By the numbers: Q4 and full-year 2023
2023 net sales: $14.03B
Down 8.6% year over year
2023 beverage packaging sales, North and Central America: $5.96B
Ball’s largest sales segment, down 10.9% year over year
2023 net earnings attributable to Ball: $707M
Down 1.7% year over year
- Q4 results: During the fourth quarter, better-than-expected volumes in North America and continued strength in Brazil offset regional softness in Argentina, Europe and the Middle East, said CEO Dan Fisher during a Q4 and full-year 2023 earnings call on Thursday. Outside of its regional beverage packaging segments, global extruded aluminum bottles and aerosol container volumes were up 6.6% in the quarter. Year-over-year results were hurt by a consumer boycott of Bud Light, which lowered demand from one of Ball’s most significant customers, Anheuser-Busch InBev. Ball also said results were impacted by the loss of its Russian business (sold in 2022) and Argentine hyperinflation and currency devaluation.
- Footprint optimization: In January, Ball formalized previously announced plans to shut down an aluminum beverage can manufacturing facility in Kent, Washington, with layoffs projected to affect 121 workers starting Feb. 29. Across North America, “we're running our plants much better than we were over the last two to three years,” Fisher said.
- CPG customers: Global shipments in 2023 were down 3.3% year over year (excluding the Russia sale’s impact) but would have been roughly flat versus 2022 if not for the Bud Light issue. Across CPGs, Fisher said customer promotional activity is expected to tick up ahead of the Super Bowl. Large CPG customer commentary suggests more competition this year, which Fisher said “should benefit us” and the industry.
- Aerospace divestiture: Ball’s sale of its aerospace division to BAE Systems is still expected to close in the first half of 2024. “Significant opportunity lies ahead to offset the financial impact of the projected aerospace sale,” Fisher said in prepared remarks. Net proceeds of the sale will in part support “leveraging our well-capitalized plant assets to grow the use of innovative, sustainable aluminum packaging across channels, categories, and venues.” CFO Howard Yu also said that proceeds will be used to reduce debt by approximately $2 billion, and about $2 billion will go toward share buybacks and shareholder dividends.
- Sustainable substrate: Asked about aluminum’s current carbon intensity positioning versus plastics, Fisher discussed the industry’s development of lower-carbon virgin aluminum production technologies, while also highlighting Ball’s recently introduced cup product with 90% recycled content. Fisher also noted customers are expected to face more stringent environmental reporting requirements in Europe and the U.S. “We're kind of sprinting after this carbon neutrality in a way that everybody's kind of got to put up or shut up. And I think we're in a good spot to deliver,” he said.
- Outlook: In part due to seasonality and the one-year anniversary of the Bud Light boycott, Ball expects year-over-year volume growth to improve after the first quarter “and accelerate further in 2025,” Fisher said. The company is targeting free cash flow in the range of $500 million, and capital expenditures of about $650 million. Ball plans to host a biennial investor day on June 18 in New York City.
