Rexam issues Q3 2015 trading update

Rexam, a leading global beverage can maker, issued the following trading update for the period from 1 July 2015.

Results for the Group are in line with the 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, the company's expectations for the full year are unchanged.

Looking into 2016, the environment remains challenging but Rexam continues 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. The company 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, the company would expect a £30-35m tailwind, although premium remains uncertain and a further update will be provided at Rexam's 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.