Sika Ag · SIX:SIKA
Sika — Investor Day (2022)
31 slides from Sika's investor day presentation, 2022
Slide 1: Our Way to Net Zero – Beyond the Expected
OUR WAY TO NET ZERO – BEYOND THE EXPECTED THOMAS HASLER CEO SIKA CAPITAL MARKETS DAY 2022
Slide 2: 1. SUCCESSFUL AND RESILIENT STRATEGY 2. OUR WAY TO NET ZERO 3. INNOVATION AND
1. SUCCESSFUL AND RESILIENT STRATEGY 2. OUR WAY TO NET ZERO 3. INNOVATION AND TODAY’S BREAKOUT SESSIONS 4. UPDATE ON MBCC ACQUISITION 5. OUTLOOK 2022
Slide 3: 1. Successful, Resilient Strategy
1. SUCCESSFUL, RESILIENT STRATEGY
Slide 4: Record Sales in the First Half of 2022
RECORD SALES IN THE FIRST HALF OF 2022 ALL REGIONS WITH DOUBLE-DIGIT GROWTH HY 2021 HY 2022 + 12.9% (in CHF billion, growth in LC) + 19.5% + 35.8% + 17.0% + 13.2% 1.54 2.19 1.13 0.39 5.25 Americas EMEA Asia/Pacific Global Business Group 4
Slide 5: Sika's Growth Model Delivers Continuous Strong Performance
SIKA’S GROWTH MODEL DELIVERS CONTINUOUS STRONG PERFORMANCE Net NETSales SALES(Half-year) Net EBIT (Half-year) Profit NET SALES +19.5% in CHF mn in CHF mn, growth in LC +23.5% +9.6% +2.9% +13.9% 5,250.3 +8.1% 841.9 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 5
Slide 6: Resilient Growth Strategy 2023 Strategic Targets Confirmed
RESILIENT GROWTH STRATEGY 2023 STRATEGIC TARGETS CONFIRMED SUSTAINABILITY Market Penetration 6-8% annual growth 15-18% EBIT margin Until 2020: <15% Innovation Operational Efficiency 25% of sales with new >10% products Operating free cash flow per year as % of net sales Acquisitions 0.5% pts non-mate
Slide 7: Strong Performance During Turbulent Years
SUCCESSFUL, RESILIENT STRATEGY STRONG PERFORMANCE DURING TURBULENT YEARS Net Sales EBIT in CHF mn In CHF mn 2Y CAGR 2Y CAGR* +14.8% +10.0% 1,391.4 9,252.3 2019 2020 2021 2019 2020 2021 *Growth in % LC 7
Slide 8: Key Investments in 2022 – Continued Execution
SUCCESSFUL, RESILIENT STRATEGY KEY INVESTMENTS IN 2022 – CONTINUED EXECUTION Acquisitions and divestments New plants Acquisition of Sable Marco, Canada Opening of a new plant in the Ivory Coast (March 2022) (February 2022) Closing of transaction related to divestment of European industrial coatings
Slide 9: Key Performance Drivers
KEY PERFORMANCE DRIVERS ▪ Pricing ▪ Operational Efficiency ▪ Synergies ▪ Innovation ▪ Resilience 9
Slide 10: Growth Driver – Repair and Refurbishment
GROWTH DRIVER – REPAIR AND REFURBISHMENT HIGHLY RESILIENT THROUGH THE CYCLES ▪ High resilience of refurbishment 55% of Group sales in construction In mature markets, 70% of sales in through economic cycles generated by refurbishment construction generated by refurbishment ▪ Corrective maintenance ca
Slide 11: Growth Driver – Emerging Markets
GROWTH DRIVER – EMERGING MARKETS CONTINUOUS STRONG GROWTH ▪ Enormous need for infrastructure, energy and power, real estate ▪ Expansion of supply chain footprint ▪ Acquisitions to leverage our market access ▪ Increased demand to meet international construction standards ▪ Need for qualified workforc
Slide 12: Growth Driver – Infrastructure Programs
GROWTH DRIVER – INFRASTRUCTURE PROGRAMS CHF 10 TRILLION PLANNED STIMULI EU working towards US infrastructure climate neutrality investments running approx. CHF China invests in technology into the billions approx. CHF 400 billion and infrastructure approx. CHF 850 billion 8,000 billion ▪ Extensive i
Slide 13: Growth Driver – Global Automotive Production
GROWTH DRIVER – GLOBAL AUTOMOTIVE PRODUCTION RECOVERY EXPECTED IN THE NEXT FEW YEARS in mn units 100 95 Strong recovery expected 90 ▪ Backlog in demand ▪ Supply chain “normalization” 85 ▪ E-vehicle demand 80 75 Global automotive production 70 Forecast (as of May 2022) 2018 2019 2020 2021 2022 2023 2
Slide 14: Growth Driver – Our People
GROWTH DRIVER – OUR PEOPLE UNIQUE CORPORATE CULTURE ▪ Courage for Innovation ▪ Customer First ▪ Empowerment and Respect ▪ Manage for Results ▪ Sustainability and Integrity 14
Slide 15: 2. Our Way to Net Zero
2. OUR WAY TO NET ZERO ® BUILDING TRUST By
Slide 16: Sustainability and Our Way to Net Zero
SUSTAINABILITY AND OUR WAY TO NET ZERO CONTINUE TO GROW AND REDUCE GREENHOUSE GAS MAKING A POSITIVE IMPACT OUR COMITTMENT ▪ 40% of global CO2 emissions attributable to ▪ We continue our growth strategy and engage our construction and building sector innovative developments to decouple growth from gr
Slide 17: Sika's Net Zero Roadmap
SIKA’S NET ZERO ROADMAP OUR KEY LEVERS Education and capacity building to improve material efficiency and circularity Accelerated use Continued of alternative focus on low carbon operational supplies efficiencies Partnerships Development with key of new innovative suppliers who solutions for support
Slide 18: 3. Innovation and Today's Breakout Sessions
3. INNOVATION AND TODAY’S BREAKOUT SESSIONS
Slide 19: Innovation Is in Everything We Do
INNOVATION IS IN EVERYTHING WE DO BOOSTER OF TRANSFORMATION ▪ 99 new patents and 150 new innovations in 2021 ▪ New playing field: digitalization ▪ 27’000 employees engaged 19
Slide 20: Net Zero and Innovation Go Hand in Hand
NET ZERO AND INNOVATION GO HAND IN HAND BREAKOUT SESSIONS Innovations Driving Net Zero – Clinker Reduction Innovations drive customers’ and Sika’s Net Zero journey Infrastructure and Refurbishment – Resilience in Challenging Markets Enabling Smart Cities – Urbanization, Efficiency, and E-Mobility Tr
Slide 21: 4. Update on MBCC Acquisition
4. UPDATE ON MBCC ACQUISITION
Slide 22: Update on MBCC Acquisition – Complementary in Many Ways
UPDATE ON MBCC ACQUISITION COMPLEMENTARY IN MANY WAYS Solutions Channel Geography Supply Chain 22
Slide 23: We Will Have an Even Stronger Product Range Together
UPDATE ON MBCC ACQUISITION WE WILL HAVE AN EVEN STRONGER PRODUCT RANGE TOGETHER Underground Construction Offshore Wind Installation High-performance industrial floors Floor Covering Applications Sikaplan® Sikafloor® Sikafloor® Sika Power® High performance epoxy sealing and PVC membrane for waterproo
Slide 24: Unconditional Approvals in Most Jurisdictions
UPDATE ON MBCC ACQUISITION UNCONDITIONAL APPROVALS IN MOST JURISDICTIONS Brazil China Japan Colombia Unconditional approvals received in most jurisdictions Saudi-Arabia Thailand South Africa Turkey 24
Slide 25: Divestments Required in Admixture Business
UPDATE ON MBCC ACQUISITION DIVESTMENTS REQUIRED IN ADMIXTURE BUSINESS USA Canada Process ongoing divestment of admixture Europe UK business Scope: up to CHF 850 million New Zealand Australia 25
Slide 26: Divestments Required in Admixture Business
UPDATE ON MBCC ACQUISITION DIVESTMENTS REQUIRED IN ADMIXTURE BUSINESS Remaining business CHF 2.15 billion* To be divested CHF 850 million* Countries with MBCC subsidiaries that will be fully integrated Countries with MBCC subsidiaries where admixture business will be divested *Based on full year 202
Slide 27: Confirmation of Strategic Fit
UPDATE ON MBCC ACQUISITION CONFIRMATION OF STRATEGIC FIT ▪ Synergies: CHF 160-180 million ▪ 2023 Leverage expected at ≈2.5x ▪ Funding structure of MBCC acquisition unchanged ▪ Favorable FX impact ▪ Closing in H1 2023 targeted 27
Slide 28: 5. Outlook 2022
5. OUTLOOK 2022 ® BUILDING TRUST By
Slide 29: Annual Sales Target for 2022 Raised
ANNUAL SALES TARGET FOR 2022 RAISED CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Sales increase by over 15% in local currencies Expected sales ▪ Surpassing CHF 10 billion for the first time ▪ Over-proportional EBIT increase expected for for 2022 the year > 10 ▪ Confirmation of 2023 strategic targets
Slide 30: Join Us on Our Way to Net Zero
goed. JOIN US ON OUR WAY TO NET ZERO ® BUILDING TRUST By
Slide 31: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘expects’, ‘believes’, ‘estimates’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘future’ or similar expressions or by discussion o