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

Investing.com — Swiss packaging maker SIG raised its 2026 profit margin forecast on Tuesday after third-quarter earnings beat analyst expectations on all key measures, helped by price surcharges and strong growth in the Middle East.

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SIG now expects an adjusted EBIT margin, which measures operating profit as a share of sales, of 16%-16.5% for 2026, up from 15.7%-16.2%.

The analyst average, per Vara Research, was 16.1%. Revenue growth guidance is unchanged at 0%-2% at constant currency and constant resin.

Third-quarter revenue was €843 million, versus the analyst average of €805.7 million. Revenue rose 7.2% at constant currency from a year earlier. Growth at constant currency and constant resin was 6.5%, versus the 3.6% analysts expected.

India, Middle East and Africa revenue rose 18.2% at constant currency to €115.4 million from €97.1 million, helped by strong momentum in Egypt, Saudi Arabia and North Africa and by surcharges to offset higher input costs.

Europe rose 3.3% on new line deployments and surcharges tied to higher raw material costs due to the Middle East situation. Americas rose 9.3% and Asia Pacific 4.7%, both at constant currency.

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Adjusted EBIT was €146.9 million, versus the €131.3 million analysts expected. The margin was 17.4%, versus 14.8% a year earlier excluding non-recurring charges, and versus the 16.3% analysts expected.

Over nine months, profit benefited from better plant efficiency and price surcharges that offset higher input costs.

Adjusted EBITDA was €212.9 million versus €199.9 million expected, adjusted net income was €94.3 million versus €71 million, and free cash flow was €91.2 million versus €37 million.

Nine-month free cash flow was €59 million versus -€84.4 million a year earlier, helped by lower customer incentive payments, capital spending and tax payments.

Chief Executive Anne Erkens said the company “delivered a strong third quarter, with solid revenue growth, significantly improved profitability and strong cash flow generation, also benefiting from a low comparison base in the prior year.”

SIG plans to restart dividend payments in 2027 for 2026, with a payout of 30%-50% of adjusted net income. Net leverage was 2.6x at Sept. 30, versus 3.3x a year earlier.