PR Newswire | Apr 29, 2021 07:02AM EDT

04/29 06:00 CDT

Ardagh Group S.A. - First Quarter 2021 Results LUXEMBOURG, April 29, 2021

LUXEMBOURG, April 29, 2021 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its results for the first quarter ended March 31, 2021.



March 31, 2021 March 31, 2020 ChangeConstant Currency

($'m except per share data)

Revenue 1,774 1,622 9% 5%

Profit for the 3 83 period

Earnings per share0.01 0.35

Adjusted EBITDA ^ 300 273 10% 5% (1)

Adjusted earnings 0.37 0.31 per share ^(1)(2)



Dividend per share 0.15 cents 0.15 cents declared ^(3)



At March 31, 2021At December 31, 2020

Net debt to LTM Adjusted EBITDA ^ 5.0x 4.9x (4)

Paul Coulson, Chairman and Chief Executive, said: "We have made an excellent start to 2021, with strong earnings growth in Metal Packaging and a robust performance in Glass Packaging Europe. Our $2.1 billion investment program is fully on track and we are well-placed to deliver further growth over the course of the year."

* Revenue increased by 9% to $1,774 million, reflecting increased shipments in both Metal Packaging and Glass Packaging, the pass through of higher input costs and favorable currency translation effects. * Metal Packaging shipments increased by 8% in the quarter. Speciality can volumes increased by 16% and represented c.45% of total shipments. * Glass Packaging shipments increased by 2%, led by growth in North America. Shipments in Europe were in line with the prior year, despite continuing lockdowns in much of Europe during the quarter. * Adjusted EBITDA of $300 million increased by 10% at actual exchange rates and by 5% on a constant currency basis. * Metal Packaging Adjusted EBITDA increased by 23%, with growth of 34% and 12% in the Americas and Europe respectively. Glass Packaging Adjusted EBITDA decreased by 8%, due to a lower outturn in Glass Packaging North America, which was impacted by severe weather and higher operating costs. Glass Packaging Europe Adjusted EBITDA increased by 9% and was in line with the prior year at constant currency rates. * Metal Packaging to list separately on NYSE as Ardagh Metal Packaging ("AMP"), a pure-play beverage can producer with leading market positions in the Americas and Europe. On completion of the transaction with Gores Holdings V Inc., expected in the second quarter of 2021, Ardagh Group will hold a stake of ~80% in AMP and will receive up to $3.4 billion in cash. * Business Growth Investment program progressing on plan, with two new sleek lines commissioned and ramping up in Olive Branch, Mississippi. First quarter growth investment spending of $162 million is on track, with multiple other projects under way. * Cash and available liquidity of $1.6 billion at March 2021. * Sustainability agenda further progressed during the quarter, with advances in implementing our SBTI based emissions reduction and social sustainability strategies. The Furnace for the Future project is advancing and, in AMP, a $2.8 billion Green Bond was issued in March. * Re-iterating 2021 Guidance: Adjusted EBITDA of $1.28 - $1.30 billion in 2021 with end of year reported net leverage of around 5x LTM Adjusted EBITDA. Second quarter Adjusted EBITDA is expected to be $325 - $330 million.

Financial Performance Review Bridge of 2020 to 2021 Revenue and Adjusted EBITDA Three months ended March 31, 2021



Metal Metal Glass Glass Revenue Beverage Beverage PackagingPackaging Group PackagingPackagingEurope North Europe Americas America

$'m $'m $'m $'m $'m

Revenue 2020 385 444 384 409 1,622

Organic 19 59 (7) 16 87

FX translation32 - 33 - 65

Revenue 2021 436 503 410 425 1,774



Metal Metal Glass Glass Adjusted Beverage Beverage PackagingPackaging Group EBITDA PackagingPackagingEurope North Europe Americas America

$'m $'m $'m $'m $'m

Adjusted 54 61 89 69 273 EBITDA 2020

Organic 7 21 - (14) 14

FX translation5 - 8 - 13

Adjusted 66 82 97 55 300 EBITDA 2021



2021 margin % 15.1% 16.3% 23.7% 12.9% 16.9%

2020 margin % 14.0% 13.7% 23.2% 16.9% 16.8%

Group Performance

Revenue in the three months ended March 31, 2021 increased by $152 million, or 9%, to $1,774 million, compared with $1,622 million in the three months ended March 31, 2020. The increase in revenue is primarily driven by favorable volume/mix effects, which includes an impact of the Group's business growth investment program, the pass through to customers of higher input costs and favorable foreign currency translation effects of $65 million.

Adjusted EBITDA in the three months ended March 31, 2021 increased by $27 million, or 10%, to $300 million, compared with $273 million in the three months ended March 31, 2020. The increase was primarily driven by volume/mix growth in Metal Packaging, including from the impact of the Group's business growth investment program, and favorable foreign currency translation effects of $13 million.

Metal Beverage Packaging Europe

Revenue increased by $51 million, or 13%, to $436 million in the three months ended March 31, 2021, compared with $385 million in the three months ended March 31, 2020. Excluding favorable foreign currency translation effects of $32 million, revenue increased by $19 million, mainly due to favorable volume/mix effects, which includes an impact of the Group's business growth investment program, and by the pass through of higher metal costs.

Adjusted EBITDA increased by $12 million, or 22%, to $66 million in the three months ended March 31, 2021, compared with $54 million in the three months ended March 31, 2020. Excluding favorable foreign currency translation effects of $5 million, Adjusted EBITDA increased by $7 million, principally due to favorable volume/mix effects, which includes an impact of the Group's business growth investment program.

Metal Beverage Packaging Americas

Revenue increased by $59 million, or 13%, to $503 million in the three months ended March 31, 2021, compared with $444 million in the three months ended March 31, 2020. The increase in revenue principally reflected favorable volume/mix effects, which includes an impact of the Group's business growth investment program, and the pass through of higher input costs.

Adjusted EBITDA increased by $21 million, or 34%, to $82 million in the three months ended March 31, 2021, compared with $61 million in the three-month period ended March 31, 2020. The increase was mainly driven by favorable volume/mix effects, which includes an impact of the Group's business growth investment program, and lower operating costs.

Glass Packaging Europe

Revenue increased by $26 million, or 7%, to $410 million in the three months ended March 31, 2021, compared with $384 million in the three months ended March 31, 2020. Excluding favorable foreign currency translation effects of $33 million, revenue decreased by $7 million, mainly arising from lower engineering activity.

Adjusted EBITDA increased by $8 million, or 9%, to $97 million in the three months ended March 31, 2021, compared with $89 million in the three months ended March 31, 2020. At constant exchange rates, Adjusted EBITDA was in line with the same period last year.

Glass Packaging North America

Revenue increased by $16 million, or 4%, to $425 million in the three months ended March 31, 2021, compared with $409 million in the three months ended March 31, 2020. The increase in revenue reflected favorable volume/mix effects of 3% and the pass through of higher input costs.

Adjusted EBITDA decreased by $14 million, to $55 million in the three months ended March 31, 2021, compared with $69 million in the three months ended March 31, 2020. The decrease was as a result of increased operating costs, principally due to freight and severe weather events.

Combination of Ardagh Metal Packaging with Gores Holdings V

On February 22, 2021, the Group entered into a business combination agreement with Gores Holdings V, a special purpose acquisition company sponsored by an affiliate of The Gores Group for the purpose of effecting a merger, acquisition, or similar business combination, under which Gores Holdings V will combine with Ardagh's metal packaging business that will be held by an Ardagh wholly owned subsidiary, AMP, to create an independent, pure-play beverage can business, public company. AMP also announced its intention to apply to list its shares on the NYSE.

Additional investors have committed to participate in the proposed business combination by subscribing an aggregate $600 million in a private placement at $10.00 per share. In connection with the transactions,on March 12, 2021, two affiliates of the Ardagh Group (the "Co-Issuers") issued green bonds of $2.8 billion equivalent (the "AMP Notes Issuance"). Assuming no share redemptions by the public stockholders of Gores Holdings V, approximately $525 million in cash held in Gores Holdings V's trust account, together with the $600 million in private placement proceeds and approximately $2.3 billion of the new debt raised by AMP, will be used to pay up to $3.4 billion in cash to the Group, as well as to pay transaction expenses with the remainder of the AMP Notes issuance used for general corporate purposes. Upon closing of the transactions, assuming no redemptions by Gores Holdings V's public stockholders, the Group will retain an equity interest in AMP of approximately 80%, the investors in the private placement will hold approximately 10% and Gores Holdings V's stockholders and its sponsor will hold approximately 10%.

The proposed business combination, which has been approved by the boards of directors of both Ardagh and Gores Holdings V, is expected to close in the second quarter of 2021, subject to receipt of Gores Holdings V stockholder approval, approval of AMP's shares for listing on the NYSE, the satisfaction of the condition to Ardagh's obligations that it receives at least $3 billion in cash from the transactions and the satisfaction or waiver of other customary closing conditions.

On April 1, 2021, the transfer of Ardagh's metal packaging business to AMP was completed and $2.3 billion was paid to Ardagh on the release of the proceeds of the AMP Notes Issuance from escrow.

In connection with the AMP Notes Issuance, the Group has designated the Co-Issuers and the AMP entities as unrestricted subsidiaries under its existing bond indentures and the Global Asset Based Loan Facility.

On April 1, 2021, the Group reduced the size of Global Asset Based Loan Facility from $700 million to $500 million as a result of the transaction between Ardagh Metal Packaging and Gores Holdings V.

Earnings Webcast and Conference Call Details

Ardagh Group S.A.

Ardagh Group S.A. (NYSE: ARD) will hold its first quarter 2021 earnings webcast and conference call for investors at 3 p.m. BST (10 a.m. ET) on April 29, 2021. Please use the following webcast link to register for this call:

Webcast registration and access:

https://globalmeet.webcasts.com/viewer/event.jsp?ei=1456544&tp_key=8c7d661a79

Conference call dial in:

United States: +1 323-794-2423International: +44 (0) 330 336 9105Participant pin code: 8160622

Slides and quarterly report

Supplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.

The 2021 interim report for ARD Finance S.A., issuer of the Senior Secured Toggle Notes due 2027, will be published in due course and available at http://www.ardholdings-sa.com/.

Ardagh Metal Packaging

Ardagh Metal Packaging will hold a first quarter 2021 update webcast and conference call for investors at 3 p.m. BST (10 a.m. ET) on April 30, 2021. Please use the following webcast link to register for this call:

Webcast registration and access:

https://globalmeet.webcasts.com/starthere.jsp?ei=1456585&tp_key=84de8f5e23

Conference call dial in:

United States: +1 323-794-2551International: +44 (0) 330 336 9105Participant pin code: 8053286

About Ardagh Group

Ardagh Group is a global supplier of infinitely recyclable metal and glass packaging for the world's leading brands. Ardagh operates 57 metal and glass production facilities in 12 countries, employing more than 16,000 people with sales of approximately $7bn.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures

This press release may contain certain financial measures such as Adjusted EBITDA, working capital, Adjusted operating cash flow, Adjusted free cash flow, net debt, Adjusted profit/(loss), Adjusted earnings/(loss) per share, and ratios relating thereto that are not calculated in accordance with IFRS or US GAAP. Non-GAAP financial measures may be considered in addition to GAAP financial information, but should not be used as substitutes for the corresponding GAAP measures. The non-GAAP financial measures used by Ardagh may differ from, and not be comparable to, similarly titled measures used by other companies.

Unaudited Consolidated Condensed Income Statement for the three months ended March 31, 2021 and 2020



Three months ended March 31, 2021Three months ended March 31, 2020

Before Exceptional Before Exceptional Exceptionalitems exceptionalitems items Total items Total

$'m $'m $'m $'m $'m $'m

Revenue 1,774 - 1,774 1,622 - 1,622

Cost of sales (1,496) (3) (1,499)(1,360) - (1,360)

Gross profit 278 (3) 275 262 - 262

Sales, general and (100) (5) (105) (98) (3) (101) administration expenses

Intangible (61) - (61) (58) - (58) amortization

Operating 117 (8) 109 106 (3) 103 profit

Net finance (69) (5) (74) (34) - (34) expense

Share of post-tax loss in equity (5) (13) (18) 1 (4) (3) accounted joint venture

Profit before 43 (26) 17 73 (7) 66 tax

Income tax (16) 2 (14) (24) 14 (10) charge

Profit from continuing 27 (24) 3 49 7 56 operations

Profit from discontinued - - - - 27 27 operation, net of tax

Profit for the27 (24) 3 49 34 83 period



Earnings per $0.01 $0.35 share:

Unaudited Consolidated Condensed Statement of Financial Position



At March 31, 2021At December 31, 2020

$'m $'m



Non-current assets

Intangible assets 2,650 2,756

Property, plant and equipment 3,105 2,945

Other non-current assets 657 717

6,412 6,418

Current assets

Inventories 957 923

Trade and other receivables 1,015 869

Cash and cash equivalents 921 1,267

Restricted cash in escrow 2,764 -

Other current assets including 219 175 contract assets

5,876 3,234

TOTAL ASSETS 12,288 9,652



TOTAL EQUITY (264) (361)



Non-current liabilities

Borrowings including lease 9,484 6,764 obligations

Other non-current liabilities 1,094 1,261

10,578 8,025

Current liabilities

Borrowings including lease 100 97 obligations

Payables and other current 1,874 1,891 liabilities

1,974 1,988

TOTAL LIABILITIES 12,552 10,013

TOTAL EQUITY and LIABILITIES 12,288 9,652

Unaudited Consolidated Condensed Statement of Cash Flows



Three months ended March 31,

2021 2020

$'m $'m

Cash flows used in operating activities

Cash used in operations (12) (191)

Interest paid (19) (84)

Income tax paid (4) (12)

Cash flows used in operating activities (35) (287)



Cash flows used in investing activities

Capital expenditure (247) (126)

Other investing cash flows (13) -

Cash flows used in investing activities (260) (126)



Cash flows from financing activities

Changes in borrowings, net (6) 814

Lease payments (27) (22)

Other financing cash flows (9) (5)

Net cash (ouflow)/inflow from financing (42) 787 activities



Net (decrease)/increase in cash and cash (337) 374 equivalents



Cash and cash equivalents at beginning of 1,267 614 period

Foreign exchange losses on cash and cash (9) (26) equivalents

Cash and cash equivalents at end of period 921 962

Financial assets and liabilities At March 31, 2021, the Group's net debt and available liquidity was as follows:



Drawn amountUndrawn amount

$'m $'m

Senior Secured and Senior Notes 6,523 -

Senior Secured and Senior Notes - Ardagh Metal 2,764 - Packaging

Global Asset Based Loan Facility - 663

Lease obligations 434 -

Other borrowings/credit lines 8 1

Total borrowings / undrawn facilities 9,729 664

Deferred debt issue costs and bond discounts / (145) - bond premium

Net borrowings / undrawn facilities 9,584 664

Cash and cash equivalents (921) 921

Restricted cash in escrow (2,764) -

Derivative financial instruments used to hedge 66 - foreign currency and interest rate risk

Net debt / available liquidity 5,965 1,585

Reconciliation of profit for the period to Adjusted profit



Three months ended March 31,

2021 2020

$'m $'m

Profit for the period 3 83

Share of post-tax loss in equity accounted joint venture18 3

21 86

Exceptional items, net of tax 11 (38)

Intangible amortization, net of tax 47 44

Gains on derivative financial instruments and foreign (4) (20) currency

75 72

Share of Adjusted profit in equity accounted joint 12 1 venture

Adjusted profit for the period 87 73



Weighted average common shares 236.37 236.36



Earnings per share 0.01 0.35



Adjusted earnings per share 0.37 0.31

Reconciliation of profit from continuing operations for the period to Adjusted EBITDA, Adjusted operating cash flow and Adjusted free cash flow



Three months ended March 31,

2021 2020

$'m $'m

Profit from continuing operations 3 56

Income tax charge 14 10

Net finance expense 74 34

Depreciation and amortization 183 167

Exceptional operating items 8 3

Share of post-tax loss in equity accounted joint venture18 3

Adjusted EBITDA 300 273

Movement in working capital (290) (409)

Exceptional restructuring paid - (1)

Capital expenditure ^(5) (247) (126)

Lease payments (26) (22)

Adjusted operating cash outflow (263) (285)

Interest paid (19) (84)

Income tax paid (4) (12)

Adjusted free cash outflow (286) (381)

Related Footnotes

(1) A reconciliation to the most comparable GAAP measures can be found at the back of this release.

Adjusted earnings per share and Adjusted profit for the three months ended(2) March 31, 2021 include the Group's share of the Adjusted profit/(loss) of its material equity accounted joint venture, Trivium Packaging B.V..

(3) Payable on June 16, 2021 to shareholders of record on June 2, 2021.

Net debt is comprised of net borrowings and derivative financial instruments used to hedge foreign currency and interest rate risk, net of(4) cash and cash equivalents and restricted cash held in escrow. Net borrowings comprises non-current and current borrowings including lease obligations.

Capital expenditure for the three months ended March 31, 2021, includes(5) $162 million (2020: $41 million) relating to the Group's Business Growth Investment program.

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SOURCE Ardagh Group S.A.