Ardagh Metal Packaging S.A. - Second Quarter 2023 Results

LUXEMBOURG, July 27, 2023 /PRNewswire/ -- Ardagh Metal Packaging S.A. (NYSE: AMBP) today announced results for the second quarter ended June 30, 2023.

Oliver Graham, CEO of Ardagh Metal Packaging, said:

"We experienced a challenging quarter against a global backdrop of sustained inflationary and household financial pressures, impacting on consumer demand. This was particularly the case in Brazil, where we expect market pressures to persist in the near-term. Our performance in Europe proved resilient, supported by improved input cost recovery, and was modestly ahead of expectations. In North America we recorded strong shipment growth and forward momentum, driven by the ramp-up of our contracted new capacity. However, our North America profitability was negatively impacted by action to right-size our inventory position that helped underpin a strong cashflow performance. We continue to prudently manage our capacity ahead of a demand recovery and look forward to strong second half 2023 earnings growth resumption. With our growth investment program completing in 2023, we are strongly positioned to capture future growth and to demonstrate the long-term earnings power and cash-generation of our business".

• Global beverage can shipments grew by 5% in the quarter, driven by growth of 8% in the Americas and 2% in Europe. North America grew by 18%, as new contracted volumes came onstream, more than offsetting weaker than expected shipments in Brazil.
• Adjusted EBITDA of $151 million for the quarter represented a 17% decrease on the same quarter last year.
• In the Americas, Adjusted EBITDA declined by 28% to $87 million, despite higher shipments in the region, due to higher operating costs, a temporarily less favorable mix of cans/ends, weaker Brazil shipments as well as managed inventory reduction in North America. We continue to expect a gradual recovery in demand and, having largely completed our investment program, continue to focus on opportunities to enhance our network efficiency.
• In Europe Adjusted EBITDA increased by 5% to $64 million as the contribution from increased shipments and good progress on cost pass-throughs more than offset higher costs. Network cost structure and efficiency to be improved through the planned closure of remaining steel lines in Germany later this year.
• Ongoing curtailment action to balance network capacity ahead of a recovery in demand conditions.
• Total liquidity of $519 million at June 30, 2023 reflecting initiatives which yielded a working capital inflow of $171m for the quarter (Q2 2022: $70 million outflow). Full year 2023 working capital net inflow guidance raised to $150 million.
• Reiterate expectation for positive Adjusted Free Cash Flow generation in 2023, supported by a sharp reduction in growth capex cashflow to below $0.3bn in 2023 (2022: $0.5bn), with a further reduction to c. $0.1bn in 2024 and beyond.
• Regular quarterly ordinary dividend of 10c announced, in line with guidance for an annual dividend of 40c per share.
• Progress on sustainability initiatives, including certification by the Aluminium Stewardship Institute (ASI) of the Manaus facility and the regional central office in Sao Paulo in Brazil, as well as the publication of the second Green Bond report, highlighting the bond's contribution to eligible green projects.
• 2023 outlook: shipment growth of mid-single digits and full year 2023 Adjusted EBITDA of $630-640 million. Third quarter Adjusted EBITDA expected to be between $170-175 million (Q3 2022: $140 million reported; $143 million at constant currency).

Group Performance

Group

Revenue decreased by $48 million, or 4%, to $1,255 million in the three months ended June 30, 2023, compared with $1,303 million in the same period last year, on both a reported and constant currency basis. The decrease in revenue was primarily driven by the pass through to customers of lower input costs and unfavorable volume/mix effects (lower ends volume).

Adjusted EBITDA decreased by $30 million, or 17%, to $151 million in the three months ended June 30, 2023, compared with $181 million in the same period last year, on both a reported and constant currency basis. The decrease in Adjusted EBITDA was principally due to higher operating costs and input costs headwinds, partly offset by positive volume/mix effects.

Americas

Revenue decreased by $70 million, or 9%, on both a reported and constant currency basis, to $700 million in the three months ended June 30, 2023, compared with $770 million in the three months ended June 30, 2022. The decrease in revenue principally reflected the pass through of lower input costs and unfavorable volume/mix impacts (lower ends volume).

Adjusted EBITDA decreased by $33 million, or 28%, on both a reported and constant currency basis, to $87 million in the three months ended June 30, 2023, compared with $120 million in the three months ended June 30, 2022. The decrease was primarily driven by higher operating costs, input cost headwinds and unfavorable volume/mix effects (lower ends volume).

Europe

Revenue increased by $22 million, or 4%, on both a reported and constant currency basis, to $555 million in the three months ended June 30, 2023, compared with $533 million in the three months ended June 30, 2022. The increase in revenue was principally due to the pass through of higher input costs and favorable volume/mix effects.

Adjusted EBITDA increased by $3 million, or 5%, on both a reported and constant currency basis, to $64 million in the three months ended June 30, 2023, compared with $61 million in the three months ended June 30, 2022. The increase in Adjusted EBITDA was principally due to favorable volume/mix effects, partly offset by input cost headwinds and higher operating costs.

Earnings Webcast and Conference Call Details

Ardagh Metal Packaging S.A. (NYSE: AMBP) will hold its second quarter 2023 earnings webcast and conference call for investors at 9.00 a.m. EDT (2.00 p.m. BST) on July 27, 2023. Please use the following webcast link to register for this call:

Webcast registration and access:

https://event.webcasts.com/starthere.jsp?ei=1623232&tp_key=6552d04b96

Conference call dial in:

United States/Canada: +1 800 289 0438
International: +44 330 165 4027
Participant pin code: 7626398

An investor earnings presentation to accompany this release is available at https://www.ardaghmetalpackaging.com/investors

About Ardagh Metal Packaging
Ardagh Metal Packaging (AMP) is a leading global supplier of infinitely recyclable, sustainable, metal beverage cans and ends to brand owners. A subsidiary of sustainable packaging business Ardagh Group, AMP is a leading industry player across Europe and the Americas with innovative production capabilities. AMP operates 24 production facilities in nine countries, employing more than 6,300 employees and had sales of $4.7 billion in 2022.

For more information, visit https://www.ardaghmetalpackaging.com/investors

Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts and are inherently subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this release. Certain factors that could cause actual events to differ materially from those discussed in any forward-looking statements include the risk factors described in Ardagh Metal Packaging S.A.'s Annual Report on Form 20-F for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (the "SEC") and any other public filings made by Ardagh Metal Packaging S.A. with the SEC. In addition, new risk factors and uncertainties emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual events to differ materially from those contained in any forward-looking statements. Under no circumstances should the inclusion of such forward-looking statements in this release be regarded as a representation or warranty by us or any other person with respect to the achievement of results set out in such statements or that the underlying assumptions used will in fact be the case. Therefore, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking information presented herein is made only as of the date of this release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014. The person responsible for the release of this information on behalf of Ardagh Metal Packaging Finance plc and Ardagh Metal Packaging Finance USA LLC is Stephen Lyons, Investor Relations Director.

Non-IFRS Financial Measures
This release may contain certain financial measures such as Adjusted EBITDA, Adjusted operating cash flow, Adjusted free cash flow, net debt and ratios relating thereto that are not calculated in accordance with IFRS. Non-IFRS financial measures may be considered in addition to IFRS financial information, but should not be used as substitutes for the corresponding IFRS measures. The non-IFRS financial measures used by Ardagh Metal Packaging S.A. may differ from, and not be comparable to, similarly titled measures used by other companies.

Related Footnotes

(1) For a reconciliation to the most comparable IFRS measures, see Page 9.

(2) Cash from/used in operations for the three and six months ended June 30, 2023 is derived from the aggregate of Adjusted EBITDA as presented on Page 9 less working capital inflows of $171 million (six months: outflows of $175 million) and other exceptional cash outflows of $20 million (six months: $32 million). Cash from operations for the three and six months ended June 30, 2022 is derived from the aggregate of Adjusted EBITDA as presented on Page 9, working capital outflows of $70 million (six months: $395 million) and other exceptional cash outflows of $20 million (six months: $34 million).

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SOURCE Ardagh Metal Packaging S.A.