Ball Q2 2025 Earnings Report

Ball EPS Results

• Actual EPS: $0.90
• Consensus EPS: $0.87
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: $0.74

Ball Revenue Results

• Actual Revenue: $3.34 billion
• Expected Revenue: $3.10 billion
• Beat/Miss: Beat by +$240.42 million
• YoY Revenue Growth: +12.80%

Ball Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 11:00AM ET

Ball (NYSE:BALL) supplies aluminum packaging products for the beverage, personal care, and household products industries in the United States, Brazil, and internationally. The company manufactures and sells aluminum beverage containers to fillers of carbonated soft drinks, beer, energy drinks, and other beverages. It also manufactures and sells extruded aluminum aerosol containers, recloseable aluminum bottles, aluminum cups, and aluminum slugs. Ball Corporation was founded in 1880 and is headquartered in Westminster, Colorado.

Ball Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Ball delivered 22% year-over-year EPS growth in Q2, with comparable diluted EPS of $0.90 and net earnings of $249 M driven by volume gains and cost management.
• Positive Sentiment: The company returned $1.13 B to shareholders through share repurchases and dividends, underscoring its commitment to capital returns and record free cash flow targets.
• Positive Sentiment: Global beverage can shipments rose 4.3% year-over-year, and Ball expects full-year volume growth above its 2–3% long-term range alongside 12–15% EPS growth in 2025.
• Negative Sentiment: North & Central America saw stronger-than-expected volume in energy drinks and non-alcoholic beverages but faced margin headwinds from product mix and Section 232 tariffs.
• Neutral Sentiment: For 2025, Ball targets a year-end net debt/EBITDA of ~2.75×, plans at least $1.3 B in share repurchases, expects ~$600 M CapEx, and aims to align comparable net earnings with adjusted free cash flow.

Presentation

[Operator]

Greetings, and welcome to the Ball Corporation's Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Podhoff, Head of Investor Relations. Thank you, sir. You may begin.

[Brandon Potthoff, Head of Investor Relations at Ball Corporation]

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

[Brandon Potthoff, Head of Investor Relations at Ball Corporation]

We assume no obligation to update any forward looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10 ks, our most recent earnings release and Form eight ks and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of non comparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations.

[Brandon Potthoff, Head of Investor Relations at Ball Corporation]

References to net sales and comparable operating earnings in today's release and call do not include the company's former aerospace business. Prior year to date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former aerospace business through the sale date of 02/16/2024. I would now like to turn the call over to our CEO, Dan Fisher.

[Daniel Fisher, Chairman & CEO at Ball]

Thank you, Brandon. Today, I'm joined on our call by Dan Rabbit, Senior Vice President and Interim CFO. I will provide some brief introductory remarks and discuss second quarter financial performance. Dan will touch on key metrics for 2025 and then we will finish up with closing comments and Q and A. Before we move on, I'd like to extend my sincere appreciation to Dan for stepping in as Interim Chief Financial Officer.

[Daniel Fisher, Chairman & CEO at Ball]

Dan has served as our Senior Vice President of Corporate Planning and Development since 2016 and has successfully led more than 25 strategic transactions from acquisitions and joint ventures to investments and divestitures. He also previously led our aerosol business as Vice President and General Manager. His deep institutional knowledge and proven deal making expertise have brought immediate leadership and continuity to our finance organization. In just over one month since assuming the role, Dan has ensured we're on track with our financial discipline, supported both our capital allocation targets and partnered closely across the business. Dan, thank you for your steady leadership dedication during this important time.

[Daniel Fisher, Chairman & CEO at Ball]

Turning to business performance. We delivered strong second quarter results and returned 1,130,000,000 to shareholders via share repurchases and dividends through today's call. This performance reemphasizes our opportunity to deliver record adjusted free cash flow and comparable diluted earnings per share in 2025. Aluminum Packaging is outperforming other substrates across the globe, demonstrating the resilient and defensive nature of our global business. We continue to monitor the ongoing uncertainties related to tariffs and consumer pressures, particularly in The U.

[Daniel Fisher, Chairman & CEO at Ball]

S. And we are confident in our ability to proactively manage these challenges and sustain our positive momentum throughout the year to deliver 12% to 15% comparable diluted EPS growth. Twenty twenty five second quarter comparable diluted earnings per share was $0.90 versus $0.74 in the 2024, an increase of 22%. Second quarter comparable net earnings of $249,000,000 were driven by higher volume and cost management initiatives, partially offset by higher interest expense and lower interest income. In North And Central America, stronger than expected volume performance was not enough to offset product mix and cost to serve headwinds.

[Daniel Fisher, Chairman & CEO at Ball]

Our team executed well, successfully serving higher than expected demand, managing the impacts of the Section two thirty two tariffs and mitigating risks despite a volatile environment. Volume growth was largely driven by strength in energy drinks and non alcoholic beverages. We remain attentive to the ongoing geopolitical landscape and tariff developments and are actively managing these dynamics. In EMEA, second quarter segment volume remained robust and segment comparable operating earnings increased 14%. Demand trends continue to be favorable, strengthening our confidence in achieving significant year over year comparable operating earnings growth in 2025, driven by sustained volume growth and ongoing operational efficiency.

[Daniel Fisher, Chairman & CEO at Ball]

In South America, segment comparable operating earnings increased 38%, supported by strong volume performance in Argentina and Chile. While the Brazilian market performed below our initial expectations, we expect to return to growth in the second half of the year. Our regional performance culminated in Ball's global beverage can shipments being up 4.3% year over year in the 2025. We delivered a strong 2025, positioning us well for the rest of the year. We recognize there remains important work ahead to achieve our full year objectives.

[Daniel Fisher, Chairman & CEO at Ball]

Our teams are committed to carefully navigating ongoing uncertainties and leveraging the resilience and strength of our global portfolio. We're laser focused on our updated goal of delivering 12% to 15% comparable diluted EPS growth for the year. And while mindful of the challenges, we have confidence in our team's proven ability to execute effectively and deliver meaningful value to shareholders. After a strong first half, we now anticipate 2025 global volume growth to be above the long term 2% to 3% range and expect all of our businesses to perform in line with or ahead of our long term targets in 2025. This reflects the durability of underlying global demand, the strength of our customer relationships in addition to the operational consistency of our teams across markets.

[Daniel Fisher, Chairman & CEO at Ball]

In EMEA, we continue to expect mid single digit volume growth in 2025 as the competitive advantages of aluminum packaging and low can penetration rates continue to drive share gains across the region. In South America, recovery in Argentina and Chile coupled with anticipated growth in Brazil and Paraguay is expected to drive volume above our 4% to 6% long term range in 2025. In our North American business, higher than expected volume growth across non alcoholic categories, especially energy drinks, gives us confidence that we will see volume grow near the top end of our 1% to 3% long term range in 2025. We remain confident in our ability to deliver volume growth in line with or slightly above the market in 2025. We believe the defensive nature of our portfolio combined with our strong customer alignment positions us well to navigate potential economic uncertainty.

[Daniel Fisher, Chairman & CEO at Ball]

With that, I will turn it over to Dan to talk about key metrics for 2025.

[Daniel Rabbitt, Interim CFO at Ball]

Thank you, Dan, and it's a pleasure to be on this call with you today. We anticipate year end 2025 net debt to comparable EBITDA to be around 2.75 times. And we will repurchase at least $1,300,000,000 of shares in 2025. Through today's call, we have already purchased 1,000,000,000 shares year to date. 2025 CapEx is expected to be slightly below the D and A in the range of $600,000,000 We anticipate being able to deliver on our target of comparable net earnings equal to adjusted free cash flow in 2025.

[Daniel Rabbitt, Interim CFO at Ball]

Relative to the estimated tax payments due on the aerospace sale, we expect the remaining portion to be paid in the 2025. Our 2025 full year effective tax rate on comparable earnings is expected to be slightly above 22% largely driven by lower year over year tax credits. Full year 2025 interest expense is expected to be in the range of $300,000,000 and full year 2025 reported adjusted corporate undistributed costs recorded in other non reportable are expected to be in the range of $150,000,000 and last week Ball's Board declared its quarterly cash dividend. As we look ahead to the 2025, we remain committed to operational excellence, disciplined cost control, and enhancing productivity across our global footprint. We continue to actively monitor developments in emerging markets and broader geopolitical conditions staying agile and responsive in a dynamic environment.

[Daniel Rabbitt, Interim CFO at Ball]

Our resilient defensive business model along with the proactive measures we've implemented to reinforce our balance sheet positions us favorably against external volatility. With a solid financial foundation and a clear runway ahead, we are confident in executing initiatives designed to deliver sustainable, high quality results and drive consistent long term value creation for the shareholders. And with that, I'm turning it back to Dan Fisher.

[Daniel Fisher, Chairman & CEO at Ball]

Thanks, Dan. Our business continues to perform well, driven by robust demand across our global network. Tight capacity conditions reinforce the critical importance of executing at the highest level operationally, ensuring we meet customer expectations reliably and efficiently. Thanks to the agility and dedication of our teams, we remain firmly on track to deliver on our financial objectives for the year, including achieving 12% to 15% comparable diluted EPS growth, generating adjusted free cash flow aligned with comparable net earnings and returning significant capital to shareholders through substantial share repurchases and dividends. While external volatility persists, particularly relating to geopolitical events and market conditions, the resilience of our business model positions us strongly to manage through uncertainty.

[Daniel Fisher, Chairman & CEO at Ball]

Our proactive steps to optimize our footprint, secure long term contracts and maintain disciplined financial management further bolster our ability to deliver consistent high quality performance. Creating long term shareholder value remains our top priority. As we continue to execute effectively, leverage our strengths in innovative and sustainable aluminum packaging solutions and manage our operations with rigor, we are confident in our ability to generate meaningful and compounding returns for shareholders through 2025 and beyond. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. Thank you. And with that Christine, we are ready for questions.

[Operator]

Thank you. We will now be conducting a question and answer session. Thank you. Our first question comes from the line of Ghansham Panjabi with Baird. Please proceed with your question.

[Ghansham Panjabi, Senior Research Analyst at Baird]

Hey guys, good morning.

[Daniel Rabbitt, Interim CFO at Ball]

Good morning.

[Ghansham Panjabi, Senior Research Analyst at Baird]

Could you just give us a bit more color on what's driving the outperformance in the non alcohol categories for the beverage North America and Central America segment, especially during the second quarter? And given the strength there and your obvious positive view on for the back half of the year for the segment as well, can you just give us more context as to why margins were down 140 basis points for that segment? I know you called out price mix and higher cost. Just give us some detail there.

[Daniel Fisher, Chairman & CEO at Ball]

Sure, Ghansham. Yes, I think the coming into the year, we did think that there would be more aggressive nature relative to the energy drink customers. And they got out of the gate strong. One of our large strategic partners is growing nearly 20%. So that was unanticipated.

[Daniel Fisher, Chairman & CEO at Ball]

And so I'm encouraged. There's some innovation in that category, probably more so than any other category, flavor proliferations and the right can mix, the right promotional activity advertising. So I think they figured out a recipe that's winning right now. I think the other thing in the non alcohol category in particular is we're seeing a lot of multi pack purchases that are connected to purchasing on promotional activity. The promotional activity is not higher than it has been the last couple of years, but people are buying connected to that.

[Daniel Fisher, Chairman & CEO at Ball]

So that's certainly good for the can. We continue to believe that those tailwinds will persist for the back half of the year. Obviously, beer is softer than we anticipated. Some of our customers in that category, some brands are doing a little better than the aggregate. So I think some of our mix has certainly benefited there.

[Daniel Fisher, Chairman & CEO at Ball]

And then just in terms of maybe transitioning to margin piece, certainly some inefficiencies when you're growing that fast unanticipated in the delivery of that. Yes, we highlighted mix, less beer, more non alk is lower margin for us. So we will take the volume growth and I think we just need to figure out how to more effectively and efficiently deliver that, The spike in the one customer in particular growing nearly 20% created some pretty inefficient service model and delivery schedules for us. And then there is a little bit of mix related to tariffs, a little bit of a drag on that. So we'll see that kind of level off here quarter to quarter, but that didn't help.

[Daniel Fisher, Chairman & CEO at Ball]

So I think somewhere in the neighborhood of $10,000,000 worth of all of that was a drag and just our inability to deliver in sequence on time from some of our faster growing categories and then a bit of a drag on the tariff.

[Ghansham Panjabi, Senior Research Analyst at Baird]

Very helpful. And then for my second question, you're on track for a new high watermark on EPS. Last one was 2021. It's been an oscillating journey since then. As I look at the segment distribution, North America is at a high watermark in terms of earnings margins, I should say, and I guess earnings.

[Ghansham Panjabi, Senior Research Analyst at Baird]

What about Europe? I mean, Europe's had a good spurt in terms of growth. It's been very consistent. Is there any reason why Europe cannot benefit from a margin expansion standpoint to the same extent North America has relative to what you delivered in 2021? Thanks.

[Daniel Fisher, Chairman & CEO at Ball]

Yes, Ghansham. I would say, I wouldn't expect margins to improve, but the operating leverage will be more consistent. You're already operating at pretty high margin. We lost if we're able to ever reenter Russia, yes, that was those were tremendous margins there. But I think we're going to operate on a sustained mid single digit growth basis and flow through operational leverage consistent to that two and one probably more effectively and more efficiently than in any of the other regions. So I'm feeling really good about that.

[Ghansham Panjabi, Senior Research Analyst at Baird]

Thank you so much.

[Operator]

Our next question comes from the line of Stephane Diaz with Morgan Stanley. Please proceed with your question.

[Stefan Diaz, VP - Equity Research at Morgan Stanley]

Hi. Good morning. Thanks for taking my questions.

[Daniel Fisher, Chairman & CEO at Ball]

You bet.

[Stefan Diaz, VP - Equity Research at Morgan Stanley]

I guess maybe just to begin, how have your conversations with customers sort of gone so far regarding their plans around tariffs, their hedging strategies? And have you started discussing 2026 and like potential impacts around increased prices and impact of that on like potential ordering patterns?

[Daniel Fisher, Chairman & CEO at Ball]

Yes, I haven't it's a great question. I guess when we get closer to '26 and we see where exactly these things level off, I think those will become clearer. One of the things that's working to our advantage is I think with the strapped in consumer, they need cans in their portfolio to push for volume. There's not a lot of price, so they continue to pass through. I think you're seeing it kind of across the board.

[Daniel Fisher, Chairman & CEO at Ball]

And so I'm not worried about pricing and the dynamics that we saw a couple of years ago that really constrained our volume. The multi packs are being pushed. That's because end consumers are strapped in the cans of vehicle for our customers to grow with. But I haven't had conversations with any of our customers relative to '26. I think everybody is spending time in Washington trying to fight for exclusions and things of that nature and just trying to figure out where the plane is going to land in terms of all the trade deals around the world.

[Daniel Fisher, Chairman & CEO at Ball]

But it's a good question. We'll get back to you with probably some more color on the next call.

[Stefan Diaz, VP - Equity Research at Morgan Stanley]

Great. That's really helpful. And then I just want to clarify some of the margin headwinds in North America in 2Q. All of that had to deal with operational inefficiencies with higher than expected growth. None of that was due to contractual pricing.

[Stefan Diaz, VP - Equity Research at Morgan Stanley]

So you don't really expect this to continue on until like the second half and into 2026, if that's correct?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. That's a great point. And think about this, it wouldn't necessarily be contractual pricing, but as you see us growing at a faster rate, the categories that that growth allows for out of alcohol, it's lower margin. And so there's an element there. When we talk about mix, I guess you could talk about the portfolio thinking that that's price mix, but it's not contractual in nature in terms of going down.

[Operator]

Does that complete your question?

[Stefan Diaz, VP - Equity Research at Morgan Stanley]

Yes. Thank you so much. I'll turn it over.

[Daniel Fisher, Chairman & CEO at Ball]

Okay. We're ready for the next question.

[Operator]

Our next question comes from the line of Phil Ng with Jefferies. Please proceed with your question.

[Philip Ng, Managing Director at Jefferies Financial Group]

Hey, Hey, I guess one of your large competitors talked about how North American demand has been strong and it's been stronger than you expected as well. And they're going to run pretty tight going into next year and they don't have much inventory. Curious to get what your situation in terms of capacity and ability to service that demand and appreciating a lot to still discuss with your customers in 2026. Remind us how you are set up from a contract standpoint? Is there any movement there?

[Philip Ng, Managing Director at Jefferies Financial Group]

Do you kind of hope to kind of at least grow in line with the market next year?

[Daniel Fisher, Chairman & CEO at Ball]

Yes, great question. So we do have the new facility that's going to come online in the Northwest. So that will be helpful. So that part of the country for us is really tight. One thing that we're hoping to get a little bit more clarity to Phil is, I mean, we have used our Monterrey facility to kind of ship into North America.

[Daniel Fisher, Chairman & CEO at Ball]

So if these tariffs persist at the levels they are without some relief valves and that actually creates even a tighter landscape in the Southwest and Texas in particular. So the reality is as we start to go through our plans and our strategic planning process will be happening here over the next six to eight months. What I expect is that we'll be running full out in all of our facilities potentially carrying a little bit more inventory to balance that. I mean we can continue to grow. We did buy the asset in Florida that will help as a relief valve as well.

[Daniel Fisher, Chairman & CEO at Ball]

But if we continue to grow 5%, I think for the next eighteen months, twenty four months, we'll have to incrementally probably add a few lines here or there, do some speed up projects. But I think we're comfortable to spend in line or below D and A for our North America business for the next couple of years still. The wildcard is just going to be can we use those facilities in Mexico as relief valves as we historically have right for the last decade or so.

[Philip Ng, Managing Director at Jefferies Financial Group]

Okay. That's helpful. And then earnings is pretty flat.

[Daniel Fisher, Chairman & CEO at Ball]

We'll grow in line or ahead of the market depending on somewhat the success of our customers. But right now a couple of our large strategic partners have certainly got a winning recipe and they believe that will continue here for the foreseeable future.

[Philip Ng, Managing Director at Jefferies Financial Group]

Okay. That's a great backdrop, running rollout and customers winning. So that's great.

[Daniel Fisher, Chairman & CEO at Ball]

Different than a year ago. Yes.

[Philip Ng, Managing Director at Jefferies Financial Group]

Indeed. From an earnings perspective, South America was pretty strong. So it's good to see that improvement. How is Argentina shaping up? And when you look at Brazil, little softer to start the year, but you sounded pretty upbeat in the back half, so there's a lot of noise on trade flow, uncertainty on that front.

[Philip Ng, Managing Director at Jefferies Financial Group]

So just give us some line of sight, what gives you confidence that the back half could be better in Brazil as well?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. I think what happens in Brazil, so take Brazil, obviously, what we've been benefit we benefited from greatly in the second quarter is almost not making any money in Chile and Argentina and some of those places and they're really nice mix for us. So that recovery contributed to sort of an easier comp I would say in the second quarter year over year. And then heading specifically outlining Brazil, I think some of our competitors even commented on this. Like we're with we have a huge concentration with one customer.

[Daniel Fisher, Chairman & CEO at Ball]

As they go, we go. And typically what happens is over a twelve month period, you more or less reflect the market. And if the market grows sort of in that 3% range in Brazil for the year, That means our partner is going to have to grow at a little faster rate than that in the back half of the year. And they have plans to do that and they've demonstrated that they do that pretty consistently. So that's the comfort and that's the belief we'll be with them here two weeks from now to get more clarity on that, but they're really confident that that trend will continue and persist.

[Daniel Fisher, Chairman & CEO at Ball]

And then everything else in and around Brazil is continuing to perform. It's always wait and see on Argentina, but I think the leadership down there has got them on the right trajectory. I think they have it will be important to see what happens relative to the crop performance down there. But everything seems to be largely on track in that economy. And as long as we're just incrementally growing and recovering at a steady clip And it's not backsliding.

[Daniel Fisher, Chairman & CEO at Ball]

We're going to be in good shape to deliver the back half of the year.

[Philip Ng, Managing Director at Jefferies Financial Group]

Okay. That's great color. Really appreciate that.

[Daniel Fisher, Chairman & CEO at Ball]

You bet.

[Operator]

Our next question comes from the line of George Staphos with Bank of America. Please proceed with your question.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Thanks, everyone. Good morning. Thanks for Hi, the detail. Hey, Dan. How are you doing?

[George Staphos, Managing Director at Bank of America Merrill Lynch]

In terms and congrats on quarter in terms of the So the growth for North And Central America being at the top end of your range, which would be around 3% for the year. How much of that is predicated on what you're seeing right now in your customer mix and their strategies? And if some of your other customers start to do the same thing that the guys who are winning do, what would that mean And for your volume if you could give us a little bit of color in terms of what you mean by connected promotion? And then I had a quick follow on on aluminum.

[Daniel Fisher, Chairman & CEO at Ball]

Yes. So when we look at the broad let me start with the latter part first because yes, I should probably clarify this. There is the same amount of promotional activity happening just in terms of price changes and rev mix plans and buy one get one freeze, etcetera. But the concentration of purchases within those windows has accelerated by the end consumer. So it's not that there's more promotional activity, it's that the customers clearly the end consumer must be weakening and they're looking at those opportunities and buying multi packs at an accelerated rate versus the prior couple of years.

[Daniel Fisher, Chairman & CEO at Ball]

So that's what's happening and that's what's contributing to probably a little bit more volume growth than anyone anticipated in the first half of the year. Really it would be to your first question, really it would be in and around beer. I mean, is there going to be recovery? One of our customers in particular is struggling just because of the tariffs. So unless that relieves itself that we're not anticipating greater performance than the 3% top end.

[Daniel Fisher, Chairman & CEO at Ball]

And even with that, George, we'll be fine because we're underutilizing our Monterrey facility right now for that customer. So if that particular instance happens, we're good, right? We'll be able to ship, we'll be able to deliver even in a more efficient manner. If growth persists with a couple of our customers in the 15% to 20% range, We'll be living hand to mouth. But eventually you'll get out of peak season and there'll be more efficient delivery patterns in the back half of the year.

[Daniel Fisher, Chairman & CEO at Ball]

But right now, it's tight. We're living hand to mouth. I think we can deliver. We still have some room to grow in facilities specifically that are adjacent to breweries, right, where they've been underperforming. So if that category rebounds that's not a difficult solve for us.

[Daniel Fisher, Chairman & CEO at Ball]

It's if there's even more activity in some of our strategic partners in the non ALK or the CSD space that will create more inefficient patterns and then we'll just have to get out ahead of it for next year and probably carry a little bit more inventory if this is the direction of flight that we're going to see growth at this rate for a persistent manner.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Thanks, Dan. I appreciate that review.

[Daniel Fisher, Chairman & CEO at Ball]

Yes.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Second question, to the extent that you can estimate and feel comfortable talking about it live mic on call, where do you think the your average large customer, however you want to define that, their embedded aluminum price is relative to sort of spot market if we look at Midwest premium? And when would we expect time wise that to basically converge? So basically the question on the question are customers using cans more now because they're hedged and when does that end? It doesn't sound like you're too worried about that because of where the consumer is for '26, but some thoughts there and I'll turn it over. Thank you.

[Daniel Fisher, Chairman & CEO at Ball]

Yes. You will start to see that here in the second half of the year and into next year. I think it's about a quarter for a 12 pack. So how impactful is that in the price sensitivity curve? I think it's the it's cans are clearly cheaper than PET outside of the two liter PET, cheaper than glass still.

[Daniel Fisher, Chairman & CEO at Ball]

So if that quarter for a 12 pack creates different buying behaviors, then I think you start to see and we saw the beginnings of that. You'll see the 24 packs and the 30 packs and the end consumer being far more conscious on that buy pattern, which then changes the velocity pattern, which changes the lumpiness of your business. So that to me feels more about what's going to happen than any kind of dramatic shift because of hedges etcetera.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Understood. It will mean more operational planning on your side. But we'll turn it over Yes, and thanks for correct. The Thank

[Operator]

you, Our next question comes from the line of Anthony Pettinari with Citi. Please proceed with your question.

[Anthony Pettinari, Research Analyst at Citigroup]

Good morning. Good morning. Dan, earlier you in talking about sort of North American profitability, I think you called out 10,000,000 in maybe inefficiencies or I don't know exactly the language, but Correct. Tariffs a smaller part of that $10,000,000 or was it separate? And then does that go down in 3Q?

[Anthony Pettinari, Research Analyst at Citigroup]

And then just related question, does Florida did Florida can kind of weigh on profitability meaningfully in 2Q? Or just how did that asset perform versus expectations?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. Thanks for the question. Florida can probably think in the neighborhood of like 1,000,000 to $2,000,000 of and we'll start to get to kind of breakeven by Q4 and then it will be incremental profit for us in 2026. The tariffs probably 2,000,000 to 3,000,000 of that $10,000,000 impact. So not a lot.

[Anthony Pettinari, Research Analyst at Citigroup]

Okay. That's helpful. And then kind of maybe broader question. In terms of the impact of one big beautiful bill on your business and thinking maybe especially about bonus depreciation. Any kind of broad thoughts about how that could impact you this year, next year?

[Daniel Rabbitt, Interim CFO at Ball]

Thank you. The other Dan will take this one. The short answer is, we don't think it's going to change the trajectory much of the effective growth tax rate, me. And largely the benefits are going to come in through the acceleration of depreciation and a little bit ability to deduct more, but because of the EBITDA limit versus the operating earnings limit. But for the most part, we're still early and really figuring it out, but I don't think it's going to be much of a change for us.

[Anthony Pettinari, Research Analyst at Citigroup]

Okay, that's helpful. I'll turn it over.

[Daniel Fisher, Chairman & CEO at Ball]

Thank you.

[Operator]

Our next question comes from the line of Edlain Rodriguez with Mizuho. Please proceed with your question.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Thank you. Good morning, everyone.

[Daniel Fisher, Chairman & CEO at Ball]

Mean, Good morning.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

You've heard some beverage companies talking about the impact of immigration enforcement on certain customers. Like are you prepping for a potential demand slowdown in certain markets?

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Or is there a disconnect between what's being said and what you're seeing out there from your customers?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. This is a very difficult analysis. So I'll give you the optimistic viewpoint on this challenged issue, social issue. So there's more consumption happening online multipack and in grocery channel multipack, less at the C store channel. So that has a real impact for some of our customers that sell and have an overwhelming profit pool within the C store channel.

[Daniel Fisher, Chairman & CEO at Ball]

Because folks are concerned that ICE is going to be there. So it could be a benefit for the can. So I'm it's actually the opposite. I'm not thinking about a slowdown. I'm thinking about a continuance of volume lift with the multipack purchasing at home and the grocery channel.

[Daniel Fisher, Chairman & CEO at Ball]

Over a longer period of time, absent immigration, our economy doesn't work without immigration in some balanced form. But for right now, I would gather there's probably a bit of a benefit absent a headwind in the way you characterize that.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Okay. Got it. Got it. One quick one on Europe. I mean, again, continues to perform well.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Can you talk about how balanced supply demand is in that market? And whether some new supply might be needed to meet the growing demand that we see in there?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. It's a land of opportunity And I think all of our competitors are saying the same thing because of the under penetration in cans, the carbon footprint of glass that we're capitalizing on. We put in a few big boxes, big facilities, and we're continuing to build those out. So there's incremental capacity that's being added to step into exactly what you described, the sustained growth at this mid single digit level, which will have to be supported. We're starting to hear some announcements from other competitors that they're adding some capacity line by line.

[Daniel Fisher, Chairman & CEO at Ball]

But if we continue to grow at the rate we're growing, we're going to have to move some of our projects probably to the left and do things by next year 2728. All of that will still be within our capital envelope that we've outlined. But yes, there's going to be a need for capacity adds if the market continues to grow mid single digits.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Okay. Thank you.

[Operator]

Our next question comes from the line of Josh Sector with UBS. Please proceed with your question.

[Anojja Shah, Director - Equity Research at UBS Group]

Hi, everyone. It's Anoja Shah sitting in for Josh. Hi. Hi. We kind of touched on this a bit and I know cans have performed well historically in recessions as consumers tend to trade down eat more at home.

[Anojja Shah, Director - Equity Research at UBS Group]

But what's the outlook if inflation goes up? Because we still don't know the full tariff impact yet. How cans perform during high inflation times? What are the puts and takes we should be thinking about?

[Daniel Fisher, Chairman & CEO at Ball]

Well, I think we did not do well the last couple of years during that inflationary pressure. So it's a bit of a nuance question. You're on to it. It's like we're recession resistant not inflation resistant. So when our customers need to take price to offset additional input costs, That's a direct volume headwind to us.

[Daniel Fisher, Chairman & CEO at Ball]

So we saw that. But you're at a different point in time in the economy where either the end consumer if they can't afford to pay for those higher input costs then everybody is going to everybody, our customers and us are going to struggle. And then that gets you back into the recessionary environment. And in that, what we're seeing exactly to your point, it's like there's going to be concentrated promotional activity and buying during that particular time. Our customers have fixed costs.

[Daniel Fisher, Chairman & CEO at Ball]

We have fixed costs. So, think there's going to have to be a balance here. But yeah, we're with hamburger at $10 a pound, that's not a good environment for long. And we're benefiting from it now, but no one is going to be benefiting from that particular environment for a while if interest rates don't come down and things don't stabilize a bit. Good question.

[Anojja Shah, Director - Equity Research at UBS Group]

Right. Thank you for that. I'll turn it over.

[Operator]

Our next question comes from the line of Chris Parkinson with Wolfe Research. Please proceed with your question.

[Christopher Parkinson, Managing Director at Wolfe Research, LLC]

Hi, thank you for taking my question. So Dan, when you take a step back and assess where you've been across your geographic portfolio and where you want to be, what have been the two best surprises would have been the two worst just given all the puts and takes that we've seen perhaps possibly in Europe, a little bit more mixed in The U. S. Just where do you kind of stand as we're entering the 2025 into 2026?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. For this year in particular I think is the question. Is that correct?

[Christopher Parkinson, Managing Director at Wolfe Research, LLC]

Yes.

[Daniel Fisher, Chairman & CEO at Ball]

Yes.

[Daniel Fisher, Chairman & CEO at Ball]

No, I think Europe is mostly in line with where we expected. Our strategic partners are doing well. Like beer is not doing as well and we have a higher customer concentration in CSD and energy and those have really outperformed and kept us probably in line or a little ahead of the market. So that continues to be a good story. I think South America is a mixed bag.

[Daniel Fisher, Chairman & CEO at Ball]

Brazil has underperformed. Some of the other countries have over performed. I think that balances out as we move into the back half of the year because we have such a customer concentration with one particular player down there and they will certainly not continue to lose share in the marketplace. They've demonstrated that historically. And I think North America's beer is not as good as we anticipated.

[Daniel Fisher, Chairman & CEO at Ball]

There are pockets of I think American beer is doing okay. It's not domestic anymore apparently. And I think the energy market is certainly outpaced what we anticipated. So that's kind of the backdrop. All in all, it's better, net better.

[Daniel Fisher, Chairman & CEO at Ball]

And I think cans are winning. So that's the good part. I think we finally hit a bit more of a recessionary window, which the can has a better playbook for sustained performance in that. And so we're more bullish probably in the second half of the year than the balance of most packaging companies.

[Christopher Parkinson, Managing Director at Wolfe Research, LLC]

Got it. And just if I may parlay that question into of your commentary at your Analyst Day. Spoke about two to 3% volume growth, the two op leverage and the 4% to 6% share count as I recall. And the Street is pretty much already there in terms of like 10%, 11% EPS growth. I mean, where would you be assessing on in terms of volume and you kind of hit on this for like one geography or two, but do you see yourself kind of trending towards the higher end of those ranges or like what would be the other puts and takes as we think about the algorithm you put out I think last June? Thank you.

[Daniel Fisher, Chairman & CEO at Ball]

Yes. Good question. So, we're definitely at the higher end of that range. Some of this does have to do with your customer portfolio and a lot of our customers are doing extraordinarily well right now. So we're going to eclipse the higher end of the range.

[Daniel Fisher, Chairman & CEO at Ball]

We're also very cognizant in the last couple of years we've been at repositioning a bit of our portfolio to categories. We were much heavier in beer. So we've repositioned a little bit of that. And so we're starting to see the tailwinds of that. We'll continue to see the tailwinds of that in the 2026 and 2027.

[Daniel Fisher, Chairman & CEO at Ball]

I'm not going to move off of the two to three right now because the world is certainly uncertain. But we're this year we'll definitely be at the high end of that over and it's looking good for next year as well at this point.

[Christopher Parkinson, Managing Director at Wolfe Research, LLC]

Thank you for the detail.

[Daniel Fisher, Chairman & CEO at Ball]

Yes.

[Operator]

Our next question comes from the line of Jeff Zekauskas with JPMorgan. Please proceed with your question.

[Jeffrey Zekauskas, Analyst at JP Morgan]

Thanks very much.

[Daniel Fisher, Chairman & CEO at Ball]

Hi, Jeff.

[Jeffrey Zekauskas, Analyst at JP Morgan]

Hi. Can you talk about your rates of volume change in consumer soft drinks and beer in the different geographies and in the aggregate?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. So I think beer in South America is continuing to grow at a slower rate because of Brazil and the inflationary pressures there, but there's continued to be growth. The beer growth is flattish to slightly up in Europe, probably growing at a slower rate than it has historically. CSD and energy is growing at a faster rate than historically in that part of the world. I think there's more competition.

[Daniel Fisher, Chairman & CEO at Ball]

There was an acquisition made of some of the Pepsi bottlers by a big brewer a year ago in Europe. And they're in the markets that they're competing against, Coke in particular, there's a little bit more competition if you will. That's creating some favorable tailwinds. And then in North America, I've probably given to you I've outlined that. There's a couple of brands that are doing a little better than we thought, but I think the tariffs on the one particular brand that has really driven the entire category to a little bit more of a balanced growth trajectory, they are certainly challenged and they're one of our partners and so we're challenged along with them.

[Jeffrey Zekauskas, Analyst at JP Morgan]

Okay. Great. And when you think about the profitability of North Should it jump because the incremental costs that you're feeling seem to be more transitory?

[Daniel Fisher, Chairman & CEO at Ball]

Yes, with the exception of let's see how yes, it's a good question. The only question mark I have right now is volume going to continue at this rate? Where does it settle out? And then the tariffs because we've all been somewhat reliant on supply patterns to use those plants in Mexico to ship north. So if we can't do that anymore, I think there's probably a little bit of a fixed cost burden that's a drag on the supply chain landscape.

[Daniel Fisher, Chairman & CEO at Ball]

We will be in a better spot once our plant in the Northwest comes up and is running. So I think the volume is great. The mix of where that volume is coming from when it's in non alcohol, it's a little bit less profitable because of the price point the end consumer consumes of. So for us, I think we really like the trajectory eighteen months out on all of this when we have our new facility and things are operating in a more efficient normalized freight pattern. And let's hope that cooler heads prevail on some of the tariffs and things of that nature.

[Daniel Fisher, Chairman & CEO at Ball]

So, yes, I think the trajectory, I'm optimistic. I don't know about the next six to nine months in particular, but I think your point is valid.

[Jeffrey Zekauskas, Analyst at JP Morgan]

Okay, great. Thank you so much.

[Daniel Fisher, Chairman & CEO at Ball]

Thank you.

[Operator]

Our next question comes from the line of Arun Viswanathan with RBC. Please proceed with your question.

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

Sorry about that. Was on mute. Thanks for taking my question. Sorry about that.

[Daniel Fisher, Chairman & CEO at Ball]

You bet. No problem.

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

Just wanted to ask about the hope you guys are well. Just wanted to ask about the kind of the EBIT algorithm. I know that margins have been under pressure here. And so maybe you can just discuss your thoughts on returning or that two to one kind of EBIT leverage on top line growth. And also you mentioned so goes your exposure to one customer, so goes your exposure sorry or your performance.

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

So I guess when you think about that portfolio of customers that you have, how do you think about volumes evolving I guess in North America as you look out maybe over the next six to twelve months? Thanks.

[Daniel Fisher, Chairman & CEO at Ball]

Yes. The customer concentration that I talked about was South America in particular. We're feeling good about the trajectory of flight. We've done some repositioning of our portfolio to and you'll see that over the next eighteen months as well. So, we're moving kind of less beer.

[Daniel Fisher, Chairman & CEO at Ball]

Candidly, we had probably over indexed into beer and so we're making that pivot and those are the categories and the brands and the areas that have a little bit more tailwind for the future. So we're encouraged about that. The EBIT algorithm, we have two things that we called out last year heading into this year that are non repeats and that's the interest income for carrying the cash from the aerospace transaction. So that's kind of mid $40,000,000 impact. And then for Q3 last year, we had nearly $20,000,000 of insurance proceeds that came through our PHC business.

[Daniel Fisher, Chairman & CEO at Ball]

So, that, yes, we're right in the two to one algorithm. Those we still may be able to hit that and offset that $60,000,000 that's we're so we're right in spitting this into the two to one algorithm. And when we talk about it, we talk about it enterprise wide. So you'll have timing and shifts, and we're running this more as a portfolio and as an enterprise as opposed to being laser focused on the two in one in each region. Over time, the two in the one in in region is what we're what we're shooting for and then managing our portfolio to ensure we're getting back value to shareholders in a more consistent manner by managing the portfolio is the thought process.

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

Okay. Thanks for that. And if I could just follow-up on that category mix comment. So was that was that North America based? And if so, maybe how do you see your non alcoholic beverage exposure trending?

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

Would you say that you were maybe 40% alcohol and that's trending down lower to the 30% range or maybe you can just frame that opportunity for us?

[Daniel Fisher, Chairman & CEO at Ball]

I think you're largely there with that trajectory of flight. Moving from kind of 40 to 30 would be optimal over time. Yes, I think that's more of the don't want to talk too much about our strategy, but that's at a high level that's the thinking.

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

Great. Thanks a lot.

[Operator]

Our next question comes from the line of Michael Roxanne with Truist. Please proceed with your question.

[Niccolo Piccini, Equity Research Associate at Truist Securities]

Yes. Hi, This is Nico Pucine on for Mike.

[Daniel Fisher, Chairman & CEO at Ball]

For taking the Hi, how are you?

[Niccolo Piccini, Equity Research Associate at Truist Securities]

Good. Thank you. I apologize if this is repetitive. Was joined late from another call. But in 4Q, think you had mentioned that you had over like 85% of your twenty twenty six volumes under contract.

[Niccolo Piccini, Equity Research Associate at Truist Securities]

I was wondering if you could give us an update on where that stands currently and then where twenty twenty seven volumes are?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. Twenty twenty seven is still a bit early. I'd say 2026 for North America particular is just slightly north of 90% and we have one contract that's fairly sizable that comes due in 2027 for North America. So you're probably 75% in 2027 that's under contract. So we've really done a nice job of future proofing the business and kind of repositioning some mix and some category movement.

[Daniel Fisher, Chairman & CEO at Ball]

And then one our big partners that contract comes due, but we're feeling good that we're going to land that in a good spot for 2027 and beyond.

[Niccolo Piccini, Equity Research Associate at Truist Securities]

Got it. Thank you very much. Then just quickly was on there any manufacturing efficiency that's contributed in 2Q ahead of expectations? And how do you think about efficiency gains going forward?

[Daniel Fisher, Chairman & CEO at Ball]

Yes. I think the plants are running well. We're about eighteen months into our ball business system. You saw nice improvement in South America. Our ability to kind of deliver this higher than expected growth in Europe is largely attributed to the plants running well.

[Daniel Fisher, Chairman & CEO at Ball]

It was a bit choppy in North America, but largely because we weren't able to use Monterrey to its full extent in Mexico because of the tariffs and then just some acceleration in a couple areas where we had to convert to different can size to keep pace with the growth. So in the short term, I'd say we underperformed in North America, but a little bit more stable outlook here and then we will lift up. Our goal longer term was at I think at the Investor Day a year ago was to kind of flow through 50% of our gross savings and we're still on track. You'll see last year we were able to benefit from a lot of the fixed cost savings from some of the plant and facility closures. We're navigating a lot of supply chain challenges because of the accelerated growth here in North America, a bit of the tariffs.

[Daniel Fisher, Chairman & CEO at Ball]

We've been able to offset that and continue to keep our EPS guidance if not raise it as we just did. So, yes, I'm feeling good. It's really a long term outlook. I start with safety and quality. Both of those are at world class levels.

[Daniel Fisher, Chairman & CEO at Ball]

So once I see those two metrics in good order, the rest generally follows. And it's awfully difficult in peak season to look at kind of where you are. But I think when we reflect back at the end of the year, we'll be able to point to some really nice performance in the plants across the globe.

[Niccolo Piccini, Equity Research Associate at Truist Securities]

Got it. Thank you. That's very helpful.

[Daniel Fisher, Chairman & CEO at Ball]

Thanks. Christine, we'll take one more question.

[Operator]

Thank you. Our final question comes from the line of Richard Carlson with Wells Fargo. Please proceed with your question.

[Richard Carlson, VP - Equity Research at Wells Fargo]

Hey guys, good morning. Thanks for squeezing me in.

[Daniel Fisher, Chairman & CEO at Ball]

Hey, how are you?

[Richard Carlson, VP - Equity Research at Wells Fargo]

Very good, very good.

[Richard Carlson, VP - Equity Research at Wells Fargo]

Sending it for Gabe Haiti this morning. So most of our questions have been answered. Thank you for all the details so far. But I guess one thing we wanted to ask is about scrap metal pricing and how that has been impacting you?

[Daniel Fisher, Chairman & CEO at Ball]

It's really negligible. Most of our contracts especially on the tolling that's controlled by our customer. Yes, we're keeping an eye on it obviously as tariffs increase that scrap market is going to increase at some point as well. It already has a bit. And then the other thing is you already have such a high recycled content number.

[Daniel Fisher, Chairman & CEO at Ball]

There's been a bit of pressure on that market already. So people have gone out and gone long in a number of areas, especially within our particular marketplace where we're so heavily dependent on that processed aluminum coil at higher recycled content. So we rely heavily on supply base to help manage that. But it's a good question, something certainly we're keeping an eye out, but it hasn't had a negative impact. We're more concerned about candidly, we're more concerned about the demand side of tariffs in general writ large across the economy than we are about any kind of isolated metal market at this point.

[Richard Carlson, VP - Equity Research at Wells Fargo]

Got it. Thank you very much.

[Daniel Fisher, Chairman & CEO at Ball]

Yes. All right. Appreciate it. All right, Christine. With that, we'll look forward to talking with you all in one hundred days or so. The balance of your summer goes well.

[Operator]

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Participants

Executives

• Brandon Potthoff, Head of Investor Relations
• Daniel Fisher, Chairman & CEO
• Daniel Rabbitt, Interim CFO

Analysts

• Ghansham Panjabi, Senior Research Analyst at Baird
• Stefan Diaz, VP - Equity Research at Morgan Stanley
• Philip Ng, Managing Director at Jefferies Financial Group
• George Staphos, Managing Director at Bank of America Merrill Lynch
• Anthony Pettinari, Research Analyst at Citigroup
• Edlain Rodriguez, Equity Analyst at Mizuho Securities
• Anojja Shah, Director - Equity Research at UBS Group
• Christopher Parkinson, Managing Director at Wolfe Research, LLC
• Jeffrey Zekauskas, Analyst at JP Morgan
• Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets
• Niccolo Piccini, Equity Research Associate at Truist Securities
• Richard Carlson, VP - Equity Research at Wells Fargo