CANPACK Reports Q2 2023 Results
Business Update | August 29, 2023
Krakow, Poland, August 29, 2023 – CANPACK (the “Company” or the “Group”), a global manufacturer of aluminum beverage cans and packaging solutions for the beverage and food industries, is hereby providing, on a U.S. GAAP basis, with U.S. dollars (defined as “$”) as the reporting currency, its results for the three and six months ended June 30, 2023 (Q2 2023) and its trading update for Q2 and H1 2023.
Q2 and H1 2023 Highlights
- During the three months ended June 30, 2023, beverage can bodies volumes increased by 1%, while during the six months ended June 30, 2023, beverage can bodies volumes decreased by 1% as compared to the corresponding periods in 2022. The positive volume development during the three months ended June 30, 2023 was mainly related to a 9% increase in volumes in Europe combined with positive volume growth in the U.S., partially offset by lower performance in Brazil and UAE. The 1% decrease in beverage can body volumes during the six months ended June 30, 2023 was mainly driven by continued weakness in Brazil and lack of exports to the U.S. from our UAE facility, partially offset by positive performance in the U.S. and Europe.
- Net sales decreased by 8% and 4% for the three and six months ended June 30, 2023 as compared to the corresponding periods in 2022. This performance was mainly driven by contractual pass through of lower aluminum costs in our Beverage Cans and Ends division and adverse exchange rate movements, partially offset by higher selling prices excluding aluminum component.
- Adjusted EBITDA decreased to $114 million for the three months ended June 30, 2023 as compared to $143 million for the same period in 2022, driven mainly by $14 million relating to cost increases not yet fully transferred into selling prices combined with negative country mix and $7 million relating to U.S. ramp-up costs for our Olyphant, Pennsylvania and Muncie, Indiana facilities. Adjusted EBITDA decreased to $222 million for the six months ended June 30, 2023 as compared to $274 million for the same period in 2022, driven mainly by $20 million relating to cost increases not yet fully transferred into selling prices combined with negative country mix, $17 million due to lower volumes excluding the U.S. and $7 million relating to U.S. ramp-up costs.
- Capital expenditures decreased to $75 million and $200 million for the three and six months ended June 30, 2023, respectively, compared to $147 million and $239 million in the corresponding periods in 2022. This lower level of capital expenditures for the three and six months ended June 30, 2023 as compared to the same periods during the prior year was mainly due to lower planned spending for our U.S. greenfield projects in Olyphant and Muncie.
- Free cash flow increased by $402 million from a $266 million cash outflow for the three months ended June 30, 2022 to a $136 million cash inflow for the three months ended June 30, 2023. Free cash flow increased by $324 million from a $222 million cash outflow for the six months ended June 30, 2022 to a $102 million cash inflow for the six months ended June 30, 2023. This performance was mainly driven by significant improvements in working capital (primarily due to lower inventories) and lower capital expenditures, partially offset by lower adjusted EBITDA during the three and six months ended June 30, 2023 as compared to the corresponding periods in 2022.
Chief Executive Officer, Marius Croitoru, Commented:
“We are encouraged by the performance during the first half of 2023 as EBITDA more than doubled relative to the second half of 2022. The 9% volume increase in Europe and subsequent high single digit volume increases in July and August 2023 are positive signs for the rest of 2023. CANPACK is financially stable, and we are continuing to focus on activities that enhance our long-term success as the market returns to growth, including working capital management and cost controls.”
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 over 9,000 people worldwide and has operations in 16 countries. For more information, visit www.canpack.com.
Conference Call Details
CANPACK Group will announce its Q2 2023 results on Tuesday, August 29, 2023. The Company will host a conference call at 14:00 BST / 15:00 CEST / 09:00 EDT to discuss its financial results with the investment community. Investors and analysts wishing to attend this event can request for 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
These forward-looking statements can be identified by the use of forward-looking terminology, including 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.
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.
CANPACK IR team
Group Treasury & Investor Relations Director
Group Communications Manager
CANPACK IR Advisor
Li Zhao – Maitland/AMO
Phone: +44 (0) 207 379 5151