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Financial review

Strong revenue and free cash flow performance in unprecedented times.

Frank Herzog, Chief Financial Officer

“The year was proof of the robustness of our business model and the resilience of our end markets. We continued to invest in the business and are well-positioned to continue delivering shareholder value.”

Frank Herzog

Chief Financial Officer

Financial performance


Increased geographic core revenue diversity

In 2020, geographical diversity supported our 2020 performance. Core revenue increased by 5.5% on a constant currency basis (1.7% as reported), reaching €1,796.4 million (total revenue €1,816.1 million). Growth in 2020 was supported by our broad geographic reach and our role in the supply chain for essential food and beverages.

EMEA, Americas and the acquisition of Visy Cartons in late 2019 were the key contributors to growth in the year. The acquisition of Visy Cartons contributed 260 basis points to the constant currency core revenue growth in 2020.

Core revenue 2020 by segment

Core revenue 2020 by segment (pie chart)

SLEEVE & CLOSURE REVENUE 2020 by end market

Sleeve & closure revenue 2020 by end market (pie chart)

EMEA, with 5.6% growth, benefited from an increase in at-home consumption, as COVID-19 restrictions continued at varying levels in most European countries during the year. The growth in EMEA is underpinned by the ramp-up of new filling lines at our customers’ sites, which are contributing positively to revenue.

Growth in the Americas, 14.7% at constant currency, was primarily driven by the ramp-up of large projects in Brazil, where we placed nine filling lines with two large dairy companies. The ramp-up of these filling lines exceeded our expectations. Revenue in Mexico also increased, with higher at-home consumption of liquid dairy as a result of the COVID-19 pandemic contributing to the growth. These positive impacts were offset by the 32% depreciation of the Brazilian Real against the Euro in 2020.

In APAC, the acquisition of Visy Cartons in November 2019 contributed €44.3 million to the segment constant currency growth of 1.2%, this partly offset headwinds from COVID-19. Revenue in China stagnated in the first half of the year, with lower on-the-go consumption during lockdowns. South East Asian countries continued to face some form of restrictions throughout the second half of 2020, which also affected on-the-go consumption. The impact was amplified by travel and tourism restrictions and by relatively high stock levels as well as weaker local currencies. While APAC was negatively impacted by the pandemic in 2020, the mid- and long-term fundamentals remain intact.

SIG revenue split1

SIG revenue split (illustration)
1 Revenue split based on revenue generated through sale of filler system components and sleeves & closures for 2020.


The Group’s business experiences moderate seasonal fluctuations, primarily due to seasonal consumption patterns and performance incentive programmes relating to sleeves that generally end in the fourth quarter. Customers tend to purchase additional sleeves prior to the end of the year, typically resulting in higher sales during the fourth quarter. Historically, this has resulted in relatively low sales in the first quarter, with inventory returning to normal levels and the settlement of performance incentives that have been accrued over the course of the year. These factors contribute to an increase in working capital levels and lower cash flows from operating activities in the first quarter. While this effect was visible in the first quarter of 2020, sales and stock building in the fourth quarter of 2020 were less pronounced than in prior years.

ADJUSTED EBITDA 2020 by segment

Adjusted EBITDA 2020 by segment (pie chart)

NET CAPEX 2020 by segment

Net capex 2020 by segment (pie chart)

FILLERS 2020 in field (units)

Fillers 2020 in field (pie chart)


Adjusted EBITDA margin1



As of 31 Dec. 2020


As of 31 Dec. 2019
















SIG Group






Adjusted EBITDA divided by revenue from transactions with external customers.

Adjusted EBITDA increased from €485.4 million in 2019 to €498.3 million in 2020. This increase was primarily driven by a top-line contribution of €34.8 million reflecting the factors described above.

Raw material costs had a €20.9 million positive impact on adjusted EBITDA in 2020. As commodity prices weakened in the first half of the year, we benefited from lower spot and hedged prices for both polymers and aluminium, and we were also able to negotiate lower prices with selected suppliers.

While we saw a significant contribution from revenue growth and raw material sourcing, adjusted EBITDA was negatively impacted by an amount of €41.6 million as a result of foreign currency fluctuations in 2020. This negative impact was largely due to the depreciation of the Brazilian Real, and to a lesser extent the Thai Baht, against the Euro.

Increased carton demand in Europe and the continued execution of operational excellence programmes in our production facilities contributed to production efficiency gains of €5.1 million year on year.

SG&A marginally increased by €4.0 million compared to 2019. COVID-19-related restrictions and saving initiatives resulted in lower expenses in areas such as travel, which more than offset investments in growth and higher employee costs. R&D investments as a proportion of revenue were steady at approximately 3%.

Our joint ventures in the Middle East continued to generate strong cash flows, and the dividend in 2020, at €23 million, was slightly above the prior year.

The adjusted EBITDA margin in EMEA was positively impacted by revenue contribution and production efficiencies, as the increase in at-home consumption in Europe increased carton demand. In addition, EMEA benefitted from lower raw material costs as described above. Positive revenue contribution in the Americas and APAC were more than offset by currency headwinds.

Foreign currencies

Whilst our reporting currency is the Euro, we generate a significant portion of our revenue and costs in currencies other than Euro. Increases or decreases in the value of the Euro against other currencies in countries where we operate can affect our results of operations and the value of balance sheet items denominated in foreign currencies. Our strategy is to reduce this exposure through the natural hedging that arises from the localisation of our operations. In addition, we systematically hedge all key currencies against the Euro using a twelve-month rolling layered approach.

In 2020, our results were negatively impacted by foreign currency fluctuations. The continuing depreciation of the Brazilian Real after a particularly large drop in March was the main contributor to this impact.


Net capex as a percentage of total revenue increased from 6.2% in 2019 to 8.0% in 2020. Investments in property, plant and equipment increased, primarily relating to production equipment for the new sleeves manufacturing facility in China. Higher net filler capex reflects a lower proportion of upfront cash due to filler placements in the Americas, where our filling line contracts are usually operating lease contracts with no upfront cash.

We placed 59 filling machines in the field in 2020. Taking account of withdrawals, the number of filling machines globally reached 1,266, a net increase of 33.

Group net capex 2020

Group net capex (horizontal bar chart)

Net income

Net income decreased from €106.9 million in 2019 to €68.0 million in 2020. The reduction in profit in 2020 was mainly due to impairment losses related to the New Zealand paper mill, further described in the section “Other” below, expenses relating to the repayment of term loans in connection with the refinancing transactions in June and negative foreign currency exchange impacts. These negative impacts were offset by the positive operating performance described above, a reduction in the purchase price allocation (“PPA”) depreciation originating from the Onex acquisition in 2015 and lower interest and tax expenses.

Adjusted net income increased from €217.4 million in 2019 to €232.3 million in 2020. This increase was driven by the same operating performance factors described in net income above and lower unadjusted financing expense.

(In € million)





Profit for the period





Non-cash foreign exchange impact of non-functional currency loans and realised foreign exchange impact due to refinancing





Amortisation of transaction costs





Net change in fair value of derivatives





Net effect of early repayment of secured term loans




Onex acquisition PPA depreciation and amortisation





Adjustments to EBITDA:





Replacement of share of profit of joint ventures with cash dividends received from joint ventures





Restructuring costs, net of reversals





Unrealised gain on derivatives





Transaction- and acquisition-related costs





Impairment losses










Tax effect on above items





Adjusted net income





Return on capital employed

Return on capital employed (“ROCE”) is used by management to measure the profitability of the Group and the efficiency with which its capital is employed. Management believes that ROCE is helpful to investors in measuring value creation. ROCE is defined as ROCE EBITA divided by capital employed.

Post-tax ROCE, computed at an unchanged reference tax rate of 30%, increased by 670 basis points in 2020 to 29.5%. At the adjusted effective tax rate of 25.5% in 2020, ROCE reached 31.4%. The increase was primarily attributable to the increase in adjusted EBITDA for reasons described above and the decrease in capital employed as a result of the impairment of production-related assets at our New Zealand paper mill as described in the section “Other” below. Adding back the impairment to our capital employed would result in a decrease in post-tax ROCE of 150 basis points.



Cash flows

We continued in 2020 to generate strong net operating cash inflows of €425.8 million and free cash flow of €233.2 million.

Net cash from operating activities was positively impacted by adjusted EBITDA growth of 2.7%, described above, and net working capital inflows. These positive inflows were offset by refinancing costs of €15.4 million and additional tax payments of approximately €20 million. The additional payments were primarily driven by payments of 2019 tax liabilities in 2020.

Cash conversion


Investing cash flows were negatively impacted by additional capex compared to 2019, as described above. Financing cash flows remained stable compared to 2019, with a positive impact from lower mandatory loan repayments year on year offset by additional lease payments and a higher 2019 dividend that was paid out in 2020.

Net debt

(In € million)


As of 31 Dec. 2020


As of 31 Dec. 2019

Gross total debt1





Cash and cash equivalents2





Net total debt





Total net leverage ratio3






Current and non-current loans and borrowings (including lease liabilities, and with notes and credit facilities at principal amounts).


Includes restricted cash.


Net total debt divided by adjusted EBITDA.

Net leverage in 2020 was positively impacted by strong cash flow generation with €355.1 million cash and cash equivalents at year end and an increased adjusted EBITDA year on year. Offsetting the positive cash impacts were additional capitalisation of lease liabilities of approximately €110 million in 2020, primarily related to our new sleeves manufacturing facility in China and production equipment for closures.




Debt refinancing

In June, the Group refinanced its debt. We replaced two existing secured term loans, maturing in 2023 and 2025, with a new unsecured term loan of €550 million and two issues of senior unsecured notes in the aggregate amount of €1,000 million. We also entered into a new €300 million revolving credit facility. The notes are traded on the Global Exchange Market of Euronext Dublin.



Principal amount


Maturity date


Interest rate

2023 notes


€450 million


June 2023



2025 notes


€550 million


June 2025



Term loan


€550 million


June 2025


Euribor +1.00%1, with a Euribor floor of 0.00%

Revolving credit facility


€300 million


June 2025


Euribor +1.00%1, with a Euribor floor of 0.00%


Subject to increase and decrease depending on net leverage ratio and reaching certain sustainability targets.

The refinancing has enabled us to move from a secured to an unsecured debt structure on investment grade terms and to diversify our sources of debt. With both the term loan and the larger of the two note issues maturing in 2025, we have extended our overall maturity profile at favourable terms. The new interest rates bring down our average cost of debt to 1.6%, assuming a fully drawn-down revolving credit facility and excluding the transaction costs.

Cost of debt


Debt rating



Company rating




As of







June 2020







March 2020



We announced in November our plan to acquire from Obeikan Investment Group (“OIG”) the remaining 50% of the shares in our two joint venture companies in the Middle East. The acquisition will give SIG full control over a business with strong growth prospects in a growing market and expand its global presence. We expect the acquisition to complete before the end of the first quarter of 2021.

The consideration for the shares of the joint ventures will be made up of €167 million in cash and 17.5 million newly issued SIG ordinary shares (to be issued out of authorised share capital). After the transaction, OIG will hold approximately 5% of the issued SIG shares. The acquisition, including the cash consideration, is expected to only marginally impact our Group leverage as our joint ventures held, as of 31 December 2020, approximately €70 million of net debt.

Subject to the completion of the acquisition, Abdallah Obeikan, Chief Executive Officer of OIG and currently Chief Executive Officer of the two joint ventures in the Middle East, will be nominated for election to SIG’s Board of Directors at the next Annual General Meeting in April 2020. Abdelghany Eladib, currently Chief Operating Officer of the joint ventures, will become a member of SIG’s Group Executive Board and take on the role as President and General Manager of Middle East and Africa on completion of the acquisition.

In 2020, the two joint venture companies generated revenue of approximately €266 million (excluding revenue from inter-company transactions between the two joint venture companies) and adjusted EBITDA of approximately €78 million. Post-acquisition, our previously external sales to the joint venture companies will become inter-company sales, and the dividend we received from the joint venture companies will be replaced by fully consolidating the joint ventures’ adjusted EBITDA. SIG will split its current segment EMEA (“Europe, Middle East and Africa”) into two segments: Europe and MEA (“Middle East and Africa”).

New Zealand paper mill

We have been assessing the continued viability and different strategic alternatives for our paper mill in New Zealand (Whakatane). The mill primarily produces liquid paper board for use by SIG entities and our joint ventures in the Middle East. As a consequence of the assessments, we recorded impairment losses of €38.0 million (€33 million net of taxes) on production-related assets. The impairment losses were excluded from our calculation of adjusted EBITDA and adjusted net income.

Subsequent to 31 December 2020, the Board of Directors made the decision to close the paper mill and the Company will enter into the required consultation process with employees. The mill would need significant investment to maintain its viability and the Group will benefit from expanded sourcing opportunities with its existing third-party suppliers of liquid paper board. As a result of the closure decision, management expects to recognise plant decommissioning costs and redundancy costs of around €30 million in the first half of 2021. As assets of the mill are monetised over time, the free cash flow impact of these costs is expected to be reduced to approximately €15 million, of which €10 million would be the cash flow impact in 2021. The benefits of the closure are expected to result in a pay-back period on the cash outflows in line with the Group’s normal standards.


To allow our shareholders to participate in the cash generative nature of our business, we have set a dividend payout target of 50–60% of adjusted net income.

At the Annual General Meeting to be held on 21 April 2021, the Board of Directors will propose a dividend payment for 2020 of CHF 0.42 per share, totalling CHF 134.4 million (equivalent to €124.4 million as per the exchange rate as of 31 December 2020, and excluding any additional shares in circulation as a result of the potential acquisition of the joint ventures in the Middle East), payable out of foreign capital contribution reserves.






1 Dividend reinvested


SIG will continue to focus on profitable growth by expanding its business with existing and new customers and further developing sustainable solutions. In 2021, the Company expects to fully consolidate revenues in the Middle East and Africa from the beginning of March, subject to final completion of the transaction. On a like-for-like basis, the combined business is expected to achieve core revenue growth at constant currency in the lower half of the 4-6% range, taking account of the continuing restrictions in South East Asia affecting on-the-go consumption and the general uncertainty about the continuing global effects of the COVID-19 crisis. This represents an acceleration of the organic growth rate compared with 2020 excluding the effect of consolidating Visy Cartons.

Assuming no major deterioration in exchange rates, the adjusted EBITDA margin, including the consolidation of the Middle East and Africa business, is expected to be in the 27-28% range. Net capital expenditure is forecast to be within the targeted 8-10% of revenue range in 2020.

The Company maintains its medium-term guidance of core revenue growth of 4-6% at constant currency and an adjusted EBITDA margin of around 29%. Net capital expenditure should remain within 8-10% of revenue. The Company plans to maintain a dividend payout ratio of 50–60% of adjusted net income while reducing net leverage towards 2x.

Family eating (photo)

For alternative performance measures and their related reconciliations that are not included in this document, please refer to the following link: