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SIG share is worth more than CHF 350 SIG share is worth more than CHF 350 • Strong business performance leads to 32% increase of net profit in 2006 • First time publication of detailed business plan metrics • Attractive business platform and compelling business plan will create further value • Significant opportunities in growth regions outside Europe, further expansion into huge food market and expected break-through of new barrier technology for plastic bottles supported by dedicated cost management • Update on auction process: indicative offers received from interested industrial and financial parties; opening data room for due diligence Following the pre-announcement made on September 25, 2006 by FERD, the owner of Elopak, and CVC Capital Partners, SIG shareholders will soon be presented with a formal tender offer from this bidding group that will substantially undervalue SIG. SIG’s Board of Directors has advised shareholders in its letter of September to reject this offer as the price is deemed inadequate. SIG is today providing its shareholders with information supporting an intrinsic value of the company in excess of CHF 350 per share, the level which FERD and CVC indicated might be their maximum offer for the Company. SIG publishes today its business plan through to 2009 and the key figures for the future value drivers until 2014. SIG also announces that following a strong business performance this year, it is further revising upward its guidance for the full year 2006 and expects now a net profit of EUR 62 million, 32% above last year’s result. The auction process undertaken by the Board of Directors is now well under way and the company has received preliminary indications of interests from industrial and financial parties. Selected parties have been invited to undertake due diligence, which will begin shortly. The publication of FERD/CVC’s offer is expected by November 6. In this case, counter offers can be filed up until December 12. Lambert Leisewitz, Chairman of the Board of Directors of SIG Holding, said: "The management team has successfully repositioned the Company, establishing an efficient and focused platform ideally positioned to take advantage of global growth opportunities in beverage and food packaging. Today, we have published our business plan enabling shareholders to understand the board’s confidence in SIG’s prospects. The strong financial performance in 2006, together with our business plan, excellent growth opportunities and our attractive business model demonstrate the true, strategic value of SIG.” Ideally positioned to create further value SIG has further solidified its position as the number two player in the aseptic carton packaging industry. Parallel to the substantial strengthening of the cardboard business, the company successfully repositioned its plastics bottle business to focus on the Value Added Bottling-segment. Building on the strong position of the Company, SIG is expanding geographically into high-growth markets, into new market segments and developing leading technology to further drive future growth. Expansion of SIG Combibloc into growth areas such as the Middle East, South East Asia and China has proven to be successful with the high double-digit growth rates achieved over the past years. Despite their significant cost in the near-term (combined EBIT loss of EUR 20 million in 2006), SIG believes these investments will underpin its superior growth prospects. Future Value Drivers – China and South America China, a 19 billion aseptic carton units market, is growing annually by 22% from 2005 to 2009. SIG is focused on expanding its market share in China significantly and is aiming to achieve sales of EUR 178 million in 2009 and EUR 296 million in 2014 (2005: EUR 36 million). On an EBIT level, break-even is being expected in 2007, significantly earlier than anticipated. The proven approach to geographic growth is now being applied to the new growth region of South America, a market expanding by roughly 3-5% per year with an annual volume of 9 billion units, equaling in size the German market. SIG Combibloc South America is expected to deliver sales of EUR 48 million in 2009 and sales of EUR 90 million in 2014. Break-even on an EBIT level is expected in 2010. In both markets, China and South America, SIG will achieve margins on a European level, in China as early as 2009. In South East Asia, margins have almost reached that level this year. Future Value Driver – retort food Beyond expansion into new geographic markets, SIG is also focused on expanding its business in the retortable food segment. The Company is leveraging its well-established position within the aseptic food market to tap the EUR 11 billion, 105 billion unit retortable food market. SIG expects to grow its retortable food business to EUR 24 million in sales in 2009 and EUR 243 million in 2014. Break-even on an EBIT level is expected in 2011. Like in aseptic food, margin levels of this new food segment are expected to be higher than in the beverage segment. Future Value Driver – Plasmax Plasmax, the plasma barrier coating solution, is expected to grow very rapidly from an anticipated EUR 52 million in 2009 to EUR 190 million in 2014. Break-even on an EBIT level is expected in 2010. Due to the attractive bottle-fee business model, Plasmax is expected to achieve margins similar to the carton business. Growth initiatives supported by dedicated cost management SIG continues to optimize its cost structure. In the second half of 2006 a new initiative has been started to significantly reduce product costs. By 2009, SIG expects to save up to EUR 57 million per annum with this program, including projects such as evaluating new compounds, reduction of raw material and process optimization. The streamlining of the European production network, a program initiated late last year, is delivering cost savings of EUR 10 million in the second half of this year. Total savings are now expected to reach EUR 21 million, compared to EUR 17 million previously planned. The full impact of this program will be visible in 2007. SIG will deliver significant value to the shareholder in the coming years • Sales growth: 2006, 2008 and 2009: CAGR of above 11%; 2007 flat due to one-off decline in German NCSD hard discount market; 2009-2014 CAGR of ca. 8% • EBITDA: 18-19% long term sustainable margin as from 2007; 17% higher than analyst consensus in 2008 with EUR 275 million (equals a margin of 18.5%) • EBIT: SIG long term sustainable margin in excess of 9.5%; SIG Combibloc margin to stay above 10% • Capex: Ca. EUR 152 million per annum through 2009 • ROCE: To increase from 14.8% in 2005 to 25.5% in 2009 Download Media Release 061025 including key figures News overview >> |
