Ardagh Group S.A. - second quarter 2017 earnings

Ardagh Group’s second-quarter financial results showed that Group revenue increased by 58% to EUR 2,021 million, compared with the same period last year.

Ardagh Group S.A. has announced its financial results for the second quarter ended 30 June 2017.
* Revenue increased by 58% to EUR 2,021 million with pro forma growth of 1% at actual and constant currency;
* Adjusted EBITDA increased by 48% to EUR 379 million, with pro forma growth of 6%;
* Adjusted EBITDA margin of 18.8%, an increase of 100bps on a pro forma basis;
* Earnings per share EUR 0.13 (2016: loss per share EUR 0.34);
* Adjusted earnings per share of EUR 0.49, up from EUR 0.10 in the prior year;
* Net debt to LTM Adjusted EBITDA reduced from 5.3x to 5.1x during the quarter;
* 10-year GBP 400 million Senior Notes issuance, further improving debt maturities to almost 7 years;
* $750 million of available cash and IPO proceeds used or allocated to repay debt to date in 2017;
* Quarterly cash dividend of US 0.14 per common share, payable on 31 August 2017;
* Prior guidance for 2017 Adjusted EBITDA of EUR 1.4 billion (USD 1.5 billion) was based on then prevailing exchange rates. At current exchange rates this guidance becomes EUR 1.37 billion (USD 1.6 billion) due entirely to currency. Targeted leverage of approximately 4.75x Adjusted EBITDA at 31 December 2017 is unchanged.

Group revenue in the quarter ended 30 June 2017 increased by 58% to EUR 2,021 million, compared with the same period last year. Revenue growth principally reflected the Beverage Can Acquisition, completed on 30 June 2016, as well as organic growth of 1%. Second quarter Adjusted EBITDA of EUR 379 million increased by 48%, compared with the same period last year. Growth reflected the Beverage Can Acquisition, as well as pro forma growth of 6% compared with the same period last year.

Metal Packaging Europe revenue increased by 97%, to EUR 786 million in the three month period ended 30 June 2017, compared with the same period last year. Growth reflected the inclusion of the Beverage Can Acquisition, as well as 1% organic growth, partly offset by EUR 8 million currency translation effects. Adjusted EBITDA increased by 97% to EUR 134 million, compared with the same period last year. Growth in Adjusted EBITDA reflected the Beverage Can Acquisition, as well as 7% organic growth, partly offset by EUR 1 million adverse currency translation effects.

Metal Packaging Americas revenue increased by 423% to EUR 434 million in the second quarter of 2017, compared with the same period last year. Revenue growth reflected the Beverage Can Acquisition, a 1% organic increase, as well as positive currency translation effects of EUR 15 million. Adjusted EBITDA increased by EUR 55 million to EUR 68 million, compared with the same period last year. Growth primarily reflected the Beverage Can Acquisition, 22% organic Adjusted EBITDA growth and positive currency translation effects of EUR 1 million.

Glass Packaging Europe revenue declined by 1% to EUR 366 million in the three month period ended 30 June 2017, compared with the same period last year, as organic growth of 1% was more than offset by EUR 10 million currency translation effects. Adjusted EBITDA for the quarter increased by 1% to EUR 80 million, compared with the same period last year, with growth of 4% at constant currency rates.

Glass Packaging North America revenue increased by 1% to EUR 435 million in the second quarter, compared with the same period last year including a EUR 14 million positive currency translation effect. Constant currency revenue was 2% lower, due mainly to continued soft mass beer markets. Adjusted EBITDA increased by 1% to EUR 97 million in the second quarter, compared with the same period in 2016. Excluding a positive currency translation effect of EUR 3 million, Adjusted EBITDA was 2% lower than the same period last year.

In June, the Group issued GBP 400 million, 10-year sterling notes, representing the longest debt maturity issued to date and its first in sterling. Proceeds, together with available cash, were used to redeem in full the USD 500 million Senior Secured Floating Rate Notes due 2021.
Following the redemption of the EUR 405 million 4.250% First Priority Senior Secured Notes due 2022 on 1 August, the Group will have used over USD 750 million of available cash and IPO proceeds to repay debt.
Net debt at 30June 2017 was EUR 7.0 billion.

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 EUR 7.7 billion.