Slide 1: Sales Growth of 3.4% in Local Currencies for 2020 – Strong Q4 Increase of 5.5%
SALES GROWTH OF 3.4% IN LOCAL CURRENCIES FOR 2020 – STRONG Q4 INCREASE OF 5.5% SIKA INVESTOR PRESENTATION JANUARY 12, 2021
Slide 2: Highlights Sales 2020
HIGHLIGHTS SALES 2020 ON TRACK TO MEET AMBITIOUS TARGETS
Slide 3: Growth in Local Currencies of 3.4%
GROWTH IN LOCAL CURRENCIES OF 3.4% HIGHLIGHTS SALES 2020 1. Sales ▪ Sales growth of 3.4% in local currencies. Sales of CHF 7.88 billion (-2.9% in CHF) ▪ Strong growth of 5.5% in the fourth quarter (organic: +4.1%) ▪ High negative currency effect of -6.3% (impact of around CHF 500 million in sales) 2
Slide 4: Sales Growth of 3.4% in 2020, Q4 Increase of 5.5%
SALES GROWTH OF 3.4% IN 2020 Q4 INCREASE OF 5.5% 19% 16.3% 13.6% 14% 9% 6.8% 13.0% 3.4% 6.8% 7.2% 4% in LC 3.3% acquisition -1% organic -3.8% -6% 2018 2019 2020 in CHF mn 2018 2019 2020 Net sales 7,085.4 8,109.2 7.88 bn 4
Slide 5: Sales Full Year 2020: High Negative Currency Effect of -6.3%
SALES FULL YEAR 2020 HIGH NEGATIVE CURRENCY EFFECT OF -6.3% FOR THE GROUP -0.7% -7.7% +7.0% -16.4% Growth in CHF +4.4% +1.0% +12.6% -11.2% Growth in LC -5.1% -8.7% -5.6% -5.2% FX impact +7.6% +5.2% +13.0% +0.0% Acquisition 18% 82% Construction Industry EMEA Americas Asia/Pacific Global Business 5
Slide 6: Sales Growth of 3.4% in Local Currencies for 2020
SALES GROWTH OF 3.4% IN LOCAL CURRENCIES FOR 2020 STRONG Q4 INCREASE OF 5.5% + 4.4% + 12.6% - 11.2% + 1.0% 1.70 0.78 1.99 3.41 Asia/Pacific Global Business Americas EMEA 2019 2020 (in CHF billion, growth in LC) 6
Slide 7: High Operating Speed Continues in 2020: New Plants & Acquisitions
HIGH OPERATING SPEED CONTINUES IN 2020 INVESTMENTS IN NEW PLANTS & ACQUISITIONS IN 2020 Opening of Sika plants: Admixtures, mortar, and acrylic plant in Colombia Barranquilla, January 2020 Expansion of structural waterproofing membrane plant in Switzerland Sarnen, March 2020 Mortar plant in China Ch
Slide 8: The Impact of the Pandemic, March 2020 to Dec 2020
THE IMPACT OF THE PANDEMIC MARCH 2020 TO DEC 2020 Country Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Okt 20 Nov 20 Dez 20 ▪ Severe COVID-19 Argentina 48 95 83 65 58 66 58 43 25 20 Australia 46 76 55 43 43 43 43 43 38 29 wave started in March Austria 48 83 55 29 19 19 24 36 69 71 Belgium 35 81
Slide 9: Measures Addressing Pandemic Situation, Maintain High Flexibility
MEASURES ADDRESSING PANDEMIC SITUATION MAINTAIN HIGH FLEXIBILITY Measures ▪ General ▪ Strong local management actions in each country Operational ▪ Preparation and response according to local situation which differs from country to Agility country, scenario planning ▪ Taking advantage of local suppo
Slide 10: Sika's Success Factors in the Crisis
SIKA’S SUCCESS FACTORS IN THE CRISIS NAVIGATING THE PANDEMIC
Slide 11: Sika's Market Potential
GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW-BUILD TO REFURBISHMENT SIKA HAS SOLUTIONS FOR ALL MARKETS Long-term market potential Sika Repair and Sika’s market potential refurbishment Higher building standards Infrastructure Emerging markets Developing markets Mature markets 11
Slide 12: Structural Growth, Market Penetration and Acquisition
STRUCTURAL GROWTH, MARKET PENETRATION AND ACQUISITION HOW SIKA DELIVERS SUPERIOR AND SUSTAINABLE GROWTH OF 6-8% 50% 40% 30% 20% 10% 0% 2019 2020 2021 2022 2023 Market Growth Structural Growth (Megatrends) Market Penetration Acquisition Growth in local currencies 12
Slide 13: Infrastructure Programs Stimulate Market Growth
INFRASTRUCTURE PROGRAMS STIMULATE MARKET GROWTH CHF 10 TRILLION PLANNED STIMULI FOR CONSTRUCTION Europe CHF 750 billion Americas Asia/Pacific CHF 1 trillion CHF 8.6 trillion Investments in the areas of: ▪ Transportation infrastructure ▪ Public buildings (hospitals, schools) ▪ Renewable energy ▪ IT i
Slide 14: Examples of COVID-19 Infrastructure Programs
INFRASTRUCTURE PROGRAMS STIMULATE MARKET GROWTH EXAMPLES OF COVID-19 INFASTRUCTURE PROGRAMS EU USA China ▪ EUR 750 billion ▪ Lowest common denominator ▪ Investment plans and EU recovery plan between the two parties is a major infrastructure ▪ Focuses on renewable USD 1 trillion infrastructure projec
Slide 15: EU Green Deal Initiative to Boost Business
EU GREEN DEAL INITIATIVE TO BOOST BUSINESS SIKA TO PROFIT AS GLOBAL LEADER IN BUILDING FINISHING Existing buildings New regulations Sika solutions reducing heat loss and water impact ▪ EU Green Deal ▪ Stricter building regulations leading to renovations of buildings and infrastructure ▪ Countries su
Slide 16: Digital Economy and E-Commerce Unlocking Additional Potential
DIGITAL ECONOMY AND E-COMMERCE UNLOCKING ADDITIONAL POTENTIAL ▪ COVID-19 has accelerated digital and Huge investments in data- e-commerce boom transfer and G5 technology ▪ Increasing investments from civil infrastructure to data centers Increasing need for data ▪ Sika as preferred provider of Roofin
Slide 17: Trend for More Urbanization Continues
TREND FOR MORE URBANIZATION CONTINUES UNLOCKING ADDITIONAL POTENTIAL ▪ Big cities remain highly attractive Urbanization trend to continue ▪ Companies will not transition to 100% 1,750 mn 7,244 mn 9,804 mn World population home office mid-term ▪ Even if less people will be working in office buildings
Slide 18: Resilient and Growing Distribution Business
RESILIENT AND GROWING IN DISTRIBUTION BUSINESS INCREASING OPPORTUNITIES ▪ Boom in DIY business ▪ Sika’s distribution business highly ▪ Home improvement business is resilient booming ▪ Leading retail and hardware store chains report strong double-digit increase in sales during lockdown ▪ Access to nu
Slide 19: Overall Stronger Growth of Refurbishment Business
SUCCESS FACTORS IN THE CRISIS OVERALL STRONGER GROWTH OF REFURBISHMENT BUSINESS ▪ High resilience of refurbishment in crisis ▪ Urbanization and densification drive the need for refurbishment ▪ Structures have to be maintained ▪ Complexity favor refurbishment over new build ▪ New regulations and buil
Slide 20: Strong Customer Focus
SUCCESS FACTORS IN THE CRISIS STRONG CUSTOMER FOCUS ▪ Close contact with customers ▪ Daily calls and personal contact ▪ Over 100,000 webinars and online trainings ▪ New sales-driven website with access to all products in all countries ▪ Solution-driven mentality 20
Slide 21: Successful Parex Integration
SUCCESSFUL PAREX INTEGRATION ON TRACK TO MEET AMBITIOUS TARGETS
Slide 22: Fast and Successful Integration of Parex
FAST AND SUCCESSFUL INTEGRATION OF PAREX EXCELLENT PROGRESS – COMPLETION IN FOCUS TOTAL SYNERGIES TOTAL COST CHF 40 MILLION+ Around CHF 100 SYNERGIES Run rate synergies million identified CHF 55 million achieved to date PRODUCT SHOP IN SHOP 23 INTEGRATED CROSS-SELLING LAUNCHES concept TEAMS working
Slide 23: Strategy 2023
STRATEGY 2023 ON TRACK TO MEET AMBITIOUS TARGETS
Slide 24: Major Megatrends Supporting Sika's Growth
MAJOR MEGATRENDS SUPPORTING SIKA’S GROWTH NO CHANGES DUE TO PANDEMIC TECHNOLOGY RAPID ADVANCEMENT URBANIZATION DYNAMIC CLIMATE CHANGE, ECONOMY SHORTAGE OF RESOURCES CHANGING DEMOGRAPHICS 24
Slide 25: 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 26: Market Penetration: Increase Market Share to 12%
MARKET PENETRATION INCREASE MARKET SHARE TO 12% Construction chemicals Construction chemicals Driver for future growth: market 2020 market 2025 How we increase market share approx. CHF 70 billion approx. CHF 80 billion Sika 12% New Sika 9% Building Finishing Target Market Others +2.5% p.a. 58% marke
Slide 27: Innovation: More Performant – More Sustainable
INNOVATION MORE PERFORMANT – MORE SUSTAINABLE FIVE CORE TECHNOLOGIES: Concrete Technology Adhesive Systems Coating Systems Focus on Sika’s five 25% of sales with new core technologies products Increased focus on Cementitious Systems Thermoplastic Systems Shift in construction product sustainability:
Slide 28: Operational Efficiency Drives Margin Improvement
OPERATIONAL EFFICIENCY DRIVES MARGIN IMPROVEMENT MORE THAN OPERATING LEVERAGE Sika’s footprint significantly expanded over the years 1 Operations / Factory Efficiency Initiatives to 2 Formulation Efficiency increase 3 Logistics operational efficiency 4 Procurement 5 Sales and admin costs in % 0.5% s
Slide 29: Acquisitions as Growth Platforms
ACQUISITIONS AS GROWTH PLATFORMS NUMEROUS OPPORTUNITIES TO CONSOLIDATE MARKET ▪ Fragmentation offers acquisition opportunities ▪ Sika acting as market consolidator ▪ More than 60 bolt-on acquisitions in the last 12 years ▪ Acquisitions as growth platforms ▪ Solid pipeline but due diligence process h
Slide 30: Values and Principles
VALUES AND PRINCIPLES WHAT SIKA STANDS FOR 25,000 HIGH ▪ Customer first employees COMMITMENT ▪ Courage for innovation ▪ Sustainability and integrity OF EMPLOYEES ▪ Empowerment and respect 6.0% DURING ▪ Manage for results employee turnover PANDEMIC rate in 2019 Global Employee Survey in 2019 showed v
Slide 31: Sustainability: 70% of Sika Products with Positive Sustainable Impact
SUSTAINABILITY 70% OF SIKA PRODUCTS WITH POSITIVE SUSTAINABLE IMPACT ▪ 70% of Sika products with a positive sustainable impact ▪ Sika products help to drive CO2 footprint of our customers down Overall target 12% CO2 emission reduction per ton sold by 2023 Our «More Value - Less Impact» targets: ▪ Su
Slide 32: Sustainability – Climate Performance
SUSTAINABILITY – CLIMATE PERFORMANCE STRATEGIC CO2 TARGET LEADS TO CLIMATE NEUTRALITY BY 2050 2019 2020 2023 2030 2050 27 kg CO2/tons sold -12% -50% CO2 neutral (Scope 1&2) In 2020 Sika concentrates on Scope 1 and 2 Internal CO2 footprint Scope 1 (direct) Scope 2 (indirect) ▪ Internal fossil fuel us
Slide 33: Sika Enables Sustainable Construction: Concrete Admixtures
SIKA ENABLES SUSTAINABLE CONSTRUCTION SIKA PRODUCTS DRIVE CO2 FOOTPRINT DOWN Scope 3 (external CO2 footprint) 70% of Sika products with a positive sustainable impact HIGH-STRENGTH CONCRETE WITH CONCRETE ADMIXTURES Sika® ViscoCrete® REDUCES CONCRETE CONSUMPTION AS THINNER CONSTRUCTIONS ARE POSSIBLE S
Slide 34: Sika Enables Sustainable Construction: Repair and Refurbishment
SIKA ENABLES SUSTAINABLE CONSTRUCTION SIKA PRODUCTS DRIVE CO2 FOOTPRINT DOWN Scope 3 (external CO2 footprint) 70% of Sika products with a positive sustainable impact SIKA SOLUTIONS FOR REPAIR AND REFURBISHMENT STRENGTHEN, WATERPROOF, INSULATE, PROTECT, AND REPAIR BUILDINGS AND STRUCTURES SIKA REPAIR
Slide 35: Sika Enables Sustainable Construction: Green and Cool Roofs
SIKA ENABLES SUSTAINABLE CONSTRUCTION SIKA PRODUCTS DRIVE CO2 FOOTPRINT DOWN Scope 3 (external CO2 footprint) 70% of Sika products with a positive sustainable impact SIKA SUPPLIES HIGHLY DURABLE, ROOT RESISTANT MEMBRANES FOR GREEN ROOFS ▪ REDUCE URBAN HEAT EFFECT AND IMPROVE AIR QUALITY ▪ INSULATING
Slide 36: Outlook
OUTLOOK ® BUILDING TRUST Bs
Slide 37: Outlook: Driving Towards an EBIT Margin of 15%-18%
OUTLOOK DRIVING TOWARDS AN EBIT MARGIN OF 15%-18% 15% – 18 % 12.9% - 2.6% pts. 11.3% +0.5% pts. Efficiencies Negative Volume +0.5% pts. Synergies leverage / Dilution M&A 2019 HY 2020 2023 37
Slide 38: Outlook: Continuation of Successful Growth Strategy
OUTLOOK CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Confirmation of 2023 strategic targets for sustainable, profitable growth ▪ For 2020 Sika is anticipating an over-proportional increase in EBIT and an EBIT margin of around 14% 38
Slide 39: Thank You for Your Attention
al THANK YO U 4 FOR YOUR ATTENTION BUILDING TRUST
Slide 40: 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