Ardagh Metal Packaging (AMBP) Risk Factors

The sectors in which we operate are relatively mature and competitive. Prices for the products manufactured by us are primarily driven by raw material costs. Competition in the market is based on price, as well as on innovation, sustainability, design, quality and service. Increases in productivity, combined with potential surplus capacity from recent or planned new investment in the industry, could result in pricing pressures in the future. Our principal competitors include Ball Corporation, Crown Holdings and CANPACK, and some of our competitors may have greater financial, technical or marketing resources, or may have more desirably located, newly installed or excess capacity. See "-An increase in metal beverage can manufacturing capacity, including that of our competitors, without a corresponding increase in demand for metal beverage can packaging could cause prices to decline or result in the curtailment or closure of certain of our operations, which could have a material adverse effect on our business" for a further discussion on impact of excess capacity in our market. To the extent that any one or more of our competitors become more successful with respect to any key competitive factor, our ability to attract and retain customers could be materially adversely affected. Moreover, changes in the global economic environment could result in reductions in demand for our products in certain instances, which could increase competitive pressures. The occurrence of any of the aforementioned events, among others, could have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. See "-Risks Relating to Economic, Market and Political Matters-Changes to the economic, political, credit, and/or financial environment in which we operate could have a material adverse effect on our business, such as affecting consumer demand for beverage products, which could impact our customers and as a result, reduce the demand for our products" for a further discussion on the impact of the global economic environment on our business. In addition, we are subject to substantial competition from producers of packaging made from plastic, glass, carton and composites, for example, PET bottles for carbonated soft drinks. Changes in consumer preferences in terms of packaging materials, style and product presentation or a decrease in the costs of alternative packaging products can significantly influence sales, and there can be no assurance that our products will successfully compete against alternative packaging products. An increase in consumer demand for alternative packaging could have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. Certain of our customers meet some of their metal beverage packaging requirements through self-manufacturing, which reduces their external purchases of packaging. For example, AB InBev manufactures metal beverage packaging through its affiliate, Metal Container Corporation in the United States, as well as directly in Brazil. The potential of further vertical integration of our customers could introduce new production capacity in the market, which may create an imbalance between metal beverage packaging supply and demand and could have a material adverse effect on our future performance.

Some of our largest customers have previously acquired companies with similar or complementary product lines, for example, in 2017 Heineken acquired Brasil Kirin and in 2016 AB InBev acquired SABMiller. Such consolidation resulted in an increase in the concentration of our sales with our largest customers and if similar consolidations should occur in the future, it could potentially be accompanied by pressure for lower prices. Increased pricing pressures from these customers may have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. In addition, any consolidation of our customers may lead to their reliance on a reduced number of suppliers. If, following the combination of one of our customers with another company, a competitor was to be the main supplier to the newly consolidated company, this could have a material adverse effect on our business, financial condition, results of operations, cash flow and prospects.

We are currently involved in various litigation matters, and we anticipate that we will be involved in litigation matters from time to time in the future. The risks inherent in our business expose us to litigation, including personal injury,environmental litigation, contractual litigation with customers and suppliers, intellectual property litigation, cybersecurity related litigation, tax or securities litigation, and product liability lawsuits. We cannot predict with certainty the outcome or effect of any claim, regulatory investigation, or other litigation matter, or a combination of these. Any such litigation, arbitration or other proceedings, current or future, whether with or without merit, could be expensive and time consuming, and could divert the attention of senior management, and any adverse outcome in these or other proceedings, could harm our reputation and have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. For more information on our contingencies for legal proceedings, see note 28 to our audited consolidated financial statements.

Our operations and properties are subject to extensive laws, ordinances, regulations and other legal requirements relating to the protection of people and the environment. The laws and regulations which may affect our operations include requirements regarding remediation of contaminated soil, groundwater and buildings, water supply and use, natural resources, water discharges, air emissions, waste management, noise pollution, asbestos and other deleterious materials, the generation, storage, handling, transportation and disposal of regulated materials, product safety, food safety, and workplace health and safety. See "-We are subject to extensive, complex and evolving legal and regulatory frameworks and changes in laws and government regulations and their enforcement may have a material impact on our operations" for a discussion of the product and food safety regulations that are applicable to us and "-Risks Relating to Our Employees and Operations-Any interruption in the operations of our production facilities may adversely affect our business including infrastructure failure from physical damage" for a discussion of the risks related to workplace health and safety. These laws and regulations are also subject to constant review by lawmakers and regulators which may result in further, including more stringent, environmental or health and safety legal requirements. We have incurred, and expect to continue to incur, costs to comply with such legal requirements, and these costs may increase in the future. Demands for more stringent pollution control devices could also result in the need for further capital upgrades to our production facilities. For example, under the EU Industrial Emissions Directive (Directive 2010/75/EU) ("EU IED"), permitted pollutant emissions levels from our production facilities are substantially reduced on a periodic basis. EU member states may continue to introduce lower permitted pollutant emissions levels into national legislation and impose stricter limits in the future. Additional pollutant or GHG emissions control schemes may be introduced in any jurisdiction on a national and/or local level, which may require additional measures. Further, in order to comply with air emission restriction, significant capital investments may be necessary at some sites. We also require a variety of permits to conduct our operations, including operating permits such as those required under various U.S. laws, including the federal Clean Air Act, and the EU IED water and trade effluent discharge permits, water abstraction permits and waste permits. We are in the process of applying for, or renewing, permits at a number of our sites. Failure to obtain and maintain the relevant permits, as well as non-compliance with such permits, could result in criminal, civil and administrative sanctions and liabilities, including substantial fines and orders, or a partial or total shutdown of our operations, as well as litigation, any of which could have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. Furthermore, changes to the laws and regulations governing the materials that are used in our production facilities may impact the price of such materials or result in such materials no longer being available. For example, the European Union Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH") regulations impose stringent obligations on the manufacturers, importers and users of chemical substances. Certain substances that we use in our manufacturing process may be required to be removed from the market under REACH's authorization and restriction provisions or substituted for alternative substances. Any of the foregoing could adversely impact our operations and result in a material adverse effect on our business, results of operations, financial condition, cash flows or prospects. In addition, our sites often have a long history of industrial activities and may be, or have been in the past, engaged in activities involving the use of materials and processes that could give rise to contamination and result in potential liability to investigate or remediate, as well as claims for alleged damage to persons, property or natural resources. These legal requirements may apply to contamination at sites that we currently or formerly owned, occupied or operated, or that were formerly owned, occupied or operated by companies we acquired or at sites where we have sent waste to third-party sites for treatment or disposal. There can be no assurance that our due diligence investigations identified or accurately quantified all material environmental matters related to the facilities that we acquired and liability for remediation of any third-party sites may be established without regard to whether the party disposing of the waste was at fault or the disposal activity was legal at the time it was conducted. If we are designated as a potentially responsible party for the clean-up and remediation of any sites, including any "Superfund" sites in the United States, this could impose significant costs on us and result in reputational damage, which could have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

Demand for our packaging depends on demand for the products that use our packaging, which is primarily consumer driven and dependent on general economic conditions. Such macroeconomic conditions can be strongly influenced by geo-political events such as war, insurrection and other such conflicts between nations and state actors and can arise with little warning.  Deteriorating general economic conditions may adversely impact consumer confidence resulting in reduced spending on our customers' products and, thereby, reduced or postponed demand for our products. Any adverse economic conditions may also lead to a limited availability of credit, which could have an adverse effect on the financial condition, particularly on the purchasing ability of some of our customers and distributors. This may result in requests for extended payment terms, credit losses, insolvencies and diminished available sales channels. Deteriorating general economic conditions could also have an adverse impact on our suppliers, causing them to experience financial distress or insolvency, and jeopardizing their ability to provide timely deliveries of raw materials and other essentials to us, which could in turn have material adverse effects on our business, results of operations, financial condition, cash flows or prospects. Furthermore, such changes in general economic conditions as described above, among others, may reduce our ability to forecast developments in our industry and plan our operations and costs accordingly, resulting in operational inefficiencies. Recent events that have had a significant impact on macroeconomic conditions around the world include the COVID-19 pandemic, the Russia-Ukraine war and the cost-of-living crises in countries around the world. Government measures to contain the COVID-19 pandemic resulted in significant decline in business activity around the world. The Russia-Ukraine war and the sanctions and export-control measures instituted by the United States, the European Union and the United Kingdom, among others, against Russian and Belarussian persons and entities in response have contributed to heightened inflationary pressures (including increased prices for oil and natural gas), market volatility and economic uncertainty, particularly in Europe, which have affected our business. Inflation rates began rising significantly in the European Union, the United States, the United Kingdom and Brazil in late 2021 and continued to remain at high levels through 2022 and 2023. Sustained high prices and actions taken by central banks and other state actors to combat rising inflation rates could further undermine economic growth, contribute to regional or global economic recessions, cause declines in consumer spending and confidence and increase borrowing costs, among other effects, each of which could materially adversely impact our business, results of operations, financial condition, cash flows or prospects. See "-Risks Relating to Our Capital Structure-Our substantial debt could adversely affect our financial health and our ability to effectively manage and grow our business" for a detailed discussion on the impact of changes in global economic conditions on our ability to raise new financing or refinance our existing borrowings. The slowdown of the global economy could lead to volatility in exchange rates that could increase the costs of our products. See "-Risks Relating to Economic, Market and Political Matters-Currency, interest rate and commodity price fluctuations may have a material impact on our business" for a further discussion on how this volatility could have a material adverse effect on our business. Any economic downturn or recession, lower than expected growth, rising inflation or an otherwise uncertain economic outlook, either globally or in the markets in which we operate could have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

Our functional currency is the euro and we present our financial information in U.S. dollars. Insofar as possible, we actively manage currency exposures through the deployment of assets and liabilities throughout the Group. Our policy is, where practical, to match net investments in foreign currencies with borrowings and swaps in the same currency. When necessary and economically justified, we enter into currency hedging arrangements to manage our exposure to currency fluctuations by hedging against exchange rate changes. However, we may not be successful in limiting such exposure, which could materially adversely affect our business, results of operations, financial condition, cash flows or prospects. In addition, our presented results may be impacted because of fluctuations in the U.S. dollar exchange rate versus the euro. We have production facilities in nine different countries, and sell products to, and obtain raw materials from, entities located in these and different regions and countries globally. As a result, a significant portion of our consolidated revenue, costs, assets and liabilities are denominated in currencies other than the euro, in particular, the U.S. dollar, the British pound and the Brazilian real. For the year ended December 31, 2023, 74% of our revenue was from countries with currencies other than the euro. The exchange rates between the currencies which we are exposed to have fluctuated significantly in the past and may continue to do so in the future, which could have a material adverse effect on our results of operations. Volatility in exchange rates could increase the costs of our products that we may not be able to pass on to our customers, impair the purchasing power of our customers in different markets, result in significant competitive benefit to certain of our competitors that incur a material part of their costs in different currencies than we do, hamper our pricing, increase our hedging costs and limit our ability to hedge our exchange rate exposure. Furthermore, we are exposed to currency transaction risks, where changes in exchange rates affect our ability to purchase equipment and raw materials and sell products at profitable prices, reduce the value of our assets and revenues and increase liabilities and costs. We are also exposed to interest rate risk, where fluctuations in interest rates may affect our interest expense on existing debt and the cost of new financing. While we use fixed rate debt and cross currency interest rate swaps to manage this type of risk, sustained increases in interest rates could nevertheless materially adversely affect our business, results of operations, financial condition, cash flows or prospects. See "-Risks Relating to Our Capital Structure-Our substantial debt could adversely affect our financial health and our ability to effectively manage and grow our business" for a further discussion on how increases in interest rates could affect our ability to service our indebtedness. We are also subject to commodity price risk, mainly as a result of fluctuations in the price and availability of raw materials and energy, such as aluminum, natural gas, electricity and diesel. We use derivative agreements to manage some of the material commodity cost risk. Aluminum has historically been subject to significant price volatility, and as aluminum is priced in U.S. dollars, fluctuations in the U.S. dollar/euro rate also affect the euro cost of aluminum. Where we are unable to pass through increases in certain input costs to our customers, we operate hedging programs to manage the price and foreign currency risk on our aluminum purchases, but increased prices for aluminum could affect customer demand. See "-Risks Relating to Our Supply Chain-Our profitability could be adversely affected by the availability and increase in the costs of raw and other input materials, including as a result of changes in tariffs and duties" for more information on the availability and cost of aluminum. We have an active hedging strategy to fix a significant proportion of our energy costs through contractual arrangements directly with our suppliers. Our policy is to purchase natural gas and electricity by entering into forward price-fixing arrangements with suppliers for the majority of our anticipated requirements for the year ahead and for further diminishing portions of our anticipated requirements for subsequent years. Such contracts are used exclusively to obtain delivery of our anticipated energy supplies. We do not trade nor look to profit from such activities. We avail ourselves of the own use exemption and, therefore, these contracts are treated as executory contracts. We typically build up these contractual positions in tranches of approximately 10% of the anticipated volumes. We also occasionally hedge portions of our natural gas, electricity and diesel price risk by entering into derivatives with banks, where it is deemed favorable versus hedging with suppliers. Any natural gas, electricity and diesel that is not purchased under forward fixed price arrangements or hedged with banks is purchased under index tracking contracts or at spot prices. However, there can be no assurance that our strategies will prove effective, given that there are certain circumstances that are beyond our control, such as for example increased market volatility as a result of the ongoing Russia-Ukraine war or political tension in the Middle East. See "-Risks Relating to Economic, Market and Political Matters-Changes to the economic, political, credit, and/or financial environment in which we operate could have a material adverse effect on our business, such as affecting consumer demand for beverage products, which could impact our customers and as a result, reduce the demand for our products" for further details. Our costs could be adversely impacted to the extent we are unable to counteract the effects of the aforementioned risks effectively. For a further discussion of these matters and the measures we have taken to seek to protect our business against these risks, see "Item 5. Operating and Financial Review and Prospects" and "Item 11. Quantitative and Qualitative Disclosures About Market Risk."

We depend on automated systems, including cloud-based service providers, and technology to operate our business, including manufacturing, accounting, telecommunication and information technology systems. There can be no assurance that these systems will not fail or suffer from substantial or repeated disruptions due to various events, some of which are beyond our control, such as natural disasters, power failures, terrorist attacks, equipment or software failures, user errors or computer viruses. Any such disruptions could severely interrupt the operation of our production facilities for an extended period of time, which could have an adverse effect on the supply of our products and result in a material adverse effect on our business, financial condition, results of operations, cash flow or prospects. Increased global cybersecurity threats and more sophisticated and targeted computer crime also pose a potentially significant risk to the security of our systems and networks and the confidentiality, availability and integrity of our data, as well as the confidential data of our employees, customers, suppliers and other third parties that we may hold. As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks, there is also a risk that they may remain undetected for a period of time. We have previously been the target of cyberattacks and expect such attempts to continue. In 2021, AGSA announced that it had experienced a cybersecurity incident, the response to which included temporarily shutting down certain IT systems and applications used by us. There can be no assurance that our cybersecurity program will protect us from such threats and prevent disruptions or breaches to our or our third-party providers' databases or systems that could materially adversely affect our business. See "Item 16K. Cybersecurity" for a further description of our cybersecurity program. In addition, the services under our cybersecurity program are provided by AGSA pursuant to the Services Agreement. There can be no assurance that we will be able to find a replacement provider for such services on comparable terms or at all, if such services are no longer provided under the Services Agreement. See "-Risks Relating to the AMP Transfer-Our ability to operate our business effectively depends largely on certain administrative and other support functions provided to us by AGSA pursuant to the Services Agreement, which may suffer if we are unable to establish our own administrative and other support functions in a cost effective manner following the termination of the Services Agreement" for a further discussion of the Services Agreement. Substantial or repeated systems failures or disruptions, including as a result of not effectively remediating system failures, cybersecurity incidents and other disruptions could result in the unauthorized release of confidential or otherwise protected information, improper use of our systems and networks, defective products, harm to individuals or property, contractual or regulatory actions and fines, penalties and potential liabilities, production downtime and operational disruptions and loss or compromise of important or sensitive data. For example, the loss, disclosure, misappropriation of or access to our employees' or business partners' information or our failure to meet increasing data privacy, security and incident disclosure obligations could result in lost revenue, increased costs, future legal claims or proceedings, including class actions, liability or regulatory actions or penalties, including, for instance, under the EU General Data Protection Regulation or the California Consumer Privacy Act. Any of the aforementioned risks could result in increased costs, lost revenue, reputational harm and decreased competitiveness, which could materially adversely affect our business, financial condition, results of operations, cash flow or prospects, and increased global cybersecurity threats and more sophisticated and targeted computer crime may further increase this risk.