Final Results

Record profits driven by Beverage Cans

Rexam, the global consumer packaging company, announces its results for 2011.

Underlying business performance1

Highlights

• Underlying profit before tax £450m - up 15%

• Strong free cash flow2 of £277m - net debt reduced to £1.3bn

• Return on capital employed improved to 13.7%

• Efficiency savings of £35m

• Total dividend up 20% at 14.4p

• Beverage Cans underlying operating profit up 13%

• Sale of Closures business successfully completed, now actively marketing Personal Care for divestment

Commenting, Graham Chipchase, Rexam's chief executive, said:

"We are delighted with the continued progress of the business in 2011. Our strong profit growth was achieved by a better than expected performance in our Beverage Cans business, primarily in Europe, and a continued focus on cost management.

"Looking ahead, we remain cautious about the global economy and, as previously indicated, we face certain cost challenges in 2012 together with the impact of a key Healthcare product coming off patent. The volume environment for Beverage Cans remains robust, although we do not anticipate any turnaround in the performance of Plastic Packaging in the near term. Overall, we expect 2012 to be another year of progress as we continue to focus on cash, costs and return on capital employed."

Statutory results

22 February 2012

Live webcast

A presentation for analysts and investors will be held today at 09:00 UK time at the Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ. Subject to certain restrictions, the presentation will be webcast live on www.rexam.com at the above time and subsequently will be available on demand.

A dial in conference call will be held today at 14.30 UK time. For callers in the US, please dial +1 480 629 9722 or +1 866 225 8754. The dial in number in the UK is +44 20 8515 2302 or 0800 358 5256. The access code to the replay: 4507194#.

A copy of this press release has been posted on the Rexam website, www.rexam.com.

This press release contains statements which are not based on current or historical fact and which are forward looking in nature. These forward looking statements reflect knowledge and information available at the date of preparation of this press release and the Company undertakes no obligation to update these forward looking statements. Such forward looking statements are subject to known and unknown risks and uncertainties facing the Group including, without limitation, those risks described in this press release, and other unknown future events and circumstances which can cause results and developments to differ materially from those anticipated. Nothing in this press release should be construed as a profit forecast.

Editor's notes:

Rexam is a leading global consumer packaging company. We are one of the leading global beverage can makers and a major global player in rigid plastic packaging. We are business partners to some of the world's most famous and successful consumer brands. Our vision is to be the best global consumer packaging company. Rexam's sales from continuing operations in 2011 were in the region of £4.7 billion. We have close to 85 plants in 25 countries and employ around 19,000 people. Rexam is a member of the FTSE 100 and its ordinary shares are listed with the UK Listing Authority and trade on the London Stock Exchange under the symbol REX. For further information, visit www.rexam.com.

CHAIRMAN'S STATEMENT

Rexam's record results for 2011 extended the strong progress we made in 2010. We continued to focus on our strategic priorities - controlling costs, optimising cash and improving our return on capital employed - to deliver another set of excellent results and further strengthen our balance sheet. The board is proposing an increased final dividend of 9.7p per share, making a total dividend of 14.4p for the year. Against a background of increasingly tough economic conditions, this performance bears witness to the underlying strength of the business.

Under Graham's leadership, the executive team and all our people have continued to manage those levers over which we have control. We are driving operational excellence, through relentless cost control and improved asset utilisation. We are strengthening our customer and supplier relationships, with our focus on quality, service, value and innovation. We are building a winning organisation, fostering a culture which enables our people to achieve great results. We are expanding in emerging markets, with disciplined investment plans announced in Brazil and India, which will develop and extend our existing geographic footprint. And we are managing our portfolio of businesses, ensuring all the constituent parts add value to the whole. As part of our focus on improving our returns across the Group, we sold our beverage and specialty Closures businesses in 2011 and have recently started the process to market the Personal Care business for divestment.

A major challenge as we move forward is the fragile global economy in which we have to operate. That said, Rexam is well positioned to anticipate and react swiftly to changing circumstances and adverse conditions.

It is important that as a board we are fully cognisant of our responsibilities to all our stakeholders: to our shareholders, who have experienced good returns in 2011; to our customers and suppliers with whom we have continued to build mutually beneficial relationships; to our people, in whom we continue to invest; and to the environment, where we have again reduced our carbon footprint.

The way the Group manages risk is also vital for our future prosperity. It was therefore encouraging that, in our review of board effectiveness, the management of risk was acknowledged as an area where we perform particularly effectively. Also coming out of this review were indications that even more needs to be done in the areas of strategy, people development and succession. While more time is spent on these areas than ever before, we rightly concluded that in such a turbulent and competitive world these issues will continue to be given a strong focus.

We have seen a number of board changes.

Leo Oosterveer joined the board as a non executive director in September. He leads the global food service division of Unilever and has a proven track record in marketing, sales and strategy development gained both in Europe and Asia. His global management experience will be a great asset to the board and to Rexam.

Carl Symon retired from the board in November, having played an important part in Rexam's success as senior independent director and chairman of the remuneration committee. I thank him for his hard work over the past eight years.

During 2011, I announced my retirement and so this is my last statement as chairman of Rexam. I am delighted that Stuart Chambers is taking over from me as chairman. His extensive business experience, including his senior executive business to business experience and his broad global expertise, will be of tremendous benefit to the board's future deliberations and to the success of the Company.

I am proud of what, together, we have achieved since I joined the board. Rexam is in a strong position and well prepared to tackle the challenges ahead. We have clear objectives, strong management and talented people.

It just remains for me to express my appreciation to my fellow board members for their contribution and support, not just during this year but since I have been chairman, and to say how grateful I am for the confidence of our shareholders, customers and suppliers. But I should like to save my final words for our people. In the challenging global economic climate of recent years everyone within Rexam has shown resilience and dedication, and there is so much enthusiasm and commitment for what we do that it is impossible not to be inspired. I have enjoyed greatly my time at Rexam, and wish the Company and all its people every success in the future.

Sir Peter Ellwood, Chairman, 22 February 2012

CHIEF EXECUTIVE'S REVIEW

In 2011, against a tough economic backdrop, I am proud to report that we have delivered on our commitments for the year. As you will see from the detail in the operating and financial reviews on pages 9 to 25, we delivered strong profit growth. It was particularly pleasing to see that, despite a deteriorating economic climate and a disappointing performance from a number of businesses within Plastic Packaging, the Group managed to maintain its momentum throughout the year.

In terms of cash, we continued to focus on tight management of working capital and a disciplined approach to investing capital. We increased capital expenditure in continuing operations to £227m (2010: £189m), 1.2 times depreciation. Projects included the reopening of the plant in Pouso Alegre, Brazil, a new specialty can line in Mexico, the investment to lightweight can ends in North America and the conversion from steel to aluminium of can making lines in Egypt and Spain. While we have seen no signs of weakness in can volumes, we are monitoring the situation closely to allow us to defer spend should market conditions deteriorate. Free cash flow from continuing operations was £277m before dividends (2010: £298m).

Our relentless focus on operational excellence helped to achieve good cost savings, improve returns and offset input cost inflation. Three main areas have generated the £35m of savings and efficiencies delivered this year: reduction in material usage, especially downgauging and lightweighting of our aluminium cans and can ends; lean manufacturing, which includes investing in new equipment and optimising processes to improve productivity and reduce scrap; and strengthening the organisation and practices of our Group supply chain which has enabled us to capitalise better on our global footprint and manage our metal, resin and other direct material costs more efficiently. Early in 2012, we were delighted when our Águas Claras beverage can plant in Brazil was awarded The Shingo Prize, generally considered the pinnacle of achievement in operational excellence.

Return on capital employed (ROCE) improved to 13.7% (2010: 12.3%) thanks to good profit growth and disciplined capital management. We are on track to reach the top end of the 12% to 15% ROCE target range by the end of 2013. We expect the most significant uplift towards that target to occur in 2013 as the contracts signed in North America to recover the beverage can volume lost in 2011 come into force. In addition, we continue to manage actively the portfolio to improve returns.

Our net debt reduced to £1.3bn and our balance sheet is stronger. Reported net debt/EBITDA was 1.8 times compared with 2.4 times at the end of 2010. Our credit rating is investment grade with stable outlook with both Moody's and Standard & Poor's. We have no significant debt maturities until 2013.

In the annual report 2011 we highlighted a number of priorities, in addition to efficiencies, to improve our returns going forward. These were maximising asset utilisation, focusing on product innovation, managing our business portfolio and capitalising on organic growth opportunities in emerging markets, all the while maintaining strict capital discipline.

good progress on asset utilisation

For the year, the Group's overall growth was in line with our expectations, and asset utilisation plans remain on track. In Beverage Cans in Europe, capacity utilisation was good as a result of strong market growth. In Western Europe, capacity utilisation was around 95%.

In North America, the wider market slowdown meant that demand for standard can volumes was lower than expected but we saw stronger growth in specialty cans. Capacity utilisation was around 80% but we expect to see an improvement going forward as most of the volume loss in 2011 will have been recovered by 2013 through signed contracts.

In South America, our specialty can capacity was fully utilised as volumes continued to grow. The newly installed lines in South America have come on stream and are making cans that last year were imported. Our overall capacity utilisation rate in the region was about 90%.

innovation strengthens customer ties

Innovation helps to strengthen ties with our customers and stimulate demand. During the year we saw the successful launch of a number of new products in both Beverage Cans and Plastic Packaging. Our award winning Fusion™ bottle is starting to gain commercial traction and in Russia we introduced Europe's first 75cl beverage can to fill a gap in that market. In Brazil, our use of innovative technologies such as high definition printing, UV and fluorescent inks has helped customers strengthen their brands, increase their sales and win awards.

In Beverage Cans, we established a Global Innovation Council during the year to support further our customers' brand objectives as well as to help us align and refine cross regional opportunities, processes and product development.

In Plastic Packaging, we launched new pumps and airless dispensing tubes to protect fragile formulations as well as a new spray technology, Panache™, designed to deliver an improved consumer experience through the improved spray pattern and thus help our customers build their business. In Healthcare, Advancia™, a new generation of nasal spray pumps specially designed to enhance protection of preservative free drugs, is expected to help consolidate our position as a leader in this field.

In 2011, we piloted in our European beverage can operations a new process for measuring customer satisfaction with scores encompassing all areas of interaction from key account management through to fulfilment and including our performance on innovation and, where applicable, sustainability. This process will be rolled out across the Group in 2012.

balancing the portfolio for growth and returns

On 1 September, we completed successfully the sale of the beverage and specialty Closures businesses toBerry Inc. The underlying fundamentals of the business had changed and it was clear that the return profile going forward was not adequate for the goals we have set ourselves. The sale helped focus our operations and was fully in line with our strategy to deliver profitable growth and to improve returns.

Following a strategic review of our Personal Care business, which includes the High Barrier food container operation, the board recently decided that, given our focus on returns, it should be marketed actively for divestment in its entirety. We also believe that this will improve the range of projects in which we can invest in both Beverage Cans and Healthcare. So, while Personal Care is an attractive, well run business and given that we can generate better returns elsewhere in the Group, it is likely to be of greater value to another owner.

Healthcare will remain a key component of the Group. It is a business with good growth prospects, well established customer relationships and long term contracts, as well as high barriers to entry and a strong return profile.

growth in emerging markets

In 2011, our sales in emerging markets grew 8% as we continued to support our customers, and we see further potential for both our Beverage Cans and Healthcare businesses.

In Beverage Cans, we are seeking further opportunities for investment as well as bolt on acquisitions or joint venture partnerships. We announced in August that we were expanding our existing plant outside Mumbai to increase our manufacturing capacity in India. We were the first to manufacture two piece beverage cans in India and this latest investment will help secure our foothold and develop the market further. India offers significant growth potential as a result of increasing GDP per capita as well as the presence of major global and regional customers, especially from the brewing industry.

There are a number of regions where we see good opportunities to develop new positions or expand the operations that we currently have. In the Middle East and Africa, for example, strong GDP growth and the relatively low penetration of beverage cans make these attractive growth markets. There is also a favourable movement in the pack mix towards cans supported by a youthful population more disposed towards this type of beverage container. In addition, the resilience of the can is well suited to the often tough conditions that exist in the supply chain. The Middle East market is fragmented with a high degree of vertical integration and we are confident that opportunities for consolidation will emerge as markets mature and customers seek credible independent supply sources.

Asia also has attractive beverage can growth rates. Beverage can suppliers are already investing to meet that increased demand. We do not directly own any can making facilities in South East Asia but we are exploring opportunities in the region continually. The increased internationalisation of our global customers is an advantage and we are pursuing opportunities arising from existing relationships and are in regular talks about their expansion plans into these regions. We have decided that China, which is currently a highly fragmented market, is not a priority at this time. Having said that, we shall monitor the market to ensure that we are in a position to act on any favourable opportunities should they arise.

We continue to invest in South and Central American markets but, as demonstrated by the deferral of the opening of our Belém beverage can plant in Brazil until the second half of 2012, we will ensure we match capacity with market demand. We have one plant in Mexico where we make both standard and specialty cans and where the demand for specialty cans is growing strongly. Mexico has a high per capita consumption of drinks sold in cans. Around half of the can making market is vertically integrated with the beverage producers and we believe that there is potential for consolidation over time. In Guatemala we have a successful 50/50 joint venture with a well established and respected regional packaging company in this high growth region. We have increased production in recent years and we see further potential for consolidation in the market and for bolt on acquisitions.

In Healthcare, we are in the process of doubling the capacity of our plant in Bangalore to meet continued growth in the region. At the same time we are finalising a contract to manufacture generic drug delivery devices for a customer in India which will, in time, require us to build a plant in Western India.

sustainable thinking

Last year we highlighted the importance of securing Rexam's long term future around a sustainability framework based on the three main areas of products, operations and people. We have made good progress in developing this model during the year, further refining and adding specific measures and targets to the commitments we set out last year.

Building a winning organisation is critical to our success. Making sure that our people work in a safe, fair and enjoyable environment is core to our values. Our safety statistics remain strong but, although there were a number of outstanding performances by some of our businesses and individual plants, I am concerned that, as a Group, we did not hit our 10% year on year improvement goal. We are determined to deliver a better performance. We will be learning from the experiences of our best performing plants and redoubling our efforts to ensure that in 2012 we make further progress towards our 'zero accidents' target.

During the year, we also implemented a number of action plans to address the feedback of our 2010 employee survey. Areas such as training and development, as well as communication and recognition, were recurrent themes across the Group in the focus groups that we held and many of the plans have been targeted at these areas. In response, we have made a concerted and successful effort to prioritise the visibility of our leadership teams. On training and development, one of our objectives is to enable performance that will differentiate our business. We saw the successful deployment of the Rexam Business School and a good uptake of the courses and training on offer, which range from half hour online courses delivered via the company intranet in a range of languages, to comprehensive, residential courses focusing on specific skills and areas of leadership. On recognition, we introduced the 'Blue Chip' programme, a cash award equivalent to the value of 50 Rexam ordinary shares, which helps deliver immediate recognition and reward to people who show outstanding performance and excellence. To date, more than 220 Blue Chips have been awarded and the programme has proved to be a great success.

OPERATING REVIEW

In 2011, Rexam as a Group delivered a strong performance. Sales overall increased 2% to £4,734m in line with our GDP+ goal as volume growth in Beverage Cans offset a mixed performance in Plastic Packaging. Group underlying operating profit rose 7% to £549m mainly due to improved volumes in standard cans in Europe and in specialty cans in all our regions, supported by our continued focus on cost reduction and efficiencies. Underlying profit before tax increased 15% to £450m chiefly due to the improvement in operating profit and also to a lower total underlying net finance cost. Underlying earnings per share rose 15% to 36.1p.

On an organic basis, which excludes the impact of disposals and currency translation, sales grew 4%, mainly due to the strong performance in Beverage Cans. Organic underlying operating profit increased 8%.

statutory results

On a statutory basis, which includes the effect of currency translation and exceptional and other items, profit before tax from continuing operations was £431m (2010: £338m). Exceptional and other items totalled £19m before tax comprising restructuring, amortisation of certain acquired intangible assets and fair value changes on financing derivatives. Total profit for the financial period, which includes discontinued operations, was £376m (2010: £124m) and total basic earnings per share was 43.1p (2010: 14.2p). The financial review on pages 15 to 25 contains a reconciliation between statutory and underlying results.

beverage cans

Beverage Cans is a high speed, high precision manufacturing business. Excellence in manufacturing and engineering, along with innovation, quality and customer service, are key to delivering value to our customers. Rexam Beverage Cans is a global business centred on three main regions: Europe, North America and South America. It also has operations in Russia, the Middle East, India, China and Central America. This mix gives us a healthy exposure to both developed and emerging markets. Our businesses collaborate on a global basis in areas such as supply chain, innovation, engineering, research and development and marketing intelligence. In all, Beverage Cans accounted for 81% of Rexam's underlying operating profit from continuing operations (2010: 77%).

In 2011, Beverage Cans outperformed our expectations. Organic sales, which adjusts for the impact of currency translation, were up 4% including the expected market share loss in North America. Excluding standard cans in North America, our beverage cans volumes grew close to 5% bolstered by good volume growth in Europe and in specialty cans across all regions. Excluding the cost of aluminium passed through to customers, organic sales growth was 1%. Organic underlying operating profit was better than expected, improving by 15% to £447m driven predominantly by volume growth but also good pricing and an excellent performance on cost savings and efficiencies mainly related to downgauging and lightweighting. Our underlying operating profit margin improved to 11.8% (2010: 10.7%).

In 2012, our cost saving efforts will be very much in focus as we face the specific challenge of absorbing an additional £20m of metal conversion costs in our European beverage can business, increases in energy and freight charges as well as start up costs.

beverage can Europe & Asia

The European can market currently comprises some 57bn cans. It is our largest beverage can market and we are the leading can maker with a more than 40% share. In 2011, the market grew 5% as cans continued to gain share of the beverage packaging mix supported by a continued shift towards home consumption where beverage cans are the single serve package of choice. Our own volumes increased 6% following good growth in standard and specialty cans and growth in Russia. Specialty cans continued to grow across Europe in general and now represent almost 30% of all cans sold. Our own specialty volumes increased 10% driven by the continued success of energy drinks in Europe and those filled in Europe for export.

A strong first half in Russia was followed, as expected, by a slower second half but, for the year as a whole, our volumes were up 6% in line with our expectations. Returns on our Russian business (including the acquisition of Rostar in 2008) remain consistently well above our regional weighted average cost of capital. The introduction of Europe's first 75cl can was another milestone for Rexam in the Russian market. Can size is often a key element in our customers' marketing strategies and they now have an even broader range from which to select. Whilst we will be disciplined in terms of capital expenditure given the focus on returns, we are currently evaluating options to invest in Eastern Russia to meet growing demand and the need to reduce the cost of shipping products such as SLEEK™ cans which are growing in popularity.

Our can plant network across Western Europe ran at 95% utilisation during the year and given that we expect the market to continue to grow, we announced the construction of a new two line can making plant in Finland for £68m to open at the start of 2013.

We are making further investments in India, installing a high speed aluminium beverage can manufacturing line at the current site in Taloja close to Mumbai. The new line will represent a capital investment of c £30m over two years. It will initially produce 33cl, 50cl and SLEEKTM cans and increase capacity from under 400m cans to c 950m per year. Production start up is planned for the fourth quarter of 2012.

At the start of 2012, a decision was taken to invest in a fourth production line at our can making plant in Ludesch, Austria to support the growth of the energy drinks market. The investment of some £20m will increase our specialty can capacity by around 0.7bn cans per year. Start up is planned for the third quarter of 2013.

beverage can North America

North America remains the largest single can market in the world at around 95bn cans and we are the second largest can maker with a c 20% share. In 2011, our overall volumes declined 14% impacted by the contract losses announced last year. As previously stated, we have signed contracts to recover most of the volume loss by 2013, which will help improve asset utilisation. Encouragingly, specialty cans, which now account for some 23% of our overall volume, grew 16% driven mainly by increased consumption of energy drinks, beer and iced teas as well as new innovative beverage categories. Standard cans were down 20% of which 15% related to the loss of contracts and the remaining 5% to weakness in the US soft drinks market.

Overall profit in the business, which at the start of the year we expected to be comparable to that in 2010, was significantly higher. The faster than expected growth in specialty cans and the relentless pursuit of efficiencies and cost reduction across our entire product and manufacturing platform, combined with the improvement in margins on retained as well as newly secured volumes, helped drive this strong performance.

Our good cash conversion continued and we maintained the strong return on net assets that characterises this part of the business.

beverage can South America

South America is a c 25bn beverage can market dominated by Brazil. Rexam is the leading can maker in the region. Following a very strong performance in 2010 when the main market, Brazil, grew 18%, our volumes in 2011 were flat as the beverage can market in Brazil faced a number of challenges. These included a slowdown in Brazilian GDP growth (from 7% to 3% pa), price increases by our customers and particularly unfavourable winter weather conditions. Volumes were also affected by the direct import of cans by our customers. In addition, we lost some volume share as customers reallocated their volume requirements closer to their filling locations to optimise freight costs as new capacity came on line.

Growth in Rexam's specialty cans remained strong at 16% driven primarily by beer producers seeking new formats for their products. Specialty cans now account for 21% of our sales.

Rexam has around 60% of the Brazilian beverage can market and we are conscious that growth will not always be linear in emerging markets. Consistent with our disciplined approach to capital expenditure, our planned investment in the new can making plant in Belém (initially announced in April 2011) will be timed to match customer volume expectations, and is now planned to open in the second half of 2012. As stated last year, we have a long term contract with our largest customer in Brazil which underpins the returns on existing and future investments in the region.

We remain confident of the medium and long term prospects for the Brazilian market. In the short term, disposable incomes are set to rise in 2012 following legislation on increasing minimum wage levels and, with customers already preparing for events such as the FIFA Confederations Cup in 2013, the FIFA World Cup in 2014 and the Olympic Games in 2016, we expect to see further economic growth.

plastic packaging

Our Plastic Packaging business consists of Healthcare and Personal Care (which includes High Barrier food containers). It produces standard and customised rigid plastic packaging solutions for a variety of end markets including pharmaceutical and healthcare applications, cosmetics, toiletries, household care and food. Many of our products are the leading choice in their markets for customers worldwide. In 2011, Plastic Packaging accounted for 19% of Rexam's underlying operating profit from continuing operations (2010: 23%).

Plastic Packaging has a wide variety of products at varying stages of maturity. Our priority is to improve consistently the returns from this portfolio of businesses. The keys to success are innovation in markets where there are relatively short life cycles, for example, cosmetics, and the ability to remain entrepreneurial while leveraging a global network of production and technical capabilities. Operational excellence, including the use of leading edge technology, and the understanding of end market trends are also essential to maintain stature in these markets.

In 2011, trading in Plastic Packaging was mixed. Organic sales grew 2% but, excluding resin pass through, sales were flat. Underlying operating profit was 13% down on an organic basis. There were good efficiencies from increased process automation and lower resin usage from lightweighting and savings from reduced working hours and the elimination of shared costs following the sale of Closures. These were, however, not sufficient to offset the effects of reduced pricing and increased costs and the impact of lower volumes in Personal Care in North America, particularly in Home and Personal Care, and overall weaker sales in the Healthcare business.

healthcare

With over 3,000 employees and 14 factories across three continents, Rexam Healthcare is the global leader in rigid plastic packaging and devices for healthcare applications. It is a well invested business with an experienced management team. It designs, develops and manufactures innovative packaging, including containers and healthcare closures, drug delivery devices, metering pumps and valves and medical components. Its core expertise lies in injection moulding and blow moulding technologies and high speed automated assembly in compliance with Good Manufacturing Practices to meet the quality, safety and consistency demanded by customers. It also has broad regulatory knowledge to provide value added support to customers.

In 2011, Healthcare volumes (sales excluding pass through of resin cost) were flat. There was weak demand in North America and our overall performance reflects our strategy to focus on price and increase returns.

In Pharmaceutical Packaging, strong growth in insulin pens was offset by weakness in inhalers following a quiet flu season. In Prescription, there were some pricing benefits, despite increased competitiveness, but these were offset by lower volumes, again due to the absence of major flu outbreaks. Primary Packaging had lower volumes due to pricing pressures.

One of the main devices we manufacture for drug delivery is in the process of coming off patent and this will impact the results of the Healthcare business in 2012. This is part of the normal cycle within the pharmaceutical industry which is why we continue to develop a strong product pipeline to fuel future growth.

Looking ahead, we expect that there will be more opportunities to develop or co-develop solutions with pharmaceutical companies as they focus increasingly on their core business. We have a range of new products including insulin pens and the next generation of sophisticated drug delivery devices to replace those coming off patent.

personal care

In Personal Care, overall trading was disappointing despite pockets of good performance. High Barrier Food volumes were up strongly due to share gains but results in the rest of Personal Care varied significantly by region. In Europe volumes were flat. We saw some growth in dispensing systems for fragrances and make up and some weakness in foam pumps. In North America, the consumer remained cautious which led to lower volumes, particularly in Home and Personal Care. In emerging markets, good growth in Brazil was more than offset by weakness of make up in Asia due to high input costs and competitive pricing.

As stated on page 6 we have started the process to actively market the Personal Care business for divestment.

going forward

We are targeting revenue growth slightly above GDP, by which we mean the aggregate GDP of the major markets in which we operate, primarily in North and South America and Europe. In Europe, pack mix changes and increased at home consumption are driving faster than GDP growth. In North America, standard cans are flat to marginally declining but specialty cans continue to grow; overall, however, the US is a gently declining market regardless of GDP. Finally in South America and other emerging markets, we consistently see faster than GDP growth in beverage cans due to increased can penetration as the pack mix changes away from returnable glass.

We expect operating profit to grow faster than sales as increased volumes and better utilisation provide good drop through and, over time, efficiencies and pricing offset cost inflation.

Rexam is a highly cash generative company. Over the last two years, we have succeeded in strengthening the balance sheet and protecting our credit rating. We will maintain an appropriate financial position but will shift our focus to a combination of reinvestment in the business and cash returns to shareholders.

It is important to reinvest in the business so as to deliver our growth target on a sustainable basis. We recognise the need for discipline and will invest only in projects with good growth and return profiles. We aim to keep investment in the range of 1.0-1.5 times depreciation. In 2012 there are several large projects happening at the same time and we will be at the high end of the range this year. We will be similarly disciplined with regard to any bolt on acquisitions to strengthen our market positions or increase our capabilities.

In terms of cash returns to shareholders, our dividend policy is to have a dividend cover in the range of 2.0-2.5 times underlying earnings. With a strengthened balance sheet and the good 2011 trading performance, we are now in the range. Surplus cash which is not reinvested in the business over time will be returned to shareholders.

Since 2009 we have generated close to £550m of free cash flow, reduced costs by more than £120m and improved return on capital employed from 9.5% to 13.7%. Net debt has reduced from £1.8bn at the end of 2009 to £1.3bn at the end of 2011 aided by good profits and the proceeds from Closures, but also largely through our own management of working capital and capital discipline.

enterprise risk management

Effective management of risk is essential to the achievement of our business objectives and to the protection of our people, assets and reputation. Identifying, assessing and managing risks is integral to the way we run our business. It is part of our focus on operational excellence and best performance which are key priorities for the Group. The various risks attached to our activities are consistently assessed, recorded and reported in a visible, structured and continuous manner to ensure necessary controls are in place. Further details on risk management will be available in the annual report 2011.

sustainability

We believe that running our business sustainably is essential to near term success and long term prosperity. Our Group vision is to be the best global consumer packaging company and this includes our actions in and around sustainability, encompassing products, operations and people. Our customers look for partners who take their corporate responsibilities seriously. Our approach has been to identify realistic goals that our customers can depend upon as they seek to reduce the environmental impacts of the products they commercialise and to assure an ethical supply chain. Further details on sustainability will be available in the annual report 2011.

dividends

In 2009, the board agreed a policy to establish dividend cover in the 2 - 2.5x underlying earnings range in the medium term, and we are delivering on that policy for 2011. The board recommends a 2011 final dividend of 9.7p per share (2010: 8p), amounting to a total dividend for the year of 14.4p per share (2010: 12p). Subject to shareholder approval at Rexam's AGM on 3 May 2012, the final dividend will be paid on 7 June 2012 to shareholders on the register at close of business on 11 May 2012.

2012 outlook

In closing, we are delighted with the continued progress of the business in 2011. Our strong profit growth was achieved by a better than expected performance in our Beverage Cans business, primarily in Europe, and continued focus on cost management.

Looking ahead, we remain cautious about the global economy and, as indicated, we face certain cost challenges in 2012 together with the impact of a key Healthcare product coming off patent. The volume environment for Beverage Cans remains robust, although we do not anticipate any turnaround in the performance of Plastic Packaging in the near term. Overall, we expect 2012 to be another year of progress as we continue to focus on cash, costs and return on capital employed.

FINANCIAL REVIEW

This financial review of our results is principally based on what we term the underlying business performance, as shown in the tables below. This excludes exceptional items, the amortisation of certain acquired intangible assets and fair value changes on financing derivatives (together 'exceptional and other items'). We feel that the underlying figures aid comparison and understanding of the Group's financial performance.

Discontinued operations comprise the Closures business which manufactured beverage and specialty closures. Further details of the trading results of Closures and the accounting impact of its disposal are set out on page 33.

Results on a statutory basis include disposed businesses, currency translation and exceptional and other items and discontinued operations. The exceptional and other items and the results of discontinued operations are described in more detail on pages 32 and 33. Sales for continuing operations were £4,734m (2010: £4,619m) and profit before tax including exceptional and other items was £431m (2010: £338m). Total profit after tax for the year, including the results of discontinued operations, was £376m (2010: £124m) and total basic earnings per share was 43.1p (2010: 14.2p).

The following tables, showing sales and underlying operating profit, compare the continuing operations on a consistent basis to demonstrate 'like for like' trading performance. This basis excludes discontinued operations. Organic change is the year on year change arising on continuing operations at constant exchange rates.

Analysis of sales movement

Organic sales, which exclude the impact of discontinued operations, disposals and currency, increased by £168m or 4%. The increase in Beverage Cans includes £113m relating to the increase in aluminium cost pass through together with volume gains in Europe and in specialty cans globally and good pricing in Europe and South America partly offset by previously announced reductions in standard can volume in North America. For Plastic Packaging, the growth was attributable to the pass through of higher resin costs and some volume recovery in High Barrier Food containers offset by volume reductions in Personal Care and Healthcare.

Analysis of underlying operating profit movement

A further analysis of the organic change in underlying operating profit from continuing operations is set out below.

Underlying operating profit, after adjusting for the impact of discontinued operations, disposals and currency, rose by £42m or 8% reflecting an improvement in pricing and efficiency savings across the Group partly offset by lower volumes and less favourable mix in Plastic Packaging. Efficiency savings of £35m came from the application of six sigma and lean enterprise methodologies across the Group. In Beverage Cans, major savings arose from lightweighting, spoilage reduction, downgauging and reduced utility usage. In Plastic Packaging, the major contributors were lower material usage and improved operating efficiency.

Exchange rates

The main exchange rates used to translate the consolidated income statement and balance sheet are set out below:

Consolidated income statement

The principal currencies that impact our results are the US dollar, the euro and the Russian rouble. The US dollar and the Russian rouble weakened against sterling in the year while the euro strengthened. The net effect of currency translation caused sales and underlying operating profit from ongoing operations to reduce by £53m and £6m respectively compared with 2010 as shown below.

In addition to the translation exposure, the Group is also exposed to movements in exchange rates on certain of its transactions. These exposures are largely hedged and principally include the US dollar/euro/Russian rouble and the US dollar/Brazilian real movement for the European and South American beverage can operations respectively.

Consolidated balance sheet

Most of the Group's borrowings and net assets are denominated in US dollars and euros. Currency movements reduced net borrowings by £29m and net equity by £16m.

Total underlying net finance cost

The total underlying net finance cost fell by £20m compared with the prior year. The reduction in total net interest is primarily due to lower average net borrowings following strong cash inflows together with lower bank facility fees offset by foreign exchange transaction losses on financing items. The overall average interest rate for the year was around 5.8% compared with 5.7% in 2010.

Based on underlying operating profit, interest cover was 6.0 times (2010: 4.5 times). Interest cover is based on underlying operating profit from continuing operations and underlying net interest expense excluding charges in respect of retirement benefit obligations.

Tax

The tax charge for the year on continuing operations was £135m (30%) on profit before exceptional and other items (2010:£116m (30%)). The rate reflects the mix of territories in which we operate offset in part by the availability of tax incentives in certain jurisdictions and the management of tax risks. We anticipate the rate to remain around the same level in 2012.

Cash tax payments by continuing operations in the year were £81m (2010: £67m) with an additional £5m (2010: £8m) being borne by discontinued operations. Cash tax is lower than the charge to the income statement due to the utilisation of deferred tax assets and the timing of tax payments. It is expected that the cash tax paid in future years will remain below the underlying tax charge in the consolidated income statement, in the range of 65% to 75% of that charge.

Exceptional and other items

The exceptional and other items arising in 2011 in respect of continuing operations were as follows:

Exceptional items

Restructuring of businesses

The restructuring charge of £16m on continuing operations comprises £11m in Plastic Packaging (including £2m related to asset impairments) and £5m in Beverage Cans. We have previously stated that following the disposal of Closures it would be necessary to reorganise the remaining Plastic Packaging business to address the level of shared service administration support and to rationalise those retained plants which wereco production sites with the Closures businesses. Overall, this restructuring is expected to cost £24m: in 2011, £11m was charged in respect of continuing operations and a further £11m reported under discontinued operations. The remainder will be charged in future periods. The Beverage Cans cost was in respect of the previously announced plant closures. The total cash cost of restructuring in continuing operations in the year was £19m.

Other items

Amortisation of certain acquired intangible assets

Intangible assets, such as technology patents and customer contracts, are required to be recognised on the acquisition of businesses and amortised over their useful life. The directors consider that separate disclosure, within exceptional and other items, of the amortisation of such acquired intangibles relating to total operations amounting to £26m (2010: £32m) aids comparison of organic change in underlying profit.

Fair value changes on financing derivatives

The fair value of the derivatives arising on financing activities directly relates to changes in interest rates and foreign exchange rates. The fair value will change as the transactions to which they relate mature, as new derivatives are transacted and due to the passage of time. The fair value change on financing derivatives for the year was a net gain of £23m (2010: net loss £12m). The impact of derivatives arising on trading items such as commodities and forward foreign exchange contracts is included within underlying operating profit.

Discontinued operations - Closures

A summary of the performance of discontinued operations is set out below.

The underlying performance reflected the decline in beverage closures, with sales down by some 10% for the period to disposal, offset partly by efficiency and other savings.

The disposal of the Closures business was completed on 1 September 2011 giving rise to an overall profit in 2011 of £91m. This profit included foreign exchange translation differences arising on Closures net assets since the date of their acquisition, some £89m, which have been recognised in the income statement. In 2011, the assets of Closures were impaired by £28m and further impairments of £6m, together with £5m of related costs, were incurred under the restructuring programme initiated following its disposal as described under 'exceptional items' above.

Earnings per share

Underlying earnings per share from continuing operations increased by 15% to 36.1p (2010: 31.4p). This is due to the improvement in underlying operating profit together with the reduction in total underlying net finance cost.

The basic earnings per share, which includes exceptional and other items and discontinued operations, was 43.1p per share (2010: 14.2p). The increase reflects the improvement in underlying profit, the reduced impact of exceptional items and the gain realised on completion of the disposal of Closures.

Retirement benefits

Retirement benefit obligations (net of tax) as at 31 December 2011 were £371m, an increase of £54m compared with £317m reported at 31 December 2010. This was principally due to changes in actuarial values amounting to £76m (after tax) as set out below.

Changes to the actuarial value of retirement benefits at the balance sheet date are reported in the consolidated statement of comprehensive income.

The retirement benefit obligations net finance cost is analysed as follows:

The retirement benefit obligations net finance cost, which is a non cash accounting charge, increased marginally to £16m from £15m in the prior year. A charge in respect of historic fair value movements recognised in the income statement following the annuitisation of certain US pension obligations was offset by a lower net finance cost. It is estimated that the overall net finance cost in 2012 will remain at a similar level.

The total cash payments in respect of retirement benefits are as follows:

Cash payments to defined benefit pension plans were higher than in 2010 mainly as a result of increases in the deficit funding to the UK and US plans. Based on current actuarial projections, it is expected that cash contributions to defined benefit pension plans in 2012 will be at a similar level to 2011. A triennial valuation of the UK defined benefit plan was undertaken as at 31 March 2011. It is expected, when the valuation is complete, that the plan will be fully funded at that date. Future funding arrangements are currently being discussed with the plan trustees.

Cash flow

Total free cash flow for the year from continuing operations resulted in an inflow of £277m compared with £298m for 2010. This lower inflow primarily reflects an increase in capital expenditure, higher retirement benefit cash contributions offset by a significant improvement in underlying operating profit and lower restructuring charges. Net cash flow was £337m (2010: £212m), including free cash flow from discontinued businesses, net proceeds from the disposal of Closures and after paying dividends.

Capital expenditure - continuing operations

Gross capital expenditure by continuing operations was £227m, c 1.2 times depreciation and amortisation, of which approximately 70% was attributable to strategic and growth projects. The principal projects in Beverage Cans were to support growth in South America, the development of specialty can products, a new plant in Finland, the conversion of three lines from steel to aluminium in Spain, Egypt and India and the introduction of a lightweight end in response to market developments and customer requirements. Plastic Packaging investment continued to be focused on new product development.

It is expected that capital expenditure from continuing operations in 2012 will be around £300m, 1.5 times depreciation and amortisation.

Balance sheet and borrowings

The level of net borrowings at 31 December 2011, down by £372m compared with the previous year, primarily reflects strong cash flow and favourable impact of currency translation and other non cash movements. The currency denomination of our net borrowings, including financing derivatives, is as follows:

For the management of foreign currency asset matching and interest rate risk, the profile of gross borrowings is 68% (2010: 75%) in US dollars, 32% (2010: 22%) in euros and nil% (2010: 3%) in other currencies.

Our net borrowings/EBITDA based on continuing operations has strengthened from 2.4 times in 2010 to 1.8 times following the reduction in net borrowings and improvement in underlying operating profit. Interest cover is at 6 times and we remain comfortably within our debt covenants. Our liquidity is strong with committed debt headroom of over £1.2bn at the year end.

At 31 December 2011, the Group's principal committed loan and bank facilities totalled some £2.6bn in varying currencies and maturities, as detailed below:

Following the disposal of Closures, and to take advantage of prevailing market conditions, the revolving credit facility and certain bilateral credit facilities were amended during the year. Their maturity was extended to November 2016 with options to extend by a further two years, the level of facilities was reduced by £219m and ongoing commitment fees were lowered.

Net borrowings include interest accruals and certain financial derivatives as set out below:

Derivative financial instruments comprise instruments relating to net borrowings (cross currency and interest rate swaps) and those related to other business transactions (forward commodity and forward foreign exchange deals). Total derivative financial instruments are set out below:

The increase in the value of cross currency swaps can be mainly attributed to a decrease in the longer term forward interest rates and to a decline in the liquidity of the euro. The reduction in value of other derivatives was due mainly to the fall in aluminium prices.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER

For details of equity dividends paid and proposed see note 7.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER

Approved by the board on 22 February 2012

Graham Chipchase, Chief Executive David Robbie, Finance Director

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

NOTES

1 Basis of preparation of accounts

These accounts do not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010 but are derived from those accounts. Statutory accounts for 2010 have been delivered to the Registrar of Companies, and those for 2011 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The Group adopted IAS24 (Revised) 'Related Party Disclosures' from 1 January 2011. This revision to an existing accounting standard clarifies the definition of a related party and the disclosure of transactions between the Group and its subsidiaries, associates and joint ventures.

2 Segment analysis

For internal reporting, Rexam is organised into three operating segments for Beverage Cans based on the geographical locations of Europe and Asia, North America and South America, and into one operating segment for Plastic Packaging. For external reporting, the three operating segments for Beverage Cans are combined into one reportable segment. Beverage Cans comprise aluminium and steel cans for a wide variety of beverages including carbonated soft drinks, energy drinks and beer. Plastic Packaging comprises rigid plastic products for customers in the Healthcare and Personal Care markets.

Underlying operating profit comprises operating profit from continuing operations before exceptional items and the amortisation of certain acquired intangible assets. Underlying operating profit from continuing operations is included as it is felt that adjusting operating profit for exceptional items and the amortisation of certain acquired intangible assets provides a better indication of the Group's performance. Underlying return on sales comprises underlying operating profit from continuing operations divided by sales from continuing operations. Underlying return on net assets is based on underlying operating profit plus share of associates and joint ventures after tax divided by the average of opening and closing net assets after adding back retirement benefit obligations (net of tax) and net borrowings and excluding goodwill and certain acquired intangible assets. Non specific central costs are allocated on the basis of underlying operating profit.

3 Exceptional items - continuing operations

Exceptional items before tax include £9m (2010: £6m) for restructuring costs and £2m for impairment of property, plant and equipment (2010: £3m reversal of impairment) in Plastic Packaging in respect of previously announced plant closures and restructuring of some of the remaining continuing businesses following the disposal of the Closures division. They also include £5m (2010: £5m) of restructuring costs in Beverage Cans in respect of previously announced plant closures.

4 Discontinued operations

The sale of the discontinued Closures division completed on 1 September 2011. In 2010 the division was reported in the consolidated balance sheet within assets and liabilities classified as held for sale.

Impairment of Closures comprises goodwill of £nil (2010: £59m), intangible assets of £16m (2010: £65m) and property, plant and equipment of £12m (2010: £47m). Other impairment in 2011 comprises £4m related to the write off of certain software licenses and £2m related to the write down of a plastic packaging plant in Poland. Other impairment in 2010 of £8m comprised the closure of a facility in Constantine, US.

5 Retirement benefit obligations