Annual Report 2020 WE DELIVER MORE WE DELIVER MORE SIG Is a Leading Systems and Solutions Provider for Aseptic Carton Packaging
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Annual Report 2020 WE DELIVER MORE WE DELIVER MORE SIG is a leading systems and solutions provider for aseptic carton packaging. We work in partnership with our customers to bring food and beverage products to consumers around the world in a safe, sustainable and affordable way. We deliver more Governance 2 For customers and consumers 61 Board of Directors 8 For our planet 65 Group Executive Board 14 For communities 68 Corporate Governance Report Our Company Compensation 21 Letter from the Chairman 92 Letter from the Chairwoman and the Chief Executive Officer of the Compensation Committee 24 Our business model 94 Compensation Report 26 Our strategy 29 Our team Financials 31 Technology and innovation 117 Consolidated financial statements 205 Financial statements of the Company Business review 34 Responsible business review 43 Regional review 43 EMEA 46 APAC 48 Americas 49 Key performance highlights 50 Financial review Want the full experience? 59 Risk management Our 2020 Annual Report is also published online. The online version offers additional interactive features and content. Visit the report at https://reports.sig.biz/annual-report-2020 WE DELIVER MORE FOR CUSTOMERS AND CONSUMERS Annual Report 2020 3 BRAZIL — EXPANDING OUR CUSTOMER PARTNERSHIPS Over the last 15 years, our business in Brazil has expanded rapidly, helped by the construction and subsequent expansion of our factory at Curitiba. This has enabled us to be closer to our customers and to respond rapidly to their needs. We have combined our technology expertise with our strong sales force and service excellence to consistently win new customers. 9 filling machines installed in 2020 with two new customers in Sao Paulo and Paraná. São Paulo Paraná We deliver more For customers and consumers Early in 2020 we started placing filling machines with Shefa and Líder Alimentos, two large dairy companies in Brazil. The filling machines were installed in record time and production exceeded expectations, enabling the customers to meet strong consumer demand for milk. Together Shefa and Líder Alimentos ordered nine filling machines and at the same time signed contracts for the supply of carton sleeves. One of the key factors enabling SIG to win these contracts was the format and volume flexibility of our system. Customers can fill a wide variety of liquid dairy products – including plain, flavoured and plant- based milks – as well as tea and juices. “We are very happy with our new partnership with SIG. The high flexibility and speed of the SIG filling machines, as well as low waste rates, were the main reasons for implementing this project with SIG. The partnership will help us to expand our product portfolio and to offer many more options to consumers.” Roberto Adabo CEO at Shefa Annual Report 2020 5 Placement of the filling machines commenced at the beginning of 2020. The customers chose a combination of brand new and overhauled filling machines from SIG’s existing stock. In order to speed up deployment and the start of production, three of the filling machines were overhauled locally in Brazil by SIG’s expert engineers. All nine filling machines were installed within eight months – a record achievement given the complex engineering of the filling machines and the need for flawless efficiency and sterility. SIG IS THE PREFERRED PARTNER FOR SHEFA AND LÍDER ALIMENTOS SIG’s close cooperation with both Shefa and Líder Alimentos offers true product innovation and differentiation as part of SIG’s Value Proposition, which aims to deliver innovative product and packaging solutions that enable businesses to satisfy ever-changing needs. We deliver more For customers and consumers From the outset, production was significantly ahead of plan, driven by strong demand for milk during COVID-19 related lockdowns. And it was not just demand that exceeded expectations. At SIG we undertake to deliver a high level of efficiency on our machines and we also promise that waste rates will be below a certain threshold. Our filling machines exceeded the targeted efficiency level while waste rates were well below the threshold set. 8 months It took only eight months to install all nine filling machines for both of our partners in Brazil. Annual Report 2020 7 São Paulo and Paraná Through fast and efficient delivery and service, we enabled Líder Alimentos and Shefa to meet increased consumer demand for milk, which became even more important as a source of protein during lockdowns. SIG aseptic packaging to meet increasing customer and consumer demand. Shefa and Líder Alimentos are now offering their entire product ranges – from plain milk and flavoured dairy products to plant-based milks and nectars – in SIG carton packs. WE DELIVER MORE FOR OUR PLANET Annual Report 2020 9 INNOVATING FOR SUSTAINABILITY A strong focus on sustainable packaging innovation has produced a decade of industry firsts from SIG. OurSIG NATURE portfolio is delivering for our business, our customers and our planet. 1bn+ packs sold with our aluminium-free combibloc ECOPLUS packaging material Environmental considerations are central to product development at SIG as we create solutions to help customers meet growing consumer demand for sustainable packaging and adapt to an ever-changing world. Fully recyclable and mainly made from renewable paper board, our standard packs have a 28% to 70% lower carbon footprint than alternative types of packaging. Over the past 10 years, we have been leading the industry with a series of sustainable innovations that reduce the impact of our packs even more. We deliver more For our planet Our pioneering combibloc ECOPLUS packaging material, launched in 2010, is the world’s first aluminium-free aseptic carton solution. By eliminating the need for an aluminium foil barrier layer, it reduces the carbon footprint of our standard packs by 27%. Following this breakthrough, we went on to develop SIGNATURE 100, the world’s first aseptic carton solution linked to 100% renewable materials. Launched in 2017, our SIGNATURE 100 packaging material is aluminium-free and links the polymers in the pack to renewable, forest- based feedstock1. It cuts the carbon footprint of a standard pack by 58%. 150m+ packs have been sold with our SIGNATURE 100 or SIGNATURE Full Barrier packaging materials SIGNATURE 100: MAKING THE CONNECTION TO 100% FOREST-BASED MATERIAL SIGNATURE 100 is the world’s first aseptic carton solution linked to 100% renewable, forest-based raw materials. Aluminium-free. 82% renewable paper board. Polymers linked to 100% forest-based materials. WATCH ON YOUTUBE 1 Linked to tall oil, a residue from papermaking, via a certified mass balance system. Annual Report 2020 11 With combibloc ECOPLUS and SIGNATURE 100, we are offering the most sustainable packaging solutions on the market for UHT milk producers. Our SIGNATURE Full Barrier packaging material enables other customers to get the benefits of polymers linked to 100% renewable feedstock, while maintaining the ultra-thin aluminium foil barrier layer needed to protect more sensitive food products like juices and water. This cuts the carbon footprint of our standard packs by 45%. “SIGNATURE enables us to offer the most sustainable packaging solution, which at the same time guarantees the premium quality expected by our valued CoolBest customers. Switching to this new carton underlines our leading role in sustainability within the fruit juice industry.” Sabine Blom Marketing Manager CoolBest at Riedel SIGNATURE CIRCULAR: THE WORLD’S FIRST ASEPTIC CARTON WITH RECYCLED PLASTICS Our SIGNATURE Circular solution, launched in 2020, introduces post-consumer recycled content in aseptic cartons for the first time2. In a groundbreaking partnership with SABIC, we are using chemical recycling to transform used plastic packaging into high-quality polymers that are safe for food packaging. 2 Linked to post-consumer recycled plastics via a certified mass balance system. We deliver more For our planet The polymers used in our SIGNATURE 100 and SIGNATURE Full Barrier packaging materials are linked to renewable materials via an innovative mass balance approach. Independently certified to ISCC PLUS, this system ensures the amount of forest-based raw materials we need are mixed in with conventional fossil-based materials to produce polymers to the high grade required for aseptic food packaging. We use the same ISCC PLUS certified mass balance approach to link the polymers used in our SIGNATURE Circular packaging material to 100% post-consumer recycled plastics. The mass balance system supports a transition from fossil-based to renewable or recycled raw materials within the conventional and highly efficient polymer industry. This approach is endorsed by The Ellen MacArthur Foundation as a way to advance the circular economy.3 From plastic to paper straws SIG was the first in the industry to offer a paper straw solution for aseptic cartons. We launched both straight and U-shaped paper straws in 2019. 3 Source: The Ellen MacArthur Foundation Network, Mass Balance White Paper 2020. Annual Report 2020 13 “At Intermarché, our commitment to sustainable development is a priority. We decided early on to introduce SIG’s paper straw solution for aseptic carton packs to offer consumers a more sustainable alternative to plastic straws, while maintaining the on-the-go convenience of small-size packs.” Alain Plougastel Adhérent Intermarché We are going further. Our mission is to create food packaging that makes the world a better place. And our continued focus on sustainable innovation will help us drive progress on this journey WAY BEYOND GOOD. WE DELIVER MORE FOR COMMUNITIES Annual Report 2020 15 STANDING UP TO COVID-19 IN BANGLADESH WITH CARTONS FOR GOOD The Cartons for Good initiative, flagship project of the SIG WAY BEYOND GOOD Foundation, extended its support to communities during the COVID-19 crisis and lockdown in Bangladesh. Aid packages containing basic foodstuffs and hygiene items have been distributed to families in need. 20% Nearly 20% of the population in Bangladesh are malnourished and almost half the children are underweight.