SIG Group (SIGN) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 saw solid revenue growth of 5.1% at constant currency, driven by strong carton performance and sequential recovery in bag-in-box and spouted pouch segments, with resilience despite demand softness in some markets.

• Operational bottlenecks in North America eased, improving efficiency and balancing supply and demand.

• Continued investments in India and China, with Indian aseptic sleeves plant on track for completion by end of 2024 and a new extrusion line to start in 2026.

• Board nominated Ola Rollén for election as Chair at the 2025 AGM, succeeding Andreas Umbach; current chair not standing for re-election.

• Free cash flow and net leverage improved year-over-year, reflecting higher operating cash flow and lower CapEx.

Financial highlights

• Q3 2024 revenue was €825 million (+5.1% constant currency); adjusted EBITDA margin reached 25.0%.

• Adjusted EBITDA for Q3 was €206 million; adjusted net income for Q3 was €77 million, slightly down from €79 million in Q3 2023.

• Q3 cash flow amounted to €78 million; free cash flow for nine months was €1 million, up from -€80 million in 9M 2023.

• Net CapEx for nine months was €129 million, down €100.9 million year-over-year.

• Net leverage improved to 3.0x from 3.2x a year ago.

Outlook and guidance

• Full-year constant currency revenue growth expected around 4% (±50 bps); guidance excludes resin escalator for bag-in-box and spouted pouch.

• Adjusted EBITDA margin forecasted at the lower end of 24%-25% range; adjusted effective tax rate projected at 26%-28%.

• Net CapEx expected in the lower half of 7%-9% of revenues; similar CapEx guidance for 2025 barring major investments.

• Dividend payout ratio expected at 50%-60% of adjusted net income.

• Guidance subject to end-market, input cost, and FX volatility.