Ardagh Metal Packaging S.A. - Third Quarter 2023 Results
Ardagh Metal Packaging S.A. (NYSE: AMBP) today announced results for the third quarter ended September 30, 2023.
Oliver Graham, CEO of Ardagh Metal Packaging, said:
"We delivered a robust performance in the quarter to achieve our guidance despite a softening of demand conditions in Europe. Americas performance was slightly ahead of our expectation with North America benefitting from strong shipment growth, while Brazil was broadly in line. The deterioration in demand during the quarter negatively impacted European performance against our expectations, which we anticipate will persist into Q4. Our Adjusted operating cashflow generation is significantly improved versus the prior year and underpins our conviction in a strong full year liquidity outturn. Our actions to prudently balance our capacity and optimize our network will also drive future earnings improvement."
- Global beverage can shipments grew by 8% in the quarter versus the prior year quarter, driven by growth of 18% in the Americas offsetting a 2% decline in Europe. North America grew by 20%, underpinned by commitments backing our investments, and Brazil grew by 8%.
- Adjusted EBITDA of $171 million for the quarter represented a 22% increase versus the prior year quarter.
- Americas Adjusted EBITDA increased by 2% to $104 million as the contribution from 18% higher volumes was offset by higher costs, including fixed cost under-absorption that remained elevated as de-stocking was prioritised in North America, which is now complete.
- In Europe, Adjusted EBITDA increased by 76% to $67 million despite 2% lower shipments, which reflected improved input cost recovery versus the prior year weak comparable, predominantly due to the pass through of energy costs.
- Committed to disciplined balancing of network capacity ahead of a recovery in industry demand, through a mix of curtailment and longer-term action as appropriate. Consultations regarding the potential closure in Q1 2024 of the Whitehouse, Ohio, production facility initiated.
- Net leverage reduced by 0.5x during the quarter through improved earnings and strong cash conversion. Total liquidity of $561million at September 30, 2023 was boosted by further working capital improvement.
- No change to guidance for 2023 growth capex to fall below $0.3bn, to decline further to c. $0.1bn in 2024 and beyond. Due to the success of working capital initiatives, raising guidance for a net working capital inflow in 2023 to approaching $200m.
- Regular quarterly ordinary dividend of 10c announced, in line with guidance for an annual dividend of 40c per share.
- Progress on sustainability initiatives include advancement of our Ardagh for Education STEM initiative into Brazil, further investment in recycling infrastructure in North America and the announcement of a sustainable distribution agreement in the Netherlands. Ardagh Group, including Ardagh Metal Packaging, was also awarded the highest platinum rating by Ecovadis.
- 2023 outlook: shipment growth of approximately mid-single digits and full year 2023 Adjusted EBITDA in the order of $610 million, reflecting the softer demand conditions in Europe while the North America volume outlook remains strong. Fourth quarter Adjusted EBITDA in the order of $158 million (Q4 2022: $159 million reported; $162 million at constant currency).
26 October 2023