Europe Glass EBITDA for the quarter decreased by 1%
Ardagh third quarter results sees ‘sluggish’ beer category
The company completed the sale of six former Anchor Glass plants and certain related assets to an affiliate of KPS in June, recognising a net loss on disposal of €124m.
Integration of VNA
It also completed the purchase of 100% of the equity of Verallia North America (VNA), from Compagnie de Saint Gobain in April for a consideration of $1.5bn on a cash and debt free basis. The integration of that company continues as planned.
VNA, which has its HQ in Muncie, Indiana, is the second largest glass container manufacturer in the US, serving the North American F&B industries.
FoodProductionDaily reported in January Ardagh would proceed with its acquisition of VNA after negotiating a settlement with the US federal Trade Commission (FTC).
In the group financial report, the company claims: ‘If both the acquisition of VNA and the Divestment had occurred on January 1, revenue and EBITDA for the Group for the nine months ended 30 September 2014 would have been €3,669m and €617million, respectively’.
Ardagh Group said its Europe Glass EBITDA for the quarter decreased by 1% to €85m on a constant currency basis, reflecting lower activity in its Glass Engineering business.
Glass Packaging Europe volume/mix declined slightly compared with a strong third quarter of 2013, but this was offset by cost reductions and efficiencies.
'Seasonal fluctuations'
“The Group’s revenue and cash flows are both subject to seasonal fluctuations,” it said in the results.
“Demand for our glass products is typically strongest during the summer months and in the period prior to December because of the seasonal nature of beverage consumption.
“Demand for our metal products is largely related to agricultural harvest periods. The investment in working capital for Glass Packaging typically peaks in the first quarter.
“The investment in working capital for Metal Packaging generally builds over the first three quarters of the year, in line with the seasonal pattern, and then unwinds in the fourth quarter, with the calendar year-end being the low point.”
The report went on to state Europe Glass revenue of €374m in the third quarter was 2% below the same period in the prior year and was 4% lower on a constant currency basis. Glass Packaging revenue, which excludes Glass Engineering, decreased by 1% at constant currency, as volume slightly lagged a strong third quarter in 2013 when revenue grew by 6%.
“Reduced activity in the smaller Glass Engineering business, which follows a different cycle to the packaging business and enjoyed a strong prior year, accounted for the majority of the fall in Europe Glass revenue in the quarter,” it said.
Click here to read the full report.
