Ardagh Group S.A. - Third Quarter 2017 Earnings Release

LUXEMBOURG, Oct. 26, 2017 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its financial results for the third quarter ended September 30, 2017.

Paul Coulson, Executive Chairman, said, "Third quarter results demonstrated the benefits of our geographic, substrate and end-market diversity, with growth in three of our four segments offsetting a weak outturn in Glass Packaging North America. Constant currency Adjusted EBITDA growth of 2% has been converted into strong cash generation and resulted in further de-leveraging during the quarter".

• Continued strong free cash generation, with Adjusted Free Cash Flow increasing by 18% to €254 million;
• Adjusted EBITDA margin of 18.9%, an increase of 10bps, with growth in three of our four segments;
• Net debt to LTM Adjusted EBITDA reduced from 5.1x to 4.9x during the quarter and from 5.5x in the past year;
• Constant currency results showed continued growth, with revenue and Adjusted EBITDA both increasing by 2%;
• Revenue decreased by 1% to €1.99 billion, but increased by 2% at constant currency;
• Adjusted EBITDA decreased by 1% to €377 million, but increased by 2% at constant currency;
• Earnings per share €0.22 (2016: loss per share €0.03);
• Adjusted earnings per share of €0.49, a 2% constant currency reduction, reflecting a higher share count post IPO;
• 2017 Adjusted EBITDA expected of €1.34 billion (US$1.58 billion) which was previously €1.37 billion (US$1.59 billion), which reflects further currency headwinds and a lowered outlook in Glass Packaging North America arising from weaker demand in beer and wine and the impact of hurricane-related elevated freight costs. Net debt at year end is expected to be approximately $7.6 billion.

Financial Performance Review

Group
Revenue of €1,990 million for the quarter ended September 30, 2017 represented a decrease of 1% at actual exchange rates and, at constant currency, increased by 2% compared with the same period last year. The decline in revenue was driven by €60 million currency translation effects, partly offset by 1% organic growth. Third quarter Adjusted EBITDA of €377 million decreased by 1% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 2% and Adjusted EBITDA margin was 18.9%, an increase of 10 basis points compared with the third quarter of 2016.

Metal Packaging Europe
Revenue increased by 2%, to €809 million in the three month period ended September 30, 2017, compared with the same period last year. Growth reflected 3% organic growth, partly offset by €9 million currency translation effects. Adjusted EBITDA increased by 10% to €155 million, compared with the same period last year. Growth in Adjusted EBITDA reflected synergy realization and reduced operating costs, including a reduction of €9 million in pension-related expense.

Metal Packaging Americas
Revenue decreased by 2% to €440 million in the third quarter of 2017, compared with the same period last year. Lower revenue reflected negative currency translation effects of €26 million, partly offset by 4% organic growth as a result of favorable volume/mix and the pass through of higher input costs. Adjusted EBITDA increased by €5 million to €64 million, compared with the same period last year and by 14% on a constant currency basis. Growth primarily reflected synergy realization and higher volumes partly offset by negative currency translation effects of €3 million.

Glass Packaging Europe
Revenue declined by 1% to €358 million in the three month period ended September 30, 2017, compared with the same period last year, as organic growth of 1% was more than offset by €6 million currency translation effects. Adjusted EBITDA for the quarter increased by 1% to €89 million, compared with the same period last year, with growth of 3% at constant currency rates.

Glass Packaging North America
Revenue decreased by 8% to €383 million in the third quarter, compared with the same period last year including a €19 million negative currency translation effect. Constant currency revenue was 3% lower, due mainly to weaker volume/mix, in particular in beer and wine end markets. Adjusted EBITDA decreased by 24% to €69 million in the third quarter, compared with the same period in 2016. Constant currency Adjusted EBITDA was €18 million, or 21% lower than the prior year, as a result of lower volumes, increased freight costs in the aftermath of hurricanes in the southeastern United States and higher payroll costs compared with the same period last year, which benefitted from lower pension-related costs of €10 million.

Financing Activity
On August 1, 2017, the Group redeemed in full the €405 million 4.250% First Priority Senior Secured Notes, due 2022. Following this redemption, the Group will have used over $750 million of available cash and IPO proceeds to repay debt in 2017.

Conference Call Details

Ardagh Group S.A. (NYSE: ARD) will hold its third quarter 2017 earnings call for investors at 3 p.m. BST (10 a.m. ET) on October 26, 2017. Please use the following link to register for this call:

http://event.onlineseminarsolutions.com/r.htm?e=1507682&s=1&k=A54AAA5EC65206CD4768DFE20F01ADDA

About Ardagh Group

The Ardagh Group is a global leader in metal and glass packaging solutions, producing packaging for the world's leading food, beverage and consumer brands. It operates 109 facilities in 22 countries, employing approximately 23,500 people and has global sales of approximately €7.7 billion.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the 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.

Condensed Consolidated Interim Financial Statements

SOURCE Ardagh Group S.A.