Ardagh Group S.A. - Third Quarter 2019 Results
LUXEMBOURG, Oct. 31, 2019 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its results for the third quarter ended September 30, 2019.
September 30, | September 30, | Change | Change CCY | |||||
($m except per share data) | ||||||||
Revenue - Group 1 | 2,377 | 2,390 | (1%) | 2% | ||||
Adjusted EBITDA - Group 1 | 424 | 400 | 6% | 9% | ||||
Adjusted EBITDA - continuing operations 1 | 320 | 302 | 6% | 9% | ||||
Adjusted EBITDA margin - Group 1 | 17.8% | 16.7% | 110 bps | |||||
(Loss)/earnings per share | (0.12) | 0.03 | ||||||
Adjusted earnings per share - Group 1 | 0.60 | 0.52 | 15% | 20% | ||||
(Loss)/profit for the period | (29) | 7 | ||||||
Adjusted free cash flow 1 | 244 | 211 | ||||||
Dividend per share declared 2 | 0.14 | 0.14 | ||||||
Paul Coulson, Chairman and Chief Executive, said "The Group reported a strong performance in the third quarter, with notable growth in Glass Europe and Metal Americas. We took advantage of favorable markets during the quarter to further improve our debt maturity profile and obtain material interest savings. We completed the Trivium transaction today, with cash proceeds of $2.5 billion to be used for debt reduction".
- Revenue of $2,377 million increased by 2% on a constant currency basis;
- Adjusted EBITDA of $424 million increased by 9% at constant exchange rates, led by gains in Glass Packaging Europe and Metal Beverage Packaging Americas;
- Adjusted earnings per share up 15% to $0.60 (2018: $0.52);
- Group volume/mix growth of 2% led by Global beverage can volume3 growth of 7%;
- Refinanced $1,650 million 2024 Senior Notes, yielding $45 million annualized interest savings;
- Metal Food & Specialty business is treated as a Discontinued Operation, following the announced combination with Exal Corporation to form Trivium Packaging. Completion of the transaction took place today, with Ardagh receiving an approximate 43% stake in Trivium Packaging and cash consideration of $2.5 billion;
- 2019 full year outlook:
- Adjusted EBITDA of $1.16 - $1.18 billion, pro forma for the divestment of Food & Specialty (the equivalent previous guidance was at least $1.15 billion);
- Adjusted earnings per share of $1.65 - $1.75, including Food & Specialty until divestment on October 31;
- Net leverage of approximately 4.5x Adjusted EBITDA at December 31, 2019, pro forma for the divestment of Food & Specialty.
Summary Financial Information
Three months ended | Nine months ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
(in $ millions, except EPS, ratios and percentages) | ||||||||
Revenue - Group 4 | 2,377 | 2,390 | 6,865 | 6,961 | ||||
(Loss)/profit for the period | (29) | 7 | 53 | 50 | ||||
Adjusted profit for the period 4 | 142 | 123 | 339 | 322 | ||||
Adjusted EBITDA - Group 4 | 424 | 400 | 1,182 | 1,140 | ||||
Adjusted EBITDA - continuing operations 4 | 320 | 302 | 906 | 860 | ||||
Adjusted EBITDA margin - Group 4 | 17.8% | 16.7% | 17.2% | 16.4% | ||||
(Loss)/earnings per share | (0.12) | 0.03 | 0.22 | 0.21 | ||||
Adjusted earnings per share - Group 4 | 0.60 | 0.52 | 1.43 | 1.36 | ||||
Operating cash flow - Group 4 | 379 | 301 | 364 | 355 | ||||
Operating cash flow - continuing operations 4 | 255 | 241 | 288 | 257 | ||||
Adjusted free cash flow - Group 4 | 244 | 211 | (18) | 11 | ||||
At September 30, | At December 31, | |||||||
2019 | 2018 | |||||||
$m | $m | |||||||
Net debt 5 | 7,866 | 7,462 | ||||||
Cash and available liquidity | 1,129 | 1,170 | ||||||
Net debt to LTM EBITDA | 5.2x | 5.0x | ||||||
Financial Performance Review Bridge of 2018 to 2019 Revenue and Adjusted EBITDA | ||||||||||
Three months ended September 30, 2019 | ||||||||||
Revenue | Metal | Metal | Glass | Glass | ||||||
$'m | $'m | $'m | $'m | $'m | ||||||
2018 - Continuing Operations | 415 | 440 | 420 | 433 | 1,708 | |||||
Organic | 15 | 24 | 14 | 5 | 58 | |||||
FX translation | (18) | — | (20) | — | (38) | |||||
2019 - Continuing Operations | 412 | 464 | 414 | 438 | 1,728 | |||||
2019 - Discontinued Operation | 649 | |||||||||
2019 - Group | 2,377 | |||||||||
Adjusted EBITDA | Metal | Metal | Glass | Glass | ||||||
$'m | $'m | $'m | $'m | $'m | ||||||
2018 - Continuing Operations | 75 | 57 | 103 | 67 | 302 | |||||
Organic | (7) | 8 | 5 | 1 | 7 | |||||
IFRS 16 | 3 | 2 | 6 | 9 | 20 | |||||
FX translation | (3) | — | (6) | — | (9) | |||||
2019 - Continuing Operations | 68 | 67 | 108 | 77 | 320 | |||||
2019 - Discontinued Operation | 104 | |||||||||
2019 - Group | 424 | |||||||||
2019 margin - Continuing Operations | 16.5% | 14.4% | 26.1% | 17.6% | 18.5% | |||||
2018 margin - Continuing Operations | 18.1% | 13.0% | 24.5% | 15.5% | 17.7% | |||||
2019 margin - Group | 17.8% | |||||||||
2018 margin - Group | 16.7% | |||||||||
Nine months ended September 30, 2019 | ||||||||||
Revenue | Metal | Metal | Glass | Glass | ||||||
$'m | $'m | $'m | $'m | $'m | ||||||
2018 - Continuing Operations | 1,237 | 1,310 | 1,236 | 1,304 | 5,087 | |||||
Organic | 51 | 49 | 56 | (17) | 139 | |||||
FX translation | (73) | — | (74) | — | (147) | |||||
2019 - Continuing Operations | 1,215 | 1,359 | 1,218 | 1,287 | 5,079 | |||||
2019 - Discontinued Operation | 1,786 | |||||||||
2019 - Group | 6,865 | |||||||||
Adjusted EBITDA | Metal | Metal | Glass | Glass | ||||||
$'m | $'m | $'m | $'m | $'m | ||||||
2018 - Continuing Operations | 217 | 161 | 274 | 208 | 860 | |||||
Organic | (7) | 17 | 19 | (12) | 17 | |||||
IFRS 16 | 11 | 6 | 16 | 25 | 58 | |||||
FX translation | (12) | — | (17) | — | (29) | |||||
2019 - Continuing Operations | 209 | 184 | 292 | 221 | 906 | |||||
2019 - Discontinued Operation | 276 | |||||||||
2019 - Group | 1,182 | |||||||||
2019 margin - Continuing Operations | 17.2% | 13.5% | 24.0% | 17.2% | 17.8% | |||||
2018 margin - Continuing Operations | 17.5% | 12.3% | 22.2% | 16.0% | 16.9% | |||||
2019 margin - Group | 17.2% | |||||||||
2018 margin - Group | 16.4% | |||||||||
Group Performance
On July 15, 2019, the Ardagh Group announced that it had entered into an agreement to combine Food & Specialty, operating as part of the previously reported Metal Packaging Europe and Metal Packaging Americas segments, with the business of Exal, a leading producer of aluminum containers, to form Trivium, a global leader in metal packaging.
Completion of the transaction took place today, with Ardagh receiving a stake of approximately 43% in Trivium and $2.5 billion in cash proceeds. The remaining approximately 57% will be controlled by Ontario Teachers.
Following the announcement, the composition of the Group's operating and reporting segments changed. Food and Specialty has been classified as discontinued, following which the Group's four operating and reportable segments are:
- Metal Beverage Packaging Europe
- Metal Beverage Packaging Americas
- Glass Packaging Europe
- Glass Packaging North America.
Group
Revenue of $2,377 million decreased by 1% in the three-month period ended September 30, 2019, compared with the same period last year. On a constant currency basis, revenue increased by 2%, mainly due to increased volumes in Metal Beverage Packaging Europe and Metal Beverage Packaging Americas and the pass through of increased input costs.
Third quarter Adjusted EBITDA of $424 million increased by 6% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 9%, principally due to increased selling prices, including for the pass through of higher input costs, the impact of IFRS 16 of $25 million, and favorable volume/mix effects, partly offset by higher operating costs.
Metal Beverage Packaging Europe
Revenue of $412 million decreased by 1% in the three-month period ended September 30, 2019, compared with the same period last year. On a constant currency basis, revenue increased by 4%, principally due to volume/mix growth, partly offset by lower selling prices. Adjusted EBITDA for the quarter of $68 million decreased by 9% at actual exchange rates and 6% at constant currency rates, compared with the same period last year. The reduction in Adjusted EBITDA principally reflected higher input and other operating costs and lower selling prices due to the pass through of lower input costs, partly offset by favorable volume/mix effects and the impact of IFRS 16 of $3 million.
Metal Beverage Packaging Americas
Revenue increased by 5% to $465 million in the third quarter of 2019, compared with the same period last year. This was principally due to favorable volume/mix effects of 11%, partly offset by the pass through of lower input costs. Adjusted EBITDA of $67 million increased by 18% compared with the prior year, principally reflecting favorable volume/mix effects and the impact of IFRS 16, partly offset by higher operating costs.
Glass Packaging Europe
Revenue of $414 million decreased by 1% at actual exchange rates and increased by 4% at constant exchange rates, in the three-month period ended September 30, 2019, compared with the same period last year. Revenue growth principally reflected higher selling prices, including to recover increased input costs, partly offset by unfavorable, weather impacted volume/mix effects. Adjusted EBITDA for the quarter of $108 million increased by 10% at constant exchange rates, compared with the same period last year, mainly due to higher selling prices, the impact of IFRS 16 and the benefit of short payback capex projects.
Glass Packaging North America
Revenue increased by 1% to $438 million in the third quarter, compared with the same period last year, principally reflecting increased selling prices to recover higher input costs, partly offset by unfavorable volume/mix effects. Adjusted EBITDA for the quarter of $77 million increased by 15%, compared with the same period last year, mainly due to higher selling prices, including to recover increased costs and the impact of IFRS 16, partly offset by increased overhead costs and unfavorable volume/mix effects.
Discontinued Operation
Revenue decreased by 5% to $649 million in the three months ended September 30, 2019, compared with the same period last year principally reflecting unfavorable foreign currency translation effects of $22 million and lower volumes in both business units. Adjusted EBITDA increased by 6% to $104 million, inclusive of the impact of IFRS 16 of $4 million, reflecting cost reduction initiatives in response to lower volumes.
Financing Activity
On August 12, 2019, the Group issued $1,793 million through a combination of Senior Secured Notes and Senior Notes. The net proceeds from the issuance of these notes were used to repay the $1,650 million 7.250% Senior Notes due 2024. These notes were repaid on August 13, 2019. The blended cost of the new debt, after swaps is approximately 3.5% per annum, leading to significant interest cost savings.
Combination of Food & Specialty with Exal
Following completion of the transaction, and in accordance with the July 15, 2019 announcement, Ardagh has today:
- Issued Conditional Redemption Notices in respect of its €440,000,000 4.125% Senior Secured Notes due 2023 and its $1,000,000,000 4.625% Senior Secured Notes due 2023.
- Issued tender offers, at par, in respect of its $715,000,000 4.250% Senior Secured Notes due 2022, €750,000,000 2.750% Senior Secured Notes due 2024, €440,000,000 2.125% Senior Secured Notes due 2026 and $500,000,000 4.125% Senior Secured Notes due 2026 (the "Excess Proceeds Offer"). The Excess Proceeds Offer is expected to expire at 4:00 p.m. (London Time) on November 28, 2019. The announcement date is expected to be November 29, 2019 and the payment date is expected to be December 2, 2019.
- Issued a Conditional Redemption Notice in respect of its €750,000,000 6.750% Senior Notes due 2024.
Earnings Webcast and Conference Call Details
Ardagh Group S.A. (NYSE: ARD) will hold its third quarter 2019 earnings webcast and conference call for investors at 3 p.m. GMT (11 a.m. ET) on October 31, 2019. Please use the following webcast link to register for this call:
Webcast registration and access:
https://event.on24.com/wcc/r/2100767-1/E67A2D3FAF3DCE62ED0CBFE81A494F2F?partnerref=rss-events
Conference call dial in:
United States: +1855 85 70686
International: +44 33 3300 0804
Participant pin code: 85935762#
Slides and quarterly report
Supplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.
Third quarter results for ARD Finance S.A., issuer of the Senior Secured Toggle Notes due 2023, are 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 more than 50 metal and glass production facilities in 12 countries across three continents, employing over 16,000 people with sales of $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 consolidated financial measures such as Adjusted EBITDA, working capital, 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.
Consolidated Interim Financial Statements Consolidated Interim Income Statement for the three months ended September 30, 2019 | ||||||||||||||
Unaudited | Unaudited | |||||||||||||
Three months ended September 30, 2019 | Three months ended September 30, 2018 | |||||||||||||
Before | Before | |||||||||||||
exceptional | Exceptional | exceptional | Exceptional | |||||||||||
items | Items | Total | items | Items | Total | |||||||||
$'m | $'m | $'m | $'m | $'m | $'m | |||||||||
Revenue | 1,728 | — | 1,728 | 1,708 | — | 1,708 | ||||||||
Cost of sales | (1,430) | (5) | (1,435) | (1,426) | (46) | (1,472) | ||||||||
Gross profit | 298 | (5) | 293 | 282 | (46) | 236 | ||||||||
Sales, general and administration expenses | (80) | (28) | (108) | (69) | — | (69) | ||||||||
Intangible amortization | (59) | — | (59) | (59) | — | (59) | ||||||||
Operating profit | 159 | (33) | 126 | 154 | (46) | 108 | ||||||||
Net finance expense | (115) | (112) | (227) | (126) | (20) | (146) | ||||||||
Profit/(loss) before tax | 44 | (145) | (101) | 28 | (66) | (38) | ||||||||
Income tax (charge)/credit | (13) | 17 | 4 | (11) | 10 | (1) | ||||||||
Profit/(loss) from continuing operations | 31 | (128) | (97) | 17 | (56) | (39) | ||||||||
Profit from discontinued operation, net of tax | 70 | (2) | 68 | 47 | (1) | 46 | ||||||||
Profit/(loss) for the period | 101 | (130) | (29) | 64 | (57) | 7 | ||||||||
(Loss)/profit attributable to: | ||||||||||||||
Equity holders | (29) | 7 | ||||||||||||
Non-controlling interests | — | — | ||||||||||||
(Loss)/profit for the period | (29) | 7 | ||||||||||||
(Loss)/earnings per share: | ||||||||||||||
Basic and diluted (loss)/earnings per share attributable to equity | ($0.12) | $0.03 | ||||||||||||
Loss per share from continuing operations: | ||||||||||||||
Basic and diluted loss per share from continuing operations | ($0.41) | ($0.17) | ||||||||||||
Consolidated Interim Income Statement for the nine months ended September 30, 2019 | ||||||||||||||
Unaudited | Unaudited | |||||||||||||
Nine months ended September 30, 2019 | Nine months ended September 30, 2018 | |||||||||||||
Before | Before | |||||||||||||
exceptional | Exceptional | exceptional | Exceptional | |||||||||||
items | Items | Total | items | Items | Total | |||||||||
$'m | $'m | $'m | $'m | $'m | $'m | |||||||||
Revenue | 5,079 | — | 5,079 | 5,087 | — | 5,087 | ||||||||
Cost of sales | (4,248) | 2 | (4,246) | (4,280) | (99) | (4,379) | ||||||||
Gross profit | 831 | 2 | 833 | 807 | (99) | 708 | ||||||||
Sales, general and administration expenses | (234) | (42) | (276) | (218) | (11) | (229) | ||||||||
Intangible amortization | (176) | — | (176) | (179) | — | (179) | ||||||||
Operating profit | 421 | (40) | 381 | 410 | (110) | 300 | ||||||||
Net finance expense | (355) | (112) | (467) | (351) | (20) | (371) | ||||||||
Profit/(loss) before tax | 66 | (152) | (86) | 59 | (130) | (71) | ||||||||
Income tax (charge)/credit | (23) | 28 | 5 | (26) | 22 | (4) | ||||||||
Profit/(loss) from continuing operations | 43 | (124) | (81) | 33 | (108) | (75) | ||||||||
Profit from discontinued operation, net of tax | 144 | (10) | 134 | 134 | (9) | 125 | ||||||||
Profit for the period | 187 | (134) | 53 | 167 | (117) | 50 | ||||||||
Profit attributable to: | ||||||||||||||
Equity holders | 53 | 50 | ||||||||||||
Non-controlling interests | — | — | ||||||||||||
Profit for the period | 53 | 50 | ||||||||||||
Earnings per share: | ||||||||||||||
Basic and diluted earnings per share attributable to equity holders | $0.22 | $0.21 | ||||||||||||
Loss per share from continuing operations: | ||||||||||||||
Basic and diluted loss per share from continuing operations | ($0.34) | ($0.32) | ||||||||||||
Consolidated Interim Statement of Financial Position | |||
Unaudited | Unaudited | ||
At September 30, | At December 31, | ||
2019 | 2018 | ||
$'m | $'m | ||
Non-current assets | |||
Intangible assets | 2,894 | 3,601 | |
Property, plant and equipment | 2,546 | 3,388 | |
Derivative financial instruments | 30 | 11 | |
Deferred tax assets | 235 | 254 | |
Other non-current assets | 66 | 24 | |
5,771 | 7,278 | ||
Current assets | |||
Inventories | 889 | 1,284 | |
Trade and other receivables | 867 | 1,053 | |
Contract asset | 149 | 160 | |
Derivative financial instruments | 3 | 9 | |
Cash and cash equivalents | 537 | 530 | |
2,445 | 3,036 | ||
Assets held for sale | 2,450 | — | |
TOTAL ASSETS | 10,666 | 10,314 | |
Equity attributable to owners of the parent | |||
Issued capital | 23 | 23 | |
Share premium | 1,292 | 1,292 | |
Capital contribution | 485 | 485 | |
Other reserves | 134 | 45 | |
Retained earnings | (3,572) | (3,355) | |
(1,638) | (1,510) | ||
Non-controlling interests | 1 | 1 | |
TOTAL EQUITY | (1,637) | (1,509) | |
Non-current liabilities | |||
Borrowings | 7,763 | 7,729 | |
Lease obligations | 273 | 32 | |
Employee benefit obligations | 724 | 957 | |
Derivative financial instruments | 13 | 107 | |
Deferred tax liabilities | 377 | 543 | |
Provisions | 29 | 38 | |
9,179 | 9,406 | ||
Current liabilities | |||
Borrowings | 236 | 114 | |
Lease obligations | 60 | 4 | |
Interest payable | 72 | 81 | |
Derivative financial instruments | 22 | 38 | |
Trade and other payables | 1,431 | 1,983 | |
Income tax payable | 102 | 114 | |
Provisions | 50 | 83 | |
1,973 | 2,417 | ||
Liabilities held for sale | 1,151 | — | |
TOTAL LIABILITIES | 12,303 | 11,823 | |
TOTAL EQUITY and LIABILITIES | 10,666 | 10,314 | |
Consolidated Interim Statement of Cash Flows | ||||||||
Unaudited | Unaudited | |||||||
Three months ended | Nine months ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
$'m | $'m | $'m | $'m | |||||
Cash flows from operating activities | ||||||||
Cash generated from continuing operations | 386 | 306 | 717 | 549 | ||||
Interest paid (i) | (120) | (74) | (328) | (280) | ||||
Income tax paid (i) | (5) | (14) | (38) | (61) | ||||
Net cash from operating activities - continuing operations | 261 | 218 | 351 | 208 | ||||
Net cash from operating activities - discontinued operation | 139 | 75 | 159 | 163 | ||||
Net cash from operating activities | 400 | 293 | 510 | 371 | ||||
Cash flows from investing activities | ||||||||
Purchase of property, plant and equipment | (123) | (91) | (397) | (357) | ||||
Purchase of software and other intangibles | (2) | (4) | (8) | (10) | ||||
Proceeds from disposal of property, plant and equipment | 1 | 1 | 1 | 5 | ||||
Investing cash flows used in continuing operations | (124) | (94) | (404) | (362) | ||||
Investing cash flows used in discontinued operation | (28) | (21) | (96) | (70) | ||||
Net cash used in investing activities | (152) | (115) | (500) | (432) | ||||
Cash flows from financing activities | ||||||||
Repayment of borrowings | (1,652) | (440) | (1,652) | (441) | ||||
Proceeds from borrowings | 1,706 | 295 | 1,923 | 295 | ||||
Dividends paid | (33) | (33) | (99) | (99) | ||||
Consideration received/(paid) on extinguishment of derivative financial | 23 | (44) | 9 | (44) | ||||
Deferred debt issue costs paid | (12) | — | (12) | (5) | ||||
Lease payments | (19) | (1) | (55) | (3) | ||||
Early redemption premium paid | (90) | (7) | (90) | (7) | ||||
Financing cash flows from continuing operations | (77) | (230) | 24 | (304) | ||||
Financing cash flows from discontinued operation | 15 | — | — | (1) | ||||
Net cash (outflow)/inflow from financing activities | (62) | (230) | 24 | (305) | ||||
Net increase/(decrease) in cash and cash equivalents | 186 | (52) | 34 | (366) | ||||
Cash and cash equivalents at the beginning of the period | 374 | 465 | 530 | 784 | ||||
Foreign exchange losses on cash and cash equivalents | (20) | (4) | (24) | (9) | ||||
Cash and cash equivalents at the end of the period(ii) | 540 | 409 | 540 | 409 | ||||
(i) Operating cash flows for discontinued operation for the nine months ended September 30, 2019, include interest and income tax payments of $5 million and $16 million respectively (2018: $1 million and $4 million). |
(ii) Included within cash and cash equivalents of $540 million is $537 million of cash relating to continuing operations and $3 million of cash within assets held for sale. |
Financial assets and liabilities At September 30, 2019, the Group's net debt and available liquidity was as follows: | ||||||||||||||
Maximum | Final | |||||||||||||
amount | maturity | Facility | Undrawn | |||||||||||
Facility | Currency | drawable | date | type | Amount drawn | amount | ||||||||
Local | Local | $'m | $'m | |||||||||||
currency | currency | |||||||||||||
m | m | |||||||||||||
2.750% Senior Secured Notes | EUR | 750 | 15-Mar-24 | Bullet | 750 | 817 | – | |||||||
4.625% Senior Secured Notes | USD | 1,000 | 15-May-23 | Bullet | 1,000 | 1,000 | – | |||||||
4.125% Senior Secured Notes | EUR | 440 | 15-May-23 | Bullet | 440 | 479 | – | |||||||
4.250% Senior Secured Notes | USD | 715 | 15-Sep-22 | Bullet | 715 | 715 | – | |||||||
2.125% Senior Secured Notes | EUR | 440 | 15-Aug-26 | Bullet | 440 | 479 | – | |||||||
4.125% Senior Secured Notes | USD | 500 | 15-Aug-26 | Bullet | 500 | 500 | – | |||||||
4.750% Senior Notes | GBP | 400 | 15-Jul-27 | Bullet | 400 | 492 | – | |||||||
6.000% Senior Notes | USD | 1,700 | 15-Feb-25 | Bullet | 1,700 | 1,711 | – | |||||||
6.750% Senior Notes | EUR | 750 | 15-May-24 | Bullet | 750 | 817 | – | |||||||
5.250% Senior Notes | USD | 800 | 15-Aug-27 | Bullet | 800 | 800 | – | |||||||
Global Asset Based Loan Facility | USD | 818 | 07-Dec-22 | Revolving | 230 | 230 | 588 | |||||||
Lease Obligations | USD/GBP/EUR | Amortizing | 333 | – | ||||||||||
Other borrowings/credit lines | EUR/USD | Rolling | Amortizing | 7 | 1 | |||||||||
Total borrowings / undrawn facilities for continuing | 8,380 | 589 | ||||||||||||
Deferred debt issue costs and bond premium | (48) | – | ||||||||||||
Net borrowings / undrawn facilities for continuing | 8,332 | 589 | ||||||||||||
Cash and cash equivalents | (537) | 537 | ||||||||||||
Derivative financial instruments used to hedge foreign | (21) | – | ||||||||||||
Net debt / available liquidity for continuing operations | 7,774 | 1,126 | ||||||||||||
Net debt / available liquidity for discontinued operation | 92 | 3 | ||||||||||||
Net debt / available liquidity | 7,866 | 1,129 | ||||||||||||
Reconciliation of profit for the period to Adjusted profit - Group | ||||||||
Three months ended | Nine months ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
$m | $m | $m | $m | |||||
(Loss)/profit for the period - Group | (29) | 7 | 53 | 50 | ||||
Total exceptional items 6 | 149 | 67 | 166 | 142 | ||||
Tax credit associated with exceptional items | (20) | (10) | (33) | (25) | ||||
Intangible amortization | 61 | 66 | 192 | 200 | ||||
Tax credit associated with intangible amortization | (16) | (15) | (43) | (45) | ||||
(Gains)/loss on derivative financial instruments | (3) | 8 | 4 | — | ||||
Adjusted profit for the period - Group | 142 | 123 | 339 | 322 | ||||
Weighted average common shares | 236.36 | 236.35 | 236.36 | 236.35 | ||||
(Loss)/earnings per share | (0.12) | 0.03 | 0.22 | 0.21 | ||||
Adjusted earnings per share - Group | 0.60 | 0.52 | 1.43 | 1.36 | ||||
Reconciliation of profit for the period to Adjusted EBITDA, cash generated from operations, operating cash flow and Adjusted free cash flow | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
$'m | $'m | $'m | $'m | |||||
(Loss)/profit for the period - Group | (29) | 7 | 53 | 50 | ||||
Profit from discontinued operation | 68 | 46 | 134 | 125 | ||||
Loss from continuing operations | (97) | (39) | (81) | (75) | ||||
Income tax (credit)/charge | (4) | 1 | (5) | 4 | ||||
Net finance expense | 227 | 146 | 467 | 371 | ||||
Depreciation and amortization | 161 | 148 | 485 | 450 | ||||
Exceptional operating items | 33 | 46 | 40 | 110 | ||||
Adjusted EBITDA from continuing operations | 320 | 302 | 906 | 860 | ||||
Movement in working capital | 78 | 38 | (152) | (221) | ||||
Transaction-related, start-up and other exceptional costs paid | (11) | (29) | (28) | (70) | ||||
Exceptional restructuring paid | (1) | (5) | (9) | (20) | ||||
Cash generated from continuing operations | 386 | 306 | 717 | 549 | ||||
Transaction-related, start-up and other exceptional costs paid | 11 | 29 | 28 | 70 | ||||
Capital expenditure 7 | (124) | (94) | (404) | (362) | ||||
Lease payments due to the adoption of IFRS 16 | (18) | — | (53) | — | ||||
Operating cash flow from continuing operations | 255 | 241 | 288 | 257 | ||||
Operating cash flow from discontinued operation | 124 | 60 | 76 | 98 | ||||
Operating cashflow - Group | 379 | 301 | 364 | 355 | ||||
Interest 8 | (118) | (72) | (329) | (279) | ||||
Income tax paid | (17) | (18) | (53) | (65) | ||||
Adjusted free cash flow - Group | 244 | 211 | (18) | 11 | ||||
1. A reconciliation to the most comparable GAAP measures can be found in the Bridge of 2018 to 2019 Revenue and Adjusted EBITDA and reconciliations at the back of this release. |
2. Payable on November 29, 2019 to shareholders of record on November 15, 2019. |
3. References to data on volumes represents units shipped in the period. |
4. A reconciliation to the most comparable GAAP measures can be found in the Bridge of 2018 to 2019 Revenue and Adjusted EBITDA and reconciliations at the back of this release. |
5. Net debt is comprised of net borrowings and derivative financial instruments used to hedge foreign currency and interest rate risk, net of cash and cash equivalents. Net borrowings at September 30, 2019 includes the impact of IFRS 16 leases. |
6. Total exceptional items before tax for the three months ended September 30, 2019 of $149 million include $112 million debt refinancing and settlement costs related to the notes repaid in August including premium payable on the early redemption of the notes of $90 million, accelerated amortisation of deferred finance costs, interest charges from the call date to date of redemption and a charge related to the termination of derivative financial instruments. Total exceptional items for the three months ended September 30, 2019 also include $28 million transaction-related costs, primarily related to the combination of the Group's Food & Specialty Metal Packaging business with the business of Exal Corporation. Other exceptional items include $4 million related to discontinued operation and $5 million related to the Group's capacity realignment programs comprising property, plant and equipment impairment charges ($1 million) and start-up related costs ($4 million). These costs were incurred in Glass Packaging North America ($2 million) and Glass Packaging Europe ($3 million). |
Total exceptional items before tax for the nine months ended September 30, 2019 of $166 million include $112 million debt refinancing and settlement costs related to the notes repaid in August including premium payable on the early redemption of the notes of $90 million, accelerated amortisation of deferred finance costs, interest charges from the call date to date of redemption and a charge related to the termination of derivative financial instruments. Total exceptional items for the nine months ended September 30, 2019 also include a $37 million pension service credit recognized in Glass Packaging North America, $15 million related to a provision for a court award and related interest, net of the tax adjusted indemnity receivable in respect of the Group's U.S. glass business legal matter and $42 million transaction-related costs, primarily related to the combination of the Group's Food & Specialty Metal Packaging business with the business of Exal Corporation. Other exceptional items include $14 million related to discontinued operation and $20 million related to the Group's capacity realignment programs comprising restructuring costs ($7 million), property, plant and equipment impairment charges ($5 million) and start-up related costs ($8 million). These costs were incurred in Glass Packaging North America ($12 million), Glass Packaging Europe ($4 million), Metal Beverage Packaging Americas ($2 million) and Metal Beverage Packaging Europe ($2 million). |
7. Capital expenditure for the three and nine months ended September 30, 2019, includes $19 million and $68 million respectively, relating to spend on short payback projects. |
8. Interest paid in the three and nine months ended September 30, 2019, excludes $4 million in respect of the redemption, in August 2019, of the Group's $1,650 million 7.250% Senior Notes due 2024, related to the interest from the date the Notes were called for redemption to the redemption date. Interest paid in the three and nine months ended September 30, 2018, excludes $2 million in respect of the redemption in July 2018 of the Group's $440 million 6.000% Senior Notes due 2021, related to interest from the date the Notes were called for redemption to the redemption date. |
SOURCE Ardagh Group S.A.
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