RNS Number : 4472C
13 November 2009
13 November 2009
Interim Management Statement
Rexam PLC today issues its interim management statement for the period from 1 July 2009 in accordance with the UK Listing Authority's Disclosure and Transparency Rules.
Group results in the period were in line with our expectations as the successful execution of cost reduction initiatives and foreign exchange translation gains offset weak volumes.
In Beverage Cans we have seen no change in the volume trends experienced in the first half. In Europe, volumes were soft, and trading in both specialty cans and Russia continues to be challenging. In North America, Rexam volumes were in line with the market. The business in South America continued to grow. The execution of cost reduction programmes across the cans business to deliver £40m in savings by 2010 is proceeding according to plan, and will help underpin future profitability in the sector. The plants in Oklahoma City in North America and Dmitrov in Russia were closed in July and August respectively and, in September, we announced the closure of our Dunkirk plant in France.
In Plastic Packaging, our cost reduction actions partly offset continued weak demand. Our Pharma business grew, and Personal Care has benefited from some new product launches. However, in Closures, demand for carbonated soft drink and bottled water closures continued to decline in what may now be a more enduring trend. The cost reduction initiatives to close and consolidate six plants and reduce the workforce by approximately 10% are on track to deliver the expected £30m savings by 2010, and support profitability in the face of future volume uncertainty.
We remain committed to maximising cash flow, reducing capital expenditure and improving working capital. Following the rights issue in August (£334m net proceeds), Moody's has restored Rexam to stable outlook investment grade, and Standard and Poor's has reconfirmed our investment grade rating, also with a stable outlook. Our net debt/ EBITDA covenant ratio at 30 September 2009, improved to 2.3 times (Q3:2008 2.9 times).
Leslie Van de Walle, Rexam's Chief Executive Officer said:
"Despite continued volume weakness our strong focus on reducing cost, increasing efficiencies and improving cash flow, give us confidence that we will meet market expectations for the full year. We remain cautious about the trading outlook, but will continue to focus on cash and costs to ensure we are well placed to participate fully in the upturn when it comes."
Leslie Van de Walle, Chief Executive Officer +44 20 7227 4100
David Robbie, Finance Director
Sandra Moura, Head of Investor Relations
Richard Mountain +44 20 7269 7291
Rexam will host a conference call for investors and analysts on Friday 13 November at 08:00 (UK time).
Participants dial-in number:
UK 020 7906 8557
From abroad +44 20 7906 8557
A replay service will be available until 27 November
Dial-in no: +44 (0)20 7075 6589
Notes to Editors
Rexam is the No 2 global consumer packaging company. It is a leading global beverage can maker, and a major global player in rigid plastic packaging. Our vision is to be the leading global consumer packaging company. We are business partners to some of the world's most famous and successful consumer brands as well as young, entrepreneurial start-ups. We offer a broad range of packaging services and solutions for different industries, using different materials and technologies. Three things characterise us - leadership in our industry, our commitment to innovation and our passion to deliver exceptional value. We employ some c.23,000 people in more than 20 countries and are a member of the FTSE 100. Rexam's ordinary shares are listed with the UK Listing Authority and trade on the London Stock Exchange under the symbol REX. For further information, visit Rexam's website at www.rexam.com
This information is provided by RNS
The company news service from the London Stock Exchange