Ball (BALL) 4 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Dan Fisher	Chairman and CEO
Scott Morrison	Executive Vice President and CFO
Ghansham Panjabi	Baird
George Staphos	Bank of America
Angel Castillo	Morgan Stanley
Cleve Rueckert	UBS
Bryan Burgmeier	Citi
Arun Viswanathan	RBC
Mike Roxland	Truist
Phil Ng	Jefferies
Mike Leithead	Barclays
Kyle White	Deutsche Bank
Gabe Hajde	Wells Fargo
Adam Samuelson	Goldman Sachs

Call transcript

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Operator

Greetings. And welcome to the Ball Corporation 1Q 2023 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions]

conference recorded, this XXXX. May reminder, a is Thursday, being X, As is turn and Fisher, to my CEO. call It pleasure Dan the now over to Chairman Please go ahead.

Dan Fisher

conference everyone. Thank results. XXXX is good Tina, the morning, you, Ball first and Corporation’s call quarter regarding company’s This

may during expressed outcomes or materially The implied. results information forward-looking Actual that call this provided from contain those will statements. or differ be may

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

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

operations regarding in continue in reflected Beverage non-GAAP the Information release. to financial Packaging found of the EMEA section also Russia today’s earnings be for of will use Notes results Historical be measures the financial segment. may divested the

Note the about Russia’s earnings. additional Business sale breakout Segment sales agreement and See Information, of for quarterly operating comparable historical a information X and

summary a addition, of earnings calculations. In includes as and of per operating reconciliation well diluted share the earnings items, non-comparable comparable release also a as

will financial Morrison, and XXXX the brief the and remarks, Scott I key today will is will Vice of up finish introductory comments, Executive closing our me on outlook discuss and Joining provide President we call some then with remainder our Scott CFO. metrics for Q&A.

amid fulfilling Let executed me results begin comparisons, by customer’s year-over-year needs. our safely while XXXX. we by for Collectively, strong in efficiently, employees business thanking quarter tough our driven and delivered first working divestments largely

either In the exceeded quarter, achieved their or plan. business every first operating

expectations, every higher technologies efficiencies actions, to benefits and shipments and Notable of operational aerosol were cost-out aerospace taxes. interest be and performance inflation line continue demand. in our beverage in and offset aluminum regional recovery, with expense business Our in improved high our

consumer first year-to-date in pressure with Ball’s With beverage in were volumes X.X% quarter, to expectations. demand, global the down can conditions line continuing near-term macroeconomic our

key and America our EMEA, activity breadth facilities North mix of our two XXXX drivers ramp-up our retail new customer summer shipment in the ultimate the of be continuing promotional of ahead, in the across successful Looking will growth.

conservative with we a half XXXX maintained second global started weighted beverage We trends, on view. view that and shipment conservative annual

a have we forward us our customer’s look serving to ahead year and the of needs. lot We of

of raw As here managing activity, North bring quantifiable today, promotional sit cash we South in growth and our of to coil advance the supply-demand chain just-in-time and just-in-case we are as for finished America management planned supply supply during seeing goods versus operations higher proactively balance, cans. we our requirement than beverage to period extended and and down for and in continue the inventories return chain beverage pandemic

to the organization win mix, stakeholders. globe, customer to the cans we and scale, continue other capable best ensure outcomes leverage all near-term, medium-term innovation teams beverage the relative to and long-term across to regional continue our networks, and plant for substrates Around our

and products capabilities our aerospace aerosol monitoring our environmental our needs. data unimpeachable national and and are are operational businesses, technologies performance for well to aluminum and both In aerospace, and deliver for In positioned technologies security accelerating. demand innovative

we to business, new offer bottle categories set refill reuse, aerosol a continue aluminum global to innovations and our customers in And of serve occasions. broader and

additional of and As unlock XXXX will to businesses Ball ahead, stakeholders value we for in our look continue beyond. all

value inclusive XXXX, to headwind we XX% diluted in positioned commentary fellow well our sale per and and business the return to prior long-term earnings deliver strong generate cash our flow with of goal XX% to positioned Consistent our remain shareholders. to growth, of we remain deleverage Russian free to share

higher beverage we inventory to on an our South production As eye cash. the work quarter regional and second call, in manage metal continue as through in will and prior with indicated choppy North remain we America

aerosol aluminum positive EMEA, our in businesses continue. In momentum and aerospace addition, the will

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

global teams an our eye and business position on the have to the year deliver continue to beverage Our future.

we For growth the our with now America low up for full estimate high-single year up and EMEA non-reportable Russia, customer volume our South digits being plus Ball, volume business mid- excluding mid-single volume single-digit mid-single incorporating year-to-date global and North America trends, slightly other mix down, to digits, volumes and digits. up beverage

today. across the our well done to and wishes everyone and customers, stakeholders work organization employees, appreciate suppliers, being our extend We the listening

will I that, turn to Scott. With it over

Scott Morrison

I’d and Dan fronts skill congratulate Chairman. new heights. was he the many drive Dan Chairman take Board to in the on of like on XXXX his and and election the to company battle-tested his John Dan. as has Thanks, thank service to for set to

per were were share comparable quarter notable quarter headwind, the year. earnings share XXXX the and versus packaging comparable versus prior business diluted aluminum of flat $X.XX first sale quarter Russian diluted per in $X.XX First XXXX earnings the first excluding

due sales same partially of period the of business the third in currency of to by quarter of the compared prices, the our volumes pass-through sale the aluminum costs. XXXX, translation, inflationary primarily lower lower First offset decreased Russian in XXXX, quarter and to pass-through

In offset volumes savings, compared the initiatives, in South SG&A as to depreciation America, to cost third XXXX, of by costs. Russian XXXX, inflationary first of contractual expense, North and due our quarter, lower fixed quarter increased cost-out sale the net period in the well in as pass-through primarily partially business and expense lower interest the the comparable same of earnings decreased and

supply-demand July, of continue choppier and the segment the prior manage and recovery some in America a call and performance of when the of After begins have segment of segment majority regional comments to summer to Dan’s near-term. larger help earnings, our about in contractual North reaccelerate system will flows frame and proactively volume reiterate portion South inflation America plants through earlier earning’s across earnings selling balance commentary second been quarter our results. will To we

quarter. in the purchase North America’s settlement second Also not results first the power virtual will remember, agreement in recorded quarter replicate

be reported today. quarter results segment first estimate North $XXX America’s we relatively will million that line However, quarter segment with results second in

South commentary, more a mix product hedges customer the kicks unfavorably robust influencing with in off quarter, the selling second is quarter half seasonally and customer anticipate second influence -- season we in. roll slower In Brazil, our fourth and as and consistent America, summer prior

targeted in prior As range in ended here billion XXXX in and cash will the metrics. to of credit the first by some and very position of we be sit CapEx driven in $X.X consistent solid We the in cash GAAP quarter to related commentary D&A be of facilities; projects; CapEx key $X.X billion, range year’s is liquidity XXXX a today, levels. with excess available outflows

million on deleveraging. and range focusing targeting are in XXXX We free the flow $XXX cash in of

be the year comparable be the expected is range Full on year $XXX full rate run million, expense tax first quarter expected expected in XX%. range XXXX the Our of effective is interest lower to earnings in to while of corporate rate. the costs than XXXX appear

recorded quarter by full corporate undistributed costs costs be other year-over-year, the retirement the being year anticipate higher $XX to to continue announced XXXX key in employee driven We of costs. in range with non-reportable second million,

in increase $XX the full comparable comparable business XXXX headwind, million. Including $XXX likely should Russia will $XXX million D&A year sale, range nearly of the be earnings operating and million operating earnings

trend XXXX quarterly forward cash mentioned, we expected X.X declared is Dan and to prior in of near-term net Last lower. future EBITDA and its week, times, in years, reducing drive key we resuming that look Ball demand the comparable year-end share As dividend, to in debt trends, range and focus as will leverage incorporating is to repurchases our XXXX.

effectively secure Rest manage will climate cash this cash, our manage to earnings fellow the lens for and stewardship and shareholders. chain best and of the we assured, owners, EVA and customers in economic we outcome our as will EVA the business through supply current

With it that, I to you, back will turn Dan.

Dan Fisher

Thanks, Scott.

for a to on world, get dynamics Ball. up to impacting the time Given and investors environment great economic global our it’s speed

innovative Our technologies use plan products We XXXX to earnings, what following kicking is and grow analyze, shareholders to deliver are comes and and delivering expands, consumers, employee defend incredible cash as XXXX and and significantly a improved we owners will daily, flow our value cash observe flow and return in consumers high customers to in. while our quality unique resiliency, solutions we value produce of leverage free most, showcasing down that free beyond. challenging and

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

Operator

Instructions] [Operator Baird. Ghansham Please ahead. you. first question Panjabi of Our comes Thank go from

Ghansham Panjabi

Thank region has certain Hi. by you, volume you maybe a much your changed the everybody. lot the Operator. including regions to months, be Dan, just spending Good morning, how in three relative consumer outlook the can months has in U.K., to last forecast mean, start weeks, with weaker. clearly, off few seem changed I ago.

to curious your as that’s year? how the So for thought process impacted just

Dan Fisher

Things customer and are that line even have are guess, today, at anticipating been mix. it’s the Yeah. moved second in related quarter. I first to Thanks, in Ghansham. the around we we largely what quarter regions been largely have in where

some So haven’t. -- the quarters, in is largely large have in industry writ benefited, movement There’s some line. been

We the better control, we category. Europe, have within The behind category, behind of what benefits operational done were America than a a the market saw North things and every we terms little a were in we we spin America. efficiency South in little in little in in of outperformed our almost

our helped effectively So to the profile manage all quarter. earnings us in that first

on that. second counting very with of activity in we and lot outset what put the some will underpin We promotional a year a earnings generation you and conservative seen believe on our conservative that and half. it. came again, not We focus the that’s a view the like year is. first into to see of place plan We we things volume cash in the are the benefits at in our our it haven’t from But, half

focus will we to So there. continue

not of you, don’t helps but that lot if I difference. seeing a are we know

by year, first shifts we we largely We into know anticipated in least it’s some heading half. with and at what some category. the are movements customer by the and share But in for line seeing what

business, half, know, requires I second the In volume. think as this you

are a volume We business.

way the of little a but of hold profile year. year, the here second cash things will in we things that of got need can will the control for the we hold that lot our that the a enable earnings we and half of breaking majority uptick the bit the to and us So

Ghansham Panjabi

then understand Okay. I this Perfect. just so And correctly.

So from you recovery right? this year, versus benefiting last are inflation year

Dan Fisher

Correct.

Ghansham Panjabi

that there are is XXXX element that inflation to of you deflation, touch this how versus clarify. would -- can just would where on you your to you customers, seeing mean pass XXXX if any tracking Maybe XXXX, on it in and is year,

Dan Fisher

take it. Yeah. a I at will shot

isn’t of a these some terms improved the that carry half will forward the level, definitely to That and we the into until the way second next your and in majority seeing inflation high work. mind the contracts at Just Keep in in the run point, rate are structure, cost laps year. year. of PPI going the of to come America, specifically it benefit, second our North of into half

much will the as this Scott, -- of catch-ups. anything? are movement the on XXXX, throughout We into like the depending are of a be that overwhelming way XXXX on right lift or from we we There catch-up majority year-over-year we year be pass-throughs will looking this will are now one at -- what as the seeing tailwinds maintain inflationary limited the all will it for on evolving another, there counting headwinds components, doesn’t on look these absent or manifest. the where but is inflation be

Scott Morrison

down are No. built something are where general, seeing index not energy contracts we be that’s… maybe There’s slow certain There seeing deflation, tied typically it’s contracts. in might in to inflation we our deflation But, not somewhere. an and in unique

Ghansham Panjabi

Perfect. so Thank you much.

Scott Morrison

really us. usually good for a That’s environment

Yeah.

Ghansham Panjabi

Understood. Understood. Thank Yeah. you.

Dan Fisher

you. Thank

Operator

comes you. Please Mizuho. next The Christopher from Parkinson ahead. go question of Thank

Unidentified Analyst

Hi. taking on question. [ph] for my for Thanks John This is Chris.

Dan Fisher

John. Hi,

Unidentified Analyst

going you. you globe, promotion break the expand that various categories seeing the Can expect expand hi. America? you you trends also, the particularly around on Thank that are drive And you to growth please the then -- you Can in on can North down promotional forward?

Dan Fisher

Promotional is pantry America in really specifically, a given activity the North stuffing larger thing case effects in the Sure. packs.

of much seeing right now. not are any We

to that revenue of I component. being and think they are it’s reflected the of volume sort so customers seeing volume we terms and being are in flattish flattish of growth tied in our the performance

pricing. in believe months there XX will XX held last taken as have important, Where which an that the opportunity less more the growing one folks. is months They share you And would that is -- have the ones on, year we clear are be versus the price as becomes moves for thing inflation the share. to folks or

out will of being than they push see on If I more seeing need volume am focused you the are see, would non-alcohol to then to and given gain, the more the what I share performance down, beer have impetus spaces. of activity, with energy more they a in expect large and

the I the because the a be some, of one across area specifically, anticipate anticipate there’s beer categories, category. in I in Board, where see area alcohol And So little could the us the if probably it that make or half you anticipate much. don’t but shares year down don’t will bit in second in of

Unidentified Analyst

so you I much. Thank will it Perfect. turn over.

Dan Fisher

you. Thank

Operator

The question comes of George Please of go Thank next you. America. Staphos ahead. Bank from

George Staphos

everyone. Hi, detail. morning. for you. the Thank Good Thanks

Dan Fisher

George. Hi,

Scott Morrison

Hi, George.

George Staphos

doing? you are How

Dan Fisher

Good.

George Staphos

there’s wanted and I particularly the question are without information and volume seeing as So helpful perhaps you on can And the markets that the trends share couple terms to news away of be year the been of would beer Relatedly, a comment. your or rest your of proprietary mix that and year? back your will I to end to had to the giving there. relative extent a what headwind your come the of is for you are to happening relative expect categories mix? lots One, for you outlook you rest of mentioned, to customer category in you Dan, follow-ons. there any What particularly of then beer the expect

Dan Fisher

Sure.

second the part question beer first. take me the Let of

know, long a been time. George, us following you As you have

beer have and customers market. overweight an we we that our serve in We beer all love and

the drink and go I and am But going it into win we Ball’s to net-net-net will relates the beer. at portfolio this, is, should specifics look when folks as tell I how to So you beer you specifics know to relative customers. I not

equation mix a a that’s one period have short of there’s in customer time we may a pick so of be up both there -- We that a if may generally. have we impact. may And shift, up, share sides

the itself industry. the entirety interested So is what second is beer we of galvanize They going the the in half health and across need entire to are of to in push believe have the more going year. of the we to that category are to and promote

George Staphos

And on we it’s so the long you… are help a season, end been earnings market trying to trends and

Dan Fisher

the… in And Yeah.

George Staphos

…ask them later this weekend but…

Dan Fisher

any or prior answer don’t reiterate. anticipate will In significant I in space, What significant the to category. prior -- the by category question, wins I I my losses

have over the in share that months aggressively, shift to price happens better each on folks will approach if think, you a I be and depending share owner XX brand have there not decided so months. that that increases category, each on to takes on the XX will, done pass gain last

the be ones posture within where they I So the going within are portion, are is if pass-through going making are a think are Zoom, to and pass-through shift what they the depending a what the have a you not to taken winning category. but category everybody decision that so share else they it’s category, in on share

our within to little volume. think competitor’s some every win That categories. but I versus determining going is factor that and be do category volume on a others, well do really will will better it’s going to our the than the customers be

Scott Morrison

is, George, winning, product the the cans -- that heavily we positive best new to long the the game is only in are the that’s a so can are the thing for can well is here. playing weighted run long-term, long still I positive here introductions bodes would and and add

George Staphos

capacity, what be Two questions will it cans that maintain year? you into $XXX Understood. think in this to operating was in is CapEx XXXX said on you can And you we good the XXXX, benefit luck the to based and should the in sustain think kind degree can the challenging on a or a little XQ, one that And of in the of you expecting what talk really be after a I hit you to Thank this obviously you will quarter million One, on rest hopefully talk XXXX? year rates or back saw $XXX and Scott, D&A? and to that range you of can quarter. can then beverage and you aerospace, of what you million bit performance one-off the over. whether turn --

Dan Fisher

you. Thank

on I meaning had would wouldn’t be half of improvement, two second chain real significant improvement year-over-year than will about supply that, run But the disruption. I quarters you quarter performance. year in In sequential we one. rate some is being underlying say do aerospace, quarter aerospace think improved. a the last So the think I way There pretty is better

So that has been fixed.

enterprise efficiency And first then in what nice run saw gains a you better the in a performance nice a quarter of terms first really just execution just quarter. and was of in the breaks there couple and

each So sequential on efficiency and that it this do will the will -- I is dependent an it poised tackle But the the right, to a I question. just have And that think be business It to be Scott let mix. be will year. year won’t in tailwind lifts, continue projects quarter. exceptional

Scott Morrison

Sure, George.

D&A On for D&A, I the CapEx. said GAAP

George Staphos

Okay.

Scott Morrison

Not ones. the operating earning comparable

George Staphos

Okay. Got this that. year? it. And Got for it. Thank you operating rates

Scott Morrison

are we the are mean that in make sure high our rates, XX%. more Operating we of second I to running pretty taking at are plants. quarter and taking it we of above are downtime we operating levels

So South in North QX America. America we in downtime and will take

pretty America, in and of will QX. drag are so getting that South focused operating at and fairly typical we right a high run inventories be bit will that’s and we that so to QX the in can really business, given seasonality the level -- rates it but run a for on our the that be year --

George Staphos

you, guys. Thank Understood.

Scott Morrison

Thanks.

Dan Fisher

Thank you.

Operator

of Please next Angel you. The go Stanley. Thank Castillo Morgan question comes ahead. from

Angel Castillo

Hey.

me? you Can hear Sorry.

Dan Fisher

Angel. Hi, Yes.

Angel Castillo

taking Hey. question. my Thanks for

-- just will quantify on Just as related the of that XQ. kind has you cost about you drag leverage the of of or from potentially in returns. activity operational improving follow wanted to your what that kind up volumes promotional kind as to business downtime and Could commentary be the around think

that just which of you as degree versus be the maybe volume? much could is back variable leverage is to bring to upside our assets you talk operating that back online would and maybe comes about some how Just

Dan Fisher

first quickly… of congratulations all, on Well, Sure. and new how being dad a

Angel Castillo

Thanks.

Dan Fisher

don’t downtime out help question. -- But, know drinking will quickly can the in seriousness, I to of how well. answer Scott out That the Leella cans. really I think, it all start laid

So the entering America, season. in are in you off-peak South

comment balance maintenance. there and do is typically The about this you of its curtailment curtail. So curtail

maintenance. it’s So plant

to So have for going you certain. are that

expectation. And a extraordinarily plants versus our performed America, were and little in our North QX then down in well volumes

inventory that, going balance So we more are manage to cash-generative the here little are carried we tightly and to that for manage bit in going a we quarter the for in year of second the purposes.

have We can our lines, to flexibility The you multiple sizes know. because market. in Central capacity, answer. size We in and know certainly There but large got have have lot you the North one can to a harder do limited. of it’s that think on question Angela, is writ as for I us, us this about curtailment line. every we American has excess is exposure that,

think, question, can the that, there, flex you is is depending the product turn And or leaning can so that’s that’s to next I were innovating and on is that we we winning, brand what that and the into on.

we We are couple we a terms a of heck of in in lot in than of running of are in business. stock a performing we and a position healthy in our years last are the healthy in terms really better have safety position

into and winning sizes can be. have product gives flexibility shift, whatever in we and to is to the the dry number have things got brand a powder if whatever powder winning dry going that So got of we move suddenly us

are with manage lot So into stock -- discipline levels upside. I in second us concerned safety really here I to inventory quarter. not and stepping positions and about the a of going we am

Scott Morrison

give sequentially going quarter of more America, do in right. And in granularity I essentially said, flat things and second we inventories to to North Angel, are comments, to getting that downtime given the first be quarter the prepared would just we our

will negative that. than the America, South In be larger

and than as we of and it year. volume, we be position the it the busier the was absorption, a expect better in the Given second move then QX mix will to in softer be into the half

Angel Castillo

just other talked corporate, you And about guidance you. segment. on very I then up curious, there. in the the helpful. Thank am the following maybe reiterated you That’s strength

full just pieces, for Just maybe are the seeing some some underlying for that kind of other in aerospace the the of strength the of segment year? be expectations will what and you

Dan Fisher

Our is aerosol business really well. doing

to business. We win continue

is are We I say, growth. impacted, seeing have was come during seeing nicely. really and continue it to nice COVID we volume volumes -- business globally would back that That really

driving in -- We are and the of and in the that, and personal refill of seeing side. also is both care water new a reusable typical space innovation space, products and the but kind aerosol lot

mentioned, of And and for chain well. that will would somebody supply year. in aerospace, us business They the good, contracts be challenges had see are performing I these newer is stepping we cost we that had and last good And think, the money. choppy a year the are they that We year. were we benefits into confident exceptionally full

really about are businesses. we So excited those

Angel Castillo

Thank Appreciate Dan. you, it.

Operator

The of comes from next Cleve question you. Rueckert UBS. go Thank Please ahead.

Cleve Rueckert

Hey. morning. taking my for Thanks questions. Good

Dan Fisher

morning. Good

Cleve Rueckert

I to or point? am couple guess, where the into if curious standpoint, a I I as were at inventories digging both product am this versus from And me. material little just building quarter? inventories down inventories of they the where work from raw follow-ups you and finished your a quick just are curious, starting stand bit. A them of the if of end you just target,

Dan Fisher

Well, we we America, North -- are working in are America them and working South in down.

big So in payables. you swing a that’s why see

metal, raw and much goods both finished We as are not ordering material. coil,

getting of from so And we in different about But think and dynamic there. turning South in a so North down. better plants, that position very inventory QX be we to In Europe, it’s it’s not -- and another our America standpoint. quarter we will on inventories a a have an in got we of America, are couple do it’s then much

Cleve Rueckert

raw coil, is you the I that material mentioned more And on side? mean is finished Right. inventories… product

Dan Fisher

It’s both. Yeah.

Cleve Rueckert

Yeah.

Dan Fisher

are talking… we I It’s and both. mean

Cleve Rueckert

Okay.

Dan Fisher

an -- bit we in still from year. of last piece North bringing were is last of are this raw America we In But lot anticipating overhang time the because good of a we and finished at a inventory. a growth lot days year, material this -- talking

been So we and material working have stores off. have that held on we to larger raw

We to that off. continuing are work

And curtailment finished to few think I year. is in But a heading of significantly than meaningful anticipated what not that’s it’s different days a signaling you. the and Scott’s goods, we into what the additional quarter

Cleve Rueckert

Yeah. Yeah.

very that’s then think clear. in I cans you And follow-up. a like just America Did first the North into quarter? any quick import

Dan Fisher

No.

Cleve Rueckert

That’s Okay. very And then… clear.

Dan Fisher

Yeah.

Cleve Rueckert

one …one last from me.

the activity... promotional On

Dan Fisher

Sorry. We Maybe -- maybe for regarding further last question. Q&A didn’t help will that one -- this year either.

So there was any at quarter last a that. that production originated that and bridge won’t commentary. XX to for all year XX you have of each we But have

have For North origination year now into America a now bit Saudi specifically, we and last away we have little in Europe. that’s production did gone and of Europe got

Cleve Rueckert

Okay. year, this I promotional in to on activity material tone appreciate at But visibility, just just is still last on I and you for are gain a when promotional is pick activity the taking conservative and And the mean, point and one the impact you me potential up plan. the volumes? expect there the that then to for do have

Dan Fisher

And volume Yes. really from are the this for trying promotion I promotion absolutely, The degree think, the works is we avoid to big us not I is, which mean, well a really I mean, to perspective. question. question.

it into much react would we what of relative of would think here’s that norms. or with I to facing understanding impacts the and kind look But consistent are real going detail how a historical like fully backdrop the promotion

about of cans, on ago $X. three was years at XX-pack it $X CSD average, look today If you a it’s

going price it? even very difficult promotion. $X off So understand. going I and it’s promotion to is it’s our It’s So us probably move that and for difficult to to of the characterize is Is $X for think off to in just the customers not around move elasticity the it?

now this earnings weakness packages right and or that’s So at the point, things. higher end difficult deliver strength deliver also is to just given those of consumer and very and and we stimulus to rates all something to the interest plan need cash understand

right difficult and ambiguous now. it’s -- just to quantify It’s

tone cash what’s for something running of are employees managing are and to. us the and we that’s front I for corporation and So we changes in manage our our best think, to substantively, until

Cleve Rueckert

you. lot Yeah. of luck makes Thank a all. That it sense. with Good

Dan Fisher

Thank you.

Scott Morrison

Thanks.

Operator

question you. of ahead. next Thank The Anthony Please Citi. comes from go Pettinari

Bryan Burgmeier

Good filling morning. actually in… Burgmeier Bryan is This

Dan Fisher

Hi, Bryan.

Bryan Burgmeier

for taking the Anthony. …for Thanks questions.

Dan Fisher

You bet.

Bryan Burgmeier

Yeah.

America million don’t that the earnings will assume means $XX actually part power settlement being XQ, the you remember that talk this from And like flat of to full tailwind an XQ it guidance the of North when I kind hearing I don’t apples-to-apples call. in agreement quarter-to-quarter, year that about tailwind So I this be in because repeat was is accurate? originally? expect basis, XQ, on

Dan Fisher

will You but be are year-over-year, correct. the It up with flat first quarter.

of terms call, In previous we the when it. our we the purchase of had virtual and agreement negotiating power were settlement

it. weren’t we going to So discuss really

and that would through was were didn’t into amount because be first last that amount of Part built our know what have over and year. run numbers the just quarter we we would time our it, in knew we P&L going settle to

not hit us but first provider all to to favorable But outcome we the outcome able of wanted and contract extract and repeat. the will us that a us were benefited very in for quarter, -- exit the that

entered we so clean have up spot. are make power virtual a purchase agreements in buying and for that energy other were We the lost pretty to good into we

Bryan Burgmeier

that Understood. will Okay. some to close? and how Wallkill for the say discussions were Thank possible last if it on plant. you or based closure And in when me are of what plant now, announced possible those the you question the am I about detail. you just March, for having now, discussions you can what right is you wondering right say know going

Dan Fisher

were savings. model, on anything wouldn’t cost in Yeah. in fixed XXXX I filling We out say count terms an I of relative it. closing uptick would entertaining your in said to we

we closing a to committed subtle now. are I change. facility that That’s think

are is about we to now. bargaining And lot a into at there’s the because just other thing entering this point, not talk effects

this update will know at specifics I you time. I is you. we this anticipate, see tailwind coming at in will out of But more, XXXX know will would capacity we see the what As point it some that but and don’t you year

Bryan Burgmeier

Thanks a there. yeah. Okay for lot detail

Dan Fisher

bet. You

Bryan Burgmeier

Good luck quarter. the in

Dan Fisher

you. Thank

Operator

from ahead. Thank you. of Arun The question Viswanathan Please go next RBC. comes

Arun Viswanathan

for congrats question Thanks strong quarter. taking the and Great. on my

Dan Fisher

Thank you.

Arun Viswanathan

Central of North would likely first very were QX. guess, region America to to in able North hit that Americas in or thought I off, be kind I QX high Central in America, segment the of more materialize in income you -- levels

you now look what you have flat look on as mix I of glass some obviously, Brazil, performance the you for QX, are maybe also seen expectations, just But inroads the as as do So comment Thanks. substrate there? the rest your into kind we on side. into expect you year? of far wondering And guess, Brazil could as

Scott Morrison

seeing North I’d the year terms are are is last you operating say hard of cost-out, see Central in plants SG&A work lower, from the much America, Yeah. better. is, all our what and you

We think back getting how are operate. with group our we we -- are I

So it or at expectations, too. above performed our

are and even well softer very perform are soft exactly expected We if volume plan our game and you volumes seeing. is so what to that’s

will due You -- relatively we in performance flat of quarter business. we that to also but that agreement earnings repeat the so got and -- improved got and keep benefit the first won’t that’s power a virtual purchase across

Dan Fisher

saw higher X%, it’s a XX that shift. in glass substrate historically. months somewhere have we share the glass, environment, in to what returnable In happened line to here seen X% last months, terms a in the with you see versus year. we shift X% or That’s that what’s In XX of last to penetration aluminum do return inflationary

of think, and the into second Brazil, and believe characterized customers we indicated our some allow and half, comments the to hedge cost the as step true in of dissipates Scott aluminum to I at what in inflation actual what cost of are. the we positions them As his in down outset,

We for us. a that of will half QX show the up strong second QX peak are and in anticipating season

I We in are not be down hearing week. anything next different. South actually will America

So I anticipate would a to there. the question same. shift, hear permanent see more underlying if of the that I -- But the it that’s I guess, don’t answer as be

Arun Viswanathan

that cost to I done on you not Great. side a Europe, Thanks. side Is energy contracts or any your And requirement was work work on have other as for guess, renegotiate then -- on extra necessarily? follow-up or to items? any there do any there

Scott Morrison

the really A done European lot was our business that to of and chain supply has the manage job front good on front a costs. done. already commercial both The

too. and that are -- performance, in you that’s their seeing So

Dan Fisher

think significant in which a I our business Europe. in business, and that excellent equally aerosol has by present both job

businesses those very longer have teams our outcome of job backdrop customers in term an and So good through management a Europe. those to get as extraordinary inflationary and different to manage we energy both done medium and a work of both partners as with to

thing right our stakeholders. customers our by So done I our the have by teams done think have thing right we the and

Arun Viswanathan

Thanks lot. Great. a

Dan Fisher

you. Thank

Operator

The Mike Thanks. Truist. from ahead. question next of go Please Roxland comes

Mike Roxland

and Thank congrats you. Hi, Scott, on a… Dan,

Dan Fisher

Mike. Hi,

Mike Roxland

… solid quarter given the results there.

ones Just some quick me. for

activity a see kicking some in upside Just does is what in embed that -- for exports the there forecast expect be of have terms growth the that the off? type XQ, embedded? to volume particularly if the EBITDA North slightly start and you promotional if of and down to America you year, guide that to so, Is for do could

Dan Fisher

Yeah.

year, and decision of and the It’s of And we I into and balance the You were built given as kind you demand at our projection. out think into the question day the But for the actual really to down correct, there. volume some. believe current is at profile process look a choppy will we business little North the we America the related to bit the are be slightly it or going are end of course assumption insight need volume. point very over pricing underlying this what’s a

that’s we But difficult the took, actions on to all as us -- as and based profile down and ability volume the profile cost of give we a those slightly that we in are fixed what’s importantly were, earnings our -- all the our anticipate took of against kind flat more those teams cost cash of actions and we of the all execute what model. to our that’s currently

our half seeing like upside, of we forward half we But, rate, year. volume savings -- of in yeah, yes, look weighted current the off that whether pass-through the to meaningfully be plan, and that would some mechanisms we that terms second even weighted the would upside. second of Second things anticipate half additional PPI in moves correct, run cost and

I the safety in into it, as on performance. stock both call We can commented operational earlier our and and step

role to health a we that significant consumer but need behavior a see for play So there’s role end room that. will and upside, in the pricing and

Mike Roxland

that just you the the then down And and you market, the follow-up whether can South on Frutas beer have And to bankruptcy Brazil, a America it. ultimately idled the that closures? they behind like, little plants there? a others terms Got and in bit quick and were being permanent one in updated then being of any producer become you thoughts part of market just Dan behind large of if mentioned market. Was due behind the

Dan Fisher

Yeah. permanent We have we have we -- the closures announced. had, only

dry got have powder that we marketplace. So in

on assets back the you these being what open in indicated. are of happens depending to as market, up Some contemplated

share beer mix they to does was there brands customer our and time. beer from of had A QX may weaker -- shift outweighted of one exposure benefited, around time there. shift or in because one beer There it one the was competitors to as

a we We the quarter. believe it of the and profile. hedges relationships was that rolling second step shift little more the and customer are yeah, aluminum customer about us for choppier of year into so to cost able being But, half have, that they us mix because first the excited their in for our off the

Scott Morrison

didn’t We customer to that bankrupt. went any have exposure the

Mike Roxland

Got it. Very clear. in Good luck XQ.

Dan Fisher

you. Thank

Operator

next go The Phil from of question Please Ng ahead. you. Thank Jefferies. comes

Phil Ng

and I quarter tough Hey, a solid environment. pretty a guys. on guess… Congrats demand

Dan Fisher

Thank you.

Phil Ng

North it give kind terms of … helpful. in would America more sell some trends and you How effectively of us same Dan, -- throughout volume helpful I kind up think, of kind in the trends? expect expecting be XQ Central color Dan, terms kind how volume would in intra-quarter be do is it of April the of America. shaping of of and to

Dan Fisher

Yeah. Thanks -- for do. I question the

In there’s customer lot fact, currently but that’s we what’s against to are base movement the it’s here But, happening. QX, by and shift yeah, sit softer managing as anticipated than a not of probably today, that. a we little

April is usually not the month that you usually see activity.

the of and pockets characterize may really today, you with it you a the half So second sit largely you think, It’s correct. season. in get peak important depending be that is June, here as May QX on way bit the as I line and customer But softer. we becomes mix to in head

Phil Ng

are then Latin for America, expecting… Central you America, And Got America, Latin you.

Dan Fisher

Yeah.

Phil Ng

heard I mid-single-digit you If growth. correctly, Dan,

America, a like So ramp do pretty have? line start just backdrop, predict. the line it’s will in such hedges the this, behave North jump in I tough you you rolling sizable your that sounds customers of How like it’s pretty customers much been into that that Brazil? off. would kind imply sight demand as that been sight back much half. like and it’s of your have predicated maybe of do promotions view mean on loan How choppy lean in it to of would you because Part help

Dan Fisher

No.

all a half and built I question you there having great and that conversations is. will of just outlined been. has with second next We think it that it our indicated. be down I plan customers, it’s our loaded The week because are on everything we

But what they that. on are aren’t planning for. That’s plans count should You absolute.

I position. past. also there give I our maybe that a out, heard laid at mean, But teeth risk would there’s in in than point have us anything bit characterized. what anything, other we think valid, point, backstop little in significantly this I more have haven’t that any So contracts your volume elevated have I a is than insight provisions what But suggest we certainly don’t have years

Phil Ng

Okay.

still sneak back be sorry, the America? flat, to you what assumes, little bit bit down in. maybe a back a more more half inflect a flat half is North America, expecting the in to it North or on little Any color that it are up bit. like And is to down just little volumes one of

Dan Fisher

would half in the declines -- how get we and there I is in the first -- flattish half. slight right now, Yeah. back It’s

Phil Ng

Okay.

Dan Fisher

think plan. for more the current our half, opportunity I in that’s but back there’s built not what’s in have to

Phil Ng

Okay.

I you. think that’s more than reasonable. Thank

Dan Fisher

you. Thank Yeah.

Operator

you. comes The Barclays. Mike question next Thank go Please ahead. of from Leithead

Mike Leithead

Good morning, guys. Thanks. Hey.

Dan Fisher

Hi.

Mike Leithead

on I the actually there, cadence earnings North question for just America to just up follow year. wanted Phil’s thinking about the last

outlook. think, fairly you I on Scott, the were XQ clear

in? should contracts the new the second rolling about half think the just magnitude think you about So just we step-up how of as

Scott Morrison

PPI it, the Well, in we of half QX get the of for the comp easy back year. more and last let’s the pretty face was year,

So in better which of But good very should say, do performance a quarter year, not last last terms of really America. meaningfully we had was good. third pretty QX in I would than we North year

quarter. the in weighted So it’s definitely fourth back half with of most it

Mike Leithead

outlook and then earnings a the South and could beyond? North enough. you Got outlook, it. speak for briefly, to America earnings you quarter EMEA but into America maybe the And second Fair about second talked lot

Scott Morrison

Yeah. Europe have -- got we really is Russia. of the headwind

million It’s in to $XX was the in that $XX moderates first quarter. the the So second third It quarter. in quarter. $XX million million

of So well you have largest quarters, couple XXXX. got that quarter each the last performed next those -- headwind of in really Russia headwind, the because being second year

we standpoint, contract volume have But inflation a positive been all standpoint, are have seeing from that they of things from pass-through have been cost an doing and from nice and got up. the standpoint plants a they coming new

European about full year. really the the good we business for So feel

Dan Fisher

Yeah.

half you the Europe of year is the big of inflation that are terms. operating I FX then at stabilized, into step facilities we look in stabilized, the divestment of two year terms in Russia in improved the new still you and on think business of from half how second first and seeing headwind contractual the earnings growth

with it you out in improved So quarter Russia. will a million of drag be the once performance continued $XX step second the from QX

Mike Leithead

Great. Thank you.

Operator

you. from Bank. next The Thank Kyle go comes Please question Deutsche White, ahead.

Kyle White

little or lot your of ready-to-drink and these back have greater uncertainty some in of new customers, new focus but been understanding for spend. a in space morning. kind share Good of introduction, can offerings reduction the alcoholic this, a key bit on any the new product I that pulling growth. energy wanted taking to beverage obviously of Are to in the the consumers from product introductions seeing can a products on economy, Hi. Thanks the win you question. also

are you what seeing curious there? just So

Dan Fisher

your sorry. boy, first Kyle, congratulations. product Vane -- Yeah. of innovation new baby lot coming are the all, getting we information from of [ph], A new girl on is

Kyle White

No you. worries. Thank Yeah.

Dan Fisher

and cocktails going -- he’s from what to continuing ready-to-drink drinks. am sure energy wanting nutritional I seriousness, So, is lots innovation be gains still but -- all our of to he cocktails. yeah, share In see and happening ready-to-drink

of really think have in space. I that customers a couple benefited

mechanism done companies that step if the things a alcohol alcoholic here, to we going to beer some at into then to seen really have have historical is innovating fastest well. declining, beverage forcing almost of have and have and new those CSD they they or And companies are like, are the And sell introduced rate. beverage there’s companies

been -- innovation with So also of have see you part creates which to the have opening as a greater space folks a will -- customers have there’s are pulled, disruptive It for come our this lever increases you pulled. the the other price is in.

are have what we That’s in are all having and we available, you the ripe And disruption more win and now and it’s seen those starting and have more those see conversations. will cans tailwinds to cans we that more always so medium-term, for but will here innovation manifest that.

continue the will a Still for benefit new that a those to and at So can. I levels. tailwind think be XX%-plus product introductions seeing

continues changed win. The of that. can to in nothing’s terms So

and introductions. new product So about the excited are we prospects future

Scott Morrison

Kyle, one in leading Colorado of the actually is visiting we in fact, have today. us houses here today, innovation beverage And

categories. So we excited of working them new and ideas with be all beverage to are with new really kinds and folks

Kyle White

appreciate want But next the here shortly. sell-through to start-ups to the Maybe question guy for I And on it. the Europe. little here related focus soft Got remarks. a I

and the ramp-up how Just kind curious Republic is the costs call the U.K. Czech any -- out? how and any doing, there are plant going to of start-up

Dan Fisher

in the will But leave meaningful great track. cost. don’t done job. to anything The teams are think I on a right I they it Scott. start-up have

terms training. plant in We concepts have sister got of

folks the They local are in. helping other out in brought us we facilities. So

when ready to trained and So production be day operation. we well step have on one in they will and

Scott Morrison

be last well phenomenally the in that it’s of quarter. those executed. start-up had of -- first curve plants of will about But probably million more There and We was actually second each $X I been quarter. cost looking night in the the just for start-up at cost

the of on thought we really and and would performance be happy We are are the where those with right execution we we projects.

Kyle White

Thank you. Appreciate the details.

Dan Fisher

you. Thank

Operator

of next comes Gabe Thank from go Please question Hajde you. Wells The ahead. Fargo.

Gabe Hajde

Scott, and good Dan morning. Congrats.

Dan Fisher

morning. Good

Scott Morrison

Thanks. morning. Good

Gabe Hajde

the think EBITDA first of being you million to implies quarter? Scott, would the sequentially, sort to dividends, sort the about of end America about $XXX the to math talked way that from quarter. us an it, if plus the or underlying year I me. feel times just second North XQ down question performance X.X about there’s having, year, levered amount of the on that million but appreciate up like up by gave a that just and of right you second I the then XX.XX have and noise a stable [ph] was Central of decent out full the subtract quarter of $XXX and cash a then cadence, being excuse you Xx expect Is and I year profit of relative But, EBITDA. be I business, or almost odd

Scott Morrison

I For where coming are would say, the your question, directionally you first of out. are you correct side

On quarter part EBITDA? to you the and are second second the speaking

Gabe Hajde

at... Correct. looking Like, just

Scott Morrison

Yeah.

million back $XX in Now drag we the of then got both accelerate will year. quarter we a Russia. -- And the second will EBITDA from down explained the and it be half

our right We getting South America. are inventories in

hits. So absorption take we will

will We in the have mix negative second quarter.

we PPA and more thing quarter, the North the make but In had money very will the in don’t we the in plants quarter. we than second will America, we well have perform first year, last did that

how I out. it shake explained I exactly So think should

Gabe Hajde

of then wrong, on that you. mean, the is probably, that out your future change anything in that about. million yourselves. long be balance in debt cash mindful is guys I XXX, have sheet want drag we included Understood. you that a wouldn’t that you Scott, interest of of November, flow expect being potential billion potential the there good, And for cash talking at which payable to pretty one Unless are Is $X I model rate and expense? thinking in is And Thank I should on $XXX on the then, days any you you due flow in about years? extend it think my are

Scott Morrison

kind built in we when to of No. that The $XXX the million and those actions with take the take any rate November. with we maturity would would actions is deal -- in

of We the cash back will lot generate the a in of half year.

our So doesn’t really paydown debt happen.

kind and it stays come even timeframe, come in peak of now fourth right down but through June to fairly is of in quarter. down, until starts the it leverage This May then of April, kind will most the

was interest part front. What that on do expense we other assumed debt might anything the So question? of of the kind the

Dan Fisher

be will yeah, retiring in be statement cheaper And we would we is, that debt I think into… stepping than we that recognize implied

Scott Morrison

Yeah.

Dan Fisher

and point Scott’s number. this anticipated in that’s at … in November

Scott Morrison

are going Yeah. next And delever then we more. to year

can interest delever environment, think year. a start I some in rate back next both debt. the sure But want probably little higher we and less stock buying you

stabilize, when to am so you are doing hell lot of not rates than good. but Gabe, debt. still But around started has we world a older I that’s these a were that was scary. The I X%, X%

we we -- changes what are doing. to something So X% but have debt is deal that it’s really not it’s the or not changes something with, direction

Gabe Hajde

or then just you. Understood. days Thank Right. capital working on other in general. payable And the the question was

Scott Morrison

Yeah. Oh!

Gabe Hajde

I payable XXX days. am seeing days

Scott Morrison

Yeah.

every manage supply do And day. both the a to standpoint that customer from are we key capital got the negotiation, side side we contract think and new and those points. working every I

focus terms month. flow volume, have and day, so matter every that on just meetings about on every It’s price cash not and and we we

rate expensive. it. on yeah, focused anything interest and of keen has time higher very money But, is that are a we more element a So environment, in

Gabe Hajde

you. Thank

Scott Morrison

Yeah.

Operator

Thank you.

question… final Our

Dan Fisher

Gabe. Thanks,

Operator

-- … Pardon me. Adam comes Go ahead. from oh.

Dan Fisher

more then Yeah. and Thank it. yeah, one said, appreciate I I you. question

Operator

ahead. Adam go with Please Goldman It’s Sachs. Samuelson Okay.

Adam Samuelson

and me me in. yeah, Hi. appreciate Thank -- you squeezing squeezing I you all

Dan Fisher

bet. You

Adam Samuelson

appreciate of Russia to a ground noise basis There’s a of on I year-on-year back lot covered. with EMEA. just year prior going kind results. Maybe and the

You was non-Russia year. EBIT prior have in the the what disclosed

market organic carries think implicit new a without kind volume into or second the Republic of progressing in So broader kind about like-for-like the balance basis about business on the an we and that expansion? of think the U.K. capacity how profit year? layering as the Czech underlying And profit XXXX do over that on growth of we over half in, in the

Scott Morrison

replace plan able a basis earnings had is Europe euro game for to months nine for Russian this last really those on that to The Okay. year we year. be

So Russia accomplishment, do a of was that business. profitable -- that’s hell if a that, an we because very nice can

done They of of the supply happy job think, managing that’s we And EMEA I with contracts, so the managing their if they structure, victory. really do the their business. a great that, managing and so are cost can have performance chain

Dan Fisher

Yeah.

this and generate more I of significantly set simplest operating think plan out Russia, would is Europe’s plus the $XX in money that we inclusive that have are the we terms, going of from are of to to and coming comparable lot million in we offset year cash earnings to the ability a more less on be going make volume Europe.

start think done got against off significant So a plan And good business been to they and have for they have improvement that executing have the are a done that. they they has only -- the plan extraordinarily was we well when They time Rexam. and from to business against I continued pandemic. that didn’t acquired here we since global a we have deliver had

ability are So confident feeling deliver. team’s that we in pretty to

Adam Samuelson

And it. the carryover from XXXX into the Got on volume facilities? new

Dan Fisher

X It on be those range billion two units. -- the range in facilities the of in would

Adam Samuelson

helpful color. That’s Okay. appreciate it. all Thank I you. really

Dan Fisher

here that, with think, participation the we I for And today and to everybody’s you. call. forward look attention quarter. talking another you Thank to on in Thanks

Operator

you thank Thank for and you. disconnect Thank ask Have that We good participation your conference you. you day. please today. This for does your conclude lines. the a

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