Sika Ag · SIX:SIKA
Sika — Investor Presentation (April 2022)
50 slides from Sika's investor presentation, April 2022
Slide 1: Sika Investor Presentation April 2022
OUR YEAR 2021 – RECORD RESULTS IN SALES, EBIT, AND PROFIT STRONG START TO THE YEAR 2022 SIKA INVESTOR PRESENTATION APRIL 2022
Slide 2: Agenda
1. SALES FIRST QUARTER 2022 2. HIGHLIGHTS 2021 3. SIKA’S GROWTH DRIVERS 4. FINANCIAL RESULTS 5. UPDATE ON MBCC ACQUISITION 6. OUTLOOK
Slide 3: 1. Sales First Quarter 2022
1. SALES FIRST QUARTER 2022 ® BUILDING TRUST By
Slide 4: Highlights Q1 2022: Record Sales in the First Quarter
HIGHLIGHTS Q1 2022 STRONG START TO THE YEAR: RECORD SALES IN THE FIRST QUARTER ▪ Sales increase in local currencies of 21.9% ▪ Sales Q1 of CHF 2,398.2 million (+20.0% in CHF) ▪ Negative currency effect of -1.9% ▪ Acquisition of Sable Marco Inc. in Canada ▪ Closing of transaction related to divestmen
Slide 5: Highlights Q1 2022: Record Sales in All Regions
HIGHLIGHTS Q1 2022 STRONG START TO THE YEAR: RECORD SALES IN ALL REGIONS Q1 2021 Q1 2022 + 18.1% (in CHF billion, growth in LC) + 21.9% + 36.2% + 18.6% + 10.4% 0.66 1.04 0.50 0.20 2.40 Americas EMEA Asia/Pacific Global Business Group 5
Slide 6: 2. Highlights 2021
2. HIGHLIGHTS 2021 ® BUILDING TRUST By
Slide 7: Highlights 2021: Record Results for Sales and Profit
HIGHLIGHTS 2021 RECORD RESULTS FOR SALES AND PROFIT ▪ Record results 2021 ▪ Sales of CHF 9,252.3 million (+17.5%), increase in local currencies +17.1% ▪ CHF 1,391.4 million EBIT (+23.1%) ▪ EBIT margin improved from 14.4% to 15.0% ▪ CHF 1,048.5 million net profit (+27.1%) ▪ Key investments ▪ 7 acquis
Slide 8: Highlights 2021: 52.3% of Electricity from Renewable Sources
HIGHLIGHTS 2021 52.3% OF ELECTRICITY FROM RENEWABLE SOURCES 52.3% -10.1% 34% of electricity from reduction of CO2eq emissions of waste produced renewable sources per ton sold (scope 1 and 2) was recycled 44,188 11.1 -9.7% direct beneficiaries of the hours of training reduction in water Community Eng
Slide 9: Highlights 2021: Record Results for Sales and Profit
HIGHLIGHTS 2021 RECORD RESULTS FOR SALES AND PROFIT in CHF mn 2020 2021 Δ% Net sales 7,877.5 9,252.3 + 17.5 Gross margin 54.8% 51.8% EBIT 1,130.5 1,391.4 + 23.1 Net profit 825.1 1,048.5 + 27.1 9
Slide 10: Highlights 2021: Strong Growth in All Regions
HIGHLIGHTS 2021 STRONG GROWTH IN ALL REGIONS 2020 2021 + 16.1% (in CHF billion, growth in LC) + 17.1% + 21.0% + 19.4% + 4.3% 2.43 4.07 2.08 0.67 9.25 Americas EMEA Asia/Pacific Global Business Group 10
Slide 11: Highlights 2021: Seven Realized Acquisitions
HIGHLIGHTS 2021 SEVEN REALIZED ACQUISITIONS Acquisition of Kreps, Russia Acquisition of BR Massa, Brazil Acquisition of DriTac, USA Acquisition of Hamatite, Japan (February 2021) (March 2021) (March 2021) (April 2021) Acquisition of American Hydro- Acquisition of Bexel, Mexico Acquisition of Landun,
Slide 12: Highlights 2021: Additional Key Investments
HIGHLIGHTS 2021 ADDITIONAL KEY INVESTMENTS Establishment of new national subsidiary Sika Ghana Accra, November 2021 Opening of Sika plants Expansion of production site in Sweden Stockholm, February 2021 Expansion of production site in Qatar Doha, April 2021 Commissioning of new production site in Ch
Slide 13: Strong Performance During Turbulent Years
SIKA HIGHLIGHTS STRONG PERFORMANCE DURING TURBULENT YEARS Net Sales EBIT in CHF mn In CHF mn 2Y CAGR 2Y CAGR* +14.8% +10.0% 1,391.4 9,252.3 2019 2020 2021 2019 2020 2021 *Growth in % LC 13
Slide 14: 3. Sika's Growth Drivers
3. SIKA’S GROWTH DRIVERS ® BUILDING TRUST By
Slide 15: Resilient Strategy – Major Megatrends Supporting Growth
RESILIENT STRATEGY – MAJOR MEGATRENDS SUPPORTING GROWTH FURTHER ACCELERATION THROUGH DIGITALIZATION Urbanization Climate Change and Digitalization Scarcity of Resources Demographic Dynamic Technological Change Economy Progress 15
Slide 16: Further Acceleration Through Digitalization
RESILIENT STRATEGY – MAJOR MEGATRENDS SUPPORTING GROWTH FURTHER ACCELERATION THROUGH DIGITALIZATION Digitalization profoundly changes structure of market Sika put strong and accesses focus on… ▪ training of local teams 1,000+ hours +45.0% +40.3% ▪ content optimization sales growth sales growth ▪ vid
Slide 17: Resilient Growth Strategy 2023: Strategic Targets Confirmed
RESILIENT GROWTH STRATEGY 2023 STRATEGIC TARGETS CONFIRMED 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-mate
Slide 18: Growth Driver – Africa Expansion
GROWTH DRIVER – AFRICA EXPANSION AFRICA IS JUST BEING BUILT ▪ Since 2014, Sika opened 10 new national subsidiaries and is now present in 18 countries ▪ Sika operates 22 production sites and generates sales of CHF 300 million in Africa ▪ Population in Africa expected to double to over 2 billion peopl
Slide 19: Africa Expansion: High Market Potential
GROWTH DRIVER – AFRICA EXPANSION HIGH MARKET POTENTIAL 408,236 (Africa) 6 2,762,544 (EU) of 41 comparison of paved roads in km six of the world’s (in countries where Sika is active) 41 megacitites will be in Africa by 2023 964 (South Africa) 4,257 (Germany) 43 (Africa) comparison of waste water trea
Slide 20: Africa Expansion: Project Examples
GROWTH DRIVER – AFRICA EXPANSION PROJECT EXAMPLES Mohammed VI Tower, Morocco Ashton Arch Bridge, South Africa ▪ Compliant with stringent environmental ▪ Built next to old bridge to maintain traffic standards (LEED Gold and HQE) ▪ New bridge was lifted into final position ▪ Highest building requireme
Slide 21: Growth Driver – Infrastructure Programs
GROWTH DRIVER – INFRASTRUCTURE PROGRAMS CHF 10 TRILLION PLANNED STIMULI EU on the way US investments in to climate neutrality infrastructure running approx. CHF China invests in infrastructure into the billions approx. CHF 400 billion and cutting-edge technologies approx. CHF 850 billion 8,000 billi
Slide 22: Project Example: Réseau Express Métropolitain, Montreal
GROWTH DRIVER – INFRASTRUCTURE PROGRAMS PROJECT EXAMPLE: RÉSEAU EXPRESS MÉTROPOLITAIN, MONTREAL Project description ▪ largest public transit project undertaken in Montreal in the last 50 years ▪ Network to be gradually put into service in 2022-2023 ▪ Sika solutions from basement to roof Sika solutio
Slide 23: Project Example: SoFi Stadium, Los Angeles
GROWTH DRIVER – INFRASTRUCTURE PROGRAMS PROJECT EXAMPLE: SOFI STADIUM, LOS ANGELES Project description ▪ Capacity 70,000 people ▪ Highest seismic requirements as situated next to the tectonic boundary of the San Andreas Fault ▪ Strong and successful cross-selling work from Sika teams Sika solutions
Slide 24: Environmentally-Friendly Construction
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT ENVIRONMENTALLY-FRIENDLY CONSTRUCTION Today, Sika enables its concrete and cement customers Sika will be able to to reduce their CO2 emissions by around 25%-35% enable its customers -80 kg CO2 -150 kg CO2 to reduce their CO2 concrete cement emissions by Standa
Slide 25: reCO2ver – Breakthrough in Concrete Recycling
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT reCO2ver® – BREAKTHROUGH IN CONCRETE RECYCLING The reCO2ver® process separates old concrete into its component parts and uses regained material to produce new, high-quality concrete. The unique process produces high quality SCM powder which allows reduction of
Slide 26: Main Changes in Governance and Sustainability Reporting
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT MAIN CHANGES IN GOVERNANCE AND SUSTAINABILITY REPORTING Newly created position of Chief Innovation and Sustainability Officer Formation of Sustainability Committee consisting of three Board members with focus on environmental and social topics and sustainabili
Slide 27: Sika Roadmap to Net Zero
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT SIKA ROADMAP TO NET ZERO Sustainability as a great opportunity to position Sika as a sustainability champion 27
Slide 28: Growth Driver – Employee Engagement: Our Enablers
GROWTH DRIVER – EMPLOYEE ENGAGEMENT OUR ENABLERS 27,000 employees Our employees are the enablers for success. With their great dedication, they make sure Sika can successfully implement its strategy of sustainable growth. 28
Slide 29: Diversity on All Levels
GROWTH DRIVER – EMPLOYEE ENGAGEMENT DIVERSITY ON ALL LEVELS Commitment of 23.2% 45 Sika leaders female nationalities among ▪ Build an inclusive and attractive employees Senior Managers environment ▪ Non-discriminatory practices in employment Balanced age ▪ Equal opportunities in the recruit- structu
Slide 30: Talent Development Is Key
GROWTH DRIVER – EMPLOYEE ENGAGEMENT TALENT DEVELOPMENT IS KEY ▪ Sika is proud that employees dedicate their know-how and 25.2% 17,741 remain with the company for a women in Sika learners reached with long time talent pool online trainings in 2021 ▪ Many possibilities to develop within Sika ▪ Strong
Slide 31: 4. Financial Results
4. FINANCIAL RESULTS ® BUILDING TRUST By
Slide 32: Sales 2021: 17.1% Growth in Local Currencies
SALES 2021 17.1% GROWTH IN LOCAL CURRENCIES in CHF mn 2020 2021 +2.0% +0.4% Net sales 7,877.5 9,252.3 +15.1% Organic growth +1,187.5 9,252 Acquisition effect +156.2 7,878 Currency effect +31.1 2020 Org. Acq. FX 2021 32
Slide 33: Sales Development 2019 to 2021
SALES DEVELOPMENT 2019 TO 2021 3Y CAGR of 12.1% 16.3% 17.1% 16% 2.0% 11% 13.0% 3.4% 15.1% 6% in LC 7.2% acquisition 1% 3.3% organic -3.8% -4% 2019 2020 2021 12M 2019 12M 2020 12M 2021 in CHF mn Sales 8,109.2 7,877.5 9,252.3 In 2021, sales growth of acquired businesses since initial consolidation is
Slide 34: Income Statement: Profitability Growth Across the Board
INCOME STATEMENT PROFITABILITY GROWTH ACROSS THE BOARD in CHF mn 2020 NS 2021 NS Growth Net sales 7,877.5 100% 9,252.3 100% +17.5% Gross result 4,314.8 54.8% 4,791.3 51.8% +11.0% Personnel costs -1,525.9 -19.4% -1,635.3 -17.7% +7.2% Other OPEX -1,291.3 -16.4% -1,398.0 -15.1% +8.3% EBITDA 1,497.6 19.
Slide 35: EBIT Improvement 2021
EBIT IMPROVEMENT 2021 STRATEGIC LEVERS DRIVING IMPROVEMENT +0.3% -0.1% +0.7% -2.8% +2.5% 15.0% 14.4% EBIT 2020 Material Margin Growth / Operational M&A Synergies M&A Dilution / EBIT 2021 (organic) Leverage Efficiency (cost) (incremental) others 35
Slide 36: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET IMPROVED CAPITAL EFFICIENCY in CHF mn 31.12.2020 31.12.2021 Δ% Cash and cash equivalents 1,318.7 1,175.0 -10.9 Other current assets 2,315.9 2,990.1 29.1 Current assets 3,634.6 4,165.1 14.6 Non-current assets 6,159.4 6,534.8 6.1 Total assets 9,794.0 10,699.9 9.2 Current lia
Slide 37: Operating Free Cash Flow Development
OPERATING FREE CASH FLOW DEVELOPMENT CONTINUED STRONG CASH CONVERSION Operating Free Cash Flow 16.0% ▪ 2021 operating free cash flow 12.7% at 9.8% of sales 9.8% 8.0% 7.2% ▪ Higher profitability and CapEx 1,259.4 1,026.1 908.4 ▪ NWC increase of CHF 325 496.8 513.2 million (vs. CHF 125 million 2017 20
Slide 38: Net Debt/EBITDA Development
NET DEBT/EBITDA DEVELOPMENT (AS REPORTED) STRONG DELEVERAGING PROFILE ▪ De-leveraging well on track 3.4 ▪ Continued strong cash 2.5 conversion led to significant 2.3 1.8 1.9 leverage reduction from peak in 1.4 2019 (3.4x in June 2019) ▪ Net debt decrease by CHF 317 million in 2021 2017 2018 2019 202
Slide 39: Dividend: Board Proposes 16.0% Increase per Share
DIVIDEND BOARD OF DIRECTORS PROPOSES 16.0% INCREASE PER SHARE Dividend payment of CHF 2.90 per share (+16.0% vs. previous year) in CHF mn 2020 2021 Group profit (after minorities) 824.5 1,047.9 Dividend out of retained earnings 354.5 465.3* Dividend per share 2.50 2.90 Total payout ratio 43.0% 44.4%
Slide 40: 5. Update on MBCC Acquisition
5. UPDATE ON MBCC ACQUISITION
Slide 41: Entering an Exciting Next Chapter
UPDATE ON MBCC ACQUISITION ENTERING AN EXCITING NEXT CHAPTER Strong business rationale ▪ We have highly complementary products and distribution channels ▪ We will accelerate Sika’s Growth Strategy 2023 together ▪ Together, we will enable our customers and the construction industry to drive the susta
Slide 42: Better Than Expected Results for MBCC for 2021
UPDATE ON MBCC ACQUISITION BETTER THAN EXPECTED RESULTS FOR MBCC FOR 2021 ▪ In 2021 MBCC performed ahead of forecast with strong growth and profitability and acquired four companies. All while continuing to strengthen its positions as a powerhouse for sustainable construction solutions ▪ Sika/MBCC i
Slide 43: Complementary in Many Ways
UPDATE ON MBCC ACQUISITION COMPLEMENTARY IN MANY WAYS Complementarity in many countries, regions, and product ranges. Combination will lead to a very balanced offering. Customers will benefit from a stronger solution portfolio and an enhanced and more efficient distribution network across all constr
Slide 44: We Will Have an Even Stronger Product Range Together
UPDATE ON MBCC ACQUISITION WE WILL HAVE AN EVEN STRONGER PRODUCT RANGE TOGETHER Sikaplan® Sika Power® Sika Sikafloor® PVC membrane for waterproofing epoxy-based toughened adhesive admixtures and solutions for con- self-leveling screeds for both new and waterproofing products to produce extra-long bl
Slide 45: Based on Strong Shared Values and Principles
UPDATE ON MBCC ACQUISITION BASED ON STRONG SHARED VALUES AND PRICIPLES Joining values to provide world-class service to customers, foster a strong working environment for employees, and continue with our strong growth around the world. Customer first Courage for Make the impossible innovation possib
Slide 46: Shared Values Define Our Corporate Culture
UPDATE ON MBCC ACQUISITION SHARED VALUES DEFINE OUR CORPORATE CULTURE Cultural survey among 160 Sika managers and 150 MBCC managers highlights common working principles Centralized Decentralized SIKA MBCC Defined roles and responsibilities Fluid roles and responsibilities Focused on executing today’
Slide 47: 6. Outlook
6. OUTLOOK ® BUILDING TRUST By
Slide 48: Outlook 2022: Continuation of Successful Growth Strategy
OUTLOOK 2022 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Sales increase by well over 10% in local currencies, surpassing CHF 10 billion for the Expected sales first time ▪ Over-proportional EBIT increase expected for for 2022 the year > 10 ▪ Confirmation of 2023 strategic targets for sustainable, p
Slide 49: Thank You for Your Attention
"Se WES SIKA scsi! — WE & SIKA ® BUILDING TRUST By
Slide 50: 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