Ardagh Metal Packaging S.A. (NYSE: AMBP)

Sector: Consumer Cyclical Industry: Packaging & Containers CIK: 0001845097
Market Cap 3.25 Bn
P/B -9.49
P/E 202.92
P/S 0.61
ROIC (Qtr) 5.07
Div Yield % 8.32
Rev 1y % (Qtr) 8.76
Total Debt (Qtr) 4.09 Bn
Debt/Equity (Qtr) -11.97
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About

Ardagh Metal Packaging S.A. (AMBP), a prominent player in the metal beverage packaging industry, operates under the ethos of manufacturing sustainable and innovative products for a diverse range of beverages. With a significant market share of approximately 20% in the global metal beverage packaging market, AMBP is a formidable force in the industry. The company's core business activities revolve around the production and supply of metal beverage cans, with 24 production facilities strategically located across Europe, North America, and Brazil....

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Investment thesis

Bull case

  • Healthy cash reserves of 317M provide 2.26x coverage of short-term debt 140M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 451M exceeds capital expenditure of 158M by 2.85x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 609M provides 2.14x coverage of SG&A expenses 284M, showing efficient operational cost management.
  • Robust tangible asset base of 4.25B provides 32.67x coverage of working capital 130M, indicating strong operational backing.
  • Tangible assets of 4.25B provide robust 28.31x coverage of other current liabilities 150M, indicating strong asset backing.

Bear case

  • Operating cash flow of 609M barely covers its investment activities of (178M), with a coverage ratio of -3.42, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 609M provides thin coverage of dividend payments of (264M) with a -2.31 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 451M represents just -4.85x of debt issuance (93M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Cash position of 317M provides weak coverage of payables of 1.17B, which is 0.27x, indicating potential working capital stress and supplier relationship risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 284M, indicating potential underinvestment in innovation relative to administrative overhead.

The axis of a table defines the relationship between the members in the table and the line items or concepts that complete the table. Breakdown of Revenue (2023)

Segments [axis] Breakdown of Revenue (2023)

Peer comparison

Companies in the Packaging & Containers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SW Smurfit Westrock plc 25.68 Bn 34.34 0.82 14.11 Bn
2 BALL BALL Corp 24.44 Bn 53.45 3.32 7.21 Bn
3 PKG Packaging Corp Of America 23.43 Bn 162.41 8.65 4.36 Bn
4 AMCR Amcor plc 22.55 Bn 37.83 1.15 16.02 Bn
5 IP International Paper Co /New/ 21.35 Bn 25.41 0.79 12.54 Bn
6 AVY Avery Dennison Corp 17.24 Bn 50.23 2.79 3.78 Bn
7 CCK Crown Holdings, Inc. 14.99 Bn 31.43 1.77 6.60 Bn
8 SEE Sealed Air Corp/De 6.70 Bn 27.06 1.55 4.27 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.29 1.10
EV to Cash from Ops. EV/CFO 11.58 25.51
EV to Debt EV to Debt 1.72 2.87
EV to EBIT EV/EBIT 27.12 21.92
EV to EBITDA EV/EBITDA 34.91 15.97
EV to Free Cash Flow [EV/FCF] EV/FCF 15.64 29.94
EV to Market Cap EV to Market Cap 2.17 1.76
EV to Revenue EV/Rev 1.32 2.08
Price to Book Value [P/B] P/B -9.49 4.77
Price to Earnings [P/E] P/E 202.92 33.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.06 1.61
Dividend Payout Ratio % Div Payout % (Qtr) -4,000.00 -152.30
Dividend per Basic Share Div per Share (Qtr) 0.40 1.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 52.98 -11.16
Interest Coverage Int. cover (Qtr) 1.19 -4.81
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 18.97 -4.03
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -19.34 347.51
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 21.24
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -20.18 20.83
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 23.56
EBIT Growth (1y) % EBIT 1y % (Qtr) 81.82 -33.97
EBT Growth (1y) % EBT 1y % (Qtr) 175.93 -493.51
EPS Growth (1y) % EPS 1y % (Qtr) 91.67 36.84
FCF Growth (1y) % FCF 1y % (Qtr) 9.73 -3.88
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.88 14.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.98 0.71
Cash Payout Ratio Cash Payout (Qtr) 0.34 0.20
Cash Ratio Cash Ratio (Qtr) 0.22 0.26
Current Ratio Curr Ratio (Qtr) 1.09 1.51
Debt to Equity Ratio Debt/Equity (Qtr) -11.97 0.90
Interest Cover Ratio Int Coverage (Qtr) 1.19 -4.81
Times Interest Earned Times Interest Earned (Qtr) 1.19 -4.81
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 2.80
EBIT Margin % EBIT Margin % (Qtr) 4.86 -2.91
EBT Margin % EBT Margin % (Qtr) 0.77 -5.68
Gross Margin % Gross Margin % (Qtr) 12.70 21.11
Net Profit Margin % Net Margin % (Qtr) 0.30 -6.77