Ladies and gentlemen, please stand by. We're about to begin. Good day and welcome to the Silligan Holdings third quarter 2026 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Alex Hutter, Senior Vice President, Strategy and Investor Relations. Please go ahead, sir.

Thank you and good morning. Joining me on the call today are Adam Greenlee, President and CEO, 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 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 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 for diluted share, or adjusted EPS. Reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release, and 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, and we'd like to welcome everyone to Silgan's third quarter earnings call. Last week, we discussed with you a transformative portfolio acceleration as Silgan embarks upon the next stage of our value creation journey through the proposed acquisition of Trivium by establishing two exceptional packaging companies, and Silgan MCC and Silgan DS. Today, we are happy to be back together with you to discuss another strong quarter of financial performance in our business and our continued progress on the strategic direction of the company. Our objectives for 2026 have been clear. Continue to execute on our strategic growth initiatives, deliver earnings growth irrespective of the growth of our end markets and invest in the future growth of the business. Year to date, we have delivered mid-single digit growth in fragrance dispensing products, made single-digit growth in pet food and metal containers, and we have seen significant and growing interest in our healthcare pharma dispensing products. We have increased the midpoint of our full-year adjusted EPS range twice, despite a more challenging consumer demand environment and significant raw material and other cost inflation during the year. I'm proud of our teams and their relentless focus on execution and commitment to serving the unique needs of our customers. allowing Silgan to continue to be the best at what we do. And I believe the company is very well positioned to deliver on our commitments to our shareholders as we move into this next phase for Silgan in 2027. Turning to the third quarter, our businesses performed well and our team successfully managed challenging consumer conditions, continued cost headwinds, and adverse currency impacts. Silgan delivered record adjusted EPS at the high end of our estimated range and once again, the strength and agility of our teams and the success of our strategic growth initiatives delivered strong financial results. In dispensing and specialty closures, we delivered another strong quarter of mid-single digit growth for our high-end fragrance products and our prescription pharma dispensing products continue to gain traction in the marketplace and grew by a double-digit percentage in North America. Our teams continue to stand out in the market as our best-in-class innovation Investment & Growth, and Customer Partnership Model continue to differentiate us from our competition and drive volume growth that exceeds our end markets. While cost inflation remained a headwind in the third quarter, and the pass-through mechanisms in this business tend to lag slightly longer than in our other businesses, we successfully implemented actions to recover cost increases during the third and fourth quarters that will help offset much of the impact. Our metal container segment reported growth in fruit and vegetable and wet pet food products. And in spite of softer than anticipated volumes in soup markets, adjusted EBIT grew 10% year over year. As our business returns to a more normalized demand and production pattern in the fruit and vegetable market, following several years of disruption, our team's relentless focus on cost efficiency continues to deliver benefits to the bottom line. In custom containers, Our teams delivered another quarter of solid results despite sustained raw material volatility, higher freight costs, and more challenging demand patterns across the end markets we serve in this business. While volumes were below the prior year, in part due to the exit of lower margin business to achieve cost reduction plans last year, we delivered another quarter of record adjusted EBIT in this business. Our third quarter results continue to highlight the success of our strategic growth initiatives The resilience of our business through a more muted consumer demand environment and our ability to outpace our competition and our end markets through our unique commercial partnerships. As we move into the fourth quarter, we are confident in our ability to deliver our increased financial expectations for the second half and for the full year, despite the incremental challenges that have developed since we last reported. As we have repeated throughout the year, Our approach to 2026 included planning for more unknown risks throughout the year. And while we didn't plan for a conflict in the Middle East, resin crossed increasing more than 50%, softness in Brazil, or many of the other challenges that arose and were mitigated throughout the year, the overall strength of our business and the focused execution by our teams enables us to increase our financial expectations for the year. In a challenging macro backdrop, We think this performance shines brightly amongst our competitive landscape. As always, our unique portfolio of consumer staple products in the end markets we serve, our market leading innovation, our unique capital deployment model, our long-term partnerships with our customers, and our low-cost global manufacturing footprint continue to separate Silgan in the market and position us to continue to outperform through a variety of economic conditions. Delivering on our financial commitments for 2026 remains our near-term focus. While we are embarking on an exciting new phase for Silgan, fundamentally, nothing has changed about how we think about our strategic growth initiatives, in-market growth, capital deployment, business strategy, customer partnerships, or any of the foundational elements of Silgan. In fact, we believe that under the new structure we have outlined, both Silgan DS and Silgan MCC will be better positioned to execute their unique strategic priorities and drive shareholder value. With the proposed acquisition of Trivium expected to close mid-2027, our focus in the first half of the year will be on continuing to deliver on these strategic initiatives, planning for the integration, and preparing the businesses for success under the new operating structure. While this transaction will likely also entail some level of incremental investment throughout both entities to appropriately set the businesses up for long-term success. We are expecting another year of organic earnings and free cash flow growth in 2027. With that, Shawn will take you through the financials for the quarter and our estimates for the fourth quarter and full year of 2026. Thank you, Adam.

As Adam highlighted, we report another quarter of strong results in the third quarter of 2026. with adjusted EPS coming in at the top of our expected range due to strong operational EBIT performance in each of our segments and favorable interest expense, which is partially offset by a higher adjusted tax rate versus the prior year quarter. Net sales of approximately $2 billion increased 2% from the prior year period as a result of the pass-through of higher raw material and other costs in each of our segments. Total adjusted EBIT for the quarter of $235 million was 6% higher than the prior year mostly as a result of higher adjusted EBIT in our metal container business. Adjusted EPS of $1.31 increased 7% from the prior year period due to higher adjusted EBIT and lower interest expense, which was partially offset by a higher adjusted tax rate. Turning to our segments, third quarter sales in our dispensing and specialty closures segment increased 1% versus the prior year, primarily as a result of the pass-through of higher raw material and other costs. Volumes in the quarter were flat year-over-year with strong growth in fragrance and farmer dispensing products offset by lower volumes for food and beverage products. Third quarter dispensing and specialty closures adjusted EBIT was down $2 million versus the prior year quarter, mostly as a result of unrecovered inflation experienced in the current year quarter that we expect to recoup through pricing actions in the market over the next couple of quarters. In our metal containers segment, sales increased 1% 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, which was partially offset by lower volumes of 4%. As Adam mentioned, higher volumes for fruit and vegetable and wet pet food products were offset by lower demand for soup products in the current year quarter. Metal containers adjusted even with $9 million above prior year levels as a more normalized volume cadence in 2026 and stable footprint exiting our multi-year cost reduction initiatives led to more streamlined operations and favorable price over cost performance. In custom containers, our results were largely consistent with our expectations as sales increased 4% compared to the prior year quarter due to the passage of higher raw material and other cost inflation, which was partially offset by an 8% decline in volumes. As expected, volumes were impacted by the exit of lower margin business associated with the planned footprint optimization in the prior year. 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. Corporate expense, excluding costs for announced acquisitions, was approximately $6 million below the prior year level. in part due to the reversal of corporate development costs associated with the recently announced acquisition of Trivium. Turning to our outlook for the fourth quarter of 2026, we are providing an estimate of adjusted earnings in the range of 76 to 86 cents per diluted share as compared to adjusted EPS of 67 cents in the prior year period. At the midpoint, this estimate assumes a higher over year adjusted EBIT of approximately 10 to 15 million Interest expense of $45 to $50 million and a tax rate of approximately 25 to 26%. The volumes are expected to be comparable to prior year levels in all segments in the fourth quarter. For the full year of 2026, as Adam discussed, we are increasing our estimate of adjusted EPS to a range of $3.83 to $3.93 at 4% increase at the midpoint as compared to $3.72 in 2025. This estimate includes low single-digit percentage adjusted EBIT growth, adjusted corporate expense of approximately $45 to $50 million, interest expense of approximately $185 million, and an expected tax rate of 25 to 26%. We now expect volumes in 2026 to be comparable to the prior year period in all three segments. 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, we'll open the call for questions. Jess, would you kindly provide the directions for the question and answer session?

Certainly. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll take our first question from Ganshan Punjabi with Baird.

Yeah, thank you, Amber. Good morning, everybody. Adam, maybe you can expand on, you know, your comments about the consumer packaging business and the weaker consumer and so on and so forth. I mean, obviously, things have been weak for almost several years at this point. So what exactly is incrementally weaker? You know, what are your customers sharing with you as relates to their strategy to offset some of this as we think about 2027?

Yeah, good morning, Gansham. You know, I think it's a continuation of what we have been seeing, right? So, I mean, certainly we have pockets of our portfolio that have seen significant strength, right? I mean, whether it's, you know, mid single-digit growth in our wet pet food segment, we talked about, you know, again, terrific performance in our fragrance products and now a rapidly accelerating and growing, you know, prescription pharma business as well. you know we've got you know consumers primarily kind of in the food and beverage market maybe a little bit of home care and lawn and garden I throw in there as well but that's really where we're seeing some some challenged behavior from the consumer as they continue to search for ways to stretch their dollar we're seeing it impact that part of our portfolio but you know I think we feel really good about the strategic initiatives that we have that are driving volume growth through other pockets of the portfolio

Okay, got it. And then for the DST segment, you know, just looking at EBIT margins year over year, you know, it's about six quarters in a row for the margins having declined on that basis. You know, obviously a lot going on with the end markets and inflation. But what do you think is a reasonable timeline for margins to stabilize on the same basis? Would it be 4Q? Is that what you're embedding in your model at this point?

I think I'd say you'll see some normalization in 4Q. Obviously, there's been a lot of inflation that's been passed through, whether that be raw materials and DSC. You're not only dealing with resin, but you've got kind of the metal closures component there as well with significant steel inflation. So for the most part, we pass those through on a very timely basis. There'll be some lag and some of that recovery of the other inflation will occur next year as well. But I think what you'll see in Q4 is a nice recovery of of the inflation. Where we didn't have contractual pass-throughs for some of the inflationary items, we have taken aggressive pricing actions in the market to recover those costs. You will see that start to flow through in Q4.

Okay, terrific. Thank you so much.

We'll go next to George Staffos with Bank of America.

Hi, everyone. Good morning. Appreciate the details. I want to actually piggyback on both the topics that Gansham had raised. And so as we think about DSC, Adam, and the nice recovery that you expect in terms of pass-through of resin and getting it back, should we expect earnings to be up year-on-year in DSC in the fourth quarter, or are we really more pushing out to in 2027, because it takes some time. You did say it takes a couple quarters to get that. My somewhat related question, just, you know, again, we had been expecting, based on your guidance, low single-digit growth, I guess, against both metal and custom, custom obviously, excluding the walkaway business, and I think low to mid-single and DSC. The consumer certainly has been under pressure for a while. What specifically changed or said differently is your volume outlook now for even volume really just driven by the pressure you're seeing in soup and the pressure you're seeing in some of the other markets you called out?

Sure, and maybe starting with the first one, George. You know, our Q4 forecast or guidance for DSC, we will see year-over-year organic EBIT growing in Q4, just to be super clear about that. Part of that is the catch-up recovery of the inflationary pastures that we just talked about with Donchell. The other piece of it is we expect continued, really strong performance in our fragrance and beauty products. our prescription healthcare and pharma business is doing really well. And we believe those will offset the kind of continued challenge that we see with the consumer and some of the other markets, food and beverage in particular. Maybe your second question, you know, over maybe metal containers and our custom containers business and maybe what changed versus our guidance. I mean, certainly soup was something that we had not anticipated. And I think the simple answer for you, George, there is We've got one customer in particular that has taken a lot of inflation this year in 2026, not necessarily just related to the food can, whether it be ingredients, energy, freight, whatever. They have elected and they elected within Q3 that they were going to have to take price to recover some of that inflation. So that did impact our volumes, we think, in Q3. That's now embedded in our guidance for Q4 as well. were not anticipating a significant recovery of soup volumes in the fourth quarter. And then custom containers, it's really the same story that we've been talking about. It is food and beverage. It is also our home care and lawn and garden segments that we're just seeing a very challenging environment for the consumer. Again, trying to stretch those dollars on the spend side and changing some behavior. So as we go all the way back to the beginning, We told you, I think, we told the market that as we came into 26, we were not expecting market growth in order to deliver earnings growth and free cash flow growth in 2026. And in spite of the challenges that we're talking about here, I think our performance has been terrific. We've beaten the midpoint in all three quarters. We've raised the year twice. We're very proud of the performance that our teams have delivered and think there's going to be more of the same in 2027. Okay.

I appreciate that. You stole my concluding point there. But props for the way that you are guiding this year and able to maintain your forecast. Two last ones, I'll turn it over. Brazil, what's new there? And then you talk a little bit about the investment that you're going to need to make as you bring in Trivium. Any way to size what we'll need to consider as we build out that model? Thank you very much.

Sure. Brazil, you know, this is a continuation from the last quarter that we talked about. We were not anticipating any recovery in Q3. And in fairness, we did not have any recovery in Q3 right in line with our expectations. We should start to see some recovery by the end of the year, but really that's more of a 2027 story. So it was a negative impact to the quarter. We were more than able to absorb that and offset that. Really, in Georgia, when you think about the products for us in Brazil, they're very mixed favorable for the company and for GFC in particular. So with lower volumes in Brazil, it does impact the mix line as well. And then when we think about the investments, just as we prepare for the acquisition close date in mid-2027 for Trivium, haven't really prepared anything to share at this point as far as the magnitude of those investments. I think, you know, we're taking a very deep dive look at all three segments that we have today and making sure that we prepare them for a successful transition next year. And, you know, as we move from our current reporting structure to more of an MCC and dispensing solutions reporting structure, we're going to want to make sure that the businesses are ready and able to stand on their two feet and very secure footing.

All right. Thank you very much, Adam. I'll turn it over.

A reminder, it was Star 1 if you had a question. We will go next to Matt Roberts with Raymond James.

Hey, Adam, Shawn, Alex. Good morning. On the pharma growth, I think you noted that pharma dispensing exceeded expectations. I think last quarter you said it was more weighted to 4Q. So is that 3Q strength? Was there any earlier ramp or inventory timing? or do you continue to expect that to continue at a similar pace in 4Q in 27?

Sure. I mean, look, we're excited. We've been talking about our growth in healthcare pharma for some time now, and it is one of the fastest growing parts of our portfolio. So, you know, we were anticipating this growth late in the year. In fairness, it's probably a mix, Matt. We're probably a little bit of shipping ahead of what our original expectations were. but the strength that we see in Q4 is very consistent with what we just delivered in Q3. So really excited about the progress that we've made there. Great to have those products commercialized and be in the market. And again, this is absolutely an important, rapidly growing part of our overall healthcare business that we've been talking about that kind of this year will be in that $250 million total revenue kind of scope for SILGEN. and we're anticipating nice growth again next year as well.

Thanks Adam, I appreciate that and we already hit on the dispensing margin a little bit. I know you're probably only trying 27 so much but maybe given those cost recoveries that you had on the margin impact this year, given the drag you just had in closures but the growth you're seeing in dispensing, think about just the Proposed dispensing solutions business. You get those cost recoveries. You just discussed pharma growth and a Brazil recovery. How do you envision just dispensing solutions ramping in 2027 or longer term or maybe said differently, excluding some of those one-time closures impacts? How is just the dispensing performed on an organic or going forward basis? Thanks for taking the question.

Number one, we're not providing growth for 27, but I think we can talk broadly about the longer term view of these products in particular. So, you know, maybe I'll circle back to our current portfolio. So even though we've had a challenge consumer in 2026 in certain markets, nothing's changed about our outlook or expectations for the long term volume or profile of any of our segments. I think as you then transition the dispensing especially closure segment to more of a dispensing solution segment, what you're going to see, Matt, is more of that volume from fragrance and beauty, more of that volume from healthcare pharma is going to actually drive through to the bottom line of that segment because we are moving that more stable part of the portfolio in food and beverage over to the MCC business. You know, again, I think nothing's changed about our view on specific markets, but we should be delivering a higher growth rate and dispensing solutions because it will be more focused on on faster growing and higher market or higher margin in markets going forward once we make that transition.

Thank you.

We will go next to Jessica with JP Morgan.

Thanks very much. You said that you anticipated that you would grow your free cash flow in 2027. In broad terms, is that by a minimal amount or a meaningful amount? How do you quantify that?

Hey Jeff, this is Shawn. Go ahead. Hi.

Yes, so we are expecting growth in free cash flow in 2027, and we're not giving specific guidance on that at this point. But I would think of that as, you know, it's going to be a function of volume growth in the year, and so some kind of modest free cash flow growth is what I would kind of put out there for now. We always have initiatives around working capital that will be no different in 2027, and we're always, you know, focused on all all attributes around free cash flow, including the CapEx equation.

So there's upward movement in propylene prices and polyethylene prices. Is that something that you'll feel more in the fourth quarter or in the first quarter in that you talked about recovering your margins a little bit?

Yeah, I mean, I think as you look across the portfolio, I mean, we've had a very long history of a disciplined pass-through, certainly on the raw material side that is contractual in nature, right? So I think in our food and beverage closures and our custom containers business, those are pretty tight pass-throughs, and we manage that very effectively. I think the newest part of the portfolio in our dispensing products portion of the portfolio has a slightly longer lag. So it's probably more of a quarterly basis if I was just going to give you a round number, Jeff. So, you know, so we'll be recovering over a period of time. You know, we will be recovering resin in particular in Q4, as well as other inflation that we've experienced. And then I think on those longer lag items, some of that will, you know, for our dispensing products will bleed into Q1 just as you would expect. And, you know, we follow Our pastors really follow the changes in resident costs very tightly.

Great. Thank you very much. We'll go next to Anthony Pettinieri with Citi.

Hi, good morning. This is Brian Bergmeier on for Anthony. Thanks for taking the question. You know, in the press release, you mentioned better price cost for metal containers in the quarter. I'm just curious if that relates to, you know, your formula pass-throughs or maybe some underlying cost saves. And just zooming out maybe from a high level, you know, how has inflation sort of impacted metal containers this year and, you know, how will your formulas sort of compensate for that? Is there any incremental catch-up into 27?

Sure. Hi, Brian. You know, as we think about metal containers specifically, I mean, I think one thing that maybe we're not giving enough airtime to is how great our three businesses did last year and the year before executing our cost reduction initiative program, where we took $50 million of cost out of our overall operating network. And what you're seeing this year, particularly in metal containers, is the benefit of those actions. We have closed three facilities from last year. That lowers the overall operating costs for our system. We had, for the first time in several years, we had the ability to plan for the fruit and vegetable pack versus a disruptive kind of situation that we've been dealing with for many years leading up to the resolution that we got last year. So being able to plan for the fruit and vegetable pack allow us to operate our facilities much more efficiently. So you've really got those two things that I think are just driving a lower cost profile for our metal containers business. And we feel terrific about the sustainability of that. And it shows the power of our network. When we're able to plan with our customers for volumes, we're incredibly efficient. And you see that making its way to the bottom line. and then again for metal containers that inflationary pass-throughs that we have obviously raw materials steel aluminum those are very much on a real-time basis so no change to that whatsoever. The other manufacturing costs and other cost pass-throughs typically are on a little bit of a lag basis so kind of the 26 experience we'll be passing through in 27 as we have been for really since the inception of that part of our portfolio.

Got it. Got it. Thanks for all that detail. That's super helpful. And then last, and sorry if I missed this, but did you say just from a high level, what drove the beat in the quarter relative to Silgan's estimates? Thanks. I'll go ahead and turn it over.

Yeah. I mean, I think, you know, as we were looking at it, I mean, number one, it was a really good quarter and I think a resilient quarter for all of our businesses. You know, from a That's from an operating even perspective. Obviously, at the corporate line, we were able to adjust out some of the costs that we've incurred for the announced transaction that we had with the acquisition of Trivium. So there was a slight benefit there. And Shawn, you want to talk about interest?

Yeah, sure. So interest was also favorable in the quarter versus our expectations. You know, so going into the year, we said we're going to factor in more unknowns. And this is a category that has had a lot of headwinds. You think of the rising rate environment. and our 1.4% notes that we had to redeem in the first quarter. And so the team has done a really good job around some active global treasury initiatives, mostly focused on cash repatriation. And we also, as Adam just mentioned, did a really good job in managing our seasonal working capital needs this year due to the more stable footprint as well as the more normal volume cadence. So good performance on interest. We expect that to carry into the balance of the year. and now we're expecting answers to be comparable year over year from a four-year basis.

We will go next to Mike Rocklin with Truist Security.

Hi, good morning everyone. Thanks for taking my questions. Adam, you mentioned implementing actions to recover cost increases in 3Q and 4Q. You specifically called out in dispensing especially closures that where you don't have contractual pass-throughs, you take aggressive pricing actions. Can you remind us what percent of dispensing and specialty closures does not have contractual pass-throughs? And can you comment on any other actions that you may be pursuing either in DSC or your other businesses to recover costs?

Yeah, good question, Mike. And maybe I should clarify. So the vast majority of the business that we have and certainly our dispensing and specialty closure segments do have contractual pass-throughs. Most of that is related to raw materials. So I probably could have been clearer and said where we don't have contractual pass-through of other inflationary costs, that's where we've taken action in the market. And that's where we've gone specifically with additional price increases and cost recovery efforts in this part of our portfolio. And it's the same in the other parts of our portfolio. Certainly metal containers, that's largely wrapped up in our larger contractual pass-through. So there's really no additional action that needs to be taken there. And Custom Containers has done a good job of incorporating a lot of those inflationary pass-throughs in their contractual business as well. So it's really just dispensing where we have been talking about where we don't have that language in our contract. We need to take action to recover and our teams did an outstanding job of going to the market and having those difficult conversations and seeing the value that we have provided to our customers over a long period of time and being rewarded with the ability to pass through those inflationary costs.

Got it. That's very clear. Appreciate the clarification. And then just one quick one. Can you talk about your ability to expand or to further expand healthcare and pharma at the same time you're pursuing this transaction with AIPAY? Obviously, you're getting notable traction with Prescription Pharma up double digits, as you called out in your North American 3Q. But obviously, getting this deal done is also a priority calling out, I think earlier, a mid-2027 type target for closing the transaction. So could you pursue healthcare and pharma at the same time you're doing this deal without the deal really serving as a distraction to your growth in pharma?

Yeah, and maybe I'll just start, and everybody else, Shawn and Alex, please fill in here, but maybe just start with the idea of, again, back to Sylvan Holdings and what we are. We are a holding company here at our offices in Norwalk, and we've got specialists that run each of our operating companies out in the field. So just that very nature, Mike, allows us to continue to focus on the right strategic direction for the company here out of this office with our team in Connecticut. and so I actually think, in fairness, it's no change whatsoever even with the Trivium acquisition to what we're doing from an M&A perspective out in the market and what we're considering and actually our ability to execute. I think it might actually be better, as you recall, the Trivium acquisition is designed to be leveraged neutral to Sylvan and that's a really important part of that discussion. As we think about reallocating the balance sheet, our dispensing solutions business will have, I think as we talked last week, you know, leverage at inception of about 1.8 times. We are going to be looking to have the ability to deploy capital just as we have been in the past. And so I don't view it any differently than where we were prior to the announcement last week and just excited about the growth opportunities that still sit in front of us across the portfolio.

Got it. Thanks very much.

We'll go next to Hilary Coconando with Deutsche Bank.

Hi, thank you. So, you know, fragrance has continued to grow mid-single digits, you know, despite the softer consumer environment. What are you seeing in that market that gives you confidence that growth can continue into 2027? And how much is that, you know, how much is market growth versus share gains or new business wins for you?

Great question. I think it's a core part of our strategy particularly in the high-end fragrance market and so yes we just continue to execute our teams doing a great job we continue to win new business and it's really important when we say win new business we're winning new product launches so we're really not competing on anything that's on the store shelf we are winning I think the term we've used in the past is a disproportionate amount of the new product launches So maybe there's a new product launch today where we went seven of the eight sprayers that are part of a family of products that our customers are taking to the market, but that's increasing our market share. So that's how we're winning in the market. Our design, our capabilities through innovation and partnerships with our customers are leading to those opportunities. And so, 27, we've got a really good line of sight because all of those discussions were in prior years to be perfectly frank about that. We've got product launch schedules and pretty clear line of sight to demand. We're talking about new product launches now for 28 and 29. And many of those new product launches will require investment, which is part of our normal CapEx requirements for the business. But those investments have already been made for 27 and we anticipate executing, again, we'll say in that kind of mid-single-digit growth is the expectation on a long-term basis, but that certainly applies to 27 for our high-end fragrance products as well.

Got it. Thank you. That's really helpful. And then, you know, when you talk about incremental investment ahead of the Trivium closing, should we primarily think about that as an earnings expense or incremental capital spending or potentially both?

I think it's going to be incremental capital. You know, as we look at it, you know, we've got whether those are, you know, I'll say relatively minor investments in products and operating facilities and people and teams as we go forward. You know, I mean, there's a variety of things that we're looking at just to make sure that we are absolutely ready and able to launch in a very successful way once we close the Trivium transaction.

Got it. Great. Thank you very much.

We'll go next to Arun Viswanathan with RBC Capital Markets.

Great. Thanks for taking my question. I hope you guys are well. I guess I just wanted to drill back on the volumes a little bit. So, you know, specifically within DSC, you know, I think maybe could you help us understand, understanding that fragrance and prescription pharma was really strong. How much does that make up of the segment and maybe on a percent of sales or EBITDA basis? And then if it's less than half, which I think it is, what's your outlook for some of those weaker parts of the business? Do you think those could turn positive or is it really mainly driven by inflation? I guess what are you hearing from your customers on the promotion side there?

Yeah, so you're right. It is less than half on the fragrance and beauty side. It's closer to a third or a little bit more than that. And then health care, as Adam said, is about a $250 million business for us.

And then I think just as we kind of bring all that together, you're right. The growth that we saw in fragrance and the growth that we saw in health care was offset mostly by the food and beverage softness that we saw. I think as we turn to Q4, we're expecting a similar scenario where volumes will be comparable to prior year. You'll have growth in fragrance, you'll have growth in prescription pharma, and I think you'll still be dealing with that challenge consumer in kind of our food and beverage markets.

The only other thing I'd add, Arun, is part of the design of the transaction with the separation between MCC are all able to show this growth and dispensing side more clearly to you. So that part of the portfolio that you were asking about, fragrance and beauty, personal care, that's about half of the end market for dispensing solution. And then healthcare is closer to 10% of the end markets for dispensing solutions. So some of these masking impacts that we're kind of talking about now will be a little bit, you know, obviously less clear as those get more focused on the growth end markets in DS.

Thanks for that and I guess you know as you move into 27 maybe you will be facing easier comps. So I guess is that some level of comfort that you could turn in maybe low single-digit growth within DSC and then you know furthermore as I mentioned earlier what are your customers telling you on the food and beverage side? Is it mainly Deflation, that's going to drive some volume recovery, or are they increasing their promotions or doing anything strategic to improve their own volume outlook? Thanks.

Sure. I think just as our outlook on the segment, nothing's changed from a long-term perspective, from a volume expectation perspective. you know we do think you know long term we've got kind of mid single digit growth in our our fragrance and beauty probably close to the high single digit growth in our our healthcare pharma business food and beverage we've always said is kind of low single digit and you're right that that's not happened in 2026 but but nothing's really changed from a long-term perspective I think those conversations with our customers around we're having those all the time I think we're getting a bit of of varied feedback at this point. Some are continuing to use promotional activity to offset the price point in the market and we're seeing success in some of those areas. As we talked about soup in particular, some are actually going to have to go back to market and are taking price to recover additional inflation that they've incurred. So, you know, it's not a one answer fits all across all of our customers and we're working with them and trying to help them be successful in the market. and I think 2027, again, while not giving specific guidance, we think that the pockets of strength that we have will continue to deliver and we think that the stable parts of our portfolio should be more stable in 2027.

Thanks for that. If I could squeeze one more, you mentioned winning business at a disproportionate rate within a few of those verticals. How are you doing that? Is that mainly through innovation and is it kind of customer led or would it be through price or service or surety of supply or what are some of the factors that's leading to that disproportionate share gain? Thanks.

Sure. And it's something we've been talking about for now several years. And so, I mean, it does start with innovation. We've got teams that are laser focused on the unique needs of our customers, and I think we're doing a better job than anyone in the market meeting those unique needs and understanding those needs of our customers and helping them solve their challenges. So we are being rewarded for those efforts, and particularly in the high-end fragrance market, that's what's allowing us to gain a disproportionate amount of the new product launches. and we take great pride in that. And I think the market was searching for someone to step in at some point and fill that gap and address their needs. And I think we're seeing a very similar reaction right now in our prescription pharma business. And we are absolutely world leaders and experts in dispensing technology and differentiated dispensing solutions.

and those are being rewarded in the marketplace.

We'll move next to Anoja Shaw with UBS.

Morning, everyone. My first question is, can you remind us when the business exit that is happening in custom containers, when that anniversary is? and after that's done, do you think that you'll have a steady state for that segment or are there more growth and margin initiatives planned? I'm just trying to get at what the steady state performance of that business might be as part of the remaining silicon dispensing business.

Sure. Look, we've taken a lot of cost out of our custom container segments we talked about a little bit earlier. We finished that in the fourth quarter of last year So really, we're cycling over that now for the final time in Q4. And as we go into 2027, you will have a steady state kind of comparable to prior years. So I think it leads to a larger conversation in custom containers about how we view that business going forward. We've been on a long journey improving that business. And we've taken costs out. We've improved margins. We've focused the business. on a very clear subset of the rigid blow molding business and they are executing really well and doing a great job. I think the business is poised for growth going forward now and I think we're about to turn the corner where the expectation for growth in custom containers will change in the future. It's not in Q4, it's not in Q1, that is a longer term vision for us, but we think that unique model that they have serving their customers in the markets that they continue to win in has the opportunity to continue to grow. We will do that at the margin rates that we've been enjoying and that we've worked really hard to get to. And I think that's a great part of our dispensing solutions portfolio on a go-forward basis.

Great. Thank you for that. And I just wanted to go back to these fragrance product launches. I know we've touched on it a few times now. But I wanted to go a step further. Since it will be part of the new dispensing business, is there any way you can give any more detail on the financial implications of winning a fragrance launch? Especially as you have multi-year visibility on that, it sounds like. Ideally, maybe what winning a launch means in terms of EBIT contribution or even volume growth over the next few years. Thanks.

Sure, I think we can have some of those conversations as we go forward, but I will say this, I mean, you know, with that visibility that we have, that mid-single-digit volume growth that we project going forward for fragrance in particular, fragrance and beauty, I think encompasses all those new product launches that we've talked about. We had a tremendous run of double-digit growth on a quarterly basis for, I think, five or six straight quarters, and, you know, as we move forward, I think that growth is still right in front of us in these markets because of the innovation and products that we take to market.

Great, thank you. We'll go next to Daniel Rizzo with Jefferies.

Hey guys, thanks for putting me in. So just with the prescription pharma dispensing business, I know it's growing well. I was wondering if you've ever disclosed what the percentage of sales is in that business? And two, is that like different than your other businesses? Is it like a multi-year process of getting, I don't know, on some sort of government license or something like that where it takes a number of years before you actually see something kind of emerge from that? Yeah.

Sure, hey, Dan. You know, look, it's a rapidly growing part of our portfolio. We've talked about it being roughly a $250 million overall business for us at Silgan. It resides primarily in what will ultimately be the dispensing solution segment. And you're right, these are regulated products for the most part. So these do require significant development, significant regulatory review. These are three to five year pipelines. So for me personally, the great news is the things that we just talked about in Q3 and what will impact Q4 and our go forward have been in development for a significant period of time. And we are talking about drug master files. We are talking about all those things. And again, I think the market was looking for someone to come in just like we did in our high-end fragrance business. So we are not competing on price, just to be super clear about that. This is about innovation. This is about meeting the unique needs of a customer and supporting their growth with innovative and differentiated technologies.

Is there like a win-loss ratio? I mean, I assume that some of these products that you're working with on the Drugmaster file, that some of these, not because of you, but your customers' product doesn't get launched or for whatever reason. And I was wondering if that's something that affects you guys from time to time as well.

Sure, not everything gets to a commercialized position at the customer level as they move away from drug trials or what have you. But I think for us, it's really about the technology that we provide that is not specific to any one drug or any one molecule, if you will. We think we've got this fencing technology that has a broad base of use. And it's, again, partnering with our customers to find the best use cases for those technologies.

Thank you very much.

We'll return to George Staffos with Bank of America.

Hi, everyone. Thanks for taking the follow-on. Two questions. One, when you think about how your customers are evaluating their pricing and promotional strategies, and you talked a little bit about it earlier in the quarter on this call, I should say, are you seeing Maybe a tip of the spear here in soup where you're going to see customers, you know, understandably trying to pass through the inflation that they've been feeling over the last year or so. I know you said it's not a one size fits all, Adam, but what are you seeing on the margins? Is this maybe something your customers are going to be doing that you'll be having to deal with over the next 12 months? And then recognizing you've got a lot to work through with Trivium in a good way. How would you size what's left in the metal markets on self-make as potentially a longer-term growth opportunity several years out? Thank you and good luck in the quarter.

Sure. Thanks, George. I think, again, a lot of customer conversations trying to make sure we all understand the impact that inflation has had not only on their business but on the products that we supply as well and You're right, we're spending time understanding their pricing strategies, their promotional strategies, how they're going to market. And it's just, it's mixed right now. I don't think I can give you a better answer than that. We have some customers and certainly some products that are continuing to focus on promotional activity, and that is driving volume growth. We still clearly see that in certain parts of our portfolio. And we've seen others, and particularly in soup, as we discussed, where they've decided they need to recover some of the inflation that they've experienced in 26 and will be taking that price to market. I want to be very careful and say we don't think that's a one size fits all across all of our customers. We really don't. But I think it's the beginning of a conversation, just making sure we all understand what their strategies are for 27 and going forward. And then on Trivium, you know I think the one thing I would say George is you know private label is you've got this challenge consumer there is trade down that is absolutely happening private label is performing very well particularly in the food can business and in the U.S. you've got a large self manufacturer that is is the the leader in the private label business so they've done a terrific job supporting consumers and providing low-cost nutrition and low-cost products in those markets. And again, they've got a really strong business model that they've continued to execute. So really, there's one large one in North America, and they've done a really nice job with their business.

All right. Thank you. I'll turn it over.

Good luck in the quarter.

Thank you, and those are all the questions we have for today. I'd like to turn the conference back to Adam Greenlee for any additional or closing remarks.

Thanks, Jess. Really appreciate everyone's interest in the company, and we look forward to discussing our full year and fourth quarter results after the beginning of the year.

Thank you. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.