Sika Ag · SIX:SIKA
Sika — ESG Presentation (November 2019)
66 slides from Sika's sustainability presentation, November 2019
Slide 1: Sika – Committed to Sustainable Performance
SIKA – COMMITTED TO SUSTAINABLE PERFORMANCE NOVEMBER 2019
Slide 2: Table of Content
TABLE OF CONTENT 1 GOVERNANCE - STRUCTURES AND RESPONSIBILITIES IN PLACE 2 STRONG CORPORATE CULTURE 3 REMUNERATION – WELL-BALANCED COMPENSATION SYSTEM 4 SIKA IS COMMITTED TO SUSTAINABILITY 5 SOCIAL RESPONSIBILITY 2
Slide 3: Governance - Structures and Responsibilities in Place
GOVERNANCE - STRUCTURES AND RESPONSIBILITIES IN PLACE
Slide 4: Corporate Governance: Commitment to Openness and Transparency
CORPORATE GOVERNANCE COMMITMENT TO OPENNESS AND TRANSPARENCY Good Corporate Governance safeguards the sustainable development and performance of the company. Sika is committed to openness and transparency and provides information on structures and processes, areas of responsibility and decision proc
Slide 5: Corporate Governance: Compliant with Standards and Regulations
CORPORATE GOVERNANCE COMPLIANT WITH STANDARDS AND REGULATIONS Corporate Governance at Sika: Adheres to the SIX Swiss Exchange’s Directive on Information Relating to Corporate Governance Follows the principles of the Swiss Code of Best Practice for Corporate Governance Aligned with various inte
Slide 6: Corporate Governance Framework: Structures and Responsibilities
CORPORATE GOVERNANCE FRAMEWORK STRUCTURES AND RESPONSIBILITIES ARTICLES OF ASSOCIATION CODE OF CONDUCT VALUES & PRINCIPLES ORGANIZATIONAL RULES ANNUAL GENERAL MEETING BOARD OF DIRECTORS CEO ASIA/PACIFIC EMEA AMERICAS GLOBAL BUSINESS FINANCE CONSTRUCTION TECHNOLOGY INDUSTRY LEGAL HR & COMPLIANCE PROC
Slide 7: Code of Conduct: Integrity and Ethical Conduct
CODE OF CONDUCT INTEGRITY AND ETHICAL CONDUCT ARE PART OF THE SIKA CULTURE Available in 37 languages Directly linked to Sika’s Values and Principles Read and signed by every new employee Commitment renewed bi-annually by Sika Senior Management Anonymous reporting system, Sika Trust Line, i
Slide 8: Board Composition and Succession Planning
BOARD RESPONSIBILITIES BOARD COMPOSITION AND SUCCESSION PLANNING The Nomination and Compensation Committee (NCC) holds the responsibility for the succession planning. The duties of NCC includes: Identification and assessment of potential candidates to positions on the Board based on predefined cri
Slide 9: Board Composition and Succession Planning: Skills Matrix
BOARD RESPONSIBILITIES BOARD COMPOSITION AND SUCCESSION PLANNING The composition of the Board of Directors should represent the necessary skills, qualifications, and diversity to be able to perform the required duties. The Board skills matrix is used as a tool to evaluate existing and potential Boar
Slide 10: Board Responsibilities: Risk Management
BOARD RESPONSIBILITIES RISK MANAGEMENT All risks are assessed in terms of a few basic questions: Is the risk global or regional in scope? What implications does the risk have for the Group? How high is the probability of losses occurring? What measures need to be implemented to prevent the
Slide 11: Risk Management Along the Entire Value Chain
RISK MANAGEMENT RISK MANAGEMENT ALONG THE ENTIRE VALUE CHAIN Sika pursues a risk-based management approach along the entire value chain, from procurement and production, to marketing. Environmental, social and governance risks are considered at all stages of the value chain. Supplier management and
Slide 12: Risk Management Along the Entire Value Chain (continued)
RISK MANAGEMENT RISK MANAGEMENT ALONG THE ENTIRE VALUE CHAIN Product development and marketing For products and services, Sika implements a structured Product Development Process that factors in potential risks. The Group monitors ecological and safety aspects during the development, production, and
Slide 13: Capital Allocation for Sustainable Growth
BOARD RESPONSIBILITIES CAPITAL ALLOCATION FOR SUSTAINABLE GROWTH The strategic planning of capital allocation aims to ensure the sustainable growth of Sika. It is a well-balanced approach which considers the interests of all stakeholders and all drivers for growth and profitability. Investments in
Slide 14: Reliable, Continuous Dividend Payout
CAPITAL ALLOCATION RELIABLE, CONTINUOUS DIVIDEND PAYOUT Sika’s growth strategy is sustainable. Sales and profits have continuously increased over the past few years. Shareholders benefit as Sika has been able to raise the dividend year after year. Consistent dividend payout is a sign of the reliabil
Slide 15: Strong Corporate Culture
STRONG CORPORATE CULTURE ® BUILDING TRUST Bs
Slide 16: Sika's Values and Principles
STRONG CORPORATE CULTURE SIKA’S VALUES AND PRINCIPLES Customer first Courage for innovation Sustainability & integrity Empowerment and respect Manage for results Sika’s Values and Principles are the foundation for the Code of Conduct. They are put into action through strong leadership and
Slide 17: Values and Principles: Customer First
VALUES AND PRINCIPLES CUSTOMER FIRST Listen to customers, understand their needs and provide them with solutions that give them a real advantage – keep customer’s success in mind Provide and maintain highest quality standards Build long-lasting and mutually beneficial relationships Provide p
Slide 18: Values and Principles: Courage for Innovation
VALUES AND PRINCIPLES COURAGE FOR INNOVATION Sustainability is an integral part of the innovation process and development of new products Innovation management with focus on the Sika Product Creation Process Close alignment with customer and market needs Actively challenge and accept being c
Slide 19: Values and Principles: Sustainability & Integrity
VALUES AND PRINCIPLES SUSTAINABILITY & INTEGRITY Comply with Sika’s Code of Conduct Consider “More Value Less Impact” as a guiding rule in daily business Act with respect and responsibility towards customers, employees, and other stakeholders Operate with strong focus on safety, quality, env
Slide 20: Values and Principles: Empowerment & Respect
VALUES AND PRINCIPLES EMPOWERMENT & RESPECT Decentralized, flat organization, decision power delegated as close to the customer as possible Believe in the competence and entrepreneurial spirit of employees Train and develop local people. Mainly local management running country organizations. (
Slide 21: Values and Principles: Manage for Results
VALUES AND PRINCIPLES MANAGE FOR RESULTS Aim for success, outstanding results and outperformance Pursue vision and targets with long-term view Functions and projects are clearly assigned, clear accountability Transparent performance management focused on well-defined KPIs Benchmarking/Best
Slide 22: High Employee Loyalty and Engagement
STRONG CORPORATE CULTURE HIGH EMPLOYEE LOYALTY AND ENGAGEMENT Sika Senior Management roles are normally filled in-house or with managers joining from acquisitions The long-term employee prospects and the corporate culture are among the reasons behind Sika’s low fluctuation rate of 6.9% (2017: 6.
Slide 23: Global but Local: Sika Strategy and Decentralized Implementation
GLOBAL BUT LOCAL THE SIKA STRATEGY AND ITS DECENTRALIZED IMPLEMENTATION 8 8 23
Slide 24: Diversity: One of Sika's Success Factors
DIVERSITY ONE OF SIKA’S SUCCESS FACTORS SIKA FIRMLY BELIEVES THAT THE DIVERSITY EXPERIENCED BY EMPLOYEES ON A DAILY BASIS IS ONE OF THE FACTORS OF ITS SUCCESS Proportion of women Global presence and associated proximity to 49 nationalities customers make it extremely important to 22.3% among Senior
Slide 25: Gender Diversity: Distribution of Women in Sika
GENDER DIVERSITY DISTRIBUTION OF WOMEN IN SIKA Representation of women in total work force: 22.3% Representation of women according to level Representation of women according to function Above-average Below-average Senior Management representation of women representation of women 9.1% Research & Dev
Slide 26: Gender Diversity: Examples of Initiatives
GENDER DIVERSITY ATTRACT, RETAIN AND PROMOTE – EXAMPLES OF INITIATIVES ATTRACT Communication of strong values and employee testimonials featuring women lead to more applications by women Women@Sales in Latin America: an 18 month traineeship incorporates work experience, technical training, and s
Slide 27: Remuneration – Well-Balanced Compensation System
REMUNERATION – WELL-BALANCED COMPENSATION SYSTEM
Slide 28: Compensation Governance: Governance Principles
COMPENSATION GOVERNANCE: GOVERNANCE PRINCIPLES There are strong governance principles in place WE DO WE DON’T Conduct an annual review of the Provide discretionary compensation payments compensation policy and programs Reward inappropriate or excessive risk taking or Maintain compensation pl
Slide 29: Compensation Governance: Compensation Benchmarking
COMPENSATION GOVERNANCE: COMPENSATION BENCHMARKING The compensation benchmarking for Board and Group Management remuneration is based on a relevant peer group ABB Adecco Barry Callebaut Clariant Geberit Givaudan Kuehne + Nagel LafargeHolcim Lindt Lonza Richemont Schindler SGS Sonova Straumann Swatch
Slide 30: Compensation System of the Board of Directors
COMPENSATION SYSTEM OF THE BOARD OF DIRECTORS To strengthen their independence, members of the Board of Directors receive fixed compensation only, paid in cash and shares restricted for three years Annual board retainer + Annual committee fees 50% in cash - 50% in restricted shares In cash Board cha
Slide 31: Compensation System of the Group Management
COMPENSATION SYSTEM OF THE GROUP MANAGEMENT The compensation system is well-balanced and unique in terms of performance measurement (high proportion of STI and LTI based on performance relative to peers) Performance Time horizon Vehicle Mitigators measurement • Cap on Long-term Absolute + incentives
Slide 32: Total Compensation Approach
TOTAL COMPENSATION APPROACH Compensation decisions are made on the basis of a total compensation approach where target compensation is paid for target performance Target compensation is benchmarked against the market median LTI (target) Outperformance results in above-median compensation due t
Slide 33: Compensation Mix
COMPENSATION MIX The compensation system aligns pay with performance without incentivizing excessive risk taking or encouraging unintended behaviors Pay-for-performance Mitigators Cap on incentives (maximum potential at 150% of target) Claw-back and malus provisions in case of fraudulent behavior or
Slide 34: Short-Term Incentive
SHORT-TERM INCENTIVE The short-term incentive is an annual cash incentive plan rewarding for company and individual performance, which has been successfully in place since 2011 STI STI Payout = x payout target factor Maximum payout factor = 150% Group performance + Individual performance 60% 40% Top
Slide 35: Long-Term Incentive
LONG-TERM INCENTIVE Our long-term incentive is a Performance Share Unit (PSU) plan with 3-year cliff vesting conditional upon ROCE and relative TSR performance LTI PSU Vesting = x vesting granted level Maximum vesting level = 150% Relative TSR + ROCE 50% 50% Relative Absolute 35
Slide 36: Long-Term Incentive: Performance Measurement
LONG-TERM INCENTIVE: PERFORMANCE MEASUREMENT Same approach as in the STI: realistic objective setting and a fair payout formula should align pay and performance and motivate executives to perform outstandingly Payout curve for relative TSR Payout curve for ROCE No vesting below threshold performance
Slide 37: Summary
SUMMARY The Board of Directors is convinced that the current compensation system is appropriate for Sika Compensation of the Board of Directors The compensation system of the Board of Directors strengthens their independence and is aligned with prevalent market practice in Switzerland Governance The
Slide 38: Sika Is Committed to Sustainability
SIKA IS COMMITTED TO SUSTAINABILITY
Slide 39: Sustainable, Profitable Growth
SIKA IS COMMITTED TO SUSTAINABILITY SUSTAINABLE, PROFITABLE GROWTH As a successful global corporation, Sika is committed to sustainability. The company honors its responsibilities by offering sustainable solutions for energy- efficient construction and environmentally friendly vehicles, as well
Slide 40: Sustainability Has Been in Focus for a Long Time
SIKA IS COMMITTED TO SUSTAINABILITY SUSTAINABILITY HAS BEEN IN FOCUS FOR A LONG TIME CDP (Carbon Disclosure Project) disclosure since 2007 Member of UN Global Compact since 2009 Member of the World Business Council for Sustainable Development since 2010 «More Value – Less Impact» Strategy de
Slide 41: Business Principles and Strategic Targets
SUSTAINABILITY AS A BASIC PRINCIPLE OF THE STRATEGY BUSINESS PRINCIPLES AND STRATEGIC TARGETS Business Principles Based on UN SDGs Carbon Emissions / Sustainable Solutions / Operational Efficiency Based on 8 UN Sustainable Development Strategic Goal: Sika will commit to the Science Based Targets
Slide 42: «More Value Less Impact» – Key Moves
SUSTAINABILITY AS A BASIC PRINCIPLE OF THE STRATEGY «MORE VALUE LESS IMPACT» – KEY MOVES Continue with «More Value Less Impact» framework Materiality Analysis 2018 confirmed «More Value Less Impact» Strategy Extended focus areas with enhanced initiatives and target setting Communication framew
Slide 43: Sustainability Targets
SUSTAINABILITY AS A BASIC PRINCIPLE OF THE STRATEGY SUSTAINABILITY TARGETS Overall target: 12% CO2 emission reduction per ton sold Our «More Value Less Impact» targets: SUSTAINABLE SOLUTIONS CLIMATE PERFORMANCE All new product developments with “Sustainable 12% reduction of CO2-emissions per
Slide 44: Implementation of Sustainability Targets
SUSTAINABILITY AS A BASIC PRINCIPLE OF THE STRATEGY IMPLEMENTATION OF SUSTAINABILITY TARGETS Since 2013 2013 2019 October 2019 Q4/2019 As from 2020 2015 2018 Definitition Review of Publication of high Strategy Action Plan Materiality Strategy of reviewed impact More Value for each Sika Analysis More
Slide 45: Governance: Leadership and Responsibilities
GOVERNANCE LEADERSHIP AND RESPONSIBILITIES Board of Directors STRATEGIC LEADERSHIP Internal Sustainability Committee Strategic Steering Decision Authority regarding business requirements OPERATIONAL LEADERSHIP Regional and Local SUPPORT / SUPERVISION Corporate Communications & Planning and running o
Slide 46: Alignment with UN SDGs: Focus on Eight UN SDGs
ALIGNMENT WITH UN SUSTAINABLE DEVELOPMENT GOALS FOCUS ON EIGHT UN SDGs GOOD HEALTH AND WELL-BEING QUALITY EDUCATION CLEAN WATER AND SANITATION DECENT WORK AND ECONOMIC GROWTH Solely use of raw materials that Internal Boost sustainability performance The five strategic pillars, market comply wi
Slide 47: Alignment with UN SDGs: Focus on Eight UN SDGs (continued)
ALIGNMENT WITH UN SUSTAINABLE DEVELOPMENT GOALS FOCUS ON EIGHT UN SDGs INDUSTRY, INNOVATION AND SUSTAINABLE CITIES AND RESPONSIBLE CONSUMPTION 13 CLIMATE ACTION INFRASTRUCTURE COMMUNITIES AND PRODUCTION Megatrend Urbanization Each new product must Each new product must Sustainable innovation
Slide 48: More Value Less Impact – Successful Initiatives
SUSTAINABILITY STRATEGY MORE VALUE LESS IMPACT – SUCCESSFUL INITIATIVES 60% of energy 500,000 m3 water saved in lighting by relamping saved by Sika USA with of factories and warehouses closed-loop water circle in EMEA 49 Sustainability 150 tons of waste Champions trained in Sika per year reused by r
Slide 49: Sustainable Products: Sika ViscoCrete
SIKA OFFERS MANY SUSTAINABLE PRODUCTS AND SOLUTIONS USING LESS WATER, CONCRETE, AND CEMENT WITH Sika® ViscoCrete® HIGH-STRENGTH CONCRETE WITH Sika® ViscoCrete® REDUCES CONCRETE CONSUMPTION AS THINNER CONSTRUCTIONS ARE POSSIBLE Sika® ViscoCrete® TECHNOLOGY ALLOWS FOR Sika® ViscoCrete® TECHNOLOGY REDU
Slide 50: Sustainable Products: Lightweight and Electric Vehicles
SIKA OFFERS MANY SUSTAINABLE PRODUCTS AND SOLUTIONS ENABLING CONSTRUCTION OF LIGHTWEIGHT AND ELECTRIC VEHICLES LIGHTWEIGHT VEHICLE CONSTRUCTION, SIKA SUPPLIES HEAT-CONDUCTIVE ADHESIVES AND MATERIALS TO HELP MULTI-MATERIAL DESIGN, AND ELECTRIC PREVENT OVERHEATING OR FIRE VEHICLES LEAD TO LESS FUEL CO
Slide 51: Sustainable Products: Repair Solutions
SIKA OFFERS MANY SUSTAINABLE PRODUCTS AND SOLUTIONS SIKA REPAIR SOLUTIONS PROLONG THE LIFETIME OF STRUCTURES SIKA SOLUTIONS FOR REPAIR AND REFURBISHMENT STRENGTHEN, WATERPROOF, INSULATE, PROTECT, AND REPAIR BUILDINGS AND STRUCTURES SIKA REPAIR SYSTEMS PROLONGS LIFETIME, INCREASE SAFETY AND ENERGY EF
Slide 52: Sustainable Products: Waterproofing Systems
SIKA OFFERS MANY SUSTAINABLE PRODUCTS AND SOLUTIONS SIKA WATERPROOFING SYSTEMS PROTECTING AND SAVING WATER SIKA WATERPROOFING SYSTEMS PREVENT LEAKAGE AND CONTAMINATION OF DRINKING WATER IN WATER RESERVOIRS SIKA WATERPROOFING SYSTEMS RESISTANT TO AGGRESSIVE SUBSTANCES IN WASTE WATER TREATMENT PLANTS,
Slide 53: Sustainable Products: Energy-Saving Roofing Solutions
SIKA OFFERS MANY SUSTAINABLE PRODUCTS AND SOLUTIONS ENERGY-SAVING, DURABLE ROOFING SOLUTIONS SIKA SUPPLIES HIGHLY DURABLE, ROOT RESISTANT MEMBRANES FOR GREEN ROOFS REDUCE URBAN HEAT ISLAND EFFECT AND IMPROVE AIR QUALITY INSULATING QUALITIES LEAD TO ENERGY SAVINGS NOISE POLLUTION REDUCTION SU
Slide 54: Innovation – More Performance, More Sustainable
INNOVATION – INCREASED FOCUS ON PRODUCT SUSTAINABILITY MORE PERFORMANCE, MORE SUSTAINABLE PERFORMANCE 54
Slide 55: New Solutions: More Performance - More Sustainable
INNOVATION – INCREASED FOCUS ON PRODUCT SUSTAINABILITY NEW SOLUTIONS: MORE PERFORMANCE - MORE SUSTAINABLE HYDROFLEX SEALANTS NEW EPOXY FLOOR COATINGS HEMP BASED MORTARS Better stretchability, adhesion Improved blushing resistance, Thermal and phonic insulation and application properties significantl
Slide 56: Social Responsibility
SOCIAL RESPONSIBILITY ® BUILDING TRUST Bs
Slide 57: Sika's Social Commitment: Building Trust and Creating Value
SIKA’S SOCIAL COMMITMENT BUILDING TRUST AND CREATING VALUE Community engagement as one of the six Sika Focus on three fields of activity: sustainability target areas Buildings and infrastructure for social and ecological projects Education/children related Ecological water projects 18,000 chil
Slide 58: Community Engagement at Sika: Sika Cares
COMMUNITY ENGAGEMENT AT SIKA SIKA CARES Name Structure Reporting and Communciations Sika Cares Centralized fund Internal Communications Sika’s Community Engagement program (no separate legal entity) External Communications Owner: CEO Trainings and Webinars Thematic Focus Managed by Corpo
Slide 59: Sika Cares: Identifying Stakeholders and Beneficiaries
SIKA CARES IDENTIFYING STAKEHOLDERS AND BENEFICIARIES Stakeholders Beneficiaries Every community engagement project is Direct beneficiaries participate directly in projects, made up of a range of stakeholders. These and benefit from its existence. can include: All persons who will be engaged in th
Slide 60: A New Home for the Langbos Children's Shelter
A NEW HOME FOR THE LANGBOS CHILDREN’S SHELTER PORT ELIZABETH, SOUTH AFRICA ABOUT THE PROJECT A new home was built for the Langbos Children’s Shelter situated near Port Elizabeth. These children are either orphaned or come from unstable homes within the Langbos rural community The design of the
Slide 61: Improving the Quality of Education: ProjeKt Inspire, Tanzania
IMPROVING THE QUALITY OF EDUCATION PROJEKT INSPIRE, TANZANIA ABOUT THE PROJECT Sika Tanzania is supporting “ProjeKt Inspire”, a youth based and youth led initiative aiming at opening career options to younger generations ProjeKt Inspire aims to improve the quality of education through organizing
Slide 62: Broadening Students' Knowledge: Library Project, China
BROADENING STUDENT’S KNOWLEDGE AND HORIZON LIBRARY PROJECT, CHINA ABOUT THE PROJECT Sika China is cooperating with "Library Project", a non- profit charity organization The Library Project is a non-profit charity organization that donates books and libraries to under-financed schools and orphana
Slide 63: Improving the Life Quality of Children: Operation Smile
IMPROVING THE LIFE QUALITY OF CHILDREN OPERATION SMILE, THAILAND/VIETNAM ABOUT THE PROJECT Operation Smile is a nonprofit medical service organization founded in 1982. The organization works as a non-governmental organization to reduce the occurrence of cleft lips and palates worldwide Operati
Slide 64: Preservation of Fresh Water Resources: Drinking Water Project
PRESERVATION OF FRESH WATER RESOURCES DRINKING WATER PROJECT, SOUTH AFRICA ABOUT THE PROJECT The aim of the project is to supply three villages in the Gumbi community in the north of the Somkhanda Game Reserve with clean drinking water. Relief of the Somkhanda Game Reserve and its water sources.
Slide 65: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST ViN
Slide 66: 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