7. Segment information

The Group has four operating segments, which are also the reportable segments: Europe, Middle East and Africa (“MEA”), Asia Pacific (“APAC”) and Americas.

Prior to the acquisition of Scholle IPN on 1 June 2022, all segments provided the same aseptic carton packaging solutions, comprising aseptic carton filling lines, aseptic carton sleeves and closures as well as after-market services. The acquisition of Scholle IPN has not resulted in a change in the Group’s segmentation. The business of Scholle IPN has been allocated to Europe, MEA, APAC and Americas. The segments now also provide bag-in-box and spouted pouch packaging solutions, including barrier film and fitments as well as filling lines and other equipment for bag-in-box and spouted pouches with related after-market services. Since the acquisition of Evergreen Asia on 2 August 2022, APAC also provides chilled carton packaging solutions, comprising carton filling lines, carton sleeves and closures as well as after-market services.

Prior to the acquisition of the remaining shares of the joint ventures in the Middle East on 25 February 2021, the Group had three operating (and reportable) segments: Europe, Middle East and Africa (“EMEA”), APAC and Americas. The acquisition resulted in a split of EMEA into two segments: segment Europe and segment MEA.

Overview of the segments and Group Functions

Europe includes production of aseptic carton sleeves and closures as well as barrier film and fitments for bag-in-box and spouted pouches for the Group’s customers in Europe. Europe also supplies the other segments with aseptic carton sleeves and, to a lesser extent, closures from its plants in Europe. The Group’s central procurement activities, including commodity hedging, are part of Europe, with the European production entities being the main internal customers. In addition, Europe includes the European-based assembly plant for equipment used for bag-in-box and spouted pouches.

MEA covers the Group’s customers in the Middle East and Africa. The operations of the former joint ventures in the Middle East, including an aseptic carton sleeves production plant, are part of this segment. MEA will include sales of bag-in-box and spouted pouch packaging solutions to customers in the Middle East and Africa.

Until the end of February 2021, the former segment EMEA included the same activities as included in segment Europe before the acquisition of Scholle IPN (see above). In addition, EMEA included the result from the sale of supply from the Group’s European production entities to the Middle Eastern markets. The Group’s former joint ventures in the Middle East contributed to the performance of EMEA through dividend payments and royalty payments related to the use of SIG technical solutions and aseptic carton sleeves sales in the Middle East and Africa.

APAC includes production of aseptic carton sleeves, carton sleeves for the chilled market as well as barrier film and fitments for bag-in-box and spouted pouches for the Group’s customers in China, South East Asia and Oceania. In addition, APAC supplies the other segments with aseptic carton sleeves. APAC also includes the aseptic carton filling machine assembly plant in China, the assembly plant for filling lines and other related equipment used for bag-in-box and spouted pouches in India and the assembly of filling machines for the chilled market in Asia. Until the beginning of June 2021, when the Group sold its paper mill in New Zealand, APAC also included production of liquid paper board and folding box board (see note 26). The liquid paper board was mainly used by the sleeves plants in Asia and the former joint ventures in the Middle East.

Americas covers the Group’s customers in North and South America. South America has its own aseptic carton sleeves production plant. North America has so far primarily been supplied with aseptic carton sleeves from the Group’s European and Asian plants. However, commercial production of aseptic carton sleeves for the North American market started in the Group’s first plant in Mexico in February 2023. Americas also includes the production of film and fitments for bag-in-box and spouted pouches as well as the American-based assembly plant for filling lines and other related equipment used for bag-in-box and spouted pouches.

The Group Functions include activities that support the Group’s business, such as the global aseptic carton filling machine assembly, global technology (including R&D), information technology, marketing, finance, legal, human resources and other support functions. Global filling machine assembly sells aseptic carton filling machines and spare parts, and provides assembly-related services, to all segments. The Group Functions are not involved in any significant transactions with third parties. Their sales of filling lines to the former joint ventures in the Middle East were reported as third-party sales until the Group obtained control over the joint ventures as of the end of February 2021.

Inter-company transactions between the segments, and between the segments and the Group Functions, are eliminated in consolidation. These mainly relate to the sale of aseptic carton filling machines, aseptic carton sleeves and closures. Pricing is determined on a cost-plus basis. The Group has limited inter-segment sales of products related to the chilled carton operations.

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 note 9).

Segment financial information

The following tables present financial information about the Group’s segments and Group Functions. The same measurement basis is used when presenting the segment information as is used in the Group’s consolidated financial statements.

The increase from three to four segments in the year ended 31 December 2021 did not result in any material changes that would have required restatement of segment information. The Group’s reporting structure changed due to the acquisition of the remaining shares of the joint ventures in the Middle East on 25 February 2021. The Group did not have control over these entities before the acquisition. The Group accounted for the joint ventures using the equity method as it only had joint control. The results of the former joint ventures in the Middle East are fully consolidated and reported in the new segment MEA since the end of February 2021, while the European activities of the former EMEA segment are reported in the new segment Europe. Prior to the acquisition, the former joint ventures in the Middle East contributed to the performance of EMEA through dividend payments and royalty payments. The royalty agreement was terminated and dividend payments ceased upon the Group’s acquisition of the remaining shares of the joint ventures. No dividends were paid by the joint ventures to the former joint venture partners in the first two months of 2021. Sales by various Group companies to the former joint ventures were, prior to the acquisition, reported as external sales. Since the acquisition, sales to the former joint ventures are reported as inter-segment transactions. Based on these facts, the Group does not believe that a meaningful quantitative comparability could have been achieved considering the nature of changes in the relationship between the parties pre- and post-acquisition. Therefore, the table above for the year ended 31 December 2021 should be read in conjunction with the descriptions in this section.

Disaggregation of segment revenue

The following table presents revenue from transactions with external customers for the segments for the year ended 31 December 2022, split by major product/service line.

With regard to the Group’s sale of aseptic carton packaging solutions in the year ended 31 December 2021, the split of revenue between revenue from sale of sleeves and closures, filling line revenue and service revenue is broadly the same at Group level, between the Group’s segments and over recent years (see note 6). Other revenue, until the acquisition of the remaining shares of the joint ventures in the Middle East on 25 February 2021, was mainly divided between APAC and the former segment EMEA.

The following table presents revenue from transactions with external customers for the segments for the year ended 31 December 2022, split by type of business.

Geographic information

The Group operates nine plants that produce aseptic carton sleeves (two each in Germany and in China, and one each in Austria, Thailand, Saudi Arabia, Brazil and Mexico). The plant in Saudi Arabia was part of the acquisition of the remaining shares of the joint ventures in the Middle East on 25 February 2021 (see note 27). The plant in Mexico became operational in February 2023. The Group also intends to build an aseptic carton sleeves plant in India.

The Group operates two assembly plants for aseptic carton filling machines in Germany and China, and a production plant for closures in Switzerland. For the aseptic carton business, it also operates three R&D centres (one each in Germany, Switzerland and China), three technology centres (one each in Germany, the UAE and China) and five training centres (one each in Germany, the UAE, China, Thailand and Brazil). The Group sold its paper mill in New Zealand in 2021 (see notes 9 and 26).

In addition, the Group operates 15 plants that produce barrier film and fitments for bag-in-box and spouted pouches (four in the USA, two each in the Netherlands and India, and one each in Germany, Russia, Australia, China, Canada, Brazil and Chile), three assembly plants for filling lines and other related equipment used for bag-in-box and spouted pouches (one each in Spain, India and the USA) as well as two equipment-related R&D centres (one in Spain and one in the USA).

For the chilled carton business, the Group has three plants in China, South Korea and Taiwan that produce carton sleeves and one assembly plant for carton filling machines in China.

The following table 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.

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 production and assembly plants are situated. The Group’s intellectual property is primarily held by a company based in Switzerland.

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

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.