ARDAGH GROUP S.A. LUXEMBOURG, April 27, 2017 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its financial results for the quarter ended March 31, 2017.
Highlights
Three months ended
(in EURm except per
share and
ratio data)
----------
March 31, March 31, Change Change PF(1)
2017 2016 % %
---- ---- --- ---
Revenue 1,844 1,218 51% 2%
Adjusted
EBITDA(2) 299 217 38% 2%
Operating
cash flow 6 29 (79%)
Free cash
flow (83) (43) (93%)
Adjusted
earnings per
share (EUR) 0.29 0.19 53%
Net debt to
LTM Adjusted
EBITDA(3) 5.3x 5.0x
Dividend per
share
declared
($)4 0.14 -
-- Revenue increased by 51% to EUR1,844 million with pro forma growth of
2%;
-- Adjusted EBITDA increased by 38% to EUR299 million, with pro forma
growth of 2%;
-- Group Adjusted EBITDA margin of 16.2%, unchanged on a pro forma basis;
-- Loss per share EUR0.28 (2016: profit per share EUR0.07);
-- Adjusted earnings per share of EUR0.29, up 53% on the prior year;
-- Operating cash flow of EUR6 million (2016: EUR29 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;
-- EUR3.0 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 $0.14
per common share, payable on May 31, 2017 to shareholders of record on
May 17, 2017.
Paul Coulson, Chairman, stated, "The Group has made a positive start to the year, with continued growth in revenue and Adjusted EBITDA, complemented by further progress integrating the Beverage Can acquisition. The successful completion of the Group's IPO, combined with timely refinancing activity, has further enhanced our capital structure and we ended the quarter with net debt of approximately five times our unchanged full year Adjusted EBITDA expectations. We remain focused on continued progress over the course of 2017."
Summary Financial Information
Three months ended March 31
(in EUR millions, except EPS, ratios and
percentages)
----------------------------------------
March 31, March 31,
2017 2016
---- ----
Revenue 1,844 1,218
(Loss)/profit for the period (59) 14
Adjusted profit for the period 61 38
Adjusted EBITDA 299 217
Adjusted EBITDA margin 16.2% 17.8%
Earnings per share (EUR) (0.28) 0.07
Adjusted earnings per share (EUR) 0.29 0.19
LTM pro forma Adjusted EBITDA 1,340 947
Net debt 7,113 4,763
Cash and available liquidity5 1,346 772
Net debt to LTM Adjusted EBITDA 5.3x 5.0x
Cash generated from operations 107 79
Operating cash flow 6 29
Free cash flow (83) (43)
Dividend per share declared ($) 0.14 -
Operating and Free Cash Flow
Three months ended
------------------
March 31, March 31,
2017 2016
---- ----
EURm EURm
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)
--- ---
The non-GAAP information in the above tables has been derived from the Consolidated Interim Financial Statements and related notes.
Financial Performance Review
Bridge of 2016 reported revenue to 2017 reported revenue
Three months ended March 31
Metal Glass Glass Group
Packaging Packaging Packaging
Metal North
Packaging Americas Europe America
Europe
------
EURm EURm EURm EURm EURm
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 Glass Glass Group
Packaging Packaging Packaging
Metal North
Packaging Americas Europe America
Europe
------
EURm EURm EURm EURm EURm
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%
------------------------------------- ---- ---- ---- ---- ----
Group
Revenue in the quarter ended March 31, 2017 increased by 51% to EUR1,844 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 EUR299 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 EUR688 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 EUR19 million organic growth, partly offset by EUR10 million adverse currency translation effects. Adjusted EBITDA increased by 76% to EUR104 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 EUR405 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 EUR35 million to EUR45 million in the quarter ended March 31, 2017, compared with the same period last year. Growth primarily reflected a EUR29 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 EUR319 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 EUR64 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 EUR432 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 EUR86 million in the first quarter, compared with the same period in 2016. Excluding a positive currency translation effect of EUR2 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 EUR3.0 billion in new notes. This included EUR750 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 EUR7.1 billion.
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 EUR7.7 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.
Condensed Consolidated Interim Financial Statements
Consolidated Interim Income Statement
Three months ended March 31, 2017 Three months ended March 31, 2016
--------------------------------- ---------------------------------
Before Exceptional Total Before Exceptional Total
exceptional items EURm exceptional items EURm
items EURm Unaudited items EURm Unaudited
EURm Unaudited EURm Unaudited
Unaudited 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
(100) (13) (113) (66) (2) (68)
Sales, general and administration expenses
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 (EUR0.28) EUR0.07
equity holders of the parent
----------------------------
Consolidated Interim Statement of Financial Position
March 31, 2017 December 31, 2016
EURm EURm
Unaudited 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
------ ------
Consolidated Interim Statement of Cash Flows
Three months ended
------------------
March 31, 2017 March 31, 2016
EURm EURm
Unaudited 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
----- ---
Reconciliation of (loss)/profit to Adjusted EBITDA
Three months ended
------------------
March 31, 2017 March 31, 2016
EURm EURm
---- ----
(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
-------------- --------------
EURm Per share EURm Per share
EUR EUR
---- --------- ---- ---------
(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 March 31, 2016
EURm EURm
---- ----
(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
--- ---
_________________________
(1) Change pro forma reflects the Beverage Can business acquisition completed June 30, 2016.
(2) 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.
(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.
(5) Included within cash and available liquidity at March 31, 2017 are net IPO proceeds (EUR313 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 (EUR406 million).
(6) Total exceptional items include debt refinancing and settlement costs of EUR81m and costs directly attributable to the acquisition and integration of the Beverage Can Business and IPO and other transaction related costs of EUR13m.
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SOURCE Ardagh Group S.A.
