Ball announces 2022 net earnings
Logo: Ball Corporation
Ball Corporation has reported, on a US 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. 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 US 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.
“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 aluminium 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 aluminium 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 per cent 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 US. Aluminium beverage cans continue to outperform other substrates in the current retail pricing environment.
To ensure supply/demand balance and optimise low-cost production during the current macroeconomic environment, the company previously disclosed the permanent closures of two US 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 aluminium 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 unfavourable currency translation, the impact of higher inflation and energy costs across the region and the sale of the Russian business. Packaging mix shift to aluminium cans supported by ongoing packaging legislation in certain countries continues to be a driver of aluminium beverage packaging growth. Segment volumes increased 11% and 8.6% in the fourth quarter and full year, respectively, excluding Russia, and were down 7.1% and up 4.2% 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 aluminium 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 millionduring the same period in 2021. Year-over-year sales reflect lower volumes, the contractual pass through of higher aluminium 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% and 6.3%, 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 aluminium packaging are expected to continue, and in Brazil, package mix shift to aluminium is expected to improve later in 2023 due to more favorable aluminium price trends relative to 2022 levels.
