Q1 2023 Ball Corp Earnings Call

Speaker 1: This continue to stand by. The conference will begin shortly. We do appreciate your patence an out that you please remain on the line. Today's conference will begin shortly.

Please continue to standby the conference will begin shortly we do appreciate your patience and I asked that you. Please remain on the line today's conference will begin shortly.

[music].

Speaker 1: Greetings and welcome to the ball Corporation. 1- Q2: zero 20- three earnings conference call. During the presentation all participants will be- and I listen- only mode. Later we will conduct a question and answer session at that time. If you have a question, please press the one followed by the four on your telephone. If, at any time during the conference, you need to reach the operator, please press Star zero.

Greetings and welcome to the Ball Corporation, one Q2023 earnings conference call. During the presentation. All participants will be in a listen only mode. Later, we will conduct a question and answer session at that time, if you will.

A question. Please press the one followed by the four on your telephone.

Any time during the conference you need to reach the operator, Please press star zero.

Speaker 1: As a reminder, this conference is being recorded. Thursday may fourth: 20 20- three. It is now my pleasure to turn the call over to Dan Fisher, Chairman and ce o. Please go ahead.

A reminder, this conference is being recorded Thursday may 4th 2023. It is now my pleasure to turn the call over to Dan Fisher Chairman and CEO . Please go ahead.

Speaker 2: Thank you Tina, and good morning everyone. This is Ball Corporation's conference call regarding the company's first quarter 2023: the results.

Thank you Tina and good morning, everyone.

This is ball Corporation's conference call regarding the company's first quarter 2023 results. 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.

Speaker 2: The information provided during this call will contain forward-looking statements.

Speaker 2: Actual results or outcomes may differ materially from those that may be expressed or implied.

Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other company SEC filings as well as company news releases.

Speaker 2: Some factors that could cause the results or outcomes to differ are in the company's latest 10 -k and in another company SEC filings, as well as company news releases.

Speaker 2: If you do not already have our earnings release, it is available on our website at Ball com.

If you do not already have our earnings release. It is available on our website at ball Dot com.

Speaker 2: Information regarding the use of non-GAAP financial measures may also be found in the note section of today's earnings release.

Information regarding the use of non-GAAP financial measures May also be found in the notes section of today's earnings release.

Speaker 2: Historical financial results for the divested Russia operations will continue to be reflected in the beverage packaging- EMEA segment.

Historical financial results for the divested rush it operations will continue to be reflected in the beverage packaging EMEA segment.

Speaker 2: C note 1- business segment information for additional information about the sale agreement and a quarterly breakout of Russia's historical sales and comparable operating earnings.

See note one business segment information for additional information about the sale agreement and a quarterly breakout of Russia's historical sales and comparable operating earnings.

Speaker 2: In addition, the release also includes a summary of noncomparable items, as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations.

In addition, the release also includes a summary of non comparable items as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations.

Joining me on the call today is Scott Morrison, our executive Vice President and CFO I'll provide some brief introductory remarks, Scott will discuss key financial metrics and then we will finish up with closing comments.

Speaker 2: Joining me on the call today, scot Morrison, our Executive Vice President CFO . I'll provide some brief introductory remarks. scot will discuss key financial metrics and then we will finish up with closing comments.

Speaker 2: Our outlook for the remainder of 2023 and Q a.

Our outlook for the remainder of 2023 and Q&A.

Speaker 2: Let me begin by thanking our employees for working safely and efficiently while fulfilling our customers' needs. Collectively, we delivered strong first quarter results amid tough year-over-year comparisons, driven largely by business divestments executed in 2020 -two.

Let me begin by thanking our employees for working safely and efficiently while fulfilling our customers' needs collectively we delivered strong first quarter results amid tough year over year comparisons driven largely by business divestments executed in 2022.

Speaker 2: In the first quarter, every business either achieved or exceed their operating plan. Our aluminum beverage and aerol shipments were in line with our regional expectations in our aerospace technologies continue to be in high demand.

In the first quarter every business either achieved or exceeded their operating plan, our aluminum beverage and aerosol shipments were in line with our regional expectations and our aerospace technologies continue to be in high demand.

Notable inflation recovery benefits of cost out actions improved operational efficiencies and performance in every business offset higher interest expense and taxes.

Speaker 2: Notable inflation recovery benefits of cost out actions. Improved operational efficiencies and performance in every business. Offset higher interest expense and taxes.

Speaker 2: With near-term macroeconomic conditions continuing to pressure consumer demand balls. Year-to-date global beverage can volumes were down 1% in the first quarter, in line with our expectations.

With near term macroeconomic conditions, continuing to pressure consumer demand both year to date global beverage can volumes were down one 4% in the first quarter in line with our expectations.

Speaker 2: Looking ahead the breadth of retail summer promotional activity across our customer mix in North America.

Looking ahead, the breadth of retail summer promotional activity across our customer mix in North America.

Speaker 2: And the continuing successful ramp-up of our two new facilities in EMEA will be the key drivers of our ultimate 2020 -three shipment growth.

And the continuing successful ramp up of our two new facilities in EMEA will be the key drivers of our ultimate 2023 shipment growth.

Speaker 2: We started 2023 with a conservative view on annual global beverage shipment trends and we maintained that conservative second half weighted view.

We started 2023 with a conservative view on annual global beverage shipment trends and we maintain that conservative second half weighted view.

Speaker 2: We have a lot of the year ahead of us and we look forward to serving our customers' needs.

We have a lot of the year ahead of us and we look forward to serving our customers needs.

Speaker 2: As we sit here today, in advance of seeing quantifiable promotional activity, we are proactively managing our beverage operations in North and South America for cash and supply demand balance as we continue to bring down raw coil and finished goods inventories and return to our just-in-time supply chain management.

As we sit here today in advance of seeing quantifiable promotional activity, we are proactively managing our beverage operations in north and South America for cash and supply demand balance as we continue to bring down rock oil and finished goods inventories.

And returned to our just in time supply chain management versus the just in case supply chain requirement during the pandemic and extended period of higher than planned growth for beverage cans.

Speaker 2: Versus the just-in-case supply chain requirement during the pandemic and extended period of higher-than planned growth for beverage cans.

Speaker 2: Around the globe, beverage cans continue to win relative to other substrates and we continue to leverage our customer mix scale, regional plant networks, innovation and capable teams across the organization to ensure the best near-term, medium-term and long-term outcomes for all our stakeholders.

Around the globe beverage cans continue to win relative to other substrates and we continue to leverage our customer mix scale regional plant networks innovation and capable teams across the organization to ensure the best near term medium term and long term outcomes for all our stakeholders.

Speaker 2: In our aerospace and aluminum aerosol businesses, operational performance and demand for our innovative products and technologies are accelerating.

In our aerospace and aluminum aerosol businesses operational performance and demand for our innovative products and technologies are accelerating.

Speaker 2: In aerospace. Our technologies are well positioned to deliver unimpeachable data and monitoring capabilities for both environmental and national security needs.

In aerospace our technologies are well positioned to deliver unimpeachable data and monitoring capabilities for both environmental and National security needs.

Speaker 2: And in our global aluminum aerosol business, we continue to serve new categories and offer reuse refill, botle innovations to a broader set of customers and occasions.

And in our global <unk>.

Aluminum aerosol business, we continue to serve new categories and offer reuse refill bottle innovations to a broader set of customers and occasions.

Speaker 3: As we look ahead, all of our businesses will continue to unlock additional value for all stakeholders in 2023 and beyond.

As we look ahead all of our businesses will continue to unlock additional value for all stakeholders in 2023 and beyond.

Consistent with our prior commentary and 2023, we remain positioned to deliver our long term goal of 10% to 15% diluted earnings per share growth inclusive of the Russian business sale headwind and we remain well positioned to generate strong free cash flow to deleverage and return.

Speaker 2: Consistent with our prior commentary in 2023. We remain positioned to deliver our long-term goal of 10% to 15% diluted earnings per share growth, inclusive of the Russian business sale headwind, and we remain well positioned to generate strong free cash flow to deleverage and return value to our fellow shareholders.

Value to our fellow shareholders.

Speaker 2: As we indicated in our prior call, the second quarter will remain choppy in North and South America metal beverage as we continue to work through higher inventory and manage regional production with an eye on cash.

As we indicated in our prior call the second quarter will remain choppy and north and South America metal beverage as we continue to work through higher inventory and manage regional production with an eye on cash in.

Speaker 3: In addition, the positive momentum in our EMEA aerospace and aluminum aerosol businesses will continue.

In addition, the positive momentum in our EMEA aerospace and aluminum aerosol businesses will continue.

Speaker 2: During the qa scot and I will strive to provide additional clarity on the external environment and cadence for 2023 based on what we know today.

During the Q&A, Scott and I will strive to provide additional clarity on the external environment and cadence for 2023 based on what we know today.

Speaker 2: Our global beverage teams continue to position our business to deliver the year and have an eye on the future.

Our global beverage teams continue to position our business to deliver the year and have an eye on the future for the full year and incorporating year to date trends, our customer mix and excluding Russia. We now estimate low single digit global volume growth for ball with North America being slightly down South America vault.

Speaker 2: For the full year and incorporating year-to-date trends, our customer mix and excluding Russia, we now estimate low single-digit global volume growth for ball, with North America being slightly down, South America volume up mid-single digits, EMEA volume up mid-single digits plus and our other nonreportable beverage business volues up mid- to high single digits.

<unk> up mid single digits, EMEA volume up mid single digits, plus and our other non reportable beverage business volumes up mid to high single digits.

Speaker 2: We appreciate the work being done across the organization and extend our well wishes to our employees customers suppliers, stakeholders and everyone listening to D. with that, I'll turn it over to scot. Thanks, Dan. I'd like to congratulate Dan on his election to Chairman of the Board and thank John for services Chairman.

We appreciate the work being done across the organization and extend our well wishes to our employees customers suppliers stakeholders and everyone listening today with that I'll turn it over to Scott.

Thanks, Dan I'd like to congratulate Dan on his election to chairman of the board and thank John for his service as chairman.

Speaker 4: Dam was battle tested on many fronts in 2022 and he has the skill set and drive to take the company to new hikes.

Dan was battle tested on many fronts in 2022, and he has the skill set and drive to take the company to New Heights.

Speaker 4: First quarter 2023, comparable diluted earnings per share were 69 cents versus 77 cents in the first quarter of 2022 and, excluding the notable Russian aluminum packaging business sale headwind. First quarter comparable diluted earnings per share were flat versus the prior year.

First quarter 2023 comparable diluted earnings per share were <unk> 69 versus <unk> 77 in the first quarter of 2022 and excluding the notable Russian aluminum packaging business sale headwind first quarter comparable diluted earnings per share were flat versus the prior year.

Speaker 4: First quarter, sales decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2022: currency translation, lower volumes and the pass-through of lower aluminum prices, partially offset by the pass-through of inflationary costs.

First quarter sales decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2022 currency translation lower volumes and the pass through of lower aluminum prices, partially offset by the pass through of inflationary costs in.

Speaker 4: In the first quarter, net comparable earnings decreased compared to the same period in 2022, primar dueto: the sale of our Russian business in the third quar of 2022.

In the first quarter net comparable earnings decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2020 to lower volumes in North and South America and increased interest expense, partially offset fixed cost savings lower depreciation expense and SG&A cost out initiative.

Speaker 4: Lower volumes in North and South America and increased interest expense partially offset fixed cost savings, lower depreciation expense and SGNA cost out initiatives, as well as the contractual pass-through of inflationary costs.

<unk> as well as the contractual pass through of inflationary costs.

Speaker 4: To reiterate our prior earnings call commentary and to help frame sim of Dan's earlier comments about chop year second quarter performance in North America and South America's segment earnings.

To reiterate our prior earnings call commentary to help frame some of Dan's earlier comments about chop your second quarter performance in North America, and South America segment earnings.

Speaker 4: We have been and will continue to proactively manage regional supply demand balance across our system of plants. In the near term, after July , segment earnings will reaccelerate when the majority of the contractual inflation recovery begins and a larger portion of summer selling volume flows through segment results.

Have been and will continue to proactively manage regional supply demand balance across our system of plants in the near term after.

After July segment earnings will Reaccelerate, when the majority of the contractual inflation recovery begins.

A larger portion of summer selling volume flows through segment results.

Speaker 4: Also remember the virtual power purchase agreement settlement recorded in North America's first quarter results will not replicate in the second quarter. However, we estimate that North America's second quarter segment results will be relatively in line with 183 million first quarter segment results reported today.

So remember the virtual power purchase agreements settlement recorded in the North America's first quarter results will not replicate in the second quarter. However, we estimate that north America's second quarter segment results will be relatively in line with the 183 million first quarter segment results reported today.

Speaker 4: In South America, customer and product mix is unfavorably influ, influencing the seasonally slower second quarter and, consistent with our prior commentary, we anticipate a more to robust second half in Brazil as customer hedges roll out and the fourth quarter summer selling season kicks in.

In South America customer and product mix as unfavorably influenced influencing the seasonally slower second quarter and consistent with our prior commentary, we anticipate a more robust second half in Brazil as customer hedges roll off in the fourth quarter summer selling season kicks in as.

Speaker 4: As we sit here today, some very consistent commentary and key metrics.

As we sit here today, some very consistent commentary in key metrics.

Speaker 4: We ended the first quarter in a solid liquidity position, with in excess of one and a half billion dollars in cash and available credit facilities.

<unk> ended the first quarter and a solid liquidity position with an excess of $1 5 billion in cash and available credit facilities.

Speaker 4: 2023 CapEx will be in the range of $1.2 billion, driven by cash outflows related to prior year's projects. 2024 CapEx is target is targeted to be in the range of GAAP DNA levels.

<unk> 2023, Capex will be in the range of $1 $2 billion driven by cash outflows related to prior year's projects 2020 for Capex is targeted is targeted to be in the range of GAAP DNA levels.

Speaker 4: We are targeting free cash flow in the range of $75 million in 2023 and focusing on deleveraging.

We are targeting free cash flow in the range of $750 million in 2023 and focusing on deleveraging our.

Speaker 4: Our 2023 full year effective tax rate on comparable earnings was expected to be in the range of 20%, and.

Our 2023 full year effective tax rate on comparable earnings is expected to be in the range of 20%.

Speaker 4: Full year 2023, interest expense is expected to be in the range of four hundred and twenty-five million.

Full year 2023 interest expense is expected to be in the range of $425 million.

Speaker 4: While the first quarter, corporate costs appear lower than the expected runway.

While the first quarter corporate cost appear lower than the expected run rate. We continue to anticipate full year 2023, corporate undistributed costs recorded in other non reportable it'll be in the range of $90 million.

Speaker 4: We continue to anticipate full year 2023 corporate undistributed costs recorded in other nonreportableto be in the range of $9 million, with the second quarter cost being higher year-over-year driven by announced key employee retirement costs.

With the second quarter costs being higher year over year, driven by announced key employee retirement costs.

Speaker 4: Including the $86 million Russia business sale operating earnings headwind.

Including the $86 million, Russia business sale operating earnings headwind comparable operating earnings should increase nearly $200 million and full year 2023 comparable DNA.

Speaker 4: Comparable operating earnings should increase nearly $2 million and full year 2023 comparable DNA will likely be in the range of $55 million.

Likely be in the range of $550 million as we look forward and incorporating near term demand trends year end 2023, net debt to comparable EBITDA.

Speaker 4: As we look forward and incorporating near-term demand trends year-end 2023 net debt to comparable EBITDA is expected to trend in the range of three point seven X and in future years will drive that lower last week ball declared its quarterly cash dividend and as Dan mentioned reducing leverag is our key focus prior to resuming share repurchases in 2020 four.

As expected the trends in the range of three seven times and in future years, We will drive that lower last week bald declared its quarterly cash dividend and as Dan mentioned, reducing leverages, our key focus prior to resuming share repurchases in 2024.

Speaker 4: Rest assured, as fellow owners, we will manage the business through the lens, VA and cash stewardship and we will effectively manage our supply chain and customers in this current economic climate, secure the best cash earnings and EVA outcome for our shareholders.

Rest assured as fellow owners, we will manage the business through the lens BVA and cash stewardship, and we will effectively manage our supply chain and customers in this current economic climate.

Sure the best cash earnings and Eva outcome for our shareholders with that I'll turn it back to you Dan.

Speaker 4: With that, I'll turn it back to you Dan.

Speaker 2: Thanks scot. Given the economic environment and global dynamics impacting our world, it's a great time for investors to get up to speed on ball. Our significantly improved plan following a challenging 2022 is kicking in. We produce products that consumers use daily. We deliver unique technologies to analyze, observed and defend what we value most, and employee owners are showcasing incredible resiliency while delivering earnings free cash flow.

Thanks, Scott given the economic environment and global dynamics impacting our world.

<unk> time for investors to get up to speed on ball.

Our significantly improved plan following a challenging 2022 is kicking in we produce products that consumers use daily we deliver unique technologies to analyze observed and defend what we value most and employee owners are showcasing incredible resiliency, while delivering earnings.

Free cash flow.

Speaker 3: And high-quality innovative solutions to our customers and consumers.

And high quality innovative solutions to our customers and consumers and.

Speaker 2: And as leverage comes down in free cash flow, expands our return of value as shareholders will grow in 2024 and beyond.

And as leverage comes down and free cash flow expands our return of value to shareholders will grow in 2024 and beyond.

Speaker 3: Thank you to everyone listening today, and with that Tina, we're ready for questions.

Thank you to everyone listening today and with that Tina.

We're ready for questions.

Speaker 1: Thank you. If you would like to register a question or comment, please press the 1, followed by the four on your telephone. You will hear a three townm prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the 1, followed by the 3: one moment and please.

Thank you if you would.

Thank you Register a question or comment please press the one followed by the four on your telephone.

We'll hear retail pump technology request. If your question has been answered and you would like to withdraw your registration. Please press. The one followed by this three one moment please.

Speaker 1: Our first question comes in gangjum punjabi of biraird.

Our first question comes from Ghansham Panjabi of Baird.

Speaker 5: It's going high. Good morning everybody. Thank you, operator. Yeah, and maybe you can just start off with you know how the volume out look, looked by region, has changed relative to your forecast three months ago. I mean clearly a lot changed in the last few weeks months, because you were spending in certain regions, including in the? U K seems to be much we, Aker.

Please go ahead, hi, good morning, everybody. Thank you operator.

And maybe you can just start off with how the volume outlook by region has changed relative to your forecast three months ago. I mean, clearly a lot has changed in the last few weeks months and could you were spending in certain regions, including in the UK seem to be much weaker so I'm just curious as to how thats impacted your.

Speaker 6: So're just curious as to that's impacted your, your thought process for the year.

Your thought process for the year.

Speaker 2: Yeah thanks conm.

Yes, Thanks Ghansham.

Speaker 2: I guess where we're at today it's been largely in line the first quarter and even what we're anticipating in the second quarter- things that have moved around in regions.

I guess, where we're at today, it's been largely in line the first quarter and even what we're anticipating in the second quarter.

Things that have moved around and regions.

Speaker 3: Had been largely related to customer mix. So the industry writ large is largely in line. There's been movement and quarters, some of benefit, some how that we we've done a little better than the market in Europe . We were a little behind in South America and we were a little behind in North America. The benefits of what we saw in terms of the things within our control we outperformed almost in every spend category, operational efficiency category, So that all helped us.

Had been largely related to customer mix. So the industry writ large is largely in line.

Been movement and quarters some benefit some some haven't.

We've done a little better than the market in Europe .

We're a little behind in South America, and we were a little behind in North America.

The benefits of what we saw in terms of the things within our control we outperformed almost in every spend category operational efficiency category. So that all helped us.

Speaker 3: To effectively manage our earnings profile. In the first quarter we came into the year with a conservative view on things like promotional activity in the first half. We believe that you will see some benefits in the second half from that, but again, we haven't seen it and we're not counting on a lot of it. We put in place a very conservative volume plan at the outset of the year to underpin our earnings and our cash generation, and that's what our focus is.

To effectively manage our earnings profile in the first quarter.

We came into the year with a conservative view on things like promotional activity in the first half.

We believe that you will see some benefits in the second half from that but again, we haven't seen it and we're not counting on a lot of it we put we put in place a very conservative volume plan at the outset of the year to underpin our earnings and our cash generation.

And Thats, what our focus is so we'll continue to focus there.

Speaker 3: So we'll continue to focus there.

Speaker 2: I don't know if if that helps you, but we're not seeing a lot of difference. We're seeing some movements and some share shifts by customer and by category, but it's largely in line with what we anticipated heading into the year, at least for what we know in the first half and the second half. I think this business, as you know, requires volume.

I don't know if that if that helps you but.

We're not seeing a lot of difference were seeing some some movements and some share shifts by customer and by category, but.

But it's largely in line with what we anticipated heading into the year at least for what we know in the first half and the second half I think this business as you know requires volume.

Speaker 3: We're a volume business So we'll need a little bit of that uptick in the second half of the year. But we've got a lot of things break in our way and the things that we can control that will enable us to hold, hold the cash and hold the earnings profile here for the majority of the year.

We're a volume business, so we'll need a little bit of that uptick in the second half of the year, but we've got a lot of things break our way in the things that we can control that will enable us to have.

Hold the cash and hold the earnings profile here for the for the majority of the year.

Speaker 6: ok perfect. And then, just so you know I understand this correctly, So you are benefiting from, you know, inflation cord recovery this year versus last year, right where you can touch on, where you're seeing how inflation is tracking this year, two twent 23 versus 2020 2, and if there is any element of deflation, would that mean that in 2020 four you would pass it on to your customer?

Okay, perfect and then just so I understand this correctly. So you are benefiting from.

Inflation recovery this year versus last year right correct.

Correct you can touch on where you are seeing how inflation is tracking this year 2023 versus 2022, and if there is any element of deflation would that mean that in 2024, you would pass it onto your customers just to clarify.

Speaker 6: Just to clarify.

Speaker 2: Yes I'll take a shot at it. Is that a high level? We are definitely seeing some improve inflation in terms of the run rate in the cost structure. Into your point, the way these contracts work, keep in mind that.

Yeah, I'll take a shot at it just at a high level, we are definitely seeing.

Some improve inflation.

In terms of the run rate and the cost structure and to your point the way these contracts work.

Keep in mind that.

Speaker 3: The majority of our PCI benefit, specifically in North America, isn't going to come into the second half of the year.

The majority of our PPI benefit specifically in North America isn't going to come into the second half of the year.

Speaker 2: That will carry forward until it laps into the second half of next year.

That will carry forward until it laps into the second half of next year.

We will maintain the overwhelming majority of the lift that we're seeing on all of these inflationary pass throughs as catch ups, there will be a limited.

Speaker 3: We will maintain the overhelming majority of the lift that we're seeing on all of these inflationary pass through as catchups there will be. A limited right now is we're looking at the year over-year components. It doesn't look like there'll be much movement one way or another absent. What we're counting on for the catch up from 22 and a 23, but this is this will be evolving throughout the year depending on where the headwinds or tailwinds on inflation manifestit's got anything.

Right now as we're looking at the year over year components.

It doesn't look like there'll be much movement, one way or the another absent what we're counting on for the catch up from 22% and a 23.

But this is this will be evolving throughout the year, depending on where the headwinds are tailwind on inflation manifest Scott anything.

Speaker 2: There's not deflation typically built in our contracts. There might be something unique in certain contracts- we're kind of maybe an energy index somewhere, but in general we're not seeing deflation. We're seeing inflation slow down.

Theres not deflation typically built in our contracts there might be something unique in certain contracts, we're tied to maybe an energy index somewhere but in general we're not seeing deflation, we're seeing inflation slowed down.

Speaker 7: That's going to think that. So much a really good environment for us.

That's perfect. Thanks, so much.

Really good environment for us.

Speaker 8: yep.

Yeah understood understood. Thank you. Thank.

Speaker 9: Thank you, Thank you.

Thank you.

Speaker 1: Thank you. The next question comes from Christopher Parkinson of mauvo. Please go ahead.

Thank you.

Next question comes from Christopher Parkinson of Mizuho. Please go ahead.

Speaker 10: Hi this is John for Chris. Thanks for taking my question. Can you expand the promotion, Hi? Can you expand the promotional trends that you're seeing around the globe, particularly in North America? And then also, can you please break down the various categories that you expect to drive growth going forward? Thank you.

Hi, This is John on for Chris Thanks for taking my question.

<unk> expanded the promotion hi can you expand on the promotional trends that youre seeing around the globe, particularly in North America and then also can you. Please break down the various categories that you expect to drive growth going forward. Thank you.

Speaker 2: surepromotional activity is really a thing in North America specifically. Given the pantry stuffing effects the larger case packs, we're not saying much of any right now. I think it's reflected in the performance of our customers in terms of the revenue growth there seeing and volume being flattish, and so we're sort of tied to that volume being flattish component.

Sure.

Promotional activity is really a thing in North America specifically.

Given the pantry stuffing effects in the larger case packs.

We're not seeing much of any right now and I think.

It's reflected in the performance of our customers in terms of the revenue growth they're seeing.

Volume being flattish and so we're sort of tied to that volume being flattish component.

Speaker 2: Where you would. The one thing that is clear in the last 12 to 18 months is the folks that have taken less price versus inflation or have held pricing. There are the ones growing share and as share becomes more import, which we believe as the year moves on.

Where you would.

One thing that is clear in the last 12 months to 18 months as the folks that have taken less price versus inflation or has held pricing. They are the ones growing share.

And as as share becomes more important.

Which we believe as the year moves on.

Speaker 3: There will be an opportunity for folks if they're more focused on share gainthen you will see more activityand I I would expect to see given the performance of.

There will be an opportunity for folks if theyre more focused on share gain.

Then you will see more activity.

And I would I would.

Expect to see given the performance of.

Speaker 3: Beer writ large being down. They have more impetus in a need to push volume than what I'm seeing out of the energy and the non-alcohol spaces.

Beer writ large being down.

They have more impetus and a need to push volume than what im seeing out of the energy and the non alcohol spaces.

Speaker 3: So I anticipate a little bit in the second half of the year across the Board, but I don't anticipate much. And if there's one area where you could see or anticipate some, it will probably be in the area of the alcohol categories and beer, specifically because sheriff' stomach is down in that category.

So I anticipate a little bit in the second half of the year.

Across the board, but.

But I don't anticipate much.

And if there's one area, where you could see or anticipate some it will probably be in the area of the alcohol categories in beer specifically because.

Share of stomach is down in that category.

Speaker 10: Perfect Thank you so much. He ll turn over. Thank you.

Perfect. Thank you so much I'll turn it over thank you.

<unk>.

Speaker 11: Thank you.

Thank you.

Speaker 1: The next question comes from George stafes. So thanks for America.

The next question comes from George Staphos with Bank of America.

Speaker 12: Just go ahead.

Go ahead.

Speaker 13: Thank you to everyone. Good morning. Thanks for the details how you doing so. I wanted to come back to the question on end markets and trends you'd expect for the rest of the year, to the extent that you can comment. 1, are there any categories, without giving away?

Thank you hi, everyone. Good morning, thanks for the detail.

How are you doing.

So I wanted to come back to the question on end markets and trends you would expect for the rest of this year to the extent that you can comment.

One are there any categories without giving away.

Speaker 13: You know information is proprietary. That you expect will be particularly helpful and particularly a headwind to your volume outlook for the rest of the year. relatedly, you mentioned then you know, the beer category and there's been lots of news there. You know what are you seeing in terms of your relative share of beer, relative to what is happening to perhaps your, your mix or your customer mix, and then had a couple of followalls.

Information is proprietary that you expect will be particularly helpful.

And particularly a headwind to your volume outlook for the rest of the year.

Relatedly.

You mentioned in the beer category and Theres been lots of news there.

What are you seeing in terms of your relative share of beer.

Relative to what is happening to perhaps your mix or your customer mix.

Then I had a couple of follow ons.

Speaker 2: Sure let me take the second part of the beer question first as as you can know George you've been following at a long time we have an overweight and beer and we love all our beer customers and we serve that market So.

Sure Let me take the second part the beer question first as you as you know George you have been following US a long time, we have an overweight in beer and we love All our Bureau customers.

And we serve that market so.

Speaker 14: net-net-net and I know the specifics and I'm not going to go into the specifics relative to customers. But I will tell you this: how you should look at Ball's portfolio as it relates to beer is.

Net net net and I know the specifics and I'm not going to go into the specifics relative to customers, but I will tell you. This how you should look at balls portfolio as it relates to beer is.

Okay.

Speaker 2: We win when folk stink beer and so if there's a mixed impact we may have, we may have one customer that's up in a short period of time. There may be a share shift. We pick up both sides of that equation generally. So what we are more interested in is the health of the entire category, and we believe that beer is going to need to.

We win when folks drink beer.

So if there is a mix impact we may we may have we may have one customer thats up in a short period of time, there may be a share shift.

We pick up both sides of that equation generally so what we are more interested in is the health of the entire category and we believe that beer is going to need to.

Speaker 2: Galvanize itself and push. In the second half of the year they're going to have to promote across the entirety of the industry.

Galvanize itself and push in the second half of the year theyre going to have to promote across the entirety of the industry.

Speaker 13: And on the end market trends and it's been a Ong ning's totally trying to help your be the end category in the category space I don't anticipate any significant wins or significant losses by category what I in my prior answer to the prior question I will reiterate I think there will be shareshift that happens in each category depending on the approach that each brand owner takes and so folks that have decided to.

And on the end market trends and it's been a long earnings season totally trying to help you.

And the category and the category space I don't anticipate any significant wins or significant losses by category what I.

In my prior answer to the prior question I will reiterate I think there will be share shift that happens in each category depending on.

The approach that each brand owner takes and so folks that have decided to.

Speaker 2: Not pass on.

Not pass on.

Speaker 3: Price increases.

Price increases.

Speaker 3: Aggressively if you have done better on share share gain over the last 12 to 18 months.

Aggressively if you.

Have done better on share share gain over the last 12 months to 18 months.

Speaker 3: So if they've taken a posture where they're going to pass through a portion but not pass through what everybody else in the category om, they're the ones that are winning share. And so, depending on what decision you're making within the category- I think it's going to be share shift within the category. I think every category is going to do.

So if they've taken a posture, where they're going to pass through a portion, but not pass through what everybody else in the categories. They are the ones that are winning share and so depending on what decision you're making within the category I think it's going to be share shift within the category. I think every category is going to do.

Speaker 15: A.

Speaker 16: Well.

Well.

Speaker 2: And some will do a little better than others, but it's really going to be the customers that win within categories. That will be the determining factor on our volume versus our competitors volume.

And some will do a little better than others, but it's really going to be the customers that win within categories that will be the determining factor on our volume versus our competitors volume.

Speaker 4: jilian I would. I would add as long term.

George the only thing.

I would add is long term.

Speaker 4: The best positive here is the can is winning. New product introductions are still heavily weighted to can.

The best positive here. The can is winning new product introductions are still heavily weighted to cans and so that bodes well for the can in the long run.

Speaker 4: And so that bodes well for the can in the laa. And that's, we're playning a long GA here.

We're playing a long game here.

Speaker 17: Understood a two question it'll turn over one on aerospace can you talk to the degree that you can sustain the performance that you saw on one Q after what was you know obviously a little bit a challenging twenty two whether this is kind of a one off one quarter hit or benefit where you think you can may maintain that into the rest of the year and topefully 24 and then back to beverage cans and capacity can you talk to what you think operating rates will be this year and scot should we really be expecting CapEx in 24 in the range of five 50 tosix hundred based on you said on D Thank you and good luck in the quarter Thank you so aerosp I think the way you think about aerospace that I wouldn't do a run rate on sequential improvement meet quarter to you being better than quarter one But I would say.

Understood.

Two questions and I'll turn it over one on aerospace can you talk to the degree that you can sustain performance that you saw in <unk>.

After what was obviously a little bit of a challenging 20 to whether this is kind of a one off.

One quarter.

Hit or benefit or you think you can maintain that into the rest of the year and hopefully 'twenty four and then back to beverage cans in capacity can you talk to what you think.

Operating rates will be this year and Scott should we really be expecting capex in 'twenty four and the range of $5 50 to 600 based on what you said on DNA. Thank you and good luck in the quarter.

Thank you.

So aerospace I think the way you think about aerospace.

I wouldn't do a run rate on sequential improvement.

Meaning quarter to being better than quarter, one, but I would say.

Speaker 2: The quarter's year-over-year will be improved. There's real underlying improvement in performance. In the second half of last year we had some pretty significant supply chain disruption, So that has.

The quarter's year over year will be improved there is real underlying improvement in performance in the second half of last year, we had some pretty significant supply chain disruption so that has.

Speaker 18: That has been.

That has been.

Speaker 18: Fixed and then what you saw in the first quarter was.

Fixed.

And then what you saw in the first quarter was.

Speaker 18: Really nice performance, execution and a couple nice breaks in terms of.

Really nice performance execution.

And a couple of nice breaks in terms of.

Speaker 18: Just efficiency gains and just a better run enterprise there in the first quarter. So I think that will continue to be a tailwind in each quarter. It just they won't be sequential lips right, it will be dependent on the projects in the mix. But that business is poised to do have an exceptional year this year and then i'll- let's got tackle the efficiency question.

Just efficiency gains and just a better run enterprise there in the first quarter. So I think that will continue to be.

Tailwind and each quarter. It just it won't be sequential lifts right. It will be dependent on the projects in the mix.

But that business is poised to do had an exceptional year this year.

I'll, let Scott tackle the.

Efficiency question.

Speaker 4: George, on the DNA, I said gap DNA for CapEx.

George on the DNA, I said gap DNA for Capex.

Speaker 19: That that's not the, not the comparable operating angeones.

That's about the comparable operating earnings.

Speaker 13: Okay gotd it, got it. Thank you for that. And opering rates this year.

Okay got it got it thank you for that and operating rates this year.

Speaker 4: Operating rates. We're running out plans. I mean we are taking downtime and're taking more of it in the second quarter to make sure that we're operating at pretty high levels of above 90%. So we'll take downtime to Q2 in North America and South america- South America, that's pretty typical given the seasonality of that business. But we're really focusing Q2 and getting our inventories to the right level and so we can run it and run it fairly high operating rates for the year and so that will be a bit that will be a drag in Q2.

Operating rates were running our plants, we are taking downtime.

More of it in the second quarter to make sure that we're operating at pretty high levels of above 90%. So we'll take downtime in Q2 in North America, and South America, South America, that's pretty typical given the seasonality of that business, but we're really focused in Q2 on getting our inventories to the right level.

So we can run it and run it fairly high operating rates for.

For the year, and so that will be a bit of a that will be a drag in Q2.

Speaker 17: Understood Thank you guys.

Understood. Thank you guys.

Speaker 20: Back Thank you.

Thank you.

Speaker 1: Thank you. The next question comes from Angel castoo of Morgan Stanley . Please go ahead.

Thank you. The next question comes from Angel Castillo of Morgan Stanley . Please go ahead.

Speaker 21: Hey orry for y.

Hey, sorry can you hear me.

Speaker 9: Yes I Angel.

Yes Angela.

Speaker 21: Hey thanks for taking my question, sort of follow up on the commentary around downtime in Q Q. could you quantify what the drag will be from that and kind of related as you think about the kind of you know just cost your operational leverage at your business has to volume, potentially improving it's kind of promotional activity of returns? Just could you talk about maybe the degree to which some of that is maybe variable and comes back as you bring assets back online, versus how much is just you know operating leverage?

Thanks for taking my question just wanted to follow up on the commentary around downtime and QQ.

Can you quantify what the drag will be from that and kind of related as you think about the kind of.

Just cost or operational leverage that your business has to volumes potentially improving.

And its kind of promotional activity returns.

Can you talk about maybe the degree to which some of that is maybe variable and comes back.

<unk> assets back online versus how much is just.

Operating leverage that would be upside to that.

Speaker 22: That would be upside to sure. First of all, Congratulations on being a new dad. And I don't know quickly, I don't know how quickly meal and start drinking, can start drinking out of cans. That that will help to answer the the downtime question. But you all series scot laid it out really well. So in South America you're entering in the off peak season So you typically do curtail.

Your line.

Sure well first of all.

Congratulations on being a new dad and I don't know how quickly I don't know how quickly MELA can start drinking.

Can start drinking out of cans that will that will help to answer the.

Yes.

The downtime question, but in all seriousness Scott laid it out really well so in South America Youre entering in the off peak season. So you typically do.

Curtail.

Speaker 2: The balance of this comment about curtail. There it's curtailment and it's maintenance, So it's planned maintenance. So you're going going to have that for for certain. And then in North America our plants performed extraordinary well in Q1 and volumes were a little down versus our expectation. So we carried in a little bit more inventory in the second quarter and we're going to- we're going man, that we're going to manage that tightly year for the balance of the year, for cash generative purposes.

The balance of this comment about curtail their its curtailment and its maintenance so it's planned maintenance.

So youre going to have that for.

For certain and then in North America.

Our plants performed extraordinarily well in Q1.

And volumes were a little down versus our expectations. So we carried in a little bit more inventory in the second quarter and we're going to we're going to manage that we're going to manage that.

Tightly here for the balance of the year for cash generative purposes.

Speaker 18: We've got a lot of flexibility in our lines. As you know, the curtailment question for us is harder to answer Angel, I think you notice about us- because we have multiple can sizes. On every line there is one hand size that certainly has excess capacity writ large in the North and Central American market. We do have exposure to that, but it's limited.

We've got a lot of flexibility in our lines as you know the curtailment question for US is harder to answer Angela I think you can tell us about us because we have multiple can sizes on everyone. There is one can size that certainly has.

Excess capacity writ large in the north and Central American market.

We do have exposure to that but it's limited and so the next question I think that you were leaning into was there depending on what the brand is or the product is thats innovating and that's winning we can flex to that.

Speaker 2: And so the next question I think that you were leaning into was there: depending on what the brand is or the product is, that's innovating and that's winning. We can flex to that and we can turn that on. We're in a really healthy position in terms of safety stock.

And we can turn that on we're in a really healthy position in terms of safety stock.

Speaker 18: And we're in a healthy position in terms of we're performing a heck of a lot better than we had the last couple of years in running our business. So if things suddenly shift, we've got dry powder and we've got dry powder on a number of can sizes. That gives us flexiability to to move into whatever the winning product and whatever the winning brand is going to be.

And we're in a healthy position in terms of we're performing a heck of a lot better than we had the last couple of years in running our business. So if things suddenly shift we've got dry powder.

And we've got dry powder and a number of can sizes. It gives us flexibility to.

To move into whatever the winning product in whatever the winning brands is going to be so.

I am not concerned about us stepping into upside.

Speaker 3: So I'm not concerned about usstepping into upside and we're going to manage inventory positions and safety stock levels. Really, with a lot of disappoint here in the second quarter and angels, just to give more granularity, in the first PI comments I said in North America we essentially be flat sequentially. First quarter of the second quarter.

And we're going to manage inventory positions and safety stock levels.

Really with a lot of discipline here in the second quarter and Angel just to give more granularity on the parent.

<unk> comment as I said in North America, we would essentially be flat sequentially first quarter to second quarter, given the downtime and things that we're going to do and getting our inventory right in South America, the negative will be larger than that given the volume the mix of the absorption will be softer than it was in Q1.

Speaker 4: Given the downtime of things that we're going to and getting our inventories right in South America. The negative will be larger than that. Given the volume, the mix and the absorption, it will be softer than it was in Q1 and then we expect to be in a better position as we move into the busier second half of the year.

And then we expect to be in a better position as we move into the busier second half of the year.

Speaker 21: That's fail for Thank you and then just maybe following up on, you know somethis strengthened to other segment here you talked about Corp orate, reiterated the guidance there, maybe someof pieces thestreng you're seeing in airospace And just what underlying expectations for that segment will be kind of for the full year. I you know our aerosol business is doing really well.

That's very helpful. Thank you.

And then just maybe following up on the strength in the other segment I'm curious you talked about corporate.

Guidance there just maybe some of the other pieces some of the strength youre seeing in aerospace and just what the underlying expectations for that segment will be kind of for the full year.

Hi.

Our aerosol business is doing really well we continue to win business. We continue to have.

Speaker 4: We continue to win business. We continue to have nice volume growth that businesses you know drink- COVID-19 was really impacted, I would say vies globally and we're seeing that really come back nicely. And new products and innovation is driving a lot of that, both kind of in the typical a erosol personal care space, but also in the water airospace and the refill.

Nice volume growth.

That business is.

Drink Covid it was really impacted I would say volumes globally, and we're seeing that really come back nicely.

And new products and innovation is driving a lot of that.

Both kind of in the typical aerosol personal care space, but also in the water space on the refill and reusable side and in aerospace.

Speaker 4: And reusable side. And in aero, space- you know- I think somebody mentioned we- we had a choppy year last year. We had supply chain challenges that cost us money and the business is performing exceptionally well. They're stepping into these newer contracts that we were confident would be good and they are good and we'll see those- the benefits of that for the full year.

I think somebody mentioned, we had a choppy year last year, we had supply chain challenges that costs us money.

The business is performing exceptionally well theyre stepping into these newer contracts that we were confident would be good and they are good and we will see the benefits of that for the full year. So we're really excited about those businesses.

Speaker 23: So we're really excited about those businesses.

Speaker 21: Thank you Don apprecisure have.

Thank you John I appreciate it.

Speaker 1: Thank you. The next question comes. Some clean record of UBS. Please go ahead.

Thank you. The next question comes from Cleve Rueckert of UBS. Please go ahead.

Speaker 10: He good morning, thanks to SA, my questions morning. A couple, a couple of quick followups from me. I'm just curious no, just just taigking into the inventories a little bit. I'm just curious where inventories, both from a you know, finished products and raw material standpoint, where they stand versus your target, I guess as of the end of the quarter and you know if if you were building inventories or if you're starting to them down at this point.

Hey, good morning, Thanks for taking my questions.

A couple a couple of quick follow ups from me I'm just curious.

Just digging into the inventories a little bit I'm, just curious where inventories both finished products and raw materials standpoint, where they stand versus your target.

I guess as of the end of the quarter and if.

If you were building inventories or if you're starting to work them down at this point.

Speaker 24: But we're working in North America and in South America we're working them down.

But we're working in North America, and in South America, we're working them down so.

Speaker 4: So that that's why you see, you know, a big swing in payables. We're not ordering as much metal, both finished goods and and and coil raw material, and so we've got another quarter of that to do in Q2 and then we make will be in a much better position from an inventory standpoint. In Europe it's not you're, we're Turning on a couple of plants, So it's it's very different dynamic there.

So that's why you see a big swing in payables were not ordering as much metal.

Both finished goods.

In coil raw material and so we've got another quarter of that to do in Q2, and then we think we'll be in a much better position from an inventory standpoint in Europe , it's not.

We're turning out a couple of plants. So it's a very different dynamic there, but north America and South America, it's about getting our inventories down.

Speaker 4: But in North America, South America, it's about getting our inventories down.

Speaker 10: Right and is that more on the raw material side of mean mentioned in coil, is a the finished product inventories as you both are, it's both. I mean re, and we're talking in North America, we're talking days.

Right and is that more on the raw materials side I mean, you mentioned coil finished product.

Inventories.

It's both.

In North America, we're talking days.

Of finished good inventory, but.

Speaker 18: Of finished good inventory. But we a lot of the raw material piece is still a bit of an overhang from last year because we were bring in a lot and anticipating growth at this time last year. So we've held on tolarger raw material stores and we've been working that off, continuing to work that off and the finished goods.

A lot of the raw material piece is still a bit of an overhang from last year, because we are bringing in a lot and anticipating growth at this time last year. So we've held onto.

Larger raw material stores, and we've been working that off we're continuing to work that off and the finished goods.

Speaker 18: It's not significantly different than what we anticipated heading into the year, but a few days of additional curtailment is meaningful in a quarter and I think that's what scot signaling to you.

It's not significantly different than what we anticipated heading into the year, but a few days of additional curtailment is meaningful in a quarter and I think thats, what Scott signaling to you.

Speaker 10: Yeah Yeah I think that's very clear and then just like a could follow up did you import any cans into North America in the first quarter no.

Yes, I think that's pretty clear and then just a quick follow up.

Could you import any cans into North America in the first quarter.

Yes.

Speaker 10: Okay that's, that's very clear. And then one last one from me: I on the on the promotional acity right, maybe one maybe this will help for further. uh, Q N a regarding that question. We didn't last year either. So uh, there was a twenty one to twenty two.

Okay.

It's very clear.

Then one last one from me.

On the on the promotional accelerating maybe one maybe this will help for further Q&A regarding that question, we didn't last year either.

There was a 'twenty one to 'twenty two.

Speaker 2: Bridge at each quarter for lette but we've we've originated all that production last year and you won't have any of that commentary for North America specifically we did have a little bit of Saudi into Europe last year and that's now gone away and we've.

Bridge at each quarter for that but we've.

We've originated all of that production last year and you won't have any any of that commentary for North America, specifically we.

We did have a little bit of Saudi into Europe last year.

That's now gone away and we've.

Speaker 18: We've got origination production now in Europe .

We've got origination production now in Europe .

Speaker 25: Okay and then just the. The last one for me is on promotional activity and appreciate the.

Okay.

And then just the last one for me is on promotional activity.

I appreciate that.

Speaker 10: Conservative tone that been you taking and.

Conservative tone that you are taking in the <unk>.

Speaker 25: In the plan, but I just, when do you expect to gain visibility? You mean, is there, is there still at this point in the year, the potential for promotional activity to pick up and have a material impact on volumes?

<unk>.

Yes.

When do you expect to gain visibility I mean is there is there still at this point in the year the potential for promotional activity to pick up and have a material impact on volumes.

Speaker 2: Yes I mean absolutely. I mean if promotion for promotion works really well for us from a volume perspective. The degree to which the promotion is, I think, is the big question, and we're really not trying to avoid this question. But I think here's the backdrop that we're facing relative to.

Yes, I mean, absolutely.

Promotion promotion works really well for us from a volume perspective, the degree to which the promotion as I think is the big question and.

We're really not trying to.

Avoid this question, but I think here's the backdrop that we're facing relative to.

<unk>.

Speaker 18: Going into much detail or fully understanding the real impacts of what a promotion would look like and I would react consistent with kind of historical norms if you look at a 12 pack of.

Going into much detail are fully understanding the real impacts are what our promotion would look like and how we would react consistent with kind of historical norms. If you look at a 12 pack of <unk>.

Speaker 18: Csd cans.

<unk> cans.

Speaker 18: three years ago was about four bucks on average today it's eight So is a dollar off going to move it it'is $2 off going to move it So it's not just promotion it it's the elasticity and around the price of the promotion that is very difficult cor CT to us to characterize and I think it's difficult even for our customers probably to understand So.

Three years ago was about four bucks on average today, it's eight.

<unk> is a dollar off going to move it as $2 off going to move it. So it's not just promotion. It's it's the elasticity in around the price of the promotion that is very difficult for us to characterize and I think it's difficult even for our customers probably to understand so.

Speaker 3: At this point we need to plan to deliver cash and deliver earnings, and the end consumer strength or weakness is also something that's very difficult to understand right now, just given the stimulus packages and higher interest rates and all of those things. It's it's just, it's ambiguous and difficult to quantify right now. So we're running for cash and we're managing what's in front of us and until something changes substantively, I think that's the best tone for our Corporation our, our employees to manage to.

At this point.

We need to plan to deliver cash and deliver earnings and the end consumer strength or weakness is also something thats very difficult to understand right now just given.

The stimulus packages and higher interest rates and all of those things.

It's just it's ambiguous and.

Difficult to quantify right now so we're running for cash and where we're managing what's in front of us and until something changes substantively.

I think thats, the best tone for our corporation, our employees to manage too.

Speaker 10: Yeah that makes a lot of sense. Good luck with at all, Thank you, Thank you.

Yes that makes a lot of sense. Good luck with it all thank you. Thank you.

Speaker 1: Thank you. The next question comes'm Anthony mmarry of city.

Thank you. The next question comes from Anthony Pettinari Citi.

Speaker 12: Please go ahead.

Please go ahead.

Speaker 4: Good morning. This is actually Brian berd minyer philling he gr thankans for King. Any questions?

Good morning, this is actually Brian bird winter selling hi, Brian Thanks for taking my questions.

Speaker 26: You that? Yes, it's. You know that, you Yeah.

You bet.

Yes.

Speaker 4: $28 million TA influwas the power agreement settle ment in one qube. You was that part of your guidance originally. I don't remember during that on the four Q earningest call.

$28 million tailwind.

Our agreement with <unk> was that part of your guidance originally I don't remember hearing that <unk> earnings call.

Speaker 4: When you talk about North americabeing.

When you're talking about North America, being kind of flat quarter over quarter I assume this means it will actually be like.

Speaker 4: Kind a flat order order to I assume this means it will actually be like off on an applees applees basis because I.

Apple basis, because I don't expect this tailwind to repeat in <unk> is that accurate.

Speaker 4: Don't expect this talent to repeat 2, Q then acate. You are correct that it will be up year over year with flat, with the first quarter. In terms of the virtual power purchase agreement and when we had our previous call we were negotiating the settlement of it So we weren't really going to discuss it. Part of that was built into our first quarter numbers because we knew we were going to settle it.

Correct, it will be up year over year with flat with the first quarter in terms of the virtual power purchase agreement and when we had our previous call.

We were negotiating the settlement of it so we weren't really going to discuss it part of that was built into our first quarter numbers. Because we knew we were going to settle it. We just didn't know what the amount would be about would have run through our P&L over time added last year, but the provider wanted to exit the <unk>.

Speaker 2: We just didn't know what the amount would be.

Speaker 2: And that amount would have run through our PL over time and in last year. But the provider wanted to exit the contract and we were able to extract a very favorable outcome for us and all that outcome hit us and benefited us in the first quarter. But that will not repeat.

<unk> and we were able to.

Extract a very favorable outcome for us and all of that outcome hit us.

Benefited us in the first quarter, but that will not repeat.

Speaker 2: We've gote into other virtual power purchase agreements to make up for the lost clean energy that we were buying, and so we're in a pretvgood spot.

Into other virtual power purchase agreements to make up for the lost clean energy that we were buying and so we're in a pretty good spot.

Speaker 4: Okay understood Thank. Thank you for my detail. And last question for me: we March. You announced you having some discussions about the possible closureof.

Okay understood. Thank you for that detail and last question for me March you announced you were having some discussions about the possible closure of the <unk> plant.

Speaker 4: All killed plant. You'm just wondering, you know how are those discussions going and, based on what you know right now, what you can say right now is it is possible to say when or get.

Wondering how are those discussions going and based on what you know right now what you can say right now as possible to say.

Yes.

Speaker 3: Yeah I would say in terms of.

Yes.

I'd say in terms of.

Speaker 3: Filling out your model. I wouldn't count on anything in 2023 relative to an uptick in fixed cost savings.

Filling out your model I wouldn't count on any anything in 2023 relative to an.

An uptick in.

Fixed cost savings.

Speaker 27: We.

We.

Speaker 18: Said we were entertaining closing it. I think we re committed to closing that facility now. That's a subtle change, and the other thing is there's just not a lot to talk about at this point because we're entering into effectx bargaining now. As we know more, we'll update you, but you'll see capacity coming out at some point this year and you'll see that.

We said we were entertaining closing it I think we are committed to closing that facility now that's a subtle change.

And the other thing is theres just not a lot to talk about at this point because we are entering into effects bargaining now as we know more we'll update you.

But youll see.

Capacity coming out at some point.

This year and you'll see that.

Speaker 18: That tailwind in 24 is what I would anticipate, but I don't know the speifics of it at this time.

That tailwind in 'twenty four is what I would anticipate but I don't know the specifics of it at this time.

Speaker 26: Okay thanks for the detail.

Okay, yes, thanks, a lot of that detail.

Speaker 26: Then you in the qut.

Good luck in the quarter.

Speaker 28: Thank you.

Thank you.

Speaker 1: Thank you. The next question comes from a roomu. This one something of R B, C. pleases go ahead.

Thank you. The next question comes from Arun Viswanathan of RBC. Please go ahead.

Speaker 29: Great thanks for taking my question reats on the strong quarter I guess in first off in North Central America nor in the America region or North Central America you're able to kind of hit very high levels of segment income in Q1 that I thought would be more likely to materialize in Q2 So just wondering now as you look into Q2 you expect kind of flat performance there and maybe comment also on Brazil obviously we've seen some inroads on the glass side But what are your expectations I guess as far as substrate makesx as you look in the Brazil for the rest of the year Thank.

Great. Thanks for taking my question congrats on the strong quarter.

I guess first off in North Central America, and the Americas region or North Central America.

Youre able to kind of hit.

Very high levels and segment income.

In Q1 that I thought would be more likely to materialize in Q2. So.

Just wondering now as you look into Q2.

Do you expect kind of flat performance there.

And.

Maybe you could comment also on.

Brazil.

Obviously, we've seen some inroads on the glass side, but what are your expectations I guess as far as substrate mix as you look into Brazil for the rest of the year.

Speaker 2: Yes I'd say North and sexual America. What you're seeing is.

Yes, I'd say, north and Central America, what Youre seeing is.

Speaker 2: All the hard work from last year. In terms of cost out, you see, our's DA is much lower. The plants are operating better. we're- I think we're getting our group back with with how we operate. So it performed at or above our expectations to. We expect that softer volume, and our game plan is to perform very well even if volumes are soft, and so that's exactly what you're seeing.

All of the hard work from last year in terms of cost out.

You see our SG&A is much lower the plants are operating butter.

We're I think we're getting our groove back with with how we operate.

Formed.

At or above our expectations too we expected softer volume in our game plan is to perform very well, even if volumes are soft and so thats exactly what youre seeing you also got the we got a benefit of that virtual power purchase agreement in the first quarter that were all repeat and so but we'll we'll keep earnings relatively flat and that's due to.

Speaker 2: You also got- we got- a benefit of that virtual power purchase agreement in the first quarter. That 't we repeat. And so bub, we'll keep earnings relatively flat, and that's due to improved performance.

<unk> improved performance.

Speaker 18: Across the business.

Across the business.

Speaker 18: In terms of the glass versus aluminum substrate penetration or shift that we've seen here in the last 12 to 18 months. It's in line with what's happened historically in a higher inflationary environment. You do see a return to returnable glass.

In terms of the glass versus aluminum substrate.

Penetration or shift that we've seen here in the last 12 months to 18 months. It's in line with what's happened historically in a higher inflationary environment you do see a return to returnable glass.

Speaker 3: Somewhere in that 5% to six 7% share shipift. That's what we saw last year.

Somewhere in that five to six 7% share shift that's what we saw last year.

Speaker 3: A scot, indicated in his.

As Scott indicated in his.

Speaker 3: Comments at the outset and I think we characterize what we believe to.

Comments at the outset, and I think we characterize what we believe to.

Speaker 18: In the second half, as inflation disicipates in some of the actual cost and hedge positions of our customers down in Brazil allowed them to step into what the true cost of aluminumare. We're anticipating a strong peak season. I'll show up in the second half of Q3 and Q4. For us we're not hearing anything different. I'll actually be down in South America next week, So I anticipate to hear more of the same, but that I dont't, don't it?

In the second half.

As inflation dissipates and some of the actual cost and hedge positions of our customers down in Brazil.

Allow them to step into what the true cost of aluminum are we're anticipating a strong peak season that will show up in the second half of Q3 and Q4 for us.

We're not hearing anything different.

I'll actually be down in South America next week, so I anticipate to hear more of the same.

But that I don't I don't see it as a permanent shift I guess would be the answer if thats the underlying question there.

Speaker 3: itassaperman shift iguess, would be the answer if that's the underlying question there.

Speaker 29: Great thanks. And then as a followall-up on Europe , you know I guess So: was there any work done on your side to renegotiate contracts for energy or any other cost items? Is there any requirement extra work you have to do on that side, or not necessarily?

Great. Thanks, and then.

As a follow up on Europe .

I guess was there any work done on your side to renegotiate contracts for.

Energy or any other cost items is there any requirement extra.

Extra work you have to do on that side or.

Not necessarily.

Speaker 2: A lot of that lot of that was already done the European business has done a really good job both on the commercial front and the supply chain front to manage our costs So that's and you're seeing that in their performance too I think both in that business and equally excellent job by our aerosol business which has a significant.

A lot of that was already done European business has done a really good job both on the commercial front on the supply chain front to manage our costs, so thats and youre seeing that in their performance too.

I think both in that business in.

Sure.

Equally.

Excellent job.

By our aerosol business, which is a significant.

Speaker 18: Presence in Europe . So both of those businesses in both of those management teams have done an extraordinary job to work as partners with our customers to get to a good medium and longer-term outcome, as we managed through way a very different energy and inflationary backdrop in Europe . So I think we've we've done the right thing by our customers and our teams have done the right thing by our stakeholders.

Our presence in Europe . So both of those businesses in both of those management teams have done an extraordinary job to work as partners with our customers to get to a good medium and longer term outcome as we manage through a very different.

Energy and inflationary backdrop in Europe . So.

I think we've.

We've done the right thing by our customers and.

Our teams have done the right thing by our stakeholders.

Speaker 21: Great thanks lot.

Great. Thanks, a lot.

Speaker 30: Thank you.

Thank you.

Speaker 1: The next question: comtom Mike rockland of truest. Please go ahead.

The next question comes from Mike Rockland Trust. Please go ahead.

Speaker 6: Thank you. I' dance scot and raps on the hollid arter in B phone youeither.

Thank you, Dan Scott and Greg.

Okay.

Okay.

Speaker 6: Just a So good one ter mayme, just in terms of the guy, the guy in North America', S particularly being tosolicit with you. What type of volume growth is that? And then, is that done? Bed slightly down the expect for the year and if So, could there be upside of the court, if you do actually saw this is some promotional activities is in off.

Okay.

Some quick ones for me just in terms of the guidance EBIT for North America, particularly being split.

What type of volume growth.

Is that does that embed the slightly down do you expect for the year and if so could there be upside to this.

Have you started to see some promotional activity.

Speaker 18: yesyou're a bit choppy there, but I think the question is kind of: what's the underlying demand profile or assumption built into our current North America projection? And you're correct, we believe it will be slightly down at this point as we look out over the course and the balance of the year, given really very little insight into the actual decision or process related to pricing and volume.

Yes, you were a bit choppy there, but I think the question is kind of what's the underlying demand profile or assumption built into our current North America projection and you are correct. We believe it will be slightly down at this point as we look out over the course of the balance of the year given.

Really very little insight into the actual decision or process really related to pricing and volume. It's a volume business at the end of the day and we're going to need some.

Speaker 18: It's a volume business at the end of the day and we're going to need some.

Speaker 18: But the teams. All of the cost actions we took, all of all of the fixed cost actions that we took.

But the teams.

All of the cost actions, we took all of the all of the fixed cost actions that we took.

As difficult as those were all of those give us the ability to execute against our earnings and our cash profile more importantly.

Speaker 18: As difficult as those were. All of those give us the ability to execute against our earnings and our cash profile, more importantly, based on kind of a flat to slightly down volume profile. And that's what we currently anticipate at mech ods in our model: second half weighted in terms of things like the PPI pass-through mechanisms and even some additional cost savings that we anticipate in the second half of the year.

Based on.

Kind of a flat to slightly down volume profile and Thats, what we currently anticipate and that's what's in our model second half weighted in terms of things like the PPI pass through mechanisms and even some additional cost savings that we anticipate in the second half of the year, but yes.

Speaker 18: But yes, second half weighted plan.

Yes, second half weighted plan.

Speaker 3: wheather volume moves meaningfully off of our current run rate, that would be upside correct and we would. Yes, we look forward to seeingon that upside. We can step into it, as I commented earlier in the call, in both safety stock and our operational and performance. So there's room for upside. But we need to see that the end-consumer health and pricing behavior will play a role, and a significant role in that.

Whether volume moves meaningfully off of our current run rate that would be upside correct.

And we would yes, we look forward to seeing that upside we can step into it as I commented earlier in the call on both safety stock and our operational performance. So there.

There's room for upside, but we need to see that the.

In consumer health in pricing behavior will play play a role and a significant role in that.

Speaker 6: Got and this this one quick followupics on the terms of South America and you mentioned them being a little bit behind the market. Was part of that being behind the market do the bankruptcy of a large beer producer death down there? And then, if you were behind the market, any updated thoughts on the plants that you've idled in brazil- fr tal and others- and whether they can ultimately become permanent cloachres?

Got it and then just one quick follow up is on the terms of South America, and you mentioned and being a little bit behind the market.

Part of that.

That being behind the market due to the bankruptcy of a large peer producers down there and then if you were behind the market.

Any updated thoughts on the plans that you.

You've idled in Brazil, a futon, others and whether they can ultimately become permanent closures.

Speaker 18: Yes we the only permanent closures we've had. We've announced So we've got dry powder in that marketplace. Some of these assets are.

Yes.

The only permanent closures, we've had we've announced so we've got dry powder in that marketplace. Some of some of these assets are.

Yes.

Speaker 3: Being contemplated to open back up depending on what happens in the market. As you indicated, there was share shift in Q1.

Being contemplated to open back up depending on what happens in the market as you indicated there was share shift in Q1.

Speaker 3: And there was 1: one of our competitorcompetitors benefited because they had outweighted exposure to one of the beer brands there. A weaker beer customer or beer mix may may shift around as it does from time to time. We believe that the, the customer relationships that we have, they're excited about the second half of the year, more so for the, for the cost shift and their hedges rolling off and us being able to step into our aluminum profile.

And there was one one of our competitive competitors benefited because they had outweighed exposure to one of the beer brands there.

A weaker beer customer or beer mix may may shift around as it does.

Does from time to time.

We believe that.

Yeah.

The customer relationships that we have they're excited about the second half of the year more so for the for the cost shift in their hedges rolling off and us being able to step into our aluminum profile, but yes.

Speaker 3: But yes, it was a little choppier because the customer mix for us in the first quarter we didn't have any exposure to the customer, the bankroupps.

Yes, it was a little choppy or because of customer mix for us in the first quarter, we didn't have any exposure to the customer that went bankrupt.

Speaker 6: Got it very clear. Good looking, not Thank Q, Thank you.

Got it very clear good luck in <unk>.

Thank you.

Speaker 31: Thank you.

Thank you.

Speaker 1: The next question com in in filling of Jeffrey. Please go ahead.

The next question comes from Phil <unk> of Jefferies. Please go ahead.

Speaker 32: Guys Congrats on a solid quarter in a pretty tough demand environment. I guess that to be helpful. Then I think it'd be helpfulfully kind of give us some color in terms of how inchyour quarter volume trends kind of sell throughout you know, North America and Central America, how aprils kind of shaping up and do you kind of expecting, expect more of the same effectively in two Q in terms of the volume trends?

Hey, guys congrats on a solid quarter in a pretty tough demand environment.

Yes, that'd be helpful. Dan I think it would be helpful to kind of give us some color in terms of how intra quarter volume trends kind of tell us throughout North America and Central America. How April is kind of shaping up and do you kind of expecting to expect more of the same effectively in <unk> in terms of the volume trends.

Speaker 3: Yeah thanks for the qu I do. In fact's it's probably a little softer than than Q1, but that's anticipated and we're managing against that. But Yeah, as we sit here today, there's there's not a lot of there's not a lot of movement by the customer makes to shift what's what's currently happening. April is 'is usually not the month that you you usually see activity, So you know you get to the second half of May.

Yes, thanks for the quick I do.

In fact, it's probably a little softer than Q1, but thats anticipated and we're managing against that but yes, as we sit here today.

There is there's not a lot of.

Theres not a lot of movement by the customer to shift what's what's currently happening.

Apparel is usually not the month that you usually see activity so.

Speaker 3: In June that becomes really important, as you had in the peak season. But as we sit here today, I think the way you characterize it is correct. It's, it's largely in line with Q1 and pockets, depending on customer makes, maybe a bit softer.

Get to the second half of May and June that becomes really important as you head into peak season.

But as we sit here today I think the way you characterize it is correct.

It's largely in line with Q1 and pockets depending on customer mix may be a bit softer.

Speaker 33: Got you and if for Latin America Central America latinamerica you expect if I heard you correctly D mid-single-digit growth So that would imply a pretty sizable ramp in the back half part of this it sounds like it's predicated on the view that maybe your customers.

Got you.

Latin America Central America, Latin America, do you expecting if I heard you correctly, Dan mid single digit growth so that would imply.

A pretty sizeable ramp in the back half part of this it sounds like it's predicated on the view that maybe your customers.

Speaker 32: Lean into L hedges rolling off. How much line of's do you have? I mean, like just like promotions in North America it's been tough to predict. How much line of set do you have that your customers would behave as such and will help you kind of jumpstart that demand background, because it's been pretty choppy in Brazil.

Lean into aluminum hedges rolling off how much line of sight do you have I mean like just like promotions in North America, it's been tough to predict how much line of sight you have.

That your customers would behave as such and will help you kind of jumpstart that demand backdrop, because it's been pretty choppy in Brazil.

Speaker 3: No I think it's a great question and it is if we built our plan on its second half loaded because of everything that you just outlined and indicated. The conversations that we're having with our customers- I'll be down there next week- has all been. You should count on that. That's what they're planning for, but plans aren't absolute. So at this point I haven't heard anything, I don't have any insight that would suggest anything other than what we've laid out, what we've characterized.

No I think it's a great question and it is we built our plan on its second half loaded because of everything that you just outlined and indicated the conversations that we're having with our customers I'll be down there next week has all been yes.

You should count on that.

That's what they are planning for.

But plans arent absolute so.

At this point I haven't heard anything I don't have any insight that would suggest anything other than what we've laid out what we've characterized but I think your point's valid I mean, there's there's certainly risk and a significantly elevated volume position, but our contracts also have backstop provisions in there that.

Speaker 3: But I think your points valid. I mean there's, there's certainly risk in a significantly elevated volume position that our contracts also have backstop provisions than there that give us, give us a little bit more teeth than maybe in years past.

Give us give us a little bit more teeth than maybe in years past.

Okay, and sorry, just to sneak one more in.

Speaker 34: okayin sorry, just to takeke one We're in North America, you're expecting volumes. We get flat to down a little bit. Any color in the back half, what that assumed. Is it more like flat? Is it still down a little bit or maybe infllect a little bit up in the back half of North America?

North America, Youre expecting volumes to be flat to down a little bit any color in the back half what that assumes is it more like flat is it still down a little bit or maybe inflect, a little bit up in the back half of North America.

Speaker 26: Yes it's right now I would. How we get there is is slight declines in the first half and sflattish in the back half.

Yes.

<unk> right now how we get there is slight declines in the first half and flattish in the back half.

Speaker 18: I think there's opportunity for more to hatspin's pack half, but that's not was built in our current plan.

I think there is opportunity for more to aspen's back half, but that's not what's built into our current plan.

Speaker 32: Okay I think that's more than reasonable, Thank you, Thank you.

I think thats more than reasonable. Thank you yeah. Thank you.

Thank you.

Speaker 35: Thank you.

Speaker 1: The next questionush comes to Mike, my head of berclays.

The next question comes from Mike might have of Barclays. Please go ahead.

Speaker 12: Please go ahead.

Speaker 36: Great thanks. Good morning guys. I just wanted to actually call off one fill last question there. I'm just thinking about the North America earnings cadence for the year. I think scot you fairly clear on the two Q outlook but is: how should we think about the magnitude of the second half step up, just as you think about the new contracts lling end?

Great. Thanks, Good morning, guys.

Wanted to actually follow up on Bill's last question. There just thinking about North America earnings cadence for the year I think Scott you were fairly clear on the <unk> outlook.

How should we think about the magnitude of the second half step up just as you think about the new contracts fall again.

Speaker 2: Well we get more of the PPI in the back half of the year and.

Well, we get more of the PPI in the back half of the year.

<unk>.

Speaker 19: But let's face it that the Q4 complish.

Slip.

Let's face it the Q4 comp was great.

Speaker 2: Was pretty easy for last year, So we should do meaningfully better than Q4 of last year, which was not very good, but I would see we had a pretty good we pretty good to third quarter last year.

It was pretty easy for last year. So we should do meaningfully better than Q4 of last year, which was not very good.

But I would see.

We had a pretty good we got a pretty good third quarter last year.

Speaker 2: Really in terms of performance in North America. So it's definitely back half weighted, with most of it in the fourth quarter.

Really in terms of performance in North America. So.

It's definitely back half weighted with most of it in the fourth quarter.

Speaker 36: Got it. It fair enough. And then second briefly, you talked a lot about North America and South America earnings outlook. Could you maybe speak to the earnings outlook for EMEA into the second quarter and beyond?

Got it fair enough and then.

Briefly you talked a lot about North America, and South America earnings outlook could you maybe speak to the earnings outlook for EMEA.

The second quarter and beyond.

Speaker 2: Yes Europe is really. We've got the headwind of Russia. So that was $32 million in the first quarter. It's $4 million in the second quarterit moderates to $14 million in the third quarter. So you've got those B headwind each of the the next couple of quarters, second quarter being the largest headwind.

Yes, Europe is really we've got the headwind of Russia. So that was $32 million in the first quarter its $40 million in the second quarter.

Moderates to $14 million in the third quarter. So you've got that headwind each of the next couple of quarters second quarter being the largest headwind because Russia performed really well last year in 'twenty two.

Speaker 2: Because Russia performed really well last year in' 22. But all of the things that they've been doing from a cost standpoint, from a contract standpoint, from an inflation passthrough standpoint have been positive and they're seeing nice volume, that we've got new plants coming up, So we feel really good about the European business for the full year.

But all of the things that they've been doing from a cost standpoint from a contract standpoint from an inflation pass through standpoint.

Been positive, but they are seeing nice volume, but we've got new plants coming up so we feel really good about the European business for the full year.

Speaker 18: Yes I think how you look at Europe is FX stabilize inflation stabilize big headwind first half of the year in terms of operating earnings from the divestment of Russia and then you step into two new facilities in the second half of the year and we're still seeing growth in that business on improved contractual terms So.

Yes, I think.

How you look at Europe , as FX stabilize inflation stabilize.

Big headwind first half of the year in terms of operating earnings from the divestment of Russia, and then you step into the two new facilities in the second half of the year and we're still seeing growth in that in that business unimproved contractual terms.

Speaker 3: It'll be continued improved performance once you step out of the second quarter with the drag from a $4 million Q2 in Russia.

So.

It'll be continued improved performance once you step out of the second quarter with the with the drag from a $40 million Q2 in Russia.

Speaker 21: Great Thank you.

Great. Thank you.

Speaker 37: Thank you.

Thank you.

Speaker 1: The next question: got some Kyle White, do't your Bank? Please go ahead.

The next question comes from Kyle White Deutsche Bank. Please go ahead.

Speaker 38: Good morning they should take in. The question wanted to focus on beverage can new product introduction. You know a lot of uncertainty in the economy. Consumers also point of pulling back a little bit on this Bend. Are you seeing any reduction in new product offerings or introductions from your customers, understanding that the can obviously was a greater share of this, but some of these new products and energy, alcoholic and ready to doing space have been keyto the growth, the just ry where you're seeing there.

Hey, good morning, Thanks for taking the question I wanted to focus on beverage can new product introduction.

A lot of uncertainty in the economy consumers also kind of pulling back a little bit on the spend are you seeing any reduction in new product offerings or introductions from your customers understanding that you can't obviously one of the greater share of.

This but.

Some of these new products and energy alcoholic ready to drink space have been key to the growth, but just curious what youre seeing there.

Speaker 18: Yeah Co. first of all, Congratulation. A lot of the information we're getting- a new product in form innovation is coming from bond, your new baby girl boice. Sorry though Yeah he, I'm sure what he's going to be oneing is ready to drink cocktailed and but but nutritional energy drinkke. In all seriousness, lots of innovations still happening.

Yes, Kyle first of all congratulation on a lot of the information we're getting on new product innovation is coming from bond your new Baby girl.

Boy sorry.

Right.

Yeah.

I am sure what he is going to be wanting is ready to drink cocktails and.

But but nutritional energy drinks in all seriousness lots of innovation is still happening.

And continuing to see share gains from our ready to drink cocktails I think.

Speaker 3: And continuing to see share gains from art ready to drink cocktails I think a couple of customers have really benefited in that space and.

A couple of customers have really benefited.

In that space and.

Speaker 3: There's almost a forcing mechanism here like if beer is declining those alcoholic comp IES or new beverage companies are going to have to step into things to sell and they're innovating at the fastest rate and then we've seen some of the historical csb companies that have introduced alcoholic beverage and they really done well so.

There's almost a forcing mechanism here like if beer is declining those alcohol companies, our new beverage companies are going to have to step into things to sell and they're innovating at the fastest rate.

And then we've seen some of the historical CSD companies that have introduced alcoholic beverage and they've really done well so.

Speaker 18: You'll also see the other part of this is.

Youll also see the other part of this is <unk>.

Speaker 18: youthere, there's a greater opening.

There is there is a greater opening.

Speaker 18: As the price increases have been the lever with which folks have pulled our customers pull. It creates a disruptive space for innovation to come in. That's always what we've seen, and so it's right for more innovation and more disruption. And you're starting to see that. And now that we have cans available, cans will win, and those tailwinds manifest here.

As the price increases have been.

Then the lever with which folks have pulled our customers support it creates.

As a disruptive space for innovation to come in that's always what we've seen and so it's ripe for more innovation and more disruption and youre starting to see that and now that we have cans available.

Cans will win and those <unk> will.

Will manifest here.

More in the medium term, but we're having all those conversations so I think I think that will continue to be a benefit and a tailwind for for the can still seeing new product introductions at those 70 plus percent levels. So nothing's nothing's changed in terms of that the can continues to win.

Speaker 3: More in the medium term. But we're having all those conversations, So I think I think that will continue to be a benefit and a tailwind for the can, still seeing new product introductions at those 70 -plus percent levels. So nothing' nothing's changed in terms of that. The can continues to win.

Speaker 3: So we're excited about the future prospects and new product introductions and, in fact, calts- today we have one of the leading beverage innovation houses- is actually visiting us here in Colorado today, So we're really excited to be working with them and all kinds of folks with new ideas and new beverage categories.

So we're excited about the future prospects in the <unk>.

New product introductions and in fact today, we have one of the leading beverage innovation houses is actually visiting us here in Colorado today. So we're really excited to be working with them in all kinds of folks with new ideas and new beverage categories.

Speaker 39: Got in and I appreciate the remarks. Maybe maybe a soft fils are here for the little guy here shortly. But next question I want to focus on the startups related to Europe . Just curious how the U K and the chezech public planant are going and any kind of you know how the ramp up there is going in any start proross to call out.

Got it and I appreciate the remarks, maybe maybe a soft sell through here for the little Guy here shortly but.

I want to focus on.

The startup related to Europe I was just curious how the U K in the Czech Republic plant are doing any kind of how the ramp up there is going to in any startup cost to call out.

Speaker 18: No I'll leave it to scot, and I don't think anything meaningful in the startup cus. They're right on track. The teams have done a great job. We've got sister plant concepts in terms of training, So we've brought folks in. They're helping us out in.

Ill leave it to Scott and I don't think anything meaningful on the startup costs, but they're they're right on track.

The teams have done a great job.

We've got SR plant concepts in terms of training, so we brought folks and theyre, helping us out in.

Speaker 18: Any the other local facilities, So they'll be well trained and ready step in on day one when we have production and operation. We we probably had about $5 million of cost- startup costs- in the first quarter. They'll be more of that in the second quarter. But I was just looking last night actually, at the startup curve for each of those plants and it's been phenomenally well executed.

And the other local facilities, so there'll be well trained and ready to step in on day one when.

When we have production and operation.

We had about $5 million of costs start up costs in the first quarter there'll be more of that in the second quarter, but I was just looking last night actually at the startup curve for each of those plants and it's been phenomenally well executed we're right on where we thought we would be in.

Speaker 2: We're right on where we thought we would be and we're real happy with the performance and the execution of those projects.

We're real happy with the performance and the execution of those projects.

Speaker 39: Thank you, appreciate the details.

Thank you I appreciate the details.

Speaker 40: Thank you.

Thank you.

Speaker 1: Thank you. The next question ces M Dave hady of.

Thank you. The next question comes from Gabe <unk> of Wells Fargo. Please go ahead.

Speaker 12: Well smartgo letase go ahead.

Speaker 13: dansscot. Good morning, congrress or.

Dan Scott Good morning, Congrats morning.

Speaker 41: Thanks.

Thanks.

Speaker 6: umi have a question about sort of just the full year and then the second year, our second quarter cadence. Excuse me, I feel like there's a decent amount noise and sort of the just underlying performance.

I have a question about sort of just the full year and then the second year.

Quarter cadence excuse me.

I feel like there's a decent amount of nor.

Noise in sort of the underlying performance.

Speaker 13: havingt you talk about a stable business but North Central America profit being up almost two X from four Q and I appreciate that was a ND quarter but.

Can you talk about a stable business, but north.

North Central America profit being up almost <unk> from.

<unk> and I appreciate that was a quarter, but.

Speaker 13: Got the Matthew gave us on being three point seven times levered by the end of the year. If I subtract out 7: 50 of cash plus the two hundred 50 million dollars of dividends, that implies 21: 50 of EBITDA.

Got the math you gave us on being three seven times levered by the end of the year.

Subtract out 750 of cash plus the $260 million of dividends that implies $21 50.

EBITDA.

Is that the right way to think about it and then sequentially would you expect EBIT to be up or down.

Speaker 13: Is that the right way to think about it? And then sequentially, would you expect EBITDA to be up or down relative to the first quarter?

The first quarter.

Hi.

Speaker 2: For the first side of your question, I would say you're directionally correct where you're coming out.

For the for the first side of your question I would say you're Directionally correct.

We're coming out.

Speaker 2: On the second part in. Are you speaking to the second quarter EBITDA?

On the second part.

Are you speaking to the second quarter EBITDA.

Speaker 42: Correct like.

Correct.

Speaker 2: Yeah just know, the second looking on second quarter, second quarter ebda will be doubt.

Yes, just another side looking at second quarter second quarter EBITDA will be down.

Speaker 2: And then it'll look accelerate in the back half of the year and we explained both. We had $4 million drag from Russia.

And then that will accelerate in the back half of the year.

We explained.

We got $40 million.

Drag from Russia.

Speaker 2: We're getting our inventories right in South America, So we'll take absorption hits. We'll have negative mix in the second quarter. In the second quarter in North America the plants will perform very well and we'll make more money than we did last year. But we don't have the vppaa thing that we had in the first quarter. So I think I explained exactly how it should shake out.

We're getting our inventories right in South America. So it will take absorption hits, we'll have negative mix in the second quarter.

In the second quarter in North America, the platform performed very well and we will make more money than we did last year, but we don't have the PPA thing that we had in the first quarter. So I think I explained exactly how it should shake out.

Speaker 13: Understood and then scot, probably one for you on the balance sheet and casualty you're talking about.

Understood and then Scott probably one for you on the balance sheet and cash flow that you are talking about.

Speaker 13: And less. My model is wrong. Your days payable at 130, which is pretty good. I mean I expect you guys wouldn't want to get extended out that long yourselves. Is there anything that we should be mindful of thinking about that being a potential drag on cash flow in future years, and I think you have a billion dollars of debt due in November - is any change in the potential rate on that included in the 4: 25 of interest expense?

Most of my model is wrong your days payable are at 130.

Which is pretty good I mean, I think you guys wouldn't want to get extended out that long yourselves.

Is there anything that we should be mindful of thinking about that being a potential drag on cash flow.

The future years, and then I think you have a billion dollars of.

Debt due in November .

The change in the potential rate on that included in the 425 interest expense. Thank you.

Speaker 13: Thank you.

Speaker 24: The rate, the 4: 25, is kind of built in with any actions that we would take and when we would take those actions to deal with the maturity in November . You know we will generate a lot of cash in the back half of the year So our debt paid down really doesn't happen. This is kind of the peak leverage right now in kind of April . maytime frame stays fairly even toil in through June and then it starts to come down, but most of it will come down in the fourth quarter.

No.

Right.

The 425 is kind of built in with any actions that we would take and when we would take those actions to deal with the maturity in November which will generate a lot of cash in the back half of the year.

Got paid out really doesn't happen. This is kind of a peak leverage right now and kind of April may timeframe.

It's fairly even until through June and then it starts to come down, but most of it will come down in the fourth quarter.

Speaker 24: So that interest expense assume kind of anything we might do on the debt front.

So that interest expense assumed kind of.

Anything we might do on the debt front.

Speaker 43: Well what was the other part of the point- and know I I think implied in that statement is we recognize that we'll be retiring cheaper debt. That would be stepping into at this point November , and that's anticipated and it's got some number- and then next year we, we we're going to delever more. I I think we can both see lever and start buyingbacks and stock next year.

What was the other part of the question and.

I think implied in that statement is yeah, we recognize that will be retiring cheaper debt then we'd be stepping into at this point in November and Thats anticipated and it's got some number and.

And then next year, we are going to Delever more I think we can both delever and start buying back some stock mixture, but sure in a higher interest rate environment.

Speaker 44: But sure, in the higher interest rate environment, you know you, we probably want a little less that the world to start to stabilize. So that's good, but you know the hell, a lot over the you gave. But these rates are still not that scary. I I was around when, when we are doing a 9% to h, So you know, 6% that's really not. It's something we have to deal with, but it's not something that changes the production or changes what we're we're going.

You probably want a little less that the world is starting to stabilize so that's good but.

I'm a hell of a lot older than you gave but these rates are still not that scary I was around when we were doing eight 9% debt. So.

6%, that's really not something we have to deal with but it's not something that changes the direction of changes what were doing.

Speaker 13: Right understood, Thank you. And then the updeer question was on a day's payable or just working capital in general. I'm seeing days's table, 130 days.

Right understood. Thank you and then the other question was on the days payable or just working capital in general.

I'm seeing days payable.

Hundred 30 days.

Speaker 24: Yeah I think you know we got to manage both the supply side and the customer side from a working capital standpoint, and we do that every day and every every new contract negotiation. Those are key points. It's not just about price and volume: terms matter and so we focus on that every day and we have meetings on cash flow every month. So we're very keen and focused on it.

Yes, I think we've got to manage both the supply side on the customer side from a working capital standpoint, and we do that every day.

Every new contract negotiation those are key point, so it's not just about price and volume terms matter and so we focus on that.

Every day and we have meetings on cash flow every month, so we're very keen and focused on it.

Speaker 44: But Yeah, in a higher interest rate environment, anything that has you know a time element of money is more expensive.

Yeah at a higher interest rate environment anything that has a time element of money.

Is more expensive.

Speaker 45: Thank you.

Thank you.

Speaker 46: No.

Yes.

Speaker 1: Thank you. Our final question comes from onland.

Thank you. Our final question comes from Adam Oh Pardon me. Thank you guys.

Speaker 47: Oh pre, Thank you. I said Yeah, one more question, and and then I appreciate it.

Yes, one more question and then I appreciate it.

Speaker 1: Perfect it's ADM samuulelson with Goldman SOx. Who's go ahead?

Perfect Adam Samuelson with Goldman Sachs. Please go ahead.

Speaker 32: Thank you and appreciate you all squezing me, squezing me in. There's a lot of ground. Maybe just going back to EME appreciate the kind of noise. On a year-on-year basis with Russia and prior year results, you have disclosed what the non Russia EBIT was in the in the prior year. So how do we think about that business? On an organic profit, they aren like for likeprofit basis.

Thank you and I appreciate you squeezing me squeezing me in.

There's a lot of ground covered maybe just going back to EMEA I appreciate the.

Kind of noise on a year on year basis, with Russia and prior year results you have disclosed what the non Russia EBIT wise in the prior year. So how do we think about that business on an organic profit on a like for like profit basis.

Speaker 6: Progressing over the balance of the year and as we think about the new capacity in Czech Republic, in the U K lering in in the second half, kind of the implus, the underlying volume growth that carries over into into 24 with it without broader market kind of expansion.

Progressing over the balance of the year and as we think about the new capacity in Czech Republic, and the U K.

Layering in in the second half kind of the implicit the underlying volume growth that carries over into <unk> into 'twenty four.

Broader market kind of expansion.

Hi.

Speaker 44: The game plan really for Europe this year.

The game plan really for Europe this year.

Speaker 44: Is to be able, on a euro basis, to replace those Russian earnings that we had for nine months last year.

Be able on a euro basis to replace those Russian earnings that we have for nine months last year.

Speaker 44: So that if we can do that, that's a health of accomplishment.

If we can do that that's a hell of an accomplishment because Russia was a very nice profitable business and so if they can do that.

Speaker 44: Because Russia was a very nice, profitable business.

Speaker 44: And so if they can do that.

Speaker 20: I think that's victory. They've done a great job of managing their cost structure, managing their contracts, managing the supply chain, and so we're real happy with the performance.

That's that's victory.

They've done a great job of managing their cost structure managing their contracts managing the supply chain.

So we're real happy with the performance of the EMEA business.

Speaker 44: Of the EA business.

Speaker 18: Yes I think, in the simplest terms, the plan that we've set out this year.

Yes, I think in its simplest terms the plan that we've set out this year.

Speaker 3: Inclusive abrussia would be. We're going to make.

Inclusive of Russia would be we're going to make significantly.

Speaker 18: Significantly more money on less volume and we're going to generate more cash, and a lot of that's coming from Europe's ability to offset.

Significantly more money on less volume and we're going to generate more cash and a lot of that is coming from europes ability to offset that.

Speaker 3: The 80 plus million dollars about comparable operating earnings in Europe . So they've got they've got a significant plan for improvement and they're off to a good start executing against that, and they've been the business that has done.

80, plus million dollars of comparable operating earnings in Europe , So they've got.

Okay.

Significant plan for improvement and they're off to a good start executing against that and they've been the business that has done.

Speaker 3: They've done extraordinarily well there since we acquired that business from rexim they've continued to deliver against plan and.

They've done extraordinarily well here since we acquired that business from Rexam, they've continued to deliver against plan and.

Speaker 3: The only time I think we did was when we had a, a global pandemic.

The only time I think we did was when we had a global pandemic.

Speaker 3: So we're feeling pretty confident in that team's ability to deliver.

So.

We're feeling pretty confident in that team's ability to deliver.

Speaker 6: Got and and the carryover on volume into into 24 from the from the facilities.

Got it and the carryover on volume into into 'twenty four from there from their facilities.

Speaker 18: It would be in the range on those two facilities, in the range of two billion units. Okay that's, it's really help a color I I appreciateit. Thank you, Thank you.

It would be in the range on those two facilities in the range of 2 billion units.

Okay.

That's all really helpful color I appreciate it. Thank you. Thank you.

Speaker 18: And I think with that, we'll look forward to talking to you here in another quarter. Thanks for everybody's attention and participation today on the call.

And I think with that we look forward to talking to you here in another quarter. Thanks for everybody's attention and participation today on the call.

Speaker 31: Thank you. This does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines. Thank you, have a good day.

Thank you. This does conclude the conference for today, we thank you for your participation and ask that you. Please disconnect. Your lines. Thank you have a good day.

Yes.

Okay.

Speaker 40: Thank you, Tina.

Thank you Tina.

Yeah.

Yes.

Okay.

Yes.

Yes.

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Thanks.

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Yes.

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Speaker 48: I.

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