Sika Ag · SIX:SIKA
Sika — H1 2022 Earnings Presentation
34 slides from Sika's earnings presentation, Jul 22, 2022
Slide 1: Our First Half-Year 2022: Records in Sales, EBIT, and Profit
OUR FIRST HALF-YEAR 2022 RECORDS IN SALES, EBIT, AND PROFIT SIKA INVESTOR PRESENTATION BAAR, JULY 22, 2022
Slide 2: 1. OUR FIRST HALF-YEAR 2022 – RECORDS IN SALES, EBIT, AND PROFIT 2. SIKA’S
1. OUR FIRST HALF-YEAR 2022 – RECORDS IN SALES, EBIT, AND PROFIT 2. SIKA’S GROWTH DRIVERS 3. UPDATE ON MBCC ACQUISITION 4. OUTLOOK
Slide 3: Our First Half-Year 2022 – Records in Sales, EBIT, and Profit
1. OUR FIRST HALF-YEAR 2022 – RECORDS IN SALES, EBIT, AND PROFIT
Slide 4: Record Results in the First Half of 2022
RECORD RESULTS IN THE FIRST HALF OF 2022 GROWTH IN LOCAL CURRENCIES OF 19.5% - EBIT GROWTH OF 22.7% 1. Sales and profit ▪ Sales growth of 19.5% in local currencies. Record sales of CHF 5,250.3 million (+18.0% in CHF). ▪ Record operating profit (EBIT) at CHF 841.9 million (+22.7%), including profit f
Slide 5: Highlights in 2022: Acquisitions & Divestments
HIGHLIGHTS IN 2022 ACQUISITIONS & DIVESTMENTS Closing of transaction related to Acquisition of Sable Marco, Divestment of Aliva divestment of European industrial Canada (March 2022) (May 2022) coatings business (April 2022) Acquisition of UGL, USA Sika to acquire MBCC Group (May 2022) (expected clos
Slide 6: Highlights in 2022: New Plants
HIGHLIGHTS IN 2022 NEW PLANTS Opening of a new Opening of a new plant in the Ivory plant in Tanzania Coast (February 2022) (February 2022) Opening of new Opening of new plant near plant in Bolivia Washington D.C. (May 2022) (June 2022) 6
Slide 7: Record Results: EBIT Margin at 16.0%
RECORD RESULTS IN THE FIRST HALF OF 2022 EBIT-MARGIN AT 16.0% in CHF mn 2021 NS 2022 NS Growth Net sales 4,448.7 100% 5,250.3 100% 18.0% Gross result 2,372.8 53.3% 2,592.2 49.4% 9.2% Personnel expenses -813.3 -18.3% 882.4 -16.8% Other OPEX -692.5 -15.5% -673.7 -12.9% EBITDA 867.0 19.5% 1,036.1 19.7%
Slide 8: Growth in Local Currencies of 19.5%
RECORD RESULTS IN THE FIRST HALF OF 2022 GROWTH IN LOCAL CURRENCIES OF 19.5% 23.5% 19.5% 1.1% 2.9% 4.0% 22.4% 13.4% 15.5% in LC acquisition organic -10.5% in CHF mn 1 HY 2020 1 HY 2021 1 HY 2022 Sales 3,614.6 4,448.7 5,250.3 8
Slide 9: Growth in Local Currencies of 19.5% by Region
RECORD RESULTS IN THE FIRST HALF OF 2022 GROWTH IN LOCAL CURRENCIES OF 19.5% +7.6% +39.5% +17.7% +12.0% Growth in CHF +12.9% +35.8% +17.0% +13.2% Growth in LC -5.3% +3.7% +0.7% -1.2% FX impact -0.5% +8.4% +7.8% +5.7% Acquisition 18% 82% Construction Industry 9 EMEA Americas Asia/Pacific Global Busin
Slide 10: All Regions with Double-Digit Growth
RECORD RESULTS IN THE FIRST HALF OF 2022 ALL REGIONS WITH DOUBLE-DIGIT GROWTH HY 2021 HY 2022 + 12.9% (in CHF billion, growth in LC) + 19.5% + 35.8% + 17.0% + 13.2% 1.54 2.19 1.13 0.39 5.25 Americas EMEA Asia/Pacific Global Business Group 10
Slide 11: Sika's Growth Model Delivers Continuous Strong Performance
SIKA’S GROWTH MODEL DELIVERS CONTINUOUS STRONG PERFORMANCE Net NETSales SALES(Half-year) Net EBIT (Half-year) Profit NET SALES +19.5% in CHF mn in CHF mn, growth in LC +23.5% +9.6% +2.9% +13.9% 5,250.3 +8.1% 841.9 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 11
Slide 12: Sika's Growth Drivers
2. SIKA’S GROWTH DRIVERS ® BUILDING TRUST By
Slide 13: Resilient Strategy – Major Megatrends Supporting Growth
RESILIENT STRATEGY – MAJOR MEGATRENDS SUPPORTING GROWTH FURTHER ACCELERATION THROUGH DIGITALIZATION Urbanization Climate Change and Digitalization Scarcity of Resources Demographic Dynamic Technological Change Economy Progress 13
Slide 14: Resilient Growth Strategy 2023: Strategic Targets Confirmed
RESILIENT GROWTH STRATEGY 2023 STRATEGIC TARGETS CONFIRMED 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-mate
Slide 15: Sika Highlights Strong Performance During Turbulent Years
SIKA HIGHLIGHTS STRONG PERFORMANCE DURING TURBULENT YEARS Net Sales EBIT in CHF mn In CHF mn 2Y CAGR 2Y CAGR* +14.8% +10.0% 1,391.4 9,252.3 2019 2020 2021 2019 2020 2021 *Growth in % LC 15
Slide 16: Growth Driver – Africa Expansion
GROWTH DRIVER – AFRICA EXPANSION AFRICA IS JUST BEING BUILT ▪ Since 2014, Sika has opened 10 new national subsidiaries and is now present in 18 countries ▪ Sika operates 22 production sites and generates sales of CHF 300 million in Africa ▪ Population in Africa expected to double to over 2 billion p
Slide 17: Growth Driver – Repair and Refurbishment
GROWTH DRIVER – REPAIR AND REFURBISHMENT HIGHLY RESILIENT THROUGH THE CYCLES ▪ High resilience of refurbishment 55% of Group sales in construction In mature markets, 70% of sales in through economic cycles generated by refurbishment construction generated by refurbishment ▪ Corrective maintenance ca
Slide 18: Growth Driver – Infrastructure Programs
GROWTH DRIVER – INFRASTRUCTURE PROGRAMS CHF 10 TRILLION PLANNED STIMULI EU working towards US infrastructure climate neutrality investments running approx. CHF China invests in technology into the billions approx. CHF 400 billion and infrastructure approx. CHF 850 billion 8,000 billion ▪ Extensive i
Slide 19: Global Automotive Production Recovery Expected
GLOBAL AUTOMOTIVE PRODUCTION RECOVERY EXPECTED IN THE NEXT FEW YEARS in mn units 100 95 Strong recovery expected 90 Following the pandemic-related decline, a full recovery in global automotive production is predicted 85 to happen by 2025. 80 75 Global automotive production 70 Forecast (as of May 202
Slide 20: Growth Driver – Sustainable Development: Environmentally-Friendly Construction
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT ENVIRONMENTALLY-FRIENDLY CONSTRUCTION Durability Clinker reduction Roofing By increasing the lifespan of Sika solutions enable clinker Sika’s wide range of durable buildings, Sika solutions help reduction in cement and and long-lasting roofing reduce the carbo
Slide 21: reCO2ver – Sika Breakthrough Innovation
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT reCO2ver® – SIKA BREAKTHROUGH INNOVATION Segregates concrete back to its original ingredients to be re-used for new high-grade concrete This unique process includes sequestration of CO2 and produces high quality SCM powder which allows reduction of cement in n
Slide 22: Main Changes in Governance and Sustainability Reporting
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT MAIN CHANGES IN GOVERNANCE AND SUSTAINABILITY REPORTING Newly created position of Chief Innovation and Sustainability Officer Formation of Sustainability Committee consisting of three Board members with focus on environmental and social topics and sustainabili
Slide 23: Sika Roadmap to Net Zero
GROWTH DRIVER – SUSTAINABLE DEVELOPMENT SIKA ROADMAP TO NET ZERO A great opportunity to position Sika as a sustainability champion 23
Slide 24: Growth Driver – Employee Engagement
GROWTH DRIVER – EMPLOYEE ENGAGEMENT OUR ENABLERS 27,000 employees Our employees enable our success. With their hard work and dedication, they allow Sika to successfully implement its strategy of sustainable growth. 24
Slide 25: Update on MBCC Acquisition
3. UPDATE ON MBCC ACQUISITION
Slide 26: Entering an Exciting Next Chapter
UPDATE ON MBCC ACQUISITION ENTERING AN EXCITING NEXT CHAPTER Strong business rationale ▪ We have highly complementary products and distribution channels ▪ We will accelerate Sika’s Growth Strategy 2023 together ▪ Together, we will enable our customers and the construction industry to navigate the su
Slide 27: Better Than Expected Results for MBCC for 2021
UPDATE ON MBCC ACQUISITION BETTER THAN EXPECTED RESULTS FOR MBCC FOR 2021 ▪ In 2021, MBCC performed better than forecast with strong growth and profitability. It acquired four companies while continuing to strengthen its position as a powerhouse for sustainable construction solutions ▪ Sika/MBCC int
Slide 28: Complementary in Many Ways
UPDATE ON MBCC ACQUISITION COMPLEMENTARY IN MANY WAYS Complementary in many countries, regions, and product ranges. Combination will lead to a very balanced offering. Customers will benefit from a stronger solution portfolio, as well as an enhanced and more efficient distribution network across all
Slide 29: We Will Have an Even Stronger Product Range Together
UPDATE ON MBCC ACQUISITION WE WILL HAVE AN EVEN STRONGER PRODUCT RANGE TOGETHER Sikaplan® Sika Power® Sika Sikafloor® PVC membrane for waterproofing epoxy-based toughened adhesive admixtures and solutions for con- self-leveling screeds for both new and waterproofing products to produce extra-long bl
Slide 30: Based on Strong Shared Values and Principles
UPDATE ON MBCC ACQUISITION BASED ON STRONG SHARED VALUES AND PRINCIPLES Joining values to provide world-class service to customers, foster a healthy working environment for employees, and continue our strong growth around the world. Customer first Courage for Make the impossible innovation possible
Slide 31: Outlook
4. OUTLOOK ® BUILDING TRUST By
Slide 32: Outlook 2022: Continuation of Successful Growth Strategy
OUTLOOK 2022 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Sales increase by well over 10% in local currencies, surpassing CHF 10 billion for the Expected sales first time ▪ Over-proportional EBIT increase expected for for 2022 the year > 10 ▪ Confirmation of 2023 strategic targets for sustainable, p
Slide 33: Thank You for Your Attention
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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