Sika Ag · SIX:SIKA
Sika — Q1 2024 Earnings Presentation
39 slides from Sika's earnings presentation, Apr 16, 2024
Slide 1: Strong start to the year – record sales and high double-digit growth in the first quarter
STRONG START TO THE YEAR – RECORD SALES AND HIGH DOUBLE-DIGIT GROWTH IN THE FIRST QUARTER SIKA COMPANY PRESENTATION Q1 2024 APRIL 16, 2024
Slide 2: Agenda
1. HIGHLIGHTS Q1 2024 2. SUCCESSFUL MBCC ACQUISITION 3. PROFITABLE GROWTH STRATEGY 2028 4. MARKET PENETRATION GROWTH 5. OUTLOOK
Slide 3: Agenda
1. HIGHLIGHTS Q1 2024 2. SUCCESSFUL MBCC ACQUISITION 3. PROFITABLE GROWTH STRATEGY 2028 4. MARKET PENETRATION GROWTH 5. OUTLOOK
Slide 4: Highlights Q1 2024 – strong start to the year
HIGHLIGHTS Q1 2024 STRONG START TO THE YEAR ▪ High, double-digit growth of +20.1% in local currencies ▪ Q1 sales of CHF 2,648.0 million (+13.8% in CHF) ▪ Acquisition effect of 19.9% ▪ Negative currency effect of –6.3% ▪ Acquisition of Kwik Bond in the USA ▪ Outlook for fiscal 2024 confirmed o Sales
Slide 5: Record sales and double-digit growth in Q1
SIKA WITH STRONG START TO THE YEAR RECORD SALES AND DOUBLE-DIGIT GROWTH IN Q1 +21.1 % +22.4 % +14.1 % +20.1 % 0.90 1.21 0.53 2.65 AMERICAS EMEA Asia/Pacific GROUP Q1 2023 Q1 2024 (in CHF billion, growth in LC) 5
Slide 6: Record sales and double-digit growth in all regions
SIKA WITH STRONG START TO THE YEAR RECORD SALES AND DOUBLE-DIGIT GROWTH IN ALL REGIONS +16.8% +16.6% +3.7% Growth in CHF +22.4% +21.1% +14.1% Growth in LC -5.6% -4.5% -10.4% FX impact +22.2% +20.7% +14.1% Acquisition 16% 84% Construction Automotive and Industry EMEA Americas Asia/Pacific 6
Slide 7: Continuous investments in future growth
CONTINUOUS INVESTMENTS IN FUTURE GROWTH KEY INVESTMENTS IN 2024 Sika has acquired Kwik Bond Polymers, LLC (KBP), a manufacturer of polymer systems for the refurbishment of concrete infrastructure in the United States. (April 2024) 7
Slide 8: Highlights 2023 – balanced business mix
HIGHLIGHTS 2023 – BALANCED BUSINESS MIX GLOBAL FOOTPRINT IN VERTICAL MARKETS 20% 30% RESIDENTIAL INFRASTRUCTURE 35% 15% COMMERCIAL AUTOMOTIVE & INDUSTRY 8
Slide 9: Highlights 2023 – balanced business mix, global footprint
HIGHLIGHTS 2023 – BALANCED BUSINESS MIX GLOBAL FOOTPRINT EMERGING MARKETS 41% 59% REFURBISHMENT MATURE MARKETS 45% 55% NEW BUILD 9
Slide 10: Strong topline development over the years
STRONG TOPLINE DEVELOPMENT OVER THE YEARS WITH OVER-PROPORTIONAL PROFITABILITY GROWTH Net sales +9.7% in CHF +14.5% EBIT 1.8 +12.2% in CHF CAGR 15.0% CAGR +15.8% +3.4% 1.6 10 14.2% +17.1% 15.0% 1.4 +16.3% +3.4% 8 14.4% 1.2 11.2 1.7 13.4% 13.0% 1.0 6 0.8 4 0.6 2018 2019 2020 2021 2022 2023 2018 2019
Slide 11: Sika gaining market share over the years, outgrowing peers
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 12: Agenda
1. HIGHLIGHTS Q1 2024 2. SUCCESSFUL MBCC ACQUISITION 3. PROFITABLE GROWTH STRATEGY 2028 4. MARKET PENETRATION GROWTH 5. OUTLOOK
Slide 13: Successful integration of MBCC acquisition
SUCCESSFUL INTEGRATION OF MBCC ACQUISITION STRONGER TOGETHER AS ONE SIKA 6,000 additional employees CHF 2.1 bn ONE additional sales SIKA STRONG product portfolio 13
Slide 14: Synergy target raised to CHF 180–200 million p.a. by 2026
SUCCESSFUL INTEGRATION OF MBCC ACQUISITION SYNERGY TARGET RAISED TO CHF 180–200 MILLION P.A. BY 2026 180 to 200 140 to 160 80 to 100 41 2023 2024 2025 2026 (in CHF million) 14
Slide 15: Strong team spirit in the execution phase
SUCCESSFUL INTEGRATION OF MBCC ACQUISITION STRONG TEAM SPIRIT IN THE EXECUTION PHASE ▪ Regular steering and alignment meetings to continue ▪ 3rd pulse check survey continues to show high engagement 15
Slide 16: Agenda
1. HIGHLIGHTS Q1 2024 2. SUCCESSFUL MBCC ACQUISITION 3. PROFITABLE GROWTH STRATEGY 2028 4. MARKET PENETRATION GROWTH 5. OUTLOOK
Slide 17: 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 17 Note: Historical Sales represent actual CHF values, growth figures in LC
Slide 18: 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 18
Slide 19: 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 20: 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 20
Slide 21: Agenda
1. HIGHLIGHTS Q1 2024 2. SUCCESSFUL MBCC ACQUISITION 3. PROFITABLE GROWTH STRATEGY 2028 4. MARKET PENETRATION GROWTH 5. OUTLOOK
Slide 22: 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 22
Slide 23: 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 24: Key geographic market – Japan
KEY GEOGRAPHIC MARKET – JAPAN DYNAMIC AND PROFITABLE GROWTH A fertile market for high-performance solutions Strict regulations in earthquake zones create opportunities for high- tech building materials in densely populated areas Ongoing urban densification requires major investments in engineering a
Slide 25: 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 25
Slide 26: 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 27: Population growth – increasing urban connectivity
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 28: Population growth – hydropower
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 29: Urbanization – infrastructure densification
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 30: Urbanization – repair and refurbishment
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 30
Slide 31: Resource scarcity – building a sustainable future
RESOURCE SCARCITY – BUILDING A SUSTAINABLE FUTURE SAVING SAND Lower grade, recycled, or manufactured sand without compromising quality Sika’s reCO2ver® the sand to be reused in the production of concrete and mortars Worldwide R&D in the field of sand saving Sika China’s goal: to substitute 50% of it
Slide 32: Resource scarcity – skills shortage
RESOURCE SCARCITY – SKILLS SHORTAGE QUICK AND EASY-TO-APPLY SOLUTIONS AND TECHNOLOGIES Easy-to-apply products and technologies enable projects to be completed more simply, efficiently, and quickly Products designed with health and safety focus reduce physical effort for application 32
Slide 33: Technological progress – e-mobility and battery storage
TECHNOLOGICAL PROCESS – E-MOBILITY AND BATTERY STORAGE IMPROVING EFFICIENCY AND INNOVATING THE FUTURE 200 million cars will be electric by 2028 Sika has full range of technologies ▪ Thermal conductive adhesive and gap filler ▪ Reinforcement and protection ▪ Lightweighting CHF 250 million grow ambiti
Slide 34: Growth driver digitalization and automation
GROWTH DRIVER DIGITALIZATION AND AUTOMATION HELPING CUSTOMERS INCREASE QUALITY AND EFFICIENCY Digital products and solutions boosting customer satisfaction and loyalty, and driving sustainable growth ▪ Apps (raw material analysis, concrete mix-design, etc.) ▪ IoT systems (sensors for concrete struct
Slide 35: People & culture – driving engagement and innovation
PEOPLE & CULTURE – DRIVING ENGAGEMENT AND INNOVATION HIGHLY ENGAGED AND EMPOWERED EMPLOYEES With its performance- oriented culture, Sika unleashes the full potential of global diversity 35
Slide 36: Growth driver – construction chemicals market
GROWTH DRIVER – CONSTRUCTION CHEMICALS MARKET STRONG PENETRATION INCREASE Construction chemicals penetration (1991 = 100) 600 500 400 Fantastic 300 growth 200 opportunities 100 2x penetration increase 2.5–4.0x penetration increase 0 1990 2000 2010 2020 2030 2040 2050 Source: IHS, Freedonia 36 1) pen
Slide 37: Agenda
1. HIGHLIGHTS 2023 2. SUCCESSFUL MBCC ACQUISITION 3. PROFITABLE GROWTH STRATEGY 2028 4. MARKET PENETRATION GROWTH 5. OUTLOOK
Slide 38: 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% 38
Slide 39: Thank you for your attention
THANK YOU FOR YOUR ATTENTION Bs BUILDING TRUST