Ball Reports Strong First Quarter 2021 Results

WESTMINSTER, Colo., May 6, 2021 /PRNewswire/ -- Ball Corporation (NYSE: BLL) today reported, on a U.S. GAAP basis, first quarter 2021 net earnings attributable to the corporation of $200 million (including net after-tax charges of $40 million, or 12 cents per diluted share for business consolidation and other non-comparable items), or 60 cents per diluted share, on sales of $3.1 billion, compared to $23 million net earnings attributable to the corporation, or 7 cents per diluted share (including net after-tax charges of $179 million, or 54 cents per diluted share for business consolidation and other non-comparable items), on sales of $2.8 billion in 2020. Ball's first quarter 2021 comparable net earnings were $240 million, or 72 cents per diluted share, compared to $202 million, or 61 cents per diluted share in 2020.

Details of comparable segment earnings, business consolidation activities, business segment descriptions and other non-comparable items can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release. References to volume data represent units shipped.

During the quarter, the company increased comparable earnings per diluted share by 18% on 8% global beverage volume growth and maintained strong aerospace backlog. In addition to focusing on team safety, the company's EMEA and South American beverage can businesses experienced notably stronger comparable earnings, the new beverage can manufacturing facility in Glendale, Arizona, started production and the Ball Aluminum Cup™ began national rollout distribution at retail late in the quarter. Significant demand growth for sustainable aluminum packaging continues to outstrip global supply and the cadence of capital investments to address contracted customer demand is accelerating.

"Positive momentum continues across our company despite anticipated startup costs and isolated operational impacts in our North American beverage can business due to winter storms and aerospace customer supply-chain disruptions experienced during the quarter. Global projects in North America, South America and EMEA are expected to add at least 25 billion units of contracted beverage can capacity by year-end 2023 (off a 2019 base of 100 billion units), projects are on track and will contribute meaningfully to 2021 and beyond. Our focus remains on our employees' safety, training and development, the efficient startups of EVA-enhancing capital projects to serve our customers' growth, the successful retail launch of the Ball Aluminum Cup™ and delivering value to our stakeholders in 2021 and beyond," said John A. Hayes, chairman and chief executive officer.

Beverage Packaging, North and Central America

Beverage packaging, North and Central America, comparable segment operating earnings for the first quarter 2021 were $140 million on sales of $1.3 billion compared to $146 million on sales of $1.2 billion in 2020.

Comparable segment earnings reflect 6% volume growth, the benefits from new contractual terms and higher specialty mix being more than offset by startup costs associated with three new manufacturing plants and the impact of lost production from winter storms.

Demand for aluminum beverage cans and bottles continues to outstrip supply across North America. The company's new Glendale, Arizona, facility successfully started up during the first quarter, and the company anticipates the new Pittston, Pennsylvania, facility to start beverage can production by the end of second quarter. The company further anticipates Glendale and Pittston to exit 2021 with four lines operational in each facility. As needed, both facilities are scalable to add incremental capacity throughout 2022 and beyond to serve consumer's growth for sustainable packaging, new product introductions and to offset cans currently being imported.

The timeline for the company's recently announced construction of a new aluminum end manufacturing facility in Bowling Green, Kentucky, has been accelerated to align end capacity with even higher can demand. Bowling Green end manufacturing is now scheduled to begin in late 2021. Full-year 2021 startup costs are still anticipated to be in the range of $50 million.

Beverage Packaging, EMEA

Beverage packaging, EMEA, comparable segment operating earnings for first quarter were $100 million on sales of $796 million compared to $68 million on sales of $669 million in 2020.

First quarter comparable segment earnings reflect 5% segment volume growth, improving specialty mix and strong consumption trends in the U.K., Nordics, Egypt and Russia. Packaging mix shift to sustainable aluminum cans for traditional and non-traditional beverages continues to accelerate, and demand is outstripping supply. Despite protracted country-by-country COVID-19 lockdowns, additional beverage can line investments in the U.K., Czech Republic and Russia are largely on track to support regional contracted demand in 2021 and beyond.

During the quarter, the segment launched the world's first ASI (Aluminum Stewardship Initiative) certified can with a major customer in Spain. The cans are certified according to ASI's standards for responsible production, sourcing and stewardship.

Beverage Packaging, South America

Beverage packaging, South America, comparable segment operating earnings for first quarter were $93 million on sales of $487 million compared to $63 million on sales of $405 million in 2020.

Segment volume ended the quarter up 14% and specialty mix also increased to more than 65%. First quarter earnings reflect favorable price/mix and exceptional operating performance despite COVID-19 recurrences across South America. In Brazil, demand remains very strong and continues to outstrip supply as recyclable aluminum beverage packaging is favored over other substrates.

To support contracted volume growth and can-filling investments across South America, multiple can manufacturing investments are anticipated across our existing footprint in 2021 and beyond. The previously announced multi-line facility in Frutal, Brazil, is on schedule to begin production in the second half of 2021. 

Aerospace

Aerospace comparable segment operating earnings for the first quarter were $35 million on sales of $424 million compared to $40 million on sales of $432 million in 2020. Contracted backlog ended the quarter at $2.2 billion and contracts won, but not yet booked into contracted backlog was $5.3 billion.

Segment results reflect the inefficiencies created from certain customer supply-chain disruptions, timing effects of certain sub-supplier contracts, and costs due to COVID-19 safety and other protocols. The company continues to win defense, climate change and Earth-monitoring contracts to provide mission-critical programs and technologies to U.S. government, defense, intelligence, and reconnaissance and surveillance customers. Contracted and won-not-booked backlog are expected to rise throughout 2021 and segment earnings remain on track to achieve double-digit growth. Hiring to support future growth and multiple projects to expand manufacturing capacity, test capabilities engineering, and support workspace remain on track.

Non-reportable

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

First quarter results reflect higher year-over-year undistributed corporate expenses and marketing costs associated with the aluminum cup national retail launch. During the quarter, the company's global aluminum aerosol volumes increased low-single-digits and customers continue to pursue sustainable packaging solutions including the company's new Infinity aluminum bottle.

Outlook

"Global demand for aluminum packaging continues to grow. In 2021, we are allocating in excess of $1.5 billion in capital to support EVA-enhancing projects at returns higher than our 9% after-tax hurdle. As our cash from operations continues to increase and we maintain optimal net debt to comparable EBITDA ratios, we will accelerate return of value to shareholders via dividends and share repurchases," said Scott C. Morrison, executive vice president and chief financial officer.

"We continue to achieve at a high level due to our team's ability to adapt and work safely together. Our Drive for 10 vision and enduring culture allow us to successfully navigate short-term challenges and invest in long-term opportunities to enable growth for sustainable aluminum packaging and aerospace technologies. In 2021 and beyond, we look forward to growing our cash from operations and EVA dollars on an even larger capital base while returning capital to our shareholders and exceeding our long-term diluted earnings per share growth goal of at least 10 to 15%," Hayes said.

About Ball Corporation

Ball Corporation supplies innovative, sustainable aluminum packaging solutions for beverage, personal care and household products customers, as well as aerospace and other technologies and services primarily for the U.S. government. Ball Corporation and its subsidiaries employ 21,500 people worldwide and reported 2020 net sales of $11.8 billion. For more information, visit www.ball.com, or connect with us on Facebook or Twitter.

Conference Call Details

Ball Corporation (NYSE: BLL) will hold its first quarter 2021 earnings call today at 9 a.m. Mountain time (11 a.m. Eastern). The North American toll-free number for the call is 800-920-5564. International callers should dial 212-231-2909. Please use the following URL for a webcast of the live call:

https://edge.media-server.com/mmc/p/569qbar7 

For those unable to listen to the live call, a taped replay will be available from 11 a.m. Mountain time on May 6, 2021, until 11 a.m. Mountain time on May 13, 2021. To access the replay, call 800-633-8284 (North American callers) or 402-977-9140 (international callers) and use reservation number 21993264. A written transcript of the call will be posted within 48 hours of the call's conclusion to Ball's website at www.ball.com/investors under "news and presentations."

Forward-Looking Statements
This release contains "forward-looking" statements concerning future events and financial performance. Words such as "expects," "anticipates," "estimates," "believes," and similar expressions typically identify forward-looking statements, which are generally any statements other than statements of historical fact. Such statements are based on current expectations or views of the future and are subject to risks and uncertainties, which could cause actual results or events to differ materially from those expressed or implied. You should therefore not place undue reliance upon any forward-looking statements and any such statements should be read in conjunction with, and qualified in their entirety by, the cautionary statements referenced below. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key factors, risks and uncertainties that could cause actual outcomes and results to be different are summarized in filings with the Securities and Exchange Commission, including Exhibit 99 in our Form 10-K, which are available on our website and at www.sec.gov. Additional factors that might affect: a) our packaging segments include product capacity, supply, and demand constraints and fluctuations and changes in consumption patterns; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather; footprint adjustments and other manufacturing changes, including the startup of new facilities and lines; failure to achieve synergies, productivity improvements or cost reductions; unfavorable mandatory deposit or packaging laws; customer and supplier consolidation; power and supply chain interruptions; changes in major customer or supplier contracts or loss of a major customer or supplier; political instability and sanctions; currency controls; changes in foreign exchange or tax rates; and tariffs, trade actions, or other governmental actions, including business restrictions and shelter-in-place orders in any country or jurisdiction affecting goods produced by us or in our supply chain, including imported raw materials; b) our aerospace segment include funding, authorization, availability and returns of government and commercial contracts; and delays, extensions and technical uncertainties affecting segment contracts; c) the Company as a whole include those listed above plus: the extent to which sustainability-related opportunities arise and can be capitalized upon; changes in senior management, succession, and the ability to attract and retain skilled labor; regulatory action or issues including tax, environmental, health and workplace safety, including U.S. FDA and other actions or public concerns affecting products filled in our containers, or chemicals or substances used in raw materials or in the manufacturing process; technological developments and innovations; the ability to manage cyber threats; litigation; strikes; disease; pandemic; labor cost changes; rates of return on assets of the Company's defined benefit retirement plans; pension changes; uncertainties surrounding geopolitical events and governmental policies both in the U.S. and in other countries, including policies, orders, and actions related to COVID-19; reduced cash flow; interest rates affecting our debt; and successful or unsuccessful joint ventures, acquisitions and divestitures, and their effects on our operating results and business generally.

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SOURCE Ball Corporation