BALL Corp Q4 FY2025 Earnings Call

Greetings, and welcome to the Ball Corporation Full Year and Fourth Quarter 2025 Earnings Conference Call. 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 full year and fourth quarter 2025 results. During this call, we will reference our fourth quarter 2025 earnings presentation available through this webcast and 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. 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'd 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. Over those years, I was asked several times to join Ball, and 6.5 years ago, I did. 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. 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, and aluminum cans are taking share as consumers, customers and retailers favor a package that is convenient, functional and increasingly aligned with sustainability 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 in shipped volumes supported by strong customer partnerships, innovation in formats and a commercial and operational footprint that is unmatched. Our long-term volume range remains intact, and in 2025, we exceeded it. We paired 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. 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 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 purposefully 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. 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. We are also pleased to close late last week on the previously announced acquisition of two 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 production in the United States. These costs combined are approximately $35 million in 2026. 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 two 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 non-reportable 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. 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.

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 America and Central America segment, the volume growth in 2025 of 4.8%, that really follows three consecutive negative years for that segment. How would you disaggregate that improvement between industry growth last year versus the three 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 two segments as well?

Ghansham, thanks for the question, and thanks for the congratulatory remark. 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. I credit that really to all of the customers in our customer portfolio we have that is really unrivaled. We have excellent customers in every category, be it energy, soft drinks or in the beer category. Those customers won, and we feel like we helped them to win as they drive innovation, be it different liquid or different can sizes that we have the opportunity to provide for them. So really, it's our unrivaled network, our ability to serve them with different size 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 three 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 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. The plants are in Belgium and Hungary where we don't have plants today. We think this is a great opportunity for us to plug those two 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. We have a great long runway for strong utilization of these plants in the future. Quite frankly, we were on the top end of our range even before we made this acquisition. 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. It's a great opportunity for us to lean into some great customers, which are, quite frankly, right in line with our most important strategic customers. That's who we'll serve from those assets. 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.

Go ahead. Sorry, go ahead. You can go ahead.

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 two newer facilities that have never run continuously which will require improvement to ramp up. Think of it as we have two plants where we'll spend the year really getting the labor and the procedures put in place. This year, we think it's going to do around about $1.7 billion of volumes. And operating earnings, the comparable operating earnings are really projected to be pretty close to flat. So it's not going to contribute a lot on that. We 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. We know these markets really well, so from a customer and labor perspective, we're 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 working with you. And also, thanks for the slide deck. It's a nice help here. You mentioned during your formal remarks that you want to double down on profitable growth. 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. 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. Our 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 a rallying cry and a focus for our business to really focus on our strategy and how we're going to execute that. 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 North America system, in particular, reconfigured with the ends and then more importantly, the Millersburg plant started up. So I think you are thinking about the North America segment right with how you positioned it.

Dan, I appreciate that. Just one follow-on and 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. Yes, the fact of the matter is we had some incremental tariff costs that if it weren't for that, bringing ends into the U.S. from across the border, we would have hit our 2x operating leverage. 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 the 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. 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. 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.

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 six months?

Yes. Thank you for the question. The answer is yes. We are broadly a pass-through business. Our contracts allow for us to pass through inflationary cost pressures. 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. 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 with all of our input costs, including beverage can coatings. There are inflationary mechanisms in those or deflationary mechanisms in those contracts, but it's all very manageable. This is all part 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 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 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. 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 had some capacity to grow into in Europe. We did that in 2025. That helped us deliver the amazing operating leverage. We used up our capacity even faster than we had intended, and that's why we're buying these Benepack can plants. You can expect us to deliver at least the 2x operating leverage on the volumes that we will sell in Europe in 2026.

Okay, great. Ron, now that you're the CEO, should we anticipate any changes in strategy at Ball? What is your primary focus, and are there plans for any different approaches?

Yes. Thank you for the question. The great news is that our strategy is intact, and it is working. 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 succeed by addressing significant opportunities for them. We continue to see the overall aluminum can industry grow, and that trend will persist. We have the most impressive network and an enviable portfolio of cans to offer to our customers. That strategy isn't changing. What we are focusing on is how we can operate even more effectively to drive growth through our Ball Business System and our operational and commercial excellence initiatives. What you should expect from us is a relentless focus on running our business extremely well.

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

Congratulations on your new roles. I wanted to get your thoughts on the tariffs you mentioned in your prepared remarks. How are you managing that situation? Additionally, regarding the increase in aluminum prices, what feedback are you receiving from your customers? I know that in North America, costs are typically passed through, but at some point, they'll need to either raise prices or find another way to address this issue. What are you hearing about those two topics?

Thank you, Arun, and I appreciate the congratulations. We're truly proud and humbled to be in these roles, and we're pleased with the results we've delivered in 2025. Tariffs are something that every company is keeping an eye on. However, as we speak today, there is no direct impact on our business apart from the end piece we mentioned, which is a pass-through as you noted. For us, the impact is seen in the Midwest premium, which has significantly increased for the entire aluminum industry. We're monitoring this situation. The U.S. consumer continues to purchase our products, with the can segment in 2025 in the U.S. growing about 2%, while all other materials decreased by more than 2%. The can remains a valuable option in any economic climate, which is what we're hearing from our customers. They are continuing to focus on selling multipacks of cans because they offer significant value to 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. It's important to note that all of our customers are 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 and a shift to functional elements of those products, and you name it. They have 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/or going back to basics with the customer?

Thanks for the question, Mike. I appreciate your comment. Look, we've said we want to focus on supporting our customers and helping them to win, and we're really happy with that. I've had amazing customer interactions before I had this role and even more so now. It's one of the most enjoyable parts of this job. The other thing that is important to know is that 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. 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? And are you still on track to complete that by year-end, one year earlier than you initially targeted? Have you standardized operating practices across your plants globally? 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 as the fuel for growth for our business in the three-year time frame versus the four-year time frame. So that was 2024, 2025 and 2026. More than two-thirds of it has been delivered; quite frankly, more like three-quarters of it has been delivered in the first two years. We're not going to stop there. We will keep working as 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. 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.

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. The first month of the year started as planned, more or less across all the regions; small puts and takes here and there, but generally as planned. You see the published data this morning. It’s really, really quite good. I wouldn’t say anything other than it’s a good start to the year, and it’s better to start the year this way than in a hole. It’s pretty good. We appreciate it. We’ll go from there.

Great. Does ABI repurchasing their stake in Metal Container Corp have any significance for the industry? Additionally, what are the chances that brewers and beverage CPGs start to integrate backwards a bit?

Yes. Honestly, them buying back their portion of their vertical really has no impact on us or the industry because that capacity was there before. We’re really happy that they did that, quite frankly, and they're a great customer. We work closely with them. It really doesn't have any impact; it was sort of a non-event, and they kept us informed all along the way about their plans. We’re really happy with them as a customer, and we’re really happy 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 massively expand their 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.

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 the customer and just doubling down on 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 cost? Are you retooling the layers in the organization, reshuffling leadership, realigning incentive comp? What are you doing? Just give us one or two examples on the cost and execution front; how are you guys going to approach it perhaps a little differently and then getting closer to the customer?

Thanks, Phil. I 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 leadership of all our major customers. I would say more than 75% of what we sell, I have either met with in person or had extensive conversations with. That, as I said, is really exciting for us. Now what does it mean as it relates to how we are going to run our business better? It starts with being really disciplined and repeatable 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 two assets from Benepack is about. 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 about our people and culture. The culture of this business is what makes a difference for us. You wanted some specific examples. In every single Ball plant everywhere around the world at 6:00 a.m., 8:30 a.m., 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. 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. When we’re making those investments, we are committing to returns higher than what we can get in our EVA model. That’s how we become a serial compounder and continue to generate cash and 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. A question for Dan. I think last quarter, maybe I misinterpreted, but I think there was some commentary 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? Just because some of the commentary today, I thought you kind of pointed to start-up costs perhaps being 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 into 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. I think you said it right in your question, and it does become an opportunity to start to show improvement in 2027 for the operating leverage. As far as the question about tariffs, the thing we might have called out is that we are moving production, some smaller amounts of ends production out of Mexico into the United States. A lot of that is happening in the first half of the year, but 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 any shifts in consumers? Just given in past cycles when the macro is a little more choppy, there might be some trade down to resellable glass. I'm just curious what you're seeing on that front.

Thanks, Phil. For sure, we grew high single digits in the quarter. In 2025, we delivered on the low end, but we delivered on our volume algorithm in South America, and we delivered more than 2x operating leverage. 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 consumers are excited. We’re going to get a chance to 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.

I'll echo everyone's positive sentiments on the roles; congratulations. Dan, if I may, somewhat related to Phil's prior question. Could you parse out, I believe you called $35 million cost headwind. Is that still $10 million to $15 million first half from the tariffs and the remainder from Millersburg in the second half? Or any changes on the ends cost impact? Additionally, any other considerations for cost 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?

Thank you, Matt. Regarding the $35 million, it's more appropriate to consider that most of it will be in the latter half of this year, positioning us well for next year in North America. The situation with Benepack in EMEA is quite similar. We just completed the acquisition. We were previously competitors, and now the real work begins. I anticipate a ramp-up in the second half, and it will also be focused on next year. Both situations appear quite alike to me in several ways.

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 were pretty clear about share repurchases and dividends. But are there any other priorities besides capital return, like maybe more bolt-on M&A in one of the regions?

Yes. Well, let’s start and talk about how we filter everything. We're filtering all our opportunities with our cash flow and investments through the EVA lens. This is a year where we are really 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. With all of that, we're going to keep our leverage and even bring it down a little bit as we guide down to 2.7x. We're looking at all the levers, always looking at what the best EVA returns are. 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. I'm 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? Then did we see any evidence, or have you seen any evidence of pull forward by customers? We've asked this in the past. I recognize it's not customary for customers to inventory cans, but it's also not customary for aluminum costs to be up 30%, 40%. I guess what are you hearing on those two fronts?

Thanks for the question. For 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 not all the organic number, but it was relatively small. Did we see any pull forward in 2025 in Q4? No is the answer. 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, seeing kind of on plan what we expected. The opportunity south of the border, given the amount of tariffs and 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. That’s why we provided the lower end of our volume range; we absorbed all the latent capacity for the most part that we had in North America in the U.S. with that 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. Until we get that up and running, we’re a bit capacity constrained. 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 talking about, again, taking into account the start-up cost contribution coming in '27? It was one of the other analysts that put this 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; we won't have earnings effect; we have the start-up costs. The only thing I would say is it's a one-line plant, not a two-line plant. So you could expect more like 1 billion cans out of that facility until we ramp it up. That would be aspirational in 2027. Let’s see how we start it up. Thank you for the question. Christine, I think that's all the questions we have time for today. I 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. Thank you very much for your time, and I 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.