Ardagh Group (NYSE: ARD), a global leader in packaging solutions, reported a slight decrease in revenue for the fourth quarter of 2023, with overall group revenues declining by 2% to $2.2 billion compared to the same period in 2022. The dip was attributed to a decrease in glass shipments, which also led to a 26% drop in group adjusted EBITDA at $243 million. Ardagh Metal Packaging (NYSE:PKG) (AMP (OTC:AMLTF)), however, showed resilience with a 2% increase in revenue, driven by higher beverage can shipments in the Americas. Despite the mixed results, Ardagh Group projects a positive outlook for 2024, anticipating a gradual recovery in glass shipments and adjusted EBITDA growth for AMP of 5% to 10%.
Key Takeaways
- Group revenues for Q4 2023 stood at $2.2 billion, marking a 2% year-over-year decrease.
- Glass Packaging segment faced a 6% revenue drop and 20% lower shipments compared to the previous year.
- AMP experienced a 2% revenue increase with $1.1 billion for the quarter, although adjusted EBITDA fell by 9%.
- Ardagh Group forecasts a rebound in glass shipments and easing inflation pressures in 2024.
- The company anticipates 2024 adjusted EBITDA growth of 5% to 10% for AMP and projects glass packaging adjusted EBITDA to be between $750 million and $780 million.
- Ardagh Group expects to conclude 2024 with a leverage ratio of around 6.2x adjusted EBITDA.
Company Outlook
- Ardagh Group expects glass shipments to recover gradually in 2024 as market conditions improve.
- AMP guided to a 5% to 10% EBITDA growth in 2024 compared to $600 million in 2023.
- Glass packaging adjusted EBITDA is projected to be $750 million to $780 million for 2024, with the majority occurring in the second half of the year.
Bearish Highlights
- The company reported lower glass shipments, resulting in a revenue decline in the Glass Packaging segment.
- Adjusted EBITDA for the group and both its segments—AMP and Glass Packaging—experienced significant decreases.
- The company acknowledged disruptions in the North American beer market and expects to continue taking production downtime in 2024.
Bullish Highlights
- Ardagh Group signed a power purchase agreement for a wind project, expecting meaningful energy benefits and double-digit price reductions for customers in 2024.
- Volume growth is anticipated in both Europe and Africa, with North America expected to recover quicker than Europe.
- The company remains focused on cost reduction actions and operational efficiency.
Misses
- The group missed its previous year's performance in terms of revenue and adjusted EBITDA.
- The Glass Packaging segment underperformed due to a significant drop in shipments.
Q&A Highlights
- Executives discussed the impact of a wind project agreement on energy needs and customer prices.
- The company is reviewing its capital structure to avoid maturities going current and did not provide details on additional bank financings.
- Ardagh Group expressed confidence in the outcome of the wine ruling, which is not factored into the year's guidance.
Ardagh Group's fourth-quarter earnings call revealed a mixture of challenges and strategic optimism. While the company faced a decline in glass shipments and a disruption in the North American beer market, it is taking steps to ensure a more cost-effective production downtime in 2024. The company's focus on cost reduction and operational efficiency, along with anticipated energy cost benefits from a new wind project, paint a hopeful picture for the coming year. With customer negotiations progressing satisfactorily and no updates on the Trivium sales process, Ardagh Group remains focused on liquidity and cash, holding a strong position regarding minimum cash requirements. The company's executives did not provide specific details on the bond maturing in April 2024 but assured that their debt instruments are well-structured. As the company looks forward to the next call at the end of April, investors and analysts will be watching for signs of the projected recovery and growth in 2024.
InvestingPro Insights
Ardagh Group's financial resilience is a key focus for investors, especially in light of the recent earnings report. The company's market capitalization stands at a modest 7.63 million USD, reflecting a challenging market perception. The negative Price to Earnings (P/E) ratios, with -2.25 for the reported period and an adjusted -3.01 for the last twelve months as of Q4 2023, indicate that Ardagh has been facing earnings difficulties. However, the PEG ratio of 0.02 suggests potential for growth if the company can turn its earnings around, which aligns with the company's positive projections for 2024.
InvestingPro Tips highlight the importance of considering both the Price to Book (P/B) ratio and the gross profit margin when assessing a company's financial health. Ardagh's P/B ratio at the end of the last twelve months stood at 4.17, which may be of interest to investors looking for asset-based valuation measures. Furthermore, the company's gross profit margin was reported at 100%, although this figure should be approached with caution given that the reported revenue was 0.0 million USD.
Investors looking for more comprehensive analysis can find additional InvestingPro Tips to guide their decisions. Currently, there are 25+ additional tips available on InvestingPro, providing deeper insights into market trends and company performance metrics. For those interested in subscribing to InvestingPro for more detailed financial analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
In the context of Ardagh's outlook, the 1 Month Price Total Return of 12.5% suggests a recent uptick in investor confidence, potentially in anticipation of the company's strategic initiatives taking effect. Conversely, the 1 Year Price Total Return of -40.0% reflects the challenges faced over the longer term, underscoring the importance of the company's recovery efforts in 2024. The next earnings date, scheduled for March 13, 2024, will be a pivotal moment for investors to assess the progress of Ardagh Group's strategic plans and its impact on financial performance.
Full transcript - Ardagh Group SA (NYSE:ARD) Q4 2023:
Operator: Welcome to the Ardagh Group S.A. Fourth Quarter 2023 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Hermanus Troskie, Chair of Ardagh Group. Please go ahead.
Hermanus Troskie: Thank you very much. Welcome, everybody, and thank you for joining us for Ardagh's fourth quarter and full-year 2023 bondholder call. Earlier today, we released our results for the quarter, and I'm joined on this call by John Sheehan, CFO; and by Mike Dick, our CEO of Glass Packaging. Prior to taking your questions, we will make some opening remarks on the quarter and our outlook for 2024. These remarks will include certain forward-looking statements. These reflect circumstances at the time they made and the Company expressly disclaims any obligation to update or revise any forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors. Our full-year 2023 bundle report can be found on our website at ardaghgroup.com. Ardagh Metal Packaging or AMP, released its fourth-quarter results earlier today, and a replay of its earnings call can be found at ardaghmetalpackaging.com. We will not be providing any additional information regarding AMP on this call. So, moving to review some Ardagh Group highlights for the quarter. Group revenues of $2.2 billion represented a reduction of 2% compared with the fourth quarter of 2022 on a constant currency basis. Revenues reflected higher shipments in metal packaging and the pass-through of increased costs in glass packaging, more than offset by the impact of lower glass shipments compared with the same period last year. Group adjusted EBITDA of $243 million in the quarter was 26% below the same period last year, with reductions of 43% in glass packaging and 9% in metal packaging, both at constant currency. Reviewing quarterly segmental performance with a focus on constant currency results, starting now by recapping on AMP. Revenue of $1.1 billion increased by 2% compared with the fourth quarter of 2022. Growth reflected 2% higher beverage can shipments with strong growth of 14% in the Americas more than offsetting 10% lower shipments in Europe, where demand remained soft and impacted by customer destocking in excess of retail trends. Full-year 2023 global beverage can shipments increased by 5%, again driven by growth in the Americas of 11%, which offset a 2% reduction in Europe. Adjusted EBITDA of $148 million was 9% below the same period last year. Full-year 2023 adjusted EBITDA was $600 million. AMP continued to drive network efficiency, recently rationalizing the legacy steel lines in Germany and closing the White House Ohio plant. Cash generation remains strong with a significant reduction in working capital in 2023. Leverage at year-end was 5.5x last 12 months adjusted EBITDA, with cash and liquidity of over $800 million. If I now turn to Glass Packaging, where fourth-quarter conditions remain challenging, but overall, in line with our October 2023 expectations. Global Glass packaging revenue fell by 6% to $1.08 billion in the quarter compared with the same period last year as the pass-through of higher input costs was more than offset by lower shipments. Total glass shipments for the quarter were 20% below year-ago levels. Europe and Africa was down 24%, measured against a very strong comparable with North America lower by 13%. During the quarter, we saw continued destocking by our customers as they responded to weaker consumer demand. It also reflected their focus on unwinding inventories as supply chain pressures eased. This was felt particularly in Europe as 2022 fears over energy security subsided. In our North America business, destocking was exacerbated by disruption to a major beer brand from April 2023 onwards. In response to weaker customer demand, we reduced fourth-quarter global production by almost 50%, ensuring that we entered 2024 with appropriate inventories. Weaker demand and curtail production significantly impacted Glass Packaging adjusted EBITDA, which fell 43% to $95 million in the quarter compared to the same period last year. Looking at the performance of our two glass packaging segments for the quarter, Europe and Africa revenue of $718 million was 2% below the same period last year, with the recovery of higher input costs largely offset by a 24% reduction in shipments. Shipment declines in the quarter were as expected, greater than in prior quarters. This reflected the very strong finish seen in 2022 in Europe, which had increased by mid-single digits ahead of 2023 price increase. This had followed fourth quarter 2021 shipment growth of 10% over 2020 as Europe emerged from the pandemic and as energy concerns grew from mid-2021. We continue to view 2023 shipment weakness in Europe, which finished 10% below the lowest level seen in the past 15 years as temporary with declines far exceeding changes in consumption. Expect to see destocking complete in the first half of 2024. Our Africa business performed well in the quarter, following softness in the third quarter, and finished the year ahead of our expectation, but below levels expected at the beginning of the year. We remain positive on medium- to long-term prospects for glass consumption in Africa, and our significant investment in new capacity over the past two years positions us to service this growth opportunity. Over demand and curtailed production resulted in fourth quarter adjusted EBITDA for the Europe and Africa segment of $75 million, a 48% reduction on the same period last year. Excluding $27 million out-of-market energy costs, adjusted EBITDA of $102 million was 30% below year-ago levels. Despite the significant shipment declines, full-year 2023 adjusted EBITDA in Europe and Africa of $543 million increased by 5% compared with the 2022 result pro forma for a full-year contribution from Consol. In summary, we believe the fundamental outlook for glass packaging in Europe and Africa has not changed. 2023 saw a combination of consumers pressured by inflation at 40-year highs as well as equally unprecedented post-pandemic destocking by the CPG industry. We expect to see a gradual recovery in consumption patterns begin in 2024, with lower packaging input costs affording the opportunity for customers to shift to a more balanced mix of volume and price growth. We therefore continue to expect that European and African glass packaging demand will grow annually by low single-digits and mid-single-digit percentages, respectively, over the medium term. If I turn to Glass North America's fourth quarter performance, revenue of $364 million was 13% lower than the same quarter last year, attributable to a 13% decline in shipments. Full-year 2023 shipments declined by a similar amount. The North American glass market was also impacted by general destocking in 2023 across most of our end markets. Although this was to a lesser extent than in Europe, it was exacerbated by the ongoing disruption to a major U.S. beer brand that we serve, as previously outlined. In response, we closed two production facilities during the third quarter with unaffected business transferred to other parts of our network. We also took continued downtime in the fourth quarter. As in Europe, we expect to see destocking by our customers in North America complete in the first half of 2024. Adjusted EBITDA in North America Glass declined slightly to $20 million for the quarter and was similarly impacted by production curtailments. Full-year adjusted EBITDA in North America was broadly in line with the prior year despite significantly lower shipments. The demand challenges seen in 2023 masked some commercial and operational progress made over the period. Our focus remains on optimizing operating performance, improving commercial execution, and driving returns from targeted investments across our smaller asset base to generate a gradual recovery in earnings and improved cash flow. We welcome the recent determination by the U.S. International Trade Commission to proceed with its investigations of imports of glass to serve the wine sector from certain countries on the basis that there is a reasonable indication of harm to the U.S. glass packaging industry. This is a market in which we have invested heavily in the past two years. Despite the demand challenges in 2023, we continue to progress important milestones along our CO2 emissions. Customer feedback and interest in this investment has been extremely positive. In late 2023, we entered a 10-year agreement in respect of a large wind energy project in Europe, covering 40% of our European glass electricity needs, raising our renewable electricity share to over 80% once this comes on stream. Large-scale solar projects were completed in two facilities in the Netherlands with similar projects planned in North America and South Africa. In recycled materials, our colored usage was maintained at high levels, and we continue to seek opportunities to grow long-term colored supply. Through our investments and actions over many years, we are and remain committed to being a sustainability leader in our industry. Moving to liquidity and capital structure. Our consolidated cash and available liquidity was $1.5 billion at December 31, 2023, and included $0.7 billion in cash. Total cash and available liquidity at the ARGID Restricted Group was $0.7 billion. Net leverage at the ARGID Restricted group was 6.6x LTM adjusted EBITDA at December 2023, pro forma for $27 million of out-of-market energy costs. This was in line with the mid-6s that we guided in October. LTM adjusted EBITDA at the ARGID Restricted Group was $932 million at December 2023, a forma for those energy costs. This represents a 4% increase compared with adjusted EBITDA of $893 million in 2022, which was pro forma for a full-year contribution from the Consol acquisition. This was achieved despite the reduction in global glass shipments of 18% in 2023. We manage the unprecedented demand volatility in the past year, our focus has moved to our capital structure since late 2023. This review is ongoing, and we will update in due course. We ended the year with good liquidity and have the benefit of an attractive maturity profile with low and 95% fixed interest rates. Given the environment, leverage ended 2023 above our initial targets. Looking to 2024 and having completed our growth investments, we are focused on deleveraging our business. Turning now to 2024. Macroeconomic uncertainty remains a feature of most of our markets, but we expect to see a gradual recovery in glass shipments as destocking is completed and as consumers see some benefit from the easing of inflation pressures. From [Technical Difficulty] we will have a significant beer market disruption, which affected our business in North America in 2023. The continued downward drift in energy prices in Europe will support the competitiveness of the glass substrate, both our customers and end consumers while our own cost position has also reset relatively favorably. We expect to continue to take production downtime in 2024, weighted to the first half, but on a more cost-effective basis than in 2023, and we continue to relentlessly focus on our cost reduction actions. Earlier today, AMP guided to 2024 adjusted EBITDA growth of 5% to 10% compared with the $600 million earned in 2023. We project 2024 glass packaging adjusted EBITDA of $750 million to $780 million weighted to the second half of the year. First-quarter earnings will be lower year-on-year given the very strong 2023 comparable when we benefited from running full production to rebuild inventories and from the lagged recovery of 2022 input costs. Assuming unchanged AMP dividends, ARGID Restricted Group 2024 adjusted EBITDA is projected to be $955 million to $985 million. Following completion of our investment program, capital expenditure will be significantly lower than in 2023, and we expect to end 2024 with leverage of around 6.2x adjusted EBITDA. In line with the lower first quarter 2024 earnings, net leverage at the end of the first quarter will increase before declining in the second half of the year. Having made these opening remarks, we'll now be pleased to take questions that you may have.
Operator: Thank you. [Operator Instructions] We'll pause for just a moment to allow everyone an opportunity to signal for questions. And we'll go first to Roger Spitz with Bank of America (NYSE:BAC).
Roger Spitz: So, you gave the -- for 2024 guidance, you gave $765 million for EBITDA midpoint $204 million, I guess, for the dividends. Can you go through the other items like glass maintenance and growth CapEx, cash interest, lease repayments, taxes, working capital, restructuring, et cetera, please?
John Sheehan: Sure. Roger, it's John Sheehan here. Yes, the guidance we gave was $750 million to $780 million of glass operations EBITDA. Yes, the dividend is in around that $205 million between the ordinary and the press. Working capital, we'd expect to be pretty flat this year. We did have some build last year. So, we expect it to be flat. CapEx -- total CapEx should be in and around $340 million. That's largely maintenance. There's a tail of about maybe $20 million or so of growth CapEx, just finishing out the project that we had in Africa. So that's overall a reduction of about $200 million versus last year's combined maintenance and growth, which is about $540 million. Total restructuring spend related would be about the order of about $50 million cash interest, about $340 million tax, cash taxes, something in the $50 million to $60 million range, then we have the regular dividend to the whole [indiscernible], which is about $100 million and the lease repayments in or around $100 or so as well. So, it would leave the net debt broadly flat and the deleverage coming about to the EBITDA growth over the course of the year.
Roger Spitz: Perfect, John. Would you be able -- you've given the Consol's EBITDA in prior years, I know it's now part of the segment, but would you sort of can guide it, can you give 2023 consult EBITDA? And how much the new third furnace might be an EBITDA tailwind in 2024?
John Sheehan: A little over $200 million last year. As you say, it's part of the European Afric segment, so we don't break it out. It will have an FX headwind this year. So, I think there will be limited progress. It had a good year last year with the full contribution from the Nigel 2 furnace looking a little further forward that N3 furnace in a full-year should add about $20 million.
Roger Spitz: Great. And then the off-balance sheet receivables, they increased by about $150 million from $281 million from $131 million in December 2022, assuming I did my subtractions correctly, -- is there more room to grow this facility? And when you gave the guidance of working capital being flat, of course, that was on balance sheet working capital. Do you expect to see an increase in the off-balance sheet receivables?
John Sheehan: I think in particular, Roger, yes, your numbers are right. It was up from -- to 281 in the glass business. Most of this is really customer-driven. And the increase really reflects higher selling prices. So, the value of your receivables for -- in light of the price increases over the past couple of years pushes it higher. There have a bit of seasonality there as well. Although as we've said on the call, the Q4 seasonally was weak as we had indicated. But no particular change in visiting, I say, most of it is customer-driven and rather than something that we actively do. But it's a reasonably attractive source of finance. Margins on it are pretty good, too.
Operator: We'll go next to Sam McGovern with UBS.
Sam McGovern: In your prepared remarks, and I think also, Paul, on the last quarter mentioned this, some commentary around consumer packaging companies focus more on a balance between price and volume. Are you starting to see that conversation shift with the consumer product companies? Are they willing to not push as much as price and try to grow volume a little bit more?
Mike Dick: It's Mike Dick here. Yes, yes, we are beginning to see that moving forward. So, I think it's certainly been the case last year that the focus really was around price, but we're now seeing changes with regard to the outlook from our customers and they're looking a little bit more around volume going forward.
Sam McGovern: And then in terms of consumers' reaction to inflation, obviously, inflation slowed, but it's still there. Are you starting to see though that the sticker shock of prices is waning and that even though prices are still higher, consumers are willing to pay more for the various products?
Mike Dick: I think what we're seeing is -- I mean it's very early. I mean we're in just six weeks into the year. But I think we've already seen small signs of some movements different -- in the different profiles in the sector. And it would appear that we are beginning to see some of that movement. But it's -- again, it's very early at this stage. But I think based on what we're seeing with our dialogues with our customers, customer forecast that's coming through.
Sam McGovern: Got it. And then last question for me before I pass along. You added to the annual report language regarding potentially seeking to refinance or maybe repurchase or extend maturity of the outstanding debt through different things. Do you have any sense in terms of time frame when you might start to address the capital structure or when you might start having conversations with lenders?
John Sheehan: Look, I think the language on -- its John Chen here. We always update risk factors and surrounding line depending whether it's political conflicts or you name instead. But look, our focus last year was around the environment, which was fairly unique for a number of different reasons. And we manage that, as you said, the pro forma EBITDA, the EBITDA reported for the full year of the glass businesses was higher than the pro forma of 2022, even including the full Consol. Look, having done that through most of last year, since the end of '23, we've been focused on reviewing the capital structure. We're very conscious of our maturities when they arise. We do have the benefit of a fairly well-termed-out structure at low-interest rates and fixed interest rates. We also have to evaluate things like prepayment redemption penalties, those kind of things. So. the review is ongoing, but we are very conscious, and we would aim that our maturities wouldn't go current. That would be our aim as well.
Operator: We'll go next to Sandy Burns with Stifel.
Sanford Burns: Maybe to follow up on Sam's question about customer plans for the year, whether it's AB or some of your other larger customers, are they talking to you about significant promotions, marketing initiatives that they're working on that they believe they'll need materially more volume from you than they did last year?
Mike Dick: Sandy, it's Mike here. Yes. No, we're not having specific discussions around what they're doing on promotions. But as you know, the discussions we're having are more around the fact that they're focusing less on price and more around volumes, but they're not talking about any specifics at this stage.
Sanford Burns: And then you mentioned you still plan to take some downtime in the first half but on a more cost-effective basis. Could you elaborate on that? Is that just at fewer plants? Or are there other actions you take to reduce the cost of that downtime?
Mike Dick: Really, what we've done through really Q4 has taken out a lot of the downtime at that point. And really, what we're doing now is that as we go through the year, we'll phase back some of that production. So, we've taken the actions in really in the tail end of the second half of 2023.
John Sheehan: In the early days, Sandy, a lot of our downtime would have been by necessity idling lines where you're not making any energy savings. But then as we move our furnace rebuild program around, we get the benefit of turning some furnaces off and the saving energy cost there as well. So that's kind of what we're getting at.
Sanford Burns: Okay. And maybe last one for me, kind of on that front. You mentioned the two plant closures, anything else kind of on your radar screen at this point? Or you feel pretty good about the footprint at this point?
Mike Dick: Nothing on the radar at this moment. We're happy with the footprint.
Operator: Moving on next to Richard Phelan with Deutsche Bank (ETR:DBKGn).
Richard Phelan: Yes. So, you mentioned the new energy contract, 10-year agreement that you signed for -- I think you said 40%. I wasn't sure if that was 40% of the European footprint or the consolidated glass footprint energy needs. Could you summarize where you stood in terms of total energy cost for 2023? And if I look at the guidance, the $50 million to $80 million improvement versus 2023, how much of that is coming from energy improvements, and how much from volume?
Mike Dick: That's a PPA that we've entered into in respect to a pretty significant wind project, and that will be for our electricity. We will -- I think part of our volume impact last year was attributable to, we may have been at a disadvantage to some others in terms of energy. So, we will see meaningful energy benefits and reductions coming into 2024, and they will be passed on to customers. So yes, it's a very important cost. We would be probably expecting double-digit price reductions for customers as we get into the new year.
Richard Phelan: I guess similar to AMP, which provided a bridge in terms of the '24 versus '23 guidance. Is there additional detail you can share in terms of the $50 million to $80 million improvement? What's coming from volume? Maybe if average pricing is a negative factor in 2004 and what's coming from energy?
Mike Dick: Yes. I think the -- on the safe energy, they get as well. So we won't be losing out there. And then we would expect to recoup some of the underperformance on volume that we incurred last year.
Hermanus Troskie: Yes. So just to add to that, so we would -- from what we're seeing with regard to the energy movements for us, it would be a double-digit movement reduction for our customer base. As John has already previously said, and we see a double-digit growth in real terms in Europe as a result.
Richard Phelan: Okay. I guess implicit in the guidance, what's the volume expectation for the full-year in terms of total volumes?
Mike Dick: In North America, we're pretty -- we would be not in get any major volume growth.
Hermanus Troskie: We'll be flat in North America, some growth in both Europe and Africa.
Operator: We'll go next to Peter Dalena with BNP Paribas (OTC:BNPQY).
Peter Dalena: Can we please get an update on the North American [indiscernible] volumes, your large customer that suffered brand image? Are you seeing any stabilization or recovery in the last couple of months?
Hermanus Troskie: Well, Peter, yes. So, I think in reality, what we're seeing is stabilization. So, we're certainly not seeing any rebound as such, but I think we're seeing a more stable environment moving forward. So, I think from that standpoint, that's what we're seeing and being forecasted at this time.
Peter Dalena: Okay. And then my follow-up question is on Trivium. Any update on the sales process there?
Hermanus Troskie: No comments or no update on that. Trivium half results, I think, in the first half of March.
Peter Dalena: Okay. And then sorry, I'm going to squeeze in one more. I just want to ask a question about the dividend from Ardagh Metal Packaging. I mean I recognize we're here to talk about Ardagh Glass, but the dividend for Metal Pack is pretty helpful for Ardagh Glass cash flows. And based on the numbers we heard on the Metal Pack call, sounded like cash flows will not cover the dividend and CapEx and lease payments in 2024. There seems to be plenty of cash at Metal Pack for the short term, but how do you think about the ability for Metalpack to service that dividend over the long term and through economic cycles?
John Sheehan: Look, as Herman said in the opening remarks, we're not adding any color on the AMP. In the guidance that we gave, we gave an illustrative holding dividends at prior-year levels. And obviously, the investment program there is coming to an end. So, the CapEx out they do step down materially further. Unknown Analyst I have a couple of questions. First, where do you see just for glass packaging, the Ardagh Group -- Restricted Group, excluding metal packaging, where do you see the -- in terms of the minimum cash that you need to operate the business? That's my first question. And then I just wanted to understand if the demand rebound, how soon can you restart like the facility that you currently put kind of stopped? Is it kind of easy to restart differences that you kind of -- if you stop production or it's kind of this process that takes longer time? And my final question is regarding, do you have any indication on the -- the cash interest on the [indiscernible]? Do you continue -- do you intend to continue to pay that in cash?
John Sheehan: In -- I'll take the first and the third question. The first one was on the minimum cash. Look, our focus is on liquidity and cash, they're interchangeable, for all intents and purposes. So, the consolidated level that was $1.5 billion, and that's a respective group, it was at $0.7 billion at the end of the year. So, we have a strong position there. And as I said, we have attractive, well termed out, and fixed rate, low-interest coupons. On the Holdco dividend on the toggle notes, they are paid, if we can. And if we were to change there, we would have to know device for the next coupon payment is in June. And we would have had to advise in -- before the end of last year in that respect. So that's the structure. I think it's laid out in the in the bondholder report, and you're probably familiar with the terms, but it's provided us that cash and there's RP available, then it's payable in cash.
Mike Dick: Just on the question on the curtailments and the cost or the time frame to bring them back up. I mean, in reality, the curtailments take various forms. It can be adding lines, flexing rebuild programs, et cetera. What we've done is we've planned out the volumes and the -- what we're going to do with the pullback on volumes as we go through the year and with the rebuilds coming through. So really, it is short in real terms, but it's dependent on what you're doing where you have idling lines or rebuilding a furnace. But we have that in our planning for the volume growth as it comes back in '24.
Operator: Next to Mark Watts with Citi.
Mark Watts: Just a couple of quick ones, one housekeeping. Just RP capacity. Could you just update on how much RP capacity you have? And then the second one, just on the beer customer. In terms of just contract negotiations, I know it was flagged at kind of the end of last year, how those negotiations are going? Just be good to get some update there.
John Sheehan: Mark, on the RP is just a little over $1.2 billion at the [indiscernible].
Mike Dick: And Mark, just on the other question, the -- with regard to -- we don't really talk about customer discussions, et cetera, but I would say that we are progressing the discussions satisfactorily.
Operator: We'll go next to Paul Simenauer of BNP Paribas.
Paul Simenauer: Just a couple for me. First, on the wine ruling, how confident are you of the outcome there? And can you quantify the benefit? Is it embedded in your guidance for the year at all?
John Sheehan: So, Paul, yes, so look, I think we're very much pleased with the progression so far. We haven't built anything into our guidance for this year. And I suppose what we see with the next fees with the Department of Commerce, which was coming out probably in Q2, we'll have a little bit more confidence in how that goes. But the initial feeling is relatively positive. But again, we'll wait to see how things progress.
Paul Simenauer: Great. And then my other question, do you have any remaining unprofitable plans? And is there further room to reduce fixed costs if needed such as closing these plants? It may have been answered earlier, but I just want to get a better sense.
Mike Dick: So, our focus really is around operational efficiency, and that's what we're focusing on this year. So really, we're looking at -- we took actions last year regarding two plants, and our focus now is to optimize and improve the remaining plants in the network.
Operator: We'll go next to Jens Olson with Bracebridge Capital.
Jens Olson: In the annual report, it was disclosed that certain directors disposed of the Ardagh toggle notes. Could you provide any color on those sales and on any remaining holdings?
John Sheehan: Yes, sure. I think that was filed in the second quarter, and it was the former Chairman, he disposed of about 25% of this holding and was notified. So there's been nothing since and retained the other 75%. That was just one for personal reasons.
Operator: We'll go next to Roger Spitz with Bank of America.
Roger Spitz: And maybe you've given this information, but I missed it. You gave the quarterly volume growth overall and by the two segments. Can you give the 2023 versus 2022 volume growth overall and by the two segments, please?
Mike Dick: In terms of Europe was down for the full year. It was down about 24%. And then North America, we said it was down 13% in both the quarter and the full year and volume growth.
Roger Spitz: So, they're both North America and Europe are both down 24% and 13%, respectively, for both the quarter and the year as it just happened to stand some right?
Mike Dick: Sorry for the full year, yes. Europe was down. We said about close to 30% in Q4 and North America was down about 13% in Q4.
Roger Spitz: Okay. I missed that. Got it. Very good. And I was just -- when you said Consol's EBITDA has been $200, you added the third furnace and that you expect that over time to be sort of a $20 million tailwind. I'm just three furnaces versus two furnaces. Is there something I'm missing in terms of why the third furnace wouldn't be a bigger tailwind going from two to three furnaces for Consol.
Mike Dick: Consol l has got 14 furnaces or so across the network. That's just one plant. So, there's four plants in South Africa, and we've added two furnaces over the past couple of years. The second one is coming on stream, but it's not a 33% or a 50% increase in capacity.
Roger Spitz: Got it. And then should we -- for 2025 total CapEx, should we think still along the lines around 20 -- or will there be other growth CapEx for 2025?
John Sheehan: We're not getting it to '25 this stage, but I think the asset base is pretty well invested. So out of 25, we wouldn't be seeing any major change. We've added some important CapEx investments. And given the volume trends over the past year, there's room to grow back into that over the next one to two years. So we'd be able to hold that close up to the 24 level in '25.
Roger Spitz: Got it. And last one, I don't know if you want to give this or not one of your competitors gave it for their aluminum can. What was the final impact for the final nine months from the North American beer disruption and an EBITDA standpoint. Is that something you'd be going to provide?
John Sheehan: [Technical Difficulty]
Operator: We'll go next to Ed Brucker with Barclays (LON:BARC).
Ed Brucker: Let me sneak one in here, [indiscernible] in the end. So, I think we've been looking back when you originally guided to $850 million. I guess my question is, what's the path back to that $850 million number? Is it further volume growth over time? And is that sort of a number that we should be thinking about kind of as kind of like a through-cycle EBITDA number?
John Sheehan: I think the -- as we said at the beginning, globally, our volumes declined last year by about 18% in the full year. And the EBITDA we've held, it's up slightly year-on-year versus the pro forma. This year, we're -- given the guidance of $750 million, $780 million, the $850 million, yes, it's very much in the tenable level over a couple of years, but I'm not getting specific on looking beyond 24 at this point in time. But we said the European shipments finished the year more the 10% below the lowest level we've seen in 15 years. So, there's a lot of room there to grow. And we and others take the view that there's nothing structural really has changed in the market there.
Ed Brucker: Maybe I'm getting a little greedy here, but any commentary around the first two months of the year, how volume's going to know Ardagh Metal gave commentary that it seemed like it was going relatively well. So, just if you're able to provide that.
Mike Dick: Yes. So I'd say that the first six weeks have started to plan in line with expectations. But I think we are starting off in a good way. I think clearly, it is -- the volumes really start to pick up in the second half of the year. So therefore, it's just a bit early to tell. But I think initially, we are operating in line with our expectations.
Operator: We'll go next to Andreas Christoffersen with Nordea.
Andreas Christoffersen: I just have a follow-up on your answer on your debt stack there. You have a bond going current here in April '24. Could you provide any -- just any intel on what you're considering during there? You gave a guidance of 6.2 levels for the year-end. Is that -- do you see that as a file leverage for you?
John Sheehan: Look, Andreas, as we said, we have nothing to add. We've been reviewing our structure over the last couple of months. That continuing market conditions have improved. We ended the year with very solid liquidity and cash, we have an attractive maturity profile with fixed attractive coupons. And we also just -- we have to be mindful of prepayment premium. So -- but we're very conscious of our maturities and our aim would be that maturities wouldn't go current. Nothing more to add at this stage.
Andreas Christoffersen: Okay. That's noted. And also on the trimmer stake, you said that was not something you're going to discuss. But do you see any other inorganic levers that you could potentially pull if need be? I mean, in order to decrease the overall debt stack? And do you have any room to add further bank financings within your -- yes, within your current setup?
John Sheehan: I think market conditions have improved somewhat over the last couple of months, but there's nothing really to add at this stage. We continue to review -- it's been a very busy year with the operating environment. So, it's only over the last couple of months that we've turned to the capital structure, but we are very conscious of maturities and continue that evaluation.
Operator: We'll go next to Chris Ryan with Radcliffe.
Chris Ryan: I was going to ask on the [indiscernible]. But also on the H2 recovery in volumes, that goes a competitive year saying a similar thing. Just what's the confidence on that H2 recovery? And yes, just what gives you confidence?
Hermanus Troskie: I think if you -- John, sorry, Chris, I think as John just said, look, we're looking at levels in 2023 that were 10% below the lowest levels we've seen in the last 15 years. We've certainly seen through our interactions with the customers, a significant level of destocking. And we also had impact on the pull forward from the volumes into 2022, the talent at the start -- at the end of '22. And we've also seen some movements regarding -- we have imports have been a factor in the mix, which are not there from that standpoint. So, we see a lot of movements going in that direction. And with our customer discussions, they're also going through the destocking and see a more optimistic viewpoint on the second half. So again, there's some factors around what happened at the tail end of '22, what we've seen with imports and the removal of those imports and then just a general movement with regard to the market moving up and also with regard to the customer more optimistic around the second half.
Chris Ryan: Got it. And do you expect the -- I mean, the commentary on the destocking was similar for Europe and Americas? Do you expect the timing on the destocking to be similar for both regions, Europe and the Americas?
Hermanus Troskie: I think you'll possibly see North America come back a little bit quicker than Europe, but I think they'll be very similar. I think you're really talking about maybe Q2, et cetera. So, it's -- but I think it's -- it will be slightly quicker, I think, in North America.
Chris Ryan: One more. What would be the upside to those volumes recovering earlier? Or what would be a driver for that? And what could be -- what could potentially push it even further out?
Hermanus Troskie: I think it's really around the market growth and the consumer and how that goes. I think there's clearly, I would suggest that 2022 was a bit artificial based on the fact there was a lot of destocking in the process. So, the balance will be -- the normal volumes will be higher. But I think it's more about the consumer confidence and how that builds back.
Operator: Our final question will come from Eleonora Martignoni with CQS.
Eleonora Martignoni: I have two, please. First one, would you be able to provide the revenue split by end market for Europe and North America separately for the glass business? How much is beer versus wine versus food?
John Sheehan: Yes, we've got -- well, in terms of, say, volumes, there is kind of mid- to high 30s. Food is kind of mid-20s. Wine and spirits be tilted towards Spirits and arcades would be around about 30% and then nonalcoholic beverage will be kind of high single digits, 7% or 8%, that kind of level. The U.S. is up. Was not that different is the online than there is spirits. And then in South Africa would be principally beer. I think I should say.
Eleonora Martignoni: Okay. Perfect. Secondly, you mentioned that Mr. Colson sold 25% of resulting in the PIK notes and retained 75%. What is the quantum that, please?
John Sheehan: Yes. I think approximately, the retained amount is of the order of about $42 million, $43 million.
Eleonora Martignoni: And that's face value or market value?
John Sheehan: Nominal.
Operator: At this time, there are no further questions. I'll turn the call back to Herman for closing remarks.
Hermanus Troskie: Thanks, everyone, for joining, and we look forward to seeing you at our next call at the end of April. Thank you.
Operator: This does conclude today's conference. We thank you for your participation.
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