Ball’s Earnings Call Contradictions: Shifting Millersburg Ramp Timelines and BenePak Accretion Delays

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Date of Call: Aug 4, 2026

Financials Results

• EPS: Comparable diluted EPS grew 14.4% YOY, with first-half performance consistent with 10%+ full-year growth framework.
• Operating Margin: Comparable operating earnings grew 7.7% YOY

Guidance:

• Deliver 10%+ comparable diluted EPS growth for 2026.
• Generate free cash flow >$900M.
• 2026 effective tax rate on comparable earnings slightly above 23%.
• Interest expense ~$310M.
• CapEx in line with GAAP CapEx.
• Net debt to comparable EBITDA ~2.7x at year-end.
• Return ~$800M to shareholders via dividends and share repurchases.
• Full-year startup costs ~$35M, with ~$30M in second half.
• Millersburg plant ramp-up on track for 2027, with no 2027 startup costs expected.
• Volume growth exceeding long-term 2-3% range for 2026, with acceleration expected in second half.
• EMEA volume growth above high end of 3-5% long-term range for 2026.
• South America volume growth at low end of 4-6% long-term range for 2026.

Business Commentary:

Volume and Market Growth:

• Ball Corporation reported a 4.3% increase in global beverage can volumes for Q2 2026 year-over-year, with North America showing low single-digit growth and EMEA mid-single-digit growth, while South America showed mid-teens growth.
• This growth was driven by strong demand across regions, particularly in energy drinks and non-alcoholic beverages, and the integration of new capacity in EMEA.

Earnings and Financial Performance:

• Comparable operating earnings grew by 7.7% year-over-year, and comparable diluted EPS increased by 14.4%, supported by disciplined cost management and commercial performance.
• The growth was attributed to favorable price mix and capital allocation despite absorbing North American startup costs.

Startup Costs and Capacity Expansion:

• North America incurred approximately $5 million in startup costs in Q2 2026, with an expected total of $35 million for the year, primarily due to the Millersburg facility ramp-up.
• The costs are part of the strategy to expand capacity and relieve operational pressure, with the Millersburg plant expected to contribute fully in 2027.

Regional Performance and Strategic Positioning:

• South America demonstrated a 64% year-over-year increase in comparable operating earnings, driven by mid-teens volume growth and strong operational performance.
• The region's performance was supported by a healthy can market and a privileged customer portfolio that benefited from events like the World Cup.

Capital Allocation and Shareholder Returns:

• Ball Corporation remains on track to return approximately $800 million to shareholders in 2026, with plans to repurchase $600 million in shares and distribute dividends.
• This approach is part of a capital allocation strategy grounded in EVA, focusing on strong free cash flow and consistent returns to shareholders.

Sentiment Analysis:

Overall Tone: Positive

• "The fundamentals supporting our business remain firmly in place." "These trends continue to support a durable runway of demand for our products." "Our first half results reinforce the resilience of our business and the consistency of our execution." "We continue to deliver 10%+ comparable diluted EPS growth." "We are really pleased with our performance."

Q&A:

• Question from Gansham Punjabi (Baird): Looking back, how did flagship events like America 250 and the World Cup impact your volumes? Were you supply constrained?
  Response: No meaningful volume growth due to events; North America supply was notably tight. Events provided confidence in underlying demand growth.

• Question from Gansham Punjabi (Baird): In Europe, adjusting for BenePak and portfolio moves, what were underlying volumes in Q2? Consistent with expectations?
  Response: Legacy European business delivered mid-single-digit growth; BenePak addition and Saudi loss neutralized, keeping organic performance in line with long-term 3-5% outlook.

• Question from Anthony Petanari (Citi): Any finer points on Q3 vs Q4 cadence, especially regarding startup costs and energy costs in EMEA?
  Response: $35M total startup costs for 2026, with ~$30M in second half; timing not specified. Millersburg plant now making commercial cans, full ramp in 2027.

• Question from Anthony Petanari (Citi): Thoughts on South American market and second half outlook given strong Q2 and peer conservatism?
  Response: South America is volatile; Q1 and Q2 offset, confident in full-year low end of 4-6% growth range. Privileged customer portfolio benefited from World Cup.

• Question from George Staffos (Bank of America): Why did North & Central America EBIT underperform despite volume growth? Similar in Europe?
  Response: Operational friction due to high utilization, tight capacity, and startup costs in North America. In Europe, new acquisitions (BenePak) not yet accretive as they ramp up.

• Question from George Staffos (Bank of America): Is the 40% alcohol portfolio target still part of initiatives? How is beer trending?
  Response: Can is winning across categories; beer is important but not the only category. Can growth continues as consumers prefer convenience.

• Question from Gabe Hajde (Wells Fargo): Are you over 90% sold out in North America for the decade? Any updates? Europe business updates?
  Response: No material change to >50% sold out through end of decade. Europe is a land of opportunity with strong growth; BenePak integration on track for full-year 2026 growth above high end of 3-5% range.

• Question from Elaine Rodriguez (Mizuho): How did regional volumes compare with markets?
  Response: North America low single-digit growth matched market. EMEA mid-single-digit growth matched. South America mid-teens growth outpaced flattish market.

• Question from Elaine Rodriguez (Mizuho): Capital allocation: expect ~$200M share repurchase per quarter?
  Response: Guidance unchanged: ~$600M share repurchases plus ~$200M dividend for $800M total return. H1 repurchases ~$100M; back-half weighted due to cash flow timing.

• Question from Hillary Cacanando (Deutsche Bank): Is North America volume growth from substrate shift or new product launches?
  Response: Can continues to take share as other substrates decline; customers often launch new products in cans, driving growth via size and pack configuration innovation.

• Question from Hillary Cacanando (Deutsche Bank): Any Millersburg startup costs in 2027?
  Response: No startup costs expected in 2027; plant ramp-up complete, costs all in 2026.

• Question from Mike Roxland (Truist): Early read on 2027 volume? When will Millersburg and BenePak ramp fully?
  Response: Not providing 2027 guidance; volume growth likely in 2-3% range. Millersburg full value in 2027 (commercial production started last month). BenePak fully ramped and accretive in 2027.

• Question from Mike Roxland (Truist): Where do volumes stand for July and early August?
  Response: July and month-to-date August right on plan; confident in Q3 outlook.

• Question from Josh Spector (UBS): Why did aerosol business perform well in Q2? Competitive environment with new competitor expansion?
  Response: High single-digit growth due to industry dynamics; competitor expansion in US not relevant to Mexican operations.

• Question from Josh Spector (UBS): Impact of Section 232 changes on domestic aluminum production?
  Response: No material impact; tariff changes not significant. Lower aluminum prices desired; industry investments encouraged.

• Question from Matt Roberts (Raymond James): Clarification on volume growth above 2-3% range?
  Response: At mid-year, volume in middle of 2-3% range; expect acceleration to finish around 3% for 2026.

• Question from Matt Roberts (Raymond James): Will Millersburg change product mix (standard vs. specialty)?
  Response: Millersburg is a one-line plant making standard cans only; no mix shift impact. Continued industry shift to sleek cans ongoing.

• Question from Gabe Hajde (Wells Fargo): Any other capacity additions in North America besides Millersburg?
  Response: Industry is healthily tight; new investments will be backed by long-term offtake agreements. Continuous debottlenecking and productivity projects ongoing.

• Question from Phil Eng (Jeffries): Competition and market growth in India?
  Response: India is a land of opportunity with >teen can growth; Ball expanding capacity there, excited about long-term government changes.

• Question from Phil Eng (Jeffries): Quantify World Cup volume impact in South America? Drag for 2027?
  Response: Hard to quantify; World Cup benefit in Q2 should not be meaningful year-over-year. Full-year 2026 growth still at low end of 4-6% range.

• Question from Phil Eng (Jeffries): Thoughts on customer investments in metal can operations and North America mix?
  Response: No comment on specific customer capacity moves. Support all customers; industry growth is positive.

Contradiction Point 1

Millersburg Plant Ramp-Up Timeline

The timeline for the Millersburg plant to reach full capacity appears to shift earlier.

Gansham Punjabi (Baird) - Gansham Punjabi (Baird)

2026Q2: The new Millersburg plant is now making commercial cans and will ramp up in 2027 to relieve capacity pressure. - Ron Lewis(CEO)

How did flagship events like America 250 and the World Cup impact your volumes and supply constraints? - Anthony Petanari (Citi)

2026Q2: Millersburg plant began commercial can production last month and will ramp fully in 2027. - Ron Lewis(CEO)

Contradiction Point 2

BenePak Integration & Accretion Timeline

The timeline for BenePak's plants to become fully operational and profitable appears to shift.

Gansham Punjabi (Baird) - Gansham Punjabi (Baird)

2026Q2: BenePak’s contribution was offset by the sale of the Saudi Arabian business, leading to overall volume growth in line with long-term 3-5% outlook. - Dan Rabbit(CFO)

What were Q2 underlying volumes in Europe, adjusted for BenePak and portfolio moves? - George Staffos (Bank of America)

2026Q2: BenePak plants are not yet accretive as they are still ramping up. - Dan Rabbit(CFO)

Contradiction Point 3

European Volume Performance and Key Drivers

Q2 volume growth attribution conflicts with Q1's explanation of headwinds.

Gansham Punjabi (Baird) - Gansham Punjabi (Baird)

2026Q2: Legacy European businesses grew mid-single digits. BenePak’s contribution was offset by the sale of the Saudi Arabian business, leading to overall volume growth in line with long-term 3-5% outlook. - Dan Rabbit(CFO)

What were the underlying volumes in Europe during Q2, adjusted for BenePak and portfolio moves? - George Staphos (Bank of America)

2026Q1: The acquisition of Benepack (completed in Feb 2026, not assumed from start of year) and the sale of UAC (now reclassified under new segment reporting) created headwinds. - Ron Lewis(CEO) and Dan Rabbitt(CFO)

Contradiction Point 4

North America Volume Growth Outlook

Conflicting guidance on 2026 volume growth trajectory.

Matt Roberts (Raymond James) - Matt Roberts (Raymond James)

2026Q2: Currently at midpoint of 2-3% range, expecting acceleration in H2; 3% is a good prognostication. - Ron Lewis(CEO)

Was volume growth above 2-3% or at the high end? - Ghansham Panjabi (Robert W. Baird & Co. Incorporated)

2025Q4: For 2026, North America volume is expected to be at the low end of the 1%-3% long-term range due to capacity constraints until the new Millersburg plant starts up. - Ron Lewis(CEO)

Contradiction Point 5

Millersburg Plant Startup Costs & Ramp Timing

Inconsistent messaging on when the Millersburg plant will become a volume contributor.

Anthony Petanari (Citi) - Anthony Petanari (Citi)

2026Q2: Millersburg plant is now running commercially but full ramp-up is in 2027. - Dan Rabbit(CFO) / "Millersburg expected to deliver full value beginning Q1 2027." - Ron Lewis(CEO)

How does the strong Q2 performance influence the outlook for the South American market in the second half? - Gabe Hajde (Wells Fargo Securities)

2025Q4: The new Millersburg plant... is expected to be aspirational for 2027 volume. - Ron Lewis(CEO)

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