Ardagh Metal Packaging SA (AMP) has reported a strong third quarter in 2024, with a 2% increase in global beverage shipments and a 15% increase in year-over-year adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization-Earnings Before Interest, Taxes, Depreciation, and Amortization).
The company has raised its full-year adjusted EBITDA guidance to between $650 million and $660 million, attributing the positive outlook to robust performance in Europe and sustained demand for beverage cans.
A major virtual power purchase agreement in Portugal positions the company closer to its goal of 100% renewable energy by 2030. Despite some regional challenges, particularly in Brazil, AMP’s overall financial health appears solid, with the announcement of a quarterly dividend and a projected cash position reaching approximately $1 billion by year-end.
Key points.
- Global beverage shipments grew 2% with adjusted EBITDA up 15%.
- Revenues in Europe increased 2% with an 18% increase in adjusted EBITDA.
- Revenues in the Americas were up 1%, with a 13% increase in adjusted EBITDA.
- Full-year adjusted EBITDA guidance was raised to between US$650 million and US$660 million.
- Significant virtual power purchase agreement in Portugal to support renewable energy targets.
- Reported adjusted free cash flow was US$150 million for the quarter.
- A quarterly dividend of US$0.10 per share, payable in December, was declared.
- Inventory issues are expected to be resolved in the coming months, supporting a stronger fourth quarter.
Company Outlook - Optimism for growth in 2025 due to stable consumption conditions and changes in the packaging mix.
- Low-single-digit growth is projected for North America, with upside potential from packaging innovation.
- Brazil is expected to maintain growth, with a conservative estimate of mid-single-digit growth by 2025.
- Capacity is expected to support growth for another year or two without significant capital investment.
- Promotional activities in Europe do not need to be high for growth, showing resilience in the market.
Negative aspects - A specific problem with a customer in Brazil led to reduced volumes and downtime at a brewery.
- A weaker August and challenges were observed in Brazil, although October showed improvements in Europe.
- The energy category and beer show general weaknesses, despite some growth.
- Customer caution extended into the first quarter, leading to lower growth projections.
Positives - Strong growth in Europe, with a historical average of 2%-3% in beverage cans.
- Improvements in demand for carbonated soft drinks and sparkling water.
- Recovery in Germany and changes in consumer preferences driving demand.
- Inventory levels are expected to balance out by winter, contributing to a stronger fourth quarter.
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