Ball : 2020 Virtual Investor Day transcript

Ball Corporation 2020 Virtual Investor Day Transcript

October 6, 2020

Document includes important disclaimers at the conclusion of transcribed comments.

Slides referenced in this presentation transcript are available for download at www.ball.com/investors.

Corporate Speakers:

• John Hayes; Chairman, President & CEO
• Kathleen Pitre; Chief Commercial & Sustainability Officer
• Dan Fisher; COO, Global Beverage Packaging
• Rob Strain; SVP & President, Ball Aerospace
• Scott Morrison; SVP & CFO
• Colin Gillis; President, Beverage Packaging North & Central America
• Ron Lewis; President, Beverage Packaging EMEA
• Carlos Pires; President, Beverage Packaging South America
• Dave Kaufman; COO, Ball Aerospace
• Stan Platek; VP & General Manager, Global Aluminum Aerosol

PRESENTATION

Operator: Greetings, and welcome to the Ball Corporation 2020 Investor Day call. As a reminder, this call is being recorded Tuesday, October 6, 2020. I would now like to turn the conference over to John Hayes. Please go ahead, sir.

John Hayes, chairman, president & CEO: Great. Thank you, Carlos, and good morning, everyone. Welcome to Ball Corporation's Virtual Investor Day. First and foremost, we hope you, your families and colleagues are safe and healthy, and we look forward to the future when we can all get together and share cold canned beverage together.

Now a few housekeeping items before we begin. Today's presentation is also available via webcast on ball.com/investors. For reference, today's slides as well as a data sheet, map of locations and sustainability materials are available for download under the "resources" tab in the webcast as well as on the "presentation" tab of ball.com/investors.

A rough schedule of our event can be found on Slide 5. We do plan to take a couple of short breaks throughout today's event, and we appreciate your patience as we navigate the speaker and break transitions during the virtual event. Following the conclusion of our formal remarks, we will host a Q&A session, and we anticipate Q&A starting at approximately 10:00 a.m. Mountain time, noon Eastern Time. However, the actual start time may vary.

So if we could advance to Slide 3, the forward-looking statement. Now before I begin, I want to remind you that the information provided during this event will contain forward- looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ

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are noted on Slide 3 and are in the company's latest 10-K and in other company SEC filings as well as company news releases.

So if we can advance to Slide 4, participating management. Joining me today in speaking order are Kathleen Pitre, Chief Commercial and Sustainability Officer; Dan Fisher, Chief Operating Officer of Global Beverage Packaging; Rob Strain, President of our Aerospace Business; and Scott Morrison, Senior Vice President and Chief Financial Officer. During the Q&A session, we will be joined by Colin Gillis, President of Beverage Packaging, North & Central America; Ron Lewis, President of Beverage Packaging for EMEA; Carlos Pires, President of Beverage Packaging, South America; Stan Platek, VP and General Manager of our Global Aluminum Aerosol Business; and Dave Kaufman, Chief Operating Officer of our Aerospace Business.

So we advance to Slide 5, the agenda. In short, our time is now. 2020 marks the 140th anniversary of Ball Corporation, and I'm excited to say that I truly believe that the best is yet to come. As shown on Slide 5, our agenda today will focus on the long term and how our company, products and team are able to deliver sustainable growth. With the end of the third quarter closed, we are in a blackout period when it comes to discussing quarterly results. And, on November 5, we will host our third quarter earnings conference call.

So if we could advance to Slide 6, our Drive for 10. During my remarks, I'm going to spend a bit more time than we usually do at investor meetings talking about our culture, our values, our history and our people to give you context as to why we do what we do. The others, Kathleen, Dan, Rob, Scott, Colin, Ron, Pires, Dan and Dave, will fill you in on the specifics as to why we get so excited looking forward.

Our company is built upon the foundation of Drive for 10, which we formalized a decade ago. It's a mindset about perfection with a greater sense of urgency around our future success. Despite the profound changes and circumstances happening in the world today, we truly believe that nothing fundamental has changed about our opportunity set going forward. At Ball, we know who we are, we know where we're going and we know what is important. This isn't just a bunch of words on a poster, it's an ethos that was formed decades ago.

And if we could flip the slide to Slide 7, our legacy. It was because of what 5 brothers started 140 years ago, we are all here today. Legacy is indeed not what you leave for someone but rather what you leave in someone. At its core, it is they that began traditions and cultures that endure today: our values of uncompromising integrity and doing things right the first time; of being close to our customers, listening to them, understanding their needs and hopefully being a true partner to them; of focusing on attention to detail, and whether we are making hundreds of millions of products a day or building something that doesn't have a second chance at perfection, that attention to detail is the difference between good and great; of being innovative and pushing and trying new things and never taking no for an answer.

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We're behaving as true owners for all of us are, and we take great pride in the alignment every employee shares with every owner of our company. To the Ball brothers, these were not words either. They were a belief system that was built into who they were, who we are and what is important.

If you could advance to Slide 8. At our 140th anniversary year, we celebrate our culture and our colleagues, present and past, that sustained our great company. Throughout our history, we've constantly evolved. We've been in 50 different businesses, whether it was the iconic glass jar with zinc lids or making penny blanks for the U.S. government, making picture tubes for television sets or prefabricated housing after the Second World War. We've even been in the plastic business three different times. Our most recent businesses are aluminum cups and our enterprise intelligence business. Dan Fisher will talk a bit about the cups business a bit later.

Sometimes we get asked what's next. What does Ball look like 10 years from now? And the truth is I don't know. But what I do know is this, we have more opportunities in what we are doing right here, right now than I've ever seen in my career. You're going to hear a lot about that today. At the same time, when you stay curious and inquisitive and persistent and humble, additional opportunities come your way.

As fellow shareholders, you should not expect that we will be doing anything other than what we've always done, which has tried to be the best in everything we do, execute, execute, execute and being open to being innovative. Over the long term, what we make may change, it has for the last 140 years, but who we are never will.

If you could please advance to Slide 9, Leadership Team E-mail. When we entered 2020, we were excited. We were in the midst of our opportunity of a lifetime, the opportunity we framed in our 2018 Investor Day, and everything was lining up. We were excited about new customers, new conversions, new categories. The first couple of months has started out very strongly, and then COVID came.

Many of you know me and that I take lots of notes in meetings. I get inspiration and creativity by writing things down. This was a note that I wrote to our leadership team on March 14, and I apologize for it being a bit fuzzy, but we did that for confidentiality purposes.

It was the end of one of the craziest weeks I'd ever seen. It started with a trip to Brazil in the midst of the oil disagreement between Russia and Saudi, leading to a rout in the equity markets early in that week. And after cutting short the trip and coming home, we found grocery stores where shelves were literally bare, bare of fresh produce, bare of meats, bare of toilet paper, bare of cleaning supplies.

I remember laying awake that Friday night thinking, "What in the heck is going on? And what does all this mean for our company?" And I also remember thinking that night that our Drive for 10 framework is our guiding sense of principles, whether it is behaving like long-term owners, keeping our employees safe and ensuring we remain customer-

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focused, and that would provide clarity as to what to prioritize and how to make appropriate decisions.

So I shared with our team that we may experience some demand destruction in the near term but that our end markets have tailwind and will bounce back; over the last 20 years, whether it was 1998 or 2003, 2008, the German deposit laws situation, sequestration, what have you, that our end markets are resilient; that by doubling down and being close to our customers, we can be a calming voice in a chaotic world; that this is our time to shine and let's not get defensive or reticent about our once-in-a-lifetime opportunity; that a crisis like this can accelerate our strategic positioning if we focus on caring for one another, our customers and our communities. I asked at the end who's in, and of course, the resounding response was "we're all in."

So if you could advance to Slide 10, please. So let me give you a glimpse of where this conviction came from. Someone once said that the definition of a gut feeling is an unarticulated accumulation of experiences. And I thought I'd share with you what this slide reflects, some of the work that we did for our Board of Directors back six months prior, in October 2019, a time that we didn't know we were 6 months from a global pandemic and economic crisis. We walked our Board through a variety of various charts that highlights some of our past experiences and what recession-resistant looked like through a Ball lens by using these and other slides, showing beverage can volume versus GDP going back to the late '90s. By the way, the bars are GDP and the lines are can volumes.

During crises, people still eat and drink, governments still need intelligence, surveillance and reconnaissance. And as a result, we have always operated essential businesses. Whether we look back two decades in our history or a century, Ball has weathered political unrest, economic crises, changing consumer trends and technologies. By knowing who we are, what is important, where we're going and being able to invest when others may be unable, our momentum has always sustained.

So if we move to Slide 11, please, and that is where we find ourselves today. We did experience short-term demand declines in some of our markets and it did bounce back. Our business unit executives will speak to that shortly. We've tried to create as safe as an environment for our people as possible, and they have responded by doing amazing things. We have doubled down on being close to our customers to understand even better the long-term opportunities in front of us and as a result, have even greater conviction today than we did on March 14 that our strategy is working and that it is indeed a once- in-a-lifetime opportunity.

During 2020, we have launched the aluminum cup into retail, introduced new systems to enhance employee connectivity, development and training and announced and closed on the Brazilian Tubex acquisition in our aluminum aerosol business to expand our geographic footprint in South America.

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