Sika Ag · SIX:SIKA
Sika — H1 2024 Earnings Presentation
32 slides from Sika's earnings presentation, Jul 30, 2024
Slide 1: Our First Half-Year 2024
OUR FIRST HALF-YEAR 2024 RECORD RESULTS IN FIRST HALF OF THE YEAR – EXPANSION OF MARKET SHARE – SALES UP IN LOCAL CURRENCIES BY 12.8% – OUTLOOK FOR 2024 CONFIRMED SIKA INVESTOR PRESENTATION BAAR, JULY 30, 2024
Slide 2: Agenda
1. OUR FIRST HALF-YEAR 2024 2. PROFITABLE GROWTH STRATEGY 2028 3. MARKET PENETRATION GROWTH 4. OUTLOOK
Slide 3: Record results in the first half of 2024
RECORD RESULTS IN THE FIRST HALF OF 2024 GROWTH IN LOCAL CURRENCIES OF 12.8% 1. Sales and profit ▪ Sales growth of 12.8% in local currencies. Record sales of CHF 5,834.8 million (+9.2% in CHF) ▪ Expansion of material margin to 55.1% (first half of 2023: 52.7%) ▪ EBITDA margin jumps to 18.7% (first h
Slide 4: Successful integration of MBCC, 2024 guidance raised
SUCCESSFUL INTEGRATION OF MBCC ACCELERATION OF SYNERGY IMPACT - 2024 GUIDANCE RAISED 180 to 200 140 to 160 100 to 120 41 2023 2024 2025 2026 (in CHF million) 4
Slide 5: Continuous investments in future growth
CONTINUOUS INVESTMENTS IN FUTURE GROWTH KEY INVESTMENTS IN 2024 Acquisition Kwik Bond New manufacturing facility in New plant in Liaoning, Polymers, US Lima, Peru China Polymer systems manufacturer Production of synthetic macro Production of a full range of for the refurbishment of fibers to strengt
Slide 6: Highlights first half-year 2024
HIGHLIGHTS FIRST HALF-YEAR 2024 STRONG SALES GROWTH IN LOCAL CURRENCIES ACROSS ALL REGIONS + 13.5% + 12.8% + 15.1% + 8.0% 2.05 2.57 1.22 5.84 Americas EMEA Asia/Pacific Group HY 2023 HY 2024 (in CHF billion, growth in LC) 6
Slide 7: Sales growth first half-year 2024
SALES GROWTH FIRST HALF-YEAR 2024 POSITIVE ORGANIC GROWTH – MBCC AS SIGNIFICANT CONTRIBUTOR in CHF mn -197 +620 +39 5,834.8 +28 5,345.5 Net sales Organic Bolt-on MBCC FX Net sales HY 23 acquisitions HY 24 (net) 7
Slide 8: Record results in the first half of 2024
RECORD RESULTS IN THE FIRST HALF OF 2024 OVER-PROPORTIONAL PROFITABILITY INCREASE ON ALL LEVELS in CHF mn 2023 NS 2024 NS Growth Net sales 5,345.5 100% 5,834.8 100% 9.2% Gross result 2,817.0 52.7% 3,217.6 55.1% 14.2% Personnel expenses -952.9 -17.8% -1,097.8 -18.8% Other OPEX -983.0 -18.4% -1,026.9
Slide 9: Strong sales growth across the years
STRONG SALES GROWTH ACROSS THE YEARS FURTHER MARKET SHARE GAINS 19.5% 4.0% 12.8% in LC acquisition 7.9% organic 15.5% 12.3% 7.2% 0.7% 0.5% in CHF mn 1 HY 2022 1 HY 2023 1 HY 2024 Sales 5,250.3 5,345.5 5,834.8 9
Slide 10: Agenda
1. OUR FIRST HALF-YEAR 2024 2. PROFITABLE GROWTH STRATEGY 2028 3. MARKET PENETRATION GROWTH 4. OUTLOOK
Slide 11: Strategy 2028 – Beyond the expected
STRATEGY 2028 – BEYOND THE EXPECTED PROFITABLE GROWTH TO CONTINUE 23.0% 20.0% EBITDA 18.2% EBITDA 16.4% 11.2 bn On track for 7.1 bn continued growth and 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 value creation 11 Note: Historical Sales represent actual CHF values, growth figures in LC
Slide 12: Sika's growth strategy 2028 – the pillars
SIKA’S GROWTH STRATEGY 2028 THE PILLARS OF THE STRATEGY 6-9% 20% annual growth in LC GHG emission reduction MARKET PENETRATION Scope 1 & 2 (absolute reduction vs. 2022 base line) INNOVATION & 20-23% EBITDA* Scope 3 reduction in line with net-zero pledge SUSTAINABILITY >80% ACQUISITIONS >10% Operatin
Slide 13: Market share in construction chemicals and industry
MARKET SHARE IN CONSTRUCTION CHEMICALS AND INDUSTRY TOTAL ADDRESSABLE MARKET 2023: CHF 110 BILLION 11% Top 30 Competitive competitors landscape 45% (incl. Sika) remains very account for fragmented despite ongoing 55% M&A activity of market share 13
Slide 14: Strong execution and benefits of megatrends
STRONG EXECUTION AND BENEFITS OF MEGATRENDS SIKA STRONGLY POSITIONED IN 2023 AND BEYOND URBANIZATION CLIMATE CHANGE AND SUSTAINABILITY Our growth ambition 6-9 % DIGITALIZATION INCREASING REGULATIONS Sika’s average annual growth rate DEMOGRAPHIC CHANGE in local currencies TECHNOLOGICAL PROGRESS RESOU
Slide 15: Balanced business mix – vertical markets
BALANCED BUSINESS MIX GLOBAL FOOTPRINT IN VERTICAL MARKETS 20% 30% RESIDENTIAL INFRASTRUCTURE 35% 15% COMMERCIAL AUTOMOTIVE & INDUSTRY 15
Slide 16: Balanced business mix – global footprint
BALANCED BUSINESS MIX GLOBAL FOOTPRINT EMERGING MARKETS 41% 59% REFURBISHMENT MATURE MARKETS 45% 55% NEW BUILD 16
Slide 17: Sika gaining market share over the years
SIKA GAINING MARKET SHARE OVER THE YEARS OUTGROWING THE PEERS 19% 17.1% 15.8% 16% 2.0% 14.5% 14% 14% 2.7% 12% 3.4% 10% 9% 8% 15.1% 13.3% 6% 12.7% 13.1% 13.2% in LC 7.2% 4% 4% 2% acquisition 0% 1.2% -1% organic -3.8% -2% -3.5% -4% -3.9% peer growth (organic) -6% -6% in CHF bn 2020 2020 2021 2021 2022
Slide 18: Agenda
1. OUR FIRST HALF-YEAR 2024 2. PROFITABLE GROWTH STRATEGY 2028 3. MARKET PENETRATION GROWTH 4. OUTLOOK
Slide 19: Market penetration and its levers
MARKET PENETRATION AND ITS LEVERS THE ART OF INCREASING MARKET SHARE Leveraging Cross- Multi-channel Go where Key High potential strong position selling approach the money is geographies markets 19
Slide 20: Our five key geographic markets
STRATEGY 2028 OUR FIVE KEY GEOGRAPHIC MARKETS EUROPE USA JAPAN CHINA INDIA Our five key geographic markets cover 75% of total addressable market 20
Slide 21: Key geographic market – USA
KEY GEOGRAPHIC MARKET – USA RESHORING, SAMSUNG SEMICONDUCTOR PLANT, TEXAS, USA 557,000 m plant 2 the first of ten phases of expansion 228,000 m 2 electrostatic discharge flooring Synergetic approach and a strong cross-selling Sika delivered strategy high-performance Waterproofing solutions solutions
Slide 22: Key geographic market – Japan
KEY GEOGRAPHIC MARKET – JAPAN ALL BUILDINGS ABOVE 187 M IN TOKYO BUILT WITH SIKA SOLUTIONS Earthquake safety: Sika’s solutions used for ALL skyscrapers’ constructions in Tokyo 53 completed buildings taller than 187 m 10 buildings currently under construction 22
Slide 23: Urbanization – Azabudai Hills, Tokyo
URBANIZATION – INFRASTRUCTURE DENSIFICATION AZABUDAI HILLS – REDEFINING TOKYO'S LANDSCAPE Accommodating 20,000 employees 3,500 residents 30 million visitors a year Enhanced concrete workability with Sika’s superplasticizers for high altitudes pumping Sika’s admixtures for state-of-the-art earthquake
Slide 24: Key geographic market – India
KEY GEOGRAPHIC MARKET – INDIA DYNAMIC AND PROFITABLE GROWTH Construction market size Investments in CHF 600 billion transportation to expand at 6% and CAGR infrastructure throughout 2026 Sika leading the transition from High potential in site-mixed to the retail pre-mixed business mortars 24
Slide 25: Mumbai-Ahmedabad high-speed rail, India
POPULATION GROWTH – INCREASING URBAN CONNECTIVITY MUMBAI-AHMEDABAD HIGH-SPEED RAIL, INDIA 508 km India’s first high-speed railway link from Mumbai to Ahmedabad Sika-MBCC’s dedicated project and technical service team supporting in key locations Sika’s concrete admixtures for 13 million m concrete 3
Slide 26: Koysha hydropower plant, Ethiopia
POPULATION GROWTH – HYDROPOWER KOYSHA HYDROPOWER PLANT, ETHIOPIA 180 meter high water dam generating 6,460 MWh of electricity, offsetting one million tons (Mt) of CO2 annually Sika’s concrete admixtures for 7 million m concrete 3 Locally produced admixures and mortar products creating a simplified s
Slide 27: Battersea Power Station, London
URBANIZATION – REPAIR AND REFURBISHMENT WATERPROOFING AN ICON: BATTERSEA POWER STATION, LONDON 30,000 m 3 of watertight concrete for the basement 375 tons of flowable repair mortar for the ground floor slabs 125 tons of repair mortar to seal the enormous columns and beams 27
Slide 28: Growth driver – construction chemicals market
GROWTH DRIVER – CONSTRUCTION CHEMICALS MARKET STRONG PENETRATION INCREASE Construction chemicals penetration (1991 = 100) 600 500 400 Strong growth 300 opportunities 200 100 2x penetration increase 2.5–4.0x penetration increase 0 1990 2000 2010 2020 2030 2040 2050 Source: IHS, Freedonia 28 1) penetr
Slide 29: Agenda
1. OUR FIRST HALF-YEAR 2024 2. PROFITABLE GROWTH STRATEGY 2028 3. MARKET PENETRATION GROWTH 4. OUTLOOK
Slide 30: Outlook 2024
OUTLOOK 2024 CONFIRMATION OF 2028 STRATEGIC TARGETS ▪ For 2024 Sika expects sales growth in local currencies of 6-9% Expected sales ▪ Over-proportional increase in EBITDA growth in LC of ▪ Confirmation of 2028 strategic targets for sustainable, profitable growth 6-9% 30
Slide 31: Thank you for your attention
THANK YOU FOR YOUR ATTENTION Bs BUILDING TRUST
Slide 32: 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