Welcome to the RDAB Metal Packaging S.A. Q3 2026 Investor Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Stephen Lyons, Investor Relations. Please go ahead.

Thank you, Operator, and welcome, everybody.

Thank you for joining today for RDAB Metal Packaging's third quarter 2026 earnings call. which follows the earlier publication of AMP's earnings release for the third quarter. 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 notebook. AMP's earnings release and related materials for the third quarter can be found on AMP's website at ir.ardalmentalpackaging.com. The 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 statement 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.

Thanks, Stephen. We delivered a strong performance in the third quarter with growth in global shipments and adjusted EBITDA ahead of our guidance. Beverage can shipments increased by 2%, driven by a strong growth in Europe of 6%, partly offset by a decline of 1% in the Americas, which represented a sequential quarterly improvement supported by the strength of our customer portfolio. Our adjusted EBITDA outperformance in the quarter reflected good results in both segments. Europe continued to benefit from robust volume growth, and the Americas were supported by a favorable category mix in North America, compensating for the expected volume reductions from the previously discussed contract resets. Beverage can industry demand remains resilient across each of our markets, driven by strengths in key categories and continued share gains in the packaging mix. Given this demand strength, we are pleased to announce that we are accelerating and upscaling our previously outlined investments in Europe. to capture this growth and to support our customers by building two new can lines in existing facilities in the attractive markets of the UK and Spain. Before we discuss the quarter in more detail, I'd like to address developments regarding the AMP sale process. On August the 13th, Ardagh Holdings, AMP's controlling shareholder, announced that advisors had been appointed to prepare for a potential sale of AMP and this process is ongoing. We will not be taking any questions on the topic on this call. Our focus remains on driving AMP's operational and financial performance. Now looking at AMP's Q3 results by segment. In Europe, third quarter revenue increased by 11% to $693 million or by 12% on a constant currency basis compared with the same period in 2025. This was due to the pass-through of higher input costs and volume growth. Shipments increased by 6% for the quarter, which reflected underlying growth across all categories. We experienced strong growth in carbonated soft drinks and in the energy category, as well across our diverse range of smaller growing categories. Reported beer volumes declined slightly versus the prior year quarter, reflecting certain contract resets at the beginning of the year, while industry beer volumes filled in cans showed good growth in our main markets. Third quarter adjusted EBITDA in Europe increased by 11% to $91 million versus the prior year on both a reported and a constant currency basis. Adjusted EBITDA growth was mainly driven by a high input cost recovery and strong volume growth partly offset by the impact of the IFRS 15 contract asset as well as slightly higher operations and overhead costs. Regarding our direct energy exposure in Europe, AMP is well covered for its energy needs. For 2027 we're over 80% hedged and we're over 70% covered for 2028. From our analysis of beverage industry scanner data by packaging type for the third quarter, we see strong overall beverage consumption trends in key categories as well as a continued share gain for the beverage can in the pack mix, particularly in CSD. For full year 2026, following strong commercial momentum during the summer, and with continued robust demand, we expect to at least meet our guidance for approximately 3% volume growth in Europe. Capacity remains tight in the region and as indicated in my opening remarks, to support our customers' growth and based on their commitments, we've decided to accelerate and upsize the previously announced growth investments in Spain and in the UK. These investments represent attractive high return capital deployment opportunities and will drive material adjusted EBITDA growth for AMP in Europe from 2028 onwards. As we are reaching the end of 2026, we will give some preliminary comments about 2027 before our formal guidance at our full year results. In Europe, we expect AMP to show strong volume growth in the range of 3 to 4% in line with the industry as we go into the remainder of our available capacity. Turning to the Americas, revenue in the third quarter increased by 25% to approximately $1 million, principally reflecting the pass-through of higher input cost to customers, including the impact of higher metal costs and freight cost pass-through, partly offset by lower shipments. Americas adjusted EBITDA for the quarter decreased by 3% versus the prior year to $122 million, as a result of lower volumes, higher operations and overhead costs, as well as lower input cost recovery versus the prior year quarter, partly offset by favorable category mix. In particular, strength in specialty can volumes in North America. In North America, shipments for the quarter were down less than 1% versus the prior year. This improved sequential shipments performance versus the first half reflects the strength of our customer portfolio, largely offsetting the expected impact of contract resets. Underlying demand dynamics in the industry remain strong, with supportive year-to-date industry scanner data 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 broad distribution and successful innovation. Looking into 2027 in North America, as we have previously guided, we expect a return to shipments growth at least in line with the industry. This reflects our attractive portfolio mix as well as some contractual gains. In Brazil, third quarter beverage can shipments decreased by 5% due to customer mix and a contract reset. This lagged improved industry growth in the quarter, which was driven by a strong performance from the major brewer. We're now entering the busiest summer selling season in Brazil, and we anticipate an improved performance with moderate shipments growth in the fourth quarter. In terms of 2027, while we remain confident in the long-term mid-single digit percentage growth rate for the Brazilian can market, We recognize the volatility of the market in recent years, as well as our previously mentioned contractual reset, and we're expecting moderate volume growth for AMP. I'll hand over now to Stefan to talk you through our financial position for the quarter before finishing with some concluding remarks.

Thanks, Olli, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $736 million. Net debt over the last 12 months adjusted EBITDA of 5.1 at quarter end compares with 5.2 for prior years Q3. On a comparable like-for-like basis, pro forma for the Q4 2025 refinancing of the preferred shares, the net leverage ratio has reduced from 5.6 in the prior year quarter as a result of AMP's strong adjusted EBITDA growth. Our guidance for the various free cash flow components for full year 2026 is mostly unchanged, and we approximately expect the following. Total capex of 240 million, cash interest of 220 million, lease principal repayments of approximately 120 million, cash tax of approximately 30 million, and a small outflow in working capital. Olli already discussed earlier our growth projects for Europe. These two investments will lead to an increase of total growth capex from 90 million in 2026 to approximately 250 million in 2027 before returning to a more normalized level in 2028. These growth investments represent very attractive capital deployment opportunities, will support AMPs and our customers' continued growth in Europe, and will drive adjusted EBITDA growth in 2028 and beyond. Finally, today we have announced our unchanged quarterly ordinary dividend of 10 cents per share. With that, I'll hand it back to Ollie.

Thanks, Stefan. Before moving to take your questions, I'll just recap on AMP's performance and key messages. Global volumes increased by 2% and adjusted EBITDA of 213 million in the third quarter exceeded our guidance, reflecting a strong performance in both segments. Reflecting our strong performance, we're upgrading our guidance range for 2026 full-year adjusted EBITDA to be between $785 and $795 million. Our Q4 guidance reflects current FX rates, some inflation headwinds, and the quarter also lapsed strong prior year shipments growth of 4%. While not giving specific guidance for 2027, As we sit here today, the year is shaping up for a stronger global volume performance, led by a return to at least industry growth in North America volumes and continued strong European performance, despite some weakness in Brazil. In terms of profitability, we are operating in a more inflationary environment, but given our robust pass-through mechanisms and our continued focus on operational improvements, together with our positive outlook for volume growth, we still expect to show moderate year-over-year adjusted EBITDA growth at constant currency. Having made these opening remarks, we'll now proceed to take any questions that you may have.

Thank you. If you'd like to ask a question, you may signal by pressing star 1 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 1 to signal for a question. And we'll go to our first question from Erin Biswanathan with RBC Capital Markets. Please go ahead.

Yeah, thanks for taking my question. I guess I just wanted to get your thoughts on maybe two things. So first off on the volume outlook, I was just curious if you noted some strength in many of your categories. Maybe you can just broadly comment on in the Americas where you're seeing strength, obviously in energy and sparkling water, but do you expect that to continue, I guess, especially in in the face of increasing inflation. Do your beverage customers, you know, do you get the sense that they're still pushing volume and promotions or is there a possibility that you could see some increased prices and that would impact demand? Thanks.

Yeah, I mean, I think we already have inflation in the system and we're not seeing any particular negative impact. So I think our impression is that, you know, off-trade volumes obviously to some extent do better in inflationary times because consumers pull out of out-of-home consumption and pull back more into the off-trade. The cans are very efficient. for transporting and selling beverages. So it's very good if you want to promote promotional activity looks normal. So, you know, much stronger than it was in the COVID years. And so it's returned to more normal levels. And I think we're seeing, you know, strength, as we mentioned in the remarks, particularly in the energy sector in Cannes. So still, you know, well north of mid single digits, but also good strength in CSD, which is a much bigger category. So also very, you know, positive for the can and reflecting, you know, pack mix change and also, you know, certain segments of CSD growing well. Sparkling Waters has been a bit up and down, but overall, if you look back over the last few years, you know, definitely a very positive category for the can. And then you have all the new drinks, you know, the sort of healthy wellness drinks, the gut health drinks, also in really strong growth. Yeah, the only negative, if you look at North America, is really beer in cans, which has been weak for a number of years now. And as we said in the remarks, we have a very low exposure to that category. So if you look at our portfolio, it's got good growth, good innovation still coming to the category. And then Brazil, you know, we're talking Americas, it's really still mostly beer. You have good growth in CSD and increasingly in energy drinks, but off a much smaller base. But the good news for Q3, we didn't fully participate in this, but the good news for Q3 is I think we had something like 7% growth in beer in cans, so much better, which puts a year-to-date number of 3.5% for the industry in cans. you know, that's a very good number back more to where I would expect after a relatively weaker first half. So, yeah, I think as we look across the world, but, you know, you asked about the Americas, I think we don't see any particular headwinds from the inflationary environment. We see a lot of positivity around can growth.

Okay, thanks for that. And if I could just ask a follow-up, you know, I know that you're not really commenting on the sale process, but I just wanted to ask a question about some of the capacity that you have It sounds like you are in plans of expanding your capacity. Would that be affected at all by any of the process that you're taking? And I guess related, is there a possibility that your network could be split up and kind of owned by different parties, or is it likely that it will remain in one piece? Thanks.

Yeah, as we said, we're not commenting on it. I think AMP is a very strong global competitor with strength in all three regions, and there are strong advantages to being a global competitor in the can industry, as we can see from who survives and grows, but we're not commenting on the process. The capacity plans are completely independent of the process, so we're operating as an independent company with a controlling shareholder. That's how we have to keep operating at the moment. and those capacity plans are, as I say, completely independent of the process. Thanks.

If you find that your question has been asked, you may remove yourself from the queue by pressing star 2. We move next to Matt Roberts with Raymond James.

Stephen, good morning or afternoon or whatever. On Brazil, I think that was still down. Peer saw increases. Sounds like market was up. Any considerations by customer in 3Q, or was that really due to that customer reset? And on the Brazil volume outlook for 27, being a little bit lower than that long-term grade, reset versus general customer demand.

Yeah, Matt, you broke up a bit, but I think we got the point, which is it's about Brazil and the general customer situation versus the contract reset. So most of this is about the contract reset. We have puts and takes with other customers, but we'd be up at or around or above even up market growth without the reset. So I think, yeah, the majority of the guidance we're giving you and the explanations we're giving you for 2026 and for 2027 are linked to that. As we said, you know, there was a very encouraging return to growth in Q3 in Brazil. We said it in the remarks. We strongly believe it's a long-term, very positive growth market for the can. There's still very good fundamentals with the switch from two-way glass to single-use packaging, of which can is the main packaging in Brazil. So, yeah, market's still very good. up and downs with with our customer base generally. But yeah, most of the impact you're seeing on our guidance and explanations for twenty six and twenty seven is is that research. Thank you. I hope I'm a little bit clearer now, but I think

One other on inflation, more so on the cost side, how that tracked versus the expectations you had in July. Any variances between U.S. and Europe there or incremental impact to 4Q or spillover into 2027? Thanks again for taking the questions.

Yeah, I'll start and then obviously Stefan, if there's anything I missed. More negative than at our Q2, just because I think at that point oil price had dropped. There seemed to be a higher likelihood of a resolution to the situation in the Middle East, whereas now obviously seems to be very frozen in terms of improvement. So, yeah, slightly more headwind we see going into Q4 probably and into 27. with the majority of the impact, probably more European, though I think ODMs is the big category, the direct materials. We've called that out before in terms of coatings being a part of our cost structure that's most linked to oil price. So, yeah, that's probably the high-level view. I don't know, Stefan, if you'd add anything to that.

Yeah, so that's a little bit on the freight side, but we have, you know, very good recovery and pass-through mechanisms. There's also a little bit on the energy side, probably more so in Europe, but then again, you know, there's the pass-through side of things, plus we have a hedging policy and are significantly covered for the year 2027 and beyond. So I think net-net, I think these are probably the key items to call out.

Thank you, Argen. Thank you.

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

Yeah, hi, good morning. I had some similar questions on cost, so it might be a little bit redundant, but I guess near term, if I look at how you talked about fourth quarter, I think your volume is you're talking about up a couple percent-ish overall. Your EBITDA guidance down about 4% to 5% at the midpoint versus you were up a couple percent. on a couple percent volume in 2Q. So is that incremental inflation in fourth quarter? Is there something else going on in terms of some lead lag items that we should be considering?

Yeah, again, I'll kick it off and Stefan can add if necessary. But so look, I think we did say we're lapping a very strong Q4 last year. I think we had 8% growth in North America with good mix and 4% overall. but it's also true that there is some volume growth in Q4 for us. So I think there's some FX headwinds as we see obviously the dollar strengthening a little bit relative to the Euro. There are some timing effects we called out I think in our Q2 results that we had some impacts in the first half of the year that would reverse out in the second half around metal timings and some freight hedge timings. And then there is the inflationary headwinds that we just talked about which is really around the coatings which is probably the key are the key factors. So, yeah, those are the main elements. Obviously, at the top end of the guidance, we're more or less flat year on year, midpoint a few million off. So, it's not anything dramatic, but those are the two or three headwinds, I think. Stefan's nodding, so I think we're okay.

How much are coatings as a percentage of your COGS? I'm surprised that you and your peers as well are kind of citing that as a and Stephen Schellinger. I think it's just that they are

products with pass-through in-year. We then catch up with our PPI and other pass-through mechanisms over the year-end. So we see them more in-year than other COGS categories. And as I said, it's been a very material step up in the underlying cost base for them. But yeah, so we're not talking huge numbers, but certainly relevant enough to be a headwind for Q4 and going into 2017. Okay.

All right. Thank you.

We turn next to Nicholas Sherwood with Bank of America.

Nicholas Sherwood Hi, thank you for taking my question, asking for George Zappa. So now that you've been in this higher inflation, higher oil price environment for a couple of months now, where are you seeing areas where you can find those incremental savings and mitigate inflation through the end of the year, at the beginning of the year?

George Zappa

Always working on productivity and efficiency. It's just the nature of the industry. So there's lots of areas we look. We lightweight the can, reduce metal. We have every year very stretched targets on the plants for reducing spoilage and running more efficiently and using capacity more effectively. We look in every corner of SG&A. We have very significant programs around that every year. And then obviously we have a very active procurement function looking at saving on the input cost. So, you know, all of the above is the answer every time. And that's just the nature of the beast. It's that kind of industry. And if you're not doing that every year, to a significant extent, you fall behind the industry and then your pricing gets out of line. So, yeah, I don't see there's anything particularly new in what we're doing. Obviously, we're in very engaged conversations with the suppliers involved about how we phase some of those price increases and and manage those over time. But there's no particular magic to this. You know, it's just a significant, unexpected rising cost within the year. And then, as I said, what we'll see over the next few months is our pass-throughs, you know, kicking in in terms of our year end. They go into the next year in terms of our customer pricing. And so that will start to mitigate some of these impacts. But nevertheless, we still see some impact of that in 2027 relative to our original expectations.

Okay, and then my second question is, is there anything notable that you've seen in the early volume trends for the fourth quarter and the beginning of 2027, if you have any visibility into that?

I think they're all good. I mean, I really think the beverage can industry is in a strong position at the moment, and despite the macro environment to the points I made at the top of the call, we're not seeing that impact on the industry volumes or our volumes. I think volume growth is really strong and 6% Q3 and go back 10 years would have all died for these numbers and our peers are reporting very similar numbers they've been ahead of us in some quarters we're ahead this quarter European can growth is really benefiting I think in the pack mix and also we're seeing much more innovation in soft drinks in particular going into the can and then North America bigger market but still growing overall Despite the drag on the beer category, we still see growth, and particularly, again, in soft drinks, energy drinks, and the new drinks. And despite the inflationary environment we see in North America and Brazil, as I said, we're now after what was a pretty tough first half. We're at 3.5% year-to-date, 7% in the quarter, and we're going into the summer season. and we don't see anything different for 2027 to be honest. We had a very tight summer in Europe on key sizes, lots of issues fulfilling demand, not just us, the whole industry. That's why we've talked about upscaling and accelerating our investments because we're conscious that we're not supporting our customers' growth to the extent they need. And again, that's because they're putting a lot more innovation and product into cans. North America, certainly see very positive trends into next year. Again, a lot of innovation going into cans, a lot of new products coming. And Brazil, I think it's very up and down at the moment. We call that out. But, you know, again, there's just a very long-term fundamental shift of filling from two-way glass into cans. So I think the industry is in a really good place. I think we're well positioned to take advantage of that. that growth, you know, with the strength of our customer relationships, the commitments they're making, and that's why we're investing more in 2027 to capture that growth. So, yeah, all good I think is the short answer to the question.

Okay, great. Thank you for all that detail, and I will return to the queue. Thank you for asking.

Thank you.

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

Hey guys, this is Nico on from Mike. Thanks for taking my questions. It's just starting out, you know, can you help us understand maybe the competitive backdrop, you know, with yourself and your peers adding capacity by region, but also projecting strong demand? Do you think that the current capacity expansion plans are enough to fully capture your demand expectations? And then, you know, with that tight capacity, could that incentivize maybe new entrance into the market? in the next few years?

Yeah, no, yeah, good question, Mike. I mean, I think Europe, we're all struggling to follow the demand is my impression. Again, I think we had, as an industry, a tough summer. Operationally, there were challenges for everybody, I think, with some of the transitions on coatings and particularly weather effects. But nevertheless, I think the capacity just wasn't there for the scale of demand. We've seen announcements by ourselves and our peers, but I think with the sort of level of growth we're getting and the scale that the European market has reached, we're going to stay in a tight situation would be my prediction for the next at least two, three years while we all recognize it and respond to it. I don't personally see a big threat from new entrants. I think there was a lot of new entrants tried that during the COVID period and pretty much all gone. I think this is an industry with scale where you need scale. I talked about it. You know, I think being a global competitor is of significant advantage in this industry, the scale at every level. And so, yeah, I mean, maybe, but I don't see that as a particular threat to our growth or our profitability. Yeah, and I'd make the same comments, North America and Brazil. I think North America is starting to feel tight on key sizes and and some key geographies. At the moment, we've got some capacity to grow into with the contract resets we had this year. So we're okay for the moment. But I think the industry as a whole is definitely tightening up. And Brazil, it will come. We have some capacity. We've talked about it, particularly in the Northeast. But again, capacity is coming into the market to respond to geographical changes. Demand, and all of that's very positive for the industry and helps also keep the industry in a good spot from a profitability point of view. So I don't see new entrants at the moment, and I don't see them having any material impact on the main players.

Understood. Thank you. And then just a quick follow-up, maybe on debt levels and your ability or need to refinance maturities that are coming due in the next couple of years. What might that do, I guess, to interest expense in 2027, if you've thought about it yet?

No, we're obviously always thinking about our financing situation, and as you say, there are maturities coming up. So, yeah, we're very much reviewing that situation. I don't think we've got anything to update today, but –

28 maturities are the next sort of in line. As you would expect, we are practically thinking about this. Clearly, there will be some incremental if and when we refinance, it will be at a higher cost given where markets are today. But then again, it will be a function of when and then what market we're going to basically tap. So yeah, more to come, I think, in that regard.

Got it.

Understood.

I appreciate it.

Once again, that is Star 1 to signal for a question, and we'll go next to Anthony Pettinari with Citi.

Good morning. I was disconnected earlier, so I apologize if this was already asked, but just as you look to 27 after kind of a transition year this year, And you think about percentage of contracts up for renewal or major contracts up for renewal. Is that across the three regions? Is that sort of a above average or below average year for contract turnover? Just how should we think about that after the transition year?

Yeah, I think definitely below average.

So I think North America in particular, we went through those big contract resets in, you know, 24, 25. And as you say, that had some impact on 26. It also had some positive impact on 2027. And so we've also called out where, you know, we've talked about growing at least in line with the industry. And actually, we would definitely hope to grow above based on those resets. and then I think similarly in you know South America similar story I think it's a below average year and also I think the European situation is definitely shifting a bit where you know with the investments that are coming in I think understandably customers are keen to contract and secure volumes and we're keen obviously to secure volumes for those investments and so are our peers so Yeah, it looks like at the minute we're getting to a pretty contracted spot for 2027 and 2028 and beyond, actually. So I think the short answer to the question is that these look like below average years for certainly the next 12 to 18, 24 months.

Great, great. That's very helpful. And then just maybe one last one. You know, it seems like BEBCANs are certainly gaining share on glass in, North America and Europe. I'm just wondering, you know, Brazil is maybe a little bit of a unique market in terms of their glass float. I'm just wondering if you could talk about the substitution dynamic that you're seeing or not seeing in Brazil. Just curious there.

Yeah, I think it's a long-term dynamic. So obviously the major brewer was the main determinant of that dynamic for a long time because they controlled the two-way glass market. Float and the position there. So depending where they wanted to push volumes into glass or two-way glass or into cans, they could shift the market. And obviously from that, you know, the terms sort of 2019 onwards, they really shifted into the off trade to avoid losing any more share. And then, yeah, I had a blip. We had a blip, I think, 22, 23 with very high metal prices where they pushed a bit more back into glass. But that was very temporary. And, you know, if we look at Q3, they clearly pushed hard on metal again. and the off trade, which is the natural trend that you have in every market as they develop. The off trade develops, you get mass supermarkets, you know, big trade and you get promotions in cans and obviously cheaper beer attracts consumers and that puts pressure on the on trade. So, yeah, I think that long term trend of two way glass into one way cans is fully intact and has got quite a long way to run. in Brazil, which is why we feel so confident about the market and why we talk about a long-term, mid-single-digit growth rate for that market.

Okay, that's very helpful.

I'll turn it over. Thanks, Anthony.

This concludes our question and answer session. I'll turn the floor to Oliver Graham for any closing remarks.

Thanks, Melinda, and thanks to everybody on the call. So I think just to summarize, strong performance in the third quarter, growth in global shipments and adjusted EBITDA ahead of our guidance, and reflecting that strong performance, we're upgrading our 26th full-year adjusted EBITDA guidance to between $785 and $795 million. And with that, we look forward to talking to you again at our Q4 results.

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