Ardagh Metal Packaging S.A. - First Quarter 2022 Results
Ardagh Metal Packaging S.A. (NYSE: AMBP) today announced results for the first quarter ended March 31, 2022
Oliver Graham, CEO of Ardagh Metal Packaging, said
“First quarter results were in line with our expectations, with continued strong demand for our products. We share the international outrage at the Russian invasion of Ukraine and the resulting humanitarian crisis. Although we have no presence in either country, these events have exacerbated an already challenging inflationary backdrop, in response to which we are pursuing additional price recovery. Demand remains strong across our business, and we significantly advanced our growth investment plans in the quarter, which will contribute to a meaningful step-up in shipments in future quarters.”
- Adjusted EBITDA growth for the quarter of 1% to $145 million at constant currency, driven by a 9% advance in the Americas, where growth reflected higher shipments and lower operating costs. In Europe, Adjusted EBITDA decreased by 10% on a constant currency basis, in line with expectations, as elevated input cost inflation was only partly offset by volume/mix effects.
- Global beverage can shipments grew by 1% in the quarter, reflecting a strong prior year comparable and driven by growth of 3% in North America. Acceleration is expected from the second quarter as new capacity ramps up. Shipments in Europe were unchanged on the prior year, following a strong fourth quarter 2021, which depleted inventory levels available for shipment. Brazil showed encouraging trends as the quarter proceeded.
- Specialty can share increased, to 48% of shipments in the quarter, from 44% in the prior year quarter, reflecting our investment program.
- Growth investment program remains on track, with a step up in shipments expected from the current quarter. In Europe, new capacity in the UK and Germany is now operational. In North America, Winston Salem (NC) continues to ramp up its first line, with the second line also commencing production. In Huron (OH) can production will commence shortly, complementing ends production since late-2021.
- AMP does not have any operations in Russia or Ukraine and has not faced any disruption to date to either sales or supplies arising from the conflict. Persistently high European energy costs represent a headwind for which AMP is taking price recovery actions.
- Total liquidity of $450 million at March 31, 2022, including cash and cash equivalents of $225 million. Net leverage of 4.2x LTM Adjusted EBITDA, reflecting seasonal working capital build and growth investments.
- AMP reiterates its intention to maintain a net leverage in the range of 3.75 to 4.0x 12-months forward looking Adjusted EBITDA, enabling the growth investment plan and cash returns to shareholders, with $400 million ($0.66c per share) to be returned in 2022.
- Dividend of $0.10 per share declared as the first of three quarterly dividends of $0.10 per share, with the balance of $220 million to be paid as the fourth quarter dividend. AMP intends to proceed with the planned $600 million issue of non-convertible preference shares.
- AMP has provided Group support for humanitarian relief efforts in Ukraine through a donation to the International Committee of the Red Cross, as well as supporting local initiatives by colleagues across our network.
- 2022 outlook: re-iterating expected mid-to-high teens percentage shipment growth for the year and Adjusted EBITDA of the order of $750 million on a constant currency basis. Second quarter Adjusted EBITDA expected to be of the order of $180 million on a constant currency basis (Q2 2021: $168 million at constant currency).
27 April 2022