Ardagh Group S.A. (NYSE:ARD) Q2 2020 Earnings Conference Call - Final Transcript

Jul 23, 2020 • 10:00 am ET


Ardagh Group S.A. (NYSE:ARD) Q2 2020 Earnings Conference Call - Final Transcript


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Hello, everyone, and welcome to the Ardagh second quarter 2020 results webcast. Throughout this, all participants will be in listen-only mode, and afterwards, there will be a question-and-answer session. And please note that this is being recorded.

I will now hand you over to Paul Coulson, Chairman and CEO. Please begin your meeting.

Paul Coulson

Welcome everybody. Thank you very much for joining us today for our second quarter earnings call, which follows the publication earlier today of our results for the quarter. With me today, as usual, are David Matthews, our CFO; Shaun Murphy, our COO; and John Sheehan, our Corporate Development and Investor Relations Director.

As is usual, our remarks will include certain forward-looking statements. These reflect circumstances at the time they are made, and the Company expressly disclaims any obligation to update or revise any forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those that are set out in our SEC filings and news releases.

Our earnings release, financial report and related materials for the quarter can be found on our website at Information regarding the use of non-GAAP financial measures may also be found in the Notes section of the release, which also includes a reconciliation to the most comparable GAAP measures of adjusted EBITDA and adjusted earnings per share. Details of our statutory forward-looking disclaimer can be found in our SEC filings.

Before I move to discuss our results for the quarter, I would like to acknowledge the dedication shown by our 16,000 colleagues over recent months. Their outstanding commitment has enabled Ardagh to continue to play its role in the efficient functioning of the essential food and beverage supply chain. The task force, which we established in February last to coordinate our pandemic response, has been highly effective. And our priority remains providing a safe and healthy working environment for all our employees, whilst at the same time, serving our customers.

So, turning to our second quarter results, where I will focus on constant currency performance. Revenues for the quarter of $1.61 billion were 5% lower than the second quarter of 2019, and this comprised of 3% reduction in volume and mix and the pass-through of lower input costs. Adjusted EBITDA of $271 million compared with the prior year constant currency of $305 million, with growth in Metal Packaging offset by lower earnings in Glass Packaging, where our exposure to on-premise demand is higher.

Our second quarter performance represented a strong result in an unprecedented macroeconomic environment. This outturn was underpinned by our business mix focused on supplying sustainable, convenient and cost-effective consumer packaging to leading food and beverage brand owners. We estimate that approximately 80% of our products are sold through off-premise and retail channels, and this has mitigated the impact of premises closures for much of the quarter. Trends towards the end of the quarter were positive as lockdowns began to be lifted in most of our