Cuộc họp báo cáo kết quả kinh doanh Quý 3/2026 của Silgan Holdings (SLGN): EPS tăng 7%, nâng dự báo

Silgan Holdings (NYSE: SLGN) đã báo cáo doanh thu, EBIT điều chỉnh và EPS điều chỉnh cao hơn trong quý 3 năm 2026. Ban lãnh đạo đã nâng dự báo EPS điều chỉnh cho cả năm, đồng thời duy trì dự báo dòng tiền tự do khoảng 450 triệu USD.

Điểm tin chính

• Doanh thu thuần tăng 2% so với cùng kỳ năm trước lên khoảng 2 tỷ USD, chủ yếu phản ánh việc chuyển giao chi phí nguyên vật liệu và các chi phí khác tăng cao sang khách hàng.
• EBIT điều chỉnh tăng 6% lên 235 triệu USD, chủ yếu nhờ khả năng sinh lời được cải thiện trong mảng Bao bì kim loại.
• EPS điều chỉnh đạt mức kỷ lục 1,31 USD, tăng 7% so với cùng kỳ năm trước và nằm ở mức đỉnh trong khoảng dự báo của công ty.
• Silgan đã nâng dự báo EPS điều chỉnh năm 2026 lên 3,83–3,93 USD. Mức trung vị 3,88 USD tương ứng với mức tăng trưởng 4% so với 3,72 USD vào năm 2025.
• Ban lãnh đạo duy trì ước tính dòng tiền tự do năm 2026 ở mức khoảng 450 triệu USD, bao gồm khoảng 310 triệu USD chi phí vốn.
• Sản lượng nước hoa cao cấp tăng trưởng ở mức một chữ số tầm trung, trong khi các sản phẩm phân phối dược phẩm theo đơn tại Bắc Mỹ đạt mức tăng trưởng hai chữ số. Mức tăng này bị bù trừ bởi nhu cầu thực phẩm và đồ uống yếu hơn.

Dữ liệu tài chính chính

Kết quả kinh doanh và hoạt động

Hệ thống phân phối và Nắp đóng chuyên dụng

Sản lượng phân đoạn đi ngang so với cùng kỳ năm trước. Mức tăng trưởng ở các sản phẩm phân phối nước hoa và dược phẩm đã bù đắp cho sản lượng thực phẩm và đồ uống thấp hơn.

Các sản phẩm nước hoa cao cấp đạt thêm một quý tăng trưởng ở mức một chữ số tầm trung. Ban lãnh đạo cho rằng kết quả này đến từ việc ra mắt sản phẩm mới, đổi mới sáng tạo và hợp tác với khách hàng. Công ty kỳ vọng mức tăng trưởng dài hạn ở mức một chữ số tầm trung đối với các sản phẩm nước hoa và làm đẹp.

Các sản phẩm phân phối dược phẩm theo đơn tại Bắc Mỹ tăng trưởng ở mức hai chữ số. Silgan mô tả chăm sóc sức khỏe và dược phẩm là một trong những mảng danh mục tăng trưởng nhanh nhất của mình, mang lại doanh thu hàng năm khoảng 250 triệu USD. Ban lãnh đạo cho biết các sản phẩm thuộc ngành có sự quản lý chặt chẽ này thường có lộ trình phát triển từ ba đến năm năm và kỳ vọng sẽ tiếp tục tăng trưởng trong năm 2027.

EBIT điều chỉnh của phân đoạn giảm 2 triệu USD do chưa bù đắp được lạm phát. Silgan cho biết các hành động điều chỉnh giá và cơ chế chuyển giao chi phí theo hợp đồng sẽ hỗ trợ tăng trưởng EBIT tự thân so với cùng kỳ trong phân đoạn này vào quý 4, mặc dù một số sự phục hồi dự kiến sẽ kéo dài sang quý 1 năm 2027.

Bao bì kim loại

Sản lượng mảng Bao bì kim loại giảm 4%, do sự tăng trưởng của đồ hộp rau quả và thức ăn ướt cho thú cưng bị lấn át bởi nhu cầu súp yếu hơn. Doanh thu tăng 1% do chi phí thép, nhôm và sản xuất cao hơn được chuyển giao sang khách hàng.

EBIT điều chỉnh tăng 9 triệu USD so với cùng kỳ năm trước. Ban lãnh đạo đã đề cập đến nhịp độ sản xuất chuẩn hóa hơn, quy mô sản xuất ổn định và hiệu quả giá - chi phí thuận lợi. Các lợi ích này cũng bao gồm chương trình cắt giảm chi phí nhiều năm của Silgan, vốn đã cắt giảm 50 triệu USD chi phí trên toàn bộ mạng lưới hoạt động và bao gồm việc đóng cửa ba cơ sở trong năm trước.

Bao bì tùy chỉnh

Doanh thu tăng 4%, nhưng sản lượng giảm 8%. Mức giảm này phản ánh một phần kế hoạch rút khỏi mảng kinh doanh có biên lợi nhuận thấp hơn của Silgan sau khi tối ưu hóa quy mô cơ sở.

Dù sản lượng thấp hơn, EBIT điều chỉnh vẫn vượt mức năm trước và đạt kỷ lục theo quý. Hiệu quả giá - chi phí thuận lợi, cơ cấu sản phẩm và tiết kiệm chi phí từ việc thay đổi quy mô cơ sở đã hỗ trợ khả năng sinh lời. Công ty sẽ hoàn tất mốc một năm rút khỏi các mảng kinh doanh này vào quý 4 năm 2026, tạo ra cơ sở hoạt động dễ so sánh hơn vào năm 2027.

Dự báo của ban lãnh đạo

Ban lãnh đạo kỳ vọng sản lượng quý 4 sẽ tương đương với cùng kỳ năm trước ở cả ba phân đoạn. Công ty hiện cũng kỳ vọng sản lượng cả năm 2026 sẽ tương đương với năm 2025 ở mỗi phân đoạn.

Silgan kỳ vọng thương vụ thâu tóm Trivium đề xuất sẽ hoàn tất vào giữa năm 2027. Ban lãnh đạo cho biết công ty đang lập kế hoạch cho một năm tăng trưởng lợi nhuận tự thân và dòng tiền tự do khác vào năm 2027, mặc dù Giám đốc Tài chính Shawn Fabry mô tả mức tăng dòng tiền tự do dự kiến là khiêm tốn. Việc chuẩn bị cho cơ cấu Silgan MCC và Silgan DS mới dự kiến sẽ yêu cầu khoản đầu tư vốn bổ sung.

Rủi ro và các yếu tố cần theo dõi

• Nhu cầu của người tiêu dùng vẫn đối mặt với thách thức trong các thị trường thực phẩm và đồ uống, chăm sóc gia đình, cũng như sân vườn khi người tiêu dùng cố gắng thắt chặt ngân sách gia đình.
• Sản lượng súp suy yếu sau khi một khách hàng lớn quyết định tăng giá để bù đắp lạm phát chi phí nguyên liệu, năng lượng và vận chuyển. Silgan không kỳ vọng sản lượng súp sẽ phục hồi đáng kể trong quý 4.
• Theo ban lãnh đạo, chi phí hạt nhựa tăng hơn 50% trong năm 2026. Các sản phẩm phân phối có độ trễ bù đắp chi phí dài hơn so với các mảng khác trong danh mục.
• Sản lượng thấp hơn tại Brazil vẫn là yếu tố ảnh hưởng tiêu cực đến cơ cấu sản phẩm của mảng Hệ thống phân phối và Nắp đóng chuyên dụng. Ban lãnh đạo kỳ vọng sự phục hồi chủ yếu sẽ diễn ra trong năm 2027.
• Cơn gió ngược từ tỷ giá, chi phí vận chuyển, sự biến động của nguyên vật liệu và gián đoạn địa chính trị cũng được đề cập là những thách thức trong hoạt động.
• Giao dịch Trivium sẽ yêu cầu lập kế hoạch tích hợp và đầu tư để chuẩn bị cho các mảng kinh doanh phù hợp với cơ cấu hoạt động mới được đề xuất.

Tóm tắt phiên Hỏi & Đáp với chuyên gia phân tích

Khi nào biên lợi nhuận của mảng Hệ thống phân phối và Nắp đóng chuyên dụng sẽ cải thiện? Ban lãnh đạo kỳ vọng sự bình thường hóa sẽ bắt đầu từ quý 4 năm 2026 khi các hành động điều chỉnh giá bù đắp lạm phát chi phí hạt nhựa và các chi phí khác. Một số sự phục hồi ở các sản phẩm phân phối sẽ tiếp tục kéo dài sang quý 1 năm 2027 do các cơ chế chuyển giao chi phí hoạt động với độ trễ dài hơn.

Đà tăng trưởng của mảng nước hoa có thể tiếp tục vào năm 2027 không? Silgan kỳ vọng mức tăng trưởng ở mức một chữ số tầm trung ở các sản phẩm nước hoa cao cấp. Ban lãnh đạo cho biết các khoản đầu tư cho những đợt ra mắt năm 2027 đã được thực hiện và các cuộc thảo luận với khách hàng đang được tiến hành cho những đợt ra mắt vào năm 2028 và 2029.

Yếu tố nào đang hỗ trợ sự tăng trưởng của mảng phân phối dược phẩm? Công ty đưa ra lý do là công nghệ phân phối biệt lập, đổi mới sáng tạo và mối quan hệ hợp tác với khách hàng thay vì cạnh tranh về giá. Kết quả hoạt động quý 4 dự kiến sẽ duy trì đà tăng trưởng tích cực như đã ghi nhận trong quý 3.

Cơ cấu danh mục đầu tư dự kiến sẽ ảnh hưởng như thế nào đến khả năng quan sát đà tăng trưởng? Ban lãnh đạo cho biết mảng kinh doanh Giải pháp Phân phối trong tương lai sẽ tập trung hơn vào các thị trường nước hoa, làm đẹp và chăm sóc sức khỏe có tốc độ tăng trưởng nhanh hơn và biên lợi nhuận cao hơn. Nắp đóng thực phẩm và đồ uống sẽ chuyển sang Silgan MCC, giảm bớt hiệu ứng che khuất đối với đà tăng trưởng của mảng phân phối.

Giao dịch Trivium có hạn chế các sáng kiến tăng trưởng khác không? Ban lãnh đạo cho biết giao dịch này được thiết kế để duy trì mức đòn bẩy trung tính cho Silgan. Mảng kinh doanh Giải pháp Phân phối dự kiến sẽ bắt đầu với tỷ lệ đòn bẩy khoảng 1,8 lần, giữ nguyên dư địa cho việc triển khai vốn.

Toàn văn cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and welcome to the Silgan 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.

Alexander Hutter

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 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 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.

Adam Greenlee

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 2 exceptional packaging companies in 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, mid-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 in 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 vegetables 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 costs 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 enabled 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, end 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.

Shawn Fabry

Thank you, Adam. As Adam highlighted, we reported 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 was 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 pharma 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 Container 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 EBIT was $9 million above prior year levels as a more normalized volume cadence in 2026 and stable footprint exiting our multiyear cost reduction initiative 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 pass-through 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 $0.76 to $0.86 per diluted share as compared to adjusted EPS of $0.67 in the prior year period. At the midpoint, this estimate assumes a higher year-over-year adjusted EBIT of approximately $10 million to $15 million, interest expense of $45 million 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 2026, as Adam discussed, we are increasing our estimate of adjusted EPS to a range of $3.83 to $3.93, a 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 million 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 3 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?

Operator

[Operator Instructions] We'll take our first question from Ghansham Panjabi with Baird.

Phần hỏi đáp

Ghansham Panjabi

Adam, maybe you can expand on 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? What are your customers sharing with you as it relates to their strategy to offset some of this as we think about 2027?

Adam Greenlee

Yes, 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 mid-single-digit growth in our wet pet food segment, we talked about, again, terrific performance in our fragrance products and now a rapidly accelerating and growing prescription pharma business as well.

We've got consumers primarily kind of in the food and beverage markets, 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 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 I think we feel really good about the strategic initiatives that we have that are driving volume growth through other pockets of the portfolio.

Ghansham Panjabi

Okay. Got it. And then for the DSC segment, just looking at EBIT margins year-over-year, it's about 6 quarters in a row for the margins having declined on that basis. Obviously, a lot going on with the end markets and inflation. But what do you think is a reasonable time line for margins to stabilize on the same basis? Would it be 4Q? Is that what you're embedding in your model at this point?

Adam Greenlee

I think I'd say you'll see some normalization in 4Q. Obviously, we -- there's been a lot of inflation that's been passed through, Ghansham, whether that be raw materials in 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 will 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 the inflation. We take -- 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.

Operator

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

George Staphos

I appreciate the details. I want to actually piggyback on both the topics that Ghansham 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 2027 because it takes some time? You did say it takes a couple of quarters to get that.

My somewhat related question, just again, we had been expecting based on your guidance, low single-digit growth, I guess, against both metal and customs, custom, obviously, excluding the walkaway business and I think low to mid-single in 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?

Adam Greenlee

Sure. Maybe starting with the first one, George. 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 pass-throughs that we just talked about with Ghansham. 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 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. So we're not anticipating a recovery -- 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 3 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.

George Staphos

Okay. I appreciate that. You stole my concluding point there, but profits 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 talked 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?

Adam Greenlee

Sure. Brazil, as 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 -- and George, when you think about the products for us in Brazil, they're very mix favorable for the company and for DSC in particular. So it's with lower volumes in Brazil, it does impact the mix line as well.

And when we think about the investments, just as we prepare for the acquisition close date in mid-2027 for Trivium. We haven't really prepared anything to share at this point as far as the magnitude of those investments. I think we're taking a very deep dive look at all 3 segments that we have today and making sure that we prepare them for a successful transition next year. And 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 those businesses are ready and able to stand on their 2 feet in very secure footing.

Operator

[Operator Instructions] We will go next to Matt Roberts with Raymond James.

Matthew Roberts

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 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 and '27?

Adam Greenlee

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 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're -- 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 Silgan, and we're anticipating nice growth again next year as well.

Matthew Roberts

I appreciate that. And we already hit on the dispensing margin a little bit. I know you probably only frame '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, when you get those cost recoveries, you just discussed pharma growth and Brazil recovery, how do you envision just Dispensing Solutions ramping in 2027 or longer term? Or maybe said differently, excluding some of those onetime closures impacts, how is just the dispensing performed on an organic or going-forward basis?

Adam Greenlee

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 maybe I'll circle back to our current portfolio. So even though we've had a challenged consumer in 2026 in certain markets, nothing has changed about our outlook or expectations for the long-term volume profile of any of our segments.

I think as you then transition the Dispensing and Specialty Closures segment to more of a Dispensing Solutions 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. So again, I think nothing has changed about our view on specific markets, but we should be delivering a higher growth rate in Dispensing Solutions because it will be more focused on faster growing and higher market or higher margin end markets going forward once we make that transition.

Operator

We will go next to Jeff Zekauskas with JPMorgan.

Jeffrey Zekauskas

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?

Shawn Fabry

Jeff, this is Shawn. 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 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 focused on all attributes around free cash flow, including the CapEx equation.

Jeffrey Zekauskas

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?

Adam Greenlee

Yes. 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 and 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 we'll be recovering over a period of time, 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 -- for our dispensing products will bleed into Q1 just as you would expect. And we follow our pass-throughs really follow the changes in resin costs very tightly.

Operator

We'll go next to Anthony Pettinari with Citi.

Bryan Burgmeier

This is Bryan Burgmeier on for Anthony. In the press release, you mentioned better price cost for Metal Containers in the quarter. I'm just curious if that relates to your formula pass-throughs or maybe some underlying cost saves. And just zooming out maybe from a high level, how has inflation sort of impacted Metal Containers this year? And how will your formula sort of compensate for that? Is there any incremental catch-up into '27?

Adam Greenlee

Sure. Bryan, 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 3 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. So we have closed 3 facilities from last year. That lowered 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 allowed us to operate our facilities much more efficiently. So you've really got those 2 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-through 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 will be passing through in '27 as we have been for -- really since the inception of that part of our portfolio.

Bryan Burgmeier

Got it. Got it. 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?

Adam Greenlee

Yes. I mean I think 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. From a -- that's from an operating EBIT 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, do you want to talk about interest?

Shawn Fabry

Yes, sure. So interest was also favorable in the quarter versus our expectations. 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, I'll call, 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, we'll call, volume cadence. So good performance on interest. We expect that to carry into the balance of the year. And now we're expecting interest to be comparable year-over-year from a full year basis.

Operator

We will go next to Mike Roxland with Truist Securities.

Michael Roxland

Adam, you mentioned implementing actions to recover cost increases in 3Q and 4Q. You specifically called out in Dispensing and Specialty Closures that where you don't have contractual pass-throughs, you've taken 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 through in DSC or your other businesses to recover costs?

Adam Greenlee

Yes. Good question, Mike. And maybe I could clarify. So the vast majority of the business that we have in our -- certainly our Dispensing and Specialty Closures segment do have contractual pass-throughs. Most of that is related to raw materials. So I probably could have been clear 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 team 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.

Michael Roxland

Got it. That's very clear. I appreciate the clarification. And then just one quick one. Can you talk about your ability to expand or to further expand in healthcare and pharma at the same time you're pursuing this transaction with AIP? Obviously, you're gaining notable traction with prescription pharma, up double digits, as you called out in North America in 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?

Adam Greenlee

Yes. And then maybe I'll just -- I'll start, and everybody else, Shawn and Alex, please fill in here. But maybe just start with the idea of, again, back to Silgan 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 and in Connecticut.

And so I actually think, in fairness, it's no change whatsoever, even with the announced 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 leverage neutral to Silgan, 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, leverage at inception of about 1.8x. 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.

Operator

We'll go next to Hillary Cacanando with Deutsche Bank.

Hillary Cacanando

So fragrance has continued to grow mid-single digits 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 -- how much is market growth versus share gains or new business wins for you?

Adam Greenlee

Great question. It's -- 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 team is 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 win 7 of the 8 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.

Hillary Cacanando

Got it. That's really helpful. And then 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?

Adam Greenlee

I think it's going to be incremental capital. As we look at it, we've got -- whether those are, I'll say, relatively minor investments in products and operating facilities and people and teams as we go forward. 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.

Operator

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

Arun Viswanathan

I guess I just wanted to drill back on the volumes a little bit. So specifically within DSC, I think maybe could you help us understand -- understanding that fragrance and prescription pharma was really strong. How much of that -- does that make up of the segment and maybe on a percent of sales or EBITDA basis? And then do you -- 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?

Shawn Fabry

Yes. 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 healthcare, as Adam said, is about a $250 million business for us.

Adam Greenlee

And then I think just as we kind of bring all that together, you're right, it's the growth that we saw in fragrance and the growth that we saw in healthcare was offset mostly by the food and beverage softness that we saw. And I think as we turn to Q4, we're expecting a similar scenario where volume 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 challenged consumer in kind of our food and beverage markets.

Shawn Fabry

The only other thing I'd add, Arun, is part of the design of the transaction with the separation between MCC and Dispensing Solutions is to be able to show this growth in the dispensing side more clearly to you. So that part of the portfolio you were asking about fragrance and beauty, personal care, that's about half of the end market for Dispensing Solutions. 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 obviously less clear as we -- as those get more focused on the growth end markets in DS.

Arun Viswanathan

And I guess, 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 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?

Adam Greenlee

Sure. I think just as our -- Silgan's outlook on the segment, nothing's changed from a long-term perspective from a volume expectation perspective. So we do think long term, we've got kind of mid-single-digit growth in our fragrance and beauty, probably closer to high single-digit growth in 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 nothing has 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 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 it's not a one answer fits all across all of our customers, and we're working with them 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.

Arun Viswanathan

And 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?

Adam Greenlee

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 solution, and those are being rewarded in the marketplace.

Operator

We'll move next to Anojja Shah with UBS.

Anojja Shah

My first question is, can you remind us when the business exit that is happening in Custom Containers when that anniversaries? 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 Silgan dispensing business.

Adam Greenlee

Sure. Look, we've taken a lot of cost out of our Custom Container segment, as 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 year. So I think it leads to a larger conversation in Custom Containers about how we view that business going forward. We were -- we've been on a long journey improving that business, and we've taken costs out. We've improved margins. We 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 the 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 worked really hard to get to. And think that's a great part of our Dispensing Solutions portfolio on a go-forward basis.

Anojja Shah

Great. 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 multiyear 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?

Adam Greenlee

Sure. I think we can have some of those conversations as we go forward. But I will say this, I mean, 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, 5 or 6 straight quarters. And 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.

Operator

We'll go next to Daniel Rizzo with Jefferies.

Daniel Rizzo

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 multiyear 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?

Adam Greenlee

Sure, Dan. Look, it's a rapidly growing part of our portfolio, and we've talked about it being roughly a $250 million overall business for us at Silgan, resides primarily in what will ultimately be the Dispensing Solutions segment. And you're right, these are regulated products for the most part. So these do require significant development, significant regulatory review. These are 3- to 5-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.

Daniel Rizzo

Is there like a win-loss ratio? I mean, I assume that some of these products that you're working with on the Drug Master 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.

Adam Greenlee

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 dispensing 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.

Operator

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

George Staphos

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 your customers 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 margin? 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? And good luck in the quarter.

Adam Greenlee

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 elected to -- or they've decided they need to recover some of the inflation that they've experienced in '26, and we'll 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 the conversation, just making sure we all understand what their strategies are for '27 and going forward.

And then on Trivium, I think the one thing I would say, George, is private label, as you've got this challenged consumer, there is trade down that is absolutely happening. Private label is performing very well, particularly in the food can business in the U.S., you've got a large self-manufacturer that is 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.

Operator

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.

Adam Greenlee

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.

Operator

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