Sika Ag · SIX:SIKA

Sika — Investor Presentation (January 2018)

43 slides from Sika's investor presentation, Jan 9, 2018

  1. Slide 1: Sales Exceed CHF 6 Billion – Strong Growth of 8.9%

    SALES EXCEED CHF 6 BILLION – STRONG GROWTH OF 8.9% SIKA INVESTOR PRESENTATION, SALES 2017 JANUARY 9, 2018

  2. Slide 2: Table of Contents

    TABLE OF CONTENTS 1. SALES 2017 – CONTINUED GROWTH MOMENTUM 2. SUCCESSFUL STRATEGY EXECUTION 3. TARGETS 2020 4. OUTLOOK 2

  3. Slide 3: 1. Sales 2017 – Continued Growth Momentum

    1. SALES 2017 – CONTINUED GROWTH MOMENTUM

  4. Slide 4: Sales Exceed CHF 6 Billion for the First Time – Strong Growth of 8.9%

    SALES EXCEED CHF 6 BILLION FOR THE FIRST TIME – STRONG GROWTH OF 8.9% 1. Record results  +8.9% sales growth in local currencies, CHF 6.25 billion in sales  Accelerated fourth-quarter growth of 12.0%  Growth in all regions 2. Key investments  9 new factories in Mexico, Kazakhstan, Russia, Tanzani

  5. Slide 5: Sales Growth by Quarter – Strong Organic Growth

    SALES GROWTH BY QUARTER STRONG ORGANIC GROWTH 12.0% 12% 10.7% 10% 3.5% 2.2% 8% 7.4% 6.0% 6% 2.4% in LC 4.0% 3.4% 8.5% 2.6% 8.5% acquisition 4% 0.4% organic 0.4% 5.0% 3.6% 3.4% 2% 3.0% 0% Q3 PY Q4 PY Q1 CY Q2 CY Q3 CY Q4 CY in CHF mn Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Quarterly 1,525.6 1,415.9 1,389

  6. Slide 6: Growth Momentum Continues in 2017

    GROWTH MOMENTUM CONTINUES IN 2017 8.9% SALES GROWTH (8.6% IN CHF) + 7.4% + 18.4% 1.09 + 5.2% North America 1.13 + 3.2% 2.87 Asia/Pacific 0.59 EMEA Latin America 12M 2016 12M 2017 (in CHF billion, growth in LC) 6

  7. Slide 7: Sales 2017 – Growth in All Regions

    SALES 2017 GROWTH IN ALL REGIONS +7.4% +18.4% +5.2% +3.2% Growth (in LC) -0.8% +0.2% -0.4% +1.3% FX impact +2.5% +8.5% +0.6% +0.1% Acquisition Industry 21% Construction 79% EMEA North Asia/Pacific Latin America America 7

  8. Slide 8: Key Investments in 2017 – Expansion in Emerging Markets

    KEY INVESTMENTS IN 2017 EXPANSION IN EMERGING MARKETS Opening of Sika plants:  5th plant in Mexico (Coatzacoalcos, March 2017)  New and expanded site in Kazakhstan (Almaty, May 2017)  1st plant in Tanzania (Dar es Salaam, June 2017)  5th plant in Russia (Lobnya, July 2017)  New and expanded sit

  9. Slide 9: Key Investments in 2017 – New Subsidiaries

    KEY INVESTMENTS IN 2017 EXPANSION IN EMERGING MARKETS New subsidiaries:  Senegal (April 2017)  El Salvador (September 2017)  Bangladesh (December 2017) Now present in 100 countries with own national subsidiaries 9

  10. Slide 10: Sika's Subsidiaries

    SIKA’S 100 SUBSIDIARIES austin 1534 uRucuay 1858 # Ie 10 arin PORTUGAL 1550, ara-2007 I+] Usa 6 DENMARK 1960 SLA 771 ARGENTINA 1038 e a Menico 1968 TURKEY 350 PAKISTAN 200 tT TAIWAN 1991 it yoroaN -201 E ALceRia- 1997 care 1993 vmag-2012 i iRau-1977 [| I PRIUPPOUES 1992 MozaMsique-2018 i ll f Swene

  11. Slide 11: Continuing High Operating Speed in 2017 – Acquisitions

    CONTINUING HIGH OPERATING SPEED IN 2017 ACQUISITIONS Company Country Target Market Bitbau Dörr Austria Waterproofing ABC Sealants Turkey Sealing & Bonding KVK Czech Republic Roofing, Waterproofing, Refurbishment Butterfield USA Concrete Faist ChemTec Global Industry, Automotive Grupo Industrial Alce

  12. Slide 12: Acquisition of Faist ChemTec, Global

    KEY INVESTMENTS IN 2017 ACQUISITIONS AS GROWTH PLATFORM Acquisition of Faist ChemTec, Global  Leading manufacturer of high-performance engineered, structure- borne acoustic solutions for automotive industry  Faist ChemTec’s innovations are driven by megatrends, such as the increased need for comfo

  13. Slide 13: Acquisition of Emseal Joint Systems, USA

    KEY INVESTMENTS IN 2017 ACQUISITIONS AS GROWTH PLATFORM Acquisition of Emseal Joint Systems, USA  US-based market leader in development and manufacturing of structural expansion joint products for new construction and refurbishment  Extensive cross-selling opportunities for other Sika technologies

  14. Slide 14: 2. Successful Strategy Execution

    2. SUCCESSFUL STRATEGY EXECUTION

  15. Slide 15: Strategic Targets Confirmed for 2020

    STRATEGIC TARGETS CONFIRMED FOR 2020 SIKA’S GROWTH MODEL WILL DELIVER 1) Performance 2) Market Penetration 3) Innovation 4) Accelerated build-up of Emerging Markets 5) Acquisitions 6) Values 15

  16. Slide 16: 1) Performance

    1) PERFORMANCE ® BUILDING TRUST Ds

  17. Slide 17: Sika's Growth Model Delivers – Key Investments in the Last Six Years

    SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS IN THE LAST SIX YEARS PILLARS OF THE GROWTH MODEL ACHIEVEMENTS PILLARS OF THE GROWTH MODEL ACHIEVEMENTS MARKET PENETRATION  • Successful Target Market concept  • Megatrends driving growth INNOVATION  • 20 Global Technology Centers • 444 new patents fil

  18. Slide 18: Continued Growth in Sales and Profit (Full Year)

    SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN SALES AND PROFIT (FULL YEAR) NET SALES NET 7000 SALES 16.0% EBIT 1000 16.0% 13.8% % growth in local currencies as % of net sales 900 14.0% 6500 14.0% 800 12.3% 5.3% 9.4% 13.0% 6.2% 5.5% 8.9% 11.4% 12.0% 12.0% 10.2% 700 6000 10.0% 600 9.0% 10.0% 7.6% 5

  19. Slide 19: 2) Market Penetration

    2) MARKET PENETRATION ® BUILDING TRUST Ds

  20. Slide 20: Sika's Market Potential – Large and Growing Market Segments

    SIKA’S MARKET POTENTIAL LARGE AND GROWING MARKET SEGMENTS TOTAL MARKET SIZE 2016 2020 > CHF 70 BILLION CHF 80 BILLION INDUSTRY CONCRETE INDUSTRY CONCRETE WATER- FLOORING WATER- PROOFING FLOORING PROOFING ROOFING ROOFING SEALING & SEALING & BONDING BONDING REFURBISHMENT REFURBISHMENT 20

  21. Slide 21: Megatrends Drive Our Growth

    MEGATRENDS DRIVE OUR GROWTH URBANIZATION, NEW VEHICLE DESIGN AND SUSTAINABILITY New modular Increasing world Increased safety, fire, vehicle population with water, earthquake and manufacturing urbanization and quality requirements concepts need fast, megacities high strength bonding systems Rising d

  22. Slide 22: Market Penetration – Focus on Attractive Markets

    MARKET PENETRATION - FOCUS ON ATTRACTIVE MARKETS: CROSS-SELLING, LIFE-CYCLE MANAGEMENT, A STRONG BRAND Concrete Waterproofing Roofing Flooring & Coating Sealing & Bonding Refurbishment Industry 22

  23. Slide 23: Growth Model with Early Market Penetration

    GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW BUILD TO REFURBISHMENT Sika‘s Market Potential Sika‘s long-term Repair & market potential Sika is ideally positioned Refurbishment to profit from all phases of the construction life- Concrete cycle Market Education & repair, mortars, roofing, floor

  24. Slide 24: 3) Innovation

    3) INNOVATION ® BUILDING TRUST Ds

  25. Slide 25: Innovation – Strong Track Record

    INNOVATION STRONG TRACK RECORD More than Established 444 900 513 20 patents were employees are invention Technology filed in the dedicated to disclosures Centers last six years Research and in the last six worldwide Development years 25

  26. Slide 26: From Patents to World Class Products

    FROM PATENTS TO WORLD CLASS PRODUCTS INNOVATION INCREASES SALES AND PROFIT +20% ANNUAL ORGANIC 444 SALES GROWTH = INCREASE 1,600 NEW PRODUCTS 30% NEW PATENTS IN ANNUAL EBIT LAUNCHED IN THE THE LAST 6 LAST 6 YEARS CONTRIBUTION YEARS 26

  27. Slide 27: Major Trends in the Market

    FROM PATENTS TO WORLD CLASS PRODUCTS 3 MAJOR TRENDS IN THE MARKET Higher building standards  Urbanization and megacities require intelligent and safe building designs  Addressable market for fire protective coating products CHF 1 billion by 2024 3-D Concrete Printing  Paradigm shift in constructi

  28. Slide 28: Sika Automotive – Increase in Vehicle Content

    SIKA AUTOMOTIVE E.G. INNOVATIONS DRIVE INCREASE IN VEHICLE CONTENT AVERAGE VEHICLE CONTENT VW GOLF 7, E-GOLF VW PASSAT CONTENT: > CHF 40 CONTENT: > CHF 80 8.69 PSA 3008, 308, 5008 AUDI A3, A4, A5 7.94 7.36 CONTENT: > CHF 70 CONTENT: > CHF 40 6.75 6.19 JAGUAR XF MERCEDES S-CLASS 5.57 CONTENT: > CHF 1

  29. Slide 29: Sika Innovations Drive Growth – Workability for Concrete

    SIKA INNOVATIONS DRIVE GROWTH E.G. INCREASED WORKABILITY FOR CONCRETE Sika® ViscoFlow® IN-HOUSE DEVELOPED HIGH-PERFORMANCE POLYMER PERMITS > 8 HOURS WORKABILITY OF CONCRETE + 30% SALES GROWTH IN 2016 Tons sold 40'000 20'000 0 2013 2014 2015 2016 MEETING THE ALLOWING CHALLENGES OF LONG CONSTRUCTION I

  30. Slide 30: 4) Accelerated Build-up of Emerging Markets

    4) ACCELERATED BUILD-UP OF EMERGING MARKETS

  31. Slide 31: Emerging Markets Build-up in the Last Six Years

    EMERGING MARKETS BUILD-UP IN THE LAST SIX YEARS CAPTURING GROWTH POTENTIAL IN NEW MARKETS 54 11% 23 36% new average annual new of sales plants sales growth national in Emerging opened subsidiaries Markets 31

  32. Slide 32: 5) Acquisitions

    5) ACQUISITIONS ® BUILDING TRUST Ds

  33. Slide 33: Fragmentation Offers Acquisition Opportunities

    SIKA’S MARKET POTENTIAL FRAGMENTATION OFFERS ACQUISITION OPPORTUNITIES CONSTRUCTION CHEMICAL MARKET 2016 > CHF 60 BILLION Sika Top 10 companies with a combined market share of 40% Other 33

  34. Slide 34: Acquisitions in the Last Six Years

    ACQUISITIONS IN THE LAST SIX YEARS GROWTH PLATFORMS FOR THE FUTURE In all In all 28 1.02 7 4 acquisitions billion CHF Target regions additional Markets turnover 34

  35. Slide 35: 6) Values and Principles

    6) VALUES AND PRINCIPLES ® BUILDING TRUST Ds

  36. Slide 36: Sika's Values and Principles – Strong Corporate Culture

    SIKA’S VALUES AND PRINCIPLES STRONG CORPORATE CULTURE  Customer first  Courage for innovation  Sustainability & integrity  Empowerment and respect  Manage for results 36

  37. Slide 37: 3. Targets 2020

    3. TARGETS 2020 ® BUILDING TRUST Ds

  38. Slide 38: Strategic Targets 2020

    SIKA’S GROWTH MODEL WILL DELIVER STRATEGIC TARGETS 2020 MARKET PENETRATION 6 - 8% ANNUAL GROWTH 30 NEW PLANTS INNOVATION 105 NATIONAL SUBSIDIARIES EMERGING MARKETS 14 - 16% EBIT MARGIN PER YEAR ACQUISITIONS > 10% OPERATING FREE CASH FLOW PER YEAR VALUES > 25% ROCE PER YEAR 38

  39. Slide 39: More Than CHF 1 Billion EBIT in 2020

    SIKA’S GROWTH MODEL WILL DELIVER MORE THAN CHF 1 BILLION EBIT IN 2020  Megatrends Urbanization, New Vehicle Design and Sustainability drive growth  Fragmented market of CHF 80 billion with huge growth opportunities  Sika is ideally positioned to profit from all phases of the construction life- cy

  40. Slide 40: 4. Outlook

    4. OUTLOOK ® BUILDING TRUST Ds

  41. Slide 41: Outlook – Sika Continues to Implement Its Growth Strategy

    OUTLOOK SIKA CONTINUES TO IMPLEMENT ITS GROWTH STRATEGY  Disproportionally high growth in profit expected for the year 2017 as a whole  Sales increase of more than 10% in 2018 expected  Volatile and rising commodity prices will continue to present a challenge  Operating profit (EBIT) should enjo

  42. Slide 42: 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

  43. Slide 43: Thank You for Your Attention

    H y gs z Lam j oF j " [ie _ ’ =) | [S ie, WAL! =e a % \ F wee i = ii \ 4 nl - . : p = ite i " v ‘i 7 H fh oe : ‘ , i | =H = . F <. = 4 = . ore F } | ae p } | ~ . ‘ im x ’ id es THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

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