SIG beverage focus pays dividends

Related tags Sig combibloc Profit

Swiss processing and packaging equipment provider SIG has reported a
significant increase in its net profits for the first half of the
year, a result that sees the company pulling itself out of the red.
The improvement came despite the fact that net group sales dropped
due to competitive nature of the business environment.

SIG said that in the last six months it has continued to move on with its course of divestments in an effort to focus on the beverage sector, which it believes is where the company's future is. A strong performance from SIG Combibloc, which concerns beverage cartons, and SIG Beverages, which makes filling lines, partly accounted for the group's net profit rising to €25 million, compared to a loss of €74 million in the same period last year.

The company says that it will continue to increase its presence in the liquids packaging sector and that this will become a focus for its core business. In turn continued efforts will be made to strengthen innovations in this area during the coming months.

Compared to the previous year, net sales and order intake for the first half-year grew by 3 per cent to €777 million and 2 per cent to € 760 million respectively, while operating profit (EBIT) increased by 11 per cent to a total of € 51 million.

In the core business, the number of employees rose by 4 per cent to 6 832; this increase being attributed exclusively to the SIG Combibloc division. The company said that significant contributors were the new packaging materials plant in China, the implementation of the 21-shift working model in Germany, plus the growth driven expansion of the services organisation.

Net sales for SIG Combibloc increased by 3 per cent to €522 million, whereas order intake dropped off by 3 per cent to reach €545million. The company said that this was due to the negative effects of currency exchange rates and divestingnon-core activities, which otherwise would have accounted for a positive performance.

Meanwhile SIG Beverages' net sales grew by 2 per cent in the first six months to reach €257 million. The company said that this result came despite hesitant trading conditions for this sector and the weakness of the US dollar. Order intakes were also reported to be up by 15 per cent.

With regards its outlook for the second half the company is expecting to improve on its position in the market. It said that by penetrating newmarkets and introducing innovative products, SIG Combibloc would rigorously pursue its growthcourse. As for SIG Beverages its direction will focus on the segment ofhigh-quality beverages.

In the second semester, SIG Combibloc is expected to achieve stronger net sales and higheroperating profit. This leads the company to believe that an EBIT margin of 12 per cent should be achieved for the full year. Further to this the company also believes that net profits and sales should be 'slightly' higher than last year. Losses attributed to previously divested companies should also help to improve margins for the year as a whole.

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