AMP’s global beverage can shipments up
Ardagh Metal Packaging S.A. has announced results for the second quarter ended June 30, 2023.
Oliver Graham, CEO of Ardagh Metal Packaging, said: ”We experienced a challenging quarter against a global backdrop of sustained inflationary and household financial pressures, impacting on consumer demand.
“This was particularly the case in Brazil, where we expect market pressures to persist in the near-term. Our performance in Europe proved resilient, supported by improved input cost recovery, and was modestly ahead of expectations.
“In North America we recorded strong shipment growth and forward momentum, driven by the ramp-up of our contracted new capacity. However, our North America profitability was negatively impacted by action to right-size our inventory position that helped underpin a strong cashflow performance.
“We continue to prudently manage our capacity ahead of a demand recovery and look forward to strong second half 2023 earnings growth resumption.
“With our growth investment program completing in 2023, we are strongly positioned to capture future growth and to demonstrate the long-term earnings power and cash-generation of our business.”
Highlights from AMP’s second quarter results included:
- Global beverage can shipments grew by 5% in the quarter, driven by growth of 8% in the Americas and 2% in Europe. North America grew by 18%, as new contracted volumes came onstream, more than offsetting weaker than expected shipments in Brazil.
- Adjusted EBITDA of $151 million for the quarter represented a 17% decrease on the same quarter last year.
- In the Americas, Adjusted EBITDA declined by 28% to $87 million, despite higher shipments in the region, due to higher operating costs, a temporarily less favourable mix of cans/ends, weaker Brazil shipments as well as managed inventory reduction in North America.
- In Europe Adjusted EBITDA increased by 5% to $64 million as the contribution from increased shipments and good progress on cost pass-throughs more than offset higher costs. Network cost structure and efficiency to be improved through the planned closure of remaining steel lines in Germany later this year.
- Ongoing curtailment action to balance network capacity ahead of a recovery in demand conditions.
- Total liquidity of $519 million at June 30, 2023 reflecting initiatives which yielded a working capital inflow of $171m for the quarter (Q2 2022: $70 million outflow). Full year 2023 working capital net inflow guidance raised to $150 million.
- Reiterate expectation for positive Adjusted Free Cash Flow generation in 2023, supported by a sharp reduction in growth capex cashflow to below $0.3bn in 2023 (2022: $0.5bn), with a further reduction to c. $0.1bn in 2024 and beyond.
- Regular quarterly ordinary dividend of 10c announced, in line with guidance for an annual dividend of 40c per share.
- Progress on sustainability initiatives, including certification by the Aluminium Stewardship Institute (ASI) of the Manaus facility and the regional central office in Sao Paulo in Brazil, as well as the publication of the second Green Bond report, highlighting the bond’s contribution to eligible green projects.
- 2023 outlook: shipment growth of mid-single digits and full year 2023 Adjusted EBITDA of $630-640 million. Third quarter Adjusted EBITDA expected to be between $170-175 million (Q3 2022: $140 million reported; $143 million at constant currency).