SIG Sees Like-For-Like Revenue Up In First Quarter
Packaging firm SIG has reported a 13.4% growth in core revenue on a like-for-like basis at constant currency, to €442.0 million, in the first quarter of its financial year.
The adjusted EBITDA increased to €117.9 million, from €83.7 million in the same period last year, while adjusted EBITDA margin was 26.1%.
Adjusted net income increased to €52.0 million, from €12.9 million in the first quarter of 2020, reflecting improved EBITDA and lower foreign exchange impact.
Net income increased to €2.9 million, from a loss of €25.5 million in the same period last year, driven by the non-recurrence of foreign exchange losses in 2020 and a positive contribution from the revaluation of commodity derivatives.
The company consolidated the revenues of the former Middle East & Africa joint ventures in a new segment, Middle East and Africa (MEA), from the end of February.
The Europe, Middle East and Africa (EMEA) segment relates to the group’s reporting structure before acquiring the MEA business, which was in place for the first two months of the year, SIG said.
The combined Europe and MEA segments registered a like-for-like growth of 4.4% during the quarter.
In the first two months of the year, Europe saw good growth compared with the first two months of 2020, reflecting a continuing high level of at-home consumption due to COVID-19 restrictions.
However, performance in March was weaker due to the high base of comparison, as March 2020 marked the start of lockdowns in Europe.
The MEA division reported solid currency economics growth in March with a recovery in consumption, particularly non-carbonated soft drinks.
In the Asia Pacific (APAC) region, both China and South East Asia registered double-digit growth at constant currency.
In China, the market operated at more normal levels compared with the first quarter of 2020, when the country was under full lockdown.
In southeast Asia, many countries continue to be affected by COVID-19 restrictions and the resulting economic impact.
However, after a period of de-stocking in the second half of 2020, customers rebuilt safety stocks in the first quarter of 2021, resulting in a spike in demand for cartons which is expected to be temporary, the company noted.
The company’s American unit saw exceptional growth reflecting the contribution of fillers deployed in 2020.
It also gained from increased at-home consumption and re-stocking, as many customers did not enter into the customary year-end rally in the fourth quarter of 2020.
The company expects to achieve core revenue growth at constant currency in the lower half of the 4% to 6% range.
The adjusted EBITDA margin is expected to be in the 27% to 28% range, assuming no significant deterioration in exchange rates.
Net capital expenditure is forecast to be within the targeted 8% to 10% of revenue range in 2020 and mid-term, the company added.
SIG highlighted that the factors that boosted revenue growth in the first quarter of 2021 in APAC and the Americas would not continue for the rest of the year.
In Europe and the Americas, where the business has benefited from high at-home consumption, performance in the second quarter onwards will be measured against a high base in 2020, while COVID-19 restrictions and economic uncertainty in South East Asia will impact on-the-go consumption in the region.