WESTMINSTER, Colo., - Ball Corporation (NYSE: BALL) today reported, on a U.S. GAAP basis, full-year 2022 net earnings attributable to the corporation of $719 million (including a net after-tax loss of $172 million, or 53 cents per diluted share for business consolidation and other non-comparable items) or diluted earnings per share of $2.25, on sales of $15.35 billion, compared to $878 million net earnings attributable to the corporation, or $2.65 per diluted share (including net after-tax charges of $279 million, or 84 cents per diluted share for business consolidation and other non-comparable items) on sales of $13.81 billion in 2021.
Highlights
Full-year and fourth quarter U.S. GAAP diluted earnings per share of $2.25 and 17 cents, respectively
Full-year and fourth quarter comparable diluted earnings per share of $2.78 and 44 cents, respectively
Full-year and fourth quarter global beverage can shipments up .8% and down 6.1%, respectively, including Russia
Full-year and fourth quarter global beverage can shipments up 2.1% and down .9%, respectively, excluding Russia
Year-over-year aerospace backlog increased 20% to $3.0 billion; contracts won-not-booked reached $5.0 billion
Positioned to generate free cash flow and EVA, achieve leverage targets and return value to shareholders in 2023
Reiterate ability to achieve $200 million of net inflation recovery and at least $150 million of cost savings in 2023
In 2023, positioned business to achieve long-term diluted earnings per share growth goal of 10 to 15 percent, inclusive of divested Russian operating earnings headwind
Ball's full-year 2022 comparable net earnings were $891 million, or $2.78 per diluted share compared to $1.16 billion, or $3.49 per diluted share in 2021.
Ball's fourth quarter 2022 net earnings attributable to the corporation on a U.S. GAAP basis, were $55 million, or 17 cents per diluted share, on sales of $3.55 billion compared to $297 million, or 90 cents per diluted share, on sales of $3.67 billion in the fourth quarter of 2021. Ball's fourth quarter 2022 comparable diluted earnings per share were 44 cents versus fourth quarter 2021 comparable diluted earnings per share of 97 cents.
Details of segment comparable operating earnings, business consolidation and other activities, business segment descriptions and other non-comparable items can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release. References to volume data represent units shipped. Year-over-year global and EMEA segment volume data exclude the impact of the Russian beverage can business sale completed in third quarter of 2022, unless specifically noted otherwise.
'The company's 2022 results were driven by macroeconomic and geopolitical conditions leading to lower volume across the Americas, higher costs to manage inventory levels and decisive actions to align supply/demand and sell our Russian operations in response to the war in Ukraine. Our employees' agility to execute during another year of unprecedented and challenging activities with speed and empathy speaks to their professionalism and ownership mindset. In 2023, inflationary cost recovery, actions to reduce costs and operating safely and efficiently to serve sustainable aluminum packaging demand and deliver critical aerospace programs will significantly improve results in 2023,' said Daniel W. Fisher, president and CEO.
Beverage Packaging, North and Central America
Beverage packaging, North and Central America, segment comparable operating earnings for full-year 2022 were $642 million on sales of $6.70 billion compared to $681 million on sales of $5.86 billion in 2021. For the fourth quarter 2022, segment comparable operating earnings were $99 million on sales of $1.51 billion compared to $162 million on sales of $1.52 billion during the same period in 2021. Full-year 2022 sales reflect the contractual pass through of higher aluminum costs.
Full-year and fourth quarter segment comparable operating earnings decreased year-over-year due to lower than anticipated volume, unfavorable fixed cost absorption and the timing effect of high-cost inventory ahead of customer sell through to align year-end inventory levels and customer mix. Segment volumes decreased 7.1 percent in the fourth quarter and were flat on a full-year basis due to lower than anticipated customer demand driven by higher year-over-year retail prices impacting consumer demand, particularly in the U.S. Aluminum beverage cans continue to outperform other substrates in the current retail pricing environment.
To ensure supply/demand balance and optimize low-cost production during the current macroeconomic environment, the company previously disclosed the permanent closures of two U.S. facilities, and customer demand associated with each facility is being absorbed into our capable North American plant system. Given recent volume trends, the earnings headwind and inventory levels are expected to normalize as we enter the second quarter 2023 busy summer selling season. Fixed cost-savings from plant closures and the contractual recovery of prior year inflationary costs will also improve year-over-year results, largely in the second half of 2023.
Beverage Packaging, EMEA
Beverage packaging, EMEA, segment comparable operating earnings for full-year 2022 were $358 million on sales of $3.85 billion compared to $452 million on sales of $3.51 billion in 2021. For the fourth quarter, segment comparable operating earnings were $47 million on sales of $748 million compared to $103 million on sales of $870 million during the same period in 2021. Full-year and fourth quarter sales reflect higher shipments and the contractual pass through of higher aluminum costs offset by unfavorable foreign exchange translation and the sale of the Russian operations during the third quarter of 2022. Historical results for the Russian operations will continue to be reflected in beverage packaging, EMEA segment results. See Note 1 'Business Segment Information' for additional information about the sale agreement and historical results.
Full-year and fourth quarter 2022 segment comparable operating earnings decreased year-over-year due to continued volume growth being more than offset by unfavorable currency translation, the impact of higher inflation and energy costs across the region and the sale of the Russian business. Packaging mix shift to aluminum cans supported by ongoing packaging legislation in certain countries continues to be a driver of aluminum beverage packaging growth. Segment volumes increased 11.0 percent and 8.6 percent in the fourth quarter and full year, respectively, excluding Russia, and were down 7.1 percent and up 4.2 percent in the fourth quarter and full year, respectively, including Russia.
The recently constructed Kettering, U.K., and Pilsen, Czech Republic, facilities will enable further growth for sustainable aluminum packaging across the region. In advance of Kettering and Pilsen ramping up production in late first quarter and early second quarter 2023, respectively, imports from the company's joint venture beverage can manufacturing facility in Saudi Arabia will continue to support customer demand across Europe.
During 2023, contractual recovery of 2022 inflation and cost savings are anticipated to offset the earnings headwind associated with the Russian business sale. See Note 1 'Business Segment Information' for additional information about the Russian historical results.
Beverage Packaging, South America
Beverage packaging, South America, segment comparable operating earnings for full-year 2022 were $275 million on sales of $2.11 billion compared to $348 million on sales of $2.02 billion in 2021. For the fourth quarter, comparable segment operating earnings were $78 million on sales of $614 million compared to $103 million on sales of $615 million during the same period in 2021. Year-over-year sales reflect lower volumes, the contractual pass through of higher aluminum costs and regional price/mix. Full-year and fourth quarter segment comparable operating earnings decreased year-over-year due to lower volumes, unfavorable regional customer/product mix and fixed cost absorption in Brazil.
Demand trends across the company's South American operations were challenging throughout 2022 due to the previously disclosed first quarter 2022 customer contract breach and lower than anticipated customer demand leading up to and during the World Cup. Segment volumes decreased in the fourth quarter and full year by 4.2 percent and 6.3 percent, respectively. To ensure supply/demand balance and optimize low-cost production, the company ceased operations at its Santa Cruz, Brazil, beverage can manufacturing facility and temporarily reduced production across its remaining Brazilian footprint. Across South America, multi-year customer initiatives to increase the use of sustainable aluminum packaging are expected to continue, and in Brazil, package mix shift to aluminum is expected to improve later in 2023 due to more favorable aluminum price trends relative to 2022 levels.
Aerospace
Aerospace segment comparable operating earnings for full-year 2022 were $170 million on sales of $1.98 billion compared to $169 million on sales of $1.91 billion in 2021. Backlog increased 20 percent year-over-year to $3.0 billion and contracts won, but not yet booked into backlog, finished the year at $5.0 billion. For the fourth quarter, segment comparable operating earnings were $44 million on sales of $506 million compared to $54 million on sales of $530 million during the same period in 2021.
Full-year and fourth quarter segment comparable operating earnings reflect solid execution on existing and new programs offset by supply chain inefficiencies. The segment continues to leverage its talent, manufacturing and test capabilities, engineering, and support workspace to secure additional defense, climate change and Earth-monitoring contracts to provide mission-critical programs and technologies to U.S. government, defense, intelligence, reconnaissance and surveillance customers.
Earlier this month, Ball completed the spacecraft bus for the Weather System Follow-on-Microwave (WSF-M) satellite, the U.S. Space Force's next-generation operational environmental satellite system. Ball also finalized environmental testing on the Microwave Imager (MWI) instrument and has started final space vehicle assembly, integration and testing. The Ball-built MWI sensor will take calibrated passive radiometric measurements at multiple microwave frequencies to measure sea surface winds, tropical cyclone intensity and additional environmental data. Upon delivery, WSF-M will provide mission data to Department of Defense's (DoD) environmental prediction systems that support all warfighter domains. In addition, it will broadcast real-time, actionable environmental intelligence to on-going military operations across the globe. Ball was also recently awarded the contract modification to develop and build the second WSF-M space vehicle, expected to be completed by late 2027.
Non-reportable
In addition to undistributed corporate expenses, the results for the company's global aluminum aerosol business, beverage can manufacturing facilities in India, Saudi Arabia and Myanmar and investments in the company's aluminum cup business continue to be reported in other non-reportable.
Full-year and fourth quarter 2022 results reflect higher year-over-year undistributed corporate expenses offset by higher demand across all aluminum packaging businesses in other non-reportable. Volume across the company's global extruded aluminum bottles and aerosol containers increased in the fourth quarter and full-year 2022, by 14.5 percent and 12.0 percent, respectively. Volume also increased in the other non-reportable beverage can manufacturing facilities for the fourth quarter and full-year 2022, by 48.5 percent and 48.2 percent, respectively, to support EMEA segment demand prior to new capital projects coming online in early 2023. During the quarter, the company's global aluminum aerosol customers and regional water and personal care brands continued to pursue next generation lightweight sustainable packaging solutions and expand usage of refillable aluminum bottles for certain venues.
Outlook
'We are controlling the things we can control in today's global economic and geopolitical environment. Following actions executed in the second half of 2022, we remain well-positioned for earnings and free cash flow growth, achieving appropriate leverage targets and returning value to shareholders,' said Scott C. Morrison, executive vice president and chief financial officer.
'As a fellow shareholder, 2022 was a very challenging year. We continue to actively manage our businesses through the lens of Drive for 10 and EVA. Our team is focused on delivering free cash flow, cost savings and operational efficiencies while ensuring tight supply/demand across our global plant network in the current environment. Our collective success will further complement much anticipated contractual inflationary cost recovery. Including or excluding the Russian business divestment headwind, we are positioned to achieve our long-term diluted earnings per share growth goal of 10 to 15 percent in 2023. We look forward to driving a circular economy through the broader use of sustainable aluminum packaging and exquisite environmental, aerospace and defense technologies to preserve our planet, unlocking value and EVA generation from existing operations and maximizing cash flow to deleverage and return value to shareholders in 2023 and beyond,' Fisher said.
About Ball Corporation
Ball Corporation supplies innovative, sustainable aluminum packaging solutions for beverage, personal care and household products customers, as well as aerospace and other technologies and services primarily for the U.S. government. Ball Corporation and its subsidiaries employ 21,000 people worldwide and reported 2022 net sales of $15.35 billion. For more information, visit www.ball.com, or connect with us on Facebook or Twitter.
Conference Call Details Ball Corporation (NYSE: BALL) will hold its fourth quarter 2022 earnings call today at 9 a.m. Mountain time (11 a.m. Eastern). The North American toll-free number for the call is 800-754-1366. International callers should dial +1 212-271-4657. Please use the following URL for a webcast of the live call:
https://edge.media-server.com/mmc/p/s6bu9xie
For those unable to listen to the live call, a taped replay will be available from 11 a.m. Mountain time on February 2, 2023, until 11 a.m. Mountain time on February 7, 2023. To access the replay, call 800-633-8284 (North American callers) or +1 402-977-9140 (international callers) and use reservation number 22024889. A written transcript of the call will be posted within 48 hours of the call's conclusion to Ball's website at www.ball.com/investors under 'news and presentations.'
Forward-Looking Statements This release contains 'forward-looking' statements concerning future events and financial performance. Words such as 'expects,' 'anticipates,' 'estimates,' 'believes,' and similar expressions typically identify forward-looking statements, which are generally any statements other than statements of historical fact. Such statements are based on current expectations or views of the future and are subject to risks and uncertainties, which could cause actual results or events to differ materially from those expressed or implied. You should therefore not place undue reliance upon any forward-looking statements and they should be read in conjunction with, and qualified in their entirety by, the cautionary statements referenced below. Ball undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key factors, risks and uncertainties that could cause actual outcomes and results to be different are summarized in filings with the Securities and Exchange Commission, including Exhibit 99 in Ball's Form 10-K, which are available on Ball's website and at www.sec.gov. Additional factors that might affect: a) Ball's packaging segments include product capacity, supply, and demand constraints and fluctuations and changes in consumption patterns; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather and related events such as drought, wildfires, storms, hurricanes, tornadoes and floods; footprint adjustments and other manufacturing changes, including the startup of new facilities and lines; failure to achieve synergies, productivity improvements or cost reductions; unfavorable mandatory deposit or packaging laws; customer and supplier consolidation; power and supply chain interruptions; changes in major customer or supplier contracts or loss of a major customer or supplier; inability to pass through increased costs; war, political instability and sanctions, including relating to the situation in Russia and Ukraine and its impact on Ball's supply chain and its ability to operate in Europe, the Middle East and Africa regions generally; changes in foreign exchange or tax rates; and tariffs, trade actions, or other governmental actions, including business restrictions and orders affecting goods produced by Ball or in its supply chain, including imported raw materials; b) Ball's aerospace segment include funding, authorization, availability and returns of government and commercial contracts; and delays, extensions and technical uncertainties affecting segment contracts; c) Ball as a whole include those listed above plus: the extent to which sustainability-related opportunities arise and can be capitalized upon; changes in senior management, succession, and the ability to attract and retain skilled labor; regulatory actions or issues including those related to tax, environmental, social and governance reporting, competition, environmental, health and workplace safety, including U.S. Federal Drug Administration and other actions or public concerns affecting products filled in Ball's containers, or chemicals or substances used in raw materials or in the manufacturing process; technological developments and innovations; the ability to manage cyber threats; litigation; strikes; disease; pandemic; labor cost changes; inflation; rates of return on assets of Ball's defined benefit retirement plans; pension changes; uncertainties surrounding geopolitical events and governmental policies, including policies, orders, and actions related to COVID-19; reduced cash flow; interest rates affecting Ball's debt; and successful or unsuccessful joint ventures, acquisitions and divestitures, and their effects on Ball's operating results and business generally.
Condensed Financial Statements (Fourth Quarter 2022): See full release at:
https://www.ball.com/newswire/article/124161/ball-reports-2022-results
BALL CORPORATION 
