Ball (US:BALL)2019-08-02 17:41Financial Performance - Net sales for the three months ended June 30, 2019, were $3,017 million, a decrease from $3,101 million in the same period of 2018, primarily due to the divestiture of the U.S. steel food and aerosol business [155]. - Net earnings attributable to Ball Corporation for the three months ended June 30, 2019, increased to $197 million, compared to $119 million in the same period of 2018, representing a net earnings margin of 7% [155]. - Cost of sales for the three months ended June 30, 2019, was $2,428 million, accounting for 80% of consolidated net sales, consistent with the same percentage in 2018 [158]. - Selling, general and administrative expenses for the three months ended June 30, 2019, were $111 million, representing 4% of consolidated net sales, down from $127 million in the same period of 2018 [159]. - The effective income tax rate for the three months ended June 30, 2019, was 13.7%, a significant decrease from 27.7% in the same period of 2018 [163]. - Comparable operating earnings for Q2 2019 were $65 million, down from $66 million in Q2 2018, reflecting a decrease of approximately 1.5% [171]. - Net sales for Q2 2019 were $377 million, slightly lower than $379 million in Q2 2018, indicating a decrease of about 0.5% [171]. - Comparable net earnings for the six months ended June 30, 2019, were $386 million, slightly down from $387 million in the same period of 2018 [189]. - Diluted earnings per share, as reported, increased to $0.58 for the three months ended June 30, 2019, from $0.34 in the same period of 2018, marking a 70% increase [189]. Segment Performance - Beverage packaging segment sales for the three months ended June 30, 2019, were $1,286 million, an increase of $45 million compared to $1,241 million in the same period of 2018, driven by higher volumes [168]. - Comparable operating earnings for the beverage packaging segment for the three months ended June 30, 2019, were $141 million, down from $157 million in the same period of 2018, with a margin of 11% [168]. - The aerospace segment reported a sales increase of $89 million for Q2 2019 compared to Q2 2018, representing a growth of approximately 30.7% [180]. - Total segment earnings for the aerospace segment were $38 million in Q2 2019, up from $24 million in Q2 2018, marking a growth of 58.3% [183]. - Beverage packaging sales in South America decreased by $2 million in Q2 2019 compared to Q2 2018, while comparable operating earnings fell by $1 million [174]. - The beverage packaging segment in Europe saw a sales increase of $12 million in Q2 2019, primarily due to higher sales volumes [177]. - Comparable operating earnings for the beverage packaging segment in Europe increased by $12 million in Q2 2019, reflecting improved operational efficiencies [178]. Strategic Initiatives and Investments - The company is expanding its geographic reach with new investments in beverage manufacturing facilities in Spain, Mexico, Myanmar, and Panama, as well as an extruded aluminum aerosol manufacturing facility in India [153]. - Ball Corporation's strategic initiatives include maximizing value in existing businesses and expanding into new products and capabilities, such as lightweight aluminum aerosol packaging [153]. - The company is constructing a new beverage can manufacturing facility in Paraguay, expected to begin production in the second half of 2019 [173]. - The beverage packaging facility in San Martino, Italy, was closed in December 2018 to optimize operations [176]. Cash Flow and Capital Expenditures - Cash flows provided by operating activities were $253 million for the six months ended June 30, 2019, down from $434 million in the same period of 2018, primarily due to higher working capital outflows [191]. - The company expects capital expenditures for property, plant, and equipment to be approximately $600 million for 2019, with $397 million contractually committed as of June 30, 2019 [194]. - Share repurchases totaled $388 million during the six months ended June 30, 2019, compared to $175 million during the same period in 2018, indicating a significant increase in share buyback activity [197]. Debt and Pension Contributions - As of June 30, 2019, the company had outstanding interest-bearing debt of $7.3 billion, an increase from $6.7 billion at the end of 2018 [199]. - Contributions to defined benefit pension plans were $73 million in the first six months of 2019, significantly higher than $14 million in the same period of 2018, with an expected total of $92 million for the full year [193]. - The company refinanced its credit facilities in March 2019, providing up to $1.75 billion in revolving credit, with approximately $1.27 billion available as of June 30, 2019 [200]. - The company had approximately $749 million of cash held outside the U.S. as of June 30, 2019, with no material restrictions on repatriation for U.S. operations [195].