ARD - Ardagh Group S.A. - Fourth Quarter and Full Year 2018 Results

LUXEMBOURG, Feb. 21, 2019 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its results for the fourth quarter and year ended December 31, 2018.

Paul Coulson, Chairman and Chief Executive, said "Revenue and Adjusted EBITDA increased in the quarter, despite an adverse currency headwind, with volume growth in three of our four divisions. Metal packaging performed well in the quarter, with Adjusted EBITDA growth of 12% and notable strength in beverage can demand during both the quarter and full year. Glass packaging in Europe delivered another strong performance in 2018, with broad-based volume growth. Adjusted EBITDA for the quarter increased by 5% and market conditions are positive. In Glass North America, our ongoing initiatives to improve financial performance are proceeding as planned."    

• Revenue increased by 6% to $9.1 billion for the full year, with constant currency growth of 3%;
• Adjusted EBITDA for the full year of $1,478 million (2017: $1,508 million);
• Loss per share of $0.40 for the year, with Adjusted earnings per share of $1.69 (2017: $1.84);
• Revenue and Adjusted EBITDA growth of 4% for the fourth quarter at constant currency;
• Volume/mix growth of 1% for the full year and 2% for the fourth quarter;
• Global beverage can volume growth of 8% for the quarter and 5% for the year;
• Glass packaging volume/mix growth of 2% in Europe for the quarter, offset by a 3% decline in North America;
• Beverage can strategic projects completed on plan; short payback project spending of $65 million in 2018;
• Adjusted free cash flow of $441 million in 2018 ³;
• Leverage reduced to 5.0x at December 2018, with no maturities before late-2022;
• 2019 outlook: Full year Adjusted EBITDA of at least $1.5 billion, with Adjusted free cash flow of approximately $450 million³ and Adjusted earnings per share of $1.60 — $1.75. First quarter Adjusted EBITDA of approximately $350 million.

Summary Financial Information

Financial Performance Review
Bridge of 2017 to 2018 Revenue and Adjusted EBITDA

Full Year

Revenue increased by $501 million, or 6% to $9,097 million in 2018, compared with $8,596 million in the year ended December 31, 2017. Revenue growth reflected higher selling prices driven by the pass through of higher input costs, increased volume/mix effects of 1% and favorable currency translation effects of $220 million.

Adjusted EBITDA declined by $30 million, or 2%, to $1,478 million in the year ended December 31, 2018. The decline principally reflected lower Adjusted EBITDA in Glass Packaging North America, which was impacted by lower volumes, in particular in the beer end-market, as well as by increased freight and logistics costs. This was partly offset by Adjusted EBITDA growth in Metal Packaging and in Glass Packaging Europe, and by favorable translation effects of $35 million.

Fourth Quarter

Group

Revenue of $2,136 million for the quarter ended December 31, 2018 represented an increase of 1% at actual exchange rates and, 4% at constant currency, compared with the same period last year. The increase in revenue reflected the pass through of increased input costs, volume/mix growth of 2%, including IFRS 15 effects, partly offset by unfavorable currency translation effects of $44 million. Fourth quarter Adjusted EBITDA of $338 million increased by 1% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 4%, with growth in three of our four divisions, partly offset by lower earnings in Glass Packaging North America.

Metal Packaging Europe

Revenue of $826 million increased by 3% in the three-month period ended December 31, 2018, compared with the same period last year. On a constant currency basis, revenue increased by 6%, due mainly to volume/mix growth, including IFRS 15 effects and the pass through of higher input costs. Adjusted EBITDA for the quarter of $123 million increased by 12%, at constant currency, compared with same period last year. Growth reflected reduced operating costs including a pension-related credit of $12 million, partly offset by higher input costs.

Metal Packaging Americas

Revenue increased by 4% to $532 million in the fourth quarter of 2018, compared with the same period last year. The increase was attributable to favorable volume/mix effects and the pass through of higher input costs, partly offset by IFRS 15 effects. Adjusted EBITDA of $82 million increased by 21% compared with the same period last year, reflecting favorable volume/mix effects and ongoing cost reductions, partly offset by higher input costs.

Glass Packaging Europe

Revenue of $387 million decreased by 1% at actual currency rates and increased by 3% at constant exchange rates, in the three-month period ended December 31, 2018, compared with the same period last year. Revenue growth principally reflected favorable glass packaging volume/mix effects and the pass through of higher input costs, partly offset by lower glass engineering activity. Adjusted EBITDA for the quarter of $84 million increased by 11% at constant exchange rates, compared with the same period last year, mainly due to favorable volume/mix effects in glass packaging.

Glass Packaging North America

Revenue decreased by 1% to $391 million in the fourth quarter, compared with the same period last year, principally reflecting lower volumes in the beer end-market, partly offset by the pass through of higher input costs. Adjusted EBITDA decreased by 32% to $49 million in the fourth quarter, compared with the same period in 2017, mainly as a result of lower volume/mix effects and the cost of planned production downtime.

Earnings Webcast and Conference Call Details

Ardagh Group S.A. (NYSE: ARD) will hold its fourth quarter 2018 earnings webcast and conference call for investors at 3 p.m. GMT (10 a.m. ET) on February 21, 2019. Please use the following webcast link to register for this call:

Webcast registration and access:

https://event.on24.com/wcc/r/1912939-1/689100224E03D568780CD46B2907F188

Conference call dial in:

United States: +1855 85 70686
International: +44 33 3300 0804

Participant pin code: 24927617#

Slides and annual report

Supplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.

The Group's 2018 annual report on Form 20-F is expected to be filed in March 2019.

The 2018 annual report on Form 20-F for ARD Finance S.A., issuer of the Senior Secured Toggle Notes due 2023, will also be filed in March 2019 and will be 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 over 100 facilities in 22 countries across 5 continents, employing approximately 23,000 people and has global sales of approximately $9.1 billion.

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