Ardagh Glass - comment

The numbers were worse than we expected as volumes in the US continue to fall and Europe/Africa only generates modest improvements. The H2 volume improvements are not coming despite easier comps. Glass volume falls in North America were blamed on high inventory levels. However, the slow pace of recovery in Q3 suggests some of the fall in volumes is structural. Ardgah Glass cut Adjusted EBITDA guidance to $600m (from $650m). Value in Ardagh Group breaks in the SUNs, which have rallied on the hope that Cooperation Agreements will reduce the coming haircuts. The call was short, with no buy-side side questions, suggesting that most investors are likely formally or informally supporting one group or another. We remain sceptical of discipline holding and are short on the SUNs. We are updating our analysis and will communicate with you imminently.