ARD - Ardagh Group S.A. - First Quarter 2018 Results
LUXEMBOURG, April 26, 2018 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its financial results for the first quarter ended March 31, 2018.
|
Highlights |
|
March 31, 2018 |
|
March 31, 2017 |
|
Change |
|
Change |
|
( except per share and ratio data) |
|
First Quarter |
|
Revenue |
|
2,224 |
|
1,960 |
|
13% |
|
5% |
|
Adjusted EBITDA 1 |
|
348 |
|
318 |
|
9% |
|
1% |
|
Adjusted earnings per share 1 |
|
0.33 |
|
0.31 |
|
6% |
|
3% |
|
Dividend per share declared 2 |
|
0.14 |
|
0.14 |
Paul Coulson, Chairman and Chief Executive, said "Our first quarter results again highlight the benefit of Ardagh's scale and diversity across our two substrates and multiple geographies. The Group delivered Adjusted EBITDA growth of 9% to $348 million on a reported basis and 1% at constant currency. A strong performance in both Metal Packaging divisions and in Glass Packaging Europe more than offset a decline in Glass Packaging North America, where we remain focused on the implementation of our profit improvement initiatives."
- Revenue and Adjusted EBITDA growth of 13% and 9% to $2,224 million and $348 million respectively;
- Constant currency Revenue and Adjusted EBITDA growth of 5% and 1% respectively;
- Group volume/mix growth of 3%, led by Metal Packaging Americas;
- Loss per share $0.06 (2017: loss per share $0.31);
- Adjusted earnings per share growth of 6% to $0.33;
- Quarterly cash dividend of $0.14 per common share, payable on May 31, 2018;
- Adoption of US dollar reporting from January 1, 2018;
- 2018 outlook: Full year guidance remains unchanged. Second quarter Adjusted EBITDA of approximately US$415 million (2017: US$415 million).
|
Summary Financial Information |
|
Three months ended March 31 |
|
2018 |
|
2017 |
|
(in $ millions, except EPS, ratios and percentages) |
|
Revenue |
|
2,224 |
|
1,960 |
|
Loss for the period |
|
(15) |
|
(64) |
|
Adjusted profit for the period 3 |
|
79 |
|
64 |
|
Adjusted EBITDA 3 |
|
348 |
|
318 |
|
Adjusted EBITDA margin |
|
15.6% |
|
16.2% |
|
Loss per share ($) |
|
(0.06) |
|
(0.31) |
|
Adjusted earnings per share ($) 3 |
|
0.33 |
|
0.31 |
|
Cash (used in)/generated from operations |
|
(6) |
|
114 |
|
Operating cash flow 3 |
|
(149) |
|
7 |
|
Adjusted free cash flow 3 |
|
(242) |
|
(88) |
|
March 31, 2018 |
|
December 31, 2017 |
|
Net debt 4 |
|
8,328 |
|
7,825 |
|
Cash and available liquidity |
|
1,307 |
|
1,598 |
|
Net debt to LTM Adjusted EBITDA |
|
5.4x |
|
5.2x |
|
Financial Performance Review |
|
Bridge of 2017 to 2018 Reported Revenue and Adjusted EBITDA |
|
Three months ended March 31, 2018 |
|
Metal |
|
Metal |
|
Glass |
|
Glass |
|
Group 5 |
|
|
|
|
|
|
|
|
|
|
|
Reported revenue 2017 |
|
731 |
|
431 |
|
339 |
|
459 |
|
1,960 |
|
Organic |
|
48 |
|
98 |
|
10 |
|
(46) |
|
110 |
|
FX translation |
|
106 |
|
– |
|
48 |
|
– |
|
154 |
|
Reported revenue 2018 |
|
885 |
|
529 |
|
397 |
|
413 |
|
2,224 |
|
Metal |
|
Metal |
|
Glass |
|
Glass |
|
Group 5 |
|
|
|
|
|
|
|
|
|
|
|
Reported Adjusted EBITDA 2017 |
|
111 |
|
48 |
|
68 |
|
91 |
|
318 |
|
Organic |
|
7 |
|
15 |
|
3 |
|
(20) |
|
5 |
|
FX translation |
|
16 |
|
– |
|
9 |
|
– |
|
25 |
|
Reported Adjusted EBITDA 2018 |
|
134 |
|
63 |
|
80 |
|
71 |
|
348 |
|
Reported Adjusted EBITDA 2018 margin |
|
15.1% |
|
11.9% |
|
20.2% |
|
17.2% |
|
15.6% |
|
Reported Adjusted EBITDA 2017 margin |
|
15.2% |
|
11.1% |
|
20.1% |
|
19.8% |
|
16.2% |
Group
Revenue of $2,224 million for the quarter ended March 31, 2018 represented an increase of 13% at actual exchange rates and, at constant currency, increased by 5% compared with the same period last year. The increase in revenue was attributable to $154 million favorable currency translation effects, 3% volume/mix growth and the pass through of increased input costs. First quarter Adjusted EBITDA of $348 million increased by 9% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 1%, with growth in three of our four divisions partly offset by a decline in Glass Packaging North America.
Metal Packaging Europe
Revenue increased by 21%, to $885 million in the three-month period ended March 31, 2018, compared with the same period last year. Growth reflected favorable currency translation effects of $106 million and 6% organic growth, principally from favorable volume/mix effects and the pass through of higher input costs. Adjusted EBITDA for the quarter of $134 million increased by 6% at constant currency compared with the same period last year, reflecting cost savings and synergy delivery partly offset by higher input costs.
Metal Packaging Americas
Revenue increased by 23% to $529 million in the first quarter of 2018, compared with the same period last year. The increase was due mainly to favorable volume/mix effects and the pass through of higher input costs. Adjusted EBITDA increased by $15 million, or 31% to $63 million, compared with the same period last year. Growth primarily reflected higher volume/mix effects, synergy realization and cost reductions, partly offset by higher input costs.
Glass Packaging Europe
Revenue increased by 17% to $397 million in the three-month period ended March 31, 2018, compared with the same period last year, benefitting from higher volume/mix effects and favorable currency translation effects of $48 million. Adjusted EBITDA for the quarter increased by 18% to $80 million, compared with the same period last year, as a result of cost savings and favorable currency translation effects of $9 million.
Glass Packaging North America
Revenue decreased by 10% to $413 million in the first quarter, compared with the same period last year principally reflecting lower volumes. Adjusted EBITDA decreased by 22% to $71 million in the first quarter, compared with the same period in 2017 as a result of lower volumes and higher freight and other operating costs compared with the same period last year.
Earnings Webcast and Conference Call Details
Ardagh Group S.A. (NYSE: ARD) will hold its first quarter 2018 earnings webcast and conference call for investors at 3 p.m. BST (10 a.m. ET) on April 26, 2018. Please use the following webcast link to register for this call:
Webcast registration and access:
http://event.on24.com/wcc/r/1641811-1/5A7D879B23B597155888ED29ED385496?partnerref=rss-events
Conference call dial in:
United States callers: 1866 928 7517
International callers: +44 20 3139 4830
Participant pin code: 43871149#
Slides and annual report
Supplemental slides to accompany this release are available on our website at http://www.ardaghgroup.com/investors.
First 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 is a global leader in metal and glass packaging solutions, producing packaging for most of the world's leading food, beverage and consumer brands. It operates 108 facilities in 22 countries, employing approximately 23,300 people and has global sales of approximately $8.6 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.
Non-GAAP Financial Measures
This press release may contain certain consolidated financial measures such as Adjusted EBITDA, working capital, 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 |
|
Unaudited |
|
Unaudited, re-presented (i) |
|
Three months ended March 31, 2018 |
|
Three months ended March 31, 2017 |
|
Before |
|
Before |
|
exceptional |
|
Exceptional |
|
exceptional |
|
Exceptional |
|
items |
|
Items |
|
Total |
|
items |
|
Items |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
2,224 |
|
– |
|
2,224 |
|
1,960 |
|
– |
|
1,960 |
|
Cost of sales |
|
(1,872) |
|
(48) |
|
(1,920) |
|
(1,631) |
|
– |
|
(1,631) |
|
Gross profit/(loss) |
|
352 |
|
(48) |
|
304 |
|
329 |
|
– |
|
329 |
|
Sales, general and administration expenses |
|
(118) |
|
(6) |
|
(124) |
|
(106) |
|
(14) |
|
(120) |
|
Intangible amortization |
|
(67) |
|
– |
|
(67) |
|
(67) |
|
– |
|
(67) |
|
Operating profit/(loss) |
|
167 |
|
(54) |
|
113 |
|
156 |
|
(14) |
|
142 |
|
Finance expense |
|
(126) |
|
– |
|
(126) |
|
(129) |
|
(86) |
|
(215) |
|
Profit/(loss) before tax |
|
41 |
|
(54) |
|
(13) |
|
27 |
|
(100) |
|
(73) |
|
Income tax (charge)/credit |
|
(14) |
|
12 |
|
(2) |
|
(11) |
|
20 |
|
9 |
|
Profit/(loss) for the period |
|
27 |
|
(42) |
|
(15) |
|
16 |
|
(80) |
|
(64) |
|
Loss attributable to: |
|
Equity holders |
|
(15) |
|
(64) |
|
Non‑controlling interests |
|
– |
|
– |
|
Loss for the period |
|
(15) |
|
(64) |
|
Loss per share: |
|
Basic loss for the period attributable to equity holders |
|
($0.06) |
|
($0.31) |
|
(i) |
|
The consolidated interim income statement for the three months ended March 31, 2017 has been re-presented to reflect the Group's change in presentation currency from euro to U.S. dollar on January 1, 2018. |
|
Consolidated Interim Statement of Financial Position |
|
Unaudited |
|
March 31, 2018 |
|
December 31, 2017 |
|
|
|
|
|
Re-presented (ii) |
|
Non-current assets |
|
Intangible assets |
|
4,104 |
|
4,104 |
|
Property, plant and equipment |
|
3,499 |
|
3,368 |
|
Derivative financial instruments |
|
6 |
|
7 |
|
Deferred tax assets |
|
212 |
|
222 |
|
Other non-current assets |
|
25 |
|
25 |
|
7,846 |
|
7,726 |
|
Current assets |
|
Inventories |
|
1,335 |
|
1,208 |
|
Trade and other receivables |
|
1,448 |
|
1,269 |
|
Contract asset |
|
214 |
|
168 |
|
Derivative financial instruments |
|
– |
|
16 |
|
Cash and cash equivalents |
|
493 |
|
784 |
|
3,490 |
|
3,445 |
|
TOTAL ASSETS |
|
11,336 |
|
11,171 |
|
Equity attributable to owners of the parent |
|
Issued capital |
|
23 |
|
23 |
|
Share premium |
|
1,292 |
|
1,290 |
|
Capital contribution |
|
485 |
|
485 |
|
Other reserves |
|
(118) |
|
(19) |
|
Retained earnings |
|
(3,136) |
|
(3,139) |
|
(1,454) |
|
(1,360) |
|
Non-controlling interests |
|
1 |
|
1 |
|
TOTAL EQUITY |
|
(1,453) |
|
(1,359) |
|
Non-current liabilities |
|
Borrowings |
|
8,407 |
|
8,306 |
|
Employee benefit obligations |
|
955 |
|
997 |
|
Derivative financial instruments |
|
381 |
|
301 |
|
Deferred tax liabilities |
|
576 |
|
587 |
|
Related party borrowings |
|
– |
|
– |
|
Provisions |
|
41 |
|
44 |
|
10,360 |
|
10,235 |
|
Current liabilities |
|
Borrowings |
|
5 |
|
2 |
|
Interest payable |
|
115 |
|
71 |
|
Derivative financial instruments |
|
48 |
|
2 |
|
Trade and other payables |
|
2,041 |
|
1,988 |
|
Income tax payable |
|
110 |
|
162 |
|
Provisions |
|
110 |
|
70 |
|
2,429 |
|
2,295 |
|
TOTAL LIABILITIES |
|
12,789 |
|
12,530 |
|
TOTAL EQUITY and LIABILITIES |
|
11,336 |
|
11,171 |
|
(ii) |
|
The consolidated statement of financial position at December 31, 2017 has been re-presented to reflect the Group's change in presentation currency from euro to U.S. dollar, the impact of the adoption of IFRS 15 "Revenue with contracts from customers" and the impact of the adoption of IFRS 9 "Financial Instruments". |
|
Consolidated Interim Statement of Cash Flows |
|
Unaudited |
|
Three months ended |
|
March 31 |
|
2018 |
|
2017 |
|
|
|
|
|
Re-presented (iii) |
|
Cash flows from operating activities |
|
Cash (used in)/generated from operations |
|
(6) |
|
114 |
|
Interest paid |
|
(68) |
|
(81) |
|
Income tax paid |
|
(25) |
|
(14) |
|
Net cash (used in)/from operating activities |
|
(99) |
|
19 |
|
Cash flows from investing activities |
|
Purchase of property, plant and equipment |
|
(163) |
|
(113) |
|
Purchase of software and other intangibles |
|
(5) |
|
(3) |
|
Proceeds from disposal of property, plant and equipment |
|
2 |
|
– |
|
Net cash used in investing activities |
|
(166) |
|
(116) |
|
Cash flows from financing activities |
|
Dividends paid |
|
(33) |
|
(67) |
|
Finance lease payments |
|
(1) |
|
– |
|
Repayment of borrowings |
|
(1) |
|
(2,996) |
|
Deferred debt issue costs paid |
|
(1) |
|
(18) |
|
Proceeds from borrowings |
|
– |
|
3,241 |
|
Proceeds from share issuance |
|
– |
|
333 |
|
Early redemption premium paid |
|
– |
|
(57) |
|
Net cash (outflow)/inflow from financing activities |
|
(36) |
|
436 |
|
Net (decrease)/increase in cash and cash equivalents |
|
(301) |
|
339 |
|
Cash and cash equivalents at the beginning of the period |
|
784 |
|
813 |
|
Exchange gains on cash and cash equivalents |
|
10 |
|
5 |
|
Cash and cash equivalents at the end of the period |
|
493 |
|
1,157 |
|
(iii) |
|
The consolidated interim statement of cashflows for the three months ended March 31, 2017 has been re-presented to reflect the Group's change in presentation currency from euro to U.S. dollar on January 1, 2018. |
Financial assets and liabilities
At March 31, 2018, 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 |
|
2.750% Senior Secured Notes |
|
EUR |
|
750 |
|
15-Mar-24 |
|
Bullet |
|
750 |
|
924 |
|
– |
|
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 |
|
542 |
|
– |
|
4.250% Senior Secured Notes |
|
USD |
|
715 |
|
15-Sep-22 |
|
Bullet |
|
715 |
|
715 |
|
– |
|
4.750% Senior Notes |
|
GBP |
|
400 |
|
15-Jul-27 |
|
Bullet |
|
400 |
|
563 |
|
– |
|
6.000% Senior Notes |
|
USD |
|
1,700 |
|
15-Feb-25 |
|
Bullet |
|
1,700 |
|
1,681 |
|
– |
|
7.250% Senior Notes |
|
USD |
|
1,650 |
|
15-May-24 |
|
Bullet |
|
1,650 |
|
1,650 |
|
– |
|
6.750% Senior Notes |
|
EUR |
|
750 |
|
15-May-24 |
|
Bullet |
|
750 |
|
924 |
|
– |
|
6.000% Senior Notes |
|
USD |
|
440 |
|
30-Jun-21 |
|
Bullet |
|
440 |
|
440 |
|
– |
|
Global Asset Based Loan Facility |
|
USD |
|
813 |
|
07-Dec-22 |
|
Revolving |
|
— |
|
– |
|
813 |
|
Finance Lease Obligations |
|
USD/GBP/EUR |
|
Amortizing |
|
39 |
|
39 |
|
– |
|
Other borrowings/credit lines |
|
EUR |
|
4 |
|
Rolling |
|
Amortizing |
|
3 |
|
3 |
|
1 |
|
Total borrowings / undrawn facilities |
|
8,481 |
|
814 |
|
Deferred debt issue costs and bond premium |
|
(69) |
|
– |
|
Net borrowings / undrawn facilities |
|
8,412 |
|
814 |
|
Cash and cash equivalents |
|
(493) |
|
493 |
|
Derivative financial instruments used to |
|
409 |
|
– |
|
Net debt / available liquidity |
|
8,328 |
|
1,307 |
|
Reconciliation of loss for the period to Adjusted profit |
|
Three months ended March 31 |
|
2018 |
|
2017 |
|
|
|
|
|
Loss for the period |
|
(15) |
|
(64) |
|
Total exceptional items 6 |
|
54 |
|
100 |
|
Tax credit associated with exceptional items |
|
(12) |
|
(20) |
|
Intangible amortization |
|
67 |
|
67 |
|
Tax credit associated with intangible amortization |
|
(15) |
|
(19) |
|
Adjusted profit for the period |
|
79 |
|
64 |
|
Weighted average ordinary shares |
|
236.3 |
|
208.7 |
|
Loss per share ($) |
|
(0.06) |
|
(0.31) |
|
Adjusted earnings per share ($) |
|
0.33 |
|
0.31 |
|
Reconciliation of loss for the period to Adjusted EBITDA, cash generated from operations, operating cash flow and Adjusted free cash flow |
|
Three months ended March 31 |
|
2018 |
|
2017 |
|
|
|
|
|
Loss for the period |
|
(15) |
|
(64) |
|
Income tax charge/(credit) |
|
2 |
|
(9) |
|
Net finance expense |
|
126 |
|
215 |
|
Depreciation and amortization |
|
181 |
|
162 |
|
Exceptional operating items |
|
54 |
|
14 |
|
Adjusted EBITDA |
|
348 |
|
318 |
|
Movement in working capital |
|
(326) |
|
(192) |
|
Acquisition-related, IPO, start-up and other exceptional costs paid |
|
(23) |
|
(9) |
|
Exceptional restructuring paid |
|
(5) |
|
(3) |
|
Cash (used in)/generated from operations |
|
(6) |
|
114 |
|
Acquisition-related, IPO, start-up and other exceptional costs paid |
|
23 |
|
9 |
|
Capital expenditure |
|
(166) |
|
(116) |
|
Operating cash flow |
|
(149) |
|
7 |
|
Interest |
|
(68) |
|
(81) |
|
Income tax |
|
(25) |
|
(14) |
|
Adjusted free cash flow |
|
(242) |
|
(88) |
|
1 |
|
A reconciliation to the most comparable GAAP measures can be found at the back of this release. |
|
2 |
|
Payable on May 31, 2018 to shareholders of record on May 17, 2018. |
|
3 |
|
A reconciliation to the most comparable GAAP measures can be found at the back of this release. |
|
4 |
|
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. |
|
5 |
|
Revenue and Adjusted EBITDA includes the impact of the adoption of IFRS 15 from January 1, 2018, of $42 million and $10 million respectively. |
|
6 |
|
Total exceptional items for the three months ended March 31, 2018 of $54 million include $34 million restructuring charges in Glass Packaging North America and Metal Packaging Europe, $9 million start-up costs in Glass Packaging North America and Metal Packaging Americas and $5 million asset impairment charges in Metal Packaging Americas. Exceptional items also include $6 million costs directly attributable to the integration of the Beverage Can Business and other transaction related costs. |
SOURCE Ardagh Group S.A.