Earnings call transcript Q4 2022

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Operator

Greetings and welcome to the Ball Corporation Fourth Quarter 2022 Earnings Call. At the start of the presentation, all lines will be in a listen-only mode. [Operator Instructions] As a reminder, today’s call is being recorded Thursday, February 02, 2023.

I would now like to turn the conference over to Dan Fisher, Chief Executive Officer. Please go ahead, sir.

Daniel Fisher

good and Carlos 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

is do If have available it on already release, ball.com. our not you earnings at website our

may the quarterly also Beverage release. to found operating financial about Russian use Notes of X, sale of regarding results in divested Packaging and measures section sales financial Information and of See information Note the the agreement be Business non-GAAP the breakout the be historical segment. earnings. reflected continue in Russia's Information, today's Segment Historical additional a EMEA operations earnings will for for

and as calculations. as also of comparable release other and The activities earnings earnings a consolidation includes a reconciliation business summarizing diluted per well table operating share

Joining Scott will me I'll comments, briefly and metrics we today XXXX XXXX, our with Morrison, up Q&A. discuss on reflect and Scott and Vice for is President the I drivers Executive outlook and CFO. will then key financial on closing and finish and the call

Let support. thanking their me for our and begin by hard work employees stakeholders and

decisive geopolitical have and reflect ever-changing macroeconomic I prompt and commitments The navigated. we team backdrop. we that and on and in are by change the our As XXXX, to fluid of I'm magnitude struck were the and pace a prepared achieve, made by actions

the expected Russian sale, inventory of timing North South high customer aerosol inventory aerospace, the effect earnings net impact softer volume and of reflect fixed of operations cost group. effect Planned our quarter EMEA, business full Our fourth sell the year America. impacting coming absorption as in by in cost and and in management and offset comparable our

fourth shipments X.X% and Russia in X.X% quarter. XXXX increased decreased Global beverage in including can the

XXXX XXXX in increased fourth the EMEA XXXX and America and in in fourth X.X% XX% the segment quarter. increased North can shipments beverage decreased Russia global beverage beverage shipments fourth in in the decreased Russia, quarter. in excluding X.X% Excluding and X.X% X.X% X.X% segment decreased can increased quarter. shipments

can fourth segment X.X% XXXX South in and America decreased decreased in shipments X.X% quarter. beverage the

beverage non-reportable increased XX.X% can in to domestic fourth to and support result shipments as the of Other a year-to-date XX.X% provide customers. European quarter continuing

increase XX.X% aluminum personal bottles and business to offerings aluminum our extruder global in benefit new year-over-year. content Shipments higher bottle increased Our from care fourth and for aerosol refillable, quarter. team the and reusable XX% recycled year-to-date backlog this segment And products. continues in XX% bottle their aerospace

in a much provide customers scalable the customers sizes, customers of delivering and needed cans pack first EMEA, the more facilities to innovation agile newly moving In can we the in projects, global discussed North response beverage certain relative our XXXX to swing manufacturing as took Russian and and businesses, can optimized our a less previously and cost half constructed bit to size XXXX way unfavorable deferred a of ramp category In to enabling South early sale facilities by high our to consolidating result up volumes our our actions across structure, cost portfolio capable size our plant and forward. into our systems of facilities expectations will of right during our of region. American

Webb our deep environmental and earth. technologies space technologies our accomplishments during assembly events XXX team science is Space space the satellites Telescope on our nearly including environment safety war important delivering the view fighter, from and our optics. study of and and to life property and and invisible mirror extreme the numerous James built images homeland, our ensure Ball Weather cups celebrate via shipping cans, protect the weather innovative to orbit aluminum to achieved impact It and allies, that defense to customers, by defense XXXX, also the marbles to previously the of the billion bottles like humans on

Economic the climate the an the CDP'S zero emissions its net A the lead the remaining collaboration XXXX, to initiative risks commitment prioritize and World recognizes to practices electricity minus in our aluminum opportunities. Forum's global in certification climate in aluminum Movers assessment Index, which maintaining and the First achieving circularity and North Sustainability industry, coverage across company's year, renewable carbon Dow climate related commitment, XXXX industry corporate across questionnaire ASI change America citizenship Coalition best Joining to the ongoing of on stewardship receiving footprint, through decarbonize for Jones ninth

recognized contributed across industrial CNBC's and the abilities Receiving a as good company and has being of and leadership, companies ESG sustainable CEI, communities. And global supported reduction. made carbon including for to our receiving in XXX performing rights annual XX a on XX progress a the factors, equality campaign's capital the perfect non-profit disability leader just index cultivating DEI, meaningful across industry the rating XX,XXX equality XXX of mission on ranking index sector its with on a reflecting point ethical employees inclusive and the differing materials XXXX organizations global equity volunteer corporate XXXX top that use XXXX support scale the enables the for countries workplace our team hours on X,XXX human and creating just workplace,

by Drive single delivering for important, know we going. and aluminum technologies. defense execute we're and refill, vision. know use use, planet our be exquisite where creating strategy to are, space Ball what science limited will and for and preserving who circular XX providing solutions continues Together, is one, of environmental We we know and we value packaging our our

and employees the communities our opportunities and provide will we succeed. Second, to resources

growth, four, and be be will choice And dollars, stewards drive achieve of to And future fellow so, flow from flow, earnings cash investment. capital limited and with partner development. and cash we good Third, disciplined in organic by free do value leverage generate suppliers operations will sustainability our allocator our customers to value goals, be unlocking and of doing shareholders. our efficiencies and return innovation capital to technology we enable a and existing EVA grow

and complete America. in ramp in we as disclosed inventory, Republic footprint, cost Consistent with previously Investor XXXX, next through third per to commitment EMEA. Czech on can Kettering our growth, earnings work will American in remain the plants we of Russian quarter earnings And our XX% Pilsen, higher manufacturing last, our deliver diluted including and our North and our our sale South contract optimization South the U.K. XX% The share breach up Day commentary call new goal at headwind. the customer business XXXX of choppy quarter

half We'll executed to year. actions recovery which from and cost the identified to while previously throughout lead XXXX, benefit continuing a PPI back SG&A receive will weighted overall the

During will to what we additional know the on strive today. the Q&A, and I on environment external provide based XXXX clarity and for Scott cadence

long-term impact to field investor for size growth, trip by continue innovation. our volume also We fueled substrate reiterate product driven goals sustainability global shift, category mix

global growth Saudi ramps our range we global high exports wind volumes Our to XXXX, deliver to on and mid of year digits, volume an South positioned with teams estimate Arabia and other an mid the excluding volume flat from businesses into digits, eye volume to non-reportable to with X% the slightly down. high North America up for EMEA America and up digits, Ball Russia, in the single have exiting our single as up business beverage down, future. XXXX single EMEA capacity up high EMEA new In

suppliers, across Our global done appreciate the and today. stakeholders, organization by our businesses our to continued the customers, work extend We be being beverage success. work wishes well businesses will complimented aerosol listening aerospace employees, everyone and our and

And with to turn that, over Scott. I'll it

Scott Morrison

and aerospace Thanks per and share to due higher lower in quarter Dan. sale $X.XX quarter prices inflation versus were XXXX. and were were diluted aluminum by year were earnings comparable pass-through XXXX offset in share due Full per and $X.XX diluted versus sales businesses. year of in comparable Full sales largely $X.XX the XXXX up performance fourth of fourth earnings $X.XX our translation Europe the Russian to currency

North share large effective cost results, and As and Dan sale declined and America lower count reflect by expense, a lower offset mentioned, diluted than a more expense aerosol higher fourth inflation aluminum corporate higher operating share earnings South interest to higher extent comparable and in attributable our of year business, translation. the earnings per comparable Russian tax full to unfavorable earnings EMEA rate, and quarter

cost was of quarter to the would expected segment. is to during that were of America and I and greatly XX% the planned take like timing customer the volumes proactive reflects proactively inventory customer year-over-year of XX% by Central fourth the confluence the down of This fourth quarter the to reduce aluminum versus driven swing results and in America the We unfavorable address and effect in headwind sell-through. was byproduct fixed other fourth and current XXXX North decline unfavorable market quarter quarter declines, ahead fourth fourth to quarter. the X% X% than conditions of larger absorption cost production the high XXXX. up price decision opportunity volume of in our meet in volatility, of XXXX. North quarter, mix entering the And Central operating earnings in the our

season we segments earnings the July, further are of all and And sells-through XXXX recovery busy inventory of the rebound consolidated inflation half across volume summer system. earnings high the production the plant segment enter effective. first accelerate will The selling as to stabilizes anticipated cost as in and contractual late after be will

the up we due third P&L reduce protected even XXXX, our of P&L, prices. purchases. a metal earlier would As rising largely when the expected does call, we impact during not metal time growth as prices, last the we payables quarter to what changes reduced coincided also with to America. this ramped are cash to which declining a on and that purchases year, This XXXX Earlier further. or material did be saw our at strong flow this our in we And year We we amount meet price began we typically not North XXXX, metal explained earnings impact volumes And expected metal while again, in in our materialize payables. it would metal from metal of metal

inventory hedging.

our The is working metal payable prices as stabilize. for in a full accounts and XXXX. of will than XXXX million normalize over in take less was capital metal $XXX The both billed should the planned. result use net originally This in year result

committed here billion, related mind. over position CapEx today, As $X.X $X.X projects. billion $XXX in prior driven sit cash the in solid of a cash outflows range will some year's in We by and metrics XXXX million to in in key ended we XXXX to availability. liquidity be credit with keep

range cash generate deleveraging. flow will on focused initially million of free and in the XXXX $XXX We in

will expense effective year of interest range of earnings rate on be full XX% the the comparable range XXXX in and million. in Our tax year full $XXX be will XXXX

year million earnings headwind, be XXXX increase in be D&A undistributed non-reportable Including corporate recorded expected other comparable the $XX are million in should operating likely over costs $XXX range operating Full million. to million. $XX around $XXX year will full the of XXXX, comparable in earnings Russian

over to drive that as XXXX million returned shareholders. net to to forward, Recall times, comparable $XXX we look EBITDA trend year-end expected X.X XXXX, And towards debt want in it to lower. we we and may is

the Ball repurchases. this Last fellow supply of commentary the manage we'll chain for resuming and will of and quarterly share shareholders. we owners, our alignment Day lens cash, the address outcome with as and economic dividend assured, EVA stewardship, climate declared Rest navigate current our cash the and path to in secure the earnings best manage EVA week, our we first business will we after its and an half customers Investor cash XXXX, through effectively to

behind and XXXX for optimistic and excited We have are us, happy XXXX. I'm to

Dan. And back to with that, turn I'll it you,

Daniel Fisher

Thanks Scott.

We sustainability We equitable will and broaden to organic and continued continue innovation will of policy current what to the growth. decisive is ensure in packaging and supply/demand further be which solutions must fuel do the balance, use agile foster right provide environment. aluminum circular our stimulate for

XXXX Yes, year to about to solutions deliver team customers future. with ability I greatest encouraged for an and in to some an world's In continue world-class of will addition, with year am partner our was aerospace challenges and the Ball's deliver eye on history, the our unprecedented opportunities. our our

I XX%, track. flow cash look is that returning and plan operating of the free Board Scott generating on shareholders. EPS on and our to XXXX business' long-term ability diluted value Last growth our deliver week, with and to to goal XX% We achieving plan our forward to reviewed deleveraging

for you to are today. everyone that, And Carlos, Thank listening with we questions. ready

Operator

Thank you, sir. [Operator Instructions]

question comes George first go the Our of Bank ahead. Please from of America. Staphos line with

George Staphos

morning. as it Good the everyone. Hi, Thanks you. details going. Thank for

all, more of within expecting your cadence, in first terms America. in you, will the particularly of from and North thank progress a bit if of through something first all you your to terms Central give stock and for of the we you're us seats, undermine investors not terms terms and as are What be? want underlying materializing of it it terms would promotional what customers customers? as in innovation I what volumes from So, what Can you the details would you're performance of or in assumptions in view in now? something half, expectations, analysts our your activity And developed and were saw programs your in that seeing right your

Daniel Fisher

Yeah. Thanks George.

volumes in in here the the North are in EMEA in Central heading They're So, gate sit and America. as we of today, out line right line.

we South to where think now right soft think America on up. versus end year a I my commentary going the little is we're in

element and why that have on come the relative a bit that's doesn't I aluminum that, mean our bullish George, think, our volume little position is biggest The for customers. off. misunderstood, necessarily we're more expectations to prices But cost

head able beverage there packaging are of that year, the as with to the they customers the the gone be profit actual off, into. second lap aluminum positions So, into that to quarter step pools increases plus second heading have costs the into our and going half price coming are significant their

off given lot products in you be heck of said, December in changed that North anticipated relative the As balance consumer has would in a backdrop this the of the with I we that to and I initially Will strong. costs. promotion price the of all Europe it year I start. gate, incredibly out good will to more to of right on continue is a cap. In falloff lot terms the we're that what patterns North the for continues America, a particular, a volume. in year, behavior closer But America suggest other gave to the given

that, in I a think of the of of America. hedge will the will there see said in and volatility real positions in positions bit cost of stimulate the major in down South of second terms there's year. wait a little optimism lap some our having the that customers terms But half

pass-through, good PPI, The we're in shape.

All of and we've actions talked are reductions cost shape. the about that footprint the good in

our about. positive to currency that as signs Scott I'm to of inflation for to really some Maybe in the stable I'll environment. XXXX, some here starting direction turn just more of it over things the are from and relative confident and today, But a other move we sit feeling

Scott Morrison

lots Europe, you moderate. rates, getting energy warehousing, That innovation year. I'll input feel people touch of to think is the hedged I why see we what to European We're in freight We then don't started than last moderating. are spot is is We're as bad this today. that PPI price going predicted. largely whether pass-through. squeezed definitely and input all lower why us where the really And cost as we as of it's George, Yeah. seeing costs be optimistic part not touch question.

And feel stable we today, kind in pretty here so, a place. we cost much as about good input the side of sit more being

You kind XXXX, feel ticking kind feel and interest had rates in are Short-term much of expense peak. a our little of we for so up long-term still better. we'll rates but that bit,

you the don't why talk innovation. Dan, about

Daniel Fisher

lot innovation. around thing the comment Certainly, innovation, of your space, a see is in on we and because question Reflecting of alcohol continue to the Yeah. good a innovation. combination the which

is to win. going Something

volume is but pressure equate always compete. the category to the we outlook. say, also to what's it improve going to two win, George, going win, beer things on know to will Those we something As don't increases

the a fuel also customers to but have helping wins. heck a number cans. we're we that on of innovation, another sell beer one, depending or of way we We'll lot one who So, benefit

George Staphos

be We'll the during the over. other things. Super Bowl question, turn other color. Yeah. for I'll more all hoping it and My for Thanks consumption

might certainly your not on look guys. XXXX. like reduced about spending you but CapEx XXXX XXXX, I on us are talked you or also surprise, you look they that as know existing to the coming look plants what delta Thank view but as and what much, is for might we a it's That's out can So, not CapEx. tail like a includes there give up. very

Scott Morrison

are are Europe. this the of of Most in these pretty in talked -- a We'll in that flight. we've we'll George, after spend be ground Sure. year, that already completing things the have capital couple And good X.X enough as spot. we've got about on things

So, X further. see we'll I expect XXXX, would of drop XXXX, although would expect, that in I it's February

Daniel Fisher

capital is levels quite three we strategic over Yeah. into to will it one in We spend need with likely The two have reason the conversation, years. candidly, a next invest, grow If to could at we've XXXX. or XXXX and spent most a George, we be the internal to D&A customer, two.

loaded see you'll to think much I moving start disciplined So, more capital relative to spend a forward. D&A approach level

George Staphos

very Thanks much.

Operator

from Please Christopher question Mizuho. go comes next with the of ahead. line Parkinson Our

Christopher Parkinson

you Thank North much Great. anything talk Can And idiosyncratic given customer how was more destocking? American a in just so believe much. more specifically shutdown just Phoenix. industry you to bit sell-through, the about volumes, you little Ball specific

down three very you. break Just would Thank anything variables, helpful. be to those

Daniel Fisher

Yeah.

activity in. the right most. is a it too was far, QX. back promotional the think quarter, kicked probably than and here of other retail that pushing I different And the it's the seeing we're elasticity half in was no pushed down end to every and return of price, price shelves. I was consumer think, Customers there out more product it Beer what in gate

well weeks six So, of last in what there's of year, recognition to the think there is which I the publicized. four happened

category a impacted you, can different to their all and customers that. in setting by promotional were sell relative and we every behavioral tell to channel, and there's we patterns of everyone But activity. Since I our every

So, growth into I forward. to we'll more will for this think start a underpinning normalize move and moving sustainable

Christopher Parkinson

as difficult with just was which And throughout it market your easy Could market beginning Obviously, XXXX believe you given necessarily and half follow-up comments But for Carnival just then of you the a also didn't a comps preliminary very year just ultimately given dynamics? World just you just quickly of comps so pretty on that basis And quick very will the else materialize Cup low January, some the it. helpful. given Thank industry? kind everything comments first on the Got materialize. just rebound, the discuss how commentary. trends. the during American then of share easing and think Latin balance the your the do quick the any on you of very the on market much. and perhaps

Daniel Fisher

half our at second year, will cost you cans Yeah. that will profit customers cans that of to in positions. substrate cost hedge ample our the reason point and greatest relative be will the much customers have our aluminum lowest that point. has And real pool, that as push with to aluminum do packaging I give the the the with the to to fact for

World another we that Cup knew a did that to the and We relative of we we've an Carnival, things. in point, uptick And you've the were the see the quarter. reacting we right, the couple your to quarter You're got uptick, that fourth -- got got to early didn't but throughout you quarter. We see anticipated.

you a last COVID like have did don't year. You environment

the but in better So, the less -- it's America, half still only in, we're year. month in on one bullish I favorable South It back would we getting optimism. and anticipated there's things of than and started off

Scott Morrison

In breach quarter I customer will year, would first had. South America. just that we we the the last lap on add

volume that will that have forward. look So, as we we won't

Christopher Parkinson

much. so you Thank

Daniel Fisher

Thank you.

Scott Morrison

Thank you.

Operator

ahead. Please of Arun with Viswanathan question Markets. Capital line the Next RBC from go

Arun Viswanathan

morning. Great. questions. Thanks for Good taking my

Daniel Fisher

Sure. Good morning.

Arun Viswanathan

potentially seen to the And customers inflation. impact the Obviously, the and now destocking promote that a that's consumer you product. we've [indiscernible] some bit the mentioned on deflation in maybe a position of of the little and from the yours turning with

for kind that had So, expect do on could taking bit into Thanks. And of and year, NA, that -- growth of what's volume outlook year your you're you describe seeing North what America are well. some seeing you a account little more as you the this if front? you closures -- last

Daniel Fisher

Yeah.

our today, and year. lift XX% planning in what America into willing until I'm flat. flat our a for by landing we off I'm As behaviors come XX% here seeing, we're will convinced continue the -- the we're to lean earnings we're the now. encouraged EPS certainly right we're of year that up We're of in where sit to growth, That's to is that the more North customers not promotion planning throughout

Arun Viswanathan

I can differently. the a ask Maybe Okay. little question

and about little QX right? think that QX imagine, what fall you should you million some are and thinking maybe like that so improvement that of short in to bit the maybe QX we could and EBITDA, you still, QX maybe QX XXXX up billion If range look $XXX a that mean, of XXXX, to would would seasonality of guys there's But $X better. QX a get that EBITDA. about? back be or I in be that seasonally of Is like then kind delivered XXXX. the pull level? can Or levers of XXXX more is I

Scott Morrison

Right.

in quarter, I in -- ago quarter good. a things remember, were the pretty first think first year the

We're not kind strong. of... looks that It up. were going have to volumes Our

Daniel Fisher

we then had Russia. And

Scott Morrison

And volumes America, good. the we had were Russia. in I mean North -- but

to have So, tough we're -- pretty going we comps first the won't quarter. in have

we quarters in as in forward. quarters, in North I year-over-year the improvement look then of we remaining nice think forward the we each as look see should America

Arun Viswanathan

they just Okay. Europe, sounded Great. stiff. bit you Last it the that? constructive somewhat you square that Could just saw. little with to trying a I'm had price inflation some energy pretty that more inflation was just lastly, you're describe away some that year, And then just Europe, on of on. like

potentially some you So, relief pushing Europe? Thanks. volume some in giving is upside that what's and also

Daniel Fisher

think the did helped than story it levels with The a in really resiliency really Well, and the it's of more the I package had year less volume spending being Europe, it Europe impacted can And discretionary we impacted that us. end is discretionary and despite in package consumer aluminum aluminum of strong well. wasn't spend. the

is point valid. Your

a our So, to be back that lot way that XXXX, we'll in able the headwinds through of inflationary the contracts in pass we XXXX. will experienced We'll work. pass

will moderates, volume to if -- we're of at it the if able that high on up money continues underpinnings -- take advantage that Europe it digit if online got for that major growth. a has, should of about rate. So, lot the that to stability which catching coming We've capacity inflation make excited of facilities grow We're then we a dissipates the a in of more given And bit, inflationary even single arrears be online fact pass-through. inflation and we're two you've really the XXXX. the got in

Scott Morrison

just we $X EBITDA if your on billion disappointed exceed would I'd comment didn't XXXX. -- to I EBITDA, expect of And be in

Arun Viswanathan

Okay. Thanks.

Operator

the from ahead. of Please Panjabi question with line Ghansham Next go Baird.

Ghansham Panjabi

Yes. Good morning, everybody.

Daniel Fisher

Morning.

Scott Morrison

Morning.

Ghansham Panjabi

to comment to still reopening XXXX. into the along So, think chain, the your in you based Europe beverage Dan, you just pressure Europe that the end. quite Beverage year? impacted kind of been of were see across continuing your And comparison dynamic by do was it recent momentum North at about resilience, How how volumes supply higher And relates in the in on from on price volumes including America? building prior off the also just as vocal you've XXXX that just relative sort boosted do your much XXXX comments,

Daniel Fisher

to sort back season. what promotional sure the XXXX, an we'll that in We where I see out activity that promotional still tell of we little a where saw. a that speaking had would say last entirely in out I parse it could I bit. what first lack activity didn't range really that any and up impact saw because your it is XXXX. I during on we And out of you be delta. able the lost peak that is of of XXXX it's loud, of question, fact the grew And the I that peak go will season probably year. not that to I'm Yeah. delta, we probably would we actually growth in just to put would against point

X% cans a which cost the X% year those where business. at money your is billion kind as to fixed maybe know, So, you of the of that that period, last during in you -- end make

So, yeah.

what see. Let's the are at and curves do to promoting they need companies elasticity now, have we're how the customers how beer Right last from start a in off six -- to changed relative to four our to here good are looking weeks.

Scott Morrison

say Europe, sustainability But that can Europe many in in we I couple know slowing help. would the in are the going not lines years. push is And filling will Europe in think I how down. And Ghansham, next of

And so that's on bullish why I the outlook Europe. for think we're

Daniel Fisher

the growth anything, if would think I the reopening, is kegs. on-premise slowed our overwhelmingly have because

that on-prem, return despite so, And at still rate. we're to growing the high single-digit

the said bullish this So, number we're the out medium underpinnings they But impact I year. I for half excited short-term, first new The long-term. of continue I've and I'm in most to on to that assets have and obviously, and are be bullish we're about up to energy every will the of what's the sustainability business. you. times, industry, us, and a happening this think that figure -- in here every these Europe. the about ramping I've Europe tremendous said

Ghansham Panjabi

flow And Okay. of separately, how a terms then do the capital did for number for through movement? the That's working clear. will XXXX second net can plus year-over-year beverage the in that anticipate recovery various for guidance then And give question, segments? you $XXX cost you price on million XXXX,

Scott Morrison

to to expect capital, million working free that of we flow. XXXX cash For $XXX get

working expect a to a around source capital We million. be little over $XXX

Daniel Fisher

Europe, X And and America, fashion July it's over North nodding. pass-through America, America, And and in the linear coming lapping overwhelmingly and you'll Europe as Scott, a net one he's more XX% quarters. half on a it's probably in the customer recovery, comes the XX% it that net for see cost in, see, particular North of And the second is year. date contract. you'll in big of in North

Ghansham Panjabi

much. Fantastic. Thanks so

Operator

the ahead. Please Citi. Next from line Pettinari Anthony with go question of

Anthony Pettinari

morning. Good

Daniel Fisher

Good morning.

Anthony Pettinari

target. Or it's Scott, different that is recovery you think raise that Ghansham's energy you coming Just some lower that. how in think should we Just in materially. if maybe million in following there you just lag? the in year? wondering than about target reaffirmed that's wondering, the cases inflation something of question, too cause you the $XXX million way? do mentioned I'm on costs those to up inflation and early or maybe last benefits lower expected, Or $XXX a about of sort a would

Daniel Fisher

to more here. off I'll ahead. Scott you Scott, prefer be then go But answer in than and give detailed start answer. We it, I'll let heroes December

Scott Morrison

say. a February what more that was X. I No, think the only of lot is I the I are us. It's to feeling trends optimism we're going appears it helpful mean, to

those more volumes so, all our see. we'll how we constructive up. we're of but basis things we've in seem things out into And way. But the got a see headwinds building and And a plan on to but little That's than definitely, tailwinds We're more be positive a conservative getting more last turning year. that had the to gate show big beneficial, wildcard. will be

Anthony Pettinari

a Okay. That's follow-ups just quick And America. helpful. few then Latin on

ex guess where how -- the rates be footprint cost the will that's point actions of can characterize a finer I last American on completed? they're in Brazil, your just businesses you doing? then don't Brazil savings in kind I If Brazil, one South there. And you'd And once put know maybe just the With if there's one. how operating

Daniel Fisher

the resilient they're in inflation -- that levels They're quite you're with Yeah. even Argentina. Brazil, seeing ex

volume country year-over-year. Our in double-digits the up was

Paraguay incredibly well. is Chile very well. resilient. performing it's So,

that's continue to turbulence job the all wonderful is well those see managing other that of we there, and the and that of areas in, the despite you Some all perform the doing -- export a all of of inflationary holding geopolitical challenges. pressures into team in

Obviously, cost cheap In expenditures. the Brazil, relative labor savings the about less it's to incredibly is there.

a them basis. on you keep not to facility, ability the day-to-day to facilities a plans America. that yeah, generally your we're chain the in aspects, you benefits in greater reduces do But gives shutter do more see So, manage quality and them of and levels, customers, a savings ability gives a you're all them that, run spoilage, to effectively. stay that supply/demand their going in touch out asking and or in manage would near North efficiency you operating their in Europe to with things manage supply the environment other to that full a tighter our full It

and savings where profile impacted you South benefits being the the So America. the and that's in earnings see

Anthony Pettinari

over. that’s helpful. I it will Okay. turn

Daniel Fisher

you. Thank

Operator

Next question Please from Goldman the line of Adam Sachs. ahead. Samuelson with go

Adam Samuelson

Hi. Thank you. morning, Good everyone.

Daniel Fisher

morning. Good

Adam Samuelson

Good morning.

thinking I January Dan, is seeing back a -- activity. had pickup demand the about some on come maybe has So, into the North our better side, And first guess, America. comments in promotional start, question maybe

more is focused across bit category CSD optimism. is discussions in it right that that Your And in innovation to perspective there all with to seem now different exclusive and where is, customers kind to beverage introduction a product beer. get change love as giving beer be more across customer seeing just you're seeing on categories, intensity you corollary new any of elsewhere. is And categories? in promotional versus your comments are a Or behavior I'd and or to that a you on, step-up

Daniel Fisher

Yeah.

in think question. is had a because more good drop-off beer Beer I it's the on volume. aggressive being most precipitive the activities promotional really

magnitude the it activity. and the volume of declines in the So, terms correlates promotional of

the a are -- six really to my seeing So, down was a it category pronounced, single you're relative comments in bias right single every the category gate. certainly last out because year. But the it's and more that's uplift of nice really yes, weeks reason beer in of across every in probably

out. the Some we're attributed clearly of Bowl it is Super weeks as to two

but promotion volume see the lift some and historical than a more some that there, from it's fall always of because off. Now, you standpoint pronounced

this question, but here exception bit thematic category. I And been get But most in this beverage cans with the the and but a shelves and as is planned I and heavily There's to effect companies, more. for innovation can things around large cocktails the expect types are future. innovation, little innovation into is see the a other there for has -- innovation those where of out consistent I were earlier that door. alcohol where the what relative accordion the CPGs But see trying time to into innovation, of they're largely dive comment SKUs just into leaning and become the less for COVID every maybe on on in the to mixers XXXX. obviously and being stemming. And are really And of you'll that And that know most is fall what to There those that cocktails. here to continue foreseeable are all retail that's we going can. worked made

Adam Samuelson

view then, tracking? the on missed where sure gave can and different not level you Got for the aerospace the segment think I'm if performance you year have might I detail it. a appreciate for I business. that's And different

Daniel Fisher

Yeah.

growth. now, So, right XX% shaken we'll we're for XX%. be Actually, earnings -- of will out, XXXX, it's as north we exceed

years see see to the to -- the repeat So, step and starting we've that we will backlog we're won through into builds. beginning

is And choppiness chain think platform really, we've some I stabilized. XXXX defense navigated well. in in that really has of terms supply Our executing

a So, improved as aerospace performance we our should from operating see sit here much business. earnings today, we

Adam Samuelson

That’s all Thank have. you. color. helpful That’s Great. I

Operator

question go Phil of Please the ahead. with line Next from Ng Jefferies.

Phil Ng

Hey, guys.

Daniel Fisher

Phil. Hi,

Phil Ng

morning. you XX% likely tougher targeting Good the growth have you And it first previously up down, think XQ. flattish be Hi, you XXXX. a Is backdrop I enough in were X% will volume earnings for quarter levers little and like Appreciating to do mentioning? you're more guys. growth predicated on in year-over-year will guided where be of a is XX% that the to? Or earnings earnings

Scott Morrison

second quarter, year. things momentum I in, the of of But as depends mentioned, to it think comes in get half as in it to bigger you've here definitely. start Dan the pickup first really some And the we we'll but of in kind on second see chunk quarter got roll PPI volumes. the -- the

this North given of we're be both inventory, challenges. First in softer through in definitely South working year-over-year quarter of some will and America America. still some And the

that expect get rest that's look the in into So quarter improvement But would through most as we impact. you'll we the I see year-over-year the then earnings we'll year. and second where of nice see of America, as North

Daniel Fisher

both sequential And the savings. fixed was QX, year, the QX cost should throughout quite standpoint volume America. from North in challenged PPI, right, a improvement, with the XQ, You see keep in XQ mind,

indicated. been modicum our anchor the facilities conservative volume going of in we most the the plans get so, peak a two are They're need facilities. resilient opening are to in most that And achieve is more as those I think But would order activity Scott customers has to on promotional Europe, the side. there are plans, our resilient of then and Where because season up be we the we there. Europe the tenants little

Phil Ng

Or more XX% earnings need you to hit thought and XX%. Because at volume to XX% it can was flat? to XX% guys, Day, like your I growth, we X% growth? be But still to Analyst just messaging clear flat, is the to the more get

Daniel Fisher

flat. North it's In America,

Phil Ng

Okay.

Daniel Fisher

mid-single X%, North how Mid- the get is high Europe; flat. X%. in That's Global America. digits to South digits we single it's America, to in

Phil Ng

up that And in America, in in general, been Brazil some especially and you a been It's Latin choppy some digit Brazilian for there's kind renewal contractor the high social XXXX, Brazil. certainly certainly on to deliver mid Okay. XXXX? then, time, of environment XXXX confidence tough unrest. What in single Any has pretty market? really growth just gives

Daniel Fisher

No.

heading into South is XXXX going We and resiliency stabilization. have to no contracts relative XXXX. to The be America the open

package for customer cost down then in our contract the that in in And there of each base. have being actual most lapping particular, QX. advantaged Brazil, position the product aluminum the all, of will with customers the First cost

Phil Ng

the Appreciate Okay. guys. color,

Operator

ahead. Morgan the go question Next Stanley. Please from line of Angel Castillo,

Angel Castillo

one. you regions? different a across regions. just a is similar about growth across thinking how about give seemed Could us and of what kind XQ that quick near-term taking Thanks walk question. my It talked for year And you of the for full like that volume little the kind you're number

Daniel Fisher

had in XXXX. think total QX of down. will in growth I be XQ Again, good we pretty

Yeah. be of In in apples-to-apples QX that. lapping say an I America, the in flat flat. Flat breach, so, And think you'll South you'll so America, North on down we'll be because we'll I'd would actually be be customer total. be growth slightly basis.

should little be single be could you online, out back for And be a It'll you'll coming in right other the a digits digits half have are North because then expect and grow flattish the a that that but the regions growth throughout more there, number the opportunity single facilities breach year. to mid little the high to we exist dynamics America. the that in now market plus, of right linear see we'd aforementioned customer to gate So, -- two That growth, for Europe. will of the in in two minus high and Europe.

Angel Castillo

but then curious, think flat. little year, whereas this, to North I gave bit the the wider seem And you as other full that too helpful. and for much maybe America, a Got it. That's about into reading Europe ranges I'm range, a you guess, just be South of America very

down. or last we've I narrower, I think also to little it throughout maybe flat seems this seen kind correctly, heard the deterioration if quarters. to It of area seems few or the bit to bigger where more a be slightly but of the region be an some

-- I of liquor promotional have about So, guess, you as cocktails of as of of liquor range. much how narrow there visibility? one a of volume, some narrow range of in kind to growth potential guess, comfort you that mentioned comfort But this there? the and yeah, area what Is think just things kind activity. to in give gives it Is I cocktail contracted? progressing? related year you the Is degree want that I Like you

Daniel Fisher

given, range on tighten Yeah. Well, I narrowest I ever appreciate optimism would flattish. environment. mean, That's America that but not in much question. we've more I range the a North to the plan say the conservative we is

return And last and That volume means off. we generally some the the happened on the to And now come to go to see the one price can. and the generally to and curve over I what you're that promotional need seeing been was to elasticity think of activity, first this to is come level for weeks industry customers for recession the into this four We're we're have our to six thing good volume underpin particular. broken. And you what out. is has first important business in that's

not what the We we foothold gives can XX% down know yes. heading our So, on we whether are we've secured. for That's understanding the The a have going an North contracts all year. impact to little, it up XX% big a Could into EPS little, to be where the have or not deliver America, target. market got of a some with us business dynamics. customers. particular, in in It

Scott Morrison

I America Historically, mean, it's -- predictable. doubt. volatile would few North been also I years, more no the been has last say, more it's in

South wider America volumes just lot. a because volatile. more always range Those has are around a had economies can move

growth you so, declines you see times. see could And you at outpace at could could times. see -- much And bigger

a more think for region. with would last digits has South So, in cans, comments, I despite big double grew that volatile but a And Argentina be inflation year. negative XXX% would just been cans always you America to Dan's mean,

tougher to it's little place that. like predict a a in So,

Angel Castillo

I if may just follow-up kind And on little quick helpful. very That's that. of a

upside about on-prem, I as is think think we the revise that still how one of is recession seen some has starts spending of off-prem they're And potential back Or customer helped in areas historically some much that pays customer? and have the [ph] near-term the to maybe for the that already? we of a cans. the

Daniel Fisher

that's Yeah. you Those and I exactly stages are signs that the seen were the haven't you're seen on you're uplift the out. And early when of signals we've promotional know starting. right. But activity first haven't -- coming we that -- particularly.

We haven't is steering versus the But seen to pull. them off-prem. on-prem usually that lever next

right. You're exactly

Angel Castillo

much. so you Thank

Operator

the line Please Mike go from question with Truist. ahead. Next of Roxland

Mike Roxland

questions. Scott. my Dan and taking Thanks Thanks for

Daniel Fisher

Mike. Sure,

Mike Roxland

quick it beer. you And Just firsthand. the obviously, weakness follow-up on mentioned experienced one -- Dan in

market? diversify data Nielsen are you How your there occurred challenged beer also to core saw about the for are given opportunities it at juncture? very in any what's And late to a Is year. exposure beer, You that still with thinking end in you volumes mix? being your this last beer

Daniel Fisher

at always look and We're customers. constantly Yeah. it, looking our our great portfolio question. how we It's opportunity. at an Michael. a And There's

be look I -- customers, may from at builders. other those are be So, into of things we we or other customers aggressively may innovation portfolio standpoint. have to having beer moving brand talking the but and beer we brand historical thing may owners And historical an is, a

products they're and the within they're like fact we they're innovating acquiring pushing So, that some our that that of the customers, of innovations. portfolio products new

to right. and a But to as that always And you're big is beer I volume to business. to ascribed of volume drinks, ascribed volume beer, so beer and be We're within be be there an that's will the other portfolio. mean, profiles, trade-off put there's other them us The matter it going the on underpinning -- within with want on their just they side. cans. want to to winners to a and the it doesn't We label selling alcohol us. brand SKUs

Mike Roxland

just quickly, can Got it. you And and or That temporary then on maybe contemplating. sense. rationalizations makes comment additional closures any portfolio

was taken guess, you in actions to some with quarter, there all last the you've that indicated December Brazil. plant out you an closures. then But to publication think I industry needed with details, about closures I came respect temporary in

in as well. think press release you your highlighted it I broadly

second, Brazil given makes you through this case certainly over are then those volatility temporary or investment the in Brazil [ph] Can few last the and time, worse in So, first as just investing point? walk really question, And years. doesn't us in to why Brazil or at permanent? in sense closures quickly, the

Daniel Fisher

Yeah.

I depending And at and America, would would we've chain. the on permanent dictate I of North look managed laws that. you, in labor temporary, lot times, and tell South always what's supply So, a what's regions, our America

have with reflective America we'll So, of which more plant. lines. conditions are the curtail we shutdowns. We'll temporary That's our South managing

economic in We were risk We larger we the what hurdle the like conditions now, a it are volatile It's and think a that existing more analysis, It's to as temporary whether it's and for that. no in have closure I was profile we conditions Brazil. EVA. places -- do -- given rate mischaracterized different doing right? in with Brazil.

that's So already embedded.

EVA. going we of contract length and underpinnings contract, or the to nature and the it's believe be not economic substantive the So, generate of whether we the that can

don't know, on Brazil. anything I Scott, to add if there's

Scott Morrison

tend we've been the good in mean, be volatile to that operated. a can I a over a It long grown all of has does place invest. to has The really time markets region. period more share Brazil of

a over good why a we its not long make you but is place and have to you some forward. the to place volatility. pretty there, can so invest But really challenges, part without that to It expect with great live going be And it run, it's money of too. been that's good

Mike Roxland

Got Thanks it. XXXX. the in and good for luck color

Daniel Fisher

you, Thank Mike.

Operator

go of the question ahead. line from with Next Josephson KeyBanc. Adam Please

Adam Josephson

good Hope Dan you and Thanks. all Scott, well. morning.

Daniel Fisher

morning. Good Thanks.

Adam Josephson

morning, Good North to on Dan, Dan. one America. back

your you long-term a is touch. to were year, target X% So, down X%. Last

flattish X% in compared you're You're that a you're long-term in you're January, beer seeing be that flattish like shipments, to two of row so It to would companies shipments about of sounds expecting years X%. seeing encouraged target what the promote yet more.

your are low understand just promotional activity just growth not expecting target? something to and more guess, I'm if I'm particularly you seeing, the I you're the given there's given trying America, why in base, long-term missing. North

Daniel Fisher

earlier all to inflationary, couple in worth the us of seen present. promotion. Adam. of a get a of it's And weeks' candidly, to No, return I That's some for still economy the not we've to just relative of year, enough modicum overly we'll excited things soft think that growth. are And the but

can the think do will I well.

going be sit in that helpful to see XXXX. as think we hey, X%, That with and you'll I say, back don't back but to X% here track we're happen these you I'd months right with to the today, have come six I the to that's points say data second enough in on to promotions continue. will trajectory year. love the in half of

Scott Morrison

of I and are kind XXXX expect away. XXXX before of still continue. things, historical think. COVID we're will I that Those time, we all would the in of those I over end will those of those going And of But to be saw period, sustainability And with think adjustment rates post-COVID the kind kind going aren't that. tailwinds --

longer we gives growth of starting optimism, we're us see inflation. period we're And those make through where and things more think, sense, think. getting now so term settle in rapid a I through kind COVID that but why and And that's still down we're rates to

Adam Josephson

know said two which Just is one follow-up to I you plants. that,

I your think capacity last North middle that was about X% American of of year.

sense -- the broader the were give underperform this market and last you than by this what more year? flat market? any grew Can year me think you performing North to in think just were you did underperform terms market do down the you expect year. versus market to of you volumes be you're So, you Do the expecting how of American X.X%, you're you

Daniel Fisher

Yeah.

a year. tick most -- our distressed that market a of great have because the and underperformance last we probably think I size the it's relative question, the category portfolio, of to was beer

that news a back reverts positive knock-on had promotional The a So good beneficiaries if shift to of effect. more certainly that forward. activity, moving area should we is the then that be

Scott Morrison

be to the new have in turned who's And this remember, bringing because In market on dependent Europe, online. market is we'll year, coming the on probably facilities -- outperform the up we market, impact capacity. capacity, going who's

that share. more Dan's customers those share, versus We don't using being of that the year-over-year. kind on to things the the focus focus are that on market are market that are So, really can point, can. the focus We customers, customers with happen on, we right innovative, growing, quarter-to-quarter,

Adam Josephson

Right. that. No, I get

end would be if you So, up up flattish, think to using just unreasonable be would market that X-ish it [indiscernible]? that the

Daniel Fisher

Yeah.

right. that's think I

I think that's right, Adam.

the I think it Yeah. thinking about you're right way.

Adam Josephson

asked And source. Is Is working Thanks. that's just million across last help you capital. think probably about Can it compared place it expecting improvements -- you that just you're year? particular, the expecting? I with with on from coming you're Scott, any from, you what the in that dealt [ph] to just particular $XXX board that me Ghansham can where -- Okay.

Scott Morrison

too that's have we still and inventory, work need We Adam. inventory, Mostly to what off. much

of a if will, got sitting So, you we've lot cash, inventory. in our

off that as able be cash it. we chunk. to generate from the roll so, And lot That's of we'll biggest a

Adam Josephson

that any you so ends D&A. lower are we CapEx. working and Got swing it. Thanks. just factors normalizes flow as free up beyond other And equivalent there those to about XXXX, Are the if point -- that would think capital the that beyond CapEx cash out

Daniel Fisher

And Yeah. it. got we've

Adam Josephson

Okay.

Daniel Fisher

good good sight, now. really We -- single goods. We're Adam, working of that right into day and We've raw have line line sight. every material it's of finished got both really

year. this cash of source that about confident we're So,

Adam Josephson

Dan. Thanks

Daniel Fisher

Carlos, one we'll more. take

Operator

Deutsche from Please Kyle the Last ahead. All Bank. White line sir. go with right, question of

Kyle White

I Thanks operating kind few for me million you to out. squeeze the just here. wanted morning. called earnings the earnings of in good comparable that believe I to improvement in and bridge better hundred understand XXXX Hey,

have inflation $XXX million the net You of recovery.

the have But $XXX the I headwinds improvement savings, $XXX missing are about of million Russia $XX offset to be bridge? the million some before of in might cost by, major still that's what have the that million any call You from business. partially I it, volume in we million growth. $XXX here guess

Daniel Fisher

rate the And interest rise expense? in interest --

Kyle White

about, then All it the on right. recovery it's like mostly... you seems inflation Got talked it. million $XXX that And guys

Scott Morrison

your though, while to -- back negatives Going are -- moderating, our cost be there past going plan our passing base are a that them inflation to built things just costs were XXXX along, comments XXXX. so perspective. We're but than are -- cost is in from higher the that into are have they energy in that

way. about And so all -- positives, just other the talk go always that why the to can't there's you that's got some I

the how my I to And so, number. get balance is those of

Kyle White

seeing, it. net maybe to the at inflation to I you're net was for look guess, was I not assuming And Right. right the trying that incremental way but that's the inflation maybe that

Scott Morrison

the we of expect. what really It's net

Kyle White

Okay.

Scott Morrison

that's that inflation, But right? again just

Kyle White

Sticking sense. Makes Yeah. on that point.

of inflation doesn't like So, seems million contractual portion but America, in recovery July. $XXX until just given the time is large that it a the happen recovery, it North

Scott Morrison

Correct.

Kyle White

a it's have early sense… know days. I But you

Scott Morrison

XX% America, North other Yeah. in is in the it Europe. of XX% Yeah. is

Kyle White

days, flow appreciate helpful. I into America? in That's sense you very Do could Okay. -- you continue much how have of early that a of North it's know do actually XXXX but that. I benefit to

Scott Morrison

other It it way, doesn't the back stays. stays. go It

Kyle White

Right. I just am asking…

Scott Morrison

increase sizable down. a and The you get PPI perfect scenario actually costs pretty your for us go is

Daniel Fisher

happen would it what you're way. the your thinking question, to about Effectively, right

to et pass-through following that expansion us. margin come we cetera, of was hold you But existing up year of the in or inflation up after year. prices, put be things if et parts into a the then you that dissipates, come would for the just If in the for arrears. two that cost, carried past opposite moderates It on So, inflation years XXXX. energy through cetera,

You're right.

Kyle White

it. Got

year good. much last cost Well, versus everything the year. this standpoint Sounds challenging price looks going from a better into

with So, the balance the good of luck year.

Daniel Fisher

very much. you Thank

Scott Morrison

and I was to XXXX XXXX. be done glad excited about with

Daniel Fisher

you said, at Carlos, the look and the Well we'll talking that, of quarter. first the with to call to end close forward

place And teams We are got and the excited XXXX. for to in plans we've execute. the

iterating up be following So, we those the get time as Thanks. on and forward we'll together. we next plans look to

Operator

to and disconnect your for That We you please lines. your ask thank call. today's concludes you participation

Ball (BALL) 2 Feb 232022 Q4 Earnings call transcript