First quarter highlights:
• Mivisa acquisition approved by European Commission.
• Income per diluted share $0.17; Before Certain Items $0.57, an increase of 14%.
• Global beverage can volumes grew 6%, driven by strong growth in Brazil and Asia Pacific.
Net sales in the first quarter grew to $1,993 million over the $1,973 million in the first quarter of 2013, primarily driven by increased global beverage can sales unit volumes.
Segment income (a non-GAAP measure defined by the company as gross profit excluding the timing impact of hedge ineffectiveness, less selling and administrative expense) increased to $200 million in the first quarter compared to $195 million in the first quarter of 2013, primarily due to the increase in beverage can sales.
“We started off the year well and on target and look forward to a promising 2014,” said John W. Conway, chairman and CEO. “Global beverage can volumes were up 6%, which follows first quarter volume growth of 6% and 7% in 2013 and 2012, respectively. The gains were driven primarily by strong shipments in Asia Pacific and Brazil. In order to meet continuing market growth and an increasing consumer preference for beverage cans in Brazil, we will begin commercial production this month at our new plant in Teresina. In the European Beverage segment, first quarter year-on-year shipments rose 5% in continental Europe and the United Kingdom. Global food can shipments were 3% lower in the quarter compared to the first quarter of 2013.
“Earlier this week, the European Commission formally approved our pending acquisition of Mivisa Envases, SAU,” Conway added. “We anticipate that the transaction will close on April 23, 2014. The acquisition of Mivisa will significantly build upon our existing position in the strategically important European food can segment by substantially increasing our presence in Spain, one of Europe’s leading agricultural economies. We believe that adding this well-performing business to our broad network of food can operations in Europe will result in compelling benefits to both customers and shareholders.”
Following the Mivisa acquisition closing, the company will divest certain Crown and Mivisa operations as required by the Commission. In connection with the planned divestment of the Crown operations, the company recorded charges in the first quarter to write down the value of the net assets to be sold. The total impairment charge for the quarter was $42 million ($42 million, net of tax, or $0.30 per diluted share).
Net income attributable to Crown Holdings in the first quarter was $24 million, compared to $41 million in the first quarter of 2013. Reported earnings per diluted share were $0.17 in the first quarter of 2014 compared to $0.28 in the 2013 first quarter. Net income per diluted share before certain items was $0.57 compared to $0.50 in 2013.