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Investing.com -- SIG Group AG (SIX:SIGNC) on Tuesday revised its full-year 2025 outlook to the lower end of its guidance range following a slowdown in second-quarter sales growth and continued foreign exchange pressure.
Second-quarter organic sales grew 1.6%, down from 3.8% in the first quarter and 5.7% in the prior-year quarter. The figure exceeded the 0.9% consensus estimate. First-half organic sales rose 2.6%.
EBITDA for the quarter reached €204 million with a 24.7% margin, in line with consensus forecasts.
First-half earnings per share came in at €0.36, above the €0.30 consensus. Free cash flow was negative €140 million, missing expectations of negative €95 million due to rebate payments.
Net debt to EBITDA rose to 3x from 2.6x at the end of 2024, compared to the company’s target of 2x.
The Swiss company now expects full-year organic sales growth at the lower end of its 3-5% range, and an EBITDA margin of 24.5%-25.5%.
Consensus forecasts were 3.1% for sales growth and 24.7% for margin. SIG maintained its guidance for second-half weighted performance.
Foreign exchange effects remain a key risk, with every 1% FX movement estimated to reduce EBITDA margins by 10 basis points.
FX impacted first-half EBITDA by €17 million and is projected to result in a further €30-€40 million hit in the second half.
In regional terms, Europe, accounting for 31% of sales, declined 1.5% in the quarter, down from 0.5% growth in Q1 and 7% in Q2 2024, due to a strong prior-year base when milk supply was elevated.
IMEA, representing 14% of sales, rose 1%, slowing from 9.6% in Q1 and 25% in Q2 2024, affected by difficult comparables and early monsoon onset.
APAC, which makes up 28% of revenue, grew 1.9%, compared to a 0.2% decline in Q1 and a 1.2% decrease a year ago.
The company reported strength across Asia outside China, where market conditions remained soft.
In the Americas, contributing 27% of sales, revenue rose 5.8%, led by growth in aseptic dairy and foodservice in Latin America, supported by expansion at the Mexico sleeves plant. U.S. demand remained weak.
Carton packaging rose 2.6% in the first half, while bag-in-box and spouted pouch volumes were stable.
SIG noted growth in foodservice packaging despite a soft broader environment and expects a second-half improvement supported by an increase in filler placements. FX reduced second-quarter EBITDA margin by 110 basis points.
Shares of SIG are down 18% year to date, compared with an 8% gain in the STOXX 600.
“In the medium term we see c4% pa sales (target 4-6%) and a high-single-digit EPS growth algorithm returning in 2026-27. On our forecasts SIG is trading on 19.6x 2026 PE (5yr avg: 23.9x),” said analysts at Jefferies in a note.