BLL - Earnings call transcript Q4 2020

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Operator

Greetings, and welcome to the Ball Corporation Fourth Quarter 2020 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded, Thursday, February 4, 2021. I would now like to turn the conference over to John Hayes, CEO. Please go ahead.

John Hayes

Great. good and Dmitra, you, morning, everyone. Thank Ball quarter and is Corporation's conference fourth company's the regarding full call This year results. XXXX provided information statements. during call will The contain this forward-looking may differ Actual outcomes materially be expressed from results or may those or implied. that

results company Some outcomes are news XX-K in releases. to latest filings SEC or other factors company's cause company the as differ could and that the in well as

earnings non-GAAP on financial don't release. diluted If per a may of the our our available website as and consolidation and have it's regarding section at summarizing activities already table found you use The earnings be as a release, of measures also notes calculations. operating includes in well share Information ball.com. of earnings reconciliation business other release the also earnings today's comparable

and the new include press our financials reporting for other release segments. addition, description nonreportable segment In of EMEA

Chief and discuss some up the new Now Executive on and metrics, Vice joining comments Fisher, discuss will will and Dan me aerospace and I'll then and for our financial Officer. with the are packaging on performance company. call trends; Morrison, Scott remarks; outlook today Dan Financial Scott I'll key President; the President finish introductory provide

able by employees. thanking challenges. First, customers let me begin work Together, to we safely, hire of our growth new external unprecedented and were thousands adapt, and our serve colleagues amidst

spirit can-do and remarkable. adaptability are flexibility, empathy, Your

and strong work family employees up We're organization with XX% as businesses with packaging dollars businesses, X% up and us. enhance on financial full our EVA strong an each net to diluted dollars And our and per capital earnings the finished for communities per even year comparable have of up has significantly shareholders quarter to Together, fourth and share and execution year-over-year. diluted our we blessed betterment net you. XX%. give thank of to with as conviction a which put all. thank and all flexibility ability of a earnings of and comparable XX%. in taken beverage challenges you aerospace we investments return in I and XXXX our up us book not growth significant balance up So and value all operations. in sheet profound is the our beyond. us Full earnings on backlog elements in is year also cash global and grow want full trajectory as growth together, respectively, for year you and will The ability EVA won these share, persevered. of XX%, granted suppliers past our from a well. customers, work greater across by our continues all operate to XXXX and in This aerospace year with XX% to Momentum truly volumes

Our in working focus investments, systems the long-term leveraging our customer training, safely, and talent, deliver on to enhancing executing value. processes and and portfolio investing experience remains technologies, capital on product

as and many Charles Polly, well-deserved to retirement Kaufman, of I to well-deserved upcoming including to our over since Kerry their Dan, last Dave his to Lewis, limited well Jay on Billings Morrison, Johnson had and Platt variety on and promotions Ron Scott Cozy, call, Stan performance, turn promotions contributions Lisa ball. to as it I discuss we've congratulate Before not our a to: want Dan earnings but business everyone,

create engage highlights Other this of equal time support the in end is the sizable to long-standing and planning people our further XXXX least to amount while to completed billion mentors Brazil a to projects In succession process lines speed leaders opportunities I for growth numerous include: our over contracted long-standing base of XXXX, Ball Ball. by announcing at their Our is happening us. units or up perfect of With as front is once-in-a-lifetime rising to serve XXXX. in U.S., leveraging thoughtful. our success is employee opportunity additional well X,XXX in us our thorough of at and and the global XX each up completing of and the every capacity start-up business EMEA one has install beverage as of as speak,

aerosol on business Our aluminum in successfully aerosol Brazil. acquisition closed aluminum the manufacturing plant

launch, manufacturing team Our expect shortly. aluminum dedicated in cups expanded up XXXX cups and for facility our first retail constructed our which preparation started we

renewable to be folks who a we behaving in significantly carbon programs Ball we what's important, training alignment have rise and Despite regions. ensure most immersion to down over of it business help Dan. possible where even listening, the owners quickly to you custody bring energy the to continues family reviewed position to GANA as it for the and publishing our from are development nothing or third-party like we're health implemented I'll are, capacity it our businesses to our best of to whether remaining whether continued infrastructure to our mindset of our as and leadership the as our aluminum In in that, everyone sustainability several that's climate us a analysis Ball its and ensure increased COVID-XX beyond. to system-wide independently packaging Dan? to best footprint; global that continues online various and into our startups plans in EVA variety XXXX operate certification cases up in good certification that drove launch employee programs; we targets ASI targets our relative life or new businesses, And the is where excited providing additional achieve of foster ASI strength, X.X-degree the finalized as to approval going with in in your package as performance of our substrate achieved intergovernmental wishes is verified slowing true get be the smooth of brighter. culture. and and inclusivity safely And well operate, to hosted safety. world, Our help cycle and further packaging to aluminum virtual as on Celsius summary, projects getting programs change; panel speed and in be geographies To on EMEA we sustainable the future in with the science-based turn

Daniel Fisher

as come. how we deal trajectory echo and Thanks, sure. XX estimation, the XX,XXX humbling to Ball thanks ended is over In means that all great the for and continuing to our years role me year, certainly years. to new silver that has of during into John. It I step last my my I team been a a This and company for brighter, future We is to never the has to forward closer look with XXXX, to lining employees, your a became customers members our for Transitioning suppliers. President.

safety aerospace have team environmental continue our our to professionals and And and and and services care facilitated employees of additional impacted and keep HR health access members outside their health packaging in vigilant. our Thank you safe COVID-XX. again. regions U.S., to teams for certain and Our the by family

lives. You are saving

in dollars and and up XX%. increased up mix earnings second America outlook. to In volumes time some X%, and I'll spend our X% global global were First, beverage EMEA. quarter aerospace XXXX, to were beverage Specialty EVA increased South and then we on the XX%, performance move despite discussing difficult operating

We team contracts; portal, on aluminum new manufacturing scale; the experience ensure also The procurement. delivered customer And truly commercial challenging team to and expanded began resourced; supply refocused group circumstances. cup chain Source; leaders across of elevated as and in a customer diverse secured the we engineering, mentioned, management, with properly new is at growth our sustainability. progress made The customer significant our commercializing John amidst

can support is and in I'm to only market about agile product and product day these opportunities and XXXX, product customer business in as continue XX terms capabilities is great leading units least largest to XXXX, world's of in is portfolio XXXX By of are the chain, global have the our favorable. that XX and positive growth ability deliver portfolio, aluminum excess billion bottles units, February, goals global in expansions customers' It Contractual to extensions. vital that a installed we well we packaging manage continue at double-digit our by aluminum XX% is filling discussed the a broaden conditions support markets. very first global and capacity industry to accelerating, capacity to with resilient believe will at billion As end we least leverage cans, and to discussed our growth aspiration specialty consumers mix every complexity, and XXXX, continue more cups. to our go our we and And sustainability in we for will of XXX low supply volume Day. By and and addressable is brands effectively throughout the positioned capture achieve Investor though it units their given XXXX and through growth. sustainable Ball customers at beverage scale in even and experience our deliver billion

preparations. chain to and course, in the primed these adhere And have equipment, by every multiyear into metal of supply supply. entering We for coatings contracts facet next-gen discipline our of EVA

will of execute. coming North plus America continues demand X outstrip year-over-year our the influence billion EMEA of size business. growth run to despite and rate At and units Therefore, across and we rates. online, capacity South present quarterly coming additions Now America, supply annual online timing capacity

and short-term any by points. growth journey. fellow put, multiyear flexibility a an growth shareholders data that a proven wherewithal the established this distracted significant invest value has and more highly get Simply not lot let's with along to company story the cash-generative of So is from to a return rate

We be the help and economy manufacturing to recover. U.S. global able jobs skilled are to in thankful elsewhere the to add

have Also up being the our to running adjacent costs preparations that needed its Worth speed, capacity I'm Arizona line second Ball, Glendale, already up As report in our and happy Rome our lines and ramp plant lines with customers' started our to at be line that to half and to new our located key. minimize best plant, facility. new been initial are startup XXXX. our provide the operation recently, to look new support filling forward, much in Pittston, -- installed in that successful customers we experience incremental execution Glendale in are will made startup Fort of Pennsylvania

in-manufacturing align facility XXXX. In executing Kentucky, facility addition, Bowling footprint, investments additional we coming and in end Green, a American anticipate We to the of new across end online can including will availability. North construction our in be

announced to look the improved outside we of to fast-growing cans X-line XX% in market As plant X-line new our Brazilian in beverage plant and can beverage, intention Specialty network full the across America North Republic, new Frutal, plant Czech XX%. In fourth out and we can and supply our U.S., this XXXX. month beverage were additional can our global a Brazil X%, to respectively. late will mix up year volumes the in quarter open

see mix. be we and to XX in the will the forward, offset X% and and start-up years offsetting than given In continued specialty, Going will to contractual throughout longer mix new impact. growth supported capacity new In support growth all the continued and continue volume contracts. be and coming are more costs of expected range benefit of improved labor terms of than year, costs capacity with XXXX, volume over next American-centric quarter, growth the volume pace by the given fourth million, duration to supported start-up growth their by improved the North of X scale them, the greater in online and X

and segment prioritize we on depending look capacity additional the to America continuing to growth industry see into year, North to momentum XXXX. increased positive demand EMEA, for X% fourth and online, throughout year throughout full continue XXXX. has And demand plans coming XXXX. into specialty the volume outstrip the customers' improved In well to opportunities XX%, beyond. our supply We XX%. all Despite possibly expansion, trends forward EMEA up continued and and mix in quarter of XXXX Across rate the and discussing was capacity respectively, business, and

XX%. supported be beverage utilizing capacity, plant in provided European can Tight well beyond. the up new capital growth cans and as projects supply/demand the completed region we Czech needed mid-single foresee opportunities. new and Additional digits by Future volumes like categories and other of by respectively, and continues, projects regional cans category, as package XXXX will and across EVA. all in lens resulting we will through up driven the specialty aluminum volumes America, were mix In fourth full year XX% assess in to and future South mix increased our XX%, the for beer quarter growing opportunities

of in the quarter, remains difficult XXXX. prior very a in of XX% store beverage anticipate package have XXXX been at aluminum can and commentary, can XX% first growth In cans on other recyclable controlling can and high global the a by like summary, Lewis, shelf to the Following a we substrates and over year resilient, mix owners the control. Ron to on investments supported mix second the team, remaining quarter versus with our range high shelf facility. led by rate will leveraging challenging and the Similar now through new our cans navigated and end mid Frutal teens our beyond sheer we beverage things dynamic

thank teams also our India, supporting regions beyond. and ventures We global Arabia in and packaging. XXXX Sticking much-needed global Saudi for during our with support joint global and

sustainability pivoted aerosol and and job cups hair in a team John and decline due deodorants to exciting personal prepare products global an volumes integrated global continued execute a X% during an costs, team for plastics. Earnings diminished challenging solution reclosable and to now care aluminum managed did teams. increased amazing team slightly our categories, of an Our shampoos, during use for And The to in corn year. refillable, positioned as our lotions infinity care mentioned, new XXXX. acquisition despite

to turn profit a the business, starting Following in $XX we investment stand million company's the business expect cups up our to XXXX. plus

inefficiencies fourth is happy aerospace. business X%, grow. and earnings of to no the Q&A. which ability X% quarter to improved brought COVID during to year Impressive change given current a address respectively. the Full environment, I'm our Turning there operating Rest results during about and in assured, by operating variety

momentum, to and on Our not growth. team our winning support persevered work and lost talent has new new any bringing

new infrastructure, tools unfunded increased new contracts, XX% our and on upgraded won study year-over-year. executed and also systems We backlog,

our be industry Thank Dave to knowledge to I about leveraging assume roles. as note, very again we business continue long-term of our this Kaufman's globe. you the excited as We And of around a on forward the prospects new personal both all well. to extensive teams look

it it remarkable. leadership and Scott. I'll has Your With Keep It's safe. short over going year. of that, up be turn amazing been to nothing stay another to

Scott Morrison

into businesses beverage the flexibility can Ball's XXXX, to in balance the ready very are shareholders. year. also strong. billion facilities. necessary and Comparable focus I'll market and count we is speed our reflects growing, in XXXX, business in quarter dynamic the the Dan. related start-up U.S. healthy earnings in higher of diluted share ample excellent beverage new share keep our dollars $X.XX with $X.XX growth. in, increase on returning sheet an to to my liquidity cups EVA results, our share global next offset aerospace CapEx sheet comparable interest per the quarter costs lower XX%. million $X.X and for we're The in diluted current strong and and initiatives, invested versus corporate Fourth by fourth to XXXX fourth comments in quarter segment XXXX. account key and for a expense, lower and costs, and business an environment. growth specifically new labor Thanks, Taking metrics per $XXX All and for earnings were and mind balance stair-step are in while ongoing

As we to additional metrics keep today, mind for here key XXXX. sit in some

we be of in effective nonreportable the corporate be Our range year year recorded will $XXX in And and the expense year. comparable to is $XX of the Full as rate full in XX%. tax million, costs support expected growing will year of other larger on full roughly earnings past be with million in range flat businesses. undistributed interest the range our

path cash continue from with see to term, XXXX from doubling earnings And to the XXXX. Our we operations grow, in cash operations line our trajectory. longer by will a

of production CapEx business. investing capacity we while EMEA America, currently even growth aerospace facilities, South more XXXX beverage North be we'll in billion. cups in and expand year's to aluminum America, Day, be excess also CapEx at to our last As discussed investing can Investor expect And $X.X in

of be shareholders. will internal well growth multiyear value rate and our balance to return our opportunities, real-time continues and returns continue. to XXXX, that cash with growth consistent good after-tax Beyond to organic investments stewards serve of above Ball X% will prudently our

term, our long-term you, with for of I'll eye to even the returns, we're Given capital balance the managing John. our value with that, sheet flow, our effectively, managing And shareholders with beyond. in XXXX returning flexibility on long growing an it cash the and and investing turn appropriately back business operating EVA more to

John Hayes

be doing lead summary, for in to as new our In to and commitment well and products Scott. Drive customers, expansion, delivering we close value our year be growth in and XXXX, a while upon our so Thanks, our operation. Ball Great. to our whether us with to being vision XX geographic decade invest very served XXXst the developing and past markets with integrity. to indeed embark over in significant it and customers uncompromising positioned sustainable uniquely shareholders continues broadening

ability here our XX% to As goals exceed beyond and per share per grow X% than EVA year earnings is goal expectation. today, greater we of to growth in and certainly comparable sit diluted our to long-term X% our of dollar XXXX achieve or our XX%

will working safely investments. together on teams Our possible to capital work and do outperform, execute everything

Our for we with are great time Dmitra, And is to thankful promise and look as year opportunity. and at now, of XXXX questions. ready we're that, a

Operator

[Operator Instructions].

from the first Our line comes Stanley. Neel with Morgan of Kumar question

Neel Kumar

America, terms just us growth the bit in were various on about how costs? out color higher and earnings provide And quarters. America pieces, XXXX on margins can then costs, $XX in based incremental Can sense lower a potential of contractual higher start-up quarter? North in margins moving the you've you this volumes, just think and seen give the general, in adjust should a we better million the some of like start-up we just sales lighter and North than In are why you Central prior what incremental still

Scott Morrison

$XX that you the I'll of at and to I business. mean, growth in take half the incremental Yes. cost, of just if Scott. the that support total of This is Sure. increased is start-up labor look about half million that. about is

If and those quite perspective you then few be going to the what as look a would the good at aren't it standpoint normally -- and from you margins fourth on cans in were that incremental importing a also, remember, from we as cans quarter, mix get.

ramp we'll less. do we this that capacity, as up need to So

so will improve. mentioned I million we'll time, putting profitability we as think I in start-up probably And And too, dampen those the improve expect. grow. over the is will so mix will that margins we're that will that XXXX there's would remember, of But most capacity we XXXX, specialty, the costs And of in see in margins. $XX

You'll see these up think most and Bowling these because investments lot of like a as half much of Pittston I as and in that well. big term, year ramp our going after-tax the But we're target. facilities, first we on start X% than they've better to Glendale the Green achieved long

Neel Kumar

means terms Brazil, in versus And shelf talked then point to your about And high-teens expectation growth of XX% you you helpful. like that what achieving in talked just first you mix of Ball-specific cans mix general can us XX% in one of of the about give demand? a from sense or mid- a That's Great. Brazilian demand? in an region, at the elevated Could in Brazilian the shelf comment quarter. is

Scott Morrison

Good question. Yes.

it's it's general where I the now. trending demand in right think It's market.

more in why glass. that Brazil X is in, have, space, really all different And well historically a we've a and into a And this a beer little I seen penetration. they of returnable we've characterization incumbent over color the talked give last in with come and and to have the done years, huge there's I'll X offerings, series of can competitors Obviously, principally think about cans. has So happening. they've in little bit you leaned

end that. grocery to carry of operators the store like bottles. think consumer liking I is They The returnable and glass retail that. kind these want don't

growth. I had incremental well To shareholder talking lifts about the a this in or Day, terms And is And XXXX large talking end low our summer, thinking were grow, mid-XXs earlier our penetration. we what the day, XXs so in -- wants. incumbent I -- when Investor that offer we the as characterize influence we we were probably back and we think what when consumer has were continued were shifting to to of in think to characterizing about can from the

XX% billion X the a XX, versus to delta years. could be to in that billion so to And X next low X it X cans

that -- high that today we comments, And are our I we so in that the third was quarter, quoted was it prepared in believe in number the like XXs.

could XX%. even next can see rate. and is referenced over And so how in and now to we'll operating that the you bullish that more on, where going on a that's out XX%, COVID beer what advancement. we're quarters North of we're have America everything years. meters at And But in run still normalized space given But kind the versus north incremental penetration be of

to a again, to at I upper the quarter-by-quarter. opportunity think XX, hover maybe XX, follow there's see there. we'll that have kind real ends good to get to get of But even that

Operator

Markets. Our question RBC with Capital Arun the Viswanathan line from comes of next

Arun Viswanathan

on just Congrats long-term 'XX. CapEx guess, about progress and ask wanted the in to growth. I I

to to just long-term you some come guided of see in and recent do 'XX? your do what facilities? you've you 'XX given maybe maintenance $X.X here announcements. CapEx new maybe all these And you CapEx Do to So expect billion? see down as that the increases some Where with

Scott Morrison

beverage I good think spend per side. this million Capex, per Maintenance million, facility, is million, Yes. billion a it of think We'll number probably a you on $X couple over about the if $X.X a $X facility, year. year

really opportunities returns. have lot a We and of nice EVA-generating

I think be to for next at here crystal elevated levels elevated to of could at least well. level it's is ball in that my not 'XX but years. we're the at an as I moderate be great. But going starting then would we some, And see couple think I

John Hayes

about beauty business. our Here's the

you opportunity. XX went market. depending levers many happens can we an in business out accelerate years we've over COVID that's and to so and into at looked what we is we the decelerate And an -- accelerate or what as to to back look what we to last and the and 'XX, opportunity of opportunity we have accelerate within exactly We as pull If pull, plenty see levers on 'XX, situation, an We've this did. pull. got our see we 'XX, the saw that,

of about, And $XXX CapEx so when historically, creeping you $XXX our but million, been It's t up, range it's million. think $XXX had maintenance the million. in not

And but so we capital going dial back a have always lot if and of anticipate market forward, can we growth the it dictates.

Scott Morrison

good them add make what a That's look faster that we at good and can we spent than is get And really sell the that XXXX would $XXX assets in because we I probably also I we nice point. margins. up, million thought. more And faster -- this cans initially at the as really had these can

Arun Viswanathan

And that also markets excited on have wanted growth seen or just U.S., in in category to anything seen some the the seltzers any outside about? emerging of Okay. trends of real you're else ask develop that your we've any elsewhere, then you quickly like U.S.

Daniel Fisher

have it in think well. Where data. see how And successful, thinking to degree is I be will the into question. to wait you it's just to there. see and scanning heavy region, can think but U.K. great how interesting of that we'll clearly that to America you'll that up -- be And parts translates -- it there's with there's in the manifests. seltzer as a will Europe, you're underlying that's I some see see No, to it that's interesting it it South a other starting do then in see market it see that will show -- what plays

John Hayes

Yes.

most any about, the -- world. around life is remarks getting Ball there. around the probably to forget to the our new to not that and shoulder my I And cycle put addition sustainability Dan was the and certainly out just any to Europe let's the is its prepared see you're lowest not In word can of into the Corporation package consumers about talking region penetration region indeed in is the really only because categories NGOs also world, major talked where others. customers officials it out And government but analysis sustainable going and about

Operator

comes next the Mike question Barclays. Leithead Our line of from with

Michael Leithead

right, cans many first, North you sense it one And give years, second, of imported follow-up ended imported cans kind Is a a if give you I importing heard America. to the on first, cans fair over want couple benefit I replace could of, maybe you I that, in start manufactured up answers you with I to us around should guess cans. just how there? uplift the of this say mix sort to of next some just year? as domestically that you on of margin guess,

Daniel Fisher

you question first. comment I'll Yes. answer the second it And referenced Scott's earlier, yes, will.

customers keep work million And that decades we're so range we fourth $XXX $XXX about give to in I say And we are were to -- of of here. mind, a can working million with want things happening. imported. the couple in with I'd you kind quarter, can for specifically Ball was what

freight to working and exorbitant going an cetera. We're third-party things they're So with of rate our pay that JVs, nature. et

those as possible shelf the comfortable to as for trying get this we're build can. momentum to to continue cans So make on to with the the them

as fall said, should the next the Scott online you'll get this side. couple of years, that as see leverage growth of comes through really to on we back and over volume normalize, So Xx capacity a kind of typical

Michael Leithead

a if the from helpful. Got That's angle. CapEx And I outlook on it. could ask one different then maybe

and CapEx just new year, referenced doing managing you I these of Can thousands XXXX all procedures of amount X.Xx in processes your change of logistically mentioned bandwidth spent any talk think to call about you this you're you processes to efficiently? is of which or this to of needed $X.X a ability -- record just the a manage year, billion, hires. it, maybe you your improve doing all that? you you're Have the different

Daniel Fisher

for CPG or lean stop. kind times, of say, to us as this full the leaning of companies the America KPI we've defining referenced And see started to cans, X that X for in big absolutely, kind a North the at new we've relative Yes, we -- years, seeing. when we're product it we would started I tailwinds kind of been sustainability into those introductions several we've when heavier -- in really to

-- establishing candidly, attrition. it didn't gone that to supply longer terms in didn't opening of in in toes -- So that of for where folks. in looked of agreements at advance. capacity enough had referenced chain. supply historically plant with also hire train our of We start-ups, stubbed remarks. didn't to plan lot We I far the We've my some the We've is elements make new a there and sure we've do we

we of engineers. hiring made a in We So folks started there. investments We've more acquisition lot started capabilities. and training hiring lot a more talent

you're investments, I right. thought think see are start-up big we've that And the our facilities. plants. we've or and how up benefits in hopefully, about improved changed you'll So These starting on operating operated big curves. And

John Hayes

engineers, as to think I I capabilities differently more to years spending you to think were relates -- to Dan's X growing. we company mean up this. as than were when And spend, we point, it have do adding than to X, a beefed we we've capital used growth on much be that able our we to ago

the over And these reap in we've of couple investing that benefits. years so to past been

a doing of we or years we're think year I ago X ago all were job in than now X much so And better this.

Operator

with next comes Ng the from question Our Phil of line Jefferies.

Philip Ng

you maybe kind year, all walk in you With on year last Since this away feel North of more America? North the and about do a America building inventory, can, you bring going good you're capacity year business. to demand from some in perhaps little to this if had you're meeting

Daniel Fisher

for not up bit right -- of reliant And living to we question. on next scenario going Great would not to of couple be the and near We're hand-to-mouth, requirements. might meet our We're so we're years. that. building inventory, now. heavily customer a anywhere I that's dream be a capacity standing

term. to We can product find grow will be demand quarter. network our of that our and in be growth, servicing we remarks, what into fourth shipping prepared at showed into This need, leaned will need it world, continue sure into the the to continue make the the new my we things can in can give lean it to to other and similar is customers around now significant we not the lean they and that that we're a multiyear, can. be their is We'll really help grow customers up right is, we the they this this. sure launches cans will in quarter-to-quarter I in way looking kind when anywhere this again, excess make long to to how And our can want

John Hayes

to customers. in sure to changing, XXXX reasons point, to short. we even pedal not And are we Dan's as Yes. we're that's XXXX sit right customers it's that's in the make don't scrambling we more our anticipated, here we we and much And the to more putting the than one we're why because Phil, now, that's that service even and that spent elevated were why why foot leaving our see that our of

Philip Ng

in. Got backdrop to it. That's a be exciting really

know you're managing I your seeing You the manage then a a And some more from settle gave get favorable a being kind start-up of on obviously, kind to and of color that your board. standpoint. more about little ability stuff set but nature. little a of pass-through we're did terms XXXX? to I up across some $XX out how was in 'XX Where in comfort little think freight and on is and Want costs tougher, color of contract inflation that million. it

those that you of So kind can X unpack components? --

Daniel Fisher

just Yes. The increased but we're not start-up start-ups, that of but base, in Remember, growing, backfilling XXXX, with an our jobs. lot business about a then was you too. half labor the have is

we're So base. the labor adding to

fourth quarter, So million, million. was the up year-over-year that $XX $XX in

keep So better and And think in inflation, think a been this us all we're contracts, relative to acquisition yes, of to I -- what terms handle initializing our growth. to in able up of for at I getting trying conditions. we've being Rexam much of building the in space prepared terms were to terms and the we we're be than kind

think I So board. yes, in world rates. kind the protected relative we're pretty keenly of to we're well aware of happening And the what's across freight

Philip Ng

billion secured ramp of Okay. mentioned the XXXX, The And you How one of much the then of one that growth today. next me. that on color helpful. kind contractually? the any of that few you've just of last And Super $XX shape for through years? reiterated quick and

Daniel Fisher

process of better out. sight billion taken $XX just I line and would We And got planning we've contracted through overwhelmingly, into say XXXX. it a I've here, our Yes. strategic on probably we're finished that XXXX.

capacity be demand it a backstopped when I So right by, online, will right comes is standpoint. now contracted. at that And can XX% XX%, say, that's we're from the

are have capacity. take willing XX, of folks it other but might plenty might inked, I The to that that not there's -- have

Operator

from question Panjabi Baird. of Ghansham the Next comes with line

Ghansham Panjabi

between question back months wanted four Analyst CapEx just $X-plus to which of At go billion the was and to highlighted CapEx I cumulative from you Day, ago, the earlier. XXXX. XXXX

put number? this I'm it so reflective should that CapEx incremental that? right just towards -- point, at? timing to XXXX still be just be we relative expect of XXXX, through the related And $XXX -- the Is also the look at billion the Capex? to acceleration of to Or it million EBIT Or total would number in curious, we And well in then 'XX you X-plus XXXX. given above should through higher, uptick is

Scott Morrison

No.

to On the to our volume point, of it with solidifying is be lot our a going that think there. Capex, that belief the customers Dan's contractual just, relationships I it's those solidify is

capacity And so meet needs. to it's those putting in

it's other before. dramatically pulling forward we than probably where So I wouldn't say from are different were things

Ghansham Panjabi

And for $XXX million of EBIT?

Scott Morrison

-- to a a when going ramp-up yes, good curve. start-up have get Because a you're remember, So not should still that be plant, number. you you

execute and time some And to take kind get a going curve it's on so for run ramp-up that to of rate. to full

the new ground plant. And so the something with today, you put when especially in

year, of that a to time out of of you where little top kind the the It's hasn't to workforce that lot last obviously, more Rome an move new investments. you get get a much line, adding -- added you're up there real quicker. a something we you're take Worth those doing like new, you got faster, incremental made curve ramp-up returns cans before. When bit where and those lines If Fort out going

start get XXXX, So in things that and XXXX better in 'XX. will

out compounding of effect there's kind to 'XX beyond so move And capital. this all for you a as forward

John Hayes

is Ghansham, this John.

is, your we the changed what since than we greater Let question other conviction Day? has a And about have Investor way. changed question me talked answer has than the Nothing X ago. what months different

of I is by an these far seen years And seeing looks out too take Ball like, that. the you're wish XXXX, I in my to trends capital But XX-plus It's at advantage far. of I Dan's what could is point acceleration strongest so to are Corporation can't. it there. And I've tell what you

Ghansham Panjabi

And just ask different that. then to clarifying for a I want mean... I Thanks question.

John Hayes

think I you. we lost

Daniel Fisher

Operator, maybe go to should we the question. next

Ghansham Panjabi

hear Can me you now?

John Hayes

can we you now. Yes, hear

Ghansham Panjabi

Hello? I guess I the was about asking --

Daniel Fisher

Go ahead.

Ghansham Panjabi

Okay.

also to chemical allocated industry about their being the recycling replicate plastics. similar towards CapEx asking circular and public was a There's bioresin CPG very And economy many commercialized. with being alternatives trying to and I chemical aluminum. So in dynamics customers interest recycled several are

of growth? kind you sort as How of that? as about to So you those it relates all think of do reconcile variables the

John Hayes

Yes. a It's great question.

I'd Here's reconcile how it.

economic sit today. Let's not in container container has that that a here as is the aluminum we only stream value the forget recycling

single that? could, that that. they from. they're a of chemical you're But single-use I above stop. an where when to pools we recycling trying of Yes, I get substantial you're plastic, usable to of to and wholesale environment, have recognize to close because fundamentally actually And think but already plastic just now the to stated costs as have material and recycling them when that publicly they're brutal the rates product doing too. tall here right about any in means furthermore, chemical we recycled would, what going don't think it's even plastic, plastic recycling cans, into that. customers, have in and that on aluminum that. add I industry coming still amount industry profit you the XX%, problem our above put Will onto otherwise achieving. XX%, a world going understand landfills we that not and goals candidly change -- it's been to try there's about it completely basis in get have a polluting the as and the not having even we within it's plastic you reality involved think change full protect I You Many And digits. cost is of on not in the we've adding beverage sit

Operator

Pettinari line question from next Citi. Our of with the Anthony comes

Anthony Pettinari

customers any at or the concern most wondering, strong have for and XX thought to thoughts I'm consumption months, last you COVID part, the indicated some negatively seen of as issue? becomes off year? dynamic impacted very by the haven't, do you have that extent, I John, think global at-home that at-home COVID give boosted that just an hopefully, downs growth. has kind roll on the demand look walk you just might any of Or can been last kind your of over versus that as you less you on-premise

John Hayes

large, because to Great were we didn't than day. time we've society because spending every at home. data. my on-the-go today, more sit that, think longer, to here aware much the on point were, can't much creating I be will is it specific and But I question, been at we and cans are we much and consumer And as of we qualitative throw the garbage as research we more done no more comments of some We're in an have that. that about our waste worry we have

data one that's that's important So point to point out.

the be beer, and at The are But when sanitization go on-premise, there, because is thereof. the the benefited question the example, with going much people other is sitting back, going on-premise. concerns you of suggest the expense off-premise kind how to that for to have one there have glasses on-premise our the of conversations when off-premise is, has the in about we draft

beverages, much single-use hearing so And been a lot go to and to on-premise meaning that and is the what looking more we've bottles. is of cans

if been focused you points but we've know, else to X data big anything Dan, have don't so And on. add, I those are

Daniel Fisher

Yes.

-- mean, we're the think I I that's come size a those you're doing with thing, if John that has touched the I here. -- think company terms flex do packaged a home going shifted folks you're thing. and going in technology. be or historically don't at all we're this. very from know our dealing I that jobs the your of We're anywhere drinking permanent to our to work, and studio, with on doing XX%, this And apartment your can before we're we And or much you're very we've XX% of from work-life it shift, balance be but goods. a work real happened, from one of what realized those to

So the and be benefit, time. will here can some quite for will that

we're paying thing other the close I attention here. The incredibly restate it probably but market think it tight. I'll goes that saying, to, without is and

customers of limiting result know in of innovation number are a releases a that, cans. our As their we

the of new yes, They've of been released. market. lot overwhelmingly cans, cans have products that haven't come they lot to other but on products because been a there's in an have that can't So awful been there been find

understand that, And even that's and do folks terms be so to there's going a volume in going go happen. shift to bars, we of if patterns consumption and back to

why awful is said depending going there an innovation or thereabouts what hopefully, we're patterns at is again, Investor potentially out better, at think COVID. our with demand that. still behavior pent-up when what Day, lot we and aggregate, that, even happens I these on end-consumer to, think or look this that we there's of we And coming in offset of

Anthony Pettinari

maybe with possible how that's maybe of maybe any still broad available? water? opportunity? to can pushed cans following that that on with comment just innovation. still There year. fewer a They slated something comments few talk And very about before Just COVID constrained of attention been Okay. a kind of last disrupted it were lot water cans is the helpful. on got Is for of back trials up That's kind that capacity everything. doing on in or Is

Daniel Fisher

do quarter-over-quarter the adopting consistently I those velocity off, making retailers, chains are to doing Sure. base. shelves The they've products well. sure a a pushed on coming manage the to -- low and all mean, growth new you products supply double-digit said, not of existence are the their and other as products accelerated lot that issue, more with robust. just are that off were in The has

innovations look conversations, that and of positive So this having get very coming a we fairly online significant still out brands. some environment lot COVID you'll see well-recognizable forward we're of to those and when we

So...

John Hayes

And now. are to point, Dan's capacity right constrained we

go the why So of still our have really reasons investments capacity about going been some to one into cans, are don't now, into free the those those tight. That's accelerating it's water cans we've that because of to thinking people kind reality push a to looking company of right supply up we if is kind you're things very to the it.

Operator

Our next with question America. George Staphos comes the from of line of Bank

George Staphos

the on for can the Maybe flow look we know 'XX. forward I go looking and to But you're we that question. question extent for through projected cash really comment at costs. wanted start-up I back a angle. to slightly different to next out into -- year the

talked few last about we've the over So start-up costs. quarters,

build flow to operating capacity start to on cash the in And those we guys? ramp being kind this have less effect? of to capacity. we ongoing as You've really a effect is you you than because XXXX? degree not an trying lessen talked able year, the Or should $XX points, the here bake that you should million which return growing? expect given would year, to start-up in What get this given cost accelerated do the comment high-class pickup from so problem do every their to in of you in CapEx about How

Unidentified Company Representative

George. right, exactly the We'll in operating you're cash see think flow. I No, acceleration

Bowling in with large X, start-up have Green, will really X.X facilities. starting We we're 'XX because significant

costs is So will elevated less. because lot Republic costs when will become be launch really Czech in The less start-up America. less. The a of heck labor the a greenfield facilities, North we're the be doing

of trained, through So point, break curve. redundancy less with isn't kind less is lot you expensive. really That South be base labor a your just Dan's Frutal. that getting can start-up And sure is them will make important people these bringing people to previous then found the as America to earlier, because in you having hit and startups, we

North as growth flow get things will in up. still in and with would than will greenfield to I earnings through it facilities elevated with ramp greenfield say going cash facility that So be the these more that track America, you're operating benefit but

John Hayes

referenced Perhaps talked business. and Xx X strategic Dan can side earlier. of business, strategically, our percentage another -- for think ought beverage through on about the that. point increase it we've what way In to to more volume, time, every the the we But of side it. margin a talking flow in over about I'm get

digits. to said be low So we're going Dan double

and ought a discussion, That let's the just a in But world, it, -- ought earnings to have that a we then call perfect world, we it we have call that's just to operating earnings growth in for So XX% growth. say, start-up XX%. perfect costs.

cost to think think start-up by good the strategically about which reduce I So that, a that's this. basis from

George Staphos

innovation. on but you on next Next exhaustion How the other that guessing more answer perpetuate the categories How innovation wave extent are us question there going you have of are Or angle? of any be been on no, One, seeing about going spike any will is see are you couple think you had, there's whole from to exhaustion? the would I of I'm that? would And your bring consumer this spiked to cans, think sign the just to flavored a as you questions category? that? new that comment about we seltzers? can studies, delta

Daniel Fisher

we at in Yes, this and question. a Day. on it's a detail -- touched little Investor great the I

thinking how I to go it's were I alcohol was -- look we innovation. characterizing really So how back at we if about, or

of know And that all space. innovation part So cells of in spike we that's there's sorts happening that. a is

to light XXX%? beer do to, spot spike range. continue kind it's going there and referenced of where at that So -- many grow is a market is gets have No. we of in we think to -- It's kind it think share people

number plus. we're which we've the of incredibly on this talked But was for alcohol are George, unheard Maybe. about cans, of bullish into shifting times. spirits -- a space that on still We're a fact Okay. the decade

going But showing you'll or continue I think cans, that know don't benefit alcohol should call innovation else. it to innovation up and going more start us. space, into so think new see And in see out something to I cans the that's coming I in spike the to you're what we're to

John Hayes

Yes.

of doesn't think matter. point. Just big think that's alcohol that the Dan's surge the to XXXX. spike -- see a and It spike in teas, it's innovation I I think Is not? about can. the or going teas a the to that are, those you're It's space in seltzer in

George Staphos

it But XX% about running given soon. South narrative, our XX% you you're prospects plant at another camp keep to capacity. whole South us to would next plant of call to need the also of out last the that capacity what turn seen And even What for to we My be attractiveness. market us and and Asia, many -- have over region Understood. that one, work, I'll looks its work, Ball's pretty given our announcements take know pretty that's Southeast think capacity, how you view this haven't going America? away I there America for on would you're that you in if though tight. been do you have

John Hayes

just but mean said I you America, think Yes. George, South you Asia? Southeast

Daniel Fisher

Both.

George Staphos

them X I X John. So put together, for there,

Southeast Asia...

John Hayes

and honest, to a for it's apple pear Well, Ball an of bit be a Corporation.

big you all in very that big we're As know, We're Asia. Southeast America. not in South

to to all and people, just the redefining not has great of by the that and resources. grow, We onboarding the job really And capital in are ways, things our ability think to reimagining our everything done a between. capital, it's limited and I the processes people, equipment our some it's Dan in the

not. issue. EMEA have as the us we greater Does which Asia. are returns that America Southeast to the what the looking greatest gets Central now. Southeast for And South prioritization bang mean we I is places where we're greatest think a be America, we leverage, in the buck Asia? just have see so Southeast think for than in currently we're the doing Of and course Asia, down it and we partners North not to right shareholders But and doing

Operator

next comes Bank Mark the line question of Wilde of with Our from Montreal.

Mark Wilde

fourth we the Dan, in if you've volume an in that last an the North seeing growth that Europe, opportunity talk drove just quarter? way contracts what some in over America European improve about done I of years? there's the few start acceleration the could XX% growth to to in if we're whether in wondered, And Europe in Northern first,

Daniel Fisher

thanks that question. Yes, for

growth of quarter. XX%; we misprints. for in quarter I a be we fourth saw and the times, and in characterize to XX% saw these north XX%. even these referenced XX%. Spain, of growth think. we can me Russia Let XX% couple kind saw In the In aren't XX%; U.K., fourth the I of Germany, continues the of France Italy,

So really it's everywhere.

question, lot well months. asked will the Northern but in tell in in about faster of reevaluate to South Europe, what Europe And really your Europe. to is over Europe, contracts. EVA think at sort you than it's profit I you And the now. and North North got that's what's XX landscape America South do right we're that need dollar last line, order we gross the which starting a everywhere that dollar I of you America happening lot Europe. America, the you see million million asked and question in The is in tighter, tight, America a different

regions so of don't conditions, had tightening But there. other of world. be it looks the potentially to So at something as is the to engaged know having we're precipice that certainly we're have on I to in a influence, do do other like with able think opportunity with may team helps. in the of it's if our much terms the we similar market of I focused terms -- to to how tight the with, kind it that be with it's And and and parts

Mark Wilde

XX% can of the just beverage second. Brazil nonalcohol. to toward broadly trips on helps North Brazil Latin for that back the more can in opportunity from What's more I to market cans? lot, actually, most move it like toggling That We look the about beer. America nonalcoholic there, a a market market here Dan. My is in in seemed of is America, -- wondered and Brazil my just the

Daniel Fisher

question. Yes. great a It's

structures and their to build on becoming money that, more South said associated that the countries will put of you America all they or a it Brazil, with just that. package make is longevity I about. normalized lot -- with that with folks and the mix, to that and particularly, And more dealing expect has see to the and profit you're concerned shifts the make of that are is think Having tax in pools there in would of continue where significant a do sustainability pressure helping more what shift. something to

neutral the in bullish, overwhelming well. to different coming sustainability to new with need for to is, and cans we as innovation thing said, more out incredibly continues think And structure I is pools, that's tax The a you shift combination disparate continue on to though, cans a cans. of beer, alcohol pack beverage a mix as market that the market profit in of in one trends the coupled lot improve.

not to So the you've too in more from standpoint. recent dissimilar decade, America, what last seen North an innovation

years next shift, good in a doesn't So for the even plus. we're instance, pace if for growth CSD, X really

Mark Wilde

one me. for Last Okay.

with whether about can little what circular that more suppliers be sheet? to wondered a if amendable more to a on kind you supply doing doing structures? recycling Just of I briefly can of can sheet. a you're talk might on regional And you're basis this developing ensure

Daniel Fisher

we to a growth through it I tariffs and mean, several that the global a years And of to and more surety it's with saw question. robust trajectory chain administration this more times of as needed and Yes, previous of supply we great again, difficult rolling where relates points, similar number a tailwind data ago. kind mills. a learned

the contracts mills. around world north of XX have We with different

to on with into the local. circular. most right the have we're think to exactly We we'll to want all enable to to now. because North facilities, the to the see And get thing where the need these of in It mills, to us we close so all we it, close get supply where we're metal, is And the may having access conversations want but it's cans, making get ,to it spot. depending your important performance be attributes America, it And all to start as which and that. recycling that base, some localized we're not the the tremendous all a scrap I be going more step stream of it can. We in in it good point, particular, relates it is of investment it where

John Hayes

one question. take we'll maybe Dmitra, more

Operator

Certainly.

comes from Our of last question with Deutsche line Kyle the White Bank.

Kyle White

on all XQ? a I The necessarily what just did want to why categories we bit follow-up not And this? in Mark's. quickly beverage tremendous, XQ this but is regional you more EMEA can drove growth growth of XQ, into in even level or ascendancy dig

Daniel Fisher

not And It's et Well, impacts bunch countries XQ parts underestimate. on XQ There's a and Europe. of what don't were even cetera. side there. freight certainly COVID open, were still channels and over had of the

in and beer it's would I grew. a nice you number beer, then Russia, was beer in say spots And beer, heavy like when more CSD heavy was think saw Italy, XQ And one. growth. and the pattern, categories. the growth is some But the that's Spain, U.K., talk of you normalized U.K. other I -- behavior market the So about consumption overwhelming but rest

Kyle White

Backlog $X then your last here. billion question And favorite to Sales question is one now. strong. gears, question, are it. aerospace. here I on approaching Got shift just wanted

of kind has stand a enough the in that you whether of to just base and alone its business? Ball fit a within wondering portfolio large business view be So terms it you how think

John Hayes

we It's the types and And we're always we at always -- current those it growing and we is environment, of business, trying answer we differently. It's look in very will great what strongly. me -- do things. let a to

dollars. stock, the couple at shareholders. actually, over company a billion be maximize value Corporation our $X Ball the to always forget will and of management We And of of own well Board to corporation is not looking billion that let's Ball

we've and aerosol as we're better business, are right means we great. different aluminum Dmitra, think our But So now, seen business at And X as businesses, ever on beverage focused than if finished. I've my company. business, maximize a how result, there's means growing, great. a to the we're all we keeping a long-term great. more right I life of see to the now got Ball. can value that If soon-to-be it in think it, They're way that all have together, we that business aerospace cups opportunities and play

be I talking excuse well, to to Stay participation. to want look a months. everyone your care. few in and So for me, Take thank you we forward -- safe

Operator

the thank please conclude your That participation and that does We for you ask your you. for lines. call you disconnect conference Thank today. all

Ball (BALL) 4 Feb 212020 Q4 Earnings call transcript