CANPACK Reports Second Quarter 2021 Results
September 30, 2021
Krakow, Poland, September 30th, 2021 — 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 six months ended June 30, 2021 (“Q2 2021”) and its trading update for Q2 and H1 2021.
- During the three and six months ended June 30, 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) all beverage can capacities being sold out due to increased demand in Europe and South America, (ii) increased production volumes from our new Czech Republic facility, which began production in June 2020, (iii) increased demand from the U.S. customer base, for which we have shipped cans mainly from our facilities in Asia, and (iv) a weaker Q2 2020 due to COVID impact as compared to Q2 2021.
- Net sales increased 66% and 42%, respectively, for the three and six months ended June 30, 2021. This strong performance was driven by volume increases, of 36% and 29% in Beverage Can and Ends division and 48% and 30% in the Glass Packaging division for the three and six months ended June 30, 2021. Additionally, beverage can net sales have increased for the three and six months ended June 30, 2021 due to higher LME levels during the three and six months ended June 30, 2021 compared to the same periods in 2020.
Cost of sales increased 60% and 42%, respectively, for the three and six months ended June 30, 2021. These increases were primarily due to an increase in beverage can volumes, higher aluminum prices given higher LME levels and higher labor costs during the three and six months ended June 30, 2021 compared to the same periods in 2020.
- Adjusted EBITDA increased to $158 million for the three months ended June 30, 2021 compared to $87 million for the same period in 2020 (+80%). Adjusted EBITDA increased to $284 million for the six months ended June 30, 2021 compared to $201 million for the same period in 2020 (+42%). These increases were primarily driven by incremental beverage can volumes, and tight cost controls.
- Capital expenditures increased to $100 million for the three months ended June 30, 2021 compared to $64 million for the same period in 2020. This higher level of capital expenditures was mainly due to higher spending for our U.S. greenfield project in Olyphant, Pennsylvania, a new beverage can line in Russia, an extension of our lines in Brazil, and a new end can line in the United Arab Emirates as compared to capital expenditures during the same period in 2020, which primarily were related to our Czech Republic greenfield project. Capital expenditures decreased to $144 million for the six months ended June 30, 2021 compared to $148 million for the same period in 2020. The capital expenditures for the six months ended June 30, 2021 were mainly related to our U.S. greenfield project in Olyphant, Pennsylvania, a new beverage can line in Russia, an extension of our lines in Brazil, and a new end can line in United Arab Emirates, compared to the capital expenditures during the six months ended June 30, 2020, related mostly to our Czech Republic greenfield project.
- Net cash provided by operating activities decreased by $64 million to a net inflow of $67 million for the three months ended June 30, 2021, from a net inflow of $130 million for the same period in 2020. Net cash provided by operating activities decreased by $16 million to a net inflow of $133 million for the six months ended June 30, 2021 from a net inflow of $149 million for the same period in 2020. These decreases in cash provided by operating activities were caused by higher working capital employed mainly as a result of higher beverage can bodies volumes sales, higher LME and a one-off tax payment recorded as long term receivable (see details in Note 7 of the Unaudited Combined Financial Statements for the six months ended June 30, 2021 published today) during the three and six months ended June 30, 2021 compared to the corresponding period in the prior year, partially offset by higher adjusted EBITDA for the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020.
- Free cash flow decreased by $70 million to a cash inflow of $13 million for the three months ended June 30, 2021 from a cash inflow of $82 million for the same period in 2020. This performance was due to higher working capital employed and higher capital expenditures, partially offset by higher Adjusted EBITDA during the three months ended June 30, 2021 as compared to the corresponding period in 2020. Free cash flow increased by $20 million to a cash inflow
of $48 million for the six months ended June 30, 2021 from a cash inflow of $28 million for the same period in 2020. This performance was due to higher Adjusted EBITDA, partially offset by higher working capital employed during the six months ended June 30, 2021 compared to the corresponding period in 2020.
Chief Executive Officer, Roberto Villaquirán, Commented:
“We are pleased to announce continued strong performance across all of our business units despite a challenging supply chain environment. Market dynamics for the aluminum can remain strong, driven by innovation, differentiation and sustainability credentials. Our new U.S. greenfield in Olyphant is on time and on schedule, with commercial cans now in production, demonstrating our proven expertise in delivering greenfield operations successfully.”
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 8,000 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 BST / 15:00 CET / 09:00 EDT on Thursday September 30th, 2021 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
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 Investor Relations Manager
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