Earnings call transcript Q2 2023

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Operator

Greetings. And welcome to the Ball Corporation 2Q 2023 Earnings Call.

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

conference recorded, this XXXX. August reminder, a is Thursday, being X, As

would the CEO. Chairman turn like Please over ahead. I to Fisher, conference now to Dan go and

Dan Fisher

conference morning, results. from XXXX information those differ expressed Actual provided will be is Malika. results second call The everyone. or this that forward-looking you, the company’s may Good Ball Thank implied. materially Corporation’s contain call during or regarding quarter may This statements. outcomes

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

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

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

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

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

a Late are public commentary options or regarding business. quarter, aerospace for depth is separate There comments are today. additional in when be that on considering via its press the will company also of that provide made we the and will the topic limitations announced If they necessary, release.

comments. Morrison, President will our on we financial Scott Vice with and CFO. key Scott me provide today up introductory Executive metrics is finish some remarks. discuss Joining closing will the call I'll and brief then

Q&A. XXXX Our outlook and for the of remainder

and level agility that first call, safely customers' fulfilling by and while choppy quarter begin that thanking said for needs. me our was the On with the second we case. be working utmost of would Let our our quarter our employees

a sale and Our disruption headwind including volumes $XX global the million Russian delivered experiencing operating from the driven higher notable million and by earnings of domestic results comparisons, in amid year-over-year Russian down $XX beer XX% second tough America. interest the solid quarter brand impact North team of expense, beverage sale demand

say the for an excellent costs deliver position team to job the quarter to and proud of stronger both and capital working that second half. levels business I'm managing a did our

Looking from cost-out forward, to we and continue inflation operational benefit recovery, will efficiencies. actions, notable improved

inventory Our further. good in plans improve levels with to are shape

forecast is managing of team America additional should the [Indiscernible] real-time brand unlock which customers second North balance during beer opportunities Our demand U.S. half. the of in and our mass other improved the

to kicking business are the deleveraging while is and opportunities in solutions packaging return value forward. of going the we additional and accelerate studying also grow multi-year Cash to shareholders, flow developing innovative to

facilities to globe, plant our beverage cans scale, to the India, new substrates ensure organization the win we innovation, footprint, contributions and to in other the continue two mix, outcomes the of our leverage stakeholders. to Around for capable all customer our and continue relative across best teams

technologies continue we aerospace, security aerosol In high remains businesses, backlog increased unique support our national and billion grow. and performance and one demand one-not-book to needs provide products aluminum for our our aerospace In the demand. and to environmental operational in

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

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

comparable business low diluted exceeding headwind. Russian long-term including anticipate Consistent of the the and free excluding of end sale $XXX to deleverage XX% that XX% goal, deliver growth, to of for growth Russian and sale with we to potential shareholders, cash and in million long-term remain XXXX, of comparable approximately EPS goal prior positioned the we achieving our commentary, value earnings flow to XXXX, share our diluted headwind return in the

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

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

trends, now for and Ball, and For digits, estimate and customer excluding incorporating volume the mid-single America low Russia, up growth South we volume global our up year-to-date flat with down volume mix being America EMEA mid-single full digits, year single North digits.

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

turn that, Scott. I'll it With over to

Scott Morrison

Dan. Thanks,

were share second Second quarter of of quarter the earnings comparable in diluted XXXX XXXX. $X.XX $X.XX per versus

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

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

and we plants proactively reiterate near term. the call system have our in earnings prior manage will across regional of to To our supply continue been commentary, demand balance

inflation in Starting having accelerate July X. last its the two then and earnings this in EMEA, for in third business the new the of an the third and as will beyond North of costs in anticipated lap headwind quarter, earnings start accelerate through level kicked the the quarter, of segment contractual fourth quarter the In move to multi-quarter majority recovery, earnings the Russian improved America will plants. headwind in they

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

and solid prior be in range outflows here in year's quarter second very approximately position credit metrics. As consistent a related of committed we facilities. $X.X XXXX will by to CapEx sit some driven cash projects. with ended key $X.XX the cash We today, commentary in very liquidity the billion and billion,

be targeted is CapEx of GAAP XXXX D&A the range levels. to in

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

on rate be tax earnings range is XX%. comparable Full effective expense million. to year the expected full is of interest the XXXX in XXXX $XXX of be range Our year to expected in

We earnings likely year corporate in in full other non-reportable range to million. of operating undistributed and the comparable recorded earnings anticipate range $XXX of the costs $XX be full year million. Russian D&A operating Including $XXX the sale business million nearly headwind, will $XX be comparable And should XXXX increase million.

And we debt lower. will forward trend X.X to is EBITDA drive future incorporating As near-term trends, to to in look in year years, comparable that XXXX range expected of net times. end we demand the

Ball week, quarterly is focus as And leverage Last share cash our its key resuming declared dividend. reducing Dan to repurchases. prior mentioned,

to to cash continue the cash and EVA for secure through EVA we As best manage business in stewardship outcome fellow this lens effectively the shareholders. manage will current customers and and owners, of earnings chain environment our we our supply and

With that, turn it back to you, Dan.

Dan Fisher

Thanks, Scott.

world, the global speed investors time get continue impacting economic a believe our and environment is it to for great on We given to dynamics Ball. that to up

the following challenging results improved is progressing. XXXX Our

solutions and technologies Our for resilient customers. are our provide products and

flow beyond. our to continues cash remains focus our earnings, on cash as expands, will of free to grow flow return and to Our leverage free and value customers quality And products XXXX high and and shareholders down consumers. come delivering in

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

Operator

you. from America. line with Bank George Instructions] Please first ahead. question Thank the is go phone of [Operator Staphos Our of

is line Your now. open

George Staphos

of I filled to to talk you. region? early you the destock? are I think -- first product the that, but Good had, kind thank that guys? with reverse for the on Hi, needs in you trends question be what congratulations How across year-to-date, there Hi, quarter would Thanks notable the performance. can everyone. relative morning. engineer are And regions have third full-year to haven't any you guidance any the left volume and details, I volume -- seeing guess, you tried the about the

Dan Fisher

Yes, terms think we're than thank I they've more net that. that look within a through the space, there's now mass There inventory. you. space where one in of on our the is goods In on Clearly, a right to that's little portfolio working the you'd customer others, energy filled commented basis. at bit got and I some think have beer

in space slower in rate North the America space. is energy of at a growing balance our customer that than largest Our

normalizes, the scanner so, And believe in that than That based our we is QX we on data the projections sales. shipment reflecting more growth have.

Nothing George. notable. We're spot, good inventory in really a

can You in that cash QX. generation see reflected in our

of really this softer so nothing You for is news there's always have, there. South period America, the

the inventory of quarter the expect then here part back the peak for that start to half world. building to in against execute quarter season We and of the

as So absent mass player, the not much. obvious beer

George Staphos

what at getting to actually, seeing And Okay. I in America. some you was were what South degree was

done needs would vantage your from if -- you level. at the big America, That customer of that not South get de-stocking, anything, fair? amount in So point, a to be

Dan Fisher

No, we've running. been

George Staphos

go -- sorry, large you I'm ahead. than Other

Dan Fisher

Yes, meaningful that's South correct. nothing There's America. in

to always you're You level there's in maintenance run always and QX. always doing curtailment a of get,

If just already out builds, you're full you're fiscal it South more year typically inventory a of usually you end selling America. inventory to be in have planning there's through that effect, to shows so, of because heading at in things that have The lot not QX, to into the And inventory, down room run in QX. build a our if up running additionally going QX. bit you aren't

the inventory-wise. and That quarter. that inflection the we teams was showed the and managed a tremendously, in the up heading in position So that that The the persisted we're throughout even quarter. commented into really plants something mass beer with good quarter

George Staphos

to sort I'll fair it asked question I you just for Okay, be the that. and come as to part follow I down Dan, back and else. step of to everybody thanks to want ask of then to

the possible? seen in research uptick number can So if and on contacts, then you volume-wise that an put in the And promotional a seeing regions we've quarter you trends activity. are that's across what if talk from about, early our

into How you're necessarily the pickup in about that level and a seen of you haven't consumption think yield us have yet. promotion XQ? promotion would efficiency the and seeing on the We

of beginning finally, why, you some the the rest case, seeing if beer uptick of And Thank would just based that's in scanners are to continuing confident and some the we we're about be what see on that out you. the year?

Dan Fisher

Yes, good that's a question.

out see the elements Let can that. I if parse of me

winter behavior nothing because North Let's in of QX. There's still to there. or half South really way in second We another see one America it's until wouldn't of look that report the inflection America. at terms

nothing report planning pretty our They're conversations we've So be there than having I'll now, a customers. we're next Again, -- the inflation experience and relieve first starting and volume comment in higher previously. what Brazil We've inflection is Brazil other nice the right heading rates. down into Bullish a of with to which against to deliver week. to to that on this recession of on interest into Brazil. They're QX was that. the some go modeled

the question South only all the year out obviously contemplated of going In but out with North customers full very most our plus our comments combination manifest. hope. still and throughout disclosed that, relative and what our what comments I running on stronger hedge thing beer around mass in both as America half mark the the for that is public is been is quarter. America, is we in the to previously playing the by So Scott always we believe One that The of dynamic. of third positions, the and Brazil have quarter seeing been we've to are and and And is even back in around have they second Argentina, confirmed second of the were beer in quarter customers. we would

if capital goods. filled a mixed working shift taking that's place, come So to from going or there's it's

experiencing. will believe won't data we're be We retailers. a reflection at one-to-one there be scanner necessarily the that of So resets what

opportunities on Some for customers space on to up elevated shelves, more that a the or into they're bigger positions of shelves or have gearing step shelf velocity that.

increases that until promotion, two been way off contemplating mind. promotions over our is the And in many you correct. staggering we're has that last instances, coming in how see quarter promotion think numbers. really I the of characterized, terms fourth won't is in price The years. keep the There You in it

share. until volume and not will that of activity. more customers, data. intentionality catalyst elasticity conversations something results be certain What is the new So, always comps That the It's the having trigger, it of And as about seen about that push for customers a in to it's right much find that our see thought intended more QX and seen signal volume. and a happens volume. last years. fourth given momentum. category CSD as the similarly. that is they gain inclined we've we've But until have of volume the drive In the we generally is label what doing momentum. seen momentum not lot with promotion, to volume they we've I it price quarter, volume they're those thinking for of couple And would is to private driving think same they're the relative I

will to I like think to private they that more share need they it I means and aggressive, that don't losing to be know label. be

that's excluding Europe a grow. and versus sequential Russia. growth of So be how that's exception viewing in very but expect within our portfolio will standpoint, QX. second last we believe, continues We it, negative. modeled to good quarter a to to commenting, there, deal from the previous, it. year. we're with had mass beer how see continue I'm Slight in QX, uplift great a lot a we've of We that's QX don't

will was the for us and step half the into that our line up. really grow as plant to is new year. us digits, still but needed with We in in growth the of system back ramps continue delivering to capacity over against alignment everything The mid-single

George Staphos

Thank you, Dan.

Dan Fisher

you. Thank

Operator

Thank you.

of with Please Pettinari Citi. Our Anthony is the from ahead. next question line go

now Your is line open.

Bryan Burgmeier

is the for aerospace Thanks on your many, spinning question. you've Scott, been of years. or Dan, many actually Anthony. selling for Bryan asked about for Hi, this Burgmeier possibility

is strategic why something returns? Ball change you why now add the Did any now? Is aerospace capital maybe for it allocation for and review? detail about the So, can business? Just or this there happening for

Dan Fisher

believe could ago if back you more healthier, versus Those five own. a It's that it performed could business why of you We stand an and much gotten it's much to now business. really this asset. are cruxes the today, case. the point has is for else business potentially years was look and much is, do valuable on bigger, key fundamentally why the incredibly its profitable, where something with a manifestation that Yes, tremendously

process know. It's are a I've nothing a when ran about, we validate If to valuable capital and indications threshold. that. Early talk you so, allocation return to and more And business. let it value that is got really I'll we just It's so. right our for long-term it's is increasingly the generation. is asset. valuable a sitting shareholder equation look need in at that make that spot to always It the asset and And sure about

Bryan Burgmeier

developments maybe think a of is, being here of follow-up brewers some have during and now? Dan, quarter, benefits of sense the you kind are mix start the right well you when talked points we by the of other kind of in quick are One Ball where very Do about you. the chain see I displaced U.S. exposed Thank to in that Understood. doing process the being retail and to beer. supply that customer

Dan Fisher

in been posed. those retailers. of significant There's the of minimal QX retail movements know reset happens very displacement. being kind in heading major in the I of that are There's across questions the most terms a QX tail

Probably manifest. of will until shakeout the XXXX happen. net of all this fully the So see impact you not half will first

changing anything the will be their things settle new the But the retail, not And of in take then gearing entering first see over have to out. start chains. XXXX, will positions half these third to where to course retail in into looking They up the that the position of you start So QX, QX. a quarter. at customers supply opportunity broader will they appreciably I'm be

Bryan Burgmeier

a Thanks it lot. Understood. turn I'll over.

Dan Fisher

Thank you.

Operator

you. Thank

the of Goldman go Sachs. from line is question ahead. next Please Our Samuelson with Adam

open. line Your is

Adam Samuelson

everyone. Yes, thank you. Good morning,

Dan Fisher

Morning Adam.

Adam Samuelson

back easier XX% kind a of it just potential drives think actually that to question help guess at point think help of long-term qualifier volume achieving? some in XX% half guidance quarter Good a the that further this the comps end And versus more a the and range. of of and magnitude as the in outcomes of about me just the is introduction the qualifier? that range beer? kind kind drive Or just the of U.S. of uncertainty morning. we disruption Or I bounce about on, of there with it the kind to me. think be of low was Is Maybe potential new around starting the

Dan Fisher

wouldn't it persistent quarter. to of I as further third It's mass beer. characterize through the be deterioration going

a our yes, of that is some to year but at allowing standpoint, nothing's us benefits, from accomplish next softer. the everything the PPI of third pass-through, operational the at that so, performance, of quarter to The sites what it's to And days, what inflect. that tailwinds to in change standpoint, line we set versus terms here savings, from of going news mass meaningfully, anticipated we're experiencing, low fixed SG&A the volume actions, beginning have inflationary a And we is a out probably the cost the all in end. beer XX the good

We operations belief end characterize our there performance wouldn't without be be right the wouldn't we -- in able that to the low without the of now.

we in We've what's mass and We've Brazil. then So, mass CSD think, one market. and is peak fourth volume. talked beer, an also talked in the going a the season it about, of believe economic in about an inflection the every South quarter environment improved in in happen there's regions, in beer, with America to I

were mass North to already beer those America. wasn't of but in things is in have baked in. through, All come baked they What

Adam Samuelson

it. Got

in by known do XXXX to is that it of customers? channel that back one the as as that from of incremental present shifts you big some you makers -- of captive of disproportionately look Now, context, the your if that's Or the working with rebounds, guess to can obviously, about mass one about start think helpful. And potentially could that? are And grew the volumetrically, very share in you and at think that opportunities. gain XXXX market some beer think customers, I start you

Dan Fisher

going come makers the the in their believe the we've the what where prioritize go forward can issue, position don't they're to bottom we've an will assets. a particular got stable in Obviously, to I agreement that's having that benefit. short One is. captive term marketing understand we No,

And point, And we are able so, see if of around. with in they're to that, turn the we off your inflection then to space. everyone should beer

for XXXX. QX now. see a of QX bit would should net and benefits we right a trough characterize So as into I us

beyond. beer happens sure So economy relative large, and mass and there's what optimism that, XXXX the writ the for for reason in clearly and to then space in

Adam Samuelson

right. All Okay.

it Now, that pass helpful. color I'll is very Thanks. on.

Dan Fisher

Thank you.

Operator

Thank you.

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

is open. line not Your

Christopher Parkinson

you how I back There's been substrates. everything to for XXXX like that, that just much. the consider? and the glass there, your so progression macro Brazilian parts step we just various Thank of already of circle during we Great. kind the which fourth debates highlighted the moving thinking going the press be the and you the in and quarter Thank potential about it normalized and because of they're have evolution plethora want the you a highlighted like is of the release. a Obviously, kind relative on. Can just highlighted in about terms rebounds to to should volatility market back you. recycling, some rebound which cost take of packaging in seems

Dan Fisher

Yes.

way recessionary been we've is XXXX in last had digit inflationary all an the what the Two experienced high here saddled thing second times glass shift today. the or stated what we've of half we've in when similar three single that through of clearly to environment, couple the years. So returnable range. country, five with same seen macro in We events to Brazil's shared which from environment,

lot aluminum it that the per with with of point by positions customers. in to a it do aluminum, hedge of price -- the lot package to the do has unit were As constructed our economics, the has of

the inflation coming come come the has off, declining, are positions rebounding, rates interest have aluminum of cost off. hedge The is economy is off,

normalize So, mid those should things low all penetration of Brazil. point back in XX% XX%, we to to can

betting QX, and in XXXX. we're So penetration QX improving in on stabilizing QX can for

always now, the preferred a work and customers. improved would cans, preferred think I period, that economy ton a has XXXX to glass inflationary of done took the on place about which back principally choice shift but come choice haven't it's returnable right and our that's during because of We an

We to expect the same thing happen.

QX, process It's but see that it's year too the winter given, early and we into movement to in anything, me, much there given into QX Hopefully anticipate more in tailwind excuse that if helps. QX. in the

Christopher Parkinson

for on flowing then back. and your Of there. coming been course, and market? bit, mean commentary understood. been very optimism your promotional And competitor euphoria at go you. and for that do this and a volume Thank of what waning, then actually North how regarding customer think least follow-up we some and little second the market start American half? a mass to from about just CSD and year actually a lot there's There's How excitations on quick various that your but in beer are base is the you I seeing commentary outlook the in euphoria

Dan Fisher

volume that momentum year share right, of in the over activity does CSD There build increased terms from has in volume We four We with momentum. private weeks. on much the three see move year. we the promotion. more to volume though into been still hasn't major in activity shift began We label the promotional comps. the are when challenging that. there's you're first happening We generate didn't thought wouldn't It been not the there but anticipate QX even enough players momentum of would And quarters expectation volume. promotional in activity, last come

yet. momentum the manifest the movement the is don't quarter. manifesting as promotion a appreciable the it's our result of see point what built that, not goes That but and is in encouraged into because I'm plan quarter, in folks into usually in off light third year will differently happening, behave but a fourth to your that any that bulb we heading I volume

Christopher Parkinson

you. color. Thank Helpful

Dan Fisher

Thank you.

Operator

Thank you.

Please Panjabi go from question Ghansham is next ahead. with Our the of line Baird.

Your line is open.

Ghansham Panjabi

morning. guys, good Hey

Dan Fisher

morning Ghansham. good Hey,

Ghansham Panjabi

X% delta know bit anything Is beverage a to Central going is morning. purely volumes step first on XQ lot then mass beer and X.X. roughly quarter just food was is the on. else a there down or North a going little Good worse that packaging perhaps that If you and back down America, in basis? know were Obviously and you year-over-year

Dan Fisher

the I impact into lends net think previous CSD in on pretty my sector. and trends stable it beer across it of were It's characterized quarter. the second comments the everything correctly. kind There you

performing all You almost line fell with categories mass and the in are exception the know energy off. of continues year-over-year to -- beer that

I first think net, there of X.X have and in minus was obviously growth down. the points mix negative quarter, weighted further net X.X us our points would

Ghansham Panjabi

in Okay. terms Thanks about of was the that multiple are What and clarifying year managing regions. for for of and that terms of then the thinking curtailment you supply for number that in well? XQ as you're doing half cetera across the how that back et

Dan Fisher

what The planned we in America what is that it's versus terms negligible candidly in mean planned. of happened. actually XQ exactly the curtailment South in we I curtailment

more what you what You curtailment beer that versus year Apart entered additional will little in what curtailment that got that quarter that entered the bit just and of we've expected. could we year a quarter. manifest alignment the everyone's third confirmed delta mass say with and from Apart the that with that the from was volume because throughout phenomenon. took the we second we with the in we

Ghansham Panjabi

one. then And you. just Got one final

constructive what Europe this based seen generally packaging side you've on on so beverage seem You far on year.

for so and the in to on your news. some European of changed weaker is forth. the much beverage of Has It the so all trade-downs the commentary it and outlook and terms or of macro Europe seems can specifically just consumer spending judging pretty the much is at just same? by the in and as relates it like view Just terms

Dan Fisher

on-prem a continue standpoint. even shift position. The The trade-downs where heavier us shift Beer opportunity it helped current of a just outlook is softer portfolio term helped wealth Beer -- more you terms the some of for -- the has portfolio has The pan-European of energy, year think CSD. our can of We've from been there in because substrate than consumer generally the weaker has cited. end are absolutely the the the long diversified from benefits us a got the category, off-prem us. that for heavier everything entered but term I been our to and is given medium has beneficial. we

so We're little that's second comments maybe the growth still nice we softer. And that's see yes -- to going business we of we're to than put been more see bit given and the the there. extremely area perform well. see But that of still out opportunity some a half continues consumer going other been year that in to

Ghansham Panjabi

Thanks so much.

Operator

you. Thank

Our line of go is Mike is open. from your next Truist question Security. ahead with Please the line Roxland

Mike Roxland

Thank you, questions. Dan, thanks my and taking for Scott

Dan Fisher

Mike. bet You

Mike Roxland

beer end exposure here well the your as on about right jump thinking How might I just the over are mass going ask portfolio your and question just you know. you forward. and market

the made I could you that you so, shift think comment some you year XXXX. until shares see know some later this

not mass there beer probably know recovery out and your are if isn't possibly in dead happens your to then volumes improved you what but volumes see mass could you beer So then. that

that you're you're yourself said potential then. other press other experiencing on you recover product happens your to comment to that a is, guess mass so trying made are with considering or have production beer actually And maybe beer minimize trying categories. And you trying what so, forward exposure volumes in align go release relative the mass that to really assume to higher a I categories to growth, the basis. more question means, your shift one, I to that doesn't let's are shift that two, your customers to really

Dan Fisher

related North all this me, Mike I'm there. start I'll let is so assuming, Yes America

consistent is trough will a which so talk and about is we're at beer categories, I an awful which it nearly down, XX just all within spending category, is is down the this Let's on because lot that believe domestic of the time commentary domestic we're recover X.X% from weeks last a versus X%. with further customer XX weeks, space. point of down it's which But and beer the

are S&B up obviously there's is up up marketing is up non-alcoholic XX%. issue, acceleration is the XX%, , decline X% ready beer beer XX% cider of because So cocktails to is XX% up an of drink the but import

we've but As our to continued weeks should lot expect the to the to great in is third win companies, transition I given the market, in a only will quarter now experiencing be question. put should the everyone with they're a that and market. customers benefit phenomenon on we know, shelf experienced XX that second because evolution that going going we the forced there's we first would that of past At participate to win trough seen stuff XXXX sells. We here quarter half that from for with be the We've benefit in and It's in we're to improve the repositioned of the percentage? beverage what this year. of half whatever's don't the throughout the first going

and into beer questions. more be But of to going home. shelf gut population confident world a folks their well sell that they already that to grow. import number. add going real plans but lot find these all they continues customers The that's to and will understand need know putting on lean have I'm a that change to They to candidly that capacity. from there's are Nothing's Hispanic t stuff the to

And accelerate. we're them. So there's folks obviously to for very an ability to close those

show forward to going up moving first encouraged. beyond. I'm encouraged the I'm today of So and half XXXX From in what's

Mike Roxland

for the Avital [ph] you just I Thank Venus, that. George. production you Got think then one question restarted And recently and color. quick

you think a lost and taken that to customer contract. the plan weak And also was so down because due macro wondering, I

the up them or demand. done business? anticipation because think your So I Just within and Did to last and Brazil you month better And new wondering of restart bring so? was win you've of went wondering why plant restart. the is you need that up

Dan Fisher

in the originally we for it further will We're that that's further tail anticipate winning market and up one one filed take share result for up that as bringing QX, customer customers for. and the that win we we're that Yes. for other the that of are hands they brewer built the But bringing bankruptcy a not who end issue. at it of

Mike Roxland

it. Good Got for luck clear. second half. Very

Dan Fisher

Thanks much. very

Operator

you. Thank

RBC Our is with of Viswanathan Capital Markets. ahead. the Please from next question Arun go line

open. is line Your

Arun Viswanathan

on more a things. two just Yes, ask wanted thanks I for my I taking bit to question. guess little

year, easier digits the and digits the you side to So next volume year, single look first North comps you of on in when do and the for off, relatively America. mid-single have down back half for the into year high already next

that So maybe year's are range the, settle into would should next growth? any considerations back we digit that volume range? and how single to when other low thinking low single allow digit And capacity for into there you volumes say, get consider evolve that your about

Dan Fisher

question. the for Thanks

continue to time here that think and we will growing, America, lot whole haven't persist. growth both Europe on given As spent sit XXXX, we believe a we for of today, I South they're

stated question the in be we're but several think obviously a trough. and will at I North America, I times QX So call, mark as this QX

will periods. territory. over into to volumes So see that improved we growth believe I these should be us push enough

two last place enough the XXXX. to and we've aggregate growth that yes, So stated for is put the several will the also that capacity that over into is position your we answer grow the question three range. I in be We've at low to digit to in believe times years single

so, We've next lift standpoint. having spend beverage should of nice and over much a we the growth from And business the CapEx to in additional anticipate capital. spent I performance the terms need growth in we two growth without years profitability and see capital don't

Arun Viswanathan

imagine that be couple you to spend? about you cash opportunity And the could nicely from I so base. you XXX touch on plan when of that next over up well with it that that just comp, as capital as Could years think free guess, flow, the I

Dan Fisher

I'll Scott. have Yes,

Scott Morrison

Yes, spend just this I we're mean, capital, $X.X you're less a right. to billion I exactly put year. can get better. No, up going

expected go we're to depreciation. closer to year, down GAAP Next

go So can shareholders. flow to that back cash up all freed

it I better. So gets think

Arun Viswanathan

Thanks.

Dan Fisher

you. Thank

Operator

you. Thank

is with ahead question is go Please of Jeffries. next line the line open. from Phil Ng your Our

Unidentified Analyst

Good morning. providing Thank you and details. guys for This taking the time is Phil. for John on the all

Dan Fisher

John. Hi,

Unidentified Analyst

that's been this the to supply at of now globally, business? I bit, have time you just, kind want to falling I in customer mean, overall you in beer know in the start been American X.X% Hey. with market by death in a America market. worse called chains your where is pressure but contract with obviously, or beaten But experiencing mass vastly shift on North over obviously the out, capacity point much declines. North demand any to additional the quarter, down kind the obviously ease than of and volumes that's it's little driven the I the

Dan Fisher

this on pressure point. No contracts the at

I be of passing mechanisms. through inflationary commentary the we're would that a think that good reflection fact the

think revert the way So, for relative quarter quarter the That if you decline of would weren't could beer. the we're mass negotiation the third dislocation the half probably of that's some could I second I curtailments seeing meaningfully the but of you that or that's And to will place. shipments half in more short-term volume, second not come correction because through, first there's a I XXXX. year, look and at in think case. see that taken The been in

The that we've we've done managed other inventory. thing to is

We've built we last too that So much inventory worked year. off.

be level closer XXXX. closer and data versus to So be of been curtailments likely much an relative scanner to XXXX lot there's data. a elevated We'll in to to running QX scanner

the well are customers. those with that the and our things within industry are So understood

excess the think participant intentionality heading I all XXXX. tighter marketplace cash, the much underpinning those believe what industry of versus I into the of XXXX growth moving a stabilized in with every things is theoretical capacity to running versus into reality a,

Unidentified Analyst

for Understood. Thank you details. the

Dan Fisher

Thank you.

Unidentified Analyst

you touching in taking just Could then of divestitures you're part I you efforts. about call, more that if to the maybe were meant for bit do actions on maybe or, were think leveraging little to? said And just smaller that talk what efforts? some I a leveraging the the referring other you accelerate heard If that you early opportunities exploring the, you still correctly

Dan Fisher

what of we here know, a as, cash. of half back were we generated the We're cash the you to we've year. referring a lot No, in sitting out have of lot

flexibility whatever we pay piece to you down so And down. want the pay debt know, have to, of the we

that's And really so about. that's what

Unidentified Analyst

you Understood. much. Thank very Okay.

Operator

you. Thank

go Our of Gabe Wells from ahead, Securities. the Fargo line with next is Hajde your line is open. Please question

Gabe Hajde

good Dan morning. Scott,

Dan Fisher

Morning

Gabe Hajde

there's disruption? have because don't but what we Can and maybe X.X% just perfect, anymore a I into maybe lot here, in of cover market decline I ground lens the guess, embedded question soft been and parse then on between market related of, the what's in And half. share the the being with the in mean, second maybe volume and what's then appreciate the going a is. Europe. that another beer you quarter data out access to I between the kind second shift industry sort the of

function decelerated quarter. I need. a in the second the I'm if capacity think curious that you having of not volume that's

facility the the Czech about UK talked You up. obviously ramping and

half driving if to what's for So, the optimism recover. that's your second curious I'm just

your business part about pretty I'm is what's of of customer Europe bit maybe the talked North little optimism because driving understand contracted. big being in assuming Is sell largest America. over on You a energy the help weak based a through in or just me customer They're sort in Europe. that

Dan Fisher

maybe with Europe. Everything coming into we the line start what beer. anticipated energy one softer the is heading me that's The area Yes, let player. large year. Inclusive is in with of

I think macro there. that's related environment to the

happening bringing to the a growth. is capacity. that's space. It's That's the year on capacity in we be it's in not So closer And in mid higher be to the being digits, areas. are The the of utilized a that's anticipated that single nice on Europe. single beer little function going the digits less having to going still what's capacity brought but growth the

had Relative in mentioned, to first you as we a roughly America, decline, X% the of quarter. North

the range that in are We for second. decline in eight and a half

the indicator will the to We What in some happens third is with be see return declines beer the flat? overweight it in the space is and one it that's customer beer fact that growth? mass it fourth. of mass momentum a the in will beer volume to space the in within we're space. Is that But fundamentally, impact the it and is overweight

delta. the that's So

Gabe Hajde

have America? last explicitly. was flip for what in. the one, ask And Do didn't can the I you in North down then I market Maybe sense if any question Okay. it

was talk I think championship, of $XX think some evolving Cup's Can maybe sort that good improvement of how and going thing embedded million for was in year-over-year basketball I business, expectations product. is there the a into business you for that that XXXX? there was about

Dan Fisher

overall marketplace I America slightly, Yes, North in the down think X%.

the there. Cup delta that between And mix on we're our the seeing And then so delta incremental side, customer the improvements. is and really

would plastic cups. and the regulatory think service banning I space, our contemplating environment better, Denver or with well of now little have helped and Hawaii are way Series cup traction food making terms good breaking on it mid-Atlantic's LA the as in single-use product an things the or either not, but that banning Boston good the ground a Miami versus a Series believe in

we for more $XX second that half looking we're million make improve that year. year-over-year, a not I in in the trajectory improvement we it $XX So the to over would but of say the million will range. against continue business will

Gabe Hajde

Thank you, Dan.

Dan Fisher

Thank you.

Operator

seeing at further And you. no the Thank moment, question lines. this I'm on phone

Dan Fisher

much. very right. All Thank you

enjoy We will to again you third the talking in summer. rest look Everybody forward your to of the quarter.

Operator

ask you Thank lines. that your gentlemen, for good We thank and Have you. and Ladies a does please your participation call. disconnect day. today's that conclude you

Ball (BALL) 3 Aug 232023 Q2 Earnings call transcript