SIG Combibloc Group AG

  • WKN: A2N5NU
  • ISIN: CH0435377954
  • Land: Switzerland

Nachricht vom 30.07.2019 | 06:57

SIG Combibloc Group AG: Strong performance in growth markets

EQS Group-News: SIG Combibloc Group AG / Key word(s): Half Year Results

30.07.2019 / 06:57


MEDIA RELEASE

30 July 2019
SIG Combibloc Group ("SIG")

Strong performance in growth markets

First half year 2019 highlights

  • Core revenue up 6.9% as reported: up 5.1% at constant exchange rates
  • Adjusted EBITDA up 3.9%; adjusted EBITDA margin 25.6% (H1 2018: 25.9%)
  • Significant increase in adjusted net income to EUR80.5 million (H1 2018: EUR48.4 million) reflecting higher profits from operating activities and lower financing costs post-IPO
  • Full year guidance unchanged
  • Expansion of demand in APAC: new plant to be constructed in China

Key performance indicators:1 H1 2019

    Six
months
ended
30 June
2019
Six
months
ended
30 June
2018
Change

(In EUR million or %)
  Reported currency Constant currency
           
Core revenue2   794.5 743.5 6.9% 5.1%
Adjusted EBITDA   205.5 197.8 3.9%  
Adjusted EBITDA margin3   25.6% 25.9%    
Adjusted EBITDA less net capex margin   18.0% 14.4%    
Adjusted net income   80.5 48.4    
Free cash flow   36.8 2.0    
Cash conversion   70% 55%    
 

Reported Measures:1 H1 2019

    Six
months
ended
30 June
2019
Six
months
ended
30 June
2018
Change

(In EUR million or %)
  Reported currency Constant currency
           
Total revenue   802.2 763.4 5.1% 3.4%
EBITDA   202.0 173.4 16.5%  
Net income   25.2 (47.6)    

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 SIG 2019 Interim Report.
2 Core revenue represents revenue to external customers and excludes sales of folding box board to third parties.
3 Adjusted EBITDA as a percentage of total revenue.
 

Key performance indicators1: Q2 2019

    Three
months
ended
30 June
2019
Three
months
ended
30 June
2018
Change

(In EUR million or %)
  Reported currency Constant currency
           
Core revenue2   434.8 408.3 6.5% 4.9%
Adjusted EBITDA   119.6 112.3 6.4%  
Adjusted EBITDA margin3   27.3% 27.0%    
Adjusted net income   51.4 44.4    
 

Reported measures1: Q2 2019

    Three
months
ended
30 June
2019
Three
months
ended
30 June
2018
Change

(In EUR million or %)
  Reported currency Constant currency
           
Total revenue   438.5 416.7 5.2% 3.7%
EBITDA   113.7 99.9 13.8%  
Net income   20.5 (15.5)    
 
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 SIG 2019 Interim Report.
2 Core revenue represents revenue to external customers and excludes sales of folding box board to third parties.
3 Adjusted EBITDA as a percentage of total revenue.
 

Rolf Stangl, CEO of SIG, said: "In the first half of 2019, we saw good top line growth driven in particular by the growth markets in Asia Pacific and the Americas, which have been the focus of our investment in recent years. Core revenue growth at constant currency of 5.1% is within our target range for the full year of 4-6%. Profitability improved in the second quarter and the H1 adjusted EBITDA margin was only slightly below the H1 2018 level, despite a reduction in the dividend from our Middle East joint venture.

Growth in Asia Pacific has been driven by robust demand for liquid dairy products, augmented in many South East Asian countries by consumption of non-carbonated soft drinks. In order to meet growing demand for our packs we will construct a new plant at the Suzhou Industrial Park in China, close to our existing facilities. The investment will be partly lease-financed and does not change our guidance for net capital expenditure. Following on from the opening of our new SIG Tech Centre in Suzhou in Q4 2018, the new plant will further expand our footprint and our ability to win share in Asia Pacific, the world's largest growth region for aseptic carton packaging."

 

Revenue by region: H1 2019

    Six
months
ended
30 June
2019
Six
months
ended
30 June
2018
Change

(In EUR million or %)
  Reported currency Constant currency
EMEA   358.2 356.6 0.4% 0.3%
APAC   284.1 254.0 11.9% 7.7%
Americas   144.5 128.8 12.1% 10.7%
Group Functions   7.7 4.1    
Core revenue from transactions with external customers 794.5 743.5 6.9% 5.1%
Revenue from sales of folding box board   7.7 19.9    
Total revenue   802.2 763.4 5.1% 3.4%
 

Growth momentum was sustained in the second quarter of 2019 and for the first half core revenue increased by 5.1% at constant currency, within the target range for the full year of 4 - 6%. This progression reflects a continuing strong performance in growth markets, including both APAC and the Americas. Sales in EMEA were slightly higher at constant exchange rates.

Revenue by region: Q2 2019

    Three
months
ended
30 June
2019
Three
months
ended
30 June
2018
Change

(In EUR million or %)
  Reported currency Constant currency
EMEA   183.0 182.3 0.4% 0.2%
APAC   157.2 145.0 8.4% 5.1%
Americas   91.1 79.4 14.5% 13.3%
Group Functions   3.5 1.6    
Core revenue from transactions with external customers 434.8 408.3 6.5% 4.9%
Revenue from sales of folding box board   3.7 8.4    
Total revenue   438.5 416.7 5.2% 3.7%
 

EBITDA and adjusted EBITDA

    Six months
ended
30 June 2019
Six months
ended
30 June 2018
 

(In EUR million or %)
  Adjusted EBITDA margin1 Adjusted EBITDA Adjusted EBITDA margin1 Adjusted EBITDA Reported currency change
EMEA   29.9% 107.2 32.8% 116.8 (8.3%)
APAC   31.5% 92.0 28.5% 78.0 18.0%
Americas   24.8% 35.8 25.3% 32.6 9.9%
Group Functions     (29.5)   (29.6)  
Total   25.6% 205.5 25.9% 197.8 3.9%
1 Adjusted EBITDA divided by revenue from transactions with external customers.
 

Adjusted EBITDA increased by 3.9% to EUR205.5 million despite the impact from the Middle East joint venture dividend, which was EUR4m lower than in H1 2018. The adjusted EBITDA margin was 25.6% (H1 2018: 25.9%), Revenue growth and currencies made a positive contribution to EBITDA, offsetting higher SG&A costs which include investments in growth markets and additional costs as a result of being a listed company.

EBITDA increased by 16.5% to EUR202.0 million. The increase compared with adjusted EBITDA was largely due to an unrealised gain on derivatives, compared with a loss in H1 2018, and to lower transaction-related costs.

Net income and adjusted net income

Adjusted net income increased to EUR80.5 million compared with EUR48.4 million in H1 2018. The increase reflected an improvement in net income, which moved from a loss of EUR47.6 million in H1 2018 to a profit of EUR25.2 million in H1 2019. The improvement is a consequence of higher profit from operating activities and lower net finance expense following the reduction and re-financing of debt in connection with the IPO.[1]

[1] The positive impact of lower net finance expense on adjusted net income has been highlighted with the publication of pro forma adjusted net income on 26 February 2019 (Annual Report p. 20 and Full Year Results Media Release) and in the Q1 2019 Trading Statement.

Capital expenditure

Gross capital expenditure was EUR86.7 million in H1 2019 (H1 2018: EUR112.9 million). Net capital expenditure (net capex), after deduction of upfront cash for fillers received from customers, was EUR61.2 million compared with EUR88.1 million in H1 2018.

Capacity expansion

In the light of strong demand in Asia Pacific, SIG has decided to expand its production network in the region with the construction of a new plant located at the Suzhou Industrial Park in China. The plant will benefit from operational and overhead synergies with SIG's existing factory in Suzhou and is expected to achieve world class environmental and safety performance and productivity. A total investment of EUR180 million will be partly lease-financed with a Chinese partner. The project will benefit from government subsidies. Guidance for net capex of 8-10% of revenue in 2019 and over the mid-term is unchanged. The plant is expected to come onstream early in 2021.

Free cash flow

(In EUR million)   Six
months
ended
30 June
2019
Six
months
ended
30 June
2018
Net cash from operating activities   120.8 105.1
Dividends received from joint ventures   6.7 10.7
Acquisition of PP&E and intangible assets   (86.7) (112.9)
Payment of lease liabilities   (4.0) (0.9)
Free cash flow   36.8 2.0
 

Free cash flow increased from EUR2.0 million in H1 2018 to EUR36.8 million in H1 2019, reflecting higher profits from operating activities, lower financing costs and lower capital expenditure, partially offset by higher working capital.

The Company generates most of its free cash flow in the second half of the year due to business seasonality.

Net debt and leverage

(In EUR million)   As of As of
  30 June 31 Dec.
  2019 2018
Gross total debt   1,621.7 1,618.7
Cash and cash equivalents1   78.6 157.1
Net total debt   1,543.1 1,461.6
Total net leverage ratio (last twelve months)   3.3x 3.2x
 

1 Includes restricted cash

Cash and cash equivalents were lower at 30 June 2019 compared with 31 December 2018 owing to the payment of the dividend in April 2019 for a total amount of EUR99 million. This has resulted in a slight increase in leverage at 30 June 2019 which is expected to reverse in the second half with the higher level of cash generation.

Full year outlook

Full year 2019 guidance of core revenue growth of 4 - 6% at constant currency and an adjusted EBITDA margin of 27 - 28% is unchanged.

Investor contact:

Jennifer Gough +41 52 674 6508
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.

Founded 1853, SIG is headquartered in Neuhausen, Switzerland. The skills and experience of our approximately 5,000 employees worldwide enable us to respond quickly and effectively to the needs of our customers in over 60 countries. In 2018, SIG produced more than 35 billion carton packs and generated EUR1.7 billion in revenue. 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 may contain "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 memorandum for the IPO. 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 interim 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 presentation may vary slightly from the exact arithmetic aggregation of the figures that precede them.

The attached information is not an offer to sell or a solicitation of an offer to purchase any security in the United States or elsewhere and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which, or to any person to whom such an offer, solicitation or sale would be unlawful. No securities may be offered or sold within the United States or to U.S. persons absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from any issuer of such securities and that will contain detailed information about us.

In this media release, we utilise certain alternative performance measures, including core revenue, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA margin less net capex margin, net capex, adjusted net income, free cash flow, cash conversion 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. Refer to the section "Financial review" and the consolidated interim financial statements in the 2019 Interim Report for SIG's definitions of the above alternative performance measures not defined in IFRS and reconciliations to measures defined in IFRS.

[1] The positive impact of lower net finance expense on adjusted net income has been highlighted with the publication of pro forma adjusted net income on 26 February 2019 (Annual Report p. 20 and Full Year Results Media Release) and in the Q1 2019 Trading Statement.


Additional features:

Document: http://n.eqs.com/c/fncls.ssp?u=SRDGUFEHIY
Document title: SIG HYR 2019


End of Corporate News



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