SIG raises 2026 margin outlook after third-quarter earnings beat forecasts

Swiss packaging company SIG raised its 2026 profit margin outlook after delivering strong third-quarter earnings that exceeded analyst forecasts. The company now anticipates an adjusted EBIT margin of 16%-16.5% for 2026, up from the earlier range of 15.7%-16.2%. Analysts had predicted a range of 16.1%. SIG's revenue guidance remains unchanged at 0%-2% growth in constant currency and constant resin, with Q3 revenue reaching €843 million, surpassing the average estimate of €805.7 million.

Revenue growth at constant currency and constant resin was 6.5%, exceeding the 3.6% forecast by analysts. Revenue in India, the Middle East, and Africa grew 18.2% at constant currency, driven by strong performance in Egypt, Saudi Arabia, and North Africa, as well as surcharges to counteract higher input costs. Europe saw a 3.3% increase due to new line deployments and surcharges related to higher raw material costs stemming from the Middle East situation, while the Americas grew by 9.3% and Asia Pacific by 4.7%, both figures at constant currency.

Adjusted EBIT for the quarter reached €146.9 million, outpacing the analysts' expectation of €131.3 million, and the margin stood at 17.4%, higher than the 14.8% reported a year earlier and the 16.3% expected. Over a nine-month period, profit was bolstered by improved plant efficiency and price surcharges that offset rising input costs.

Adjusted EBITDA stood at €212.9 million, higher than the $199.9 million forecast, and adjusted net income was €94.3 million compared to the $71 million expected. Free cash flow was €91.2 million, notably higher than the -$84.4 million recorded a year earlier, thanks to lower customer incentive payments, reduced capital spending, and tax payments.

Chief Executive Anne Erkens highlighted a solid third quarter, citing robust revenue growth, improved profitability, and strong cash flow generation, all aided by a limited comparison base in the prior year. SIG intends to resume dividend payments in 2027, distributing 30%-50% of adjusted net income. The company's net leverage was 2.6x as of September 30, compared to 3.3x a year prior.

However, guidance is contingent on input costs and currency fluctuations, with the volatile Middle East situation continuing to impact raw material and freight costs. SIG projects net capital spending to range between 6%-8% of revenue and anticipates a tax rate of 26%-28%.