Good day, and welcome to the Silgan Holdings Q2 2026 Earnings Call. Today's call is being recorded. At this time, I'd like to turn the call over to Alex Hutter, Senior Vice President, Strategy and Investor Relations. Please go ahead. Thank you. Good morning. Joining me on the call today are Adam Greenlee, President and Chief Executive Officer, Philippe Chevrier, Executive Vice President and Chief Operating Officer, and Shawn Fabry, Executive Vice President and Chief Financial Officer. 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 on 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 2025 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 or adjusted EPS. A reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release under the non-GAAP financial information portion of the investor relations section of our website at silganholdings.com. With that, let me turn it over to Adam. Thank you, Alex. We'd like to welcome everyone to Silgan's Q2 Earnings Call. We're pleased to have delivered another quarter of solid financial results in the Q2 as our teams continue to execute our plan for the year and position our company for continued success well into the future. Our businesses performed well in Q2 and successfully overcame some significant challenges, including a dynamic geopolitical and operating backdrop. Our team successfully managed significant cost inflation, normalizing order patterns, and developing market conditions to deliver results that were above the midpoint of our expected range. Our results in Dispensing and Specialty Closures were consistent with our expectations, and we delivered another quarter of strong growth in products for the fine fragrance market. Our teams continue to compete and win in this high-value market as our customer partnership model, differentiated technology, and market-leading innovation continue to set us apart from our competition. While overall market conditions remain mixed and were softer than expected in Brazil in Q2, our business continues to outperform the trends in our end markets. Additionally, the value we provide through these critical dispensing products was once again validated in the market as we successfully implemented commercial actions during the quarter to recover cost increases we have seen during the year as a result of raw material and other inflation. Our Metal Containers segment reported another quarter of strong organic volume growth in products for wet pet food, which grew 7% year-over-year despite facing more challenging comps from the prior year. Our team successfully executed a new long-term supply agreement in the vegetable market. We are eager to have a conclusion to the multi-year disruption created by this unique customer situation and looking forward to continuing our long-term partnership with the new owners of this business. Overall volumes in the Metal Containers segment were flat year-over-year as the growth in pet food products was offset by the anticipated normalization in order pattern timing in the vegetable and soup markets. In Custom Containers, our team delivered another quarter of solid results despite significant raw material volatility associated with higher crude oil prices, with volumes comparable to prior levels after accounting for business exited as part of our cost reduction program. Our Q2 results continue to display our team's focus on executing our plan in 2026. We are pleased to have delivered another strong quarter of financial results. As we move into the H2 of 2026 and past some of the challenges that we planned for in our H1 results, we are confident in our ability to deliver organic growth in the Q3 and Q4 s despite the incremental challenges that have developed since we last reported. As always, our unique portfolio of consumer staple products and end markets, our long-term partnerships with our customers, our market-leading innovation, our unique capital deployment model, and our low-cost global manufacturing footprint continue to differentiate Silgan in the market and position us to outperform through various macroeconomic and geopolitical backdrops. Turning now to our outlook. We are confirming our estimates for 2026 earnings and free cash flow. Our volume expectations for the remainder of the year remain largely unchanged. We continue to expect Dispensing and Specialty Closures organic volume mix to grow by a low to mid-single digit rate in 2026, driven by low to mid-single digit growth in our dispensing products. Our Metal Containers volumes are on track to grow by a low single-digit percentage, driven by mid-single digit growth in pet food and stable volumes for human food. We continue to expect our Custom Containers volumes to be comparable to prior year levels after accounting for volumes exited related to our restructuring plan, with H2 volumes higher than the prior year on a comparable basis as we commercialize new business. We remain laser-focused on executing our plans for the year and delivering on our longer-term strategic growth initiatives and are confident in our ability to deliver on both. With that, Shawn will take you through the financials for the quarter and our estimates for the Q3 and full year of 2026. Thank you, Adam. As Adam highlighted, we reported another quarter of strong results in the Q2 of 2026, with adjusted EPS coming in above the midpoint of our expected range due to strong operational EBIT performance and favorable interest expense, which was partially offset by higher corporate expense. Net sales of approximately $1.6 billion increased 7% from the prior year period as a result of the pass-through of higher raw material and other costs, mostly in our Metal Containers business. Total Adjusted EBIT for the quarter of $185 million was 4% below the prior year, with higher Adjusted EBIT in our Custom Containers segment, offset mostly by higher corporate expense and lower EBIT in the Metal Containers segment. Adjusted EPS of $0.98 decreased $0.03 from the prior year period due to lower Adjusted EBIT, which was partially offset by lower interest expense. Turning to our segments. Q2 sales in our Dispensing and Specialty Closures segment increased 2% versus the prior year, primarily as a result of the pass-through of higher raw material and other costs in foreign currency translation, which was partially offset by lower volume and less favorable mix. Volumes in the quarter were impacted by softer market conditions in Brazil, which contributed to a 1% decline in segment unit volumes and also caused an adverse impact on the mix of products sold. As expected, Q2 Dispensing and Specialty Closures Adjusted EBIT was comparable to the prior year levels, with favorable price over cost offset by lower volumes and less favorable mix. The combination of lower volumes in Brazil and less favorable mix impacted the Q2 by approximately $5 million. In our Metal Containers segment, sales increased 13% versus the prior year quarter as a result of the contractual pass-through of higher raw material and other manufacturing costs, principally related to steel and aluminum, and volumes were comparable to prior year levels. As Adam mentioned, higher volumes for wet pet food products were offset by the anticipated normalization of order patterns for products in the fruit and vegetable market, a result of the change of ownership in one of our previous customers in this market. Metal Containers Adjusted EBIT was below prior year levels, as higher year volumes of smaller containers for pet food markets and lower volumes of larger containers for fruit and vegetable markets resulted in a less favorable mix of products sold. In Custom Containers, our results were largely consistent with our expectations as sales increased 3% compared to the prior year quarter due to favorable price mix, which was partially offset by a 4% decline in volumes. As expected, volumes were below prior year levels due to the continued impact of the exit of lower margin business associated with the planned footprint optimization. Custom Containers Adjusted EBIT was above prior year levels as a result of favorable price over cost, including mix, which includes the cost savings associated with the footprint optimization that drove lower volumes. Turning to our outlook for the Q3 of 2026, we are providing an estimate of adjusted earnings in the range of $1.21 to $1.31 per diluted share as compared to the adjusted EPS of $1.22 in the prior year period. At the midpoint, this estimate assumes higher year-over-year Adjusted EBIT of approximately $10 million, interest expense of $50 million to $55 million, and a tax rate of approximately 25%-26%. Volumes are expected to be above prior year levels in all segments on a comparable basis. For the full year of 2026, as Adam discussed, we are confirming our estimate of adjusted EPS in the range of $3.73 to $3.93 as compared to $3.72 in 2025. This estimate continues to include low to mid single digit percentage total Adjusted EBIT growth, corporate expense of approximately $50 million, interest expense of approximately $200 million, and an expected tax rate of 25%-26%. We continue to expect low to mid single digit volume growth in Dispensing and Specialty Closures, low single digit volume growth in Metal Containers, and low single digit comparable volume growth in Custom Containers. Based on our current earnings outlook for 2026, we are confirming our estimate of free cash flow of approximately $450 million, which includes CapEx of approximately $310 million. With that said, we will open the call for questions. Katie, would you kindly provide directions for the question and answer session? Thank you. If you would like to ask a question, you may 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 our equipment. Once again, star one for questions. We will go first to Matt Roberts with Raymond James. Hey, Adam, Shawn, Alex, good morning. First on Brazil. You could speak to how big this is within DSC, where exactly that weakness was. Shawn, I believe you said it was a one point headwind of volume mix in Q2. Please correct me if I'm wrong. If that is correct, ex-Brazil, what were the drivers of the volume mix declines in that segment, and how does that influence your thinking for H2? What gives confidence that there can be an acceleration in H2 given some volatility in Brazil? Seems like the volumes are low single digit to mid single digit now for 2026. Is that all Brazil or anything else to be mindful of? Hey, Matt. It's Adam. We'll both jump in on this one. I think you've got that right. Brazil, to put some context to it. In Brazil, in the region, we had about a 15% volume decline year-over-year. A significant change for us I'd remind you that we had planned for quite a few unknown activities this year in our overall guidance. We're pleased to continue to be able to absorb that and deliver the results that we had guided to. You're right that overall it's about a 1% decline for us. We talked about volume mix in the segment being down 3%. Really, that's 1% volume, 2% mix, just for some additional clarity there. Outside of that, the balance of the business essentially looks flat. We feel really good about the performance, and it was right in line with the expectations that we had for the full year. Nothing's changed from that perspective. I think as we look at Q3, what's included in our guidance is a similar impact from Brazil, with a recovery starting in Q4 and to be fully recovered as we head into 2027. Just to provide a little context, as we go around the world, Europe was very strong for dispensing, especially closures. We talked about our performance in fine fragrance. It is largely a European market for us, although we do those products also in Brazil and North America as well. The North American region continues to be a little bit of a mixed bag. It's a tougher market for us. I think with the K-shaped economy, we're seeing a variety of performance by segment. Our higher-end segments continue to do very well. I think the low end, we're seeing a good pull through. It's the middle part of the market that I think with all of the volatility that occurred in Q2, that was a little choppy for us in Q2. Super helpful. Appreciate all that color. Maybe one on metal. I believe in the prepared remarks, you noted more seasonal order patterns for fruit and veggie pack. How did human food perform in Q2? Given that you did reach that long-term supply agreement, what type of visibility does that give you into Q3 and H2 volumes in metal? Any comments on how the pack season is shaping up at present? Thank you again for taking the questions. Yeah, sure. As we look at Q2, again, I think as Shawn had said, and I had mentioned too, pet food was up 7%. Another just terrific quarter for pet food. The human food side, veg was down double digits, and soup was down double digits as well. I'd say that's pretty much in line with our expectation. As we talked previously, the large customer that we've been discussing for so long in the veg market, those assets came to us in a self-manufactured takeout. As part of that, the prior owner of those assets once upon a time had made cans all year long and essentially sold cans to themselves, I would say, all throughout the year. As we acquired that business, we maintained that business model. As we now move to a new agreement with the new owners, those cans are going to be sold much closer to the time that they're filled. Therefore, Q3 will be a higher volume quarter for us for that particular customer going forward. From a visibility standpoint, as we look at the fruit and veg pack, particularly in North America, growing conditions have been good thus far. The high heat actually has been beneficial to the crops. I think our expectations are up just a little bit for the veg pack in particular, which will bring into a little more volume later into the pack season, which will drop into Q4 for us. Good visibility, feel confident in our customer forecast for the pack season, and our ability to deliver as well. Well, as always, thanks again. Thank you. We'll take our next question from Mike Roxland with Truist Securities. Great. Thank you, Adam, Shawn, and Alex, excuse me, for taking my questions. The first one I had, last quarter, Adam, you mentioned commercializing 2027 product launches and developing 2028 and 2029 product launches at that point in time. How much of your fragrance and beauty business is already locked in for 2027? Relatedly, at that point in time, you mentioned already working with some of the largest perfume houses and the like. Are there any incremental opportunities to work with potential customers that you're not currently aligned with? Sure. As we look at fragrance, again, it's got that longer developmental cycle. We also have long-term contracts that cover a lot of the franchises that we support. To your point, Mike, I mean, 2027, we've got a pretty good view on it as of right now, and most of that business is contractualized because to meet those launch dates, those products are already in not only past development, but in the commercialization stage now. Feel really good about that. We are a big player in the fine fragrance or the premium segment, there's always more opportunity to work with existing customers and others in the space. I think what has really set us apart now for several years is the differentiated technology that we bring to bear, this customer partnership model that we continue to talk about that we think is very valuable to our customers. Particularly this market where the utility of the product that we provide is so critical to the overall package for the fragrance houses. It continues to be a really good story. We think we've got pretty good clear sight to continued growth in the high single-digit rate for fragrance products around the world and feel really good about our position in that market. Got it. Thanks for that. Just one quick one on healthcare. I believe you've mentioned it's a $250 million business targeting nasal and ophthalmic applications. Your goal being to double that business organically over the next three to five years. That implies a CAGR of about 15%-20%+ per year. Can you help us frame how you intend to drive that type of internal growth? Obviously, you've had some help recently from Vayner and tapping into existing commercial relationships domestically, but just wondering how you intend to drive that growth organically over the next three to four years. Thank you. I think when we first started talking about that, the healthcare business for us was about $200 million. It's now already grown to $250 million, I think we're well on our way. With those long developmental cycles, again, most of that volume is commercialized or is contractualized, I should say, over the course of the next couple of years. We continue to have additional opportunities that come to us in our specific areas of nasal and ophthalmic. I think we've got a competitively advantaged product, and we've got some design and innovation capabilities that we're bringing to bear that are of terrific interest. I think as we think about potential growth beyond where we are in nasal and ophthalmic, it's taking our technology and applying that to different applications for drug delivery. Feel really good at that, and that is part of the low to mid-single-digit this year as well, is we've got some healthcare that is ramping up. It was planned to ramp up for the H2 of the year all along, and I would say it's probably a little heavier in the Q4 as we think now about the H2 of the year. Thank you. Thank you. We'll take our next question from Ketan Mamtora with BMO Capital Markets. Good morning. Thanks for taking my question. Perhaps to start with on that, the resin lag that you talked about, the impact of $10 million, is that still sort of consistent with how you all are thinking right now? Yeah. Well, number one, welcome to the space. It's great to have another analyst in the coverage group. Welcome to the coverage. As far as that $10 million, that was a Q2 item that we talked about. That's kind of the net unrecovered inflation, primarily resin in all fairness. The net unrecovered inflation that we experienced. It played out essentially exactly as we thought. There's a tremendous amount of volatility, as everybody knows, still in those markets. That'll be unrecovered until such time as resin declines in the future. We just don't have clear visibility as to when that's going to happen. It played out pretty much as we expected. It's behind us now. As resin falls in the future, that will be a benefit back to Silgan at that point. Got it. No, that's helpful. Then just switching to capital allocation. Curious how you guys are thinking about sort of M&A opportunities. How is the pipeline looking at the moment? What is the bias between share repurchases and M&A at current sort of valuation levels? Thank you, Ketan. This is Shawn. I'll jump in then turn it over to Alex to answer the M&A side of the question. Really nothing's changed with respect to how we view capital deployment. We have a returns-based decision model that we've been using for many, many years. Everything is benchmarked against share buyback as a hurdle under that model that we consider. We make the decisions that we feel are best for our shareholders and create the most shareholder value. I think we look at kind of where we're going to land at the end of the year. We believe we'll be below the midpoint of our target range, somewhere below that 3x leverage. We're right where we would like to be with respect to having all options available to us, inclusive of M&A. Ketan, on the pipeline, look, it remains an active environment on the M&A side, a fairly full pipeline. It's been that way for some time. I think as you know, what you'll see from us, as Shawn mentioned, is the continued discipline on capital deployment. That hurdle rate moves around on alternative uses for capital. Ultimately what we do is we take a long-term view on capital deployment and what will create the most value for our shareholders. That's what we execute on. Perfect. Thanks very much. Good luck in H2. Thank you. We'll take our next question from Arun Viswanathan with RBC Capital Markets. Great. Thanks for taking my question. Hope you guys are well. Just going to get your thoughts on maybe some of your customer behavior. Do you still see continued promotional activity across some of the major verticals? I guess, what could you share on that side and to the effect that could translate it into what your outlook on volumes would be? I guess we'd be interested in that as well. Thanks. Sure. Obviously, a fairly volatile environment today between tariffs and resin pricing and costs being what they have been through Q2. Our customers and most CPGs are continuing to pass that inflation onto the consumer. I think what we've seen the change in 2026 versus maybe prior year is, I think in the prior year coming out of the post-COVID era, our CPG customers for the most part were willing to trade price and margin versus volume. I think there's a much greater focus on volume right now throughout CPGs and with many of our customers. They are using and they're viewing promotional activity as a Just a tool in the toolkit to move volume. I think with that focus on volume, what we continue to see is where the target promotional activity is being used in the marketplace, it is actually working, and it is driving volume in certain segments. We've continued to point out in our wet pet food segment, particularly in cat, there's been targeted promotional activity for some time. We do think that is driving volume. It is successful when it's applied in a targeted manner right now for the consumer who continues to seek out value. We think our customers are aligned to focus more on volume in 2026 than what had been done in the prior years. Okay. Thanks for that. Also maybe if you can just describe some of the bolt-on M&A opportunities. Do you see that more so in the closures area at this point? Thanks. Yeah, Arun, it's Alex. We obviously don't comment on any specific assets in the market. I think what you've seen from us over time is that we typically look at anything that's rigid packaging for consumer goods, largely in the developed markets. What that has meant and where we've found the highest returns over the past several years has been in the Dispensing and Specialty Closures market, where we've found higher margin, higher growth assets that can generate really strong returns over time. We look at a broad range of opportunities, and that's kind of the opportunity set. The only thing I would add to that is that, I think as we look at our three business franchises, they're all performing at a pretty high level right now, and I think they're all capable of dealing with acquisitions if that is in the framework for any of the three business segments. I look at the margin profile and the operating leverage that we have. We feel really good about all three of our business segments at this point. Cool. Thanks. Thank you. We'll take our next question from Anojja Shah with UBS. Good morning. I wanted to go back to Brazil a little bit. Can you give a little more detail on was it market or end consumer driven, or was there a share shift or something like that? I think you mentioned recovery in Q4. What's driving that? Sure. Brazil, look, it's an inflationary market, and it's taken significant inflation in Brazil for many years now. We've done a really good job of passing that through to our customers, who obviously pass that through onto the market. This is all about the market. We've not lost any share. We've got a terrific position in the Brazilian market for our high-value dispensers. I think the thing that maybe we haven't said yet is those high-value dispensers, the volume reduction in Brazil also generated quite a bit of the mix impact that we had in the quarter too. Really for us, it's a temporary action, I think with our customers in the market in Brazil. They're expecting some recovery starting late in Q3. We think that'll bleed into Q4 from a seasonality standpoint. Really it's the same holiday season kind of discussion that we've had about Brazilian activity as well, that our two largest customers in Brazil, a good portion of their revenue comes through the holiday events in the Brazilian region. We feel pretty comfortable that we'll begin that recovery in Q4 and be fully recovered as we head into 2027. Great. Thank you for that. I just was wondering if we could put a finer point on your volume expectations for metals in Q3. I think you said low single digit for the full year, but I know in Q3 you have that customer timing issue, which should be a help. How do you balance that against a pretty tough comp? Sure. We've got a couple things working. Obviously, we've got continued growth in wet pet food that we feel really good about. Veg is going to be up year-over-year with the timing issue coming out of Q2 that we talked about. I think we're looking kind of low to mid single-digit volume growth for Metal Containers in Q3. Yes. Anojja, the only other thing I'd point out is, remember, we have the timing, volumes came out of Q2 into Q3, that will help Q3 this year. Right. Yeah. I got that. Thank you so much. It's helpful. I'll turn it over. Thank you. We'll take our next question from Daniel Rizzo with Jefferies. Hi, everyone. Thanks for taking my questions. You mentioned your contracts in healthcare and the new contract in Metal Containers. I was wondering if these contracts have clauses like minimum purchase requirements or how they're kind of structured in that regard. Yeah. We don't really talk about any individual contracts. Maybe I'll just take it up one level and talk about Silgan. Particularly in the Metal Containers side of the business, that business has long focused on requirements-based contracts. You can think of our long-term contracts that we're 100% supply for their requirements. Typically, those never had a minimum purchase requirement. Silgan takes the risk essentially on the volume side, but also gets the full upside of any volume gain. I think in other parts of our business, we've got a variety of contractual language. I think healthcare, to your point, probably has a little more provision around kind of the risk of volume and some minimum requirements because of the capital that's required that goes into those types of investments. All right. That's very helpful. Just my second question is, I think you mentioned that corporate expenses were a little elevated in the quarter, and I was wondering if this is kind of how we should think about it going forward, or if there's something now with just a lot of the moving pieces that is going to kind of fade away as we move through the end of the year and into 2027 and beyond. Sure. I'll take that one. As we mentioned, we're constantly looking at everything rigid packaging. This particular category versus spend category can be lumpy over the years, in terms of any single quarter. Overall, we feel pretty confident with the $50 million guidance that we're giving for the full year, and that includes the increase that we experienced in H2. For H1, excuse me. Thank you very much. As a reminder, star one if you would like to ask a question. With no additional questions in queue, that will conclude our question and answer session. I'd like to turn the call back over to Adam Greenlee for any additional or closing remarks. Great. Thank you very much, Katie. Thank you all for your interest in Silgan. We're pleased that we've delivered a H1 that's slightly ahead of our original expectations as we came into the year, confident in our delivery of our H2 performance. Thank you. Thank you. That will conclude today's call. We appreciate your participation.