Slide 1: Sika defies coronavirus crisis with growth in local currencies of 2.9%
SIKA DEFIES CORONAVIRUS CRISIS WITH GROWTH IN LOCAL CURRENCIES OF 2.9% SIKA COMPANY PRESENTATION JULY 23, 2020
Slide 2: Half-Year Results 2020
HALF-YEAR RESULTS 2020 ® BUILDING TRUST By
Slide 3: Growth in local currencies of 2.9% - Highlights first half year 2020
GROWTH IN LOCAL CURRENCIES OF 2.9% HIGHLIGHTS FIRST HALF YEAR 2020 1. Sales and profit ▪ Sales growth of 2.9% in local currencies. Sales of CHF 3,614.6 million (-3.2% in CHF) ▪ High negative currency effect of -6.1% (impact of CHF 225 million in sales and CHF 29 million in EBIT) ▪ Maintained high EB
Slide 4: Key figures first half 2020
KEY FIGURES FIRST HALF 2020 INCREASED OPERATING FREE CASH FLOW in CHF mn 2019 2020 Δ% Net sales 3,732.4 3,614.6 -3.2% Gross results as % of net sales 53.8 54.6 EBITDA 623.8 593.6 -4.8% EBIT 481.7 410.2 -14.8% Net profit 330.7 275.6 -16.7% Operating free cash flow 179.7 254.7 +41.7% 4
Slide 5: First half sales growth
FIRST HALF SALES GROWTH 2.9% SALES GROWTH IN LOCAL CURRENCIES IN THE FIRST HALF 2020 13.9% 9.6% 7.1% 6.5% 2.9% 6.8% 3.1% 13.4% in LC acquisition -10.5% organic in CHF mn 1 HY 2018 1 HY 2019 1 HY 2020 Sales 3,470.1 3,732.4 3,614.6 5
Slide 6: Sales first half 2020 by region
SALES FIRST HALF 2020 GROWTH IN LOCAL CURRENCIES IN EMEA, AMERICAS, ASIA/PACIFIC -2.6% -4.5% +16.3% -28.5% Growth in CHF +3.2% +2.6% +21.8% -23.1% Growth in LC -5.8% -7.1% -5.5% -5.4% FX impact +11.7% +11.4% +30.8% +0.0% Acquisition 18% 82% Construction Industry 6 EMEA Americas Asia/Pacific Global B
Slide 7: Substantial impact of the coronavirus pandemic
SUBSTANTIAL IMPACT OF THE CORONAVIRUS PANDEMIC 2.9% SALES GROWTH (-3.2% IN CHF) FOR FIRST HALF 2020 +3.2% +21.8% -23.1% +2.6% 942 747 342 Americas 1,584 Asia/Pacific Global Business EMEA 6M 2019 6M 2020 (in CHF mn, growth in LC) 7
Slide 8: Sika's growth model impacted by the coronavirus pandemic
SIKA’S GROWTH MODEL IMPACTED BY THE CORONAVIRUS PANDEMIC (HALF YEAR) Net NETSales SALES Net EBITProfit NET SALES in CHF mn in CHF mn, Growth in LC +10.9% +2.9% +13.9% +8.1% 3,614.6 +7.6% 410.2 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 8
Slide 9: Fast and successful integration of Parex
FAST AND SUCCESSFUL INTEGRATION OF PAREX EXCELLENT PROGRESS TOTAL SYNERGIES TOTAL COST CHF 30 MILLION+ Around CHF 100 SYNERGIES Run rate synergies million identified CHF 55 million achieved to date PRODUCT SHOP IN SHOP CROSS-SELLING LAUNCHES concept 500+ initiatives tracked, 34 new products launched
Slide 10: Strategy Overview
STRATEGY OVERVIEW ® BUILDING TRUST By
Slide 11: High market potential: construction chemicals market will grow to CHF 80 billion
HIGH MARKET POTENTIAL CONSTRUCTION CHEMICALS MARKET WILL GROW TO CHF 80 BILLION Construction chemicals market 2020 Construction chemicals market 2025 Approx. CHF 70 billion Approx. CHF 80 billion Sika 12% Sika 9% +2.5% p.a. Others 58% market growth Others 88% Top 12:… 11
Slide 12: Urbanization and growth unlocking further potential
URBANIZATION AND GROWTH UNLOCKING FURTHER POTENTIAL An estimated 55% of the world population lives in megacities Annual infrastructure investment of USD 400 BN is needed in the USA to support population growth 12
Slide 13: Urbanization and growth unlocking further potential
URBANIZATION AND GROWTH UNLOCKING FURTHER POTENTIAL An estimated ▪ Manufacturing and distribution boom ▪ Transition from “Brick & Mortar” to 55% eCommerce of the world population lives ▪ Investments in everything from Civil in megacities Infrastructure to Data Centers Annual infrastructure investmen
Slide 14: High market penetration: project penetration through cross-selling
HIGH MARKET PENETRATION PROJECT PENETRATION THROUGH CROSS-SELLING 14
Slide 15: Growth model with early market penetration
GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW-BUILD TO REFURBISHMENT Long-term SIKA HAS SOLUTIONS FOR ALL MARKETS market potential Sika Repair and Sika’s market potential refurbishment Higher building standards Infrastructure Emerging markets Developing markets Mature markets 15
Slide 16: Sika's growth strategy 2023: the pillars of the strategy
SIKA’S GROWTH STRATEGY 2023 THE PILLARS OF THE STRATEGY SUSTAINABILITY Market Penetration 6-8% annual growth 15-18% EBIT margin Until 2020: <15% Innovation Operational Efficiency 25% of sales with new >10% products Operating free cash flow per year as % of net sales Acquisitions 0.5% pts non-materia
Slide 17: Sustainable strategy: more value, less impact
SUSTAINABLE STRATEGY MORE VALUE, LESS IMPACT - SUSTAINABILITY TARGETS SUSTAINABLE SOLUTIONS CLIMATE PERFORMANCE COMMUNITY ENGAGEMENT We are leading the industry by pioneering a We run our business in a responsible way and We build trust and create value – with comprehensive portfolio of customer foc
Slide 18: 25% of sales with new products
25% OF SALES WITH NEW PRODUCTS INNOVATION AS KEY GROWTH AND PROFIT DRIVER Innovation Target 2023 ▪ Market penetration with Major New Product Developments 25% of innovative products sales with new products ▪ Higher profitability with Key Updates released in the products offering unique past 5 years U
Slide 19: Strong innovation pipeline: more performance, more sustainable
STRONG INNOVATION PIPELINE MORE PERFORMANCE – MORE SUSTAINABLE PERFORMANCE 19
Slide 20: Sika offers many sustainable products and solutions: 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 21: Sika repair solutions prolong the lifetime of structures
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 22: Sika waterproofing systems protecting and saving water
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 23: Energy-saving, durable 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 24: Strong innovation pipeline: new solutions
STRONG INNOVATION PIPELINE NEW SOLUTIONS: MORE PERFORMANCE – MORE SUSTAINABLE HYDROFLEX SEALANTS NEW EPOXY FLOOR COATINGS HEMP-BASED, CEMENT-FREE MORTARS Better stretchability, adhesion Improved blushing resistance, Thermal and phonic insulation and application properties significantly reduced yello
Slide 25: Sika at the forefront of construction
SIKA AT THE FOREFRONT OF CONSTRUCTION NEW TECHNOLOGIES CHANGE THE INDUSTRY Sika’s structural glazing changed Sika’s concrete admixtures make the industry in 2000 supertall skyscrapers possible © 6sqft The Gherkin, London One Vanderbilt, New York Digitalization and industrialization of construction w
Slide 26: Current Situation
CURRENT SITUATION ® BUILDING TRUST By
Slide 27: All Sika countries affected by coronavirus pandemic
ALL SIKA COUNTRIES AFFECTED BY CORONAVIRUS PANDEMIC 35 COUNTRIES IN FULL LOCKDOWN FOR AROUND TWO MONTHS 27
Slide 28: Measures addressing pandemic situation: maintain high flexibility
MEASURES ADDRESSING PANDEMIC SITUATION MAINTAIN HIGH FLEXIBILITY Measures ▪ General ▪ Strong local management teams in the countries Operational ▪ Preparation and response according to local situation which differs from country to Agility country, scenario planning ▪ Taking advantage of local suppor
Slide 29: Outlook
OUTLOOK ® BUILDING TRUST By
Slide 30: Outlook: continuation of successful growth strategy
OUTLOOK CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Confirmation of 2023 strategic targets for sustainable, profitable growth ▪ In June, Sika has seen a further improving trend in construction markets and sales volumes are steadily returning to normal levels. Global construction activity is gaining
Slide 31: Thank you for your attention
al THANK YO U 4 FOR YOUR ATTENTION 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