Ball Corporation net earnings down slightly in 2023
Ball Corporation reported full-year 2023 net earnings attributable to the corporation of $707 million (including net after-tax charges of $213 million, or 67 cents per diluted share for business consolidation and other non-comparable items) or diluted earnings per share of $2.23, on sales of $14.03 billion.
This was compared to $719 million net earnings attributable to the corporation, or $2.25 per diluted share (including net after-tax charges of $172 million, or 53 cents per diluted share for business consolidation and other non-comparable items) on sales of $15.35 billion in 2022.
Ball’s full-year 2023 comparable net earnings were $920 million, or $2.90 per diluted share compared to $891 million, or $2.78 per diluted share in 2022.
Ball’s fourth quarter 2023 net earnings attributable to the corporation on a U.S. GAAP basis, were $154 million, or 49 cents per diluted share, on sales of $3.40 billion compared to $55 million, or 17 cents per diluted share, on sales of $3.55 billion in the fourth quarter of 2022. Ball’s fourth quarter 2023 comparable earnings per diluted share were 78 cents versus fourth quarter 2022 comparable earnings per diluted share of 44 cents.
Daniel W. Fisher, chairman and CEO, said: ”We delivered strong fourth quarter and full-year comparable operating earnings and free cash flow. The resiliency of our team amid a major brand disruption in North America, challenging year-over-year comparisons in EMEA following the 2022 Russian business sale, hyperinflationary effects in Argentina and activities associated with the ongoing aerospace sale process was outstanding.
“Those actions coupled with sequential volume improvement, operational efficiencies and the planned deployment of aerospace sale proceeds to reduce leverage and accelerate share repurchases, position the business for continued diluted earnings per share growth, strong free cash flow generation and return of value to shareholders in 2024 and beyond.”
Details of segment comparable operating earnings, business consolidation and other 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. Year-over-year global and EMEA segment volume data exclude the impact of the Russian beverage can business sale completed in third quarter of 2022, unless specifically noted otherwise.
On August 17, 2023, the company announced that it reached an agreement to sell its aerospace business to BAE Systems for gross proceeds of approximately $5.6 billion in cash. The transaction is subject to regulatory approvals and certain closing conditions and adjustments; therefore, prospective estimates for certain financial metrics provided in today’s release exclude any potential impact of the projected aerospace business sale.
Beverage Packaging, North and Central America
Beverage packaging, North and Central America, segment comparable operating earnings for full-year 2023 were $710 million on sales of $5.96 billion compared to $642 million on sales of $6.70 billion in 2022.
For the fourth quarter 2023, segment comparable operating earnings were $156 million on sales of $1.38 billion compared to $99 million on sales of $1.51 billion during the same period in 2022. Full-year 2023 sales reflect lower shipments and the contractual pass through of lower aluminum costs favourably offset by incremental inflation recovery.
Full-year and fourth quarter segment comparable operating earnings increased year-over-year due to contractual inflation recovery, cost savings and improved operating performance despite lower than anticipated volume driven largely by our customer exposure to a U.S. mass beer brand disruption. Full-year and fourth quarter segment volumes decreased 6.9 percent and 3.7 percent, respectively, and quarter-to-quarter segment volumes improved sequentially from the double-digit declines experienced in the third quarter of 2023.
During the quarter, the company announced plans to permanently cease production at its leased Kent, Washington, facility in the first half of 2024. The combination of this and other previously announced footprint actions ensures supply/demand balance is appropriate for current macroeconomic conditions while also providing our customers access at scale to high-quality, innovative aluminium cans and bottles and, will also enable our ability to achieve appropriate returns on capital for the value delivered to customers. Fixed and variable cost management and operational performance initiatives continue and are expected to improve results in 2024 and beyond.
Aluminium beverage cans continue to outperform other substrates. We remain dedicated to enabling the greater use of low-carbon, best-value innovative aluminium packaging solutions across our customer mix over the long term. After the first quarter, we anticipate sequential volume improvement to return in our North and Central American business following the April 2024 anniversary of the U.S. customer brand disruption and incremental contracted volume growth supported by business development efforts across diverse beverage categories.
Beverage Packaging , EMEA
Beverage packaging, EMEA, segment comparable operating earnings for full-year 2023 were $354 million on sales of $3.40 billion compared to $358 million on sales of $3.85 billion in 2022. For the fourth quarter, segment comparable operating earnings were $80 million on sales of $739 million compared to $47 million on sales of $748 million during the same period in 2022. Full-year sales reflect lower year-over-year shipments, largely due to the sale of the Russian operations during the third quarter of 2022, and the contractual pass through of lower aluminium costs. Historical results for the Russian operations are reflected in beverage packaging, EMEA segment 2022 full-year results.
Full-year segment comparable operating earnings reflect favourable price/mix, inflationary recovery and cost management and, in alignment with our stated goal, nearly offset the $86 million comparable operating earnings headwind associated with the Russian business sale completed in September of 2022. Fourth quarter segment comparable operating earnings increased significantly year-over-year driven by inflationary recovery and lower costs offset by lower volumes.
Packaging mix shift to aluminium cans supported by ongoing packaging legislation in certain countries continues to be a driver of aluminium beverage packaging growth despite recent inflation-induced consumer demand weakness. Segment volumes decreased 7.0 percent and 1.0 percent in the fourth quarter and full-year, respectively, excluding the 2022 Russian business sale headwind, and were down 7.0 percent and down 12.9 percent in the fourth quarter and full-year, respectively, including the 2022 Russian business sale headwind.
Beverage Packaging , South America
Beverage packaging, South America, segment comparable operating earnings for full-year 2023 were $266 million on sales of $1.96 billion compared to $275 million on sales of $2.11 billion in 2022. For the fourth quarter, comparable segment operating earnings were $125 million on sales of $616 million compared to $78 million on sales of $614 million during the same period in 2022.
Full-year and fourth quarter year-over-year sales reflect higher volumes, offset by the contractual pass through of lower aluminium costs and unfavourable regional product mix amid challenging economic conditions in Argentina.
Segment volumes increased 2.2 percent and 2.0 percent in the fourth quarter and full-year, respectively. Across South America, multi-year customer initiatives to increase the use of sustainable aluminium packaging are expected to continue into 2024, and in Argentina, the company continues to serve customers and assess risks given the dynamic economic and policy environment.