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By the numbers
North & Central America beverage packaging sales: $1.54B
Down 14.4% year over year
EMEA beverage packaging sales: $902M
Down 12.5% year over year
South America beverage packaging sales: $489M
Up 4.9% year over year, with executives noting growth in Brazil
Q3 net earnings attributable to Ball: $203M
Down from $392M in Q3 2022
- Q3 results: The beverage packaging company saw sequential quarterly improvement in global beverage can shipments — down 3% in the third quarter versus down 5% in the second quarter — while acknowledging some “recent inflation-induced consumer demand weakness.” Ball reiterated expectations to have approximately $750 million in free cash flow in 2023.
- Bud Light commentary: In 2022, 13% of Ball’s overall sales were to Anheuser-Busch InBev and affiliates, its largest reported customer. Its Bud Light brand has been boycotted by some consumers this year. The company’s U.S. sales declined 13.5% in the recent quarter. CEO Dan Fisher said during a third quarter earnings call Thursday that while Ball partners with Constellation Brands, which markets top-selling Modelo beer, as well as other major brewers, “the fastest return for volume for Ball is that Bud Light or Budweiser figures out something to put on shelves in place of that.” As AB InBev spends aggressively to reestablish the Bud Light brand, “we'll benefit from that disproportionately as we have been adversely impacted by the Bud Light,” Fisher said.
- Facility closures: Ball reported it’s decided to close an aluminum slug manufacturing facility in Verona, Virginia, after a fire broke out in September, damaging 95% of the plant’s equipment — “the structure is a complete loss,” Fisher said. The facility was part of Ball’s extruded aluminum aerosol business and insurance coverage will handle the majority of the financial impact, Fisher said. A Nov. 1 worker adjustment and retraining notification to the state said 73 employees will be affected. Separately, Ball plans to close an aluminum beverage can manufacturing facility in Kent, Washington. According to Fisher, the leased facility, which Ball gained through the acquisition of Rexam, had two lines and 126 employees. That closure in the first half of 2024 should result in between $20 million and $30 million in cost savings next year, though some of those savings will be slightly offset by additional freight costs, Fisher noted.
- Other footprint changes: As for new capacity, the company reported it has permanently discontinued plans to construct a beverage can plant in North Las Vegas. Ball announced plans for the $290 million investment in 2021, aiming for the site to be operational by the end of 2022. Separately, in 2021 the North Carolina Department of Commerce touted Ball’s plans to invest more than $383 million in a new manufacturing hub in Concord, North Carolina. Following the second quarter of 2022, Ball announced it was delaying construction due to deceleration in customer demand. Additionally, Ball will “defer the Concord facility into 2028,” retiring CFO Scott Morrison said on the call.
- Aerospace deal: Ball announced in August it would sell its aerospace division to BAE Systems in a $5.6 billion deal. The process to achieve regulatory approvals is underway, and the guidance that the deal would close in the first half of 2024 is still appropriate, Fisher said. The business had $460 million in revenue during the quarter, down from $477 million a year prior.
