Full year 2023 financial results highlight strong business profile

Samuel Sigrist, CEO of SIG, said: “We are pleased with SIG’s strong revenue performance amid some softness in our end markets due to food price inflation impacting demand.

Total revenue growth at constant currency was up 18.5% driven by the contribution from the prior year acquisitions. Organic revenue growth for our aseptic carton business was 7.4%, which is testimony to our strong business model and our ability to secure price increases to offset higher input costs. On a proforma basis, bag-in-box and spouted pouch revenue increased by 5.6% for the year.

We continue to identify and to realize cross-selling wins between our different substrates underpinning our strategy to offer a broader product portfolio to our food and beverage customers.

The Group’s adjusted EBITDA margin increased to 24.9% compared with 23.5% in 2022. The 140-basis point increase was at the top end of our guidance range for an increase of 50 to 150 basis points.

We are pleased to have placed another 91 aseptic carton filling lines in 2023, the same level as 2022. This performance for two successive years is a new record for the Group and demonstrates that our distinctive systems-based offering remains highly attractive to our customers when making long term investment decisions.

We believe the strong cash generative nature of our business model combined with our excellent ESG credentials of our packaging substrates will ensure our success for many years to come.”

2024 guidance

The Company expects total revenue growth at constant currency at the low end of its 4-6% mid-term guidance range. This reflects the Group’s expectation that volume growth will be geared towards the second half of 2024, as we expect end market demand to recover.

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.

The adjusted EBITDA margin is expected to be within the lower half of 25-26%. This is subject to input costs and foreign currency volatility. The Company believes operating leverage and acquisition synergies will positively contribute to adjusted EBITDA margin which will be partly offset by higher SG&A, reflecting investments in innovation and regional expansion, and wage inflation.

Net capital expenditure 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, with the contribution from the chilled carton, bag-in-box and spouted pouch businesses expected to enable resilient growth 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 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 with milestone of around 2.5x at the end of 2024.