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SIG COMBIBLOC GROUP AG EQS-Adhoc: SIG Combibloc Group AG: Broad geographic presence supporting growth

Transparency directive : regulatory news

27/10/2020 07:00

EQS Group-Ad-hoc: SIG Combibloc Group AG / Key word(s): 9 Month figures
SIG Combibloc Group AG: Broad geographic presence supporting growth

27-Oct-2020 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.


MEDIA RELEASE

27 October 2020
SIG Combibloc Group AG ("SIG")

Broad geographic presence supporting growth

Third quarter 2020 highlights

  • Core revenue up 4.5% at constant currency
  • New customers drive growth in the Americas; continuing growth in EMEA
  • Adjusted EBITDA margin 30.2% (Q3 2019: 27.7%): strong operating performance more than offset negative currency impact
  • Adjusted net income increased to €77.4 million (Q3 2019: €53.8 million)
  • Strong free cash flow generation
  • Full year guidance maintained

 

Key performance indicators:1 Q3 2020

    Three
months
ended
30 Sept.
2020
Three
months
ended
30 Sept.
2019
Change

(In € million or %)
  Reported currency Constant currency
Core revenue   438.6 441.1 (0.6%) 4.5%
Adjusted EBITDA   133.6 123.8 7.9%  
Adjusted EBITDA margin   30.2% 27.7%    
Adjusted net income   77.4 53.8    
Free cash flow   96.4 77.8    
 

Reported measures: Q3 2020

    Three
months
ended
30 Sept.
2020
Three
months
ended
30 Sept.
2019
Change

(In € million or %)
  Reported currency Constant currency
Total revenue   441.9 446.5 (1.0%) 4.0%
EBITDA   137.1 119.6 14.6%  
Net income   46.2 26.5    
 
1 For additional information about alternative performance measures used by management that are not defined in IFRS, including definitions and reconciliations to measures defined in IFRS, refer to the link below: https://www.sig.biz/investors/en/performance/key-figures
 
 

Key performance indicators:1 Nine months 2020

    Nine months
ended
30 Sept.
2020
Nine months
ended
30 Sept.
2019
Change

(In € million or %)
  Reported currency Constant currency
Core revenue   1,288.3 1,235.6 4.3% 7.2%
Adjusted EBITDA   349.3 329.3 6.1%  
Adjusted EBITDA margin   26.8% 26.4%    
Adjusted net income   157.0 134.3    
Free cash flow   124.5 114.6    
 

Reported measures: Nine months 2020

    Nine months
ended
30 Sept.
2020
Nine months
ended
30 Sept.
2019
Change

(In € million or %)      
  Reported currency Constant currency
Total revenue    1,301.9 1,248.7 4.3% 7.2%
EBITDA   351.0 321.6 9.1%  
Net income   56.2 51.7    
 
1 For additional information about alternative performance measures used by management that are not defined in IFRS, including definitions and reconciliations to measures defined in IFRS, refer to the link below: https://www.sig.biz/investors/en/performance/key-figures
 
 

Revenue by region: Q3 2020

    Three
months
ended
30 Sept.
2020
Three
months
ended
30 Sept.
2019
Change

(In € million or %)
  Reported currency Constant currency
EMEA   194.4 189.6 2.6% 2.5%
APAC   160.3 171.4 (6.5%) (2.0%)
Americas   78.8 77.1 2.0% 24.1%
Group Functions   5.1 3.0    
Core revenue from transactions with external customers 438.6 441.1 (0.6%) 4.5%
Revenue from sales of folding box board   3.3 5.4    
Total revenue   441.9 446.5 (1.0%) 4.0%
 

Core revenue growth in the third quarter was driven by EMEA and the Americas. In Europe, high stocks across the supply chain that had built up during the second quarter were depleted during July and August, which had some impact on orders for SIG. However, in September, there was an increase in demand for cartons as customers continued to produce at a relatively high level and required new stock.

In Asia Pacific there were signs of improvement in China, while South-East Asia continued to be affected by pandemic-related restrictions in some areas and by the dampening effects of the COVID-19 crisis on out-of-home consumption.

The largest regional growth driver in the quarter was the Americas, where there was an increase in at-home consumption in both Brazil and Mexico. In addition, the ramping up of fillers placed with new customers in Brazil made a significant contribution to growth. Reported sales growth in the Americas has been affected by the depreciation of the Brazilian Real against the Euro.

Revenue by region: Nine months 2020

    Nine months ended
30 Sept.
2020
Nine months ended
30 Sept.
2019
Change

(In € million or %)
  Reported currency Constant currency
EMEA   581.0 547.8 6.1% 5.9%
APAC   465.7 455.5 2.3% 3.7%
Americas   230.1 221.6 3.8% 18.9%
Group Functions   11.5 10.7    
Core revenue from transactions with external customers 1,288.3 1,235.6 4.3% 7.2%
Revenue from sales of folding box board   13.6 13.1    
Total revenue   1,301.9 1,248.7 4.3% 7.2%
 

EBITDA and adjusted EBITDA

Adjusted EBITDA in the third quarter of 2020 increased to €133.6 million from €123.8 million in Q3 2019, despite a negative impact from the depreciation of key currencies against the Euro. The adjusted EBITDA margin increased to 30.2% from 27.7%, reflecting top line growth, production efficiencies and lower raw material costs. In addition, SG&A costs were below the previous year's level.

As a consequence of the strong third quarter performance, the adjusted EBITDA margin for the first nine months was slightly higher at 26.8% (26.4% for the first nine months of 2019).

EBITDA was €137.1 million compared with €119.6 million in Q3 2019, reflecting the factors described above.

Net income and adjusted net income

Adjusted net income for the first nine months of 2020 increased to €157.0 million from €134.3 million in the first nine months of 2019. In addition to the strong operating performance, adjusted net income benefited from a lower adjusted effective tax rate (24.1% compared with 28.3% for the first nine months of 2019).

Net income was €56.2 million compared with €51.7 million in the first nine months of 2019. The increase was less than for adjusted net income as a result of non-cash financing costs and unrealised currency effects on inter-company loans.

Free cash flow

(In € million)   Nine months
ended
30 Sept.
2020
Nine months
ended
30 Sept.
2019
Net cash from operating activities   262.2 242.2
Dividends received from joint ventures   12.2 11.8
Acquisition of PP&E and intangible assets   (139.6) (132.8)
Payment of lease liabilities   (10.3) (6.6)
Free cash flow   124.5 114.6
 

With cash flow generation concentrated in the second half of the year, the third quarter of 2020 saw a significant increase compared with Q3 2019. For the first nine months, free cash flow was above the level for the same period of 2019 despite higher capital expenditure relating to the construction of a new plant in China.

Leverage

(In € million)   As of As of
  30 Sept. 31 Dec.
  2020 2019
Gross total debt   1,624.4 1,614.4
Cash and cash equivalents1   249.2 261.0
Net total debt   1,375.2 1,353.4
Total net leverage ratio(last twelve months)2   2.7x 2.8x
1 Includes restricted cash
2 Net total debt divided by adjusted EBITDA


Full year outlook

The Company remains cautious on the outlook for the fourth quarter following the strong performances in the Americas and in Europe for the first nine months. The year-end rally is likely to be more subdued than usual and in Europe performance will be measured against a strong fourth quarter in 2019. At group level, fourth quarter sales at constant exchange rates are expected to be broadly flat compared with the fourth quarter of 2019. For the full year, guidance of core revenue growth at constant currency within the 4-6% range is maintained.

Guidance of an adjusted EBITDA margin in 2020 at the lower end of the 27-28% range is also maintained, subject to no further major deterioration in currencies. The Company expects to generate substantial free cash flow.

Further lockdowns and other measures to contain COVID-19 remain a source of uncertainty.

 

Investor contact:

Jennifer Gough +41 52 543 1229
Director Investor Relations
SIG Combibloc Group AG
Neuhausen am Rheinfall, Switzerland
jennifer.gough@sig.biz

Media contact:

Lemongrass Communications
Andreas Hildenbrand +41 44 202 5238
andreas.hildenbrand@lemongrass.agency

About SIG
SIG is a leading systems and solutions provider for aseptic carton packaging. We work in partnership with our customers to bring food and beverage products to consumers around the world in a safe, sustainable and affordable way. Our unique technology and outstanding innovation capacity enable us to provide our customers with end-to-end solutions for differentiated products, smarter factories and connected packs, all to address the ever-changing needs of consumers. Sustainability is integral to our business and we are going Way Beyond Good to create a net positive food packaging system.

Founded in 1853, SIG is headquartered in Neuhausen, Switzerland. The skills and experience of our approximately 5,500 employees worldwide enable us to respond quickly and effectively to the needs of our customers in over 60 countries. In 2019, SIG produced 38 billion carton packs and generated €1.8 billion in revenue. SIG has an AA ESG rating by MSCI, an 18.8 (low risk) score by Sustainalytics and a Platinum CSR rating by EcoVadis. For more information, visit www.sig.biz.

Disclaimer & cautionary statement

The information contained in this media release and in any link to our website indicated herein is not for use within any country or jurisdiction or by any persons where such use would constitute a violation of law. If this applies to you, you are not authorised to access or use any such information.

This media release contains "forward-looking statements" that are based on our current expectations, assumptions, estimates and projections about us and our industry. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "may", "will", "should", "continue", "believe", "anticipate", "expect", "estimate", "intend", "project", "plan", "will likely continue", "will likely result", or words or phrases with similar meaning. Undue reliance should not be placed on such statements because, by their nature, forward-looking statements involve risks and uncertainties, including, without limitation, economic, competitive, governmental and technological factors outside of the control of SIG Combibloc Group AG ("SIG", the "Company" or the "Group"), that may cause SIG's business, strategy or actual results to differ materially from the forward-looking statements (or from past results). For any factors that could cause actual results to differ materially from the forward-looking statements contained in this media release, please see our offering circular for the issue of notes in June 2020. SIG undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. It should further be noted that past performance is not a guide to future performance. Please also note that quarterly results are not necessarily indicative of the full-year results. Persons requiring advice should consult an independent adviser.

Some financial information in this media release has been rounded and, as a result, the figures shown as totals in this media release may vary slightly from the exact arithmetic aggregation of the figures that precede them.

In this media release, we utilise certain alternative performance measures, including but not limited to core revenue, EBITDA, adjusted EBITDA, adjusted EBITDA margin, net capex, adjusted net income, free cash flow and net leverage ratio that in each case are not defined in International Financial Reporting Standards ("IFRS"). These measures are presented as we believe that they and similar measures are widely used in the markets in which we operate as a means of evaluating a company's operating performance and financing structure. Our definition of and method of calculating the alternative performance measures stated above may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, are not measures of financial condition, liquidity or profitability and should not be considered as an alternative to profit from operations for the period or operating cash flows determined in accordance with IFRS, nor should they be considered as substitutes for the information contained in our consolidated financial statements. You are cautioned not to place undue reliance on any alternative performance measures and ratios not defined in IFRS included in this media release. For definitions of alternative performance measures and their related reconciliations that are not included in this media release, please refer to the following link www.sig.biz/investors/en/performance/key-figures

 

The following table reconciles profit to EBITDA and adjusted EBITDA.

(In € million)       Nine months ended
30 Sept.
2020
Nine months ended
30 Sept.
2019
Profit for the period       56.2 51.7
Net finance expense       70.3 27.4
Income tax expense       15.8 28.3
Depreciation and amortisation       208.7 214.2
EBITDA   351.0 321.6
Adjustments to EBITDA:          
Replacement of share of profit of joint ventures with
cash dividends received from joint ventures
  0.5 3.2
Restructuring costs, net of reversals       3.8 1.3
Unrealised gain on derivatives       (9.2) (1.3)
Transaction- and acquisition-related costs       1.2 2.7
Other       2.0 1.8
Adjusted EBITDA   349.3 329.3
 

The table below is a summary of the reconciliation of profit for the period to adjusted net income.

(In € million)     Nine months ended
30 Sept.
2020
Nine months ended
30 Sept.
2019
Profit for the period       56.2 51.7
Non-cash foreign exchange impact of non-functional currency loans
and realised foreign exchange impact due to refinancing
  20.2 (7.0)
Amortisation of transaction costs       2.2 2.1
Net change in fair value of derivatives       (0.5) 1.7
Net effect of early repayment of term loans       19.7 -
PPA depreciation and amortisation       94.9 102.7
Adjustments to EBITDA (1)       (1.7) 7.7
Tax effect on above items       (34.0) (24.6)
Adjusted net income       157.0 134.3
1 The adjustments made to EBITDA are detailed in the "EBITDA and adjusted EBITDA" table above.
 
 

 


Additional features:


File: SIG Q3 2020

End of ad hoc announcement
Language: English
Company: SIG Combibloc Group AG
Laufengasse 18
8212 Neuhausen am Rheinfall
Switzerland
Phone: +41 52 674 61 11
Fax: +41 52 674 65 56
E-mail: info@sig.biz
Internet: www.sig.biz
ISIN: CH0435377954
Listed: SIX Swiss Exchange
EQS News ID: 1143171

 
End of Announcement EQS Group News Service

1143171  27-Oct-2020 CET/CEST

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