Q2 2026 Ardagh Metal Packaging SA Earnings Call

July 23, 2026

Operator: Please stand by. Your conference is about to begin. Good day, welcome to the Ardagh Metal Packaging S.A. Q2 2026 investor call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Stephen Lyons. Please go ahead.

Speaker #1: At this time, I’d like to turn the conference over to Stephen Lyons. Please go ahead.

Speaker #2: Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's second quarter 2026 earnings call. Which follows the earlier publication of AMP's earnings release for the second quarter.

Stephen Lyons: Thank you, operator. Welcome, everybody. Thank you for joining today for Ardagh Metal Packaging Q2 2026 earnings call, which follows the earlier publication of AMP's earnings release for the Q2. I'm joined today by Oliver Graham, AMP's Chief Executive Officer, and Stefan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook. AMP's earnings release and related materials for the 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.

Speaker #2: I'm joined today by Oliver Graham, AMP's Chief Executive Officer, and Stephan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook.

Speaker #2: AMP's earnings release and related materials for the second quarter can be found on AMP's website at ir dot ardaghmetalpackaging dot com. Remarks today will include certain forward-looking statements and include use of non-IFRS financial measures.

Speaker #2: Actual results could vary materially from such statements. Please review the details of AMP's forward-looking statements disclaimer and the reconciliation of non-IFRS financial measures to IFRS financial measures in AMP's earnings release.

Speaker #2: I will now turn the call over to Oliver Graham.

Speaker #3: Thanks, Stephen. So before taking you through our quarterly results, I want to recognize that at the beginning of this month, we celebrated AMP's 10-year anniversary.

Oliver Graham: Thanks, Stephen. Before taking you through our quarterly results, I want to recognize that at the beginning of this month, we celebrated AMP's 10-year anniversary, a significant milestone in the history of the company. AMP was formed from three separate regional businesses, and over a 10-year journey, we have developed into one strong, integrated global business. We've also transformed the company over this time. We've invested well over $2 billion of growth capital, transforming our network. Our capacity is more than 30% higher, supporting our customers' growth, with specialty cans now representing over 50% of our volumes. Our business mix is strongly diversified across both global and regional customers and across a variety of new and growing categories. We've invested in our people and our processes, enhancing the capabilities and resilience of our business.

Speaker #3: A significant milestone in the history of the company. AMP was formed from three separate regional businesses, and over a 10-year journey, we have developed them into one strong, integrated, global business.

Speaker #3: We've also transformed the company over this time. We've invested well over $2 billion of growth capital, transforming our network. Our capacity is more than 30% higher, supporting our customers' growth with specialty cans now representing over 50% of our volumes.

Speaker #3: Our business mix has strongly diversified across both global and regional customers, and across a variety of new and growing categories. We've invested in our people and our processes, enhancing the capabilities and resilience of our business.

Speaker #3: And adjusted EBITDA this year is expected to have approximately doubled compared to our starting position. This has been a great achievement, and I'd like to extend my sincere thanks to our employees, our customers, suppliers, and to all stakeholders who have made this journey possible.

Oliver Graham: Adjusted EBITDA this year is expected to have approximately doubled compared to our starting position. This has been a great achievement, and I'd like to extend my sincere thanks to our employees, our customers, suppliers, and to all stakeholders that have made this journey possible. AMP is in a strong position, and we look forward to continued success ahead. Our performance year to date is a testament to the resilience of our business. In an uncertain macroeconomic environment, AMP has delivered strong Q2 adjusted EBITDA growth of 14% versus the prior year, significantly ahead of expectations. Beverage can sales declined by 1% versus the prior year quarter as we cycled strong prior year growth of 5%. Shipments were impacted by contract resets in North America and lower shipments in Brazil, following relative outperformance in Q1, partly offset by strong volume growth in Europe.

Speaker #3: AMP is in a strong position, and we look forward to continued success ahead. Our performance year to date is a testament to the resilience of our business.

Speaker #3: In an uncertain macroeconomic environment, AMP has delivered strong second quarter adjusted EBITDA growth of 14% versus the prior year, significantly ahead of expectations. Beverage can sales declined by 1% versus the prior year quarter, as we cycled strong prior year growth of 5%.

Speaker #3: Shipments were impacted by contract resets in North America, and lower shipments in Brazil, following relative outperformance in the first quarter. This was partly offset by strong volume growth in Europe.

Speaker #3: Overall volumes are in line with our expectations, and we expect a return to modest global volume growth in the second half, supported by the strength in global beverage can demand, our attractive customer portfolio, and our high exposure to fast-growing beverage categories.

Oliver Graham: Overall volumes are in line with our expectations, and we expect to return to modest global volume growth in H2, supported by the strength in global beverage can demand, our attractive customer portfolio, and our high exposure to fast-growing beverage categories. Our adjusted EBITDA outperformance in the quarter was primarily driven by Europe, which benefited from favorable input cost recovery and strong volume growth. Americas performance was broadly in line with expectations, despite softness in Brazil and metal supply constraints impacting operations in North America at the beginning of the quarter. Metal supply availability in North America significantly improved over the course of the quarter, and we anticipate operating under normal supply conditions during H2 of the year. Now looking at our future results by segment.

Speaker #3: Our adjusted EBITDA outperformance in the quarter was primarily driven by Europe, which benefited from favorable input cost recovery and strong volume growth. Americas' performance was broadly in line with expectations, despite softness in Brazil and metal supply constraints impacting operations in North America at the beginning of the quarter.

Speaker #3: Metal supply availability in North America significantly improved over the course of the quarter, and we anticipate operating under normal supply conditions during the second half of the year.

Speaker #3: Now looking at our future results by segment. In Europe, second quarter revenue increased by 13% to $698 million or by 10% on a constant currency basis, compared with the same period in 2025.

Oliver Graham: In Europe, Q2 revenue increased by 13% to $698 million or by 10% on a constant currency basis compared with the same period in 2025. This was due to favorable volume mix effects and the pass-through of higher input costs, including higher aluminum prices. Shipments increased by 5% for the quarter, which reflected strong underlying demand as well as the ramp-up of newly contracted volumes. We experienced good growth in carbonated soft drinks and in the energy category, as well as across our diverse range of smaller growing categories. We also saw an improvement in underlying beer performance in the quarter, with our reduction in reported year-over-year beer can shipments reflecting specific contract losses while underlying performance demonstrated greater stability. Q2 adjusted EBITDA in Europe increased by 36% versus the prior year to $105 million, strongly ahead of expectations.

Speaker #3: This was due to favorable volume mix effects in the past year, as well as higher input costs, including higher aluminum prices. Shipments increased by 5% for the quarter, reflecting strong underlying demand and the ramp-up of newly contracted volumes.

Speaker #3: We experienced good growth in carbonated soft drinks and in the energy category, as well as across our diverse range of smaller growing categories. We also saw an improvement in underlying beer performance in the quarter, with our reduction in reported year-over-year beer can shipments reflecting specific contract losses, while underlying performance demonstrated greater stability.

Speaker #3: Second quarter adjusted EBITDA in Europe increased by 36% versus the prior year to $105 million, strongly ahead of expectations. On a constant currency basis, adjusted EBITDA increased by 33%, primarily due to stronger input cost recovery, including a favorable metal pricing timing impact, and volume growth, partly offset by higher operations and overhead costs.

Oliver Graham: On a constant currency basis, adjusted EBITDA increased by 33%, primarily due to stronger input cost recovery, including a favorable metal pricing timing impact and volume growth, partly offset by higher operations and overhead costs. Regarding our direct energy exposure, AMP is well covered for its energy needs in 2026 and beyond through its energy hedging program. For 2026, we are over 85% covered for our energy requirements, for 2027 approximately 80%, and we are at nearly 70% coverage for 2028. For 2026, we reaffirm our expectation for volume growth of around 3% in Europe. We do not yet have full beverage packaging industry scanner data for Q2, but from the available data, we see very positive overall beverage can consumption trends.

Speaker #3: Regarding our direct energy exposure, AMP is well covered for its energy needs in 2026 and beyond through its energy hedging program. For 2026, we're over 85% covered for our energy requirements for 2027, approximately 80%, and we are at nearly 70% coverage for 2028.

Speaker #3: For 2026, we reaffirm our expectation for volume growth of around 3% in Europe. We don't yet have full beverage packaging industry scanner data for the second quarter, but from the available data, we see very positive overall beverage can consumption trends.

Speaker #3: Capacity remains tight in the region, and our production volumes in the quarter benefited from the network optimization actions that we undertook to allow us to better serve our customers with higher demand can sizes in faster-growing categories.

Oliver Graham: Capacity remains tight in the region, our production volumes in the quarter benefited from the network optimization actions that we undertook to allow us to better serve our customers with higher demand can sizes in faster growing categories. We also previously outlined our intention to invest in the growing markets of the UK and Spain. We are pleased to announce we are taking the decision to upsize these projects following constructive commercial engagement with our customers. This will lead to higher CapEx of $40 million in 2026 compared to our previous guidance and allow us to capitalize on strong industry demand. We are also reviewing the timing of these projects, given the strength of demand, and we will update on this topic in due course.

Speaker #3: We also previously outlined our intention to invest in the growing markets of the UK and Spain. We're pleased to announce we're taking the decision to upsize these projects, following constructive commercial engagement with our customers.

Speaker #3: This will lead to higher capex of $40 million in 2026, compared to our previous guidance, and allow us to capitalize on strong industry demand.

Speaker #3: We're also reviewing the timing of these projects, given the strength of demand, and we will update on this topic in due course. In the Americas, revenue in the second quarter increased by 21%, just above $1 billion.

Oliver Graham: In the Americas, revenue in Q2 increased by 21% to just above $1 billion, principally reflecting the pass-through of higher input cost to customers, including the impact of higher metal costs and freight cost pass-throughs, partly offset by lower shipments. Americas adjusted EBITDA for the quarter was broadly in line with expectations, with a 2% increase versus the prior year to $135 million, resulting from lower operations and overhead costs compared with the prior year quarter, partly offset by lower input cost recovery and lower shipments. In North America, shipments decreased by 5% for the quarter. This was in line with our expectations and reflected lower volumes after expected contract resets, the impact on operations from metal supply chain challenges at the beginning of the quarter, and the cycling of a strong prior year comparable of 8%.

Speaker #3: Principally reflecting the past year of higher input costs to customers, including the impact of higher metal costs and freight costs past years, partly offset by lower shipments.

Speaker #3: America's adjusted EBITDA for the quarter was broadly in line with expectations, with a 2% increase versus the prior year to $135 million, resulting from lower operations and overhead costs compared with the prior year quarter, partly offset by lower input cost recovery and lower shipments.

Speaker #3: In North America, shipments decreased by 5% for the quarter. This was in line with our expectations and reflected lower volumes after expected contract resets, the impact on operations from metal supply chain challenges at the beginning of the quarter, and the cycling of a strong prior-year comparable of 8%.

Speaker #3: Underlying demand dynamics in the industry remain robust, with strong industry scanner data year to date, apart from the beer category, to which AMP has only a low single-digit exposure.

Oliver Graham: Underlying demand dynamics in the industry remain robust, with strong industry scanner data year to date, apart from the beer category, to which AMP has only a low single-digit exposure. In particular, the energy category continues to show strong growth supported by broader distribution and successful innovation. We also continue to experience ongoing strong demand for specialty can formats, with further gains year to date in our overall specialty mix. We retain our expectation for industry growth in North America in 2026 of a low single-digit percentage. As previously indicated, we anticipate 2026 being a transition year for AMP with a small full-year volume decline following some contract resets, but with a more favorable H2 volume performance expected versus the H1. We also expect to return to growth in 2027, at least in line with the industry, on the back of having secured additional customer filling locations.

Speaker #3: In particular, the energy category continues to show strong growth, supported by broader distribution and successful innovation. We also continue to experience ongoing strong demand for specialty can formats, with further gains year to date in our overall specialty mix.

Speaker #3: We retain our expectation for industry growth in North America in 2026 of a low single-digit percentage. As previously indicated, we anticipate 2026 being a transition year for AMP, with a small full-year volume decline, following some contract resets, but with a more favorable second half volume performance expected versus the first half.

Speaker #3: We also expect to return to growth in 2027, at least in line with the industry, on the back of having secured additional customer filling locations.

Speaker #3: In relation to the lawsuit filed against Boston Beer in 2022 for breach of contract in respect of minimum volume purchase requirements, on May 26, 2026, a court had entered an amended final judgment to include 15.5 million in pre-judgment interest, taking the total expected award value to approximately $190 million, on a pre-tax basis.

Oliver Graham: In relation to the lawsuit filed against Boston Beer in 2022 for breach of contract in respect to minimum volume purchase requirements, on 26 May 2026, a court entered an amended final judgment to include $15.5 million in prejudgment interest, taking the total expected award value to approximately $190 million on a pre-tax basis. Subsequently, Boston Beer has posted a bond with the court to cover the award value and has also filed notice of appeal. In Brazil, Q2 beverage can shipments decreased by 15%, reflecting customer mix effects following strong relative outperformance in Q1 when AMP volumes grew by 14%. In the quarter, we observed increased World Cup related activity in the market from the leading player, which negatively impacted on our customers' performance, as did some downtime taken by one of our customers for some maintenance activity.

Speaker #3: Subsequently, Boston Beer has posted a bond with the court to cover the award value and has also filed notice of appeal. In Brazil, second quarter beverage can shipments decreased by 15%, reflecting customer mix effects following strong relative outperformance in the first quarter, when AMP volumes grew by 14%.

Speaker #3: In the quarter, we observed increased World Cup-related activity in the market from the leading player, which negatively impacted our customers' performance, as did some downtime taken by one of our customers for maintenance activity.

Speaker #3: Our overall performance the first half is broadly in line with industry performance. Industry data indicates that demand remains soft through the second quarter. The industry outlook for the third quarter is also looking soft.

Oliver Graham: Our overall performance for H1 is broadly in line with industry performance. Industry data indicates that demand remains soft through Q2. The industry outlook for Q3 is also looking soft. We look to the remainder of 2026, we now expect an industry growth rate of low single-digit percentage and for AMP's volumes to broadly track the market. I'll hand over now to Stefan to talk you through our financial position for the quarter before finishing with some concluding remarks.

Speaker #3: As we look to the remainder of 2026, we now expect an industry growth rate of low single-digit percentage, and for AMP's volumes to broadly track the market.

Speaker #3: I'll hand over now to Stefan to talk to you through our financial position for the quarter before finishing with some concluding remarks.

Speaker #2: Thanks, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $647 million. Net leverage of 5.2 times net debt over the last 12 months adjusted EBITDA, reflects AMP's strong adjusted EBITDA growth.

Stefan Schellinger: Thanks, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $647 million. Net leverage of 5.2x net debt over the last 12 months adjusted EBITDA reflects AMP's strong adjusted EBITDA growth. This compares with 5.3x at the end of June 2025 or 5.7x on a like-for-like basis if you pro forma for last year's Q4 refinancing of AMP's preferred shares with debt. In terms of guidance of the various free cash flow components for full year 2026, we approximately expect the following. Total CapEx of $240 million including gross investment, an increase of $40 million compared to our prior guidance driven by the previously mentioned upsizing of our investments in new capacity in Spain and the UK. Cash interest of $220 million. Lease principal repayments of approximately $150 million.

Speaker #2: This compares with 5.3 times at the end of June 2025, or 5.7 times on a like-for-like basis issued proforma for last year's Q4 refinancing of AMP's preferred shares with debt.

Speaker #2: In terms of guidance of the various free cash flow components for full year 2026, we approximately expect the following: total capex of $240 million, including gross investment, an increase of $40 million, compared to our prior guidance driven by the previously mentioned upsizing of our investments in new capacity in Spain and the UK.

Speaker #2: Cash interest of $220 million, lease principal repayments of approximately $250 million, cash taxes of approximately $30 million, and a small outflow in working capital.

Stefan Schellinger: Cash tax of approximately $30 million and a small outflow in working capital. Overall, our expectation in regards to our full year adjusted free cash flow generation remains unchanged. Finally, today we have announced our unchanged quarterly ordinary dividend of $0.10 per share. With that, I'll hand it back to Ollie.

Speaker #2: Overall, our expectation regarding our full-year adjusted free cash flow generation remains unchanged. Finally, today we have announced our unchanged quarterly ordinary dividend of $0.10 per share.

Speaker #2: With that, I'll hand it back to Ollie.

Speaker #3: Thanks, Stefan. And before we even take questions, I'll just recap on AMP's performance and key messages. Adjusted EBITDA of $240 million in the second quarter exceeded our guidance range of $210 to $220 million, primarily driven by strong performance in Europe, with Americas performance broadly in line with expectations.

Oliver Graham: Thanks, Stefan. Before moving to take questions, I'll just recap on AMP's performance and key messages. Adjusted EBITDA of $240 million in Q2 exceeded our guidance range of $210 to $220 million, primarily driven by strong performance in Europe with Americas performance broadly in line with expectations. Global volumes declined by 1% in line with expectations, and we expect to return to modest global volume growth in H2. Reflecting on our strong H1 performance and confidence in our outlook for the remainder of the year, we are upgrading our guidance for 2026 full year adjusted EBITDA to be between $775 and $790 million. Our guidance assumes some reversal of the favorable metal price timing effect and the Q1 revaluation gains related to freight cost hedging.

Speaker #3: Global volumes declined by 1%, in line with expectations, and we expect a return to modest global volume growth in the second half. Reflecting on our strong first half performance and confidence in our outlook for the remainder of the year, we are upgrading our guidance for 2026 full year adjusted EBITDA to be between $775 and $790 million.

Speaker #3: Our guidance assumes some reversal of the favorable metal price timing effect and the Q1 revaluation gains related to freight plus hedging. In addition, the business faces some inflationary headwinds related to freight costs and other direct materials impacted by the oil price, as a result of the conflict in the Middle East.

Oliver Graham: In addition, the business faces some inflationary headwinds related to freight costs and other direct materials impacted by the oil price as a result of the conflict in the Middle East. In terms of guidance for Q3, adjusted EBITDA is expected to be in the range of $200 to $210 million versus the prior year Q of $208 million on a constant currency basis. Having made these opening remarks, we'll now proceed to take any questions.

Speaker #3: In terms of guidance for the third quarter, adjusted EBITDA is expected to be in the range of $200 million to $210 million, versus the prior year quarter of $208 million on a constant currency basis.

Speaker #3: So, having made these opening remarks, we'll now proceed to take any questions.

Speaker #1: Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Operator: Thank you. If you'd 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. Once again, that is star one to signal for a question, and we'll go right to Matt Roberts with Raymond James.

Speaker #1: Once again, that is star 1 to signal for a question, and we'll go right to Matt Roberts with Raymond James.

Speaker #4: And Stefan, Ollie, good morning. Thank you for the time. North America is down 5% in two Q. Did you see any benefit from the World Cup there?

Matt Roberts: Hey, Stefan and Ollie. Good morning. Thank you for the time. Yeah, North America is down 5% in Q2. Did you see any benefit from the World Cup there? If so, how much? Or was it more of a non-event given tight metal supply earlier in the Q? Maybe I'm getting ahead of myself, but looking out to 2027, you sort of reiterated at least market growth. Given that confident supplier constraint in H1 and contracts resetting, how much above market growth do you think would be possible in 2027?

Speaker #4: If so, how much, or was it more of a non-event given tight metal supply earlier in the quarter? And maybe I'm getting ahead of myself, but looking out to '27, you said reiterated at least market growth, but given that comp under the supplier constraint in first half and contracts resetting, how much above market growth do you think would be possible in '27?

Speaker #3: Yeah, hi. Hi, Matt. So, look, on the first question, I think it's fair to say we didn't see a particular effect from the World Cup.

Oliver Graham: Hi, Matt. On the first question, I think it's fair to say we didn't see a particular effect from the World Cup. Obviously different beverage can manufacturers have different customers, different mix, different filling locations, different bottlers. We probably all experienced it differently, but we didn't see anything particular in our numbers. It may be fair also to call out, it's true that we were still a little bit constrained at the start of the quarter on the metal. That normalized pretty rapidly through the quarter. Yeah, we didn't see anything particular. We're obviously not in mass beer. There may have been more promotional activity from what we can see in the beer category. On 2027, we obviously had above-industry growth rates for most of the last few years. This year, a bit of a transition.

Speaker #3: Obviously, different beverage can manufacturers have different customers, different mix, different filling locations, different bottlers. So we probably all experienced it differently, but we didn't see anything particular in our numbers.

Speaker #3: And it may be fair also to call out, it's true that we were still a little bit constrained at the start of the quarter.

Speaker #3: On the metal, though, that normalized pretty rapidly through the quarter. So, yeah, we didn't see anything particular. We're obviously not in mass beer, and there may have been more promotional activity, from what we can see, in the beer category.

Speaker #3: And then on '27, look, we obviously had above industry growth rates for most of the last few years. And this year, a bit of a transition.

Speaker #3: So we're not calling '27 yet, but we do see that we have some gains from the same contract resets that impacted us this year negatively.

Oliver Graham: We're not calling 2027 yet, but we do see that we have some gains from the same contract resets that impacted us this year negatively. We have some positive gains next year in terms of a couple of additional filling locations. We still like the look of our portfolio with its weighting towards soft drinks and energy categories, which you can see in the data are outperforming overall industry averages, again because of weakness in mass beer. Yeah, we're not calling it yet, but we certainly feel good about saying that we should grow at least in line with the industry next year.

Speaker #3: We have some positive gains next year in terms of a couple of additional filling locations. And then we still were like the look of our portfolio with its waiting towards soft drinks and energy categories, which you can see in the data are outperforming overall industry averages, again, because of weakness in mass beer.

Speaker #3: So yeah, we're not calling it yet, but we certainly feel good about saying that we should grow at least in line with the industry next year.

Speaker #4: Excellent. Thanks, Ollie. And you described this continued inflation compared to when we started with early April or late March. It seems like certain indicators have come down since then, but then since July has certainly picked up again.

Matt Roberts: Excellent. Thanks, Ollie. You described this continued inflation, compared to when we sat in early April or late March, it seems like certain indicators have come down since then, since July, it's certainly picked up again. How does the second half inflation compare to what you were previously anticipated? If any changes, what specifically were the drivers of that? Thanks again for taking the questions.

Speaker #4: So how does the second half inflation compare to what you were previously anticipated? And if any changes, what specifically were the drivers of that?

Speaker #4: Thanks again for taking the questions.

Speaker #3: No, sure. Yeah, I mean, I guess we can think about inflation a couple of different ways. So one is the inflation in our input costs which is linked to the Middle East, which is mainly in the direct materials and freight, as we call that in the remarks.

Oliver Graham: Sure. Yeah. I guess we can think about inflation a couple of different ways. One is the inflation in our input costs which is linked to the Middle East, which is mainly in the direct materials and freight, as we call that in the remarks. I think that hasn't really changed very much from our guidance back in Q1. We're talking mid-single digit million dollars actually, in those areas. That's reasonably stable. Obviously, the situation isn't stabilizing, but I think, we look forward with some confidence in terms of the resilience of our supply chain. We think that's a reasonably safe number for the second half. In terms of inflationary pressures for the consumer or for, I think that's clearly worsening again. Probably some reason for some appropriate caution in the second half on volumes.

Speaker #3: And I think that hasn't really changed very much from our guidance back in Q1. So we're talking mid-single-digit sort of percent, dot million dollars, actually, in those areas.

Speaker #3: So that's reasonably stable. Obviously, the situation isn't stabilizing, but I think we look forward with some confidence in terms of the resilience of our supply chain.

Speaker #3: So we think that's a reasonably safe number for the second half. And then in terms of inflationary pressures for the consumer or for, I think that's clearly worsening again.

Speaker #3: And so, probably some reason for some appropriate caution in the second half on volumes. But again, we think that's embedded in our guidance, and we still think we should return to some volume growth in North America for the second half.

Oliver Graham: Again, we think that's embedded in our guidance, and we still think we should return to some volume growth in North America for H2.

Matt Roberts: Yeah.

Speaker #4: Got it.

Speaker #1: If you find that your question has been answered, you may remove yourself from the queue by pressing star 2. We'll go next to Josh Spector with UBS.

Operator: If you find that your question has been answered, you may remove yourself from the queue by pressing star two. We'll go next to Josh Spector with UBS.

Speaker #2: Yeah, hi, good morning. So I just wanted to ask, it seemed like in your prepared remarks, you talked about some timing benefits within Europe.

Josh Spector: Yeah. Hi, good morning. I just wanted to ask, it seemed like in your prepared remarks, you talked about some timing benefits within Europe, and that helping margins. Are you able to size that at all?

Speaker #2: And that helping margins. Are you able to size that at all?

Speaker #3: Yeah, sure. So, I think if you look at the beat overall for the company, it's around $25 million versus the midpoint of consensus, and a bit more than that in Europe.

Oliver Graham: Yeah, sure. I think, if you look at the beat, overall for the company around $25 million versus the midpoint of consensus and a bit more than that in Europe. We think a little bit over half of that is linked to metal timing. We think about a third of that reverses in H2. Of the $25 million, as I say, a little over half being the positive and then, yeah, about a third of that reversing on the metal side in H2.

Speaker #3: But we think a little bit over half of that is linked to metal timing. And then we think about a third of that reverses in the second half.

Speaker #3: So of the 25 million, as I say, a little over half being there. The positive and then, yeah, about a third of that reversing on the metal side in the second half.

Speaker #2: Reversing as if it's going to be a negative impact, year over year, or just lacking the benefit?

Josh Spector: Reversing as if it's gonna be a negative impact year-over-year, or just lacking the benefit?

Speaker #3: Yeah, negative. So it's a headwind in the second half. So I think I called out, first of all, the ODM and freight inflation, the sort of mid-single-digit headwind in the second half, then there's the metal timing, mid-single-digit headwind.

Oliver Graham: Yeah, negative. It's a headwind in H2. I think I called out, first of all, the ODM and freight inflation as a sort of mid-single-digit headwind in H2, there's the metal timing, mid-single-digit headwind. We also have a little bit of an FX headwind and that's underlying the guide being a little bit less positive for H2 after a strong H1.

Speaker #3: We also have a little bit of an FX headwind and that's on the line, but the guide being a little bit less positive for the second half after a strong first half.

Speaker #2: Okay. No, that's helpful. I just wanted to follow up a bit on the America's volume side. And just, I guess, thinking about the resets this year, and you talked about some gains next year, I guess when you look at your circuit for next year in North America, is there any slack left when you look on a year-over-year basis?

Josh Spector: Okay. No, that's helpful. I just wanted to follow up a bit on the Americas volume side and just, I guess, thinking about the resets this year, and you talked about some gains next year. I guess when you look at your circuit for next year in North America, is there any slack left when you look on a year-over-year basis? Do you regain everything? Is there something where you'd say you still have grow into, or is it a very tight circuit at this point later next year?

Speaker #2: So do you regain everything? Is there something where you'd say you still have grow into, or is it a very tight circuit at this point later next year?

Speaker #3: I think on the certain can sizes, there's definitely still capacity to grow into. Going back to the investments we made over the last five years, it's certainly getting pretty tight on specialty sizes sleek in the season pretty tight.

Oliver Graham: I think on the certain can sizes, there's definitely still capacity to grow into. Going back to the investments we made over the last 5 years. It's certainly getting pretty tight on specialty sizes, sleek in the season, pretty tight. We do see that. We also have some projects to do some incremental speed-ups and things. We see room to grow over the next few years in North America still.

Speaker #3: So we do see that. But we also have some projects to do some incremental speeds ups and things. So we see room to grow over the next few years in North America still.

Speaker #2: Okay. Thank you.

Josh Spector: Okay, thank you.

Speaker #3: Pleasure.

Oliver Graham: Pleasure.

Speaker #1: Our next question comes from Arun Viswanathan. With RBC Capital Markets.

Operator: Our next question comes from Arun Viswanathan with RBC Capital Markets.

Speaker #2: Great. Thanks for taking my question up. You guys are well. I guess I just wanted to drill down into the European volume. So obviously, you've seen some continued strength there.

Arun Viswanathan: Great. Thanks for taking my question. Hope you guys are well. I guess I just wanted to drill down into the European volume. Obviously, you've seen some continued strength there. You are making some more investments there. I guess, do you expect this kind of mid-single digit growth to persist? Then, how would you kind of rate the profitability there versus maybe some of your other regions? Do you think there's any need for or there's any opportunities for improved returns and margins in Europe as you move throughout, aside from notwithstanding the metal pass through, but just curious on the actual overall return profile. Thanks.

Speaker #2: You are making some more investments there. So I guess, do you expect this kind of mid-single-digit growth to persist? And then how would you kind of rate the profitability there versus maybe some of your other regions?

Speaker #2: Do you think there’s any need for, or any opportunities for, improved returns and margins in Europe as you move throughout? Notwithstanding the metal passer, but just curious about the actual overall returns profile.

Speaker #2: Thanks.

Speaker #3: Sure, yeah. No, I think we feel very good about the market overall. As I say, I think we've got some very positive data coming through on can volumes.

Oliver Graham: Sure, yeah. No, I think we feel very good about the market overall. As I say, I think we've got some very positive data coming through on can volumes right across the geographies. We see some temporary effects when deposit schemes are introduced, we see that a bit in Poland this year. We saw it in the Netherlands a couple of years ago. Overall, there seems to be, again, strong momentum behind the can relative to other substrates that are grappling with either input cost inflation ahead of ours or from sustainability concerns. We see a lot more innovation going into the can. We see innovation going into the can much earlier. Customers talking to us about how they might have launched on the beer side in glass and then brought the can innovation later, but now it's all simultaneous.

Speaker #3: Right across the geographies, we see some temporary effects when deposit schemes are introduced. So we see that's a bit in Poland this year. We saw it in the Netherlands a couple of years ago.

Speaker #3: But overall, there seems to be, again, strong momentum behind the can relative to other substrates that are grappling with either input cost, inflation, ahead of hours, or from sustainability concerns.

Speaker #3: So we see a lot more innovation going into the can. We see innovation going into the can much earlier. So customers talking to us about how they might have launched on the beer siding glass and then brought the can innovation later, but now it's all simultaneous.

Speaker #3: So I think a lot of positive momentum. And our peers have talked about this, but if you look across the European markets, we still have some very low penetration rates. We've still got two-way glass in some markets and other substrates.

Oliver Graham: A lot of positive momentum and our peers have talked about this, but you look across the European markets, we still have some very low penetration rates. We've got still two-way glass in some markets and other substrates in categories where we're typically very strong. The European growth story is fully intact and looks very positive for years to come, which obviously underpins some of the investments we're making and our peers are making to meet that demand and make sure the industry can continue to grow. That's why we were pleased to announce the upsizing on the UK and Spain investments. In terms of profitability, traditionally, a very strong profit region, Europe, for us. Suffered a bit coming through Russia, Ukraine, and the energy crisis. We're on some recovery, we do see better margin performance this year.

Speaker #3: In categories where we're typically very strong. So I think the European growth story is fully intact. And looks very positive for years to come, which obviously underpins some of the investments we're making and then our peers are making to meet that demand and make sure the industry can continue to grow.

Speaker #3: And that's why we were pleased to announce the upsizing on the UK and Spain investments. In terms of profitability, I mean, traditionally, a very strong profit region Europe for us.

Speaker #3: Suffered a bit coming through Russia, Ukraine, and the energy crisis. We're on some recovery. So I think we do see better margin performance this year.

Speaker #3: And again, you should be very careful, obviously, as you know, on looking at any percentage margins, given the impact of the aluminum price on the revenue side.

Oliver Graham: Again, you should be very careful, obviously, as you know on looking at any percentage margins, given the impact of the aluminum price on the revenue side. Certainly at the EBITDA 1,000 level, we do see improved performance. Yeah, we think we can drive improved performance in Europe through ongoing focus on cost. We always have had that, but there's some good programs that we are pursuing at the moment. Obviously the market's tight, that also should be positive. Yeah, we'd hope for some improvements there.

Speaker #3: But certainly, at the deeper DARPA 1000 level, we do see improved performance. And yeah, we think we can drive improved performance in Europe through ongoing focus on cost.

Speaker #3: We always have had that, but there's some good programs that we are pursuing at the moment. And obviously, the market's tight. So that also should be positive.

Speaker #3: So, yeah, we'd hope for some improvements there.

Speaker #2: Thanks for that. And I guess just as a follow-up on the Americas, conversely there, it seems like obviously, you may be able to maintain those single-digit volume growth in North America, but South America tends to be considerably more volatile.

Arun Viswanathan: Thanks for that. I guess just as a follow-up on the Americas, conversely there, it seems like obviously you may be able to maintain low single-digit volume growth in North America, but South America tends to be considerably more volatile. With the World Cup now kind of in the rear view mirror, do you expect that region to settle into a low single-digit growth trajectory? Could it be slightly lower than that with a slightly negative offset coming through South America? How should we think about normalized growth rates in your Americas business? Thanks.

Speaker #2: So, with the World Cup now kind of in the rearview mirror, do you expect that region to settle into a low single-digit growth trajectory?

Speaker #2: Or could it be slightly lower than that with a slightly negative offset coming through South America? How should we think about normalized growth rates in your America's business?

Speaker #2: Thanks.

Speaker #3: Yeah, there's no question Brazil has become more volatile post-COVID. So I think a number of effects going on there. I think the economy overall and the consumer suffered much more than in developed markets.

Oliver Graham: Yeah. There's no question Brazil has become more volatile post-COVID. I think a number of effects going on there. I think the economy overall and the consumer suffered much more than in developed markets, and we see a longer recovery trajectory out of that. Obviously in that backdrop, you get more competitiveness at our customers to chase those lower spending dollars. We also see increased competitive activity anyway in the brewers, with an additional brewer growing over the last five, 10 years, and with the leading player playing much more in the off-trade than they used to. What you see, I think, is, A, a little bit more weakness on the consumer side, and then you see much more volatility quarter to quarter, depending on which brewer is chasing volume versus margin.

Speaker #3: And we see a longer recovery trajectory out of that. And then obviously, in that backdrop, you get more competitiveness at our customers to chase those lower spending dollars.

Speaker #3: And then we also see increased competitive activity anyway in the brewers, with additional brewers growing over the last five to ten years, and with the leading player playing much more in the off-trade than they used to.

Speaker #3: So what you see, I think, is A, a little bit more weakness on the consumer side. And then you see much more volatility quarter to quarter, depending on which brewer is chasing volume, versus margin.

Speaker #3: And we certainly are finding it harder to call and project the market than we used to. I think it remains a market with a very positive backdrop in terms of the growth of the can relative to two-way glass.

Oliver Graham: We certainly are finding it harder to call and project the market than we used to. I think it remains a market with a very positive backdrop in terms of the growth of the can relative to two-way glass. I think that will still continue to play out. Obviously, the leading player now also driving that, whereas they used to hold that back. I think low singles is a minimum I'd hope for in terms of the overall growth. I do think the volatility will persist, and it certainly has become much more challenging to predict. That's another factor, I think, behind our H2 guide, that Q4 is obviously the summer season in Brazil, and we could get quite a wide range of volumes there at the moment in our estimates. We're also being cautious on Q4 as a result of that.

Speaker #3: I think that will still continue to play out. Obviously, the leading player now is also driving that, whereas they used to hold that back. So, yeah, I think those single digits are the minimum I'd hope for in terms of the overall growth.

Speaker #3: But I do think the volatility will persist and it certainly has become much more challenging to predict. And that's another factor, I think, the type behind our H2 guide that Q4 is obviously the summer season in Brazil.

Speaker #3: And we could get quite a wide range of volumes there at the moment in our estimates, so we're also being cautious on Q4 as a result of that.

Speaker #2: Thanks.

Arun Viswanathan: Thanks.

Speaker #1: We go next to the line of George Stafos with Bank of America.

Operator: We go next to the line of George Staphos with Bank of America.

Luciano Rigotti: Hi. Luciano Rigotti stepping in for George Staphos. I have two questions. First, what are the key factors behind the drop in EBITDA from about $240 million in Q2 to the guided range? Can you quantify the major drivers of that decline? Second, what effects did mix have on Q2 results, and why were your results ahead of guidance? Thank you.

Christian Fedrigotti: Hi. Luciano Rigotti stepping in for George Staphos. I have two questions. First, what are the key factors behind the drop in EBITDA from about $240 million in Q2 to the guided range? Can you quantify the major drivers of that decline? Second, what effects did mix have on Q2 results, and why were your results ahead of guidance? Thank you.

Speaker #4: Hi, Luciano Ricotti stepping in for George Stafos. I have two questions. First, what are the key factors behind the drop in EBITDA from about 240 million in 2Q to the guided range?

Speaker #4: Can you quantify the major drivers of that decline? And second, what effect did MIX have on 2Q results and why were your results ahead of guidance?

Speaker #4: Thank you.

Speaker #3: So, look, I think if the first question was about why Q3 is below Q2, Q3 is always below Q2 because Q2 is our high season.

Oliver Graham: look, I think the first question was about why is Q3 below Q2. Q3 is always below Q2, because Q2 is our high season, and we generally are coming off a bit of that into Q3 and the remainder of the year. I think if that was that question, I think probably that's the answer to that, largely. We also have called out, I think that there are some inflationary pressures in the H2 that we don't have in the H1. The H2 overall is down a little bit. I think your other question was about mix. Obviously, if you look at the North American results, we've lost quite a lot of volume there. Our overall volume mix line is flat.

Speaker #3: And we generally are coming off a bit of that into Q3 and the remainder of the year. So I think if that was that question, I think probably that's the answer to that largely.

Speaker #3: We also have called out, I think, there are some inflationary pressures in the second half that we don’t have in the first half. And so, the second half overall is down a little bit.

Speaker #3: And then I think your other question was about mix. So, obviously, if you look at the North American results, we've lost quite a lot of volume.

Speaker #3: But our overall volume MIX line is flat. So you can see from that that there is positive MIX in North America. And we called out the specialty can percentage increasing.

Oliver Graham: You can see from that there is positive mix in North America, we called out the specialty can percentage increasing. There was also good mix in Europe with the categories we're talking about. That, yeah, I think Brazil at this point was a bit less relevant. I think I caught your questions, but I'm turning to Stefan just to check.

Speaker #3: And then there was also good MIX in Europe with the categories we're talking about. And yeah, I think Brazil at this point was less was a bit less relevant.

Speaker #3: So I think I caught your questions, but I'm turning to Stefan just to check on.

Stefan Schellinger: No, I think you did.

Speaker #5: No, I think you did.

Speaker #3: Okay.

Oliver Graham: Okay.

Operator: We'll go next to Michael Roxland with Truist Securities.

Speaker #1: We'll go next to Michael Roxland with Truist Securities.

Speaker #6: Hey guys, it's Nico Pacini on from Mike Roxland. Just wanted to check quickly on maybe an early read for July volumes by region or Q3 volumes.

Niccolo Piccini: Hey, guys. It's Niccolo Piccini on for Mike Roxland. Just wanted to check quickly on maybe an early read for July volumes by region for Q3 volumes. Then more specifically, how you think of, I guess, Brazil in the H2, going off a few questions ago. Thanks.

Speaker #6: And then more specifically how you think of, I guess, Brazil in the second half going off a few questions ago. Thanks.

Speaker #3: Yeah, I think the July volumes are looking sort of largely correlated with Q2. So, strong in Europe. I think, yeah, U.S., North America a bit better probably, as we talked about.

Oliver Graham: Yeah. I think the July volume's looking sort of largely correlated with Q2, strong Europe. I think, yeah, US, North America, a bit better probably, as we talked about. I think the H2 should be stronger than the H1, we start to see that in the July volumes. Brazil definitely still soft. Market soft and our volumes a bit softer. I think that underlines our caution on Brazil H2. We do have in the plan some volume growth. We still expect that. What we've seen in the last few years is the summer season can really take off well, which will obviously be happening from October onwards. We'd be hopeful for that. Again, I think we've called it out, I think our peers are calling it out.

Speaker #3: I think the second half should be stronger than the first half when we start to see that in the July volumes, and then Brazil is definitely still soft.

Speaker #3: Market soft. And our volumes a bit softer. So I think that underlines our caution on Brazil second half. We do have in the plan some volume growth.

Speaker #3: We still expect that. And obviously, what we've seen the last few years is the summer season can really take off well. Which will obviously be happening from sort of October onwards.

Speaker #3: So we'd be hopeful for that. But again, I think we've called it out. I think our peers are calling it out. There's a lot of volatility.

Oliver Graham: There's a lot of volatility in the Brazil market at the moment, depending on which of the brewers is really pushing volume.

Speaker #3: In the Brazil market at the moment, it depends on which of the brewers is really pushing volume.

Speaker #6: Got it. And then just one follow-up on your corporate structure. Can you give any update to what's happening there, maybe where the parent company is looking at potentially separating glass and metal?

Niccolo Piccini: Got it. Just one follow-up on your corporate structure. Can you give any update to what's happening there with maybe what the parent company is looking to do, separating potentially glass and metal?

Speaker #3: Yeah, no, we don't have any update on that at this point.

Oliver Graham: Yeah. No, we don't have any update on that at this point.

Speaker #6: Got it. Thank you. I'll turn it over.

Niccolo Piccini: Got it. Thank you. I'll turn it over.

Speaker #1: Once again, if you'd like to signal for a question, please press star one and we'll pause briefly to assemble any further questions. At this time, we have no further questions.

Operator: Once again, if you'd like to signal for a question, please press *1 and we'll pause briefly to assemble any further questions. At this time, we have no further questions. I'd like to turn the floor back to Oliver Graham for any closing remarks.

Speaker #1: I'd like to turn the floor back to Oliver Graham for any closing remarks.

Speaker #3: Thanks, Melinda. And thanks to everyone on the call. So just to summarize, in the second quarter, we reported strong adjusted EBITDA growth of 14% versus the prior year quarter.

Oliver Graham: Thanks, Vanessa, and thanks to everyone on the call. Just to summarize, in the Q2, we reported strong adjusted EBITDA growth of 14% versus the prior year quarter, significantly ahead of guidance primarily driven by Europe, which benefited from favorable input cost recovery and strong volume growth. A testament to, I think, the resilience of AMP's business. Reflecting on our strong H1 performance and confidence in our outlook, we're upgrading our guidance for full-year adjusted EBITDA to between $775 and 790 million. With that, we look forward to talking to you again at our Q2 results. Thanks very much.

Speaker #3: Significantly ahead of guidance, primarily driven by Europe, which benefited from favorable input cost recovery and strong volume growth. It's a testament to, I think, the resilience of AMP's business.

Speaker #3: And reflecting on our strong first half performance and confidence in our outlook, we're upgrading our guidance for full year adjusted EBITDA to between 700 and 75 and 790 million dollars.

Speaker #3: And with that, we look forward to talking to you again at our Q2 results. Thanks very much.

Operator: This concludes today's conference. We thank you for your participation. You may disconnect at this time.

Q2 2026 Ardagh Metal Packaging SA Earnings Call

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