Welcome to the Ardagh Metal Packaging S.A. Second Quarter 2024 Results Call. Today's call is being recorded. At this time, I'd like to turn the call over to Mr. Stephen Lyons, Investor Relations. Please go ahead. Thank you, operator, and welcome everybody. Thank you for joining today for Ardagh Metal Packaging's second quarter of 2024 earnings call, which follows the earlier publication of AMP's earnings release for the second quarter. I am joined today by Oliver Graham, AMP's Chief Executive Officer, and David Bourne, AMP's Chief Financial Officer. Before moving to your questions, we will first provide some introductory remarks around AMP's performance and outlook. AMP's earnings release and related materials for the second quarter can be found on AMP's website at www.ardaghmetalpackaging.com. Remarks today will include certain forward-looking statements and include use of non-IFRS financial measures. Actual results could vary materially from such statements. Please review the detail of AMP's forward-looking statements disclaimer and the 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 performed well in the second quarter, and we were delighted to deliver a second successive outperformance versus our guidance. This is a testament to the resilience of our business, the strength of our customer and supplier relationships, and the commitment of our teams. Global beverage shipments grew by 3% in the quarter versus the prior year, with revenue broadly unchanged as favorable volume mix was offset by the pass-through to customers of lower input costs. Adjusted EBITDA grew by 18%, with strong double-digit growth across both segments. Adjusted EBITDA growth, as anticipated, ahead of shipments growth for the quarter due to an improved operating cost performance and stronger than expected input cost recovery in Europe, which drove the outperformance versus our guidance. This increased our LTM adjusted EBITDA to $631 million, which we expect to increase further in Q3. The economic backdrop remains challenging, with heightened political uncertainty, ongoing inflation, and pressured consumer spending. However, industry growth expectations in both Europe and Brazil have strengthened year- to- date, and following our strong first half performance, we have increased confidence in our full year outlook, and as such, we are improving our Adjusted EBITDA guidance range to $640 million-$660 million. We continue to progress our sustainability agenda, and recent notable highlights include the extension and for higher volume of a solar power purchase agreement to 2030 will cover up to 40% of German demand needs. Our Huron facility, which recently received an ISO 14001 certification, following which all global AMP product facilities are now accredited, demonstrating best practice, environmental management and a commitment to ongoing improvement. The completion of our carbon audit for 2023 highlighted a significant reduction in Scope 3 emissions, with the absolute emissions reduction more than compensating for the impact from business growth since 2020. Finally, we recently concluded our global biannual employee engagement survey with a significant improvement in participation rates across all regions. Looking at AMP's results by segment. In Europe, second quarter revenue increased by 2% to $566 million, compared with the same period in 2023, due to favorable volume mix effects and foreign exchange, partly offset the pass-through of lower input costs to customers. Shipments for the quarter increased by 5% on the prior year. Growth was broad-based as customers increased their focus on volume growth, favored the can in their pack mix, and built stock for the summer selling season, including for sporting events such as the European Football Championships and the Paris Olympics. Second quarter Adjusted EBITDA in Europe increased by 23% on both a reported and constant currency basis, $79 million due to favorable volume mix and stronger input cost recovery. We expect this stronger input cost recovery to continue and to offset the pricing headwind that we had initially forecast for 2024. For full year 2024, we continue to expect low single-digit percentage shipments growth for our European business as we closely monitor demand patterns and the sell-through to consumers across the summer season. Overall, we're pleased that our full year expectation for Europe has been significantly de-risked, as this was the area of greatest uncertainty in our 2024 guidance. In the Americas, revenue in the second quarter decreased by 1% to $693 million, which reflected the pass-through of lower input costs, partly offset by favorable volume mix, with shipments growth of 1%. Adjusted EBITDA in the Americas increased strongly by 14% to $99 million, with growth in both regions, which was driven by favorable volume mix effects and improved operating cost performance. In North America, shipments grew by 3% for the quarter as we lapped a strong prior year comparable of 18%, which reflected the ramp-up of new capacity. We continue to grow above the market, supported by our pipeline of contracted growth, with particular strengths in CSD, sparkling water, and innovative soft drinks. Softer demand in the energy drinks category, which represents about 11% of our portfolio, leads us to modestly reduce our forecast for shipments growth this year to a mid-single digit percentage versus low single digit growth for the overall market. We're confident that the market growth rate will increase over time as customers demonstrate an increased focus on volume and innovation and sustainability trends support the growth of the infinitely recyclable beverage can in the pack mix. In Brazil, second quarter beverage can shipments declined by 7%, below industry growth of 8%, due to temporary customer mix effects. The second quarter is the seasonal low period for industry sales, which includes downtime taking customer filling locations. Our shipments of ends grew by a strong double-digit% versus the prior year period. Overall, we're encouraged by the strong first half for the Brazil beverage can market, which we now believe may grow above mid-single digits% this year. Consumption has benefited from a supportive macroeconomic environment, and beverage can growth has been further supported by the pack mix shift back to one-way packaging. We continue to balance our capacity in Brazil through curtailment of our network, and we closely assess customer demand needs beyond the quieter winter period. Overall, in the Americas, we expect shipments growth in the order of a low to mid-single digit% for 2024, slightly below our previous guide, due to the softer energy drinks in North America. Shipments growth and improved fixed cost absorption will drive adjusted EBITDA growth for the remainder of 2024. I'll now briefly hand over to David to talk you through some of our financial position before finishing with some concluding remarks. Thanks, Ollie, and hello, everyone. We ended the quarter with a liquidity position of $405 million, an increase from $329 million at the end of the first quarter, which is typically the seasonal low point for our business due to our working capital cycle. Adjusted operating and free cash flow for the quarter was ahead of expectations due to tight focus on cash management. AMP incurred total CapEx of $36 million for the quarter, which included $10 million of growth CapEx. We reiterate our expectation for growth CapEx for 2024 of approximately $100 million and maintenance, sustainability, and IT CapEx of the order of $120 million, in line with our steady long-term run rate. We anticipate a further reduction in growth CapEx again in 2025. Our net leverage ratio reduced to 5.8 times from 6.2 times at the end of the first quarter, and we expect a further reduction through H2, and for the ratio to end the year around 5.2 times. This will be supported by LTM Adjusted EBITDA growth, further working capital net inflows, and lease principal repayments. We anticipate a more meaningful leverage reduction in future years. We have announced today a new $300 million secured financing commitment from Apollo directly to AMP, which we expect to draw down in the third quarter and will be neutral to our net leverage ratio. This term loan facility is for general corporate purposes and increases our forecast for year-end liquidity to approximately $0.9 billion. The facility is subject to customary closing conditions. Pari passu with the existing secured bonds, is not callable for the first year, and is scheduled to mature in 2029. The facility also preserves the flexibility to continue to pay the current level of ordinary and preferred share dividends, but caps dividend payments at the current level while the facility remains in place. Accordingly, we have today announced our quarterly ordinary dividend of $0.10 per share to be paid in September, in line with our guidance and capital allocation policy, which remains unchanged. We would also reiterate that AMP operates with a standalone capital structure, which is structurally and legally separate to that of Ardagh Group, our 76% long-term majority shareholder. With that, I'll hand back to Ollie. Thanks, David. So before moving to questions, I'll just recap briefly on AMP's performance key messages. So global shipments grew by 3% in the second quarter, with Europe growing by a strong 5%, further building on the growth in the first quarter. We continued to outperform the market in North America, growing by 3% despite lapping a strong prior year comparable of 18%. Adjusted EBITDA growth for the quarter was ahead of guidance for a second successive quarter, with both segments delivering double-digit year-over-year growth. And our strong first half performance gives us confidence to improve our full-year adjusted EBITDA guidance range to $640 million-$660 million. Our EBITDA guidance is supported by global shipments growth approaching mid-single-digit%, improved operating cost performance, and stronger input cost recovery. And we expect continued strong Adjusted EBITDA growth in the second half of this year. In terms of guidance for the third quarter, Adjusted EBITDA is anticipated to be in the order of $185 million, with growth across both geographic segments and compares with prior year Adjusted EBITDA of $171 million on both a reported and constant currency basis. So having made these opening remarks, we'll now proceed to take any questions you may have. Thank you. If you would like to ask a question, you may signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, star one for questions. We'll go first to Stefan Diaz with Morgan Stanley. Hello, everyone. Thanks for taking my question. Maybe to begin, liquidity improved ahead of your expectations. We usually see a, you know, a working capital release in the second half. Can you expand on why you decided to secure that $300 million financing agreement? Sure. Yeah, no, I'll start, and then I'll pass it to David. So I think we wanted to demonstrate the resilience of the business, and the strength of our balance sheet, and we wanted to increase that resilience and strength in the quarter where we had a credit downgrade. So we decided to take that action to get us to, you know, nearly $1 billion of liquidity at year-end, which will also put us in a very good position into next year. So that was the overall objective, and I think that will carry as well through the next 12, 18 months. David, do you want to add anything? Yeah, I'll just add to that, that, you know, despite that, there's no significant change to our free cash flow forecast or to our leverage position for FY 2024, which, as I outlined in the prepared remarks, falls to 5.2 times. So we aim to utilize that cash to lower our usage of the ABL facility and some of our factoring facilities. So we see it as a very low-cost option in order to strengthen and project that strong business resilience. And for modeling purposes, I know some people will ask, we kind of expect that facility will incur a net interest cost of around about $10 million per annum. So it felt like a low-cost option to take out. Great. Thanks for the color. And I know you're not big in mass beer in North America, but maybe you could expand on what you're seeing by category in the region, particularly in energy? Yeah, certainly. So, I think we're seeing strength in the soft drinks arena. So carbonated soft drinks, particularly sparkling waters, very strong. We see a lot of strength in our portfolio in sort of innovative soft drinks, so the sort of gut health, sort of wellness, position is, is going extremely well in the market and in our portfolio. It is, so on soft drink side, yeah, the energy has been the one that was weak in Q2. It's a big category. It's had a couple of great years, and it seems to be taking a bit of a breath at this point. We expect it to return to growth. You know, there's a lot of innovation in that space. Some new players, where their growth is naturally plateauing out a bit after, you know, again, a couple of amazing years. But that has been a bit softer in the quarter than we'd anticipated. And then if you go into the alcoholic side, actually cocktails, you know, mixed flavored cocktails, very strong, both in the market and in our portfolio. And then we're growing into beer, but we can see that beer's a bit weaker on the scanner data, but we do have growth in that category this year through contractual gains. Great. Thank you so much. I'll turn it over. Thank you, Stephen. Thank you. We'll take our next question from Mike Roxland with Truist Securities. Thank you, Ollie, David, and Stephen, for taking my questions, and congrats on the continued progress. Thank you. Thank you. First question I had, just, you know, how much of the demand growth that you're seeing in Europe, you know, both this quarter, last quarter, do you think can be attributed to a pull forward of demand related to the Euro Cup, to the Olympics? Just want to get a sense of whether, you know, there has been pull forward of demand and whether there could be some mean reversion or some softer growth in the back half of this year. Yeah, no, good question. I think, you know, we see, aside from the Euros and the Olympics, we do see customers leaning back into volume for their revenue growth this year, which we'd anticipated. We also see the can gaining in the pack mix, you know, with the efficiency of the can and also the sustainability credentials. So we think those are just more the factors that we used to benefit from, that are coming back, after, you know, a year or two of lesser growth with the inflation in the market. So we're not putting a huge amount of this on the Euros or the Olympics. There was a lot of innovation in our portfolio in the first half, which you could put down to some promo SKUs as well as new products. So we got a lot of requests for fresh production through Q2, and in fact, we probably could have had another point or two of growth if we'd been able to produce all of it. But inventories were low, both on the customer side and on our side, going into Q2, and that did put pressure on our fresh production capacity. So yeah, I think, you know, you'd expect the Euros and the Olympics to have had an effect, but we think the main thing that's going on is a reversion to the traditional growth of the European beverage can market, which has always been very, very healthy. We are being cautious in our guidance. You can see that because we do want to go through the summer period, and make sure that, you know, there aren't some pull-forward effects. But at this point, July is looking very strong. It would be above our Q2 performance at this point if the trend continues. So we've got... You know, we probably are being a little bit cautious as we look into the second half. Got it. That's very helpful, Ollie. Thank you. And then just, you know, two quick questions to finish it off here. You know, last call, you mentioned that you may find offsetting cost actions to drive better price costs. Any color that you can provide on what those cost actions might be? You know, have they been implemented? You know, what's your take on the amount the company could benefit from and over what time period? And then just lastly, you mentioned increased flexibility that you're building into your North American network to respond to changing market customer demand patterns. Any additional color you can provide on that as well? Thank you. Sure, yeah. So look, on the first one, I think we mentioned in the prepared remarks that we did have improved input cost recovery in the quarter, you know, versus our expectations at the beginning of the year, so in some of our bigger categories, also energy. And that has offset what we initially, coming into 2024, thought might be a pricing headwind in Europe. So I think we've got a good balance now of price and cost in Europe, and that helped us outperform our guidance and also raise our full year guidance. We do see ongoing improved operating cost performance as we grow into our capacity and with the various efficiency programs we have in our business. So we do anticipate, you know, further cost reduction as we go into 2025 and 2026 across the business. In terms of North America, yeah, we have, you know, adjusted our, our footprint now, returning to some standard capacity, 12-ounce, 16-ounce, and also adjusting our ends footprint, to take into account, 206 ends for 20-ounce cans. So we are now very well positioned for the, all the trends that are in the market and can adapt, adapt as needed. And we, you know, we do anticipate, therefore, being able to fully utilize our capacity over the next couple of years. Thank you. Good luck in the quarter. Thanks, Mike. We'll take our next question from Cashen Keeler with Bank of America. Yeah. Hi, guys. Good morning. Thanks for the time. So in the Americas, despite, you know, volumes only coming in at low single digits overall and a decline in Brazil, you still had pretty solid margins in the segment. So I know you called out input cost recovery, but was there perhaps anything on the mix side that allowed you to perform the way you did in that region? Yeah, a little. So I think we did have some positive mix. And then we had, you know, clearly a better cost performance was, you know, a significant driver again, as we grow into our operating footprint. And also, you know, we had rationalized our footprint, which, you know, we don't like doing from a team point of view, but was necessary to do with the capacity we were carrying in North America. So that also helped our cost performance. We've done the same thing in Europe with the steel line. So, clearly, both on the input costs and on the operating costs, we delivered a better performance, and then a little bit of mix. And, yeah, look, I think, we also had good ends sales in Brazil, which you can count as a mix effect in the quarter, which also was, was positive to margins. And then actually, again, looking into July, you know, growth looks pretty positive in, particularly in North America, would be above, again, the Q2 number. So, you know, we're feeling pretty good about our performance there. We're over 7% year- to- date in the first half, which matches, you know, pretty much anyone in the market and is clearly ahead of market growth. So we're looking positively to the year-end, even though we've got, again, some very tough comps. I think we have a 20% comp in Q3 and a 12% in Q4. Our very strong growth in 2022, you know, does provide on what we can achieve this year, but we're still expecting to beat it through the remainder of the year. Okay, that's helpful. And then I guess as we just move more into 3Q and 4Q, you know, and I know you called out a uptick in promotional activity, but is that kind of above what you were observing last quarter? And, you know, how do you expect that to impact volumes here in the second half? Yeah, I think, you know, again, we've been saying it for 12, 18 months, that we do expect it to normalize over time. I think it has continued to do that in Q2, and we'd expect it to continue to do it. It's probably been slower than we anticipate. Our customers were able to achieve more on price than we might have thought, and, you know, not surprisingly, therefore did so. But we think, you know, for the revenue growth they'll want, they will have to lean more on volume, going forward, because I think they are reaching the limits of pure price. So, so we do expect continued improvement in promotional activity, in all our markets, you know, going through the remainder of the year. Okay, thanks. I'll turn it over. Thanks, Cashen. Thank you. We'll take our next question from Josh Spector with UBS. Yeah. Hi, good morning. I wanted to follow up on the North America volumes. So to the point that you mentioned, 3Q has a pretty tough comp, and I mean, I think your guidance implies that your volumes will grow, call it a couple% in the second half. Is that the right way to think about that, or would you expect that to accelerate at all when you talk about outperformance versus the market? No, I think it's probably a bit ahead of 2% in our numbers, right? To get to mid-singles. But I don't think we see, you know, a particular acceleration. I mean, the market, you know, we're calling it low single, but it looks like it's more at the lower end of low single at the minute. So, you know, mid-single will, in our view, clearly be a beat to the market by some distance. So yeah, the way we're seeing it is that, you know, we should land in that mid-single area, and that would mean, you know, we'd be low to mid in Q3 and Q4. Thanks, that's helpful. And I just wanted to ask on volume leverage here. I mean, you alluded to some additional cost help over the next couple of years. I mean, your EBITDA growth relative to volumes is maybe a little bit more than 2x this year. I guess as we frame 2025, 2026, how should we be thinking about that leverage? Or I guess it's easier if you wanna separately quantify the cost savings different versus the operating leverage. Thank you. Yeah, look, obviously, we're not guiding 25, 26 yet, but we do anticipate good earnings growth into those years with the volume growth. We talked, I think, at the beginning of the year, about having a $30 million-$40 million and sitting in our business from under absorbed fixed costs. So we'd expect that to work out over the next 1-2 years, and that will give a—I mean, I haven't got the exact math to hand, but that clearly will give a ratio that's positive between EBITDA growth and volume growth. So we'll guide more fully on those numbers, you know, obviously in early 2025. If I get a quick follow-up there, so that $30 million-$40 million under absorption, how much do you think you're benefiting from that this year? Sorry, Josh, that broke up. How much do we think? How much do you think that $30 million-$40 million under absorption coming into this year is actually helping 2024? Well, probably about a third, half is helping 2024. We talked about, I think, a $20 million- Yeah. -cost improvement. Is that right, David? Yeah. So we would have said we had $60 million coming into the year, and we'll have, you know, $30 million-$40 million coming out of the year, Josh. Very clear. Thank you. Thank you. Thanks, Josh. We'll go next to Anthony Pettinari with Citi. Good morning. You talked about- Hi, Anthony. You talked about cans gaining in the pack mix in Europe, and I'm wondering, as you look across the portfolio, both Americas and Europe, you know, which categories or countries are cans gaining maybe most rapidly from glass or maybe, you know, plastic or other substrates? And conversely, are there, you know, categories or countries where, you know, can share is stagnant or maybe even giving back some share? Yeah, good question. I think Europe, it's a beer story relative to glass. So I think, you know, glass has obviously had a lot of energy cost headwinds in the last two years with the Russia-Ukraine conflict. And so the can is sitting, you know, at a lower cost position. And when you're in mass beer, margins are not particularly high through the chain, so, you know, you need to optimize on the pack. And so I think cans are benefiting from that this year if you look across the beer portfolio. And then I think, you know, relative to plastics, obviously it's mainly the soft drinks part of the portfolio where we see, you know, our major customers are making commitments around virgin plastic and overall recycled content, which, I think is broadly helpful for the can. So we do see the can gain share in those soft drinks categories. I can't think of a category in particular where we're going backwards. Obviously, there are some categories where we're still low share, spirits, still waters, but, overall, when we look across the piece, we're generally, I think, gaining share in the pack mix. And in Brazil, it's a big shift out of two-way, as we've talked about before, into one-way packaging, and that, some of that is going into one-way glass, but, you know, a lot of it is going into cans. Okay, that's, that's very helpful. And then just two quick follow-ups on Europe. You know, there's some, you know, fairly stringent environmental regulations around single-use packaging that are, are set to be enacted in Europe. And as you think about the impact on the can, you know, over the next 5, 10 years versus other substrates, any quick thoughts on that? And then just finally, you know, Germany, obviously biggest market in Europe, but has some kind of maybe, you know, special relationship with glass. I don't know if you can talk about sort of the long-term opportunity for can penetration in Germany specifically. Sure. So when we look at the European legislation overall, we're pretty comfortable that the can, you know, will benefit, particularly because of, you know, regulation around recycled content, where the can is extremely strong. But also, you know, if we look at our pathway on decarbonization, the actions that we're taking, that our suppliers are taking, it's also a very positive story. Clearly there's some element of returnable packaging in the EU legislation, but there's already a decent amount of returnables in the European market. So we think overall, when we look at it, that the can will do very well from most of that legislation. And then in Germany, I mean, we're on this very long-term recovery from 2003, when the deposit scheme that was put in was very ill-designed, and very favorable to glass, as you say. And so that's why the German market has grown at 10% or 15% a year since then and still has that kind of growth rate. So we don't see that changing in the near term because it's just a recovery to a more normal pack mix once the deposit scheme was fixed and people could find a return path for cans. So Germany remains very good growth, and we think it will do that, you know, a number of years to come. Okay, that, that's very helpful. I'll turn it over. Thanks, Anthony. Thank you. We'll take our next question from Mike Leithead with Barclays. Great. Thanks. Good morning, guys. First question, can you just remind us just where you currently stand on the previous North American customer volume dispute? I think as of earlier this year, you were still on some litigation. Just any update you can provide, and relatedly, are you assuming any financial recovery in your numbers at this point? Yeah, look, obviously we can't give any running commentary on the call, but we're making progress. You know, we're still very optimistic about our contractual position. None of the-- there's nothing assumed in any guidance we've given to the market on that situation. Got it. Fair enough. And then, David, can you just remind us on your cash interest expectations for 2024, as we already start looking ahead to 2025? I appreciate it's still early, but when we factor in the new term loans, some lease repayments, what should cash interest, at least initially, look like for 2025? Yeah, Mike, I mean, for 2024, we've said $200 million-ish, and actually that won't change this year as a consequence, the term loan facility, given the timing of that and given the useful push to that. For 2025, I would model that $10 million higher at this stage. As I referenced earlier, I think that's the net cash cost, given the use we'll put the loan facility to of that. And, you know, we'll see what the other puts and takes are closer to the time when we do our budgeting and give our guidance in February. Great. Thank you. Thanks, Mike. We'll take our next question from Roger Spitz with Bank of America. Hi, this is Olivia in for Roger. Thanks for taking our questions. With regard to the July 2024 $300 million Apollo term loan due 2029, what is the interest rate on that term loan? So the deal is a private deal and is subject to customary closing conditions. So those terms are private at the moment, but I think I've given you good modeling guidance on what the net interest costs will be for the business. You know, we believe after we've put that cash to use. Okay. Thank you. And then, the other question that we have: Can Apollo facility be used to take out the preferred, or is it prohibited? In theory, it could. That's not our intention. Okay. Thank you. Thank you. We'll take our next question from Richard Phelan with Deutsche Bank. I was pursuing the same line of questions as the question here just before this, which is the annual interest. When you say a net interest cost, obviously, that seems low in the context of the current facilities. And I was wondering if that was the $10 million net interest cost only reflected the commitment fee and not the incremental interest, if it was fully drawn. No, so we're saying that we think will be the net interest cost to AMP from fully drawing the facility, which we intend to do during the course of Q3, and then putting that cash flow to use within the business. So, you know, think about ABL utilization, which currently has an effective interest rate of, I think, it's about 5.25%. Think about some of the factoring that we do. You know, those are the sort of uses that we anticipate. Okay. And, in addition to the potential but not intention to buy preferred, can the same thing apply to other bonds in the capital structure, the same way that the new—a portion of the new Apollo facility at Ardagh Group S.A. is intended to purchase bonds in the secondary market at that level? Yeah. Look, this will be cash that sits on our balance sheet. You know, as I said in my prepared remarks, there's no anticipated change to our leverage position as a result of the cash raise. It's to strengthen our business resilience and to demonstrate that strength, you know, across our commercial relationships. I think our bonds really don't become current until 2027, 2028, 2029, so, you know, there's no real need. There would be no incentive for us to do anything with those. Okay. Understood. And, and last point, just to reconfirm, I thought I heard year-end net leverage target, which was 5.2 times. Is that correct? That's correct. Great. Thank you very much. Thank you. We'll take our next question from George Staphos with Bank of America. Hi, everyone. Good morning. Thanks for taking our question. So to the extent that you have a view on this that you can share from your customers, how long do you think the weakness in energy will last, and what do you think is driving it? You mentioned basically comparisons being difficult as the market lapping the progress of new entrants. How much of it do you think is a function of macro and the demographic of some of the larger brands, and in turn, that being a function of, you know, being impacted by inflation? What are your thoughts? When does it pick up, guys? And then I had a couple of follow-ons. Yeah. Hi, George. Yeah, I think it's early to know, is probably the honest answer. You know, there is some talk about some relatively temporary effects. You know, there's lower footfall inconvenience, particularly gas stations with higher gas prices. There was some talk, I think, from one of the big CSD players, that their hydration portfolio had really popped with the hot weather, and that, that might have been a negative for the energy category. So there's possibly some temporary factors in there, and we'll only know that as we go through the remainder of the year. I think clearly they had a couple of years of fabulous growth, so they're lapping some pretty big comps. And we also have some consolidation in that sector with, you know, some M&A activity that happened. So I think there's a lot going on. There was some very good innovation in the category coming out of Covid and some new players who really hit the mark in terms of consumer trends. My anticipation is that, you know, we won't see a huge recovery this year, but I'd expect, you know, the category to get back into growth next year. Just based on our experience of it over the last 30 years, where you've got some very strong players, some very strong innovative activity, and, you know, it's been a, an extremely high performing category in all regions, but particularly North America. So I think our best guess, George, would be next year, but, you know, we need to see how much of this was temporary and how much of it was some underlying factors. No, I appreciate that, Ollie. Second question, you know, one of the other beverage packaging companies was talking about the fact that, within North America, within the U.S., and not trying to take political sides, the uncertainty on the election is maybe causing downstream uncertainty in terms of promotional programs, marketing, operations, and in turn, that feeding back into demand. Are you seeing any signs of that in terms of your conversations with customers or your conversations with other CEOs and what their plans are or are not at the moment, given the uncertainty? No, I mean, I think... I, I, I sort of feel what we're seeing is that the, clearly, there's an attempt to reduce economic activity in the U.S. to bring inflation down. You know, that is putting some degree of additional pressure on consumers who traded with a lot of, COVID support payments, you know, in the previous couple of years. So there is a bit more stress on consumers, although there is now, you know, something approaching real wage growth again. So I think we more see that and the result of what's been a couple of years of pretty significant price rises by our customers, which they found largely stuck, and so then they kept going. And so I think we, we've got to a place where the, you know, those prices are pretty high. Consumers are, meaning their disposable income under a little bit more pressure. So the economic activity is just a bit more muted, which I think is the design, right? If you want to bring down inflation. So, you know, that's, I think, the backdrop for me, more than political, but obviously, we're less in the U.S. We don't hear that from the team. I think that what we believe is that, you know, revenue growth will continue to be a target for our customers. We believe that means they will lean into volume to get that revenue growth, because we think that price lever is reaching its limit. And we believe the can is very well placed for that, because we're very efficient through that chain, and we've got the right credentials. So that's why I remain very constructive on the North American market, and, you know, again, we've had great performance in North America the last couple of years, over 7% year- to- date, very good July. So, you know, we're feeling very constructive about the market. And off of that segue, both for North America and also Europe, you mentioned that your July trends are better than 2Q. You're perhaps building in some conservatism. Are you seeing or what are you seeing that is giving you reason to maybe build in some conservatism into the back half guidance and on sell-through, recognizing, you know, we all like prudence from our management team, so we'd rather the, you know, what you're doing than overoptimism. But are you seeing anything that gives you pause in terms of the demand trend? And then lastly, you mentioned, I think, in North America, that there was some volume that you missed on because you just didn't have the capacity to produce it. Are we getting to a point where maybe you need to, you know, consider another facility, or said differently, what amount of creep, what amount of productivity and growth CapEx-driven capacity growth can you see over the next several years without putting on a new facility? Thank you, and good luck in the quarter. Thanks, George. Yeah, no, actually, that, that comment was more about Europe. Okay. So, what we saw in Europe was that we'd been very cautious on inventory build. Our customers have been very cautious on inventory build. So we saw, you know, a big destock in Q4 that I think, you know, the whole industry has commented on. We saw a bit of a recovery in Q1, but as it turned out, the summer was much stronger than anticipated. And then the second effect we saw was a big demand on new labels. So, you know, big demand on fresh production, which does unfortunately reduce the efficiency of our facilities, you know, because we're doing more changeovers. So we lost some production capacity as a result of that in the middle of a pretty strong demand season. That's why I said, you know, I could imagine we'd done another point of growth if we'd had that, capacity or the correct inventory already built. So I don't think that's telling us too much about needing to build additional capacity because, A, I think customers will be more cautious on inventory and perhaps on contracting going into 2025. And I think also we're still bringing up some capacity, particularly in La Ciotat, in the south of France. So we will have some additional capacity going into 2025. So. And then sort of turning that to your broader question, I think, across both North America, Brazil, and Europe, we do see that we can grow at least into 2025 and probably into 2026 with the current footprint. As we, you know, because we are still ramping, we're still generating additional efficiencies, and we are driving efficiencies generally in our portfolio. Then to your first question about the EU demand trends, we did see some slightly negative numbers in May on a sort of overall volume level for Europe in certain categories, not on the can side, but... And that was linked to, you know, we had some very poor weather in Northern Europe at that time. So that gave us a little bit of a pause, but, you know, the weather in the summer is looking pretty good at the minute, and, you know, again, July looks strong. Our constraint at the moment is mostly, you know, again, our low inventory levels and our production capacity rather than demand. It's possible we're being on the cautious side, but as you say, we'd rather be there than overlead. Yeah, I appreciate all that, Ollie. Yeah, sorry about the miscategorization, Europe versus North America. I'll turn it over. Thanks, guys. No problem. Thanks, George. We'll take our next question from Gabe Hajde with Wells Fargo. Hi, David, good morning. Good morning, Gabe. I wanted to ask about the sort of implied guidance for Q4 at $155. And you talked about increased end sales, excuse me, down in Brazil and just the mix effect of that. I mean, generally speaking, you know, we heard all those comments. You tend to sell a can and an end, you know, it's got to be filled at some point. So, the implied $155 is sort of in between, what? 21 and 23, in the fourth quarter. Is there anything else, again, maybe going to this conservatism question, that would say profit could be down even if volumes are up, more in the Americas versus Europe? Because I think you guys had to throttle back production in Europe. So I would expect a pretty good fourth quarter, if you get the volume growth or if that materializes the way you'd expect on, on the profit side. Yeah, look, I think to your point, we're planning to sell cans and ends, and one of the problems is that we report this all quarterly, and so you do, particularly with the Brazil situation, get some timing effects. But by the end of the year, we don't anticipate for there to have been a different sale of can and ends in Brazil. So you're right, there's some amount of what happened in Q2 that can reverse slightly out in the remainder of the year. But then, you know, overall, we see that balanced across the year. I don't think there's anything else, but I'll check with David, that's affecting our H2 guide in North America. That's particularly negative EBITDA to volume. So I think this is more, you know, our overall commentary that we're, you know, we're still being relatively cautious, again, particularly around the European situation, but also just being cautious around H2 generally, you know, to make sure we hit our guidance. David, would you add anything? No, I'd echo that. And, you know, clearly, we do expect to see growth in the Americas segment through H2. Okay. And then maybe this is again getting to the conservatism, but the... I think the June data, as we can see it for the two big categories in Europe, beer and carbonated soft drink, fell off a decent amount in June. Now, again, the timing of which is a little bit funky based on when the Euro Cup started and what data we get. I'm just curious, is that from your vantage point, maybe an on-venue versus off-venue issue? And again, you're not seeing anything in terms of customer sell-through? Yeah, look, as I tell you, I mean, July is looking pretty strong. We have tough comps in both Europe and North America in August, so you know, we'll look less strong. But we're not seeing anything really clear in the data yet that says there's a big cutback, but we are being cautious because, like you, we've seen some of these less positive numbers. But generally, the can is, you know, in the mix, is doing pretty well. So that can explain some of these gaps between overall volume numbers and can volumes and growth. And certainly, we've largely been approached through this season by customers for more. I think they did go in pretty low stock. And so that's been the general message throughout. As I said, we would have probably sold more if we'd been able to produce more. Nothing yet to support a more bearish view, but we are, you know, we are being cautious because you're right, some of that market data is not as positive as what we're seeing. Okay. And last one for me, thinking about 25, 26, just from a contracting standpoint, I think the industry, generally speaking, was prudent to forward contract out when things are pretty tight. Maybe two-part question. One in Brazil, is it the second quarter weakness, if you want to call it that, truly the more geographic related in terms of where product is being produced? We've seen a little bit, what feels like a little bit of movement around down there, which generally speaking, is not a good thing. And then in North America, can you just remind us when kind of your next big contract shows up? I think it's 27, but I could be wrong. Yeah, so we've got some contracts that come up at the end of next year, you know, in the soft drink space that we've referenced before, you know, that we'll start talking to customers about, you know, this year and next year. We've got other contracting activity now already going on. So actually, the situation we came out of COVID with, with you know, significant numbers of contracts, you know, in this sort of time period, some of that is moderating, want to move earlier or we've, you know, there have been different situations. But yeah, there are a couple of the bigger soft drinks positions in North America that come free at the end of 2025 and I think one in the end of 2026. So we'll be contracting those. You know, clearly, there's been constructive action in North America on capacity by ourselves and others. So we're largely constructive about those situations. In Brazil, we didn't get impacted by the, you know, the flooding and other natural events, so you know, this was a customer mix issue. Mainly, we had a very strong H2 last year on the customer mix side, and then, you know, we're slightly on the wrong side of that with one customer. And then it was also some downtime that we didn't anticipate towards the end of the quarter. So we expect that to pick back up in H2. Got it. Thank you. Thanks, Gabe. Thank you. We'll take our next question from Arun Viswanathan with RBC Capital Markets. Great, thanks for taking my question. Hope you guys are well. So just two questions. I guess first off, just the first question is just on the category mix and promotional activity. So it sounds like there has been an uptick in, you know, promotional activity with NABs, but do you see that maybe crossing over to the beer side, you know, at some point? And if so, how much? And then the second question I had was really around your own kind of mix. You know, given that there has been a little bit of a slowdown on the energy side, maybe that's impacting your Slim can capacity, could you just kind of review kinda, you know, your ability to flex to other product sizes if, if, if that's also a limitation? Thanks. Sure. Yeah. So no, I think, I mean, the main being impacted by the sixteen- by the energy category issues is 16-ounce, so more a standard can width. And, yeah, look, I think I mentioned it earlier in the call, but what we've done, we built a lot of Sleek capacity, so not Slim is the term in the US. We built a lot of Sleek capacity in, through COVID to deal with the seltzer growth that was anticipated, and what we've been doing is converting some of that back to standard width cans, so 12, 16. And I think that just means we're in a very good place to deal with whatever trends we get over the next couple of years. So we're in a good spot there. And then in terms of the category mix and the promos, I mean, I think we are just seeing, and it's in the data, you know, an increased tick up in promo activity quarter by quarter, but just not necessarily at the speed we had hoped for or the depth necessarily that, that is needed to really drive, you know, very big increases in volume. So again, we expect that trend to continue because, you know, you look at where pricing is sitting, it's clear it's meeting some degree of consumer resistance, and our customers, you know, will want some revenue growth. So we do anticipate that they will keep pushing on the volume lever in the next year or two. Great. Thanks a lot. Thanks, Arun. Thank you. We'll take our next question from Stefan Diaz with Morgan Stanley. Great. Thank you for taking my follow on. Maybe just one more quick one from me. As we look into 2025, you know, your growth investment plan is largely finished. You know, you're benefiting from customer wins here in North America here in 2024. But maybe outside of, you know, any category or customer differences, are there any idiosyncratic tailwinds that you believe would drive, you know, Ardagh to outperform the market as we look into 2025, 2026? Not particularly. So I think the, you know, the growth from contractual positions that were largely arranged in, you know, the COVID and post-COVID period, they're, you know, they're largely complete. So we're not anticipating any particular additional gains. It's never been something we particularly targeted for the business. So, you know, there's nothing I'd call out there. Clearly, we have had, you know, a good run with customers, you know, which I think is about the delivery we provide, quality and service, and the relationship. So I wouldn't rule it out either, that we could grow slightly ahead. And then it's really about the mix, you know, which categories we're in and where they grow, which, again, we're relatively light in mass beer in the U.S., which has been a category under pressure. And actually, I realize Arun asked about promotions there. I think promotions will come back into that category more over time, but clearly, it's under pressure from a you know changes in drinking habits you know in younger consumers as well. So we are a bit lighter there, which could give us a tailwind, has done in the last couple of years. And then Europe, we're very broad based. So you know no particular obvious thing that we are strong in Germany, which we called out earlier in the call as a higher growth market, so that could be a tailwind. And then in Brazil, you know we're all it just depends again how the customers go. So yeah, looking into 25, 26, we're probably more looking into market growth you know plus a little bit maybe. Great. Thank you. Thanks, Stefan. That will conclude our question and answer session. At this time, I would like to turn the call back over to Mr. Graham for any additional or closing remarks. Thanks, Katie. So look, just to summarize, our Q2 earnings performance was ahead of expectations. That's the second successive quarter we've done that. Strong performance, both Europe and Americas, but particularly Europe, which gives us the confidence to raise our, our guidance range for, for the full year. And I think that, you know, 2024, the, the big trend we're seeing is that we see increased predictability across our markets, and that's very encouraging looking into the second half and into 2025. So we look forward to talking to you at our Q3 results. Thanks very much. Thank you. That will conclude today's call. We appreciate your participation.