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ARD Ardagh

Participants
Paul Coulson Chairman and Chief Executive Officer
John Sheehan Corporate Development and Investor Relations Director
David Matthews Chief Financial Officer
Michael Leithead Barclays Bank PLC
Arun Viswanathan RBC Capital Markets
Anojja Shah BMO Capital Markets
Roger Spitz Bank of America Merrill Lynch
Robert Amenta JPMorgan Chase & Co.
Travis Edwards Goldman Sachs Group, Inc.
Call transcript
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Operator

Good day, everyone, and welcome to the Ardagh Group First Quarter 2021 Investor Call. Today’s conference is being recorded. At this time, I'd like to turn the conference over to Mr. Paul Coulson. Please go ahead, sir.

Paul Coulson

you. Thank everybody. welcome, Well, of all joining and first us which earlier earnings you the thank quarter and you call, today release the for today follows results remain hope for well, quarter. safe we XXXX our We for our today and by David on Relations Corporate and John Murphy, Sheehan, CFO; Matthews, of CEO Director. call Graham, Investor Oliver our COO; the the Ardagh joined our Shaun I'm our Metal Packaging; Development

filings may at forward-looking outcomes As to in releases. factors, differ they're or the expressed always, our forward-looking those a circumstances remarks These of our expressly update due to SEC obligation results wide any or time certain including and any forth statements. that and Company include revise may be set range the news materially from statements. those made, Actual reflect implied, our in will disclaims or

the regarding of found financial in can section to includes in Our website statutory per at earnings first the the release, quarter statements Details Information our which comparable use financial GAAP for report, EBITDA on also be found adjusted a share. our of materials reconciliation of may our also related the of be notes and ardaghgroup.com. measures non-GAAP earnings be can SEC our found disclaimer forward-looking and measures filings. release, adjusted most

categories. across period Metal was driven to with XX% reflecting year. increase start the well constant to Metal increased the same acknowledge to year. in and for constant here around as by adjusted of Growth cans footprint results demand about Metal I'm reported Constant Americas quarter, If same volumes, Revenue Packaging, So higher increased Speciality look can last of as I'd Shipments more all the an of shipments This and first our costs XX% increased continued currency the and of support we've increased I the the of the revenues our Constant of communities. represented by in Beverage quarter. move challenging the by $XXX XX% movements $XXX quarter. favorable increased increased compared Metal period with a XX% Revenue growth excellent grew and also at again, year. Speciality dedication the Packaging to investment with remains currency quarter. XX% strong effects. the by on quarter. detail. EBITDA in a period quarter, quarter Adjusted $X.X a colleagues X% revenue environment currency at all by both growth the XX% Packaging EBITDA We year. our the by for to Reflecting made increased EBITDA the rates partners X%, last increased before pass-through in XX% million across And first Speciality of in where X% X% by again and many [indiscernible] Packaging for input pandemic-impacted at the at was and Packaging. XX% currency during accounted to currency can, in increase shipments Glass group as part same discussing was like million X% compared in billion. for our group Metal and this X% of by right X% strongest Europe in our quarter, global business compared remained Glass. strong to the in of in our last for shipments both talking capacity. the to

late new XXXX. $XXX last increased X%, million increased the XX% quarter. led strong where in business. to American the Metal period Packaging revenue increased came by the Metal growth by with North year. by compared online Total shipments same Brazil, at Looking our by the X% segment quarter in in in of Americas shipments capacity

$XXX during Europe, to to reflected increased period $XX X% and to million across direct was performance EBITDA end demand network. increased performance. mix Revenue by Packaging expect shipment right strong million adjusted market quarter a The towards foreseeable million and the higher was across First seen and a shipments for products year. to us. highlighted, compared $XX in of situation EBITDA to positive regularly Metal shipment demand Northern quarter drivers market of growth, due future. Europe bias continue our in and the by continue quarter, our operating be all Metal in strong, have remained to strong the we and we XX% mix this in last quarter, reflecting same for a growth that Adjusted the end favorable regions XX% markets Packaging end Again, strong the and in Europe for

new to is our are ramping on Packaging, largest Our plant Metal in in on stream Also, and Mississippi inventories Ohio the now on quarter. growth in year. is way, new $X.X principally Branch, and on under XXXX two These been are remain plant of the XXXX of this very QX will sold. is to capacity. strong with operational plan a investments America will low, XXXX and year markets All which $X.X expansion in starting A our be XXXX. before capacity three UK provide high-speed have investment billion Execution our partly business additional investment be under well on schedule. Huron, long-term billion, under our our our over Olive fully the Brazil, market. capacity I the as work of the customers together brownfield this is at we Gerais major there Speciality and way the in fully expand Among in will in this focused significant year. In bringing expected to high-growth customers' our new units Metal and expansion Minas the us State XXXX can new of business Germany, installed growth of additional and Winston-Salem are is southeast in remains new existing placed we on in later investment, output to three up with track is plants Europe, program similar has with the plant, come said facilities lines billion is growth all XX our In support Packaging Jacarei business greenfield very North And earlier, in that track. and our capacity building our agreements. been projects focus on

at We investments ahead $XX are Glass comparable, economy in points on was of a was most Europe broad-based Packaging below year the operating U.S. began focused shipments America, continued dollars performance to overall, time, the North in-line last Turning our $XX efficiency some current EBITDA Glass unchanged was Total million cost compared million of The last a the on and strong of quarter. reopen in with to others. by outturn to EBITDA in basis profitability. margins quarter, as XX.X% remains our growth and initiatives X% Glass lockdowns a Glass Adjusted driving decrease was environment. in North achieved increased in growth on and developments period Shipment million, our business budget. America same efficiencies was revenue the then few improved America, period by customer-backed In this to on The Europe of and America. our Packaging. In in quarter. cost $XXX performance by in X% with our The parts the outlook, an all demand North good, were projects result North United in the North strong into positive in-line year. are XX most year. increased is increase and principally a and increased convert focus XXXX in of in business as markets. and severe EBITDA first increased shipments and performance And across improved for a cost of operating States operating to and Europe, America these the in growth due a more there to improvement compared XXXX quarter the freight demanding strong against X% strong X% same network. in costs, And was weather Europe with last volumes performance Adjusted In events across track. million growth of business however, despite our and

Packaging Ardagh Metal the to transaction. Turning

AMP the You that the combine had with in in and North we AMPV. beverage largest all and agreement comprises recall York to Exchange the of Gores adjusted V be AMP an European second is the the for Stock Gores largest New and listed to Holdings will February, separately Brazil. – business the can the America and business, last can and announced And business under apply our each to player of billion AMP, can stack V Under stack transaction XX% receive EBITDA, to stake billion market by well on bev ticker very the And third in with revenue Holdings beverage $X.X retain and approximately to – And Ardagh in XX.Xx and in estimated business quarter EBITDA of performed growth adjusted million, in which as with will XXXX EBITDA our terms can $X.X double of $XXX plan, Gores under the investment EBITDA XX%. projected of up I its growth values an XXXX. at mentioned, is the AMP cash, AMP. beverage adjusted XXXX respectively. will first our

shareholder. AMP stakeholders this And and over transaction, values majority unrecognized Graham. the at many reasons. in led returns releases Ardagh's And approximately excellent for to And Oliver Ardagh. positioned XX% the by new ideally transaction in for will AMP be value AMP it a deliver leaders to today We committed be continue medium will $X to long-term stake the billion. long-term previously Rationale is

Ardagh's of recyclable of sustainability as double trends the markets program packaging strong clear to markets returnable this I And strong ZIP adjusted earlier, road will indeed no can a program meaningful will deliver the the pure in such such a development. that are sustainable, ESG of require horizons, fund from following be to course, to code. well Packaging has AMP with offer as long-term Glass a a by producer expected from for credentials. growth as Ardagh to Under XX% over AMP fully listed leading their exchange likely EBITDA to and businesses leading to the Metal by a its AMP's track. customer move XXXX. I AMP earlier, X.Xx be mentioned adjusted play of to And medium with AMP AMP, enhance combination as shifts packaging, Glass of planned AMP Gores, outlined and shareholders packaging. Each And growth global Xx operate increase as one to as with the a will is continuing in way AMP with and derisked has And moderate operationally. as beer further Brazilian commercially also other's organically equity the completion map and glass over structural continue Firstly, been to infinitely Ardagh or a on And leverage, on innovation, projected producers three driven benefit operations relationships. cans. of shares is one will shares. EBITDA XX%, has to convenience, bev world's very each to listed its presence

AMP paid our an fully took on with the bonds, to an in $X.X AMP of proceeds February, the Ardagh an separation of and AMP transaction. priced billion in we April, Just of In funded. are update subsidiary. $X.X current offering Ardagh, place billion leaving upsized unrestricted where with equivalent AMP from becoming In green plans

with the filings second SEC end we quarter. the of are well before closing transaction Our the advanced, anticipate and the

yet the social year. quarter. Ardagh's EBITDA. will social I be and any social formal green all, quarter terms sustainability and spanning we If $X.X if will very bond such and excellent timing this next strategies the Class to of turn net were the In mentioned point. of of to past Uncertainties AMP. our is has opportunity especially this of furnace which the demonstrated over resilience, made transaction full-year. of environmentally As with issued further the sustainability year. quarter In ongoing momentum earlier, at our almost aspects to of to experiencing shareholders holding not with program. The Beverage these we investment the look some our year aims year-end with remains offer all at start a approximately Class includes and the of to third of the liquidity, other their inaugural reopening a were the been consideration Ardagh the we've production determined And leverage of sold We're fully A affected and advancing significantly working science-based in transaction, will Europe in sustainability quarter Packaging, – of in Packaging I is report the of Glass decarbonize which SPAC good the the high glass degree strong available its markets. our and initiative, we to pleased Metal face implementation liquidity the Packaging, regions, This very the our cash following progress include to the said, Glass for from strategy, billion, of A environmental we issued regularly. output common portion course, we a made environmental very future seasonal initiatives we the completion during And and And for could our capital in our reduction for on advancing. connection outflow demand despite Xx progress business. the AMP we transaction, in was sustainability our unchanged shares in with response of an can exchange first process common ended of adjusted has is, full-year, the as exchange and shares, expected to the On plans and all in which offering, upsize. year. to report and pace this which as for happy emissions we

on consumption our to However, our and bias continues favor focus packaging to businesses. our off-premise single-serve

inflation our inputs, recovery on line of in with in these the our we material many arrangements. customer and We costs seeing contractual focused are remain also of

full guidance year, For the of billion of we adjusted reiterated $X.X $X.XX our EBITDA billion. to

to of current quarter the leverage to we million stay expect We $XXX range And million. to $XXX second around EBITDA be net levels. expect adjusted in

the to to from later list transaction business the particular megatrends. we substrates multiple quarter. this cans, benefit our is conclude are AMP as beverage positioned near-term and look focus separately our And So in long-term, well to this

implementation approximately of growth continued and the excellence our this a of operational businesses our of drive stakeholder year Secondly, program to value. investment spend with million $XXX and commercial across pursuit

you. made Thank these be take any remarks, pleased questions. having now to very opening So we'll

Operator

question Thank from sir. with you, Instructions] We'll [Operator first Leithead take Mike our Barclays.

Michael Leithead

Great, day good guys. thanks and morning good

question, or similar think First Or generation to has started I changed that the through say if the is you composition just appreciate on you your different guidance substrates how earnings all? just would outlook. unchanged. fairly the we regions, But of it's at year?

Paul Coulson

well. mean, it we've I out don't break want think anymore remains. that already. guidance I obviously, Metal Packaging think done the performing I is to we

Michael Leithead

after to closes? would such fairly of quickly can lockup expire transaction, offer of enough. I theoretically from AMP be AMP the into could would potential is pass today you make Fair that some an for switching make following such close it. think the AMP there Got offer the mentioned Or before the you that some sort My again an need And then, could people you shares period shares. offer? involve exchange an of question or transaction ARD Paul,

Paul Coulson

lockup as an could transaction such offer and soon after AMP closes. such, make the No fairly we

Michael Leithead

Great, thank you.

Paul Coulson

Thank you.

Operator

Markets. Arun Your RBC with next question from comes Viswanathan Capital

Arun Viswanathan

Yes, thanks taking Good for question. morning. my

Paul Coulson

morning. Good

Arun Viswanathan

in categories? wanted I there catch in different Have market Glass, maybe. elaborate that the side. We Could the are a seen as a guess, any that you on quarters? off little I well? seen of up couple wine see how trail of the you just And next you bit nuances growth evolve little to on over on seltzer have because

Paul Coulson

seeing across right Glass demand. good our we're I think business,

all my in remarks, America, earlier we're So I on demand. into good seeing to what improve want profitability. converting selling And – focus of strong we're we do is in terms as the glass that North And said we can. very conditions in Glass market increased demand

Arun Viswanathan

pressures Okay. or materials? pass-through, And that cost anything would the Are guys is what as about point raw obviously as side? cost a logistics out? then any Metal you else but there far

Paul Coulson

one North we main it's in and with been logistics think been a on of I has number Glass common other which Well, the freight, highlighted people. America, in

Arun Viswanathan

Okay, thanks.

Operator

right. All

be question BMO with Anojja from Markets. Next Capital Shah will

Anojja Shah

morning. good Hi,

Paul Coulson

morning. Good

Anojja Shah

Glass question. on to that Just build

an specific that? Can why in around more outlook Glass into You mention you've you dig that color better or demand what's did you markets? Or end can maybe North than seen while. any any just a America improving is in give

Paul Coulson

Well, I tight we're conditions. market on piece. seeing its seeing is I our probably we're demand. think network mean, really good in the capacity. We're very piece, increased But probably right certainly the And glass – across as the cans. pandemic right has obviously, across well consumption in in balance, as certainly good food food

pretty year, for good – market this seeing So we looking anyway, we're forward and conditions.

say, as the so piece. across I And it's right

Anojja Shah

you. some activity the lower Europe in for more Thank engineering you details that called over give Great. you And Glass, Okay. can out? on

Paul Coulson

comment John, would like you that? on to

John Sheehan

Yes, sure.

as an business, you years. know, Quarter-to-quarter, engineering can bit many it have for lumpy. We many, a be

So $X it or the $X million was impact on there impacted but our revenue line million by in EBITDA. minimal quarter,

You Europe up in X%. was or X% that Glass can see EBITDA

a little earnings. it bit So on be to there negligible just lumpier, but impact tends was

Anojja Shah

Great. Thank you very much.

John Sheehan

you. Thank

Operator

Your next of Bank question Spitz the line from with of comes Roger America.

Roger Spitz

very AMP? was XXXX the securitization you QX million? was much afternoon. December $XXX the put that off-balance What sheet XXXX, good at million amount in thanks Hi, of of to In attributed that $XXX

Paul Coulson

David?

David Matthews

Metal million, Overall, of is the same the of around in about side and that $XXX XX% of million, level. it's $XXX at on about it's Roger, house, Glass. X/X it the is

proportion. of So similar sort

Roger Spitz

billion. for CapEx, the XXXX EBITDA $XXX et Perfect. payments, The reconfirmed of you cetera? flow maintenance the the the $X.XX billion reconfirming Ardagh $X.XX million full Would be lease items, to outlook, instance, XX cash – for items, you other

David Matthews

could Yes. through that. I just run Maybe

XX, of million. then And what million maintenance interest this I $XX the and BGI last tax and think leases think $XXX million. $XXX is said I working around $XXX what CapEx, $XXX we million, outflow said million, is capital we time,

add So lot of year. a midpoint if EBITDA flow get take of guidance, $XXX around for million free the the and it you that the you cash off up outflow

Roger Spitz

then be Great. QX XXXX EBITDA would and EBITDA XXXX you providing lastly, And AMP's updated Okay. guidance? interested in

Paul Coulson

start the is we of with to formalized. SEC What we guidance, transaction. – can companies So relation is as published give when Roger, AMP's on we'll numbers the that the in is are separate performance this well track merger part to the that say trading

So year is on track. the $XXX million EBITDA plus this

Roger Spitz

much. very you Thank Great.

Paul Coulson

Thank you.

Operator

Management. JPMorgan [Operator Instructions] Bob This from Amenta We'll take question. is another one Asset with

Robert Amenta

you. Thank Yes.

of up following line little Just Roger's on a questioning.

So from Then comment $X you say, now just debt. X, on deal, the the release. of the bond little proceeds April you – I'm had from billion about not counting a in confused the

$X.X just got you $X.X still Are billion. it $X.X billion? that another billion I'm wondering or was getting You billion now… get to to $X.X

Paul Coulson

No.

You're We transaction when other $X.X the quite get the right. billion closes.

So it's billion. $X.X still

Robert Amenta

Okay.

bonds I So off and that's out the cash off held that. if take metal the

about million you got billion had addition you $X.X of billion in debt, coming of odd in of the against and You about books? the on had to $XXX cash $X that cash

Paul Coulson

Yes. correct. That's

Robert Amenta

maybe million go – leverage Ardagh year is the of EBITDA, that what is kind Or that out haven't level plans of net there send some yet? you'd like Finance going you Okay. do to this have up aberration. $XXX that And I'm Or target that target at $XXX of I to there was have and feel EBITDA? discussed cash, of do to – and any last but million kind leverage a of But to say, have, to you so with like would other sure on any limits an you LTM, Glass of higher what discussed a or you have given that's bonds? yet, you those

Paul Coulson

And U.S. call the intend $XXX balance than February we to more retained to that the secured the expected shareholder be our let in to million any remember our we in you XX% purposes, proceeds, have to say that do do remaining made forward the businesses results, with with or you'll announced But in haven't we debt. stage dollar be to on – $XX for you come some will of intend X%. Trivium. indicated the we of But in – the also the mainly And EBITDA, transaction, that in repay will balance, on of value AMP stake, has use regard will as a do me the the billion including decisions our and is then transaction probably to we more which have unsecured corporate $X.X of you'll in to general what importantly, cash of QX existing not AGSA distributions. with billion But guidance yet. And separate of million. going $X at notes, AGSA, some with will the wise. of be $XXX all the billion – last, which reduce $X first debt leverage will alone but at our when XX% what do we forward it's Well, call have applied million itself. Glass stake have currently of balance Trivium in we

Okay?

Robert Amenta

just lastly, just year for Glass Yes, CapEx you Right. business mentioned, initially know this you road. but maybe flow. on cash But this from what more the EBITDA on all roughly was then sorry, I a and Glass – not dividend guess down you're the XXXX the I – year? for I planning AMP, focused is I'm CapEx can just – of business, the for

Paul Coulson

David?

David Matthews

$XXX growth spend the is that we're Glass. that in maintenance at having $XXX about business million and million, CapEx of Yes. that of million Of the And is $XXX that Glass Beverage. is about million of $XXX investments, of

Robert Amenta

Thanks. had. I all That's perfect. Okay,

Paul Coulson

you. Thank

Operator

All right.

Edwards to Sachs. go Travis we'll Next, Goldman with

Travis Edwards

off-premise you Hey question, the of Europe just of good you America, Can had but just – have a and towards what mind us us. more on side, quick you can refreshing sort your mix in is on and North color. thanks off-premise don't I on-premise? morning bias for consumption refresh the a know between Glass you and and I if

Paul Coulson

John?

John Sheehan

probably a of where even our do year-on-year. in we is first pre-pandemic terms Glass the Europe. supply sector. But full in where there they go, the don't it's up would on-premise they volumes quarter, have the containers, we but period recommend were slightly against And of that Obviously, into what we off-premise highest Yes. we visibility XX%-plus

was given quarter that been the very but of off-premise. Europe around is most resilient, year, XX% somewhere first So it's for lockdown of this

Travis Edwards

That's you And you volume get but you some have sort with think sort to but you of a color path really of any there, pre-pandemic levels? pre-pandemic pieces, about to there? strength obviously, still, of Are generally Again, on hard path when any levels? of to moving recovery helpful. as the do expectation to say sort your lot

Paul Coulson

very I growing Well, Well, we're the strongly, as pleased the very out obviously, with demand. are our think demand and peers. in is beverage cans sold completely we're

that very well. with also far with So house side happened in as recovery the what's the Europe and of We're demand happy Glass its in and U.S. so

Travis Edwards

quarter. Good you. Got Thank it. luck this

Operator

All right. have time. we at this questions further It no looks like

I'd Paul like over closing remarks. any Coulson back Mr. the additional to So call turn to for or

Paul Coulson

you, today. forward thank joining for July. to in Well, you results we everyone, look our QX late And us again talking to with

joining Thank for everyone, Bye-bye. us. Okay. you,

Operator

thank participation. We for conference. again their today’s conclude everyone does That