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

LUXEMBOURG, July 27, 2017 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its financial results for the second quarter ended June 30, 2017.

Highlights

• Revenue increased by 58% to €2,021 million with pro forma growth of 1% at actual and constant currency;
• Adjusted EBITDA increased by 48% to €379 million, with pro forma growth of 6%;
• Adjusted EBITDA margin of 18.8%, an increase of 100bps on a pro forma basis;
• Earnings per share €0.13 (2016: loss per share €0.34);
• Adjusted earnings per share of €0.49, up from €0.10 in the prior year;
• Net debt to LTM Adjusted EBITDA reduced from 5.3x to 5.1x during the quarter;
• 10-year GBP400 million Senior Notes issuance, further improving debt maturities to almost 7 years;
• $750 million of available cash and IPO proceeds used or allocated to repay debt to date in 2017;
• Quarterly cash dividend of $0.14 per common share, payable on August 31, 2017;
• Prior guidance for 2017 Adjusted EBITDA of €1.4 billion ($1.5 billion) was based on then prevailing exchange rates. At current exchange rates this guidance becomes €1.37 billion ($1.6 billion) due entirely to currency. Targeted leverage of approximately 4.75x Adjusted EBITDA at December 31, 2017 is unchanged.

Summary Financial Information

Operating and Adjusted Free Cash Flow

The non-GAAP information in the above tables has been derived from the Consolidated Interim Financial Statements and related notes. Interest included in the calculation of Adjusted Free Cash Flow excludes exceptional interest paid.

Financial Performance Review

Bridge of 2016 reported revenue to 2017 reported revenue

Bridge of 2016 reported Adjusted EBITDA to 2017 reported Adjusted EBITDA

Bridge of 2016 reported revenue to 2017 reported revenue

Bridge of 2016 reported Adjusted EBITDA to 2017 reported Adjusted EBITDA

Group
Revenue in the quarter ended June 30, 2017 increased by 58% to €2,021 million, compared with the same period last year. Revenue growth principally reflected the Beverage Can Acquisition, completed on June 30, 2016, as well as organic growth of 1%.  Second quarter Adjusted EBITDA of €379 million increased by 48%, compared with the same period last year. Growth reflected the Beverage Can Acquisition, as well as pro forma growth of 6% compared with the same period last year.  

Metal Packaging Europe
Revenue increased by 97%, to €786 million in the three month period ended June 30, 2017, compared with the same period last year. Growth reflected the inclusion of the Beverage Can Acquisition, as well as 1% organic growth, partly offset by €8 million currency translation effects. Adjusted EBITDA increased by 97% to €134 million, compared with the same period last year. Growth in Adjusted EBITDA reflected the Beverage Can Acquisition, as well as 7% organic growth, partly offset by €1 million adverse currency translation effects.

Metal Packaging Americas
Revenue increased by 423% to €434 million in the second quarter of 2017, compared with the same period last year. Revenue growth reflected the Beverage Can Acquisition, a 1% organic increase, as well as positive currency translation effects of €15 million. Adjusted EBITDA increased by €55 million to €68 million, compared with the same period last year. Growth primarily reflected the Beverage Can Acquisition, 22% organic Adjusted EBITDA growth and positive currency translation effects of €1 million.

Glass Packaging Europe
Revenue declined by 1% to €366 million in the three month period ended June 30, 2017, compared with the same period last year, as organic growth of 1% was more than offset by €10 million currency translation effects. Adjusted EBITDA for the quarter increased by 1% to €80 million, compared with the same period last year, with growth of 4% at constant currency rates.  

Glass Packaging North America
Revenue increased by 1% to €435 million in the second quarter, compared with the same period last year including a €14 million positive currency translation effect. Constant currency revenue was 2% lower, due mainly to continued soft mass beer markets. Adjusted EBITDA increased by 1% to €97 million in the second quarter, compared with the same period in 2016. Excluding a positive currency translation effect of €3 million, Adjusted EBITDA was 2% lower than the same period last year.    

Financing Activity
In June, the Group issued £400 million, 10-year sterling notes, representing the longest debt maturity issued to date and its first in sterling. Proceeds, together with available cash, were used to redeem in full the $500 million Senior Secured Floating Rate Notes due 2021.

Following the redemption of the €405 million 4.250% First Priority Senior Secured Notes due 2022 on August 1, the Group will have used over $750 million of available cash and IPO proceeds to repay debt.

Net debt at June 30, 2017 was €7.0 billion.

Conference Call Details

Ardagh Group S.A. (NYSE: ARD) will hold its second quarter 2017 earnings call for investors at 3 p.m. BST (10 a.m. ET) on July 27, 2017. Please use the following link to register for this call:
http://event.onlineseminarsolutions.com/r.htm?e=1454308&s=1&k=7EDB2CFB20A388384D0D59894AA95288

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

Consolidated Interim Income Statement for the three months ended June 30, 2017

Consolidated Interim Income Statement for the six months ended June 30, 2017

Consolidated Interim Statement of Financial Position

Consolidated Interim Statement of Cash Flows

Reconciliation of profit/(loss) to Adjusted EBITDA

Reconciliation of profit/(loss) to Adjusted profit

Cash generated from operations

¹ Change pro forma reflects the Beverage Can Acquisition completed June 30, 2016.
² Adjusted EBITDA is defined as profit/(loss) for the period before income tax expense/(credit), net finance expense, depreciation and amortization and exceptional operating items. We use Adjusted EBITDA to evaluate and assess our segment performance. Adjusted EBITDA is presented because we believe that it is frequently used by securities analysts, investors and other interested parties in evaluating companies in the packaging industry. However, other companies may calculate Adjusted EBITDA in a manner different from us. Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered an alternative to profit/(loss) as indicators of operating performance or any other measures of performance derived in accordance with IFRS.
A reconciliation of the profit/(loss) for the period to Adjusted EBITDA can be found at the back of this press release.
³ 2016 reflects LTM Adjusted EBITDA on a pro forma basis.
⁴ Payable on August 31, 2017 to shareholders of record on August 17,2017.
⁵ Net debt at June 30, 2016, excludes Senior PIK Notes due 2019, redeemed in September 2016.
⁶ Included within cash and available liquidity at June 30, 2017 are net IPO proceeds of €303 million which are intended to be used to redeem in full the principal amount outstanding of the €405 million 4.250% First Priority Senior Secured Notes due 2022, on August 1, 2017.
⁷ Total exceptional items for the three and six months ended June 30, 2017 include debt refinancing and settlement costs of €28 million and €109 million respectively.  Further, total exceptional items for the three and six months ended June 30, 2017 include costs directly attributable to the acquisition and integration of the Beverage Can Business and IPO and other transaction related costs of €5 million and €18 million respectively.

SOURCE Ardagh Group S.A.