Ball Corporation’s global beverage can shipments increased +2.8% in the second quarter of 2024, the Denver-headquartered company shared in its Q2 2024 results.
The world’s largest can manufacturer reported results on the same day as Anheuser-Busch InBev, with both companies now cycling last year’s conservative-led boycott of the Bud Light brand that trickled down from the beer manufacturer to the can producer.
During a call with analysts and investors, Ball CEO and chair Daniel Fisher said Q2 volumes in North America and EMEA “exceeded our internal expectations.”
Ball EVP and CFO Howard Yu added that Q2 operating earnings in North America “exceeded our expectations and offset year-over-year headwinds associated with the U.S. beer brand disruption,” referring to the conservative-led boycott of Anheuser-Busch InBev’s Bud Light brand. Cost management measures and “plan efficiencies” across Ball’s network will help support “incremental volume growth,” he added.
Beer was a frequent topic during the earnings call. Fisher again reiterated his call for price cuts for domestic light beers, calling on the company’s customers to address those issues “via different pricing mechanisms to drive volume.”
Premium light beer will “have to do something on pricing,” and “different behavioral patterns will have to kick in at some point,” Fisher said.
“The premium light beer segment, that’s the one that folks are trading down from,” he said. “But we’ve seen this now for 18 months. We’ve been living this and candidly, that’s why we’ve been adjusting our cost structure and doing different things with the operating mode.”
Fisher emphasized price cuts as a vehicle to generate more volume, even as the company benefited from some inflationary relief in Q2.
“The end consumer was strengthening in pockets, and coupled with a little bit more aggressive pricing by some of the customers – I would consider that we’re in a more of a partnership relationship than just a customer-supplier relationship – and so we’ve benefited a bit from mix,” he said.
A couple of times throughout the call Fisher referenced how A-B’s Michelob Ultra and Busch Light brands are performing well at different ends of the consumer spectrum; high end versus value. He added that those brands are filling some of the volume hole left by Bud Light, and “anything Bud Light comes back and recovers is great, but they have two real winners in that portfolio that they’re leaning heavily into.”
“That’s more probably the route that wins,” he said.
Ball Posts $158M in Net Earnings in Q2, $3.84 Billion in Revenue Through H1 2024
Ball generated $2.96 billion in Q2 sales, recording $158 million in net earnings, including a net after-tax loss of $74 million.
In 2023, the company’s sales reached $3.07 billion, generating $173 million in net earnings, including a net after-tax loss of $21 million. The company noted that year-over-year (YoY) net earnings and comparable net earnings do not include its former aerospace business through the sale date of February 16, 2024.
Through the first half of 2024, Ball has generated $5.83 billion in sales, recording $3.84 billion in revenue, which includes a net after-tax gain of $3.39 billion for the sale of the aerospace business, consolidation and other non-comparable items.
Through the same six-month period in 2023, the company’s sales topped $6.05 billion, posting $350 million in revenue.
Ball’s business unit in North and Central America posted $1.47 billion in Q2 sales, with operating earnings of $210 million. Q2 sales reflected “the contractual pass through of lower aluminum costs partially offset by higher volumes,” the company reported.
In the same period in 2023, the company achieved $1.54 billion in sales and operating earnings of $175 million.
Ball expects full-year global shipment growth of low- to mid-single digits, Fisher said. He also anticipates that “every one of our regions will make more money year-over-year in the third quarter.”
Looking ahead, Fisher said a potential interest rate cut in September and “more clarity” on the November election will likely “translate into a bit more optimism.”
“I don’t see a lot more downside on the end consumer, and we’ve been living it for about 18 months,” he said. “We’ve seen the trade downs and then we’ve seen the less frequent purchases.”
“We’re in a good spot, believe it or not, versus how we’ve been operating the last 18 months as an industry,” he continued. “So I’m a bit more encouraged than pessimistic.”