Tear Sheet: SIG Group AG

The group acquired Scholle IPN and Evergreen Asia. S&P Global Ratings-adjusted EBITDA margins dipped to 21.9% on lower-margin acquisitions and higher input costs that were only partially passed on to customers. Because SIG partly debt-funded its acquisitions, adjusted debt to EBITDA rose to 4.1x. Full-year contributions from the 2022 acquisitions will account for 74% of revenue growth, while volume and price increases provide the rest. We expect a ramp-up of production in Mexico and that higher input costs will be passed to customers. Adjusted EBITDA margins could near 22% as consolidation of the lower-margin acquisitions is offset by synergies. In 2022, SIG's acquisitions increased its scope, working capital inflows, and capital expenditure. By December 2023, we expect adjusted debt to

...Revenue at SIG Group AG grew by 34.8% in 2022, largely because of acquisitions, combined with favorable foreign currency movements and organic growth of 8%. The group acquired Scholle IPN and Evergreen Asia. S&P Global Ratings-adjusted EBITDA margins dipped to 21.9% on lower-margin acquisitions and higher input costs that were only partially passed on to customers. Because SIG partly debt-funded its acquisitions, adjusted debt to EBITDA rose to 4.1x. For 2023, we anticipate revenue growth of 19%-20% and stable adjusted EBITDA margins. Full- year contributions from the 2022 acquisitions will account for 74% of revenue growth, while volume and price increases provide the rest. We expect a ramp-up of production in Mexico and that higher input costs will be passed to customers. Adjusted EBITDA margins could near 22% as consolidation of the lower-margin acquisitions is offset by synergies. Adjusted free operating cash flow is forecast to improve only slightly to 260 million-265 million in 2023,...

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