Q2 2025 Ardagh Metal Packaging SA Earnings Call

July 24, 2025

Operator: Mental Packaging Essay Quarterly Results Conference Call. Today's conference is being recorded.

Operator: At this time, I'd like to turn the conference over to Stephen Lyons. Please go ahead, sir. Thank you operator and welcome everybody.

Ladies and gentlemen, welcome to the ardagh metal packaging essay quarterly results conference call. Today's conference is being recorded at this time. I'd like to turn the conference over to Steven Lyons. Please go ahead, sir.

Stephen Lyons: Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's Q2 2025 earnings call, which follows the earlier publication of AMP's earnings release for Q2. 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 Q2 can be found on AMP's website at ir.ardaghmetalpackaging.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.

Stephen Lyons: Thank you for joining today for ARDA Metal Packaging's second quarter 2025 earnings call, which follows the earlier publication of AMP's earnings release for the second quarter.

Stephen Lyons: I'm joined today by Oliver Graham, AMP's Chief Executive Officer, and Stefan Schellinger, AMP's Chief Financial Officer.

Stephen Lyons: 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.irdiametalpackaging.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.

Steven Lyons: Thank you, operator and welcome everybody. Thank you for joining today, for ardagh metal packaging, second quarter, 2025 earnings call, which follows the earlier, publication of amp's earnings release of the second quarter. I'm joined today by Oliver Graham amps, chief executive officer and Stefan schellinger amp's. Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around amt's performance and Outlook.

Steven Lyons: Amp's earnings release and related materials. For the second quarter can be found on amp's website at irdi metal packaging.com

Steven Lyons: Remarks today will include certain forward-looking statements and include use of non-ifrs financial measures.

Oliver Graham: I will now turn the call over to Oliver Graham. Thanks, Stephen. We continued our strong year-to-date performance in the second quarter with 5% global shipments growth and 18% adjusted EBITDA growth versus the prior years, 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.

Steven Lyons: Actual results could vary materially from such statements. Please review, the details of amps forward-looking statements disclaimer and Reconciliation of non IFRS Financial measures to IFS. For financial measures in amp's earnings release.

Oliver Graham: Thanks, Stephen. We continued our strong year-to-date performance in Q2, 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 AMP's Q2 results by segment.

Steven Lyons: I will now turn the call over to Oliver Graham.

Oliver Graham: Thanks, Stephen.

Oliver Graham: We continue our strong, year-to-date performance, in the second quarter with 5%, Global shipments growth, and 18% adjusted ebit growth versus the prior year. Again, ahead of guidance,

Oliver Graham: 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.

Oliver Graham: Our performance is assessment to the resilience of our business. Despite macroeconomic uncertainties with shipments, growth reported across each of our markets

Oliver Graham: And we still anticipate only a minimal impact to our business arriving from the tariff measures announced.

Oliver Graham: Global beverage can growth continues to benefit from Innovation and share gains in our customers, packaging, mix.

Oliver Graham: And we still anticipate only a minimal impact to our business arriving from the Tariff measures announced.

Oliver Graham: Now looking at AMP's Q2 results by segment. In Europe, second quarter revenue increased by 9% to $615 million, 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 costs to customers. Shipments grew by 1% for the quarter, driven by growth in soft drinks, offsetting some weakness in beer. Canned 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, giving constraints on certain can formats in the summer season.

Oliver Graham: In Europe, Q2 revenue increased by 9% to $650 million, 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, giving constraints on certain can formats in the summer season. Q2 Adjusted EBITDA in Europe decreased by 3% to $77 million, or by 6% on a constant currency basis, in line with our expectations, reflecting headwinds related to input costs.

Oliver Graham: Principally due to volume growth in the past year of higher input cost to customers.

Oliver Graham: Shipments grew by 1% for the quarter driven by growth in soft drinks. Offsetting some weakness in beer,

Oliver Graham: Can sales in beer, despite out growing other packaging, substrates were weaker in the quarter. Negatively impacted by adverse weather in certain geographies.

Oliver Graham: Second quarter adjusted EBITDA in Europe decreased by 3% to $77 million, or by 6% on a constant currency basis in line with our expectations, reflecting headwinds related to input costs. This increased a temporary impact related to metal timing given falling aluminium prices during the quarter, alongside the expected headwinds this year related to negative PPI and higher aluminium 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.

Oliver Graham: Soft drinks saw good growth especially in cans. Not all of which we were able to follow giving constraints on certain can formats in the summer season.

Oliver Graham: 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 million, 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.

Oliver Graham: Second quarter, adjusted e bar in Europe, decreased by 3% to 777 million dollars 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. Give them falling aluminium. Prices during the quarter alongside the expected headwinds this year related to negative PPI and higher aluminium conversion costs

Oliver Graham: This was partly offset by volume growth and lower operational and overhead costs.

Oliver Graham: 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.

Oliver Graham: Beverage cans, contain take care in our customers, European packaging, mix and our expectation. For shipments growth is around 3%, for fully year 2025.

Oliver Graham: Capacity remains site in the season in certain geographies in Ken sizes. And we expect that the continued ramp up of our more recently installed capacity and flexibility investments will support near-term. Growth,

Oliver Graham: In the Americas, revenue in the second quarter increased by 21 percent to $840 million, which reflected higher volumes in the past year of higher input costs to customers, including the impact of the higher Midwest premium in the U.S. America's adjusted EBITDA for the quarter increased by 34% to $133 million 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 non-alcoholic 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.

Oliver Graham: Americas Adjusted EBITDA for the quarter increased by 34% to $133 million 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 Q1 and reflecting our portfolio's mix of attractive and growing customers and product categories. Market demand for non-alcoholic 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 Q1 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, Q2 beverage can shipments increased by 12%, reflecting favorable customer mix as we outperformed the industry, which grew only modestly post-Carnival.

Oliver Graham: In the Americas Revenue. In the second quarter, increased by 21% to 840 million, which reflected higher volumes in the pasture of higher input. Cost to customers including the impact of the higher Midwest premium in the US

Oliver Graham: America's adjusted ebit data for the quarter increased by 34%, to 133, million due, to favorable volume growth category, mix and lower operating costs.

Oliver Graham: In North America shipments increased by 8% for the quarter. A continuation of strong growth from the first quarter and reflecting our portfolios. Mix of attractive and growing customers and product categories.

Oliver Graham: We maintain our guidance for four-year North America shipments of mid-single digit growth. In Brazil, second-quarter beverage can shipments increased by 12 percent, reflecting favourable customer mix, as we outperformed the industry, which grew only modestly post-Carnival. We retain our guidance for four-year shipment growth for Brazil of at least low single-digit percentage. This reflects the overall software 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.

Oliver Graham: Market demand for non-alcoholic beverages are encounters with 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, 1 group and group our double digit percentage.

Oliver Graham: We maintain our guidance for fully in North America shipments of mid single digit growth.

Oliver Graham: We retain 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.

Oliver Graham: In Brazil. Second quarter beverage can shipments increased by 12% reflecting favorable customer mix as we outperform the industry which grew only modestly post Carnival.

Oliver Graham: We retain our guidance for fully a 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.

Stephen Lyons: I'll hand over now to Stephen to talk you through our financial position before finishing with some concluding remarks. Thank you, Olli, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $680 million. 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 the last 12 months adjusted EBITDA represents a decline of half a turn of leverage versus Q2 2024, reflecting adjusted EBITDA growth. It remains our expectation that leverage ratio at year end will be around five times.

Oliver Graham: In summary for the Americas. We expect shipments grow of mid single digit percentage for 2025

Speaker Change: I'll hand over. Now, to 7 to talk you through our financial position. We're finishing with some concluding remarks.

Stefan Schellinger: Thank you, Oli, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $680 million. We note that in addition to our strong liquidity position, we have no near-term bond maturities. Net leverage of 5.3x net debt over the last twelve months adjusted EBITDA represents a decline of half a turn of leverage versus Q2 2024, reflecting adjusted EBITDA growth. It remains our expectation that leverage ratio at year-end will be around 5x. We reiterate our expectation for adjusted free cash flow for 2025 of at least $150 million. In terms of the various components of free cash flow, our expectations are mostly in line with what we said in April.

Speaker Change: Thank you, honor and good morning. Good afternoon everyone. We ended the quarter with a robust liquidity position of 680 million. We know that in addition to our strong liquidity position, we have no near-term bond maturities

Speaker Change: Net leverage of 5.3 times net debt over the last 12 months. Adjusted iida represents a decline of half a turn of Leverage versus Q2 2024 reflecting adjusted EV dark Road.

Stephen Lyons: We reiterate our expectation for adjusted free cash flow for 2025 of at least $150 million. 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 million, gross capex of around $70 million, lease principal repayments of just over $100 million, cash interest just over 200 million as well as a small outflow in working capital.

Speaker Change: It remains our expectation. That leverage ratio at year, end will be around 5 times.

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

Speaker Change: We reiterate our expectations for adjusted free cash flow for 2025 of at least 150 million dollars in terms of the various components of free cash flow or expectations are mostly in line with what we said in April.

Speaker Change: So we still expect maintenance care packs of around 135 million, gross capex of around 70 million lease principal repayments of just over 100 million cash interest.

Speaker Change: Of just over 200 million.

Stephen Lyons: We now expect cash tax closer to approximately 40 million and as well as small exceptional cash outflows of approximately low teens million.

Stephen Lyons: We have today announced our quarterly ordinary dividend of $0.10 per share. And with that, I'll hand it back to Olli. Thanks, Stephan.

Speaker Change: As well as a small outflow in working capital. We now expect cash tax closer to approximately 40 million and as far as small exceptional cash, outflows of approximately low, teens Millions,

Oliver Graham: Thanks, Stefan. Just before we move to take your questions, just to recap on our performance and key messages. Firstly, Adjusted EBITDA growth in Q2 of 18% was ahead of guidance, underpinned by global shipments growth of 5% and, in particular, a strong performance in the Americas. Across our markets, the beverage can continues to outperform other substrates in the customer's packaging mix, supporting our growth. Reflecting our Q2 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 $705 to 725 million, based on current FX rates.

Oliver Graham: 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 growth. So reflecting our quarter 2 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 $705 to $725 million, based on current FX rates.

Speaker Change: We have today announced our quarterly ordinary dividend of 10 cents per share. And with that, I'll hand it back to all.

Steven Lyons: Thanks, Stephen.

Oliver Graham: We continue to expect full year shipments growth for AMP to be between 3% and 4%. In terms of guns, for the third quarter, adjusted EBITDA is expected to be in the range of between $200 million and $210 million ahead of the prior year of $196 million.

Oliver Graham: We continue to expect full-year shipments growth for AMP to be between 3% and 4%. In terms of guidance for Q3, Adjusted EBITDA is expected to be in the range of between $200 and $210 million, ahead of the prior year of $196 million. So having made these opening remarks, we'll now proceed to take any questions that you may have.

Stephen Lyons: So having made these opening remarks, we now proceed to take any questions that you may have. If you have dialed in via the telephone and would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone the opportunity to signal for a question.

Steven Lyons: In terms of guns. So, the third quarter adjusted i-bidder is expected to be in the range of between 200 and 210 million ahead of the prior year of 196 million.

Speaker Change: So having made these opening remarks from our proceeds, to take any questions that you may have.

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. Our first question comes from Stefan Diaz with Morgan Stanley.

Speaker Change: If you have dialed in via the telephone, and would like to ask a question, please signal by pressing star 1 on your telephone keypad, if you're using a speaker-phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question, we'll pause for just a moment to allow everyone the opportunity to signal for a question.

Stephan Diaz: And our first question comes from Stephan Diaz with 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.

Speaker Change: And our first question comes from Stephan Diaz with Morgan Stanley.

Stefan Diaz: Hi, Ollie. 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: 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. Sure. So, look, as you say, we called out, I think, the main categories that are performing well, which you can see in the public data. So, soft drinks generally in cans has had a strong, you know, four weeks, 12 weeks, 52 weeks. I mean, the market as a whole is probably at a two to three percent level, which is very healthy given the size of the market.

Speaker Change: Hi Ollie. Hi Stefan. Um, thanks for taking my question. Um maybe just to begin another very strong quarter um as far as North America and volumes. Um, I know you called out some some category mix but maybe if you could just, you know, dig into what you're seeing, uh, so far in North America and you know what your expectations are uh for the region into the back half?

Oliver Graham: 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, 4 weeks, 12 weeks, 52 weeks. I mean, the market as a whole is probably at a 2 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.

Speaker Change: Sure. Um so as you say we call that I think the main categories that are performing well uh which you can see in the in the public data. So soft drinks generally in cans. Um has had a strong

Oliver Graham: And then within that, you know, CFD 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 cans. And then the other one we picked out was sparkling waters. We also have strength in our portfolio on the cocktail side, which is doing very well with certain, you know, new players. And again, I think we're, you know, we're on the right side of the market, beer in cans obviously under pressure, with the beer market under pressure.

Oliver Graham: We also have strength in our portfolio on the cocktail side, which is doing very well with certain, you know, innovative new players. And again, I think we're, you know, we're on the right side of the market. Beer in 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, are with some, you know, strongly growing innovative new customers, as well as 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 good, you know, in the first half, somewhat ahead of our expectations. So we expect some reduction in that.

Speaker Change: You know, 4 weeks, 12 weeks, 52 weeks. I mean, the market as a whole is probably at a 2 to 3% level, which is very healthy, given the the size of the market. Um, and then within that, you know, CSD strong, um, 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 are certainly played through with double digit growth in in cans, and then the other 1 we picked out was Sparkling Waters. We also have strength in our portfolio, on the, on the cocktail side, um, 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 in cans, obviously, under pressure

Oliver Graham: So, being in soft drinks I think has been good for us. And then we also, I think, are with some, you know, strongly growing innovative new customers as well as some well-established customers in those categories.

Oliver Graham: So, if we look to the second half, we're not predicting it to be quite that strong. You know, it was particularly good, you know, in the first half, somewhat ahead of our expectations. So, we expect some reduction. That still looks pretty healthy, which is why we're still, you know, with our guidance, but just not quite as strong as we had it in the first half. And we think that 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 the, you know, the growth we've had since 2018-19 in North America.

Oliver Graham: 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, look, you know, I've been saying it for a couple of years now, I think it reinforces the, the, you know, the growth we've had since 2018, 2019 in North America. You know, we kept everything that we gained through the COVID period, and 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.

Speaker Change: Uh, with the beer market Under Pressure. So, being in soft drink setting has been good for us. And then we also I think are with some, you know, strongly growing Innovative, uh, new customers, as well as some some well, established customers in those categories. So um, if we look to the second half, we're not predicting it to be quite that strong. Um, you know, it was particularly particularly good, you know, in the first half, um, some ahead of our expectations. So we expect some reduction in that still looks pretty healthy.

Oliver Graham: You know, we kept everything that we gained through the COVID period, and 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.

Speaker Change: Uh, which is why I was still, you know, with our guidance. Um, but but just not quite as strong as as we had it in the first half. Um, and we think that the, the category Jones broadly stay similar. So, you know, strengthen those soft drinks categories. Um, 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 2019 in North America, you know, we kept everything that we gained through the co period and 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.

Stephan Diaz: Thanks, that's very helpful.

Stefan Diaz: Thanks. That's very helpful. And then, I think you mentioned some capacity constraints in Europe, particularly with CSD. I guess could 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.

Stephan Diaz: And then, I think you mentioned some capacity constraints in Europe, particularly with CSD.

Oliver Graham: I guess, could 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. Sure, yeah. So, look, I think the story of Europe was definitely that beer was a bit weaker in general. You know, volumes weren't great in our markets and can sales similarly suffered a bit for that, though can sales were ahead of other substrates. So, the strength was in soft drinks and there was 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.

Speaker Change: Uh, thanks. That's uh, that's that's very helpful and then, um, I think you mentioned some capacity constraints in Europe, particularly with CSD, um, I guess, could you just give a little more details around that? Um, maybe if you could size how much of the volume impact that had in the corner? And, you know, if you expect these headwinds to continue into the second half, thanks.

Oliver Graham: Sure. Yeah. So look, I think the story of Europe was definitely that beer was a bit weaker in general. You know, volumes weren't great in our markets, and can sales similarly suffered a bit for that, though can sales were ahead of other substrates. So the strength was in soft drinks, and there was 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 formats for soft drinks.

Speaker Change: Sure. Yeah, so look I think the story of of Europe was definitely the the was a bit weaker. Um in general, you know, volumes were weren't great in in our markets and can sales similarly uh, suffered a bit for that. The canals were ahead of other substrates. So the strength was in soft drinks and there was a lot of strength in soft drinks, but

Oliver Graham: So, you know, in the bigger can formats that we can't just immediately pivot into 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 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 Q1 customers clearly built some, you know, a good amount of inventory. We had 5% growth Q1. So, we're sort of around the 3% year to date and that's roughly our prediction for the full year.

Oliver Graham: 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 1 to 2 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 Q1, customers clearly built some, you know, good amount of inventory. We had 5% growth Q1, 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.

Speaker Change: Was also particularly, uh, in the energy category as well as CSD and in slim and Sleek sizes that, you know, we were, uh, a little bit short in the season because we have a strong beer position. Um, so, you know, in the bigger camp formats, um, that we can't just immediately pivot into smaller smaller formats for soft drinks. So, um, although we've got a good Network, lots of options across the market. Uh, we couldn't follow all the growth, um, in the season and that's probably probably 1 to 2 points of growth uh, that we couldn't follow uh, on the soft drink side. I think looking into the second half.

Oliver Graham: 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 3%, 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 very encouraged by just the ongoing growth for the European market overall.

Oliver Graham: So, you know, it feels like the 3% 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 very encouraged by just the ongoing growth of the European market overall.

Speaker Change: Mentary we had 5% growth q1. 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. Um, it's on a long-term trend of this sort of number. Um you know, we've seen other reporting and you know a little bit higher though with a different Geographic mix. So you know it feels like the 3 or 4% market growth, you know, we're around 3%. Our prediction for the year that feels the right sort of place. Um you know and very encouraged by just the ongoing growth for the European market overall.

Operator: Thanks, Holly. And ladies and gentlemen, if you find that your question has been answered, you may remove yourself from the queue by pressing star 2.

Stefan Diaz: Thanks, Ali.

Speaker Change: Thanks Ali.

Operator: Ladies and gentlemen, if you find that your question has been answered, you may remove yourself from the queue by pressing star two. We'll take our next question from Arun Viswanathan, RBC Capital Markets.

Arun Deswanathan: And we'll take our next question from Arun Deswanathan, RBC Capital Markets. Thanks for taking my question. Good morning. Congrats on the strong results. I 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 consumers potentially hoarded product on those promotions? Or do you expect sell-through to continue, you know, over the summer and into the fall?

Speaker Change: And ladies and gentlemen, if you find that, your question has been answered. You may remove yourself with the queue, by pressing star 2.

Speaker Change: And we'll take our next question from aru this 1, a RBC Capital markets.

Arun Viswanathan: 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 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.

Speaker Change: Thanks for taking my question. Uh, good morning congrats on the strong results. Um,

Speaker Change: Just wanted to get some more color across. Uh, you know, maybe the Americas, it sounds like there was, um, 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, um, when you think about that, looking ahead, um, do you expect any drop off in that sell through? Do you think, uh, customers potentially, or or consumers potentially, um, hoarded product on, uh, those promotions or do you expect

Oliver Graham: Thanks. Yeah. No, look, good question. I think it's obviously hard to look into the crystal ball. Clearly, soft drinks promotions were strong in the first half, among the strongest we've seen. And therefore, you can expect that customers were buying up what they could see. But again, it's a pretty fast-moving product. So I wouldn't expect to see a huge amount of stockpiling. So I think it will depend on what customers do in the second half on the promotional front, whether we see exactly the same momentum. But it's clear in our portfolio that not all of this is promotional.

Speaker Change: You know, sell through to continue, you know, over the summer and into the fall. Thanks.

Oliver Graham: Yeah. No, look, good question. I think it's obviously hard to look into 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 buying up what they could see. But again, it's a pretty fast-moving product, so wouldn't expect to see a huge amount of stockpiling. So I think it'll depend, you know, what customers do in the second half 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.

Oliver Graham: Clearly, we've got innovative drinks, new drinks coming to market in the gut health area, in the cocktails area. Sparkling water continues to be very strong. So we don't see that as particularly promotional. And again, this is more about, I think, innovation going into the can, which is a more 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 that it's terrible. We're still seeing good growth in the second half in North America. Thanks for that.

Oliver Graham: So we don't see that as particularly promotional. And again, it's 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 that, you know, that it's terrible. We're still seeing good growth in the second half in North America.

Speaker Change: Yeah, no look, good question, I think. Um, it's obviously hard to look into the the crystal ball. Um, clearly soft drinks promotions were strong in the first half, um, among the strongest we've seen. Um, and therefore, you know, you can expect the customers were were buying up, um, what they could see. But again, it's, it's a pretty fast moving product. So it wouldn't expect to see a huge amount of of, um, stock piling. Um, so I think it will 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 um clearly you know, we've got Innovative dreams, new drinks coming to Market in the gut health area in the cocktails area. You know, sparkling water continues to be very strong. Um, so we don't see that as, as particularly Promotional and again it's this is more about I think Innovation going into the can which is, you know, more a sustainable, a sustainable Way Forward. So we are predicting that the second half isn't quite as strong as the first

Speaker Change: Up because the first up was really strong, uh, but we're not predicting that, um, you know, that it's it's terrible, we're still seeing good growth. Um, in the second half in North America.

Arun Viswanathan: Thanks for that. And then similarly, Europe, I guess a little bit weaker than we expected, which is kind of surprising, just given, you know, continued growth there. But, you know, maybe there are 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 2026. Thanks.

Arun Deswanathan: And then similarly, Europe, I guess a little bit weaker than we expected, which is kind of surprising just given, you know, continued growth there. But, you know, maybe there's some specific factors going on.

Oliver Graham: So maybe you can just elaborate on your outlook there as you look into the second half of the year and N26. Thanks. Sure. As I said, I think we've got some specific category geographic issues in the quarter, so had a couple of markets that were particularly weak on beer. We had poor weather, particularly in the south. For whatever reason, the beer market wasn't as strong as we anticipated and probably everyone anticipated in our geographies. Although, as I say, the can was outperforming the substrates, the can was also under some pressure as a result of that.

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

Oliver Graham: 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 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 their lesson last year when they were short inventory going into the season.

Oliver Graham: 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. Probably the average of our 5% Q1 and our 1% Q2 is the right number to think about for the market, which is pretty much where we picked the market for the year and where we see our second half.

Oliver Graham: And so, you know, probably the average of our 5% Q1 and our 1% Q2 is the right number to think about for the market, which is pretty much where we picked the market 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 pretty strong. I think the can sustainability credentials are only improving in Europe with, you know, higher recycled content rates and lower carbon footprint.

Oliver Graham: Again, if I look into 2026, all the good trends are still there for Europe. 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 gains in soft drinks that are pretty strong. I think the can's sustainability credentials are only improving in Europe with higher recycled content rates and lower carbon footprint. We see a lot of good trends, I think, for Europe going forward, and we anticipate these sorts of growth rates on average. Maybe you get some quarter to quarter volatility like this, but overall, the 3% to 4% feels like a good place to pick the market.

Speaker Change: 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 um you know. So for whatever reason the Beer Market wasn't as strong as we anticipated and probably everyone anticipated in our geographies. Um 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 the lesson and last year, when they were short inventory, going into the season and so, you know, probably the, the average of our 5% q1 and our 1% Q2 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

Oliver Graham: So, you know, we see a lot of good trends, I think, for Europe going forward, and would anticipate these sorts of growth rates on average, you know, and maybe you get some quarter-to-quarter volatility like this, but overall, the 3 to 4% feels like a good place to pick the market.

Speaker Change: We've still got Ken's gaining share in the mix. We've got Germany, still with very low cam, penetration relative to other developed markets, for all the reasons we've talked about. Uh, we've got, you know, gains, uh, 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 would anticipate these sorts of growth rates on average, you know, and maybe you get some corded to quarter volatility like this.

Speaker Change: But overall, the 3 to 4% feels like a good place to to pick the market.

Arun Deswanathan: Great, thanks.

Arun Viswanathan: Great, thanks. If 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.

Arun Deswanathan: I could just ask one more.

Oliver Graham: Just overall on your footprint, any regions where you feel you would need to take action, whether to increase or decrease capacity? Thanks. Certainly no decrease at this point. If we're talking about Europe, I think we're very tight. The market is clearly very tight in certain can sizes, particularly in the season. Our peers have announced some capacity growth. I think the market needs that. You think this is a 90-plus billion market now, growing at 3%, 4%. Then you need some capacity added every year, clearly. We're getting to the point where we'll have to think about capacity additions.

Speaker Change: Thanks. If I could just ask 1 more, um, just overall on your footprint, any regions where you feel? Uh, you would need to take action whether, uh, to increase or decrease capacity. Thanks.

Oliver Graham: Yeah, certainly no decrease at this point. 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+ 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 will take us through 2026, but then we'll have to look at the situation, and probably we'll need to look at the South before the North.

Oliver Graham: We've got good growth this year in capacity as we ramp up existing investments. We'll put some more flexibility into the network. That will take us through 2026, but then we'll have to look at the situation. Probably, we'll need to look at the South before the North, but we're evaluating that situation as we see our customer mix develop. Then if we're talking the other regions, there's still capacity to grow. In North America, there are less than we would have thought at the beginning of the year, given the strength of the growth. In Brazil, I think we've signalled there is a decent amount of capacity for us to grow into, which has been hard curtailed, but mainly in the Northeast, where growth is a bit less in the market.

Oliver Graham: 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 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 to tell, 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 position at the moment for the next, you know, 12, 18 months of growth.

Yeah, certainly no decrease um, at this point. If if, you know, if we're talking about Europe I think, you know, we're very tight if the market is clearly very tight in certain can sizes, particularly in the season. Uh, you know, our peers have announced some capacity growth. I think the market needs that you think this is a 90 plus billion market now growing at 3%. 4% then, you know, you need some capacity out of every year. Clearly, uh, 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 will take us through 26. But then we'll have to look at, uh, the situation and probably we'll need to look at the South, uh, before the north. But, you know, we're evaluating that situation as we see our customer, mix develop. Um, and then, if we're talking the other regions, there's still capacity to grow into Inn in North America. They're 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 signed on there is a

Operator: Overall, I think we feel pretty comfortable with our position at the moment for the next 12, 18 months of growth. Great. Thanks a lot. And once again, if you'd like to ask a question, please press star 1.

Speaker Change: Decent amount of capacity for us to grow into, which has been hard to tell, but, but mainly in the Northeast where, you know, growth is a bit less in the market, but overall, I think, uh, we feel pretty comfortable with our our position at the moment for the next, you know, 12, 18 months of growth.

Arun Viswanathan: Great. Thanks a lot.

Speaker Change: Great. Thanks a lot.

Oliver Graham: Thanks.

Operator: Once again, if you'd like to ask a question, please press star one. We'll take our next question from Josh Spector with UBS.

Thanks.

Josh Spector: We'll take our next question from Josh Spector with UBS.

and once again, if you'd like to ask a question please press star 1, we'll take our next question, from Josh Spectre with UBS

Josh Spector: Hi, good morning. First, I just want to ask on the European cost side, when you talked about some of the timing and aluminum, how much of an impact was that in the second quarter? And do you make that back up in 3Q in that there's maybe some outperformance on margins? Or is that something that would take longer than that? Yeah. Look, I mean, these timing effects, they come and go. Sometimes they happen in the quarter. Sometimes they cross quarters.

Josh Spector: Hi, good morning. First, I just want 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 Q2? Do you make that back up in Q3, in that there's maybe some outperformance on margins, or is that something that would take longer than that?

Josh Spectre: good morning. Um, first is I just want to ask on the European cost side when you talked about some of the timing and aluminum.

Josh Spectre: How much of an impact was that in the second quarter and do you make that back up in 3 q and that there's maybe some outperformance on margins? Or is that something that would take longer than that?

Oliver Graham: Yeah, look, I mean, these timing effects, they come and go. Sometimes they happen in the quarter, sometimes they cross quarters. I don't think we see it particularly being made up in Q3, but I'll, I'll let Stefan comment. But I'd say more just that, that, yeah, they happen, they go up and down, and 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 want to add something?

Oliver Graham: I don't think we see it particularly being made up in 3Q, but I'll let Stefan comment. But I'd say more just 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 weakening of the dollar, which particularly impacted the euro-aluminium pricing and therefore the gap between when we buy it and when we sell it on to customers.

Stefan Schellinger: But, Stefan, maybe you want to add something. Yeah. Look, that's obviously right. It's sort of a timing between sort of the price we invoice the customer and the price of what we procure. I wouldn't expect it to come back unless sort of 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 the near term.

Stefan Schellinger: Yeah, look, that, that's obviously right, as it's sort of a timing between sort of the, the price we invoice the customer and the price of the, at 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, through most of the effect in Q2, but I wouldn't, wouldn't this going sort of to be reversed sort of in the, in the near term.

Josh Spector: Thanks. And then if I could ask about kind of your implied Q4 guidance. I don't think anybody's gonna blame anybody for being conservative at this point, but I, I guess if we look at the implied EBITDA, it, it's potentially down significantly year-over-year in Q4, and it's actually even below 2023 EBITDA. Is there anything specific that you're seeing that would drive your assumptions there, either pull into Q3 or something else that you'd call out?

Josh Spector: Thanks.

Stefan Schellinger: And then if I could ask about kind of your implied 4Q guidance, I don't think anybody's 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 it's actually even below 2023 EBITDA. Is there anything specific that you're seeing that would drive your assumptions there, either a pull into 3Q or something else that you call out? No, I think, I mean, you mentioned, obviously, you know, it's an uncertain environment from a macro perspective. I think, you know, the European side of the business is facing some cost headwinds, we talked about, so that will also impact the Q4.

Stefan Schellinger: No, I think, I mean, you mentioned obviously, you know, it's an uncertain environment overall from a macro perspective. I think you know, the European side of the business obviously is facing some cost headwinds we talked about, so that will also impact sort of the Q4. I think Q4 last year was also relatively strong. You know, it did somewhat from a growth perspective, quarter. Then I think in South America, just you know, relative to H1, you know, as we said, we anticipate certainly a slowdown in terms of our own volume growth. We've significantly outperformed the market and the overall market is relatively slow. I think we see that very low single-digit growth.

Stefan Schellinger: I think Q4 last year was also relatively strong, you know, from a growth perspective, a quarter. And then I think in South America, just, you know, relative to half one, you know, as we said, we anticipate certainly a slowdown in terms of our own volume growth, we've significantly outperformed from the market and the overall market is relatively slow. I think we see that very low single digit growth. So these are probably a few things to call out here.

Stefan Schellinger: So these are probably a few things to call out here.

Stefan Schellinger: Okay, thank you.

Josh Spector: Okay, thank you.

Richard Carlson: And our next question comes from Richard Carlson with Wells Fargo. Hey, good morning, guys. I'm standing in for Gabe Hady today.

Operator: Our next question comes from Richard Carlson with Wells Fargo.

Richard Carlson: Hey, good morning, guys. I'm standing in for Gabe Hajde today. So, just to follow up, I guess, on that-

Richard Carlson: So just to follow up, I guess on that about the good morning, just to follow up on the last question about the back half guy, because I think that is something that's catching a lot of people's eyes today other than the slowdown and the growth that you guys are reference. 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.

Oliver Graham: Good morning.

Richard Carlson: Good morning. Just to follow up on, on the last question about the, 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 Europe may be a little bit disappointing, but, but what are really the, the biggest moving pieces between the first half growth rates and the second half growth rates?

Oliver Graham: I guess Europe maybe is a little bit disappointing, but what are really the biggest moving pieces between the first half growth rates and the second half growth rates? I think, yeah, I talked a bit about the different markets, but I think Europe, we see roughly at the same rate in the second half, but we're being a little bit cautious after a difficult second quarter relative to expectations. And then both Brazil and North America, we are predicting some slowdown on the rate, as Stephan just said. The Brazil market has grown 1% year-to-date, and we've grown significantly more than that, and 12% in Q2, nearly 8% year-to-date.

Oliver Graham: I think, yeah, look, I talked a bit about 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 difficult second quarter relative to expectations. And then both Brazil and North America, we are predicting some slowdown 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, than 12% in Q2, 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.

Oliver Graham: So again, that's a result that's been talked about on these calls and our peers' calls. 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 assumed some reversion to the mean in Brazil. And then, again, in North America, we've had a strong first half, but we haven't assumed that that replicates fully through the second half. So I think clearly, applying some appropriate caution. And then, as Stephan just said, I think Q4 is a way out.

Oliver Graham: 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 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 assumed that replicates fully through the second half. So, you know, I think clearly applying some appropriate caution. And then, as Stefan just said, I think Q4 is a way out. The macroeconomic environment remains uncertain. And so, you know, we're just reflecting that, I think, in some appropriate caution relative to our Q3 guide, which is 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.

Stefan Schellinger: The macroeconomic environment remains uncertain. And so, you know, we're just reflecting that, I think, in some appropriate caution relative to our Q3 guide, which is 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, Stephan? Yeah, that's correct.

Oliver Graham: I think that's right, isn't it, Stefan?

Stefan Schellinger: Yeah, that's correct.

Stefan Schellinger: Yeah, thank you for that.

Richard Carlson: Got it. Yeah, 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 tougher comps coming up soon, but what are you guys seeing there? And do you have a view on whether or not, you know, the incremental buyer of an energy beverage is leaving sodas? Are they getting away from CSDs and maybe cannibalizing CSDs? And if that is happening, how does that impact you guys? It seems like maybe your exposure or your market share within energy is quite a bit higher than CSD. So just wondering if you guys have thought about how some of the dynamics and the buying between CSDs and energy is impacting you.

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

Oliver Graham: So just wanna be, I guess, a thought about how some of the dynamics and the buy-in between CSDs and energy is impacting. 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 40s. So that switch is going on. So, you know, we're seeing good growth, you know, from our perspective in both energy and CSD, and we're not seeing that that's some trade off.

Oliver Graham: 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% in plastic down to 40s. 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's 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 seemingly strongly. You've got existing players performing strongly.

Oliver Graham: So, yeah, not concerned about that at this point.

Oliver Graham: And then within the energy category, you've got new players that are performing seemingly strongly. You've got existing players performing strongly. So I think it's what we said last year, that this is a big, strong category with very successful players who know all about innovation. And, you know, 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. Got it.

Oliver Graham: So I think it's what we said last year, that this is a big, strong category with very, you know, successful players who know all about innovation. And, you know, they had a-- 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.

Stefan Diaz: ... 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 MAHA movement, especially here in North America, with switch to potentially less artificial sweeteners and dyes or things. Are you hearing any increased conversation from your customers about the potential headwind that that could be to their business?

Oliver Graham: And just last one for me, same question you guys have gotten the last few quarters was just, you know, on this, 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? No, really nothing specific to be honest. And again, 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 when I think about the impact of that, it could also fall more on other substrates.

Oliver Graham: No, really nothing specific, to be honest. And again, 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 fall more on other substrates. So yeah, nothing, nothing very specific on that to comment on.

Oliver Graham: So yeah, nothing, nothing very specific on that to comment on.

Richard Carlson: Great.

Stefan Diaz: Great. Thanks, guys, and good luck on Q3, Q3.

Operator: Thanks, guys, and good luck on Q3. Thank you.

Oliver Graham: Thank you.

Nico Puccini: And once again, ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad.

Operator: Once again, ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from Michael Roxland with Truist Securities.

Nico Puccini: Our next question comes from Michael Roxlin with Truist Securities. Yeah. Hi, guys. This is Nico Puccini on for Mike. Thanks for taking my question.

Niccolo Piccini: Yeah. Hi, guys, this is Nico Picini on for Mike. Thanks for taking my questions. I guess, first off, can you speak to any manufacturing efficiency 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?

Niccolo Piccini: Yeah. 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 could have contributed to the performance this year so far? And, you know, how should we think about what you target there going forward?

Nico Puccini: I guess first off, can you speak to any manufacturing efficiency 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? Yeah, look, I think, you know, we referenced 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 full, you know, we're very low inventory levels in North America for another year, and obviously, you know, when you run the plants fuller, unit costs drop and efficiencies grow.

Oliver Graham: Yeah, look, I think, you know, we referenced in the remarks that there have been improved operational costs on both sides of the Atlantic. Obviously, North America is helped by the fact that we're running 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 fuller, unit costs 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.

Oliver Graham: So that's definitely helped, but then I think our Europe performance has been very pleasing on the manufacturing side, so 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 going to talk about them specifically. They're part of our guidance. And, you know, we're looking obviously very ambitiously at, you know, cost savings and increased efficiency in our manufacturing network, and that's supported by a number of big programs within the business.

Oliver Graham: They're part of our guidance, and, you know, we're looking obviously very ambitiously at, you know, cost savings and increased efficiency in our manufacturing network, and that's supported by a number of big programs within the business.

Oliver Graham: Got it. Thank you very much.

Niccolo Piccini: 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 2026 volumes are, you know, maybe largely contracted, but could you speak to how much it is for 2026 and how much you have under contract for 2027?

Oliver Graham: And then just secondly, you know, if you could speak to maybe contract negotiations, I imagine at this point in the year, your 2026 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? Yeah, like you say, we're largely either contracted or well through any negotiation process for 2026, so we're increasingly got good visibility there. And then 2027, actually, yeah, it's reasonably, I mean, I don't have the exact percentage to hand, but it's reasonably fully contracted. We're getting through the wave of CSD tenders in North America now.

Oliver Graham: Yeah, like you say, we're largely either contracted or well through any negotiation process for 2026, so we're, we're increasingly got good visibility there. And then 2027, actually, yeah, it's 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 wave of post-COVID contract renewals. And we, and we're starting to get pretty good visibility on 2026 and beyond, you know, volume-wise.

Nico Puccini: Europe has been, you know, a decent amount of activity this year, which is closing and should take us through 2027. So, yeah, I think, you know, the business of getting through that, if you like, the wave of post-COVID contract renewals, and we're starting to get pretty good visibility on 2026 and beyond, you know, volume-wise. Thank you very much. Good luck in the quarter. Thank you.

Niccolo Piccini: Got it. Thank you very much. Good luck in the quarter.

Oliver Graham: Thank you.

Operator: And ladies and gentlemen, if you'd like to ask a question, please press star 1 now. And it appears there are no further questions.

Operator: Ladies and gentlemen, if you would like to ask a question, please press star one now. It appears there are no further questions. One moment. We do have Mr. Stefan Diaz that re-signaled.

Oliver Graham: One moment, we do have Mr. Stephan Diaz that re-signaled. that the, you know, European market is rather tight and, you know, just given your cash flow profile and, you know, some cash commitments 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 12 to 18 months if you feel like you need to expand capacity in the region? 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 twenty three and twenty four and with some improvements to those projects and some speed ups.

Stefan Diaz: Commentary that the, you know, European market is rather tight. And, you know, just given your cash flow profile and, you know, some cash commitments 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 12 to 18 months, if you feel like you need to expand capacity in the region?

Josh Spectre: You feel like you need to.

Josh Spectre: And capacity in the region.

Oliver Graham: Yeah, I'll start, and then I'll let Stefan pick it up as well. But look, as I mentioned, we're ramping up, you know, probably in the order of 1 billion of capacity this year, with the projects that we completed in 2023 and 2024, and with some improvements to those projects and some speed ups. So that's already taking us, you know, healthily through this year 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 2027. And we've talked about, you know, CapEx levels for this year being, you know, broadly similar, probably next year.

Josh Spectre: Yes, I'll start and then I'll, let Stefan.

Josh Spectre: And pick it up as well, but yeah as I mentioned, we're ramping up probably in the order of $1 billion capacity this year.

Josh Spectre: With the projects that we completed in 'twenty, three and 'twenty, four and with some improvements to those projects and some speed ups.

Stefan Schellinger: So that's already taking us, you know, healthily through this year 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 twenty seven. And we've talked about, you know, cap levels for this year being broadly similar, probably next year. So so I think that when I look at our growth profile for Europe, I'm not concerned. I think we can manage that within our existing forecasts and stay relevant and competitive in the market.

Josh Spectre: So that's already taken.

Josh Spectre: Health later this year and into next year and then we have another.

Josh Spectre: Some other areas, where we can still see capacity growth in the existing footprint next year, and then I think we signaled.

Josh Spectre: Might have to add something under the existing footprint.

Josh Spectre: 27.

Josh Spectre: And we've talked about capex levels for this year being broadly similar probably next year. So I think that when I look at our growth profile for Europe.

Oliver Graham: 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 forecasts, and, you know, stay relevant and competitive in the market. But I'll also pass that one to Stefan.

Josh Spectre: And I think we can manage that within our existing.

Josh Spectre: Our forecast.

Josh Spectre: And I would stay relevant and competitive in the market, but I'll also pass that one to stephane.

Stefan Schellinger: But I'll also pass that on to Stefan. Yeah, I fully agree. I mean, obviously, we gave you indications for this year in terms of growth CapEx. I think all projects, I think, you know, we have line of sight of, and we feel, you know, good return opportunities in terms of extensions, speed ups. I think we are going ahead with, and I think for the foreseeable future, I think, you know, we have, I think, good visibility sort of in our pipeline of projects, and I think we can address those within the existing sort of cash flow profile.

Stefan Schellinger: Yeah, look, I fully agree. I mean, obviously we gave indications for this year in terms of growth CapEx. I think all projects, I think, you know, we have line of sight of, and we feel are, you know, 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, you know, we have, I think good visibility sort of in our pipeline of projects, and I think we can address those within the existing sort of cash flow profile.

Josh Spectre: Yes.

Stephane: I fully agree I mean, obviously, the we gave you indications for this year in terms of growth Capex, I think or oil projects I think we have line of sight of and we feel.

Stephane: Good good return opportunities in terms of extension speed ups I think we are.

Stephane: Going ahead with some of the things slow for the foreseeable future I think.

Stephane: We have.

Stephane: Good good visibility sort of an hour.

Stephane: Pipeline of projects and I think we can we can address those within the existing sort of cash flow profile.

Oliver Graham: 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 billion that you mentioned that you're adding this year would be more, you know, brownfield type projects, if we sort of assume demand kind of stays on the same trajectory than meeting greenfields. Is that a correct assumption? Yeah, I mean, that's definitely a good could even, 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?

Stefan Diaz: 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 billion that you mentioned that you're adding this year, would be more, you know, brownfield-type projects, if we sort of assume demand kinda stays on the same trajectory than needing greenfields. Is that a correct assumption?

Stephane: Thanks. Thanks.

Stephane: Really helpful. So I guess, maybe just digging into that a little further.

Stephane: So potentially any capacity that needs to be added beyond the 1 billion that you mentioned that youre, adding this year would be more brow.

Stephane: Brownfield type projects, if we sort of assume demand kind of kind of stays in the on the same trajectory than than needing greenfield is that.

Stephane: Correct assumption, yes, I think that's definitely a good assumption I think.

Oliver Graham: Yeah, I think, I mean, that's definitely a good assumption. I think, I mean, Brownfield could even, 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 2, 3 years in Europe, that we certainly don't need to be building major new facilities at this point.

Stephane: I mean brownfield.

Stephane: It implies that some listeners.

Stephane: Some of these new closet is an existing building we're talking.

Oliver Graham: 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 certainly don't need to be building major new facilities at this point.

Stephane: And the under the roof.

Stephane: So existing facilities, which obviously at the most efficient.

Stephane: And lowest cost of capital and investment so that's what we see for the next two three years in Europe that we certainly don't need to be built.

Stephane: Building major new facilities at this point.

Nico Puccini: Great. Thank you both and good luck in the back half of the year. Thanks, Stephan. Thank you.

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

Stephane: Great. Thank you both and good luck in the back half of the year.

Oliver Graham: Thanks, Stefan. Thank you.

Speaker Change: Thanks, Stephanie.

Operator: And ladies and gentlemen, if you'd like to join the queue, please press star 1 on your telephone keypad. And it appears there are no further questions at this time.

Operator: And ladies and gentlemen, if you'd like to join the queue, please press star one on your telephone keypad. 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.

Speaker Change: And ladies and gentlemen, if you would like to join the queue. Please press star one on your telephone keypad.

Speaker Change: And it appears there are no further questions at this time I will turn the conference back to our program for any additional or closing remarks.

Oliver Graham: I'll turn the conference back to Oliver Graham for any additional or closing remarks. Thanks Lisa. So thank you 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 to our performance and favorable currency movements, we're again raising our expectations for full year adjusted EBITDA.

Oliver Graham: 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 to 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 Q3 results.

Speaker Change: Thanks, Lisa so thank you.

Speaker Change: Joining our call. So just to summarize another very strong quarter for A&P global shipments grew by 5% and makita adjusted EBITDA by 18%.

Speaker Change: At our guidance.

Speaker Change: Particularly driven by the Americas, and reflecting that coda to outperformance and favorable currency movements. We are 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 Q3 results.

Oliver Graham: So with that, thanks for joining, and we look forward to talking to you again at the Q3 results. Thank you, ladies and gentlemen.

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

Speaker Change: Thank you ladies and gentlemen, this concludes our call today you may now disconnect from the call and thank you for participating.

Operator: This concludes our call today. You may now disconnect from the call. And thank you for participating. Thanks for watching!

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yeah.

Q2 2025 Ardagh Metal Packaging SA Earnings Call

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