Ardagh Metal Packaging S.A. Stock

Good day, and welcome to the Ardagh Metal Packaging SA Q2 2026 Investor Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Stephen Lyons. Please go ahead.

Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's Second Quarter 2026 Earnings Call, which follows the earlier publication of AMP's earnings release for the second quarter.

I'm joined today by Oliver Graham, AMP's Chief Executive Officer; and Stefan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook. AMP's earnings release and related materials for the second quarter can be found on AMP's website at ir.ardahmetalpackaging.com.

Remarks today will include certain forward-looking statements and include use of the non-IFRS financial measures. Actual results could vary materially from such statements. Please review the details of AMP's forward-looking statements disclaimer and reconciliation of non-IFRS financial measures to IFRS financial measures in AMP's earnings release.

I will now turn the call over to Oliver Graham.

Thanks, Stephen. So before taking you through our quarterly results, I want to recognize that at the beginning of this month, we celebrated AMP's 10-year anniversary, a significant milestone in the history of the company. AMP was formed from 3 separate regional businesses and over a 10-year journey, we have developed into one strong integrated global business.

We've also transformed the company over this time. We've invested well over $2 billion of growth capital, transforming our network. Our capacity is more than 30% higher, supporting our customers' growth with specialty cans now representing over 50% of our volumes.

Our business mix is strongly diversified across both global and regional customers and across a variety of new and growing categories. We've invested in our people and our processes, enhancing the capabilities and resilience of our business and adjusted EBITDA this year is expected to have approximately doubled compared to our starting position. This has been a great achievement, and I'd like to extend my sincere thanks to our employees, our customers, suppliers and to all stakeholders that have made this journey possible.

AMP is in a strong position, and we look forward to continued success ahead. Our performance year-to-date is a testament to the resilience of our business in an uncertain macroeconomic environment, AMP has delivered strong second quarter adjusted EBITDA growth of 14% versus the prior year, significantly ahead of expectations. Beverage can sales declined by 1% versus the prior year quarter as we cycled strong prior year growth of 5%. Shipments were impacted by contract resets in North America and lower shipments in Brazil, following relative outperformance in the first quarter, partly offset by strong volume growth in Europe.

Overall volumes are in line with our expectations, and we expect to return to modest global volume growth in the second half, supported by the strength in global beverage can demand, our attractive customer portfolio and our high exposure to fast-growing beverage categories.

Our adjusted EBITDA outperformance in the quarter was primarily driven by Europe, which benefited from favorable input cost recovery and strong volume growth. America's performance was broadly in line with expectations despite softness in Brazil, and metal supply constraints impacting operations in North America at the beginning of the quarter.

Metal supply availability in North America significantly improved over the course of the quarter, and we anticipate operating under normal supply conditions during the second half of the year.

Now looking at our Q2 results by segment. In Europe, second quarter revenue increased by 13% to $698 million or by 10% on a constant currency basis compared with the same period in 2025. This was due to favorable volume mix effects in the pass-through of higher input costs, including higher aluminum prices. Shipments increased by 5% for the quarter, which reflected strong underlying demand as well as the ramp-up of newly contracted volumes. We experienced good growth in carbonated soft drinks and in the energy category as well as across our diverse range of smaller growing categories. We also saw an improvement in underlying beer performance in the quarter, with our reduction in reported year-over-year beer can shipments reflecting specific contract losses while underlying performance demonstrated greater stability.

Second quarter adjusted EBITDA in Europe increased by 36% versus the prior year to $105 million, strongly ahead of expectations. On a constant currency basis, adjusted EBITDA increased by 33% primarily due to stronger input cost recovery, including a favorable metal pricing timing impact and volume growth, partly offset by higher operations and overhead costs.

Regarding our direct energy exposure, AMP is well covered for its energy needs in 2026 and beyond through its energy hedging program. For '26, we're over 85% covered for energy requirements for 2027, approximately 80% and we are nearly 70% coverage for 2028. For 2026, we reaffirm our expectation for volume growth of around 3% in Europe. We don't yet have full beverage packaging industry scanner data for the second quarter, but from the available data, we see very positive overall beverage can consumption trends.

Capacity remains tight in the region and our production volumes in the quarter benefited from the network optimization actions that we undertook to allow us to better serve our customers with higher demand can sizes in faster-growing categories. We also previously outlined our intention to invest in the growing markets of the U.K. and Spain. We are pleased to announce we are taking the decision to upsize these projects following constructive commercial engagement with our customers. This will lead to higher CapEx of $40 million in 2026 compared to our previous guidance and allow us to capitalize on strong industry demand. We're also reviewing the timing of these projects given the strength of demand, and we will update on this topic in due course.

In the Americas, revenue in the second quarter increased by 21% to just above $1 billion, principally reflecting the pass-through of higher input cost to customers, including the impact of higher metal costs and freight cost pass-throughs, partly offset by lower shipments. Americas' adjusted EBITDA for the quarter was broadly in line with expectations with a 2% increase versus the prior year to $135 million resulting from lower operations and overhead costs compared to the prior year quarter, partly offset by lower input cost recovery and lower shipments.

In North America, shipments decreased by 5% for the quarter. This was in line with our expectations and reflected lower volumes after expected contract resets. The impact on operations from metal supply chain challenges at the beginning of the quarter and the cycling of a strong prior year comparable of 8%. Underlying demand dynamics in the industry remain robust with strong industry scanner data year-to-date apart from the beer category to which AMP has only a low single-digit exposure.

In particular, the energy category continues to show strong growth, supported by broader distribution and successful innovation. We also continue to experience ongoing strong demand for specialty can formats with further gains year-to-date in our overall specialty mix. We retain our expectation for industry growth in North America in 2026 of a low single-digit percentage.

As previously indicated, we anticipate 2026 being a transition year for AMP with a small full year volume decline following some contract resets, but with a more favorable second half volume performance expected versus the first half. We also expect to return to growth in 2027, at least in line with the industry on the back of having secured additional customer filling locations.

In relation to the lawsuit filed against Boston Beer in 2022 for a breach of contract in respect to minimum volume purchase requirements. On May 26, 2026, a quarter entered an amended final judgment to include $15.5 million in prejudgment interest, taking the total expected award value to approximately $190 million on a pretax basis.

Subsequently, Boston Beer posted a bond with the court to cover the award value and has also filed notice of appeal. In Brazil, second quarter beverage can shipments decreased by 15%, reflecting customer mix effects following strong relative outperformance in the first quarter when AMP volumes grew by 14%.

In the quarter, we observed increased World Cup related activity in the market from the leading player, which negatively impacted on our customers' performance as did some downtime taken by one of our customers for some maintenance activity. Our overall performance in the first half is broadly in line with industry performance. Industry data indicates that demand remained soft through the second quarter. The industry outlook for the third quarter is also looking soft. As we look to the remainder of 2026, we now expect an industry growth rate of low single-digit percentage and for AMP's volumes to broadly track the market.

I'll hand over now to Stefan to talk you through our financial position for the quarter before finishing with some concluding remarks.

Thanks, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $647 million. Net leverage of 5.2x net debt over the last 12 months adjusted EBITDA reflects AMP's strong adjusted EBITDA growth.

This compares with 5.3x at the end of June 2025 or 5.7x on a like-for-like basis if you pro forma for last year's Q4 refinancing of AMP's, preferred shares with debt. In terms of guidance of the various free cash flow components for full year 2026, we approximately expect the following: Total CapEx of $240 million, including gross investment, an increase of $40 million compared to our prior guidance driven by the previously mentioned upsizing of our investments in new capacity in Spain and the U.K.

Cash interest of $220 million, lease principal repayments of approximately $150 million, cash tax of approximately $30 million and a small outflow in working capital. Overall, our expectation in regards to our full year adjusted free cash flow generation remains unchanged. Finally, today, we have announced our unchanged quarterly ordinary dividend of $0.10 per share.

With that, I'll hand it back to Ollie.

Thanks, Stefan. And before moving to take questions, I'll just recap on AMP's performance and key messages. Adjusted EBITDA of $240 million in the second quarter exceeded our guidance range of $210 million to $220 million, primarily driven by strong performance in Europe with Americas performance broadly in line with expectations.

Global volumes declined by 1%, in line with expectations, and we expect to return to modest global volume growth in the second half. Reflecting on our strong first half performance and confidence in our outlook for the remainder of the year, we are upgrading our guidance for 2026 full year adjusted EBITDA to be between $775 million and $790 million.

Our guidance assumes some reversal of the favorable metal price timing effect and the Q1 revaluation gains related to freight plus hedging. In addition, the business faces some inflationary headwinds related to freight costs and other direct materials impacted by the oil price as a result of the conflict in the Middle East. In terms of guidance for the third quarter, adjusted EBITDA is expected to be in the range of $200 million to $210 million versus the prior year quarter of $208 million on a constant currency basis.

So having made these opening remarks, we'll now proceed to take any questions.

[Operator Instructions] and we'll go right to Matt Roberts with Raymond James.

North America was down 5% in 2Q. Did you see any benefit from the World Cup there? If so, how much or was it more of a nonevent given tight metal supply earlier in the quarter? And maybe I'm getting ahead of myself, but looking out to '27, you said you reiterated that lease market growth. But given that comp suppliers constrained first half in contracts resetting. How above market growth do you think would be possible in '27?

Yes. So look, on the first question, I think it's fair to say we didn't see a particular effect from the World Cup, obviously, different beverage can manufacturers have different customers, different mix, different filling locations, different bottlers. So we probably all experienced it differently, but we didn't see anything particular in our numbers. And it may be fair also to call out, it's true that we were still a little bit constrained at the start of the quarter on the metal, though that normalized pretty rapidly through the quarter.

So yes, we didn't see anything particularly. We're obviously not in mass beer and there may have been more promotional activity from what we can see in the beer category? And then on '27, we obviously have above-industry growth rates for most of the last few years and this year a bit of a transition. So we're not calling '27 yet, but we do see that we have some gains from the same contract resets that impacted those this year negatively, we have some positive gains next year in terms of a couple of additional filling locations. And then we still like the look of our portfolio, whether it's weighting towards soft drinks and energy categories, which you can see in the data are outperforming overall industry averages, again, because of weakness in mass beer. So yes, we're not pulling it yet, but we certainly feel good about saying that we should grow at least in line with the industry next year.

And you described as continued inflation compared to when we said it was a early April, late March. It seems like certain indicators have come down since then, but since July has certainly picked up again. So how does the second half inflation compared to what you were previously anticipated and if any changes, but specifically were the drivers of that?

No, sure. Yes, I mean, I guess, we can think about inflation in a couple of different ways. So one is the inflation in our input costs, which is linked to the Middle East, which is mainly in the direct materials and freight as we called out in the remarks. And I think that hasn't really changed very much from our guidance back in Q1.

So we're talking mid-single-digit sort of million dollars actually in those areas. So that's reasonably stable. Obviously, the situation isn't stabilizing, but I think we look forward with some confidence in terms of the resilience of our supply chain. So we think that's a reasonably safe number for the second half. And then in terms of inflationary pressures for the consumer or for -- I think that's clearly worsening again. And so probably some reason for some appropriate caution in the second half on volumes. But again, we think that's embedded in our guidance, and we still think we should return to some volume growth in North America for the second half.

[Operator Instructions] We'll go next to Josh Spector with UBS.

So I just wanted to ask, it seemed like in your prepared remarks, you talked about some timing benefits within Europe and that helping margins. Are you able to size that at all?

Yes, sure. So I think if you look at the overall for the company around $25 million versus the midpoint of consensus and a bit more than that in Europe. But we think a little bit over half of that is linked to metal timing. And then we think about 1/3 of that reverses in the second half.

So of the $25 million, as I say, a little over half being there the positive and then about 1/3 of that reversing on the metal side in the second half.

Reversing as if it's going to be a negative impact year-over-year or just lacking the benefit?

Yes, negative. So it's a headwind in the second half. So I think I called out, first of all, and freight inflation sort of mid-single-digit headwind in the second half than the metal timing, mid-single-digit headwind. We also have a little bit of an FX headwind, and that's underlying the guide being a little bit less positive for the second half after a strong first half.

Okay. That's helpful. And I just wanted to follow up a bit on the Americas volume side. And just I guess, thinking about the resets this year, and you talked about some gains next year. I guess when you look at your circuit for next year in North America, is there any slack left when you look on a year-over-year basis, so do you regain everything? Is there something where you'd say you still have to grow into? Or is it a very tight circuit at this point later next year?

I think on the certain can sizes, there's definitely still capacity to grow into. Going back to the investments we made over the last 5 years. It's certainly getting pretty tight on specialty sizes, sleek in the season pretty tight. So we do see that. But we also have some projects to do some incremental speed up and things. So we see room to grow over the next few years in North America still.

Our next question comes from Arun Viswanathan with RBC Capital Markets.

I guess I just wanted to drill down into the European volume. So obviously, you've seen some continued strength there, you are making some more investments there. So I guess do you expect this kind of mid-single-digit growth to persist? And then how would you kind of rate the profitability there versus maybe some of your other regions? Do you think there's any need for or there's any opportunities for improved returns and margins in Europe as you move throughout aside from notwithstanding the metal pass-through. But just curious on the actual overall returns profile.

Sure, yes. No, I think we feel very good about the market overall. As I said, I think we've got some very positive data coming through on can volumes right across the geographies. We see some temporary effects when deposit schemes are introduced. So we see that a bit in Poland this year. We saw it in the Netherlands a couple of years ago. But overall, there seems to be, again, strong momentum behind the can relative to other substrates that are crackling with either input cost inflation ahead of ours or from sustainability concerns.

So we see a lot more innovation going into the can. We see innovation going to the can much earlier. So customers talking to us about how they might have launched on the beer side in glass and then brought can innovation later, but now it's all simultaneous. So I think a lot of positive momentum. And our peers have talked about this, but you look across the European markets, we still have some very low penetration rates we've got still two way glass in some markets and other substrates in categories where we're typically very strong.

So I think the European growth story is fully intact and looks very positive for years to come, which obviously underpin some of the investments we're making and our peers are making to meet that demand and make sure the industry can continue to grow and that's why we were pleased to announce the upsizing on the U.K. and Spain investments.

In terms of profitability, I mean, traditionally, a very strong profit region, Europe for us, suffered a bit coming through Russia, Ukraine, the energy crisis. We're on some recoveries. So I think we do see better margin performance this year. And again, you should be very careful. Obviously, as you know, on looking at any percentage margins given the impact of the aluminum price on the revenue side. But certainly, at the EBITDA per 1,000 level, we do see improved performance. And yes, we think we can drive improved performance in Europe through ongoing focus on cost. We always have had that, but there's some good programs that we are pursuing at the moment. And obviously, the market is tight, so that also should be positive.

So yes, we hope there's some improvements there.

And I guess just as a follow-up on the Americas, conversely there. It seems like, obviously, you may be able to maintain low single-digit volume growth in North America, but South America tends to be considerably more volatile. So with the World Cup now kind of in the rearview mirror, do you expect that region to kind of settle into kind of a low single-digit growth trajectory or could it be slightly lower than that with a slightly negative offset coming through South America. How should we think about normalized growth rates in your Americas business?

Yes. There's no question Brazil has become more volatile post-COVID. So I think a number of effects going on there. I think the economy overall and the consumers suffered much more than in developed markets, and we see a longer recovery trajectory out of that.

And then obviously, in that backdrop, you get more competitiveness at our customers to chase those lower spending dollars. And then we also see increased competitive activity anyway in our -- in the brewers with an additional brewer growing over the last 5, 10 years and with the leading player playing much more in the off-trade than they used to. So what you see, I think is; a, a little bit more weakness on the consumer side and then you see much more volatility quarter-to-quarter depending on which Brewers chasing volume versus margin. And we certainly are finding it harder to call and project the market than we used to. I think it remains a market with a very positive backdrop in terms of the growth of the can relative to 2-way glass. I think that will still continue to play out. Obviously, the leading player now also driving that, whereas they used to hold that back.

So yes, I think those singles is a minimum, I'd hope for in terms of the overall growth. But I do think this the volatility will persist. And it certainly has become much more challenging to predict. And that's another factor, I think, the behind our H2 guide that Q4 is obviously the summer season in Brazil, and we could get quite a wide range of volumes there at the moment in our estimates.

So we're also being cautious on Q4 as a result of that.

We go next to the line of George Staphos with Bank of America.

I have 2 questions. First, what are the key factors behind the drop in EBITDA from about $240 million in 2Q to the guided range, and you quantified the major drivers of that decline. And second, what effect did mix have on 2Q results? And why were your results ahead of guidance?

So I think the first question was about why is Q3 below Q2. Q3 is always below Q2 because Q2 is our high season, and we generally are coming off a bit of that into Q3 and the remainder of the year. So I think if that was that question, I think probably that's the answer to that largely.

We also have called out. I think there are some inflationary pressures in the second half that we don't have in first half and so the second half overall is down a little bit. And then I think your other question was about mix. So obviously, if you look at the North American results, we've lost quite a lot of volume there, but our overall volume mix line is flat. So you can see from that, that there is positive mix in North America, and we called out the specialty can percentage increasing. And then there was also a good mix in Europe with the categories we're talking about.

And yes, I think Brazil at this point was a bit less relevant. So I think I caught your questions, but I'm turning to Stefan, just to check.

No, I think you did.

We'll go next to Michael Roxland with Truist Securities.

Just wanted to check quickly on maybe an early read for July volumes by region for 3Q volumes? And then more specifically, how you think of, I guess, Brazil in the second half going off a few questions ago.

Yes. I think the July volume is looking sort of largely correlated with Q2. So strong Europe, I think, yes, U.S., North America, a bit better, probably, as we talked about, I think the second half should be stronger than the first half when we start to see that in the July volumes and then Brazil, definitely still soft -- market soft and our volume is a bit softer.

So I think that underlines our caution on Brazil second half. We do have in the plan some volume growth. We still expect that. And obviously, what we've seen in the last few years is the summer season can really take off well which will obviously be happening from sort of October onwards. So we'd be hopeful for that. But again, I think we've called it out. I think our peers are calling it out, there's a lot of volatility in the Brazil market at the moment, depending on which of the brewers is really pushing volume.

Got it. And then just one follow-up on your corporate structure. Can you give any update to what's happening there with maybe what the parent company is looking to do, separating potentially glass and metal.

Yes. No, we don't have any update on that at this point.

[Operator Instructions] At this time, we have no further questions. I'd like to turn the floor back to Oliver Graham for any closing remarks.

Thanks, Melinda, and thanks, everyone on the call. So just to summarize, in the second quarter, we reported strong adjusted EBITDA growth of 14% versus the prior year quarter. Significantly ahead of guidance, primarily driven by Europe, which benefited from favorable input cost recovery and strong volume growth, a testament to, I think, a resilient of AMP's business. And reflecting on our strong first half performance and confidence in our outlook, we're upgrading our guidance for full year adjusted EBITDA to between $775 million and $790 million.

And with that, we look forward to talking to you again at our Q3 results. Thanks very much.

This concludes today's conference. We thank you for your participation. You may disconnect at this time.

Welcome to the Ardagh Metal Packaging First Quarter 2026 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Stephen Lyons. Please go ahead, sir.

Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's First Quarter 2026 Earnings Call, which follows the earlier publication of AMP's earnings release for the first quarter. I'm joined today by Oliver Graham, AMP's Chief Executive Officer; and Stefan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook.

AMP's earnings release and related materials for the first quarter can be found on AMP's website at ardaghmetalpackaging.com/investors. Remarks today will include certain forward-looking statements and include use of non-IFRS financial measures. Actual results could vary materially from such statements. Please review the details of AMP's forward-looking statements disclaimer and reconciliation of non-IFRS financial measures to IFRS financial measures in AMP's earnings release.

I will now turn the call over to Oliver Graham.

Thanks, Stephen. We're pleased to report strong first quarter results for AMP with adjusted EBITDA growth of 15% versus the prior year, significantly ahead of our guidance and demonstrating the resilience of our business. Beverage can sales declined by 1% versus the prior-year quarter, in line with our expectations as we cycled strong prior year growth of 6% and due to the impact of contract resets in North America. Our adjusted EBITDA outperformance in the quarter was driven by Europe, which benefited from strong input cost recovery, including a favorable timing impact from the revaluation of freight cost-related hedging as well as favorable volume mix effects.

Performance in the Americas was broadly in line with expectations. Brazil delivered strong results driven by above-market volume growth, which was offset by the impact of a more challenging operating environment in North America where adverse weather conditions and aluminum supply chain disruptions drove higher operational costs. While the supply chain situation is improving, we do expect to see further impact into Q2.

The conflict in the Middle East did not have any material impact on our Q1 performance. AMP has no manufacturing operations in the Middle East and no significant direct supply chain exposure. We continue to monitor the geopolitical environment and the associated volatility in input costs, in particular, energy, freight and certain direct materials. AMP's exposure to the recent increase in energy prices is small given our hedge positions for 2026 and beyond. However, we do anticipate some moderate input cost increases in the second half as a result of the impact of the Middle East conflict on certain direct materials.

Now looking at AMP's quarter 1 results by segment. In Europe, first quarter revenue increased by 18% to $625 million or by 6% on a constant currency basis compared with the same period in 2025. This was due to favorable volume mix effects, including the impact of the IFRS 15 contract asset and the pass-through of higher input costs, including higher aluminum prices. Shipments declined by 1% for the quarter, which reflected the ramp-up of new contracts and the cycling of a strong prior year comparable of 5%.

We experienced good growth in carbonated soft drinks and the energy category and across our diverse range of smaller growing categories. Through this strong underlying growth in nonalcoholic categories as well as our commercial actions and network enhancements, our portfolio saw a favorable mix shift in the period and good growth in specialty can volumes.

First quarter adjusted EBITDA in Europe increased by 53% versus the prior year to $75 million, strongly ahead of expectations. On a constant currency basis, adjusted EBITDA increased by 36%, principally due to higher input cost recovery and favorable volume mix, including the impact of the IFRS 15 contract asset, partly offset by higher operational and overhead costs. Our input cost recovery in the quarter benefited from a favorable timing impact from the revaluation of freight cost-related hedging.

Regarding our direct energy exposure, AMP is well covered for its energy needs in 2026 and beyond. For 2026, we're over 85% covered for our energy requirements; for 2027, over 75%, and we're more than 60% covered for 2028.

In 2026, in terms of volume growth, we reaffirm our expectation of around 3% in Europe. Capacity remains tight in the region, and we are therefore optimizing our network to better serve higher-demand can sizes in faster-growing categories. In our last update, we highlighted our intention to add additional capacity within existing facilities in the attractive markets of Spain and the U.K. on a measured basis over the coming years. We continue to progress these plans, which are underpinned by our favorable market positions and our confidence in Europe's growth outlook. In the first 2 months of the year, beverage packaging scanner data across our markets continue to show share gains for the beverage can versus other packaging substrates.

In the Americas, revenue in the first quarter increased by 19% to $879 million, principally reflecting the pass-through of higher input costs to customers, including the impact of the higher Midwest Premium and favorable volume mix effects. Americas adjusted EBITDA for the quarter was broadly in line with expectations with a 2% decrease versus the prior year to $104 million, primarily driven by higher operations and overhead costs and lower input cost recovery, partly offset by favorable volume mix effects.

The strong performance in Brazil, driven by 14% shipments growth and increased fixed cost absorption was offset by a more challenging operating environment in North America. In North America, shipments decreased by 5% for the quarter. This reflected lower volumes after expected contract resets, the impact on operations from supply chain challenges and the cycling of a strong prior-year comparable of 8%. Supply chain challenges in the period included the impact of disruptions to metal supply and adverse weather at the beginning of the year.

Underlying demand dynamics in the industry remain robust with strong industry scanner data year-to-date with the exception of the beer category to which AMP has only a low single-digit exposure. In particular, the energy category continues to record strong growth supported by broader distribution and further innovation. AMP continued to enjoy good growth in the energy category in the quarter, reflecting our broad positioning across the category.

Looking into 2026, we continue to expect industry growth of a low single-digit percent. As previously indicated, we expect some softness for AMP following contract resets. We anticipate 2026 being a transition year with a small volume decline and with a more favorable second half volume versus the first half. We expect to return to growth in 2027, at least in line with the industry on the back of additional contracted filling locations and our attractive portfolio.

Of note in North America was that on April 6, 2026, the court entered a jury verdict pending any post-trial motions in connection with the lawsuit filed against Boston Beer in 2022 for breach of contract in respect of minimum volume purchase requirements. And the jury awarded damages of approximately $175 million to AMP, plus pre-judgment interest if assessed.

In Brazil, first quarter beverage shipments increased by 14%, which represented a strong improvement versus the fourth quarter and was also ahead of the industry due to our customer mix. Industry data indicates that following a strong start to the year in January and February, March activity was softer and resulted in an overall modest decline in volumes in the first quarter. Looking into the remainder of 2026, we continue to expect industry growth of a low to mid-single-digit percentage and for AMP's volumes to broadly track the market.

I'll hand over now to Stefan to talk you through our financial position for the quarter before finishing with some concluding remarks.

Thank you, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of $488 million, in line with expectations. We note that in addition to our strong liquidity position, we have no near-term bond maturities and the currency mix of our debt broadly matches the currency mix of our earnings.

During the quarter, AMP completed the refinancing of the asset-based lending facility, which was upsized to $450 million and with its maturity date extended to January 2031. Net leverage of 5.7x net debt over the last 12 months adjusted EBITDA compares with 5.5x in the prior year quarter, with the increase reflecting the impact of the refinancing of the preferred shares in December. Excluding this impact, the underlying net leverage metrics slightly declined year-over-year.

In terms of 2026, we approximately expect the following for the various components of free cash flow, total CapEx of $200 million, including growth investments, cash interest of $220 million, lease principal repayments of approximately $115 million. Lease payments were higher in the first quarter versus the prior year, which reflected the buyout of an existing lease in North America. Cash tax of approximately $30 million and a small outflow in working capital. Finally, today, we have announced our unchanged quarterly ordinary dividend of $0.10 per share.

And with that, I'll hand it back to Ollie.

Thanks, Stefan. So just before questions, I'll just recap on AMP's performance and key messages. Firstly, adjusted EBITDA of $179 million in the first quarter exceeded our guidance range of $160 million to $170 million, driven by a strong performance in Europe. Global volumes declined by 1%, in line with our expectations, reflecting the impact of a strong prior year comparable of 6% and the impact of contract resets in North America. Thirdly, AMP has no manufacturing operations in the Middle East and no significant direct supply exposure. AMP's energy cost position is protected through a strongly hedged position in 2026 and beyond.

For 2026, we reaffirm our adjusted EBITDA to be in the range of $750 million to $775 million. Adjusted EBITDA growth is expected to be driven by operational efficiencies and cost savings, volume growth and improved category mix. We view 2026 as a transition year in North America with volumes ahead of an expected return to growth, at least in line with the industry in 2027.

In terms of guidance for the second quarter, adjusted EBITDA is expected to be in the range of between $210 million and $220 million versus the prior-year quarter of $212 million on a constant currency...

[Technical Difficulty]

Please stand by.

We think we lost connection -- so we're just opening the call up to questions now.

[Operator Instructions] And our first question comes from Matt Roberts from Raymond James.

In the prepared remarks, you noticed modest cost increases in the second half. Can you give any additional color on what specific categories those are in? Is it more pronounced in a certain region? Or what is not covered in pass-through or has a lag in recovery, whether that's freight, energy, coatings? Any additional detail there?

Sure. Yes. That's mostly in our coatings area. So I think, as I said in the remarks, we're very well covered on the energy side. There are some pass-through provisions in coating contracts in year that will potentially come through in the second half if oil prices stay very elevated. But they obviously haven't changed our guidance range. So that gives you a sense of the scale.

Right. I appreciate that. And you did note that you did reaffirm the guide. 1Q came in a little bit better than you were expecting. sounds like volumes broadly are similar as well. Has anything changed on the volume outlook by region? Or based on the 1Q beat, would that imply the cost headwinds are around roughly $15 million. Could you ballpark that, if possible?

No, sure, Matt. Look, I think it's -- we're just at Q1, there's plenty of the year to go. So I think that's one reason just to remain a little bit cautious given the state of the world. There's a little bit of input cost inflation we expect in the second half. I think we have to accept that the consumer is facing into a lot of inflation at the minute. So we can't be absolutely sure though. We didn't see a reason to change our volume guides because when we looked at the Q1 market data that we could see in our numbers, we saw a lot of strength in that data. And Europe, I think, particularly, we've got data in January and February in our key markets. There's some real double-digit growth rates in some of those markets in particularly soft drinks categories.

Brazil obviously had a very strong January and February coming off a very strong November, December. So in other words, a very strong summer. We're going into the winter season. We do have the World Cup in the winter season, which should be favorable. And North America, again, the volume number is still extremely strong across soft drinks categories, particularly energy, especially going into the Easter period, strong promo activity.

So although I think it's appropriate to be cautious at this stage of the year, we definitely saw no reason to really change the volume numbers on a concrete basis. So I think, yes, we're just being cautious around possible input cost inflation in H2 and recognizing that the consumer may be under some pressure during the year.

[Operator Instructions] We'll take our next question from George Staphos with Bank of America.

Congratulations on the progress so far this year. I'll ask three questions in sequence and return to queue just for time. First of all, can you talk about what the impact was on the timing effect on the hedge revaluation in Europe? How large of a factor was that? Is there any residual into the rest of the year?

Secondly, Ollie, you talked -- touched on it a little bit. Can you talk about what World Cup and to some degree, America's 250 is meaning for volume relative to what a normal summer might look like?

And then third point, Brazil, can you talk a little bit about how things softened there in the market? What's causing that? And any outlook that you can take into, obviously, now the weaker winter months and the implications for the rest of the year?

Sure. Thanks, George. Yes, on the first one, I think sort of mid-single-digit millions of benefit in the quarter from the European freight hedging position coming from, obviously, we're careful around hedging some of the positions that are on us. There is some possibility of that -- some of that reversing depending on what happens to commodity costs in the year. So some of that is potentially a timing impact, which is why we're not overrating it in our forward guidance. So that's the sort of order of magnitude for that.

I think the World Cup and maybe Brazil, those questions get a bit intertwined because I think where it has the potential to be probably most impactful is in Brazil, given that it's falling in the winter period, given the sponsorship of the Brazilian national team and the focus on the World Cup and assuming they go deep into the tournament. So that's why we would be hopeful that this slightly negative start to the year on the full quarter after a very good January and February would be moderated into Q2 and Q3. And we'd also be hopeful after the summer we had, that we've just come through that next summer would also be a good summer.

So we think some of the macro elements are stabilizing. We've also got some elections. So -- and then we do see in the data that we continue to have the can take share from returnable, and we know that's a long-term trend that will continue. Obviously, the major brewer down there controls some of that dynamic and obviously, they have their own pressures that drive it sometimes quarter-to-quarter. But I think if you look at the long-term trend, certainly still well in place. So yes, I wouldn't overread too much probably in the Q1 numbers in Brazil. I think we're still hopeful as we said, sort of low to mid number for the year and for us to be in line with that.

And then World Cup outside of Brazil, I mean, certainly, Europe, we saw a tick up in -- towards the end of the quarter in terms of label activity, graphics activity. So we're definitely seeing a lot of sort of promotional-type cans or individual-type cans coming into the mix into the inventory build, and that would suggest World Cup. And I think we're seeing elsewhere in the market some signs that there could be some positive effects. I mean I'm always cautious to call it too early. We need to see it sell-through. It's often very weather-related as well in terms of how exactly it plays through. But yes, all positive signs at the moment, I think, in both Europe and Brazil.

Just one quick one, just a yes or no, and I'll turn it over. On aluminum, you mentioned you are seeing supply constraints in North America, at least that's what I took away. Despite the constraints, do you feel like you're positioned well enough to be able to meet your commitments over the rest of the year? And then I'll turn it over to the rest of the team -- the rest of the guys.

Yes. No, good question. Look, I think it does seem like the situation is moderating quite quickly now. As we've gone into April, I think a lot of metal is coming into the market from overseas that obviously was on long supply chains. And so we do see that landing now and helping to improve the situation. We also have the first new mill ramping up now. We have the second new mill coming at the end of the year.

So I think we're hopeful now that we're through the worst. I think the Middle East conflict didn't help. I mean that some supply out of the Middle East obviously got restricted in March. But as we see the trends now sitting towards the end of April and going into May, yes, we're hopeful that, that's all moderating. And we certainly don't see any need to change our guidance or change our forecast off the back of it.

[Operator Instructions] And we'll take our next question from Anthony Pettinari with Citi.

Just following up on volumes and the Middle East conflict. It sounds like you haven't seen any impact and obviously don't have any assets in the region. But I'm just wondering, you talked about strong scanner data in January, February. I think the conflict started at the very end of February. As you look at March, April, have you seen any change in order patterns in terms of people prebuying or maybe easing off? Or as you just -- as you talk to customers or channel partners, is there a sense that there could be an impact if this continues to go on or maybe it's better or worse in North America versus Europe? Or just any color you could give would be helpful.

No, I guess, look, I don't want to mislead in the January, February comments. That's just where we actually have data because obviously, we're still just in April. So not all the March data and the full quarter data has come through. So our impression actually is that Europe strengthened in March after some very, very encouraging scanner data for January and February, particularly Germany, very strong again on the soft drinks side.

So I think my prediction would be that March scanner data for Europe will be good. Everything we're seeing in our numbers was good in March and continues into April in a good way. So no, definitely not if I think about Europe. And then again, North America, we saw going into Easter really good volumes. We saw that in our business, particularly in certain categories. So certainly nothing to suggest that there's any change at this point. So it's just more that there clearly was something going on in Brazil in that January and February was stronger than March. But as you go into the winter season, you always -- can always be a little bit volatile depending on how people build inventory into the summer and what they were left with. And obviously, we're into the slower season.

So I think one of the reasons we've held guidance, we've held our volume forecast despite the situation in the world, I think it demonstrates the resilience of the beverage can sector, of the way our customers are using beverage cans in their mix and particularly prioritizing the beverage can and then also the resilience of our own business. So clearly, a very positive outlook from our point of view to hold guidance in this current geopolitical environment.

Great. Great. No, that's very helpful. And I guess maybe just one follow-up on Europe. I mean it seems like results really exceeded your expectations. Is the biggest surprise there from your perspective on the volume side in CSD or energy drinks? Or is it the cost recovery? Just if you think about sort of the bridge versus your initial expectations, like what was the biggest driver from your perspective of the outperformance?

No. I think the biggest driver was clearly the input cost recovery. We mentioned the timing effect and the one-offs potentially around the freight. But also, we did see the mix benefit in the quarter that was strong. So we've got some good specialty can growth because of the categories we're in. And that also did play into the IFRS 15 contract asset because we had very strong production and good specialty volumes. So both of those also played into the contract asset and volume mix.

So yes, just a really good performance by the region, I think, delivered against our expectations, ramped up our new specialty volumes. We did a change to one of our plants to improve our specialty footprint, and that ramped up extremely well. So production was a bit ahead. And then yes, very good delivery on all elements of cost.

And our next question comes from Josh Spector with UBS.

It's Anojja Shah sitting in for Josh. I just had a question on the Boston Beer verdict. What steps are left in order for you to get that $175 million? Like is it a definite? It's just a matter of time? Or what legal steps are left? And when might you actually receive this? And will it have any impact on your capital allocation priorities?

Yes. No, we're not going to talk in much detail about it because it's still clearly legal proceedings. But clearly, there is a potential -- they have the option to appeal. That could mean that obviously, they could appeal it and that could delay realization. We don't see that changing our capital allocation priorities at this point. At the minute, we've laid out the next investments that we see that makes sense for the business. And obviously, we're also very conscious of making sure we stay within our leverage position. So at the minute, we don't see it changing any capital allocation policies.

Okay. And on the aluminum availability issue, can you quantify what the drag was in Q1 and maybe what's in your guidance for Q2? And then do you expect it to fall away after that?

So we think across the weather, I mean, we sort of forget now, but actually sort of January, Feb, there was some very cold weather in the South of the United States that led to a lot of disruption. So we had people struggling to get to our facilities, struggling to get to customer facilities and freight issues on the roads. So between that and the metal, we think we lost 1 to 2 points of growth in the quarter across both ends and cans. So that's the sort of order of magnitude we saw in the quarter.

At the minute, we're not predicting anything particularly in the guidance for Q2. So we sort of held roughly to where we had planned to be because certainly in the last couple of weeks, things have improved quite significantly. So at the moment, we'd be hopeful we can come through Q2 without any significant drag. But maybe, Stefan, you can add anything to that.

Yes. Maybe just in regards to the cost side of the impact, we had adverse impact on freight costs as well as manufacturing costs. So we had to move a little bit around sort of product in our manufacturing network and had some unfavorable freight lanes as a result. And also in terms of the operations, it was more -- a little more from hand to mouth, shorter runs, maybe not running the right spec all the time in terms of metal. So if you add that all up, it was probably a mid- to high single-digit impact in the quarter.

Mid- to high single-digit millions on EBITDA, you mean?

Yes, correct.

And we'll go next to Arun Viswanathan with RBC Capital Markets.

Maybe I'll just get your thoughts on the potential -- the inflation and what you're seeing on the tariff side as well. So in North America, I guess, there -- how has the Midwest Premium affected demand and can pricing, if at all? And do you see that changing with 232?

Yes. We keep looking for it because obviously, between the LME and the Midwest, they're pretty significant. And this has been going on for a while. So people's hedge positions may be rolling off a little bit. But we're not seeing it. We're not seeing it in the data. We're not seeing it in our customers mix and their plans, and not seeing it on the shelf. So I think the can has got a lot of resilience at the moment, the fact that it does remain a very efficient package. The fact that consumers are clearly favoring it, I think, and that obviously drives these brand companies to rightly take note of what their consumers want. And then in certain parts of the world, the sustainability credentials also play very strongly.

So the tariff situation hasn't got better. If anything, the last piece made it marginally worse, but not significantly. But as I say, I mean, right now, I think all the data is really a testament to the resilience of the industry and the substrate. And what we are also seeing now, obviously, is inflationary impact into petrochemical and energy, which are obviously negative for the competing substrates. So I think net-net, although we should always be cautious and with the inflation that the consumer is facing more generally, the can seems to be continuing to win in the mix.

Just to clarify, is it the case that the beverage companies, your customers are absorbing some of that extra cost and not necessarily passing that on in higher beverage prices. And so they're continuing to promote? Or is it that customers are paying higher prices, but they're willing to do that...

Yes. There was obviously a very significant increase in pricing over the last few years post COVID and all of the inflationary effects that happened after COVID. So I think there's room for some absorption. But equally, we don't know all the ins and outs of our customers' P&L. And again, particularly, we don't know the nature of their hedge positions and other ways they might be offsetting these costs. I don't think we're seeing a huge amount of price increase at retail. If we look at the promo information, promos are still strong. And there isn't a lot of room, I think, to increase price much further given the price increase over the last few years. So our sense of it is more that our customers are managing it.

And just on that supply-demand side. So given the strong growth, I guess, in Europe, I'm not sure if you would need to potentially add any capacity there. Similarly, in North America, strong energy growth, I guess, could continue. So maybe you can just let us know what your plans are on capacity additions in Europe, North America and Brazil, if any?

Sure. Yes. So I think we said it in the prepared remarks, and we talked about it at the Q4. So we do plan to add capacity in Europe. That's where we're the most tight in terms of our network and our utilization with Spain and the U.K. being the 2 markets we'll invest in. And those projects will come in, in the next couple of years to support the growth that we have, but also it's an extremely supportive market environment, and we see our peers investing behind that environment. We see our customers really putting growth plans behind the can supported by those investments. So yes, we'll absolutely be participating through growth investments in Europe.

At the moment in North America, particularly with the contract resets that took place last year, we've got space in the network. We do need to make sure we get the mix right. We've made some very good investments to increase the flexibility of the network in North America. That means we're very well positioned for different types of growth, but we may continue to do that at the margin just to make sure our network is really tuned for particularly specialty can growth.

And then Brazil, yes, we have good capacity availability. We put a lot into the Northeast where we still need to grow into that. The Southeast is a bit tighter. But again, I think with the improvements we're making in the network, we've got space in Brazil. So nothing planned there in the short term.

And we'll move to Gabe Hajde with Wells Fargo.

This is actually Richard Carlson on for Gabe this morning.

So first question I want to ask you guys about Europe. I mean you guys have mentioned that you don't have direct exposure to the conflict in the Middle East, but certainly some of your competitors do. And so are you seeing any change in the marketplace from guys who are saying they're having a hard time getting the metal supplier or getting the energy supply that they need?

No, really not. And again, I think what we understand is most of the impact is occurring just in region with facilities being stopped or particularly to the east of the region. So I think markets that are supplied with energy out of the Gulf, markets like India, that's where I think the impact is landing, not in Europe where you've got much more developed supply chains and much less direct exposure to the region. So no, we're not seeing any near-term impact in Europe.

Right. And your plants are all natural gas, right?

I mean we operate with a mixture of gas and electricity. So yes, that's what we operate with.

Got it. And then I think you were touching on this with Anojja's question. But as we think about the new cadence for the year, presumably, there's some -- you got some good momentum going into Q2. How has your Q2 outlook changed over the past couple of months? It seems like now you, of course, got a little more front-end loaded for the year. But are you seeing now -- has your guide from what you thought it would have been 2 or 3 months ago increased?

No, I don't think so. I think to the extent that there are going to be different impacts from when we first issued guidance, it's mostly sitting in the second half, so either a little bit of input cost inflation. Obviously, in our guidance is some caution. We're in Q1. We've not seen how this conflict plays out. We've not seen potentially the scale of the inflationary impacts or the disruption.

So we're being cautious. But I think that to the extent that we're adjusting slightly, it's more Q3, Q4 where we're just not putting through all the gains that we've made in Q1. I think Q2 is sitting pretty much where we already had it and Stefan is nodding. So it seems I got that right.

Yes, agree.

And ladies and gentlemen, that concludes our Q&A session for today. I'll turn the conference back to Oliver Graham for any additional or closing remarks.

Thanks, Lisa. Thanks, everyone, on the call. So just summarizing, in the first quarter, we reported strong adjusted EBITDA growth of 15% versus the prior year, significantly ahead of guidance and particularly driven by a strong performance in Europe. And I think a testament to the resilience of the industry and of AMP. And on the back of that, even in the face of the current geopolitical environment, we reaffirm our guidance for 2026 full year adjusted EBITDA in the range of $750 million to $775 million, supported by our robust input cost pass-through mechanisms and our energy hedging arrangements.

And so with that, we'll sign off and look forward to talking to you again at our Q2 results. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.

Welcome to the Ardagh Metal Packaging S.A. Quarterly Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Stephen Lyons, Head of Investor Relations. Please go ahead.

Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's Fourth Quarter 2025 Earnings Call which follows the earlier publication of AMP's earnings release for the fourth quarter and the full year. I'm joined today by Oliver Graham, AMP's Chief Executive Officer; and Stefan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook. AMP's earnings release and related materials for the fourth quarter can be found on AMP's website at ardaghmetalpackaging.com investors. Remarks today will include certain forward-looking statements and include use of non-IFRS financial measures. Actual results could vary materially from such statements. Please review the details of AMP's forward-looking statements disclaimer and reconciliation of non-IFRS financial measures to IFRS financial measures in AMP's earnings release. I will now turn the call over to Oliver Graham. .

Thanks, Stephen. 2025 was another year of strong performance for AMP, underpinned by shipments growth of over 3%, a favorable product mix and solid operational delivery. Our performance drove year-over-year adjusted EBITDA growth of 10%, which significantly exceeded our initial guidance. Our tight focus on cost control generated meaningful operational and overhead cost savings in the year. Our teams navigated the complexity of evolving demand patterns, both in terms of category mix and can sizes to position our capacity to support our customers' growth. From a balance sheet perspective, we ended the year in a robust position with nearly $1 billion of liquidity. In the fourth quarter, we successfully raised $1.3 billion of green bonds, which Stefan will talk about in further detail later. Our strong performance in the Americas was driven by significant growth in North America volumes of 6% for the full year and favorable mix due to higher energy drinks category, which more than offset the impact of softness in the Brazilian beer industry.

In terms of European performance, operations and overhead cost savings as well as shipment growth in carbonated soft drinks and other growing categories offset the anticipated metal input cost headwind. In each of our regions, the beverage can continues to take share from other packaging substrates. Advantaged by the cans convenience, branding potential, total cost of ownership and sustainability credentials. This supports the continued positive outlook for global industry growth.

Turning to AMP's Q4 results by segment. In Europe, fourth quarter revenue decreased by 1% to $539 million or by 6% on a constant currency basis compared with the same period in 2024, principally due to the impact of a negative IFRS 15 contract asset partly offset by favorable volume mix effects and the pass-through of higher input cost to customers. Shipments grew by 1% for the quarter with good growth in carbonated soft drinks and across our diverse range of growing categories as well as in the energy category. This was offset by a decline in beer shipments, which reflected a weaker industry backdrop as well as stronger shipments in the prior year.

For the full year, Europe shipments grew by 2% and with growth in nonalcoholic beverages offsetting a flat performance in beer shipments. Indeed, the broad-based gains across growing categories such as ready-to-drink teas and coffees, canned wines, water and juices is testament to the ongoing innovation in the European beverage can market and to AMP's success in supporting this growth. We expect this growth to continue helping to further diversify AMP's portfolio. Fourth quarter adjusted EBITDA in Europe increased by 14% versus the prior year to $64 million, ahead of expectations. On a constant currency basis, adjusted EBITDA increased by 8%, principally due to higher input cost recovery, which included a positive benefit from metal timing effects and favorable volume mix, partly offset by higher operations and overhead costs.

Full year adjusted EBITDA of $272 million further underlines the region's improving profitability. In 2026, we expect to grow volumes by around 3% in Europe, broadly in line with industry growth. Capacity remains tight in the region, and we are, therefore, optimizing our network to better serve higher demand can sizes for faster-growing category. We continue to review opportunities to support our customer growth, and we are progressing plans to add additional capacity in the attractive markets of Spain and the U.K. on a measured basis over the coming years. Both projects will add capacity into existing facilities with the related moderate increase in capital expenditure to be spread across financial years. These projects are underpinned by our favorable market positions and our confidence in Europe's growth outlook, supported by the cans low penetration rate, its attractive sustainability credentials and the previously mentioned innovation trends.

Beverage packaging scanner data across each of the markets in which we operate, highlighted several percentage points of share gain in 2025 for the beverage can versus glass in the beer category versus plastic in carbonated software. In the Americas, revenue in the fourth quarter increased by 24% to $807 million, which reflected the pass-through of higher input costs to customers, including the impact of the higher Midwest premium in North America as well as shipments growth. Americas adjusted EBITDA for the quarter was ahead of expectations with a 6% decrease versus the prior year to $102 million due to higher operations and overhead costs and lower input cost recovery, partly offset by favorable volume mix effects.

In North America, shipments increased by 9% for the quarter despite the company having to navigate some supply chain disruption. For the full year, AMP shipments grew by 6%. We AMP's strong growth and outperformance in the year versus the market reflects our favorable customer and category portfolio mix weighted towards non-alcoholic beverages and in particular, our exposure to the high-growth energy category that represented 16% of our North American sales last year. Sparkling water is another notable category that performed well, which represented 11% of our portfolio. By contrast, beer represented only a mid-single-digit percentage of our portfolio.

Looking into 2026, we expect industry growth of a low single-digit percentage. As previously indicated on our third quarter results conference call, we expect some softness in North America for AMP following some contract resets largely related to specific footprint situations. We anticipate 2026 being a transition year with a small volume decline before we expect to return to growth in 2027, at least in line with the industry on the back of additional contracted filling locations and our attractive portfolio. Retail scanner data so far this year is encouraging for continued beverage can industry growth into 2026. We would note that during the first quarter, some of AMPs in our customers' operations were negatively impacted by extreme adverse weather which we assume we recover during the quarter. We also continue to manage a tight metal supply situation after disruptions in 1 of our major suppliers rolling mill facilities. This is causing operational challenges, and we incurred additional costs in Q4, which we anticipate will persist through the first half of the year, ahead of the restoration of capacity as well as the ramp-up of new domestic supply.

In Brazil, fourth quarter beverage can shipments decreased by 4%, which represented a sequential improvement versus the third quarter but lagged the improvement in industry performance due to customer mix. Full year shipments declined by 2%, in line with a weak overall industry volume, reflecting consumer weakness in adverse weather during the winter months. Encouraging the industry data confirms that the beverage can gained an additional couple of percentage points of share in the beer packaging mix in 2025, in line with long-term trends. Looking into 2026, we expect industry growth of a low to mid-single-digit percentage and for AMP's volumes to broadly track the market. I'll hand over now to Stefan to talk you through our financial position for the quarter before finishing with some concluding remarks.

Thanks, Oliver. We ended the year with a robust liquidity position of $964 million and net leverage of 5.3x net debt to adjusted EBITDA. The expected increase in the net leverage metric reflects the impact of a successful EUR 1.3 billion equivalent green bond financing, which we closed in December. As a reminder, the proceeds of the financing were used to repay EUR 600 million of notes due in June 2027. And repaid the senior secured term loan of EUR 269 million and to redeem the preferred shares of EUR 250 million. The headline leverage metric has increased as a result of the financing and the redemption of the preferred shares with debt. This refinancing has provided several benefits, including the lengthening of AMP's debt maturities with no bonds now maturing before September 2028.

Simplification of the capital structure and an annual cash savings of approximately $10 million as the higher annual cash interest is more than offset by savings related to the previous annual preferred share dividend payments of approximately $25 million. We generated adjusted free cash flow for 2025 of $172 million, which was ahead of our guidance. During the quarter, both S&P and Fitch took positive credit rating action, which reflects AMP's strong operation and financial performance. In terms of 2026, we approximately expect the following for the various components of free cash flow. Total CapEx of slightly above $200 million, including growth investments, lease principal repayments of approximately $150 million; cash interest of circa $220 million. Cash tax of a little bit over $30 million and a smaller outflow in working capital. Finally, today, we have announced our unchanged quarterly ordinary dividend of $0.10 per share. With that, I'll hand it back to Oliver.

Thanks, Stefan. Just before moving to take your questions, I'll just recap on AMP's performance and some key messages. So firstly, adjusted EBITDA of $166 million in the fourth quarter exceeded our guidance range of $147 million to $162 million, with both segments performing ahead of expectations. Secondly, full year adjusted EBITDA of $739 million was significantly ahead of our initially projected $675 million to $695 million range and this was largely driven by strong volume performance and favorable customer mix in North America as well as favorable currency movements. And finally, the beverage can continues to outperform other substrates in our customers' packaging mix, supporting our growth.

For 2026, we are guiding adjusted EBITDA in a range of $750 million to $775 million. Adjusted EBITDA growth is expected to be driven by operational efficiencies and cost savings shipments growth in line with industry growth in Europe and Brazil and improved category mix. We view 2026 as a transition year in North America for volumes, ahead of an expected return to growth at least in line with the industry in 2027. In terms of guidance for the first quarter, adjusted EBITDA is expected to be in the range of $160 million to $170 million ahead of the prior year quarter of $160 million on a constant currency basis. Having made these opening remarks and now proceed to take any questions that you may have.

[Operator Instructions] We'll take our first question from Matt Roberts with Raymond James.

Oliver and Stefan, the first question, maybe on the 1Q guide, can you just talk about some of the volume trends by region that underpin that what you've seen in the first 2 months of the year any impacts you've seen from weather in the U.S. on your regard to facility outages or natural gas effects or volume impacts at customers? .

Sure.Matt, -- so yes, we take it region by region. I think North America has had a very good start to the year in our portfolio with some key customers, but it is true that January suffered, particularly in the last week with the weather effects in the south of the country where we saw some of our facilities and some of our customer facilities unable to ship products. So we did see some reduction in what we expected for January. February and March are looking like they're tracking in line or even slightly better than we are, as we mentioned, navigating this quite challenging metal supply chain situation. So I think we're in line and scanner trends look good.

The energy category is still very strong, and we're certainly seeing that in our portfolio. So that's obviously very beneficial for mix. Again, within our profit performance. Brazil, the market started in good shape I think 2% to 3% in January for the industry, that followed a 4% Q4 performance for the industry. So a good recovery actually as we came into the summer season after the weakness in the middle of last year. And we're currently tracking ahead of that with some good customer mix. So yes, we're very positive about Q1 performance in Brazil, and then Europe is exactly where we saw it. So I think the industry is growing broadly where we saw it. We're in line with our forecast.

We had a very strong Q1 last year. So we see our growth being a bit second half weighted in Europe this year. But again, we see the industry exactly where we expected it. And if you take that all in the round, I think, some very positive trends. We see no negative signs at the higher aluminum costs at the moment, which I know has been commented on quite broadly, but we certainly don't see that in our numbers or in the industry numbers at the moment. So all very positive from our point of view.

I appreciate that. Maybe on the capacity, as we discussed in Europe, but it seems to expand, I think we previously discussed that last call, it seemed like U.K. might be incremental, but any additional color you could provide on the timing of when that capacity is expected to start to ramp? Any start-up costs and the related CapEx expected in '26 or '27 of the timing there. And in Europe more broadly, I mean some others seem to be adding in similar regions. So it seems like demand is still humming along there, but how does is all the capacity to inform your supply-demand model there? .

Yes. Look, it feels very tight. The market at the moment. I think we think it's running potentially even in the high 90s utilization as an industry. You've seen our peers' volume performance at the back end of last year and for the full year, and we also had a decent year despite some weakness in our beer portfolio. So I think that the industry backdrop is highly constructive and you're talking about the market now of nearly 100 billion cans. So if it grows 3% to 5% it's a couple of can plants a year that are needed. And we certainly see shortages on specific sizes right across the continent and in certain regional pockets. So I think the backdrop is very constructive. We have a strong position. We particularly have strong positions in those markets, and we have customers who are looking to grow and who need our support.

So I think it's broadly in line with our share position that we're adding this kind of capacity with a line in each of those facilities. It's over the next 2 years or so, some possibly into the third year with the CapEx spread across that period. And I think we signaled in the moderate increase to our overall capital guide for this year. So you can think of that as around 10% as an increase. So not, not very material, to be honest, as we already have some under growth CapEx in this year. So yes, we regard these as very good projects in a very constructive market environment.

We'll go next to Josh Spector with UBS.

It's [indiscernible] in for Josh. That you reported some patio pick up in Brazil there. What are you thinking around World Cup for this year? And what kind of pickup, if any? And when exactly you think of my head. .

Yes. I mean, I think once we're in a low to mid guide, then I think we see that as broadly incorporating the World Cup effect and maybe it pushes more towards the mid. Obviously, Brazil can move very fast across the growth trajectory. We've seen it over the last few years. And so obviously, Brazil go deep into the tournament and the weather is reasonable, then we could see some pickup. But I think we're comfortable with the sort of 3% to 5% guide for the market and that we're in line with that. But I think that should be constructive in -- obviously, in the winter season, which is helpful. So we should see some good comps versus what was a pretty weak winter season last year. And then when do you get -- you get it in in the months running into the tournaments. Obviously, there'll be some inventory build and then we'd expect to see some sell-through as the tournament goes. So you'd expect to see it in Q2 pretty much.

Right. Okay. And then you also, in North America, I think you did have a comment in the press release about lower input cost recovery in North America. What is that exactly? Is it stuff besides aluminum and tariffs and things things that are an immediate pass-through -- like is it a PPI sort of index or for once a year half-through and any outlook on that...

Yes. So I think we referred to some supply chain challenges and operational challenges relative to the metal situation. So that then triggers some operational actions, we need to do shorter runs. We need to move volume within our manufacturing network, some of the freight lanes get suboptimal. So it's a little bit of nonrecovered trade and a little bit of nonrecovered costs associated with those. So let's say, a knock-on effect of those supply chain metal disruption called an operation disruption. .

So it does sound like that might pose for the first half of this year. Is that right? .

yes, I think that's a fair assumptions.

Next to Stephen Dias with Morgan Stanley. .

Maybe just piggybacking off that last question. At the same time, you also noted in the release some operational efficiencies and other savings that you expect in 2026. Can you just give some details on the potential sizing and benefits and whether these improvements are in any specific regions? Or if these improvements are just maybe some of these operational challenges kind of just falling off? .

No. I think that every year, we obviously make operational improvements and savings right across our network or regions. So that are the normal things, lightweighting the can, improving -- reducing spoilage implementing our production system across our plants to drive best practice and mean lean activity. So I think we're just citing the fact that those savings are being delivered. We have set some challenging targets this year, but we expect to be able to deliver them and obviously, that offset some of the slight volume weakness we have in the North American business. So I think it's more a general comment right across the business.

Okay. Great. That's -- that's helpful. And then it's been a few months since the Ardagh Group restructuring. Do you have any updates for us there? I know in the release, you said no changes to capital allocation, but any potential changes in strategy just given that?

No, absolutely not. I think AMD has got a good strategy. It's been working. You've seen the delivery in 2024 and '25, and the guidance we're giving for 26 and -- you've seen our outperformance in various markets and the drop through into our profitability last year relative to our volume growth. So I certainly don't think anyone wants us to change strategy. And at the minute, as we've signal in our capital allocation policy not changing either. So I don't think there's anything to see here in terms of changes since the restructuring transaction.

We'll go next to Anthony Pettinari with Citi.

This is actually Bryan Burgmeier filling in for Anthony. I appreciate the detail on Slide 8 on the share gain in Europe that the can has realized over the last year. Are you able to maybe provide a sense of how penetrated the can is in Europe and maybe beer and soft drinks relative to North America, just as we kind of think about kind of room to run for future share gain in Europe?

Yes, much less penetrated, right? So I mean I think that's 1 of the arguments where there is a long way to run. I think we think the can is 40%, 50% penetrated in North America. U.K. is the most penetrated European market sort of approaches those levels a bit less. But Germany is 1/4 of that. So we've got a long way to run. The German situation was very specific with a very poorly designed deposit scheme implemented in 2003 with no return path for the can . Can essentially delisted out of retail overnight and has been on a long recovery ever since. And the German can market can grow 10% in the year. And for example, last year, there was a 20% growth number for German soft drinks in Canada. So pretty dramatic numbers for staple packaging product.

So yes, and we see the U.K., very strong last year. showing many of the similar trends as the U.S. with a lot of innovation going into the can and pretty strong antiplastic sentiment. And obviously, glasses had difficulties for the last few years with the high energy costs. And then there can also really demonstrating a lot of sustainability credentials with very high recycling rates, high recycled content and a pathway to a significant decarbonization through the measures the industry is taking right through the value chain. So I think you add all those things together and you get a strong set of prospects and the penetration rate just it illustrates 1 of them. And then I think if you look at the growth rates we and our peers have posted for the last few years and the projections we're all giving is clearly a very constructive backdrop, the European car market.

Yes. Got it. Got it. Appreciate that. And then just last question for me, and I can turn it over. I'm not sure if we're expecting any more kind of incremental headwinds in Europe from the aluminum conversion costs or maybe any PPI pass-throughs? And if we are, can you maybe provide a little detail if those are going to be better or worse on a year-over-year basis compared to last year. .

Yes. No, I think we have proved that. I think that is predominantly a 2025 issue, then we don't expect a material headwind in that regard.

We'll go next to Mike Roxland with Truist Securities. .

Yes. Stefan, Oliver. Oliver, you mentioned a couple of times this is a transition year for the company, especially in North America. -- seems like you lost a little bit of share peers, but then you're getting some new filling locations in 2027. So the thing you can comment on this forum, what end markets are those new filling locations occurring in? Are they with existing customers? Are they with new customers -- and how -- can you give us a sense also how your contract did roughly for 2028? .

Sure. Yes, Mike. So look, I think those filling locations are broadly aligned with our portfolio, so weighted more towards the soft drink side of the house. like our portfolio. So those are principally those. There is some in there, but then in specialty sizes, which I think is obviously where we want to be. and yes, entirely with existing customers. So these are very long-term relationships where the quality of the customer service and the relationship is driving those gains. So -- and I think there's only a transition here really in North America. I think Europe and Brazil pretty straightforwardly, just tracking alongside the market. .

Got it. And then just for 2028, any early read just in terms of how you're seeing for volumes? .

Yes. So I think that there have been we and our peers have commented on this, but we went through sort of significant contractual events in some of the big customers in '24, '25. So we're very heavily contracted now through the next few years into the end of the decade, and I think that's been commented on in the industry.

Got it. That's very helpful. And then just 1 quick one. last quarter, and you may have mentioned this before and you did, I apologize. But last quarter, you mentioned being tight in certain specialty sizes in Europe caused us some growth last year. You started doing some -- your intent to do some projects 4Q into 1Q that give you additional capabilities for specialty. So when do those projects understand right now? And do you know that but where are the projects stand and can you remind us what capital is involved in doing that? And are you in a position where you're not going to lose additional share because you have the functionality now in specialty to meet your customer needs. .

Yes, good question. So yes, the project is in our plant in France has gone very well, ramping up again ahead of expectations, giving us the specialty capability and different specialty capability and more regional -- better regional alignment of supplies to also reduce freight reduced out of pattern freight. So I think that's going well. And yes, we'd be we'd be hopeful that, that positions us well for the coming season. It's clear. Those trends are continuing in Europe, a bit like North America with the specialty sizes growing. So we think, yes, that puts us in a better position for this year, for sure.

We'll go next to Viswanathan with RBC Capital Markets. .

Congrats on a strong and an outlook for '26. So I guess just on the outlook. So it sounds like there are some customer mix issues that would maybe push you to the lower end versus industry growth. And -- and also, would you highlight anything else there? Is -- are you pretty much sold out as well as maybe some of your competitors are? And then I guess also -- I'll start with that. .

Yes. No, if we've managed to convey that message, that's a misunderstanding. We definitely have no mix issues. We have mix gains, I think it's -- so it's only North America, but I think we signaled it at the Q3 call that there were some contract resets that meant we have an overall volume reduction, actually not really in specialty sizes, mostly largely linked to some footprint changes in the market, that's footprint on the side of our customers who rationalizing filling locations but also footprint as a result of new can plants that were built post COVID and also footprint from contracts that we had entered into in the expectation of building additional capacity that when the growth came off in 2022, '23, we didn't build.

So when you added all that up, there were some logical resets in terms of facilities that were closer to the new customer footprint. So that was an overall volume effect only North America, nothing to do with Europe or Brazil. And I think what we were trying to signal in the remarks and in the release is that we see positive mix effects in '26 to offset some of that. .

Okay. And then -- just a question on the metal side. So obviously, the Midwest premium is up significantly. Do you see that as potentially impacting can demand? I know there's been some substrate shift away from other substrates, including glass, as you noted. But -- is there -- are we approaching maybe a ceiling on that, just given some of this increase in the Midwest premium? And do you see that kind of changing or maybe even reversing at any time in the future given volatile tariff dynamics?

Yes. Look, we certainly hope it changes because it's very extreme and it doesn't make any sense in terms of obviously the aluminum supply chain. But -- so yes, we certainly hope that it comes back into normal ranges at some point in the future. Yes, I mean, I think that I mentioned it at the top of the call. We're not seeing any change at this point. And obviously, customers and ourselves have hedges. So we don't know exactly when people entered in edges and when they roll off. So we wouldn't be able to sensibly rule out any impact from this. But at the minute, we don't see it.

And again, there are some strong trends that are driving the growth in terms of the way innovation has gone into the can the sort of retail shelf sets that are being put in place to accommodate that. The consumer reaction to cans versus plastics, some of the energy cost issues that we see in the overall cost issues we see on the glass side. So -- so I think there's some big trends behind the growth of the can as well. And obviously, there may be some headwinds at some point from the high aluminium cost, but we're not seeing it in the data. We're not seeing it in the market data, and we're not seeing it in our sales at this point.

And if I can just ask on Europe. You mentioned growing your capacity in the U.K. and Spain. What's kind of the time line? And what kind of impact should we expect that, that could contribute to your overall growth? .

Yes. I mean we said, look, over the next few years, we'll like we always do. Those projects tend to a couple of calendar years, and so does the CapEx -- and look, we're very tight. So all we're really doing there is giving ourselves the capability to grow with the market or maybe a ticket. But broadly with the market. So again, I think you've heard pretty consistent commentary that the European market broadly is in a 3% to 4%. I think some of our peers would say 3% to 5%. It depends a bit on geographic mix, category mix, -- but if you're in that sort of range, and we expect to be, then we need to be adding this kind of capacity on a reasonably regular basis.

[Operator Instructions] We'll go next to Gabe with Wells Fargo Securities. .

Stefan good. I may have misheard you all, and I apologize. Did you mention Q4 EBITDA in Europe was, in fact, better than planned on metal timing effects. And again, if I miss you, I apologize, does any of that carry over into the first half?

And then the supply disruptions, just to be clear, it's basically isolated to some of the rolling mill issues that we're having. And if you're willing to quantify maybe the hit that you had in Q4 '25, what you're embedding in for the first half by our math, it would be maybe $5 million to $8 million in the first half of '26? And then a couple of follow-ons.

Yes. I mean, Gabe, I'll let Stefan comment too, but I think that's reasonable and the lower end of that range, just sort of broadly where we saw Q4. I think -- so that's fair. I think, and obviously, we're giving guidance, including these sorts of thinking. Yes. And then Europe, I think it was an aspect of Q4, again, I'll let Stefan comment on that 1 on the metal timing. .

Yes, I think that's exactly right. We benefited from it, but it was not the entire EBITDA growth, and that was a result of metal timing.

And I don't think there's a particular impact in H1 this year, which was the other game question. .

Yes. .

Okay. So no carryover effect from metal timing in Europe that was just isolated Q4?

Yes, there's no material expectation .

Yes. I mean it does depend, again, as you know, a bit on what happens with LME and Midwest. So obviously, we can't be absolutely certain because it depends a bit what happens, but there's nothing material in the plan. .

Okay. And then I guess maybe to put a finer point, I mean, it sounds like we're talking about to additional lines, 1 in each plant in the U.K., Spain and traditional yield out of those is still something $1 billion to $1.2 billion units. .

Yes. I think -- I mean, we may start slightly shy of that as first phase. But again, you know the lines are pretty modular now, so you can go up in a couple of steps from slightly below $1 billion. But yes, these are the kinds of ranges we'll be in.

Okay. And then 1 clarification or a point on cash flow, Stefan, I think you mentioned lease principal payments 150 this year. I think that's up pretty materially from 111 in 2025. Is that sort of at a steady state at this point? Or does that go up again maybe in '26, '27? .

So no, to be clear, I said 115 , 115. So apologies if that wasn't clear, but it's 115 million. So it's EUR 5 million higher than what we've seen in 2025. And that should be a number that should be relatively steady going forward. .

At this time, there are no further questions. I will now turn the call back to Oliver Graham for additional or closing remarks.

Thanks, Jennifer. so just to recap in 2025, we reported global shipments growth of over 3% and adjusted EBITDA growth of 10%. We -- we finished the year strongly as fourth quarter adjusted EBITDA exceeded our guidance with both segments performing ahead of our expectations. We're looking forward to a good performance again in 2026 and are guiding for adjusted EBITDA in the range of EUR 750 million to $775 million. Thanks for your time today, and we look forward to talking to you again at our Q1 results.

This does conclude today's conference. We thank you for your participation.

Well, thanks, everyone, for joining. Anthony Pettinari, packaging analyst here at Citi. And we're very pleased to have from Ardagh Metal Packaging, Oliver Graham, CEO; and Stefan Schellinger, CFO. Oliver, Stefan, thanks for joining. We'll keep it very interactive.

And maybe I'll just -- maybe we could just start with Americas and North America. And can you discuss the demand environment in North America, the factors that have maybe driven pretty good mid-single-digit growth year-to-date and expectations for '26?

Sure. Yes. No, as you say, I think we've had a good year in North America, a little bit ahead of expectations, driven particularly by the energy category, where we have a strong portfolio. We have both traditional energy players, but also new players, growing very well this year. New players building international distribution, and that certainly served us well. I think in the first half, we saw that the carbonated soft drinks, the CSD players were also getting decent growth, promoting strongly, a bit less in the second half. So I think we see that moderating to more probably where we'd have expected it for the year.

Other categories like sparkling water has also been in good growth, which again is good from our perspective with the shape of our portfolio. And then we're not very exposed to mass beer where there's clearly been some weakness. And then in terms of '26, yes, we called the market at sort of low singles. Clearly, there could be some headwinds if the tariff situation persists and Midwest premium remains high. Players will have been hedged this year. Some of those hedges will unwind and that could be a mild headwind. We don't see as a huge effect at retail, but it can play through the supply chain. So we're somewhat cautious, but still see it as a growth of low singles. And then we signaled at our Q3 that we expect it to be a bit softer than the market because of some contract resets in '24, '25.

Right. So '26 maybe a transition year is how you think?

Yes, that's exactly how we described it because I think we've had 3, 4 years of very good growth, typically ahead of the market. We see growth coming back in '27. So yes, exactly. I think '26, we're taking a bit of a breath.

And is there like a percentage of contracts next year that is up for a normal level or 20% or 30%.

It's actually a relatively low percentage now because we've been through these big resets that were the -- if you like, the follow-on from the COVID period where we had longer contracts extending into the middle of the decade. So yes, our North American business is now highly -- I mean, contracted, highly agreed, highly signed off contracts sometimes take a bit more time to actually get signed, but highly commercially resolved.

Great. And you don't have exposure really to mass beer, but others do. I don't know if you can talk generally about maybe risk or competitive dynamics with -- if declines in beer are more secular than cyclical, does that show up somewhere else or put pressure on pricing? Or like how could you see that play out?

I mean we've seen some of that in the market just because, obviously, domestic beer has been under pressure. We had the issue with Bud Light, which obviously was a domestic producer, the growth of imported cans. So to be honest, we've been living with that situation for a while. I don't see any particularly elevated risk. We've just been through these resets. They're mostly resolved. So I don't see any particularly elevated risk for the next year or 2. I think, as I say, we've been living with the situation for a while. And I do think the can is going to continue to be highly competitive in the space. So just depending on where the space grows, I still think the can will take share in that space. So at the minute, yes, we don't have any particular scenario planning around that.

Great. And in terms of substrate substitution and the strength that you've seen in North America, I don't know if you could call out 1 or 2 categories or customer types where you're taking share from glass or plastic or...

I mean I think wherever we look in our 3 regions, the can is taking share from glass at the moment, either 2-way or one way with elevated cost of glass, some of the sustainability headwinds, 2-way, obviously, long-term secular shift into one-way packaging in Brazil. So I think that has been a phenomenon. We can see that and glass players have commented pretty openly, obviously, about that as well. And most of those structural factors, I think, remain in place looking forward, maybe moderating a little bit, but still fundamentally in place. And then I think if you take it on the plastic side, again, we see ourselves generally gaining share in Europe and North America in soft drinks categories from plastic, which is, again, sustainability concerns with our major customers and with consumers. So again, at the minute, we see that persisting.

Right. And in terms of your North American footprint, operating rates sort of relative...

We felt pretty tight in the season, to be honest this year. Obviously, we had more growth than we anticipated in -- particularly in sleek. So some of the specialty sizes back off this energy growth that we were enjoying. So we felt pretty tight. We had to move the network around a lot. Fortunately, we built a lot more flexibility into the network in the last few years. So we were able to do that between different sizes at different points in the season. But we even left probably a point or 2 of growth on the table in Q3 on 12 out standard, we think. So I'd say operating rates, I'd agree with the other commentary I've seen that sort of low 90s is probably where the industry is at, which is a reasonable position to be in, I think.

Does World Cup matter or where does it matter?

Yes, hopefully matters in Brazil. And that is historically where it has mattered the most. Obviously, a lot of football focus. You've got the beer players tend to sponsor a lot of football brand, teams and the event. So there is a historical correlation, which obviously, we're looking forward to. We think there could be other fiscal stimulus next year in Brazil as well. So that underpins our hope for some recovery in Brazil after what's been a tough year for the beer market.

And it's a good segue to Brazil. I mean it's always a little bit volatile, but this year, maybe more so. I mean was that -- can you talk about winter, consumer pressure, like what do you think drove that? And where are we now?

Yes. I think it's improved a bit going into Q4. We certainly saw that in October, and we're going into the summer period. I wouldn't overstate it. I think it still feels a bit fragile relative to our expectations. Clearly, it was a very cold winter, and we saw that in the Q3 numbers. And clearly, there is some degree of consumer pressure, I think, on spending. So -- and all substrates suffered. Normally, we're gaining at the expense of 2-way. So yes, we'd hope next year with the World Cup with some fiscal stimulus that is reasonably anticipated that we get -- and I think with the reaction of the brewers because I think they won't like this sort of performance. So I expect to see some reaction. Yes, I would expect it to go back into more normal levels of growth, I think.

And you are 95%, 90% beer in Brazil?

Yes. Yes. We're almost exclusively beer.

Maybe segueing to Europe. Can you talk about -- I think you had low single-digit growth year-to-date and then expectations for '26?

Yes. So I think Europe still grows well. You can see that in our numbers, in the peer numbers. So these long-term trends that are supporting Europe between relatively low per capita consumption in certain markets like Germany, the sustainability trends again, where Europe quite active from a regulatory perspective, so quite a bit that customers there worry about and innovation, again, going into the can, sort of some consumer back pressure on plastic and lack of recycling infrastructure on plastics. So we see those long-term structural trends still in place and going into '26.

We were a bit weaker because of -- there we are sort of 50-50 between alc and non-alc. So recently decent beer exposure. And so that definitely -- we saw a weaker second half of the year than the first half. Again, we'd expect the brewers to respond. I think they're talking about it. They're talking about having got a bit out of line on affordability, pushing price beyond CPI, and I think they'll address some of that. So we'd expect beer to recover a bit. We're not banking on too much. And then the soft drinks and energy space, again, very strong. Also lots of sort of innovative categories like wine, ready-to-drink teas, coffee is also good in Europe this year. So -- and again, we're sort of Western Europe, Central Europe, U.K. focused relative to some of our peers. So that -- those markets probably growing well, but some of them not as strongly as some of the Southern and Southeastern markets.

Right. Right. And what does glass substitution look like in Europe? And beer right now? Is it something that's...

Yes. If you look at the last couple of years, every quarter, we get the data, the can is outgrowing glass in beer. So I mean it's very meaningful, I think. And that's why the glass beers are suffering in Europe. And that -- obviously, the energy shock of the Russia-Ukraine war has been very meaningful, adding more cost into glass than in cans. And yes, it's persisting at the minute. There's still some structural higher energy costs out there. We don't quite know how that will develop, but it is still present.

And can you talk a little bit more about costs in Europe? You had kind of a little conversion cost issues this year. I don't know if there's anything you point out of electricity.

Yes, it was less the energy side. I mean I think we're broadly in line and energy is sort of generally coming down in our portfolio as the situation stabilize. But -- and in cans is less of a -- now that we're back in more normal ranges, it's less of an issue. No, it was more on the aluminum conversion that we signaled that we had some headwinds. It was more delayed pass-through, if you like, of the energy shock, which obviously does affect aluminum producers, which we've managed to hold off, but it came through particularly this year. And I think one of our peers has called it out as well. And we don't see that same headwind into '26. So we think that situation is normalizing as we go forward.

And in terms of -- you talked about maybe low 90s utilization in North America. Is that decent for Europe or...

No, we'd be ahead of that. So I think in the season, we were certainly mid-plus. So obviously, as the beer market weakened a bit in the second half, that took a bit of pressure out of the system. But certain sizes, certain geographies are very tight in the season at the moment. So there is a need for more capacity to deal with the growth in Europe, and we see capacity coming to the market. We've still got space to grow because we can -- we're still ramping a couple of facilities that we invested in. So there's still room for those to perform better. There's general operational improvements. So we don't need capacity in the next, let's say, at least the next year. But then I think we've signaled we will also be making our share of investments.

So the initial view for '26 for North America, low single-digit volumes.

We said that to the market. And then we said we'd be softer than the market. And then we're not specifying and we won't specify we'll guide at our full year because we're still working through a few situations.

Right. And then in Europe, the 3...

We sort of said we'd be in line. So we said the market, we think, is low 3% plus, 3% to 4%, and we expect to be in line. In Brazil, we said it hopefully goes back to sort of the 3% to 5% and again, see ourselves roughly in line.

And then I don't know if you've disclosed the facilities that you're debottlenecking or you're ramping? Like what is the time line there? And where is the capacity?

Yes. It really follows where we made the investments. So in France and Germany, we've made some investments. And then there's a couple of other facilities where we just see operational improvement. So yes, it's a little bit across the network that we think we can just increase capacity over 2026.

We talked about the tariffs and the kind of the cost of the can. When you think about the competitiveness of can post Liberation Day, can you give us a sense of sort of the -- with the premium, what metal costs are, maybe what cost to the buyer of the can is year-over-year or what it could be? And could that move the needle versus glass or plastic in people making a substitution decision?

Yes. I think the calculation that we shared and everybody is sharing is now we're in a sort of $0.02 to $0.03 on the total retail price of the can. That obviously, therefore, is a higher proportion of the conversion cost that we're selling on to customers. So I don't see that personally affecting the glass can substitution because I think those costs are structurally very different. I think at the margin, you could say there could be some play on PET. But again, it's not that the situations are completely fungible. There's lots of other considerations of filling line capacity of marketing campaigns of shelf space of sustainability. So I think the margin may be -- and that's why we were somewhat cautious in our remarks at Q3 that you could get some headwind on the can, but I don't think it's of a major order.

You talked about sort of competitive intensity in North America. And I'm wondering if you could talk about Europe and Brazil broadly.

I think Europe feels to me like it's always felt, which is there is good healthy levels of competition chasing growth and investing. It can mean that pricing is always competitive and that you need to do what we've always done as an industry, which is lower your costs to maintain margins and invest to grow. So there are some spots where it's a bit more competitive than others and certain players in the market. But I don't think it's anything out of what I'd call the ordinary course for the can industry and partly what's kept the can industry very competitive and healthy.

And then Brazil, it's a little bit looser for sure, capacity-wise. So we do see some pressure in certain situations on volumes. But again, I think everything that the can industry has always done to then address its cost base and move forward and keep margins in a decent place, which we need to do because we need to invest for our customers. So I think it works for everyone if that dynamic is maintained.

We've been talking to packaging CEOs all day about kind of volume performance in '25 and volume outlook for '26, and they're not always cheerful discussions. But it seems like bev cans have really bucked the trend. I mean, holistically, as you think about the last few years and maybe '26, like obviously, there's substitution, but I'm just curious how you think the bev can kind of fits with a consumer that's dealing with a lot of affordability issues.

Yes. I think there's been a whole series of tailwinds, right? I think we're in categories that are in good growth like energy and where there's a lot of innovation like cocktails. I think we have become the package of choice in North America for innovation, and that's partly sustainability reasons, partly branding, attractiveness. So I think we see that as a tailwind. I think that we are working for our customers and consumers from a sustainability point of view. So we're obviously both highly recyclable, but also actually recycled and actually brought back into the chain, it's very circular.

And that also lowers carbon. And we're on a very powerful carbon reduction program that's supporting our science-based targets, but also our customers' science-based targets, which are generally set for 2030. And those haven't gone away whatever we hear in the world in general. So that combination, the can has always been very efficient through the supply chain. It's always been good for branding and product quality. But I think adding the strong innovation in the can and the sustainability and then some headwinds for our competing substrates, particularly obviously glass has suffered with some of the cost headwinds have all played in the favor of the can. And I think that what that means is the consumer also gets more and more used to the can in more occasions, in more settings. And as they do, I think it means it opens up more growth.

And your specialty mix is 60%, 65%...

Yes. So we -- the way the industry generally defines it, we're pretty strong in specialty. And particularly, we invested in, obviously, a lot of sleek in North America initially on the back of the hard seltzer growth, but that capacity has proved extremely powerful for the trends that are going on in the market with innovation and again, energy drinks. So that's been a really good underpin for the business. But it's also true in Europe, we have good sleek, slim capacity. And in Brazil, we've also made our lines very flexible for different sizes. So yes, we sit in a good place on specialty capacity.

Can you talk about you don't need new capacity for the next year or so. But as you look beyond that, can you just talk about optimal leverage, cash generation, maybe multiyear CapEx to the extent that you can, like how do you balance the growing market with.

Sure. I might pass that one to Stefan.

Yes. So starting with sort of the CapEx element sort of for this year, we guided towards around [indiscernible] growth CapEx. Looking a little bit ahead, I mean, I think we talked about sort of potential investments in Europe in terms of expansions, potentially align. So this is something I think we are considering in the near to midterm. I think sort of overall, I think what we have line of sight of in terms of our investment projects, I think this will be sort of within our current free cash flow generation. So I don't think [indiscernible] change. And if you think about capital allocation going forward, obviously, there's the dividend, which is a Board decision [indiscernible] changing in the near term. So I think it's really about organic investment, the dividend allocation for what is foreseeable.

And the optimal leverage long term, right?

Look, we just recently refinanced our 2026 maturities and [indiscernible] and redeemed our preference shares. So we are now a little bit over 5x. We hope to delever over time as we grow EBITDA, I think we are comfortable operating at that leverage. We haven't put out a specific leverage target, but I think that probably gives you a sort of sense of where we are on leverage right now.

Can you talk about the green bond refinancing that...

Yes. So green bond refinancing, all our bonds are sort of under a green sort of finance framework. I mean the element here goes back to what Ollie referenced earlier is sort of the recyclability of aluminum and sort of us using in our operations, recycled aluminum, which has a significant better carbon footprint than original sort of primary aluminum, and that is sort of on our green framework, that green element that we have as a business.

And then we've got a question in terms of the group recapitalization, like how that impacts you or does not impact you? Like how should we think about that?

Yes. I think it's a very positive step, right, because it eliminates uncertainty. I think it was a process that took a while. And I think now it's solved and clear. And I think that's also from an A&P perspective, clearly positive.

Oliver, from your perspective, is there any change or...

No. I mean it's very early days. So obviously, there's a new Executive Chairman, Mark Porto at the group level. He's joined the AMP Board as well with Paul Coulson leaving. But we still have the same Chair of the AMP Board, and we have 5 nonexecs. So from our point of view, governance has remained in the same place. We don't have any particular change in direction in terms of what we're up to. And clearly, what management is doing is driving performance and improving the business. And then we'll see over the next period what the new shareholders want to do at the group level.

And assuming you continue to have good growth and cash generation, are there -- do you want to grow with customers? Are there specific capabilities or geographies that maybe you're not in? Or just broadly, how do you think?

Yes. I think the first priority, as Stefan said, was to make sure we capture our share of European growth, which we can do in under the roof investment. So we've got 2 projects there that we think we'll do. And that will make sure we stay with our customers and with their growth in key geographies like Spain, the U.K. and capture, as I say, our share of growth within our current capital framework. I think if you look longer term, obviously, there is another step to take in North America. We need to think about that. In Brazil, at the moment, we have capacity, but it's more in the Northeast. So there will be some questions around the South at some point, but that's probably at least a couple of years away. And then future geographies, other geographies, I think we'd consider, but I think for that, we need probably a bit more direction on where the company is going. So that's probably not immediate.

Got it. Got it. Any questions from the room? Oliver, Stefan, thank you.

Thanks, Anthony. Thank you, everyone.

Welcome to the Ardagh Metal Packaging S.A. Quarterly Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Stephen Lyons. Please go ahead.

Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's Third Quarter 2025 Earnings Call, which follows the earlier publication of AMP's earnings release for the third quarter. I'm joined today by Oliver Graham, AMP's Chief Executive Officer; and Stefan Schellinger, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook.

AMP's earnings release and related materials for the third quarter can be found on AMP's website at ir.ardaghmetalpackaging.com. Remarks today will include certain forward-looking statements and include use of non-IFRS financial measures. Actual results could vary materially from such statements. Please review the details of AMP's forward-looking statements disclaimer and reconciliation of non-IFRS financial measures to IFRS financial measures in AMP's earnings release. I will now turn the call over to Oliver Graham.

Thanks, Stephen. We delivered a strong performance in the third quarter with adjusted EBITDA growth of 6% versus the prior year quarter or 3% on a constant currency basis. Our adjusted EBITDA result of $208 million was towards the upper end of our guidance with both segments performing broadly in line with our expectations. Adjusted EBITDA growth in the quarter was supported by shipments growth in Europe and North America, lower operational and overhead costs as well as favorable category mix. Although global volumes were below our expectations in the quarter, on a year-to-date basis, they are up over 3% versus the prior year.

The beverage can continue to benefit from innovation and share gains in our customers' packaging mix, underpinning our growth expectations. We continue to progress our sustainability agenda and our recently published sustainability report highlights strong progress towards our targets in 2024, including a 10% annual reduction in Scope 1 and 2 emissions and a 14% reduction in Scope 3 emissions with Scope 3 emissions now 25% below the 2020 baseline. We anticipate further good progress in 2025 and beyond. Turning to AMP's Q3 results by segment. In Europe, third quarter revenue increased by 9% to $625 million or by 3% on a constant currency basis compared with the same period in 2024, principally due to volume growth.

Shipments grew by 2% for the quarter, driven by growth in energy drinks and faster-growing categories such as ciders, ready-to-drink teas and coffees, wines and water. This growth offset continued weakness in the beer category, which represents over 40% of our European portfolio. Third quarter adjusted EBITDA in Europe increased by 4% to $82 million, in line with expectation. On a constant currency basis, adjusted EBITDA reduced by 4% due to input cost recovery headwinds, partly offset by the contribution from higher volumes and favorable category mix. Given the continued softness in the beer category, we now expect full year shipment growth for Europe of low single-digit percentage for full year 2025.

As we look into 2026, we continue to expect the market to grow around 3% to 4% and for our volumes to broadly match that growth. In the Americas, revenue in the third quarter increased by 8% to $803 million, which mainly reflected the pass-through of higher input costs to customers, including the impact of the higher Midwest premium in North America. Americas adjusted EBITDA for the quarter increased by 8% to $126 million, in line with expectations due to lower operational and overhead costs and favorable category mix, partly offset by the impact of lower volumes in Brazil.

In North America, shipments increased by 1% for the quarter, broadly in line with the industry, following stronger-than-expected growth during the first half of the year. Year-to-date, North America shipments are up by 5%, ahead of the overall industry. The slower rate of growth during the quarter reflects some moderation in industry growth rates as well as temporary operational challenges. These included a modest impact related to aluminum can sheet supply as well as some temporary plant and network issues. We continue to monitor the metal supply situation as we progress through Q4. If the supply chain performs as currently projected, we anticipate only a modest impact to our expected Q4 North America performance. Customer demand for nonalcoholic beverages in cans in North America remains strong. And as such, we maintain our guidance for full year North America shipments of a mid-single-digit percentage growth.

Looking into 2026, we expect industry growth of a low single-digit percentage. We expect a somewhat softer outlook for AMP following some volume resets largely related to specific footprint situations. We anticipate 2026 being a transition year before good growth in 2027 on the back of some contracted additional filling locations and ongoing market growth. In Brazil, third quarter beverage can shipments decreased by 17%, largely due to a weak industry backdrop across all categories, with industry beer can volumes falling by around 14% due to adverse weather and weak household consumption. Our weaker performance in Q3 follows a strong performance in the first half of the year. Year-to-date, Brazil shipments are down 1% versus a mid-single-digit percentage decline for the rest of the industry.

We expect an improved volume trend for Q4 compared to Q3, and hence, full year shipments for Brazil to be broadly in line with the prior year. Looking into 2026, we expect the Brazilian industry to return to growth and for our volumes to broadly track the industry. I'll hand over now to Stefan to talk you through our financial position for the quarter before finishing with some concluding remarks.

Thanks, Ollie, and good morning, good afternoon, everyone. We ended the quarter with a robust liquidity position of over $600 million. The net leverage of 5.2x net debt over last 12 months adjusted EBITDA represents a decline of 0.4x of leverage versus Q2 2024, reflecting adjusted EBITDA growth. It remains our expectation that the leverage ratio at year-end will be around 5x.

We reiterate our expectation for adjusted free cash flow for 2025 of at least $150 million. In terms of the various components of free cash flow, our expectations are mostly in line with what we said in July. We expect maintenance CapEx of around $135 million, lease principal repayments of just over $100 million, cash interest of just over $200 million and a small outflow in working capital. We now expect cash tax to be in the range of $35 million to $40 million, growth CapEx to be around $65 million and a small cash exceptional outflow of approximately $50 million. Today, we have announced our quarterly ordinary dividend of $0.10 per share. And with that, I'll hand it back to Ollie.

Thanks, Stefan. So before moving to take your questions, just to recap on AMP's performance and key messages. Firstly, adjusted EBITDA growth in the third quarter of 6% was at the upper end of our guidance range with both segments performing in line with expectations. Adjusted EBITDA growth was supported by shipments growth in both Europe and North America by lower operational and overhead costs and a favorable category mix. And the beverage can continue to outperform other substrates in our customers' packaging mix, supporting our growth. Reflecting our resilient performance, we are upgrading our full year adjusted EBITDA guidance. Full year adjusted EBITDA is now expected to be in the range of $720 million to $735 million based on current FX rates. We expect full year shipments growth for AMP to be approximately 3%. Having made these opening remarks, we'll now proceed to take any questions that you may have.

[Operator Instructions] We'll take our first question from George Staphos with Bank of America.

Congrats on the progress. I guess the first question I had, only have a couple. Can you talk, and Stefan, about what, if any, effects you're seeing from demand elasticity and higher realized or potentially realized aluminum pricing from can sheet within cans, both in North America and Brazil and then, I guess, broadly. And in that regard, with Brazil, the down, I think you said 17% on weak industry trends.

Obviously, others have also put up some weaker industry volumes so far during reporting period in Brazil. Do you sense any of that is a pack shift mix back to other substrates because of, in fact, higher aluminum prices? How would you have us think about that? And along with the elasticity question, just can you talk a bit more about what's baked into your guidance for fourth quarter and realize you're not guiding on '26, just the outlook for '26 on can sheet. What operational challenges do you -- are you -- how are you going to -- we know what issues hit the supply chain? How are you managing against that and what's baked in to the extent you can comment?

Yes. So yes, on the first question, I mean, I don't think we're seeing a huge amount on demand elasticity at this point. Obviously, everybody -- more or less everybody will have gone into 2025 pretty hedged, so a lot of the tariff impact won't come through in North America at this point, probably similar story for Brazil in some respects. So I don't think we're seeing it hugely impacting sales at this point. I think that there's a bit more risk for 2026 for exactly the same reason that hedges will be rolling. And so you would expect to see some higher aluminum costs come into the supply chain. And then it will be down to whether our customers pass those through or retailers pass those through and then how the consumer reacts in the overall consumer environment.

So I think we're probably guiding North America for next year at a market level sort of 1% to 2%, and that's partly reflecting some of that caution about potential inflation in the can. I think in Brazil, I don't think we've seen a big reversion back into 2-way glass. I think it stayed pretty much steady the shares of cans. It just seems to be a general weakness on the volume level on the liquid level, and we see that in the reporting of the big brewers. And obviously, it was a pretty poor winter, a very cold winter that's been commented on. And obviously, there is a weak consumer backdrop in the category, particularly in beer, but actually soft drinks wasn't great either.

So I think Brazil is just having a tough year. Again, as we look into '26, we'd assume that it reverts more back to its long-term trend. So maybe low to mid-singles. And as we said in the remarks, we'd be in line with that. In terms of Q4, so I think the can sheet, we're cautiously optimistic at this point. Obviously, there's been a lot of disruption in the supply chain. We were having it actually before the fire at that key facility. There was already some disruption in the supply chain, which we mentioned. And obviously, the fire didn't help. At this point, we think we're managing through. And obviously, it gets easier as the quarter progresses because alternative sources of supply can come into the mix, and we're obviously supplied from various domestic and international sources.

And we also have 1 of the 2 new mills in North America now coming online, which is obviously very helpful to the situation. So at the minute, we're optimistic that we can get through that, as we said in the remarks, with relatively limited impact on North America performance. But we probably did lose 1 to 2 points of growth in Q3 across all of the operation issues that included a couple of plants that didn't perform at the level we expected and also the network was under some stress with some seismic issues.

We'll take our next question from Matt Roberts with Raymond James.

First, on the 2026 growth in North America, it seems like there's a lot of innovation, potential shelf space distribution opportunities within your energy portfolio. So what's behind that transition here? And given your exposure, why in line with the market in North America?

Yes. Great question. So look, I think we've talked about it on calls. It's been on other calls. There's a lot of contract reset activity in North America over the last couple of years. We're seeing that increasingly settle down now. And we're broadly very comfortable with the outcomes. We see ourselves increasingly strongly contracted through '28 and beyond. We do see some softness, as we said, in 2026, particularly on the 12-ounce side of the portfolio due to some resets within those situations. And as I said on the remarks, it's really about some specific footprint situations. So by -- what I mean by that is, for example, we had a customer with a very long freight lane out of the COVID years.

We were at one point, thinking of building capacity. We decided not to with the overall volume situation. So now there is a plant much closer than our plant, and so that naturally reverts. And then another situation example is that one of our competition built a plant during this period of expansion and that plant is now closer to a customer filling location than our plant. And so we're seeing some, I think, relatively natural resets in the market. As you know, I mean, obviously, beverage cans are very susceptible to freight and footprint is critical.

So yes, as I say, I think we're very comfortable with where we're coming out now. We do see '26 as a softer year in North America, where we will be behind the market. But if we take '27, we see good growth. We see we're gaining a couple of extra filling locations, and we see the market growing again. And as you say, I think if you look at the innovation that's going into the can and you look at the way energy has performed this year, that's a big part of our portfolio. We actually don't know where that's going to be. It certainly surprised us on the upside this year. I think it's got good potential next year, probably not to the same level, but it's a big part of our portfolio. So yes, we can be optimistic about those kind of categories as well.

Right, right. And then speaking of capacity and footprint, last quarter, you noted potential for adds in Europe. I believe it was Southern Europe, but recognizing these projects are long term in nature, has the volume outlook changed either the timing in regard to any potential projects? Or are you still expecting Europe to be pretty tight and needing additional lines in the future? And any early indications that how you think about CapEx in 2026?

No. No, we don't see any change to the timing. So I mean, I think that the Europe market is pretty tight. We're particularly tight on certain sizes, and we'll address that. That definitely cost us some growth this year. Again, it's sort of specialty sizes in the season. We weren't completely able to follow and that cost us a bit of growth Q2 and probably persisted into Q3. So we'll do some projects around that in the off-season. And then, yes, we're running pretty tight. We've got some room for growth with continued improvement in the existing footprint, but we don't see any change to the timing of needing new capacity.

Europe is a long-term growth market. It's been talked about on other calls. We're talking 3% to 4%. Some years, it's been more, some years a bit less, but it's been very consistent as per capita can penetration grows. So yes, we don't see anything. It's obviously had a bit of a weak summer, particularly in the beer category, but we're very optimistic about that market. And as we said in the remarks, we see ourselves growing in line with the market in '26.

We'll go next to Stefan Diaz with Morgan Stanley.

Maybe just sticking with Europe. So obviously, the can continues to outperform underlying liquids volumes in the region. But in your opinion, how much more runway does the can have for outperformance? Like, for example, if overall liquid demand sort of remains kind of flat to down in Europe, can the can still grow in 2026, '27 and beyond?

Yes, definitely. So I think if you look at the things that drive the growth, I mean, there's still significant underpenetration of cans relative to other geographies. Some of that is legacy with the German deposit scheme that took all cans out of the German market. So you still see German can growth at very high levels, obviously, a big market. You have growth out of 2-way and plastic in different parts of the region, Eastern Europe. We have the ongoing sustainability advantages of the can relative to other substrates.

And obviously, you have in Europe, particularly the energy cost situation that's impacting glass. So we see a lot of runway for growth for the can in Europe. And I think that view is shared right across the industry and is backed up every quarter. If we look at our performance in the quarter, when we look at our markets that we were in, we were a touch behind, but only a touch behind. So I think there are always geographic and category mix impacts in individual company growth rates. But overall, we're happy with our performance, and we definitely see a lot of runway for can growth in Europe in the next few years, yes.

Great. That's helpful. And then maybe just can you -- if you could just touch on quarter-to-date trends by geography and maybe particularly if you could go into detail on Brazil, just given how weak this past quarter was on an industry level and just now how we're in the busy season down there. And then if I could just slip in one more. I might have missed this in the release, but can you quantify the IFRS 15 contract timing benefit? And is this potentially a headwind in 4Q?

Sure. So I think -- I mean, quarter-to-date, I think trends look good, very much in line with guidance across all geographies. I think Brazil, clearly significantly better where we're guiding. If we're at the top end of the guidance, then we expect Brazil to be flat growth year-on-year, which obviously is, therefore, growth in Q4. And we already see in October significantly better performance than Q3.

So we do see improvement. I think it's still a bit on the weak side, and we're still maintaining a cautious stance in our guide, but it's definitely better than Q3. And I think that Europe and North America would just say absolutely in line with where we expected. So it seems that there's a reasonable degree of forecast stability in our markets right now. I think the specific question on IFRS 15 is just a couple of million dollars, right? And maybe, Stefan, I don't know that we anticipate anything particular in Q4, but I'll hand that to you.

No, I don't think we expect a major headwind in Q4 from IFRS. And sort of, yes, it's sort of around a couple of million dollars sort of in the Americas and then also a few more in sort of the European segment. But net-net, yes, we don't expect a major headwind from there.

We'll go next to Josh Spector with UBS.

I just had 2 questions. One on the cost side is within your comments, you talked about less input cost recovery in Europe. I assume that's non-metals related, but can you talk about kind of what that is and if that is something that can be recovered? And then with North America with some of the temporary network issues you've called out, I don't know if you can size that at all? And is that something that's resolved? Or is this kind of just an effect of a tighter market maybe leading to inefficiencies that persist?

Sure. So taking the North American one first, I think those issues are resolved as we go into Q4. I think that they were a consequence of our strong growth in the first half, particularly on certain sizes. So we ended up with the network. We're basically pushing the shortage around different sizes across the summer. It landed on 12 ounce in Q3. And I think we mentioned in the remarks -- or I mentioned in one of my earlier replies that we probably lost 1 to 2 points of growth in North America in Q3, which was everything, including metal supply issues and some of our network and plant issues. So yes, we see those as fully resolved going into Q4. And the issue we're really very focused on is the metal supply, but as I say, cautiously optimistic at this point.

And then the input cost, yes, we talked about it earlier in the year. Nothing's changed here. This is European aluminum prices. It's really a legacy of the Ukraine war and the energy spike. We managed to hold that off for several years. But in the end, there is energy and aluminum and those prices came through. And I think there has been commentary certainly at least in one of our peers on similar lines. So I think that not surprisingly, eventually, that energy shock translated through into some input cost price rises and that impact came particularly for us this year, it's different for different players depending on their supply mix. So nothing new there, exactly what we talked about earlier in the year.

We'll go next to Arun Viswanathan with RBC Capital.

I just wanted to get your thoughts on EBITDA and I guess, growth as you look into '26. So it looks like you're kind of on a $725 million or so run rate on an annualized basis. If you think about maybe low single-digit growth as you discussed for '26, it seems like you are executing relatively well. So does that translate to, say, maybe mid-single-digit growth on the EBITDA line? And then maybe is there any further leverage as you delever? Or how should we think about that progressing forward as you look at it?

Yes, sure. Look, obviously, we don't guide '26 until our Q4s, and there's good reason for that. We're still rolling up the budget and all the detail. And also, there's still, at this time of the year, quite a bit of volume still under discussion or moving around. So we won't be guiding specifically. But if I just talk at the highest level, so I think I didn't say we were growing low single digits next year. I think what I said was Europe, we see growing 3% to 4% and us broadly in line.

I said I think Brazil will grow low to mid, us broadly in line. And I said I think North America will grow 1% to 2% and will be softer than the market. So we don't yet have a global number. I think we definitely see earnings growth in '26 over '25. So some of those growth positions, particularly Europe, Brazil, we also see good operational cost savings. We've got a lot of opportunity in plants, in freight, in lightweighting, the usual places where can makers make operational cost savings, input costs, we're hopeful for '26 as well at this point. And obviously, we'll be keeping a tight eye as we always do on SG&A. Mix, we'd hope to be a tailwind '26. So we see a number of areas where we see earnings growth in '26, and we definitely see earnings growth over 2025, but we won't guide specifically on that until February.

Great. And then maybe we can just discuss Europe just briefly. So in North America, we obviously saw a nice proliferation of new categories in nonalcoholic beverages. Could you just discuss maybe where we are in that trajectory within Europe? Is there maybe a tailwind that's coming? Or are we obviously already seeing it? And would you expect that to drive your results a little bit higher? Or would you be still maybe below the market because of the beer exposure?

Yes. I mean we saw a bit of that in Q3, as I mentioned. So I mean, if you look where our Q3 growth came from, it came particularly out of the energy category, a bit like North America, came out of some of these faster-growing categories like ready-to-drink teas, coffees, wines, waters, we're strong in all those categories. So we definitely saw that. But I think the other piece with Europe, I think we also see general soft drinks in growth with substitution of plastic and also some 2-way systems being substituted still.

So it's definitely not reliant on those more innovative categories to get growth in Europe. You can get growth fully in the core, if you like. And then I think what we're saying for 2026 is absolutely that this looks like a poor year for beer. There's no particular reason to believe that continues. So assuming beer stabilizes more into normal growth rates, then we would be in the 3% to 4% range, and that would be very good growth for all the can makers in Europe.

If I can just squeeze in one last one. The recapitalization or the new structure -- do you see that at all impacting maybe your operations? Or does it allow for maybe a different way of thinking about capital allocation? Or is it just not really that impactful?

Yes. I think too early to say anything on it. Obviously, the transaction hasn't closed. It's progressing well from what we understand, but too early to comment on anything, I think, with relation to that.

We'll go next to Mike Roxland with Truist Securities.

Congrats on all the progress. I just wanted to follow up on a comment you made in one of the prior questions about the growth you lost in Europe. And you mentioned also on the last quarterly call, calling out 1 or 2 points of growth in Europe because you couldn't pivot into smaller formats. You had good growth in soft drinks and energy. But given your existing beer position, which you noted is 40-plus percent in Europe, you couldn't make that transition.

So can you just tell us how you expect to make that transition, how do you expect to become a little bit more nimble to target those growth categories to maybe try to minimize beer? Obviously, it didn't sound like you did that -- you didn't make much of a shift in 3Q, but can you tell us how you're going to ultimately do that, be 4Q, early 2026, how you're pivoting your mix to capture stronger growth end markets relative to beer in Europe, please?

Yes, sure. So look, we're doing a couple of projects in the network, converting lines into those sizes, making lines flexible to allow us to be more agile in the season. So yes, we've got a couple of projects on the books for Q4, Q1 that will then have impact and be -- put us in a better position in Q2, Q3 next year. And then obviously, any capacity we're building out in the next few years, we'll make sure we're covering the growth sizes in the market. So we think we'll be in pretty good shape once we do these next few projects.

Got it. And when you think about some of the conversions that you're doing or the flexibility that you're adding, when you add new lines, I guess, are you going to build those new lines with this functionality, with this flexibility to be able to switch sizes more easily in case market dynamics change?

Yes, definitely. I mean, it costs a lot less if you do it at the beginning than when you try and retrofit, especially when you try and retrofit much older lines. So absolutely, I think it makes a lot of sense at the minute. The market is quite dynamic with different products coming to market, and we've seen in different summers, different products doing better or worse. So yes, it definitely makes sense for us as we build out new capacity to put that flexibility into the lines for sure.

Got it. Okay. And then my last question is on North America. You mentioned the network issue has been resolved, and you remain optimistic on the metal supply issue resolving itself at some point. But fair to say, is there a risk to that 1% to 2% growth that you're targeting for North America next year should these metal supply issues persist into 2026?

Yes. I guess, Mike, just to be clear, the 1% to 2% is the market growth, right? So we're saying we expect to be a bit softer than that. I don't see a risk to the industry or to ourselves in terms of metal supply next year. So obviously, we have 1 of the 2 new mills ramping up as we speak. That's extremely helpful to the situation. We expect the operational issues that are being suffered by Novelis to be resolved. Obviously, they're working very hard to address them. And then equally, we've all -- anybody that's in the market is sourcing other sources of aluminum and successfully doing so. So I think with the flexibility we all have in our supply chain with multiple sources of supply with the fixes they're doing and with the new mill ramping up, I don't see a risk of industry volumes or AMP volumes for metal supply in 2026.

We'll go next to Anthony Pettinari with Citi.

Ollie, I think you talked about kind of a bad year in beer in Europe, maybe not expected to repeat next year. And I'm just wondering if you can talk a little bit more about sort of the puts and takes there in terms of what you think really drove the weakness in Europe this year, whether it was consumer, weather? And then, I mean, in North America, there's been a lot of discussion around secular pressure on beer, given lifestyle changes, especially with younger consumers. Does that have a parallel in Europe? Or just wondering if you can kind of give us your big picture thoughts on beer into next year? Yes.

Yes. Look, I think it's definitely too early to call a secular shift in Europe. I mean we don't have the depth of other products that we see in the North American market, other alcohol products with similar drinking characteristics that you have in North America. I think we've had a poor year. I don't think weather has really added. I think there's definitely some consumer weakness, which is hitting the category.

We only generally work out later what the players did, were they promoting, not promoting. So we don't have all the data on that yet. So I think my view on this is that it's a big category. It's got some very strong players. And I think they won't be happy with this year at all and that they'll be putting in place strategies to reverse that into 2026. And as I say, I don't -- I think it's definitely too early to call any kind of secular shift in European drinking behavior.

Got it. Got it. That's helpful. And then based on kind of an early view, do you expect that the aluminum conversion cost headwinds maybe continue in Europe next year? Or are there maybe some savings that we should kind of think about that could help you reach that sort of normalized operating leverage? Or just how should we think about that?

I don't think we think there's necessarily savings, but there's no question that the step-up that we had this year moderates very significantly. So this was our step-up. I think if you look back over '23, '24, we really held it back despite the increase in energy costs that had flowed through. So this is where we took it. I mean the European market is tight on aluminum. So I don't see a huge savings opportunity there until there is more capacity put into the market, it needs that. But fortunately, there are significant import routes that are pretty competitive. And so I don't also see a major headwind, and we'll be exploiting on those routes. But yes, no savings, I think, but a definite moderating of some of the headwinds that we had this year.

We'll go next to Gabe Hajde with Wells Fargo Securities.

I think earlier this week was the first time that we had heard that there might have been a little bit of movement in terms of contracts and maybe customers, maybe on the private label side. You mentioned next year that there's going to be, again, for your system, some changes and maybe underperform the market a tad. I'm just curious, as you're going through those negotiations with customers, what are their talking points as it relates to -- I mean, you already called out proximity to customer filling sites, so that makes sense to me. But just price or service levels, quality, et cetera, that's informing some of those decisions.

Sure. Yes. Look, as I said in the remarks, I think that by far, the dominant factor that we've seen has been this footprint issue. As I said, we had planned back in '21, '22 to put some capacity in the north, and then we had -- people were very tight. So we had a contract that we served out of a long freight lane. And when we chose not to put the capacity in, obviously, we still have the contract for a few years. But then when it runs out, it's naturally going back to a closer can plant. And then as I said, we have the opposite effect where some of the new capacity that's come to North America obviously changes footprint dynamics for customers. So they get a plant that's actually nearer to them than they used to have and that our legacy plant is placed.

And then we also had one situation with customer that halfway through the process, they had their own footprint review, which resulted in a filling location that we serve closing down. So I think if we look at the overall reason for softness in '26, its majority is down to footprint. I think the market is competitive, but I think it's normally competitive maybe after a few years where it was so tight through COVID, but I think it's in a normal competitive environment. And we don't hear anything particular on service. We generally get very high ratings on service and very good feedback for relationship management and customer support. So I think predominantly, we're talking about footprint-related changes and the fact that there is some capacity in the market for people to make moves.

Okay. Two questions on aluminum. Again, earlier this week, I think it was mentioned that all-in aluminum costs kind of crept up above, I think, all-time highs that we even saw during the pandemic. I think we were talking about maybe penny and a half or so of inflation just from raw material costs. That's maybe closer to $0.03 now if we were to mark-to-market. And again, I appreciate your customers hedge and probably roll that in 3 years in advance. So it's not going to all hit at once. But I'm just curious, when we've seen this type of inflation through the system, is it typically -- do they typically address that on an annual basis with pricing on the shelf?

And then maybe relatedly, we observed a decent amount of promotional activity, especially on the carbonated soft drink and energy drink side in the first half of this year, maybe even the first 8, 9 months. Should we be mindful or thinking about anything? You mentioned volumes or sell into the channel decelerating a little bit in the second half here versus the first half. Is there any sort of dynamic in the first half of '26 that we could be mindful of maybe volumes actually -- industry volumes down in the first half and maybe growing in the second half, just given the tough comps?

Yes. I think it's a good question. Look, I think you can't say there's no impact from that level of increase of aluminum pricing. So I think you have to assume there's some risk of inflation on the shelf and that, that has some impact on volumes because the categories are elastic. I think trying to predict exactly what our customers and retailers do with that is a fool's game. I think it depends a lot on where they are. They've taken a lot of price the last few years. And so they've probably got some firepower, which I think they deployed this year.

I think not because of any personally, I don't think it's because of any particular sort of tariff-related insights. I think it's more that they have got that firepower in their margin structures and they can use it to drive volumes. And they are looking to balance cans versus plastic in their portfolios for all sorts of reasons. So I think predicting exactly what happens in '26 is very difficult to do. We're maintaining a 1% to 2% stance on North America growth for next year with us softer. And that's probably because we are being a little bit cautious around that issue. So yes, I think something is flowing through. You can't say it has no impact, but I think that hopefully, we see what we're expecting, which is that sort of growth rate.

Well, let's be honest, glass and other substrates are not immune, right? Like everything has embedded energy costs. So I'm curious.

No -- that's really important -- sorry, Gabe, I was just going to build on that, right, which is that every quarter, we see that the can is outgrowing the other substrates. So then I think you take the sustainability piece, you take the energy cost piece, you take the fundamental cost structure of cans in North America.

You look at the recapitalization that we've done as can makers and that our suppliers have done on the can sheet side, I think that the industry is very significantly more efficient than 10 years ago, and that is going to play through into overall cost structure. So yes, that's why I'm very bullish about long-term can growth rates in North America. I think there is a little bit of a headwind potentially from the tariff situation in the next 12, 18 months.

Understood. Last one, and it's just sort of digging into the supply chain a little bit. Obviously, it's been, I don't know, maybe 40 years that we've had new rolling capacity here in North America. Does that -- that does not address any sort of the ingot cost, Midwest premium cost that's embedded in. This is just more about localizing that can sheet supply. And so there's better efficiency, I guess, from a logistics standpoint.

So then we got to kind of wait to see what happens politically if there's any change for cost structure for aluminum. And then in Europe, we're reading articles about they're frustrated that they're actually exporting scrap to the U.S. because maybe apparently, that's a way to circumvent some of the tariffs. Is that coming up in conversations in terms of cost of aluminum or can sheet over in Europe?

Yes. So look, I think on North America, obviously, those mills are massively helpful to the industry, both in terms of supply, but also long-term cost structure, very efficient. Obviously, they had to get investment-grade returns to be built. So -- but I think those sorts of costs are built into the supply chain now. And so we don't see major changes. I think they're extremely positive for the industry to have that much domestic supply coming on and stopping a lot of the imports that were needed in North America and generally improving the quality of the industry.

So that -- they're hugely positive, I think. And then in Europe, yes, look, I think the scrap situation isn't helpful as a way to avoid tariffs. Obviously, we were already hearing that the U.S. was very short scrap with issues that have gone on in Mexico and related to China, and that was impacting North American can sheet makers. So these flows will have impact, but we don't see them particularly changing what we're seeing in Europe at the moment. So nothing particular to report from that, I think.

At this time, there are no further questions. I will now turn the call back to Mr. Oliver Graham for any additional or closing remarks.

Thank you, and thanks to everyone on the call. So just summarizing again, adjusted EBITDA in Q3 grew by 6% at the upper end of our guidance with both segments in line with expectations. And reflecting that resilient performance, we're raising our expectations for full year adjusted EBITDA. So with that, thanks for joining the call, and we look forward to talking to you again at our Q4 results.

This does conclude today's conference. We thank you for your participation.