Slide 1: Sika on Track to Set Records After First Nine Months
SIKA ON TRACK TO SET RECORDS AFTER FIRST NINE MONTHS – STRONG GROWTH IN SALES AND EBIT SIKA COMPANY PRESENTATION OCTOBER 22, 2021
Slide 2: 1. Nine-Month Results 2021
1. NINE-MONTH RESULTS 2021 ® BUILDING TRUST By
Slide 3: Record Results in the First Nine Months of 2021
RECORD RESULTS IN THE FIRST NINE MONTHS OF 2021 GROWTH IN LOCAL CURRENCIES OF 18.1% - EBIT-GROWTH OF 32.2% 1. Sales and profit ▪ Sales growth of 18.1% in local currencies. Record sales of CHF 6,862.7 million (+18.2% in CHF). ▪ Record operating profit (EBIT) at CHF 1,054.0 million (+32.2%), EBIT-marg
Slide 4: Realized Acquisitions
RECORD RESULTS IN THE FIRST NINE MONTHS OF 2021 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, Closing in Q4 2021) Acquisition of American Acquisition of Be
Slide 5: Key Figures
RECORD RESULTS IN THE FIRST NINE MONTHS OF 2021 KEY FIGURES in CHF mn 2020 2021 Δ% Net sales 5,805.5 6,862.7 +18.2% Gross results as % of net sales 54.6 52.6 EBITDA 1,071.4 1,327.5 +23.9% EBIT 797.1 1,054.0 +32.2% Net profit 561.5 765.1 +36.3% 5
Slide 6: 18.1% Sales Growth
RECORD RESULTS IN THE FIRST NINE MONTHS OF 2021 18.1% SALES GROWTH 18.1% 15.1% 1.3% 14% 2.6% 11.0% 16.8% 9% 4% 9.2% in LC 4.1% acquisition organic -1% -6.6% -6% 9M 2019 9M 2020 9M 2020 in CHF mn 9M 2019 9M 2020 9M 2021 Net sales 6,007.3 5,805.5 6,862.7 6
Slide 7: Growth in All Regions
RECORD RESULTS IN THE FIRST NINE MONTHS OF 2021 GROWTH IN ALL REGIONS +18.5% +17.2% +22.0% +9.6% Growth in CHF +17.6% +19.3% +20.7% +9.9% Growth in LC +0.9% -2.1% +1.3% -0.3% FX impact +1.6% +2.3% +0.0% +0.0% Acquisition 18% 82% Construction Industry EMEA Americas Asia/Pacific Global Business 7
Slide 8: Growth Momentum Continues in First Nine Months
GROWTH MOMENTUM CONTINUES IN FIRST NINE MONTHS 18.1% SALES GROWTH (18.2% IN CHF) +17.6% +20.7% +9.9% +19.3% 1,493 498 1,774 3,098 Asia/Pacific Global Business Americas EMEA 9M 2020 9M 2021 (in CHF mn, growth in LC) 8
Slide 9: Sika's Growth Model Delivers Record Results
SIKA’S GROWTH MODEL DELIVERS RECORD RESULTS IN THE FIRST NINE MONTHS OF 2021 Net NETSales SALES Net EBIT Profit NET SALES +18.1% in CHF mn, growth in LC in CHF mn +15.1% +2.6% +14.1% +7.9% 6,862.7 1,054.0 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 9
Slide 10: 2. Megatrends and Profitable Growth Strategy 2023
2. MEGATRENDS AND PROFITABLE GROWTH STRATEGY 2023
Slide 11: Resilient Strategy – Major Megatrends Supporting Growth
RESILIENT STRATEGY – MAJOR MEGATRENDS SUPPORTING GROWTH FURTHER ACCELERATION Digitalization Technological Climate Change and Progress Scarcity of Resources Demographic Dynamic Urbanization Change Economy 11
Slide 12: Digitalization and Strong Customer Focus
DIGITALIZATION AND STRONG CUSTOMER FOCUS FAST GROWING OPPORTUNITY 01 ▪ Digital customer centricity 02 ▪ Strong online recognition ▪ Operational excellence (Industry 4.0) ▪ Best customer/user Digital Board ▪ Innovation and new business models Digital Design experience ▪ Efficient knowledge worker 03
Slide 13: E-Commerce – A Strong Growing New Channel to Market
DIGITALIZATION AND STRONG CUSTOMER FOCUS E-COMMERCE – A STRONG GROWING NEW CHANNEL TO MARKET Delivery E-Commerce 60 M 50 M 40 M > 50% 30 M 20 M 10 M 0M 2020 2021e With higher margins than in traditional Click&Collect distribution business 13
Slide 14: Government Incentive Programs
GOVERNMENT INCENTIVE PROGRAMS CHF ~10 TRILLION PLANNED STIMULI FOR INFRASTRUCTURE Asia/Pacific stimulus programs CHF ~8 trillion ▪ Extensive infrastructure programs stimulate economies around the globe ▪ Government initiatives in many countries lead to climate-related Americas stimulus programs legi
Slide 15: Resilient Growth Strategy 2023
RESILIENT GROWTH STRATEGY 2023 STRATEGIC TARGETS CONFIRMED DESPITE PANDEMIC 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
Slide 16: Market Penetration – Strong Growth Opportunities
MARKET PENETRATION – STRONG GROWTH OPPORTUNITIES INCREASE MARKET SHARE TO 12% Construction chemicals Construction chemicals Driver for future growth: market 2021 market 2025 approx. CHF 70 billion approx. CHF 80 billion How Sika increases market share Sika 12% 1 Market Penetration Sika 10% Others +2
Slide 17: Innovation – More Performance, More Sustainable
INNOVATION MORE PERFORMANCE – MORE SUSTAINABLE FIVE CORE TECHNOLOGIES Drive increase of productivity and sustainability in construction and industry Concrete Technology Cementitious Systems Focus on Sika’s 1 five core technologies More 2 25% of sales with new products Coating Systems Adhesive System
Slide 18: Operational Efficiency Drives Margin Improvement
OPERATIONAL EFFICIENCY DRIVES MARGIN IMPROVEMENT LEVERAGE, AUTOMATION, DIGITALIZATION, AND CLUSTER APPROACH Sika’s footprint significantly expanded over the years 1 Operations / Factory Efficiency Initiatives to 2 Formulation Efficiency increase operational 3 Logistics efficiency 4 Procurement 5 Sal
Slide 19: Acquisitions as Growth Platforms
ACQUISITIONS AS GROWTH PLATFORMS REINFORCEMENTS IN ALL REGIONS AND TECHNOLOGIES 1 Fragmentation offers acquisition opportunities 2 Sika acting as market consolidator 3 More than 70 bolt-on acquisitions in the last 14 years 4 Acquisitions as growth platforms Sika 10% 5 Solid pipeline Competitor A 4%
Slide 20: Values and Principles
VALUES AND PRINCIPLES PEOPLE, PEOPLE, PEOPLE Customer first 25,000 HIGH Courage for innovation employees COMMITMENT Values and OF EMPLOYEES Sustainability and integrity Principles 6.4% DURING Empowerment and respect employee turnover PANDEMIC Manage for results rate in 2020 Our People – Our Success:
Slide 21: Sustainability
SUSTAINABILITY 70% OF SIKA PRODUCTS WITH POSITIVE SUSTAINABLE IMPACT ▪ 70% of Sika products with a positive, sustainable impact ▪ Sika products help to reduce the CO2 footprint of our customers Sustainable Solutions Community Engagement Our Occupational Safety More Value Less Impact Climate Performa
Slide 22: 3. Driving Towards an EBIT Margin of 15%-18%
3. DRIVING TOWARDS AN EBIT MARGIN OF 15%-18%
Slide 23: Improving Margin Through Consistent Strategy Execution
DRIVING TOWARDS AN EBIT MARGIN OF 15%-18% IMPROVING MARGIN THROUGH CONSISTENT STRATEGY EXECUTION EBIT EBIT15%-18% NS 15-18% NS EBIT 14.4% NS 1,131 EBIT 2020 Organic Growth Material Margin Operational M&A EBIT 2023 Management Efficiency 23
Slide 24: Growth and Leverage
GROWTH AND LEVERAGE GROWTH INITIATIVES DRIVING OPERATING LEVERAGE Cross Selling Direct Sales Application EBIT ▪ Targeted initiatives supporting improved 2 operating leverage EBIT Application Application 1 1 ▪ Through all channels (direct/indirect) Sales Cost Sales Cost ▪ Organic growth rate driving
Slide 25: Material Margin Management
MATERIAL MARGIN MANAGEMENT 54% – 55% RANGE THROUGH CYCLE ▪ Targeted material margin range of 54% – 55% through cycle 15%-18% ▪ Innovation, structural procurement programs and formulation efficiency with ongoing positive impact ▪ Good and increasing pricing impact with timing gap given unprecedented/
Slide 26: Material Margin Management – Continuous Improvement Projects
MATERIAL MARGIN MANAGEMENT CONTINUOUS IMPROVEMENT PROJECTS Example: Packaging Example: Technology Improvements ▪ Program to use recyled input material for more than ▪ Formulation efficiency programs in Asia Pacific 20 million cartridges produced in the UK Improving packaging composition Low cement m
Slide 27: Operational Efficiency with Strong Impact
OPERATIONAL EFFICIENCY WITH STRONG IMPACT 0.5% PTS IMPACT ANNUALLY ▪ Structured, continuous improvement program across value chain, all levels 15%-18% ▪ Positive impact of 0.5% pts. Annually ▪ Sustainability initiatives positively impacting operations cost 1,131 ▪ Factory and warehouse consolidation
Slide 28: Operational Efficiency with Strong Impact – Examples
OPERATIONAL EFFICIENCY WITH STRONG IMPACT 0.5% PTS IMPACT ANNUALLY Example: USA Footprint Simplification Example: Solar Energy Initiatives ▪ Production/WH integration in Southern California ▪ Program focusing on energy efficiency and renewable energy sources Production Warehouse Offices Warehouse Se
Slide 29: Synergies from Acquisitions to Overcompensate Dilution Effect
SYNERGIES FROM ACQUISITIONS TO OVERCOMPENSATE DILUTION EFFECT IN 2021 ▪ M&A as growth platform, lifting margin 15%-18% profile over time ▪ Parex impact plus further M&A ▪ 2022 run-rate synergies of CHF 100 1,131 million fully validated and confirmed EBIT 2020 Organic Growth Material Operational M&A
Slide 30: Acquisitions 2016–2020
ACQUISITIONS 2016 – 2020 SIGNIFICANT AND INCREASING CONTRIBUTION OVER TIME * 2 5 4 7 3 # of transactions *excluding one-time cost 30
Slide 31: 4. Sika's Sustainability Journey
4. SIKA’S SUSTAINABILITY JOURNEY
Slide 32: Sustainability Milestones
SUSTAINABILITY MILESTONES THE SIKA WAY 2019 Sika integrates “Sustainability” 2015 into the Corporate 2021 2010 Paris 2018 Strategy (incl. in COP26 will be Sika becomes Agreement Sika’s compensation) held in a member of 2014 Materiality November 2020 the WBCSD 1st Sika GRI Matrix 2018 “Sika as Enable
Slide 33: Sika Roadmap to Net Zero
SIKA ROADMAP TO NET ZERO INTEGRATING SUSTAINABILITY INTO THE BUSINESS STRATEGY JAN-MAR APR-JUNE JULY-SEP OCT-DEC JAN-MAR APR-JUNE OCT Materiality Capital Markets Annual and Strategy 2027 Day 2022 Scope 3 Sustainability, Analysis Materiality Sustainability (business+ kick-off ESG, Scope 3 kick-off An
Slide 34: 5. Sika as Enabler
5. SIKA AS ENABLER ® BUILDING TRUST By
Slide 35: Sika as Enabler for a Sustainable Future
SIKA AS ENABLER FOR A SUSTAINABLE FUTURE Construction Automotive 40% of global CO2 emissions Road traffic responsible for attributable to construction fifth of global greenhouse and building sector gases Huge opportunity as potential for progress is immense Sika offers the solutions and has the inno
Slide 36: Solutions to Drive a Sustainable Future
SIKA AS ENABLER SOLUTIONS TO DRIVE A SUSTAINABLE FUTURE Durability Clinker reduction Roofing By increasing the lifespan of Sika solutions enable high Sika’s wide range of durable buildings, Sika solutions clinker reduction in cement and long-lasting roofing contribute to carbon and concrete, even wh
Slide 37: Breakthrough in Concrete Recycling
BREAKTHROUGH IN CONCRETE RECYCLING STRONG MODEL FOR THE CIRCULAR ECONOMY Sika’s new patented recycling process for concrete demolition waste Sika Additive Sika’s new recycling process for used concrete separates Sand the components completely. Old Concrete They can be re-used SCM* for new concrete.
Slide 38: Sika as Enabler – Heat Loss Reduction by 35%
SIKA AS ENABLER HEAT LOSS REDUCTION BY 35% Examples of Sika applications and products for sustainable buildings Where heat escapes 26% Roofs Roofing systems 33% Walls Facades 21% Windows & Doors 8% Floor Windows & Doors Flooring 12% Ventilation Interior Finishing 35% Waterproofing of heat loss reduc
Slide 39: 6. Outlook
6. OUTLOOK ® BUILDING TRUST By
Slide 40: Annual Target for Fiscal Year 2021
ANNUAL TARGET FOR FISCAL YEAR 2021 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Outlook for 2021 confirmed ▪ Sales growth in local currencies between 13 and 17% ▪ Over-proportional EBIT increase ▪ The EBIT margin will reach 15% for the first time, despite a challenging raw material price development
Slide 41: Winning Together – Building the Future
WINNING TOGETHER – BUILDING THE FUTURE
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