Good day and welcome to the Silgan Holdings First Quarter 2024 earnings call. Today's conference is being recorded. At this time, I'd like to turn the presentation over to Mr. Alex Hutter, Vice President of Investor Relations. Please go ahead, sir. Thank you and good morning. Joining me on the call today are Adam Greenlee, President and CEO, Bob Lewis, EVP Corporate Development and Administration, and Kim Ulmer, SVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made on this conference call may be forward-looking statements. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company and, therefore, involve a number of uncertainties and risks, including but not limited to, those described in the company's annual report on Form 10-K for 2023 and other filings with the Securities and Exchange Commission. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statements. In addition, commentary on today's call may contain references to certain Non-GAAP financial metrics, including Adjusted EBIT, Adjusted EBITDA, Free Cash Flow, and Adjusted Net Income Per Diluted Share. A reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release and under Non-GAAP financial information available in the Investor Relations section of our website at silganholdings.com. With that, let me turn it over to Adam. Great. Thank you, Alex. We'd like to welcome everyone to Silgan's First Quarter 2024 earnings call. We're off to a solid start in 2024, and our team delivered another quarter of strong financial performance while making progress towards our long-term strategic objectives in delivering on our multi-year cost improvement initiatives. We delivered first quarter adjusted EPS at the high end of the expected range, with strong operational and cost performance driving our results as the Silgan team remains focused on managing the items that are within our control. While volumes in the first quarter were mixed relative to our expectations entering the quarter, we continue to believe that the broad destocking trends we have been experiencing over the past year are coming to a conclusion during the first half of 2024 and are seeing positive trends early in the second quarter. Additionally, in certain instances, we have seen customers accelerate their first-half destocking initiatives to be more weighted to the first quarter than initially expected, and we continue to see positive activities from our customers in the marketplace with increased promotional spending in 2024 that has expanded to include more of the products we produce. Turning to our segments, our dispensing and specialty closure segment delivered another strong quarter as market demand for our global dispensing products remains strong, with significant momentum in the marketplace. Our market-leading innovation, production and service capabilities, and excellent operational execution continue to drive compelling value for our customer partnerships. Consumer demand for our food and beverage products continues to be strong, and we have been encouraged to see increased promotional activity in the market for many of these products as seasonal demand begins to accelerate. As expected, our customers' destocking plans for the first half of 2024 impacted our volumes in the quarter, and in some cases, destocking plans have been accelerated to be more weighted to the first quarter. In Metal Containers, we continue to make progress on our cost reduction initiatives during the quarter and believe we are well positioned to service the market from our low-cost manufacturing network while maintaining the ability to grow volumes through our market-leading pet food platform. First quarter Metal Containers volumes were fairly consistent with our expectations as our customers worked to achieve the majority of their first-half destocking initiatives in the first quarter. Our Custom Containers segment delivered strong results in the quarter, with volumes improving sequentially for the first time in several quarters as we saw strong volumes related to the commercialization of new products. In addition, customer order patterns began to show signs of recovery from the destocking trends we have seen over the past several quarters. Turning now to our outlook for the full year of 2024, we continue to believe the business is positioned to deliver volume and profit growth and are pleased to confirm our estimates for the year, which includes adjusted EPS growth of 7% at the midpoint of our guidance range. We continue to expect dispensing and specialty closures volumes to grow by a mid-single-digit rate, with high single-digit growth in our dispensing products and low single-digit growth in our closure products, driving better profitability for the segment with improved mix. Metal Containers volumes are expected to grow by a low single-digit percentage as we continue to expect mid-single-digit growth in pet food, which represents approximately half of our overall volume for the segment, but now expect that growth to be partially offset by lower pack volumes in 2024. Fruit and vegetable volumes, which represent roughly 20% of our Metal Container volume, are now expected to decline by a mid-single-digit rate as a large pack customer has announced plans to reduce their North American pack in 2024 to pursue a reduction in working capital and to decrease its financial leverage. This decrease will lead to both lower volumes and unfavorable fixed cost absorption in our system in 2024. Custom Containers volumes are expected to grow by a low single-digit percentage, with volumes inflecting positively in the second quarter and improving through the year as destocking trends conclude and new commercial awards continue to provide incremental volume and profit contribution through the year. As we enter the second quarter, we're confident that our focus and our active and effective management of these factors that are within our control will lead to another year of strong financial results for the company. Our strategic growth initiatives continue to see success in the market and shape the company's future, and our customer partnerships remain strong. With that, Kim will take you through the financials for the quarter and our estimates for the second quarter and full year 2024. Thank you, Adam. As Adam highlighted, our business continued to deliver strong financial results in the first quarter despite evolving customer plans, and we delivered adjusted EPS at the high end of our expected range. Net sales of approximately $1.3 billion declined 7% from the prior year period, driven primarily by lower volumes in each of our segments and the pass-through of lower raw material costs. Total adjusted EBIT for the quarter of $135.5 million, decreased by 9% on a year-over-year basis, primarily due to lower volumes in each of the segments. Higher adjusted EBIT in custom containers offset expected lower adjusted EBIT in the dispensing and specialty closures and metal container segments. Adjusted net income per diluted share was $0.69, with lower volumes primarily driving the year-over-year decline. Turning to our segments, sales in our dispensing and specialty closure segment declined 8% versus the prior year, primarily as a result of lower volume mix of 8%. The decline in volume was driven primarily by first-half 2024 customer destocking activities in domestic food and beverage markets, which accelerated during the quarter to be more weighted to the first quarter. First quarter dispensing and specialty closures Adjusted EBIT decreased $5 million versus the prior year period, with strong price cost, including mix, that overcame the negative impact of the sell-through of higher-cost metal closure inventory in Europe due to lower metal costs in 2024 and partially offset the negative impact of lower volumes. In our metal container segment, sales declined 8% versus the prior year, driven primarily by lower volumes of 5% as compared to very strong volumes in the prior year period. Destocking priorities continued to weigh on order patterns throughout the quarter, and similar to our Dispensing and Specialty Closures volumes, we did experience customers accelerating first-half destocking priorities to be more first-quarter weighted. Price mix was negative 4% in the quarter as a result of the contractual pass-through of lower raw material costs. As expected, Metal Containers adjusted EBIT was below the prior year quarter, primarily due to the impact of unfavorable price costs, including mix, mostly as a result of the sell-through of higher-cost inventory in our European business due to lower metal costs in 2024 and the impact of lower volume in the quarter. In Custom Containers, sales declined 3% compared to the prior year quarter, driven by a 3% decline in volumes. Custom Containers Adjusted EBIT increased $100,000 as compared to the first quarter of 2023, primarily due to improved price costs, including mix, which more than offset the impact of lower volumes. Looking ahead to 2024, we are confirming our estimate of adjusted net income per diluted share in the range of $3.55 - $3.75, a 7% increase at the midpoint of the range as compared to $3.40 in 2023. This estimate includes corporate expense of approximately $25 million, interest expense of approximately $170 million, a tax rate of 24% - 25%, and a weighted average share count of approximately 107 million shares. From a segment perspective, mid-single-digit percentage total Adjusted EBIT growth in 2024 is expected to be driven primarily by the Dispensing and Specialty Closures and Custom Containers segments, with Metal Containers segment Adjusted EBIT below the prior year record level, primarily due to the previously discussed reduction in fruit and vegetable volumes. Based on our current earnings outlook for 2024, we are confirming our estimate of Free Cash Flow of approximately $375 million in 2024, with Capex of approximately $240 million. Turning to our outlook for the second quarter of 2024, we are providing an estimate of adjusted earnings in the range of $0.82 - $0.92 per diluted share as compared to $0.83 in the prior year period. The 5% year-over-year improvement in adjusted earnings in the second quarter at the midpoint of the range is driven primarily by improving volume trends and operating performance in each of the segments, partly offset by unfavorable price costs, including mix in our Metal Containers segment. Second quarter Adjusted EBIT is expected to be above prior year levels in Dispensing and Specialty Closures, with improved price costs despite a continuing but lesser impact from the sell-through of higher-cost European metal closures inventory due to lower metal costs in 2024 and a low to mid-single-digit improvement in volumes in the quarter. Second quarter Metal Containers Adjusted EBIT is expected to be below the prior year record level, with volumes comparable to the prior year period. The year-over-year decline in Metal Containers adjusted EBIT is driven by unfavorable price costs, including mix, predominantly due to lower production volume in the quarter and the negative impact on fixed cost absorption, with the previously discussed reduction in fruit and vegetable volumes for a large pack customer. Second quarter adjusted EBIT in the Custom Container segment is expected to be modestly above prior year levels as a result of low single-digit volume growth. That concludes our prepared comments and will open the call for questions. Anna, would you kindly provide the directions for the question and answer session? Yes, ma'am. Thank you. If you would like to ask a question, please signal 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. If you find your question has been answered, you may remove yourself from the queue at any time by pressing star two. 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. Hey, guys. Good morning. Good morning, Ghansham. Hey, so Adam, on the accelerated destocking of the first quarter that you called out, I assume that was some to some extent a pull forward from the what you previously expected in the second quarter as well. Can you just give us a bit more color on that? You know, which categories were most impacted as you kind of think about the various operating segments? Yeah, I think you've got the right way to think about it, Ghansham. I mean, we had expected some destocking activity primarily in food and beverage, again, mostly in North America for our business, to impact the first half of the year. And what we saw, you know, again, we talk a lot about our customer relationships, but just kind of in those regular discussions that we have with our food and beverage customers during the first quarter, you know, several made the decision to bring forward that destocking activity. And really, they increased the percentage of their sales from their inventory, and that affected late in the first quarter our shipment volumes. So really, we were really right on plan kind of halfway through the quarter as far as our volume expectations. And so what's interesting is, you know, that did happen late in Q1. We're sitting here on May 1st, so we've got a pretty good read to how Q2 has started now too, at least from a volume perspective. So, we've started Q2 strongly, so we are seeing the benefit of, of that volume returning and, and the positive inflection that we were anticipating for Q2. That's with the month of April already behind us. And our order book for Q2 is really solid right now. So we're, we, we believe that we're reaching that inflection point that we've been talking about for some time. Again, product-specific, you know, you can think about pet food on the, the metal container side, and you can really think about our beverage business in the, the closure, dispensing and specialty closure segment. Okay, great. Thank you. And then just as a follow-up question to that, so if your customers, you know, pull forward inventory destocking into the first quarter, does that necessarily mean that they've changed their promotional cadence as they look out to 2Q and beyond? I'm just asking because, you know, obviously, you've seen a slight reacceleration of input costs and so on and so forth. So has there been any change in terms of your customers, the dialogue with your customers as it relates to promotional activity? Really, there hasn't, you know, we've got pretty good intel into that spend for promotional activity in Q1 and how that compares to the prior year. And so the increases that we were expecting were actually realized in Q1. And I think the important part of that, at least for our product, Ghansham, those promotional activities were pretty effective for our customers. So they were pleased with kind of that very directed, targeted promotional activity for the products that they were, were looking to promote, and, and it did lead to incremental sell-through. I think the other thing for us is, you know, we talk a lot about promotional activity in food and beverage. It certainly has expanded outside of those two categories into other segments for us in other parts of our business. You know, you can talk about home care, you can talk about lawn care, personal care, other products. We're seeing increased promotional activity across those segments as well. Fantastic. Thanks so much. We'll now take our next question from Gabe Hajde with Wells Fargo Securities. Morning, Adam. Kim. Morning, Gabe. I just had a question. You called out 20% of the pack mix or, excuse me, of your metal containers business being fruit, veggie. Would you disclose how much of that might be co-located with your customers? And we asked a similar question earlier today, just in terms of reading articles about imported full cans of food, just trying to measure risk across the portfolio. Sure. Maybe for that first question, I look, I think when you think about fruit and vegetable for us, it just the business model itself, right? We're, we're near-site to where those products are grown, right? They, they typically are, are grown across a certain set of acreage. Then they're aggregated to a filling site. We're, we're really close to where the products are actually filled. So that's broadly across our fruit and vegetable category. So, that's how I'll answer the first part of that. Clearly, on the, the import of finished goods, that's something that we've been tracking for some time. We continue to monitor that. In fairness, Gabe, it, you know, we've seen that over time with some fruit products, particularly coming from Asia. But as far as what's in our business today in fruit and vegetable, it really hasn't had much of an impact at all. It's really not a material volume that we've seen coming through and really just not enough to impact our customer's business at this point. Okay. Thank you. And then maybe a little bit trying to tie together, the Q1, I think segment profit or EBITDA, however you wanna think about it, was generally in line, despite the little bit of weaker volume backdrop. And so when I think about the rest of the year and kind of this multi-year cost-out program, did you guys perform a little bit better on that? I mean, I know you still called out $20 million, I think, for this year, keeping another $30 million on the table for next year. But was it just, you know, what was the offset, better performance? And then, like I said, that $20 million, is there potential for this year to be a little bit better than that, or let's just kind of wait and see? Yeah, it's a really good question. And as we look at Q1, what I'd tell you, Gabe, we have a very stable kind of operating environment for the first time in several years. And so we're sort of back to the Silgan playbook. I mean, we are good operators at the end of the day. And really, I think the primary impact of the first quarter was really just really good solid operating performance. And our normal continuous improvement activities, you know, really benefited the quarter and all the other programs that we've been working on. That's in addition to the multi-year $50 million cost reduction initiative. So, you know, we made really good progress. We've got several plans that we've rationalized. We've got assets that are, if not already, in the location they need to be. They're on their way. So we've made significant progress. There was a little savings in the first quarter from that $50 million project, but really, it was much more about the Silgan operating model and our continuous improvements that drove great operating performance in the quarter. Good to hear. Thank you. Thank you. We'll now take our next question from George Staphos with Bank of America. Hi, everyone. Good morning. Thanks for the details. Hope you're doing well. I, I guess I wanna take a different sort of approach to the question of destocking. So to the extent that your customers accelerated destocking in the quarter, Adam, does that? I know your order books are good, and that's encouraging, but does that give you any concern about what your customers are thinking about their volume outlook for the year, their ability to get product whenever they need it through the supply chain, right? I mean, you, you get restocking when as a purchasing manager, you're worried, you're worried it's gonna cost you more. You're worried you're not gonna be able to get it. You're worried that demand your, your supply won't keep up with demand. So is there a, a kind of a, a gray cloud in this narrative that, yeah, destocking is nearly over? Yes, it was accelerated. That's all wonderful. But it's partly because your customers are worried a little bit about the outlook in the second half of the year. How would you have us think about that? Yeah, it's an interesting take. You know, I think, again, what I would tell you is sitting here a month into the quarter, you know, we can talk specifics about maybe pet food as an example, where we did. That was coming next. Well, it was a late addition to the destocking activities last year, right? So it was one of the primary categories that was going to linger into 2024 in the first half. And so that was an area where we saw the accelerated destocking activity. April shipments were terrific, and we're seeing the growth in the order book for May and June back to where it should be. So again, as you know, George, we're so close with these customers where we are on-site, near-site, that we've got a pretty good understanding of what they believe their demand forecast looks at or looks like, excuse me, going forward. So I don't think it's a gray cloud. I think actually, the good news is that we're just about done talking about destocking because I think the larger impact in the first half just happened in Q1. And we're sitting here with quite a bit of confidence that we have reached that inflection point for our volumes as we sit here in the middle of Q2. The other thing I would tell you, just as an indicator, run over to our custom containers business for just a moment and really, you know, a different volume story, really, than what we were talking about in the other two businesses at this point. You know, the changing order patterns we were referencing, it's, there's good end-consumer demand, and then there's also short-order lead times where one of the items that we were concerned about is, as our customers reduced their inventories, they didn't have enough to meet the end-consumer demand. We're getting these kind of short-order, short lead-time orders, certainly in the custom container business, to support end-consumer demand. And so we just think for our products, which for the most part aren't discretionary, demand still remains very resilient, and we feel confident about the volume outlook. Thanks for that, Adam. My next question that I had is, and I think Gabe had sort of teed it up, and if you had answered it, I wasn't quite sure what the ultimate view was. But are you seeing any concerns? Do you have any concerns about procuring metal, steel, or aluminum given the various trade sanctions and other things that have been bantered about? I know the last few years have probably been very good learnings and learning periods for everybody, no less than for Silgan. I wouldn't imagine it's an issue, but nonetheless, wanna check that box. How do you view that right now? Yeah, sure. I think it's a good question. There's a lot of change going on, particularly on the metal supply base. And as you know, you know, with our size and scale, we feel like we are advantaged in getting the raw materials that we need to support our customers. So it has not been a problem for us. It's something that we actively manage each and every day. But our teams have done a really good job of maintaining that supply chain all the way throughout. And you know, we talked a couple of years ago, particularly on the aluminum side, about how we extended our supply chain and the network of suppliers that support our business. Yep. That's been beneficial as we work through any supply chain challenges. But as we sit here today, we're confident in our ability to procure the materials for our customers' products. Last question for me, and I'll turn it over. Have you seen within your, your segments any sort of evidence of and maybe you commented on this earlier if you did. I, I missed it. In terms of a trade down or a move by the consumer to lower price point, more staple types of products, and that showing up in your results or really not seeing that at all, you know, across your various categories and customers, how would you have us think about that from Silgan's perspective? Thank you. Yeah. My, again, another really good question. I, I think Q1's probably too early to try to draw a conclusion in our products for that. But I, I go to our Custom Containers segment where we have seen that increase in the, the short lead-time orders where consumers are seemingly focusing their spend on more nondiscretionary items. And again, that's really where we play with our business in all three segments, are primarily nondiscretionary spend. So I think our order books would say our products are continuing to do well. Our consumers remain resilient. But I think there is a, a component of that, George, that these are mostly nondiscretionary products. And I think we'll be able to comment further on that at the end of Q2 as we see those volumes play through. Thanks so much, Adam. Our next question will come from Matt Roberts with Raymond James. Oh, and it looks like he appears to have lost his connection. We'll move to Daniel Rizzo with Jefferies. Hi. You mentioned nondiscretionary spend being up, but I was wondering if you look at, like, fragrance and beauty, if that's still kind of intact as well or if consumer trends are perhaps shifting away from that? I think in the past, it's been mentioned that that's kind of fairly stable as well. Yeah, actually, you know, I mean, demand for our, our global dispensing products remains really, really strong. So, you know, that's really unchanged for us. And, you know, as we think about fragrance and beauty, we've, we've spent some time talking about which part of that market that we play in. And we are at the very high end of the kind of premium luxury end of, of that business. And those consumers really have not really changed their procurement patterns over some long period of time now. So really, we, we feel like those are, are largely unaffected. And then for some of our other, dispensing items, we, you know, as we were, preparing for some of our cost-out initiatives, you know, there, there were some instances where demand did outstrip our capacity. You know, we built inventory to move a couple of lines and had quite a bit of demand on those products. So that was part of our shortfall in Q1 that will indeed recover in Q2. And again, part of why we have such good confidence that DSC in particular is gonna see a nice inflection in volume in Q2. Does the increase in short lead-time orders suggest that your customers are willing to live kind of hand-to-mouth, so to speak, or can we expect a restock cycle, a real restock cycle, I don't know, sometime in the second half or shortly thereafter? Yeah, it's a really good question. I probably would try to answer that similarly to how I just answered George's question. I think there's a combination of things, Dan. And again, it's all underlying end-consumer demand remains strong for our products. We believe and we talked about a lot last year that we thought there were instances where our customers were taking inventory levels below historic levels. And, you know, we were having good conversations about that and maybe the need to replenish those. So, you know, there's a combination in Q1 of that happening. The order book's really strong for Q2. I'm sure it's a combination of those things as well. So I think it's a really good question that we'll have more detail at the end of the second quarter to really, provide a stronger opinion of what we really think is happening. But it clearly is a combination of all those. Last question. Do you get higher price points for short lead-time orders? Does it matter really? I mean, the length of I don't know. The length. It does depend. You know, I mean, remember, most of our business model is long-term contractual arrangements. So, for that part of our business, no, not really. Those prices are set over a long period of time with very calculable pass-through methods, etc. For our more transactional business, yes, we do. Okay. All right. Thank you very much. We'll now take a question from Matt Roberts with Raymond James. Hey. Good morning, everybody. Let's see if I can get this right. Sorry for the user error. That's all right. Quickly, on the fruit and vegetable customer, could you give a little more color on the timing of when that occurs, or is it just ongoing wind down through 2024? And it seems like you reiterated your volume outlook in metal containers for the year versus a couple of months ago. So are there any offsets within that segment we should be thinking of? Yeah. Look, for the timeline of the communication and how it impacts Silgan, couple of things. One, you know, the customer we're talking about announced it publicly kind of in mid-March. So we were working with them a little bit before that just to understand and, frankly, help them through the thought and planning process of how to implement a change like what they changed. As far as Silgan's concerned, how it affects us, again, most of our pack volume is in Q3. That's when our shipments are. As we've talked a lot about, we make, we build inventory. We make cans all year long. And so really, for us, we've got a production shortfall now in Q2 because we would have been building inventory for that particular customer for shipments in Q3 along with the pack. So you've got some lost absorption in Q2. And then as we turn to Q3, that's where you'll see the volume impact. So hopefully, that's clear. And then just reminding. Sure. Very quickly. Matt, of your the second part. Oh, I was saying, are there any offsets within the metal container segment? Yeah. Yeah. So in. Since the low single-digit period. In fairness, we've, you know you're exactly right. So, you know, in fairness, we're probably to the lower end of the range that we provided now versus maybe being at the higher end of kind of low single-digit. So, you know, I mean, we've got pretty good visibility to it now and feel comfortable that we're going to have growth in 2024. Okay. Thank you, Adam. And then on the $20 million in savings in 2024, I think you said there was a small portion in 1 Q. Are there any changes to that or how we should think about the timing throughout 2024? And hypothetically, if volume didn't recover as expected, or have you identified any incremental opportunities that could exist beyond the $50 million? Let me take the back part of that question, and I'll pass it over to Kim to take the first part. So as far as, you know, how we view responses to, you know, maybe potential volume reductions later in the year, I mean, number one, we are focused on driving cost out of our business each and every day. It's just part of our DNA, and it is what we do. We're really focused on right-sizing our capacities to the demand that we see with our customers and really, you know, don't think that there's any change to that as we sit here today. But that's an ongoing iterative process that we really do work on each and every day in each of our businesses. Remember that we've got some nice growth opportunities, as we sit here today in each of our segments as well. With that, I'll throw it to Kim. Sure. So of the $50 million cost reduction program, we had identified $30 million of cash this year as well as $20 million of savings. Most of that savings will be in the back half of the year. We have fully identified the savings and the cost to achieve it, and we're on track. Perfect. Thank you all very much. We'll take our next question from Mike Roxland with Truist. Yeah. Thanks, Adam, Bob, Kim, and Alex, for taking my questions. Adam, just wanted to get a little more color on where you're seeing demand outstrip your capacity? And what are you doing to address that demand in those categories, given what seems to be very strong order books on a go forward basis? Yeah. That's a really good question. I probably should have been clear when I was talking about that. So it is in our global dispensing business. So, you know, that is an area where we have been adding capacity over time. In this particular instance, it's a product line that, again, we had like a plan that we had worked through with our customers to relocate a couple of assets, to increase capacity. And as we did that, as we took those lines out of production and were relying on inventory, our customers' demand picked up just a bit. So, you know, they stripped through the inventory that we had agreed upon, prior to the asset move. The good news, that was in the first quarter, those assets are in place and producing now again in Q2. Unfortunately, it's a blip, but it's a good reason for a blip in that our customers' demand has remained very strong. We're now in a better position to supply that from a lower cost and from a higher capacity standpoint. Got it. Thank you for the color. And then, just, you know, continuing on the dispensing, especially for your segment, you know, last quarter, you mentioned some business wins. I think you highlighted that again in the press release today. Can you provide some more color on those wins and maybe what the cadence is of their deployment throughout 2024? Sure. I think in dispensing especially, I mean, it really is more on the higher-value products and, you know, talking about new product launches in fragrance and beauty. I'd rather not give the names of what those are. But again, just think about where we play in those segments. Again, it's the premium kind of luxury end of that profile that just has continued to experience really good growth for years now, regardless of what the economic circumstances are. So I think really, that's where we're having tremendous success, and we're having really nice success in other parts of the business. That's the one that we tend to focus our conversations on. Gotcha. If I can just slip one more in here because, you know, you did mention earlier, high single-digit growth in dispensing for the year. You're not really seeing any of your customers fade at all. Although when you look at some of the companies that have reported, on the fragrance side, they, you know, their volumes have been a little bit lackluster with certain companies, even like this morning, as they are calling out weakness in China. So just how do you reconcile, I guess, your growth in terms of premium or high-end fragrance with what some of the beauty companies have posted over the last couple, let's say, weeks or, or the last few months? Yeah. It's a good question, Mike. And it's a couple of things. One, again, it's the subsegment of that market that we participate in back to that premium and luxury end. So that's part of the answer. The other answer is, you know, I mean, our team's doing a really good job. We're winning in that market. Our innovation, our design, and research capabilities are clearly advantaged and being rewarded in that market space. We've become sort of a go-to in that market. So with new product launches, we are winning a disproportionate amount of those new product launches. And that's really what's driving our growth that I think is gonna look a little different than what those luxury retailers or fragrance companies, like maybe the ones you mentioned, are gonna show in their full company results. We're in a subsegment that continues to grow at a very nice clip. Gotcha. Thanks for all the color, and good luck, and take care. Thank you. We'll now take our next question from Arun Viswanathan with RBC Capital Markets. Great. Thanks for taking my question. Congrats on the solid Q1 in the face of continued de-stocking here. So I guess I wanted to ask about two things. First, I think maybe could you just comment again on what you're seeing on the promotional side? And are you hearing from your customers that they're accelerating their de-stocking because the interest rate environment is still very high and the carrying costs are high, and thus we wouldn't really see any kind of re-stocking until the interest rate environment normalizes? And then further on that point, are they conversely saying that, "Look, we're just gonna start doing more with lower inventory and operating a little bit, you know, more just in time"? Is that a structural change, or I mean, you guys have been in this industry for a long time. I just wanted to get your perspective on how your customers are really managing their own order portfolio. Thanks. Sure. You know, regarding promotional activity, again, what we've seen in several categories - and it's not just in metal containers. It also applies to dispensing and specialty closures and custom containers - there is a notable increase from our customers on their promotional spend in the marketplace. And certainly, I think we'd focus the next part of the conversation on metal containers. We think that spend is being very effective. It's an efficient spend that's very targeted. And where they allocate those promotional activities, they are seeing success. And I think the best example of that we can probably even go back a quarter or two and talk about the soup category that around the holidays, you know, very targeted, promotional activity that drove the volume, activity that they were desiring, and it was very successful. They are rolling that out in 2024 as part of their marketing campaign as well. So we think it's a more effective and more efficient spend that's very targeted. And we think so far, the results have been quite good. So we're very encouraged by what that means for our customers in 2024 and therefore our volumes as well. For destocking, look, I think the interest rate conversation's an interesting one. You know, I think that was part of our discussion last year is really, you know, destocking really sort of, as interest rates were rising, excuse me, destocking activity accelerated. And so, you know, we're just in regular dialogue trying to make sure we understand where inventory levels are, where they should be, and how that compares to historic norms. So I don't think anyone, at this point in our customer realm, is saying that we now wanna live with inventories well below our historic norms just because of interest rate. In fairness, I think our customers are talking about volume growth in 2024 as a key objective for their businesses. And in fairness, they need to have some inventory in place to do that because our lead times just don't support the turnaround that they need to have short order, recovery of orders from consumers. So it's an interesting question. I don't think the interest rates are driving any de-stocking activity at this point. Okay. Thanks for that. And, just as a quick follow-up, is there any way you could quantify inventories, whether at your level or your customer level, whether it stays as supply or weeks? I mean, last year, we heard that inventories were at the retail level, destocking from, say, eight weeks down to four weeks or something like that. But, I guess, yeah, just wanted to get your thoughts on that. And then you also mentioned something about nondiscretionary. I guess I'm just a little bit struggling with that just because it seems like, you know, some of these categories that appeared nondiscretionary are inflation-sensitive as well. So, maybe just give us your thoughts and, you know, on that question around inflation and the impact on your volumes. Thanks. Sure. I mean, I think I'll just take the last one first and just, you know, for me, as I sit here and think about our core products, go to food cans for just a minute. And, you know, you think about it's a meal. Soup is considered a meal. That really is not discretionary. It, it's not a supplement. It's not a snack. It's not something that is an accompaniment to another category. And I'd also go with pet food as an example. You know, those are full meals for pets, and it's half of our volume. So for us, we just don't think that our products really are discretionary, by any real stretch of the imagination on the metal container side. We've got functional beverage and other food and beverage products as well. You know, I think it's the rest of our business is less discretionary than maybe what some of our competition has as well. So, and then trying to quantify the inventory levels, I, I think, you know, our commentary on that last year, Arun, is that our discussions with customers quickly turned, call it maybe mid-year, from a days-on-hand to kind of a dollars-on-hand discussion given all the inflation that they had taken not only in their packaging materials but everything else that goes through with their products and ingredients, etc. and we're starting to transition back now to talking about unit-level inventories versus dollars. So I think that's an important point. Unit-level inventory is down, and we're now working very closely with our customers to figure out what the right level of inventory is going forward. But I don't believe, again, anyone is believing that they would be operating with inventory levels significantly below their historic norms as we go forward from a planning purpose. Thanks. Sure. As a final reminder, that is star one if you would like to ask a question. We'll pause for just a moment. We'll now take a follow-up from Gabe Hajde with Wells Fargo Securities. Hey, guys. I'll be brief. Thanks for taking the follow-up. I just wanted to ask, I think one of the large, functional drink customers that you're talking about, you serve here in North America restaged kind of how they get product to market. Curious if you experienced any impact from that or if it was discernible from this quote-unquote "long-term de-stocking phase" that seems now persists for 18 months, generally speaking, across packaging. Yeah. I, we agree. It's gone on longer than any of us had anticipated for sure. As far as that change and how they're supporting the market, really, for us, it does not touch our business. It just whether the distribution point is a direct store distribution or through a third party really doesn't affect us in really any way, Gabe. It's more about the end consumer demand that drives our volume, versus how the product gets to retail. Okay. Great. Thank you. Sure. It appears there are no further telephone questions. I'd like to turn the conference back to our presenters for any additional or closing comments. Great. Thank you very much, Anna. Appreciate everyone's interest in Silgan's performance in Q1. Look forward to discussing our Q2 performance in July. Thank you. Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.