Greetings, welcome to the Ball Corporation 1Q 2023 earnings conference call. During the presentation, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach the operator, please press star zero. As a reminder, this conference is being recorded Thursday, May fourth, 2023. It is now my pleasure to turn the call over to Dan Fisher, Chairman and CEO. Please go ahead. Thank you, Tina. Good morning, everyone. This is Ball Corporation's conference call regarding the company's first quarter 2023 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. Some factors that could cause the results or outcomes to differ are in the company's latest 10-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. Historical financial results for the divested Russia operations will continue to be reflected in the beverage packaging EMEA segment. See note one, business segment information for additional information about the sale agreement and a quarterly breakout of Russia's historical sales and comparable operating earnings. In addition, the release also includes a summary of non-comparable items as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I'll provide some brief introductory remarks. Scott will discuss key financial metrics. We will finish up with closing comments, our outlook for the remainder of 2023 and Q&A. Let me begin by thanking our employees for working safely and efficiently while fulfilling our customers' needs. Collectively, we delivered strong first quarter results amid tough year-over-year comparisons, driven largely by business divestments executed in 2022. In the first quarter, every business either achieved or exceeded their operating plan. Our aluminum beverage and aerosol shipments were in line with our regional expectations, and our aerospace technologies continue to be in high demand. Notable inflation recovery, benefits of cost out actions, improved operational efficiencies and performance in every business offset higher interest expense and taxes. With near term macroeconomic conditions continuing to pressure consumer demand, Ball's year-to-date global beverage can volumes were down 1.4% in the first quarter, in line with our expectations. Looking ahead, the breadth of retail summer promotional activity across our customer mix in North America and the continuing successful ramp-up of our two new facilities in EMEA will be the key drivers of our ultimate 2023 shipment growth. We started 2023 with a conservative view on annual global beverage shipment trends, and we maintain that conservative second half-weighted view. We have a lot of the year ahead of us, and we look forward to serving our customers' needs. As we sit here today in advance of seeing quantifiable promotional activity, we are proactively managing our beverage operations in North and South America for cash and supply-demand balance as we continue to bring down raw coil and finished goods inventories and return to our just-in-time supply chain management versus the just-in-case supply chain requirement during the pandemic and extended period of higher-than-planned growth for beverage cans. Around the globe, beverage cans continue to win relative to other substrates, and we continue to leverage our customer mix, scale, regional plant networks, innovation, and capable teams across the organization to ensure the best near term, medium term, and long-term outcomes for all our stakeholders. In our aerospace and aluminum aerosol businesses, operational performance and demand for our innovative products and technologies are accelerating. In aerospace, our technologies are well positioned to deliver unimpeachable data and monitoring capabilities for both environmental and national security needs. In our global aluminum aerosol business, we continue to serve new categories and offer reuse refill bottle innovations to a broader set of customers and occasions. As we look ahead, all of our businesses will continue to unlock additional value for Ball stakeholders in 2023 and beyond. Consistent with our prior commentary, in 2023, we remain positioned to deliver our long-term goal of 10%-15% diluted earnings per share growth inclusive of the Russian business sale headwind, we remain well positioned to generate strong free cash flow to deleverage and return value to our fellow shareholders. As we indicated in our prior call, the second quarter will remain choppy in North and South America metal beverage as we continue to work through higher inventory and manage regional production with an eye on cash. In addition, the positive momentum in our EMEA, aerospace, and aluminum aerosol businesses will continue. During the Q&A, Scott and I will strive to provide additional clarity on the external environment and cadence for 2023 based on what we know today. Our global beverage teams continue to position our business to deliver the year and have an eye on the future. For the full year and incorporating year-to-date trends, our customer mix and excluding Russia, we now estimate low single-digit global volume growth for Ball, with North America being slightly down, South America volume up mid-single digits, EMEA volume up mid-single digits plus, and our other non-reportable beverage business volumes up mid to high single digits. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders, and everyone listening today. With that, I'll turn it over to Scott. Thanks, Dan. I'd like to congratulate Dan on his election to Chairman of the Board and thank John for his service as Chairman. Dan was battle tested on many fronts in 2022. He has the skill set and drive to take the company to new heights. First quarter 2023 comparable diluted earnings per share were $0.69 versus $0.77 in the First quarter of 2022. Excluding the notable Russian aluminum packaging business sale headwind, First quarter comparable diluted earnings per share were flat versus the prior year. First quarter sales decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the Third quarter of 2022, currency translation, lower volumes, and the passthrough of lower aluminum prices, partially offset by the passthrough of inflationary costs. In the first quarter, net comparable earnings decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2022, lower volumes in North and South America, and increased interest expense, partially offset fixed cost savings, lower depreciation expense, and SG&A cost out initiatives, as well as the contractual passthrough of inflationary costs. To reiterate our prior earnings call commentary and to help frame some of Dan's earlier comments about chop your second quarter performance in North America and South America's segment earnings, we have been and will continue to proactively manage regional supply-demand balance across our system of plants in the near term. After July, segment earnings will re-accelerate when the majority of the contractual inflation recovery begins and a larger portion of summer selling volume flows through segment results. Also remember, the virtual power purchase agreement settlement recorded in North America's first quarter results will not replicate in the second quarter. We estimate that North America's second quarter segment results will be relatively in line with the $183 million first quarter segment results reported today. In South America, customer and product mix is unfavorably influencing the seasonally slower second quarter. Consistent with our prior commentary, we anticipate a more robust second half in Brazil as customer hedges roll off and the fourth quarter summer selling season kicks in. As we sit here today, some very consistent commentary and key metrics. We ended the first quarter in a solid liquidity position with an excess of one and a half billion dollars in cash and available credit facilities. 2023 CapEx will be in the range of $1.2 billion, driven by cash outflows related to prior years' projects. 2024 CapEx is targeted to be in the range of GAAP D&A levels. We are targeting free cash flow in the range of $750 million in 2023 and focusing on deleveraging. Our 2023 full year effective tax rate on comparable earnings is expected to be in the range of 20%. Full year 2023 interest expense is expected to be in the range of $425 million. While the first quarter corporate costs appear lower than the expected runway, we continue to anticipate full year 2023 corporate undistributed costs recorded in other non-reportable to be in the range of $90 million, with the second quarter costs being higher year-over-year, driven by announced key employee retirement costs. Including the $86 million Russia business sale, operating earnings headwind, comparable operating earnings should increase nearly $200 million, and full year 2023 comparable D&A will likely be in the range of $550 million. As we look forward and incorporating near term demand trends, year-end 2023 net debt to comparable EBITDA is expected to trend in the range of 3.7x, and in future years, we'll drive that lower. Last week, Ball declared its quarterly cash dividend. As Dan mentioned, reducing leverage is our key focus prior to resuming share repurchases in 2024. Rest assured, as fellow owners, we will manage the business through the lens of EVA and cash stewardship. We will effectively manage our supply chain and customers in this current economic climate to secure the best cash, earnings, and EVA outcome for our shareholders. With that, I'll turn it back to you, Dan. Thanks, Scott. Given the economic environment and global dynamics impacting our world, it's a great time for investors to get up to speed on Ball. Our significantly improved plan following a challenging 2022 is kicking in. We produce products that consumers use daily. We deliver unique technologies to analyze, observe, and defend what we value most. Employee owners are showcasing incredible resiliency while delivering earnings, free cash flow, and high-quality innovative solutions to our customers and consumers. As leverage comes down and free cash flow expands, our return of value to shareholders will grow in 2024 and beyond. Thank you to everyone listening today. With that, Tina, we're ready for questions. Thank you. If you would like to register a question or comment, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. One moment please. Our first question comes from Ghansham Panjabi of Baird. Please go ahead. Hi, good morning, everybody. Thank you, operator. Dan, maybe you can just start off with, you know, how the volume outlook by region has changed relative to your forecast 3 months ago. I mean, clearly a lot's changed in the last few weeks, months. Consumer spending in certain regions, including in the U.K., seem to be much weaker. Just curious as to how that's impacted your thought process for the year. Yeah, thanks, Gunjan. I guess where we're at today, it's been largely in line the first quarter and even what we're anticipating in the second quarter. Things that have moved around in regions have been largely related to customer mix. The industry writ large is largely in line. There's been movement in quarters. Some have benefited, some haven't. We've done a little better than the market in Europe. We were a little behind in South America, and we were a little behind in North America. The benefits of what we saw in terms of the things within our control, we outperformed on almost in every spend category, operational efficiency category. That all helped us to effectively manage our earnings profile in the first quarter. We came into the year with a conservative view on things like promotional activity in the first half. We believe that you will see some benefits in the second half from that. Again, we haven't seen it, and we're not counting on a lot of it. We put in place a very conservative volume plan at the outset of the year to underpin our earnings and our cash generation. That's what our focus is. We'll continue to focus there. I don't know if that, if that helps you, but we're not seeing a lot of difference. We're seeing some movements, and some share shifts by customer and by category, but it's largely in line with what we anticipated heading into the year, at least for what we know in the first half. In the second half, I think this business, as you know, requires volume. We're a volume business, so we'll need a little bit of that uptick in the second half of the year. We got a lot of things breaking our way and the things that we can control that'll enable us to, you know, hold the cash and, hold the earnings profile here for the, for the majority of the year. Okay, perfect. Just so, you know, I understand this correctly, so you are benefiting from, you know, inflation recovery this year versus last year, right? Correct. Maybe you can touch on where you're seeing how inflation is tracking this year, 2023 versus 2022. If there is any element of deflation, would that mean that in 2024 you would pass that on to your customers? Just to clarify. Yeah. I'll take a shot at it. Just at a high level, we are definitely seeing some improved inflation in terms of the run rate and the cost structure. To your point, the way these contracts work, keep in mind that the majority of our PPI benefit, specifically in North America, isn't gonna come into the second half of the year. That will carry forward until it laps into the second half of next year. We will maintain the overwhelming majority of the lift that we're seeing on all of these inflationary passthroughs as catch-ups. There will be a limited. Right now, as we're looking at the year-over-year components, it doesn't look like there'll be much movement one way or another, absent what we're counting on for the catch-up from 2022 into 2023. This is, this will be evolving throughout the year depending on where the headwinds or tailwinds on inflation manifest. Scott, anything? No, there's not deflation typically built in our contracts. There might be something unique in certain contracts, you know, where it's tied to maybe an energy index somewhere. In general, we're not seeing deflation. We're seeing inflation slow down. Perfect. Thank you so much. That's usually a really good environment for us. Yep. Yep. Understood. Understood. Thank you. Thank you. Thank you. The next question comes from Christopher Parkinson of Mizuho. Please go ahead. Hi, this is John on for Chris. Thanks for taking my question. Hi, John. Hi. Can you expand on the promotional trends that you're seeing around the globe, particularly in North America? And then also, can you please break down the various categories that you expect to drive growth going forward? Thank you. Sure. You know, promotional activity is really a thing in North America specifically, given the pantry stuffing effects and the larger case packs. We're not seeing much of any right now. I think it's reflected in the performance of our customers in terms of the revenue growth they're seeing and volume being flattish. We're sort of tied to that volume being flattish component. The one thing that is clear in the last 12-18 months is the folks that have taken less price versus inflation or have held pricing, they're the ones growing share. As share becomes more important, which we believe as the year moves on, there will be an opportunity for folks. If they're more focused on share gain, then you will see more activity. I would expect to see, given the performance of beer writ large being down, they have more impetus and a need to push volume than what I'm seeing out of the energy and the non-alcohol spaces. I anticipate a little bit in the second half of the year across the board, but I don't anticipate much. If there's one area where you could see or anticipate some, it will probably be in the area of the alcohol categories and beer specifically because share of stomach is down in that category. Perfect. Thank you so much. I'll turn it over. Thank you. Thank you. The next question comes from George Staphos of Bank of America. Please go ahead. Thank you. Hi, everyone. Good morning. Thanks for the details. Hi, George. How are you doing? I wanted to come back to the question on end markets and trends you'd expect for the rest of this year to the extent that you can comment. One, are there any categories without giving away, you know, information that's proprietary that you expect will be particularly helpful and particularly a headwind to your volume outlook for the rest of the year? Relatedly, you mentioned, Dan, you know, the beer category, there's been lots of news there. You know, what are you seeing in terms of your relative share of beer relative to what is happening to perhaps your mix or your customer mix? Add a couple of follow-ons. Sure. Let me take the second part, the beer question first. As you know, George, you've been following us a long time. We have an overweight in beer, we love all our beer customers, we serve that market. Net, net, I know the specifics, I'm not gonna go into the specifics relative to customers, I will tell you this. How you should look at Ball's portfolio as it relates to beer is, we win when folks drink beer. If there's a mix impact, we may have one customer that's up in a short period of time. There may be a share shift. We pick up both sides of that equation generally. What we are more interested in is the health of the entire category. We believe that beer is going to need to galvanize itself and push in the second half of the year. They're gonna have to promote across the entirety of the industry. On the end market trends, and it's been a long earnings season, so we'll be trying to help your beer consumption later this weekend. Yeah. In the category, in the category space, I don't anticipate any significant wins or significant losses by category. What I In my prior answer to the prior question, I will reiterate, I think there will be share shift that happens in each category depending on the approach that each brand owner takes. Folks that have decided to not pass on price increases aggressively, if you will, have done better on share gain over the last 12 - 18 months. If they've taken a posture where they're gonna pass through a portion but not pass through what everybody else in the category assume, they're the ones that are winning share. Depending on what decision you're making within the category, I think it's gonna be share shift within the category. I think every category is gonna do, well, some will do a little better than others, but it's really gonna be the customers that win within categories. That'll be the determining factor on our volume versus our competitor's volume. George, the only thing I would add is long term, the best positive here is the can is winning. New product introductions are still heavily weighted to cans, and so that bodes well for the can in the long run. We're playing a long game here. Understood. Two questions, I'll turn it over. One, on aerospace, can you talk to the degree that you can sustain the performance that you saw in 1Q after what was, you know, obviously a little bit of a challenging 2022, whether this is kind of a one-off, one quarter, hit or benefit, or you think you can maintain that into the rest of the year and hopefully 2024. Back to beverage cans and capacity, can you talk to what you think operating rates will be this year? Scott, should we really be expecting CapEx in 2024 in the range of $550-$600 based on what you said on D&A? Thank you, and good luck in the quarter. Thank you. Aerospace, I think the way you think about aerospace is that I wouldn't do a run rate on sequential improvement, meaning quarter two being better than quarter one. I would say the quarters year-over-year will be improved. There's real underlying an improvement in performance. In the second half of last year, we had some pretty significant supply chain disruption, that has been fixed. What you saw in the first quarter was a really nice performance execution, and a couple nice breaks in terms of just efficiency gains and just a better run enterprise there, in the first quarter. I think that will continue to be a tailwind in each quarter. It won't be sequential lifts, right? It'll be dependent on the projects and the mix, but that business is poised to have an exceptional year this year. I'll let Scott tackle the efficiency question. George, on the D&A, I said GAAP D&A for CapEx. Okay. Not the comparable operating earnings. Okay. Got it. Got it. Thank you for that. Operating rates this year? Operating rates, we're running our plants. I mean, we are taking downtime, and we're taking more of it in the second quarter to make sure that we're operating at pretty high levels of, you know, above 90%. We'll take downtime in Q2 in North America and South America. South America, that's pretty typical given the seasonality of that business. We're, we're really focused in Q2 on getting our inventories to the right level and so we can run at fairly high operating rates for the year. That will be a drag in Q2. Understood. Thank you, guys. Thanks. Thank you. Thank you. The next question comes from Angel Castillo of Morgan Stanley. Please go ahead. Hey. Sorry, can you hear me? Yes. Hi, Angel. Hey. Hey, thanks for taking my question. Just wanted to follow up on the commentary around downtime in 2Q. Could you quantify what the drag will be from that? Kind of related, as you think about the kind of, you know, just cost or operational leverage that your business has to volumes potentially improving as kind of promotional activity returns, just could you talk about maybe the degree to which some of that is maybe variable and comes back as you bring assets back online versus how much is just, you know, operating leverage that would be upside to that volume? Sure. Well, first of all, congratulations on being a new dad. Thank you. I don't know how quickly, I don't know how quickly Mila can start drinking out of cans that will, that will help to answer the I think the downtime question. In all seriousness, Scott laid it out really well. In South America, you're entering in the off-peak season, so you typically do curtail. The balance of this comment about curtail, there it's curtailment and it's maintenance, so it's planned maintenance. You're gonna have that for certain. Then in North America, our plants performed extraordinarily well in Q1, volumes were a little down versus our expectations, so we carried in a little bit more inventory into the second quarter, we're gonna manage that. We're gonna manage that tightly here for the balance of the year for cash generative purposes. We've got a lot of flexibility in our lines as you know. The curtailment question for us is harder to answer, Angel, I think you know this about us, because we have multiple can sizes on every line. There is one can size that certainly has excess capacity writ large in the North and Central American market. We do have exposure to that, but it's limited. The next question, I think that you were leaning into was there, depending on what the brand is or the product is that's innovating and that's winning, we can flex to that, and we can turn that on. We're in a really healthy position in terms of safety stock. We're in a healthy position in terms of we're performing a heck of a lot better than we have the last couple years in running our business. If things suddenly shift, we've got dry powder, and we've got dry powder in a number of can sizes that gives us flexibility to move into whatever the winning product and whatever the winning brand's gonna be. I'm not concerned about us stepping into upside. And we're gonna manage inventory positions and safety stock levels really with a lot of discipline here in the second quarter. Angel, just to give more granularity in the prepared comments, I said, you know, in North America, we'd essentially be flat sequentially first quarter to second quarter, given the downtime and things that we're going to do and getting our inventories right. In South America, the negative will be larger than that. Given the volume, the mix, and the absorption, it will be softer than it was in Q1. Then we expect to be in a better position as we move into the busier second half of the year. That's very helpful. Thank you. Then just maybe following up on, you know, the strength in the other segment, curious, you talked about corporate, and reiterated the guidance there. Just maybe some of the other pieces, some of the strength you're seeing in aerospace and just what the underlying expectations for that segment, will be kind of for the full year? You know, our aerosol business is doing really well. We continue to win business. We continue to have nice volume growth. That business is seeing You know, during COVID, it was really impacted, I would say, volumes globally, and we're seeing that really come back nicely with some. New products and innovation is driving a lot of that, both kind of in the typical aerosol personal care space, but also in the water space on the refill and reusable side. In aerospace, you know, I think somebody mentioned, we had a choppy year last year. We had supply chain challenges that cost us money, and the business is performing exceptionally well. They're stepping into these newer contracts that we were confident would be good, and they are good, and we'll see the benefits of that for the full year. We're really excited about those businesses. Thank you, gentlemen. Appreciate it. Thank you. The next question comes from Cleve Rueckert of UBS. Please go ahead. Hey, good morning. Thanks for taking my questions. Good morning. Just a couple quick follow-ups from me. I'm just curious, just sort of digging into the inventories a little bit. I'm just curious where inventories, both from a, finished product and raw material standpoint, where they stand versus your target, I guess as of the end of the quarter. If you were building inventories or if you're starting to work them down at this point. We're working in North America and in South America, we're working them down. That's why you see, you know, a big swing in payables. We're not ordering as much metal, both finished goods and raw and coil raw material. We've got another quarter of that to do in Q2, and then we think we'll be in a much better position from an inventory standpoint. In Europe, it's not, you know, we're turning on a couple plants, so it's a very different dynamic there. In North America and South America, it's about getting our inventories down. Right. Is that more on the raw material side? I mean, you mentioned coil. Are there finished product inventories that you need to work down as well? It's both. Yep. Yeah. It's both. I mean, we're. Okay. In North America, we're talking days of finished good inventory. A lot of this, the raw material piece is still a bit of an overhang from last year because we were bringing in a lot and anticipating growth at this time last year. We've held on to larger raw material stores, and we've been working that off. We're continuing to work that off. The finished goods, it's not significantly different than what we anticipated heading into the year. You know, a few days of additional curtailment is meaningful in a quarter, and I think that's what Scott's signaling to you. Yeah. Yeah, I think that's very clear. Just like a quick follow-up. Did you import any cans into North America in the first quarter? No. Okay. That's very clear. One last one from me. On the promotional activity. I'm sorry. Maybe one, maybe this will help for further Q&A regarding that question. We didn't last year either. There was a 2021 - 2022 bridge at each quarter for that, but we've originated all that production last year and you won't have any of that commentary for North America specifically. We did have a little bit of Saudi into Europe last year, and that's now gone away and we've got origination production now in Europe. Okay. Then just the last one for me is on promotional activity, and I appreciate the conservative tone that you're taking and the plan. Just when do you expect to gain visibility? I mean, is there still, at this point in the year, the potential for promotional activity to pick up and have a material impact on volumes? Yes. I mean, absolutely. I mean, if promotion works really well for us from a volume perspective. The degree to which the promotion is, I think, is the big question. We're really not trying to avoid this question, but I think here's the backdrop that we're facing relative to going into much detail or fully understanding the real impacts of what a promotion would look like and how it would react consistent with kind of historical norms. If you look at a 12-pack of CSD cans, three years ago, it was about $4 on average. Today, it's $8. Is $1 off gonna move it? Is $2 off gonna move it? It's not just promotion, it's the elasticity in around the price of the promotion that is very difficult for us to characterize, and I think it's difficult even for our customers probably to understand. At this point, we need to plan to deliver cash and deliver earnings. The end consumer strength or weakness is also something that's very difficult to understand right now, just given the stimulus packages and higher interest rates and all of those things. It's just, it's ambiguous and difficult to quantify right now. We're running for cash, and we're managing what's in front of us. Until something changes substantively, I think that's the best tone for our corporation, our employees to manage to. Yeah, that makes a lot of sense. Good luck with it all. Thank you. Thank you. Thank you. The next question comes from Anthony Pettinari of Citi. Please go ahead. Good morning. This is actually Bryan Burgmeier, filling in for Anthony. Hi, Bryan. Thanks for taking the questions. You bet. The, you know, the, yeah, $28 million tailwind from the power agreement settlement in 1Q, you know, was that part of pull your guidance originally? You know, I don't remember hearing that on the 4Q earnings call. When you talk about North America being kind of flat quarter-over-quarter, do I assume this means it'll actually be like up on an apples-to-apples basis? Because I don't expect this tailwind to repeat in 2Q. Is that accurate? You are correct. It will be up year-over-year, but flat with the first quarter. In terms of the virtual power purchase agreement and when we had our previous call, we were negotiating the settlement of it, so we weren't really gonna discuss it. Part of that was built into our first quarter numbers because we knew we were going to settle it, we just didn't know what the amount would be. That amount would have run through our P&L over time and in last year. The provider wanted to exit the contract, and we were able to extract a very favorable outcome for us. All of that outcome hit us, you know, benefited us in the first quarter, but that will not repeat. We've entered into other virtual power purchase agreements to make up for the lost clean energy that we were buying. We're in a pretty good spot. Okay. Understood. Thank you for that detail. Last question for me. You know, in March, you announced you were having some discussions about the possible closure of the Wallkill plant. I'm just wondering, you know, how are those discussions going? Kind of based on, you know, what you know right now, what you can say right now, is it possible to say, you know, when or if that plant will close? Yeah. I would say in terms of filling out your model, I wouldn't count on anything in 2023 relative to an uptick in fixed cost savings. We said we were entertaining closing it. I think we are committed to closing that facility now. That's a subtle change. The other thing is there's just not a lot to talk about at this point because we're entering into effects bargaining now. As we know more, we'll update you. You'll see capacity coming out at some point this year, and you'll see that tailwind in 2024 is what I would anticipate, but I don't know the specifics of it at this time. Okay. Yeah. Thanks a lot for that detail, Dan. You bet. Good luck in the quarter. Thank you. Thank you. The next question comes from Arun Viswanathan of RBC. Please go ahead. Great. Thanks for taking my question. Congrats on the strong quarter. Thank you. I guess first off, in North Central America in the Americas region or North Central America, you're able to kind of hit very high levels of segment income in Q1 that I thought would be more likely to materialize in Q2. Just wondering, now as you look into Q2, you expect kind of flat performance there? Maybe you could comment also on Brazil. Obviously, we've seen some inroads on the glass side, what are your expectations, I guess, as far as substrate mix as you look into Brazil for the rest of the year? Thanks. Yeah. I'd say in North and Central America, what you're seeing is all the hard work from last year in terms of cost out. You see our SG&A is much lower. The plants are operating better. You know, we're I think we're getting our groove back with how we operate. It performed at or above our expectations, too. We expected softer volume, and our game plan is to perform very well, even if volumes are soft. That's exactly what you're seeing. You know, we got a benefit of that virtual power purchase agreement in the first quarter that won't repeat, but we'll keep earnings relatively flat, and that's due to improved performance across the business. In terms of the glass versus aluminum substrate penetration or shift that we've seen here in the last 12 - 18 months, it's in line with what's happened historically. In a higher inflationary environment, you do see a return to returnable glass, somewhere in that five to six, 7% share shift. That's what we saw last year. As Scott indicated in his comments at the outset, and I think we characterize what we believe too, in the second half, as inflation dissipates and some of the actual cost and hedge positions of our customers down in Brazil allow them to step into what the true costs of aluminum are. We're anticipating a strong peak season that'll show up in the second half of Q3 and Q4 for us. We're not hearing anything different. I'll actually be down in South America next week, so, I anticipate to hear more of the same. I don't see it as a permanent shift, I guess, would be the answer if that's the underlying question there. Great. Thanks. As a follow-up on Europe, you know, I guess, was there any work done on your side, to renegotiate contracts for energy or any other cost items? Is there any requirement, extra work you have to do on that side, or not necessarily? A lot of that was already done. The European business has done a really good job, both on the commercial front and the supply chain front, to manage our costs. You're seeing that in their performance, too. I think both in that business and equally excellent job by our aerosol business, which has a significant presence in Europe. Both of those businesses and both of those management teams have done an extraordinary job to work as partners with our customers to get to a good medium and longer-term outcome as we manage through a very different energy and inflationary backdrop in Europe. I think we've done the right thing by our customers and our teams have done the right thing by our stakeholders. Great. Thanks a lot. Thank you. The next question comes from Mike Roxland of Truist. Please go ahead. Thank you, Dan, Scott, and congrats on. Hi, Mike. solid quarter, given those items. Hey there. Thanks. Just some quick ones from me. Just in terms of the guide, the EPS guide for North America, it's particularly being similar to Q2. What type of volume growth is that embedded? Does that embed a slightly down expect for the year? If so, could there be upside to the forecast if you do actually start to see some promotional activity here on? Yeah. You, you were a bit choppy there, but I think the question is kind of what's the underlying demand profile or assumption built into our current North America projection. You're, you're correct. We believe it will be slightly down at this point as we look out over the course and the balance of the year, given really very little insight into the actual decision or process related to pricing and volume. You know, it's a volume business at the end of the day, and we're gonna need some. The teams. All of the cost actions we took, all of the fixed cost actions that we took, as difficult as those were, all of those give us the ability to execute against our earnings and our cash profile, more importantly, based on kind of a flat to slightly down volume profile. That's what we currently anticipate, and that's what's in our model. Second half weighted in terms of things like the PPI passthrough mechanisms and even some additional cost savings that we anticipate in the second half of the year. Yeah, it's second half-weighted plan, whether volume moves meaningfully off of our current run rate, that would be upside, correct. We would, yeah, we look forward to seeing that upside. We can step into it, as I commented earlier in the call on both safety stock and our operational and performance. There's room for upside, but we need to see that, the end consumer health and pricing behavior, will play a role and a significant role in that. Got it. Just one quick follow-up is on in terms of South America, and you mentioned them being a little bit behind the market. Was part of that being behind the market due to the bankruptcy of a large beer producer down there? And then if you were behind the market, just, you know, any updated thoughts on the plants that you've idled in Brazil, like Frutal and others, and whether they could ultimately become permanent closures? Yeah. The only permanent closures we've had, we've announced, so we've got dry powder in that marketplace. Some of these assets are being contemplated to open back up depending on what happens in the market. As you indicated, there was share shift in Q1. There was one of our competitors benefited because they had outweighed exposure to one of the beer brands there. A weaker beer customer or beer mix may shift around as it does from time to time. We believe that the customer relationships that we have, they're excited about the second half of the year, more so for the cost shift and their hedges rolling off and us being able to step into our aluminum profile. Yeah, it was a little choppier because of customer mix for us in the first quarter. We didn't have any exposure to the customer that went bankrupt. Got it. Very clear. Good luck in 2Q. Thank you. Thank you. The next question comes from Philip Ng of Jefferies. Please go ahead. Hey, guys. congrats on a solid quarter in a pretty tough demand environment. Thank you. I guess that'd be helpful. Dan, I think it'd be helpful to kind of give us some color in terms of how inter-quarter volume trends kind of settle throughout, you know, North America and Central America, how April's kind of shaping up, and do you kind of expect more of the same effectively in 2Q in terms of the volume trends? Yeah. Thanks for the I do. In fact, it's probably a little softer than Q1, that's anticipated, we're managing against that. Yeah, as we sit here today, there's not a lot of movement by the customer base to shift what's currently happening. April is usually not the month that you usually see activity. You know, you get to the second half of May and June, that becomes really important as you head into peak season. As we sit here today, I think the way you characterize it is correct. It's largely in line with Q1, and pockets, depending on customer mix, maybe a bit softer. Gotcha. Then for Latin America, Central America. Yeah. You're expecting, if I heard you correctly, Dan, mid-single-digit growth. That would imply a pretty sizable ramp in the back half. You know, part of this, it sounds like it's predicated on the view that maybe your customers, you know, lean into, you know, aluminum hedges rolling off. How much line of sight do you have? I mean, like, just like promotions in North America, it's been tough to predict. How much line of sight do you have that your customers would behave as such and will help you kinda jumpstart that demand backdrop because it's been pretty choppy in Brazil? No. I think it's a great question, it is. We built our plan on it second half loaded because of everything that you just outlined and indicated. The conversations that we're having with our customers, I'll be down there next week, has all been, "Yep, you should count on that." That's what they're planning for, but plans aren't absolute. At this point, I haven't heard anything. I don't have any insight that would suggest anything other than what we've laid out, what we've characterized. I think your point's valid. I mean, there's certainly risk in a significantly elevated volume position, but our contracts also have backstop provisions in there that give us a little bit more teeth than maybe in years past. Okay. Sorry, just to sneak one more in. North America, you're expecting volumes to be flat to down a little bit. Any color in the back half what that assumes? Is it more like flat? Is it still down a little bit or maybe inflect a little bit up in the back half for North America? Yeah. It's right now, how we get there is slight declines in the first half and flattish in the back half. I think there's- Okay. There's opportunity for more to happen in the back half, but that's not what's built in our current plan. Okay. I think that's more than reasonable. Thank you. Yeah. Thank you. Thank you. The next question comes from Mike Leithead of Barclays. Please go ahead. Great. Thanks. Good morning, guys. I just wanted to actually follow up on Bill's last question there. I'm just thinking about the North America earnings cadence for the year. I think, Scott, you were fairly clear on the 2Q outlook. But just how should we think about the magnitude of the second half step up just as you think about the new contracts rolling in? Well, we get more of the PPI in the back half of the year. Let's face it, the Q4 comp was pretty easy for last year, we should do meaningfully better than Q4 of last year, which was not very good. But I would see, you know, we had a pretty good third quarter last year, really in terms of performance in North America. It's definitely back half weighted with most of it in the fourth quarter. Got it. Fair enough. Second, briefly, you talked a lot about North America and South America earnings outlook, but could you maybe speak to the earnings outlook for EMEA into the second quarter and beyond? Yeah, Europe is really. You know, we've got the headwind of Russia. You know, that was $32 million in the first quarter. It's $40 million in the second quarter. It moderates to $14 million in the third quarter. You've got that headwind each of the, you know, the next couple quarters, second quarter being the largest headwind because Russia performed really well last year in 2022. All of the things that they've been doing from a cost standpoint, from a contract standpoint, from an inflation pass-through standpoint, have been positive, and they're seeing nice volume, and we've got, you know, new plants coming up. We feel really good about the European business for the full year. Yeah, I think how you, how you look at Europe is FX stabilize, inflation stabilize, big headwind first half of the year in terms of operating earnings from the divestment of Russia. You step into the two new facilities in the second half of the year, and we're still seeing growth in that, in that business on improved contractual terms. It'll be continued improved performance once you step out of the second quarter with the, with the drag from a $40 million Q2 in Russia. Great. Thank you. Thank you. The next question comes from Kyle White, Deutsche Bank. Please go ahead. Hey, good morning. Thanks for taking the question. I wanted to focus on beverage can, new product introduction. You know, a lot of uncertainty in the economy. Consumers also kind of pulling back a little bit on the spend. Are you seeing any reduction in new product offerings or introductions from your customers? Understanding that the can obviously wins a greater share of this, but some of these new products in energy, alcoholic, and ready-to-drink space have been key to the growth. Just curious what you're seeing there. Yeah, Kyle, first of all, congratulations. A lot of the information we're getting on new product innovation is coming from Vaughn, your new baby girl. boy, sorry. Yeah. Appreciate it. No worries. Yeah, he. I'm sure what he's gonna be wanting is ready-to-drink cocktails and nutritional energy drinks. In all seriousness, lots of innovation still happening, and continuing to see share gains, you know, from our ready-to-drink cocktails. I think a couple customers have really benefited in that space. There's almost a forcing mechanism here. Like, if beer is declining, those alcohol companies or new beverage companies are gonna have to step into things to sell, and they're innovating at the fastest rate. We've seen some of the historical CSD companies that have introduced alcoholic beverage, and they've really done well. The other part of this is, there's a greater opening as the price increases have been the lever with which folks have pulled, our customers have pulled. It creates a disruptive space for innovation to come in. That's always what we've seen. It's ripe for more innovation and more disruption, and you're starting to see that. Now that we have cans available, cans will win, those tailwinds will manifest here more in the medium term, we're having all those conversations. I think that will continue to be a benefit and a tailwind for the can. Still seeing new product introductions at those 70+% levels. Nothing's changed in terms of that. The can continues to win. We're excited about the future prospects and new product introductions. In fact, Kyle, today we have one of the leading beverage innovation houses is actually visiting us here in Colorado today. We're really excited to be working with them and all kinds of folks with new ideas and new beverage categories. Got it. I appreciate the remarks. Maybe a soft seltzer here for the little guy here shortly. Next question I want to focus on the startups related to Europe. Just curious how the U.K. and the Czech Republic plant are doing and any kind of, you know, how the ramp-up there is going and any startup costs to call out? No, I'll leave it to Scott. No, I don't think anything meaningful on the startup cost. They're right on track. The teams have done a great job. We've got sister plant concepts in terms of training, so we've brought folks in. They're helping us out in the other local facilities, so they'll be well-trained and ready to step in on day one, when we have production and operation. We probably had about $5 million of cost, startup costs in the first quarter. There'll be more of that in the second quarter. I was just looking last night, actually, at the startup curve for each of those plants, and it's been phenomenally well-executed. We're right on where we thought we would be, and we're real happy with the performance and the execution of those projects. Thank you. Appreciate the details. Thank you. Thank you. The next question comes from Gabe Hajde of Wells Fargo. Please go ahead. Dan, Scott, good morning. Congrats. Morning. Thanks. I have a question about sort of just the full year and then the second quarter cadence, excuse me. I feel like there's a decent amount of noise in sort of the just underlying performance, having, you know, you talk about a stable business, but North Central America profit being up almost 2x from 4Q, and I appreciate that was an odd quarter. Scott, the math you gave us on being 3.7 x levered by the end of the year, if I subtract out $750 of cash plus the $260 million of dividends, that implies $2,150 of EBITDA. Is that the right way to think about it? Sequentially, would you expect EBITDA to be up or down relative to the first quarter? I, for the first side of your question, I would say you're directionally correct, where you're coming out. On the second part, are you speaking to the second quarter EBITDA? Correct. Yeah. No, the second- Just looking at it. The second quarter EBITDA will be down. Okay. It'll accelerate in the back half of the year. We explained both, you know, we got a $40 million drag from Russia. We're getting our inventories right in South America, so we'll take absorption hits. We'll have negative mix in the second quarter. In the second quarter in North America, the plants will perform very well, and we'll make more money than we did last year, but we don't have the VPPA thing that we had in the first quarter. I think I explained exactly how it should shake out. Understood. Scott, probably one for you on the balance sheet and cash flow that you're talking about. Unless my model is wrong, your days payable are at 130, which is pretty good. I mean, I expect you guys wouldn't wanna get extended out that long yourselves. Is there anything that we should be mindful of thinking about that being a potential drag on cash flow in future years? I think you have a $1 billion of debt due in November. Is any change in the potential rate on that included in the $425 of interest expense? Thank you. No, it's the rate. The 425 is kind of built in with any actions that we would take and when we would take those actions to deal with the maturity in November. You know, we'll generate a lot of cash in the back half of the year, so our debt pay down really doesn't happen. This is kind of the peak leverage right now in kind of April, May timeframe. Stays fairly even until through June, and then it starts to come down, but most of it will come down in the fourth quarter. That interest expense assumed kind of anything we might do on the debt front. What was the other part of the question? You know, I think implied in that statement is, yeah, we recognize that we'll be retiring cheaper debt than we'd be stepping into at this point in November, and that's anticipated in Scott's number. Yeah. Next year, we're gonna delever more. I think we can both delever and start buying back some stock next year, sure, in a higher interest rate environment, you know, you probably want a little less debt. The world is starting to stabilize, that's good. You know, I'm a hell of a lot older than you, Gabe. These rates are still not that scary. I was around when we were doing 8%, 9% debt. You know, 6% debt's really not... It's something we have to deal with, but it's not something that changes the direction or changes what we're doing. Right. Understood. Thank you. Then the other question was on the days payable or just working capital in general. Oh, yeah. I'm seeing days payable at 130 days. Yeah. I think, you know, we gotta manage both the supply side and the customer side from a working capital standpoint, and we do that every day. Every new contract negotiation, those are key points. It's not just about price and volume, terms matter. We focus on that every day, and we have meetings on cash flow every month. We're very keen and focused on it. Yeah, in a higher interest rate environment, anything that has, you know, a time element of money, is more expensive. Thank you. Yep. Thank you. Our final question comes from Adam... Oh, pardon me. Go ahead. Yeah. Thank you. I said, yeah, one more question and then I appreciate it. Perfect. It's Adam Samuelson with Goldman Sachs. Please go ahead. Thank you, I appreciate y'all squeezing me in. You bet. There's a lot of ground we covered. Maybe just going back to EMEA. Appreciate the kind of noise on a year-on-year basis with Russia and the prior year results. You have disclosed what the non-Russia EBIT was in the prior year. How do we think about that business on an organic profit on a like-for-like profit basis? Progressing over the balance of the year, as we think about the new capacity in Czech Republic and the U.K., layering in the second half, kind of the underlying volume growth that carries over into 2024 without broader market kind of expansion. You know, the game plan really for Europe this year is to be able on a euro basis to replace those Russian earnings that we had for nine months last year. If we can do that's a hell of an accomplishment because Russia was a very nice, profitable business. If they can do that, I think that's victory. They've done a great job of managing their cost structure, managing their contracts, managing the supply chain. We're real happy with the performance of the EMEA business. Yeah. I think in the simplest terms, the plan that we've set out this year, inclusive of Russia, would be we're gonna make significantly more money on less volume, and we're gonna generate more cash. A lot of that's coming from Europe's ability to offset the $80+ million of comparable operating earnings in Europe. They've got a significant plan for improvement, and they're off to a good start executing against that. They've been the business that they've done extraordinarily well here since we acquired that business from Rexam. They've continued to deliver against plan. The only time I think we didn't was when we had a global pandemic. We're feeling pretty confident in that team's ability to deliver. Got it. The carryover on volume into 2024 from the new facilities? It would be in the range on those two facilities, in the range of 2 billion units. Okay. That's. It's all really helpful color. I appreciate it. Thank you. Thank you. I think with that, we'll look forward to talking to you here in another quarter. Thanks for everybody's attention and participation today on the call. Thank you. This does conclude the conference for today. We thank you for your participation, and ask that you please disconnect your lines. Thank you. Have a good day.