
AMP shipments grow as global demand shows recovery signs
First-quarter beverage can shipments at Ardagh Metal Packaging (AMP) were substantially up year-on-year, which the canmaker expects will continue globally as inflation slows and brands ramp up promotions.
The Luxembourg-based company said it was particularly encouraged by growth in Europe, a market that had been a weak spot in 2023, but brewers and soft drinks makers alike are gearing up for stronger 2024 sales.
AMP’s global sales in the three months to the end of March climbed 1% year-on-year to US$1.14 billion. Global can shipments jumped 7% in the period, with the strongest increase in the Americas, where volumes were up 11% and sales up 2.3% to $660m.
While sales fell 1% to $481m in Europe, can volumes in the region improved by 3%. AMP attributed that to customers restocking after a year in which soft demand had seen them reduce can inventories. Growth had continued into April, said chief executive Oliver Graham.
“Europe performed slightly ahead of expectations on the volume side,” Graham told analysts in a call. “If those trends continue… then we can pace up production in line with those improved trends and that should give us a tailwind in the remainder of the year.”
AMP’s results, along with those of Canpack earlier in the month, suggest that a decline in demand that has dogged canmakers over the past year is waning. Poland-based Canpack said it expected first-quarter sales to have increased 24%. After sales jumped during the pandemic, canmakers have since been struggling to maintain growth as rising inflation, supply chain snarls and an energy crisis have subdued consumer spending and customer demand.
Graham now expects European year-on-year profit to grow in the next quarter, a significant trend reversal.
AMP revenue in the Americas increased 2% but a 13% jump in North American can shipments was the highlight of the region’s results.
“This reflects our attractive portfolio mix and our pipeline of contracted growth, which supports our forecast for shipments in our North America business to grow by a mid-to-high single digit percentage this year versus our estimate of a low-single digit percentage growth for the industry,” Graham said.
Graham is confident that the company’s business strategy, which has also included scaling down production in South American amid softening demand, will see the company build on its earnings growth. As the year progresses, AMP expects the improving industry outlook to provide further gains.
“If we look at the industry overall, we are seeing a steady improvement in the outlook, including an uptick in promotional activity, particularly in soft drinks with the potential for further market growth to come,” he said.
“With our well invested global manufacturing base and a strong diverse mix of customer relationships, we remain well placed to benefit from an ongoing recovery in demand, which we expect to drive further earnings growth over the medium term.”
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