Ardagh Metal Packaging S.A. — FY2023 Form 20-F
Reporting period: Year ended December 31, 2023; this is an annual report, not a standalone Q4 filing. Financial statements are prepared under IFRS and presented in U.S. dollars. The company supplies metal beverage cans and ends, principally in Europe and the Americas.
Key financial results
| Metric ($ millions, except percentages and per-share data) | 2023 | 2022 |
|---|---|---|
| Revenue | 4,812 | 4,689 |
| Gross profit / gross margin | 474 / 9.9% | 526 / 11.2% |
| Operating profit | 76 | 176 |
| Net finance expense/(income) | 147 expense | 80 income |
| Net loss/profit | (50) | 237 |
| Basic and diluted EPS | $(0.12) | $0.38 |
| Adjusted EBITDA | 600 | 625 |
| Net cash from operating activities | 616 | 205 |
| Cash generated from operations, before interest and tax | 814 | 322 |
| Capital expenditure | 378 | 595 |
Revenue rose 3%, reflecting favorable volume/mix and higher input-cost recovery, partly offset by currency effects and the pass-through of lower input costs. Gross margin declined 130 basis points; excluding exceptional cost of sales, it was 11.8%, down from 12.6%. Adjusted EBITDA declined 4%. Cash from operations benefited substantially from a $270 million working-capital inflow, versus a $202 million outflow in 2022; net interest paid was $174 million.
- Segments: Europe revenue was $2.030 billion and Adjusted EBITDA was $211 million (up 6%). Americas revenue was $2.782 billion and Adjusted EBITDA was $389 million (down 8%). Higher operating costs and lower input-cost recovery weighed on Americas EBITDA.
- Debt and liquidity: Year-end borrowings were $3.762 billion and net debt was $3.312 billion, up from $3.037 billion. Cash, cash equivalents and restricted cash were $443 million; undrawn availability under the Global Asset Based Loan facility was $369 million, for reported available liquidity of $812 million. Net-debt leverage was 5.52x Adjusted EBITDA, versus 4.86x.
- Debt profile: Senior notes totalled $3.3 billion, with maturities mainly in 2027–2029. The notes were 100% fixed-rate, with a 3.8% weighted-average rate. Covenants restrict, among other things, additional debt and dividends.
- Other balance-sheet items: Goodwill was approximately $1.0 billion; employee benefit obligations, net of assets, were $147 million. Total equity was $106 million, down from $455 million.
Material changes and unusual items
- Net results swung from $237 million profit to a $50 million loss. Net finance moved from $80 million income to $147 million expense, largely because 2022 included a substantially larger fair-value gain on earnout shares and warrants. In 2023, exceptional finance income was $58 million, including a $53 million gain on earnout shares and a $5 million gain on warrants.
- 2023 exceptional operating items included $36 million of start-up and other costs, $18 million of property, plant and equipment impairment, $38 million of restructuring costs and $14 million of transaction-related and other costs. Restructuring and impairment primarily related to the Whitehouse, Ohio facility and steel-line closures at Weissenthurm, Germany.
- Management announced the Whitehouse closure in November 2023; it was completed in February 2024. The growth investment program was described as near completion; 2023 capital expenditure included $266 million for that program.
- The company acquired a majority stake in digital can printer NOMOQ in February 2023. The filing says a further €10 million may be payable in 2024, subject to milestones.
Outlook, commentary and risks
The filing provides no quantified earnings or revenue guidance. Management said cash balances, operating cash flow and credit facilities were expected to cover maintenance capital expenditure, interest and dividends for at least the next 12 months. It intends to continue a regular quarterly dividend of $0.10 per ordinary share, subject to Board approval and applicable restrictions. The $1.8 billion 2021–2024 growth investment program was described as near completion.
Key risks include substantial debt and refinancing/covenant exposure; oversupply or weaker demand amid industry capacity additions; aluminum, energy and other input-cost volatility and limits on cost pass-through; customer concentration (the top ten represented approximately 55% of 2023 revenue); seasonal demand; currency and operational disruption; and climate, environmental, regulatory and cybersecurity risks. More than 80% of revenue was backed by multi-year supply agreements, generally two to seven years, but contracts may expire or be terminated under specified circumstances.
- Receivables sold through factoring programs were $643 million at year-end, up from $530 million. These sales are accounted for as transfers outside the balance sheet; monitor their scale and cash-flow implications.
- Services from controlling parent Ardagh Group cost $39 million in 2023, with the same stated fee for 2024. From year-end 2024, services are to be priced at fully allocated cost or another negotiated price, which could change costs and operating arrangements.
- Ardagh Group indirectly owned approximately 76% of ordinary shares and all preferred shares. Preferred shares carry a cumulative annual dividend of 9% of nominal value; ordinary-share distributions are subject to terms in the Articles.
- Management and the auditor reported effective internal control over financial reporting at December 31, 2023. The auditor identified valuation of the earnout-share liability as a critical audit matter; its reported year-end fair value was $23 million and depends significantly on estimated volatility.
Important facts for investors to verify
- Whether underlying operating performance improves, given lower gross margin and Adjusted EBITDA, and the causes of segment-level divergence.
- How much 2023 operating cash flow depended on the working-capital inflow, and whether factoring activity remains elevated.
- Debt covenant headroom, refinancing plans and the sustainability of 5.52x net-debt leverage alongside dividends and remaining investment commitments.
- The assumptions behind the earnout-share and warrant fair values and their effect on reported earnings versus operating performance.
- Costs and execution following the Whitehouse closure, Weissenthurm changes, NOMOQ milestone payments and the 2024 transition in parent-provided services.
- Dividend capacity, including the preferred-share dividend terms, and the effect of customer concentration and contract renewals.