SIG - HALF-YEAR STATEMENT 2005 

SIG strategically on track - European market conditions and raw material prices impact operating results - Group net profit increased...!

In the first half of 2005, SIG continued its rigorous strategic focus on the sectors of beverage cartons and value added bottling. Closing of the announced divestments is planned in the course of the second semester. Driven by the concentration on core business, the structures of both the Group and the Corporate   Center  have been streamlined and the corresponding costs significantly reduced. Also on track is the functional reorganization of SIG Combibloc, which is oriented towards future growth and increased efficiencies.

Operations of the largest division SIG Combibloc (beverage cartons) were marked in the first semester 2005 on the one hand by promising developments in future growth markets in Eastern Europe, the Far and Middle East as well as in Southeast Asia , and on the other hand by the continuing difficult economic environment in Germany , the main market. Net sales in Germany  fell by around 3%, despite having maintained market share, whereas in non-European markets, sales rose by more than 20%. Despite the on-going weak market situation in Germany  and continuing pressure on prices, the divisions net sales increased by 2% to EUR 532 million (2004: EUR 522 million) in the first semester. In terms of net sales of packaging materials, the increase was 3.4%, and in numbers of packages sold, growth was even 10.2%. Here again it was the growth markets that outstripped the traditional ones. In China , for example, the volume of packaging sleeves sold rose by more than 45% over the previous year.

Caused by cumulative external factors, SIG Combibloc operating profit (EBIT) fell by 13% to EUR 54 million (2004: EUR 62 million). Historically high prices for polyethylene alone impacted operating profits by some EUR 16 million, representing a reduction in margins of around 3% compared to the first semester 2004. Thanks to cost-cutting measures implemented earlier and now already taking effect, the operating margin remained above 10%.
Net sales of the SIG Beverages division (value added bottling) fell off by 17% to EUR 54 million (2004: EUR 65 million), whereas by contrast, order intake was held at the previous year's level. The Operating profit (EBIT) of the division remained balanced (2004: EUR -6 million) despite major product innovations such as Plasmax and the significantly lower net sales volume.

At Group level, the markedly improved financial profit stemming from positive exchange  rate factors and higher financial income as well as lower tax rates in the first semester resulted in a net profit of EUR 38 million (2004: EUR 25 million). This represents an increase of 52% over the year on year period.

The market situation in Germany  and the high price levels of raw materials will not improve significantly in the short term. Consequently, we assume that the second semester will settle at the level of the first half, both in terms of net sales and operating profit. The positive one-off effect on financial profit will likely lapse in the second half. 
On the other hand, net financial debt will decrease markedly as a result of the expected divestments.

Key figures in EUR million

 

	Continuing 1)			SIG Group 2)
	1st half of 2005	1st half of 2004		1st half of 2005	1st half of 2004
Order intake	588	599	- 2%	742	890	- 17%
Net sales	574	576	0%	751	898	- 16%
Operating profit before depreciation & amortization (EBITDA)	94	102	- 8%	98	112	- 13%
Operating profit before goodwill amortization (EBITA)	47	58	- 19%	51	61	- 16%
Operating profit (EBIT)	47	51	- 8%	51	50	2%
Profit / loss	39	32	22%	38	25	52%
Free Cashflow	- 4	33	n.a.	- 30	- 1	n.a.
Number of employees (full time equivalents)	4 746	4 964	- 4%	6 438	6 832	- 6%

¹SIG Combibloc, SIG Beverages (without Discontinuing Business), Corporate/Services, Eliminations

²The comparability of the presented figures with the prior year figures is difficult due to divestment of SIG Pack and parts of
SIG Beverages.

 

	Order intake		Net sales		EBITDA		EBIT
Divisions (in EUR million)	1st half of 2005	1st half of 2004	1st half of 2005	1st half of 2004	1st half of 2005	1st half of 2004	1st half of 2005	1st half of 2004
SIG Combibloc	531	545	532	522	97	103	54	62
SIG Beverages	65	66	54	65	1	1	0	- 6
Corporate/Services	0	0	0	0	- 1	0	- 4	- 3
Eliminations	- 8	- 12	- 12	- 11	- 3	- 2	- 3	- 2
Total Continuing	588	599	574	576	94	102	47	51

 

SIG is an international provider of aseptic beverage cartons and packaging equipment for value added beverages and liquid food.

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