Annual Report - SIG Combibloc

22 Group report
EBITA of loss-making
companies
in millions of eur
-17
2001
-62
-75
2002
-23
-62
2003
SIG Hamba Filltec
SIG Blowtec
SIG Kautex
Impairments
and provisions
The business units comprising “Others” are not part of SIG core business. Following the
initiatives of the first half year, the situation at SIG Kautex, SIG Blowtec and SIG Hamba Filltec
clearly stabilized in the second semester 2003. By the second half, all three units were
on course as forecast and reached their targets.
Over the past business year, SIG Kautex continued to suffer from a falloff in investment
and overcapacities in the automotive industry. However, rapid capacity adjustments
brought this business unit close to operational profitability. Full order books will ensure
stable capacity usage in 2004 and should generate a positive ebit.
By contrast, the market for SIG Blowtec continued to slide in the second half of 2003.
In the past three years, it has fallen off by almost two thirds. In addition, SIG Blowtec had
to contend with a number of problems on new machines in the first semester. In the
meantime, the company has made major adjustments to its capacities and reduced the headcount
from 345 to 279. Moreover, management was able to streamline the product range
and rectify the technical problems encountered on new machines. The ongoing measures
should bring the business unit back to profitability in 2004.
SIG Hamba Filltec has been returned to its original core business – filling equipment for
yoghurt – and its organization restructured accordingly. Despite the burden of an order
backlog with negative margins dating back to 2002, plus debugging of the new pet filler,
its operating result is marginally better than the figure communicated at the beginning of
the year. The manpower strength was downsized from 291 to 132 employees. The
drastic cost-cutting measures adopted should steer this business unit back into profitability
in 2004. First larger orders booked support our optimism.
Strategic success factors at SIG
Our sustained growth and improvement of our business results are founded on a few, but
key strategic success factors. The rapidly expanding and profitable materials business
requires investments that we intend to continue financing out of our own resources. Hence,
reducing net working capital continues to be one of the important drivers for improving
our cash flow and, consequently, reducing our debt burden.
Apart from our ability to grow in emerging economies, innovations such as Plasmax (barrier
technology for coating pet bottles) and combishape (variable-format carton packages)
are helping us to expand further and enhance our reputation as an innovative Group that
develops new solutions in conjunction with its customers.
We do not intend to restrict exploiting synergies to the marketing side. Technologically,
for example, we see potential for greater cooperation in the aseptics field. The manufacture
of SIG Combibloc filling machines by SIG Simonazzi is an important step in this direction.
Because of their different business models, the SIG Combibloc and SIG Beverages divisions
will continue to be managed separately. Common factors, however, are being exploited
extensively. In the regions, we are cooperating closely. This year in Moscow, for example,
SIG Combibloc and SIG Beverages joined premises, thereby simplifying our approach
to customers.
The entire Group portfolio has been analyzed for cost-cutting potentials, and initiatives
for achieving savings have been implemented. Compared to the cost level of 2002, we expect
this program to bring about ongoing savings in excess of eur 30 millions per year from