Crown’s first-quarter results lifted by global beverage can sales
Leading can maker Crown has reported first quarter sales of US$1.88 billion, an increase of 5.9% compared with the same period in 2010.
Beverage can sales were up in the Americas region, reaching $540m, while in Europe sales were up to $340m compared to £314m during the same period in 2010. These results were driven by an increase in beverage can volumes worldwide.
First quarter gross profit improved 16.8% to $292 million over the $250 million in the 2010 first quarter, reflecting an increase in global sales unit volumes, cost reductions including plant efficiencies, and $2 million from foreign currency translation.
Selling and administrative expense was $102 million in the first quarter compared to $79 million in the prior year. The increase reflects a one time benefit of $20 million realised in the 2010 first quarter from the settlement of a legal dispute unrelated to the company’s ongoing operations and $1 million due to foreign currency translation.
Segment income rose to $190 million in the first quarter over the $171 million in the first quarter of 2010 including $1 million of improvement due to foreign currency translation.
Commenting on the first quarter results, John Conway (pictured), chairman and CEO, said: “I am pleased to report that we are off to a very good start in 2011. Globally, beverage can volumes were up 6% over last year’s first quarter as increasing contributions from our recent growth initiatives in Brazil, Eastern Europe and Asia continue to be realised.
“Overall our metal vacuum closure and food can businesses performed very well in the first quarter. In North America, an 8% increase in metal vacuum closure sales unit volumes and higher food can production levels drove profit improvement while in Europe food can unit sales increased by 3%.”
The company’s emerging markets growth plans remain on schedule and budget.
“During the first quarter, our new beverage can plant in Ponta Grossa, Brazil and capacity additions to our Izmit, Turkey facility were completed. Earlier this month, second beverage can lines in Kechnec, Slovakia and Ponta Grossa were completed and, while early in their learning curve, are running well,” adds Conway. “Additionally, a second beverage can production line is being installed in Estancia, Brazil and construction of our new plant in Hangzhou, China is near completion, both on schedule to start-up in June. Although we are still very early in 2011 we expect another solid performance this year.”
During the first quarter of 2011, Crown recorded a tax charge of $17 million ($0.11 per diluted share) in connection with the relocation of its European Division headquarters and management to Switzerland as of January 1, 2011.
“The relocation of our European headquarters to Switzerland will significantly increase management effectiveness by having our senior management team more centrally located to the company’s operations across Europe, the Middle East and Africa as well as being in much closer proximity to many of our customers and suppliers,” notes Conway. “Switzerland is an excellent location supported by outstanding and efficient infrastructure with a highly productive, well educated and multilingual workforce that strongly supports multinational business operations such as Crown’s.”
