PresentationGeorge StaphosBofA Securities, Research Division Welcome back, everybody. I'm George Staphos with BofA on Paper and Packaging. Thrilled to have Ball Corporation back to our conference. Ball, again, was one of the very first companies we've had at a conference, we were back in the 1990s and honored that CEO, Ron Lewis; and CFO, Dan Rabbitt are here from the company. Ron became Chief Executive Officer of the company in 2025 after joining Ball in 2019. And Ron, prior to that, had an extensive caree ...

Summary of Ball Corporation Conference Call Company Overview - **Company**: Ball Corporation (NYSE: BALL) - **Industry**: Paper and Packaging Key Points and Arguments Financial Guidance and Performance - Ball Corporation is guiding for **10% earnings growth** and **free cash flow** exceeding **$900 million** for the year [3][4] - North and Central America are expected to grow at the **low end of 1%-3%**, while Europe is anticipated to grow at the **high end of the range** [3][4] - The company experienced a **positive surprise** in North America, with expectations for growth towards the **top end of the range** in Europe due to recent acquisitions [5][6] Strategic Focus - The company’s strategy is built on **four pillars**: excellence in execution, customer proximity, managing substrate shifts, and capitalizing on market complexity [4] - Ball is focusing on **profitable growth** through its **Ball Business System**, which combines commercial and operational excellence [4] Market Dynamics - The beverage can market in North America finished strong, with pipelines being refilled and customers using cans to support revenue growth management strategies [7][8] - Customers are increasingly using cans as a means to offer value to consumers, especially after a high inflationary period [8] Operational Excellence - Ball Corporation aims to be the **best can maker in the world**, emphasizing operational excellence and standardization across all plants [60][62] - The company is confident in achieving **2x operating leverage** across various regions, with Europe already exceeding this target [58][62] Capacity and Growth Initiatives - The new **Millersburg plant** is set to start operations in **Q3 2026**, providing much-needed capacity and improving operational efficiency [111][113] - The company is committed to maintaining capital expenditures at or below **depreciation and amortization levels**, with a target of **$600 million** over a three-year period [78][80] Customer Relationships and Market Trends - Ball Corporation is focused on maintaining strong relationships with customers, ensuring they provide quality service and competitive pricing to encourage a shift towards cans [15][21] - The company is not concerned about a substrate shift away from cans, as the can market continues to grow while other substrates remain flat [153][157] Future Outlook - For **2027**, Ball Corporation is approximately **90% sold** for its book of business, indicating a strong foundation for growth [68][162] - The company plans to buy back **4%-6%** of its shares, contributing to earnings per share growth [69][107] Cost Management and Efficiency - Ball Corporation achieved **$500 million** in targeted cost savings a year earlier than expected by standardizing operations across its plants [117][120] - The company anticipates finding **$100 million-$200 million** in gross savings annually from supply chain costs [122] Tariff Impacts - Tariff headwinds are expected to ease by **Q4 2026**, with significant improvements anticipated by **2027** [116] Additional Important Insights - The company is actively involved in co-packing and contract manufacturing, which is a growing segment in the beverage industry [21][22] - There is a focus on collectible packaging for major events like the **World Cup** and **America's 250th anniversary**, which is expected to drive additional demand [130][147] This summary encapsulates the key points discussed during the Ball Corporation conference call, highlighting the company's strategic direction, financial performance, and market outlook.

Sales Performance by Region - Beverage Packaging, North and Central America segment accounted for 48% of consolidated net sales in 2025, with approximately 50 billion aluminum beverage containers shipped, representing 36% of total shipments in the region [51][53]. - Beverage Packaging, EMEA segment contributed 30% to consolidated net sales in 2025, with 38 billion aluminum beverage containers shipped, capturing an estimated 39% of the market [56]. - Beverage Packaging, South America segment represented 16% of consolidated net sales in 2025, with approximately 20 billion aluminum beverage containers shipped, holding a 46% market share [60]. Financial Risk Management - The company limits exposure to aluminum price fluctuations through sales contracts that allow for pass-through of aluminum price changes and the use of derivative instruments [55][62]. - A hypothetical 10% adverse change in aluminum prices could result in an estimated $3 million after-tax reduction in net earnings over a one-year period [212]. - Interest rate exposure management includes the use of pay-fixed interest rate swaps, with a 100-basis point increase in interest rates potentially leading to a $7 million after-tax reduction in net earnings [214]. - A hypothetical 10% reduction in currency exchange rates could result in an estimated $15 million after-tax reduction in net earnings over a one-year period [217]. - The company has three fixed-for-fixed cross currency swaps outstanding, totaling €1.05 billion, with a 10% adverse change in foreign currency exchange rates potentially leading to a $67 million after-tax currency translation adjustment loss [218]. Research and Development - Research and development efforts focus on packaging innovation and sustainability, conducted primarily at a technical center in Westminster, Colorado [71]. Expansion and Acquisitions - The company acquired Florida Can Manufacturing in Q1 2025, expanding its manufacturing capabilities in North America [52].

Core Viewpoint - Ball Corporation will present at the Bank of America 2026 Global Agriculture and Materials Conference on February 26, 2026, highlighting its leadership in sustainable aluminum packaging solutions [1] Company Overview - Ball Corporation is a leading global provider of sustainable aluminum packaging for beverages, personal care, and household products [1] - The company operates with 16,000 employees across more than 70 manufacturing plants and facilities worldwide [1] - In 2025, Ball Corporation reported net sales of $13.16 billion [1]

Group 1 - The core focus of the recent events surrounding Ball Corporation is based on its fiscal year 2025 performance meeting and strategic planning [1] Group 2 - The company plans to achieve its $500 million productivity enhancement goal by the end of 2026, ahead of the original target of the end of 2027, with good progress reported [2] Group 3 - Annual capital expenditures are maintained at approximately $600 million, primarily directed towards regional capacity expansion projects with long-term purchase agreements, such as new capacity in the North American market [3] Group 4 - Management has provided growth guidance for 2026 across various regions: North America is expected to grow by 1-3%, Europe by 3-5%, and South America by 4-6%, considering regional volatility [4] Group 5 - The company reaffirms its financial targets for 2030, which include earnings per share (EPS) reaching $5.80 and free cash flow increasing to $10-13 billion, while continuously optimizing costs through operational excellence programs [5] Group 6 - The company is implementing the Ball Business System across its 66 global factories to enhance operational stability through standardized production and daily handover mechanisms, addressing market fluctuations [6]

Core Viewpoint - Ball Corporation is a leading player in sustainable aluminum packaging, with a market cap of $17.8 billion, and has shown strong stock performance compared to broader market indices [1][2]. Financial Performance - For fiscal Q4 2025, Ball reported sales of $3.35 billion, a 16% increase year-over-year, driven by a 6% growth in global aluminum packaging volumes [6]. - The non-GAAP EPS for the quarter was $0.91, up from $0.84 in the prior year [6]. - Analysts project an adjusted EPS of $3.97 for the current fiscal year, reflecting an 11.2% year-over-year increase [6]. Stock Performance - Ball's stock has increased by 32.1% over the past 52 weeks and 25.8% year-to-date, outperforming the S&P 500 Index's gains of 15.6% and 1.7%, respectively [2]. - However, it has underperformed compared to the State Street Consumer Discretionary Select Sector SPDR Fund, which gained 4.2% over the past year [3]. Analyst Ratings - The consensus rating among 15 analysts covering Ball stock is a "Moderate Buy," consisting of eight "Strong Buys," one "Moderate Buy," and six "Holds" [7]. - Citigroup's Anthony Pettinari reaffirmed a "Buy" rating and raised the price target to $74 from $67, indicating a more optimistic outlook [8]. - The mean price target of $70.75 suggests a 6.2% premium to current price levels, while the highest target of $77 indicates a potential upside of 15.5% [8].

Core Viewpoint - Ball Corporation is recognized as one of the 10 Most Profitable Undervalued Stocks to Buy, with analysts raising price targets following strong fourth-quarter results and a positive outlook for 2026 and 2027 [1][8]. Analyst Ratings and Price Targets - Citi analyst Anthony Pettinari increased the price target for Ball Corporation to $74 from $67, maintaining a Buy rating due to strong fourth-quarter results and a compelling outlook [1]. - Truist raised its price target to $75 from $69 while keeping a Buy rating, noting a 9% post-earnings stock movement reflecting increased investor confidence in the company's execution and focus on profitable growth under new CEO Ron Lewis [2]. - RBC Capital lifted its target to $74 from $67 and reiterated an Outperform rating, citing a fourth-quarter earnings beat driven by robust volumes [2]. - BofA raised its price target to $71 from $63 and maintained a Buy rating, while also increasing FY2026 and FY2027 EPS forecasts [3]. - UBS increased its target to $66 from $58 and maintained a Neutral rating after updating its model post-earnings [3]. - Morgan Stanley raised its price target to $66 from $63, keeping an Equal Weight rating, citing improved clarity on operating leverage into 2027 [3]. Financial Performance - Ball Corporation reported fourth-quarter revenue of $3.35 billion, exceeding the consensus estimate of $3.11 billion [4]. - The company achieved robust volume growth in the quarter and returned approximately $1.54 billion to shareholders through share repurchases and dividends [4]. Company Overview - Ball Corporation supplies aluminum packaging products for the beverage, personal care, and household products industries, operating in the United States, Brazil, and internationally [5]. - The company manufactures and sells aluminum beverage containers to fillers of carbonated soft drinks, beer, energy drinks, and other beverages [5].

Core Viewpoint - Ball Corp has seen a significant improvement in its Relative Strength (RS) Rating, increasing from 64 to 80, indicating enhanced technical performance in its stock price [1]. Group 1: Relative Strength Rating - The Relative Strength Rating is a proprietary measure that evaluates share price performance on a scale from 1 (worst) to 99 (best) [1]. - The upgrade to an RS Rating of 80 suggests that Ball Corp's stock has shown strong price movement over the past 52 weeks [1]. Group 2: Market Context - The improvement in Ball Corp's RS Rating reflects a positive trend in its technical performance, which may attract investor interest [1]. - The article mentions other companies, such as Sonoco Products, which are also showing improved relative price performance but have not yet reached the same benchmark as Ball Corp [1].

Core Viewpoint - Ball Corp reported better-than-expected fourth-quarter financial results, with earnings and sales surpassing analyst estimates [1] Financial Performance - Quarterly earnings were reported at 91 cents per share, exceeding the analyst consensus estimate of 89 cents per share [1] - Quarterly sales reached $3.347 billion, surpassing the analyst consensus estimate of $3.109 billion [1] - For FY2026, adjusted EPS is expected to be more than $3.93, compared to market estimates of $3.97 [1] Stock Performance - Following the earnings announcement, Ball shares gained 0.5% to $62.10 in pre-market trading [1] Analyst Ratings and Price Targets - Mizuho analyst John Roberts maintained an Outperform rating and raised the price target from $58 to $70 [3] - Truist Securities analyst Michael Roxland maintained a Buy rating and raised the price target from $69 to $75 [3]

Core Viewpoint - The article emphasizes a long-term investment strategy focusing on a balanced portfolio that includes growth, value, and dividend-paying stocks, with a particular inclination towards value stocks [1]. Group 1 - The investor typically adopts a long-term horizon of 5-10 years for investments [1]. - The investment approach is characterized by simplicity, aiming to maintain a straightforward portfolio structure [1]. - The investor occasionally engages in selling options as part of their investment strategy [1].