Ball Reports Increased First Quarter 2022 Results

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Ball Corporation (NYSE: BLL) today reported, on a U.S. GAAP basis, first quarter 2022 net earnings attributable to the corporation of $446 million (including a net after-tax gain of $194 million, or 60 cents per diluted share for business consolidation and other non-comparable items, including the sale of Ball’s former equity method investment in Metalpack) or $1.37 per diluted share, on sales of $3.7 billion, compared to $200 million net earnings attributable to the corporation, or 60 cents per diluted share (including net after-tax charges of $40 million, or 12 cents per diluted share for business consolidation and other non-comparable items) on sales of $3.1 billion in 2021. Ball’s first quarter 2022 comparable net earnings were $252 million, or 77 cents per diluted share compared to $240 million, or 72 cents per diluted share in 2021.

Details of comparable segment operating earnings, business consolidation activities, business segment descriptions and other non-comparable items can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release. References to volume data represent units shipped. In addition, the company announced on April 27, 2022, that the company’s stock ticker will change from BLL to BALL effective May 10, 2022.

“We delivered strong first quarter results amid significant geopolitical and economic conditions across multiple regions where we operate. Comparable diluted earnings per share and comparable operating earnings increased 7 percent and 6 percent, respectively. Our global team executed at a high level to navigate persistent supply chain disruptions and inflation while also commissioning capital projects on time and on budget to serve growing customer demand across our global packaging and aerospace businesses. The resiliency of our employees, business portfolio, customer and supply chain partners and communities where we operate continues to enable a brighter future for our company,” said Daniel W. Fisher, president and CEO.

“We continue to be deeply troubled by the ongoing war in Ukraine and our focus remains on our employees’ safety and well-being. Through our global employee giving and assistance programs, The Ball Foundation and employee volunteerism, we will continue to support each other and those in need. Through our proven ability to generate EVA-enhancing returns on capital and deliver sustainable innovative products and technologies to our customers while adapting to change at an accelerated pace and enabling our workforce of the future, we are well positioned to meaningfully grow our long-term diluted earnings per share, EVA dollars, and cash from operations and return significant value to our shareholders in 2022 and beyond,” Fisher said.

Beverage Packaging, North and Central America

Beverage packaging, North and Central America, comparable segment operating earnings for the first quarter 2022 were $174 million on sales of $1.6 billion compared to $140 million on sales of $1.3 billion during the same period in 2021. Year-over-year sales reflect higher shipments, the contractual pass through of higher aluminum costs and improved price/mix.

First quarter comparable segment operating earnings increased 24 percent year-over-year. Segment volume growth in excess of 3 percent, benefits from new manufacturing capacity coupled with favorable contractual terms and pass throughs more than offset inflationary costs and persistent supply chain disruptions during the quarter.

Segment specialty can mix increased to 38 percent to support customers’ demand for sustainable aluminum beverage packaging solutions to enable new brands, retail price points and delivery channels. Existing projects to expand the company’s new Glendale, Arizona, and Pittston, Pennsylvania, beverage can manufacturing facilities as well as the construction of a new beverage can manufacturing facility in North Las Vegas, Nevada, are proceeding. Projects are supported by contracts with improved contractual terms and conditions for long-term volume with global and regional strategic customers representing multiple beverage categories.

During the quarter, the North American beverage packaging operations achieved Aluminum Stewardship Initiative (ASI) certification across its 25 manufacturing, technical and office locations further enabling a responsible and transparent value chain.

Beverage Packaging , EMEA

Beverage packaging, EMEA, comparable segment operating earnings for first quarter 2022 were $100 million on sales of $942 million compared to $100 million on sales of $796 million during the same period in 2021. Year-over-year sales reflect higher shipments and the contractual pass through of higher aluminum costs offset by unfavorable foreign exchange translation.

First quarter comparable segment operating earnings were flat versus the same period in 2021 and reflect 10 percent segment volume growth and higher specialty mix offset by $7.5 million of unfavorable currency translation and the impact of supply chain tightness and inflation across the region. Packaging mix shift to aluminum cans continues and specialty can mix increased to 60 percent during the quarter. Capital projects including new lines in existing facilities and the construction of new beverage can manufacturing facilities in the U.K. and Czech Republic are on track and will enable further growth for sustainable aluminum beverage packaging across the region. Projects are supported by long-term contracts with improved contractual terms and conditions. In advance of new production coming online in EMEA, imports from the company’s beverage can manufacturing facility in Saudi Arabia supplemented existing production capabilities across Europe during the quarter.

During the quarter and as a result of the war in Ukraine, the company announced its intention to suspend future investments in Russia and pursue a sale of its Russian business composed of three manufacturing facilities. As of March 31, 2022, the company does not meet the accounting criteria for the Russian business to be presented as held for sale in the consolidated financial statements. The company continues to support humanitarian efforts in Ukraine and surrounding European countries.

Beverage Packaging South America

Beverage packaging, South America, comparable segment operating earnings for first quarter 2022 were $78 million on sales of $494 million compared to $93 million on sales of $487 million in 2021. Year-over-year first quarter sales reflect the contractual pass through of higher aluminum costs, price/mix and lower shipments.

First quarter comparable segment operating earnings decreased 16 percent. Unfavorable weather conditions, recent economic volatility in Brazil, customer mix and difficult year-over-year volume comparisons led to a 21 percent decrease in segment volume during the quarter.

Demand trends in the company’s South American footprint outside of Brazil remain favorable and growth capital projects in Chile and Argentina are on track to support rising customer demand for sustainable aluminum packaging. As a result of back-to-back quarters of cool and rainy weather conditions in Brazil during the summer selling season, customers’ filled goods inventories are being monitored and the segment’s performance is expected to improve in the second half of 2022.

Aerospace

Aerospace comparable segment operating earnings for first quarter 2022 were $43 million on sales of $504 million compared to $35 million on sales of $424 million in 2021. First quarter backlog reached $3.2 billion, an increase of 28 percent since year-end 2021, and contracts won, but not yet booked into backlog, ended the quarter at $4.1 billion.

First quarter segment operating earnings reflect improving program execution and supply chain conditions. The segment is leveraging its growing talent pool and recently expanded manufacturing capacity, test capabilities, engineering, and support workspace to secure additional defense, climate change and Earth-monitoring contracts to provide mission-critical programs and technologies to U.S. government, defense, intelligence, and reconnaissance and surveillance customers.

During the quarter, the company supported completion of the critical design review for NASA’s Spectro-Photometer for the History of the Universe, Epoch of Reionization and Ices Explorer (SPHEREx) mission. Ball Aerospace will build the telescope and spacecraft for this mission. SPHEREx is the first all-sky near-infrared spectral survey. It will produce four complete all-sky maps during its two-year mission to study the nature of physics and help NASA and the scientific community gain a better understanding of the universe’s formation.

Non-reportable

In addition to undistributed corporate expenses, the results for the company’s global aluminum aerosol business, beverage can manufacturing facilities in IndiaSaudi Arabia and Myanmar and investments in the company’s aluminum cup business continue to be reported in other non-reportable.

First quarter 2022 results reflect higher year-over-year undistributed corporate expenses offset by 10% volume growth for extruded aluminum aerosol containers and 46% volume growth in the other non-reportable beverage can manufacturing facilities where certain production is being exported to support significant EMEA segment demand prior to new capital projects coming online in 2022. During the quarter, the company’s global aluminum aerosol customers continued to pursue sustainable personal care packaging solutions including the company’s new Infinity aluminum bottle and refillable aluminum bottles for new categories.

Outlook

“The company is well-positioned for near-term and long-term growth, cost/price recovery and accelerating return of value to shareholders despite our recent decision to leave Russia. Over our 142-year history, we have successfully navigated economic and geopolitical volatility on many occasions. Our company’s resiliency, financial strength and recession resistant business portfolio continues to provide both stability and sustainable growth prospects for our stakeholders. Powered by our ownership mindset, EVA discipline, cash from operations and long-term contracts with global strategic partners, we look forward to growing earnings and returning significant value to shareholders through share repurchases and dividends in 2022 and beyond,” said Scott C. Morrison, executive vice president and chief financial officer.

“Ball’s brightest days are ahead. We will continue to support our customers, consumers and communities with truly circular aluminum packaging products as well as aerospace technologies and environmental intelligence to inform, preserve and protect our planet. Despite the challenges that exist or could emerge, our Drive for 10 vision, culture, talented team, capital allocation discipline and strong demand for our products will enable our ability to replicate our strong performance. In 2022 and inclusive of the announced intention to sell our Russian business, we look forward to growing our cash from operations and growing our comparable diluted earnings per share while also accelerating the return of capital to our shareholders via share repurchases and dividends. Through our ability to offset inflationary costs over time, achieve higher returns on capital deployed, support continued mix shift to sustainable aluminum packaging and serve growing demand for our critical aerospace technologies and services, we look forward to achieving our long-term diluted earnings per share growth goal over time and returning even more value to shareholders,” Fisher said.