Ardagh Metal Packaging S.A. - Third Quarter 2022 Results

Rhea-AI Summary

Ardagh Metal Packaging S.A. (NYSE: AMBP) reported a 13% revenue increase to $1,173 million for Q3 2022, with profit rising to $68 million from a loss of $178 million a year prior. Despite a 9% growth in global beverage can shipments, demand fell short of expectations, impacting earnings significantly. Adjusted EBITDA decreased by 20% to $140 million, mainly due to input cost pressures. The company anticipates continued challenging conditions into early 2023 while managing costs and capacity. A quarterly dividend of $0.10 was announced, maintaining a sustainable annual payout of $0.40 per share.

Positive

• Revenue grew by 13% to $1,173 million in Q3 2022 versus $1,038 million in Q3 2021.
• Profit for the period reached $68 million, a significant improvement from a $178 million loss.
• Global beverage can shipments increased by 9% year-over-year.
• Quarterly dividend of $0.10 announced, maintaining a total annual dividend of $0.40 per share.

Negative

• Adjusted EBITDA dropped by 20% to $140 million due to input cost pressures.
• Demand was lower than expected, impacting overall earnings.
• Adjusted EBITDA decline of 42% in Europe due to input cost headwinds.

LUXEMBOURG, Oct. 27, 2022 /PRNewswire/ -- Ardagh Metal Packaging S.A. (NYSE: AMBP) today announced results for the third quarter ended September 30, 2022.

		Three months ended		Three months ended
		September 30, 2022		September 30, 2021		Change		Constant Currency
		($'m except per share data)
Revenue		1,173		1,038		13 %		21 %
Profit/(loss) for the period		68		(178)
Adjusted EBITDA (1)		140		176		(20 %)		(15 %)
Earnings/(loss) per share		0.10		(0.32)
Adjusted earnings per share (1)		0.06		0.14
Dividend per share		0.10

Oliver Graham, CEO of Ardagh Metal Packaging, said

"We experienced a challenging third quarter of 2022. While global shipments increased by 9% compared with the same period last year, demand was below our expectations and impacted earnings. We expect these conditions to persist through the fourth quarter and into the first half of 2023. In response we are taking a disciplined approach to managing our costs and capacity, and further flexing our growth expenditure. Our well-advanced investment program puts us in a very strong position to serve the continuing secular demand growth for sustainable beverage can packaging."

• Global beverage can shipments grew by 9% in the quarter, with growth of 10% in the Americas and 9% in Europe. Specialty can share increased to 46% of shipments in the quarter from 44% in the prior year quarter, reflecting our investment program.
• Adjusted EBITDA of $140 million for the quarter represented a 15% decline on a constant currency basis due to input cost headwinds, as operating costs relating to capacity ramp-up in excess of demand offset the contribution from shipment growth.
• In the Americas, Adjusted EBITDA advanced by 2% reflecting higher shipments, largely offset by higher operating costs. This was more than offset by a 42% decline, on a constant currency basis, in Adjusted EBITDA in Europe as input cost headwinds exceeded the contribution from higher shipments, and costs related to metal valuation timing issues were offset by positive one-off factors.
• Growth investments for 2022 will reduce to c. $0.6 billion, including leasing. The growth investment plan is well advanced, with installed capacity continuing its ramp-up. Future additions will be appropriately phased in line with demand conditions.
• Total liquidity of $998 million at September 30, 2022, including cash and cash equivalents of $583 million and an upsized ABL facility of $415 million. Our current investment plans mean we do not anticipate any external market financing need in 2023.
• Fourth quarter dividend of 10c announced, delivering on guidance for a sustainable annual dividend totalling 40c per share. In the quarter $32 million of shares were repurchased under the buyback program, taking the total to $35 million to date.
• AMP received approval from the Science Based Targets initiative (SBTi) for greenhouse gas emission reduction targets.
• 2022 outlook: mid-single digit shipment growth for the year and full year 2022 Adjusted EBITDA of the order of $640-650 million, assuming EUR/USD parity to year end. (2021: $630 million at constant currency; $662 million reported). Fourth quarter Adjusted EBITDA expected to be of the order of $175-185 million (Q4 2021: $157 million at constant currency, $165 million reported).

 

Financial Performance Review Bridge of 2021 to 2022 Revenue and Adjusted EBITDA Three months ended September 30, 2022
Revenue		Europe		Americas		Group
		$'m		$'m		$'m
Revenue 2021		483		555		1,038
Organic		80		125		205
FX translation		(70)		—		(70)
Revenue 2022		493		680		1,173
Adjusted EBITDA		Europe		Americas		Group
		$'m		$'m		$'m
Adjusted EBITDA 2021		76		100		176
Organic		(27)		2		(25)
FX translation		(11)		—		(11)
Adjusted EBITDA 2022		38		102		140
2022 margin %		7.7 %		15.0 %		11.9 %
2021 margin %		15.7 %		18.0 %		17.0 %
Nine months ended September 30, 2022
Revenue		Europe		Americas		Group
		$'m		$'m		$'m
Revenue 2021		1,383		1,585		2,968
Organic		289		503		792
FX translation		(147)		—		(147)
Revenue 2022		1,525		2,088		3,613
Adjusted EBITDA		Europe		Americas		Group
		$'m		$'m		$'m
Adjusted EBITDA 2021		227		270		497
Organic		(48)		41		(7)
FX translation		(24)		—		(24)
Adjusted EBITDA 2022		155		311		466
2022 margin %		10.2 %		14.9 %		12.9 %
2021 margin %		16.4 %		17.0 %		16.7 %

 

Group Performance

Group

Revenue of $1,173 million in the three months ended September 30, 2022 increased by $135 million, or 13%, compared with $1,038 million in the same period last year. On a constant currency basis, revenue increased by 21%, mainly reflecting the pass through to customers of higher input costs and strong volume/mix growth.

Adjusted EBITDA decreased by $36 million, or 20%, to $140 million in the three months ended September 30, 2022, compared with $176 million in the same period last year. On a constant currency basis, Adjusted EBITDA decreased by 15%, principally due to input cost headwinds, partly offset by favorable volume/mix effects, which includes an impact of the Group's growth investment program.

Americas

Revenue increased by 23% to $680 million in the three months ended September 30, 2022, compared with $555 million in the same period last year, principally reflecting the pass through of higher input costs and favorable volume/mix effects.

Adjusted EBITDA for the quarter of $102 million increased by 2%, compared with $100 million in the same period last year, primarily driven by favorable volume/mix effects, which includes an impact of the Group's growth investment program, partly offset by increased operating costs and input cost headwinds.

Europe

Revenue of $493 million increased by 2% in the three months ended September 30, 2022, compared with $483 million in the same period last year. On a constant currency basis, revenue increased by 19%, principally due to the pass through of higher input costs and favorable volume/mix effects.

Adjusted EBITDA for the quarter of $38 million decreased by $38 million, or 50%, at actual exchange rates, and by 42% at constant currency, compared with $76 million in the same period last year. The decrease in Adjusted EBITDA was principally due to input cost headwinds, which were partly offset by favorable volume/mix effects, which includes an impact of the Group's growth investment program, and favorable non-recurring SG&A and other gains.

Earnings Webcast and Conference Call Details

Ardagh Metal Packaging S.A. (NYSE: AMBP) will hold its third quarter 2022 earnings webcast and conference call for investors at 9.00 a.m. EDT (2.00 p.m. BST) on October 27, 2022. Please use the following webcast link to register for this call:

Webcast registration and access:

https://event.webcasts.com/viewer/event.jsp?ei=1570352&tp_key=becd3dae29

Conference call dial in:

United States/Canada: +1 800 239 9838
International: +44 330 165 4027
Participant pin code: 3869215

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 close to 5,800 employees and had sales of $4.1 billion in 2021.

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, 2021 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.

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.

 

Unaudited Consolidated Condensed Income Statement for the three months ended September 30, 2022 and 2021
		Three months ended September 30, 2022						Three months ended September 30, 2021
		Before exceptional items		Exceptional items		Total		Before exceptional items		Exceptional items		Total
		$'m		$'m		$'m		$'m		$'m		$'m
Revenue		1,173		—		1,173		1,038		—		1,038
Cost of sales		(1,047)		(17)		(1,064)		(869)		(8)		(877)
Gross profit		126		(17)		109		169		(8)		161
Sales, general and administration expenses		(38)		(9)		(47)		(40)		(230)		(270)
Intangible amortization		(34)		—		(34)		(37)		—		(37)
Operating profit/(loss)		54		(26)		28		92		(238)		(146)
Net finance income/(expense)		(30)		71		41		(27)		9		(18)
Profit/(loss) before tax		24		45		69		65		(229)		(164)
Income tax charge		(7)		6		(1)		(16)		2		(14)
Profit/(loss) for the period		17		51		68		49		(227)		(178)
Earnings/(loss) per share						0.10						(0.32)

 

Unaudited Consolidated Condensed Income Statement for the nine months ended September 30, 2022 and 2021 (2)
		Nine months ended September 30, 2022						Nine months ended September 30, 2021
		Before exceptional items		Exceptional items		Total		Before exceptional items		Exceptional items		Total
		$'m		$'m		$'m		$'m		$'m		$'m
Revenue		3,613		—		3,613		2,968		—		2,968
Cost of sales		(3,156)		(47)		(3,203)		(2,477)		(16)		(2,493)
Gross profit		457		(47)		410		491		(16)		475
Sales, general and administration expenses		(147)		(17)		(164)		(133)		(240)		(373)
Intangible amortization		(105)		—		(105)		(115)		—		(115)
Operating profit/(loss)		205		(64)		141		243		(256)		(13)
Net finance income/(expense)		(92)		196		104		(147)		(42)		(189)
Profit/(loss) before tax		113		132		245		96		(298)		(202)
Income tax charge		(32)		12		(20)		(35)		11		(24)
Profit/(loss) for the year		81		144		225		61		(287)		(226)
Earnings/(loss) per share:						0.36						(0.44)

 

Unaudited Consolidated Condensed Statement of Financial Position (2)
	At September 30, 2022		At December 31, 2021
	$'m		$'m
Non-current assets
Intangible assets	1,425		1,662
Property, plant and equipment	2,116		1,842
Other non-current assets	114		160
	3,655		3,664
Current assets
Inventories	505		407
Trade and other receivables	691		512
Contract assets	228		182
Derivative financial instruments	72		97
Cash and cash equivalents	583		463
	2,079		1,661
TOTAL ASSETS	5,734		5,325
TOTAL EQUITY	548		286
Non-current liabilities
Borrowings including lease obligations	3,353		2,831
Other non-current liabilities*	410		808
	3,763		3,639
Current liabilities
Borrowings including lease obligations	50		56
Payables and other current liabilities	1,373		1,344
	1,423		1,400
TOTAL LIABILITIES	5,186		5,039
TOTAL EQUITY and LIABILITIES	5,734		5,325

* Other non-current liabilities include liabilities for earnout shares of $89 million at September 30, 2022 (December 2021: $292 million) and warrants of $8 million at September 30, 2022 (December 2021: $33 million).

 

Unaudited Consolidated Condensed Statement of Cash Flows (2)
	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	$'m		$'m		$'m		$'m
Cash flows from/(used in) operating activities
Cash generated from/(used in) operations (3)	43		138		(60)		275
Interest paid	(4)		(1)		(55)		(49)
Settlement of foreign currency derivative financial instruments	36		8		66		7
Income tax paid	(14)		(7)		(29)		(35)
Cash flows from/(used in) operating activities	61		138		(78)		198
Cash flows used in investing activities
Capital expenditure	(127)		(139)		(413)		(428)
Other investing activities	–		–		–		1
Cash flows used in investing activities	(127)		(139)		(413)		(427)
Cash flows from financing activities
Changes in borrowings	1		7		592		2,768
Deferred debt issue costs paid	(4)		(8)		(10)		(33)
Lease payments	(14)		(12)		(40)		(34)
Proceeds from share issuance, net of costs	258		934		258		934
Dividends paid	–		–		(121)		–
Treasury shares purchased	(32)		–		(35)		–
Other financing cash flows	–		–		(1)		–
Net repayment of related party borrowings to Ardagh	–		(996)		–		(2,722)
Payment as part of capital reorganization	–		–		–		(574)
Cash received from Ardagh	–		–		–		206
Redemption premium and issuance costs paid	–		–		–		(52)
Net cash inflow/(outflow) from financing activities	209		(75)		643		493
Net increase/(decrease) in cash and cash equivalents	143		(76)		152		264
Cash and cash equivalents at beginning of period	436		587		463		257
Foreign exchange gains/(losses) on cash and cash equivalents	4		(15)		(32)		(25)
Cash and cash equivalents at end of period	583		496		583		496

 

Financial assets and liabilities At September 30, 2022, the Group's net debt and available liquidity was as follows:
		Drawn amount		Available liquidity
		$'m		$'m
Senior Secured Green and Senior Green Notes		3,176		—
Global Asset Based Loan Facility		—		415
Lease obligations		243		—
Other borrowings/credit lines		22		—
Total borrowings / undrawn facilities		3,441		415
Deferred debt issue costs		(38)		—
Net borrowings / undrawn facilities		3,403		415
Cash and cash equivalents		(583)		583
Net debt / available liquidity		2,820		998

 

Reconciliation of profit/(loss) for the period to Adjusted profit for the period
	Three months				Three months
			ended September 30,				ended September 30,
			2022				2021
			$'m				$'m
Profit/(loss) for the period as presented in the income statement			68				(178)
Less: Dividend on preferred shares			(6)				—
Profit/(loss) for the period used in calculating earnings per share			62				(178)
Exceptional items, net of tax			(51)				227
Intangible amortization, net of tax			27				29
Adjusted profit for the period			38				78
Weighted average number of ordinary shares			599.8				562.8
Earnings/(loss) per share			0.10				(0.32)
Adjusted earnings per share			0.06				0.14

 

Reconciliation of profit/(loss) for the period to Adjusted EBITDA
	Three months ended September 30,					Nine months ended September 30,
	2022		2021			2022		2021 (2)
	$'m		$'m			$'m		$'m
Profit/(loss) for the period	68		(178)			225		(226)
Income tax charge	1		14			20		24
Net finance (income)/expense	(41)		18			(104)		189
Depreciation and amortization	86		84			261		254
Exceptional operating items	26		238			64		256
Adjusted EBITDA	140		176			466		497

 

Reconciliation of Adjusted EBITDA to Adjusted operating cash flow and Adjusted free cash flow
	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021 (2)
	$m		$m		$'m		$'m
Adjusted EBITDA	140		176		466		497
Movement in working capital	(50)		(23)		(445)		(193)
Maintenance capital expenditure	(25)		(18)		(74)		(63)
Lease payments	(14)		(12)		(40)		(34)
Adjusted operating cash flow	51		123		(93)		207
Interest paid	(4)		(1)		(55)		(49)
Settlement of foreign currency derivative financial instruments	36		8		66		7
Income tax paid	(14)		(7)		(29)		(35)
Adjusted free cash flow - pre Growth Investment capital expenditure	69		123		(111)		130
Growth investment capital expenditure	(102)		(121)		(339)		(365)
Adjusted free cash flow - post Growth Investment capital expenditure	(33)		2		(450)		(235)

 

Related Footnotes

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

(2) For information related to and including the period prior to April 1, 2021, please refer to the unaudited consolidated interim financial statements prepared on a carve-out basis from the consolidated financial statements of Ardagh Group S.A., as included in the unaudited consolidated interim financial statements of the Group for the three and nine months ended September 30, 2022, which are available at: https://www.ardaghmetalpackaging.com/investors 

For information related to the unaudited consolidated condensed statement of financial position at December 31, 2021, please refer to the Annual Report on Form 20-F for the year ended December 31, 2021, and filed with the U.S. Securities and Exchange Commission on March 4, 2022, which is also available at the above link.

(3) Cash from/(used in) operations for the three and nine months ended September 30, 2022 is derived from the aggregate of Adjusted EBITDA as presented on Page 9 less working capital outflows of $50 million (nine months: $445 million) and other exceptional cash outflows of $47 million (nine months: $81 million). Cash from operations for the three and nine months ended September 30, 2021 is derived from the aggregate of Adjusted EBITDA as presented on Page 9, working capital outflows of $23 million (nine months: $193 million) and other exceptional cash outflows of $15 million (nine months: $29 million).

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SOURCE Ardagh Metal Packaging S.A.

FAQ

What were Ardagh Metal Packaging's revenue figures for Q3 2022?

Ardagh Metal Packaging reported revenue of $1,173 million for Q3 2022, a 13% increase from $1,038 million in Q3 2021.

How did Ardagh Metal Packaging perform in terms of profit in Q3 2022?

The company reported a profit of $68 million in Q3 2022, compared to a loss of $178 million in the same quarter of the previous year.

What is the expected Adjusted EBITDA for Ardagh Metal Packaging in Q4 2022?

The company expects fourth quarter Adjusted EBITDA to be between $175 million and $185 million.

What was the impact of demand on Ardagh Metal Packaging's earnings in Q3 2022?

Demand was lower than expected, which significantly impacted overall earnings for Q3 2022.

How much was the quarterly dividend announced by Ardagh Metal Packaging?

Ardagh announced a quarterly dividend of $0.10, maintaining a sustainable annual dividend of $0.40 per share.