Ardagh Glass Finance plc - Irish Stock Exchange

OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion should be read together with, and is qualified in its entirety by reference to,
our audited non-statutory consolidated financial statements for the three-year period 2006-2008 and the
unaudited consolidated interim financial information for the nine-month periods ended September 30, 2009
and 2008, in each case including the related notes thereto, included in this Offering Memorandum,
beginning on page F-1. The following discussion should also be read in conjunction with ‘‘Presentation of
Financial and Other Data’’ and ‘‘Selected Consolidated Financial and Other Data of Ardagh’’. Except for
the historical information contained herein, the discussions in this section contain forward looking
statements that reflect Ardagh’s plans, estimates and beliefs and involve risks and uncertainties. Our actual
results could differ materially from those discussed in these forward looking statements. Factors that could
cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere
in this Offering Memorandum, particularly in ‘‘Risk Factors’’ and ‘‘Forward-Looking Statements’’.
This Offering Memorandum contains the 2007 Pro Forma Financial Information. The 2007 Pro Forma
Financial Information is based on the historical consolidated financial statements of Ardagh for the fiscal
year ended December 31, 2007, aggregated with the historical combined unaudited financial statements of
Rexam for the period from January 1, 2007 to June 21, 2007 and gives effect to the Rexam Acquisition as if
it was completed on January 1, 2007. The 2007 Pro Forma Financial Information is not necessarily
indicative of what actual results of operations of Ardagh would have been assuming the Rexam Acquisition
had been consummated at the beginning of January 1, 2007, nor does it purport to represent the results of
operations for future periods.
Some of the measures used in this Offering Memorandum are not measurements of financial
performance under IFRS and should not be considered an alternative to cash flow from operating activities
as a measure of liquidity or an alternative to operating profit/(loss) or profit/(loss) for the period as
indicators of our operating performance or any other measures of performance derived in accordance with
IFRS.
Overview
Ardagh is one of the leading suppliers of glass packaging to the food and beverage sectors in
Europe. The business has manufacturing operations in Germany, the United Kingdom, Poland, The
Netherlands, Sweden, Denmark and Italy. In addition, Ardagh’s new division Ardagh Glass Engineering
provides technology, engineering and mould manufacturing activities.
Ardagh operates 20 glass plants with 40 glass furnaces and 101 production lines in seven countries.
In 2009, the aggregate production of Ardagh’s glass container businesses was approximately 2.9 million
tonnes. For the year ended December 31, 2009, Ardagh had an approximate one-third share of the
Northern European glass container production by volume and an approximate 16% share of the total
European glass container production by volume, based on management estimates.
Ardagh has pursued an acquisition strategy of careful evaluation, selection and pursuit of strategic
opportunities. During the periods under review, Ardagh has completed a number of acquisitions which
affect results from period to period. See ‘‘Business—The Rexam Acquisition’’ and ‘‘Business—History
and Development of the Ardagh Glass Group’’.
Ardagh generates its revenues principally from its glass container manufacturing business and its
glass technology and manufacturing equipment business. Revenues are principally dependent on sales
volumes and sales prices.
Sales volumes are affected by a number of factors, including factors impacting customer demand,
seasonality and the capacity of Ardagh’s plants. Demand for glass containers may be influenced by
trends in consumption of beverages, industry trends in packaging, including marketing decisions, and
the impact of environmental regulations. The beverage industry is seasonal in nature, with demand
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