing has changed about how we think about the growth profile of our metal containers business. And nothing has changed about how we think about the growth profile of our custom containers business.
We have very unique and or attributes this year, that are impacting our performance. And, you know, unfortunately, we're dealing with that as we speak. But, you know, we don't anticipate those repeating in 2026.
George Staphos: Thanks so much, Adam. Sure.
Operator: And that does conclude our question and session for today. I'd like to turn our conference back over to Mr. Adam Greenlee for any additional or closing comments.
Adam Greenlee: Thank you, Anna. We appreciate everyone's interest in the company, and we look forward to sharing our fourth quarter and full year 2025 results in January.
Operator: And once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.