Ardagh Group S.A. - Fourth Quarter and Full Year 2019 Results
LUXEMBOURG, Feb. 20, 2020 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its results for the fourth quarter and year ended December 31, 2019.
December 31, | December 31, | Change | Change CCY | |||||
($'m except per share data) | ||||||||
Full Year | ||||||||
Revenue (1) | 6,660 | 6,676 | - | 2% | ||||
Adjusted EBITDA (1) | 1,173 | 1,115 | 5% | 8% | ||||
Adjusted EBITDA margin (1) | 17.6% | 16.7% | +90 bps | +90 bps | ||||
Adjusted earnings per share - Group (1) | 1.82 | 1.69 | 8% | 10% | ||||
Earnings/(loss) per share - Group | 6.17 | (0.40) | ||||||
Fourth Quarter | ||||||||
Revenue (1) | 1,581 | 1,589 | (1%) | 1% | ||||
Adjusted EBITDA (1) | 267 | 255 | 5% | 6% | ||||
Adjusted EBITDA margin (1) | 16.9% | 16.0% | +90 bps | +80 bps | ||||
Adjusted earnings per share - Group (1) | 0.39 | 0.33 | 18% | 22% | ||||
Dividend per share declared (2) | 0.14 | 0.14 | ||||||
Net debt to LTM Adjusted EBITDA | 4.5x | 5.0x | ||||||
Paul Coulson, Chairman and Chief Executive, said "2019 was a year of significant progress for the Group. Metal Packaging demand was strong, notably in the Americas, and global beverage can shipments increased by 5%. Glass Packaging Europe delivered another excellent year of growth, while Glass Packaging North America successfully stabilized earnings. The sustainability-driven demand backdrop for our infinitely-recyclable products remains favorable and we look to further progress in 2020."
- Revenue from Continuing Operations increased by 2% at constant currency, to $6.7 billion for the year;
- Adjusted EBITDA from Continuing Operations increased by 8% at constant currency, to $1,173 million;
- Adjusted earnings per share increased by 10% at constant currency to $1.82 (2018: $1.69);
- Earnings per share of $6.17 for the year (2018: Loss per share of $0.40);
- Fourth quarter revenue and Adjusted EBITDA growth of 1% and 6% respectively at constant currency;
- Global beverage can shipments growth of 4% for the quarter and 5% for the year, with full year specialty can growth of 6%;
- Glass Packaging revenue and Adjusted EBITDA growth of 2% and 20% respectively at constant currency in the quarter, reflecting continued strong delivery in Europe and stabilization in North America;
- Food & Specialty Packaging divestment completed in October 2019, with proceeds used to repay debt;
- Leverage reduced to 4.5x at year end, with further maturity and interest rate savings achieved during the year;
- 2020 outlook: Adjusted EBITDA of approximately $1.2 billion; Adjusted free cash flow of $375 - $400 million, before Business Growth Investments of approximately $250 million; Adjusted earnings per share of $1.48 - $1.64 (3); First quarter Adjusted EBITDA of approximately $270 million.
Summary Financial Information
Three months ended December 31, | Year ended December 31, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
(in $ millions, except EPS, ratios and percentages) | ||||||||
Revenue (4) | 1,581 | 1,589 | 6,660 | 6,676 | ||||
Adjusted EBITDA (4) | 267 | 255 | 1,173 | 1,115 | ||||
Adjusted EBITDA margin (4) | 16.9% | 16.0% | 17.6% | 16.7% | ||||
Operating cash flow (4) | 399 | 359 | 687 | 616 | ||||
Profit/(loss) for the period - Group | 1,405 | (144) | 1,458 | (94) | ||||
Adjusted profit for the period - Group (4) | 92 | 78 | 431 | 400 | ||||
Earnings/(loss) per share - Group | 5.94 | (0.61) | 6.17 | (0.40) | ||||
Adjusted earnings per share - Group (4) | 0.39 | 0.33 | 1.82 | 1.69 | ||||
At December 31, | At December 31, | |||
2019 | 2018 | |||
$'m | $'m | |||
Net debt (5) | 5,328 | 7,462 | ||
Cash and available liquidity | 1,278 | 1,170 | ||
Net debt to LTM Adjusted EBITDA (6) | 4.5x | 5.0x |
Financial Performance Review | ||||||||||
Bridge of 2018 to 2019 Revenue and Adjusted EBITDA – Continuing Operations | ||||||||||
Three months ended December 31, 2019 | ||||||||||
Revenue | Metal | Metal | Glass | Glass | Continuing | |||||
$'m | $'m | $'m | $'m | $'m | ||||||
Revenue 2018 | 379 | 432 | 387 | 391 | 1,589 | |||||
Organic | (25) | 25 | 21 | (3) | 18 | |||||
FX translation | (13) | — | (13) | — | (26) | |||||
Revenue 2019 | 341 | 457 | 395 | 388 | 1,581 | |||||
Adjusted EBITDA | Metal | Metal | Glass | Glass | Continuing | |||||
$'m | $'m | $'m | $'m | $'m | ||||||
Adjusted EBITDA 2018 | 53 | 69 | 84 | 49 | 255 | |||||
Organic | (11) | (6) | 9 | (2) | (10) | |||||
IFRS 16 | 3 | 3 | 8 | 11 | 25 | |||||
FX translation | (1) | — | (2) | — | (3) | |||||
Adjusted EBITDA 2019 | 44 | 66 | 99 | 58 | 267 | |||||
2019 margin | 12.9% | 14.4% | 25.1% | 14.9% | 16.9% | |||||
2018 margin | 14.0% | 16.0% | 21.7% | 12.5% | 16.0% | |||||
Year ended December 31, 2019 | ||||||||||
Revenue | Metal | Metal | Glass | Glass | Continuing | |||||
$'m | $'m | $'m | $'m | $'m | ||||||
Revenue 2018 | 1,616 | 1,742 | 1,623 | 1,695 | 6,676 | |||||
Organic | 26 | 74 | 77 | (20) | 157 | |||||
FX translation | (86) | — | (87) | — | (173) | |||||
Revenue 2019 | 1,556 | 1,816 | 1,613 | 1,675 | 6,660 | |||||
Adjusted EBITDA | Metal | Metal | Glass | Glass | Continuing | |||||
$'m | $'m | $'m | $'m | $'m | ||||||
Adjusted EBITDA 2018 | 270 | 230 | 358 | 257 | 1,115 | |||||
Organic | (18) | 11 | 28 | (14) | 7 | |||||
IFRS 16 | 14 | 9 | 24 | 36 | 83 | |||||
FX translation | (13) | — | (19) | — | (32) | |||||
Adjusted EBITDA 2019 | 253 | 250 | 391 | 279 | 1,173 | |||||
2019 margin | 16.3% | 13.8% | 24.2% | 16.7% | 17.6% | |||||
2018 margin | 16.7% | 13.2% | 22.1% | 15.2% | 16.7% | |||||
Group Performance
On October 31, 2019, the Group completed the combination of its Food & Specialty Metal Packaging business, operating as part of the Metal Packaging Europe and Metal Packaging Americas segments, with the business of Exal, to form Trivium Packaging, a global leader in metal packaging. The Group holds a stake of approximately 42% in Trivium. As a result of the completion of the transaction, the composition of the Group's operating and reporting segments changed. The Food & Specialty Metal Packaging business has been reported as a discontinued operation.
The following are the Group's four operating and reportable segments:
- Metal Beverage Packaging Europe
- Metal Beverage Packaging Americas
- Glass Packaging Europe
- Glass Packaging North America
Full year
Continuing Operations
Revenue decreased by $16 million, to $6,660 million in 2019, compared with $6,676 million in the year ended 31 December 2018. On a constant currency basis, revenue increased by 2%, principally due to volume/mix growth in beverage cans and the pass through of increased input costs in Glass packaging.
Adjusted EBITDA increased by $58 million, or 5%, to $1,173 million in the year ended 31 December 2019. On a constant currency basis, Adjusted EBITDA increased by $90 million, or 8%, principally due to favorable volume/mix effects, lower input costs and the impact of IFRS 16, partly offset by higher operating costs.
Fourth Quarter
Continuing Operations
Revenue of $1,581 million for the quarter ended December 31, 2019 decreased by 1% at actual exchange rates and increased by $18 million or 1% at constant currency, compared with the same period last year. The increase in revenue is driven mainly by favorable volume/mix effects in Beverage Packaging Americas and higher selling prices in Glass Packaging, including the pass through of higher input costs.
Adjusted EBITDA increased by $12 million, or 5%, to $267 million in the three months ending December 31, 2019. On a constant currency basis, Adjusted EBITDA increased by 6%, principally due to favourable volume mix effects, the impact of IFRS 16, partly offset by higher operating costs.
Metal Beverage Packaging Europe
Revenue of $341 million decreased by 10% in the three-month period ended December 31, 2019, compared with the same period last year. On a constant currency basis, revenue decreased by 7%, principally due to unfavorable volume/mix effects and lower selling prices. Adjusted EBITDA for the quarter of $44 million decreased by 17% at actual exchange rates and 15% at constant currency, compared with the same period last year. The reduction in Adjusted EBITDA principally reflected increased operating costs and unfavorable volume/mix effects, partly offset by the impact of IFRS 16.
Metal Beverage Packaging Americas
Revenue increased by 6% to $457 million in the fourth 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 $66 million decreased by 4% compared with the particularly strong prior year period, principally reflecting other operating cost increases, partly offset by favorable volume/mix effects and the impact of IFRS 16.
Glass Packaging Europe
Revenue for the quarter of $395 million increased by 2% at actual exchange rates and by 5% at constant currency, compared with the same period last year. Revenue growth principally reflected increased selling prices, including to recover increased input costs. Adjusted EBITDA for the quarter of $99 million increased by 21%, at constant exchange rates, compared with the same period last year, mainly due to higher selling prices and the impact of IFRS 16, partly offset by increased input costs.
Glass Packaging North America
Revenue decreased by 1% to $388 million in the fourth quarter, compared with the same period last year. This principally reflected unfavorable volume/mix effects, partly offset by increased selling prices to recover higher input costs. Adjusted EBITDA for the quarter of $58 million increased by 18%, compared with the same period last year, mainly due to the impact of IFRS 16 of $11 million, increased selling prices reflecting the pass through of higher input costs and lower freight and logistics costs, partly offset by unfavorable volume/mix effects.
Financing Activity
On October 31, 2019, the Group completed the combination of its Food & Specialty Metal Packaging business, operating as part of the Metal Packaging Europe and Metal Packaging Americas segments, with the business of Exal, to form Trivium Packaging, a global leader in metal packaging.
Following the completion of the combination of its Food & Specialty business with the business of Exal, on October 31, 2019, the Group issued tender offers, at par, in respect of its $715 million 4.250% Senior Secured Notes due 2022 ("the 2022 Notes"), €750 million 2.750% Senior Secured Notes due 2024 ("the 2024 Notes"), €440 million 2.125% Senior Secured Notes due 2026 ("the 2026 Senior Secured Euro Notes") and $500 million 4.125% Senior Secured Notes due 2026 ("the 2026 Senior Secured Euro Notes"). Following the expiration of the offer on November 28, 2019 notice was given to repurchase the following amounts, $20 million of the 2022 Notes, €9 million of the 2024 Notes, and €1 million of the 2026 Senior Secured Euro Notes. On December 2, 2019, in accordance with the terms of the offer, the redemptions were completed.
On November 14, 2019, the Group redeemed $1,000 million 4.625% Senior Secured Notes due 2023 and €440 million 4.125% Senior Secured Notes due 2023, and paid the applicable redemption premiums and accrued interest.
On November 29, 2019, the Group redeemed €750 million 6.750% Senior Notes due 2024 and paid the applicable redemption premium and accrued interest.
As at December 31, 2019, the Group had $663 million available under the Global Asset Based Loan Facility. During 2019, the Group reduced the facility size from $850 million to $700 million as a result of the Trivium transaction.
Earnings Webcast and Conference Call Details
Ardagh Group S.A. (NYSE: ARD) will hold its fourth quarter 2019 earnings webcast and conference call for investors at 3 p.m. GMT (10 a.m. ET) on February 20, 2020. Please use the following webcast link to register for this call:
Webcast registration and access:
https://event.on24.com/wcc/r/2168526/2003269CB850A7C26A442C9150B4952C
Conference call dial in:
United States: +1855 85 70686
International: +44 33 3300 0804
Participant pin code: 97848277#
Slides and annual report
Supplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.
The Group's 2019 annual report on Form 20-F is expected to be filed by March 2020.
The 2019 annual report for ARD Finance S.A., issuer of the Senior Secured Toggle Notes due 2027, will be published in March 2020 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 more than 50 metal and glass production facilities in 12 countries across three continents, employing over 16,000 people with sales of $6.7bn.
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 Financial Statements | ||||||||||||||
Consolidated Income Statement for the three months ended December 31, 2019 | ||||||||||||||
Unaudited | Unaudited | |||||||||||||
Three months ended December 31, 2019 | Three months ended December 31, 2018 | |||||||||||||
Before | Before | |||||||||||||
exceptional | Exceptional | exceptional | Exceptional | |||||||||||
items | Items | Total | items | Items | Total | |||||||||
$'m | $'m | $'m | $'m | $'m | $'m | |||||||||
Revenue | 1,581 | — | 1,581 | 1,589 | — | 1,589 | ||||||||
Cost of sales | (1,347) | (4) | (1,351) | (1,343) | (9) | (1,352) | ||||||||
Gross profit | 234 | (4) | 230 | 246 | (9) | 237 | ||||||||
Sales, general and administration expenses | (77) | (9) | (86) | (82) | (6) | (88) | ||||||||
Intangible amortization and impairment | (57) | — | (57) | (58) | (186) | (244) | ||||||||
Operating profit/(loss) | 100 | (13) | 87 | 106 | (201) | (95) | ||||||||
Net finance expense | (101) | (91) | (192) | (106) | (2) | (108) | ||||||||
Share of post-tax losses in equity accounted joint venture | (10) | (39) | (49) | — | — | — | ||||||||
Loss before tax | (11) | (143) | (154) | — | (203) | (203) | ||||||||
Income tax charge | (18) | (31) | (49) | (41) | 27 | (14) | ||||||||
Loss from continuing operations | (29) | (174) | (203) | (41) | (176) | (217) | ||||||||
Profit from discontinued operation | 71 | 1,537 | 1,608 | 77 | (4) | 73 | ||||||||
Profit/(loss) for the period | 42 | 1,363 | 1,405 | 36 | (180) | (144) | ||||||||
Profit/(loss) attributable to: | ||||||||||||||
Equity holders | 1,405 | (144) | ||||||||||||
Non-controlling interests | — | — | ||||||||||||
Profit/(loss) for the period | 1,405 | (144) | ||||||||||||
Earnings/(loss) per share: | ||||||||||||||
Basic and diluted earnings/(loss) per share attributable to | $5.94 | ($0.61) | ||||||||||||
Loss per share from continuing operations: | ||||||||||||||
Basic and diluted loss per share from continuing operations | ($0.86) | ($0.92) | ||||||||||||
Consolidated Income Statement for the twelve months ended December 31, 2019 | ||||||||||||||
Year ended December 31, 2019 | Year ended December 31, 2018 | |||||||||||||
Before | Before | |||||||||||||
exceptional | Exceptional | exceptional | Exceptional | |||||||||||
items | Items | Total | items | Items | Total | |||||||||
$'m | $'m | $'m | $'m | $'m | $'m | |||||||||
Revenue | 6,660 | — | 6,660 | 6,676 | — | 6,676 | ||||||||
Cost of sales | (5,595) | (2) | (5,597) | (5,623) | (108) | (5,731) | ||||||||
Gross profit | 1,065 | (2) | 1,063 | 1,053 | (108) | 945 | ||||||||
Sales, general and administration expenses | (311) | (51) | (362) | (300) | (17) | (317) | ||||||||
Intangible amortization | (233) | — | (233) | (237) | (186) | (423) | ||||||||
Operating profit | 521 | (53) | 468 | 516 | (311) | 205 | ||||||||
Net finance expense | (456) | (203) | (659) | (457) | (22) | (479) | ||||||||
Share of post-tax loss in equity accounted joint venture | (10) | (39) | (49) | — | — | — | ||||||||
Loss before tax | 55 | (295) | (240) | 59 | (333) | (274) | ||||||||
Income tax charge | (41) | (3) | (44) | (67) | 49 | (18) | ||||||||
Loss from continuing operations | 14 | (298) | (284) | (8) | (284) | (292) | ||||||||
Profit from discontinued operation | 215 | 1,527 | 1,742 | 211 | (13) | 198 | ||||||||
Profit/(loss) for the year | 229 | 1,229 | 1,458 | 203 | (297) | (94) | ||||||||
Profit/(loss) attributable to: | ||||||||||||||
Equity holders | 1,458 | (94) | ||||||||||||
Non-controlling interests | — | — | ||||||||||||
Profit/(loss) for the period | 1,458 | (94) | ||||||||||||
Earnings/(loss) per share: | ||||||||||||||
Basic and diluted earnings/(loss) per share attributable to | $6.17 | ($0.40) | ||||||||||||
Loss per share from continuing operations: | ||||||||||||||
Basic and diluted loss per share from continuing operations | ($1.20) | ($1.24) | ||||||||||||
Consolidated Statement of Financial Position | |||
At December 31, | At December 31, | ||
2019 | 2018 | ||
$'m | $'m | ||
Non-current assets | |||
Intangible assets | 2,884 | 3,601 | |
Property, plant and equipment | 2,677 | 3,388 | |
Derivative financial instruments | 4 | 11 | |
Deferred tax assets | 204 | 254 | |
Investment in material joint venture | 375 | — | |
Other non-current assets | 68 | 24 | |
6,212 | 7,278 | ||
Current assets | |||
Inventories | 964 | 1,284 | |
Trade and other receivables | 734 | 1,053 | |
Contract assets | 151 | 160 | |
Derivative financial instruments | 3 | 9 | |
Cash and cash equivalents | 614 | 530 | |
2,466 | 3,036 | ||
TOTAL ASSETS | 8,678 | 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 | 165 | 45 | |
Retained earnings | (2,181) | (3,355) | |
(216) | (1,510) | ||
Non-controlling interests | 1 | 1 | |
TOTAL EQUITY | (215) | (1,509) | |
Non-current liabilities | |||
Borrowings | 5,524 | 7,729 | |
Lease obligations | 291 | 32 | |
Employee benefit obligations | 716 | 957 | |
Derivative financial instruments | 44 | 107 | |
Deferred tax liabilities | 344 | 543 | |
Provisions | 29 | 38 | |
6,948 | 9,406 | ||
Current liabilities | |||
Borrowings | 22 | 114 | |
Lease obligations | 73 | 4 | |
Interest payable | 60 | 81 | |
Derivative financial instruments | 17 | 38 | |
Trade and other payables | 1,628 | 1,983 | |
Income tax payable | 97 | 114 | |
Provisions | 48 | 83 | |
1,945 | 2,417 | ||
TOTAL LIABILITIES | 8,893 | 11,823 | |
TOTAL EQUITY and LIABILITIES | 8,678 | 10,314 | |
Consolidated Statement of Cash Flows | ||||
Year ended December 31, | ||||
2019 | 2018 | |||
$'m | $'m | |||
Cash flows from operating activities | ||||
Cash generated from continuing operations | 1,179 | 991 | ||
Interest paid (7) | (417) | (414) | ||
Income tax paid (7) | (64) | (97) | ||
Net cash from operating activities - continuing operations | 698 | 480 | ||
Net cash from operating activities - discontinued operation | 141 | 375 | ||
Net cash from operating activities | 839 | 855 | ||
Cash flows from investing activities | ||||
Purchase of property, plant and equipment | (498) | (465) | ||
Purchase of intangible assets | (10) | (12) | ||
Proceeds from disposal of property, plant and equipment | 3 | 10 | ||
Investing cash flows used in continuing operations | (505) | (467) | ||
Proceeds from disposal of discontinued operation, net of cash disposed of | 2,539 | — | ||
Investing cash flows used in discontinued operation | (107) | (108) | ||
Net cash from/(used in) investing activities | 1,927 | (575) | ||
Cash flows from financing activities | ||||
Repayment of borrowings | (4,088) | (442) | ||
Proceeds from borrowings | 1,806 | 110 | ||
Dividends paid | (132) | (132) | ||
Consideration received/(paid) on extinguishment of derivative financial instruments | 9 | (44) | ||
Deferred debt issue costs paid | (14) | (5) | ||
Lease payments | (78) | (4) | ||
Early redemption premium paid | (165) | (7) | ||
Financing cash flows from continuing operations | (2,662) | (524) | ||
Financing cash flows from discontinued operation | — | 3 | ||
Net cash outflow from financing activities | (2,662) | (521) | ||
Net increase/(decrease) in cash and cash equivalents | 104 | (241) | ||
Cash and cash equivalents at the beginning of the year | 530 | 784 | ||
Foreign exchange losses on cash and cash equivalents | (20) | (13) | ||
Cash and cash equivalents at the end of the year | 614 | 530 | ||
Financial assets and liabilities | ||||||||||||||
At December 31, 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 | |||||||||||||
currency | currency | $'m | $'m | |||||||||||
m | m | |||||||||||||
2.750% Senior Secured Notes | EUR | 741 | 15-Mar-24 | Bullet | 741 | 832 | – | |||||||
4.250% Senior Secured Notes | USD | 695 | 15-Sep-22 | Bullet | 695 | 695 | – | |||||||
2.125% Senior Secured Notes | EUR | 439 | 15-Aug-26 | Bullet | 439 | 493 | – | |||||||
4.125% Senior Secured Notes | USD | 500 | 15-Aug-26 | Bullet | 500 | 500 | – | |||||||
4.750% Senior Notes | GBP | 400 | 15-Jul-27 | Bullet | 400 | 528 | – | |||||||
6.000% Senior Notes | USD | 1,700 | 15-Feb-25 | Bullet | 1,700 | 1,708 | – | |||||||
5.250% Senior Notes | USD | 800 | 15-Aug-27 | Bullet | 800 | 800 | – | |||||||
Global Asset Based Loan Facility | USD | 663 | 07-Dec-22 | Revolving | – | – | 663 | |||||||
Lease obligations | Various | – | Amortizing | – | 364 | – | ||||||||
Other borrowings/credit lines | EUR/USD | – | Rolling | Amortizing | – | 22 | 1 | |||||||
Total borrowings / undrawn facilities | 5,942 | 664 | ||||||||||||
Deferred debt issue costs and bond premium | (32) | – | ||||||||||||
Net borrowings / undrawn facilities | 5,910 | 664 | ||||||||||||
Cash and cash equivalents | (614) | 614 | ||||||||||||
Derivative financial instruments used to hedge | 32 | – | ||||||||||||
Net debt / available liquidity | 5,328 | 1,278 | ||||||||||||
Reconciliation of profit/(loss) for the period to Adjusted profit - Group | ||||||||
Three months ended December 31, | Year ended December 31, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
$'m | $'m | $'m | $'m | |||||
Profit/(loss) for the period - Group | 1,405 | (144) | 1,458 | (94) | ||||
Total exceptional items (8) | (1,382) | 209 | (1,215) | 351 | ||||
Tax credit/(charge) associated with exceptional items (8) | 19 | (29) | (14) | (54) | ||||
Intangible amortization | 57 | 65 | 249 | 265 | ||||
Tax credit associated with intangible amortization | (12) | (13) | (56) | (58) | ||||
Gains/(loss) on derivative financial instruments | 5 | (10) | 9 | (10) | ||||
Adjusted profit for the period - Group | 92 | 78 | 431 | 400 | ||||
Weighted average common shares | 236.36 | 236.35 | 236.36 | 236.35 | ||||
Earnings/(loss) per share | 5.94 | (0.61) | 6.17 | (0.40) | ||||
Adjusted earnings per share | 0.39 | 0.33 | 1.82 | 1.69 | ||||
Reconciliation of loss for the period from Continuing Operations to Adjusted EBITDA, cash | ||||||||
Three months ended December 31, | Year ended December 31, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
$'m | $'m | $'m | $'m | |||||
Loss from continuing operations | (203) | (217) | (284) | (292) | ||||
Income tax charge | 49 | 14 | 44 | 18 | ||||
Net finance expense | 192 | 108 | 659 | 479 | ||||
Depreciation and amortization | 167 | 149 | 652 | 599 | ||||
Exceptional operating items | 13 | 201 | 53 | 311 | ||||
Share of post-tax loss in equity accounted joint venture | 49 | — | 49 | — | ||||
Adjusted EBITDA from continuing operations | 267 | 255 | 1,173 | 1,115 | ||||
Movement in working capital | 257 | 212 | 105 | (9) | ||||
Transaction-related, start-up and other exceptional costs paid | (59) | (22) | (87) | (92) | ||||
Exceptional restructuring paid | (3) | (3) | (12) | (23) | ||||
Cash generated from continuing operations | 462 | 442 | 1,179 | 991 | ||||
Transaction-related, start-up and other exceptional costs paid | 59 | 22 | 87 | 92 | ||||
Capital expenditure (9) | (101) | (105) | (505) | (467) | ||||
Lease payments due to the adoption of IFRS 16 | (21) | — | (74) | — | ||||
Operating cash flow from continuing operations | 399 | 359 | 687 | 616 | ||||
Operating cash flow from discontinued operation | (25) | 169 | 51 | 267 | ||||
Operating cashflow - Group (10) | 374 | 528 | 738 | 883 | ||||
Interest (11) | (82) | (135) | (411) | (414) | ||||
Income tax paid | (26) | (40) | (79) | (105) | ||||
Adjusted free cash flow - Group (10) | 266 | 353 | 248 | 364 | ||||
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(1). Continuing Operations results unless stated otherwise. 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 April 1, 2020 to shareholders of record on March 18, 2020. |
(3). 2020 Adjusted EPS outlook excludes contribution from joint venture. |
(4). Continuing Operations results unless stated otherwise. 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 December 31, 2019 includes IFRS 16 leases. |
(6). Net debt to LTM Adjusted EBITDA, at December 31, 2018, reflects the LTM Adjusted EBITDA for the Group, inclusive of the Food & Specialty business EBITDA of $363 million. |
(7). Operating cash flows for discontinued operation for the year ended December 31, 2019, include interest and income tax payments of $6 million and $15 million respectively (2018: $2 million and $8 million). |
(8).Total exceptional items before tax for the year ending December 31, 2019 of $1,215 million include $200 million debt refinancing and settlement costs related to the notes repaid in August, November and December 2019 including premium payable on the early redemption of the notes of $165 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 year ending December 31, 2019 also include a $37 million pension service credit and a $15 million provision for a court award and related interest, net of the tax adjusted indemnity receivable in respect of the legal matter, recognized in Glass Packaging North America and $51 million transaction-related costs, primarily related to the combination of the Group's Food & Specialty Metal Packaging business with the business of Exal Corporation. Exceptional items of $1,527 million related to discontinued operation primarily relate to the gain recognised on divestment of the Group's Food & Specialty Metal Packaging business. $24 million relates to the Group's capacity realignment programs comprising start-up related costs ($13 million), restructuring costs ($6 million) and property, plant and equipment impairment charges ($5 million). These costs were incurred in Glass Packaging North America ($15 million), Glass Packaging Europe ($5 million), Metal Beverage Packaging Americas ($2 million) and Metal Beverage Packaging Europe ($2 million). |
(9). Capital expenditure for the three and twelve months ended December 31, 2019, includes $20 million and $75 million respectively, relating to spend on short payback projects in continuing operations. |
(10). Operating cash flow – Group and Adjusted Free cash flow – Group results for both the three months and year end December 31, 2019 reflect that the Group divested the Food & Specialty business as of October 31, 2019. As a result, the associated operating cash flow and free cash flow, which is typically received in the final months of the year, principally due to seasonality, in the Food & Specialty business, was not received by the Group in respect of November or December 2019, however the Group was compensated in this regard through the transaction consideration. |
(11). Interest paid in the year ended December 31, 2019, excludes $12 million in respect of the redemption, in August 2019, of the Group's $1,650 million 7.250% Senior Notes due 2024 and redemptions, in November 2019, of the Group's $1,000 million 4.625% Senior Secured Notes due 2023, €440 million 4.125% Senior Secured Notes due 2023 and €750 million 6.750% Senior Notes due 2024, related to the interest payable from the date the Notes were called for redemption to the redemption date. |
Interest paid in the year ended December 31, 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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