Sika AG · SIX:SIKA

Sika — Investor Presentation (June 2014)

33 slides from Sika's investor presentation, June 2014

  1. Slide 1: Results 2013, Q1 2014 and Strategy 2018

    RESULTS 2013, Q1 2014 AND STRATEGY 2018 SIKA INVESTOR PRESENTATION JUNE 2014

  2. Slide 2: 1. Highlights and Results 2013

    1. HIGHLIGHTS AND RESULTS 2013

  3. Slide 3: Highlights 2013

    HIGHLIGHTS 2013  Record year in sales, profit, operating free cash flow  9.4% sales growth (6.5% in CHF) to CHF 5,142.2 million  Growth momentum in all regions  Sales up 17.2% in emerging markets  23.8% increase in net profit to CHF 344.7 million  Operating free cash flow of CHF 432.7 million

  4. Slide 4: Key Figures: Record Results

    KEY FIGURES RECORD RESULTS in CHF mn 2012 2013 Δ% Net sales 4,828.9 5,142.2 +6.5% Gross results as % of net sales 52.2 52.4 EBITDA 573.1 675.9 +17.9% EBIT 433.0 523.5 +20.9% Net profit 278.5 344.7 +23.8% Operating free cash flow 302.5 432.7 + 43.0% ROCE in % 18.5 21.0 4

  5. Slide 5: Sales Growth by Quarter: Dynamic Growth Momentum

    SALES GROWTH BY QUARTER DYNAMIC GROWTH MOMENTUM 17.8% Net sales 12 month rolling 9.6% 10.6% 8.2% 3.3% 1.2% at constant currency 7.0% 7.3% 8.2% acquisition organic -0.2% +1.1% -1.3% in CHF mn Q1 Q2 Q3 Q4 Quarterly sales 1,043.1 1,359.4 1,405.2 1,334.5 5

  6. Slide 6: Sales Growth by Region

    SALES GROWTH BY REGION +2.3% + 8.5% + 12.7% 711 North America + 15.1% 2,470 974 EMEA Asia/Pacific 623 2012 2013 Latin America (Growth at constant FX) 6

  7. Slide 7: EBIT by Region

    EBIT BY REGION (in CHF mn) 267 17.7% 13.8% 134 11.4% 110 10.8% 81 EMEA North America Asia/Pacific Latin America 2012 2013 7

  8. Slide 8: 17.2% Growth in Emerging Markets

    EMERGING MARKETS 17.2% GROWTH IN EMERGING MARKETS Net sales 1990: CHF 1,095 million Net sales 2013: CHF 5,142 million 38% 9% 62% 91% Mature markets Emerging markets 8

  9. Slide 9: Accelerated Build-up of Emerging Markets Investments in 2013

    ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS IN 2013 Opening of first Sika plant:  Laos (Xayaburi, March 2013)  Iraq (Erbil, June 2013)  Ukraine (Kiev, June 2013)  Angola (Luanda, November 2013) Iraq Ukraine 9

  10. Slide 10: Accelerated Build-up of Emerging Markets Investments in 2013

    ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS IN 2013  3rd plant in Russia (St. Petersburg, March 2013)  4th plant in Colombia (Barranquilla, May 2013)  2nd plant in South Africa (Johannesburg, June 2013)  11th plant in China (Chongqing, August 2013)  2nd plant in Vietnam (Hanoi, Septemb

  11. Slide 11: Leading Role in Market Consolidation: Acquisitions 2013

    LEADING ROLE IN MARKET CONSOLIDATION ACQUISITIONS 2013 Company Country Target Market LCS Optiroc Singapore, Flooring Malaysia Refurbishment Building Adhesives Business of Netherlands Sealing & Bonding AkzoNobel Flooring, Refurbishment Radmix Resources Pty Ltd and ASF Australia Concrete Pty Ltd JMTex

  12. Slide 12: Net Working Capital: Continuing Improvement

    NET WORKING CAPITAL CONTINUING IMPROVEMENT at actual FX rates in CHF mn 2011 YE 2012 YE 2013 YE Net sales 4,563.7 4,828.9 5,142.2 = Total NWC year end 904.9 901.0 888.7 In % NS 19.8 % 18.7 % 17.3 % at constant FX rates 20.9 20.1 19.6 19.1 18.5 2009 2010 2011 2012 2013 12

  13. Slide 13: 2. Performance First Quarter 2014

    2. PERFORMANCE FIRST QUARTER 2014

  14. Slide 14: Growth Momentum Continues in Q1

    GROWTH MOMENTUM CONTINUES IN Q1 23.3% SALES GROWTH (15.6% IN CHF) +5.8% + 31.0% 136 +22.5% North America + 17.1% 222 609 Asia/Pacific EMEA 139 Latin America 2013 2014 (growth at constant exchange rates, in million CHF) Growth of 20.6% in Emerging Markets 14

  15. Slide 15: Sales Growth by Region: All Regions Contributed

    SALES GROWTH BY REGION ALL REGIONS CONTRIBUTED + 31.0 % + 5.8 % + 22.5 % + 17.1 % Growth (at constant FX) - 3.4 % - 5.1 % - 12.8 % - 19.2 % FX impact + 17.6 % + 0.0 % + 3.9 % + 3.0 % Acquisition 609 136 222 139 EMEA North Asia/Pacific Latin America America 15

  16. Slide 16: Continuing Expansion: Acquisitions 2014 YTD

    CONTINUING EXPANSION ACQUISITIONS 2014 YTD Company Country Target Market Lwart Química Ltda. Brazil Waterproofing, Roofing Manufacturing facility for flooring South Korea Flooring and coating products Klebag Chemie AG Switzerland Sealing & Bonding, Flooring Total sales: CHF 50 million 16

  17. Slide 17: 3. Strategy 2018

    3. STRATEGY 2018 ® BUILDING TRUST Bs

  18. Slide 18: Attractive Industry and Markets

    ATTRACTIVE INDUSTRY AND MARKETS 18

  19. Slide 19: Attractive Industry and Markets: Significant Growth Potential

    ATTRACTIVE INDUSTRY AND MARKETS SIGNIFICANT GROWTH POTENTIAL Market Volume 2013 Market Volume 2018* CHF 60 billion > CHF 70 billion Industry Concrete Industry Concrete Water- Refurbish- Water- Refurbish- proofing proofing ment ment Roofing Roofing Sealing & Sealing & Bonding Flooring Bonding Floorin

  20. Slide 20: Growing Demand for Sika Products: Urbanization and Megacities

    GROWING DEMAND FOR SIKA PRODUCTS URBANIZATION AND MEGACITIES  Increasing world population fuels construction markets  Higher demand for performance / specialty concrete  More waterproofing solutions needed  Functional sealing and building envelopes  Innovative roofing solutions  Increased safe

  21. Slide 21: Growing Demand for Sika Products: Lighter, Safer Vehicles

    GROWING DEMAND FOR SIKA PRODUCTS TREND FOR LIGHTER, SAFER VEHICLES  New materials like carbon fiber require bonding solutions  Composite body structures need bonding instead of welding  Adhesives enable stiffer, lighter, safer metal structures  Modular production concepts are based on fast, high

  22. Slide 22: Growing Demand for Sika Products: Sustainability

    GROWING DEMAND FOR SIKA PRODUCTS TREND FOR SUSTAINABILITY  More efficient use of limited natural resources and energy («green cities»)  Demand for longer life cycles of infrastructure and buildings  Demand for low-energy housing  Drive towards higher recyclability of materials  Demand for safe-

  23. Slide 23: Fragmented Global Industry Offers Significant Growth Potential

    FRAGMENTED GLOBAL INDUSTRY OFFERS SIGNIFICANT GROWTH POTENTIAL Construction Chemical Market 2013 > CHF 50 billion Sika Competitor 1 Competitor 2 Competitor 3 Top 5 companies Competitor 4 with 26% Others market share 23

  24. Slide 24: Sika's Position & Competitive Advantages

    SIKA’S POSITION & COMPETITIVE ADVANTAGES 24

  25. Slide 25: Focus on Target Markets

    FOCUS ON 7 TARGET MARKETS With our core competencies bonding, sealing, damping, reinforcing and protecting Concrete Waterproofing Roofing Flooring Sealing & Bonding Refurbishment Industry 25

  26. Slide 26: Strong Global Position: Competitive Advantages for Profitable Growth

    STRONG GLOBAL POSITION: COMPETITIVE ADVANTAGES FOR PROFITABLE GROWTH  World market leader in construction chemicals  Leading adhesive producer for industrial markets  Successful focus on innovation (73 patents in 2013)  First mover in emerging markets (38% of sales)  Global footprint with over

  27. Slide 27: Growth Model and Targets 2018

    GROWTH MODEL AND TARGETS 2018 27

  28. Slide 28: Strategy 2018: Sika's Growth Model Will Deliver

    STRATEGY 2018 SIKA’S GROWTH MODEL WILL DELIVER 1. Market penetration - from roof to floor (cross selling, 7 target markets, KPM) - from new-build to refurbishment (life-cycle management) - push and pull market channels (specification, branding) 2. Global technology leadership with continuous innovat

  29. Slide 29: Strategy 2018 Targets

    STRATEGY 2018 TARGETS  Annual sales growth of 6% to 8% (at constant exchange rates, including acquisitions)  Emerging markets with 42% to 45% of group sales by 2018  Operating profit (EBIT) above 10% of net sales  Operating free cash flow above 6% of net sales  ROCE above 20%  Maintain A- rati

  30. Slide 30: 4. Outlook

    4. OUTLOOK BUILDING TRUST

  31. Slide 31: Outlook 2014

    OUTLOOK 2014  Sika expects 6 – 8% sales growth (at constant exchange rates)  Continued build-up of growth markets with 8 new factories  Asia/Pacific: double-digit growth expected in China and Southeast Asia, stable volumes in Japan, Korea and Pacific  Latin America: double-digit growth expected

  32. Slide 32: Forward-Looking Statements

    FORWARD-LOOKING STATEMENTS 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

  33. Slide 33: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

Sika — Investor Presentation (June 2014) on 6ix