Sika Ag · SIX:SIKA
Sika — Merger or Acquisition (November 2021)
29 slides from Sika's merger presentation, Nov 11, 2021
Slide 1: Sika to acquire MBCC Group to accelerate growth and reinforce position as sustainability champion
SIKA TO ACQUIRE MBCC GROUP TO ACCELERATE GROWTH AND REINFORCE POSITION AS SUSTAINABILITY CHAMPION ANALYST, INVESTOR, AND MEDIA PRESENTATION ZURICH, NOVEMBER 11, 2021
Slide 2: Agenda
AGENDA 1 KEY TRANSACTION HIGHLIGHTS 2 MBCC GROUP – AN ATTRACTIVE GLOBAL PLAYER 3 ACQUISITION IS HIGHLY COMPLEMENTARY 4 WORKING TOGETHER FOR A SUSTAINABLE FUTURE 5 VALUE CREATION AND FINANCIAL CONSIDERATIONS 6 PROCESS AND SUMMARY 2
Slide 3: 1. Key transaction highlights
1. KEY TRANSACTION HIGHLIGHTS
Slide 4: Key transaction highlights
KEY TRANSACTION HIGHLIGHTS ▪ MBCC Group is one of the most recognized companies in construction chemicals worldwide with sales of approximately CHF 2.9 billion (EUR 2.7 billion) ▪ Enterprise value of CHF 5.5 billion represents a 11.5x EV/pro forma 2022E EBITDA multiple with expected annual synergies
Slide 5: 2. MBCC Group – an attractive global player
2. MBCC GROUP – AN ATTRACTIVE GLOBAL PLAYER
Slide 6: MBCC Group at a glance: a leading company in construction chemicals worldwide
MBCC GROUP AT A GLANCE A LEADING COMPANY IN CONSTRUCTION CHEMICALS WORLDWIDE Key Facts Key Figures ▪ MBCC Group is a global manufacturer of construction 7,500 chemicals including concrete admixtures, tile adhesives, CHF 2.9bn Employees flooring systems, waterproofing systems, and PU sealants Sales B
Slide 7: MBCC Group at a glance: portfolio of strong brands and products in key countries
MBCC GROUP AT A GLANCE PORTFOLIO OF STRONG BRANDS AND PRODUCTS IN KEY COUNTRIES Segments Main Brands Top 10 countries ▪ Tile fixing & floor laying ▪ Performance flooring Construction ▪ Waterproofing USA Germany Systems ▪ Repair & protect ▪ Sealants Japan China 53% ▪ Performance grouts ▪ Specialities
Slide 8: 3. Acquisition is highly complementary
3. ACQUISITION IS HIGHLY COMPLEMENTARY
Slide 9: Strengthening footprint across all regions
STRENGTHENING FOOTPRINT ACROSS ALL REGIONS SIKA TO REACH SALES IN EXCESS OF CHF 13 BN IN 2023 Americas APAC 2,000 people 2,100 people 36 Plants 52 Plants 16 11.8 2 3.2 9.0 2.3 2.0 2.5 Americas Asia/Pacific Sika sales Total Sales** 5.4 4.0 Sika and MBCC Group sales* EMEA 3,400 people 42 Plants (**) I
Slide 10: MBCC Group aligns well with Sika's core technologies
MBCC GROUP ALIGNS WELL WITH SIKA’S 5 CORE TECHNOLOGIES ACQUISITION ADDS TO TECHNOLOGY MIX Concrete Systems Cementitious Systems Thermoplastics Systems Coating Systems Adhesive Systems 9% 22% 27% 14% 15% 21% 26% + 2% 42% = 13% 28% 12% 32% 16% 21% Pro-forma 10
Slide 11: Seven of eight target markets will profit from acquisition
SEVEN OF EIGHT TARGET MARKETS WILL PROFIT FROM ACQUISITION ALL TARGET MARKETS ACHIEVING SALES BETWEEN CHF 1-2 BILLION Concrete Waterproofing Roofing Flooring Extension of product portfolio Increased access to tunneling Addition of bituminous Addition of strong Ucrete brand with tunneling products an
Slide 12: Sika and MBCC Group complementarity in many ways
SIKA AND MBCC GROUP COMPLEMENTARITY 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 constructio
Slide 13: Combined product range covers wider set of project needs
SIKA AND MBCC GROUP ARE HIGHLY COMPLEMENTARY COMBINED PRODUCT RANGE COVERS WIDER SET OF PROJECT NEEDS 1 Underground Construction 2 Offshore Wind Turbine Installation Sika Power epoxy-based toughened adhesive to produce extra-long blades MasterFlow Grouts specialized for offshore wind turbine install
Slide 14: Combined product range covers wider set of project needs
SIKA AND MBCC GROUP ARE HIGHLY COMPLEMENTARY COMBINED PRODUCT RANGE COVERS WIDER SET OF PROJECT NEEDS 3 Concrete Production 4 Floor Covering Applications Sika admixtures and solutions for concrete include Sika ViscoCrete, and the new patented reCO2ver process for recycled concrete MBCC Group markets
Slide 15: Example distribution strengths in DACH region
SIKA AND MBCC GROUP ARE HIGHLY COMPLEMENTARY EXAMPLE DISTRIBUTION STRENGTHS IN DACH REGION PCI as accelerator for Sika’s DACH distribution business MBCC Group ▪ Sika sells primarily through specialty distributors strength in ▪ PCI with strong position in Builders’ Merchants and distribution business
Slide 16: Strengthened product range in many countries
SIKA AND MBCC GROUP ARE HIGHLY COMPLEMENTARY STRENGTHENED PRODUCT RANGE IN MANY COUNTRIES 1 Example: Japan 2 Example: Mexico Strong in Sealing & Bonding and Strong in Concrete, Roofing, Eng. Roofing Refurbishment and Building Finishing Strong in Concrete and Strong in Eng. Refurbishment Waterproofin
Slide 17: Increased customer proximity – production of wind grouts
SIKA AND MBCC GROUP ARE HIGHLY COMPLEMENTARY INCREASED CUSTOMER PROXIMITY – PRODUCTION OF WIND GROUTS 1 Supply Chain Joint Solutions 2 Supply Chain Wind Grouts MBCC Group produces offshore wind MBCC Group expansion Sika expansion joint grouts in Belgium, Sika has no internal joint plant (WBA) plant
Slide 18: 4. Working together for a sustainable future
4. WORKING TOGETHER FOR A SUSTAINABLE FUTURE
Slide 19: Sustainability regulations to boost Sika's growth model
SUSTAINABILITY REGULATIONS TO BOOST SIKA’S GROWTH MODEL STRONG LONG-TERM MARKET POTENTIAL FOR SIKA SIKA HAS SOLUTIONS FOR ALL MARKETS Long-term market potential Sika Sustainability regulations Repair and Sika’s market potential refurbishment Higher building standards Infrastructure Emerging markets
Slide 20: Sika reinforces position as sustainability champion
SIKA REINFORCES POSITION AS SUSTAINABILITY CHAMPION “WORKING TOGETHER FOR A SUSTAINABLE FUTURE” Our flooring systems drive cost efficiency, enabling up to 7% lower lifecycle cost SikaCeram MasterTop & increased service lifeof up to 50 years Sika has improved formulations of tile adhesives allowing f
Slide 21: Sika reinforces position as sustainability champion
SIKA REINFORCES POSITION AS SUSTAINABILITY CHAMPION “WORKING TOGETHER FOR A SUSTAINABLE FUTURE” OUR GOAL SIKA 80% of sales will be generated by products that have a 70% of sales is generated by products that have a positive effect on sustainability MBCC GROUP positive effect on sustainability Sustai
Slide 22: 5. Value creation and financial considerations
5. VALUE CREATION AND FINANCIAL CONSIDERATIONS
Slide 23: Financial considerations
FINANCIAL CONSIDERATIONS ▪ Financial parameters ▪ Enterprise value of CHF 5.5 billion (EUR 5.2 billion ) ▪ Annual synergies of CHF 160 – 180 million ▪ 11.5x EV / 2022E pro-forma EBITDA; 8.5x EV / EBITDA incl. full run-rate synergies ▪ EPS accretive as of first full financial year post closing ▪ Fina
Slide 24: Financial benefits from transaction
FINANCIAL BENEFITS FROM TRANSACTION SYNERGIES TO DRIVE SUSTAINABLE MARGIN ENHANCEMENT EBITDA margin c. 19% c. 15% c. 20% +35% EBITDA (CHF mn) 160-180 2,350 – 2,370 440 1,750 2 Eleven 1 Run-rate synergies Pro-forma 1) Pro-forma Sept 21 run-rate 2) Full run-rate synergies (EBITDA contribution) once fu
Slide 25: Revenue and cost synergies
REVENUE AND COST SYNERGIES EXPECTED RUN-RATE SYNERGIES OF CHF 160-180 MN BY 2025 ▪ Additional revenue synergies expected to be realized ▪ Expected run-rate Revenue through customer proximity and enhanced supply chain synergies of CHF Synergies to 160-180 mn p.a. ▪ Strong cross-selling opportunities
Slide 26: 6. Process and summary
6. PROCESS AND SUMMARY ® BUILDING TRUST By
Slide 27: Summary: acquisition accelerates Sika's growth strategy
SUMMARY ACQUISITION ACCELERATES SIKA’S GROWTH STRATEGY ▪ The combined company will drive the sustainability transformation of the construction industry further and faster. It will focus on new product improvements and will be a key enabler for sustainable solutions. ▪ Transaction is highly complemen
Slide 28: Building trust
BUILDING TRUST
Slide 29: 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