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    BALL
    Earnings call· Mar 2026(Q1 FY26)

    BALL Q1 FY26 earnings call BALL

    May 5, 2026 Source

    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

    15
    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

    3
    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

    Operational metrics

    11
    Global beverage volumes
    nearly 1%YoY
    Q1 FY26

    Reflecting slightly stronger-than-expected volumes in North America and in-line performance in South America, partially offset by volumes in EMEA.

    Comparable operating earnings growth
    10%YoY
    Q1 FY26

    Exceeded the 2x operating leverage objective for the quarter.

    Comparable diluted EPS growth
    22%YoY
    Q1 FY26

    Driven by strong operational execution, cost discipline, and capital allocation.

    Asset utilization levels
    mid- to high 90s
    Q1 FY26

    Operating certainly at asset utilization levels in the mid- to high 90s depending on the region on a percentage basis.

    Operating earnings per can
    —
    Q1 FY26

    Highlighted as a key metric for profitability and a focus for improvement across the business.

    FX impact on earnings
    $15 millionYoY
    Q1 FY26

    Approximately $15 million of positive earnings from translation for the company as a whole, with less than half of EMEA's gain related to FX.

    South America April volumes
    20%YoY
    April 2026

    April volumes were up 20% year-over-year, erasing all of the declines seen in Q1 FY26.

    Enterprise April volumes
    mid-single digitsYoY
    April 2026

    Enterprise-wide volumes were up mid-single digits as of April 2026.

    Contracted volume
    100%
    FY26

    The company is fully contracted for the current fiscal year.

    Contracted volume
    more than 90%
    FY27

    The company is more than 90% contracted for the next fiscal year.

    Contracted volume
    more than 50%
    balance of the decade

    The company is more than 50% contracted for the remainder of the decade.

    Industry KPIs

    7
    MetricValueDetails
    Dividendsquarterly cash dividend declaredUSD
    Share buybackat least $600 millionUSD
    Net debt leveragearound 2.7xx
    CAPEX capital programin line with GAAP D&AUSD
    Volume production growthnearly 1%%
    End market demand driversgrowing
    Adjusted underlying EBITDA10%%

    Orderbook & backlog

    2
    Millersburg facility capacityspoken forQ1 FY26

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

    New plant capacityessentially all capacityQ1 FY26

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

    Deals & partnerships

    2
    BenepackAcquisition 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.

    UACSale 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

    2
    Millersburg, Oregon facilityon 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 integrationcompleted
    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

    3
    Increased commodity costs due to Middle East tensionsthis 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 inslater 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 FY26Q1 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

    5

    Millersburg Start-up Costs

    Q2 FY26 onwards
    CurrentNot yet incurred in Q1
    TargetIncurrence 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.

    Q&A highlights

    8

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.