FURTHER EXPANSION OF MARKET SHARE – SIKA POSTS RECORD RESULTS IN FIRST HALF OF THE YEAR

Ad Hoc Announcement Pursuant to Article 53 of the SIX Exchange Regulation Listing Rules

FURTHER EXPANSION OF MARKET SHARE – SIKA POSTS RECORD RESULTS IN FIRST HALF OF THE YEAR

• Sales of CHF 5,834.8 million (+9.2% in CHF) in first half of the year
• Sales increase by 12.8% in local currencies, negative foreign currency impact of –3.6%
• Material margin expands to 55.1% (first half of 2023: 52.7%)
• EBITDA margin jumps to 18.7% (first half of 2023: 16.5%)
• Operating profit before depreciation and amortization (EBITDA) of CHF 1,092.9 million (previous year: CHF 881.1 million)
• Successful integration of MBCC with raised synergy guidance for the year (CHF 100 – 120 million)
• Acquisition of Kwik Bond, USA
• New plants opened in Peru and China
• Global employee survey confirms high engagement rate of 86%
• SBTi validation for Sika’s net-zero targets
• Outlook for the 2024 fiscal year:
  • 6-9% increase in sales in local currencies
  • Over-proportional increase in EBITDA
  • Confirmation of 2028 strategic targets for sustainable, profitable growth

Sika successfully expanded its business activities in the first half of 2024, and achieved record results despite challenging market conditions. Strong growth rates and the targeted expansion of market share resulted in new record sales of CHF 5,834.8 million (previous year: CHF 5,345.5 million). This corresponds to an increase of 12.8% in local currencies. Sales growth in Swiss francs reached 9.2%, including a negative currency effect of -3.6%, which subsided in the second quarter. At profitability level, Sika substantially expanded its EBITDA margin to 18.7% (previous year: 16.5%). The integration of the MBCC acquisition is progressing very well and is contributing significantly to the strong half-year results.

Thomas Hasler, CEO: “With our good operating result in the first half of 2024, we have shown that we are in an excellent position to gain market share even in challenging markets. Furthermore, our near-and long-term emissions reduction targets, aiming for net-zero emissions by 2050, have been validated by the Science Based Targets initiative (SBTi). This important achievement underscores Sika’s commitment to sustainability and its proactive role in decarbonizing the construction and automotive industries. We have also reached an important milestone of our Strategy 2028. In a global employee survey, which was conducted in the first half of the year, we achieved an engagement rate of 86%, significantly exceeding our target of 80%. Sika has a strong corporate culture, and we can count on our employees’ deep sense of identification with the company. Thanks to all employees, we once again achieved strong results in the first half of 2024.”

MARKED INCREASE IN EBITDA
Sika posted a material margin of 55.1% in the first half of the year (previous year: 52.7%). This improvement, together with efficiency increases and synergies from the MBCC acquisition, has led to a marked increase in the EBITDA margin of 18.7% (previous year: 16.5%), despite inflationary cost dynamics in some areas. Operating profit before depreciation and amortization (EBITDA) reached a new record high of CHF 1,092.9 million in the first half of the year.

With a clear focus on cash generation, Sika achieved an all-time high for its operating free cash flow of CHF 401.3 million (previous year: CHF 322.5 million).

GROWTH AND MARKET SHARE GAINS IN ALL REGIONS
All regions successfully stood their ground and contributed to Sika’s growth and the expansion of business activities. The company continued to grow organically in the first half of the year, further increasing market share.

In the first half of 2024, the EMEA region (Europe, Middle East, and Africa) recorded an increase in sales in local currencies of 13.5% (previous year: 4.1%). An increase in price stability, robust employment figures, stabilized purchasing power due to the recovery in real wages, and lower trending interest rates are pointing towards an economic recovery in the region.

The positive trend towards more infrastructure and commercial construction projects continued in the first half of the current fiscal year. Sika also achieved growth in the distribution business. At local level, the countries in the Middle East, Africa, and Eastern Europe generated further growth. In the EMEA region, Germany, one of the most important markets in construction, showed initial growth momentum. By contrast, the automotive and industry business recorded a subdued first half of the year owing to declining production figures for new vehicles.

The Americas region achieved a 15.1% increase in sales in local currencies in the reporting period (previous year: 12.0%). The USA in particular has been posting continuous economic growth this year. Factors supporting the positive trend were state-funded infrastructure projects and projects realized in the context of the reshoring of production facilities to the USA. Latin America also contributed to the positive trend in the region with modest growth. In the automotive business, Sika managed to achieve a slight increase in sales. Compared with the reference period in the previous year, the company further increased its content per car.

Sika successfully acquired Kwik Bond, a manufacturer of polymer systems for the refurbishment of concrete infrastructures in the USA. For over 30 years, Kwik Bond has specialized in the refurbishment of bridge decks. With this acquisition, Sika has expanded its portfolio of high-value-added systems for the refurbishment of concrete structures.

In Lima, Peru, Sika commissioned a state-of-the-art plant to produce synthetic macro fibers for concrete components. With this innovative technology, the company is further strengthening its position as a leading supplier to the mining industry and strong partner for infrastructure projects.

The Asia/Pacific region increased sales by 8.0% (previous year: 9.9%). In China, Sika achieved moderate growth in its distribution business despite declining markets, while project business experienced a clear decline. Southeast Asia, by contrast, has gained growth momentum over the course of the year with high single-digit growth. In the automotive sector, Sika expanded its content per car with local and international automotive manufacturers in China and India.

In the first half of the year, the company opened a new plant in Liaoning, the largest province in Northeast China. The ultra-efficient factory, which produces mortars, tile adhesives, and waterproofing solutions, will allow Sika to meet future growing market demand. At the same time, it will shorten distances and optimize logistics operations.

OUTLOOK FOR 2024
Sika is confident that it will be able to successfully continue to implement its strategy built on sustainable and profitable growth in a recovering economic environment in 2024. Its around 34,000 dedicated employees worldwide, who strongly identify with the company objectives, are making an important contribution. The employees play a key role in supporting Sika, as an innovative leader in its core markets, to drive change in the construction and industry sectors towards automation, digitalization, and sustainability. Construction professionals, building owners, industrial companies, and other stakeholders around the globe rely on the first-class quality of Sika’s innovative solutions, their contribution to decarbonization, and ease of use.

For 2024, Sika expects sales growth in local currencies of 6-9% as well as an over-proportional increase in EBITDA.  

KEY FIGURES FIRST HALF OF 2024

NET SALES IN THE REGIONS

FINANCIAL CALENDAR

SIKA CORPORATE PROFILE
Sika is a specialty chemicals company with a globally leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protection in the building sector and the industry. Sika has subsidiaries in 103 countries around the world and, in over 400 factories, produces innovative technologies for customers worldwide. In doing so, it plays a crucial role in enabling the transformation of the construction and transportation industries toward greater environmental compatibility. With around 34,000 employees, the company generated sales of CHF 11.2 billion in 2023.

CONTACT
Dominik Slappnig
Corporate Communications &
Investor Relations
+41 58 436 68 21
slappnig.dominik@ch.sika.com

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