Welcome to the Ardagh Metal Packaging SA Third Quarter 2024 Results Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Steven Lyons, Investor Relations. Please go ahead.

Thank you, operator, and welcome, everybody. Thank you for joining today for Ardagh Metal Packaging's Third Quarter 2024 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. 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.

Thanks, Stephen. AMP recorded a strong business performance in the third quarter and delivered another set of results ahead of guidance with both segments performing strongly. Global beverage shipments grew by 2% in the quarter versus the prior year, with revenue broadly unchanged, while adjusted EBITDA grew by 15% with strong double-digit growth across both segments. This strong growth in adjusted EBITDA reflects Europe's continued margin normalization post the continent's energy crisis and strong input cost management, and in the Americas, improved manufacturing performance and a favorable volume mix impact. We're encouraged by the strength of beverage can demand in the context of resilient beverage consumption trends across each of our markets during the quarter. We expect that beverage cans will continue to outperform other packaging types supported by customer innovation and the can's positive credentials regarding circularity and decarbonization. Our outperformance through the year versus initial expectations, particularly in Europe, gives us the confidence to further improve our full-year guidance for adjusted EBITDA to $650 million to $660 million. We continue to progress our sustainability agenda and we recently concluded a large-scale virtual power purchase agreement in Portugal, commencing in 2026, which will represent approximately half of AMP Europe's continental energy consumption. This represents a major step towards achieving our 100% renewable energy target for 2030. And also in this quarter, alongside other industry stakeholders, we were one of the two co-sponsors of a two-day summit to advance how the aluminum beverage can value chain can enhance its leadership on key sustainability issues such as decarbonization pathways and recycled content measurement. If we turn to AMP's results by segment. Firstly in Europe, third-quarter revenue increased by 2% to $572 million compared with the same period in 2023, principally due to the pass-through of higher input costs to our customers. We saw solid growth in shipments of over 2% for the quarter compared to the prior year in the context of a strong end market. Growth was broad-based both by product and geography as customers maintained increased focus on volumes, favoring the can in their pack mix, and rebuilding the inventory level. Our own shipment performance was slightly held back by short-term capacity constraints related to certain cabin sizes, particularly after customers were cautious on inventory build in the first part of the year. Third-quarter adjusted EBITDA in Europe increased by 18% to $79 million due to favorable volume mix and stronger input cost recovery partly offset by higher operating costs due to additional manufacturing complexity. We're encouraged by the strong end market through the summer period. This, together with a strong start to Q4 gives us confidence to increase our expectations for shipments growth for our European business to 3% to 4% for the year overall. From prior guidance for low-single-digit growth, the uncertain nature of the recovery in Europe has informed our initial guidance range for overall adjusted EBITDA for the year. Our confidence in the region's recovery underpins our improved overall full-year outlook for the group. Turning to the Americas, revenue in the third quarter increased by 1% to $741 million, which reflected favorable volume mix effects in the pass-through of higher input costs to customers. Adjusted EBITDA in the Americas increased strongly by 13% to $117 million, driven by favorable volume mix effects and lower operating costs, including a stronger manufacturing performance and improved fixed absorption. In North America, shipments grew by 1% for the quarter in line with our estimate for the market, despite energy category softness and against a strong prior year comparable. In the quarter, we saw solid performance in carbonated soft drinks and sparkling waters, which combined to represent over half of our portfolio. We also saw growth in beer, reflecting our contracted new volumes. Overall, this attractive portfolio mix underpins our outperformance year to date with shipments growth of 5% versus modest industry growth. The current softness in the energy category, which represents a low teens percentage of our North American portfolio, is currently restraining our growth and will result in some weakness in the fourth quarter. We're confident in the medium-term outlook for this well-established category. In Brazil, third-quarter beverage can shipments increased by 1% against the backdrop of a very strong market. We enjoyed strong growth across the majority of our customer base but were impacted by specific customer-filling location mix towards the end of the quarter. Volume mix benefited from the timing of end sales as a result of customers preemptively securing their supply chain for the summer season. The Brazilian can market continues to grow very strongly, driven by a supportive macroeconomic environment as well as the pack-mix shift back to one-way packaging. Industry growth for the year looks to be on track for growth at least in the order of a high single-digit percentage. We expect to record a decline in shipments in the fourth quarter, reflecting some continuation of customer indication mix effects, plus the strong prior year performance where shipments grew by 34%. We now expect shipments growth in the Americas to be in the order of a low single-digit percentage for 2024. I'll hand it over to Stefan, our new CFO, who joined us in September. He'll talk you through our financial position before I finish with some concluding remarks.

Thank you, Oli, and good morning, good afternoon, everyone. I'm excited to have joined AMP. The business operates in an attractive market and based on the time I spent in the business so far, I think the company is well-positioned to drive further growth, particularly given our well-invested manufacturing footprint and our strong customer relationships. I've already had the opportunity to meet with several analysts and investors and I'm looking forward to the continued engagement. So now let me comment briefly on AMP's financial position. Our adjusted free cash flow generation for the quarter of $150 million was a strong performance, driven by EBITDA growth and a tight focus on cash management. This included a modest net working capital inflow of $10 million and total CapEx of $34 million, which included $60 million of gross CapEx. We now expect gross CapEx for 2024 to be below $100 million. As a result of our free cash flow generation and EBITDA growth, we reduced our net leverage ratio from 5.8 times at the end of Q2 to 5.6 at the end of the third quarter, and we expect a further reduction at year-end to the low-5s territory, supported by the usual seasonality of working capital inflows and anticipated CapEx of slightly over $200 million, including gross CapEx. We ended the quarter with a liquidity position of $707 million, an increase from $405 million at the end of the second quarter. In the quarter, we completed and drew down the previously announced $300 million term loan and we used the proceeds to pay down our global asset-based loan facility. So this financing is neutral to net leverage, but it strengthens the overall liquidity position of the company. As previously indicated, the new term loan has a five-year maturity and is secured on a power basis alongside our senior secured green notes. The terms of the loan cap dividend payments at the current levels. At the beginning of the fourth quarter, we have entered into a BRL500 million or approximately $90 million local currency credit facility in Brazil, which further deepens AMP's access to liquidity. Overall, we now expect to end the current year with a very strong liquidity position of approximately $1 billion. We have today announced our quarterly dividend of $0.10 per share to be paid in December in line with our guidance and our capital allocation policy, which remains unchanged. With that, I'll hand it back to Oliver.

Thanks, Stefan. So, before moving to take your questions, just to recap on AMP's performance and our key messages today. Firstly, our adjusted EBITDA growth was ahead of guidance for a third successive quarter with both segments delivering double-digit year-over-year growth and global shipments growing by 2%. Secondly, our strong year-to-date performance, particularly in Europe, gives us confidence to improve our full-year adjusted EBITDA guidance range to $650 million to $660 million. And finally, our actions on liquidity and strong cash flow performance resulted in liquidity of around $0.7 billion in the quarter, which we expect to increase to $1 billion in the fourth quarter. Our full-year EBITDA guidance is underpinned by global shipments growth expectation of 2% to 3% and stronger input cost recovery. In terms of guidance for the fourth quarter, adjusted EBITDA is anticipated to be in the order of $140 million to $152 million. Having made these opening remarks, we'll now proceed to take any questions that you may have.

And we'll go first to Anthony Pettinari with Citi.

Hi, good morning.

Hi Anthony.

Good morning.

In terms of the Americas volume outlook, I think last quarter you talked about low-single-digit to mid-single-digit for the year, and maybe that's now closer to low-single-digit. I just want to make sure if that's right? Is the primary driver there the weakness in US energy? I know you also referenced a customer issue in Brazil. Just wondering, from a big picture perspective, what's driving that delta?

Yes, I think it's right to say we're calling down our volume expectation in the Americas. As Europe has strengthened, we do have pockets of weakness in the Americas. The first is the energy category and some of the energy customer mix in North America, where we had a further drag in Q3, and we do forecast that drag persisting through Q4. And then the second, as I mentioned in the remarks, we had a specific customer and actually a specific filling location issue in Brazil. So a customer took a particular commercial position in the market, increased price, and reduced volume, and that meant that one of the breweries, in particular, took some downtime and that affected us as that was a brewery we served. That happened towards the end of the quarter, and we still see that persisting into Q4. So, yes, it's both those factors that have led us to cool down the expectation for the full year on Americas volumes.

Got it. Got it. And then just shifting to Europe, you had a very strong year. And as you look back on the year, like 2024, I guess you had somewhat easier comps, you had Euro, the Olympics, understanding you're not giving guidance for 2025. But can you just talk about some of the drivers of European beverage can demand? And as we think about the next few years, how much of that is driven by maybe substrate share shift, maybe new product categories? Just trying to understand maybe the sort of long-term or mid-term sustainability of the real strength that you and others have seen in European beverage cans?

Sure. So I think, as you know, Anthony, Europe has always been a growth market in beverage cans for the last 20 years, 30 years. We've seen easily average 2% to 3% going into the pandemic, higher than that as we started to see increased pack mix substitution. We have the recovery in Germany, with long-term impacts there. So I think we're seeing that trend normalize, although the consumer is not in great shape, I think they're stabilizing a bit. We definitely see mix gains this year in all of our markets against both plastics and glass packaging in Europe. So yes, we look forward into 2025 and beyond with a lot of confidence for the growth profile of Europe. I think the factors that are in place this year will continue to be in place in terms of pack-mix, in terms of the Germany recovery, and in long-term recovery. Additionally, I think we also expect to see some strengthening on the consumer side as inflation moderates and interest rates come down. So, yes, we believe we left at least one to two points of growth on the table this year and in the quarter due to constraints we had on certain sizes that were particularly growing strongly in the market where we had less capacity, and also based on early muted inventory build by our customers in the first part of the year. So we know our number could have been better. And, yes, we're looking forward into 2025 with a lot of confidence for the growth of Europe.

Okay. That's very helpful. I'll turn it over.

Thanks, Anthony.

We go next to the line of Cashen Keeler with Bank of America.

Yes. Hi. Good morning. Thanks, Oli and Stefan. I guess going off the last question, as you look out to 2025, directionally, as you sit here today, what would you expect in terms of market growth in each of your regions and maybe some of the drivers behind that? And then how would you expect Ardagh to perhaps perform against that?

Sure. In Europe, the market has traditionally been around 2% to 3%. It could stay in that range or even exceed it if consumer strength improves as we move into 2025, which seems likely, especially with the shifts in pack mix that we're observing. We expect to be aligned with that market since we have a broad presence in Europe, primarily in the North but also with representation in the South, balancing beer and soft drinks. Turning to North America, we view it as a low singles market, but there remains decent upside potential from pack-mix shifts, particularly given the innovation in cans and some pressures on alternative substrates. This market is estimated to grow about 1% to 1.5% this year, with the possibility of exceeding that, implying we could be looking at a $120 billion can market. In the event we reach the 2% to 3% growth range, we would need to establish a new chemical plant each year. We maintain a constructive outlook on the recovery of the energy category, which has experienced a slight decline this year after strong growth previously. There are significant players in this space with a proven track record of delivery and innovation. We've noticed more shelf space in retail devoted to energy products, so we expect the market to remain in low singles, with our performance broadly in line. Currently, we don't see any notable contractual gains compared to past years. In Brazil, we've witnessed remarkable growth this year and are still in double-digit territory year-to-date. While we have indicated high singles for the year, it could be better, although that's likely to hold. Brazil does experience occasional dips, but historically, those have led to several years of strong growth afterward. We would conservatively estimate mid-single digit growth for Brazil in 2025. Regarding our growth, we remain somewhat cautious compared to the market because it closely ties to the commercial strategies of the major brewers, and there are only a few key players in that space. We don’t compete in the soft drink segment, which has also been strong this year. Depending on our customers' commercial strategies, growth can vary. As noted earlier, we have experienced double-digit growth across most of our portfolio, with one area showing weakness. Therefore, we're currently positioning ourselves to be inline with the market, perhaps slightly below to stay cautious. Overall, if we look at the market trends as of January 1st, we would have embraced them, as there has been strong performance across our markets, along with increasing supply constraints in certain sizes or regions. This is all very structured for our business.

Got it? Okay. And then if I could just sneak in two more on CapEx. I understand you called out that growth CapEx will be lower than the $100 million next year. So I guess first on that, how long do you think you can grow into your current network without considering more growth CapEx? And then additionally, on the same token, can you just help us further understand your path on deleveraging from here, and when you would expect to achieve some of that targeted leverage range? Thanks.

Sure. Yes, I'll kick that off and I'll pass to Stefan. So I think we're broadly in the same as we were earlier in the year that we've got a year or two of growth into the existing capacity. Obviously, we do sometimes have to spend to adjust the networks to different regional or seismic exchanges as we did in the US this year. We see a couple of those kind of projects to, again, align ourselves with growth, particularly in Europe, where we were not perfectly aligned this year. But at the moment, from an overall capacity point of view, and with the continued ramp-up of a couple of projects, especially in Europe, we think on current market trends, we could go for another year or two without any significant additional capital growth capital. I'll pass the deleveraging question over to Stefan.

Yes, I believe the deleveraging comes from various factors. First and foremost, organic growth and EBITDA growth that lead to cash flow. We mentioned the CapEx side, where we anticipate lower BGI growth. These are certainly two of the major contributors. Additionally, the fundamentals of running a business effectively on the working capital side are also important, as we expect a slight inflow for the full year and will continue to work on that. Combining our market growth with our own organic growth and some other cash flow strategies should help us achieve a deleveraging profile.

And we'll go next to Josh Spector with UBS.

Hi, thanks. Good morning. I wanted to just follow up on some of the comments in Europe. So I think, in the past couple of quarters you talked about some production constraints due to kind of mix and pack size maybe being out of sync with where you had capacity. I'm more curious, does that demand or volume get lost, so does that go to another competitor because you can't fill that? Is that something you catch up on in the following quarter or the following year? Just, can you walk through some of those dynamics, please?

Yes. Sure, Josh. So look, I think it was clear that the market overall was very tight in Europe this year. So I think it wasn't just us that had some constraints in certain regions and sizes, and we saw that because customers did keep looking for support. So I think that not all of that volume necessarily got picked up elsewhere, but some certainly did. And then I think you have a whole mix of things that happen with that. Sometimes, yes, those volumes can stay, sometimes they'll come back because obviously, we have contractual situations. And we're not talking about a huge effect on our overall business at the total level. So I think, yes, we traditionally in the European market have seen some of these issues because it's a complicated market, multi-regional, multi-size, many different customers. And so getting the exact alignment, particularly in a year like this year where we went in with relatively low levels, customers were clearly cautious at the back end of last year. They remained quite cautious through Q1. At that point, you can get into a situation in the season, where you don't have the fresh production capacity to meet all the demand, as it turns out. So, yes, I don't see it as a major effect on our business, but it certainly held us back by a point or two of growth.

Okay. I guess what I'm trying to understand is, does that help you guys next year? So are your customer inventories lower than where they would like to be? And if the industry grows X, you might grow a point above X, or is that not the right way to think about it?

I think inventories will be resolved this winter and Q1. So I don't think the industry will do what it did last year, where we definitely saw the customers running for cash towards the year-end and we definitely saw caution off the back of that in Q1. So I don't think we'll see some inventory rebalancing, and that's partly why we see Q4 stronger than last year. You can already see if you like your point of extra growth sitting in our guide for Q4 and in the overall industry guidance. I've seen this already from our peers that we expect a better Q4 2024 than 2023. So I don't see it as a massive impact on 2025, but I think it will get resolved over the next six months.

Understood. Thank you.

Thank you.

We go next to Arun Viswanathan with RBC Capital Markets.

Great. Thanks for taking my question. Hope you guys are well. Maybe I can just get your thoughts on different categories. I know that you've called out some weakness in energy in North America, but as you look into maybe say beer and some of the other markets around water and carbonated soft drinks, are you seeing any incremental kind of improvements in demand levels? It seems like we're settling down now with the lack of destocking, but it still appears that the consumer has been under quite a bit of inflation pressure and not really seeing any material improvements in some of these categories. So maybe I just get your thoughts on those other categories as well, both beer and NAVs as well.

Sure. So I think the scanner data would say there's been some improvement actually. If we look at the last sort of one to two months, there's clearly a trend of improved can sales across categories, which we also think we can detect. I think the particular areas of strength, carbonated soft drinks is definitely one. So CSD shape and sparkling waters, I think also very strong this year and again, particularly strong in the last four or eight weeks. Beer is weaker for sure, but, obviously, in our portfolio, we've gained some contractual positions in beer, so we see a bit of growth there. And then, yes, the rest of the alcohol space had for us a very strong first half and a slightly weaker Q3, but it had a very good first half. So, yes, the main area of weakness clearly is the energy category.

Thank you for that. As a follow-up, while we've discussed the strong growth in Europe, could you share your thoughts on Latin America and Brazil? There were a couple of years where glass was gaining traction again, but it seems like there has been a recent shift back to cans. What do you anticipate for sustainable growth in Brazil moving forward? Thank you.

Sure. I believe we are witnessing a long-term trend, spanning 20 to 30 years, of moving from returnable glass to one-way packaging, a change that is evident in all markets as GDP per capita increases. This trend can occasionally be disrupted by significant economic events, which we've seen from time to time. Specifically, as we emerged from COVID, we faced the challenge of high aluminum prices on the London Metal Exchange, which posed a significant issue for our customers. While it was more of a hedging concern for us, for them, it meant increased costs in the market. We also experienced inflation affecting other parts of our cost structure. Consequently, we observed the largest brewers deciding to shift intentionally back to returnable two-way glass, leveraging their substantial systems when necessary. Typically, this shift results in a loss of market share in off-trade segments, making brands less relevant. Currently, we're witnessing a return to off-trade as can costs have stabilized. Normally, this is a strong trend that continues. Historically, if we analyze long-term data, there are periods of one to two years with stagnant can growth, after which robust growth often follows for several years. Therefore, I believe a mid-single-digit growth rate for Brazil seems reasonable, especially given our current double-digit growth this year. There remains significant potential for the continued transition to returnable glass. That summarizes our perspective on Brazil. I don’t have insights on other Latin American markets since we don’t operate there.

Thanks a lot.

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

Hello, good morning, or good afternoon, and thanks for taking my questions. Maybe Stefan starting with you. Great name, by the way. The messaging has been pretty clear from the company that your arrival doesn't necessarily mean, I guess, any major changes to AMBP's capital allocation strategy. I guess that said, after a month and a half at the company, maybe, what are your first impressions and any specific things you think the company can improve on?

Yes, look, the first impressions are actually very good. I spend a lot of time on the road. I went out to the US, North America, to Brazil and traveled to then Europe, and I had the opportunity to meet the regional leadership team, to meet the finance teams, to go into various sites, plants with the technical and engineering centers, and obviously spend a fair amount of time. The finance team and the operational teams, on assessing sort of the processes, the data availability of information, decision-making processes, et cetera. So I think all that has been very positive. I think it's a well-run company. I think in terms of going forward regarding improvements, I think every company has things that are to be improved, and it's all about a mindset of continuous improvement. I come from the Danaher world that's embedded a little bit in the DNA. So I think there are a lot of things we continue to work on. I think the commercial excellence, I think the operational side, I mean, there's a lot of capital employed. Generally speaking, the industry is asset-intense, getting the returns out of the deployed capital and continuously working on your cost position. So I think, as you would probably expect from, I think any incoming CFO, I think there are a lot of good things to build on, but there are things to improve. I think in that spirit, we continue to travel on this journey here.

Great. Thanks for the color. And then correct me if I'm wrong, but I believe you guided to $30 million to $40 million of underabsorption in 2024, which is actually a benefit when you compare it to 2023. Profitability came in better than we were modeling. So I guess maybe is the $30 million to $40 million under absorption still the right way to think about 2024? And I understand you're still in your planning phase for 2025, but I guess if we assume sort of normalized low single-digit global volumes, initially, what do you think that under absorption would be next year? Thanks.

Sure. Yes. Look, I think it's still the right way to think about this year because I think we're actually a little bit under our volume guide for the year with the weaknesses with the energy category in North America and now there's specific issues in Brazil. So I don't think anything has changed on that as we look at the year. The main gains we've made this year have been around input cost recovery where we had a very strong performance, which has helped us on the price cost line. And then looking into next year, as you say, we're in the middle of the budget process, so we're not detailing anything out, but I think it's fair to say that we expect the $30 million to $40 million to drop again next year as we grow into the capacity. The exact number, we won't guide today, but we can talk about at the full-year results. But I think it's reasonable to expect some improvement on that line as we, as I say, grow into the underused capacity.

Great. Thank you so much.

Thank you, Stefan.

We'll go next to Gabe Hadje with Wells Fargo.

Hi, good morning, this is Alex on for Gabe. My question is about Europe. Looking at the scanner data, it appears that promotional activities were quite high during the first half, likely influenced by events like the Olympics and the Euro Cup. If promotional activities decrease in 2025, do you still believe that volumes will meet your expectations? Is there a specific level of promotional support you believe is necessary for achieving low-single-digit growth next year?

Yes, look, I think if you look at the packing of this year, we actually see in the scanner data that May and June were the weakest months actually with the weather in Northern Europe being terrible, and there was definitely a bit less sell-through there. Whereas actually, July and August were very strong. If we look at the data we're beginning to get for Q3 on the can side, you could be talking over 5% for soft drinks side, and sort of in the 2% to 3% range on the beer side. So I think that was the shape of the year, which tells you this is not all about the Euros; it's not all about the Olympics, which we never thought it was. The Olympics have never had any particularly major impact on our volumes that we've been able to discern over the years. Again, I take you back to the fact that Europe's been a growth market for 20 odd years with normal levels of promotional activity. I'm not sure we're even back to normal levels of promotional activity yet. We don't have chapter and verse on that, but I think we've certainly seen customers leaning into volume this year after two years of really not doing that. I think there could still be further to go on that dimension actually. But I don't think that Europe's growth depends on that. I think we just need to get to what you might call normal, which I think this year is a reasonably normal year on promotional activity. And then all the other factors play in, which is, again, the advantages of the can and the pack-mix growth in certain segments from a liquid point of view, growth in certain regions from a liquid point of view. As I say, the recovery in Germany is still pretty strong. So yes, Europe doesn't need some elevated level of promotional activity to grow next year. I think that all the factors are in place for a good level of growth next year without that.

Thanks. Another way to look at this is that as beverage producers focus on increasing volumes in 2025, I would assume they are becoming more cautious about procurement costs and other related factors. How are you approaching the next year, especially as some of your customers may be looking for more favorable pricing terms?

I mean, I don't think we've ever been in a year where they haven't sought additionally improved terms. So I don't think there's anything new in the can industry from our customers looking for better pricing. But then equally, we need to get paid for what we do, and we have contractual structures and long-term contracts. So more of the factors that will drive this in Europe in 2025 will be some of the PPI rates, some of the ways that the shorter-length contract negotiations play out through the autumn rather than any particularly elevated activity by our customers, who, in general, are seeing moderating input costs in the last year, including our input costs, and also some of the, as I said, the broader LME-type costs that are coming into that P&L. If I take the euro in particular, I think there could be some headwinds from the falling PPI for our business with the pass-throughs that equally many other things on the price-cost line will affect how that plays out. And we're certainly not calling it yet. We need to go through the autumn and do our full budget process. If I take our business as a whole, we have some very robust pass-through mechanisms, particularly in North America, but also in Brazil. So I have no particular concerns on that front. If I take the business as a whole, I think there could be a few headwinds in Europe, but we've got many other levers to pull to address those.

Perfect. Okay. Thank you very much.

Thank you. We'll take our next question from Michael Roxland with Truist Securities.

Yes, hi guys. This is Niccolo Piccini on for Mike. Thanks for taking my questions. I guess just to go back and touch on promotional activity again, can you comment on trends you saw in North America over the last quarter and maybe where you think that's going to end up as we head into the end of the year? And then off of that just kind of what the cadence of shipments were in North America if you could share?

Promotional activity has returned to levels similar to last year, particularly in soft drinks, although our participation in beer promotions has been limited due to muted activity in that sector. Overall, the current levels are not as strong as before the pandemic. While we are comparing 2023 numbers to earlier periods, we have not yet reached those pre-pandemic levels. However, recent data shows growth in canned carbonated soft drinks over the last four to eight weeks, indicating positive performance. Moving forward, I believe we will continue to focus on volume and promotional efforts, although we're experiencing growth without fully returning to pre-pandemic promotion levels, which could be beneficial for the industry by ensuring profitability within the value chain. On the beer side, the outlook appears less optimistic. Looking ahead to 2025, we remain positive about carbonated soft drink growth in North America, while also facing ongoing challenges with plastics in various customer portfolios, which provides a continuous advantage for cans in this category.

Got it. Thank you. And then just on a certain cadence of shipments as you move through the quarter.

Yes, July was very strong for us. August had a strong comparison but was a bit weaker. September was somewhere in between, and it appears that October is showing a similar trend. Europe is performing very well in October, exceeding our Q3 results by more than double. As for Brazil, we've already discussed the specific challenges there, indicating that it is definitely weak in October.

We'll go next to Roger Spitz with Bank of America.

Thank you very much. I wonder if you might go over some of the other cash flow items you talked about EBITDA and growth CapEx being a little less than $100 million. Is base CapEx still $120 million? And have you changed anything from cash interest, cash taxes, working capital, lease closure cost, startup costs, et cetera?

Yes, so on the working capital side, we still expect sort of a moderate inflow order of magnitude $40 million to $50 million for the full year. On the cash interest probably slightly below $200 million. The cash tax sort of in the 30-ish sort of order of magnitude. Then on the lease side, we continue to expect around $90 million, and I think we also guided towards a little bit over $50 million on the cash exceptional side.

Perfect. And then just when you borrowed the $269 million term loan from Apollo, I mean cash is fungible, but did you effectively use it to both pay down the ABL and then cash to the balance sheet?

Yes, correct. It was used to pay down the ABL. So it's really neutral from a net leverage perspective. But that was the way we used to proceeds.

Great. Thank you very much.

Welcome.

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

Hi. Thanks for taking my follow on. So aluminum prices are roughly up 20% year-over-year. Obviously, lower than the levels we saw in early 2022. I understand that aluminum is a direct pass-through for you, but do you think there's a price level where you believe your customers may start to substrate switch to protect their margins?

There is definitely a situation like that, as we observed in Brazil with the returnable switch, but I believe it is significantly higher than that. We were previously at levels of 3,000 to 4,000 at various points in that cycle. So, we have a long way to go from there, and we have noticed that the overall input cost of the can has been relatively favorable over the last 12 to 18 months compared to other materials. Therefore, we believe we are in a strong position regarding our customer mix choice, and we have all the evidence to support this from this year, especially in Europe.

Thank you.

Thanks, Stefan.

And at this time, we have no further questions. I'll turn it back over to our speakers for any additional or closing remarks.

Yes. Thanks, Melinda. Thanks, everyone, for joining today. Obviously, a good quarter for us of earnings ahead of expectations, which is the third successive quarter we beat against our guidance. I am particularly pleased that with the strong year-to-date performance, we've been able to raise the full-year guide as well. So again, thanks for taking the time, and we look forward to talking to you at the full-year results.

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