Ardagh Metal Packaging S.A. - Second Quarter 2024 Results

Rhea-AI Summary

Ardagh Metal Packaging S.A. (NYSE: AMBP) reported strong Q2 2024 results, with Adjusted EBITDA increasing 18% to $178 million, exceeding guidance. Global beverage can shipments grew 3%, driven by 5% growth in Europe. Revenue remained stable at $1,259 million. The company improved its 2024 outlook, projecting shipments growth approaching mid-single digits % and full-year Adjusted EBITDA of $640-660 million. Key highlights:

• Americas Adjusted EBITDA up 14% to $99 million
• Europe Adjusted EBITDA up 23% to $79 million
• Total liquidity improved to $405 million
• New $300 million secured financing commitment from Apollo
• Quarterly dividend of $0.10 per share announced

Positive

• Adjusted EBITDA increased by 18% to $178 million, exceeding guidance
• Global beverage can shipments grew 3%, with 5% growth in Europe
• Improved 2024 outlook with shipments growth approaching mid-single digits %
• New $300 million secured financing commitment from Apollo
• Total liquidity improved to $405 million

Negative

• Revenue remained flat at $1,259 million
• Brazil volumes impacted by temporary customer mix effects
• Higher operating costs in Europe partially offset positive effects

Insights

Financial Analyst

Ardagh Metal Packaging's Q2 2024 results demonstrate solid performance with notable improvements in key financial metrics. Revenue remained relatively flat at $1,259 million, but Adjusted EBITDA saw a significant increase of 18% to $178 million. This growth in profitability is particularly impressive given the challenging macroeconomic environment.

The company's performance was driven by several factors:

• Global beverage can shipments grew by 3%, with Europe showing strong growth of 5%
• Improved input cost recovery, especially in Europe
• Lower plant operating costs in the Americas
• Favorable volume/mix effects in both regions

The improved guidance for full-year 2024 Adjusted EBITDA to $640-660 million signals management's confidence in the company's trajectory. The new $300 million secured financing commitment from Apollo will further strengthen AMP's liquidity position without impacting net leverage.

However, investors should note that despite the improved Adjusted EBITDA, the company still reported a small loss per share of $0.01. This suggests that while operational performance is improving, there may still be challenges in translating this into bottom-line profitability.

Market Research Analyst

The beverage can market appears to be showing resilience and growth, as evidenced by AMP's volume increases. The 5% growth in Europe is particularly noteworthy, indicating strong demand in this region. This aligns with broader trends towards sustainable packaging solutions, as metal cans are highly recyclable.

In the Americas, the 3% growth in North America, despite a strong prior year comparable, suggests a robust market. However, the temporary customer mix effects in Brazil during the off-season highlight the importance of geographic diversification in managing market fluctuations.

The company's ability to pass through lower input costs to customers while maintaining profitability demonstrates strong pricing power and effective cost management. This is important in an inflationary environment and speaks to AMP's competitive position in the market.

The anticipated reduction in growth capex to approximately $100 million in 2024, with further reductions expected in 2025, suggests that AMP is transitioning from a growth phase to a focus on efficiency and cash flow generation. This could be positive for investors looking for more stable returns and potential for increased shareholder distributions in the future.

LUXEMBOURG, July 25, 2024 /PRNewswire/ -- Ardagh Metal Packaging S.A. (NYSE: AMBP) today announced results for the second quarter ended June 30, 2024.

		Three months ended
		June 30, 2024		June 30, 2023		Change		Constant Currency
		($'m except per share data)
Revenue		1,259		1,255		-		-
Profit/(loss) for the period		2		(10)
Adjusted EBITDA (1)		178		151		18 %		18 %
Loss per share		(0.01)		(0.03)
Adjusted earnings per share (1)		0.06		0.04
Dividend per ordinary share		0.10		0.10

 

Oliver Graham, CEO of Ardagh Metal Packaging (AMP), said:

"Our strong earnings performance, reflected in double-digit Adjusted EBITDA growth in both regions, delivered a second successive outperformance against our quarterly guidance. Volume growth, strong input cost recovery and lower plant operating costs drove sequentially improved Adjusted EBITDA growth. Strong performance in Europe underpinned our outperformance in the quarter and continued growth in the region gives us the confidence to improve our guidance range for Adjusted EBITDA growth in 2024."

• Global beverage can shipments grew 3% in the quarter driven by strong growth of 5% in Europe, with Americas growth of 1%. North America grew by 3%, versus a strong prior year comparable, supported by contracted new volumes. Brazil volumes were impacted by temporary customer mix effects, during off-season, as the industry backdrop continues to strengthen.
• Adjusted EBITDA of $178 million for the quarter was ahead of guidance and represented a 18% increase versus the prior year quarter.
• In the Americas Adjusted EBITDA for the quarter increased by 14% to $99 million driven by favorable volume/mix and lower operating costs.
• In Europe Adjusted EBITDA for the quarter increased by 23% to $79 million, principally due to favorable volume/mix and stronger input cost recovery, partly offset by higher operating costs.
• Total liquidity improved to $405 million at June 30, 2024, ahead of expectation. Growth capex to reduce to approximately $100 million in 2024 – in line with prior guidance - with a further reduction anticipated in 2025.
• Modest deleveraging expected in 2024, versus end 2023 position, through Adjusted EBITDA growth and lease principal repayments, with a more meaningful reduction thereafter. Full year 2024 Adjusted Free Cashflow anticipated to be broadly in line with prior expectations.
• Announcing new $300 million secured financing commitment from Apollo directly to AMP, which will further strengthen liquidity in H2 and supplement expected seasonal cash inflows. Financing is expected to be neutral to net leverage.
• Regular quarterly ordinary dividend of 10c announced. No change to capital allocation priorities.
• 2024 outlook improved: shipments growth approaching mid-single digits % and full year 2024 Adjusted EBITDA in the range of $640-660 million (from $630-660 million prior guidance).
• Third quarter Adjusted EBITDA expected to be of the order of $185 million (Q3 2023: $171 million reported and constant currency basis). 

Financial Performance Review Bridge of 2023 to 2024 Revenue and Adjusted EBITDA
Three months ended June 30, 2024
Revenue		Europe		Americas		Group
		$'m		$'m		$'m
Revenue 2023		555		700		1,255
Organic		6		(7)		(1)
FX translation		5		—		5
Revenue 2024		566		693		1,259
Adjusted EBITDA		Europe		Americas		Group
		$'m		$'m		$'m
Adjusted EBITDA 2023		64		87		151
Organic		15		12		27
FX translation		—		—		—
Adjusted EBITDA 2024		79		99		178
2024 margin %		14.0 %		14.3 %		14.1 %
2023 margin %		11.5 %		12.4 %		12.0 %
Six months ended June 30, 2024
Revenue		Europe		Americas		Group
		$'m		$'m		$'m
Revenue 2023		1,041		1,345		2,386
Organic		(16)		8		(8)
FX translation		22		—		22
Revenue 2024		1,047		1,353		2,400
Adjusted EBITDA		Europe		Americas		Group
		$'m		$'m		$'m
Adjusted EBITDA 2023		113		168		281
Organic		7		22		29
FX translation		2		—		2
Adjusted EBITDA 2024		122		190		312
2024 margin %		11.7 %		14.0 %		13.0 %
2023 margin %		10.9 %		12.5 %		11.8 %

 

Group Performance

Group

Revenue increased by $4 million, on a reported basis, to $1,259 million in the three months ended June 30, 2024, compared with $1,255 million in the three months ended June 30, 2023. On a constant currency basis, revenue is consistent with the prior year, principally due to the passthrough of lower input costs to customers offsetting favorable volume/mix effects.

Adjusted EBITDA increased by $27 million, or 18%, to $178 million in the three months ended June 30, 2024, compared with $151 million in the three months ended June 30, 2023. On a constant currency basis, Adjusted EBITDA increased by 18%, principally due to higher input cost recovery and favorable volume/mix effects, partly offset by higher operating costs.

Americas

Revenue decreased by $7 million, or 1% to $693 million in the three months ended June 30, 2024, compared with $700 million in the three months ended June 30, 2023. The decrease in revenue principally reflected the pass through of lower input costs to customers, partly offset by favorable volume/mix effects.

Adjusted EBITDA increased by $12 million, or 14% to $99 million in the three months ended June 30, 2024, compared with $87 million in the three months ended June 30, 2023. The increase was primarily driven by favorable volume/mix effects and lower operating costs.

Europe

Revenue increased by $11 million, or 2%, to $566 million in the three months ended June 30, 2024, compared with $555 million in the three months ended June 30, 2023. On a constant currency basis, revenue increased by 1%, principally due to favorable volume/mix effects, partly offset by the pass through of lower input costs to customers.

Adjusted EBITDA increased by $15 million, or 23%, to $79 million in the three months ended June 30, 2024, compared with $64 million in the three months ended June 30, 2023. On a constant currency basis, Adjusted EBITDA increased by 23%, principally due to higher input cost recovery and favorable volume/mix effects, partly offset by higher operating costs.

Earnings Webcast and Conference Call Details

Ardagh Metal Packaging S.A. (NYSE: AMBP) will hold its second quarter 2024 earnings webcast and conference call for investors at 9.00 a.m. EDT (2.00 p.m. BST) on Thursday July 25, 2024. Please use the following webcast link to register for this call:

Webcast registration and access:

https://event.webcasts.com/starthere.jsp?ei=1677398&tp_key=5b40bc06f6

Conference call dial in:

United States/Canada: +1 800 289 0438
International: +44 330 165 4027
Participant pin code: 8753981

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 23 production facilities in nine countries, employing approximately 6,300 employees and had sales of $4.8 billion in 2023.

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, 2023 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® Accounting Standards. 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.

Unaudited Consolidated Condensed Income Statement for the three months ended June 30, 2024 and 2023
		Three months ended June 30, 2024						Three months ended June 30, 2023
		Before exceptional items		Exceptional items		Total		Before exceptional items		Exceptional items		Total
		$'m		$'m		$'m		$'m		$'m		$'m
Revenue		1,259		—		1,259		1,255		—		1,255
Cost of sales		(1,081)		(9)		(1,090)		(1,109)		(37)		(1,146)
Gross profit		178		(9)		169		146		(37)		109
Sales, general and administration expenses		(76)		(1)		(77)		(60)		(3)		(63)
Intangible amortization		(37)		—		(37)		(35)		—		(35)
Operating profit		65		(10)		55		51		(40)		11
Net finance expense		(51)		—		(51)		(49)		26		(23)
Profit/(loss) before tax		14		(10)		4		2		(14)		(12)
Income tax (charge)/credit		(4)		2		(2)		—		2		2
Profit/(loss) for the period		10		(8)		2		2		(12)		(10)
Loss per share
Basic and diluted loss per share						(0.01)						(0.03)

 

Unaudited Consolidated Condensed Income Statement for the six months ended June 30, 2024 and 2023
		Six months ended June 30, 2024						Six months ended June 30, 2023
		Before exceptional items		Exceptional items		Total		Before exceptional items		Exceptional items		Total
		$'m		$'m		$'m		$'m		$'m		$'m
Revenue		2,400		—		2,400		2,386		—		2,386
Cost of sales		(2,091)		(17)		(2,108)		(2,117)		(47)		(2,164)
Gross profit		309		(17)		292		269		(47)		222
Sales, general and administration expenses		(146)		(4)		(150)		(116)		(12)		(128)
Intangible amortization		(73)		—		(73)		(70)		—		(70)
Operating profit		90		(21)		69		83		(59)		24
Net finance expense		(103)		17		(86)		(99)		53		(46)
Loss before tax		(13)		(4)		(17)		(16)		(6)		(22)
Income tax credit		4		3		7		5		6		11
Loss for the period		(9)		(1)		(10)		(11)		—		(11)
Loss per share:
Basic and diluted loss per share						(0.04)						(0.04)

 

Unaudited Consolidated Condensed Statement of Financial Position
	At June 30, 2024		At December 31, 2023
	$'m		$'m
Non-current assets
Intangible assets	1,295		1,382
Property, plant and equipment	2,557		2,628
Other non-current assets	142		154
	3,994		4,164
Current assets
Inventories	417		469
Trade and other receivables	438		278
Contract assets	228		259
Income tax receivable	32		44
Derivative financial instruments	23		12
Cash, cash equivalents and restricted cash	236		443
	1,374		1,505
TOTAL ASSETS	5,368		5,669
TOTAL EQUITY	(22)		106
Non-current liabilities
Borrowings including lease obligations	3,590		3,640
Other non-current liabilities*	356		401
	3,946		4,041
Current liabilities
Borrowings including lease obligations	285		94
Payables and other current liabilities	1,159		1,428
	1,444		1,522
TOTAL LIABILITIES	5,390		5,563
TOTAL EQUITY and LIABILITIES	5,368		5,669

* Other non-current liabilities include liabilities for earnout shares of $7 million at June 30, 2024 (December 2023: $23 million) and warrants of $1 million at June 30, 2024 (December 2023: $2 million).

 

Unaudited Consolidated Condensed Statement of Cash Flows
		Three months ended June 30,				Six months ended June 30,
		2024		2023		2024		2023
		$'m		$'m		$'m		$'m
Cash flows from/(used in) operating activities
Cash generated from/(used in) operations (2)		315		302		(1)		74
Net interest paid		(78)		(74)		(93)		(82)
Settlement of foreign currency derivative financial instruments		6		1		1		(11)
Income tax paid		(9)		(6)		(11)		(15)
Cash flows from/(used in) operating activities		234		223		(104)		(34)
Cash flows used in investing activities
Net capital expenditure		(36)		(96)		(98)		(222)
Cash flows used in investing activities		(36)		(96)		(98)		(222)
Cash flows (used in)/received from financing activities
Changes in borrowings		(23)		24		181		58
Deferred debt issue costs paid		–		(1)		–		(2)
Lease payments		(23)		(22)		(44)		(38)
Dividends paid		(66)		(65)		(132)		(131)
Cash flows (used in)/received from financing activities		(112)		(64)		5		(113)
Net increase/(decrease) in cash, cash equivalents and restricted cash		86		63		(197)		(369)
Cash, cash equivalents and restricted cash at beginning of period		155		124		443		555
Foreign exchange losses on cash, cash equivalents and restricted cash		(5)		(5)		(10)		(4)
Cash, cash equivalents and restricted cash at end of period		236		182		236		182

 

Financial assets and liabilities At June 30, 2024, the Group's net debt and available liquidity was as follows:
		Drawn amount		Available liquidity
		$'m		$'m
Senior Secured Green and Senior Green Notes		3,267		—
Global Asset Based Loan Facility		187		169
Lease obligations		398		—
Other borrowings		46		—
Total borrowings / undrawn facilities		3,898		169
Deferred debt issue costs		(23)		—
Net borrowings / undrawn facilities		3,875		169
Cash, cash equivalents and restricted cash		(236)		236
Derivative financial instruments used to hedge foreign currency and interest rate risk		18		—
Net debt / available liquidity		3,657		405

 

Reconciliation of profit/(loss) for the period to Adjusted profit
	Three months ended June 30,
	2024		2023
	$'m		$'m
Profit/(loss) for the period as presented in the income statement	2		(10)
Less: Dividend on preferred shares	(6)		(6)
Loss for the period used in calculating earnings per share	(4)		(16)
Exceptional items, net of tax	8		12
Intangible amortization, net of tax	29		27
Adjusted profit for the period	33		23
Weighted average number of ordinary shares	597.7		597.6
Loss per share	(0.01)		(0.03)
Adjusted earnings per share	0.06		0.04

 

Reconciliation of profit/(loss) for the period to Adjusted EBITDA
	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	$'m		$'m		$'m		$'m
Profit/(loss) for the period	2		(10)		(10)		(11)
Income tax charge/(credit)	2		(2)		(7)		(11)
Net finance expense	51		23		86		46
Depreciation and amortization	113		100		222		198
Exceptional operating items	10		40		21		59
Adjusted EBITDA	178		151		312		281

 

Reconciliation of Adjusted EBITDA to Adjusted operating cash flow and Adjusted free cash flow
	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	$'m		$'m		$'m		$'m
Adjusted EBITDA	178		151		312		281
Movement in working capital	152		171		(271)		(175)
Maintenance capital expenditure	(26)		(26)		(50)		(62)
Lease payments	(23)		(22)		(44)		(38)
Exceptional restructuring costs	(6)		—		(20)		—
Adjusted operating cash flow	275		274		(73)		6
Interest paid	(78)		(74)		(93)		(82)
Settlement of foreign currency derivative financial instruments	6		1		1		(11)
Income tax paid	(9)		(6)		(11)		(15)
Adjusted free cash flow - pre Growth Investment capital expenditure	194		195		(176)		(102)
Growth investment capital expenditure	(10)		(70)		(48)		(160)
Adjusted free cash flow - post Growth Investment capital expenditure	184		125		(224)		(262)

Related Footnotes
(1) For a reconciliation to the most comparable IFRS measures, see Page 9.
(2) Cash from operations for the three months ended June 30, 2024 is derived from the aggregate of Adjusted EBITDA as presented on Page 9, working capital inflows of $152 million (2023: $171 million) and other exceptional cash outflows of $15 million (2023: $20 million). Cash used in operations for the six months ended June 30, 2024 is derived from the aggregate of Adjusted EBITDA as presented on Page 9, working capital outflows of $271 million (2023: outflows of $175 million) and other exceptional cash outflows of $42 million (2023: $34 million).

 

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SOURCE Ardagh Metal Packaging S.A.

FAQ

What was AMBP's Adjusted EBITDA for Q2 2024?

Ardagh Metal Packaging's Adjusted EBITDA for Q2 2024 was $178 million, an 18% increase compared to the same period in 2023.

How did AMBP's global beverage can shipments perform in Q2 2024?

AMBP's global beverage can shipments grew 3% in Q2 2024, driven by strong growth of 5% in Europe and 1% in the Americas.

What is AMBP's revised Adjusted EBITDA guidance for full-year 2024?

AMBP improved its full-year 2024 Adjusted EBITDA guidance to a range of $640-660 million, up from the previous guidance of $630-660 million.

Did AMBP announce a dividend for Q2 2024?

Yes, AMBP announced a regular quarterly ordinary dividend of $0.10 per share for Q2 2024.