Ardagh Group has reported its Q2 2024 financial results.
Ardagh Glass Packaging – Highlights
Ardagh Glass Packaging generates its revenue principally from selling glass containers. Ardagh Glass Packaging revenue is primarily dependent on sales volumes and sales prices. Ardagh Glass Packaging includes a glass engineering business, Heye International.
Beverage and food end market sales within the glass packaging business are seasonal in nature, with strongest demand for beverage market sales during the summer and during periods of warm weather, as well as the period leading up to holidays in December. Accordingly, Ardagh Glass Packaging’s shipment volumes of glass containers is typically lower in the first quarter. Ardagh Glass Packaging builds inventory in the first quarter in anticipation of these seasonal demands.
In addition, Ardagh Glass Packaging generally schedules shut-downs of its production facilities for furnace rebuilding and repairs of machinery in the first quarter (for Europe and North America) and in the second quarter (for Africa). These shut-downs and seasonal sales patterns adversely affect profitability in Ardagh Glass Packaging’s glass manufacturing operations during the first quarter of the year. The timing and extent of production facility shut-downs may also affect the comparability of results from period to period. Ardagh Glass Packaging’s working capital requirements are typically greatest at the end of the first quarter of the year.
Ardagh Glass Packaging’s Adjusted EBITDA is based on revenue derived from selling glass containers and glass engineering products and services and is affected by a number of factors, primarily cost of sales. The elements of Ardagh Glass Packaging’s cost of sales for its glass container manufacturing business include
(i) variable costs, such as natural gas and electricity, raw materials (including the cost of cullet), packaging materials, decoration and freight and other distribution costs, and
(ii) fixed costs, such as labour and other production facility-related costs including depreciation and maintenance.
In addition, sales, marketing and administrative costs also impact Adjusted EBITDA. Ardagh Glass Packaging’s variable costs have typically constituted approximately 50 percent and fixed costs approximately 50 percent of the total cost of sales for our glass container manufacturing business.
The full report is available here.