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Ball Corporation is a supplier of aluminum packaging products such as extruded aluminum aerosol containers, reclosable aluminum bottles, aluminum cups, and aluminum slugs for the beverage, personal care, and household products industries in the United States, Brazil, and internationally. Ball is the world’s largest producer of aluminum beverage cans.

Q3 2026

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Ball (BALL): Company Profile, Stock Price, News, Rankings

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Ball

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Greetings, and welcome to the Ball Corporation's Q3 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations. Thank you, sir. You may begin.

Good morning, everyone. This is Ball Corporation's conference call regarding the company's Q3 2026 results. During this call, we will reference our Q3 2026 earnings presentation available through this webcast and our website at investors.ball.com. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, other SEC filings, and in today's earnings release and earnings presentation. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release.

In addition, this presentation and the release include a summary of non-comparable items, as well as reconciliation of comparable net earnings and diluted earnings per share calculations. I would now like to turn the call over to our CEO, Ron Lewis.

Thank you, Brandon. Today, I'm joined on our call by Dan Rabbitt, Senior Vice President and Chief Financial Officer. I will provide some brief introductory remarks and discuss Q3 and year-to-date 2026 financial performance and our outlook for the remainder of 2026. Dan will touch on key metrics, and then we will finish up with closing comments and Q&A. We continue to make progress toward our long-term value creation goals. The fundamentals supporting our current performance and long-term opportunities remain strong. Packaged liquid volumes continue to grow, and aluminum cans continue to gain share as customers and consumers increasingly value convenience, performance, and sustainability. These trends continue to support beverage can growth across each of our regions. Ball remains well-positioned to benefit from our long-term customer partnerships, a well-contracted portfolio, EVA mindset, and unmatched global footprint.

Together, these advantages have supported high utilization and volume growth above our long-term global target of 2% to 3%. We continue to see attractive opportunities to grow volumes and create value through disciplined EVA-accretive investments. Our recently announced facilities in India and Germany are part of that strategy and will position us to support customer growth and drive continued volume and EVA growth through the end of the decade. Our financial discipline will continue to be front and center as we focus on driving shareholder value. A healthy balance sheet and capital expenditures averaging depreciation and amortization over time give us the opportunity to continue returning value to shareholders through dividends and share buybacks. Operationally, we remain focused on steady progress. Standardization, cost discipline, and the Ball Business System are helping us to reduce complexity, improve productivity, and build a more repeatable operating model as volumes grow.

With attractive industry fundamentals, strong customer relationships, disciplined execution, financial strength, and an operating system built for continuous improvement, Ball remains well-positioned to deliver on our 2026 objectives and drive long-term value for shareholders. Our performance reflects the strength of our business and the disciplined execution underway across Ball. The strategy we have discussed in prior quarters remains clear and grounded in four strategic pillars. First, we remain focused on executing in our core business. Second, we stay close to our customers and maximize the strength of our global network. Third, we continue to accelerate the substrate shift to aluminum and expand into targeted categories. Fourth, we manage complexity to our advantage. We also recently announced leadership changes in two of our beverage businesses, with Carey Causey taking leadership of our North and Central America and Scott Vail taking leadership of our EMEA businesses.

Both bring significant commercial and operational experience, and I'm confident they'll continue strengthening our customer partnerships while driving disciplined execution across these businesses. Again this quarter, our people connected to our strategic pillars through the Ball Business System. They have done an excellent job supporting our customers and managing strong growth through the summer selling season in North America and EMEA while preparing for the upcoming summer selling season in South America. The combination of continued demand growth for aluminum packaging, our strategy, and the Ball Business System is designed to drive EVA dollar growth and support comparable diluted EPS growth of 10%+ over the long term. These outcomes align how we are compensated with how we create value for shareholders. Our long-term financial framework remains clear.

We are focused on growing comparable operating earnings 4% to 6% through volume growth and operating leverage while consistently returning capital to shareholders through share repurchases. Together, those actions support our long-term target of delivering 10+% comparable diluted EPS growth. Growing EVA dollars requires disciplined investments that generate returns above our cost of capital. This approach has been central to our long-term value creation and should provide additional opportunities as volumes grow across our geographic footprint. With that context, I would like to provide more detail on our investments in India and Germany. Starting with Germany, we continue to see strong growth in Europe, including demand associated with a strategic energy drink customer. Our long-term partnership, contractual commitments, and attractive EVA returns support our investment in a multi-line facility in Baruth, Germany. We expect the facility to be ramping up in late 2028.

As we announced via press release last month, we will also be investing in a multi-line facility in Uttar Pradesh, India. The plant will further expand our manufacturing footprint in India and is expected to be operational in 2029. India continues to be one of Ball's most exciting growth markets, and this investment reflects our confidence in the country's long-term economic potential and the continued growth of aluminum packaging. Turning to our third quarter results, we continued to build on the strong performance we discussed last quarter. Global volumes improved 4.7% year-over-year, with growth in each region reflecting continued momentum across our portfolio and keeping us on track to exceed the full-year volume outlook we outlined earlier this year.

Comparable operating earnings grew 2.5% year-over-year, supported by disciplined cost management, commercial performance, and continued progress through the Ball Business System, including record comparable operating earnings for both Ball as a whole and our EMEA business, even as we absorbed the previously discussed North American startup costs. Comparable diluted EPS increased 6.8%, reflecting comparable operating earnings performance and disciplined capital allocation. Our first nine-month performance reinforces our confidence in delivering 10%+ comparable diluted EPS growth for the full year. We remain focused on shareholder returns and are on track to return at least $800 million to shareholders in 2026. Operationally, we continue to advance our priorities, including integrating the two plants we purchased in Hungary and Belgium to expand EMEA capacity and continuing to make progress on our Millersburg facility ramp-up, which remains on track towards full capacity in 2027.

Overall, this was a strong third quarter and first nine months, reinforcing the resilience of our business and our confidence in the 2026 framework. With that context, I'll let Dan walk you through the details of our third quarter financial performance and provide more color on our expectations for the remainder of 2026. Over to you, Dan.

Thanks, Ron. I'll start by walking through our third quarter 2026 financial performance and provide additional context on the first nine months of the year and our expectations for the balance of the year. The business continues to perform well. In the third quarter, global aluminum shipments increased 4.7%, and year-to-date, we have grown our volumes 3.4%. Our performance is supported by growth across each business unit, and as Ron mentioned, puts us ahead of our 2%-3% global volume expectations. As Ron also noted, third quarter comparable operating earnings increased 2.5% year-over-year, and comparable diluted EPS increased 6.8%. On a year-to-date basis, comparable operating earnings increased 6.4%, and comparable diluted EPS increased 14%. The quarterly and year-to-date performance remains consistent with the financial framework we laid out for 2026.

In North and Central America, volumes increased low single digits year-over-year, consistent with our expectation for full-year growth at the low end of our long-term 1%-3% range. Demand remained constructive in energy drinks and non-alcoholic beverages. Segment comparable operating earnings declined 2.3% year-over-year as higher cost, including approximately $10 million of cost related to starting up Millersburg, were partially offset by favorable volume and price mix, primarily from metal pass-through timing. We now expect full-year cost related to starting up Millersburg to total approximately $25 million. Adding further color on the fourth quarter, we expect the metal pass-through timing that we experienced in the third quarter to reverse in the fourth quarter, impacted by metal price declines and timing with our large customers who procure their own metal.

In EMEA, volumes increased mid-single digits year-over-year, supported by underlying demand and the contribution from the two plants we acquired in Hungary and Belgium, partially offset by last year's sale of our Saudi Arabian business. Third quarter segment comparable operating earnings increased 3.7% and have increased 9.1% year-to-date. Third quarter results reflect higher volumes and favorable price mix, partially offset by higher cost. We also continue to make progress integrating the Hungary and Belgium facilities. For 2026, with the inclusion of these newly acquired plants, we continue to expect volume growth above the top end of our long-term 3%-5% range. I also want to congratulate our EMEA team for delivering record-high quarterly comparable operating earnings. Their consistent performance over many years set the foundation for this record quarter. I look forward to many more record quarters and years to come for this part of our business.

In South America, volumes increased low double digits year-over-year as the business continues to see strong volume growth across the region. Third quarter segment comparable operating earnings increased 19.5% and year-to-date have increased by 24.2%. Third quarter results reflect higher volumes and favorable price mix. Looking ahead, we expect volume growth in the middle of our long-term 4%-6% range in 2026. Focusing on modeling details for 2026. As Ron noted, the resilience of our business and stability provided by our contractual pass-through mechanisms gives us confidence that we remain on track to deliver 10%+ comparable diluted EPS growth in 2026. CapEx is now expected to be $650 million in line with GAAP D&A in 2026. With the higher CapEx expectations, we anticipate free cash flow in the range of $900 million.

Our 2026 full-year effective tax rate on comparable earnings is expected to be slightly above 23%. Interest expense is expected to be in the range of $310 million. Reported adjusted corporate undistributed costs recorded in other non-reportable are expected to be in the range of $165 million. We anticipate year-end 2026 net debt to comparable EBITDA to be 2.7 times, and we will repurchase at least $600 million of shares, which will bring our total capital return to shareholders to approximately $800 million. Last week, Ball's board declared its quarterly cash dividend. With that, I'll turn it back to Ron.

Thanks, Dan. To close, Ball is well-positioned to win. Packaged liquid volumes continue to grow, aluminum cans continue to gain share, and our strong customer partnerships and unmatched global footprint position us to capture that growth and deliver value to our customers and shareholders. We are focused on disciplined execution across our business. Through volume growth, operating leverage, and the Ball Business System, our long-term objective is to grow comparable operating earnings 4%-6% annually. At the same time, our EVA mindset guides how we invest in our business and return capital to shareholders through consistent share repurchases. Together, these drivers support our long-term target of delivering 10%+ comparable diluted EPS growth. Our investments in Germany and India are examples of that approach.

They are supported by long-term customer demand and attractive returns, and will position us to drive continued volume and EVA growth through the end of the decade. We have attractive industry fundamentals, strong customer relationships, a healthy balance sheet, and meaningful opportunities to improve how we operate. We remain confident in our 2026 outlook and in our ability to create value for our shareholders over the long term. Before we open the call for questions, I want to thank our employees around the world. Their disciplined execution, commitment to our customers, and focus on continuous improvement are what make this performance possible. With that, Dan and I will be happy to take your questions.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Ghansham Panjabi with Baird. Please proceed with your question.

Thank you, operator. Good morning, everybody. Ron, just first off, on the higher inflation dynamic impacting your customers from an operating cost standpoint, obviously everyone in the supply chain, including you, how do you think that evolves as it relates to volumes and their focus on volumes versus price? Obviously, it hasn't impacted you so far this year, but certainly costs are up quite a bit sequentially in context of the consumer already struggling with affordability. How do you see that netting out?

Hi, Ghansham. Thanks for the question. Hope you are well. What I would say is, we are not macro economists here. The can is winning. It wins in all of our geographies, as evidenced by a really strong volume growth again this quarter and this year on top of a really strong quarter last year and a strong year last year. The can has a number of attributes. It is incredibly robust in the supply chain, it sells well as a single package, and it delivers great value to consumers on behalf of our customers in a multipack format. Again, it continues to win, and it continues to deliver great value to consumers. We think really positively about the opportunity for the can to continue to win regardless of the sort of macroeconomic backdrop.

Okay. On that, it seems like every major company seems to be focusing on introducing ready-to-drink cocktails and so on and so forth. Can you just share your thoughts on whether you think that category could be a needle mover for the industry, and also, how are you positioning to capitalize on that? Thank you.

Thanks, Ghansham. I would say we love all of our customers the same. We love when they sell their products in our cans. I think, regardless of the category, innovation is a key to growth for them, and we help them innovate by delivering the broadest array of different sizes and shapes of cans in our industry. That category you are speaking of specifically appeals more towards the 12-ounce or 330 ml or 355 ml Sleek package, and that is how we aim to deliver that innovation for them. Can it be a needle mover? I think all consumers are looking for innovation. They are looking for an opportunity to try something new. I believe in the long term, our customers are going to find ways to innovate and deliver great-tasting products to the consumer.

Okay. Just to clarify, how big is RTDs as a percentage of the industry at this point, volumetrically?

It's less than 5%. It's single digits. So it's not huge at the moment, but it is gaining share.

Our next question comes from the line of Anthony Pettinari with Citi. Please proceed with your question.

Hey, you had really good double-digit growth in South America in Q3, and I'm just wondering as we kind of move into the high season, if you can talk about what you're seeing and expectations for Q4, and maybe what you're seeing between sort of the Brazil and non-Brazil regions.

Sure thing. First of all, it gives me the chance to say how pleased we are and how proud we are of our South America team and the business that they are delivering for us this year. We are really proud of where they have come from. That team and our business there is really well-positioned to navigate the ups and downs that we see sometimes in South America. We are super confident in their ability to deliver going forward. Our strong volumes, I think, this year could be attributed to our customer portfolio, which I think is unrivaled and envied by everyone else. We are really pleased that we get to serve our customers. It is an incredibly broad business in South America, not just Brazil, but all of the other markets that we have in South America, especially the Southern Cone.

Basically, if you take Brazil and the rest of our markets, they all grew in total double digits, and they were more or less in line with one another. If you take the balance of the countries outside of Brazil and Brazil, we grew double digits. How do we feel about the balance of the year coming into the summer selling season? We think we will be much more back in line. Instead of double digits, we will be within our 4%-6% long-term outlook for volume growth, and that is the way the quarter is starting. It is starting quite well there, right in line with what we expect.

Got it. That is very helpful. Then just thinking about the broader business, understand you are not giving guidance, but is there any kind of early thoughts on 2027 and whether you have any particularly higher or lower level of contract renewals in any region? You obviously had very strong above-target volume growth this year. We had a World Cup. Is next year maybe a tougher comp? Or just kind of any early thoughts or any kind of things we should keep in mind as we look to 2027?

Yeah, sure. Thanks, Anthony. I would say, if we go back, number one, we have grown volumes the last seven quarters in a row. 2025, we grew 4%+, which is well above our 2%-3% long-term outlook. On top of that relatively challenging volume growth, we will deliver above our long-term outlook again this year. Really strong volume growth across all of our businesses. Q4 is shaping up the exact same way. As we think about 2027, we are well-contracted. There is nothing significant up for renewal, and everything that we see from our customers is that we will see certainly in line with our 2%-3% volume growth. We are confident in that long-term outlook will be delivered in 2027 as well across our business.

Okay. That is very helpful. I will turn it over.

Our next question comes from the line of George Staphos with Bank of America. Please proceed with your question.

Hi, everyone. Good morning. Thanks for taking my question, and thanks for all the details. I wanted to spend the first question on cash flow. Ron, if you could talk to us, and Dan, talk to us about the outlook as much as possible for CapEx next year with Germany now coming on. Would you expect that CapEx can be kept in line with D&A, or will it necessarily be higher? You said CapEx in line with D&A over the course of a cycle, so that does not mean quarter to quarter, year to year, but want to see what thoughts you could share there. Relatedly to cash flow, maybe it is just timing, but working capital seems to be a bit more of a headwind thus far in the year.

The free cash flow guide, the trim is associated with the CapEx, so it implies that working capital being normalized by the fourth quarter, but want to see what you have to say there. Thanks. Then a couple follow-ons.

Great. Thanks, George. Why don't we let Dan tackle those first two?

Yeah, I think the first question was about cash flow and CapEx, and the second one was about working capital. We start with free cash flow. Obviously, we have higher capital spending this year, as you noted. We made a point of calling out $650 million of CapEx this year, which is at the depreciation and amortization rate. With that, we felt good about being around the $900 million of free cash flow. I think the second part of that question was about working capital in particular, and I think you answered a little bit on how I will answer it, is that we do expect it to start to normalize a little more in the fourth quarter. We've had higher inventories throughout the year, really to support the growth, and there were some challenges in our supply chain when the year started.

We do think we'll bring it back in line by the end of the year.

Hey, Dan, part of the question was also next year on CapEx with Germany and India. Where would you peg it relative to depreciation?

Yeah, the 2027 outlook, we're doing our budget still right now, but we've been operating kind of with this targeting depreciation and amortization spending over time. That kind of puts us in an 80%-120% band in reality on how it'll flow through. So I think you can expect it to come in somewhere midpoint to a little above next year in that range.

Okay. That's fair. Last one from me, and I'll turn it over. Look, in aggregate, the performance was in line better. Just curious, in Europe, margins were a little bit weaker than we were looking for. How did European margin trend versus your expectation? If you can just quickly, Ron, touch on the management transitions that you'd mentioned with Carey gaining a little bit of additional responsibility, that'd be helpful. Thanks, and good luck in the quarter.

Thanks, George. From a European perspective, we are growing above our long-term growth outlook, just like we did last year. So again, we are very tight, just like we were in North America. So we're above that 3%-5% when we say mid-single digits for this quarter of the year. We're above the 5% growth. That's why we were really pleased to be able to acquire these two plants in Hungary and Belgium. But the fact of the matter is they are not fully operational, running 24/7, delivering all of the cans that they have the ability to deliver right now. So that growth has created operational friction, just like it has in North America. So that's primarily where we see the challenge. As far as our Does that answer your question, George, on that topic?

It does very well. On the management transitions?

Yeah. Our culture, the culture of Ball, is a culture of ownership, and our businesses own their results. That is the first thing I would say. Both Carey Causey and Scott Vail are proven operational and commercial leaders with really strong experience within Ball. I am really confident in both of them, and I think more importantly, the teams that they lead and the ownership that they have of their businesses serving our customers. Again, what I would want you to take away from anything we do in this company relative to our leaders is driving this culture of ownership.

Our next question comes from the line of Edlain Rodriguez with Mizuho. Please proceed with your question.

Hi, thank you. Good morning, everyone. Just one quick one on EMEA, like Europe. Volume, we know clearly is strong, but everyone seems to be adding capacity to meet that demand. Any concerns that if demand slows down a little bit, there might be excess capacity down the line?

Yeah, thanks for the question. Let me start by saying what I say most times, which is Europe is a land of opportunity. It's a land of opportunity because can penetration is relatively low in that geography versus other geographies that we operate in. Our customers are making significant filling investments, can filling investments. So, there's real physical evidence of the demand that's required in order to build these plants. Sustainability, as opposed to perhaps other geographies in the world, is a real tailwind there, and it continues unabated. So that's the backdrop. It's a very positive market dynamic that favors growth. For us, I can just say that in the long run, we invest when our customers ask us to invest on their behalf for their growth.

The way they ask us to do that is through long-term offtake agreements that allow us to deliver an EVA accretive project on behalf of our shareholders. So that's what I would say about that. The other thing I would say in Europe is these projects take time to build. There is a natural governor on building in a geography like Europe where there's lots of permitting and requirements to overcome. So, I feel very confident in our growth and the growth of the can in Europe. Thank you very much for the question.

That makes sense. Another quick one. In terms of the regional volumes, how did you do compared to the respective markets? Did you do better or worse than the markets?

Yeah, you mean this past quarter, are you asking about?

This past quarter, yes. Yeah, this past quarter.

Sure. Yeah, let me just start by saying the can is winning, and so are we. We've had seven quarters of consecutive growth. We expect growth in the fourth quarter, in line with where we are for 2026, and that's the way the year has started, and we expect similar growth for 2027 and beyond. 2025, again, we grew 4%+ well above our long-term outlook. 2026 will grow above our 2%-3% volume outlook, and I think we have, in the long run, an unrivaled customer portfolio and an advantaged network that allows us to win in the long run vis-à-vis the industry. As it relates to the quarter itself, let me just take a quick spin around the quarter, around our regions. In North America, as we've said, we are capacity constrained.

It's why we're building a plant in Millersburg, which I'm really proud to say is up and running now. So we're excited about that. But we probably grew right at our range, which is 1%-3%. I think you can check the data yourself, but the market in North America actually grew stronger than that. In Europe, we were, again, above our long-term outlook and above our long-term outlook for the industry. So we grew at least in line and maybe a little stronger than the industry. In South America, we clearly outperformed, again, due to our unrivaled customer portfolio and the team that drove great operational efficiency and success in that market. Overall, I think we were representative of the industry across the geographies.

Again, 2026 will be above our long-term outlook, cycling a really strong 2025, and in the long term, we will win because of our customer portfolio and our unrivaled network of plants and the people that run them.

Our next question comes from the line of Phil Ng with Jefferies. Please proceed with your question.

Hey, guys. Congrats on a solid quarter. I guess to kind of kick things off, I mean, you talked about some friction this year, whether it's in Europe and U.S., but encouragingly, Millersburg is up and running. Any update on Benepack as well? I think my focus is really how are you guys set up heading into 2027 to start the year? Are you kind of in a good spot operationally where we're going to see the type of operating leverage we're accustomed to seeing in North America and Europe based on where you are positioned heading into next year from an operations standpoint?

Hey, Phil, it's Dan. Going to take this question. Hey, thank you for the congratulatory note. You mentioned friction costs, and we mentioned friction costs, and you repeated that. What we have there is really the tightness is causing inefficiency in how we operate, right? So those are the friction costs. We're seeing that in both North America and EMEA. I think the Millersburg comes with some ramp-up costs. As you may recall, we've been talking about the starting-up cost this year. We've been calling out $35 million. We think that number is actually going to come in a little lower, around $25 million. We had $10 million in the quarter, so that implies another $10 million to go or so in the fourth quarter. I also would like to call out that we specifically experienced around a $20 million metal gain.

You may recall that we saw commodity prices really run up quickly when the Iran war started, and now we're seeing them drop. So what you have there is what we will call a timing gain in the quarter that is looking like it's going to reverse out in the fourth quarter. Is there any other points that you'd like me to address?

Just really more so 2027, Dan. Are you positioned to have these friction costs be behind you, I guess, whether it's to the North America and Europe, where we would see the type of operating leverage you have delivered in the past to start 2027?

I think it is safe to say it is really still too early to tell on that point specifically. I think, with the guidance, Ron did talk about volumes looking good for next year. Capacity will still remain tight, but it is definitely still too early to make any call on that.

Okay. From a backdrop where inflation is obviously heavy, you have managed it reasonably well. Margin has been pretty solid. When we look out to next year, remind us how your PPI resets kind of kick in in 2027. I know it has been a mismatch of sorts where you are on a one-year look back. Is that an opportunity for North America and similarly in Europe? Remind us how you are set up there from a pricing standpoint. Are you in a position to stay in front of inflation when we look out to next year?

Again, for 2027, it is still really hard to call what the PPI will be for next year. What I can tell you in 2026, we are operating pretty well though with the good inflation pass-throughs in our customer contracts. So I feel like we are navigating this year very well.

Okay. All right. Appreciate the color. Thank you.

Our next question comes from the line of Josh Spector with UBS. Please proceed with your question.

Hi, good morning. It is Anojja Shah sitting in for Josh. First question, just kind of a modeling question. I think corporate was a bit higher than we modeled in 3Q, but you also reduced the full year guide for corporate. Was there something one-time going on in 3Q? What drove that?

Nothing really to point out with. It is where we make accruals for some of our incentive comp plans. But really from our perspective, we look at everything is in line with our expectations when we put our budget together for 2026.

Okay. Thank you. Is there any way you can give us a sense of the market growth that we're seeing in Germany right now? It sounds like a new plant there is related to a particular customer, but I think if I recall correctly, growth in Germany was a little behind other countries just because of their historical deposit law. Where is market growth now? Also, did you think about maybe adding new lines at existing plants versus a greenfield, and why did you come out at a new greenfield? Thanks.

Hi, Anojja. It's Ron. Thanks for the question. We're really excited to build this plant in collaboration with one of our largest and certainly most strategic customers. This plant is really not for market growth or has anything to do with the general market. It has to do with the long-term partnership we have with a customer who continues to experience incredibly strong growth across all of Europe and all of the world. This plant won't serve Germany necessarily. It will serve broader Europe. I can't tell you how excited we are to build this plant on their behalf. We have a model in place where we've done this a number of times throughout the world. This will be our, I think, our fourth kind of through-the-wall plant for that customer.

Great. Read you loud and clear. Thank you very much. I'll turn it over.

Our next question comes from the line of Chris Parkinson with Wolfe Research. Please proceed with your question.

Yeah, thank you. Just an extension on the German facility, just kind of two questions. It seems like there could be two anchor customers, or is it just one? Understanding that it's not a play on the German market, once again, loud and clear on that, but at the same time, there have been, let's say, a decent amount of pressures across the glass industries. You've seen rationalizations, closures, due to demand, overcapacity, carbon costs, I mean, you name it. Is there a preliminary kind of assessment where there could be an intermediate to longer-term opportunity, and that perhaps if it's not just one anchor customer, if it's two, that you could see other market dynamics evolving favorably? Is there anything else there, or is it just, hey, we should think about it as one anchor customer, and then that's it?

Thanks, Chris. Let me comment on Anojja's question as well. The German market is actually the largest it's ever been, so that's good news. They've grown back to a level of demand that is greater than it's ever been, even before the deposit legislation, which came into effect decades ago. So, it is a growing market, to your point as well, in your second comment. At the moment, this is one anchor tenant in this current plant, but we have a number of other facilities where we can add capacity. It's one of the exciting things about the two plants that we bought. There are opportunities for us to expand those facilities and other new plants that we've built in Europe.

We built a plant in the U.K., as you know, in Kettering, and a plant in the Czech Republic in Pilsen, and those plants continue to grow into the capacity that we planned for them. Lots of opportunity, I think, in Europe, not only in this new greenfield plant, but also in the plants that we have in our network.

Got it. Just as an extension of, once again, a prior question on the India side of it, once again, understanding that capacity has been built with anchor customers, but just in terms of per capita aluminum consumption, in terms of the market dynamics there, longer-term growth rates, and the way that market has been perceived, let's say, historically of saying, hey, it's difficult based on domestic and other competition. What's been changing there that gets you so exciting? Is it just the fact that you have high-end anchor customers? Is it their per capita consumption changes evolving favorably? Just any more insights there would be particularly helpful. Thank you.

Thanks, Chris. Well, nothing has changed recently. India is growing mid-teens and has been growing that way from a volume perspective for the can for several years. That's exciting for us. Second thing that's exciting for us is this plant is anchored not only by one, but multiple long-term, large global strategic customers of ours that are excited for us to build there. Maybe another element is it helps us build out our network. We have a plant in the Southeast, we have a plant in the Southwest, and we now will have a plant in the north of the country supporting our global customers and our large customers in India with the opportunity to hit them from a number of different locations, wherever their filling locations are. Super exciting for us in India, and overall, there's a real growth there.

The aluminum industry is investing as well as the can-making industry. Thanks for the question.

Our next question comes from the line of Mike Roxland with Truist. Please proceed with your question.

Yeah. Thank you, Ron, Dan, and Brandon, for taking my questions. First one, not to belabor the point on volumes in North America, Ron, but I think you said in one of the prior calls that 90% of your volumes are committed for 2027. Is that still the case? And really what it comes down to is you're seeing announcements from CPGs who, and this relates to Ghancham's question and some of the other questions that were asked previously, you're seeing a shift in the CPG mindset back to price over volume. One of the leading CSD companies announced that about a month ago. I think maybe some of your customers may also be pursuing that. So, there are obviously some concerns out there about the volume trajectory given this change in CPG mindset.

Yeah, thanks, Mike. What I can say is we are effectively contracted for 2027. We have an incredibly strong contracted position, and at the end of the day, the can continues to win. It wins this year in the current macroeconomic environment that we have. So the can continues to win because of the value it offers the consumer, again, from a single serve, but also from a multipack perspective. We're effectively contracted for all of our volume for next year across all of our geographies, as you would expect us to be.

Got it. So there's been no shift, there's been no change, no one has clawed back their commitments for 2027 over the last month or two?

I would say the exact opposite. I would say our customers are making sure that we have the capacity that they expect from us to ensure that they can fulfill the growth that they hope to deliver in 2027.

Got it. Then one quick follow-up. In terms of the competitive backdrop, given the fact that supply and demand are particularly tight in North America and Europe, are you seeing the operating conditions such in these two markets where new entrants could potentially come to market, particularly given tight supply and demand, given good economics? Just your thoughts around potential entrants that could emerge in the next year or so. Thank you.

Yeah, thanks, Mike. Well, we're very excited when we get the chance to serve our customers and they call us and ask us how we can help them to grow. We're not seeing the kind of growth that we would have seen during the midst of the pandemic, where there was an importation in the U.S., for example, of 15 billion cans. That's not happening. I think it's measured, good, strong growth that when our customers call, we believe we can handle. It's why we built the plant in Millersburg, and it's why we'll continue to serve our customers from the assets we have throughout North America. I don't really spend too much time worrying about new entrants into this market. We have a healthy supply and demand balance with the current set of conditions.

Our next question comes from the line of Arun Viswanathan with RBC. Please proceed with your question.

Great. Thanks for taking my question. I hope you guys are well. Congrats on the strong Q3 results. I guess I just had two questions, somewhere along the lines of the last question. I know that you do have a very favorable, solid contracted position for 2027, but in prior cycles, we had seen inflation result in some of the customers opting to take minimums on those contracts. Are those min-max provisions still in place? I guess this is related to the complexity issue. I know you referenced the friction costs. I think in the past, similarly, when conditions were really tight, there was complexity, and then when conditions loosened up a little bit and we did see customers opt for those lower levels of contracting, some of those complexity issues resolved.

As you move into 2027, I guess I'm just curious, do you expect minimums on the contracts because of the inflationary impacts, and would that alleviate some of the friction costs, or should we expect actually larger friction costs in 2027 given the tightness? Thanks.

Ball (BALL) Q3 2026 Earnings Call Transcript

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