Ball Stock

Greetings, and welcome to the Ball Corporation Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations.

Good morning, everyone. This is Ball Corporation's conference call regarding the company's second quarter 2026 results.

During this call, we will reference our second quarter 2026 earnings presentation available through this webcast and on our website at investors.ball.com.

The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, other SEC filings and in today's earnings release and earnings presentation. If you do not already have our earnings release, it is available on our website at ball.com.

Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, this presentation and the release include a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. I would now like to turn the call over to our CEO, Ron Lewis.

Thank you, Brandon. Today, I'm joined by Dan Rabbitt, Senior Vice President and Chief Financial Officer. I will provide some brief introductory remarks and discuss second quarter and first half 2026 financial performance and our outlook for the remainder of 2026. Dan will touch on key metrics, and then we will finish up with closing comments and a question-and-answer session.

As we begin, I want to reinforce the same big picture message we have discussed in prior quarters because it remains central to how we think about Ball's long-term value creation. The fundamentals supporting our business remain firmly in place. Packaged liquid volume continues to grow globally and aluminum cans continued to gain share as consumers, customers and retailers prioritize convenience, performance and sustainability. These trends continue to support a durable runway of demand for our products.

Within that growing market, Ball remains well positioned. Across our regions, we continue to benefit from long-term customer partnerships, a well contracted portfolio disciplined capacity management and an unmatched global footprint. Together, those advantages support strong utilization and consistent commercial performance.

We are pairing those operating advantages with financial discipline. Through the first half of 2026, our results have reinforced our confidence in the framework we laid out for the year, supported by a healthy balance sheet and a capital allocation approach grounded in EVA. We remain focused on investing where we can earn attractive returns and returning capital to shareholders.

Operationally, our teams continue to make progress. standardization, cost discipline and the Ball Business System are helping us reduce complexity, improve productivity and create a more repeatable operating model as volumes grow. When you bring together attractive industry fundamentals, strong customer relationships, disciplined execution, financial strength and an operating system built for continuous improvement, Ball remains well positioned to deliver on our 2026 objectives and create long-term value for shareholders.

Our first half results reinforce the resilience of our business and the consistency of our execution even as the external environment remains complex. The strategy we have discussed in prior quarters remains clear, consistent and grounded in four strategic pillars, and our first half performance provides further evidence that it is working.

First, we remain focused on executing in our core business. That discipline shows up through service, cost management and ongoing efforts to improve operational consistency across our plants and regions.

Second, we stay close to our customers and maximize the strength of our global network, long-term customer partnerships, strong service levels and a balanced footprint give us the flexibility to respond quickly and reliably.

Third, we continue to accelerate the substrate shift to aluminum and expand into targeted categories. Aluminum's sustainability and performance advantages remain compelling and we are focused on translating these advantages into disciplined growth.

Fourth, we manage complexity to our advantage. Our scale standardization and systems help us stay focused on the levers we control and build more repeatable performance over time.

The Ball Business System connects these priorities across the organization helping us standardize best practices, improve productivity and drive continuous improvement. At the center of that system are our people and culture, low ego, high collaboration and a shared commitment to doing the right things the right way. That consistency is what supports our first half performance and gives us confidence in our ability to deliver on our 2026 objectives while continuing to create value long term.

That is where the Ball Business System and EVA come together. One, helping us to operate with greater consistency, the other, guiding how we allocate capital to create long-term value.

In the second quarter and first half, that discipline showed up in our financial performance while we continue to focus on delivering operational results in line with our Ball Business System goals.

It is also why our 2026 framework remains unchanged. And 10-plus percent comparable diluted EPS growth, strong free cash flow and consistent returns to shareholders. With that context, let me address how those priorities translated into our second quarter and first half results.

Turning to our second quarter performance. We continue to build on the solid start we discussed last quarter. Global volumes improved 4.3% year-over-year with growth in each region, reflecting continued momentum across our portfolio and keeping us on track with the full year volume outlook we outlined earlier this year. Comparable operating earnings grew 7.7% year-over-year, supported by disciplined cost management commercial performance and continued progress through the Ball Business System, even as we absorbed the previously discussed North American start-up costs.

That performance flowed through to the bottom line, with comparable diluted EPS growth of 14.4%, reflecting operating earnings performance and capital allocation. Our first half performance reinforces our confidence in delivering 10-plus percent comparable diluted EPS growth for the full year. We also remain focused on shareholder returns and remain on track to return approximately $800 million to shareholders in 2026.

Operationally, we continue to advance our priorities, including integrating Benepack to expand our EMEA capacity and continuing to make progress at our Millersburg facility, which remains on track toward full ramp-up in 2027. Overall, this was a solid second quarter and first half that reinforced the resilience of our business and our confidence in the 2026 framework.

With that context, I'll let Dan walk through the details of our second quarter financial performance and provide more color on our expectations for the balance of 2026. Over to you, Dan.

Thank you, Ron. I'll walkthrough our second quarter 2026 financial performance and provide additional context on the first half and our expectations for the balance of the year.

Overall, the business continued to perform well in the second quarter. Global ship beverage can volumes increased 4.3% year-over-year, supported by growth across each region and continued progress against our full year expectations. Across both the quarter and the first half, our teams remain focused on service, cost discipline and improving the controllable performance drivers that support our 2026 framework.

As Ron noted, comparable operating earnings increased 7.7% year-over-year and comparable diluted EPS increased 14.4%, aided by disciplined performance and capital allocation tailwinds. Our first half performance remains consistent with the financial framework we laid out in 2026.

In North and Central America, volumes increased low single digits year-over-year, consistent with our expectations for full year growth at the low end of our long-term 1% to 3% range. Demand remained constructive in energy drinks and nonalcoholic beverages.

Segment comparable operating earnings declined 2.4% year-over-year as higher costs, including approximately million of start-up costs were partially offset by favorable price mix, including the timing of metal pass-through to our large customers who procure their own aluminum.

We continue to expect full year start-up costs to total approximately $35 million, with roughly $30 million expected in the second half.

In EMEA, volumes increased mid-single digits year-over-year, supported by underlying demand and the contribution from Benepack, partially offset by last year's sale of our Saudi Arabian business. Segment comparable operating earnings increased 6.6% year-over-year, reflecting higher volume and favorable price mix, partially offset by higher costs.

We continue to make progress integrating the Hungary and Belgium facilities for 2026 with the inclusion of Benepack, we continue to expect volume growth above the top end of our long-term 3% to 5% range.

In South America, volumes increased mid-teens year-over-year as the region moved past first quarter customer timing and inventory impacts. Segment comparable operating earnings increased 64% year-over-year, driven by higher volumes and favorable price/mix. Looking ahead, we continue to expect volume growth at the low end of our long-term 4% to 6% range in 2026.

Now focusing on modeling details for 2026. As Ron noted, with the resilience of our business and our pass-through models, we continue to expect to be on track with our long-term 10%-plus comparable diluted EPS growth goal. We anticipate free cash flow of greater than $900 million in 2026. Our 2026 full year effective tax rate on comparable earnings is expected to be slightly above 23%, Full year 2026 interest expense is expected to be in the range of $310 million. CapEx is expected to be in line with GAAP D&A in 2026. Full year 2026 reported adjusted corporate undistributed costs recorded in other nonreportable are expected to be in the range of $175 million.

We anticipate year-end 2026 net debt to comparable EBITDA to be around 2.7x, and we will repurchase at least $600 million of shares, which will bring our total capital return to shareholders to $800 million in 2026. And last week, Ball's Board declared its quarterly cash dividend.

And with that, I'll turn it back to Ron.

Thanks, Dan. In summary, the key message is that we are delivering against the framework we laid out for 2026. Through the first half, we grew global volumes, expanded comparable diluted EPS and generated strong earnings performance and remained on track with our free cash flow and capital return priorities. That progress reflects the consistency of our strategy and the discipline of our teams. We continue to stay close to our customers, manage the levers we control, invest through an EVA lens and use the Ball Business System to improve how we operate across the company.

Importantly, our first half results reinforce our confidence in the full year framework. We remain focused on delivering 10-plus percent comparable diluted EPS growth generating strong free cash flow and returning approximately $800 million to shareholders in 2026.

We know there is still work ahead and our teams remain focused on the operating and commercial priorities that matter most in the second half. But the first half demonstrates that the strategy is consistent, the framework is intact and Ball remains well positioned to create long-term value for shareholders. Thank you.

And with that, Christine, we are ready for questions.

[Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird.

Ron, I know comparisons are a bit tougher in the beverage North America and Central America segment given your performance from last year. But sort of looking back, how did the flagship events over the summer, including America 250 and the World Cup impact your volumes? Was that material in any way? Or will you supply constraint just given your footprint position at this point?

We said coming into the year in North America that we were running notably tight and that certainly is the case. And so we didn't see any really meaningful growth in North America due to America 250 or World Cup. But what it did do coming into this quarter and, quite frankly, Q3 that we've just started, it gave us a lot of confidence in the growth that we were going to see and that flowed through.

I mean we served our customers with distinction and the best of our ability, but the fact of the matter is we are trying to bring this new plant up in Millersburg, and until we do that, we will be notably tight until we can get that capacity up and running. .

Okay. Great. And then in Europe, adjusting for Benepack and some of the portfolio moves there and segment realignment, et cetera, what were underlying volumes during the second quarter? And was that consistent with your expectations going in for 2Q.

Thanks, Ghansham. Let me answer the high level and then I'll let Dan do some of the details. But in general, our long-term growth outlook is 3% to 5% growth, what we've said is with the acquisition of Benepack for the full year, we should be exceeding that on an annualized basis. And for sure, our organic business was right in line with what our long-term growth outlook is. But there is some puts and takes in there with the change in the sector. So let me let Dan kind of detail that out for, if you don't mind.

Yes, I think really, we grew our volumes second quarter a little less than 500 million units cans compared to last year. The way to think about where it came from was our legacy businesses now in that segment are really the traditional Europe footprint that we've had for a while now and some Asian assets. And when you look at it, we really -- those delivered mid-single-digit growth in the -- for that segment.

And the puts and takes that kind of neutralize each other was the integration of the Benepack business, and that came with some cans, but it also was offset by the loss of the Saudi Arabian business as well. So good performance. It was really all done on our -- on the assets that we brought into the year, and we're overall pleased with where they stand.

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

The detail and the full year outlook are extremely helpful. I'm just wondering if there's any finer point you could put on kind of the cadence from 3Q to 4Q versus maybe kind of a normal seasonal cadence. I mean you talked about the start-up costs, and I think you talked about them in second half. I'm just wondering if we could expect those to be more weighted towards 3Q or 4Q? Or if there are changes in energy costs in EMEA? Or just any kind of thoughts on what the 3Q, 4Q cadence might look like versus a normal year?

Anthony, thanks for the question. So what we have said is we expect roughly $35 million worth of startup costs in the year. We've detailed about $5 million of those in the first half of the year, really in the second quarter. And for Q3, Q4, to be frank, like it's a little challenging for us to give you a specific number. We still expect to see the $30 million of the $35 million flow into the back half of the year.

What I will say is really great news for us is our plant in Millersburg is now making commercial cans as of last month, and we're looking forward to ramping that up, and you should expect to see the full benefit of that in 2027. We're just in the process of getting it ramped up. So I wouldn't want to provide any more detail than just the back half. I hope that's okay.

No, no, that's fair. And then maybe just a related question. I don't know if you can give maybe some additional thoughts or color on the South American market and your individual markets there given thoughts on the second half, given the 2Q outperformance. Some of your peers have maybe expressed some conservatism towards the end of the year. I'm just wondering if you can give any more thoughts given the really strong quarter that you had there.

We're quite frankly, really pleased with our performance in South America. We noted last quarter that we were going to see a good second quarter when we knew that, that was coming through. And I mentioned how we were doing relative to our Q1 performance when we talked about April.

So firstly, South America can be volatile. We know that quarter to quarter. And it's driven by customer activity that we have the privilege to serve, what time of year it is, et cetera, et cetera. So I think I would start by just saying, let's not get too fixated on any one given quarter. Last quarter, we were down a little bit. This quarter, we were up a lot.

For the full year, we are focused on delivering against our long-term growth outlook of 4% to 6%. And we came into the year saying we'd be on the low end of that range. we have even more confidence that we'll be at least at the low end of that range and maybe even into the middle of that range on a full year basis. So Q1 and Q2 kind of offset and we more than make up we're right in that -- we're right where we're supposed to be for the full year as we sit here today through the first half of the year.

Other than that, we're just focused on serving our customers. The can market in general, I would say, can market in general in South America is very healthy. What is unique to us, and you mentioned it, is that we are the can maker in South America that makes cans in more countries than anybody else. So we have a privileged place in the region.

What happened in the quarter, we drove strong mid-teen volume growth combined with a really good network, really good operational performance, really good commercial performance, and that delivered meaningful flow through.

I don't want to comment anything specifically about individual countries other than to say outside of Brazil, which is the predominance of our business, all of the countries that are also in South America for us generally are accretive to our business, and this quarter was no exception.

So I would summarize the quarter by saying, we have a privileged customer portfolio, and they enjoyed success from World Cup, and we benefited from their success.

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

I wanted to spend my first question on operations. And then second question, dig into the volume outlook.

Ron, if we look at the results, and they were certainly at least in line with your guidance, in North and Central America, though, even if we add back the start-up costs, I think EBIT would have been comparable, EBIT would have been about flat despite volume growth. And so recognizing there is inflation with Millersburg, I'm sure there are other factors that maybe hit the network. Can you talk while you didn't see your normal or your at least targeted operating leverage.

And then within Europe as well, we had mid-single-digit volume growth. I don't think we saw if I did my calculations right, the normal lift in EBIT relative to volume, was that Dan just a function of the different moving pieces, 1 year versus the other in terms of the businesses there? How should we think about that?

I'll start, and then I'll ask Dan to add a little color, if you don't mind.

Starting in North America, we are notably tight as we've said, coming into the year. And we did have volume growth in the quarter and the first half of the year in North America. So with those high utilization rates and quite frankly, some good volume growth that we knew was coming through. It equates to some operational friction, no doubt. And that puts pressure on everything, on the way we plan on scheduling, on labor, on freight, maintenance, et cetera, et cetera, and a little shout out to our teams that work in our plants, it's extremely hot. Like as I walk our plants, it's a it's an environment that is challenging to work in. So thanks to them.

And that's why, quite frankly, we're investing for growth. We bought a plant in Florida, as you know. It's fully operational for us and fully integrated into our network, and now we're bringing up this new plant in Millersburg, Oregon and that will relieve some pressure and obviously support our customers and help us to deliver operating leverage in the long term.

From a European perspective, I would just say the acquisition that we made of the two plants, one in Belgium and one in Hungary. We knew that we are also quite tight in Europe, and these were to acquisitions that helped from that capacity standpoint. But we also knew that we needed to get them ramped up and into our network. That will take us more or less the full year of 2026, and so we're similarly tight there, and it's similarly hot, and we are managing through that process.

But from an overall puts and takes, maybe Dan, you could take the back half of that question.

Yes, as we think about the quarter, I think we have to say that the demand, the volume demand was really strong, strong in all of our markets. And our two biggest markets both U.S. -- the North America and the EMEA segment really came in with limited capacity, so we were pretty tight coming in. Volumes and orders came in really strong. So it obviously put a little stress and strain on our network.

So -- but really, when you look at it, we never really wanted or had intended to be evaluated on every segment, every quarter on operating leverage. It's just not the way the business works. And you pointed out, obviously, that we came up a little short in North America. And that really does come from the fact that we are -- we saw some start-up costs and also with the strong demand, it really just challenged us to deliver at times.

And these are good problems to have because they're based on orders and strong demand. But I think that's the main takeaway. I think the operating leverage in the rest of the company was pretty good. And actually for the enterprise at large, it was fabulous. 8% operating earnings growth, we don't do much better than that ever. And so that's a great mark.

Yes. I appreciate that, Dan. I just wanted to peer under the hood, so to speak.

Point of clarification. Was there any operational friction costs related to Benepack in 2Q that in some ways we should adjust for?

And then the second question, Ron, you talked about strength, obviously, in energy and nonalcoholic beverages. So what are you seeing and implying in terms of the outlook for alcohol, for beer? Has there been any change in momentum in some of the ready-to-drink in other categories?

First, on your question on Benepack operational friction. These are plants. One is a brand-new start-up plant, so we need to think of the plant in Hungary is just a start-up plant and the plant in Belgium, we are working diligently to get to 24/7 operations just like the plant in Hungary.

So I would say, in general, we're right on track with what we expected from those plants, but they are not accretive to our overall business yet, and that's what we said we were getting when we bought those plants. And we're excited about them. We're really pleased.

From a category perspective, I think you're maybe talking specifically about North America. Yes, so I'll start by saying this. the can is winning. It continues to win. It's been winning for years. We have shown volume growth across our business, all of last year, in fact, accelerating last year. So we've now completed our sixth quarter of growth. We expect that to continue for the foreseeable future.

And we had a really strong quarter, 4% plus volume growth on the back of a comparable 4% plus volume growth in Q2 of last year and a plus 4% volume growth in all of 2025. That's above what we expect from our long-term outlook.

As far as categories, as I said, the can is winning, and we're focused on supporting all of our customers. I would say the other thing about the dynamics of the beverage industry is the can is used to deliver value to consumers, be it in a single format or really in the multipack format. And we have a great customer portfolio. So we're seeing growth even in a really tight capacity environment for us.

As it relates to individual categories, I couldn't say more than what you see in all of the data that you all analyze and quite frankly, share with us. So beer along with soft drinks and energy is delivering growth ultimately for our business, and for the can industry overall.

Our next question comes from the line of Gabe Hajde with Wells Fargo.

I wanted to maybe ask -- a piggyback, I guess, on George's question a little bit differently. I think there kind of had been some commentary about alcohol as part of the portfolio being about 40% and maybe over time getting closer to 30%. I'm just curious if under kind in your purview and as you look at things, is that still sort of part of the initiatives across the organization. And again, I appreciate that you're servicing customers and making sure that they have everything they need. Is it maybe just natural attenuation if you're kind of projecting beer to be down low single digits in volume metric terms and then they can continue to win. Just help us think about that maybe over the medium term?

As I said, the can is winning. And as far as the category goes, beer is an important category for us, and it's an important category for the can industry but it's certainly not our only category nor is it our biggest category. And as you can see from our overall volumes relative to other substrates, the can does continue to win, and that's because of other categories continuing to pick up the pace.

So I would just say, number one, consumers want convenience. That means they're going to drink more from packaged beverages. And when they drink more from a packaged beverage, more often than not, they're continuing and will continue to accelerate the pace of buying a can versus another substrate. And we have the privilege and right to win in that environment. So I think regardless of what is being sold in that can, the can will continue to grow. And we're going to help all of our customers to win in that regard.

Appreciate that. Also I think last call, you mentioned being kind of 90% sold out in North America -- or I should say, contracted, excuse me, in North America and then 50%, I think, through the end of the decade. Are there any updates there? And then specific maybe to Europe, I think you mentioned picking up some business over there, just anything material that we should be mindful of maybe going into '27?

So first of all, on our outlook for contracted volumes, we don't intend to provide a quarterly guidance on these calls as to what our outlook is on a -- we provided that anecdotally, I would say there's been no material change. To that, we are more than 50% sold out through the end of the decade. We said that before, and that's still true.

And the reason we shared that before is just to give you confidence that demand is out there from our customers, but it's more of an anecdotal comment. We don't plan to update that on a quarterly basis.

As it relates to Europe, Europe is the land of opportunity. Can penetration rates are lower than anywhere else in the regions we serve. Sustainability tailwinds are stronger in Europe, they are in any other region we serve, and there is more investment in can filling capacity anywhere else in the regions we serve. So Europe is an absolute land of opportunity. And you can see it in our as well as our primary competitors volume growth this quarter and over the last several years.

Now as it relates to customers and contracts, et cetera, I would just say overall volume growth, nothing specific to any given customer or business we won that I would call out.

Again, we will -- given the acquisition we made, finish above the high end of our 3% to 5% growth outlook for the year, in Europe in our EMEA business. So we're really pleased with it, and we're going to continue to serve our customers with distinction there because they are really growing with the can.

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

A quick question on the volume by segment. Like how do you think your regional volumes did compare with the market, essentially like did they lag I would pace to respective markets?

So let me just review where we said we would be for the full year, and then I'll tell you what I feel from the quarter perspective.

For the full year, we said we will be in this 2% to 3% long-term outlook. We may be towards the high end of that range. And we said North America would be on the low end of our 1% to 3% range, we said EMEA would be above our 3% to 5% range and South America would be on the low end of our 4% to 6% range.

In the quarter, I would say we grew low single digits, right in line with what we expected in North America, some were higher, some were lower. In EMEA, we grew right in line with the mid-single digits as we called out. I think we were right in line with market probably in both of those geographies. And clearly, the standout with South America, where we grew mid-teens and the market was more flattish to up slightly. So that's probably the puts and takes by region on our volumes in the quarter.

No. That's fair. And also, can you talk about capital allocation? And should we expect about $200 million of share repurchase in each of the remaining quarters? Or will there be more nuance to that?

This is Dan. I'm going to take that question. From a capital allocation perspective, specific to share repurchases, we're still standing by the guidance that we've been holding out all year. And that is that we would repurchase around $600 million worth of shares and deliver close to another $200 million in dividend for a total of $800 million of return back to the shareholders. So that still holds true.

Through the first half of the year, we've done about $100 million of those share repurchases. And that was also what was contemplated as well, because of the back half nature of our free cash flow, and it comes in the back half of the year, and we really didn't want to take on the risk on the balance sheet by leveraging up to make those share repurchases.

Our next question comes from the line of Hillary Cacanando with Deutsche Bank.

I know can is winning, and it seems like there's still substrate shift going on in Europe. But in North America, would you say the volume growth is still coming from substrates? Or is it more from new product launches? And if so, are there any new products or category coming out over the next year that you're really excited about?

What I can say is looking at the data that we get and that I'm sure you all pour over, the overall beverage market in North America is relatively flat while the can grows over the last year in that 2% to 3% range, while other substrates declined similarly 2% to 3%, something like this.

So overall, the can just continues to take share in the normal course of business. As far as our -- what we see from the market our customers, certainly, when it comes to launching new products and categories, more often than not, it is in a can. And the great news is when our customers choose the can, they lean into it with the ability to deliver value to consumers through different sizes, different multipack capacities, and that allows them to meet the kind of the customers, their customers and their consumers where they are. So that innovation with respect to sizes in pack size configuration really helps the can to win and our customers to win with the can.

Got it. Great. And then just a quick, I guess, a modeling question. I know Millersburg start-up cost is $35 million in 2026. Are you expecting anything in 2027? Or we're pretty much done in terms of spending in 2026?

Yes. This is Dan. I'll take that. So really, the first part of your statement is really what we expect on the startup cost. The $5 million that came in, in this quarter and then really upwards of $30 million more in the second half of this year. And so it's very much on plan, and the plan was really for it to be a contributor next year. And so we're making cans there, and we not on a continuous basis, of course, but that's really what the ramp up is all about getting it up to speed, so it can be productive for next year.

So no start-up costs building into 2027?

That's correct.

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

My first question is in terms of -- just trying to get an early read on how volumes are shaping up for realizing that you're more than 90% sold. Obviously, you opened surg last month, and you expect a full ramp in '27. When should that occur, like '27, mid '27? And some question for Benepack, when do you expect those assets full next year?

Mike, thanks for the question, and thanks for the congratulatory comments. It gives me a chance to accept them on behalf of our 16,000 Ball employees who are working very hard to support our customers and deliver really great value for our shareholders and all of their colleagues. So on behalf of those 16,000 colleagues in mind, thank you, and I accept your congratulatory comments.

As for 2027, we aren't concerning ourselves too much with guidance on 2027 on this call. What I will say, and I reiterate is we grew 4-plus percent in Q2 on the back of 4-plus percent growth last year for the full year and 4% in the second quarter last year. So this is our sixth consecutive quarter of growth, and that's just a clear evidence and sign that the can is winning and will continue to win on a go-forward basis.

For the long term, we are confident in our 2% to 3% volume growth outlook. So that's what you should continue to model for us. And quite frankly, this year, we will again probably finish above that, certainly above the 2% to 3%, so slightly above that. And next year, we expect to be in that range.

As it relates to Millersburg, again, I said we started making commercial cans there last month. We expect to deliver pretty much the full value of that plant, let's say, certainly beginning sometime in the first quarter, I would say. We may not have it ramped completely on January 1, but we should expect to have pretty much the full value of that plant in 2027.

As it relates to Benepack, similarly, this year is about integrating those assets they should be fully ramped and operational, running as a part of our network and being accretive, just as they normally would do any other plant start-up. So we got some big opportunities to deliver good value to ourselves and to our customers in 2027 as a result of those investments.

Very clear. And just one quick follow-up on the volumes. Where do volumes stay currently for July thus far by region? And any early read or your order books look like for August thus far, realizing earlier in the month?

So I would say we're right on track in July results from our quarter and full year. It's still very much summer in the Northern Hemisphere and extremely warm and a lot of activity. So really we have great confidence in our Q3 plan based on our July and month-to-date August numbers. Nothing special to call out there other than we're right on our plan.

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

It's Anojja Shah, sitting in for Josh. I know it's a pretty small -- it's a smaller category, but I wanted to talk about the other category, and it seems like your aerosol business did pretty well in 2Q. Can you just talk about what went right? And is this kind of a new run rate for you in aerosol? And then separately, one of your aerosol competitors just announced an expansion in Pennsylvania. Can you talk about the competitive environment you're seeing there right now?

We're really pleased to get to talk about our -- what we call our personal home care business. I would just say consistently, and this quarter is no exception, our personal and home care business is accretive to our overall volume growth and our operating earnings growth. And while it's relatively small, we really like our [ PHC ] business, and we gives me the chance to thank all the people, all of my colleagues that work in our personal and home care business.

So we like it. We like it going forward. And we think that investment in this business by us or competitors is good because there's continued demand just really positive, and we see a good outlook for it.

Yes, this is Dan. I would overlay just a couple of things. One is, obviously, this business at times grows even higher rates than our beverage can business does. So in this quarter, it really was no exception to that. So high single digits for the quarter.

But I would say a lot of it has to do with the industry dynamics. And for North America, it really consists of two markets. It consists of the U.S. and Mexico. We happen to be located in Mexico. And so when a competitor really comes up in Pennsylvania or in the U.S., it's almost like it's not necessarily relevant in some regards because our competition really are those who are down in Mexico.

Okay. Great. And then there was a pretty big change to Section 232 in July that I think includes some incentives for domestic production of aluminum. Do you expect any near- to medium-term impact? I know you have an immediate pass-through on aluminum, but maybe this could mean some relief for end consumers that could have a potentially positive impact on your volumes here in North America?

The short answer is no. We aren't seeing any impacts. And also no, we don't foresee any big change relative to tariff and trade policies in the U.S. or globally for that matter. We just can't forecast or predict them.

And we understand that what was offered, but in terms of the Section 232 changes, but they're just not material enough to really move the needle. It does give me a chance to say that we and the industry are concerned and keep an eye on aluminum price, because the cost of aluminum, while it is a pass-through model does ultimately affect in consumer demand and our customers.

So the can continues to win and grow even in that elevated cost environment for aluminum, but we would very much like to see aluminum prices lower. And I think the investments that are happening in the industry, be it smelting or rolling, we encourage and we're excited about those investments as they come online, be it in the U.S. or anywhere else in the world.

Our next question comes from the line of Matt Roberts with Raymond James.

Really quick, Ron, on your volumes? Are you saying above 2% to 3% or the high end? Just a clarification on the comments.

Yes, Matt. So I said on the -- for this year, the 2% to 3%, we should be at or above. It's hard for us to call it. But I would say right now, as we sit at the half year, we're right in the middle of that range. So we expect to see some acceleration of volume growth in the back half of this year. And we'll be I would just say, call it 3% is probably good enough for right now. That's probably the best I could do it in prognosticating how we'll finish the year.

And then really just one other from me. Thinking about incremental capacity in Millersburg in '27, recognizing, certainly, network the lead valves capacity creates from operational and cost perspective. But is there any change in product mix from that facility? Any difference in standard and specialty shipped in '27? Or is Millersburg in line with the system average like would be the operating leverage impact? Is it really all from cost or any mix?

So again, we're really happy with our investment in the Pacific Northwest. It's a long way to ship cans there. So we're excited to have capacity back in that region. We started producing last month. It was an important milestone for us.

It's also important to know this is a one-line plant. It will be fully ramped up in 2027, but it is still only a one-line plant. And it's only making standard-sized cans. So you won't see a mix shift impact from that plant. So it will be more or less in line.

I will say there is a continued move from standard cans to more what we call sleek cans, et cetera. So there -- you will continue to see mix shift, but it won't be as a result of this plant coming back up -- coming online in 2027 at a full ramp-up.

Our next question is a follow-up from Gabe Hajde with Wells Fargo.

Ron, I guess, as you think about North America or [ NECA ] being a 1% to 3% growing geography for you all. I know you're adding Millersburg and that's going to give you some relief in the Pacific Northwest. But I think I've heard you say at least three times like things are pretty tight and it's not optimal for the system, generally speaking.

Again, appreciating you know the seasonality, you guys build inventories in the spring, et cetera, et cetera. But I want to understand, as you look across the system, are there other areas for you to add a little bit, I'll call it creep capacity, whether it's decorators in the back end or additional lines or anything that you'd be adding in North America would require new four walls in brick-and-mortar?

Thanks, Gabe. I appreciate that additional question because it does give me a chance to talk a little bit about those opportunities. One, I would say, let's start with the industry itself. I would characterize the can-making industry in North America as healthily tight. There's been many quarters of volume growth. It is the reason why we're building and bringing this new plant up and online. And I think we will continue to be disciplined in our investments.

Backed by any investment we make will be back by long-term offtake agreements with our most strategic customers where we have built relationships and earned their trust over decades.

As it relates to where else can we debottleneck? Of course, we can always pursue debottlenecking. We have a number of projects that we've been working on this year in a number of our plants that we don't go into great detail on because it's the normal course of business. But yes, the answer is we expect to deliver efficiency and productivity in our network each and every year. So hopefully, that answers your question, Gabe.

All right. I think we have time for one more question.

Our final question comes from the line of Phil Ng with Jefferies.

This is John on for Phil. I just wanted to touch on a couple of points. First, we've had a couple of capacity announcements in India. I know you guys have some capacity there. Just wondering what you're seeing from competition market growth from that standpoint?

And then jumping over to South America. Could you quantify in any way the amount of World Cup volumes that came through in the quarter? I mean I know it's not necessarily easy, but just thinking for a modeling purpose how much of a drag that could be next year?

And then I'll follow up with one more question. Appreciate it.

So firstly, as it relates to India, we talk about Europe and EMEA as a land of opportunity and India is accretive to that comment. It is a land of opportunity in a land of opportunity. Can growth is more than teens in that region and has been for a while. We, as you said, have announced capacity expansion in one of our two plants on top of a capacity expansion we've already done. And as you see lots of announcements for capacity growth.

So it's an exciting part of the world backed by governmental changes that we believe will be strongly accretive to can growth in the long term. So we're excited about India and we're excited to have a business there that's been driving for many, many years.

As it relates to World Cup in South America, again, we had open capacity because it is the winter lower season there. We have an unrivaled customer portfolio and their success promoting World Cup was our success.

It's hard to put a number on what would be the impact of that. What I will say is we plan to grow at the low end, maybe the middle of our 4% to 6% growth in the year, and that's right where we expect to deliver in the long term. So rather than put a number on it, I will just say it should not be meaningful over a year-to-year basis. We still intend to grow 4% to 6% next year on top of a really strong 4% to 6% growth this year.

All right. That's helpful. And then one of your larger North American beer customers has made some investments in their metal can packaging operations, to expand some of their growing brands. I mean, they're relatively small, but I'm just wondering if this is more of a factor of how tight you guys are currently running in North America? Or maybe it's a little bit of a focus growing in some of the other faster-growing categories than necessarily mass beer? But any thoughts you can provide around that and maybe your mix in North America and how you're thinking about it going forward would be very helpful.

Honestly, I don't think we have enough information to comment on what our customers are doing relative to building or buying capacity. I would just say we're -- we support all of our customers, obviously, and we are tight as is the industry, and that's a good thing for this industry. So I don't really want to comment on other people's capacity and what they're doing, if you don't mind.

I think that was our last question. I just will finish by saying thanks to everybody for your interest in us for our investors on this line for your investment in us, for the -- for all of you analysts for continuing to help us tell our story. Your partnership in doing that. We appreciate that very much. And we look forward to talking with all of you a lot more about our business and sharing our story, because we are really excited about this.

First half of the year, we delivered exactly as we expected to do. It's a reflection of how the can continues to win and the long-term nature and the resilient nature of this business and this industry that we have the privilege to participate in and be a leading market participant and run. So thank you very much on behalf of all of my colleagues at all for your interest in us, and we look forward to talking with you all again very soon.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Welcome back, everyone. Good morning. Gabe Hajde here, Wells Fargo, Senior Paper and Packaging analyst. I'm joined by my colleagues in the room, Richard Carlson and Bailey Gordon. I'd like to welcome everyone today to Ball Corporation. Representing the company is CEO, Ron Lewis. He took over in November. So he's been on in the role about 7 months, but not new to Ball. He joined in 2019, actually, after spending 19 years at Coca-Cola. We talked about that last night at dinner. So very much a seasoned veteran in the space and the industry. Also attending is VP of Corporate Affairs and Communications, Courtney Reynolds, in the room. and Brandon Potthoff, IR.

So as many of you are familiar, but those who may not be, Ball is the global leader in beverage metal packaging, aluminum metal packaging globally, largest player in the key 3 geographies that they choose to participate in, North America, South America and Europe. This is intended to be kind of an interactive session to the extent you all have questions. I think there's a microphone that's available. But feel free if you'd like. So with that introduction, Ron, I think you had a couple of -- just a few prepared remarks, and then we can get into the Q&A.

Yes, sure. Thanks, Gabe. So it is exactly 7 months as of today that I've been in the role and 7 years that I've been at Ball. Thanks for the opportunity. We're excited to tell our story. We delivered 9 quarters of consecutive volume growth, and this will be our 10th quarter. We'll be in sort of this mid-single-digit range, and that will put us at the half year more or less on track with where we expect to be from a volume and operating earnings perspective, on path towards delivering our 10-plus percent EPS and $900 million worth of free cash flow or greater. That's what we committed to in January, and that's what we intend to deliver, and we're right on track to do that. And that's on -- that will be a record year on top of a record year we had in 2025. So we're excited to be here because I think we have a great story to tell, and I'm looking forward to you helping me to tell it.

Well, we'll do our best. So you come, again, a little bit of a unique perspective being on the other side of the table, being a Ball customer. So just maybe help folks understand investors how that helps inform your leadership in the organization. So there's obviously multiple ways to attack leadership, but one of which is unique customers, I think, that you have -- that you bring to the table with unique relationships with customers. So just how that informs your kind of leadership style and/or approach to the business?

Sure. Thanks, Gabe. I would say I joined this company and this industry because I actually do believe in the aluminum package. So what's -- what is it about the aluminum package and why the can? I would -- my 2 Rs, I have 3 Rs. The first R is the robustness of this package. The can has a 12-month shelf life. Other packages, plastic bottle similar size has a 12-week shelf life. That matters. It's robust in the supply chain. It doesn't break. It has flexibility from a single to a multipack up to a 30-pack. As someone who spent a bit of time merchandising cans and bottles on shelves in stores, I can tell you, I'd much rather be slinging 12 packs of soft drinks or 20 packs -- 24 packs of beer than putting individual bottles on the shelf. So it's robust.

There's a real resilience to this material as well. I'm going to use the term 75%, that's a percentage. 75% on average of all of the cans we make have recycled content in them, up to 75%. So 75% of every product we make is recycled. That's pretty significant. 75% of all the cans that are placed in the markets in which we operate on average are collected. Some are at 100%, some are lower. And 75% of all of the aluminum ever created in the history of time is still in circulation. It's infinitely recyclable, and it makes economic sense to recycle it. So that's a positive for the can.

Now you asked about customers. Customers want reliability. That's my third R. And scale customers want scaled reliability, reliability from an assurance of supply, reliability from a quality perspective and reliability from a service perspective. So I think what I'm trying to bring to this company is a very much of a customer-centric orientation and mindset. I think we've really focused on that in my first 7 months in this role, and that's where I spend my time is with our -- where we create value, and that's one of the places we create value.

One of the words that you used, I think, on both conference calls thus far is humility. And studying leadership, I think, over time, that has struck me as something that's unique, tough to truly get with authenticity. And I think the message comes through. Can you just talk about sort of employee engagement and with that sort of leading from the front lines with a humble mindset.

Yes. Thanks for that question. It's pretty foundational and near and dear to my heart. We want -- sort of the things that I try to embody and I want in our company and our leaders. firstly, is humility, and we want humble. We want hungry. We want steely grit and determination and resolve. And we want people that -- because we have to solve problems every day, and we want quiet confidence. That's what -- when we're at our best. That's the first point. We talk about low ego and high collaboration. This is one Ball. We win as a team.

The second thing I would say is we are a manufacturing company. We make something. I'm proud of that. We have 16,000 people, the overwhelming majority of whom come on shift every day. Those are our frontline heroes. I talked about where we create value. We create value in our plants for our customers. So that's where I spend my time. We have 65 plants around the world. I'll spend -- I'll get to visit at least 1/3 of them this year. That's not insignificant amount of time to spend in our plants, and I love it. It's where I come from, and I come from operations. And when you take care of your people, they take care of your customers.

So that's where I'm really focused, and it fits with everything I'm doing. And it's my background. I grew up working shoulder to shoulder with my dad on farm, and I like the value of a hard day's work. I like seeing the fruits of my labor, and that's why we love going to our plants. Nobody that works at our company should work there if they don't love making things and honoring those that get to come and on shift every day and make those products.

Sounds like a good place to work.

Perfect for me. It's perfect for me. Yes. It's a great place to work. We take care of our people and they take care of us.

Switching gears a little bit. Affordability has been -- this is an industrial conference, but I interact with our consumer analysts quite a bit. That's been hitting the consumer overall, generally speaking. So kind of a multipart question. But just first, when we look in the marketplace, how would you sort of characterize the current, I'll call it, wave of inflation relative to what we experienced just a couple of years ago with COVID to the extent whether it's breadth, magnitude. Obviously, I guess, just for posterity's sake, you guys take virtually no aluminum risk. It is a direct pass-through. But as it flows through to your customers and then maybe potentially retailers on the shelf. Just the current inflationary environment and how it could play out sort of near term and then medium term?

Okay. Let me try to -- come back to me if I don't answer all of them because I might miss some of it. I would say the difference between what we experienced a few years ago with, let's -- the pandemic, COVID, it was a worldwide supply chain disruption. I don't need to remind everybody about the toilet paper demand. So you couldn't get things. The current disruptions that we face, they are point disruptions. They are point disruption in the Strait, just like we had a point disruption in the Suez Canal. So when that happens, it isn't that you can't get things, it's just that the price may go higher. So that's how I would contrast the two.

Then I would say what's the -- coming out of COVID and the pandemic, our customers had to take significant price increases because of the massive inflation. So you saw a really, really impact on the consumer from an inflationary cost pressure. I think this time around, our customers say to us, at least they recognize and understand how stretched the consumer is, and they have to find a balance of volume growth because they need new consumers, they want consumers in their portfolio of products along with achieving their price mechanism.

So I think they are world-class. I am amazed at the revenue growth management disciplines that they have around package, price architecture, et cetera. And when they go to that discipline, the can wins. And it wins because of the robustness, because of the multipack capabilities, you can buy 6-pack, 12-pack, 18-pack, 20-pack, 24-pack, 30-pack, you go look in the shelf like it is amazing. So is it impacting the consumer? For sure, it impacts all of us. But what I can say is you can look every single week, every single month, every single quarter, every single year, the can wins. It wins share, and it's a growing part of the beverage, the ecosystem we operate in. We are so privileged to work in a section of the consumer goods industry that grows. It's grown year in and year out, and I believe it will continue to in the foreseeable future.

One more on supply chain pinch points. Our metals and mining analyst was here today talking a little bit about -- there's some -- unfortunately, obviously, it depends on the day and the tweet, but things are on and off in Iran. But there's primary aluminum production that sits in the Middle East and potential for shortages in aluminum. I think I saw a press release this morning, Novelis is back online. I know we talked about it last night at dinner. So that's a good thing. Just as it sits in the kind of summer 2026 selling season and then as you look out you guys source aluminum globally. I think it's a nonissue for you all, but just kind of how you think.

Yes. So our supply chains, we like short supply chains as much as possible. So yes, 9% of the primary aluminum in the world is produced in the Middle East, and it has been affected and disrupted. You would also have read this morning that the shipments out of China grew more than people expected. So it is a global commodity. It flows around the world. And the price does impact, but there's no issue from a supply perspective. When I say short supply chains, 75% of the recycled content of this can or 75% of this can comes from UBC, that's a short supply chain. This does not matter what is happening in the Middle East to collect 75% of the material that goes in that can.

It's a robust -- as I said, it's a growing industry and we're proud to be a part of that and leading that growth but it's a very resilient business as well. You mentioned it. We effectively -- the biggest cost we have is the aluminum in this can. We want to be rewarded for being the most efficient converter of coils of aluminum into cans, bottles and ends. The cost of the metal is either passed through to our customer or they buy the metal themselves or if they would like us to manage the price of it, we will, but we hedge it in a way that we want to get rewarded for the conversion. So it's a pretty resilient business model that we're -- we've built over years, decades, and it serves us really well.

I kind of jumped over it. A lot of people asked this question first. But the walk around the world, you mentioned 10 quarters in a row, I think with Q2 will be -- there should be growth. I feel like I heard you say mid-single digit. I don't want to pin it on second quarter for 2026, but can you elaborate maybe just what you're seeing in North America currently? Some folks were optimistic about some events that are happening and we have World Cup, we got America 250. And then Europe, I've heard mixed things. You might have a double travel season where people choose not to travel to the Middle East, so they'll do 2 trips in Europe, which could be a good thing. And then Brazil, what we heard yesterday a little bit was that things slowed down in the winter months, maybe not necessarily surprising as customers modulate inventory. So just any updates or...

Take a walk around the world. Yes. Sure. Let me start in North America then. So we talk about our long-term growth outlook, and this is a long-term growth outlook. It isn't every single quarter, but our long-term growth outlook is to grow our business 2% to 3% volume every year, and we want to achieve a 2x operating leverage on that 2% to 3% volume growth. How that decomposes is 1% to 3% in North America, 3% to 5% in Europe, and 4% to 6% in South America. That combined rolls up to 2% to 3% because 50% of our business is in North America, 35%-ish is in Europe and -- 30% to 35%, and 15%-ish is in South America.

As you look across the piece, we announced -- we were a little light in Q1. We were about 1% volume growth. We will make up for all of that. And in the half year, we'll be right in our 2% to 3% range. So Q2 is going to be right in -- I said mid-single, you repeat it. That's more or less where we're going to be. Promotional activity, all of the World Cup, America 250, those are great opportunities for our customers to activate an asset that they have, and they activate it with the can.

When you go into -- when we walk out to go to a Kroger or a Publix or an Albertsons or Safeway or Walmart or any big box retailer, there will be a display when you come in the front lobby. It's going to be built with cans. That's what I mean by activating the asset. They've spent a significant amount of time, effort, resources, money thinking, brain power, how they're going to take advantage of this asset to bring people together. They're going to do that with a can. And there will be lingering effects of that. So North America, right on track for what we planned for the year. We are challenged because we grew more than that 1% to 3% last year. In fact, we grew more than 5% last year.

So we're challenged, and we're building a new plant here that we'll have up and running certainly for next year. Europe actually we'll be on the high end of our range of that 3% to 5% as we flow throughout the year, which is -- I wouldn't say we've seen any significant challenges for the first half of the year. I hadn't heard this double holiday idea. I like a double holiday. Maybe I should go there. South America is where I would diverge a little bit. We did start the year soft there, and it was for very good reasons, a little bit of a destocking from a customer perspective. We came back in gangbusters. April was -- made up for all that deficit. I said 20% on earnings call. That's more or less where April was.

May is just as strong, and we will be incredibly strong in the second quarter. And we have high hopes, I personally do, that Brazil will win the World Cup. Brazilians more than anybody, they really want to get together. The times of the matches is going to be perfect. It's going to be in the evening. So we're hoping for a long run from Brazil. I want to knock on, hopefully, this is wood, that they do a great job. But I actually have high hopes for Brazil. It was a tough summer. The fall has been much more mild, and we've seen actually a pickup in material. Like I said, we should be in the low-double, maybe teens, and that's kind of where we're going to finish the quarter in Brazil and South America this year.

So Brazil will go deep.

100%. I checked it. Theoretically, there can be a U.S.A. Brazil final, and that's what I'm putting in my bracket. It's a little farfetched, but until it doesn't happen, that's what I'm going to believe.

We talked about a little bit last night. You talked about versatility of the can, which I believe in. I feel like I'm a packaging nerd. So when I walk into grocery stores, I see what you're talking about. I walk into C-stores. What I've observed in the kind of on-the-go channel is now more single-serve options for cans. It used to be -- you walk through, you saw just 20-ounce bottles.

Now it's -- might even be 60-40 cans, I don't know, 50-50 at least. So just to the extent that, that decision tree or the decision that has been made, there's some channel fill associated with it. Are they seeing the feedback that you're getting from that channel specifically, are they getting the desired outcome, meaning throughput is as good or if not better, consumers like used to associate a bottle with resealability. Now it's not as big of a deal. Just curious, maybe it's anecdotes that there's no hard data.

Yes, it will be anecdotal, but I will say this. On a relative basis, the beer -- we have 3 main categories. There's the beer category, there's the soft drinks category and there's the energy drinks category. Beer and energy sells more on a relative basis in that -- on a relative basis in that gas station, petrol station convenience store. And gas prices do matter. They absolutely do. But let me pick out the highlight. Energy drinks continue to grow double digits, and they do so because of the innovation that they bring to the market, different size packages. There's actually been a much more of a scaling up into the 16-ounce and a 12-ounce package as opposed to the traditional 8.4-ounce package.

So that's been a big win. They're innovating on in and out flavors that are great tasting products, and there's a lot of functionality now much more so. So energy continues to grow in that category. So that's when you say I see more cans, you're seeing a lot of more energy cans in the doors and the stores that are cans. The one thing that I think is really exciting, and I don't know if it will be huge. I think it's a nice plus is they're trying to hit a price point for a consumer as well that is stretched. So as they walk into that store and they put $120 in their gas tank and they want a little something to drink, you can get a 7.5-ounce mini can for a much lower price point than you would for a 20-ounce can. So if you go into a store, you'll see a can rack, maybe even in the 20-ounce door. I've seen it. So we're excited for that. Anecdotally, it's just a positive for us and teaching the consumer that like it's okay to go in and grab a small can and get a little treat.

One, Argentina was an issue for maybe 4 or 5 quarters. We didn't hear much about it. You didn't mention in your kind of walk around the world, kind of back to run rate where we expect it to be. Anything that we should be thinking about outside of Brazil? Sorry.

Yes. I mean we generally don't go into too much detail on those sorts of things. But I will just say like we are really pleased to be in the southern cone of South America, we are the only can maker. We're the only can maker in Argentina, in Paraguay and in Chile, combined with our Brazil business, we have a great position in that continent. Argentina is getting better, honestly.

There's been a lot of tough medicines they've taken, but we love our business there. And there's a lot of really interesting and good innovation. I'll give you another example, the opposite side of the spectrum. We make a large can, and it's a value for our customers to sell to consumers, so a 24-ounce can. So that's been a nascent product that's really never existed, and now it's been launched in a major way in not only Argentina, but in Chile and maybe coming to Brazil soon.

Yes. Got it. Exciting. Your predecessor made a comment on a call. I think he said beer directionally or alcohol was about 40% of the mix in North America. And maybe if you look 5 years out, it'd be closer to 30%. Nothing is ever linear. So a 2-part question. That's intentional, I think, by design for a couple of reasons. So progress on that. And then to the extent that you've been able to diversify even within the alcohol category, I think Mark Anthony is a reasonable sized customer for you all.

They're winning in the marketplace. And sometimes you just -- you have customers and you win and lose with those customers, you want to be best-in-class in terms of on time and in full and all those things. But just maybe talk about the alcohol category because what we get sometimes some pushback to not get excited about the story or there's always 2 sides to a story is that, well, they have alcohol exposure in North America, and there's a little bit of a negative sentiment around that.

Let me just -- I want to -- you can be very clear on something. It may have been the case, but we are not intentional. We love all of our customers. We especially love them when they sell cans. We love them when they sell Ball cans, and we love them when they sell even more Ball cans. So we love all of our customers. So there is no intention to move in or out of any category. It happens naturally. So as energy grows 10%, 12%, we will naturally have more of our portfolio in energy. It just -- it's gravity.

Now as it relates to alcohol, specifically, they are -- that category is, I think, finding their legs and learning what products consumers want. You said a specific customer around seltzers. Well, there's a winner in seltzers. There's a winner in hard tea. There's a winner in ready-to-drink cocktails. And we're proud to be a supplier and a partner to those customers. So I think just like in the other categories, the 3 categories, you have to innovate with new products, and they're doing that.

You have to find the right occasions throughout the day. What are the dayparts when you can consume or -- and you have to find what's the appeal, what's the brand appeal for that product. And World Cup is a great example. There's going to be great occasions, great marketing. And I think there -- and you saw it, our primary customers are winning in the beer category in North America. Now I want to go even higher, and that is like if you believe that consumers want convenience, they're going to drink a certain amount of things. And if they want convenience, they'll probably drink more from a package. And if they're going to drink more from a package, it's going to be a can.

And the data points that out. It proves it out on a weekly, quarterly, monthly, annual basis for quite a long time and for the future. So the fact of the matter is there are puts and takes across the piece, but the can continues to grow. It grew the last 2 weeks. It grew the last 4 weeks. It grew the last 12 weeks. It grew the last 26 weeks, it grew the last 52 weeks in all categories, and it will continue to.

On that note, your customers have to make decisions in advance. Some of those filling sites have to be preordered. There's capital decisions around that planning. You've talked about it a little bit, but just managing that with them to the extent you can, engage, no pun intended, in those conversations. Just again, informing your view as to why you're so confident in the growth is they're installing new filling capacity in cans. So can you just talk about that just from a planning horizon standpoint? And I mean, I know there's some new -- one of your big customers on the East Coast of the U.S. that gives you visibility for growth in the future.

Sure. It gives me a chance to talk a little bit about our economic North Star, which is EVA mindset, EVA. We intend to deliver greater than our 9% cost of capital or we don't get rewarded as a management team and as in a company. So EVA has been and will forever be the foundation and the North Star of our economic decisions as a business. Second point is we reinvest in our business to compound our growth. We spend roughly at our depreciation and amortization level, that's $657 million this year. We've said $600 million is our budget. And about 2/3 of that is growth CapEx.

So there will be years when we blip up above that because we have big opportunities with a specific customer. So that's what we spend on capital and capital to grow our business and grow our earnings. We install capital only when we have long-term offtake agreements, long-term offtake agreements from -- and it usually has to come from a large strategic customer. So we're building a plant in Oregon. That's as a result of a long-term, large strategic customer commitment to not only that plant, but to our entire network in North America.

So we're really pleased. We're grateful for that opportunity to build this one-line plant that we can expand beyond. Same thing, one of our most strategic customers in the energy drink category space continues to grow and grow and grow. And it will -- we're privileged to be able to support them when the time comes. So we make those decisions in collaboration with our customers. It takes 2 to 3 years to build one of these plants. So they need to make commitments to us, and that's why they give us these long-term commitments.

And yes, fundamentally, though, what we expect from our entire network of those 65 plants, we expect productivity. We expect more output from every plant every single year from the best to the worst getting even a little bit better. So we expect everyone -- the estate that we have to get better. And eventually, you run out of runway and you do have to build, and we're very judicious in how we build, and we only do it when we have a commitment from a customer that we know will be a partner of ours for the long term.

We're talking about customers, we're talking about relationships, contracts. I think probably maybe for the benefit of the audience, those aren't familiar. In North America, contracts tend to run 5 to 10 years, some variation of that typically. But can you remind us, I think you mentioned on the most recent call, you're contracted virtually all for this year and then for 2027, 90%. Just update us on that. And then anything that's changed, let's say, in the past 2 years as it relates to contract renewals or contract terms from a longevity standpoint?

Sure. Let's see. It is true that we have usually multiyear contracts. And the larger the customer and the bigger the commitments that we make, the longer the contract is. So we've renewed a couple of very big contracts, you said in the last 2 years. One of them resulted in us building this asset in Oregon that will be up and running later this year and we will scale into it next year. And you mentioned the one on the East Coast, we're talking North America specifically. That's also as a result of a long-term extension, multi, multi, multiyears. Let's see.

Terms, One of the things that changed coming out of COVID is we do have generally terms in our -- you had asked about length, but one of the things that does -- we have the right to go back and say, if there are extraordinary things that happen, like we have the right to go back and ask for something. Now that's not an easy thing to do even in today's market, like freight costs have gone through the roof. And generally, our customers -- not generally, they do have the burden of that freight cost. So it's a challenge to have that conversation with your customer, but it's -- we can prove that it's real. So we pass those on. Can you -- what did I miss in your question?

I think you mentioned...

Yes. Listen, this year, because we grew so fast last year more than we expected to, we are tight. We are expecting more output from all of our plants, we are tight. We're in the high 90% utilization rates across all the Northern Hemisphere, Europe and North America. And because of -- because we have the most advantaged network, we have the broadest breadth and depth of customers. I think we have the most envied customer portfolio in our industry. We are contracted out 90%-ish for next year and more than 50% out through the end of the decade and even into the next decade.

And we do that because, as you said, these are long-term decisions that our customers need to make. And as long as we provide them reliability and to make the commitment, they want assurance of supply, they want quality, they want service, that's why we do this. And we're really happy with where we stand. And again, we renewed a few really big contracts. And we're -- what we hear from our customers is they like the quality that we supply them, and we're going to continue to lean into that.

I think Washington one-line plant...

Oregon.

Oregon, sorry. One-line plant, which is kind of atypical for a bev-can plant, but room to build it out. Benepack, I think, is an interesting acquisition that's underappreciated from folks. You basically got 2 plants for the cost of 1, so...

Pretty much. Yes.

Buy 1, get 1 free. But just it's adding a little bit of growth this year, maybe in Europe, but then really it will hit stride next year. Just help us understand that.

Sure. So as I said, we sell about 115 billion cans, bottles and ends a year, about 50 billion of those in North America, 40-ish billion in broader Europe, Middle East. And this adds this year about 1 billion cans worth of capacity and sales to our network. Of that 1 billion, like we don't intend to make a lot of money with it this year because they are -- even though they are built plants, they are start-ups. In fact, in one case, the plant in Hungary literally is a start-up. It hadn't made a can. And it is only -- it's a one-line plant right now, but we will scale it to 2 when the time is right. And that's how we really get EVA dollars and EVA out of our businesses when we scale into and build out assets that we already have in the ground.

And similarly, while the plant in Belgium was running, it wasn't running 24/7. So again, we grew much faster than we anticipated in Mainland Europe last year. This was a great opportunity for us to buy versus build because we can get to market faster. They were already built. And now we have to treat them more or less as a start-up, get them to Ball operational excellence standards, which is running 24/7 in a standard way and quite frankly, start up an entire brand-new plant. And then we look forward to scaling into that, building out those plants for our customers.

You mentioned productivity. 2024, you kind of kicked off of 3.5 -- 3- to 4-year productivity program, $500 million gross. As you said, you've got to do some of that every single year to offset, I call it, the inflation treadmill, stuff that you can't get price for. As you look across the platform or the business, is there another leg to that? Do we think kind of through the end of the decade? I know you task your teams with it. We got to push hard. But just how to think about that?

Yes, 100%. So we -- my job is to set the strategy of the company, and there are 4 pillars to our strategy. Then is to execute the strategy. I don't need to go through all the pillars with you, but I'll give you one, like excellence and execution every day. That's the very first leg of our strategy. Our platform that we operate is our Ball business system. This isn't exotic. It's commercial excellence and operational excellence with the people that run it in the middle and the culture that we drive.

So let's go into the Ball operational excellence platform. Yes, June of 2024, I stood on a stage and said we're going to deliver $500 million of productivity in this business. We will deliver that a year early. We'll deliver that by the end of this year. That's just one waypoint on this journey. Every single year, we need productivity out of this business, every single year. And it is for, as you say, to offset any inflationary cost pressures that we receive.

Now you said gross as well. It is true. Some of this we share with customers in terms of our efficiency from a lightweighting, this can perspective, they want to enjoy some of that benefit as well. Some of that offsets our inflationary cost pressures, but some of it should fall to the bottom line. If there's one thing I want this version, this generation of Ball leaders and the people that have the privilege to lead this company to give to our investors is we intend to improve our gross profit. Over the next 5 years, we intend to be the preeminent packaging company in the world by every metric. And that means we have to improve our gross profit, and that isn't going to come through anything other than being the best can maker there is. That's productivity. That's what we have to deliver, and that's what we aim to do.

Well, I covered the industry for a long time. It's the first way I've heard it expressed that way. So...

That's pretty exciting.

It is. Last one for you, typically a layup, but just capital allocation. You guys -- you talked about EVA being the North Star. You pay a dividend. We had a discussion about that last night. I think you appropriately maintain flexibility to buy back stock, 4% to 6% being repurchased this year. But just can you talk about the philosophy, your targets? And then maybe to the extent there is M&A out in the marketplace?

So very quickly, I talk about balance and like balance. I'm not one side or the other. Balance for me in the short term is growing volume and profitable volume. Growing in the midterm, it's about how do we allocate our capital to -- for CapEx is growth CapEx. We have to sometimes spend growth CapEx to grow. And in the long term, it is about where do we allocate our capital. So we have an intention to -- we've been higher than 3x net debt to EBITDA. We ended last year at 2.8x. We intend to end this year at 2.7x on a path to 2.5.

Doesn't mean that if there are opportunities in the marketplace for us to acquire EBITDA at a multiple lower than what we earn today and bring it into our system and build it out, we will do that. There's been a few examples. Florida Can. We bought a plant in Winter Haven, Florida. We immediately took it to 24/7 Ball operational standards. That was a great acquisition for us. Benepack you mentioned. Those will be a great acquisition for us. Are there big opportunities? We're always looking, but we won't -- we will stay very true to our core, which is aluminum packaging. And if there are opportunities in aluminum packaging, we'll certainly look to expand our business as and when we can, if it's accretive to our EBITDA.

Okay. Wraps it up. Thank you very much, Ron. Learned a lot. And thank you, everyone, in the room.

Yes. Thank you so much for your time. We appreciate your interest.

Greetings. Welcome to Ball Corporation First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to Brandon Potthoff, Head of Investor Relations. Thank you. You may begin.

Good morning, everyone. This is Ball Corporation's conference call regarding the company's first quarter 2026 results. During this call, we will reference our first quarter 2026 earnings presentation available through this webcast and on our website at investors.ball.com. The information provided during this call will contain forward-looking statements.

Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, other SEC filings and in today's earnings release and earnings presentation.

If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations.

I would now like to turn the call over to our CEO, Ron Lewis.

Thank you, Brandon. Today, I'm joined on our call by Dan Rabbitt, Senior Vice President and Chief Financial Officer. I will provide some brief introductory remarks and discuss first quarter 2026 financial performance and our outlook for the remainder of 2026. Dan will touch on key metrics, and then we will finish up with closing comments and Q&A.

As we begin, I want to start with the big picture because it continues to matter how we think about Ball and our long-term value creation. We believe Ball is positioned to win and the fundamental supporting that belief remained firmly in place. Packaged liquid volume is continuing to grow globally, and aluminum cans are taking share as consumers, customers and retailers increasingly prioritize convenience, performance and sustainability. That dynamic creates a durable long runway of demand for our products.

Within that growing market, Ball is executing at a high level. Across our regions, we continue to leverage long-term customer partnerships, a well contracted portfolio and an unmatched global footprint. Our utilization levels are strong, reflecting both disciplined capacity management and consistent commercial execution. We are pairing that execution with financial strength.

We delivered solid results to start 2026, supported by a healthy balance sheet and a capital allocation framework grounded in EVA. Our focus remains on deploying capital where it earns returns above our hurdle rate and on continuing momentum as we move through the year. Operationally, our teams are performing well. Standardization, cost discipline and the Ball business system are driving improved profit per can and reinforcing our ability to generate operating leverage as volumes grow.

While we are proud of the progress we continue to see opportunity ahead. When you bring together attractive industry fundamentals, disciplined execution, financial strength and an operating system built for continuous improvement, Ball remains exceptionally well positioned, not just for this year, but for the long term. Our strong start to the year underscores the resilience of our business, particularly in a complex geopolitical and macroeconomic environment.

Our strategy is clear, consistent and grounded in our 4 strategic pillars, and that strategy is working. First is executing exceptionally in our core business. That discipline shows up in how we operate every day across our plants and regions, and it underpins our ability to deliver solid Q1 results in an uncertain world. Second, we stay close to our customers and maximize our global network, long-term partnerships strong service levels and a well-balanced footprint allow us to respond quickly and reliably.

Third, we continue to accelerate the substrate shift to aluminum and expand categories. Aluminum, sustainability and performance advantages matter, reinforcing demand and long-term growth opportunities. And fourth, we manage complexity to our advantage. Our scale, standardization and systems enable us to remain focused on execution rather than distraction.

The Ball business system brings these pillars together, connecting commercial excellence, operational excellence and continuous improvement. At the center are our people and our culture. Low ego, high collaboration and a shared commitment to doing the right things the right way. This is what makes our business resilient, supports strong Q1 performance and positions Ball to continue delivering disciplined execution and long-term value creation regardless of the external environment.

The Ball business system is how we operate, and EVA remains our North Star. Together, they drive disciplined execution and capital allocation, enabling us to deliver results. That discipline showed up in our first quarter performance. We executed well and stayed focused on the levers we control, earning returns above our cost of capital while maintaining flexibility.

This approach underpins a growth algorithm of 10-plus percent comparable diluted EPS growth, strong free cash flow and consistent returns to shareholders. The results we delivered this quarter are a direct outcome of this operating and financial discipline, and they set up the discussion on our performance in the quarter.

Turning to our first quarter performance. We had a good start to 2026. Global volumes were up nearly 1% year-over-year, reflecting slightly stronger-than-expected volumes in North America and in-line performance in South America, partially offset by volumes in EMEA. What stands out is our execution.

Comparable operating earnings grew 10% year-over-year, exceeding our 2x operating leverage objective for the quarter. That performance flowed through to the bottom line. with comparable diluted EPS up 22% year-over-year, driven by strong operational execution, cost discipline and capital allocation.

The first quarter performance reinforces our confidence in delivering 10-plus percent EPS growth for the full year. We also remain focused on shareholder returns and are on track to deliver in the range of $800 million to shareholders in 2026. Operationally, we continue to advance our priorities, including completing the Benepack acquisition to expand EMEA capacity and making good progress at our Millersburg, Oregon facility, which remains on track towards full ramp up in 2027.

Overall, this was a solid first quarter that reflects the resilience of our business, disciplined execution and the strength of our operating model.

With that outlook in mind, I'll let Dan walk you through the details of our first quarter financial performance and provide more color on our current expectations for 2026. Over to you, Dan.

Thank you, Ron. Before walking through our first quarter 2026 performance, I want to spend a moment on the changes we made to our financial reporting this quarter. As you saw in the earnings release this morning, we updated how we report our segment financials.

As Ron and I stepped into our roles, we took a fresh look at how we measure performance and align accountability across the organization. It became clear that we needed to more clearly distinguish between operating decisions made within the businesses and financing decisions made at corporate level.

As a result, we amended our definition of comparable operating earnings to exclude such items as factoring fees interest income and other impacts driven by corporate financing activity rather than the underlying operations. Importantly, these financing-related items remain included in comparable net earnings in comparable diluted EPS. So there is not a material change to how we measure or report overall company earnings.

In addition, we moved our beverage can plants in India and Myanmar into the EMEA segment, which has had management and P&L responsibility for those operations for several years. We believe these changes provide a clearer view of underlying operating performance by segment, while continuing to give investors full transparency into our consolidated financial results.

And to be clear, these changes do not materially impact comparable net earnings or comparable diluted EPS. Additional information can be found in notes of the earnings press release as well as on investors.ball.com under financial results.

With that context, I'll now walk you through our first quarter 2026 financial performance. Overall, the business delivered a good start to the year. Global ship beverage volumes increased approximately 1% year-over-year, low single-digit volume growth in North America and EMEA, partially offset by lower volumes in South America. Despite ongoing geopolitical and macroeconomic events, our teams executed well across the business.

Comparable operating earnings increased 10% year-over-year. That performance translated into comparable diluted earnings per share of $0.94, up 22% year-over-year. This first quarter performance reflects the strength and resilience of our operating model and is consistent with the financial framework we've laid out for 2026.

In North and Central America, segment comparable operating earnings increased 2.5% in the first quarter. Volumes increased low single-digit percent year-over-year, reflecting slightly stronger demand, particularly in energy drinks and nonalcoholic beverages. The team continues to execute at a high level, supporting customers, managing costs and navigating a dynamic operating environment.

As we look to the remainder of 2026, we continue to expect volume growth at the low end of our long-term range of 1% to 3%. As previously discussed, we anticipate $35 million of start-up costs related to the Millersburg facility and U.S. domestication of ins to begin later this year. While these costs represent a near-term headwind, they support long-term volume growth and operating leverage.

In EMEA, segment comparable operating earnings increased 20% in the first quarter. Volumes were up low single-digit percent year-over-year. The team continues to perform well operationally and during the quarter, we completed the Benepack acquisition, further strengthening our European footprint and expanding capacity in Hungary and Belgium. As we integrate these assets, we see meaningful opportunity to drive both volume growth and operating leverage as capacity is filled.

For 2026, with the inclusion of Benepack, we continue to expect volume growth above the top end of our long-term 3% to 5% range, along with operating leverage of 2x. In South America, segment comparable operating earnings were flat in the first quarter. Volumes declined mid-single-digit percent year-over-year, reflecting customer timing and inventory position coming into the quarter. Despite lower volumes, the team remained disciplined on cost and execution supporting earnings and positioning the business well as growth normalizes in the next 3 quarters.

Looking ahead, we continue to expect volume growth at the low end of our long-term range of 4% to 6% in 2026 with operating leverage of 2x. Focusing on modeling details for 2026. As Ron noted, with the resilience of our business and our pass-through models, we continue to expect to be on track with our algorithm of 10% plus comparable diluted EPS growth. We anticipate free cash flow of greater than $900 million in 2026. Our 2026 full year effective tax rate on comparable earnings is expected to be slightly above 23%.

Full year 2026 interest expense is expected to be in the range of $320 million. CapEx is expected to be in line with GAAP D&A in 2026. Full year 2026 reported adjusted corporate undistributed costs recorded in other nonreportable are expected to be in the range of $175 million. We anticipate year-end 2026 net debt to comparable EBITDA and to be around 2.7x, and we will repurchase at least $600 million of shares, which will bring our total capital return to shareholders to $800 million in 2026. And last week, Ball's board declared its quarterly cash dividend.

With that, I'll turn it back to Ron.

Thanks, Dan. Overall, our strong first quarter results reflect exactly how we intend to run Ball. Amid ongoing geopolitical and macroeconomic factors, our teams stayed focused on what we control, serving our customers, running our operations with discipline and allocating capital through an EVA lens.

The Ball business system and our strategic pillars are not theoretical. They are driving resilience in our business and translating into earnings, cash generation and returns for shareholders. We had a good start to 2026 and just as importantly, we are executing in a way that reinforces our confidence in the year ahead. Thank you.

And with that, we are ready for your questions.

[Operator Instructions] Our first question is from George Staphos with Bank of America.

Question for you first. With the performance, are you seeing any effects that you could call out from the Middle East tensions in terms of increased costs that won't necessarily be passed through real time this year, any effects on volume, particularly as regards to Europe, was there any effect on the segment's volumes related to the conflict that you could call out?

And then a couple of follow-ons.

George, thanks for the question. Nice to talk to you. From the impact on the Middle East, First, it's important to note that we do not have any direct business in the Middle East. And as a rule of thumb, we maintain supply chains that are as short as possible. So there's no supply assurance impacts either for our business or for our customers.

It is a fact, however, the cost of all things, commodities that are affected by the conflict in the Middle East to have affected our business like others, especially aluminum. And that's where our resilient business model comes to the 4. The way that our contracts work generally is we pass on the cost of aluminum to our customers on an immediate basis, and then they choose how they will manage that cost impact. So thus far, the can is winning. The can is winning in every region we operate. And EMEA is no different than that of North America or South America.

Our volumes are actually accelerating as we begin the second quarter of the year across all of our businesses. and EMEA is no different from that.

Okay. I appreciate that, Ron. Maybe the related question did European volume perform as you expected? Were there any one-off factors that might have led to better or worse performance related? Are there any important contracts qualitatively that we should at least have in the back of our mind that you'll be managing against and to renegotiate for 2027.

And then lastly, with Europe with the contracts. The last point being, we appreciate all the detail you're giving us and the granularity and getting back to basically operating performance within the segment. Are there any other metrics that you would call out that you're using as a guide point or a North Star user term for the segment in terms of profitability over time beyond the 2x leverage?

Thanks, George. So any one-offs related to our EMEA volume would be specifically, we purchased the business known as Benepack, the 2 plants, 1 in Belgium and 1 in Hungary. And we purchased that from basically the beginning of February, we assumed that we would have it from the beginning of the year. So that probably affected what we had versus what we had planned.

The second thing is, we sold a business in Saudi Arabia called UAC. And that business was reported previously in our other segments and with the change in our segment reporting, that's now from a comparable perspective, Q1 of last year is reported in our business. So that shows up as a headwind in our business. Those 2 things probably would have been some one-offs for us. But the core of our Europe business, we believe we're in line with market.

We're within our algorithm that we talk about in the 3% to 5% growth, and we feel pretty good about how we started the year there. basically as expected. You asked about contracts. It gives me a moment to just say that for this year, we are fully contracted.

And we actually are volume constrained in North America, as you know, and we have been volume-constrained in Europe because it grew so fast last year as did North America. And those 2 things why we are building a plant in North America and why we acquired the Benepack plants. So we're sold for 2026. For 2027, we're more than 90% sold and out through the end of the decade, we are basically 50% sold.

So no, we don't have any specific contracts that we are concerned about. We've got long-term contracts in place. And that's just the nature of this business, which makes it a wonderful business to be in because we're able to establish some great long-term relationships that help our customers win and win with they can.

As it relates to what metrics we would like point you to, it would probably be operating earnings per can. And that's why we've had the segment changes that we did. And I'm sure we'll get questions about that as well. But it's basically we want to have the most transparent cleaner for you all that analyze and comment on us and advise on us. We want you to have the cleanest looking Canada. So the operating earnings per can would be the metric that we would point you to.

Our next question is from Ghansham Panjabi with Baird.

I guess just picking up on the last question from George. So if I have this right, it looks like 1Q was pretty much in line with your expectations on a volumetric basis, but was really the operating leverage that was quite strong. And if that's accurate. Can you just give us the specifics, Ron, on what drove that improvement in operating earnings specific to the first quarter?

Yes. Ghansham, nice to hear your voice. Thanks for the question. I would say, yes, we were largely in line with what we expected from a volume perspective, even with our South America business down year-on-year. We were probably a little bit ahead of what we expected in North America. And we were a little bit behind in EMEA.

And let me just take a moment to talk about volume. While we were down in South America -- well, how did we compare versus the market? We think we were in line with market in North America. We think we were in line with the market in EMEA, and we were obviously below the market in South America given what our competitors have already already publicly stated.

As we begin Q2 at an enterprise level, our volumes as we finished April were up mid-single digits. Again, that's as we expected them to be. And importantly, our South America business is up 20% April on April, and that erases all of the declines we saw in Q1, and we're back to flat volume for the year. So we are very confident in our predictions for how our business will finish on a volume basis for 2026.

We expect to finish in our 2% to 3% towards the top end of our range of the 2% to 3% volume at enterprise level, and we expect North America to be towards the bottom end of our range because we are capacity constrained. We expect EMEA to be above the 3% to 5% commitment that we've made because of the inorganic acquisition that we made as well as a business that's performing in line or better with market. And in South America, we expect to still achieve the 4% to 6% volume growth as it relates to our long-term commitment.

Now as for the operating leverage, maybe I'll give Dan Rabbitt a moment to reflect on that for us because I think I want to hear his voice in this meeting, and I think you do, too.

Yes. Thank you, Ron, and Ghansham, thanks for the question. We are -- as we've been speaking to a lot of you all very focused on trying to improve the profitability. And that is why Ron really highlighted the the growing importance of our metric of profit per can. We measured in profit per 1,000 being manufacturers, but regardless, it's profit for can focus. And I think the business is responding very well to how to this focus.

And you've seen -- we saw good performance, good cost management, good pass-through of our cost really on top of our game that came through to deliver that 10% growth on operating earnings quarter-over-quarter.

Okay. Fantastic. Very comprehensive. And then just on the resegmentation, if you will, and just moving the plants in India and Myanmar to the EMEA segment, should we take away from this that you're just going to focus on North America, Europe and Latin America and not so much on the emerging markets, including those regions?

Or is it just an interim move, if you will, before before you start looking at capital deployment in the other regions, the emerging markets outside of South America.

Let me start with that question, Ghansham. Thank you for it. And I know we probably have some follow-up work to do with you and others after this call. But number one, the reason we made this segment operating change is this is the way we manage our business. It really is.

We -- the management team that manages our EMEA business is also the management team that manages those plants that we've now included in our EMEA business. So we're doing it for the way that we operate our business. We want you to look at us and advise on us the way we operate our business. Number two, we want it to be as clean as possible for you and others to analyze us from an operating earnings perspective.

So it's about transparency for us, both the way we operate internally and the way that we want you to look at us. the 3 regions in which we operate, including those regions that we've now added to our EMEA business are our core business, and we are the market leader in North America, South America and what is our EMEA business, the footprint that we have there.

And we're very excited about our EMEA business. It's a growing business, especially those parts of the world that we just added. India is growing high teens and has been for years, and you saw us add capacity and announce additional capacity adds to India and you see our competitors looking to add capacity there. So it's a great market, and there are other great markets out there. I wouldn't take from this that we are focusing only and solely on the markets we operate in.

And maybe, Dan, if you wouldn't mind commenting a bit on the other segment changes.

Yes. As far as the segments goes, the other thing that we did noteworthy really and was taking out the financing, the treasury-related items of the businesses to allow for better transparency on how the businesses are performing. And we really like our prospects in all 3 regions. And as you know, we measure everything from how we want to grow this company through the lens of EVA, and we see great opportunities in all 3 of our regions.

And -- so I think now you have a better picture on how they're performing. And really, if the changes may be contrary to what people might think is actually were slightly negative, but the operating earnings would have been higher had we not made them on the quarter. I think over the long haul, we see this as a de minimis change.

And again, reinforcing that the net earnings really have not changed. We're really materially the same place where we are when you look at the bottom line.

Our next question is from Anthony Pettinari with Citi.

This is Bryan Burgmeier on for Anthony. Just wanted to ask about tariffs. Curious if there's any impact to Ball from sort of the latest changes announced early last month, specifically just thinking about covering some of the derivative products or applying the tar value to the whole value of the product and conversely, maybe some changes to Mexican beer. Just not sure if that alters the Dew for Ball at all.

Bryan, thanks for the question. again, the tariffs that manage and govern the aluminum ecosystem and industry are Section 232. That's what's most impactful on aluminum cost and pricing. And the recent changes I think they're de minimis for our business. There's a slight positive for products that can come to the U.S. filled products, be they impact extruded aerosol packages or, as you said, beverage packages that are filled.

So net-net, it could be slightly positive. But we're focused on serving our customers. And when they look for supply from us, that's what we're intending to do. And yes, so far, so good.

Got it. Got it. And then you touched on India already, but just wanted to follow up there. You've seen maybe some reports like energy shortages or material shortages. Just curious if that region has been impacted at all by what's going on in the Middle East? And it seems like a pretty good growth outlook over there. But Yes, if you could just maybe share some details on the near term and long term for India.

Thanks, Bryan. India, for sure, is an exciting place. That's the real story is that we've seen multiple years of high teens plus 20% growth. So the can industry is really moving quickly to establish supply locally as we are.

As I noted, we've recently added capacity to 1 of our 2 plants there, and we've announced the adding of capacity to the second of our plants. So that's the real story of just managing growth in a high-growth market with with capacity constraints. There are continuing to be imports into that country because we cannot, as an industry manage to fulfill all the demand locally and there are some minor supply chain disruptions in that market that are, I think, come and gone. So we're running our plants and our plants at capacity.

So if there there's any -- there was no material impact and nothing to note really to talk about on this call, and we're excited about the long-term prospects of India.

Our next question is from Phil Ng with Jefferies.

This is John on for Phil. I just wanted to start on EMEA. The comparable EMEA earnings came in quite a bit better than we expected. It sounded like Benepack wasn't much of a contributor, at least compared to where you were thinking it was going to close. But you did note that the FX actually supported the earnings in the segment.

Could you just maybe give us a little bit more detail on what drove some of the higher year-over-year comparable EBIT in the quarter?

Sure. This is Dan. I mean, I think we have to start with is that the business performed really well. We're again, focusing very much on improving profit. This region really has probably the most runway to improve profit and indeed, they're doing that.

So I think it's a credit to that. But when you look at the overall puts and takes that Ron previously had talked about. The driver of this region is the EMEA segment, as you've always heard about at the last few years. It is performing very well. We're getting good now with the India plants and the Myanmarr plant coming in. Those 2 are showing growth and good operating leverage as well.

So I think the 2 inorganic opportunities that we took on buying Benepack and selling the UAC really kind of neutralize each other. So I think really mostly what's happening is good performance in this segment.

Great. And maybe you could just quantify how much the FX supported earnings in 1Q? And then my second question is just on the corporate undistributed cost. It sounds like they stepped up. Maybe that was just a factor of some of the recasting that you did, but going up to $175 million, I think you said. Could you just tell us what's going on there?

Yes. Well, a lot of the positive FX now is moving out of the segment reporting for what we did. So -- but for the company as a whole, I think we probably had about $15 million of positive earnings from the translation and a lot of that is the euro when you compare it year-over-year from the first quarter because it was at a low point a year ago and now it's kind of, I don't know, about 0.15 higher on the foreign exchange.

As it relates to EMEA specifically, John, I think it was less than half of the gain in operating earnings in our EMEA business was related to FX.

Great. And then the corporate undistributed?

That's what I think Dan referred to earlier, which was the $15 million.

I apologize.

So there's a corporate undistributed. That's where we put the FX gains and losses as the translational impact on EMEA was less than half of the operating earnings gain, and that's what you heard from from others in the industry as well.

Our next question is from Edlain Rodriguez with Mizuho Securities.

I mean clearly, I mean, one, we are clearly in an inflationary environment globally. Like how do you expect this to impact consumer mood and ability to spend. And if there is any impact, like in which region would you expect to kind of start seeing that first?

Thanks for the question. Well, first of all, the can is winning in every single region in which we operate, and it continues to take share from other substrates. That was true last year and the year before, and it's true this quarter, and we believe it will be true for the foreseeable future. So the can is winning.

And we can -- you see the same data we see, and we're really pleased for that. And why is that? It's because of the unique nature of the can. It provides a robust transportation. It provides a robust shelf life. The can has a shelf life of the year. It provides a great billboard effect. You could sell it a singles multiples. I mean, I can talk for for hours about the benefits and the filling your product in an aluminum beverage package and especially one made by Ball. So that's what makes it unique and helpful.

As it relates to inflation on the consumer, I mean, all inflation -- all costs are going up. And all I can say is our customers are excited about winning with the can as well. Every time I go to one of our plants, I see new promotional activity coming into summer, especially in the Northern Hemisphere. So every one of our plants is running and most of those labels are promotional labels.

And I think our customers will continue to lean into the can as a means of helping them to support the consumer as they seek value.

And Ron, the only other thing to add is that as consumer really is in place -- has headwinds, it tends to kind of retreat to doing more home consumption.

And that's been the reason why it's remained so strong.

Now clearly, that's the case. And 1 quick one. In terms of like the past to make and assume you have for aluminum and other costs, can you remind us how -- like is there a lag? And how much is that lag in terms of like how quickly you pass to those costs?

Okay. Well, let me do very quickly on aluminum, it's I say immediate, and our other cost pass-throughs are formulaic in nature, and usually, they pass through on an annualized basis. Is there more detail you'd like to add to that, Dan?

Yes. I think the 2 areas I would add on to that is that really we're talking about higher energy costs and how does that impact us. Ron covered the aluminum, so I won't go back to that. It's really about the customer often pays for the freight, more often at pace for the freight, too. So that's a pass-through to and that's a fairly immediate pass-through in many circumstances.

And then when we look at the year, we always look at trying to hedge and lock in our energy cost. And so we're in a pretty good position from what it takes to run our plants right now, too.

And we do those hedging to align with our customer contracts so that we want to be valued for the additional values that we add to the aluminum that we buy and make into aluminum beverage cans and ends and bottles for our customers.

Our next question is from Mike Roxland with Truist Securities.

Congrats on all the progress. First question I had is, Dan, you just mentioned in response to John's question that the EMEA business has the most runway to improve profit and they're doing that. That segment was already achieving operating leverage target, whereas North America is. And so I'm just wondering what you see in terms of potential for EMEA and why it has the most runway relative to other businesses. .

Yes. Thanks, Michael. I think the main thing to do is when you take a look at the profit per can, MEA is our lowest, okay? So for the regions. And they actually have been focused for several years and making the biggest strides on it. And as far as the profit per can.

So that's why I highlight that there's the most opportunity and the most progress has been made, too, as we think about that from them. Your question about North America, really, right now for the last quarter or 2, we see North America on target for trying to -- for the 2x operating leverage. It's been pretty close to that number. As we measure it this quarter and last. So I think good things are happening in North America as well. And it is also increasing its profit for [ CAM2 ] as we look at it.

And if you don't mind, Dan, I'd like to add a few things, Mike, thanks for the question. How are we going to improve our -- why do we believe we can improve our operating earnings in Europe? It comes back to our operational excellence platform.

Number one, we need to implement manufacturing standards in our business, and we're doing that. Number two, we need to manage our network well and adding 2 new plants in countries where we didn't operate in Belgium and in Hungary are certainly going to help us. And we're investing in our people and our systems. So those are the things that I think will -- that give us confidence that we can continue to compete and operate our plants and our network well.

I would say the other thing is Europe, we always talk about it as a land of opportunity. There is still significant opportunities for can penetration. So we know there's a lot of runway to go. We're really proud of our ability to deliver our operating leverage this quarter. We delivered and then some across the enterprise, we certainly delivered it and then some in our EMEA business. We delivered flat op earnings in South America despite the volume declines in North America.

We achieved our operating leverage there as well in the quarter, although for the enterprise for the full year, we expect to do more or less operating leverage as compared to our volumes at 2x. That's what we're planning to do.

And Ron, I think I'll use this as an opportunity to reiterate the outlook for North America. We've been talking about the $35 million of ramp-up costs for Millersburg and the domestication of some in production as well. And that was not in the first quarter.

So as we start to think about the rest of the year, you're going to see those costs come in later in this order and heavily in the third quarter, possibly a little in the fourth quarter as well. So that's going to distort some of that operating leverage. And that's why we've been saying all year long, you're going to have to make some adjustments for those, and you will see the operating leverage on the base business.

That's perfect. And if I had just one quick follow-up. In terms of some of the incremental costs you're experiencing, obviously, they're believed to be transitory of freight, chemicals, energy, and I think I know the answer is going to be but going to ask the question anyway.

What levers do you have available to you internally to offset those higher costs? I'm assuming operational efficiencies, deploying best practices, the bold business systems, some of the things you mentioned on your commentary. But are those are the levers that you have in your wheelhouse to basically offset incremental costs and to even potentially drive margins higher when those costs recede.

Mike, I think you're thinking about it the right way. We have to be operationally excellent every day, and that's the first pillar with our strategy. So that -- those are the primary means by which we offset those costs. And they're real. So -- and then the second thing is we are a resilient business model. We are rewarded for and paid for making cans, bottles and ins as efficiently as possible. .

And the cost that we manage on behalf of our customers are generally passed on to them in a formulaic way, be it freight, be it other direct materials, be it aluminum through various means. So that's what makes us a very resilient business in a very resilient industry.

Our next question is from Arun Viswanathan with RBC Capital Markets.

I guess I just wanted to get your thoughts on maybe the contracting environment. You guys are adding capacity in North America and Europe and and elsewhere. So presumably, supply and demand is relatively tight in all regions. But are you expecting to -- given that tight capacity, would there be any pricing opportunities over the next few years? I mean how should we still expect about 1/3 of your contracts roll over every year? Or maybe you can just kind of help us frame those kinds of opportunities as well.

Arun, thanks for the question. I would say you saw the industry grow significantly the last few years. Certainly, last year, Ball, we grew more than 4%, so above our long-term algorithm. And we used up a lot of the latent capacity that we had.

So strong growth in the last several years has led to a relatively tight supply demand scenario. We, as a business, are operating certainly at asset utilization levels in the mid- to high 90s depending on the region on a percentage basis. So the supply and demand is relatively balanced to tight.

The next thing I would say is the long-term nature of our business is also reflected in the long-term nature of our contracts with our customers. So I mentioned earlier on the call, we are sold out for this year. We are more than 90% sold for next year, and we're more than 50% sold for the balance of the decade. We have a heavy capital deployment in our industry. So it requires that level of commitment from a customer for multiyear contracts. So we're well contracted.

You said there's roughly 1/3 of our volume turnover every year just based on those numbers, it's significantly less than that. Is there an opportunity for us for pricing, I would say, we want to be fairly rewarded for what we do. including down to all of the value-added things that we do, whether it be a different type of specialty can or a special special promotion or a different type of ink.

Those are the things that we deserve to and get rewarded for when we're able to bring that sort of innovation to the market. the market will be what it will be, and we just know that we need to be operationally excellent to compete in it. Thank you, Arun.

Okay. And then if I could ask a follow-up. Just curious on if you will be putting in more capacity here in North America. Obviously, you have the Millersburg plant, but Presumably, that will only bring you down to the low 90s and maybe even in the mid-90s. So is that -- would you be adding more capacity?

And what are your customers, I guess, when you do go through this process, you kind of presell the plant out? Or is it kind of more done in the future?

Yes. Thanks for the question, Arun. It gives us a chance to talk about Millersburg, which will be commissioning late this year, and it will bring material volume to our network next year. It will allow us to remove some supply chain inefficiencies because we do not have capacity in the Pacific Northwest and the U.S. So that will help us and our customers.

The most important thing about that plant that you should know is it comes on the back of a long-term offtake agreement with one of our most strategic customers. So that plant is -- capacity is spoken for, for many, many years to come when we build it. And that is the second thing that you said, the case for any plant that we would build, we will not build a plant unless we have a long-term offtake agreement filling essentially all of the capacity for that plant.

So we're excited to bring new capacity to North America, but we only bring it on the back of a customer's commitment to us because they see the growth of the beverage can. Maybe a specific comment, for example, the energy drink category, as you know, and we all know, is growing and continues to grow unabated. And as it grows, we're excited to help our customers in that regard.

And we have potential to build another plant on the East Coast at some point before the end of the decade, but I wouldn't get too excited about it because it won't be in the next several years. But we have intentions to build a plant in the East Coast in North Carolina because of the growth of one of our more -- most strategic customers as well. And we'll do that when it's appropriate. And hopefully, that gives you a sense of how we deploy our capital related to our customers. Thank you.

Our next question is from Hilary Cateno with Deutsche Bank.

Could you talk about what you're seeing from the CPGs and in terms of promotional activity? Are you seeing them be more promotional than they have been in the past? Any color on that would be helpful.

Hilary, thanks for your coverage of us. We appreciate it. Yes, it's great. Our customers, we've really them and look to them for guidance on how they view the consumer. They're much better at this than us, and we really appreciate the insights they provide us. Based on what we know and we hear from them, I'm going to talk specifically about the summer coming up.

When I go into our plants and our factories around the world, be it in Europe, in South America or in the U.S., at least one of the lines is running a World Cup label. So that's exciting. Everyone is excited about the summer's World Cup coming up. And if you're walking through one of our plants in North America, I can almost guarantee you, you will also see another rhine -- line running America 250-year celebration labels as well.

So clearly, our customers are looking forward to taking advantage of some exciting consumer-driven marketing activity this summer. And it should be at least -- it will be no worse than neutral, and we think it will be a net positive for us. We couldn't put a number on it right now. We're just pleased that our customers continue to see the value that I spoke about earlier of the beverage can. It provides an amazing billboard for them to talk about that promotion.

They can use it as a multipack or a single different sizes and the robustness of the package means that they can lean into the can as opposed to other packaging substrates because of the shelf life and the quality that, that can provides for their product.

Got it. That's helpful. And then just a follow-up question. The EVA framework really seems to be working well in setting a clear guideline and goals on the corporate level. So could you just talk a little bit about how the EVA framework is being used to like incentivize employees at the plant level and to make operational decisions and is that what's driving operational efficiency on the corporate level as well.

Thanks for the question, Hilary. I'll let Dan say a few words in a moment about EVA, but it just gives me a chance to say, EVA is our North Star. It hasn't for a long, long time, and it will continue to be for the foreseeable future.

So how we deploy capital, running a cost-efficient business, that's what acting like an owner means. So as it relates to our plants, all of us are rewarded for delivering EVA dollars, every single person in this company. And maybe, Dan, could you give some nuance around how we're thinking about EVA operationally?

Yes. Yes, the nice thing about having EVA is it's been here longer than Ron and I have. And so it's really ingrained in the culture. We do like to have everybody included in these plans. And what we're really focused on now is breaking EVA down from this financial concept into what they can actually do to improve EVA. So we're making it much more personal.

And that's one of the key items we're doing to improve the profitability of the company right now is really getting much more granular and breaking down EVA.

Our final question will be from Matt Roberts with Raymond James.

I got a couple of messages clarifications on first April. I know you said that was up mid-single digits. What region was that? Or was that enterprise wide? I believe South America, you said April up 20%. How much of that 20% was the catch-up from 1Q?

Thanks for the question, Matt. So enterprise-wide, we started the quarter, the month of April, up mid-single digits as an enterprise. Within that enterprise, South America, April volumes were up 20%. How much of it was catch-up from Q1?

Well, what I can say is that April volume made up for all of the declines we saw in the first quarter. And it gives me a moment to just say what happened in the first quarter. What happened in the first quarter for us was you saw a really strong volume for us, high single digits in Q4 2025. So we came into the to Q1 with a pretty healthy sales of cans to our customers who had built a strong inventory. The peak season in South America, weather wasn't probably as good as on average that it would normally be.

So it was a little weaker than average, but the -- coming out of peak, the weather has been quite good. And we're seeing a strong pull through as we come out of that peak selling season in South America. And we think that's some of what's happening. And it wasn't asked, but we delivered flat operating earnings in the region, which we're really proud of. And how we did that was we actually got to a position where our inventory levels were a bit lower than we expected.

So we were able to build back our inventory, which helped us to deliver the P&L in South America. And also, we had some good size mix and country mix there as well that helped us deliver flat operating earnings while we had volumes down a bit. So hope that answers your question about the volume and a little bonus on color on South America.

Okay. Thank you very much, Matt. And Sherry, I think that's our last question. So I just wanted to thank everybody again for your interest in our company. our analysis of our company, your partnership in helping us tell our story. We really appreciate that very much.

We look forward to talking with all of you more and sharing our story. So we're excited about how we delivered the first quarter of 2026. We're confident in how we're going to complete 2026. And importantly, we're confident in the long-term nature and the resilient business that we have the privilege to run. So thanks again, everyone, and we look forward to talking to you very soon.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Welcome back, everybody. I'm George Staphos with BofA on Paper and Packaging. Thrilled to have Ball Corporation back to our conference. Ball, again, was one of the very first companies we've had at a conference, we were back in the 1990s and honored that CEO, Ron Lewis; and CFO, Dan Rabbitt are here from the company. Ron became Chief Executive Officer of the company in 2025 after joining Ball in 2019. And Ron, prior to that, had an extensive career at Coca-Cola. Dan Meantime joined Ball in 2004 and became Chief Financial Officer in 2025 after a series of senior leadership positions at Ball. Gentlemen, welcome. Great to see you.

So starting off most of the presentations, just with a quick [indiscernible] as possible. Our good friend and great friend, Brandon Potthoff in the audience as well. So he'll keep you honest. Brandon how are you? Doing well.

Company got to 10% earnings growth, free cash flow in excess of $900 million this year. North and Central America was guided to grow at the low end of its 1% to 3% outlook, Europe at the top end of the range. Just help us understand how things are going so far in the year. No guarantees in life, we understand.

Sure. Thanks, George. Well, first of all, we're executing on our strategy, and our strategy is very simple, four pillars to our strategy, excellence in execution every day, being close to our customers, managing and continuing to drive, quite frankly, the substrate shift that's happening, cans taking share from other substrates and capitalizing on the complexity that's in the world and in our market because we have the best network and the most variety of operating of the cans.

What's really exciting for us is focusing on profitable growth. Those four pillars of our strategy will help us deliver profitable growth through the execution of our strategy, what we call our Ball business system, and that is commercial excellence, combined with operational excellence, and people right in the middle of that. So that's what's helping us to drive our long-term growth expectations that we have as a company.

We delivered, as you said, quite strongly in 2025 and 2026. The year started quite well, kind of on plan. Some things a little better, some things we had planned for, but are a little softer. But I can say like -- you talked about breaking down the various regions. North America, we said low end of the range. North America, quite frankly, has started positively for us, a little -- a positive surprise. So that's great.

Europe, we expect high end of the range. And with the inorganic acquisitions we made, which closed right as we announced earnings early February, earlier this month, and we're excited that it closed earlier than planned. So we expect to grow even on towards the outside of our top end of our range there because of the inorganic growth.

And South America, we had a really good carnival, which is helpful because the summer overall has been challenged there. We will deliver on the -- on our intention, which is towards the low end of the range on volume, but certainly achieving the 2x operating leverage that we've committed to there.

Got it. And if we can talk maybe peer a little bit into 8 weeks isn't necessarily something to take to the bank. You're going to work on it every day and every week of the year. What's driven the slightly better sell-through on beverage cans so far at North America?

I think certainly, North America, the year finished really strong. So the pipelines getting refilled has helped. I think that certainly helps. Quite frankly, we've talked a little bit about summer and some other previous calls. We're already making labels for World Cup. We're already making labels for America's 250th anniversary. And so I think people are really excited about that, and there's some opportunity there.

We love all of our customers, and we love them to help them win with the can, and they're winning with that can. I think that's really helping. And I think they -- our customers are using the can as a means of supporting their revenue growth management strategies. It's a great way to offer value to consumers, which I think they're very focused on, how do we offer value to consumers. We've come out of a really high inflationary pressure environment where now they can use the can as a means of driving brand health.

Dan, what does that mean to you in terms of how you run the business if it's starting at least in line, maybe a tick better, especially in North America, anything that you need to do in terms of procurement, working capital management and the like, anything out of the ordinary there?

As we think about those areas that you said, really all the year is opening up really in line with what we thought. So those plans have really been put in place as we come into the year.

Very good. Ron, a question for you. Just came as we're talking now as I was listening to you talking about trying to manage the pack mix shift over time to cans. You at one point in time we're at one of the customers. And at the end of the day, whatever the customer wants is what ultimately the customer should get. How do you manage that now?

Obviously, cans are what you sell, but your customers buy others. How do you manage that transition without while at the same time managing the good relationship that you should have with any given customer?

You'd love to get them all push 100% cans in the mix, but they're not want -- they're not necessarily going to want to go there, and you got to manage that balance and at the same time, maintain constructive relationships.

Yes. We are passionate advocates for the can. We understand that consumers are going to drink what they're going to drink out of whatever packages, and we understand that our customers are going to buy various other substrates.

Our job is just to make sure that we offer the right -- to win trust of our customers offer them the right quality, offer them the right service for them for the good a good price. And if we win their trust that way, they'll continue to convert to cans. And it's happening. They're building can filling lines. Not only are they doing that? There's a real strength in the co-packing market contract manufacturing. So there's a real demand pull for cans. We don't have to push it. It's naturally happening.

Very fair point and actually a very interesting point. About the co-pack opportunity there or trends that you're seeing there? We don't normally talk about them.

Yes. I would just say there's, of course, we're a scale business and we sell to really important large-scale customers. But there's always somebody coming along. Somebody always trying to disrupt that. And maybe I would pick on the probiotic sodas, prebiotic sodas, poppy, [ Ali pop ], et cetera. That's a whole new category that's never existed until a few years ago. They have to start somewhere, so they're going to start with a co-packer or a contract manufacturer.

We have good relationships with all of those contract manufacturers. We know where they're installing new assets, and we work closely with not only them, but the people that help them build their brands. So we hope they grow into a large, large customer 1 day or they may get acquired by one of our large customers.

Do you have a minimum purchase thresholds with these types of customers? Or...

We have a minimum order quantity. That's basically a truckload Yes. And we also have a very good distributor model as do the can industry does. So if you want to buy a can, you can buy a can, but it would largely probably be through one of our distributor partners. .

Understood. Any questions from the audience as we're starting with Ball Corporation, Ron and Dan here?

Switch gears a little bit here. What changes have you tried to bring to Ball, which was in a good place and has been in a good place for 125 years, right?

Okay. 145. Okay. And what change have you brought in terms of operations day-to-day incentive plans. Tell us about how the Ball world has looked maybe a little bit differently since November.

I'll talk for a moment and then I'd like for you to add some things on the incentive, et cetera.

Where I spend my time. For most of my time I spend with our customers, the very top of the house from our customer perspective, I spend time with them because if you want to hear how you're doing and where you can improve, that's a great place to go. So very much with our customers.

That would be comfortable to do it, too.

Yes. Yes. But I fly to go see them purposefully. Second place I spend a lot of my time is with our people. So we are a manufacturing company. We have 67 plants around the world and how they perform is how we perform, and they work extremely hard for us.

The overwhelming majority of our people come to work on shift every day, and they need to know that their management team works as hard as they do. So we go see them. I've met every single one of our plant managers, all 67 of them in the first 6, 7 weeks of this year. Been out to see them in their locations. We go to their plants. We took our entire management team at 5:30 a.m. like we're in the plant. That's when shift tend to happens. I'm going to plant on Monday and Tuesday next week, Dan and Brandon are in plants on Monday as well. They need to see us. They need to know how hard we work for them.

And then the third place where I'm spending my time is quite frankly, with you and all of the people you represent, our owners matter. We need to deliver results and then we need to make sure that we're telling the story around how we're delivering those results. So that's sort of where I'm spending my time. It's hard work, but it's teamwork. It's high touch. It's low egos and high collaboration, and we're all in this together.

Yes. I'm going to migrate this a little bit more to the financial metrics, the incentives, which was part of the question. Ron and I really were -- as we both came into this job really saying, embrace this culture. This culture is what makes us great.

And one of the key components of that culture is we had a high financial acumen because of something called the EVA, Economic Value Added, and it is something that is still at the core of what we do. When we make big decisions. We run them through -- are we going to make more EVA dollars at the end of the day.

But one of the downfalls of EVA was it is a kind of complex financial concept. And then how do we use that to connect with the people at the lowest level of the organization. We have actually found that we feel like we're on the path to the best of both worlds. It's still the biggest part of our compensation for the senior executive team.

But in the short term, really we need to break it down for people. How do we make our plants more profitable. How do we sell more product. So we started to break EVA down on our -- some of our short-term plans.

And let me give you an example. Last year was the first time in my 22-year history at Ball that we actually had an incentive around growing our volumes. And guess what, last year was the best organic growth volume year in my 22 years. So I think we're seeing that by doing that, we're bringing more volumes in more profitable growth and that drives our EVA.

So at the heart of it is still EVA, we've tried to make it more personal to the people in their respective jobs.

Very good, Dan. How do you -- at that same level for the plant manager, how are you incentivizing on return on capital and spread, which ultimately is EVA? Is it does that person get an EVA target? Or they're getting the volume target and they're also getting a capital target that you've prescribed to them?

I'll start, if you don't mind. So they -- all of our plants are incented based on how efficiently they run. And that's the best way, a high fixed cost business getting more out of what we've got. So their job is to deliver volume, but to deliver profitable volume. And the way they do that is by getting more cans out the door. That's part of this execution of our strategy.

It's the Ball business system, and there's three elements to it. One is commercial excellence. One is operational excellence, and then there's people and culture right in the middle of that. So from an operational excellence perspective, we committed in June of 24 to deliver this $500 million of gross cost savings. That's part of it.

Part of that is how do you get more cans out the door every day and really, it's an efficiency metric that we look at for them efficiency, spoilage, output production. That's what's important.

No, I think we've got the plant management team really on a lot of the statement seems that Ron and I and the executive team are on. And yes, they've got the benefit of having things that are more personal, more relatable to the people that work in the plant. There's the only thing I can really overlay on that.

We all get paid on EVA dollars every single person in this company.

No. For sure. And you already touched on this to some degree, but -- and you talked about it on the last earnings call, but the confidence in the 2x operating leverage. You mentioned you're getting it in South America. This year, you'll get close to it, I believe, if not for the start-up costs.

Or remind me if I'm wrong, last year, you got closed without the start-up costs and supply chain. And this year, you expect to get to 2x on North America. Just give us a bit of color why you're comfortable on getting there and how it will play out across the various regions?

Sure. Well, at the very foundation of this again is we need to be the best can maker in the world, and that's about operational excellence, what we call Ball operational excellence. So the way we're confident is that we know that this program delivers standardization to our facilities. Every single plant runs the same way we look at them and how they operate their metrics. We look at them the same way.

Again, they deliver scale continuous improvement and can we drive stability into those plants. So those are our three assets as it relates to operational excellence. That's what gives me the confidence. We've been delivering in Europe more than 2x that operating leverage for a couple of years now and we will do it again this year even with the inorganic acquisition of the two Banepack plants.

So we'll grow on algorithm in that 4% to 6% or 3% to 5% range in Europe organically, and then we'll compound that with this inorganic growth. We'll still -- whatever that growth is, we'll deliver more than 2x.

In South America, we've said we'll be on the low end of that range given what has been a challenging summer, but we'll deliver it and we'll deliver more than the 2x there as well.

North America, yes, we have a few things that are happening that are transitory, one is starting up a new plant, which we're excited about because it gives us the opportunity to grow. And two is adjusting our network related to all the tariff impacts producing both cans and ends in the U.S. as opposed to in Mexico. But not for those two things, we would be on algorithm as well from delivery of the 2x operating leverage.

So we -- the fact that we are able to do it broadly in our business, it gives us confidence as well.

Thank you, Ron. Thank you, Dan. As we think about it, we haven't finished first quarter 2026. So forgive me for asking you to project out 2027. But when we think about it, let's assume we have volume growth in your target ranges. Next year, you don't have the start-up costs next year, Banepack is not that it is a new entity, but it's new within Ball. That will probably have some operating leverage. Seems likely that to us, that '27 might actually see better, not worse earnings per share growth relative to '26 growth. So if you're a 10% or better this year, certainly, that seems fairly likely in '27 based on what we can know, at around that.

Yes. Well, I think I'll give a comment, but I'd like Dan to add some comments too. Number one, yes, we're excited about 2027. It's very early. We haven't really done a ton of work on 2027 yet. I will say that in 2027 our book of business, we are more or less 90-ish percent sold for 2027, so -- versus the capacity we have, which is, I think, quite a strong basis to grow from.

Second thing I would say is we should expect to grow operating earnings. The third thing I would say is you know our algorithm is to also buy back 4% to 6% of our shares. We bought back significantly more than that in 2025 that helps us in 2026. And this year, you should expect us to be much more close to that 4% to 6% range. So that will drive the EPS growth in '27. Dan?

Look, in isolation, if you look at the growth events that, George, you referenced, first of all, is the Millersburg plant. In isolation, that comes with volume and really allows us to better align our network in the U.S., and that means we can be more efficient, more efficient and production more efficient in how we're shipping and transporting the cans. So clearly an opportunity.

When we look at Banepack, with a market that continues to have just great growth outlook, getting two plants really at nearly half the cost will take to build them out -- and this year, we get them up and running under our Ball system. Next year, we get the benefits of. So those are exciting projects for us, and they do give us a little more breathing room for one, and they allow us to actually grow. And I think we're continuing very early days, thinking around the algorithm being a good way to look at next year, but maybe it's early days. We're not really spending a lot of time on '27 yet other than being -- seeing what these new projects can do for us.

No, that makes sense. But I think it's constructive for what it's worth that you keep anchoring everything in a good way to the algorithm when you do that basically that flows downhill and everyone else thinks about it the same way.

Like that of ourselves.

So you've talked about the fact that because returns have dropped in prior years, there was a fair amount of capacity build that had occurred that you are on a going-forward basis not going to spend more than $600 million on average over a 3-year period. First, did I correctly get that.

I think what I would slightly tweak it, we're going to spend at D&A levels no more than. And this year, quite frankly, our depreciation and amortization is $655 million. We've committed to a $600 million budget this year because that's what it rolled up as. Over the 3 year period, It will be a D&A. It may tick up 1 year, it may tick down 1 year, we tick down for 2 years, the last 2 years, et cetera?

So let's assume instead of growing 1% to 2% in North America, 1% to 3% is your target range. Let's say the market goes through another period of accelerated growth, will you be -- would you be willing to spend over depreciation for a longer period of time, recognizing that in the past, even though you're benefiting now for some of the investments that you made, you and peer is overcapitalized. So how are you going to maintain that discipline when that next accelerated move comes, if it comes.

Let's hope it gets comes. But I would say, number one, we learned our lesson. I just can tell you we did. From a management team perspective, the answer is D&A, period, full stop, end of discussion. From a Board perspective, they learned their lesson. We're going to spend at D&A or less. Over a 3-year period. So I think from a governance perspective, we've learned our lesson.

The second thing I would say is there was capacity built in North America that was built for the general market, and we were no exception to that. We do not build capacity anywhere in the world without it being tied to a long-term contract that pays for that capacity with very specific strategic aligned customers to us. So that's how we're going to manage it. And I can only just commit that to you. And that's what we're committed to our business and as a team.

Understood. Any questions from the audience? There's a question kind of back row if you can wait for Laura. Thank you.

If you can speak up.

What are the current pain points that you see? So IG trajectory and pain points in the specific end markets that you see at this point? .

The first part of the question was about leverage? I just want to make sure I'm understanding the question.

Yes. So generally, the view has been that we aren't able to reach IG possibly, maybe not a goal there. but generally not on the IG level because of the leverage and the kind of buyback that we have seen, the cash flow go there, right -- so is there a trajectory in mind or a time line in mind that you're looking to execute there?

Let me at least take the first part of that, and that is part of the capital discussion that was just occurring here with Ron leading us through looking at depreciation and amortization is because we did learn a lot also about what we think the appropriate debt levels are for the company and the need to be returning money to our shareholders continuously. And so that does play a role.

So really on the leverage front, we've -- historically, in my 22 years, I was always told is 3x is a good number of balance sheet leverage, and we'll flex it up to 4x if we had a strategic acquisition with Synergy that we could pay it down. That's not shifted. I mean it's shifted for lower today, right? I think what we learned coming out of COVID with the inflation and the supply chain disruption really was -- and that level of -- in that tariff environment is probably a little better flexibility by having a lower -- we're driving it towards that 2.5x. We finished up to 2.8x this year. I think we guided to 2.7x by the end of this year. And see a path to bringing that down. We think that's very important. So that will be prioritized.

We also realize that 10% EPS growth is really nice. It sounds really good in a GDP industry. And the reason why you get there is you have to buy back shares. And we're not going to buy back $3 billion of shares like we did over the last 2 years, but it's something more in that 4% to 6% of the outstanding shares that we're really targeting. And the combination of the operating earnings or EBITDA growth and the combination of the share repurchase is how you get to the 10%. So we're very committed to that. That also holds us in check on our capital spend.

Thanks for the question. Ron, I was hoping that you could talk a little bit about Millersburg and the benefit it's going to bring to Ball's operations in a little bit more detail. And relatedly, when do you think the tariff headwinds normalize relative to the thing you're doing operationally? Is it something that's going to continue through the entirety of the year? Are you largely over the hump by middle of the year, whatever you want to say there.

You're welcome. So first of all, on Millersburg, that plant will start up in Q3 of this year. And we'll have start-up costs as we've said, that's normal. You'd expect that.

What do we get from it? What we get is number one, capacity, much needed. We've said we are largely sold out this year because we don't have -- we've lost a pressure relief valve in these plants to the south of Mexico. So we're serving our customers with distinction but we don't -- we're not -- we don't have the ability to go create a lot of spot volume. So number one, it gives us capacity.

Number two, it gives us capacity in the right place. in an important part of the world where it's on the fringe of our network, and we need to have capacity in the fringes of our network in Florida and in the Pacific Northwest, so it helps us there, and it helps us not ship cans from out of pattern. At the moment, we are shipping cans out of pattern from the Southwestern U.S. to the Northwest U.S. So we'll achieve some value there.

And the third thing I would say is it's not -- let's assume things go really well. That's a place where we can add more capacity. We can add a line there, just like we can add a line in the plant we bought in Winter Haven, Florida. There's the ability to add a line there. So we don't have a lot of open days to put new lines in, but we'll figure it out. So those are some of the things that gives us, and we should see the benefit of that beginning in Q4 of this year, certainly from a capacity perspective, and you should see value in it in 2027 for sure, Millersburg.

Your second part of the question around tariffs. And when should we see that start to ease? I would say I'll talk about lids or ends, for example, the tariff on those came in on August 2 of this year of last year. And it will take us a good 12 months to get the capacity moved from a certain production location into a certain production location in the U.S. So you should expect that tariff elements start to ease in Q4 of 2026. And certainly, all of that headwind is largely gone by 2027.

Any questions in the audience for Dan or Ron?

So tell us a little bit about how you're able to get the $500 million of targeted cost saves a year earlier than expected. And with that as a backdrop, what's the opportunity to have another relatively significant number recognizing every day, you're trying to drive more and more productivity, more yield and it's not -- you get there and you're done.

So as you know, George, I had a chance to lead that initiative for us. And we, as a company, we're not standardized across the enterprise from a platform perspective. And this is all operational excellence is what we keep talking about because that's what we talk about internally, how we were able to achieve that is by getting to a standard. So every plant, everywhere around the world does shift hand over the same way.

Every plant, everywhere in the world manages voluntary turnover the same way. Every plant, everywhere around the world measures spoilage or losses the same way. So that has helped us see where the opportunities are.

And the trick for us is how do we keep that up? And you should expect us, we should expect ourselves in a business like we're in if we're running a very lean operation to find gross savings in the 1% to 2% range of our supply chain costs. So our supply chain costs, let's call it, round it to $10 billion. So we should expect $100 million to $200 million every single year.

Now are we able to keep that in our pocket, I'll give you an example. We lightweight these packages, and we try to lightweight them every year. And we usually share the value of that after we paid for the capital with our customers. So some of that we use to compete in the marketplace and share that with our customers.

So we hope that half of it sticks to our fingers, if there's large inflationary cost pressures, maybe only 1/3 of it does. I can just say from -- you mentioned 2022, 2023, we had a business that was selling roughly the equivalent amount of cans, bottles and ends in 2022 that we'll sell in 2026. We had to sell our Russia business. We lost.

We're finally back to where we were going to be in that year 2022 to 2026. We'll make north of $300 million more this year than we did that year. So that's proof point in my mind that the commercial excellence as well as our operational excellence agenda are delivering on the profit per can.

Ron, is it easier to generate those savings when maybe a couple of years ago, the system wasn't quite as full as it is now. And so now that you're relatively tighter, obviously, you're adding Millersburg, some of that productivity benefit might be tougher to get at? Or "no, George, that's exactly the opposite" because I'm so tight, I can get that much more incremental return from my productivity. How should we think about it if that's a relevant way to look at the dynamics?

I would just say, I'm not sure this is the -- I would look at it this way. because we weren't looking at things in a standard way, and we weren't driving to a common platform there is still low-hanging fruit. There's still low-hanging fruit for us. So it -- we will deliver more productivity when you get to a more rational supply-demand balance. And I think we're more or less there. Last year, we added -- the can market grew 2% in North America, for example. Well, on a $130 million, $140 billion can market, that's an entire can plant. So the market is rational. There wasn't -- there hasn't been a significant amount of investment, but I think we're more or less in balance. And that's when we hit the sweet spot. If you're -- two capacity. It's actually harder to deliver these productivity gains because you're just working so hard and fast to deliver the cans. We want to be in this mid-90s percent range of utilization.

Switching gears maybe to the volume outlook or drivers. You mentioned that you're making labels now for the World Cup or America 250, would you not have been producing them this early? Or is that a pretty good indicator of a little bit of extra demand? And then broadly, how are your customers -- what are your customers saying about what the volume uplift could be from these on a combined basis?

For sure, all I would say is we're planning better with our customers. Like we are very much leaning into them helping us understand what labels they would like us to make for them. So yes, we would likely be making labels well in advance. But I'm excited that we've been making them for several weeks now and both World Cup and 250 and it's exciting. They have great plans in place. And they let us in on some of them, and we're excited about it.

What can we expect there -- two of our major customers -- strategic important customers are the sponsors for the World Cup. But every one of our customers is a sponsor of America's birthday and they're all leaning into that.

So is there an upside to it? Yes, it's certainly a positive. As you know, as we've said, our constraint or our issue is how many cans can we make and produce and ship and sell. So that's really our opportunity is how can we run those plants in the most stable way to get all the cans out that we can. There is certainly upside in North America. And depending on how the rest of the world goes, like there should be.

As I said on the earnings call, I hope Brazil does really well because when Brazil does really well, they like to celebrate together and they'll drink a lot of beer even if it is in the winter time for them.

It sounds like a good thing to be doing. In terms of these events, are your customers without naming specifics, obviously, you wouldn't be able to planning any new product introductions like it would seem like it would be a great opportunity to bring out that next new product brand, flavor around World Cup and the advertising you'd be doing around America 250.

I would say like maybe not necessarily new products. I mean I -- what we see is the labels. And we're excited about like really personalized in terms of like this is a collectible. This is something I would like to have, whether it be a team or something about that calls on the heritage of this country that we live in. That's what I think is pretty exciting for us. People collecting -- or just that excitement around the can.

The other thing I would say is they, for sure, are -- our customers always promote their products at the time of the year when consumers are out buying. The -- what we've heard from them is a desire because there is slightly less inflationary cost pressures is getting back to a more balanced volume and price mix to drive revenue growth for themselves. And we're there to help them do that. So we're excited about not only the labels on the innovation and the collectible aspect of that to celebrate these two major events, but also how they're choosing to promote their packages and their products and our packages.

Ron, Dan, maybe two last questions and we'll wrap it. One of the other producers of another beverage type -- beverage pack type will -- and we respect them frequently, we'll talk about the relative premium and the relative gap of glass versus metal and with aluminum going up and other trends that are happening in their supply chain, that premium that glass traditionally has had narrowing and making glass more competitive. Are you seeing any impact from glass taking share in any of your markets versus cans? Does that concern you? Maybe it hasn't happened, but it's something that your customers say, "Hey, listen, I can get glass or plastic more cheaply these days than aluminum and what can you do for me?" So that's question number one.

Question number two, you mentioned that you are, I think, 90% -- again, to the extent that you know, right, no guarantees in life, utilized sold through -- out through '27, and I want to mischaracterize Help us understand if they're any larger than normal contract renewal periods in the next 3 years that we should be mindful of, say, U.S. or Europe?

So let me -- I'll start, and Dan, please share, but I'll say over the long history, more than a decade the substrate shift moving from other substrates to the can has happened and continues to happen unabated. I mentioned North America, the U.S. specifically, the overall packaged beverage industry was more or less flat last year, the can grew 2%. We grew close to 5%.

So am I worried about a substrate shift? No. Not out of cans. It's not happening and there's no facts that would bear that out. Now we're concerned about the consumer just like everyone is, and all of our customers are. So we want to help our customers. We don't love the price of metal either, but we help them by bringing to life like flexibility. The multipack that we sell, that they sell as it can is really a great value package for a consumer. Sits in the pantry, the shelf life on a can is 12 months. The shelf life on a plastic bottle is 12 weeks. That matters. The can doesn't break in shipping. The can doesn't degrade in the sunlight. Glass does.

So there's a number of reasons why substrates exist for various occasions, et cetera, et cetera. We choose to support our package, and we love the can industry and it continues to win. I just -- I don't spend any time really worrying about shift out of cans and into other substrates. It just hasn't proven to be true.

The only thing to overlay on that is that you specifically called out the U.S., but the reason why the growth rate is higher in the other continents is because there is glass conversion actually coming into cans. And we can't really tell you what's going to happen 5 years from now. But for the next 1 to 2 years, we think that's a pretty good tailwind for us that we'll be able to continue to enjoy.

And on contract renewals?

Nothing out of the ordinary, nothing extraordinary. I would say, I mentioned we do multiyear contracts. And if we're going to invest capital, it's for a long-term contract that will pay for and an investment we're making. And so with a number of our major customers, we have contracts that extend well out into the next decade.

Okay. So -- and you might not want to and we'd understand, but is there a way to frame, okay, we have X amount of our volume up for renewal next year at Y in '28 and so on?

Yes. I would just very, very roughly, we're certainly as I said, in this 90% range for '27, we're north of 50% for '28. In some parts of the world, we're closer to 3/4 sold for '28. So I think we're in pretty good shape.

Yes. Any last questions for Ball Corporation before we wrap up. If not, please join me in thanking Ron Lewis and Dan Rabbitt and Ball Corporation, great presentation, everybody.

Greetings, and welcome to the Ball Corporation Full Year and Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations. Thank you, sir. You may begin.

Good morning, everyone. This is Ball Corporation's conference call regarding the company's full year and fourth quarter 2025 results. During this call, we will reference our fourth quarter 2025 earnings presentation available through this webcast and in our website at investor/ball.com.

The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, other SEC filings and in today's earnings release and earnings presentation. If you do not already have our earnings release, it is available on our website at ball.com.

Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release. In addition, the release includes a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former aerospace business. Prior year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former aerospace business through the sale date of February 16, 2024.

I would now like to turn the call over to our CEO, Ron Lewis.

Thank you, Brandon. Today, I'm joined on our call by Dan Rabbitt, Senior Vice President and Chief Financial Officer. I will provide some brief introductory remarks and discuss full year and fourth quarter 2025 financial performance and our outlook for 2026. Dan will touch on key metrics, and then we'll finish up with closing comments and a question-and-answer session.

With this being my first call as the CEO of Ball Corporation, I would like to take a minute to share my background and our vision for our company. I grew up on a farm in Central Montana working alongside my mom and dad, and that's where I learned the value of hard work, teamwork and treating everyone with dignity and respect, values that define Ball today.

I spent 20 years in the Coca-Cola system, leading supply chains and buying cans from Ball. And over those years, I was asked several times to join Ball, and 6.5 years ago, I did. And since then, I've led our EMEA business, served as our COO and most recently led our global supply chain and operations. I'm honored to step into this role because I believe in Ball.

And I believe Ball is well positioned to win. Not only do I believe this, but the numbers back it up. It starts with the fundamentals of the beverage packaging market. Packaged liquid volume continues to grow globally, [indiscernible] goals. This backdrop creates a long runway of demand for our products. Within that growing market, Ball is outperforming. Across our regions, we are consistently outpacing the can market and shipped volumes supported by strong customer partnerships, innovation and formats and a commercial and operational footprint that is unmatched.

Our long-term volume range remains intact and in 2025, we exceeded it. We pair that commercial momentum with financial strength. In 2025, we delivered record adjusted free cash flow and record comparable diluted EPS. We also returned more than $1.5 billion to shareholders through buybacks and dividends. Our disciplined capital allocation remains rooted in EVA, deploying capital only where it earns returns above our cost of capital. And operationally, we've never been stronger. Our plants are executing at a high level, driving meaningful improvements in profit per can through cost management and standardization.

Our utilization rates across our business are as strong as they have been in multiple years, and our unmatched global scale is a competitive advantage. While we've made meaningful progress, we continue to see significant opportunity for further improvement. That opportunity is energizing our teams and provides additional operating leverage and cost performance upside as we look ahead. When you combine industry tailwinds, commercial outperformance, financial discipline and the operational excellence through our Ball business system, the result is a company that is exceptionally well positioned to win today and over the long term.

As I've met with dozens of customers and investors since assuming my role, I've been asked a lot about what will change. I want to reinforce that our strategy is intact and it is working. It's about executing every day, staying close to our customers, accelerating the substrate shift to aluminum and managing complexity to our advantage, and we are doubling down on profitable growth. This will be a significant focus for us in 2026 and beyond.

We execute our strategy through our operating model, the Ball business system. The Ball business system is simple and powerful. First, are we listening to our customers? Are we their indispensable business partner? Are we the easiest can maker to do business with? You can see that our commercial excellence agenda is working as we're growing faster than the market across all of our regions.

Second is our laser focus on operational excellence. Every shift, every day in 67 plants around the world, we are bringing stability and standardization to our business so that we can all continuously improve. Then we are leveraging these efficiencies and our scale to fuel our growth. This allows us to reinvest back in our business to compete and win in the marketplace.

And purposely, at the center of the Ball business system is our people and our culture. I'm privileged to have the opportunity to drive and lead this company because our culture is one where we are not only focused on what we do, but also how we do it. This is a low ego, high collaboration environment, where we are focused on empowering our people to work shoulder to shoulder to help our customers and our company to win. I believe that the team with the best people and the most motivated people is the team that wins. In short, people matter and leadership matters.

And while the Ball business system is the backbone of our operating model, EVA remains our North Star. It's more than a metric. It's a mindset that ensures disciplined capital allocation and returns above our cost of capital. This focus underpins our long-term algorithm, 10-plus percent annual comparable diluted EPS growth, strong free cash flow and consistent returns to shareholders.

Through the Ball business system and our EVA mindset, we will continue to work as a team to leverage our scale, strengthen customer partnerships and create fuel for growth. These principles position us to deliver sustainable results in 2026 and beyond and maximize value for our shareholders.

Now let me turn to our performance on Slide 8. 2025 was a record year for Ball, reflecting the strength of our strategy and disciplined execution. We delivered strong volume growth across our global aluminum packaging businesses, with fourth quarter global ship volumes up 6% and full year growth of 4.1%. We achieved record earnings per share of $3.57, an increase of 13% from 2024. Adjusted free cash flow reached $956 million, a new high watermark for our company and up 2.4x year-over-year. We returned significant value to shareholders through $1.54 billion of combined share repurchases and dividends.

And we are also pleased to close late last week on the previously announced acquisition of 2 Benepack beverage can facilities. These European plants enhance our regional footprint and strengthen our ability to serve growing customer demand in both the near and long term, while remaining fully aligned with our disciplined EVA-based approach to capital allocation.

Looking ahead to 2026, we expect another strong year where we deliver our financial algorithm of 10-plus percent comparable diluted EPS growth. With that outlook in mind, I'll let Dan walk you through the details of our fourth quarter and full year financial performance and provide more color on our expectations for 2026.

Before I turn it over, I want to congratulate Dan on being named CFO. This was my first leadership decision as CEO, and it was an easy one. Dan's extensive knowledge of Ball and the industry, coupled with his financial expertise and strong leadership, made him the clear choice for this role. Over to you, Dan.

Thank you very much, Ron. Like you, I'm also humbled by and ready for this role. Two important mentors earlier in my career, Ray Seabrook and Scott Morrison, served as Ball's CFO. And I'm honored to sit in the same seat as they did.

Let's walk through our strong full year and fourth quarter 2025 results beginning on Slide 10. Fourth quarter comparable earnings were up 6.8% and full year 2025 increased by 5.6%. And as Ron mentioned, our comparable diluted EPS of $3.57 is a 13% increase and a record for our corporation.

In North and Central America, segment comparable operating earnings increased 12% in the fourth quarter and 3.3% for the full year 2025. High single-digit percent volume growth in the fourth quarter and 4.8% growth for the full year was led by continued strength in energy drinks and nonalcoholic beverages. Our team is executing at a high level, successfully meeting elevated demand, navigating the complexities of Section 232 tariffs and mitigating risk for us and our customers in a volatile environment. We remain vigilant in monitoring the evolving geopolitical landscape and tariff developments, and we are actively managing these dynamics to protect our business and support long-term growth for Ball and our customers.

In 2026, we expect volume to grow at the low end of our long-term 1% to 3% range as we bring new capacity online in Millersburg, Oregon to support contracted growth, we anticipate start-up costs to begin in the back half of the year, consistent with what we've historically seen when commissioning new plants. Additionally, we expect some direct tariff cost in 2026 as we work to domesticate some ends productions in the United States. These costs combined are approximately $35 million in 2026. And while these temporary costs will be a headwind this year, they reflect our commitment to growing and delivering long-term operating leverage.

In EMEA, segment comparable operating earnings increased 36.7% in the fourth quarter and 19% for the full year in 2025. High single-digit volume growth in the fourth quarter and 5.5% growth for the full year is indicative of the favorable demand trends we continue to see across the region. The work our team has done in EMEA is world-class. We are thrilled to add the Benepack assets to our best-in-class European footprint, and we welcome our new colleagues. These 2 plants will give us ample opportunity to grow volumes in the coming years as well as operating leverage as we fill the facilities up with volume. With the Benepack assets, we expect to deliver volume growth above the top end of our long-term 3% to 5% growth range and deliver operating leverage of 2x in 2026.

In South America, segment comparable operating earnings increased 1% in the fourth quarter and 10.5% for the full year 2025. High single-digit percent volume growth in the fourth quarter resulted in 4.2% growth in the full year 2025. Our teams across the region continue to execute well, positioning us for sustained momentum into 2026, where we expect volume growth at the low end of our long-term range of 4% to 6% and operating leverage of 2x.

Across the businesses, our team has done a tremendous job of growing volumes and increasing profitability on a per can basis. Since 2019, our EMEA and North American businesses have expanded profit per can by more than 30%, with EMEA reaching an all-time record. We achieved this through disciplined cost management and operational excellence, focusing on stability, standardization and ensuring every plant is executing at a high level.

I'm proud of the work our team delivered in 2025. This is one of our best years in Ball's history. That strength is reflected across our financials. We achieved record adjusted free cash flow of $956 million, a 2.4x increase year-over-year, and delivered significant shareholder returns. Net debt to EBITDA ended the year at 2.8x in line with our expectations. We are focused on getting net debt to EBITDA to 2.5x in the coming years, while still returning value to shareholders through share repurchases of 4% to 6% of our shares outstanding per year. We purchased $1.32 billion of shares in 2025, reducing shares outstanding to $265 million, a 16% reduction over the past 2 years. Our strong balance sheet, disciplined capital allocation and operational execution give us confidence in our ability to sustain growth and maximize shareholder value. Our future is as bright as any point in my 20-year history at Ball, and we are well positioned to deliver on our commitments in 2026 and beyond.

Focusing on modeling details for 2026. As Ron noted, we expect to be on track with our algorithm of 10% plus comparable diluted EPS growth. We anticipate free cash flow of greater than $900 million in 2026. Our 2026 full year effective tax rate on comparable earnings is expected to be slightly above 23%. Full year 2026 interest expense is expected to be in the range of $320 million. CapEx is expected to be in line with GAAP depreciation and amortization in 2026. Full year 2026 reported adjusted corporate undistributed costs recorded in other nonreportable are expected to be in the range of $160 million. We anticipate year-end 2026 net debt to comparable EBITDA to be around 2.7x, and we will purchase at least $600 million of shares, which will bring our total capital return to shareholders to $800 million in 2026. And last week, Ball's Board declared its quarterly cash dividend.

With that, I'll turn it back to Ron.

Thanks, Dan. 2025 was one of the strongest years in Ball's history. We exceeded long-term volume growth ranges globally, delivered 6% comparable operating earnings growth and achieved 13% EPS growth, in line with our commitments throughout the year. We also marked another year of EVA growth, reflecting disciplined capital allocation and operational efficiency.

Looking ahead to 2026, our focus is clear: leverage our customer partnerships and footprint to grow in line with long-term volume ranges, deliver record volumes, operating earnings and EPS, and continue to ride the global substrate shift to aluminum. We will maintain EVA as our core financial lens, with capital spending aligned to depreciation, growth CapEx backed by long-term agreements and continued cash returns to shareholders. These priorities position Ball to deliver profitable and sustainable growth and maximize shareholder value in 2026 and beyond.

Lastly and most importantly, as we close a record year, let me thank those who made it possible: our customers, our suppliers, our shareholders and our Ball team who make a difference every day. Thank you.

And with that, Christine, we are ready for questions.

[Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird.

Congrats again on your new roles. I look forward to working with you both. For the beverage, North American, Central American segment, the volume growth in 2025 of 4.8%, that really follows 3 consecutive negative years for that segment. How would you disaggregate that improvement between industry growth last year versus the 3 years prior? And then specific initiatives on your end? And also, what are you embedding for volume growth in 2026 for this segment and the other 2 segments as well?

Ghansham, thanks for the question, and thanks for the congratulatory remarks. As it relates to North America volume growth, 2025, we grew 4.8%. And as far as we know, from the published data, the can industry grew about 2%. So the can is growing, which is fantastic, and we are growing faster than the can industry. And I credit that really to all of the customers in our customer portfolio we have that's just really unrivaled. We have excellent customers in every category, be it energy, soft drinks or in the beer category. And those customers, one, and we feel like we help them to win as they drive innovation, but be it a different liquid or different can size, that we have the opportunity to provide for them. So really, it's our unrivaled network, our ability to serve them with different sized packages, different kinds of packages, and we're happy and proud to be a part of their ecosystem.

And then as it relates to the outlook for 2026 for volumes for the 3 segments?

Yes. Thank you for that further follow-up question. In 2026, for North America specifically, quite frankly, we're sold out, and we are a bit capacity constrained until we can get our Millersburg asset up and running. So we think the can industry will continue to grow in a similar low single-digit percent, and we'll be towards the bottom end of our 1% to 3% long-term growth algorithm that we share with you and all of our people that cover us. So that's where we'll be until we get Millersburg up and running.

As it relates to the categories, I really can't speculate too much on where the categories will be this early in the year. But so far, we've -- we started the year really well, and we're happy and we're on plan.

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

Ron, I was wondering if you could talk a little bit more about Benepack and how that fits into the existing European footprint? And anything you can kind of share in terms of customer exposure, can sizes, maybe profitability versus the existing business? And if you could compare it to Florida Can, which was obviously another acquisition.

Sure. Thank you, Anthony, for the question. We're really excited about closing on our Benepack acquisition late last week, which we're announcing here on the call today. And the plants are in Belgium and Hungary where we don't have plants today. So we think this is really a great opportunity for us to plug those 2 facilities into our European manufacturing network, and it really further optimizes our network and supports our long-term volume projections and growing our EVA dollars. We were able to acquire these assets at a really attractive price, certainly, at a price below where replacement costs are. And so we have a great long runway for strong utilization of these plants in the future.

So quite frankly, we were on the top end of our range even before we made this acquisition. So where we say we'll be in the 3% to 5% growth range, we exceeded that in 2025 in EMEA, and we would be towards the top end of that range even before we made this acquisition. So quite frankly, it's a great opportunity for us to lean into some great customer -- some great customers, which are, quite frankly, right in line with our most important strategic customers, that too, who will serve from those assets. And just like Florida Can, we plugged Florida Can in early last year, and it's up and running as a part of our network, 24/7, and we're really, really pleased with that asset as well.

No, no, I was just wondering in terms of sort of profitability, I mean, very roughly, is there a time frame? Are you pretty close to being there or maybe a few quarters? Or just how you think about profitability versus the existing business?

Yes. This acquisition is similar to Florida Can in that we are buying 2 newer facilities that have never run continuously that will require improvement to ramp up. So think of it as we have 2 plants where we'll spend the year really getting the labor and the procedures put in -- operational procedures put in place. This year, we think it's going to do around about 1.7 billion, excuse me, of volumes. And operating earnings, the comparable operatings are really projected to be pretty close to flat. So it's not going to contribute a lot on that. And we really see it as an important part of our 2027 go forward here.

The EVA for this looks terrific though. We're getting it at a very good value that's similar to Florida Can. And we know these markets really well. So from a customer and labor and really optimistic about it.

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

Ron, Dan, congratulations again as well. Look forward to work with you. And also, thanks for the slide deck. It's a nice help here. You mentioned during your press -- during your formal remarks that you want to double down on profitable growth. And certainly, all companies want to do that. Why do you make a point of emphasizing that, given that should be always what you're working on? And related to that point, we appreciate the guidance on the European and South American earnings for next year in terms of the leverage. Given the start-up costs, we appreciate you calling that out, could we see North and Central America actually sort of flattish to down? That wouldn't be a surprise to us, but I just want to sort of put some stakes in the ground there in terms of EBIT growth for 2026.

Okay. Thanks, George, and thanks for the congratulatory remarks. We look forward to working with you as well. Maybe I'll tackle the first question and then we'll take it from there.

Why are we calling out the doubling down on our driving profitable growth? Well, because, quite frankly, we're seeing the growth in our algorithm. Again, our long-term growth algorithm is the 2% to 3% volume growth, and doubling that from an operating leverage perspective, buying back 4% to 6% of our shares, and that gets us to our 10-plus percent EPS. That is our long-term algorithm. We are confident we will deliver that in 2026, the 10-plus percent EPS. But the fact of the matter is we need to really focus on getting to the 2x operating leverage.

So I'm happy to have shared that color with you on the prepared remarks, but our -- that strategy that we're executing, being close to our customers, executing with excellence every day, riding and driving the substrate shift change from other packaging substrates to aluminum, which continues at pace and managing complexity, that's how we're going to deliver that driving profitable growth. It's just -- it's a rallying cry and a focus for our business to really focus on our strategy and how we're going to execute that strategy, and how we're going to execute that strategy is through that Ball business system, our operating model, excellence in execution every day. Every single plant, every single shift. So that's how we're guiding ourselves as well as our EVA mindset.

George, this is Dan. I just wanted to overlay that. We did call out that there's around $35 million of ramp-up cost to get the system -- the North America system, in particular, reconfigured with the ends and then more -- more importantly, the Millersburg plant started up. So I think you are thinking about the North America segment, right, with your -- with how you positioned it.

Dan, appreciate that. Just one follow-on then a question on volume, and I'll turn it over. So in the fourth quarter, again, you're in line, maybe a bit ahead of our numbers, but nonetheless, the leverage wasn't there in North and Central America. Can you comment a bit in terms of whether it was the tariff-related headwinds or something else? What was preventing you from getting that leverage given the volume growth you saw in the fourth quarter in North and Central America.

And then as we look to 2026, I realize it's going to be all of the above. But in particular, whether it's World Cup, mini can, something else in terms of innovation, what -- from an end market or idiosyncratic event for '26 drives the volume outlook and the optimism?

Thank you, George. So for the fourth quarter, we are really proud of our results. We delivered high single-digit volume growth in North America in the fourth quarter, and our operating earnings growth was 12%. So we were sequentially better on an operating leverage perspective in the quarter. It was our strongest volume quarter in the year, and it was our strongest operating leverage quarter in the year. So we did great, and we were just shy of that 2x operating leverage. And yes, the fact of the matter is we had some incremental tariff costs that if it weren't for that, bringing in into the U.S. from across the border, we would have hit our 2x operating leverage. And it's just a very minor amount of money that we missed it by. So that's the first answer.

On the second answer, yes, we're really excited about not only World Cup, and it will depend on who gets to the finals, obviously, and how well each country performs. We're hoping for Brazil to do really well. And I can hope for America to do really well, but if they don't, let's hope for maybe England or Germany to do well.

And I don't think we should forget that this is America's 250th birthday. There are going to be an amazing amount of celebrations throughout the summer coming. And I can imagine that will also be, at the very least neutral, and I bet it will be slightly positive for all of us that sell beverages or help to sell beverages in the U.S. Thank you, George.

Christine, do you have another question for us?

Jeffrey, your line is live. Perhaps you're on mute?

Natural gas prices in Europe have sharply elevated. Is this something that you can easily pass through in the coming 6 months?

The answer is yes. We are broadly a pass-through business. Our contracts allow for us to pass through inflationary cost pressures. And we also -- where we can have the ability to hedge our gas pricing, which to the extent that we can do that in any given country or a plant we do. So we don't view that as any major headwind for us in 2026.

Are you experiencing any inflation in beverage can coatings? Or is that raw material relatively flat for you?

We have a long-term contract of all of our input costs, including beverage can coatings, and there are inflationary mechanisms in those -- or deflationary mechanisms in those contracts, but it's all very manageable. And again, this is all part of our -- both of our buying and selling contractual relationships where we largely pass on all of those costs. There could be some timing issues here and there, but we pass on these costs.

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

Again, congrats on the new roles, guys. In terms of Europe, like your operating leverage there was extremely high. I mean, as you say, 37% profit up on high single-digit volume growth. But can you talk about like what drove that big jump? And how should we think of that leverage in 2026?

Thank you for the question, Edlain. I appreciate your congratulatory remarks as well. Yes, we're really proud of our European business. It has been an incredibly stable business for us for many years, and it continues to be a land of opportunity for us. Can penetration is relatively low in some categories, and that's why we continue to see us and others achieving the high end of the range from a volume perspective. So while we grew above algorithm in the year, more than 5%, we intend to do that again this year, especially with the acquisition of our business now that's a part of our Benepack.

As it relates to 2026 and operating leverage, all I can say is when we have the capacity, which we have, and we grow into that capacity, that's when you see real operating leverage, and that's what we've got. We've got -- we had some capacity to grow into in Europe. We did that in 2025. That helped us to deliver the amazing operating leverage. We used up our capacity even faster than we intended, and that's why we're buying these Benepack can plants. So you can expect us to deliver at least the 2x operating leverage on the volume that we will sell in Europe in 2026.

Okay. Great. And also, Ron, I mean, now that you are the CEO, should we expect any change or deviation in strategy at Ball? Like what's your primary -- what's your big focus? And anything you plan on doing differently?

Yes. Thank you for the question. So the great news is -- and I said this in our prepared remarks, but our strategy is intact, and it is working. Again, it's about excellence in execution, every shift, every day in all 67 plants we have around the world. It's about staying close to our customers and really helping them to win by solving big opportunities for them. We continue to see the overall aluminum can industry grow, and that will continue at pace. And we have the most enviable network, and we have the most enviable SKUs and portfolio of cans to offer to our customers. So that strategy isn't changing.

What we are doubling down on, again is how can we operate even more effectively so that we can squeeze out the fuel to grow our business through our Ball business system and our operational excellence journey and our commercial excellence journey. So that's really what you should see from us is a maniacal focus on just running our business extremely well.

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

Congrats on the new roles as well. So I guess -- I just wanted to get your thoughts on -- you mentioned tariffs in the prepared remarks. So I guess, how are you managing through that? And then also, the rising aluminum price environment, what are your customers saying there? I know it's a pass-through in North America for you, but obviously, at some point, they're going to have to raise prices or deal with that in some way. So I guess, what are you hearing on those 2 fronts?

Thank you, Arun, and thanks for your congrats. We're really proud to be and humbled to be in these roles, and we're really proud of the results we've delivered in 2025.

Tariffs are certainly something that every company is monitoring. But as we sit here today, like there's no direct impact from -- on our business beyond the ins piece that we've mentioned, and it is a pass-through, as you say. The where it shows up for us is in the Midwest premium. That's what has really spiked for all of the aluminum industry. So we're watching this. But so far, the U.S. consumer has been able to continue to keep buying our package. The can, as we said, in 2025 in the U.S., grew at roughly 2%, where all other substrates declined by more than 2%. And so the can is a value in any sort of economic environment, and that's what we're hearing from our customers. They're continuing to lean into selling multipacks of cans because it represents real value for the consumer.

Okay. And if I could just ask a follow-up on the category mix. So obviously, energy had a really strong '25, and I think you saw growth in some of your other verticals as well. But maybe you can kind of give us your thoughts on how you face those tough comps. I know you're sold out in North America, but do you see the energy market kind of continuing to outpace the rest of the can market? And what do you kind of see for beer and CSD and some of the other categories as well?

Thanks, Arun. We love all our customers, and we're focused on helping them to win regardless of category. And the other thing I think it's important to know here is all of our customers are -- it's blending and turning into much more of a total beverage company. You hear that from all of our customers regardless of where they began.

As it relates to energy specifically, we continue to see innovation. We continue to see different can sizes. We continue to see a shift to functional elements of those products, and -- you name it. So I expect that -- they've been winning for a long time, and we expect them to continue to keep winning, and we're really happy to keep supporting them.

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

I'll just echo what everybody else has said, and congrats, Ron and Dan, on the roles. My first question is, to the extent you can comment, can you talk about any potential changes in customer relationships, business wins the company has experienced, really as a result of the recent management changes and going back to basics with the customer?

Thanks for the question, Mike. I appreciate your comment. Look, I'm really -- we've said we want to focus on supporting our customers and helping them to win, and we're really happy with that. And I've had amazing customer interactions before I had this role, and even more so now, it's -- one of the funnest parts of this job is learning about their businesses.

The other thing I think it's important to know is like not only are we kind of sold out in 2026, we are well contracted into 2027, and in some cases, with our strategic customers out into the next decade. So we're really pleased with our long-term strategic partnerships with our anchor customers.

Got it. And then just one quick follow-up. Regarding the Ball business system, how much of the $500 million in savings have you realized thus far? I know are you still on track to complete that by year-end -- 1 year earlier than you initially targeted. And have you basically -- it sounds like you've standardized operating practices across your plants globally, but I just want to confirm that, that's what has been accomplished thus far.

Thank you, Mike. That's a question that's near and dear to my heart. We will deliver the $500 million of cost savings that we projected that is the fuel for growth for our business in the 3-year time frame versus the 4-year time frame. So that was 2024, 2025 and 2026. So more than 2/3 of it has been delivered, quite frankly, more like 3/4 of it has been delivered in the first 2 years.

But we're not going to stop there. We're going to keep working as again, as a part of us focusing on getting our operating leverage. That means we have to run even better, and that's what our 67 plants and the overwhelming majority of the people that work in this business are focused on. So yes, every single one of those plants has rolled out the Ball operational excellence platform, and it's really exciting for us, and that's really energizing for us. So maybe someday, we'd love to take you to a plant and show it to you, Mike.

I'll definitely take you up on that offer, Ron.

Go to Rome, Georgia. Let's go.

Our next question comes from the line of Stefan Diaz with Morgan Stanley.

Congrats on the promotions, and looking forward to working together. Can you please talk to the year-to-date trends across all regions? And then maybe specifically in North America, has the winter storm at all helped some of the volumes here early in the year?

Stefan, thanks for your comments, and we appreciate reading your material. Thank you for it. Honestly, the year -- the first month of the year, it started as planned, more or less across all the regions, small puts and takes here and there, but generally as planned.

North America, you see the -- you published the data this morning. So I could read back to you what you published, but it's really, really quite good. And I wouldn't say anything other than it's a good start to the year, and it's kind of as we planned, and better to start the year this way than in a hole, and it's pretty good. So we appreciate it. We'll go from there.

Great. And then does -- I guess, does ABI repurchasing their stake in metal container corp mean anything to the industry? And maybe just thinking -- taking a step back, what are the chances that brewers and beverage CPGs start to backward integrate a bit?

Yes. That's honestly, them buying back their portion of their vertical really has no impact on the -- on us or the industry because that capacity was there before, and we're really happy that they did that, quite frankly, and they're a great customer, and we work with them very closely. So it really doesn't have any impact, and it was sort of a nonevent. And they kept us informed all along the way what their plans were. So we're really happy with them as a customer, and we're really happy with them and working with them.

As it relates to backward integration, quite frankly, I don't think anybody is really focused on that or we see any of our customers wanting to deploy their capital to expand massively the desire to make cans. I think they're really focused on innovating and marketing and selling their products. And hopefully, they're relying on us as a great supply partner to them.

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

Ron, Dan, congratulations on the role. And Ron, your tone and excitement is clear to everyone on this call. There's a lot of mention around EVA and staying close to customer and just doubling down the execution side of things. You certainly have had your hand on the operations front and been successful. But what are some of the tangible things that you want to share with us in terms of what that actually means in terms of doubling down on costs. Are you retooling the layers in the organization, reshuffling leadership, realigning incentive comp? Like what are you doing? Just give us like 1 or 2 examples on the cost and execution front, how you guys are going to approach it perhaps a little differently and then getting closer to the customer.

Thanks, Phil. Appreciate the congratulatory comments, and I look forward to working with you as well. I appreciate reading your material.

Look, in my first 90 days in this job, I certainly have had top-to-top conversations with the top of the leadership of all of our major customers. So I would say certainly more than 75% of what we sell, I have either met with in person or had extensive conversations with. And that, as I said, is really exciting for us.

Now what does it mean as it relates to how are we going to -- how are we going to run our business better? It starts first with like being really disciplined and reputable manufacturing fundamentals in our plants. Second, how do we leverage our network more efficiently so that we have production closer to demand? That's what Millersburg is about. That's what buying these 2 assets from Benepack is about. And then we're going to be really deliberate about how we run those plants and how we flex capacity. The third thing is our operating model is at the very core about our people, and the culture and the people of this business are what make a difference for us.

So you wanted some -- a specific example. In every single fall plant everywhere around the world, at 6:00 a.m., at 8:30 a.m., at 1:00 p.m. and then do the opposite of that because we're on 12-hour shifts. We have a shift handover meeting. We have an operations meeting, and then we have a pulse check meeting. And our entire leadership team got to witness that last week when we went to one of our plants, and it's really impressive and inspiring to see.

Our goal is to keep reinvesting in our business. That's what Florida Can was about. That's what Millersburg is about, that's what Benepack is about because when we're making those investments, we are committing to return higher than what we can get in our EVA model. And that's how we become a serial compounder and just continue to generate cash and then allocate that to the right places in our business.

Super. Great color. Back to old school Ball ways in terms of EVA. So that's great to hear.

I had a question for Dan. I think last quarter, perhaps maybe I misinterpreted, but I think there was some commentary perhaps that the operating leverage of that North America business could perhaps improve in the back half of 2026 and put you guys in a really good position for 2027. Do I have that right? In some of the commentary today, I thought you kind of pointed to start-up costs perhaps more back half weighted in '26. So is that perhaps a pushout on the timing side of things? And then I think you mentioned there's some can in dynamics in Mexico around tariffs, you're going to reshuffle capacity. Can you give us a little more color on the timing of that and what that could transpire to in terms of profitability?

Sure. I'd be happy to. We do see more of the start-up costs really being in the back half of the year. So I think you said it right in your question. And it does really become an opportunity to start to show improvement in 2027 for the operating leverage.

As far as the question about tariffs, really, the thing we might have called out is that we are moving in production, some smaller amounts of in production out of Mexico into the United States, a lot of that is happening in the first half of the year, but the Millersburg is the bigger contributor to the headwinds that we're talking about.

Okay. Helpful. And just one last quick one. On the Latin America Brazil side, certainly excitement around the World Cup. But Ron, any on-the-ground color in terms of what you're seeing there in terms of your customers and then any shifts in consumers just given in past cycles when the macro is a little more choppy, there might be some trade down to [ resealable ] glass. I'm just curious what you're seeing on that front.

Thanks, Phil. For sure -- we grew high single digits in the quarter. And in 2025, we delivered on the low end, but we delivered on our volume algorithm in South America, and we delivered more than the 2x operating leverage. And we intend to have confidence in and plan to deliver exactly the same in 2026. We'll deliver in that 4% to 6% volume range. And we'll deliver on the 2x operating leverage at a minimum. It's early days to know how big it will be, but we're excited about it and the consumers are excited about it. We're going to get a chance to go see our colleagues there in a couple of weeks and learn more, but we're really hopeful for a great tournament.

Our next question comes from the line of Matt Roberts with Raymond James.

Ron, Dan, Brandon, I'll echo everyone else's positive sentiment on the roles, congratulations. Dan, if I may, somewhat related to Phil's prior question, can you parse out -- I believe you called $35 million cost headwind. Is that still [ 10 to 15 ] in first half from the tariffs and the remainder from Millersburg in second half? Or any changes on the ends cost impact? Additionally, any other considerations for [ calls ] in '26 from PPI resets?

And lastly, in EMEA, as Benepack ramps, should that operating leverage improve sequentially throughout the year? Or any timing considerations on when you expect to get that full can benefit from Benepack?

Sure. Thank you, Matt. As far as the $35 million, I think it's safer to think of more of that in the back half of this year and then really setting us up nicely for the following year in North America.

And I would say that the EMEA question regarding Benepack is similar in many regards. We just closed on it. We're setting. We were competitors. So really, the work starts now. And so I think you're going to see a back half kind of ramp up and it really more about next year as well. So they both look very similar to me in many respects.

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

It's Anojja Shah sitting in for Josh. I just wanted to ask about capital deployment in 2026. You are pretty clear about share repurchases and dividends. But are there any other priorities besides capital return with maybe more bolt-on M&A in one of the regions?

Yes. Well, let's just start and talk about the -- how we filter everything. We're filtering all of our opportunities with our cash flow and investments through the EVA lens, first of all. This is a year where we're we really are balancing all of our levers, we're building a new plant out. We are still going to continue to buy back shares. We made the investment in Benepack. And really, with all of that, we're going to keep our leverage and even bring it down a little bit as the guide down to 2.7x. So we're looking at all the levers always, always while looking at what's the best EVA returns. And right now, we see opportunity in all of them.

Christine, we'll take one more question, if you don't mind.

Our final question comes from the line of Gabe Hajde with Wells Fargo.

Ron, Dan, congrats. Trying to get a little surgical on North America. I'm trying to reconcile kind of the commentary low-end growth of the 1% to 3% target, and we're coming off of 4.8. First question is the Florida Can acquisition, is that 4.8 an organic number? Or would we say half was kind of from Florida Can and half was organic?

And then did we see any evidence or have you seen any evidence of pull forward by customers? We've asked since in the past, I recognize it's not customary for customers to inventory cans, but it's also not customary for aluminum cost to be up 30%, 40%.

And then, I guess, to be clear on kind of the guide for '26 and [ MACA ], are you taking into account any benefit from World Cup and recovery in beer? Could you tap into maybe any sort of latent capacity in south of the border to service that, if possible?

Thanks for the question. So Florida Can, as it relates to the volume in 2025, there was a small element of that, that was Florida Can of the 4.8%. That's for sure. That's not all the organic number. But it was not immaterial, but it was relatively small.

Did we see any pull forward in 2025 in Q4? No, is the answer. And you can see it in the -- I guess you can see it in the published data, the can market continues to grow in the first month of the year, and we're no different than that. We're seeing kind of on plan what we expected.

And I just think -- the opportunity south of the border, given the amount of tariffs, the cost of bringing those cans into the U.S. is so prohibitive that -- I don't really see that as an opportunity for us. And that's why, quite frankly, we've given you the lower end of our volume range because we absorbed all of the latent capacity for the most part that we had in North America in the U.S. anyway in 2025 with the 4.8% growth. We're really happy that we bought Florida Can because it allowed us to grow that much, and Millersburg will make a big difference. So until we get that up and running, we're a bit capacity constrained. So thanks for that question.

Real quick follow-up, Ron. The contribution from the Oregon facility, if it's sort of operational midyear. I'm assuming we're kind of counting on maybe 2 billion units-ish, which would equate to about 4%. Are we really talking about, again, taking into account the start-up cost contribution coming in '27? And it was -- one of the other analysts said that kind of puts us out there. But is it possible then kind of operating earnings is flattish in North Central America and then we see a pretty big acceleration in '27?

Yes, I think you're thinking about it the right way. The volume will be relatively immaterial in 2026 with the start-up and the earnings as well that we won't have earnings. In fact, we have the start-up costs.

The only thing I would say is it's a one-line plant. It's not a 2-line plant. So you could expect more like 1 billion cans out of that facility until we really ramp into it. And that would be actually probably aspirational in 2027. Let's see how we started up. So thanks for the question.

And Christine, I think that's all the questions we have time for today. So I just want to thank everybody for your interest in us. We appreciate it. We look forward to talking to you more, sharing our story. We are excited about what we did in 2025, and we're even more excited about what we're going to do in 2026 and beyond. So our -- 2026 and beyond. So thank you very much for your time, and look forward to seeing you and talking to you soon.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Okay. Good morning, everybody. Thanks for joining us on day 3 of our conference. My name is Ghansham Panjabi. So I cover packaging and materials for Baird on the equity research side. The next presenter will be Ball Corporation.

From Ball, we have 2 gentlemen that have had quite a week, a lot of news. So it's a pleasure to introduce Ron Lewis, announced CEO earlier this week. Ron has been at the company since 2019, prior at Coca-Cola Pacific, right, in Europe. We also have Dan Rabbitt, who also was announced as CFO earlier this week, and he's been at the company since 2004, if I have that correctly, right? So welcome, first off. Congratulations on the announcement this morning.

Thank you.

I want to have you introduce the company, but maybe we'll start with the elephant in the room.

Absolutely.

Are the Broncos for real?

100%.

100%. They're going to kill the Chiefs.

I have the chief standing next to me here, so.

We'll start with the question about -- certainly from our end, I covered the stock for 26 years, Ball always has had a very special culture over that time. Transitions were well telegraphed and so on and so forth. So this week's news was a surprise, and I'd love to get your perspective in terms of what happened.

Certainly. So it's been definitely a whirlwind week on Monday. I was sitting at a roundtable that I'm sure you've seen when you visited us and conversing with a few of our former CEOs, Dave Hoover and John Hayes. And they were offer congratulations and of course, advice and this table is the same table as they set at. So it definitely harkens back to our past and our history.

And I say that because I know that table, they sat at because it came from Muncie, Indiana when we moved and they came from Muncie. It was in our office there. And I appreciate the chance to talk about Ball from my perspective. I joined, as you said, in 2019, but I have been a customer for more than 20 years in the Coca-Cola system.

So you've been covering for 26 years. I've certainly been involved for more than 26 years. It is a bit surreal, but -- and it's a humbling experience because of the people that came before. But I'm ready for this opportunity. I've been preparing this for many, many, many years and many, many different roles.

All the way back to my childhood, one of the things I love about Ball and our culture is we have 5,000 people that wake up every single morning or every single night and go to work running a shift. And I grew up on a farm in Central Montana with my dad and working there shoulder to shoulder with him.

I learned the value of hard work. I learned the value of teamwork working shoulder to shoulder with him. He taught me integrity, and he taught me to treat everybody with dignity and respect, whether it was the mayor in town or the grain elevator operator or we took our grain to market. And I think Ball is very similar in terms of that culture, respecting the virtue and the value of hard work. We got a lot of people who work hard for us, so I work hard for them.

So that's sort of the background. I joined in our Europe business. I led our global beverage packaging business about 18 months ago when we created a new operating model, I was asked to lead our supply chain and operations. And as I said, prior to that, I spent 20 years in the Coca-Cola system. Respecting the model, I was asked to lead our supply chain and operations. And as I said, prior to that, I spent 20 years in the Coca-Cola system, leading supply chains, buying cans from Ball. And prior to that, I worked at Cargill and Mars Incorporated. I mentioned that I'm humbled and definitely, I'm honored, but I'm also ready and I'm ready because this is not a turnaround situation. This is not a house is on fire. We have an excellent strategy that's working. You can see it in our volume growth. And the strategy is really it harkens back again to our past.

We are excellent allocators of capital. Our EVA mindset is still intact, and it will always remain intact in this company, but really focused on 4 things. One is, are we enabling excellent execution every day. Second is are we ensuring that we're close to our customers literally physically with our footprint, which is unrivaled. Three is, can we continue to drive and ride this wave of packaging substrate shift because the aluminum is the best packaging substrate. And then fourth is the world is very volatile. How can we act nimbly in this complex world?

That's our strategy and we're executing it very well, and we're winning with it. You can see it in our results, which are at record levels. So I'm proud of that. We're not a turnaround. We are not a house on fire. We are grounded and we are anchoring down on that strategy.

Now the platform that we're using, you can see on the slide behind me is what we call our Ball business system. And it's pretty simple and it's pretty easy to explain and understand which I like. First is, are we listening to our customers. Are we there indispensable business partner? Are we the easiest can maker to do business with? Are we the friendliest can maker to do business with because -- and then that's showing up. You can see it in our volume growth this year, more than 4% year-on-year.

Now the other side of this equation is our operational excellence agenda. Every shift, every day, 66 plants around the world, how are we bringing stability standardization to our business so that we can all continuously improve -- and then ultimately, how are we bringing scale to our business. And that's that we call our fuel for growth that we can reinvest back in our business to compete in the marketplace.

Now what we don't talk about as much is the middle of this, which is our people and our culture. I'm privileged to have the opportunity to drive and lead this company because of the culture of this company. It is a low ego, high collaboration environment. This is a day in, day out, penny business. So we are focused on creating a team sport that is a full contact sport.

It's not -- we're not living in silos. That's what is really important to me. And the Board has given us full support. Our management team gets to the 16,000 people. They've given us their full support, and we have a deep bench. I hope to think I'm an example of that. And the gentleman sitting next to my right is he's the first people decision that I got a chance to make when I was asked by the Board. Should we remove this interim title from Dan's CFO title? And I said 100%, yes. And I said that in knowing I have the full backing of the team that I get the privilege to lead now, So Dan, do you want to say a few words?

I would have to say that for me, the people that we've -- that you mentioned before, the former CEOs and in my case, my biggest mentors were the CFOs of Ray Seabrook and Scott Morris in the days gone by. And they were really very strong teachers of our culture. And that is the things that Ron reinforced there really about how you treat the people and in our case, our employee base, the people in the room, our customers and such and really keep a balanced life was really reinstilled by those guys in me and really have been great teachers to me to get to this position.

So I'm thankful for that. The other part of culture, though, that I need to reinforce is EVA. EVA has always been really a strong part of our culture. That meant we've always had a pretty good financial acumen at the lowest levels of the company, largely because of the EVA culture that we have ingrained in the company. I think what we tried to do recently was break it down a little better for all of the employees to better figure out how that they can fit in on the EVA, and that's kind of the financial algorithm that we talked to you all about.

We've got to grow our sales. We've got targets out there to grow the enterprise at 2% to 3%. We've got to grow our operating earnings at twice the rate of our sales. We've got to grow our earnings per share 10% to 15% per year. And then we really got to maximize free cash flow, looking at something along the lines of our -- equating to our net income. And that's a core part of our culture, though, is the main thing that I would put in there. So I'll turn it back.

Okay. Yes, good answer. Thank you. So you're on track from an investment community standpoint, you're on track after a volatile path for record earnings this year, right, using our estimates, which we hope are correct. Your stock price is less than 50% what it was back in 2021 at the previous high watermark. Is the message here that we're going back to the basics in terms of culture? Is that what's driving these changes? Over the last 7 months, you've seen a CFO change. We've seen a CEO change in context of what I just said in terms of earnings.

Let me start, and if you could add something, Dan, please. I would say the Board of Directors of our company definitely want to see a return to the way Ball was. That's a message that's very clear to us and that means being an excellent allocator of capital. It means delivering EVA dollars. It means treating people with dignity and respect.

It means this high-touch collaboration environment. And those are all the things that I believe in that I've lived my entire life by. So yes, I think so. And we can control what we can control. Our job is to meet or beat the market and to be sure that we're delivering operating leverage in our business. Dan, what would you add?

Well, what I would add is -- there's this old adage of bleeds Ball blue. And that really was meant to say we have a strong culture and color is blue. It's the color you see up on the screen right now. But I would add that with the Chairman, Stuart Taylor, this is a guy that's been around our company probably since the mid-'90s and on our Board since 1999, and he was put in this Chairman role because this is a guy that really is a great example of our culture. And so he's playing a more prevalent role also to reinforce the need to really bring our culture back to the forefront of how we do things.

So we have that in common, Baird blue as well.

Absolutely. People have to check the pantone to make sure they match.

Last year, you had an Analyst Day in New York, was 2024. You outlined 2030 targets. You're 4 days does the job, right?

Yes.

How would you have a think about those?

Yes, absolutely. I would say we are -- I'll let you do the numbers in detail, but we are on track for sure, this year, maybe even a little ahead this year. And our long-term algorithm is fully in shape about volume growth and delivering operating leverage, returning cash to shareholders and allocating our capital wisely. I feel very strongly about that. I feel very good about that. We are -- we see a very stable outlook in my mind and a strong, good, solid growth outlook for the future. Dan, what do you want to add?

Just what I would overlay is those -- the financial algorithm that we talked a few minutes ago really was compounded out to the year 2030. And I think it had things like EPS of $5.80 a share, if I remember right, by 2030 and over $1 billion, maybe $1.3 billion of free cash flow. All that still looks very possible. And we believe that we're on a good trajectory, to get to those numbers and stuff. So very much what we said a year ago, we think, is still really achievable at this point in time.

Ron, you were a big part of that presentation in terms of the operational component, right? I think it was $0.5 billion of gross savings by -- was it 2027?

End of 2026.

End of 2027. How is that going? How are we doing?

Yes. So that's the right-hand side of this slide as you look at it, the operational excellence. We committed to a $500 million productivity target over a 4-year period, '24, '25, '26 and '27. The good news is we will deliver that a year early by the end of 2026. We're well ahead of that. And we continue to fill this pipeline of value, what we call our fuel for growth and that's the scale.

We need to be back to our business to compete in the marketplace because there are plenty of headwinds. are headwinds all around. We see them, but that's how we're bringing resilience in that grit and determination to our business, how can we deliver productivity. So good news, we're ahead by a year.

And it's things like every single plant everywhere around the world at 5:30 a.m. and 5:30 p.m., there's a shift handover where the person that's running the body maker or the cupper or the decorator meets with a person that's going to be doing that job for the next 12 hours. Then at 6:00 a.m., the supervisors meet and then there's lead team meetings. And then at 8:00 a.m., we have an operational handover meeting.

Dan and I had a chance to participate in one of those meetings recently in one of our plants. This is where we create value for our customers. So that's about a rising tide lifts all boats. And there are other bigger transformational things that we can do in our business. There's still plenty of opportunities for us, which I'm excited about. And we're hunting for those opportunities so that we can compete in the marketplace.

The only thing I would overlay is I don't think in my 21 years of Ball have seen us execute across the board as well as we are right now. The way we're going to market and selling the product, the way we're making the product, the way we're managing the entire cost structure and the corporate office all the way down to the plant floor, it's the best it's ever been, and it's great to have this behind us in this up here. So we're up here with strength because of the people in the company right now and how they're performing.

Should we get to some harder questions?

Please.

In terms of operating leverage this year, that was an issue on 2Q, less of an issue in 3Q, but this is the best year for the beverage can industry in North America since COVID after declines in between and so on. In context of what you just said in terms of the operational excellence, why haven't we seen the operating leverage the way we should have?

You want to take that one first?

Sure. I think the operating leverage is the metric of 2x the volume growth. And I would say a couple of things. For one, getting 2x operating leverage every quarter, every business unit is not a realistic expectation. It's going to ebb and flow. And we're seeing a couple of our business units clearly doing that this year. And I think the one you're referencing really is the North American beverage can business and it is a little under.

I would say specific to that, the amount of growth that we're having this year was unexpected and is somewhat unheard of. To be growing your North American beverage can business, close to 5% of the top line through these first 9 months is really one of the best performances I've ever seen there. We're overwhelmed by that growth. It's coming in all at one time.

We have a great opportunity to rationalize that and harvest profit, especially as we put next year's budget together in the year thereafter is financial plan. So a lot of times, the volume comes in first, especially at that level, and you were able to get the profit to come in later is one way to look at it.

So one of the questions we get from investors is the sustainability of the growth. You guys have been outperforming, the industry is up a little bit this year, not tremendously, but up a little bit. The consumer is going through its affordability issues and sequentially getting worse and so on and so forth. What's your view in terms of the growth rates for the industry in North America that will go to the other regions?

Okay. Let me try to tackle that one. Firstly, what we can control is making sure that the customers that we desperately would like to serve, come to us first. So we have, in my mind, an unrivaled customer portfolio.

The second thing is we are the best contractual commitments from those customers and others as I've ever seen. So we are fully contracted to the extent we need to be across all of our regions, certainly for next year and then beyond. So we're in really good shape from that perspective.

Then the other thing, I think, as Dan mentioned, we need to do is be sure that we're -- again, I've mentioned this agile and nimble enough to meet the needs of the market. We are adding capacity, specifically in North America, with a new plant that we will have up and running in the middle of next year. And as we do that, we'll be able to repatriate volume to that plant where we're shipping in from outside of the natural orbit of where we would ship from, so that will help our operating earnings as well.

So as we bring capacity on, we're able to grow into the volume that we've got. As we said like 4% to 5% volume growth in North America is not normal. It's not what we would normally expect. And how will the market grow next year, specifically in North America? What I can say is our customers are very committed to growth, obviously, and they'll do whatever they can to support that.

I think -- I don't know how this will manifest, but I was really excited to hear in the soft drink category, for example, one of the major players has decided to launch the 7.5-ounce mini can and convenience retail. And they're doing that because of a consumer need state where they want to have an offering when somebody comes to get their gas, they can walk in the store and buy something for significantly less than that 20-ounce plastic bottle. I think they're going to price it around $1.39 or something like this.

So let's see how that goes, but we're very much a part and parcel of helping them to deliver that offering in a specific channel at a different price point that they believe won't cannibalize the rest of their business.

And if I could overlay the specifics, just to summarize this, though, the way we're looking at next year is the same way we've been talking to the investor community about how to look at the regions, 1% to 3% growth in North America. We think that's a good look at the market, and that's consistent with how we've always forecasted that market. 3% to 5% in Europe.

That's how we've been forecasting that. We think that's very achievable. And then when you look at the 4% to 6% in South America, obviously, there's more volatility in that region than anywhere we operate, but we still think that's the right way to look at that market as well. So I think the way we've been guiding people is the right way to think about next year.

And by the way, [email protected] or you could just raise your hand if you have any questions. Maybe we can switch to Europe in terms of -- that region has been growing for probably 24 out of the 26 years I've covered the company. It's been fantastic. What are the drivers more recently there?

For me, first of all, Europe is an incredibly exciting place. I call it the land of opportunity. I've been using that since I joined Ball because can penetration is so low in certain categories as opposed to North America. So we're benefiting from a continued shift out of other substrates into cans, specifically in the beer category. And to some extent, in the soft drink category as a shift out of plastic and into cans. I think just like in the U.S. with the price of a cup of coffee, these products, energy drinks are taking some of that share.

So we are again, have an unrivaled customer portfolio that allows us to win in the energy category as it grows. We've added capacity there. We talked about how we're not achieving the operating leverage in North America. It's because we don't have the capacity in the right place. We added capacity in Europe, and that's what we're growing into now. And you can see that in our operating leverage. So I think we're a little ahead in Europe versus what the long-term growth algorithm is. And I think we see continued strength there. Dan, what would you add about Europe?

I mean Europe really is a bright spot. The can is winning in all of our markets, first of all, but in Europe, the growth is accelerating because of the pack mix of plastic and glass more rapidly converting into cans, which is great. And I think we're optimistic that will remain intact for several years to come anyways.

In terms of sustainability, the overlay between North America and Europe, how would you -- have there been any changes as it relates to those -- that dynamic?

I would say they're certainly in Europe, the emphasis on achieving sustainability is a little higher than in North America. And you can just open up a newspaper or click on a news link on your phone. So we continue to see that as a real tailwind for us in Europe. Of course, we have to be competitive. This package has to compete versus other packages.

But there's a number of things from not only a carbon footprint, wanting to achieve a net 0 carbon footprint. I would say the emphasis is stronger in Europe, and we like that. We lean into that because we have a great story to tell there. It isn't that it isn't important in the U.S. It's just with the consumer as stretched as they are here for sure, everyone is looking for value.

The other overlay really to bring it back to this country, though, is that there's no country innovating beverage more than we are. The new products that come out in this country every year is just amazing. More often than not, they're coming out in the can and I think there's a component of they don't want to take a chance on the package from the recyclability of our can and how much recycled content and what that does to lowering your carbon footprint. It's not at the front of the discussion right now, but I still think it's behind the scenes here driving a lot of the choices. New products are coming in cans now.

Switch to Latin America. Some of the dynamics there you'd like to highlight.

Well, I'm really pleased with our performance in Latin America. And again, it's because of our unrivaled customer portfolio. We are winning with the winners, and we are going to work hard to keep doing that with them. We also have a better footprint in Latin America than in South America than anywhere else, any of our competitors.

We're the only can maker in Argentina. We're the only can maker in Chile. We're the only can maker in Paraguay backed up with an amazing footprint in Brazil. So it's volatile and we like to deal with that volatility. We've managed through it quite well. I continue to see. It's been -- the weather hasn't been great the last few months there. We'll see how the summer goes, but we're prepared for a really great summer, and we're excited about -- we're going to grow right in with our growth algorithm this year and we plan to do the same next year. What would you add, Dan?

Not a whole lot. I think it is just worth maybe bragging a little bit on success down there in that we had 3.5% growth in the last quarter, and the industry was down 14%. Largely, it's differentiated by the fact that the portfolio just said, having that footprint that really gives us a more diversified portfolio to work from down there.

If we switch back to North America, one of the dynamics that I think you've been impacted with, both positive and negatively, has been share shifts in the industry over the last few years. What drove that? And just comment on your share position on a go-forward basis.

What I can say is going forward with our customer footprint portfolio as well as the capacity that we're bringing online, that puts us with a right to win with certain customers in certain geographies. Again, we're very confident in the growth that we're going to achieve in North America and that's because of the customers we have. I really -- I think that's about all I want to say there. I don't know, Dan, what would you add?

I don't think there is much more to say. We've got a handful of customers that we are their go-to growth partners, and it's quite an honor to have that. And it's a big responsibility that we take seriously.

Okay. In the last 4 minutes or so we have, maybe we can focus on capital allocation. I think there's a lot of fatigue at the investment community level about CapEx, and there's a lot of cringey moments when a company in the can industry has announced capacity more recently. You guys have announced some capacity increases, I think, in Oregon and the Carolinas, right? What's different in terms of capital allocation specific to growth capital versus perhaps the heyday of 2020 and 2021?

Can I say a few words and you will? This is more in this space, but I would say we don't put capital in the ground unless we have a long-term offtake agreement. So any money we spend for growth CapEx is backed by solid volume and contracts with really premium customers. So that's the first thing. And then we build that capacity and grow into it when it's right, when the timing is right.

So we announced things that then come online quite a bit later. We are focused on our capital spending to be right in line with our depreciation and amortization. So again, the heydays, we're going to be very disciplined about allocating that capital. We're usually 2/3, 1/3 growth versus maintenance CapEx and we're going to maintain that. So our D&A is around $600 million. So we're not going to spend more than that.

We've indicated that last year. We are not going to spend more than that this year. In fact, we're underspent a bit both of those years. realizing that we do need to have some lumpiness in when we add this capital because building a can plant is quite expensive. So what would you add?

Yes, what to add is that in that $600 million number that Ron referenced is where I think the accountants got it, right? That's what you need to invest in the company and kind of keep it going and growing. And if you underinvest, then you're going to have years you're going to overinvest, but we should be averaging out to that number if you kind of average it over like a 4-year period or something like that.

So with 2 years of underinvestment, we'll probably see something more akin to depreciation levels or maybe nominally ahead as we look at some of those growth opportunities, you said. Millersburg, is coming online next year. A lot of that capital is being incurred real time. And so that's a good thing. We need that capacity to come online.

The North Carolina one is really taking care of our biggest energy drink partner who's building out a big compound on the East Coast, and it's our responsibility to be there once they're up and running and stuff like that. The exact data on that kind of moves around a little bit. So that's been pushed out a little bit.

You've been in the role almost 7 months or your version of the role permanent. What changes, if any, on the finance side have you made?

Yes. The biggest changes to point out is I knew where our real good expertise was being underutilized, and I brought that back to the forefront of my leadership team, bringing some guys that have been around the company for 25 years plus, even greater than my 21 years would be the biggest thing. We have a great finance team of professionals that really are as good as you're going to find the pedigrees and really letting them do good things is what we're trying to do by getting them organized.

It's closing the books faster too which is helpful.

In the last minute, in terms of free cash flow and allocation, how should we think about that with excess cash for Ball?

Yes, the free cash flow, again, think of the net income being the proxy for where we should be around. That's -- I don't think you can think of it as a precise outcome, but we'll be pretty close to that as a proxy. And then really, with that free cash flow, really, we're now talking about really trying to be a catalyst for that growth algorithm of the 10% to 15% EPS that we've laid out there. That means we'll continue to buy back some shares, not at the clip we have been because we had a bunch of cash from the aerospace sales, but more in line with what we've been guiding people to. And then as we said, think about depreciation kind of long term as the capital expenditure, what we do with them.

Well, gentlemen, we're almost at time. This was very brave for you to come up here, 4 days into your role. I appreciate that.

Thank you.

Best wishes for the future. Audience, thanks for joining. The next presenter in here will be RTX and that closes out Ball.

Thank you.

Thank you.

Greetings, and welcome to the Ball Corporation Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations. Thank you, sir. You may begin.

Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's third quarter 2025 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. We assume no obligation to update any forward-looking statements made today.

Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, our most recent earnings release and Form 8-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release.

In addition, the release includes a summary of noncomparable items as well as reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former Aerospace business. Prior year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former Aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to our CEO, Dan Fisher.

Thank you, Brandon. Today, I'm joined on our call by Dan Rabbitt, SVP and Interim CFO. I will provide some brief introductory remarks and discuss third quarter financial performance. Dan will then touch on key metrics for 2025, and we will finish up with closing comments and Q&A. First, I want to take a minute to highlight the amazing work our employees and teams have done to give back to their communities. During the third quarter, I'm proud to share that Ball employees donated over 7,000 hours of their time across 19 countries in support of 116 charities.

This past September was also our annual Who we are Month, where we celebrated our unmatched culture and talented people that help us, and our customers navigate complexity and provide innovative solutions that enable us to win. I want to thank all of our employees for devoting time to uplift our communities and participating in Who we are Month. I also want to thank all of our employees for our great third quarter business performance. Beverage can volumes grew 4.2% comparable operating earnings increased 5.1% and comparable diluted earnings per share rose 12.1%.

In addition, we have now returned $1.35 (sic) [ 1.27 ] billion to shareholders through share repurchases and dividends as of today's call. This strong performance reinforces our opportunity to deliver record comparable diluted earnings per share, record EVA and approach record adjusted free cash flow in 2025, a testament to the strength of our portfolio and disciplined execution. Aluminum packaging continues to outperform other substrates globally, underscoring the resilient and defensive nature of our business.

While we remain attentive to uncertainties related to tariffs and consumer pressures, particularly in the U.S., we are confident in our ability to proactively manage these dynamics and sustain our momentum towards delivering 12% to 15% comparable diluted EPS growth. Third quarter comparable net earnings of $277 million were driven by higher volume and cost management initiatives, partially offset by higher interest expense and lower interest income.

In North and Central America, segment comparable operating earnings increased 3.5%, driven by stronger-than-expected volume performance, though partially offset by product mix headwinds. Mid-single-digit percent volume growth was led by continued strength in energy drinks and nonalcoholic beverages. Our team continues to execute at a high level, successfully meeting elevated demand, navigating the complexities of Section 232 tariffs and mitigating risks in a volatile environment.

We remain vigilant in monitoring the evolving geopolitical landscape and tariff developments, and we are actively managing these dynamics to protect our business and support long-term growth. In EMEA, third quarter segment volume growth of mid-single-digit percent remained robust, contributing to a 14.8% increase in segment comparable operating earnings. Favorable demand trends continue to reinforce our confidence in delivering meaningful year-over-year growth in 2025.

This outlook is supported by sustained volume momentum and ongoing operational efficiency, which position us well to capitalize on market opportunities and drive continued performance improvement. In South America, segment comparable operating earnings increased 2.6% as mid-single-digit percent volume growth was supported by strong performance in Argentina. While the Brazilian market came in slightly below our initial expectations due to weather-related softness, we anticipate a recovery in the fourth quarter as conditions normalize.

Our teams across the region continue to execute well, positioning us for sustained momentum. We delivered a strong first 9 months of 2025, positioning us well to achieve our full year objectives. While important work remains in the fourth quarter, our teams are fully engaged, navigating ongoing uncertainties with discipline and leveraging the strength and resilience of our global portfolio. We remain laser-focused on our goal of delivering 12% to 15% comparable diluted EPS growth for the year.

Despite external challenges, we are confident in our team's proven ability to execute effectively and deliver meaningful value to shareholders. We anticipate 2025 global volume growth to end above the long-term 2% to 3% range and expect all of our reportable segment businesses to perform in line with or ahead of our long-term targets in 2025. This reflects the durability of our underlying global demand, the strength of our customer relationships in addition to the operational consistency of our teams across markets.

In EMEA, we continue to expect mid-single-digit volume growth in 2025 as the competitive advantages of aluminum packaging and low can penetration rates continue to drive share gains across the region. In South America, recovery in both Argentina and Chile has progressed in line with our expectations. While Brazil experienced some softness earlier in the year, we anticipate a recovery in the fourth quarter. As a result, we now expect full year 2025 volume growth across the region to fall within our long-term range of 4% to 6%. Our teams remain focused on execution and are well positioned to capture growth as market conditions stabilize.

In our North American business, stronger-than-expected volume growth across nonalcoholic categories, particularly energy drinks, give us confidence that we will exceed the top end of our long-term 1% to 3% volume growth range in 2025. We remain confident in our ability to grow volumes slightly ahead of the market. The defensive nature of our portfolio, combined with strong customer alignment positions us well to navigate potential economic uncertainty and continue delivering consistent performance. With that, I'll turn it over to Dan to talk about key metrics for 2025.

Good morning, and thank you, Dan. We anticipate year-end 2025 net debt to comparable EBITDA to be slightly above 2.75x, and we will repurchase at least $1.3 billion of shares in 2025. Through today's call, we have already purchased $1.2 (sic) [ 1.27 ] billion of shares year-to-date. CapEx is expected to be below D&A in 2025. We anticipate being able to deliver on our target of adjusted free cash flow in the range of comparable net earnings in 2025. Relative to the estimated tax payments due on the aerospace sale, we expect the remaining portion to be paid in the fourth quarter of 2025.

Our 2025 full year effective tax rate on comparable earnings is expected to be slightly above 22%, largely driven by lower year-over-year tax credits. Full year 2025 interest expense is now expected to be in the range of $320 million. Full year 2025 reported adjustable corporate undistributed costs recorded in other non-reportable are expected to be in the range of $150 million. And last week, Ball's Board declared its quarterly cash dividend.

We remain focused on driving operational excellence, sharpening cost discipline and unlocking productivity across our global footprint. Our teams are actively adapting to shifting conditions in emerging markets and broader geopolitical developments, maintaining agility and responsiveness in an increasingly dynamic environment. This proactive approach continues to support our ability to deliver consistent performance and long-term value.

Our business model remains resilient and well positioned to weather external volatility, supported by the proactive steps we've taken to strengthen our balance sheet and enhance financial flexibility. With a solid foundation and clear visibility into our path forward, we are executing on initiatives designed to deliver sustainable high-quality results. We remain focused on driving long-term creation for shareholders through consistent performance and disciplined decision-making. With that, I'll turn it back to Dan.

Thanks, Dan. Our business continues to perform well, fueled by strong demand across our global network. Tight capacity conditions highlight the importance of operational precision and reliability in meeting customer expectations. Thanks to the agility and dedication of our teams, we remain on track to achieve our financial goals for the year, including 12% to 15% comparable diluted EPS growth, record EVA dollar generation, adjusted free cash flow aligned with comparable net earnings and significant capital returns through robust share repurchases and dividend.

While external volatility persists, particularly around geopolitical developments and market dynamics, our resilient business model and proactive footprint optimization continue to position us well. Long-term contracts and disciplined financial management further strengthen our ability to deliver consistent high-quality results. This year has been a testament to the grit, talent and relentless focus of our team.

We put in the work, and now we're seeing that effort translate into real momentum across the business. We're not just competing, we're winning, and we're just getting started. Our commitment to delivering longer-term shareholder value remains unwavering, driven by volume, operating earnings, free cash flow and EVA growth. The foundation is strong, the strategy is working, and the future is ours to shape. Thank you. And with that, Christine, we are ready for questions.

[Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird.

So I guess starting off with Beverage, NCA segment. Obviously, 2Q, you called out some operational inefficiencies just given the nature of which categories grew that quarter, et cetera. Dan, how does that dynamic play out for 3Q? Because it looks like operating profit is a little bit better on basically comparable volume growth, but the operating profit is -- the operating leverage is still quite a bit below historical norms. So just your thoughts there would be helpful.

Yes, I appreciate the question. Ghansham, we remain encouraged by the underlying market momentum as cans are continuing to win on a multipack value in at-home consumption, similar to last quarter, as you've already indicated. In the third quarter, we saw continued customer and pack size mix shift toward lower-margin categories, and that was driven by market trends as well as our deliberate choices to align with the fastest-growing brands and continue to future-proof our North America business.

So to your point, we grew NCA volume mid-single digits, operating earnings 4% year-over-year. We continue to see strength in terms of volume growth, and we'll be able to navigate a more efficient future as our Millersburg, Oregon facility comes online in the second half of next year. But all total, the profit per can from -- since 2019 in our North America business has grown 32%. So we like the profitability levels. We'd wish operating leverage was just a bit higher, but we're still on a journey to continue to improve that. And the business is in a really good spot. And you want to have the volume so you can step into a more efficient footprint and supply chain pattern moving forward.

Okay. And then I know it's difficult to predict volumes in this operating environment 3 months out, let alone in a year out, but comparisons are going to get more difficult for that segment in 2026. Relative to the industry volumes for 2026, would you be at least in line with the industry? Or how should we think about that dynamic for next year?

I would say yes to that. Right now, our current focus, as you can imagine, is finishing out a really strong 2025 and continuing the earnings momentum we were able to report in Q3. As it relates to 2026, it's early in our strategic planning process, probably to provide real granular guidance. Next 4 to 6 weeks will be indicative of what the more detailed prognostication will be for us. But we're confident in our ability to continue to grow our global volumes in line with long-term expectations.

We'll grow earnings, we'll grow EPS, and you can expect us to continue to -- our robust share buyback program. So those are kind of the highlights for '26 and more to come here in the next probably 4 to 6 weeks. But North America, we're keeping an eye on that. We'll be in line with the market, if not ahead of it, and then certainly ahead in '27 and potentially '28 as we look here today.

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

Congratulations on the progress. Question for you, recognizing we're ultimately not going to be able to hold you to any of this per se. But how do you think tariff situations right now and aluminum strategies are affecting volume patterns and what it can mean for next year? And then we can cover world peace, if you'd like after that. But all thing aside, do you think there's been any sort of loading of volume into the market ahead of tariffs? Or what else are your customers doing into next year? Relatedly, I don't think there's going to be any move on 232, but if there was a reversal on tariffs, if any of these are challenged, does that make life better or just complicates things? And I had a couple of follow-ons.

Yes. I think movement on tariffs -- kind of tying your second question to the first question. We'll make it easier on demand. I would say we're passing through about a 25% to 30% price increase to our customers right now. It's negligible in terms of per can price, but that's what's being passed through now in North America, in particular, when you talk about October and then subsequently January price increases, we'll have that impact in it. So a reversal of that will be a healthy COGS move for our customers.

Difficult to see the demand impact as we're still running -- our mix has something to do with it. Our favorable customer portfolio has something to do with that. We're winning disproportionately in the market on the backs of some very, very good strategic partners. They're navigating it well. We're helping them navigate it. I do think when you hear demand challenges, you'll hear them specifically from our customers, and they will be tied to probably an ethnic backdrop, ICE impacts.

And so I don't see that specifically in our can volume, which is a positive because cans are up, but it has to be impacting elements of the substrate and the ability for that end consumer to consume products via the same channels that they had historically. I think we're winning to some extent in that. Now whether that continues -- to your point, I've got a better answer on World peace. But yes, it's still -- there's still some question marks, but I just am really pleased with our team, our performance, and we'll continue to grow despite these challenges. And in some instances, they're helpful to us.

Related to pack mix, a couple of questions and then I'll turn it over. Are you seeing -- and the broader question is, are you seeing any signs -- it doesn't sound like it that your customers are maybe contemplating moves to nonaluminum packaging because of costs. We hear that from other substrates. Might we see a little bit more of it perhaps in South America with a move to refillable glass.

What are your thoughts on that, whether that's a real threat or really not at all? Any move at all? I don't think so from the scanner data, but anything in terms of 2-liter in North America? And related and last, and I'll stop, one of your larger customers is promoting, it sounds like mini cans in convenience store. Any pickup -- anything you could share there in terms of what it means for you next year?

Thank you, George. I think the first part is I have asked that question at the very highest levels of our strategic relationship, and they say, -- the only thing I can tell you, Dan (sic) [ George ] is cans are going to continue to grow. What can size, I can't tell you, what channel I can't tell you, but they're going to continue to grow. We're going to use cans. We haven't seen the returnable glass shift in South America. But usually, that's driven from an inflationary market dynamic. It's been more cold weather, but there certainly is a bit of inflation in Brazil in particular. So we're keeping our eyes on that.

But as you transition into '26, you've also got an election and a World Cup. And usually on both of those instances, cans do really well. So I think we may be protected for a period of time. And then lastly, yes, we have -- we're very aware of what's been said publicly. The -- I think all of our -- all of the CSD players that are in the 7.5-ounce format are pushing that. That's a value proposition both for the end consumer and for them.

And I think this is just another application of using the 7.5-ounce can for price point, which says a lot about where the end consumer is in terms of the size of their grocery basket, et cetera. And the can works really well on small sizes. And so we're excited about the opportunity. I don't know how big it will be, but it should be an incremental lift to us, both from them and then the knock-on effect from their competitors.

Our next question comes from the line of Stefan Diaz with Morgan Stanley.

So I guess maybe just to start, there's been some discussion regarding contract movements potentially impacting next year by your peers in North America. Do you see any potential shifts impacting your volume performance in 2026 in the region?

Short answer, no. This is as strong a contractual outlook as I've seen for us in the 15 years I've been at Ball. There have been some movements. In many instances, we benefited from those movements and '27 will benefit further. For us, we're a bit hamstrung on growth in 2026 until we get our Millersburg facility up. So it will be tight for us, but we appear to be full. And that's the plan we're operating against right now.

Okay. Great. That's helpful. And maybe just sticking with the Oregon plant. Can you remind us of what volume impact this will have in 2026 or not really because I believe you were maybe shipping those cans from elsewhere? And then secondly, how should we think about the potential margin lift when that plant gets up the learning curve or at least starts to open, I guess, in the second half of 2026. And then balancing that with a potential Mexico headwind because I know you're shipping cans from there. I guess, how should we think about those puts and takes?

Yes. We'll get -- we're working through a number of plans at the moment that will -- on the Mexico piece, excuse me, that will help to clear kind of direction of flight on any supply chain changes that we need to do. That will be a transient movement in between '26 and '27. And then for Millersburg, you should say, I would contemplate $1.5 billion of improved volume in '27, somewhere in that range, which could be as much as 3%. And that's going to be unlocked from really a very tight portfolio in the western half of the U.S. in Texas, in Mexico, in the Southwest, as you know.

And so we'll be able to step into some contracted volume into '27 and then properly supply our customers in the Northwest from the most efficient supply point. So you'll have a little bit of start-up costs in '26. You'll recover that and then you'll margin on top of that. So you'll see -- I think we'll return to record can profitability and improved can profitability in '27, even off of what we have today.

Our next question comes from the line of Michael Roxland with Truist.

This is Nico Piccini on for Mike. I just wanted to dial in kind of on 4Q and maybe dig deeper into the volume trends you're seeing or expecting by category in North America? And then any commentary on promotional activity? And if you can give a read on October month -- sorry, October and then November month-to-date volumes.

Sure. So in 3Q, I think everyone on this call probably receives the scanner data, we do as well. So I won't spend time going through the category-specific data. But what we see in our customers across categories continue to promote and lean on multipack value and the cans are winning against other substrates in that environment. And I would say for the balance of the year, please refer back to the script, but we expect at a global level to be above the 2% to 3% growth rate. And by region, North America will be above the 1% to 3%.

So you can kind of reverse engineer the fourth quarter. EMEA has the possibility to be at the top end of its 3% to 5%. So we're expecting that top end. And then the range in South America will be in that 4% to 6% long-term range. So you can reverse engineer in that fourth quarter. But October, it's in line with our expectations at this point. There were some price increases that were taken by our customers in October. They were also offset with some traditional promotional activity in terms of buy 2, get 1 free. So the blended price is not representative of the full price that was taken on the retail shelves.

And I think that somewhat insulated us. And then for Europe and for North America historically, it's -- December is kind of where the plus and minus is. So we get through football season in football season in North America. We get through football season in Europe before they take a break. And then it's about, as they describe it in the U.K., the silly season and then around the holidays and then how the Santa cans perform and things of that nature. But what we're hearing from our customers at this point and what we're seeing in October, we're encouraged that we'll land the year in line with our current expectations.

Got it. And then just one quick follow-up for me. As you've owned Florida Can and brought that production there up, have you been able to unlock any additional capacity at that plant specifically?

Yes. And we're needing it to manage through some of the tariff supply chain challenges, but that plant is performing in line with our expectations. And next year, we'll be stepping into even more volume and unlocking even more opportunities there. So that's been a really good deal for us thus far.

Our next question comes from the line of Anthony Pettinari with...

Looking to 2026, understanding you're not giving like precise guidance, but are there any kind of directional about CapEx? And any kind of additional color on the Oregon plant? And I think the North Carolina plant, which I don't know if you broke ground on, but there were some new stories about that maybe in December. Any details there?

Yes. Great. I'll let Dan comment on early indications of CapEx. But for the Oregon plant, still on time to come up in the second half of the year. So we're encouraged about that progress, and that will unlock a much more efficient supply chain. Obviously, you got to hire the people and stand up the facility. And so there's traditional start-up costs, but that bridges to a really healthy 2027 for us on a number of fronts. Concord is something that we had a ribbon-cutting ceremony with our -- one of our large strategic customers, but that's a way out in terms of actually capital in the ground and potential start-up.

And that will ebb and flow with what's happening in the market. We're not the gating factor for being able to run additional production for them. We've got opportunities to do short-term smaller investments. But if they continue to grow at the rate they have, we'll be very excited to put that -- put a shovel in the ground and build that facility. So those are our plans right now for that.

Yes. And this is the other, Dan. A little more about the CapEx. With this year and last year being below CapEx, below the depreciation levels, it's still real early for us to be able to call next year, but we'd be guiding you a little more in line with depreciation or even slightly above, thinking about depreciation as a long-term average for our CapEx. But take it as its early days on our budget for next year.

Okay. That's very helpful. A follow-up on North America. I think last quarter, you talked about $1 million operating cost headwind, and I think that was [indiscernible] can tariffs, maybe mix was a part of that. Did that repeat or step down in 3Q? Or is that kind of over with? Or I'm just curious how that operating cost sort of headwind maybe 2Q to 3Q, maybe to 4Q.

Yes. You should assume that we're continuing to manage through like-for-like inefficiencies from tariffs, but we're past the inefficiencies in terms of the suddenness of the volume. The tariffs are still ongoing, and we're managing through those. And more to come on that as we evaluate long-term supply chain dynamics and what's the best and optimal footprint for us.

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

One more question on North America. Great to see volume has been strong and mix has been a modest drag just as you optimize that portfolio. When we think about '26, are you going to be in a pretty good spot, Dan, where mix is more neutral as we think about that going forward? And then some of the cost headwinds and inefficiencies that have weighed on operating leverage in North America. Should we see -- should we expect that to get back to more normal next year or still going to be kind of a work in progress?

A much smaller work in progress relative to some of the mix shift. We will have the start-up of the facility in -- sorry, Oregon. I was back to Ohio. It -- didn't have my readers, I'm reading the OH versus the OR. And then -- yes, let's see what we need to do as it relates to managing the underlying inefficiencies from the tariffs that we've been dealing with this year. '27 will be -- anything that has to be managed will be transient in '26, including the start-up of the facility and how we deal with ongoing underlying tariff impacts. And so we're really doing all the right things and setting ourselves up for a really nice short- and medium-term outlook.

Yes. On that note, Dan, I mean, it sounds like you won business in '27, '28 in North America, which is great. And you commented on potentially record can -- profitability per can for '27, which is exciting. Are most of those levers more on the cost and efficiency side? Or we should expect perhaps a better pricing environment just given how supply demand and just volumes have actually inflected pretty nicely in the last 12 months?

Yes. The market is tight, Phil. I think you're right. You should see an elongated improvement in underlying economics of the business that I think the industry will benefit from. And for us, in particular, the things that we've been able to manage via the operating model changes, the operating earnings construction, the inefficiencies of just a better performing manufacturing environment.

And we're kind of early days even with AI technology deploying, and there's a number of applications, both commercially with AI and secondarily within supply chain and in our plants and operating our plants more efficiently through technology. So there's room for margin improvement, and it doesn't have to come on the backs of our customers. It can just come through improved performance. And I'm encouraged about that. Yes.

And just to sneak one in for the other, Dan. How should we think about capital deployment when we think about 2026? Obviously, you guys have done a phenomenal job in returning cash back to shareholders. Is that going to be the focus still? Or could M&A be an opportunity, at least there's some chatter about Europe was the market you guys are at least taking a look at. So kind of help us think through medium to long term, how you going to deploy that excess cash?

Yes. I think notably, you're going to see the -- on the share repurchase, not to be at the same levels because through this year, we will have bought back over $3 billion worth of shares. That's a path to being private, if you think about it. So we'll moderate back into probably some of our historical averages, which you might have seen in the past. That's still being worked out on exact numbers. But we're going to continue to carry a conservative balance sheet, and we're going to be wise on how we spend the capital. So really this is -- this is really how we've always managed the business, looking at those 3 levers and trying to do the right thing to get the returns -- the right return for our shareholders.

And Phil, it's a -- I would say it's a yes and on those 2 questions. So stay tuned.

Our next question comes from the line of Jeff Zekauskas with JPMorgan.

Your inventories year-over-year are up around $500 million. I take it that's higher aluminum costs. Should your inventories continue to rise into the fourth quarter as aluminum values have lifted?

It's a combination of both. Great question. As you know, we didn't have the right inventory mix in the third quarter last year, specifically in South America in terms of unit volume and days, I think we've added a few days to make sure that we're fit for purpose of what our customers need. We've had a couple of customers even within our portfolio that are really outpacing what they expected at the beginning of the year, have had some really good market trends.

So we want to make sure we're ready for that and managing that more appropriately. I'd say the 2 to 3 days is a better reflection of a healthy level of inventory. And then your other question is probably 50%, 60% is the increased aluminum value and aluminum costs. So I'd say 2/3, 1/3, but that's how I would construct it.

And I think we might add that this is some terrific volume growth, too, that we've come into, especially here in the United States, too, that has a role in this, too.

Also in the -- in your financials, it said that you purchased an investment linked to the common stock of ORG Technology. You bought -- you have a $47 million investment. What is ORG Technology? And why do you own it? And what exactly do you own?

Yes. You're referring to one of the notes in the release. And ORG Technology is the party who just acquired the controlling stake from our Saudi Arabian joint beverage can joint venture. And we have a long history and a good strategic relationship with them that dates back to the year 2018 when they bought our beverage can business and probably not too many people were at that earnings call, but we had, at that time, announced that we would be putting some investment into their company. They are the largest beverage can producer in China, and they are traded publicly. So it's a small stake in their public company for an important strategic relationship for us.

And Jeff, I think you would anticipate that there's a number of strategic elements to that investment. So more to come on that.

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

You mentioned in the last calls -- -- you mentioned a few times in the last 2 earnings calls just about mix. And I understand there are a lot of moving parts. I mean there's big beer versus craft beer. There's new CSD contracts. There're obviously some logistical things in terms of a large energy customer. But what -- approximately what quarter in 2026 do you think that's roughly going to normalize in terms of improving the Street's ability to better project volume versus operating leverage in your NCA business?

It will be much cleaner in '27 when we have a little bit more capacity. So capacity is one component of the difficulty to predict leverage fall through. The second one is just the trend -- the shift into higher growth customers, higher growth categories. And we're through 80% of that at this point for the next 3 years. So not a great deal of additional change in terms of our mix. But the navigating an incredibly tight, I think we'll be at 99% asset utilization next year.

So how you're delivering on spikes and declines of volume line by line, SKU by SKU, that's going to be difficult for us to manage the traditional flow-through. I think what you're seeing counter to that just in a corollary is we put in excess capacity, growing into a growing market in Europe, much easier to flow through operational leverage at a more traditional rate when you've got that and you're not having to manage things kind of hand to mouth. So looking forward to having a little bit more capacity in the right locations in 2027.

So that actually leads me to my second question on Europe. I don't know if we've explicitly hit this on the call, but growing into a growing market, I mean what's your kind of latest and greatest assessment based on what you're hearing from your customers in terms of the outlook for '27, '28 in terms of the need or perhaps it's already accounted for additional supply capacity in Europe in particular?

Yes. Europe is -- and I think you're hearing it from a lot of our competitors as well and our customers. For the can, it's a land of opportunity. And it is because it still has heavy glass substrate composition. And glass has got a really bad carbon footprint. And so there's investments away from glass. The cans preferred. Europe is not Europe, obviously, it's not homogenous. So depending on what the markets are, will depend on what the can size is, depending on is it a vacation spot like Southern Europe is, which is more seasonal. I think all of these factors weigh into what's the right capacity and where.

And obviously, it's a much more discerning investment in that market for all of us given the labor laws, the Works Council and the challenge to garner environmental permitting, et cetera. So it's a -- if you endeavor to build there, it's much more difficult, much more specific, much more thoughtful approach that you have to take in those markets. And it's -- I'm very encouraged about the capital we've deployed there and the benefits we've gotten. And as we continue to do that, it's -- you have to be methodical about it for sure.

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

Dan, a quick one for you. I mean you've addressed most of the key issues. So one quick one here. As you look at all the puts and takes in the different regions and so forth, like what worries you the most. Like what do you see as under your control? And what do you see is like things you cannot control? Yes, like what worries you the most as you get into the next year and year after that.

Little worries me at this point. I say this with the greatest of respect for the team that I am managing and working with. We have hit a number of outsized challenges here over the last 3 or 4 years that really no one in our industry has had to deal with. No one had to deal with Russia. No one had to deal with the marketing issue in the light beer category. No one had a business in Argentina. So the team has masterfully gone through that, and we've stood up a new operating model and not to mention what's happened here recently with the trade challenges.

But certainly, 5, 80-year-olds controlling the majority of the largest economies in the world and what they want to do tomorrow, that's -- I can't spend a whole lot of time deliberating that and what the what-ifs are. But trusting and leaning in on our team, making sure that they have the energy, and they believe we're winning and that we have a winning formula. That's where I'm spending the most of my time. But I appreciate the question.

No. So that says. So as you look at your stock price kind of been under pressure. So when you look at capital allocation, are you looking like in terms of share buyback more opportunistically or trying to be more aggressive? Like what are you thinking there in terms of the disconnect between what you think you can deliver and what the stock is reflecting?

Well, we think we're very cheap. I think we believe that looking at our 5-year outlook, looking at our plans, looking at the historical valuation of this company, looking at how we're performing and winning in virtually every single capacity. So we're -- I'd say we're not -- we're opportunistic in the sense that we think we're cheap, but we're going to be very deliberate in returning value to shareholders. When we're at our best, we return value to our shareholders in a consistent manner. And as long as I see a really positive and constructive outlook, we'll continue to keep the foot on the gas in terms of the share buyback.

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

Congrats on a strong quarter here and outlook. So I guess my first question, maybe I could just ask about the categories. So in North America this year, I think we're categorized or characterized by a very strong energy market, somewhat off of easy comps, but also, I think the consumer has pivoted that way to get maybe caffeine at a lower rate than coffee. But maybe some other dynamics playing in there. Do you see energy continuing to grow next year at a similar pace on tougher comps?

And similarly, I guess, beer was relatively weak. However, you've managed through it with your very strong CSD position. So maybe you can just comment on how the categories look to you as you -- you've already said some new contracts up to '27, '28. But in '26, do you expect continued low single-digit growth? And maybe you can just provide some thoughts by category.

Yes. I think your characterization of the categories is right. I think the other thing that is -- needs to be impressed upon, I think, the broader audience is there are very aggressive innovations happening now in a number of areas that would be a little bit more challenging to define, but health and wellness is certainly promoting. I think there's protein going into everything these days. So I think that market is untapped. But we're connected to a lot of folks that we think are going to win disproportionately moving forward, and they're going to be in cans.

But the non-alc 52 weeks, it's grown 4.8%. Alcohol has declined at 2.5%. We have plans to help everyone win in their categories in their preferred brand. There's a lot of can innovation happening. So all of that's going to be required to help all of our customers win. And then there's a lot of disruption that's coming in terms of innovation that we're excited about. So folks that are beverage companies are going to figure it out.

And that's where we've also been repositioning some of our portfolio to make sure that we're winning disproportionately on favored mix and winning with the winners. So '26 is what your question, '26 for us is we're very, very tight. And we've bridged higher growth into the contract construction into '27 and beyond to make sure that we can stand up a facility in the Northwest in Oregon. And so we'll grow in line with what we believe the market, at least the low end of the market. And then we'll -- you'll see fundamental step change where we'll outpace the market in '27, '28 and beyond potentially.

Great. And so I guess what I'm hearing is the main issues that you're contemplating are just around complexity and maybe execution. And would there be any issues on metal supply that we should consider, maybe whether it's logistics and getting metal in the right places or imports or supply chain? Or have you already addressed those as well?

Yes. Overwhelmingly, we've addressed those. There was some media coverage on one of our suppliers that I believe supplies 8% of the can sheet in the North American market. They're overwhelming automotive supply base. So that was something that was managed very effectively. Yes, we continue to not have enough aluminum in the U.S., processed aluminum, aluminum can sheet, but that's something we've been dealing with for multiple years now. And 232 hasn't presented much more in terms of supply chain challenges.

And then we have both Novelis and SDI that's going to be standing up a new facility here in the next few years. So medium, long term, we're in great shape. Short term, we're all navigating kind of disillusionment of NAFTA supply chain, but we're -- the team is doing a great job. And we may have to do some things in our footprint to navigate much more efficiently, but you're talking about low capital throws and just optimizing what's in front of you. We do that all the time, but this one would be directly connected to the tariff scenarios.

For metal, we feel pretty good, though, where we are.

And apologies if I missed this, but did you call out any special cash items for next year? I know CapEx you addressed, but was there anything on working capital or cash tax or minority interest or anything else that would drag cash flow? Or any thoughts on what your conversion from EBITDA or net income would be?

No. We really have nothing to report right now at this time. But I think we think the trends should continue into next year for the most part.

Our final question comes from the line of Josh Spector with UBS.

Just first, a quick follow-up. Just on the Novelis outage and the aluminum supply. Did that have any impact on you guys in 3Q or 4Q volumes or cost expectations?

No, it didn't.

That is clear enough. Secondly, I just wanted to ask more broadly on consumer elasticities here as you're thinking about inflation for carbonated soft drinks and beer, do you have any latest view around kind of what the sensitivity would be when consumers start to see the impact of higher prices next year or potentially the risk of?

Yes. I'm actually more encouraged. Then I think the press clippings are -- just from this standpoint, we've been talking about a weekend consumer for 3 years. I mean, it's been -- grocery baskets have been getting smaller for 3 years. So this is nothing new to what we've been dealing with and what our customers have been dealing with. And if you look at the most recent -- what's different, and I think this is why I'm encouraged, when you look at what people are saying they're going to spend their money on, they're going to spend their money on food and beverages. They're not going to travel. They're not going to buy a large capital spend. It's all geared toward the things that we make.

So the concentration, the effort and the dollars that are being spent in people's budgets and in their mental framework is going to us, whereas the last 2 to 3 years, we were still competing with vacations and other things, but that's not what we're competing with now. So I think that would signal to you that the pricing has clicked into a place where they have to focus on putting food on the table above everything else, and that's usually a good spot for us.

Yes, I want to thank everybody for the questions today, and I hope you have a wonderful holiday season and look forward to reporting back out full year numbers and a deeper dive into '26 here in short order. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.