Sika Ag · SIX:SIKA

Sika — H1 2019 Earnings Presentation

33 slides from Sika's earnings presentation, Jul 25, 2019

  1. Slide 1: Strong Growth in Sales and EBIT in First Half Year

    STRONG GROWTH IN SALES AND EBIT IN FIRST HALF YEAR SIKA COMPANY PRESENTATION JULY 25, 2019

  2. Slide 2: Half-Year Results 2019

    HALF-YEAR RESULTS 2019 ® BUILDING TRUST Bs

  3. Slide 3: Growth of 9.6% - New Records in Sales and Profit

    GROWTH OF 9.6% - NEW RECORDS IN SALES AND PROFIT HIGHLIGHTS 1. New records in sales and profit  +9.6% sales growth in local currencies (7.6% in CHF) to CHF 3,732.4 million  Higher gross result – EBIT increase of 8.3% to CHF 481.7 million 2. Key investments  Conclusion of Parex acquisition provide

  4. Slide 4: Key Figures First Half 2019

    KEY FIGURES FIRST HALF 2019 RECORD RESULTS – STRONG MOMENTUM CONTINUES in CHF mn 2018 2019 Δ% Net sales 3,470.1 3,732.4 +7.6% Gross results as % of net sales 53.6 53.8 EBITDA 544.8 623.8 +14.5% EBIT 444.6 481.7 +8.3% Net profit 318.2 330.7 +3.9% Operating free cash flow 11.5 179.7 ROCE in % 26.2 17.

  5. Slide 5: First Half Sales Growth 9.6%

    FIRST HALF SALES GROWTH 9.6% SALES GROWTH IN THE FIRST HALF 2019 13.9% 7.1% 9.6% 8.1% in LC 2.4% 6.5% acquisition organic 6.8% 5.7% 3.1% in CHF mn 1 HY 2017 1 HY 2018 1 HY 2019 Sales 2,994.9 3,470.1 3,732.4 5

  6. Slide 6: Sales First Half 2019 Growth in All Regions

    SALES FIRST HALF 2019 GROWTH IN ALL REGIONS +3.8% +12.0% +14.8% +3.1% Growth in CHF +7.7% +11.4% +15.6% +4.9% Growth in LC -3.9% +0.6% -0.8% -1.8% FX impact +4.2% +7.1% +12.9% +5.2% Acquisition 23% 77% Construction Industry 6 EMEA Americas Asia/Pacific Global Business

  7. Slide 7: Strong Growth Momentum Continues in 2019

    STRONG GROWTH MOMENTUM CONTINUES IN 2019 9.6% SALES GROWTH (7.6% IN CHF) + 7.7% + 15.6% + 4.9% + 11.4% 996 642 478 Americas 1,617 Asia/Pacific Global Business EMEA 6M 2018 6M 2019 (in CHF mn, growth in LC) 7

  8. Slide 8: Sika's Growth Model Delivers Continued Growth in EBIT and Profit (Half Year)

    SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN EBIT AND PROFIT (HALF YEAR) EBIT NET SALES Net Profit in CHF mn in CHF mn 481.7 330.7 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 8

  9. Slide 9: High Operating Speed Continues in 2019: Investments in New Plants

    HIGH OPERATING SPEED CONTINUES IN 2019 INVESTMENTS IN NEW PLANTS Opening of Sika plants:  Mortar plant in Senegal (Dakar, March 2019)  Expansion of mortar plant in Egypt (Alexandria, April 2019)  Concrete admixture plant in Qatar (Doha, May 2019)  Expansion of mortar plant in Serbia (Belgrade, J

  10. Slide 10: High Operating Speed Continued in 2019: 3 Acquisitions

    HIGH OPERATING SPEED CONTINUED IN 2019 3 ACQUISITIONS IN 2019 Company Country Target Market Parex Global Refurbishment, Waterproofing, Flooring King Packaged Materials Company Canada Concrete, Refurbishment Belineco Eastern Europe Sealing & Bonding Total annual sales: CHF 1,288 million Belineco King

  11. Slide 11: Key Investments in 2019: Acquisition of King Packaged Materials

    KEY INVESTMENTS IN 2019 ACQUISITIONS AS GROWTH PLATFORM Acquisition of King Packaged Materials Company (Canada)  Large manufacturer of dry shotcrete and mortars for concrete repair  Products for the construction and mining industry as well as for the home improvement distribution channel  King op

  12. Slide 12: Key Investments in 2019: Acquisition of Belineco

    KEY INVESTMENTS IN 2019 ACQUISITIONS AS GROWTH PLATFORM Acquisition of Belineco, Belarus  Manufacturer of polyurethane foam systems  Further expansion of production capacity and know-how for polyurethane foam systems  Cross-selling opportunities in Eastern Europe 12

  13. Slide 13: Update on Parex

    UPDATE ON PAREX ® BUILDING TRUST Bs

  14. Slide 14: Transaction Highlights (1/2)

    TRANSACTION HIGHLIGHTS (1/2)  Parex, an excellent company  A leading mortar manufacturer – great expertise in facade, tile adhesives, waterproofing  Impressive track record of profitable growth (7 year growth CAGR of 7%; 2018E sales: CHF 1.2 billion, EBITDA 16%)  Strong position in distribution

  15. Slide 15: Transaction Highlights (2/2)

    TRANSACTION HIGHLIGHTS (2/2)  Financial parameters  Enterprise value of CHF 2.5 billion  Annual synergies of CHF 80 – 100 million expected  Multi-step transaction  Sika signed exclusive put option agreement, announcement January 8, 2019  SPA signed on February 12, 2019  Closing May 23, 2019 1

  16. Slide 16: Parex – A Leading Mortar Company

    PAREX – A LEADING MORTAR COMPANY 80% OF SALES THROUGH DISTRIBUTION CHANNEL Sales CHF 1,204 million EBITDA CHF 195 million Waterproofing & Tech. Solutions 26% Tile Setting Sales by products Materials 40% Facade Protection & Decoration 34% Americas 25% Asia Sales by region 42% EMEA 33% Sites 74 plants

  17. Slide 17: Sika and Parex: 1+1=3 Expand Highly Profitable Mortar Business

    SIKA AND PAREX: 1+1=3 EXPAND HIGHLY PROFITABLE MORTAR BUSINESS Combined Adhesive Systems Thermoplastic Adhesive 23% Systems Systems Concrete 28% 26% Systems 14% CHF 7.1 bn CHF CHF1.1bn 1.2 bn CHF 8.3 bn Coating Systems Coating Concrete Thermoplastic 12% Systems Systems Systems 14% 17% 24% Mortars Mo

  18. Slide 18: Sika and Parex: 1+1=3 Exciting Synergy Opportunities

    SIKA AND PAREX: 1+1=3 EXCITING SYNERGY OPPORTUNITIES  Cross-selling Sika products through Parex’ distribution network  Parex gain access to Sika’s direct sales channels  Parex products included in Sika specifications  Optimized utilization of warehouses, logistics and production network Access t

  19. Slide 19: Revenue and Cost Synergies

    REVENUE AND COST SYNERGIES EXPECTED RUN-RATE SYNERGIES OF CHF 80-100M  Cross-selling of Sika products through Parex distribution  Expected run-rate channels (Acrylics, PUs, Epoxies etc.) synergies of Revenue CHF 80-100m p.a.  Leverage Sika’s direct access to jobsites for Parex products synergies

  20. Slide 20: Successful Strategy Execution

    SUCCESSFUL STRATEGY EXECUTION

  21. Slide 21: Sika's Growth Model Delivers Strategic Targets 2020

    SIKA’S GROWTH MODEL DELIVERS STRATEGIC TARGETS 2020 MARKET PENETRATION 6 - 8% ANNUAL GROWTH 30 NEW PLANTS INNOVATION 105 NATIONAL SUBSIDIARIES EMERGING MARKETS 14 - 16% EBIT MARGIN PER YEAR ACQUISITIONS > 10% OPERATING FREE CASH FLOW PER YEAR VALUES > 25% ROCE PER YEAR 21

  22. Slide 22: Market Penetration - Focus on Attractive Markets

    MARKET PENETRATION - FOCUS ON ATTRACTIVE MARKETS: CROSS-SELLING, LIFE-CYCLE MANAGEMENT, A STRONG BRAND Concrete Waterproofing Roofing Flooring & Coating Sealing & Bonding Refurbishment Industry 22

  23. Slide 23: Megatrends Drive Our Growth

    MEGATRENDS DRIVE OUR GROWTH URBANIZATION, NEW VEHICLE DESIGN AND SUSTAINABILITY Increased safety, fire, Rising demand for high- New modular vehicle earthquake and quality performance concrete, manufacturing concepts requirements sealing and need fast, high-strength waterproofing bonding systems Sust

  24. Slide 24: Sika Will Act as Market Consolidator

    SIKA WILL ACT AS MARKET CONSOLIDATOR FRAGMENTATION OFFERS ACQUISITION OPPORTUNITIES CONSTRUCTION CHEMICAL MARKET 2019 > CHF 60 BILLION Sika Top 10 companies with a combined market share of 40% Other 24

  25. Slide 25: Sika's Market Potential

    GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW-BUILD TO REFURBISHMENT SIKA HAS SOLUTIONS FOR ALL MARKETS Long-term market potential Sika Repair and Sika’s market potential refurbishment Higher building standards Infrastructure Emerging markets Developing markets Mature markets 25

  26. Slide 26: Urbanization Drives Growth – Supertall Buildings on the Rise

    URBANIZATION DRIVES GROWTH URBANIZATION – SUPERTALL BUILDINGS ON THE RISE Projected +1,200% in 20 years. Sika solutions are the driving force of this trend. Source: http://www.skyscrapercenter.com 26

  27. Slide 27: Urbanization Drives Growth: Concrete the No. 1 Structural Material

    URBANIZATION DRIVES GROWTH CONCRETE – NO. 1 STRUCTURAL MATERIAL FOR HIGH-RISE BUILDINGS Sika inside Source: http://www.skyscrapercenter.com 27

  28. Slide 28: Sika's Growth Model Delivers Key Investments Since 2015

    SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS SINCE 2015  - Successful Target Market concept Market Penetration  - Megatrends driving growth  - 302 new patents filed Innovation  - 20 Global Technology Centers Emerging Markets  - 41 new plants opened  - 11 new national subsidiaries Acquisitions

  29. Slide 29: Sika's Growth Model Delivers Continued Growth in Sales and Profit (Full Year)

    SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN SALES AND PROFIT (FULL YEAR) NET NET SALES SALES EBIT in CHF mn, % growth in local currencies in CHF mn 13.6% 900 9.0% 5.5% 13.0% 6.2% 600 9.4% 5.3% 7,085.4 945.9 300 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 29

  30. Slide 30: Outlook

    OUTLOOK ® BUILDING TRUST Bs

  31. Slide 31: Strong Outlook 2019

    STRONG OUTLOOK 2019 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY  Sales expected to exceed CHF 8 billion  Double-digit EBIT growth for 2019  Opening of seven to nine new factories  Strategy 2023 to be communicated at Capital Markets Day on October 3, 2019 31

  32. Slide 32: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST ViN

  33. Slide 33: 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

Sika — H1 2019 Earnings Presentation on 6ix