Rexam's beverage can unit sees global volumes rise 6% in Q3--in line with expectations--as European volumes slow over H1 but Russia returns to growth; Healthcare unit underperforms due to loss of business in animal health part of Pharam division
November 15, 2012
Rexam PLC, the global consumer packaging company, today issues its interim management statement for the period from 1 July 2012.
Overall performance in Beverage Cans is in line with our plans, with global volumes up 6% in Q3. Excluding Russia, European volumes increased at a slightly lower rate than in the first half as expected, while Russia returned to growth. In North America the recovery of some of the standard can volumes lost in 2011 continued to drive our performance, and growth in South America accelerated.
Performance in Healthcare is somewhat below our expectations, principally as a result of lost business in the animal health part of our Pharma division.
We announced the sale of our Personal Care business in July 2012 for $709m, to be sold in two parts. The divestment of our High Barrier Food packaging business completed on 31 August 2012. We have received the necessary regulatory approvals from the US, Europe and Brazil to complete the sale of the Cosmetics, Toiletries and Household Care business and are now awaiting approval from the Chinese authorities. Although the timing of this final clearance cannot be certain, we are still targeting completion by the end of this year.
Our net debt at 30 September 2012 was £1.2bn; lower than at 30 June primarily due to the $250m of proceeds from the sale of High Barrier Food. In the period we refinanced our 2013 maturities with $750m of senior notes in the US private placement market due in 2022 and 2024, with most of the proceeds to be received by the year end. As a result of this refinancing our effective interest cost will be around 4% from the second half of 2013.
Graham Chipchase, Rexam’s Chief Executive said:
“Despite a challenging trading environment, the Group's overall performance is broadly in line with our expectations. The divestment of Personal Care is in its final stages and we are on track to return £370m of the proceeds to shareholders. We continue to focus on generating cash, managing costs and improving return on capital employed, and our progress to date gives us confidence in achieving our 15% return on capital employed target by the end of 2013.”