Sign in
BC

BALL Corp (BALL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was mixed: net sales were $2.88B (-0.8% YoY), GAAP diluted EPS was -$0.11 due to a $233M noncash Aluminum Cup impairment, while comparable diluted EPS rose to $0.84 (+7.7% YoY) .
  • EMEA delivered strong volume and price/mix with segment comparable operating earnings up to $90M (+12.5% YoY); North America weakened on end-consumer and beer exposure; South America saw favorable price/mix but lower volumes .
  • Management guided 2025 comparable diluted EPS growth of 11–14% and global volume growth of 2–3%, with CapEx ~$600M, interest expense ~$270M, and an effective tax rate slightly above 22% .
  • Capital returns accelerated: $1.96B returned in 2024; new $4B share repurchase authorization (through 2027) and a $0.20 quarterly dividend were approved ahead of Q4 results .
  • Near-term stock catalysts: explicit double-digit 2025 EPS growth guidance, aggressive buybacks, deconsolidation of Cups (post-Q4 JV announced), and capacity moves (Oregon new lines and Florida can plant acquisition) .

What Went Well and What Went Wrong

  • What Went Well

    • EMEA performance improved: “fourth quarter segment comparable operating earnings increased year-over-year driven by higher volume and price/mix” to $90M on $826M sales (+12.5% YoY earnings) .
    • Cost management and operating efficiency supported comparable EPS growth to $0.84 (+7.7% YoY) despite softer volumes; CFO: “we will deliver on our algorithm and exceed 10 percent comparable diluted EPS growth” in 2025 .
    • Strategic actions: long-term North America contract extension, two-line Oregon plant plan, and acquisition of Winter Haven, FL can facility for $160M (closed on call day), adding capacity near growth markets .

  • What Went Wrong

    • North America volumes: “persistent economic pressure on the end consumer and our exposure to U.S. domestic beer led to softer-than-expected volume” in Q4; segment comparable operating earnings fell to $142M (vs $156M) .
    • South America: supply/demand tightness in Brazil and continued weakness in Argentina drove Q4 segment volumes down mid-single digits despite price/mix tailwinds .
    • Non-GAAP adjustments: $233M Aluminum Cup impairment and other consolidation charges, plus an aerospace-sale working capital adjustment (-$60M), drove GAAP Q4 loss; free cash flow for FY24 was -$369M before adjusting for aerospace-related tax payments .

Financial Results

Sequential performance (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$2.959 $3.082 $2.880
GAAP Diluted EPS ($)$0.51 $0.65 -$0.11
Comparable Diluted EPS ($)$0.74 $0.91 $0.84
Comparable Operating Earnings ($USD Millions)$365 $413 $355
Operating Margin % (Comparable OE / Revenue)12.3% (calc from $365/$2,959) 13.4% (calc from $413/$3,082) 12.3% (calc from $355/$2,880)

Year-over-year Q4 comparison

MetricQ4 2023Q4 2024
Revenue ($USD Billions)$2.903 $2.880
GAAP Diluted EPS ($)$0.49 -$0.11
Comparable Diluted EPS ($)$0.78 $0.84
Comparable Operating Earnings ($USD Millions)$366 $355
Operating Margin % (Comparable OE / Revenue)12.6% (calc from $366/$2,903) 12.3% (calc from $355/$2,880)

Segment breakdown (Q4 2023 → Q4 2024)

SegmentSales ($MM) Q4 2023Sales ($MM) Q4 2024Comparable Op. Earnings ($MM) Q4 2023Comparable Op. Earnings ($MM) Q4 2024
Beverage Packaging, North & Central America$1,381 $1,291 $156 $142
Beverage Packaging, EMEA$739 $826 $80 $90
Beverage Packaging, South America$616 $563 $125 $126
Reportable Segment Sales$2,736 $2,680 ——
Other Sales$167 $200 ——
Total Net Sales$2,903 $2,880 Reportable Comparable OE $361 Reportable Comparable OE $358

KPIs and balance sheet context

KPIFY 2024
Net Debt ($MM)$4,788
Total Debt ($MM)$5,673
Cash & Cash Equivalents ($MM)$885
Interest Coverage (Comparable EBITDA/Interest)6.63x
Leverage (Net Debt/Comparable EBITDA)2.46x
Free Cash Flow ($MM)-$369
Adjusted Free Cash Flow ($MM)$397
Capital Returned in 2024 ($B: Buybacks+Dividends)$1.96
Weighted Avg Diluted Shares (000s), Q4295,356
Capital Expenditures ($MM), FY$484

Note: FY24 FCF reflects aerospace-sale tax payments; adjusted FCF normalizes for this .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Comparable diluted EPS growthFY 2025>10% long-term algorithm (Investor Day and reiterated) 11%–14% Raised (explicit range)
Global volume growthFY 2025Not provided2%–3% New
Net Debt / Comparable EBITDAYE 2025Not provided~2.75x New
CapExFY 2025Not provided~$600M, slightly below D&A New
Interest expenseFY 2025Not provided~$270M New
Effective tax rate (on comparable earnings)FY 2025Not providedSlightly >22% New
Corporate undistributed costs (reported in “Other”)FY 2025Not provided~$160M (lower interest income YoY) New
Share repurchasesFY 2025≥$1.3B (target for 2024–2025 ≥$3B) ≥$1.3B in 2025; $290M repurchased YTD (Feb 4) Maintained; pacing increased
Share repurchase authorizationThrough 2027Prior authorizations replaced$4B authorized (announced Jan 29, 2025) New
Quarterly dividendQ1 2025Not provided$0.20 per share (payable Mar 17, 2025) New
Aluminum Cup businessEarly 2025Pursue alternatives; deconsolidation expected JV closed Mar 21, 2025; deconsolidation executed Executed (post-Q4); reduces future drag

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
North America volume and beer exposureVolumes +1.1% QoQ; ongoing beer category challenges; plant closures and efficiency actions NA volumes -3.1%; efficiency gains; cost-outs continued Softer-than-expected Q4 volumes; 2025 volume to grow in line or slightly above market; long-term contract extension; Oregon and Florida capacity adds Gradual improvement expected; dependent on end consumer and mix
EMEA growth and sustainability6.5% volume growth; legislation tailwinds 6.7% volume growth; strong price/mix Strong Q4 volumes and earnings; high-end growth expected again in 2025 Sustained outperformance; capacity tightness emerging
South America supply/demandVolumes -3.2% on Argentina; price/mix favorable Volumes -10%; Brazil tight late Q3 Brazil tightness, Argentina weakness; reopening capacity (e.g., Pouso Alegre) to support growth above long-term range in 2025 Recovery in 2025 with better fit-to-serve
Tariffs and aluminum supply chainNot highlightedNot highlightedCEO mitigated potential $40–50M China chain issue to “couple million dollars”; uncertainty on Mexico cross-border rates (10% vs 25% materially different) Risk-managed near term; watch U.S.–Mexico trade outcomes
Capital returnOn track to return >$1.6B in 2024 $1.25B returned YTD by Q3 $1.96B in 2024; new $4B authorization; aggressive near-term buybacks Accelerating
Aluminum Cup strategyOngoing dragPursuing alternatives$233M impairment; deconsolidation planned Q1 2025; JV executed Mar 21 Drag reduced post-deconsolidation

Management Commentary

  • CEO Dan Fisher: “We continue to complement our purpose by unlocking additional manufacturing efficiencies, driving innovation and sustainability on a global scale... enabling consistent delivery of high-quality, long-term shareholder value creation” .
  • CEO Dan Fisher on 2025: “We feel confident in our ability to deliver 11% to 14% comparable diluted EPS growth” with 2–3% global volume growth .
  • CFO Howard Yu: “We anticipate year-end 2025 net debt to comparable EBITDA to be 2.75x... CapEx is expected to be slightly below D&A (~$600M)... interest expense in the range of $270M… effective tax rate slightly above 22%” .
  • CEO on tariffs: “We’ve mitigated what started as a potential $40–$50 million issue down to… a couple million dollars” while cautioning a 25% rate on Mexico would be more concerning for volumes .
  • Strategy/footprint: extension with a large customer “means that we will be building what is effectively a 2-line can plant in Oregon,” and acquisition of Florida can manufacturing (Winter Haven) for $160M closed on call day .

Q&A Highlights

  • Tariffs and supply chain: Management actively mitigated China aluminum supply chain risks; uncertainty persists on potential Mexico cross-border tariffs and consumer impacts .
  • North America earnings sensitivity: Hitting EPS targets requires at least flattish NA volumes; negative volume prints would challenge EPS even with buybacks .
  • South America: Q4 tightness in Brazil and Argentina weakness; plan to reopen capacity (e.g., Pouso Alegre), expecting growth above long-term range in 2025 with recoveries in Chile and Argentina .
  • Share repurchase pacing: ~$290M bought back YTD by call date; CFO expects to be “overly aggressive” near term and likely exceed $1.3B in 2025 .
  • Cups deconsolidation: Deconsolidation expected to reduce the historical ~$40M drag; ~+$25M improvement if JV timing is Q1 .
  • ROI of capacity moves: Florida acquisition targeted $25–$35M EBITDA run-rate by early 2027; Oregon expected to add ~$20M per year starting late 2026/early 2027 .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue was unavailable at time of retrieval due to request limits, so we cannot assess beat/miss versus Street. This constrained the ability to quantify estimate surprises via SPGI in this session [SPGI retrieval error].

Key Takeaways for Investors

  • Near-term setup: Double-digit EPS growth guide (11–14%) for 2025, explicit volume growth (2–3%), and aggressive buybacks create a supportive EPS algorithm despite NA demand uncertainty .
  • Regional mix: EMEA remains the growth engine (volume and margin tailwinds, tightening capacity), while South America should recover with capacity reopenings; NA improvement hinges on end consumer and beer category normalization .
  • Margin trajectory: Comparable operating margin held ~12–13% in 2H; further gains depend on volume normalization and supply chain efficiencies from Oregon/Florida footprint optimization .
  • Capital deployment: $4B authorization through 2027 and willingness to be “overly aggressive” near term in repurchases are likely stock-supportive; dividend is intact .
  • Risk watch: Tariff outcomes (Mexico), NA beer category dynamics, and macro consumer pressures are the primary swing factors for volume realization and EPS delivery in 2025 .
  • Non-GAAP clarity: Q4 GAAP loss was driven by identifiable noncash items (Cups impairment); deconsolidation via JV executed post-Q4 should reduce future drag .
  • Strategic positioning: Long-term contracts, selective capacity additions, and sustained sustainability tailwinds (EMEA legislation) support medium-term thesis of substrate share gains to aluminum .