EX-99.1 2 ex-99d1.htm EX-99.1 ard_Ex99_1

Exhibit 99.1

Picture 11

Ardagh Group S.A.

F-1

 

Exhibit 99.1

Picture 11

 

 

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Shareholders of Ardagh Group S.A.

 

Opinions on the Financial Statements and Internal Control over Financial Reporting

 

We have audited the accompanying consolidated statement of financial position of Ardagh Group S.A.

and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”).  We also have audited the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. 

 

Change in Accounting Principle

 

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019, the manner in which it accounts for revenues from contracts with customers in 2018 and the manner in which it accounts for financial instruments in 2018.

 

 

Basis for Opinions

 

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting.  Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

   

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 

 

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and

Ardagh Group S.A.

F-2

 

Exhibit 99.1

Picture 11

operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audits provide a reasonable basis for our opinions.

 

Definition and Limitations of Internal Control over Financial Reporting

 

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

 

 

/s/PricewaterhouseCoopers

Dublin, Ireland

 

February 20, 2020

 

We have served as the Company’s auditor since at least 1968, which includes periods before the Company became subject to SEC reporting requirements in 2017. We have not been able to determine the specific year we began serving as auditor of the Company or its predecessors.

 

 

Ardagh Group S.A.

F-3

 

Exhibit 99.1

Picture 11

ARDAGH GROUP S.A.

CONSOLIDATED INCOME STATEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2019

 

Year ended December 31, 2018

 

Year ended December 31, 2017

 

    

 

    

Before

    

 

    

 

 

    

Before

    

 

    

 

 

    

Before

    

 

    

 

 

 

 

 

 

exceptional

 

Exceptional

 

 

 

 

exceptional

 

Exceptional

 

 

 

 

exceptional

 

Exceptional

 

 

 

 

 

 

 

items

 

Items

 

Total

 

items

 

Items

 

Total

 

items

 

Items

 

Total

 

 

Note

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

 

 

 

 

 

Note 4

 

 

 

 

 

 

Note 4

 

 

 

 

 

 

Note 4

 

 

 

Revenue

 

3

 

6,660

 

 —

 

 

6,660

 

6,676

 

 —

 

 

6,676

 

6,390

 

 —

 

 

6,390

Cost of sales

 

 

 

(5,595)

 

(2)

 

 

(5,597)

 

(5,623)

 

(108)

 

 

(5,731)

 

(5,309)

 

(78)

 

 

(5,387)

Gross profit

 

 

 

1,065

 

(2)

 

 

1,063

 

1,053

 

(108)

 

 

945

 

1,081

 

(78)

 

 

1,003

Sales, general and administration expenses

 

 

 

(311)

 

(51)

 

 

(362)

 

(300)

 

(17)

 

 

(317)

 

(286)

 

(45)

 

 

(331)

Intangible amortization and impairment

 

9

 

(233)

 

 —

 

 

(233)

 

(237)

 

(186)

 

 

(423)

 

(237)

 

 —

 

 

(237)

Operating profit

 

 

 

521

 

(53)

 

 

468

 

516

 

(311)

 

 

205

 

558

 

(123)

 

 

435

Net finance expense

 

5

 

(456)

 

(203)

 

 

(659)

 

(457)

 

(22)

 

 

(479)

 

(506)

 

(132)

 

 

(638)

Share of post-tax loss in equity accounted joint venture

 

12

 

(10)

 

(39)

 

 

(49)

 

 —

 

 —

 

 

 —

 

 —

 

 —

 

 

 —

Profit/(loss) before tax

 

 

 

55

 

(295)

 

 

(240)

 

59

 

(333)

 

 

(274)

 

52

 

(255)

 

 

(203)

Income tax (charge)/credit

 

6

 

(41)

 

(3)

 

 

(44)

 

(67)

 

49

 

 

(18)

 

(47)

 

124

 

 

77

Profit/(loss) from continuing operations

 

 

 

14

 

(298)

 

 

(284)

 

(8)

 

(284)

 

 

(292)

 

 5

 

(131)

 

 

(126)

Profit from discontinued operation

 

25

 

215

 

1,527

 

 

1,742

 

211

 

(13)

 

 

198

 

201

 

(12)

 

 

189

Profit/(loss) for the year

 

 

 

229

 

1,229

 

 

1,458

 

203

 

(297)

 

 

(94)

 

206

 

(143)

 

 

63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) attributable to:

 

 

 

  

 

  

 

 

  

 

  

 

  

 

 

  

 

  

 

  

 

 

  

Equity holders

 

 

 

  

 

  

 

 

1,458

 

  

 

  

 

 

(94)

 

  

 

  

 

 

63

Non-controlling interests

 

 

 

  

 

  

 

 

 —

 

  

 

  

 

 

 —

 

  

 

  

 

 

 —

Profit/(loss) for the year

 

 

 

  

 

  

 

 

1,458

 

  

 

  

 

 

(94)

 

  

 

  

 

 

63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share:

 

 

 

  

 

  

 

 

  

 

  

 

  

 

 

  

 

  

 

  

 

 

  

Basic and diluted earnings/(loss) for the year attributable to equity holders

 

7

 

  

 

  

 

$

6.17

 

  

 

  

 

$

(0.40)

 

  

 

  

 

$

0.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share from continuing operations attributable to equity holders

 

7

 

 

 

 

 

$

(1.20)

 

 

 

 

 

$

(1.24)

 

 

 

 

 

$

(0.55)

 

 

The accompanying notes to the consolidated financial statements are an integral part of these consolidated financial statements.

 

 

 

 

Ardagh Group S.A.

F-4

 

Exhibit 99.1

Picture 11

 

ARDAGH GROUP S.A.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31,

 

    

 

    

2019

    

2018

    

2017

 

 

Note

 

$'m

 

$'m

 

$'m

 

 

 

 

 

 

 

 

 

Profit/(loss) for the year

 

 

 

1,458

 

(94)

 

63

 

 

 

 

 

 

 

 

 

Other comprehensive income/(expense):

 

  

 

 

 

  

 

  

Items that may subsequently be reclassified to income statement

 

  

 

 

 

  

 

  

Foreign currency translation adjustments:

 

  

 

 

 

  

 

  

—Arising in the year

 

  

 

47

 

75

 

(178)

 

 

  

 

47

 

75

 

(178)

Effective portion of changes in fair value of cash flow hedges:

 

  

 

 

 

  

 

  

—New fair value adjustments into reserve

 

  

 

54

 

54

 

(254)

—Movement out of reserve to income statement

 

  

 

(10)

 

(73)

 

258

—Movement in deferred tax

 

  

 

 1

 

 5

 

 1

 

 

 

 

45

 

(14)

 

 5

(Loss)/gain recognized on cost of hedging:

 

 

 

 

 

 

 

 

—New fair value adjustments into reserve

 

 

 

(8)

 

15

 

 —

—Movement out of reserve

 

 

 

(12)

 

(2)

 

 —

 

 

 

 

(20)

 

13

 

 —

 

 

 

 

 

 

 

 

 

Share of other comprehensive income in equity accounted joint venture

 

12

 

 5

 

 —

 

 —

 

 

 

 

 

 

 

 

 

Items that will not be reclassified to income statement

 

  

 

 

 

  

 

  

—Re-measurement of employee benefit obligations

 

21

 

(140)

 

11

 

49

—Deferred tax movement on employee benefit obligations

 

  

 

32

 

(1)

 

(6)

 

 

  

 

(108)

 

10

 

43

 

 

 

 

 

 

 

 

 

Share of other comprehensive income in equity accounted joint venture

 

12

 

 2

 

 —

 

 —

 

 

 

 

 

 

 

 

 

Total other comprehensive (expense)/income for the year

 

  

 

(29)

 

84

 

(130)

 

 

 

 

 

 

 

 

 

Total comprehensive income/(expense) for the year

 

  

 

1,429

 

(10)

 

(67)

 

 

 

 

 

 

 

 

 

Attributable to:

 

  

 

 

 

  

 

  

Equity holders

 

  

 

1,429

 

(10)

 

(67)

Non-controlling interests

 

  

 

 —

 

 —

 

 —

Total comprehensive income/(expense) for the year

 

  

 

1,429

 

(10)

 

(67)

 

 

 

 

 

 

 

 

 

Attributable to equity holders:

 

 

 

 

 

 

 

 

Continuing operations

 

 

 

(312)

 

(173)

 

(370)

Discontinued operation

 

 

 

1,741

 

163

 

303

Total comprehensive income/(expense) for the year

 

 

 

1,429

 

(10)

 

(67)

 

The accompanying notes to the consolidated financial statements are an integral part of these consolidated financial statements.

 

 

 

 

 

 

Ardagh Group S.A.

F-5

 

Exhibit 99.1

Picture 11

ARDAGH GROUP S.A.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

 

 

 

 

 

 

 

 

 

At December 31,

 

    

 

    

2019

    

2018

 

 

Note

 

$'m

 

$'m

 

 

 

 

 

 

 

Non-current assets

 

  

 

  

 

 

Intangible assets

 

9

 

2,884

 

3,601

Property, plant and equipment

 

10

 

2,677

 

3,388

Derivative financial instruments

 

20

 

 4

 

11

Deferred tax assets

 

13

 

204

 

254

Investment in material joint venture

 

12

 

375

 

 —

Other non-current assets

 

11

 

68

 

24

 

 

  

 

6,212

 

7,278

Current assets

 

  

 

 

 

  

Inventories

 

14

 

964

 

1,284

Trade and other receivables

 

15

 

734

 

1,053

Contract assets

 

16

 

151

 

160

Derivative financial instruments

 

20

 

 3

 

 9

Cash and cash equivalents

 

17

 

614

 

530

 

 

  

 

2,466

 

3,036

TOTAL ASSETS

 

  

 

8,678

 

10,314

 

 

 

 

 

 

 

Equity attributable to owners of the parent

 

  

 

 

 

  

Issued capital

 

18

 

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

 

20

 

5,524

 

7,729

Lease obligations

 

20

 

291

 

32

Employee benefit obligations

 

21

 

716

 

957

Derivative financial instruments

 

20

 

44

 

107

Deferred tax liabilities

 

13

 

344

 

543

Provisions

 

22

 

29

 

38

 

 

  

 

6,948

 

9,406

Current liabilities

 

  

 

 

 

  

Borrowings

 

20

 

22

 

114

Lease obligations

 

20

 

73

 

 4

Interest payable

 

  

 

60

 

81

Derivative financial instruments

 

20

 

17

 

38

Trade and other payables

 

23

 

1,628

 

1,983

Income tax payable

 

  

 

97

 

114

Provisions

 

22

 

48

 

83

 

 

  

 

1,945

 

2,417

TOTAL LIABILITIES

 

  

 

8,893

 

11,823

TOTAL EQUITY and LIABILITIES

 

  

 

8,678

 

10,314

 

 

The accompanying notes to the consolidated financial statements are an integral part of these consolidated financial statements.

 

 

Ardagh Group S.A.

F-6

 

Exhibit 99.1

Picture 11

ARDAGH GROUP S.A.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to the owner of the parent

 

 

 

 

 

    

 

    

 

    

 

    

Foreign

    

 

    

 

 

 

    

 

    

 

    

 

 

 

 

 

 

 

 

 

currency

 

Cash flow

 

Cost of

 

 

 

 

 

Non‑

 

 

 

 

Share

 

Share

 

Capital

 

translation

 

hedge

 

hedging

 

Retained

 

 

 

controlling

 

Total

 

 

capital

 

premium

 

contribution

 

reserve

 

reserve

 

reserve

 

earnings

 

Total

 

interests

 

equity

 

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

$'m

 

 

Note 18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At January 1, 2017

 

 —

 

274

 

485

 

189

 

(37)

 

 —

 

(3,093)

 

(2,182)

 

 3

 

(2,179)

Profit for the year

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

63

 

63

 

 —

 

63

Other comprehensive (expense)/income

 

 —

 

 —

 

 —

 

(178)

 

 5

 

 —

 

43

 

(130)

 

 —

 

(130)

Share re-organization (Note 18)

 

23

 

(23)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

Share issuance (Note 18)

 

 —

 

323

 

 —

 

 —

 

 —

 

 —

 

 —

 

323

 

 —

 

323

Conversion of related party loan (Note 18)

 

 —

 

716

 

 —

 

 —

 

 —

 

 —

 

 —

 

716

 

 —

 

716

Dividends paid (Note 26)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(165)

 

(165)

 

 —

 

(165)

Non-controlling interest in disposed business

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(2)

 

(2)

At December 31, 2017

 

23

 

1,290

 

485

 

11

 

(32)

 

 —

 

(3,152)

 

(1,375)

 

 1

 

(1,374)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At January 1, 2018 (i)

 

23

 

1,290

 

485

 

11

 

(48)

 

18

 

(3,139)

 

(1,360)

 

 1

 

(1,359)

Loss for the year

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(94)

 

(94)

 

 —

 

(94)

Other comprehensive income/(expense)

 

 —

 

 —

 

 —

 

75

 

(14)

 

13

 

10

 

84

 

 —

 

84

Hedging gains transferred to cost of inventory

 

 —

 

 —

 

 —

 

 —

 

(10)

 

 —

 

 —

 

(10)

 

 —

 

(10)

Share issuance

 

 —

 

 2

 

 —

 

 —

 

 —

 

 —

 

 —

 

 2

 

 —

 

 2

Dividends paid (Note 26)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(132)

 

(132)

 

 —

 

(132)

At December 31, 2018

 

23

 

1,292

 

485

 

86

 

(72)

 

31

 

(3,355)

 

(1,510)

 

 1

 

(1,509)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At January 1, 2019 (ii)

 

23

 

1,292

 

485

 

86

 

(72)

 

31

 

(3,401)

 

(1,556)

 

 1

 

(1,555)

Profit for the year

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

1,458

 

1,458

 

 —

 

1,458

Other comprehensive income/(expense)

 

 —

 

 —

 

 —

 

52

 

45

 

(20)

 

(106)

 

(29)

 

 —

 

(29)

Hedging losses transferred to cost of inventory

 

 —

 

 —

 

 —

 

 —

 

16

 

 —

 

 —

 

16

 

 —

 

16

Recycle to income statement on disposal of subsidiary (Note 25)

 

 —

 

 —

 

 —

 

27

 

 —

 

 —

 

 —

 

27

 

 —

 

27

Dividends paid (Note 26)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(132)

 

(132)

 

 —

 

(132)

At December 31, 2019

 

23

 

1,292

 

485

 

165

 

(11)

 

11

 

(2,181)

 

(216)

 

 1

 

(215)

 

The accompanying notes to the consolidated financial statements are an integral part of these consolidated financial statements.

 

(i)  Retained earnings at January 1, 2018 were re-presented by $13 million reflecting $20 million in respect of the impact of the adoption of IFRS 15 “Revenue from contracts with customers”, partly offset by $7 million in respect of the adoption of IFRS 9 “Financial instruments”. Further, following the adoption of IFRS 9 “Financial instruments”, the cash flow hedge reserve was re-presented by $16 million, and cost of hedging reserve was re-presented to $18 million.

 

(ii) Retained earnings at January 1, 2019 have been re-presented by $46 million reflecting the impact of the adoption of IFRS 16 ‘Leases’. Please refer to Note 2 for further details in respect of the impact of this recently adopted accounting standard.

 

Ardagh Group S.A.

F-7

 

Exhibit 99.1

Picture 11

ARDAGH GROUP S.A.

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31,

 

    

 

    

2019

    

2018

    

2017

 

 

Note

 

$'m

 

$'m

 

$'m

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

  

 

  

 

  

 

  

Cash generated from continuing operations

 

24

 

1,179

 

991

 

1,185

Interest paid

 

 

 

(417)

 

(414)

 

(458)

Income tax paid

 

  

 

(64)

 

(97)