2020

05.05.2020 – SIG Combibloc Group AG

SIG Combibloc Group AG: Strong revenue growth and cash generation

SIG Combibloc Group AG / Key word(s): Quarter Results
SIG Combibloc Group AG: Strong revenue growth and cash generation

05-May-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.

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MEDIA RELEASE

5 May 2020
SIG Combibloc Group AG ("SIG")

Strong revenue growth and cash generation

First quarter 2020 highlights

  * Core revenue up 8.4% at constant currency; up 8.3% as reported

  * Adjusted EBITDA margin 21.3% (Q1 2019: 23.6%): underlying improvement
    more than offset by negative currency impact

  * Adjusted net income €12.9 million (Q1 2019: €29.1 million)

  * Free cash flow significantly higher

  * Full year guidance maintained at present in an uncertain environment

Key performance indicators:1 First quarter 2020

                               Three    Three   Change
                               months   months
                               ended    ended
                              31 March 31 March
                                2020     2019
    (In € million or %)       Reported Constant
                              currency currency
    Core revenue                 389.6     359.7    8.3%  8.4%
    Adjusted EBITDA               83.7      85.9  (2.6%)
    Adjusted EBITDA margin       21.3%     23.6%
    Adjusted net income           12.9      29.1
    Free cash flow                16.2    (25.6)
Reported measures: First quarter 2020

                            Three    Three   Change
                            months   months
                            ended    ended
                           31 March 31 March
                             2020     2019
    (In € million or %)    Reported Constant
                           currency currency
    Total revenue             392.9     363.7     8.0%  8.2%
    EBITDA                     67.2      88.3  (23.9%)
    Net income               (25.5)       4.7
   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: [1]https://www.sig.biz/investors/en/performance/key-figures



   1. https://www.sig.biz/investors/en/performance/key-figures
Rolf Stangl, CEO of SIG Combibloc, said: "Like all companies, we have faced
unprecedented challenges due to the Covid-19 crisis. The health and safety
of all employees has been - as ever - our priority throughout this period.
We implemented a pandemic preparedness plan early on to protect our
employees and prevent infections, with a coordinated network of global and
regional task forces. Rigorous precautionary measures included enhanced
hygiene standards, social distancing, strict travel restrictions and a ban
on visitors at our sites. To ensure supply continuity, we built up safety
inventories at all levels, from raw materials through to finished goods. As
a result of the measures taken, all our factories continued production in
the quarter without interruption. This enabled us to continue supporting our
customers in delivering essential food and beverages to consumers. I should
like to express my gratitude to all our employees - and particularly those
working in our production plants - who have made this possible. "


Revenue by region: First quarter 2020

                                 Three months   Three months  Cha-
                                ended 31 March ended 31 March nge
                                     2020           2019
  (In € million or %)              Reported       Constant
                                   currency       currency
  EMEA                                   180.9           175.2  3.3-  3.-
                                                                   %   1%
  APAC                                   136.8           126.9  7.8-  6.-
                                                                   %   2%
  Americas                                68.1            53.4  27.-  34-
                                                                  4%  .2-
                                                                        %
  Group Functions                          3.8             4.2
  Core revenue from                      389.6           359.7  8.3-  8.-
  transactions with external                                       %   4%
  customers
  Revenue from sales of                    3.3             4.0
  folding box board
  Total revenue                          392.9           363.7  8.0-  8.-
                                                                   %   2%
All regions contributed to growth in the first quarter. In EMEA, core
revenue growth at constant currency of 3.1% reflected the ongoing benefit of
new customer wins and filler placements in Europe. March saw an increase in
orders as our customers responded to hoarding by consumers. In addition,
Covid-19 lockdowns in European countries have resulted in higher at-home
consumption.

In APAC, sales in China were stable compared with a very strong Q1 2019. The
prohibition on movement during the Chinese New Year resulted in a
significant loss of the traditional gifting business. However, many
customers stocked up during the quarter in view of uncertainties around
future measures against the spread of Covid-19. In South East Asia sales
were affected by reduced economic activity in markets where lockdowns
occurred. In addition, some customers entered the year with relatively high
stocks. Growth in the APAC region was augmented by the consolidation of Visy
Cartons, acquired in November 2019.

The Americas registered a strong performance with a continuation of the
positive trends from last year, including buoyant sales to dairy customers
in Mexico and the deployment and ramping up of new fillers in Brazil.

EBITDA and adjusted EBITDA

Adjusted EBITDA was slightly lower at €83.7 million reflecting the impact of
the depreciation of key currencies, notably the Brazilian Real and the Thai
Baht, against the Euro. The adjusted EBITDA margin was 21.3% (Q1 2019:
23.6%). Excluding the impact of currency, the adjusted EBITDA margin was
26.2%, reflecting a strong top line contribution and lower raw material
costs. The first quarter has historically been the smallest quarter in terms
of adjusted EBITDA and margin.

EBITDA was €67.2 million compared with €88.3 million in the first quarter of
2019. The decrease includes an unrealised loss on commodity derivatives
which is not included in adjusted EBITDA.

Net income and adjusted net income

Adjusted net income was €12.9 million compared with €29.1 million in the
first quarter of 2019. The decline reflects the impact of currencies on
EBITDA and on intra-group financing costs.

Net income moved from a profit of €4.7 million in the first quarter of 2019
to a loss of €25.5 million in the first quarter of 2020.

Dividend

A dividend of CHF 0.38 per share was paid out of capital contribution
reserves on 16 April 2020, equating to a total distribution of €115 million.

Free cash flow

     (In € million)                                  Three     Three
                                                     months    months
                                                     ended     ended
                                                    31 March  31 March
                                                      2020      2019
     Net cash from operating activities                 73.2        21.2
     Dividends received from joint ventures              2.5         2.1
     Acquisition of PP&E and intangible assets        (56.7)      (47.0)
     Payment of lease liabilities                      (2.8)       (1.9)
     Free cash flow                                     16.2      (25.6)
Free cash flow has historically been negative in the first quarter due to
the seasonality of the business which is weighted towards the second half of
the year. In the first quarter of 2020, free cash flow was positive at €16.2
million due to a significant improvement in net working capital, which more
than offset an increase in net capex due to the construction of a new plant
in China to serve the Asia Pacific region.

Net debt and leverage

     (In € million)                                  As of  As of
                                             31     31
                                            March  Dec.
                                            2020   2019
     Gross total debt                                  1,612    1,614
     Cash and cash equivalents                           263      261
     Net total debt                                    1,349    1,353
     Total net leverage ratio (last twelve              2.8x     2.8x
     months) 1
1 Net total debt divided by adjusted EBITDA

Full year outlook

At present it is not possible to reliably predict the effects of the Covid
19 crisis or currency movements for the remainder of the year. However, the
Company remains confident in its ability to grow and to generate substantial
free cash flow. Following a very strong first quarter, the second quarter is
likely to be weak. This is primarily due to the consumption of stocks in
Asia and to continuing lockdowns in many countries affecting on the go
consumption. However, on the assumption that consumption will revert to more
normal levels in the second half of the year, the Company regards its full
year guidance of constant currency growth at the lower end of a 6 to 8%
range as achievable. Assuming more normal consumption in the second half and
subject to currency movements, guidance of an adjusted EBITDA margin at the
lower end of the 27-28% range is also maintained.

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 5,500 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. 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 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 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.

n 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 or loss to EBITDA and adjusted EBITDA.

   (In € million)                                       Three months  Three months
                                                          ended 31      ended 31
                                                         March 2020    March 2019
   Profit / (loss) for the period                           (25.5)             4.7
   Net finance expense                                          19.7             9.0
   Income tax expense                                            1.9             3.7
   Depreciation and amortization                                71.1            70.9
   EBITDA                                                       67.2            88.3
   Adjustments to EBITDA:
   Replacement of share of profit or loss                        (0.9)             1.1
   of joint ventures with cash dividends
   received from joint ventures
   Restructuring costs, net of reversals                         0.3             0.9
   Unrealised (gain) / loss on derivatives                      15.3           (5.2)
   Transactionand acquisition-related                            0.8             0.7
   costs
   Other                                                         1.0             0.1
   Adjusted EBITDA                                              83.7            85.9


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

   (In € million)                                         Three       Three
                                                          months      months
                                                         ended 31    ended 31
                                                        March 2020  March 2019
   Profit / (loss) for the period                         (25.5)           4.7
   Non-cash foreign exchange impact of                             -         (3.6)
   non-functional currency loans and
   realised foreign exchange impact due to
   refinancing
   Amortisation of transaction costs                           0.7           0.7
   Net change in fair value of derivatives                   (1.0)           1.4
   PPA depreciation and amortization                          33.5          35.2
   Adjustments to EBITDA (1)                                  16.5         (2.4)
   Tax effect on above items                                (11.3)         (6.9)
   Adjusted net income                                      12.9          29.1
   1 The adjustments made to EBITDA are
   detailed in the "EBITDA and adjusted
   EBITDA" table above.


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