PR Newswire | Oct 22, 2020 07:01AM EDT

10/22 06:00 CDT

Ardagh Group S.A. - Third Quarter 2020 Results LUXEMBOURG, Oct. 22, 2020

LUXEMBOURG, Oct. 22, 2020 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its results for the third quarter ended September 30, 2020.



September 30,September 30,ChangeConstant 2020 2019 Currency

($'m except per share data)

Revenue ^(1) 1,800 1,728 4% 2%



Profit/(loss) for the period - Group 43 (29)

Profit/(loss) for the period margin - Group2.4% (1.7%)

Earnings/(loss) per share - Group 0.18 (0.12)



Adjusted EBITDA ^(1) 330 320 3% 1%

Adjusted EBITDA margin ^(1) 18.3% 18.5%

Adjusted earnings per share - Group ^(2) 0.48 0.60



Dividend per share declared ^(3) 0.15 0.14

Paul Coulson, Chairman and Chief Executive, said, "The Group performed very well in the quarter in a challenging operating environment, with continued strong growth in Metal Beverage Packaging and resumed volume growth in Glass Packaging, as on-premise channels re-opened. Our 2020 $250 million Business Growth Investment program has progressed well and will deliver new beverage can capacity in North America later this quarter. In addition, given a very favorable long-term outlook for sustainable packaging, we plan to invest over $1.8 billion in organic growth projects in 2021 to 2024, in addition to maintenance capex. This investment, will be principally in our beverage can business."

* Revenue for the quarter of $1,800 million, an increase of 4% at actual exchange rates and 2% at constant currency; Glass Packaging increased by 4% at constant currency, while Metal Beverage Packaging grew by 1% at constant currency, after the pass through of lower metal input costs. * Group volume/mix increased by 3%, with growth of 4% and 3% in Metal Beverage Packaging and Glass Packaging respectively. * Metal Beverage Packaging shipments increased by 7% in the quarter and by 4% in the year to date, with growth recorded in all regions. Specialty can shipments increased by 20% in the quarter and by 11% to date in 2020. * Adjusted EBITDA of $330 million increased by 3% at actual exchange rates and 1% at constant currency. Metal Beverage Packaging Adjusted EBITDA increased by 9% at constant currency in the quarter. Glass Packaging Adjusted EBITDA decreased by 6% at constant currency. * Earnings per share of $0.18 (2019: loss per share of $0.12), with Adjusted earnings per share of $0.48 (2019: $0.60). * The 2020 $250 million Business Growth Investment program remains on track, with two new beverage can lines due to commence production in North America by the end of the year. The very favorable outlook for sustainable packaging supports planned organic investment of over $1.8 billion in business growth projects in 2021-2024, approximately 85% of which will be in our beverage can businesses and underpinned by long-term customer contracts. All told, investment in organic growth projects will exceed $2 billion in the five years to 2024, with investments of approximately $800 million in 2021, $500 million in 2022 and the remaining $500 million during 2023-2024. The investment program, which will be funded from existing cash resources, free cash flow and, where necessary, incremental debt will provide attractive, de-leveraging returns to the Group. * Cash and available liquidity of $1.9 billion at September 30, 2020, including over $1.2 billion in cash, having fully repaid drawings under the Group's Global Asset Based Loan Facility during the quarter. * Sustainability agenda further advanced during the quarter, with the commitment to adopt science-based sustainability targets.

Summary Financial Information



Three months ended September 30,Nine months ended September 30,

2020 2019 2020 2019

(in $ millions, except EPS, ratios and percentages)

Revenue ^(4) 1,800 1,728 5,028 5,079



Profit/(loss) for the period - Group 43 (29) 62 53

Profit/(loss) for the period margin - Group 2.4% (1.7%) 1.2% 1.0%

Earnings/(loss) per share - Group 0.18 (0.12) 0.26 0.22



Adjusted EBITDA ^(4) 330 320 874 906

Adjusted EBITDA margin^ (4) 18.3% 18.5% 17.4% 17.8%

Adjusted profit for the period - Group ^(5) 113 142 273 339

Adjusted earnings per share - Group^ (5) 0.48 0.60 1.16 1.43



Adjusted operating cash flow ^(4) 345 255 241 288



At September 30,At December 31,

2020 2019

$'m $'m

Net debt ^(6) 5,547 5,328

Cash and available liquidity 1,891 1,278

Net debt to LTM Adjusted EBITDA ^(7) 4.9x 4.5x

Financial Performance Review Bridge of 2019 to 2020 Revenue and Adjusted EBITDA Three months ended September 30, 2020



Metal Metal Glass Glass Revenue Beverage Beverage PackagingPackagingGroup PackagingPackagingEurope North Europe Americas America

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

Revenue 2019 412 464 414 438 1,728

Organic (6) 14 41 (9) 40

FX translation 15 - 17 - 32

Revenue 2020 421 478 472 429 1,800



Metal Metal Glass Glass Adjusted EBITDA Beverage Beverage PackagingPackagingGroup PackagingPackagingEurope North Europe Americas America

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

Adjusted EBITDA 201968 67 108 77 320

Organic 2 11 (1) (10) 2

FX translation 3 - 5 - 8

Adjusted EBITDA 202073 78 112 67 330



2020 margin 17.3% 16.3% 23.7% 15.6% 18.3%

2019 margin 16.5% 14.4% 26.1% 17.6% 18.5%





Nine months ended September 30, 2020



Metal Metal Glass Glass Revenue Beverage Beverage PackagingPackagingGroup PackagingPackagingEurope North Europe Americas America

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

Revenue 2019 1,215 1,359 1,218 1,287 5,079

Organic (6) (2) 11 (41) (38)

FX translation (8) - (5) - (13)

Revenue 2020 1,201 1,357 1,224 1,246 5,028



Metal Metal Glass Glass Adjusted EBITDA Beverage Beverage PackagingPackagingGroup PackagingPackagingEurope North Europe Americas America

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

Adjusted EBITDA 2019209 184 292 221 906

Organic (11) 24 (15) (29) (31)

FX translation (1) - - - (1)

Adjusted EBITDA 2020197 208 277 192 874



2020 margin 16.4% 15.3% 22.6% 15.4% 17.4%

2019 margin 17.2% 13.5% 24.0% 17.2% 17.8%

Group Performance

Revenue of $1,800 million increased by 4% in the three months ended September 30, 2020, compared with the same period last year. On a constant currency basis, revenue increased by 2%, due to favorable volume/mix effects in Metal Beverage Packaging and Glass Packaging Europe, partly offset by the pass through of lower input costs in Metal Beverage Packaging and lower demand in Glass Packaging North America.

Third quarter Adjusted EBITDA of $330 million increased by 3% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 1%, as a 9% increase in Metal Beverage Packaging and a stable outturn in Glass Packaging Europe were partly offset by increased operating costs including $8 million COVID-19 related direct costs and unfavorable volume/mix in Glass Packaging North America.

Metal Beverage Packaging Europe

Revenue increased by $9 million, or 2%, to $421 million in the three months ended September 30, 2020, compared with $412 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $15 million, revenue decreased by $6 million, with volume/mix growth of 1% offset by the pass through of lower metal costs.

Adjusted EBITDA increased by 7%, to $73 million in the three months ended September 30, 2020, compared with $68 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $3 million, Adjusted EBITDA increased by $2 million, principally due to favorable volume/mix effects, partly offset by increased operating costs.

Metal Beverage Packaging Americas

Revenue increased by $14 million, or 3%, to $478 million in the three months ended September 30, 2020, compared with $464 million in the three months ended September 30, 2019. The increase in revenue principally reflected favorable volume/mix effects of 6%, partly offset by the pass through of lower input costs.

Adjusted EBITDA increased by $11 million, or 16%, to $78 million in the three months ended September 30, 2020, compared with $67 million in the three-month period ended September 30, 2019. The increase was mainly driven by favorable volume/mix effects, partly offset by higher operating costs.

Glass Packaging Europe

Revenue increased by $58 million, or 14%, to $472 million in the three months ended September 30, 2020, compared with $414 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $17 million, revenue increased by $41 million, or 10%, mainly due to favorable volume/mix effects of 8%, partly as a result of increased customer demand as the relaxation of COVID-19 restrictions showed early signs of translating to a recovery in "on-premise" consumption, in addition to selling price increases including related to the pass through of higher input costs.

Adjusted EBITDA increased by $4 million, or 4%, to $112 million in the three months ended September 30, 2020, compared with $108 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $5 million, Adjusted EBITDA was almost unchanged, as favorable volume/mix effects were offset by unfavorable fixed cost absorption as a result of lower production.

Glass Packaging North America

Revenue decreased by $9 million, or 2%, to $429 million in the three months ended September 30, 2020, compared with $438 million in the three months ended September 30, 2019. The decrease in revenue reflected unfavorable volume/mix effects of 2%, including a continued impact of COVID-19 on demand.

Adjusted EBITDA decreased by $10 million, or 13%, to $67 million in the three months ended September 30, 2020, compared with $77 million in the three months ended September 30, 2019. The decrease was mainly as a result of unfavorable volume/mix effects and higher operating and other costs.

COVID-19

The outbreak of the COVID-19 pandemic and measures to prevent its spread, including restrictions on travel, imposition of quarantines and prolonged closures of workplaces and other businesses, including hospitality, leisure and entertainment outlets, and the related cancellation of events, has impacted our business in a number of ways. This has included an adverse effect from reduced global economic activity and resulting demand for our customers' products and, therefore, the products we manufacture. It may also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce. The COVID-19 impact on capital markets could also impact our cost of borrowing.

The ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial and operational results, will be determined by the length of time that such disruptions continue, which will, in turn, depend on the duration of the COVID-19 pandemic, the impact of governmental and other regulations in response to the pandemic and the resulting effect on macroeconomic activity and consumer behavior.

During the three months ended September 30, 2020 the gradual relaxation of governmental measures to prevent the spread of the virus including lockdowns imposed earlier in the year, and in place for most of the second quarter, showed early signs of a recovery in "on-premise" consumption. In the quarter, this resulted in a sequential improvement in customer demand for our Glass packaging products which had experienced reductions in customer demand and therefore revenue as a direct consequence of the various global lockdowns and the related impact to "on-premise" sales during the second quarter. During the three months ended September 30, 2020, incremental COVID-19 related costs, including safety and cleaning costs, continued to be incurred throughout the Group.

Our response to the COVID-19 across our business operations can be summarized as follows:

Business Continuity:We are a leading supplier of consumer packaging solutions, comprising metal beverage cans and glass containers, primarily for the beverage and food end markets in Europe, North America and Brazil. In the markets we operate in, Ardagh is an essential provider of packaging to the beverage and food supply chain. Our people are deemed "Essential Critical Infrastructure Workers" under the guidance of the U.S. Department of Homeland Security, as are our customers. Where other governments issued guidance, we received equivalent designations in all other countries where we operate. We will continue to manage our capacity in response to the evolution of demand.

Employee health and safety:The health and safety of our 16,000 employees and their families and communities, as well as our contractors, suppliers and customers has been our highest priority since the outbreak of the crisis. We established a Group-wide task force to ensure an effective and consistent response across our business. Regular updates have been issued and a dedicated intranet site established to facilitate effective communication of recommendations, policies and procedures. Communication with all stakeholders has been a core element in our response.

Measures continue to evolve in line with best practice and with recommendations by national health authorities and the World Health Organization. Initiatives introduced to date have included: enhanced hygiene procedures in all locations, including temperature screening and increased cleaning in our production facilities; increased investment in personal protective equipment; adapting work practices and routines to ensure social distancing; establishing procedures for self-isolation; travel advisories including restrictions on all non-essential travel, prior to broader restrictions on any travel; restrictions on visitors to our production facilities or by our employees to external facilities; actively encouraging and ultimately requiring remote working for non-operational personnel, and enhancing our IT capability to facilitate increased remote working.

Strong liquidity:During the third quarter the Group repaid in full the drawings on our Global Asset Based Loan Facility. The Group had $1,230 million in cash and cash equivalents and restricted cash as of September 30, 2020, as well as available but undrawn liquidity of $661 million under its credit facilities.

Earnings Webcast and Conference Call Details

Ardagh Group S.A. (NYSE: ARD) will hold its third quarter 2020 earnings webcast and conference call for investors at 3 p.m. BST (10 a.m. ET) on October 22, 2020. Please use the following webcast link to register for this call:

Webcast registration and access: https://onlinexperiences.com/Launch/QReg/ShowUUID=00A39331-7806-4CD6-9FF0-E594511E59C6

Conference call dial in:United States: +1855 85 70686International: +44 (0) 3333 000 804Participant pin code: 24030274#

Slides and quarterly reportSupplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.

The third quarter 2020 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/.

About Ardagh Group

Ardagh Group is a global supplier of infinitely recyclable metal and glass packaging for the world's leading brands. Ardagh operates 56 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 from continuing operations, 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.

Consolidated Interim Financial Statements Consolidated Interim Income Statement for the three months ended September 30, 2020



Unaudited Unaudited

Three months ended September 30, 2020Three months ended September 30, 2019

Before Before

exceptional Exceptional exceptional Exceptional

items items Total items items Total

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

Revenue 1,800 - 1,800 1,728 - 1,728

Cost of sales (1,499) (3) (1,502)(1,430) (5) (1,435)

Gross profit 301 (3) 298 298 (5) 293

Sales, general and administration expenses (85) (8) (93) (80) (28) (108)

Intangible amortization (59) - (59) (59) - (59)

Operating profit 157 (11) 146 159 (33) 126

Net finance expense (78) - (78) (115) (112) (227)

Share of post-tax profit/(loss) in equity accounted joint venture 2 (4) (2) - - -

Profit/(loss) before tax 81 (15) 66 44 (145) (101)

Income tax (charge)/credit (24) 1 (23) (13) 17 4

Profit/(loss) from continuing operations 57 (14) 43 31 (128) (97)

Profit from discontinued operation, net of tax - - - 70 (2) 68

Profit/(loss) for the period 57 (14) 43 101 (130) (29)



Profit/(loss) attributable to:

Equity holders 43 (29)

Non-controlling interests - -

Profit/(loss) for the period 43 (29)



Earnings/(loss) per share:

Basic and diluted earnings/(loss) per share attributable to equity $0.18 ($0.12)holders



Earnings/(loss) per share from continuing operations:

Basic and diluted earnings/(loss) per share from continuing $0.18 ($0.41)operations attributable to equity holders

Consolidated Interim Income Statement for the nine months ended September 30, 2020



Unaudited Unaudited

Nine months ended September 30, 2020Nine months ended September 30, 2019

Before Before

exceptional Exceptional exceptionalExceptional

items items Total items items Total

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

Revenue 5,028 - 5,028 5,079 - 5,079

Cost of sales (4,230) (5) (4,235) (4,248) 2 (4,246)

Gross profit 798 (5) 793 831 2 833

Sales, general and administration expenses (258) (14) (272) (234) (42) (276)

Intangible amortization (175) - (175) (176) - (176)

Operating profit 365 (19) 346 421 (40) 381

Net finance expense (183) (74) (257) (355) (112) (467)

Share of post-tax loss in equity accounted joint venture (10) (12) (22) - - -

Profit/(loss) before tax 172 (105) 67 66 (152) (86)

Income tax (charge)/credit (56) 29 (27) (23) 28 5

Profit/(loss) from continuing operations 116 (76) 40 43 (124) (81)

Profit from discontinued operation, net of tax - 22 22 144 (10) 134

Profit for the period 116 (54) 62 187 (134) 53



Profit attributable to:

Equity holders 62 53

Non-controlling interests - -

Profit for the period 62 53



Earnings per share:

Basic and diluted earnings per share attributable to equity $0.26 $0.22 holders



Earnings/(loss) per share from continuing operations:

Basic and diluted earnings/(loss) per share from continuing $0.17 ($0.34) operations attributable to equity holders

Consolidated Interim Statement of Financial Position



Unaudited Unaudited

At September 30,At December 31,

2020 2019

$'m $'m



Non-current assets

Intangible assets 2,758 2,884

Property, plant and equipment 2,736 2,677

Derivative financial instruments 27 4

Deferred tax assets 239 204

Investment in material joint venture 381 375

Other non-current assets 69 68

6,210 6,212

Current assets

Inventories 933 964

Trade and other receivables 910 734

Contract assets 116 151

Derivative financial instruments 14 3

Cash and cash equivalents 1,230 614

3,203 2,466

TOTAL ASSETS 9,413 8,678

Equity attributable to owners of the parent

Issued capital 23 23

Share premium 1,292 1,292

Capital contribution 485 485

Other reserves 170 165

Retained earnings (2,330) (2,181)

(360) (216)

Non-controlling interests 1 1

TOTAL EQUITY (359) (215)

Non-current liabilities

Borrowings 6,382 5,524

Lease obligations 270 291

Employee benefit obligations 859 716

Derivative financial instruments 48 44

Deferred tax liabilities 320 344

Provisions 43 29

7,922 6,948

Current liabilities

Borrowings 20 22

Lease obligations 75 73

Interest payable 84 60

Derivative financial instruments 15 17

Trade and other payables 1,448 1,628

Income tax payable 125 97

Provisions 48 48

Dividend payable to shareholders 35 -

1,850 1,945

TOTAL LIABILITIES 9,772 8,893

TOTAL EQUITY and LIABILITIES 9,413 8,678

Consolidated Interim Statement of Cash Flows



Unaudited

Three months endedNine months ended September 30, September 30,

2020 2019 2020 2019

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

Cash flows from operating activities

Cash generated from continuing operations 481 386 585 717

Interest paid (30) (120) (187) (328)

Income tax paid (11) (5) (34) (38)

Net cash generated from operating activities - continuing operations 440 261 364 351

Net cash generated from operating activities - discontinued operation^(8) - 139 - 159

Net cash generated from operating activities 440 400 364 510



Cash flows used in investing activities

Purchase of property, plant and equipment (119)(123) (345) (397)

Purchase of software and other intangibles (3) (2) (8) (8)

Proceeds from disposal of property, plant and equipment - 1 1 1

Investing cash flows used in continuing operations (122)(124) (352) (404)

Proceeds from disposal of discontinued operation - - 32 -

Investing cash flows used in discontinued operation - (28) - (96)

Net cash used in investing activities (122)(152) (320) (500)



Cash flows from financing activities

Proceeds from borrowings - 1,706 4,068 1,923

Repayment of borrowings (502)(1,652) (3,255) (1,652)

Early redemption premium paid - (90) (61) (90)

Deferred debt issue costs paid (8) (12) (30) (12)

Lease payments (23) (19) (68) (55)

Dividends paid - (33) (69) (99)

Consideration received on extinguishment of derivative financial instruments- 23 - 9

Financing cash flows (used in)/from continuing operations (533)(77) 585 24

Financing cash flows from discontinued operation - 15 - -

Net cash (outflow)/inflow from financing activities (533)(62) 585 24



Net (decrease)/increase in cash and cash equivalents (215)186 629 34

Cash and cash equivalents at beginning of period 1,448374 614 530

Foreign exchange losses on cash and cash equivalents (3) (20) (13) (24)

Cash and cash equivalents at end of period 1,230540 1,230 540

Financial assets and liabilities



At September 30, 2020, the Group's net debt and available liquidity was as follows:



Maximum Final

amount maturity Facility Undrawn

Facility Currencydrawabledate type Amount drawn amount

Local Local

currency currency$'m $'m

m m

5.250% Senior Secured Notes USD 700 30-Apr-25Bullet 700 700 -

4.125% Senior Secured Notes USD 1,215 15-Aug-26Bullet 1,215 1,215 -

2.125% Senior Secured Notes EUR 439 15-Aug-26Bullet 439 514 -

2.125% Senior Secured Notes EUR 790 15-Aug-26Bullet 790 925 -

6.000% Senior Notes USD 800 15-Feb-25Bullet 800 826 -

4.750% Senior Notes GBP 400 15-Jul-27Bullet 400 513 -

5.250% Senior Notes USD 800 15-Aug-27Bullet 800 800 -

5.250% Senior Notes USD 1,000 15-Aug-27Bullet 1,000 1,000 -

Global Asset Based Loan Facility USD 660 07-Dec-22Revolving - - 660

Lease obligations Various - - Amortizing- 345 -

Other borrowings/credit lines Various - Rolling Amortizing- 20 1

Total borrowings / undrawn facilities 6,858 661

Deferred debt issue costs and bond discounts and (111) - bond premium

Net borrowings / undrawn facilities 6,747 661

Cash and cash equivalents (1,230)1,230

Derivative financial instruments used to hedge 30 - foreign currency and interest rate risk

Net debt / available liquidity 5,547 1,891

The maturity profile of the Group's Senior Secured Notes and Senior Notes is as follows:



At September 30,At December 31,

2020 2019

$'m $'m

Within one year or on demand - -

Between one and three years - 695

Between three and five years 1,526 832

Greater than five years 4,967 4,029

Total Senior Secured Notes and Senior Notes6,493 5,556

Reconciliation of profit/(loss) for the period to Adjusted profit



Three months endedNine months ended September 30, September 30,

2020 2019 2020 2019

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

Profit/(loss) for the period - Group 43 (29) 62 53

Share of post-tax loss in equity accounted joint venture 2 - 22 -

45 (29) 84 53

Exceptional items ^(9) 11 149 71 166

Tax credits associated with exceptional items ^(9) (1) (20) (29) (33)

Intangible amortization 59 61 175 192

Tax credit associated with intangible amortization (14) (16) (41) (43)

Losses/(gains) on derivative financial instruments and non- recurring Trivium transaction related foreign currency 1 (3) (20) 4 impact in net finance expense

101 142 240 339

Share of Adjusted Profit in equity accounted joint venture 12 - 33 -

Adjusted profit for the period - Group ^(10) 113 142 273 339



Weighted average common shares 236.36 236.36 236.36 236.36



Earnings/(loss) per share - Group 0.18 (0.12) 0.26 0.22



Adjusted earnings per share - Group ^(10) 0.48 0.60 1.16 1.43

Reconciliation of profit/(loss) from continuing operations for the period to Adjusted EBITDA from continuing operations, Adjusted operating cash flow from continuing operations and Adjusted free cash flow - Group



Three months endedNine months ended September 30, September 30,

2020 2019 2020 2019

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

Profit/(loss) from continuing operations 43 (97) 40 (81)

Income tax charge/(credit) 23 (4) 27 (5)

Net finance expense 78 227 257 467

Depreciation and amortization 173 161 509 485

Exceptional operating items 11 33 19 40

Share of post-tax loss in equity accounted joint venture2 - 22 -

Adjusted EBITDA from continuing operations 330 320 874 906

Movement in working capital 162 78 (210) (152)

Exceptional restructuring paid (2) (1) (3) (9)

Capital expenditure ^(11) (122) (124) (352) (404)

Lease payments (23) (18) (68) (53)

Adjusted operating cash flow from continuing operations 345 255 241 288

Adjusted operating cash flow from discontinued operation- 124 - 76

Interest paid ^(12) (30) (118) (187) (329)

Income tax paid (11) (17) (34) (53)

Adjusted free cash flow - Group ^(13) 304 244 20 (18)

(1) Continuing Operations results unless stated otherwise. A reconciliation tothe most comparable GAAP measures can be found at the back of this release.

(2) Adjusted earnings per share and Adjusted profit for the three and ninemonths ended September 30, 2020 includes the Group's share of the Adjustedprofit of its material equity accounted joint venture, Trivium Packaging B.V.which is further set out on the reconciliation at the back of this release. Thecomparative periods include the results of the divested Food & Specialtybusiness, which have been presented as a Discontinued Operation.

(3) Payable on December 16, 2020 to shareholders of record on December 2, 2020.

(4) Continuing Operations results for the three and nine months ended September30, 2019 unless stated otherwise. A reconciliation to the most comparable GAAPmeasures can be found at the back of this release.

(5) Adjusted earnings per share and Adjusted profit for the three and ninemonths ended September 30, 2020 includes the Group's share of the Adjustedprofit of its material equity accounted joint venture, Trivium Packaging B.V.which is further set out on the reconciliation at the back of this release. Thecomparative periods include the results of the divested Food & Specialtybusiness, which have been presented as a Discontinued Operation.

(6) Net debt is comprised of net borrowings and derivative financialinstruments used to hedge foreign currency and interest rate risk, net of cashand cash equivalents. Net borrowings includes IFRS 16 lease obligations.

(7) Net debt to LTM Adjusted EBITDA, at December 31, 2019, reflects the LTMAdjusted EBITDA for Continuing Operations.

(8) Operating cash flows from the discontinued operation for the three and ninemonths ended September 30, 2019, include interest and income tax payments of $3million and $11 million, and $5 million and $16 million respectively.

(9) Total exceptional items before tax for the nine months ended September 30,2020 are primarily comprised of $74 million debt refinancing and settlementcosts related to the redemption of notes in May and June, $22 million gainarising from the finalization of the completion accounts relating to thedisposal of the Food & Specialty Metal Packaging business and $29 million taxcredits, primarily relating to U.S. tax reform and debt refinancing andsettlement costs incurred in the period. Total exceptional items before tax forthe nine months ended September 30, 2019 are primarily comprised of $112million debt refinancing and settlement costs related to the notes repaid inAugust 2019 and $42 million transaction-related and other costs, primarilyrelated to the combination of the Group's Food & Specialty Metal Packagingbusiness with the business of Exal Corporation, $15 million related to aprovision for a court award and related interest, net of the tax adjustedindemnity receivable in respect of the Group's U.S. glass business legalmatter, $37 million related to a pension service credit recognized in GlassPackaging North America following amendments to a pension scheme, and $28million tax credits, primarily related to debt refinancing and settlementcosts, in addition to the aforementioned provision for a court award andrelated interest in respect of the Group's U.S glass business legal matter. Further information in respect of exceptional items is set out in note 5 of thethe unaudited consolidated interim financial statements for the three and ninemonths ended September 30, 2020 and 2019.

(10) Adjusted earnings per share and Adjusted profit for the three and ninemonths ended September 30, 2020 include the Group's share of the Adjustedprofit of its material equity accounted joint venture, Trivium Packaging B.V..The Group's share of the results of Trivium Packaging B.V. has been accountedfor in accordance with the Group's accounting policies. The Adjusted profit ofTrivium Packaging B.V. included in the Group's Adjusted profit has beencalculated in conformity with the Group's definition and presentation ofAdjusted profit, namely that the result for the period has been adjusted forthe joint venture's exceptional items, net of tax and amortization, net of taxin order to derive Adjusted profit. The comparative periods include the resultsof the divested Food & Specialty business which have been presented as aDiscontinued Operation.

(11) Capital expenditure for the three and nine months ended September 30,2020, includes $57 million and $133 million relating to Business GrowthInvestment projects respectively.

(12) Interest paid in the three and nine months ended September 30, 2019,excludes $4 million in respect of the redemption, in August 2019, of theGroup's $1,650 million 7.250% Senior Notes due 2024, related to the interestfrom the date the Notes were called for redemption to the redemption date.

(13) Adjusted free cash flow - Group for the three and nine months endedSeptember 30, 2019 reflect that the Group divested the Food & Specialtybusiness as of October 31, 2019.

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SOURCE Ardagh Group S.A.