Earnings call transcript: Ardagh Metal Packaging beats Q2 2025 forecasts

Ardagh Metal Packaging (AMBP) reported its second-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.08, compared to the forecasted $0.07. The company also outperformed revenue projections, reporting $1.45 billion against an expected $1.34 billion, maintaining its solid 8.39% year-over-year revenue growth. Despite these positive results, the stock faced a sharp decline of 18.97% in pre-market trading, closing at $3.76, down from $4.64. According to InvestingPro analysis, the company currently offers an attractive dividend yield of 10.47%.

Key Takeaways

• Ardagh Metal Packaging exceeded both EPS and revenue forecasts for Q2 2025.
• The company’s stock price dropped nearly 19% in pre-market trading.
• Strong growth was observed in the Americas, with a 21% increase in revenue.
• Full-year adjusted EBITDA guidance was upgraded to $705-$725 million.
• The company anticipates slower growth in the second half of 2025.

Company Performance

Ardagh Metal Packaging demonstrated robust performance in Q2 2025, driven by significant revenue growth in the Americas and Europe. The company’s adjusted EBITDA grew by 18% year-over-year, reflecting strong operational efficiency and market demand. With a market capitalization of $2.27 billion and substantial free cash flow of $305 million, the company shows promising financial strength. The global shipments rose by 5%, indicating healthy market penetration and customer engagement. InvestingPro subscribers can access detailed insights through comprehensive Pro Research Reports, available for over 1,400 US stocks including AMBP.

Financial Highlights

• Revenue: $1.45 billion, up from the forecasted $1.34 billion.
• EPS: $0.08, surpassing the expected $0.07.
• Adjusted EBITDA: Growth of 18% year-over-year.
• Net leverage: 5.3x, down 0.5x from Q2 2024.

Earnings vs. Forecast

Ardagh Metal Packaging reported an EPS of $0.08, beating the forecast of $0.07 by 14.29%. The revenue of $1.45 billion also exceeded expectations by 8.21%. This performance marks a positive deviation from forecasts, highlighting the company’s effective cost management and sales strategies.

Market Reaction

Despite the earnings beat, Ardagh Metal Packaging’s stock saw a significant decline of 18.97% in pre-market trading, closing at $3.76. The stock’s movement reflects investor caution, possibly due to concerns about future growth prospects and market conditions. Based on InvestingPro Fair Value analysis, the stock appears undervalued at current levels. Analyst price targets range from $4 to $5, suggesting potential upside, while the company maintains a relatively low beta of 0.56, indicating lower volatility compared to the broader market. The stock price remains within its 52-week range, with a high of $4.78 and a low of $2.5.

Outlook & Guidance

The company upgraded its full-year adjusted EBITDA guidance to $705-$725 million, reflecting confidence in its operational strategies. While the company maintains a modest gross profit margin of 12.22%, four analysts have recently revised their earnings estimates upward for the upcoming period, as reported by InvestingPro. The company anticipates slower growth in the latter half of 2025, with a focus on manufacturing efficiency and potential capacity expansion in Europe.

Executive Commentary

CEO Oliver Graham stated, "Our results were particularly driven by strong volume growth in The Americas," underscoring the region’s significant contribution to the company’s performance. He also noted, "We’ve still got cans gaining share in the mix," highlighting the company’s competitive advantage in the can packaging market.

Risks and Challenges

• Capacity constraints in European can sizes could limit growth.
• Slower growth anticipated in the second half of 2025.
• Potential impact of energy drinks on the carbonated soft drinks market.
• Macroeconomic pressures influencing consumer demand and raw material costs.

Q&A

During the earnings call, analysts inquired about the company’s performance in the North American soft drinks market and the capacity constraints in Europe. Executives addressed these concerns, confirming that contract negotiations for 2026-2027 are progressing well, and emphasized the company’s focus on innovation and market expansion.

Full transcript - Ardagh Metal Packaging SA (AMBP) Q2 2025:

Conference Operator: Ladies and gentlemen, welcome to the Ardagh Metal Packaging SA Quarterly Results Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Stephen Lyons. Please go ahead, sir.

Stephen Lyons, Investor Relations, Ardagh Metal Packaging: Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging’s second quarter twenty twenty five earnings call, which follows the earlier publication of AMP’s earnings release for the second quarter. I am joined today by Oliver Graham, AMP’s Chief Executive Officer and Stefan Schellinger, AMP’s Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP’s performance and outlook. AMP’s earnings release and related materials for the second quarter can be found on AMP’s website at ir.ardammetalpackaging.com.

Remarks today will include certain forward looking statements and include use of non IFRS financial measures. Actual results could vary materially from such statements. Please review the details of AMP’s forward looking statements disclaimer and reconciliation of non IFRS financial measures to IFRS financial measures in AMP’s earnings release. I will now turn the call over to Oliver Graham.

: Thanks, Stephen. We

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: continued our strong year to date performance in the second quarter with 5% global shipments growth and 18% adjusted EBITDA growth versus the prior year, again, ahead of guidance. Our results were particularly driven by strong volume growth in The Americas, reflecting the strength of our customer portfolio with its exposure to several key attractive and growing categories. Our performance is a testament to the resilience of our business despite macroeconomic uncertainties with shipments growth reported across each of our markets. Global beverage can growth continues to benefit from innovation and share gains in our customers’ packaging mix, and we still anticipate only a minimal impact to our business arriving from the tariff measures announced. Now looking at A and P’s Q2 results by segment.

In Europe, second quarter revenue increased by 9% to $615,000,000 or 4% on a constant currency basis compared with the same period in 2024, principally due to volume growth and the pass through of higher input cost to customers. Shipments grew by 1% for the quarter driven by growth in soft drinks, offsetting some weakness in beer. Can sales in beer despite outgrowing other packaging substrates were weaker in the quarter negatively impacted by adverse weather in certain geographies. Soft drinks saw good growth especially in cans, not all of which we were able to follow, given constraints on certain can formats in the summer season. Second quarter adjusted EBITDA in Europe decreased by 3% to $77,000,000 or by 6% on a constant currency basis, in line with our expectations, reflecting headwinds related to input costs.

This included a temporary impact related to metal timing given falling aluminum prices during the quarter alongside the expected headwinds this year related to negative PPI and higher aluminum conversion costs. This was partly offset by volume growth and lower operational and overhead costs. Beverage cans continue to take share in our customers’ European packaging mix, and our expectation for shipments growth is around 3% for full year 2025. Capacity remains tight in the season in certain geographies and can sizes, and we expect that the continued ramp up of our more recently installed capacity and flexibility investments will support near term growth. In The Americas, revenue in the second quarter increased by 21% to $840,000,000 which reflected higher volumes in the pass through of higher input costs to customers, including the impact of the higher Midwest premium in The US.

Americas adjusted EBITDA for the quarter increased by 34% to $133,000,000 due to favorable volume growth, category mix, and lower operating costs. In North America, shipments increased by 8% for the quarter, a continuation of strong growth from the first quarter and reflecting our portfolio’s mix of attractive and growing customers and product categories. Market demand for nonalcoholic beverages in cans was strong in the quarter with growth in carbonated soft drinks and strong growth in both sparkling waters and in the energy drinks category, which continued its strong quarter one growth and grew by a double digit percentage. We maintain our guidance for full year North America shipments of mid single digit growth. In Brazil, second quarter beverage can shipments increased by 12%, reflecting favorable customer mix as we outperformed the industry, which grew only modestly post carnival.

We retained our guidance for full year shipment growth for Brazil of at least low single digit percentage. This reflects the overall softer expected industry backdrop for the second half of the year. In summary, for The Americas, we expect shipments growth of mid single digit percentage for 2025. I’ll hand over now to Stefan to talk you through our financial position before finishing with some concluding remarks.

Stefan Schellinger, Chief Financial Officer, Ardagh Metal Packaging: Thank you, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $680,000,000 We note that in addition to our strong liquidity position, we have no near term bond maturities. Net leverage of 5.3 times net debt over last twelve months adjusted EBITDA represents a decline of half a turn of leverage versus Q2 twenty twenty four, reflecting adjusted EBITDA growth. It remains our expectation that leverage ratio at year end will be around five times. We reiterate our expectation for adjusted free cash flow for 2025 of at least $150,000,000 In terms of the various components of free cash flow, our expectations are mostly in line with what we said in April.

So we still expect maintenance CapEx of around $135,000,000 gross CapEx of around 70,000,000 lease principal repayments of just over $100,000,000 cash interest of just over $200,000,000 as well as a small outflow in working capital. We now expect cash tax closer to approximately 40,000,000 and as well as small exceptional cash outflows of approximately low teens millions. We have today announced our quarterly ordinary dividend of $0.10 per share. And with that, I’ll hand it back to Ulf.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Thanks, Stefan. So just before moving to take your questions, just to recap on our performance and key messages. So firstly, adjusted EBITDA growth in the second quarter of 18% was ahead of guidance underpinned by global shipments growth of 5% and in particular, a strong performance in The Americas. And across our markets, the beverage can continues to outperform other substrates in the customer’s packaging mix supporting our our growth. So reflecting our quarter two outperformance and favorable currency movements and assuming no further adverse change to the current macro environment, we are upgrading our full year adjusted EBITDA guidance.

Full year adjusted EBITDA is now expected to be in the range of $7.00 $5,000,000 to $725,000,000 based on current FX rates. We continue to expect full year shipments growth for A and P to be between 34%. In terms of guidance for the third quarter, adjusted EBITDA is expected to be in the range of between 200,000,000 and $210,000,000 ahead of the prior year of $196,000,000 So having made these opening remarks, we now proceed to take any questions that you may have.

Conference Operator: If you have dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you’re using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We’ll pause for just a moment to allow everyone the opportunity to signal for a question. And our first question comes from Stefan Diaz with Morgan Stanley.

Stefan Diaz, Analyst, Morgan Stanley: Hi, Ali. Hi, Stefan. Thanks for taking my question. Maybe just to begin, another very strong quarter, as far as North American volumes. I know you called out some some category mix, but maybe if you could just, you know, dig into what you’re seeing, so far in North America and, you know, what your expectations are, for the region into the back half.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Sure. So, look, as you say, we called out, I think, the main categories that are performing well, which you can see in the in the public data. So soft drinks generally in cans, has had a strong, you know, four weeks, twelve weeks, fifty two weeks. I mean, the market as a whole is probably at a two to 3% level, which is very healthy given the the size of the market. And then within that, you know, CSD strong, energy drinks particularly strong.

So I think last year, we were all debating when the energy category would come back, and I think we had, you know, strong hopes for 2025, and those have certainly played through with double digit growth in in cans. And then the other one we picked out was sparkling waters. We also have strength in our portfolio on the on the cocktail side, which is which is doing very well with certain, you know, innovative new players. And and, again, I think we’re, you know, we’re on the right side of the market. Beer and cans, obviously, under pressure, with the beer market under pressure.

So being in soft drinks, I think, has been good for us. And then we also, I think, go with some, you know, strongly growing innovative, new customers as well as some some well established customers in those categories. So if we look to the second half, we’re not predicting it to be quite that strong. You know, it was particularly particularly good, you know, in the first half, somewhat ahead of our expectations. So we expect some reduction in that.

Still looks pretty healthy, which is why we’re still, you know, with our guidance, but but just not quite as strong as as we had it in the first half. And we think that the the category trends broadly stay similar, so, you know, strength in those soft drinks categories. And overall, you know, I’ve been saying it for a couple of years now. I think it reinforces that the, you know, the growth we’ve had since 2018, ’29 in North America. You know, we kept everything that we gained through the COVID period, now we see growth again thanks to the innovation that’s going into the can, thanks to the sustainability credentials of the can.

So very hopeful, you know, that we can sustain this overall level of performance for the market in North America.

Stefan Diaz, Analyst, Morgan Stanley: Thanks. That’s that’s that’s very helpful. And then I think you mentioned some capacity constraints in Europe, particularly with CSD. I guess, you just give a little more details around that? Maybe if you could size how much of the volume impact that had in the quarter and, you know, if you expect these headwinds to continue into the second half?

Thanks.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Sure. Yeah. So look, I think the story of of Europe was definitely that beer was a bit weaker, in general. You know, volumes weren’t weren’t great in in our markets, and can sales similarly suffered a bit for that. The can sales were ahead of other substrates.

So the strength was in soft drinks, there’s a lot of strength in soft drinks, but that was also particularly, in the energy category as well as CSD and in slim and sleek sizes that, you know, we were, a little bit short in the season because we have a strong beer position. So, you know, in the bigger can formats, that we can’t just immediately pivot into smaller smaller formats for soft drinks. So, although we’ve got a good network, lots of options across the market, we couldn’t follow all the growth, in the season. And that’s probably probably one to two points of growth, that we couldn’t follow on the soft drink side. I think looking into the second half, you know, I think that in q one, customers clearly built some, you know, good amount of inventory.

We had 5% growth q one. So we’re sort of around the 3% year to date, and that’s roughly our prediction for the full year. I think the market for cans remains very healthy in Europe. It’s on a long term trend of this sort of number. You know, we’ve seen other reporting, you know, a little bit higher, though, with a different geographic mix.

So, you know, it feels like the three or 4% market growth, you know, we’re around 3%, our prediction for the year. That feels the right sort of place. You know, I’m I’m very encouraged by just the ongoing growth for the European market overall.

Stefan Diaz, Analyst, Morgan Stanley: Thanks, Ali.

Conference Operator: And we’ll take our next question from Arun Viswanathan, RBC Capital Markets.

: Thanks for taking my question. Good morning. Congrats on the strong results. Just wanted to get some more color across, you know, maybe The Americas. It sounds like there was, you know, better than expected performance.

What do you think that was driven by? Was it strong promotional activity in the quarter? And then I guess, when you think about that looking ahead, do you expect any drop off in that sell through? Do you think customers potentially or or consumers potentially, hoarded product on those promotions, or, do you expect, you know, sell through to continue, you know, over the summer and into the fall? Thanks.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. No. Look. Good question. I think, it’s obviously hard to look into the the crystal ball.

Clearly, soft drinks promotions were strong in the first half, among the strongest we’ve seen. And therefore, you know, you can expect that customers were were buying up, what they could see. But, again, it’s it’s a pretty fast moving product, so I wouldn’t expect to see a huge amount of of, stockpiling. So I think it’ll depend, you know, what customers do in the second half on the on the promotional front, whether we see this exactly the same momentum. But, you know, it’s clear in our portfolio that not all of this is promotional.

Clearly, you know, we’ve got innovative drinks, new drinks coming to market in the gut health area, in the cocktails area. You know, sparkling water continues to be very strong. So we don’t see that as as particularly promotional. And, again, this this is more about, I think, innovation going into the can, which is, you know, more sustainable a sustainable way forward. So we are predicting that the second half isn’t quite as strong as the first half because the first half was really strong, but we’re not predicting it, you know, that it’s it’s terrible.

We’re we’re still seeing good growth in the second half in North America.

: Thanks for that. And then similarly, Europe, I guess, a little bit weaker than we expected, which is kinda surprising just given, you know, continued growth there. But, you know, maybe there’s some specific factors going on. So maybe you can just elaborate on your outlook there as you look into, the second half of the year and and ’26. Thanks.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Sure. Yeah. No. No. As I said, I think we’ve got some specific category geographic, you know, issues in the quarter.

So had a couple of markets that were particularly weak on beer. We had poor weather, particularly in the South. You know? So for whatever reason, the beer market wasn’t as strong as we anticipated and probably everyone anticipated in our geographies. And although, as I say, the can the can was outperforming the other substrates, the can was also under some pressure as a result of that.

And, again, I wouldn’t underestimate. I think customers did build inventory much more effectively this year than last year. I think they learned a lesson in last year when they were short inventory going into the season. And so, you know, probably the the average of our 5% q one and our 1% q two is is the right number to think about for the market, which is pretty much where we pick the market for the for the year and where we see our second half. And, you know, again, if I look into 2026, all the good trends are still there for Europe.

So we’ve still got cans gaining share in the mix. We’ve got Germany still with very low can penetration relative to other developed markets for all the reasons we’ve talked about. We’ve got, you know, gains, in soft drinks that are are pretty strong. I think the can sustainability credentials are only improving in Europe with, you know, higher recycled content rates and lower carbon footprint. So, you know, we see a lot of good trends, I think, for Europe going forward, and we’d anticipate these sorts of growth rates on average, you know, and maybe you can get some quarter to quarter volatility like this.

But, overall, the three to 4% feels like a good place to to pick the market.

: Great. Thanks. I could just ask one more. Just overall on your footprint, any regions where you feel, you would need to take action whether, to increase or decrease capacity? Thanks.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yes. Certainly no decrease, at this point. If if, you know, if we’re talking about Europe, I think, you know, we’re very tight. The market is clearly very tight in certain can sizes, particularly in the season. You know, our peers have announced some capacity growth.

I think the market needs that. We think this is a 90 plus billion market now growing at 3%, 4%, then, you know, you need some capacity added every year. Clearly, we’re getting, you know, to the point where we’ll have to think about capacity additions. We’ve got good growth this year in capacity as we ramp up existing investments. We’ll put some more flexibility into the network, But, you know, that’ll take us through ’26, but then we’ll have to look at, the situation.

And probably we’ll need to look at the South, before the North, but, you know, we’re evaluating that situation as we see our customer mix develop. And then if we’re talking the other regions, there’s still capacity to grow into in in North America, though, less than we would have thought at the beginning of the year given the strength of the growth. And in Brazil, I think we’ve signaled there is a decent amount of capacity for us to grow into, which has been hard curtailed, but but mainly in the Northeast where, you know, growth is a bit less in the market. But overall, I think, we feel pretty comfortable with our our position at the moment for the next, you know, twelve, eighteen months of growth.

: Great. Thanks a lot.

Stefan Schellinger, Chief Financial Officer, Ardagh Metal Packaging: Thanks.

Conference Operator: We’ll take our next question from Josh Spector with UBS.

Josh Spector, Analyst, UBS: Hi, good morning. First, I just wanted to ask on the European cost side, when you talked about some of the timing in aluminum, how much of an impact was that in the second quarter? And do you make that back up in 3Q and that there’s maybe some outperformance on margins, or is that something that would take longer than that?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. Look at I mean, these timing effects, they come and go. Sometimes they happen in the quarter. Sometimes they cross quarters. Don’t think we see it particularly being made up in ’3 q, but I’ll I’ll let Stefan comment.

But I’d say more just that that, yeah, they happen. They go up and down. It just happens that it was particularly concentrated in this quarter because of the, you know, all the tariff announcements and then the the weakening of the dollar, which particularly impacted the euro aluminum pricing and therefore the gap between when we buy it and when we sell it on to customers. But, Stefan, maybe you wanna add something?

Stefan Schellinger, Chief Financial Officer, Ardagh Metal Packaging: Yeah. Look. That that’s obviously right. It’s it’s sort of a timing between sort of the, the price we invoice the customer and the price of the what we procure. I wouldn’t expect it to come back unless sort of the the price moves again fundamentally and depending which direction.

So I think, probably we are through most of the effect in Q2, but I wouldn’t want this going sort of to be reversed sort of in near term.

Josh Spector, Analyst, UBS: Thanks. And then if I could ask about kind of your implied 4Q guidance, I don’t think anybody is going to blame anybody for being conservative at this point. But I guess if we look at the implied EBITDA, it’s potentially down significantly year on year in 4Q and is actually even below 2023 EBITDA. Is there anything specific that you’re seeing that would drive your assumptions there, either pull into 3Q or something else that you call out?

Stefan Schellinger, Chief Financial Officer, Ardagh Metal Packaging: No. I think I mean, you you mentioned that was the way, you know, it’s it’s an uncertain environment. Well, from a macro perspective, I think, you know, the the European side of of the business obviously is facing some cut cost headwinds we we talked about, so that will also impact sort of the the the q four. I think q four last year in Europe was also relative strong, you know, I did somewhat from a growth perspective quarter. And then I think, in in in South America, just, you know, relative to to half one, you know, as we said, we anticipate certainly a slowdown in terms of our own volume growth if significantly outperformed from the market and the overall market is relatively slow.

I think we see it at very low single digit growth. So these are probably a few things to call out here.

Josh Spector, Analyst, UBS: Okay. Thank you.

Conference Operator: And our next question comes from Richard Carlson with Wells Fargo.

Richard Carlson, Analyst, Wells Fargo: Hey, good morning, guys. I’m standing in for Gabe Haiti today. Just to follow-up, I guess, that about the good morning. Just to follow-up on the last question about the back half guide because I think that is something that’s catching a lot of people’s eyes today. Other than, you know, the slowdown and the growth that you guys have referenced, are there any other major cost pieces that are in there that we need to keep in mind when we’re modeling this out?

And then also just from that growth perspective, you’ve definitely had a lot of outperformance in North America so far year to date. Brazil looks quite good. I guess, maybe is a little bit disappointing, but but what are the really the the biggest moving pieces between the first half growth rates and the second half growth rates?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: So I think yeah. Look. I told a bit about the the different markets, but I think Europe, you know, we see roughly at the same rate in the second half. But we’re being a little bit cautious after, you know, a a difficult second quarter relative to expectations. And then for both Brazil and North America, are predicting some slowdown on on the rate.

As Stefan just said, the Brazil market has grown 1% year to date, and we’ve grown, you know, more than significantly more than that in 12% in in q two, you know, nearly 8% in year to date. So, again, that’s a result that’s been talked about on these calls and our peers calls. You know, we’re all serving the big brewers. Some of them promote in some quarters, some promote in other quarters. So you have to assume that your mix plays for you at some point, but doesn’t always play for you through the year.

So we’ve we’ve assumed some reversion to the mean in Brazil. And then, you know, again, in North America, we had such a strong first half that we haven’t seen that that that replicates fully through the the second half. So, you know, I think clearly applying some appropriate caution. And then as Stefan just said, I think q four is a way out. The macroeconomic environment remains uncertain.

And so, you know, we’re just reflecting that, I think, in in some appropriate caution relative to our q three guide, which is another another growth. So there’s no extra cost pieces. We’ve talked about the input costs on Europe. We don’t see any additional cost pieces as we go into the back half of the year. I think that’s right, isn’t it, Stefan?

Stefan Schellinger, Chief Financial Officer, Ardagh Metal Packaging: Yeah. That’s correct.

Richard Carlson, Analyst, Wells Fargo: Got it. Got it. Thank you for that. And then I guess just specific to the energy market, that’s been, of course, a really hot market here in North America. Probably gonna see some some tougher comps coming up soon.

But but what are you guys seeing there? And do you have a view on whether or not, you know, the incremental buyer of a of an energy beverage is is leaving sodas? Are they getting away from CSDs and maybe cannibalizing CSDs? And and if that is happening, how does that impact you guys? It seems like maybe your your exposure or your market share within energy is quite a bit higher than CSDs.

So just wondering if you, I guess, have thought about how some of the dynamics in the in the buying between CSDs and energy is is impacting you.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. We’re not seeing that. I mean, I think, you know, I don’t have any detailed data on exactly what the switching is, but we’re certainly seeing CSD in cans also with very good growth. We’re seeing, you know, continued share gain. I think I saw data saying we’re up to 56% and plastic down to forties.

So that switch is going on. So, you know, we’re seeing good growth, you know, from our perspective in both energy and and CSD, and we’re not seeing that that some sort of trade off. So, yeah, not not concerned about this that at this point. And then within the energy category, you’ve got, you know, new players that are performing strongly. You’ve got existing players performing strongly.

So I think it’s what we said last year that this is a a big strong category with very, you know, successful players who know all about innovation. And, you know, they had they took a breather last year, but they’ve really brought it back to the market in a strong way this year. So very pleasing that they’ve done that.

Richard Carlson, Analyst, Wells Fargo: Got it. And then just last one for me. Same question you guys have gotten the last few quarters was just, you know, on this the the MAHA movement, especially here in North America with switch to potentially less artificial sweeteners and dyes or things. Are you hearing any any any increased conversation from your customers about the potential headwind that that could be to their business?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: No. Really nothing specific, to be honest. And, you know, if I look at our position in those categories, you know, it still seems to be growing at the expense of other substrates. And and when I think about the impact of that, it could also pull more on other substrates. So, yeah, nothing nothing very specific on that to comment on.

Richard Carlson, Analyst, Wells Fargo: Great. Thanks, guys, and good luck in q q three q three.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Thank you.

Conference Operator: And once again, ladies and gentlemen, if you’d like to ask a question, Our next question comes from Michael Roxlin with Truist Securities.

Michael Roxlin, Analyst, Truist Securities: Yes. Hi, guys. This is Nico Piccini on for Mike. Thanks for taking my questions. I guess, first off, can you speak to any manufacturing efficiency that that could have contributed to the performance this year so far?

And, you know, how should we think about what you target there going forward?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. Look. I think, you know, we referenced in in the remarks that, there have been improved operational costs on both sides of the Atlantic. Obviously, North America helped by the fact that we’re running so, so full. We’re, you know, we’re very low inventory levels in North America for another year.

And, obviously, you know, when you run the plants for the unit cost drop and efficiencies grow, so that’s definitely helped. But then I think our Europe performance has been very pleasing on the manufacturing side, so good good production levels, you know, good cost performance. So overall, yeah, we’re happy with the network. We have manufacturing efficiency targets built in every year. You know, it’s the nature of can making.

So, yeah, we’re not gonna talk about them specifically. They’re part of our guidance, and, you know, we’re looking obviously very ambitiously at at, you know, cost savings and increased efficiency in our manufacturing network, and that’s supported by a number of of big programs within the business.

Michael Roxlin, Analyst, Truist Securities: Got it. Thank you very much. And then just, secondly, you know, if you could speak to maybe contract negotiations. I imagine at this point in the year, your twenty twenty six volumes are, you know, maybe largely contracted. But can you speak to how much it is for ’26 and how much you have, under contract for 2027?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. Like you say, we’re largely either contract or well through any negotiation process for 2026, so we’re we’re increasingly got good visibility there. And then ’27 actually is reasonably I mean, I don’t have the exact percentage to hand, but is is reasonably fully contracted. We’re getting through the the wave of CSD tenders in North America now. Europe has been, you know, a decent amount of activity this year, which is is closing and should take us through 2027.

So, yeah, I think, you know, the business is getting through that, if you like, the the wave of post COVID contract renewals, and we and we’re starting to get pretty good visibility on ’26 and beyond, you know, volume wise.

Michael Roxlin, Analyst, Truist Securities: Got it. Thank you very much. Good luck in the quarter.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Thank you.

Conference Operator: And it appears there are no further questions. One moment. We do have mister Stefan Diaz that resignaled.

Stefan Diaz, Analyst, Morgan Stanley: Terry that the, you know, European, market is rather tight. And, you know, just given your cash flow profile and, you know, some some cash commitments with the with the dividend, do you think you’re well positioned to, you know, capture some of that future growth, if we, you know, think on twelve to eighteen months if if you feel like you need to, expand capacity in the region?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. I’ll start, and then I’ll let Stefan, pick it up as well. But as I mentioned, we’re ramping up, you know, probably in the order of a billion of capacity this year, with the projects that we completed in ’23 and ’24 and with some improvements to those projects and some speed ups. So that’s already taking us, you know, healthily through this year and and into next year. And then we have another, some other areas where we can still see capacity growth in the existing footprint next year.

And then I think we signaled, you know, we might have to add something under the existing footprint, you know, going into ’27. And we’ve talked about, you know, CapEx levels for this year being, you know, broadly similar probably next year. So I think that when I look at our growth profile for Europe, I’m not concerned. I think we can, you know, manage that within our existing, forecast, and, you know, stay relevant and competitive in the market. But I’ll also pass that one to Stefan.

Stefan Schellinger, Chief Financial Officer, Ardagh Metal Packaging: Yeah. Look. I I fully agree. I mean, obviously, we we gave indications for for this year in terms of growth CapEx. I think, all all projects, I think, you know, we have line of sight of, and and we feel good return opportunities in terms of, extension speed ups.

I think we are going ahead with, and I think for the foreseeable future, I think we have good visibility sort of in our pipeline of projects, and I think we can we can address those within the the existing sort of cash flow profile.

Stefan Diaz, Analyst, Morgan Stanley: Thanks. Thanks. That’s, really helpful. So I guess maybe just, like, digging into that a little further. So, you know, potentially any capacity that needs to be added, you know, beyond the 1,000,000,000 that you mentioned that you’re adding this year, would be more, you know, brownfield type projects if if we sort of assume demand kinda kinda stays in the on the same trajectory than than needing greenfields.

Is is that a correct assumption?

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Yeah. I think I mean, that’s definitely a good assumption. I think, I mean, Brownfield could be you know, could imply to some listeners, you know, that you need to build some big new plant, but it’s an existing building. Right? We’re talking, you know, genuinely under the roof.

So existing facilities, which obviously are the most efficient, and lowest cost capital investment. So that’s, you know, what we see for the next two, three years in Europe that we we certainly don’t need to be building major new facilities at this point.

Stefan Diaz, Analyst, Morgan Stanley: Great. Thank you both, and, good luck in the back half of the year.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Thanks, Steph. Thank you.

Conference Operator: And it appears there are no further questions at this time. I’ll turn the conference back to Oliver Graham for any additional or closing remarks.

Oliver Graham, Chief Executive Officer, Ardagh Metal Packaging: Thanks, Lisa. So thank you for for joining our call. So just to summarize, another very strong quarter for AMP. Global shipments grew by 5% in the quarter, adjusted EBITDA by 18%, ahead of guidance, particularly driven by The Americas. And reflecting that quarter two outperformance and favorable currency movements, we’re we’re again raising our expectations for full year adjusted EBITDA.

So with that, thanks for joining, and we look forward to talking to you again at the q three results.

Conference Operator: Thank you, ladies and gentlemen. This concludes our call today. You may now disconnect from the call, and thank you for participating.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.