EX-99.1 2 ss40416_ex9901.htm PRESS RELEASE
               
             
Ardagh Group S.A. – First Quarter 2017 Earnings Release
       
Ardagh Group S.A. (NYSE: ARD) today announced its financial results for the quarter ended March 31, 2017.
            
Highlights
                
   
Three months ended
(in €m except per share and ratio data)
                
   
March 31,
2017
    
March 31,
2016
    
Change
%
    
Change PF1
%
    
                           
 Revenue
    
1,844
      
1,218
      
51
%
    
2
%
 
 Adjusted EBITDA2
    
299
      
217
      
38
%
    
2
%
 
 Operating cash flow
    
6
      
29
      
(79
%)
          
 Free cash flow
    
(83
)
    
(43
)
    
(93
%)
          
 Adjusted earnings per share (€)
    
0.29
      
0.19
      
53
%
          
 Net debt to LTM Adjusted EBITDA3
    
5.3
x
    
5.0
x
    
 
 
          
 Dividend per share declared ($)4     0.14       -                    
                                   

·
Revenue increased by 51% to €1,844 million with pro forma growth of 2%;
·
Adjusted EBITDA increased by 38% to €299 million, with pro forma growth of 2%;
·
Group Adjusted EBITDA margin of 16.2%, unchanged on a pro forma basis;
·
Loss per share €0.28 (2016: profit per share €0.07);
·
Adjusted earnings per share of €0.29, up 53% on the prior year;
·
Operating cash flow of €6 million (2016: €29 million), reflecting improvements in the underlying business, offset by increased seasonality following the Beverage Can acquisition;
·
Initial public offering (“IPO”) on the New York Stock Exchange (“NYSE”) completed in March 2017;
·
€3.0 billion refinancing activity in the quarter yielding further interest savings;
·
$300 million of cash resources used to repay debt;
·
The board of directors has declared a quarterly cash dividend of $0.14 per common share, payable on May 31, 2017 to shareholders of record on May 17, 2017.
         
          
Paul Coulson, Chairman, stated, “The Group has made a positive start to the year, with continued growth in revenue and Adjusted EBITDA, complemented by further progress integrating the Beverage Can acquisition. The successful completion of the Group’s IPO, combined with timely refinancing activity, has further enhanced our capital structure and we ended the quarter with net debt of approximately five times our unchanged full year Adjusted EBITDA expectations. We remain focused on continued progress over the course of 2017.”
     
1 Change pro forma reflects the Beverage Can business acquisition completed June 30, 2016.
2 Adjusted EBITDA is defined on page 4 of this release.
3 2017 reflects LTM Adjusted EBITDA on a pro forma basis.
4 Payable on May 31, 2017 to shareholders of record on May 17, 2017.
        
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Summary Financial Information
            
   
Three months ended March 31
(in € millions, except EPS, ratios and percentages)
    
   
March 31,
2017
    
March 31,
2016
    
               
               
Revenue
    
1,844
      
1,218
    
(Loss)/profit for the period
    
(59
)
    
14
    
Adjusted profit for the period
    
61
      
38
    
Adjusted EBITDA
    
299
      
217
    
Adjusted EBITDA margin
    
16.2
%
    
17.8
%
  
Earnings per share (€)
    
(0.28
)
    
0.07
    
Adjusted earnings per share (€)
    
0.29
      
0.19
    
LTM pro forma Adjusted EBITDA
    
1,340
      
947
    
                   
Net debt
    
7,113
      
4,763
    
Cash and available liquidity5
    
1,346
      
772
    
Net debt to LTM Adjusted EBITDA
    
5.3
x
    
5.0
x
  
                   
Cash generated from operations
    
107
      
79
    
Operating cash flow
    
6
      
29
    
Free cash flow
    
(83
)
    
(43
)
  
Dividend per share declared ($)
    
0.14
      
-
    
                   
              
Operating and Free Cash Flow
            
 
  
Three months ended
    
 
  
March 31,
    
March 31,
    
 
  
2017
    
2016
    
 
  
€m
 
  
€m
 
  
Reported Adjusted EBITDA
    
299
      
217
    
Movement in working capital
    
(181
)
    
(122
)
  
Capital expenditure
    
(109
)
    
(64
)
  
Exceptional restructuring paid
    
(3
)
    
(2
)
  
Operating Cash Flow
    
6
      
29
    
Interest paid
    
(76
)
    
(66
)
  
Income tax
    
(13
)
    
(6
)
  
Free Cash Flow
    
(83
)
    
(43
)
  
     
    
5 Included within cash and available liquidity at March 31, 2017 are net IPO proceeds (€313 million) and proceeds from notes issued on March 8, 2017, used to redeem in full the principal amount outstanding of the $415 million 6.750% Senior Notes on April 10, 2017 (€406 million).
 
The non-GAAP information in the above tables has been derived from the Consolidated Interim Financial Statements and related notes. 
 
 
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Financial Performance Review
     
Bridge of 2016 reported revenue to 2017 reported revenue

 
                                
   
Three months ended March 31
    
         
 
  
Metal
Packaging Europe
    
Metal
Packaging
Americas
    
Glass
Packaging
Europe
    
Glass
Packaging North America
    
Group
    
 
  
 
€m
 
  
€m
 
  
 
€m
  
 
€m
 
  
 
€m
 
  
Reported revenue 2016
    
384
      
91
      
321
      
422
      
1,218
    
Acquisition
    
295
      
289
      
-
      
-
      
584
    
Pro forma revenue 2016
    
679
      
380
      
321
      
422
      
1,802
    
Organic
    
19
      
10
      
9
      
10
      
48
    
Reclassification
    
-
      
-
      
-
      
(11
)
    
(11
)
  
FX translation
    
(10
)
    
15
      
(11
)
    
11
      
5
    
Reported revenue 2017
    
688
      
405
      
319
      
432
      
1,844
    
 
                                          
          
Bridge of 2016 reported Adjusted EBITDA to 2017 reported Adjusted EBITDA
                 
 
                                
   
Three months ended March 31
    
         
 
  
Metal
Packaging Europe
    
Metal
Packaging
Americas
    
Glass
Packaging
Europe
    
Glass
Packaging North America
    
Group
    
 
  
 
€m (except percentages)
  
 
€m (except percentages)
  
 
€m (except percentages)
  
€m (except percentages)
 
  
 
€m (except percentages)
 
  
Reported Adjusted EBITDA 2016
    
59
      
10
      
63
      
85
      
217
    
Acquisition
    
46
      
29
      
-
      
-
      
75
    
Pro forma Adjusted EBITDA 2016
    
105
      
39
      
63
      
85
      
292
    
Organic
    
1
      
4
      
3
      
(1
)
    
7
    
FX translation
    
(2
)
    
2
      
(2
)
    
2
      
-
    
Reported Adjusted EBITDA 2017
    
104
      
45
      
64
      
86
      
299
    
 
                                          
Reported Adjusted EBITDA 2017 margin
    
15.1
%
    
11.1
%
    
20.1
%
    
19.9
%
    
16.2
%
  
Pro forma Adjusted EBITDA 2016 margin
    
15.5
%
    
10.3
%
    
19.6
%
    
20.1
%
    
16.2
%
  

 
 
 

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Group
Revenue in the quarter ended March 31, 2017 increased by 51% to €1,844 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 3%.  First quarter Adjusted EBITDA of €299 million increased by 38%, compared with the same period last year. Growth reflected a contribution from the Beverage Can Acquisition, as well as pro forma growth of 2% compared with the same period last year.
          
Metal Packaging Europe
Revenue increased by 79%, to €688 million in the three month period ended March 31, 2017, compared with the same period last year. Growth reflected the inclusion of the Beverage Can Acquisition, as well as 3% or €19 million organic growth, partly offset by €10 million adverse currency translation effects. Adjusted EBITDA increased by 76% to €104 million in the three month period ended March 31, 2017, compared with the same period last year. Growth in Adjusted EBITDA reflected the Beverage Can Acquisition, as well as pro forma constant currency growth of 1%.
           
Metal Packaging Americas
Revenue increased by 345% to €405 million in the first quarter of 2017, compared with the same period last year. Revenue growth reflected a 3% organic increase and the inclusion of the Beverage Can Acquisition, as well as positive foreign currency translation effects. Adjusted EBITDA increased by €35 million to €45 million in the quarter ended March 31, 2017, compared with the same period last year. Growth primarily reflected a €29 million increase from the Beverage Can Acquisition, as well as 10%organic Adjusted EBITDA growth and positive foreign currency translation effects.
               
Glass Packaging Europe
Revenue declined by 1% to €319 million in the three month period ended March 31, 2017, compared with the same period last year, as organic volume growth was offset by adverse currency translation effects. Adjusted EBITDA for the quarter increased by 2% to €64 million in the first quarter, compared with the same period last year, with growth of 5% at constant currency rates.
                
Glass Packaging North America
Revenue increased by 2% to €432 million in the first quarter, compared with the same period last year.  On a constant currency basis, revenue was marginally lower. Adjusted EBITDA increased by 1% to €86 million in the first quarter, compared with the same period in 2016. Excluding a positive currency translation effect of €2 million, Adjusted EBITDA was marginally lower than the same period last year.
                  
Financing Activity
In March, the Group completed its offering of 18.63 million Class A shares at $19.00 per share on the NYSE. The Group expects to use the net proceeds of approximately $319 million for the partial redemption of the 4.250% First Priority Senior Secured Notes due 2022.
                
The Group took advantage of attractive financing conditions during the quarter, issuing an aggregate €3.0 billion in new notes. This included €750 million of 7-year senior secured debt at 2.75%, $715 million of senior unsecured debt at 4.25% due 2022 and $1.7 billion of 8-year unsecured debt at 5.75-6.00%. Proceeds were used, together with cash resources of $300 million, to repay all debt maturities arising prior to 2021, materially enhancing the Group’s debt maturity profile and resulting in significant annualized interest savings.
               
Net debt at March 31, 2017 was €7.1 billion.
 
Adjusted EBITDA
Adjusted EBITDA is defined as (loss)/profit 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.
 
 
 
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Conference Call Details

Ardagh Group S.A. (NYSE: ARD) will hold its first quarter 2017 earnings call for investors at 3 p.m. BST (10 a.m. ET) on April 27, 2017. Please use the following link to register for this call:

http://event.onlineseminarsolutions.com/r.htm?e=1401478&s=1&k=F6E4B8A18EA6CFD1A9CD8D89517905B2
 
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.
 
 
April 27, 2017
 
Contacts
 
Investors:
Email: john.sheehan@ardaghgroup.com
 
Media:
 
Pat Walsh, Murray Consultants
Tel.: +1 646 776 5918 / +353 87 2269345
Email: pwalsh@murrayconsult.ie
 


 
 
 
 
 
 
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Condensed Consolidated Interim Financial Statements
 
Consolidated Interim Income Statement
                              
   
Three months ended March 31, 2017
    
Three months ended March 31, 2016
    
   
Before
exceptional
items
€m
Unaudited
    
Exceptional
items
€m
Unaudited
    
Total
€m (except per share data)
Unaudited
    
Before
exceptional
items
€m
Unaudited
    
Exceptional
items
€m
Unaudited
    
Total
€m (except per share data)
Unaudited
    
                                       
Revenue
    
1,844
      
-
      
1,844
      
1,218
      
-
      
1,218
    
Cost of sales
    
(1,534
)
    
-
      
(1,534
)
    
(1,006
)
    
(3
)
    
(1,009
)
  
Gross profit/(loss)
    
310
      
-
      
310
      
212
      
(3
)
    
209
    
 
Sales, general and administration expenses
    
(100
)
    
(13
)
    
(113
)
    
(66
)
    
(2
)
    
(68
)
  
Intangible amortization
    
(63
)
    
-
      
(63
)
    
(27
)
    
-
      
(27
)
  
Operating profit/(loss)
    
147
      
(13
)
    
134
      
119
      
(5
)
    
114
    
Finance expense
    
(121
)
    
(81
)
    
(202
)
    
(83
)
    
-
      
(83
)
  
Profit/(loss) before tax
    
26
      
(94
)
    
(68
)
    
36
      
(5
)
    
31
    
Income tax (charge)/credit
    
(10
)
    
19
      
9
      
(17
)
    
-
      
(17
)
  
Profit/(loss) for the year
    
16
      
(75
)
    
(59
)
    
19
      
(5
)
    
14
    
                                                   
(Loss)/profit attributable to:
                                                  
Owners of the parent
                    
(59
)
                    
14
    
Non-controlling interests
                    
-
                      
-
    
(Loss)/profit for the year
                    
(59
)
                    
14
    
                                                   
(Loss)/profit per share:
                                                  
Basic (loss)/profit for the year attributable to ordinary equity holders of the parent
                    
(€0.28
)
                    
€0.07
    
                                                   
 
 
 
 
 
 
 
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Consolidated Interim Statement of Financial Position
              
     
March 31, 2017
€m
Unaudited
    
December 31, 2016
€m
Audited
    
 
Non-current assets
              
 
Intangible assets
    
3,800
      
3,888
    
 
Property, plant and equipment
    
2,916
      
2,927
    
 
Derivative financial instruments
    
95
      
124
    
 
Deferred tax assets
    
259
      
259
    
 
Other non-current assets
    
18
      
20
    
       
7,088
      
7,218
    
 
Current assets
                  
 
Inventories
    
1,230
      
1,125
    
 
Trade and other receivables
    
1,258
      
1,159
    
 
Derivative financial instruments
    
28
      
11
    
 
Restricted cash
    
28
      
27
    
 
Cash and cash equivalents
    
1,054
      
745
    
       
3,598
      
3,067
    
 
TOTAL ASSETS
    
10,686
      
10,285
    
                     
 
Equity attributable to owners of the parent
                  
 
Issued capital
    
22
      
-
    
 
Share premium
    
1,090
      
136
    
 
Capital contribution
    
431
      
431
    
 
Other reserves
    
(282
)
    
(324
)
  
 
Retained earnings
    
(2,424
)
    
(2,301
)
  
       
(1,163
)
    
(2,058
)
  
 
Non-controlling interests
    
1
      
2
    
 
TOTAL EQUITY
    
(1,162
)
    
(2,056
)
  
                     
 
Non-current liabilities
                  
 
Borrowings
    
7,900
      
8,142
    
 
Employee benefit obligations
    
906
      
904
    
 
Deferred tax liabilities
    
687
      
698
    
 
Related party borrowings
    
-
      
673
    
 
Provisions
    
49
      
55
    
       
9,542
      
10,472
    
 
Current liabilities
                  
 
Borrowings
    
390
      
8
    
 
Interest payable
    
105
      
81
    
 
Derivative financial instruments
    
5
      
8
    
 
Trade and other payables
    
1,602
      
1,534
    
 
Amounts payable to parent companies
    
6
      
-
    
 
Income tax payable
    
132
      
169
    
 
Provisions
    
66
      
69
    
       
2,306
      
1,869
    
 
TOTAL LIABILITIES
    
11,848
      
12,341
    
                     
 
TOTAL EQUITY and LIABILITIES
    
10,686
      
10,285
    
                     
 
 
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Consolidated Interim Statement of Cash Flows
              
     
Three months ended
    
     
March 31, 2017
€m
Unaudited
    
March 31, 2016
€m
Unaudited
    
 
Cash flows from operating activities
              
 
Cash generated from operations
    
107
      
79
    
 
Interest paid
    
(76
)
    
(66
)
  
 
Income tax paid
    
(13
)
    
(6
)
  
 
Net cash from operating activities
    
18
      
7
    
                     
 
Cash flows from investing activities
                  
 
Purchase of property, plant and equipment
    
(106
)
    
(62
)
  
 
Purchase of software and other intangibles
    
(3
)
    
(2
)
  
 
Net cash used in investing activities
    
(109
)
    
(64
)
  
                     
 
Cash flows from financing activities
                  
 
Proceeds from borrowings
    
3,049
      
-
    
 
Repayment of borrowings
    
(2,818
)
    
(2
)
  
 
Proceeds from share issuance
    
313
      
-
    
 
Dividend paid
    
(64
)
    
-
    
 
Early redemption premium costs paid
    
(54
)
    
-
    
 
Deferred debt issue costs paid
    
(17
)
    
-
    
 
Net cash inflow/(outflow) from financing activities
    
409
      
(2
)
  
                     
 
Net increase/(decrease) in cash and cash equivalents
    
318
      
(59
)
  
                     
 
Cash and cash equivalents at the beginning of the year
    
772
      
553
    
 
Exchange losses on cash and cash equivalents
    
(8
)
    
(6
)
  
 
Cash and cash equivalents at the end of the year
    
1,082
      
488
    
                     








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Reconciliation of (loss)/profit to Adjusted EBITDA
   
Three months ended
  
   
March 31, 2017
€m
    
March 31, 2016
€m
  
(Loss)/profit for the period
    
(59
)
    
14
  
Income tax (credit)/expense
    
(9
)
    
17
  
Net finance expense
    
202
      
83
  
Depreciation and amortization
    
152
      
98
  
Exceptional operating items
    
13
      
5
  
Adjusted EBITDA
    
299
      
217
  
                     
Reconciliation of (loss)/profit to Adjusted profit and EPS to Adjusted EPS
                         
   
March 31, 2017
    
March 31, 2016
  
   
 
€m
 
  
Per share €
    
 
€m
  
Per share €
  
(Loss)/profit for the period
    
(59
)
    
(0.28
)
    
14
      
0.07
  
Total exceptional items6
    
94
      
0.45
      
5
      
0.02
  
Tax credit associated with exceptional costs
    
(19
)
    
(0.09
)
    
-
      
-
  
Intangible amortization
    
63
      
0.30
      
27
      
0.13
  
Tax credit associated with intangible amortization
    
(18
)
    
(0.09
)
    
(8
)
    
(0.04
)
Adjusted profit for the period
    
61
      
0.29
      
38
      
0.19
  
                   
Cash generated from operations
   
Three months ended
  
   
March 31, 2017
€m
    
March 31, 2016
€m
  
(Loss)/profit for the period
    
(59
)
    
14
  
Income tax (credit)/expense
    
(9
)
    
17
  
Net finance expense
    
202
      
83
  
Depreciation and amortization
    
152
      
98
  
Exceptional operating items
    
13
      
5
  
Movement in working capital
    
(181
)
    
(122
)
Exceptional IPO, acquisition-related, disposal and plant start-up costs paid
    
(8
)
    
(14
)
Exceptional restructuring paid
    
(3
)
    
(2
)
Cash generated from operations
    
107
      
79
  
 

6 Total exceptional items include debt refinancing and settlement costs of €81m and costs directly attributable to the acquisition and integration of the Beverage Can Business and IPO and other transaction related costs of €13m.

 
 
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