PR Newswire | May 6, 2021 06:01AM EDT

05/06 05:00 CDT

Ball Reports Strong First Quarter 2021 ResultsHighlights- U.S. GAAP earnings per diluted share of 60 cents vs. 7 cents in 2020- Comparable earnings per diluted share of 72 cents vs. 61 cents in 2020; an increase of 18%- Global beverage can volumes up 8%; specialty mix exceeds 49%- Contracted aerospace backlog of $2.2 billion and won-not-booked backlog of $5.3 billion- Successful start-up of Glendale, Arizona, beverage can manufacturing facility; four lines operational by late 2021- Executed national distribution of Ball Aluminum Cup(tm) at retail- Positioned to exceed long-term diluted earnings per share growth goal of 10 to 15% WESTMINSTER, Colo., May 6, 2021

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(tm) 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(tm) 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 StatementsThis 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.

# # #

Condensed Financial Statements (First Quarter 2021)



Unaudited Condensed Consolidated Statements of Earnings



Three Months Ended

March 31,

($ in millions, except per share amounts) 2021 2020



Net sales $3,125 $2,785



Costs and expenses

Cost of sales (excluding depreciation and amortization) (2,493) (2,215)

Depreciation and amortization (168) (169)

Selling, general and administrative (157) (131)

Business consolidation and other activities (7) (115)

(2,825) (2,630)



Earnings before interest and taxes 300 155



Interest expense (67) (71)

Debt refinancing and other costs - (40)

Total interest expense (67) (111)

Earnings before taxes 233 44

Tax (provision) benefit (32) 4

Equity in results of affiliates, net of tax (1) (25)



Net earnings 200 23



Net loss attributable to noncontrolling interests, net of tax - -



Net earnings attributable to Ball Corporation $200 $23



Earnings per share:

Basic $0.61 $0.07

Diluted $0.60 $0.07



Weighted average shares outstanding (000s):

Basic 327,811 325,346

Diluted 333,673 332,326

Condensed Financial Statements (First Quarter 2021)



Unaudited Condensed Consolidated Statements of Cash Flows



Three Months Ended

March 31,

($ in millions) 2021 2020



Cash Flows from Operating Activities:

Net earnings $200 $23

Depreciation and amortization 168 169

Business consolidation and other activities 7 115

Deferred tax provision (benefit) (2) (36)

Other, net (147) 58

Changes in working capital (703) (1,037)

Cash provided by (used in) operating activities (477) (708)

Cash Flows from Investing Activities:

Capital expenditures (363) (213)

Business dispositions 1 (17)

Other, net 14 (4)

Cash provided by (used in) investing activities (348) (234)

Cash Flows from Financing Activities:

Changes in borrowings, net 1 198

Net issuances (purchases) of common stock (5) (88)

Dividends (50) (51)

Other, net - (34)

Cash provided by (used in) financing activities (54) 25

Effect of currency exchange rate changes on cash, cash equivalents and (31) (78) restricted cash

Change in cash, cash equivalents and restricted cash (910) (995)

Cash, cash equivalents and restricted cash - beginning of period 1,381 1,806

Cash, cash equivalents and restricted cash - end of period $471 $811

Condensed Financial Statements (First Quarter 2021)



Unaudited Condensed Consolidated Balance Sheets



March 31,

($ in millions) 2021 2020



Assets

Current assets

Cash and cash equivalents $461 $801

Receivables, net 2,115 1,862

Inventories, net 1,399 1,354

Other current assets 262 224

Total current assets 4,237 4,241

Property, plant and equipment, net 5,570 4,499

Goodwill 4,416 4,270

Intangible assets, net 1,813 1,914

Other assets 1,943 1,621



Total assets $17,979$16,545



Liabilities and Equity

Current liabilities

Short-term debt and current portion of long-term debt$766 $522

Payables and other accrued liabilities 4,218 3,481

Total current liabilities 4,984 4,003

Long-term debt 6,941 7,476

Other long-term liabilities 2,500 2,366

Equity 3,554 2,700



Total liabilities and equity $17,979$16,545

Notes to the Condensed Financial Statements (First Quarter 2021)

1. Business Segment Information

Ball's operations are organized and reviewed by management along its productlines and geographical areas and presented in the four reportable segmentsoutlined below.

Beverage packaging, North and Central America: Consists of operations in theU.S., Canada and Mexico that manufacture and sell aluminum beverage containers.

Beverage packaging, EMEA: Consists of operations in numerous countriesthroughout Europe, including Russia, as well as Egypt and Turkey, thatmanufacture and sell aluminum beverage containers throughout those regions.

Beverage packaging, South America: Consists of operations in Brazil, Argentina,Paraguay and Chile that manufacture and sell aluminum beverage containersthroughout most of South America.

Aerospace: Consists of operations that manufacture and sell aerospace and otherrelated products and the provision of services used in the defense, civil spaceand commercial space industries.

Other consists of a non-reportable operating segment (beverage packaging,other) that manufactures and sells aluminum beverage containers; anon-reportable segment that manufactures and sells extruded aluminum aerosolcontainers and aluminum slugs (aerosol packaging); a non-reportable operatingsegment that manufactures and sells aluminum cups (aluminum cups);undistributed corporate expenses; intercompany eliminations and other businessactivities.

The company also has investments in operations in Guatemala, Panama, SouthKorea, the U.S. and Vietnam that are accounted for under the equity method ofaccounting and, accordingly, those results are not included in segment sales orearnings.



Three Months Ended

March 31,

($ in millions) 2021 2020



Net sales

Beverage packaging, North and Central America $1,296 $1,181

Beverage packaging, EMEA 796 669

Beverage packaging, South America 487 405

Aerospace 424 432

Reportable segment sales 3,003 2,687

Other 122 98

Net sales $3,125 $2,785



Comparable operating earnings

Beverage packaging, North and Central America $140 $146

Beverage packaging, EMEA 100 68

Beverage packaging, South America 93 63

Aerospace 35 40

Reportable segment comparable operating earnings 368 317



Other (a) (23) (10)

Comparable operating earnings 345 307

Reconciling items

Business consolidation and other activities (7) (115)

Amortization of acquired Rexam intangibles (38) (37)

Earnings before interest and taxes $300 $155

____________________

(a) Includes undistributed corporate expenses, net, of $26 million and $14 million for the three months ended March 31, 2021 and 2020, respectively.

2. Non-U.S. GAAP Measures

Non-U.S. GAAP Measures - Non-U.S. GAAP measures should not be considered inisolation. They should not be considered superior to, or a substitute for,financial measures calculated in accordance with U.S. GAAP and may not becomparable to similarly titled measures of other companies. Presentations ofearnings and cash flows presented in accordance with U.S. GAAP are available inthe company's earnings releases and quarterly and annual regulatory filings.Information reconciling forward-looking U.S. GAAP measures to non-U.S. GAAPmeasures is not available without unreasonable effort. We have not providedguidance for the most directly comparable U.S. GAAP financial measures, as theyare not available without unreasonable effort due to the high variability,complexity and low visibility with respect to certain special items, includingrestructuring charges, business consolidation and other costs, gains and lossesrelated to acquisition and divestiture of businesses, the ultimate outcome ofcertain legal or tax proceedings and other non-comparable items. These itemsare uncertain, depend on various factors and could be material to our resultscomputed in accordance with U.S. GAAP.

Comparable Earnings Before Interest, Taxes, Depreciation and Amortization(Comparable EBITDA), Comparable Operating Earnings, Comparable Net Earnings,Comparable Diluted Earnings Per Share and Net Debt - Comparable EBITDA isearnings before interest, taxes, depreciation and amortization, businessconsolidation and other non-comparable costs. Comparable Operating Earnings isearnings before interest, taxes, business consolidation and othernon-comparable costs. Comparable Net Earnings is net earnings attributable toBall Corporation before business consolidation and other non-comparable costsafter tax. Comparable Diluted Earnings Per Share is Comparable Net Earningsdivided by diluted weighted average shares outstanding. We use ComparableEBITDA, Comparable Operating Earnings, Comparable Net Earnings, and ComparableDiluted Earnings Per Share internally to evaluate the company's operatingperformance. Net Debt is total debt less cash and cash equivalents, which arederived directly from the company's financial statements. Ball management usesNet Debt to Comparable EBITDA and Comparable EBITDA to interest expense asmetrics to monitor the credit quality of Ball Corporation.

Please see the company's website for further details of the company's non-U.S.GAAP financial measures at www.ball.com/investors under the "FINANCIALS" tab.

A summary of the effects of non-comparable items on after tax earnings is as follows:





Three Months Ended

March 31,

($ in millions, except per share amounts) 2021 2020



Net earnings attributable to Ball Corporation $200 $23

Business consolidation and other activities 7 115

Amortization of acquired Rexam intangibles 38 37

Share of equity method affiliate non-comparable costs, net of tax 6 30

Debt refinancing and other costs - 40

Noncontrolling interest share of non-comparable costs, net of - 1 tax

Non-comparable tax items (11) (44)

Comparable Net Earnings $240 $202

Comparable diluted earnings per share $0.72 $0.61

A summary of the effects of non-comparable items on earnings before interest and taxes is as follows:



Three Months Ended

March 31,

($ in millions) 2021 2020



Net earnings attributable to Ball Corporation $ 200 $ 23

Net loss attributable to noncontrolling interests, net of - - tax

Net earnings 200 23

Equity in results of affiliates, net of tax 1 25

Tax provision (benefit) 32 (4)

Earnings before taxes 233 44

Total interest expense 67 111

Earnings before interest and taxes 300 155

Business consolidation and other activities 7 115

Amortization of acquired Rexam intangibles 38 37

Comparable Operating Earnings $ 345 $ 307

A summary of Comparable EBITDA and Net Debt is as follows:



Twelve Less: ThreeAdd: Three

Months EndedMonths Months Year Ended Ended Ended

December 31,March 31, March 31, March 31,

($ in millions, except ratios)2020 2020 2021 2021



Net earnings attributable to $585 $23 $200 $762 Ball Corporation

Add: Net loss attributable to noncontrolling interests, net (3) - - (3) of tax

Net earnings 582 23 200 759

Less: Equity in results of 6 25 1 (18) affiliates, net of tax

Add: Tax provision (benefit) 99 (4) 32 135

Earnings before taxes 687 44 233 876

Add: Total interest expense 316 111 67 272

Earnings before interest and 1,003 155 300 1,148 taxes (EBIT)

Add: Business consolidation 262 115 7 154 and other activities (a)

Add: Amortization of acquired 150 37 38 151 Rexam intangibles (a)

Comparable Operating Earnings 1,415 307 345 1,453

Add: Depreciation and 668 169 168 667 amortization

Less: Amortization of acquired (150) (37) (38) (151) Rexam intangibles (a)

Comparable EBITDA $1,933 $439 $475 $1,969



Total interest expense $(316) $(111) $(67) $(272)

Less: Debt refinancing and 41 40 - 1 other costs

Interest expense $(275) $(71) $(67) $(271)



Total debt at period end $7,707

Less: Cash and cash (461) equivalents

Net Debt $7,246



Comparable EBITDA/Interest 7.3 xExpense (Interest Coverage)

Net Debt/Comparable EBITDA 3.7 x

____________________

For detailed information on these items, please see the respective(a) quarterly filings and/or earnings releases, which can be found on our website at www.ball.com.

3. Non-Comparable Items



Three Months Ended March 31,

($ in millions) 2021 2020



Non-comparable items - income (expense)

Beverage packaging, North and Central America

Business consolidation and other activities

Facility closure costs (1) $ 1 $ (1)

Individually insignificant items - (2)

Other non-comparable items

Amortization of acquired Rexam intangibles (7) (7)

Total beverage packaging, North and Central (6) (10) America



Beverage packaging, EMEA

Business consolidation and other activities

Facility closure costs (1) (2) (2)

Individually insignificant items - (1)

Other non-comparable items

Amortization of acquired Rexam intangibles (17) (16)

Total beverage packaging, EMEA (19) (19)



Beverage packaging, South America

Business consolidation and other activities

Individually insignificant items (1) (1)

Other non-comparable items

Amortization of acquired Rexam intangibles (14) (14)

Total beverage packaging, South America (15) (15)



Other

Business consolidation and other activities

Rexam acquisition related compensation - (6) arrangements

Goodwill impairment charges in beverage - (62) packaging, other segment

Reversal of certain provisions in beverage - 11 packaging, other segment

Loss from sale of and subsequent adjustment to selling price of steel food and steel aerosol - (15) business

Loss on sale of China business and related - (23) costs

Individually insignificant items (5) (13)

Other non-comparable items

Share of equity method affiliate non-comparable (6) (30) costs, net of tax (2)

Noncontrolling interest's share of - (1) non-comparable costs (income), net of tax

Debt extinguishment and refinance costs - (40)

Total other (11) (179)



Three Months Ended March 31,

2021 2020



Total business consolidation and other (7) (115)activities

Total other non-comparable items (44) (108)

Total non-comparable items (51) (223)



Tax effect on business consolidation and other 2 17 activities

Tax effect on other non-comparable items 9 27

Total non-comparable tax items 11 44

Total non-comparable items, net of tax $ (40) $ (179)

____________________

The company recorded charges and revisions to previous estimates for the(1) costs of employee severance and benefits and facility shutdown costs related to plant closures and restructuring activities.

In the first quarter of 2021, the company recorded its share of equity method non-comparable items. In 2020, the company recorded its share of(2) equity method non-comparable costs, principally related to the provision of additional equity contributions and loans to Ball Metalpack by its shareholders.

View original content to download multimedia: http://www.prnewswire.com/news-releases/ball-reports-strong-first-quarter-2021-results-301285280.html

SOURCE Ball Corporation