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Ball (BALL) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Discretionary· May 5, 2026

Source: earnings call transcript

Executive summary

Ball Corporation Q1 FY26 — Strong Start with Double-Digit EPS Growth and Operational Excellence

Ball Corporation delivered a solid Q1 FY26, driven by strong operational execution and cost discipline, resulting in double-digit comparable operating earnings and EPS growth. The company is leveraging attractive industry fundamentals, its global network, and the Ball Business System to drive continuous improvement and shareholder returns, despite geopolitical and macroeconomic complexities. Strategic capital allocation and long-term customer partnerships underpin its resilient business model.

Highlights

5

  • Comparable operating earnings grew 10% year-over-year, exceeding the 2x operating leverage objective for the quarter.

  • Comparable diluted EPS increased 22% year-over-year, driven by strong operational execution, cost discipline, and capital allocation.

  • Global volumes were up nearly 1% year-over-year, reflecting slightly stronger-than-expected volumes in North America and in-line performance in EMEA.

  • The company is on track to deliver approximately $800 million to shareholders in 2026.

  • Completed the Benepack acquisition, strengthening the European footprint and expanding capacity in Hungary and Belgium.

Concerns

3

  • South America volumes declined mid-single-digit percent year-over-year in Q1 FY26, reflecting customer timing and inventory positions.

  • Anticipate $35 million of start-up costs related to the Millersburg facility and U.S. domestication of ins in 2026, primarily in Q3 and Q4.

  • Middle East tensions have affected commodity costs, especially aluminum, though the company's business model allows for immediate pass-through of aluminum costs.

Guidance & targets

CategoryTargetConfidence
Comparable diluted EPS growth
10-plus percent
high materiality
High
Shareholder returns
in the range of $800 million
high materiality
High
North America volume growth
low end of our long-term range of 1% to 3%
medium materiality
Medium
EMEA volume growth (with Benepack)
above the top end of our long-term 3% to 5% range
medium materiality
High
EMEA operating leverage
2x
medium materiality
High
South America volume growth
low end of our long-term range of 4% to 6%
medium materiality
Medium
South America operating leverage
2x
medium materiality
Medium
Free cash flow
greater than $900 million
high materiality
High
Effective tax rate on comparable earnings
slightly above 23%
low materiality
Medium
Interest expense
in the range of $320 million
low materiality
Medium
Capital expenditure (CapEx)
in line with GAAP D&A
medium materiality
Medium
Adjusted corporate undistributed costs
in the range of $175 million
low materiality
Medium
Net debt to comparable EBITDA
around 2.7x
high materiality
High
Share repurchases
at least $600 million
high materiality
High
East Coast plant construction
potential to build another plant
low materiality
Low

Segment performance

SegmentRevenueYoYQoQMargin
North and Central America
Segment comparable operating earnings increased 2.5% in Q1 FY26. Volumes increased low single-digit percent year-over-year, reflecting slightly stronger demand, particularly in energy drinks and nonalcoholic beverages. The team continues to execute at a high level, supporting customers, managing costs and navigating a dynamic operating environment.
—low single-digit percent—increased 2.5%
EMEA
Segment comparable operating earnings increased 20% in Q1 FY26. Volumes were up low single-digit percent year-over-year. The team continues to perform well operationally. The Benepack acquisition was completed, strengthening the European footprint and expanding capacity in Hungary and Belgium. India and Myanmar plants are now included in this segment.
—low single-digit percent—increased 20%
South America
Segment comparable operating earnings were flat in Q1 FY26 despite volumes declining mid-single-digit percent year-over-year. The volume decline reflected customer timing and inventory position coming into the quarter. The team remained disciplined on cost and execution, positioning the business well for growth normalization. April volumes were up 20% year-over-year, erasing Q1 declines.
—mid-single-digit percent decline—flat

Orderbook & backlog

Millersburg facility capacity spoken for Q1 FY26

Capacity is spoken for many years to come by a long-term offtake agreement with a strategic customer.

New plant capacity essentially all capacity Q1 FY26

Company policy is not to build a new plant unless a long-term offtake agreement fills essentially all of its capacity.

Deals & partnerships

Benepack Acquisition of two beverage can plants in Hungary and Belgium.

Ball completed the Benepack acquisition, which includes two beverage can plants in Hungary and Belgium, further strengthening its European footprint and expanding capacity.

UAC Sale of a business in Saudi Arabia.

Ball sold its UAC business in Saudi Arabia. With the change in segment reporting, this divestiture now shows up as a headwind in comparable Q1 FY25 results for the EMEA segment.

Capital programs

Millersburg, Oregon facility on track towards full ramp up

Benefit:material volume to network, remove supply chain inefficiencies

The Millersburg facility is on track towards full ramp up in 2027. It will bring material volume to the network and remove supply chain inefficiencies, particularly in the Pacific Northwest. The plant is backed by a long-term offtake agreement with a strategic customer. Anticipate $35 million of start-up costs in 2026, primarily in Q3 and Q4.

Benepack acquisition integration completed
Start: Q1 FY26

Benefit:strengthening European footprint, expanding capacity in Hungary and Belgium, meaningful opportunity for volume growth and operating leverage

The acquisition of Benepack, including two plants in Hungary and Belgium, was completed in Q1 FY26 (effective February). This acquisition further strengthens Ball's European footprint and expands capacity, offering meaningful opportunity to drive volume growth and operating leverage as capacity is filled.

Risks & headwinds

Increased commodity costs due to Middle East tensions this year

affected our business like others, especially aluminum

Mitigation:Resilient business model allows immediate pass-through of aluminum costs to customers; supply chains are maintained as short as possible to avoid supply assurance impacts.

Start-up costs for Millersburg facility and US domestication of ins later this year, heavily in Q3, possibly Q4

$35 million

Mitigation:These costs support long-term volume growth and operating leverage, and are expected to distort operating leverage for the North America segment in the near term.

Mid-single-digit volume decline in South America in Q1 FY26 Q1 FY26

mid-single-digit percent year-over-year

Mitigation:Team remained disciplined on cost and execution, supporting earnings. April volumes were up 20% year-over-year, erasing Q1 declines, and growth is expected to normalize in the next three quarters.

What to watch in Q2 FY26

Millersburg Start-up Costs

Q2 FY26 onwards
Current Not yet incurred in Q1
Target Incurrence of $35 million, primarily in Q3/Q4

Why it matters

These costs will impact North America's operating leverage and overall profitability, providing insight into the ramp-up progress of a key growth project.

As we start to think about the rest of the year, you're going to see those costs come in later in this order and heavily in the third quarter, possibly a little in the fourth quarter as well.

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Q&A highlights

Are there any effects from Middle East tensions on costs or volumes, particularly in Europe, and how are these managed?

Ball has no direct business in the Middle East and maintains short supply chains. While commodity costs, especially aluminum, are affected, the company's resilient business model allows immediate pass-through of aluminum costs to customers. The can continues to win in all regions, including EMEA, with volumes accelerating in Q2.

“It is a fact, however, the cost of all things, commodities that are affected by the conflict in the Middle East to have affected our business like others, especially aluminum. And that's where our resilient business model comes to the 4. The way that our contracts work generally is we pass on the cost of aluminum to our customers on an immediate basis, and then they choose how they will manage that cost impact.”

asked by George Staphos · answered by Ron Lewis

2 min read 5 chapters

Detailed narrative

Strategic Pillars and Ball Business System

Ball Corporation's strategy is grounded in four pillars: executing exceptionally in its core business, maximizing its global network and customer partnerships, accelerating the substrate shift to aluminum, and managing complexity to its advantage. These pillars are integrated by the Ball Business System, which emphasizes commercial excellence, operational excellence, and continuous improvement. This framework, supported by a culture of collaboration, drives the company's resilience and ability to deliver strong financial results and long-term value creation.

Financial Reporting Changes for Enhanced Transparency

The company implemented changes to its financial reporting in Q1 FY26 to provide a clearer view of underlying operating performance. This included amending the definition of comparable operating earnings to exclude financing-related items (e.g., factoring fees, interest income) and reclassifying beverage can plants in India and Myanmar into the EMEA segment. These changes align reporting with how the business is managed internally, aiming for greater transparency without materially impacting comparable net earnings or diluted EPS.

Q1 Volume Dynamics and Q2 Outlook

Global beverage volumes increased nearly 1% year-over-year in Q1 FY26, with North America showing slightly stronger demand and EMEA performing in-line, partially offset by a mid-single-digit decline in South America due to customer timing and inventory. However, the company reported a strong start to Q2, with enterprise-level volumes up mid-single digits in April. South America's April volumes were up 20% year-over-year, effectively erasing the Q1 declines and bringing year-to-date volumes to flat.

Operational Excellence and Profitability Focus

The strong Q1 performance, particularly the 10% growth in comparable operating earnings, was attributed to disciplined execution and cost management. The company is intensely focused on improving 'profit per can' across all regions, with EMEA showing significant progress and runway for further improvement. This focus, combined with high asset utilization levels (mid-to-high 90s), is driving operating leverage and reinforcing the company's ability to generate earnings.

Strategic Capacity Management and Expansion

Ball operates in a relatively tight supply-demand environment, with high asset utilization. The company's capacity expansion strategy is disciplined, exemplified by the Millersburg, Oregon facility, which is on track for full ramp-up in 2027 and is backed by a long-term offtake agreement with a strategic customer. The Benepack acquisition also added critical capacity in Europe, supporting regional growth and operating leverage. Future capacity additions, like a potential East Coast plant, will also be contingent on similar long-term customer commitments.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.