SIG : Q1 2022 Media Release

MEDIA RELEASE

26 April 2022

SIG Group AG ("SIG")

Good start to the year with a solid Q1 performance

First quarter Q1 2022 highlights

• • Revenue at constant currency up 6.0%; reported revenue up 10.1%

• • Implementation of price increases underway: full benefit expected to materialise during the year

• • Adjusted EBITDA margin resilient; returning to normal Q1 levels after exceptional Q1 2021

• • Full year outlook maintained

• • Evergreen Asia and Scholle IPN acquisitions expected to close around mid-year

Revenue performance: Q1 2022

(In € million or %)

Total revenue

Three months ended 31 March 2021

Change Reported currencyConstant currency

496.7

451.3

10.1%

6.0%

Key performance indicators: Q1 2022

(In € million or %)

Three months ended 31 March 2021

Adjusted EBITDA Adjusted EBITDA margin EBITDA

118.7

117.9

23.9%

26.1%

142.6

93.1

Adjusted net income Net income

40.6

52.0

53.1

2.9

Free cash flow

(6.5)

Revenue by region: Q1 2022

The Middle East and Africa (MEA) business has been consolidated since the end of February 2021. As a result, Q1 2022 includes three months' revenue compared with one month's revenue in Q1 2021. The Europe, Middle East and Africa (EMEA) segment relates to the Group's reporting structure prior to acquisition of the MEA business. European revenue is now reported in the segment Europe.

The Whakatane paper mill was divested in June 2021. Until this time revenue from the mill was reported in the Asia Pacific (APAC) segment.

Three	Three
months	months
ended	ended
31 March	31 March	Reported	Constant
(In € million or %)	2022	2021	currency	currency
EMEA1	-	119.3	-	-
Europe1	175.5	60.4	190.9%	191.0%
MEA1	62.7	29.3	114.2%	105.1%
APAC	163.6	157.0	4.2%	(1.2%)
Americas	94.6	82.1	15.2%	5.5%
Group Functions	0.3	3.2
Revenue from 3rd parties	496.7	451.3	10.1%	6.0%

Change

1 Two months' revenue for EMEA in 2021; one month's revenue for Europe and MEA in 2021.

Revenue in Europe on a comparable basis, without the effects of the first-time consolidation of the previous joint venture, increased by 1.0% at constant currency. Performance early in the year was affected by a strong finish to 2021 and by a return to office working, which limited at-home consump-tion. Growth accelerated in March, with a growing contribution from price increases. The placement of new fillers with Hochwald in Germany continued during the quarter, and ramp-up is expected to be completed in the second and third quarters.

Excluding the impact of first-time consolidation, revenue in the MEA grew by 8.8% at constant currency. The business continues to recover from the negative impact of COVID-19 restrictions and is benefiting from the contribution of new filler placements.

In Asia Pacific, revenue increased by 6.5% at constant currency excluding the impact of the Whakatane divestment, with both China and South-East Asia showing robust growth. In China, seasonal consump-tion benefited from a rebound in Chinese New Year activities and the ramp-up of new filler place-ments. This growth is more than offsetting some initial impact of COVID-19 restrictions in March. Else-where in Asia Pacific, the strongest contributions to growth came from Indonesia, Thailand and India which, following SIG's entry four years ago, has become one of our fastest-growing markets.

Growth continued in the Americas after two exceptional years and a very strong Q1 2021. Brazil con-tinued its good performance, helped by the placement of new fillers with existing customers.

EBITDA and adjusted EBITDA

Adjusted EBITDA increased to €118.7 million, representing an adjusted EBITDA margin of 23.9%. This compares with an unusually high margin of 26.1% in Q1 2021, which reflected exceptional top line growth and a positive impact from raw material costs. In Q1 2022, the top line contribution was again strong and included an initial contribution from price increases. This, together with favourable cur-rency movements and the three-month consolidation of the MEA JV, largely offset a negative impact from higher raw material costs. As further price negotiations are concluded with customers, the con-tribution from price increases is expected to grow in the coming quarters.

The increase in EBITDA to €142.6 million was larger than for adjusted EBITDA due to the non-recur-rence of costs related to the closure of the Whakatane mill and to positive unrealised hedging posi-tions.

Net income and adjusted net income

Adjusted net income was €40.6 million compared with €52.0 million in Q1 2021. The decrease was primarily due to the adjusted EBITDA movements offset by incremental depreciation and amortisation.

Net income increased from €2.9 million in Q1 2021 to €53.1 million in Q1 2022, reflecting the positive movements in EBITDA.

Free cash flow

Three	Three
months	months
ended	ended
31 March	31 March
(In € million)	2022	2021
Net cash from operating activities	29.8	57.8
Acquisition of PP&E and intangible assets (net of disposals)	(46.0)	(58.2)
Payment of lease liabilities	(8.6)	(6.1)
Free cash flow	(24.8)	(6.5)

The Group's cash generation is weighted towards the second half of the year due to the seasonality of the business. The fourth quarter has historically been the strongest quarter in terms of free cash flow generation. In the first quarter, cash flow is reduced as the volume rebates accrued in the previous year are paid out.

In Q1 2022, net cash from operating activities was lower due to net working capital movements, including inventory build-up and higher rebate payments driven by strong 2021 performance.

Leverage

As of	As of	As of
31 March	31 Dec.	31 March
(In € million)	2022	2021	2021
Gross debt	1,728.2	1,732.4	1,831.5
Cash and cash equivalents1	272.4	304.5	255.0
Net debt	1,455.8	1,427.9	1,576.5
Net leverage ratio2	2.5x	2.5x	2.7x
1 Includes restricted cash.

2 Net debt divided by LTM adjusted EBITDA. LTM adjusted EBITDA for 2021 includes the LTM adjusted EBITDA of the acquired joint ventures and SIG and deducts the dividend SIG received from the joint ventures in the LTM period.

Leverage was lower compared with 31 March 2021, reflecting strong cash flow generation during the 12-month period.

Announced acquisitions

The Group announced on 5 January 2022 that it has entered into an agreement to acquire Evergreen's fresh carton business in Asia Pacific ("Evergreen Asia"). In the year ended 31 December 2021, Evergreen Asia generated revenue of approximately $160 million1 and adjusted EBITDA of approximately $28 mil-lion1. The acquisition is expected to generate run-rate cost synergies of €6 million. The consideration will be based on an enterprise value of $335 million (subject to customary closing adjustments) on a cash free, debt free basis.

The Group announced on 1 February 2022 that it has entered into an agreement to acquire 100% of Scholle IPN, a privately-held company. Scholle IPN is a leading innovator of sustainable bag-in-box and spouted pouch packaging systems and solutions for food and beverages, with retail, institutional and industrial customers. In the twelve months ended 31 December 2021, Scholle IPN generated revenue of approximately €474 million1 and adjusted EBITDA of approximately €90 million1. The acquisition is expected to generate run-rate cost synergies of €17 million. The consideration will be split into cash of €370 million (subject to customary closing adjustments) and 33.75 million shares to be issued from authorised capital to the current owner of Scholle IPN, Laurens Last.

The preparations for closing both transactions are on track and the acquisitions are expected to be completed around mid-2022.

Dividend

The Annual General Meeting (AGM) held on 7 April 2022 approved a dividend distribution out of the capital contribution reserve of CHF 0.45 per share for the year 2021 (2020: CHF 0.42 per share). The total dividend, paid out on 14 April, was €148 million. The pay-out ratio at 59% was within the targeted range of 50-60% of full year adjusted net income. The Company intends to continue its policy of pro-gressive dividend per share growth following consummation of the acquisitions mentioned above.

1 Unaudited.

Outlook

For the full year, the Company maintains its guidance provided on 1 March 2022. It expects revenue growth of 22-24% at constant currency. The adjusted EBITDA margin for the enlarged group is ex-pected to be around 26%, subject to no further major movements in input costs and foreign exchange rates. The adjusted effective tax rate is expected to be in a range of 26-28%. Net capital expenditure is forecast to be within a range of 7-9% of revenue and the dividend pay-out ratio is expected to be within, or slightly above, a range of 50-60% of adjusted net income.

The group expects its business in Russia and Ukraine to be impacted by the war and the related sanc-tions. In 2021, sales from Russia and Ukraine amounted to less than 2% of group revenue.

The most recent tightening of sanctions is expected to impact the full year growth rate by approxi-mately 100 -150 basis points.

Investor contact:

Ingrid McMahon

[phone]

Director Investor Relations SIG Group AG

Neuhausen am Rheinfall, [e-mail]

Media contact:

Lemongrass CommunicationsAndreas Hildenbrand

[phone]

[e-mail]