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Letter from the Chairman and the Chief Executive Officer

Andreas Umbach – Chairman (portrait)
Andreas Umbach Chair
Samuel Sigrist – Chief Executive Officer (portrait)
Samuel Sigrist Chief Executive Officer

Strongly positioned for future growth

2022 was an eventful year for SIG. In line with our ambition to be the global leader in sustainable packaging for liquid food and beverages, we expanded our offering of systems and solutions to include – in addition to aseptic carton – bag-in-box and spouted pouch, as well as chilled carton in Asia.

In our aseptic carton business, which represented 85% of our revenue in 2022, we achieved excellent organic revenue growth of 8.0% for the year compared with 2021. This included both price and volume gains. Higher volumes were achieved through continued geographic, category and channel expansion, allowing us to achieve market share gains in multiple markets.

One of our most successful expansions during the year was in India, where we won a significant number of new filling machine contracts, securing our presence with the leading dairy and NCSD players. Over the next two years we expect to deploy approximately 35 new filling machines. In response to this rapid growth, we will commence the first phase of construction of a local aseptic carton packaging plant in 2023, with completion expected in 2024. The plant will initially provide printing and finishing capabilities.

Robust revenue growth and profitability

Group revenue of €2.8 billion in 2022 reflected growth of 27.4% including the contribution from acquisitions (constant currency), with strong organic growth of 8.0% (constant currency) in the aseptic carton business. Adjusted EBITDA for the year was €652 million, an increase of 14% compared with the prior year. The adjusted EBITDA margin of 23.5% reflected dilution from the Scholle IPN and Evergreen Asia acquisitions, higher raw material, energy and freight costs, and a mathematical compression from price increases, which did, however, help to offset the rising costs in absolute terms. The ability to offset inflationary pressures through price increases, albeit with a lag, is testimony to the strength of our business model.

Adjusted net income was €287 million (2021: €266 million) and diluted adjusted EPS was stable at €0.79, against the backdrop of an increase in the number of shares following the Scholle IPN and Evergreen Asia acquisitions. Free cash flow was €263 million (2021: €258 million) despite acquisition-related costs. Capital expenditure was below the guided range of 7–9% of revenue, even with continuing investment in our first aseptic carton production plant in Mexico – which commenced commercial production in mid-February 2023 – and a high level of filling machine investments. Given the increased number of shares outstanding, the Company has undertaken to deliver a progressive increase in the dividend per share. We are therefore proposing to increase the dividend to CHF 0.47 per share, compared with CHF 0.45 per share in 2021. This represents 64% of adjusted net income.

Both Standard and Poor’s and Moody’s have reaffirmed their ratings of the Company, confirming our strong credit profile. This has enabled us to secure long-term financing for the acquisitions on attractive terms. Net leverage at the end of 2022 was 3.1x, and we remain committed to a ratio of towards 2x mid-term, with a milestone of 2.5x by the end of 2024.

Strong pipeline sustaining future growth

We are delighted to report that we placed 91 aseptic carton filling machines during the year. This is an exceptionally high number, which will drive mid-term market share gains. We also have a strong pipeline for 2023 showing that, even in periods of high inflation and economic uncertainty, customers are willing to invest in growth. Our customers are attracted by the volume flexibility of our filling machines, which in the current environment allows them to switch to smaller sizes in order to maintain affordability. They also appreciate the ability to fill particulates, fuelling the trend for healthy innovative drinks post-COVID-19. Additionally, our aluminum-layer-free packaging solution, which reduces the carbon footprint of a carton by up to 58%, enables customers to respond to increasing pressure from consumers to reduce their carbon footprint.

Broadening our reach and our resilience

Since the IPO in 2018, SIG has consistently met or exceeded its constant currency revenue growth guidance of 4–6%. We are committed to sustaining above-market growth along with best-in-class margins and strong recurring cash flows. The acquisitions made in 2022 continue a strategy of geographic expansion implemented over many years, which has increased the level of sales outside Europe from less than 25% in 2008 to around 70% today on a pro forma basis. These acquisitions also accelerate our category and channel expansions.

Scholle IPN broadens our growth platform

Scholle IPN enjoys competitive advantages due to its know-how and intellectual property in barrier films and fitments. Its engineering solutions are deeply embedded within the customer’s value chain, contributing to the development of longstanding customer relationships that generate recurring revenue.

Scholle IPN strengthens our foothold in the Americas market and provides access to the leading global beverage and quick-service restaurant customers in the world. This provides meaningful opportunity for growth, especially through SIG’s well-established emerging market platform, as we launch bag-in-box and spouted pouch solutions in Asia Pacific, South America, and the Middle East and Africa.

Together, the R&D capabilities of SIG and Scholle IPN will accelerate our journey towards a full barrier aluminium-layer-free carton portfolio at cost parity with our standard cartons.

Drawing on SIG’s core technical competences of aseptic high-speed filling will allow us to develop high output solutions for spouted pouch customers, reducing the total cost of ownership for our clients. Combined with Scholle’s proprietary sealing equipment and its mono-material packaging substrates, we aim to deliver an industry leading solution which is fully recyclable, has improved nutrient preservation and reduces food waste.

We see opportunities to increase the margins of spouted pouch and bag-in-box through geographic expansion, an increased share of aseptic sales and the further development of systems and solutions. With our FMCG expertise and state-of-the art technology centres, we will be able to drive joint innovation together with customers.

We are pleased that we can already report initial revenue synergy wins in Europe, MEA, Thailand, Indonesia and Brazil.

Category expansion with Evergreen Asia

The acquisition of Evergreen Asia's chilled milk business complements SIG’s aseptic carton platform in Asia. Based on an increasingly developed cold chain in China’s urban centres, the chilled and extended shelf-life milk category is experiencing robust growth. This creates a significant opportunity for cross-selling as SIG aims to increase share of wallet with existing key customers in Asia. Evergreen Asia also provides access to many dynamic regional dairies in China, which primarily focus on chilled milk. Drawing on SIG’s core technical competences, we plan to accelerate new product development and drive future market share gains in the category.

Corporate responsibility and sustainability at our core

Our net positive ambition is encompassed in our commitments around Forest+, Climate+, Resource+ and Food+. You can read more about these key areas in this Annual Report: To touch briefly on two of them:

Forests are at the heart of our business, with 75% or more of our cartons made from liquid packaging board sourced from responsibly managed forests. We have a long history of Forest Stewardship Council (FSC™) certification, and since 2021 all the liquid packaging board we use has been FSC™-certified. Our commitment to create more thriving forests goes way beyond our own supply – it recognises their importance for humanity as a carbon sink and a habitat for wildlife. This commitment was instrumental in SIG qualifying as a partner to WWF Switzerland, and together we are committed to accelerating progress in forest management and restoration.

Our aseptic carton production has been carbon neutral since 2018, and in 2022 we announced that we would further extend our use of renewable electricity, currently in use in Thailand, Brazil, China and Germany, via the construction of a new vast solar installation at our production sites in Linnich and Wittenberg, Germany. Further installations are planned globally, as we focus on reducing our carbon emissions for our business and our customers.

We use the EcoVadis ratings platform to measure our progress on sustainability on an annual basis as it covers a broad range of criteria in the areas of environment, labour and human rights, ethics and sustainable procurement. These criteria have a bearing on many facets of our business and touch on the work of many of our employees. In 2022, we once again achieved a platinum rating from EcoVadis, putting SIG in the top 1% of all businesses participating in the sustainability assessment.

We were delighted to be included as a constituent of the FTSE4Good index following the December 2022 Index review. We believe this is recognition of our ESG commitment and how sustainability remains at the core of our business.

We are extending our sustainability strategy across our entire operations and supply chain as we integrate the acquired businesses. We have set ambitious new targets to reduce scope 1, 2 and 3 emissions across the enlarged group by 52% per litre packed by 2030. We are currently awaiting approval of our targets from the Science Based Target initiative.

Fostering diversity and an inclusive culture

Management and the Board of Directors are firmly committed to increase the number of women on the Board and in leadership positions within the Company. In 2022, we made further progress towards our ambitious targets, with the percentage of women in leadership positions increasing to 23% compared with 20% in 2021. Women on our Board of Directors currently represent one third of the members and we remain committed to at least maintaining that level. Management continuously consults with employees in order to monitor whether we are taking the right measures and sustaining our culture.

Appreciation for our people

This year, SIG welcomed approximately 2,900 new employees, taking our Group total to around 9,000 people. We are pleased to observe a common sense of purpose and a shared passion for our business. We would like to thank all our employees, from those who have recently joined to those who have been with us for many years, for their exceptional performance in driving the business forward at a time of change and in a challenging environment. We look forward to continuing to build on our combined energy and enthusiasm.

Andreas Umbach


Samuel Sigrist

Chief Executive Officer

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