With a weak dollar, Crown will see a gain in its main sectors of European food and beverage packaging as exports will increase due to cheaper prices for international customers. Sales in the European food business were up 8.5% during the quarter, driven largely by currency (+8%), and a modest lift from pricing (+0.5%) and volumes (+1.5%)[1].
Following the divestment of its plastics business, Crown has been able to earn operating margins more in line with the rest of its industry. Profitability of around 8%, which the company earned for 2005 and 2006, should be sustainable.
Crown's global scale and history of multinational operations provide the company with opportunities for growth in an industry where growth is not often found. Management has a track record of successfully operating in regions that are politically complicated, such as Saudi Arabia (where it has a 25-year joint venture) and Venezuela, Colombia, and Russia.
