Canpack has reported its results for the three and twelve months ending 31 December 2021 and its trading update for Q4 and Full Year 2021.

During the three and twelve months ended December 31, 2021, consumers have continued to switch to beverage cans as the preferred option for at-home consumption. Canpack’s strong volume performance was driven by: (i) increased demand in Europe, Colombia and Africa, (ii) increased production volumes from its Czech Republic facility, which began production in June 2020 and (iii) increased demand from the US customer base, for which cans have been shipped mainly from facilities in Asia.

Net sales increased 23% and 31%, respectively, for the three and twelve months ending 31 December 2021. This strong performance was driven by volume increases of 5% and 16% in the Beverage Cans and Ends division and 28% and 23% in the Glass Packaging division for the three and twelve months ending 31 December respectively.

Additionally, beverage can net sales have increased for the three and twelve months to higher LME levels, higher average conversion prices and higher transportation upcharges relating primarily to long-distance deliveries.

Results

Cost of sales increased 24% and 32%, respectively, for the three and twelve month period. This increase was primarily due to an increase in beverage can volumes and higher aluminium prices given higher LME and premium levels, higher labour costs primarily due to inflation and increased transportation costs.

Adjusted EBITDA decreased to $92 million for the three months ending 31 December compared to $108 million for the same period in 2020 (-15%). This decrease was primarily driven by Olyphant moving from the start-up to ramp-up phase, resulting in a $13 million loss. Adjusted EBITDA increased to $524 million for the year ending 31 December 2021 compared to $445 million in 2020 (+18%). This increase was primarily driven by incremental beverage can volumes.

Capital expenditures increased to $219 million and $480 million, respectively. The higher levels of capital expenditures in the twelve months were mainly due to planned spending for the company’s US greenfield projects in Olyphant, Pennsylvania and Muncie, Indiana, a new can body line in Russia, an extension of lines in Brazil and in the Netherlands and a new can ends line in United Arab Emirates, compared to capital expenditures during the same periods in 2020, which primarily related to its Czech Republic greenfield project and initial expenditures for the new facilities in the US.

Net cash provided by operating activities decreased by $199 million to a net outflow of $57 million for the three months, from a net inflow of $142 million for the same period in 2020. The decrease in cash provided by operating activities was caused mainly by higher working capital requirements because of
lower factoring of receivables, higher beverage can bodies volume sales and higher LME.

Free cash flow decreased by $255 million to a cash outflow of $260 million for the three months ending 31 December, from a cash outflow of $5 million for the same period in 2020. This decrease was due to higher capital expenditures, higher working capital employed and lower adjusted EBITDA during the three months compared to the same period in 2020. Free cash flow decreased by $244 million to a cash outflow of $238 million for the year, from a cash inflow of $6 million in 2020. This decrease was due to higher capital expenditures and higher working capital employed, partially offset by higher adjusted EBITDA.

Commenting, chief executive officer, Roberto Villaquirán, said:

“We are pleased to announce solid performance for the year ending 31 December 2021 with improvement in our different business units across the globe. During 2021, Canpack entered the US market with the start-up of two of our four planned lines. These two are now fully operational and delivering commercial cans to our customers.

In March 2022, we began production on the third line at our Olyphant plant as planned. Market dynamics continue to be fluid. Price recovery and managing supply chains will remain a challenge and will be the key focus for 2022.

“We are truly saddened by the events in Ukraine where Canpack has two manufacturing facilities. Both facilities are closed for the moment, as we focus on our employees’ safety and humanitarian efforts to ensure their families are safe.”