Executive Summary / Key Takeaways

• Resilient Performance Amidst Macro Headwinds: Ardagh Metal Packaging (AMBP) has demonstrated consistent outperformance, with Q2 2025 adjusted EBITDA growing 18% and global shipments up 5%, exceeding guidance despite macroeconomic uncertainties. This resilience is underpinned by the defensive nature of beverage cans and AMBP's diversified customer portfolio.
• Strategic Growth in Key Markets: The Americas segment, particularly North America, is a significant growth engine, driven by strong demand in non-alcoholic beverages, sparkling waters, and energy drinks. Europe continues its long-term growth trajectory, benefiting from sustainability trends and market share gains, though facing temporary input cost headwinds.
• Operational Excellence and Sustainability as Core Moats: AMBP leverages its well-invested manufacturing footprint, high capacity utilization, and ongoing operational improvements to drive efficiency. Its robust sustainability agenda, including significant renewable energy investments, enhances the beverage can's appeal and strengthens its competitive position.
• Improved Financial Health and Stable Capital Allocation: The company is making tangible progress on deleveraging, with net leverage declining to 5.3x in Q2 2025 and projected to be around 5x by year-end. A robust liquidity position and reiterated free cash flow guidance support its consistent dividend policy.
• Positive Outlook with Prudent Caution: AMBP has upgraded its full-year 2025 adjusted EBITDA guidance to $705 million to $725 million, reflecting strong H1 performance and favorable currency. While anticipating some moderation in growth rates in the second half, management's outlook remains positive, balanced with appropriate caution for the volatile macro environment.

The Enduring Strength of the Beverage Can: AMBP's Foundational Narrative

Ardagh Metal Packaging S.A. (AMBP) stands as a leading global supplier of sustainable and infinitely recyclable metal beverage cans across Europe, the United States, and Brazil. Founded in 1932, AMBP's journey has been characterized by a deep understanding of evolving consumer preferences and strategic adaptations to market dynamics. The company's core business revolves around providing packaging solutions for a diverse range of end-use categories, including beer, carbonated soft drinks, energy drinks, sparkling waters, hard seltzers, juices, pre-mixed cocktails, tea, and wine. This broad exposure to both defensive and growing beverage segments underpins its resilient business model.

AMBP's overarching strategy is rooted in leveraging the inherent advantages of the beverage can: its superior sustainability credentials, efficiency in filling and logistics, and its adaptability to innovation. The company's historical growth, particularly since 2018-2019 in North America, has been fueled by these factors, demonstrating the can's ability to gain market share against other packaging substrates like plastics and glass. This foundational strength, combined with a well-invested manufacturing footprint and strong customer relationships, forms the bedrock of AMBP's competitive moat.

The global beverage can market itself is characterized by consistent, long-term growth trends. Europe, for example, has historically seen average growth rates of 2% to 3% for decades, driven by ongoing pack-mix substitution and the recovery of markets like Germany, where can penetration remains relatively low. Similarly, North America has demonstrated a structural growth trajectory, with the can benefiting from innovation and a shift away from plastics. Brazil, despite occasional volatility, exhibits a strong secular trend of converting from returnable glass to one-way can packaging as GDP per capita rises. These broad industry tailwinds provide a favorable backdrop for AMBP's continued expansion.

Competitive Edge: Operational Prowess and Sustainability Leadership

In a competitive landscape dominated by global giants like Ball Corporation (BLL), Crown Holdings (CCK), and Silgan Holdings (SLGN), AMBP carves out its position through a combination of operational excellence, strategic market focus, and a robust commitment to sustainability. While direct quantitative comparisons of proprietary technology are not explicitly detailed, AMBP's competitive advantages stem from its highly efficient manufacturing processes and its ability to deliver a broad portfolio of can formats with speed and flexibility.

AMBP's operational technology is geared towards maximizing capacity utilization and minimizing unit costs. The company consistently targets manufacturing efficiency improvements, which are embedded in its annual guidance. This focus on cost-effective production is a critical differentiator, particularly against competitors who may face higher operational complexities or less optimized supply chains. For instance, AMBP's North American plants benefit significantly from high utilization rates, leading to lower unit costs and improved efficiencies. In Europe, despite facing headwinds from higher aluminum conversion costs and negative Producer Price Index (PPI), AMBP's teams have demonstrated strong input cost management and operational control, mitigating these pressures.

Sustainability is a core technological differentiator for AMBP and the beverage can industry as a whole. The can's infinite recyclability and lower carbon footprint are increasingly valued by consumers and brand owners. AMBP is actively investing in and developing technologies to enhance its sustainability profile. In 2024, the company published its first roadmap report, indicating that its Scope 3 emissions were already below its 2030 target level. Furthermore, AMBP has made concrete investments in renewable energy, including agreements for a solar project in Germany and a large-scale virtual power purchase agreement in Portugal, set to commence in 2026. This Portuguese agreement alone will represent approximately half of AMP Europe's continental energy consumption, marking a significant step towards its 100% renewable energy target for 2030. These initiatives not only reduce environmental impact but also enhance the can's appeal to customers, strengthening AMBP's market positioning and providing a competitive edge in an increasingly environmentally conscious market.

Compared to its peers, AMBP's global network and integrated supply chain, as part of the larger Ardagh Group, provide enhanced efficiency and market access. While competitors like Ball Corporation are known for innovation in lightweight and eco-friendly designs, AMBP's strength lies in its established relationships with beverage producers and its ability to offer customized packaging solutions across a wide range of end-use categories. Crown Holdings, with its extensive manufacturing network, competes on scale, but AMBP's focus on operational execution and customer service allows it to maintain strong loyalty. Silgan Holdings, with its diversified packaging portfolio, offers broader market exposure, but AMBP's specialized expertise in metal beverage cans provides a unique differentiator in product performance. The company's ability to manage its capacity effectively, including brownfield expansions within existing facilities in Europe, allows it to meet growing demand without the significant capital outlay of greenfield projects, further reinforcing its cost leadership.

Financial Performance and Operational Momentum

AMBP has demonstrated robust financial performance, particularly in the first half of 2025, building on a strong 2024. For the full year 2024, the company delivered adjusted EBITDA of $672 million, significantly exceeding its initial projected range. This was underpinned by 3% growth in global volumes, driving improved capacity utilization and fixed cost recovery.

The momentum continued into 2025. In the first quarter of 2025, AMBP reported 6% global shipments growth and 16% adjusted EBITDA growth year-over-year. This strong start was driven by higher volumes, improved fixed cost absorption, and a robust performance across all regions. The Americas segment saw revenue increase by 12% to $740 million, with adjusted EBITDA up 16% to $106 million, propelled by 8% shipment growth in North America and 4% in Brazil. Europe's revenue grew 10% to $528 million, and adjusted EBITDA climbed 14% to $49 million, with shipments up 5%.

The second quarter of 2025 further solidified this positive trend, with global shipments growing 5% and adjusted EBITDA increasing 18% year-over-year, again surpassing guidance. The Americas segment was a standout, with revenue surging 21% to $840 million and adjusted EBITDA jumping 34% to $133 million. North American shipments continued their strong trajectory, increasing 8%, driven by robust demand in carbonated soft drinks, sparkling waters, and double-digit growth in energy drinks. Brazil also delivered impressive 12% shipment growth, outperforming the industry. Europe's Q2 revenue increased 9% to $615 million, though adjusted EBITDA decreased 3% to $77 million due to temporary input cost headwinds, including metal timing impacts from falling aluminum prices, negative PPI, and higher aluminum conversion costs. Despite these, European shipments still grew 1%.

Operationally, AMBP has focused on efficiency. North America benefits from running plants at high utilization rates, leading to lower unit costs. In Europe, the company has achieved good production levels and cost performance. The company is also actively managing its capacity, ramping up approximately $1 billion of capacity in 2025 from projects completed in 2023 and 2024, alongside flexibility investments. This strategic capacity management ensures AMBP can meet growing demand while optimizing its cost structure.

Liquidity, Capital Structure, and Forward Outlook

AMBP maintains a robust financial position, characterized by strong liquidity and a clear path to deleveraging. The company ended Q2 2025 with $680 million in liquidity and no near-term bond maturities. Net leverage stood at 5.3x net debt over last 12 months adjusted EBITDA, a significant improvement of 0.5 turns from Q2 2024, with expectations to reach around 5x by year-end. This deleveraging trajectory is supported by strong adjusted EBITDA growth and disciplined capital allocation.

On July 28, 2025, Ardagh Group S.A., AMBP's parent company, announced a comprehensive recapitalization transaction aimed at significantly lowering debt and extending bond maturities to 2030. While AMBP's capital structure is separate, this broader group-level action reduces uncertainty and strengthens the overall financial ecosystem in which AMBP operates. AMBP's capital allocation policy remains unchanged, including a quarterly ordinary dividend of $0.10 per share, supported by its robust liquidity and projected adjusted free cash flow of at least $150 million for 2025.

Looking ahead, AMBP has upgraded its full-year 2025 adjusted EBITDA guidance to a range of $705 million to $725 million, reflecting its strong first-half outperformance and favorable currency movements. This guidance is underpinned by an expected global shipments growth of 3% to 4% for the full year. For Q3 2025, adjusted EBITDA is projected to be between $200 million and $210 million, ahead of the prior year.

Management's outlook for 2025 anticipates mid-single-digit shipments growth for North America, driven by continued strength in non-alcoholic categories and a recovery in energy drinks. Brazil is expected to see at least low single-digit growth, reflecting a cautious view on the second-half industry backdrop. Europe's shipments are projected to grow around 3% for the full year, supported by ongoing market share gains and capacity ramp-ups.

However, AMBP's implied Q4 2025 outlook suggests a more conservative stance, with potential EBITDA declines year-over-year and below 2023 levels. This reflects macroeconomic uncertainties, the persistence of European cost headwinds (PPI, aluminum conversion costs), and an anticipated slowdown in Brazil's volume growth compared to its exceptional first half. The company expects maintenance CapEx of approximately $135 million and growth CapEx of around $70 million for 2025, with future capacity additions in Europe likely to be brownfield projects within existing facilities, managed within its current cash flow profile.

Risks and Challenges

Despite a compelling growth narrative, AMBP faces several risks. Macroeconomic uncertainties persist, potentially impacting consumer spending and promotional activities. While AMBP anticipates a minimal impact from announced tariff measures due to robust pass-through mechanisms and regional supply chains, unforeseen changes could still affect demand.

In Europe, the segment continues to grapple with input cost headwinds, including temporary impacts from metal timing and higher aluminum conversion costs, which could pressure margins. Capacity constraints in certain European can sizes and geographies, particularly during peak seasons, have led to missed growth opportunities, estimated at 1 to 2 points in Q2 2025 for soft drinks. While AMBP is addressing this through capacity ramp-ups and flexibility investments, sustained tightness could limit future growth. Brazil's market, despite its long-term potential, has shown volatility, with specific customer mix and filling location issues impacting past performance. While these are showing signs of resolution, a softer industry backdrop is anticipated for the second half of 2025.

Conclusion

Ardagh Metal Packaging presents a compelling investment thesis, grounded in the enduring strength and growing appeal of the beverage can. The company's consistent financial outperformance, particularly in the Americas, underscores its operational resilience and strategic positioning within attractive, growing beverage categories. AMBP's commitment to sustainability, manifested through significant investments in renewable energy and a focus on the can's circularity, not only aligns with global trends but also fortifies its competitive moat against alternative packaging.

While macroeconomic uncertainties and specific regional challenges, such as European input cost headwinds and Brazilian market volatility, warrant careful monitoring, AMBP's proactive management of its capital structure, including the parent company's recapitalization, and its disciplined capital allocation policy provide a stable foundation. The company's upgraded 2025 guidance, supported by strong shipment growth and operational efficiencies, signals continued momentum. For discerning investors, AMBP offers exposure to a resilient industry leader leveraging operational excellence and technological leadership in sustainable packaging to drive long-term value creation.