CANPACK Reports Q3 2023 Results

Krakow, Poland, November 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 nine months ended September 30, 2023 (Q3 2023 and 9M 2023 respectively) and its trading update for Q3 and 9M 2023.

Q3 and 9M 2023 Highlights

During the three months ended September 30, 2023, beverage can body volumes increased by 8%, while during the nine months ended September 30, 2023, beverage can body volumes increased by 2% as compared to the corresponding periods in 2022. The positive volume development during the three months ended September 30, 2023 was mainly related to incremental U.S. volumes, which have driven 28% growth in the Americas combined with a 4% increase in volumes in Europe, partially offset by lower performance in Brazil and UAE. The 2% increase in beverage can body volumes during the nine months ended September 30, 2023 was mainly driven by positive performance in the Americas and Europe.

Net sales increased by 11% and 1% for the three and nine months ended September 30, 2023 as compared to the corresponding periods in 2022. Performance in both periods was mainly driven by higher selling prices (excluding aluminum LME) and higher volumes, partially offset by the contractual pass through of lower aluminum LME.

Adjusted EBITDA increased to $125 million for the three months ended September 30, 2023 as compared to $64 million for the same period in 2022, driven mainly by a $42 million net positive impact from higher selling prices and favorable mix partially offset by cost increases, a $13 million positive impact due to a reduction in the aluminum LME time lag, a $5 million increase from U.S. performance improvement and a $1 million favorable movement in EUR/USD. Adjusted EBITDA increased to $347 million for the nine months ended September 30, 2023 as compared to $338 million for the same period in 2022, driven mainly by a $4 million net positive impact from higher selling prices and favorable mix partially offset by cost increases, a $7 million positive impact due to a reduction in the aluminum LME time lag, partially offset by a $1 million decrease from higher U.S. ramp up costs and a $1 million unfavorable movement in EUR/USD.

Capital expenditures decreased to $56 million and $257 million for the three and nine months ended September 30, 2023, respectively, compared to $132 million and $370 million in the corresponding periods in 2022. This lower level of capital expenditures for the three and nine months ended September 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 $227 million from a $90 million cash outflow for the three months ended September 30, 2022 to a $137 million cash inflow for the three months ended September 30, 2023. Free cash flow increased by $552 million from a $312 million cash outflow for the nine months ended September 30, 2022 to a $240 million cash inflow for the nine months ended September 30, 2023. This performance was mainly driven by significant improvements in working capital (primarily due to lower inventory balances), lower capital expenditures and higher adjusted EBITDA during the three and nine months ended September 30, 2023 as compared to the corresponding periods in 2022.

Chief Executive Officer, Marius Croitoru, Commented:

“We are proud to report strong performance during the third quarter of 2023, posting an Adjusted EBITDA almost double in comparison with the same period in the prior year. Our continuous focus on Working Capital and EBITDA management resulted in positive Free Cash Flow generation amounting to $137 million in Q3 2023 and $240 million on a year-to-date September 2023 basis. The strong 8% Q3 2023 volume growth was driven by incremental volumes from our U.S. plants and a positive 4% performance in Europe, which is positioning CANPACK well for future growth.”

“We are also pleased to communicate that CANPACK and BA Glass announced earlier today via a joint press release to have entered a definitive agreement whereby CANPACK will transfer its CP Glass operations in Poland to BA Glass.  This transaction will allow CANPACK Group to focus on its core businesses.  The transaction is expected to close in the first half of 2024.”

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 approximately 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 Q3 2023 results on Wednesday, November 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.

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 & Investor Relations 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