12th Nov 2015 07:00
12 November 2015
Trading update
Rexam, a leading global beverage can maker, is today issuing the following trading update for the period from 1 July 2015.
Results for the Group are in line with our plans. Overall global beverage can volumes were up 3% (1% excluding the acquisition of UAC) in the third quarter. Volume growth in Europe slowed down as expected with good growth in Germany, Spain and Austria partially offset by softness in Russia, Scandinavia, Belgium and the Netherlands. Volumes were subdued in the Middle East as some borders remained closed. In North America, standard volumes continued to be impacted by the decline in the carbonated soft drink market whilst specialty volumes continued to perform well. Volumes in South America returned to growth in the quarter with a decline in standard cans outweighed by strong growth in specialty cans. After taking into account the impact of foreign exchange, our expectations for the full year are unchanged.
Looking into 2016, the environment remains challenging but we continue to expect growth in global can volumes. Pricing reductions in Europe will be mostly offset by the benefit of the restructuring programme announced in February this year. We will incur ramp-up costs for our new plants in Widnau and India and the devaluation of the Brazilian Real against the US dollar, if maintained, will give rise to further FX losses. Finally, at current aluminium premium rates, we would expect a £30-35m tailwind, although premium remains uncertain and a further update will be provided at our full year results.
Graham Chipchase, Rexam's Chief Executive said:
"Rexam remains in good shape operationally with global beverage can volume growth of 3% in the third quarter. As expected, volume growth slowed down in Europe and softness continued in the Middle East. In North America, the carbonated soft drinks market remains challenging, but we had good growth in specialty volumes driven by beer and energy drinks. Volumes in South America returned to growth towards the end of the quarter, driven by strong growth in specialty cans. After taking into account the impact of foreign exchange, our expectations for the full year are unchanged.
We continue to expect growth in global can volumes in 2016 despite the tough trading environment. Our focus will remain on tight cost management and the elements of our business that we know we can control."
On 19 February 2015, Ball and Rexam announced that they had reached agreement on the terms of a recommended offer for Rexam. The transaction is still expected to close in H1 2016.
Enquiries
Investors
Marion Le Bot, Head of Investor Relations, Rexam +44 20 7227 4100
Media
Mark Bunker, Head of Communications, Rexam +44 20 7227 4100
Martin Robinson, Tulchan Communications +44 20 7353 4200
A copy of this press release has been posted on the Rexam website, www.rexam.com.
Rexam will host a conference call for investors and analysts on Thursday 12 November at 8am (UK time).
UK Participant dial-in: + 44 (0)20 3139 4830 or 0808 237 0030
US Participant dial-in: +1 718 873 9077 or +1 866 928 7517
Participant PIN Code: 42568995#
Presenters:
Graham Chipchase, Chief ExecutiveKath Kearney-Croft, Acting Finance Director
A replay service will be available until 26 November 2015:
UK replay: +44 (0) 20 3426 2807 or 0808 237 0026
US replay: +1 866 535 8030
Replay PIN Code: 662009#
There will be a live webcast of the conference call accessible via www.rexam.com
Editors' notes:
Rexam is a leading global beverage can maker. We are business partners to some of the world's most famous and successful consumer brands. Our vision is to be the best beverage can maker in the world.We have 55 can making plants in more than 20 countries and employ around 8,000 people. In 2014, our sales were £3.8 billion.Rexam's ordinary shares are listed with the UK Listing Authority and trade on the London Stock Exchange under the symbol REX. Visit www.rexam.com for further information.
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