The Group has three operating segments, which are also the reportable segments: Europe, Middle East and Africa (“EMEA”), Asia Pacific (“APAC”) and Americas. All segments provide aseptic carton packaging solutions.

Overview of segments and Group Functions

The following section provides an overview of the Group’s three segments (EMEA, APAC and Americas) as well as the activities not forming part of any of the segments (Group Functions).

EMEA includes sleeves manufacturing as well as production of closures for the Group’s customers in Europe. EMEA also supplies Americas and APAC with sleeves and, to a lesser extent, closures. EMEA further includes the result from the sale of supply from the Group’s European manufacturing entities to the Group’s joint ventures in the Middle East. The Group’s central procurement activities are part of EMEA with the European sleeves manufacturing and closures production entities being the main internal customers. The Group’s joint ventures in the Middle East contribute to the performance of EMEA through dividend payments and royalty payments related to the use of SIG technical solutions and sleeves sales in the Middle East.

APAC includes sleeves manufacturing for the Group’s customers in China, South East Asia and Oceania. The China-based filling machine assembly facility is also included in APAC, as is the production of liquid paper board and folding box board in New Zealand. The liquid paper board produced in New Zealand is mainly used by the sleeves manufacturing facilities in Asia and the joint ventures in the Middle East.

Americas covers the Group’s customers in North and South America. North America is primarily supplied by sleeves from the European and Asian sleeves manufacturing facilities. South America has its own sleeves manufacturing facility.

The Group Functions include activities that are supportive to the Group’s business, such as the global filling machine assembly, global technology (including R&D), information technology, marketing, finance, legal, human resources and other support functions. The Group Functions are involved in transactions with third parties only in relation to the Group’s joint ventures, of which the majority relate to the sale of filling machines. Global filling machine assembly also sells filling machines and spare parts, and provides assembly-related services, to all three of the segments.

Inter-company transactions between the segments, and between the segments and the Group Functions, are eliminated in consolidation. They mainly relate to the sale of filling machines, sleeves and closures. Pricing is determined on a cost-plus basis.

Information about the Group’s segments is reported to the chief operating decision maker (”CODM”) on a regular basis for the purposes of resource allocation and assessment of performance of the segments. The performance of the segments is assessed by the CODM primarily on the basis of adjusted EBITDA (as defined in the section below).

Segment financial information

The following tables present financial information about the Group’s segments. Group Functions include activities that are supportive to the Group’s business. The same measurement basis is used when presenting the segment information as is used in the Group’s consolidated financial statements.

 

 

Year ended 31 December 2019

(In € million)

 

EMEA

 

APAC

 

Americas

 

Total segments

 

Group Functions

 

Reconciling items

 

Total

(1)

Core revenue from transactions with external customers represents revenue from external customers, excluding revenue from sales of folding box board to third parties. Core revenue is not a defined performance measure in IFRS (see further note 9).

(2)

The performance of the segments is presented with reference to adjusted EBITDA. Adjusted EBITDA is defined by the Group as EBITDA, adjusted to exclude certain non-cash transactions and items of a significant or unusual nature and to include the cash impact of dividends received from joint ventures. EBITDA and adjusted EBITDA are not defined performances measures in IFRS. Refer to note 9 for the detailed definitions of these performance measures and the reconciliation between the Group’s profit or loss, EBITDA and adjusted EBITDA.
See note 5.2 for the impact on adjusted EBITDA of the adoption of IFRS 16 Leases on 1 January 2019.

(3)

The Group’s capital expenditure mainly relates to investments in its own production, plant and equipment (PP&E capital expenditure, excluding filling machines) and to the manufacture and deployment of filling machines with customers (filling machine capital expenditure).
Net capital expenditure is defined by the Group as capital expenditure less upfront cash. Upfront cash is defined as consideration received as an upfront payment for filling machines from customers. Capital expenditure relating to filling machines is presented net of this upfront payment in the table above. Net capital expenditure is not a defined performance measure in IFRS. Refer to note 11 for the reconciliation between capital expenditure and net capital expenditure.

(4)

Group Functions may report positive net filling machine capital expenditure if the capital expenditure of the global filling machine assembly during a period is smaller than the payments it received under intra-group sales of filling machines. This could also happen occasionally in the case of PP&E capital expenditure, excluding filling machines.

Revenue from transactions with external customers

 

755.1

 

683.8

 

329.5

 

1,768.4

 

15.5

 

 

1,783.9

Revenue from inter-segment transactions

 

237.7

 

12.7

 

 

250.4

 

40.6

 

(291.0)

 

Segment revenue

 

992.8

 

696.5

 

329.5

 

2,018.8

 

56.1

 

(291.0)

 

1,783.9

Core revenue from transactions with external customers (1)

 

755.1

 

666.8

 

329.5

 

1,751.4

 

15.5

 

 

1,766.9

Adjusted EBITDA (2)

 

242.2

 

228.9

 

84.1

 

555.2

 

(69.8)

 

 

485.4

Capital expenditure: (3)

 

(62.1)

 

(86.1)

 

(40.9)

 

(189.1)

 

6.9

 

 

(182.2)

PP&E (excl. filling machines) (3) (4)

 

(16.0)

 

(34.1)

 

(3.4)

 

(53.5)

 

(4.8)

 

 

(58.3)

Net filling machines (3) (4)

 

(14.2)

 

(14.7)

 

(34.9)

 

(63.8)

 

11.7

 

 

(52.1)

Net capital expenditure (3)

 

(30.2)

 

(48.8)

 

(38.3)

 

(117.3)

 

6.9

 

 

(110.4)

 

 

Year ended 31 December 2018

(In € million)

 

EMEA

 

APAC

 

Americas

 

Total segments

 

Group Functions

 

Reconciling items

 

Total

(1)

Core revenue from transactions with external customers represents revenue from external customers, excluding revenue from sales of folding box board to third parties. Core revenue is not a defined performance measure in IFRS (see further note 9).

(2)

The performance of the segments is presented with reference to adjusted EBITDA. Adjusted EBITDA is defined by the Group as EBITDA, adjusted to exclude certain non-cash transactions and items of a significant or unusual nature and to include the cash impact of dividends received from joint ventures. EBITDA and adjusted EBITDA are not defined performances measures in IFRS. Refer to note 9 for the detailed definitions of these performance measures and the reconciliation between the Group’s profit or loss, EBITDA and adjusted EBITDA.
See note 5.2 for the impact on adjusted EBITDA of the adoption of IFRS 16 Leases on 1 January 2019.

(3)

The Group’s capital expenditure mainly relates to investments in its own production, plant and equipment (PP&E capital expenditure, excluding filling machines) and to the manufacture and deployment of filling machines with customers (filling machine capital expenditure).
Net capital expenditure is defined by the Group as capital expenditure less upfront cash. Upfront cash is defined as consideration received as an upfront payment for filling machines from customers. Capital expenditure relating to filling machines is presented net of this upfront payment in the table above. Net capital expenditure is not a defined performance measure in IFRS. Refer to note 11 for the reconciliation between capital expenditure and net capital expenditure.

(4)

Group Functions may report positive net filling machine capital expenditure if the capital expenditure of the global filling machine assembly during a period is smaller than the payments it received under intra-group sales of filling machines. This could also happen occasionally in the case of PP&E capital expenditure, excluding filling machines.

Revenue from transactions with external customers

 

733.3

 

630.2

 

297.3

 

1,660.8

 

15.3

 

 

1,676.1

Revenue from inter-segment transactions

 

202.6

 

9.6

 

2.8

 

215.0

 

39.1

 

(254.1)

 

Segment revenue

 

935.9

 

639.8

 

300.1

 

1,875.8

 

54.4

 

(254.1)

 

1,676.1

Core revenue from transactions with external customers (1)

 

733.3

 

598.4

 

297.3

 

1,629.0

 

15.3

 

 

1,644.3

Adjusted EBITDA (2)

 

245.4

 

191.1

 

81.0

 

517.5

 

(56.0)

 

 

461.5

Capital expenditure: (3)

 

(70.0)

 

(137.5)

 

(37.2)

 

(244.7)

 

30.8

 

 

(213.9)

PP&E (excl. filling machines) (3) (4)

 

(24.6)

 

(47.5)

 

(2.2)

 

(74.3)

 

17.3

 

 

(57.0)

Net filling machines (3) (4)

 

(11.1)

 

(55.1)

 

(33.5)

 

(99.7)

 

13.5

 

 

(86.2)

Net capital expenditure (3)

 

(35.7)

 

(102.6)

 

(35.7)

 

(174.0)

 

30.8

 

 

(143.2)

Segment revenue per major product / service lines

Information about the Group’s revenue is included in note 6, where total revenue is disaggregated by major product/service lines. In respect of the segments, the split of revenue between revenue from sale of sleeves and closures, filling line revenue and service revenue is broadly the same as at Group level and over recent years. Other revenue is primarily divided between EMEA and APAC.

Geographic information

The Group operates seven manufacturing facilities that produce carton sleeves (two in Germany and one each in Austria, China, Thailand, Brazil and Australia). The facility in Australia was part of the business combination that took place in November 2019 (see note 27). The Group also operates two assembly facilities for filling machines in Germany and China, a production facility for closures in Switzerland and a paper mill for the production of liquid paper board and folding box board in New Zealand. It further operates three R&D centres (one each in Germany, Switzerland and China) as well as four training centres (one each in Germany, Brazil, Thailand and China). Furthermore, the joint ventures in the Middle East operate a sleeves manufacturing facility and a training centre in their region.

The table below includes information about the Group’s non-current assets on a country basis. Non-current assets exclude financial instruments, deferred tax assets and net defined benefit assets.

(In € million)

 

As of
31 Dec. 2019

 

As of
31 Dec. 2018

(1)

The Company's country of domicile is Switzerland.

Germany

 

1,110.7

 

1,138.4

Switzerland (1)

 

501.9

 

515.7

China

 

547.9

 

550.9

Thailand

 

548.7

 

515.1

Austria

 

342.6

 

348.1

Other countries

 

749.8

 

705.8

Total non-current assets

 

3,801.6

 

3,774.0

The non-current assets are reported based on the geographic location of the business operations. The non-current assets are predominantly located in the countries in which the Group’s manufacturing, assembly and production facilities are situated. The Group’s intellectual property is primarily held by a company based in Switzerland.

The table below includes information about the Group’s revenue from external customers on a country basis.

(In € million)

 

Year ended
31 Dec. 2019

 

Year ended
31 Dec. 2018

China

 

292.4

 

278.1

Germany

 

198.0

 

192.0

Brazil

 

151.3

 

150.8

Switzerland

 

12.3

 

11.5

Other countries

 

1,129.9

 

1,043.7

Total revenue from external customers

 

1,783.9

 

1,676.1

Revenue is reported based on the geographic location of customers. The customer base of the Group includes international companies, large national and regional companies as well as small local companies.

Information about major customers

The Group does not have revenue from transactions with a single external customer amounting to 10% or more of the Group’s revenue in any of the periods presented.