Ball (US:BALL)2019-08-01 22:40Financial Data and Key Metrics Changes - Comparable diluted earnings per share for Q2 2019 was $0.64, up from $0.58 in Q2 2018, reflecting strong global beverage can shipments and solid aerospace contract performance [22][24] - Net debt at the end of the quarter was $6.5 billion, with expectations to remain around $6 billion by year-end 2019 [23][24] - The company anticipates free cash flow for 2019 to be in the range of $1 billion, despite elevated capital expenditures [24][86] Business Line Data and Key Metrics Changes - Global beverage volumes increased approximately 5%, with specialty can growth at 13% [5][8] - Aerospace revenues were up over 30%, with operating earnings increasing by 55% [10][27] - North American segment volumes grew by 4%, while South America saw a 12% increase, and Europe experienced a 7% growth [9][18][20] Market Data and Key Metrics Changes - North and Central America beverage can market grew approximately 4%, while South America and Europe grew by 12% and 7% respectively [9][18][20] - EMEA market faced slight declines due to macroeconomic issues [9][21] - Specialty cans now represent over 42% of the global mix [8] Company Strategy and Development Direction - The company plans to invest in debottlenecking existing lines and building new capacity to meet customer demand [6][12] - Focus on sustainability and innovation in packaging solutions, including the launch of infinitely recyclable aluminum cups [11][27] - Long-term strategy includes increasing EVA dollars and expanding aerospace operations while returning value to shareholders [12][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, expecting headwinds to mitigate in the second half of the year [12][24] - The company is confident in achieving a 10% to 15% growth in diluted earnings per share over the next few years, driven by strong volume growth and improved mix [29][78] - Management noted that sustainability trends are driving demand for aluminum packaging, with expectations for continued growth in beverage cans [70][82] Other Important Information - The company received antitrust approval for the sale of its China beverage can business, with the transaction expected to close later in the year [9] - Significant investments in talent acquisition, with plans to add at least 600 new aerospace employees by year-end [27] Q&A Session Summary Question: Volume assumptions for EPS growth - Management indicated that historical global unit volume growth is around 2%, but they expect it to be double that in the short term, with a long-term expectation of 4% [30][32] Question: Headwinds in operational inefficiencies - Management is hopeful that operational headwinds, particularly in North America, will dissipate in Q3, with plans in place to address metal scrap issues [33][34] Question: Specialty can volume growth by region - Specialty can volumes in North America grew in the upper single digits, while South America saw low 20% growth [36][37] Question: Concerns about industry capacity - Management believes that market growth will be sufficient to absorb new capacity, citing a growing North American can market [47][48] Question: Capital allocation and share buybacks - Management plans to continue investing in growth while also returning capital to shareholders through stock buybacks [50][53] Question: Impact of weather on volumes - No significant weather-related issues were reported in North America, although Europe experienced some challenges [88][89]