Slide 1: Record Sales and Profit in the First Nine Months 2017
RECORD SALES AND PROFIT IN THE FIRST NINE MONTHS 2017 – SUCCESSFUL STRATEGY EXECUTION SIKA INVESTOR PRESENTATION OCTOBER 26, 2017
Slide 2: Table of Contents
TABLE OF CONTENTS 1. HIGHLIGHTS AND RESULTS FIRST NINE MONTHS 2017 2. SUCCESSFUL STRATEGY EXECUTION 3. TARGETS 2020 4. OUTLOOK 2
Slide 3: 1. Highlights and Results First Nine Months 2017
1. HIGHLIGHTS AND RESULTS FIRST NINE MONTHS 2017
Slide 4: Record Sales and Profit
RECORD SALES AND PROFIT 1. Record results +7.9% sales growth in local currencies, CHF 4,627.5 million in sales CHF 669.0 million EBIT (+13.2%) CHF 477.4 million net profit (+14.9%) 2. Key investments 4 new factories in Mexico, Kazakhstan, Russia and Tanzania 2 new national subsidiaries in
Slide 5: Key Figures Nine Months 2017
KEY FIGURES NINE MONTHS 2017 RECORD RESULTS – STRONG MOMENTUM CONTINUES in CHF mn 2016 2017 Δ% Net sales 4,331.8 4,627.5 +6.8% Gross results as % of net sales 55.3 54.7 EBITDA 719.5 797.9 +10.9% EBIT 591.2 669.0 +13.2% Net profit 415.5 477.4 +14.9% 5
Slide 6: Sika Well on Track: 7.9% Sales Growth
SIKA WELL ON TRACK 7.9% SALES GROWTH IN THE FIRST NINE MONTHS 2017 12% 10% 7.9% 8% 6.3% 5.5% 2.4% 1.1% 6% 2.0% in LC 4% acquisition 5.2% 5.5% organic 3.5% 2% 0% 9M 2015 9M 2016 9M 2017 in CHF mn 9M 2015 9M 2016 9M 2017 Net sales 4,095.0 4,331.8 4,627.5 6
Slide 7: Sales Nine Months 2017: Growth in All Regions
SALES NINE MONTHS 2017 GROWTH IN ALL REGIONS +6.5% +16.7% +4.8% +1.7% Growth (in LC) -2.6% +0.5% -0.3% +1.7% FX impact +1.9% +8.2% +0.9% +0.0% Acquisition Industry 22% Construction 2,137 826 821 435 78% EMEA North Asia/Pacific Latin America America 7
Slide 8: Growth Momentum Continues in First Nine Months 2017
GROWTH MOMENTUM CONTINUES IN FIRST NINE MONTHS 2017 7.9% SALES GROWTH (6.8% IN CHF) + 16.7% + 6.5% 826 + 4.8% North America 821 + 1.7% 2,137 Asia/Pacific 435 EMEA Latin America 9M 2016 9M 2017 (in CHF mn, growth in LC) 8
Slide 9: Development of Sales First Nine Months
DEVELOPMENT OF SALES FIRST NINE MONTHS STRONG GROWTH IN MATURE AND EMERGING MARKETS in CHF mn 4'700 104 -44 4'600 4'500 109 4'400 4,628 127 4'300 4,332 4'200 9M 2016 Organic Growth Organic Growth Acquisitions Translation 9M 2017 Mature Market Emerging Market Impact 9
Slide 10: Six Year Overview – Nine Months Figures
SIX YEAR OVERVIEW – NINE MONTHS FIGURES CONTINUOUSLY IMPROVING MARGINS 10.3% EBIT IN CHF NET PROFIT IN CHF 800 16.0% 14.5% 9.6% 10.0% 13.6% 500 In % of sales 8.3% 700 14.0% 12.0% In % of sales 477 669 7.4% 8.0% 11.0% 6.7% 600 12.0% 416 400 10.2% 591 6.1% 500 9.5% 10.0% 6.0% 8.2% 490 4.9% 338 400 457
Slide 11: Consecutive Quarters of Margin Improvement
SIKA’S GROWTH MODEL DELIVERS 23 CONSECUTIVE QUARTERS OF MARGIN IMPROVEMENT PERIODIC EBIT MARGINS 17% 16% Q3 2017 15% 14% 2016 13% 2015 12% 2014 11% 10% 2013 9% 8% 7% 2012 6% 2011 5% HY Q3 Q4 11
Slide 12: Continuing High Operating Speed in 2017: Acquisitions
CONTINUING HIGH OPERATING SPEED IN 2017 ACQUISITIONS Company Country Target Market Rmax USA Roofing Bitbau Dörr Austria Waterproofing ABC Sealants Turkey Sealing & Bonding KVK Czech Republic Roofing, Waterproofing, Refurbishment Total annual sales: CHF 177 million Rmax Bitbau Dörr KVK 7
Slide 13: Key Investments in 2017: Expansion in Emerging Markets
KEY INVESTMENTS IN 2017 EXPANSION IN EMERGING MARKETS New subsidiaries: Senegal (April 2017) El Salvador (September 2017) Now present in 99 countries with own national subsidiaries 13
Slide 14: Key Investments in 2017: Opening of Sika Plants
KEY INVESTMENTS IN 2017 EXPANSION IN EMERGING MARKETS Opening of Sika plants: 5th plant in Mexico (Coatzacoalcos, March 2017) New and expanded site in Kazakhstan (Almaty, May 2017) 1st plant in Tanzania (Dar es Salaam, June 2017) 5th plant in Russia (Lobnya, July 2017) New and expanded sit
Slide 15: 2. Successful Strategy Execution
2. SUCCESSFUL STRATEGY EXECUTION
Slide 16: Strategic Targets Confirmed for 2020
STRATEGIC TARGETS CONFIRMED FOR 2020 SIKA’S GROWTH MODEL WILL DELIVER 1) Performance 2) Market Penetration 3) Innovation 4) Accelerated build-up of Emerging Markets 5) Acquisitions 6) Values 16
Slide 17: 1) Performance
1) PERFORMANCE ® BUILDING TRUST Bs
Slide 18: Pillars of the Growth Model Achievements
SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS IN THE LAST FIVE YEARS PILLARS OF THE GROWTH MODEL ACHIEVEMENTS PILLARS OF THE GROWTH MODEL ACHIEVEMENTS MARKET PENETRATION • Successful Target Market concept • Megatrends driving growth INNOVATION •• 420 new patents filed 20 Global Technology Cente
Slide 19: Continued Growth in Sales and Profit (Full Year)
SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN SALES AND PROFIT (FULL YEAR) 19
Slide 20: 2) Market Penetration
2) MARKET PENETRATION ® BUILDING TRUST Bs
Slide 21: Sika's Market Potential
SIKA’S MARKET POTENTIAL LARGE AND GROWING MARKET SEGMENTS TOTAL MARKET SIZE 2016 2020 > CHF 70 BILLION CHF 80 BILLION INDUSTRY CONCRETE INDUSTRY CONCRETE WATER- FLOORING WATER- PROOFING FLOORING PROOFING ROOFING ROOFING SEALING & SEALING & BONDING BONDING REFURBISHMENT REFURBISHMENT 21
Slide 22: Megatrends Drive Our Growth
MEGATRENDS DRIVE OUR GROWTH URBANIZATION, NEW VEHICLE DESIGN AND SUSTAINABILITY New modular Increasing world Increased safety, fire, vehicle population with water, earthquake and manufacturing urbanization and quality requirements concepts need fast, megacities high strength bonding systems Rising d
Slide 23: 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 23
Slide 24: Growth Model with Early Market Penetration
GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW BUILD TO REFURBISHMENT Sika‘s Market Potential Sika‘s long-term Repair & market potential Sika is ideally positioned Refurbishment to profit from all phases of the construction life- Concrete cycle Market Education & repair, mortars, roofing, floor
Slide 25: 3) Innovation
3) INNOVATION ® BUILDING TRUST Bs
Slide 26: Innovation: Strong Track Record
INNOVATION STRONG TRACK RECORD More than More than More than Established 420 890 470 20 patents were employees are invention Technology filed in the dedicated to disclosures Centers last five years Research and in the last five worldwide Development years 26
Slide 27: From Patents to World Class Products
FROM PATENTS TO WORLD CLASS PRODUCTS INNOVATION INCREASES SALES AND PROFIT +20% ANNUAL ORGANIC 420 SALES GROWTH = INCREASE 1,500 NEW PRODUCTS 30% NEW PATENTS IN ANNUAL EBIT LAUNCHED IN THE THE LAST 5 LAST 5 YEARS CONTRIBUTION YEARS 27
Slide 28: From Patents to World Class Products: Major Trends
FROM PATENTS TO WORLD CLASS PRODUCTS 3 MAJOR TRENDS IN THE MARKET Higher building standards Urbanization and megacities require intelligent and safe building designs Addressable market for fire protective coating products CHF 1 billion by 2024 3-D Concrete Printing Paradigm shift in constructi
Slide 29: Sika Automotive: Increase in Vehicle Content
SIKA AUTOMOTIVE E.G. INNOVATIONS DRIVE INCREASE IN VEHICLE CONTENT AVERAGE VEHICLE CONTENT VW GOLF 7, E-GOLF VW PASSAT CONTENT: > CHF 40 CONTENT: > CHF 80 8.69 PSA 3008, 308, 5008 AUDI A3, A4, A5 7.94 7.36 CONTENT: > CHF 70 CONTENT: > CHF 40 6.75 6.19 JAGUAR XF MERCEDES S-CLASS 5.57 CONTENT: > CHF 1
Slide 30: Sika Innovations Drive Growth: Sika ViscoFlow
SIKA INNOVATIONS DRIVE GROWTH E.G. INCREASED WORKABILITY FOR CONCRETE Sika® ViscoFlow® IN-HOUSE DEVELOPED HIGH-PERFORMANCE POLYMER PERMITS > 8 HOURS WORKABILITY OF CONCRETE + 30% SALES GROWTH IN 2016 Tons sold 40'000 20'000 0 2013 2014 2015 2016 MEETING THE ALLOWING CHALLENGES OF LONG CONSTRUCTION I
Slide 31: 4) Accelerated Build-up of Emerging Markets
4) ACCELERATED BUILD-UP OF EMERGING MARKETS
Slide 32: Emerging Markets Build-up in the Last Five Years
EMERGING MARKETS BUILD-UP IN THE LAST FIVE YEARS CAPTURING GROWTH POTENTIAL IN NEW MARKETS 52 11.0% 22 36% new average annual new of sales plants sales growth national in Emerging opened subsidiaries Markets 32
Slide 33: 5) Acquisitions
5) ACQUISITIONS ® BUILDING TRUST Bs
Slide 34: Fragmentation Offers Acquisition Opportunities
SIKA’S MARKET POTENTIAL FRAGMENTATION OFFERS ACQUISITION OPPORTUNITIES CONSTRUCTION CHEMICAL MARKET 2016 > CHF 60 BILLION Sika Top 10 companies with a combined market share of 40% Other 34
Slide 35: Acquisitions in the Last Five Years
ACQUISITIONS IN THE LAST FIVE YEARS GROWTH PLATFORMS FOR THE FUTURE In all In all 24 772 7 4 acquisitions million CHF Target regions additional Markets turnover 35
Slide 36: 6) Values and Principles
6) VALUES AND PRINCIPLES ® BUILDING TRUST Bs
Slide 37: Sika's Values and Principles
SIKA’S VALUES AND PRINCIPLES STRONG CORPORATE CULTURE Customer first Courage for innovation Sustainability & integrity Empowerment and respect Manage for results 37
Slide 38: 3. Targets 2020
3. TARGETS 2020 ® BUILDING TRUST Bs
Slide 39: Strategic Targets 2020
SIKA’S GROWTH MODEL WILL DELIVER 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 39
Slide 40: More Than CHF 1 Billion EBIT in 2020
SIKA’S GROWTH MODEL WILL DELIVER MORE THAN CHF 1 BILLION EBIT IN 2020 Megatrends Urbanization, New Vehicle Design and Sustainability drive growth Fragmented market of CHF 80 billion with huge growth opportunities Sika is ideally positioned to profit from all phases of the construction life- cy
Slide 41: 4. Outlook
4. OUTLOOK ® BUILDING TRUST Bs
Slide 42: Confirmation of Outlook
CONFIRMATION OF OUTLOOK SALES TO EXCEED CHF 6 BILLION IN 2017 6-8% sales growth in local currencies Sales to exceed CHF 6 billion for the first time Disproportionately higher rise in margins with operating profit (EBIT) between CHF 880 and 900 million Opening of 8 new plants Foundation of
Slide 43: 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
Slide 44: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION