Silgan (SLGN) Q2 2026 Earnings Call Transcript

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DATE

Wednesday, July 29, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

Senior Vice President, Strategy, Investor Relations – Alexander Hutter
President and Chief Executive Officer – Adam Greenlee
Executive Vice President and Chief Operating Officer – Philippe Chevrier
Executive Vice President and Chief Financial Officer – Shawn Fabry

TAKEAWAYS

Net Sales — $1.64 billion, representing a 7% increase primarily driven by the contractual pass-through of higher raw material and manufacturing costs.
Adjusted Net Income — $0.98 per diluted share, reflecting a decrease from $1.01 in the second quarter of 2025 due to lower adjusted EBIT and higher corporate expenses.
Free Cash Flow Guidance — $450 million for the full year 2026, which includes planned capital expenditures of $310 million.
Dispensing and Specialty Closures Sales — $713.9 million, growing 2% year over year as price pass-through and favorable currency translation were partially offset by a 1% decline in unit volumes.
Metal Containers Sales — $763.9 million, a 13% increase compared to the prior year period due to price and mix improvements related to higher steel and aluminum costs.
Custom Containers Sales — $165.5 million, up 3% year over year as favorable price and mix offset a 4% decline in volumes related to strategic footprint optimization.
Wet Pet Food Volume — 7% growth in the Metal Containers segment, continuing strong performance despite challenging prior-year comparisons.
Brazil Market Volume — 15% decline in unit volumes within the region, which contributed to a 1% total unit volume headwind for the Dispensing and Specialty Closures segment.
Adjusted EBIT – Dispensing and Specialty Closures — $107.6 million, comparable to the previous year as favorable price over cost was neutralized by lower volumes and less favorable product mix.
Adjusted EBIT – Metal Containers — $65.9 million, down from $70.8 million in the second quarter of 2025 due to less favorable price and cost mix as pet food container growth was offset by lower vegetable and fruit pack volumes.
Adjusted EBIT – Custom Containers — $27.2 million, increasing from $24.9 million in the prior year period as a result of cost reduction activities and favorable price over cost.
Q3 2026 Adjusted EPS Guidance — $1.21 to $1.31 per diluted share, compared to $1.22 reported in the same quarter of the previous year.
Full Year 2026 Adjusted EPS Guidance — $3.73 to $3.93, a 3% increase at the midpoint of the range over 2025 performance.
Corporate Expense — $15.4 million for the quarter, an increase of $4.8 million primarily related to corporate development activities.
Interest Expense Guidance — $200 million for the full year, with the company projecting $50 million to $55 million for the third quarter.
Healthcare Revenue — $250 million, with management targeting an organic doubling of this business over the next 3 to 5 years through nasal and ophthalmic drug delivery applications.
Fragrance Market Growth — High single-digit percentage growth, supported by differentiated technology and long-term contracts with major perfume houses.
Dispensing and Specialty Closures Volume/Mix — 3% decline, consisting of a 1% unit volume decrease and a 2% adverse mix impact largely attributed to the Brazil market.
Unrecovered Inflation — $10 million in net unrecovered costs, primarily related to resin price volatility, which management expects to recover if resin prices decline in the future.
Leverage Ratio — Below 3.0x anticipated by year-end, which management noted provides flexibility for the company’s capital deployment model.

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RISKS

Greenlee stated, “market conditions remain mixed and were softer than expected in Brazil in the second quarter,” noting that regional volume declined 15% year over year.
Fabry indicated, “The combination of lower volumes in Brazil and less favorable mix impacted the second quarter by approximately $5 million,” specifically within the Dispensing and Specialty Closures segment.

SUMMARY

Silgan Holdings Inc. (SLGN -11.16%) reported increased net sales driven by the contractual pass-through of raw material costs, despite mixed market conditions across its global segments. Management noted that growth in high-value categories, such as pet food and fine fragrance, was balanced by normalized order patterns in the vegetable pack and softening consumer demand in Brazil. The company confirmed its full-year earnings and free cash flow guidance, emphasizing the execution of strategic cost reduction programs and the integration of new long-term supply agreements. Capital deployment priorities remain focused on maintaining a leverage ratio below 3.0x while supporting organic growth and potential disciplined acquisition activity.

CEO Greenlee confirmed the execution of a new long-term supply agreement in the vegetable market, noting the company is “eager to have a conclusion to the multiyear disruption created by this unique customer situation.”
Management noted a shift in customer behavior, with Greenlee stating, “there’s a much greater focus on volume right now throughout CPG than with many of our customers” compared to the trade-off for price in previous years.
In Custom Containers, the 4% volume decline was anticipated as part of a strategy to “exit of lower-margin business associated with the planned footprint optimization” to improve long-term profitability.
The fragrance business continues to grow at a high single-digit rate, which CEO Greenlee attributed to “differentiated technology” and a “customer partnership model” that separates the company from competitors.
Management expects the Brazilian market weakness to be temporary, with a recovery starting late in the third quarter to ensure the business is “fully recovered as we head into 2027.”
The healthcare business expanded to $250 million in revenue, and management expects growth to accelerate in the fourth quarter as new nasal and ophthalmic projects ramp up.

INDUSTRY GLOSSARY

Dispensing and Specialty Closures: Systems including pumps, sprayers, and caps used to deliver precise amounts of consumer products.
Metal Containers: Steel and aluminum cans used primarily for shelf-stable human and pet food.
Custom Containers: Bespoke plastic containers designed for specific consumer, healthcare, or chemical applications.
Resin Lag: The delay between shifts in raw plastic material prices and the subsequent adjustment of prices charged to customers under contract.
Footprint Optimization: The reorganization or consolidation of manufacturing facilities to enhance operational efficiency.
Ophthalmic: Pertaining to medical treatments for the eye, often requiring specialized dispensing technology.
Nasal: Pertaining to medical treatments delivered through the nose, requiring high-precision pumps.
Adjusted EBIT: A non-GAAP measure of earnings before interest and taxes, excluding items such as rationalization charges and amortization.

Full Conference Call Transcript

Operator: Good day, and welcome to the Silgan Holdings Second Quarter 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, Investor Relations. Please go ahead.

Alexander Hutter: Thank you, and good morning. Joining me on the call today are Adam Greenlee, President and CEO; Philippe Chevrier, EVP and COO; and Shawn Fabry, EVP 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 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.

Adam Greenlee: Thank you, Alex, and we’d like to welcome everyone to Silgan’s second quarter earnings call. We’re pleased to have delivered another quarter of solid financial results in the second quarter 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 the second quarter and successfully overcame some significant challenges, including a dynamic geopolitical and operating backdrop. And 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 the second quarter, 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, and we are eager to have a conclusion to the multiyear 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 year levels after accounting for business exited as part of our cost reduction program.

Our second quarter results continue to display our team’s focus on executing our plan in 2026, and we are pleased to have delivered another strong quarter of financial results. As we move into the second half of 2026 and past some of the challenges that we planned for in our first half results, we are confident in our ability to deliver organic growth in the third and fourth quarters 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 and 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 second half 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 third quarter and full year of 2026.

Shawn Fabry: Thank you, Adam. As Adam highlighted, we reported another quarter of strong results in the second quarter 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. Second quarter 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 and 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, second quarter 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 second quarter 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 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 third quarter 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% to 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% to 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’ll open the call for questions. Katie, would you kindly provide directions for the question-and-answer session?

Operator: [Operator Instructions] We’ll go first to Matt Roberts with Raymond James.

Matthew Roberts: Maybe first on Brazil, maybe you could speak to how big this is within DSC, where exactly that weakness was? Shawn, I believe you said it was a 1-point headwind to volume mix in 2Q. Please correct me if I’m wrong, but maybe 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 second half? Or what gives confidence that there can be an acceleration in second half given some volatility in Brazil? It 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?

Adam Greenlee: Matt, it’s Adam. Maybe we’ll both jump in on this one. I think you’ve got that right. Brazil, maybe to put some context to it, in Brazil, in the region, we had about a 15% volume decline year-over-year and 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. So we’re pleased to continue to be able to absorb that and deliver the results that we had guided to. So 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.

And so outside of that, the balance of the business essentially was flat, and we feel really good about the performance, and it was right in line with the expectations that we had for the full year. So 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. And maybe just to provide a little context, as we go around the world, Europe was very strong for Dispensing and Specialty 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. Americas, 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 the second quarter.

Matthew Roberts: Super helpful. Appreciate all that color. Maybe one on metal. I believe in the prepared remarks, you noted a more seasonal order patterns for fruit and veggie pack. How did human food perform in 2Q? And given that you did reach that long-term supply agreement, what type of visibility does that give you into 3Q and second half volumes in metal? And any comments on how the pack season is shaping up at present?

Adam Greenlee: Yes, sure. As we look at Q2, again, I think as Shawn had said and I had mentioned too, pet food was up 7%. So another just terrific quarter for pet food. The human food side, veg was down kind of double digits and soup was down double digits as well. But 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.

And 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. And 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. And 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 crop. 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. But good visibility, feel confident in our customer forecast for the pack season and our ability to deliver as well.

Operator: We’ll take our next question from Mike Roxland with Truist Securities.

Michael Roxland: Just the first one I had, last quarter, Adam, you mentioned commercializing 2027 product launches and developing ’28 and ’29 product launches at that point in time. How much of your fragrance and beauty business is already locked in for 2027? And 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?

Adam Greenlee: 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. So to your point, Mike, I mean, ’27 is — 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. So I feel really good about that. We are a big player in the fine fragrance or the premium segment, and there’s always more opportunity to work with existing customers and others in the space.

And 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 and particularly this market where the utility of the product that we provide is so critical to the overall package for the fragrance houses. So it continues to be a really good story. We think we’ve got pretty good clear sight to continued growth in kind of the high single-digit rate for fragrance products around the world and feel really good about our position in that market.

Michael Roxland: Got it. And then just one quick one on healthcare. I believe you mentioned it’s a $250 million business targeting nasal and ophthalmic applications. Your goal is to double that business organically over the next 3 to 5 years. That implies a CAGR of about 15% to 20% plus per year. So can you help us frame how you intend to drive that type of internal growth? Obviously, you’ve had some help recently from Weener and tapping into existing commercial relationships domestically. But just wondering how you intend to drive that growth organically over the next 3 to 4 years?

Adam Greenlee: Yes. 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. So I think we’re well on our way. With those long developmental cycles, again, most of that volume is commercial — or is contractualized, I should say, over the course of the next couple of years. And we continue to have additional opportunities that come to us in our specific areas of nasal and ophthalmic. And 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.

And 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. So feel really good at that. And that is part of the low to mid-single digit this year as well as we’ve got some healthcare that is ramping up. It was planned to ramp up for the second half of the year all along. And I would say it’s probably a little heavier in the fourth quarter as we think now about the second half of the year.

Operator: We’ll take our next question from Ketan Mamtora with BMO Capital Markets.

Ketan Mamtora: 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?

Adam Greenlee: Yes. As we — well, number one, welcome to the space. It’s great to have another analyst in the coverage group. So welcome to the coverage. As far as that $10 million, that was a Q2 item that we talked about, and that’s kind of the net unrecovered inflation, primarily resin in all fairness, but the net unrecovered inflation that we experienced and it played out essentially exactly as we thought. There’s a tremendous amount of volatility, as everybody knows, still in those markets. And that will be unrecovered until such time as resin declines in the future, and we just don’t have clear visibility as to when that’s going to happen.

So it played out pretty much as we expected. It’s behind us now. And as resin falls in the future, that will be a benefit back to Silgan at that point.

Ketan Mamtora: Got it. No, that’s helpful. And 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? And sort of what is the bias between share repurchase and M&A at current sort of valuation levels?

Shawn Fabry: Ketan, this is Shawn. I’ll jump in and then turn it over to Alex to answer the M&A side of the question. Really, nothing has 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, and 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, and we believe we’ll be below the midpoint of our target range, so somewhere below that 3x leverage.

So we’re right where we would like to be with respect to having all options available to us, inclusive of M&A.

Alexander Hutter: And Ketan, on the pipeline, look, it remains an active environment on the M&A side, a fairly full pipeline, but 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. So that hurdle rate moves around on alternative uses for capital. And ultimately, what we do is we take a long-term view on capital deployment and what will create the most value for our shareholders, and that’s what we execute on.

Operator: We’ll take our next question from Arun Viswanathan with RBC Capital Markets.

Arun Viswanathan: 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, that could translate into what your outlook on volumes would be, I guess we’d be interested in that as well.

Adam Greenlee: Sure. Obviously, a fairly volatile environment today with — between tariffs and resin pricing and cost being what they have been through the second quarter. So our customers and most CPGs are continuing to pass that inflation on to the consumer. And 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. And I think there’s a much greater focus on volume right now throughout CPG than with many of our customers.

So they are using and they’re viewing promotional activity as a just a tool in the toolkit to move volume. And 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. So it is successful when it’s applied in a targeted manner right now for the consumer who continues to seek out value.

And we think our customers are aligned to focus more on volume in 2026 than what had been done in the prior years.

Arun Viswanathan: Okay. And then 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?

Alexander Hutter: Yes, Arun, it’s Alex. So 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 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. But we look at a broad range of opportunities and that’s kind of the opportunity set.

Adam Greenlee: And the only thing I would add to that is that I think as we look at our 3 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 3 business segments. I look at the margin profile and the operating leverage that we have. So we feel really good about all 3 of our business segments at this point.

Operator: We’ll take our next question from Anojja Shah with UBS.

Anojja Shah: 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? And I think you mentioned recovery in Q4. What’s driving that?

Adam Greenlee: Sure. So Brazil, look, it’s an inflationary market, and it’s taken significant inflation in Brazil for many years now. And so we’ve done a really good job of passing that through to our customers who obviously pass that through on to the market. So 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.

So 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 will lead into Q4 from a seasonality standpoint. And really, it’s the same holiday season kind of discussion that we’ve had about Brazilian activity as well with our 2 largest customers in Brazil, a good portion of their revenue comes through the holiday events in the Brazilian region. So we feel pretty comfortable that we’ll begin that recovery in Q4 and be fully recovered as we head into 2027.

Anojja Shah: Great. And I just was wondering if we could put a finer point on your volume expectations for metals in the third quarter. I think you said low single digit for the full year, but I know in the third quarter you have that customer timing issue, which should be a help. But then how do you balance that against a pretty tough comp?

Adam Greenlee: Sure. I mean we’ve got a couple of things working. Obviously, we’ve got continued growth in 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. So I think we’re looking kind of low to mid-single-digit volume growth for Metal Containers in Q3.

Alexander Hutter: Yes. Anojja, the only other thing I’d point out is, remember, we have the timing. So volumes came out of the second quarter into the third quarter. So that will help the third quarter this year.

Operator: We’ll take our next question from Daniel Rizzo with Jefferies.

Daniel Rizzo: You mentioned your contracts in healthcare and the new contract in metal coatings. I was wondering if these contracts have like clauses, like minimum purchase requirements or how they’re kind of structured in that regard?

Adam Greenlee: Yes. We don’t really talk about any individual contracts, and 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. So you can think of our long-term contracts that we’re 100% supply for their requirements. And 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.

Daniel Rizzo: That’s very helpful. And then 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.

Shawn Fabry: Sure. I’ll take that one. As we mentioned, we’re constantly looking at everything, rigid packaging. So this particular category versus spend category can be lumpy over the years in terms of any single quarter. And 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.

Operator: [Operator Instructions] And 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.

Adam Greenlee: Great. Thank you very much, Katie. Thank you all for your interest in Silgan. We’re pleased that we’ve delivered a first half that’s slightly ahead of our original expectations as we came into the year and confident in our delivery of our second half performance. Thank you.

Operator: Thank you. That will conclude today’s call. We appreciate your participation.