AMBP - Earnings call 4 2023 | Ardagh Metal Packaging S.A.

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Operator

Welcome to the Ardagh Metal Packaging S.A. Fourth Quarter 2023 Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Stephen Lyons, Investor Relations. ahead. go Please

Stephen Lyons

for and AMP's for operator, Call, Thank for Bourne, today Financial earnings you follows full Chief and Thank I'm AMP's Executive year. Metal welcome, Officer; Packaging's today joined release AMP's of Ardagh earlier Oliver Earnings fourth Fourth joining quarter the the Graham, you, by publication everybody. the Chief Quarter Officer. which David XXXX and

forward-looking outlook. website around AMP's questions, your will provide AMP's we measures release. I include for will performance vary remarks fourth measures include from results found to of and non-IFRS Remarks earnings Please use Actual to in release, financial Before can moving reconciliation AMP's the turn such to materially Oliver and will the earnings measures. of some first non-IFRS disclaimer forward-looking materials at related be Graham. IFRS statements introductory and of financial financial review over statements today certain call quarter on could AMP's www.ardaghmetalpackaging.com. now statements. the AMP's details

Oliver Graham

in position XXXX navigated represents team for business business footprint transition our a on and inventories of growth decisive year the our and to Stephen. demand for action challenging as took macro a you, European environment the Thank the fourth context, Despite X% beyond. and and XXXX quarter. in achieved in demand, particular, record volumes, grew the market full by and the year softer which we shipment revenues global X% for

strong percentage, by mid-teens Our almost growth both Americas regions. segment at grew driven in an

production encouraging growth experienced second with against strong the which a which but the fixed an prior full Our volume effects by was decline also was offset actions a of resulted weakness in resolved improvements year customer comparable. during the more unfavorable and due absorption. In in restructuring and initial a Europe in in stronger on QX mix, pass-through this half half consumer activity second inflation but trends customer in recovery customers cost energy year, that included with to now sequential shipments shipment below year our mix impacted the expectations and significant is to shipment Brazil, weak than

working AMP robust challenging environment of in year in Our generated ending in team's resulting cash management a position. tripling the operating from activities, a efforts on near liquidity this capital

performance negatively Our by our fourth reflecting view clear and below be effects retail well a quarter towards performance by scanner mix stronger was versus positive, towards trends, and label. performance There geography, volume value the and a Europe, largely of with and shipments the was more divergence in were by of to partly Americas. European what expectations was which we and the impacted a weaker-than-expected destocking customer in actions. which end offset customer private deteriorated brands quarter gravitation

regions, absorption advantages. of growth are moderating the all Our share stronger win for XXXX reflects leading package continues performance confidence in choice to in a and volume our our innovation and to actions. beverage by as to footprint in improved addition cost the expectations in its customer sustainability Inflationary pressures can

term. optimize a benefit mix in will the growth well global diverse strong from appropriately base and our earnings more facility Weissenthurm, over and placed a lines previously to longer-term In at manufacturing capacity committed utilization as North indicated. balanced The we through further will of customer a steel These relationships, improvement. With our drive X action network network our which which remaining to with of well-invested should curtailment normalization drive and demand, as America, We are year Germany this our to position. demand end we appropriate. network the earnings Whitehouse, improve in balancing closed X mix the Ohio permanent month, actions of medium remain lines closed in a

recently contribute metal report with further for announced alongside progress highlighted action quarter, for further of during a XXXX. the other on AMP, Novelis sustainability we publication at North supply initiatives. participated from in XXXX sustainability will greenfield on call industry COP The supply to its the progress in stakeholders, development decarbonization agreement sustainability our During our America look strategy. forward you towards updating AMP's XX, on and

on our AMP's with now and lower recovery, This volume in offset and strong by recorded in cash apparent quarter operating than shipments of our the which caution EBITDA reflected higher million approaching growth had growth customer adjusted fourth particular, quarter results. Americas for quarter fourth of in pass-through the of Turning We year decline in partly with input capital, on customers our attention flow input of the offsetting expenditure. to X%, reflected a decline the an with and X% increase ongoing year, the expectation, for cash a favorable in We million $XXX more cost by was can a the our quarter beverage inventory [Technical costs. consumer $X.X focus performance team's reflected billion, were reduction than offset which to in in $XXX mix capital XX% a and excess X% Adjusted Difficulty] of million weak prior the down management Americas, backdrop. Total Europe. destocking prior Europe XX% year. in working full $XXX higher against

reflected for shipments lower Revenue by in million, America, to to quarter the quarter fourth the the North partly XX% and XX% costs. growth Americas year. grew input increased AMP's by X% results segment. now In for offset Turning shipments the which $XXX by in by

Our line our diverse the high-growth the from the the was in arising customer as non-alcoholic towards from record growth including broadly drinks beverages, our energy commitments contract program portfolio outperformance weighted well segment. versus our of reflects as investment expectations, with strong mix which functional contribution drove shipment profitability. market This

growth our costs a at input percentage moderate, as high remained we and constrained a mid- year prior low market. by experienced our the stabilizes for full network. trends increase in pipeline lower We retail XXXX, our a in forecast supports XXXX, the activity Brazil, Looking American single-digit X% in improved norms. increased our wage Brazil growth retail historical to strong pricing through growth curtailment the than Industry of in North expect for demand of by by real weak pricing and shipments growth into of the This QX, against consumers in market our contracted encouraging a this in somewhat key business by grew was customers. growth levels balance far shipments outperforming overall, so we early and fourth mid-single-digit continue versus see number ahead improvement business, of promotional the year shipments year, slightly momentum We growth. with the and for which higher We're our XX% demand sales good further and our XXXX industry. In market. annual percentage encouraged single-digit XXXX. in of the for quarter Shipments modest shipments by capacity momentum comparable, to forecast

in the in mid-single-digit In Europe, to in in in Americas the basis commitments. XX% the last partly will XX% by quarter. We in increased volumes as the unfulfilled constant for period the by started sharply the fourth have but pulling contribution term quarter growth from years. year Americas may the unfavorable favorable forward million X% in growth this end declined XXXX, year EBITDA by recovery. Shipments near business $XXX principally improved X a with was drive of higher to by over the a The fixed which on currency we which prior mix a XXXX. In had customer given in growth million we absorption year, date softness year from volume growth for the EBITDA of XXXX, market Carnival are offset adjusted confident contractual demand. Adjusted included input the volumes expect has the cautious prior shipments offset the volume due higher contribution of effects, the fourth impact cost highlight revenue quarter potential percentage. and by the but quarter compared as decreased Shipments same remain earlier sales the the in decelerated would $XXX cost strongly to a towards on effects, some

took which fixed balance Reduced efficiency. and lines network the at in For remains the We will a deterioration. also activity fixed the over trends versus reflected currency constant at effects than review XX% destocking quarter. trends footprint increased second resulted to into by cost half offset the with of of showed the by steel asset. we supply in stronger full an due financial retail but with keep decreased experienced at customer on recovery customers [ volumes pressures input took improve declined levels experience under rightsized first to shipments the more ] than volume production in the demand reduced from towards the finished this $XX Europe downtime cost continue was We absorption, shipments of period-end consumer mix end period. Fourth odds and and broad-based year. year. scanner and prior demand action household lower to the absorption expected, believe closure by contract the contribution industry quarter our adjusted higher of holiday in shipments EBITDA elevated half of X%, quarter was ourselves the and earlier Weissenthurm end inventory than year, under to given our with margin the Scanner year, in with in the goods million the in expected growth end as improvement of weak, excess cost decline the as and the Consumer by offset significantly

stronger XXXX For will fixed EBITDA and XXXX, growth some a second adjusted portion remarks. we upstream partly through hand by now talk offset business but increases, performance cost of half. expect a concluding to some finishing growth the over low elevated our on growth with in shipments costs. I'll with our competitive to pressure drive briefly in David financial percent single-digit Volume energy absorption position and before you reflecting small improved cost

David Bourne

We the $XXX our year inflow the success ahead of recent ahead working capital everyone. initiatives of Thanks, million. hello, $XXX Ollie, and guidance expectation. of year for in in of liquidity most our excess with position million, an our $XXX The million, ended of resulted of full a

the our similar year, in customer period, $XXX $XXX inventory, in This million previous flow to destocking Americas which of action the responded our to for million team finished in quarters. in year. the the resulted prior from followed up cash Europe operating During in goods adjusted rightsize

XXXX for after for full AMP million, QX. growth expectation outflow inflow million across growth a CapEx and $XXX of seasonal maintenance our in incurred $XXX is usual of capital further represents year. the just $XXX reduction year versus XX% of working Our under prior investment million $XXX million $XX a the was in growth guidance and XXXX. managed initial tightly below lease Total additions our investment via of of CapEx million,

to CapEx XXXX our We in Our program growth CapEx is flexibility comprises complete projects mainly of some further to million, enhancements investment the approximately network to reduction again for a substantially in final $XXX growth reduce and the XXXX. growth concluding. in with which flows cash anticipate growth

Our full at leverage net that to year in reduction in a we debt bond our arising adjusted addition year falling the deleveraging a metric to no anticipate during and cash quarter, X.Xx net have thereafter. Note meaningful supported X.Xx basis by on We XXXX covenants bond. position, maturities from and on modest more lower generation. strong ended our no by liquidity debt maintenance flow near-term the EBITDA, strong

robust quarterly completing ordinary the hand our policy. With in change There growth closing in potential from March, and to arising paid and no our growth to investments. to line per today capital I'll back $X.XX generation with later that, announced earnings of be our is our cash share allocation position, liquidity Ollie. guidance supported have and We by dividend

Oliver Graham

performance taking just AMP's before on I'll questions, Thanks, messages. And and recap David. key

high line for the America would So shipment and North and a by trends expectations. market second challenging during shipments Brazil consistently performed deployment half retail trends line and optimized for We to and positively generation working scanner with of X% historic by to a business. strong year capital ended a XXXX, inventory position XXXX in our in data firstly, growth positive year. the tracked with shipments outlook successfully was of global through liquidity where a at and during ahead transition grew disciplined team the strong in balance deteriorated represented our shipment norms. In our half, for team the shipments rebalancing. the market inflected more the X% second conditions, Europe year AMP, level full excess with response support in expectations. fourth quarter cash but

tight going continued growth, forward. capacity in focus Our on permanent should excellence generation EBITDA SG&A all shipments actions, stronger operational adjusted control and result of

XX% AMP in of leads adjusted to by to shipment $XXX grow market million growth project a to the Full approaching range a of for $XXX XXXX is XXXX percentage. X% us view year million. current global Our into to EBITDA projected mid-single-digit

guidance and the improved EBITDA with finished by is of growth footprint accelerated shipments Our completion rationalization. cost supported fixed by absorption, goods destocking

of in the weighted quarter, remarks, with is we EBITDA first the terms slightly made the be expected on any these Americas with that with recovery as to may take for towards anticipated proceed in remain opening In Europe half. Having cautious growth have. with volume lower we'll prior line adjusted you second guidance to now questions production year, but

Operator

[Operator first Bank question of we our George Instructions] with And can take America. Staphos from

Unknown Analyst

[indiscernible] George. this conflict We is for This on morning. a actually had

you And effects you're have guess, saw quarter fourth any volumes you spillover So almost at trending end quarter to I into we're seen destocking seeing point talk the I here, this regions. guess, the months the X first related there? off, in at of the relatedly, about given quarter-to-date of Europe, can how kind just across you

Oliver Graham

yes. So

the So in has ahead some European from our There year X December January regions, running I of all think volumes. well was transfer started slightly of into expectations. probably definitely

or Europe singles. from December guide will ahead we're X/X So January, region, like a what say we January. I had And of crossover more for it even we'd a the say, looks into that is region and than low that of year, a be probably X/X guiding to strong running, as by

encouraging. February and the to we started. bit there's with our also we're for days because Brazil January but America Brazil. pieces in Easter positive same in just ahead early both level day. But a of very Europe market, grew And at on a So mix comp, March tough XX% we've kind falling that in total very in that of customer expectations running got quarter at a started ahead the obviously funny that looks strong at as The again and with good. weren't February I but think moment the where is which a of running some which recognize. somewhat January our the We of market January North

So it's early. way though, obviously, has yes, the started, we're feeling about still year the even positive

Unknown Analyst

about can buckets lay from on well? as out you color and EBITDA any key comment just next can guide of Understood. the Okay. And elevated further energy help we bridge puts aside volume? for you some provide regarding your takes or year, also, us think as to the And those costs

Oliver Graham

Sure.

suppliers. Obviously, but So somewhat upstream guide, year SG&A. down have $XX of we'd the it, deferred back and the lot some used energy got take a you've over that we to of point, to costs you into positive the that last of absorption, because improvements, years us our And a be looking yes, looking to upstream to couple cost our price then at if operation, cost, of of that north cost so coming we take of be of that obviously, of some is on is this I bit energy with top had you specific guide. us own looser. think call a a the lot a where end somewhere you'd end -- bit as market And again, that the down can $XX negative as been Europe bring and excellence a just it's the is comment million well elevated mid-teens about current and million difficult in little to operations, market just the top environment on market of north on and on volume, into more in little fixed beverage at the our the in of pass

million just the a that or take all maybe price the a of our of those, So pieces. and other XX%, and costs that's would more guide, why cost bottom op of $XX probably XX% the XX% the in cost there. At be a bit you'd end maybe on so got volume negative you've negative positive on

So formed that's the that the range. buckets

Operator

Pettinari Citi. with from We will question next Anthony take our

Bryan Burgmeier

some just gauge Brazil. still Burgmeier we that's sitting for volume level not And sure are in assuming reach by this Europe guidance of curtailments then Bryan imply capacity no This your I'm It is that curtailment I'm for to get into XXXX? offline guide. there's trying and your implied seems be that actually Anthony. year, if growth as going XXXX you in does like in the essentially accurate. to

Oliver Graham

still of we're still think some ramping we operational I Look, excellence and growth our as we investments, efficiency gains pursue have various initiatives.

good if think about between the $X we think take year, and also runway particularly North into the returning split America we it's I So that got giving North America growth. the of got regions. I relatively Brazil we've we've mean, that's in in do for as on as simple network that. have in we us across hopes business, ] billion some but some of We [ evenly level still not have the curtailment globally the growth good high

review and to still curtailments are are we this further taking say nothing them. keeping So obviously more on network actions at we point, but permanent under

Bryan Burgmeier

you question I Got CapEx I for that projects was it. over. growth under I'm spillover maybe there's of it. remarks the do XXXX little it's to or the of me bit maybe maybe but and in that? curious said turn projects kind are impression related then initiated Last 'XX, in too to disclose that soon it a otherwise, included can just Got if the can prepared the was

Oliver Graham

were growth the Actually, is initiated projects 'XX. XXXX in I that CapEx think

some is needed address the we enhancements closure. to got the this of with we've So about North year. some projects half out then I changes Whitehouse of flexibility together the just growth carryover And talked network, from in think half, to to investment we the other about our it American being that cash the make

of occur Again, in are focused that network. flexibility 'XX amounts small projects that some of the half mainly the the European will second of year. most on So during 'XX. There is improvement

yes, the of So the that's bulk million. $XXX

Operator

from And will Woodworth Curt question our with next come UBS.

Curtis Woodworth

you bridge free on bit could Yes. I cash little flow a wondering delta was if help year. this

a interest us You line talked expense, cash on could guidance But other about flow. lease items capital use. also then cash be and rough some give on can some working and bridge free you provide

Oliver Graham

David?

David Bourne

happy Yes. Curt, help. yes, to

So a as the this lease million, have of a we of million. CapEx CapEx, order $XX working $XXX of we'll maintenance investment outlined capital of the year small inflow nonbusiness order growth we repayments think

of our on have some closure the Weissenthurm facilities. will We and operating Whitehouse exceptionals

would will estimate we $XX cash that We'll year and of million of So interest [indiscernible] the have the tax, for order for one million have my $XX there. $XX to cash million. perhaps

Curtis Woodworth

Okay. kind And volume of more outlook Americas. functional of would market plant new leveraging around wins be assumptions would the of think much Can in granular underpinning a that contractual little with then, the I share And said about you I commitments guess, levels the are growth in X%. on Europe, terms just bit to or you maybe network? growth share how you of market taking that? Like in or terms any be then similar there of there respect have? get

Oliver Graham

Sure. Yes.

I a to contractual and we the being mid- percentage. And the market. gains guided you to take high single-digit as So think the mid look, the North America, with would being probably rest

that contractual I the see gains a digits. the market single going we have couple So into XXXX. commented we think of low And before in we've

customer There 'XX amount the reasonable broadly it's downs but we're about larger seeing said. ups market And that's in from then the how XXXX a growth which you those mind. at flip level, think coming base X% into our as Europe, was X in I in of market, So growth a we're on our is seeing that would down. and

Operator

from Phelan will Bank. And next we Richard with Deutsche take question our

Richard Phelan

would way demands and using the liquidity the its healthy consider reduction sheet planned redemption special any owner of its the liquidity year-end the the in majority business CapEx, to that a Given in raising dividend, support preferred? position the balance dividend, at

David Bourne

that clear, is one? Do we've been capital policy to allocation you take want our unchanged. think I

is of dividend you Sustainable as level the is is the that. very dividend current reduction current priority. and absolutely and liquidity, our first supports the leverage second regard level sustainable our say, we at year-end priority at So

Operator

Roger We'll take Spitz Bank Instructions] with [Operator from of America. next our question

Roger Spitz

wanted million heard the I I clarify cash I XXXX I think to thought just interest. but I misheard. might $XXX have

David Bourne

$XXX I think, million. yes,

Roger Spitz

Yes.

Okay.

Yes, makes more Okay. that sense.

Okay.

you things like adding gave that, capital free a inflow, do -- you range, you midpoint when working the it's get the the of all cash so of kind small And did, million of together? kind way plus all think or you. about flow that to you before minus dividends and those putting Is have pieces put that what preferred the it, together $XX

David Bourne

number higher than I get to a that.

Roger Spitz

Higher number.

All right. Okay.

Operator

Ning will we our Jupiter from with take question And Management. Asset last Yang

Ning Yang

clarify to those below costs, it guided terms just it that I costs. is ] in -- the much guidance, want adding EBITDA, exceptional $XXX How the million was total CapEx Could that of the in restructuring like just the of earlier year? exceptional all items and start-up together roughly you [ terms next cost CapEx the confirming

David Bourne

Yes.

total cash CapEx is yes. flow order, So that of

terms sit exceptionals, In you of free which flow. cash before have exceptionals, operating

So the of activity. order cash element of those $XX may be restructuring our of around million the

You order that in may start-up have when the coming obviously, some substantially, of from our down quite but free program. investment be costs then we growth sit million they're this year of were will line cash $XX the flow the of middle below they

Ning Yang

last cetera. Brazil, you et that question terms have in is operators cash cetera, I the balance my that you et have, your -- of given on in guess

you to of minimum a see do operate? your in where that So terms cash needs business balance

David Bourne

this We have a so at yes, balance, absolute long cash would way minimum. million, a float be stage. to about But above that of our Minimum $XXX we're like clearly,

Operator

are there turn for any Graham, to no at additional appears I questions conference this or time. back the Mr. It closing remarks. further will you

Oliver Graham

operator. Thanks,

what America, volumes generation contracted adjusted addition our growth mentioned historically support trends on outlook. Furthermore, positive we in the a new growth in markets. was by Europe. the in in scanner stable an footprint should where and performance result some and retail Americas, North in in each better-than-expected confident in positive very QX have our across our volume in counteracted beyond. most anticipated our a of to been in So which has market We're European XXXX year-to-date EBITDA And as customer rebound by our more destocking improvement had backed a been in volumes on call, volume actions trends

forward to look again our Thank you. results. you And to we all quarter talking at X

Operator

concludes This your for you today's Thank participation. call.

You may now disconnect.

Ardagh Metal Packaging (AMBP) 22 Feb 242023 Q4 Earnings call transcript