Annual Report 2021
CREATING
SUSTAINABLE
VALUE
CREATING
SUSTAINABLE
VALUE
Creating sustainable value
Compensation
2
8
Expanding our global presence
Accelerating climate action
14
Investing in innovation
22 New markets for SIGNATURE
Our Company
29 Letter from the Chairman
and the Chief Executive Officer
32 Our business model
34 Our strategy
40 Our responsibility
46 Our team
48 Technology and innovation
Business review
51 Regional review
51
53
55
57
Europe
Middle East and Africa
APAC
Americas
60 Key performance highlights
61 Financial review
71 Risk management
Governance
73 Board of Directors
76 Group Executive Board
79 Corporate Governance Report
104 Letter from the Chairwoman
of the Compensation Committee
106 Compensation Report
Financials
128 Consolidated financial statements
223 Financial statements of the Company
Corporate Responsibility Report
241 CR strategy and governance
263 Approach and performance
337 Performance summary
344 About our CR reporting
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Visit the report at
https://reports.sig.biz/annual-report-2021
CREATING SUSTAINABLE VALUE
EXPANDING
OUR GLOBAL
PRESENCE
Annual Report 2021 3
NEW STATE-OF-THE-
ART PRODUCTION
PLANT IN CHINA
Across Asia, millions of people are only now
starting to consume packaged food and
beverages. The rise of new consumers,
driven by increasing income, changing
lifestyles and new consumption habits,
represents a huge opportunity for aseptic
carton packaging, offering long shelf life
without the need for a cold chain.
120,000 sq m
The new plant, situated in the Suzhou
Industrial Park (SIP), opened at the end of 2020.
Suzhou,
China
Creating sustainable value
Expanding our global presence
At the end of 2020 carton production commenced at our second
plant in Suzhou, China. Most of the plant construction took place
in 2020 at the height of the COVID-19 crisis – a testimony to the
skill and determination of our local engineers.
Located in the same industrial park, the new factory will benefit from synergies
with our existing plant, which has been in operation since 2004. It is
also close to our cutting-edge Tech Centre, which collaborates with customers
on the development and implementation of innovative product concepts
and market-ready packaging solutions. Production at the plant will ramp up
over the next two years.
8 billion packs
capacity in 2024
Annual Report 2021 5
With a total investment of around €175 million, the new plant will serve
the entire Asia Pacific region, where demand continues to grow significantly.
It represents a significant increase in our Asia Pacific capacity.
+70
%
increase in China capacity
+35
increase in Asia Pacific capacity
%
The new plant will also manufacture our winning single-serve combismile
cartons which were originally introduced in China but are now available in
all regions.
The plant has achieved world-class environmental, safety and operational
performance right from the start. It has the lowest possible carbon emissions
and features photovoltaic roof panels capable of providing 1.5m KWh
of solar energy. Collected rainwater is treated and reused to save around
28,000 tonnes of tap water a year. All of this has resulted in the plant
being awarded LEED Gold certification – a high level of recognition for
green buildings.
Creating sustainable value
Expanding our global presence
REALISING FURTHER
GROWTH POTENTIAL
IN NORTH AMERICA
The next step in the expansion
of our global production
footprint is the construction
of a new plant in Queretaro,
Mexico to serve North American
markets.
€ 70 million
total investment
Queretaro,
Mexico
Annual Report 2021 7
The project began in the second half of 2021 and the plant is
expected to open in early 2023. It will enable us to build on our
strong track record of growth in North America.
Through our existing sales and service presence, we have been able to forge
strong relationships with major dairies in Mexico, a large and growing milk
market. In the USA, SIG has a well established co-manufacturing customer base
and is ideally placed to serve innovative and expanding new categories.
“We are very excited to announce this project
which will enable us to serve our North American
customers faster and more efficiently. Delivery
lead times will be reduced and we will be able to
respond rapidly to changes in demand.”
Ricardo Rodriguez
President and General Manager Americas
The plant represents a total investment of around €70 million, covering state-
of-the-art production capacity for the printing, cutting and finishing of
carton packs. It will have a highly flexible layout with a focus on ergonomics
and the environment.
CREATING SUSTAINABLE VALUE
ACCELERATING
CLIMATE
ACTION
Annual Report 2021 9
Tackling the climate emergency requires
bold and urgent action by countries and
companies – a message that came across
loud and clear at the COP26 climate
conference in 2021.
Our low-carbon aseptic cartons can be part
of the solution – offering a 28–70% lower
carbon footprint than alternative forms of
packaging.
Through our focus on sustainable
innovation, we have developed solutions
that lower this footprint even further –
starting with combibloc ECOPLUS, launched
in 2010, with a 27% lower carbon footprint
than standard SIG packaging material.
100 %
renewable energy – first in our industry
to achieve carbon neutral production.
Creating sustainable value
Accelerating climate action
Over the last five years, we have accelerated action on
climate as part of our commitment to go Way Beyond
Good for people and planet.
The industry-leading innovations in our SIGNATURE portfolio offer the
lowest-carbon solutions on the market for aseptic cartons – and sales of
these solutions are growing.
We have slashed greenhouse gas emissions from our operations by making
our packs with 100% renewable energy and becoming the first in the
industry to achieve carbon neutral production.
Annual Report 2021 11
We are leading efforts to decarbonise our value chain by linking polymers
to 100% renewable materials instead of fossil-based feedstock, and
becoming the first carton manufacturer to source aluminium certified to the
Aluminium Stewardship Initiative (ASI) standard that mandates emissions
reductions in the production of aluminium.
And we are not stopping there.
Read on to see the milestones on our journey so far and our plans to go
even further on The Way Beyond Good.
Creating sustainable value
Accelerating climate action
Our journey
to net zero
Reached the milestone
of 1 billion packs
sold with combibloc
ECOPLUS packaging
material since its
launch in 2010.
Launched SIGNATURE
Full Barrier solution
with a 45% lower carbon
footprint than standard
SIG packaging material.
2019
2018
Accelerated our
timeline for climate
action with greenhouse
gas reduction targets
approved by the Science
Based Targets initiative
as in line with the
1.5°C scenario.
Achieved carbon
neutral production
by completing the
transition to
100% renewable
energy – including Gold
Standard offsets for
natural gas use – and
installed our first
on-site solar array
in China.
Launched SIGNATURE
100 solution with a
58% lower carbon
footprint than standard
SIG packaging material.
2017
Switched to
100% renewable
electricity for
production globally.
Annual Report 2021 Offered the world’s first
aseptic cartons with
aluminium foil certified
to the ASI Standards
that mandate emissions
limits in aluminium
production.
Launched our next
generation filling
machine, designed
to offer a 25% lower
carbon footprint for
filling and packaging
processes.
13
Launch a full barrier
carton linked to
100% renewable
materials by 2025.
Cut value chain
emissions by
25% per litre of food
packed by 2030
(from 2016).
2021
Going beyond with
ambitious targets
Reduce operational
greenhouse gas
emissions
by 50% by 2025 –
and 60% by 2030
(from 2016).
Installed further solar
arrays in Brazil, China
and Thailand – bringing
our total on-site solar
capacity to 11.3MWp –
and secured real-time
wind power for our
production in Germany.
2020
Surpassed our target
to halve operational
(Scope 1 and 2)
emissions by 2025, with
a 58% reduction from
2016, well on our way
to our science-based
target to cut these
emissions by
60% by 2030.
CREATING SUSTAINABLE VALUE
INVESTING IN
INNOVATION
Annual Report 2021 15
NEXT GENERATION
FILLING
TECHNOLOGY
SIG NEO, making its debut with the
innovative combivita family-size pack, is
the centrepiece of SIG’s next generation
platform and the world’s fastest filling
machine for family-size carton packs.
18,000 packs / hour
25% carbon footprint reduction compared
with SIG’s current generation filling machines
for family-size carton packs.
Creating sustainable value
Investing in innovation
SIG’s latest filling technology innovation puts the future
needs of food and beverage producers at the forefront,
optimising output while helping to minimise costs.
SIG developed SIG NEO to deliver on six core areas:
1
3
5
Profitability
With longer production
runs, shorter cleaning times,
exceptionally low waste rates and
increased technical efficiency,
SIG NEO is designed to deliver
long-term savings and a highly
competitive total cost of ownership.
Quality
– Best-in-class sterility rates
with SIG’s innovative 360-degree
sterilising solution.
Flexibility
– Flexible filling speed to suit
production plans with 12,000,
16,000 or 18,000 packs per hour.
– Automatic volume change in less
than 10 minutes to run 500ml,
750ml or 1,000ml pack sizes.
2
4
6
Efficiency
– Highest speed and efficiency with
output of up to 18,000 family-size
packs per hour.
– 50% higher output than current
generation machines with no
additional manpower needed.
– Run cycles of 100+ hours.
– Fully automated cleaning.
Ease of use
– Highly intuitive user interface –
SIG CRUISER – operates the
entire filling line end-to-end.
Carbon footprint reduction
– Lower carbon footprint thanks
to improved waste rates
and 30% lower overall utility
consumption.
– 60% water reduction.
– 25% reduction in greenhouse
gases per filled pack.
Annual Report 2021 17
“Food and beverage producers have tight deadlines and
production and profitability goals, plus sustainability
targets and countless KPIs to meet. To fulfil all their
needs, we’ve built a world-class system that’s far more
flexible and efficient than any other on the market.”
Stefan Mergel
Senior Product Manager, Equipment
Perfectly complementing SIG NEO is SIG PACER, a new fully automated
sleeve magazine powered by a robotic arm that works alongside
customer teams to do the heavy lifting. SIG PACER takes care of detecting,
gripping and opening corrugated boxes containing carton sleeves.
Finally, SIG CRUISER completes the trio of SIG’s next generation filling
technology. This new user interface (Human Machine Interface –
HMI) makes the entire new filling line easy to operate. The highly intuitive
SIG CRUISER enables SIG customers to easily set their complete production
process and is designed to make life much easier for the operator,
while reducing the need for training and experience.
Creating sustainable value
Investing in innovation
LIVE IT UP WITH
combivita
Alongside SIG NEO, we are launching
a modern and ergonomically built pack
that’s also designed to grab attention
on retail shelves.
3 sizes
Available in 500ml, 750ml and 1,000ml,
combivita has a slanted top and wider opening
to ensure smooth and easy pouring.
Annual Report 2021 19
SIG’s combivita was developed based on extensive
consumer-centric research and provides a competitive
edge to beverage manufacturers.
Available in three volume sizes – 500ml, 750ml and 1,000ml – combivita has
a slanted top and wider opening to ensure smooth and easy pouring with SIG’s
new tethered, easy open and resealable closure, truTwist. The organic curve
on the back of combivita not only adds to its elegance, but also makes it
easier for consumers of all ages to handle.
Creating sustainable value
Investing in innovation
―
LIVE IT UP!
UNIQUE AND
CONVENIENT
―
truTwist closure
Brand new closure from SIG,
B
tailor-made for combivita.
ta
S
Slanted top
Easy pouring until the last drop.
Extra side panels in the front
E
L
Let your brand communication pop.
Enhanced functionality
Easy grip, convenient handling
for all age groups.
Increased differentiation
Stand out from the crowd on
retail shelves.
“The pandemic has fuelled a paradigm shift in
consumer habits, including working from home and
buying products in advance. As a result, the demand
for convenient family-size products and packaging
formats has grown exponentially.”
Ali Kaylan
SVP Innovation
Annual Report 2021
21
We don’t have a Planet B. Going green is no longer a
trend but a way of life. More and more consumers are
concerned about environmental sustainability and how
a product and its packaging were sourced.
The combivita carton pack has an excellent environmental footprint, with
100% of the paperboard sourced from FSC™-certified forests and 100%
renewable energy used during the manufacturing process. In addition, there
is the opportunity for combivita carton packs to be combined with SIG’s
SIGNATURE portfolio packaging material, in which the polymers are also
linked to forest-based materials.
Excellent grip
Easy opening and
E
secure closing.
s
―
truTwist: THE NEW CLOSURE
SAFE AND TETHERED
ED
―
st
Open in one twist
twis
-step o opening.
Convenient one-step opening.
Convenience click
nsures the closure
The audible click sound ensures the closure
is secure open or closed.
Sustainable
remaining
Weight-optimised design with closure remaining
on the pack after opening (tethered cap).
p).
d design with closure r
d cap
Wide opening
Smooth pouring – no spilling.
e
Safe
Clearly visible tamper
evidence.
CREATING SUSTAINABLE VALUE
NEW MARKETS
FOR SIGNATURE
Annual Report 2021 23
SIGNATURE portfolio launches in Asia and
Eastern Europe.
Uptake of our most sustainable packaging
materials is on the rise as customers look
to meet growing demand from consumers
and support moves by governments and
regulators towards a low-carbon, circular
economy.
2.1 billion litres
of food and beverages packed in SIG packs with
SIGNATURE portfolio packaging materials to date.
Creating sustainable value
New markets for SIGNATURE
Customers have now delivered 2.1 billion litres of food and
beverages in SIG packs with our combibloc ECOPLUS,
SIGNATURE 100 or SIGNATURE FULL BARRIER packaging materials.
Sales of these SIGNATURE portfolio solutions have grown by more than
21% in 2021 – bringing benefits to our business and the environment.
These solutions are well established in Western Europe, with customers
ranging from big brands and retailers to dairy cooperatives and start-ups,
and SIGNATURE FULL BARRIER has also been launched previously in
North America.
In 2021, solutions from our SIGNATURE portfolio hit the supermarket
shelves in Asia and Eastern Europe for the first time.
combibloc ECOPLUS
SIGNATURE 100
SIGNATURE FULL BARRIER
– Launched in 2010
– World’s first aluminium-free
aseptic carton packaging
material
– 82% renewable material
– 27% lower carbon footprint
than standard SIG
packaging material
– For use with dairy products
– 1.7 billion litres of food
packed with this solution
since launch
– Launched in 2017
– World’s first aseptic carton
linked to 100% forest-based
renewable material1
– Aluminium-free
– For use with dairy products
– 58% lower carbon footprint
than standard SIG
packaging material
– 200 million litres of food
packed with this solution
since launch
– Launched in 2018
– Polymers linked to 100% forest-based
renewable material1
– Ultra-thin aluminium foil barrier layer to
protect sensitive products
– For use with a wide range of products
including dairy,
non-carbonated soft drinks and water
– 45% lower carbon footprint than
standard SIG packaging material
– More than 160 million litres of food
packed with this solution since launch
1 Via an independently certified mass balance system.
Annual Report 2021 25
“The launch of new products is in line
with DPO’s vision to become the ‘National
Milk’ by 2022, aiming to provide more
opportunities for the Thai people to enjoy
high-quality dairy products. Environmental
sustainability is a core value for DPO and a
fast- growing concern for Thai consumers.
With SIGNATURE FULL BARRIER, SIG offered
us a way of differentiating ourselves from
our competition on this key issue. This
is also in line with the vision of enabling
Thai dairy farmers to run stable and
sustainable farms.”
Somporn Srimuang
DPO Director
Asian debut for SIGNATURE FULL BARRIER in Thailand
Thailand’s leading dairy brand, Dairy Farming Promotion Organization of
Thailand (DPO), has introduced a new National Milk product range in our
on-the-go carton packs with SIGNATURE FULL BARRIER packaging material.
Our SIGNATURE FULL BARRIER solution
is a natural fit for the National Milk
range, which was launched under
the slogan ‘Love Us, Save the World’.
It provides an important point of
differentiation for DPO as it responds
to rapidly changing consumer demands.
Creating sustainable value
New markets for SIGNATURE
“As part of our new positioning for Kukkonia
brand, which also includes a new identity,
we have decided to switch from PET to
carton packs to meet the growing needs and
sustainability demands of young conscious
consumers. Being the first in Eastern Europe
to launch products in SIG carton packs with
SIGNATURE portfolio packaging material is a
big first for our region.”
Tibor Balogh
Managing Director, Euromilk
SIGNATURE portfolio launch in Eastern Europe
Located in Southern Slovakia, Euromilk’s Kukkonia brand is the first
in Eastern Europe to opt for packaging materials from our SIGNATURE
portfolio.
Euromilk decided to switch from
PET bottles to carton packs featuring
SIGNATURE 100 or SIGNATURE FULL
BARRIER for various products in its
Kukkonia UHT milk range to appeal to
a younger, eco-conscious consumer.
Annual Report 2021
27
Enabling future growth
These market debuts for our SIGNATURE portfolio packaging materials in
Asia and Eastern Europe are paving the way for future growth.
Our next addition to the portfolio in 2022 is SIGNATURE EVO, the world’s
first aluminium-free full barrier packaging material for aseptic carton packs.
By offering comparable full barrier properties to our packaging materials
with aluminium foil, it extends SIG’s lower-carbon aluminium-free packaging
materials – already available for plain white UHT milk – for use with oxygen-
sensitive products like fruit juices, nectars, flavoured milk or plant-based
beverages.
As sales of these sustainable innovations grow, so too will the carbon
reductions we deliver as we drive progress on The Way Beyond Good.
28
OUR
COMPANY
29 Letter from the Chairman
and the Chief Executive Officer
32 Our business model
34 Our strategy
40 Our responsibility
46 Our team
48 Technology and innovation
Annual Report 2021
Our Company
Letter from the Chairman and the Chief Executive Officer
29
LETTER FROM THE CHAIRMAN
AND THE CHIEF EXECUTIVE OFFICER
Andreas Umbach
Chairman
Samuel Sigrist
Chief Executive Officer
We look back over a year in which SIG’s business has again proved its resilience and continued
to grow in a volatile and uncertain environment. The COVID-19 crisis continued to affect many
of our markets but globally demand was underpinned by our role as an essential industry
supplying food and beverage producers. Our teams were able to cope with additional supply
chain challenges thanks to our well diversified and localised supplier base and effective logistics
management. Deliveries to customers were made on time and our service engineers in the
field continued to overcome mobility restrictions in order to ensure flawless operations in our
customers’ factories.
Robust revenue growth and higher profitability
Core revenue growth of 6.6%1 in 2021 was above the guided range of 4–6%. The highest growth
rate came from the Americas, where performance exemplified our strategy of combining new
customer wins with an increasing share of wallet at existing customers. The strong top-line
growth was accompanied by an increase in the adjusted EBITDA margin which was achieved
despite higher raw material costs in the second half of the year. In recent years we have
demonstrated our ability to maintain best-in-class profitability in the face of foreign exchange
as well as raw material headwinds. Adjusted net income in 2021 increased to €252 million and,
in line with our dividend payout guidance of 50–60% of adjusted net income, we are proposing
a 7% increase in the dividend to CHF 0.45 per share, compared with CHF 0.42 per share for
2020. Free cash flow generation remained strong with net capital expenditure slightly below
the target range of 8–10% of revenue, thanks to relatively high upfront cash payments received
upon placement of new filling machines.
1
Like-for-like at constant currency.
Annual Report 2021 Our Company
Letter from the Chairman and the Chief Executive Officer
30
Investing in future growth
In 2021 we continued to place a significant number of filling machines with new and existing
customers across all regions. We also continued to invest in our manufacturing base. Our new
Asia Pacific plant in Suzhou, China opened at the end of 2020 and is progressively ramping
up its capacity. In April we announced the construction of another new plant – this time in
Queretaro, Mexico – which will enable us to serve our North American customers faster and
more efficiently. The plant is expected to open in the first quarter of 2023 (see story > Expanding
our global presence).
Innovation milestones in the Middle East and Africa
We are pleased to report that the integration of our Middle East and Africa business, of which
we took full control at the end of February, has proceeded very smoothly. In November, we
were privileged to attend Gulfood Manufacturing at the Dubai World Trade Centre, which is a
landmark event for food and beverage processing technology. We were able to experience first-
hand the immense energy and drive for innovation which is characteristic of the Middle East and
Africa region. The high point was receiving the award for “Top Futuristic Technology” for our next
generation filling machine SIG NEO (see story > Investing in innovation). The opening of our new
Tech Centre in Dubai, which took place on the eve of Gulfood Manufacturing, clearly signals that
we are committed to delivering a continuous stream of innovation designed to meet the needs of
customers in this region.
Sustainability at the heart of our business
The launch of SIG NEO highlights the focus on sustainability which permeates our investment
in R&D. It is not only our carton packs which can help customers to achieve their environmental
objectives. SIG NEO has a 25% lower carbon footprint per filled pack compared with SIG’s
current generation filling machines for family-size packs, due to low waste rates and reduced
consumption of water and other utilities. And we continue to broaden the appeal of our most
sustainable packs with the launch of SIGNATURE EVO, which extends lower carbon aluminium-
free packaging materials – already available for plain white milk – to oxygen-sensitive products
such as fruit juices or plant-based beverages.
Our longstanding and in-depth focus on environmental, social and governance issues is illustrated
by the range of metrics reported in this, our first combined annual and corporate responsibility
report. We are committed to the United Nations Global Compact and our business contributes to
several of the United Nations Sustainable Development Goals. In this report you can read about
our ambitious strategic priorities targeting Forest+, Climate+, Resource+ and Food+.
In 2021 we introduced a sustainability metric into our short-term incentive programme and
in 2022 its weighting will increase. We have set the benchmark high with the choice of our
EcoVadis score as the metric. We already have a Platinum ranking with EcoVadis, putting us in
the top 1% of companies covered, and we need to continuously improve in order to maintain
our position. The score covers a broad range of criteria in the areas of environment, labour
and human rights, ethics and sustainable procurement. These criteria have a bearing on many
facets of our business and touch on the work of many of our employees. Our experience has
shown that our people are not only aligned with our ESG objectives in the workplace – they
are ready to go the extra mile by implementing external sustainability projects and community
engagement programmes. In Brazil, for example, more than 100 employees completed a series
of climate-related challenges to earn points that were then converted into food for donation to
homeless people and to families affected by COVID-19.
Annual Report 2021 Our Company
Letter from the Chairman and the Chief Executive Officer
31
Diversity, culture and leadership
Over the years SIG has steadily expanded its global presence and we have more than
80 nationalities represented among our employees. Our progress on gender diversity has until
recently been slower and we are determined to remedy this, with the ambitious target of 30%
of leadership positions occupied by women in 2025. Our commitment to an inclusive culture,
to fair and equal opportunities for everyone and to enabling our employees to develop their
full potential is reflected in a new appointment to the Group Executive Board. With effect from
1 January 2022, Suzanne Verzijden has joined as Chief People and Culture Officer, bringing
16 years’ international human resources experience in a major multinational company with a
focus on people development, culture and talent topics.
In view of the growing importance of the Asia Pacific region in SIG’s business, we have decided
to move to a dual leadership structure for the region. Fan Lidong, who became President and
General Manager Asia Pacific North with effect from 1 January 2022, has 30 years’ experience
in the packaging industry and has been instrumental in driving SIG’s rapid growth in China.
Angela Lu, who joined the company as President and General Manager Asia Pacific South,
brings considerable experience in the food and beverage industry, including more than 10 years
with a key customer in Europe and Asia Pacific. Lidong and Angela take over from Lawrence
Fok, who was President and General Manager Asia Pacific until the end of 2021. We would like
to thank Lawrence for his many years’ service and for his many valuable contributions to SIG’s
development in the Asia Pacific region.
With these additions to the Group Executive Board, we have an experienced and diverse leadership
team possessing a broad range of skills which are perfectly aligned with our strategic priorities.
Looking ahead
In early 2022 we announced plans to acquire two businesses which will expand both our range
of solutions and our presence in key geographies. The acquisition of Evergreen Asia’s fresh milk
carton business gives us access to new customers in China as well as allowing us to help existing
customers expand in the fresh segment. Milk is recognised in China as an important source of
protein and as good for health – all the more so since the pandemic – and demand is growing
strongly.
The acquisition of the Scholle IPN business broadens our leadership in sustainable packaging
systems and solutions. The business comprises bag-in-box and spouted pouches, which have
many similarities to our cartons in terms of end-markets and industry structure. Scholle IPN
has for many years deployed aseptic technology which we will further develop by leveraging
our core competence in this area. We will also be able to maximise the growth potential of the
acquired business through expansion in Asia Pacific, Latin America and the Middle East and
Africa, building on our existing long-established presence in these regions.
Aseptic cartons remain a large part of our business, with robust growth prospects and a high
level of profitability. They also represent an outstanding platform which will allow us to create
significant value from these two exceptional external growth opportunities. We would like to
thank all our employees for their energy, skill and dedication in building SIG into the strong
company it is today and we look forward to working together on the exciting journey ahead.
Andreas Umbach
Chairman
Samuel Sigrist
Chief Executive Officer
Annual Report 2021 Our Company
Our business model
OUR BUSINESS
MODEL
Our unique technology and outstanding
innovation capability enable us to provide
our customers with end-to-end solutions
for differentiated products, smarter factories
and connected packs, all to address the
ever-changing needs of consumers.
INPUTS
126,366
hours of training
A focus on
diversity and inclusion
PEOPLE
~5,900
employees with
>80 nationalities
ENVIRONMENT
100%
of paperboard
purchased with
FSC™ certification
100%
renewable energy
for carbon neutral
production
the only cartons
available with ASI-
certified aluminium
FINANCIAL
€ 1,271m
property, plant and
equipment
€ 50m
net filler capital
expenditure
€ 56m
investment in R&D
OPERATIONS
8
sleeves production
plants
2
filler assembly plants
1,295
filling machines
in the field
The full interactive version of our business model can be found online at
https://reports.sig.biz/annual-report-2021/our-company/our-business-model
THE SIG DIFFERENCE
1
ENGINEERING
KNOW-HOW
2
BROAD
GEOGRAPHIC
BASE
3
PARTNERSHIPS
WITH
CUSTOMERS
Annual Report 2021 33
OUTPUTS
0.3
Lost Time Case Rate
4.8 %
voluntary turnover
rate
2.1 bn
litres of food and
beverages packed
with SIGNATURE
packaging materials
25 %
lower carbon footprint
for SIG NEO filling
machines
PEOPLE
+21
Employee Net
Promoter Score
ENVIRONMENT
All packs fully
recyclable
FINANCIAL
6.6 %
LFL core revenue growth
at constant currency
31.0 %
ROCE
€ 258 m
free cash flow
OPERATIONS
~42 bn
packs produced in
2021
>270
different packaging
options
>10,000
different products
filled
1
2
3
Our unique sleeve-based filling
technology offers our customers
unmatched volume and format
flexibility, enabling them to meet
the rapidly changing demands of
consumers. The breadth of our filling
capabilities is complemented by
consumer-centric innovation and a
focus on sustainability. Our superior
system reliability, supported by over
600 service engineers worldwide,
ensures that our customers are part
of a safe and efficient supply chain.
Originally a European business,
SIG has steadily expanded its
presence in Asia Pacific, the Americas
and the Middle East and Africa.
This expansion has contributed to
the resilience of the business by
diversifying the drivers of growth.
We operate sleeves production
plants in each of our regions. With
our globally integrated footprint and
supply chain, we are able to support
customers locally and to meet
their needs quickly and efficiently.
Our filling and packaging
technology is at the heart of our
customers’ operations. We work
in close collaboration with our
customers to develop innovative
product and packaging solutions
that meet consumer demand for
differentiation, convenience and
sustainability. We enable customers
to increase their efficiency with
solutions for intelligent, automated
and fully integrated plants. All this
results in customer relationships that
span many years or even decades.
Our Company
Our strategy
3434
GROWTH
+
T
R E S
F O
S H A P E
THE
FUTURE
C
LI
M
A
T
E
+
+
E
C
R
U
O
S
E
R
P
I
H
S
R
E
N
W
O
E
K
A
T
OUR PURPOSE
OUR
DREAM
OUR PROMISE
F
O
O
D
+
T
H
I
N
K
C
USTOMER
PEOPLE
CUSTOMER
Goin Wg A
Y BEY
D G O O D
O N
OUR STRATEGY
SIG is working in partnership with its customers to bring food products
to consumers around the world in a safe, sustainable and affordable
way. That’s our role for people and society, that’s our purpose as a
company. We want to fulfill our role for ever more people, following our
dream to see every consumer in the world with an SIG pack in their
hand and a smile on their face, every single day. A dream that drives
us to truly understand customer and consumer needs and to provide
holistic solutions for the food and beverage industry, faithful to our
promise of “Excellence – Engineered. Solutions – Delivered.”
Annual Report 2021 Our Company
Our strategy
35
OUR
DREAM
OUR
PURPOSE
OUR
PROMISE
OUR
PRINCIPLES
OUR CORPORATE COMPASS
A strategy made for growth
Our dream, purpose and promise are at the heart of our Corporate Compass –
a strategy made for growth. Founded on three clear principles – Shape the future.
Think customer. Take ownership – our Compass guides the choices we make every day.
The choices for our people who always believe in more. For our customers who can
expect to receive the “Perfect Package”, every time. For more growth in order to come closer
to our dream and to create sustainable value for our stakeholders. For going Way Beyond
Good to create food packaging that makes the world a better place.
OUR DREAM
Every consumer in the world with an SIG
pack in their hand, and a smile on their face,
every single day.
OUR PURPOSE
Working in partnership with our customers to
bring food products to consumers around the
world in a safe, sustainable and affordable way.
OUR PROMISE
Excellence – Engineered.
Solutions – Delivered.
OUR PRINCIPLES
Shape the future.
Think customer.
Take ownership.
READ MORE
Annual Report 2021 Our Company
Our strategy
36
GROWTH
CUSTOMER
PEOPLE
RESPON-
SIBILITY
GROWTH
We create sustainable value
OUR STRATEGIC PRIORITIES
Grow our core business by increasing
market share in established markets
and categories.
Win new customers by bringing choice,
differentiation and added value through our
unique aseptic packaging system.
Enter new and emerging categories
with our innovative and sustainable
packaging solutions.
Leverage the environmental benefits of
the beverage carton and SIG’s innovative
edge in sustainability.
OUR PROGRESS
Core revenue growth at constant currency:
1
Like-for-like.
OUR ACHIEVEMENTS
Our global aseptic carton share has
increased to 22% as we have won new
customers and increased our share of
wallet with existing customers.
We continue to see customers opt for more
sustainable packaging and now we are
launching SIGNATURE EVO, which expands our
aluminium-free offer.
We have won new contracts for still and
flavoured water and have expanded our
presence in plant-based milks in all regions.
We have actively stepped up our presence in
India, a market we entered in 2018, and now
have eight filling machines in place.
READ MORE
2021+6.6%12020+5.5%2019+5.2%Annual Report 2021 Our Company
Our strategy
37
GROWTH
CUSTOMER
PEOPLE
RESPON-
SIBILITY
CUSTOMER
We deliver the ”Perfect Package“, every time
OUR STRATEGIC PRIORITIES
Create Total Customer Satisfaction
and increase our Net Promotor Score (NPS)
at all touchpoints.
Continuously improve customer experience
through operational excellence by rigorously
executing the SIG Excellence System (SES).
Continuously gain market share by consistently
applying our Solution-Selling approach to
create added value for customers.
Position SIG as the industry’s innovation and
sustainability leader and win business from new and
existing customers with our innovation portfolio.
OUR PROGRESS
Net Promoter Score (NPS) – Delta to competition 1
1 SIG NPS minus NPS of next best alternative at a customer;
NPS value ranges from –100 to +100.
OUR ACHIEVEMENTS
Launch of Plant 360 Asset Health Monitoring,
a new integrated software solution that
makes it possible to turn filling line data
into insights and prevent unplanned
manufacturing downtime.
Opening the first-of-its-kind innovation Technology
Centre in the MEA region, supporting customers in
expediting new product and packaging development
at a state-of-the-art facility.
Successful start of SIGCUBATOR, SIG’s
accelerator programme for new businesses,
with the first start-up brands launching
innovative plant-based and water products.
Great success of SIG’s first ever virtual launch event
to introduce our next generation filling technology
and family-size pack: More than 100 f&b companies
and over 550 participants from all regions.
READ MORE
202140201937201738-631-1127-1030SIGDeltaCompetitionAnnual Report 2021 Our Company
Our strategy
38
PEOPLE
We always believe in more
OUR STRATEGIC PRIORITIES
GROWTH
CUSTOMER
PEOPLE
RESPON-
SIBILITY
Diversity, equity and inclusion
Creating an inclusive culture which engages
our people. Building a diverse workforce
to support our customers in diverse markets
and foster innovation by bringing different
perspectives to our business.
Employee satisfaction
Listening and responding to our people,
recognising the work they do and rewarding
performance. This helps us to sustain
high levels of job satisfaction, motivation
and engagement.
Fair labour practices
Upholding labour rights and providing fair
working conditions is a fundamental
responsibility as an employer and part of
our commitment to respecting human rights.
Talent development
Investing in employees to help them
achieve their goals and build their careers.
Creating a workforce that meets the needs
of our business now and in the future.
OUR PROGRESS
Percentage of women in leadership positions
OUR ACHIEVEMENTS
We renewed our Transformational Leaders
training programme, which now integrates
more mentoring and hands-on experience
and helps participants to put what they have
learned into practice within their own teams.
Integration of the Middle East and Africa business
began with alignment on compliance policies
and processes. Cultural integration of the
~500 employees in the region focused on change
management and employee engagement.
We launched our Women Acceleration
Programme for 16 female leaders from
around the world.
We strengthened our Human Rights, Labour
and Community Engagement Policy to more
explicitly address human rights, due diligence
and grievance processes.
READ MORE
202120%GOAL 2025201918%201717%30%Annual Report 2021 Our Company
Our strategy
39
RESPONSIBILITY
Going WAY BEYOND GOOD
OUR STRATEGIC PRIORITIES
FOREST+
CLIMATE+
Create more thriving forest than it
takes to make our products.
Continue to reduce our carbon footprint
until we capture more carbon from the
atmosphere than we emit.
RESOURCE+
FOOD+
Increase use of renewable materials and
help turn more used cartons into resource.
Strive to provide access to safe and
affordable nutrition to more people than
we ever have before.
OUR PROGRESS
Total Scope 1 and 2 greenhouse gas emissions
(thousand tonnes CO2 equivalent)
GROWTH
CUSTOMER
PEOPLE
RESPON-
SIBILITY
OUR ACHIEVEMENTS
Since 2016, we have reduced our Scope 1 and 2
emissions by 74%, and our Scope 1, 2 and 3
emissions by 20% per litre of food packed.
We launched our next generation filling machine
designed to cut the carbon footprint of filling and
packing by 25%.
Sales of our most sustainable SIGNATURE
portfolio solutions increased by 21% in 2021.
As of January 2021, 100% of the paperboard
we source is purchased with FSC™ certification –
a first for the industry.
We developed the world’s first aluminium-
free full barrier aseptic carton solution for
non-carbonated soft drinks, to be launched
in early 2022.
Customers used our packaging systems to deliver
10.6 billion litres of nutritious food and drinks that
contribute to a balanced diet and lead to better
health for people around the world (as defined by
the independent Health Star Rating System).
READ MORE
202129.8202053.92016113.1(from 2016)-74%Annual Report 2021 Our Company
Our responsibility
40
OUR RESPONSIBILITY
The Way Beyond Good
A world where everyone can feel good about where SIG packaging comes from – and where it’s
going. Our job is to find the road that leads us not merely to neutral, not merely to good – but
ever onwards. We call it The Way Beyond Good.
It’s a path that we have been on for years, since we first developed our aseptic packaging system
to store and transport food without the need for refrigeration or preservatives, in low-carbon
packs made mainly from renewable paperboard.
We have already gone much further with a host of industry firsts. Sourcing 100% of our
paperboard from FSC™-certified sustainable forests. Using 100% renewable energy to produce
our packs. And creating the first aluminium-free aseptic carton, the first linked to only renewable
materials and the first linked to post-consumer recycled content.1
That was just the start. The Way Beyond Good is long and
stretches out into a vastly more sustainable future. We will
actively regenerate our planet’s natural systems, and help
even more people enjoy access to a healthier diet.
Our next step on the way is to tackle four areas
where we can go beyond reducing impact or
mitigating harm.
FOREST+
THE
WAY
BEYOND
GOOD
RESOURCE+
CLIMATE+
SUSTAINABLE
INNOVATION &
RESPONSIBLE
CULTURE
FOOD+
1
Via an independently certified mass balance system.
Annual Report 2021 Our Company
Our responsibility
41
Forest+
SIG depends on a sustainable supply of forest-based materials now and in the future. By
sourcing all our paperboard from FSC™-certified sources, we are contributing to thriving forests
that play an essential role in tackling climate change and supporting biodiversity – both hot
topics for stakeholders. The FSC™ label on our packs enables customers to show their support
for sustainably managed forests and promotes consumer awareness and demand for other
FSC™-certified products.
As of January 2021, 100% of the paperboard we source is purchased with FSC™ certification –
a first for the industry – and we sold over 40 billion SIG packs with the FSC™ label this year
alone. Sales of SIGNATURE 100, the world’s first packaging material for aseptic cartons linked
to 100% forest-based materials1, have continued to grow. We are going further through new
partnerships with NGOs to help us support additional sustainably managed forests beyond
what we need to make our products.
Forest+ in action:
Partnering on science-based projects
We began working with Brainforest –
a Swiss for-impact Venture Studio for
forests and climate, co-founded by
WWF Switzerland and made possible
by the Migros Pioneer Fund – and its
venture Xilva AG to help us identify
potential projects that we can invest
in to support our goal to bring at
least 650,000 additional hectares of
forest into sustainable management
beyond what we need to make our
products by 2030. We are looking
for science-based projects that
are designed to create resilient forest
ecosystems that improve biodiversity
and store carbon to unlock the full
climate potential of forests.
1
Via an independently certified mass balance system.
Annual Report 2021 Our Company
Our responsibility
42
Climate+
Expectations are intensifying for business to do its part in meeting the climate emergency. We
have set 1.5°C science-based targets to cut carbon emissions from our operations and value
chain in line with the latest climate science. As customers face mounting pressure to reduce
the life-cycle impact of their products, our ability to offer a low-carbon alternative to other types
of packaging – and the lowest-carbon aseptic packs on the market – is a key differentiator and
value driver.
In 2021, we maintained carbon neutral production worldwide and made further strides
towards our science-based targets. By the end of the year, we had reduced our Scope 1
and 2 emissions by 74%, and our Scope 1, 2 and 3 emissions per litre of food packed by 20%
from 2016. We increased sales of our lowest-carbon packs in our SIGNATURE portfolio by 21%
this year, developed the world’s first aluminium-free full barrier aseptic carton solution for non-
carbonated soft drinks, and launched our next generation filling machine that is designed to cut
the carbon footprint of filling and packing by 25%. We remained the only carton producer to
source aluminium certified to the Aluminium Stewardship Initiative (ASI) standard that supports
decarbonisation of the supply chain.
Climate+ in action:
Building renewable energy capacity
Our switch to 100% renewable
energy at our production plants –
an industry first – has already
avoided over 510,000 tonnes of CO2
equivalent over the last five years.
New solar arrays at our production
plants have more than doubled
our total on-site solar capacity in
2021 and a new power purchase
agreement will deliver real-time
power from two wind turbines to
our production plants in Germany.
Annual Report 2021 Our Company
Our responsibility
43
Resource+
Fully recyclable and made mainly from renewable materials, our packs are well suited to support
the transition to a circular economy and help customers meet growing regulations in this area.
Industry-leading innovations in our SIGNATURE portfolio further reduce the use of fossil-based
resources with aluminium-free options and polymers linked to 100% renewable materials
or post-consumer recycled plastic.1 We are also partnering with others on the industry-wide
ambition to increase beverage carton recycling rates.
Uptake of our SIGNATURE portfolio and paper straw solutions continued to grow in 2021. We
developed our first aluminium-free full barrier packaging material and our first tethered cap
solution. Through our partnerships, we have invested in facilities in Germany – which opened
this year – and Australia to increase capacity for recycling the materials in used beverage cartons.
In Europe, we have committed to the 10 industry targets set out in the new roadmap for 2030
from the Alliance for Beverage Cartons and the Environment (ACE). We are also expanding
successful collection programmes in Brazil, introducing a similar community recycling model in
Asia, and supporting consumer awareness and collection programmes across all our regions.
Resource+ in action:
Committing to boost recycling rates
We are fully committed to the new
ACE 2030 roadmap for the industry
in Europe that includes commit-
ments to increase the collection
rate to 90% and the recycling rate
to at least 70% for used beverage
cartons in Europe by 2030, produce
beverage cartons only from
renewable or recycled materials,
deliver the lowest carbon footprint
packaging and decarbonise the
industry’s value chain.
1
Via an independently certified mass balance system.
Annual Report 2021 Our Company
Our responsibility
44
Food+
SIG’s purpose is to partner with customers to deliver food in a safe, sustainable and affordable
way to people around the world. Our packaging system is ideal for preserving milk and
other nutritious beverages and liquid foods over long periods of time without the need for
refrigeration. This means we are well placed to help customers respond to the dual challenge
of getting nutrition to people in emerging markets who need it most and meeting growing
consumer demand for healthy food in developed markets.
In 2021, we maintained robust food safety standards with ISO 9001 and BRCGS AA certification
at all our plants, minimised food loss for customers with our industry-leading waste rate of less
than 0.5% for filling, and enabled more start-ups to deliver new nutritious food products through
our SIGCUBATOR programme. Customers used our packaging systems to bring 10.6 billion
litres of nutritious food and drinks that contribute to a balanced diet and lead to better health
for people around the world (as defined by the independent Health Star Rating System).
Food+ in action:
Supporting start-ups with SIGCUBATOR
Our SIGCUBATOR programme
enabled start-up Tiptoh to launch a
new range of nutritious pea protein
beverages on the Belgian market
this year. Tiptoh partnered with SIG
and our customer Olympia Dairy
to fill its product on SIG machines
at Olympia Dairy’s factories using
packs with our SIGNATURE FULL
BARRIER solution.
Annual Report 2021 Our Company
Our responsibility
45
Enabling The Way Beyond Good
Our focus on sustainable > Technology and innovation is driving progress in all four action areas
and delivered further breakthroughs this year. And our long-standing commitment to responsible
culture underpins our Corporate Compass and The Way Beyond Good – from developing a
diverse and talented > Our Team and keeping our people safe to sourcing responsibly, managing
environmental impacts, supporting communities and upholding high ethical standards.
We know that there are significant challenges to be overcome on The Way Beyond Good. But by
striving to get there, we can play a significant role in shaping a more sustainable food system,
through packaging solutions that truly deliver a net positive outcome for both people and
planet – while creating sustainable value for our business over the long term.
That’s what we can achieve, as we move ever onwards. So that one day, we can look back and
say, with pride: we went a long way beyond good.
Find out more about our approach and performance on The Way Beyond Good in our
> Corporate Responsibility Report.
100%
liquid packaging board
purchased with FSC™ certification
(as of January 2021)
98%
of SIG packs sold in 2021
carried the FSC™ label
100%
renewable energy for
production since 2018
<0.5%
industry-leading waste rate
for filling machines
Annual Report 2021 Our Company
Our team
46
OUR TEAM
The best place to turn your dreams into reality
We aim to create an environment where all of our approximately 5,900 employees worldwide
feel free to believe in more by helping SIG to explore new paths and create the future. We believe
that by fostering an inclusive culture, supporting fair and equal opportunities for everyone and
creating a working environment free of biases, we enable our employees to develop their full
potential and to feel recognised and rewarded.
Talent development
SIG offers a wide range of careers, which are as individual as our people. We aim to match the
skills of each employee to the opportunities within the Company and to continuously improve
the way we address employee needs. We undertake to give every employee the chance to take
part in internal or external training programmes, coaching and mentoring, plus on-the-job
learning experiences. All up-skilling and development requirements are identified as part of the
review and feedback process throughout the year. We identify talents that we need to foster
as well as gaps in our succession pipeline that we need to fill. The idea behind our talent and
succession management is to establish frameworks, processes, tools and skills to systematically
and effectively identify, manage, actively develop and retain employees with high performance
and potential. We adapt our talent advancement approach to specific career paths in order to
prepare our talents for success in their targeted future role.
Our leadership programmes provide intensive training in the SIG Leadership Model so that
transformational leadership becomes our common leadership philosophy – inspiring and
empowering others to continuously learn, innovate and grow.
Employee satisfaction
By creating an engaging and energising working environment, we aim to enable our employees
to unfold their full potential and to improve their workplace experience. By listening to them
and responding to their views, we help to sustain high levels of job satisfaction.
To further foster engagement, we give our employees a voice in our biennial Employee
Engagement Survey and in the implementation of concrete improvement measures in their
area of responsibility, scope of influence and direct working and team environment. We also
engage employees in the business through virtual questions to SIG, town-hall meetings and
smaller group sessions with SIG C-Level executives. Our new Employee Value Proposition (EVP),
”Believe in More“, encourages our employees to create what’s next, inspire real change and
make a positive impact. With the launch of the EVP, we have refreshed our career website and
the look and feel of our social media channels. In 2021, we started an initiative to expand our
”We believe in more“ culture externally through social media postings by our employees who
believe in our culture and who are brand ambassadors. We have launched LinkedIn Life on
our SIG pages for all the regions where SIG operates, providing a glimpse into the lives of our
employees and putting emphasis on our values and culture.
To ensure that our employees feel motivated and energised at work, we are implementing
measures that support a healthy work-life balance. We offer employee benefits reflecting the
regional, legal and cultural context. These include retirement benefits, health and life insurance,
flexible work arrangements (e.g. part-time positions, working from home where possible) and
Annual Report 2021 Our Company
Our team
47
parental benefits and leave. We remunerate employees in line with existing market practices.
We benchmark our compensation approach against other companies to ensure that our
compensation packages are competitive in each of our markets. The Company ensures that
performance is recognised and rewarded in a fair and transparent manner.
Employment and labour rights
The SIG Code of Conduct addresses ethical and legal principles in general, whilst the SIG Business
Ethics Code sets out more specific principles regarding employment and labour rights. Employees
are encouraged to report any violation of the principles through the SIG Ethics and Compliance
Hotline or any other available channel. As part of our Sedex (Supplier Ethical Data Exchange)
membership, all our production sites undergo SMETA (Sedex Members Ethical Trade Audit)
four-pillar audits every two years. Moreover, we conduct assessments of our global policies and
performance by EcoVadis.
Diversity, equity and inclusion
We believe that by fostering a more inclusive culture, empowering people with different
abilities and supporting equal opportunities, we can add value to our business, improve the
lives of our employees and make a significant contribution to society. We have established a
diversity, equity and inclusion strategy with an overarching vision and set targets to improve
our gender equality. One of our main priorities is to improve gender balance in our traditionally
male-dominated industry by attracting and developing more women, particularly in leadership
roles. We are doing this by cooperating with universities to attract female engineers, making
our recruitment process more attractive to women and minorities, and defining requirements
in our career development processes to help us select the best candidates from a diverse pool
of internal and external applicants. In addition, we are creating a working environment that
strengthens our ability to attract and retain women, for example by offering more flexible
working options where feasible.
Our leaders have been trained to recognise their unconscious biases and to create relevant
conditions to foster diversity and inclusion by actively driving change. The Company is fully
committed to preventing discrimination on any grounds, and we have publicly committed to
promoting diversity throughout our organisation as a signatory of the German Diversity Charter
(Charta der Vielfalt).
In our last Employee Engagement Survey, the vast majority of respondents agreed that the
Company is perceived as an open-minded organisation with a broad diversity of employees.
“My readiness to learn has always been
encouraged and rewarded. That’s why
I know I can keep on developing to
become the first-ever female Specialized
Production Operator at SIG.”
Adrianne Pelrussolo
Production Operator, Brazil
Annual Report 2021 Our Company
Technology and innovation
48
TECHNOLOGY AND
INNOVATION
Excellence – Engineered. Solutions – Delivered.
Our innovation capabilities enable us to address multiple customer needs and to respond to
fast-changing consumer trends. We draw on the unmatched flexibility of our system to create
modular solutions which give customers the optionality they need. We spend approximately 3%
of sales on R&D and our innovations benefit from patent protection.
Our unique technology
The unique advantages of the SIG offer lie in our proprietary filling technology and sleeve-based
system. We offer a range of packaging formats, volumes and opening solutions, providing
our customers with more than 270 packaging options. Taking advantage of our differentiated
filling capabilities, customers currently fill more than 10,000 food and beverage products into
our packs. The flexibility of our system limits changeover downtime and results in better asset
utilisation and a lower total cost of ownership for many customers. As well as a high level of
reliability, our system offers low waste rates for both the packaging and the finished product.
Expanding our R&D footprint
We have steadily expanded our global R&D network which began with the Tech Centre in
Linnich, Germany. In 2018 we opened our Tech Centre in Suzhou, China, which is enabling us to
respond faster to the typically rapid innovation cycles in the APAC region.
In 2021 we added another Tech Centre, this time in Dubai to serve the Middle East and Africa
region. This Centre opens up new opportunities for the food and beverage industry through
innovative technologies for processing and filling. The Centre’s innovative quality measurement
system, advanced testing equipment and future digital technology capacities allow faster
development and validation of new products and packaging.
Bringing new nutrition solutions to market
The new Tech Centre in Dubai is an additional base for SIG Accelerator and SIGCUBATOR,
two turnkey solutions that fast-track innovative ideas to market, offering support for existing
customers and food and beverage start-ups. These programmes bring SIG’s expertise, filling
capabilities and industry network to new talent and innovative concepts. Small companies,
start-ups and entrepreneurs often do not have sufficient volume to produce large batches with
co-manufacturers. By testing and commercially filling their products in SIG’s combiLab, they can
prepare and launch their products into the market.
More than
10,000 food and beverage
products
Annual Report 2021 Our Company
Technology and innovation
49
Benefits for customers and the environment
Next generation filling technology
Our new SIG NEO filling machine launched in November brings a range of operational and
environmental benefits to customers (see story > Investing in innovation). With a speed of up to
18,000 packs per hour, SIG NEO is the world’s fastest filling machine for family-size carton packs.
It also has a 25% lower carbon footprint per filled pack compared with SIG’s current generation
filling machines for family-size packs, due to low waste rates and reduced consumption of water
and other utilities.
More than
270 packaging
options
3 Tech
Centres
Enhanced sustainability formats
We enable customers to respond to growing environmental concerns by offering fully renewable
packaging. We launched the industry’s first aluminium-free solution – ECOPLUS – in 2009,
followed by SIGNATURE 100 in 2017, the world’s first ever carton pack entirely linked to plant-
based materials (see story > Accelerating climate action). We are also able to replace fossil-
based polyethylene with plant-based material via a mass-balance system and we were the first
company to offer beverage cartons with circular polymers made from recycled post-consumer
plastic waste.
SIGNATURE EVO: Aluminium-free packaging with full barrier protection
ECOPLUS and SIGNATURE 100 are both for use
with dairy products only. Our ambition was to
develop an aluminium-free pack that maintains
the full barrier properties required to preserve
oxygen-sensitive products such as juices. With the
launch of SIGNATURE EVO in early 2022, we have
achieved this ambition. SIGNATURE EVO offers a
full barrier aluminium-free solution for both liquid
dairy products and non-carbonated soft drinks –
and it is available in portion-pack sizes. Later in
2022, it will also be available as SIGNATURE EVO
100 with the polymers linked to forest-based
renewable material.
Annual Report 2021 50
BUSINESS
REVIEW
51 Regional review
51
Europe
53
Middle East and Africa
55
APAC
57
Americas
60 Key performance highlights
61 Financial review
71 Risk management
Annual Report 2021 Business review
Regional review
51
REGIONAL REVIEW
Europe
Core revenue1
€735m
Introduction
LFL growth at
constant currency
+2.1%
Europe is the historical core of SIG’s aseptic carton packaging business, which originated in
Germany. Our largest sleeves production plant globally is in Linnich, where we also assemble
filling machines and conduct R&D and consumer trials. Sustainability and the development of
new categories have become increasingly important as drivers of the business.
SIG realises revenues in many countries across Europe, which is now reported as a separate
region (previously included in EMEA).
2021 overview
At-home consumption in Europe – a new normal?
A large portion of our business in Europe consists of litre packs which are suited for at-home
consumption. In 2021, although the stockpiling effects experienced in 2020 at the onset of the
COVID-19 crisis did not recur, we continued to benefit from a relatively high level of demand as
people continued to work from home. This demand related not only to liquid dairy products
used to prepare beverages in the home but also to our food business, with households and
families eating more meals together.
Performance highlights
Meeting customer needs in Europe
The growth in our business does not merely reflect favourable consumption trends in the region.
It also reflects the flexibility of our packaging system and an attractive total cost of ownership,
as well as our focus on customer service and the leading sustainability credentials of our packs.
These have enabled us to consistently win new customers and to increase our share of wallet
with existing customers.
1
The sum of core revenue of EMEA for the first two months of 2021 (€119 million) and core revenue of Europe
for the last ten months of 2021 (€616 million).
Annual Report 2021 Business review
Regional review
52
French family business Triballat Noyal recently opted for SIG technology for its standard
product ranges and has also launched a new brand of drinks called Pâquerette & Compagnie
to meet consumer demand for healthy and innovative beverages using high-quality, locally
sourced ingredients. Three drinks made from 50% cow milk and 50% plant-based ingredients
(oat, almond and hazelnut) are filled in SIG’s combiblocMidi 750 ml carton pack. Tribillat also
launched five new variants for its Sojasun range of flavoured soy drinks.
The roll-out of combismile in Europe gathered pace with Danone’s launch of a new range of
flavoured waters under the Volvic brand. The choice reflects both the favourable environmental
profile of cartons in general, and the consumer convenience and premium appearance of
combismile.
Also in France, we saw the supermarket chain Intermarché launch 100% pure apple juice in
SIGNATURE packaging under the Merci brand, which supports farmers and the environment.
SIGNATURE, using certified plant-based polymers, offers an opportunity to reduce the use of
virgin plastic and complements the positioning of the brand.
Consumer demand for more sustainable products is now also escalating in Eastern Europe.
Euromilk, located in Southern Slovakia and a long-standing SIG customer, became the first
company in Eastern Europe to launch products in SIGNATURE carton packs. Euromilk decided
to switch from PET bottles to carton packs for its Kukkonia UHT milk brand, to appeal to younger,
eco-conscious consumers.
The revival of the ice tea market in Europe has been driven by a new target group of close to
8 million teens and young people. This group is highly conscious of environmental issues, and in
2021 Coca-Cola’s Fuze Tea in the Netherlands became the first brand in its category to switch to
more sustainable carton packs by using SIGNATURE packaging material.
Looking ahead
In 2020 we announced that Hochwald, a leading German dairy cooperative, has chosen SIG as
its preferred partner for a new dairy production site, supplying 15 new filling machines. Most
of the filling machines were installed in the course of 2021, ready for production to commence
early in 2022.
Innovation has been a key factor in further strengthening SIG’s relationship with its customers.
In September the Company announced a €12 million investment in a new Tech Centre Europe to
be located close to the Linnich plant. The new pilot plant will host state-of-the-art extrusion and
filling technology and will increase speed to market for new packaging solutions and materials.
The new Tech Centre Europe
will accelerate new product
and packaging development,
enhancing SIG’s sustainable
packaging solutions and
supporting customers
with complete end-to-end
product launches.
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Business review
Regional review
53
Middle East and Africa
Core revenue1
€252m
Introduction
LFL growth at
constant currency
+0.8%
Above-average growth potential in the Middle East and Africa (MEA) region comes from the
young and growing populations in countries where GDP per capita is on the rise. Urbanisation
and disposable income growth are also industry drivers. Changing lifestyles and consumption
habits favour processed and packaged food where our aseptic carton packaging solutions play
an important role. As household incomes remain low in many countries, the ability to provide
affordable solutions is also a key success factor.
2021 overview
Since the end of February 2021, the MEA business has been fully consolidated within the SIG
group. The business continued to seize new opportunities and win new orders despite the
ongoing impact of COVID-19, with consumption of non-carbonated soft drinks affected by
lockdowns, school closures and generally lower social interaction.
Performance highlights
In 2021, SIG celebrated 20 years’ presence in the MEA region. Starting from scratch in 2001, SIG
now has a market share of over 25% with more than 70 customers. In 2021 our plant in Riyadh,
which was established in 2005, became the first SIG plant to achieve ISO 45001 certification.
We placed our first food filling machine in the region in 2021, with Arla Foods Saudi Arabia. This
is the first time that Arla has produced and filled its food portfolio in aseptic carton packs locally.
SIG’s CFA 812 aseptic food filling machine provides a range of formats and volumes together
with unmatched flexibility – volume changes can be made in just two minutes. The packs will be
used to fill a variety of soups and sauces.
“We are always looking for new
and innovative ways to improve
our product offering.”
Henrik Lilballe Hansen
Vice President, Managing Director of Arla Foods, KSA
1 Core revenue for the last ten months of 2021 (since acquisition).
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Henrik Lilballe Hansen, Vice President, Managing Director of Arla Foods, KSA: “We are always
looking for new and innovative ways to improve our product offering. Choosing aseptic carton
packs from SIG ensures we stand out on shelf and provide our MENA consumers with highly
convenient, attractive and sustainable packaging solutions.”
We entered into an agreement with Lactalis-Halawa, a major producer of dairy products in
Egypt with a presence across all dairy categories. Lactalis-Halawa will fill various products under
the brands “Lactel” and “Santal” in different formats and volumes, using a single machine. We
also entered into a project with Baladna, the leading dairy and beverage producer in Qatar, to
add white cheese to its growing product portfolio in partnership with SIG.
A growing focus on sustainability in several countries is driving interest in cartons as a more
sustainable form of packaging. And the sustainability of our filling system goes beyond just
the cartons. By utilising SIG’s water-saving technology in its filling lines, Algerian milk producer
Tchin Lait was able to cut operating costs and reduce environmental impact.
The Gulfood Manufacturing annual event and award ceremony returned live in November at Dubai
World Trade Centre and attracted a large number of food manufacturing industry connoisseurs.
SIG received the “Top Futuristic Technology” award for its next generation filling machine, SIG NEO
(see > Investing in innovation).
On the eve of the Gulfood Manufacturing event, SIG inaugurated a first-of-its-kind innovation
Technology Centre in the MEA region, at Dubai Silicon Oasis (see > Technology and innovation).
The Centre has been granted a Platinum LEED certification by the Green Building Certification
Institute (GBCI). LEED provides a framework for healthy, highly efficient and cost-saving green
buildings, and LEED certification is a globally recognised symbol of sustainability achievement
and leadership.
Looking ahead
SIG’s business in MEA covers 17 countries. And yet the region comprises 70 countries, offering
significant scope for expansion. SIG’s experience in establishing a business in new markets will
support growth in the region, with expansion projects already underway in Iraq, Turkey and
Mauritania.
SIG was awarded “Top Futuristic Technology” at
the Gulfood Manufacturing award ceremony for its
next generation filling machine, SIG NEO. In 2021,
the annual event and award ceremony returned
live in-person at Dubai World Trade Centre.
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55
APAC
Core revenue
€691m
Introduction
LFL growth at
constant currency
+8.2%
Asia Pacific has long been a strategic focus for SIG and we now have three sleeves production
plants and a Tech Centre in the region. Strong market fundamentals include growing populations,
rising disposable incomes, urbanisation, a focus on convenience and – increasingly – health and
sustainability awareness.
2021 overview
The APAC region showed solid growth in 2021 despite the ongoing effects of COVID-19 in a
number of South-East Asian countries. Although many of the products we sell in the region are
for on-the-go consumption which has been affected by the pandemic, we were able to achieve
growth through the efficiency and flexibility of our system, our focus on innovation and the
sustainability of our packs.
In China, the economy continued to recover steadily. An increasing interest in healthy nutrition,
which was only intensified by the pandemic, led to strong demand for white milk.
Performance highlights
Our new plant in China was operational from the end of 2020 and will enable us to meet the
long-term growth in demand forecast for the region (see > Expanding our global presence).
In China we were able to win new liquid dairy customers including Yeo’s, Shanhua, Yiming and
Prairie New Herdsman Farming. We were also able to increase our share of wallet with existing
customers and our business with co-packers expanded. Chinese consumers’ interest in healthy
nutrition is starting to drive demand for plant-based milks and we signed contracts for plant-
based milks with Huangshi in combismile and with Yeo’s.
It is now four years since we launched combismile in China but the growth momentum
continues, with a 26% volume increase year on year.
We saw a record number of filling machines contracted or deployed in 2021, including 12 new
lines with Mengniu and two combismile filling machines with Yili. We also undertook projects
with a number of regional customers.
In Asia Pacific South, there has been some polarisation in the market, with the impact of the
pandemic on purchasing power increasing the focus on value-oriented products. On the
other hand, health awareness is favouring premium products with high quality and innovative
ingredients.
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“SIG’s filling technology makes it possible
for us to also fill beverages with pieces
in carton packs and easily make product
and volume changes. ”
Hideki Kasai
President of Cosmo Foods
We saw new filling machines ramping up in a number of countries including Korea, Thailand,
Indonesia, Malaysia, Vietnam and India. combismile is making good progress and combismile
filling machines have been installed with Nestlé in Vietnam, Daesang in Korea and Amul in India.
In addition, our joint venture with DNP in Japan has signed a contract for a combismile filling
machine with co-packer Cosmo Foods. With integrated drinksplus technology, Cosmo Foods
will be able to develop and fill a broad range of exciting new product concepts containing real
pieces of fruit or vegetables. And the choice of combismile was not just driven by the carton’s
attractive design:
Hideki Kasai, President of Cosmo Foods: “The new combismile filling line will be sited at our plant
in Komono. Cosmo Foods currently offers co-packing of beverages in plastic packaging, but we
have decided to add carton packs to our portfolio because of their excellent environmental
profile. SIG’s filling technology makes it possible for us to also fill beverages with pieces in carton
packs and easily make product and volume changes. With this new system, we will give brand
owners the opportunity to offer products with high added value.”
Sustainabilty concerns are increasingly influencing customer choices in Asia Pacific. Dairy
Farming Promotion Organization of Thailand (DPO) has introduced a new “National Milk” product
range in SIG’s on-the-go combiblocXSlim carton packs with SIGNATURE Full Barrier packaging
material. DPO launched the new products under the slogan “Love Us, Save the World”.
Digitalisation is also growing in importance in the region. SIG’s “One Cap, One Code” solution –
available for SIG’s closure combiGo – enables customers to apply QR codes which are not only
visible on the package but can also be hidden on the inside of the closure. This ensures that
the QR code can only be scanned after the product has been purchased and opened by the
consumer. Nestlé became the first company in Vietnam to opt for this closure solution for its
popular Nestlé Milo Teen Protein drinks.
We have seen an increase in demand for family-size packs due to extended lockdowns in a
number of South-East Asian countries where more consumers are working from home. Family-
size format filling machines now operate at the sites of customers such as Yeo’s in Malaysia and
PTUJ and Diamond in Indonesia, to name just a few.
Looking ahead
Our presence in family-size packs will be further expanded by the planned acquisition of Evergreen
Asia’s fresh milk carton business, announced in January. This acquisition will enable us to serve the
growing demand for fresh milk in China and to leverage our innovation in this segment. There is
considerable technology overlap with our core aseptic business and the acquisition is expected
to generate attractive synergies. It will enable us to increase our share of wallet with existing
customers and to access new customers.
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57
Americas
Core revenue
€366m
Introduction
LFL growth at
constant currency
+19.4%
Our business in the Americas ranges from the developed markets of the USA and Canada to
fast-growing emerging markets such as Ecuador and Chile. We have tailored our go-to-market
strategies to meet the differing needs of the countries in the region.
2021 overview
The Americas registered another strong performance in 2021 with growth across the region.
In Brazil and Mexico, high at-home consumption of liquid dairy and culinary products was
sustained during the year. The effects of the COVID-19 pandemic on spending power in Brazil
have reinforced consumers’ focus on affordability, with demand for differentiated and premium
products expected to pick up as the economic situation improves. In Mexico, high inflation rates
are driving demand for large-size formats. The USA saw an increase in food service sales with
the re-opening of quick-service restaurants.
Performance highlights
In 2020, we placed nine filling machines with two large Brazilian dairy companies, Shefa and
Lider Alimentos. These filling machines continued to make a significant contribution to growth in
2021. With Shefa, where the business includes co-packing services to brand owners, a highlight
was the introduction of combismile. This contributed to the diversification of our portfolio into
small portions designed for individual consumption, with a focus on new categories such as
high protein beverages.
“With this new packaging,
we have revamped our line
of high-protein drinks.”
Roberto Adabo
President of Shefa
“With this new packaging, we have revamped our line of high-protein drinks, which has a
demanding young public that is always looking for quality products that match their lifestyle.
The package has a beautiful design, is easier to hold and with a closure that makes consumption
more convenient”, says Roberto Adabo, President of Shefa.
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Our relationship with Nestlé in Brazil, originally covering sweetened condensed milk and
flavoured milk, has progressed further to include plant-based beverages. SIG is also expanding
with Nestlé outside Brazil with the opening of a second line in Ecuador for medium sizes. The
expansion of our footprint with Nestlé reflects the efficiency we have demonstrated and the low
waste rates on our filling machines.
Focus on food safety has increased following the pandemic as shown by the adoption of
our PAC.TRUST product traceability solution by Cemil, a major producer of dairy products in
Minas Gerais, Brazil. Cemil is deploying the automated PAC.TRUST system to manage its entire
logistics chain in real time, monitoring volumes from the time the packaging leaves the filling
line to delivery at the point of sale.
In the USA the re-opening of quick-service restaurants with the easing of COVID-19 lockdowns
resulted in a strong sales performance in food service. Growth in premium plant-based milks
and creamers continued, particularly with emerging brands.
nutpods, an industry-leading plant-based coffee creamer company, continued to expand its
portfolio in combidome.
“Our first to market partnership with
SIG’s SIGNATURE PACK has allowed
nutpods to increase its relevance.”
Madeline Haydon
Founder and CEO of nutpods
“Our first to market partnership with SIG’s SIGNATURE PACK, which we call Plant Pack™, has
allowed nutpods to increase its relevance and appeal to younger, environmentally conscious
consumers who are looking for better-for-you brands as well as to differentiate us from the sea
of plastic bottles in our category.” – Madeline Haydon, Founder and CEO of nutpods.
Super Creamer, a keto-friendly creamer from Super Coffee, also continued to expand its line of
creamers packed in combidome.
“We couldn’t be more grateful and fortunate to continue to expand our Super Creamer portfolio
with SIG. Our partnership allows us to create products in packaging that adds value to our
customers”, says Jordan DeCicco, Super Coffee’s Founder and COO.
“We couldn’t be more grateful and
fortunate to continue to expand our
Super Creamer portfolio with SIG.”
Jordan DeCicco
Super Coffee’s Founder and COO
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59
Broth and stock sales in the USA and Canada continued to show good growth due to an ongoing
trend towards preparing meals at home.
In Mexico, we saw strong sales of premium white milk by Santa Clara, one of the leading dairies.
Alpura introduced two new flavoured milk products under their premium Selecta brand. Alpura
also launched their first plant-based beverage “Seeds” in combifit. The Nestlé range of coffee
creamer (Coffeemate) and cooking products under the Carnation brand also performed well.
Looking ahead
In 2022, construction of our new plant in Mexico will continue (see > Realising further growth
potential in North America). The planned opening of the plant in early 2023 will enable us to serve
customers in both Mexico and the USA better and faster.
Innovation will set the pace for SIG’s growth in the region in 2022 – not only by reinforcing the offer
of new formats but also by improving our customers’ performance through higher productivity
and efficiency. The SIG Reliability Centre, a state-of-the-art remote solutions centre located at our
site in Paraná, Brazil will coordinate the deployment of solutions such as our Plant 360 Remote
Services and Plant 360 Asset Health Monitoring.
SIG has set up a network of Reliability Centres worldwide to ensure its
senior system experts can analyse data from its filling lines and provide
fast and efficient insights to help customers. Following the Reliability
Centres in Dubai (UAE) and Linnich (Germany), SIG is now opening a
Reliability Centre in Paraná, Brazil.
Annual Report 2021 Business review
Key performance highlights
60
KEY PERFORMANCE HIGHLIGHTS
Core revenue
Core revenue growth
Adjusted EBITDA
€2.05bn
2020: €1.80bn
6.6% (LFL)
2020: 5.5%
€571m
2020: €498m
2021
2020
2021
2020
2021
2020
Adjusted net income
ROCE
Adjusted EBITDA margin
€252m
2020: €232m
2021
2020
31.0%
2020: 29.5%
2021
2020
Adjusted EPS diluted
Free cash flow
€0.75
2020: €0.73
2021
2020
€258m
2020: €233m
2021
2020
27.7%
2020: 27.4%
2021
2020
Leverage
2.5x
2020: 2.7x
2021
2020
Share information
for the year ended 31 December 2021
Market capitalisation
CHF 8.59bn
Number of shares
337,520,872
Share price on 31.12
CHF 25.46
Total shareholder return
26.2%
Share price closing high
CHF 28.32
Share price closing low
CHF 19.38
Average daily volume
713,586
150
140
130
120
110
100
90
31 December
2020
March
2021
June
2021
September
2021
31 December
2021
SIG
SMIM
Annual Report 2021 Business review
Financial review
61
FINANCIAL REVIEW
Growth above guided range and record adjusted
EBITDA margin.
“In 2021 we achieved growth in all regions.
We continued our track record of strong cash
generation while investing in new production
capacity and increasing the number of filling
machines in the field.”
Frank Herzog, Chief Financial Officer
Financial performance
Revenue
Strong revenue performance in 2021 was underpinned by our broad geographic reach and our
key role in the supply chain for essential food and beverages. Core revenue increased by 6.6% on
a like-for-like constant currency basis (13.9% as reported) to reach €2,046.8 million. Total revenue
increased by 6.2% on a like-for-like constant currency basis (13.5% as reported). For an explanation
of our like-for-like revenue definition, refer to the section “Other” below. The acquisition of the
remaining 50% of the shares of the joint ventures in the Middle East (“the JV acquisition”) at the
end of February 2021 contributed €166 million of incremental revenue to the Group.
Revenue growth in the segments
CORE REVENUE 20211
by segment
SLEEVE AND CLOSURE REVENUE 2021
by end market
€366m
€735m
7%
7%
2020: 9%
2020: 9%
25%
25%
2020: 22%
2020: 22%
€691m
€252m
Europe
MEA
APAC
Americas
68%
68%
2020: 69%
2020: 69%
LD
LD
NCSD
NCSD
Food
Food
1
Europe: The sum of core revenue of EMEA for the first two months of 2021 (€119 million) and core revenue of Europe for the last ten
months of 2021 (€616 million). MEA: Core revenue for the last ten months of 2021 (since acquisition).
Annual Report 2021 Business review
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62
In Europe, revenue in 2021 was 2.1% higher on a like-for-like constant currency basis. In 2021,
while the stockpiling effects experienced in 2020 at the onset of the COVID-19 crisis did not
recur, the business continued to benefit from a relatively high level of demand as people
continued to work from home.
In the Middle East and Africa, like-for-like constant currency growth for the ten months to
December 2021 was 0.8%. Growth was achieved despite the impact of COVID-19 on the non-
carbonated soft drinks market, with schools closed and lower out-of-home consumption. In
addition, drought in South Africa in the first half of the year temporarily affected the liquid dairy
business.
In Asia Pacific, core revenue in 2021 was 8.2% higher on a like-for-like constant currency basis.
Market conditions in China returned to more normal levels with demand for white milk benefiting
from its acknowledged health benefits. Countries in South-East Asia continued to be affected by
COVID-19 for most of the year but revenue held up well, supported by customer wins and a focus
on innovation and sustainability.
The Americas saw exceptional growth of 19.4% at constant currency, reflecting the contribution
of filling machines deployed in Brazil in the course of 2020. At-home consumption continued to
drive demand in both Brazil and Mexico. Revenue in the USA benefited from the re-opening of
restaurants and a re-stocking of food service products packed in SIG cartons.
SIG REVENUE SPLIT1
Fillers
7%
Sleeves
86%
Service
7%
1 Revenue split based on revenue generated through sale of filler system components and sleeves and closures for 2021.
Seasonality
The Group’s business experiences moderate seasonal fluctuations, primarily due to seasonal
consumption patterns and performance incentive programmes relating to sleeves that generally
end in the fourth quarter. Customers tend to purchase additional sleeves prior to the end of
the year to meet seasonal demand and to avail themselves of annual volume rebates, typically
resulting in higher sales during the fourth quarter. Historically, this has resulted in relatively low
sales in the first quarter.
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63
ADJUSTED EBITDA 20211
by segment
NET CAPEX 20212
by segment
FILLING MACHINES 2021
in field (units)
€97m
€242m
€34m
€54m
169
456
1,295
€212m
€78m
€39m
€6m
431
239
Europe
MEA
APAC
Americas
Europe
MEA
APAC
Americas
Europe
MEA
APAC
Americas
1
2
Europe: The sum of adjusted EBITDA of EMEA for the first two months of 2021 (€38 million) and adjusted EBITDA of Europe for the last
ten months of 2021 (€204 million). MEA: Adjusted EBITDA for the last ten months of 2021 (since acquisition).
Europe: The sum of net capex of EMEA for the first two months of 2021 (€10 million) and net capex of Europe for the last ten months
of 2021 (€44 million). MEA: Net capex for the last ten months of 2021 (since acquisition).
EBITDA
ADJUSTED EBITDA MARGIN1
EMEA
Europe
MEA
APAC
Americas
SIG Group
As of 31 Dec. 2021
As of 31 Dec. 2020
32.2%
33.1%
31.1%
30.0%
26.5%
27.7%
34.4%
–
–
31.6%
22.7%
27.4%
1 Adjusted EBITDA divided by revenue from transactions with external customers.
Adjusted EBITDA increased by €72.3 million, from €498.3 million in 2020 to €570.6 million in 2021.
The increase was primarily driven by a top line contribution of €47.1 million reflecting the factors
described above. The JV acquisition contributed a €33.7 million net increase to adjusted EBITDA.
These positive impacts were partially offset by year-on-year increases in raw material prices, which
began to be felt in the second half of the year (€2.6 million), negative foreign exchange impacts
(€4.7 million) and negative production efficiencies (€2.4 million), primarily related to higher freight
and energy costs. Total SG&A costs as a percentage of revenue decreased to 13.2% in 2021
compared with 14.1% in 2020.
EBITDA increased by €112.7 million to €562.4 million. This increase was primarily driven by the
factors affecting adjusted EBITDA described above. In addition to the adjusted EBITDA contribution,
the increase is also attributable to a net year-on-year positive impact related to the paper mill
divestment in New Zealand (€38.0 million negative impact in 2020 versus €21.9 million of negative
impact in 2021), net positive impacts from the JV acquisition accounting adjustments (€31.9 million)
and the recognition in 2021 of indirect tax recoveries of €10.3 million. These positive effects were
partly offset by lower unrealised hedging benefits (€13.7 million).
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The adjusted EBITDA margin of the former EMEA and new Europe segments benefited from gains
relating to raw material hedge contracts, which offset incremental freight and energy costs. In APAC,
the adjusted EBITDA margin was negatively impacted by higher raw material spot prices. The positive
hedging effects related to the raw material headwinds are reported in the former segment EMEA
and now in Europe. A continuing negative impact of currencies on the adjusted EBITDA margin in
the Americas was more than offset by the positive top line contribution.
Capex
Net capex as a percentage of total revenue decreased from 8.0% in 2020 to 6.9% in 2021.
Investments in property, plant and equipment increased, primarily relating to equipment in
European sleeves production plants and to equipment to be used in the new plant currently
under construction in Mexico. Non-filler capex also continued to be incurred for the new sleeves
production plant in China, although to a lesser extent in 2021. Gross filler capex also increased
but net filler capex was lower, reflecting a higher proportion of upfront cash compared with the
prior year due to the regional mix of filling line contracts.
We placed 76 filling machines in the field in 2021. Taking account of withdrawals, the number of
filling machines globally reached 1,295, a net increase of 29.
GROUP NET CAPEX 2021
Upfront cash
-103
153
93
Gross filler
PP&E
Net income
Adjusted net income increased by €20.1 million to €252.4 million in 2021. This increase was
driven by the same factors as for adjusted EBITDA, partly offset by incremental depreciation and
PPA amortisation as a result of the JV acquisition.
Net income increased by €104.1 million to €172.1 million in 2021. The increase was mainly due
to the factors impacting EBITDA described above, impairments of the Whakatane mill assets
that did not recur in 2021, a reduction of the PPA expenses relating to the acquisition of SIG
by Onex in 2015 and positive foreign exchange impacts on financing costs due to movements
in the Euro/US Dollar exchange rate. These positive elements were partly offset by additional
depreciation and PPA amortisation arising from the JV acquisition and a higher tax expense
in 2021.
The adjusted and the effective tax rate declined from around 25% in 2020 to around 23%
in 2021. The effective tax rate is impacted by the relative mix of profits and losses taxed at
varying tax rates in the jurisdictions where we operate. The 2021 tax rate was also positively
impacted by non-recurring favourable outcomes of prior year tax positions.
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65
(In € million)
Profit for the period
Non-cash foreign exchange impact of non-functional currency loans
and realised foreign exchange impact due to refinancing
Amortisation of transaction costs
Net change in fair value of financing-related derivatives
Onex acquisition PPA depreciation and amortisation
Net effect of early repayment of loans
Interest on out-of-period indirect tax recoveries
Adjustments to EBITDA:
Unrealised gain on operating derivatives
Replacement of share of profit or loss of joint ventures
with cash dividends received from joint ventures
Restructuring costs, net of reversals
Loss on sale of subsidiary
Transaction- and acquisition-related costs
Fair value adjustment on inventories
Gain on pre-existing interest in former joint ventures
Out-of-period indirect tax recoveries
Impairment losses
Other
Tax effect on above items
Adjusted net income
Year ended
31 Dec. 2021
Year ended
31 Dec. 2020
172.1
(10.6)
3.6
–
103.1
3.7
(3.1)
(7.8)
1.6
26.0
12.1
16.5
10.4
(48.8)
(10.3)
4.4
4.1
(24.6)
252.4
68.0
24.6
3.1
(0.5)
125.4
19.7
–
(21.5)
5.3
6.3
–
3.1
–
–
–
49.3
6.1
(56.6)
232.3
Return on capital employed
Post-tax ROCE, computed at an unchanged reference tax rate
of 30%, increased by 150 basis points in 2021 to 31.0%. At the
adjusted effective tax rate of 23.3% in 2021, ROCE reached 34.0%.
The increase is primarily attributable to the increase in adjusted
EBITDA for the reasons described above.
ROCE
31.0%
Cash flows
Our strong cash flow generation continued in 2021, with net
operating cash inflows of €530.9 million (€105.1 million higher than
in 2020) and free cash flow of €258.3 million (€25.1 million higher).
Free cash flow
€258m
Net cash from operating activities was positively impacted by the
adjusted EBITDA growth described above, net working capital
inflows and the non-recurrence of refinancing-related payments. This was offset by costs relating
to the JV acquisition and to the planned acquisitions in 2022 (see the “Acquisition” section below).
The strong generation of operating cash inflows resulted in the increase in free cash flow, despite
higher capex and lease payments in 2021.
Investing cash outflows increased in 2021 due to higher gross filler capex. The positive impact of
upfront cash in the year was reflected in net cash from operating activities. Total net capex was
in line with the prior year and represented 6.9% of revenue in 2021 compared with 8.0% in 2020.
The increase in financing cash outflows in 2021 was primarily related to the repayment of external
loans of one of the former joint ventures.
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Net debt and leverage
(In € million)
Gross debt
Cash and cash equivalents
Net debt
Net leverage ratio
As of
31 Dec. 20211
As of
31 Dec. 2020
1,732.4
304.5
1,427.9
2.5x
1,697.0
355.1
1,341.9
2.7x
1
In the calculation of the net leverage ratio as of 31 December 2021, adjusted EBITDA includes the adjusted EBITDA of the former joint
ventures in the Middle East from 1 January 2021.
Since the refinancing that took place in June 2020, gross debt includes
an unsecured term loan of €550 million (maturing in June 2025) and two
issues of senior unsecured notes in the aggregate amount of €1,000 million
(maturing in June 2023 and June 2025). Lease liabilities of €182.4 million are
also included in the gross debt.
Leverage
2.5x
Growth in EBITDA and strong cash flow generation enabled a reduction in the net leverage
ratio from 2.7x to 2.5x in 2021, after funding the JV acquisition, which had a net debt impact of
approximately €200 million. Since the IPO in 2018, strong cash generation has resulted in an
average reduction in leverage of approximately 0.25x per year.
Debt rating
Moody's
S&P
Acquisitions
Company rating
Ba1
BBB–
Stable
Stable
As of
October 2021
March 2020
Acquisition of the remaining shares of the joint ventures
in the Middle East
On 25 February 2021, the Company acquired the remaining 50% of the shares of its two joint
ventures in the Middle East for a consideration of €490.3 million, split into cash of €167.0 million
and 17,467,632 newly issued SIG ordinary shares with a fair value of €323.3 million at the time
of closing. The new SIG shares were issued out of authorised share capital. The JV acquisition
gives the Group control over a business with strong growth prospects in a growing market and
expands its global presence.
The JV acquisition has resulted in a split of the segment Europe, Middle East and Africa (“EMEA”)
into two segments: segment Europe and segment Middle East and Africa (“MEA”).
Annual Report 2021 Business review
Financial review
67
Announcement of agreement to acquire Evergreen’s fresh carton
business in Asia Pacific
The Group announced on 5 January 2022 that it has entered
into an agreement to acquire Evergreen’s fresh carton
business in Asia Pacific (“Evergreen Asia”). It will acquire 100%
of the shares of Evergreen Packaging Korea Ltd., Evergreen
Packaging (Shanghai) Co. Ltd. and Evergreen Packaging
(Taiwan) Co. Ltd from Evergreen Packaging International LLC.
Evergreen Asia provides filling machines, cartons, closures
and after-sales service to its customers in the fresh and
extended shelf life dairy segment, mainly for milk, and has
production plants in China, South Korea and Taiwan.
The acquisition will allow the Group to access a new customer
base in an attractive growing market in Asia and also to
expand its offering to existing customers. The Group will use
its experience to further develop the fresh carton business,
drawing on its regional R&D presence and innovation
capabilities as well as its marketing expertise to introduce more innovative packaging formats in
the Asian fresh dairy market. Synergies are expected from commercial opportunities and cost
optimisation. In addition, the business will benefit from a supply arrangement at market for coated
carton board.
The acquisition is expected to close in the second or third quarter of 2022. The closing is subject
to customary closing conditions, including approvals from regulatory authorities. Evergreen
Asia will be part of the Group’s APAC segment.
The consideration for the shares of the Evergreen entities will be based on an enterprise value
of $335 million (subject to customary closing adjustments) on a cash-free, debt-free basis and
will be paid in cash at the closing of the acquisition. The final consideration will be determined at
the time of the completion settlement. The acquisition will initially be financed through a bridge
facility of €300 million with a maturity of up to 18 months, which will be refinanced with long-
term financing arrangements.
In the year ended 31 December 2021, Evergreen Asia generated revenue of approximately
$160 million and adjusted EBITDA of approximately $28 million (unaudited).
Announcement of agreement to acquire Scholle IPN
The Group announced on 1 February 2022 that it has entered into an agreement to acquire
100% of Scholle IPN, a privately held company, from CLIL Holding B.V..
Scholle IPN is a leading innovator of sustainable packaging systems and solutions for food and
beverages, with retail, institutional and industrial customers. It is the global leader in bag-in-
box and number two in spouted pouches. The acquisition will enable the Group to expand
its product portfolio, increase its presence in the United States and leverage its established
presence in emerging markets. Synergies and cost efficiencies are expected in areas such as
commercial operations, technology, innovation and sustainability as well as procurement and
manufacturing.
The acquisition is expected to close in the second or third quarter of 2022. The closing is subject
to customary closing conditions, including approvals from regulatory authorities.
Annual Report 2021 Business review
Financial review
68
The consideration for the shares of Scholle IPN will be based on an enterprise value of €1.36 billion
(at an USD/EUR exchange rate of 1.12862) and an estimated net debt position of €310 million as
of 31 December 2021, reflecting an equity value of €1.05 billion. The acquisition will be funded
through a mix of cash and shares, and the refinancing of existing debt.
The consideration will be split into cash of €370 million (subject to customary closing adjustments)
and 33.75 million newly issued shares, to be transferred at the closing of the acquisition, and
a contingent consideration. The new shares will be issued out of authorised share capital. The
existing debt of Scholle IPN will be refinanced at closing. The contingent consideration depends
on Scholle IPN outperforming the top end of the Group’s mid-term revenue growth guidance
of 4–6% per year for the years ending 31 December 2023, 2024 and 2025, and would be paid
in cash in three annual instalments of up to €89 million ($100 million) per year. Payments for
growth rates ranging from 6–11.5% per the respective year will be made based on a pre-agreed
ratchet structure.
The consideration to be paid in cash at closing and the repayment of existing debt will be financed
via a bridge facility with a maturity of up to 18 months, which is expected to be refinanced
through a combination of long-term debt and a share capital increase of approximately €200–
250 million.
The current owner of Scholle IPN, Laurens Last, will become the
largest single shareholder in SIG after closing of the acquisition
with an approximate shareholding of 9.1% (with a lock-up period
of 18 to 24 months). He will also be nominated for election to
the Board of Directors of SIG at the forthcoming Annual General
Meeting on 7 April 2022. Ross Bushnell, CEO of Scholle IPN, will
join SIG’s Group Executive Board subject to and as of closing of
the acquisition.
In the twelve months ended 31 December 2021, Scholle IPN
generated revenue of approximately €474 million and adjusted
EBITDA of approximately €90 million (unaudited).
Annual Report 2021 Business review
Financial review
69
Other
Dividend
To allow our shareholders to participate in the cash generative nature of our business, we have
set a dividend payout target of 50–60% of adjusted net income.
At the Annual General Meeting to be held on 7 April 2022, the
Board of Directors will propose a dividend payment for 2021
of CHF 0.45 per share, totalling CHF 151.9 million (equivalent to
€147.0 million as per the exchange rate as of 31 December 2021),
payable out of foreign capital contribution reserves. This
represents a dividend payout ratio of 58% of adjusted net
income.
Dividend
CHF 0.45
Sale of New Zealand paper mill
After the Group’s announcement in March 2021 that it would close its paper mill in New Zealand
(Whakatane), it was approached by potential buyers. The Group sold the paper mill on 3 June 2021
for NZD 1 to a consortium of investors who will enable the paper mill to continue to operate. The
sale of the mill resulted in a loss of €12.1 million. In connection with the initial decision to close
the mill, the Group expected to incur plant decommissioning and redundancy costs of around
€30 million. However, due to the sale, only €9.8 million of restructuring costs relating to the
employees of the mill were recognised in the year ended 31 December 2021.
New production plant for sleeves in Mexico
The Group announced in April 2021 that it will construct a new production plant for sleeves in
Mexico. Operations are planned to start in the first quarter of 2023. The plant will be leased by
the Group.
Foreign currencies
We operate internationally and transact business in a range of currencies. Whilst our reporting
currency is the Euro, we generate a significant portion of our revenue and costs in currencies
other than Euro. Increases or decreases in the value of the Euro against other currencies in
countries where we operate can affect our results of operations and the value of balance sheet
items denominated in foreign currencies. Our strategy is to reduce this exposure through the
natural hedging that arises from the localisation of our operations. In addition, we systematically
hedge all key currencies against the Euro using a twelve-month rolling layered approach.
We supply semi-finished and finished goods to certain of our non-European operations in
Euro and a number of our key raw material suppliers charge us for raw materials in Euros
or in US Dollars. As a result, a greater portion of our costs is denominated in Euros and, to a
lesser extent, US Dollars as compared to the related revenue generated in those currencies.
Accordingly, changes in the exchange rates of the Euro and the US Dollar compared with the
currencies in which we sell our products could adversely affect the results of operations. We
expect to mitigate some of these cost mismatches with the opening and expansion of local
production facilities in certain markets, continuing efforts to qualify local suppliers and by using
foreign currency exchange derivatives.
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Financial review
70
Alternative performance measures
Definitions and reconciliations
For additional information about the alternative performance measures used by management
(including reconciliations to measures defined in IFRS), please refer to the following link:
https://www.sig.biz/investors/en/performance/definitions
Like-for-like basis (“LFL”)
With effect from the end of February 2021, revenue of the former joint ventures in the Middle
East and Africa are fully consolidated and presented in the new segment MEA (see the section
“Acquisitions” above). Prior to the acquisition of the remaining shares of the joint ventures, they
were accounted for using the equity method. The EMEA segment, which relates to our reporting
structure prior to acquisition of the joint ventures, was only in place for the first two months
of 2021. In addition, due to the sale of the New Zealand paper mill, sales of folding box board
have ceased as of the beginning of June 2021.
The Company communicated its 2021 revenue guidance on a like-for-like constant currency
basis. Like-for-like revenue growth at constant currency is calculated on the following basis:
• Revenue recognised by the Group from sales to the former joint ventures in the Middle East,
previously presented as Group core revenue from external customers, has been eliminated as
if the joint ventures had been fully consolidated by the Group from the end of February 2020.
• Sales by the former joint ventures to their external customers have been treated as if the
former joint ventures in the Middle East had been fully consolidated by the Group from the
end of February 2020 (i.e. treated as Group core revenue from external customers).
Outlook
The outlook for 2022 assumes the consolidation of the Scholle IPN and Evergreen Asia businesses
from 1 July 2022. The final timing of consolidation depends on the completion of customary
closing conditions.
For the full year, the Company expects revenue growth of 22–24% at constant currency, with
growth of approximately 15% due to the acquisitions. The adjusted EBITDA margin for the
enlarged group is expected to be around 26%, subject to no further major movements in input
costs and foreign exchange rates. Net capital expenditure is forecast to be within a range of 7–9%
of revenue and the dividend payout ratio is expected to be within, or slightly above, a range of
50–60% of adjusted net income.
The Company maintains its mid-term revenue growth guidance of 4–6% at constant currency, with
the two acquisitions expected to enable resilient growth in the upper half of this range across an
expanded platform. For the enlarged group, the adjusted EBITDA margin is expected to be above
27% in the mid-term driven by continued margin expansion in the aseptic carton business and
the acquired businesses as well as the realisation of synergies from the acquisitions. Net capital
expenditure is forecast to be within a range of 7–9% of revenue and the dividend payout ratio is
expected to be within a range of 50–60% of adjusted net income. SIG’s business will continue to be
strongly cash generative and the Company maintains its mid-term leverage guidance of towards
2x with a milestone of around 2.5x at the end of 2024.
Annual Report 2021 Business review
Risk management
71
RISK MANAGEMENT
In addition to common business-related risk factors, we pay close attention to other significant
risks we may be exposed to, such as sustainability, political, reputational, regulatory and
compliance risks. We have developed instruments and know-how that help the Group identify
and assess such risks.
We have implemented a risk management process led by the Group General Counsel and
approved by the Board of Directors, which sets out a structured process to systematically
manage risks. In this process, various risks are identified, analysed and evaluated, and risk-
control measurements are determined. The objectives of the risk management process are to
continuously ensure and improve compliance with laws and regulations as well as corporate
governance guidelines and best practices. The risk management process is also designed
to protect the Group from loss of confidence and/or public reputational damage resulting
from, for example, inadequate or failed internal processes or systems. Furthermore, the risk
management process facilitates the disclosure of potential risks to key stakeholders. At the
same time, the process makes all key executives aware of the magnitude of risks and provides
them with information for effective decision-making. As part of this process, risk management
workshops with regional and functional leadership teams were held in 2021 to identify and
evaluate risks. Mitigating actions were also discussed during these risk management workshops
and subsequently signed off by the Board of Directors. In addition, a separate risk workshop was
held with the Group Executive Board in 2021 to discuss and validate the overall risk portfolio.
The monitoring and control of risks are supported by our internal control system for financial
reporting, which defines measures that reduce potential risks. Management is responsible for
implementing, tracking and reporting risk mitigation measures, including periodic reporting
to the Audit and Risk Committee and the Board of Directors. Each material risk identified
has a risk owner at management level who is responsible for the implementation of risk-
management measures in his or her area of responsibility. Furthermore, each material risk has
a mitigation action owner, mostly in global functions with regional counterparts to ensure local
implementation.
The Audit and Risk Committee regularly discusses risks that could materially impact our
business and financial position, as well as the development of internal controls to mitigate
such risks. In addition, the members of the Audit and Risk Committee periodically review the
internal policies and procedures designed to secure compliance with laws, regulations and
internal rules regarding insider information, confidentiality, bribery and corruption, sanctions
and adherence to ethical standards, and assess the effectiveness thereof. The Audit and Risk
Committee discusses with the CFO and the Group General Counsel any legal matters that may
have a material impact on the Group’s business or financial position and any material reports
or inquiries by regulatory or governmental agencies that could materially impact the Group’s
business or financial position. The Audit and Risk Committee, with the support of management,
informs the Board of Directors at least annually about any major changes in risk assessment,
risk management and any mitigation actions taken. In 2021, the risk portfolio signed off by
management was discussed with the Audit and Risk Committee as well as with the entire Board
of Directors in their December meetings.
We carry out an annual risk assessment in conformity with the Swiss Code of Best Practice
for Corporate Governance. The Group’s risk management systems cover both financial and
operational risks.
Please refer to the following link for our SIG Corporate responsibility policy which includes risk management:
https://cms.sig.biz/media/9017/sig_2021_esg_policy_governance_210602.pdf
Annual Report 2021 72
GOVERNANCE
73 Board of Directors
76 Group Executive Board
79 Corporate Governance Report
1.
2.
3.
4.
5.
6.
7.
8.
9.
Group structure
and shareholders
Capital structure
Board of Directors
Committees
Frequency of meetings
of the Board of Directors
and its Committees
Areas of responsibility
Information and control
instruments vis-à-vis
Group Executive Board
Group Executive Board
Compensation, shareholdings
and loans
10.
11.
Shareholders’ rights
of participation
Change of control and
defence measures
12. Auditors
13.
Information policy
14. General blackout periods
15.
Significant changes
since 31 December 2021
Annual Report 2021
Governance
Board of Directors
73
BOARD OF DIRECTORS
Andreas Umbach
Chair of the Board,
Nomination and Govern. Com. Chair
> Read the CV
Matthias Währen
Audit and Risk Committee Chair
> Read the CV
Colleen Goggins
Compensation Committee Chair
> Read the CV
Werner Bauer
Audit and Risk Committee Member,
Nomination and Govern. Com. Member
> Read the CV
Annual Report 2021 Governance
Board of Directors
74
BOARD OF DIRECTORS
Wah-Hui Chu
Compensation Committee Member,
Nomination and Govern. Com. Member
Mariel Hoch
Audit and Risk Committee Member,
Compensation Committee Member
> Read the CV
> Read the CV
Nigel Wright
Nomination and Govern. Com. Member
Abdallah al Obeikan
> Read the CV
> Read the CV
Annual Report 2021 Governance
Board of Directors
75
BOARD OF DIRECTORS
Martine Snels
> Read the CV
Annual Report 2021 Governance
Group Executive Board
76
GROUP EXECUTIVE BOARD
Samuel Sigrist
Chief Executive Officer
> Read the CV
Frank Herzog
Chief Financial Officer
> Read the CV
Ian Wood
Chief Supply Chain Officer
> Read the CV
Suzanne Verzijden1
Chief People and Culture Officer
> Read the CV
Annual Report 2021 Governance
Group Executive Board
77
GROUP EXECUTIVE BOARD
José Matthijsse
President and General Manager, Europe
> Read the CV
Ricardo Rodriguez
President and General Manager,
Americas
> Read the CV
Abdelghany Eladib
President and General Manager, MEA
> Read the CV
Angela Lu1, 2
President and General Manager,
Asia Pacific South
> Read the CV
Annual Report 2021 Governance
Group Executive Board
78
GROUP EXECUTIVE BOARD
Fan Lidong1, 2
President and General Manager,
Asia Pacific North
> Read the CV
1 Member of the Group Executive Board since 1 January 2022.
2
Lawrence Fok was the President and General Manager, Asia Pacific until 31 December 2021.
Annual Report 2021 Governance
Corporate Governance Report
79
CORPORATE GOVERNANCE
REPORT
This Corporate Governance Report contains the
information that is stipulated by the directive
on information relating to corporate governance
issued by the SIX Swiss Exchange AG (“SIX Swiss
Exchange”) and follows its structure.
1.
Group structure and shareholders
1.1
Group structure
SIG Combibloc Group AG, Neuhausen am Rheinfall (“Company”) is the parent company of the
SIG Group1, which directly or indirectly holds all other Group companies and interests in joint
venture companies. The shares of the Company are listed on SIX Swiss Exchange (symbol: SIGN,
valor symbol: 43 537 795, ISIN: CH0435377954). The market capitalisation of the Company
amounted to CHF 8,593.3 million as of 31 December 2021.
Please see note 26 of the consolidated financial statements for the year ended 31 December 2021
for a comprehensive list of the Group’s subsidiaries and of its joint venture company. Except
for the Company, the Group does not include any listed companies. The Group has effective
oversight and efficient management structures at all levels. The operational Group structure as
of 31 December 2021 is as follows:
The Company’s board of directors (“Board of Directors” or “Board”), acting collectively, has
the ultimate responsibility for the conduct of business of the Company and for delivering
sustainable shareholder and stakeholder value. The Board sets the Company’s strategic aims,
ensures that the necessary financial and human resources are in place to meet the Company’s
objectives, and supervises and controls the management of the Company. There are three
permanent Board committees: an audit and risk committee (“Audit and Risk Committee”),
a compensation committee (“Compensation Committee”), and a nomination and governance
committee (“Nomination and Governance Committee”; collectively “Committees”).
In accordance with, and subject to, Swiss law, the Company’s articles of association
(“Articles of Association”) and the Company’s organisational regulations (“Organisational
Regulations”), the Board of Directors has delegated the executive management of the
Company’s business (Geschäftsleitung) to the Group Executive Board (“Group Executive
Board”) which is headed by the chief executive officer (“Chief Executive Officer” or “CEO”)
pursuant to the Organisational Regulations.2 The Group Executive Board comprises seven
members, specifically the CEO, the chief financial officer (“Chief Financial Officer” or “CFO”),
1 References to “SIG Group”, “Group” or “we” are to the Company and its consolidated subsidiaries.
2
For a comprehensive description on the delegation please refer to art. 19 of the Articles of Association and section 2.3 and 4.1
of the Organisational Regulations.
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the chief technology officer (“Chief Technology Officer” or “CTO”), the president and
general manager of Europe (“President and General Manager Europe”), the president and
general manager of Americas (“President and General Manager Americas”), the president
and general manager of Asia Pacific (“President and General Manager Asia Pacific”) and
the president and general manager of Middle East and Africa (“President and General
Manager MEA”).3 For further information on the Group’s segments please refer to note 7
of the consolidated financial statements for the year ended 31 December 2021. The Group
Executive Board is directly supervised by the Board of Directors and its Committees.
1.2
Significant shareholders
According to the disclosure notifications reported to the Company during 2021 and published by the
Company via the electronic publishing platform of SIX Swiss Exchange, the following shareholders
had holdings of 3% or more of the voting rights of the Company as of 31 December 20214:
Significant shareholders
Haldor Foundation3
Fahad al Obeikan4, Andreas Boy, André Rosenstock
Norges Bank (the Central Bank of Norway)
% of voting rights1
Number of shares2
9.95%
5.18%
4.96%
31,849,994
17,467,632
17,463,673
BlackRock, Inc. (Mother company)
3.57% / 0.01%
11,434,1685 / 45,468
UBS Fund Management (Switzerland) AG
3.18%
10,176,211
Ameriprise Financial, Inc.6
3.17% / 0.002%
10,698,0867 / 5,382
1
According to SIX: https://www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html/.
2 According to SIX: https://www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html/.
3 Direct shareholder: Winder Investment Pte Ltd.
4 The direct shareholder with respect to Fahad Al Obeikan is Al Obeikan Group for Investment Company CJS.
5
6
Of which the following voting rights were delegated by a third party and can be exercised at BlackRock, Inc.’s own discretion:
627,144 company shares.
Direct shareholders: Threadneedle Investment Funds ICVC, Threadneedle Management Luxembourg SA, Threadneedle Pensions
Limited, Threadneedle Asset Management Limited, BMO Asset Management Limited, BMO Investment Business Limited,
BNP Paribas Securities Services Zurich, Bank of Korea, Credit Suisse Zurich, UniCredit Bank Austria AG, Citi London, Nortrust
Nominees Limited, State Street Nominees Limited.
7
Of which the following voting rights were delegated by a third party and can be exercised at Ameriprise Financial, Inc.’s own
discretion: 1,567,726 company shares.
Notifications made in 2021 in accordance with art. 120 et seqq. of the Financial Market
Infrastructure Act (“FMIA”) can be viewed using the following link: https://www.ser-ag.com/en/
resources/notifications-market-participants/significant-shareholders.html#/
As regards the value of the percentage of voting rights shown, it should be noted that any
changes in the percentage voting rights between the notifiable threshold values are not subject
to disclosure requirements.
As of 31 December 2021, the Company held 2,430 treasury shares.
3
4
The Company appointed three new members to the Group Executive Board with effect as of 1 January 2022: Fan Lidong as
President and General Manager Asia Pacific North, Angela Lu as President and General Manager Asia Pacific South and Suzanne
Verzijden as Chief People and Culture Officer. Fan Lidong and Angela Lu took over from Lawrence Fok, President and General
Manager Asia Pacific, who decided to leave the Company and resigned from the Group Executive Board as of 31 December 2021. As a
result of these changes the Group Executive Board consists of 9 members as of 1 January 2022.
The number of shares shown here as well as the holding percentages are based on the last disclosure of shareholdings
communicated by the shareholder to the Company and the Disclosure Office of SIX Swiss Exchange. The number of shares held by
the relevant shareholder may have changed since the date of such shareholder’s notification.
Annual Report 2021 Governance
Corporate Governance Report
81
1.3
Cross-shareholdings
The Company has no cross-shareholdings exceeding 5% in any company outside the Group.
2.
Capital structure
2.1
Ordinary share capital
The ordinary share capital of the Company as registered with the commercial register of the
Canton of Schaffhausen amounts to CHF 3,375,208.72 as of 31 December 2021.
It currently consists of 337,520,872 fully paid-up registered shares with a nominal value of
CHF 0.01 per share.
2.2
Authorised and conditional share capital
The Company has authorised share capital of CHF 675,041.74 and conditional share capital of
CHF 640,106.48 each as of 31 December 2021.
The Board of Directors is authorised to increase the share capital at any time until 21 April 2023
by a maximum of CHF 675,041.74 through the issue of up to 67,504,174 shares of CHF 0.01
nominal value each.
The conditional share capital of CHF 640,106.48 (i.e. 64,010,648 shares of CHF 0.01 nominal
value each) is divided into the following amounts:
• CHF 160,026.62 for employee benefit plans
• CHF 480,079.86 for equity-linked financing instruments
Capital increases from authorised and conditional share capital are subject to a single
combined limit, i.e. the total number of new shares that may be issued from the authorised and
conditional share capital together in accordance with art. 4, 5 and 6 of the Articles of Association
may not exceed 67,504,174 shares (i.e. CHF 675,041.74, corresponding to 20% of the existing
share capital). Within the limit outlined above, the proportion of new shares assigned to each
of the categories is stipulated by the Board of Directors. Any newly issued shares are subject
to the restrictions set out in art. 7 of the Articles of Association. However, the shares issued
from authorised and conditional share capital under the exclusion of subscription and advance
subscription rights, respectively, is limited until 21 April 2023 to a single combined maximum of
33,752,087 shares (equaling CHF 337,520.87 or 10% of existing share capital).
Reference is made to the Articles of Association for the precise wording of provisions relating to
authorised and conditional share capital, in particular art. 4, 5 and 6 of the Articles of Association.
Among other matters, these contain details regarding the beneficiaries of the employee
benefit plan and the entitlements to withdraw or restrict shareholders’ subscription rights. The
relevant provisions can be downloaded as a pdf document at https://www.sig.biz/investors/en/
governance/articles-of-association.
2.3
Changes in capital
On 22 February 2021, the Company increased its share capital by CHF 174,676.32 from
CHF 3,200,532.40 to CHF 3,375,208.72 through the issuance of 17,467,632 fully paid-up registered
shares with a nominal value of CHF 0.01 per share out of its authorised share capital. The newly
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Corporate Governance Report
82
issued shares had been fully allocated to Al Obeikan Group for Investment Company CJS as part
of the purchase price for the purchase of the remaining shares in its joint venture companies
in Saudi Arabia (i.e. Al Obeikan SIG Combibloc Company Ltd., Riyadh) and in the UAE (i.e. SIG
Combibloc FZCO, Dubai).
2.4
Shares, participation certificates and profit-sharing certificates
The shares are registered shares with a nominal value of CHF 0.01 each and are fully paid-
in. Each share carries one vote at a shareholders’ meeting. The shares rank pari passu in all
respects with each other, including, in respect of entitlements to dividends, to a share in the
liquidation proceeds in the case of a liquidation of the Company, and to subscription and
advance subscription rights.
The Company issues its shares as uncertificated securities (Wertrechte), within the meaning
of art. 973c of the Swiss Code of Obligations (“CO”) and in accordance with art. 973c CO, the
Company maintains a register of uncertificated securities (Wertrechtebuch).
The shares which are entered into the main register of SIX SIS AG consequently constitute book-
entry securities (Bucheffekten) within the meaning of the Federal Act on Intermediated Securities
(“FISA”).
The Company has neither outstanding participation certificates nor shares with preferential rights.
2.5 Dividend-right certificates (Genusscheine)
The Company has not issued any profit-sharing certificates (Genussscheine).
2.6
Limitations on transferability and nominee registrations
According to art. 7 of the Articles of Association, any person holding shares will upon application
be entered in the share register without limitation as shareholders with voting rights, provided
it expressly declares to have acquired the shares in its own name and for its own account.
Any person that does not expressly state in its application to the Company that the relevant shares
were acquired for its own account may be entered in the share register as a shareholder with voting
rights without further inquiry up to a maximum of 5% of the issued share capital outstanding at
that time. Above this limit, shares held by nominees are entered in the share register with voting
rights only if the nominee in question makes known the names, addresses and shareholdings of
the persons for whose account it is holding 1% or more of the outstanding share capital available
at the time, and provided that the disclosure requirement stipulated in the FMIA is complied
with. In addition, the Board of Directors has the right to conclude agreements with nominees
concerning their disclosure requirements. Such agreements may further specify the disclosure of
beneficial owners and contain rules on the representation of shareholders and the voting rights.
The percentage limit mentioned above also applies if shares are acquired by way of exercising
subscription, advance subscription, option or conversion rights arising from shares or any other
securities issued by the Company or any third party.1
The setting and cancelling of the limitation on transferability in the Articles of Association
require a resolution of the shareholders’ meeting of the Company passed by at least 2/3 of the
represented share votes and an absolute majority of the par value of represented shares.
1
For a comprehensive description on the limitations to transferability and nominee registration refer to art. 7 of the Articles of Association.
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83
2.7
Convertible bonds and warrants/options
As of 31 December 2021, the Company has no outstanding bonds or debt instruments convertible
into or option rights in the Company’s securities.
As of 31 December 2021, a total of 763,636 Performance Share Unit (“PSU”) and Restricted Share
Unit (“RSU”) awards were outstanding, subject to fulfilment of pre-defined vesting conditions,
in connection with SIG’s compensation framework, in particular the SIG Long-Term Incentive
Plan. Each awarded PSU and RSU represents the contingent right to receive one SIG share. The
Group expects to settle its obligation under these plans and arrangements by using own shares
(treasury shares) or, alternatively, by using shares issued out of conditional share capital. If the
PSUs and RSUs were fully vested and exclusively shares out of conditional share capital were
used, this would increase the existing share capital by approximately 0.43%. Please refer to the
Compensation Report on > pages 111 and 123 for further information pertaining to any PSUs
and RSUs awarded as an element of executive compensation.
Furthermore, the Group introduced in 2020 an equity investment plan (“EIP”) for a wider group
of management in leadership positions, other key employees and talents under which the
participants may choose to invest in shares in the Company at market value. The number of
employees invited to participate in the EIP is limited per year to 2% of the Group’s employees.
The amount a participant may invest per year is limited to the value of the annual short-term
incentive target amount of such participant for the relevant year. The shares are blocked for
three years. For each purchased share, the Group grants the participants two matching options
to purchase another two shares at a pre-defined exercise price at the end of a three-year
vesting period. The Group expects to settle its obligations under these plans and arrangements
by using own shares (treasury shares) or, alternatively, by using shares issued out of conditional
share capital. If the options were fully vested and exclusively shares out of conditional share
capital were used, this would increase the existing share capital by approximately 0.09%. Please
refer to note 31 of the consolidated financial statements for the year ended 31 December 2021
for additional information about the EIP options.
3.
Board of Directors
3.1 Members of the Board of Directors
The Articles of Association provide that the Board of Directors shall consist of a minimum of
three members, including the chair of the Board (“Chair”). Currently, the Board consists of the
following nine members:
Name
Nationality
Andreas Umbach
Swiss and German
Matthias Währen
Colleen Goggins
Swiss
American
Werner Bauer
Swiss and German
Wah-Hui Chu
Mariel Hoch
Nigel Wright2
Chinese
Swiss and German
Canadian
Abdallah al Obeikan
Saudi Arabian
Martine Snels
Belgian
Position
Chair
Member
Member
Member
Member
Member
Member
Member
Member
Since
Expires1
2018
2018
2018
2018
2018
2018
2014
2021
2021
AGM 2022
AGM 2022
AGM 2022
AGM 2022
AGM 2022
AGM 2022
AGM 2022
AGM 2022
AGM 2022
1
2
All Board members are elected annually in accordance with Swiss corporate law and the Articles of Association.
Nigel Wright has decided not to stand for re-election at the AGM 2022.
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At the annual general meeting of the Company (“Annual General Meeting” or “AGM”) on
21 April 2021 (“Annual General Meeting 2021” or “AGM 2021”) all the previous seven members
of the Board were re-elected and two new members of the Board were elected, each for a one-
year term of office.
All current members of the Board of Directors are non-executive directors. Other than Abdallah
al Obeikan who served from 2000 to 2021 as the CEO of the SIG Combibloc Obeikan joint venture
companies that became fully owned subsidiaries of the Company in February 2021, none of the
members of the Board of Directors has been a member of the management of the Company
or a subsidiary of the Group in the three years preceding the year under review. Furthermore,
from 2015 until the listing of the Company on 28 September 2018 (“IPO”), Colleen Goggins,
Werner Bauer, Wah-Hui Chu, and Nigel Wright served as advisory board members of the
Company. The Board of Directors determines independence annually in accordance with the
Company’s independence criteria set forth in the Organisational Regulations. Pursuant to the
Company’s independence criteria, all members of the Board of Directors are deemed to be
independent, except for Abdallah al Obeikan.
Andreas Umbach is a Swiss and German citizen and has served as the Chair since the Initial
Public Offering in 2018. Mr Umbach has further served as the chair of the board of directors of
Landis+Gyr Group AG (SIX: LAND) since 2017, as the chair of the supervisory board of Techem
Energy Services GmbH since 2018 and as the chair of the board of directors of Rovensa SA
since 2020. He has been the president of the Zug Chamber of Commerce and Industry since
2016. Mr Umbach previously served as a member of the board of Ascom Holding AG (SIX:
ASCN) (2010–2020), from 2017 to 2019 as its chair. He also served as a member of the board
of directors of WWZ AG (2013–2020) and as a member of the board of directors of LichtBlick SE
(2012–2016). From 2002 to 2017, Mr Umbach was the president and CEO/COO of Landis+Gyr AG.
Prior to serving as CEO, Mr Umbach served as president of the Siemens Metering Division within
the Power Transmission and Distribution Group and held other positions within Siemens.
Mr Umbach holds an MBA from the University of Texas at Austin and an MSc in mechanical
engineering (Diplomingenieur) from the Technical University of Berlin.
Matthias Währen is a Swiss citizen and has served as a member of the Board of Directors since
the IPO. Mr Währen has further served as a member of the board of directors of Keto Swiss AG
since 2020, of Bloom Biorenewables SA since 2020 and as a member of the board of directors
of ph. AG since 2020, as well as being a member of the board of trustees of the Givaudan
Foundation (since 2013) and the HBM Fondation (since 2018). Mr Währen was previously
a member of the regulatory board of SIX Swiss Exchange from 2006 to 2017, a member of
the board of scienceindustries from 2009 to 2017, a member of the board of Swiss Holdings
from 2015 to 2017 and a member of the board of directors of various Givaudan subsidiaries
from 2005 to 2019. Most recently, he served as CFO and a member of the executive committee
of Givaudan SA from 2005 until his retirement in 2017. Prior to that, he served as the global head
of finance and informatics of the Roche vitamin division and held a variety of other positions
at Roche, including vice president finance and informatics at Roche USA, Nutley, New Jersey,
head of finance and information technology at Nippon Roche, Tokyo and finance director of
Roche Korea. Mr Währen started his career in corporate audit at Roche in 1983. Mr Währen
holds a master’s degree in economics from the University of Basel, Switzerland.
Colleen Goggins is an American citizen and has served as a member of the Board of Directors
since the IPO. From 2015 until the IPO, she served as an advisory board member for the Company.
Ms Goggins also currently a member of the board of directors of TD Bank Group (TSW: TD)
(since 2012), where she serves on the risk committee, a member of the supervisory board
of Bayer AG (ETR: BAYN) (since 2017), where she serves on the nominating and ad hoc legal
committee, and a member of the board of directors of IQVIA (NYSE: IQV) (since 2017), where she
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sits on the audit and nominating and governance committees. Ms Goggins is also a member of the
advisory boards of ZO Skin Health (since 2020), Sabert Inc. (since 2020) and Acacium (since 2021).
She has been a member of the University of Wisconsin Foundation and a member of the board of
the University’s center for brand and product management, a member of the board of directors
of New York Citymeals on Wheels and a trustee of the International Institute of Education.
Ms Goggins previously served as a supervisory board member for KraussMaffei from 2013
to 2016 and as a member of the board of directors of Valeant Pharmaceuticals International
from 2014 to 2016, where she was a member of the nominating committee and special ad hoc
committee. Prior to that, Ms Goggins worked at Johnson & Johnson until 2011, where she held
various leadership positions, including member of the Johnson & Johnson Executive Committee,
worldwide chair of the consumer group, company group chair of North America, and president
of the Johnson & Johnson Consumer Products Company, among others. Ms Goggins holds a
Bachelor of Science (“BSc”) degree in food chemistry from the University of Wisconsin-Madison
and a master’s degree in management from the Kellogg Graduate School of Management at
Northwestern University.
Werner Bauer is a Swiss and German citizen and has served as a member of the Board of
Directors since the IPO. From 2015 until the IPO, he served as an advisory board member for
the Company. Mr Bauer is also currently vice chair of the board of directors of Givaudan SA
(SIX: GIVN) (since 2014) and Bertelsmann SE & Co. KGaA (since 2012), chair of the board of trustees
at the Bertelsmann Foundation (since 2011), and as a member of the board of directors of Lonza
Group AG (SIX: LONN) (since 2013). From 2011 until 2018 he also served as a member of the
boards of directors of GEA-Group AG. Prior to that he held a number of other board positions,
including chair of the board of directors of Nestlé Deutschland AG (from 2005 to 2017) and chair
of the board of directors of Galderma Pharma SA from (2011 to 2014). Most recently, Mr Bauer
was the executive vice president and head of innovation, technology, research & development
for Nestlé SA from 2007 to 2013, and prior to that he served as executive vice president and
head of technical, production, environment, research & development for Nestlé SA and held
other positions within Nestlé. Furthermore, Mr Bauer served as chair of the board of directors of
Sofinol S.A. (from 2006 to 2012), and as a member of the board of directors of L’Oréal (from 2005
to 2012) and of Alcon Inc. (from 2002 to 2010). Mr Bauer started his career in 1980 as a professor
in chemical engineering at Hamburg Technical University, after which he was a professor in food
bioprocessing and director of the Fraunhofer Institute for Food Technology & Packaging at the
Technical University of Munich. Mr Bauer holds a diploma and PhD in chemical engineering from
the University of Erlangen-Nürnberg.
Wah-Hui Chu is a Chinese citizen and has served as a member of the Board of Directors since
the IPO. From 2015 until the IPO, he served as an advisory board member for the Company.
Mr Chu is currently also the founder and chair of iBridge TT International Limited (Hong Kong)
since 2018, a member of the board of directors of Mettler Toledo International (NYSE: MTD)
since 2007 and was the founder of M&W Consultants Limited (Hong Kong) in 2007. From 2013
to 2014 when he retired, Mr Chu served as the CEO and a member of the board of directors of
Tingyi Asahi Beverages Holding, and from 2008 to 2011 he acted as executive director and CEO
of Next Media Limited. He also served as member of the board of directors of Li Ning company
Limited from 2007 to 2012 and as chair of PepsiCo Investment (China) Limited from 1998
to 2007, and again from 2012 to 2013. Mr Chu spent many years as an executive at PepsiCo,
serving as non-executive chair of PepsiCo International’s Asia region in 2008 and president of
PepsiCo International – China beverages business unit between 1998 and 2007. Before joining
PepsiCo, Mr Chu held management positions at Monsanto Company, Whirlpool Corporation,
H.J. Heinz Company and the Quaker Oats Company. Mr Chu holds a BSc in agronomy from the
University of Minnesota and an MBA from Roosevelt University.
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Mariel Hoch is a Swiss and German citizen and has served as a member of the Board of Directors
since the IPO. Ms Hoch has been a partner at the Swiss law firm Bär & Karrer since 2012. She is
currently also a serving member and vice chair of the board of directors of Comet Holding AG
(SIX: COTN) (since 2016), where she also chairs the nomination and compensation committee.
Furthermore, she is a member of the board of directors of Komax Holding AG (SIX: KOMN)
(since 2019), where she also sits on the audit committee, and of MEXAB AG (since 2014). Ms Hoch
served as a member of the board of directors of Adunic AG from 2015 to 2018. She has been a
member of the foundation board of The Schörling Foundation since 2013 and a member of the
foundation board of the Irene M Staehelin Foundation since 2020. Ms Hoch was also co-chair of
the Zurich Committee of Human Rights Watch between 2017 and 2021. Ms Hoch was admitted
to the Zurich bar in 2005 and holds a law degree and a PhD from the University of Zurich.
Nigel Wright is a Canadian citizen and has been a member of the Board of Directors since 2014.
Mr Wright is a senior managing director at Onex Corporation, (TSE: ONEX) where he manages
European origination efforts in the business services, healthcare and packaging sectors for Onex’s
large-cap fund, Onex Partners. Furthermore, he is a member of Onex Partners’ investment
committee. He currently serves as non-executive chair of Acacium Group as non-executive chair
of Childcare BV (operating as KidsFoundation), as non-executive chair of Tes Global (since 2022),
as non-executive chair of Canadian Conservatives Abroad and as trustee of the Policy Exchange.
Mr Wright joined Onex in 1997, although from 2010 to 2013, he worked as chief of staff for the
Prime Minister of Canada. Prior to joining Onex, Mr Wright was a partner at the law firm of Davies,
Ward & Beck, and before that he worked in policy development in the office of the Prime Minister
of Canada. Mr Wright holds an LL.M. from Harvard Law School, an LL.B. (with honours) from the
University of Toronto Law School and a bachelor’s degree in politics and economics from Trinity
College at the University of Toronto.
Abdallah al Obeikan is a Saudi Arabian citizen and has served as a member of the Board of
Directors since April 2021. Mr al Obeikan is also currently a member of the board of directors
of Arabian Shield Cooperative Insurance Company (TADAWUL: ARABIAN SHILED), listed on
Tadawul Stock Exchange, KSA. He furthers serves as member of the board of directors and
CEO of the Obeikan Investment Group (OIG) – a major player in packaging, digital solutions
and education industries – where he also holds board and management positions in several
OIG subsidiaries. In addition, Mr al Obeikan is chair of Obeikan AGC Glass Company, chair of
Riyadh Polytechnic Institute, a member of the board of directors of National Water Company,
a member of the board of directors of Social Development Bank and a member of the advisory
board of KSA agencies. Abdallah al Obeikan joined the Obeikan family business in 1987 and was
CEO of the SIG Combibloc Obeikan joint venture companies from 2000 to 2021. Mr al Obeikan
holds a BSC in Electrical Engineering, King Saud University, Riyadh, K.S.A.
Martine Snels is a Belgium citizen and has served as a member of the Board of Directors since
April 2021. Ms Snels is also currently director and chair of the Remco Electrolux Professional AB
(since 2019) and director and member of the audit committee and remuneration committee of
Resilux NV (since 2019). In addition, Martine Snels is the founder and CEO of L’Advance BV (since 2020),
a member of the supervisory board of URUS Group LLC (since 2021) and a member of the
supervisory board and chair of the Remco VION Food Group NV (since 2020). Prior to that she
was a member of the executive board of GEA Group AG (from 2017 to 2020) and held various
leadership roles at Royal Friesland Campina NV (from 2012 to 2017), Nutreco NV (from 2003
to 2012) and Kemin Industries (from 1996 to 2003). Ms Martine Snels holds a Master of Science in
Agricultural Engineering at K.U. Leuven, Belgium.
As of 31 December 2021, there are no material business relationships of any Board member
with the Company or with any subsidiary or joint venture company.
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3.2 Number of permissible activities
In the interest of good governance, the Company’s Articles of Association limit the number of
outside mandates by the members of our Board as follows:
(i) up to four mandates in listed firms;
(ii) up to ten mandates in non-listed firms1; and
(iii) up to ten mandates in foundations, associations, charitable organisations and
other legal entities.
Such a mandate is deemed to be any activity in superior governing or administrative bodies of
legal entities that are obliged to be registered in the commercial register or any comparable
foreign register, other than the Company and any entity controlled by or controlling the Company.
The Board of Directors shall ensure that such activities do not conflict with the exercise of their
duties to the Group. Functions in various legal entities that are under joint control, or in entities
in which this legal entity has a material interest, are counted as one function.
3.3
Election and term of office
The members of the Board of Directors are elected individually each year by the Annual General
Meeting of the Company for a term of office of one year and can be re-elected. The Chair of
the Board of Directors is also elected each year by the Annual General Meeting for a period
of office of one year. There is no limit on the term in office. The initial election year of each
Board member is shown in the table on > page 83.
3.4
Internal organisation – Division of roles
within the Board of Directors and working methods
The Board of Directors represents the Company vis-à-vis third parties and attends to all matters
which have not been delegated to or reserved for another corporate body of the Company.
The Chair convenes meetings of the Board of Directors as often as the Group’s business
requires, but at least four times a year. The Chair prepares the meetings, draws up the agenda,
and chairs them. Any member of the Board can ask for a meeting to be convened and for the
inclusion of an item on the agenda. In order to pass resolutions, not less than a majority of
the Board members must be participating in the meeting. Except as required by mandatory
law, the Board will adopt resolutions by a simple majority of the votes cast. In case of a tie, the
Chair has no casting vote. Board resolutions may also be passed in writing by way of circular
resolution, provided that no member of the Board of Directors requests oral deliberation (in
writing, including by email) of the Chair or the secretary. Board resolutions by means of a written
resolution require the affirmative vote of a majority of all the members of the Board.
4.
Committees
The Board of Directors may delegate the preparation and execution of its decisions to
committees or to its individual members. The Board of Directors has appointed three standing
committees: the Audit and Risk Committee, the Compensation Committee and the Nomination
and Governance Committee. For each of the committees, the Board of Directors elects a chair
from the members of the Board of Directors. The period of office of all Committee members is
one year. Re-election is possible.
1
Pursuant to art. 727 para. 1 number 1 CO.
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Subject to the provisions of the Articles of Association1, the Audit and Risk Committee and the
Compensation Committee shall generally comprise three or more members of the Board of
Directors. The Nomination and Governance Committee shall generally comprise two or more
members of the Board of Directors.
4.1
Compensation Committee
As required by Swiss law, the members of the Compensation Committee are elected each year
by the Annual General Meeting. As of 31 December 2021, the members of the Compensation
Committee were Colleen Goggins (chair), Mariel Hoch and Wah-Hui Chu.
Meetings of the Compensation Committee are held as often as required but in any event at
least three times a year, or as requested by any of its members.
The members of the Compensation Committee shall be non-executive and independent, and
a majority of the members of the Compensation Committee, including its chair, should be
experienced in the areas of succession planning and performance evaluation, as well as the
compensation of members of Boards of Directors and executive management boards.
The Compensation Committee shall assist the Board in fulfilling its responsibilities relating to
the compensation of the members of the Board of Directors and the Group Executive Board.
The Compensation Committee’s responsibilities include, inter alia:
•
issuance and review of the compensation policy and the performance criteria and periodical
review of the implementation and submission of suggestions and recommendations to the
Board, including as regards compliance with applicable laws;
• preparation of the Board of Directors’ proposals to the Annual General Meeting regarding
the compensation of the Board of Directors and the Group Executive Board;
• review of the principles and design of compensation plans, long-term incentive and equity
plans, pension arrangements and further benefits for the Group Executive Board, including
review of the contractual terms of the members of the Group Executive Board and submission
of adjustments to the Board of Directors for approval;
• for each performance period, preparation of the decisions for the Board of Directors regarding
the compensation of the members of the Board of Directors and the Group Executive Board,
including the breakdown of compensation elements (within the amount approved by the
Annual General Meeting);
• submission of suggestions to the Board of Directors regarding the recipients of performance-
related and/or long-term incentive compensation and submission of suggestions to the
Board of Directors regarding the definition of the annual or other targets for performance-
related and/or long-term incentive compensation; and
• review of the compensation report and submission to the Board of Directors for approval.
The Board of Directors may entrust the Compensation Committee with additional duties in
related matters. The Compensation Committee is required to report its activities to the Board of
Directors on a regular basis and to make recommendations and propose appropriate measures
to the Board of Directors.2
1 https://www.sig.biz/investors/en/governance/articles-of-association.
2 The organisation and responsibilities the Compensation Committee are stipulated in the Articles of Association (art. 21).
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4.2
Audit and Risk Committee
The members and the chair of the Audit and Risk Committee are appointed by the Board
of Directors. As of 31 December 2021, the members of the Audit and Risk Committee were
Matthias Währen (chair), Mariel Hoch and Werner Bauer.
Meetings of the Audit and Risk Committee are held as often as required but, in any event at least
four times a year, or as requested by any of its members.
The members of the Audit and Risk Committee shall be non-executive and independent,
and a majority of the members of the Audit and Risk Committee, including its chair, must be
experienced in financial and accounting matters.
The Audit and Risk Committee (i) assists the Board in fulfilling its supervisory responsibilities
with respect to (a) the integrity of the Company’s financial statements and financial reporting
process, (b) the Company’s compliance with legal, regulatory, and compliance requirements,
(c) the system of internal controls, and (d) the audit process; (ii) monitors the performance of
the Company’s internal auditors and the performance, qualification, and independence of the
Company’s independent auditors; and (iii) considers the proper assessment and professional
management of risks by supervising the Company’s risk management system and processes.
The responsibilities of the Audit and Risk Committee in particular include, inter alia, to review
and discuss with the CFO and, both together with the CFO and separately, with the auditors
the Company’s annual and semi-annual and quarterly (if quarterly financial statements are
prepared) financial statements and reports intended for publication, as well as any other
financial statements intended for publication. The Audit and Risk Committee also recommends
the annual financial statements for approval by the Board of Directors for submission to the
Annual General Meeting, recommends the semi-annual financial statements for approval by
the Board of Directors and approves quarterly (if quarterly financial statements are prepared)
financial statements for publication. In addition, the Audit and Risk Committee discusses with the
CFO and the auditors significant financial reporting issues and judgments made in connection
with the preparation of the Company’s financial statements, including any significant changes
in the Company’s accounting principles, the selection and disclosure of critical accounting
estimates, and the effect of alternative assumptions, estimates or accounting principles on the
Company’s financial statements.
In connection with the risk management of the Company, the Audit and Risk Committee
discusses with the CFO and, if appropriate, the Group General Counsel any legal matters
(including the status of pending or threatened litigation) that may have a material impact on
the Company’s business or financial statements and any material reports or inquiries from
regulatory or governmental agencies that could materially impact the Company’s business or
contingent liabilities and risks. Its members periodically review the Company’s policies and
procedures designed to secure compliance with laws, regulations and internal rules regarding
insider information, confidentiality, bribery and corruption, sanctions and adherence to ethical
standards, and assess the effectiveness thereof. The Audit and Risk Committee obtains and
reviews reports submitted at least annually by the Group General Counsel and any other
persons the committee has designated as being responsible for assuring the Company’s
compliance with laws and regulations. In this context, it informs the Board at least annually
about the most significant risks for the Company and the Group and how such risks are
managed or mitigated.
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The Board of Directors may entrust the Audit and Risk Committee with additional duties in financial
matters. In discharging its responsibilities, the Audit and Risk Committee has unrestricted and
direct access to all relevant information in relation to the Company and the Group. The Audit
and Risk Committee ensures that it is informed by the independent auditors on a regular basis.
The Audit and Risk Committee is required to report its activities to the Board of Directors on
a regular basis and to make recommendations and propose appropriate measures to the
Board of Directors.
4.3 Nomination and Governance Committee
The members and the chair of the Nomination and Governance Committee are appointed by the
Board of Directors. As of 31 December 2021, the members of the Nomination and Governance
Committee were Andreas Umbach (chair), Nigel Wright, Wah-Hui Chu and Werner Bauer.
Meetings of the Nomination and Governance Committee are held as often as required but, in
any event at least two times a year, or as requested by any of its members.
The majority of the members of the Nomination and Governance Committee shall be non-
executive and a majority of the members of the Nomination and Governance Committee,
including its chair, must be experienced in nomination of members of Boards of Directors and
the Group Executive Board and corporate governance matters.
The Nomination and Governance Committee assists the Board of Directors in fulfilling its
responsibilities and discharging the Board’s responsibility to (i) establish and maintain a process
relating to nomination of the members of the Board and the Group Executive Board and (ii) establish
sound practices in corporate governance across the Group. Its responsibilities include, inter alia,
assisting the Board to identify individuals who are qualified to become members of the Board or
qualified to become the CEO when vacancies arise and, in consultation with the CEO, members
of the Group Executive Board. Furthermore, the Nomination and Governance Committee reviews
the performance of each current member of the Board of Directors, the CEO and each of the
other members of the Group Executive Board. It also provides recommendations to the Board of
Directors as to how the Board’s performance can be improved.
The Nomination and Governance Committee also develops and makes recommendations to the
Board of Directors regarding corporate governance matters and practices, including effectiveness
of the Board of Directors, its Committees and individual directors. It also oversees the Company’s
strategy and governance in relation to corporate responsibility for environmental, social and
governance (ESG) matters, in particular regarding key issues that may affect the Company’s
business and reputation. In doing so, the Nomination and Governance Committee may consult
with the Responsibility Advisory Group, which consists of external ESG experts and was established
to support Group Executive Board with the development of SIG’s Way Beyond Good approach by
providing an external perspective.
The Board of Directors may entrust the Nomination and Governance Committee with additional
duties in related matters. The Nomination and Governance Committee is required to report
its activities to the Board of Directors on a regular basis and to make recommendations and
propose appropriate measures to the Board of Directors.
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5.
Frequency of meetings of the Board of Directors
and its Committees
The Chair convenes meetings of the Board of Directors as often as the Group’s business requires,
but at least four times a year, and whenever a member of the Board or the CEO requests a
meeting of the Board indicating the reasons for such meeting in writing.
The Board of Directors usually convenes four full-day ordinary meetings as well as an annual
joint strategy meeting with the Group Executive Board. The task at these meetings is to analyse
the positioning of the Group in the light of current macro-economic and Company-specific
circumstances and to review, and if necessary to redefine, the strategic orientation.
In view of the COVID-19 situation, the Board of Directors has adapted the schedule and format
of its meetings by increasing the number of meetings but shortening their duration and holding
most meetings virtually.
In the period under review, the Board has held 6 ordinary meetings, thereof 4 virtual half-day
meetings and 2 hybrid meetings with the majority of the Board being present in person, thereof
1 strategy meeting for two days and 1 meeting split over two half-days. In addition, the Board
held 2 extraordinary virtual meetings with an average duration of approximately 2.5 hours. In all
of these meetings, the full Board was present. Therefore, the board meetings had an overall
attendance of 100% in the period under review. Furthermore, the Board held 1 mandatory
regulatory compliance training with the full Board attending and 2 voluntary educational sessions
on environmental, social and governance matters and cyber security with the large majority of
the Board attending.
For the period under review, the Compensation Committee held 5 meetings with an average
duration of approximately 2 hours, all of which were virtual meetings. Furthermore, the
Compensation Committee held 2 extraordinary virtual meetings of 1 hour each. The meetings
had an overall attendance rate of 100%.
The Nomination and Governance Committee held 4 ordinary meetings with an average duration
of approximately 2 hours, all of which were virtual meetings. Furthermore, the Nomination and
Governance Committee held 2 extraordinary virtual meetings of 45 minutes each. The meetings
had an overall attendance rate of 100%.
The Audit and Risk Committee held 5 ordinary meetings and 1 extraordinary meeting with an
average duration of approximately 3 hours, 1 of which was in-person and 5 were virtual meetings.
The meetings had an overall attendance rate of 100%. The 5 ordinary meetings of the Audit and
Risk Committee were partially attended by the external auditors.
The Board meetings were, with the exception of certain directors-only sessions, usually attended
by the CEO, CFO and other members of the Group Executive Board and other representatives
of senior management. Some meetings of the Board of Directors were partially attended by
external advisers. Meetings of the Audit and Risk Committee were attended by the CFO and the
Chief Compliance Officer, and usually by the CEO. Meetings of the Compensation Committee
were regularly attended by an external advisor to the Compensation Committee, the CEO and
the Group’s Global Compensation and Benefits Manager. The Nomination and Governance
Committee meetings were regularly attended by the CEO and by a member of management
acting as Secretary.
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6.
Areas of responsibility
The Board, acting collectively, has the ultimate responsibility for the conduct of business of
the Company and for delivering sustainable shareholder and stakeholder value. The Board
sets the Company’s strategic aims, ensures that the necessary financial and human resources
are in place to meet the Company’s objectives, and supervises and controls the management
of the Company. It may take decisions on all matters that are not expressly reserved to the
shareholders’ meeting or to another corporate body by law, by the Articles of Association or the
Organisational Regulations. The Board’s non-transferable and irrevocable duties, as set out in
the CO and art. 19 para. 3 of the Articles of Association, include:1
• the ultimate direction of the Company and the power for issuing the necessary directives;
• determining the organisation of the Company;
• the overall structure of the accounting system, financial control and financial planning;
• the appointment and dismissal of those persons responsible for the conduct of business and
for representing the Company, the regulation of signatory authorities and the determination
of their other authorities;
• the ultimate supervision of the persons entrusted with the management of the Company, in
particular with respect to their compliance with the law, the Articles of Association, regulations
and directives;
• the preparation of the annual report (incl. statutory financial statements), compensation report
and the shareholders’ meeting, including the implementation of the resolutions adopted by
the shareholders’ meeting;
• the notification of a judge in case of over-indebtedness;
• the passing of resolutions regarding the subsequent payment of capital with respect to non-
fully paid-in shares and the respective amendments of Articles of Association;
• the passing of resolutions concerning an increase of the share capital and regarding the
preparation of capital increase reports as well as the respective amendments to the Articles of
Association; and
• the non-transferable and inalienable duties and powers of the Board of Directors by law, such
as the Swiss Federal Merger Act on Merger, Demerger, Transformation and Transfer of Assets
of 1 July 2004, as amended, or the Articles of Association.
In addition, Swiss law and the Organisational Regulations reserve to the Board the powers,
inter alia,
• to determine the overall business strategy, taking into account the information, proposals
and alternatives presented by the CEO;
• to set financial objectives and approve, via the budget and financial planning process,
the necessary means to achieve these objectives, including approving a capital allocation
framework;
• to decide on the Group entering into substantial new business areas or exiting from a
substantial existing business area, insofar as this is not covered by the current approved
strategic framework;
• to appoint and remove the CEO and the other members of the Group Executive Board;
• to set the risk profile and the risk capacities of the Group; and
• to approve all matters and business decisions where such decisions exceed the authority
delegated by the Board to its Committees, the CEO or the Group Executive Board.
1
The detailed description of these responsibilities and duties of the Board of Directors, its Committees and the Group Executive
Board are stipulated in the Articles of Association (https://www.sig.biz/investors/en/governance/articles-of-association) and
the Organisational Regulations (https://www.sig.biz/investors/en/governance/organizational-regulations).
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The Board of Directors has delegated the operational management of the Company and the
Group to the Group Executive Board headed by the CEO, subject to the duties and powers reserved
to the Board by Swiss law, the Articles of Association and the Organisational Regulations. The
Group Executive Board is responsible for implementing and achieving the Company’s corporate
objectives and for the management and control of all Group companies.2 The Group Executive
Board is directly supervised by the Board of Directors and its Committees.
Pursuant to the Organisational Regulations, the CEO is appointed upon recommendation by the
Nomination and Governance Committee and may be removed by the Board of Directors. The
other members of the Group Executive Board are appointed by the Board of Directors upon
recommendation by the Nomination and Governance Committee in consultation with the CEO
and may be removed by the Board of Directors.
7.
Information and control instruments vis-à-vis
Group Executive Board
The Board of Directors supervises the Group Executive Board and uses reporting and controlling
processes to monitor its operating methods. At each of its meetings, the Board of Directors
is informed by the CEO, or by another member of the Group Executive Board, of the current
business and significant events. At these meetings, members of the Board of Directors may ask
other members of the Board of Directors or the CEO to provide information about the Group
that they require in order to carry out their duties. The Chair has regular interaction with the CEO
between Board meetings. The course of business and all major issues of corporate relevance
are discussed at least once a month. Executive Management provides monthly reports to the
Board regarding the financial and operational performance of the business. All members of the
Board of Directors are notified immediately of any exceptional occurrences.
The Head of Internal Audit, the General Counsel, and auditing bodies assist the Board of
Directors in carrying out its controlling and supervisory duties. In addition, the Committees
monitor the performance of the Group Executive Board. The scope of this remit is agreed with
the Board of Directors.
The Committees regularly receive information in the form of Group reports relevant to their needs.
These reports are typically discussed in depth at regular meetings of the Committees involved. The
Group Executive Board defines and evaluates the Group’s most significant risks on the basis of a
coordinated and consistent approach to risk management and control. Based on a list of the most
important risks, the Group Executive Board establishes a list of measures to prevent and mitigate
potential loss and damage. The list is presented to the Audit and Risk Committee at least annually.
After review and discussion, the Audit and Risk Committee informs the Board of Directors, which
directs the Group Executive Board to ensure that the measures are put into practice.
In addition, the Board of Directors is supported by Internal Audit. The Audit and Risk Committee
reviews and discusses with the Head of Internal Audit material matters arising in internal audit
reports provided to the Audit and Risk Committee. Internal Audit has an unrestricted right to
demand information and examine the records of all Group companies and departments. In
addition, after consultation with the Audit and Risk Committee, the Group Executive Board may
ask Internal Audit to carry out special investigations above and beyond its usual remit. The Head
of Internal Audit submits a report to the Audit and Risk Committee at least annually. The Audit
and Risk Committee is responsible for reviewing and discussing such reports, the internal audit
plan for the Company and budgeted resources for Internal Audit.
2
The Group Executive Board exercises those duties which the Board of Directors has delegated to the management in accordance with
the Company’s Organisational Regulations and Swiss law.
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The SIG Group has risk management systems in place at all its Group companies. Potential risks
are reviewed periodically and significant risks to which the Company is exposed are identified
and assessed for probability of occurrence and impact. Action to manage and contain these
risks is approved by the Board of Directors.
8.
Group Executive Board
8.1 Members of Group Executive Board
The Group Executive Board is headed by the CEO and comprises seven members, specifically
the CEO, the CFO, CTO, the President and General Manager Europe, the President and
General Manager Asia Pacific, the President and General Manager Americas and the President
and General Manager MEA.
The Company announced in a press release on 29 October 2021 three new appointments to
the Group Executive Board with effect as of 1 January 2022. Fan Lidong and Angela Lu have
been appointed to manage the Asia Pacific region, taking over from Lawrence Fok, President
and General Manager Asia Pacific, who decided to leave the Company and resigned from the
Group Executive Board as of 31 December 2021. This move to a dual leadership structure is a
consequence of the Group’s growth in Asia Pacific. In addition, Suzanne Verzijden has joined the
Group Executive Board as Chief People and Culture Officer, reflecting the importance which SIG
attaches to people, culture and talent management.
The Group Executive Board comprised the following members on 31 December 2021:
Name
Samuel Sigrist
Frank Herzog
Ian Wood
José Matthijsse
Lawrence Fok1
Ricardo Rodriguez
Abdelghany Eladib
1
In office until 31 December 2021.
Nationality
Swiss
German
Swiss and British
Position
CEO
CFO
CTO
Dutch
President and General Manager Europe
Singaporean
President and General Manager Asia Pacific
Brazilian and Spanish
President and General Manager Americas
Egyptian
President and General Manager MEA
The biographies on the following pages provide information about the Group Executive Board
members in office on 31 December 2021.
Samuel Sigrist is a Swiss citizen and served as CFO and chair of the Middle East Joint Venture
from 2017. With effect from 2021, he became the new CEO of the SIG Group. Mr Sigrist joined
the Company in 2005 and has worked in various finance and corporate development roles,
including director of group controlling and reporting, head of finance/CFO of Europe and head
of group projects. From 2013 to 2017, Mr Sigrist was the Company’s President and General
Manager Europe, and prior to joining the Company, he worked as a consultant. Mr Sigrist holds
a bachelor’s degree in business administration from the Zurich University of Applied Sciences,
an MBA from the University of Toronto and a Global Executive MBA from the University of
St. Gallen. Mr Sigrist is also a Swiss certified public accountant.
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Frank Herzog is a German citizen and joined SIG in 2021 as CFO. Prior to SIG, Frank was the CFO
of VFS Global, based in Zurich and Dubai. He has previously held finance leadership positions
as CFO of Dematic Group in the USA and Head of Corporate Finance at the KION Group in
Germany. He also gained extensive experience in investment banking at Goldman Sachs,
Rothschild and Citigroup. Mr Herzog holds a graduate business degree from WHU Koblenz and
a Master of Business Administration degree from the University of Texas.
Ian Wood is a Swiss and British citizen and joined SIG in 2018 as Chief Supply Chain Officer and
became CTO in 2020. Previously, Mr Wood spent 15 years at Honeywell, initially in the supply
chain function and later as vice president and general manager of various business units within
the home and Building technologies segment. Prior to joining Honeywell, Mr Wood worked at
A.T. Kearney and Ford Motor Company. Mr Wood holds a master’s degree in manufacturing
engineering from Cambridge University, UK and an MBA from Cranfield School of Management,
UK.
José Matthijsse is a Dutch citizen and has held the position of President and General Manager,
Europe, since she joined SIG in 2021. She came with considerable experience in the food and
beverage industry, having held senior and general management positions at FrieslandCampina
and Heineken in a number of countries in Europe, Americas and Africa. Mrs Matthijsse holds
a Masters’ degree in Food Science Technology from Wageningen Agricultural University in the
Netherlands.
Lawrence Fok is a Singaporean citizen and has served as President and General Manager of the
Asia Pacific region since he joined the Company in 2012. Prior to joining the Company, Mr Fok held
senior management positions at Norgren China, Alcan Global Pharmaceutical Packaging, SCA
Packaging China and Avnet Asia. Mr Fok holds a bachelor’s degree in mechanical engineering,
an MSc in industrial and systems engineering from the National University of Singapore, and a
Grad. Dip. in financial management from the Singapore Institute of Management.
Ricardo Rodriguez is a Brazilian and Spanish citizen and has served as President and General
Manager of the Americas region since 2015. Mr Rodriguez joined the Company in 2003 and
previously served as Director and General Manager, South America and Technical Service
Director, South America. Prior to joining the Company, Mr Rodriguez worked at Tetra Pak in a
number of roles, including general manager of the Belo Horizonte branch, key account manager
and technical service manager. He holds a BSc degree in aeronautical/mechanical engineering
from the Technological Institute of Aeronautics in Brazil, an MBA from the Getúlio Vargas
Foundation and graduated from a specialist business management course at IMD-Lausanne.
Abdelghany Eladib is an Egyptian citizen and has held the position of President and General
Manager, Middle East and Africa, since 2021. Prior to his current position, he held the position
of Chief Operating Officer in the SIG Combibloc Obeikan joint venture companies that he
joined in 2017. Mr Eladib started his career in 1992 at Procter & Gamble, where he held various
positions. Later on, he also worked at other leading FMCG companies in the region. He holds a
Bachelor of Science degree in Mechanical Engineering, a Master of Business Administration and
a Diploma in Strategic Management from Jack Welsh Institute in USA.
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8.2 Number of permissible activities
In the interest of good governance, the Company’s Articles of Association limit the number of
outside mandates by the members of the Group Executive Board as follows:
(i) up to one mandate in listed firms1;
(ii) up to five mandates in non-listed firms; and
(iii) up to five mandates in foundations, associations, charitable organisations and
other legal entities.
Such a mandate is deemed to be any activity in superior governing or administrative bodies of
legal entities that are obliged to register in the commercial registry or any comparable foreign
register, other than the Company and any entity controlled by or controlling, the Company.
The Board of Directors shall ensure that such activities do not conflict with the exercise of their
duties to the Group. Functions in various legal entities that are under joint control, or in entities
in which this legal entity has a material interest, are counted as one function.
8.3 Management contracts
The Company has not entered into any management contracts with persons outside the Group
for the delegation of executive management tasks.
9.
Compensation, shareholdings and loans
All details of compensation, shareholdings and loans are listed in the Compensation Report on
> pages 106 until 125.
10.
Shareholders’ rights of participation
10.1 Restrictions of voting rights and representation
Each share that is entered in the share register entitles the shareholder to one vote. The voting
rights may be exercised only after a shareholder has been registered in the Company’s share
register as a shareholder with voting rights up to a specific qualifying day (record date) which is
designated by the Board of Directors. On application, persons acquiring shares are entered in
the share register as shareholders with voting rights without limitations, provided they expressly
declare having acquired the shares in their own name and for their own account and that they
comply with the disclosure requirement stipulated by the FMIA. Entry in the share register of
registered shares with voting rights is subject to the approval of the Company.
Entry may be refused based on the grounds set forth in art. 7, para. 3, para. 4, para. 5 and para. 6 of
the Articles of Association. The respective rules have been described in Section 2.5 “Limitations on
transferability and nominee registrations” of this Corporate Governance Report. If the Company
does not refuse to register the applicant acquirer as a shareholder with voting rights within
20 calendar days upon receipt of the application, the acquirer is deemed to be a shareholder with
voting rights. Acquirers that are not eligible for registration are entered in the share register as
shareholders without voting rights. The corresponding shares are considered as not represented
in the General Meeting. A revocation of the statutory restrictions of voting rights requires the
1
Pursuant to art. 727 para. 1 number 1 CO.
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approval of a simple majority of votes cast, regardless of the number of shareholders present or
shares represented. Abstentions and invalid votes do not count as votes cast.
The rights of shareholders to participate in General Meetings comply with legal requirements and
the Articles of Association (https://www.sig.biz/investors/en/governance/articles-of-association).
Every shareholder may personally participate in the General Meeting and cast his/her vote(s), or
be represented by a proxy appointed in writing, who need not be a shareholder, or be represented
by the independent proxy. Shareholders may issue their power of attorney and instructions to the
independent proxy by post or electronically. The independent proxy is obliged to exercise the
voting rights that are delegated to him/her by shareholders according to their instructions. Should
he/she have received no instructions, he/she shall abstain from voting.
On an annual basis, the Annual General Meeting elects the independent proxy with the right
of substitution. His/her term of office terminates at the conclusion of the next Annual General
Meeting. Re-election is possible. Should the Company have no independent proxy, the Board of
Directors shall appoint an independent proxy for the next Annual General Meeting.
10.2 Quorum requirements
Unless a qualified majority is stipulated by law or the Articles of Association, the General Meeting
makes its decisions on the basis of the relative majority of valid votes cast, regardless of the
number of shareholders present or shares represented. Abstentions and blank votes do not
count as votes. Resolutions require the approval of a simple majority of votes represented.
10.3 Convening the Annual General Meeting
The Annual General Meeting is convened by the Board of Directors or, if necessary, by the
Company’s independent auditors. Extraordinary General Meetings may be held when deemed
necessary by the Board of Directors or the Company’s auditors. Liquidators may also call a
General Meeting. Furthermore, Extraordinary General Meetings must be convened if resolved
at a General Meeting or upon written request by one or more shareholder(s) representing in
aggregate at least 10% of the Company’s share capital registered with the commercial register.
General Meetings are convened by publication in the Swiss Official Gazette of Commerce at
least 20 days prior to the date of the meeting. Such publication and letters of invitation must
indicate the date, time and venue of the meeting, the items on the agenda, and the wording of
any motions proposed by the Board of Directors or by shareholders who have requested the
convention of a General Meeting or the inclusion of an item on the meeting’s agenda.
10.4
Inclusion of agenda items
The Board of Directors is responsible for specifying the agenda. Registered shareholders with
voting rights individually or jointly representing at least 5% of the Company’s share capital or
shares with a nominal value of at least CHF 1 million may request that an item be placed on
the agenda of a General Meeting of the Company, provided they submit details thereof to the
Company in writing at least 45 calendar days in advance of the shareholders’ meeting concerned.
10.5 Registration in the share register
Only shareholders who are registered in the share register as shareholders with voting rights
on a specific qualifying day (record date) designated by the Board of Directors are entitled to
attend a General Meeting and to exercise their voting rights. In the absence of a record date by
the Board of Directors, the record date shall be ten days prior to the General Meeting.
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11.
Change of control and defence measures
11.1 Duty to make an offer
The AGM 2021 resolved to delete the “selective opting-out”, according to which the Onex Persons1
were under certain circumstances exempted from the obligation to submit a public takeover
offer pursuant to art. 135 para. 1 FMIA, from the Company’s Articles of Association. As a result,
the Company does no longer have a provision on opting-out or opting-up. Thus, the provisions
regarding the legally prescribed threshold of 331/3 % of the voting rights for making a public
takeover offer set out in art. 135 para. 1 FMIA is applicable.
11.2 Change of control clauses
There are no change-of-control provisions in favour of any member of the Board of Directors
and/or the Group Executive Board and/or other management personnel. However, in the event
of a change of control, restricted share units, performance share units as well as shares subject
to transfer restrictions or vesting periods granted to members of the Board and the Group
Executive Board may be subject to accelerated vesting or early lifting of restrictions under the
applicable plans.2
12. Auditors
12.1 Duration of the mandate and term of
office of the auditor in charge
The auditors are elected annually at the Annual General Meeting for a term of one year. The
grounds for selection of external auditors are customary criteria such as independence, quality,
reputation and cost of services. PricewaterhouseCoopers AG, St. Jakobstrasse 25, 4002 Basel,
Switzerland (“PwC”) have been the statutory auditors of the Company since the migration of
the Company from Luxembourg to Switzerland on 27 September 2018 and were re-elected at
the AGM 2021. Prior to the Company’s migration, the independent registered auditors (réviseur
d’entreprises agréé) of SIG Combibloc Group AG (formerly SIG Combibloc Group Holdings S.à r.l.)
were PricewaterhouseCoopers, Société cooperative, Luxembourg, who have been the independent
registered auditors of the Company since the period ended 31 December 2015. The main Group
companies are also audited by PwC.
Bruno Rossi (Audit expert) as auditor in charge is responsible for auditing the financial statements
of the Company as well as the consolidated financial statements of the Group since March 2020.
The lead auditor has to rotate every seven years in accordance with Swiss law.
1
Onex Partners IV LP, George Town, Cayman Islands; Onex Partners IV PV LP, Wilmington, Delaware, United States of America;
Onex Partners IV Select LP, George Town, Cayman Islands; Onex Partners IV GP LP, George Town, Cayman Islands; Onex US
Principals LP, Wilmington, Delaware, United States of America; Onex Partners Holdings Limited SARL, Munsbach, Grand Duchy of
Luxembourg; Onex Advisor Subco LLC, Delaware, United States of America; Onex SIG Co-Invest LP, George Town, Cayman Islands;
Wizard Management I GmbH & Co. KG, Munich, Germany and Wizard Management II GmbH & Co. KG, Munich, Germany, as well as
all other companies directly or indirectly held now or in the future by Onex Corporation, Toronto, Ontario, Canada.
2
For further information on compensation with respect to a change of control please refer to > pages 120 of the Compensation Report.
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12.2 Fees
The fees charged by PwC as the auditors of the Company and of the Group companies audited
by them, as well as their fees for audit-related and additional services, are as follows:
(in CHF 1,000)
Audit
Audit-related services
Tax and other services
Total
2021
1,531
195
159
1,885
12.3
Informational instruments pertaining to the auditors
The Board exercises its responsibilities for supervision and control of the external auditors
through the Audit and Risk Committee. The Audit and Risk Committee assesses the professional
qualifications, independence, quality and expertise of the auditors as well as the fees paid to
them each year and prepares an annual appraisal. It recommends to the Board proposals
for the general shareholders meeting regarding the election or dismissal of the Company’s
independent auditors. The assessment of the performance of the external auditor is based on
key criteria, such as efficiency on the audit process, validity of the priorities addressed in the
audit, objectivity, scope of the audit focus, quality and results of the audit reports, resources
used and the overall communication and coordination with the Audit and Risk Committee
and Group Executive Board as well as the audit fees. The Audit and Risk Committee further
coordinates cooperation between the external auditors and the internal auditors.
Prior to the audit, the auditors agree the proposed audit plan and scope, approach, staffing and
fees of the audit with the Audit and Risk Committee. Special assignments from the Board of
Directors are also included in the scope of the audit.
PwC presents to the Audit and Risk Committee, on an annual basis, a comprehensive report
on the results of the audit of the consolidated financial statements, the findings on significant
accounting and reporting matters, and findings on the internal control system, including any
significant changes in the Company’s accounting principles, the selection and disclosure of critical
accounting estimates, and the effect of alternative assumptions, estimates or accounting principles
on the Company’s financial statements as well as the status of findings and recommendations
from previous audits. The results and findings of this report are discussed in detail with the CFO
and the Audit and Risk Committee where representatives of the auditor explain their activities
and respond to questions. The Audit and Risk Committee also monitors whether and how the
Group Executive Board implements measures based on the auditor’s findings.
Each year, the Audit and Risk Committee evaluates the effectiveness of the external audit,
performance, fees and independence of the auditors and the audit strategy. The Board of
Directors discusses and reviews the scope of the audits and the resulting reports. On this basis,
it decides on any changes or improvements to be made. Representatives of the auditor attend
individual meetings or individual agenda items of meetings of the Audit and Risk Committee.
There is also regular contact between the auditors, the Group Executive Board, and the Audit
and Risk Committee outside of meetings. PwC as external auditor of the Group partially
attended the 5 ordinary meetings of the Audit and Risk Committee meetings in 2021 at which
they discussed, amongst other topics, the scope and certain results of the audit and reviews.
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Additional services or consulting assignments are delegated to the auditors only if they are
permitted by law and the auditor’s code of independence. The auditors are required to confirm
that their performance of these additional services will not affect the independence of their
auditing mandate. The Audit and Risk Committee pre-approves all permitted non-audit services
performed by the auditors, and reviews the compatibility of non-audit services performed
by them with their independence requirements. This procedure is aimed at ensuring PwC’s
independence in their capacity as auditors to the Group. PwC monitors its independence
throughout the year and confirms its independence to the Audit and Risk Committee annually.
13.
Information policy
The Group is committed to communicating in a timely and transparent way to shareholders,
potential investors, financial analysts and customers. Toward this end, the Board of Directors
takes an active interest in fostering good relations and engagement with shareholders and
other stakeholders. In addition, the Company complies with its obligations under the rules of
SIX Swiss Exchange, including the requirements on the dissemination of material and price-
sensitive information.
The Group publishes an annual report that provides audited consolidated financial statements,
audited financial statements and information about the Company including the business results,
strategy, products and services, corporate governance, corporate responsibility and executive
compensation. The annual report is published within four months after the 31 December balance
sheet date. The annual results are also summarised in the form of a press release. In addition,
the Company releases results for the first half of each year within three months after the 30 June
balance sheet date. The published half-year and annual consolidated financial statements
comply with the requirements of Swiss company law, the listing rules of SIX Swiss Exchange and
International Financial Reporting Standards (“IFRS”). Furthermore, the Group publishes trading
statements for the first and third quarters in the form of a press release. The quarterly press
releases contain unaudited financial information prepared in accordance with IFRS.
The Company’s annual report, half-year report, and quarterly releases are distributed pursuant
to the rules and regulations of SIX Swiss Exchange and are announced via press releases and
investor conferences in person or via telephone. An archive containing annual reports, half-year
reports, quarterly releases, and related presentations can be found at https://investor.sig.biz.
The corporate responsibility section of the annual report is being prepared in accordance with the
Global Reporting Initiative (GRI) G4 Guidelines Core option. An archive containing the corporate
responsibility reports that have been prepared in previous years can be found in the “Responsibility”
section at https://www.sig.biz/investors/en/performance/corporate-responsibility-report.
The Group reports in accordance with the disclosure requirements of art. 124 FMIA and the
ad hoc publication requirements of art. 53 of the listing rules of SIX Swiss Exchange. At https://
investor.sig.biz/en-gb/contact/, interested parties can register for the free Company email
distribution list in order to receive direct, up-to-date information at the time of any potentially
price-sensitive event (ad hoc announcements). Ad hoc announcements may be viewed at
https://www.sig.biz/investors/en/news-events/media-releases at the same time as notification
to SIX Swiss Exchange and for three years thereafter.
Notices to shareholders are made by publication in the Swiss Official Gazette of Commerce
(Schweizerisches Handelsamtsblatt). To the extent the Company communicates to its shareholders
by mail, such communications will be sent by ordinary mail to the recipient and address recorded
in the share register or in such other form as the Board of Directors deems fit.
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14. General blackout periods
All directors, officers and employees of any Group company are subject to general blackout
periods between the last date of the period for which financial performance data for public
release are established and ending on the close of trading on SIX Swiss Exchange one trading
day after the public release of the financial performance data for such period. During general
blackout periods, these persons are prohibited from trading in any shares of the Company and
in any option or conversion rights or any other financial instruments whose price is materially
dependent (meaning a degree of more than 33%) on the shares of the Company (together the
“Relevant Securities”).
Furthermore, members of the Board of Directors, the Group Executive Board as well as certain
employees of the Group notified by the Group General Counsel may only make transactions in
Relevant Securities during designated trading windows, subject to pre-clearance by the Group
General Counsel. The opening and closure of a trading window is determined by the CEO in
consultation with the CFO and the Group General Counsel.
Any exception to the aforementioned rules must be cleared through the Group General Counsel.
15.
Significant changes since 31 December 2021
The Company announced on 5 January 2022 that it had entered into an agreement to acquire
Pactiv Evergreen Inc.’s Asia Pacific Fresh operations which consists of the three target companies
Evergreen Packaging Korea Limited, Seoul, Evergreen Packaging (Shanghai) Co. Ltd, Shanghai
and Evergreen Packaging (Taiwan) Co. Ltd, Taiwan (the “PE Transaction”). The PE Transaction is
expected to close in the second or third quarter of 2022, subject to customary closing conditions.
Furthermore, on 1 February 2022, the Company announced that it had entered into an agreement
to acquire 100% of Scholle IPN, a privately-held company, from CLIL Holding B.V. (the “Scholle
Transaction”). The beneficial owner of CLIL Holding B.V. is Mr. Laurens Last. As part of the
purchase price consideration for the Scholle Transaction, SIG will transfer to CLIL Holding B.V.
33,750,000 newly issued shares of the Company, to be created out of the Company’s authorised
share capital. As a consequence, after consummation of the closing of the Scholle Transaction,
which is expected to occur before the end of the third quarter of 2022, Mr. Laurens Last (through
CLIL Holding B.V.) will hold approximately 9.1% of the shares in the Company and become the
largest single shareholder in the Company. In addition, the Board of Directors will propose to
the Annual General Meeting 2022 (i) to increase the number of shares that may be issued out of
authorised capital under the exclusion of shareholders’ subscription rights and (ii) that Mr. Last be
elected to the Board of Directors of the Company. Furthermore, the Board of Directors appointed
Mr. Ross Bushnell, president and CEO of Scholle IPN – subject to and as of the closing of the
Scholle Transaction – to the Group Executive Board. The consummation of the Scholle Transaction
is subject to customary closing conditions.
Further information on the above will be provided in the Company’s Corporate Governance
Report for the year 2022.
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The Company’s website:
https://www.sig.biz
Ad hoc messages (pull system):
https://www.sig.biz/investors/en/news-events/media-releases
Subscription for ad hoc messages (push system):
https://www.sig.biz/investors/en/contact
Financial reports:
https://www.sig.biz/investors/en/performance/historical-financial-statements
Corporate Responsibility Reports:
https://www.sig.biz/investors/en/performance/corporate-responsibility-report
Corporate calendar:
https://www.sig.biz/investors/en/news-events/overview
Contact address:
The SIG Combibloc Group Investor Relations Department can be contacted through the website
or by telephone, email or letter.
SIG Combibloc Group AG
Attn. Ingrid McMahon
Laufengasse 18
8212 Neuhausen am Rheinfall
Switzerland
+41 52 543 1224
Ingrid.mcmahon@sig.biz
Financial calendar
The important dates for 2022 include:
2021 Full Year Results
Intended publication of the Annual General Meeting 2022 invitation
Annual General Meeting 2022
Release of first quarter 2022 key financial data
Publication of half-year report 2022
Release of third quarter 2022 key financial data
1 March 2022
11 March 2022
7 April 2022
26 April 2022
26 July 2022
25 October 2022
Annual Report 2021 103
COMPENSATION
104 Letter from the Chairwoman
of the Compensation Committee
106 Compensation Report
1.
2.
3.
4.
5.
6.
7.
Introduction
Compensation governance
Compensation principles
Compensation framework
for the Board of Directors
Compensation framework
for the Group Executive Board
Shareholding Guidelines
Loans granted to members of
the Board of Directors or the
Group Executive Board
126 Report of the statutory auditor
Annual Report 2021
Compensation
Letter from the Chairwoman of the Compensation Committee
104
LETTER FROM THE CHAIRWOMAN
OF THE COMPENSATION COMMITTEE
Colleen Goggins
Chairwoman of the Compensation Committee
Dear Shareholders,
On behalf of the Board of Directors and the Compensation Committee, I am pleased to introduce
the Compensation Report of SIG Combibloc Group AG (“SIG” or the “Company”) for the year
ended 31 December 2021. This report on compensation complements our business, financial,
social responsibility and corporate governance reports and describes SIG’s compensation
system and its governance, as well as the underlying principles that ensure that compensation,
particularly the variable components, are linked to the overall performance of SIG.
The principles guiding SIG’s compensation framework are to attract, engage and retain executives
and employees, to drive sustainable performance and to encourage behaviours that are in line
with SIG’s values as well as with the long-term interests of shareholders. The Compensation
Committee regularly assesses, reviews and develops the compensation framework to ensure
that it is aligned with these principles.
In the past year, the Compensation Committee worked closely with the Nomination and
Governance Committee regarding succession planning for the various personnel changes in the
Group Executive Board. We are very proud that we have been able to expand the management
team with both internal and external talent. At the same time, we also succeeded in broadening
diversity, so that every gender is represented by at least 30% of the Group Executive Board.
Annual Report 2021 Compensation
Letter from the Chairwoman of the Compensation Committee
105
SIG is convinced that Diversity, Equity and Inclusion (DE&I) as well as an open corporate culture
are important drivers for innovation and successful collaboration. We are committed to ensuring
a workplace where employees are treated fairly, with equal employment, compensation and
development opportunities for all. The Committee closely observed the regulatory developments
and market trends and will keep abreast of further developments in this area.
SIG welcomes feedback from its shareholders. In 2021, we maintained a high level of engagement
with shareholders as we worked to consider and address their comments and questions. The
Compensation Committee believes that the current compensation framework is working well
but also continues to focus on its on-going refinement.
One of the changes to executive compensation as of 2021 was the inclusion of an ESG metric in
the short-term variable compensation. This underlines management’s on-going commitment to
sustainability as an integral part of SIG’s business strategy and activities. To further strengthen
the ESG focus, the Compensation Committee decided to increase the weighting of the ESG
metric starting from 2022. The chosen EcoVadis metric relates to SIG’s activities in the areas of
Environment, Labour & Human Rights, Ethics, and Sustainable Procurement and provides the
Company with an external perspective on its ESG activities and progress.
At the upcoming Annual General Meeting (“AGM”), we will ask our shareholders to approve
prospectively, in binding votes, the maximum aggregate amount of compensation for the Board
of Directors until the next AGM in 2023 and the maximum aggregate amount of compensation
for the Group Executive Board for the year 2023. Further, this Compensation Report will be
submitted to shareholders for a non-binding, consultative vote.
We believe that this report provides a comprehensive overview of SIG’s compensation philosophy
and approach. Further we are convinced that our remuneration system rewards performance in a
balanced and sustainable manner that is well-aligned with shareholders’ interests and equips SIG
with effective tools in a competitive work environment.
On behalf of SIG, the Compensation Committee and the entire Board of Directors, I would like to
thank you, our shareholders, for your contributions and your continued trust in SIG.
Colleen Goggins
Chairwoman of the Compensation Committee
Annual Report 2021 Compensation
Compensation Report
106
COMPENSATION REPORT
1.
Introduction
This Compensation Report has been prepared in compliance with Swiss laws and regulations,
including the Ordinance against Excessive Compensation in Listed Stock Companies. The
report is in line with the Directive on Information relating to Corporate Governance of SIX and
also takes into account the recommendations set out in the Swiss Code of Best Practice for
Corporate Governance of economiesuisse.
The Compensation Report contains the following information:
• A description of the compensation governance and compensation framework at SIG
• The compensation of the members of the Board of Directors (“Board”) for 2021
• The compensation of the Group Executive Board (“GEB”) for 2021
2.
Compensation governance
FIGURE 1: COMPENSATION GOVERNANCE AT SIG
Articles of
Association
approve
defined in
Annual
General
Meeting
Compensation
governance
decisions by …
Board of
Directors &
Compensation
Committee
defined in
Compensation
Committee
Charter
The compensation governance structure at SIG involves three primary bodies, as depicted in
Figure 1: (1) the Board, (2) the Compensation Committee, acting in an advisory capacity for the
Board and (3) SIG’s shareholders at the Annual General Meeting. The Compensation Committee
Charter and the Articles of Association outline and define the roles and responsibilities of these
bodies. Figure 2 shows the relevant provisions on compensation in the Articles of Association.
Annual Report 2021 Compensation
Compensation Report
107
FIGURE 2: RELEVANT PROVISIONS ON COMPENSATION IN THE ARTICLES OF ASSOCIATION OF SIG
Principles for the compensation
of the members of the Board and
the Group Executive Board
(Art. 24 to 26)
Members of the Board of Directors receive fixed compensation, while members of the
Group Executive Board receive fixed and variable compensation. The variable compensation
may include short-term and long-term variable compensation components. These are
governed by quantitative and qualitative performance criteria that take into account the
performance of SIG.
Compensation approvals
by the General Meeting (Art. 27)
The AGM has the authority to approve the maximum aggregate amount of compensation
for the Board of Directors for the ensuing term of office and the maximum aggregate
amount of compensation for the Group Executive Board for the following year.
Supplementary amounts available for
members joining the Group Executive
Board or being promoted within the
Group Executive Board to CEO after
the relevant approval of compensation
by the AGM (Art. 27, para. 4)
Retirement benefits (Art. 30)
SIG is authorised to pay compensation to such members of the Group Executive Board
without further approval even in excess of the maximum aggregate amount approved
by the AGM for the relevant year, provided that the sum of such excess amount is not
greater than 40% of the approved maximum aggregate amount of compensation for
the Group Executive Board for such year.
SIG may establish or join one or more independent pension funds for occupational
pension benefits. Instead, or in addition, SIG may directly offer retirement benefits (such as
pensions, purchase of health care insurances, etc.) outside of the scope of occupational
pension benefit regulations to members of the Group Executive Board and may pay them
out after retirement.
The Articles of Association can be found on the SIG homepage for investors
https://www.sig.biz/investors/en/governance/articles-of-association or downloaded
directly here: https://cms.sig.biz/media/5241/aoa-sig-combibloc-group-ag.pdf.
The roles of the AGM and the Compensation Committee are described in more detail in the
following paragraphs. The general split of responsibilities and authorities between the Board,
the Compensation Committee and the AGM is illustrated in Figure 3.
FIGURE 3: AUTHORITY TABLE REGARDING COMPENSATION
Compensation principles (Articles of Association)
Compensation strategy and guidelines
Key terms of compensation plans and programmes for
members of the Board of Directors and Group Executive Board
Total compensation for members of the Board of Directors
Total compensation and benefits for members
of the Group Executive Board
Employment and termination agreements for the CEO
Employment and termination agreements for
members of the Group Executive Board
Proposal
CEO
Compensation
Committee
Board of
Directors
AGM
Approval
(subject to
AGM approval)
Approval
(in case of changes,
binding vote)
Proposal
Proposal
Proposal
Proposal
Proposal
Review
Approval
Approval
Approval
(subject to
AGM approval)
Approval
(subject to
AGM approval)
Approval
Approval
Approval
(binding vote)
Approval
(binding vote)
Compensation Report
Individual total compensation of the CEO
Individual total compensation of other
members of the Group Executive Board
Proposal
Approval
Approval
(consultative vote)
Proposal
Proposal
Review
Approval
Approval
Annual Report 2021 Compensation
Compensation Report
108
Role of the shareholders – shareholder engagement
In line with SIG’s Articles of Association, particularly Art. 11 and Art. 27, the Board will submit
three separate compensation-related resolutions for shareholder approval at the 2022 AGM, as
illustrated in Figure 4:
FIGURE 4: OVERVIEW OF VOTES AT THE 2022 AGM
AGM 2022
AGM 2023
Vote at AGM 2022
Maximum aggregate
amount for the term
AGM 2022 – AGM 2023
Vote at AGM 2022
Maximum aggregate
amount for FY 2023
Board vote
(Binding)
Group Executive
Board vote
(Binding)
Report vote
(Consultative)
Vote at AGM 2022
Compensation
Report FY 2021
2021
2022
2023
Role of the Compensation Committee – activities during 2021
The Compensation Committee consists of three independent, non-executive Board members
who are elected annually and individually by the Annual General Meeting for a one-year term
until the following Annual General Meeting. The main role of the Compensation Committee is
to assist the Board in fulfilling its responsibilities relating to the compensation of the members
of the Board and the Group Executive Board of SIG. The Compensation Committee supports
the Board in discharging its duties, proposes guidelines regarding the compensation of
the members of the Board, the Chief Executive Officer (“CEO”) and the other members of the
Group Executive Board, proposes the maximum aggregate amounts of compensation to be
submitted to the Annual General Meeting for approval, and assists the Board in preparing the
related motions for the Annual General Meeting.
The Compensation Committee Chairwoman ensures that the Board members are kept informed
in a timely and appropriate manner of all material matters within the Compensation Committee's
area of responsibility.
The Compensation Committee Chairwoman convenes the meetings of the Compensation
Committee as often as the business affairs of SIG require, but at least three times a year. In 2021,
the Committee held seven meetings. Because of travelling restrictions due to the COVID-19
pandemic, all meetings were held as video conferences. The topics covered are described in
Figure 5. Details on the Compensation Committee members are provided in the Corporate
Governance Report on > page 88. All members of the Committee had full meeting attendance
during 2021.
Annual Report 2021 Compensation
Compensation Report
109
FIGURE 5: TOPICS COVERED BY THE COMPENSATION COMMITTEE IN 2021
Agenda Item
Jan
Feb
Jul
Aug
Sep
Dec
Principles
and design of
compensation
plans
Market intelligence (recent developments in
compensation, legal, governance landscapes)
Review of general target framework for
Short-Term Incentive and Long-Term Incentive
Compensation
Group Executive
Board
Short-Term Incentive Plan
– Target achievement 2020
– Target setting 2021
– Define KPI measures for 2022
Long-Term Incentive Plan
– Recommendation of plan participants and
target setting for grant 2021
– Outlook on first target assessment in 2022
Group Executive Board: Employment matters
going along with succession planning
Benchmarking and review target compensation
for the CEO and the Group Executive Board for 2022
Compensation
Board of Directors
Swiss Pension Fund insurance for members
of the Board and respective changes to the
Board of Directors Pay Policy
General
Framework
Communication
Benchmarking and review of compensation
for the Board of Directors
Shareholding Guidelines Assessment
Fair Pay – overview on recent developments
AGM invitation including determination of
the maximum amounts of compensation for the
Board of Directors (for the term AGM 2021 to AGM 2022)
and the Group Executive Board (year 2022)
Analysis of the compensation voting results of the AGM
and the proxy advisors’ feedback
Compensation Report
A performance review of members of the Board and of the Group Executive Board was
conducted by the Nomination and Governance Committee during 2021, with the members of
the Compensation Committee in attendance to ensure close coordination.
The Compensation Committee may ask members of the Group Executive Board, one or more
senior managers in the human resources function and third parties to attend meetings in
an advisory capacity and may provide them with all appropriate information. However, the
Compensation Committee also regularly holds private sessions (i.e. without the presence of
members of the Group Executive Board, senior managers or third parties). Further, all members
of the Board may attend any committee meeting as guests. The Chairman of the Board and
the members of the Group Executive Board did not attend the meeting when their own
compensation was discussed. The Chairwoman of the Compensation Committee reported to
the Board after each meeting on the substance of the meeting and explained the proposals of
the Compensation Committee to the Board of Directors. All documents and the minutes of the
Compensation Committee meetings are available to all members of the Board.
Annual Report 2021 Compensation
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110
The Compensation Committee may decide to consult external advisers for specific compensation
matters. In 2021, the Compensation Committee appointed HCM International Ltd. (“HCM”) as
an external independent advisor on certain compensation matters as well as on target setting
for the Long-Term Incentive Plan, as described in the section Long-Term Incentive Plan. Other
than for the aforementioned advice on compensation matters, HCM was not appointed for any
other mandates in 2021.
3.
Compensation principles
The compensation framework of SIG reflects the commitment to attract, engage and retain top
talent globally and to align the interests of SIG leaders with those of shareholders. SIG’s overall
compensation framework is long-term in nature and designed to reward outperformance
and effectively address underperformance, with performance defined relative to targets and,
in some cases, relative to peers. SIG endeavours to make its compensation principles simple
and transparent for the benefit of shareholders, Board and management. The compensation
principles are illustrated in Figure 6.
FIGURE 6: SIG COMPENSATION FRAMEWORK, OBJECTIVES AND PRINCIPLES
Objectives and principles
Be competitive to
attract and retain top
talent and at the same
time be reasonable in
terms of amount and
composition
Be balanced in terms
of weight between
base salary,
Short-Term Incentive
Plan and Long-Term
Incentive Plan
Be long-term as well
as simple and
transparent
Be developed
to reward
outperformance
and effectively tackle
underperformance
Be fully compliant
with relevant laws
and regulations
Be aligned with
shareholders'
interests
To assess SIG’s compensation system not only from an internal equity perspective but also from
an external competitiveness perspective, compensation is periodically benchmarked against
that of similar roles in comparable companies. The Compensation Committee uses this analysis
to review the composition, the level as well as the structure of the compensation of the Board
and the Group Executive Board on a regular basis.
For the Board, Swiss listed industrial companies are considered the most relevant reference
market for compensation comparison, reflecting the specific governance regime and regulatory
aspects of the Swiss market1. For the Group Executive Board, a broader industry-related
European comparator group is considered appropriate to assess compensation practices,
structure and pay levels given SIG’s international footprint and reflecting the recruiting market2.
In both cases, size criteria apply.
1 The comparison group used for the compensation benchmarking analysis of the Board conducted in 2021, consisted of the
following Swiss listed industrial companies: ARYTZA, Barry Callebaut, BKW, Bucher, Clariant, DKSH, dormakaba, Dufry, Flughafen
Zuerich, Geberit, Georg Fischer, OC Oerlikon, SFS Group, Straumann, Sulzer, Vifor Pharma.
2
The comparison group used for the compensation benchmarking analysis of the Group Executive Board conducted in 2021,
consisted of the following comparators: Aalberts, AMS, ARYTZA, Barry Callebaut, BKW, Bucher, Clariant, DKSH, DMG MORI,
dormakaba, Duerr, Dufry, Flughafen Zuerich, GEA; Georg Fischer, IMI, Kingspan, OC Oerlikon, SFS Group, Spirax-Sarco, Straumann,
Sulzer, Vifor Pharma, Weir.
Annual Report 2021 Compensation
Compensation Report
111
In 2021, benchmark analyses for both the Board and the Group Executive Board were
conducted by HCM International Ltd., based on the existing respective comparison groups. The
benchmarking underlined that SIG is positioned comparably to its peers with regards to level and
structure of the compensation packages. As a consequence, no adjustments of compensation
with regards to the packages, both in terms of level and structure, for neither the members of
the Group Executive Board nor for the Board of Directors were considered necessary.
Figure 7 provides an overview of the compensation elements for the Board and the Group
Executive Board:
FIGURE 7: OVERVIEW OF COMPENSATION ELEMENTS
FOR THE BOARD OF DIRECTORS AND THE GROUP EXECUTIVE BOARD
Board of Directors
Group Executive Board
Annual base salary
Annual base fee
Annual Committee fee
Pension contributions
Other benefits
Short-Term Incentive Plan
Long-Term Incentive Plan
n
o
i
t
a
s
n
e
p
m
o
c
n
o
i
t
a
s
n
e
p
m
o
c
s
t
n
e
m
e
l
e
s
t
n
e
m
e
l
e
d
e
x
i
F
e
l
b
a
i
r
a
V
Where required by Swiss law, members of the Board of Directors may be insured in the pension
fund of the Company. If so, contributions will be fully funded by the respective member of the
Board. Additional details for each compensation element are included later in this report.
4.
Compensation framework for the Board of Directors
Compensation overview for the Board of Directors
To underline the role of the Board to perform independent oversight and supervision of SIG, the
entire compensation of the Board is fixed and does not contain any variable pay component.
The compensation for the members of the Board of Directors is composed of two components:
a fixed annual base fee and fixed annual Committee fee(s) for assuming the role of the
Chairperson of a Board Committee or as a member of Board Committees. Only ordinary
members of the Board are entitled to the additional Committee fees. The compensation of the
Chairman of the Board consists of the annual base fee only. Required employee social security
contributions under the relevant country’s applicable law are included in the compensation.
Where required by Swiss law, members of the Board of Directors are insured in the Company’s
pension plan. However, the employer pension contribution is entirely funded by the respective
member of the Board of Directors. This means that the member of the Board pays for the
totality of the pension contributions (employee and employer portion) while the Company
does not make any contributions. In 2021, only the Chairman of the Board was insured via
the Company’s pension plan. No additional compensation components such as lump-sum
expenses or attendance fees are awarded to any member of the Board. The compensation
levels for the members of the Board of Directors remained unchanged from those established
in 2018.
Annual Report 2021
Compensation
Compensation Report
112
The amount of the annual base fee and annual Committee fees for the Chairperson and the
members of the respective Committees are illustrated in Figure 8.
FIGURE 8: OVERVIEW OF THE BOARD OF DIRECTORS’ FEES
Annual committee fees (in CHF, gross)
Annual base
fee (in CHF,
gross)
Audit and Risk
Compensation
Nomination and
Governance
Chair
Member
Chair
Member
Chair
Member
Chairperson
550,000
Not entitled
Ordinary member
175,000
50,000
25,000
40,000
15,000
40,000
15,000
The individual sum of the annual base fee and, where applicable, the annual committee fee per
member continues to be paid 60% in cash and 40% in blocked SIG shares.
The equity component is intended to further strengthen the long-term focus of the Board in
performing its duties and to align the Board members’ interests with those of SIG’s shareholders.
Both the cash and share elements are paid out in arrears on a quarterly basis in four equal
instalments. A three-year blocking period is applied to the SIG shares, expiring at the third
anniversary of each respective grant. This approach is illustrated in Figure 9.
FIGURE 9: COMPENSATION APPROACH OF THE BOARD OF DIRECTORS
Share element
40%
Cash element
3-year blocking period
Share
element
60%
Cash
element
Pay mix
Term
Term +1
Term +2
Term +3
Annual Report 2021 Compensation
Compensation Report
113
Compensation awarded to the Board of Directors (audited)
Table 1 summarises the compensation for 2021 of the nine non-executive members of the
Board. The Board was expanded at the AGM in 2021 to include two additional members, as
outlined in the Corporate Governance Report. As in previous years, Nigel Wright is associated
with Onex Corporation, a former major shareholder of SIG (2018 until 2020) and again waived
any form of compensation for his service on the Board in 2021.
TABLE 1: TOTAL COMPENSATION OF THE BOARD OF DIRECTORS IN 2021 (1 JANUARY – 31 DECEMBER)
INCLUDING INFORMATION OF THE PRIOR YEAR
Board
member-
ship
Chair
ARC1
CC2
Chair
Chair
Members of the
Board of Directors on
31 December 2021
Andreas Umbach
Matthias Währen
Colleen Goggins
Werner Bauer
Wah-Hui Chu
Mariel Hoch
Martine Snels8
Abdallah al Obeikan8
Nigel Wright
Total
Settled
in cash,
CHF4
Settled in
SIG shares,
CHF5
Social
security
payments,
CHF6
Total com-
pensation
earned in
2021, CHF
Total com-
pensation
earned in
2020, CHF
330,0007
220,011
34,378
584,389
587,628
NGC3
Chair
135,000
129,000
129,000
123,000
129,000
72,888
72,888
–
90,062
86,024
86,024
82,031
86,024
48,639
48,639
–
12,833
237,895
237,824
12,212
227,236
227,195
12,212
227,236
227,195
11,592
216,623
216,601
15,397
230,421
230,376
–
121,527
8,840
130,367
–
–
–
–
–
1,120,776
747,454
107,464
1,975,694
1,726,819
1 Audit and Risk Committee.
2 Compensation Committee.
3 Nomination and Governance Committee.
4 Represents gross amounts paid, prior to any deductions such as employee social security and income withholding tax.
5
Represents gross amounts settled in blocked SIG shares, prior to any deductions such as employee social security and income withholding tax. The number of blocked
SIG shares is determined by dividing each Board member’s individual compensation amount (settled in shares) for one award cycle by the average closing price of
the SIG share of the first ten trading days of the third month of the quarter for which the blocked SIG shares are granted.
6 Employer social security contributions.
7
8
Includes employer pension contributions in the amount of CHF 46,880 funded by the Chairman through a reduction of the cash portion of the fee.
Martine Snels and Abdallah al Obeikan were elected as members of the Board of Directors at the Annual General Meeting in April 2021.
The respective numbers disclosed reflect the period from 21 April 2021 until 31 December 2021.
Annual Report 2021 Compensation
Compensation Report
114
Reconciliation of approved and paid compensation to the Board of Directors
The reconciliation of the approved and granted amounts is illustrated in Figure 10.
FIGURE 10: RECONCILIATION OF COMPENSATION OF THE BOARD OF DIRECTORS
2020
2021
2022
Start of year
01.01.2021
End of year
31.12.2021
AGM 2020
07.04.2020
AGM 2021
21.04.2021
AGM 2022
07.04.2022
CHF 1.1m
Compensation for the
period AGM 2020 to
December 2020
CHF 0.5m
Compensation for the
period January 2021 to
AGM 2021
CHF 1.5m
Compensation for the period
AGM 2021 to December 2021
CHF 2.0m
Compensation for 2021
CHF 1.6m
Compensation for the term
AGM 2020 to AGM 2021
CHF 1.5m
Compensation for the term
AGM 2021 to December 2021
CHF 2.1m
Amount approved by shareholders at the
AGM 2020 (for the term AGM 2020 to AGM 2021)
CHF 2.3m
Amount approved by shareholders at the
2021 AGM (for the term AGM 2021 to AGM 2022)
Annual Report 2021
Compensation
Compensation Report
115
5.
Compensation framework for the Group Executive Board
Compensation overview for the Group Executive Board
Compensation for the members of the Group Executive Board is provided through the following
main components: Annual base salary and pension benefits/other benefits, which together
form the fixed compensation component, a Short-Term Incentive Plan (“STIP”) and a Long-Term
Incentive Plan (“LTIP”), which together form the variable compensation component, presented
in Figure 11. Compensation principles are reviewed by the Compensation Committee on a
regular basis.
FIGURE 11: ILLUSTRATIVE OVERVIEW OF COMPENSATION FRAMEWORK OF THE GROUP EXECUTIVE BOARD IN 2021
Long-Term
Incentive Plan
(LTIP) at target
Short-Term
Incentive Plan
(STIP) at target
LTIP grant
3-year performance/vesting period
Payment of Short-Term
Incentive Plan (STIP)
0–200% of target value
Base salary
Base salary
+ Pension contributions
+ Pension contributions
+ Other benefits
+ Other benefits
Vesting of
Long-Term
Incentive Plan (LTIP)
0–200% of number of
granted Performance
Share Units
Pay mix
Reporting year
Reporting year +1
Reporting year +2
Reporting year +3
Fixed compensation components:
Annual base salary
The base salary is the main fixed compensation component paid to the members of the
Group Executive Board at SIG. It is paid in cash and in twelve equal monthly instalments
unless local law requires otherwise. The level of base salary is determined by the specific role
performed and the responsibilities accepted thereunder. It rewards the experience, expertise
and know-how necessary to fulfill the demands of a specific position. In addition, the market
value of the role in the location where the Company competes for talent is considered.
Pension benefits/other benefits
As the Group Executive Board is international in its nature, the members participate in the
benefit plans available in the country of their employment contract. Benefits mainly include
insurance and health care plans as well as pension coverage, where applicable. SIG’s pension
benefits, for members of the Group Executive Board employed with a Swiss employment
Annual Report 2021 Compensation
Compensation Report
116
contract, exceed the legal requirements of the Swiss Federal Law on Occupational Retirement,
Survivors and Disability Pension Plans (BVG) and are in line with the benefits offered by other
international companies. Members of the Group Executive Board who are under a foreign
employment contract are insured commensurately with market conditions and with their
position. The plans vary in accordance with the local competitive and legal environment and are
structured in accordance with local practice and in line with local legal requirements.
In addition to this, the Group Executive Board members are also provided with certain executive
perquisites and benefits in kind according to competitive market practice in the country of their
employment (e.g. company cars).
The fair value of these benefits is part of the compensation and disclosed in Table 2.
Variable compensation components:
The variable compensation consists of a short-term incentive and a long-term incentive
component.
Short-Term Incentive Plan (“STIP”)
Under the STIP, the members of the Group Executive Board are rewarded for the achievement
of pre-defined annual targets for multiple key performance indicators (“KPIs”), including
financial aspects as well as an ESG element, that are derived from SIG’s business strategy and
activities. Incorporating an ESG target in SIG’s short-term variable compensation underlines the
on-going commitment to contribute to the sustainability component in SIG’s business strategy
and activities. The objective of the EcoVadis methodology is to assess the quality of a company’s
sustainability management system through its policies, actions, and results. The assessment
focuses on 21 criteria which are grouped into four areas: Environment, Labour & Human Rights,
Ethics, and Sustainable Procurement. These areas encompass a wide range of activities within
the Company and involve in some way a large number of employees.
The targets for both the financial KPIs and the ESG KPI are determined by the Board, based on
the recommendation of the Compensation Committee each year in advance, following a well-
established process.
To calibrate the achievement curve for the following year for financial KPIs, a financial target
achievement level is identified based on the budget of the respective year. In addition, the
members of the Group Executive Board are compensated on the Company’s ESG performance.
Minimum and maximum performance achievement levels are defined considering, among
other metrics, the previous year’s performance level as well as the notion that higher payouts
should require proportionally higher levels of performance achievement. This leads to more
ambitious target curves to achieve the maximum payout.
The basis for ESG target setting is an increased EcoVadis rating year-on-year as it is the goal
of SIG to continuously improve the level of our ESG performance activities. The target is set
to require an improvement in the Company’s EcoVadis score to meet the target and thereby
aligning compensation with the Company's ambition to remain a leader in ESG matters.
To determine the payout, the performance against each KPI will be assessed individually
in a range from 0% to 200% and then combined according to the assigned weightings (see
Figure 12). The overall payout is capped at 200% of the target amount and can fall to zero should
the minimum performance achievement level not be attained.
Annual Report 2021 Compensation
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117
Group Executive Board members who have regional responsibilities have KPIs reflecting their
regional as well as the Company’s overall or group performance. To strengthen the focus
for these members with regional responsibility on their region’s targets, the Board decided
to increase for them the weighting of regional targets from 50% to 60% and decreasing the
weighting on Group targets to 40%. With this adjusted target weighting, the Group Executive
Board members’ regional responsibility should be further underlined while balancing the
overarching goal of group-wide success and alignment.
For other Group Executive Board members’ with a primary group focus, including the CEO and
CFO, performance is assessed based on group performance only. The framework is illustrated
in Figure 12.
In 2021, the target individual short-term incentive equals 100% of the base salary for the CEO
and between 67% and 83% of the respective base salaries for other members of the Group
Executive Board. Information regarding the target achievement levels will be provided in a later
section of this report.
FIGURE 12: OVERVIEW OF THE GROUP EXECUTIVE BOARD STIP COMPENSATION FRAMEWORK IN 2021
Target individual
short-term incentive
(100% of base salary for CEO,
67%-83% of base salary of
other members of the
Group Executive Board)
Performance regarding
financial targets and
EcoVadis Scoring
Actual individual
short-term incentive
(0%–200% of individual
target short-term incentive)
KPIs
Group adjusted EBITDA
p
u
o
r
G
Group core revenue
Group free cash flow
EcoVadis Scoring (sustainability metric)
l Regional adjusted EBITDA
a
n
o
i
g
e
R
Regional core revenue
Regional adjusted Operating Net Working Capital
(ONWC) as a % of revenue
Weight 2021
Members of the Group
Executive Board WITHOUT
regional responsibility
Members of the Group
Executive Board WITH
regional responsibility
55%
20%
20%
5%
50%
30%
20%
100%
40%
60%
Long-Term Incentive Plan (“LTIP”)
The LTIP offers eligible employees the opportunity to participate in the long-term success of SIG,
thereby reinforcing their focus on longer-term performance and aligning their interests with
those of shareholders. The following provides an outline of the plan specifics.
The mechanics behind the LTIP are illustrated in Figure 13. At the beginning of each three-
year vesting period, a certain number of Performance Share Units (“PSUs”) is granted to each
participant, which represents a contingent entitlement to receive SIG shares in the future. The
number of granted PSUs depends on (i) the individual LTIP grant level in CHF, determined by
Annual Report 2021 Compensation
Compensation Report
118
the Board each year but never exceeding 200% of the base salary of any member of the Group
Executive Board, including the CEO, and (ii) the fair value of one PSU at the grant date. In 2021,
the LTIP grant in CHF amounted to 189% of the base salary for the CEO and between 102% and
173% of the base salary for other members of the Group Executive Board.
FIGURE 13: OVERVIEW OF THE PRINCIPLES OF THE LTIP
LTIP grant in CHF
Fair value of one
Performance Share Unit
(PSU) at grant date
Performance conditions
50%
3-year
relative TSR1 with a
cap at 100% for a
negative absolute TSR
25%
3-year
cumulative diluted
adjusted EPS
25%
3-year
cumulative FCF
200%
0%
200%
0%
200%
0%
Value of the vested
LTIP in CHF
Share price at
vesting date
Granted number
of PSUs
0% to 200% of the
granted number of PSUs
Number of PSUs
vested in SIG shares
1
SPI® ICB Industry 2000 “Industrials” Total Return Index
Performance period = 3 years
After the three-year vesting period, a certain number of the granted PSUs vest, depending on
the performance of SIG. The number of PSUs vested in SIG shares may vary between 0% and
200% of the granted PSUs and is based on the achievement of the following three weighted
performance measures.
Performance measures
Weight
Description
Relative total
shareholder return
(rTSR)
Adjusted earnings per
share (EPS)
Free cash flow (FCF)
50%
25%
25%
Total shareholder return
measured relative to the
SPI® ICB Industry 2000
”Industrials“ Total Return
SIG’s cumulative
diluted adjusted
earnings per share
SIG’s cumulative
free cash flow
Annual Report 2021 Compensation
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119
To determine the multiple of the granted PSUs ultimately vested in SIG shares, the performance
against each performance measure will be assessed individually in a range from 0% to 200%
and then combined according to the assigned weightings. This means that a low performance in
one performance measure can be balanced by a higher performance in another performance
measure. Overall, the combined vesting multiple will never exceed 200%. If the performance
of each of the three performance measures lies below the respective minimum performance
requirement, the resulting combined vesting multiple would be 0% and consequently no PSUs
would vest. Furthermore, if the absolute TSR falls below zero over the respective performance
period, the vesting factor of the relative TSR metric would be capped at 1.0.
The threshold, target and cap (together the “targets”) performance levels for the three
LTIP performance measures for the 2021 grant are illustrated in Figure 14 and were set
by the Compensation Committee based on a robust, stringent approach supported by
HCM International Ltd., an external, independent advisor. Investors’ return expectations on
market value, stock risk profile, investment projections and current profitability levels were
taken as a starting point and translated into EPS and FCF targets, using multifactor valuation
models and statistical analyses in order to establish an appropriate link between LTIP payouts
and the value created for investors. The results of the outside-in approach were assessed against
historical company performance, as well as equity analysts’ expectations and the strategic plan
as approved by the Board, to reinforce the Compensation Committee’s and Board’s confidence
in the overall quality and robustness of the EPS and FCF targets. The Compensation Committee
discussed different options for target setting and the corresponding vesting curves for each
performance measure and submitted a recommendation to the Board, which approved the
respective vesting curves for the LTIP 2021 grant.
Since the first grant under the current LTIP was in 2019, the first vesting will occur in 2022. Relevant
information around the vesting will be disclosed in the Compensation Report for the year 2022.
FIGURE 14: OVERVIEW OF THE VESTING CURVE OF THE LTIP 2021
Performance measures
3-year total shareholder
return measured relative to
the SPI® ICB Industry 2000
“Industrials” Total Return
Index
3-year cumulative diluted
adjusted earnings per share
3-year cumulative
free cash flow
Threshold
(0% vesting)
Target
(100% vesting)
Cap
(200% vesting)
–16% of index
–0% compared to index
+10% of index
69.6% of target
83.1% of target
100% target as set by
the Board of Directors
100% target as set by
the Board of Directors
123.3% of target
114.5% of target
In addition to not meeting the threshold, other circumstances under which no PSUs vest include
various forfeiture clauses relating to termination of employment during the vesting period of
the LTIP.
Since 2021, the LTIP awards are subject to a clawback provision. In case of a financial restatement
due to material non-compliance of the Company with applicable financial reporting requirements,
or in the case of fraudulent behaviour or other wilful misconduct by a plan participant, the Board
of Directors may review the specific facts and circumstances and take clawback actions.
Annual Report 2021 Compensation
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120
Compensation mix
Figure 15 illustrates the compensation mix for the CEO and the Group Executive Board at target
level. This compensation mix reflects SIG’s high-performance orientation and represents the
Company’s strong emphasis on aligning the interests of the Group Executive Board and the
shareholders to create long-term shareholder value and profitable growth, by making a large
part of compensation dependent on the achievement of long-term goals.
FIGURE 15: OVERVIEW OF THE COMPENSATION MIX
FOR THE CEO AND THE GROUP EXECUTIVE BOARD (EXCL. CEO) AT TARGET LEVEL
30%
fixed
components
39%
fixed
components
24
46
CEO
%
6
24
70%
variable
components
29
10
GEB
excl. CEO
% average
22
39
61%
variable
components
Base salary
Pension benefits /
other benefits
Target Short-Term
Incentive
Granted Long-Term
Incentive
For the Group Executive Board members excluding the CEO, the fixed components (annual
base salary and pension benefits/other benefits) vary between 37% and 45% (39% on average)
of the total target compensation and the variable components vary between 55% and 63%
(61% on average) of total compensation.
Employment conditions for the Group Executive Board
All members of the Group Executive Board have employment contracts of unlimited duration
and a notice period of 12 months, ensuring compliance with the Swiss Ordinance Against
Excessive Compensation in Listed Stock Companies and other applicable laws and regulations.
The employment contracts may provide, for a period of up to one year, post-termination
compensation for adherence to non-compete clauses. Payment for the non-compete period,
if any, amounts to a maximum of one year’s compensation, unless otherwise required by
local law. Such contracts do not include any contractual severance payments or any change of
control provisions other than accelerated vesting and/or unblocking of unvested share awards
from the LTIP.
In the event of a change of control, the LTIP will automatically terminate and all outstanding PSUs
vest as of the date of the change of control (which will be defined by the Board if unclear). There
are generally no special arrangements in place from which the Group Executive Board members
(as well as the Board members) could benefit in divergence from other plan participants.
Annual Report 2021 Compensation
Compensation Report
121
Compensation awarded to the Group Executive Board (audited)
Table 2 summarises the total compensation for the eight members of the Group Executive
Board active during 2021, with two of them joining in the course of the year. The total regular
compensation for the Group Executive Board amounted to CHF 11.8 million, while the total
compensation, including payments to two former members who left the Group Executive Board
in the course of 2020 as well as accrual bookings for a non-compete agreement, sums up to
14.7 million.
TABLE 2: TOTAL COMPENSATION OF THE GROUP EXECUTIVE BOARD IN 2021,
INCLUDING INFORMATION OF THE PRIOR YEAR
CHF1
Annual base salary
Pension benefits
Short-term variable compensation2
Long-term variable compensation
(granted)3
Other benefits4
Social security contributions5
Total regular compensation
Payments to former executives7
Accruals for non-compete agreements
Total compensation
Group Executive
Board (including
the CEO) 2021
Group Executive
Board (including
the CEO) 2020
Highest payment
2021
Samuel Sigrist
Highest payment
2020
Rolf Stangl
2,771,577
461,446
3,232,186
4,175,000
453,095
756,048
11,849,352
2,482,407
380,5188
14,712,277
3,222,482
524,930
2,524,156
4,900,000
336,092
877,957
12,385,6176
–
3,017,8769
15,403,493
700,000
129,121
1,109,479
1,325,000
39,416
256,147
3,559,163
–
–
3,559,163
875,000
129,619
875,000
1,600,000
32,204
265,302
3,777,125
–
1,898,74610
5,675,871
1
Exchange rates 2021: AED/CHF 24.88252; EUR/CHF 1.08142; THB/CHF 2.86176; CNY/CHF 14.16967; BRL/CHF 16.95797.
Exchange rates 2020: EUR/CHF 1.07034; THB/CHF 3.0013; CNY/CHF 13.60521; BRL/CHF 18.41503.
2 Represents effective short-term variable compensation for 2021 which will be paid in 2022, after the publication of SIG’s audited consolidated financial statements.
3
Amount granted under the LTIP; the number of PSUs that vests depends on the achievement of the performance targets. The number of granted PSUs is equal
to the participants’ granted amounts under the LTIP divided by the fair value of one PSU at the grant date (CHF 22.31 for the 2021 PSU plan, see note 31 of the
consolidated financial statements for additional details).
4 Comprises payments related to additional insurances, car benefits and other allowances and benefits.
5
6
7
8
9
Employer social security contributions include estimates for the Short-Term Incentive Plan attributable to 2020 which will be paid in 2021 as well as for the
Long-Term Incentive Plan at target level on accrual basis.
Including compensation for one member who left the Company in August 2020.
Includes payments to two former members of the Group Executive Board. The amount includes employer social security contributions.
This item includes accruals for payments for a non-compete agreement to one member of the Group Executive Board who left his role in the Group Executive Board
as of 31 December 2021. The amount includes employer contributions to social security insurances on accrual basis.
This item includes accruals for payments for non-compete agreements to three members of the Group Executive Board who left the Group in August 2020 (one member)
and as of 31 December 2020 (two members), including the former CEO. The amount includes employer contributions to social security insurances on accrual basis.
10 This amount includes employer contributions to social security insurances on accrual basis.
The accruals in 2021 for a non-compete agreement of CHF 0.4 million are disclosed in the context
of a personnel change in the Group Executive Board and will be payable in 2022 and 2023.
With regard to the LTIP, this personnel change resulted in the forfeiture of 47,786 PSUs out of
the 2019, 2020 and 2021 grants, representing a total value (at grant fair value) of CHF 0.8 million.
Please refer to note 31 of the consolidated financial statements for an overview of the annual
PSUs granted since 2019 and outstanding PSUs.
Annual Report 2021 Compensation
Compensation Report
122
Approved versus total regular compensation for the Group Executive Board
The total compensation for the Group Executive Board for 2021 is CHF 14.7 million (including
social security contributions) which is below the maximum aggregate compensation amount of
CHF 18.0 million, which was approved at the Annual General Meeting on 21 April 2020 for 2021.
This amount includes CHF 2.5 million relating to payments to two former members of the Group
Executive Board who left the Group in 2020 plus the effect for accrual bookings related to a non-
compete arrangement, signed in 2021, with a member of the Group Executive Board who will
leave the GEB by 31 December 2021.
STIP performance assessment
For 2021, the members of the Group Executive Board received base salary, Short-Term Incentive
Plan, Long-Term Incentive Plan and pension and other benefits, in line with the compensation
framework, as detailed in Figure 11. For the Group as a whole, as illustrated in Figure 16 below,
financial KPIs were overachieved in 2021. The Company was able to improve its EcoVadis Scoring
in 2021 versus the prior year. Nevertheless, the target achievement for the STIP was just partly
reached. This underlines the desire of the Company to have continuous improvement in ESG
which underscores its ambitious target setting. Please refer to the Corporate Responsibility
Report on > pages 337 to 343 for further information pertaining to the Group’s environmental and
sustainability performance.
FIGURE 16: 2021 PERFORMANCE AT GROUP LEVEL
RELEVANT FOR STIP PERFORMANCE ASSESSMENT
Target achievement
0%
50%
100%
150%
200%
Performance
measure
Group adjusted
EBITDA
Group core
revenue
Group free
cash flow
EcoVadis
Scoring1
Actual target achievement
1 The Ecovadis Scoring is a third-party assessment of our environmental, social and governance performance, relatively measured.
The Company received a platinum rating in 2021 but fell short of its ambitious STI target. For the Company‘s sustainability
performance and its EcoVadis platinum rating, see > page 244 of the Corporate Sustainability Report.
The target achievement for the 2021 STIP was 158.5% for the CEO (82.9% in 2020) and between
98.5% and 181.0% for the other members of the Group Executive Board (84.8% to 128.0%
in 2020).
Annual Report 2021 Compensation
Compensation Report
123
Assessment of actual compensation paid/granted to the Group Executive Board
In comparison to the previous year, the total regular compensation of the Group Executive
Board slightly decreased by 4.3% despite the higher STI achievements. There are several factors
that impacted the level of actual compensation paid to the members of the Group Executive
Board in 2021, which can be summarised as follows:
• Personnel changes in the Group Executive Board: One member of the Group Executive
Board left the Company in the course of 2020 and has not been replaced, while the positions
of the two members who left the Group as of 31 December 2020 have been replaced. In
connection with the replacements, the salary levels and compensations were re-assessed. As a
consequence of the acquisition of the remaining 50% shares of the Group’s two joint ventures
in the Middle East in February 2021, a new member joined the Group Exective Board. He took
on the newly created role of President and General Manager of Middle East and Africa (“MEA”),
with responsibility for the business of the former joint ventures in the new segment MEA.
• Impact of currency exchange rates: Four members of the Group Executive Board are paid
in foreign currencies. Their compensation is converted into Swiss francs for the disclosure
in this report and has changed due to shifts in currency exchange rates even though the
compensation amount in local currency has remaind unchanged. This leads to slightly
different compensation levels in comparison to the previous reporting period.
Figure 17 illustrates the 2021 actual compensation mixes for the CEO and the Group Executive
Board, which underlines the strong focus on the short- and long-term variable compensation
elements.
FIGURE 17: OVERVIEW OF THE ACTUAL COMPENSATION MIX IN 2021
FOR THE CEO AND THE GROUP EXECUTIVE BOARD (EXCL. CEO)
(REFLECTS THE AMOUNT GRANTED UNDER THE LTIP)
26%
fixed
components
36%
fixed
components
21
40
CEO
%
5
34
74%
variable
components
27
9
GEB
excl. CEO
% average
29
35
64%
variable
components
Base salary
Pension benefits /
other benefits
Paid Short-Term
Incentive
Granted Long-Term
Incentive
Performance Share Unit Plan
In 2019, the PSU plan was introduced, and the members of the Group Executive Board and
selected other members of management were granted PSUs for the first time. Since the
introduction of this plan, a PSU grant has been made yearly. For an overview of the annual PSU
plans and the outstanding PSUs, refer to note 31 of the consolidated financial statements.
Annual Report 2021 Compensation
Compensation Report
124
6.
Shareholding Guidelines
In order to further strengthen the long-term focus of the members of the Board and the
Group Executive Board and to increase the alignment of their interests with those of SIG’s
shareholders, Shareholding Guidelines are in place. Members of the Board (including the
Chairman) are required to build an investment in SIG shares worth the equivalent of 100% of
their annual base fees within a three-year build-up period from the first equity grant date.
Similarly, members of the Group Executive Board are required to build an investment in SIG shares
worth the equivalent of 100% of their annual base salary, or 200% for the CEO, within a five-year
build-up period, starting with their first grant under the equity-based compensation plan.
To assess whether the thresholds have been met, all blocked or unblocked SIG shares and
vested or unvested entitlements to SIG shares (such as Restricted Share Units (“RSUs”), which
were granted prior to 2020 in a few cases, and Blocked Shares), excluding Performance Share
Units received as compensation are considered. Additionally, SIG shares acquired privately,
either outright or beneficially, by the members of the Board or Group Executive Board or their
immediate family members count towards meeting the thresholds.
If the Shareholding Guidelines are not met by a member of the Board or a member of the
Group Executive Board at the end of the build-up period, non-fulfilment consequences,
including sale restrictions on equity instruments received as compensation, would apply until
the Shareholding Guidelines are met. Adherence is assessed by the Compensation Committee
on an annual basis.
Shareholdings (audited)
The following tables show the shareholdings of the members of the Board of Directors as well
as the members of the Group Executive Board as of 31 December 2021 and 31 December 2020.
Board of Directors
TABLE 3: SHAREHOLDINGS OF THE BOARD OF DIRECTORS AS OF 31 DECEMBER 2021
INCLUDING INFORMATION OF THE PRIOR YEAR
Number of directly or
beneficially held SIG shares1
RSUs2
Number of indirectly
held shares
Total shareholdings
31 Dec. 2021
Total shareholdings
31 Dec. 2020
Andreas Umbach
Matthias Währen
Colleen Goggins
Werner Bauer
Wah-Hui Chu
Mariel Hoch
Martine Snels
Abdallah al Obeikan
Nigel Wright
Total
90,121
30,206
28,382
55,495
41,132
16,120
1,853
1,853
–
–
–
7,287
–
6,949
–
–
–
–
–
–
–
–
–
–
–
90,121
30,206
35,669
55,495
48,081
16,120
1,853
1,827,1103
1,828,963
–
–
81,026
26,483
32,113
51,939
44,690
12,564
n/a4
n/a4
–
265,162
14,236
1,827,110
2,106,508
248,815
1 Ordinary registered shares of SIG Combibloc Group AG, including blocked shares.
2 The RSUs will be converted into SIG shares after a three-year vesting period.
3 Shares indirectly held by Abdallah al Obeikan via his shareholding in Al Obeikan Group for Investment Company CJS.
4 Martine Snels and Abdallah al Obeikan were elected as members of the Board of Directors at the 2021 AGM, so they were not in office on 31 December 2020.
Annual Report 2021 Compensation
Compensation Report
125
Group Executive Board
TABLE 4: SHAREHOLDINGS OF THE MEMBERS OF THE GROUP EXECUTIVE BOARD
AS OF 31 DECEMBER 2021 INCLUDING INFORMATION OF THE PRIOR YEAR
Samuel Sigrist
Frank Herzog
Ian Wood
Lawrence Fok
Ricardo Rodriguez
Abdelghany Eladib
José Matthijsse
Rolf Stangl
Martin Herrenbrück
Total
Total shareholdings 31 Dec. 2021
Number of directly or
beneficially held SIG shares1
Total shareholdings
31 Dec. 2020
200,063
–
75,000
188,572
250,002
7,420
–
n/a3
n/a3
721,057
200,063
n/a2
75,000
268,572
250,002
n/a2
n/a2
–
50,000
843,637
1 Ordinary registered shares of SIG Combibloc Group AG.
2 Frank Herzog, Abdelghany Eladib and José Matthijsse joined the Group Executive Board in the course of 2021,
so the Shareholding Guidelines did not apply to them as of 31 December 2020.
3 Rolf Stangl and Martin Herrenbrück left the Group Executive Board as of 31 December 2020, so the Shareholding Guidelines
no longer apply to them.
Despite the on-going build-up period for both members of the Board of Directors as well as
the members of the Group Executive Board, the members in office since the Company’s IPO
in 2018 already fulfil the required shareholdings. For other members, the compliance check will
be done after the build-up period has expired.
7.
Loans granted to members of the Board of Directors or
the Group Executive Board (audited)
SIG’s Articles of Association do not allow for loans to be granted by the Group or its consolidated
subsidiaries to members of the Board or the Group Executive Board. As a consequence, no
loans were granted to or are outstanding to either Board or Group Executive Board members.
Annual Report 2021 Compensation
Report of the statutory auditor
126
REPORT OF THE STATUTORY AUDITOR
to the General Meeting of SIG Combibloc Group AG
Neuhausen am Rheinfall
We have audited the Compensation Report of SIG Combibloc Group AG for the year ended
31 December 2021. The audit was limited to the information according to articles 14–16 of the
ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance)
contained in the sections labelled ‘audited’ on page 113, page 121 and pages 124–125 of the
compensation report.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of
the compensation report in accordance with Swiss law and the Ordinance against Excessive
Compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is
also responsible for designing the remuneration system and defining individual remuneration
packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the accompanying compensation report. We
conducted our audit in accordance with Swiss Auditing Standards. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the compensation report complies with Swiss law and articles 14–16
of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the
compensation report with regard to remuneration, loans and credits in accordance with articles
14–16 of the Ordinance. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatements in the compensation report, whether
due to fraud or error. This audit also includes evaluating the reasonableness of the methods
applied to value components of remuneration, as well as assessing the overall presentation of
the compensation report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the compensation report of SIG Combibloc Group AG for the year ended
31 December 2021 complies with Swiss law and articles 14–16 of the Ordinance.
PricewaterhouseCoopers AG
Bruno Rossi
Audit expert
Auditor in charge
Manuela Baldisweiler
Audit expert
Basel, 24 February 2022
Annual Report 2021 127
FINANCIALS
128 Consolidated financial
statements
223 Financial statements
of the Company
Annual Report 2021 Financials ► Consolidated financial statements
Consolidated financial statements
Financials
1
128
Consolidated financial statements
for the year ended 31 December 2021
SIG Combibloc Group AG
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes
Basis of preparation
Our operating performance
Our operating assets and liabilities
Our financing and financial risk management
Our Group structure and related parties
Our people
Other
Report of the statutory auditor on the audit of the consolidated financial statement
See note 3 for further details on the consolidated financial statements.
129
130
131
132
133
142
156
173
190
201
209
217
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
2
129
Consolidated statement of profit or loss and other comprehensive income
(In € million)
Revenue
Cost of sales
Gross profit
Other income
Selling, marketing and distribution expenses
General and administrative expenses
Other expenses
Share of (loss)/profit of joint ventures
Profit from operating activities
Finance income
Finance expenses
Net finance expense
Profit before income tax
Income tax expense
Profit for the period
Other comprehensive income
Items that may be reclassified to profit or loss
Currency translations of foreign operations:
- recognised in translation reserve
- transfer from translation reserve
Items that will not be reclassified to profit or loss
Remeasurement of defined benefit plans
Total other comprehensive income, net of income tax
Total comprehensive income
Basic earnings per share (in €)
Diluted earnings per share (in €)
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
2,061.8
(1,577.2)
484.6
1,816.1
(1,422.2)
393.9
78.6
(90.8)
(181.8)
(33.2)
(1.6)
255.8
16.0
(47.4)
(31.4)
224.4
(52.3)
172.1
101.9
(3.5)
45.7
144.1
316.2
0.51
0.51
29.3
(75.1)
(181.1)
(12.4)
17.4
172.0
2.6
(83.6)
(81.0)
91.0
(23.0)
68.0
(138.6)
-
7.8
(130.8)
(62.8)
0.21
0.21
Note
6, 7
8
8
28
23
32
9
26, 27
10
10
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
3
130
Consolidated statement of financial position
As of
31 Dec.
2021
As of
31 Dec.
2020
Note
17
16
15
32
20
16
28
32
12
13
14
30
20
18
22
32
30
19
20
18
22
32
30
19
20
24
24
24
304.5
279.9
194.5
4.4
40.4
823.7
4.2
0.6
46.0
1,270.5
174.6
2,920.5
230.2
23.9
4,670.5
5,494.2
666.3
29.4
42.1
56.0
19.1
88.2
901.1
9.4
1,693.2
147.4
129.0
17.7
268.2
2,264.9
3,166.0
3.0
2,140.0
(122.3)
(0.1)
307.6
2,328.2
5,494.2
355.1
222.0
170.7
2.8
28.5
779.1
6.3
184.5
30.5
986.6
141.1
2,292.8
178.5
23.0
3,843.3
4,622.4
501.2
24.0
37.3
50.5
14.1
59.8
686.9
12.3
1,659.7
132.4
131.5
18.5
167.4
2,121.8
2,808.7
2.8
1,945.0
(220.7)
(0.1)
86.7
1,813.7
4,622.4
(In € million)
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Other current assets
Total current assets
Non-current receivables
Investments in joint ventures
Deferred tax assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Employee benefits
Other non-current assets
Total non-current assets
Total assets
Trade and other payables
Loans and borrowings
Current tax liabilities
Employee benefits
Provisions
Other current liabilities
Total current liabilities
Non-current payables
Loans and borrowings
Deferred tax liabilities
Employee benefits
Provisions
Other non-current liabilities
Total non-current liabilities
Total liabilities
Share capital
Additional paid-in capital
Translation reserve
Treasury shares
Retained earnings
Total equity
Total liabilities and equity
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
4
131
Consolidated statement of changes in equity
(In € million)
Share
capital
Note
Additional
paid-in
capital
Translation-
reserve
Treasury
shares
Retained
earnings
Total
equity
Equity as of 1 January 2021
2.8
1,945.0
(220.7)
(0.1)
86.7 1,813.7
Profit for the period
Other comprehensive income
Items that may be reclassified to
profit or loss
Currency translations of foreign operations:
- recognised in translation reserve
- transfer from translation reserve 26, 27
Items that will not be reclassified to
profit or loss
Remeasurement of defined benefit plans
Total other comprehensive income,
net of income tax
Total comprehensive income
for the period
Issue of shares 24, 27
31
Share-based payments
Purchase of treasury shares
24
Settlement of share-based payment
plans and arrangements
Dividends
24
24
Total transactions with owners
Equity as of 31 December 2021
-
-
0.2
0.2
3.0
-
-
323.1
(128.1)
195.0
101.9
(3.5)
98.4
98.4
-
-
(0.7)
172.1
172.1
101.9
(3.5)
45.7
45.7
45.7
144.1
217.8
3.8
316.2
323.3
3.8
(0.7)
-
(128.1)
0.7
(0.7)
-
-
3.1
198.3
2,140.0
(122.3)
(0.1)
307.6 2,328.2
Equity as of 1 January 2020
2.8
2,059.8
(82.1)
(0.1)
8.3
1,988.7
Profit for the period
Other comprehensive income
Items that may be reclassified to
profit or loss
Currency translations of foreign operations:
- recognised in translation reserve
Items that will not be reclassified to
profit or loss
Remeasurement of defined benefit plans
Total other comprehensive income,
net of income tax
Total comprehensive income
for the period
Share-based payments
Purchase of treasury shares
Settlement of share-based payment
plans and arrangements
Dividends
Total transactions with owners
31
24
24
24
68.0
68.0
(138.6)
(138.6)
(138.6)
(138.6)
-
-
-
-
-
(0.6)
7.8
7.8
7.8
(130.8)
75.8
3.2
(62.8)
3.2
(0.6)
-
(114.8)
(114.8)
0.6
(0.6)
-
(114.8)
-
-
2.6
(112.2)
-
-
-
Equity as of 31 December 2020
2.8
1,945.0
(220.7)
(0.1)
86.7 1,813.7
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5
132
Consolidated statement of cash flows
(In € million)
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
Note
12, 13, 14
12, 13, 14
Cash flows from operating activities
Profit for the period
Adjustments for:
Depreciation and amortisation
Impairment losses
Change in fair value of derivatives
Share-based payment expense
Gain on sale of property, plant and equipment and non-current assets
Loss on sale of subsidiary
Gain on pre-existing interest in former joint ventures
Share of loss/(profit) of joint ventures
Net finance expense
Interest paid
Payment of transaction and other costs relating to financing
Income tax expense
Income taxes paid, net of refunds received
Change in trade and other receivables
Change in inventories
Change in trade and other payables
Change in provisions and employee benefits
Change in other assets and liabilities
Net cash from operating activities
Cash flows from investing activities
Acquisition of business, net of cash acquired
Sale of subsidiary, net of cash disposed of
Acquisition of property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment and other assets
Dividends received from joint ventures
Interest received
26, 27
26
12, 14
Net cash used in investing activities
Cash flows from financing activities
Proceeds from loans and borrowings
Repayment of loans and borrowings
Payment of lease liabilities
Purchase of treasury shares
Payment of dividends
Other
Net cash used in financing activities
31
26
27
28
23
22
32
11
28
22
22
22
24
24
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents as of the beginning of the period
Effect of exchange rate fluctuations on cash and cash equivalents
Cash and cash equivalents as of the end of the period
17
Annual Report 2021
172.1
68.0
306.6
4.4
(7.4)
3.8
(0.8)
12.1
(48.8)
1.6
31.4
(40.6)
-
52.3
(73.0)
413.7
(4.0)
(9.4)
62.5
14.9
53.2
530.9
(63.6)
3.1
(245.9)
1.1
-
1.5
(303.8)
100.0
(239.5)
(26.7)
(0.7)
(128.1)
1.4
(293.6)
(66.5)
355.1
15.9
304.5
277.7
43.9
(23.2)
3.2
(0.2)
-
-
(17.4)
81.0
(39.0)
(15.4)
23.0
(76.2)
325.4
32.6
(11.8)
26.9
12.9
39.8
425.8
(2.5)
-
(199.2)
0.7
22.7
2.1
(176.2)
1,550.0
(1,560.9)
(16.1)
(0.6)
(114.8)
1.1
(141.3)
108.3
261.0
(14.2)
355.1
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133
BASIS OF PREPARATION
This section includes information on the parent company and the Group. It also includes
details about the preparation of the consolidated financial statements and explains the
structure of the consolidated financial statements.
1
Reporting entity and overview of the Group
SIG Combibloc Group AG (“SIG” or the “Company”) is domiciled in Switzerland and has
since 28 September 2018 been listed on SIX Swiss Exchange.
The consolidated financial statements for the year ended 31 December 2021 comprise the
Company and its subsidiaries (together referred to as the “Group”). The subsidiaries and
joint venture reflected in the consolidated financial statements are listed in note 26. For
information about the acquisition of the remaining shares of the joint ventures in the
Middle East and the sale of the paper mill in New Zealand in the year ended 31 December
2021, see notes 4, 26 and 27.
The Group is a global system supplier of aseptic carton packaging solutions for both
beverage and liquid food products, ranging from juices and milk to soups and sauces. Its
solutions offering consists of aseptic carton packaging filling machines, aseptic carton
packaging sleeves and closures as well as after-market services.
2
Preparation of the consolidated financial statements
The consolidated financial statements for the year ended 31 December 2021 have been
prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board (“IASB”). They were approved by the
Board of Directors of the Company on 24 February 2022. They also comply with the Listing
Rules of SIX Swiss Exchange and with Swiss company law.
The consolidated financial statements are presented in Euros (“€” or EUR) as the Euro is
deemed to be the currency most representative of the Group’s activities. The functional
currency of the Company is Swiss Franc.
The consolidated financial statements are prepared on a historical cost basis except for
certain financial instruments such as derivatives that are measured at fair value, certain
components of inventory that are measured at net realisable value and defined benefit
obligations that are measured under the projected unit credit method.
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134
3
Structure of the consolidated financial statements
The consolidated financial statements are structured into different sections that should
facilitate an overview and understanding of the Group’s operations, financial position and
performance. The notes are included in these sections based on their relevance and
include information that is material and relevant to the consolidated financial statements.
OUR
OPERATING
PERFORMANCE
6 Revenue
7 Segment
information
8 Other
income and
expenses
9 Alternative
performance
measures
10 Earnings per
share
11 Cash flow
information
BASIS OF
PREPARATION
1 Reporting
entity and
overview of
the Group
2 Preparation
of the
consolidated
financial
statements
3 Structure of
the
consolidated
financial
statements
4 Key events
and
transactions
5 General
accounting
policies and
topics
OUR
OPERATING
ASSETS AND
LIABILITIES
12 Property,
plant and
equipment
13 Right-of-
use assets
14 Intangible
assets
OUR FINANCING
AND
FINANCIAL RISK
MANAGEMENT
OUR GROUP
STRUCTURE
AND RELATED
PARTIES
OUR PEOPLE
OTHER
21 Capital
management
26 Group
entities
30 Employee
benefits
22 Loans and
borrowings
combination
27 Business
31 Share-based
payment plans
and
arrangements
23 Finance
28 Joint
income and
expenses
ventures
29 Related
parties
32 Income tax
33 Financial
instruments
and fair value
information
34 Contingent
liabilities
35 Subsequent
events
15 Inventories
24 Equity
25 Financial risk
management
16 Trade and
other
receivables
17 Cash and
cash
equivalents
18 Trade and
other
payables
19 Provisions
20 Other
assets and
liabilities
Significant accounting policies and information about management judgements, estimates
and assumptions are provided in the respective notes throughout the consolidated
financial statements. Accounting policies that relate to the financial statements as a whole
or are relevant for several notes are included in this “Basis of preparation” section.
4
Key events and transactions
The following key events and transactions took place in the year ended 31 December 2021
or were announced in 2022 before the consolidated financial statements were approved.
Acquisition of the remaining shares of the joint ventures in the
Middle East
On 25 February 2021, the Company acquired the remaining 50% of the shares of its two
joint ventures in the Middle East (“the acquisition”) from its joint venture partner Al
Obeikan Group for Investment Company CJS (“OIG”) for a consideration of €490.3 million,
split into cash of €167.0 million and 17,467,632 newly issued SIG ordinary shares with a
fair value of €323.3 million at the time of closing. The new SIG shares were issued out of
authorised share capital (see note 24). The acquisition gives the Group control over a
business with strong growth prospects in a growing market and expands its global
presence. For additional information about the acquisition, see note 27.
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135
After the acquisition, the Group repaid external loans of one of the former joint ventures
by using available cash and a new unsecured credit facility of €100.0 million that has
subsequently been repaid. See note 22.
New segmentation
The acquisition of the remaining shares of the joint ventures in the Middle East has
resulted in a split of the segment Europe, Middle East and Africa (“EMEA”) into two
segments: segment Europe and segment Middle East and Africa (“MEA”). See further
note 7.
Organisational changes in the Group Executive Board and the Board
of Directors
Samuel Sigrist, the former Chief Financial Officer, was appointed Chief Executive Officer
effective 1 January 2021 following the voluntary departure of the former Chief Executive
Officer (Rolf Stangl). On the same date, the appointment of Frank Herzog as Chief Financial
Officer took effect. José Matthijsse took over the position of President and General
Manager of Europe effective 1 February 2021.
Abdelghany Eladib, the Chief Operating Officer of the Group’s former joint ventures in the
Middle East, became a member of the Group Executive Board effective 28 February 2021.
He has taken on the newly created role of President and General Manager of Middle East
and Africa.
Abdallah al Obeikan, Chief Executive Officer of OIG and, prior to the acquisition, Chief
Executive Officer of the Group’s former joint ventures in the Middle East, was elected to
SIG’s Board of Directors at the Annual General Meeting in April 2021.
Martine Snels was elected as a new member of SIG’s Board of Directors at the Annual
General Meeting in April 2021. She has considerable experience in the food industry,
including roles with GEA and FrieslandCampina.
Lawrence Fok announced on 29 October 2021 that he would leave his role as President
and General Manager of Asia Pacific as of 31 December 2021. He will leave the Group in
2022, after a transition period (see also note 29). Due to the Group’s growth in Asia Pacific,
his role in the Group Executive Board has been taken over by two executives with effect
from 1 January 2022. Fan Lidong has taken on the newly created role of President and
General Manager of Asia Pacific North. He has 30 years’ experience in the packaging
industry and has worked for SIG in China in various leading positions for more than
twelve years. Angela Lu has taken on the newly created role of President and General
Manager of Asia Pacific South. She has considerable experience in the food and beverage
industry, including roles with Nestlé and Yeo Hiap Seng.
Suzanne Verzijden joined the Group Executive Board as Chief People and Culture Officer,
effective as of 1 January 2022. She has 16 years’ experience in human resource topics in a
number of different roles and locations.
Sale of New Zealand paper mill
After the Group’s announcement in March 2021 that it would close its paper mill in New
Zealand (Whakatane), it was approached by potential buyers. The Group sold the paper
mill on 3 June 2021 for NZD 1 to a consortium of investors who will enable the paper mill
to continue to operate. The sale of the mill resulted in a loss of €12.1 million. In connection
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9
136
initial decision to close the mill, the Group expected to
with the
incur plant
decommissioning and redundancy costs of around €30 million. However, due to the sale,
only €9.8 million of restructuring costs relating to the employees of the mill were
recognised in the year ended 31 December 2021. See also notes 9 and 26.
New production plant for sleeves in Mexico
The Group announced in April 2021 that it will construct a new production plant for
sleeves in Mexico. Operations are planned to start in the first quarter of 2023. The plant
will be leased by the Group (see also notes 12 and 13).
Announcement of agreement to acquire Evergreen’s fresh carton
business in Asia Pacific
The Group announced on 5 January 2022 that it has entered into an agreement to acquire
Evergreen’s fresh carton business in Asia Pacific (“Evergreen Asia”). It will acquire 100% of
the shares of Evergreen Packaging Korea Ltd., Evergreen Packaging (Shanghai) Co. Ltd. and
Evergreen Packaging (Taiwan) Co. Ltd from Evergreen Packaging International LLC.
Evergreen Asia provides filling machines, cartons, closures and after-sales service to its
customers in the fresh and extended shelf life dairy segment, mainly for milk, and has
production plants in China, South Korea and Taiwan.
The acquisition will allow the Group to access a new customer base in an attractive
growing market in Asia and also to expand its offering to existing customers. The Group
will use its experience to further develop the fresh carton business, drawing on its regional
R&D presence and innovation capabilities as well as its marketing expertise to introduce
more innovative packaging formats in the Asian fresh dairy market. Synergies are
expected from commercial opportunities and cost optimisation. In addition, the business
will benefit from a supply arrangement at market for coated carton board.
The acquisition is expected to close in the second or third quarter of 2022. The closing is
subject to customary closing conditions, including approvals from regulatory authorities.
Evergreen Asia will be part of the Group’s APAC segment.
The consideration for the shares of the Evergreen entities will be based on an enterprise
value of $335 million (subject to customary closing adjustments) on a cash-free, debt-free
basis and will be paid in cash at the closing of the acquisition. The final consideration will
be determined at the time of the completion settlement. The acquisition will initially be
financed through a bridge facility of €300 million with a maturity of up to 18 months,
which will be refinanced with long-term financing arrangements.
In the year ended 31 December 2021, Evergreen Asia generated revenue of approximately
$160 million and adjusted EBITDA of approximately $28 million (unaudited). See note 9 for
the Group’s definition of adjusted EBITDA.
Announcement of agreement to acquire Scholle IPN
The Group announced on 1 February 2022 that it has entered into an agreement to
acquire 100% of Scholle IPN, a privately held company, from CLIL Holding B.V..
Scholle IPN is a leading innovator of sustainable packaging systems and solutions for food
and beverages, with retail, institutional and industrial customers. It is the global leader in
bag-in-box and number two in spouted pouches.
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The acquisition will enable the Group to expand its product portfolio, increase its presence
in the United States and leverage its established presence in emerging markets. Synergies
and cost efficiencies are expected in areas such as commercial operations, technology,
innovation and sustainability as well as procurement and manufacturing.
The acquisition is expected to close in the second or third quarter of 2022. The closing is
subject to customary closing conditions, including approvals from regulatory authorities.
The consideration for the shares of Scholle IPN will be based on an enterprise value of
€1.36 billion (at an USD/EUR exchange rate of 1.12862) and an estimated net debt position
of €310 million as of 31 December 2021, reflecting an equity value of €1.05 billion. The
acquisition will be funded through a mix of cash and shares, and the refinancing of
existing debt.
The consideration will be split into cash of €370 million (subject to customary closing
adjustments) and 33.75 million newly issued shares, to be transferred at the closing of the
acquisition, and a contingent consideration. The new shares will be issued out of
authorised share capital. The existing debt of Scholle IPN will be refinanced at closing. The
final consideration, excluding the contingent consideration, will be determined at the time
of the completion settlement. The contingent consideration depends on Scholle IPN
outperforming the top-end of the Group’s mid-term revenue growth guidance of 4-6% per
year for the years ending 31 December 2023, 2024 and 2025, and would be paid in cash in
three annual instalments of up to €89 million ($100 million) per year. Payments for growth
rates ranging from 6–11.5% per the respective year will be made based on a pre-agreed
ratchet structure.
The consideration to be paid in cash at closing and the repayment of existing debt will be
financed via a bridge facility with a maturity of up to 18 months, which is expected to
be refinanced through a combination of long-term debt and a share capital increase of
approximately €200-250 million.
The current owner of Scholle IPN, Laurens Last, will become the largest single shareholder
in SIG after closing of the acquisition with an approximate shareholding of 9.1% (with a
lock-up period of 18 to 24 months). He will also be nominated for election to the Board of
Directors of SIG at the forthcoming Annual General Meeting on 7 April 2022. Ross
Bushnell, CEO of Scholle IPN, will join SIG’s Group Executive Board subject to and as of
closing of the acquisition.
In the twelve months ended 31 December 2021, Scholle IPN generated revenue
of approximately €474 million and adjusted EBITDA of approximately €90 million
(unaudited). See note 9 for the Group’s definition of adjusted EBITDA.
5
General accounting policies and topics
5.1 Application of accounting policies
The accounting policies applied by the Group in the consolidated financial statements for
the year ended 31 December 2021 are consistent with those applied in the consolidated
financial statements for the year ended 31 December 2020.
Annual Report 2021
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138
5.2
Impact of new or amended standards and interpretations
A number of new or amended standards and interpretations were effective for annual
periods beginning on 1 January 2021. The applicable standards and interpretations had
no, or no material, impact on the consolidated financial statements.
5.3 Adoption of standards and interpretations in 2022 and
beyond
A number of new or amended standards and interpretations are effective for annual
periods beginning on 1 January 2022 or later and have not been applied in preparing these
consolidated financial statements. The Group does not plan to adopt these standards and
interpretations before their effective dates. Many of them are not applicable to the Group
or are expected to have no, or no material, impact on the consolidated financial
statements.
5.4 Critical accounting judgements, estimates and assumptions
In preparing these consolidated financial statements, management has made judgements,
estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expenses and disclosure of
contingent assets and liabilities. The estimates and associated assumptions are based on
historical experience and various other assumptions that are believed to be reasonable
under the circumstances. Actual results may differ from estimates and assumptions made.
The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision
affects both the current and future periods.
Management believes that the following accounting policies involve the most significant
judgements, estimates and assumptions:
Liabilities for various customer incentive programmes – see notes 6 and 18.
Impairment testing and recognition of impairment losses – see notes 12 and 14.
Business combinations and fair value assessments – see note 27.
Measurement of obligations under defined benefit plans – see note 30.
Determination of income tax liabilities – see note 32.
Realisation of deferred tax assets – see note 32.
Management evaluates on an ongoing basis how the effects of COVID-19 impact the
Group’s financial position and performance. The progress of the business during the
pandemic has shown that the Group is well placed to withstand the effects of COVID-19
due to its role in the supply chain for essential food and beverages and its broad
geographic reach. As the Group and its customers are in an industry that assures the
distribution of essential food and beverages, the Group overall has not been, and is
currently not, significantly impacted by the COVID-19 pandemic.
Significant judgements are involved regarding the assessment of the impacts of COVID-19
on the global economy. New facts and circumstances, such as supply chain disruptions,
new mutations of the virus and more restrictive quarantine rules, may lead to adjustments
of management’s current estimates and assumptions.
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12
139
5.5 Accounting policies and other
topics relating
to
the
consolidated financial statements as a whole
5.5.1 Foreign currency
Items included in the financial statements of individual Group entities are recognised in
their respective functional currency, which is the currency of the primary economic
environment in which each Group entity operates.
Foreign currency transactions
Foreign currency transactions are translated into the respective functional currency of the
Group entity at the exchange rates at the dates of the transactions. Monetary assets and
liabilities in foreign currencies at the reporting date are translated into the functional
currency at the exchange rate at that date. Non-monetary assets and liabilities in foreign
currencies that are measured based on historical cost are translated at the exchange rates
at the dates of the transactions. Foreign currency exchange gains or losses are generally
recognised in profit or loss.
Foreign operations
Assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on acquisitions, are translated into Euro at the exchange rates at the reporting
date. The income and expenses of foreign operations are translated into Euro at average
rates for the reported periods, which approximate the exchange rates at the dates of the
transactions. This also applies to the statement of cash flows and all movements in assets
and liabilities as well as any items of other comprehensive income. The foreign currency
exchange gains and losses arising on the translation of the net assets of foreign
operations are recognised in other comprehensive income, in the translation reserve.
When a foreign operation is disposed of or liquidated, the cumulative amount in the
translation reserve related to that foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal (or liquidation). The Group does not apply hedge accounting
to the foreign currency exchange differences arising between the functional currency of
the foreign operation and the Euro.
Significant exchange rates
The following significant exchange rates against the Euro applied during the periods
presented:
Average rate for the year
Spot rate as of
31 Dec.
2021
31 Dec.
2020
31 Dec.
2021
31 Dec.
2020
6.37706
7.63193
23.99444
1.08142
37.78863
1.18341
5.81232
7.86713
24.35846
1.07034
35.66255
1.13971
6.31010
7.19470
23.14380
1.03310
37.65298
1.13260
6.37350
8.02250
24.41599
1.08020
36.72701
1.22710
Brazilian Real (BRL)
Chinese Renminbi (CNY)
Mexican Peso (MXN)
Swiss Franc (CHF)
Thai Baht (THB)
US Dollar ($ or USD)
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140
5.5.2 Lease accounting
The Group as lessor
The Group deploys filling lines at its customers’ sites under both lease and sale contracts.
These contracts generally contain certain terms showing that the Group retains control of
the filling line and does not transfer the significant risks and rewards of ownership to the
customer. As a consequence of these contractual terms, the majority of the Group’s filling
line contracts qualify to be accounted for as operating leases in accordance with IFRS 16
Leases. See further notes 6, 12, 18 and 20. Sale contracts that do not contain such terms
are accounted for in accordance with IFRS 15 Revenue from Contracts with Customers.
The Group’s lease contracts do not include unconditional rights for customers to extend
the lease or to purchase the filling line at the end of the stated lease period. Due to the
Group’s long-term relationships with its customers and changing customer needs,
contracts could be modified or terminated at any time. Customers may for example want
to change to a different filling machine model. Filling lines taken back from customers are
generally overhauled and redeployed with other existing or new customers.
The Group as lessee
The Group
warehouses and cars.
leases office buildings, production-related buildings and equipment,
The majority of the Group’s leased assets are recognised as right-of-use assets with
corresponding lease liabilities. See notes 13 and 22 for details about the accounting for
right-of-use assets and lease liabilities.
Leases of low-value assets and short-term leases (leases with a lease term of 12 months or
less) are accounted for off-balance sheet. The lease payments are recognised as an
expense on a straight-line basis over the lease term. Variable lease payments that are not
included in the measurement of lease liabilities are also accounted for off-balance sheet
and are recognised as an expense when incurred. The Group’s off-balance sheet leases
have an insignificant impact on the Group’s result.
5.5.3
Impairment of non-financial assets
The carrying amounts of the Group’s property, plant and equipment, right-of-use assets
and intangible assets with finite useful lives are reviewed regularly and at least annually to
identify whether there is an indication of impairment. If an impairment indicator exists,
the asset’s recoverable amount is estimated. Goodwill and intangible assets with indefinite
useful lives are tested for impairment on an annual basis and whenever there is an
indication that they may be impaired.
For impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash
inflows of other assets or cash generating units.
The recoverable amount of an asset or cash generating unit is the greater of its value in
use and its fair value less costs of disposal. In assessing the value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to
the asset or cash generating unit.
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141
An impairment loss is recognised if the carrying amount of an asset or cash generating
unit exceeds its recoverable amount. An impairment loss is allocated to first reduce the
carrying amount of any goodwill allocated to the cash generating unit, and then to reduce
the carrying amounts of the other assets in the cash generating unit on a pro-rata basis.
Impairment losses are recognised in profit or loss.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
Further details on impairment testing are provided in the respective notes on property,
plant and equipment, right-of-use assets and intangible assets (see notes 12, 13 and 14).
5.5.4 Contingent assets
Contingent assets are possible assets arising from a past event to be confirmed by future
events not wholly within the control of the Group. Contingent assets are not recognised in
the statement of financial position but are separately disclosed.
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15
142
OUR OPERATING PERFORMANCE
This section covers our operating performance at a Group as well as at a segment level. It
includes alternative performance measures that management believes are relevant in
evaluating the Group’s performance and liquidity.
6
Revenue
Revenue derives from the sale of goods (i.e. sleeves, closures, board and filling lines) and
the provision of after-market services and is presented net of returns, trade discounts,
volume rebates and other customer incentives. The Group also presents income from the
deployment of filling lines under contracts that qualify to be accounted for as operating
leases and revenue under royalty agreements as part of revenue.
Approximately 86% of the Group’s revenue from its offering of aseptic carton packaging
solutions relates to the sale of sleeves and closures in the year ended 31 December 2021
(86% in the year ended 31 December 2020). The remaining 14% consists of revenue
relating to filling lines and to servicing of the Group’s deployed filling lines (14% in the year
ended 31 December 2020).
Composition of revenue
(In € million)
Revenue from sale and service contracts (including royalty agreements)
Revenue from filling line contracts accounted for as operating leases
Total revenue
of which
Core revenue
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
1,932.5
129.3
2,061.8
1,716.2
99.9
1,816.1
2,046.8
1,796.4
Core revenue represents revenue generated from the Group’s core activities and excludes
revenue from sales of folding box board, which amounted to €15.0 million for the twelve
months ended 31 December 2021 and €19.7 million for the twelve months ended
31 December 2020. Core revenue is not a defined performance measure in IFRS (see
note 9). Since the Group’s acquisition of the remaining shares of its joint ventures in the
Middle East on 25 February 2021, the revenue of the former joint ventures is fully
consolidated and included in core revenue (see notes 7 and 27).
The Group’s total revenue is further disaggregated by major product/service lines in the
following table. Filling line revenue is composed of revenue from the deployment of filling
lines under contracts that qualify to be accounted for as operating leases and from the
sale of filling lines. Service revenue relates to after-market services in relation to the
Group’s filling lines. Revenue under royalty agreements and from sale of folding box board
and liquid paper board is included in other revenue.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
16
143
(In € million)
Revenue from sale of sleeves and closures
Filling line revenue
Service revenue
Other revenue
Total revenue
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
1,758.6
141.1
140.1
22.0
2,061.8
1,498.8
121.0
119.0
77.3
1,816.1
Other revenue has decreased compared to the comparative period. As a consequence of
the acquisition of the remaining shares of the joint ventures in the Middle East on
25 February 2021, the royalty agreement with the former joint ventures was terminated.
The Group’s sales of liquid paper board are mainly to the former joint ventures and are
since the acquisition intra-group sales rather than third-party sales. Sales of folding box
board have ceased as the Group sold its paper mill in June 2021 (see note 26).
The Group’s four segments provide the same aseptic carton packaging solutions,
comprising filling machines, sleeves and closures as well as after-market services. Note 7
includes information about the split of the different types of revenue between the
segments.
Notes 18 and 20 include information about the Group’s liabilities relating to various
incentive programmes, advance payments from customers and deferred revenue, which
had or will have an impact on the amount of revenue recognised.
Accounting policy, significant judgements and estimates
Revenue from sale of sleeves and other related products, deployment of filling lines under contracts
accounted for as sales contracts and provision of service is measured at the fair value of the
consideration received or receivable net of returns, trade discounts, volume rebates and other
customer sales incentives.
Revenue is recognised when the Group transfers control over a product or service to a customer.
Transfer of control varies depending on the individual contract terms. Revenue from sale of sleeves
and other related products and deployment of filling lines under contracts accounted for as sale
contracts is recognised at a point in time while revenue from service contracts is recognised over
time.
Lease payments for filling lines that are deployed under operating lease contracts are recognised on
a straight-line basis over the lease period. The payment (i.e. the sale price) for the use of filling lines
that are deployed under sale contracts that qualify to be accounted for as operating leases is
recognised as a deferred revenue liability in the statement of financial position, and recognised as
revenue on a straight-line basis over the shorter of the period over which the customer relationship
is expected to last and the ten-year estimated useful life of a filling line. The control and significant
risks and rewards of ownership are retained by the Group in respect of such sale contracts (see
further note 5.5.2).
When sales incentives are offered to customers, only the amount of revenue that is highly probable
not to be reversed is recognised. The amount of sales incentives expected to be earned or taken by
customers in conjunction with incentive programmes is therefore estimated and deducted from
revenue. Estimates in respect of the incentives are based on historical and current sales trends,
which are affected by the business seasonality and competitiveness of promotional programmes
being offered. Estimates are reviewed quarterly for possible revisions.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
17
144
7
Segment information
Prior to the acquisition of the remaining shares of the joint ventures in the Middle East,
the Group had three operating segments, which were also the reportable segments:
Europe, Middle East and Africa (“EMEA”), Asia Pacific (“APAC”) and Americas. The
acquisition has resulted in a split of EMEA into two operating (and reportable) segments:
segment Europe and segment Middle East and Africa (“MEA”). Since the acquisition, the
Group’s chief operating decision maker (“CODM”) receives separate financial information
on a regular basis for Europe and for MEA for the purposes of resource allocation and
assessment of the performance of the segments.
All four segments provide the same aseptic carton packaging solutions.
Overview of the segments and Group Functions
Until the end of February 2021, when the remaining shares of the joint ventures in the
Middle East were acquired, the former segment EMEA included production of sleeves and
closures for the Group’s customers in Europe. EMEA also supplied the other segments
with sleeves and, to a lesser extent, closures from its plants in Europe. EMEA further
included the result from the sale of supply from the Group’s European production entities
to the Middle Eastern markets. The Group’s central procurement activities, including
commodity hedging, were part of EMEA. The Group’s former joint ventures in the Middle
East contributed to the performance of EMEA through dividend payments and royalty
payments related to the use of SIG technical solutions and sleeves sales in the Middle East
and Africa.
From March 2021 onwards, segment Europe includes production of sleeves and closures
for the Group’s customers in Europe. Europe also supplies the other segments with
sleeves and, to a lesser extent, closures. The Group’s central procurement activities,
including commodity hedging, are part of Europe, with the European production entities
being the main internal customers.
From March 2021 onwards, segment MEA covers the Group’s customers in the Middle
East and Africa. The operations of the former joint ventures in the Middle East, including a
sleeves production plant, are part of this segment.
APAC includes production of sleeves for the Group’s customers in China, South East Asia
and Oceania. APAC also supplies the other segments with sleeves. In addition, the China-
based filling machine assembly plant is included in APAC. Until the beginning of June 2021,
when the Group sold its paper mill in New Zealand, APAC included production of liquid
paper board and folding box board (see note 26). The liquid paper board was mainly used
by the sleeves production plants in Asia and the former joint ventures in the Middle East.
Americas covers the Group’s customers in North and South America. North America is
primarily supplied by sleeves from the European and Asian plants. South America has its
own sleeves production plant.
The Group Functions include activities that are supportive to the Group’s business, such
as the global filling machine assembly, global technology (including R&D), information
technology, marketing, finance, legal, human resources and other support functions.
Global filling machine assembly sells filling machines and spare parts, and provides
assembly-related services, to all of the segments. The Group Functions are not involved in
any significant transactions with third parties. Their sales of filling lines to the former joint
ventures in the Middle East were reported as third party sales until the Group obtained
control over the joint ventures as of the end of February 2021.
Annual Report 2021
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Financials ► Consolidated financial statements
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Financials
18
145
Inter-company transactions between the segments, and between the segments and the
Group Functions, are eliminated in consolidation. They mainly relate to the sale of filling
machines, sleeves and closures. Pricing is determined on a cost-plus basis.
Information about the Group’s segments is reported to the CODM on a regular basis for
the purposes of resource allocation and assessment of performance of the segments. The
performance of the segments is assessed by the CODM primarily on the basis of adjusted
EBITDA (as defined in the section below).
Segment financial information
The following tables present financial information about the Group’s segments and Group
Functions. The same measurement basis
is used when presenting the segment
information as is used in the Group’s consolidated financial statements.
The increase from three to four segments in the year ended 31 December 2021 has not
resulted in any material changes that would require restatement of segment information
presented in the comparative period. The Group’s reporting structure changed as a
consequence of the acquisition of the remaining shares of the joint ventures in the Middle
East on 25 February 2021. The Group did not have control over these entities before the
acquisition. The Group accounted for the joint ventures using the equity method as it only
had joint control. The results of the former joint ventures in the Middle East are now fully
consolidated and reported in the new segment MEA. Sales by various Group companies to
the former joint ventures were, prior to the acquisition, reported as external sales. After
the acquisition, sales to the former joint ventures are reported as inter-segment
transactions.
Segment financial information is reported for the former segment EMEA for the first two
months of the year ended 31 December 2021 and for the comparative period. Prior to the
acquisition, the former joint ventures in the Middle East contributed to the performance of
EMEA through dividend payments and royalty payments. The royalty agreement was
terminated and dividend payments ceased upon the Group’s acquisition of the remining
shares of the joint ventures. No dividends were paid by the joint ventures to the former
joint venture partners in the first two months of 2021. For the two new segments Europe
and MEA, segment financial information is reported for the last ten months of the year
ended 31 December 2021.
Based on the facts above, the Group does not believe that a meaningful quantitative
comparability can be achieved considering the nature of changes in the relationship
between the parties pre- and post-acquisition. Therefore, the following tables should be
read in conjunction with the above descriptions.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
19
146
(In € million)
EMEA5 Europe6 MEA6 APAC Americas
Total
segments
Group
Functions
Recon-
ciling
items Total
Year ended 31 December 2021
Revenue from
transactions with
external customers
Revenue from inter-
segment transactions
Segment revenue
Core revenue from
transactions with
external customers1
119.3
615.7 251.9 705.6
365.6
2,058.1
3.7
- 2,061.8
40.8
160.1
260.7
14.5
876.4 252.5 720.1
0.6
-
365.6
316.6
2,374.7
62.3
66.0
(378.9)
-
(378.9) 2,061.8
119.3
615.7 251.9 690.6
365.6
2,043.1
3.7
- 2,046.8
Adjusted EBITDA2
38.4
203.7
78.5 211.8
96.7
629.1
(58.5)
Capital expenditure:3
PP&E (excl. filling
machines)3, 4
Net filling machines3, 4
Net capital expenditure3
(15.5)
(84.7)
(12.4)
(89.6)
(34.0)
(236.2)
(9.7)
(3.3)
(7.1)
(10.4)
(29.0)
(14.5)
(43.5)
(3.3)
(2.9)
(6.2)
(33.4)
(5.8)
(39.2)
(16.4)
(17.3)
(33.7)
(85.4)
(47.6)
(133.0)
(7.5)
(2.2)
(9.7)
-
-
-
-
-
570.6
(245.9)
(92.9)
(49.8)
(142.7)
(In € million)
EMEA
APAC Americas
Year ended 31 December 2020
Total
segments
Group
Functions
Reconciling
items
Total
Revenue from transactions
with external customers
Revenue from inter-segment
transactions
797.5
679.5
320.8
1,797.8
18.3
- 1,816.1
Segment revenue
1,027.3
695.4
321.0
229.8
15.9
0.2
245.9
2,043.7
44.5
62.8
(290.4)
-
(290.4) 1,816.1
Core revenue from
transactions with
external customers1
Adjusted EBITDA2
Capital expenditure:3
PP&E (excl. filling
machines)3, 4
Net filling machines3, 4
Net capital expenditure3
797.5
659.8
320.8
1,778.1
18.3
- 1,796.4
274.1
215.0
72.8
561.9
(63.6)
(58.7)
(100.0)
(47.0)
(205.7)
6.5
(17.3)
(6.7)
(24.0)
(52.0)
(29.9)
(81.9)
(4.4)
(41.4)
(45.8)
(73.7)
(78.0)
(151.7)
(3.2)
9.7
6.5
-
-
-
-
-
498.3
(199.2)
(76.9)
(68.3)
(145.2)
1
2
3
4
5
6
Core revenue from transactions with external customers represents revenue from transactions with external customers, excluding revenue from sales of folding
box board to third parties. Core revenue is not a defined performance measure in IFRS (see note 9).
The performance of the segments is presented with reference to adjusted EBITDA. Adjusted EBITDA is defined by the Group as EBITDA, adjusted to exclude certain
non-cash transactions and items of a significant or unusual nature and to include the cash impact of dividends received from joint ventures. EBITDA and adjusted
EBITDA are not defined performance measures in IFRS. Refer to note 9 for the detailed definitions of these performance measures and the reconciliation between
the Group’s profit, EBITDA and adjusted EBITDA.
The Group’s capital expenditure mainly relates to investments in its own production, plant and equipment (PP&E capital expenditure, excluding filling machines)
and to the assembly and deployment of filling machines with customers (filling machine capital expenditure).
Net capital expenditure is defined by the Group as capital expenditure less upfront cash. Upfront cash is defined as consideration received as an upfront payment
for filling machines from customers. Capital expenditure relating to filling machines is presented net of this upfront payment in the tables above. Net capital
expenditure is not a defined performance measure in IFRS. Refer to note 11 for the reconciliation between capital expenditure and net capital expenditure.
Group Functions may report positive net filling machine capital expenditure if the capital expenditure of the global filling machine assembly during a period is
smaller than the payments it received under intra-group sales of filling machines. This could also happen occasionally in the case of PP&E capital expenditure,
excluding filling machines.
Segment financial information presented for January-February 2021.
Segment financial information presented for March-December 2021.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
20
147
Segment revenue per major product/service lines
Information about the Group’s revenue is included in note 6, where total revenue is
disaggregated by major product/service lines. The split of revenue between revenue from
sale of sleeves and closures, filling line revenue and service revenue is broadly the same at
Group level, between the Group’s segments and over recent years (also for the new MEA
segment). Other revenue was, until the acquisition of the remaining shares of the joint
ventures in the Middle East, mainly divided between EMEA and APAC.
Geographic information
The Group operates eight plants that produce aseptic carton sleeves (two each in
Germany and in China, and one each in Austria, Thailand, Saudi Arabia and Brazil). The
plant in Saudi Arabia was part of the acquisition of the remaining shares of the joint
ventures in the Middle East on 25 February 2021 (see note 27). The second plant in China
became operational in December 2020 (see note 13). In connection with this, the Group
decided to close its Australian sleeves manufacturing operations (see further note 9).
The Group also operates two assembly plants for filling machines in Germany and China,
and a production plant for closures in Switzerland. It operates three R&D centres (one
each in Germany, Switzerland and China), three technology centres (one each in Germany,
United Arab Emirates and China) and five training centres (one each in Germany, Saudi
Arabia, China, Thailand and Brazil). The Group sold its paper mill in New Zealand in the
year ended 31 December 2021 (see notes 9 and 26).
The below table includes information about the Group’s non-current assets on a country
basis. Non-current assets exclude financial instruments, deferred tax assets and net
defined benefit assets.
(In € million)
Germany
China
United Arab Emirates
Switzerland1
Thailand
Other countries
Total non-current assets
1
The Company's country of domicile is Switzerland.
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
1,111.2
692.5
630.8
478.6
460.2
1,015.6
4,388.9
1,076.8
619.9
-
492.5
484.4
952.4
3,626.0
The non-current assets are reported based on the geographic location of the business
operations. The non-current assets are predominantly located in the countries in which
the Group’s production and assembly plants are situated. The Group’s intellectual
property is primarily held by a company based in Switzerland.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
21
148
The below table includes information about the Group’s revenue from external customers
on a country basis.
(In € million)
China
Germany
Switzerland
Other countries
Total revenue from external customers
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
324.7
217.9
12.4
1,506.8
2,061.8
296.1
211.7
13.1
1,295.2
1,816.1
Revenue is reported based on the geographic location of customers. The customer base of
the Group includes international companies, large national and regional companies as
well as small local companies.
Information about major customers
The Group does not have revenue from transactions with a single external customer
amounting to 10% or more of the Group’s revenue in any of the periods presented.
8
Other income and expenses
Other income and expenses relate to activities and transactions that are outside the
Group’s principal revenue generating activities. Foreign currency exchange gains and
losses as well as fair value changes on commodity and foreign currency exchange
derivatives entered into as part of the operating business are also presented as other
income and expenses. Activities and transactions of a significant or unusual nature are
generally adjusted for in the performance measures adjusted EBITDA and adjusted net
income used by management (see note 9).
Composition of other income and expenses
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
7.8
2.8
0.7
48.8
12.1
6.4
78.6
(2.1)
(16.5)
(12.1)
(2.5)
(33.2)
21.5
3.7
0.7
-
-
3.4
29.3
(8.1)
(3.1)
-
(1.2)
(12.4)
(In € million)
Net change in fair value of operating derivatives
Income from miscellaneous services
Rental income
Gain on pre-existing interest in former joint ventures
Indirect tax recoveries
Other
Total other income
Net foreign currency exchange loss
Transaction- and acquisition-related costs
Loss on sale of subsidiary
Other
Total other expenses
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
22
149
For the year ended 31 December 2021, the Group recognised an unrealised net gain on
commodity and foreign currency derivatives of €7.8 million (€21.5 million in the year
ended 31 December 2020). This arose primarily because the Group has entered into
commodity derivative contracts fixing prices, mainly for polymers but also for aluminium,
at levels below the currently higher forward prices.
For the year ended 31 December 2021, the Group recognised a net foreign currency
exchange loss of €2.1 million. For the year ended 31 December 2020, the Group
recognised a net foreign currency exchange loss of €8.1 million. Foreign currency
exchange losses in the year ended 31 December 2020 mainly arose due to the
depreciation of the Thai Baht against the Euro and the US Dollar, and the depreciation of
the Brazilian Real against the Euro. The Brazilian Real foreign currency exchange losses
were mitigated by Brazilian Real hedging gains.
The indirect tax recoveries of €12.1 million in the year ended 31 December 2021 relate to a
recent Supreme Court ruling on sales tax in Brazil that is beneficial to the Group. Out-of-
period indirect tax recoveries of €10.3 million are excluded in the calculation of adjusted
EBITDA and adjusted net income (see note 9).
See note 9 for information about the gain on the pre-existing interest in the former joint
ventures, transaction- and acquisition-related costs and the loss on the sale of a
subsidiary. These items are excluded in the calculation of adjusted EBITDA and adjusted
net income.
9
Alternative performance measures
Management uses a number of measures to assess the performance of the Group that
are not defined in IFRS, including core revenue, adjusted EBITDA, adjusted net income,
adjusted earnings per share, net capital expenditure, free cash flow and net leverage ratio.
they are
important supplemental measures of
These alternative non-IFRS performance measures are presented as management believes
that
the Group’s performance.
Management believes that they are useful and widely used in the markets in which the
Group operates as a means of evaluating performance. In certain cases, these alternative
performance measures are also used to determine compliance with covenants in the
Group’s credit agreement and compensation of certain members of management.
However, these alternative performance measures should not be considered as
substitutes for the information contained elsewhere in these consolidated financial
statements.
This note includes information about adjusted EBITDA and adjusted net income. Core
revenue is presented in notes 6 and 7, adjusted earnings per share in note 10 and net
capital expenditure and free cash flow in note 11. Information about the Group’s net
leverage ratio is included in note 21.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
23
150
Adjusted EBITDA
Adjusted EBITDA is used by management for business planning and to measure
operational performance. Management believes that adjusted EBITDA provides investors
with further transparency into the Group’s operational performance and facilitates
comparison of the performance of the Group on a period-to-period basis and versus
peers.
EBITDA is defined by the Group as profit or loss before net finance expense, income tax
expense, depreciation of property, plant and equipment and right-of-use assets, and
amortisation of intangible assets. Adjusted EBITDA is defined by the Group as EBITDA,
adjusted to exclude certain non-cash transactions and items of a significant or unusual
nature
limited to, transaction- and acquisition-related costs,
restructuring costs, unrealised gains or losses on operating derivatives, gains or losses on
the sale of non-strategic assets, asset impairments and write-downs and share of profit or
loss of joint ventures, and to include the cash impact of dividends received from joint
ventures.
including, but not
The following table reconciles profit for the period to EBITDA and adjusted EBITDA.
(In € million)
Profit for the period
Net finance expense
Income tax expense
Depreciation and amortisation
EBITDA
Adjustments to EBITDA:
Unrealised gain on operating derivatives
Replacement of share of profit or loss of joint ventures with
cash dividends received from joint ventures
Restructuring costs, net of reversals
Loss on sale of subsidiary
Transaction- and acquisition-related costs
Fair value adjustment on inventories
Gain on pre-existing interest in former joint ventures
Out-of-period indirect tax recoveries
Impairment losses
Other
Adjusted EBITDA
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
172.1
31.4
52.3
306.6
562.4
68.0
81.0
23.0
277.7
449.7
(7.8)
(21.5)
1.6
26.0
12.1
16.5
10.4
(48.8)
(10.3)
4.4
4.1
570.6
5.3
6.3
-
3.1
-
-
-
49.3
6.1
498.3
The restructuring costs for the year ended 31 December 2021 mainly relate to the Group’s
paper mill in New Zealand (€9.8 million, net of reversals of provisions – see also notes 4
and 26) and to the closure of the Australian sleeves manufacturing operations
(€8.6 million). In the light of the opening of the Group’s new production plant for sleeves in
China in 2020, the Group has decided to close its Australian sleeves manufacturing
operations and consolidate the production of aseptic carton packaging sleeves into the
Group’s existing plants. The Australian sleeves production plant was part of the Visy
Cartons acquisition in 2019. For the year ended 31 December 2020, restructuring costs
primarily related to a move of production resources within the APAC segment and
organisational changes in the leadership team (see note 29).
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
24
151
A loss of €12.1 million arose upon the sale of the Group’s paper mill in New Zealand in
June 2021. See note 26.
For the year ended 31 December 2021, transaction- and acquisition-related costs mainly
relate to costs incurred for the planned acquisitions of Evergreen Asia and Scholle IPN. An
amount of €6.5 million relates to the acquisition of the remaining shares of the joint
ventures in the Middle East. See further notes 4 and 27.
The fair value adjustment on inventories of €10.4 million in the year ended 31 December
2021 relates to the fair value increase of the inventories of the former joint ventures in the
Middle East that was made in connection with the acquisition accounting (see note 27).
These inventories have subsequently been sold.
The remeasurement to fair value of the Group’s pre-existing 50% interest in the former
joint ventures in the Middle East resulted in a gain of €48.8 million in the year ended
31 December 2021 (see note 27).
Impairment losses for the year ended 31 December 2020 primarily related to impairment
of production-related assets comprising the Group’s paper mill
in New Zealand
(€38.0 million) and impairment losses resulting from the reallocation of production within
the APAC segment. See notes 12 and 15.
The “Other” category for the year ended 31 December 2021 mainly includes integration
costs. For the year ended 31 December 2020, “Other” mainly included termination benefits
relating to the former CEO (see note 29) and integration costs.
Adjusted net income
Adjusted net income is used by management to measure performance. Management
believes that adjusted net income is a meaningful measure because by removing certain
non-recurring charges and non-cash expenses, the Group’s operating result directly
associated with the period’s performance is presented. The use of adjusted net income
may also be helpful to investors because it provides better consistency and comparability
with past performance and facilitates period-to-period comparisons of results of
operations.
Adjusted net income is defined by the Group as profit or loss adjusted to exclude certain
items of significant or unusual nature including, but not limited to, the non-cash foreign
exchange impact of non-functional currency loans, amortisation of transaction costs, the
net change in fair value of financing-related derivatives, purchase price allocation (“PPA”)
depreciation and amortisation, adjustments made to reconcile EBITDA to adjusted EBITDA
and the estimated tax impact of the foregoing adjustments. The PPA depreciation and
amortisation arose due to the acquisition accounting that was performed when the Group
was acquired by Onex in 2015. No adjustments are made for PPA depreciation and
amortisation other than in connection with the Onex acquisition.
Annual Report 2021
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Financials
25
152
The following table reconciles profit for the period to adjusted net income.
(In € million)
Profit for the period
Non-cash foreign exchange impact of non-functional currency loans
and realised foreign exchange impact due to refinancing
Amortisation of transaction costs
Net change in fair value of financing-related derivatives
Onex acquisition PPA depreciation and amortisation
Net effect of early repayment of loans
Interest on out-of-period indirect tax recoveries
Adjustments to EBITDA:
Unrealised gain on operating derivatives
Replacement of share of profit or loss of joint ventures with
cash dividends received from joint ventures
Restructuring costs, net of reversals
Loss on sale of subsidiary
Transaction- and acquisition-related costs
Fair value adjustment on inventories
Gain on pre-existing interest in former joint ventures
Out-of-period indirect tax recoveries
Impairment losses
Other
Tax effect on above items
Adjusted net income
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
172.1
68.0
(10.6)
3.6
-
103.1
3.7
(3.1)
24.6
3.1
(0.5)
125.4
19.7
-
(7.8)
(21.5)
1.6
26.0
12.1
16.5
10.4
(48.8)
(10.3)
4.4
4.1
(24.6)
252.4
5.3
6.3
-
3.1
-
-
-
49.3
6.1
(56.6)
232.3
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
26
153
10
Earnings per share
Basic and diluted earnings per share
Basic earnings per share are calculated by dividing the consolidated profit for the period
by the weighted average number of shares in issue during the period, excluding the
weighted average number of treasury shares. Diluted earnings per share reflects the
effect of potentially dilutive shares under the Group’s share-based payment plans and
arrangements.
The below table shows the weighted average numbers of shares outstanding before and
after adjustments for the effect of potentially dilutive shares. The Group issued shares on
22 February 2021 (see note 24).
Weighted average number of ordinary shares
Issued shares as of 1 January 2020
Effect of treasury shares held
Weighted average number of shares as of 31 December 2020 - basic
Effect of share-based payment plans and arrangements
Weighted average number of shares as of 31 December 2020 - diluted
Issued shares as of 1 January 2021
Effect of issue of shares on 22 February 2021
Effect of treasury shares held
Weighted average number of shares as of 31 December 2021 - basic
Effect of share-based payment plans and arrangements
Weighted average number of shares as of 31 December 2021 - diluted
320,053,240
(8,360)
320,044,880
34,373
320,079,253
320,053,240
14,979,092
(147,880)
334,884,452
777,937
335,662,389
The following table shows the calculation of basic and diluted earnings per share.
(In € million unless indicated)
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
Profit for the period
Weighted average number of shares for the period - basic (in numbers)
172.1
334,884,452
68.0
320,044,880
Basic earnings per share (in €)
0.51
0.21
Profit for the period
Weighted average number of shares for the period - diluted (in numbers)
172.1
335,662,389
68.0
320,079,253
Diluted earnings per share (in €)
0.51
0.21
Adjusted earnings per share
Adjusted earnings per share is defined by the Group as adjusted net income divided by
the weighted average number of shares. Management believes that (basic) adjusted
earnings per share is a useful measure as adjusted net income is used to measure
performance. Adjusted net income and adjusted earnings per share are not defined
performance measures in IFRS (see note 9).
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
27
154
The below table shows the calculation of basic and diluted adjusted earnings per share.
(In € million unless indicated)
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
Adjusted net income
Weighted average number of shares for the period - basic (in numbers)
252.4
334,884,452
232.3
320,044,880
Adjusted earnings per share - basic (in €)
0.75
0.73
Adjusted net income
Weighted average number of shares for the period - diluted (in numbers)
252.4
335,662,389
232.3
320,079,253
Adjusted earnings per share - diluted (in €)
0.75
0.73
11
Cash flow information
This note includes information about the Group’s cash flows as well as non-cash
transactions. Where more relevant for the understanding of a transaction, cash inflows
and outflows are described in the notes of the respective assets or liabilities to which the
cash flows relate. The same applies to non-cash transactions.
Net capital expenditure
The Group’s capital expenditure primarily relates to investments in own production, plant
and equipment (PP&E capital expenditure, excluding filling machines) and to the assembly
and deployment of filling machines with customers under contracts accounted for as
operating leases (filling machine capital expenditure).
Net capital expenditure is defined by the Group as capital expenditure less upfront cash.
Upfront cash is defined as consideration received as an upfront payment for filling
machines from customers. Net capital expenditure is not a defined performance measure
in IFRS (see note 9).
Management uses net capital expenditure as it demonstrates better than gross capital
expenditure how cash generative the business is. As the Group typically receives a portion
of the total consideration for a filling machine as an upfront payment from the customer
(see also note 20), the cash outflow relating to filling machines is generally lower than
implied by the gross capital expenditure figure. Payments received for filling lines
(including upfront payments) are included in cash flows from operating activities.
The following table reconciles capital expenditure to net capital expenditure.
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
92.9
153.0
245.9
(103.2)
142.7
76.9
122.3
199.2
(54.0)
145.2
(In € million)
PP&E (excl. filling machines)
Gross filling machines
Capital expenditure (gross)
Upfront cash (for filling machines)
Net capital expenditure
Annual Report 2021
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Consolidated financial statements
Financials
28
155
Free cash flow
Free cash flow is used by management to evaluate the performance of the Group. Free
cash flow is defined by the Group as net cash from operating activities plus dividends
received from the joint ventures less capital expenditure and payments of lease liabilities.
Free cash flow is not a defined performance measure in IFRS (see note 9).
The following table reconciles net cash from operating activities to free cash flow.
(In € million)
Net cash from operating activities
Dividends received from joint ventures
Acquisition of PP&E and intangible assets
Payment of lease liabilities
Free cash flow
Non-cash transactions
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
530.9
-
(245.9)
(26.7)
258.3
425.8
22.7
(199.2)
(16.1)
233.2
Non-cash transactions for the year ended 31 December 2021 include the issue of and
subsequent transfer of 17,467,632 SIG shares (with a nominal value of CHF 0.01 per share)
to OIG on 25 February 2021 as part of the consideration for the remaining shares of the
joint ventures in the Middle East. The fair value of the shares was €323.3 million (see also
notes 24 and 27). Non-cash transactions for the year ended 31 December 2021 also
include the derecognition of capitalised transaction costs of €3.7 million resulting from the
post-acquisition repayment of external loans of one of the former joint ventures. Non-
cash transactions for the year ended 31 December 2020 included the derecognition of
capitalised transaction costs and original issue discount in the amount of €17.6 million
resulting from the repayment of the secured term loans in June 2020. See further notes 22
and 23.
Other non-cash transactions include the initial recognition of leases on the statement of
the financial position (see notes 13 and 22) and the granting of instruments under the
Group’s 2020 and 2021 equity-settled share-based plans and arrangements (see note 31).
Notably for the year ended 31 December 2020, the 20-year lease of the Group’s second
sleeves production plant in China commenced in December 2020 (with an initial lease
liability and related right-of-use asset recognised of approximately €60 million each).
Cash outflows under lease contracts
The total cash outflow for the Group’s lease contracts for the year ended 31 December
2021 was €38.2 million (€21.8 million for the year ended 31 December 2020).
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
29
156
OUR OPERATING ASSETS AND
LIABILITIES
This section includes certain information about the Group’s operating assets and liabilities.
The main operating assets relate to the Group’s production equipment and its deployed
filling lines accounted for as operating leases. The Group also has right-of-use assets
resulting from lease contracts entered into as a lessee. The Group’s trade receivables
balance is reduced by selling trade receivables under securitisation and factoring
programmes. A substantial part of the Group’s assets relates to goodwill and other
intangible assets. Impairment testing of goodwill and trademarks with indefinite useful
lives is described in this section. The main operating liabilities relate to trade payables and
accruals for various incentive programmes. Other liabilities mainly comprise deferred
revenue relating to advance payments received in relation to filling lines deployed under
contracts accounted for as operating leases.
12
Property, plant and equipment
Property, plant and equipment (“PP&E”) is mainly composed of filling lines that are
deployed at customers’ sites under contracts that qualify to be accounted for as operating
leases (see note 5.5.2) and the Group's plant and production equipment. PP&E also
includes work in progress, which relates to construction of filling machines and to filling
lines under installation at customers’ sites as well as to construction of various types of
production equipment used by the Group in its production and assembly plants. The
Group is a lessor only in respect of its filling lines deployed with its customers.
Composition of PP&E
(In € million)
Cost
Accumulated depreciation
and impairment losses
Carrying amount as of 31 December 2020
Cost
Accumulated depreciation
and impairment losses
Carrying amount as of 31 December 2021
Carrying amount as of 1 January 2020
Additions
Disposals
Depreciation
Impairment losses
Transfers
Effect of movements in exchange rates
Carrying amount as of 31 December 2020
Land Buildings
Plant and
equipment
Work in
progress
Filling
lines
Total
38.1
173.2
610.2
187.0
875.2 1,883.7
(9.5)
28.6
(64.4)
108.8
(443.7)
(8.5)
(371.0)
(897.1)
166.5
178.5
504.2
986.6
36.4
174.7
750.1
241.0
1,133.8 2,336.0
(8.7)
27.7
40.1
-
-
-
(9.2)
-
(2.3)
28.6
(71.4)
103.3
134.6
0.8
-
(9.1)
(11.6)
1.6
(7.5)
108.8
(477.4)
272.7
(6.5)
234.5
(501.5) (1,065.5)
632.3 1,270.5
221.1
2.4
(0.1)
(62.3)
(13.1)
34.7
(16.2)
166.5
156.0
191.7
-
-
(8.6)
(149.3)
(11.3)
521.3 1,073.1
199.3
(0.5)
(160.2)
(43.8)
(2.3)
(79.0)
4.4
(0.4)
(88.8)
(1.3)
110.7
(41.7)
178.5
504.2
986.6
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
30
157
(In € million)
Land Buildings
Plant and
equipment
Work in
progress
Filling
lines
Carrying amount as of 1 January 2021
Additions
Additions through business combination
Sale of subsidiary
Disposals
Depreciation
Impairment losses
Transfers
Effect of movements in exchange rates
Carrying amount as of 31 December 2021
28.6
-
-
(0.8)
-
-
-
-
(0.1)
27.7
108.8
0.6
0.7
-
-
(8.3)
-
0.7
0.8
103.3
166.5
1.0
58.7
(0.1)
(0.1)
(51.7)
(1.4)
88.8
11.0
272.7
178.5
239.8
25.7
-
-
-
(0.1)
(217.1)
7.7
504.2
2.0
97.4
-
(0.2)
(107.4)
(2.7)
126.1
12.9
Total
986.6
243.4
182.5
(0.9)
(0.3)
(167.4)
(4.2)
(1.5)
32.3
234.5
632.3 1,270.5
The increase in PP&E since 31 December 2020 is impacted by the full consolidation of the
former joint ventures in the Middle East in 2021. On the acquisition date, the Group
recognised additional items of PP&E (mainly filling lines and production equipment) in the
amount of €182.5 million.
Notes 7 and 11 include further information about the Group’s capital expenditure with
regard to its production equipment and filling lines.
Depreciation and impairment of PP&E
Depreciation of PP&E is recognised in the following components in the statement of profit
or loss and other comprehensive income.
(In € million)
Cost of sales
Selling, marketing and distribution expenses
General and administrative expenses
Total depreciation
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
161.0
0.7
5.7
167.4
154.3
1.0
4.9
160.2
The impairment losses recognised in the year ended 31 December 2020 primarily related
to production-related assets of Whakatane, the Group’s paper mill in New Zealand, that
was sold in the year ended 31 December 2021 (see notes 4, 9 and 26). Out of the total
amount of impairment losses of €43.8 million, €32.5 million related to the paper mill. The
remaining amount mainly related to impairment losses resulting from the reallocation of
production within the APAC segment. The recoverable amounts of the impaired assets are
not material. The impairment losses are recognised as part of cost of sales in the
statement of profit or loss and other comprehensive income.
Capital expenditure commitments
As of 31 December 2021, the Group had entered into contracts to incur capital
expenditure of €112.6 million (€62.0 million as of 31 December 2020) for the acquisition of
PP&E. The commitments relate to filling machine assembly, certain downstream
equipment and equipment for the Group’s sleeves production plants, including equipment
to be used in the new plant in Mexico that is expected to become operational in the first
quarter of 2023. The new Mexican sleeves production plant will be leased by the Group
(see note 13).
Annual Report 2021
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31
158
Accounting policy, significant judgements and estimates
Items of PP&E are measured at cost less accumulated depreciation and accumulated impairment
losses. Gains and losses on disposals of items of PP&E are recognised in profit or loss as part of other
income or expenses.
The cost of an acquired or self-constructed item of PP&E includes any costs directly attributable to
bringing the asset to the location and condition necessary for it to be capable of operating in the
manner intended by management. Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset form part of the cost of that asset. The cost of the
Group’s filling lines also includes the estimated cost of dismantling to the extent such an amount is
recognised as a provision. Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group and the cost can be
measured reliably. The costs of the day-to-day servicing of PP&E are recognised in profit or loss as
incurred.
Items of PP&E are depreciated on a straight-line basis over their estimated useful lives, with
depreciation generally recognised in profit or loss. Land is not depreciated. The estimated useful lives
for the current and comparative periods are as follows:
Buildings
Plant and equipment:
Production-related equipment and machinery 4 to 12 years
Furniture and fixtures 3 to 8 years
Filling lines (leased assets, SIG as the lessor) 10 years
15 to 40 years
The Group as a lessor – filling lines
The Group mainly deploys filling lines under contracts that qualify to be accounted for as operating
leases (see note 5.5.2 for additional details). As further described in this accounting policy section, the
filling lines are measured at cost and depreciated from the deployment date over their estimated
useful life of ten years and tested for impairment when there is an impairment indicator.
Impairment of PP&E
Items of PP&E are reviewed regularly and at least annually to identify whether there is an indication
of impairment. If an impairment indicator exists, the asset’s recoverable amount is estimated. See
note 5.5.3 for further details about impairment testing of non-financial assets.
A change in the Group’s intended use of certain assets, such as a decision to rationalise production
locations, may trigger a future impairment. Value in use calculations require management to
estimate the future cash flows expected to arise from an individual asset or cash generating unit and
to determine a suitable discount rate to calculate present value.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
32
159
13
Right-of-use assets
The Group generally purchases its production-related buildings and equipment (see
note 12). However, it also enters into lease contracts. Right-of-use assets relate to lease
contracts that the Group has entered into as a lessee. The contracts mainly cover leases of
assets such as office buildings, production-related buildings and equipment, warehouses
and cars.
Composition of right-of-use assets
(In € million)
Cost
Accumulated depreciation
and impairment losses
Carrying amount as of 31 December 2020
Cost
Accumulated depreciation
and impairment losses
Carrying amount as of 31 December 2021
Carrying amount as of 1 January 2020
Additions
Depreciation
Other adjustments
Effect of movements in exchange rates
Carrying amount as of 31 December 2020
Carrying amount as of 1 January 2021
Additions
Additions through business combination
Depreciation
Impairment losses
Effect of movements in exchange rates
Carrying amount as of 31 December 2021
Buildings
Plant and
equipment
Cars
Total
113.1
49.4
7.5
170.0
(12.6)
100.5
156.7
(26.9)
129.8
24.1
86.1
(7.3)
(0.2)
(2.2)
100.5
100.5
5.8
26.5
(13.6)
-
10.6
129.8
(12.7)
36.7
65.8
(24.8)
41.0
21.6
23.8
(8.1)
(0.2)
(0.4)
36.7
36.7
13.7
0.2
(11.5)
(0.1)
2.0
41.0
(3.6)
3.9
(28.9)
141.1
9.6
232.1
(5.8)
3.8
3.3
3.0
(2.1)
(0.2)
(0.1)
3.9
3.9
2.2
-
(2.3)
(0.1)
0.1
3.8
(57.5)
174.6
49.0
112.9
(17.5)
(0.6)
(2.7)
141.1
141.1
21.7
26.7
(27.4)
(0.2)
12.7
174.6
The increase in right-of-use assets since 31 December 2020 is impacted by the full
consolidation of the former joint ventures in the Middle East in 2021. The sleeves
production plant of the former joint venture in Saudi Arabia is leased, with a remaining
lease term of twelve years. See also notes 22 and 27.
The Group’s most significant leases are the 20-year lease of its second sleeves production
plant in China that commenced in December 2020, and the 20-year lease of the SIG Tech
Centre in China that commenced in 2018. These two leases, together with the lease of the
sleeves production plant in Saudi Arabia, make up the larger part of the carrying amount
of leased buildings. The larger part of the plant and equipment category relates to leases
of production equipment for closures with a lease term of four to five years. The lease
term of other assets is most commonly in the range of three to five years.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
33
160
Depreciation of right-of-use assets
Depreciation of right-of-use assets is recognised in the following components in the
statement of profit or loss and other comprehensive income.
(In € million)
Cost of sales
Selling, marketing and distribution expenses
General and administrative expenses
Total depreciation
Lease commitments
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
19.7
4.4
3.3
27.4
11.8
3.0
2.7
17.5
The Group has entered into lease contracts that have not yet commenced. The present
value of estimated future lease payments under these lease contracts is approximately
€77 million as of 31 December 2021 (€35 million as of 31 December 2020).
These contracts mainly relate to leases of production equipment for closures that are
expected to commence within the next twelve to fifteen months and to the 15-year lease
of the Group’s first sleeves production plant in Mexico that is expected to commence in
the second half of 2022, but with production expected to start in the first quarter of 2023
(see also note 12). As of 31 December 2020, the committed lease payments mainly related
to leases of production equipment for closures that were expected to commence within
the next twelve to fifteen months.
Accounting policy
At the commencement date of lease, the Group recognises a lease liability and a related right-of-use
asset. The accounting for lease liabilities is described in note 22.
The right-of-use asset represents the Group’s right to use the leased asset. A right-of-use asset is
initially measured at cost, which in many cases will equal the amount recognised as a lease liability.
However, adjustments are required for any lease payments made at or before the commencement
date of the lease and any initial direct costs incurred. The cost also includes the estimated cost to
dismantle and remove the leased asset, to restore it to the condition required under the lease
contract or to restore the site on which it is located, to the extent such an amount is recognised as a
provision.
Subsequent to initial recognition, a right-of-use asset is measured at cost less accumulated
depreciation and impairment losses. A right-of-use asset is subsequently also adjusted for certain
remeasurements of the related lease liability.
Right-of-use assets are depreciated on a straight-line basis from the commencement date of the
lease over the shorter of the lease term and their useful lives, unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term.
As for PP&E, right-of-use assets are reviewed regularly and at least annually to identify whether there
is an indication of impairment. If an impairment indicator exists, the asset’s recoverable amount is
estimated. See note 5.5.3 for further details about impairment testing of non-financial assets.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
34
161
14
Intangible assets
The largest portion of the Group's intangible assets is goodwill, which primarily arose as a
result of the acquisition of the SIG Group by Onex in 2015. The other intangible assets
mainly consist of trademarks, customer relationships and technology-related assets. The
trademarks have indefinite useful lives.
Composition of intangible assets
(In € million)
Goodwill
Trade-
marks
Customer
relation-
ships
Technology
and other
assets
Total
1,566.7
311.1
614.6
366.6
2,859.0
Cost
Accumulated amortisation
and impairment losses
Cost
Accumulated amortisation
and impairment losses
Carrying amount as of 31 December 2020
1,566.7
311.1
-
-
(351.7)
262.9
(214.5)
152.1
(566.2)
2,292.8
2,128.1
325.3
774.1
389.7
3,617.2
-
-
Carrying amount as of 31 December 2021
2,128.1
325.3
Carrying amount as of 1 January 2020
Additions
Amortisation
Impairment losses
Effect of movements in exchange rates
1,621.9
-
-
-
(55.2)
Carrying amount as of 31 December 2020
1,566.7
Carrying amount as of 1 January 2021
Additions
Additions through business combination
Amortisation
Effect of movements in exchange rates
1,566.7
-
518.4
-
43.0
Carrying amount as of 31 December 2021
2,128.1
309.6
-
-
-
1.5
311.1
311.1
-
-
-
14.2
325.3
(433.1)
341.0
(263.6)
126.1
340.8
-
(62.5)
-
(15.4)
262.9
262.9
-
146.1
(74.0)
6.0
341.0
188.0
1.0
(37.5)
(0.1)
0.7
152.1
152.1
2.8
3.1
(37.8)
5.9
126.1
(696.7)
2,920.5
2,460.3
1.0
(100.0)
(0.1)
(68.4)
2,292.8
2,292.8
2.8
667.6
(111.8)
69.1
2,920.5
The acquisition of the remaining shares of the joint ventures in the Middle East on
25 February 2021 resulted in an increase in goodwill of €518.4 million and an increase in
other intangible assets of €149.2 million (see note 27).
Research and development
Research and development costs (excluding depreciation and amortisation expense)
recognised as a component of general and administrative expenses amount to
€56.3 million for the year ended 31 December 2021 (€50.9 million for the year ended
31 December 2020).
Annual Report 2021
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35
162
Amortisation of intangible assets
Amortisation of intangible assets is recognised in the following components in the
statement of profit or loss and other comprehensive income.
(In € million)
Cost of sales
Selling, marketing and distribution expenses
General and administrative expenses
Total amortisation
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
75.1
0.2
36.5
111.8
62.6
-
37.4
100.0
Annual impairment tests of goodwill and trademarks with indefinite
useful lives
Goodwill with a carrying amount of €2,128.1 million as of 31 December 2021
(€1,566.7 million as of 31 December 2020) and trademarks with indefinite useful lives with
a carrying amount of €325.3 million as of 31 December 2021 (€311.1 million as of
31 December 2020) are not subject to amortisation but tested for impairment on an
annual basis and whenever there is an impairment indicator. The annual impairment tests
are performed in the fourth quarter each year.
The Group does not monitor goodwill at a lower level than Group level for internal
management purposes but goodwill must for impairment testing purposes be allocated to
a cash generating unit (“CGU”), or group of CGUs, that is not larger than an operating
segment before aggregation. The Group has allocated the goodwill for impairment testing
purposes to its four operating segments (Europe, MEA, APAC and Americas).
Goodwill
For the impairment test of goodwill, the recoverable amount has been estimated with
reference to value in use. In assessing the value in use, the estimated future cash flows (in
Euros) have been discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money as well as the risks
specific to each segment. The weighted average cost of capital (“WACC”) is used to
determine the discount rate. Cash flows for the first five years are based on financial plans
approved by management. Cash flows after the five-year internal planning period are
extrapolated using terminal growth rates considering the estimated market growth for
companies in the carton packaging industry and, for the 2021 impairment test, aligned
with the estimated long-term inflation. The terminal growth rates used by the Group for
impairment testing purposes do not exceed the estimated long-term growth rates in the
carton packaging industry.
Goodwill is allocated to the Group’s four operating (and reportable) segments as per the
following table. The goodwill that arose upon the acquisition of the remaining shares of
the joint ventures in the Middle East has been allocated to MEA (see also note 7). The
goodwill that had been allocated to the former segment EMEA has been fully reallocated
to Europe. The table also includes information about the key assumptions used in the
impairment test.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
36
163
(In € million or %)
EMEA
Europe
MEA
APAC
Americas
Total goodwill
2,128.1
Year ended 31 December 2021
Growth
Pre-tax
rate discount rate
Carrying
amount
Year ended 31 December 2020
Growth
Pre-tax
rate discount rate
Carrying
amount
-
757.2
526.4
656.3
188.2
-
2.0%
2.0%
2.0%
2.0%
-
6.6%
8.0%
5.6%
8.9%
757.2
-
-
632.7
176.8
1,566.7
1.25%
-
-
2.5%
2.25%
6.1%
-
-
7.8%
10.8%
No impairment of goodwill was identified in either of the periods. Management considers
it unlikely that any realistic change in the assumptions used, including changes in the
assessed future cash flows, would result in an impairment loss. The estimated recoverable
amounts of the goodwill allocated to the segments significantly exceed the respective
carrying amounts in both periods. The Group overall has not been, and is currently not,
significantly impacted by the COVID-19 pandemic (see note 5.4). Management does not
believe that the effects of the COVID-19 pandemic will have any significant long-term
negative impacts on the Group’s estimated future cash flows. However, there is no
assurance that the Group’s experience to date, which has been reflected in the
assessment of future cash flows, will be representative of future periods.
Trademarks with indefinite useful lives
The value of the Group’s trademarks with indefinite useful lives is associated with the
Group as a whole. Trademarks are tested for impairment at Group level as all SIG entities
benefit from the trademarks. The entities are charged a royalty fee for the use of the SIG
trademarks. For the impairment test, the recoverable amount has been estimated with
reference to value in use. The assessed royalty fees have been discounted to their present
value using a pre-tax discount rate at Group level of 6.6% (7.6% in the 2020 annual
impairment test) and a terminal growth rate at Group level of 2.0% (2.0% in the 2020
annual impairment test). The WACC is used to determine the discount rate. The royalty
fees for the first five years are based on financial plans approved by management. Cash
flows after the five-year internal planning period are extrapolated using a terminal growth
rate considering the estimated market growth for companies in the carton packaging
industry and, for the 2021 impairment test, aligned with the estimated long-term inflation.
The terminal growth rate used by the Group for impairment testing purposes does not
exceed the estimated long-term growth rates in the carton packaging industry.
No impairment of trademarks with indefinite useful lives was identified in any of the
periods. Management considers it unlikely that any realistic change in the assumptions
used would result in an impairment loss.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
37
164
Accounting policy
Goodwill arising upon business combinations is measured at cost less accumulated impairment
losses. With respect to investments in joint ventures accounted for using the equity method, the
carrying amount of goodwill is included in the carrying amount of the investment.
The Group’s trademarks are assessed to have indefinite useful lives considering the long history of
the SIG brand and its expected future continuous use. They are measured at cost less accumulated
impairment losses. Other intangible assets, including customer relationships and technology assets,
have finite useful lives and are measured at cost less accumulated amortisation and accumulated
impairment losses. Gains and losses on disposals of intangible assets are recognised in profit or loss
as part of other income or expenses.
Development expenditure is capitalised only if the expenditure can be measured reliably, the product
or process is technologically and commercially feasible, future economic benefits are probable and
the Group intends to and has sufficient resources to complete the development and to use or sell the
asset. If the capitalisation criteria are not met, development expenditure is recognised in profit or
loss as incurred. Due to uncertainties inherent in the development of new products and processes,
notably regarding the difficulty of reliably estimating expected future economic benefits,
development costs typically do not meet the capitalisation criteria but are recognised as general and
administrative expenses as incurred. Expenditure on research activities is recognised in profit or loss
as incurred.
Intangible assets with finite useful lives are amortised on a straight-line basis over their estimated
useful lives, with amortisation generally recognised in profit or loss. The estimated useful lives of
amortisable intangible assets for the current and comparative periods are as follows:
Customer relationships 10 years
Technology assets (including patented and non-patented
technology and know-how) 6 to 10 years
Other intangible assets (including software)
3 to 6 years
Impairment of goodwill and other intangible assets
Intangible assets with finite useful lives are reviewed regularly and at least annually to identify
whether there is an indication of impairment. If an impairment indicator exists, the asset’s
recoverable amount is estimated. Goodwill and intangible assets with indefinite useful lives are
tested for impairment on an annual basis and whenever there is an indication that they may be
impaired. See note 5.5.3 for further details about impairment testing of non-financial assets.
Significant judgements and estimates
Significant judgement is involved in the annual impairment testing of goodwill and trademarks with
indefinite useful lives. The judgements and assumptions used in estimating the recoverable amount
are included above under “Annual impairment tests of goodwill and trademarks with indefinite useful
lives”, where the outcome of the annual impairment tests is also described.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
38
165
15
Inventories
Composition of inventories and other financial information
(In € million)
Raw materials and consumables
Work in progress
Finished goods
Total inventories
As of
31 Dec.
2021
As of
31 Dec.
2020
71.2
22.6
100.7
194.5
50.0
21.0
99.7
170.7
The increase in inventories since 31 December 2020 is impacted by the full consolidation
of the former joint ventures in the Middle East in 2021.
As of 31 December 2021, inventories include a provision of €20.5 million due to write-
downs to net realisable value (€15.5 million as of 31 December 2020).
Raw materials and consumables recognised as an expense in cost of sales in the
statement of profit or loss and other comprehensive income amount to €856.5 million in
the year ended 31 December 2021 (€727.4 million in the year ended 31 December 2020).
Spare parts in the amount of €5.4 million related to production equipment of the Group’s
paper mill in New Zealand were impaired and recognised as an expense in cost of sales in
the statement of profit or loss and other comprehensive income in the year ended
31 December 2020. See note 12.
Accounting policy
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is
based on the weighted average cost formula and includes costs incurred in acquiring the inventories
and bringing them to their present location and condition. In the case of manufactured inventories
and work in progress, cost includes an appropriate share of production overheads based on normal
operating capacity. Net realisable value is the estimated selling price less the estimated costs of
completion and estimated costs necessary to make the sale.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
39
166
16
Trade and other receivables
Trade and other receivables mainly comprise trade receivables. The Group has a
securitisation programme under which it sells a portion of its sleeves-related trade
receivables without recourse. It also maintains a small number of minor factoring
programmes.
Composition of trade and other receivables
The below table provides an overview of the Group’s current and non-current trade and
other receivables. Trade receivables that will be sold under the securitisation and factoring
programmes are presented as trade receivables at fair value. Trade receivables that will
not be sold are presented as trade receivables at amortised cost.
(In € million)
Trade receivables at amortised cost
Trade receivables at fair value
Related party trade receivables
Note receivables
VAT receivables
Other receivables
Total current trade and other receivables
Non-current receivables
Total current and non-current receivables
As of
31 Dec.
2021
As of
31 Dec.
2020
171.3
25.7
0.4
-
35.4
47.1
279.9
4.2
284.1
86.3
16.2
13.4
32.6
16.3
57.2
222.0
6.3
228.3
The increase in trade receivables at amortised cost since 31 December 2020 is impacted
by the full consolidation of the former joint ventures in the Middle East in 2021. The
payment terms for the Group’s trade receivables for sleeve sales increased to an average
40 days due longer payment terms applied by the former joint ventures (between 30 and
40 days in the comparative period).
Trade receivables at amortised cost – loss allowance and ageing
(In € million)
Current
Past due up to 29 days
Past due 30 days to 89 days
Past due 90 days or more
Trade receivables at amortised cost, net of loss allowance
Loss allowance
Trade receivables at amortised cost, gross
As of
31 Dec.
2021
As of
31 Dec.
2020
122.8
21.4
7.0
20.1
171.3
(6.6)
177.9
65.0
9.7
4.6
7.0
86.3
(5.0)
91.3
The loss allowance represents the Group’s estimate of individually impaired trade
receivables as well as expected credit losses on trade receivables that are not individually
impaired. It primarily relates to trade receivables past due more than 90 days. The
expected credit losses are calculated using a provision matrix based on historical credit
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
40
167
loss experience and assessments of current and future conditions. The expected loss rate
for trade receivables past due more than 90 days that are not individually impaired is
between 25% and 100% (with an expected loss rate of 100% when due more than
270 days). For trade receivables past due 30 to 89 days that are not individually impaired,
the expected loss rate is around 5%.
Management believes that the recognised loss allowance sufficiently covers the risk of
default based on historical payment behaviour and assessments of future expectations of
credit losses, including regular analysis of customer credit risk. The acquired trade
receivables of the former joint ventures in the Middle East were recognised at their fair
value at the date of acquisition (see note 27). See also the section “Credit risk” in note 25.
The below table shows the movements in the loss allowance for trade receivables at
amortised cost.
(In € million)
Loss allowance as of 1 January
Change in loss allowance recognised in profit or
loss during the year
Foreign exchange differences
Loss allowance as of 31 December
Securitisation programme
As of
31 Dec.
2021
As of
31 Dec.
2020
5.0
1.6
-
6.6
3.4
2.5
(0.9)
5.0
The Group has an asset-backed securitisation programme under which it sells without
recourse a portion of its sleeves-related trade receivables to a special purpose entity. This
entity is not controlled, and therefore not consolidated, by the Group. The trade
receivables sold qualify for derecognition by the Group. The Group transfers the
contractual rights to the cash flows of the trade receivables at their nominal value less a
retained reserve in exchange for cash. The net amount is presented as part of other
current receivables and represents the Group’s right to receive this amount once the trade
receivables sold have been settled by the customers.
Trade receivables sold under the securitisation programme amounted to €119.5 million as
of 31 December 2021 (€115.6 million as of 31 December 2020), of which €106.1 million
(€92.1 million as of 31 December 2020) has been derecognised and €13.4 million
(€23.5 million as of 31 December 2020), representing the retained reserve, is presented as
part of other current receivables. The retained reserve represents the Group’s maximum
exposure to any losses in respect of trade receivables previously sold under the
programme. The interest expense paid under the asset-backed securitisation programme
amounted to €1.4 million in the year ended 31 December 2021 (€2.1 million as of
31 December 2020) and is presented as part of other finance expenses.
Factoring programmes
The Group has a small number of minor factoring programmes under which trade
receivables sold by the Group qualify for derecognition. The factored amounts totalled
€16.2 million as of 31 December 2021 (€13.3 million as of 31 December 2020). The interest
expense paid under the factoring programme amounted to €0.3 million in the year ended
31 December 2021 (€0.3 million as of 31 December 2020) and is presented as part of other
finance expenses.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
41
168
Accounting policy
Trade receivables at amortised cost
Trade and other receivables that will not be sold under the Group’s securitisation and factoring
programmes are initially recognised at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, these receivables are measured at amortised cost using the
effective interest method less a loss allowance. The loss allowance represents the Group’s estimate
of individually impaired trade receivables as well as expected credit losses on trade receivables that
are not individually impaired. The expected credit losses are calculated using a provision matrix
based on historical credit loss experience and assessments of current and future conditions. Any
subsequent recoveries of amounts previously written off relating to individually impaired trade
receivables are credited to the same line item in profit or loss where the original write-off was
recognised. The Group holds these trade receivables to collect the contractual cash flows and these
cash flows are solely payments of principal and interest on the principal outstanding.
Trade receivables at fair value through profit or loss
Trade receivables that will be sold under the Group’s securitisation and factoring programmes are
initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, they are also recognised at fair value. These trade receivables are sold and derecognised
shortly after their initial recognition in the statement of financial position. Any change in fair value is
recognised through profit or loss. The objective with these trade receivables is to realise the cash
flows primarily through selling them.
Derecognition of trade receivables
A financial asset is derecognised when the contractual rights to the cash flows from the asset have
expired, when the contractual rights to receive the cash flows have been transferred and the Group
has transferred substantially all of the risks and rewards of ownership, or when the Group transfers a
financial asset but retains the contractual rights to receive the cash flows but at the same time
assumes a contractual obligation to pay the cash flows to another recipient (and remits the cash
flows to the other recipient once having collected an amount from the original asset without material
delay, also being prohibited to sell or pledge the original asset). Any interest in such a derecognised
financial asset that is retained by the Group is recognised as a separate asset or liability.
17
Cash and cash equivalents
(In € million)
Cash and cash equivalents (unrestricted)
Restricted cash
Total cash and cash equivalents
As of
31 Dec.
2021
300.2
4.3
304.5
As of
31 Dec.
2020
353.3
1.8
355.1
Cash and cash equivalents mainly consist of cash at banks but may, from time to time,
also include short-term deposits at banks with maturities of three months or less that are
subject to an insignificant risk of changes in value (€12.5 million as of 31 December 2020).
The restricted cash relates to cash collected for the benefit of the Group’s securitisation
partner.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
42
169
18
Trade and other payables
Trade and other payables are mainly comprised of trade payables, accruals for various
customer incentives and other accrued expenses.
Composition of trade and other payables
(In € million)
Trade payables
Related party payables
Liability for various customer incentive programmes
VAT payables
Accrued interest third parties
Other current payables and accrued expenses
Current trade and other payables
Related party payables
Other non-current payables
Non-current payables
As of
31 Dec.
2021
As of
31 Dec.
2020
218.4
-
304.5
10.0
6.9
126.5
666.3
-
9.4
9.4
163.9
0.7
238.7
8.1
5.9
83.9
501.2
2.6
9.7
12.3
Total current and non-current trade and other payables
675.7
513.5
The increase in current trade and other payables since 31 December 2020 is impacted by
the full consolidation of the former joint ventures in the Middle East in 2021.
Liabilities with an impact on the Group’s revenue
In respect of liabilities relating to contracts with customers accounted for under the
revenue standard, the Group has refund and contract liabilities.
The Group’s incentive programmes relate to trade discounts, volume rebates and other
customer incentives linked to sleeve volumes (see also note 6). These programmes
generally run over a calendar year, resulting in a gradual build-up over the year of an
accrual liability against revenue from sale of sleeves. As of 31 December 2021 and
31 December 2020, the liabilities for customer incentive programmes mainly represent
incentives earned by customers under programmes running over a calendar year that
have not yet been settled by the Group. The remaining part represents accruals built up
for incentive programmes running over periods other than a calendar year (i.e. refund
liabilities). The Group has recognised an insignificant amount as revenue in the current
period that was included in the balance of liabilities for customer incentive programmes at
the beginning of the period but was never paid out as the conditions for the incentive
payments were not met (also applicable to the comparative period).
The Group’s contract liabilities relate to advance payments received from customers in
relation to the sale of sleeves and the sale of filling lines under contracts accounted for
under the revenue standard. These advance payments are recognised as revenue within a
short time frame from their initial recognition in the statement of financial position. As of
31 December 2021, the Group had contract liabilities in the amount of €24.9 million
(€11.4 million as of 31 December 2020). These advance payments are presented in the
table above as part of other current payables and accrued expenses. The amount of
advance payments recognised as of 31 December 2020 in relation to the sale of sleeves
and the sale of filling lines under contracts accounted for under the revenue standard has
been recognised as revenue in 2021.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
43
170
The Group also has advance payments received from customers in relation to filling lines
that will be deployed under contracts that qualify to be accounted for as operating leases.
If payments are received from customers before the filling line deployment date, they are
initially presented as part of “Trade and other payables” and included in other current
payables and accrued expenses in the table above (€39.7 million as of 31 December 2021
and €24.7 million as of 31 December 2020). Upon deployment of the filling lines, the
advance payments are reclassified to “Other liabilities” and presented as deferred revenue
liabilities. These deferred revenue liabilities are then released and recognised as revenue
over a certain period (see further note 20).
Accounting policy and significant estimates
Trade and other payables are initially recognised at fair value less any directly attributable
transaction costs. Subsequent to initial recognition, these liabilities are carried at amortised cost
using the effective interest method. The liability for accruals for various customer incentives is
estimated based on historical and current market trends as further described in note 6. The accruals
are presented against revenue.
19
Provisions
The Group’s provisions mainly relate to dismantling costs, warranties and restructuring
programmes.
Composition of provisions
(In € million)
Carrying amount as of 1 January 2020
Provisions made
Provisions used
Provisions reversed
Effect of movements in exchange rates
Carrying amount as of 31 December 2020
Current
Non-current
Carrying amount as of 31 December 2020
Carrying amount as of 1 January 2021
Additions through business combination
Sale of subsidiary
Provisions made
Provisions used
Provisions reversed
Effect of movements in exchange rates
Carrying amount as of 31 December 2021
Current
Non-current
Carrying amount as of 31 December 2021
Dismantling
Product
warranty
Restructur
-ing
Other
Total
12.2
1.6
-
-
(0.9)
12.9
0.1
12.8
12.9
12.9
-
-
1.8
(0.4)
-
0.2
14.5
-
14.5
14.5
7.6
8.5
(3.0)
(3.0)
(0.5)
9.6
9.6
-
9.6
9.6
0.7
(0.3)
7.1
(2.5)
(6.0)
-
8.6
8.6
-
8.6
4.5
6.3
(6.9)
-
-
3.9
2.6
1.3
3.9
3.9
-
(9.6)
39.6
(10.4)
(13.6)
-
9.9
9.4
0.5
9.9
3.3
4.3
(0.7)
(0.2)
(0.5)
6.2
1.8
4.4
6.2
6.2
0.2
(1.8)
1.9
(2.4)
(0.3)
-
3.8
1.1
2.7
3.8
27.6
20.7
(10.6)
(3.2)
(1.9)
32.6
14.1
18.5
32.6
32.6
0.9
(11.7)
50.4
(15.7)
(19.9)
0.2
36.8
19.1
17.7
36.8
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
44
171
Restructuring provision
The Group has a number of ongoing restructuring programmes. The Group’s restructuring
programmes are generally focused on reducing costs, streamlining the organisation and
adjusting headcount to be more closely aligned with the Group’s needs and changing
market demands. However, the main portion of the restructuring provision as of
31 December 2021 relates to the closure of the Group’s Australian sleeves manufacturing
operations. Payments are usually expected to be executed within the next one or two
years. For further details, see notes 9, 26 and 29.
Other provisions
Other provisions mainly relate to legal claims.
Accounting policy
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be reliably estimated and if it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are discounted if the time value of money is material.
The unwinding of the discount is recognised as part of finance expenses. A provision is classified as
current or non-current depending on whether the expected timing of the payment of the amounts
provided for is more than 12 months after the reporting date.
A provision for dismantling is recognised when the Group has an obligation to pay for dismantling
costs arising upon the return of a filling line. This obligation typically arises upon deployment of the
filling line (see also note 12). As such, the majority of the obligations are non-current.
A provision for warranties is recognised for products under warranty as of the reporting date based
upon known failures and defects as well as sales volumes and past experience of the level of
problems reported and products returned. Warranty claims are expected to be settled within
12 months.
A provision for restructuring is recognised when the Group has approved a detailed and formal
restructuring plan, and the restructuring has either commenced or has been publicly announced. The
provision only includes direct costs that are necessarily entailed by the restructuring and not
associated with ongoing activities. No provision is made for future operating costs.
A provision for onerous contracts is recognised when the expected benefits to be derived by an entity
from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
A provision for legal claims reflects management’s best estimate of the outcome based on the facts
known as of the reporting date.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
45
172
20 Other assets and liabilities
income, prepaid expenses and deferred
Other assets mainly comprise accrued
expenditure. Other liabilities mainly comprise deferred revenue relating to advance
payments received in relation to filling lines deployed under contracts that are accounted
for as operating leases. The Group’s derivative assets and liabilities are also presented as
part of other assets or other liabilities. The derivatives relate to commodity and foreign
currency exchange derivatives. See notes 25 and 33 for additional details about the
Group’s derivatives.
Composition of other assets
(In € million)
Derivative assets
Other current assets
Other current assets
Other non-current assets
Other non-current assets
Total other current and non-current assets
Composition of other liabilities
(In € million)
Derivative liabilities
Deferred revenue
Other current liabilities
Deferred revenue
Other non-current liabilities
Total other current and non-current liabilities
As of
31 Dec.
2021
As of
31 Dec.
2020
26.3
14.1
40.4
23.9
23.9
64.3
17.6
10.9
28.5
23.0
23.0
51.5
As of
31 Dec.
2021
As of
31 Dec.
2020
6.3
81.9
88.2
268.2
268.2
356.4
5.1
54.7
59.8
167.4
167.4
227.2
Deferred revenue relates to filling lines deployed under lease and sale contracts that
qualify to be accounted for as operating leases (see notes 5.5.2, 6, 12 and 18 for further
details). Advance payments received under such contracts vary between contracts and
customers but are recognised as a deferred revenue liability in the statement of financial
position at the deployment date and released to profit or loss to achieve recognition of
revenue on a straight-line basis over in general ten years for sale contracts and over in
general six years for lease contracts. Advance payments received before the filling line
deployment date are initially presented as part of “Trade and other payables” and
reclassified to this balance sheet position at the deployment date (see also note 18). The
increase in deferred revenue since 31 December 2020 is impacted by the full consolidation
of the former joint ventures in the Middle East in 2021.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
46
173
OUR FINANCING AND FINANCIAL RISK
MANAGEMENT
This section includes information about the Group’s financing in the form of loans and
borrowings and equity. The expenses for the financing are also presented in this section.
Lastly, the Group’s financial risk management policy and exposure to liquidity, market and
credit risks are described.
21
Capital management
The Board of Directors is responsible for monitoring and managing the Group’s capital
structure, which is comprised of equity (share capital and additional paid-in capital) as well
as loans and borrowings.
The policy of the Board of Directors is to maintain an acceptable capital base to give
confidence to the Group’s shareholders, holders of senior unsecured notes and lenders
under the senior unsecured credit facilities, and to sustain the future development of the
business. The Board of Directors monitors the Group’s financial position to ensure that it
complies at all times with its financial and other covenants as set out in the indenture
governing the senior unsecured notes and the credit agreement for the senior unsecured
credit facilities, as well as to ensure the payment of an appropriate level of dividends to
the shareholders.
As part of monitoring the Group’s financial position, the Board of Directors evaluates the
Group’s net debt and development of its net leverage ratio. Net leverage is defined by the
Group as net debt divided by adjusted EBITDA. Net debt comprises the Group’s current
and non-current loans and borrowings (including lease liabilities, and with notes and credit
facilities at principal amounts) less cash and cash equivalents (including any restricted
cash). See note 9 for the definition of adjusted EBITDA. The Group is, under the credit
agreement for its senior unsecured credit facilities, required to not exceed a net leverage
ratio of 4.25x until 31 December 2021 and 4.0x thereafter (4.5x until 31 December 2020).
Note 22 includes additional details about the Group’s loans and borrowings.
The table below presents the components of net debt and the net leverage ratio.
(In € million)
Gross debt
Cash and cash equivalents
Net debt
Net leverage ratio
As of
31 Dec.
20211
1,732.4
304.5
1,427.9
2.5x
As of
31 Dec.
2020
1,697.0
355.1
1,341.9
2.7x
1
In the calculation of the net leverage ratio as of 31 December 2021, adjusted EBITDA includes the adjusted EBITDA of the former joint ventures in the Middle East
from 1 January 2021.
The Company purchases its own shares on the market. The repurchased shares are
intended to be used to settle obligations under the Group’s share-based payment plans
and arrangements (see also notes 24 and 31).
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
47
174
In order to maintain or adjust the capital structure, the Board of Directors may elect to
take a number of measures, including for example to dispose of assets of the business,
alter its short- to medium term plans with respect to capital projects and working capital
levels, or to rebalance the level of equity and debt in place.
22
Loans and borrowings
Since a refinancing transaction in June 2020, the Group’s loans and borrowings mainly
consist of senior unsecured Euro-denominated notes and senior unsecured credit
facilities. The senior unsecured credit facilities consist of one Euro-denominated term loan
and a multi-currency revolving credit facility. Since March 2021, the Group’s loans and
borrowings also consist of an unsecured credit facility. It has been used to repay external
loans of one of the former joint ventures in the Middle East, but has subsequently been
repaid. Liabilities under lease contracts where the Group is the lessee are also included in
loans and borrowings.
In June 2020, the Group fully repaid its secured term loans existing as of that time without
premium or penalty by using available cash and the proceeds from the issue of notes and
its new term loan. The difference between the carrying amount of the secured term loans
as of the repayment date and the amount paid is presented as part of the net finance
expense (see note 23). The derivatives associated with the secured term loans were also
derecognised.
Composition of loans and borrowings
The below table shows the carrying amount of the Group’s loans and borrowings.
(In € million)
Lease liabilities
Current loans and borrowings
Senior unsecured notes
Senior unsecured credit facilities
Lease liabilities
Non-current loans and borrowings
Total loans and borrowings
As of
31 Dec.
2021
As of
31 Dec.
2020
29.4
29.4
994.5
545.7
153.0
24.0
24.0
992.2
544.5
123.0
1,693.2
1,659.7
1,722.6
1,683.7
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
48
175
The following table presents the components of the carrying amount of the loans and
borrowings.
(In € million)
Principal amount
Deferred transaction costs
Senior unsecured notes
Principal amount (including repayments)
Deferred original issue discount
Deferred transaction costs
Senior unsecured credit facilities
Lease liabilities
Total loans and borrowings
Notes
As of
31 Dec.
2021
1,000.0
(5.5)
994.5
550.0
(1.1)
(3.2)
545.7
182.4
As of
31 Dec.
2020
1,000.0
(7.8)
992.2
550.0
(1.4)
(4.1)
544.5
147.0
1,722.6
1,683.7
On 18 June 2020, SIG Combibloc PurchaseCo S.à r.l. issued €1,000 million aggregate
principal amount of senior unsecured notes. The notes are traded on the Global Exchange
Market of Euronext Dublin.
The below table provides a summary of the main terms of the senior unsecured notes.
Principal amount
Maturity date
Interest rate
2023 notes
2025 notes
€450 million
€550 million
18 June 2023
18 June 2025
1.875%
2.125%
Interest on the notes is paid semi-annually. The notes can be redeemed in whole or in part
prior to 18 March 2023 for the 2023 notes, and prior to 18 March 2025 for the 2025 notes,
at par plus a make-whole premium. The notes can be redeemed in whole or in part on or
after 18 March 2023 for the 2023 notes, and on or after 18 March 2025 for the 2025 notes,
at a price equal to 100% of their respective principal amounts.
Directly attributable transaction costs in the form of arrangement and advisory fees
relating to the issue of notes totalled €9.1 million and are being amortised over the
maturity of the respective notes issue, using the effective interest method.
The obligations under the notes are guaranteed on a senior subordinated basis by Group
subsidiaries. The indenture governing the notes contains customary restrictive covenants
and customary events of default. The Group was in compliance with all covenants and
there were no events of default as of 31 December 2021 and 31 December 2020.
Annual Report 2021
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Financials ► Consolidated financial statements
Consolidated financial statements
Financials
49
176
Senior unsecured credit facilities (term loan and revolving credit
facility)
Certain subsidiaries, including SIG Combibloc PurchaseCo S.à r.l., entered in June 2020 into
new senior unsecured credit facilities, consisting of one Euro-denominated term loan and
a multi-currency revolving credit facility.
The below table provides a summary of the main terms of the unsecured term loan and
the revolving credit facility.
Principal amount Maturity date
Interest rate
Term loan
Revolving credit facility
€550 million
€300 million
June 2025
June 2025
Euribor+1.00%, with a Euribor floor of 0.00%
Euribor+1.00%, with a Euribor floor of 0.00%
Interest on the term loan is paid semi-annually. The margin of 1.00% will be subject to
half-yearly adjustments based on the Group’s net leverage (as defined in the credit
agreement). The margin will also be subject to a maximum 0.05% per annum increase or
decrease based upon the achievement of certain annual sustainability-linked targets
(greenhouse gas emissions, or “GHG” emissions, and rankings per the EcoVadis Report).
No repayments of the term loan are due prior to maturity. The Group has the right to
repay the term loan in whole or in part without premium or penalty.
Directly attributable transaction costs in the form of arrangement and advisory fees for
the term loan amounted to €4.6 million and are, together with an original issue discount
of €1.5 million, being amortised over the term of the loan, using the effective interest
method.
The amount available under the multi-currency revolving credit facility is €294.2 million as
of 31 December 2021 (€299.4 million as of 31 December 2020) due to €5.8 million
(€0.6 million as of 31 December 2020) in letters of credit being outstanding under an
ancillary facility. The Group pays a fee for the undrawn revolver amount per year for the
right to use the revolving credit facility (35% of the margin percentage on an annualised
basis, applied to the undrawn balance of the revolving credit facility).
The obligations under the senior unsecured credit facilities are guaranteed by Group
subsidiaries. The credit agreement contains customary positive and negative covenants as
well as customary events of default. The Group was in compliance with all covenants and
there were no events of default as of 31 December 2021 and 31 December 2020.
Unsecured credit facility
In March 2021, the Group accessed an unsecured credit facility of €100.0 million. Cash
from the new credit facility was drawn in two tranches of €50.0 million each on 31 March
2021 (at an interest rate lower than the applicable interest rate on the revolving credit
facility). The two tranches were, as per the agreement, repaid in September and December
2021.
The amounts drawn in March 2021 were, together with available cash, used to repay
external loans of one of the former joint ventures in the Middle East in the total amount of
€139.5 million. The difference of €3.7 million between the carrying amount of the loans as
of the repayment date and the amount paid is presented as part of the net finance
expense (see note 23).
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
50
177
The amount available under the unsecured credit facility is €100.0 million as of
31 December 2021. The Group does not pay a fee for any undrawn amount for the right to
use the credit facility.
Lease liabilities
A maturity analysis of the Group’s lease liabilities is included below.
(In € million)
Less than 1 year
Between 1 and 5 years
More than 5 years
Contractual
undiscounted
cash flows
Interest
2021
37.9
105.4
133.3
276.6
2020
31.2
70.3
142.1
243.6
2021
2020
8.5
29.8
55.9
94.2
7.2
27.3
62.1
96.6
Lease liabilities
2021
2020
29.4
75.6
77.4
24.0
43.0
80.0
182.4
147.0
The Group’s lease liabilities mainly relate to leases of office buildings, production-related
buildings and equipment, warehouses and cars. The increase in lease liabilities since
31 December 2020 is impacted by the full consolidation of the former joint ventures in the
Middle East in 2021. The recognition of the twelve-year remaining lease of the sleeves
production plant of the former joint venture in Saudi Arabia resulted in a lease liability of
€23.4 million as of the acquisition date. See also notes 13 and 27.
Note 13 includes information about lease contracts to which the Group has committed but
where the lease has not yet commenced.
Changes in liabilities arising from financing activities
The following two tables present changes in liabilities arising from financing activities,
including changes arising from both cash flows and non-cash changes.
The main transactions in the year ended 31 December 2021 relate to the drawing and
subsequent repayment of two tranches under a new credit facility as well as the
repayment of external loans of one of the former joint ventures in the Middle East. The
main transactions in the year ended 31 December 2020 related to the issuance of senior
unsecured notes and the entering into of new senior unsecured credit facilities as well as
the repayment of the former secured term loans.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
51
178
Cash flows
from/(used in):
1 Jan.
2021
Financing
activities
Operating
activities
Effect of
business
combi-
nation2
Effect of
move-
ments in
exchange
rates
31 Dec.
2021
Non-cash
movements
1,550.0
(11.9)
(1.4)
(139.5)
-
-
1,536.7
(139.5)
147.0
1,683.7
(26.7)
(166.2)
-
-
-
-
-
-
139.5
-
-
139.5
26.7
166.2
(1.5)
5.9
-
-
-
(40.6)
-
2.7
-
3.2
0.3
3.5
21.7
25.2
0.3
38.8
- 1,550.0
-
(8.7)
-
(1.1)
- 1,540.2
13.7
182.4
13.7 1,722.6
-
0.1
(1.2)
6.9
1,688.1
(166.2)
(40.6)
168.9
64.3
13.8 1,728.3
(In € million)
Principal amount1
Transaction costs
Original issue discount
Loans and borrowings,
excl. lease liabilities
Lease liabilities
Total loans and borrowings
Capitalised cost for revolving
credit facility
Interest: Accrued/paid
Total (assets)/liabilities
from financing activities
and cash/non-cash changes
1
2
The financing cash outflow amount relating to the principal amount of loans and borrowings (excluding lease liabilities) shows the net effect of using the new
unsecured credit facility in March 2021 (two tranches of in total €100.0 million of cash inflow), repayment of external loans of one of the former joint ventures
(€139.5 million of cash outflow) and the subsequent repayments in September and December 2021 of the two tranches that had been drawn in March 2021 under
the new unsecured credit facility (in total €100.0 million of cash outflow). See also the section ”Unsecured credit facility” in this note and note 23.
The addition of €139.5 million to the principal amount of loans and borrowings (excluding lease liabilities) and the addition of €26.7 million to lease liabilities
presented in the column “Effect of business combination” result from the accounting for the acquisition of the remaining shares of the joint ventures in the Middle
East (see note 27). The line “Transaction costs” is also impacted by the acquisition of the remaining shares of the joint ventures, even if the net impact is zero. The
Group initially recognised transaction costs of €3.7 million relating to the external loans, but derecognised the same amount of transaction costs upon the early
repayment of the loans (€3.7 million, see also note 23) that took place shortly after the acquisition date.
Cash flows
from/(used in):
repay-
Net effect
of early
Fair value
changes
and other
non-cash
movements
ment
1 Jan.
2020
Financing
activities
Operating
activities
1,560.9
(10.5)
(11.2)
(10.9)
-
-
-
(13.0)
(1.5)
1,539.2
(10.9)
(14.5)
53.5
1,592.7
(16.1)
(27.0)
-
(14.5)
(0.8)
6.2
(0.8)
-
1,598.1
(27.8)
(0.9)
(38.4)
(53.8)
of loans
-
9.5
10.0
19.5
-
19.5
0.7
-
20.2
Effect of
move-
ments in
exchange
rates
31 Dec.
2020
- 1,550.0
-
(11.9)
-
(1.4)
- 1,536.7
(2.7)
147.0
(2.7) 1,683.7
-
-
(1.5)
5.9
(2.7) 1,688.1
-
2.1
1.3
3.4
112.3
115.7
0.3
38.1
154.1
2.6
-
(2.7)
(0.5)
0.6
-
-
1,600.7
(27.8)
(56.5)
19.7
154.7
(2.7)
1,688.1
(In € million)
Principal amount1
Transaction costs
Original issue discount
Loans and borrowings,
excl. lease liabilities
Lease liabilities
Total loans and borrowings
Capitalised cost for revolving
credit facility
Interest: Accrued/paid
Derivative (assets)/liabilities
from financing activities
Total (assets)/liabilities
from financing activities
and cash/non-cash changes
1
The financing cash outflow amount relating to the principal amount of loans and borrowings (excluding lease liabilities) shows the net effect of issuing notes
(€1,000.0 million of cash inflow), entering into a new unsecured term loan (€550 million of cash inflow) and repayment of debt (€1,560.9 million of cash outflow,
split between quarterly repayments of €7.8 million relating to the secured term loan A and €1,553.1 million relating to the final repayment of the secured term
loans A and B). See also the introductory section in this note and note 23.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
52
179
Accounting policy
Loans and borrowings (the notes and the term loans) are initially recognised at fair value less any
directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured
at amortised cost using the effective interest method. Loans and other borrowings are classified as
current or non-current liabilities depending on whether the Group has an unconditional right to defer
settlement for at least twelve months after the reporting period.
The accounting for a change to the cash flows of a financial liability measured at amortised cost (such
as the Group’s notes and term loan) depends on the nature of change. When a floating rate debt
instrument is modified to change its interest rate, the modification is regarded as a repricing to the
new market interest rate, which is accounted for prospectively by adjusting the effective interest over
the remaining life of the debt instrument. A floating rate instrument is one whose original contractual
terms contain a provision such that the cash flows will (or might) be reset to reflect movements in
market rates of interest. If a change in cash flows arises due to renegotiation or other modifications
(including modifications that do not reflect movements in market rates of interest), and the
renegotiation or modification does not result in the derecognition of the financial liability, the gross
carrying amount is recalculated and any gain or loss recognised in profit or loss as part of the net
finance expense. If a renegotiation or modification represents a settlement of the original debt, it is
accounted for as being extinguished.
A financial liability (or a part of it) is derecognised when it is extinguished, i.e. when the contractual
obligations are discharged, cancelled, expired or replaced by a new liability with substantially
modified terms. The difference between the carrying amount of the financial liability (or part of a
financial liability) extinguished and the consideration paid is recognised in profit or loss as part of the
net finance expense. Any costs or fees incurred are recognised as part of the gain or loss on
extinguishment.
Lease liabilities
The Group’s lease liabilities are initially measured at the present value of the lease payments
outstanding as of the commencement date of a lease, discounted at the interest rate implicit in the
lease or, if that rate cannot be determined (which is normally the case), at the incremental borrowing
rate. Lease payments included in the measurement of the lease liabilities include fixed lease
payments and variable lease payments that depend on an index. Other variable lease payments are
recognised in profit or loss. The Group does not separate non-lease components from lease
components in its lease contracts. Extension, termination and purchase options that, at the
commencement date of the lease, are reasonably certain to be exercised are considered when
assessing the lease term and/or measuring the lease liability.
Subsequent to initial recognition, the lease liabilities are measured by increasing the carrying amount
to reflect interest on the lease liability (applying the effective interest method); reducing the carrying
amount to reflect lease payments made; and remeasuring the carrying amount to reflect any
contract modifications or reassessments relating to, for example, changed future lease payments
linked to changes in an index and changes in the assessment of whether an extension, termination or
purchase option will be exercised.
When a lease liability is remeasured, the corresponding adjustment is generally made to the carrying
amount of the related right-of-use asset (see note 13).
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
53
180
23
Finance income and expenses
The Group’s net finance expense is mainly related to finance expenses for the Group’s
loans and borrowings and foreign exchange gains and losses relating to the loans and
borrowings.
Composition of net finance expenses
(In € million)
Interest income
Net foreign currency exchange gain
Net change in fair value of financing-related derivatives
Finance income
Interest expense on:
- Senior unsecured notes
- Senior unsecured/secured credit facilities
- Lease liabilities
Amortisation of original issue discount
Amortisation of transaction costs
Net foreign currency exchange loss
Net interest expense on interest rate swaps
Net effect of early repayment of loans
Other
Finance expenses
Net finance expense
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
4.6
11.4
-
16.0
(20.1)
(5.3)
(9.1)
(0.3)
(3.6)
-
-
(3.7)
(5.3)
(47.4)
(31.4)
2.1
-
0.5
2.6
(10.7)
(18.2)
(2.9)
(1.3)
(3.1)
(19.6)
(0.6)
(19.7)
(7.5)
(83.6)
(81.0)
In the year ended 31 December 2021, the Group used available cash and proceeds from a
new credit facility to repay external loans of one of the former joint ventures in the Middle
East. The net expense effect of the early repayment of these loans was €3.7 million. In the
year ended 31 December 2020, the Group used proceeds from its new term loan and
issue of notes in June 2020 as well as available cash to repay its existing secured term
loans. The net expense effect of the early repayment of the existing secured term loans
was €19.7 million, of which €2.1 million related to cash settlement of interest rate swaps.
See also note 22.
In the year ended 31 December 2021, the net foreign currency exchange gain primarily
consists of positive translation effects on Euro-denominated debt held by a US Dollar
functional currency entity resulting from the strengthening of the US Dollar against the
Euro. In the year ended 31 December 2020, the net foreign currency exchange loss
primarily consisted of negative translation effects on Euro-denominated debt held by a
US Dollar functional currency entity and on intra-group loan payables, primarily resulting
from the weakening of the Brazilian Real against the Euro.
For the year ended 31 December 2021, interest income include interest of €3.1 million on
out-of-period indirect tax recoveries (see note 8).
Other finance expenses primarily consist of revolver commitment fees, securitisation and
factoring expenses and interest expense on current tax liabilities.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
54
181
24
Equity
This note includes information about the Company’s share capital and dividend payments.
The other components of equity consist of additional paid-in capital, the translation
reserve, treasury shares and retained earnings. The Company’s shares are listed on
SIX Swiss Exchange.
Issued share capital
The Company has 337,520,872 ordinary shares in issue as of 31 December 2021
(320,053,240 as of 31 December 2020 and 1 January 2020), all fully paid. The below table
provides an overview of the shares in issue.
Number of shares
Balance as of 1 January 2020
Balance as of 1 January 2021
Issue of shares on 22 February 2021
Balance as of 31 December 2021
Total shares
320,053,240
320,053,240
17,467,632
337,520,872
On 22 February 2021, the Company issued 17,467,632 ordinary shares with a nominal
value of CHF 0.01 per share out of authorised share capital under exclusion of the
subscription rights of the existing shareholders. The shares were, together with a payment
of cash, part of the consideration transferred to OIG upon the acquisition of the remaining
shares of the joint ventures in the Middle East on 25 February 2021 (see note 27). The
difference between the nominal value of the issued shares and the fair value of the shares
at the acquisition date is presented as additional paid-in capital.
The nominal value of each issued share is CHF 0.01. Each share is entitled to one vote at
shareholders’ meetings. The shareholders are entitled to dividends as declared from time
to time. Regarding the shares issued and transferred to OIG in 2021, OIG has agreed to a
lock-up period for these shares of 24 months, subject to customary exceptions.
The 337,520,872 shares in issue represent €3.0 million of share capital (€2.8 million as of
31 December 2020).
Authorised share capital and conditional share capital
The Company has authorised share capital of CHF 675,041.74 as of 31 December 2021
(CHF 640,106.48 as of 31 December 2020) and conditional share capital of CHF 640,106.48
(CHF 640,106.48 as of 31 December 2020).
The Board of Directors’ authority to increase the share capital out of authorised share
capital is as of 31 December 2021 limited until 21 April 2023. Capital increases from
authorised and conditional share capital are mutually exclusive, i.e. they are subject to a
single combined limit, and may not exceed 67,504,174 shares, equalling CHF 675,041.74 or
20% of the existing share capital (of which only 64,010,648 shares can be created out of
conditional share capital). However, the number of shares issued from authorised and
conditional share capital under the exclusion of subscription and advance subscription
rights, respectively, is limited until 21 April 2023 to a single combined maximum of
33,752,087 shares, equalling CHF 337,520.87 or 10% of existing share capital.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
55
182
The authorised share capital can be used for various purposes. This creates a flexibility to
seek additional capital, if required, for investment and acquisition opportunities or to take
advantage of favourable market conditions to further improve the Group’s capital
position. The conditional share capital is divided into CHF 160,026.62 for employee benefit
plans and CHF 480,079.86 for equity-linked financing instruments as of 31 December 2021
(also as of 31 December 2020).
See note 4 for information about shares to be issued out of the Company’s authorised
share capital and used in connection with the acquisition of Scholle IPN, which is expected
to close in the second or third quarter of 2022.
Treasury shares
The Company purchases its own shares on the market to settle its obligations under its
share-based payment plans and arrangements (see note 31). The Company held
2,430 shares for this purpose as of 31 December 2021 (6,274 shares as of 31 December
2020), representing an amount of €0.1 million (€0.1 million as of 31 December 2020). All
treasury shares are carried at acquisition cost.
(Number of treasury shares or in € million)
Number
Amount
Number
Amount
2021
2020
Balance as of 1 January
Purchases
Transfer under share-based payment plans
and arrangements
Balance as of 31 December
6,274
26,739
(30,583)
2,430
(0.1)
(0.7)
0.7
(0.1)
6,158
40,000
(39,884)
6,274
(0.1)
(0.6)
0.6
(0.1)
Dividends
For the year ended 31 December 2021, the Board of Directors will propose to the Annual
General Meeting to be held on 7 April 2022 a dividend payment of CHF 0.45 per share,
totalling CHF 151.9 million (which, as per the exchange rate as of 31 December 2021,
would equal €147.0 million). The dividend payment to be proposed is not recognised as a
liability.
A dividend of CHF 0.42 per share, totalling CHF 141.8 million (€128.1 million) was paid to
shareholders out of the capital contribution reserve (additional paid-in capital) in April
2021. The dividend payment was not recognised as a liability as of 31 December 2020.
A dividend of CHF 0.38 per share, totalling CHF 121.6 million (€114.8 million) was paid to
shareholders out of the capital contribution reserve (additional paid-in capital) in April
2020. The dividend payment was not recognised as a liability as of 31 December 2019.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
56
183
Accounting policy
Incremental costs directly attributable to the issue of shares and purchase of treasury shares are
recognised as a deduction from equity. Any resulting tax effects of any transaction costs that are
recognised in equity are also reflected in equity.
Treasury shares
The cost of repurchased shares is presented as a deduction from equity, in the separate category
treasury shares. When treasury shares are subsequently transferred to settle the Group’s obligations
under its share-based payment plans and arrangements (or sold, if applicable), the related amount
recognised as a share-based payment expense (or any amount received under a sale) is recognised
as an increase in equity. Any resulting surplus or deficit is presented as an adjustment to additional
paid-in capital. The Group applies the average cost method to calculate the surplus or deficit on the
transfer or sale of treasury shares.
25
Financial risk management
In the course of its business, the Group is exposed to a number of financial risks: liquidity
risk, market risk (including currency risk, commodity risk and interest rate risk) and credit
risk. This note presents the Group’s objectives, policies and processes for managing its
exposure to these financial risks. Note 33 includes an overview of the derivative financial
instruments that the Group has entered into to mitigate its market risk exposure.
Exposure to liquidity, market and credit risks arises in the normal course of the Group’s
business. Management and the Board of Directors have the overall responsibility for the
establishment and oversight of the Group’s financial risk management framework.
Management has established a treasury policy that identifies risks faced by the Group and
sets out policies and procedures to mitigate those risks. Financial risk management is
primarily carried out by the Treasury function of the Group. Management has delegated
authority levels and authorised the use of various financial instruments to a restricted
number of personnel within the Treasury function.
Liquidity risk
Liquidity risk is the risk that the Group will not meet contractual obligations as they fall
due. The Group evaluates its liquidity requirements on an ongoing basis using various
cash and financial planning analyses and ensures that it has sufficient cash to meet
expected operating expenses, repayments of and interest payments on its debt and lease
payments.
The Group generates sufficient cash flows from its operating activities to meet obligations
arising from its financial liabilities. It has a multi-currency revolving credit facility in place to
cover potential shortfalls and access to local working capital facilities in various
jurisdictions, which are available if needed to support the cash management of local
operations. The Group had unrestricted cash and cash equivalents in the amount of
€300.2 million as of 31 December 2021 (€353.3 million as of 31 December 2020).
Furthermore, as of 31 December 2021, it had access to an additional €294.2 million under
its committed multi-currency revolving credit facility (€299.4 million as of 31 December
2020) and a possibility to draw an additional €100.0 million under its uncommitted new
credit facility.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
57
184
The following table includes information about the remaining contractual maturities for
the Group’s non-derivative financial liabilities as of 31 December 2021. The table includes
both interest and principal cash flows. Balances due within one year equal their carrying
amounts as the impact of discounting is not significant.
(In € million)
As of 31 December 2021
Trade and other payables
Loans and borrowings:
- Senior unsecured notes
- Senior unsecured credit facilities
- Lease liabilities
Total non-derivative
financial liabilities
Carrying
amount
Total
Up to
1 year 1-2 years 2-5 years
More than
5 years
Contractual cash flows
(665.7)
(665.7)
(656.2)
(2.5)
(4.5)
(2.5)
(994.5)
(545.7)
(182.4)
(1,052.9)
(573.0)
(276.6)
(20.2)
(6.5)
(37.9)
(465.6)
(6.7)
(33.3)
(567.1)
(559.8)
(72.1)
-
-
(133.3)
(2,388.3)
(2,568.2)
(720.8)
(508.1)
(1,203.5)
(135.8)
The agreements with the Group’s notes holders and the lenders under the senior
loan contain covenants and certain clauses that may require earlier
unsecured
repayments than indicated in the table above. The Group monitors the covenants as well
as the aforementioned clauses on a regular basis to ensure that it is in compliance with
the agreements at all times.
The interest payments on the senior unsecured credit facilities are variable. The interest
rate amounts included in the above table that relate to those facilities will therefore
change if the market interest rate (Euribor) changes. The interest rate amounts are also
subject to change depending on the Group’s net leverage and the achievement of
sustainability-linked targets.
The Group enters into derivative contracts as part of operating the business and may,
from time to time, also enter into financing-related derivatives. Commodity derivative
contracts are net cash settled. Foreign currency exchange derivative contracts are net or
gross cash settled. The derivative asset or liability recognised as of 31 December 2021 and
31 December 2020 represents the liquidity exposure to the Group as of that date (see
note 33). The cash flows resulting from a settlement of the derivative contracts may
change as commodity prices and exchange rates change. However, the overall impact on
the Group’s liquidity from the derivative contracts is not deemed to be significant.
The following table includes information about the remaining contractual maturities for
the Group’s non-derivative financial liabilities as of 31 December 2020.
(In € million)
As of 31 December 2020
Trade and other payables
Loans and borrowings:
- Senior unsecured notes
- Senior unsecured credit facilities
- Lease liabilities
Total non-derivative
financial liabilities
Carrying
amount
Total
Up to
1 year 1-2 years 2-5 years
More than
5 years
Contractual cash flows
(505.4)
(505.4)
(493.1)
(4.0)
(7.5)
(0.8)
(992.2)
(544.5)
(147.0)
(1,073.0)
(579.7)
(243.6)
(20.1)
(6.7)
(31.2)
(20.1)
(6.7)
(20.8)
(1,032.8)
(566.3)
(49.5)
-
-
(142.1)
(2,189.1)
(2,401.7)
(551.1)
(51.6)
(1,656.1)
(142.9)
Annual Report 2021
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58
185
Market risks
Market risk is the risk that changes in market prices, such as foreign currency exchange
rates, commodity prices and interest rates, will affect the cash flows or the fair value of the
Group’s holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters.
The Group buys and sells derivatives in the ordinary course of business to manage market
risks. The Group does not enter into derivative contracts for speculative purposes. Hedge
accounting under IFRS 9 is not applied.
Currency risk
As a result of the Group’s international operations, foreign currency exchange risk
exposures exist on sales, purchases, borrowings and dividend payments that are
denominated in currencies that are not the functional currency of the entity involved in
the transaction. The Group is also exposed to translation currency risk arising from the
translation of the assets, liabilities and results of its foreign entities into Euro, the Group’s
presentation currency, from their respective functional currencies. The functional
currencies of the subsidiaries are mainly Euro, US Dollar, Swiss Franc, Chinese Renminbi,
Thai Baht, Brazilian Real and Mexican Peso.
In accordance with the Group’s Treasury policy, the Group seeks to minimise transaction
currency risk via natural offsets to the extent possible. Therefore, when commercially
feasible, the Group incurs costs in the same currencies in which cash flows are generated.
In addition, the Group systematically hedges its major transactional currency exposures
(by entering into foreign currency exchange derivative contracts), using a twelve-month
rolling layered approach. See also note 8. The Group does not hedge its exposure to
translation gains or losses related to the financial results of its non-Euro functional
currency entities.
The following table provides an overview of the outstanding foreign currency exchange
derivative contracts entered
the operating business as of
31 December 2021.
into as part of
Type
Non-deliverable
forwards
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Contract
type
Curr-
ency
Contracted
volume
Counter-
currency
Contracted
conversion range
Contracted
date of maturity
Buy
Buy
Sell
Sell
Buy
Buy
Buy
Buy
Buy
Buy
€
€
€
$
€
$
€
$
€
$
15,055,000
51,015,000
9,315,000
1,610,000
26,880,000
12,865,000
28,610,000
20,280,000
5,638,368
103,787
BRL
THB
THB
THB
CNY
CNY
$
MXN
AUD
AUD
6.3595 - 7.1603
36.7497 - 39.5041
36.9116 - 38.0044
30.0091 - 31.1080
7.2701 - 8.1547
6.4166 - 6.7201
1.1327 - 1.2342
20.4200 - 22.0138
1.5532 - 1.6039
1.3256 - 1.3508
Jan. 2022 - Oct. 2022
Jan. 2022 - Oct. 2022
Jan. 2022 - Mar. 2022
Jan. 2022 - Mar. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Oct. 2022
Jan. 2022 - Oct. 2022
Jan. 2022 - Jun. 2022
Jan. 2022 - Jun. 2022
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186
The following table provides an overview of the outstanding foreign currency exchange
derivative contracts as of 31 December 2020.
Type
Non-deliverable
forwards
Non-deliverable
forwards
Currency forwards
Currency swap
Currency forwards
Currency forwards
Currency forwards
Currency swap
Currency swap
Currency swap
Currency swap
Currency forwards
Currency forwards
Currency forwards
Currency forwards
Currency swap
Currency forwards
Currency forwards
Currency swap
Currency swap
Contract
type
Curr-
ency
Contracted
volume
Counter-
currency
Contracted
conversion range
Contracted
date of maturity
Buy
€
20,145,000
BRL
4.9116 - 6.9580
Jan. 2021 - Dec. 2021
Sell
Buy
Sell
Sell
Buy
Buy
Sell
Sell
Buy
Buy
Sell
Sell
Buy
Buy
Buy
Buy
Buy
Sell
Sell
€
€
€
$
€
$
€
$
€
$
€
$
€
€
€
$
$
€
$
820,000
32,054,177
320,000
17,865,000
27,850,000
23,105,000
3,100,000
3,500,000
845,000
1,220,000
13,935,000
22,215,000
3,179,500
37,948,000
50,000,000
1,144,226
33,300,000
16,000,000
5,390,000
BRL
THB
THB
THB
CNY
CNY
CNY
CNY
NZD
NZD
NZD
NZD
AUD
$
$
AUD
MXN
$
MXN
6.6684
34.6594 - 37.6264
35.9631
29.7565 - 32.4070
7.7613 - 8.4257
6.5749 - 7.1830
7.8471 - 8.0323
6.5452 - 6.6122
1.7338 - 1.7852
0.6560 - 0.6683
1.7155 - 1.8562
0.5871 - 0.7129
1.6122 - 1.6859
1.0873 - 1.2321
1.2199
0.7566 - 0.7569
19.6999 - 25.6022
1.2279
Jan. 2021
Jan. 2021 - Dec. 2021
Apr. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Apr. 2021
Jan. 2021
Jan. 2021 - Oct. 2021
Jan. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Jun. 2021
Jan. 2021 - Dec. 2021
Jan. 2021
Jan. 2021 - May 2021
Jan. 2021 - Dec. 2021
Jan. 2021
21.2402 - 23.1884 Feb. 2021 - May 2021
The Group’s primary transaction currency exposure as of 31 December 2021 relates to
intra-group Euro-denominated loan receivables of Swiss functional currency entities and
to intra-group US Dollar denominated loan payables of Euro functional currency entities.
A 5% weakening of the Euro against the Swiss Franc as of 31 December 2021 would have
resulted in an additional unrealised foreign currency exchange loss of €5.6 million as of
31 December 2021. A 5% weakening of the Euro against the US Dollar as of 31 December
2021 would have resulted in an additional unrealised foreign currency exchange loss of
€3.2 million as of 31 December 2021.
The Group’s primary transaction currency exposure as of 31 December 2020 related to an
intra-group Euro-denominated loan held by a Swiss functional currency entity. A 5%
weakening of the Euro against the Swiss Franc as of 31 December 2020 would have
resulted in an additional unrealised foreign currency exchange loss of €14.1 million as of
31 December 2020.
Commodity price risk
Commodity price risk is the risk that changes in the price of commodities purchased by
the Group and used as inputs in the production process may impact the Group, as such
price changes cannot always be passed on to the customers.
The Group’s exposure to commodity price risk arises principally from the purchase of
polymers and aluminium. The Group’s objective is to ensure that the commodity price risk
exposure in the current year is kept at an acceptable level. The Group generally purchases
commodities at spot market prices and uses derivatives to hedge the exposure in relation
to the cost of polymers (and their feedstocks) and aluminium. Due to this strategy, the
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60
187
Group is able to fix the raw material prices for the majority of the anticipated polymers
and aluminium purchases, which substantially reduces the exposure to raw material price
fluctuations over that period.
The realised gain or loss arising from derivative commodity contracts is recognised in cost
of sales, while the unrealised gain or loss associated with derivative commodity contracts
is recognised in other income or expenses.
The Group recognised an unrealised gain of €12.7 million in the year ended 31 December
2021 and an unrealised gain of €18.8 million in the year ended 31 December 2020 relating
to its derivative commodity contracts as a component of other income. The Group
recognised a realised gain of €63.2 million in the year ended 31 December 2021 and a
realised loss of €18.7 million in the year ended 31 December 2020 relating to its derivative
commodity contracts as a component of cost of sales.
The following table provides an overview of the outstanding commodity derivative
contracts as of 31 December 2021.
Type
Unit of
measure
Contracted
volume
Contracted
price range
Contracted
date of maturity
metric tonne
Aluminium swaps
Aluminium premium swaps metric tonne
Polymer swaps
metric tonne
metric tonne
Polymer swaps
Polymer swaps
metric tonne
Polymer swaps
metric tonne
Monomer swaps
metric tonne
23,060
6,630
16,620
9,780
6,000
21,820
39,410
$2,063.00 - $3,055.00
$174.00 - $353.00
€1,507.00 - €1,930.00
€1,230.00 - €1,477.00
$1,265.00
$1,265.00 - $1,620.00
€911.00 - €1,239.00
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
Jan. 2022 - Dec. 2022
The following table provides an overview of the outstanding commodity derivative
contracts as of 31 December 2020.
Type
Unit of
measure
Contracted
volume
Contracted
price range
Contracted
date of maturity
metric tonne
Aluminium swaps
Aluminium premium swaps metric tonne
metric tonne
Polymer swaps
metric tonne
Polymer swaps
metric tonne
Polymer swaps
metric tonne
Monomer swaps
22,800
8,340
36,480
8,280
28,860
24,540
$1,564.00 - $1,893.00
$129.00 - $166.50
€1,218.00 - €1,294.00
€1,199.00 - €1,254.00
$915.00 - $1,020.00
€863.00 - €905.00
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
Jan. 2021 - Dec. 2021
There would have been an impact of €19.7 million on the Group’s profit from a
remeasurement of commodity derivative contracts as of 31 December 2021 (an impact of
€14.3 million on the profit as of 31 December 2020), assuming a 10% parallel upward or
downward movement in the price curve used to value the commodity derivative contracts
and assuming all other variables remain constant.
Annual Report 2021
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Consolidated financial statements
Financials
61
188
Interest rate risk
The Group’s interest rate risk primarily arises from its term loan and drawings of the
revolving credit facility at variable interest rates but also from its cash and cash
equivalents. The Group pays a fixed interest rate on its notes. In the year ended
31 December 2021, it also paid a fixed interest on the amounts drawn, and subsequently
repaid, under a new credit facility (see note 22).
The interest rate profile of the Group’s significant interest-bearing financial instruments as
of 31 December 2021 and 31 December 2020 is presented in the following table.
(In € million)
Fixed rate instruments
Financial assets
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
As of
31 Dec.
2021
As of
31 Dec.
2020
2.7
(1,182.4)
(1,179.7)
3.9
(1,147.0)
(1,143.1)
304.5
(550.0)
(245.5)
355.1
(550.0)
(194.9)
A 100 basis point increase in the variable component (six-month Euribor) of the interest
rate on the term loan would increase the annual interest expense by €2.5 million as of
31 December 2021. A 100 basis point increase in the variable component (six-month
Euribor) of the interest rate on the term loan would have increased the annual interest
expense by €2.6 million as of 31 December 2020.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations. This risk arises principally
from the Group’s receivables from its customers. The carrying amount of financial assets
represents the maximum credit exposure. Historically, there has been a low level of losses
resulting from default by customers. As the Group’s customers are in the food and
beverage industry, management has not experienced any material changes to the Group’s
exposure to credit risk due to the COVID-19 pandemic.
The credit risk relating to trade receivables is influenced mainly by the individual
characteristics of each customer. Given the diverse global operations and customers
across the Group, credit control procedures are jointly managed by the Group’s Treasury
function and each of the operating businesses within the Group. These
joint
responsibilities include, but are not limited to, reviewing the individual characteristics of
new customers for creditworthiness before accepting the customer and agreeing upon
purchase limits and terms of trade as well as regularly reviewing the creditworthiness of
existing customers and previously agreed purchase limits and terms of trade.
The Group limits its exposure to credit risk by executing a credit limit policy, requiring
advance payments in certain instances, taking out insurance for specific debtors as well as
utilising securitisation and non-recourse factoring programmes. These programmes are
described in note 16.
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Financials
62
189
In addition, concentration of credit risk is limited due to the customers comprising a
diversified mix of international companies, large national and regional companies as well
as small local companies, of which most have been customers of the Group for many
years.
Management believes that the recognised loss allowance sufficiently covers the risk of
default based on historical payment behaviour and assessments of future expectations of
credit losses, including regular analysis of customer credit risk.
In line with its Treasury policy, the Group generally enters into transactions only with
banks and financial institutions having a credit rating of at least investment grade (long
term: BBB rating or higher and short term: A2 or P2 rating or higher as per Standard &
Poor’s or Moody’s).
Annual Report 2021
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63
190
OUR GROUP STRUCTURE AND
RELATED PARTIES
This section provides details about the Group’s subsidiaries and joint ventures, including
the acquisition of the remaining shares of the joint ventures in the Middle East and the
sale of the paper mill in New Zealand. It also covers other related parties.
26 Group entities
The Group only has wholly owned subsidiaries. It has one joint venture, with an ownership
interest of 50% (see note 28).
The Company acquired the remaining 50% of the shares of its two joint ventures in Saudi
Arabia and the United Arab Emirates (”UAE”) on 25 February 2021 (see note 27). The entity
in UAE has four subsidiaries. Information about the disposal of the paper mill in June 2021
is included in the section “Sale of New Zealand paper mill” in this note.
Overview of Group entities
The following table provides an overview of all the Group’s subsidiaries and joint venture.
The joint venture does not have any subsidiaries. The ownership and voting interests are
the same for all Group entities. The ownership interests are the same as of 31 December
2021 and 31 December 2020, unless specifically stated. The reporting date of all Group
entities is 31 December.
Companies and countries
Parent company
Switzerland
SIG Combibloc Group AG, Neuhausen am Rheinfall1
Subsidiaries
Argentina
Combibloc S.R.L., Buenos Aires
Australia
SIG Australia Holding Pty Ltd., Canberra2
SIG Combibloc Australia Pty Ltd., Broadmeadows
Austria
SIG Austria Holding GmbH, Saalfelden
SIG Combibloc GmbH, Saalfelden
SIG Combibloc GmbH & Co. KG, Saalfelden
Bangladesh
SIG Combibloc Bangladesh Ltd., Dhaka
Brazil
SIG Beverages Brasil Ltda., Sao Paulo
SIG Combibloc do Brasil Ltda., Sao Paulo
Chile
SIG Combibloc Chile SpA, Santiago
China
SIG Combibloc (Suzhou) Co. Ltd., Suzhou
Annual Report 2021
As of 31 December 2021
Share capital8 Interest
3,375,209 CHF
100%
724,015,120 ARS
100%
32,100,000 AUD
40,000,001 AUD
100%
100%
1,000,000 EUR
35,000 EUR
4,500,000 EUR
100%
100%
100%
50,000,000 BDT
100%
109,327,434 BRL
722,386,462 BRL
100%
100%
5,016,722,134 CLP
100%
95,000,000 USD
100%
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
64
191
Companies and countries
Czech Republic
SIG Combibloc s.r.o., Hradec Králové
Egypt
SIG Combibloc Obeikan Egypt LLC, Cairo3
France
SIG Combibloc S.à.r.l., Courbevoie
Germany
SIG Combibloc GmbH, Linnich
SIG Combibloc Systems GmbH, Linnich
SIG Combibloc Zerspanungstechnik GmbH, Aachen
SIG Euro Holding GmbH, Linnich
SIG Information Technology GmbH, Linnich
SIG International Services GmbH, Linnich
India
SIG Combibloc India Private Ltd., Gurgaon, Haryana
Indonesia
P.T. SIG Combibloc Indonesia, Jakarta Selatan
Italy
SIG Combibloc S.r.l., Parma
Korea
SIG Combibloc Korea Ltd., Seoul
Luxembourg
SIG Combibloc Holdings S.à r.l., Munsbach
SIG Combibloc PurchaseCo S.à r.l., Munsbach
Malaysia
SIG Combibloc Malaysia SDN. BHD, Kuala Lumpur
Mexico
SIG Combibloc Manufacturing México, S. de R.L. de C.V., Mexico City4
SIG Combibloc México, S.A. de C.V., Mexico City
Netherlands
SIG Combibloc B.V., Hengelo
New Zealand
SIG Combibloc New Zealand Ltd., Auckland4
Whakatane Mill Ltd., Whakatane5
Nigeria
SIG Combibloc Obeikan Nigeria Ltd., Lagos3
Poland
SIG Combibloc Sp. z o.o., Warsaw
Romania
SIG Combibloc Services S.R.L., Cluj
Russia
OOO SIG Combibloc, Moscow
Saudi Arabia
Al Obeikan SIG Combibloc Company Ltd., Riyadh6
South Africa
SIG Combibloc Obeikan (South Africa) Pty. Ltd., Cape Town3
Spain
SIG Combibloc S.A., Madrid
Annual Report 2021
As of 31 December 2021
Share capital8 Interest
19,340,000 CZK
100%
10,000 EGP
100%
31,000 EUR
100%
34,494,382 EUR
1,000,000 EUR
256,000 EUR
10,000,000 EUR
500,000 EUR
1,000,000 EUR
100%
100%
100%
100%
100%
100%
34,000,000 INR
100%
13,549,682,000 IDR
100%
101,400 EUR
100%
260,000,000 KRW
100%
2,000,001 EUR
4,012,500 EUR
100%
100%
1,000,000 MYR
100%
10,000 MXN
1,000,000 MXN
100%
100%
40,000 EUR
100%
10,000 NZD
-
100%
-
10,000,000 NGN
100%
249,934 PLN
100%
1,000,000 RON
100%
5,000,000 RUB
100%
75,000,000 SAR
100%
1,000 ZAR
100%
330,550 EUR
100%
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
65
192
Companies and countries
Sweden
SIG Combibloc AB, Eslöv
Switzerland
SIG allCap AG, Neuhausen am Rheinfall
SIG Combibloc Services AG, Neuhausen am Rheinfall
SIG Combibloc Procurement AG, Neuhausen am Rheinfall
SIG Combibloc Receivables Management AG, Neuhausen am Rheinfall
SIG Schweizerische Industrie-Gesellschaft GmbH, Neuhausen am Rheinfall
SIG Technology AG, Neuhausen am Rheinfall
Taiwan
SIG Combibloc Taiwan Ltd., Taipei
Thailand
SIG Combibloc Ltd., Rayong
Turkey
SIG Combibloc Paketleme ve Ticaret Ltd. Sirketi, Istanbul3
United Kingdom
SIG Combibloc Ltd., Gateshead
USA
SIG Combibloc US Acquisition Inc., Wilmington
SIG Combibloc US Acquisition II Inc., Wilmington
SIG Combibloc Inc., Wilmington
SIG Holding USA, LLC, Wilmington
Vietnam
SIG Vietnam Ltd., Ho Chi Minh City
UAE
SIG Combibloc FZCO, Dubai7
Joint venture
Japan
DNP • SIG Combibloc Co., Ltd., Tokyo
As of 31 December 2021
Share capital8 Interest
100,000 SEK
100%
7,000,000 CHF
37,931,400 CHF
2,000,000 CHF
1,000,000 CHF
20,000 CHF
3,000,000 CHF
100%
100%
100%
100%
100%
100%
15,000,000 TWD
100%
3,070,693,000 THB
100%
170,000 TRY
100%
1,500,000 GBP
100%
10 USD
10 USD
27,000,000 USD
1,000 USD
100%
100%
100%
100%
2,000,000,000 VND
100%
24,000,000 AED
100%
75,000,000
JPY
50%
1
2
3
The registered address of SIG Combibloc Group AG is Laufengasse 18, 8212 Neuhausen am Rheinfall, Switzerland.
The Group acquired 100% of the shares of Visy Cartons Pty Ltd. (“Visy Cartons”) on 29 November 2019 for €43.0 million, of which €2.5 million was transferred in
the year ended 31 December 2020. Visy Cartons was renamed to SIG Combibloc Australia Pty Ltd. in December 2019.
Subsidiary of the former joint venture SIG Combibloc FZCO in UAE (see further note 27).
4 New entity, incorporated in the second quarter of 2021.
5
6
7
8
Sold on 3 June 2021, see the section “Sale of New Zealand paper mill” in this note.
Former joint venture, the Company acquired the remaining 50% of the shares on 25 February 2021 (see note 27). Previously SIG Combibloc Obeikan Company
Ltd., renamed to Al Obeikan SIG Combibloc Company Ltd. in the third quarter of 2020.
Former joint venture, the Company acquired the remaining 50% of the shares on 25 February 2021 (see note 27). Previously SIG Combibloc Obeikan FZCO,
renamed to SIG Combibloc FZCO in the fourth quarter of 2021.
Unaudited.
Annual Report 2021
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193
Sale of New Zealand paper mill
The Group announced in March 2021 that it would close the paper mill in New Zealand
(Whakatane Mill Ltd.) and increase the sourcing of liquid paper board from existing third-
party suppliers. The mill primarily produced liquid paper board for use by SIG entities and
the Group’s former joint ventures in the Middle East. After the closure announcement, the
Group was approached by potential buyers.
The paper mill was sold on 3 June 2021 for NZD 1 to a consortium of investors who will
enable the paper mill to continue to operate. The net assets sold consisted mainly of net
working capital, including cash equivalents of €0.5 million, and provisions. In August 2021,
the parties of the transaction finalised the net working capital and other adjustments of
the completion settlement. In total, €3.6 million of adjustments in favour of the Group
were agreed upon. Including the net working capital adjustments, the sale resulted in a
loss of €12.1 million that is presented in other expenses (see notes 8 and 9) and in a net
cash inflow of €3.1 million.
The Group has no ongoing obligations or outstanding guarantees relating to the mill
following the completion of the sale except for customary representations and warranties
(including tax indemnifications).
In connection with the initial decision to close the mill, the Group expected to incur plant
decommissioning and redundancy costs of around €30 million. However, due to the sale,
only €9.8 million of redundancy costs were recognised in the year ended 31 December
2021 (see note 9).
Accounting policy/basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are consolidated from their respective
acquisition date, which is the date on which the Group obtains control.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the
subsidiary, and any related non-controlling interests and other components of equity. Any resulting
gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured
at fair value when control is lost.
Interests in joint ventures
A joint venture is a contractual arrangement in which the Group has joint control and has rights to
the net assets of the arrangement rather than rights to its assets and obligations for its liabilities.
Investments in joint ventures are accounted for using the equity method. On the date joint control is
obtained, joint ventures are recognised at cost (including transaction costs). Subsequent to initial
recognition, the Group’s share of the profit or loss and other comprehensive income is included in
the consolidated financial statements until the date on which joint control ceases.
Intra-group transactions and balances
Intra-group transactions and balances are eliminated upon consolidation. Unrealised gains arising
from transactions with joint ventures are eliminated to the extent of the Group’s interest in the
investee. Unrealised losses are eliminated in the same manner as unrealised gains, but only to the
extent that there is no evidence of impairment.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
67
194
27
Business combination
Overview
On 25 February 2021, the Company acquired the remaining 50% of the shares of its two
joint ventures in the Middle East (Al Obeikan SIG Combibloc Company Ltd. in Saudi Arabia
and SIG Combibloc FZCO in UAE) from its joint venture partner OIG. The joint ventures
have thereby become fully owned subsidiaries of SIG. SIG and OIG commenced their
partnership in 2001.
The former joint ventures provide aseptic carton packaging solutions in their respective
geographic markets. Al Obeikan SIG Combibloc Company Ltd. operates a sleeves
production plant in Saudi Arabia from which it supplies sleeves to its customers and to SIG
Combibloc FZCO. Both of the entities deploy filling lines in the Middle East and Africa and
provide sleeves and other associated products and services to their customers. They have
approximately 500 full-time employees. The acquisition gives the Group control over a
business with strong growth prospects in a growing market and expands its global
presence.
The following table provides an overview of the consideration transferred, the recognised
amounts of assets acquired and liabilities assumed at the acquisition date, the fair value of
the pre-existing interest held by the Group prior to the acquisition and the resulting
goodwill. It reflects the final outcome of the acquisition accounting.
(in € million)
Cash
Shares (17,467,632 ordinary SIG shares)
Fair value of consideration transferred
Cash and cash equivalents
Trade and other current receivables
Inventories
Property, plant and equipment
Right-of-use assets
Intangible assets
Trade and other current payables
Loans and borrowings
Deferred tax liabilities
Other current and non-current liabilities
Other net liabilities acquired
Fair value of identifiable net assets acquired (100%)
Fair value of consideration transferred
Fair value of pre-existing interest
Total consideration
Fair value of identifiable net assets
Goodwill
The amount of “Other net liabilities acquired” in the consolidated interim financial
statements for the six months ended 30 June 2021 was determined on a provisional basis.
An additional liability of €5.9 million has, based on new information about facts and
circumstance that existed at the acquisition date, been recognised as part of the
acquisition accounting. As a result, goodwill has increased from the initially reported
amount of €512.5 million to €518.4 million.
Annual Report 2021
167.0
323.3
490.3
103.4
56.1
37.6
182.5
26.7
149.2
(88.8)
(162.5)
(9.4)
(80.0)
(12.0)
202.8
490.3
230.9
721.2
(202.8)
518.4
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
68
195
For the ten months ended 31 December 2021, the acquisition of the former joint ventures
contributed incremental revenue of €166.0 million and a gain of €8.5 million (excluding the
gain on pre-existing interest in the former joint ventures and transaction costs but
including fair value adjustments) to the Group’s result. If the acquisition had occurred on
1 January 2021, management estimates that for the year ended 31 December 2021,
consolidated revenue would have been €2,077.8 million and consolidated profit would
have been €173.7 million. In determining these amounts, management has assumed that
the fair value adjustments as of the acquisition date would have been the same if the
acquisition had occurred on 1 January 2021.
The Group has incurred total acquisition-related costs of €7.9 million in 2020 and 2021, of
which €6.5 million have been booked in the year ended 31 December 2021 (as part of
other expenses).
Consideration transferred
The Group transferred €167.0 million in cash and 17,467,632 newly issued SIG ordinary
shares with a fair value of €323.3 million to OIG as consideration for the remaining shares
of the joint ventures on 25 February 2021. The shares were issued out of authorised share
capital on 22 February 2021 (see note 24). The fair value of the shares was determined by
reference to SIG’s closing share price of CHF 20.50 on 24 February 2021 as the acquisition
was completed prior to the opening of SIX Stock Exchange on 25 February 2021. As the
acquisition has been completed using a locked box valuation approach, there have been
and will be no post-closing adjustments to the consideration transferred.
Identifiable net assets acquired
intangible assets of €149.2 million mainly comprise customer relationships
The
(€146.1 million). The useful lives of customer relationships are assessed to be ten years.
The property, plant and equipment balance primarily comprises production equipment
and filling lines deployed under contracts that qualify to be accounted for as operating
leases. The fair value of trade receivables was €45.7 million. Trade receivables comprised
gross contractual amounts due of €58.5 million, of which €12.8 million was expected to be
uncollectible as of the acquisition date.
Goodwill
The business combination resulted in goodwill of €518.4 million that has been allocated to
the new segment MEA (see note 14). The goodwill mainly comprises expectations about
future new customers, entrance into new markets and the skills and competence of the
workforce. There are no specific synergies or cost savings expected. The goodwill is not
expected to be deductible for tax purposes.
Gain on pre-existing interest
The remeasurement to fair value of the Group’s pre-existing 50% interest in the former
joint ventures resulted in a gain of €48.8 million. The gain is recognised as part of other
income (see notes 8 and 9) and is calculated at the acquisition date as follows:
(in € million)
Fair value of pre-existing interest
Carrying amount of pre-existing interest
Reclassification of amounts in foreign currency translation reserve to profit or loss
Gain on pre-existing interest in joint ventures
230.9
(178.8)
(3.3)
48.8
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
69
196
Assessment of fair values
The Group applied generally accepted valuation methods in the assessment of the fair
values of the acquired net assets. The fair value of the customer relationships was
assessed by applying the multi-period excess earnings method. For property, plant and
equipment, the fair values were primarily assessed by using the cost approach (the direct
cost approach where possible). The fair value of inventories was estimated based on the
estimated selling price in the ordinary course of business less the estimated cost of
completion and sale, and a reasonable profit margin.
The fair value of the Group’s pre-existing 50% interest in the former joint ventures has
been assessed using the discounted cash flow method. The Group applied a unit of
account approach where the fair value of the interest in the former joint ventures as a
whole (100% interest) was assessed, taking into consideration a control premium. A
control premium was applied as the Group has moved from only having joint control to
having full control. Management believes that it can therefore more efficiently and
effectively manage the strategy, operations and resources of the former joint ventures to
increase the cash flows generated by these entities.
Accounting policy
Business combinations are accounted for using the acquisition method at the acquisition date when
the acquired set of activities and assets meets the definition of a business and control is transferred
to the Group.
The consideration transferred is generally measured at fair value, as are the identifiable net assets
acquired. The consideration transferred does not include amounts related to the settlement of pre-
existing relationships. Such amounts are generally recognised in profit or loss.
Goodwill is measured at the acquisition date as the fair value of the consideration transferred
(including, if applicable, the fair value of any previously held equity interests and any non-controlling
interests) less the net recognised amount (which is generally fair value) of the identifiable assets
acquired and liabilities assumed. If the excess is negative, a bargain purchase gain is recognised
immediately in profit or loss.
Any contingent consideration is measured at fair value at the acquisition date. If such a contingent
consideration depends on the achievement of future earnings or other performance targets, any
changes in the fair value are recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities incurred in
connection with a business combination, are expensed as incurred.
In a business combination achieved in stages, the equity interest in the acquired entity that was held
by the Group before obtaining control is treated as if it was sold and subsequently repurchased. The
pre-existing interest in the acquired entity is remeasured at fair value at the acquisition date. Any
resulting gain or loss is recognised in profit or loss. Amounts recognised in other comprehensive
income in prior periods that are related to the previously held interest are treated on the same basis
as if the Group had disposed of the interest to a third party.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
70
197
Significant judgements and estimates
Significant judgements and estimates were made by management relating to the accounting for the
acquisition of the remaining shares of the joint ventures in the Middle East. For example, the
assessment of the fair value and the useful lives of the customer relationships and the assessment of
the fair value of the pre-existing interest in the former joint ventures involved significant judgement
and estimates.
28
Joint ventures
The Group does not have any significant investments in joint ventures as of 31 December
2021. It only has a smaller investment in a joint venture in Japan. The Company acquired
the remaining 50% of the shares of its two joint ventures in the Middle East on
25 February 2021 (see note 27).
The Group’s share of the profit or loss of joint ventures (net of income tax) is presented as
part of the Group’s profit or loss from operating activities due to the Group’s close
interaction with its current and former joint ventures.
Composition of the Group’s joint ventures
The below table provides an overview of the Group’s current and former joint ventures.
Companies
Al Obeikan SIG Combibloc Company Ltd.1,2
SIG Combibloc FZCO1,3
DNP • SIG Combibloc Co., Ltd.
Reporting
date
Country of
incorporation
31 Dec.
31 Dec.
31 Dec.
Saudi Arabia
UAE
Japan
Interest held at
31 Dec.
2021
31 Dec.
2020
100%
100%
50%
50%
50%
50%
1
2
3
The Company acquired the remaining 50% of the shares on 25 February 2021 (see note 27).
Previously SIG Combibloc Obeikan Company Ltd., renamed to Al Obeikan SIG Combibloc Company Ltd. in the third quarter of 2020.
Previously SIG Combibloc Obeikan FZCO, renamed to SIG Combibloc FZCO in the fourth quarter of 2021.
There have been no significant transactions with the joint venture in Japan in the years
ended 31 December 2021 and 31 December 2020. The joint venture was formed in 2018
with the joint venture partner DNP and it provides aseptic carton packaging solutions in
Japan.
Summary joint venture financial information
The following tables provide summary financial information about the joint ventures,
representing the amounts presented in the IFRS financial statements of the joint ventures
and not adjusted for the Group’s ownership percentage. Information about the former
joint ventures in the Middle East is presented for the comparative period and until
25 February 2021 for the year ended 31 December 2021.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
71
198
(In € million)
31 December 2021
Al Obeikan SIG Combibloc Company
Ltd., Saudi Arabia
SIG Combibloc FZCO, UAE1
DNP • SIG Combibloc Co., Ltd., Japan
Total
31 December 2020
Al Obeikan SIG Combibloc Company
Ltd., Saudi Arabia
SIG Combibloc FZCO, UAE1
DNP • SIG Combibloc Co., Ltd., Japan
Total
(In € million)
Current
assets
Non-
current
assets
Total
assets
Current
liabilities
Non-
current
liabilities
Total
liabilities
Net
assets
-
-
1.4
1.4
0.8
0.8
0.6
0.6
0.2
0.2
-
-
-
0.2
0.2
-
-
1.2
1.2
57.7
161.5
1.4
90.5
177.5
0.6
148.2
339.0
2.0
220.6
268.6
489.2
31.6
123.3
1.2
156.1
81.0
184.8
-
265.8
112.6
308.1
1.2
421.9
35.6
30.9
0.8
67.3
Revenue
Expenses
Profit
after tax
2021
Al Obeikan SIG Combibloc Company Ltd., Saudi Arabia2
SIG Combibloc FZCO, UAE1,2
DNP • SIG Combibloc Co., Ltd., Japan
Total
2020
Al Obeikan SIG Combibloc Company Ltd., Saudi Arabia
SIG Combibloc Obeikan FZCO, UAE1
DNP • SIG Combibloc Co., Ltd., Japan
Total
14.9
17.6
1.1
33.6
141.4
208.4
7.0
356.8
(15.4)
(20.8)
(0.6)
(36.8)
(125.2)
(190.9)
(6.0)
(322.1)
1
2
Previously SIG Combibloc Obeikan FZCO, renamed to SIG Combibloc FZCO in the fourth quarter of 2021.
Information presented for January-February 2021.
Joint venture impact on the consolidated financial statements
(In € million)
Carrying amount as of 1 January
Share of (loss)/profit (net of income tax)
Dividends received
Derecognition of pre-existing interest in the former joint ventures
in the Middle East (business combination achieved in stages)
Effect of movements in exchange rates
Other
Carrying amount as of 31 December
Amount of goodwill in carrying amount of joint ventures as of 31 Dec.
2021
184.5
(1.6)
-
(178.8)
0.4
(3.9)
0.6
-
(0.5)
(3.2)
0.5
(3.2)
16.2
17.5
1.0
34.7
2020
193.4
17.4
(22.7)
-
(3.8)
0.2
184.5
150.8
Accounting policy
The accounting policy for joint ventures is included in note 26.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
72
199
29
Related parties
The Group has related party relationships with its shareholders, subsidiaries, joint venture
and key management.
The Company acquired the remaining 50% of the shares of its joint ventures in the Middle
East on 25 February 2021 (see note 27). They are since then 100% owned subsidiaries and
thereby fully consolidated. As described in note 4, there have also been organisational
changes in the Group Executive Board and the Board of Directors.
Shareholders
The Company’s shares are listed on SIX Swiss Exchange.
The members of the Group Executive Board directly held 0.2% of the Company’s shares as
of 31 December 2021 (directly 0.3% as of 31 December 2020). The members of the Board
of Directors directly held 0.08% and indirectly held 0.5% of the Company’s shares as of
31 December 2021 (directly 0.08% as of 31 December 2020).
Onex and a number of co-investors related to it gradually reduced their shareholding in
the Company in 2020. Onex ceased to be a related party to the Company in August 2020,
when its shareholding was reduced to below 20% (to 10.1% of the issued shares).
According to the disclosure notifications reported to the Company and published by the
Company via the electronic publishing platform of SIX Swiss Exchange, Onex did not report
any shareholding of 3% or more of the voting rights of the Company as of 31 December
2021 and 31 December 2020.
Key management
The Company’s key management include the members of the Group Executive Board and
the Board of Directors.
The below table includes information about compensation to the Group Executive Board.
(In € million)
Short-term employee benefits
Post-employment benefits
Share-based payments
Termination benefits
Total compensation to the Group Executive Board
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
6.7
0.4
2.3
1.1
10.5
6.0
0.5
2.1
5.5
14.1
The expense of €1.1 million recognised in the year ended 31 December 2021 for
termination benefits (garden leave and non-compete agreement) relates to Lawrence Fok,
the former President and General Manager of Asia Pacific, who announced in October
2021 that he would leave his role in the Group Executive Board as of 31 December 2021.
He will leave the Group in 2022, after a transition period.
The expense of €5.5 million recognised in the year ended 31 December 2020 for
termination benefits (garden leave and non-compete agreements) related to three former
members of the Group Executive Board. The Chief Market Officer (Markus Boehm) left the
Group in August 2020 when the Group announced organisational changes in the Group
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
73
200
Executive Board, including the elimination of his position and a reallocation of his
responsibilities within the Group. The President and General Manager of Europe (Martin
Herrenbrück) and the Chief Executive Officer (Rolf Stangl) both announced during 2020
that they voluntarily would leave the Group as of 31 December 2020.
The terminations for both periods have been reflected in the measurement of the amount
recognised as a share-based payment expense in the respective periods, considering the
good and bad leaver clauses in the share-based payment plans in which the former
members of the Group Executive Board participated.
Compensation to the members of the Board of Directors totalled €1.8 million for the year
ended 31 December 2021 (€1.6 million for the year ended 31 December 2020). The
members of the Board of Directors receive part of their compensation in blocked shares.
See note 31 for details about the participation of the members of the Group Executive
Board and the Board of Directors in share-based payment plans and arrangements.
Further information about compensation paid to the members of the Group Executive
Board and the Board of Directors can be found in the Compensation Report included
elsewhere in the 2021 Annual Report. Details about SIG shareholdings of these persons
are included in the section “Shareholders” above and in the Compensation Report.
Other related parties
The Group’s subsidiaries are listed in note 26. Information about the current and former
joint ventures is included in note 28.
Related party transactions and balances
Information about related party transactions and balances not covered above is provided
in the following table.
(In € million)
Joint ventures1
Sale of goods and services (sleeves, liquid paper
board, filling machines and related goods and
services), revenue under royalty agreements and
other transactions/Net receivables
Purchase of goods
Dividends received
Onex portfolio companies2
Purchase of goods (supplies and machine parts):
- Erwepa/Davis Standard
Transaction values
for the year ended
31 Dec.
31 Dec.
2020
2021
Balance outstanding
as of
31 Dec.
2021
31 Dec.
2020
9.5
0.1
-
100.2
0.4
22.7
0.4
-
-
10.1
-
-
-
6.3
-
-
1
2
Transactions with the former joint ventures in the Middle East are reported until 25 February 2021, when they became fully owned subsidiaries.
Transactions with Onex portfolio companies are reported until 6 August 2020, when Onex ceased to be a related party to the Company. Onex used to provide
consultancy services to the Company on various matters without any compensation other than for out-of-pocket expenses. Since December 2020, Onex no longer
provides consultancy services to the Company. The information sharing agreement between SIG and Onex was terminated on 6 August 2020.
There were no other significant related party transactions during the years ended
31 December 2021 and 31 December 2020. As of 31 December 2021 and 31 December
2020, the Group had no commitments to incur capital expenditure with related parties.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
74
201
OUR PEOPLE
This section covers information about the Group’s employee-related expenses and
pension plans as well as the Group’s share-based payment plans and arrangements.
Details about compensation concerning the Group’s key management are included in
note 29 on related parties.
30
Employee benefits
The Group operates various defined benefit plans, of which the largest is in Switzerland.
Overview of employee benefits
(In € million)
Salaries and wages accrued
Provision for annual leave
Provision for other employee benefits
Net defined benefit obligations:
Pension benefit liabilities
Total employee benefit liabilities
Current
Non-current
Total employee benefit liabilities
As of
31 Dec.
2021
As of
31 Dec.
2020
47.0
9.0
2.2
126.8
185.0
56.0
129.0
185.0
41.1
9.4
2.9
128.6
182.0
50.5
131.5
182.0
The Group has a net defined benefit asset in the amount of €230.2 million as of
31 December 2021 (€178.5 million as of 31 December 2020). It relates to the defined
benefit pension plan in Switzerland. The Group’s net defined benefit liabilities relate to
defined benefit pension plans in other countries.
Personnel expenses
Personnel expenses recognised
loss and other
comprehensive income were €387.3 million in the year ended 31 December 2021
(€347.0 million in the year ended 31 December 2020).
in the statement of profit or
Defined benefit pension plans
The Group makes contributions to defined benefit pension plans. It operates defined
benefit pension plans in countries including Austria, France, Germany, India, Indonesia,
Saudi Arabia, Switzerland, Taiwan, Thailand and UAE. The majority of the Group’s pension
obligations are in Switzerland. The retirement plans are subject to governmental
regulations relating to the funding. The Group usually funds its retirement plans in an
amount equal to the annual minimum funding requirements specified by government
regulations covering each plan.
This note generally includes aggregated disclosures in respect of the Group’s pension
plans as the plans are not exposed to materially different risks. However, certain
information relating to the Swiss retirement plan is separately disclosed as it is the Group’s
largest pension plan.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
75
202
As of 31 December 2021, the Swiss retirement plan comprises 73% (74% as of
31 December 2020) of the present value of the Group’s pension plan obligations. As
of 31 December 2021, the fair value of the assets of the Swiss retirement plan exceeded
the present value of its pension obligations by €230.2 million (€178.5 million as of
31 December 2020). An assessment of the investment strategy of the Swiss retirement
plan is performed yearly.
Expected annual contributions to the Group’s defined benefit pension plans during the
year ending 31 December 2022 are estimated to be €5.1 million. The Group’s pension
plans had a weighted average duration of 13 years as of 31 December 2021 (14 years as of
31 December 2020).
Movement in net defined benefit obligation
Information about the net defined benefit obligation as of and for the year ended
31 December 2021 and the year ended 31 December 2020 is included below.
(In € million)
Carrying amount as of the beginning
of the year
Service cost
Interest cost/(income)
Administrative expenses
Curtailments
Total expense/(income) recognised in
profit or loss
Actuarial (gains)/losses arising from:
Demographic assumptions
Financial assumptions
Return on plan assets,
excluding interest income
Total remeasurement (gains)/losses
included in other comprehensive
income
Contributions by the Group
Contributions by plan participants
Benefits paid by the plans
Addition through business combination
Effect of movements in exchange rates
Total other movements
Carrying amount as of the end
of the year
Comprised of:
Swiss retirement plan
All other plans
Carrying amount as of the end
of the year
Defined benefit
obligation
2021
2020
Fair value
of plan assets
2021
2020
Net defined benefit
liability/(asset)
2021
2020
509.2
8.4
1.6
-
(2.0)
504.5
7.1
1.8
-
0.2
(559.1)
-
(0.6)
0.5
-
(549.6)
-
(0.9)
0.5
-
(49.9)
8.4
1.0
0.5
(2.0)
(45.1)
7.1
0.9
0.5
0.2
8.0
9.1
(0.1)
(0.4)
7.9
8.7
(18.0)
(4.0)
9.0
9.3
-
-
-
-
(18.0)
(4.0)
9.0
9.3
-
-
(33.2)
(25.7)
(33.2)
(25.7)
(22.0)
18.3
(33.2)
(25.7)
(55.2)
-
1.8
(38.1)
9.3
15.9
-
1.7
(25.6)
-
1.2
(11.1)
(22.7)
(5.9)
(1.8)
38.1
-
(25.5)
4.9
(4.8)
(1.7)
25.6
-
(2.5)
16.6
(5.9)
-
-
9.3
(9.6)
(6.2)
(7.4)
(4.8)
-
-
-
(1.3)
(6.1)
484.1
509.2
(587.5)
(559.1)
(103.4)
(49.9)
352.9
131.2
376.4
132.8
(583.1)
(4.4)
(554.9)
(4.2)
(230.2)
126.8
(178.5)
128.6
484.1
509.2
(587.5)
(559.1)
(103.4)
(49.9)
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
76
203
(In € million)
Included in the statement of financial
position as:
Employee benefits (asset)
Employee benefits (liability)
Total net defined pension benefits
Expense recognised in profit or loss
Net defined benefit
liability/(asset)
2021
2020
(230.2)
126.8
(103.4)
(178.5)
128.6
(49.9)
The net pension expense is recognised in the following components in the statement of
profit or loss and comprehensive income.
(In € million)
Cost of sales
Selling, marketing and distribution expenses
General and administrative expenses
Total net pension expense
thereof the Swiss retirement plan
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
3.7
0.7
3.5
7.9
5.1
4.1
0.9
3.7
8.7
4.6
Expense recognised in other comprehensive income
The remeasurement of the Group’s defined benefit pension plans in the year ended
31 December 2021 resulted in a €45.7 million increase, net of income tax, in other
comprehensive income (an increase of €7.8 million, net of income tax, in the year ended
31 December 2020).
Plan assets
(In € million)
Equity instruments
Debt instruments
Real estate
Other
Total plan assets
As of
31 Dec.
2021
As of
31 Dec.
2020
163.9
226.6
177.0
20.0
587.5
152.8
224.1
159.9
22.3
559.1
Approximately 99% of total plan assets are held by the Swiss retirement plan as of
31 December 2021 (99% as of 31 December 2020). The debt
instruments consist
principally of corporate and government bonds. The equity and debt instrument values
are based on quoted market prices in active markets. The real estate is held through
unlisted funds. The investment policy of the Swiss retirement plan is to target an asset mix
of around 25% equity instruments, 45% debt instruments, 25% real estate funds and to
hold 5% in cash.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
77
204
Actuarial assumptions
The amounts recognised under the Group’s defined benefit pension plans are determined
using actuarial methods. The actuarial valuations involve assumptions regarding discount
rates, expected salary increases and the retirement age of employees. These assumptions
are reviewed at least annually and reflect estimates as of the measurement date. Any
change in these assumptions will impact the amounts reported in the statement of
financial position, plus the net pension expense or income that may be recognised in
future years. The mortality table used for the Swiss retirement plan for 2021 was BVG
2020 GT (BVG 2015 GT for 2020).
While the Swiss retirement plan does not provide for compulsory benefit increases for
pensioners, increases have been granted from time to time at the discretion of the
foundation board, depending on the funding situation at the time.
The assumed discount rate and future salary increases are the assumptions with the most
significant effect on the defined benefit obligation. They are presented in the below table.
(In %)
Discount rates
Future salary increases
Swiss retirement plan
All plans
As of
31 Dec.
2021
0.30%
1.50%
As of
31 Dec.
2020
0.10%
1.50%
As of
31 Dec.
2021
As of
31 Dec.
2020
0.3% - 6.8%
0.0% - 9.0%
0.1% - 6.6%
0.0% - 9.0%
The below table shows the effect on the defined benefit obligation of a change in the
discount rate and future salary increases.
(In € million)
Discount rates
50 basis points increase
50 basis points decrease
Future salary increases
50 basis points increase
50 basis points decrease
Swiss retirement plan
All plans
As of
31 Dec.
2021
As of
31 Dec.
2020
As of
31 Dec.
2021
As of
31 Dec.
2020
(5.1)
12.0
1.2
(1.1)
(4.8)
20.0
1.1
(1.0)
(15.4)
23.7
2.8
(2.7)
(15.3)
32.2
2.0
(1.9)
A 50 basis points decrease of the discount rate for the Swiss retirement plan would result
in a negative discount rate, which explains the increased sensitivity to downward changes
in discount rates.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
78
205
Accounting policy
Short-term employee benefits
Short-term employee benefits are expensed in profit or loss as the related services are provided. A
liability is recognised for the amount expected to be paid under short-term cash bonus or profit-
sharing plans and outstanding annual leave balances if the Group has a present legal or constructive
obligation to pay this amount as a result of past services provided by the employee and the
obligation can be estimated reliably.
Pension obligations
The Group’s obligation with respect to its defined benefit plans is calculated separately for each plan
by estimating the amount of the future benefits to which employees are entitled in return for their
services in the current and prior years, discounting that amount to determine the present value of
the Group’s obligation and then deducting the fair value of any plan assets. The discount rate used is
the yield on high-quality corporate bonds that are denominated in the currency in which the benefits
will be paid and that have maturity dates approximating the terms of the Group’s obligations. The
calculations are performed annually by qualified actuaries using the projected unit credit method.
When the calculation results in a potential asset for the Group (such as for the Group’s Swiss
retirement plan), the recognised asset is limited to the present value of economic benefits available
in the form of reductions in future contributions to the plan (the case for the Swiss retirement plan)
or any future refunds from the plan. To calculate the present value of economic benefits,
consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined liability, which comprise actuarial gains and losses, the return on
plan assets (excluding interest) and, if any, the effects of the asset ceiling (excluding interest) are
recognised immediately in other comprehensive income.
The net interest expense/(income) on the net defined benefit liability/(asset) for the period is
determined by applying the discount rate used to measure the defined benefit obligation at the
beginning of the annual period to the net defined liability/(asset) as of that time, taking into account
any changes from contributions and benefit payments. Net interest expense and other plan
expenses are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit
that relates to past services or the gain or loss on curtailment is recognised immediately in profit or
loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the
settlement occurs.
Termination benefits
Termination benefits, when applicable, are payable when employment is terminated by the Group
before the normal retirement date or whenever an employee accepts voluntary redundancy in
exchange for such benefits. Termination costs are expensed when the Group can no longer withdraw
the offer of the benefits or when the Group recognises any related restructuring costs, whichever
occurs earlier.
Significant judgements and estimates
Amounts recognised under the Group’s defined benefit pension plans are determined using actuarial
methods. These actuarial valuations involve various assumptions that reflect estimates as of the
measurement date. See the section “Actuarial assumptions” above for an overview of the impact of
any change in these assumptions.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
79
206
31
Share-based payment plans and arrangements
long-term
incentive plans for certain members of
The Group has share-based
management, other key employees and talents. The members of the Board of Directors
receive a part of their total compensation under share-based payment arrangements.
These plans and arrangements have an insignificant impact on the Group’s result. The
Group expects to settle its obligations under these plans and arrangements by using own
shares (treasury shares) or, alternatively, by using shares issued out of its conditional
share capital (see note 24).
Share-based long-term incentive plans for SIG employees
Performance share unit plan
Since 2019, the Group grants performance share units (“PSUs”) annually to the members
of the Group Executive Board and certain other members of management. The PSU plans
have equivalent terms and vesting conditions.
One PSU represents the contingent right to receive one SIG share. The number of granted
PSUs is determined by dividing each participant’s award under the plan by the fair value of
one PSU at the grant date. The exact number of PSUs that vests depends on the long-term
performance of SIG during a three-year vesting period. The plans include the following
vesting conditions:
Service condition: Continuous employment through to the vesting date.
Two non-market performance conditions: Achievement of a cumulative diluted
adjusted earnings per share target and a cumulative free cash flow target.
One market performance condition: Achievement of a relative total shareholder
return target, measured relative to the SPI® ICB Industry 2000 "Industrials" Total
Return Index (with a vesting factor capped at 1.0 for a negative absolute TSR).
At vesting, the three performance conditions are first assessed individually to determine
the level of achievement of the set targets (in a range from 0% to 200%). The achievement
percentage of each performance condition is then combined based on a relative weighting
of the performance conditions (50% for the relative total shareholder return target and
25% each for the earnings per share and cash flow targets). The combined vesting multiple
determines how many shares the participants are entitled to at the end of the vesting
period.
The fair value of one PSU is calculated based on a Monte Carlo simulation model, which
reflects the probability of over- or underachieving the market performance condition. The
model also takes into account various inputs such as the closing share price of one SIG
share on the grant date and adjusts for expected dividends (discounted at a risk-free
interest rate) to which the participants of the plan are not entitled until the PSUs vest after
three years.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
80
207
The below table provides an overview of the annual PSU plans.
Overview of PSU plans
2021
2020
2019
Grant date
Vesting date
Fair value of one PSU at grant date (in CHF)
Number of employees granted PSUs
Granted number of PSUs
thereof to members of the Group Executive Board
1 April 2021
31 March 2024
22.31
9
201,707
187,139
The below table provides a reconciliation of the outstanding PSUs.
1 April 2020
1 April 2019
31 March 2023 31 March 2022
9.49
9
537,414
495,263
15.05
8
342,198
325,586
Number of PSUs
As of 1 January
Granted PSUs
Forfeited PSUs
As of 31 December
thereof held by members of the Group Executive Board
Outstanding PSUs
2020
2019
537,414
342,198
(341,414)
538,198
454,713
-
537,414
-
537,414
495,263
2021
538,198
201,707
(47,786)
692,119
522,059
One member of the Group Executive Board announced in October 2021 that he would
leave the Company in 2022, while three members of the Group Executive Board left in the
year ended 31 December 2020 (see note 29). As per the good and bad leaver clauses in
the PSU plan regulations, this resulted in forfeitures of a certain number of the granted
PSUs.
Restricted share unit plan
Since 2019, the Group annually grants a small number of restricted share units (“RSUs”) to
a limited number of employees. One RSU represents the contingent right to receive one
SIG share, subject to the fulfilment of a three-year service vesting condition.
Equity investment plan
In 2020, the Group introduced an equity investment plan (“EIP”) for a wider group of
management in leadership positions, other key employees and talents under which the
participants may choose to invest in SIG shares at market value. The shares are blocked
for three years. For each purchased share, the Group grants the participants two matching
options to purchase another two shares at a pre-defined exercise price at the end of a
three-year vesting period.
The grant date for the 2021 EIP award was 31 May 2021 (31 May 2020 for the 2020 EIP).
Under the 2021 EIP, 64 employees were granted in total 124,680 options (66 employees
were granted in total 220,588 options under the 2020 EIP). The fair value of one option,
calculated using the Black-Scholes model, was CHF 3.63 as of grant date for the 2021 EIP
(CHF 2.82 for the 2020 EIP). A total of 316,382 options under all EIPs were outstanding as
of 31 December 2021 (214,588 as of 31 December 2020).
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
81
208
Share-based payment arrangements for members of the Board of
Directors
The members of the Board of Directors receive 40% of their total compensation in SIG
shares that are blocked for three years. The grant date is the date of the Annual General
Meeting (normally held in April), when the total compensation package for the next term
of office is approved. The compensation is paid out four times during the one-year long
term of office (i.e. there are four award dates, each relating to work performed during the
quarter before the respective award date). The number of blocked shares is determined
by dividing each board member’s individual compensation amount for one award cycle by
the average closing price of the SIG share of the first ten trading days of the third month of
the quarter for which the blocked shares are granted. The fair value of one blocked share
is calculated based on the closing share price of one SIG share on the grant date.
The Group granted 30,583 blocked shares to the members of the Board of Directors in the
year ended 31 December 2021 (39,884 blocked shares in the year ended 31 December
2020). The fair value of one granted instrument was CHF 23.10 as of grant date in year
ended 31 December 2021 (CHF 14.93 in the year ended 31 December 2020). The blocked
shares have been delivered by using treasury shares (see note 24).
Share-based payment expense
The share-based payment expense recognised as a personnel expense in the year ended
31 December 2021 relating to the PSU, RSU and equity investment plans for SIG
employees amounts to €3.1 million, of which €2.3 million relates to members of the Group
Executive Board (€2.6 million for the year ended 31 December 2020, of which €2.1 million
related to members of the Group Executive Board).
The share-based payment expense recognised as part of general and administrative
expenses in the year ended 31 December 2021 relating to the arrangement for the Board
of Directors amounts to €0.7 million (€0.6 million for the year ended 31 December 2020).
Accounting policy
The Group’s share-based payment plans and arrangements are all equity-settled payment
arrangements. The grant date fair value of the awards is recognised as an expense, with a
corresponding increase in equity (retained earnings), over the vesting period of the awards. The
amount recognised as an expense is adjusted to reflect the number of awarded instruments for
which the related service and any non-market performance conditions are expected to be met, such
that the amount ultimately recognised is based on the number of awarded instruments that meet
the related service and any non-market performance conditions at the vesting date. Any market
performance conditions are reflected in the grant date fair valuation of the awarded instruments and
there is no true-up during the vesting period or at the vesting date for differences between expected
and actual outcomes. If there is no vesting period, the grant date fair value is immediately recognised
as an expense.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
82
209
OTHER
This section provides details about the Group’s income tax exposure, different categories
of financial instruments (including derivative instruments), fair value information and off-
balance sheet information.
32
Income tax
This note covers the Group’s current and deferred
income tax exposure, with
corresponding impacts on the statement of profit or loss and other comprehensive
income and the statement of financial position. Management believes that its accruals for
tax liabilities are sufficient for all open tax years based on its assessment of existing facts,
prior experiences and interpretations of tax laws.
Amounts recognised in profit or loss
(In € million)
Current year
Adjustments for prior years
Current tax expense
Origination and reversal of temporary differences
Recognition of previously unrecognised tax losses
Adjustments for prior years
Deferred tax benefit
Income tax expense
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
(78.0)
7.5
(70.5)
18.5
1.4
(1.7)
18.2
(70.1)
1.3
(68.8)
43.2
1.5
1.1
45.8
(52.3)
(23.0)
Amounts recognised in other comprehensive income
The Group has recognised in other comprehensive income a deferred tax expense of
€9.5 million relating to the remeasurement of defined benefit plans for the year ended
31 December 2021 (€0.3 million deferred tax income for the year ended 31 December
2020).
Reconciliation of effective tax expense
The following table presents the Group’s reconciliation between profit before income tax
and the income tax expense. The reconciliation is based on the Company’s applicable
Swiss tax rate and adjusts for the effect of tax rates applied by Group companies in other
jurisdictions as the Group’s business activities and taxable income are mostly located
outside of Switzerland. The effect of tax rates in foreign jurisdictions is made up from the
difference between the Company’s applicable Swiss tax rate and the statutory tax rates
per each individual jurisdiction. The Company’s applicable Swiss tax rate of 14.29% for the
year ended 31 December 2021 is at the same level as the comparative period (14.29%).
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
83
210
(In € million)
Profit before income tax
Income tax using the Swiss tax rate of 14.29% (2020: 14.29%)
Effect of tax rates in foreign jurisdictions
Non-deductible expenses
Tax exempt income
Withholding tax
Recognition of previously unrecognised tax losses
Unrecognised tax losses and temporary differences
Tax uncertainties
Tax on undistributed profits
Adjustments for prior years
Income tax expense
Current tax assets and liabilities
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
224.4
(32.1)
(8.4)
(9.8)
8.8
(8.1)
1.4
(4.2)
(1.2)
(4.5)
5.8
(52.3)
91.0
(13.0)
4.0
(6.8)
4.9
(8.7)
1.5
(6.3)
(1.5)
0.5
2.4
(23.0)
Current tax assets of €4.4 million as of 31 December 2021 (€2.8 million as of 31 December
2020) represent the amount of income taxes recoverable with respect to current and prior
periods and arise from the payment of tax in excess of the amounts due to the relevant
liabilities of €42.1 million as of 31 December 2021
tax authorities. Current tax
(€37.3 million as of 31 December 2020) represent the amount of income taxes payable
with respect to current and prior periods.
Current tax liabilities include an amount of €5.8 million (€6.5 million as of 31 December
2020) for prior periods that will be reimbursed by PEI Holdings Company LLC (a company
associated with Reynolds Group Holdings Limited, the owner of the Group prior to
13 March 2015) in line with the share purchase agreement that was signed when Onex
acquired the Group in 2015. The same amount has been recognised as part of other
receivables.
Recognised deferred tax assets and liabilities
(In € million)
Included in the statement of financial position as:
Deferred tax assets
Deferred tax liabilities
Total recognised net deferred tax liabilities
As of
31 Dec.
2021
As of
31 Dec.
2020
46.0
(147.4)
(101.4)
30.5
(132.4)
(101.9)
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
84
211
The following table provides details about the components of deferred tax assets and
liabilities.
Prop-
erty,
plant
and
equip-
ment
Intan-
gible
assets
Inven-
tories
Receiv-
ables
Other
pay-
ables
Deferred
revenue
Unre-
mitted
ear-
nings
Net
deferred
tax assets/
(liabilities)
Other
items
(97.6) (126.9)
16.1
16.6
30.5
26.4
(18.4)
(2.6)
(150.7)
8.6
19.3
1.6
12.5
(3.8)
0.9
0.4
6.3
45.8
-
-
-
-
-
-
3.0
4.1
(0.8)
0.3
(2.9)
0.3
-
-
0.3
(1.3)
0.3
2.7
(86.0) (103.5)
16.9
29.4
23.8
27.6
(18.0)
7.9
(101.9)
(86.0) (103.5)
16.9
29.4
23.8
27.6
(18.0)
7.9
(101.9)
(2.5)
(7.2)
(0.8)
-
-
-
-
1.1
(9.4)
(26.0)
21.4
12.5
0.2
5.5
7.9
(4.5)
1.2
18.2
-
-
-
-
-
-
2.8
(3.2)
0.9
(0.6)
2.9
1.0
-
-
(9.5)
(9.5)
(2.6)
1.2
(111.7)
(92.5)
29.5
29.0
32.2
36.5
(22.5)
(1.9)
(101.4)
(In € million)
Carrying amount
as of 1 Jan. 2020
Recognised in profit
or loss
Recognised in other
comprehensive income
Effect of movements
in exchange rates
Carrying amount
as of 31 Dec. 2020
Carrying amount
as of 1 Jan. 2021
Additions through
business combination
Recognised in profit
or loss
Recognised in other
comprehensive income
Effect of movements
in exchange rates
Carrying amount
as of 31 Dec. 2021
“Other payables” mainly include a deferred tax asset relating to liabilities for various
customer incentive programmes. “Other items” mainly include net deferred tax assets or
liabilities relating to employee benefits and tax loss carry-forwards. Tax loss carry-
forwards recognised as a deferred tax asset amount to €2.9 million as of 31 December
2021 (€4.6 million as of 31 December 2020).
Unrecognised deferred tax assets
Deferred tax assets have not been recognised with respect to tax losses in the amount of
€8.1 million as of 31 December 2021 (€23.0 million as of 31 December 2020) because
management has assessed that it is not probable that future taxable profit will be
available against which the Group can utilise the benefits therefrom. The decrease in
unrecognised deferred tax assets is mainly related to the sale of the New Zealand paper
mill (see note 26). The unrecognised tax losses do not expire under the current applicable
tax legislations, with the exception of tax losses of €0.3 million that expire in 2026.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
85
212
Accounting policy
Income tax expense is comprised of current and deferred tax. Income tax expense is recognised in
profit or loss except to the extent that it relates to a business combination or items recognised
directly in equity or in other comprehensive income.
For subsidiaries in which the profits are not considered to be permanently reinvested, the additional
tax consequences of future dividend distributions are recognised as income tax expense.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable
or receivable in respect to previous years. Current tax assets and liabilities are only offset if certain
criteria are met.
Deferred tax
Deferred tax is recognised, using the balance sheet method, on temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
tax purposes. Deferred tax is not recognised for the following temporary differences: the initial
recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit, and differences relating
to investments in subsidiaries and joint arrangements to the extent that they probably will not
reverse in the foreseeable future and the Group is in a position to control the timing of the reversal
of the temporary differences. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on tax rates that have been enacted
or substantively enacted at the reporting date.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be available
against which they can be used. Future taxable profits are determined based on business plans for
individual subsidiaries in the Group. The recoverability of deferred tax assets is reviewed at each
reporting date. Unrecognised deferred tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable profits will be available
against which they can be used.
Deferred tax assets and liabilities are only offset if certain criteria are met.
Significant judgements and estimates
Determining the Group’s worldwide income tax liability requires significant judgement and the use of
estimates and assumptions, some of which are highly uncertain. Each tax jurisdiction’s laws are
complex and subject to different interpretations by the taxpayer and the respective tax authorities.
Significant judgement is required in evaluating the Group’s tax positions, including evaluating
uncertainties. To the extent actual results differ from these estimates relating to future periods and
depending on the tax strategies that the Group may implement, the Group’s financial position may
be directly affected.
Deferred tax assets represent deductions available to reduce taxable income in future years. The
Group evaluates the recoverability of deferred tax assets by assessing the adequacy of future taxable
income, including reversal of taxable temporary differences, forecasted earnings and available tax
planning strategies. Determining the sources of future taxable income relies heavily on the use of
estimates. The Group recognises deferred tax assets when the Group considers it probable that the
deferred tax assets will be recoverable.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
86
213
33
Financial instruments and fair value information
This note provides an overview of the Group’s financial instruments, including derivative
financial instruments, and their categorisation under IFRS. Further details about the
different types of financial assets and financial liabilities are provided throughout these
consolidated financial statements. This note also contains information about the fair value
of the Group’s financial instruments and some general accounting policies covering more
than one type of financial assets and liabilities.
Categories of financial instruments and fair value information
The following tables present the carrying amounts of the Group’s different categories of
financial assets and liabilities as of 31 December 2021 and 31 December 2020. They also
present the respective levels in the fair value hierarchy for financial assets and liabilities
measured at fair value.
Carrying amount as of 31 December 2021
At
amortised
cost
At fair value
through
profit or loss
(mandatorily)
Fair value
hierarchy
Level
1 2 3
x
x
x
Fair value
hierarchy
Level
1 2 3
x
x
x
Total
304.5
247.2
2.7
26.3
580.7
(665.7)
(994.5)
(545.7)
(182.4)
(6.3)
(2,394.6)
Total
355.1
210.2
3.9
17.6
586.8
(505.4)
(992.2)
(544.5)
(147.0)
(5.1)
(2,194.2)
25.7
26.3
52.0
(6.3)
(6.3)
16.2
17.6
33.8
(5.1)
(5.1)
Carrying amount as of 31 December 2020
At
amortised
cost
At fair value
through
profit or loss
(mandatorily)
(In € million)
Cash and cash equivalents
Trade and other receivables
Other financial assets
Derivatives
Total financial assets
Trade and other payables
Loans and borrowings:
- Senior unsecured notes
- Senior unsecured credit facilities
- Lease liabilities
Derivatives
Total financial liabilities
(2,388.3)
(In € million)
Cash and cash equivalents
Trade and other receivables
Other financial assets
Derivatives
Total financial assets
Trade, other payables and other liabilities
Loans and borrowings:
- Senior unsecured notes
- Senior unsecured credit facilities
- Lease liabilities
Derivatives
Total financial liabilities
(2,189.1)
Annual Report 2021
304.5
221.5
2.7
528.7
(665.7)
(994.5)
(545.7)
(182.4)
355.1
194.0
3.9
553.0
(505.4)
(992.2)
(544.5)
(147.0)
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
87
214
Fair value of financial assets and liabilities at amortised cost
The carrying amount of the financial assets and liabilities that are not measured at fair
value is a reasonable approximation of fair value. Excluding transaction costs and an
original issue discount, this is also the case for the Group’s term loan. The fair value of the
notes was €1,035 million as of 31 December 2021 (€1,042 million as of 31 December
2020).
Fair value of trade receivables to be sold under securitisation and
factoring programmes
Trade receivables that will be sold under the Group’s securitisation and factoring
programmes are categorised as measured at fair value through profit or loss. They are
sold shortly after being recognised by the Group and the amount initially recognised for
these trade receivables is representative of their fair value.
Fair value of derivatives
The following tables show the types of derivatives the Group had as of 31 December 2021
and 31 December 2020, and their presentation in the statement of financial position. The
derivatives have been entered into as part of the Group’s strategy to mitigate operational
risks (commodity and foreign currency exchange derivatives).
(In € million)
Current
assets
Non-
current
assets
Total
derivative
assets
Current
liabilities
Non-
current
liabilities
Total
derivative
liabilities
Commodity derivatives
Foreign currency exchange derivatives
Total operating derivatives
26.2
0.1
26.3
Total derivatives as of 31 December 2021
26.3
-
-
-
-
26.2
0.1
26.3
26.3
(1.8)
(4.5)
(6.3)
(6.3)
-
-
-
-
(1.8)
(4.5)
(6.3)
(6.3)
(In € million)
Current
assets
Non-
current
assets
Total
derivative
assets
Current
liabilities
Non-
current
liabilities
Total
derivative
liabilities
Commodity derivatives
Foreign currency exchange derivatives
Total operating derivatives
11.4
6.2
17.6
Total derivatives as of 31 December 2020
17.6
-
-
-
-
11.4
6.2
17.6
17.6
(0.8)
(4.3)
(5.1)
(5.1)
-
-
-
-
(0.8)
(4.3)
(5.1)
(5.1)
The Group measures derivative assets and liabilities at fair value. The fair value is
calculated based on valuation models commonly used in the market. These include
consideration of credit risk, where applicable, and discount the estimated future cash
flows based on the terms and maturity of each contract, using forward interest rates
extracted from observable yield curves and market forward exchange rates at the
reporting date. The derivatives are categorised as level 2 fair value measurements in the
fair value hierarchy as the measurements of fair value are based on observable market
data, either directly (i.e. as prices) or indirectly (i.e. derived from prices). All changes in fair
value are recognised in profit or loss as the Group does not apply hedge accounting under
IFRS 9.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
88
215
Accounting policy
The specific accounting policies for the Group’s different types of financial assets and liabilities are
included in other sections of these consolidated financial statements. This section includes the
accounting policy for topics that are covered in more than one note.
Initial recognition of financial assets and liabilities
The Group initially recognises loans and receivables and any debt issued on the date when they are
originated. All other financial assets and liabilities are initially recognised on the trade date when the
entity becomes party to the contractual provisions of the financial instrument.
Offsetting
Financial assets and financial liabilities are only offset and the net amount presented in the
statement of financial position when the Group currently has a legally enforceable right to offset the
amounts and intends to either settle them on a net basis or realise the asset and settle the liability
simultaneously.
Derivatives
Derivatives are measured at fair value with any related transaction costs expensed as incurred.
Derivatives with a positive fair value are presented as other current or non-current assets in the
statement of financial position, while derivatives with a negative fair value are presented as other
current or non-current liabilities.
The gain or loss on remeasurement to fair value is recognised in profit or loss. Net changes in the fair
value of derivatives entered into as part of the operating business are presented as part of profit
from operating activities, while net changes in the fair value of derivatives entered into in relation to
the financing of the Group (if any) are presented in other finance income or expenses. The Group
does not apply hedge accounting under IFRS 9.
A derivative embedded in another contract is separated and accounted for separately when its
economic characteristics and risks are not closely related to those of its host contract, a separate
instrument with the same terms as the embedded derivative would meet the definition of a
derivative, and the host contract is not measured at fair value with the fair value changes recognised
in profit or loss. Changes in the fair value of a separated embedded derivative are recognised
immediately in profit or loss.
34 Contingent liabilities
The Group has contingent liabilities relating to legal and other matters arising in the
ordinary course of business. Based on legal and other advice, management is of the view
that the outcome of any such proceedings will have no significant effect on the financial
position of the Group beyond the recognised provision.
Accounting policy
Contingent liabilities are possible obligations arising from a past event to be confirmed by future
events not wholly within the control of the Group, or present obligations arising from a past event of
which the outflow of economic benefits is not probable, or which cannot be measured reliably.
Contingent liabilities are not recognised in the statement of financial position, except for certain
items assumed in a business combination, but are separately disclosed.
Annual Report 2021
Annual Report 2021
Financials ► Consolidated financial statements
Consolidated financial statements
Financials
89
216
35
Subsequent events
There have been no events between 31 December 2021 and 24 February 2022 (the date
these consolidated financial statements were approved) that would require an adjustment
to or disclosure in these consolidated financial statements, except for the disclosures
given in note 4 relating to organisational changes in the Group Executive Board effective
as of 1 January 2022 and the announcements of the planned acquisitions of Evergreen
Asia and Scholle IPN in 2022.
Annual Report 2021
Annual Report 2021
Financials
Report of the statutory auditor
217
REPORT OF THE STATUTORY AUDITOR
to the General Meeting of SIG Combibloc Group AG
Neuhausen am Rheinfall
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of SIG Combibloc Group AG and its
subsidiaries (the Group), which comprise the consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December 2021, the consolidated statement of
financial position as at 31 December 2021, the consolidated statement of changes in equity, the
consolidated statement of cash flows, and notes to the consolidated financial statements for
the year then ended, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements (pages 128 to 216) give a true and fair view
of the consolidated financial position of the Group as at 31 December 2021 and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance
with the International Financial Reporting Standards (IFRS) and comply with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs)
and Swiss Auditing Standards. Our responsibilities under those provisions and standards are
further described in the “Auditor’s responsibilities for the audit of the consolidated financial
statements” section of our report.
We are independent of the Group in accordance with the provisions of Swiss law and the
requirements of the Swiss audit profession, as well as the International Code of Ethics for
Professional Accountants (including International Independence Standards) of the International
Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Our audit approach
OVERVIEW
Materiality
Audit scope
Key audit
matters
Overall Group materiality: EUR 20 million
We concluded full scope audit work at nine wholly owned Group companies in eight countries. Our
audit scope addressed over 87% of the Group's revenue and 86% of the Group’s assets. In addition,
specified procedures were performed on a further six Group companies in four countries representing
a further 2% of the Group's assets.
As key audit matters the following areas of focus have been identified:
•
• Recoverability of goodwill
Acquisition of the remaining shares of the joint ventures in the Middle East
Annual Report 2021 Financials
Report of the statutory auditor
218
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to
provide reasonable assurance that the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material
if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for
materiality, including the overall Group materiality for the consolidated financial statements as a
whole as set out in the table below. These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent of our audit procedures and
to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated
financial statements as a whole.
Overall Group materiality
EUR 20 million
Benchmark applied
Revenue
Rationale for the materiality
benchmark applied
We chose revenue as the benchmark as, in our view, it is the most appropriate
measure considering the Group’s current year’s result is impacted by effects
from purchase price accounting, transaction and acquisition-related costs
as well as restructuring costs. It is further a generally accepted benchmark.
We agreed with the Audit and Risk Committee that we would report to them misstatements
above EUR 2 million identified during our audit as well as any misstatements below that amount
which, in our view, warranted reporting for qualitative reasons.
Audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of
the Group, the accounting processes and controls, and the industry in which the Group operates.
At the end of 2021, the Group’s global operations are structured along the 4 segments, namely
Europe, Middle East and Africa (“MEA”), Asia Pacific (“APAC”) and Americas.
We identified nine wholly owned Group companies in eight countries for which, in our opinion, a
full scope audit was necessary because of their size or risk characteristics. For a further six Group
companies in four countries, specified procedures on selected account balances were performed
to increase audit comfort. In addition, on a rotational basis, we analysed the financial statements
of selected Group Companies for significant or unusual developments. None of the Group
companies excluded from our Group audit scope individually contributed more than 5% of the
Group’s revenue. Audit procedures were also performed by the Group audit team over certain
Group functions (including accounting for business combinations, taxation, treasury, certain
employee benefits and litigation) and Group consolidation.
All relevant subsidiaries of the Group are audited by local PwC firms. To ensure sufficient and
appropriate involvement of the Group auditor in the audit of the eight Group companies audited
by our component auditors abroad, we held conference calls with the respective audit teams
responsible for the audit during the different phases of the audit and also performed on a
selective basis a review of their work-papers. We discussed risks identified and challenged the
audit approach in response to the risks relevant to the respective components. Furthermore, we
Annual Report 2021 Financials
Report of the statutory auditor
219
obtained a memorandum of examination from our component auditors and assessed the results
and impact on the Group’s consolidated financial statements and challenged the component
auditor’s conclusion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
ACQUISITION OF THE REMAINING SHARES OF THE JOINT VENTURES IN THE MIDDLE EAST
Key audit matter
How our audit addressed the key audit matter
On 25 February 2021, the Group acquired the remaining 50% of the
shares of its two joint ventures in the Middle East (“the acquisition”)
from the joint venture partner Al Obeikan Group for Investment
Company CJS (“OIG”) for a consideration of €490.3 million. The fair
value of the consideration transferred consisted of €167.0 million
cash and 17,467,632 newly issued SIG ordinary shares with a fair value
of €323.3 million at the time of closing.
The fair value of the pre-existing
€230.9 million.
interest sold amounted to
The acquisition resulted in the recognition of goodwill of €518.4 million
and other intangible assets of €149.2 million. Furthermore, other
income of €48.8 million representing the gain on the pre-existing
interest in the joint ventures sold was recognised.
As of the acquisition date, all identifiable assets acquired, and liabilities
assumed were recognised and measured at their fair value at that
date.
The acquisition was deemed a key audit matter because the
assumptions used by Management as part of the purchase price
allocation, in particular the fair value determination of newly identified
intangible assets, acquired assets and assumed liabilities and the
pre-existing interest sold required a significant level of judgement by
Management.
Refer to Note 27 – Business Combination, Note 14 – Intangible
assets and Note 5.4 – Critical accounting judgements, estimates and
assumptions in the consolidated financial statements.
We audited whether the purchase price accounting was performed
in accordance with the provisions of IFRS 3 “Business Combinations”.
We read the underlying purchase agreement and agreed the cash and
shares payment to the underlying contracts.
• We compared the fair value of newly identified intangible assets,
acquired assets and assumed liabilities as outlined in the valuation
report of Management’s external expert with the consolidated
financial statements.
• We assessed the qualification and independence of Management’s
external expert to prepare the valuation report.
• We have assessed the process of the identification of assets acquired
and liabilities assumed through discussions with Management and
its external expert as well as the expertise of our valuation experts.
• With the involvement of our valuation experts, we further assessed
the appropriateness of the valuation models applied as well as
the technical and arithmetic correctness of the calculations in the
valuation report.
We evaluated the reasonableness of the key assumptions determined
by Management and its external expert in determining the fair value
of the acquired business and the pre-existing interest sold.
• We discussed the assumptions and valuation methods for the
fair value adjustments on assets and liabilities purchased with
Management, its external expert as well as the Audit and Risk
Committee.
• For newly identified intangible assets, we independently assessed
the assumptions made and valuation methods used.
• We assessed whether the
individual parameters, specifically
discount rate, long-term growth rate and control premium are
within reasonable ranges.
• We recalculated the fair value of the shares transferred at the time
of closing
• We corroborated management’s assumptions applied to derive the
fair value of the pre-existing interest sold.
As a result of our procedures, we determined that the conclusions
reached by Management with regards to the acquisition accounting is
reasonable and supportable.
Annual Report 2021 Financials
Report of the statutory auditor
220
RECOVERABILITY OF GOODWILL
Key audit matter
How our audit addressed the key audit matter
As per 31 December 2021, the carrying amount of Goodwill amounted
to €2,128.1 million.
We assessed whether the group of cash-generating units (CGUs)
identified are the appropriate.
The recoverable amount of the cash-generating units is calculated on
the basis of their value in use, applying discounted cash flow models.
The valuation of Goodwill is a key audit matter based on the magnitude
of the balance and inherent judgement involved in determining
the cash-generating units for impairment testing. Additionally, the
assumptions related to future cash flows and the determination of
discount rates and long-term growth rates require a significant level
of judgement by Management.
Refer to Note 14 – Intangible assets and Note 5.4 – Critical accounting
judgements, estimates and assumptions in the consolidated financial
statements.
We further assessed whether the allocation of goodwill to the
respective group of CGUs including the implication of the acquisition
of the remaining shares of the joint ventures in the Middle East on the
CGU determination is the appropriate basis for impairment testing.
With the involvement of our internal valuation experts, we assessed the
methodology used to perform the impairment test in accordance with
the provisions of IAS 36 and challenged and evaluated Management’s
value in use calculation for each group of CGUs.
This included an assessment of the appropriateness of the model used,
as well as challenging of the key assumptions made by Management.
• We evaluated the reasonableness of the discount rates, as
determined by Management, by assessing the cost of capital for the
Group, as well as considering territory specific factors.
• We challenged Management’s cash flow assumptions and sensitivity
analyses applied to such cash flows based on other internal forward-
looking documentation available and by benchmarking them against
external market data for the industry and respective regions.
• We
evaluated
the
forecast
of
Management’s
performing
look-back procedures and ensured the consistency of Management’s
cash flow assumptions by comparing it to the Group’s current 5-year
business plan as approved by the Board of Directors.
planning
model
accuracy
by
We further performed independent sensitivity analyses around
the key assumptions to ascertain the extent of change in those
assumptions that either individually or collectively would be required
for the goodwill to be impaired.
We also considered the market capitalisation of the Group in
comparison to the carrying amount of its consolidated equity.
As a result of our procedures, we determined that the conclusions
reached by Management with regards to the recoverability of the
carrying amount of goodwill is reasonable and supportable.
Other information in the annual report
The Board of Directors is responsible for the other information in the annual report. The other
information comprises all information included in the annual report, but does not include the
consolidated financial statements, the stand-alone financial statements and the remuneration
report of SIG Combibloc Group AG and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in
the annual report and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information in the annual report and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Annual Report 2021 Financials
Report of the statutory auditor
221
Responsibilities of the Board of Directors
for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial statements
that give a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such
internal control as the Board of Directors determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s responsibilities for the audit
of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law,
ISAs and Swiss Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Swiss law, ISAs and Swiss Auditing Standards, we exercise
professional judgment and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
Annual Report 2021 Financials
Report of the statutory auditor
222
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of
the Group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors or its relevant committee regarding, among other
matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we
have complied with relevant ethical requirements regarding independence, and communicate
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we
confirm that an internal control system exists which has been designed for the preparation of
consolidated financial statements according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers AG
Bruno Rossi
Audit expert
Auditor in charge
Manuela Baldisweiler
Audit expert
Basel, 24 February 2022
Annual Report 2021 Financials ► Financial statements
Financial statements
Financials
1
223
Financial statements
for the year ended 31 December 2021
SIG Combibloc Group AG
Income statement
Balance sheet
Notes
Proposal of the Board of Directors for the appropriation of the retained earnings
Proposal of the Board of Directors for the appropriation of the capital contribution reserve
Report of the statutory auditor on the audit of the financial statements
224
225
226
235
235
236
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
2
224
Income statement
(in CHF thousand)
Income from investments
Other income
Total income
Personnel expenses
Other operating expenses
Total operating expenses
Profit from operating activities
Finance income
Finance expenses
Profit before income tax
Income tax income
Profit for the period
Note
3.1
3.2
3.3
3.2
Year ended
31 Dec.
2021
Year ended
31 Dec.
2020
142,974.0
7,450.0
150,424.0
(6,626.7)
(7,862.3)
116,138.0
7,377.9
123,515.9
(13,225.7)
(7,924.7)
(14,489.0)
(21,150.4)
135,935.0
102,365.5
77.1
(4,679.9)
38.1
(291.5)
131,332.2
102,112.1
-
0.3
131,332.2
102,112.4
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
3
225
Note
3.4
3.5
As of
31 Dec.
2021
715.6
1,645.2
1,645.2
38,799.6
38,799.6
91.8
91.8
159.7
41,411.9
As of
31 Dec.
2020
512.3
7,865.2
7,865.2
-
-
11.2
11.2
388.5
8,777.2
3.6
2,740,202.9
2,443,789.8
2,740,202.9
2,443,789.8
2,781,614.8
2,452,567.0
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
690.6
577.2
113.4
789.0
789.0
6,093.8
6,093.8
3,057.6
10,631.0
1,689.9
1,689.9
1,689.9
1,161.9
1,070.6
91.3
18,322.1
18,322.1
3,151.9
3,151.9
2,937.0
25,572.9
5,423.6
5,423.6
5,423.6
12,320.9
30,996.5
3,375.2
2,425,353.6
2,425,353.6
340,618.8
209,286.6
131,332.2
(53.7)
3,200.5
2,209,198.0
2,209,198.0
209,286.6
107,174.2
102,112.4
(114.6)
2,769,293.9
2,421,570.5
2,781,614.8
2,452,567.0
Balance sheet
(in CHF thousand)
Cash and cash equivalents
Trade receivables
- Due from Group companies
Current interest-bearing receivables
- Due from Group companies
Other current receivables
- Due from third parties
Accrued income and prepaid expenses
Total current assets
Investments
Total non-current assets
Total assets
Trade payables
- Due to third parties
- Due to Group companies
Current interest-bearing liabilities
- Due to Group companies
Other current liabilities
- Due to third parties
Accrued expenses
Total current liabilities
Non-current liabilities
- Due to third parties
Total non-current liabilities
Total liabilities
Share capital
Legal reserves
- Capital contribution reserve
Retained earnings
- Profit brought forward
- Profit for the period
Treasury shares
Total shareholders’ equity
Total liabilities and shareholders’ equity
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
4
226
Notes
1
General information
SIG Combibloc Group AG ("SIG" or the "Company") is domiciled in Neuhausen am Rheinfall,
Switzerland and is listed on SIX Swiss Exchange. References to “Group“ are to the Company
and its consolidated subsidiaries.
2
Summary of significant accounting policies
The financial statements of the Company for the year ended 31 December 2021 have been
prepared in accordance with Swiss law. Where not prescribed by law, the significant
accounting and valuation policies applied are described below.
2.1
Exclusion of a cash flow statement and certain note disclosures
SIG Combibloc Group AG prepares its annual consolidated financial statements in line with
International Financial Reporting Standards (“IFRS”), a recognised standard. It further
includes a management report (Financial review) in its annual report. In accordance with
Swiss law (Art. 961d para 1 of the Swiss Code of Obligations (“CO”)), the Company has
therefore elected not to include in its financial statements a cash flow statement and a
management report.
2.2
Foreign currency translation
The Company maintains its accounting in Swiss Francs (CHF), which is also its functional
currency, and the balance sheet and income statement are also presented in this currency.
The exchange rates used for the balance sheet items are the closing rates as of 31 December
2021 and 31 December 2020. Balances denominated in foreign currencies are translated
into CHF as follows:
Investments expressed in a currency other than CHF are translated into CHF at the
exchange rate at the date of their acquisition. At the balance sheet date, such
investments are maintained at their historical exchange rate. Liabilities which are
economically linked to investments and expressed in a currency other than CHF are
maintained at their historical exchange rate at the end of the year.
All other monetary assets and liabilities expressed in a currency other than CHF are
translated into CHF at the exchange rate prevailing at the year end. All exchange
differences resulting from this translation are presented in the income statement. Any
unrealised exchange gains included therein are not considered significant.
Income and expenses denominated in foreign currencies are translated into CHF at the rate
at the transaction date.
The following significant exchange rates have been applied.
EUR to CHF
1.08142
1.07034
1.03310
1.08020
Average rate for the year
Spot rate as of
31 Dec.
2021
31 Dec.
2020
31 Dec.
2021
31 Dec.
2020
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
5
227
2.3
Investments
Investments are initially recognised at cost. Investments are analysed on an annual basis
for impairment indicators and are, if needed, adjusted to their recoverable amount.
2.4
Treasury shares
Own shares held by the Company are accounted for as treasury shares. Treasury shares are
initially recognised at acquisition cost and deducted from equity with no subsequent
remeasurement. If the treasury shares are disposed of, the resulting gain or loss is
recognised in the income statement.
3
Information relating to income statement and balance
sheet items
3.1
Income from investments
Income from investments consists of a dividend received from SIG Combibloc Holdings
S.à r.l. of CHF 142,974.0 thousand (CHF 116,138.0 thousand in the year ended 31 December
2020), which was mainly used to pay a dividend of CHF 141,758.8 thousand to the
shareholders in the year ended 31 December 2021 (a dividend of CHF 121,620.2 thousand
in the year ended 31 December 2020).
3.2 Other income and other operating expenses
Other operating income primarily consists of management fees charged to direct or indirect
subsidiaries. Other operating expenses primarily consist of fees paid to the Board of
Directors and consultancy costs.
3.3
Personnel expenses
Personnel expenses in the year ended 31 December 2020 included an amount of
CHF 5,664.4 thousand of termination benefits (including non-compete agreements) relating
to two former members of the Group Executive Board who left the Company in 2020. Their
terminations also resulted in the forfeiture of a number of performance share units (“PSUs”)
granted under the 2019 and 2020 share-based payments plans. The terminations have been
reflected in the measurement of the amount recognised as a share-based payment expense
(as part of personnel expenses). See also notes 3.11 and 4.3. No termination benefits were
recognised in the year ended 31 December 2021.
3.4
Trade receivables
Trade receivables due from Group companies as of 31 December 2021 and 31 December
2020 mainly consist of management fees charged to direct or indirect subsidiaries.
3.5 Current interest-bearing receivables
Current interest-bearing receivables due from Group companies for the year ended
31 December 2021 consist of an interest-bearing inter-company CHF loan due from
SIG Combibloc Services AG (see also note 3.6).
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
6
228
3.6
Investments
The following subsidiary is directly held by the Company.
Name and legal form
Registered office
Capital
Votes
Capital
Votes
As of 31 Dec. 2021
As of 31 Dec. 2020
SIG Combibloc Holdings S.à r.l.
7, rue Robert Stumper
L – 2557 Luxembourg
Grand Duchy of Luxembourg
100%
100%
100%
100%
On 25 February 2021, the Company acquired the remaining 50% of the shares of the Group’s
two joint ventures in the Middle East (“the acquisition”) from the joint venture partner
Al Obeikan Group for Investment Company CJS (“OIG”) for a consideration of €490.3 million
(CHF 543.1 million), split
(CHF 185.0 million) and
issued SIG ordinary shares with a fair value of €323.3 million
17,467,632 newly
(CHF 358.1 million) at the time of closing. The two former joint ventures (Al Obeikan
SIG Combibloc Company Ltd. in Saudi Arabia and SIG Combibloc FZCO in UAE) have thereby
become fully owned subsidiaries of the Group.
into cash of €167.0 million
The new SIG shares were issued out of authorised share capital on 22 February 2021 under
exclusion of the subscription rights of the existing shareholders (see note 3.12).
The shares of the former joint ventures were subsequently transferred by the Company to
SIG Combibloc Services AG against a loan receivable of €490.3 million (CHF 538.4 million),
which has been partly offset by an interest-bearing inter-company CHF loan from
SIG Combibloc Services AG. See notes 3.5 and 3.8.
The subsidiaries indirectly held by the Company are listed in note 26 of the consolidated
financial statements of the Company for the year ended 31 December 2021.
3.7
Trade payables
Trade payables due to Group companies as of 31 December 2021 and 31 December 2020
mainly relate to intra-group recharges.
3.8 Current interest-bearing liabilities
Current interest-bearing liabilities due to Group companies for the year ended 31 December
2020 included an interest-bearing inter-company CHF loan and an interest-bearing inter-
company EUR loan from SIG Combibloc Services AG. The interest-bearing inter-company
EUR loan was partially repaid during 2021, while the interest-bearing inter-company
CHF loan was used to offset a loan receivable. See note 3.6.
3.9 Other current liabilities
For the year ended 31 December 2021, other current liabilities include an amount of
CHF 2,418.5 thousand for the remaining termination benefits (including non-compete
agreements) relating to two former members of the Group Executive Board who left the
Company in 2020. See notes 3.3 and 3.11.
Other current liabilities for the year ended 31 December 2021 also include an amount of
CHF 3,024.6 thousand for liabilities arising due to share-based payment plans and
arrangements (granted in 2019) for certain members of management and Board of
Directors. See also note 3.11. For additional
information about these plans and
arrangements, see note 31 of the consolidated financial statements of the Company for the
year ended 31 December 2021.
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
7
229
For the year ended 31 December 2020, other current liabilities included an amount of
CHF 3,010.7 thousand for the then current portion of termination benefits relating to two
former members of the Group Executive Board who left the Company in 2020. See notes
3.3 and 3.11.
3.10 Accrued expenses
Accrued expenses for the year ended 31 December 2021 primarily consist of employee
benefit obligations of CHF 2,782.1 thousand (CHF 2,365.8 thousand as of 31 December
2020). There were no payments outstanding to the pension funds as of 31 December 2021
or 31 December 2020.
3.11 Non-current liabilities
For the year ended 31 December 2021, non-current liabilities primarily consist of liabilities
arising due to share-based payment plans (granted in 2020 and 2021) for certain members
of management. See also note 3.9 above and note 31 of the consolidated financial
statements of the Company for the year ended 31 December 2021.
For the year ended 31 December 2020, non-current liabilities included an amount of
CHF 2,326.1 thousand for the then estimated non-current portion of termination benefits
(including non-compete agreements) relating to two former members of the Group
Executive Board who left the Company in 2020 (see also notes 3.3 and 3.9). The remaining
balance primarily consisted of liabilities arising due to share-based payment plans and
arrangements (granted in 2019 and 2020) for certain members of management and Board
of Directors (see also note 3.9).
3.12 Share capital
As of 31 December 2021, the share capital consists of 337,520,872 shares, issued and fully
paid, representing CHF 3.4 million of share capital (320,053,240 shares, issued and fully paid,
representing CHF 3.2 million of share capital as of 31 December 2020).
The below table provides an overview of the shares in issue.
Number of shares
Balance as of 1 January 2020
Balance as of 1 January 2021
Issue of shares on 22 February 2021
Balance as of 31 December 2021
Total shares
320,053,240
320,053,240
17,467,632
337,520,872
Issue of shares out of authorised share capital
On 22 February 2021, the Company issued 17,467,632 ordinary shares with a nominal value
of CHF 0.01 per share out of authorised share capital under exclusion of the subscription
rights of the existing shareholders. SIG Combibloc Services AG acquired the newly issued
shares at nominal value for CHF 174.7 thousand, paid in cash. The Company subsequently
reacquired these shares, also at nominal value. The Company transferred the
17,467,632 newly issued shares to OIG on 25 February 2021 as part of the consideration for
the remaining shares of the joint ventures in the Middle East. The difference between the
nominal value of the issued shares and the fair value of the shares at the acquisition date is
presented as part of the legal reserves. See further note 3.6 above and note 27 of the
consolidated financial statements of the Company for the year ended 31 December 2021.
Annual Report 2021
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Financials ► Financial statements
Financial statements
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230
Authorised share capital and conditional share capital
The Company has authorised share capital of CHF 675,041.74 as of 31 December 2021
(CHF 640,106.48 as of 31 December 2020) and conditional share capital of CHF 640,106.48
(CHF 640,106.48 as of 31 December 2020).
The Board of Directors’ authority to increase the share capital out of authorised share
capital is as of 31 December 2021 limited until 21 April 2023. Capital increases from
authorised and conditional share capital are mutually exclusive, i.e. they are subject to a
single combined limit, and may not exceed 67,504,174 shares, equalling CHF 675,041.74 or
20% of the existing share capital (of which only 64,010,648 shares can be created out of
conditional share capital). However, the number of shares issued from authorised and
conditional share capital under the exclusion of subscription and advance subscription
rights, respectively, is limited until 21 April 2023 to a single combined maximum of
33,752,087 shares, equalling CHF 337,520.87 or 10% of existing share capital.
The authorised share capital can be used for various purposes. This creates a flexibility to
seek additional capital, if required, for investment and acquisition opportunities or to take
advantage of favourable market conditions to further improve the Group’s capital position.
The conditional share capital is divided into CHF 160,026.62 for employee benefit plans and
CHF 480,079.86 for equity-linked financing instruments as of 31 December 2021 (also as of
31 December 2020).
See note 4.4 for information about shares to be issued out of the Company’s authorised
share capital and used in connection with the acquisition of Scholle IPN, which is expected
to close in the second or third quarter of 2022.
3.13 Capital contribution reserve
The capital contribution reserve consists of the following:
(In CHF thousand)
Capital contribution reserve as of 1 January 2020
Dividend payment of CHF 0.38 per share out of the capital contribution reserve
Dividend not paid on treasury shares held by the Company
Capital contribution reserve as of 31 December 2020
Capital contribution reserve as of 1 January 2021
Additional paid-in capital from issue of shares
Dividend payment of CHF 0.42 per share out of the capital contribution reserve
Dividend not paid on treasury shares held by the Company
Capital contribution reserve as of 31 December 2021
Withholding tax exempt distributions from the capital contribution reserve of Swiss listed
companies are generally only permissible to the extent that at least the same amount is
distributed out of other reserves. These provisions do not apply to repayments of “foreign
capital contribution reserves”. The Company has as of 31 December 2021, a capital
contribution reserve of CHF 2,425.4 million (CHF 2,209.2 million as of 31 December 2020),
which is confirmed by the Swiss Federal Tax Administration. Foreign capital contribution
reserves included in the capital contribution reserve amount to CHF 1,400.9 million
(CHF 1,184.7 million as of 31 December 2020). The whole dividend paid in 2020 and 2021
was distributed out of foreign capital contribution reserves. The whole dividend to be
proposed to the Annual General Meeting in April 2022 is expected to be distributed out of
foreign capital contribution reserves.
Annual Report 2021
Balance
2,330,816.2
(121,620.2)
2.0
2,209,198.0
2,209,198.0
357,911.8
(141,758.8)
2.6
2,425,353.6
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
9
231
3.14 Treasury shares
The movements in treasury shares during the year were as follows:
(Number of treasury shares or in CHF thousand)
Number
Amount
Number
Amount
2021
2020
Balance as of 1 January
Purchases
Transfer under share-based payment plans
and arrangements
Balance as of 31 December
6,274
26,739
(114.6)
(670.4)
6,158
40,000
(77.1)
(665.1)
(30,583)
2,430
731.3
(53.7)
(39,884)
627.6
6,274
(114.6)
No treasury shares are held by the Company’s subsidiaries or joint venture.
4
Other information
4.1
Employees
The number of full-time equivalent employees in 2021 and 2020 did not exceed ten on an
annual average basis.
4.2
Significant shareholders
According to the disclosure notifications reported to the Company and published by the
Company via the electronic publishing platform of SIX Swiss Exchange, the following
shareholders had holdings of 3% or more of the voting rights of the Company as of
31 December 2021 and 2020.
Significant shareholders
Haldor Foundation2
Fahad al Obeikan3
Fahad al Obeikan4, Andreas Boy and André Rosenstock
Norges Bank (the Central Bank of Norway)
BlackRock Inc (Mother company)
UBS Fund Management (Switzerland) AG
Ameriprise Financial, Inc.
Voting rights as of1
31 Dec. 2021
31 Dec. 2020
9.95%
-
5.18%
4.96%
3.57%/0.01%
3.18%
3.17%/0.002%
6.00%
5.46%
-
5.94%
3.57/0.01%%
3.18%
3.042%
1 When comparing the percentages of voting rights held as of 31 December 2020 and as of 31 December 2021, it should be noted that the number of the Company’s
outstanding shares were increased in February 2021 (see note 3.4).
The direct shareholder is Winder Investment Pte Ltd.
As of 31 December 2020, the voting rights were reported as beneficially owned by Fahad al Obeikan, Riyadh, Saudi Arabia (with the direct shareholder being
Al Obeikan Printing and Packaging Company CJS,). However, these shares were not transferred by the Company until the completion of the Group’s acquisition of
the remaining shares in its two joint ventures in the Middle East on 25 February 2021. See note 3.6.
The direct shareholder with respect to Fahad al Obeikan as of 31 December 2021 is Al Obeikan Group for Investment Company CJS.
2
3
4
For further details about the significant shareholders as of 31 December 2021, refer to
section 1.2 of the Corporate Governance Report. To the best of the Company's knowledge,
no other shareholder held 3% or more of SIG Combibloc Group AG's total share capital and
voting rights as of 31 December 2021 and 2020, respectively.
Annual Report 2021
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Financial statements
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232
4.3
Shares held directly or indirectly by the Board of Directors and
the Group Executive Board, including any related parties
As of 31 December 2021, the members of the Board of Directors as of that date directly and
indirectly held the following number of shares and restricted share units.
Board of Directors
Andreas Umbach
Matthias Währen
Colleen Goggins
Werner Bauer
Wah-Hui Chu
Mariel Hoch
Abdallah al Obeikan3
Martine Snels
Nigel Wright
Total
Number of directly
or beneficially
held shares1, 2, 3
Unvested restricted
share units2
Total
shareholdings
90,121
30,206
28,382
55,495
41,132
16,120
1,853
1,853
-
265,162
-
-
7,287
-
6,949
-
-
-
-
90,121
30,206
35,669
55,495
48,081
16,120
1,853
1,853
-
14,236
279,398
1 Ordinary registered shares of SIG Combibloc Group AG, including blocked shares.
2
3
The members of the Board of Directors receive 40% of their total compensation in SIG shares that are blocked for three years. Prior to 2020, a smaller part of the
share-based payment compensation was paid out in restricted share units (“RSUs”) with a three-year vesting period. Further details about the compensation of the
Board of Directors, including terms, number and value of instruments granted, are included in the Compensation Report and in note 31 of the consolidated financial
statements included elsewhere in this Annual Report.
Abdallah al Obeikan also indirectly held 1,827,110 shares via his shareholding in Al Obeikan Group for Investment Company CJS.
Abdallah al Obeikan, Chief Executive Officer of OIG and, prior to the acquisition, Chief
Executive Officer of the Group’s former joint ventures in the Middle East, was elected to
SIG’s Board of Directors at the Annual General Meeting in April 2021. Martine Snels was
elected as a new member of SIG’s Board of Directors at the Annual General Meeting in April
2021.
As of 31 December 2020, the members of the Board of Directors as of that date directly held
the following number of shares and restricted share units.
Board of Directors
Andreas Umbach
Matthias Währen
Colleen Goggins
Werner Bauer
Wah-Hui Chu
Mariel Hoch
Nigel Wright
Total
Number of directly
or beneficially
held shares1, 2
Unvested restricted
share units2
Total
shareholdings
81,026
26,483
24,826
51,939
37,741
12,564
-
234,579
-
-
7,287
-
6,949
-
-
14,236
81,026
26,483
32,113
51,939
44,690
12,564
-
248,815
1 Ordinary registered shares of SIG Combibloc Group AG, including blocked shares.
2
The members of the Board of Directors receive 40% of their total compensation in SIG shares that are blocked for three years. Prior to 2020, a smaller part of the
share-based payment compensation was paid out in restricted share units (“RSUs”) with a three-year vesting period. Further details about the compensation of the
Board of Directors, including terms, number and value of instruments granted, are included in the Compensation Report and in note 31 of the consolidated financial
statements included elsewhere in this Annual Report.
Annual Report 2021
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Financials ► Financial statements
Financial statements
Financials
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233
As of 31 December 2021 and 31 December 2020, the members of the Group Executive
Board as of these dates held the following number of shares and performance share units.
Group Executive Board
Samuel Sigrist,
Chief Executive Officer
Rolf Stangl
Frank Herzog
Ian Wood
Abdelghany Eladib
Lawrence Fok
Martin Herrenbrück
José Matthijsse
Ricardo Rodriguez
Total
As of 31 Dec. 2021
As of 31 Dec. 2020
Number of
directly or
beneficially
held shares1
Unvested
performance
share units2
Number of
directly or
beneficially
held shares1
Unvested
performance
share units2
200,063
-
-
75,000
7,420
188,572
-
-
250,002
194,901
-
33,618
119,450
13,447
49,705
-
13,447
97,491
721,057
522,059
200,063
-
-
75,000
-
268,572
50,000
-
250,002
843,637
135,510
56,200
-
92,556
-
77,320
15,807
-
77,320
454,713
1 Ordinary registered shares of SIG Combibloc Group AG.
2 Members of the Group Executive Board participate in a share-based long-term incentive plan under which they are granted performance share units (“PSUs”) on an
annual basis. One PSU represents the contingent right to receive one SIG share. Vesting occurs three years after the grant date. The exact number of PSUs that vests
depends on the long-term performance of SIG during the vesting period. Further details about the incentive plans, including terms, number and value of instruments
granted, are included in the Compensation Report and in note 31 of the consolidated financial statements included elsewhere in this Annual Report.
The Company has implemented or initiated organisational changes in its Group Executive
Board in both the year ended 31 December 2021 and the year ended 31 December 2020
(see also note 3.3).
Samuel Sigrist (Chief Financial Officer until 31 December 2020) was appointed Chief
Executive Officer effective 1 January 2021 following the voluntary departure of the former
Chief Executive Officer (Rolf Stangl) on 31 December 2020. On 1 January 2021, Frank Herzog
was appointed as Chief Financial Officer. The position of Chief Market Officer (formerly held
by Markus Boehm) was eliminated in August 2020. Martin Herrenbrück, who held the
position of President and General Manager of Europe, voluntarily left the Group as of
31 December 2020. José Matthijsse took over his position as President and General Manager
of Europe effective 1 February 2021.
Abdelghany Eladib took on the newly created role of President and General Manager of
Middle East and Africa effective 28 February 2021.
Lawrence Fok announced on 29 October 2021 that he would leave his role as President and
General Manager of Asia Pacific as of 31 December 2021. He will leave the Group in 2022,
after a transition period. Due to the Group’s growth in Asia Pacific, his role in the Group
Executive Board has been taken over by two executives with effect from 1 January 2022. Fan
Lidong has taken on the newly created role of President and General Manager of Asia Pacific
North. Angela Lu has taken on the newly created role of President and General Manager of
Asia Pacific South.
Suzanne Verzijden joined the Group Executive Board as Chief People and Culture Officer,
effective as of 1 January 2022.
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
12
234
4.4 Other
Announcement of agreement to acquire Evergreen’s fresh carton business in
Asia Pacific
The Group announced on 5 January 2022 that it has entered into an agreement to acquire
Evergreen’s fresh carton business in Asia Pacific (“Evergreen Asia”) from Evergreen
Packaging International LLC. The acquisition is expected to close in the second or third
quarter of 2022. The closing is subject to customary closing conditions, including approvals
from regulatory authorities.
The consideration for the shares of the Evergreen entities will be based on an enterprise
value of $335 million (subject to customary closing adjustments) on a cash-free, debt-free
basis and will be paid in cash at the closing of the acquisition. The final consideration will be
determined at the time of the completion settlement. The acquisition will initially be
financed through a bridge facility of €300 million with a maturity of up to 18 months, which
will be refinanced with long-term financing arrangements.
See note 4 of the consolidated financial statements of the Company for the year ended
31 December 2021 for additional details about the acquisition.
Announcement of agreement to acquire Scholle IPN
The Group announced on 1 February 2022 that it has entered into an agreement to acquire
100% of Scholle IPN from CLIL Holding B.V.. Scholle IPN is a leading innovator of sustainable
packaging systems and solutions for food and beverages. It is the global leader in bag-in-
box and number two in spouted pouches. The acquisition is expected to close in the second
or third quarter of 2022. The closing is subject to customary closing conditions, including
approvals from regulatory authorities.
The consideration for the shares of Scholle IPN will be based on an enterprise value of
€1.36 billion (at an USD/EUR exchange rate of 1.12862) and an estimated net debt position
of €310 million as of 31 December 2021, reflecting an equity value of €1.05 billion.
The consideration will be split into cash of €370 million (subject to customary closing
adjustments) and 33.75 million newly issued shares, to be transferred at the closing of the
acquisition, and a contingent consideration. The new shares will be issued out of authorised
share capital. The existing debt of Scholle IPN will be refinanced at closing. The final
consideration, excluding the contingent consideration, will be determined at the time
of the completion settlement. The contingent consideration depends on Scholle IPN
outperforming the top-end of the Group’s mid-term revenue growth guidance of 4-6% per
year for the years ending 31 December 2023, 2024 and 2025, and would be paid in cash in
three annual instalments of up to €89 million ($100 million) per year. The consideration to
be paid in cash at closing and the repayment of existing debt will be financed via a bridge
facility with a maturity of up to 18 months, which is expected to be refinanced through
a combination of
€200-250 million.
long-term debt and a share capital
increase of approximately
The current owner of Scholle IPN, Laurens Last, will become the largest single shareholder
in SIG after closing of the acquisition with an approximate shareholding of 9.1% (with a lock-
up period of 18 to 24 months). He will also be nominated for election to the Board of
Directors of SIG at the forthcoming Annual General Meeting on 7 April 2022. Ross Bushnell,
CEO of Scholle IPN, will join SIG’s Group Executive Board subject to and as of closing of the
acquisition.
See note 4 of the consolidated financial statements of the Company for the year ended
31 December 2021 for additional details about the acquisition.
Annual Report 2021
Annual Report 2021
Financials ► Financial statements
Financial statements
Financials
13
235
COVID-19
Management evaluates on an ongoing basis how the effects of COVID-19 impact the Group’s
financial position and performance. The progress of the business during the pandemic has
shown that the Group is well placed to withstand the effects of COVID-19 due to its role in
the supply chain for essential food and beverages and its broad geographic reach. As the
Group and its customers are in an industry that assures the distribution of essential food
and beverages, the Group overall has not been, and is currently not, significantly impacted
by the COVID-19 pandemic. Significant judgements are involved regarding the assessment
of the impacts of COVID-19 on the global economy. New facts and circumstances, such as
supply chain disruptions, new mutations of the virus and more restrictive quarantine rules,
may lead to adjustments of management’s current estimates and assumptions.
Other remarks
There have been no events subsequent to 31 December 2021 that would require an
adjustment to or disclosure in these financial statements except for the disclosures above
regarding the planned acquisitions of Evergreen Asia and Scholle IPN and in note 4.3 relating
to organisational changes in the Group Executive Board effective as of 1 January 2022.
There are no further items to disclose according to Art. 959c of Swiss Code of Obligations.
Proposal of the Board of Directors for the appropriation of the
retained earnings
(In CHF thousand)
Profit brought forward from previous period
Profit for the period
Retained earnings at the end of the period
As of
31 Dec.
2021
209,286.6
131,332.2
340,618.8
As of
31 Dec.
2020
107,174.2
102,112.4
209,286.6
Retained earnings to be carried forward
340,618.8
209,286.6
The Board of Directors proposes to the Annual General Meeting to be held on 7 April 2022
to carry forward retained earnings of CHF 340,618.8 thousand.
Proposal of the Board of Directors for the appropriation of the capital
contribution reserve
(In CHF thousand)
Capital contribution reserve
Additional paid-in capital from issue of shares
Proposed dividend of CHF 0.45 per share (2021: payment of CHF 0.42 per
share) out of the capital contribution reserve
Dividends not paid on treasury shares held by the Company
As of
31 Dec.
2021
As of
31 Dec.
2020
2,425,353.6
-
2,209,198.0
357,911.8
(169,884.4)
-
(141,758.8)
2.6
Capital contribution reserve carried forward after cash dividend
2,255,469.2
2,425,353.6
Provided that the proposal of the Board of Directors is approved by the Annual General
Meeting to be held on 7 April 2022, the dividend will amount to CHF 0.45 per share and is
expected to be paid out of the Company’s foreign capital contribution reserve. Dividends
are not paid on treasury shares.
Annual Report 2021
Annual Report 2021
Financials
Report of the statutory auditor
236
REPORT OF THE STATUTORY AUDITOR
to the General Meeting of SIG Combibloc Group AG
Neuhausen am Rheinfall
Report on the audit of the financial statements
Opinion
We have audited the financial statements of SIG Combibloc Group AG, which comprise the income
statement for the year ended 31 December 2021, the balance sheet as at 31 December 2021,
and notes, including a summary of significant accounting policies. In our opinion, the financial
statements (pages 223 to 235) as at 31 December 2021 comply with Swiss law and the company’s
articles of incorporation.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our
responsibilities under those provisions and standards are further described in the “Auditor’s
responsibilities for the audit of the financial statements” section of our report.
We are independent of the entity in accordance with the provisions of Swiss law and the
requirements of the Swiss audit profession and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Our audit approach
OVERVIEW
Overall materiality: CHF 13 million
Materiality
Audit scope
We tailored the scope of our audit in order to perform sufficient work to
enable us to provide an opinion on the financial statements as a whole,
taking into account the structure of the entity, the accounting processes and
controls, and the industry in which the entity operates.
Key audit
matters
We have determined that there are no key audit matters to communicate
in our report.
Annual Report 2021 Financials
Report of the statutory auditor
237
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion
aims to provide reasonable assurance that the financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material
if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for
materiality, including the overall materiality for the financial statements as a whole as set out
in the table below. These, together with qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent of our audit procedures and to evaluate
the effect of misstatements, both individually and in aggregate, on the financial statements as
a whole.
Overall materiality
CHF 13 million
Benchmark applied
Net assets
Rationale for the materiality
benchmark applied
We chose net assets as the benchmark because it is a relevant and generally
accepted measure for materiality considerations relating to a holding
company.
Audit scope
We designed our audit by determining materiality and assessing the risks of material
misstatement in the financial statements. In particular, we considered where subjective
judgements were made; for example, in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently uncertain. As in all of
our audits, we also addressed the risk of management override of internal controls, including
among other matters consideration of whether there was evidence of bias that represented a
risk of material misstatement due to fraud.
Report on key audit matters based on the circular 1/2015
of the Federal Audit Oversight Authority
We have determined that there are no key audit matters to communicate in our report.
Responsibilities of the Board of Directors for the financial statements
The Board of Directors is responsible for the preparation of the financial statements in
accordance with the provisions of Swiss law and the company’s articles of incorporation,
and for such internal control as the Board of Directors determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the
entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Board of Directors either
intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so.
Annual Report 2021 Financials
Report of the statutory auditor
238
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with Swiss law and Swiss Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise
professional judgment and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the entity’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the entity to cease to continue as a going concern.
We communicate with the Board of Directors or its relevant committee regarding, among other
matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we
have complied with relevant ethical requirements regarding independence, and communicate
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we
determine those matters that were of most significance in the audit of the financial statements
of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Annual Report 2021 Financials
Report of the statutory auditor
239
Report on other legal and regulatory requirements
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we
confirm that an internal control system exists which has been designed for the preparation of
financial statements according to the instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings and reserves complies
with Swiss law and the company’s articles of incorporation. We recommend that the financial
statements submitted to you be approved.
PricewaterhouseCoopers AG
Bruno Rossi
Audit expert
Auditor in charge
Manuela Baldisweiler
Audit expert
Basel, 24 February 2022
Annual Report 2021 240
CORPORATE
RESPONSIBILITY
REPORT
THE WAY BEYOND GOOD
241 CR strategy and governance
263 Approach and performance
337 Performance summary
344 About our CR reporting
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
241
STRATEGY AND
GOVERNANCE
242 Introduction to our CR reporting
245 Responsibility built in
252 Driving the net positive agenda
255 Our contribution to the
United Nations Sustainable
Development Goals
257 Listening and responding
to stakeholders
259 Our priorities
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Introduction to our CR reporting
242
INTRODUCTION
TO OUR CR REPORTING
This year, we have included in-depth reporting
on The Way Beyond Good and corporate
responsibility (CR) within our Annual Report
for the first time in response to growing
interest from investors in environmental,
social and governance (ESG) topics.
Key elements of our approach are included
throughout relevant sections of the Annual
Report. In this CR Report, we provide more
detailed information on our approach to
ESG topics in accordance with the Global
Reporting Initiative (GRI) Standards:
Core option. It covers CR governance and
describes our management approach,
performance and targets for our most
material environmental and social issues.
Details on our materiality process and reporting boundaries can be found on > page 259 and an
index of conformance with the GRI Standards starts on > page 349.
Scope of our CR reporting
Unless otherwise stated, data in this CR Report covers the 2021 calendar year and all our fully-
owned global operations – including for the first time our newly opened second production site
in China and our former joint ventures in the Middle East and Africa.
Data includes our production plant in Melbourne (Australia), as well as performance relevant to
the plant's production volumes which moved to other plants after production of aseptic cartons
ceased in Melbourne in mid 2021. It excludes our paper mill in New Zealand, which was sold in
June 2021, and our joint venture in Japan.
Assurance
Data points on key performance indicators related to our material CR topics
(summarised on > page 338) have been externally assured with limited assurance
by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft. See their
assurance statement on > page 362.
Key for icons
Specific achievements where
SIG is an industry leader are
highlighted with this icon.
Key challenges are signposted
with this icon.
We want to
hear from you
We welcome stakeholder feedback on our
CR approach, performance and reporting.
Please contact Ingo Büttgen, Head of Corporate
Communication, at waybeyondgood@sig.biz.
Annual Report 2021
Corporate Responsibility Report
Strategy and governance
Introduction to our CR reporting
243
Reporting frameworks and additional disclosures
We align our CR reporting and ESG
disclosures with recognised external
frameworks, including:
SIG supports the SDGs
• Global Reporting Initiative (GRI): We report in accordance with the GRI Standards: Core
option. Our last full GRI report was published in 2021 for the 2020 reporting year, and we
have now moved from a biennial to an annual reporting cycle for our GRI reporting.
• United Nations Global Compact: This report acts as our Communication on Progress in
relation to the 10 principles of the United Nations Global Compact (see > page 345).
• United Nations Sustainable Development Goals (SDGs): We describe how we are contri-
buting to the SDGs (see > page 255) and we highlight relevant SDGs throughout this report.
• Greenhouse Gas Protocol: Our greenhouse gas emissions are reported in accordance with
the Greenhouse Gas Protocol (see our basis for reporting on > page 359).
• CDP: We disclose detailed information for investors on our management and performance
on climate issues and, for the first time in 2021, on forests through the CDP.
• EcoVadis: We submit extensive information to support our annual assessment by EcoVadis
for participating customers.
• SEDEX: All our production plants successfully completed SEDEX Members Ethical Trade
Audits in 2021.
• Dow Jones Sustainability Indices (DJSI): We responded to the S&P Global Corporate
Sustainability Assessment survey for an investor audience for the first time this year.
• Task Force on Climate-related Financial Disclosures (TCFD): We are working to integrate
the elements of the TCFD framework, including scenario analysis, in our public reporting
by 2023.
• EU Taxonomy: We are working to understand how our activities align with the definitions set
out in the new EU Taxonomy.
ESG website and policy manual
We have further enhanced disclosure this year by publishing detailed policies, as well as
public commitments, on ESG topics on our website. For each topic, we explain why it is
material for SIG, state what our commitment is, and set out our policy and approach. This
external summary is supported by an in-depth internal ESG Policy Manual to guide our
approach across the business.
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Introduction to our CR reporting
244
External recognition for CR performance and disclosure
CDP Supplier Engagement
Leaderboard:
SIG was again named by the CDP
as a leader in taking action to
measure and reduce climate risk
within the supply chain.
SXI Switzerland
Sustainability 25® Index
We joined the SXI index in 2021,
ranking SIG in the top 25 most
sustainable companies listed on the
SIX Swiss exchange based on a
third-party assessment.
Dow Jones
Sustainability Indices (DJSI)
We responded to the S&P Global
Corporate Sustainability Assessment
survey for the first time this year and scored
in the top quartile for our industry.
EcoVadis Platinum
Our Platinum rating from EcoVadis
again puts us in the top 1%
of businesses participating in
its latest sustainability assessment.
MSCI AA
Our AA rating from MSCI places SIG
as a leader in the industry
on ESG criteria.
Sustainalytics
We further improved our ESG
Risk Rating score from Sustainalytics
this year from 18.8 to 13.4 out of 100,
positioning SIG as low-risk for investors.
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245
RESPONSIBILITY BUILT IN
Our purpose and The Way Beyond Good commitments
are built into our business strategy – our Corporate
Compass – and the way we do business.
Strategy
Our Corporate Compass (see > page 34) guides our business decisions at every level.
SIG’s purpose – working in partnership with our customers to bring food products to consumers
around the world in a safe, sustainable and affordable way – is at the core of this strategy.
Our commitment to go Way Beyond Good – to help shape a more sustainable food system
through packaging solutions that deliver a net positive outcome for both people and planet –
is also embedded in the Corporate Compass and supports our business priorities on growth,
customer and people.
The Way Beyond Good encompasses four action areas: Forest+, Climate+,
Resource+ and Food+. These areas are interconnected. Each nurtures the
others and together they will produce sustainable, positive impact – for
the environment, society and our business.
Our focus on sustainable innovation drives progress in all four of these
areas. And our long-standing commitment to responsible culture
underpins our Corporate Compass and The Way Beyond Good – from
developing a diverse and talented team and keeping our people safe
to sourcing responsibly, managing environmental impacts, supporting
communities and upholding high ethical standards.
See > page 40 for more on our strategy.
OUR VALUES
Our values underpin everything we do.
• Leadership
• Accountability
• Quality
•
Integrity
• Performance
• Pride
• Collaboration
• Feedback
Specific targets for 2025 and beyond on each of our material social and environmental issues
provide a roadmap on The Way Beyond Good. See > page 340 for a summary of these targets
and our progress in 2021.
Embedding corporate responsibility in core business processes
Corporate responsibility (CR) is built into the way we do all aspects of our business. For example:
• Solutions selling – The sustainability credentials of our packaging solutions are an increasingly
important selling point for customers. Our sales teams are trained to make sustainability part
of every conversation with our customers. We include our SIGNATURE portfolio and other
sustainable innovations for our packs, such as our paper straw solutions, in our marketing
globally. We also engage with customers on how our technical service upgrades can help
them improve the sustainability of their factories through our Fill Beyond Good programme.
• Product innovation – The Way Beyond Good ambitions are driving specific sustainable
innovation workstreams and environmental performance is one of the core value drivers for
all our product innovation, alongside product safety and commercial considerations.
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246
• Manufacturing – The safety of our people and our products is critical to our manufacturing
operations and quality controls, as is managing environmental impacts from production.
• Procurement – Working with responsible suppliers and sourcing raw materials from
responsibly managed resources is central to procurement at SIG and forms part of our
training for everyone involved in this function.
• Human resources – Our Human Resources strategy to foster a winning team by empowering
our people to always believe in more is closely aligned with our targets to engage and develop
employees, and promote diversity, equity and inclusion as part of our responsible culture.
CR is also integrated in employee engagement through The Way Beyond Good engagement
programme and regular internal communications on CR-related topics.
• Remuneration – Our Short-Term Incentive Plan for members of our Group Executive Board,
as well as managers and experts with a variable income component, includes a measure
linked to a third-party assessment of our ESG performance by EcoVadis.
• Investor relations – ESG topics are increasingly important in the investment community. We
are strengthening our engagement with investors on these topics through ESG conferences.
We have also created a dedicated space on our website where we have published detailed
policies and commitments on specific ESG topics to enhance disclosure. SIG has continued to
score well in recognised ESG ratings (see > page 244) and we have maintained sustainability-
linked loan facilities (linked to our EcoVadis score and reductions in Scope 1 and 2 greenhouse
gas emissions).
• Risk management – We are working to ensure that our most material CR risks – including
climate-related risks (see > page 275) – are fully integrated into our annual corporate risk
management process, which assesses risks based on potential financial and reputational
implications for the business. CR topics are integral to several of the main business risks
identified in our latest corporate risk assessment (see below). See > page 71 for more on
our corporate risk management. Our approach to managing CR risks is outlined in the
relevant sections of this report. Each key risk has an owner at executive management level
who is responsible for the implementation of risk management measures in their area
of responsibility, as well as a mitigation action owner within the relevant global function
supported by regional teams to ensure local implementation.
Key business risks related to CR topics
Environment – risks of environmental regulations on recycling of beverage cartons,
aseptic carton packaging systems, closures, straws or raw materials; shift in public opinion
of carton packaging.
Supply – risks of disruptions in the supply chain or slowdowns, strikes or similar employee
actions, resulting in the inability to supply our customers.
Compliance – risks of non-compliance with applicable laws, regulations and internal
policies in areas such as the environment, health and safety, anti-harassment, tax, fraud/
embezzlement, unfair competition, insider trading, money laundering, employment.
Information security – risks of hacking and breach of data privacy.
Quality – risks of supplying faulty products or non-compliance with product and
safety regulations.
Human resources – risks of loss of key personnel, inability to attract new talent
and inability to drive diversity and inclusion.
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Governance
Ultimate accountability for our performance and progress on The Way Beyond Good commitments
lies with our CEO and Group Executive Board (GEB).
Every GEB meeting includes standing items on responsibility topics. GEB members sit on our
Responsibility Steering Group (RSG) together with senior representatives of key functions and
each region. The GEB also engages directly with our independent Responsibility Advisory Group
to gain valuable external input (see > page 248).
Each of The Way Beyond Good action areas and enablers is owned by a member of the RSG who
is accountable for setting stretching goals and delivering progress through targeted workstreams.
Responsibility leaders from relevant functions and regions are responsible for implementing
The Way Beyond Good targets, with support from relevant experts across the business.
In 2021, we introduced a measure related to ESG performance – linked to our rating in the annual
third-party EcoVadis assessment – in our Short-Term Incentive Plan, which covers GEB members
as well as all managers and experts worldwide with a variable income component.
The RSG meets twice a year to review progress towards The Way Beyond Good commitments
and ensure alignment and collaboration across the business.
RESPONSIBILITY GOVERNANCE STRUCTURE
Group Executive Board (GEB)
Role: Accountable for Responsibility Roadmap
Responsibility Steering Group (RSG)
Role: Ensure alignment and cross-functional collaboration in the implementation
of SIG's sustainability goals on The Way Beyond Good.
Chair: Director Corporate Responsibility
Chief
Executive
Officer
Chief
Financial
Officer
Chief
Technology
Officer
(CEO)
(CFO)
(CTO)
Chief
People &
Culture
Officer
(CPCO)1
President &
General
Manager
Europe
President &
General
Manager
Asia Pacific
North1
President &
General
Manager
Asia Pacific
South1
President &
General
Manager
Americas
President &
General
Manager
Middle
East & Africa
Senior Vice President Innovation /
Vice President Global Marketing
Vice President
Group Legal & Compliance
Senior Vice President Commerical2
Director Investor Relations
Vice President
Global Sourcing & Procurement
Head of Corporate Communication
Vice President
Global Research & Development2
Managing Director
Way Beyond Good Foundation
Responsibility leaders from
functions/regions
Role: Responsible for
implementing SIG's strategy
and delivering must wins.
Way Beyond
Good Champions
Role: Engage employees
on key topics related to
The Way Beyond Good.
Way Beyond
Good Foundation
Role: Drive activities and
projects that strengthen civil
society and create positive
impacts for the environment.
1
2
Joined the GEB and RSG as of 1 January 2022.
Joined the RSG in the second quarter of 2021.
External
Responsibility
Advisory Group (RAG)
Role: Provide strategic
input in the development
of SIG’s CR agenda and
feedback on SIG’s approach
and performance.
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Integrating external insight
Our independent Responsibility Advisory Group (RAG), established in 2018, supports the
development of our approach on The Way Beyond Good by providing external perspectives
and challenging us to improve.
The group of external CR experts meets formally twice a year with members of our C-suite to
provide strategic input to our Responsibility Steering Group and Group Executive Board.
In 2021, RAG meetings were held virtually due to COVID-19 restrictions. The RAG met in March
for two half-day workshops with our Chief Executive Officer, Chief Financial Officer and Chief
Technology Officer to reflect on progress against our 2020 roadmap, provide input into the
development of The Way Beyond Good ambitions and targets for 2025 and beyond, and discuss
emerging topics on the horizon.
The RAG met again in December to discuss how we have responded to their recommendations.
The meetings were facilitated by members of our Group CR team.
The table below provides a summary of the RAG’s key recommendations and our response. We
also invited each member of the RAG to provide direct feedback in our CR Report (see quotes
on the following pages).
RESPONDING TO RAG FEEDBACK
RAG recommendation
SIG response
The RAG emphasised the need to maintain a high level of
ambition, set bold targets and define clear plans to achieve them.
They reinforced the importance of focusing on the areas where
SIG can have the most impact based on what we do best, what
our customers expect of us and what the planet needs.
The RAG continued to appreciate and encourage the level
of involvement and support from our GEB in embedding
The Way Beyond Good within the business, and recommended
further engagement with the Board of Directors on this as well.
They also encouraged us to engage a wider audience to help
people understand what net positive means in practice, starting
with our own employees.
The RAG recognises the importance of collaboration and
involvement in external initiatives to achieve our net positive
ambition. They recommended that we focus on select strategic
partnerships through which we can work together to maximise
positive impact.
We remain fully committed to our bold net positive Way Beyond Good
ambition. Last year, we defined our next set of targets for 2025 in
four key action areas where we can have the biggest impact through
our business: Forest+, Climate+, Resource+ and Food+. This year, we
continued to take action and develop plans to meet these targets, as
well as refining our key performance indicators and goals to help us
achieve and measure positive impact.
We have allocated responsibility for each of The Way Beyond Good
action areas to a specific member of our GEB to help drive action
on our goals through the business. We reinforced this business
prerogative in 2021 by linking our Short-Term Incentive Plan for
GEB members, as well as managers and experts with a variable
income component, to ESG performance.
We engaged employees on our Climate+ and Forest+ action
areas this year through campaigns run by our Way Beyond Good
Champions, and we held a virtual conference for the Champions to
share ideas on how to strengthen our employee engagement on
The Way Beyond Good.
To help us drive progress in our action areas within our own
business and beyond, we have continued to support key external
initiatives and to collaborate through strategic partnerships.
For example, we pledged our support for the Science Based
Targets initiative’s Business Ambition for 1.5°C, began new
partnerships with NGOs to identify and implement projects to bring
additional hectares of forest into sustainable management, and
delivered further improvements in recycling capacity through our
membership of ACE and GRACE.
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Greg Norris (RAG Chair)
Co-Director of Sustainability
and Health Initiative for
NetPositive Enterprise
(SHINE)
“SIG is leading on ambition and practical plans to bring its ambition to life.
The target of net positive is as ambitious as you can get, and the combination
of SIG’s net positive handprint aspiration with science-based targets to reduce
its own footprint is powerful.
Now, I want to see this leadership continue with SIG demonstrating the
creation of business positive handprints. Helping the planet by delivering
business benefits at the same time is the best way to deliver quantified,
scalable, positive environmental and social impact.
SIG is adopting strong approaches as it works to define what net positive
looks like for each of its Way Beyond Good action areas. I’m particularly
excited to see the company taking such a conscientious approach on
regenerative forestry with a high level of attention to biodiversity.
Companies pursuing a net positive ambition have a responsibility to help
people understand what this means at a household level. Through its
Way Beyond Good Champions programme, SIG has an opportunity to
begin by helping employees understand what a handprint means in a
tangible way – both at work and at home.”
“SIG is clearly on the right path with The Way Beyond Good, and the
commitment from leadership is active and obvious. I also see opportunities for
the company to go even further in its four action areas.
On Forest+, I welcome SIG’s new goal on creating or restoring additional forests.
To maximise positive impact, I would like to see this programme targeting
regions of the world where there is an urgent need to tackle deforestation.
Gail Klintworth
Chair, Non-Executive
Director and Board Advisor:
Shell Foundation, Integrity
Action, Globescan, Tiger
Brands, MAS Holdings,
Al Dabbagh Group, Third
Way Africa, Savo Project
Developers, SYSTEMIQ
On Climate+, SIG has made excellent progress in reducing emissions from
production and I have no doubt that it will get to net zero in its own operations,
although it is less clear how SIG plans to deliver a net positive value chain. I also
see an opportunity for SIG to explore how its low-carbon cartons could replace
alternative packaging for a wider range of food products.
On Resource+, of course it’s important to support recycling efforts, yet the
ultimate aim must always be to create fully circular packaging that designs out
waste completely.
All these opportunities and challenges must be seen in the context of the Food+
impact that SIG’s long-life packaging has in delivering food to people around the
world, and it’s great to see the company’s increased focus on nutrition.”
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Erin Meezan
Vice President and Chief
Sustainability Officer
at Interface, Inc
“The Way Beyond Good commitment put SIG among the pioneers of the
net positive movement when it was first established in 2016 and, five years
on, it remains incredibly ambitious. The company has come a long way,
translating this bold ambition into specific targets and initiatives that have
evolved into real impact.
Of course there are areas that will take more work, but it’s been really exciting
to see SIG move so quickly in turning a great ambition into action. Progress in
key areas like carbon reduction and responsible raw materials differentiate
SIG as a supplier – and will continue to do so as more food companies
commit to a more sustainable supply chain.
SIG has created an effective way to champion The Way Beyond Good and
embed it into business operations by allocating ownership of each action
area to a specific member of the leadership team. Through the Responsibility
Advisory Group, I have seen a very high level of authentic engagement from
the whole leadership team that sets the tone for the rest of the organisation.
It will be increasingly important to engage the Board of Directors too as
The Way Beyond Good is integrated further into the business plan.”
Matt Sherwood
Chief Executive Officer,
WeVidIt
“SIG is extremely well positioned to help deliver food to consumers more
sustainably and has an opportunity to exponentially expand its business
by partnering with more food companies to choose its cartons over less
environmentally favourable packaging. From an investment standpoint, the
strength of SIG’s value proposition and ESG credentials could even enable
food companies to access low-cost capital to finance their investment in
SIG’s packaging systems.
SIG has made excellent progress on the environment side and has also taken
important steps this year on the social side. Enhancing gender and ethnic
diversity on the management team shows that SIG recognises the value of
diverse perspectives. I want to see the company continue on this path to
drive improvements on diversity, equity and inclusion across the organisation
to support the business in future.
It will be important to ensure buy-in for SIG’s ESG agenda from the new
members of the management team, as existing members clearly value
The Way Beyond Good mission and the benefit it will bring to shareholders.
They do not mind being challenged by the RAG because the goal for them
is to be the best – not just Way Beyond Good, but way beyond great!”
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Getting our people involved
Employees play an important role in informing, inspiring and driving progress towards our
ambitions.
Our Way Beyond Good engagement programme aims to engage employees across the business.
It is led by a network of local Way Beyond Good Champions who run themed campaigns to raise
awareness of specific social and environmental topics and get employees and communities
involved.
We held our first (virtual) conference for the Champions this year to enable them to share their
sustainability stories and discuss ideas about how we can improve our campaigns, engage
more employees and local communities, and get senior leadership more involved. Our Chief
Executive Officer and the Chair of our Responsibility Advisory Group joined to share their stories
and talk about The Way Beyond Good.
The Champions ran two global campaigns to engage employees and communities on climate
(see > page 276) and forests (see > page 267) – aligned with two of our action areas on The
Way Beyond Good.
The results of our last biennial employee engagement survey in 2020 showed that engagement
in our Way Beyond Good commitments has significantly increased since we started the engage-
ment programme. We will assess progress on this again in our next survey in 2022.
Innovating for good through the SIG Way Beyond Good Foundation
The SIG Way Beyond Good Foundation, set up in 2018, supports The Way Beyond Good
ambitions through targeted charitable projects and partnerships.
Together with partners, the Foundation’s purpose is to identify, drive and promote activities and
projects that strengthen civil society and create positive impacts for the environment. Members
of our GEB and senior management sit on the Foundation’s Board of Trustees.
The Foundation is exploring how to scale up our flagship Cartons for Good project (see
> page 294) and has begun work to establish a community recycling project in Indonesia, building
on the successful model established through our so+ma partnership in Brazil (see > page 288).
It also contributes to our wider support for communities (see > page 332).
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252
DRIVING THE NET
POSITIVE AGENDA
We are committed to playing a significant role in
shaping a more sustainable food system through
packaging solutions that deliver a net positive
outcome for both people and planet.
Accelerating our net positive ambition
We have developed a roadmap for 2025 and beyond to help us accelerate progress to deliver
transformative change at the pace and scale needed to achieve our net positive mission
(see > page 340).
The roadmap’s action areas focus on what’s most material to our business (see > page 259). The
roadmap builds on the Net Positive Principles (see below) to target where we can make the most
significant impact by supporting systemic change in the context of sustainable development
challenges and opportunities.
The Way Beyond Good is not a path we can walk alone. Building on our contributions over the
last few years through the Net Positive Project, we are continuing to work together with other
leading companies and non-governmental organisations to inspire others to join the movement,
partner to develop net positive thinking and solutions, and stand up as strong advocates for
action. Examples of such collaborations can be found in the sections of this report on each of
The Way Beyond Good’s interconnected action areas: Forest+, Climate+, Resource+ and Food+.
Driving the net positive agenda enables us to catalyse transformative change beyond our own
business and value chain to create wider benefits for society and the environment.
Net Positive Principles
Material: Focusing on what matters most
Systemic: Influencing change across entire system
Regenerative: Creating long-term, sustained and absolute impact
Transparent: Sharing progress openly and honestly
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Measuring environmental footprint
We use established practices and protocols to measure our value chain greenhouse gas emissions
and we have developed a methodology to measure our wider value chain environmental footprint,
building on the lifecycle assessment (LCA) approach we use to measure the environmental
performance of our products.
The benefit of using an LCA approach is that it looks across a range of different impact areas to
help identify potential trade-offs where an action may reduce our impact in one category but
increase our impact in another. Analysing our value chain environmental footprint helped to
inform the development of The Way Beyond Good ambitions and is supporting us in defining
what net positive means for each action area.
Quantifying social impact
Metrics and methodologies are less well defined for measuring social impact. We have
established a methodology to measure the impact of our community engagement programmes,
which includes their potential to contribute to specific United Nations Sustainable Development
Goals (see > page 332).
Our biggest opportunity to create positive social impact is through the role of our packs in
preserving and delivering food. This year, we began tracking and reporting a new metric to
quantify the amount of nutritious food and beverages we help customers deliver to people
around the world that contribute to a balanced diet and lead to better health. We are also
developing a methodology to help us understand how much of this is delivered specifically in
the countries where nutrition is most needed (see > page 290).
We previously explored the use of an LCA model to better understand social impact across
our value chain by applying the guidelines for social LCAs developed by the United Nations
Environmental Life Cycle Initiative and the Social Life Cycle Alliance to a case study to identify
potential social impacts – positive and negative – associated with the transition from fossil-
based to renewable feedstock for polymers. We are now taking a broader approach in line with
our human rights due diligence programme.
Measuring handprints
As well as developing methodologies to measure our footprint as a powerful tool for decision-
making in product design and corporate priority setting, we are also working to better understand
and measure handprints (positive impact) to help us quantify and enhance positive outcomes.
To achieve a net positive impact, our footprint should be exceeded by our handprint when
assessed together. In line with the Net Positive Principles, in practice this means we must both
reduce our footprint and increase our handprint. Transparent and credible methodologies are
essential to measure both.
We define a handprint as causing a reduction in another actor’s footprint (outside our own
value chain footprint) or creating positive outcomes (measured in the same physical units as
footprints). This enables us to take a broader perspective in addressing positive systemic and
transformative outcomes outside our own value chain. See the next page for an example of
how this works in practice in our aluminium foil supply chain.
We are working with others to develop effective ways to measure handprints.
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The findings of our pilot of the Sustainability and Health Initiative for NetPositive Enterprise
(SHINE) HandPrint method to better understand the positive role our packaging system can
play in reducing consumer footprints were published this year in the peer-reviewed journal for
Sustainable Production and Consumption. The pilot, which mapped potential carbon savings
by introducing our SIGNATURE 100 solution across all the dairy markets we serve, found that
the methodology shows potential as a useful tool to inform decision-making alongside our
established footprint metrics.
We are now looking beyond carbon to develop metrics to help us measure positive impact
across The Way Beyond Good action areas.
We also partnered with Stora Enso, one of our key liquid packaging board suppliers and a fellow
partner in the Net Positive Project, to publish a white paper on the important role of collaboration
among value chain stakeholders to accelerate sustainability progress. The paper focuses on an
example of net positivity where wood fibre-based packaging can create opportunities for giving
back to the environment, society and the economy across the entire life-cycle of the wood fibre
and its subsequent re-use over several product life-cycles.
The output is a guide to help companies understand how to apply the Net Positive Principles for
product end-of-life processes to support and measure positive outcomes outside corporate or
product system boundaries, and stimulate lasting systemic change.
Cutting our carbon footprint and creating a positive handprint with ASI
Our sourcing of aluminium certified to the Aluminium Stewardship Initiative (ASI) standard
provides a useful illustration of our opportunities to create a positive handprint through
our approach.
We expect our aluminium foil suppliers to achieve ASI certification, which mandates
greenhouse gas emissions reductions along the entire supply chain, including requirements
to keep emissions from refining and smelting operations within specific limits. This in turn
supports us in cutting our own value chain carbon footprint from the aluminium foil we
purchase to go into our packs – as measured through our established greenhouse gas
accounting methodologies.
By encouraging suppliers to meet ASI standards, we are also contributing to delivering a
positive outcome (handprint) because the same suppliers will deliver carbon reductions
for other companies purchasing aluminium foil for use in our sector and beyond.
In addition, by enabling our customers to include the ASI label on their products, we
are creating a wider handprint by increasing consumer awareness and demand for
responsibly sourced aluminium. This on-pack labelling enhances visibility of ASI-certified
materials in the food and drink supply system.
We are progressively including ASI aluminium as standard for all SIG packs in Europe
and North America whenever customers launch new products or change pack designs.
In 2021, we nearly doubled our use of ASI-certified aluminium foil worldwide and more
customers chose to include the ASI label on their packs.
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Our contribution to the United Nations Sustainable Development Goals
255
OUR CONTRIBUTION TO THE
UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
Governments, businesses and others must
all do their part to achieve the United Nations
Sustainable Development Goals (SDGs) for 2030.
We are determined to do ours.
We are focusing our support on the SDGs where we see opportunities for our business and
partnerships to make a meaningful contribution by supporting systemic change at scale (see table
on the next page). These are closely aligned with the areas where we have the most significant
impact on sustainable development (see > page 259) and we are driving progress through The
Way Beyond Good action areas.
This targeted approach – focusing on the biggest risks to people or the environment, and the
greatest benefits our products and partnerships can have – is in line with the guidelines for
business reporting on the SDGs from the Global Reporting Initiative and the United Nations
Global Compact.
We also contribute to several other SDGs through our commitments to sustainable innovation,
responsible culture and wider ambitions on The Way Beyond Good for society and the
environment. For example:
• our commitment to health, safety and fair labour practices for employees and people in our
supply chain (through responsible sourcing) aligns with SDG 8
• by promoting the use of FSC™ certification, we are supporting progress towards 11 of the
SDGs (and 35 of the accompanying targets)1
• by exploring ways to scale up our Cartons for Good project (see > page 294), we can strengthen
our support for additional global goals such as SDG 1 on poverty, SDG 3 to promote good
health and wellbeing, and SDG 10 to reduce inequalities (as well as SDGs 2, 12 and 17)
• our methodology for measuring the impact of our community engagement programmes
considers their alignment with the full range of SDGs (see > page 332).
1
Based on analysis by the Forest Stewardship Council™ in 2018.
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Driving the net positive agenda
256
TARGETED SUPPORT FOR SDGS
SDG
Most relevant SDG targets where our action contributes1
By 2030, end hunger and ensure access by all people, in particular the poor and
people in vulnerable situations, including infants, to safe, nutritious and sufficient
food all year round
By 2030, double the agricultural productivity and incomes of small-scale food
producers, in particular women, indigenous people, family farmers, pastoralists
and fishers, including through secure and equal access to land, other productive
resources and inputs, knowledge, financial services, markets and opportunities
for value addition and non-farm employment
The Way
Beyond Good
action area
Our approach
and progress
Food+
See > page 290
Food+
See > page 290
By 2030, ensure sustainable food production systems and implement resilient agricultural
practices that increase productivity and production, that help maintain ecosystems,
that strengthen capacity for adaptation to climate change, extreme weather, drought,
flooding and other disasters and that progressively improve land and soil quality
Climate+
Forest+
Resource+
See > page 268
See > page 264
See > page 282
7.2
By 2030, increase substantially the share of renewable energy in the global energy mix
Climate+
Resource+
See > page 268
See > page 282
12.1
Implement the 10-year framework of programmes on sustainable consumption
and production, all countries taking action, with developed countries taking the lead,
taking into account the development and capabilities of developing countries
Resource+
Forest+
See > page 282
See > page 264
12.2
By 2030, achieve the sustainable management and efficient use of natural resources
By 2030, halve per capita global food waste at the retail and consumer levels and
reduce food losses along production and supply chains, including post-harvest losses
By 2030, substantially reduce waste generation through prevention, reduction,
recycling and reuse
Strengthen resilience and adaptive capacity to climate-related hazards and natural
disasters in all countries
Climate+
Forest+
See > page 268
See > page 264
Improve education, awareness-raising and human and institutional capacity
on climate change mitigation, adaptation, impact reduction and early warning
Climate+
See > page 268
By 2025, prevent and significantly reduce marine pollution of all kinds, in particular
from land-based activities, including marine debris and nutrient pollution
Resource+
See > page 282
Resource+
Forest+
See > page 282
See > page 264
Food+
See > page 290
Resource+
See > page 282
2.1
2.3
2.4
12.3
12.5
13.1
13.3
14.1
15.2
By 2020, promote the implementation of sustainable management of all types of
forests, halt deforestation, restore degraded forests and substantially increase
afforestation and reforestation globally
Forest+
See > page 264
17.16 Enhance the global partnership for sustainable development, complemented by multi-
stakeholder partnerships that mobilise and share knowledge, expertise, technology
and financial resources, to support the achievement of the sustainable development
goals in all countries, in particular developing countries
Climate+
Food+
Resource+
Forest+
See > page 268
See > page 290
See > page 282
See > page 264
1
Relevant targets identified through an analysis based on the methodology outlined in the UNGC/GRI publication “Business Reporting on the SDGs:
An Analysis of Goals and Targets”.
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Listening and responding to stakeholders
257
LISTENING AND RESPONDING
TO STAKEHOLDERS
We engage with stakeholders to understand what matters
most to them and we respond to their feedback.
HOW WE ENGAGE WITH STAKEHOLDERS
Stakeholder
How we engage
Key topics and concerns
Our response
Customers
• Customer
questionnaires
• Regular interactions
with customers
through sales and
service
Employees
• Biennial global
employee survey
• Regular day-to-day
dialogue
• Formal appraisals
• Consultation
with employee
representatives
• Townhall meetings and
virtual ‘Qs to SIG’
• Recognition schemes
• Industry associations
such as ACE and GRACE
• The Consumer Goods
Forum
• Industry platforms
such as
AIM-PROGRESS,
EXTRA:CT and
4evergreen
Industry
Customers want us to meet
their requirements on a broad
range of responsibility issues
and help them achieve their
social and environmental
goals. Recyclability of products,
recycling infrastructure, and
increased use of renewable and
recycled materials remain high
on our customers’ agendas.
Feedback from our latest
biennial employee survey in
2020 showed a significant
increase in employee
engagement, with improved
scores across all 13 categories.
It also highlighted several areas
where employees felt there was
still room for improvement.
Industry peers are keen
to work together towards
common goals and meet
shared industry challenges,
such as increasing recycling
rates of used beverage cartons.
Investors
• Annual Report
• Annual General Meeting
• Quarterly reporting
and investor calls
• Regular dialogue with
existing and prospective
investors (230 meetings
with around
275 investors in 2021)
• Investor conferences
(13 in 2021 – including
two dedicated ESG
conferences for 75
investment institutions)
Investors seek sustainable,
long-term returns. The main
ESG topics they asked about in
2021 continued to be recycling
and circularity, how to make
SIG’s most sustainable products
more mainstream, and how
to leverage the sustainability
credentials of cartons compared
with other types of packaging.
We engage closely with customers to understand their
needs. We use established industry platforms, such as
SEDEX and EcoVadis, to demonstrate compliance with
customer requirements and we support their goals
through product innovation.
This year, we partnered with several customers on
recycling initiatives. We are also helping customers engage
consumers on sustainability topics through recycling
campaigns and information on our Smart Choice website
(accessed via QR codes on our packs).
We are responding to employee feedback to help us
make SIG a better place to work (see > page 318) and
we will invite employees to tell us what they think in our
next survey in 2022. We have also increased our focus
on employee health and wellbeing (see > page 327).
And we continued to engage our people through our
Way Beyond Good Champions engagement campaigns.
We are working through industry associations and partnering
directly with others in our industry to drive progress on
recycling initiatives around the world (see > page 282).
This year, we committed to the 10 commitments set out for
the industry in the new 2030 roadmap launched by ACE.
We joined the HolyGrail 2.0 initiative launched by AIM, the
European Brands Association, to explore the viability of digital
watermarking to enable more accurate and efficient sorting
of post-consumer waste for recycling. And we continued to
actively participate in The Consumer Goods Forum’s Coalition
of Action on Plastic Waste to enhance dialogue among
leading companies and drive action.
We also became the first in our industry to join AIM-
PROGRESS, a global forum of leading fast moving
consumer goods manufacturers and common suppliers
that aims to enable and promote responsible sourcing
practices and sustainable supply chains.
We are driving progress on recycling and circularity,
increasing uptake of our most sustainable products and
integrating sustainability credentials in our marketing and
sales materials.
Our sustainability experts have participated in dedicated
ESG investor conferences in order to enhance awareness
of SIG’s achievements and strategy.
This year, we further enhanced our ESG ratings from MSCI
and Sustainalytics, we were included in the SXI Switzerland
Sustainability 25® Index and we ranked in the top quartile of
our industry in the DJSI Corporate Sustainability Assessment,
which we were invited to respond to for the first time.
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Listening and responding to stakeholders
258
HOW WE ENGAGE WITH STAKEHOLDERS
Stakeholder
How we engage
Key topics and concerns
Our response
Suppliers
• Regular engagement
• Compliance
assessments
and audits
Suppliers want to know what
our requirements are on
responsibility so they can
understand how to meet them.
Sustainability
experts
• Responsibility
Advisory Group (RAG)
• Regular conversations
with experts from
academia, institutes,
government and
non-governmental
organisations
• Participation in
multi-stakeholder
initiatives, including
the Sustainability and
Health Initiative for
NetPositive Enterprise
(SHINE) and the Science
Based Targets initiative
(SBTi)
• Engagement with the
Institute for Energy
and Environmental
Research (IFEU)
• Engagement through
trade associations
Policymakers
and
regulators
Experts want us to show
we are managing our most
material issues, setting
ambitious targets and
reporting transparently on
our performance, following
recognised international
standards.
Independent experts on
our RAG met twice in 2021
to provide feedback on our
approach and insight to
support the development of
The Way Beyond Good targets.
The range of topics covered by
regulators is broad. Hot topics
include responsible production,
sustainable consumption,
recycling and circular economy,
and contributions to broader
global goals, such as the
United Nations Sustainable
Development Goals.
Local
communities
around SIG
production
sites
• Way Beyond Good
engagement
programme
• Family days and open
days at our sites
• Recycling initiatives
Issues raised by communities
are generally locally specific.
We communicate our ethical supplier standards and work
with suppliers to source raw materials from responsible
sources (see > page 304).
We continued to engage with suppliers to reduce our value
chain environmental footprint through, for example, the
adoption of greenhouse gas emissions reduction targets
and certifications such as FSC™ and ASI.
We also teamed up with Stora Enso, one of our key liquid
packaging board suppliers, to develop a white paper,
published through the Net Positive Project, on the important
role of collaboration among value chain stakeholders to
accelerate sustainability progress.
We have set bold ambitions for 2025 and beyond. We
have built responsibility into our Corporate Compass and
key business processes, and have a clear governance
structure in place that includes management of our most
material issues.
We use international protocols and standards in the
management of specific focus areas. We engage IFEU to
conduct third-party lifecycle assessments of our products
and we are collaborating with others, including SHINE, to
drive the net positive agenda (see > page 252). This year, we
also pledged our support for the SBTi’s Business Ambition.
We report in accordance with the Global Reporting
Initiative Standards and we obtain external assurance
for key data to enhance transparency.
See > page 248 for our response to the RAG’s feedback
in 2021.
Existing and emerging regulations feed into our identification
of material issues and we address topics relevant to public
policy through The Way Beyond Good action areas and
enablers. See the relevant issue sections of this report for our
response to specific regulatory priorities.
This year, we joined other leading businesses in supporting
a call to action, led by We Mean Business, urging G20
leaders to go all in to keep the Paris Agreement’s 1.5°C goal
within reach. Following an ACE campaign asking countries
to set targets for separate collection of beverage cartons
for recycling, several countries have introduced policies
in this regard. And engagement through the German
Beverage Carton Association FKN led to formal approval
from the German Federal Environment Agency (UBA) of a
life-cycle assessment that found that single-use beverage
cartons compare favourably with reusable glass bottles –
outperforming single-use PET bottles – across the fresh milk,
juice and UHT milk market segments.
We have continued to increase the positive impact we
have on communities through our Way Beyond Good
engagement programme and we are enhancing our
social impact through The Way Beyond Good Foundation
(see > page 332).
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Our priorities
259
OUR PRIORITIES
The Way Beyond Good action areas are closely
aligned with the biggest opportunities for SIG to
have an impact on sustainable development.
We defined these action areas, and the accompanying enablers of sustainable innovation and
responsible culture, based on an assessment of the issues that are most important to our
stakeholders and our business. These are our material issues.
Materiality process
The action areas and enablers for The Way Beyond Good are informed by our latest materiality
assessment, conducted with expert sustainability consultants in 2020.
The assessment began with research into external trends to update the list of issues to be
assessed (see issue list with definitions on > page 261). We then assessed the relative importance
of each issue to external stakeholders, using inputs representing a range of stakeholder
groups – and to our business, based on our strategic business priorities, values and principles,
risk management and customer requirements.
The results were plotted on a materiality matrix (see chart on the next page). We set a threshold
of 80% or above on either or both axes to identify our most material issues.
We also analysed where we have the most significant impacts on the environment, society
and/or economy that can have a positive or negative contribution to sustainable development
(see table below).
The results were validated internally by our Group Executive Board and externally by informed
sustainability experts – the members of our Responsibility Advisory Group and Forum for
the Future.
TARGETING ACTION WHERE WE CAN HAVE THE MOST SIGNIFICANT IMPACT
Significant impact
Safe food supply
Recycling and circular economy
Tackling climate change
Thriving forests
Sustainable raw materials
Sustainable product innovation
The Way Beyond Good action area / enabler
Food+
Resource+
Climate+
Forest+
Climate+
Forest+
Resource+
Responsible culture
Sustainable innovation
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Our priorities
260
Diversity, equity & inclusion
Responsible suppliers
Fair labour practices
Employee wellbeing,
health & safety
Sustainable
packaging innovation
Safe food supply
Thriving forests
Tackling climate
change
Sustainable
raw materials
Recycling &
circular economy
OUR MATERIAL ISSUES
100
80
Material
Not material
l
s
r
e
d
o
h
e
k
a
t
s
o
t
e
c
n
a
t
r
o
p
m
I
50
Operational
water use
Clean air
Thriving communities
Fair business
practices
Minimising
production waste
Privacy &
data security
Employee satisfaction
Talent development
l
a
i
r
e
t
a
m
t
o
N
l
a
i
r
e
t
a
M
80
100
0
50
Influence on business success
Material issues
Additional strategic topics
Significant impacts
Defining reporting boundaries
The table on the following pages defines our most material issues and the boundaries of where
each impact occurs within or outside the organisation. It also highlights the six material issues
where we can have the most significant environmental, societal and/or economic impact.
Our material issues determine the content of our reporting, including which of the Global
Reporting Initiative Standards we report on (see > page 349) and the level of coverage and
boundaries for each. We also report on some additional strategic topics that are part of our
responsible business approach. These are also indicated in the table.
Annual Report 2021
Corporate Responsibility Report
Strategy and governance
Our priorities
261
Material
issue
Boundaries
Significant
impact
Additional
strategic
topic
Within
organi sation
Outside organisation
Suppliers Cus tomers Con sumers
ISSUE DEFINITIONS AND BOUNDARIES
Issue
Definition
Safe food
supply
Thriving
forests
Tackling
climate
change
Recycling and
circular
economy
Efforts to contribute to a sustainable food
supply system by: supporting the delivery of safe
nutrition and hydration through the provision
of high-quality products that ensure the quality,
hygiene and safety of the food contained in
the company’s packaging; contributing to the
prevention of food loss by ensuring that the
company’s filling machines operate efficiently;
and supporting customers’ efforts to reduce
food waste through packaging design.
Efforts to use pulp and paper products from
responsible and sustainable sources that support
biodiversity, promote thriving forest ecosystems
and support the people who depend on these.
Efforts to mitigate climate change by reducing
greenhouse gas emissions associated with the
company’s value chain (through, for example,
energy efficiency and use of renewable energy),
to support carbon sequestration, and to adapt
to a changing climate to ensure continuity of
production and supply.
Efforts to support the principles of a circular
economy by designing out waste, ensuring that
the company’s products are easily and fully
recyclable, ensuring/improving recyclability
of plastics, supporting the establishment of
appropriate infrastructure to collect and recycle
the company’s products after consumer use,
preventing single-use plastic items such as straws
from leaking into the environment, keeping
products and materials in use by using recycled
content, transitioning to renewable sources and
regenerating natural systems.
Sustainable
packaging
innovation
Innovation in the company’s packaging solutions
(including packs, filling machines and technical
service) to better meet the needs of customers,
consumers, society and the environment.
Sustainable
raw
materials
Efforts to ensure that raw materials are produced
in a responsible and sustainable way, including
upholding the rights of indigenous communities,
and to ensure a security of supply.
Diversity,
equity and
inclusion1
Efforts to increase diversity in the workforce,
create an inclusive workplace, and ensure
equal opportunities regardless of race, religion,
national origin, political affiliation, gender,
sexual orientation, disability, age or any other
relevant category.
Talent
development
Investing in and developing employees to help
them achieve their goals and create a workforce
that meet the needs of the business now and in
the future.
Employee
satisfaction
Listening to employees, responding to their
feedback, recognising the work they do and
rewarding them based on performance
to sustain strong levels of job satisfaction,
motivation and engagement in the business.
1 Material issue renamed in 2021 to include equity in the title. The issue definition remains unchanged.
Annual Report 2021 Corporate Responsibility Report
Strategy and governance
Our priorities
262
ISSUE DEFINITIONS AND BOUNDARIES
Issue
Definition
Material
issue
Boundaries
Significant
impact
Additional
strategic
topic
Within
organi sation
Outside organisation
Suppliers Cus tomers Con sumers
Employee
health, safety
and wellbeing
Fair labour
practices
Efforts to keep employees safe at work by
managing occupational health and safety risks,
and to support their wellbeing by enabling a
good work–life balance, promoting healthy
lifestyles, building their resilience and creating
an open environment where people feel able
to ask for help.
Efforts to uphold labour rights in the company’s
own operations, including providing fair pay
and decent working conditions, recognising the
right to freedom of association and collective
bargaining, and preventing discrimination, child
labour and modern slavery (human trafficking,
forced and compulsory labour, bonded labour
and slavery).
Responsible
suppliers
Efforts to ensure that all suppliers uphold
appropriate standards on sustainability issues
such as ethical conduct, labour practices
and environmental and health and safety
management.
Thriving
communities
Efforts to maintain good relationships with and
support the communities where the company
operates (through, for example, local employment
and sourcing, and charitable giving and employee
volunteering).
Fair business
practices
Minimising
production
waste
Privacy and
data security
Efforts to ensure the company conducts
business fairly and ethically, including efforts
to prevent anti-competitive practices and
bribery and corruption, to ensure openness
and transparency in public policy activities,
and to ensure the company contributes to
the economies it operates in (for example,
by paying an appropriate amount of tax).
Efforts to reduce and recycle waste from
the company’s operations.
Efforts to ensure that data is captured, stored
and transferred in a secure way that protects
the privacy of personal and business information.
Operational
water use
Efforts to reduce water use in the company’s
operations, particularly in water-stressed regions.
Clean air
Efforts to prevent local air pollution associated
with the company’s operations and logistics.
Not
material
Not
material
Not
material
Not
material
Not
material
Not
material
Annual Report 2021 Corporate Responsibility Report
Approach and performance
263
APPROACH AND
PERFORMANCE
264 Forest+
268 Climate+
282 Resource+
290 Food+
296 Sustainable innovation
304 Responsible culture
304 Our supply chain
311 Our people
322 Health, safety and wellbeing
328 Environmental management
332 Communities
334 Governance and ethics
Annual Report 2021
Corporate Responsibility Report
Approach and performance
Forest+
264
FOREST+
Material issue
Thriving forests
Significant impact
Thriving forests (environmental, societal, economic)
Key performance indicators
• % packs sold labelled with FSC™ logo
• % FSC™-certified liquid packaging board
Key policies
• Responsible Sourcing Policy & Directive
• Liquid Packaging Board Purchasing Policy
Relevant SDGs
Responsible
VP of Global Sourcing and Procurement
Evaluation of management approach
• Quarterly reviews by the VP of Global Sourcing and Procurement
who reports to the Responsibility Steering Group twice a year
• FSC™ Chain of Custody certification audits
Grievance mechanism
Ethics & Compliance Hotline
Why is this material for SIG?
The world’s forests play a critical role in regulating the climate as well as supporting biodiversity,
ecosystem functions and communities. If managed sustainably, they can provide a wealth of
resources and materials that can be continually renewed – offering sustainable alternatives to
fossil-based materials.
We depend on forests to provide the wood fibres used to make liquid packaging board, the
main material that goes into our packs. Sustainably managed forests offer natural, renewable
and recyclable raw materials with excellent attributes for our packaging, including stiffness and
protection from light. Trees are harvested incrementally to maintain ongoing benefits of thriving
forests, including ecosystem services and carbon storage as trees absorb CO2 emissions when
they grow through photosynthesis. This is why supporting thriving forests not only supports
biodiversity but also plays an essential role in tackling climate change.
With our strong connection to forests through our supply chain, we have an opportunity to
make a significant positive contribution to thriving forests by engaging with our suppliers and
sourcing raw materials from sustainably managed forestry operations.
Our commitment to sourcing certified responsible liquid packaging board helps us to ensure a
sustainable supply of our main raw material now and in the future, and to meet customer and
investor requirements for sustainable sourcing.
Forest Stewardship Council™ (FSC™) certified SIG packs enable our customers to demonstrate
to consumers that their packaging is responsible and does not contribute to forest degradation
or deforestation – an issue that has risen up the agenda with the pact made by global leaders
at the COP26 climate summit to halt and reverse forest loss and land degradation by 2030.
Our Forest+ commitment is also supporting customers’ own ambitions to move towards forest
positive supply chains as leading companies join in The Consumer Goods Forum’s Forest
Positive Coalition of Action.
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265
Our commitment: Creating more thriving forests
At the heart of our packs lies a renewable, natural material used to meet humanity’s needs for
thousands of years – wood.
The renewable plant-based paperboard which makes up 70–80% of our cartons on average is a
low carbon material capable of being endlessly renewed.
Today, FSC™ certification for all our paperboard means that all the wood used to make our
cartons comes from forests where biodiversity is protected, local communities are respected,
and both are able to flourish.
And The Way Beyond Good doesn’t end there. The goal is that every time one of our cartons is
bought, the world’s thriving forests grow.
We can achieve that firstly by standing by our promise to only use FSC™ paperboard, to ensure
that all the wood fibre we use for our paperboard does not contribute towards deforestation by
only taking what is then regrown. And secondly, by supporting the creation or restoration of an
additional 100% of biodiverse forest area on top of that required to make our cartons.
By 2030, this will mean at least an additional 650,000 hectares of thriving forest beyond that
which we’ll replace to make our products.
Helping forests thrive will also help us meet our Climate+ and Resource+ ambitions.
Our goals
2025 target
Progress tracker
Partner to bring at least 650,000 additional hectares of forest into
sustainable management beyond what we need to make our products by 20301
Establish a partnership with Brainforest, an NGO, to contribute to restoring or
creating resilient and sustainable forests
Partner with an NGO to develop a methodology to measure
the impact of FSC™ certification
Work with customers to include the FSC™ label on 100% of the packs we sell,
closing the remaining 3% gap
Maintain 100% FSC™-certified supply of liquid packaging board for our packs
1 The previously published target has been amended to extend the timeline from 2025 to 2030 and revise the wording to clarify meaning.
Management overview
We require our suppliers to source wood for our liquid packaging board from forests that are
managed sustainably.
FSC™ Chain of Custody certification enables the liquid packaging board used in our packs –
and the fibres used in our paper straw solution – to be traced through the supply chain to
sustainably managed forests.
Annual Report 2021 Corporate Responsibility Report
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266
All our liquid packaging board comes from paper mills certified to the
FSC™ Chain of Custody standard and we have maintained FSC™ Chain
of Custody certification at our production sites and sales offices worldwide
since 2009 (licence code FSC™ C020428). We were the first in the industry to
achieve this milestone.
To become FSC™-certified, forest owners must meet strict standards for sustainable forestry
management that include supporting biodiversity and ecosystem functions, preventing
deforestation and degradation, and respecting the rights of workers, local communities and
indigenous peoples.
As of January 2021, 100% of the liquid packaging board used in our packs is purchased
with FSC™ certification – an industry first. This means that all our liquid packaging board
is made with fibres sourced from FSC™-certified sustainable forests and other FSC™-controlled
sources.
Since 2016, customers have been able to put the FSC™ label on any of our packs –
another industry first. The FSC™ label on a product shows consumers that the paper or
board used in the packaging comes from sustainably managed forests and other controlled
sources. Through our sales and marketing, we encourage customers to put the FSC™ label on
their packs to raise awareness of sustainability and increase consumer demand for other FSC™-
certified paper and wood products.
By promoting the use of FSC™ certification we are supporting progress towards 11 of the United
Nations Sustainable Development Goals (SDGs) and 35 of the accompanying targets.1 This
includes SDG 13 on climate action and our support for thriving forests will play an essential role
in our Climate+ action area (see > page 268).
SIG supports and helped to launch the FSC™ Bonn initiative to quantify the positive contribution
that FSC™-certified forests can make to mitigating climate change. Through the Alliance
for Beverage Cartons and the Environment (ACE), we also collaborated with the United
Nations Environment Programme (UNEP) Life Cycle Initiative and WWF to develop the Gimo
Recommendations. These aim to empower decision-makers across the value chain to protect
and restore life on land by providing clear guidance for enhancing life-cycle assessment
modelling for the biodiversity impact of forestry.
We are partnering with NGOs to identify and deliver projects that will help us support the
growth of sustainably managed forests worldwide – beyond the amount we need to make our
packs – and measure the environmental and social impact, including associated carbon capture.
We also aim to reduce pressure on forest resources by designing our packs to minimise use of
materials, and by fostering recycling of packs after use to reclaim the fibres so they can be used
again to create new paper and board products (see > page 282).
As part of our commitment to transparency, we disclosed detailed information for investors on
our management and performance in relation to forests for the first time in 2021 through the
CDP, in addition to our CDP climate disclosure.
1 Based on an analysis by the Forest Stewardship Council™.
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Performance in 2021
Supporting thriving forests through FSC™ certification
• As of January 2021, 100% of the liquid packaging board we source for use in our packs is
purchased with FSC™ certification – an industry first. As we used up remaining supplies
purchased the previous year, 97% of the liquid packaging board we used to produce our
packs during 2021 was purchased with FSC™ certification (up from 83% in 2020).
• We have sold over 40 billion FSC™-labelled packs in 2021, raising awareness of certified
sustainable forest management by bringing the FSC™ label to billions of consumers’ tables.
• 98% of the packs we sold in 2021 carried the FSC™ label (up from 97% in 2020). To close the
remaining gap, we are continuing to promote the benefits of FSC™ labelling and encouraging
our customers to include the FSC™ label on packs for new products or add the FSC™ label to
existing products when there is a design change on the pack.
Partnering to expand sustainable forestry
• We have entered into partnerships with NGOs to help us deliver and measure progress
towards our target to bring at least 650,000 additional hectares of forest into sustainable
management beyond what we need to make our products by 2030. Through these
partnerships, we will identify suitable projects to invest in, use life-cycle assessment
techniques to measure additional forests brought into sustainable management and develop
ways to understand how to deliver transformative change on the ground.
• We began working with Brainforest – a Swiss for-impact Venture Studio for forests and
climate, co-founded by WWF Switzerland and made possible by the Migros Pioneer Fund –
and its venture Xilva AG to help us identify potential projects that we can invest in to support
our forest restoration target. We are looking for science-based projects that are designed to
create resilient forest ecosystems to improve biodiversity and store carbon to unlock the full
climate potential of forests.
• We are working with the Institute for Energy and Environmental Research (IFEU) to measure
the impact of sourcing FSC™-certified raw materials using life-cycle assessment techniques
focusing on carbon and biodiversity.
• We also continued to explore how we can partner with an NGO to deliver projects that can
contribute to our target to bring additional hectares of forest into sustainable management.
Raising awareness
• Our Way Beyond Good Champions ran an employee awareness campaign on forests with
a global photography competition and various local activities, such as quizzes and webinars
with guest speakers. Colleagues in Romania donated to a local NGO to support reforestation
of a two-hectare area in Cluj and ‘SIG Rangers’ in Thailand who revisited the local Rayong
Mangrove Forest Resource Development Station to plant trees found that 90% of the
1,500 mangrove trees they planted in 2019 were still thriving.
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CLIMATE+
Material issue
Tackling climate change
Significant impact
Tackling climate change (environmental)
Key performance indicators
GRI
302-1
GRI
302-3
GRI
302-4
GRI
305-1
GRI
305-2
GRI
305-3
GRI
305-4
GRI
305-5
Key policies
• Responsible Sourcing Policy & Directive
• Environment, Health and Safety Policy
• Product Stewardship Policy
• Global R&D Process Handbook
• Standard Operating Procedure to improve used beverage
carton collection and recycling in regions
Relevant SDGs
Responsible
• Raw materials and energy sourcing:
Global Sourcing and Procurement
• Production: Group Corporate Responsibility and
local environmental teams at production plants
• Pack design: Global Technology with support
from Global Marketing
• Filling machines: Global Research and Development
and Global Engineering & Application teams
• Logistics: Global Supply Chain Management
• Recycling: Local teams, overseen by Regional Presidents
Evaluation of management approach
• Quarterly review of raw materials and energy sourcing
by VP of Global Sourcing and Procurement who reports
to the Responsibility Steering Group
• Monthly review of production metrics by the
Group Executive Board
• Independent, critically-reviewed life-cycle assessments (LCAs)
• Internal audits and regular review of performance against
The Way Beyond Good targets by the Group Executive Board
• Quarterly review of Climate+ projects with
Chief Technology Officer
• SEDEX Members Ethical Trade Audit (SMETA) site audits
and EcoVadis assessments
• ASI Performance Standard certification audits
(in relation to product carbon footprint and LCA practices)
Grievance mechanism
Ethics & Compliance Hotline
Why is this material for SIG?
Climate change resulting from manmade greenhouse gas emissions is one of the biggest global
challenges we face, with wide-reaching implications for people and the planet.
The COP26 climate conference in 2021 underlined the message that tackling the climate emergency
requires bold and urgent action, and stakeholders expect businesses to play their part.
We have an opportunity to contribute to global climate efforts by reducing greenhouse gas
emissions across our value chain, offering low-carbon solutions, and supporting thriving forests
as important carbon sinks through our procurement of liquid packaging board from certified
sustainable sources.
Tackling climate change also helps us mitigate risks for our business. These include physical risks
from changes to the climate that could impact the long-term availability of our raw materials
and transition-related risks from regulations designed to promote a low-carbon economy.
We are well positioned to grow our market share in a low-carbon economy. Our packs are
made using renewable energy and mainly from renewable materials. They have a relatively low
carbon footprint compared with alternative types of packaging and we are cutting their life-cycle
carbon footprint further through sustainable innovation. Our low-carbon packaging solutions
offer a strong differentiator for customers seeking to meet growing consumer demand for
climate-friendly products.
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Customers and investors also increasingly expect us to demonstrate strong performance on
climate action in our own operations. By doing so, we have an opportunity to create a wider
positive impact by setting a leading example to others, for example by setting science-based
climate targets and switching to 100% renewable energy for production.
Our commitment: Capturing more carbon than we emit
Averting catastrophic climate change requires Net Zero carbon emissions, globally, by 2050.
Our aseptic packaging, bringing people safe food and drink without refrigeration, already saves
emissions from chilled supply chains. We are proud that our manufacturing operations are
already carbon neutral, thanks to 100% renewable energy. And our average pack has a carbon
footprint up to 70% lower than plastics, bottles or cans, with our SIGNATURE portfolio up to 58%
lower still.
All of that is good. But it’s not beyond good. So it’s not enough.
The Way Beyond Good demands that we become a Climate Positive business. This means that,
in addition to reducing our emissions in line with climate science, we will remove more carbon
from our value chain than we emit. Alongside this, we will continue to help our customers and
consumers further lower their own carbon footprints with our low impact packaging.
Here’s how we get there.
For our products, we will further reduce the carbon footprint of every carton we make, by
replacing carbon intensive materials with lower carbon or, possibly one day, carbon negative
alternatives.
We will engage with our partners across our supply chain to maximise their use of renewable
energy wherever possible. Then, we will not only compensate our remaining yearly emissions
but also invest in additional projects that tackle climate change outside our own operations. All
while working with the Science Based Targets initiative (SBTi) to pursue deep emissions cuts
along our value chain to reach true Net Zero by no later than 2050.
We are committed to offering the lowest carbon solutions available and cutting emissions at
every stage of our value chain – from sourcing of raw materials to production, transport, filling
and recycling of our packs. Our targets are approved by the SBTi as in line with the latest science
to keep global warming below 1.5°C to prevent the worst effects of climate change. And we are
going further by combining sustainable innovation with our Forest+ actions (see > page 264) to
take carbon from the atmosphere.
We are also committed to mitigating our exposure to climate-related risks through adaptation
measures. For example, our support for sustainable forestry practices is improving resilience in
our value chain, and our efforts to use more renewable and recycled materials help to reduce
reliance on virgin fossil resources.
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Our path to Net Zero carbon
The latest report from the Intergovernmental
Panel on Climate Change emphasises that global
greenhouse gas emissions must be reduced to net
zero by 2050 to preserve a liveable climate. We are
determined to do our part.
We are already among the group of leading
companies that have set science-based targets
approved by the SBTi as in line with the latest climate
science to limit global warming to 1.5°C above
pre- industrial levels to prevent the worst effects of
climate change.
Our science-based target commits us to reduce total
operational (Scope 1 and 2) greenhouse gas emissions
by 60% by 2030 (from 2016) and we have set an inter-
im target to reach a 50% reduction by 2025. In addition,
we are committed to reducing our relative value chain
greenhouse gas emissions (Scope 1, 2 and 3) by 25%
per litre of food packed by 2030 (from 2016).
This year, we joined the United Nations Race to Zero
and committed to set a long-term science-based
target to reach net-zero value chain greenhouse
gas emissions by no later than 2050 as part of our
support for the SBTi’s Business Ambition for 1.5°C.
We are currently analysing scenarios, including
engaging with our suppliers, to identify the trajecto-
ries for a long-term target in line with the SBTi’s new
Net Zero Standard. We will also establish interim mile-
stones on the path to net zero for our own operations
(Scope 1 and 2) and our value chain (Scope 3) – as well
as looking for opportunities for beyond value chain
mitigation as part of our Climate+ approach. We have
already identified focus areas, set out here.
Our operations
We have made significant progress towards our
existing targets to reduce operational emissions –
primarily through the use of renewable electricity.
Next steps include:
from heating (which are currently offset through
Gold Standard CO2 offsets)
• Phasing out fossil-based inks.
Our value chain
Steps to reduce emissions from our value chain –
upstream and downstream – include:
• Encouraging suppliers to set their own
science-based targets and take action to cut their
greenhouse gas emissions
• Reduce our use of carbon-intensive raw materials
• Supporting carbon storage by sourcing from
sustainably managed forests
• Helping customers cut greenhouse gas emissions
from their factories by reducing energy
requirements for our next generation filling
machines and introducing upgrade kits to cut
energy use in existing filling machines
Increasing recycling rates for used beverage
cartons to avoid emissions from landfill
•
• Seeking lasting uses for the recycled material that
store embodied carbon over the long term.
Beyond our value chain
We also see significant opportunities to extend our
positive climate impact beyond our value chain.
Examples include:
• Continuing to offer the lowest-carbon alternative
to other types of packaging and increase uptake of
our lowest carbon solutions, supported by critically
reviewed life-cycle analyses based on international
standards such as ISO 14040
• Mitigating food loss and waste (and associated
greenhouse gas emissions) through our long-life
packaging solutions and technical innovations
• Driving carbon reductions in the supply chain
for our industry and beyond as an early adopter
of transformative initiatives such as certification
to the Aluminium Stewardship Initiative which
includes strict requirements for carbon reductions
• Seeking further energy savings through efficiencies
• Enabling carbon capture by accelerating efforts
and technology changes where feasible
• Directly investing in more renewable energy
capacity through on-site solar and power
purchase agreements
• Seeking viable alternatives to natural gas, such as
biogas or green hydrogen, to reduce emissions
to restore or create additional hectares of thriving
forests beyond those we need to provide our
raw materials
• Using recycled materials from used beverage cartons
to create a low-carbon alternative to carbon-inten-
sive materials, such as materials for construction.
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Our goals
2025 target
Progress tracker
Reduce Scope 1, 2 and 31 greenhouse gas emissions by 25% per litre of food packed
by 2030 (from 2016)
Reduce Scope 1 and 2 greenhouse gas emissions by 50% by 2025 and by 60%
by 2030 (from 2016)
Maintain 100% renewable energy and Gold Standard CO2 offset
for all non-renewable energy (at production plants)
Expand use of on-site solar power to meet at least 10% of our global electricity use
as part of overall renewable power purchase agreements to meet 25% of our global
electricity use
Transition to 100% bioethanol or other bio-materials for printing
Reduce CO2 emissions from inbound and outbound logistics by 25% (from 2016)
1
The value chain target covers our most significant Scope 3 emissions – from our supply chain, use of our filling machines and
recycling or disposal of packs.
Management overview
We take a holistic approach to tackling climate change at every stage of our value chain. While
we have the most direct influence over our own operations, they account for just 2% of our value
chain carbon footprint. By contrast, an estimated 64% of greenhouse gas emissions lie in our
supply chain from the extraction, processing and transport of raw materials. A further 8% comes
from energy used to operate our filling machines in our customers’ factories, 14% comes from
disposal of our packs after use (where they are not recycled) and the remaining 12% relates to
other categories (see > page 359).
We have developed a series of workstreams designed to meet our science-based targets by
delivering greenhouse gas emissions reductions across the value chain.
Cutting carbon from production
Environmental management systems certified to ISO 14001 at all our production facilities –
and energy management systems certified to ISO 50001 at our European plants – support
continuous reductions in energy use and emissions.
We have achieved carbon neutral production by using 100% renewable energy (electricity
and gas) to manufacture our packs since 2018 – an industry first.
Scope 2 greenhouse gas emissions from production are reduced to zero by switching to 100%
renewable electricity. We purchase renewable electricity through guarantees of origin or
international renewable energy certificates (I-RECs), certified by GoldPower® or EKOenergy, that
verify the energy is generated from renewable sources.
We are also directly investing in renewable energy capacity through solar installations at our own
sites and through power purchase agreements that enable us to secure real-time renewable
electricity from off-site wind turbines.
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With no viable option to source renewable biogas directly, we are instead sourcing it indirectly
by investing in Gold Standard®-certified projects to construct and operate waste-to-energy
systems that capture methane – a powerful greenhouse gas – from landfill sites and use it to
produce renewable energy.
The GoldPower®, EKOenergy and Gold Standard® certifications verify that the energy projects
we invest in deliver measurable emissions reductions to offset our Scope 1 emissions from the
gas and solvents used in production. The projects also create benefits for local communities.
Designing low-carbon packs
Our packs are made up of around 70–80% renewable liquid packaging board from certified
responsible sources. Almost all the energy used to produce this board comes from renewable
sources – wood residues created in the production process.
The high proportion of renewable board in our carton packs, together with their resource
efficient design, makes their life-cycle carbon footprint between 28% and 70% lower than
alternative types of packaging such as plastic and glass bottles, pouches and cans – for a range
of products including long-life food, UHT milk and non-carbonated soft drinks (see charts below).
Polymers and aluminium foil make up the remaining 25% of our packs on average, providing
barrier layers to contain the food inside and prevent moisture, oxygen and light getting in.
The extraction and production of fossil-based polymers and aluminium are carbon-intensive
processes. That’s why we are focusing on reducing or eliminating the need for these materials
by exploring innovative ways to use more renewable or recycled alternatives, and partnering
with suppliers to cut their emissions.
HOW OUR STANDARD CARTON PACKS COMPARE WITH OTHER PACKAGING SOLUTIONS1
Liquid dairy
kg CO2 equivalent per packaging
required for 1,000L UHT milk
Non-carbonated soft drinks
kg CO2 equivalent per packaging
required for 1,000L non-
carbonated soft drinks
Food
kg CO2 equivalent per packaging
required for 1,000L food
-70%
-39%
-28%
-63%
-61%
-58%
-40%
-45%
-34%
85.46
129.18
155.16
87.72
121.18
144.67 295.25
224
378
540
580
609
Beverage
carton
HDPE-bottle
PET-bottle
Beverage
carton
Monolayer
PET bottle
Multilayer
PET bottle
Disposable
glass bottle
Aseptic
carton
Pouch
Pot
Can
Glass
1 Based on life-cycle assessments for UHT milk, non-carbonated soft drinks and long-life food.
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Using renewable or recycled polymers
Our aluminium-free SIGNATURE 100, for use with liquid dairy, is the world’s only aseptic
packaging material to be linked to 100% renewable materials. The polymers in our
SIGNATURE 100 and SIGNATURE FULL BARRIER packaging materials are linked to 100%
renewable, forest-based material via an independently certified mass balance system.
An independent critically-reviewed ISO-conformant life-cycle assessment – the first to take
into account the inclusion of renewable materials via a mass balance system – showed that
SIGNATURE FULL BARRIER can reduce the carbon footprint of a standard 1 litre SIG pack by 45%
and SIGNATURE 100 by 58% (see table).1
HOW OUR SIGNATURE PORTFOLIO COMPARES WITH OUR STANDARD CARTON PACKS
For milk – in a 1 litre cb3 pack
(with cSwift)1
For fruit juice – in a 1 litre cb2 pack
(with cSwift)2
Standard SIG
packaging
material
combibloc
ECOPLUS
packaging material
SIGNATURE
FULL BARRIER
packaging material
SIGNATURE 100
packaging
material
Standard SIG
packaging
material
SIGNATURE
FULL BARRIER
packaging material
Life-cycle carbon
footprint in grams of
CO2 equivalent
% reduction in carbon
footprint compared with
standard SIG pack
63
n/a
45
35
26
–27%
–45%
–58%
65
n/a
41
–36%
1 Results based on ISO-compliant life-cycle assessment CB-100732c for Europe.
2 Results based on ISO-compliant life-cycle assessment CB-100733 for Europe.
Addressing climate impacts from aluminium
Aluminium foil makes up just 4% of our standard packs on average, but accounts for a significant
portion of their life-cycle carbon footprint. Sourcing aluminium foil makes up around 24% of our
value chain footprint.
Our combibloc ECOPLUS and SIGNATURE 100 solutions are the world’s first aluminium-
free packaging materials for aseptic cartons. Both are for use with liquid dairy products
such as plain white milk.
SIGNATURE EVO extends SIG’s lower-carbon aluminium-free packaging materials for use with
oxygen-sensitive products such as fruit juices, nectars, flavoured milk or plant-based beverages.
It is the world’s first aluminium-free solution for aseptic carton packs with barrier properties
comparable to standard aseptic cartons that include an aluminium foil barrier layer.
We are currently working on a life-cycle assessment to quantify the carbon footprint reduction
that can be achieved using SIGNATURE EVO compared with a standard SIG pack. We expect it to
be similar to combibloc ECOPLUS, which cuts the carbon footprint of SIG’s standard packaging
material by up to 27%.1
1 Results based on ISO-compliant life-cycle assessment CB-100732c for Europe.
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SIGNATURE EVO will be launched in early 2022 initially in our portion-sized format combiblocMini.
In future, we plan to launch a SIGNATURE EVO 100 version linked to 100% renewable materials,
which we expect to deliver a further reduction in carbon footprint by linking the polymers to
forest-based renewable materials.3
As our aluminium-free solutions are not yet available in all formats, we are also working with
suppliers to reduce the carbon footprint of the aluminium foil we source through certification to
the Aluminium Stewardship Initiative (ASI) standard for responsible aluminium sourcing.
We are the first in the industry to offer aseptic cartons with ASI-certified aluminium foil
and our aluminium foil suppliers are expected to meet ASI requirements. These include
strict limits for emissions from smelting, the most energy intensive part of aluminium production.
ASI-certified smelters must limit their emissions to no more than 8 tonnes of CO2 equivalent per
tonne of aluminium produced by 2030 (or immediately for new smelters). This is a significant
reduction from the current global average of 12 tonnes of CO2 equivalent per tonne of aluminium
ingot produced.
Driving more sustainable logistics
We deliver billions of carton sleeves to our customers every year. Sending our sleeves in flat-pack
format significantly reduces the amount of space – and therefore journeys, fuel and emissions –
required to transport our packs compared with glass bottles or cans. We aim to further reduce
the number of journeys required by filling each truck as fully as possible.
We work with logistics providers to balance costs and environmental considerations with the
need to deliver our products to customers when they need them – whether it is by truck, rail
or by sea. In exceptional cases where transport may be required by air freight to meet urgent
customer needs, a detailed analysis is performed to check how this can be minimised or avoided.
Environmental criteria, including greenhouse gas emissions, are included in our selection
process for logistics providers and we encourage them to use more fuel-efficient vehicles and
utilise intermodal transport (using multiple modes of transportation such as rail) where feasible
to improve efficiency.
We work with suppliers of our key raw materials to reduce emissions from inbound logistics –
transport of materials to our factories – as well as seeking opportunities to source these
materials locally to reduce the distance travelled.
Making our filling machines more energy-efficient
We aim to improve the efficiency of each new generation of filling machine to help customers
reduce energy use and associated greenhouse gas emissions in their factories.
Our technical service solutions also include energy reduction kits that can be retrofitted to
existing machines, which often remain in operation for decades. Customers can cut emissions
from their filling machines by installing our upgrade kits that reduce energy use.
We also offer remote and digital service solutions that help to prevent downtime and reduce
greenhouse gas emissions from our technical service engineers travelling to customer sites.
3
Linked to wood residues from paper making via an independently certified mass balance system.
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Reducing end-of-life climate impacts
Recycling beverage cartons contributes to the circular economy by keeping high-quality materials
in circulation and reducing the demand for virgin materials. Although recycling does not make
a significant difference to the overall life-cycle impact of our packs because their performance
is already so good, there is a climate benefit to recycling cartons or incinerating them to create
energy compared with sending them to landfill where additional emissions may occur.
All our packs are designed to be fully recyclable and we are committed to partnering with
stakeholders to improve collection and recycling of used beverage cartons (see > page 282).
Removing carbon from the atmosphere
We will fulfil our Climate+ ambition through our support for thriving forests that act as carbon
sinks (see > page 264), as well as other actions designed to remove carbon from the atmosphere.
Climate-related risks and opportunities for our business
Our risk management approach builds on best available practice. Climate-related risks and
opportunities are identified following the recommendations of the Task Force for Climate-
related Financial Disclosures (TCFD). These inform several risk categories in the portfolio
of risks in our annual corporate risk assessment, which identifies our main business risks
based on financial and reputational implications.
Climate-related risks to our business include transitional risks – such as regulations (existing
and emerging), availability of technology, reputation and changes in market demand –
which we assess regularly. They also include physical risks, such as more frequent extreme
weather that could affect our production plants and supply chain resilience.
Addressing physical risks through mitigation and adaptation
We consider acute physical risks to our operations due to climate change and have
adaptation plans in place at the production plants that are most exposed to adverse
weather conditions.
For example, our previous relocation of the production facility on our site in Linnich
(Germany) to reduce the risk of flooding helped to prevent any serious damage during
severe flooding in the region in 2021. Additional preventative measures at the site include
reinforcing the dyke along the adjacent river, checking and renewing drain pipes, and
keeping a stock of sandbags ready to protect the plant in case of severe flooding.
Within our supply chain, we consider long-term chronic physical risks, for example to
Nordic forests that provide much of our liquid packaging board (one of our main raw
materials). Our commitment to source FSC™-certified liquid packaging board and support
thriving, sustainably managed forests is central to our mitigation strategy (see > page 264).
Harnessing opportunities
The low carbon footprint of our packaging is a key differentiator and value driver, and
we see opportunities to help customers meet demand for lower-carbon packaging
through our existing solutions and by growing demand for our lowest-carbon solutions
(see > page 278).
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Our leadership on climate has enabled us to secure sustainability-linked loan facilities –
directly linked to our progress in reducing Scope 1 and 2 greenhouse gas emissions from
our operations – as well as contributing to our strong scores in sustainability ratings for
investors and customers.
Enhancing disclosure
We disclose further information on climate risks and opportunities for our business –
including potential financial impact – through our CDP and DJSI responses. We are working
to integrate the elements of the TCFD framework, including scenario analysis, in our public
reporting by 2023.
Performance in 2021
Advocacy
• Ahead of the COP26 climate conference, we joined other leading businesses in supporting
a call to action led by We Mean Business urging G20 leaders to go all in to keep the Paris
Agreement’s 1.5°C goal within reach.
• We pledged our support for the SBTi's Business Ambition for 1.5°C by reconfirming our
science-based emissions reduction targets across all scopes in line with 1.5°C scenarios – and
committing to set a long-term science-based target to reach net-zero value chain greenhouse
gas emissions by no later than 2050.
• Through the Business Ambition for 1.5°C, we also joined the Race to Zero led by the United
Nations Framework Convention on Climate Change.
• Through the Alliance for Beverage Cartons and the Environment in Europe, we supported
the adoption of an ambitious 2030 roadmap for the industry (see > page 284) that includes
commitments to decarbonise our value chain in line with a 1.5°C scenario and deliver the
lowest carbon footprint packaging.
• Our Way Beyond Good Champions ran an internal awareness campaign on climate change
in the lead up to COP26, with various quizzes, games and other local activities. For example,
117 colleagues in Thailand took part in a climate quiz. Employees across our Asia Pacific
South region sent in more than 400 photos of climate actions to show they had completed
specific actions to reduce their carbon footprint. And a global challenge saw employees
walk, run or cycle a total of over 55,000km to virtually travel around the world to the COP26
summit in Glasgow, Scotland.
Value chain emissions
• We have cut our Scope 1 and 2 emissions by 45% in 2021 – and by 74% from the 2016 baseline.
The significant reduction this year is as a result of our newly acquired operations in the Middle
East and Africa (formerly a joint venture) switching to 100% renewable energy, in line with the
rest of our global production which has been carbon neutral since 2018. Based on the year-on-
year projections we have modelled, we are on track to meet our 60% science-based reduction
target by 2030.
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• We have reduced our Scope 1, 2 and 34 emissions per litre of food packed by a further 3% in
2021 – and by 20% overall from the 2016 baseline – and we continued to decouple value chain
emissions from packs produced. While we increased the amount of food our packs helped
customers deliver by 5% this year, our total Scope 3 value chain emissions only increased by
3% to 1.59 million tonnes of CO2 equivalent.
• SIG was again named on the CDP Supplier Engagement Leaderboard, ranking among the
leading companies for taking action to measure and reduce climate risk within the supply chain.
Operations
• We maintained 100% carbon neutral production with renewable energy at all our production
plants, including our now fully-owned former joint venture in the Middle East and Africa.
We achieved this by using 100% renewable electricity for production and sourcing other
renewable energy indirectly by investing in Gold Standard®-certified offsets. Our switch to
renewable energy for production has avoided over 510,000 tonnes of CO2 equivalent over
the last five years.
• New solar arrays at our production plants in Brazil, China and Thailand increased our total
on-site solar capacity to 11.3MWp by the end of 2021 (up from 4.8MWp in 2020).
• We extended our direct investment in renewable capacity beyond our own sites for the first
time through a power purchase agreement that will deliver power from two wind turbines in
real time – as it is generated – to our production plants in Germany. The turbines have a total
capacity of 2.6MWp and generate around 2,800MWh annually, enough to supply 1,000 four-
person households for a year.
• On-site solar power met 2% of our global electricity use in 2021 and power purchase
agreements (including both on-site and off-site) met 3%.
• The greenhouse gas emissions intensity of our production decreased by 10% to 15 tonnes
•
CO2 equivalent/million m2 of sleeves produced in 2021.
In addition to sourcing renewable energy, we continued to implement initiatives to improve
the energy efficiency of our plants, such as optimising cooling systems in Rayong (Thailand)
and demonstrating annual energy reductions at our European plants as part of their
certification to ISO 50001.
• Our newly opened second plant in Suzhou (China), certified to the LEED Gold sustainable
buildings standard, is designed to minimise carbon emissions. Rooftop solar panels can
provide 1.5 million kWh of solar energy and the building maximises use of daylight and
efficient lighting devices to reduce energy consumption.
• We are piloting the use of smart meters at our plants in Curitiba (Brazil) and Riyadh
(Saudi Arabia) that enable real-time monitoring of energy use in specific parts of our
production processes to help us identify opportunities for further efficiencies.
• Overall, our energy conservation programmes contributed to a 5% reduction in the energy
intensity of our production to 192MWh/million m2 of sleeves produced in 2021.
Raw materials
• We continued to engage with suppliers of our main raw materials – liquid packaging board,
polymers and aluminium foil – to encourage them to take climate action and request data
on the proportion of their greenhouse gas emissions related to production of the materials
used in our products to help us focus our efforts where we can make the biggest difference
to reducing our footprint. A key supplier that provides us with the biggest volume of materials
has now set a target to halve emissions from its full supply chain.
4
Includes our most significant Scope 3 emissions – from our supply chain, use of our filling machines and recycling or disposal of packs.
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• 69% of our A materials5 (by volume) came from renewable sources in 2021 – mostly liquid
packaging board as well as the polymers linked to 100% renewable materials6 for the growing
number of packs sold with our SIGNATURE 100 and SIGNATURE FULL BARRIER solutions.
• Five of our aluminium foil suppliers in Brazil, China and Europe – representing over 70% of
our global aluminium foil supply – have now achieved certification to ASI, which includes
strict requirements on carbon reductions in the smelting process. We have nearly doubled
our use of ASI aluminium globally over the last year.
• We have switched from fossil-based solvents to plant-based bioethanol for our printing
processes at six of our production plants – including our newly opened second plant in
Suzhou (China) – and we are working with suppliers to complete this transition worldwide.
The plant-based ethanol we use is made from agricultural residues, not food crops.
Packs
• Sales of our lowest-carbon packaging materials – combibloc ECOPLUS, SIGNATURE 100
and SIGNATURE FULL BARRIER – increased by 21% this year with 554.6 million litres of food
packed in SIG packs with these three SIGNATURE portfolio packaging materials in 2021.
• We have now sold enough packs with SIGNATURE portfolio solutions to fill more than
2.1 billion litres of food. Together, these products have saved an estimated 43,000 tonnes of
CO2 equivalent emissions compared with our standard packs. As sales of these sustainable
innovations grow so will the associated carbon reductions.
• We developed the world’s first full barrier aluminium-free solution for aseptic carton packs
that provides comparable barrier properties to our packaging with aluminium foil so it can be
used with oxygen-sensitive products, such as juices, as well as liquid dairy. SIGNATURE EVO
will be launched in early 2022 in our combiblocMini portion-sized format and will later be
extended to other formats. We are currently working on a life-cycle assessment to quantify
the carbon footprint reduction that can be achieved using SIGNATURE EVO compared with
a standard SIG pack.
• We remain the only carton producer to offer ASI-certified aluminium and we have now sold
more than 660 million ASI-labelled packs as more customers have opted to display the ASI
label on their packs to demonstrate and raise awareness of responsible aluminium sourcing.
• Following critical review, this year the German Federal Environment Agency (UBA) approved the
results of a life-cycle assessment commissioned by the German Beverage Carton Association
FKN which found that single-use beverage cartons compare favourably with reusable glass
bottles – outperforming single-use PET bottles – across the fresh milk, juice and UHT milk
market segments.
See > page 301 for more on our latest sustainable innovation developments and uptake of the
lowest-carbon solutions for our packs.
Logistics
• Emissions from our global outbound logistics decreased by 8% in 2021 to 64,712 tonnes of
CO2 equivalent, and we maintained a high rate of full truck loads (95%).
• We continued to work with outbound logistics providers to explore opportunities to reduce
emissions through, for example, the use of multimodal transport where lead times and
transport networks allow, the use of electric trucks or alternative fuels for ocean freight.
• We are working to reduce the distances our packs need to travel to customers by increasing
local production capacity to serve the Asia Pacific region (with our second plant in China) and
the Americas (with a new plant in Mexico currently under construction).
5 A-materials are those that go directly into our packs – paperboard, polymers, aluminium foil and ink.
6
Linked to wood residues from paper making via an independently certified mass balance system.
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• To reduce emissions from inbound logistics, we took steps to increase the volume of materials
we source for our production plants from the region where each plant is located.
• Overall, upstream logistics emissions (covering SIG’s inbound and outbound transportation)
have increased by 23% from the 2016 target baseline, largely as a result of our 2020 acquisition
that included a production plant in Australia. However, we reduced these emissions by 4% this
year following the closure of the Australian plant in June 2021.
Filling machines
• Launched in late 2021, our next generation filling machine for family size carton packs,
SIG NEO, offers significant improvements in efficiency by reinventing key elements of the
folding, sterilising and filling process. By reducing energy use, it is designed to offer a 25%
lower carbon footprint for the filling and packaging process per pack compared with our
third-generation filling machines.
• We rolled out our SureBrite semiautomated cleaning machine – which can reduce energy use
by up to 82% compared with manual cleaning – to six more filling machines in 2021 and it is
now installed on 19 of our third-generation filling machines.
• We continued to develop upgrade kits designed to deliver reductions in energy use and
compressed air, which we aim to offer to customers in 2022.
• We extended our remote technical service offering, which reduces travel and associated
emissions, to more customers this year. We also introduced our Plant 360 Asset Health
Monitoring to improve efficiency and enable effective condition-based maintenance of our
filling machines in customer factories.
Recycling
See > page 282 for information on how we are supporting efforts to increase recycling of used
beverage cartons.
Removing carbon from the atmosphere
See > page 264 for information on how we are taking carbon out of the atmosphere by supporting
thriving forests.
OUR VALUE CHAIN CARBON FOOTPRINT (thousand tonnes of CO2 equivalent)1
Scope 12
Scope 2
(market based)3
Scope 3
Total
2016
29.1
84.0
2017
38.5
28.6
2018
34.4
32.5
2019
34.5
27.9
2020
31.1
22.9
2021
29.8
0
1,544.8
1,657.9
1,463.2
1,530.3
1,533.1
1,600.0
1,578.7
1,641.1
1,536.1
1,590.0
1,587.2
1,616.9
1
2
Data on greenhouse gas emissions for previous years have been restated to reflect revised scope of greenhouse gas targets and
baselines as a result of changes to the business, and in line with Greenhouse Gas Protocol requirements.
We have invested in Gold Standard®-certified projects to offset our Scope 1 emissions to achieve carbon neutral production for all
our fully-owned plants since 2018 (including our former joint venture in Middle East and Africa from 2021).
3 Our location-based emissions (based on the electricity grid average amount) totalled 98.3 thousand tonnes of CO2 equivalent in 2021.
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VALUE CHAIN EMISSIONS RATE
(Scope 1, 2 and 31 grams CO2 equivalent/
litre of food packed)
SCOPE 3 EMISSIONS by category in 2021
2016
2017
2018
2019
2020
2021
99
92
93
90
82
79
1
The value chain emissions rate and associated target
covers our most significant Scope 3 emissions – from our
supply chain, use of our filling machines and recycling or
disposal of packs. See > page 359 for more on the basis of
reporting for greenhouse gas emissions and a detailed
list of what is included in each Scope 3 category.
9%
14%
66%
Purchased goods and services
End-of-life treatment of products
Use of products
Upstream transportation
Downstream transportation
Fuel and energy related activities
Other (waste and business travel)
SCOPE 1 AND 2 GREENHOUSE GAS EMISSIONS INTENSITY FROM PRODUCTION2
(tonnes CO2 equivalent/million m2 of sleeves produced)
68
42
40
35
17
15
2016
2017
2018
2019
2020
2021
2
Energy intensity and emissions intensity are reported per million square metres of sleeves produced and exclude energy use at
our closure production plant in Switzerland and our paper mill in New Zealand (which was sold in June 2021).
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ENERGY INTENSITY OF PRODUCTION1 (MWh/million m2 of sleeves produced)
223
223
216
216
210
210
194
194
201
201
197
197
2016
2017
2018
2019
2020
2021
1
Energy intensity and emissions intensity are reported per million square metres of sleeves produced and exclude energy use at
our closure production plant in Switzerland and our paper mill in New Zealand (which was sold in June 2021).
2016
2017
2018
2019
2020
2021
ENERGY USE FOR PRODUCTION1 (GWh, by type)
Natural gas
Liquified natural gas
Diesel
Electricity
(non-renewable)
Electricity
(renewable)
Total
2016
96
12
0
157
71
335
2017
123
12
0
40
189
363
2018
132
10
0
45
198
386
2019
134
8
0
41
201
385
2020
133
6
1
34
209
383
2021
133
7
1
0
261
402
1 Energy use for production includes our closure production plant in Switzerland.
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RESOURCE+
Material issue
Recycling and circular economy
Significant impact
Recycling and circular economy (environmental, economic)
Key performance indicators
% SIG packaging portfolio that is recyclable
Key policies
• Product Stewardship Policy
• Global R&D Process Handbook
• Standard Operating Procedure to improve used beverage carton
collection and recycling in regions
Relevant SDGs
Responsible
Design for recycling and recycled content is jointly led by
Global Technology and Global Marketing. Local teams are
responsible for helping to drive progress on collection and
recycling, with oversight from Regional Presidents.
Evaluation of management approach
Internal audits and regular review of performance against
The Way Beyond Good targets by the Group Executive Board,
ASI Performance Standard certification audits (in relation to
product stewardship)
Grievance mechanism
Grievance mechanisms set up as part of local collection and
recycling partnerships, or Ethics & Compliance Hotline
Why is this material for SIG?
Our mainly renewable and fully recyclable packaging solutions can help to regenerate and
preserve resources, and support the transition to a circular economy that’s needed to address
the global challenges of increasingly scarce natural resources and the planet’s limited capacity
to absorb waste.
Stakeholder expectations and regulations are growing to manage the environmental impact of
packaging waste, including the potential to harm marine wildlife when discarded as litter. Major
consumer brands are setting ambitious goals to increase renewable and recycled content, and
improve the recyclability of their packaging.
Our packs, together with sustainable innovations such as our paper straw solutions, enable us to
support our customers in meeting their goals and complying with new regulations on packaging.
Recycling our cartons keeps high-quality renewable materials from certified sources in
circulation to create new products and helps to prevent packaging and litter from polluting the
world’s oceans. We see a strong opportunity to support our customers and the environment by
collaborating with stakeholders to enhance the rate of cartons that are collected and recycled
across our markets.
Many of the programmes we support have a wider impact by increasing collection and recycling
of other types of packaging too. We can also bring additional societal benefits by adopting
models for recycling programmes that support underprivileged people.
Our commitment: Accelerating innovation on circularity
The way that the world sources and uses resources today is not sustainable. The system we all
rely on is one in which materials are generally extracted and used once before being disposed of.
The time has come to shift to a circular economy, in which materials circulate continuously
within technical or biological loops, either being recycled or fed safely back into natural cycles.
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At SIG, the materials we use to make our packs – liquid packaging board, aluminium and
polymers – can all work within those loops. In fact, our packs are already fully recyclable. And
70–80% of the material used to make them, paperboard, is a renewable resource that comes
from sustainable forests.
It’s a good start. Moving forward, we will progressively use less polymer and prioritise renewable
or bio-based sources. Likewise, we will strive to replace aluminium or ensure that it comes from
recycled sources. And we will support the development of recycling infrastructure so that even
more cartons are collected and recycled.
This will not happen overnight, and it cannot be done alone. But the path we need to walk is a
circular one – and this is how we get there.
Our Resource+ efforts also support our Climate+ ambitions (see > page 268).
Supporting the principles of the circular economy
The Ellen MacArthur Foundation sets out three principles for a circular economy and we
are committed to each of them:
• Design out waste – We strive to minimise production waste and optimise use of materials
through the design of our packs, including through innovations such as our RS structure,
which optimises use of materials while improving the robustness of our packs during
processing and distribution.
• Regenerate natural systems – All our beverage cartons are made mainly from renewable
paperboard that originates from certified sustainably managed forests, and we are
committed to increasing this through our SIGNATURE portfolio of sustainable packaging
material innovations.
• Keep products and materials in circulation – All our packs are designed to be fully
recyclable. We are committed to partnering with stakeholders to increase collection and
recycling of used beverage cartons, and repurpose the materials. We also offer the option
to link polymers in our packs to post-consumer recycled content with our SIGNATURE
CIRCULAR solution.
The circular economy model is underpinned by the transition to renewable energy sources
and we are committed to using 100% renewable energy for production (see > page 268).
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2030 industry commitments in Europe
We are fully committed to the 10 commitments set out for the industry in the ambitious
2030 roadmap set by the Alliance for Beverage Cartons and the Environment in Europe to:
• produce beverage cartons only from renewable materials
• and/or produce beverage cartons from recycled materials
• use more fibre and less plastic
• decarbonise our value chain in line with 1.5°C target
• deliver the lowest carbon footprint packaging
• design for circularity
• achieve a 90% collection rate of beverage cartons for recycling
• achieve at least a 70% recycling rate verified by third parties
• meet the highest sustainability sourcing standards for all materials
•
increase carbon sequestration, enhance biodiversity and increase forest growth
Our goals
2025 target
Progress tracker
Launch a full barrier carton linked to 100% renewable materials1
(see Sustainable innovation, > page 296)
Launch a pack made with 100% recycled content
(see Sustainable innovation, > page 296)
Partner with stakeholders to implement dedicated and country specific roadmaps
to support increased collection and recycling of beverage cartons
1 Target changed from ‘Launch a pack made of 100% renewable materials’.
Management overview
Designing out waste
Our standard procedures mandate that new packaging designs must demonstrate optimised
resource use compared with previous models, while continuing to deliver the high quality
required for aseptic food packaging and the functionality that customers and consumers
demand. We also aim to minimise waste in our production processes (see > page 328).
Sourcing sustainably
We use certifications to rigorous external standards to ensure the resources we purchase are
produced responsibly (see > page 306).
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Using renewable and recycled materials
Unlike most packaging alternatives, our cartons are made mainly from renewable materials
(around 70–80% on average). This means that cartons are already contributing to the circular
economy at the start of their life by using renewable materials that support the regeneration of
natural resources.
combibloc ECOPLUS, the world’s first aluminium-free packaging material for aseptic
cartons, increases the renewable content of packs to 82%. And SIGNATURE 100 is the
world’s first packaging material for aseptic cartons linked to 100% renewable material.1 Both
these solutions are for use with liquid dairy products such as white UHT milk.
Our latest evolution, SIGNATURE EVO, is the world’s first full barrier aluminium-free
solution for aseptic cartons. To be launched in early 2022, it will provide comparable
barrier properties to our packaging materials that include an aluminium foil barrier layer so it
can be used with oxygen-sensitive products, such as juices, as well as liquid dairy. We plan to
launch a SIGNATURE EVO 100 version of this aluminium-free full barrier carton in future, which
will be linked to 100% renewable materials by linking the polymers to forest-based renewable
materials via a certified mass balance system.
We also offer paper straw solutions, the first available for use with aseptic carton packs,
as renewable alternatives to plastic straws for our small format on-the-go packs.
Some of the materials used to make our packs are produced from by-products from other
industries, such as wood chips and tall oil (wood residue from paper making) that might
otherwise be used as fuel to generate energy. Using these materials to create new products
supports the circular economy by retaining their natural and economic value as a resource
for longer – particularly as cartons can then be recycled into new products again after use. In
addition, some of the aluminium foil that goes into our packs is made from industrial scrap,
including 100% of the aluminium foil provided by one of our main suppliers.
We are also looking for ways to include post-consumer recycled materials in our packs that
can help us reduce our environmental footprint and continue to deliver food safely, as well as
increasing demand for recycled materials.
Including post-consumer recycled materials in our packs is particularly challenging due
to the lack of availability of post-consumer recycled content that meets the high quality
and food safety requirements for aseptic cartons that must keep food safe for long periods of
time without refrigeration.
In a groundbreaking partnership with SABIC, we are offering post-consumer recycled
materials for aseptic packs for the first time. Using chemical recycling, low-quality mixed
plastic packaging waste is broken down into material that can be transformed into polymers
that offer the same high quality as those made from virgin raw materials. Any contaminants are
eliminated during processing, making the recycled material completely safe for food packaging.
The polymers used in our SIGNATURE CIRCULAR packaging material are linked to these recycled
plastics through a certified mass balance system. Both chemical recycling and the mass balance
system are endorsed by The Ellen MacArthur Foundation as valid ways to advance the circular
economy.2
1
Linked to wood residues from paper making via an independently certified mass balance system.
2 The Ellen MacArthur Foundation Mass Balance White Paper and New Plastics Economy.
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Designing for recyclability
To enable materials to be used again, we make sure all our packs are fully recyclable by design.3
Closures can be recycled together with the cartons and we are developing new tethered cap
solutions to help ensure they remain with the packs for recycling. Similarly, straws should be
pushed inside packs for recycling together with the cartons.
The raw materials from used cartons can be separated and recycled to make new products.
The high-quality paper fibre that makes up around 75% of beverage cartons can be separated
and recycled relatively easily for reuse at paper mills. The remaining polymer and aluminium
mix (PolyAl) can be reused together as a robust material for roof tiles or furniture. Separating
the PolyAl into polymers and aluminium enables wider applications for the recycled materials.
Partnering to support collection and recycling of used beverage cartons
Although beverage cartons are fully recyclable, not all of them are currently recycled
because:
• consumers may be unaware that cartons are recyclable or do not separate them for recycling
infrastructure for separate collection of packaging from household waste is not always
•
available locally
• facilities for recycling used beverage cartons and their component materials (such as PolyAl)
may not be available at the scale needed.
Recycling of packaging is an industrywide issue and we partner on this with many different
stakeholders, including industry peers, customers, consumers, and national and local
governments. As recycling rates, regulations and infrastructure vary widely in different countries
and municipalities, we take a tailored approach through local roadmaps in priority countries.
We have developed roadmaps for all 24 priority countries across our regions – identified as those
most in need of support to boost recycling rates based on criteria such as national recycling
rates, business volume and market share, risk assessments and customer requirements.
Together, these countries represent around 90% of the packaging we sell (by weight) worldwide
and 90% in each region.
This structured approach is designed to help us target our efforts where we can make the most
impact. We have developed tailored local strategies and roadmaps to catalyse collection and
recycling in each priority country and we are partnering with local stakeholders to implement
these.
We work through industry partnerships (see next page) and partner with stakeholders to increase
recycling rates by:
• advocating through industry associations, such as the Alliance for Beverage Cartons and the
Environment (ACE), to ensure an enabling regulatory framework for collection and recycling
of beverage cartons, including extended producer responsibility legislation for packaging
• partnering with customers and local stakeholders to raise consumer awareness and support
collection and recycling of beverage cartons to help increase recycling rates
• supporting the development of innovative models for programmes to boost recycling and
provide additional societal benefits, such as the partnership with so+ma we have established
in Brazil, and the expansion of successful models to more markets
3 Our evaluation of recyclability is based on the relevant EN643 standard.
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• driving advancements in technology and improving availability of recycling infrastructure
through collaboration platforms, with a particular focus on new facilities to process PolyAl
into polymers and aluminium, or to process all three key materials from used cartons
together into new recycled products
increasing demand for recycled materials from used beverage cartons by showcasing
potential uses.
•
Industry partnerships
We are advocating and driving initiatives to increase collection and recycling of used
beverage cartons through industry partnerships, including:
Performance in 2021
Designing for circularity
See > page 296 for information on how we are designing for circularity through our focus on
sustainable innovation.
Driving recycling through industry collaboration and advocacy
• We continued to advocate and drive activities and guidelines on recyclability, collection and
recycling at global, regional and national level through industry partnerships such as the
Global Recycling Alliance for Beverage Cartons and the Environment (GRACE), EXTR:ACT, The
Consumer Goods Forum’s Coalition of Action on Plastic Waste, 4evergreen, AIM’s HolyGrail 2.0
initiative, and ACE in Europe. SIG retained the ACE presidency in 2021.
• Together with other ACE members, we committed to the 10 commitments set out for the
industry in the ambitious 2030 roadmap launched by ACE this year (see > page 284). ACE also
developed a position paper on extended producer responsibility for beverage cartons and
guidelines on design for recycling.
• ACE has been reporting the recycling rate for beverage cartons annually for many years.
However, there are delays in country-level reporting on 2020 rates due to changes to the EU
calculation methodology. The beverage carton industry will report on 2020 recycling rates
when up-to-date verified information is available.
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• Following an ACE campaign asking countries to set targets for separate collection of beverage
cartons for recycling, several countries have introduced policies in this regard. Austria has set
a collection target of 80% by 2025 specifically for used beverage cartons, with all packaging
to be sorted, collected and recycled across the country. Spain has developed a roadmap to
increase collection rates over the next five, 10 and 15 years. The Netherlands plans to publish
a beverage carton recycling target in 2022. And the UK will include used beverage cartons on
the core list for kerbside collection from 2023.
• We are involved in all the workstreams in 4evergreen, an industry alliance with over
80 members covering the full fibre-based value chain that aims to optimise the circularity
and climate performance of fibre-based packaging. These workstreams focus on building
a protocol to evaluate recyclability, developing guidelines for circularity by design and for
collection and sorting, and innovating to accelerate the development of technologies and
processes to enhance circularity of fibre-based packaging.
• We joined more than 85 partners across the packaging value chain in the HolyGrail 2.0
initiative launched by AIM, the European Brands Association, to explore the viability of digital
watermarking – codes on the surface of packaging that are imperceptible to the human eye –
to enable more accurate and efficient sorting of post-consumer waste for recycling.
• We are part of national producer responsibility organisations (PROs), industry associations
and other interest groups that seek to promote recycling in countries such as Australia, India,
Indonesia, Russia, South Korea, Taiwan, Vietnam and the USA.
Partnering on local collection and recycling programmes
• Brazil: Through our partnership with social enterprise so+ma, we opened two more collection
points in Curitiba. Over 1,120 families have signed up to earn rewards, such as food products
and training courses, in return for bringing used packaging to the three collection points now
running in the city. Together, they have collected over 247 tonnes of waste for recycling since
the first collection point opened in December 2018. We have now developed plans to extend
this community recycling model to further cities in Brazil, Chile and Indonesia (see below).
We are also extending the Recicleiros Cidades partnership to boost municipal recycling
programmes and ensure decent working conditions for waste pickers through targeted
support from businesses that also helps them meet their regulatory requirements in relation to
recycling. The 16 cities participating in Recicleiros Cidades have already collected 3,500 tonnes
of waste, reached 940,000 citizens and created 238 jobs for wastepickers over the last four
years. We aim to reach 60 Brazilian cities by 2023 and this year we offered virtual training to
municipalities applying to participate to help them get the most out of the programme.
• China: Through the new Alliance of Technological Innovation in Compulsory Resources
Recycling Industry (ATCRR), we collaborated with industry partners to support the ambitious
collection and recycling targets set by new national extended producer responsibility
legislation. We worked together to develop standards, support recycling companies and
pilot a consumer education programme in Shanghai. In addition, we installed collection bins
made of recycled materials at the Food and Beverage Innovation Forum to promote recycling
and showcase the use of recycled materials, and we organised a staff trip to a remote area of
the country to collect litter to raise awareness among employees.
• Indonesia: We continued a customer partnership and several initiatives in schools and
on social media to educate consumers on responsible waste management and promote
collection of used beverage cartons. Through the SIG Way Beyond Good Foundation, we
commenced preparations to roll out a reward-based community recycling programme in
Jakarta, working with so+ma to build on our successful cooperation in Latin America.
• Russia: We joined RusPRO, which is driving recycling solutions for packaging including used
beverage cartons. We are also involved in the development of a new national industry trade
association that will include recycling as a key focus.
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• South Africa: We partnered with the Fibre Circle, the PRO for the South African paper
and paper packaging sector, to raise awareness and increase recycling rates through a
consumer campaign and competition featuring three carton superheroes: Captain Infinity,
Dr Renewable and Super Transformer.
• Thailand: We continued to raise awareness and provide guidance on how to sort used
beverage cartons for collection and recycling through the Beverage Carton Recyclable Project
(BECARE). Over the past five years, over 2,800 tonnes of used beverage cartons have been
flattened, collected and returned for recycling through BECARE. We also conducted research
in collaboration with students at the University of Virginia Darden School of Business into
innovative uses for the material recycled from used beverage cartons in the country.
• UK: Through ACE UK, we have agreed with Tesco to install collection points at 26 of its stores
in areas of the country that currently lack kerbside collection for used beverage cartons. This
will increase overall collection coverage (kerbside and collection points) to 97% of the UK.
Supporting better recycling infrastructure
• Through GRACE, we have launched an industry partnership with saveBOARD to build a
recycling facility in Australia that will turn used beverage cartons and paper cups into high
performance construction materials. Part-funded through the Australian Government’s
Recycling Modernisation Fund and the New South Wales Government’s Waste Less, Recycle
More initiative, the partnership aims to create a new market for high-performance, low-
carbon, recycled alternatives to products such as plasterboard and particle board for building
interiors and exteriors. By using heat and compression rather than glues or other chemicals
to bond materials together, the facility will produce clean products with zero volatile organic
compounds that are suitable for use in homes and commercial buildings.
• The Palurec facility in Germany, in which SIG is a major investor together with two industry
partners, began operating in 2021. Designed to recover polymers and aluminium from
PolyAl and turn them into marketable raw materials, the facility is designed to process over
18,000 tonnes of material per year.
• Through EXTR:ACT we are keeping apprised of new recycling technologies and facilities
being developed independently and through industry associations – including initiatives
in the Czech Republic, Italy and the Netherlands. Together with Palurec in Germany, these
facilities can already process around 50,000 tonnes of PolyAl annually – enabling polymer
and aluminium to be recovered from approximately 30% of the total PolyAl produced
from recycled beverage cartons in Europe. Through local associations, we are involved in
developing projects to further increase recycling capacity.
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FOOD+
Material issue
Safe food supply
Significant impact
Safe food supply (societal, economic)
Key performance indicators
Volume of nutritious food and beverage
products brought to consumers in SIG packs
GRI
416-1
GRI
416-2
Key policies
• Product Safety and Quality Policy
• Product Stewardship Policy
Relevant SDGs
Responsible
Site quality management and product safety teams, overseen by
the Head of Global Quality Management Responsibility, R&D team
Evaluation of management approach
• Global quality and product safety management reporting system
• Monthly reports to Group Executive Board and
escalation of customer complaints to management
Grievance mechanism
• Integrated customer complaint and claim management system
• Ethics & Compliance Hotline
Why is this material for SIG?
Our aseptic packaging solutions conserve food quality and support sustainable development by
helping customers deliver nutrition and hydration in a safe, sustainable and affordable way to
people around the world.
We are well positioned to support customers in meeting growing consumer demand for healthy
and nutritious food – a trend that has accelerated in the wake of the COVID-19 pandemic – with
solutions that preserve nutrients in chunky foods like soups as well as liquid foods like milk and
fruit juices.
Customers and consumers expect and rely on us to ensure the safety and quality of their
packed goods. The food industry is also subject to strict regulations. Ensuring the safety and
quality of our packaging solutions is therefore fundamental to maintain stakeholder trust and
our licence to operate.
Food is preserved in our packs for long periods of time without refrigeration or preservatives
and our highly-efficient machines also help to prevent food loss during the filling process. We
see opportunities to support wider efforts to use our technology and expertise to tackle food
loss in the value chain, reduce consumer food waste and deliver nutrition to more people.
The scalability and flexibility of our technology is particularly well suited to deliver food to people
in developing countries, to increasingly urbanised populations, and to certain groups such as
children, the elderly or those with specific dietary requirements. The COVID-19 pandemic has
exposed the fragility of supply chains for essential food and our long-life aseptic packaging can
play a role in overcoming short-term food supply challenges.
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Our commitment: Improving access to safe and affordable nutrition
We work in partnership with our customers to deliver food to consumers around the world in
a safe, sustainable and affordable way. That’s our purpose and, together with our steadfast
commitment to high standards for product safety and quality, it underpins our ambition in the
Food+ action area.
We are proud of the role that our cartons play in the global food system. Each year, our aseptic
packaging system brings safe and affordable food and drink to millions – keeping food safe for
months without need for refrigeration or preservatives.
For many, this means that they can simply buy the food or drinks they love, easily and locally.
For others, our carton is the only way to access the nutrients they require, safely and affordably.
That undeniably makes us, and the customers that use our packs for nutritious food and drinks,
a positive force within food. And going forward, we want to boost that positive effect by working
with an ever-wider range of food and drink customers.
We will bring people even more safe and nutritious food and drink, wherever it is needed,
at prices they can afford. We will seek to partner with new customers in regions where safe,
affordable nutrition is inaccessible, and actively work to increase the range and volume of
nutritious foods and drinks that use our cartons.
We will also reduce the amount of food and drink that is lost during filling, storage, transport
and consumption. And we will work with communities to use our filling systems and cartons to
preserve surplus crops that would otherwise be wasted.
And of course, we are constantly looking for new ways to minimise food loss, at every stage of
the supply chain. This is an area where we are well on The Way Beyond Good – and we must
carry on moving forward.
Preventing food loss and waste, and enabling food to be transported and preserved without
refrigeration, can also support our Climate+ ambition.
Our goals
2025 target
Progress tracker
Use SIG’s position within a more sustainable food supply system
to create demonstrable positive impacts on nutrition and hydration
Increase the total volume of nutritious1 food and beverage products brought
to consumers in SIG packs by 50% by 2030 (from 2020)
Support two start-ups per year through our SIGCUBATOR programme
to share unused aseptic filling capacity to deliver nutritious food safely and efficiently
Maintain certification to ISO 9001:2015 at all production plants
Maintain BRCGS AA Grade certification at all sleeves and spout production plants2
1
2
For definition of 'nutritious' please refer to > page 292.
BRCGS was formerly known as the British Retail Consortium (BRC). Additional 2025 target to achieve certification to BRCGS
Packaging Issue 7 discontinued at this point as it is unclear if Issue 7 will be released before 2025.
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Management overview
Delivering nutrition
Helping our customers deliver nutrition and hydration is our core business. We work continually
to develop the most sustainable packaging system that can provide safe and affordable nutrition
in countries around the world, including those with a risk of food or water scarcity as well as
those with limited refrigeration possibilities.
Our aseptic carton packs store high-quality food for long periods of time without the need for
refrigeration or preservatives – and they do so in a cost-effective way. Aseptic processing helps
to retain more nutrients, flavour and colour in food products than other sterilisation techniques.
This makes our packs ideally suited to nutritious foods like milk and fruit juice. They also offer
a more sustainable alternative to plastic bottles for water products to provide hydration on the
go and at home.
We drive progress through product innovation in our packs, filling machines and technical
service, taking into account the diverse needs of customers and consumers in different regions
of the world – from extending access to affordable nutrition in developing countries to tapping
into healthy living trends in developed countries.
Teams at our Tech Centres in Europe and Asia also work together with our customers to develop
new, more nutritious recipes for their products and respond to growing consumer demand
for healthy and sustainable foods. Our SIGCUBATOR programme enables start-ups to access
advice, expertise and consumer-focused insights, as well as use of spare capacity of our filling
machines – either at our own Tech Centres or at existing SIG customers’ plants – to help them
deliver nutritious new food and beverage products.
To understand the role of our packaging systems in delivering nutrition to consumers, we
use established ratings such as the Health Star Rating System to categorise types of products
according to their nutritional profile. We use this categorisation to monitor the amount of food
and drinks delivered in our packs that can contribute to a balanced diet and lead to better
health. We are also developing a methodology to help us understand how much of this is
delivered specifically in the countries where nutrition is most needed.
Maintaining food quality and safety
We regularly assess the health and safety impacts of all our products and services in relation to
food quality and safety. Our integrated quality and product safety management systems help
us identify, mitigate and eradicate risks throughout the value chain, and support continuous
improvement.
The robust quality management systems at all our production plants – and research and
development centres – are certified to the international ISO 9001 standard. All our production
plants are also certified according to the Brand Reputation Compliance Global Standards (BRCGS)1
packaging standard. Plants undergo independent audits to retain their certifications each year.
In addition, the SIG combiLab in our European Tech Centre, which enables customers to test
filling their products in our packs and supports our SIGCUBATOR programme, is certified to the
International Featured Standards (IFS) Food Standard. Food products used for some forms of
testing that cannot be sold, such as those used to test shelf life, are recovered for use as fuel for
renewable biogas plants.
1
Formerly known as the British Retail Consortium (BRC).
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Our production teams complete annual training, and we reinforce a culture of quality and
product safety through regular communication, monitoring and internal audits. We also apply
recognised methods such as hazard analysis and critical control points (HACCP) and risk analysis
tools, such as failure mode and effects analysis (FMEA).
We extend quality requirements to suppliers of the materials that go into our packs and
machines, and we monitor their compliance through our supplier audit and evaluation process
(see > page 304). We also work with customers to make sure product safety and quality are
maintained when our packs are assembled and filled in their factories.
Our integrated complaint and claim management process provides clear guidance on how
customer complaints are managed and our CEO is kept informed about customer complaints,
critical incidents or internal quality issues should they arise. We also have procedures in place to
manage any potential major incidents or product recalls.
Minimising food loss from filling our packs
The biggest impacts we have on reducing food loss are by offering very high sterility rates in our
packaging systems to prevent contamination of the food inside, and by minimising the amount
of packs wasted and food products lost during the filling process at our customers’ factories.
Our robust quality standards help to prevent food loss by minimising the risk of faulty packs
that cannot be sold.
Our highly efficient filling machines have a waste rate of 0.5% or less. This is the lowest
waste rate in the industry and we aim to reduce this further with each new generation
of our machines. The waste rate relates to the amount of packs going to waste during the filling
process, for example during testing at the start of production runs.
When the packs cannot be used, the food products inside may be lost too. With customers filling
billions of our packs every year, our low waste rate can prevent a substantial amount of food
loss compared with our competitors.
Our technical service solutions support further reductions in food loss at our customers’
factories by making our existing machines even more efficient. These include:
• Regular preventative maintenance that helps to reduce waste of packs and loss of the food
products that go into them by helping identify and fix potential faults that could generate
faulty packs that can’t be sold.
• A sterile product changeover upgrade kit that keeps the filling machine sterile during
changeovers from one product to another, reducing downtime and maximising filling of the
residual product in the tank into saleable packs. This can reduce food loss by up to 80%
during changeovers.
• Product flowmeters that increase precision to reduce overfilling and prevent up to
100,000 litres of product being overfilled per machine per year.2
We are also exploring ways to redesign our packs and closures to reduce the amount of food
waste from the residue left inside our packs when consumers empty them.
2 Based on a mid-size machine filling 50 million packs/year with 2 grammes less deviation.
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Partnering to turn food loss into safe nutrition for those most in need
Through the SIG Way Beyond Good Foundation, we are creating innovative models to extend
our support for delivering high-quality, safe nutrition to the people who need it most.
Cartons for Good, the Foundation’s flagship project, helps to prevent food loss and malnutrition
by using our expertise in packaging and filling to help communities preserve surplus crops
locally – and turn them into highly nutritious meals for people in need.
The project is being piloted in Bangladesh, where almost half the children are malnourished.
After harvest time, we buy surplus crops from farmers that they can’t otherwise sell – or when
there is no post-harvest food loss in the fields, we use vegetables from wholesale markets that
would otherwise go to waste. Members of the community boost their livelihoods by lending a
hand to prepare and cook the vegetables into meals, using local recipes such as khichuri.
Trained local teams use our specially designed Cartons for Good food filling unit to preserve the
meals in our long-life carton packs. Together with our NGO partner, BRAC, we then distribute the
filled packs to schools, where the contents are heated up to provide meals for underprivileged
children to keep them well-nourished and enable them to stay in school rather than going out
to work to pay for food. The empty packs are then recycled after use.
In a full month of operation, the Cartons for Good filling unit can turn
up to two tonnes of food that would otherwise have been lost into
6,000 meals preserved in SIG packs.
As SIG packs are able to preserve and distribute ready meals not just
drinks, we are able to deliver more nutrition per pack. A Cartons for
Good portion of vegetable pumpkin khichuri can provide a child with
nearly three times as much nutrition as a 200ml carton of milk.
We provide the technology and expertise for Cartons for Good. For
the pilot, we are also funding the purchase of food from farmers and
paying the wages of local people supporting the project through the
SIG Way Beyond Good Foundation. We are exploring how to develop
a self-sustaining model to bring this innovative solution to more
communities across Bangladesh and beyond.
OUR CARTONS FOR GOOD MODEL
1
Farmers bring their
surplus crops to sell at
harvest time.
4
After use,
the packs
are sent for
recycling locally.
2
The crops are turned into
nutritious meals and
preserved in SIG packs
using our specially
designed mobile
filling unit.
3
Local schools
give the packs to
children so they
don’t have to drop out
of school to pay for food.
Performance in 2021
Delivering nutrition
• The packs we sold helped customers deliver 18 billion litres of food and beverages to
consumers around the world in 2021.
• We have begun tracking and reporting the amount of food and beverages that helps
contribute to a balanced diet and lead to better health (as defined by the independent
Health Star Rating System) filled in our packs to better understand the role of our packaging
solutions in delivering nutrition to people around the world.
• Our packaging systems enabled customers to bring 10.6 billion litres of nutritious food and
beverage products to consumers in SIG packs in 2021, an increase of more than 5% from
10.0 billion litres in 2020. We have set a target for 2030 to increase this volume by 50%
from 2020.
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• Three more start-ups used our new SIGCUBATOR programme to gain advice, consumer
insights and access to our filling machines to pack nutritious new products on a small scale,
including nutritious plant-based milk alternatives and protein drinks. For example, Belgian
start-up Tiptoh partnered with SIG and our customer Olympia Dairy to bring a new range of
pea protein beverages to the Belgian market in packs using our SIGNATURE FULL BARRIER
solution, filled on SIG machines at Olympia Dairy’s factories. UK-based GROUNDED, one of
the first two start-ups to use the programme in 2020, has now launched its range of plant-
based protein shakes aimed at health-conscious consumers.
• Some of our local teams also donated food to people in need as part of our community
engagement programmes (see > page 333).
Maintaining food quality and safety
• We maintained our group-wide certification to the revised ISO 9001:2015 standard in 2021.
• All our production plants have achieved AA Grade certification to the current issue of the
BRCGS Packaging standard, Issue 6.
• The SIG combiLab at our Tech Centre Europe maintained certification to the International
Featured Standards (IFS) Food Standard.
• There were no incidents of non-compliance concerning the health and safety impacts of
products and services in 2021.
Minimising food loss from filling and using our packs
• We maintained the industry-leading waste rate of our filling machines – 0.5% or less – and
launched our next generation machine, SIG NEO, which is designed to cut this even further.
• The combivita pack and truTwist closure created for use with our next generation filling
machine are designed to improve pourability to reduce the amount of food residue left in a
pack after use.
• We have introduced a solution that reduces the amount of food that has to be destroyed after
safety testing by filling sample packs – packs that are filled, stored and sent to laboratories for
mandatory food safety tests – half full rather than completely full.
Partnering to turn harvest food loss into safe nutrition for those most in need
• Following a hiatus due to school closures and COVID-19 restrictions, the pilot of Cartons for
Good restarted in Bangladesh in August 2021, turning farmers’ food loss into more than
6,900 nutritious meals delivered to schools for 180 children in the urban slums of Dhaka by
the end of the year.
• During school closures, we maintained our support by delivering more than 500 regular
aid packages of a month’s food supply and other essentials to support the families of the
children who normally receive school meals through Cartons for Good. We also extended
food parcels to the local workers who usually support the project.
• We continued to explore ways to create a self-sustaining model to scale up the Cartons
for Good pilot, including an option to turn food loss into nutritious meals that can be sold
in our packs, using the proceeds to fund the Cartons for Good school meals programme.
We created several recipes, such as vegetable curries, using food that would otherwise be
wasted. These were well received by consumers in initial testing, which showed there is a
market for such readymade meals in Bangladesh. Unlike other readymade meals on the
market, these last for several months without needing to be refrigerated.
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SUSTAINABLE INNOVATION
Material issue
Sustainable packaging innovation
Significant impact
Sustainable packaging innovation
(environmental, societal, economic)
Key performance indicators
GRI
301-1
• Food packed in SIGNATURE portfolio
packaging material innovations
• ASI-labelled packs sold
• Impact mitigation potential of innovations
related to current standard product
(tonnes polymer saved by RS Structure)
Key policies
• Product Stewardship Policy
• Global R&D Process Handbook
• Policy on Reuse and Disposal of Used Equipment
Why is this material for SIG?
Relevant SDGs
Responsible
Global Technology, Global Research and Development and
Global Engineering & Application teams, with support from
Global Marketing and our Chief Technology Officer who sits
on the Group Executive Board
Evaluation of management approach
Independent life-cycle assessments, internal audits and regular
reviews of progress by our Responsibility Steering Group and
our Group Executive Board, ASI certification audits (on product
stewardship related to products containing aluminium foil)
Grievance mechanism
Ethics & Compliance Hotline
Sustainable innovation in packaging can support the transition to a low-carbon, circular economy.
As stakeholder interest in the environmental impacts of packaging grows, our packs’ strong
sustainability credentials also offer an increasingly important differentiator across our markets.
Through our sustainable product innovation, we are raising the bar for the industry while
helping customers and retailers respond to new regulatory requirements and achieve their own
targets on sustainable packaging.
By innovating to make our filling machines more efficient, we can also enable customers to reduce
resource consumption, emissions and running costs from packing products in their factories.
Our commitment
We aim to be the leader in sustainable packaging. We are committed to investing in research
and development to better meet the needs of customers and consumers, including enhancing
the environmental performance of our packaging solutions.
Our sustainable product innovation supports our commitments to reduce the carbon footprint
of our packs and filling machines (see > Climate+, page 268), regenerate resources and contribute
to a circular economy (see > Resource+, page 282), use more materials from sustainably managed
forests (see > Forest+, page 264), and minimise food loss and waste (see > Food+, page 290).
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Our goals
2025 target
Launch a full barrier carton linked to 100% renewable materials1
(also a target for Resource+, see > page 282)
Launch a pack made with 100% recycled content
(also a target for Resource+, see > page 282)
Progress tracker
Reduce energy use by 20%, hydrogen peroxide use by 35% and
water use by 25% per hour of runtime in our next generation filling machine
for mid size format packs (by 2021)
2
Reduce use of consumables by 25% for the next generation filling machine
for small format packs
1 Target changed from ‘Launch a pack made of 100% renewable materials’.
2 Target date extended from 2021 to 2022 due to delays in starting field testing.
Management overview
Sustainability criteria are systematically integrated as core value drivers in our product
development, alongside product safety and commercial considerations. We consider
life-cycle
the environmental
assessments (LCAs) carried out by independent experts using the ISO 14040 international
standard and critically reviewed by an independent panel. See life-cycle graphic below.
innovations through robust
impacts of our packaging
Taking a life-cycle approach
Independent LCAs show that beverage cartons offer significant reductions in life-cycle
environmental impacts compared with other types of packaging, such as glass, plastic bottles
or cans. Our most sustainable packaging material innovations – our SIGNATURE portfolio –
offer significant further improvements to the life-cycle impacts of our packs (see > page 273).
All our packs are designed to be fully recyclable (see > page 282).
REDUCING OUR CARBON FOOTPRINT AT EVERY STAGE OF THE LIFE-CYCLE (% of life-cycle carbon footprint1)
60% 8% 16% 6% 10%
Design
Minimising the life-cycle
impacts of our packaging
solutions starts with design.
Environmental factors are
core value drivers in our
product development. All
our new packaging designs
must demonstrate optimised
resource use compared
with previous models.
And we are cutting carbon
further through sustainable
innovation.
Sourcing
Our packs are made mainly
from renewable liquid
packaging board from
certified sources that support
sustainable forestry. We
partner with suppliers on
innovative solutions for
renewable and recycled
polymers, and we aim to
source all our main materials
from certified responsible
sources, including aluminium
foil certified to the ASI
standard that requires
smelters to limit their carbon
emissions. See > page 264
and > page 304.
Manufacturing
We make our sleeves
and closures using 100%
renewable energy, and
our ISO 14001 certified
environmental management
systems support continuous
improvement in energy
use and emissions at our
plants. See > page 268 and
> page 328.
Transport
We reduce transport
emissions by delivering our
carton sleeves in flat-packed
form and filling trucks fuller
for fewer journeys and less
fuel use. Our lightweight
packs also help customers cut
emissions from distributing
their products and avoid
the need for refrigeration.
See > page 268.
Filling
We improve the efficiency
of our filling machines with
every new generation, and
our technical service teams
help customers minimise the
energy needed to operate
our existing machines.
See > page 268.
Recycling
We make sure all our packs
are designed to be fully
recyclable, and we partner
with stakeholders to raise
consumer awareness
and support efforts
to improve local
collection and recycling.
See > page 282.
1
Indicative figures referring to the climate impact of an average 1 litre SIG pack in EU28 based on our LCA tool.
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Leading the industry on sustainable innovation
Our strong focus on sustainable innovation has enabled us to achieve a host
of industry firsts:
• The world’s first aluminium-free packaging material for aseptic cartons, combibloc ECOPLUS,
made with 82% renewable liquid packaging board, for use with dairy products.
• The world’s first bottle-shaped aseptic carton, combidome, which looks and pours like a
bottle with the environmental benefits of a carton.
• The world’s first aseptic carton packaging material linked to 100% renewable materials, the
aluminium-free SIGNATURE 100, made with polymers linked to forest-based residues from
papermaking.1 The SIGNATURE FULL BARRIER option includes an ultra-thin aluminium barrier
layer for use with products such as orange juice that are more sensitive to light and oxygen.
• The world’s first paper straw solutions for use with aseptic carton packs – straight, U- and
telescopic. Our paper straws are made with FSC™-certified paper.
• The world’s first aseptic carton packaging material, SIGNATURE CIRCULAR, with polymers
linked to 100% post-consumer recycled plastics.2
• The world’s first aseptic carton packaging materials with ASI-certified aluminium foil and the
only cartons that can carry the ASI label.
The latest innovation in our SIGNATURE portfolio – SIGNATURE EVO, to be launched in early 2022 –
will offer the world’s first full barrier aluminium-free solution for use with both liquid dairy and
oxygen-sensitive products such as fruit juices, nectars, flavoured milk or plant-based beverages.
Going 100% renewable
Liquid packaging board gives our packs their robust structure. Polymers provide a barrier to
contain the liquid contents of the pack and prevent moisture getting in. And an ultra-thin layer
of aluminium protects the contents from oxygen, external odours and light.
Our standard packs are already made from around 70–80% renewable liquid packaging board
on average. An important focus of our sustainable innovation is on increasing the renewable
content of our cartons even further by looking for renewable alternatives for the polymer and
aluminium barrier layers.
The polymers used in our SIGNATURE 100 and SIGNATURE FULL BARRIER packaging materials
are linked to renewable materials via a certified mass balance approach. This ensures the
amount of forest-based raw materials we need is mixed in with conventional fossil-based
feedstock to produce polymers to the required grade.
The mass balance system supports a transition from fossil to renewable raw materials within
the conventional and highly efficient polymer industry. It is endorsed by The Ellen MacArthur
Foundation as a valid way to support the circular economy.3
We led the industry with the first aluminium-free solutions for aseptic cartons – combibloc
ECOPLUS and SIGNATURE 100. Both of these packaging materials are for use with oxygen
insensitive products, such as white UHT milk, only.
1
Linked to wood residues from paper making via an independently certified mass balance system.
2 Via an independently certified mass balance system.
3 The Ellen MacArthur Foundation Mass Balance White Paper.
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Developing an aluminium-free pack that maintains the full barrier properties required to
preserve oxygen sensitive products, such as juices, was more challenging because it is
difficult to find an alternative material with the same protective properties as the ultra-thin layer
of aluminium foil in our standard packs.
Our microwavable Heat&Go packs, launched in 2018, offer an enhanced barrier film to
protect the contents from oxygen, flavour migration and moisture, as well as a pigmented
laminated layer to block light.
SIGNATURE EVO, our latest aluminium-free innovation, continues this evolution. To be
launched in early 2022, it will provide comparable barrier properties to our packaging
materials that include an aluminium foil barrier layer so it can be used with oxygen-sensitive
products, such as juices, as well as liquid dairy. We plan to launch a SIGNATURE EVO 100 version
of this aluminium-free full barrier carton in future, which will be linked to 100% renewable
materials by linking the polymers to forest-based renewable materials via a certified mass-
balance system.
Optimising use of materials
Our standard procedures mandate that new packaging designs must demonstrate optimised
resource use compared with previous models, while continuing to deliver the quality and
functionality that customers and consumers demand.
One innovation that has come out of this requirement is the combibloc RS structure, which
not only reduces the amount of polymer required to make our packs but improves robustness
during processing and distribution by our customers. It’s also lighter to transport.
Maximising efficiency of our filling machines
Our highly-efficient filling machines offer the lowest waste rate in the industry. On
average, just 0.5% of packs or less are wasted during the filling process, which also helps
to minimise loss of the food products inside.
We aim to improve efficiency with each new generation by reducing the amount of resources
needed to run the machines at our customers’ factories. This includes energy for heating
and sealing the packs, and compressed air, hydrogen peroxide and water used in cleaning,
sterilisation and packaging processes.
Filling machines often remain in use for decades at customer facilities. Our technical service
teams offer a range of options to help optimise the operational and resource efficiency of
existing machines, and minimise downtime for repairs. These range from regular preventative
maintenance to upgrade kits that can be retrofitted to existing machines, for example to reduce
their energy or water use.
Many of our technical service solutions help customers improve environmental performance at
their factories. We monitor how many we help through sustainability criteria in our customer
relationship management tool. We also work with customers to ensure that our filling machines,
and their parts, are recycled or disposed of responsibly at end of life.
In addition, our remote and digital service solutions help to prevent downtime and reduce
greenhouse gas emissions from our technical service engineers travelling to customer sites.
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Driving uptake of our most sustainable solutions
Marketing and sales teams also have an important role to play to help increase customer uptake
of our most sustainable solutions – including our SIGNATURE portfolio packaging materials, our
paper straw solutions, and our energy and water-saving upgrade kits for filling machines. As
uptake of these solutions grows, this will help us reduce the overall impact of the packaging
systems we sell.
“We have developed a tasty, fun and healthy
water drink for our little monsters, with our kids
helping us to create the taste and characters.
The name WaWaah came from a friend who
could never pronounce water correctly as a child.
Having created a drink which contains only the
best for our kids, we turned to SIG for the most
sustainable packaging solution. Finding a package
which helps to protect the future planet of our
children was essential and SIG carton packs with
SIGNATURE FULL BARRIER packaging material are
the perfect fit for WaWaah Water.”
Philippe Deben,
Co-founder of The Happy Healthy Kids Company
“Sustainable development is a top priority for both our
company and our consumers. By using SIGNATURE
FULL BARRIER packaging material for our Les Éleveurs
vous disent MERCI! Juice, four tonnes of virgin plastic
will be saved based on half a million packs purchased.
We want to give our consumers the best opportunity
to do their own part in acting responsibly and offering
one of the most sustainable packaging is the perfect
solution for our socially responsible brand.”
Alain Plougastel
Adhérent, Intermarché
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Performance in 2021
Driving sustainable innovation in our packs
• Environmental considerations informed all our product development and were the main
value driver for 58% of our innovation projects in 2021 (up from 38% in 2020).
• We developed the world’s first full barrier aluminium-free solution for aseptic carton packs
that provides comparable barrier properties to our packaging with aluminium foil, extending
our lower-carbon aluminium-free packaging materials – already available for plain white
milk – for use with oxygen-sensitive products such as fruit juices, nectars, flavoured milk or
plant-based beverages. SIGNATURE EVO will be launched in early 2022 in our combiblocMini
portion-sized format and will later be extended to other formats.
• We extended our aluminium-free combibloc ECOPLUS solution to a second pack format, our
combiblocMidi family format, enabling dairy customers to choose this fast-growing squarish
pack and tap into demand for more sustainable packaging at the same time. This format is
also available as SIGNATURE 100 linked to 100% renewable materials.4
• We launched our combivita packs for use with our next generation filling machine (see below).
Available in 500ml, 750ml and 1 litre format, combivita is the result of extensive research and
development to optimise convenience, pourability and sustainability. Combivita comes with a
truTwist closure that features a tethered cap. It can be used with our SIGNATURE FULL BARRIER
and SIGNATURE CIRCULAR solution to further enhance its environmental credentials.
• We have developed our first tethered cap solution for SIG packs to ensure the cap is kept
together with the carton for recycling. The truTwist closure, launched in early 2022, is for our
new combivita packs. Over the next two years, we will introduce tethered cap solutions for
all other SIG pack formats, ahead of EU regulatory requirements that are due to come into
force in 2024.
• We continued to explore options to increase the recycled content of our packs, building on
last year’s launch of SIGNATURE CIRCULAR, the world’s first aseptic carton pack with polymers
linked to 100% post-consumer recycled plastics.5 However, we have now discontinued our
target to launch a pack made with 100% recycled content and will focus on using more
renewable materials.
Growing uptake of our most sustainable innovations
• Sales of our SIGNATURE portfolio packaging materials increased by 21% this year, with
increased sales in Europe and market debuts in Asia and Eastern Europe (see below). We
have now sold enough packs with these solutions to fill 2.1 billion litres of food.6
In 2021 alone, 554.6 million litres of food were packed in SIG packs with SIGNATURE portfolio
packaging materials. This accounted for 3.6% of the food packed in SIG packs worldwide –
and 7.3% in Europe.
•
• Our SIGNATURE portfolio made its market debut in Asia this year with the Dairy Farming
Promotion Organization of Thailand (DPO) choosing SIGNATURE FULL BARRIER for its new
National Milk product range.
• SIGNATURE portfolio solutions hit the shelves in Eastern Europe for the first time this year
when Euromilk switched from PET bottles to SIG cartons featuring combibloc ECOPLUS,
SIGNATURE 100 or SIGNATURE FULL BARRIER for various products in its Kukkonia UHT milk
range in Slovakia.
• Other brands taking up SIGNATURE FULL BARRIER this year include: Belgian start-up The
4
Linked to wood residues from paper making via an independently certified mass balance system.
5 Via an independently certified mass balance system.
6 Via an independently certified mass balance system.
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Happy Healthy Kids Company’s WaWaah water; Olympia’s milk products in Belgium; Coca-
Cola’s Fuze Tea in the BeNeLux region; Juustoportti’s free range organic cow milk in Finland;
and Intermarché’s socially responsible brand Les Éleveurs vous disent MERCI! (The Farmers
say Thank You!) for its 100% apple juice in France.
• Leche Celta in Spain was the first to launch combibloc ECOPLUS in our combiblocMidi family
format.
• We remain the only carton producer to offer packs with ASI-certified aluminium and we
have now sold over 660 million SIG packs with the ASI label as more customers have opted
to include the ASI label on their packs to demonstrate and raise awareness of responsible
aluminium sourcing, including Coca-Cola’s Fuze Tea range in the BeNeLux region, Unilever’s
Knorr soups in Belgium and France, start-up The Happy Healthy Kids Company’s WaWaah
Water brand in Belgium and NutiFood’s milk in Vietnam.
• We have now sold over 900 million small format on-the-go packs with our paper straw
solutions. Our paper U-straw made its commercial debut this year on CAPSA Food’s Central
Lechera Asturiana whole milk in Spain. Other customers taking up our paper straw solution
in 2021 include Lactogal in Europe, using our paper U-straw for its milk and milkshakes. We
also expanded our paper straw portfolio to include our new and patented telescopic paper
straw option.
• Our RS structure reduced the amount of polymers used in our packs by more than 9,803 tonnes
in 2021.
UPTAKE OF SIGNATURE PORTFOLIO PACKAGING MATERIALS (million litres of food packed)
combibloc ECOPLUS (launched 2010)
SIGNATURE 100 (launched 2017)
SIGNATURE FULL BARRIER (launched 2018)
All SIGNATURE portfolio
2020
329.4
86.9
40.9
457.2
2021
369.4
102.4
82.8
554.6
Total
since launch
1,762.5
207.4
162.0
2,131.9
Making our filling machines more efficient
• Launched in late 2021, our next generation filling machine SIG NEO is the world’s fastest
filling machine for family size carton packs. It offers significant improvements in efficiency
and sustainability for our customers by reinventing key elements of the folding, sterilising and
filling process. SIG NEO reduces our industry-leading waste rates even further, with almost
no waste during production, and it is designed to reduce water consumption by 60% and
overall use of utilities (hydrogen peroxide, compressed air and water) by 30%. By reducing
energy use, it is designed to offer a 25% lower carbon footprint for the filling and packaging
process per pack compared with our third generation filling machines. Field tests in 2022
will confirm whether we have met our reduction targets on energy, hydrogen peroxide and
water use per hour of runtime.
• We began work on the development of our next generation filling machine for small format
packs, which will be designed to reduce use of consumables by 25%. We aim to have a
prototype ready for testing in 2022.
• Technical service upgrade kits that offer sustainability improvements are now installed on 39
of our third generation filling machines.
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• Customers installed our water reduction upgrade kit on a further 17 filling machines this
year. Now installed on 61 of our third generation filling machines, the kit is designed to cut
water consumption during production by up to 50% and one of our customers in Algeria,
Tchin Lait, reported a reduction of 60%.
• We rolled out our SureBrite semi-automated cleaning machine for use with six filling machines
in 2021. SureBrite can cut water use by 54% and energy use by up to 82% compared with
manual cleaning of our filling machines, as well as reducing labour time. Customers are now
using this solution with 19 of our third generation filling machines.
• We continued work to develop upgrade kits designed to deliver reductions in energy use and
compressed air, which we aim to offer to customers in 2022.
• We continued to support customers in identifying ways to improve the sustainability of their
filling lines and factories as part of our Fill Beyond Good initiative.
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RESPONSIBLE CULTURE:
OUR SUPPLY CHAIN
Material issue
• Responsible suppliers
• Sustainable raw materials
Relevant SDGs
Significant impact
Sustainable raw materials (environmental, societal and economic)
Key performance indicators
GRI
301-1
GRI
308-1
GRI
414-1
% A-materials from
certified sources
Key policies
• SIG Business Ethics Code for Suppliers
• Responsible Sourcing Policy & Directive
• Liquid Packaging Board,
Polymer and Aluminium Purchasing Policies
• Supplier Qualification (Equipment) Process
Why is this material for SIG?
Responsible
VP of Global Sourcing and Procurement and, for Global
Assembly suppliers, the Global Equipment Team
Evaluation of management approach
• Quarterly reviews by the VP of Global Sourcing and Procurement
who reports to the Responsibility Steering Group twice a year
• SEDEX SMETA audits and EcoVadis assessments
• Certification audits for FSC™ Chain of Custody,
ASI Chain of Custody and ASI Performance Standard
Grievance mechanism
Ethics & Compliance Hotline
We spend close to €1.5 billion a year with approximately 6,500 suppliers around the world on
the materials, goods and services we need to make our packs and filling machines and to run
our business.
Making sure that all our suppliers uphold high standards on ethical, labour, safety and
environmental issues is an important part of our responsibility culture and one of the ways we
can have a positive impact on society and the environment across our value chain.
Demonstrating that we work with responsible suppliers also enables us to meet customer and
investor sustainability requirements – which increasingly reach beyond our own operations –
and avoid ethical breaches in our supply chain that could affect our reputation or cause
disruptions to supply.
Around 56% of our purchasing spend goes on the raw materials for our packs: liquid packaging
board, polymers, aluminium, ink and solvents. Sourcing these ‘A-materials’ sustainably enhances
the environmental credentials of our packs and helps us secure supplies to meet the needs of
our customers now and in the future.
Our efforts to source more sustainable raw materials also play a critical role in driving progress
in The Way Beyond Good action areas of Forest+, Resource+ and Climate+, and our overarching
ambition to have a net positive environmental impact across the value chain.
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Our commitment
We are committed to working with suppliers that meet our responsibility requirements, and to
monitoring their compliance to assess and mitigate social and environmental risks in our supply
chain. We are committed to sourcing our A-materials from certified responsible sources, and
we strive to increase use of renewable and recycled materials to replace virgin and fossil-based
materials.
Where feasible, we also aim to source locally within each region to support local economies and
communities, and reduce environmental impacts from transporting goods over long distances.
Working with suppliers that manage forests sustainably and reduce greenhouse gas emissions
in our supply chain also supports our Forest+ (see > page 264) and Climate+ (see > page 268)
ambitions.
Our goals
2025 target
Progress tracker
Ensure 100% of significant suppliers accept our Business Ethics Code or
have an equivalent code in place
Audit 50% of high-risk suppliers each year
Provide regular training (at least every two years) on ethical supplier standards and
sustainable sourcing to all employees who interact frequently with suppliers
100% A-materials1 from certified sources
Maintain 100% FSC™-certified supply of liquid packaging board for our packs
(also a target for our Forest+ action area, > page 264)
Transition to 100% bioethanol or other bio-materials for printing
(also a target for our Climate+ action area, > page 268)
1 A-materials are those that go directly into our packs – paperboard, polymers, aluminium foil and ink.
Management overview
Working with responsible suppliers1
The SIG Business Ethics Code for Suppliers, based on the Ethical Trading Initiative Code, sets out
our requirements on business integrity, labour, safety and environmental management. We
expect all suppliers to comply with the Code, or have an equivalent code in place, and we screen
all suppliers on social and environmental criteria as part of our onboarding process.
Around 450 suppliers are considered the most significant to our business based on their
potential to affect our ability to meet customer needs, the high volumes we purchase from
them, or sustainability risks identified in the supply chain. Together, these significant suppliers
account for around 63% of our total spend. They include:
1
Reporting on our responsible sourcing programme excludes our paper mill in New Zealand (sold in June 2021) and our plant in
Australia (which ceased production in June 2021). Our Middle East and Africa operations, which we took majority ownership of in 2021,
are also excluded but we are working to integrate them into our reporting in 2022.
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• direct suppliers that provide raw materials for our packs and secondary packaging, and
manufacture the spouts used on our packs
indirect suppliers of facilities management, HR and logistics services.
•
All active significant suppliers must formally accept the SIG Business Ethics Code for Suppliers.
We conduct more in-depth assessments of significant suppliers at least every three years
through self-assessments, external audits or assessments such as SEDEX and EcoVadis, and our
own on-site audits of high-risk suppliers.
Certain categories of suppliers for our filling machine production are also identified as key
and they are managed through a similar but separate supplier management process run by
our Global Assembly business. For parts sourced for filling machines, we expect suppliers to
confirm that no conflict minerals sourced from conflict-affected or high-risk areas are included
in the product.
If any non-compliance is identified, we engage with suppliers to help them improve through
corrective action plans. If a supplier fails to respond to our requests or shows no willingness to
improve, we reserve the right to terminate our business relationship with them in accordance
with our contracts.
Our procurement teams are trained on our Responsible Sourcing Directive and we have a team
of experts to conduct in-depth site audits.
We also collaborate with others to promote responsible sourcing practices and sustainable
supply chains through our membership of AIM-PROGRESS, a global forum of leading fast
moving consumer goods manufacturers and common suppliers.
In addition, we engage with suppliers to understand and reduce our value chain climate impact,
including gathering supplier-specific data on greenhouse gas emissions and encouraging
suppliers to reduce emissions (see > page 268).
Sourcing sustainable raw materials
In addition to signing up to the SIG Business Ethics Code (or equivalent code), our A-material
suppliers must also meet specific social and environmental requirements set out in our
purchasing policies for liquid packaging board, aluminium foil and polymers.
Certifications to rigorous external standards, audited by independent third parties, are central
to our approach to sourcing sustainable raw materials. The following certification standards
enable us – and our customers – to trace our raw materials back through the supply chain to
responsible sources:
Forest Stewardship Council™ (FSC™): We have maintained FSC™ Chain of Custody
certification at our production sites and sales offices since 2009 and, as of January 2021,
100% of the liquid packaging board for our packs is purchased with FSC™ certification. This
means that all our board is made with fibres sourced from FSC™-certified sustainable forests
and other FSC™-controlled sources. FSC™ certification is an important element of our support
for thriving forests through our Forest+ ambition (see > page 264).
Aluminium Stewardship Initiative (ASI): We were the first in the industry to achieve
certification to the ASI Performance Standard and ASI Chain of Custody Standard for
responsible aluminium sourcing in 2018, soon after these standards were introduced, and we
are the first and only carton producer with ASI-labelled products on the market. We require all
our aluminium foil suppliers to meet ASI requirements and complete ASI certification. This also
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supports our Climate+ ambition as aluminium makes up a significant portion of our supply
chain emissions and ASI sets strict limits for greenhouse gas emissions from the energy-intensive
smelting process (see > page 268).
International Sustainability & Carbon Certification (ISCC) PLUS: The polymers used for our
SIGNATURE 100 and SIGNATURE FULL BARRIER solutions are linked to forest-based renewable
materials covered by the ISCC PLUS certification (or REDcert2 in some cases) via a mass balance
system. The same certification is used for tracing, controlling and mass-balancing the post-
consumer recycled polymers used for our SIGNATURE CIRCULAR solution.
Our support for these certifications – in their development and uptake – has a wider positive
impact by encouraging our suppliers, and others in our industry and beyond, to adopt
the certifications and the rigorous standards on which they are based. We also encourage
our customers to include third party, NGO-supported certification labels on their packs to
demonstrate to consumers that their packs are made from responsibly-sourced materials, and
raise awareness of and demand for such materials in other packaging or products.
Having certifications in place for our liquid packaging board, aluminium foil and
renewable polymers means that, with our SIGNATURE FULL BARRIER solution, we are
able to offer the only aseptic cartons available with the three main raw materials made entirely
from certified responsible sources.
However, there are currently no suitable recognised certifications for the fossil-based
polymers used in many of our packs or for the inks we use to print customers’ designs
on our packs. We are instead focusing on extending the use of renewable alternatives.
The polymers used in our SIGNATURE 100 and SIGNATURE FULL BARRIER solutions are linked
to renewable materials via an independently certified mass balance approach. To avoid
competition for use of limited agricultural land, we chose tall oil for the renewable feedstock as
it is a by-product of the paper industry rather than a crop grown on land that could otherwise
be used for growing food.
Forest-based raw materials are mixed in with conventional fossil-based raw materials to
produce polymers to the grade we need. External certifications ensure that enough renewable
material is fed into the mix to make the amount of polymers we use in our SIGNATURE 100 and
SIGNATURE FULL BARRIER solutions.
We opted for a mass balance approach because it supports a broader transition from fossil
to plant-based raw materials within the conventional and highly efficient polymer industry
that offers security of supply, leaner production and reliable quality for our customers. An
independent critically reviewed ISO-conformant life-cycle assessment – the world’s first for a
mass balance product – showed that the environmental benefits of the renewable feedstock
are maintained through this approach.
We also use a certified mass balance system to link the polymers used in our SIGNATURE
CIRCULAR solution to post-consumer recycled plastic.
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Our supply chain
We source A-materials from around 45 suppliers, ranging from local paper mills that source
wood from their own forests to major multinational mining and chemical companies.
Netherlands
Scotland
Belgium
France
Spain
Finland
Sweden
Germany
Austria
Italy
USA
Saudi Arabia
South Korea
Japan
China
Thailand
Brazil
Polymers
Liquid packaging board1
Aluminium foil
1
For part of the year, we also sourced liquid packaging board from our own paper mill in New Zealand, which we sold in June 2021.
Performance in 2021
Working with responsible suppliers
• We asked 468 significant suppliers (182 direct and 286 indirect) to respond to a self-
assessment on our responsibility requirements – 143 (78%) of the direct suppliers responded
and 144 (50%) of the indirect suppliers responded (see charts on next page for results).
• 61% of significant suppliers have accepted the SIG Business Ethics Code for Suppliers or have
an equivalent code in place, and we are engaging with those currently under review to bring
this up to 100%.
• No suppliers were identified as high-risk in 2021 as all those completing assessments have
signed our ethics code or provided evidence of EcoVadis assessments, SEDEX audits or
equivalent third-party programmes.
• We revised our Responsible Sourcing Directive to integrate our newly acquired Middle East
and Africa region, updated the risk assessment criteria for indirect suppliers, and extended
the validity of a supplier’s ‘accepted’ or ‘compliant’ status from one to two years following
their assessment to support improvement processes.
• We trained all our global, regional and local procurement teams to introduce them to the
updated Responsible Sourcing Directive and test their knowledge on key topics.
• Of the 84 global equipment key suppliers supporting our Global Assembly function in
2021, 80 have signed up to our Business Ethics Code or equivalent and four have achieved
certification to recognised external standards (EcoVadis or SEDEX).
• We became the first in our industry to join AIM-PROGRESS, a global forum of leading fast
moving consumer goods manufacturers and common suppliers that aims to enable and
promote responsible sourcing practices and sustainable supply chains.
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RATING SIGNIFICANT SUPPLIERS ON ETHICAL STANDARDS
% direct
significant suppliers
22%
29%
19%
0%
% indirect
significant suppliers
2% 2%
50%
4%
26%
31%
0%
15%
Advanced
Demonstrated strong performance
through SEDEX audit findings, EcoVadis
Silver/Gold/Platinum or equivalent
evidence (status valid for up to
three years)
Compliant
Demonstrated compliance through
SEDEX audit, or EcoVadis Bronze
or equivalent evidence (status valid for
two years)
Accepted
Signed up to the SIG Business Ethics
Code and achieved minimum standard
in our assessment. Depending on the
type of supplier, some are expected to
submit plans to achieve certification to
recognised standards or third-party
assessments (status valid for two years)
High risk (none in 2021)
Failed to sign up to the SIG Business
Ethics Code (or equivalent code)
or provide evidence of third-party
assessments (status valid for one year)
CSR re-assessment running
Currently undergoing re-assessment
Under review
Currently undergoing initial assessment
Sourcing sustainable raw materials
• We continued to offer the world’s first and only packaging material (SIGNATURE FULL
BARRIER) for aseptic cartons with all three main materials – liquid packaging board, polymers
and aluminium – from certified sources.
• We increased the proportion of A-materials from certified sources to 70% (by volume) in 2021
as we increased the amount of liquid packaging board purchased with FSC™ certification to
100%, secured more ASI-certified aluminium and increased sales of our SIGNATURE 100 and
SIGNATURE FULL BARRIER solutions that use polymers certified2 to ISCC PLUS or REDcert2. In
light of significant fluctuations in commodity market prices, this indicator is now reported by
volume of materials rather than spend to provide a more meaningful indication of progress
towards our 100% target.
• 69% of our A materials (by volume) came from renewable sources in 2021, mostly liquid
packaging board.
Liquid packaging board
• As of January 2021, 100% of the liquid packaging board we source for use in our packs is
purchased with FSC™ certification – an industry first. This means that all our board is made with
fibres sourced from FSC™-certified sustainable forests and other FSC™-controlled sources. As
we used up remaining supplies purchased the previous year, 97% of the liquid packaging board
we used to produce our packs during 2021 was purchased with FSC™ certification (up from
83% in 2020).
• We sold over 40 billion FSC™-labelled packs – 98% of the SIG packs sold in 2021 – and customers
can put the FSC™ label on any of our packs.
• We obtained FSC™ Chain of Custody certification at our newly opened second plant in Suzhou
(China) and all our other plants have maintained their existing certification.
2 Via an independently certified mass balance system.
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Polymers
• Growing customer demand for our SIGNATURE 100 and SIGNATURE FULL BARRIER solutions
has increased our use of ISCC PLUS or RedCert2-certified polymers linked to 100% renewable
materials3 this year, although the overall amount is so far still low compared with the amount
of fossil-based polymers we source.
• All our plants maintained certification to control ISCC PLUS materials, except for our new
plant in China and our newly acquired plant in Riyadh (Saudi Arabia), which plan to complete
certification audits in early 2022.
Aluminium foil
• We remain the only carton producer to offer packs with ASI-certified aluminium.
• We have now sold over 660 million SIG packs with the ASI label as more customers have opted
to include the ASI label on their packs to demonstrate and raise awareness of responsible
aluminium sourcing (see > page 302).
• We have nearly doubled our use of ASI aluminium globally over the last year. We are
progressively including ASI aluminium as standard for all SIG packs in Europe and North
America whenever customers launch new products or change pack designs.
• We maintained our Group certification to the ASI Performance Standard and Chain of
Custody Standard. Our new plant in China joined our other plants worldwide in gaining ASI
Chain of Custody certification and our newly acquired plant in Saudi Arabia plans to complete
a certification audit in early 2022.
• Five of our aluminium foil suppliers in Brazil, China and Europe – representing over 70% of our
global aluminium foil supply – have now achieved ASI certification, up from three last year.
Inks
• We have switched from fossil-based solvents to plant-based bioethanol for our printing
processes at six of our production plants – including our newly opened second plant in
Suzhou (China) – and we are working with suppliers to complete this transition worldwide.
Secondary packaging
• We sourced 100% of the corrugated cardboard boxes we use in Europe, Latin America and
Asia Pacific South from FSC™-certified sources.
SOURCING OUR A-MATERIALS
Raw materials purchased
(tonnes of liquid packaging board,
aluminium and polymers)
% A-materials from
renewable sources (by volume)
% A-materials from
certified sources (by volume)
2016
2017
2018
2019
2020
2021
550,000
533,000
550,000
582,000
594,000
666,000
70%
71%
72%
73%
72%
69%
53%
63%
64%
63%
62%
70%
3
Linked to wood residues from paper making via an independently certified mass balance system.
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RESPONSIBLE CULTURE:
OUR PEOPLE
Material issue
• Diversity, equity and inclusion
• Talent development
• Employee satisfaction
• Fair labour practices
Significant impact
No
Key performance indicators
Key policies
• SIG Code of Conduct
• Human Rights, Labour and Community Engagement Policy
• Human Resources Framework
Relevant SDGs
• Sustainable engagement score
• Number of plants with SEDEX Members
Ethical Trade Audit (SMETA)
Responsible
Global Human Resources, supported by local Human and
Resources teams
GRI
404-1
GRI
405-1
Additional GRI indicators reported
GRI
102-7
GRI
102-8
GRI
102-41
GRI
401-1
GRI
405-1
GRI
412-1
Evaluation of management approach
Biennial companywide engagement survey, regular dialogue with
employees, SEDEX SMETA site audits and EcoVadis assessments
Grievance mechanism
Via line managers, the Global Legal and Compliance team or
Ethics & Compliance Hotline
Why is this material for SIG?
Fostering a winning team is one of the three main business goals in our Corporate Compass.
We employ more than 6,100 employees globally1. Their success – and ours – depends on:
• Diversity, equity and inclusion – Creating an inclusive culture helps to engage our people.
Building a diverse workforce supports our customers in global diverse markets and fosters
innovation by bringing different perspectives and new ideas to our business. Investors and
other stakeholders also increasingly expect companies to demonstrate a strong commitment
to diversity, equity and inclusion.
• Talent development – Investing in and developing employees to help them achieve their
goals and build their careers with SIG helps us support them and create a workforce that
meets the needs of our business now and in the future.
• Employee satisfaction – Listening and responding to our people, recognising the work
they do and rewarding them based on performance helps us sustain strong levels of job
satisfaction, motivation and engagement. This helps us recruit and retain the best people
and maintain a productive workforce.
• Fair labour practices – We believe that fundamental rights ensuring people’s dignity,
freedom and justice are crucial to societal development and are ultimately required to help
businesses thrive in the future. Upholding labour rights and providing fair working conditions
is a fundamental responsibility as an employer and part of our commitment to respecting
human rights. It is critical to maintain the trust of our employees and other stakeholders, and
to comply with regulations.
1 All 2021 data related to employees excludes our paper mill in New Zealand which was sold in June 2021.
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At SIG, we believe in a strong
and supportive ‘we culture’
where people feel empowered
to dream big, go beyond and
make the impossible possible.
Our commitment
We strive to have a positive impact on our employees through our commitment to:
• Diversity, equity and inclusion – We are committed to providing an inclusive working
environment for our employees. We do not tolerate discrimination based on race, religion,
national origin, political affiliation, gender, sexual orientation, disability, age or any other
relevant category. Improving gender balance, particularly at senior levels of the business,
is a priority and we aim to do so through enhanced efforts to attract and develop female
employees and leaders.
• Talent development – We are committed to providing opportunities for career development,
and strive to lead the industry in our investment in training and development. We are
continually working to improve the frequency and quality of feedback and appraisal sessions
to support engagement, development and performance of employees.
• Employee satisfaction – We are committed to creating an open, engaging and energising
work environment where our people feel that their ideas, needs and concerns are heard and
valued, they are recognised for what they do and they understand how their work contributes
to the success of the business.
• Fair labour practices – We strive to identify, prevent and manage actual and potential
human rights impacts in our operations, supply chain and with respect to our major
business relationships. We are committed to promoting fair labour practices and upholding
labour rights for our employees. This includes the provision of fair pay and decent working
conditions, recognising the right to freedom of association and collective bargaining, and
preventing discrimination, child labour and modern slavery (human trafficking, forced and
compulsory labour, bonded labour and slavery). We are committed to adhering to the labour
standards encompassed within the International Bill of Human Rights, the International
Labour Organization core labour standards, the Ethical Trading Initiative Base Code and
the United Nations Global Compact. We also extend these requirements to our suppliers to
protect supply chain workers (see > page 304).
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Our goals
2025 target
Progress tracker
Sustain our training and development investment above industry benchmark
Ensure 100% of key talent (current and future business leaders
for critical positions) have a defined development plan
Achieve engagement level above industry benchmark
Increase % of employees who feel we have responded to
their feedback based on the last survey
Maintain survey score linked to inclusive environment
above industry benchmark
Increase percentage of women in leadership positions to 30%
Increase % of employees who feel SIG makes adequate use of
recognition and reward other than money
Advance our human rights risk identification and assessment processes
in our own operations and supply chain to define salient human rights issues
Conduct assessments of potential human rights risks and impacts in 50%
of our own plants every two years
Maintain SEDEX Members Ethical Trade Audit (SMETA) at all production sites
Management overview
Embracing diversity, equity and inclusion
The SIG Code of Conduct includes a strict policy against discrimination on any grounds and
we strive to create an inclusive workplace where a range of nationalities and cultures are
represented, and where everyone is treated with respect and has equal opportunities regardless
of their age, gender, ability or cultural background.
We have publicly committed to promote diversity throughout our organisation as a signatory
of the German Diversity Charter (Charta der Vielfalt). Our employee-led Diversity, Equity &
Inclusion Focus Group – made up of a diverse group of employees from across the business –
helps to inform and drive our strategy in this area.
Our leaders are trained on diversity and inclusion to increase awareness and drive behaviour
change. Diversity criteria are also included in management tools that support employee
retention, development and engagement.
One of our main priorities is to improve gender balance by attracting and developing more
women, particularly in leadership roles. We are doing this by engaging women and minorities
better in our recruitment processes, and defining requirements in our internal career
development processes to help us select the best candidates from a diverse pool of internal
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and external applicants. In addition, we are creating a working environment that strengthens
our ability to attract and retain women, for example by offering more flexible working options
where feasible (see > page 327).
We also encourage employees to take international roles to enhance the diversity of perspectives
and experiences in our teams.
Enabling talent development
Employees create individual development plans and review their goals and progress as part of
their twice-yearly performance reviews with managers. We monitor the number of employees
with an agreed development plan in place, and have a tool to support people in asking for
additional feedback from colleagues and managers outside their formal reviews. We also
encourage individuals, including managers, to gain more personal insights from others through
a 360° feedback tool.
Our approach to learning and development is built on the 70/20/10 formula: 70% from on-
the-job experience; 20% from mentoring, coaching and interactions with colleagues; and 10%
from formal training. Our online Learning Centre offers access to in-person and virtual training
courses on topics including leadership, professional, technical, functional and language skills.
We identify and support people with high potential through our talent and succession
management programme to build our leadership pipeline. Leadership programmes include
our Transformational Leaders programme to develop the right leadership mindset for
developing others, as well as our Operational Leaders Development and Commercial Excellence
programmes to enhance development opportunities for leaders in specific functions. We also
offer international assignments to promote career mobility.
Fostering employee satisfaction
Our employer value proposition, ‘Believe in More’, sets out the difference SIG makes for existing
and prospective employees. It emphasises that SIG is a place where they can feel free to believe
in more – more for them, more for us, and more for our customers, consumers and the planet.
We also engage employees in the business through townhall meetings, smaller group sessions
and virtual ‘Qs to SIG’ with responses from our CEO and other executives as well as experts on
specific issues.
In addition to engagement in the business, an inclusive working environment and development
opportunities, reward and recognition also play an important role in overall satisfaction. We
benchmark salaries and benefits with other companies to check we offer competitive reward
packages in each of our markets. Employee benefits vary by region and country. These can
include parental benefits and leave, retirement benefits, and life and health insurance.
We want to make sure our people feel that their individual efforts are recognised. Our reward
structure is based on grading of roles and corresponding salary bands – or agreed through
local collective bargaining agreements for some employees – and includes performance-based
incentives too. We also recognise employees’ achievements and contributions to the business
through our global Shine Awards and local reward and recognition schemes across our regions.
Employees can provide feedback through regular dialogue with their managers. We run a global
employee engagement survey every two years to gauge levels of employee satisfaction and
understand how we can improve as an employer. We are committed to act on the results.
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Upholding labour and human rights
Employees are trained on the SIG Code of Conduct, which includes our requirements on human
rights and fair labour practices. We take any reports of unfair labour practices or other breaches
of the Code very seriously and investigate all issues reported (see > page 334).
We respect the right to collective bargaining and consult with employees and their representatives
(according to local regulations) on issues such as pay, health and safety, and working conditions.
Terms and conditions of employment, including pay, are negotiated through collective
bargaining with recognised trade unions for a significant portion of our employees.
Regular internal or third-party assessments of our operations help us identify, prevent and
mitigate risks related to human rights and fair labour practices. We conduct SEDEX Members
Ethical Trade Audits (SMETA), which include human and labour rights criteria, at each of our
production sites every two years as well as assessments of our global policies and performance
by EcoVadis. Fair labour practices also form part of our supplier assessments and audits of high-
risk suppliers as we extend our commitment through our supply chain through the SIG Code of
Business Ethics (see > page 304).
We strive to apply a systematic implementation process, informed by a gap analysis of our
existing measures, structures and responsibilities within our own operations and supply chain
activities. Our existing high-level analysis of potential human rights risks will inform our planned
in-depth analysis as we work to identify salient human rights issues in our own operations and
supply chain and strengthen our due diligence framework.
Through the processes we are developing to identify, prevent and manage actual and potential
human rights impacts, we can contribute to global respect for human rights and meet our
ambition to have a scalable, systemic net positive impact. Our approach is guided by the United
Nations Guiding Principles on Business and Human Rights and the relevant Organisation for
Economic Co-operation and Development frameworks.
Any grievances can be reported through our Ethics & Compliance Hotline. We investigate all
reported issues and seek to find solutions with the affected person.
Performance in 2021
Embracing diversity, equity and inclusion
•
In January 2021, we welcomed our first female member of the Group Executive Board
(GEB) – José Matthijsse, President and General Manager Europe – and two more female
GEB members have been appointed from January 2022. In 2021, seven nationalities were
represented on the GEB.
• Women represented 20% of our leaders in 2021, up from 18% last year. The integration
of our Middle East and Africa operations – where only around 12% of all employees are
women – has offset higher increases in other regions. But we remain on track with our
roadmap to achieve our target to increase women in leadership to 30% by 2025. This year,
we ran our first global talent conference specifically to identify and present female talent at
SIG to support progress towards our target.
• We launched our Women Acceleration Programme, sponsored by GEB member José Matthijsse,
for 16 female leaders from around the world. The new programme includes virtual learning,
coaching, mentoring and project challenges over a period of nine months.
• Participants from a variety of functions joined our leadership development programmes to
promote cross-functional collaboration and inclusive leadership.
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• We continued the roll out of mandatory diversity and inclusion training on unconscious bias
•
and inclusion to leaders across the business.
In Switzerland, we completed a fair pay analysis ahead of the new requirements of the Swiss
Federal Act on gender equality, which confirmed that we are fully compliant with Swiss equal
pay standards.
• We updated our Recruitment Directive to include targets to promote diversity by eliminating
all-male shortlists and all-male selection panels from our recruitment processes.
• As part of our collaboration with RWTH Aachen University in Germany to attract more female
engineering students to join SIG, we surveyed students to understand what drives them in
selecting potential employers. The majority of respondents – both male and female – said
that a company’s commitment to promoting diversity is very important in their decision to
apply for a job there.
• Our employee-led Diversity, Equity & Inclusion Focus Group met monthly to drive our
diversity, equity and inclusion strategy. Initiatives this year included a cultural agility week
(see below), and a workshop to define priorities and ways to measure progress on strategic
initiatives related to gender balance.
• We organised a week of activities to raise awareness of other cultures in celebration of the
United Nations World Day for Cultural Diversity in May 2021. More than 260 people joined
virtual talks from over 20 senior leaders and other speakers, representing 16 nationalities,
sharing their experiences and reflecting on various aspects of working in a multicultural
environment. We also encouraged colleagues to showcase their cultures by sharing a local
recipe, song or book.
• On International Women’s Day in March 2021, we encouraged employees around the world
to follow the lead of our GEB members by posting a photo on social media with their hand
raised in solidarity with the campaign theme urging people to #ChooseToChallenge gender
bias and inequality.
WOMEN IN MANAGEMENT (%)
Women in leadership positions2 (target 30% by 2025)
Group Executive Board
Senior management
Middle management
Junior management
All management
All employees
20181
–
0
15%
17%
21%
17%
18%
20191
17%
0
13%
18%
25%
18%
19%
20201
18%
0
22%
18%
24%
19%
19%
2021
20%
14%
(1 of 7)
16%
20%
25%
22%
19%
1 Data not assured for previous years, except for ‘all employees’, as we have changed the categorisation of managers.
2
Includes Group Executive Board, senior and middle management roles.
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Talent development
• With COVID-19 restrictions continuing to make in-person training difficult, we introduced
more new online training offerings this year – including courses focused specifically on virtual
leadership, presentation and negotiation skills to help employees adapt to working from
home and support managers in leading their teams remotely.
• We invited 250 colleagues to pilot use of the LinkedIn Learning platform which offers access
to over 15,000 online courses. They completed over 1,020 hours of training on the platform
this year on topics ranging from leadership and communication to project, time and career
management. Some teams in China completed online learning together to help create a
group learning experience. We also provided access to an external platform to enhance
English language skills.
• We introduced a new tool to guide employees through the steps for setting an effective
development plan and ran training sessions for managers on how to support team members
in creating their plans.
• By the end of 2021, 24% of key talent (current and future business leaders for critical positions)
•
recorded that they have a formal development plan in place.
In December 2021, 70 of our leaders began our renewed Transformational Leaders training
programme which has been strengthened to include more mentoring and hands-on
experience, and to help participants put what they have learned into practice within their own
teams. We aim to roll this one-year programme out to all SIG leaders over the next three years.
• A second cohort of 16 employees from around the world began our 18-month Operations
Leaders Development Programme, which is designed to support a career development
programme for talented people in our production teams. It includes individual coaching,
international experience and intensive training in entrepreneurial and leadership skills. We also
piloted a programme specifically to develop technical, leadership and management skills for
around 50 leaders in production roles at our plant in Saalfelden (Austria).
• A new platform, launched this year, enables employees to access coaching and mentoring
more easily by pairing them with more than 800 trained coaches and suitable mentors within
the business – including mentoring from GEB members for top talent.
• We began developing a new global mobility policy, to be introduced in 2022, designed to
promote career mobility by centrally coordinating international assignments, creating a
simpler, more consistent approach across the business, and offering support in relation
to critical topics such as remuneration, benefits, social security and taxation. We are also
exploring opportunities for employees to enhance cross-functional experience through
short-term assignments on specific projects.
• Overall, we provided an average of 20.5 hours of training per employee in 2021, slightly higher
than last year but still falling short of the pre-pandemic industry benchmark of 24.0 hours.
We provided an average of 20.2 hours per employee for men and 21.7 hours for women.
AVERAGE HOURS OF TRAINING (per employee)
Employee category
Management
Non-management
Total
2015
39.4
32.8
33.5
2016
37.9
28.0
29.0
2017
33.5
24.1
25.1
2018
31.7
22.4
23.4
2019
35.5
22.7
24.3
2020
26.3
18.4
19.4
2021
24.8
19.9
20.5
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Fostering employee satisfaction
• The results of our last biennial employee survey in 2020 showed a high level of engagement
with a score of 87% overall (seven points higher than the industry benchmark of 80%) and
improvements across all 13 categories, significantly outperforming industry peers in all
categories. This year, we continued to look for ways we can improve further in priority areas
identified by the survey, including:
• Making more use of non-monetary recognition – Following a delay due to COVID-19,
we ran our second annual Shine Awards in March 2021 to recognise individuals and
teams making outstanding contributions to the business and The Way Beyond Good.
We also introduced more non-monetary recognition programmes across our regions,
including thank you cards from managers, prizes for employee contributions in specific
categories (nominated by leaders or peers), praise at townhalls highlighting great work
by specific teams and recognition for long-serving employees.
• Communicating long-term goals better – We held three virtual townhall meetings this
year, led by our CEO and other GEB members, to communicate SIG’s goals, present
key initiatives and give employees an opportunity to ask questions on topics of interest
to them. Each meeting was held across two time slots to enable all employees to
participate, whatever time zone they are in. The GEB also held additional meetings with
leaders who then cascaded information to their teams.
• Clarifying possible career paths – We have enhanced guidance to help employees
create effective development plans and ensure career development opportunities are
discussed as part of their twice-yearly performance reviews with managers. Additional
local initiatives include surveying employees in Asia Pacific South to better understand
their expectations in this area, building career paths for technical service employees in
the Americas and holding one-to-one sessions with employees in Romania to discuss
possible career paths.
Improving physical working conditions at some sites – At our plant in Linnich (Germany),
for example, employees identified opportunities to enhance physical working conditions
by improving sanitary facilities and air conditioning. In response, we have developed
a local action plan to renovate the locker room and install summer doors with insect
screens to improve ventilation in hot weather.
•
• Local teams also ran Result to Action workshops for employees and managers to discuss
priority areas identified from the survey feedback, and create and implement tailored local
improvement plans together. For example, we introduced a new model for our pension
scheme in Germany in response to feedback from employees.
• We received external recognition for our efforts on employee satisfaction this year:
• SIG South America was named one of the best companies to work for and received a
Great Place to Work Certification™, the global benchmark for identifying and recognising
outstanding employee experience.
• SIG Combibloc China was honoured with the title of Greater Suzhou Best Employer in
2021 in an assessment that included both employee perception and expert evaluation.
• Our Rayong Plant in Thailand was awarded 2021 Excellent Establishment on Labour
Relations and Welfare Awarded (National Level) from the Ministry of Labour, following
an award at provincial level in 2020.
• We enhanced employee engagement this year through social media channels, including a
new Social Media Ambassador Club encouraging SIG employees to tell their story as a #SIGer.
We also launched five Life@SIG LinkedIn pages, each offering local insights on working at SIG
and highlighting our company culture.
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• Employees helped us celebrate significant anniversaries at several of our sites this year.
Curitiba (Brazil) celebrated the plant’s 10th anniversary with personal video testimonials,
interviews with long-standing employees and a game of SIG ‘Top Trumps’ where each card
includes information on our packaging. Neuhausen (Switzerland) marked the plant’s 20th
anniversary with cultural and social events including a film of long-serving employees talking
about their time at SIG. Saalfelden (Austria) held its postponed 40th anniversary event
with employees and guests from other leading companies. We also ran a competition that
encouraged people to get involved and be creative as part of our celebration of the fifth
anniversary of our operations in Cluj (Romania).
• Our Way Beyond Good Champions continued to engage employees through interactive
campaigns and our community engagement programme (see > page 332).
• The voluntary turnover rate was 4.8% in 2021.
BIENNIAL EMPLOYEE SURVEY RESULTS (next biennial survey due in 2022)
2016 survey
2018 survey
2020 survey
Comparison with
2020 industry
benchmark
Sustainable engagement score
74%
78%
87%
+7
BASELINES FOR OUR TARGETS FROM BIENNIAL SURVEY IN 2020
% employees who feel we have responded
to their feedback based on the last survey
% employees who feel SIG makes adequate use
of recognition and reward other than money
SIG score in 2020 survey
Comparison with 2020
industry benchmark1
61%
63%
+8
+5
1
Industry benchmark defined as norms for manufacturing companies participating in Willis Towers employee engagement survey.
Managing change
•
In 2021, we supported employees through several major changes to the business:
• Middle East and Africa: Integration of our former joint venture in the Middle East and
Africa, now fully owned by SIG, began with alignment on compliance policies and
processes, and includes cultural integration of the 509 employees in the region through
a focus on change management and employee engagement.
• China: We welcomed 83 new employees to our newly built second production plant in
Suzhou, with support and training from teams at our existing Suzhou plant.
• New Zealand: Having given staff at our Whakatane paper mill notice that the site would
be closed in 2021, we then secured an offer from a buyer and worked with them to
avoid closure of the mill. The offer included new terms and conditions together with a
one-time payment to employees, which was accepted following consultation with union
representatives. Around 80% of the staff have remained at the mill under new ownership.
• Australia: Following consultation with employees and union representatives, 84 employees
were made redundant as a result of the closure of our production plant in Melbourne,
which was acquired through our acquisition of Visy Beverage Cartons in 2019. We held one-
to-one sessions with all affected employees to discuss their concerns and provide details
of outplacement support programmes to assist them in finding new roles or taking early
retirement. We also offered support through our Employee Assistance Programme and
financial advice sessions.
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Upholding labour and human rights
• We strengthened our Human Rights, Labour and Community Engagement Policy to more
explicitly address human rights due diligence and grievance processes.
• We set new commitments – to advance our human rights risk identification and assessment
processes in our operations and supply chain to define salient human rights issues by 2025,
and to conduct assessments of potential human rights risks and impacts in 50% of our own
plants every two years.
• All our production sites completed SEDEX SMETA audits – which include labour standards as
one of the four pillars – this year, with the exception of our New Zealand paper mill, which
was sold in June 2021. Our office site in Mexico and several of our legal entities in Germany
and Switzerland also completed SMETA audits this year.
• Globally, around 51% of our employees were covered by collective bargaining agreements
in 2021.
• Topics covered in formal consultations with employee representatives varied by region.
Examples included discussions related to managing change (see above), retirement benefits,
new homeworking policies and support for employees through COVID-19.
• There were no reported incidents of discrimination in 2021.
See > page 304 for more on upholding labour and human rights in our supply chain.
OUR WORKFORCE
Total number of employees:
Male
Female
Employees with a permanent contract:
Male
Female
Aged up to 30
Aged 31 to 50
Aged above 50
Full-time employees:
Male
Female
Part-time employees:
Male
Female
Employees with a fixed-term contract:
Male
Female
Thereof Apprentices
Asia Pacific
Americas
Europe
Middle East
and Africa
1,983
1,554
429
1,408
1,158
250
156
1,116
136
1,402
1,156
246
6
2
4
575
396
179
0
741
529
212
705
516
189
219
446
40
700
514
186
5
2
3
36
13
23
18
2,929
2,422
507
2,710
2,240
470
315
1,319
1,076
2,571
2,178
393
139
62
77
219
182
37
137
509
459
50
507
457
50
67
392
48
507
457
50
0
0
0
2
2
0
0
Total
6,162
4,964
1,198
5,330
4,371
959
757
3,273
1,300
5,180
4,305
875
150
66
84
832
593
239
155
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GOVERNANCE BODIES BY AGE GROUP
Group Executive Board
Aged up to 30
Aged 31 to 50
Aged above 50
NEW HIRES
Total number of new hires:
Male
Female
Aged up to 30
Aged 31 to 50
Aged above 50
Rate of new hires:
Male
Female
Aged up to 30
Aged 31 to 50
Aged above 50
EMPLOYEE TURNOVER
0 of 7 (0%)
4 of 7 (57%)
3 of 7 (43%)
Asia Pacific
Americas
Europe
Middle East
and Africa
Total
75
55
20
29
44
2
5%
4%
1%
19%
4%
1%
121
85
36
52
69
0
17%
12%
5%
24%
15%
0%
156
102
54
61
86
9
6%
4%
2%
19%
7%
1%
37
23
14
12
24
1
7%
5%
3%
18%
6%
2%
Total employee turnover
Voluntary employee turnover rate
Total employee turnover:
Aged up to 30
Aged 31 to 50
Aged above 50
Male
Female
Asia Pacific
Americas
Europe
Middle East
and Africa
9%
4%
126
7
80
39
100
26
14%
8%
98
31
62
5
76
22
8%
3%
212
44
90
78
158
54
13%
10%
64
18
38
8
56
8
389
265
124
154
223
12
7%
6%
13%
20%
7%
1%
Total
9%
4.8%
500
100
270
130
390
110
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RESPONSIBLE CULTURE:
HEALTH, SAFETY AND
WELLBEING
Material issue
Employee health, safety and wellbeing
Significant impact
No
Key performance indicators
GRI
403-9
Additional GRI indicators reported
GRI
403-1
GRI
403-2
GRI
403-3
GRI
403-4
GRI
403-5
GRI
403-6
GRI
403-7
Key policies
• Environment, Health and Safety Policy
Relevant SDGs
Responsible
Group Corporate Responsibility team and Group Human Resources
Evaluation of management approach
• Monthly review of health and safety metrics
by Group Executive Board
• Safety performance highlighted on quarterly CEO
calls with executives
• Annual site self-assessments (based on OHSAS 18001)
and internal audits
• SEDEX SMETA site audits and EcoVadis assessments
Grievance mechanism
Via line managers or Ethics & Compliance Hotline
Why is this material for SIG?
Enabling employees to stay safe and healthy at work is a prerequisite for any responsible
company. Empowering our people to adopt safe behaviours at work can also have a wider
positive impact when they take the same safe behaviours home to their families.
By preventing injuries and promoting health and wellbeing, we are not only supporting our
people but also the success of our business by reducing lost time, enhancing productivity and
improving employee engagement. We believe that engaged, enabled, energised, safe and
healthy employees outperform and strongly contribute to our success.
Our commitment
Nobody comes to work to get hurt or ill, and we strive to ensure everyone can go home safe and
well every day. We are responsible for safety in the workplace and support our employees to
take proper care of their physical health. We aim to prevent work-related incidents and illnesses
by adopting a preventative health and safety strategy.
We take a holistic approach to supporting mental, emotional and social wellbeing to enable our
employees to lead fuller, more productive lives both at work and at home. We strive to help our
employees cope with information, emotions, feelings, desires and stressors in a healthy and
balanced way. We also encourage employees to build personal and professional relationships
and connections, as well as to foster relationships with the communities where they live and work.
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Our goals
2025 target
Zero recordable cases1
Achieve a lost-time case rate in the top 20% of industry peers2
Define a holistic strategy and roadmap to foster wellbeing at SIG
Progress tracker
1
Target expanded from zero lost-time cases to zero recordable cases, which includes medical treatment and restricted work cases as
well as lost-time cases.
2 Based on latest published lost-time cases for companies listed in our industry in the Dow Jones Sustainability Index.
Management overview
Everyone at SIG is expected to take responsibility for their own health and safety – and the
health and safety of those around them – as part of our Take Care culture.
Managing key risks
We have robust health and safety management systems that follow similar criteria to the
internationally recognised ISO 45001 standards at all our production sites as well as our global
assembly, global technology and technical service functions.
These systems help us identify and manage risks and promote continuous improvement. To
support implementation, our health and safety teams, and other key personnel, are trained in
ISO 45001. Our production plant in Riyadh (Saudi Arabia) is already certified to ISO 45001 and
we are working towards certification at our other plants.
We conduct risk assessments across our global operations and implement the STOP (substitute –
technical – organisational – personal protection) hierarchy of control measures. Line managers
are required to update risk assessments annually. We share key findings and best practices
through a dedicated platform to help plants learn from each other and enable them to identify,
manage and educate employees about key safety risks quickly and effectively.
Workers at our production sites, where our biggest risks lie, are encouraged to report unsafe
working conditions via safety opportunity cards and at-risk behaviours through our behaviour-
based safety process.
Our life-saving rules target the biggest risks to our people, including working with electricity, at
height or in confined spaces, and road safety (see next page). They apply to everyone working
with us or visiting our sites. The Golden Rule empowers employees to stop any at-risk behaviour
or situation.
All new employees are trained on health and safety as part of their induction. We also provide
training to ensure our people understand how to manage risks relevant to their specific
roles – from using fall protection measures for production teams working at height to ensuring
appropriate ergonomics for office workers. Our Technical Service teams also receive training
relevant to their work at our customers’ sites.
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Our life-saving rules
1. Work with a valid work permit when required
2. Check equipment is isolated before work begins
3. Obtain a permit for entry into a confined space
4. Use fall protection when working at height
5. Wear a seatbelt in motor vehicles when provided
The Golden Rule: Intervene to stop work if conditions or behaviour are unsafe.
Embedding safe behaviour
Unsafe behaviour is the root cause of most incidents at our sites. Our increasingly advanced
behaviour-based safety programmes encourage colleagues to recognise and report at-risk
behaviours. The aim is to raise awareness of unsafe behaviours through positive, constructive
feedback, and remove barriers to safe behaviour by helping us better understand and manage
risks in specific areas of the business.
These programmes are run by health and safety steering committees that include management
and employee representatives. Local workers’ councils or committees meet regularly to discuss
health and safety matters. We encourage employees to make suggestions on ways we can
improve health and safety and involve them in the implementation of improvements.
We conduct regular training on behaviour-based safety. Each production plant must ensure
that at least 15% of employees have completed the training – with some sites targeting 100% –
and we track progress as part of our monthly health and safety metrics. As well as encouraging
employees to observe each other’s behaviour, managers also look out for at-risk behaviours as
part of their regular plant walks.
We monitor incidents and near misses, analyse their root causes and target improvements through
local corrective action plans. All incidents must be reported following our standard operating
procedure. For incidents that have a high potential to cause severe injury, we issue a global alert
across the business to raise awareness and prevent similar incidents occurring elsewhere.
Our Safety Awards scheme recognises sites that have achieved exceptionally strong safety
performance. Platinum, gold, silver or bronze awards are linked to specific safety milestones
such as years or millions of hours with zero recordable or lost-time cases, or exceptionally
strong employee engagement in behaviour-based safety programmes.
Promoting employee health and wellbeing
We are extending the behaviour-based model we use for safety to occupational health issues.
Our initial focus is on ergonomics and musculoskeletal health issues, such as back problems,
which can be an indicator of wider health and wellbeing issues such as workload and stress. Many
of our larger sites offer access to medical professionals, such as doctors and physiotherapists,
for employees.
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Our wider support for employee health and wellbeing includes programmes to promote work–
life balance, healthy lifestyles, mindfulness and smart time management to combat stress and
build resilience, particularly for people working from home during the COVID-19 pandemic. We
also aim to create an open environment where people feel able to ask for help.
Support and benefits vary locally depending on the regional, legal and cultural context. Examples
include health insurance, health check-ups, fitness programmes, flexible working arrangements,
parental benefits and leave, and access to counselling services to address problems at work or
at home through employee assistance programmes.
Performance in 20211
Preventing injuries
• There were a total of 31 recordable cases worldwide in 2021 (down from 33 last year). This
included 17 cases leading to lost working time, six requiring medical treatment and eight
resulting in restricted work.
• Our total lost-time case rate remained low at 0.33 lost time cases per 200,000 hours worked
in 2021, placing us among the top 50% of industry peers.2 However, this rate has increased
from 0.31 last year and we are stepping up our behaviour-based safety programme to
counter this trend.
• Six of our sites achieved zero recordable cases in 2021, showing that our target of zero
recordable cases is possible.
• The rate of severity3 of lost-time cases was 0.395 in 2021. We maintained our track record of
•
zero fatalities.
In addition to our employee safety data, we have begun reporting data on contractor safety
for the first time. There were three recordable cases, all resulting in lost time, among the
720 contractors working on our sites this year.
• We recorded 314 near misses in 2021 and a frequency rate of 6.1 near misses per 200,000
working hours.
• All our production sites maintained a minimum score of 98% for management of life-critical
safety elements.
• We continued to update risk assessments across our operations and conducted an in-depth
risk assessment at Curitiba (Brazil). Following similar in-depth risk assessments in 2020, our
plants in Linnich and Wittenberg (Germany) and Saalfelden (Austria) began implementing
site-specific action plans to address key risks, with progress monitored regularly.
• We continued to invest in business-wide improvements with a particular focus on risks of
injury to hands and fingers (59% of recordable cases in 2021). For example, we are investing
in additional safety housing on machinery to prevent risk of injury to hands or fingers from
contact with moving parts.
• We have behaviour-based safety programmes at all our production sites, except our newly
opened second site in Suzhou (China), to encourage employees to observe colleagues’
unsafe behaviours and provide feedback to correct them. Despite COVID-19 social distancing
hampering these efforts, 17% of employees across our plants observed and reported at-risk
behaviours this year. Together, they made a total of almost 33,000 observations, which each
led to an average of at least one colleague receiving feedback to prevent unsafe behaviour.
1 Safety data includes our paper mill in New Zealand for the first part of the year until it was sold in June 2021.
2 Based on latest published lost-time cases for companies listed in our industry in the Dow Jones Sustainability Index.
3 Severity rate based on number of days away from work x 1,000 / 1,000,000.
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• Employees’ observations of at-risk behaviour enabled us to remove over 1,600 barriers to
safe behaviour this year – from removing trip hazards and clearly marking safe walkways to
reminding colleagues to wear appropriate personal protective equipment (PPE) for each task.
• We began a pilot of a new advanced behaviour-based safety process at our plant in
Linnich (Germany) and presented the methodology to health and safety teams worldwide
in preparation for rollout to more of our plants next year. The advanced process aims to
establish a list of specific behaviours for departments at each site to focus on based on
previous incidents and near misses, and set targets for safe behaviour.
• We maintained our internal standards in line with OSHAS 18001 at our existing production
plants and continued preparation to transition to ISO 45001 – already achieved at Riyadh
(Saudi Arabia) – at all our plants in 2022, including our newly built second plant in Suzhou
(China).
• All our production sites completed SEDEX SMETA audits – which include health and safety as
one of the four pillars – this year, with the exception of our New Zealand paper mill, which
was sold in June 2021.
• Several of our sites celebrated safety milestones without a lost-time case this year (so-called safe
manhours), including: 3 million hours at Rayong (Thailand) and our original production plant
in Suzhou (China), 1 million hours in Wittenberg (Germany), 11 years at the Suzhou Assembly
plant (China), three years at Aachen (Germany), four years at Neuhausen (Switzerland) and two
years for our field service engineers in China.
• Our plant in Rayong received the Outstanding Award for 2021 Excellent Establishment on
Occupational Safety and Health on National Level from the Ministry of Labour in Thailand.
Promoting good health
• Our health rate declined to 95.4%4 in 2021 (down from 96.4% in 2020), mainly due to days
taken for isolation/quarantine during the COVID-19 pandemic. Our main focus this year was
on supporting employees through the challenges of the pandemic.
• We maintained robust COVID-19 prevention measures, in line with regional and local
regulations, to help prevent the virus spreading among our employees. Measures at our
plants include access restrictions, health questionnaires, temperature checks, monitoring
of indoor CO2 concentrations to ensure adequate ventilation and fresh air intake, physical
distancing, more frequent handwashing, additional PPE, segregation of teams and regular
communications on guidance. Meetings continued to be conducted virtually wherever
possible and, for business-critical in-person meetings, all participants must have a negative
COVID-19 test beforehand. We also strongly recommended vaccination and made it clear
that we expect employees to behave safely and follow external health guidelines when
outside work to help them stay safe at home and avoid bringing the virus to their colleagues.
• We implemented a contract tracing system to help us identify who had been in close contact
and ask them to quarantine if a case of COVID-19 was reported by one of their colleagues. We
enabled employees needing to quarantine or isolate at home – as a result of contracting the
virus or being in close contact with someone testing positive either at work or at home – to do
so without loss of pay if they are fully protected (recovered or fully vaccinated).
• Many employees continued to work from home this year if their role allowed them to do
so, and we offered wellbeing initiatives to support them (see next page). At sites where the
risk level was low, we invited people to return to the office, in consultation with their line
managers. Before returning to the office, they received training on the new health and safety
guidelines to prevent the spread of COVID-19 in the workplace.
4
Based on a sickness absence rate of 4.6% (sick days per total days worked). Sickness absence and health rates are based on available
data covering more than 90% of employees.
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Health, safety and wellbeing
327
Promoting wellbeing
• We have begun work to define a holistic strategy and roadmap to foster wellbeing, create a
work environment where our employees feel healthier and more connected, and improve
overall satisfaction. This year, progress in the three key focus areas – physical, emotional and
social health – was delayed by the COVID-19 pandemic.
• We extended homeworking policies and guidelines in all regions, except China, to support
more flexible working for eligible roles. The guidelines recommend a mix of office and
homeworking to be agreed between employees and their managers.
• Teams across our regions continued to implement local wellbeing initiatives this year, including:
• Asia Pacific South: We raised awareness through regular communication and talks on
topics such as financial and mental health, and the do’s and don’ts of homeworking.
Our team in Australia also participated in a national mental health campaign asking
‘Are you OK?’.
• Europe: The planned on-site sports programme at Linnich (Germany) was delayed due
to COVID-19, but we offered online exercise courses for homeworkers to do in their
lunch breaks. In Cluj (Romania), we ran webinars on topics such as work–life balance
and COVID-19 prevention, conducted pulse surveys to check in on employee wellbeing
through the year and provided ergonomic chairs for homeworkers.
• Latin America: We launched a programme to promote physical and social health by
encouraging groups of employees to team up to win prizes by running or walking the
furthest. Together, they clocked up over 3,000km in the first month alone.
• Middle East and Africa: Over 100 people joined our webinars on health topics such as
managing stress.
• North America: We hosted a wellness day to raise awareness of health and wellbeing
topics, held talks and webinars on topics such as nutrition and saving for retirement,
and ran a step counting competition with donations to a local children’s hospital offered
for the most steps achieved.
RECORDABLE AND LOST-TIME CASES
Total recordable cases1
Lost-time cases2
53
23
51
26
41
16
Lost-time case rate (per 200,000 hours worked)
0.55
0.62
0.38
Severity rate of lost-time cases3
0.414
0.675
0.934
43
20
0.49
0.785
39
17
0.43
0.628
33
13
0.31
0.204
31
17
0.33
0.395
2015
2016
2017
2018
2019
2020
2021
1 Total recordable cases include medical treatment and restricted work cases as well as lost-time cases.
2 A lost-time case rate is defined as one or more shift absence or loss of one (or more) working day(s).
3 Severity rate based on number of days away from work x 1,000 / 1,000,000.
RECORDABLE INJURIES BY TYPE IN 2021 (%)
58.8%
Hand or finger
Head
Foot or leg
Back/lower back
58.8%
Hand or finger
Head
Foot or leg
Back/lower back
5.9%17.7%17.7%5.9%17.7%17.7%Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Environmental management
328
RESPONSIBLE CULTURE:
ENVIRONMENTAL
MANAGEMENT
Material issue
N/A
Additional strategic topic
Minimising production waste
Key performance indicators
GRI
306-1
GRI
306-2
GRI
306-3
GRI
306-4
GRI
306-5
Additional GRI indicators reported
GRI
303-5
Why is this strategic for SIG?
Key policies
• Environment, Health and Safety Policy
Relevant SDGs
Plants with
ISO 14001
certification
Responsible
Group Corporate Responsibility team
Evaluation of management approach
ISO certification audits, annual internal environment, health and
safety (EHS) audits, SEDEX SMETA audits, EcoVadis assessments,
ASI certification audits (in relation to product stewardship)
Grievance mechanism
Via line managers or Ethics & Compliance Hotline
Our environmental responsibility starts with our own operations. In addition to our strong
focus on operational greenhouse gas emissions, carbon neutral production, climate risks and
opportunities (see > page 268), we strive to have a positive impact in other areas related to
environmental management.
In particular, we aim to lead by example by using resources efficiently, minimising waste and
reusing or recycling materials wherever possible in our production operations to conserve
natural resources. This also delivers business benefits by reducing costs and supporting lean
and efficient production.
Demonstrating strong environmental management is also important to meet customer
requirements and ensure compliance with relevant regulations.
Our commitment
We are committed to monitoring and managing environmental impacts from our operations –
including minimising energy use, greenhouse gas emissions, water consumption and waste
(including raw materials, hazardous and electronic waste), and working to eliminate waste sent
to landfill.
Environmental management in our operations also supports our wider Climate+ (see > page 268)
and Resource+ (see > page 282) ambitions.
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Environmental management
329
Our goals
2025 target
25% reduction in grams of waste per m2 of packaging material (from 2016)
Zero landfill – all waste to be recycled or used as renewable biofuel
Maintain certification to ISO 14001:2015 at all production plants
Progress tracker
See > page 271 for targets on operational greenhouse gas emissions.
Management overview
We have robust environmental management systems in place that promote continuous
improvement. All our production, assembly and research and development sites have
environmental management systems certified to the international ISO 14001 standard. New
sites are designed to minimise environmental impacts in line with sustainable buildings
standards, such as LEED (Leadership in Energy and Environmental Design).
In addition, our sites in Linnich and Wittenberg (Germany) and Saalfelden (Austria) have energy
management systems certified to ISO 50001 that support improvements in energy efficiency.
This is just one of the ways we are reducing the carbon footprint of our operations (see
> page 271).
A range of initiatives are in place to reduce waste at our production plants by using more efficient
processes and increasing opportunities to reuse and recycle materials – including returning
certain types of waste to suppliers for reuse. These efforts also contribute to our wider efforts
to support a circular economy through our Resource+ action area (see > page 282).
Where it is not feasible to reuse or recycle waste, we work with our waste management service
providers to choose the next best option, such as energy recovery, to avoid sending waste to
landfill wherever possible. We also implement responsible disposal options for hazardous and
electronic waste to avoid environmental harm and ensure hazardous waste does not end up
in landfills.
We use relatively little water in our operations and water use is not considered a material impact
for SIG. However, we recognise that water is an increasingly important issue for stakeholders,
particularly in water-scarce regions. Our production processes do not require water, but we
monitor and aim to minimise water use for hygiene and catering at our sites, including those in
water-stressed areas. Our main focus for reducing water use is on improving the efficiency of
our filling machines which are owned and operated by our customers (see > page 299).
Our own operations do not have a significant impact on biodiversity, and we minimise any
potential impacts through our environmental management systems. The main biodiversity
impact of our business is in the forests we source raw materials from and we manage this by
setting strict standards for suppliers through FSC™ certification (see > page 264).
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Environmental management
330
Performance in 2021
Maintaining environmental management certifications
• Our three European sleeve production plants demonstrated further year-on-year energy
reductions to maintain their certification to ISO 50001.
• We maintained our global certification to ISO 14001:2015 with audits this year of our plants
in Suzhou (China) and Linnich (Germany).
• Our newly built second plant in Suzhou (China), achieved LEED Gold certification and the
Dubai headquarters of our Middle, East and Africa operations was awarded LEED Platinum
certification. We are also integrating LEED criteria in the design of the new plant we have
begun building in Mexico.
• All our production sites completed SEDEX SMETA audits – which include environmental
management as one of the four pillars – this year, with the exception of our New Zealand
paper mill, which was sold in June 2021.
Minimising production waste
• Our focus is increasingly on eliminating waste to landfill by either reusing or recycling waste,
or converting it to renewable biofuel. In 2021, 97.7% of waste was reused or recycled, 2% was
recovered for energy and only around 0.3% of waste went to landfill.
• We have achieved zero waste to landfill at several of our plants, including Linnich and
Wittenberg (Germany), both plants at Suzhou (China), Neuhausen (Switzerland) and
Saalfelden (Austria).
• The total amount of waste generated at our production sites increased by 24% to 66,261 tonnes,
mainly as a result of more frequent product changeovers to meet customer demand for smaller
lots. Our waste rate rose by 6% in 2021 to 34 grams per m2 of packaging material.
• Total production waste included 1,458 tonnes of hazardous waste that was disposed of by
certified waste management contractors.
• We continue to seek ways to minimise production waste. Local initiatives to reduce waste this
year include establishing reverse logistics to improve circularity by returning scrap aluminium
and pallets from our plant in Curitiba (Brazil) to suppliers for reuse.
Monitoring water use
• Our assessment of water risk across our operations, using the World Resources Institute
water risk atlas, found that our plants in Linnich (Germany), Riyadh (Saudi Arabia) and Suzhou
(China) are in water-stressed areas, as well as our plant in Melbourne (Australia) which ceased
production of aseptic cartons in mid-2021. Together, these plants accounted for 30% of our
production plants and 51% of the cost of goods we sold in 2021.
• We continued to implement measures to reduce water use at sites in water-stressed areas.
Our new LEED Gold-certified second plant in Suzhou is saving around 28 million litres of tap
water a year by collecting and recycling rainwater for irrigation and toilet flushing. And our
LEED Platinum-certified offices in Dubai have introduced systems to reduce water wastage
and raise awareness of measures employees can take to conserve water.
• We used a total of 287.3 million litres of water in 2021, including 73.8 million litres in water-
stressed areas.
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Environmental management
331
WASTE RATE1 (grams of waste per m2 of sleeves produced)
35
35
37
37
35
35
33
33
32
32
34
34
2016
2017
2018
2019
2020
2021
PRODUCTION WASTE BY TYPE1 (thousand tonnes, by type)
2016
2017
Raw and laminated carton
Polyethylene
Hazardous waste
Aluminium (<1%)
Total
2018
2016
44.7
2.3
2.7
–
2019
2018
46.5
1.6
2.8
–
2017
47.2
1.7
2.7
–
2020
2019
48.3
1.6
2.7
–
2021
2020
48.4
1.6
2.9
–
2021
58.3
3.5
3.7
–
49.9
51.6
51.0
52.7
53.1
65.5
PRODUCTION WASTE BY DISPOSAL METHOD IN 20211 (tonnes)
Reused
Recycled
Recovered for energy
Landfill
Total waste
Non-hazardous waste
Hazardous waste
Total waste
1,037
62,897
737
132
64,803
515
293
560
90
1,458
1,552
63,190
1,297
222
66,261
PRODUCTION WASTE BY DISPOSAL
METHOD IN 20211 (tonnes)
0.3%
95.4%
2.0%
2.3%
Recycled
Reused
Recovered for energy
Landfill
1
Production waste and waste rate are for sleeves production only, and exclude our paper mill in New Zealand and our closures plant
in Switzerland.
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Communities
332
RESPONSIBLE CULTURE:
COMMUNITIES
Material issue
N/A
Additional strategic topic
Thriving communities
Key performance indicators
Impact of community engagement programmes
Responsible
Way Beyond Good Champions and SIG Way Beyond Good Foundation
Evaluation of management approach
Annual community engagement impact assessment and
quarterly review by the Board of Trustees (including members
of our Group Executive Board and senior management) of
Foundation activities
Key policies
Human Rights, Labour and Community Engagement Policy
Grievance mechanism
Ethics & Compliance Hotline
Relevant SDGs
Why is this strategic for SIG?
Supporting thriving communities helps us strengthen our business by being a good neighbour
and an employer of choice, enhancing our corporate image, and exploring new models and
markets. Support for local communities is just one of the ways we have a positive impact
on people’s lives. Delivering societal benefits is inherent in our purpose to partner with our
customers to bring food products to consumers around the world in a safe, sustainable and
affordable way.
Our commitment
We are committed to engaging with local communities where we operate to understand how
we can make a meaningful positive impact to help them thrive. We contribute through local
partnerships and employee volunteering. We channel our support for wider communities
through the SIG Way Beyond Good Foundation (see > page 251), which focuses on projects that
strengthen civil society and create positive impacts for the environment.
Our goals
2025 target
Increase the impact of community engagement programmes by 50%
(from 2020)
Create self-sustaining, scalable models for the Way Beyond Good
Foundation’s Cartons for Good project.
Scale up and expand our community recycling model.
Progress tracker
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Communities
333
Management overview
Our Way Beyond Good engagement programme is led by our network of Way Beyond Good
Champions who run themed campaigns to raise awareness of responsibility topics with the help
of local action groups of employee volunteers. The Champions in each location have an allocated
budget each year to run community projects. We focus on projects that meet the needs of local
stakeholders, harness the skills of our people and have a positive impact within our communities.
We measure the impact of our community programmes based on an assessment by the
employees and communities involved. Impact is assessed based on who benefits from the
project, the type of impact it has and its potential to contribute to the United Nations Sustainable
Development Goals. The resulting score enables us to consistently measure and track the
overall impact of our community engagement programmes worldwide.
We also contribute to communities through the SIG Way Beyond Good Foundation which is
focusing on projects related to our Food+ (see > page 290) and Resource+ (see > page 282) action
areas.
Performance in 2021
Delivering positive impact through community engagement
• Despite COVID-19 continuing to restrict activities, we achieved an impact score of 17,338
through 38 community engagement programmes around the world in 2021, up by 1% from
17,096 in 2020.
• Local teams used our Way Beyond Good Champions engagement campaigns to support
communities, while learning about the featured topics of climate (see > page 276) and forests
(see > page 267). For example, more than 100 colleagues in Brazil completed a series of
climate-related challenges to earn points that were then converted into meals donated to
52 homeless people in São Paulo and over 800kg of food donated to 220 families affected by
COVID-19 in Curitiba. And, in Romania, each correct answer in our climate quiz for employees
earned a donation to a charity that helped families affected by flooding to rebuild their lives.
• Other local community programmes focused on providing food for those in need, including
1,000 iftar meals donated in the United Arab Emirates during Ramadan, 3,000 packs of milk
contributed to COVID-19 relief efforts in South Korea in partnership with Seoul Dairy, and a
donation to support Feeding America’s campaign to fight hunger in the USA.
• Our team in Linnich (Germany) raised money to support local communities affected by
•
flooding, with matched funding from SIG doubling their contributions.
In Brazil, we celebrated our Curitiba plant’s 10th anniversary by supporting local schools in
creating a book of stories on the history of the city of Campo Largo, where the plant is based.
The book provides a useful teaching resource for local schools, encouraging students to
learn about the city’s cultural, historical and environmental heritage.
Contributing through the SIG Way Beyond Good Foundation
• We contributed €355,000 in grants to support the work of the SIG Way Beyond Good
Foundation in 2021.
• Through the SIG Way Beyond Good Foundation, we continued to explore ways to create a self-
sustaining model to scale up our flagship Cartons for Good project (see > page 294) and began
work to extend our successful community recycling model to Indonesia (see > page 288).
• We directed our annual corporate festive donation via the SIG Way Beyond Good Foundation
to BGBJ, an NGO in Indonesia that supports vulnerable people who make a small living by
salvaging reusable or recyclable materials from South East Asia’s largest landfill.
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Governance and ethics
334
RESPONSIBLE CULTURE:
GOVERNANCE AND ETHICS
Material issue
N/A
Additional strategic topic
Fair business practices
Additional GRI Indicators reported
GRI
102-16
GRI
102-17
GRI
205-2
GRI
406-1
GRI
412-2
Key policies
• SIG Code of Conduct
• Corporate Governance Policy
• Cyber Security Policy
Why is this strategic for SIG?
Relevant SDGs
Responsible
General Counsel and Chief Compliance Officer
Evaluation of management approach
Regular review by Audit and Risk Committee, SEDEX SMETA site
audits and EcoVadis assessments
Grievance mechanism
Via line managers, Human Resources partners,
global and regional Legal and Compliance officers or
Ethics & Compliance Hotline
Acting with integrity and implementing fair business practices is fundamental to our responsible
culture, essential to comply with regulations, and critical to protect our reputation and maintain
stakeholder trust.
Our commitment
We are committed to act professionally and with integrity in everything we do, abiding by the
ethical principles set out in our Code of Conduct which include:
• Ethical and legal behaviour
• Fair, courteous and respectful treatment of fellow employees and others with whom we interact
• Fair and appropriate consideration of the interests of other stakeholders (customers, business
partners, government authorities and the public) as well as of the environment
• Professionalism and good business practice.
We have a zero tolerance policy on bribery or corruption in any form.
Our goals
2025 target
Mandatory annual Code of Conduct training for all employees
Progress tracker
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Governance and ethics
335
Management overview
We expect everyone working with us to be guided by our values and comply with the SIG Code
of Conduct.
The Code is approved by the SIG Board of Directors. It includes clear guidance on topics
such as anti-bribery and anti-corruption, avoidance of conflicts of interest, anti-trust and fair
business practices, privacy and data protection, human rights compliance, equal employment
opportunity, anti-harassment and anti-discrimination, and political and charitable activities. It is
available in 18 languages.
Our anti-corruption policy is included in our Code of Conduct and reinforced through training.
All employees are trained on the Code as part of their induction when they join the business and
are expected to complete a refresher on the Code as part of our mandatory annual compliance
training every year. We track completion rates and provide regular updates to managers, as well
as quarterly reports to the Group Executive Board. We make clear that any employees failing to
complete annual compliance training may face disciplinary measures.
We also offer in-depth training for people working in high-risk roles (such as sales, purchasing
and finance) to help them understand how to apply the SIG Code of Conduct to real-life situations
they may face. Further guidance is provided in our accompanying Gifts Policy. All employees
must report any potential or actual conflict of interest. People working in management and
high-risk roles must complete a conflict of interest questionnaire annually.
We encourage people to speak up if they have any concerns about unethical behaviour, without
fear of retaliation. Employees can seek advice or raise concerns through their line managers,
Human Resources teams, global and regional Legal and Compliance officers, or our confidential
Ethics & Compliance Hotline. Concerns can be raised via the hotline by email or phone 24 hours
a day in local languages and anonymously (where permitted by local legislation).
We investigate all concerns and take appropriate action including, but not limited to, disciplinary
measures.
Performance in 2021
Updating our Code of Conduct and policies
• We have updated our Code of Conduct to make it easier for employees to find guidance
on key topics such as human rights compliance, privacy and data protection, and equal
employment opportunity.
• Available in 18 languages, the updated Code includes clear and simple checklists on
employees’ responsibilities in relation to each topic. It will be rolled out to employees through
their annual refresher training next year.
• We published the updated Code of Conduct, as well as detailed policies on related topics such
as corporate governance and cyber security on our website.
Annual Report 2021 Corporate Responsibility Report
Approach and performance
Responsible culture: Governance and ethics
336
Training our people
• 99% of employees completed their annual refresher certification on our Code of Conduct
in 2021 – including 100% of employees in our Middle, East and Africa region as part of the
integration of our former joint venture.
In addition to refreshing employees’ overall understanding of the Code of Conduct, our
mandatory annual global compliance curriculum also covered specific topics such as our
gifts policy, data privacy and security awareness.
•
• We conducted additional face-to-face training (mainly virtually due to the COVID-19 pandemic)
on the Code of Conduct for around 4,000 employees in specific parts of the business.
Employees in high-risk roles completed training on topics such as anti-bribery, anti-trust, data
privacy, insider trading and anti-harassment.
• We continued to raise awareness on ethics and compliance topics through various channels,
including our internal newsletter, posters, emails and a video of SIG people around the world
sharing key messages on Acting with Integrity, Always. We also used these communications
to advertise our Ethics & Compliance Hotline and encourage people to speak up if they have
any concerns.
Investigating and acting on concerns
• Concerns reported via our Ethics & Compliance Hotline and other channels in 2021 mainly
related to human resources issues and potential conflicts of interest.
• We investigated all concerns and took disciplinary action, including reprimands and
dismissals, where appropriate.
Maintaining ethical standards
• All our production sites completed SEDEX SMETA audits – which include business ethics as
one of the four pillars – this year, with the exception of our New Zealand paper mill, which
was sold in June 2021.
Annual Report 2021 Corporate Responsibility Report
Performance summary
337
PERFORMANCE
SUMMARY
338 Key performance indicators
340 Progress towards our
2025+ targets
Annual Report 2021 Corporate Responsibility Report
Performance summary
Key performance indicators
338
KEY PERFORMANCE
INDICATORS
The table below provides a summary of the key performance indicators we use to measure our
performance on our most material CR issues.
In the table below, data for 2021 has been assured with limited assurance by
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, except where
otherwise noted. KPI data was assured in previous years as part of our CR reporting process
(see previous years’ CR Reports for details of assured data and assurance scope). However,
some data for previous years has been restated in this report in line with changes to our
business to enable a better understanding of performance trends on a like for like basis
(see footnotes). The restated data for 2016–2020 in the table below has not been assured.
Unless otherwise stated, the scope of data is as follows. It includes all our fully-owned global
operations, including our newly opened second production site in China, our former joint ventures
in the Middle East and Africa for the first time, and our production plant in Melbourne (Australia)
and performance relevant to its production volumes which moved to other plants after it ceased
production of aseptic cartons in mid 2021. It excludes our paper mill in New Zealand, which was
sold in June 2021, and our joint venture in Japan.
Material issue
Metric
Tackling
climate change
Total Scope 1 and 2 greenhouse gas emissions
(thousand tonnes CO2 equivalent)1, 18
2016
113.1
2017
67.1
2018
66.9
2019
62.3
2020
53.9
2021
29.8
Total Scope 3 greenhouse gas emissions
(million tonnes CO2 equivalent)1, 3
Scope 1, 2 and 34 greenhouse gas emissions
(grams CO2 equivalent/litre of food packed)1
Scope 1 greenhouse gas emissions for pack
production5 (thousand tonnes CO2 equivalent)1
Scope 2 greenhouse gas emissions for pack
production (market based) (thousand tonnes
CO2 equivalent)1
Scope 1 and 2 greenhouse gas emissions
intensity for pack production5 (tonnes CO2
equivalent/million m2 of sleeves produced)1
Energy in production plants from renewable
sources (power purchase agreements or
certified guarantees of origin) or compensated
using Gold Standard CO2 offset (%)
Operational energy use for
pack production (GWh)1
Energy intensity for pack production5
(MWh/million m2 of sleeves produced)1
Waste rate for pack production5
(grams of waste per m2 of packaging material)7
Total recordable cases2, 8, 9
Lost-time cases9, 10
Lost-time case rate
(per 200,000 hours worked)9, 10
Minimising
production
waste6
Health, safety
and wellbeing
Employee
satisfaction
Sustainable engagement score
(% favourable responses)
Talent
development
Training and development investment
(average training hours/employee)
1,544.8
1,463.2
1,533.1
1,578.7
1,536.1
1,587.2
99
92
93
90
82
79
29.1
38.5
34.4
34.5
31.1
29.7
84.0
28.6
32.5
27.9
22.9
68
42
40
35
17
0
15
22.6
58.4
100
100
100
100
335
194
35
51
26
363
216
37
41
16
386
223
35
43
20
386
210
33
39
17
383
201
32
33
13
402
197
34
31
17
0.62
0.38
0.49
0.43
0.31
0.33
74
–
78
–
87
–
29.0
25.1
23.4
24.3
19.4
20.5
Annual Report 2021 Corporate Responsibility Report
Performance summary
Key performance indicators
339
Material issue
Metric
Fair labour
practices
Plants completed SEDEX Members Ethical
Trade Audit (of total number of plants)
2016
7 of 7
2017
2018
2019
2020
7 of 711
8 of 811
8 of 811
8 of 911
2021
9 of 9
Diversity, equity
and inclusion
Diversity of governance bodies and employees
(women in management)
–
–
See
> 2018 CR
Report,
page 34
–
See
> 2020 CR
Report,
page 67
See
> page 316
Sustainable
raw materials
A-materials13 from certified sources
(% by volume)
Thriving forests
Packs sold labelled with FSC™ logo (%)
Responsible
suppliers
Sustainable
packaging
innovation
New suppliers screened using social
responsibility criteria (%)16
Food packed in SIG packs with SIGNATURE
portfolio packaging materials (million litres)
Food packed in SIG packs with
SIGNATURE portfolio packaging materials
(% of total litres packed in SIG packs)
Packs sold labelled with ASI logo (million packs)
Impact mitigation potential of innovations
related to current standard product
(polymer savings from RS structure per year,
tonnes)
53%15
63%15
64%15
63%15
62%15
70%
56
100
80
100
93
100
96
100
97
100
98
10014
199.72
198.82
227.32
334.82
457.22
554.6
1.5%2
1.5%2
1.7%2
2.3%2
3.1%2
3.6%
–
–
–
–
7502
4,8502
3.42
6,500
80.02
7,800
577.0
9,803
Recycling and
circular economy
SIG packaging portfolio that is recyclable (%)
100
100
100
100
100
100
Safe food supply Nutritious17 food and beverage products
–
–
–
–
10.0
10.6
brought to consumers in SIG packs
(billion litres)2
Significant product and service categories
for which health and safety impacts are
assessed for improvement (%)
Non-compliance concerning the health
and safety impacts of products and services
(number of incidents)
100
100
100
100
100
100
0
0
0
0
0
0
1 Data for previous years adjusted in line with methodologies used and revised scope of reporting resulting from changes to the business.
2 Not assured.
3 See > page 359 for a breakdown of Scope 3 categories.
4
Includes most material Scope 3 categories only: goods and services, use of our products (filling machines) and end-of-life treatment (cartons).
5 Sleeves production only. Excludes our closures plant in Switzerland.
6 Additional strategic topic (not a material issue).
7 Metric changes in line with the wording of our 2025 target, but data from previous years are still correct.
8 Total recordable cases include medical treatment and restricted work cases as well as lost-time cases.
9 Data includes our paper mill in New Zealand for the first part of the year until it was sold in June 2021.
10 A lost-time case is defined as one or more shift absence or loss of one (or more) working day(s).
11 Data restated to include production plants only, not office sites.
12 Newly acquired production site in Melbourne (Australia) completed its first SEDEX audit in 2021 as part of the two-yearly audit cycle.
13 A-materials are those that go directly into our packs – paperboard, polymers, aluminium foil and ink.
14 Excludes Middle East and Africa region.
15 Data from 2016–2020 has been restated in line with change in indicator from ‘by spend’ to ‘by volume’.
16 % of significant direct suppliers.
17 For definition of 'nutritious' please refer to > page 292.
18 We have invested in Gold Standard®-certified projects to offset our Scope 1 emissions to achieve carbon neutral production for all our fully-owned plants
since 2018 (including our former joint venture in Middle East and Africa from 2021).
Annual Report 2021 Corporate Responsibility Report
Performance summary
Progress towards our 2025+ targets
340
PROGRESS TOWARDS OUR
2025+ TARGETS
The Way
Beyond Good
action area
Forest+
Material
issue
Thriving
forests
2025 target
Partner to bring at least
650,000 additional hectares
of forest into sustainable
management beyond
what we need to make
our products by 20301
Establish a partnership
with Brainforest, an NGO,
to contribute to restoring
or creating resilient and
sustainable forests
Partner with an NGO to
develop a methodology
to measure the impact of
FSC™ certification
Work with customers to
include the FSC™ label on 100%
of the packs we sell, closing
the remaining 3% gap
Maintain 100% FSC™-certified
supply of liquid packaging
board for our packs
(also a target for Our supply chain)
Climate+
Tackling
climate
change
Reduce Scope 1, 2 and 32
greenhouse gas emissions
by 25% per litre of food packed
by 2030 (from 2016)
Reduce Scope 1 and 2
greenhouse gas emissions
by 50% by 2025 and by 60%
by 2030 (from 2016)
Maintain 100% renewable
energy and Gold Standard CO2
offset for all non-renewable
energy (at production plants)
Expand use of on-site solar
power to meet at least 10%
of our global electricity use
as part of overall renewable
power purchase agreements
to meet 25% of our global
electricity use
Transition to 100%
bioethanol or other bio-
materials for printing
(also a target for Our supply chain)
Reduce CO2 emissions from
inbound and outbound
logistics by 25% (from 2016)
Progress
tracker
2021 performance
We have entered into partnerships with NGOs to help us
deliver and measure progress towards this target, including
identifying suitable projects to invest in, using life-cycle assessment
techniques to measure additional forests brought into sustainable
management and developing ways to understand how to deliver
transformative change on the ground.
We began working with Brainforest – a Swiss for-impact Venture
Studio for forests and climate, co-founded by WWF Switzerland and
made possible by the Migros Pioneer Fund – and its venture Xilva AG
to help us identify potential projects that we can invest in to support
our forest restoration target. We are looking for science-based
projects that are designed to create resilient forest ecosystems to
improve biodiversity and store carbon to unlock the full climate
potential of forests.
We are working with the Institute for Energy and Environmental
Research (IFEU) to measure the impact of sourcing FSC™-certified
raw materials using life-cycle assessment techniques focusing on
carbon and biodiversity.
98% of the packs we sold in 2021 carried the FSC™ label (up from
97% in 2020). We aim to close the remaining 2% gap by continuing
to promote the benefits of FSC™ labelling to our customers.
As of January 2021, 100% of the liquid packaging board we source
for use in our packs is purchased with FSC™ certification – an industry
first. As we used up remaining supplies purchased the previous year,
97% of the liquid packaging board we used to produce our packs
during 2021 was purchased with FSC™ certification (up from 83%
in 2020).
We have reduced our Scope 1, 2 and 3 emissions per litre of
food packed by a further 3% in 2021 – and by 20% overall from
the 2016 baseline.
We have reduced our Scope 1 and 2 emissions by 45% in 2021 –
and by 74% from the 2016 baseline. The significant reduction this
year is as a result of our newly acquired operations in the Middle
East and Africa switching to 100% renewable energy, in line with the
rest of our global production which has been carbon neutral since
2018. We are on track to meet our 2030 target based on the year-
on-year projections we have modelled.
We have maintained our carbon neutral production with 100%
renewable energy and Gold Standard CO2 offset for all non-
renewable energy at our production plants, including our now
fully-owned former joint venture in the Middle East and Africa.
We installed further on-site solar arrays in Brazil, China and
Thailand, and extended our direct investment in renewable
capacity outside our own sites for the first time through a power
purchase agreement in Germany. On-site solar power met
2% of our global electricity use in 2021 and power purchase
agreements (including both on-site and off-site) met 3%.
We have switched from fossil-based solvents to plant-based
bioethanol for our printing processes at six of our production
plants – including our newly opened second plant in Suzhou,
China – and we are working with suppliers to complete this
transition worldwide.
Overall, upstream logistics emissions (covering SIG’s inbound and
outbound transportation) have increased by 23% from the 2016
target baseline, largely as a result of our 2020 acquisition that
included a production plant in Australia. However, we reduced
these emissions by 4% following the closure of the Australian plant
in June 2021.
Annual Report 2021 Corporate Responsibility Report
Performance summary
Progress towards our 2025+ targets
341
The Way
Beyond Good
action area
Material
issue
Resource+
Recycling
and circular
economy
2025 target
Partner with stakeholders
to implement dedicated and
country specific roadmaps to
support increased collection
and recycling of beverage
cartons
Food+
Sustainable
food supply
Use SIG’s position within a
more sustainable food supply
system to create demonstrable
positive impacts on nutrition
and hydration
Increase the total volume of
nutritious food and beverage
products brought to consumers
in SIG packs by 50% by 2030
(from 2020)
Support two start-ups per year
through our SIGCUBATOR
programme to share unused
aseptic filling capacity to deliver
nutritious food safely and
efficiently
Maintain certification
to ISO 9001:2015 at all
production plants
Maintain BRCGS AA Grade
certification at all sleeves and
spout production plants3
Sustainable
innovation
Sustainable
packaging
innovation
Launch a full barrier
carton linked to 100%
renewable materials4
(also a target for Resource+)
Launch a pack made with
100% recycled content
(also a target for Resource+)
Reduce energy use by 20%,
hydrogen peroxide use by
35% and water use by 25% per
hour of runtime in our next
generation filling machine for
mid size format packs (by 2021)
Reduce use of consumables
by 25% for the next generation
filling machine for small
format packs
Progress
tracker
2021 performance
We have roadmaps in place for 24 priority countries and
we continued to work with industry partners, governments,
municipalities, customers and communities to implement
country-specific programmes to support increased collection
and recycling – including the expansion of successful collection
programmes in Brazil, new recycling facilities in Germany and
Australia, and consumer awareness and collection programmes
in China, Indonesia, Thailand and the UK. In Europe, we have
also committed to ambitious industry targets for collection
and recycling set by the Alliance for Beverage Cartons and the
Environment’s new roadmap for 2030.
We have begun tracking and reporting the amount of food and
beverages that helps contribute to a balanced diet and lead to
better health (as defined by the independent Health Star Rating
System) filled in our packs to better understand the role of our
packaging solutions in delivering nutrition to people around
the world. Our packaging systems enabled customers to bring
10.6 billion litres of nutritious food and beverage products to
consumers in SIG packs in 2021, an increase of more than 5% from
10.0 billion litres in 2020 towards our new target of 50% by 2030.
Three more start-ups used our new SIGCUBATOR programme
to gain advice, consumer insights and access to SIG filling
machines at our Tech Centres or at our customers’ facilities
to pack nutritious new products on a small scale, including
nutritious plant-based milk alternatives and protein drinks.
We maintained our group-wide certification to the revised
ISO 9001:2015 standard in 2021.
All our production plants have achieved AA Grade certification to
the current issue of the BRCGS Packaging standard, Issue 6.
Our SIGNATURE 100 solution for dairy products eliminates the
need for aluminium and uses a certified mass balance approach
to link the polymers to 100% renewable forest-based materials
(residues from the paper making process). This year, we developed
the world’s first full barrier aluminium-free solution for aseptic
carton packs. SIGNATURE EVO, to be launched in early 2022, will
provide comparable barrier properties to our packaging materials
that include an aluminium foil barrier layer so it can be used
with oxygen-sensitive products, such as juices, as well as liquid
dairy. We plan to launch a SIGNATURE EVO 100 version of this
aluminium-free full barrier carton in future with all materials 100%
linked to forest-based renewable sources via a certified mass-
balance system, which will achieve our goal to launch a full barrier
carton linked to 100% renewable materials. We changed the
target this year as we are no longer seeking to create a pack made
directly with 100% renewable materials because we are confident
our use of a certified mass balance system to link the polymers
in our packs to renewable raw materials is a more effective way
to support the transition from fossil to renewable raw materials
within the conventional and highly efficient polymer industry.
We continued to explore options to increase the recycled
content of our packs, building on last year’s launch of
SIGNATURE CIRCULAR, the world’s first aseptic carton pack
with polymers linked to 100% recycled plastics.8 However,
we have now discontinued this target and will focus on using
more renewable materials.
5 We launched our next generation filling machine SIG NEO in late
2021. It is designed to reduce use of energy, hydrogen peroxide
and water, and field testing in 2022 will confirm whether we have
met our reduction targets.
We began work on the development of our next generation filling
machine for small format packs, which will be designed to reduce
use of consumables by 25%. We aim to have a prototype ready for
testing in 2022.
Annual Report 2021 Corporate Responsibility Report
Performance summary
Progress towards our 2025+ targets
342
The Way
Beyond Good
action area
Material
issue
Responsible culture
2025 target
Progress
tracker
2021 performance
Our
supply
chain
Responsible
suppliers
Ensure 100% of significant
suppliers accept our Business
Ethics Code or have an
equivalent code in place
Audit 50% of high-risk
suppliers each year
Provide regular training
(at least every two years)
on ethical supplier standards
and sustainable sourcing to
all employees who interact
frequently with suppliers
Sustainable
raw
materials
100% A-materials6
from certified sources
Our people Diversity,
equity and
inclusion
Maintain survey score linked to
inclusive environment above
industry benchmark
Increase percentage of women
in leadership positions to 30%
Talent
develop-
ment
Sustain our training and
development investment
above industry benchmark
Ensure 100% of key talent
(current and future business
leaders for critical positions) have
a defined development plan
Employee
satisfaction
Achieve engagement level
above industry benchmark
Increase % of employees
who feel we have responded
to their feedback based on
the last survey
Increase % of employees who
feel SIG makes adequate use
of recognition and reward
other than money
Fair labour
practices
Advance our human rights risk
identification and assessment
processes in our own operations
and supply chain to define
salient human rights issues
Conduct assessments of
potential human rights risks
and impacts in 50% of our
own plants every two years
Maintain SEDEX Members
Ethical Trade Audit (SMETA)
at all production sites
61% of all active significant suppliers (78% direct and 50% indirect),
including suppliers of our key raw materials, have accepted the
SIG Business Ethics Code for Suppliers or have an equivalent code
in place and we are engaging with those due to be reassessed or
currently under review to bring this up to 100%.
No suppliers were identified as high-risk in 2021 as all those
completing assessments have signed up to our ethics code or
provided evidence of EcoVadis assessments, SEDEX audits or
equivalent third-party programmes.
We trained all our global, regional and local procurement teams
to introduce them to our updated Responsible Sourcing Directive
and test their knowledge on key topics.
We increased the proportion of A-materials from certified sources to
70% (by volume7) in 2021 (up from 62% in 2020) as we increased the
amount of liquid packaging board purchased with FSC™ certification
to 100%, secured more ASI-certified aluminium and grew sales of
our SIGNATURE 100 and SIGNATURE FULL BARRIER solutions that
use polymers certified8 to ISCC PLUS or REDcert2. We continue to
offer the only packaging material (SIGNATURE FULL BARRIER) for
aseptic cartons with all three key materials – liquid packaging board,
polymers and aluminium – from certified sources.
We have set this target to support our focus on inclusion and will
measure progress through our next biennial survey in 2022.
Women represented 20% of our leaders in 2021, up from 18% last
year. The integration of our Middle East and Africa operations –
where only around 12% of all employees are women – has offset
higher increases in other regions. But we remain on track with our
roadmap to achieve our 2025 target of 30%.
We provided an average of 20.5 hours of training per employee,
slightly higher than last year but still falling short of the pre-pandemic
industry benchmark of 24.0 hours. With COVID-19 restrictions
continuing to make in-person training difficult, we introduced more
online training offerings this year.
By the end of 2021, 24% of employees classified as key talent
recorded that they have a formal development plan in place.
In our last biennial survey in 2020, we achieved an overall
engagement level of 87%, seven points higher than the industry
benchmark of 80%. Our next survey will be in 2022.
In our 2020 survey, 61% of employees felt we had responded to
their feedback in the last survey. We have introduced measures
to address their 2020 feedback at global and local level, and will
measure progress against this target through our next biennial
survey in 2022.
In our 2020 survey, 63% of employees felt SIG makes adequate
use of recognition and reward other than money. This year, we
ran our second global Shine Awards and introduced more non-
monetary recognition programmes across our regions. We will
measure progress against this target through our next biennial
survey in 2022.
We have set these new targets to advance our human rights risk
identification and assessment processes in our operations and
supply chain to define salient human rights issues by 2025.
All our production sites completed SEDEX SMETA audits this year,
with the exception of our New Zealand paper mill, which was sold
in June 2021.
Annual Report 2021 Corporate Responsibility Report
Performance summary
Progress towards our 2025+ targets
343
The Way
Beyond Good
action area
Material
issue
Health,
safety and
well being
Employee
health,
safety and
wellbeing
2025 target
Zero recordable cases9
Achieve a lost-time case
rate in the top 20% of
industry peers11
Define a holistic strategy and
roadmap to foster wellbeing
at SIG
Progress
tracker
2021 performance
There were 31 recordable cases in 2021 (down from 33 in 2020).10
We continued to embed our behaviour-based safety programme
to target unsafe behaviours across the business.
Our total lost-time case rate remained low at 0.33 lost-time
cases per 200,000 hours worked in 2021, placing us among the
top 50% of industry peers. However, this rate has increased from
0.31 last year and we are stepping up our behaviour-based safety
programme to counter this trend.
Following delays due to COVID-19, we have begun work to define
a holistic strategy and roadmap to foster wellbeing, create a
work environment where our employees feel healthier and more
connected, and improve overall satisfaction. This year, we set out
three key focus areas – physical, emotional and social health –
with a clear vision for each.
Environ-
mental
management
Minimising
production
waste
25% reduction in grams of
waste per m2 of packaging
material (from 2016)
Our waste rate increased by 6% in 2021 to 34 grams per m2
of packaging material. We continue to seek ways to minimise
production waste.
Zero landfill – all waste
to be recycled or used as
renewable biofuel
In 2021, 97.7% of waste was reused or recycled. Only around 0.3%
of waste went to landfill and six of our plants achieved zero landfill.
Minimising
production
waste
Maintain certification
to ISO 14001:2015 at all
production plants
We maintained our global ISO 14001 certification in 2021,
including certification of our newly opened second plant in
Suzhou (China).
Tackling
climate
change
Communities Thriving
communi-
ties
Increase the impact of
community engagement
programmes by 50% by 2025
(from 2020)
Create self-sustaining, scalable
models for the Way Beyond
Good Foundation’s Cartons for
Good project.
Scale up and expand our
community recycling model.
Governance
and ethics
Fair
business
practices
Mandatory annual
Code of Conduct training
for all employees
Despite COVID-19 continuing to restrict activities, we achieved
an impact score of 17,338 through 38 community engagement
programmes led by our Way Beyond Good Champions around
the world in 2021, up by 1% from 17,096 in 2020.
Through the SIG Way Beyond Good Foundation, we continued
to explore ways to create a self-sustaining model to scale up our
flagship Cartons for Good project.
We expanded our so+ma partnership in Brazil and, through the
SIG Way Beyond Good Foundation, we began work to extend this
community recycling model to Indonesia.
99% of employees completed their mandatory annual refresher
certification on our Code of Conduct in 2021 – including 100% of
employees in our Middle, East and Africa region as part of the
integration of our former joint venture.
1 The previously published target has been amended to extend the timeline from 2025 to 2030 and revise the wording to clarify meaning.
2 The value chain target covers our most significant Scope 3 emissions – from our supply chain, use of our filling machines and recycling or disposal of packs.
3
BRCGS was formerly known as the British Retail Consortium (BRC). Additional 2025 target to achieve certification to BRCGS Packaging Issue 7 discontinued at this point as it
is unclear if Issue 7 will be released before 2025.
4 Target changed from ‘Launch a pack made of 100% renewable materials’.
5 Target date extended from 2021 to 2022 due to delays in starting field testing.
6 A-materials are those that go directly into our packs – paperboard, polymers, aluminium foil and ink.
7
Due to fluctuations in commodity market prices, this indicator is now reported by volume of materials rather than spend to provide a more meaningful indication of
progress towards our 100% target.
8 Via an independently certified mass balance system.
9 Target expanded from zero lost-time cases to zero recordable cases, which includes medical treatment and restricted work cases as well as lost-time cases.
10 Safety data includes our paper mill in New Zealand for the first part of the year until it was sold in June 2021.
11 Based on latest published lost-time cases for companies listed in our industry in the Dow Jones Sustainability Index.
Annual Report 2021 Corporate Responsibility Report
About our reporting
344
ABOUT OUR
REPORTING
345 United Nations Global Compact
Communication on Progress 2021
349 Global Reporting Initiative index
359 Greenhouse gas emissions basis
for reporting
362 Assurance statement
Annual Report 2021 Corporate Responsibility Report
About our reporting
United Nations Global Compact: Communication on Progress 2021
345
UNITED NATIONS GLOBAL
COMPACT: COMMUNICATION
ON PROGRESS 2021
We support the United Nations Global Compact’s 10 principles on human rights, labour,
environmental protection and anti-corruption.
This report is our annual Communication on Progress for 2021. The table below sets out our
approach to upholding each of the principles, highlighting specific progress and outcomes
in 2021 where applicable. For more information on our contribution to the United Nations
Sustainable Development Goals, see > page 255.
Global Compact principle
Our approach
We are committed to respecting human rights in our business
and our supply chain through our Code of Conduct and our
Business Ethics Code for suppliers. SEDEX Members Ethical
Trade Audits (SMETA) of our production plants every two years
help to ensure that we uphold high standards on human rights.
All our production sites completed SMETA audits this year.
Find out more
• Code of Conduct
• Business Ethics Code for suppliers
• Human Rights, Labour and
Community Engagement Policy
• See > pages 315 and 320.
We respect the right to freedom of association and collective
bargaining, and our Business Ethics Code for suppliers requires
suppliers to uphold these rights too. A significant proportion of
our employees are covered by collective labour agreements and,
in Europe, many are represented by works councils.
• Human Rights, Labour and
Community Engagement Policy
• Business Ethics Code for suppliers
• See > pages 315 and 320.
We do not tolerate forced, compulsory or child labour and
we require the same commitment from suppliers through our
Business Ethics Code for suppliers.
• Code of Conduct
• Business Ethics Code for suppliers
• Human Rights, Labour and
Community Engagement Policy
Principle 1:
Businesses should support
and respect the protection
of internationally proclaimed
human rights
Principle 2:
Businesses should make sure
that they are not complicit in
human rights abuses
Principle 3:
Businesses should uphold
the freedom of association
and the effective recognition
of the right to collective
bargaining
Principle 4:
Businesses should
uphold the elimination
of all forms of forced and
compulsory labour
Principle 5:
Businesses should uphold
the effective abolition of
child labour
Annual Report 2021 Corporate Responsibility Report
About our reporting
United Nations Global Compact: Communication on Progress 2021
346
Global Compact principle
Our approach
Principle 6:
Businesses should
uphold the elimination
of discrimination in
respect of employment
and occupation
Principle 7:
Businesses should support
a precautionary approach to
environmental challenges
We do not tolerate discrimination against employees or
suppliers’ workers based on race, religion, national origin,
political affiliation, gender, sexual orientation, disability, age
or any other relevant category.
In 2021, we continued to roll out mandatory training on
unconscious bias and inclusion to leaders across the business,
our employee-led Diversity, Equity & Inclusion Focus Group ran
awareness campaigns on gender and cultural diversity, and
we updated our Recruitment Directive to include targets to
eliminate all-male shortlists and all-male selection panels from
our recruitment processes.
We comply with applicable environmental legislation across
our operations and we require our suppliers to do the same.
We take a precautionary approach to environmental challenges
such as climate change by proactively identifying and managing
emerging risks. This applies across our value chain and specific
policies also address environmental risks associated with the
sourcing of our three key raw materials: liquid packaging board,
polymers and aluminium.
Find out more
• Code of Conduct
• Business Ethics Code for suppliers
• Human Rights, Labour and
Community Engagement Policy
• See > pages 313 and 316.
• Code of Conduct
• Business Ethics Code for suppliers
• Liquid Packaging Board
Purchasing Policy
• Environment, Health and
Safety Policy
• Product Stewardship Policy
• Responsible Sourcing Policy
• See > pages 275 and 328.
Annual Report 2021 Corporate Responsibility Report
About our reporting
United Nations Global Compact: Communication on Progress 2021
347
Find out more
• Code of Conduct
• Business Ethics Code for suppliers
• Environment, Health and
Safety Policy
• Product Stewardship Policy
• Responsible Sourcing Policy
• sciencebasedtargets.org/
companies-taking-action/
• See > pages 264, 268, 282, 290
and 328.
Global Compact principle
Our approach
Principle 8:
Businesses should undertake
initiatives to promote greater
environmental responsibility
Environmental responsibility is an integral part of our business
strategy. We aim to minimise our environmental footprint
and deliver a net positive impact by contributing more to the
environment than we take out across our value chain, and we
have set stretching targets to drive action in four key areas:
Forest+, Climate+, Resource+ and Food+.
Ahead of the COP26 climate conference in Glasgow this year, we
joined other leading businesses in supporting a call to action led
by We Mean Business urging G20 leaders to go all in to keep the
Paris Agreement’s 1.5°C goal within reach.
Our carbon reduction targets have been approved by the
Science-Based Targets initiative (SBTi) as in line with the
latest science to keep global warming below 1.5°C – and we
pledged our support for the SBTi’s Business Ambition for
1.5°C this year.
In 2021, we cut our operational (Scope 1 and 2) greenhouse
gas emissions by a further 45%, largely as a result of our newly
acquired operations in the Middle East and Africa (formerly
a joint venture) switching to 100% renewable energy, in line
with the rest of our global production which has been carbon
neutral since 2018. We have also reduced our Scope 1, 2 and 31
emissions per litre of food packed by 20% from the 2016
baseline.
We demand high standards of environmental responsibility
from our suppliers. Our Business Ethics Code for suppliers
requires them to run their business in a way that protects
and preserves the environment. We are also helping to drive
environmental improvements in the supply chain of our key
raw materials through certifications such as FSC™, ASI and
ISCC PLUS.
Sustainability is a core driver for innovation in our packaging
systems, and we share data on the environmental impact
profiles of our packaging, including publicly available
independent life-cycle assessments following ISO 14040 for
our product innovations and for the market segments we
are serving. We also support customers in enabling consumers
to make a more responsible choice by offering a range of
substantiated environmental claims, for example in relation
to carbon footprint reductions or responsible sourcing
certifications such as ASI and FSC™, which we encourage
customers to include on their packs.
We are founding members of industry recycling partnerships,
such as the Global Recycling Alliance for Beverage Cartons and
the Environment, EX:TRACT and 4evergreen. We also partner
with NGOs, customers and industry on local and regional
projects to support collection and recycling of used beverage
cartons. Examples in 2021 include the expansion of successful
collection programmes in Brazil, new recycling facilities in
Germany and Australia, and consumer awareness and collection
programmes in China, Indonesia, Thailand and the UK. In
Europe, we have also committed to the 10 industry targets set
by the Alliance for Beverage Cartons and the Environment’s new
roadmap for 2030.
Our sustainable innovation also supports greater environmental
responsibility (see principle 9 on next page).
Annual Report 2021 Corporate Responsibility Report
About our reporting
United Nations Global Compact: Communication on Progress 2021
348
Global Compact principle
Our approach
Principle 9:
Businesses should encourage
the development and
diffusion of environmentally
friendly technologies
Principle 10:
Businesses should work
against corruption in all its
forms, including extortion
and bribery
Our corporate purpose sets out our commitment to partner
with customers to deliver food and beverages to consumers
across the world in a sustainable way. We aim to offer the most
sustainable food packaging solutions on the market.
In 2021, customer uptake has continued to grow for our most
sustainable innovations – such as our combibloc ECOPLUS,
SIGNATURE 100 and SIGNATURE FULL BARRIER packaging
materials, and our paper straw solutions. We offer the
only aseptic carton packaging material (SIGNATURE FULL
BARRIER) with all three main materials from certified sources –
FSC™ paperboard, ISCC PLUS forest-based polymers and
ASI aluminium foil – and we have increased our supply of
ASI-certified aluminium.
Our filling machines have the lowest waste rate in the industry
and our next generation filling machine is designed to reduce
energy and water use for the filling and packaging process
compared with our third generation filling machines. We have
continued to develop and roll out technical service upgrade kits
that help customers reduce energy and water use for filling in
their factories. Our tech centres in Germany and China support
optimisation of food packaging systems.
We are leading by example with our on-site solar installations
and we are engaging with suppliers and customers to encourage
them to invest in their own on-site solar installations to promote
further uptake of renewable energy.
We have zero tolerance for bribery or corruption in any form.
Our anti-corruption policy is included in our Code of Conduct
and reinforced through regular training.
We encourage people to report any concerns about bribery,
corruption or any other ethical issues via our Ethics &
Compliance Hotline. We investigate any suspected breaches
and take disciplinary action if appropriate.
Find out more
• Product Stewardship Policy
• See > page 296.
• Code of Conduct
• Corporate Governance Policy
• See > page 334.
1
The value chain emissions rate and associated target covers our most significant Scope 3 emissions – from our supply chain, use of our filling machines and recycling or
disposal of packs.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
349
GLOBAL REPORTING
INITIATIVE INDEX
This report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards:
Core option. The index below shows which indicators are material to SIG, which are reported
and where to find more information.
SIG material topic
Thriving forests
Tackling climate change
Recycling and
circular economy
Safe food supply
Sustainable packaging
innovation
GRI
Number
Disclosure
Where to find it in the report
103-1
103-2
103-3
103-1
103-2
103-3
103-1
103-2
103-3
103-1
103-2
103-3
103-1
103-2
103-3
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
The management approach and its components
See > Forest+, page 264.
Evaluation of the management approach
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
The management approach and its components
See > Climate+ on page 268.
Evaluation of the management approach
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
The management approach and its components
See > Resource+, page 282.
Evaluation of the management approach
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
The management approach and its components
See > Food+, page 290.
Evaluation of the management approach
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
The management approach and its components
See > Sustainable innovation, page 296.
Evaluation of the management approach
Sustainable raw materials
103-1
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
Responsible suppliers
Diversity, equity and
inclusion
Talent development
Employee satisfaction
Fair labour practices
103-2
103-3
103-1
103-2
103-3
The management approach and its components
See > Our supply chain, page 304.
Evaluation of the management approach
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
The management approach and its components
See > Our people, page 311.
Evaluation of the management approach
Health, safety and wellbeing 103-1
Explanation of the material topic and its Boundary
See > Our priorities, page 259.
103-2
103-3
The management approach and its components
Evaluation of the management approach
See > Health, safety and wellbeing,
page 322.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
350
Topic
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Reason
for
omission More information
General Disclosures 102
Organisa tional
profile
102-1
Name of the
organisation
102-2
Activities, brands,
products, and
services
102-3
102-4
102-5
102-6
102-7
102-8
Location of
headquarters
Location of
operations
Ownership and
legal form
Markets served
Scale of the
organisation
Information on
employees and
other workers
102-9
Supply chain
102-10
Significant
changes to the
organisation and
its supply chain
102-11
Precautionary
Principle or
approach
102-12
External initiatives
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
SIG Combibloc Group AG and its affiliates
(together “SIG”)
SIG’s primary brand as an integrated
packaging systems supplier is the
SIG brand. Our primary products and
services are food and beverage carton
packages and closures, filling machines
and secondary packaging machines
(downstream), and technical services
including spare parts. We combine and
apply our various products and services
into integrated customer solutions.
See > pages 32–33.
Neuhausen, Switzerland. See > page 102.
See > AR 2021.
The parent company of the SIG Group is
SIG Combibloc Group AG, with domicile in
Neuhausen, Switzerland. SIG is listed on
the SIX Swiss Exchange. See > page 79.
See > pages 73 and 51–59.
See > pages 72–73 and 320.
See > page 320 for a detailed breakdown
of our workforce by gender, age and
contract type.
See > page 304.
In 2021, we took full ownership of our
Middle East and Africa joint venture
SIG Combibloc Obeikan and it is included
in the scope of our CR reporting for
the first time this year. We also began
operating our newly-built second
production site in China, sold our paper
mill in New Zealand and closed our
production plant in Australia.
See United Nations Global Compact
Communication on Progress, > page 346.
We support the United Nations Global
Compact (see > page 345) and the United
Nations Sustainable Development Goals
(see > page 255). SIG is a member of the
Supplier Ethical Data Exchange (SEDEX),
is rated Platinum by EcoVadis, and is
certified to recognised standards such
as ISO 9001 and ISO 14001. Our science-
based climate targets are approved by the
Science Based Targets initiative (SBTi). We
also participate in certification initiatives
run by the Forest Stewardship Council™
(FSC), the Aluminium Stewardship
Initiative (ASI) and the International
Sustainability & Carbon Certification (ISCC)
PLUS. We support the HolyGrail 2.0, an
initiative launched by AIM (the European
Brands Association), as well as various
initiatives that aim to increase recycling
and collection of used beverage cartons
through our membership of associations
(see next page).
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
351
Topic
Number Disclosure
Organisa tional
profile
102-13 Membership of
associations
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Y
Y
Strategy
102-14
102-15
Statement
from senior
decision-maker
Key impacts,
risks, and
opportunities
Ethics and
integrity
102-16
Values, principles,
standards,
and norms of
behaviour
102-17 Mechanisms
Governance
102-18
for advice and
concerns about
ethics
Governance
structure
Stakeholder
engagement
102-19 to
102-39
102-40
102-41
102-42
List of stakeholder
groups
Collective
bargaining
agreements
Identifying
and selecting
stakeholders
102-43
Approach to
stakeholder
engagement
102-44
Key topics and
concerns raised
Y
N
Y
N
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
Reason
for
omission More information
SIG is a member of various industry
associations and alliances. Key
organisations include: AIM-PROGRESS;
Alliance for Beverage Cartons and
the Environment (ACE); Aluminium
Stewardship Initiative (ASI); the Coalition
of Action on Plastic Waste (coalition
of leading companies from within The
Consumer Goods Forum); The Consumer
Goods Forum; European Bioplastics
Association; European Organisation
for Packaging and the Environment
(EUROPEN); EXTR:ACT; Forum for the
Future; Forest Stewardship Council™
(FSC) International; 4evergreen; Global
Recycling Alliance for Beverage Cartons
and the Environment (GRACE).
In addition, SIG is a member of numerous
national alliances and initiatives in our
core markets.
See > page 29.
Not
required
for core
CR topics are integral to several of the
main business risks identified in our
latest corporate risk assessment (see
> page 246). See > page 71 for more on
our corporate risk management.
Our most significant impacts are listed
in ‘Our priorities’ on > page 259. The
‘Why is this material’ sections on each
material issue also cover impacts risks
and opportunities.
See > page 245 and > page 334.
See > page 335.
See > page 247.
Not
required
for core
See > page 257.
See > page 315 and > page 320.
We identified relevant stakeholders
and considered the topics that are
most important to them through
our materiality process. The list of
stakeholders we engage most with is
included on > page 257.
See > page 257.
See > page 257.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
352
Topic
Number Disclosure
Reporting
practice
102-45
Reporting
practice
102-46
102-47
102-48
Entities included
in the
consolidated
financial
statements
Defining report
content and topic
Boundaries
List of
material topics
Restatements of
information
102-49
Changes in
reporting
102-50
Reporting period
102-51
Date of most
recent report
102-52
Reporting cycle
102-53
Contact point
for questions
regarding
the report
102-54
Claims of reporting
in accordance with
the GRI Standards
102-55
GRI content index
102-56
External assurance
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Reason
for
omission More information
See > page 190.
See > page 261.
See > pages 260–262.
Previous years’ data has been restated in
relation to several indicators in line with
protocols and standards, reporting scope
(due to changes in the business) and
indicators.
See footnotes to KPI performance
summary on > page 339.
We have included our corporate
responsibility (CR) reporting in our
Annual Report to reflect the increasing
importance put on environmental, social
and governance (ESG) topics by investors.
In this CR Report, we continue to provide
detailed information in accordance with
the GRI Standards: Core option.
Scope of our CR reporting: Unless
otherwise stated, data in this CR Report
covers the 2021 calendar year and all our
fully-owned global operations – including
our newly opened second production site
in China and our former joint ventures
in the Middle East and Africa for the first
time. Data includes our production plant
in Melbourne (Australia) and performance
relevant to its production volumes which
moved to other plants after it ceased
production of aseptic cartons in mid 2021.
It excludes our paper mill in New Zealand,
which was sold in June 2021, and our joint
venture in Japan.
See > page 242.
Our last full report in accordance with the
GRI Standards: Core Option was for the
calendar year 2020.
We publish a full GRI report every year
(beginning in 2020). Prior to that, we have
published a full GRI report every two
years from 2016 to 2020, with shorter
performance updates in the interim years.
See > page 242.
We report in accordance with the GRI
Standards: Core Option. See > page 349.
See this GRI content index.
Data points related to our key
performance indicators (listed on
> page 338) have been externally
assured with limited assurance by
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft.
See Assurance statement on > page 362.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
353
Topic
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Reason
for
omission More information
Economic
performance
201-1
201-2
201: Economic Performance
NM
NM
Direct economic
value generated
and distributed
Financial
implications and
other risks and
opportunities due
to climate change
201-3 to
204
Anti-corruption 205-1
205-2
205-3
206-1
Anti-
competitive
Behaviour
Operations
assessed for
risks related to
corruption
Communication
and training about
anti-corruption
policies and
procedures
Confirmed
incidents of
corruption and
actions taken
Legal actions for
anti-competitive
behaviour,
anti-trust, and
monopoly
practices
Tax
207
Approach to tax
207-2
207-3
Tax governance,
control and risk
management
Stakeholder
engagement and
management of
concerns related
to tax
NM
NM
NM
NM
NM
NM
NM
NM
207-4
Country-by-country
reporting
NM
Our most material CR risks – including
climate-related risks – are integrated into
our annual corporate risk management
process which assesses risks based on
potential financial implications for the
business. We have identified risks and
opportunities for our business due to
climate change that could substantively
impact our operations and have a
strategic or financial implication. These
include physical and transition risks such
as the impact of changing consumer
demands for packaging, more extreme
weather patterns affecting forest
resources, and the availability and price
of raw materials such as energy and
water. Opportunities include consumer
and customer demand for non-fossil raw
materials and reduced exposure to fossil
fuel price increases from reduced energy
demands. We disclose climate-related
risks and opportunities through the CDP
each year. See > page 275.
See > pages 335–336.
No significant risks of corruption and
no cases of corruption were identified
in 2021.
No legal actions for anti-competitive
behaviour, anti-trust or monopoly
practices in 2021.
N
N
N
N
N
N
N
N
N
N
N
N
P
N
N
P
Y
Y
N
N
N
N
Not
material
Not
material
Not
material
Not
material
Not
material
Not
material
Not
material
Not
material
Not
material
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
354
Topic
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Reason
for
omission More information
301: Environmental performance
Materials
301-1
Materials used by
weight or volume
301-2
Recycled input
materials used
301-3
Energy
302-1
302-2
302-3
302-4
302-5
303-1
303-2
Water and
effluents
Reclaimed
products and
their packaging
materials
Energy
consumption
within the
organisation
Energy
consumption
outside of the
organisation
Energy intensity
Reduction
of energy
consumption
Reductions
in energy
requirements
of products and
services
Interactions with
water as a shared
resource
Management of
water discharge-
related impacts
303-3
Water withdrawal
303-4
Water discharge
303-5
Water
consumption
Biodiversity
304
Emissions
305-1
305-2
305-3
305-4
305-5
305-6
Direct (Scope 1)
GHG emissions
Energy indirect
(Scope 2)
GHG emissions
Other indirect
(Scope 3)
GHG emissions
GHG emissions
intensity
Reduction of
GHG emissions
Emissions of
ozone-depleting
substances (ODS)
M
M
NM
M
NM
M
M
M
NM
NM
NM
NM
NM
NM
M
M
M
M
M
NM
Y
N
N
Y
N
Y
Y
N
N
N
N
N
N
N
Y
Y
Y
Y
Y
N
Y
N
N
Y
N
Y
Y
P
N
N
N
N
Y
N
Y
Y
Y
Y
Y
N
See > page 310.
See > page 281.
Not
required
for core
Not
material
Not
material
See > page 281.
See > pages 277, 281 and 338.
See > page 302.
Not
required
for core
Not
material
Not
material
Not
material
Not
material
Not
material
Not
material
See > page 330.
Our own operations do not have a
significant impact on biodiversity, and
we minimise any potential impacts
through our environmental management
systems (see > page 329). The main
biodiversity impact of our business is
in the forests we source raw materials
from and we manage this by setting
strict standards for suppliers through
FSC™ certification (see > page 264).
See > page 279.
See > page 279.
See > pages 279 and 361.
See > page 280.
See > pages 276–277 and 338.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
355
Topic
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Reason
for
omission More information
Emissions
305-7
Waste
306-1
306-2
306-3
306-4
306-5
Environmental
Compliance
307-1
Supplier
Environmental
Assessment
308-1
308-2
Employment
401-1
401-2
NM
NM
NM
NM
NM
NM
M
M
M
Nitrogen oxides
(NOX), sulfur
oxides (SOX), and
other significant
air emissions
Waste generation
and significant
waste-related
impacts
Management of
significant waste-
related impacts
Waste generated
Waste diverted
from disposal
Waste directed to
disposal
Non-compliance
with environmental
laws and
regulations
New suppliers
that were
screened using
environmental
criteria
Negative
environmental
impacts in the
supply chain and
actions taken
400: Social Performance
New employee
hires and
employee turnover
Benefits provided
to full-time
employees that are
not provided to
temporary or part-
time employees
401-3
Parental leave
Labour/
Management
Relations
402-1
Occupational
Health and
Safety
403-1
403-2
403-3
403-4
Minimum notice
periods regarding
operational
changes
Occupational
health and safety
management
system
Hazard
identification,
risk assessment,
and incident
investigation
Occupational
health services
Worker
participation,
consultation, and
communication
on occupational
health and safety
M
M
M
M
M
M
M
M
N
N
N
N
N
N
Y
Y
N
Y
N
N
N
Y
Y
Y
Y
N
Not
material
Y
Y
Y
Y
Y
Y
Y
N
Y
N
N
N
Y
Y
Y
Y
See > pages 282 and 331.
See > pages 282 and 329.
See > page 331.
See > pages 282 and 330–331.
See > pages 331–332.
No significant fines or non-monetary
sanctions for non-compliance with
environmental laws and regulations
in 2021.
See > page 305.
Not
required
for core
Not
required
for core
Not
required
for core
Not
required
for core
See > page 321.
See > pages 323–324.
See > page 323.
See > pages 324–325.
See > page 324.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
356
Topic
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Occupational
Health and
Safety
403-5
403-6
403-7
403-8
Worker training
on occupational
health and safety
Promotion of
worker health
Prevention and
mitigation of
occupational
health and safety
impacts directly
linked by business
relationships
Workers covered
by an occupational
health and
safety system
403-9
Work-related
injuries
403-10 Work-related
health
Training and
Education
404-1
404-2
404-3
405-1
405-2
Diversity
and Equal
Opportunity
Non-
discrimination
406-1
407-1
Freedom of
Association
and Collective
Bargaining
Child Labour
408-1
Forced or
Compulsory
Labour
409-1
Average hours of
training per year
per employee
Programmes
for upgrading
employee skills
and transition
assistance
programmes
Percentage
of employees
receiving regular
performance
and career
development
reviews
Diversity of
governance bodies
and employees
Ratio of basic
salary and
remuneration of
women to men
Incidents of
discrimination and
corrective actions
taken
Operations and
suppliers in
which the right
to freedom
of association
and collective
bargaining may
be at risk
Operations and
suppliers at
significant risk
for incidents of
child labour
Operations and
suppliers at
significant risk for
incidents of forced
or compulsory
labour
M
M
M
M
M
M
M
M
Y
Y
Y
N
Y
N
Y
N
Y
Y
Y
N
Y
N
Y
N
M
N
P
M
M
M
M
M
M
Y
N
N
N
N
N
Y
N
Y
N
N
N
Reason
for
omission More information
See > pages 324–326.
See > pages 324–327.
See > page 323.
See > pages 325 and 327.
See > page 317.
See > page 317.
See > pages 315–316 and 320–321.
No reported incidents of discrimination
in 2021.
Not
required
for core
Not
required
for core
Not
required
for core
Not
required
for core
Not
required
for core
Not
required
for core
Not
required
for core
Not
required
for core
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
357
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Reason
for
omission More information
Topic
Security
Practices
Rights of
Indigenous
Peoples
410-1
411-1
Human Rights
Assessment
412-1
412-2
412-3
Local
Communities
413-1
413-2
Supplier Social
Assessment
414-1
414-2
Public Policy
415-1
Customer
Health and
Safety
416-1
416-2
NM
NM
M
M
NM
N
N
N
N
N
N
Y
Y
P
N
Not
material
Not
required
for core
Not
required
for core
NM
N
N
Not
material
NM
N
M
M
NM
M
M
Y
N
N
Y
N
Not
material
Not
required
for core
Not
material
N
Y
N
N
Y
Y
Security personnel
trained in human
rights policies or
procedures
Incidents of
violations
involving rights
of indigenous
peoples
Operations that
have been subject
to human rights
reviews or impact
assessments
Employee training
on human
rights policies or
procedures
Significant
investment
agreements and
contracts that
include human
rights clauses or
that underwent
human rights
screening
Operations with
local community
engagement,
impact
assessments,
and development
programmes
Operations
with significant
actual and
potential negative
impacts on local
communities
New suppliers
that were
screened using
social criteria
Negative social
impacts in the
supply chain and
actions taken
Political
contributions
Assessment of
the health and
safety impacts
of product and
service categories
Incidents of
non-compliance
concerning
the health and
safety impacts
of products and
services
No reports of incidents of violations
involving rights of indigenous people
in 2021.
Human rights criteria are included in
SMETA audits of our production sites.
See > pages 315 and 320.
The SIG Code of Conduct, and
accompanying compliance training,
addresses various aspects of human rights
that are relevant to SIG's operations.
See > pages 335–336.
See > page 305.
See > pages 292 and 339.
See > pages 295 and 339.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Global Reporting Initiative index
358
Topic
Number Disclosure
Material
(Y/N)
Required
for core
Reported
(Yes/No/
Partial)
Reason
for
omission More information
Marketing and
Labelling
417-1
417-2
417-3
Customer
Privacy
418-1
Socioeconomic
Compliance
419-1
Requirements
for product
and service
information and
labelling
Incidents of
non-compliance
concerning
product
and service
information and
labelling
Incidents of
non-compliance
concerning
marketing
communications
Substantiated
complaints
concerning
breaches of
customer privacy
and losses of
customer data
Non-compliance
with laws and
regulations in
the social and
economic area
NM
NM
NM
NM
N
N
N
N
N
N
N
N
Not
material
Not
material
Not
material
Not
material
NM
N
Y
No significant fines or non-monetary
sanctions for non-compliance with laws
and regulations in 2021.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Greenhouse gas emissions basis for reporting
359
GREENHOUSE GAS EMISSIONS
BASIS FOR REPORTING
Our greenhouse gas (GHG) emissions reporting is closely linked to our management approach
and progress which is documented in the Climate+ section (see > page 268).
This section provides a detailed description of GHG reporting boundaries and other relevant
aspects including a breakdown of emissions by reporting category.
Accurate and transparent GHG reporting is also an essential prerequisite to meet the criteria of
the Science Based Targets initiative. Our GHG emissions are reported in accordance with the GHG
protocol.
Reporting boundaries
The reporting boundary for our Scope 1, 2 and 3 GHG emissions covers all production facilities
under SIG’s operational control, excluding smaller production units such as our special filling
machine parts plant in Aachen (Germany), joint ventures and offices (unless they are directly
attached to a production facility).
In line with the GHG Protocol, we have restated our GHG emissions data for previous years
based on significant changes to the business this year:
• Our paper mill in New Zealand was sold in June 2021. As it produced liquid packaging board
for use in our packs, the emissions related to the mill that were previously reported under
Scope 1 and 2, and corresponding Scope 3 categories, have been merged and are now
reported under Scope 3 in category 1 (purchased goods and services).
• We took full ownership of our former joint venture in the Middle East and Africa, and we have
integrated data related to production in this region into our reporting on Scope 1 and 2 and
all categories of Scope 3.
Scope 2 emissions from purchased electricity are reported using a market-based approach.
We also report Scope 2 emissions according to the location-based approach using grid average
emission factors for each country (see > page 279). Throughout this report, the data relating to
emissions from energy use are accurate to within a tolerance of 0.5 thousand tonnes.
SCOPE 1 AND 2 EMISSIONS (tonnes CO2 equivalent)
Scope 1
Scope 2 (market based)
2016
29.1
84.0
2017
38.5
28.6
2018
34.4
32.5
2019
34.5
27.9
2020
31.1
22.9
2021
29.8
0
Our data collection and calculation procedures for Scope 3 are informed by a materiality
assessment of our GHG emissions and we have refined these to meet the requirements of the
GHG Protocol.
To help us further improve the accuracy of our reporting, we have a policy for recalculating our
GHG emissions. This is designed to distinguish changes that reflect actual reductions in the
totals from changes that are simply data improvements.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Greenhouse gas emissions basis for reporting
360
The inventory boundaries of SIG’s GHG accounting were chosen considering all the relevant GHG
Protocol standards. SIG’s GHG accounting includes all six GHGs covered by the Kyoto Protocol
as required by the GHG Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen
trifluoride (NF3). These are typically included in the emission factors we use and converted using
IPCC 2013 conversion factors.
For emissions related to recycling, we use the A 0:100 allocation as recommended by the GHG
Protocol, which means that recycled materials such as production waste (category 5) or used
products (category 12) are cut off at the sorting plant/next processing step. The same applies to
waste that is incinerated for energy recovery. Biogenic carbon emissions can be released from
the liquid packaging board in our cartons, depending on their treatment after use, and these
are reported separately.
The following categories are included in SIG’s Scope 3 emissions:
Category 1: Purchased goods and services
Category 1 emissions account for the largest share of SIG’s value chain GHG emissions. This
category includes all materials used to produce and ship our cartons (including closures and
straws), the materials used to produce the liquid packaging board that goes into our packs, and
the materials used to manufacture our filling machines. Services, ICT and items such as office
equipment are excluded as they represent a very small share in this category.
We aim to increase the share of specific emissions factors from suppliers. In 2021, 68% of our
reported Category 1 Scope 3 emissions are based on specific data (up from 54% in 2020).
Category 3: Fuel and energy-related activities
Category 3 covers the upstream emissions related to purchased electricity and energy carriers at
the production facilities that are reported under Scope 1 and 2. Purchased electricity is reported
under Scope 2. All other energy carriers, including small amounts of diesel purchased to fuel our
own trucks and cars, are reported under Scope 1.
Category 4: Upstream transportation and distribution
Category 4 covers all transportation activities for materials delivered to the production plants and
all purchased outbound transport. Intercompany transportation is considered to be negligible. SIG
packs are shipped as empty sleeves to SIG customers. This is usually managed by SIG’s Supply Chain
Management (SCM). In some cases, SIG customers arrange transport themselves and the resulting
emissions are reported in Category 9. Deliveries other than packed sleeves (straws, closures,
machines and spare parts) do not contribute significantly to this category and are not reported.
Category 5: Waste generated in operations
Category 5 includes emissions related to recycling, thermal treatment or landfill of waste from
our operations (measured as non-product output) and hazardous waste. All production wastes
(>99%) undergo further treatment and recycling as they are well sorted. Emissions related to
the transportation of waste material from our plants to waste processing facilities are included.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Greenhouse gas emissions basis for reporting
361
Category 6: Business travel
Category 6 includes flights, public transport and the use of rental cars for business travel. Data
on business travel is well documented in Europe but less so in other regions. Therefore, the
number of employees per region is used as a basis for extrapolation. Flights are relatively well
documented and account for around 98% of emissions from business travel.
Category 9: Downstream transportation and distribution
Category 9 covers transportation of SIG carton packs from our plants to customers’ facilities that
is not purchased by SIG, the distribution of filled packs from customers’ facilities to retailers, and
onward transportation from retailers to end consumers. Distribution of filled packs includes only the
emissions related to SIG products. Pallets, trays or foil are therefore omitted due to their small share.
Category 11: Use of sold products
Category 11 covers the use of SIG’s filling machines and applicators to mount closures to the
filled cartons, which occur in customers’ facilities. All new and refurbished filling machines that
are manufactured and sold by SIG for the reporting year are characterised by average electricity
demand and the need for pressurised air, steam and hydrogen peroxide for the estimated
lifetime capacity of the machine/device using the emission factors of the reporting year.
Filling machines that are installed in SIG service centres for demonstration purposes are not
included. Machines sold to customers with a publicly available RE100 or Science Based Target
initiative 1.5° pledge are subtracted from the inventory for the difference of the lifetime and the
customer’s target year for achieving 100% renewable electricity. Emissions from the use phase
of our cartons relate primarily to the food products inside the cartons and are excluded.
Category 12: End-of-life treatment of sold products
Used beverage cartons usually end up in household waste streams or recycling schemes, which
both vary locally. For each country that SIG cartons are shipped to, we compile data covering
recycling rates, landfill rates (managed or unmanaged) and incineration rates (with or without
energy recovery). The amount of waste is allocated to different forms of treatment based on the
weight of delivered packages and spouts per country and the rates for the respective country.
Biogenic greenhouse gas emissions related to the different end-of-life treatments for the liquid
packaging board in our cartons are determined and reported separately.
SIG filling machines are generally in use for decades and used filling machines are mainly
refurbished or recycled so their contribution to this category is considered to be negligible.
SCOPE 3 EMISSIONS (TONNES CO2 EQUIVALENT) BY CATEGORY
Category
2016
2017
2018
2019
2020
2021
1 Purchased goods and services
999,235
906,199
961,809
995,727
1,001,506
1,039,813
3 Fuel and energy related activities
4 Upstream transportation and distribution
5 Waste generated in operations
6 Business travel
9 Downstream transportation and distribution
11 Use of sold products
12 End-of-life treatment of sold products
12 Biogenic carbon
26,380
98,343
545
10,698
57,774
131,395
220,445
138,463
8,149
93,792
570
10,884
57,260
161,853
224,509
139,515
7,537
7,531
11,970
7,444
95,628
103,502
126,297
120,945
564
17,175
54,675
165,082
230,647
146,076
581
18,457
59,289
144,981
248,657
158,663
584
7,678
50,782
127,033
210,209
137,813
672
7,037
52,426
137,365
221,488
145,361
Annual Report 2021 Corporate Responsibility Report
About our reporting
Assurance statement
362
ASSURANCE STATEMENT
Independent Practitioner’s Report on a Limited
Assurance Engagement on Sustainability Information.
To SIG Combibloc Group AG, Neuhausen am Rheinfall, Switzerland
”
We have performed a limited assurance engagement on the disclosures denoted with “
in the Corporate Responsibility Report of SIG Combibloc Group AG, Neuhausen am Rheinfall,
Switzerland (hereinafter “the Company”), for the period from 1 January to 31 December 2021
(hereinafter the “Report”). Our engagement in this context relates solely to the disclosures
denoted with the symbol “
”.
Responsibilities of the Executive Directors
The executive directors of the Company are responsible for the preparation of the Report in
accordance with the principles stated in the Sustainability Reporting Standards of the Global
Reporting Initiative (hereinafter the “GRI-Criteria”) and for the selection of the disclosures to be
evaluated.
This responsibility of Company’s executive directors includes the selection and application of
appropriate methods of sustainability reporting as well as making assumptions and estimates
related to individual sustainability disclosures, which are reasonable in the circumstances.
Furthermore, the executive directors are responsible for such internal controls as they
have considered necessary to enable the preparation of a Report that is free from material
misstatement whether due to fraud or error.
Independence and Quality Control of the Audit Firm
We have complied with the German professional provisions regarding independence as well as
other ethical requirements.
Our audit firm applies the national legal requirements and professional standards – in particular
the Professional Code for German Public Auditors and German Chartered Auditors (“Berufssatzung
für Wirtschaftsprüfer und vereidigte Buchprüfer”: “BS WP/vBP”) as well as the Standard on Quality
Control 1 published by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany;
IDW): Requirements to quality control for audit firms (IDW Qualitätssicherungsstandard 1:
Anforderungen an die Qualitätssicherung in der Wirtschaftsprüferpraxis – IDW QS 1) – and
accordingly maintains a comprehensive system of quality control including documented policies
and procedures regarding compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Practitioner’s Responsibility
Our responsibility is to express a limited assurance conclusion on the disclosures denoted with
“
” in the Report based on the assurance engagement we have performed.
Within the scope of our engagement we did not perform an audit on external sources of
information or expert opinions, referred to in the Report.
Annual Report 2021 Corporate Responsibility Report
About our reporting
Assurance statement
363
We conducted our assurance engagement in accordance with the International Standard on
Assurance Engagements (ISAE) 3000 (Revised): Assurance Engagements other than Audits or
Reviews of Historical Financial Information, issued by the IAASB. This Standard requires that we
plan and perform the assurance engagement to allow us to conclude with limited assurance
that nothing has come to our attention that causes us to believe that the disclosures denoted
with “
” in the Company’s Report for the period from 1 January to 31 December 2021 have
not been prepared, in all material aspects, in accordance with the relevant GRI-Criteria. This
does not mean that a separate conclusion is expressed on each disclosure so denoted.
In a limited assurance engagement the assurance procedures are less in extent than for a
reasonable assurance engagement and therefore a substantially lower level of assurance is
obtained. The assurance procedures selected depend on the practitioner’s judgment.
Within the scope of our assurance engagement, we performed amongst others the following
assurance procedures and further activities:
• Obtaining an understanding of the structure of the sustainability organisation and of the
•
•
stakeholder engagement
Inquiries of personnel involved in the preparation of the Report regarding the preparation
process, the internal control system relating to this process and selected disclosures in the Report
Identification of the likely risks of material misstatement of the Report under consideration
of the GRI-Criteria
• Analytical evaluation of selected disclosures in the Report
• Performance of web conferences as part of the inspection of processes and guidelines for data
collection at the following locations: Linnich (Germany), Wittenberg (Germany), Suzhou (China)
• Comparison of selected disclosures with corresponding data in the consolidated financial
statements and in the group management report
• Evaluation of the presentation of the selected disclosures regarding sustainability performance
Assurance Conclusion
Based on the assurance procedures performed and assurance evidence obtained, nothing has
come to our attention that causes us to believe that the disclosures denoted with “
” in the
Company’s Report for the period from 1 January to 31 December 2021 have not been prepared,
in all material aspects, in accordance with the relevant GRI-Criteria.
Intended Use of the Assurance Report
We issue this report on the basis of the engagement agreed with the Company. The assurance
engagement has been performed for purposes of the Company and the report is solely intended
to inform the Company as to the results of the assurance engagement. The report is not
intended to provide third parties with support in making (financial) decisions. Our responsibility
lies solely toward the Company. We do not assume any responsibility towards third parties.
Munich, 24 February 2022
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Hendrik Fink
Wirtschaftsprüfer
(German Public Auditor)
ppa. Juliane v. Clausbruch
Annual Report 2021 DISCLAIMER AND CAUTIONARY STATEMENT
The Annual Report contains certain “forward-looking statements” that are based on our current expectations,
assumptions, estimates and projections about us and our industry. Forward-looking statements include, without
limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and
may contain the words “may”, “will”, “should”, “continue”, “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project”,
“plan”, “will likely continue”, “will likely result”, or words or phrases with similar meaning. Undue reliance should not
be placed on such statements because, by their nature, forward-looking statements involve risks and uncertainties,
including, without limitation, economic, competitive, governmental and technological factors outside of the control of SIG
Combibloc Group AG (“SIG”, the “Company” or the “Group”), that may cause SIG’s business, strategy or actual results to
differ materially from the forward-looking statements (or from past results). For any factors that could cause actual results
to differ materially from the forward-looking statements contained in this Annual Report, please see our offering circular
for the issue of notes in June 2020. SIG undertakes no obligation to publicly update or revise any of these forward-looking
statements, whether to reflect new information, future events or circumstances or otherwise. It should further be noted
that past performance is not a guide to future performance. Persons requiring advice should consult an independent
adviser.
The declaration and payment by the Company of any future dividends and the amounts of any such dividends will depend
upon SIG’s ability to maintain its credit rating, its investments, results, financial condition, future prospects, profits being
available for distribution, consideration of certain covenants under the terms of outstanding indebtedness and any other
factors deemed by the Directors to be relevant at the time, subject always to the requirements of applicable laws.
Definitions of the alternative performance measures used by SIG and their related reconciliations are posted under the
following link: https://www.sig.biz/investors/en/performance/definitions
Some financial information in this Annual Report has been rounded and, as a result, the figures shown as totals may vary
slightly from the exact arithmetic aggregation of the figures that precede them.
Annual Report 2021