Ardagh Glass: EUR 1.6 million ex gratia payment to CEO

Ardagh Glass gave its former chief executive Eddie Kilty an “ex gratia” payment of EUR 1.6 million in 2007 following his retirement from his post on 31 March 2007. In addition, a contribution of EUR 1…

Ardagh Glass gave its former chief executive Eddie Kilty an “ex gratia” payment of EUR 1.6 million in 2007 following his retirement from his post on 31 March 2007. In addition, a contribution of EUR 118,000 was made to Mr Kilty“s defined contribution pension scheme. This has emerged in accounts just filed by Ardagh Glass Group plc, which is controlled by Irish financier Paul Coulson and has glassmaking operations in seven European countries. Mr Kilty, who had held the post for many years and is still a director of the group, earned just over EUR 1.9 million from Ardagh in 2007 in remuneration. He was paid a salary of EUR 334,000 and received fees of EUR 5,000. Mr Coulson was the next highest earner on the Ardagh board, receiving a salary of EUR 408,000 in 2007, the same amount as in 2006. In total, the Ardagh directors were paid EUR 4.3 million in 2007, up from EUR 2.4 million a year earlier. Losses at the manufacturing group decreased in 2007 to EUR 14.6 million from EUR 40.2 million in 2006. This was due to a sharp rise in revenues, driven by Ardagh“s acquisition in June 2007 of Rexam, a glassmaker with operations in five countries in northern Europe. The accounts show that the group“s turnover increased by 58% in 2007 to just over EUR 1 billion. Ardagh, which employs almost 6,800 staff, made an operating profit of EUR 55.5 million in 2007, up from just EUR 1.6 million in 2006. The company spent EUR 87.2 million financing its EUR 1 billion in borrowings. This compared with EUR 53.6 million a year earlier. No dividend was paid to shareholders. The purchase of Rexam, for an “enterprise value” of EUR 647 million less net debt, doubled the size of Ardagh“s business. The accounts state that, based on a full-year contribution from Rexam, Ardagh would have earned revenues of just more than EUR 1.3 billion and its operating profit would have been EUR 94.6 million. The report from Ardagh“s directors described 2007 as a “very successful year” for the company. “The UK and Germany performed well in 2007 with improvements in sales and Ebitda [earnings before interest, tax, depreciation and amortisation] over the prior year as a result of improved trading conditions”, the report stated. “Trading conditions in Poland, Italy and in the engineering businesses remain at acceptable levels”. In January 2008, Ardagh announced a three-year EUR 450 million investment programme in its manufacturing facilities to “strengthen its competitive position within Europe”. The accounts state that this will generate annual cost savings of about EUR 20 million in the short term and around EUR 14 million in the medium term.