Ball Reports Improved 2013 Results
Published February 3, 2014
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Ball Corporation reported full-year 2013 net earnings attributable to the corporation of $406.8 million (including after tax charges of $82.8 million, or 55 cents per diluted share for business consolidation costs, discontinued operations, debt refinancing costs and other activities), or $2.73 per diluted share, on sales of $8.5 billion, compared to $403.5 million, or $2.55 per diluted share, on sales of $8.7 billion in 2012. On a comparable basis, Ball’s full-year 2013 results were net earnings to the corporation of $489.6 million, or $3.28 per diluted share, compared to $483.0 million, or $3.06 per diluted share, in 2012.
“Though worldwide economic conditions have not changed materially, we have adapted well by effectively managing our asset base, leveraging our customer relationships to capture growth in key markets, and implementing programs to drive efficiencies and improve results,” said John A. Hayes, chairman, president and CEO. “Specialty can growth in the Americas, improved cost management in our global packaging operations and solid program execution in our aerospace operations led to results that exceeded our expectations.”
Fourth quarter 2013 net earnings attributable to Ball Corporation were $124.5 million, or 85 cents per diluted share, on sales of $2.0 billion, compared to $60.6 million, or 39 cents per diluted share, on sales of $2.1 billion, in the fourth quarter of 2012. On a comparable basis, Ball’s fourth quarter results were net earnings of $126.8 million, or 86 cents per diluted share, compared to $98.9 million, or 64 cents per diluted share in the fourth quarter of 2012.
Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $511.8 million for full-year 2013 on sales of $4.2 billion, compared to $522.5 million in 2012 on sales of $4.5 billion. For the fourth quarter, comparable earnings were $147.3 million on sales of $1.0 billion, compared to $138.0 million on sales of $1.1 billion in 2012.
Continued excellent operating performance and strong demand for specialty packaging continued in the Americas offset by sluggish 12-ounce can demand in North America. During the fourth quarter, the second production line in the Alagoinhas, Brazil, beverage can plant contributed favorably to segment results. In Asia, Ball relocated beverage can and end equipment from the Shenzhen plant to the company’s existing Foshan plant to maximize efficiencies during a challenging period of industry overcapacity.
Metal beverage packaging, Europe, comparable segment results in 2013 were operating earnings of $182.6 million on sales of $1.8 billion, compared to $182.3 million on sales of $1.8 billion in 2012. For the fourth quarter, comparable operating earnings in 2013 were $39.4 million on sales of $427.8 million, compared to $29.6 million on sales of $394.3 million in the fourth quarter of 2012.
Full-year and fourth quarter comparable operating earnings were affected favorably by solid demand for beverage containers across the region and good cost management. Our plans for long-term cost optimization, including the consolidation of the Ratingen, Germany, regional administrative offices, are progressing as planned.
Metal food and household products packaging comparable segment results for 2013 were operating earnings of $177.4 million on sales of $1.6 billion, compared to $167.8 million in 2012 on sales of $1.6 billion. For the fourth quarter of 2013, comparable segment results were operating earnings of $36.8 million on sales of $345.2 million, compared to $36.8 million on sales of $363.2 million in the same period of 2012.
Full-year 2013 results were up due to solid operating performance across all product lines and continued volume growth for global metal aerosol packaging. In an ongoing effort to improve efficiencies, the company ceased operations at its Elgin, Ill., facility and announced the closure of its Danville, IL, steel aerosol manufacturing plant during the quarter. The company is deploying the manufacturing assets from these plants across the North American system to supply its existing customer base.
Aerospace and technologies comparable segment results were operating earnings of $80.1 million on sales of $897.1 million in 2013, compared to $86.6 million on sales of $876.8 million in 2012. For the fourth quarter, earnings were $25.1 million on sales of $222.1 million, compared to $24.2 million on sales of $245.0 million in the fourth quarter of 2012. Contracted backlog at the close of the year was $938 million.
Full-year comparable operating earnings were negatively affected by the U.S. budget sequestration and the subsequent government shutdown. During the quarter, the previously delivered STPSat-3, the Department of Defense Space Test Program’s Standard Interface Vehicle (STP-SIV), launched successfully.
Ball announced an increase to its share repurchase authorization enabling the company to repurchase up to a total of 20 million shares of its common stock.
“We anticipate full-year 2014 free cash flow to be in the range of $550 million after capital expenditures of nearly $375 million with the majority of free cash flow being returned to shareholders via share repurchases,” said Scott C. Morrison, senior vice president and chief financial officer.
“As we transition into 2014, we are confident in our ability to increase EVA dollar generation and achieve our long-term diluted earnings per share growth goal of 10 to 15 percent,” Hayes said.
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