Presentation Slides

SIG COMBIBLOC GROUP AG
Recommendation SELL
CFA Institute Research Challenge | Romandie Final
Ex Nihilo Team
Daryna ROMASHKO | Laura RODRIGUEZ SOLER | Mircea ALEXANDRU TANASIE | Olayemi TOWOBOLA | Pierre SALMON
TEAM INTRODUCTION
MIRCEA ALEXANDRU TANASIE LAURA RODRIGUEZ SOLER PIERRE SALMON

+39 3491 462494 +34 658 12 19 16 +33 6 17 06 58 22
Mircea.Tanasie@etu.unige.ch Laura.Rodriguez.4@etu.unige.ch Pierre.Salmon@etu.unige.ch
OLAYEMI TOWOBOLA DARYNA ROMASHKO

+41 78 724 15 28 +38 093 128 3153
Olayemi.Towobola@etu.unige.ch Daryna.Romashko@etu.unige.ch
2
Company & Industry Overview | ESG Analysis | Market Risks | Financial Analysis | Financial Valuation | Investment Summary
SELL RECOMMENDATION
VALUATION DATE
28.11.21
SELL CURRENT PRICE CHF 24.61

-7.81%
TARGET PRICE CHF 22.79
Source: Company Data

3
Strong client-centrality creates long term partnerships and pushes global

expansion
Partnerships with blue chip

Product porfolio
companies
Food industry Sleeves & Closures

(Sales)
88%
Liquid Dairy Filling Lines

(Machine Sales or Loan)
6%
Non-Carbonated soft-Drinks
Services
(After-Sales Services)
6%
Established markets
Source: Company Data, Teams Analysis

4
Key drivers predict a stable growth
Key drivers 7 years forecast: aseptic cartoons sales (in B€)
Demand for 93
Sustainable 85
Products +9,5% 77
71
65
59
54
49
At-home 9,5 %
Consumption Annual growth
Demand for
Dairy product
2020 2021 2022 2023 2024 2025 2026 2027
Source: IM (2021)
5
Global market share
Market Share Distribution 2020 Global Market Share Distribution between 2020 and 2025
Others
21% 25% 28% 31% 33%
12,0% 36%
21,0%
67%
64% 62% 59% 57% 54%
67,0% 12% 11% 11% 10% 10% 10%

2020 2021 2022 2023 2024 2025
SIG Tetra Pak Others

SIG Tetra Pak Other
Source: IM (2021), Tetra Pak Data, Team analysis

6
Industry average player with high environmental performance
Refinitiv ESG Industry Scores SIG Combibloc ESG historical scores
E –> A
100
S –> B -
G –> A
B+ 90
80 B+
B+ B+
70 74,79
60 67.14 67.07
SIG 50
Combibloc
40
30
20
10
0
2018 2019 2020
D- D D+ C- C C+ B- B B+ A- A
Source: Refinitiv Datastream

7
Environmental impact under control
WASTE MANAGEMENT STRATEGICALLY CONTROLLED GHG EMISSIONS IN A GOOD PATH
Change in waste rate for pack production (% change from 2014 baseline) Scope 1, 2 and 3 GHG emissions rate (grams C02 equivalent/litre of food packed)
108.00
5.7%
4.0%
98.00 98.00 97.00
0.0%
2014 2015 2016 2017 2018 2019 2020 2021 90.00
-1.6%
-5.2%
2016 2017 2018 2019 2020
-8.7%
In 2020 Scope 2 GHG is 0
DISPOSAL PRODUCTION WASTE
99% Reused or recycled

0,4% Energy Recovery
0,6% Landfill
Source: Company source, Team Analysis

8
Concerning trends in human capital and raw materials suppliers
Human Capital policies worsen Under audited suppliers
Decrease in training hours - 42% since 2015

SIG Combibloc Greenhouse Gas Footprint
Decrease in salary per employee

6
5% SOURCING +
EXTRACTION 9 8% 12% 6%
%
€1,111.44
- 12,96%
90% high-risk suppliers NOT audited
€1,054.85
in 2020
€983.92
2018 2019 2020
Source: Team Analysis, Company Data

9
Key leadership positions changed but not for a better structure
56%
New composition Board of Directors

43%
Improvement in nationality mix
Women ratio < 30 %
22%
20% 20%
New composition Executive Committee
10%
5/7 appointed between 2020 - 2021

Gender ratio Nationality mix Percentage of 64.2%
new directors
SIG SMI averge
Source: Schilling report 2020

10
Key risks to our recommendation
Risk matrix
High
Raw material price risk

Medium
Impact
Potential Slowdown in Foreign Exchange risk Interest rates risk

Consumption
Taxation risk GHG emissions Impact of new Covid

restrictions
Low
Low Medium High

Probability
Source: Team analysis

11
Huge increase in the raw materials price and volatility
Use of raw materials for one carton package Daily U.S. price of Lumber 2019-2021 (USD)
$1,800.00
Synthetic Polymers Aluminum $1,600.00

+239%
10,0% 10,0%
Unknown $1,400.00
Increase in cost of
5,0% lumber since April
$1,200.00
2020
$1,000.00 945$
$800.00
+25%
$600.00 Expected
increase of costs
$400.00
280$ for raw materials
for SIG during
75,0% $200.00
2022
Wood Fiber/Cartons $0.00
Apr 2020 Dec 2021
Source: Statista 12
Risk of a higher increase in interest rates
Core Revenue distribution by Region (2021-Q3) Interest Rate Actual and Forecast : 2020-2022 (in %)
12
MEA
11
10,00%
Americas 10 AMERICAS
19% 9
EUROPE 8
35% 7
EUROPE 6 8,00%
MEA
APAC 5
Americas 4 APAC
3
2 2.00%
APAC
1
34%
MEA 0
EUROPE
12% -1
2020 2021F 2022F
Interest rates in Brazil increased by 8% during 2021
Source: Goldman Sachs Economics Research and World Bank

13
Historical performance shows low operating performance
Net income waterfall as of 2020 (in m€) Financial management KPIs metrics
21.7% 9.47% 3.74%
€424m €172m €67.7m

Gross Profit Margin Operating Profit Margin Net Profit Margin
Note: The value of the Adjusted net income is 345,7

M€ which represents 19% of SIG 2020 sales.
Costs
Source: IM (2021)
Source: Company Data, Teams Analysis 14
A Growth heavily impacted by expenditures

Analysis of the components of the net income evolution (2020A-2025E)
18,82%
5,52% 18,44%
12,35%
6,00%
6,30%
Revenue COGS CAGR Operating expense Interest expense Tax expense Net income
CAGR (2020-2025) (2020-2025) CAGR (2020-2025) CAGR (2020-2025) CAGR (2020-2025) CAGR (2020-2025)
Source: Team Analysis, Refinitiv,, Aswath Damodaran,, Company Data

15
SIG is expected to be more profitable in the next years

EBIT bridge Analysis
EBIT Margin is expected to increase overtime But (adjusted) EBITDA is expected to decrease
-4,3%
-6,5%
+19,4% 27,44%
25,67%
24,76%
2,00% 23,70%
6,00% 6,30% 11,31%
Adjusted EBITDA margin

EBITDA margin
9,47%
2020A 2025E
EBIT margin COGS CAGR SGA growth DA growth Ebit margin
(2020) [2021-2025] [2021-2025] [2021-2025] (2025) Observation : Adjusted EBITDA is more sensible
to the increase of expenditures
Source: Team Analysis, Refinitiv,, Aswath Damodaran

16
SIG below most of its competitors from an operational perspective

Competitor's analysis
Sales growth EBIT Margin Competitors
7,52% 12,40%
6,35% 10,06%
SIG
SIG
Competitors median
Competitors median
Sales Growth Average

(2020-2022) EBIT Margin
(2020-2022)

17
A WACC better than the industry

WACC Analysis
5,81%
-0,83%
4,98%
SIG
Packaging & Container Industry
WACC

18
An enterprise Value of 9646 M€ with a decrease of UFCF overtime

DCF Analysis
-2,4%
244
238
232
226 221 Present Value of
Futures UFCF
CAGR 18-26F
-9.4%
2021E 2022E 2023E 2024E 2025E
Source: Team assessment, refinitiv

19
SIG above most of its trading comparables in many operating metrics

DCF Analysis
Comparables
Source: Team Assessment, Refinitiv

20
VALUATION SUMMARY
Blue Sky Grey Sky Analysis
Blue sky
CHF 30.67
Blue sky scenario +24.60%
 Increasing climate awareness

Current price
CHF 24.61
Target price
Grey sky scenario
CHF 22.79
-7.81%
 Raw materials inflation
 Brazil’s interest rate increased by 8% Grey sky

CHF 14.72
-40.22%
Source: Team Analysis

21
VALUATION SUMMARY
Football Field
SIG Combibloc group AG Valuation - Range of Implied Share Prices
Discounted Cash Flow Analysis: -

€ 23.60
€ 21.76
Valuation Weighting
Precedent Transactions:
0.25
Series1
Public Company Comparable: Series2
25th to Median 0.5
DCF Value at 14.5x-18.5x Exit EBITDA Range at 5.8% WACC
€ 26.15 € 29.06
Median to 75th
LTM EV / EBITDA:
€ 31.83 € 15.31 Target Price
LTM EV / Revenue:
€ 20.49 € 7.44 Current Share Price
0.25
LTM EV / Revenue:
€ 14.56 € 5.88
DCF
52 Week Market High/Low: LTM EV / EBITDA:
€ 15.26 € 7.52
Precedent Transactions
LTM Reported P / E: € 10.77
€ 24.34
Public Company Comparables
52 Week Market High/Low
€ 24.01
€ 19.69
SIG Consensus:
Analyst Consensus
€ 28.38
€ 24.13
$0.00 $200.00 $400.00 $600.00 $800.00 $1000.00 $1200.00
Implied Share Price
Source: Company Data, Teams Analysis
22
THANK YOU FOR YOUR ATTENTION!
MIRCEA ALEXANDRU TANASIE LAURA RODRIGUEZ SOLER PIERRE SALMON

+39 3491 462494 +34 658 12 19 16 +33 6 17 06 58 22
Mircea.Tanasie@etu.unige.ch Laura.Rodriguez.4@etu.unige.ch Pierre.Salmon@etu.unige.ch
OLAYEMI TOWOBOLA DARYNA ROMASHKO

+41 78 724 15 28 +38 093 128 3153
Olayemi.Towobola@etu.unige.ch Daryna.Romashko@etu.unige.ch

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SIG COMBIBLOC GROUP AG

MIRCEA ALEXANDRU TANASIE LAURA RODRIGUEZ SOLER PIERRE SALMON

OLAYEMI TOWOBOLA DARYNA ROMASHKO

SELL CURRENT PRICE CHF 24.61

TARGET PRICE CHF 22.79

Source: Company Data

Strong client-centrality creates long term partnerships and pushes global

Partnerships with blue chip

Food industry Sleeves & Closures

Liquid Dairy Filling Lines

Source: Company Data, Teams Analysis

Key drivers predict a stable growth

Key drivers 7 years forecast: aseptic cartoons sales (in B€)

Global market share

67,0% 12% 11% 11% 10% 10% 10%

SIG Tetra Pak Others

Source: IM (2021), Tetra Pak Data, Team analysis

Industry average player with high environmental performance

Refinitiv ESG Industry Scores SIG Combibloc ESG historical scores

Source: Refinitiv Datastream

Environmental impact under control

WASTE MANAGEMENT STRATEGICALLY CONTROLLED GHG EMISSIONS IN A GOOD PATH

99% Reused or recycled

Source: Company source, Team Analysis

Concerning trends in human capital and raw materials suppliers

Human Capital policies worsen Under audited suppliers

Decrease in training hours - 42% since 2015

Decrease in salary per employee

2018 2019 2020

Source: Team Analysis, Company Data

Key leadership positions changed but not for a better structure

New composition Board of Directors

Improvement in nationality mix

Women ratio < 30 %

5/7 appointed between 2020 - 2021

SIG SMI averge

Source: Schilling report 2020

Key risks to our recommendation

Raw material price risk

Potential Slowdown in Foreign Exchange risk Interest rates risk

Taxation risk GHG emissions Impact of new Covid

Low Medium High

Source: Team analysis

Huge increase in the raw materials price and volatility

Synthetic Polymers Aluminum $1,600.00

Risk of a higher increase in interest rates

Interest rates in Brazil increased by 8% during 2021

Source: Goldman Sachs Economics Research and World Bank

Historical performance shows low operating performance

21.7% 9.47% 3.74%

€424m €172m €67.7m

Note: The value of the Adjusted net income is 345,7

A Growth heavily impacted by expenditures

Source: Team Analysis, Refinitiv,, Aswath Damodaran,, Company Data

SIG is expected to be more profitable in the next years

6,00% 6,30% 11,31%

Adjusted EBITDA margin

Source: Team Analysis, Refinitiv,, Aswath Damodaran