MEDIA RELEASE
30.10.2018
SIG Combibloc Group ("SIG")
Solid growth momentum continues
Nine months 2018 highlights
- Core revenue for first nine months up 7% at constant currency, up 4% at actual rates
- Adjusted EBITDA for first nine months up 5% at actual rates: cost efficiencies
- Net total debt reduced by >EUR1 billion post IPO resulting in leverage of 3.2x
| SIG Combibloc Group |
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| In EUR million | 9 months 2018
Pro forma1 | 9 months 2018 | 9 months 2017 | Ytd Change
Actual/CC2 |
| Total Revenue |
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1,173 |
1,166 |
1% / 4% |
| Core Revenue3 |
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1,146 |
1,106 |
4% / 7% |
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| Actual |
| Adj. EBITDA |
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311 |
295 |
5% |
| Adj. EBITDA Margin |
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26% |
25% |
+120bps |
| Adj. Net Income |
140 |
76 |
41 |
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| Gross Total Debt |
1,624 |
2,655 |
2,688 |
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| Cash4 |
132 |
132 |
93 |
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| Net Total Debt |
1,492 |
2,523 |
2,595 |
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| Total Net Leverage Ratio5 |
3.2x |
5.4x |
5.8x |
(0.4x) |
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| | Q3 2018
Pro forma1 | Q3 2018 | Q3 2017 | Ytd Change
Actual/CC2 |
| Total Revenue |
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409 |
410 |
0% / 2% |
| Core Revenue3 |
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403 |
398 |
1% / 4% |
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| Actual |
| Adj. EBITDA |
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113 |
122 |
-8% |
| Adj. EBITDA Margin |
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28% |
30% |
-220bps |
| Adj. Net Income |
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27 |
28 |
-5% |
1 Pro forma taking account of IPO proceeds received on 2 October 2018
2 At constant currency
3 Core revenue represents the revenue to external customers and excludes (i) sales of laminated board ("LB") to the Middle East joint venture and (ii) sales of folding box board ("FBB") to third parties
4 Cash presented before transaction costs and net of restricted cash amounting to EUR4 million as of September 30, 2018; EUR0 million as of September 30, 2017
5 Based on last twelve months ended September 30, 2018 adjusted EBITDA of EUR471 million
Business Performance
First nine months 2018
Core revenue for the first nine months of 2018 was up 7% at constant currency and up 4% at actual rates. Growth was broad-based with a particularly strong performance across the Asia Pacific region. In China, the business is well positioned to meet market trends such as urbanization and convenience, and is seeing strong demand for products with particulates (such as cereals and fruit pieces). The adjusted EBITDA margin for the period increased from 25% to 26%, with the contribution from top line growth more than offsetting higher raw material costs and an adverse impact from currency. In addition, profitability benefited from production efficiencies and lower selling, general & administrative costs following a major product launch in 2017, as well as the relocation of some R&D activities to be closer to the market.
Third quarter 2018
Core revenue in the third quarter of 2018 was up 4% at constant currency and up 1% at actual rates. The difference between actual and constant currency revenue growth was mainly due to the depreciation of the Brazilian Real against the Euro, as was the case for the first nine months. Core revenue growth in the quarter was driven largely by the Asia Pacific region. After a strong first half, performance in the Americas slowed in the third quarter but underlying demand remains strong. Adjusted EBITDA was 8% lower reflecting the impact of currency, resulting in an adjusted EBITDA margin for the quarter of 28% compared with 30% in the third quarter of 2017.
Pro forma net debt and balance sheet
On 28 September SIG announced the pricing of its IPO at CHF11.25 per share and was listed on SIX Swiss Exchange. The proceeds from the sale of new shares in the offering have been used to pay down debt as reflected in pro forma figures for gross and total net debt. Total net leverage at end-September 2018 on a pro forma basis, taking into account the IPO proceeds received on 2 October 2018, was 3.2x compared with 5.4x before receipt of the IPO proceeds. The company plans to reduce net leverage towards 2x in the mid-term while targeting a dividend payout equivalent to 50 - 60% of adjusted net income.
Full year outlook
The company maintains its guidance for the full year 2018 and expects core revenue growth at constant currency of 4 - 6%. The adjusted EBITDA margin is expected to be 28%+.
Rolf Stangl, CEO of SIG, said: "Demand for our products remains strong and is supported by non-discretionary consumer spending and favorable demographics in growth regions. Our diverse geographic footprint and focus on innovation will enable us to sustain a long-term growth trajectory."
Investor contact:
Jennifer Gough +41 52 674 6508
Director Investor Relations
SIG Combibloc Group AG
Neuhausen am Rheinfall, Switzerland
jennifer.gough@sig.biz
Media contacts:
Brunswick Group
Charlie Pretzlik +44 20 7396 7436
cpretzlik@brunswickgroup.com
Sabine Morgenthal +49 69 2400 5517
smorgenthal@brunswickgroup.com
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 5,000-plus employees worldwide enable us to respond quickly and effectively to the needs of our customers in over 60 countries. In 2017, SIG produced approximately 34 billion carton packs and generated EUR1.7 billion in revenue. For more information, visit www.sig.biz.
This press 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. 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" or the "Group"), that may cause SIG's business, strategy or actual results to differ materially from the forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are included without limitations into our offering memorandum for the IPO.
Some financial information in this press 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 press release, we utilize certain non-IFRS financial measures, including adjusted EBITDA, core revenue and adjusted net income that in each case are not recognized under 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. They may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, nor should they be considered as substitutes for the information contained in the financial statements included in this presentation.
EBITDA, a measure used by our management to measure operating performance, is defined as profit (loss) from continuing operations plus income tax, net financial expenses, depreciation of property, plant and equipment and amortization of intangible assets.
Adjusted EBITDA is calculated as EBITDA adjusted for particular items relevant to explaining operating performance. These adjustments include significant items of an unusual nature that cannot be attributed to ordinary business operations, including items such as restructuring and redundancy costs and gains and losses in relation to the valuation of derivatives.
Adjusted Net Income is defined as profit or loss adjusted to exclude certain items of significant or unusual nature, including, but not limited to, the non-cash foreign exchange impact of non-functional currency loans, amortization of transaction costs and original issue discount, the net change in fair value of financing- related derivatives, purchase price allocation depreciation and amortization, adjustments made to reconcile EBITDA to adjusted EBITDA and the estimated tax impact of the foregoing adjustments.
Adjusted EBITDA and adjusted net income are not presentations made in accordance with IFRS, are not measures of financial condition, liquidity or profitability and should not be considered as alternatives to profit (loss) for the period, operating profit or any other performance measures determined or derived in accordance with IFRS or operating cash flows determined in accordance with IFRS.
Additionally, adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not take into account certain items such as interest and principal payments on our indebtedness, working capital needs and tax payments. We believe that the inclusion of adjusted EBITDA and adjusted net income in this presentation is appropriate to provide additional information to investors about our operating performance to provide a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. Because not all companies calculate adjusted EBITDA, core revenue and adjusted net income identically, the presentation of these non-IFRS financial measures may not be comparable to other similarly titled measures in other companies.
SIG GROUP AG 
