Sika Ag · SIX:SIKA
Sika — Q3 2024 Earnings Presentation
34 slides from Sika's earnings presentation, Oct 25, 2024
Slide 1: Sika Nine Months 2024
SIKA NINE MONTHS 2024 NEW RECORDS IN SALES AND PROFIT – ORGANIC GROWTH ACCELERATES SIKA INVESTOR PRESENTATION OCTOBER 2024
Slide 2: Agenda
1. FIRST NINE MONTHS 2024 2. OUR FIRST YEAR OF STRATEGY 2028 3. UNLOCK GROWTH WITH DURABILITY AND CIRCULARITY 4. OUTLOOK
Slide 3: 1. First Nine Months 2024
1. FIRST NINE MONTHS 2024 ® BUILDING TRUST Bs
Slide 4: Record Results in First Nine Months of 2024
RECORD RESULTS IN FIRST NINE MONTHS OF 2024 ORGANIC GROWTH ACCELERATES FURTHER Sales and profit ▪ Sales of CHF 8,914.9 million (+5.5% in CHF) after first nine months ▪ Sales growth of 9.1% in local currencies (foreign currency effect of -3.6%) ▪ Continued steady improvement in organic growth from 0.
Slide 5: Strong Sales Growth in Local Currencies Across All Regions
HIGHLIGHTS FIRST NINE MONTHS 2024 STRONG SALES GROWTH IN LOCAL CURRENCIES ACROSS ALL REGIONS + 12.2% + 9.0% + 4.7% + 9.1% z 8.91 3.13 3.88 1.91 Americas EMEA Asia/Pacific Group 9M 2023 9M 2024 (in CHF billion, growth in LC) 5
Slide 6: Sales Growth First Nine Months 2024
SALES GROWTH FIRST NINE MONTHS 2024 ORGANIC GROWTH ACCELERATES – MBCC AS STRONG CONTRIBUTOR in CHF mn -303 +620 +68 +82 8,914.9 8,449.2 Net sales Organic Bolt-on MBCC FX Net sales 9M HY 23 acquisitions 9M HY 24 (net) 6
Slide 7: Growth Lifted by MBCC Acquisition
SALES GROWTH FIRST NINE MONTHS 2024 GROWTH LIFTED BY MBCC ACQUISITION 18.5% 3.4% 12.4% in LC 9.1% acquisition 15.1% 11.1% organic 8.1% 1.3% 1.0% in CHF mn 9M 2022 9M 2023 9M 2024 Sales 7,998.5 8,449.2 8,914.9 7
Slide 8: Local Currency Growth in All Regions – High FX Impact
SALES GROWTH FIRST NINE MONTHS 2024 LOCAL CURRENCY GROWTH IN ALL REGIONS – HIGH FX IMPACT +5.7% +9.4% -0.5% Growth in CHF +9.0% +12.2% +4.7% Growth in LC -3.3% -2.8% -5.2% FX impact +8.3% +9.9% +5.2% Acquisition 15% 85% Construction Industry EMEA Americas Asia/Pacific 8
Slide 9: Results in First Nine Months 2024
RESULTS IN FIRST NINE MONTHS 2024 STRONG MARGIN EXPANSION AND HIGH OPERATING FREE CASH FLOW in CHF mn 2023 NS 2024 NS Growth Net sales 8,449.2 100% 8,914.9 100% 5.5% Gross result 4,487.9 53.1% 4,876.9 54.7% 8.7% Personnel expenses -1,477.3 -17.5% -1,625.8 -18.2% Other OPEX -1,507.9 -17.8% -1,549.4 -
Slide 10: Sika Gaining Market Share Over the Years
SIKA GAINING MARKET SHARE OVER THE YEARS OUTGROWING THE PEERS 21% 21% 17.1% 15.8% 16% 16% 2.0% 14.5% 2.7% 12.8% 11% 11% 15.1% 13.3% 12.7% 13.1% 13.2% 12.3% in LC 6% 6% acquisition organic 1.2% 0.5% 1% 1% -1.2% -3.5% peer growth (organic) -4% -4% in CHF bn 2021 FY 2021 2022 FY 2022 2023 FY 2023 2024
Slide 11: Continuous Investments in Future Growth
CONTINUOUS INVESTMENTS IN FUTURE GROWTH KEY INVESTMENTS IN 2024 Acquisition Kwik Bond Acquisition Vinaldom, S.A.S New manufacturing facility in Lima, Peru Polymers, US in the Dominican Republic Production of synthetic macro fibers to strengthen Sika’s position as a leading supplier to the mining ind
Slide 12: Successful Integration of MBCC
SUCCESSFUL INTEGRATION OF MBCC ACCELERATION OF SYNERGY IMPACT – 2024 GUIDANCE RAISED 180 to 200 140 to 160 100 to 120 41 2023 2024 2025 2026 (in CHF million) 12
Slide 13: Growth and the Journey to Net Zero
GROWTH AND THE JOURNEY TO NET ZERO SIKA’S VALIDATED SBTI TARGETS OUR KEY LEVERS Accelerated use of alternative low carbon supplies Education and Partnerships with capacity building to key suppliers who improve material support Sika's path efficiency and to net zero circularity Development of new Con
Slide 14: High Engagement Score of 86
HIGHLIGHTS FIRST NINE MONTHS 2024 HIGH ENGAGEMENT SCORE OF 86 HIGH ENGAGEMENT SCORE OF 86 86 Fueled by strong purpose and confidence in ENGAGEMENT SCORE management and strategy 14
Slide 15: 2. Our First Year of Strategy 2028
2. OUR FIRST YEAR OF STRATEGY 2028
Slide 16: Strategy 2028 – Beyond the Expected
STRATEGY 2028 – BEYOND THE EXPECTED PROFITABLE GROWTH TO CONTINUE 23.0% 20.0% EBITDA 18.2% EBITDA 16.4% 11.2 bn On track for 7.1 bn continued growth and value 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 creation 16 Note: Historical Sales represent actual CHF values, growth figures in LC
Slide 17: Sika's Growth Strategy 2028 Pillars
SIKA’S GROWTH STRATEGY 2028 THE PILLARS OF THE STRATEGY 6-9% 20% annual growth in LC GHG emission reduction MARKET PENETRATION Scope 1 & 2 (absolute reduction vs. 2022 base line) INNOVATION & 20-23% EBITDA* Scope 3 reduction in line with net-zero pledge SUSTAINABILITY >80% ACQUISITIONS >10% Operatin
Slide 18: Market Share in Construction Chemicals and Industry
MARKET SHARE IN CONSTRUCTION CHEMICALS AND INDUSTRY TOTAL ADDRESSABLE MARKET 2023: CHF 110 BILLION 11% Top 30 Competitive competitors landscape 45% (incl. Sika) remains very account for fragmented despite ongoing 55% M&A activity of market share 18
Slide 19: Benefits of Megatrends and Unlock Growth
BENEFITS OF MEGATRENDS AND UNLOCK GROWTH SIKA STRONGLY POSITIONED IN 2024 AND BEYOND URBANIZATION CLIMATE CHANGE AND SUSTAINABILITY Our growth ambition 6-9% DIGITALIZATION INCREASING REGULATIONS Sika’s average annual growth rate DEMOGRAPHIC CHANGE in local currencies TECHNOLOGICAL PROGRESS RESOURCE
Slide 20: Market Penetration Strategy 2028
MARKET PENETRATION STRATEGY 2028 KEY GROWTH LEVERS/INITIATIVES KEY GEOGRAPHIES LEVERAGING STRONG POSITION MULTI-CHANNEL APPROACH Fostering our worldclass brand and leveraging our Following a multi-channel approach with dedicated strong reputation and specialized teams E RO E A S A A HI A DIRECT BUSI
Slide 21: Acquisitions as Growth Accelerator
ACQUISITIONS AS GROWTH ACCELERATOR ACQUISITIONS 2019 – 2024 2019 2020 2021 2022 2023 2024 5 2 7 2 2 2 L L Concrete Waterproofing S&B Refurbishment Roofing Flooring Building Finishing Industry L Large transaction 21
Slide 22: 3. Unlock Growth with Durability and Circularity
3. UNLOCK GROWTH WITH DURABILITY AND CIRCULARITY
Slide 23: Megatrends Driving Longer Lifespan Requirements
MEGATRENDS DRIVING LONGER LIFESPAN REQUIREMENTS INFRASTRUCTURE AND DATA CENTERS AND COMMERCIAL CONSTRUCTION SEMICONDUCTOR FACILITIES ▪ Resilient structures to withstand more ▪ Increased requirements for longer lifespans extreme weather for data centers and semiconductor facilities ▪ Reducing carbon
Slide 24: Durability and Its Impact on Emissions
DURABILITY AND ITS IMPACT ON EMISSIONS CO2 REDUCTION BY PROLONGING LIFESPAN According to different scenarios where the average lifespan of a residential/commercial building 30% is 40 or 60 years, the cumulative less CO2 with 20 kgCO2eq/m2 decreases by 30% years longer lifespan once the lifespan of a
Slide 25: Driving the Transformation of the Construction Sector
DRIVING THE TRANSFORMATION OF THE CONSTRUCTION SECTOR LONG DURABILITY BY EXTENDING THE LIFESPAN Linear construction Circular construction TIME MAKE USE Fit for purpose High quality CO2 optimized Digital Sustain Repurpose Not durable and durable raw materials monitoring and repair or recycle Not recy
Slide 26: Durability Requirements in Infrastructure
DURABILITY REQUIREMENTS IN INFRASTRUCTURE TODAY'S PROJECTS ARE DESIGNED FOR 100+ YEARS Hudson River Tunnel, US Gordie Howe Bridge, US London Thames Tideway, UK Dubai’s Deep Tunnel, SA Brent Spence, US Forrestfield-Airport Link, AU Riedberg Tunnel, CH NS Highway, Vietnam 26
Slide 27: High Potential in Concrete Fibers
HIGH POTENTIAL IN CONCRETE FIBERS DURABILITY AND SUSTAINABILITY CHALLENGES ▪ Steel reinforcement: cost and CO2 footprint ▪ Steel fibers: rough surfaces APPLICATION ▪ Fiber pucks are added during concrete production ▪ Part or full replacement of steel reinforcement SUSTAINABILITY BENEFITS ▪ 20% CO2 r
Slide 28: High Opportunity in Returned Concrete
HIGH OPPORTUNITY IN RETURNED CONCRETE CIRCULARITY AND SUSTAINABILITY CHALLENGES ▪ Globally, 4% of the fresh concrete is returned = 1,100 million tons! ▪ Heavy work needed to dispose SOLUTIONS ▪ Sika® Stabilizer-180 RCA ▪ Sika® Stabilizer-323 RCT APPLICATION ▪ Soluble bags are added to the fresh conc
Slide 29: Data Centers, Semiconductor Plants with Longer Lifespan
DATA CENTERS, SEMICONDUCTOR PLANTS WITH LONGER LIFESPAN MANY DATA CENTERS TO BE BUILT IN THE COMING YEARS Sika solutions can contribute to savings of 13,000 tons CO2eq throughout the lifetime of a 25,000m2 data center 29
Slide 30: Digital Solutions Support Longer Lifespan
DIGITAL SOLUTIONS SUPPORT LONGER LIFESPAN ANTICIPATING CUSTOMER NEEDS ALONG THE VALUE CHAIN Digital Products Digital Monitoring & Repairing Digital Tools Built in sensors for lifelong performance tracking To observe an early deterioration To make processes more efficient 30
Slide 31: 4. Outlook 2024
4. OUTLOOK 2024 ® BUILDING TRUST Bs
Slide 32: Outlook 2024
OUTLOOK 2024 CONFIRMATION OF 2028 STRATEGIC TARGETS ▪ For 2024 Sika expects sales growth in local currencies of 6-9% Expected sales ▪ Over-proportional increase in EBITDA growth in LC of ▪ Confirmation of 2028 strategic targets for sustainable, profitable growth 6-9% 32
Slide 33: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION Bs BUILDING TRUST
Slide 34: 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