CANPACK Reports Full Year 2021 Results

Krakow, Poland, April 7th, 2022 — CANPACK (the “Company” or the “Group” or CANPACK SA and its subsidiaries and CANPACK US), a global manufacturer of aluminum beverage cans and packaging solutions for the beverage and food industry, is pleased to announce, on a U.S. GAAP basis, with U.S. dollars (defined as “$”) as the reporting currency, its results for the three and twelve months ended December 31, 2021 (“Q4 2021”) and its trading update for Q4 and Full Year 2021.

Q4 and Full Year 2021 Highlights

• During the three and twelve months ended December 31, 2021, consumers have continued to switch to beverage cans as the preferred option for at-home consumption. CANPACK’s strong volume performance was driven by: (i) increased demand in Europe, Colombia and Africa, (ii) increased production volumes from our Czech Republic facility, which began production in June 2020 and (iii) increased demand from the U.S. customer base, for which we have shipped cans mainly from our facilities in Asia.
  
  
• Net sales increased 23% and 31%, respectively, for the three and twelve months ended December 31, 2021. This strong performance was driven by volume increases of 5% and 16% in the Beverage Cans and Ends division and 28% and 23% in the Glass Packaging division for the three and twelve months ended December 31, 2021, respectively. Additionally, beverage can net sales have increased for the three and twelve months ended December 31, 2021 due to higher LME levels, higher average conversion prices and higher transportation upcharges relating primarily to long distance deliveries during the three and twelve months ended December 31, 2021 compared to the same periods in 2020.
  
  
• Cost of sales increased 24% and 32%, respectively, for the three and twelve months ended December 31, 2021. This increase was primarily due to an increase in beverage can volumes and higher aluminum prices given higher LME and premium levels, higher labor costs primarily due to inflation and increased transportation costs during the three and twelve months ended December 31, 2021 compared to the same periods in 2020.
  
  
• Adjusted EBITDA decreased to $92 million for the three months ended December 31, 2021 compared to $108 million for the same period in 2020 (-15%). This decrease was primarily driven by Olyphant moving from start-up to ramp-up phase, resulting in a $13 million loss. Adjusted EBITDA increased to $524 million for the year ended December 31, 2021 compared to $445 million in 2020 (+18%). This increase was primarily driven by incremental beverage can volumes.
  
  
• Capital expenditures increased to $219 million and $480 million, respectively, for the three and twelve months ended December 31, 2021 compared to $166 million and $371 million for the same periods in 2020. The higher levels of capital expenditures in the twelve months ended December 31, 2021 were mainly due to our planned spending for our U.S. greenfield projects in Olyphant, Pennsylvania and Muncie, Indiana, a new can body line in Russia, an extension of our lines in Brazil and in the Netherlands and a new can ends line in United Arab Emirates, compared to capital expenditures during the same periods in 2020, which primarily related to our Czech Republic greenfield project and initial expenditures for the new facilities in the United States.
  
  
• Net cash provided by operating activities decreased by $199 million to a net outflow of $57 million for the three months ended December 31, 2021 from a net inflow of $142 million for the same period in 2020. The decrease in cash provided by operating activities was caused mainly by higher working capital requirements as a result of lower factoring of receivables, higher beverage can bodies volume sales and higher LME. Net cash provided by operating activities decreased by $171 million to a net inflow of $149 million for the year ended December 31, 2021 from a net inflow of $320 million in 2020. The decrease in cash provided by operating activities was caused mainly by higher working capital employed primarily as a result of lower factoring of receivables, higher beverage can bodies volume sales, higher LME and a one-off tax payment (as explained in Note 10 titled “Long-term receivables” in our Audited Combined Financial Statements as of December 31, 2021 published on our website in the Investors section).
  
  
• Free cash flow decreased by $255 million to a cash outflow of $260 million for the three months ended December 31, 2021 from a cash outflow of $5 million for the same period in 2020. This decrease was due to higher capital expenditures, higher working capital employed and lower adjusted EBITDA during the three months ended December 31, 2021 as compared to  the same period in 2020. Free cash flow decreased by $244 million to a cash outflow of $238 million for the year ended December 31, 2021 from a cash inflow of $6 million in 2020. This decrease was due to higher capital expenditures and higher working capital employed, partially offset by higher adjusted EBITDA during the year ended December 31, 2021 as compared to 2020.
  
  

Chief Executive Officer, Roberto Villaquirán, Commented:

“We are pleased to announce solid performance for the year ending December 31, 2021 with improvement in our different business units across the globe. During 2021, CANPACK entered the US market with the start-up of two of our four planned lines. These two are now fully operational and delivering commercial cans to our customers. In March 2022, we began production on the third line at our Olyphant plant as planned. Market dynamics continue to be fluid. Price recovery and managing supply chains will remain a challenge and will be the key focus for 2022. We are truly saddened by the events in Ukraine where CANPACK has two manufacturing facilities. Both of these facilities are closed for the moment as we focus on our employees’ safety and humanitarian efforts to ensure their families are safe.”

About CANPACK

CANPACK Group, part of Giorgi Global Holdings, Inc, is a global manufacturer of aluminum beverage cans and packaging solutions for the food and beverage industries, as well as glass bottles and metal closures. Headquartered in Krakow (Poland), CANPACK employs nearly 8,500 people worldwide and has operations in 17 countries. For more information, visit www.canpack.com.

Conference Call Details

The Company will host a conference call at 14:00 GMT/ 15:00 CET / 09:00 EST on Thursday, April 7, 2022 to discuss its financial results with the investment community. Investors and analysts wishing to attend this event can request registration via email at IR@canpack.com or click on the following link.

More detailed financial information can be found on the Company’s IR website at the Financial Results and Bondholder Downloads section (click here to gain access).

Forward-Looking Statements Disclaimer

Forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, the terms “anticipate,” “assume,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “forecasts,” “should,” “could,” “would,” “may,” “will” and other similar expressions or, in each case, their negative or other variations or comparable terminology.

All statements other than statements of historical facts included in this document, including, without limitation, statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditures, projected costs and our plans and objectives for future operations, may be deemed to be forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties.

We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this document. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statement that we make in this document speaks only as of the date on which it is made, and we do not intend to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may not be within our control.

Moreover, the Company operates in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results.

Non-GAAP Measures

The above press release contains certain financial measures and ratios, including adjusted EBITDA, free cash flow, net leverage, changes in working capital, beverage can bodies volume and capital expenditures, that are not required by, or presented in accordance with, U.S. GAAP (the “Non-GAAP Measures”).

We present these Non-GAAP Measures because they are measures that our management uses to assess operating performance and liquidity, and we believe that they and similar measures are widely used in our industry as supplemental measures of performance and liquidity. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under U.S. GAAP or other generally accepted accounting principles.

Non-GAAP Measures and ratios are not measurements of our performance or liquidity under U.S. GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with U.S. GAAP or as alternatives to cash flow from operating, investing or financing activities.

Contacts:

CANPACK IR team

Lorenzo Ruffatti
Group Treasury Director

Marta Kopcik
Group Communications Manager

Email: IR@canpack.com

CANPACK IR Advisor

Li Zhao – Maitland/AMO
Phone: +44 (0) 207 379 5151
Email: canpack@maitland.co.uk