Welcome to the Ardagh Metal Packaging S.A. First Quarter 2024 Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Stephen Lyons with Investor Relations. Please go ahead.

Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's First Quarter 2024 Earnings Call, which follows the earlier publication of AMP's earnings release for the first quarter. I am joined today by Oliver Graham, AMP's Chief Executive Officer; and David Bourne, 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 www.ardaghmetalpackaging.com. Remarks today will include certain forward-looking statements and include the 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.

Thank you, Stephen. Our performance in the first quarter was encouraging, with good volume growth across each of our markets. Global beverage shipments grew by 7% in the quarter versus the prior year, and adjusted EBITDA growth was marginally ahead of our guidance due to favorable volume and mix. In addition to continued strong shipment growth in the Americas, Europe is showing welcome signs of a recovery post customer destocking. Our disciplined permanent capacity actions are also taking effect and, along with our expectation for continued volume growth and increased manufacturing activity, will improve fixed cost absorption. This gives us confidence to reaffirm our full year adjusted EBITDA guidance, with the expectation of higher adjusted EBITDA growth for the remaining quarters. We continue to manage our capacity in a disciplined manner through a mix of curtailment and longer-term actions, as appropriate. 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. The aluminum beverage can continues to outperform, increasing its share of the global beverage packaging mix and also as the package of choice for new market innovation. We believe that we are well placed to benefit from this secular growth story as a pure-play aluminum beverage can manufacturer. In light of heightened geopolitical tensions, we would also remind investors that we have no operations in either Russia or in the Middle East. We are well hedged on our energy needs for the current year, and input materials are predominantly sourced from our local markets. We continue to progress our sustainability agenda with highlights in the quarter, including an improvement in our CDP score to A- for climate change. In parallel, we are progressing a strong pipeline to improve our renewable energy mix. Turning now to AMP's first quarter results. We recorded revenue for the first quarter of $1.14 billion, an increase of 1%, which reflected favorable volume, mix and currency effects, largely offset by the pass-through to customers of lower metal costs. Adjusted EBITDA of $134 million was up 3% on the prior year, with growth in the Americas ahead of our expectations and partly offset by a decline in Europe, in line with our expectations, as production activity was tightly managed relative to shipments growth. If we look at AMP's results by segment, revenue in the Americas in the first quarter increased by 2% to $660 million, which reflected shipments growth, partly offset by the pass-through of lower input costs. In North America, shipments grew by 13% for the quarter, and we're encouraged by the sustained strong growth in shipments into 2024. 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. And 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 a potential for further market growth to come. In Brazil, first quarter shipments increased by 4%, reflecting encouraging strength in the domestic beverage can industry, which grew by a mid-teens percentage. AMP's lower level of shipments growth reflected customer mix effects after a very strong Q4. We continue to balance our capacity through curtailment of our network, and we're encouraged by the improved industry trends which are supported by an improving macroeconomic environment. We will closely assess customer demand needs as we now enter into the quieter winter period and are well positioned to service any higher demand by our customers. Adjusted EBITDA in the Americas increased by 12% to $91 million, which represents a record first quarter, and was driven by favorable volume-mix effects, partly offset by higher anticipated labor costs. We continue to expect shipments growth in the Americas in the order of a mid-single-digit percentage for 2024. Shipments growth and improved fixed cost absorption will drive strong adjusted EBITDA growth for the remainder of 2024. In Europe, first quarter revenue decreased by 4% on a constant currency basis to $481 million compared with the same period in 2023, principally due to the pass-through of lower input cost to customers. Shipments for the quarter increased by 3% on the prior year as sales volumes recovered following the decrease in the fourth quarter, which included customer destocking. We're encouraged by the improvement in shipment trends. The recovery is being broad-based across regions and categories, but particularly in the beer segment. There is clearly a shift occurring in customer retail pricing strategies with a greater emphasis on volume. Consumer sentiment and macroeconomic indicators have also shown some improvement. First quarter adjusted EBITDA in Europe decreased by 16% at constant currency to $43 million, as we exercised caution around the level of inventory build ahead of the summer season by pacing production. Performance was, however, sequentially stronger, growing by nearly 40% from the fourth quarter. For 2024, we continue to expect the low single-digit percent shipments growth as we monitor demand patterns into the summer season. Volume growth and improved fixed cost absorption, supported by an increase in production activity, will drive adjusted EBITDA growth for the remainder of 2024. I'll now briefly hand over to David to talk you through some of our financial position before finishing with concluding remarks.

Thanks, Oli, and hello, everyone. We ended the quarter with a liquidity position of $329 million. Cash outflow in the quarter was lower than our expectation while reflecting the usual seasonality in working capital, with working capital outflow in the quarter of $423 million. We will continue to focus on working capital efficiencies, and our guidance for a modest full-year working capital net inflow remains unchanged. AMP incurred total CapEx of $62 million in the quarter, including $38 million of growth CapEx. We reiterate our expectation for growth CapEx for 2024 of approximately $100 million, mainly comprising flexibility enhancements to our network and final cash flows for some of our growth projects, and maintenance, sustainability and IT CapEx of the order of $120 million, in line with our steady long-term run rate. We anticipate a further reduction in growth CapEx again in 2025. Our net leverage metric ended the quarter at 6.2x net debt to adjusted EBITDA, which was better than our expectations, arising from improved working capital as shipment growth outpaced production, which slowed inventory build ahead of the summer season. As previously indicated, we anticipate modest deleveraging on a full-year basis during 2024 and a more meaningful reduction thereafter. We note that in addition to our strong liquidity position, we have no near-term bond maturities and no maintenance covenants on our bonds. We have today announced our quarterly ordinary dividend of $0.10 per share to be paid in June, in line with guidance. There is no change to our capital allocation policy. AMP operates with a stand-alone capital structure, which is structurally and legally separate from that of Ardagh Group, our 76% long-term majority shareholder. On the 15th of April, Ardagh Group announced a new senior secured credit facility with Apollo, principally to enable the refinancing of its 2025 maturities. The details of that facility are set out at Ardagh Group's filings. The facility is secured on all material assets of its subsidiary, Ardagh Investment Holdings, including a pledge on the equity interest in AMP, both ordinary and preferred equity. The financing is entirely separate from the perimeter of AMP and, as such, does not impose any obligations or covenants on Ardagh Metal Packaging S.A. or its subsidiaries. With that, I'll hand back to Oli.

Thanks, David. So before moving to take your questions, I'll just recap AMP's performance and key messages for the quarter. Global shipments grew by 7% and America shipments grew by 11%, a third consecutive quarter of double-digit growth, and Europe experienced a good rebound growing by 3%, trends that we continue to see into April. Adjusted EBITDA growth was modestly ahead of guidance due to favorable volume and mix, and this encouraging start to the year gives us confidence to reaffirm our full year 2024 adjusted EBITDA guidance for growth of 5% to 10% into a range of $630 million to $660 million, supported by global shipments growth approaching a mid-single-digit percentage. And as David said, in terms of Ardagh Group's recent financing actions, we can confirm that there are no changes to AMP's capital allocation policies or how we manage our day-to-day operations. Our EBITDA guidance is supported by shipments growth and improved fixed cost absorption accelerated by footprint rationalization and pacing production more in line with sales growth through the summer season. We expect higher adjusted EBITDA growth for the remaining quarters of this year. In terms of guidance, for the second quarter, adjusted EBITDA is anticipated to be in the order of $170 million, with growth across both geographic segments and compares with the prior year adjusted EBITDA of $151 million on both a reported and constant currency basis. Having made these opening remarks, we'll now proceed to take any questions that you may have.

We can now take our first question from Anthony Pettinari with Citi.

You performed better than expected in Europe. Understanding you don't give quarterly guidance, when would you expect EBITDA could be up year-over-year in Europe? Is it possible that we see that in Q2? Or is it more likely that that's something that happens in the second half, or just any kind of thoughts there?

Yes. I think we would start to see it in Q2 and we'd expect it through the year. So yes, I think Europe, as you say, has performed slightly ahead of expectations on the volume side, but we did, as we mentioned in the remarks, pace production back relative to shipments growth. And so that held the EBITDA growth back in Q1. But if those trends continue on the volume side, again, as we mentioned, 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. So we would expect Q2, I think, to have profit growth.

Roughly, Q2 will get to line ball on a kind of LTM basis and then Q3 onwards progression.

Got it. And then you talked about a greater emphasis on volume in Europe from, I think, some of your customers. I'm just wondering, is this specific to a category like beer or nonalcoholic or certain geographies? And understanding it's hard to kind of measure quarter-to-quarter, do you think your customers are maybe outperforming the market? Or are you gaining some share? Is your share stable, losing? How would you characterize that?

Yes. It's hard to say at this point among our peers. I mean, only one has reported any numbers, and theirs was very strong. But obviously, until we see all of them, we're not quite sure where we are on share. I think we think we'd be roughly at the market rate. That's usually where we are. We have strong positions across particularly Northern European markets, and we are also very diversified between different categories and geographies, so it's probably a reasonable estimate on the market. I think that we certainly see the beer sector recovering strongly compared to last year and much more focused on volume relative to price. And we see that again much more broadly across the customer base whereas last year, there were clear winners and losers depending on their pricing strategies. But we have strength in other categories as well. We have strength in soft drinks, particularly in the U.K., we have strength in the energy sector. So it's certainly not only one area, and that's what's, I think, encouraging. And as I mentioned in the remarks, April is also looking strong. Obviously, we get the benefit that Easter fell into March, which for us means additional shipping days in April. But nevertheless, April trends are also very encouraging.

We will take our next question from Mike Roxland with Truist Securities.

Congrats on a good quarter overall. Wanted to just follow up, Oli, on your comments on April and the positive volume trends that have persisted. Is there any way to quantify what the volumes have been thus far in the U.S., Brazil and Europe in terms of volumes for April?

So I think the trends have largely continued. So you certainly see the sort of growth rates we experienced in Q1 in Americas continuing into April. And then Europe, it's similar; we're a tick up actually because, again, I mentioned this extra couple of days shipping. So you've probably got a point or two up, if you look at the year-to-date number by the end of April on our quarter 1 performance. So yes, we're encouraged by that. Obviously, we all had the experience last year of Europe that we had some decent months going into the summer and then had a pretty poor H2, so that's why we're not shifting any guidance or moving any projections at this point. But certainly, compared to where we were in Jan, Feb, we've been encouraged by the trends in Europe, which was the main area of risk between the top and bottom of our guidance.

Got it. And then just following up on Europe. Is there anything that you can point to that gives you confidence that Europe has reached this positive inflection point and that it will maintain the trend that it's currently on? And then just quickly as well, any update on the recovery of European inputs. I think you mentioned about $50 million of under-recovered previous year energy costs. If Europe continues on this trajectory, will you be able to recover more on that $50 million?

No, good question. So I think that what is clear, as we said, is that customers are pushing more on volume than price than this time last year. And one of the big beer players I think just reported and articulated that very clearly, and we see that across bucket. So I think last year, there had been a big input cost rise into their costs going into '23 that they put into the market largely, not everybody, but largely. And this year, inflation is clearly moderating and there is this focus on additional promotional activity or just controlling price on the shelf. So I think that's the core reason. We do see some recovery in consumer sentiment and macroeconomic indicators in Europe in the last weeks. So there is some encouragement there. I think the TAM is still highly competitive in the substrate mix with everything that's going on with energy in Europe and also the sustainability trends, so I think we have the tailwinds from that position. So I think if you add it all together, yes, it's shaping up well for the year. Obviously, we have the football championships. We see quite a lot of labels and activity around that, and so that's also providing a bit of a tailwind. I think to your second question, it's not a direct read-through from increased volumes to dealing with the price cost issues and the energy pass-through, but we are starting to see some encouraging signs that we may find offsetting cost actions, and we'll certainly be able to update on that at the Q2 results.

Our next question will come from George Staphos with Bank of America.

Oli, David, a quick question for you on aluminum. We have these new trade sanctions on aluminum. Hopefully, it's not an issue, but how should we think about Ardagh managing through this? Why should it not be an issue? What are you doing on the supply chain? What are the risks? And then I had a quick follow-on.

Sure, George. No, we're not seeing any material risks on that front at this point. Obviously, the costs are passed through. We did have some timing effects when we had very high raw materials inventories when the sales slowed in '22 and LME spiked. But, a, our raw material inventory is much lower now; and b, we have some additional hedging procedures in place for that. So we don't see a particular risk there. I think our assessment is that, that situation will work its way through in terms of supply getting to the market. Yes, so at this point, I never say never but no particular concerns on that front.

Oli, just a quick one on that. Just what are your suppliers saying about it? Because you have some of this inventory piling up in the warehouses but can't be necessarily used. And this isn't specific to Ardagh, this is more of an industry question, right? But if you have some sort of production outage that occurs elsewhere, then all of a sudden, there's maybe some inability for suppliers to meet demand? What are your suppliers saying about their ability to meet you, meet your demand, if there's some sort of outage or some other issue that arises? And then my second question would be just you mentioned higher labor cost was one of the headwinds in the quarter. And I know you've talked about this before, but can you remind us what's going on there, how you're managing it and what are the offsets?

Sure. No, I mean, to be honest, our suppliers are not raising any concerns at this point about supply or continuity of supply and particularly in Europe. We have some issues with supply in North America more because of mill outages. But again, I think the team has managed through those extremely well. So yes, at the minute, George, nothing in particular being raised with us on any continuity of supply issues on aluminum. And then sorry, I forgot the second question.

Labor cost.

Oh, sorry, labor inflation. Yes, that was just the normal. Obviously, we did get quite a bit of labor inflation coming into the year as real wages caught up with inflation, but our PPI mechanisms and other pass-through mechanisms have dealt with that very well, particularly in North America and South America and effectively in Europe given that the issue we faced was on the energy side. So yes, I think we called it out as the noticeable bridging item but not because we didn't anticipate it or cover most of it in our pricing actions.

Our next question will come from Pamela Kaufman with Morgan Stanley.

This is actually Stefan Diaz sitting in for Pam. It looks like promotional levels continue to improve in scanner, and you mentioned it earlier on the call. How much visibility into customer promotions do you have? And how do you see this progressing through the balance of 2024?

I think in North America, we get quite good data on promo activity, and we certainly can disaggregate that by category. And what you see in that, as mentioned in the remarks, is that soft drinks promotions are definitely improving in the sense there are more of them and getting closer to historic levels. You see that their promotions are definitely sluggish relative to prior years, and that can be explained by some of the dynamics following the Bud Light incident last year. So I think we are obviously more exposed to the soft drink side of the house, and therefore, we've been encouraged by that progression in soft drinks promotions.

And then maybe can you dig into the consumer dynamic a bit in Brazil and maybe what you're seeing in terms of potential substrate shifts back to cans from returnable glass?

Yes. So I mean the industry grew 16% in Q1. And the leader in the industry, which is the main player in returnable glass, grew over 20% in Q1. So I think you can safely say that there's no trend into returnable glass, and the expected reversion into cans is happening. And so not surprising, I think, that it's a long-term trend out of returnable into one-way packaging. I think now that the cost of one-way packaging in terms of LME and conversion costs, metal, dollar price costs have stabilized, and therefore, the inflation in the can has reduced, we see the move back into one-way packaging, which we anticipated. So yes, we're encouraged by that. The consumer is obviously still very price sensitive. You've got 4 or 5 big brewers down there, and you certainly see quite big swings in volumes between them depending on their retail pricing strategies, and we saw that in Q1 in our mix with one of our customers going early with price and, therefore, reducing volume. But otherwise, I think the industry, yes, in a very healthy place, actually.

And our next question will come from Curt Woodworth with UBS.

Yes. I was hoping you could frame out maybe some of your expectations for EBITDA in Europe this year. I know that in the past, you talked about some increased net price headwinds for some of the short-cycle, I think, small German brewers that you are expecting to hurt you. But then at the flip side, it seems like you're seeing better operating leverage in the model and then you have some fixed cost takeout from the German steel closures. So how do you see some of those moving pieces? And could you just frame out what you think EBITDA for Europe could look like this year on a year-on-year basis?

Yes. Look, at the top end of the guide, Europe was about 1/3 of the gain. So the guide was, give or take, $60 million, and Europe was, as I say, roughly 1/3 of that gain. And that was heavily cost-driven from actions taken around our operating cost position and growing into our fixed costs. And then there was some volume growth, obviously. But as you said, we've called out at the beginning of the year that there were some offsets in terms of energy pass-through due to the increased price competitiveness of the market, which I think you've seen in other results that have come to market. So as per Mike's question at the top of the call, do we see any improvement in that where we could, I think certainly, we feel we've derisked the lower end of the guide a bit, but we're not changing it at this point until we come through the summer. But I think with that positive Q1 and the way trends are going into April, we could see some improvement there. And we have also got some possible actions that we can take around the cost side that could offset some of that price cost leakage as well. So at this point, we're not changing anything in terms of guidance, but I think in Q2, we'll have a much better read on whether we see the summer season having played out well and, therefore, whether some of these positive trends that we're seeing at the moment are going to play out into the full year.

Okay. And then getting back to the aluminum question, prices have spiked up very sharply over the past month. And I think in 2023, you called out a metal cost unit drag of roughly $13 million. And I was wondering, could you see a reversal of that headwind given you're continuing to rightsize the inventory? I assume that has cheaper metal units relative to what your pass-through mechanisms would allow for on a revenue basis today.

No, it actually works the other way around, right, which is whatever we bought for an inventory is what we sell for. Yes, I don't think that's going to help us.

Yes. So I think the shortening of our working capital cycle relative to the last time we had it would mean that we are much more in sync with the time of purchase, the time of sale, which always contractually has around about 6 weeks between those two elements to make sure the price evens out. So now that we're back on a more normal working capital cycle, and with us having destocked, if you look at the comparative of Q1 '23, you'll see our inventory balance sheet is down by almost $120 million from last year. You'll see we've got a lot less risk there going forward.

Our next question will come from Arun Viswanathan with RBC Capital Markets.

Great. Congrats on the solid results. Just curious about some of the volume growth that you saw in the quarter and what you're kind of expecting over the next few quarters. So in North America, do you expect to kind of remain in that pretty elevated level, say, 13% or double-digit volume growth? And if so, is that being driven by an increased promotional activity level? Or is it mainly, I guess, comp-driven? And then secondly, in Europe, now this is, again, a pretty decent recovery from some weaker results last year, do you think that this is sustainable? What do you really think is driving it just given that we are still seeing some relatively muted consumer trends and demand growth over there?

Yes. So again, on Europe, I think two or three things are driving it. I think our customers are clearly leaning into volume relative to price compared to last year where a number of big customers, particularly on the beer side, went very heavy on price and, therefore, lost a lot of volume. So we see a significant reversal on that strategy and, therefore, increased volumes from increased promotions or lower pricing at the shelf. I think we are very competitive at the moment as we can in Europe in the substrate mix with the energy cost impacts on other substrates and also the sustainability issues on other substrate sales. I think we're clearly winning in the mix. Although I agree it's not that the economies are doing particularly well, but they are doing a bit better than anticipated. So I think you've got all three factors. And certainly, retailers have been pushing hard on getting back to their value-for-money propositions in Europe. So that all gives us encouragement that these trends can be sustained. We could see Q2 a tick or 2 up on Q1 if these trends continue in Europe, and then we're not predicting anything different than our full year guidance for the rest of the year at this point. North America, I think, will be down a little bit in Q2 on Q1 just because we had some very strong comps in Q2 last year. So we don't anticipate getting to quite these levels through Q2 and Q3. And I think our guide is mid- to high singles for the year. So I think we're comfortable with that still. And then Brazil is also not going to have such a necessarily strong quarter. Hard to call in Brazil because things are pretty volatile, depending on the retail pricing environment. So I think Americas will still be very solid through Q2 and the rest of the year as we've given in our guide but maybe not quite at the level of Q1. The trends, though, are pretty encouraging in both markets, like I mentioned. We see good growth still in energy in the U.S., CSD pretty good, particularly in cans. Sparkling water have been very strong in Q1. And actually, we've had good growth on the sort of sale to FMB side of the house as well in America, which is encouraging. And in Brazil, as I mentioned, the whole industry, up 16%. So we've clearly got pack-mix shift coming back into cans, so yes, lots of positive trends, I think, to support our full-year guide.

Great. And just as a follow-up, maybe can you characterize utilization rates in those regions and, I guess, implications for pricing? I'm not sure if contracts are maybe coming up for renewal in '25 through '27. How do you characterize both the utilization rate environment across those regions and the potential for continued kind of good price negotiations?

Yes. I mean we're weighted more '26, '27 than '25, particularly in North America, so nothing strongly happening right now. But I think we said low 90s was where we think the industry is and where we are in Europe and North America. Nothing particular to change that yet. Obviously, we need to see our peers report out to understand the overall Q1 picture. So we assume we're roughly in that sort of space. And I think we'd reiterate the messages we gave in February, which is we're not seeing anything to concern us on the big scale in either market in terms of pricing. We definitely did see some increased activity on pricing with regional customers, in particular, in Europe in the back half of last year when we went into budget and planning season with some softness in the market, but if we take it at the macro level, we're not seeing anything to concern us in terms of the recontracting that's going to go on between 2025 and 2027.

And our next question will come from Ning Yang with Jupiter Asset Management.

Could you provide some quantitative guidance on your expectation of cash interest, cash tax, extraordinary cost below the adjusted EBITDA line? And also, I just want to confirm, you said that your growth CapEx for next year, for 2025, will be even lower than '24. Would it be like roughly half of '24 CapEx? Would it be your kind of rough estimate? You did confirm that the dividend policy is unchanged. So do you expect to help this dividend policy for the medium to long term, i.e., in the next 2, 3 to 5 years, or that dividend policy is mainly in respect of '24?

Ning, thanks for your questions. Perhaps I'll work backwards, so no change to our capital allocation strategy. So our dividend policy is exactly as it has been. And of course, we just announced the $0.10 per quarter. The Board will determine the policy going forward every quarter but no anticipation of any change there from our perspective, so a flat guidance. I'm obviously not going to comment on 3 years out at this stage in the proceeding. In terms of CapEx, I think directionally, you're right. So we've said that we will definitely have a reduction in growth CapEx next year. Could it be of the order of half what we're projecting for this year? Yes, I think that's not far from being the right forecast. And then lastly, in terms of cash flow guidance, I think our cash flow guidance is largely unchanged from the guidance we gave in February. And I think I did a relatively comprehensive cash flow walk at that point in time. So we said working capital would be a modest inflow maybe of the order of $40 million to $50 million. Maintenance CapEx around about the $120 million mark, as I've said in my remarks. Operating exceptionals, $30 million to $40 million outflow; lease repayments, $90-ish million outflow; cash interest paid, $200 million outflow, something of that order; and then cash tax approximately $35 million. So I think those are the moving parts. You then got BGI around about $100 million, and the rest is below the free cash flow line.

And we will take our next question from Chris Liang with Federated Hermes.

Just one quick question. You've drawn down your ABL this quarter. Could you just elaborate a little bit more as to why you've done that? And then could you tell us what the interest rate on the ABL is?

Sure, Chris. So yes, it's quite normal for us to draw down the asset-backed loan facility at this point in the year. We're at our working capital low point. And therefore, the facility is aimed to help the seasonality of our business. That's the purpose of it being there. So Q1 is our traditional time to draw down on it. And if you look at the comparative last year, you'll see the same. The interest rate on it is about 5.9%, I think, something of that order.

We are going to take another question from Chris Liang with Federated Hermes.

So just actually another question. The Apollo loan that is backed on, I think, I'm quoting here, all material assets of AMBP. Could you give us a little bit more color as to exactly what material assets mean? Does it mean 100% of that ARGID restricted group? Or are there some small carve-outs here and there that we should be aware of?

Chris, I think it's relatively simple. It's a pledge on the equity, both the preferred and the ordinary equity, that the AIHS holds in the business, which is the entire stake that Ardagh Group holds on it. So I don't know any carve-outs from that, but just to be clear, it's on the equity. So it's not directly on AMP assets.

Our next question will come from Paul Simenauer with BNP Paribas.

First, I just wanted to ask on the AMP dividend. Can the financing from Apollo at AIHS prevent that dividend going to ARGID restricted group? And then just want to reconfirm that the preferreds are indeed part of the equity pledge in that transaction.

Yes. So I think the second one, we can confirm. And then in terms of dividend, obviously, dividend policy is an AMP Board matter. But any questions on sort of what happens to it then, I think it's best directed on the AGSA call. The AMP Board will decide what dividend we pay. And at the moment, as we said, we're just reaffirming our current dividend policy.

And we can take our next question from Gabrial Hajde with Wells Fargo Securities.

One quick one. I think, Oli, you talked about maybe coming out of 2023 with about $60 million or $70 million or so of trapped fixed overhead under absorption. Just can you confirm that number for us, if we kind of continue at the pace and hit the mid-single-digit blended organic growth here in '24, what that number could look like going into '25? And then any other, I guess, non-volume related price/cost items that we should be thinking about that are hitting this year that are abnormal or out of pattern, if you will?

Thanks, Gabe. Yes. Look, on the second, I think nothing that we didn't already signal. And if anything, as I said, I think by Q2, we might have found some offsetting cost improvement to some of those price-volume effects that we mentioned in the Q4 results and mentioned in our guide. But obviously, we're not pretty confident in those yet, so we'll wait till Q2. And then I think on your first question on the drag, we think it's probably of the order of about $40 million the year with the closures taking effect. So we'll have the full year effect of the closures by then and also, hopefully, have grown into the capacity as per our guidance.

Okay. Perfect. And last one, and I apologize, Oli, I think this came out relatively this morning, but mentions of a new bevcan plant actually starting up here in the Northeast, KJ Can. Curious if you've heard anything about it from your customers.

Yes, I think that's the one we did know about, unless they're doing a second. So I think we knew about that one. I mean, our overall experience of the U.S. market at the moment is that they're a good operator. But these smaller players and the independents are struggling a bit in the market. Obviously, there is some capacity. And also, operationally, some of those situations have been difficult even for one of the bigger players that's come into the market. So I don't think we have any new reaction to that. I think what we can see in the market is decent growth in certain segments. We've got good growth, and we've got confidence, I think, that growth is going to resume as pricing normalizes and we stop having some of the shocks that we've had the last couple of years. So yes, I'm not too concerned about other parties in the North American market at this point.

Understood. I mean we tend to agree with you on demand, at least with what we're seeing on the promo activity. Good luck.

Thanks, Gabe.

And our last question will come from George Staphos with Bank of America.

To the extent that you can comment, in sort of live mic presentation, gentlemen, are there any innovations in terms of can offerings that will mean some meaningful changes to tooling, any sort of CapEx, say, not in the next couple of years, but 3, 4 years out? From our vantage point, after we've moved to trim cans, we had the mini cans back 5, 7 years ago, there hasn't been a ton of innovation in the can market. Maybe you disagree with that, but anything that we should be mindful of ultimately in terms of what it might mean for you in terms of tooling and CapEx, not this year or next year, but a few years down the road? Second question, it's come up a couple of times on some of the other calls, I just want to raise it with you. Could you update us on your view on carbon footprint, specifically PET versus aluminum, especially for comparing versus recycled aluminum within beverage packaging? If you had any data on that or any thoughts, that would be great. Good luck on the quarter.

Thanks, George. So I think it's a fair comment to say that we've not had a huge innovation that's led to big CapEx in the industry in recent years. And as you say, most of the innovation has been around different sizes or improved decoration or improved functionality of materials and quite a lot of, obviously, process innovation in terms of speed of lines and, therefore, cost performance. We've commented before that we think reclosability remains a need in the industry to really get into some categories like sports drinks and other hydration categories, and we're certainly investigating that closely. There are other innovations around the end, which could also be interesting in terms of different types of ends. And then the big driver that's coming now is the increased sustainability of the package, and that is also driving a lot of innovation around the end because of the difficulty of using recycled content in the current alloy that we use in the ends. So there's the so-called UNI-ALLOY to try and get to a higher recycle percentage for the overall package. In terms of CapEx, I mean, reclosability could involve CapEx on our side of the house. The big goal, of course, is to get it to not involve CapEx at the filler. Some of the other ends innovations could involve CapEx both sides. And similarly, UNI-ALLOY, depending on whether you have to up-gauge and uptick material, could also lead to some change requirements. But none of these are very major. So I certainly wouldn't be modeling any major capital requirements for the industry in the next few years off the back of these. I think they're all at the margin relative to building new lines or new can plants. But all interesting, and I think all will continue to support the cans growth in a world where the sustainability credentials are taking it into new spaces and also delivering for our customers in terms of them delivering on their commitments. And that takes us to your second question about PET versus aluminum. So the main thing, I think, to note there is we've got a very interesting journey ahead of us in terms of decarbonization with things like UNI-ALLOY, with the decarbonization of the upstream grid, with the increased recycling rates and, therefore, increased recycled content. So we can move a long way from today in terms of decarbonization. But also, we can see in some of the studies that are done, that when we get to those types of recycling rates that you see in deposit countries like 95-plus, 99 in Germany, and you get high-recycled content levels, then we can certainly match any package for carbon footprint, and then we've got plenty of room to go from there. So I think we're going to see over the next 10, 15 years, very material progress by the can, and it's already standing in a very strong position on sustainability.

And it appears that there are no further questions at this time. Mr. Graham, I will turn the conference back to you for any additional or closing remarks.

Thank you, and thanks, everybody, for joining the call today. So obviously, as we said, Q1 was ahead of expectations. We're encouraged by what we're seeing in the market, shipment growth and the way that's progressed into April. And with the actions that we've taken, I think that's giving us the confidence to reaffirm full-year guidance and also to see higher adjusted EBITDA growth for the remaining course of the year. So we look forward very much to talking to you at our Q2 results in July. Thanks very much.

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