SIG Combibloc Group AG / Key word(s): 9 Month figures
27 October 2020
Broad geographic presence supporting growth
Third quarter 2020 highlights
Key performance indicators:1 Q3 2020
Reported measures: Q3 2020
Key performance indicators:1 Nine months 2020
Reported measures: Nine months 2020
Revenue by region: Q3 2020
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
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
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.
1 Includes restricted cash
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.
Further lockdowns and other measures to contain COVID-19 remain a source of uncertainty.
Jennifer Gough +41 52 543 1229
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.
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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.
The table below is a summary of the reconciliation of profit for the period to adjusted net income.
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SIG Combibloc Group AG
8212 Neuhausen am Rheinfall
+41 52 674 61 11
+41 52 674 65 56
SIX Swiss Exchange
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