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Ardagh Group S.A. - Third Quarter 2019 Results

LUXEMBOURG, Oct. 31, 2019 /PRNewswire/ -- Ardagh Group S.A. (ARD) today announced its results for the third quarter ended September 30, 2019.

Ardagh Group logo 2019 (PRNewsfoto/Ardagh Group S.A.)











September 30,
2019


September 30,
2018


Change


Change CCY



($m except per share data)





Revenue - Group 1


2,377


2,390


(1%)


2%

Adjusted EBITDA - Group 1


424


400


6%


9%

Adjusted EBITDA - continuing operations 1


320


302


6%


9%

Adjusted EBITDA margin - Group 1


17.8%


16.7%


110 bps



(Loss)/earnings per share


(0.12)


0.03





Adjusted earnings per share - Group 1


0.60


0.52


15%


20%

(Loss)/profit for the period


(29)


7





Adjusted free cash flow 1


244


211





Dividend per share declared 2


0.14


0.14





Paul Coulson, Chairman and Chief Executive, said "The Group reported a strong performance in the third quarter, with notable growth in Glass Europe and Metal Americas. We took advantage of favorable markets during the quarter to further improve our debt maturity profile and obtain material interest savings. We completed the Trivium transaction today, with cash proceeds of $2.5 billion to be used for debt reduction". 

  • Revenue of $2,377 million increased by 2% on a constant currency basis;
  • Adjusted EBITDA of $424 million increased by 9% at constant exchange rates, led by gains in Glass Packaging Europe and Metal Beverage Packaging Americas;
  • Adjusted earnings per share up 15% to $0.60 (2018: $0.52);
  • Group volume/mix growth of 2% led by Global beverage can volume3 growth of 7%;
  • Refinanced $1,650 million 2024 Senior Notes, yielding $45 million annualized interest savings;
  • Metal Food & Specialty business is treated as a Discontinued Operation, following the announced combination with Exal Corporation to form Trivium Packaging. Completion of the transaction took place today, with Ardagh receiving an approximate 43% stake in Trivium Packaging and cash consideration of $2.5 billion;
  • 2019 full year outlook:

Summary Financial Information












Three months ended
September 30,


Nine months ended
September 30,



2019


2018


2019


2018



(in $ millions, except EPS, ratios and percentages)

Revenue - Group 4


2,377


2,390


6,865


6,961

(Loss)/profit for the period


(29)


7


53


50

Adjusted profit for the period 4


142


123


339


322

Adjusted EBITDA - Group 4


424


400


1,182


1,140

Adjusted EBITDA - continuing operations 4


320


302


906


860

Adjusted EBITDA margin - Group 4


17.8%


16.7%


17.2%


16.4%










(Loss)/earnings per share


(0.12)


0.03


0.22


0.21

Adjusted earnings per share - Group 4


0.60


0.52


1.43


1.36










Operating cash flow - Group 4


379


301


364


355

Operating cash flow - continuing operations 4


255


241


288


257

Adjusted free cash flow - Group 4


244


211


(18)


11























At September 30,


At December 31,



2019


2018



$m


$m

Net debt 5


7,866


7,462

Cash and available liquidity


1,129


1,170

Net debt to LTM EBITDA


5.2x


5.0x

 

 

Financial Performance Review

Bridge of 2018 to 2019 Revenue and Adjusted EBITDA


Three months ended September 30, 2019

Revenue


Metal
Beverage
Packaging
Europe


Metal
Beverage
Packaging
Americas


Glass
Packaging
Europe


Glass
Packaging
North
America





$'m


$'m


$'m


$'m


$'m

2018 - Continuing Operations


415


440


420


433


1,708

Organic


15


24


14


5


58

FX translation


(18)



(20)



(38)

2019 - Continuing Operations


412


464


414


438


1,728

2019 - Discontinued Operation










649

2019 - Group










2,377












Adjusted EBITDA


Metal
Beverage
Packaging
Europe


Metal
Beverage
Packaging
Americas


Glass
Packaging
Europe


Glass
Packaging
North
America





$'m


$'m


$'m


$'m


$'m

2018 - Continuing Operations


75


57


103


67


302

Organic


(7)


8


5


1


7

IFRS 16


3


2


6


9


20

FX translation


(3)



(6)



(9)

2019 - Continuing Operations


68


67


108


77


320

2019 - Discontinued Operation










104

2019 - Group










424












2019 margin - Continuing Operations


16.5%


14.4%


26.1%


17.6%


18.5%

2018 margin - Continuing Operations


18.1%


13.0%


24.5%


15.5%


17.7%

2019 margin - Group










17.8%

2018 margin - Group










16.7%


Nine months ended September 30, 2019

Revenue


Metal
Beverage
Packaging
Europe


Metal
Beverage
Packaging
Americas


Glass
Packaging
Europe


Glass
Packaging
North
America





$'m


$'m


$'m


$'m


$'m

2018 - Continuing Operations


1,237


1,310


1,236


1,304


5,087

Organic


51


49


56


(17)


139

FX translation


(73)



(74)



(147)

2019 - Continuing Operations


1,215


1,359


1,218


1,287


5,079

2019 - Discontinued Operation










1,786

2019 - Group










6,865












Adjusted EBITDA


Metal
Beverage
Packaging
Europe


Metal
Beverage
Packaging
Americas


Glass
Packaging
Europe


Glass
Packaging
North
America





$'m


$'m


$'m


$'m


$'m

2018 - Continuing Operations


217


161


274


208


860

Organic


(7)


17


19


(12)


17

IFRS 16


11


6


16


25


58

FX translation


(12)



(17)



(29)

2019 - Continuing Operations


209


184


292


221


906

2019 - Discontinued Operation










276

2019 - Group










1,182












2019 margin - Continuing Operations


17.2%


13.5%


24.0%


17.2%


17.8%

2018 margin - Continuing Operations


17.5%


12.3%


22.2%


16.0%


16.9%

2019 margin - Group










17.2%

2018 margin - Group










16.4%

 

Group Performance

On July 15, 2019, the Ardagh Group announced that it had entered into an agreement to combine Food & Specialty, operating as part of the previously reported Metal Packaging Europe and Metal Packaging Americas segments, with the business of Exal, a leading producer of aluminum containers, to form Trivium, a global leader in metal packaging.

Completion of the transaction took place today, with Ardagh receiving a stake of approximately 43% in Trivium and $2.5 billion in cash proceeds. The remaining approximately 57% will be controlled by Ontario Teachers.

Following the announcement, the composition of the Group's operating and reporting segments changed. Food and Specialty has been classified as discontinued, following which the Group's four operating and reportable segments are:

  • Metal Beverage Packaging Europe
  • Metal Beverage Packaging Americas
  • Glass Packaging Europe
  • Glass Packaging North America.

Group

Revenue of $2,377 million decreased by 1% in the three-month period ended September 30, 2019, compared with the same period last year. On a constant currency basis, revenue increased by 2%, mainly due to increased volumes in Metal Beverage Packaging Europe and Metal Beverage Packaging Americas and the pass through of increased input costs.

Third quarter Adjusted EBITDA of $424 million increased by 6% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 9%, principally due to increased selling prices, including for the pass through of higher input costs, the impact of IFRS 16 of $25 million, and favorable volume/mix effects, partly offset by higher operating costs.

Metal Beverage Packaging Europe

Revenue of $412 million decreased by 1% in the three-month period ended September 30, 2019, compared with the same period last year. On a constant currency basis, revenue increased by 4%, principally due to volume/mix growth, partly offset by lower selling prices. Adjusted EBITDA for the quarter of $68 million decreased by 9% at actual exchange rates and 6% at constant currency rates, compared with the same period last year. The reduction in Adjusted EBITDA principally reflected higher input and other operating costs and lower selling prices due to the pass through of lower input costs, partly offset by favorable volume/mix effects and the impact of IFRS 16 of $3 million.

Metal Beverage Packaging Americas

Revenue increased by 5% to $465 million in the third quarter of 2019, compared with the same period last year. This was principally due to favorable volume/mix effects of 11%, partly offset by the pass through of lower input costs. Adjusted EBITDA of $67 million increased by 18% compared with the prior year, principally reflecting favorable volume/mix effects and the impact of IFRS 16, partly offset by higher operating costs.

Glass Packaging Europe

Revenue of $414 million decreased by 1% at actual exchange rates and increased by 4% at constant exchange rates, in the three-month period ended September 30, 2019, compared with the same period last year. Revenue growth principally reflected higher selling prices, including to recover increased input costs, partly offset by unfavorable, weather impacted volume/mix effects. Adjusted EBITDA for the quarter of $108 million increased by 10% at constant exchange rates, compared with the same period last year, mainly due to higher selling prices, the impact of IFRS 16 and the benefit of short payback capex projects.

Glass Packaging North America

Revenue increased by 1% to $438 million in the third quarter, compared with the same period last year, principally reflecting increased selling prices to recover higher input costs, partly offset by unfavorable volume/mix effects. Adjusted EBITDA for the quarter of $77 million increased by 15%, compared with the same period last year, mainly due to higher selling prices, including to recover increased costs and the impact of IFRS 16, partly offset by increased overhead costs and unfavorable volume/mix effects.

Discontinued Operation

Revenue decreased by 5% to $649 million in the three months ended September 30, 2019, compared with the same period last year principally reflecting unfavorable foreign currency translation effects of $22 million and lower volumes in both business units. Adjusted EBITDA increased by 6% to $104 million, inclusive of the impact of IFRS 16 of $4 million, reflecting cost reduction initiatives in response to lower volumes.

Financing Activity

On August 12, 2019, the Group issued $1,793 million through a combination of Senior Secured Notes and Senior Notes. The net proceeds from the issuance of these notes were used to repay the $1,650 million 7.250% Senior Notes due 2024. These notes were repaid on August 13, 2019. The blended cost of the new debt, after swaps is approximately 3.5% per annum, leading to significant interest cost savings.

Combination of Food & Specialty with Exal

Following completion of the transaction, and in accordance with the July 15, 2019 announcement, Ardagh has today:

  • Issued Conditional Redemption Notices in respect of its €440,000,000 4.125% Senior Secured Notes due 2023 and its $1,000,000,000 4.625% Senior Secured Notes due 2023.
  • Issued tender offers, at par, in respect of its $715,000,000 4.250% Senior Secured Notes due 2022, €750,000,000 2.750% Senior Secured Notes due 2024, €440,000,000 2.125% Senior Secured Notes due 2026 and $500,000,000 4.125% Senior Secured Notes due 2026 (the "Excess Proceeds Offer"). The Excess Proceeds Offer is expected to expire at 4:00 p.m. (London Time) on November 28, 2019. The announcement date is expected to be November 29, 2019 and the payment date is expected to be December 2, 2019.
  • Issued a Conditional Redemption Notice in respect of its €750,000,000 6.750% Senior Notes due 2024.

Earnings Webcast and Conference Call Details

Ardagh Group S.A. (ARD) will hold its third quarter 2019 earnings webcast and conference call for investors at 3 p.m. GMT (11 a.m. ET) on October 31, 2019. Please use the following webcast link to register for this call:

Webcast registration and access:

https://event.on24.com/wcc/r/2100767-1/E67A2D3FAF3DCE62ED0CBFE81A494F2F?partnerref=rss-events

Conference call dial in:

United States: +1855 85 70686
International: +44 33 3300 0804

Participant pin code: 85935762#

Slides and quarterly report

Supplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.

Third quarter results for ARD Finance S.A., issuer of the Senior Secured Toggle Notes due 2023, are available at http://www.ardholdings-sa.com/.

About Ardagh Group

Ardagh Group is a global supplier of infinitely recyclable, metal and glass packaging for the world's leading brands. Ardagh operates more than 50 metal and glass production facilities in 12 countries across three continents, employing over 16,000 people with sales of $7bn.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act and Section 21E of the U.S. 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.

Non-GAAP Financial Measures 

This press release may contain certain consolidated financial measures such as Adjusted EBITDA, working capital, operating cash flow, Adjusted free cash flow, net debt, Adjusted profit/(loss), Adjusted earnings/(loss) per share, and ratios relating thereto that are not calculated in accordance with IFRS or US GAAP. Non-GAAP financial measures may be considered in addition to GAAP financial information, but should not be used as substitutes for the corresponding GAAP measures. The non-GAAP financial measures used by Ardagh may differ from, and not be comparable to, similarly titled measures used by other companies.

 

Consolidated Interim Financial Statements

Consolidated Interim Income Statement for the three months ended September 30, 2019


















Unaudited


Unaudited



Three months ended September 30, 2019


Three months ended September 30, 2018



Before







Before








exceptional


Exceptional





exceptional


Exceptional






items


Items


Total


items


Items


Total



$'m


$'m


$'m


$'m


$'m


$'m

Revenue


1,728




1,728


1,708




1,708

Cost of sales


(1,430)


(5)



(1,435)


(1,426)


(46)



(1,472)

Gross profit


298


(5)



293


282


(46)



236

Sales, general and administration expenses


(80)


(28)



(108)


(69)




(69)

Intangible amortization


(59)




(59)


(59)




(59)

Operating profit


159


(33)



126


154


(46)



108

Net finance expense


(115)


(112)



(227)


(126)


(20)



(146)

Profit/(loss) before tax


44


(145)



(101)


28


(66)



(38)

Income tax (charge)/credit


(13)


17



4


(11)


10



(1)

Profit/(loss) from continuing operations


31


(128)



(97)


17


(56)



(39)

Profit from discontinued operation, net of tax


70


(2)



68


47


(1)



46

Profit/(loss) for the period


101


(130)



(29)


64


(57)



7
















(Loss)/profit attributable to:















Equity holders







(29)







7

Non-controlling interests













(Loss)/profit for the period







(29)







7
















(Loss)/earnings per share:















Basic and diluted (loss)/earnings per share attributable to equity
holders







($0.12)







$0.03
















Loss per share from continuing operations:















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







($0.41)







($0.17)

 

 

Consolidated Interim Income Statement for the nine months ended September 30, 2019


















Unaudited


Unaudited



Nine months ended September 30, 2019


Nine months ended September 30, 2018



Before







Before








exceptional


Exceptional





exceptional


Exceptional






items


Items


Total


items


Items


Total



$'m


$'m


$'m


$'m


$'m


$'m

Revenue


5,079




5,079


5,087




5,087

Cost of sales


(4,248)


2



(4,246)


(4,280)


(99)



(4,379)

Gross profit


831


2



833


807


(99)



708

Sales, general and administration expenses


(234)


(42)



(276)


(218)


(11)



(229)

Intangible amortization


(176)




(176)


(179)




(179)

Operating profit


421


(40)



381


410


(110)



300

Net finance expense


(355)


(112)



(467)


(351)


(20)



(371)

Profit/(loss) before tax


66


(152)



(86)


59


(130)



(71)

Income tax (charge)/credit


(23)


28



5


(26)


22



(4)

Profit/(loss) from continuing operations


43


(124)



(81)


33


(108)



(75)

Profit from discontinued operation, net of tax


144


(10)



134


134


(9)



125

Profit for the period


187


(134)



53


167


(117)



50
















Profit attributable to:















Equity holders







53







50

Non-controlling interests













Profit for the period







53







50
















Earnings per share:















Basic and diluted earnings per share attributable to equity holders







$0.22







$0.21
















Loss per share from continuing operations:















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







($0.34)







($0.32)

 

 

Consolidated Interim Statement of Financial Position






Unaudited


Unaudited


At September 30,


At December 31,


2019


2018


$'m


$'m





Non-current assets




Intangible assets

2,894


3,601

Property, plant and equipment

2,546


3,388

Derivative financial instruments

30


11

Deferred tax assets

235


254

Other non-current assets

66


24


5,771


7,278

Current assets




Inventories

889


1,284

Trade and other receivables

867


1,053

Contract asset

149


160

Derivative financial instruments

3


9

Cash and cash equivalents

537


530


2,445


3,036

Assets held for sale

2,450


TOTAL ASSETS

10,666


10,314

Equity attributable to owners of the parent




Issued capital

23


23

Share premium

1,292


1,292

Capital contribution

485


485

Other reserves

134


45

Retained earnings

(3,572)


(3,355)


(1,638)


(1,510)

Non-controlling interests

1


1

TOTAL EQUITY

(1,637)


(1,509)

Non-current liabilities




Borrowings

7,763


7,729

Lease obligations

273


32

Employee benefit obligations

724


957

Derivative financial instruments

13


107

Deferred tax liabilities

377


543

Provisions

29


38


9,179


9,406

Current liabilities




Borrowings

236


114

Lease obligations

60


4

Interest payable

72


81

Derivative financial instruments

22


38

Trade and other payables

1,431


1,983

Income tax payable

102


114

Provisions

50


83


1,973


2,417

Liabilities held for sale

1,151


TOTAL LIABILITIES

12,303


11,823

TOTAL EQUITY and LIABILITIES

10,666


10,314

 

 

Consolidated Interim Statement of Cash Flows












Unaudited


Unaudited



Three months ended
September 30,


Nine months ended
September 30,



2019


2018


2019


2018



$'m


$'m


$'m


$'m

Cash flows from operating activities









Cash generated from continuing operations


386


306


717


549

Interest paid (i)


(120)


(74)


(328)


(280)

Income tax paid (i)


(5)


(14)


(38)


(61)

Net cash from operating activities - continuing operations


261


218


351


208

Net cash from operating activities - discontinued operation


139


75


159


163

Net cash from operating activities


400


293


510


371










Cash flows from investing activities









Purchase of property, plant and equipment


(123)


(91)


(397)


(357)

Purchase of software and other intangibles


(2)


(4)


(8)


(10)

Proceeds from disposal of property, plant and equipment


1


1


1


5

Investing cash flows used in continuing operations


(124)


(94)


(404)


(362)

Investing cash flows used in discontinued operation


(28)


(21)


(96)


(70)

Net cash used in investing activities


(152)


(115)


(500)


(432)










Cash flows from financing activities









Repayment of borrowings


(1,652)


(440)


(1,652)


(441)

Proceeds from borrowings


1,706


295


1,923


295

Dividends paid


(33)


(33)


(99)


(99)

Consideration received/(paid) on extinguishment of derivative financial
instruments


23


(44)


9


(44)

Deferred debt issue costs paid


(12)



(12)


(5)

Lease payments


(19)


(1)


(55)


(3)

Early redemption premium paid


(90)


(7)


(90)


(7)

Financing cash flows from continuing operations


(77)


(230)


24


(304)

Financing cash flows from discontinued operation


15




(1)

Net cash (outflow)/inflow from financing activities


(62)


(230)


24


(305)










Net increase/(decrease) in cash and cash equivalents


186


(52)


34


(366)

Cash and cash equivalents at the beginning of the period


374


465


530


784

Foreign exchange losses on cash and cash equivalents


(20)


(4)


(24)


(9)

Cash and cash equivalents at the end of the period(ii)


540


409


540


409

 

(i) Operating cash flows for discontinued operation for the nine months ended September 30, 2019, include interest and income tax payments of $5 million and $16 million respectively (2018: $1 million and $4 million).

(ii) Included within cash and cash equivalents of $540 million is $537 million of cash relating to continuing operations and $3 million of cash within assets held for sale.

 

 

Financial assets and liabilities

At September 30, 2019, the Group's net debt and available liquidity was as follows:




















Maximum


Final













amount


maturity


Facility






Undrawn

Facility


Currency


drawable


date


type


Amount drawn


amount





Local






Local


$'m


$'m





currency






currency









m






m





2.750% Senior Secured Notes


EUR


750


15-Mar-24


Bullet


750


817


4.625% Senior Secured Notes


USD


1,000


15-May-23


Bullet


1,000


1,000


4.125% Senior Secured Notes


EUR


440


15-May-23


Bullet


440


479


4.250% Senior Secured Notes 


USD


715


15-Sep-22


Bullet


715


715


2.125% Senior Secured Notes


EUR


440


15-Aug-26


Bullet


440


479


4.125% Senior Secured Notes


USD


500


15-Aug-26


Bullet


500


500


4.750% Senior Notes


GBP


400


15-Jul-27


Bullet


400


492


6.000% Senior Notes


USD


1,700


15-Feb-25


Bullet


1,700


1,711


6.750% Senior Notes


EUR


750


15-May-24


Bullet


750


817


5.250% Senior Notes


USD


800


15-Aug-27


Bullet


800


800


Global Asset Based Loan Facility


USD


818


07-Dec-22


Revolving


230


230


588

Lease Obligations


USD/GBP/EUR






Amortizing




333


Other borrowings/credit lines


EUR/USD




Rolling


Amortizing




7


1

Total borrowings / undrawn facilities for continuing
operations












8,380


589

Deferred debt issue costs and bond premium












(48)


Net borrowings / undrawn facilities for continuing
operations












8,332


589

Cash and cash equivalents












(537)


537

Derivative financial instruments used to hedge foreign
currency and interest rate risk












(21)


Net debt / available liquidity for continuing operations












7,774


1,126

Net debt / available liquidity for discontinued operation












92


3

Net debt / available liquidity












7,866


1,129

 

 

Reconciliation of profit for the period to Adjusted profit - Group












Three months ended
September 30,


Nine months ended
September 30,



2019


2018


2019


2018



$m


$m


$m


$m

(Loss)/profit for the period - Group


(29)


7


53


50

Total exceptional items 6


149


67


166


142

Tax credit associated with exceptional items


(20)


(10)


(33)


(25)

Intangible amortization


61


66


192


200

Tax credit associated with intangible amortization


(16)


(15)


(43)


(45)

(Gains)/loss on derivative financial instruments


(3)


8


4


Adjusted profit for the period - Group


142


123


339


322










Weighted average common shares


236.36


236.35


236.36


236.35










(Loss)/earnings per share


(0.12)


0.03


0.22


0.21










Adjusted earnings per share - Group


0.60


0.52


1.43


1.36

 

  

Reconciliation of profit for the period to Adjusted EBITDA, cash generated from operations, operating cash flow and Adjusted free cash flow












Three months ended September 30,


Nine months ended September 30,



2019


2018


2019


2018



$'m


$'m


$'m


$'m

(Loss)/profit for the period - Group


(29)


7


53


50

Profit from discontinued operation


68


46


134


125

Loss from continuing operations


(97)


(39)


(81)


(75)

Income tax (credit)/charge


(4)


1


(5)


4

Net finance expense


227


146


467


371

Depreciation and amortization


161


148


485


450

Exceptional operating items


33


46


40


110

Adjusted EBITDA from continuing operations


320


302


906


860

Movement in working capital


78


38


(152)


(221)

Transaction-related, start-up and other exceptional costs paid


(11)


(29)


(28)


(70)

Exceptional restructuring paid


(1)


(5)


(9)


(20)

Cash generated from continuing operations


386


306


717


549

Transaction-related, start-up and other exceptional costs paid


11


29


28


70

Capital expenditure 7


(124)


(94)


(404)


(362)

Lease payments due to the adoption of IFRS 16


(18)



(53)


Operating cash flow from continuing operations


255


241


288


257

Operating cash flow from discontinued operation


124


60


76


98

Operating cashflow - Group


379


301


364


355

Interest 8


(118)


(72)


(329)


(279)

Income tax paid


(17)


(18)


(53)


(65)

Adjusted free cash flow - Group


244


211


(18)


11

 

 

1. A reconciliation to the most comparable GAAP measures can be found in the Bridge of 2018 to 2019 Revenue and Adjusted EBITDA and reconciliations at the back of this release.


2. Payable on November 29, 2019 to shareholders of record on November 15, 2019.


3. References to data on volumes represents units shipped in the period.


4. A reconciliation to the most comparable GAAP measures can be found in the Bridge of 2018 to 2019 Revenue and Adjusted EBITDA and reconciliations at the back of this release.


5. Net debt is comprised of net borrowings and derivative financial instruments used to hedge foreign currency and interest rate risk, net of cash and cash equivalents. Net borrowings at September 30, 2019 includes the impact of IFRS 16 leases.


6. Total exceptional items before tax for the three months ended September 30, 2019 of $149 million include $112 million debt refinancing and settlement costs related to the notes repaid in August including premium payable on the early redemption of the notes of $90 million, accelerated amortisation of deferred finance costs, interest charges from the call date to date of redemption and a charge related to the termination of derivative financial instruments. Total exceptional items for the three months ended September 30, 2019 also include $28 million transaction-related costs, primarily related to the combination of the Group's Food & Specialty Metal Packaging business with the business of Exal Corporation. Other exceptional items include $4 million related to discontinued operation and $5 million related to the Group's capacity realignment programs comprising property, plant and equipment impairment charges ($1 million) and start-up related costs ($4 million). These costs were incurred in Glass Packaging North America ($2 million) and Glass Packaging Europe ($3 million).


Total exceptional items before tax for the nine months ended September 30, 2019 of $166 million include $112 million debt refinancing and settlement costs related to the notes repaid in August including premium payable on the early redemption of the notes of $90 million, accelerated amortisation of deferred finance costs, interest charges from the call date to date of redemption and a charge related to the termination of derivative financial instruments. Total exceptional items for the nine months ended September 30, 2019 also include a $37 million pension service credit recognized in Glass Packaging North America, $15 million related to a provision for a court award and related interest, net of the tax adjusted indemnity receivable in respect of the Group's U.S. glass business legal matter and $42 million transaction-related costs, primarily related to the combination of the Group's Food & Specialty Metal Packaging business with the business of Exal Corporation. Other exceptional items include $14 million related to discontinued operation and $20 million related to the Group's capacity realignment programs comprising restructuring costs ($7 million), property, plant and equipment impairment charges ($5 million) and start-up related costs ($8 million). These costs were incurred in Glass Packaging North America ($12 million), Glass Packaging Europe ($4 million), Metal Beverage Packaging Americas ($2 million) and Metal Beverage Packaging Europe ($2 million).


7. Capital expenditure for the three and nine months ended September 30, 2019, includes $19 million and $68 million respectively, relating to spend on short payback projects.


8. Interest paid in the three and nine months ended September 30, 2019, excludes $4 million in respect of the redemption, in August 2019, of the Group's $1,650 million 7.250% Senior Notes due 2024, related to the interest from the date the Notes were called for redemption to the redemption date. Interest paid in the three and nine months ended September 30, 2018, excludes $2 million in respect of the redemption in July 2018 of the Group's $440 million 6.000% Senior Notes due 2021, related to interest from the date the Notes were called for redemption to the redemption date.

 

Cision

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