Ardagh Glass Finance plc - Irish Stock Exchange

major drivers of the rise in gross profit of this segment were, increased sales price to the amount of
A13.3 million, improved productivity and production mix totaling A14.9 million. Offsetting these
increases were additional depreciation of A5.2 million resulting from the asset value adjustments due to
the IFRS acquisition accounting requirements being applicable for a full year and energy and raw
material increases of A14.9 million.
SG&A Expenses
SG&A expenses for 2008 were A73.7 million compared to A 76.3 million in 2007, a reduction of
A2.6 million or 3.4%. Year-on-year average translation rate changes accounted for A1.5 million of the
decrease. Excluding the foreign exchange effect, SG&A expenses as a percentage of revenue remained
relatively flat between the two periods. While headcount reductions as a result of the integration of the
Rexam Glass division drove SG&A costs down, this was offset by inflation and the cost impact of
strengthening the Group Head Office.
Other Income and Expense
The amount of other income and expense for 2008 is A24.9 million and is detailed below under the
heading ‘‘Other Income and Expenses’’ in the section titled ‘‘Years ended December 31, 2008 and 2007
(Historical)’’. In 2007, A 3.0 million of costs attributable to Rexam prior to its acquisition have been
treated as ‘one time’. These costs principally comprised royalty and IT costs in excess of the normal
course of operating the business, which were allocated by Rexam to the glass division.
Operating Profit
Operating profit excluding ‘‘one time’’ items decreased by A1.4 million or 1.3% from A106.5 million
in 2007 to A105.1 million in 2008. The movement of the average translation rates applied to the year
ended on December 31, 2007 compared to the year ended on December 31, 2008 decreased the Euro
value of operating profits by A1.7 million year-on-year; A2.7 million in the United Kingdom segment
and a favorable A1.0 million in the Other segment.
Years Ended December 31, 2008 and 2007 (Historical)
This discussion is based on a comparison of the audited consolidated financial statements of
Ardagh for the years ended December 31, 2008 and 2007.
Operating Results
The increases in revenue, gross profit, sales, general and administration expenses and operating
profit are largely due to the Rexam Acquisition which was completed in June 2007. For this reason
each of the headings have not been discussed independently as to do so would not be meaningful.
Instead a comparison of 2008 and 2007 trading results on a pro forma basis has been included prior to
this section of the report.
Other Income and Expenses
Net expense amounting to A24.9 million and A8.9 million has been treated as ‘one time’ in 2008
and 2007, respectively. These ‘one time’ costs are as follows:
2008
• The following costs were incurred in Germany:
• A9.0 million redundancy costs associated with the closure of the Schleiden plant;
52