Financial review

2024 financial results highlight resilient revenue profile

In 2024, the market environment remained muted due to subdued consumer sentiment. Nevertheless the Group increased revenue by 4.3% on a constant currency basis and by 3.9% on a constant currency and constant resin basis. The adjusted EBITDA margin for the year was 24.6%.

Free cash flow was €290 million, 32% ahead of 2023 primarily due to lower capital expenditure after a high level of investment in 2023.

Revenue growth of our carton business was 6.0% for the year. This performance highlights the value we deliver to our customers through our unmatched packaging flexibility, competitive total cost of ownership and our best-in-class sustainability offering.

In 2024, we placed 75 aseptic carton filling machines, which was another strong performance after two years of exceptional placements exceeding 90 fillers annually.

Revenue declined at our bag-in-box and spouted pouch business by 5.0% at constant currency and constant resin. This reflected subdued market conditions in foodservice and operational challenges at our US production facilities. These challenges were addressed, and we were pleased to report revenue growth of 2.5% in the second half of the year.

Key events in 2024 impacting the performance of the Group

Chilled carton production changes in China

The Group has moved its production of chilled carton from Shanghai to the same location as its aseptic carton facilities in Suzhou. Production at the Group’s new, leased chilled carton production plant started in the second quarter of 2024. The move of the chilled carton production has resulted in the recognition of impairment losses and restructuring expenses in the total amount of €22.0 million (pre-tax) in the year ended December 31, 2024.

The Group is in the process of selling the production plant in Shanghai. The sale is expected to complete in 2025.

Refinancing

In 2024, the Group issued an unsecured Schuldscheindarlehen totaling €450 million and accessed new senior unsecured credit facilities consisting of a five-year €50 million term loan and two committed Euro revolving credit facilities in the total amount of €500 million. The Group also repaid its €550 million term loan that was due in June 2025 and, at the same time, a related €300 million committed multi-currency revolving credit facility was terminated. The current year refinancing has improved the maturity profile of the Group’s debt structure.

In November the Group signed a €550 million unsecured bridge loan facility agreement. The facility can be accessed until June 2025, when the Group’s €550 million of senior unsecured notes is due for repayment.

Financial performance

Revenue

Revenue in 2024 increased by 4.3% on a constant currency basis (3.0% reported and 3.9% at constant currency constant resin) to €3,328.5 million (2023: €3,230.3 million). The bag-in-box and spouted pouch business contributed €579.6 million to Group revenue in 2024 (€604.0 million in 2023).

Revenue growth in the segments

Total revenue 2024

by segment

Revenue by product 2024

Carton vs bag-in-box and spouted pouch

Europe

Europe reported revenue growth of 6.2% for 2024 at constant currency and 6.4% at constant currency and constant resin.

The aseptic carton market was supported by higher raw milk availability for aseptic processing while SIG also gained market share as it ramped-up previous filler placements. The region has placed 56 fillers over the last 3 years.

After a decline in revenue in H1 2024, impacted by a high comparable base, bag-in-box and spouted pouch reported positive revenue growth in H2 2024. This was supported by the ramp-up of cross-selling projects in both packaging substrates. These projects are structured as system solutions with recurring packaging revenue.

India, Middle East and Africa (“IMEA”)

IMEA reported revenue growth of 13.4% for 2024 at constant currency and 13.5% at constant currency and constant resin.

The Middle East and Africa, experienced strong carton revenue growth for the year driven by the ramp-up of filler placements across the region, as well as a market recovery in Egypt and the GCC.

In India, we continued to experience high double-digit revenue growth as we expanded our commercial presence and captured share of the growing packaging market.

Asia Pacific (“APAC”)

Asia Pacific reported revenue growth of 1.6% on a constant currency basis, or 1.7% on both a constant currency and constant resin basis.

The market environment in China was challenging in 2024 due to soft consumer spending. However, SIG successfully increased its share of the carton market by adapting packaging sizes to offer affordable price points for consumers. Additionally, we partnered with customers to launch flavored milk products which was well-received by consumers in the on-the-go market.

Growth in Thailand, Vietnam, Indonesia, and Malaysia was driven by the ramp up of filler placements leading to share gains across all countries. Growth in the region was also supported by innovative product launches.

Americas

The Americas reported revenue growth of 0.8% on a constant currency basis, or a decrease of 0.7% on both a constant currency and constant resin basis.

In the United States, the bag-in-box business was impacted by weakness in the out-of-home dining market. This slowdown was primarily driven by rising menu prices. In response to the decline in demand, quick service restaurants intensified their promotional activities during the second half of the year.

Revenue performance was further impacted by operational challenges at our U.S. bag-in-box facilities and a high prior year comparable base. The production bottlenecks have been addressed, and we were pleased to report positive revenue growth in the second half of the year. 

Aseptic carton volumes benefitted from the ramp-up of filling machines in Canada, the United States and Mexico.

Brazil saw good volume growth from filler ramp-ups mostly in single serve liquid dairy cartons, while we continued to expand into the surrounding countries.

Seasonality

The Group’s aseptic carton business experiences moderate seasonal fluctuations, primarily due to seasonal consumption patterns and performance incentive programs relating to carton sleeves that generally end in the fourth quarter. Customers tend to purchase additional carton sleeves prior to the end of the year to meet seasonal demand and to qualify for annual volume rebates, typically resulting in higher sales during the fourth quarter. Historically, this has resulted in relatively low sales in the first quarter. The bag-in-box, spouted pouch and chilled carton businesses are not significantly exposed to seasonality.

Revenue split 2024

Adjusted EBITDA 2024

by segment

Net capex 2024

by segment

SIG aseptic filling machines 2024

by segment

Adjusted EBITDA

Adjusted EBITDA margin¹

The following table reconciles profit for the period to EBITDA and adjusted EBITDA.

Adjusted EBITDA increased by €16.5 million, from €803.0 million in 2023 to €819.5 million in 2024. Adjusted EBITDA growth was driven by lower raw material costs as our hedged prices aligned closer to market rates and a higher revenue contribution of €22.8 million. This was offset by higher selling, general and administrative (“SG&A”) costs of €22.3 million, negative impacts from foreign currency fluctuations (€16.3 million) and negative production costs (€13.8 million).

The adjusted EBITDA margin was 24.6% compared with 24.9% for 2023.

The adjusted EBITDA margin, excluding foreign currency fluctuations, was stable compared to the prior year. Higher revenue contribution was primarily from volume growth while mix was unfavorable. Raw material costs positively impacted margin by 140 basis points compared to the prior year, especially driven by lower polymer costs. This positive impact was offset by higher SG&A expenses driven by investments in growth, and wage inflation. Higher production costs were as a result of operational challenges in bag-in-box facilities in North America.

SG&A as a percentage of revenue was 12.4% compared to 12.2% in 2023. R&D spend remained stable as a percentage of revenue in 2024 at 2.1% (2023: 2.2%).

Compared to the prior year segment adjusted EBITDA margins were all positively impacted by raw material costs. The IMEA margin was positively impacted by topline contribution, offset by higher SG&A costs. In the Americas, the margin was negatively impacted by production costs in the North American bag-in-box facilities. In APAC, the margin was negatively impacted by topline contributions for reasons explained in the “revenue” section above.

EBITDA decreased by €17.7 million to €843.6 million in 2024, the decrease was primarily related to impairment losses and restructuring expenses for the chilled carton plant in China and a release in 2023 of an acquisition-related provision that did not recur in the current period. These negative impacts were offset by higher adjusted EBITDA, described above and lower integration costs.

EBITDA was positively impacted by the fair value change of €51.3 million for the Scholle IPN contingent consideration in 2024. The fair value of the contingent consideration is derived from an estimated growth rate for the business in 2025 that is below the Company’s mid-term guidance. See further note 32 of the consolidated financial statements.

Net income

Adjusted net income in 2024 was €308.1 million compared with €318.2 million in 2023. The decrease of €10.1 million was primarily due to higher depreciation, interest and tax expense partially offset by higher adjusted EBITDA.

Net income was €194.5 million in 2024 compared with €243.2 million in 2023. The decrease of €48.7 million was mainly due to impairment losses and restructuring expenses and a release of an acquisition-related provision that did not recur in the current period.

The effective tax rate increased from 24.9% in 2023 to 30.8% in 2024. The implementation of the OECD Pillar Two model rules, the introduction of a 9% corporate tax rate in Dubai and the relative mix of profits and losses taxed at varying tax rates in the jurisdictions we operate in, contributed to an increase in the effective tax rate.

The adjusted effective tax rate increased from 24.7% in 2023 to 27.7% in 2024. The increase was driven by the items discussed in the “effective tax rate” paragraph above.

The following table reconciles profit for the period to adjusted net income.

Return on capital employed (ROCE)

The ROCE, computed at a reference tax rate of 30%, was 26.6% in 2024, compared with 27.3% in 2023. The year-on-year change is primarily due to capital investments and the recognition of lease liabilities. The ROCE at the adjusted effective tax rate of 27.7% was 27.5% in 2024.

Capital expenditure

To better reflect the Group’s investments in production plants and production equipment via leases, management has updated its definition of capital expenditure to include lease payments. The following table presents capital expenditure with and without lease payments.

Net capital expenditure, including lease payments, decreased by €82.2 million to €215.6 million in 2024 (2023: €297.8 million), representing 6.5% of revenue (9.2% in 2023). The reduction in capital expenditure partly reflects completion of capital projects. This includes the construction of a new aseptic sleeve plant in Mexico, a chilled carton production facility in China and the expansion of bag-in-box capacity in the USA. The remaining reduction in net capital expenditure reflects lower filler capex, including a one-off benefit from lower filler inventory.

Upfront cash received for filling lines, presented in net cash from operating activities, was at a similar absolute level to the prior period but increased as a percentage of filling line and other related equipment expenditure to 79% (2023: 63%). Upfront cash as a percentage of filling line and other related equipment expenditure can vary depending on contract type and location.

SIG placed 75 aseptic carton filling machines in field in 2024. Taking account of withdrawals, the number of SIG aseptic carton filling machines globally reached 1,434, a net increase of 46. Some of the filling machines retired during the year will be reconfigured and redeployed. New filling machines placed in field have significantly higher capacity than retired filling machines.

NET CAPEX 2024

(€ million)

Cash flows

Net cash from operating activities decreased by €14.1 million to €649.2 million in 2024 from €663.3 million in 2023. This was impacted by increased tax and interest payments of €39.4 million. Overall net working capital items offset each other as we managed inventory levels while we continued to securitize our receivables. The gross amount of receivables sold into the program did not materially change compared to 2023, however, we were able to reduce our retained reserve. Net working capital was also positively impacted by higher volume incentives which are generally paid in the following year.

Cash used in investing activities in 2024 decreased by €88.1 million compared to 2023. The movements in capital expenditure is described under “Capital expenditure”.

Free cash flow was €290.3 million compared with €219.5 million in 2023. It was primarily driven by the lower capital expenditure in the period, including a one-off benefit from lower filler inventory, and offsetting movements in net working capital positions.

The net cash used in financing activities of €320.2 million reflects dividends paid of €187.8 million, €73.5 million of debt repayments and €51.7 million of lease payments.

Net debt and leverage

The net debt as of December 31, 2024 remained at a similar level to December 31, 2023. The adjusted EBITDA performance positively contributed to the net leverage ratio, which slightly decreased to 2.6x (2023: 2.7x).

Debt rating

Other

Dividend

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

At the Annual General Meeting to be held on April 8, 2025, the Board of Directors will propose a dividend of CHF 0.49 per share (2023: CHF 0.48 per share), totalling CHF 187.3 million (equivalent to €199.0 million as per the exchange rate as of December 31, 2024). This represents a dividend pay-out ratio of 65% of adjusted net income. If approved by the shareholders, the dividend will be paid from the foreign capital contribution reserve.

Foreign currencies

We operate internationally and transact business in a range of currencies. Whilst our reporting currency is the Euro, we generate a significant portion of our revenue and costs in currencies other than the Euro. Changes in the value of the Euro against other currencies in countries where we operate can affect our results 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.

We supply semi-finished and finished goods to certain of our non-European operations in Euros, and a number of our key raw material suppliers charge us for raw materials in Euros or US Dollars. As a result, a greater portion of our costs is denominated in Euros and, to a lesser extent, US Dollars compared with the related revenue generated in those currencies. Accordingly, changes in the exchange rates of the Euro and the US Dollar compared with the currencies in which we sell our products could adversely affect the results of operations. We expect to mitigate some of these cost mismatches through the opening and expansion of local production facilities in certain markets, ongoing efforts to qualify local suppliers and by using foreign currency derivatives.

2025 guidance

For 2025, the Group anticipates a broadly similar market environment as in 2024. The Company expects total revenue growth at constant currency and constant resin¹ of 3 to 5% in 2025.

The adjusted EBITDA margin is expected to be within the range of 24.5% and 25.5%. In line with its usual seasonality, the Group expects revenue growth and adjusted EBTIDA margins to be higher in the second half of the year. This is subject to input costs and foreign currency volatility.

Net capital expenditure, including lease payments, is projected to be within the Group’s target range of 7–9% of revenue and the dividend pay-out ratio within a range of 50–60% of adjusted net income.

The adjusted effective tax rate is forecast to be between 26 and 28%.

Mid-term guidance

The Company confirms its mid-term revenue growth guidance of 4–6% at constant currency and constant resin with growth expected in the upper half of this range. Adjusted EBITDA margin is expected to be above 27% in the mid-term, driven by continued margin expansion in the aseptic carton business and the acquired businesses of chilled carton, bag-in-box and spouted pouch.

Net capital expenditure, including lease payments, is forecast to be within a range of 7–9% of revenue and the dividend pay-out ratio is expected to be within a range of 50–60% of adjusted net income.

SIG’s business is expected to continue to be strongly cash generative, and the Company maintains its mid-term leverage guidance of towards 2x.

1 The resin escalator for the bag-in-box and spouted pouch businesses, which passes on movements in resin costs directly to customers, is not included in the guidance.