Case: SIG Combibloc
SIG Combibloc is a leading systems and solutions provider for aseptic packaging. Their unique technology and outstanding innovation capacity enables SIG to provide their customers with a complete range of packs, flexible filling machines and solutions for operating smarter factories, all to address the ever-changing needs of consumers.
Aseptic cartons are among the most ecologically sound packaging solutions for liquid food and beverages. During the due diligence, Quantum identified SIG Combibloc as a strategic investment due to their meaningful competitive advantage in packaging solutions. Along with a new, vibrant leadership team and streamlined sustainable supply chain processes, SIG establishes itself as a trailblazer in the packaging solutions market. SIG spends approximately 3% of sales on R&D and, in addition to the significant proprietary know-how in their solutions, SIG innovations are patent-protected.
SIG’s pioneering role in sustainable packaging was demonstrated by the launch in 2010 of EcoPlus, which resulted in a 28% reduction in carbon footprint. Furthermore, with the creation of SIGNATURE PACK, which has a clear link to 100% plant-based renewable material, SIG Combibloc puts itself at the forefront of ending wasteful and unsustainable handling of our planet’s resources. With the construction of a new plant at the Suzhou Industrial Park, in close proximity to SIG’s existing factory and recently opened Tech Centre, it will allow the realization of operational and overhead synergies, achieving a competitive advantage that few in the industry can boast.
Over the last 10 years and with presence in over 68 countries, SIG has increased its exposure to the faster growing regions of the world. The proportion of sales realized outside Europe has increased from 28% in 2009 to 57% in 2019. Revenue growth was the main driver of the increase in adjusted EBITDA from €461.5 million in 2018 to €485.4 million in 2019, accounting for a 27.2% increase in EBITDA margins. Likewise, during the last year, its stock performance has increased 53% having earnings per share dividend of $0.31. Besides, core revenue increased by 5.2% at constant exchange rates, comfortably within the target range of 4% to 6%. Similarly, Net working capital as a percentage of total revenue increased from 6.8% in 2018 to 8.4% in 2019.
SIG Combibloc also uses 100% renewable energy in their production process, offsetting the rest of the energy needed to produce their packaging. Quantum EQT believes that SIG is poised to have additional upside and value added organic growth due to its strong financial fundamentals, packaging technology and robust global expansion strategies. Quantum considers that responsible, technology driven sustainable companies like SIG are well positioned to capture the benefits in an ever-changing business industry and society.