Ardagh Glass Finance plc - Irish Stock Exchange

the twelve months ended September 30, 2009, 44% of our revenues was denominated in currencies
other than the euro.
In addition to currency translation risk, we are subject to currency transaction risk. Our policy is,
where practical, to match net investments in foreign currencies with borrowings in the same currency.
In order to provide a ‘‘natural’’ hedge, we currently have our borrowings that relate to our U.K.
operations in pounds. Interest payments in pounds help to offset our exposure to fluctuations in pre-tax
profits, as measured in euro, due to currency fluctuation, while pound denominated debt is matched by
pound denominated assets. However, the debt and interest payments relating to our Swedish, Danish
and Polish operations are all be denominated in euro. Fluctuations in the value of these currencies with
respect to the euro may have a significant impact on our financial condition and results of operations
as reported in euro.
Insofar as possible, we intend to actively manage this exposure through the deployment of assets
and liabilities throughout the Group and, when necessary and economically justified, entering into
currency hedging arrangements, to manage our exposure to foreign currency fluctuations by hedging
against rate changes with respect to the euro. However, we may not be successful in limiting such
exposure, which could adversely affect our business, financial condition and results of operations.
We are also exposed to interest rate risk. Fluctuations in interest rates may affect our interest
expense on existing debt and the cost of new financing. We occasionally use swaps to manage this risk,
but sustained increases in interest rates could nevertheless materially adversely affect our business,
financial condition and results of operations. We currently have in place an interest rate swap which
exceeds the amount of the underlying EURIBOR-based variable rate debt. Consequently, we are also
subject to the incremental risk of the excess of the amount of the interest rate swap over the amount of
such variable rate debt. As of September 30, 2009, we had A61.6 million of interest rate swaps in excess
of the outstanding amount of such EURIBOR-based variable rate debt. As of the same date, we had
A177.5 million of undrawn EURIBOR-based variable rate debt, which is drawable at our discretion.
In addition, we are exposed to movements in the price of natural gas. We try to ensure that
natural gas prices are fixed for future periods but do not always do so because the future prices can be
far in excess of the spot price. We do not use commodity futures contracts to limit the fluctuations in
prices paid and the potential volatility in earnings and cash flows from future market price movements.
If the spot price of natural gas rises unexpectedly, and we have not fixed the price of natural gas in
advance of our usage requirements, our earnings and cash flows could be adversely affected.
For a further discussion of these matters and the measures we have taken to seek to protect our
business against these risks, see ‘‘Operating and Financial Review and Prospects—Quantitative and
Qualitative Disclosures About Market Risk’’.
It is difficult to compare our results of operations from period to period.
It is difficult to make period-to-period comparisons of our results of operations. The Ardagh Glass
Group has been created as a result of a series of acquisitions, de-mergers and other corporate
transactions over a number of years. These acquisitions have had and are expected to continue to have
a positive effect on our results of operations in subsequent periods following their acquisition. The
increases in revenue, gross profit, sales, general and administration expenses and operating profit in the
year ended December 31, 2008 compared with the year ended December 31, 2007 and in the year
ended December 31, 2007 compared with the year ended December 31, 2006 are largely due to the
Rexam Acquisition, which was completed in June 2007. Furthermore, our sales and, therefore, our net
operating income is variable within the fiscal year due to the seasonality described above. Thus, for all
of these reasons a period-to-period comparison of our results of operations may not be meaningful.
32